Santa Paula-based avocado giant Calavo Growers Inc. this week announced the immediate retirement of its CEO, along with a third-quarter loss.
The retirement of outgoing CEO James Gibson, announced on Wednesday, took effect Thursday. Gibson, who has spent more than 10 years with the company and has been the company’s top executive since February 2020, will remain as an employee until the end of September to help with the transition, according to the release from the company.
Wednesday’s announcement from the publicly-traded company accompanied third-quarter financial results, including a net loss of $ 13 million. The amount was lower than the loss of $ 15.6 million reported in the same quarter last year, but the company’s adjusted figures showed a different result: an adjusted net loss of $ 3 million over the course of the year. of the most recent quarter compared to adjusted net income of $ 12.9 million a year earlier.
Steven Hollister, new interim CEO and interim CFO of Calavo, said in a statement that quarterly results were “negatively affected by inflationary pressures on labor, commodities and freight, which are falling. are all accelerated “in the third trimester. The delayed summer harvests in California and Mexico also impacted margins and profitability, he said.
Hollister has served on the company’s board of directors since 2008 and has extensive experience in finance and the Central Coast wine industry.
The company was founded in 1924 to sell avocados from California, but has since grown into an international powerhouse with produce also grown in Mexico, Peru and Colombia. It also markets tomatoes and papayas as well as prepared products.
Avocados bring in nearly $ 180 million in Ventura County, said Ed Williams, county agriculture commissioner, making avocados the fourth most valuable crop in the nearly $ 2 billion agricultural sector. county dollars, according to the 2020 Crop Report.
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Williams described Calavo as a growers cooperative with a significant presence in the industry.
“They are very important, especially for some of the small producers,” who have the same marketing and packaging opportunities as the large producers, Williams said. A significant amount of avocados from Ventura County and California are handled, packaged and marketed through Calavo, he said.
Williams said Calavo’s change in leadership is a “big deal” for the industry, although he said he didn’t know the details.
“It was news for me,” he said of the announcement. “I did not know.”
The company’s chief executive reports to a board made up mostly of producers, he said.
John Krist, CEO of the Farm Bureau of Ventura County, also said he hasn’t heard much about the inner workings of the business.
Krist said the pandemic chaos in the supply chain continues, with trucking and shipping costs in particular skyrocketing. Packaging costs are also increasing, he said.
“I’m not particularly surprised to see a company that transports so much fruit around the world take a hit,” Krist said.
The company’s total revenue for the third quarter increased 5% to $ 285 million, while gross profit as a percentage of revenue declined year-over-year to 7, $ 9 million, or 2.8% of revenue, compared to $ 30.8 million, or 11.4% of revenue.
Hollister said the company is taking the necessary steps to ease the higher cost environment, navigate a tight job market and address supply chain issues.
“As we go through a difficult time … we believe we will become a stronger, more resilient company,” Hollister said in a statement.
The company is listed on the Nasdaq under the symbol CVGW. Shares closed at $ 39.98 on Friday, down from a 52-week high of $ 85.40 and near a 52-week low of $ 38.20.