0001558370-20-014499 | 10-K | XBRL Viewer

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Document and Entity Information - USD ($) $ in Billions	12 Months Ended
Document and Entity Information - USD ($) $ in Billions	Oct. 31, 2020	Nov. 30, 2020	Apr. 30, 2020
Document and Entity Information
Document Type	10-K
Document Annual Report	true
Document Period End Date	Oct. 31, 2020
Document Transition Report	false
Entity File Number	000-33385
Entity Registrant Name	CALAVO GROWERS, INC
Entity Incorporation, State or Country Code	CA
Entity Tax Identification Number	33-0945304
Entity Address, Address Line One	1141-A Cummings Road
Entity Address, City or Town	Santa Paula
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	93060
City Area Code	805
Local Phone Number	525-1245
Title of 12(b) Security	Common Stock
Trading Symbol	CVGW
Security Exchange Name	NASDAQ
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
ICFR Auditor Attestation Flag	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		17,689,818
Entity Public Float			$ 0.9
Entity Central Index Key	0001133470
Current Fiscal Year End Date	--10-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	FY
Amendment Flag	false

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Oct. 31, 2020	Oct. 31, 2019
Current assets:
Cash and cash equivalents	$ 4,055	$ 7,973
Accounts receivable, net of allowances of $3,498 (2020) $3,366 (2019)	63,668	63,423
Inventories, net	41,787	36,889
Prepaid expenses and other current assets	10,733	9,027
Advances to suppliers	5,061	7,338
Income taxes receivable	10,591	2,865
Total current assets	135,895	127,515
Property, plant, and equipment, net	130,270	132,098
Operating lease right-of-use assets	60,262
Investment in Limoneira Company	23,197	31,734
Investments in unconsolidated entities	6,065	10,722
Deferred income taxes	2,486	3,447
Goodwill	28,568	18,262
Notes receivable from FreshRealm		35,241
Intangibles, net	10,323	435
Other assets	32,558	30,906
Total assets	429,624	390,360
Current liabilities:
Payable to growers	11,346	13,463
Trade accounts payable	9,384	17,421
Accrued expenses	36,922	39,629
Short-term borrowings	20,550
Dividend payable	20,343	19,354
Current portion of operating leases	6,443
Current portion of long-term obligations and finance leases	1,343	762
Total current liabilities	106,331	90,629
Long-term liabilities:
Long-term operating leases, less current portion	58,273
Long-term obligations and finance leases, less current portion	5,716	5,412
Deferred rent		3,681
Other long-term liabilities	3,302	4,769
Total long-term liabilities	67,291	13,862
Commitments and contingencies
Shareholders' equity:
Common stock ($0.001 par value, 100,000 shares authorized; 17,661 (2020) and 17,595 (2019) shares issued and outstanding)	18	18
Additional paid-in capital	165,000	161,606
Noncontrolling interest	1,472	1,688
Retained earnings	89,512	122,557
Total shareholders' equity	256,002	285,869
Total liabilities and shareholders' equity	$ 429,624	$ 390,360

CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) - USD ($) shares in Thousands, $ in Thousands	Oct. 31, 2020	Oct. 31, 2019
Statement of Financial Position [Abstract]
Allowances of accounts receivable	$ 3,498	$ 3,366
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	100,000	100,000
Common stock, shares issued	17,661	17,595
Common stock, shares outstanding	17,661	17,595

CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Oct. 31, 2020	Oct. 31, 2019	Oct. 31, 2018
Income Statement [Abstract]
Net sales	$ 1,059,371	$ 1,195,777	$ 1,088,758
Cost of sales	969,473	1,067,695	975,142
Gross profit	89,898	128,082	113,616
Selling, general and administrative	57,952	59,113	57,081
Gain on sale of Temecula packinghouse	216	2,077
Operating income	32,162	71,046	56,535
Interest income	1,998	2,675	318
Interest expense	(877)	(948)	(831)
Other income, net	553	499	559
Loss on reserve for FreshRealm note receivable and impairment of investment	(37,322)
Unrealized and realized net loss on Limoneira shares	(8,537)	(9,722)
Income (loss) before provision (benefit) for income taxes and loss from unconsolidated entities	(12,023)	63,550	56,581
Income tax benefit (provision)	4,292	(12,882)	(12,719)
Net loss from unconsolidated entities	(6,110)	(14,082)	(11,850)
Net income (loss)	(13,841)	36,586	32,012
Less: Net loss attributable to noncontrolling interest	216	60	269
Net income (loss) attributable to Calavo Growers, Inc.	$ (13,625)	$ 36,646	$ 32,281
Calavo Growers, Inc.'s net income (loss) per share:
Basic	$ (0.78)	$ 2.09	$ 1.85
Diluted	$ (0.78)	$ 2.08	$ 1.84
Number of shares used in per share computation:
Basic	17,564	17,519	17,477
Diluted	17,564	17,593	17,568

CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	12 Months Ended
	Oct. 31, 2020	Oct. 31, 2019	Oct. 31, 2018
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ (13,841)	$ 36,586	$ 32,012
Other comprehensive income, before tax:
Unrealized investment gains			2,247
Income tax expense related to items of other comprehensive income			(540)
Other comprehensive income, net of tax			1,707
Comprehensive income (loss)	(13,841)	36,586	33,719
Less: Net loss attributable to noncontrolling interest	216	60	269
Comprehensive income (loss) - Calavo Growers, Inc.	$ (13,625)	$ 36,646	$ 33,988

- Definition

Amount after tax of increase (decrease) in equity from transactions and other events and circumstances from net income and other comprehensive income. Excludes changes in equity resulting from investments by owners and distributions to owners.

+ References + Details

- Definition

Amount after tax and reclassification adjustments of other comprehensive income (loss).

+ References

+ Details

- Definition

The consolidated profit or loss for the period, net of income taxes, including the portion attributable to the noncontrolling interest.

+ References

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+ Details

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Accumulated Other Comprehensive Income [Member]	Retained Earnings Cumulative effect adjustment	Retained Earnings	Noncontrolling Interest [Member]	Cumulative effect adjustment	Total
Beginning balance at Oct. 31, 2017	$ 18	$ 154,243	$ 10,434		$ 78,411	$ 1,016		$ 244,122
Beginning balance, shares at Oct. 31, 2017	17,533
Exercise of stock options and income tax benefit		53						53
Exercise of stock options and income tax benefit, shares	3
Stock compensation expense		3,742						3,742
Restricted stock issued		891						891
Restricted stock issued, shares	31
Unrealized gain on Limoneira investment, net			1,707					1,707
Dividend declared to shareholders					(17,568)			(17,568)
Noncash transfer of noncontrolling interest		(1,001)				1,001
Avocados de Jalisco noncontrolling interest contribution						(269)		(269)
Net income (loss) attributable to Calavo Growers, Inc.					32,281			32,281
Ending balance at Oct. 31, 2018	$ 18	157,928	12,141		93,124	1,748		264,959
Ending balance, shares at Oct. 31, 2018	17,567
Exercise of stock options and income tax benefit		85						85
Exercise of stock options and income tax benefit, shares	4
Stock compensation expense		3,593						3,593
Restricted stock issued, shares	24
Unrealized gain on Limoneira investment, net			$ (12,141)		12,141
Dividend declared to shareholders					(19,354)			(19,354)
Avocados de Jalisco noncontrolling interest contribution						(60)		(60)
Net income (loss) attributable to Calavo Growers, Inc.					36,646			36,646
Ending balance at Oct. 31, 2019	$ 18	161,606			122,557	1,688		285,869
Ending balance, shares at Oct. 31, 2019	17,595
Exercise of stock options and income tax benefit		86						86
Exercise of stock options and income tax benefit, shares	2
Stock compensation expense		4,487						4,487
Restricted stock issued, shares	64
Dividend declared to shareholders					(20,343)			(20,343)
Payments of minimum withholding taxes on net share settlement of equity awards		(1,179)						(1,179)
Avocados de Jalisco noncontrolling interest contribution						(216)		(216)
Net income (loss) attributable to Calavo Growers, Inc.					(13,625)			(13,625)
Ending balance at Oct. 31, 2020	$ 18	$ 165,000		$ 923	$ 89,512	$ 1,472	$ 923	$ 256,002
Ending balance, shares at Oct. 31, 2020	17,661

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (PARENTHETICAL) - $ / shares			12 Months Ended
	Oct. 26, 2020	Dec. 06, 2019	Oct. 31, 2020	Oct. 31, 2019	Oct. 31, 2018
Statement of Stockholders' Equity [Abstract]
Dividend declared per share	$ 1.15	$ 1.10	$ 1.15	$ 1.10	$ 1.00

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Oct. 31, 2020	Oct. 31, 2019	Oct. 31, 2018
Cash Flows from Operating Activities:
Net income (loss)	$ (13,841)	$ 36,586	$ 32,012
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	16,093	13,633	13,042
Non-cash operating lease expense	176
Provision for losses on accounts receivable	22	35	(10)
Net loss from unconsolidated entities	6,110	14,082	11,850
Net loss from unconsolidated entities			11,851
Unrealized and realized net loss on Limoneira shares	8,537	9,722
Loss on reserve for FreshRealm note receivable and impairment of investment	37,322
Interest income on notes to FreshRealm	(1,732)	(2,435)
Stock-based compensation expense	4,487	3,593	4,633
Gain on sale of Temecula packinghouse	(216)	(2,077)
Loss on disposal of property, plant, and equipment	32	304	121
Deferred income taxes	(1,930)	930	4,866
Effect on cash of changes in operating assets and liabilities:
Accounts receivable, net	1,859	2,685	3,617
Inventories, net	(4,206)	(1,845)	(4,186)
Prepaid expenses and other current assets	(782)	(2,508)	(729)
Advances to suppliers	3,077	(983)	(1,009)
Income taxes receivable/payable	(8,115)	656	(2,144)
Other assets	(1,871)	(4,991)	(3,118)
Payable to growers	(2,117)	(538)	(2,524)
Deferred rent		1,004	(54)
Trade accounts payable, accrued expenses and other long-term liabilities	(14,027)	4,246	(7,942)
Net cash provided by operating activities	28,878	72,099	48,426
Cash Flows from Investing Activities:
Acquisitions of and deposits on property, plant, and equipment	(11,343)	(16,721)	(15,004)
Acquisition of SFFI, net of cash acquired of $623	(18,396)
Investment in unconsolidated entities	(1,477)		(3,636)
Proceeds received for repayment of San Rafael note		417	436
Proceeds received from Limoneira stock sales		1,154
Proceeds from sale of Temecula packinghouse		7,100
Infrastructure advance to tomato growers	(715)		(3,000)
Notes receivables advanced to FreshRealm		(23,800)	(11,500)
Proceeds received for repayment of loan to FreshRealm			2,500
Net cash used in investing activities	(31,931)	(31,850)	(30,204)
Cash Flows from Financing Activities:
Payment of dividend to shareholders	(19,354)	(17,568)	(16,657)
Proceeds from revolving credit facility	236,500	212,500	278,500
Payments on revolving credit facility	(215,950)	(227,500)	(283,500)
Payments of minimum withholding taxes on net share settlement of equity awards	(1,179)	(1,008)	(1,587)
Payments on long-term obligations and finance leases	(968)	(305)	(136)
Proceeds from stock option exercises	86	85	53
Net cash used in financing activities	(865)	(33,796)	(23,327)
Net increase (decrease) in cash and cash equivalents	(3,918)	6,453	(5,105)
Cash and cash equivalents, beginning of period	7,973	1,520	6,625
Cash and cash equivalents, end of period	4,055	7,973	1,520
Supplemental Information:
Interest	878	1,108	874
Income taxes	5,470	10,224	9,262
Noncash Investing and Financing Activities:
Right of use assets obtained in exchange for new financing lease obligations	529
Notes receivable from FreshRealm converted to investment in FreshRealm	2,761
Declared dividends payable	20,343	19,354	17,568
Acquisitions of property, plant, and equipment with capital lease		2,827
Capital lease related to Temecula packinghouse		3,306
Property, plant, and equipment included in trade accounts payable and accrued expenses	568	2,059	946
Collection for Agricola Belher Infrastructure Advance	$ 800	$ 800	200
Unrealized investment gain			$ 2,247

CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) $ in Thousands	12 Months Ended
	Oct. 31, 2020 USD ($)
Statement of Cash Flows [Abstract]
Cash acquired	$ 623

Description of the business

12 Months Ended

Oct. 31, 2020

Description of the business

Description of the business

1. Description of the business

Business

Calavo Growers, Inc. (Calavo, the Company, we, us or our), is a global leader in the avocado industry and a provider of value-added fresh food. Our expertise in marketing and distributing avocados, prepared avocados, and other perishable foods allows us to deliver a wide array of fresh and prepared food products to retail grocery, foodservice, club stores, mass merchandisers, food distributors and wholesalers on a worldwide basis. We procure avocados from California, Mexico and other growing regions around the world. Through our various operating facilities, we (i) sort, pack, and/or ripen avocados, tomatoes and/or Hawaiian grown papayas, (ii) create, process and package a portfolio of healthy fresh foods including fresh-cut fruit and vegetables, and prepared foods and (iii) process and package guacamole and salsa. We distribute our products both domestically and internationally and report our operations in three different business segments: Fresh products, Renaissance Food Group (RFG) and Calavo Foods.

Basis of Presentation and Significant Accounting Policies

12 Months Ended

Oct. 31, 2020

Basis of Presentation and Significant Accounting Policies

Basis of Presentation and Significant Accounting Policies

2. Basis of Presentation and Significant Accounting Policies

The accompanying consolidated financial statements were prepared in accordance with accounting principles generally accepted in the U.S.

Our consolidated financial statements include the accounts of Calavo Growers, Inc. and our wholly owned subsidiaries, Calavo de Mexico S.A. de C.V. (Calavo de Mexico), Calavo Growers de Mexico, S. de R.L. de C.V. ( Calavo Growers de Mexico), Maui Fresh International, Inc. (Maui), Hawaiian Sweet, Inc. (HS), Hawaiian Pride, LLC (HP), Calavo Salsa Lisa, LLC (CSL), Avocados de Jalisco, S.A.P.I. de C.V. (Avocados de Jalisco), in which we have an 83 percent ownership interest, and RFG. All intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Among the significant estimates affecting the financial statements are those related to valuation allowances for valuation allowances for accounts and notes receivable, goodwill, grower advances, inventories, long-lived assets, valuation of and estimated useful lives of identifiable intangible assets, stock-based compensation, promotional allowances and income taxes. On an ongoing basis, management reviews its estimates based upon currently available information. Actual results could differ materially from those estimates.

Reclassification of Prior Year Presentation

Certain prior year amounts have been reclassified for consistency with the current year presentation. Specifically, intangible assets are now presented as a separate line item on the accompanying consolidated balance sheet, and were previously included within other assets.

Cash and Cash Equivalents

We consider all highly liquid financial instruments purchased with an original maturity date of three months or less to be cash equivalents. The carrying amounts of cash and cash equivalents approximate their fair values.

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist primarily of non-trade receivables, infrastructure advances and prepaid expenses. Non-trade receivables were $5.7 million and $5.3 million at October 31, 2020 and 2019. Included in

non-trade receivables are $1.5 million and $1.9 million related to the current portion of non-CDM Mexican IVA (i.e. value-added) taxes at October 31, 2020 and 2019 (See Note 15). Infrastructure advances are discussed below. Prepaid expenses totaling $4.2 million and $3.4 million at October 31, 2020 and 2019, are primarily for insurance, rent and other items.

Inventories

Inventories are stated at the lower of cost or net realizable value. Cost is computed on a monthly weighted-average basis, which approximates the first-in, first-out method; market is based upon estimated replacement costs. Costs included in inventory primarily include the following: fruit, picking and hauling, overhead, labor, materials and freight.

Property, Plant, and Equipment

Property, plant, and equipment are stated at cost and depreciated over their estimated useful lives using the straight-line method. Leasehold improvements are stated at cost and amortized over the lesser of their estimated useful lives or the term of the lease, using the straight-line method. Useful lives are as follows: buildings and improvements - 7 to 50 years; leasehold improvements - the lesser of the term of the lease or 7 years; equipment - 7 to 25 years; information systems hardware and software – 3 to 10 years. Significant repairs and maintenance that increase the value or extend the useful life of our fixed asset are capitalized. On-going maintenance and repairs are charged to expense.

Goodwill and Acquired Intangible Assets

Goodwill, defined as unidentified asset(s) acquired in conjunction with a business acquisition, is tested for impairment on an annual basis and between annual tests whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Goodwill is tested at the reporting unit level, which is defined as an operating segment or one level below the operating segment. We can use a qualitative test, known as "Step 0," or a two-step quantitative method to determine whether impairment has occurred. In Step 0, we elect to perform an optional qualitative analysis and based on the results skip the two step analysis. In fiscal 2020, 2019 and 2018, we elected to implement Step 0 and were not required to conduct the remaining two step analysis. Goodwill impairment testing requires significant judgment and management estimates, including, but not limited to, the determination of (i) the number of reporting units, (ii) the goodwill and other assets and liabilities to be allocated to the reporting units and (iii) the fair values of the reporting units. The estimates and assumptions described above, along with other factors such as discount rates, will significantly affect the outcome of the impairment tests and the amounts of any resulting impairment losses. The results of our Step 0 assessments indicated that it was more likely than not that the fair value of our reporting unit exceeded its carrying value and therefore we concluded that there were no impairments for the years ended October 31, 2020, 2019 and 2018.

Long-lived Assets

Long-lived assets, including fixed assets and intangible assets (other than goodwill), are continually monitored and are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of any such asset may not be recoverable. The determination of recoverability is based on an estimate of undiscounted cash flows expected to result from the use of an asset and its eventual disposition. The estimate of undiscounted cash flows is based upon, among other things, certain assumptions about future operating performance, growth rates and other factors. Estimates of undiscounted cash flows may differ from actual cash flows due to, among other things, technological changes, economic conditions, changes to the business model or changes in operating performance. If the sum of the undiscounted cash flows (excluding interest) is less than the carrying value, an impairment loss will be recognized, measured as the amount by which the carrying value exceeds the fair value of the asset. For fiscal years 2020 and 2019, we performed our annual assessment of long-lived assets and determined that no impairment existed as of October 31, 2020 and 2019.

Investments

We account for non-marketable investments using the equity method of accounting if the investment gives us the ability to exercise significant influence over, but not control, an investee. Significant influence generally exists when we have an ownership interest representing between 20% and 50% of the voting stock of the investee. Under the equity method of accounting, investments are stated at initial cost and are adjusted for subsequent additional investments and our proportionate share of earnings or losses and distributions.

In December 2014, Calavo formed a wholly owned subsidiary Calavo Growers De Mexico, S. de R.L. de C.V. (Calavo Sub). In July 2015, Calavo Sub entered into a Shareholder Agreement with Grupo Belo del Pacifico, S.A. de C.V., (Belo) a Mexican Company owned by Agricola Belher, and Agricola Don Memo, S.A. de C.V. (Don Memo). Don Memo, a Mexican corporation formed in July 2013, is engaged in the business of owning and improving land in Jalisco, Mexico for the growing of tomatoes and other produce and the sale and distribution of tomatoes and other produce. Belo and Calavo Sub have an equal one-half ownership interest in Don Memo. Pursuant to a management service agreement, Belo, through its officers and employees, shall have day-to-day power and authority to manage the operations. In fiscal 2018, we contributed $0.1 million as investments in Don Memo. This investment contribution represent Calavo Sub’s 50% ownership in Don Memo, which is included in investment in unconsolidated entities on our balance sheet. We use the equity method to account for this investment. As of October 31, 2020 and 2019, we have an investment of $6.1 million and $4.9 million in Don Memo.

As of October 31, 2019, we have an equity investment of $5.8 million in FreshRealm, LLC (FreshRealm). During the quarter ended July 31, 2020, we concluded that there was no longer any value associated with our FreshRealm investment and therefore recognized a $2.8 million impairment charge to fully impair the investment. FreshRealm will likely require additional capital in order to continue as a going concern. We do not plan to invest or loan any additional capital to FreshRealm. We have performed a valuation analysis of the financial condition and projected operations of FreshRealm under various methods, including liquidation, exit multiple, and perpetual growth approaches, appropriately weighted for the circumstances. We record the amount of our investment in FreshRealm in “Investment in unconsolidated entities” on our Consolidated Balance Sheets and recognize losses in FreshRealm in “Income/ (loss) from unconsolidated entities” in our Consolidated Statement of Operations. See Note 16 and Note 20 for additional information. As of October 31, 2020, our ownership percentage in FreshRealm was approximately 37%.

Marketable Securities

Our marketable securities consist of our investment in Limoneira Company (Limoneira) stock. We currently own less than 10% of Limoneira’s outstanding common stock. These securities are considered available for sale securities based on management’s intent with respect to such securities and are carried at fair value as determined from quoted market prices.

On November 1, 2018 we adopted ASU 2016-01, Financial Instruments, Recognition and Measurement of Financial Assets and Liabilities, which requires equity investments (except those accounted for under the equity method of accounting) to be measured at fair value with changes in fair value recognized in net income. With the adoption of this new standard, we reclassed unrealized gains of $12.1 million in accumulated other comprehensive income to retained earnings as of November 1, 2018. For the year ended October 31, 2019, we sold 51,271 shares of Limoneira stock and recorded a loss of $0.1 million in our consolidated statements of operations. Limoneira’s stock price at October 31, 2020, 2019, and 2018 equaled $13.83 per share, $18.92 per share, and $24.65 per share. Our remaining shares of Limoneira stock, totaling 1,677,299, were revalued to $13.83 per share and $18.92 per share at October 31, 2020 and 2019, as a result, we recorded a loss of $8.5 million and $9.6 million for the year ended October 31, 2020 and 2019 in our consolidated statements of operations.

Advances to Suppliers

We advance funds to third-party growers primarily in Mexico for various farming needs. Typically, we obtain collateral (i.e. fruit, fixed assets, etc.) that approximates the value at risk, prior to making such advances. We

continuously evaluate the ability of these growers to repay advances in order to evaluate the possible need to record an allowance. No such allowance was required at October 31, 2020 and 2019.

Pursuant to our distribution agreement, which was amended in fiscal 2011, with Agricola Belher (Belher) of Mexico, a producer of fresh vegetables, primarily tomatoes, for export to the U.S. market, Belher agreed, at their sole cost and expense, to harvest, pack, export, ship, and deliver tomatoes exclusively to our company, primarily our Arizona facility. In exchange, we agreed to sell and distribute such tomatoes, make advances to Belher for operating purposes, provide additional advances as shipments are made during the season (subject to limitations, as defined), and return the proceeds from such tomato sales to Belher, net of our commission and aforementioned advances. These advances will be collected through settlements by the end of each year. For fiscal 2020 and 2019, we agreed to advance $4.5 million and $4.5 million for preseason advances. As of October 31, 2020 and 2019, we have total advances of $4.5 million and $4.5 million to Belher pursuant to this agreement, which is recorded in advances to suppliers.

Similar to Belher, we make advances to Don Memo for operating purposes, provide additional advances as shipments are made during the season, and return the proceeds from such tomato sales to Don Memo, net of our commission and aforementioned advances. As of October 31, 2020 and 2019, we have total advances of $2.4 million and $3.7 million to Don Memo, which is recorded in advances to suppliers, offset by tomato liabilities from the sales of tomatoes per the tomato marketing agreement.

Infrastructure Advances

Pursuant to our infrastructure agreements, we make advances to be used solely for the acquisition, construction, and installation of improvements to and on certain land owned/controlled by Belher and Don Memo, as well as packing line equipment.

In October 2020, we entered into an infrastructure loan agreement with Don Memo for $2.4 million secured by Don Memo’s property and equipment. This infrastructure loan will incur interest at 7.25%. In October 2020, we paid $0.7 million related to this agreement, and the remaining $1.7 million will be paid in January 2021. As of October 31, 2020, we have advanced a total of $0.7 million 2021 ($0.4 million is included in prepaids and other current assets and $0.3 million in other assets).

In August 2018, we entered into an amended infrastructure loan agreement with Belher and advanced $3.0 million. This amount shall be paid back in annual installments of $0.6 million through June 2023, and incurs interest at Libor plus 10%. Loans prior to this amended agreement incur interest at Libor plus 3.0%. In August 2020, we have agreed to amend the terms of this agreement to lower the interest rate to 7.25% and changed the repayment terms to two years ($0.9 million per year).

As of October 31, 2020, we have loaned a total of $1.8 million ($0.9 million included in prepaid expenses and other current assets and $0.9 million included in other long-term assets). As of October 31, 2019, we have loaned a total of $2.6 million ($0.8 million included in prepaid expenses and other current assets and $1.8 million included in other long-term assets). Belher may prepay, without penalty, all or any portion of the loans at any time. In order to secure their obligations pursuant to both agreements discussed above, Belher granted us a first-priority security interest in certain assets, including cash, inventory and fixed assets, as defined.

Accrued Expenses

Included in accrued expenses are liabilities related to the receipt of goods and/or services for which an invoice has not yet been received. These totaled approximately $26.4 million and $18.7 million for the year ended October 31, 2020 and 2019.

Revenue Recognition

Effective at the beginning of our fiscal 2019, the Company adopted Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers, and all the related amendments (Accounting Standards Codification (ASC)

606) using the modified retrospective method of adoption. ASC 606 consists of a comprehensive revenue recognition standard, which requires the recognition of revenue when control of promised goods are transferred to customers in an amount that reflects the consideration to which the entity expects to be entitled.

The Company recognizes revenue when obligations under the terms of a contract with its customer are satisfied; generally, this occurs with the transfer of control of its products. Revenue is measured as the amount of net consideration expected to be received in exchange for transferring products. Revenue from product sales is governed primarily by customer pricing and related purchase orders (“contracts”) which specify shipping terms and certain aspects of the transaction price including rebates, discounts and other sales incentives. Contracts are at standalone pricing. The performance obligation in these contracts is determined by each of the individual purchase orders and the respective stated quantities, with revenue being recognized at a point in time when obligations under the terms of the agreement are satisfied. This generally occurs with the transfer of control of our products to the customer and the product is delivered. The Company's customers have an implicit and explicit right to return non-conforming products. A provision for payment discounts and product return allowances, which is estimated, is recorded as a reduction of sales in the same period that the revenue is recognized.

Sales Incentives and Other Promotional Programs

The Company routinely offers sales incentives and discounts through various regional and national programs to our customers and consumers. These programs include product discounts or allowances, product rebates, product returns, one-time or ongoing trade-promotion programs with customers and consumer coupon programs that require the Company to estimate and accrue the expected costs of such programs. The costs associated with these activities are accounted for as reductions to the transaction price of the Company’s products and are, therefore, recorded as reductions to gross sales at the time of sale. The Company bases its estimates of incentive costs on historical trend experience with similar programs, actual incentive terms per customer contractual obligations and expected levels of performance of trade promotions, utilizing customer and sales organization inputs. The Company maintains liabilities at the end of each period for the estimated incentive costs incurred but unpaid for these programs. Differences between estimated and actual incentive costs are generally not material and are recognized in earnings in the period such differences are determined. Reserves for product returns, accrued rebates and promotional accruals are included in the consolidated balance sheets as part of accrued expenses.

Principal vs. Agent Considerations

We frequently enter into consignment arrangements with avocado and tomato growers and packers located outside of the U.S. and growers of certain perishable products in the U.S. We evaluate whether its performance obligation is a promise to transfer services to the customer (as the principal) or to arrange for services to be provided by another party (as the agent) using a control model. This evaluation determined that the Company is in control of establishing the transaction price, managing all aspects of the shipments process and taking the risk of loss for delivery, collection, and returns. Based on the Company’s evaluation of the control model, it determined that all of the Company’s major businesses act as the principal rather than the agent within their revenue arrangements and such revenues are reported on a gross basis.

Practical Expedients

The Company elected the following practical expedients upon its adoption of Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers (ASC Topic 606).

●

Shipping and handling costs - The company elected to account for shipping and handling activities that occur before the customer has obtained control of a good as fulfillment activities rather than as a promised service.

●

Measurement of transaction price - The Company has elected to exclude from the measurement of transaction price all taxes assessed by a governmental authority that are both imposed on, and concurrent with, a specific revenue-producing transaction and collected by the Company from a customer for sales taxes.

●

Contract costs - The Company has elected to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period is one year or less.

The adoption of ASC 606 did not have an impact on our consolidated results of operations.

Customers

We sell to retail grocery, foodservice, club stores, mass merchandisers, food distributors and wholesale customers. Our top ten customers accounted for approximately 56%, 59% and 59% of our consolidated net sales in fiscal years 2020, 2019 and 2018. Sales to our largest customer, Kroger (including its affiliates), represented approximately 18%, 21%, and 20% of net sales in each of fiscal years 2020, 2019, and 2018. Additionally, Wal-Mart (including its affiliates) represented approximately 12%, 13% and 10% of net sales in fiscal years 2020, 2019 and 2018. No other single customer accounted for more than 10% of our net sales in any of the last three fiscal years.

Shipping and Handling

We include shipping and handling fees billed to customers in net revenues. Amounts incurred by us for freight are included in cost of goods sold.

Promotional Allowances

We provide for promotional allowances at the time of sale, based on our historical experience. Our estimates are generally based on evaluating the historical relationship between promotional allowances and gross sales. The derived percentage is then applied to the current period’s sales revenues in order to arrive at the appropriate debit to sales allowances for the period. The offsetting credit is made to accrued expenses. When certain amounts of specific customer accounts are subsequently identified as promotional, they are written off against this allowance. Actual amounts may differ from these estimates and such differences are recognized as an adjustment to net sales in the period they are identified.

Allowance for Accounts Receivable

We provide an allowance of $3.5 million and $3.4 million for estimated uncollectible accounts receivable balances based on historical experience and the aging of the related accounts receivable as of October 31, 2020 and 2019.

Loss on Reserve for FreshRealm Note Receivable and Impairment of Investment

At the beginning of fiscal year 2020, we had a note receivable from FreshRealm totaling $35.2 million which have been fully reserved during fiscal 2020. See Note 16 and Note 20 for further information. During the third quarter of fiscal 2020, the results of operations of FreshRealm deteriorated significantly from our expectations three months prior, with declining sales and continuing losses. FreshRealm will likely require additional capital in order to continue as a going concern. We do not plan to invest or loan any additional capital to FreshRealm.

Consignment Arrangements

We frequently enter into consignment arrangements with avocado and tomato growers and packers located outside of the U.S. and growers of certain perishable products in the U.S. Although we generally do not take legal title to these avocados and perishable products, we do assume responsibilities (principally assuming credit risk, inventory loss and delivery risk, and pricing risk) that are consistent with acting as a principal in the transaction. Accordingly, the accompanying financial statements include sales and cost of sales from the sale of avocados and perishable products

procured under consignment arrangements. Amounts recorded for each of the fiscal years ended October 31, 2020, 2019 and 2018 in the financial statements pursuant to consignment arrangements are as follows (in thousands):


	2020		2019		2018

Sales	$	64,922	$	64,510	$	43,490
Cost of Sales		57,554		57,061		38,186
Gross Profit	$	7,368	$	7,449	$	5,304

Advertising Expense

Advertising costs are expensed when incurred and are generally included as a component of selling, general and administrative expense. Such costs were approximately $0.4 million, $0.3 million and $0.2 million for fiscal years 2020, 2019, and 2018.

Research and Development

Research and development costs are expensed as incurred and are generally included as a component of selling, general and administrative expense. Total research and development costs for fiscal year 2020 was approximately $0.7 million. Total research and development costs for fiscal years 2019 and 2018 were less than $0.1 million.

Other Income

Included in other income is dividend income totaling $0.6 million for fiscal year 2020. Dividend income totaled $0.6 million and $0.6 million for fiscal years 2019 and 2018. See Note 8 for related party disclosure related to other income.

Income Taxes

We account for deferred tax liabilities and assets for the future consequences of events that have been recognized in our consolidated financial statements or tax returns. Measurement of the deferred items is based on enacted tax laws. In the event the future consequences of differences between financial reporting bases and tax bases of our assets and liabilities result in a deferred tax asset, we perform an evaluation of the probability of being able to realize the future benefits indicated by such asset. A valuation allowance related to a deferred tax asset is recorded when it is more likely than not that some portion or all of the deferred tax asset will not be realized.

We recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement.

As a multinational corporation, we are subject to taxation in many jurisdictions, and the calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations in various taxing jurisdictions. If we ultimately determine that the payment of these liabilities will be unnecessary, the liability will be reversed and we will recognize a tax benefit during the period in which it is determined the liability no longer applies. Conversely, we record additional tax charges in a period in which it is determined that a recorded tax liability is less than the ultimate assessment is expected to be.

The application of tax laws and regulations is subject to legal and factual interpretation, judgment and uncertainty. Tax laws and regulations themselves are subject to change as a result of changes in fiscal policy, changes in legislation, the evolution of regulations and court rulings. Therefore, the actual liability for U.S. or foreign taxes may be materially different from management’s estimates, which could result in the need to record additional tax liabilities or potentially reverse previously recorded tax liabilities.

Basic and Diluted Net Income (loss) per Share

Basic earnings per share is calculated using the weighted-average number of common shares outstanding during the period without consideration of the dilutive effect of stock options and contingent consideration. Diluted earnings per common share is calculated using the weighted-average number of common shares outstanding during the period after consideration of the dilutive effect of stock options and the effect of contingent consideration shares.

Basic and diluted net income per share is calculated as follows (U.S. dollars in thousands, except per share data):


	Year ended October 31,
	2020		2019		2018
Numerator:
Net income (loss) attributable to Calavo Growers, Inc.	$	(13,625)	$	36,646	$	32,281
Denominator:
Weighted average shares – Basic		17,564		17,519		17,477
Effect of dilutive securities – Restricted stock/options		—		74		91
Weighted average shares – Diluted		17,564		17,593		17,568
Net income (loss) per share attributable to Calavo Growers, Inc:
Basic	$	(0.78)	$	2.09	$	1.85
Diluted	$	(0.78)	$	2.08	$	1.84

Stock-Based Compensation

We account for awards of equity instruments issued to employees under the fair value method of accounting and recognize such amounts in our statements of operations. We measure compensation cost for all stock-based awards at fair value on the date of grant and recognize compensation expense in our consolidated statements of operations over the service period that the awards are expected to vest.

For the years ended October 31, 2020, 2019 and 2018, we recognized compensation expense of $4.5 million, $3.6 million, and $4.6 million related to stock-based compensation (See Note 12). The value of the stock-based compensation was determined from quoted market prices at the date of the grant.

Foreign Currency Translation and Remeasurement

Our foreign operations are subject to exchange rate fluctuations and foreign currency transaction costs. The functional currency of our foreign subsidiaries is the United States dollar. As a result, monetary assets and liabilities are translated into U.S. dollars at exchange rates as of the balance sheet date and non-monetary assets, liabilities and equity are translated at historical rates. Sales and expenses are translated using a weighted-average exchange rate for the period. Gains and losses resulting from those remeasurements are included in income. Gains and losses resulting from foreign currency transactions are also recognized currently in income. Total foreign currency translation losses for fiscal 2020, 2019 and 2018, net of gains, were $1.0 million, $0.3 million, and $0.8 million.

Fair Value of Financial Instruments

We believe that the carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, and short-term borrowings approximates fair value based on either their short-term nature or on terms currently available to the Company in financial markets. Due to current market rates, we believe that our fixed-rate long-term obligations and finance leases have nearly the same fair value and carrying value of approximately $7.1 million and $6.2 million as of October 31, 2020 and 2019.

Deferred Rent

As part of certain lease agreements, we receive construction allowances from our landlords. The construction allowances are deferred and amortized on a straight-line basis over the life of the lease as a reduction to rent expense. At

the beginning of fiscal 2020, we have adopted the new lease accounting standard and as a result deferred rent is no longer recorded. See Note 17 for further information.

Derivative Financial Instruments

We were not a party to any material derivative instruments during the fiscal year. It is currently our intent not to use derivative instruments for speculative or trading purposes. Additionally, we do not use any hedging or forward contracts to offset market volatility.

Recently Issued Accounting Standards

In October 2018, the FASB issued ASU 2018-17, Targeted Improvements to Related Party Guidance for Variable Interest Entities. This ASU provides that indirect interests held through related parties in common control arrangements should be considered on a proportional basis for determining whether fees paid to decision makers and service providers are variable interests. The new guidance is effective for fiscal years beginning after December 15, 2019. This ASU will be effective for us beginning the first day of our 2021 fiscal year. We are evaluating the impact of the adoption of this ASU on our financial condition, results of operations and cash flows, and, as such, we are not able to estimate the effect the adoption of the new standard will have on our financial statements.

In September 2018, the FASB issued an ASU, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40), Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract. This ASU requires implementation costs incurred by customers in cloud computing arrangements (i.e., hosting arrangements) to be capitalized under the same premises of authoritative guidance for internal-use software and deferred over the non-cancellable term of the cloud computing arrangements plus any option renewal periods that are reasonably certain to be exercised by the customer or for which the exercise is controlled by the service provider. This ASU will be effective for us beginning the first day of our 2021 fiscal year. We are evaluating the impact of the adoption of this ASU on our financial condition, results of operations and cash flows, and, as such, we are not able to estimate the effect the adoption of the new standard will have on our financial statements.

In January 2017, the FASB issued an ASU, Simplifying the Test for Goodwill Impairment, which removes the requirement to compare the implied fair value of goodwill with its carrying amount as part of step 2 of the goodwill impairment test. The ASU permits an entity to perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and to recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. This ASU will be effective for us beginning the first day of our 2021 fiscal year and is not expected to have a significant impact upon adoption.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Measurement of Credit Losses on Financial Instruments, and subsequent amendments to the guidance, ASU 2018-19 in November 2018 and ASU 2019-05 in May 2019 including codification improvements to Topic 326 in ASU 2019-04. The standard significantly changes how entities will measure credit losses for most financial assets and certain other instruments that aren’t measured at fair value through net income. The standard will replace today’s “incurred loss” approach with an “expected loss” model for instruments measured at amortized cost. For available-for-sale debt securities, entities will be required to record allowances rather than reduce the carrying amount, as they do today under the other-than-temporary impairment model. It also simplifies the accounting model for purchased credit-impaired debt securities and loans. The amendment will affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. ASU 2018-19 clarifies that receivables arising from operating leases are accounted for using lease guidance and not as financial instruments. ASU 2019-05 provides entities that have certain instruments with an option to irrevocably elect the fair value option. The amendments should be applied on either a prospective transition or modified-retrospective approach depending on the subtopic. This ASU will be effective for us beginning the first day of our 2021 fiscal year. Early adoption is permitted. We are evaluating the impact of the adoption of this ASU on our financial condition, results of operations and cash flows, and, as such, we are not able to estimate the effect the adoption of the new standard will have on our financial statements

Comprehensive Income

Comprehensive income is defined as all changes in a company's net assets, except changes resulting from transactions with shareholders. For the fiscal year ended October 31, 2018, other comprehensive income includes the unrealized gain on our Limoneira investment totaling $1.7 million, net of income taxes. Limoneira’s stock price at October 31, 2018 equaled $24.65 per share.

On November 1, 2018 we adopted a new accounting standard, which requires equity investments (except those accounted for under the equity method of accounting) to be measured at fair value with changes in fair value recognized in net income. With the adoption of this new standard, we reclassed unrealized gains of $12.1 million in accumulated other comprehensive income to retained earnings as of November 1, 2018. For the year ended October 31, 2019, we sold 51,271 shares of Limoneira stock and recorded a loss of $0.1 million in our consolidated statements of operations. Limoneira’s stock price at October 31, 2020, 2019, and 2018 equaled $13.83 per share, $18.92 per share, and $24.65 per share. Our remaining shares of Limoneira stock, totaling 1,677,299, were revalued to $13.83 per share and $18.92 per share at October 31, 2020 and 2019, as a result, we recorded a loss of $8.5 million and $9.6 million for the year ended October 31, 2020 and 2019 in our consolidated statements of operations.

Noncontrolling Interest

The following tables reconcile shareholders’ equity attributable to noncontrolling interest related to Avocados de Jalisco (in thousands).


	Year ended		Year ended
Avocados de Jalisco noncontrolling interest	October 31, 2020		October 31, 2019

Noncontrolling interest, beginning	$	1,688	$	1,748
Net loss attributable to noncontrolling interest of Avocados de Jalisco		(216)		(60)
Noncontrolling interest, ending	$	1,472	$	1,688

Inventories

12 Months Ended

Oct. 31, 2020

Inventories

Inventories

3. Inventories

Inventories consist of the following (in thousands):


	October 31,		October 31,
	2020		2019

Fresh fruit	$	14,677	$	15,874
Packing supplies and ingredients		12,540		11,370
Finished prepared foods		14,570		9,645
	$	41,787	$	36,889

We assess the recoverability of inventories through an ongoing review of inventory levels in relation to sales and forecasts and product marketing plans. When the inventory on hand, at the time of the review, exceeds the foreseeable demand, the value of inventory that is not expected to be sold is written down. The amount of the write-down is the excess of historical cost over estimated realizable value. Once established, these write-downs are considered permanent adjustments to the cost basis of the excess inventory.

The assessment of the recoverability of inventories and the amounts of any write-downs are based on currently available information and assumptions about future demand and market conditions. Demand for processed avocado products may fluctuate significantly over time, and actual demand and market conditions may be more or less favorable than our projections. In the event that actual demand is lower than originally projected, additional inventory write-downs may be required.

Property, Plant, and Equipment

12 Months Ended

Oct. 31, 2020

Property, Plant, and Equipment

Property, Plant, and Equipment

4. Property, Plant, and Equipment

Property, plant, and equipment consist of the following (in thousands):


	October 31,
	2020		2019

Land	$	11,008	$	11,008
Buildings and improvements		44,984		45,614
Leasehold improvements		33,047		26,267
Equipment		108,505		99,237
Information systems - hardware and software		11,385		10,822
Construction in progress		5,244		10,351
		214,173		203,299
Less accumulated depreciation and amortization		(83,903)		(71,201)
	$	130,270	$	132,098

Depreciation expense was $13.9 million, $13.0 million and $11.9 million for fiscal years 2020, 2019, and 2018. Included in property, plant, and equipment is finance leases. Amortization of finance leases was $1.0 million for fiscal year 2020.

In February 2016, the FASB issued ASU 2016-02, Leases, and has subsequently issued several supplemental and/or clarifying ASU's (collectively, "Topic 842"), which requires a dual approach for lease accounting under which a lessee would account for leases as finance leases or operating leases. Both finance leases and operating leases result in the lessee recognizing a right of use asset and a corresponding lease liability. For finance leases, the lessee would recognize interest expense and amortization of the right-of-use asset, and for operating leases, the lessee would recognize lease expense on a straight-line basis. See Note 17.

Other Assets and Intangibles

12 Months Ended

Oct. 31, 2020

Other Assets and Intangibles

Other Assets and Intangibles

5. Other Assets and Intangibles

Other assets consist of the following (in thousands):


	October 31,		October 31,
	2020		2019
Mexican IVA (i.e. value-added) taxes receivable (see note 15)	$	30,126	$	27,592
Infrastructure loan to Agricola Belher and Agricola Don Memo		1,215		1,800
Other		1,217		1,514
	$	32,558	$	30,906

The intangible assets consist of the following (in thousands):


		October 31, 2020						October 31, 2019
	Weighted-	Gross				Net		Gross				Net
	Average	Carrying		Accum.		Book		Carrying		Accum.		Book
	Useful Life	Value		Amortization		Value		Value		Amortization		Value
Customer list/relationships	7 years	$	17,340	$	(8,613)	$	8,727	$	7,640	$	(7,640)	$	—
Trade names	11 years		4,060		(2,852)		1,208		2,760		(2,760)		—
Trade secrets/recipes	9 years		630		(517)		113		630		(470)		160
Brand name intangibles	indefinite		275		—		275		275		—		275
Intangibles, net		$	22,305	$	(11,982)	$	10,323	$	11,305	$	(10,870)	$	435

We recorded amortization expense of approximately $1.1 million, $0.7 million, and $1.1 million for fiscal years 2020, 2019, and 2018. We anticipate recording amortization expense of approximately $1.6 million for each of fiscal years 2021 through 2022, $1.5 million for each fiscal years 2023 through 2024 and $4.1 million thereafter.

Revolving Credit Facilities

12 Months Ended

Oct. 31, 2020

Revolving Credit Facilities

Revolving Credit Facilities

6. Revolving Credit Facilities

We have a revolving credit facility with Bank of America, N.A. (Bank of America) as administrative agent and Merrill Lynch, Pierce, Fenner & Smith Inc. as joint lead arranger and sole bookrunner, and Farm Credit West (FCW), as joint lead arranger. The Credit Agreement provides for a five-year, $80 million syndicated senior unsecured revolving credit facility maturing on June 14, 2021 (the Credit Facility). For our line of credit the weighted-average interest rate was 1.9% and 3.8% at October 31, 2020 and 2019. Under this credit facility, we had $20.6 million outstanding as of October 31, 2020 and there was zero outstanding as of October 31, 2019.

We expect to refinance our line of credit in early fiscal 2021. We believe that cash flows from operations, the available Credit Facility, and other sources such as our investment in Limoneira, will be sufficient to satisfy our future capital expenditures, grower recruitment efforts, working capital and other financing requirements for at least the next twelve months.

Provided there exists no default, upon notice to Bank of America, the Company may from time to time, request an increase in the Credit Facility by an amount not exceeding $50 million (the Accordion). Any future exercises of the Accordion would require additional commitments from existing or new lenders.

Borrowings under the Credit Facility will be at the Company’s discretion either at a Eurodollar Rate (LIBOR) loan plus applicable margin or a base rate loan plus applicable margin. The applicable margin will be based on the Company’s Consolidated Leverage Ratio and can range from 1.00% to 1.50% for LIBOR loans and 0.00% to 0.50% for Base Rate Loans. The Credit Facility also includes a commitment fee on the unused commitment amount at a rate per annum of 0.15%.

The Credit Facility contains customary affirmative and negative covenants for agreements of this type, including the following financial covenants applicable to the Company and its subsidiaries on a consolidated basis: (a) a quarterly consolidated leverage ratio of not more than 2.50 to 1.00 and (b) a quarterly consolidated fixed charge coverage ratio of not less than 1.15 to 1.00. We were in compliance with all such covenants at October 31, 2020 and 2019.

The Credit Facility also contains customary events of default. If any event of default occurs and is continuing, Bank of America may take the following actions: (a) declare the commitment of each lender to make loans and any obligation of the Issuer to make credit extensions to be terminated; (b) declare the unpaid principal amount of all outstanding loans, all interest, and all other amounts to be immediately due and payable; (c) require that Calavo cash collateralize the obligations; and (d) exercise on behalf of itself, the lenders and the Issuer all rights and remedies available to it.

Commitments and Contingencies

12 Months Ended

Oct. 31, 2020

Commitments and Contingencies.

Commitments and Contingencies

7. Commitments and Contingencies

Commitments and guarantees

We lease facilities and certain equipment under non-cancelable leases expiring at various dates through 2031. We are committed to make minimum cash payments under these agreements as of October 31, 2020. See Note 17 for the adoption of the new lease accounting standard.

In April 2019, we sold our Temecula, California packinghouse for $7.1 million in cash and, concurrently, leased back a portion of the facility representing approximately one-third of the total square footage. In connection with the capital lease we capitalized $3.2 million as a capital lease in property, plant and equipment and recorded a lease liability of $3.2 million ($0.1 million in current portion and $3.1 million in long term debt).

products for our RFG business segment. Annual rent for the building and equipment approximates $0.9 million and $0.6 million, respectively, over the life of the lease. The lease for the equipment is considered to be a capital lease, therefore, we calculated the present value of the minimum lease payments related to the equipment and capitalized $2.8 million as a capital lease in property, plant and equipment and recorded $2.8 million as a lease obligation.

We indemnify our directors and have the power to indemnify each of our officers, employees and other agents, to the maximum extent permitted by applicable law. No amounts have been accrued in the accompanying financial statements related to these indemnifications.

Litigation

From time to time, we are also involved in litigation arising in the ordinary course of our business that we do not believe will have a material adverse impact on our financial statements.

Mexico tax audits

We conduct business both domestically and internationally and, as a result, one or more of our subsidiaries files income tax returns in U.S. federal, U.S. state and certain foreign jurisdictions. Accordingly, in the normal course of business, we are subject to examination by taxing authorities, primarily in Mexico and the United States. During our third quarter of fiscal 2016, our wholly owned subsidiary, Calavo de Mexico (CDM), received a written communication from the Ministry of Finance and Administration of the government of the State of Michoacan, Mexico (MFM) containing preliminary observations related to a fiscal 2011 tax audit of such subsidiary. MFM’s preliminary observations outline certain proposed adjustments primarily related to intercompany funding, deductions for services from certain vendors/suppliers and Value Added Tax (IVA). During the period from our fourth fiscal quarter of 2016 through our first fiscal quarter of 2019, we attempted to resolve our case with the MFM through working meetings attended by representatives of the MFM, CDM and PRODECON (Local Tax Ombudsman). However, we were unable to materially resolve our case with the MFM through the PRODECON process.

As a result, in April 2019, the MFM issued a final tax assessment to CDM (the “2011 Assessment”) totaling approximately $2.2 billion Mexican pesos (approx. $103.5 million USD at October 31, 2020) related to Income Tax, Flat Rate Business Tax and Value Added Tax, corresponding to the fiscal 2011 tax audit. We have consulted with an internationally recognized tax advisor and continue to believe this tax assessment is without merit. Therefore, we filed an administrative appeal challenging the MFM’s year 2011 assessment on June 12, 2019. The filing of an administrative appeal in Mexico is a process in which the taxpayer appeals to a different office within the Mexican tax authorities, forcing the legal office within the MFM to rule on the matter. This process preserves the taxpayer’s right to litigate in tax court if the administrative appeal process ends without a favorable or just resolution. Furthermore, in August 2018, we received a favorable ruling from Mexico's Federal Tax Administration Service, Servicio de Administracion Tributaria’s (the “SAT”) central legal department in Mexico City on another tax matter (see Note 15 regarding IVA refunds) indicating that they believe that our legal interpretation is accurate on a matter that is also central to the 2011 Assessment. We believe this recent ruling undermines the Assessment we received in April 2019.

During November 2020, we were in contact with the MFM and presented our arguments that we believe undermine the legality of the 2011 Assessment, asserting among others, the determination by the SAT’s central legal department described below, which recognizes the legal validity of our operation as a maquiladora. Based on the foregoing, the MFM has offered to take into account such argument in its resolution of the pending administrative appeal.

We believe we have the legal arguments and documentation to sustain the positions challenged by the MFM.

Additionally, we also received notice from the SAT, that CDM is currently under examination related to fiscal year 2013. In January 2017, we received preliminary observations from SAT outlining certain proposed adjustments primarily related to intercompany funding, deductions for services from certain vendors/suppliers, and VAT. We provided a written rebuttal to these preliminary observations during our second fiscal quarter of 2017. During the period from our third fiscal quarter of 2017 through our third fiscal quarter of 2018, we attempted to resolve our case with the SAT

through working meetings attended by representatives of the SAT, CDM and the PRODECON. However, we were unable to materially resolve our case with the SAT through the PRODECON process.

As a result, in July 2018, the SAT’s local office in Uruapan issued to CDM a final tax assessment (the “2013 Assessment”) totaling approximately $2.6 billion Mexican pesos (approx. $122.4 million USD at October 31, 2020) related to Income Tax, Flat Rate Business Tax, and Value Added Tax, related to this fiscal 2013 tax audit. Additionally, the tax authorities have determined that we owe an employee’s profit-sharing liability, totaling approximately $118 million Mexican pesos (approx. $5.6 million USD at October 31, 2020).

We have consulted with both an internationally recognized tax advisor, as well as a global law firm with offices throughout Mexico, and we continue to believe that this tax assessment is without merit. In August 2018, we filed an administrative appeal on the 2013 Assessment. CDM has appealed our case to the SAT’s central legal department in Mexico City. Furthermore, and as noted in the preceding paragraphs, in August 2018, we received a favorable ruling from the SAT’s central legal department in Mexico City on another tax matter (see Note 15 regarding IVA refunds) indicating that they believe that our legal interpretation is accurate on a matter that is central to the 2013 Assessment. We believe this recent ruling significantly undermines the 2013 Assessment we received in July 2018.

In light of the foregoing, the Company is currently considering its options for resolution of the two tax assessments:

In the unlikely event of an unfavorable resolution of the administrative appeal, we could file a nullification suit with the Mexican Tax Court. In order to file such suit, we would be required to post collateral or a bond for the total amount of the tax assessment (including inflation adjustments, penalties and surcharges) while the suit is in process, which could last from two to three years. If the suit results in an unfavorable ruling, there is an option to appeal to the Collegiate Circuit Court while maintaining the collateral or bond in place.

In the event of filing a nullification suit, the collateral or bonding requirement may be avoided by filing a nullification suit on substantive matters (“Juicio de Fondo”). This type of suit permits only arguments on the legal merits of the taxpayer’s case, and limits arguments on procedural matters.

The estimated time for resolution of this matter could be affected by the situation related to the COVID-19 pandemic.

We continue to believe that the ultimate resolution of these matters is unlikely to have a material effect on our consolidated financial position.

Related party transactions

12 Months Ended

Oct. 31, 2020

Related party transactions

Related party transactions

8. Related-Party Transactions

Certain members of our Board of Directors market California avocados through Calavo pursuant to marketing agreements substantially similar to the marketing agreements that we enter into with other growers. During the years ended October 31, 2020, 2019, and 2018, the aggregate amount of avocados procured from entities owned or controlled by members of our Board of Directors was $18.0 million, $11.9 million and $11.2 million. We did not have any amounts due to Board members as of October 31, 2020 and 2019.

During fiscal years 2020, 2019, and 2018, we received $0.5 million, $0.5 million and $0.4 million as dividend income from Limoneira. In addition, we lease office space from Limoneira for our corporate office. Rent to Limoneira amounted to approximately $0.3 million for fiscal years 2020, 2019, and 2018. Harold Edwards, who is a member of our Board of Directors, is the Chief Executive Officer of Limoneira Company. We have less than 10% ownership interest in Limoneira. In December 2018, our former Chief Executive Officer retired from Limoneira’s Board of Directors.

We currently have a member of our Board of Directors who also serves as a partner in the law firm of TroyGould PC, which frequently represents Calavo as legal counsel. During the years ended October 31, 2020, 2019, and 2018, Calavo Growers, Inc. paid fees totaling approximately $0.4 million, $0.4 million and $0.2 million to TroyGould PC. The director has advised us of his intention to retire from TroyGould PC in December 2020.

C.V., (Belo) a Mexican Company owned by Agricola Belher, and formed Agricola Don Memo, S.A. de C.V. Belo and Calavo Sub have an equal one-half ownership interest in Don Memo in exchange for $2 million each. Pursuant to a management service agreement, Belo, through its officers and employees, has day-to-day power and authority to manage the operations. Therefore, Don Memo is accounted for on the equity method as an unconsolidated entity. Belo is entitled to a management fee, as defined, which is payable annually in July of each year. Additionally, Calavo Sub is entitled to commission, for the sale of produce in the Mexican National Market, U.S., Canada, and any other overseas market.

In January 2016, our unconsolidated subsidiary, Don Memo, entered into a loan agreement in the amount of $4.5 million with Bank of America, N.A. (BoA) proceeds of which were used by Don Memo to repay debt owed to Calavo. Also in January 2016, Calavo and BoA, entered into a Continuing and Unconditional Guaranty Agreement (the Guaranty). Under the terms of the Guaranty, Calavo unconditionally guarantees and promises to pay Bank of America any and all Indebtedness, as defined therein, of our unconsolidated subsidiary Don Memo to BoA. Belo has also entered into a similar guarantee with BoA. In December 2018, Don Memo received third party financing, repaid its loan to Bank of America and therefore, Calavo is no longer a guarantor for Don Memo’s indebtedness.

As of October 31, 2020, 2019 and 2018, we have an investment of $6.1 million, $4.9 million and $4.9 million, representing Calavo Sub’s 50% ownership in Don Memo, which is included as an investment in unconsolidated entities on our balance sheet. We make advances to Don Memo for operating purposes, provide additional advances as shipments are made during the season, and return the proceeds from tomato sales under our marketing program to Don Memo, net of our commission, other direct expenses, and aforementioned advances. In September 2018, we contributed $0.2 million, of which $0.1 million was a short-term loan, and $0.1 million was an additional investment. In October 2020, we entered into an infrastructure loan agreement with Don Memo for $2.4 million secured by Don Memo’s property and equipment. This infrastructure loan will incur interest at 7.25%. In October 2020, we paid $0.7 million related to this agreement, and the remaining $1.7 million will be paid in January 2021. As of October 31, 2020, we have loaned a total of $0.7 million (included in other long-term assets). As of October 31, 2020, 2019 and 2018, we had outstanding advances of $2.4 million, $3.7 million and $2.4 million to Don Memo. As of October 31, 2020, 2019 and 2018, we had a tomato liability of $1.8 million, $0.9 million and $1.0 million to Don Memo. During the year ended October 31, 2020, 2019 and 2018 we purchased $15.8 million, $14.1 million and $11.1 million of tomatoes from Don Memo pursuant to our consignment agreement.

We had grower advances due from Belher of $4.5 million, $4.5 million and $4.0 million as of October 31, 2020, 2019 and 2018. In August 2018, we entered into an amended infrastructure agreement with Belher and advanced $3.0 million. This amount shall be paid back annually at $0.6 million through June 2023, and incur interest of Libor plus 10%. In August 2020, we have amended this agreement to lower the interest rate to 7.25% and change the repayment terms to two years ($0.9 million per year). We had infrastructure advances due from Belher of $1.8 million, $2.6 million and $3.4 million as of October 31, 2020, 2019 and 2018. Of these infrastructure advances $0.9 million was recorded as receivable in prepaid and other current assets and $0.9 million is included in other assets. During the year ended October 31, 2020, 2019 and 2018, we purchased $26.9 million, $19.5 million, and $14.1 million of tomatoes from Belher pursuant to our consignment agreement.

In August 2015, we entered into Shareholder’s Agreement with various partners which created Avocados de Jalisco, S.A.P.I. de C.V. Avocados de Jalisco is a Mexican corporation created to engage in procuring, packing and selling avocados. This entity is approximately 83% owned by Calavo and is consolidated in our financial statements. Avocados de Jalisco built a packinghouse located in Jalisco, Mexico and such packinghouse began operations in June of 2017. As of October 31, 2020 and 2019, we have made an insignificant amount of preseason advances to various partners of Avocados de Jalisco. During the year ended October 31, 2020, 2019 and 2018, we purchased approximately $8.3 million, $2.5 million and $1.8 million of avocados from the partners of Avocados de Jalisco. In January 2018, we transferred $1.0 million of equity interest to the Avocados de Jalisco noncontrolling members.

As of October 31, 2019, we have an equity investment of $5.8 million in FreshRealm. During the quarter ended July 31, 2020, we concluded that there was no longer any value associated with our FreshRealm investment and therefore recognized a $2.8 million impairment charge to fully impair the investment. See Note 16 and Note 20 for additional information. As of October 31, 2020, our ownership percentage in FreshRealm was approximately 37%.

Effective July 31, 2018, we entered into a Note and Membership Unit Purchase Agreement (“NMUPA”) with FreshRealm, pursuant to which we agreed to provide additional financing to FreshRealm, subject to certain terms and conditions. Pursuant to the NMUPA, we entered into a $12 million Senior Promissory Note and corresponding Security Agreement with FreshRealm, effective August 10, 2018. We funded $9 million of this loan commitment during the fourth quarter of fiscal 2018 and funded the remaining loan commitment amount of $3 million during the first quarter of fiscal 2019. During the second quarter of fiscal 2019, we amended the note related to this loan, due October 31, 2019, and, among other things, included a provision whereby we had the option to extend repayment of this note to November 1, 2020.

During our first quarter of fiscal 2019, we loaned FreshRealm $7.5 million in unsecured notes receivable. During our second quarter of fiscal 2019, we loaned an additional $4.2 million on an unsecured basis to FreshRealm under similar terms. During our third quarter of fiscal 2019, we loaned an additional $5.4 million on an unsecured basis to FreshRealm under similar terms. During our fourth quarter of fiscal 2019, we loaned an additional $3.7 million to FreshRealm for a total outstanding principal amount of $32.8 million, not including accrued interest. At such time, we entered into an agreement with FreshRealm wherein all of the outstanding loan amount owed by FreshRealm to us would be secured in the assets of FreshRealm.

As of November 25, 2019, we modified approximately $2.7 million of the outstanding secured loan to FreshRealm and applied it to unsecured debt as part of a convertible note round offered by FreshRealm to its existing equity holders. Such convertible note bears interest at the rate of 10% up to the time of conversion. Such $2.7 million unsecured note, along with the related accrued interest amount, was converted into additional equity of FreshRealm as of February 3, 2020. As a result of the convertible note round offered by FreshRealm our ownership percentage in FreshRealm (upon conversion on February 3, 2020) decreased to approximately 37%.

On April 1, 2020, we entered into another Unit Purchase and Subscription Agreement with FreshRealm, where FreshRealm raised $4.0 million of additional equity from existing members. As part of that round, we invested $0.5 million in cash and additionally converted the $1.0 million short-term advanced in February 2020 into equity. Our ownership percentage in FreshRealm remained unchanged at 37%.

On April 1, 2020, in connection with the $4.0 million capital raise previously mentioned, we entered into the 10^th amendment to the FreshRealm promissory note which adjusted the interest rate on the notes receivable from 10% to 3% effective April 1, 2020. This interest rate reduction was meant to serve as inducement for other investors to participate in FreshRealm’s on-going capital raise and was contingent on FreshRealm completing that equity round. They successfully raised the full $4 million equity round by the May 15, 2020 deadline. The entire principal balance of these notes shall be due and payable in full on April 1, 2022. If FreshRealm fails to make monthly interest payments beginning October 31, 2020, then the maturity date shall be reverted to November 1, 2020. Calavo has the option for up to two additional and separate one-year extensions of April 1, 2023 and April 1, 2024. As of October 31, 2019, we have $35.2 million in note receivables (including interest) from FreshRealm.

During the third quarter of fiscal 2020, the results of operations of FreshRealm have deteriorated significantly from our expectations three months prior, with declining sales and continuing losses. FreshRealm will likely require additional capital in order to continue as a going concern. We do not plan to invest or loan any additional capital to FreshRealm. We have performed a valuation analysis of the financial condition and projected operations of FreshRealm under various methods, including liquidation, exit multiple, and perpetual growth approaches, appropriately weighted for the circumstances. In accordance with the foregoing, we have recorded an impairment of 100% of our equity investment of $2.8 million, and we have recorded a reserve for collectability of 100% of our note receivable balance of $34.2 million (which includes accrued interest of $4.1 million), and $0.3 million in trade accounts receivable as of October 31, 2020, which resulted in a loss of $37.3 million, which is included in the accompanying consolidated statement of operations under “Loss on reserve for FreshRealm note receivable and impairment of investment”. As of August 1, 2020, we have discontinued the accrual of interest income on the note receivables. In connection with the foregoing, we recorded a $9.5 million discreet income tax benefit for the third quarter of fiscal 2020.

One officer and five members of our board of directors have investments in FreshRealm as of October 31, 2020. In January 2018, one of our non-executive directors invested $1.8 million into FreshRealm. In the second quarter of fiscal

2018, two of our non-executive directors invested $1.2 million into FreshRealm. In October 2019, our former Chairman and Chief Executive Officer invested $0.5 million in FreshRealm. In October 2019, one of our non-executive directors invested $0.2 million into FreshRealm. In April 2020, our former Chairman and Chief Executive Officer invested $0.4 million in FreshRealm, and two other members of the board of directors invested an additional $0.1 million.

In the first quarter of fiscal 2019, FreshRealm entered into a supply contract with a large multi-national, multi-channel retailer. Calavo co-signed an addendum to this agreement to provide assurance to the customer that Calavo will assume responsibility for performance, in the event that FreshRealm cannot perform, provided that the customer must work in good faith to make reasonable adjustments to logistical elements in the contract, if requested by Calavo. We believe that we are able to fulfill our responsibility to this arrangement without significant impact on our results of operations.

We provide storage services to FreshRealm from select Value-Added Depots and RFG facilities. We received $0.4 million, $0.2 million and $0.3 million in storage services revenue from FreshRealm for the year ended October 31, 2020, 2019 and 2018. For the year ended October 31, 2020, 2019 and 2018, RFG sold $0.3 million, $2.0 million and $9.9 million of products to FreshRealm.

The previous owners of RFG, one of which is currently the Chief Executive Officer of Calavo, have a majority ownership of certain entities that provide various services to RFG, specifically LIG Partners, LLC and THNC, LLC. One of RFG’s California operating entities leases a building from LIG Partners, LLC (LIG) pursuant to an operating lease. This lease with LIG was renewed in April 2019, through May 2026. RFG’s Texas operating entity leases a building from THNC, LLC (THNC) pursuant to an operating lease. In the first quarter of fiscal 2020, these facilities have been sold to a third party and our lease has transferred to the new owners. See the following tables for the related party activity for fiscal years 2020 and 2019:


	Year ended October 31,
(in thousands)	2020		2019
Rent paid to LIG	$	—	$	579
Rent paid to THNC, LLC	$	—	$	795

Income Taxes

12 Months Ended

Oct. 31, 2020

Income Taxes

Income Taxes

9. Income Taxes

On March 27, 2020, the President of the United States signed and enacted into law the Coronavirus Aid, Relief and Economic Security (CARES) Act. The CARES Act is a relief package intended to assist many aspects of the Country’s economy of which certain components of the Act impacted the Company's 2020 income tax provision. We recorded approximately $1.1 million of tax benefit as a result of the provision allowing taxpayers to carry back net operating losses to offset taxable income on previously filed tax returns.

The Company determined that certain foreign earnings to be indefinitely reinvested outside the United States. Our intent is to permanently reinvest these funds outside of the United States and our current plans do not demonstrate a need to repatriate the cash to fund our U.S. operations. However, if these funds were repatriated, we would be required to accrue and pay applicable United States taxes (if any) and withholding taxes payable to foreign tax authorities.

The income tax provision (benefit) consists of the following for the years ended October 31, (in thousands):


	2020		2019		2018

Current:
Federal	$	(5,684)	$	9,146	$	7,115
State		(214)		2,516		1,582
Foreign		645		290		(844)
Total current		(5,253)		11,952		7,853

Deferred:
Federal		575		516		3,328
State		(505)		209		690
Foreign		260		205		848
Total deferred		330		930		4,866
Change in valuation allowance		631		—		—
Total income tax provision (benefit)	$	(4,292)	$	12,882	$	12,719

At October 31, 2020 and 2019, gross deferred tax assets totaled approximately $31.5 million and $18.5 million, while gross deferred tax liabilities totaled approximately $28.4 million and $15.0 million. Deferred income taxes reflect the net of temporary differences between the carrying amount of assets and liabilities for financial reporting and income tax purposes.

Significant components of our deferred taxes assets (liabilities) as of October 31, are as follows (in thousands):


	2020		2019

Property, plant, and equipment		(11,552)		(10,407)
Intangible assets		6,861		11,805
Unrealized gain, Limoneira investment		(116)		(2,352)
Investment in FreshRealm		1,096		(1,513)
Stock-based compensation		812		857
State taxes		(592)		(437)
Credits and incentives		1,345		1,109
Allowance for accounts receivable		1,165		834
Inventories		864		445
Accrued liabilities		2,119		3,423
Operating lease - Right of use assets		(15,732)		—
Operating lease liabilities		16,895		—
Net operating loss		369		—
Valuation allowance		(631)		—
Other		(417)		(317)
Long-term deferred income taxes	$	2,486	$	3,447

As of October 31, 2020, the Company has gross federal net operating losses of $8 million that are expected to be carried back to one of the five preceding tax years and do not expire, and gross state net operating loss carryforwards of approximately $7.2 million with carryforward periods primarily ranging from 20 years to indefinite.

The Company records a valuation allowance against deferred tax assets when determined that all or a portion of the deferred tax assets are not more likely than not to be realized based on all available evidence. As of October 31, 2020, the Company recorded an approximate $0.6 million valuation allowance against the deferred tax assets for state tax credit carryforwards that are more likely than not to expire unutilized between 2022 and 2028.

A reconciliation of the significant differences between the federal statutory income tax rate and the effective income tax rate on pretax income for the years ended October 31, is as follows:


	2020		2019		2018

Federal statutory tax rate	21.0	%	21.0	%	23.3	%
State taxes, net of federal effects	4.4		3.7		3.6
NOL carryback - CARES Act	6.2		—		—
Foreign income taxes greater than U.S.	(2.3)		0.4		0.7
Revaluation of deferred taxes	—		—		4.5
Section 199 deduction	—		—		(1.9)
Provision to return	(2.5)		0.7		(1.2)
Transition Tax	—		—		0.6
State rate change	(0.1)		(0.2)		0.2
Valuation allowance	(2.7)		—		—
Other	(0.3)		0.4		(1.4)
	23.7	%	26.0	%	28.4	%

For fiscal years 2020, 2019 and 2018, income (loss) before income taxes (benefit) related to domestic operations was approximately $(18.9) million, $47.9 million, and $45.8 million. For fiscal years 2020, 2019 and 2018, income (loss) before income taxes (benefit) related to foreign operations was approximately $0.8 million, $1.6 million and $(1.1) million.

As of October 31, 2020 and 2019, we had liability of $0.1 million and $0.1 million for unrecognized tax benefits related to various foreign income tax matters.

We are subject to U.S. federal income tax as well as income of multiple state tax and foreign tax jurisdictions. We are no longer subject to U.S. income tax examinations for the fiscal years prior to October 31, 2017, and are no longer subject to state income tax examinations for fiscal years prior to October 31, 2016.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References + Details

Segment Information

12 Months Ended

Oct. 31, 2020

Segment Information

Segment Information

10. Segment Information

As discussed in Note 1, we report our operations in three different business segments: (1) Fresh products, (2) Calavo Foods, and (3) RFG. These three business segments are presented based on how information is used by our Chief Executive Officer to measure performance and allocate resources. The Fresh products segment includes all operations that involve the distribution of avocados and other fresh produce products. The Calavo Foods segment represents all operations related to the purchase, manufacturing, and distribution of prepared avocado products, including guacamole, and salsa. The RFG segment represents operations related to the manufacturing and distribution of fresh-cut fruit, fresh-cut vegetables and prepared foods. Selling, general and administrative expenses, as well as other non-operating income/expense items, are evaluated by our Chief Executive Officer in the aggregate. We do not allocate assets, or specifically identify them to, our operating segments.

The following table sets forth sales by product category, by segment (in thousands)


	Fresh		Calavo				Interco.
	products		Foods		RFG		Elimins.		Total

	(All amounts are presented in thousands)
Year ended October 31, 2020
Net sales	$	585,052	$	75,220	$	404,723	$	(5,624)	$	1,059,371
Cost of sales		537,489		54,277		383,331		(5,624)		969,473
Gross profit	$	47,563	$	20,943	$	21,392	$	—	$	89,898

Year ended October 31, 2019
Net sales	$	621,183	$	94,734	$	486,063	$	(6,203)	$	1,195,777
Cost of sales		534,600		73,735		465,563		(6,203)		1,067,695
Gross profit	$	86,583	$	20,999	$	20,500	$	—	$	128,082

Year ended October 31, 2018
Net sales	$	553,208	$	91,646	$	448,930	$	(5,026)	$	1,088,758
Cost of sales		498,962		64,221		416,985		(5,026)		975,142
Gross profit	$	54,246	$	27,425	$	31,945	$	—	$	113,616

For fiscal year 2020, 2019 and 2018, inter-segment sales and cost of sales of $1.7 million, $1.8 million and $1.6 million between Fresh products and RFG were eliminated. For fiscal year 2020, 2019 and 2018, inter-segment sales and cost of sales of $4.0 million, $4.0 million and $3.5 million between Calavo Foods and RFG were eliminated.

The following table sets forth sales by product category, by segment (in thousands):


	Year Ended October 31, 2020								Year Ended October 31, 2019

	Fresh		Calavo						Fresh		Calavo
	products		Foods		RFG		Total		products		Foods		RFG		Total

Avocados	$	521,542	$	—	$	—	$	521,542	$	569,779	$	—	$	—	$	569,779
Tomatoes		53,922		—		—		53,922		40,879		—		—		40,879
Papayas		10,529		—		—		10,529		10,931		—		—		10,931
Other fresh income		327		—		—		327		1,353		—		—		1,353
Prepared avocado products		—		79,382		—		79,382		—		100,842		—		100,842
Salsa		—		2,783		—		2,783		—		3,252		—		3,252
Fresh-cut fruit & veg. and prepared foods		—		—		406,572		406,572		—		—		488,373		488,373
Total gross sales		586,320		82,165		406,572		1,075,057		622,942		104,094		488,373		1,215,409
Less sales incentives		(1,268)		(6,945)		(1,849)		(10,062)		(1,759)		(9,360)		(2,310)		(13,429)
Less inter-company eliminations		(1,651)		(3,973)		—		(5,624)		(2,246)		(3,957)		—		(6,203)
Net sales	$	583,401	$	71,247	$	404,723	$	1,059,371	$	618,937	$	90,777	$	486,063	$	1,195,777


	Year Ended October 31, 2019								Year Ended October 31, 2018

	Fresh		Calavo						Fresh		Calavo
	products		Foods		RFG		Total		products		Foods		RFG		Total

Avocados	$	569,779	$	—	$	—	$	569,779	$	511,730	$	—	$	—	$	511,730
Tomatoes		40,879		—		—		40,879		31,608		—		—		31,608
Papayas		10,931		—		—		10,931		11,699		—		—		11,699
Other fresh income		1,353		—		—		1,353		498		—		—		498
Prepared avocado products		—		100,842		—		100,842		—		99,635		—		99,635
Salsa		—		3,252		—		3,252		—		3,423		—		3,423
Fresh-cut fruit & veg. and prepared foods		—		—		488,373		488,373		—		—		451,203		451,203
Total gross sales		622,942		104,094		488,373		1,215,409		555,535		103,058		451,203		1,109,796
Less sales incentives		(1,759)		(9,360)		(2,310)		(13,429)		(2,327)		(11,412)		(2,273)		(16,012)
Less inter-company eliminations		(2,246)		(3,957)		—		(6,203)		(1,554)		(3,472)		—		(5,026)
Net sales	$	618,937	$	90,777	$	486,063	$	1,195,777	$	551,654	$	88,174	$	448,930	$	1,088,758

Sales to customers outside the U.S. were approximately $29.7 million, $42.5 million and $41.8. million for fiscal years 2020, 2019, and 2018.

RFG segment sales included sales to one customer who represented more than 10% of total consolidated revenues for fiscal 2020, 2019 and 2018. Additionally, the Fresh products segment had sales to one customer that represented more than 10% of total consolidated revenues for fiscal 2020, 2019 and 2018.

Our goodwill balance of $28.4 million is attributed by segment to Fresh products for $3.9 million and RFG for $24.5 million as of October 31, 2020. Our goodwill balance of $18.3 million is attributed by segment to Fresh products for $3.9 million and RFG for $14.3 million as of October 31, 2019 and 2018.

Long-lived assets attributed to geographic areas as of October 31, are as follows (in thousands):


	United States		Mexico		Consolidated
2020	$	95,110	$	35,160	$	130,270
2019	$	98,224	$	33,874	$	132,098

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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+ Details

Long-Term Obligations

12 Months Ended

Oct. 31, 2020

Long-Term Obligations

Long-Term Obligations

11. Long-Term Obligations

Long-term obligations at fiscal year ends consist of the following (in thousands):


	2020		2019
Finance leases		7,059		6,174
Less current portion		(1,343)		(762)
	$	5,716	$	5,412

In April 2019, we sold our Temecula, California packinghouse for $7.1 million in cash and, concurrently, leased back a portion of the facility representing approximately one-third of the total square footage. This generated a gain of $6.4 million. Since our leaseback of the building is classified as a capital lease and covers substantially all of the leased property, the gain recognized currently is the amount of the gain in excess of the recorded amount of the leased asset. As a result, we recognized a gain of approximately $1.9 million in the second quarter of fiscal 2019 and recorded a deferred gain of $4.5 million, which will be recognized over the life of the lease. In connection with the capital lease we capitalized $3.2 million as a capital lease in property, plant and equipment and recorded a lease liability of $3.2 million ($0.1 million in current portion and $3.1 million in long term debt).

During our third quarter of fiscal year 2019, we entered into a 10-year building and equipment lease for fresh food facility in Conley, GA. This facility is primarily intended to process fresh-cut fruit & vegetables and prepared foods products for our RFG business segment. Annual rent for the building and equipment approximates $0.9 million and $0.6 million, respectively, over the life of the lease. The lease for the equipment is considered to be a capital lease, therefore, we calculated the present value of the minimum lease payments related to the equipment and capitalized $2.8 million as a capital lease in property, plant and equipment and recorded $2.8 million as a lease obligation.

See Note 17 for the adoption of the new lease accounting disclosure.

Stock-Based Compensation

12 Months Ended

Oct. 31, 2020

Stock-Based Compensation

Stock-Based Compensation

12. Stock-Based Compensation

The 2005 Stock Incentive Plan

The 2005 Stock Incentive Plan, was a stock-based compensation plan, under which employees and directors could be granted options to purchase shares of our common stock. In June 2012, this plan was terminated without affecting the outstanding stock options related to this plan.

Stock options were granted with exercise prices of not less than the fair market value at grant date, generally vested over one to five years and generally expired two to five years after the grant date. We settle stock option exercises with newly issued shares of common stock.

We measured compensation cost for all stock-based awards pursuant to this plan at fair value on the date of grant and recognize compensation expense in our consolidated statements of operations over the service period that the awards are expected to vest. We measured the fair value of our stock based compensation awards on the date of grant.

A summary of stock option activity is as follows (in thousands, except for per share amounts):


		Weighted-Average		Aggregate
	Number of Shares	Exercise Price		Intrinsic Value
Outstanding at October 31, 2019	2	$	19.20
Exercised	(2)	$	19.20
Outstanding at October 31, 2020	—	$	—	$	—
Exercisable at October 31, 2020	—	$	—	$	—

The total recognized and unrecognized stock-based compensation expense was insignificant for the year ended October 31, 2020 and 2019.

The 2011 Management Incentive Plan

In April 2011, our shareholders approved the Calavo Growers, Inc. 2011 Management Incentive Plan (the 2011 Plan). All directors, officers, employees and consultants (including prospective directors, officers, employees and consultants) of Calavo and its subsidiaries are eligible to receive awards under the 2011 Plan. Up to 1,500,000 shares of common stock may be issued by Calavo under the 2011 Plan.

On August 10, 2020, as part of the employment agreement, Mark Lodge our newly appointed Chief Operating Officer was granted 4,568 restricted shares. The closing price of our stock on such date was $65.67. These shares vest in one-third increments, on an annual basis. These shares were granted pursuant to our 2011 Plan. The total recognized stock-based compensation expense for these grants was less than $0.1 million for the year ended October 31, 2020.

On June 17, 2020, as part of the employment agreement, James Gibson our newly appointed Chief Executive Officer was granted 13,053 restricted shares, based on the date of when he became Chief Executive Officer. The closing price of our stock on such date was $76.61. These shares vest in one-third increments, on an annual basis. These shares were granted pursuant to our 2011 Plan. The total recognized stock-based compensation expense for these grants was $0.2 million for the year ended October 31, 2020.

On May 11, 2020, as part of the employment agreement, Kevin Manion our newly appointed Chief Financial Officer was granted 5,418 restricted shares. The closing price of our stock on such date was $55.37. These shares vest in one-third increments, on an annual basis. These shares were granted pursuant to our 2011 Plan. The total recognized stock-based compensation expense for these grants was less than $0.1 million for the year ended October 31, 2020.

On April 22, 2020, three of our former officers were granted a total 18,324 unrestricted shares, as part of their past services. The closing price of our stock on such date was $61.09. These shares were granted pursuant to our 2011 Plan. The total recognized stock-based compensation expense for these grants was $1.1 million for the year ended October 31, 2020.

In January of fiscal 2020 all 12 of our non-employee directors were granted 1,500 restricted shares each (total of 18,000 shares). In January of fiscal 2019 and 2018, all 12 of our non-employee directors were granted 1,750 restricted shares each (total of 21,000 shares). These shares have full voting rights and participate in dividends as if unrestricted. The closing price of our stock was $87.21, $71.56 and $85.90 for each respective year. After one year from the grant date, as long as the directors are still serving on the board, these shares lose their restriction and become non-forfeitable and transferable. These shares were granted pursuant to our 2011 Plan. The total recognized stock-based compensation expense for these grants were $1.6 million and $1.6 million for the year ended October 31, 2020 and 2019.

On December 18, 2019, our executive officers were granted a total of 31,158 restricted shares. On December 14, 2018, our executive officers were granted a total of 14,522 restricted shares. On December 18, 2017, our executive officers were granted a total of 25,241 restricted shares. These shares have full voting rights and participate in dividends as if unrestricted. The closing price of our stock on such dates was $87.63, $85.67 and $75.45, respectively These shares vest in one-third increments, on an annual basis, beginning December 18, 2020, December 14, 2019 and December 18, 2018. These shares were granted pursuant to our 2011 Plan. The total recognized stock-based compensation expense for these grants were $1.4 million and $2.0 million for the year ended October 31, 2020 and 2019.

A summary of restricted stock activity, related to our 2011 Management Incentive Plan, is as follows (in thousands, except for per share amounts):


		Weighted-Average		Aggregate
	Number of Shares	Grant Price		Intrinsic Value
Outstanding at October 31, 2019	69	$	71.74
Vested	(51)	$	70.48
Forfeited	(14)	$	84.54
Granted	72	$	81.19
Outstanding at October 31, 2020	76	$	80.45	$	5,107

The total recognized stock-based compensation expense for restricted stock was $4.5 million and $3.6 million for the years ended October 31, 2020 and 2019.

A summary of stock option activity, related to our 2011 Management Incentive Plan, is as follows (in thousands, except for per share amounts):


		Weighted-Average		Aggregate
		Exercise		Intrinsic
	Number of Shares	Price		Value
Outstanding at October 31, 2019	18	$	41.91
Exercised	(2)	$	23.48
Outstanding at October 31, 2020	16	$	44.21	$	380
Exercisable at October 31, 2020	12	$	45.59	$	269

The weighted average remaining life of such outstanding options is 3.1years. The weighted average remaining life of such exercisable options is 2.1 years. The fair value of vested shares as of October 31, 2020 and 2019, was $0.8 million and $0.7 million.

Dividends

12 Months Ended

Oct. 31, 2020

Dividends

Dividends

13. Dividends

On October 26, 2020, the Company declared a $1.15 per share cash dividend to shareholders of record on November 13, 2020. On December 4, 2020, the Company paid this cash dividend which totaled $20.3 million. On December 6, 2019, the Company paid a $1.10 per share dividend in the aggregate amount of $19.4 million to shareholders of record on November 15, 2019.

Fair Value Measurements

12 Months Ended

Oct. 31, 2020

Fair Value Measurements

Fair Value Measurements

14. Fair Value Measurements

A fair value measurement is determined based on the assumptions that a market participant would use in pricing an asset or liability. A three-tiered hierarchy draws distinctions between market participant assumptions based on (i) observable inputs such as quoted prices in active markets (Level 1), (ii) inputs other than quoted prices in active markets that are observable either directly or indirectly (Level 2) and (iii) unobservable inputs that require the Company to use present value and other valuation techniques in the determination of fair value (Level 3).

The following table sets forth our financial assets and liabilities as of October 31, 2020 that are measured on a recurring basis during the period, segregated by level within the fair value hierarchy:


	Level 1		Level 2		Level 3		Total

	(All amounts are presented in thousands)
Assets at Fair Value at October 31, 2020:
Investment in Limoneira Company⁽¹⁾	$	23,197		-		-	$	23,197
Total assets at fair value	$	23,197		-		-	$	23,197

Assets at Fair Value at October 31, 2019:
Investment in Limoneira Company⁽¹⁾	$	31,734		-		-	$	31,734
Total assets at fair value	$	31,734		-		-	$	31,734

(1)

The investment in Limoneira Company consists of marketable securities in the Limoneira Company stock. We currently own less than 10% of Limoneira’s outstanding common stock. These securities are measured at fair value by quoted market prices. Limoneira’s stock price at October 31, 2020 and October 31, 2019 equaled $13.83 per share and $18.92 per share (level 1). For the year ended October 31, 2019, we sold 51,271 shares of Limoneira stock and recorded a loss of $0.1 million in our consolidated statements of income. Our remaining shares of Limoneira stock, totaling 1,677,299, were revalued to $13.83 per share and $18.92 per share at October 31, 2020 and 2019 and, as a result, we recorded a loss of $8.5 million and $9.6 million for the year ended October 31, 2020 and 2019 in our consolidated statements of operations. For the year ended October 31, 2018, we recognized losses of Unrealized gains and losses are recognized through other comprehensive income. Unrealized investment holding gains arising during the year ended October 31, 2018, was $2.2 million.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Mexican IVA taxes receivable

12 Months Ended

Oct. 31, 2020

Mexican IVA taxes receivable

Mexican IVA taxes receivable

15. Mexican IVA taxes receivable

Included in other assets are tax receivables due from the Mexican government for value-added taxes (IVA) paid in advance. CDM is charged IVA by vendors on certain expenditures in Mexico, which, insofar as they relate to the exportation of goods, translate into IVA amounts receivable from the Mexican government.

As of October 31, 2020, and October 31, 2019, CDM IVA receivables totaled $30.2 million (640.7 million Mexican pesos) and $27.6 million (529.6 million Mexican pesos). Historically, CDM received IVA refund payments from the Mexican tax authorities on a timely basis. Beginning in fiscal 2014 and continuing into fiscal 2020, however, the tax

authorities began carrying out more detailed reviews of our refund requests and our supporting documentation. Additionally, they are also questioning the refunds requested attributable to IVA paid to certain suppliers that allegedly did not fulfill their own tax obligations, specifically during the years 2013 through 2016, amounting to $6.5 million (137.3 million Mexican pesos), which is included in the total IVA receivables amount mentioned above. We believe these factors and others have contributed to delays in the processing of IVA claims by the Mexican tax authorities. Currently, we are in the process of collecting such balances through regular administrative processes, but certain amounts may ultimately need to be recovered via legal means and/or administrative appeals.

During the first quarter of fiscal 2017, tax authorities informed us that their internal opinion, based on the information provided by the local SAT office, considers that CDM is not properly documented relative to its declared tax structure and therefore CDM cannot claim the refundable IVA balance. CDM has strong arguments and supporting documentation to sustain its declared tax structure for IVA and income tax purposes. CDM filed an administrative appeal for the IVA related to the request of the months of July, August and September of 2015 (the “2015 Appeal”) in order to assert its argument that CDM is properly documented and to therefore change the SAT’s internal assessment. In August 2018, we received a favorable ruling from the SAT’s central legal department in Mexico City on the 2015 Appeal indicating that they believe CDM’s legal interpretation of its declared tax structure is indeed accurate. While favorable on this central matter of CDM’s declared tax structure, the ruling, however, still does not recognize the taxpayers right to a full refund for the IVA related to the months of July, August and September 2015. Therefore, in October 2018, CDM filed a substance-over-form annulment suit in the Federal Tax Court to recover its full refund for IVA over the subject period, which is currently pending resolution.

In spite of the favorable ruling from the SAT’s central legal department in Mexico City, as discussed above, the local SAT office continues to believe that CDM is not properly documented relative to its declared tax structure. As a result, they have not refunded any of CDM’s refundable IVA balances since 2012, specifically denying our IVA refund requests filed related to January through December of 2013, 2014, and 2015, and January 2017. CDM has strong arguments and supporting documentation to sustain its declared tax structure for IVA and income tax purposes. With assistance from our internationally recognized tax advisory firm, as of October 31, 2020, CDM has filed (or has plans to file) administrative appeals for the IVA related to all periods since 2013 through the present. A response to these administrative appeals is currently pending resolution.

In light of the foregoing, the Company is currently considering its options for resolution of the VAT receivables. In the unlikely event of an unfavorable resolution of the administrative appeals, we plan to file nullification suits with the Mexican Tax Court. If the suits result in an unfavorable ruling, there is an option to appeal to the Collegiate Circuit Court. The estimated time for the resolution of these suits could be 2 – 3 years. This estimated time could be impacted by the situation of the COVID-19 pandemic.

We believe that our operations in Mexico are properly documented. Furthermore, our internationally recognized tax advisors believe that there are legal grounds to prevail in the Federal Tax Court and that therefore, the Mexican tax authorities will ultimately authorize the refund of the corresponding IVA amounts.

FreshRealm

12 Months Ended

Oct. 31, 2020

FreshRealm

FreshRealm

16. FreshRealm

Variable Interest Entity

Based on the NMUPA and related Agreements, as described in Note 8, we reconsidered whether FreshRealm was a variable interest entity (VIE) as of October 31, 2020 and 2019. A VIE refers to a legal business structure in which an investor has a controlling interest in, despite not having a majority of voting rights; or a structure involving equity investors that do not have sufficient resources to support the ongoing operating needs of the business. Due primarily to FreshRealm utilizing substantially more debt to finance its activities, in addition to its existing equity, we believe that FreshRealm should be considered a VIE. In evaluating whether we are the primary beneficiary of FreshRealm, we considered several factors, including whether we (a) have the power to direct the activities that most significantly impact FreshRealm’s economic performance and (b) the obligation to absorb losses and the right to receive benefits that could potentially be significant to the VIE. We concluded that we were not the primary beneficiary of FreshRealm at October 31, 2020 and 2019, because the nature of our involvement with the activities of FreshRealm does not give us the power

to direct the activities that most significantly impact its economic performance. We do not have a future obligation to fund losses or debts on behalf of FreshRealm. We may, however, voluntarily contribute funds. In the accompanying statements of operations, we have presented the income (loss) from unconsolidated entities, after the provision for income taxes for all periods presented.

During the quarter ended July 31, 2020, we concluded that there was no longer any value associated with our FreshRealm investment and therefore recognized a $2.8 million impairment charge to fully impair the investment. (See Note 20). Our investment in FreshRealm totaled $5.8 million at October 31, 2019.

For the year ended October 31, 2020, 2019 and 2018, FreshRealm incurred losses totaling $24.1 million, $30.6 million and $29.4 million, of which we recorded $7.2 million, $14.1 million, and $12.0 million of non-cash losses during fiscal 2020, 2019 and 2018. Effective December 16, 2018, FreshRealm completed a “check the box” tax election to change their entity classification for tax purposes to that of a corporation. To effect this change, FreshRealm, among other things, amended its operating agreement to eliminate the appropriate language related to the flow-through tax consequences of its prior tax status (Seventh Amended and Restated LLC Agreement) and checked the appropriate box on Form 8832 which it then filed with the Internal Revenue Service (IRS). As a result, losses incurred by FreshRealm from November 1, 2018 to December 15, 2018 were recorded in accordance with FASB Accounting Standards Codification (“ASC”) 810, ASC 323, and ASC 970, which mandate that the recognition of losses for an unconsolidated subsidiary be handled in a manner consistent with cash distributions upon liquidation of the entity when such distributions are different than the investors percentage ownership. As such, we recorded 100% of FreshRealm’s losses from November 1, 2018 through December 15, 2018 totaling $4.2 million. Losses incurred by FreshRealm from December 16, 2018 to October 31, 2019 (after the change in tax status was effective) were recorded to reflect our proportionate share of FreshRealm losses. We recorded losses from December 16, 2018 through October 31, 2019 totaling $9.9 million. During our year ended October 31, 2020, we recorded losses of approximately $7.2 million, reflecting our proportionate share of FreshRealm losses. See Note 20 for more information on the reserve for collectability recorded on FreshRealm’s Note receivable and impairment charge recorded on the investment.

As of October 31, 2020 and 2019, we have note receivables from FreshRealm totaling $34.5 million and $35.2 million. See Note 8 for further information. See Note 20 for further discussion of the reserve for collectability recorded on FreshRealm’s Note receivable.

In the first quarter of fiscal 2019, FreshRealm entered into a supply contract with a large multinational, multi-channel retailer. Calavo co-signed an addendum to this agreement to provide assurance to the customer that Calavo will assume responsibility for performance, in the event that FreshRealm cannot perform, provided that the customer must work in good faith to make reasonable adjustments to logistical elements in the contract, if requested by Calavo. We believe that we are able to fulfill our responsibility to this arrangement without significant impact on our results of operations.

Except for the performance guarantee noted above, our exposure to the obligations of FreshRealm is generally limited to our investment. See Note 8 and Note 20 for more information. Our maximum exposure to loss could increase in the future if FreshRealm receives additional financing (i.e. equity or debt) from Calavo. We are under no obligation to provide FreshRealm additional financing and we currently have no plans to provide any additional financing to FreshRealm.

Unconsolidated Equity Method Investee

On May 20, 2020, the SEC issued a final rule regarding the financial statement requirements for acquisitions and dispositions of a business, which included, among other things, amending (1) certain criteria in the significance tests for equity method investees, such as introducing a revenue component when calculating the income test, (ii) related pro forma financial information requirements including its form and content, and (iii) related disclosure requirements, including the number of acquiree financial statement periods required to be presented in SEC filings. The final rule is effective for fiscal years beginning after December 31, 2020, with early application permitted. The Company determined to adopt this SEC final rule as of October 31, 2020, and as a result, the Company’s investment in FreshRealm was no longer considered a significant subsidiary.

The following tables show summarized financial information for FreshRealm (in thousands):

Balance Sheet:


	October 31,		October 31,
	2020		2019

Assets:
Cash and cash equivalents	$	508	$	961
Accounts receivable, net of allowances		716		1,493
Inventories, net		2,725		2,792
Prepaid expenses and other current assets		642		732
Property, plant, and equipment, net		3,368		6,076
Other assets		126		703
	$	8,085	$	12,757

Liabilities and equity:
Current liabilities	$	14,160	$	6,533
Debt to Calavo		34,456		35,241
Long-term liabilities		—		—
Equity		(40,531)		(29,017)
	$	8,085	$	12,757

Statement of Operations:


		Year ended October 31,
	2020		2019		2018

Net sales	$	19,232	$	24,112	$	33,769
Gross loss		(3,022)		(5,783)		(10,868)
Selling, general and administrative		(14,188)		(20,196)		(19,512)
Other		(6,850)		(4,621)		1,023
Net loss	$	(24,060)	$	(30,600)	$	(29,357)

Leases

12 Months Ended

Oct. 31, 2020

Leases

Leases

17. Leases

The impact of applying ASC 842 effective as of November 1, 2019, to the Company’s consolidated statements of operations and cash flows was not significant. The major impacts to the balance sheet at the effective date were 1) the addition of $65.7 million in operating lease assets and $69.6 million of operating lease liabilities, 2) the removal of approximately $3.7 million and $1.2 million of deferred rent and other long-term obligations, respectively, and 3) a cumulative-effect adjustment for the adoption of ASC 842 of $0.9 million was recorded to retained earnings, which relates to the gain previously recognized in accordance with ASC 840 on its sale and operating leaseback of the Temecula facility.

ASC 842 made changes to sale-leaseback accounting to result in the recognition of the gain on the transaction at the time of the sale instead of recognizing over the leaseback period, when the transaction is deemed to be a sale instead of a financing arrangement. ASC 842 further changes the assessment of sale accounting from a transfer of risk and rewards assessment to a transfer of control assessment.

We utilized the modified retrospective adoption method. Therefore, the consolidated financial statements for 2020 are presented under the new standard, while the comparative periods presented are not adjusted and continue to be reported in accordance with the Company's historical accounting policy.

The standard provides a number of optional practical expedients and policy elections in transition. We have elected to apply the package of practical expedients under which we will not reassess under the standard our prior conclusions about lease classification and initial direct costs. We have elected the short-term lease recognition exemption for all leases that qualify (under one year term), meaning we will recognize expense on a straight-line basis and will not include the recognition of a right-of-use asset or lease liability. We will account for lease and non-lease components as a single-lease component for all leases.

We lease property and equipment under finance and operating leases. For leases with terms greater than 12 months, we record the related asset and obligation at the present value of lease payments over the term. Many of our leases include rental escalation clauses, renewal options and/or termination options that are factored into our determination of lease payments when appropriate.

Right-of-use assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. Right-of-use assets and liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term. When available, we use the rate implicit in the lease to discount lease payments to present value; however, most of our leases do not provide a readily determinable implicit rate. We estimated our incremental borrowing rate based upon a synthetic credit rating and yield curve analysis. As a result, the incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments.

We lease certain property, plant and equipment, including office facilities, under operating leases. The lease term consists of the noncancellable period of the lease and the periods covered by options to extend or terminate the lease when it is reasonably certain that the Company will exercise such options. The Company's lease agreements do not contain any residual value guarantees.

Lease Position

The following table presents the lease-related assets and liabilities recorded on the balance sheet as of October 31, 2020 (in thousands):


		October 31,
		2020

Assets
Non-current assets:
Operating lease assets	Operating lease right-of-use assets	$	60,262
Finance lease assets	Property, plant and equipment, net		6,830
		$	67,092
Liabilities
Current liabilities:
Operating	Current portion of operating leases	$	6,443
Finance	Current portion of long-term debt and finance leases		1,343
Long-term obligations
Operating	Long-term operating leases, less current portion		58,273
Finance	Long-term debt and finance leases, less current portion		5,716
		$	71,775


Weighted-average remaining lease term:
Operating leases	10.0 years
Finance leases	7.9 years

Weighted-average discount rate:
Operating leases	2.83	%
Finance leases	3.28	%

Lease Costs

The following table presents certain information related to the lease costs for finance and operating leases for the year ended October 31, 2020 (in thousands):


	Year ended
	October 31, 2020
Amortization of financing lease assets	$	1,043
Operating lease cost		8,271
Short-term lease cost		996
Variable lease cost		2,865
Interest on financing lease liabilities		235
Total lease cost	$	13,410

Other Information

The following table presents supplemental cash flow information related to the leases for the year ended October 31, 2020 (in thousands):


	Year ended
Cash paid for amounts included in the measurement of lease liabilities	October 31, 2020
Operating cash flows for operating leases	$	7,689
Financing cash flows for finance leases		1,115
Operating cash flows for finance leases		235

The total right-of-use assets obtained in exchange for new operating leases for the year ended October 31, 2020 was $1.1 million.

Undiscounted Cash Flows

The following table reconciles the undiscounted cash flows for each of the first five years and total remaining years to the finance lease liabilities and operating lease liabilities recorded on the balance sheet as of October 31, 2020 (in thousands):


	Operating		Finance
	Leases		Leases
2021	$	8,171	$	1,551
2022		7,986		1,416
2023		7,922		1,301
2024		7,572		765
2025		6,748		371
Thereafter		36,478		2,788
Total lease payments		74,877		8,192
Less: imputed interest		10,161		1,133
Total lease liability	$	64,716	$	7,059

Prior to the adoption of ASC 842, as of October 31, 2019, we were committed to make minimum cash payments under these agreements, as follows (in thousands):


2020	$	9,534
2021		9,007
2022		8,672
2023		8,603
2024		8,203
Thereafter		50,796
	$	94,815

Total rent expense amounted to approximately $10.7 million for the year ended Octobr 31, 2019.

Prior to the adoption of ASC 842, as of October 31, 2019, capital lease payments are scheduled as follows (in thousands):


	Total
Year ending October 31:
2020	$	907
2021		915
2022		908
2023		900
2024		548
Thereafter		3,162
Minimum lease payments		7,340
Less interest		(1,166)
Present value of future minimum lease payments	$	6,174

Present value of future minimum lease payments as of October 31, 2019 consist of $5.4 million included in long-term obligations and finance leases and $0.8 million included in current portion of long-term obligations and finance leases.

Acquisition of Simply Fresh Fruit

12 Months Ended

Oct. 31, 2020

Acquisition of Simply Fresh Fruit

Acquisition of Simply Fresh Fruit

18. Acquisition of Simply Fresh Fruit

On January 21, 2020, we announced that our Renaissance Food Group (RFG) subsidiary had signed a definitive agreement to acquire SFFI Company, Inc. doing business as Simply Fresh Fruit (SFFI). In February 2020, we completed our acquisition of SFFI. We paid $18.4 million in cash for 100% of SFFI (net of cash acquired). Founded in 1999 and based in Vernon, Calif., privately held SFFI is a processor and supplier of a broad line of fresh-cut fruit, principally serving the foodservice and hospitality markets. Its focus in those industries is anticipated to be highly complementary to the retail-grocery expertise of Calavo’s RFG business segment and will be included in the RFG segment going forward.

The acquisition was accounted for as a business combination using the acquisition method of accounting. The preliminary allocation of the purchase price is based on management’s analysis, including preliminary work performed by third party valuation specialists as of the acquisition date. We have determined the estimated fair values using Level 3 inputs after review and consideration of relevant information, including the projected cash flows, discount rates, customer attrition rates and other estimates made by management. The purchase price exceeded the estimated fair value of the net identifiable tangible and intangible assets acquired, and the excess was recognized as goodwill. We are in the process of completing the purchase price allocation and expect to have it finalized within the 12-month measurement period.

The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed at the date of acquisition (in thousands):



Current assets (including cash of $623)	$	3,954
Property, plant, and equipment		2,260
Operating lease right-of-use assets		110
Goodwill		10,306
Intangible assets		11,000
Total assets acquired		27,630
Current liabilities		(5,155)
Non-current liabilities		(565)
Deferred taxes		(2,891)
Total liabilities acquired		(8,611)
Net assets acquired	$	19,019

Of the $11.0 million of intangible assets, $9.7 million was assigned to customer relationships with a life of 7 years, and $1.3 million to trade names with a life of 10 years. We incurred $0.3 million in transaction costs related to the acquisition, which is included in selling, general and administrative expenses in our consolidated statements of operations for the year ended October 31, 2020.

Adjustments after the initial close of the acquisition of SFFI are primarily related to the application of ASC 842 (See Note 17 for further detail on accounting for leases). Upon further review of the leases held by SFFI, we recorded $0.8 million related to finance leases in property, plant and equipment, $0.1 million in operating lease right-of-use assets and the related lease liability of $0.9 million. In addition, we recorded $0.5 million of additional goodwill for payments made after the close date.

The financial effect of this acquisition was not material to our statement of operations, and we have not presented pro forma results of operations for the acquisition because it is not significant to our consolidated statements of operations.

COVID-19 Pandemic Impact

12 Months Ended

Oct. 31, 2020

COVID-19 Pandemic Impact

COVID-19 Pandemic Impact

19. COVID-19 Pandemic Impact

On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of a new strain of coronavirus originating in Wuhan, China and the risks to the international community as the virus spreads globally beyond its point of origin. In March 2020, the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally.

The COVID-19 pandemic has created challenging and unprecedented conditions for our business, and we are committed to taking action in support of a Company-wide response to the crisis. The COVID-19 pandemic has negatively impacted the global economy, disrupted global supply chains and created significant volatility and disruption of financial markets. We believe we are well positioned for the future as we continue to navigate the crisis and prepare for an eventual return to a more normal operating environment. We have successfully implemented contingency plans overseen by our management teams in the U.S. and in Mexico to monitor the evolving needs of our businesses in those countries, as well as those related to our Peru partner in consignment avocado sales and our Mexico partners in consignment tomato sales.

The COVID-19 pandemic began to have an adverse impact on our results of operations in the month of March, resulting in cancelled orders, altered customer buying patterns, delays in potential new business opportunities, losses on product unable to be sold, reductions in margins related to lower manufacturing throughput, and changes to integration plans for an acquired entity. The effects of the pandemic were more pronounced in the portions of our business servicing foodservice customers business and to a lesser extent certain segments of our retail business, including behind-the-glass deli and grab-and-go convenience items. While we have managed the pandemic well, with improving results since April and minimal disruption to our overall business thus far, the continuing impact of the pandemic on our future consolidated results of operations, financial position and cash flows are uncertain.

Reserve for FreshRealm Note Receivable and Impairment of Investment

12 Months Ended

Oct. 31, 2020

Reserve for FreshRealm Note Receivable and Impairment of Investment

Reserve for FreshRealm Note Receivable and Impairment of Investment

20. Reserve for FreshRealm Note Receivable and Impairment of Investment

During the third quarter of fiscal 2020, the results of operations of FreshRealm have deteriorated significantly from our expectations from three months prior, with declining sales and continuing losses. FreshRealm will likely require additional capital in order to continue as a going concern. We do not plan to invest or loan any additional capital to FreshRealm. We have performed a valuation analysis of the financial condition and projected operations of FreshRealm under various methods, including liquidation, exit multiple, and perpetual growth approaches, appropriately weighted for the circumstances. In accordance with the foregoing, we have recorded an impairment of 100% of our equity investment of $2.8 million, and we have recorded a reserve for collectability of 100% of our note receivable balance of $34.2 million (which includes accrued interest of $4.1 million), and $0.3 million in trade accounts receivable as of October 31, 2020, which resulted in a loss of $37.3 million, which is included in the accompanying consolidated statement of operations under “Loss on reserve for FreshRealm note receivable and impairment of investment”. As of August 1, 2020, we have discontinued the accrual of interest income on the note receivables. In connection with the foregoing, we recorded a $9.5 million discreet income tax benefit for the third quarter of fiscal 2020.

Schedule II Valuation and Qualifying Accounts

12 Months Ended

Oct. 31, 2020

Valuation and Qualifying Accounts

Schedule II Valuation and Qualifying Accounts

SCHEDULE II

CALAVO GROWERS, INC.

VALUATION AND QUALIFYING ACCOUNTS (in thousands)


	Fiscal year	Balance at			Balance at
	ended	beginning			end
	October 31:	of year	Additions(1)	Deductions(2)	of year

Allowance for customer deductions	2018	1,038	9,079	8,267	1,850
	2019	1,850	12,211	12,107	1,954
	2020	1,954	8,490	8,552	1,892

Allowance for doubtful accounts	2018	1,452	—	75	1,377
	2019	1,377	35	—	1,412
	2020	1,412	194	—	1,606

(1) Charged to net sales (customer deductions) or costs and expenses (doubtful accounts).

(2) Customer deductions taken or write off of accounts receivables.

The above table does not include the reserve for notes receivable from FreshRealm of $34.2 million. See Note 20.

Basis of Presentation and Significant Accounting Policies (Policies)

12 Months Ended

Oct. 31, 2020

Basis of Presentation and Significant Accounting Policies

Business

Consolidated financial statements

Use of Estimates

Reclassification of Prior Year Presentation

Cash and Cash Equivalents

Prepaid Expenses and Other Current Assets

Inventories

Property, Plant, and Equipment

Goodwill and Acquired Intangible Assets

Long-lived Assets

Investments

Marketable Securities

Advances to Suppliers

continuously evaluate the ability of these growers to repay advances in order to evaluate the possible need to record an allowance. No such allowance was required at October 31, 2020 and 2019.

Infrastructure Advances

Accrued Expenses

Revenue Recognition

Sales Incentives and Other Promotional Programs

Principal vs. Agent Considerations

Practical Expedients

The Company elected the following practical expedients upon its adoption of Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers (ASC Topic 606).

●

Contract costs - The Company has elected to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period is one year or less.

The adoption of ASC 606 did not have an impact on our consolidated results of operations.

Customers

Customers

Shipping and Handling

We include shipping and handling fees billed to customers in net revenues. Amounts incurred by us for freight are included in cost of goods sold.

Promotional Allowances

Allowance for Accounts Receivable

Loss on Reserve for FreshRealm Note Receivable and Impairment of Investment

Consignment Arrangements

We frequently enter into consignment arrangements with avocado and tomato growers and packers located outside of the U.S. and growers of certain perishable products in the U.S. Although we generally do not take legal title to these avocados and perishable products, we do assume responsibilities (principally assuming credit risk, inventory loss and delivery risk, and pricing risk) that are consistent with acting as a principal in the transaction. Accordingly, the accompanying financial statements include sales and cost of sales from the sale of avocados and perishable products


	2020		2019		2018

Sales	$	64,922	$	64,510	$	43,490
Cost of Sales		57,554		57,061		38,186
Gross Profit	$	7,368	$	7,449	$	5,304

Advertising Expense

Research and Development

Other Income

Income Taxes

Basic and Diluted Net Income per Share

Basic and Diluted Net Income (loss) per Share

Basic and diluted net income per share is calculated as follows (U.S. dollars in thousands, except per share data):


	Year ended October 31,
	2020		2019		2018
Numerator:
Net income (loss) attributable to Calavo Growers, Inc.	$	(13,625)	$	36,646	$	32,281
Denominator:
Weighted average shares – Basic		17,564		17,519		17,477
Effect of dilutive securities – Restricted stock/options		—		74		91
Weighted average shares – Diluted		17,564		17,593		17,568
Net income (loss) per share attributable to Calavo Growers, Inc:
Basic	$	(0.78)	$	2.09	$	1.85
Diluted	$	(0.78)	$	2.08	$	1.84

Stock-Based Compensation

Foreign Currency Translation and Remeasurement

Fair Value of Financial Instruments

Deferred Rent

the beginning of fiscal 2020, we have adopted the new lease accounting standard and as a result deferred rent is no longer recorded. See Note 17 for further information.

Derivative Financial Instruments

Recently Adopted Accounting Pronouncements

Recently Issued Accounting Standards

Comprehensive Income

Noncontrolling Interest

The following tables reconcile shareholders’ equity attributable to noncontrolling interest related to Avocados de Jalisco (in thousands).


	Year ended		Year ended
Avocados de Jalisco noncontrolling interest	October 31, 2020		October 31, 2019

Noncontrolling interest, beginning	$	1,688	$	1,748
Net loss attributable to noncontrolling interest of Avocados de Jalisco		(216)		(60)
Noncontrolling interest, ending	$	1,472	$	1,688

Basis of Presentation and Significant Accounting Policies (Tables)

12 Months Ended

Oct. 31, 2020

Basis of Presentation and Significant Accounting Policies

Financial Statements of Consignment Arrangements


	2020		2019		2018

Sales	$	64,922	$	64,510	$	43,490
Cost of Sales		57,554		57,061		38,186
Gross Profit	$	7,368	$	7,449	$	5,304

Schedule of basic and diluted net income per share

Basic and diluted net income per share is calculated as follows (U.S. dollars in thousands, except per share data):


	Year ended October 31,
	2020		2019		2018
Numerator:
Net income (loss) attributable to Calavo Growers, Inc.	$	(13,625)	$	36,646	$	32,281
Denominator:
Weighted average shares – Basic		17,564		17,519		17,477
Effect of dilutive securities – Restricted stock/options		—		74		91
Weighted average shares – Diluted		17,564		17,593		17,568
Net income (loss) per share attributable to Calavo Growers, Inc:
Basic	$	(0.78)	$	2.09	$	1.85
Diluted	$	(0.78)	$	2.08	$	1.84

Reconciliation of shareholders' equity attributable to noncontrolling interest

The following tables reconcile shareholders’ equity attributable to noncontrolling interest related to Avocados de Jalisco (in thousands).


	Year ended		Year ended
Avocados de Jalisco noncontrolling interest	October 31, 2020		October 31, 2019

Noncontrolling interest, beginning	$	1,688	$	1,748
Net loss attributable to noncontrolling interest of Avocados de Jalisco		(216)		(60)
Noncontrolling interest, ending	$	1,472	$	1,688

Inventories (Tables)

12 Months Ended

Oct. 31, 2020

Inventories

Schedule of Inventories

Inventories consist of the following (in thousands):


	October 31,		October 31,
	2020		2019

Fresh fruit	$	14,677	$	15,874
Packing supplies and ingredients		12,540		11,370
Finished prepared foods		14,570		9,645
	$	41,787	$	36,889

Property, Plant, and Equipment (Tables)

12 Months Ended

Oct. 31, 2020

Property, Plant, and Equipment

Summary of Property, Plant, and Equipment

Property, plant, and equipment consist of the following (in thousands):


	October 31,
	2020		2019

Land	$	11,008	$	11,008
Buildings and improvements		44,984		45,614
Leasehold improvements		33,047		26,267
Equipment		108,505		99,237
Information systems - hardware and software		11,385		10,822
Construction in progress		5,244		10,351
		214,173		203,299
Less accumulated depreciation and amortization		(83,903)		(71,201)
	$	130,270	$	132,098

Other Assets and Intangibles (Tables)

12 Months Ended

Oct. 31, 2020

Other Assets and Intangibles

Schedule of Other Assets

Other assets consist of the following (in thousands):


	October 31,		October 31,
	2020		2019
Mexican IVA (i.e. value-added) taxes receivable (see note 15)	$	30,126	$	27,592
Infrastructure loan to Agricola Belher and Agricola Don Memo		1,215		1,800
Other		1,217		1,514
	$	32,558	$	30,906

Schedule of Intangible Assets

The intangible assets consist of the following (in thousands):


		October 31, 2020						October 31, 2019
	Weighted-	Gross				Net		Gross				Net
	Average	Carrying		Accum.		Book		Carrying		Accum.		Book
	Useful Life	Value		Amortization		Value		Value		Amortization		Value
Customer list/relationships	7 years	$	17,340	$	(8,613)	$	8,727	$	7,640	$	(7,640)	$	—
Trade names	11 years		4,060		(2,852)		1,208		2,760		(2,760)		—
Trade secrets/recipes	9 years		630		(517)		113		630		(470)		160
Brand name intangibles	indefinite		275		—		275		275		—		275
Intangibles, net		$	22,305	$	(11,982)	$	10,323	$	11,305	$	(10,870)	$	435

Related party transactions (Tables)

12 Months Ended

Oct. 31, 2020

Related party transactions

Schedule of related party transactions


	Year ended October 31,
(in thousands)	2020		2019
Rent paid to LIG	$	—	$	579
Rent paid to THNC, LLC	$	—	$	795

Income Taxes (Tables)

12 Months Ended

Oct. 31, 2020

Income Taxes

Summary of Income Tax Provision

The income tax provision (benefit) consists of the following for the years ended October 31, (in thousands):


	2020		2019		2018

Current:
Federal	$	(5,684)	$	9,146	$	7,115
State		(214)		2,516		1,582
Foreign		645		290		(844)
Total current		(5,253)		11,952		7,853

Deferred:
Federal		575		516		3,328
State		(505)		209		690
Foreign		260		205		848
Total deferred		330		930		4,866
Change in valuation allowance		631		—		—
Total income tax provision (benefit)	$	(4,292)	$	12,882	$	12,719

Significant Components of Deferred Taxes Assets (Liabilities)

Significant components of our deferred taxes assets (liabilities) as of October 31, are as follows (in thousands):


	2020		2019

Property, plant, and equipment		(11,552)		(10,407)
Intangible assets		6,861		11,805
Unrealized gain, Limoneira investment		(116)		(2,352)
Investment in FreshRealm		1,096		(1,513)
Stock-based compensation		812		857
State taxes		(592)		(437)
Credits and incentives		1,345		1,109
Allowance for accounts receivable		1,165		834
Inventories		864		445
Accrued liabilities		2,119		3,423
Operating lease - Right of use assets		(15,732)		—
Operating lease liabilities		16,895		—
Net operating loss		369		—
Valuation allowance		(631)		—
Other		(417)		(317)
Long-term deferred income taxes	$	2,486	$	3,447

Reconciliation of Significant Differences Between Federal Statutory Income Tax Rate and Effective Income Tax Rate

Segment Information (Tables)

12 Months Ended

Oct. 31, 2020

Segment Information

Schedule of segment gross margin

The following table sets forth sales by product category, by segment (in thousands)


	Fresh		Calavo				Interco.
	products		Foods		RFG		Elimins.		Total

	(All amounts are presented in thousands)
Year ended October 31, 2020
Net sales	$	585,052	$	75,220	$	404,723	$	(5,624)	$	1,059,371
Cost of sales		537,489		54,277		383,331		(5,624)		969,473
Gross profit	$	47,563	$	20,943	$	21,392	$	—	$	89,898

Year ended October 31, 2019
Net sales	$	621,183	$	94,734	$	486,063	$	(6,203)	$	1,195,777
Cost of sales		534,600		73,735		465,563		(6,203)		1,067,695
Gross profit	$	86,583	$	20,999	$	20,500	$	—	$	128,082

Year ended October 31, 2018
Net sales	$	553,208	$	91,646	$	448,930	$	(5,026)	$	1,088,758
Cost of sales		498,962		64,221		416,985		(5,026)		975,142
Gross profit	$	54,246	$	27,425	$	31,945	$	—	$	113,616

Schedule of sales by product and segment

The following table sets forth sales by product category, by segment (in thousands):


	Year Ended October 31, 2020								Year Ended October 31, 2019

	Fresh		Calavo						Fresh		Calavo
	products		Foods		RFG		Total		products		Foods		RFG		Total

Avocados	$	521,542	$	—	$	—	$	521,542	$	569,779	$	—	$	—	$	569,779
Tomatoes		53,922		—		—		53,922		40,879		—		—		40,879
Papayas		10,529		—		—		10,529		10,931		—		—		10,931
Other fresh income		327		—		—		327		1,353		—		—		1,353
Prepared avocado products		—		79,382		—		79,382		—		100,842		—		100,842
Salsa		—		2,783		—		2,783		—		3,252		—		3,252
Fresh-cut fruit & veg. and prepared foods		—		—		406,572		406,572		—		—		488,373		488,373
Total gross sales		586,320		82,165		406,572		1,075,057		622,942		104,094		488,373		1,215,409
Less sales incentives		(1,268)		(6,945)		(1,849)		(10,062)		(1,759)		(9,360)		(2,310)		(13,429)
Less inter-company eliminations		(1,651)		(3,973)		—		(5,624)		(2,246)		(3,957)		—		(6,203)
Net sales	$	583,401	$	71,247	$	404,723	$	1,059,371	$	618,937	$	90,777	$	486,063	$	1,195,777


	Year Ended October 31, 2019								Year Ended October 31, 2018

	Fresh		Calavo						Fresh		Calavo
	products		Foods		RFG		Total		products		Foods		RFG		Total

Avocados	$	569,779	$	—	$	—	$	569,779	$	511,730	$	—	$	—	$	511,730
Tomatoes		40,879		—		—		40,879		31,608		—		—		31,608
Papayas		10,931		—		—		10,931		11,699		—		—		11,699
Other fresh income		1,353		—		—		1,353		498		—		—		498
Prepared avocado products		—		100,842		—		100,842		—		99,635		—		99,635
Salsa		—		3,252		—		3,252		—		3,423		—		3,423
Fresh-cut fruit & veg. and prepared foods		—		—		488,373		488,373		—		—		451,203		451,203
Total gross sales		622,942		104,094		488,373		1,215,409		555,535		103,058		451,203		1,109,796
Less sales incentives		(1,759)		(9,360)		(2,310)		(13,429)		(2,327)		(11,412)		(2,273)		(16,012)
Less inter-company eliminations		(2,246)		(3,957)		—		(6,203)		(1,554)		(3,472)		—		(5,026)
Net sales	$	618,937	$	90,777	$	486,063	$	1,195,777	$	551,654	$	88,174	$	448,930	$	1,088,758

Schedule of long-lived assets by geographic areas

Long-lived assets attributed to geographic areas as of October 31, are as follows (in thousands):


	United States		Mexico		Consolidated
2020	$	95,110	$	35,160	$	130,270
2019	$	98,224	$	33,874	$	132,098

Long-Term Obligations (Tables)

12 Months Ended

Oct. 31, 2020

Long-Term Obligations

Schedule of long-term obligations

Long-term obligations at fiscal year ends consist of the following (in thousands):


	2020		2019
Finance leases		7,059		6,174
Less current portion		(1,343)		(762)
	$	5,716	$	5,412

Stock-Based Compensation (Tables)

12 Months Ended

Oct. 31, 2020

Restricted Stock Activity

A summary of restricted stock activity, related to our 2011 Management Incentive Plan, is as follows (in thousands, except for per share amounts):


		Weighted-Average		Aggregate
	Number of Shares	Grant Price		Intrinsic Value
Outstanding at October 31, 2019	69	$	71.74
Vested	(51)	$	70.48
Forfeited	(14)	$	84.54
Granted	72	$	81.19
Outstanding at October 31, 2020	76	$	80.45	$	5,107

2005 Stock Incentive Plan [Member]

Stock Option Activity, Related to Incentive Plan

A summary of stock option activity is as follows (in thousands, except for per share amounts):


		Weighted-Average		Aggregate
	Number of Shares	Exercise Price		Intrinsic Value
Outstanding at October 31, 2019	2	$	19.20
Exercised	(2)	$	19.20
Outstanding at October 31, 2020	—	$	—	$	—
Exercisable at October 31, 2020	—	$	—	$	—

2011 Management Incentive Plan [Member]

Stock Option Activity, Related to Incentive Plan

A summary of stock option activity, related to our 2011 Management Incentive Plan, is as follows (in thousands, except for per share amounts):


		Weighted-Average		Aggregate
		Exercise		Intrinsic
	Number of Shares	Price		Value
Outstanding at October 31, 2019	18	$	41.91
Exercised	(2)	$	23.48
Outstanding at October 31, 2020	16	$	44.21	$	380
Exercisable at October 31, 2020	12	$	45.59	$	269

Fair Value Measurements (Tables)

12 Months Ended

Oct. 31, 2020

Fair Value Measurements

Financial Assets Measured on a Recurring Basis


	Level 1		Level 2		Level 3		Total

	(All amounts are presented in thousands)
Assets at Fair Value at October 31, 2020:
Investment in Limoneira Company⁽¹⁾	$	23,197		-		-	$	23,197
Total assets at fair value	$	23,197		-		-	$	23,197

Assets at Fair Value at October 31, 2019:
Investment in Limoneira Company⁽¹⁾	$	31,734		-		-	$	31,734
Total assets at fair value	$	31,734		-		-	$	31,734

(1)

FreshRealm (Tables)

12 Months Ended

Oct. 31, 2020

FreshRealm

Summarized financial information for FreshRealm

Balance Sheet:


	October 31,		October 31,
	2020		2019

Assets:
Cash and cash equivalents	$	508	$	961
Accounts receivable, net of allowances		716		1,493
Inventories, net		2,725		2,792
Prepaid expenses and other current assets		642		732
Property, plant, and equipment, net		3,368		6,076
Other assets		126		703
	$	8,085	$	12,757

Liabilities and equity:
Current liabilities	$	14,160	$	6,533
Debt to Calavo		34,456		35,241
Long-term liabilities		—		—
Equity		(40,531)		(29,017)
	$	8,085	$	12,757

Statement of Operations:


		Year ended October 31,
	2020		2019		2018

Net sales	$	19,232	$	24,112	$	33,769
Gross loss		(3,022)		(5,783)		(10,868)
Selling, general and administrative		(14,188)		(20,196)		(19,512)
Other		(6,850)		(4,621)		1,023
Net loss	$	(24,060)	$	(30,600)	$	(29,357)

- Definition

Tabular disclosure of the significant judgments and assumptions made in determining whether a variable interest (as defined) held by the entity requires the variable interest entity (VIE) (as defined) to be consolidated and (or) disclose information about its involvement with the VIE, individually or in aggregate (as applicable); the nature of restrictions, if any, on the consolidated VIE's assets and on the settlement of its liabilities reported by an entity in its statement of financial position, including the carrying amounts of such assets and liabilities; the nature of, and changes in, the risks associated with involvement in the VIE; how involvement with the VIE affects the entity's financial position, financial performance, and cash flows; the lack of recourse if creditors (or beneficial interest holders) of the consolidated VIE have no recourse to the general credit of the primary beneficiary (if applicable); the terms of arrangements, giving consideration to both explicit arrangements and implicit variable interests, if any, that could require the entity to provide financial support to the VIE, including events or circumstances that could expose the entity to a loss; the methodology used by the entity for determining whether or not it is the primary beneficiary of the variable interest entity; the significant factors considered and judgments made in determining that the power to direct the activities of a VIE that most significantly impact the VIE's economic performance are shared (as defined); the carrying amounts and classification of assets and liabilities of the VIE included in the statement of financial position; the entity's maximum exposure to loss, if any, as a result of its involvement with the VIE, including how the maximum exposure is determined and significant sources of the entity's exposure to the VIE; a comparison of the carrying amounts of the assets and liabilities and the entity's maximum exposure to loss; information about any liquidity arrangements, guarantees, and (or) other commitments by third parties that may affect the fair value or risk of the entity's variable interest in the VIE; whether or not the entity has provided financial support or other support (explicitly or implicitly) to the VIE that it was not previously contractually required to provide or whether the entity intends to provide that support, including the type and amount of the support and the primary reasons for providing the support; and supplemental information the entity determines necessary to provide.

+ References + Details

Leases (Tables)

12 Months Ended

Oct. 31, 2020

Leases

Schedule of lease-related assets and liabilities and cost

The following table presents the lease-related assets and liabilities recorded on the balance sheet as of October 31, 2020 (in thousands):


		October 31,
		2020

Assets
Non-current assets:
Operating lease assets	Operating lease right-of-use assets	$	60,262
Finance lease assets	Property, plant and equipment, net		6,830
		$	67,092
Liabilities
Current liabilities:
Operating	Current portion of operating leases	$	6,443
Finance	Current portion of long-term debt and finance leases		1,343
Long-term obligations
Operating	Long-term operating leases, less current portion		58,273
Finance	Long-term debt and finance leases, less current portion		5,716
		$	71,775


Weighted-average remaining lease term:
Operating leases	10.0 years
Finance leases	7.9 years

Weighted-average discount rate:
Operating leases	2.83	%
Finance leases	3.28	%

Lease Costs

The following table presents certain information related to the lease costs for finance and operating leases for the year ended October 31, 2020 (in thousands):


	Year ended
	October 31, 2020
Amortization of financing lease assets	$	1,043
Operating lease cost		8,271
Short-term lease cost		996
Variable lease cost		2,865
Interest on financing lease liabilities		235
Total lease cost	$	13,410

Other Information

The following table presents supplemental cash flow information related to the leases for the year ended October 31, 2020 (in thousands):


	Year ended
Cash paid for amounts included in the measurement of lease liabilities	October 31, 2020
Operating cash flows for operating leases	$	7,689
Financing cash flows for finance leases		1,115
Operating cash flows for finance leases		235

Schedule of undiscounted cash flows of operating lease


	Operating		Finance
	Leases		Leases
2021	$	8,171	$	1,551
2022		7,986		1,416
2023		7,922		1,301
2024		7,572		765
2025		6,748		371
Thereafter		36,478		2,788
Total lease payments		74,877		8,192
Less: imputed interest		10,161		1,133
Total lease liability	$	64,716	$	7,059

Schedule of undiscounted cash flows of finance lease


	Operating		Finance
	Leases		Leases
2021	$	8,171	$	1,551
2022		7,986		1,416
2023		7,922		1,301
2024		7,572		765
2025		6,748		371
Thereafter		36,478		2,788
Total lease payments		74,877		8,192
Less: imputed interest		10,161		1,133
Total lease liability	$	64,716	$	7,059

Minimum Cash Payments Under Non-Cancelable Operating Leases

Prior to the adoption of ASC 842, as of October 31, 2019, we were committed to make minimum cash payments under these agreements, as follows (in thousands):


2020	$	9,534
2021		9,007
2022		8,672
2023		8,603
2024		8,203
Thereafter		50,796
	$	94,815

Schedule of Capital Lease Payments

Prior to the adoption of ASC 842, as of October 31, 2019, capital lease payments are scheduled as follows (in thousands):


	Total
Year ending October 31:
2020	$	907
2021		915
2022		908
2023		900
2024		548
Thereafter		3,162
Minimum lease payments		7,340
Less interest		(1,166)
Present value of future minimum lease payments	$	6,174

Acquisition of Simply Fresh Fruit (Tables)

12 Months Ended

Oct. 31, 2020

Acquisition of Simply Fresh Fruit

Schedule of net assets acquired



Current assets (including cash of $623)	$	3,954
Property, plant, and equipment		2,260
Operating lease right-of-use assets		110
Goodwill		10,306
Intangible assets		11,000
Total assets acquired		27,630
Current liabilities		(5,155)
Non-current liabilities		(565)
Deferred taxes		(2,891)
Total liabilities acquired		(8,611)
Net assets acquired	$	19,019

Description of the business (Details)	12 Months Ended
Description of the business (Details)	Oct. 31, 2020 segment
Description of the business
Number of reportable segments	3

Basis of Presentation and Significant Accounting Policies - Presentation (Details)	Oct. 31, 2020
Avocados de Jalisco \| Avocados de Jalisco
Significant Accounting Policies [Line Items]
Subsidiary ownership (as a percent)	83.00%

Basis of Presentation and Significant Accounting Policies - Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Millions	Oct. 31, 2020	Oct. 31, 2019
Basis of Presentation and Significant Accounting Policies
Non-trade receivables	$ 5.7	$ 5.3
Mexican IVA	1.5	1.9
Prepaid expenses	$ 4.2	$ 3.4

Basis of Presentation and Significant Accounting Policies - Property, Plant, and Equipment (Details)	12 Months Ended
	Oct. 31, 2020
Minimum \| Buildings and improvements
Significant Accounting Policies [Line Items]
Property, Plant and Equipment, Useful Life	7 years
Minimum \| Leasehold improvements [Member]
Significant Accounting Policies [Line Items]
Property, Plant and Equipment, Useful Life	7 years
Minimum \| Equipment
Significant Accounting Policies [Line Items]
Property, Plant and Equipment, Useful Life	7 years
Minimum \| Information systems - hardware and software [Member]
Significant Accounting Policies [Line Items]
Property, Plant and Equipment, Useful Life	3 years
Maximum \| Buildings and improvements
Significant Accounting Policies [Line Items]
Property, Plant and Equipment, Useful Life	50 years
Maximum \| Equipment
Significant Accounting Policies [Line Items]
Property, Plant and Equipment, Useful Life	25 years
Maximum \| Information systems - hardware and software [Member]
Significant Accounting Policies [Line Items]
Property, Plant and Equipment, Useful Life	10 years

Basis of Presentation and Significant Accounting Policies - Goodwill and Acquired Intangible Assets (Details) - USD ($) $ in Millions	12 Months Ended
	Oct. 31, 2020	Oct. 31, 2019	Oct. 31, 2018
Basis of Presentation and Significant Accounting Policies
Goodwill impairment loss	$ 0.0	$ 0.0	$ 0.0
Impairment of long-lived assets	$ 0.0	$ 0.0

Basis of Presentation and Significant Accounting Policies - Investments (Details) $ in Thousands, $ in Millions				1 Months Ended		3 Months Ended	12 Months Ended
	May 15, 2020 USD ($)	Apr. 01, 2020 USD ($)	Feb. 03, 2020	Sep. 30, 2018 USD ($)	Jul. 31, 2015 USD ($)	Jul. 31, 2020 USD ($)	Oct. 31, 2020 MXN ($)	Oct. 31, 2018 USD ($)	Oct. 31, 2020 USD ($)	Oct. 31, 2019 USD ($)
Significant Accounting Policies [Line Items]
Investments in unconsolidated entities									$ 6,065	$ 10,722
Don Memo \| Belo
Significant Accounting Policies [Line Items]
Ownership interest					50.00%
FreshRealm
Significant Accounting Policies [Line Items]
Payment to acquire unconsolidated entities		$ 500
Impair investment in FreshRealm						$ 2,800	$ 2.8
Investments in unconsolidated entities										5,800
Subscription agreements issued to third-party investors	$ 4,000	$ 4,000
VIE ownership (as a percent)		37.00%	37.00%				37.00%
Don Memo
Significant Accounting Policies [Line Items]
Ownership interest					50.00%				50.00%
Payment to acquire unconsolidated entities				$ 100	$ 2,000			$ 100
Investments in unconsolidated entities								$ 4,900	$ 6,100	$ 4,900

Basis of Presentation and Significant Accounting Policies - Marketable Securities (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Oct. 31, 2020	Oct. 31, 2019	Oct. 31, 2018
Significant Accounting Policies [Line Items]
Unrealized and realized net loss on Limoneira shares	$ (8,537)	$ (9,722)
Limoneira
Significant Accounting Policies [Line Items]
Limoneira's stock price	$ 13.83	$ 18.92	$ 24.65
Limoneira
Significant Accounting Policies [Line Items]
Number of securities sold		51,271
Loss on sale of investments		$ 100
Investment shares held (in shares)	1,677,299
Unrealized and realized net loss on Limoneira shares	$ (8,500)	$ (9,600)
Limoneira \| Maximum
Significant Accounting Policies [Line Items]
Non-equity method investment ownership (as a percent)	10.00%

Basis of Presentation and Significant Accounting Policies - Advances to Suppliers (Details) - USD ($) $ in Thousands	12 Months Ended
	Oct. 31, 2020	Oct. 31, 2019	Oct. 31, 2018
Significant Accounting Policies [Line Items]
Allowance To Advance Given To Supplier	$ 0	$ 0
Increase (decrease) in advances to suppliers	(3,077)	983	$ 1,009
Advances to suppliers	5,061	7,338
Don Memo
Significant Accounting Policies [Line Items]
Advances to suppliers	2,400	3,700	2,400
Agricola Belher
Significant Accounting Policies [Line Items]
Increase (decrease) in advances to suppliers	4,500	4,500
Advances to suppliers	$ 4,500	$ 4,500	$ 4,000

Basis of Presentation and Significant Accounting Policies - Infrastructure Advances (Details) - USD ($) $ in Thousands	1 Months Ended			12 Months Ended
	Oct. 31, 2020	Aug. 31, 2020	Aug. 31, 2018	Oct. 31, 2019	Oct. 31, 2018	Jul. 31, 2018
Significant Accounting Policies [Line Items]
Amount loaned				$ 23,800	$ 11,500
Infrastructure loan noncurrent	$ 1,215			1,800
Agricola Belher
Significant Accounting Policies [Line Items]
Loan receivable fixed interest rate (as a percent)		7.25%
Amount loaned			$ 3,000
Infrastructure advance	1,800		3,000	2,600	$ 3,400
Annual repayment of advances		$ 900	$ 600
Repayment term		2 years
Agricola Belher \| Prepaid expenses and other current assets
Significant Accounting Policies [Line Items]
Infrastructure advance, current	900			800
Agricola Belher \| Other long-term assets
Significant Accounting Policies [Line Items]
Infrastructure loan noncurrent	900			$ 1,800
Agricola Belher \| LIBOR
Significant Accounting Policies [Line Items]
Advances variable interest rate (as a percent)			10.00%			3.00%
Don Memo
Significant Accounting Policies [Line Items]
Payment amount	$ 2,400
Loan receivable fixed interest rate (as a percent)	7.25%
Amount loaned	$ 700
Remaining amount	1,700
Infrastructure advance	700
Don Memo \| Prepaid expenses and other current assets
Significant Accounting Policies [Line Items]
Infrastructure advance, current	400
Don Memo \| Other long-term assets
Significant Accounting Policies [Line Items]
Infrastructure loan noncurrent	$ 300

Basis of Presentation and Significant Accounting Policies - Accrued Expenses (Details) - USD ($) $ in Millions	Oct. 31, 2020	Oct. 31, 2019
Basis of Presentation and Significant Accounting Policies
Accrued liabilities related to goods and services	$ 26.4	$ 18.7

Basis of Presentation and Significant Accounting Policies - Revenue and Receivables (Details) $ in Thousands	12 Months Ended
	Oct. 31, 2020 USD ($) customer	Oct. 31, 2019 USD ($)	Oct. 31, 2018
Significant Accounting Policies [Line Items]
Revenue, Practical Expedient, Initial Application and Transition, Completed Contract, Use of Transaction Price at Contract Completion Date [true false]	true
Revenue, Practical Expedient, Incremental Cost of Obtaining Contract [true false]	true
Number of Customers Accounted for More Than 10% \| customer	0
Allowances of accounts receivable	$ 3,498	$ 3,366
Notes receivable from FreshRealm		35,241
FreshRealm
Significant Accounting Policies [Line Items]
Notes receivable from FreshRealm	$ 34,500	$ 35,200
Customer concentration [Member] \| Sales revenue [Member]
Significant Accounting Policies [Line Items]
Number of Customers \| customer	10
Concentration risk (as a percent)	56.00%	59.00%	59.00%
Kroger [Member] \| Customer concentration [Member] \| Sales revenue [Member]
Significant Accounting Policies [Line Items]
Concentration risk (as a percent)	18.00%	21.00%	20.00%
Walmart [Member] \| Customer concentration [Member] \| Sales revenue [Member]
Significant Accounting Policies [Line Items]
Concentration risk (as a percent)	12.00%	13.00%	10.00%

Basis of Presentation and Significant Accounting Policies - Consignments Arrangements (Details) - USD ($) $ in Thousands	12 Months Ended
	Oct. 31, 2020	Oct. 31, 2019	Oct. 31, 2018
Sales	$ 1,059,371	$ 1,195,777	$ 1,088,758
Cost of sales	969,473	1,067,695	975,142
Gross profit	89,898	128,082	113,616
Consignment Arrangements [Member]
Sales	64,922	64,510	43,490
Cost of sales	57,554	57,061	38,186
Gross profit	$ 7,368	$ 7,449	$ 5,304

- Definition

Aggregate revenue less cost of goods and services sold or operating expenses directly attributable to the revenue generation activity.

+ References

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+ Details

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

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+ Details

Basis of Presentation and Significant Accounting Policies - Advertising Expense (Details) - USD ($) $ in Millions	12 Months Ended
	Oct. 31, 2020	Oct. 31, 2019	Oct. 31, 2018
Basis of Presentation and Significant Accounting Policies
Advertising costs	$ 0.4	$ 0.3	$ 0.2

Basis of Presentation and Significant Accounting Policies - Research and Development and Other Income (Details) - USD ($) $ in Millions	12 Months Ended
	Oct. 31, 2020	Oct. 31, 2019	Oct. 31, 2018
Significant Accounting Policies [Line Items]
Research and development costs	$ 0.7
Investment Income, Dividend	$ 0.6	$ 0.6	$ 0.6
Maximum
Significant Accounting Policies [Line Items]
Research and development costs		$ 0.1	$ 0.1

Basis of Presentation and Significant Accounting Policies - Income per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	Oct. 31, 2020	Oct. 31, 2019	Oct. 31, 2018
Basis of Presentation and Significant Accounting Policies
Net income (loss) attributable to Calavo Growers, Inc.	$ (13,625)	$ 36,646	$ 32,281
Weighted average shares - Basic	17,564	17,519	17,477
Effect of dilutive securities - Restricted stock/options		74	91
Weighted average shares - Diluted	17,564	17,593	17,568
Basic	$ (0.78)	$ 2.09	$ 1.85
Diluted	$ (0.78)	$ 2.08	$ 1.84

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

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- Definition

The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

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- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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+ Details

Basis of Presentation and Significant Accounting Policies - Stock-Based Compensation (Details) - USD ($) $ in Thousands	12 Months Ended
	Oct. 31, 2020	Oct. 31, 2019	Oct. 31, 2018
Basis of Presentation and Significant Accounting Policies
Stock-based compensation expense	$ 4,500	$ 3,600	$ 4,600

Basis of Presentation and Significant Accounting Policies - Foreign Currency Translation and Remeasurement (Details) - USD ($) $ in Millions	12 Months Ended
	Oct. 31, 2020	Oct. 31, 2019	Oct. 31, 2018
Basis of Presentation and Significant Accounting Policies
Foreign currency gains (losses)	$ 1.0	$ 0.3	$ 0.8
Fixed rate long term obligation fair value	$ 7.1	$ 6.2

Basis of Presentation and Significant Accounting Policies - Comprehensive Income (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Oct. 31, 2020	Oct. 31, 2019	Oct. 31, 2018	Nov. 01, 2018
Significant Accounting Policies [Line Items]
Unrealized Gain (Loss) on Investments			$ 2,247
Retained earnings	$ 89,512	$ 122,557
Unrealized and realized net loss on Limoneira shares	$ (8,537)	$ (9,722)
Limoneira
Significant Accounting Policies [Line Items]
Limoneira's stock price	$ 13.83	$ 18.92	$ 24.65
Limoneira
Significant Accounting Policies [Line Items]
Unrealized Gain (Loss) on Investments			$ 1,700
Number of securities sold		51,271
Loss on sale of investments		$ 100
Investment shares held (in shares)	1,677,299
Unrealized and realized net loss on Limoneira shares	$ (8,500)	$ (9,600)
Limoneira \| Cumulative effect adjustment
Significant Accounting Policies [Line Items]
Retained earnings				$ 12,100

Basis of Presentation and Significant Accounting Policies - Noncontrolling Interest (Details) - USD ($) $ in Thousands	12 Months Ended
	Oct. 31, 2020	Oct. 31, 2019	Oct. 31, 2018
Noncontrolling Interest [Line Items]
Noncontrolling interest, beginning	$ 1,688
Less: Net loss attributable to noncontrolling interest	216	$ 60	$ 269
Noncontrolling interest, ending	1,472	1,688
Avocados de Jalisco
Noncontrolling Interest [Line Items]
Noncontrolling interest, beginning	1,688	1,748
Less: Net loss attributable to noncontrolling interest	(216)	(60)
Noncontrolling interest, ending	$ 1,472	$ 1,688	$ 1,748

- Definition

Total of all stockholders' equity (deficit) items, net of receivables from officers, directors, owners, and affiliates of the entity which is directly or indirectly attributable to that ownership interest in subsidiary equity which is not attributable to the parent (that is, noncontrolling interest, previously referred to as minority interest).

+ References + Details

Inventories (Details) - USD ($) $ in Thousands	Oct. 31, 2020	Oct. 31, 2019
Inventories
Fresh fruit	$ 14,677	$ 15,874
Packing supplies and ingredients	12,540	11,370
Finished prepared foods	14,570	9,645
Total inventories	$ 41,787	$ 36,889

Property, Plant, and Equipment - Summary (Details) - USD ($) $ in Thousands	12 Months Ended
	Oct. 31, 2020	Oct. 31, 2019	Oct. 31, 2018
Property, Plant and Equipment
Property plant and equipment, Gross	$ 214,173	$ 203,299
Less accumulated depreciation and amortization	(83,903)	(71,201)
Total property, plant, and equipment, net	130,270	132,098
Depreciation expense	13,900	13,000	$ 11,900
Amortization of financing lease assets	1,043
Land [Member]
Property, Plant and Equipment
Property plant and equipment, Gross	11,008	11,008
Buildings and improvements
Property, Plant and Equipment
Property plant and equipment, Gross	44,984	45,614
Leasehold improvements [Member]
Property, Plant and Equipment
Property plant and equipment, Gross	33,047	26,267
Equipment
Property, Plant and Equipment
Property plant and equipment, Gross	108,505	99,237
Information systems - hardware and software [Member]
Property, Plant and Equipment
Property plant and equipment, Gross	11,385	10,822
Construction in progress [Member]
Property, Plant and Equipment
Property plant and equipment, Gross	$ 5,244	$ 10,351

Other Assets and Intangibles - Other Assets (Details) - USD ($) $ in Thousands	Oct. 31, 2020	Oct. 31, 2019
Statement of Financial Position [Abstract]
Mexican IVA (i.e. value-added) taxes receivable	$ 30,126	$ 27,592
Infrastructure loan to Agricola Belher and Agricola Don Memo	1,215	1,800
Other	1,217	1,514
Other assets	$ 32,558	$ 30,906

Other Assets and Intangibles - Intangible Assets (Details) - USD ($) $ in Thousands	12 Months Ended
	Oct. 31, 2020	Oct. 31, 2019
Finite-Lived Intangible Assets
Accum. Amortization	$ (11,982)	$ (10,870)
Intangibles, net	10,323	435
Finite and indefinite lived intangible assets gross	22,305	11,305
Brand name intangibles [Member]
Finite-Lived Intangible Assets
Gross carrying value and net book value	$ 275	275
Customer list/relationships [Member]
Finite-Lived Intangible Assets
Weighted-Average Useful Life	7 years
Gross Carrying Value	$ 17,340	7,640
Accum. Amortization	(8,613)	(7,640)
Net Book Value	$ 8,727
Trade names [Member]
Finite-Lived Intangible Assets
Weighted-Average Useful Life	11 years
Gross Carrying Value	$ 4,060	2,760
Accum. Amortization	(2,852)	(2,760)
Net Book Value	1,208
Trade secrets/recipes [Member]
Finite-Lived Intangible Assets
Gross Carrying Value	630	630
Accum. Amortization	(517)	(470)
Net Book Value	$ 113	$ 160

Other Assets and Intangibles - Amortization (Details) - USD ($) $ in Millions	12 Months Ended
	Oct. 31, 2020	Oct. 31, 2019	Oct. 31, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense	$ 1.1	$ 0.7	$ 1.1
Amortization expense for 2021	1.6
Amortization expense for 2022	1.6
Amortization expense for 2023	1.5
Amortization expense for 2024	1.5
Amortization expense thereafter	$ 4.1

Revolving Credit Facilities (Details) - Revolving Credit Facility - USD ($) $ in Millions	1 Months Ended
	Jun. 30, 2016	Oct. 31, 2020	Oct. 31, 2019
Debt Instrument [Line Items]
Credit agreement term	5 years
Credit available under borrowing agreement	$ 80.0
Average interest rate		1.90%	3.80%
Line of credit facility outstanding		$ 20.6	$ 0.0
Line of credit facility, unused capacity, commitment fee percentage	0.15%
Additional borrowing capacity	$ 50.0
Minimum
Debt Instrument [Line Items]
Quarterly consolidated leverage ratio	1.15%
Maximum
Debt Instrument [Line Items]
Quarterly consolidated leverage ratio	2.50%
LIBOR \| Minimum
Debt Instrument [Line Items]
Applicable margin (as a percent)	1.00%
LIBOR \| Maximum
Debt Instrument [Line Items]
Applicable margin (as a percent)	1.50%
Base Rate \| Minimum
Debt Instrument [Line Items]
Applicable margin (as a percent)	0.00%
Base Rate \| Maximum
Debt Instrument [Line Items]
Applicable margin (as a percent)	0.50%

Commitments and Contingencies - New Leases (Details) - USD ($) $ in Thousands	Oct. 31, 2020	Oct. 31, 2019	Jul. 31, 2019	Apr. 30, 2019
Long-term Purchase Commitment [Line Items]
Finance lease asset	$ 6,830
Finance lease liability	7,059	$ 6,174
Finance lease liability, current	1,343	$ 762
Lease obligations relating to property, plant and equipment	$ 8,192
Temecula, California Packinghouse
Long-term Purchase Commitment [Line Items]
Portion retained by the entity (as a percent)				33.00%
Finance lease asset				$ 3,200
Finance lease liability				3,200
Finance lease liability, current				100
Temecula, California Packinghouse \| Disposal, by Sale
Long-term Purchase Commitment [Line Items]
Consideration for sale				$ 7,100
Conley, GA
Long-term Purchase Commitment [Line Items]
Finance lease asset			$ 2,800
Finance lease liability			$ 2,800
Finance lease term			10 years
Conley, GA \| Buildings and improvements
Long-term Purchase Commitment [Line Items]
Finance lease liability, current			$ 900
Conley, GA \| Equipment
Long-term Purchase Commitment [Line Items]
Finance lease liability, current			$ 600

Commitments and Contingencies - Narrative (Details) $ in Millions, $ in Millions	1 Months Ended		12 Months Ended
	Apr. 30, 2019 MXN ($)	Jul. 31, 2018 MXN ($)	Oct. 31, 2020 USD ($)
Indemnification Agreement
Commitments And Contingencies [Line Items]
Accrued liabilities			$ 0.0
Mexican Tax Authority [Member] \| Tax Assessment 2011 [Member]
Commitments And Contingencies [Line Items]
Tax assessment	$ 2,200		103.5
Mexican Tax Authority [Member] \| Tax Assessment 2013 [Member]
Commitments And Contingencies [Line Items]
Tax assessment		$ 2,600	122.4
Employee's Profit Sharing Liability		$ 118	$ 5.6

Related party transactions (Details) - USD ($) $ in Thousands	1 Months Ended					12 Months Ended
	Aug. 31, 2020	Sep. 30, 2018	Aug. 31, 2018	Jan. 31, 2018	Jul. 31, 2015	Oct. 31, 2020	Oct. 31, 2019	Oct. 31, 2018	Jul. 31, 2018	Jan. 31, 2016
Related Party Transaction [Line Items]
Dividend income from Limoneira						$ 600	$ 600	$ 600
Investments in unconsolidated entities						6,065	10,722
Amount loaned							23,800	11,500
Infrastructure loan noncurrent						1,215	1,800
Advances to suppliers						5,061	7,338
Don Memo
Related Party Transaction [Line Items]
Debt amount										$ 4,500
Limoneira
Related Party Transaction [Line Items]
Dividend income from Limoneira						500	500	400
Rent paid						$ 300	300	300
Limoneira \| Maximum
Related Party Transaction [Line Items]
Non-equity method investment ownership (as a percent)						10.00%
Don Memo
Related Party Transaction [Line Items]
Purchases from related parties						$ 15,800	14,100	11,100
Due to Related Parties						1,800	900	1,000
Investments in unconsolidated entities						$ 6,100	4,900	4,900
Ownership interest					50.00%	50.00%
Payment to acquire unconsolidated entities		$ 100			$ 2,000			100
Payment amount		200
Amount loaned		$ 100
Advances to suppliers						$ 2,400	3,700	2,400
Director
Related Party Transaction [Line Items]
Purchases from related parties						18,000	11,900	11,200
TroyGould PC
Related Party Transaction [Line Items]
Legal fees						400	400	200
Agricola Belher
Related Party Transaction [Line Items]
Purchases from related parties						26,900	19,500	14,100
Loan receivable fixed interest rate (as a percent)	7.25%
Amount loaned			$ 3,000
Infrastructure advance			3,000			1,800	2,600	3,400
Advances to suppliers						4,500	4,500	4,000
Annual repayment of advances	$ 900		$ 600
Repayment term	2 years
Agricola Belher \| LIBOR
Related Party Transaction [Line Items]
Advances variable interest rate (as a percent)			10.00%						3.00%
Agricola Belher \| Prepaid expenses and other current assets
Related Party Transaction [Line Items]
Infrastructure advance, current						900	800
Agricola Belher \| Other long-term assets
Related Party Transaction [Line Items]
Infrastructure loan noncurrent						900	1,800
Avocados de Jalisco
Related Party Transaction [Line Items]
Purchases from related parties						$ 8,300	2,500	$ 1,800
Noncash transfer of noncontrolling interest				$ 1,000
Avocados de Jalisco \| Avocados de Jalisco
Related Party Transaction [Line Items]
Subsidiary ownership (as a percent)						83.00%
LIG
Related Party Transaction [Line Items]
Rent paid							579
THNC
Related Party Transaction [Line Items]
Rent paid							$ 795

Related party transactions - FreshRealm (Details) $ in Thousands, $ in Millions					1 Months Ended					3 Months Ended							12 Months Ended
	May 15, 2020 USD ($)	Apr. 01, 2020 USD ($) item	Feb. 03, 2020	Jul. 31, 2018 USD ($)	Oct. 31, 2020 USD ($)	Apr. 30, 2020 USD ($)	Oct. 31, 2019 USD ($) director	Apr. 30, 2019 USD ($) item	Jan. 31, 2018 USD ($) director	Jul. 31, 2020 USD ($)	Oct. 31, 2019 USD ($)	Jul. 31, 2019 USD ($)	Apr. 30, 2019 USD ($)	Jan. 31, 2019 USD ($)	Oct. 31, 2018 USD ($)	Apr. 30, 2018 USD ($) director	Oct. 31, 2020 USD ($) director item	Oct. 31, 2020 MXN ($) director item	Oct. 31, 2019 USD ($)	Oct. 31, 2018 USD ($)	Oct. 31, 2020 MXN ($)	Mar. 31, 2020	Nov. 25, 2019 USD ($)
Related party
Investments in unconsolidated entities					$ 6,065		$ 10,722				$ 10,722						$ 6,065		$ 10,722
Amount loaned																			23,800	$ 11,500
Notes receivable from FreshRealm							35,241				35,241								35,241
Notes receivable from FreshRealm converted to investment in FreshRealm																	2,761
Accounts receivable					63,668		63,423				63,423						$ 63,668		63,423
Number of officers \| item																	1	1
Number of board of directors \| director																	5	5
Former Chairman and Chief Executive Officer
Related party
Payment to acquire unconsolidated entities							500
FreshRealm
Related party
Investments in unconsolidated entities							5,800				5,800								5,800
Impair investment in FreshRealm										$ 2,800								$ 2.8
VIE ownership (as a percent)		37.00%	37.00%														37.00%	37.00%
Amount loaned											3,700	$ 5,400	$ 4,200
Notes receivable from FreshRealm					34,500		35,200				35,200						$ 34,500		35,200
Note receivable, excluding accrued interest					32,800												32,800
Convertible note receivable																							$ 2,700
Loan receivable fixed interest rate (as a percent)		3.00%																				10.00%	10.00%
Notes receivable from FreshRealm converted to investment in FreshRealm		$ 1,000
Subscription agreements issued by investment	$ 4,000	4,000
Payment to acquire unconsolidated entities		$ 500
Number of extension option \| item		2
Extension period		1 year
Loan write-off										34,200							34,200	$ 34.2
Interest receivable										4,100											$ 4.1
Accounts receivable					716		1,493			300	$ 1,493						716		1,493		$ 0.3
Total impairment										37,300								37.3
Discreet tax benefit										$ (9,500)								$ (9.5)
Revenue from related parties																	400		200	300
FreshRealm \| Non Executive Directors
Related party
Payment to acquire unconsolidated entities						$ 100	$ 200	$ 400	$ 1,800							$ 1,200
Number of officers \| item								2
Number of board of directors \| director							1		1							2
FreshRealm \| RFG
Related party
Revenue from related parties																	$ 300		$ 2,000	$ 9,900
FreshRealm \| NMUPA
Related party
Loan receivable commitment				$ 12,000
Amount loaned														$ 3,000	$ 9,000
FreshRealm \| $7.5 million Note
Related party
Amount loaned														$ 7,500
Don Memo
Related party
Amount loaned					$ 700
Loan receivable fixed interest rate (as a percent)					7.25%												7.25%				7.25%

Income Taxes - Tax Provision (Benefit) (Details) - USD ($) $ in Thousands	12 Months Ended
	Oct. 31, 2020	Oct. 31, 2019	Oct. 31, 2018	Mar. 27, 2020
Income Taxes
CARES Act taxes receivable				$ 1,100
Current:
Federal	$ (5,684)	$ 9,146	$ 7,115
State	(214)	2,516	1,582
Foreign	645	290	(844)
Total current	(5,253)	11,952	7,853
Deferred:
Federal	575	516	3,328
State	(505)	209	690
Foreign	260	205	848
Total deferred	330	930	4,866
Change in valuation allowance	631
Total income tax provision	$ (4,292)	$ 12,882	$ 12,719

Income Taxes - Deferred Taxes Assets (Liabilities) (Details) - USD ($) $ in Thousands	Oct. 31, 2020	Oct. 31, 2019
Income Taxes
Gross deferred tax assets	$ 31,500	$ 18,500
Gross deferred tax liabilities	28,400	15,000
Property, plant, and equipment	(11,552)	(10,407)
Intangible assets	6,861	11,805
Unrealized gain, Limoneira investment	(116)	(2,352)
Investment in FreshRealm, deferred asset	1,096
Investment in FreshRealm, deferred liability		(1,513)
Stock-based compensation	812	857
State taxes	(592)	(437)
Credits and incentives	1,345	1,109
Allowance for accounts receivable	1,165	834
Inventories	864	445
Accrued liabilities	2,119	3,423
Operating lease - Right of use assets	(15,732)
Operating lease liabilities	16,895
Net operating loss	369
Valuation allowance	(631)
Other	(417)	(317)
Long-term deferred income taxes	2,486	$ 3,447
net operating losses carryback	8,000
Operating loss carryforwards	$ 7,200

Income Taxes - Rate reconciliation (Details) - USD ($) $ in Millions	12 Months Ended
	Oct. 31, 2020	Oct. 31, 2019	Dec. 31, 2018	Oct. 31, 2018
Income Taxes
Federal statutory tax rate	21.00%	21.00%		23.30%
State taxes, net of federal effects	4.40%	3.70%		3.60%
NOL carryback - CARES Act	6.20%
Foreign income taxes greater than U.S.	(2.30%)	0.40%		0.70%
Revaluation of deferred taxes				4.50%
Section 199 deduction				(1.90%)
Provision to return	(2.50%)	0.70%		(1.20%)
Transition Tax				0.60%
State rate change	(0.10%)	(0.20%)		0.20%
Valuation allowance	(2.70%)
Other	(0.30%)	0.40%		(1.40%)
Effective Income Tax Rate, Total	23.70%	26.00%		28.40%
Domestic operations income (loss) before taxes	$ (18.9)	$ 47.9	$ 45.8
Foreign operations income (loss) before taxes	$ 0.8	1.6	$ (1.1)
Unrecognized tax benefits		$ 0.1

Segment Information - Gross Profit (Detail) $ in Thousands	12 Months Ended
Segment Information - Gross Profit (Detail) $ in Thousands	Oct. 31, 2020 USD ($) segment	Oct. 31, 2019 USD ($)	Oct. 31, 2018 USD ($)
Segment reporting information
Number of reportable segments \| segment	3
Net sales	$ 1,059,371	$ 1,195,777	$ 1,088,758
Cost of sales	969,473	1,067,695	975,142
Gross profit	89,898	128,082	113,616
Elimination between Fresh products and RFG
Segment reporting information
Sales and Cost of Sales Eliminated	1,700	1,800	1,600
Elimination between Calavo Foods and RFG
Segment reporting information
Sales and Cost of Sales Eliminated	4,000	4,000	3,500
Operating segments \| Fresh products
Segment reporting information
Net sales	585,052	621,183	553,208
Cost of sales	537,489	534,600	498,962
Gross profit	47,563	86,583	54,246
Operating segments \| Calavo Foods
Segment reporting information
Net sales	75,220	94,734	91,646
Cost of sales	54,277	73,735	64,221
Gross profit	20,943	20,999	27,425
Operating segments \| RFG
Segment reporting information
Net sales	404,723	486,063	448,930
Cost of sales	383,331	465,563	416,985
Gross profit	21,392	20,500	31,945
Intercompany Eliminations
Segment reporting information
Net sales	(5,624)	(6,203)	(5,026)
Cost of sales	$ (5,624)	$ (6,203)	$ (5,026)

Segment Information - Sales by Product (Details) - USD ($) $ in Thousands	12 Months Ended
	Oct. 31, 2020	Oct. 31, 2019	Oct. 31, 2018
Segment reporting information
Total gross sales	$ 1,075,057	$ 1,215,409	$ 1,109,796
Less sales incentives	(10,062)	(13,429)	(16,012)
Net sales	1,059,371	1,195,777	1,088,758
Avocados [Member]
Segment reporting information
Total gross sales	521,542	569,779	511,730
Tomatoes [Member]
Segment reporting information
Total gross sales	53,922	40,879	31,608
Papayas [Member]
Segment reporting information
Total gross sales	10,529	10,931	11,699
Other fresh products [Member]
Segment reporting information
Total gross sales	327	1,353	498
Prepared avocado products [Member]
Segment reporting information
Total gross sales	79,382	100,842	99,635
Salsa [Member]
Segment reporting information
Total gross sales	2,783	3,252	3,423
Fresh-cut fruit & veg. and prepared foods [Member]
Segment reporting information
Total gross sales	406,572	488,373	451,203
Fresh products
Segment reporting information
Total gross sales	586,320	622,942	555,535
Less sales incentives	(1,268)	(1,759)	(2,327)
Net sales	583,401	618,937	551,654
Fresh products \| Avocados [Member]
Segment reporting information
Total gross sales	521,542	569,779	511,730
Fresh products \| Tomatoes [Member]
Segment reporting information
Total gross sales	53,922	40,879	31,608
Fresh products \| Papayas [Member]
Segment reporting information
Total gross sales	10,529	10,931	11,699
Fresh products \| Other fresh products [Member]
Segment reporting information
Total gross sales	327	1,353	498
Calavo Foods
Segment reporting information
Total gross sales	82,165	104,094	103,058
Less sales incentives	(6,945)	(9,360)	(11,412)
Net sales	71,247	90,777	88,174
Calavo Foods \| Prepared avocado products [Member]
Segment reporting information
Total gross sales	79,382	100,842	99,635
Calavo Foods \| Salsa [Member]
Segment reporting information
Total gross sales	2,783	3,252	3,423
RFG
Segment reporting information
Total gross sales	406,572	488,373	451,203
Less sales incentives	(1,849)	(2,310)	(2,273)
Net sales	404,723	486,063	448,930
RFG \| Fresh-cut fruit & veg. and prepared foods [Member]
Segment reporting information
Total gross sales	406,572	488,373	451,203
Intercompany Eliminations
Segment reporting information
Net sales	(5,624)	(6,203)	(5,026)
Intercompany Eliminations \| Fresh products
Segment reporting information
Net sales	(1,651)	(2,246)	(1,554)
Intercompany Eliminations \| Calavo Foods
Segment reporting information
Net sales	$ (3,973)	$ (3,957)	$ (3,472)

Segment Information - Concentrations (Details) $ in Thousands	12 Months Ended
	Oct. 31, 2020 USD ($) customer	Oct. 31, 2019 USD ($) customer	Oct. 31, 2018 USD ($) customer	Oct. 31, 2017 customer
Segment reporting information
Goodwill \| $	$ 28,568	$ 18,262	$ 18,300
Fresh products
Segment reporting information
Goodwill \| $	3,900	3,900	3,900
RFG
Segment reporting information
Goodwill \| $	$ 24,500	$ 14,300	$ 14,300
Sales revenue [Member] \| Customer concentration [Member]
Segment reporting information
Number of customers \| customer	10
Consolidated revenue (as a percent)	56.00%	59.00%	59.00%
Sales revenue [Member] \| Customer concentration [Member] \| Fresh products
Segment reporting information
Number of customers \| customer	1	1	1
Sales revenue [Member] \| Customer concentration [Member] \| RFG
Segment reporting information
Number of customers \| customer		1	1	1
Minimum \| Sales revenue [Member] \| Customer concentration [Member] \| Fresh products
Segment reporting information
Consolidated revenue (as a percent)	10.00%	10.00%	10.00%
Minimum \| Sales revenue [Member] \| Customer concentration [Member] \| RFG
Segment reporting information
Consolidated revenue (as a percent)		10.00%	10.00%	10.00%

Segment Information - Assets (Details) - USD ($) $ in Thousands	12 Months Ended
	Oct. 31, 2020	Oct. 31, 2019	Oct. 31, 2018
Segment reporting information
Net sales	$ 1,059,371	$ 1,195,777	$ 1,088,758
Long-lived assets	130,270	132,098
Outside United States [Member]
Segment reporting information
Net sales	29,700	42,500	$ 41,800
United States [Member]
Segment reporting information
Long-lived assets	95,110	98,224
Mexico [Member]
Segment reporting information
Long-lived assets	$ 35,160	$ 33,874

- Definition

+ References

+ Details

Long-Term Obligations - Summary of Long-Term Obligations (Details) - USD ($) $ in Thousands	Oct. 31, 2020	Oct. 31, 2019
Long-Term Obligations
Capital leases	$ 7,059	$ 6,174
Less current portion	(1,343)	(762)
Capital leases, non-current	$ 5,716	$ 5,412

Long-Term Obligations - Details (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended	12 Months Ended
	Apr. 30, 2019	Apr. 30, 2019	Oct. 31, 2020	Oct. 31, 2019	Jul. 31, 2019
Long-term Purchase Commitment [Line Items]
Recorded gain on sale of business			$ 216	$ 2,077
Finance lease asset			6,830
Finance lease liability			7,059	6,174
Finance lease liability, current			1,343	762
Finance lease liability, non-current			$ 5,716	$ 5,412
Temecula, California Packinghouse
Long-term Purchase Commitment [Line Items]
Portion retained by the entity (as a percent)	33.00%	33.00%
Finance lease asset	$ 3,200	$ 3,200
Finance lease liability	3,200	3,200
Finance lease liability, current	100	100
Finance lease liability, non-current	3,100	3,100
Temecula, California Packinghouse \| Disposal, by Sale
Long-term Purchase Commitment [Line Items]
Consideration for sale	7,100	7,100
Total gain on sale of business	6,400
Recorded gain on sale of business		1,900
Deferred gain on sale of business	$ 4,500	$ 4,500
Conley, GA
Long-term Purchase Commitment [Line Items]
Finance lease asset					$ 2,800
Finance lease liability					$ 2,800
Finance lease term					10 years
Conley, GA \| Buildings and improvements
Long-term Purchase Commitment [Line Items]
Finance lease liability, current					$ 900
Conley, GA \| Equipment
Long-term Purchase Commitment [Line Items]
Finance lease liability, current					$ 600

Stock-Based Compensation - Narrative (Details) $ / shares in Units, $ in Thousands								1 Months Ended			12 Months Ended
	Aug. 10, 2020 $ / shares shares	Jun. 17, 2020 $ / shares shares	May 11, 2020 $ / shares shares	Apr. 22, 2020 item $ / shares shares	Dec. 18, 2019 $ / shares shares	Dec. 14, 2018 $ / shares shares	Dec. 18, 2017 $ / shares shares	Jan. 31, 2020 director $ / shares shares	Jan. 31, 2019 director $ / shares shares	Jan. 31, 2018 director $ / shares shares	Dec. 31, 2020 USD ($) shares	Oct. 31, 2020 USD ($) item $ / shares shares	Oct. 31, 2019 USD ($)	Oct. 31, 2018 USD ($)	Apr. 30, 2011 shares
Share-based Compensation
Number of officers \| item												1
Stock-based compensation expense \| $												$ 4,500	$ 3,600	$ 4,600
Restricted Stock [Member]
Share-based Compensation
Stock-based compensation expense \| $												4,500	3,600
Restricted Stock [Member] \| Chief Operating Officer [Member]
Share-based Compensation
Restricted shares granted	4,568
Restricted stock closing price awarded (in dollars per share) \| $ / shares	$ 65.67
Stock-based compensation expense \| $											$ 100
Annual incremental vesting percentage	33.00%
Restricted Stock [Member] \| Chief Financial Officer [Member]
Share-based Compensation
Restricted shares granted			5,418
Restricted stock closing price awarded (in dollars per share) \| $ / shares			$ 55.37
Stock-based compensation expense \| $											100
Annual incremental vesting percentage			33.00%
Restricted Stock [Member] \| Chief Executive Officer [Member]
Share-based Compensation
Restricted shares granted		13,053
Restricted stock closing price awarded (in dollars per share) \| $ / shares		$ 76.61
Stock-based compensation expense \| $											200
Annual incremental vesting percentage		33.00%
Restricted Stock [Member] \| Former Officers [Member]
Share-based Compensation
Number of officers \| item				3
Restricted shares granted				18,324
Restricted stock closing price awarded (in dollars per share) \| $ / shares				$ 61.09
Stock-based compensation expense \| $											$ 1,100
Restricted Stock [Member] \| Non-employee directors [Member]
Share-based Compensation
Restricted shares granted								18,000	21,000	21,000
Restricted stock closing price awarded (in dollars per share) \| $ / shares								$ 87.21	$ 71.56	$ 85.90
Vesting period								1 year	1 year	1 year
Stock-based compensation expense \| $												1,600	1,600
Number of non-employee directors \| director								12	12	12
Restricted shares granted per non-employee								1,500	1,750	1,750
Restricted Stock [Member] \| Executive officers [Member]
Share-based Compensation
Restricted shares granted					31,158	14,522	25,241
Restricted stock closing price awarded (in dollars per share) \| $ / shares					$ 87.63	$ 85.67	$ 75.45
Stock-based compensation expense \| $												$ 1,400	$ 2,000
Annual incremental vesting percentage					33.00%	33.00%	33.00%
2005 Stock Incentive Plan [Member] \| Stock Options [Member] \| Minimum
Share-based Compensation
Vesting period												1 year
Expiration period, after grant date												2 years
2005 Stock Incentive Plan [Member] \| Stock Options [Member] \| Maximum
Share-based Compensation
Vesting period												5 years
Expiration period, after grant date												5 years
2011 Management Incentive Plan [Member]
Share-based Compensation
Common stock shares authorized under plan															1,500,000
2011 Management Incentive Plan [Member] \| Restricted Stock [Member]
Share-based Compensation
Restricted shares granted												72
Restricted stock closing price awarded (in dollars per share) \| $ / shares												$ 81.19
Forfeited, Number of Shares											14
Vested, Number of Shares												51

Stock-Based Compensation - Restricted Stock Activity (Details) - 2011 Management Incentive Plan [Member] - Restricted Stock [Member] - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2020	Oct. 31, 2020
Share-based Compensation
Outstanding, Number of Shares, Beginning Balance		69
Vested, Number of Shares		(51)
Forfeited, Number of Shares	(14)
Granted, Number of Shares		72
Outstanding, Number of Shares, Ending Balance		76
Outstanding, Weighted-Average Exercise Price, balance balance		$ 71.74
Vested, Weighted-Average Grant Price		70.48
Forfeited, Weighted-Average Grant Price	$ 84.54
Granted, Weighted-Average Grant Price		81.19
Outstanding, Weighted-Average Exercise Price, ending balance		$ 80.45
Aggregate Intrinsic Value		$ 5,107

Stock-Based Compensation - Stock Option Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	Oct. 31, 2020	Oct. 31, 2019
2005 Stock Incentive Plan [Member]
Share-based Compensation
Outstanding, Number of Shares, Beginning Balance	2
Exercised, Number of Shares	(2)
Outstanding, Number of Shares, Ending Balance		2
Outstanding, Weighted-Average Exercise Price	$ 19.20
Exercised, Weighted-Average Exercise Price	$ 19.20
Outstanding, Weighted-Average Exercise Price, ending balance		$ 19.20
Stock Options [Member] \| 2011 Management Incentive Plan [Member]
Share-based Compensation
Outstanding, Number of Shares, Beginning Balance	18
Exercised, Number of Shares	(2)
Outstanding, Number of Shares, Ending Balance	16	18
Exercisable, Number of Shares	12
Outstanding, Weighted-Average Exercise Price	$ 41.91
Exercised, Weighted-Average Exercise Price	23.48
Outstanding, Weighted-Average Exercise Price, ending balance	44.21	$ 41.91
Exercisable, Weighted-Average Exercise Price	$ 45.59
Outstanding, Aggregate Intrinsic Value	$ 380
Exercisable, Aggregate Intrinsic Value	$ 269
Outstanding stock options, weighted-average remaining contractual term	3 years 1 month 6 days
Exercisable stock options, weighted-average remaining contractual term	2 years 1 month 6 days
Estimated fair market value of options	$ 800	$ 700

Dividends (Details) - USD ($) $ / shares in Units, $ in Thousands				12 Months Ended
	Dec. 04, 2020	Oct. 26, 2020	Dec. 06, 2019	Oct. 31, 2020	Oct. 31, 2019	Oct. 31, 2018
Dividends
Dividend declared per share		$ 1.15	$ 1.10	$ 1.15	$ 1.10	$ 1.00
Dividend amount paid to shareholders	$ 20,300		$ 19,400	$ 19,354	$ 17,568	$ 16,657

Fair Value Measurements (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Oct. 31, 2020	Oct. 31, 2019	Oct. 31, 2018
Assets at Fair Value:
Unrealized investment gain			$ 2,247
Limoneira
Assets at Fair Value:
Limoneira's stock price	$ 13.83	$ 18.92	$ 24.65
Limoneira
Assets at Fair Value:
Number of securities sold		51,271
Loss on sale of investments		$ 100
Investment shares held (in shares)	1,677,299
Unrealized gains (losses) recorded	$ (8,500)	(9,600)	$ 2,200
Unrealized investment gain			$ 1,700
Limoneira \| Maximum
Assets at Fair Value:
Non-equity method investment ownership (as a percent)	10.00%
Fair Value, Measurements, Recurring
Assets at Fair Value:
Total assets at fair value	$ 23,197	31,734
Fair Value, Measurements, Recurring \| Limoneira
Assets at Fair Value:
Investment in Limoneira Company	23,197	31,734
Fair Value, Measurements, Recurring \| Level 1
Assets at Fair Value:
Total assets at fair value	23,197	31,734
Fair Value, Measurements, Recurring \| Level 1 \| Limoneira
Assets at Fair Value:
Investment in Limoneira Company	$ 23,197	$ 31,734

Mexican IVA taxes receivable (Details) $ in Millions, $ in Millions	Oct. 31, 2020 USD ($)	Oct. 31, 2020 MXN ($)	Oct. 31, 2019 USD ($)	Oct. 31, 2019 MXN ($)	Oct. 31, 2016 USD ($)	Oct. 31, 2016 MXN ($)
Mexican IVA taxes receivable
IVA receivables balance	$ 30.2	$ 640.7	$ 27.6	$ 529.6	$ 6.5	$ 137.3

FreshRealm (Details) $ in Thousands, $ in Millions			1 Months Ended	3 Months Ended				11 Months Ended	12 Months Ended
FreshRealm (Details) $ in Thousands, $ in Millions	Apr. 01, 2020	Feb. 03, 2020	Dec. 15, 2018 USD ($)	Jul. 31, 2020 USD ($)	Oct. 31, 2019 USD ($)	Jul. 31, 2019 USD ($)	Apr. 30, 2019 USD ($)	Oct. 31, 2019 USD ($)	Oct. 31, 2020 USD ($)	Oct. 31, 2020 MXN ($)	Oct. 31, 2019 USD ($)	Oct. 31, 2018 USD ($)
Variable Interest Entity [Line Items]
Investments in unconsolidated entities					$ 10,722			$ 10,722	$ 6,065		$ 10,722
Net income (loss)									(13,841)		36,586	$ 32,012
Income (loss) from unconsolidated entities									7,200
Notes receivable from FreshRealm					35,241			35,241			35,241
Amount loaned											23,800	11,500
FreshRealm
Variable Interest Entity [Line Items]
Investments in unconsolidated entities					5,800			5,800			5,800
Impair investment in FreshRealm				$ 2,800						$ 2.8
Net income (loss)									(24,060)		(30,600)	(29,357)
Income (loss) from unconsolidated entities			$ (4,200)					(9,900)	$ (7,200)		(14,100)	$ (12,000)
VIE ownership (as a percent)	37.00%	37.00%							37.00%	37.00%
Notes receivable from FreshRealm					35,200			$ 35,200	$ 34,500		$ 35,200
Amount loaned					$ 3,700	$ 5,400	$ 4,200

- Definition

The consolidated profit or loss for the period, net of income taxes, including the portion attributable to the noncontrolling interest.

+ References

+ Details

FreshRealm - Balance Sheet (Details) $ in Thousands, $ in Millions	Oct. 31, 2020 USD ($)	Oct. 31, 2020 MXN ($)	Jul. 31, 2020 USD ($)	Oct. 31, 2019 USD ($)
Assets
Cash and cash equivalents	$ 4,055			$ 7,973
Accounts receivable	63,668			63,423
Inventories, net	41,787			36,889
Prepaid expenses and other current assets	10,733			9,027
Property, plant, and equipment, net	130,270			132,098
Other assets	32,558			30,906
Total assets	429,624			390,360
Liabilities and shareholders' equity
Current liabilities	106,331			90,629
Long-term liabilities	67,291			13,862
Total liabilities and shareholders' equity	429,624			390,360
FreshRealm
Assets
Cash and cash equivalents	508			961
Accounts receivable	716	$ 0.3	$ 300	1,493
Inventories, net	2,725			2,792
Prepaid expenses and other current assets	642			732
Property, plant, and equipment, net	3,368			6,076
Other assets	126			703
Total assets	8,085			12,757
Liabilities and shareholders' equity
Current liabilities	14,160			6,533
Debt to Calavo	34,456			35,241
Equity	(40,531)			(29,017)
Total liabilities and shareholders' equity	$ 8,085			$ 12,757

FreshRealm - Statement of Operations (Details) - USD ($) $ in Thousands	12 Months Ended
	Oct. 31, 2020	Oct. 31, 2019	Oct. 31, 2018
Statement of Operations
Net sales	$ 1,059,371	$ 1,195,777	$ 1,088,758
Gross loss	89,898	128,082	113,616
Selling, general and administrative	(57,952)	(59,113)	(57,081)
Other	553	499	559
Net income (loss)	(13,841)	36,586	32,012
FreshRealm
Statement of Operations
Net sales	19,232	24,112	33,769
Gross loss	(3,022)	(5,783)	(10,868)
Selling, general and administrative	(14,188)	(20,196)	(19,512)
Other	(6,850)	(4,621)	1,023
Net income (loss)	$ (24,060)	$ (30,600)	$ (29,357)

- Definition

Aggregate revenue less cost of goods and services sold or operating expenses directly attributable to the revenue generation activity.

+ References

+ Details

- Definition

The consolidated profit or loss for the period, net of income taxes, including the portion attributable to the noncontrolling interest.

Leases - Assets and Liabilities (Details) - USD ($) $ in Thousands	12 Months Ended
	Oct. 31, 2020	Nov. 01, 2019	Oct. 31, 2019	Oct. 31, 2018	Oct. 31, 2017
Leases
Operating lease liability	$ 64,716
Finance lease liability	7,059		$ 6,174
Other long-term liabilities	3,302		4,769
Total shareholders' equity	$ 256,002		285,869	$ 264,959	$ 244,122
Lease, Practical Expedients, Package [true false]	true
Lease-related assets and liabilities
Operating lease assets	$ 60,262
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List]	Operating lease assets
Finance lease asset	$ 6,830
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List]	Property, Plant, and Equipment and Finance Lease Right-of-Use Asset, after Accumulated Depreciation and Amortization
Total	$ 67,092
Operating Lease, Liability, Current	$ 6,443
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List]	Operating Lease, Liability, Current
Finance Lease, Liability, Current	$ 1,343		762
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List]	Long-term Debt and Capital Lease Obligations, Current
Operating Lease, Liability, Noncurrent	$ 58,273
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List]	Operating Lease, Liability, Noncurrent
Finance Lease, Liability, Noncurrent	$ 5,716		$ 5,412
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List]	Long-term Debt and Capital Lease Obligations
Total	$ 71,775
Weighted-average remaining lease term: Operating leases	10 years
Weighted-average remaining lease term: Finance leases	7 years 10 months 24 days
Weighted-average discount rate: Operating leases	2.83%
Weighted-average discount rate: Finance leases	3.28%
Cumulative effect adjustment
Leases
Total shareholders' equity	$ 923
ASU, Leases \| Cumulative effect adjustment
Leases
Operating lease liability		$ 69,600
Deferred rent and incentives		(3,700)
Other long-term liabilities		(1,200)
Total shareholders' equity		900
Lease-related assets and liabilities
Operating lease assets		$ 65,700

Leases - Costs and Other Information (Details) $ in Thousands	12 Months Ended
	Oct. 31, 2020 USD ($)
Lease costs
Amortization of financing lease assets	$ 1,043
Operating lease cost	8,271
Short-term lease cost	996
Variable lease cost	2,865
Interest on financing lease liabilities	235
Total lease cost	13,410
Operating cash flows for operating leases	7,689
Financing cash flows for finance leases	1,115
Operating cash flows for finance leases	235
Right of use assets obtained for operating lease	$ 1,100

Leases - Undiscounted Future Payments (Details) - USD ($) $ in Thousands	Oct. 31, 2020	Oct. 31, 2019
Operating Leases
2021	$ 8,171
2022	7,986
2023	7,922
2024	7,572
2025	6,748
Thereafter	36,478
Total lease payments	74,877
Less: imputed interest	10,161
Total lease liability	64,716
Finance Leases
2021	1,551
2022	1,416
2023	1,301
2024	765
2025	371
Thereafter	2,788
Total lease payments	8,192
Less: imputed interest	1,133
Finance lease liability	$ 7,059	$ 6,174

Leases - Operating lease payments pre-842 (Details) $ in Thousands	12 Months Ended
	Oct. 31, 2019 USD ($)
Leases
2020	$ 9,534
2021	9,007
2022	8,672
2023	8,603
2024	8,203
Thereafter	50,796
Total	94,815
Rent paid, prior to ASU 842	$ 10,700

Leases - Capital lease payments pre-842 (Details) $ in Thousands	Oct. 31, 2019 USD ($)
Leases
2020	$ 907
2021	915
2022	908
2023	900
2024	548
Thereafter	3,162
Minimum lease payments	7,340
Less interest	(1,166)
Present value of future minimum lease payments	6,174
Capital lease, noncurrent	5,400
Capital lease, current	$ 800

Acquisition of Simply Fresh Fruit (Details) - USD ($) $ in Thousands	1 Months Ended	12 Months Ended
	Feb. 29, 2020	Oct. 31, 2020
Business acquisition
Purchase price		$ 18,396
Simply Fresh Fruit [Member]
Business acquisition
Purchase price	$ 18,400
Business acquisition voting interest acquired (as a percent)	100.00%

Acquisition of Simply Fresh Fruit - Net assets (Details) - USD ($) $ in Thousands	1 Months Ended	12 Months Ended
	Feb. 29, 2020	Oct. 31, 2020	Oct. 31, 2019	Oct. 31, 2018
Schedule of net assets
Cash acquired		$ 623
Goodwill		28,568	$ 18,262	$ 18,300
Simply Fresh Fruit [Member]
Schedule of net assets
Current assets (including cash of $623)	$ 3,954
Cash acquired	623
Property, plant, and equipment	2,260
Operating lease right-of-use assets	110
Goodwill	10,306
Intangible assets	11,000
Total assets acquired	27,630
Current liabilities	(5,155)
Non-current liabilities	(565)
Deferred taxes	(2,891)
Total liabilities acquired	(8,611)
Net assets acquired	19,019
Transaction costs related to acquisition		300
Simply Fresh Fruit [Member] \| Adjustment
Schedule of net assets
Property, plant, and equipment		800
Operating lease right-of-use assets		100
Goodwill		500
Lease obligation acquired		$ 900
Simply Fresh Fruit [Member] \| Customer list/relationships [Member]
Schedule of net assets
Intangible assets	$ 9,700
Acquired intangible asset life	7 years
Simply Fresh Fruit [Member] \| Trade names [Member]
Schedule of net assets
Intangible assets	$ 1,300
Acquired intangible asset life	10 years

Reserve for FreshRealm Note Receivable and Impairment of Investment (Detail) $ in Thousands, $ in Millions	3 Months Ended	12 Months Ended
	Jul. 31, 2020 USD ($)	Oct. 31, 2020 USD ($)	Oct. 31, 2020 MXN ($)	Oct. 31, 2020 MXN ($)	Oct. 31, 2019 USD ($)
Equity investment
Accounts receivable		$ 63,668			$ 63,423
FreshRealm
Equity investment
Impair investment in FreshRealm	$ 2,800		$ 2.8
Loan write-off	34,200	34,200	34.2
Interest receivable	4,100			$ 4.1
Accounts receivable	300	$ 716		$ 0.3	$ 1,493
Total impairment	37,300		37.3
Discreet tax benefit	$ (9,500)		$ (9.5)

Schedule II Valuation and Qualifying Accounts (Details) $ in Thousands, $ in Millions	3 Months Ended	12 Months Ended
	Jul. 31, 2020 USD ($)	Oct. 31, 2020 USD ($)	Oct. 31, 2020 MXN ($)	Oct. 31, 2019 USD ($)	Oct. 31, 2018 USD ($)
FreshRealm
Valuation and Qualifying Accounts Disclosure [Line Items]
Loan write-off	$ 34,200	$ 34,200	$ 34.2
Allowance for Customer Deductions [Member]
Valuation and Qualifying Accounts Disclosure [Line Items]
Balance at beginning of year		1,954		$ 1,850	$ 1,038
Additions		8,490		12,211	9,079
Deductions		8,552		12,107	8,267
Balance at end of year		1,892		1,954	1,850
Allowance for Doubtful Accounts [Member]
Valuation and Qualifying Accounts Disclosure [Line Items]
Balance at beginning of year		1,412		1,377	1,452
Additions		194		35
Deductions					75
Balance at end of year		$ 1,606		$ 1,412	$ 1,377