CALAVO GROWERS INC : Costs Associated with Exit or Disposal Activities, Material Impairments (form 8-K)

Published: 2021-10-21 14:07:07 ET CVGW

Item 2.05 Costs Associated with Exit or Disposal Activities.

On October 18, 2021, the Board of Directors of Calavo Growers, Inc. (the "Company") determined as part of Project Uno, a previously announced profit improvement program, that the Company will discontinue its Renaissance Food Group's food processing operations at its Green Cove Springs (near Jacksonville), Florida facility by mid to late November 2021. The Company's Fresh (avocado) operations at the facility will continue and are not affected. The closure will result in a reduction of approximately 150 employees. The Company, through its Renaissance Food Group, will continue to serve its customers from its other food processing locations and is committed to providing a smooth transition for customers and employees.

In connection with the discontinuation of these food processing operations, the Company estimates that total restructuring and related asset impairment charges will be approximately $16 million on a pre-tax basis. This amount includes asset impairment charges related to lease abandonment, leasehold improvements, and retirement of machinery & equipment of approximately $15 million as well as future cash expenditures estimated at $1 million, including $0.4 million associated with severance and benefits. Actual amounts may vary based on a number of factors. The Company is assessing subleasing the former RFG facility, which if successful will offset the costs mentioned above.

The Company expects to recognize substantially all of these charges during the fourth quarter of fiscal 2021.

Item 2.06 Material Impairments.

The information contained in Item 2.05 is incorporated herein by reference.

Forward-Looking Statements

This Current Report on Form 8-K contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, including statements regarding the discontinuation of Renaissance Food Group's food processing operations at its Green Cove Springs (near Jacksonville), Florida facility and its impact on employees, assets, customers, and the Company's results of operations, financial statements and financial condition as well as the Company's future plans for production facilities. These forward-looking statements are based on current expectations that are subject to change, and actual results may differ materially from the forward-looking statements. Factors that could cause actual results to differ materially include those risks and uncertainties described in the Company's annual report on Form 10-K filed with the Securities and Exchange Commission on December 21, 2020, and other risks and uncertainties described from time to time in the Company's other public filings with the Securities and Exchange Commission. The Company does not undertake to update any forward-looking statements based on new developments or changes to the Company's expectations.