<SEC-DOCUMENT>0001193125-15-184015.txt : 20150623
<SEC-HEADER>0001193125-15-184015.hdr.sgml : 20150623
<ACCEPTANCE-DATETIME>20150512162636
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0001193125-15-184015
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20150512

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CALAVO GROWERS INC
		CENTRAL INDEX KEY:			0001133470
		STANDARD INDUSTRIAL CLASSIFICATION:	AGRICULTURE SERVICES [0700]
		IRS NUMBER:				330945304
		STATE OF INCORPORATION:			CA
		FISCAL YEAR END:			1031

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		2530 RED HILL AVE.
		CITY:			SANTA ANA
		STATE:			CA
		ZIP:			92705
		BUSINESS PHONE:		9098334200
</SEC-HEADER>
<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.htm
<TEXT>
<HTML><HEAD>
<TITLE>CORRESP</TITLE>
</HEAD>
 <BODY BGCOLOR="WHITE">

 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">May&nbsp;12, 2015 </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>Via EDGAR and Federal Express </U></P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Ms.&nbsp;Melissa
Raminpour </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Accounting Branch Chief </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Division of Corporation
Finance </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">United States Securities and Exchange Commission </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Washington, D.C. 20549 </P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%">&nbsp;</TD>
<TD WIDTH="5%" VALIGN="top" ALIGN="left">Re:</TD>
<TD ALIGN="left" VALIGN="top"><U>Calavo Growers, Inc. &#150; Annual Report on Form 10-K &#150; Filed January&nbsp;30, 2015 &#150; File No. 000-33385</U> </TD></TR></TABLE>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Dear Ms.&nbsp;Raminpour: </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">We are in receipt of the above
captioned letter. We have endeavored to respond fully to each of your comments and questions. For your convenience, this letter is formatted to reproduce your numbered comments (<I>in italics</I>) and our responses to each of the comments. </P>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><I><U>Management&#146;s Discussion and Analysis of Financial Condition and Results of Operations </U></I></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><I><U>Gross Margin, page 26 </U></I></P> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><I>1.</I></TD>
<TD ALIGN="left" VALIGN="top"><I>We note your disclosure at the top of page 27 of the gross margin and gross profit percentages of RFG that would have resulted if you had not included the non-cash compensation expense related to the sale/acquisition
of RFG totaling $1.8 million, $.7 million, and an insignificant amount in fiscal 2014, 2013, and 2012, respectively. Please note that disclosure of this adjusted gross margin appears to be a non-GAAP financial measure and as such is subject to the
guidance in Item&nbsp;10(e) of Regulation S-K. Please revise to include all disclosures required by this guidance. Also, the adjusted gross margin amount should be labeled as such and should not be labeled the same as the gross margin calculated in
accordance with GAAP. </I></TD></TR></TABLE> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><I>2.</I></TD>
<TD ALIGN="left" VALIGN="top"><I>Similarly, your disclosures related to net income and EPS excluding certain expenses as disclosed in Exhibit 99.1 to your Form 8-K filed March&nbsp;12, 2015, should be revised to follow the guidance in Regulation G
for disclosing non-GAAP financial measures</I>.<I> </I></TD></TR></TABLE> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">In regard to comment 1 set forth above, we will comply with the comment in future
filings of our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, where applicable, by modifying our disclosure such that it will not be subject to the guidance in Item&nbsp;10(e) of Regulation S-K, as we did not intend for such
disclosure to be a non-GAAP financial measure. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">In our future filings of our Annual Report on <FONT STYLE="white-space:nowrap">Form&nbsp;10-K,</FONT> we
will remove the table as shown near the top of page&nbsp;27. Our expected disclosure is provided below: </P>

<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">


 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Securities and Exchange Commission </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">May 12, 2015 </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Page 2 </P>
<p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P>
 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Note that RFG&#146;s Cost of Sales for fiscal 2014 and 2013 include non-cash compensation expense related to
the sale/acquisition of RFG totaling $1.8 million and $0.7 million. See Note 3 to our Consolidated Financial Statements. If we did not include these non-cash expenses, RFG&#146;s gross margin would increase 8.0% for fiscal 2014 and 3.9% for fiscal
2013. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">In regard to comment 2 set forth above, we will comply with the comment in future filings of Form 8-K by modifying our disclosure, if applicable,
such that it will follow the guidance in Regulation G for disclosing non-GAAP financial measures. An example disclosure is provided below: </P> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="5%">&nbsp;</TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left">&#149;</TD>
<TD WIDTH="1%" VALIGN="top">&nbsp;</TD>
<TD ALIGN="left" VALIGN="top">Net Income Grows to $5.3 Million Versus a Net Loss of $1.8 Million One Year Earlier (Which Included Renaissance Food Group, LLC Non-Cash Operating Expenses of $5.4 Million; Excluding Amount, Fiscal 2014 Adjusted Net
Income Totaled $4.0 Million) </TD></TR></TABLE> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="5%">&nbsp;</TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left">&#149;</TD>
<TD WIDTH="1%" VALIGN="top">&nbsp;</TD>
<TD ALIGN="left" VALIGN="top">Earnings Per Share Equals 31 Cents Which Compares with a Net Loss of 11 Cents in Last Year&#146;s First Quarter (Which Included Non-Cash Operating Expense of 34 Cents Per Share; Excluding Amount, Fiscal 2014 Adjusted
EPS equaled 25 Cents) </TD></TR></TABLE> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><I>Form 10-Q for the Quarter Ended January&nbsp;31, 2015 </I></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><I>Item&nbsp;4. Controls and Procedures, page 21 </I></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><I>3. We
note your disclosure that your principal executive officer and your principal financial officer concluded that your disclosure controls and procedures were effective as of January&nbsp;31, 2015. You also disclose that there were no changes in your
internal control over financial reporting during the quarter ended January&nbsp;31, 2015 that have materially affected, or are reasonably likely to materially affect, your internal control over financial reporting. In light of the fact that you
concluded in your Form 10-K for the year ended October&nbsp;31, 2014 that your disclosure controls and procedures were not effective as of October&nbsp;31, 2014 due to the existence of a material weakness in internal control over financial
reporting, please explain to us how you were able to conclude that disclosure controls and procedures were effective at January&nbsp;31, 2015</I>. <I> </I></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The material weakness as disclosed in our Annual Report on Form 10-K, filed on January&nbsp;30, 2015, is shown below: </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">&#147;As of October&nbsp;31, 2014, there was a material weakness in the Company&#146;s controls over its accounting for and reporting of contingent
consideration as such applies to business combinations. Specifically, our controls did not properly identify the failure to apply generally accepted accounting principles with respect to what qualifies as an equity instrument vs. a liability
instrument in a business combination. Initially, we recorded the contingent consideration, which was settleable in common stock, as an equity instrument and therefore did not record expense based on the changes in fair value of the contingent
consideration. However, the contingent consideration should have been accounted for as a liability requiring re-measurement to fair value. As a result, material errors to the recorded contingent consideration occurred and were not timely
detected.&#148; </P>

<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">


 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Securities and Exchange Commission </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">May 12, 2015 </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Page 3 </P>
<p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P>
 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The transaction that generated this material weakness took place during fiscal 2011. Also, the contingent
consideration agreed to in this acquisition was unique to Calavo Growers, Inc. during fiscal 2011 and no similar transaction has been entered into from fiscal 2011 up to and including our quarter ended January&nbsp;31, 2015. As such, the types of
transactions that gave rise to the material weakness are simply not applicable during our quarter ended January&nbsp;31, 2015. Therefore, when our principal executive and principal financial officers evaluated the effectiveness of our internal
controls and procedures for the quarter ended January&nbsp;31, 2015, we were able to conclude that our internal controls were effective, based on the relevant transactions that took place, and the controls that govern them, during such quarter. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Furthermore, we do not believe that any disclosure pursuant to Item&nbsp;308(c) of Regulation S-K is appropriate either for, as stated above, no similar
transaction took place during the quarter ended January&nbsp;31, 2015 which would allow us to reevaluate, and perhaps change, our internal controls related to what qualifies as an equity instrument vs. a liability instrument in a business
combination. When and if such a transaction takes place, we will consider disclosing any changes in our internal controls pursuant to Item&nbsp;308(c) of Regulation S-K. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The Company hereby acknowledges that: </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">1. The
Company is responsible for the adequacy and accuracy of the disclosures in its filings with the Securities and Exchange Commission (the &#147;Commission&#148;); </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">2. Comments from the staff of the Commission or changes to disclosure in response to staff comments do not foreclose the Commission from
taking any action with respect to the Company&#146;s filings; and </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">3. The Company may not assert comments from the staff of the Commission
as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; margin-left:54%; text-indent:-2%; font-size:10pt; font-family:Times New Roman">Very truly yours, </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; margin-left:54%; text-indent:-2%; font-size:10pt; font-family:Times New Roman">/s/ Arthur J. Bruno </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; margin-left:54%; text-indent:-2%; font-size:10pt; font-family:Times New Roman">Arthur J. Bruno </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; margin-left:54%; text-indent:-2%; font-size:10pt; font-family:Times New Roman">Principal Financial Officer </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; margin-left:54%; text-indent:-2%; font-size:10pt; font-family:Times New Roman">Calavo Growers, Inc. </P>
</BODY></HTML>
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
