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Related-Party Transactions | 9 Months Ended
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Jul. 31, 2023
Related-Party Transactions |
Related-Party Transactions |
4. | Related party transactions
​ Board of Directors ​ 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. For the three months ended July 31, 2023 and 2022, the aggregate amount of avocados procured from entities owned or controlled by members of our Board of Directors was $2.2 million and $5.7 million. For the nine months ended July 31, 2023 and 2022, the aggregate amount of avocados procured from entities owned or controlled by members of our Board of Directors was $2.3 million and $7.3 million. Amounts payable to these Board members were $0.8 million as of July 31, 2023. We did not have any amounts payable to these Board members as of October 31, 2022. For the three and nine months ended July 31, 2023, we have procured $1.7 million of avocados from entities affiliated with our Chief Executive Officer. ​ Agricola Don Memo, S.A. de C.V. (“Don Memo”) ​ Calavo and Agricola Belher (“Belher”) have an equal one-half ownership interest in Don Memo. Pursuant to a management service agreement, Belher, through its officers and employees, has day-to-day power and authority to manage the operations. ​ As of July 31, 2023, and October 31, 2022, we had an investment of $3.4 million and $3.8 million, representing Calavo’s 50% ownership in Don Memo, which was 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 and aforementioned advances. For the three and nine months ended July 31, 2023, we advanced $0.2 million and $4.1 million of preseason advances to Don Memo, respectively. As of July 31, 2023 and October 31, 2022, we had outstanding advances of $6.0 million and $7.0 million to Don Memo. In October 2020, we entered into an infrastructure loan agreement with Don Memo for up to $2.4 million secured by certain property and equipment of Don Memo. This infrastructure loan accrues interest at 7.25%. The total outstanding infrastructure loan balance at July 31, 2023 and at October 31, 2022, was $1.6 million. This infrastructure loan agreement will mature in fiscal 2024. During the three months ended July 31, 2023 and 2022, we incurred $6.9 million and $3.2 million of cost of sales to Don Memo pursuant to our purchase consignment agreement. During the nine months ended July 31, 2023 and 2022, we incurred $13.0 million and $7.1 million of cost of sales to Don Memo pursuant to our purchase consignment agreement. ​ Belher ​ We make advances to Belher 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 Belher, net of our commission and aforementioned advances. We had grower advances due from Belher totaling $5.2 million and $4.5 million as of July 31, 2023 and October 31, 2022, which are netted against the grower payable. In addition, we had infrastructure advances due from Belher of $0.9 million as of October 31, 2022. These infrastructure advances were recorded as a receivable in prepaid and other current assets as of October 31, 2022. In July 2021, we made a bridge loan of $3.5 million to Belher. This loan is secured by certain farmland in Mexico and accrues interest at 10%. In the first quarter of fiscal 2022, this loan was amended to be due with installments of $0.9 million on July 31, 2022, $0.9 million on July 31, 2023 and $1.7 million on July 31, 2024. As part of this amended loan agreement, we can withhold payments on both the infrastructure advances and the bridge loan through the netting against the grower payable due to Belher. The total outstanding bridge loan balance at July 31, 2023, was $1.7 million, which is included in prepaids and other current assets. The total outstanding bridge loan balance at October 31, 2022, was $2.6 million ($0.9 million is included in prepaids and other current assets and $1.7 million in other assets). During the three months ended July 31, 2023 and 2022, we incurred $2.1 million and $1.4 million of cost of sales to Belher pursuant to our purchase consignment agreement. During the nine months ended July 31, 2023 and 2022, we incurred $16.2 million and $19.0 million of cost of sales to Belher pursuant to our purchase consignment agreement. ​ Avocados de Jalisco, S.A.P.I. de C.V. (“Avocados de Jalisco”) ​ In August 2015, we entered into a Shareholder’s Agreement with various Mexican partners and created Avocados de Jalisco. Avocados de Jalisco is a Mexican corporation created to engage in procuring, packing and selling avocados. As of July 31, 2023, this entity was approximately 83% owned by Calavo and was consolidated in our financial statements. Avocados de Jalisco built a packinghouse located in Jalisco, Mexico, which began operations in June of 2017. During the three months ended July 31, 2023 and 2022 we purchased approximately $2.1 million and $1.2 million of avocados from the partners of Avocados de Jalisco. During the nine months ended July 31, 2023 and 2022 we purchased approximately $6.4 million and $4.7 million of avocados from the partners of Avocados de Jalisco.

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