CALAVO GROWERS INC Income Taxes Disclosure

9. Income Taxes

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The provision for income taxes from continuing operations consists of the following for the years ended October 31, (in thousands):

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The following table presents domestic and foreign components of income (loss) before income taxes for the years ended October 31, (in thousands):

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The above income before taxes includes the net loss from unconsolidated entities of $0.2 million and $0.5 million for the years ended October 31, 2025 and 2024, which is recorded in foreign operations.

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

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The Company’s net deferred income tax assets as presented in the consolidated balance sheets consists of the following items as of October 31, (in thousands):

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As of October 31, 2025 and 2024, the Company had no federal net operating loss carryforwards in either period. As of October 31, 2025 and 2024, the Company has gross state net operating loss carryforwards of approximately $7.8 million and $10.8 million, with carryforward periods primarily ranging from 20 years to indefinite. As of October 31, 2025 and 2024, the Company has gross foreign net operating loss carryforwards of approximately $6.0 million and $6.1 million, with carryforward periods 10 years from generation.

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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. During the fourth quarter of the year ended October 31, 2024, the Company completed the sale of the Fresh Cut Business, which generated taxable income and, as a result, the Company was able to utilize all its federal net operating losses, and a portion of its state net operating losses. The Company’s domestic continuing operations have generated cumulative operating income for the last three years, and the Company expects the profitability trend to continue. Based on this evaluation, the Company determined that it is more likely than not that the Company will realize a majority of the deferred tax assets, with the exception of the federal and state capital loss carryforwards, and state tax credits. As of October 31, 2025 and 2024, there was a valuation allowance of $0.4 million and $1.8 million against the deferred tax assets that are more likely not to be realized. During the year ended October 31, 2025, the Company decreased the valuation allowance against deferred income tax assets by $1.4 million. During the year ended October 31, 2024, the Company decreased the valuation allowance against deferred income tax assets by $3.1 million.

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

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As of October 31, 2025, and 2024, we had $11.1 million for unrecognized tax benefits related primarily to the 2013 Assessment. See Note 7 for further information.

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A reconciliation of the beginning and ending amount of gross unrecognized taxes (exclusive of interest and penalties) was as follows (in thousands):

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Although it is reasonably possible that certain unrecognized tax benefits may increase or decrease within the next twelve months due to tax examination changes, settlement activities, expirations of statutes of limitations, or the impact on recognition and measurement considerations related to the results of published tax cases or other similar activities, the Company does not anticipate any significant changes to unrecognized tax benefits over the next 12 months. The Company accounts for income taxes regarding uncertain tax positions and recognized interest and penalties related to uncertain tax positions in income tax benefit/(expense) in the consolidated statements of operations. Total accrued interest and penalties recorded on the consolidated balance sheet were zero because the Company prepaid the disputed amount.

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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, 2022, and are no longer subject to state income tax examinations for fiscal years prior to October 31, 2021.

The Company determined that certain foreign earnings are 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.

In 2021, the Organization for Economic Cooperation and Development announced an Inclusive Framework on Base Erosion and Profit Shifting including Pillar Two Model Rules defining the global minimum tax, which calls for the taxation of large multinational corporations at a minimum rate of 15%. Subsequently, multiple sets of administrative

guidance have been issued. Pillar Two is not expected to materially impact our effective tax rate or cash flows in the next fiscal year. New legislation or guidance could change our current assessment. We continue to monitor and evaluate enacted and proposed legislation related to the Pillar Two Model Rules, including developments in Mexico where we operate.

In July 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted into law in the U.S. The OBBBA includes numerous provisions that affect corporate taxation, including changes to bonus depreciation, the expensing of domestic research costs, and modifications to certain U.S. international tax rules. The Company has analyzed the impacts of the OBBBA and reflected them in the current period. These impacts do not have a material effect on the tax rate for the year ended October 31, 2025. The majority of the tax law changes will take effect in future years.