MISSION PRODUCE, INC. You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and related notes included elsewhere in this quarterly report. This discussion and analysis contains forward-looking statements based upon our current beliefs, plans and expectations that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors. Please refer to the section of this report under the heading "Forward Looking Statements." Overview We are a world leader in sourcing, producing and distributing fresh avocados, serving retail, wholesale and foodservice customers. We source, produce, pack and distribute avocados to our customers and provide value-added services including ripening, bagging, custom packing and logistical management. In addition, we provide our customers with merchandising and promotional support, insights on market trends and training designed to increase their retail avocado sales. We have two operating segments, which are also reporting segments. These reporting segments are Marketing and Distribution and International Farming. Our Marketing and Distribution reporting segment primarily sources fruit from growers and then distributes the fruit through our global distribution network. Our International Farming segment owns and operates avocado orchards (principally located inPeru ) that supply our Marketing and Distribution segment with a stable supply of avocados. Substantially all fruit produced by our International Farming segment is sold to our Marketing and Distribution segment. Results of Operations The operating results of our businesses are significantly impacted by the price and volume of avocados we farm, source and distribute. In addition, our results have been, and will continue to be, affected by quarterly and annual fluctuations due to a number of factors, including but not limited to pests and disease, weather patterns, changes in demand by consumers, food safety advisories, the timing of the receipt, reduction, or cancellation of significant customer orders, the gain or loss of significant customers, the availability, quality and price of raw materials, the utilization of capacity at our various locations and general economic conditions. Our financial reporting currency is theU.S. dollar. The functional currency of substantially all of our subsidiaries is theU.S. dollar and substantially all of our sales are denominated inU.S. dollars. A significant portion of our purchases of avocados are denominated in the Mexican Peso and a significant portion of our growing and harvesting costs are denominated in Peruvian Soles. Fluctuations in the exchange rates between theU.S. dollar and these local currencies usually do not have a significant impact on our gross margin because the impact affects our pricing by comparable amounts. Our margin exposure to exchange rate fluctuations is short-term in nature, as our sales price commitments are generally limited to less than one month and orders can primarily be serviced with procured inventory. Over longer periods of time, we believe that the impact exchange rate fluctuations will have on our cost of goods sold will largely be passed on to our customers in the form of higher or lower prices. Three Months Ended Six Months Ended April 30, April 30, 2021 2020 2021 2020 (In millions, except for percentages) Dollars % Dollars % Dollars % Dollars % Net sales$ 234.7 100 %$ 221.6 100 %$ 407.9 100 %$ 419.1 100 % Cost of sales 207.6 88 % 200.1 90 % 358.1 88 % 378.2 90 % Gross profit 27.1 12 % 21.5 10 % 49.8 12 % 40.9 10 % Selling, general and administrative expenses 16.3 7 % 11.1 5 % 30.9 8 % 25.9 6 % Operating income 10.8 5 % 10.4 5 % 18.9 5 % 15.0 4 % Interest expense (0.8) - % (2.3) (1) % (1.7) - % (4.4) (1) % Equity method (loss) income (0.2) - % 0.4 - % 2.1 1 % 0.4 - % Impairment on equity method investment - - % (21.2) (10) % - - % (21.2) (5) % Other (expense) income, net (0.3) - % 1.4 1 % (0.3) - % 1.0 - % Income (loss) before income taxes 9.5 4 % (11.3) (5) % 19.0 5 % (9.2) (2) % Provision for income taxes 2.1 1 % 3.5 2 % 9.4 2 % 4.2 1 % Net income (loss)$ 7.4 3 %$ (14.8) (7) %$ 9.6 2 %$ (13.4) (3) % Net sales Our net sales are generated predominantly from the shipment of fresh avocados to retail, wholesale and foodservice customers worldwide. Our net sales are affected by numerous factors, including mainly the balance between the supply of and demand for our produce and 17
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competition from other fresh produce companies. Our net sales are also dependent
on our ability to supply a consistent volume and quality of fresh produce to the
markets we serve.
Three Months Ended Six Months Ended
April 30, April 30,
(In millions) 2021 2020 2021 2020
Net sales:
Marketing and Distribution $ 232.4 $ 219.5 $ 402.0 $ 414.0
International Farming 2.3 2.1 5.9 5.1
Total net sales $ 234.7 $ 221.6 $ 407.9 $ 419.1
Net sales increased $13.1 million or 6% in the three months ended April 30, 2021
compared to the same period last year primarily due to a 22% increase in avocado
volume sold, partially offset by a 14% decrease in average per-unit avocado
sales prices. Volume increases and average price decreases were driven by strong
industry supply from Mexico in the three months ended April 30, 2021 . In
addition, volume during the three months ended April 30, 2020 was negatively
impacted by COVID-19 related stay at-home orders that went into effect in March
2020 .
Net sales decreased $11.2 million or 3% in the six months ended April 30, 2021
compared to the same period last year primarily due to a 15% decrease in average
per-unit avocado sales prices, largely offset by a 14% increase in avocado
volume sold. Average price decreases were driven by strong industry supply from
Mexico , which was our primary country of origin for fruit sourced and sold in
the six months ended April 30, 2021 .
Gross profit
Costs of sales is composed primarily of avocado procurement costs from
independent growers and packers, logistics costs, packaging costs, labor, costs
associated with cultivation (the cost of growing crops), harvesting and
depreciation. Avocado procurement costs from third-party suppliers can vary
significantly between and within fiscal years and correlate closely with market
prices for avocados. While we have long-standing relationships with our growers
and packers, we predominantly purchase fruit on a daily basis at market rates.
As such, the cost to procure products from independent growers can have a
significant impact on our costs.
Logistics costs include land and sea transportation and expenses related to port
facilities and distribution centers. Land transportation costs consist primarily
of third-party trucking services to support North American distribution, while
sea transportation cost consists primarily of third-party shipping of
refrigerated containers from supply markets in South and Central America to
demand markets in North America , Europe and Asia . Variations in containerboard
prices, which affect the cost of boxes and other packaging materials, and fuel
prices can have an impact on our product cost and our profit margins. Variations
in the production yields, and other input costs also affect our cost of sales.
In general, changes in our volume of products sold can have a disproportionate
effect on our gross profit. Within any particular year, a significant portion of
our cost of products are fixed, particularly in our International Farming
segment. Accordingly, higher volumes processed through packing and distribution
facilities or produced on company-owned farms directly reduce the average cost
per pound of fruit grown on company owned orchards, while lower volumes directly
increase the average cost per pound of fruit grown on company owned orchards.
Three Months Ended Six Months Ended
April 30, April 30,
2021 2020 2021 2020
Gross profit (in millions) $ 27.1 $ 21.5 $ 49.8 $ 40.9
Gross profit as a percentage of sales 11.5 % 9.7 % 12.2 % 9.8 %
Gross profit increased 26%, in the three months ended April 30, 2021 compared to
the same period last year to $27.1 million , and gross profit percentage
increased 180 basis points to 11.5% of revenue. The increase in gross profit is
due primarily to higher avocado volume sold. The improvement in gross profit
percentage is being driven by lower per-unit sales prices, as our per-unit
margins represent a higher proportion of the sales value. Gross profit
percentage will fluctuate based upon per-unit sales price levels.
Gross profit increased 22% in the six months ended April 30, 2021 compared to
the same period last year to $49.8 million , and gross profit percentage
increased 240 basis points to 12.2% of revenue. The increase in gross profit is
due primarily to higher avocado volume sold. Similar to above, the improvement
in gross profit percentage is being driven by lower per-unit sales prices, as
our per-unit margins represent a higher proportion of the sales value.
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Selling, general and administrative expenses
Selling, general and administrative expenses primarily include the costs
associated with selling, advertising and promotional expenses, professional
fees, general corporate overhead and other related administrative functions.
Three Months Ended Six Months Ended
April 30, April 30,
(In millions) 2021 2020 2021 2020
Selling, general and administrative
expenses $ 16.3 $ 11.1 $ 30.9 $ 25.9
Selling, general and administrative expenses increased $5.2 million or 47% in
the three months ended April 30, 2021 compared to the same period last year due
primarily to higher professional fees, higher employee-related costs and higher
liability insurance premiums that are associated with being a public company. We
also experienced an increase in rent expense in conjunction with our move to our
new corporate headquarters in February 2021 and we recorded a legal settlement
contingency of $0.8 million .
Selling, general and administrative expenses increased $5.0 million or 19% in
the six months ended April 30, 2021 compared to the same period last year due
primarily to higher employee-related costs and liability insurance premiums
associated with being a public company. We also experienced an increase in rent
expense in conjunction with our move to our new corporate headquarters in
February 2021 and we recorded a legal settlement contingency of $0.8 million .
Interest expense
Interest expense consists primarily of interest on borrowings under working
capital facilities that we maintain and interest on other long-term debt used to
make capital and equity investments.
Three Months Ended Six Months Ended
April 30, April 30,
(In millions) 2021 2020 2021 2020
Interest expense $ 0.8 $ 2.3 $ 1.7 $ 4.4
Interest expense decreased $1.5 million or 65% in the three months ended April
30, 2021 compared to the same period last year due to a combination of lower
interest rates and lower average debt balances. A substantial portion of our
debt has variable interest rates that are based on LIBOR, which has declined
significantly since fiscal year 2020. Average debt balances were lower
reflecting principal payments of existing long-term debt.
Interest expense decreased $2.7 million or 61% in the six months ended April 30,
2021 compared to the same period last year due to a combination of lower
interest rates and lower average debt balances. A substantial portion of our
debt has variable interest rates that are based on LIBOR, which has declined
significantly since fiscal year 2020. Average debt balances were lower
reflecting principal payments of existing long-term debt.
Equity method (loss) income
Our equity method investees include Henry Avocado ("HAC"), Mr. Avocado, Moruga,
and Copaltas.
Three Months Ended Six Months Ended
April 30, April 30,
(In millions) 2021 2020 2021 2020
Equity method (loss) income $ (0.2) $ 0.4 $ 2.1 $ 0.4
Impairment on equity method
investment - (21.2) - (21.2)
In the three months ended April 30, 2021 we incurred a loss from equity method
investments, as opposed to income in the same period last year, resulting in a
change of $0.6 million or 150%. The change was driven by lower earnings from our
investment in Moruga, partially offset by higher earnings from our investment in
HAC. Moruga's earnings were negatively impacted by the timing of blueberry
harvests in 2021. HAC's earnings increased due to higher per-unit margins. The
impact of COVID-19 related stay at-home orders that went into effect in March
2020 were more profound to HAC due to their heavier concentration of foodservice
customers.
Equity method income increased $1.7 million or 425% in the six months ended
April 30, 2021 compared to the same period last year, driven by higher earnings
from investments in Moruga and HAC. Moruga's earnings increased due to improved
yields and better pricing returns on the latter half of the 2020-21 blueberry
harvest. HAC's earnings increased due to higher per-unit margins.
During the second quarter of fiscal 2020, industry wide production information
regarding the 2019-2020 blueberry harvest in Peru became available, indicating
that there is greater competition and expansion by competitors than what we were
previously expecting. We believe that the increase in supply due to expansion
will result in a reduction in pricing over the long-term. As a result of this
factor, among others, we
19-------------------------------------------------------------------------------- lowered our long-term revenue and profitability forecasts of Moruga during the second quarter of fiscal 2020, and concluded that the reduction in the forecasted revenues was an indicator of impairment. As a result, we tested our investment in Moruga for impairment and concluded that the estimated fair value of the investment in Moruga was less than the carrying value of the investment. Due to the change in long-term pricing and revenue expectations, we concluded that the impairment is other-than-temporary. We recorded an impairment charge of$21.2 million to reduce the carrying balance of the investment to its estimated fair value of$22.2 million during the second quarter of fiscal 2020. Other (expense) income, net Other (expense) income, net consists of interest income, currency exchange gains or losses, interest rate derivative gains or losses and other miscellaneous income and expense items. Three Months Ended Six Months Ended April 30, April 30, (In millions) 2021 2020 2021 2020
Other (expense) income, net $ (0.3) $ 1.4 $
(0.3)
Other (expense) income, net changed$1.7 million and$1.3 million in the three and six months endedApril 30, 2021 , respectively, compared to the same periods last year, both due to unfavorable changes in the Mexican peso exchange rate, partially offset by gains on our interest rate swaps driven by market movements in short-term interest rates. The significant weakening of the Mexican peso relative to theU.S. dollar and the substantial reduction in LIBOR correlated to the COVID-19 pandemic in 2020. Provision for income taxes The provision for income taxes consists of the consolidation of tax provisions, computed on a separate entity basis, in each country in which we have operations. We use an estimated annual effective tax rate and adjust for discrete items that occur during the quarter. We recognize the effects of tax legislation in the period in which the law is enacted. Our deferred tax assets and liabilities are remeasured using enacted tax rates expected to apply to taxable income in the years we estimate the related temporary differences to reverse. Realization of deferred tax assets is dependent upon future earnings, the timing and amount of which are uncertain. We recognize a tax benefit from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon settlement. Interest and penalties related to unrecognized tax benefits are recognized within provision for income taxes. Three Months Ended Six Months Ended April 30, April 30, 2021 2020 2021 2020 Provision for income taxes (in millions)$ 2.1 $ 3.5 $ 9.4 $ 4.2 Effective tax rate 22.1 % (31.0) % 49.5 % (45.7) % The provision for income taxes decreased$1.4 million or 40% in the three months endedApril 30, 2021 compared to the same period last year, primarily due to discrete charges recognized in the prior year. Discrete tax expense of$2.3 million was recognized in the three months endedApril 30, 2020 in relation to foreign exchange gains recorded in ourMexico subsidiary that are eliminated in consolidation. These expenses were partially offset by a discrete tax benefit of$1.2 million recorded, related to net operating loss carrybacks that can be applied to higher tax rate years as a result of enactment of the Coronavirus Aid, Relief and Economic Security inMarch 2020 ("CARES Act"). Our effective tax rate for the three months endedApril 30, 2020 was negatively impacted by the discrete items previously mentioned, as well as by a$21.2 million impairment of Moruga, which was nondeductible for income tax purposes. The provision for income taxes increased$5.2 million or 124% in the six months endedApril 30, 2021 compared to the same period last year, primarily due to the impact of discrete items in the current and prior year, as well as the impact of our higher pre-tax income. During the six months endedApril 30, 2021 , we recognized discrete deferred tax expense of$5.1 million related to the remeasurement of our deferred tax liabilities inPeru due to the enactment of tax rate changes for future years. During the six months endedApril 30, 2020 , we recognized$2.3 million in discrete charges in relation to foreign exchange gains recorded in ourMexico subsidiary that are eliminated in consolidation, partially offset by a discrete tax benefit of$1.2 million related to net operating loss carrybacks that can be applied to higher tax rate years as a result of enactment of the CARES Act. Our effective tax rate for the six months endedApril 30, 2020 was negatively impacted by the discrete items previously mentioned, as well as by a$21.2 million impairment of Moruga, which was nondeductible for income tax purposes. Segment Results of Operations The CEO evaluates and monitors segment performance primarily through segment sales and segment adjusted earnings before interest expense, income taxes and depreciation and amortization ("adjusted EBITDA"). Management believes that adjusted EBITDA by segment provides useful information for analyzing the underlying business results as well as allowing investors a means to evaluate the financial results of each reportable segment in relation to the Company as a whole. These measures are not in accordance with, nor are they a substitute for or superior to, the comparable GAAP financial measures. 20
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Adjusted EBITDA refers to net income (loss), before interest expense, income
taxes, depreciation and amortization expense, stock-based compensation expense,
other income (expense), and income (loss) from equity method investees, further
adjusted by any special, non-recurring, or one-time items (impairment of equity
method investment and legal settlement) that are distortive to results.
Net sales
Marketing & International Marketing & International
Distribution Farming Total Distribution Farming Total
Three Months Ended April 30,
(In millions) 2021 2020
Third party sales $ 232.4 $ 2.3 $ 234.7 $ 219.5 $ 2.1 $ 221.6
Affiliated sales - 2.0 2.0 - 0.3 0.3
Total segment sales 232.4 4.3 236.7 219.5 2.4 221.9
Intercompany eliminations - (2.0) (2.0) - (0.3) (0.3)
Total net sales $ 232.4 $ 2.3 $ 234.7 $ 219.5 $ 2.1 $ 221.6
Six Months Ended April 30,
2021 2020
Third party sales $ 402.0 $ 5.9 $ 407.9 $ 414.0 $ 5.1 $ 419.1
Affiliated sales - 2.2 2.2 - 0.3 0.3
Total segment sales 402.0 8.1 410.1 414.0 5.4 419.4
Intercompany eliminations - (2.2) (2.2) - (0.3) (0.3)
Total net sales $ 402.0 $ 5.9 $ 407.9 $ 414.0 $ 5.1 $ 419.1
Adjusted EBITDA
Three Months Ended Six Months Ended
April 30, April 30,
(In millions) 2021 2020 2021 2020
Marketing & Distribution adjusted
EBITDA $ 16.2 $ 17.6 $ 29.9 $ 27.8
International Farming adjusted EBITDA 0.1 (3.2) (1.1) (5.0)
Total reportable segment adjusted
EBITDA 16.3 14.4 28.8 22.8
Net income (loss) 7.4 (14.8) 9.6 (13.4)
Interest expense 0.8 2.3 1.7 4.4
Provision for income taxes 2.1 3.5 9.4 4.2
Depreciation and amortization 4.0 3.7 7.6 7.1
Equity method loss (income) 0.2 (0.4) (2.1) (0.4)
Impairment on equity method investment - 21.2 - 21.2
Legal settlement 0.8 - 0.8 -
Other expense (income), net 0.3 (1.4) 0.3 (1.0)
Stock-based compensation 0.7 0.3 1.5 0.7
Total adjusted EBITDA $ 16.3 $ 14.4 $ 28.8 $ 22.8
Marketing and Distribution
Net sales in our Marketing and Distribution segment increased $12.9 million or
6% in the three months ended April 30, 2021 compared to the same period last
year primarily due to a 22% increase in avocado volume sold, partially offset by
a 14% decrease in average per-unit avocado sales prices. Volume increases and
average price decreases were driven by strong industry supply from Mexico in the
three months ended April 30, 2021 . In addition, volume during the three months
ended April 30, 2020 was negatively impacted by COVID-19 related stay at-home
orders that went into effect in March 2020 .
Segment adjusted EBITDA decreased $1.4 million or 8% in the three months ended
April 30, 2021 compared to the same period last year due primarily to higher
selling, general and administrative expenses as described above. The impact was
partially offset by higher gross margin resulting from strong volume growth.
Net sales in our Marketing and Distribution segment decreased $12.0 million or
3% in the six months ended April 30, 2021 compared to the same period last year
primarily due to a 15% decrease in average per-unit avocado sales prices,
largely offset by a 14% increase in volume of avocados sold. Average price
decreases were driven by strong industry supply from Mexico , which was the
primary country of origin for fruit sourced and sold in the six months ended
April 30, 2021 .
21-------------------------------------------------------------------------------- Segment adjusted EBITDA increased$2.1 million or 8% in the six months endedApril 30, 2021 compared to the same period last year due to higher gross margin resulting from higher volumes, partially offset by higher selling, general and administrative expenses as mentioned above. International Farming Substantially all sales of fruit from our International Farming reportable segment are to our Marketing and Distribution reportable segment, with the remainder of revenue largely derived from services provided to independent third parties. Nominal affiliated sales are realized in the first half of the year since the avocado harvest season for our Peruvian farms typically runs from April through August of each year. Adjusted EBITDA for International Farming is generally concentrated in the third and fourth quarters of our fiscal year in alignment with the harvest season for avocados inPeru . Total segment sales in our International Farming segment increased$1.9 million or 79% in the three months endedApril 30, 2021 , primarily due to earlier timing of the avocado harvest season relative to last year. Net sales increased$0.2 million or 10% in the three months endedApril 30, 2021 compared to the same period last year, primarily due to higher packing and cold storage service revenue. Segment adjusted EBITDA improved by$3.3 million in the three months endedApril 30, 2021 to$0.1 million , primarily due to the revenue drivers noted above, which enabled us to better leverage fixed-cost overhead inPeru during the avocado harvest off-season. Total segment sales in our International Farming segment increased$2.7 million or 50% in the six months endedApril 30, 2021 , primarily due to earlier timing of the avocado harvest season relative to last year. Net sales increased$0.8 million or 16% in the six months endedApril 30, 2021 compared to the same period last year, primarily due to higher packing and cold storage service revenue. Segment adjusted EBITDA improved by$3.9 million in the six months endedApril 30, 2021 to a loss of$1.1 million primarily due to the revenue drivers noted above, which enabled us to better leverage fixed-cost overhead inPeru during the avocado harvest off-season. Liquidity and Capital Resources Operating activities Operating cash flows are seasonal in nature. We typically see increases in working capital during the first half of our fiscal year as our supply is predominantly sourced fromMexico under payment terms that are shorter than terms established for other source markets. In addition, we are building our growing crops inventory in our International Farming segment during the first half of the year for ultimate harvest and sale that will occur during the second half of the fiscal year. While these increases in working capital can cause operating cash flows to be unfavorable in individual quarters, it is not indicative of operating cash performance that we expect to realize for the full year. Six Months Ended April 30, (In millions) 2021 2020 Net income (loss)$ 9.6 $ (13.4) Depreciation and amortization 7.6 7.1 Equity method income (2.1) (0.4) Impairment on equity method investment - 21.2 Stock-based compensation 1.5 0.7 Deferred income taxes 5.0 (0.5) Dividends received from equity method investees - 1.7 Other 0.6 1.7 Changes in working capital (42.4) (22.8) Net cash used in operating activities$ (20.2) $ (4.7) Net cash used in operating activities increased$15.5 million for the six months endedApril 30, 2021 compared to the respective period last year, reflecting unfavorable net change in working capital, partially offset by our higher net income. Within working capital, unfavorable changes in inventory and accounts receivable were only partially offset by favorable changes in grower payables and accounts payable and accrued expenses. Changes in inventory were driven by a combination of higher Mexican fruit volume on-hand and increases in the per-unit cost of purchased fruit. Prior year inventory balances were abnormally low due to the onset of COVID-19 shelter in place orders inMarch 2020 . In addition, inventory balances were negatively impacted by the build-up of growing crop inventory inPeru . The increases were due primarily to higher per-acre farming costs that were expended in the first half of the fiscal year to drive higher production yields when the harvest occurs in the second half of the fiscal year. Accounts receivable increases were due to a combination of higher sales volumes and rising sales prices during the period. Favorable changes in grower payables were correlated with the volume and pricing increases experienced with Mexican inventory. Accounts payable and accrued expenses increased due to higher freight and operating cost accruals that correlate to higher volumes and rising input costs. 22
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Investing activities
Six Months Ended
April 30,
(In millions) 2021 2020
Purchases of property and equipment $ (46.8) $ (19.7)
Proceeds from sale of property, plant and equipment 2.3 - Investment in equity method investees (0.2)
(1.9)
Loan repayments from equity method investees 1.5 - Loans to equity method investees (1.5) - Other (0.3)
(0.3)
Net cash used in investing activities$ (45.0) $
(21.9)
Property, plant and equipment In the six months endedApril 30, 2021 , capital expenditures were for the construction of the Laredo facility, which formally opened inMay 2021 , and land improvements and orchard development inPeru andGuatemala . In the six months endedApril 30, 2020 , capital expenditures were for farm development and packinghouse expansion inPeru , the purchase of farmland inCalifornia and initial site preparation costs for the Laredo facility. In the six months endedApril 30, 2021 , proceeds from the sale of property, plant and equipment were primarily from the sale of two multi-unit housing properties inCalifornia that had been used for housing seasonal avocado labor contractors. Equity method investees In the six months endedApril 30, 2021 and 2020, we made capital contributions to our joint venture Copaltas S.A.S. to support the purchase of additional farmland inColombia . During the six months endedApril 30, 2021 , we issued a$1.5 million loan to Copaltas to support the working capital needs of the entity. The loan bears interest at 6.66% and is dueDecember 31, 2021 . In addition, we received an installment payment on our outstanding loan to Moruga during the six months endedApril 30, 2021 . Financing activities Six Months Ended April 30, (In millions) 2021 2020 Borrowings (payments) on revolving line credit $ -$ 4.0 Principal payments on long-term borrowings, capital leases and supplier financing$ (4.5) $ (4.6) Dividends paid - (7.5) Other - (1.8) Net cash used in financing activities$ (4.5) $ (9.9) Borrowings and repayments of debt Principal payments on our term loans and other notes payable under our credit facility are made in accordance with debt maturity schedules under the facility. Shareholders' equity We paid dividends of$0.12 per share during the six months endedApril 30, 2020 . No dividends were paid during the six months endedApril 30, 2021 . Capital resources (In millions) April 30, 2021 October 31, 2020 Cash and cash equivalents $ 54.2 $ 124.0 Working capital 146.8 170.2 23
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Capital resources include cash flows from operations, cash and cash equivalents, and debt financing. We have a syndicated credit facility withBank of America, N.A ., comprised of two term loans and a revolving credit facility ("revolver") that provides up to$100 million in borrowings that will expire inOctober 2023 . The credit facility also includes a swing line facility and an accordion feature which allows us to increase the borrowings by up to$125 million , with bank approval. We did not have any outstanding borrowings under the revolver as ofApril 30, 2021 andOctober 31, 2020 . Interest on the revolver bears rates at a spread over LIBOR that varies with our leverage ratio. As ofApril 30, 2021 andOctober 31, 2020 , interest rates on the revolver were 1.86% and 1.90%, respectively. As ofApril 30, 2021 , we were required to comply with the following financial covenants: (a) a quarterly consolidated leverage ratio of not more than 3.00 to 1.00 and (b) a quarterly consolidated fixed charge coverage ratio of not less than 1.50 to 1.00. As ofApril 30, 2021 , our consolidated leverage ratio was 1.76 to 1.00 and our consolidated fixed charge coverage ratio was 2.64 to 1.00 and we were in compliance with all such covenants of the credit facility. The loans are secured by real property, personal property and the capital stock of our subsidiaries. We pay fees on unused commitments on the credit facility. Commitments for capital expenditures We have various capital projects in progress for farming expansion and facility improvements which we intend to fund through our operating cash flow. We expect to spend approximately$35 million on these projects during the second half of fiscal 2021.
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