Financial Performance - Net sales increased by $45.2 million or 21% to $258.7 million for the three months ended January 31, 2024, compared to $213.5 million in the same period last year[75]. - Gross profit rose by $19.7 million or 219% to $28.7 million, with gross profit percentage increasing to 11.1% from 4.2% year-over-year[79]. - Net income for the company was $2.0 million for the three months ended January 31, 2024, compared to a net loss of $10.6 million in the same period last year[101]. - Total adjusted EBITDA for the company was $19.2 million for the three months ended January 31, 2024, compared to $2.3 million in the same period last year[96]. - Net cash provided by operating activities was $9.5 million for the three months ended January 31, 2024, compared to cash used of $1.3 million in the same period last year[101]. Segment Performance - Marketing and Distribution segment net sales increased by $42.8 million or 23.6% to $224.6 million, driven by higher average per-unit avocado sales prices[75]. - Net sales in the Marketing and Distribution segment increased by $42.8 million or 24% for the three months ended January 31, 2024, compared to the same period last year, driven by avocado pricing increases[97]. - Adjusted EBITDA for the Marketing and Distribution segment increased by $6.4 million or 139% in the same period, primarily due to improved per-unit gross margin on avocados sold[97]. - Total segment sales in the International Farming segment were flat for the three months ended January 31, 2024, compared to the same period last year[98]. - Adjusted EBITDA for the International Farming segment increased by $1.3 million or 72% in the same period, driven by cost savings measures[98]. - Net sales in the Blueberries segment increased by $2.7 million or 9% for the three months ended January 31, 2024, primarily due to price and volume dynamics[98]. - Blueberry revenue increased by $2.7 million or 9%, primarily due to a 90% increase in average per-unit sales price, despite a 43% decrease in volume sold[75]. Expenses and Liabilities - Selling, general and administrative expenses rose by $1.6 million or 8% to $20.7 million, mainly due to higher employee-related costs[81]. - Interest expense increased by $0.9 million or 38% to $3.3 million, primarily due to rising SOFR rates[83]. - Equity method income decreased by $0.6 million or 60% to $0.4 million, primarily due to weak results at Mr. Avocado[86]. - Other expense, net increased by $0.2 million or 25% to $1.0 million, driven by foreign currency transaction losses[88]. - Provision for income taxes was $2.1 million, compared to a benefit of $1.7 million in the same period last year, with an effective tax rate of 51.2%[91]. Capital Expenditures and Financial Position - The company reported capital expenditures of $9.9 million for the three months ended January 31, 2024, down from $17.6 million in the same period last year[102]. - For fiscal 2024, capital expenditures are expected to be between $30 million to $35 million[111]. - The Moruga Blueberry Project involves farming approximately 1,500 additional acres of blueberries in Peru, with estimated remaining capital expenditures of approximately $35 million as of January 31, 2024[112]. - The company has a total borrowing capacity of $250 million under its syndicated credit facility with Bank of America[109]. - As of January 31, 2024, the consolidated leverage ratio was 2.43 to 1.00, and the fixed charge coverage ratio was 1.96 to 1.00, indicating compliance with financial covenants[110]. - The company's undiscounted cash liabilities related to leases were approximately $177.2 million, with $109.0 million for long-term land leases in the International Farming and Blueberries segments[112]. - Remaining maturities on term loans and notes were $156.5 million as of January 31, 2024[112]. Market Conditions and Risks - The company continues to face fluctuations in supply and demand, impacting net sales and gross profit margins[70]. - There have been no material changes to critical accounting estimates since the Annual Report on Form 10-K for the year ended October 31, 2023[113]. - No material changes were reported in the quantitative and qualitative disclosures about market risk in the Annual Report on Form 10-K for the year ended October 31, 2023[114].

Financial Performance - Total revenue for Q1 2024 increased 21% to $258.7 million, driven by a 23% increase in average per-unit avocado selling prices[3] - Adjusted net income for Q1 2024 was $6.7 million, or $0.09 per diluted share, compared to an adjusted net loss of $(5.0) million, or $(0.07) per diluted share, in the prior year[7] - Adjusted EBITDA for Q1 2024 was $19.2 million, an increase of $16.9 million compared to $2.3 million in the prior year period[7] - Net sales for the three months ended January 31, 2024, increased to $258.7 million, up 21.1% from $213.5 million in the same period of 2023[27] - Gross profit for the same period was $28.7 million, compared to $9.0 million in the prior year, representing a significant improvement[27] - Operating income turned positive at $8.0 million, compared to an operating loss of $10.1 million in the previous year[27] - The company reported net income of $2.0 million for the three months ended January 31, 2024, compared to a net loss of $10.6 million in the same period last year[27] - The company experienced a net loss attributable to Mission Produce of $8.8 million for the quarter, compared to a loss of $10.6 million in the previous year[32] Sales and Pricing - Marketing & Distribution segment net sales increased 24% to $224.6 million, primarily due to a 23% increase in average per-unit avocado sales prices[8] - Blueberries segment net sales increased 9% to $32.5 million, driven by a 90% increase in average per-unit sales price, despite a 43% decrease in volume sold[9] - Avocado sales accounted for $212.3 million, compared to $174.0 million in the prior year, reflecting a year-over-year increase of about 22%[36] - The average sales price per pound of avocados rose to $1.40, up from $1.14 in the same quarter last year[35] - For Q2 2024, avocado pricing is expected to be approximately 10-15% higher than the $1.30 per pound average experienced in Q2 2023[14] Cash Flow and Assets - Cash and cash equivalents were $39.9 million as of January 31, 2024, down from $42.9 million as of October 31, 2023[11] - Net cash provided by operating activities was $9.5 million for Q1 2024, compared to cash used in operating activities of $(1.3) million in the prior year[12] - Total current assets increased to $244.5 million as of January 31, 2024, up from $220.1 million at October 31, 2023[24] - Total assets increased to $937.5 million as of January 31, 2024, compared to $914.8 million at October 31, 2023[24] - Total liabilities rose to $405.7 million, compared to $386.5 million at the end of the previous quarter[25] - Inventory levels increased to $85.9 million, up from $70.8 million at the end of the previous quarter[24] Capital Expenditures - Capital expenditures for Q1 2024 were $9.9 million, compared to $17.6 million in the prior year[13] Segment Performance - Marketing and Distribution adjusted EBITDA was reported at $11.0 million, a significant increase from $4.6 million year-over-year[33] - International Farming adjusted EBITDA showed improvement, with a loss of $0.5 million compared to a loss of $1.8 million in the previous year[33] - The company sold 151.6 million pounds of avocados, slightly down from 152.3 million pounds in the same quarter last year[35] Future Outlook - The company plans to continue focusing on market expansion and new product development to drive future growth[32]

Core Viewpoint - Mission Produce, Inc. will release its financial results for the fiscal first quarter ended January 31, 2024, on March 11, 2024, after market close, followed by a conference call to discuss the results [1]. Group 1: Financial Results Announcement - The financial results for the fiscal first quarter will be announced after market close on March 11, 2024 [1]. - A conference call and webcast will be held at 5:00 PM Eastern Time on the same day to discuss the financial results [1]. Group 2: Conference Call Details - The conference call can be accessed live by dialing (877) 407-9039 for domestic callers and (201) 689-8470 for international callers [2]. - A replay of the call will be available until March 25, 2024, with specific dialing instructions for both domestic and international callers [2]. - The live audio webcast will be accessible on the Company's Investor Relations website, with an archived replay available shortly after the live event [2]. Group 3: Company Overview - Mission Produce is a global leader in sourcing, producing, and distributing fresh Hass avocados, with additional offerings in mangos and blueberries [3]. - The company has been in operation since 1983 and services retail, wholesale, and foodservice customers in over 25 countries [3]. - Mission Produce operates four state-of-the-art packing facilities in California, Mexico, and Peru, with sourcing capabilities in various countries including Chile, Colombia, and the Dominican Republic [3].

Core Insights - Mission Produce, Inc. will release its financial results for the fiscal first quarter ended January 31, 2024, after market close on March 11, 2024 [1] - A conference call and webcast will be held on the same day at 5:00 PM Eastern Time to discuss the financial results [1] Company Overview - Mission Produce is a global leader in sourcing, producing, and distributing fresh Hass avocados, with additional offerings in mangos and blueberries [3] - The company has been in operation since 1983 and services retail, wholesale, and foodservice customers in over 25 countries [3] - Mission Produce operates four state-of-the-art packing facilities in California, Mexico, and Peru, with additional sourcing capabilities in various countries including Chile, Colombia, and the Dominican Republic [3] - The company has a global distribution network with strategically positioned forward distribution centers across North America, China, Europe, and the UK, providing value-added services such as ripening, bagging, custom packing, and logistical management [3]

Financial Data and Key Metrics Changes - In fiscal year 2023, total avocado volume sold increased by 12% to 654 million pounds, but net sales decreased by 9% to $954 million due to a 24% decrease in average per unit avocado sale prices [5][8] - For the fourth quarter of fiscal 2023, total revenue was $257.9 million, an 8% increase compared to the same period last year, driven by higher per unit avocado sales prices [15][17] - Net income for the fourth quarter was $4 million or $0.06 per diluted share, compared to a net loss of $42 million or $0.59 per diluted share for the same period last year [17][18] Business Line Data and Key Metrics Changes - The Marketing and Distribution segment net sales increased by 7% to $236.2 million for the quarter, with adjusted EBITDA increasing by 170% to $10.8 million due to higher per unit gross margins [18][19] - The International Farming segment reported total sales of $40.3 million, a 1% increase compared to the same period last year, but adjusted EBITDA decreased by $11.1 million to $1.1 million due to lower gross profit from volume and price declines [20][21] - The Blueberries segment saw net sales increase by 88% to $19.5 million, with adjusted EBITDA increasing by $4.4 million to $5.4 million, driven by higher pricing and a 29% increase in volume [22][23] Market Data and Key Metrics Changes - The company noted that higher avocado volume sold in 2023 was driven by increased industry supply out of Mexico, contrasting with limited supply in the previous year that led to higher prices [8][10] - The company expects industry volumes to be slightly lower in the first quarter of fiscal 2024 due to a lighter Mexican harvest, but pricing is anticipated to be approximately 15% higher year-over-year [27] Company Strategy and Development Direction - The company aims to drive long-term volume growth by supporting markets with consistent supply and increasing per capita consumption globally, particularly in Europe and Asia [6][12] - The company is building capabilities in growth markets, including a new distribution center in the UK, and diversifying its product offerings to include mangoes and blueberries [7][9] - The company plans to focus on cost control measures and reallocating resources to maximize efficiency, with a modest capital expenditure forecast for fiscal 2024 [12][24] Management Comments on Operating Environment and Future Outlook - Management highlighted that the unpredictable nature of the industry, influenced by weather patterns and marketing decisions from growers, impacts supply-demand equilibrium [7][10] - Looking ahead to 2024, management expects improved pricing in the International Farming segment due to adjustments made to the marketing strategy and improved weather conditions in Peru [11][27] - The company anticipates generating positive free cash flow in fiscal 2024 and beyond, with a focus on maintaining a healthy capital structure [26][27] Other Important Information - The company has made strategic decisions to vertically integrate its business with avocado production in Peru and has developed acreage in Guatemala and Colombia to balance year-round supply [8][10] - Capital expenditures for fiscal year 2023 were $49.8 million, down from $61.2 million the previous year, with a projected budget for fiscal 2024 in the range of $30 to $35 million [24][25] Q&A Session Summary Question: Cost control initiatives and opportunities for 2024 - Management indicated that they have picked the low-hanging fruit in cost reductions, particularly in labor and freight costs, and are focusing on further cost reductions in farming operations in Peru [30][32] Question: Capacity and growth expectations - Management discussed the expansion into the UK and Europe, leveraging state-of-the-art facilities and focusing on asset utilization to support growth [35][39] Question: Changes in marketing strategy - Management highlighted a shift in market allocation and the potential to evaluate partnerships for marketing fruit, particularly in Asia, to enhance returns [46][49]

Customer Concentration - Sales to the top 10 customers accounted for approximately 65% of net sales for the year ended October 31, 2023, compared to 59% for both years ended October 31, 2022 and 2021[42]. Supply Chain Risks - The company faces risks related to limited fruit supply, which could lead to increased costs and decreased revenues if unable to purchase sufficient volumes from third-party growers[33]. - Disruption in the supply chain or inability to maintain production capacity could adversely affect the company's ability to meet customer demand and operational efficiency[48]. - Transportation costs have increased significantly, impacting the company's ability to serve customers and affecting financial performance[49]. - Farming operations are subject to risks from climate change, including adverse weather conditions that can reduce product availability and increase costs[52]. - The company relies on efficient transportation services, and disruptions due to climate change could significantly impact operations[53]. Market and Economic Conditions - The company is sensitive to fluctuations in market prices of products, which are influenced by supply conditions and external factors such as weather and pests[34]. - Increased competition in the market may adversely affect the company's operating results, particularly if unable to offer competitive prices to growers and customers[36]. - Economic and political conditions in Mexico, the largest source of avocado supply, could adversely impact the company's operations and market conditions[43]. - Economic conditions in Peru, where significant farming operations are conducted, could materially affect the company's financial performance[45]. - General economic downturns may reduce consumer spending, impacting the company's sales and profitability[47]. - Global conflicts, such as those between Russia and Ukraine, may adversely affect the company's business operations and results[80]. Legal and Regulatory Risks - The company is subject to legal and regulatory changes in Mexico that may require direct employment of harvesting personnel, potentially impacting operational costs[44]. - The company is subject to various federal, state, local, and foreign regulations regarding environmental matters, which could lead to substantial penalties or operational restrictions if not complied with[67]. - Changes in U.S. trade policy and tariffs may negatively impact the company's operating results and financial condition[64]. - Compliance with evolving data privacy laws, such as CCPA and GDPR, may require significant resources and could result in penalties if not adhered to[59]. - Food safety events could adversely affect sales and the company's reputation, leading to potential liability claims[61]. - The company faces various legal proceedings that could result in substantial monetary damages and negatively impact its reputation and stock prices[72]. Financial Performance and Risks - The company's financial results are significantly affected by variations in pricing and fluctuations in crop sizes, which may hinder accurate forecasting[81]. - The company incurs significant legal, accounting, and compliance costs as a public entity, which were not present as a private company[85]. - Compliance with the Sarbanes-Oxley Act and Dodd-Frank Act has increased legal and financial compliance costs, potentially impacting net income or increasing net loss[85]. - Changes in tax laws and regulations could affect the company's financial results, with potential increases in corporate income tax rates in Peru from 20% in 2023 to 29.5% thereafter[79]. - A decline in business performance could hinder compliance with financial covenants, affecting the ability to manage business and capital[95]. Governance and Control - Executive officers and directors own approximately 39% of the outstanding common stock, which may influence corporate governance and control over significant transactions[84]. - The company’s governance provisions may discourage favorable takeovers and limit stockholder influence over management changes[90]. - The exclusive forum provision in the company’s charter may limit stockholders' ability to bring claims in preferred judicial forums[92]. - The company is governed by Delaware law, which includes provisions that could affect merger and acquisition activities involving significant stockholders[91]. Operational Challenges - The company has faced labor shortages and inflationary pressures, which could negatively affect operations and results[50]. - Seasonal factors, such as fruit availability and consumer demand, can cause revenue and operating results to vary significantly[55]. - Cybersecurity risks pose a threat to operations, potentially leading to increased costs and disruptions[56]. - Cybersecurity incidents could materially adversely affect the company's financial performance, especially if operations are interrupted and insurance coverage is inadequate[71]. - The company is required to report on the effectiveness of internal controls over financial reporting starting with the fiscal year ending October 31, 2021[88]. - There are risks associated with maintaining effective internal control over financial reporting, which could lead to a decline in investor confidence and stock price[88]. Investment and Financing - Future acquisitions may result in accounting charges, increased debt, and contingent liabilities, potentially adversely affecting the company's financial condition and stock price[68]. - The company has invested heavily in distribution centers and packing facilities, and any failure to manage these effectively could lead to operational and financial losses[70]. - Borrowings under the credit facility bear variable interest rates based on SOFR, with a 10% decrease in interest rates not materially affecting financial position or cash flows[186]. - The majority of sales are conducted in U.S. dollars, while significant input costs are in foreign currencies, with no expected material effect on operations due to short inventory turn-time[188]. - Inflation impacts costs of labor, materials, transportation, and overhead, with uncertainty in recovering these costs through future price increases[189].

Financial Data and Key Metrics Changes - Total revenue for Q3 2023 was $261.4 million, a 17% decrease compared to the same period last year, driven by a 33% decrease in average per unit avocado sales prices, partially offset by a 23% increase in avocado volumes sold [12][15] - Adjusted EBITDA was $21.2 million, down from $31.6 million in the same period last year, primarily due to lower per unit margins within the International Farming segment [15][17] - Gross profit decreased by $14.2 million to $28.4 million in Q3 2023, concentrated in the International Farming segment due to lower pricing on avocados sold from company-owned farms [13][17] Business Segment Data and Key Metrics Changes - Marketing and Distribution segment net sales decreased 17% to $256.6 million, while adjusted EBITDA increased 4% to $16.1 million due to lower SG&A expenses [15][16] - International Farming segment revenues were $38.2 million, a 41% decrease compared to the same period last year, with adjusted EBITDA down $11.4 million to $4.9 million [17] - Blueberry segment net sales were $1.4 million, with adjusted EBITDA of $0.2 million, compared to $0.3 million and negative $0.2 million in the same period last year [18] Market Data and Key Metrics Changes - The company experienced a 23% growth in avocado volume during the quarter, reflecting strong performance in key export markets [9] - North American volume increased by 15%, supported by a larger Mexican harvest [15] - The company anticipates exportable volumes from Peru to be in the range of 105 million to 115 million pounds for the 2023 harvest season, a decrease from initial expectations [23] Company Strategy and Development Direction - The company remains focused on maximizing opportunities despite challenges with the Peruvian crop, leveraging its global sourcing capabilities and distribution network [8][10] - A new forward distribution center in the UK opened in April 2023, which is expected to enhance market access and operational efficiency [10] - The company has approved a stock repurchase program of up to $20 million to mitigate the dilutive impact of stock incentive plans [22] Management's Comments on Operating Environment and Future Outlook - Management noted that the industry pricing environment has improved, which is expected to help margins in the fiscal fourth quarter [8][23] - The company is preparing for potentially lower volumes in the fourth quarter due to reduced supply from Peru, but anticipates higher pricing [29][39] - Management acknowledged the impact of weather on production and emphasized the need for strategic adjustments based on data collected during the current season [42][44] Other Important Information - Cash and cash equivalents were $23 million as of July 31, 2023, down from $52.8 million as of October 31, 2022 [18][19] - Capital expenditures for the nine months ended July 31, 2023, were $47 million, with significant investments in avocado orchard maintenance and a new distribution facility in the UK [20][21] Q&A Session Summary Question: Can you discuss trends outside the International Farming segment and expectations for the fourth quarter? - Management highlighted strong volume growth in the Marketing and Distribution segment, driven by increased Mexican fruit availability, and anticipated a slight decrease in overall volume for the fourth quarter [27][29] Question: What is the expected volume split between Q3 and Q4? - Management indicated a shift towards a 45% in Q3 and 55% in Q4 for sell-through, with some potential volume slipping into Q1 fiscal 2024 [37] Question: How does the company expect to perform in line with industry growth in the fourth quarter? - Management expressed confidence in maintaining a significant share of the market despite lower volumes from Peru, leveraging their position in the region [39]

Financial Performance - Net sales decreased by $51.8 million or 17% in the three months ended July 31, 2023, compared to the same period last year, primarily due to a 33% decrease in average per-unit avocado sales prices, partially offset by a 23% increase in avocado volume sold [90]. - For the nine months ended July 31, 2023, net sales decreased by $111.9 million or 14%, attributed mainly to the Marketing and Distribution segment, with a 32% decrease in average per-unit avocado sales prices and a 19% increase in avocado volume sold [91]. - Gross profit for the three months ended July 31, 2023, decreased by $14.2 million or 33% to $28.4 million, with gross profit percentage dropping to 10.9% of revenue [95]. - For the nine months ended July 31, 2023, gross profit decreased by $7.4 million or 12% to $55.5 million, with gross profit percentage increasing to 8.0% of revenue [96]. - Operating income for the three months ended July 31, 2023, was $11.0 million, down from $22.0 million in the same period last year [88]. - Net income attributable to Mission Produce for the three months ended July 31, 2023, was $6.6 million, compared to $18.4 million in the same period last year [88]. - Total net sales for the three months ended July 31, 2023, were $261.4 million, a decrease from $313.2 million in the same period last year [116]. - Adjusted EBITDA for the three months ended July 31, 2023, was $21.2 million, down from $31.6 million in the same period last year [117]. Expenses and Costs - Selling, general and administrative (SG&A) expenses decreased by $3.2 million or 16% in the three months ended July 31, 2023, primarily due to lower employee-related incentive compensation accruals and lower professional fees [98]. - SG&A expenses decreased by $2.2 million or 4% in the nine months ended July 31, 2023, mainly due to lower ERP costs and employee-related incentive compensation [99]. - Interest expense increased by $1.7 million or 113% and $4.8 million or 137% for the three and nine months ended July 31, 2023, respectively, primarily due to rising interest rates and higher average outstanding debt balances [101]. - Other expense increased by $0.2 million or 22% in the three months ended July 31, 2023, primarily due to foreign currency transaction losses [108]. Taxation - The provision for income tax decreased by $3.1 million or 57% and $1.3 million or 35% for the three and nine months ended July 31, 2023, respectively, mainly due to lower pretax income [111]. - The effective tax rate for the three months ended July 31, 2023, was 27.1%, compared to 23.2% in the same period last year [111]. Segment Performance - The Blueberries segment contributed $32.9 million in net sales for the nine months ended July 31, 2023, following its consolidation on May 1, 2022 [84]. - Net sales in the Marketing and Distribution segment decreased by $52.3 million or 17% for the three months ended July 31, 2023, and by $141.2 million or 18% for the nine months ended July 31, 2023, compared to the same periods last year [119]. - Adjusted EBITDA for the International Farming segment decreased by $11.4 million or 70% for the three months ended July 31, 2023, and by $9.1 million or 82% for the nine months ended July 31, 2023, compared to the same periods last year [121]. - Net sales in the Blueberries segment increased by $1.1 million or 367% for the three months ended July 31, 2023, primarily due to an earlier start of the blueberry harvest [122]. - The Blueberries segment's negative adjusted EBITDA of $(0.2) million for the nine months ended July 31, 2023, was primarily due to weak sales prices in the European and U.S. markets [122]. Cash Flow and Investments - Net cash used in operating activities was $7.3 million for the nine months ended July 31, 2023, a decrease of $4.3 million compared to the same period last year [125]. - Capital expenditures for the nine months ended July 31, 2023, were $47.0 million, compared to $42.0 million for the same period in 2022 [126]. - As of July 31, 2023, cash and cash equivalents were $23.0 million, down from $52.8 million as of October 31, 2022 [132]. - The Moruga Blueberry Project is expected to require a total investment of approximately $50 million, with capital expenditures related to the project expected to be around $13.0 million for fiscal 2023 [136]. Financial Ratios - The company had a consolidated leverage ratio of 2.97 to 1.00 and a fixed charge coverage ratio of 1.68 to 1.00 as of July 31, 2023, in compliance with financial covenants [134]. Currency and Exchange Rates - The company’s financial reporting currency is the U.S. dollar, with significant purchases of avocados denominated in Mexican Pesos and costs in Peruvian Soles, but exchange rate fluctuations do not significantly impact gross margin [86].

Mission Produce, Inc. (NASDAQ:AVO) Q2 2023 Earnings Conference Call June 8, 2023 5:00 PM ET Company Participants Jeff Sonnek - Investor Relations Steve Barnard - Chief Executive Officer Bryan Giles - Chief Financial Officer Conference Call Participants Benjamin Bienvenu - Stephens, Inc Tom Palmer - JPMorgan Christian Contreras - Bank of America Operator Good afternoon and welcome to the Mission Produce Fiscal Second Quarter 2023 Conference Call. [Operator Instructions] Please also note today’s event is bein ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 _____________ FORM 10-Q _____________ (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended April 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-39561 _____________ MISSION PRODUCE, INC. (Exact name of Registrant as specified in its charter) __ ...