Mission(AVO) - 2024 Q1 - Quarterly Report

Financial Performance - Net sales increased by $45.2 million or 21$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$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$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$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$20.7 million, mainly due to higher employee-related costs[81]. - Interest expense increased by $0.9 million or 38$3.3 million, primarily due to rising SOFR rates[83]. - Equity method income decreased by $0.6 million or 60$0.4 million, primarily due to weak results at Mr. Avocado[86]. - Other expense, net increased by $0.2 million or 25$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].