Earning Date, Transcript Summary & Report

Record First Quarter Revenue: Mission Produce, Inc. achieved record first quarter revenue of $334.2 million, a 29% increase compared to the same period last year, demonstrating strong performance despite industry supply challenges.

Marketing Segment Growth: The Marketing and Distribution segment saw a 32% growth, driven by a 5% increase in avocado volumes sold and a 25% increase in per unit avocado selling prices.

Blueberry Segment Revenue Increase: The Blueberry segment contributed positively with a 12% increase in revenue to $36.4 million, supported by increased acreage and consumer demand for healthy snacks.

International Farming Performance Improvement: The International Farming segment showed improved performance with adjusted EBITDA increasing by $2.3 million year-over-year to positive $1.8 million, reflecting operational efficiency and better utilization of assets.

Strategic Expansion in Produce: The company is strategically expanding its footprint in Blueberries and Mangos, positioning itself well in high-growth categories with increasing consumer demand.

Diversified Sourcing Strategy: Mission Produce's diversified sourcing strategy across multiple geographies ensures reliable year-round supply, enhancing operational resilience and flexibility.

Adjusted Net Income Increase: The company reported adjusted net income of $7.1 million or $0.10 per diluted share, an increase from $6.7 million or $0.09 per diluted share in the prior year, indicating improved financial performance.

Operational Excellence Focus: Despite some normalization of per unit avocado margins, the company remains focused on operational excellence and strategic growth initiatives to deliver long-term value to shareholders.

Avocado Margin Normalization: Normalization of per unit avocado margins during the first quarter, driven by unstable industry supply in Mexico, necessitating increased procurement through co-packers and spot market purchases.

Decline in Gross Profit: Lower gross profit in the Marketing & Distribution segment due to lower per unit margins on fruit sold and costs associated with Canadian facility closures.

Gross Profit Margin Decline: Gross profit margin decreased 170 basis points to 9.4% of revenue, indicating a decline in profitability.

SG&A Expense Increase: SG&A expense increased by $1.5 million or 7% compared to the same period last year, primarily due to higher employee-related costs.

EBITDA Decline Analysis: Adjusted EBITDA decreased to $17.7 million compared to $19.2 million last year, primarily due to lower per unit gross margins on fruit sold in the Marketing & Distribution and Blueberry segments.

Avocado Margin Challenges: Per unit margins on avocado sold were negatively impacted by challenges in obtaining Mexican supply required to meet customer commitments during the quarter.

Operating Cash Flow Decline: Cash used in operating activities was $1.2 million for the first quarter, compared to cash provided by operating activities of $9.5 million for the same period last year, indicating a significant cash flow issue.

Growing Crops Inventory Strain: Increased productive acreage in International Farming and Blueberry segments led to further increases in growing crops inventory, which could strain working capital.

Increased Capital Expenditures: Projected capital expenditures for fiscal 2025 are approximately $10 million higher than expected due to delays in vendor payments and blueberry plant development, indicating potential financial strain.