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01/10 05:46
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call summary shows mixed results: strong revenue growth but decreased margins and increased SG&A expenses. The Q&A highlights uncertainties in supply chain and working capital issues, but management expects improvements in the latter half of the fiscal year. The lack of a share repurchase program and unclear guidance further contribute to a neutral outlook. Given these factors, along with no market cap information, the stock price reaction is likely to be within the neutral range (-2% to 2%) over the next two weeks.
Total Revenue $334.2 million, a 29% increase year-over-year, driven by growth in the Marketing & Distribution segment with a 25% increase in per unit avocado selling prices and a 5% increase in avocado volumes sold.
Gross Profit $31.5 million, an increase of $2.8 million year-over-year, driven by the International Farming segment's increased packing and cooling service activity correlated with higher blueberry production volumes.
Gross Profit Margin 9.4% of revenue, a decrease of 170 basis points year-over-year, due to lower per unit margins on fruit sold and costs associated with Canadian facility closures.
SG&A Expense $1.5 million increase or 7% year-over-year, primarily due to higher employee-related costs, including statutory profit sharing and stock-based compensation.
Adjusted Net Income $7.1 million or $0.10 per diluted share, compared to $6.7 million or $0.09 per diluted share last year, driven by improved non-operating results including reduced interest expense and increased equity income.
Adjusted EBITDA $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.
Marketing & Distribution Segment Net Sales $295.8 million, a 32% increase year-over-year, driven by avocado pricing and volume dynamics.
Marketing & Distribution Segment Adjusted EBITDA $9.7 million, compared to $11 million in the same period last year, due to lower gross profit driven by lower per unit gross margins on fruits sold.
International Farming Segment Sales $9.2 million, a 59% increase year-over-year, driven by higher blueberry packing and cooling service revenues.
International Farming Segment Adjusted EBITDA $1.8 million, an increase of $2.3 million year-over-year, compared to negative $0.5 million last year, resulting from higher blueberry packing and cooling service revenues.
Blueberry Segment Net Sales $36.4 million, a 12% increase year-over-year, driven by a 70% increase in blueberry volumes sold, partially offset by a 33% decrease in average per unit selling prices.
Blueberry Segment Adjusted EBITDA $6.2 million, compared to $8.7 million in the prior year period, primarily due to lower selling prices impacting per unit gross margins.
Cash and Cash Equivalents $40.1 million as of January 31, 2025.
Cash Used in Operating Activities $1.2 million for the first quarter, compared to cash provided by operating activities of $9.5 million for the same period last year, hindered by higher per unit price points.
Capital Expenditures $14.8 million for the three months ended January 31, 2025, compared to $9.9 million last year, attributed to avocado and blueberry farming-related investments.
Blueberry Segment Growth: The Blueberry segment contributed a 12% increase in revenue to $36.4 million, with over 100 hectares of new plantings coming online, growing the total footprint to over 550 hectares.
Mango Program Expansion: The Mango program is expanding, with efforts to enhance customer relationships and leverage packing and distribution infrastructure to grow market share.
Revenue Growth: First quarter revenue reached $334.2 million, a 29% increase compared to the same period last year, driven by strong avocado sales and pricing.
Avocado Pricing and Volume: Average per unit avocado selling prices increased by 25% on a 5% increase in avocado volumes sold.
Operational Efficiency: Canadian facility closures were part of an effort to optimize distribution and enhance operational efficiency.
Utilization of Peru Packing Facility: Improved utilization of the Peru packing facility for Blueberries during a traditionally slower period.
Diversification Strategy: The company is diversifying its sourcing footprint and expanding into complementary food categories like Blueberries and Mangoes to mitigate supply chain risks.
Capital Expenditure Plans: Projected capital expenditures for fiscal 2025 remain at $50 million to $55 million, focusing on avocado and blueberry farming investments.
Supply Chain Challenges: The company faced industry supply challenges in Mexico during a period of strong consumption, necessitating increased procurement through co-packers and spot market purchases to maintain service levels.
Per Unit Margin Compression: Normalization of per unit avocado margins was anticipated due to unstable industry supply in Mexico, impacting profitability.
Canadian Facility Closures: Closure of Canadian facilities during the quarter was part of an effort to optimize distribution, which may have short-term impacts on operational efficiency.
Tariff Negotiations: There is uncertainty surrounding tariff negotiations with North American neighbors, which could impact operations and financial performance.
Economic Factors: The company noted broader impacts from inflation that consumers continue to absorb, which may affect demand and pricing.
Working Capital Position: Higher per unit price points negatively affected accounts receivable and inventory balances, complicating the working capital growth typical in the first quarter.
Capital Expenditures: Projected capital expenditures for fiscal 2025 are higher than expected due to delays in vendor payments and blueberry plant development.
Revenue Growth: Achieved record first quarter revenue of $334.2 million, a 29% increase compared to the same period last year.
Blueberry Segment Expansion: Investing in Blueberries with over 100 hectares of new plantings, growing total footprint to over 550 hectares.
Mango Program Development: Expanding footprint in the mango category, enhancing customer relationships and leveraging packing and distribution infrastructure.
Operational Efficiency: Canadian facility closures aimed at optimizing distribution footprint in North America.
Diversification Strategy: Expanding global sourcing footprint and shifting into complementary food categories like Blueberries and Mangoes.
International Farming Segment: Improved adjusted EBITDA for the segment by $2.3 million year-over-year to positive $1.8 million.
Capital Expenditures: Projected CapEx budget for fiscal 2025 remains unchanged at $50 million to $55 million.
Avocado Pricing Outlook: Pricing expected to be higher on a year-over-year basis by approximately 5% in fiscal 2025 second quarter.
Blueberry Volume Expectations: Volumes sold expected to increase by approximately 35% to 40% in the fiscal second quarter.
CapEx Budget: CapEx budget for fiscal 2025 remains at $50 million to $55 million.
Cash Flow and Debt Paydown: Focus on generating meaningful free cash flow with debt paydown as a near-term priority.
Share Repurchase Program: None
The earnings call highlights record revenue and EBITDA growth, strong cash flow, and debt reduction, indicating robust financial health. Despite lower avocado prices, volume growth and margin improvements are positive signs. The Q&A reveals optimism about mango growth and strategic flexibility, though some responses lacked clarity. Overall, the positive financial performance and strategic focus on growth and market expansion suggest a likely positive stock price movement.
The company reported strong financial performance, with a 22% increase in gross profit and record sales in key segments. Despite increased SG&A expenses, the overall financial health is robust with a significant rise in adjusted net income. The Q&A session revealed stable tariff impacts and promising international market strategies, although some management responses were vague. The positive outlook is reinforced by optimistic guidance in blueberry acreage expansion and strategic global sourcing. Given the absence of negative critical factors, the stock price is likely to experience a positive movement in the next two weeks.
The earnings call summary shows mixed results: strong revenue growth but decreased margins and increased SG&A expenses. The Q&A highlights uncertainties in supply chain and working capital issues, but management expects improvements in the latter half of the fiscal year. The lack of a share repurchase program and unclear guidance further contribute to a neutral outlook. Given these factors, along with no market cap information, the stock price reaction is likely to be within the neutral range (-2% to 2%) over the next two weeks.
The earnings call presents a mixed picture. Positive aspects include a 29% revenue increase and strategic investments in Guatemala. However, concerns arise from declining margins, operational risks, and economic uncertainties. The Q&A reveals management's lack of clarity on co-packer reliance and working capital, adding to uncertainty. The absence of a share repurchase program and increased expenses further balance out the positives, leading to a neutral sentiment.
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