OXNARD, Calif., Dec. 21, 2023 (GLOBE NEWSWIRE) — Mission Produce, Inc. BB #:118126, a world leader in sourcing, producing, and distributing fresh Hass avocados with additional offerings in mangos and blueberries, today reported its financial results for the fiscal fourth quarter ended October 31, 2023.
Fiscal Fourth Quarter 2023 Financial Overview:
- Total revenue increased 8% to $257.9 million compared to the same period last year driven by a 8% increase in average per-unit avocado selling prices, partially offset by a 4% decrease in avocado volume sold
- Net income of $4.0 million, or $0.06 per diluted share, compared to net loss of $(42.0) million, or $(0.59) per diluted share, for the same period last year, which included a non-cash charge of $49.5 million related to goodwill impairment
- Adjusted net income of $7.5 million, or $0.11 per diluted share, compared to $9.2 million, or $0.13 per diluted share, for the same period last year
- Adjusted EBITDA of $17.3 million, compared to $17.2 million in the period year period
Full Year 2023 Financial Overview:
- Total avocado volume sold increased by 12% to 654.4 million pounds
- Total revenue was $953.9 million compared to $1.05 billion last year; despite volume growth as a result of lower average per-unit avocado sales prices; lower pricing and higher avocado volume sold in the current year were driven by higher industry supply out of Mexico in the current year after experiencing supply limitations in the previous fiscal year
- Net loss of $(2.8) million, or $(0.04) per diluted share, compared to $(34.6) million, or $(0.49) per diluted share last year
Adjusted net income of $13.3 million, or $0.19 per diluted share, compared to $18.5 million, or $0.26 per diluted share last year - Adjusted EBITDA increased 2% to $48.4 million compared to $47.6 million last year
- Owned exportable avocado production volume decreased 9% to 107 million pounds for the 2023 harvest season; volume was negatively impacted by weather-related events in the current year
CEO Message
Steve Barnard, CEO of Mission, commented, “Our fourth quarter results saw improved top and bottom-line performance driven by strength in our Marketing and Distribution segment, further supported by substantial growth in our emerging Blueberries segment. However, continued weather-related challenges in Peru resulted in quality issues towards the latter end of the season and lower than expected volumes, both of which impacted our International Farming segment performance. Because we set our fixed price contracts with customers and market allocation prior to experiencing these weather-related events, we were limited in our ability to generate the seasonal increase in adjusted EBITDA that we would typically expect in the fourth quarter.”
Mr. Barnard continued, “Looking ahead to 2024, we expect to realize improved pricing in our International Farming segment given adjustments we’ve made to our marketing strategy following this past year’s experience, which we believe will create a more constructive backdrop for our International Farming segment performance next year. In the meantime, we remain intensely focused on advancing cost control measures and reallocating resources to maximize efficiency. We believe that with anticipated improvements in operating cash flow and declining capital expenditure needs, we are in a great position to enhance our capital structure in the year ahead. We continue to focus our organization’s efforts on supporting long-term consumption growth trends globally and providing the market with consistent year-round supply of avocados on a global scale— a capability that is unique to Mission Produce. We are also excited about accelerating and advancing our burgeoning mango program and seeing the continued success of our Blueberries segment.”
Fiscal Fourth Quarter 2023 Consolidated Financial Review
Total revenue for the fourth quarter of fiscal 2023 increased $19.9 million or 8% compared to the same period last year driven primarily by higher average per-unit avocado sales prices, partially offset by lower avocado volume sold. Revenue growth was further supported by strong performance in the Company’s Blueberries segment, which increased by 88%.
Gross profit increased $0.9 million in the fourth quarter of fiscal 2023 compared to the same period last year, to $27.8 million and gross profit percentage decreased 50 basis points, to 10.8% of revenue. The Company’s Marketing & Distribution segment experienced 49% growth in gross profit versus the same period last year driven by strong per-unit margins on Mexican and Californian avocados. Gross profit also benefited from higher volumes and elevated pricing within the Blueberries segment. On the contrary, the International Farming segment experienced a significant decline in gross profit due to lower volume and lower pricing on avocados sold from Company-owned farms. The lower volume and pricing conditions were driven by quality issues and a compressed Peruvian harvest season that was brought about by El Niño-related weather events.
Selling, general and administrative expense (“SG&A”) for the fourth quarter increased $1.1 million or 6% compared to the same period last year primarily due to $1.3 million in executive severance charges, a $0.3 million increase in stock-based compensation, and additional labor to support the developing U.K. business. Excluding these items, the Company made progress on its goal to reduce controllable expenses during the fourth quarter.
Net income for the fourth quarter of fiscal 2023 was $4.0 million, or $0.06 per diluted share, compared to net loss of $(42.0) million, or $(0.59) per diluted share, for the same period last year, which included a non-cash charge of $49.5 million related to goodwill impairment within the International Farming segment. Non-operating items also contributed to the year-over-year change in net income and included higher interest expense in the current quarter associated with rising interest rates.
Adjusted net income for the fourth quarter of fiscal 2023 was $7.5 million, or $0.11 per diluted share, compared to $9.2 million, or $0.13 per diluted share, for the same period last year.
Adjusted EBITDA was $17.3 million for the fourth quarter of fiscal 2023, a 1% increase compared to $17.2 million in the period year period, as stronger gross profit performance from the Marketing & Distribution and Blueberries segments was largely offset by lower volumes and pricing within the International Farming segment.
Fiscal Fourth Quarter Business Segment Performance
Marketing & Distribution
Net sales in the Marketing & Distribution segment increased 7% to $236.2 million for the quarter, due to an 8% increase in average per-unit avocado sales prices, partially offset by a 4% decrease in avocado volume sold.
Segment adjusted EBITDA increased $6.8 million or 170% to $10.8 million, primarily due to the impact of higher per-unit gross margins, partially offset by lower avocado volume sold.
International Farming
The vast majority of fruit sales from the International Farming segment are to the Marketing and Distribution segment, with the remainder of revenue largely derived from services provided to third parties and the Blueberries segment. Affiliated sales are concentrated in the second half of the fiscal year in alignment with the Peruvian avocado harvest season, which typically runs from April through September of each year. As a result, adjusted EBITDA for the International Farming segment is generally concentrated in the third and fourth quarters of the fiscal year in alignment with the timing of sales.
Total segment sales in the International Farming segment increased by 1% in the fourth quarter of fiscal 2023 compared to the same period last year. Reported segment sales were distorted by a change in the phasing of segment revenue recognition versus the prior year to align with the timing of avocado sales to customers, which is consistent with the timing of profit recognition, as opposed to the harvest timing in Peru. As such, the reported segment growth is contrary to the fundamental drivers that resulted in a decline of segment sales via a combination of lower avocado volume sold from Company-owned farms and lower realized pricing.
Segment adjusted EBITDA decreased $11.1 million or 91% to $1.1 million, due primarily to lower gross profit resulting from lower volume and lower pricing on avocados sold from Company-owned farms in Peru.
Blueberries
Net sales in the Blueberries segment increased $9.1 million or 88% compared to the same period last year primarily due to higher pricing driven by lower industry supply, as well as a 29% increase in volume due to an earlier harvest start and the commencement of new production of premium varieties.
Segment adjusted EBITDA increased $4.4 million or 440% driven by higher pricing and volume.
Outlook
For the first quarter of fiscal year 2024, the Company is providing the following avocado industry outlook that will drive performance:
Industry volumes are expected to be slightly lower in the fiscal 2024 first quarter versus the prior year period due to expectations for a lighter Mexican harvest resulting at least in part to smaller fruit sizing.
Pricing is expected to be slightly lower on a sequential basis, but higher on a year-over-year basis by approximately 15% compared to the $1.14 per pound average experienced in first quarter of fiscal 2023.
About Mission Produce, Inc.
Mission Produce is a global leader in the worldwide avocado business with additional offerings in mangos and blueberries. Since 1983, Mission Produce has been sourcing, producing and distributing fresh Hass avocados, and currently services retail, wholesale and foodservice customers in over 25 countries. The vertically integrated Company owns and operates four state-of-the-art packing facilities in key growing locations globally, including California, Mexico and Peru and has additional sourcing capabilities in Chile, Colombia, the Dominican Republic, Guatemala, Brazil, Ecuador, South Africa and more, which allow the company to provide a year-round supply of premium fruit. Mission’s global distribution network includes strategically positioned forward distribution centers across key markets throughout North America, China, Europe, and the UK, offering value-added services such as ripening, bagging, custom packing and logistical management. For more information, please visit www.missionproduce.com.
Contacts:
Investor Relations
ICR
Jeff Sonnek
646-277-1263
jeff.sonnek@icrinc.com
Media
Jenna Aguilera
Marketing Communications Manager
Mission Produce, Inc.
press@missionproduce.com
