OXNARD, Calif., June 06, 2024 (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 second quarter ended April 30, 2024.
Fiscal Second Quarter 2024 Financial Overview:
- Total revenue increased 35% to $297.6 million compared to the same period last year driven primarily by a 22% increase in average per-unit avocado selling prices and 8% increase in avocado volume sold
- Net income of $7.0 million, or $0.10 per diluted share, compared to a net loss of $(4.6) million, or $(0.07) per diluted share, for the same period last year
- Adjusted net income of $9.8 million, or $0.14 per diluted share, compared to $0.5 million, or $0.01 per diluted share, for the same period last year
- Adjusted EBITDA of $20.2 million, compared to $7.6 million in the same period last year
- Cash flow from operations for the six months ended April 30, 2024 was $12.9 million, compared to cash used of $(26.1) million in the prior year period.
CEO Message
“We are pleased to deliver a second consecutive quarter of record adjusted EBITDA results, demonstrating continued strong momentum in per-unit margins which resulted in a $12.6 million or 166% improvement in our adjusted EBITDA performance, versus prior year,” commented Steve Barnard, CEO of Mission. “Revenue growth was driven by robust consumer demand for avocados which translated into an 8% increase in avocado volumes sold in our Marketing & Distribution segment and a 22% increase in per-unit sales prices. Results were also supported by our emerging Blueberries segment, where volumes benefited from the harvest season timing that extended into the fiscal second quarter this year. Strong per-unit margins related to avocados in our Marketing & Distribution segment, combined with an overall reduction in corporate expenses and continued implementation of cost savings actions, contributed meaningfully to our improved adjusted EBITDA and cash flow generation.”
Mr. Barnard continued, “Looking to the second half of the year, while El Niño weather conditions had appeared to have eased, we are still seeing its impact on the development of the Peruvian avocado crop for this year, resulting in notable decreases in industry and owned production volumes. In the second quarter, we continued to advance our rigorous cost optimization initiative in Peru and are on track to deliver approximately $10 million of annualized cost savings in Fiscal 2024. We expect these cost optimization initiatives to partially mitigate the impact of the smaller crop and translate into improved operational efficiencies when growing conditions improve. Mission remains in great position with a diversified network of global assets and we expect to utilize the strength of our world-class sourcing team to access other third party fruit to augment the shortages from Peru and meet customer demand during the Mexican low-season.”
Fiscal Second Quarter 2024 Consolidated Financial Review
Total revenue for the second quarter of fiscal 2024 increased $76.5 million or 35% compared to the same period last year, primarily driven by our Marketing and Distribution segment, where average per-unit avocado sales prices increased 22% and avocado volume sold increased 8%. Blueberry revenue also increased $8.3 million compared to the same period last year, to $10.0 million, driven by higher volumes attributed to the timing of the harvest season compared to the same period last year.
Gross profit increased $12.9 million in the second quarter of fiscal 2024, compared to the same period last year, to $31.0 million and gross profit percentage increased 220 basis points, to 10.4% of revenue. The increases were primarily driven by stronger per-unit margins and higher volumes of avocados sold in the Marketing and Distribution segment, and further supported by increased volume sold in the Blueberries segment.
Selling, general and administrative expense (“SG&A”) for the second quarter decreased $0.6 million or 3% compared to the same period last year primarily due to a reduction in general corporate expenses.
Net income for the second quarter of fiscal 2024 was $7.0 million, or $0.10 per diluted share, compared to a net loss of $(4.6) million, or $(0.07) per diluted share, for the same period last year.
Adjusted net income for the second quarter of fiscal 2024 was $9.8 million, or $0.14 per diluted share, compared to $0.5 million, or $0.01 per diluted share, for the same period last year.
Adjusted EBITDA was $20.2 million for the second quarter of fiscal 2024, an increase of $12.6 million as compared to $7.6 million in the prior year period, driven primarily by stronger gross profit performance from the Marketing & Distribution segment.
Fiscal Second Quarter Business Segment Performance
Marketing & Distribution
Net sales in the Marketing & Distribution segment increased 33% to $287.1 million for the quarter, due to a 22% increase in average per-unit avocado sales prices and an 8% increase in avocado volume sold.
Segment adjusted EBITDA increased $13.1 million to $21.7 million, primarily due to the impact of higher per-unit gross margins on avocados sold.
International Farming
Total sales in the International Farming segment for the second quarter of fiscal 2024 were $1.4 million compared to $6.0 million in the prior year period, due to lower third-party avocado packing service revenue associated with the later start of the avocado season in Peru this year.
Segment adjusted EBITDA for the second quarter was $(2.2) million, compared to $(1.1) million for the same period last year, primarily due to lower net sales.
Blueberries
Sales in the Blueberries segment have traditionally been concentrated in the first and fourth quarters of the fiscal year in alignment with the Peruvian blueberry harvest season, which typically runs from July through February.
Net sales in the Blueberries segment increased $8.3 million to $10.0 million, compared to $1.7 million for the prior year period, driven by higher volumes attributed to the timing of the harvest season compared to the same period last year.
Segment adjusted EBITDA increased by $0.6 million to $0.7 million, primarily driven by increased volume sold.
Balance Sheet and Cash Flow
Cash and cash equivalents were $46.2 million as of April 30, 2024, compared to $42.9 million as of October 31, 2023.
The Company’s operating cash flows are seasonal in nature and can be temporarily influenced by working capital shifts resulting from varying payment terms to growers in different source regions. In addition, the Company is building its growing crops inventory in its International Farming segment during the first half of the year for ultimate harvest and sale that will occur during the second half of the fiscal year. While these increases in working capital can cause operating cash flows to be unfavorable in individual quarters, it is not indicative of operating cash performance that management expects to realize for the full year.
Net cash provided by operating activities was $12.9 million for the six months ended April 30, 2024, compared to cash used in operating activities of $26.1 million in the prior year period, driven by improved operating performance and working capital management. Within working capital, favorable changes in grower payables were partially offset by changes in accounts receivable, correlated with the higher avocado pricing and higher volume as previously discussed. Changes in net inventory were consistent with prior year as higher per-unit cost of purchased avocados on-hand was largely offset by lower avocado growing crop inventory in Peru. Also impacting working capital was a net favorable change in accounts payable and accrued expenses and other long-term liabilities, related to the timing of payables and correlated to the later end of the blueberry harvest season.
Capital expenditures were $17.7 million for the six months ended April 30, 2024, compared to $34.9 million for the same period last year. Capital expenditures were comprised primarily of avocado orchard development, pre-production orchard maintenance and land improvements in Guatemala; pre-production avocado orchard maintenance, blueberry land development and plant cultivation, and blueberry cooling facility construction costs in Peru; and distribution facility construction costs in the UK.
Outlook
For the third quarter of fiscal year 2024, the Company is providing the following industry outlooks that will drive performance:
- Warmer temperatures correlated with El Niño have persisted through the development of our 2024 Peruvian avocado crop.
- The Company expects these warmer temperatures to negatively affect harvest yields for the second half of the fiscal year, reducing exportable volumes from owned farms to be more than 50% lower than recent seasons. The Company expects the decrease in volume will negatively impact absorption of fixed costs at its Peruvian farms. Though lower volumes are expected to generally support higher pricing, the Company does not expect higher pricing levels to offset the negative impact of volume decreases on gross profit for the International Farming segment for the fiscal year.
- Overall industry volumes are expected to decline by 10-15% in the fiscal 2024 third quarter versus the prior year period, primarily due to an earlier conclusion to the 2023/2024 Mexican harvest season and a weaker Peruvian harvest outlook.
- Pricing is expected to be relatively flat on a sequential basis, which translates to an increase of approximately 15% on a year-over-year basis as compared to the $1.36 per pound average experienced in third quarter of fiscal 2023.
- Capital expenditures now expected in the range of $40 to $45 million, reflecting an acceleration of planned investment in the Company’s blueberry joint venture to support near-term growth utilizing operating cash flows generated during the strong 2023/2024 harvest season.
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
