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Financial Data and Key Metrics Changes - Fiscal 2025 recorded revenue of $1.39 billion, a 13% increase from the previous year, driven by a 7% volume growth in avocados [7][17] - Fourth quarter revenue totaled $319 million, down 10% year-over-year due to a 27% decrease in average per-unit avocado sales prices [17] - Adjusted net income for the quarter was $22.2 million, or $0.31 per diluted share, compared to $19.6 million, or $0.28 per diluted share last year [18] - Adjusted EBITDA increased 12% to a record $41.4 million compared to $36.9 million last year [19] Business Line Data and Key Metrics Changes - The marketing and distribution segment achieved 7% avocado volume growth for the full year and 13% in the fourth quarter [9][20] - International farming segment sales increased 97% to $59.7 million, with segment-adjusted EBITDA more than tripling to $8.4 million [21] - Blueberry net sales increased 16% to $36.5 million, although segment-adjusted EBITDA decreased due to lower per-unit margins [22] Market Data and Key Metrics Changes - The North American market showed stable growth, while Europe and Asia experienced significant volume growth, with European volume sold increasing by 40% [8][10] - The company's international penetration was bolstered by consistent supply from Peruvian products, allowing for deeper relationships with large retailers [10] Company Strategy and Development Direction - The company is focused on leveraging its integrated global platform to drive growth and enhance free cash flow, with a significant emphasis on international expansion [15][16] - The management transition is seen as a strategic move to capitalize on the company's strong foundation and drive future growth [3][4] - The company aims to increase household penetration of avocados from approximately 70% to 73%-75% over the next couple of years [51][52] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate pricing volatility and supply disruptions, highlighting the team's execution capabilities [9][15] - The outlook for Fiscal 2026 anticipates a 10% increase in avocado industry volumes, although pricing is expected to be lower year-over-year [24] Other Important Information - The company reduced long-term debt by approximately $18 million during Fiscal 2025, resulting in a 25% decline in interest expense [23] - Capital expenditures for the year were $51.4 million, with expectations to decrease to approximately $40 million in Fiscal 2026 [24] Q&A Session Summary Question: Outlook for mangoes and potential growth - Management indicated that the growth trajectory for mangoes will be similar to previous years, focusing on market share penetration and global sourcing initiatives [28][29] Question: Risks in achieving free cash flow growth - Management highlighted strong operating performance as the primary driver of cash flow, with a focus on maintaining flexibility in capital expenditures [30][31] Question: Capital allocation with lower CapEx - The company is prioritizing growth and exploring various opportunities to maximize shareholder value, including potential share buybacks [32][33] Question: Changes in strategy with management transition - Management confirmed that the strategic direction remains consistent, with a focus on growth and capital deployment over the next five to ten years [34][36] Question: Insights on CapEx and growth opportunities - Approximately $20 million of the upcoming $40 million CapEx is expected to be growth-oriented, with investments in both farming operations and commercial expansion [41][42] Question: Household penetration goals for avocados - Management aims to increase household penetration to 73%-75% over the next couple of years, leveraging lower pricing environments to drive consumer engagement [47][52]

Financial Data and Key Metrics Changes - Fiscal 2025 recorded revenue of $1.39 billion, a 13% increase from the previous year, driven by a 7% volume growth in avocados [7][17] - Fourth quarter revenue totaled $319 million, down 10% year-over-year due to a 27% decrease in average per-unit avocado sales prices [17] - Adjusted net income for the quarter was $22.2 million, or $0.31 per diluted share, compared to $19.6 million, or $0.28 per diluted share last year [18] - Adjusted EBITDA increased 12% to a record $41.4 million compared to $36.9 million last year [19] Business Line Data and Key Metrics Changes - Marketing & Distribution segment achieved 7% avocado volume growth for the full year and 13% in the fourth quarter [9][20] - International Farming segment saw total sales increase by 97% to $59.7 million, with segment-adjusted EBITDA more than tripling to $8.4 million [21] - Blueberry segment net sales increased 16% to $36.5 million, although segment-adjusted EBITDA decreased due to lower per-unit margins [22] Market Data and Key Metrics Changes - North American market showed stable growth, while Europe and Asia experienced significant volume growth, with European volume sold increasing by 40% [8][10] - The company capitalized on its Peruvian product leverage to enhance international penetration and build relationships with large retailers [10] Company Strategy and Development Direction - The company is focused on growth, particularly in North America and international markets, with a strong emphasis on increasing household penetration for avocados [15][46] - The leadership transition is seen as a strategic move to continue the company's growth trajectory, with a focus on organic and inorganic opportunities [36][38] - The company plans to reduce capital expenditures to approximately $40 million, marking the end of a heavy capital investment cycle [24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's operational capabilities and the potential for significant growth in the coming years [6][15] - The outlook for fiscal 2026 anticipates a 10% increase in avocado industry volumes, although pricing is expected to be lower year-over-year [25] - Management highlighted the importance of consumer engagement and strategic promotions to drive household penetration during lower pricing environments [50][51] Other Important Information - The company reduced long-term debt by approximately $18 million during Fiscal 2025, resulting in a healthy net leverage ratio well below one times EBITDA [23] - The company is committed to enhancing free cash flow generation in the coming years, supported by a disciplined focus on debt reduction [15][24] Q&A Session Summary Question: Outlook for mangoes and potential growth - Management indicated that the growth trajectory for mangoes will be similar to previous years, focusing on market share penetration and global sourcing initiatives [28][29] Question: Risks in achieving free cash flow growth - Management emphasized strong operating performance as the primary driver of cash flow, with a target of $40 million in capital expenditures for the upcoming year [30][31] Question: Capital allocation with lower CapEx - Management stated that growth remains the priority, with flexibility to explore various options for maximizing shareholder value, including share buybacks [32][33] Question: Changes in strategy with management transition - Management reassured that the strategic direction remains consistent, focusing on growth and capital deployment for the next five to ten years [35][38] Question: Insights on household penetration goals - Management expressed a goal to increase household penetration for avocados to 73%-75% over the next couple of years, leveraging lower pricing environments to drive consumer engagement [48][51]

Financial Data and Key Metrics Changes - Fiscal 2025 recorded revenue of $1.39 billion, a 13% increase from the previous year, driven by a 7% volume growth in avocados [6][17] - Fourth quarter revenue totaled $319 million, down 10% year-over-year due to a 27% decrease in average per-unit avocado sales prices, despite a 13% volume growth [17][19] - Adjusted net income for the quarter was $22.2 million, or $0.31 per diluted share, compared to $19.6 million, or $0.28 per diluted share last year [18] - Adjusted EBITDA increased 12% to a record $41.4 million compared to $36.9 million last year [19] Business Line Data and Key Metrics Changes - The marketing and distribution segment achieved 7% avocado volume growth for the full year and 13% in the fourth quarter [9][20] - International farming segment sales increased 97% to $59.7 million, with segment-adjusted EBITDA more than tripling to $8.4 million [20][21] - Blueberry net sales increased 16% to $36.5 million, but segment-adjusted EBITDA decreased due to lower per-unit margins [22] Market Data and Key Metrics Changes - The North American market showed stable growth, while Europe and Asia experienced significant volume growth, with European volume sold increasing by 40% [8][10] - The company's Peruvian orchards returned to normal growing conditions, doubling exportable avocado production to approximately $105 million [10][11] Company Strategy and Development Direction - The company is focused on leveraging its global sourcing network and distribution infrastructure to drive growth and enhance household penetration in the avocado market [8][15] - There is a strong emphasis on expanding market share in mangoes and blueberries, with a goal to increase consumer awareness and household penetration [12][15] - The company plans to reduce capital expenditures to approximately $40 million for Fiscal 2026, marking the end of a heavy capital investment cycle [24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate pricing volatility and supply disruptions, highlighting the team's execution capabilities [9][15] - The outlook for Fiscal 2026 anticipates a 10% increase in avocado industry volumes, but pricing is expected to be lower year-over-year by approximately 25% [25] - Management aims to achieve household penetration of avocados in the 73%-75% range over the next couple of years, leveraging lower pricing environments to drive consumer engagement [52][53] Other Important Information - A leadership transition was announced, with John Pawlowski set to become CEO, while Steve Barnard will transition to Executive Chairman [3][4] - The company has significantly reduced long-term debt by approximately $18 million during Fiscal 2025, resulting in a healthy net leverage ratio well below one times EBITDA [23] Q&A Session Summary Question: Outlook for mangoes and potential growth - Management indicated that the growth trajectory for mangoes will be similar to previous years, focusing on market share penetration and global sourcing initiatives [27][29] Question: Risks in achieving free cash flow growth - Management highlighted strong operating performance as the primary driver of cash flow, with a target of $40 million in capital expenditures for the upcoming year [30][31] Question: Capital allocation and use of cash going forward - The focus remains on growth opportunities, with flexibility to consider share buybacks and other investments to maximize shareholder value [32][33] Question: Changes in strategy with management transition - Management reassured that the strategic direction remains consistent, with a focus on growth and capital deployment for the next five to ten years [34][38] Question: Insights on household penetration goals for avocados - Management aims to increase household penetration to 73%-75% over the next couple of years, leveraging promotional strategies during lower pricing environments [47][53]

Financial Performance - Total revenue reached $319 million, a 10% year-over-year decrease[2] - Adjusted EBITDA hit a record $41.4 million, up 12% year-over-year[2, 3] - Avocado volume sold increased by 13% year-over-year, reaching 181.5 million pounds[2, 3] - Average selling price decreased by 27% year-over-year to $1.39 per pound[2] Segment Performance - Marketing & Distribution segment adjusted EBITDA increased by 11% due to higher volume[4] - International Farming adjusted EBITDA increased significantly by 211%[4] - Peruvian orchards produced approximately 105 million pounds of exportable avocados, more than double the prior year's production[4] Cash Flow and Capital Expenditure - The company generated $89 million in operating cash flow for the full year[5] - The company generated more than $180 million of operating cash flow over a two-year period[5] - Fiscal year 2026 capital expenditure is expected to decrease to approximately $40 million[5]

Customer Concentration - Sales to the top 10 customers accounted for approximately 67% of net sales for the year ended October 31, 2025, compared to 69% for the year ended October 31, 2024, and 65% for the year ended October 31, 2023[62]. Product Reliance and Risks - The company relies primarily on one main product—avocados—exposing it to concentrated risks related to supply, pricing, and competition[49]. - The ability to generate revenues is limited by the supply of fruit, with potential increases in costs if supply decreases dramatically due to various factors[50]. - Profitability is sensitive to fluctuations in market prices, which are influenced by supply conditions and competition[51]. - The company faces increasing competition, which may adversely affect its operating results if it cannot offer competitive prices or consistent supply[54]. Economic and Regulatory Environment - Economic and political conditions in Mexico, the largest source of avocado supply, may adversely affect the company's operations and financial condition[64]. - The company is subject to various legal and regulatory changes in Mexico that could impact its operations and profitability[65]. - Changes in U.S. trade policy, tariffs, and international trade regulations could negatively impact the company's operating results and market conditions[97][98]. - Compliance with changing USDA and FDA regulations regarding product importation and distribution may adversely affect the company's operations and financial results[95][96]. - The company is subject to value-added taxes (VAT) in various foreign jurisdictions, including Mexico, which may adversely impact future cash flows and pretax earnings due to potential delays or rejections of VAT refund claims[117]. Cost and Supply Chain Challenges - Inflationary pressures and increases in costs of commodities, such as fuel and packaging, could negatively impact operating results[57]. - Supply chain constraints may lead to increased costs and disruptions, adversely affecting the company's financial results[70]. - The company has experienced increases in transportation costs and labor shortages, which could result in delays in customer shipments and negatively impact sales[73]. - Seasonal factors, such as the availability and quality of fruit, may cause revenue and operating results to vary significantly[80]. Climate and Environmental Risks - Climate change poses risks to farming operations, including adverse weather conditions that could impact costs and product supply[75]. - Legal and regulatory pressures related to climate change may impose additional costs and operational restrictions on the company[78]. - Environmental regulations regarding the use of agricultural products could lead to significant compliance costs and impact the company's financial position[101]. Legal and Compliance Issues - The company is involved in various legal proceedings that could result in substantial monetary damages and affect its reputation[107]. - The company incurs significant costs as a public entity due to compliance with legal and regulatory requirements, which may divert management's attention from core business operations[125]. - Compliance with evolving data privacy laws may require significant resources and could result in fines or reputational harm if not adhered to[91]. Financial Performance and Market Conditions - General economic conditions or downturns could reduce consumer spending and demand for the company's products, adversely affecting financial results[69]. - The company's financial results are significantly affected by fluctuations in fruit pricing and crop sizes, which may limit the ability to accurately forecast future performance[119]. - The trading price of the company's common stock has been highly volatile, influenced by market conditions that may not correlate with the company's operational performance[122]. Corporate Governance and Control - Approximately 33% of the company's outstanding common stock is owned by executive officers and directors, allowing them to control significant corporate matters, which may impede changes in management or business strategy[123]. - Provisions in the company's charter may discourage favorable takeovers and limit stockholder influence over management decisions[131]. - The approval of at least two-thirds of the shares entitled to vote is required for adopting, amending, or repealing bylaws, which may deter potential acquirers[139]. Financial Management and Capital Structure - The company is subject to restrictive covenants under its credit facility, which may limit flexibility in funding operations and strategic initiatives[137]. - Compliance with financial covenants is based on operating results, and economic downturns could adversely impact business and capital deployment[140]. - A 10% increase or decrease in interest rates on long-term debt would not materially affect the financial position or cash flows[253]. - The majority of sales are in U.S. dollars, while input costs are in foreign currencies, but this is not expected to materially affect operations due to short inventory turn-time[254]. - Inflation increases costs of labor, materials, and transportation, and the company cannot estimate the ability to recover these costs through price increases[255]. Strategic Opportunities - The company is exploring acquisition opportunities, which may involve risks such as integration challenges and increased debt, potentially affecting financial performance[104]. Operational Risks - The company faces potential material adverse effects on its business due to product recalls and liability claims related to consumer injuries or illnesses[94]. - The company faces cybersecurity risks that could disrupt operations and adversely affect revenue and reputation[81]. - The company may face challenges in managing third-party service providers, which could lead to additional costs and business disruptions[86]. - The company relies on key personnel for effective operations, and failure to attract or retain them may adversely affect business strategy and financial condition[74]. - The company's infrastructure must maintain sufficient capacity to meet business needs; failures could adversely impact operations and financial condition[105].

Revenue Performance - Achieved record full year revenue of $1.39 billion, an increase of 13% year-over-year, driven by strong execution in Marketing & Distribution and significantly higher yields from owned Peruvian orchards[1] - Total net sales for the twelve months ended October 31, 2025, reached $1,391.2 million, compared to $1,234.7 million in 2024, reflecting an increase of 12.7%[58] - Total sales in the International Farming segment for the fourth quarter increased 97% to $59.6 million compared to $30.3 million for the same period last year[15] - Total segment sales for the three months ended October 31, 2025, were $368.0 million, slightly down from $381.5 million in 2024, a decrease of 3.5%[58] Profitability Metrics - Adjusted net income for the fourth quarter increased 13% to $22.2 million, or $0.31 per diluted share, compared to $19.6 million, or $0.28 per diluted share, for the same period last year[10] - Adjusted EBITDA increased 12% to $41.4 million for the fourth quarter, driven primarily by increased owned avocado production in the International Farming segment[11] - Adjusted net income for the twelve months ended October 31, 2025, was $56.2 million, up 6.4% from $52.8 million in 2024[42] - Total adjusted EBITDA for the three months ended October 31, 2025, was $41.4 million, an increase from $36.9 million in the same period of 2024, representing a growth of 12.1%[49] Cash Flow and Capital Expenditures - Generated nearly $180 million in cash flow from operations over the past two years; capital expenditures expected to step down to approximately $40 million in FY26[1] - Capital expenditures for the year ended October 31, 2025, were $51.4 million, primarily for avocado orchard development and packhouse construction in Guatemala[21] - Net cash provided by operating activities was $88.6 million, compared to $93.4 million in the previous year, reflecting a decline of 5.1%[37] - The company experienced a net cash used in investing activities of $51.9 million, compared to $33.5 million in the previous year, indicating increased investment outflows[37] Asset and Liability Management - Total assets as of October 31, 2025, were $983.0 million, an increase from $971.5 million as of October 31, 2024[33] - Total liabilities decreased to $363.1 million as of October 31, 2025, from $394.4 million in 2024, marking a reduction of approximately 7.9%[33] - Cash and cash equivalents increased to $64.8 million as of October 31, 2025, compared to $58.0 million in 2024, reflecting a growth of 12.1%[33] - The company’s equity increased to $619.9 million as of October 31, 2025, up from $577.1 million in 2024, representing a growth of 7.4%[33] Sales and Pricing Trends - Owned exportable avocado production volume sold increased approximately 144% to 105 million pounds for the 2025 harvest season[5] - For the first quarter of fiscal year 2026, avocado industry volumes are expected to increase by approximately 10% versus the prior year period[25] - Pricing for the first quarter of fiscal 2026 is expected to be lower by approximately 25% compared to the $1.75 per pound average experienced in the first quarter of fiscal 2025[25] - Average sales price per pound of avocados decreased to $1.39 in the three months ended October 31, 2025, from $1.90 in 2024, a decline of 26.8%[59] Income and Expense Analysis - Net income for the year ended October 31, 2025, was $40.5 million, a decrease of 3.1% from $41.8 million in 2024[37] - Net income attributable to Mission Produce for the three months ended October 31, 2025, was $16.0 million, down from $17.3 million in 2024, reflecting a decrease of 7.5%[35] - The company reported a net income of $16.8 million for the three months ended October 31, 2025, down from $20.7 million in 2024, a decline of 18.9%[49] - Stock-based compensation increased to $8.8 million for the year ended October 31, 2025, compared to $7.1 million in 2024, reflecting a rise of 24.1%[42] Foreign Currency and Debt Management - The company reported unrealized losses on foreign currency transactions of $1.0 million for the year, compared to gains of $1.7 million in the previous year[37] - Principal payments on long-term debt obligations were $3.0 million, slightly down from $3.4 million in 2024[37]

Core Insights - Mission Produce achieved record full year revenue of $1.39 billion, a 13% increase year-over-year, driven by strong performance in Marketing & Distribution and higher yields from Peruvian orchards in International Farming [1][4] - The company generated nearly $180 million in cash flow from operations over the past two years, with capital expenditures expected to decrease to approximately $40 million in FY26 as it enters a phase of accelerated free cash flow generation [1][6] - A leadership succession plan was announced, with Founder & CEO Steve Barnard transitioning to Executive Chairman and John Pawlowski assuming the CEO role in April 2026 [1] Fiscal Fourth Quarter 2025 Financial Overview - Total revenue for Q4 2025 was $319.0 million, a decrease of 10% compared to the same period last year, primarily due to a 27% decrease in average per-unit avocado sales prices, partially offset by a 13% increase in avocado volume sold [6][11] - Net income attributable to Mission Produce for Q4 was $16.0 million, or $0.22 per diluted share, compared to $17.3 million, or $0.24 per diluted share, for the same period last year [9][35] - Adjusted EBITDA for Q4 increased 12% to $41.4 million, driven by increased avocado production in the International Farming segment and higher volume sold in Marketing & Distribution [10][41] Full Year 2025 Financial Overview - Full year revenue reached $1.39 billion, with a volume growth of 7% compared to the previous year [5] - Net income attributable to Mission Produce increased 3% to $37.7 million, or $0.53 per diluted share [5] - Adjusted net income for the year increased 6% to $56.2 million, or $0.79 per diluted share [5] Segment Performance Marketing & Distribution - Net sales decreased 15% to $271.9 million for Q4, driven by avocado volume and pricing dynamics [11] - Segment operating income increased 9% to $20.3 million, attributed to higher avocado volume sold [12] International Farming - Total sales in the International Farming segment for Q4 increased 97% to $59.6 million, with adjusted EBITDA rising 211% to $8.4 million [14] - The increase was driven by higher yields from owned avocado orchards and increased packing and cooling services provided to third parties [14] Blueberries - Sales in the Blueberries segment increased 16% to $36.5 million for Q4, primarily due to higher volume produced on owned farms [16] - Segment operating income was $4.9 million for Q4, down from $11.6 million in the same period last year due to higher unit costs [17] Balance Sheet and Cash Flow - Cash and cash equivalents as of October 31, 2025, were $64.8 million, up from $58.0 million a year earlier [18] - Net cash provided by operating activities for the year was $88.6 million, compared to $93.4 million last year [19] - Capital expenditures for the year were $51.4 million, primarily for avocado orchard development and packhouse construction [20] Outlook - For Q1 FY26, avocado industry volumes are expected to increase by approximately 10%, driven by a larger Mexican crop [24] - Pricing is anticipated to be lower year-over-year by about 25% compared to the previous year's average [24] - Total capital expenditure for FY26 is expected to be approximately $40 million [24]

Leadership Transition - Mission Produce announced that John Pawlowski will become CEO effective at the close of the Annual Meeting of Shareholders in April 2026, succeeding co-founder Steve Barnard, who will transition to Executive Chairman of the Board [1][2] - Steve Barnard has been with the company since its founding in 1983 and has served as CEO since 1988, highlighting the company's growth and operational success under his leadership [2][3] Financial Performance - The company has experienced exceptional financial performance over the past two years, completing a significant capital expenditure cycle and enhancing cash flow generation [2][3] - Mission Produce is well-positioned for future growth, with investments in growing operations and distribution infrastructure creating competitive advantages [3] Board Refreshment Initiative - Mission Produce is undergoing a strategic Board refreshment initiative, adding three new independent directors with expertise in finance, food and beverage operations, and agribusiness [4][5] - The Board is preparing for the retirement of long-time Board Chair Stephen Beebe and Board member Bonnie Lind, with Linda Segre appointed as the new Lead Independent Director [4][5] New Board Members - Michael Sims, Laura Flanagan, and Douglas Stone have been appointed as new independent directors, bringing extensive experience in the food and agribusiness sectors [9] - Sims will assume the role of Chair of the Audit Committee, Flanagan will chair the Nominating and Corporate Governance Committee, and Stone will serve on the Compensation Committee [9]

Core Insights - Mission Produce, Inc. (AVO) is experiencing a short-term increase in avocado supply from Mexico, its primary sourcing region, due to improved harvests and favorable weather conditions [1][4] - The company is optimizing its sourcing mix with robust production from Peru and Mexico, enhancing its pricing flexibility and financial consistency [1][4] - AVO is effectively managing seasonal dynamics in Mexico while maintaining strong customer relationships and service levels [2] Supply and Demand Dynamics - Management anticipates a 15% year-over-year increase in industry volumes for Q4, driven by ample Peruvian supply and a new Mexican crop expected to exceed last year's levels [3][9] - The current supply boost allows AVO to better meet demand and strengthen its market presence [4] Competitive Landscape - Key competitors include Corteva, Inc. (CTVA) and Adecoagro S.A. (AGRO), both of which are enhancing their positions through innovation and operational efficiency [5][6][7] Financial Performance - AVO shares have increased by 5.9% over the past six months, contrasting with a 10.4% decline in the industry [8] - The company trades at a forward price-to-earnings ratio of 32.85X, significantly higher than the industry average of 12.39X [10] - Zacks Consensus Estimates indicate a decline in earnings per share (EPS) of 9.5% for fiscal 2025 and 28.4% for fiscal 2026, with stable estimates over the past 30 days [11]