Mission(US:AVO)2025-06-05 20:37Financial Performance - Net sales increased by $82.7 million or 28% in the three months ended April 30, 2025, and by $158.2 million or 28% in the six months ended April 30, 2025, primarily driven by the Marketing & Distribution segment [84]. - Total net sales for Q2 2025 were $380.3 million, an increase from $297.6 million in Q2 2024, while total net sales for the first half of 2025 were $714.5 million compared to $556.3 million in the same period last year [108]. - Net sales in the Marketing & Distribution segment increased by $75.4 million or 26% for the three months ended April 30, 2025, compared to the same period last year [114]. - Net sales in the Blueberries segment increased by $5.7 million or 57% for the three months ended April 30, 2025, primarily due to higher volume from increased acreage and yields [118]. Profitability and Expenses - Gross profit decreased by $2.6 million or 8% in the three months ended April 30, 2025, to $28.4 million, with gross profit percentage decreasing to 7.5% of revenue [90]. - SG&A expenses increased by $2.8 million or 15% in the three months ended April 30, 2025, and by $4.3 million or 11% in the six months ended April 30, 2025, primarily due to higher employee-related costs [93]. - Other expense was $0.6 million in Q2 2025 compared to other income of $1.0 million in Q2 2024, driven by foreign currency transaction losses from a weakening U.S. dollar against the Mexican peso [100]. - Total adjusted EBITDA for Q2 2025 was $19.1 million, a decrease from $20.2 million in Q2 2024, while total adjusted EBITDA for the first half of 2025 was $36.8 million compared to $39.4 million in the same period last year [109]. - Marketing & Distribution adjusted EBITDA for Q2 2025 was $16.8 million, down from $21.7 million in Q2 2024, and for the first half of 2025 it was $26.5 million compared to $32.7 million in the same period last year [109]. - Segment adjusted EBITDA for the Blueberries segment decreased by $2.4 million or 26% for the six months ended April 30, 2025, primarily due to lower per-unit margins [121]. International Operations - Gross profit at the International Farming segment increased due to higher pricing and yield from owned mango orchards [91]. - The International Farming segment's sales are concentrated in the second half of the fiscal year, aligning with the Peruvian avocado harvest season [76]. - Adjusted EBITDA for the International Farming segment increased by $3.7 million or 168% for the three months ended April 30, 2025, driven by higher pricing and yield from mango orchards [117]. - Equity method income increased by $0.4 million or 80% in Q2 2025 and by $0.8 million or 89% in the first half of 2025, primarily due to improved margins on fruit sold by Mr. Avocado in China [98]. Cash Flow and Liquidity - Net cash used in operating activities was $13.0 million for the six months ended April 30, 2025, compared to cash provided of $12.9 million in the same period last year, largely due to growth in working capital [123]. - The company’s liquidity includes cash and cash equivalents of $36.7 million as of April 30, 2025, down from $58.0 million as of October 31, 2024 [131]. - Outstanding borrowings on the syndicated debt facility totaled $147.5 million as of April 30, 2025 [136]. - The company was in compliance with all financial covenants of the credit facility as of April 30, 2025 [133]. Taxation and Regulatory Environment - Provision for income taxes decreased by $1.7 million or 50% in Q2 2025 and by $0.6 million or 11% in the first half of 2025, primarily due to lower income before taxes [105]. - The effective tax rate for Q2 2025 was 36.2%, compared to 32.7% in Q2 2024, and for the first half of 2025 it was 34.8% compared to 37.9% in the same period last year [105]. - The company continues to monitor regulatory changes and their impact on pricing strategies due to potential future trade policy changes [77]. Interest and Charges - Interest expense for the period primarily consisted of interest on borrowings under working capital facilities and long-term debt [95]. - Interest expense decreased by $0.9 million or 26% in Q2 2025 compared to Q2 2024, and by $2.0 million or 30% in the first half of 2025 compared to the same period last year, due to lower average balances on the revolving line of credit and lower interest rates [96]. - The company incurred $1.5 million in charges related to the closure of Canadian distribution centers during the first quarter of 2025 [78]. - The company recognized $1.1 million in tariffs on Mexican imports during a brief tariff application period in March 2025 [75].