Mission(US:AVO)2022-03-09 16:00Financial Performance - Net sales increased by $43.4 million or 25% in the three months ended January 31, 2022, compared to the same period last year, driven by a 50% increase in average per-unit avocado sales prices [71]. - Gross profit decreased by 98% to $0.5 million in the three months ended January 31, 2022, primarily due to operational challenges from the ERP implementation [75]. - The company reported a net loss of $13.4 million for the three months ended January 31, 2022, compared to a net income of $2.2 million for the same period last year [69]. - Total net sales for the three months ended January 31, 2022, were $216.6 million, an increase of $43.4 million or 25% compared to $173.2 million in the same period last year [88]. - Adjusted EBITDA for the Marketing and Distribution segment was $(7.7) million for the three months ended January 31, 2022, down from $13.7 million in the same period last year, reflecting a decrease of $21.4 million [89]. - The total adjusted EBITDA for the reportable segments was $(10.4) million for the three months ended January 31, 2022, compared to $12.5 million in the same period last year, a decrease of $22.9 million [89]. Expenses and Costs - Selling, general and administrative expenses rose by $4.1 million or 28% in the three months ended January 31, 2022, mainly due to costs associated with the ERP system implementation [76]. - The effective tax rate for the three months ended January 31, 2022 was 15.7%, compared to 76.8% for the same period last year, attributed to pre-tax losses recorded during the period [84]. - Equity method income decreased by $0.7 million or 30% in the three months ended January 31, 2022, due to lower earnings from Moruga [78]. - Other income increased by $1.6 million in the three months ended January 31, 2022, primarily due to gains on interest rate swaps and foreign currency transactions [81]. Cash Flow and Liquidity - Net cash used in operating activities was $(41.4) million for the three months ended January 31, 2022, an increase of $31.7 million compared to $(9.7) million in the same period last year [94]. - As of January 31, 2022, cash and cash equivalents were $25.3 million, down from $84.5 million as of October 31, 2021 [100]. - Undiscounted cash liabilities for operating leases were $73.6 million as of January 31, 2022 [104]. Capital Expenditures and Investments - Capital expenditures for the three months ended January 31, 2022, were $20.9 million, compared to $22.4 million in the same period last year [95]. - The company has various capital projects in progress for farming expansion and facility improvements, with expected capital expenditures similar to recent fiscal years [103]. Segment Performance - The International Farming segment generated $4.3 million in net sales for the three months ended January 31, 2022, up from $3.6 million in the same period last year [71]. - Net sales in the International Farming segment increased by $0.7 million or 19% to $4.3 million for the three months ended January 31, 2022, driven by higher third-party service revenue [91]. Operational Challenges - The company faced a significant reliance on third-party fruit and packaged fruit, which have higher price points, due to inventory management problems during the ERP implementation [75]. - The company’s financial reporting currency is the U.S. dollar, with a significant portion of avocado purchases denominated in Mexican Pesos and growing costs in Peruvian Soles [67]. - The consolidated leverage ratio as of January 31, 2022, was 2.47 to 1.00, in compliance with the required maximum of 2.75 to 1.00 [102].