Mission(US:AVO)2022-06-07 16:00Financial Performance - Net sales increased by $43.4 million or 18% in the three months ended April 30, 2022, and by $86.8 million or 21% in the six months ended April 30, 2022, compared to the same periods last year [76]. - Gross profit decreased by $7.3 million or 27% in the three months ended April 30, 2022, and by $29.5 million or 59% in the six months ended April 30, 2022, compared to the same periods last year [81][82]. - The operating income for the three months ended April 30, 2022, was $1.1 million, a decrease from $10.8 million in the same period last year [74]. - The net income for the three months ended April 30, 2022, was $2.4 million, down from $7.4 million in the same period last year [74]. - For the six months ended April 30, 2022, the company reported a net loss of $11.0 million compared to a net income of $9.6 million for the same period in 2021 [104]. Sales and Revenue - Average per-unit avocado sales prices increased by 44% and 46% in the three and six months ended April 30, 2022, respectively, due to lower industry supply from Mexico and inflationary pressures [76]. - Net sales in the Marketing and Distribution segment increased by $41.3 million or 18% in the three months ended April 30, 2022, compared to the same period last year [99]. - Net sales in the International Farming segment increased by $2.1 million or 91% in the three months ended April 30, 2022, compared to the same period last year, due to higher service revenue and mango harvest volumes [101]. - Total net sales for the six months ended April 30, 2022 were $494.7 million, compared to $407.9 million in the same period last year [97]. Expenses and Costs - Selling, general and administrative expenses increased by $2.4 million or 15% in the three months ended April 30, 2022, and by $6.5 million or 21% in the six months ended April 30, 2022, compared to the same periods last year [83][84]. - Interest expense increased by $0.3 million or 37.5% in the three months ended April 30, 2022, and by $0.3 million or 17.6% in the six months ended April 30, 2022, compared to the same periods last year [85]. - Adjusted EBITDA for the Marketing and Distribution segment decreased by $4.5 million or 28% in the three months ended April 30, 2022, primarily due to lower avocado volume sold and higher expenses [99]. - Adjusted EBITDA for the International Farming segment was $(2.5) million in the three months ended April 30, 2022, compared to $0.1 million in the same period last year, primarily due to early-stage mango farm costs [101]. Tax and Income - The provision for income taxes decreased by $1.3 million or 62% in the three months ended April 30, 2022, primarily due to lower pre-tax income [93]. - The effective tax rate for the six months ended April 30, 2022 was 13.4%, a decrease from 49.5% in the same period last year [93]. Cash Flow and Investments - Net cash used in operating activities increased by $16.8 million for the six months ended April 30, 2022, reflecting a net loss, partially offset by favorable changes in working capital [103]. - Net cash used in operating activities was $37.0 million, an increase from $20.2 million in the prior year [104]. - The company reported net cash used in investing activities of $25.8 million, down from $45.0 million in the previous year [105]. - As of April 30, 2022, cash and cash equivalents were $21.4 million, a decrease from $84.5 million as of October 31, 2021 [110]. Capital Expenditures and Financing - Capital expenditures for the six months ended April 30, 2022, were primarily focused on purchasing farmland in Peru and land improvements in Peru and Guatemala [106]. - The company has a revolving credit facility with a maximum borrowing capacity of $100 million, with no outstanding borrowings as of April 30, 2022 [111]. - The consolidated leverage ratio as of April 30, 2022, was 2.56 to 1.00, in compliance with the required maximum of 3.75 to 1.00 [113]. - The company made capital contributions to joint ventures to support farmland purchases in Colombia and a new distribution facility in southern China [107]. - The company expects to fund various capital projects through operating cash flow and cash equivalents, with no significant deviation from previous fiscal years' expenditures [114]. - As of April 30, 2022, remaining maturities on term loans and notes amounted to $159.9 million [114]. Other Income - Other income increased to $2.9 million in the three months ended April 30, 2022, compared to an expense of $0.3 million in the same period last year, driven by gains on interest rate swaps and lower foreign currency transaction losses [90]. - Equity method income for the three months ended April 30, 2022 was $0.3 million, a recovery from a loss of $0.2 million in the same period last year, primarily due to higher earnings from HAC [88]. ERP System Improvement - The company continues to work with a third-party implementation firm to improve the ERP system, which had previously impacted profitability and financial results [70].