Mission(US:AVO)2023-09-10 16:00Financial Performance - Net sales decreased by $51.8 million or 17% in the three months ended July 31, 2023, compared to the same period last year, primarily due to a 33% decrease in average per-unit avocado sales prices, partially offset by a 23% increase in avocado volume sold [90]. - For the nine months ended July 31, 2023, net sales decreased by $111.9 million or 14%, attributed mainly to the Marketing and Distribution segment, with a 32% decrease in average per-unit avocado sales prices and a 19% increase in avocado volume sold [91]. - Gross profit for the three months ended July 31, 2023, decreased by $14.2 million or 33% to $28.4 million, with gross profit percentage dropping to 10.9% of revenue [95]. - For the nine months ended July 31, 2023, gross profit decreased by $7.4 million or 12% to $55.5 million, with gross profit percentage increasing to 8.0% of revenue [96]. - Operating income for the three months ended July 31, 2023, was $11.0 million, down from $22.0 million in the same period last year [88]. - Net income attributable to Mission Produce for the three months ended July 31, 2023, was $6.6 million, compared to $18.4 million in the same period last year [88]. - Total net sales for the three months ended July 31, 2023, were $261.4 million, a decrease from $313.2 million in the same period last year [116]. - Adjusted EBITDA for the three months ended July 31, 2023, was $21.2 million, down from $31.6 million in the same period last year [117]. Expenses and Costs - Selling, general and administrative (SG&A) expenses decreased by $3.2 million or 16% in the three months ended July 31, 2023, primarily due to lower employee-related incentive compensation accruals and lower professional fees [98]. - SG&A expenses decreased by $2.2 million or 4% in the nine months ended July 31, 2023, mainly due to lower ERP costs and employee-related incentive compensation [99]. - Interest expense increased by $1.7 million or 113% and $4.8 million or 137% for the three and nine months ended July 31, 2023, respectively, primarily due to rising interest rates and higher average outstanding debt balances [101]. - Other expense increased by $0.2 million or 22% in the three months ended July 31, 2023, primarily due to foreign currency transaction losses [108]. Taxation - The provision for income tax decreased by $3.1 million or 57% and $1.3 million or 35% for the three and nine months ended July 31, 2023, respectively, mainly due to lower pretax income [111]. - The effective tax rate for the three months ended July 31, 2023, was 27.1%, compared to 23.2% in the same period last year [111]. Segment Performance - The Blueberries segment contributed $32.9 million in net sales for the nine months ended July 31, 2023, following its consolidation on May 1, 2022 [84]. - Net sales in the Marketing and Distribution segment decreased by $52.3 million or 17% for the three months ended July 31, 2023, and by $141.2 million or 18% for the nine months ended July 31, 2023, compared to the same periods last year [119]. - Adjusted EBITDA for the International Farming segment decreased by $11.4 million or 70% for the three months ended July 31, 2023, and by $9.1 million or 82% for the nine months ended July 31, 2023, compared to the same periods last year [121]. - Net sales in the Blueberries segment increased by $1.1 million or 367% for the three months ended July 31, 2023, primarily due to an earlier start of the blueberry harvest [122]. - The Blueberries segment's negative adjusted EBITDA of $(0.2) million for the nine months ended July 31, 2023, was primarily due to weak sales prices in the European and U.S. markets [122]. Cash Flow and Investments - Net cash used in operating activities was $7.3 million for the nine months ended July 31, 2023, a decrease of $4.3 million compared to the same period last year [125]. - Capital expenditures for the nine months ended July 31, 2023, were $47.0 million, compared to $42.0 million for the same period in 2022 [126]. - As of July 31, 2023, cash and cash equivalents were $23.0 million, down from $52.8 million as of October 31, 2022 [132]. - The Moruga Blueberry Project is expected to require a total investment of approximately $50 million, with capital expenditures related to the project expected to be around $13.0 million for fiscal 2023 [136]. Financial Ratios - The company had a consolidated leverage ratio of 2.97 to 1.00 and a fixed charge coverage ratio of 1.68 to 1.00 as of July 31, 2023, in compliance with financial covenants [134]. Currency and Exchange Rates - The company’s financial reporting currency is the U.S. dollar, with significant purchases of avocados denominated in Mexican Pesos and costs in Peruvian Soles, but exchange rate fluctuations do not significantly impact gross margin [86].