Mission(US:AVO)2025-03-10 22:02Financial Data and Key Metrics Changes - The company achieved record first quarter revenue of $334.2 million, a 29% increase compared to the same period last year [5][13] - Gross profit increased by $2.8 million to $31.5 million, although gross profit margin decreased by 170 basis points to 9.4% of revenue [13][15] - Adjusted net income for the quarter was $7.1 million or $0.10 per diluted share, compared to $6.7 million or $0.09 per diluted share last year [15] Business Line Data and Key Metrics Changes - The Marketing and Distribution segment net sales increased 32% to $295.8 million, driven by a 25% increase in per unit avocado selling prices and a 5% increase in avocado volume sold [5][16] - The International Farming segment sales increased 59% to $9.2 million, with adjusted EBITDA improving to $1.8 million from a loss of $0.5 million in the prior year [17] - The blueberry segment saw a 12% increase in revenue to $36.4 million, driven by a 70% increase in volumes sold, although average per unit selling prices decreased by 33% [18] Market Data and Key Metrics Changes - The company faced industry supply challenges in Mexico, impacting avocado supply and necessitating increased procurement through co-packers and spot market purchases [5][8] - The company expects industry volumes in the second quarter of fiscal 2025 to be consistent with the prior year, with pricing expected to be higher by approximately 5% [20] Company Strategy and Development Direction - The company is strategically diversifying its sourcing footprint to include key growing regions such as Peru, Colombia, and Guatemala to ensure reliable year-round supply [9][10] - The company is expanding its blueberry and mango segments, investing in new plantings and premium varietals to capitalize on growing consumer demand for healthy snacks [6][8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating supply challenges and highlighted the importance of their diversified business model [9][11] - The company remains optimistic about future opportunities and is focused on operational excellence and prudent capital allocation [11][12] Other Important Information - Cash and cash equivalents were $40.1 million as of January 31, 2025, with capital expenditures of $14.8 million for the quarter [19] - The company anticipates a normal seasonal unwinding of working capital strains in the second half of the fiscal year [31][32] Q&A Session Summary Question: Can you elaborate on sourcing from co-packers? - Management noted that sourcing from co-packers was higher than typical due to a slight decrease in the overall crop in Mexico, but they expect to secure more direct inventory soon [24][25][26] Question: What is the visibility on unwinding working capital? - Management indicated that working capital strains are normal for the first half of the fiscal year and expect to unwind in the second half as they transition to harvesting their own fruit [31][32] Question: Have you observed changes in supplier behavior due to tariffs? - Management observed more supplier conversations leading up to the March tariff announcement, but overall supply remained consistent and they were able to meet customer requirements [34][35]