Mission(US:AVO)2025-09-08 22:02Financial Data and Key Metrics Changes - The company reported record third-quarter revenue of $357 million, an increase of 10% year-over-year, driven by strong execution across its business [3][13] - Gross profit increased by $8.1 million, or 22%, to $45.1 million, with a gross profit margin of 12.6%, up 120 basis points [14] - Adjusted net income rose to $18.2 million, or $0.26 per diluted share, compared to $16.7 million, or $0.23 per diluted share in the previous year [15] Business Line Data and Key Metrics Changes - The marketing and distribution segment generated $344.1 million in sales, a 7% increase, primarily due to avocado volume and pricing dynamics [15] - The international farming segment saw gross sales increase by 79% to $49 million, with adjusted EBITDA rising by 163% to $12.1 million, driven by recovery in Peruvian avocado production [16] - The blueberry segment's net sales increased to $4.5 million from $1.6 million, with adjusted EBITDA rising to $0.5 million due to higher volumes and prices [17] Market Data and Key Metrics Changes - European sales increased by 37% in the third quarter compared to the prior year, reflecting improved capabilities in serving broader European markets [8] - The company expects industry volumes to be approximately 15% higher in the fourth quarter compared to the prior year due to ample Peruvian product and a larger Mexican crop [21] Company Strategy and Development Direction - The company emphasizes its vertical integration and global sourcing strategy, which allows it to maintain pricing discipline while increasing volume [6][7] - Strategic investments in international markets, particularly in Europe and Asia, are aimed at enhancing customer penetration and service [8][10] - The diversification strategy continues to yield results, with plans to establish a reliable year-round program for mangoes and blueberries [10][31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver strong performance despite market challenges, highlighting the importance of operational sophistication and international reach [4][11] - The company anticipates a transition to a larger Mexican crop and expects to see meaningful volume increases in blueberries, although revenue may be partially offset by lower average sales prices [22] Other Important Information - The company expects to incur approximately $10 million in direct tariff impacts on avocado and mango imports to the U.S., which is less than 1% of total costs [20][21] - Cash and cash equivalents were reported at $43.7 million as of July 31, 2025, with capital expenditures for the fiscal year-to-date at $39.8 million [18][19] Q&A Session Summary Question: Impact of tariffs on financials - The company has incurred over $5 million in tariff-related expenses through the first nine months and expects Q4 to align with Q3 [24] Question: Shipping dynamics and pricing in international markets - The company has not significantly shifted product placement due to tariffs, focusing instead on meeting demand where it exists [25][26] Question: Acreage expansion expectations - The company plans to complete its blueberry acreage expansion by the end of the year, with no significant plans for avocado acreage expansion [27][30] Question: International market opportunities - The company is strategically positioned to optimize U.S. market fulfillment while exploring growth opportunities in Europe and Asia [40][44] Question: SG&A expense run rate - The increase in SG&A was largely due to variable costs associated with performance and incentives, making it difficult to establish a fixed run rate [46][47]