Mission(US:AVO)2025-12-18 23:02Financial Data and Key Metrics Changes - Fiscal 2025 recorded revenue of $1.39 billion, a 13% increase from the previous year, driven by a 7% volume growth in avocados [7][17] - Fourth quarter revenue totaled $319 million, down 10% year-over-year due to a 27% decrease in average per-unit avocado sales prices [17] - Adjusted net income for the quarter was $22.2 million, or $0.31 per diluted share, compared to $19.6 million, or $0.28 per diluted share last year [18] - Adjusted EBITDA increased 12% to a record $41.4 million compared to $36.9 million last year [19] Business Line Data and Key Metrics Changes - The marketing and distribution segment achieved 7% avocado volume growth for the full year and 13% in the fourth quarter [9][20] - International farming segment sales increased 97% to $59.7 million, with segment-adjusted EBITDA more than tripling to $8.4 million [21] - Blueberry net sales increased 16% to $36.5 million, although segment-adjusted EBITDA decreased due to lower per-unit margins [22] Market Data and Key Metrics Changes - The North American market showed stable growth, while Europe and Asia experienced significant volume growth, with European volume sold increasing by 40% [8][10] - The company's international penetration was bolstered by consistent supply from Peruvian products, allowing for deeper relationships with large retailers [10] Company Strategy and Development Direction - The company is focused on leveraging its integrated global platform to drive growth and enhance free cash flow, with a significant emphasis on international expansion [15][16] - The management transition is seen as a strategic move to capitalize on the company's strong foundation and drive future growth [3][4] - The company aims to increase household penetration of avocados from approximately 70% to 73%-75% over the next couple of years [51][52] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate pricing volatility and supply disruptions, highlighting the team's execution capabilities [9][15] - The outlook for Fiscal 2026 anticipates a 10% increase in avocado industry volumes, although pricing is expected to be lower year-over-year [24] Other Important Information - The company reduced long-term debt by approximately $18 million during Fiscal 2025, resulting in a 25% decline in interest expense [23] - Capital expenditures for the year were $51.4 million, with expectations to decrease to approximately $40 million in Fiscal 2026 [24] Q&A Session Summary Question: Outlook for mangoes and potential growth - Management indicated that the growth trajectory for mangoes will be similar to previous years, focusing on market share penetration and global sourcing initiatives [28][29] Question: Risks in achieving free cash flow growth - Management highlighted strong operating performance as the primary driver of cash flow, with a focus on maintaining flexibility in capital expenditures [30][31] Question: Capital allocation with lower CapEx - The company is prioritizing growth and exploring various opportunities to maximize shareholder value, including potential share buybacks [32][33] Question: Changes in strategy with management transition - Management confirmed that the strategic direction remains consistent, with a focus on growth and capital deployment over the next five to ten years [34][36] Question: Insights on CapEx and growth opportunities - Approximately $20 million of the upcoming $40 million CapEx is expected to be growth-oriented, with investments in both farming operations and commercial expansion [41][42] Question: Household penetration goals for avocados - Management aims to increase household penetration to 73%-75% over the next couple of years, leveraging lower pricing environments to drive consumer engagement [47][52]