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 - Marketing & Distribution segment achieved 7% avocado volume growth for the full year and 13% in the fourth quarter [9][20] - International Farming segment saw total sales increase by 97% to $59.7 million, with segment-adjusted EBITDA more than tripling to $8.4 million [21] - Blueberry segment 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 - 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 capitalized on its Peruvian product leverage to enhance international penetration and build relationships with large retailers [10] Company Strategy and Development Direction - The company is focused on growth, particularly in North America and international markets, with a strong emphasis on increasing household penetration for avocados [15][46] - The leadership transition is seen as a strategic move to continue the company's growth trajectory, with a focus on organic and inorganic opportunities [36][38] - The company plans to reduce capital expenditures to approximately $40 million, marking the end of a heavy capital investment cycle [24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's operational capabilities and the potential for significant growth in the coming years [6][15] - The outlook for fiscal 2026 anticipates a 10% increase in avocado industry volumes, although pricing is expected to be lower year-over-year [25] - Management highlighted the importance of consumer engagement and strategic promotions to drive household penetration during lower pricing environments [50][51] Other Important Information - The company reduced long-term debt by approximately $18 million during Fiscal 2025, resulting in a healthy net leverage ratio well below one times EBITDA [23] - The company is committed to enhancing free cash flow generation in the coming years, supported by a disciplined focus on debt reduction [15][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 emphasized strong operating performance as the primary driver of cash flow, with a target of $40 million in capital expenditures for the upcoming year [30][31] Question: Capital allocation with lower CapEx - Management stated that growth remains the priority, with flexibility to explore various options for maximizing shareholder value, including share buybacks [32][33] Question: Changes in strategy with management transition - Management reassured that the strategic direction remains consistent, focusing on growth and capital deployment for the next five to ten years [35][38] Question: Insights on household penetration goals - Management expressed a goal to increase household penetration for avocados to 73%-75% over the next couple of years, leveraging lower pricing environments to drive consumer engagement [48][51]