Fiscal Fourth Quarter 2023 Financial Overview:
- Total revenue increased 8% to
$257.9 million compared to the same period last year driven by a 8% increase in average per-unit avocado selling prices, partially offset by a 4% decrease in avocado volume sold - Net income of
$4.0 million , or$0.06 per diluted share, compared to net loss of$(42.0) million , or$(0.59) per diluted share, for the same period last year, which included a non-cash charge of$49.5 million related to goodwill impairment - Adjusted net income of
$7.5 million , or$0.11 per diluted share, compared to$9.2 million , or$0.13 per diluted share, for the same period last year - Adjusted EBITDA of
$17.3 million , compared to$17.2 million in the period year period
Full Year 2023 Financial Overview:
- Total avocado volume sold increased by 12% to 654.4 million pounds
- Total revenue was
$953.9 million compared to$1.05 billion last year; despite volume growth as a result of lower average per-unit avocado sales prices; lower pricing and higher avocado volume sold in the current year were driven by higher industry supply out ofMexico in the current year after experiencing supply limitations in the previous fiscal year - Net loss of
$(2.8) million , or$(0.04) per diluted share, compared to$(34.6) million , or$(0.49) per diluted share last year - Adjusted net income of
$13.3 million , or$0.19 per diluted share, compared to$18.5 million , or$0.26 per diluted share last year - Adjusted EBITDA increased 2% to
$48.4 million compared to$47.6 million last year - Owned exportable avocado production volume decreased 9% to 107 million pounds for the 2023 harvest season; volume was negatively impacted by weather-related events in the current year
CEO Message
Fiscal Fourth Quarter 2023 Consolidated Financial Review
Total revenue for the fourth quarter of fiscal 2023 increased
Gross profit increased
Selling, general and administrative expense (“SG&A”) for the fourth quarter increased
Net income for the fourth quarter of fiscal 2023 was
Adjusted net income for the fourth quarter of fiscal 2023 was
Adjusted EBITDA was
Fiscal Fourth Quarter Business Segment Performance
Marketing & Distribution
Net sales in the Marketing & Distribution segment increased 7% to
Segment adjusted EBITDA increased
International Farming
The vast majority of fruit sales from the International Farming segment are to the Marketing and Distribution segment, with the remainder of revenue largely derived from services provided to third parties and the Blueberries segment. Affiliated sales are concentrated in the second half of the fiscal year in alignment with the Peruvian avocado harvest season, which typically runs from April through September of each year. As a result, adjusted EBITDA for the International Farming segment is generally concentrated in the third and fourth quarters of the fiscal year in alignment with the timing of sales.
Total segment sales in the International Farming segment increased by 1% in the fourth quarter of fiscal 2023 compared to the same period last year. Reported segment sales were distorted by a change in the phasing of segment revenue recognition versus the prior year to align with the timing of avocado sales to customers, which is consistent with the timing of profit recognition, as opposed to the harvest timing in
Segment adjusted EBITDA decreased
Blueberries
Net sales in the Blueberries segment increased
Segment adjusted EBITDA increased
Balance Sheet and Cash Flow
Cash and cash equivalents were
Net cash provided by operating activities was
Capital expenditures were
Outlook
For the first quarter of fiscal year 2024, the Company is providing the following avocado industry outlook that will drive performance:
- Industry volumes are expected to be slightly lower in the fiscal 2024 first quarter versus the prior year period due to expectations for a lighter Mexican harvest resulting at least in part to smaller fruit sizing.
- Pricing is expected to be slightly lower on a sequential basis, but higher on a year-over-year basis by approximately 15% compared to the
$1.14 per pound average experienced in first quarter of fiscal 2023.
Conference Call and Webcast
As previously announced, the Company will host a conference call to discuss its fourth quarter of fiscal 2023 financial results today at
The live audio webcast of the conference call will be accessible in the News & Events section on the Company's Investor Relations website at https://investors.missionproduce.com. An archived replay of the webcast will also be available shortly after the live event has concluded.
Non-GAAP Financial Measures
This press release contains the non-GAAP financial measures “adjusted net income” and “adjusted EBITDA.” Management believes these measures provide useful information for analyzing the underlying business results. These measures are not in accordance with, nor are they a substitute for or superior to, the comparable financial measures by generally accepted accounting principles.
Adjusted EBITDA refers to net income (loss), before interest expense, income taxes, depreciation and amortization expense, stock-based compensation expense, other income (expense), and income (loss) from equity method investees, further adjusted by asset impairment and disposals, net of insurance recoveries, farming costs for nonproductive orchards (which represents land lease costs), certain noncash and nonrecurring ERP costs, transaction costs, amortization of inventory adjustments recognized from business combinations, and any special, non-recurring, or one-time items such as remeasurements or impairments, and any portion of these items attributable to the noncontrolling interest, all of which are excluded from the results the CEO reviews uses to assess segment performance and results.
Reconciliations of these non-GAAP financial measures to the most comparable GAAP measure are provided in the table at the end of this press release.
About
Forward-Looking Statements
Statements in this press release that are not historical in nature are forward-looking statements that, within the meaning of the federal securities laws, including the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, involve known and unknown risks and uncertainties. Words such as "may", "will", "expect", "intend", "plan", "believe", "seek", "could", "estimate", "judgment", "targeting", "should", "anticipate", "goal" and variations of these words and similar expressions, are also intended to identify forward-looking statements. The forward-looking statements in this press release address a variety of subjects, including statements about our short-term and long-term assumptions, goals and targets. Many of these assumptions relate to matters that are beyond our control and changing rapidly. Although we believe the expectations reflected in such forward-looking statements are based upon reasonable assumptions, we can give no assurances that our expectations will be attained. Readers are cautioned that actual results could differ materially from those implied by such forward-looking statements due to a variety of factors, including: limitations regarding the supply of avocados, either through purchasing or growing; fluctuations in the market price of avocados; increasing competition; risks associated with doing business internationally, including Mexican and Peruvian economic, political and/or societal conditions; inflationary pressures; loss of one or more of our largest customers; general economic conditions or downturns; supply chain failures or disruptions; disruption to the supply of reliable and cost-effective transportation; failure to recruit or retain employees, poor employee relations, and/or ineffective organizational structure; inherent farming risks; seasonality in operating results; failures associated with information technology infrastructure, system security and cyber risks; new and changing privacy laws and our compliance with such laws; food safety events and recalls; failure to comply with laws and regulations, including those promulgated by the
You can obtain copies of our
Contacts:
Investor Relations
ICR
646-277-1263
jeff.sonnek@icrinc.com
Media
Marketing Communications Manager
press@missionproduce.com
Condensed Consolidated Balance Sheets (Unaudited) | |||||
(In millions, except for shares) | |||||
Assets | |||||
Current Assets: | |||||
Cash and cash equivalents | $ | 42.9 | $ | 52.8 | |
Restricted cash | 0.3 | 1.1 | |||
Accounts receivable | |||||
Trade, net of allowances | 74.1 | 62.9 | |||
Grower and fruit advances | 0.9 | 1.8 | |||
Other | 12.4 | 17.3 | |||
Inventory | 70.8 | 73.1 | |||
Prepaid expenses and other current assets | 9.1 | 11.1 | |||
Income taxes receivable | 9.6 | 8.0 | |||
Total current assets | 220.1 | 228.1 | |||
Property, plant and equipment, net | 523.2 | 489.7 | |||
Operating lease right-of-use assets | 72.4 | 65.4 | |||
Equity method investees | 31.0 | 27.1 | |||
Deferred income tax assets, net | 8.5 | 8.1 | |||
39.4 | 39.4 | ||||
Intangible asset, net | 0.5 | 2.0 | |||
Other assets | 19.7 | 19.7 | |||
Total assets | $ | 914.8 | $ | 879.5 | |
Liabilities and Equity | |||||
Liabilities | |||||
Accounts payable | $ | 27.2 | $ | 34.4 | |
Accrued expenses | 26.4 | 30.1 | |||
Income taxes payable | 1.6 | 1.0 | |||
Grower payables | 26.4 | 24.3 | |||
Short-term borrowings | 2.8 | 2.5 | |||
Loans from noncontrolling interest holders—current portion | 0.5 | — | |||
Long-term debt—current portion | 3.4 | 3.5 | |||
Operating leases—current portion | 6.6 | 4.7 | |||
Finance leases—current portion | 2.6 | 1.2 | |||
Total current liabilities | 97.5 | 101.7 | |||
Long-term debt, net of current portion | 148.6 | 136.9 | |||
Loans from noncontrolling interest holders, net of current portion | 2.5 | 1.0 | |||
Operating leases, net of current portion | 71.0 | 63.9 | |||
Finance leases, net of current portion | 14.7 | 1.4 | |||
Income taxes payable | 2.3 | 3.1 | |||
Deferred income tax liabilities, net | 23.5 | 29.4 | |||
Other long-term liabilities | 26.4 | 19.2 | |||
Total liabilities | 386.5 | 356.6 | |||
Equity | |||||
503.6 | 502.1 | ||||
Noncontrolling interest | 24.7 | 20.8 | |||
Total equity | 528.3 | 522.9 | |||
Total liabilities and equity | $ | 914.8 | $ | 879.5 |
Condensed Consolidated Statements of Income (Loss) (Unaudited) | |||||||||||||||
Three Months Ended | Years Ended | ||||||||||||||
(In millions, except for share and per share amounts) | 2023 | 2022 | 2023 | 2022 | |||||||||||
Net sales | $ | 257.9 | $ | 238.0 | $ | 953.9 | $ | 1,045.9 | |||||||
Cost of sales | 230.1 | 211.1 | 870.6 | 956.1 | |||||||||||
Gross profit | 27.8 | 26.9 | 83.3 | 89.8 | |||||||||||
Selling, general and administrative expenses | 20.6 | 19.5 | 76.4 | 77.5 | |||||||||||
— | 49.5 | — | 49.5 | ||||||||||||
Operating income (loss) | 7.2 | (42.1 | ) | 6.9 | (37.2 | ) | |||||||||
Interest expense | (3.3 | ) | (2.0 | ) | (11.6 | ) | (5.5 | ) | |||||||
Equity method income | 0.8 | 1.5 | 4.0 | 5.1 | |||||||||||
Remeasurement gain on business combination with Moruga | — | — | — | 2.0 | |||||||||||
Other income (expense), net | 1.1 | 0.8 | (0.2 | ) | 4.4 | ||||||||||
Income (loss) before income taxes | 5.8 | (41.8 | ) | (0.9 | ) | (31.2 | ) | ||||||||
(Benefit) provision for income taxes | (0.2 | ) | — | 2.2 | 3.7 | ||||||||||
Net income (loss) | $ | 6.0 | $ | (41.8 | ) | $ | (3.1 | ) | $ | (34.9 | ) | ||||
Less: | |||||||||||||||
Net income (loss) attributable to noncontrolling interest | 2.0 | 0.2 | (0.3 | ) | (0.3 | ) | |||||||||
Net income (loss) attributable to | $ | 4.0 | $ | (42.0 | ) | $ | (2.8 | ) | $ | (34.6 | ) | ||||
Net income (loss) per share attributable to | |||||||||||||||
Basic | $ | 0.06 | $ | (0.59 | ) | $ | (0.04 | ) | $ | (0.49 | ) | ||||
Diluted | $ | 0.06 | $ | (0.59 | ) | $ | (0.04 | ) | $ | (0.49 | ) | ||||
Weighted average shares of common stock outstanding, used in computing diluted earnings per share | 70,953,478 | 70,664,681 | 70,750,239 | 70,647,469 |
Condensed Consolidated Statements of Cash Flow (Unaudited) | |||||||
Years Ended | |||||||
(In millions) | 2023 | 2022 | |||||
Operating Activities | |||||||
Net loss | $ | (3.1 | ) | $ | (34.9 | ) | |
Adjustments to reconcile net loss to net cash provided by operating activities | |||||||
Provision for losses on accounts receivable | 0.1 | 0.1 | |||||
Depreciation and amortization | 32.8 | 24.8 | |||||
Amortization of debt issuance costs | 0.2 | 0.3 | |||||
Equity method income | (4.0 | ) | (5.1 | ) | |||
Noncash lease expense | 5.9 | 5.3 | |||||
Stock-based compensation | 4.5 | 3.6 | |||||
Dividends received from equity method investees | 2.7 | 2.2 | |||||
Losses on asset impairment, disposals and sales, net of insurance recoveries | 1.3 | 0.4 | |||||
Deferred income taxes | (6.4 | ) | (0.6 | ) | |||
— | 49.5 | ||||||
Remeasurement gain on business combination with Moruga | — | (2.0 | ) | ||||
Unrealized losses on foreign currency transactions | 1.4 | — | |||||
Unrealized gains on derivative financial instruments | (0.1 | ) | (4.7 | ) | |||
Other | 0.1 | 0.1 | |||||
Effect on cash of changes in operating assets and liabilities, net of acquisition: | |||||||
Trade accounts receivable | (10.6 | ) | 10.6 | ||||
Grower fruit advances | 0.9 | (1.2 | ) | ||||
Other receivables | 5.0 | (2.4 | ) | ||||
Inventory | 3.0 | (15.3 | ) | ||||
Prepaid expenses and other current assets | 2.0 | (0.4 | ) | ||||
Income taxes receivable | (1.6 | ) | (1.1 | ) | |||
Other assets | 1.0 | 0.2 | |||||
Accounts payable and accrued expenses | (8.9 | ) | 9.4 | ||||
Income taxes payable | (0.2 | ) | (1.3 | ) | |||
Grower payables | 2.2 | 2.2 | |||||
Operating lease liabilities | (3.8 | ) | (4.0 | ) | |||
Other long-term liabilities | 4.8 | (0.5 | ) | ||||
Net cash provided by operating activities | $ | 29.2 | $ | 35.2 | |||
Investing Activities | |||||||
Purchases of property, plant and equipment | (49.8 | ) | (61.2 | ) | |||
Proceeds from sale of property, plant and equipment | 0.2 | 3.0 | |||||
Cash acquired in consolidation of Moruga | — | 4.3 | |||||
Investment in equity method investees | (2.1 | ) | (0.4 | ) | |||
Purchase of other investment | (2.3 | ) | — | ||||
Loan repayments from equity method investees | — | 3.0 | |||||
Other | (0.1 | ) | (0.1 | ) | |||
Net cash used in investing activities | $ | (54.1 | ) | $ | (51.4 | ) | |
Financing Activities | |||||||
Borrowings on revolving credit facility | 145.0 | 80.0 | |||||
Payments on revolving credit facility | (130.0 | ) | (40.0 | ) | |||
Proceeds from short-term borrowings | 2.8 | 2.5 | |||||
Repayment of short-term borrowings | (2.5 | ) | — | ||||
Principal payments on long-term debt obligations | (3.5 | ) | (63.3 | ) | |||
Principal payments on finance lease obligations | (2.6 | ) | (1.2 | ) | |||
Payments for long-term supplier financing | (0.1 | ) | — | ||||
Proceeds from loan from noncontrolling interest holder | 2.0 | — | |||||
Purchase and retirement of common stock | (0.6 | ) | — | ||||
Taxes paid related to shares withheld from the settlement of equity awards | (0.5 | ) | — | ||||
Exercise of stock options | 0.1 | 0.1 | |||||
Payment of debt issuance, restructuring or extinguishment fees | — | (0.8 | ) | ||||
Equity contributions from noncontrolling interest holders | 4.2 | 0.9 | |||||
Net cash provided by (used in) financing activities | $ | 14.3 | $ | (21.8 | ) | ||
Effect of exchange rate changes on cash | (0.1 | ) | (0.3 | ) | |||
Net decrease in cash, cash equivalents and restricted cash | (10.7 | ) | (38.3 | ) | |||
Cash, cash equivalents and restricted cash, beginning of period | 53.9 | 92.2 | |||||
Cash, cash equivalents and restricted cash, end of period | $ | 43.2 | $ | 53.9 | |||
Summary of cash, cash equivalents and restricted cash reported within the consolidated balance sheets: | |||||||
Cash and cash equivalents | $ | 42.9 | $ | 52.8 | |||
Restricted cash | 0.3 | 1.1 | |||||
Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows | $ | 43.2 | $ | 53.9 |
Reconciliation of Non-GAAP Financial Measures to GAAP (Unaudited)
The following tables reconcile the non-GAAP measures “adjusted net income” and “adjusted EBITDA” to their comparable GAAP measures. Refer also to “Non-GAAP Financial Measures” earlier in this press release.
Adjusted Net Income
Three Months Ended | Years Ended | ||||||||||||||
(In millions, except for per share amounts) | 2023 | 2022 | 2023 | 2022 | |||||||||||
Net income (loss) attributable to | $ | 4.0 | $ | (42.0 | ) | $ | (2.8 | ) | $ | (34.6 | ) | ||||
Stock-based compensation | 1.3 | 1.0 | 4.5 | 3.6 | |||||||||||
Unrealized loss (gain) on derivative financial instruments | 0.7 | (1.5 | ) | 2.3 | (6.0 | ) | |||||||||
Foreign currency transaction loss (gain) | (0.8 | ) | 0.9 | 1.8 | 2.0 | ||||||||||
Asset impairment and disposals, net of insurance recoveries | 0.1 | 0.2 | 1.3 | 0.4 | |||||||||||
Farming costs for nonproductive orchards(1) | 1.0 | 0.4 | 3.8 | 1.5 | |||||||||||
ERP costs(2) | 0.5 | 0.8 | 2.2 | 4.6 | |||||||||||
Executive severance | 1.3 | — | 1.3 | — | |||||||||||
Transaction costs | — | 0.1 | 0.3 | 0.6 | |||||||||||
Amortization of inventory adjustment recognized from business combination | — | 0.4 | 0.7 | 0.4 | |||||||||||
Amortization of intangible asset recognized from business combination | 0.3 | — | 1.5 | — | |||||||||||
— | 49.5 | — | 49.5 | ||||||||||||
Remeasurement gain on business combination with Moruga(3) | — | — | — | (2.0 | ) | ||||||||||
Tax effects of adjustments to net loss attributable to | (0.7 | ) | (0.4 | ) | (4.1 | ) | (1.3 | ) | |||||||
Nonrecurring discrete tax charge(5) | — | — | 1.8 | — | |||||||||||
Noncontrolling interest(6) | (0.2 | ) | (0.2 | ) | (1.3 | ) | (0.2 | ) | |||||||
$ | 7.5 | $ | 9.2 | $ | 13.3 | $ | 18.5 | ||||||||
$ | 0.11 | $ | 0.13 | $ | 0.19 | $ | 0.26 |
(1) During the three months ended
(2) Includes recognition of deferred implementation costs for both periods. Amounts for fiscal year 2022 also included non-recurring post-implementation process reengineering costs.
(3) Neither deductible nor taxable for income tax purposes.
(4) Tax effects are calculated using applicable rates that each adjustment relates to.
(5) The Company recorded a discrete charge to income tax expense related to a statutory case in
(6) Represents net income or loss attributable to noncontrolling interest plus the impact of tax-effected non-GAAP adjustments, allocable to the noncontrolling owner based on their percentage of ownership interest.
Adjusted EBITDA
Three Months Ended | Years Ended | ||||||||||||||
(In millions) | 2023 | 2022 | 2023 | 2022 | |||||||||||
Marketing and Distribution adjusted EBITDA | $ | 10.8 | $ | 4.0 | $ | 40.1 | $ | 23.5 | |||||||
International Farming adjusted EBITDA | 1.1 | 12.2 | 3.1 | 23.3 | |||||||||||
Blueberries adjusted EBITDA | 5.4 | 1.0 | 5.2 | 0.8 | |||||||||||
Total reportable segment adjusted EBITDA | 17.3 | 17.2 | $ | 48.4 | $ | 47.6 | |||||||||
Net income (loss) | 6.0 | (41.8 | ) | (3.1 | ) | (34.9 | ) | ||||||||
Interest expense | 3.3 | 2.0 | 11.6 | 5.5 | |||||||||||
(Benefit) provision for income taxes | (0.2 | ) | — | 2.2 | 3.7 | ||||||||||
Depreciation and amortization(1) | 10.0 | 7.6 | 32.8 | 24.8 | |||||||||||
Equity method income | (0.8 | ) | (1.5 | ) | (4.0 | ) | (5.1 | ) | |||||||
Stock-based compensation | 1.3 | 1.0 | 4.5 | 3.6 | |||||||||||
Executive severance | 1.3 | — | 1.3 | — | |||||||||||
Asset impairment and disposals, net of insurance recoveries | 0.1 | 0.2 | 1.3 | 0.4 | |||||||||||
Farming costs for nonproductive orchards | 0.5 | 0.4 | 1.8 | 1.5 | |||||||||||
ERP costs(2) | 0.5 | 0.8 | 2.2 | 4.6 | |||||||||||
Transaction costs | — | 0.1 | 0.3 | 0.6 | |||||||||||
Amortization of inventory adjustment recognized from business combination | — | 0.4 | 0.7 | 0.4 | |||||||||||
— | 49.5 | — | 49.5 | ||||||||||||
Remeasurement gain on business combination with Moruga | — | — | — | (2.0 | ) | ||||||||||
Other (income) expense, net | (1.1 | ) | (0.8 | ) | 0.2 | (4.4 | ) | ||||||||
Noncontrolling interest(3) | (3.6 | ) | (0.7 | ) | (3.4 | ) | (0.6 | ) | |||||||
Total adjusted EBITDA | $ | 17.3 | $ | 17.2 | $ | 48.4 | $ | 47.6 |
(1) Includes depreciation and amortization of purchase accounting assets of
(2) Includes recognition of deferred implementation costs for both periods, and for the three and twelve months ended
(3) Represents net income or loss attributable to noncontrolling interest plus the impact of non-GAAP adjustments, allocable to the noncontrolling owner based on their percentage of ownership interest.
Other Information (Unaudited)
Segment Sales
Marketing and Distribution | International Farming | Blueberries | Total | Marketing and Distribution | International Farming | Blueberries | Total | ||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||||
(In millions) | 2023 | 2022 | |||||||||||||||||||||||||
Third party sales | $ | 236.2 | $ | 2.2 | $ | 19.5 | $ | 257.9 | $ | 221.2 | $ | 6.4 | $ | 10.4 | $ | 238.0 | |||||||||||
Affiliated sales | — | 38.1 | — | 38.1 | — | 33.4 | — | 33.4 | |||||||||||||||||||
Total segment sales | 236.2 | 40.3 | 19.5 | 296.0 | 221.2 | 39.8 | 10.4 | 271.4 | |||||||||||||||||||
Intercompany eliminations | — | (38.1 | ) | — | (38.1 | ) | — | (33.4 | ) | — | (33.4 | ) | |||||||||||||||
Total net sales | $ | 236.2 | $ | 2.2 | $ | 19.5 | $ | 257.9 | $ | 221.2 | $ | 6.4 | $ | 10.4 | $ | 238.0 | |||||||||||
Years Ended | |||||||||||||||||||||||||||
2023 | 2022 | ||||||||||||||||||||||||||
Third party sales | $ | 889.9 | $ | 11.6 | $ | 52.4 | $ | 953.9 | $ | 1,016.1 | $ | 19.1 | $ | 10.7 | $ | 1,045.9 | |||||||||||
Affiliated sales | — | 78.6 | — | 78.6 | — | 95.6 | — | 95.6 | |||||||||||||||||||
Total segment sales | 889.9 | 90.2 | 52.4 | 1,032.5 | 1,016.1 | 114.7 | 10.7 | 1,141.5 | |||||||||||||||||||
Intercompany eliminations | — | (78.6 | ) | — | (78.6 | ) | — | (95.6 | ) | — | (95.6 | ) | |||||||||||||||
Total net sales | $ | 889.9 | $ | 11.6 | $ | 52.4 | $ | 953.9 | $ | 1,016.1 | $ | 19.1 | $ | 10.7 | $ | 1,045.9 |
Avocado Sales
Three Months Ended | Years Ended | ||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||
Pounds of avocados sold(millions) | 162.4 | 169.2 | 654.4 | 584.3 | |||||||
Average sales price per pound | $ | 1.39 | $ | 1.28 | $ | 1.30 | $ | 1.71 |
Sales by Type
Three Months Ended | Years Ended | ||||||||||
(In millions) | 2023 | 2022 | 2023 | 2022 | |||||||
Avocado | $ | 225.0 | $ | 216.9 | $ | 851.1 | $ | 998.4 | |||
Other | 32.9 | 21.1 | 102.8 | 47.5 | |||||||
Total net sales | $ | 257.9 | $ | 238.0 | $ | 953.9 | $ | 1,045.9 |
Source:
2023 GlobeNewswire, Inc., source