Mission Produce, Inc.

Good afternoon and welcome to the Missing Produce Fiscal Second Quarter 2021 Conference Call. All participants will be in a listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please also note today's event is being recorded. At this time, I'd like to turn the conference call over to Jeff Sonick, Investor Relations at ICR. Sir, please go ahead.

Thank you and good afternoon. Today's presentation will be hosted by Steve Barnard, Executive Officer, and Brian Giles, Chief Financial Officer. Mike Brown, Chief Operating Officer, is also participating on the call and will be available for Q&A. The comments during today's call and the accompanying presentation contain forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts are considered forward-looking statements. These statements are based on management's current expectations and beliefs, as well as a number of assumptions concerning future events. Such forward-looking statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from the results discussed in the forward-looking statements. Some of these risks and uncertainties are identified and discussed in the company's filings with the SEC. We'll refer to certain non-GAAP financial measures today. please refer to the tables included in the earnings release, which can be found on our investor relations website, investors.missionproduce.com, for reconciliations of non-GAAP financial measures to their most comparable GAAP measures. I'd now like to turn the call over to Steve Barnard, CEO.

Thank you for joining us for our fiscal 2021 second quarter earnings call. We delivered another strong quarter, generating $16.3 million of adjusted EBITDA, which represents growth of 13% compared to the same period last year. Our blue-chip customer base and the flexibility that our network provides allowed us to distribute 22% greater volume than the prior year. With our vertical integration and key intelligence, we are in an excellent position to continue to grow our leadership position. The strength of our infrastructure has provided us with an incredible advantage as we've managed through this pandemic environment. Our operational network and global reach proved to be especially valuable as the industry has met with the demand shocks from the pandemic over the last year, as well as managing a large Mexican crop this season. Mission's ability to stay nimble and manage disruptions with minimal effects proved to be highly beneficial and allow us to demonstrate the value we provide to our customers worldwide. The consistency that we bring is critical in fostering customer relationships, creating growth in new and existing business, while expanding our business. The hallmark of mission since we started the company 38 years ago is our long commitments to innovation and investing in infrastructure, and I'm excited to share that our Laredo, Texas Forward Distribution Center is on track to be open and fully operational in September. We completed construction of the 262,000 square foot facility at the end of April, and we've been working through our operational qualification process and finishing up the internal systems that will make this a game changer for our North American customers. Beyond North America, our ambitions are global. We are leveraging our global supply chain and distribution capabilities to continue developing international markets such as Europe and Asia. Both of these regions represent immense long-term growth opportunities for us with consumption rates that are a fraction of what the U.S. has grown into today. In fact, in the fiscal second quarter, Mission delivered first-ever shipment of California avocados to China. This is a significant milestone for us and the industry. Our year-round sourcing capabilities are extremely unique and remain a substantial competitive advantage for Mission. Avocados have become a household staple, and we've commissioned some consumer survey work that demonstrates the power of these trends. Coming out of the pandemic this summer, consumers are seeking normalcy, which included social gatherings and events, which is great for all businesses, including ours. While our food service channel was perhaps more resilient than others due to the positioning and quality of our customer base, we are eager to see this channel reemerge. Based on the consumer research, 81% of respondents report they plan to return to gathering with family and friends, 68% plan to eat out, and 56% are even planning to travel again. Consumer activities certainly impact consumption habits, And our intelligence tells us that this summer, 58% of Americans plan to buy and eat more avocados. Avocado consumption generally peaks during the summer, with over half the US households purchasing fruit between June and August. Right now, consumers are buying more avocados for the health benefits and for summer dishes. As the global avocado leader, we're here to contribute to all post-pandemic avocado activities. Mission has played a critical role in creating greater access to avocados at your neighborhood retailer and favorite restaurant through our consistent year-round supply and value-added services. This requires foresight and a constant focus on continuously assessing opportunities to optimize our sourcing capabilities with third-party growers, as well as investing in our own farms to ensure that we can control the quality and supply that our customers have come to expect. So, as we look ahead to our fiscal second half of the year, our industry transitions into the southern hemisphere, where our own Peruvian farms become a large component of the volume that is sold. The growing season was very productive, and we are expecting solid yields from our crop, and with prices firming up, we're in a great position to deliver a strong second-half operating performance, led by our international farming segment, which Brian will speak to in greater detail. For the third quarter-to-date period, retail pricing is steady, along with consumption patterns versus the prior year, which is common going into the summer months. Finally, I wanted to comment on another major corporate milestone, which we are extremely proud of, our inaugural ESG report titled Finest for the Future that was published in April. Throughout our 38-year history, Mission has remained rooted in honesty, respect, and loyalty to its land, resources, and people. As the global leader in avocados, we have committed to sustainability initiatives that embody our core values, which I've shared previously. We use the acronym FIRST, F-I-R-S-T, fun, innovative, reliable, successful, and trustworthy. The report illustrates our dedication to the finest practices for our people, product, and planet. We embody sustainable practices from field to fork, and our advanced farming practices allow us to keep our water usage per avocado well below industry average. Our people are passionate and have an innovative spirit, constantly driving our operations to reduce our environmental footprint and contribute positively to our global community. With a focus on investing in people, reducing water and waste, and minimizing carbon emissions, some selected highlights of the report include the following accomplishments and goals. Mission's global workforce comprises nearly 50% women, almost 20% of whom were promoted in 2020. We announced the implementation of an initiative to utilize a reduced plastic bag in at least 50% of the bags packed and shipped globally by the fiscal year 2025, equating to almost 500,000 half-liter plastic bottles. Our precision and biodiverse farming methods use less irrigation water per avocado compared to the average grower with approximately 40% less water in Peru and California. Solar panels at our Oxnard, California packing facility power almost three quarters of the facility during peak season, with more facilities transitioning to supply renewable energy each year, specifically in Peru and California. And by the end of 2021, Mission aims to apply shelf life extension technology to 22.5 million pounds of avocados to combat food waste and reduce shrink of avocados, the equivalent of powering almost 563 homes, according to the U.S. Environmental Protection Agency, greenhouse gas calculator. With that, I'll pass the call over to our CFO, Brian Giles, for commentary around our recent financial results.