Mission Produce, Inc.

Good afternoon, and welcome to the Mission Produce Fiscal First Quarter 2023 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 did like to turn the conference 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, Chief Executive Officer, and Brian Giles, Chief Financial Officer. 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 and as well as the 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 also 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 directly comparable GAAP measures. With that, I'd now like to turn the call over to Steve Barnard, CEO.

Thank you for joining us for our fiscal 2023 first quarter earnings call. We produced total revenue of $213.5 million and adjusted EBITDA of $2.3 million in the first quarter. This performance largely reflects the reversal of the strong pricing and low industry volumes that summarize most of 2022. As the new Mexican season kicked in during the first quarter of 2023, we were in a great position to drive volumes, and I'm pleased to report that our growth of 14% exceeded that of the industry, which is a testament to our distribution capabilities and infrastructure that supports our global customer base. However, with these higher industry volumes, the pricing environment reversed, decreasing 27%, ultimately outpacing the volume growth we had realized. Although the velocity of the price deceleration created unfavorable circumstances to drive per unit margin, the market has since found some pricing stability which is more conducive to generating improved profitability. And looking ahead to the balance of the year, we believe conditions exist that make for a more constructive pricing outlook as our fruit season comes online. While the price volatility during the first quarter was unfavorable, we are optimistic that this new equilibrium of lower fruit pricing will ultimately drive greater consumption in the coming year compared to the depressed consumption rates we saw last year. Furthermore, the shift to a more rational environment It facilitates our ability to penetrate new growth markets such as Europe and Asia and drive per capita consumption in these emerging markets with improved access to year-round, high-quality fruit that we are uniquely able to deliver via our own and third-party sourcing capabilities and global footprint. But having access to diversified sourcing is only half the equation. You also need the distribution infrastructure, which is precisely where mission shines. We remain well positioned to manage higher volumes of product this year to our unmatched global network of distribution, ripening, and other value-added assets. Looking ahead, our focus remains on the advancement of our global presence to investments in new global facilities such as our forward distribution center in the United Kingdom and diversification of our business by leveraging our core competencies in new and creative ways such as blueberries. We expect that the improved stability in the avocado market coupled with easing of cost inflation will also allow us to generate sequential improvements in our per unit margins, albeit below what has been our historical targeted range. With this backdrop, we expect to deliver a better year of operating performance in fiscal 2023. Our forward distribution center in the United Kingdom is expected to become operational in April. It is strategically located with direct access to major international ports and transportation networks and will strengthen submission's expanding international footprint and optimize product distribution to our growing European customer base with direct access to our global source network. This project represents a strategic investment in physical assets and people that will help us scale up quickly in this market in the coming years. We are very excited to get this facility open and elevate our ability to service this region properly with our efficient and cost-effective model. With respect to our blueberry business, although our first quarter performance was impacted by an unfavorable pricing environment, we continue to be optimistic about the long-term opportunity given our access to new premium varietals, which are in the early stages of disrupting the status quo. These new varietals are not only expected to sell at a premium, but also provide us with the added benefit of extending the marketing window with an elongated harvest. While the initial goal of our entry into the market was to optimize labor management for our seasonal avocado business, our experience in operationalizing scaled production and unique high-value crops put us in a position to make a broader impact on the industry. This is a long-term play for us, but one that we think will prove to be quite valuable over time. With that, I'll pass the call over to our CFO, Brian Giles, for his financial commentary.