Mission Produce, Inc.

Good afternoon and welcome to the Mission Produce Fiscal First Quarter 2024 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 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, 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, as well as an amount 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. Steve?

Thank you for joining us today. We're off to a strong start in fiscal 2024 with the delivery of a first quarter that demonstrated solid execution across all facets of our business. Total revenue for the first quarter of fiscal 2024 increased 45.2 million or 21% year over year. to $258.7 million, and adjusted EBITDA increased by $16.9 million to $19.2 million. These results were a direct result of our team's focus. Underpinning our strong adjusted EBITDA performance was significantly improved per unit margins across the marketing and distribution and blueberry segments, which translated to nearly 700 basis points of gross margin expansion and a 69% increase in gross profit dollars versus the prior year period. This improvement was spurred by strength in avocado margins in our marketing and distribution segment, as well as the achievement of record quarterly revenues in our blueberry segment. Blueberries are notable this quarter in that the strategy is becoming visible in the financial results. Within this business, we have been investing capital in new premium varietals that not only offer additional yield opportunity to drive higher returns on investment, but are also differentiated in terms of the appearance and flavor profile, which offer retailers and their customers significant value. Similar to our international farming segment, we were able to generate higher margins as a result of behaving as an operator with a greater capital intensity. The blueberry business is providing us with incremental levers to drive per unit margins at the consolidated level. In an environment such as this, where industry volumes are constrained, we are well positioned to capture the additional margin upside that is created from advantageous pricing. Together, these businesses contributed meaningfully to our overall adjusted EBITDA generation in the first quarter and demonstrates Mission's unique ability to drive value through its leading global market position. Our primary goal is to drive long-term volume growth by supporting our markets with consistent supply, creating an environment to drive per capita consumption growth through greater access. To support opportunities in emerging growth markets such as Europe and Asia, we are methodically building our capabilities in those regions in a measured fashion. In the United Kingdom, the construction of our new forward distribution center is progressing according to plan with our phase two build out to expand capacity, including additional ripening rooms, storage and sorting, as well as building handling capacity for our very popular mango category. While our mango program is still in its infancy, first quarter revenue grew nearly 50% compared to the same period last year to over $10 million. The opportunity ahead is immense. Mangoes are among the most consumed fruit globally, yet in the Western markets it has lagged behind, primarily due to the lack of consistent year-round high-quality sourcing. We are eager to bring some greater execution to this fragmented industry and help drive greater consumption. In fact, we recently reinvested in this business with new leadership that is already generating early wins through improving our third-party sourcing, enhancing our operational capabilities, and meeting the needs of retailers in a more consistent fashion, all of which is translating to growth. We think we are in an ideal position to compete for market share globally, and this focus has immediately yielded new customer engagements and is very complementary of our avocado program from a merchandising perspective. Supporting these strategies are our physical distribution and ripening assets, our expansive third-party sourcing network, and our vertically integrated growing operations in Peru. This allows Mission to provide year-round sourcing to established markets such as North America, but also strategically penetrate new regions as well. This is a playbook that has served us well over several decades and remains the core tenant of our long-term strategy. Although our international farming segment doesn't contribute materially until our fiscal second half of the year, when the harvest commences, we have already started a rigorous optimization process that is intended to drive down our operating costs while ensuring that we maintain the same quality standards that our customers have come to expect. We are encouraged by the progress we are making with this initiative and expect that it will translate to improved operating performance later this fiscal year. Although it is still early to provide a reliable forecast of volume from our Peruvian operations, weather conditions have improved as El Nino conditions have dissipated, which should lead to a more predictable harvest for this coming season. We believe that the improved growing conditions combined with enhancements to our operations will create a more constructive backdrop for our international farming segment performance later this year. In summary, Mission remains in a strong position with a network of global assets to drive growth, a strong balance sheet, and a focused team that is generating enhanced margins and cash flow through thoughtful capital allocation. On that note, I wanted to take a moment and comment on the executive appointment we announced last week. I'm excited to have John Pawlowski join our executive team as President and Chief Operating Officer beginning in April. John is an exceptional leader who brings more than 25 years in the global food and food service industry, driving logistic efficiencies, market access, and strategic partnerships at large global organizations such as J.M. Smucker. John comes to mission from LaPari Foods, where he was president and CEO for the past two and a half years. With his comprehensive background in the international food industry, I believe his skill set will greatly contribute to our continued growth as we work to enhance our operating strategies to maximize shareholder value. With that, I'll pass the call over to our CFO, Brian Giles, for his financial commentary.