Mission Produce, Inc.

Good afternoon and welcome to the Mission Produce Fiscal Second Quarter 2026 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 Andrew Pearson, Vice President of Investor Relations and Strategy for Mission Produce. Sir, please go ahead.

Thank you and good afternoon. Today's presentation will be hosted by John Pawlowski, President and Chief Executive Officer, and Brian Giles, Chief Financial Officer. The comments during today's call 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 also refer to certain non-GAAP financial measures. 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. I would now like to turn the call over to John.

Thank you, Andrew, and good afternoon, everyone. Before I get into the quarter, let me say a brief word about our leadership transition that is now complete. Following our annual meeting in April, I formally stepped into the CEO role, and Steve has moved into the executive chairman seat and remains actively engaged with the team and the board. His perspective continues to be invaluable as we navigate this next chapter. On behalf of the entire mission team, I want to say thank you to Steve again for the four-plus decades of leadership that have brought us here today, and I am incredibly proud to be carrying that legacy forward. I would also like to welcome Andrew Pearson, who recently joined mission as our Vice President of Investor Relations and Strategy. On today's call, I'll walk you through our second quarter results and the operating environment that shaped them. talk about our Colabo acquisition that closed earlier than anticipated on May 28th, and share how we're thinking about the path forward. Brian will then take you through the financial details and we'll open it up for questions. Our second quarter was shaped by an unusually high supply of avocado environment with the largest Mexican crop in years. Our sales team executed with excellence while also maintaining a manageable margin in the face of multi-year low prices. In April, we saw an unfavorable step change in our per-unit margins driven by a temporary imbalance of supply and demand of core fruit sizes, which pressured margins further as we worked to fill in the shortfalls. Our decision to continue to support our customers in the face of compressing margins was deliberate to help our customers meet heightened demand and facilitate longer-term value creation. Supply continues to transition away from Mexico and toward other growing regions, including California and the start of our Peruvian harvest. That transition is allowing us to lean back into the multi-region sourcing network that has long been one of our most durable competitive advantages. Supply of fruit and the sizing curves are now normalized and per unit margins are recovering. Our relationships with customers are solid and we expect to deliver strong performance the remainder of the year. Notably, in most avocado pricing environments, high or low, Mission maintains consistent and strong per unit margins. Extreme low prices like we just saw can be an exception, but those environments are rare and Mission is still able to fare better than peers given our vertical integration and multi-region sourcing network. Our model is intentionally designed to perform across most environments and remains a key competitive advantage of ours. Importantly, we're encouraged by what Q2's high-volume dynamics did for the category. U.S. avocado consumption reached new highs during the quarter, increasing strong double digits versus last year, while penetration continued to expand with more than 1.6 million new households entering the category. As we've seen in the past, when the category expands to new consumers and occasions like in Q2, periods of strong growth often follow. To us, that reinforces that avocados remain a category with substantial runway. We believe this is one of the more durable growth categories in the grocery store, benefiting from steady penetration gains, broader everyday consumption, and consumer preferences that continue to favor fresh, nutrient-dense foods. There is still meaningful opportunity to grow here in the U.S., as well as markets like Europe and Asia, where the category is still in much earlier stages. Turning now to our segments. In our marketing and distribution segment, we delivered 15% volume year-over-year growth in avocados sold for the quarter. Our commercial and operations teams did outstanding jobs supplying that fruit to our broad customer base and all the new consumers entering the category. And despite the Q2 margin pressure, the marketing and distribution segment's gross profit actually increased approximately 5% on a first-half basis versus the prior year period. Our international farming results in the first half of the year are not particularly meaningful, given the seasonality of this segment, with adjusted EBITDA concentrated in the third and fourth quarters in alignment to our Peruvian avocado harvest. Our segment's performance versus prior year was impacted by lower third-party blueberry packing and storage volume versus the prior year and our strategy to invest behind the growing mango category. Fruit development at our owned avocado production in Peru is progressing nicely, and we are expecting a robust crop this season, with total exportable production forecasted to be approximately 20% greater than last year. In the blueberry segment, the second quarter sits outside the peak Peruvian harvest window, which is concentrated in our fiscal first and fourth quarters. The newer acreage is continuing to mature, and we expect yields and per unit costs to improve as those farms reach full productivity. We continue to like where this segment is headed, both as a standalone category and for what it contributes to our broader platform. With that, I now want to turn towards the future, because this is what we are really excited about and where our entire mission team and board of directors are focused. Following our close of the Colabo transaction on May 28th, we are now operating as one combined company. Although we are in the early stages, I am energized by what we are building together, both in terms of how it positions us strategically and in terms of the immediate value we believe this combination unlocks for both our customers and our shareholders. Our experience this quarter underscored exactly why we believe in this combination. With the market inundated with Mexican supply, our own packing capacity in Mexico was stretched, forcing us to utilize a greater mix of third-party packing services, which impacts profitability. Next season, we will be able to manage higher volume environments, leveraging our larger footprint with the addition of Colabo's packhouses. Also relevant to Q2, the combined platform should give us greater flexibility to align supply to demand, not just managing total volume, but matching the right size curves to the right customer programs. And Colabo strengthens our position as the most reliable year-round source of fresh avocados across North America, which is what our largest retail and food service customers truly value most. Beyond the avocado category, the prepared foods opportunity is one that I am particularly excited about. Colabo's guacamole and ready-to-eat product lines sit within a large and growing market, and they're a natural adjacency to our core business. Having spent two decades in the branded food industry before joining Mission, I have a deep appreciation for what it takes to drive category leadership. We see meaningful runway to build this capability over time, and we believe it genuinely will be additive to what Mission is already doing today. We continue to see a minimum of $25 million of annualized cost synergies achievable within 18 months of close with meaningful upside potential. On that front, we have a dedicated integration workgroup made up of internal experts from each function to bring the industry insights and know-how, and external support to bring established and disciplined integration processes. The team has been in place and planning for day one for months already, so our first day owning Colabo simply allowed us to execute the planning that was already well underway. We expect our synergies to materialize from eliminating the redundant operations and SG&A cost structures that come with combining two organizations of this scale. With Colabo closing earlier than initially planned, it allows us to accelerate integration and synergy realization. We now expect to start seeing benefit in Q4 of this year, with savings ramping into 2027. Importantly, the mission board, our management team, our talented and focused integration team, and our new colleagues coming over from Colabo are fully aligned around what this combined platform can become. That alignment is going to be central to how we execute over the next 12 to 18 months. And I want to thank the teams across both organizations for the work that is setting us up for success. I also want to extend a warm welcome to the entire Colabo team. We are happy to have you on board and look forward to more collaboration in the days and weeks ahead. With that, I'll turn it over to Brian for the financial details.