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Mission Produce Q4 financial report shows revenue rise

Owned avocado production volume increased 38% in fiscal fourth quarter versus prior year

OXNARD, Calif., Dec. 22, 2021 (GLOBE NEWSWIRE) — Mission Produce, Inc. BB #:118126, the world leader in sourcing, producing, and distributing fresh Hass avocados with additional offerings in mangos, today reported its financial results for the fiscal fourth quarter ended October 31, 2021.

Fiscal Fourth Quarter 2021 Highlights:

  • Total revenue of $237.0 million, a 15% increase compared to the same period last year, impacted by average selling price increases of 21%, partially offset by a 5% decrease in avocado volume sold, compared to the same period last year
  • Gross profit was $33.8 million, and gross profit percentage decreased to 14.3% of revenue
  • Net income of $16.9 million, or $0.24 per diluted share, compared to $18.8 million, or $0.29 per diluted share, for the same period last year
  • Adjusted net income of $17.0 million, or $0.24 per diluted share, compared to $21.9 million, or $0.34 per diluted share, for the same period last year
  • Adjusted EBITDA of $26.4 million compared to $32.1 million for the same period last year

Full Year 2021 Highlights:

  • Total revenue of $891.7 million, a 3% increase compared to prior year, impacted by a 5% increase in avocado volume sold, partially offset by a 2% decrease in average per-unit avocado sales prices
  • Net income of $44.9 million, or $0.63 per diluted share, compared to $28.8 million, or $0.45 per diluted share last year
  • Adjusted EBITDA of $85.3 million compared to $91.5 million last year

CEO Message

Steve Barnard, Founder and Chief Executive Officer of Mission Produce, commented, “Our business faced significant headwinds in the fourth quarter. Mexico’s challenging supply dynamic, port delays and logistics issues, and the variability in consumer shopping patterns due to the ever-changing COVID conditions negatively impacted our profitability. Despite these challenges, our business remains resilient. We are well positioned to navigate through short-term disruptions while we continue to leverage our competitive advantages to further expand our industry leading position. Importantly, our owned production in Peru performed in line with our expectations, producing record volumes in fiscal 2021 and creating a reduced reliance on the fluctuating Mexican supply. Our vertical integration and multiple sources of supply year-round give us an unparalleled competitive advantage within the industry. Further, the strategic investments we have made to increase our capabilities and capacities, such as our mega facility in Laredo, Texas, which significantly increases our capacity during peak times during the year, and the continued expansion of our footprint in key international markets, gives us confidence in our future long-term success. As we look to 2022, we are confident in our ability to drive sustainable long-term growth with our forward thinking strategies and global footprint.”

Fiscal Fourth Quarter 2021 Consolidated Financial Review

Total revenue for the fourth quarter of fiscal 2021 was $237.0 million compared to $206.8 million for the same period last year, representing a 15% increase, primarily due to a 21% increase in average per-unit avocado sales prices, partially offset by a 5% decrease in avocado volume sold. From a volume perspective, industry supply was negatively impacted by the delayed start of the Mexican harvest season combined with the trailing effects from a smaller Californian crop, partially offset by increased supply from Peru. Higher per-unit pricing was driven by lower supply conditions that existed during the quarter as compared to prior year.

Gross profit decreased 14% compared to the same period last year to $33.8 million, and gross profit percentage declined 480 basis points to 14.3% of revenue. The declines were primarily due to lower per-unit margins related to sourcing of Mexican fruit, which were exacerbated by smaller industry volumes as well as smaller fruit sizes. Additionally, gross margin was impacted by incremental infrastructure costs related to the Company’s new Laredo facility within its Marketing & Distribution segment, as lower Mexican volumes affected utilization rates. Gross margin was also negatively impacted by widespread port delays in the fourth quarter, which created quality issues related to the extended age of inventory on late season Peruvian fruit which impacted sales returns. These impacts were partially offset by higher volume of avocados sold from Company-owned farms within its International Farming segment compared to prior year, which had lower per-unit cost than fruit purchased from third-party growers. The decline in gross profit percentage was driven by higher per-unit sales prices, as per-unit margin represented a lower proportion of the sales value. Per-unit sales price levels are a key determinant in reported gross profit percentage.

Selling, general and administrative expense (“SG&A”) for the fourth quarter decreased $1.3 million to $15.5 million, due primarily to non-comparable share-based compensation associated with the Company’s IPO that was recognized in the prior year period. Excluding this anomaly, the Company continues to realize higher professional fees, labor costs, and liability insurance premiums associated with being a public company. Cost growth was further impacted by the Company’s change in SEC filer status from an emerging growth company to a large-accelerated filer as of October 31, 2021.

Net income for the fourth quarter of fiscal 2021 was $16.9 million, or $0.24 per diluted share. This compares with $18.8 million, or $0.29 per diluted share, for the same period last year. The impact of lower gross margin was partially offset by higher equity method income from the Company’s blueberry investment in Peru and higher other income related to favorable foreign currency movement in the current year period.

Adjusted net income for the fourth quarter of fiscal 2021 was $17.0 million, or $0.24 per diluted share, compared to $21.9 million, or $0.34 per diluted share, for the same period last year.

Adjusted EBITDA was $26.4 million for the fourth quarter of fiscal 2021, compared to $32.1 million for the same period last year, driven primarily by the lower volumes and per-unit margins within the Marketing & Distribution segment and higher SG&A costs exclusive of share-based compensation, partially offset by strong growth of owned production volume, as compared to the prior year period.

See the full report here.