Mission Produce, Inc. (NASDAQ:AVO) Q2 2023 Earnings Conference Call June 8, 2023 5:00 PM ET

Company Participants

Jeff Sonnek - Investor Relations

Steve Barnard - Chief Executive Officer

Bryan Giles - Chief Financial Officer

Conference Call Participants

Benjamin Bienvenu - Stephens, Inc

Tom Palmer - JPMorgan

Christian Contreras - Bank of America

Operator

Good afternoon and welcome to the Mission Produce Fiscal Second Quarter 2023 Conference Call. [Operator Instructions] Please also note today’s event is being recorded. At this time, I’d like to turn the conference call over to Jeff Sonnek, Investor Relations at ICR. Sir, please go ahead.

Jeff Sonnek

Thank you, and good afternoon. Today’s presentation will be hosted by Steve Barnard, Chief Executive Officer; and Bryan 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 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 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, go ahead.

Steve Barnard

Thank you for joining us for our fiscal 2023 second quarter’s earnings call. We delivered a solid second quarter with revenue of $221.1 million and adjusted EBITDA of $7.6 million, driven by a 19% increase in sales volumes. These metrics also demonstrate a sequential improvement in both volumes and per unit margins relative to fiscal first quarter. We realized increased market stability in the second quarter, which was a continuation of the conditions that returned to the industry in the first quarter earlier this fiscal year. We saw fairly consistent pricing through the Mexican season, and those conditions have continued into our current fiscal third quarter as well.

Notably, this is a departure from the prior year where low industry volumes and inconsistent harvest timing led to significant price volatility. This prompted a swift and disproportionate increase in pricing to record levels, which in turn led to per box margins that were toward the high end of our normal historic ranges. While this year’s stable market environment doesn’t afford us the same opportunity to drive per unit margins in the short term, the more rational pricing environment is advantageous for long-term consumption growth and allows Mission to leverage our global distribution footprint to penetrate new growth markets.