Mission Produce, Inc. Q1 FY2026 earnings call

• Leadership transition: Steve Barnard moves to Executive Chairman, John Pawlowski steps into CEO role. - Fiscal 2026 first quarter results: Grew avocado volumes 14%, expanded gross margin, grew adjusted EBITDA. Marketing and distribution segment adjusted EBITDA increased 33%. Broader demand for avocados is favorable with high household penetration. International farming segment working to maximize returns. Blueberry segment continues to grow but impacted by lower yields. Pending Colabo acquisition: In progress, expected to close in fiscal third quarter, brings strategic and synergistic benefits including expanded distribution network and prepared foods opportunity, with at least $25 million annualized cost synergies achievable within 18 months of close.

Marketing Distribution Segment: Net sales decreased 21% to $234.8 million, segment adjusted EBITDA increased 33% to $12.9 million. International Farming Segment: Total sales increased 15% to $10.6 million, segment adjusted EBITDA increased $0.5 million, or 28%, to $2.3 million. Blueberry Segment: Total sales increased 12% to $40.8 million, segment adjusted EBITDA decreased to $3.3 million compared to $6.2 million last year due to lower per acre yield.

• Second quarter of fiscal 2026: Avocado industry volumes expected to increase by ~10%-15% vs prior year, pricing expected to be lower by ~30%-35%. Anticipate contraction in per unit margins in marketing distribution segment due to lower pricing environment. Blueberry harvest timing accelerated, expecting volume reductions from owned farms and lower packhouse utilization, leading to lower profitability. Consolidated adjusted EBITDA performance anticipated to be below prior year level.

Q: Regarding the Colabo acquisition, does it mean more upside to the 25 million synergy estimate and what are the synergy buckets?

A: John says feel good about the $25 million estimate assumptions, buckets around operating footprint and duplicative costs, and confident in meaningful upside beyond 25.

Q: About guidance and fixed cost deleveraging from increased volumes?

A: Brian says most costs are variable, focus on per unit margin, lower price environment makes it challenging to leverage competitive advantages, Q2 per unit margins expected to revert to historical levels.

Q: On blueberry segment yield pressure timeline and normalized margin profile?

A: John says 12-18 months for yields to improve, Brian says cost per hectare and per unit are considered, blueberries ramp productivity faster than avocados.

Q: On long-term capital allocation strategy balance?

A: John says initial priority was paying down debt, with acquisition will ramp back up, but combined entities will create more operating cash flow to bring debt down, return to shareholder piece rising on priority list.