UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_____________
FORM 8-K
_____________
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 22, 2022
(Exact name of Registrant as specified in its charter)
_____________
(State or Other Jurisdiction of Incorporation or Organization) | (Commission file number) | (IRS Employer Identification No.) | ||||||||||||
(Address of Principal Executive Offices) | (Zip code) | |||||||||||||
Registrant’s telephone number, including area code: ( | ||||||||||||||
| (Former name or former address, if changed since last report.) | ||||||||||||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
| Emerging growth company | |||||
| If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | ☐ | ||||
Item 2.02 Results of Operations and Financial Condition.
On December 22, 2022 , Mission Produce, Inc. (the “Company”) announced its financial results for the quarter and year ended October 31, 2022. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
The information contained in this Item 2.02, including the related information set forth in the press release attached hereto as Exhibit 99.1 and incorporated by reference herein, is being “furnished” and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 (“Exchange Act”) or otherwise. The information in this Item 2.02 shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, or into any filing or other document pursuant to the Exchange Act, except as otherwise expressly stated in any such filing.
Item 7.01 Regulation FD Disclosure
Also on December 22, 2022 , the Company posted an updated investor presentation and supplemental earnings materials to its website, which can be accessed at www.missionproduce.com. The updated investor presentation and supplemental earnings materials are attached hereto as Exhibits 99.2 and 99.3, respectively, and incorporated herein by reference.
The information contained in this Item 7.01, including the related information set forth in the presentation and supplemental earnings materials attached hereto as Exhibits and incorporated by reference herein, is being “furnished” and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 (“Exchange Act”) or otherwise. The information in this Item 7.01 shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, or into any filing or other document pursuant to the Exchange Act, except as otherwise expressly stated in any such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| Exhibit No. | Description | |||||||
| 99.1 | ||||||||
| 99.2 | ||||||||
| 99.3 | ||||||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| MISSION PRODUCE, INC. | ||
| /s/ Stephen J. Barnard | ||
Stephen J. Barnard | ||
| Chief Executive Officer and Director | ||
Date: December 22, 2022
Exhibit 99.1
Mission ProduceTM Announces Fiscal 2022 Fourth Quarter Financial Results
OXNARD, Calif. -- December 22, 2022 -- (GLOBE NEWSWIRE) Mission Produce, Inc. (Nasdaq: AVO) (“Mission” or the “Company”), a world leader in sourcing, producing, and distributing fresh Hass avocados with additional offerings in mangos and blueberries, today reported its financial results for the fiscal fourth quarter ended October 31, 2022.
Fiscal Fourth Quarter 2022 Highlights:
•Total revenue of $238.0 million was flat with the prior year period, including the Blueberries segment consolidation which was not comparable to the prior year period. Average avocado selling price decreased by 10%, partially offset by a 6% increase in avocado volume sold, compared to the same period last year
•Net loss of $(42.0) million, or $(0.59) per diluted share, which includes a non-cash charge of $49.5 million related to goodwill impairment; compared to net income of $16.9 million, or $0.24 per diluted share, for the same period last year
•Adjusted net income of $9.2 million, or $0.13 per diluted share, compared to $17.0 million, or $0.24 per diluted share, for the same period last year
•Adjusted EBITDA of $17.2 million compared to $26.4 million for the same period last year
Full Year 2022 Highlights:
•Total revenue of $1.0 billion, a 17% increase driven by average selling price increases of 28%, partially offset by an 11% decrease in avocado volume sold, compared to last year
•Net loss of $(34.6) million, or $(0.49) per diluted share, compared to net income of $44.9 million, or $0.63 per diluted share last year
•Adjusted net income of $18.5 million, or $0.26 per diluted share, compared to $52.7 million, or $0.74 per diluted share last year
•Adjusted EBITDA of $47.6 million compared to $85.3 million last year
•Owned exportable avocado production volume increased 15% to 117 million pounds for the 2022 harvest season
CEO Message
Steve Barnard, Founder and CEO of Mission Produce commented, “We advanced our position with retailers during fiscal fourth quarter through a successful activation of our Peruvian program. Mission’s ability to deliver consistent, high-quality fruit during the Mexican off-season is a clear advantage of our vertical integration. These capabilities, combined with our expanding network of ripening and distribution assets, provide us with the tools to penetrate new and growing markets in Europe and Asia.”
Mr. Barnard continued, “While we are pleased with the commercial traction we are having with customers for our Peruvian production, our fiscal fourth quarter financial performance was impacted by a confluence of variables, especially with regard to the rapid decline in pricing, which undermined our ability to drive the per-unit margins that we have generated historically. Persistent cost inflation, combined with a suboptimal size curve from our owned production and, a delay to our seasonal transition to the Mexican production resulted in an unfavorable mix, lower relative pricing, and temporary margin compression.
1
Exhibit 99.1
“With respect to 2023, we see a more normal marketplace emerging — highlighted by better and more consistent supply conditions — which provides a constructive foundation for the industry to drive consumption and expand growth in new geographies. We are prepared to meet demand during the upcoming peak Super Bowl season, and expect to produce improved operating performance for the full year 2023.”
Fiscal Fourth Quarter 2022 Consolidated Financial Review
Total revenue for the fourth quarter of fiscal 2022 was flat compared to the same period last year, including the Blueberries segment consolidation which was not comparable to the prior year period. Average selling price decreases of 10% were largely offset by a 6% increase in avocado volume sold. Per-unit avocado sales prices decreased due to higher industry supply and was exacerbated by an unfavorable mix of larger fruit from the Company’s owned production in Peru. Avocado volume sold increased due to the Company’s larger Peruvian harvest combined with higher volumes from Mexico as the industry transitioned to its new harvest season. The impact was partially offset by lower California volumes, which were attributed to the accelerated harvest brought about by high pricing in the early part of the season.
Gross profit for the fourth quarter decreased $6.9 million or 20%, to $26.9 million, and gross profit percentage decreased 296 basis points to 11.3% of revenue. The decrease in gross profit was primarily driven by lower per-unit margins in both the International Farming and Marketing & Distribution segments. International Farming segment margin was impacted by lower average selling prices combined with significant inflation experienced in logistics, farming and packing costs. Marketing & Distribution segment margin was pressured by our lack of California supply to market during the quarter.
Selling, general and administrative expense (“SG&A”) for the fourth quarter increased $4.0 million to $19.5 million, primarily due to higher employee-related costs driven by higher stock-based compensation expense and labor inflation, as well as non-capitalizable ERP implementation costs and nonrecurring process re-engineering costs related to the ERP system in the Company’s Marketing & Distribution segment. The consolidation of Moruga increased SG&A by $1.2 million, which included amortization of an intangible asset recognized at acquisition.
Net loss for the fourth quarter of fiscal 2022 was $(42.0) million, or $(0.59) per diluted share, compared to net income of $16.9 million, or $0.24 per diluted share, for the same period last year, and includes a non-cash charge of $49.5 million related to goodwill impairment within the International Farming segment.
Adjusted net income for the fourth quarter of fiscal 2022 was $9.2 million, or $0.13 per diluted share, compared to $17.0 million, or $0.24 per diluted share, for the same period last year.
Adjusted EBITDA was $17.2 million for the fourth quarter of fiscal 2022, compared to $26.4 million for the same period last year, due primarily to lower per-unit gross margins and higher SG&A costs, partially offset by the impact of higher avocado volume sold.
Fiscal Fourth Quarter Business Segment Performance
Marketing & Distribution
Net sales in the Marketing & Distribution segment decreased 4% to $221.2 million for the quarter, due to the same drivers impacting consolidated revenue.
Segment adjusted EBITDA decreased $4.4 million or 52% to $4.0 million, due to the same drivers impacting consolidated adjusted EBITDA.
International Farming
Substantially all sales of fruit from the International Farming segment are to the Marketing and Distribution segment, with the remainder of revenue largely derived from services provided to third parties and the Blueberries segment. Affiliated sales are concentrated in the second half of the fiscal year in alignment with the Peruvian avocado harvest season, which typically runs from April through August of each year. As a result, adjusted EBITDA for International Farming is generally concentrated in the third and fourth quarters of the fiscal year in alignment with the timing of sales. The Company operates approximately 300 hectares of mangos in Peru that are largely in an early-stage of production. The timing of the mango harvest is concentrated in
2
Exhibit 99.1
the fiscal second quarter and, as a result, mangos have a more pronounced impact on segment financial performance during this timeframe.
Total segment sales in the International Farming segment increased $9.4 million, or 31% in the three months ended October 31, 2022 compared to the same period last year, due to higher affiliated sales driven by an increase in avocado volume harvested and sold. Segment affiliated sales reflect the consideration returned to the International Farming segment net of logistics costs, the most significant of which is ocean freight.
Segment adjusted EBITDA decreased $5.8 million or 32% to $12.2 million primarily due to lower per -box margins, driven by significant inflation experienced in logistics, farming and packing costs. Inability to drive higher pricing was impacted by an unfavorable mix of larger fruit from the Company’s owned production in Peru.
Blueberries
Net sales in the Blueberries segment in the three months ended October 31, 2022 were $10.5 million. Segment adjusted EBITDA for the three months ended October 31, 2022 was $1.0 million.
Balance Sheet and Cash Flow
Cash and cash equivalents were $52.8 million as of October 31, 2022 compared to $84.5 million as of October 31, 2021.
Net cash provided by operating activities was $35.2 million for fiscal year 2022 compared to $47.0 million last year, reflecting net loss in the current year compared to net income in the prior year, partially offset by improvements in working capital. Working capital was primarily impacted by favorable movement in accounts receivable, partially offset by unfavorable movement in inventory. Accounts receivable as of October 31, 2022 was lower compared to prior year, as a result of per-unit sales prices trending lower during the fourth quarter. Changes in inventory were primarily driven by the consolidation of Moruga and the timing of its respective inventory build at our fiscal year end.
Capital expenditures were $61.2 million for the fiscal year 2022, compared to $73.4 million last year. Current year expenditures were concentrated in the purchase of farmland in Peru as well as land improvements and orchard development in Peru and Guatemala.
Outlook
For the first quarter of fiscal year 2023, the Company is providing the following industry outlook that will drive performance as the business shifts back to its Marketing & Distribution segment:
•The industry is expecting volumes to be higher in the fiscal 2023 first quarter versus the prior year period, primarily due to expectations for a larger Mexican harvest. The overall Mexican crop is expected to be approximately 20% higher compared to the prior harvest season, but early season volumes have lagged that figure due to primarily to low pricing.
•Pricing is expected to be lower on a sequential basis, but consistent with pricing experienced in the latter part of the prior quarter, which would imply a year-over-year decrease of approximately 20-25% compared to the $1.56 per pound average experienced in first quarter of fiscal 2022.
Conference Call and Webcast
As previously announced, the Company will host a conference call to discuss its fourth quarter of fiscal 2022 financial results today at 5:00 p.m. ET. The conference call can be accessed live over the phone by dialing (877) 407-9039 or for international callers by dialing (201) 689-8470. A replay of the call will be available through January 5, 2023 by dialing (844) 512-2921 or for international callers by dialing (412) 317-6671; the passcode is 13734660.
The live audio webcast of the conference call will be accessible in the News & Events section on the Company's Investor Relations website at https://investors.missionproduce.com. An archived replay of the webcast will also be available shortly after the live event has concluded.
3
Exhibit 99.1
Non-GAAP Financial Measures
This press release contains the non-GAAP financial measures “adjusted net income” and “adjusted EBITDA.” Management believes these measures provide useful information for analyzing the underlying business results. These measures are not in accordance with, nor are they a substitute for or superior to, the comparable financial measures by generally accepted accounting principles.
Mission Produce adjusted net income (loss) refers to net income (loss) attributable to Mission Produce, before stock-based compensation expense, unrealized gain (loss) on derivative financial instruments, foreign currency gain (loss), farming costs for nonproductive orchards (which represents land lease costs), certain noncash and nonrecurring ERP costs, transaction costs, material legal settlements, amortization of inventory adjustments recognized from business combinations, further adjusted by any special, non-recurring, or one-time items such as remeasurement, impairment or discrete tax charges that are distortive to results, and tax effects of these items, if any, and the tax-effected impact of these non-GAAP adjustments attributable to noncontrolling interest, allocable to the noncontrolling owners based on their percentage of ownership interest.
Adjusted EBITDA refers to net income (loss), before interest expense, income taxes, depreciation and amortization expense, stock-based compensation expense, other income (expense), and income (loss) from equity method investees, further adjusted by asset impairment and disposals, net of insurance recoveries, farming costs for nonproductive orchards (which represents land lease costs), certain noncash and nonrecurring ERP costs, transaction costs, material legal settlements, amortization of inventory adjustments recognized from business combinations, and any special, non-recurring, or one-time items such as remeasurements or impairments, and any portion of these items attributable to the noncontrolling interest, all of which are excluded from the results the CEO reviews uses to assess segment performance and results.
Reconciliations of these non-GAAP financial measures to the most comparable GAAP measure are provided in the table at the end of this press release.
About Mission Produce, Inc.
Mission Produce is a global leader in the worldwide avocado business. Since 1983, Mission Produce has been sourcing, producing and distributing fresh Hass avocados, and as of 2021, fresh mangos, to retail, wholesale and foodservice customers in over 25 countries. The vertically integrated Company owns and operates four state-of-the-art packing facilities in key growing locations globally, including California, Mexico and Peru and has additional sourcing capabilities in Chile, Colombia, the Dominican Republic, Guatemala, Brazil, Ecuador, South Africa and more, which allow the company to provide a year-round supply of premium fruit. Mission’s global distribution network includes 12 forward distribution centers that are strategically positioned in key markets throughout North America, China and Europe, offering value-added services such as ripening, bagging, custom packing and logistical management. For more information, please visit www.missionproduce.com.
Forward-Looking Statements
Statements in this press release that are not historical in nature are forward-looking statements that, within the meaning of the federal securities laws, including the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, involve known and unknown risks and uncertainties. Words such as "may", "will", "expect", "intend", "plan", "believe", "seek", "could", "estimate", "judgment", "targeting", "should", "anticipate", "goal" and variations of these words and similar expressions, are also intended to identify forward-looking statements. The forward-looking statements in this press release address a variety of subjects, including statements about our short-term and long-term assumptions, goals and targets. Many of these assumptions relate to matters that are beyond our control and changing rapidly. Although we believe the expectations reflected in such forward-looking statements are based upon reasonable assumptions, we can give no assurances that our expectations will be attained. Readers are cautioned that actual results could differ materially from those implied by such forward-looking statements due to a variety of factors, including: limitations regarding the supply of avocados, either through purchasing or growing; fluctuations in the market price of avocados; increasing competition; risks associated with doing business internationally, including Mexican and Peruvian economic, political and/or societal conditions; inflationary pressures; loss of one or more of our largest customers; general economic conditions or downturns; supply chain failures or disruptions; disruption to the supply of reliable and cost-effective transportation; failure to recruit or retain employees, poor employee relations, and/or ineffective organizational structure; inherent farming risks; seasonality in operating results; failures associated with information technology infrastructure, system security and cyber risks; new and changing privacy laws and our compliance with such laws; food safety events and recalls; failure to comply with laws and regulations, including those promulgated by the USDA and FDA, health and safety laws, environmental laws, and other laws and regulations; changes to trade policy and/or export/import laws and regulations; risks from business acquisitions, if any; lack of or failure of infrastructure; material litigation
4
Exhibit 99.1
or governmental inquiries/actions; failure to maintain or protect our brand; changes in tax rates or international tax legislation; risks associated with the ongoing conflict in Russia and Ukraine; the viability of an active, liquid, and orderly market for our common stock; volatility in the trading price of our common stock; concentration of control in our executive officers, directors and principal stockholders over matters submitted to stockholders for approval; limited sources of capital appreciation; significant costs associated with being a public company and the allocation of significant management resources thereto; reliance on analyst reports; failure to maintain proper and effective internal control over financial reporting; restrictions on takeover attempts in our charter documents and under Delaware law; the selection of Delaware as the exclusive forum for substantially all disputes between us and our stockholders; risks related to restrictive covenants under our credit facility, which could affect our flexibility to fund ongoing operations, uses of capital and strategic initiatives, and, if we are unable to maintain compliance with such covenants, lead to significant challenges in meeting our liquidity requirements and acceleration of our debt; and other risks and factors discussed from time to time in our Annual and Quarterly Reports on Forms 10-K and 10-Q and in our other filings with the Securities and Exchange Commission.
You can obtain copies of our SEC filings on the SEC’s website at www.sec.gov. The forward-looking statements contained in this press release are made as of the date hereof and the Corporation does not intend to, nor does it assume any obligation to, update or supplement any forward-looking statements after the date hereof to reflect actual results or future events or circumstances.
Contacts:
Investor Relations
ICR
Jeff Sonnek
646-277-1263
jeff.sonnek@icrinc.com
Media
Jenna Aguilera
Marketing Communications Manager
Mission Produce, Inc.
press@missionproduce.com
5
MISSION PRODUCE, INC.
Condensed Consolidated Balance Sheets (Unaudited)
| October 31, | |||||||||||
| (In millions) | 2022 | 2021 | |||||||||
| Assets | |||||||||||
| Current Assets: | |||||||||||
| Cash and cash equivalents | $ | 52.8 | $ | 84.5 | |||||||
| Restricted cash | 1.1 | 6.1 | |||||||||
| Accounts receivable | |||||||||||
| Trade, net of allowances | 62.9 | 73.8 | |||||||||
| Grower and fruit advances | 1.8 | 0.6 | |||||||||
| Other | 17.3 | 12.3 | |||||||||
| Inventory | 73.1 | 48.2 | |||||||||
| Prepaid expenses and other current assets | 11.1 | 11.6 | |||||||||
| Loans to equity method investees | — | 3.3 | |||||||||
| Income taxes receivable | 8.0 | 6.7 | |||||||||
| Total current assets | 228.1 | 247.1 | |||||||||
| Property, plant and equipment, net | 489.7 | 424.2 | |||||||||
| Operating lease right-of-use assets | 65.4 | 43.9 | |||||||||
| Equity method investees | 27.1 | 52.7 | |||||||||
| Loans to equity method investees | — | 1.8 | |||||||||
| Deferred income tax assets, net | 8.1 | 7.6 | |||||||||
| Goodwill | 39.4 | 76.4 | |||||||||
| Intangible asset, net | 2.0 | — | |||||||||
| Other assets | 19.7 | 19.8 | |||||||||
| Total assets | $ | 879.5 | $ | 873.5 | |||||||
| Liabilities and Equity | |||||||||||
| Liabilities | |||||||||||
| Accounts payable | $ | 34.4 | $ | 22.8 | |||||||
| Accrued expenses | 30.1 | 28.8 | |||||||||
| Income taxes payable | 1.0 | 1.9 | |||||||||
| Grower payables | 24.3 | 22.2 | |||||||||
| Short-term borrowings | 2.5 | — | |||||||||
| Long-term debt—current portion | 3.5 | 8.8 | |||||||||
| Operating leases—current portion | 4.7 | 3.6 | |||||||||
| Finance leases—current portion | 1.2 | 1.1 | |||||||||
| Total current liabilities | 101.7 | 89.2 | |||||||||
| Long-term debt, net of current portion | 136.9 | 155.1 | |||||||||
| Operating leases, net of current portion | 63.9 | 42.5 | |||||||||
| Finance leases, net of current portion | 1.4 | 2.2 | |||||||||
| Income taxes payable | 3.1 | 3.5 | |||||||||
| Deferred income tax liabilities, net | 29.4 | 26.8 | |||||||||
| Other long-term liabilities | 20.2 | 20.0 | |||||||||
| Total liabilities | 356.6 | 339.3 | |||||||||
| Equity | |||||||||||
| Mission Produce shareholders' equity | 502.1 | 534.2 | |||||||||
| Noncontrolling interest | 20.8 | — | |||||||||
| Total equity | 522.9 | 534.2 | |||||||||
| Total liabilities and equity | $ | 879.5 | $ | 873.5 | |||||||
6
MISSION PRODUCE, INC.
Condensed Consolidated Statements of (Loss) Income (Unaudited)
| Three Months Ended October 31, | Years Ended October 31, | ||||||||||||||||||||||
| (In millions, except for per share amounts) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
| Net sales | $ | 238.0 | $ | 237.0 | $ | 1,045.9 | $ | 891.7 | |||||||||||||||
| Cost of sales | 211.1 | 203.2 | 956.1 | 767.2 | |||||||||||||||||||
| Gross profit | 26.9 | 33.8 | 89.8 | 124.5 | |||||||||||||||||||
| Selling, general and administrative expenses | 19.5 | 15.5 | 77.5 | 63.6 | |||||||||||||||||||
| Goodwill impairment | 49.5 | — | 49.5 | — | |||||||||||||||||||
| Operating (loss) income | (42.1) | 18.3 | (37.2) | 60.9 | |||||||||||||||||||
| Interest expense | (2.0) | (1.0) | (5.5) | (3.7) | |||||||||||||||||||
| Equity method income | 1.5 | 3.3 | 5.1 | 7.5 | |||||||||||||||||||
| Remeasurement gain on business combination with Moruga | — | — | 2.0 | — | |||||||||||||||||||
| Other income | 0.8 | 2.1 | 4.4 | 1.3 | |||||||||||||||||||
| (Loss) income before income taxes | (41.8) | 22.7 | (31.2) | 66.0 | |||||||||||||||||||
| Provision for income taxes | — | 5.8 | 3.7 | 21.1 | |||||||||||||||||||
| Net (loss) income | $ | (41.8) | $ | 16.9 | $ | (34.9) | $ | 44.9 | |||||||||||||||
| Net (income) loss attributable to noncontrolling interest | (0.2) | — | 0.3 | — | |||||||||||||||||||
| Net (loss) income attributable to Mission Produce | $ | (42.0) | $ | 16.9 | $ | (34.6) | $ | 44.9 | |||||||||||||||
| Net (loss) income per share attributable to Mission Produce: | |||||||||||||||||||||||
| Basic | $ | (0.59) | $ | 0.24 | $ | (0.49) | $ | 0.64 | |||||||||||||||
| Diluted | $ | (0.59) | $ | 0.24 | $ | (0.49) | $ | 0.63 | |||||||||||||||
| Weighted average shares of common stock outstanding, used in computing diluted earnings per share | 70,664,681 | 71,153,478 | 70,647,469 | 71,068,481 | |||||||||||||||||||
7
MISSION PRODUCE, INC.
Condensed Consolidated Statements of Cash Flow (Unaudited)
| Years Ended October 31, | |||||||||||
| (In millions) | 2022 | 2021 | |||||||||
| Operating Activities | |||||||||||
| Net (loss) income | $ | (34.9) | $ | 44.9 | |||||||
| Adjustments to reconcile net (loss) income to net cash provided by operating activities | |||||||||||
| Provision for losses on accounts receivable | 0.1 | — | |||||||||
| Depreciation and amortization | 24.8 | 20.4 | |||||||||
| Amortization of debt issuance costs | 0.3 | 0.3 | |||||||||
| Equity method income | (5.1) | (7.5) | |||||||||
| Noncash lease expense | 5.3 | 4.3 | |||||||||
| Stock-based compensation | 3.6 | 2.6 | |||||||||
| Dividends received from equity method investees | 2.2 | 1.7 | |||||||||
| Losses (gains) on asset impairment, disposals and sales, net of insurance recoveries | 0.4 | 0.1 | |||||||||
| Deferred income taxes | (0.6) | 8.8 | |||||||||
| Goodwill impairment | 49.5 | — | |||||||||
| Remeasurement gain on acquisition of equity method investee | (2.0) | — | |||||||||
| Other | 0.1 | (0.1) | |||||||||
| Unrealized (gains) losses on derivative financial instruments | (4.7) | (0.8) | |||||||||
| Effect on cash of changes in operating assets and liabilities, net of acquisition: | |||||||||||
| Trade accounts receivable | 10.6 | (16.4) | |||||||||
| Grower fruit advances | (1.2) | 0.8 | |||||||||
| Miscellaneous receivables | (2.4) | 2.6 | |||||||||
| Inventory | (15.3) | (11.2) | |||||||||
| Prepaid expenses and other current assets | (0.4) | (2.5) | |||||||||
| Income taxes receivable | (1.1) | (3.8) | |||||||||
| Other assets | 0.2 | (3.5) | |||||||||
| Accounts payable and accrued expenses | 9.4 | 8.9 | |||||||||
| Income taxes payable | (1.3) | (0.1) | |||||||||
| Grower payables | 2.2 | 3.4 | |||||||||
| Operating lease liabilities | (4.0) | (3.2) | |||||||||
| Other long-term liabilities | (0.5) | (2.7) | |||||||||
| Net cash provided by operating activities | $ | 35.2 | $ | 47.0 | |||||||
| Investing Activities | |||||||||||
| Purchases of property and equipment | (61.2) | (73.4) | |||||||||
| Proceeds from sale of property, plant and equipment | 3.0 | 2.4 | |||||||||
| Insurance proceeds for the replacement of property, plant and equipment | — | 1.1 | |||||||||
| Cash acquired in consolidation of Moruga | 4.3 | — | |||||||||
| Investment in equity method investees | (0.4) | (0.2) | |||||||||
| Loans to equity method investees | — | (2.0) | |||||||||
| Loan repayments from equity method investees | 3.0 | 1.5 | |||||||||
| Other | (0.1) | 0.3 | |||||||||
| Net cash used in investing activities | $ | (51.4) | $ | (70.3) | |||||||
| Financing Activities | |||||||||||
| Borrowings on revolving credit facility | 80.0 | — | |||||||||
| Payments on revolving credit facility | (40.0) | — | |||||||||
| Short-term borrowings | 2.5 | — | |||||||||
| Principal payments on long-term debt obligations | (63.3) | (10.5) | |||||||||
| Principal payments on finance lease obligations | (1.2) | (1.2) | |||||||||
| Exercise of stock options | 0.1 | 0.2 | |||||||||
8
MISSION PRODUCE, INC.
| Years Ended October 31, | |||||||||||
| (In millions) | 2022 | 2021 | |||||||||
| Repayment of stock option notes receivable | — | 0.1 | |||||||||
| Payment of debt issuance, restructuring or extinguishment fees | (0.8) | (0.1) | |||||||||
| Contributions from noncontrolling interest holders | 0.9 | — | |||||||||
| Net cash used in financing activities | $ | (21.8) | $ | (11.5) | |||||||
| Effect of exchange rate changes on cash | (0.3) | — | |||||||||
| Net decrease in cash, cash equivalents and restricted cash | (38.3) | (34.8) | |||||||||
| Cash, cash equivalents and restricted cash, beginning of period | 92.2 | 127.0 | |||||||||
| Cash, cash equivalents and restricted cash, end of period | $ | 53.9 | $ | 92.2 | |||||||
| Summary of cash, cash equivalents and restricted cash reported within the consolidated balance sheets: | |||||||||||
| Cash and cash equivalents | $ | 52.8 | $ | 84.5 | |||||||
| Restricted cash | 1.1 | 6.1 | |||||||||
| Restricted cash included in other assets | — | 1.6 | |||||||||
| Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows | $ | 53.9 | $ | 92.2 | |||||||
9
MISSION PRODUCE, INC.
Reconciliation of Non-GAAP Financial Measures to GAAP (Unaudited)
The following tables reconcile the non-GAAP measures “adjusted net income” and “adjusted EBITDA” to their comparable GAAP measures. Refer also to “Non-GAAP Financial Measures” earlier in this press release.
Adjusted net income
| Three Months Ended October 31, | Years Ended October 31, | ||||||||||||||||||||||
| (In millions, except for per share amounts) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
| Net (loss) income attributable to Mission Produce | $ | (42.0) | $ | 16.9 | $ | (34.6) | $ | 44.9 | |||||||||||||||
| Stock-based compensation | 1.0 | 0.6 | 3.6 | 2.6 | |||||||||||||||||||
| Unrealized gains on derivative financial instruments | (1.5) | (1.2) | (6.0) | (3.0) | |||||||||||||||||||
| Foreign currency loss | 0.9 | (1.2) | 2.0 | 1.6 | |||||||||||||||||||
| Asset impairment and disposals, net of insurance recoveries | 0.2 | — | 0.4 | (0.2) | |||||||||||||||||||
| Farming costs for nonproductive orchards | 0.4 | 0.8 | 1.5 | 0.8 | |||||||||||||||||||
ERP costs(1) | 0.8 | — | 4.6 | — | |||||||||||||||||||
| Transaction costs | 0.1 | — | 0.6 | — | |||||||||||||||||||
| Amortization of inventory adjustment recognized from business combination | 0.4 | — | 0.4 | — | |||||||||||||||||||
| Legal settlement | — | — | — | 0.8 | |||||||||||||||||||
Goodwill impairment(2) | 49.5 | — | 49.5 | — | |||||||||||||||||||
Remeasurement gain on business combination with Moruga(2) | — | — | (2.0) | — | |||||||||||||||||||
| Debt extinguishment costs | — | 0.1 | — | 0.1 | |||||||||||||||||||
Tax effects of adjustments to net income attributable to Mission Produce(3) | (0.4) | 0.7 | (1.3) | (0.3) | |||||||||||||||||||
| Discrete tax adjustment for change in Peruvian tax rates | — | 0.3 | — | 5.4 | |||||||||||||||||||
Noncontrolling interest(4) | (0.2) | — | (0.2) | — | |||||||||||||||||||
| Mission Produce adjusted net income | $ | 9.2 | $ | 17.0 | $ | 18.5 | $ | 52.7 | |||||||||||||||
| Mission Produce adjusted net income per diluted share | $ | 0.13 | $ | 0.24 | $ | 0.26 | $ | 0.74 | |||||||||||||||
(1)Includes recognition of deferred implementation costs and non-recurring post-implementation process reengineering costs.
(2)Not deductible for income tax purposes.
(3)Tax effects are calculated using applicable rates that each adjustment relates to.
(4)Represents net income (loss) attributable to noncontrolling interest plus the impact of tax-effected non-GAAP adjustments, allocable to the noncontrolling owner based on their percentage of ownership interest.
10
MISSION PRODUCE, INC.
Adjusted EBITDA
| Three Months Ended October 31, | Years Ended October 31, | ||||||||||||||||||||||
| (In millions) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
| Marketing and Distribution adjusted EBITDA | $ | 4.0 | $ | 8.4 | $ | 23.5 | $ | 51.4 | |||||||||||||||
| International Farming adjusted EBITDA | 12.2 | 18.0 | 23.3 | 33.9 | |||||||||||||||||||
| Blueberries adjusted EBITDA | 1.0 | — | 0.8 | — | |||||||||||||||||||
| Total reportable segment adjusted EBITDA | $ | 17.2 | $ | 26.4 | $ | 47.6 | $ | 85.3 | |||||||||||||||
| Net (loss) income | (41.8) | 16.9 | (34.9) | 44.9 | |||||||||||||||||||
| Interest expense | 2.0 | 1.0 | 5.5 | 3.7 | |||||||||||||||||||
| Provision for income taxes | — | 5.8 | 3.7 | 21.1 | |||||||||||||||||||
Depreciation and amortization(1) | 7.6 | 6.7 | 24.8 | 20.4 | |||||||||||||||||||
Equity method income(2) | (1.5) | (3.3) | (5.1) | (7.5) | |||||||||||||||||||
| Stock-based compensation | 1.0 | 0.6 | 3.6 | 2.6 | |||||||||||||||||||
| Legal settlement | — | — | — | 0.8 | |||||||||||||||||||
| Asset impairment and disposals, net of insurance recoveries | 0.2 | — | 0.4 | (0.2) | |||||||||||||||||||
| Farming costs for nonproductive orchards | 0.4 | 0.8 | 1.5 | 0.8 | |||||||||||||||||||
ERP costs(3) | 0.8 | — | 4.6 | — | |||||||||||||||||||
| Transaction costs | 0.1 | — | 0.6 | — | |||||||||||||||||||
| Amortization of inventory adjustment recognized from business combination | 0.4 | — | 0.4 | — | |||||||||||||||||||
| Goodwill impairment | 49.5 | — | 49.5 | — | |||||||||||||||||||
| Remeasurement gain on business combination with Moruga | — | — | (2.0) | — | |||||||||||||||||||
| Other income | (0.8) | (2.1) | (4.4) | (1.3) | |||||||||||||||||||
Noncontrolling interest(4) | (0.7) | — | (0.6) | — | |||||||||||||||||||
| Total adjusted EBITDA | $ | 17.2 | $ | 26.4 | $ | 47.6 | $ | 85.3 | |||||||||||||||
(1)Includes $1.1 million and $1.4 million of depreciation and amortization of purchase accounting assets including property, plant and equipment step-up and an intangible asset for the three months and year ended October 31, 2022, respectively.
(2)Excludes earnings from Moruga following its consolidation on May 1, 2022. For earnings from Moruga recognized prior to May 1, 2022, the Company’s proportionate share of 60% of earnings were included as they were accounted for under the equity method.
(3)Includes recognition of deferred implementation costs and non-recurring post-implementation process reengineering costs.
(4)Represents net loss attributable to noncontrolling interest plus the impact of non-GAAP adjustments, allocable to the noncontrolling owner based on their percentage of ownership interest.
11
MISSION PRODUCE, INC.
Other Information (Unaudited)
Segment Sales
| Marketing and Distribution | International Farming | Blueberries(1) | Total | Marketing and Distribution | International Farming | Total | |||||||||||||||||||||||||||||||||||
| Three Months Ended October 31, | |||||||||||||||||||||||||||||||||||||||||
| (In millions) | 2022 | 2021 | |||||||||||||||||||||||||||||||||||||||
| Third party sales | $ | 221.2 | $ | 6.4 | $ | 10.5 | $ | 238.0 | $ | 230.4 | $ | 6.6 | $ | 237.0 | |||||||||||||||||||||||||||
| Affiliated sales | — | 33.4 | — | 33.4 | — | 23.8 | 23.8 | ||||||||||||||||||||||||||||||||||
| Total segment sales | $ | 221.2 | $ | 39.8 | $ | 10.5 | $ | 271.4 | $ | 230.4 | $ | 30.4 | $ | 260.8 | |||||||||||||||||||||||||||
| Intercompany eliminations | — | (33.4) | — | (33.4) | — | (23.8) | (23.8) | ||||||||||||||||||||||||||||||||||
| Total net sales | $ | 221.2 | $ | 6.4 | $ | 10.5 | $ | 238.0 | $ | 230.4 | $ | 6.6 | $ | 237.0 | |||||||||||||||||||||||||||
| Years Ended October 31, | |||||||||||||||||||||||||||||||||||||||||
| 2022 | 2021 | ||||||||||||||||||||||||||||||||||||||||
| Third party sales | $ | 1,016.1 | $ | 19.1 | $ | 10.8 | $ | 1,045.9 | $ | 872.0 | $ | 19.7 | $ | 891.7 | |||||||||||||||||||||||||||
| Affiliated sales | — | 95.6 | — | 95.6 | — | 84.9 | 84.9 | ||||||||||||||||||||||||||||||||||
| Total segment sales | $ | 1,016.1 | $ | 114.7 | $ | 10.8 | $ | 1,141.5 | $ | 872.0 | $ | 104.6 | $ | 976.6 | |||||||||||||||||||||||||||
| Intercompany eliminations | — | (95.6) | — | (95.6) | — | (84.9) | (84.9) | ||||||||||||||||||||||||||||||||||
| Total net sales | $ | 1,016.1 | $ | 19.1 | $ | 10.8 | $ | 1,045.9 | $ | 872.0 | $ | 19.7 | $ | 891.7 | |||||||||||||||||||||||||||
(1)Moruga was consolidated with the Company prospectively from May 1, 2022.
Other Information
| Three Months Ended October 31, | Years Ended October 31, | ||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Pounds of avocados sold (millions) | 169.2 | 160.1 | 584.3 | 653.0 | |||||||||||||||||||
Average sales price per pound(1) | $ | 1.28 | $ | 1.45 | $ | 1.71 | $ | 1.34 | |||||||||||||||
(1)Calculated by dividing net avocado sales from the Marketing & Distribution segment by the total pounds of avocados sold in the stated period.
Sales by type
| Three Months Ended October 31, | Years Ended October 31, | ||||||||||||||||||||||
| (In millions) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
| Avocado | $ | 216.9 | $ | 227.5 | $ | 998.4 | $ | 864.5 | |||||||||||||||
| Other | 21.1 | 9.5 | 47.5 | 27.2 | |||||||||||||||||||
| Total net sales | $ | 238.0 | $ | 237.0 | $ | 1,045.9 | $ | 891.7 | |||||||||||||||
12
December 2022 Investor Presentation © 2022 Mission Produce, Inc. The MISSION & TOWER DESIGN® and MISSION PRODUCE™ are trademarks of Mission Produce, Inc. All rights reserved.
Notice to and Undertaking by Recipients This presentation does not purport to be all-inclusive or to contain all of the information that the Recipient may require. The Company expressly disclaims any and all liability relating to or resulting from the use of this presentation. This presentation may not be reproduced, forwarded to any person or published, in whole or in part. This presentation does not constitute an offer to sell or the solicitation of an offer to buy any security. The information contained herein is for informational purposes and may not be relied upon in connection with the purchase or sale of any security. Forward-Looking Statements Statements in this presentation that are not historical in nature are forward-looking statements that, within the meaning of the federal securities laws, including the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, involve known and unknown risks and uncertainties. Words such as "may", "will", "expect", "intend", "plan", "believe", "seek", "could", "estimate", "judgment", "targeting", "should", "anticipate", "goal" and variations of these words and similar expressions, are also intended to identify forward-looking statements. The forward-looking statements in this presentation address a variety of subjects, including statements about our short-term and long-term assumptions, goals and targets. Many of these assumptions relate to matters that are beyond our control and changing rapidly. Although we believe the expectations reflected in such forward-looking statements are based upon reasonable assumptions, we can give no assurances that our expectations will be attained. Readers are cautioned that actual results could differ materially from those implied by such forward- looking statements due to a variety of factors, including: limitations regarding the supply of avocados, either through purchasing or growing; fluctuations in the market price of avocados; increasing competition; risks associated with doing business internationally, including Mexican and Peruvian economic, political and/or societal conditions; inflationary pressures; loss of one or more of our largest customers; general economic conditions or downturns; supply chain failures or disruptions; disruption to the supply of reliable and cost-effective transportation; failure to recruit or retain employees, poor employee relations, and/or ineffective organizational structure; inherent farming risks; seasonality in operating results; failures associated with information technology infrastructure, system security and cyber risks; new and changing privacy laws and our compliance with such laws; food safety events and recalls; failure to comply with laws and regulations, including those promulgated by the USDA and FDA, health and safety laws, environmental laws, and other laws and regulations; changes to trade policy and/or export/import laws and regulations; risks from business acquisitions, if any; lack of or failure of infrastructure; material litigation or governmental inquiries/actions; failure to maintain or protect our brand; changes in tax rates or international tax legislation; risks associated with the ongoing conflict in Russia and Ukraine; the viability of an active, liquid, and orderly market for our common stock; volatility in the trading price of our common stock; concentration of control in our executive officers, directors and principal stockholders over matters submitted to stockholders for approval; limited sources of capital appreciation; significant costs associated with being a public company and the allocation of significant management resources thereto; reliance on analyst reports; failure to maintain proper and effective internal control over financial reporting; restrictions on takeover attempts in our charter documents and under Delaware law; the selection of Delaware as the exclusive forum for substantially all disputes between us and our stockholders; risks related to restrictive covenants under our credit facility, which could affect our flexibility to fund ongoing operations, uses of capital and strategic initiatives, and, if we are unable to maintain compliance with such covenants, lead to significant challenges in meeting our liquidity requirements and acceleration of our debt; and other risks and factors discussed from time to time in our Annual and Quarterly Reports on Forms 10-K and 10-Q and in our other filings with the Securities and Exchange Commission. You can obtain copies of our SEC filings on the SEC’s website at www.sec.gov. The forward- looking statements contained in this presentation are made as of the date hereof and the Corporation does not intend to, nor does it assume any obligation to, update or supplement any forward-looking statements after the date hereof to reflect actual results or future events or circumstances. Industry Information Market data and industry information used throughout this presentation are based on management's knowledge of the industry and the good faith estimates of management. We also relied, to the extent available, upon management's review of independent industry surveys and publications and other publicly available information prepared by a number of third-party sources. All of the market data and industry information used in this presentation involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. Although we believe that these sources are reliable, we cannot guarantee the accuracy or completeness of this information, and we have not independently verified this information. While we believe the estimated market position, market opportunity and market size information included in this presentation are generally reliable, such information, which is derived in part from management's estimates and beliefs, is inherently uncertain and imprecise. Projections, assumptions and estimates of our future performance and the future performance of the industry in which we operate are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described above. These and other factors could cause results to differ materially from those expressed in our estimates and beliefs and in the estimates prepared by independent parties. Non-GAAP Financial Measures This presentation contains the non-GAAP financial measures “Adjusted EBITDA” and “Adjusted EBITDA Margin.” Management believes these measures provide useful information for analyzing the underlying business results. These measures are not in accordance with, nor are they a substitute for or superior to, the comparable financial measures by generally accepted accounting principles (“GAAP”). Reconciliations of these non-GAAP financial measures to the most comparable GAAP measures are included in the Appendix to this presentation where possible. The Company is unable to reconcile certain forecasted non-GAAP financial measures used herein, including adjusted EBITDA, without unreasonable efforts because a forecast of certain items, including taxes, interest, stock-based compensation, depreciation and amortization, income (loss) from equity method investees, other income, and other special, non-recurring or one-time items is not practical. Adjusted EBITDA refers to net income (loss), before interest expense, income taxes, depreciation and amortization expense, stock-based compensation expense, other income (expense), and income (loss) from equity method investees, further adjusted by asset impairment and disposals, net of insurance recoveries, farming costs for nonproductive orchards (which represents land lease costs), certain noncash and nonrecurring ERP costs, transaction costs, material legal settlements, amortization of inventory adjustments recognized from business combinations, and any special, non-recurring, or one-time items such as remeasurements or impairments, and any portion of these items attributable to the noncontrolling interest, all of which are excluded from the results the CEO reviews uses to assess segment performance and results. Adjusted EBITDA Margin refers to net income (loss), before interest expense, income taxes, depreciation and amortization expense, stock-based compensation expense, other income (expense), and income (loss) from equity method investees, further adjusted by asset impairment and disposals, net of insurance recoveries, farming costs for nonproductive orchards (which represents land lease costs), certain noncash and nonrecurring ERP costs, transaction costs, material legal settlements, amortization of inventory adjustments recognized from business combinations, and any special, non-recurring, or one-time items such as remeasurements or impairments, and any portion of these items attributable to the noncontrolling interest, as a percentage of net sales. Safe Harbor Statement
• A Global Leader in Avocado Marketing and Distribution • Year-Round Supply • Vertical Integration Mission Produce: At a Glance • Global Distribution Network of 12 Forward Distribution Centers (FDCs) and counting • Large Addressable Market • Economies of Scale 1 A global leader in the worldwide avocado business with nearly four decades of investments in people, technology, and infrastructure
A Long Track Record of Growth $1.04 billion FY 2022 Revenue 19 World-Class Facilities Across 9 Countries (2) ~19% FY 2022 Avocados Sourced from Owned Production ~8.9% ’11-’22 Avocado Volume CAGR ~9.7% ’11-’22 Revenue CAGR FY 2022 Adj. EBITDA (1)$48mm Source: Management and other publicly available information. (1)Non-GAAP reconciliations located in the appendix. (2) Includes our 4 global sales offices. Note: Fiscal year ended October 31. Revenue reflects Mission Produce only. 1 lug = 25lbs, or 1 box. Revenue Volume 2 Fiscal Year 2022
Focused Growth Strategy Capitalize on strong growth trends in our core U.S. market by expanding our nationwide distribution network Leverage our global supply chain and distribution capabilities to continue developing international markets Diversify sourcing to enhance our global market-leading position and year-round supply position Continue to vertically integrate our supply chain 3
2021 Global Per Capita Hass Avocado Consumption (lbs) 18.0 8.6 6.3 3.3 1.4 0.6 Mexico U.S. Canada EU Japan China $14.2B $21.4B 2018A 2026A We Operate In a Large and Growing Market with Supportive Tailwinds Significant Growth Opportunity (2,3) (1) Knowledge Sourcing Intelligence LLP. Avocado Market Size, Share, Opportunities, COVID-19 Impact, And Trends By Type. August 2022. (2) Rabobank. Avocado Consumption to Continue Setting Records. May 2021. (3) Hass Avocado Board. 2021 Consumption Estimates. Import Data Divided by Population. (4) Hass Avocado Board. Avocado Nutrition Facts Chart. (5) Numerator Insights. 12 months ending Sept. 18, 2022. (6) Pew Research Center. A Brief Statistical Portrait of U.S. Hispanics. Supporting Tailwinds Driving Market Growth 1. Health and Wellness: Satisfies the growing interest in healthy eating and nutrient-rich foods, avocados have more than 20 vitamins and minerals, which are essential to a daily diet and associated with heart health, weight health, and skin health.(4) 2. Millennial Consumption: 74% of millennial households purchased avocados vs. 67% of non-millennial households in 2021 (5) 3. Growing Hispanic Population:(6) 93% of Hispanic households purchased avocados in the twelve months ending Sept. 18, 2022. The average annual avocado spend per Hispanic household is 73% higher than for non-Hispanic households (5) Global Hass Avocado Market Size 6% CAGR 4 2020A 2027E (1)
Strong Global Distribution Network and Customer Base Top 10 customers represent less than 60% of total revenue in FY 2022 High-quality, global, diverse and long-standing customer relationships Serves retail, wholesale, and foodservice customers in over 25 countries 5
Extensive Infrastructure With State-of-the-Art Facilities 4 packhouses in Peru, California, and Mexico • Proximity of packhouses to our growers deepens the relationships and differentiates us from other buyers 12 FDCs and Ripening Centers Globally • Our FDCs allow us to store and allocate volume efficiently for our customers based on real-time demand • Strategic location of FDCs and ripening centers in key markets promotes prompt responses to customer demands Packhouse Advantages • High-definition grading cameras • State-of-the-art washing, sorting, packing, and bagging Line • Industry-leading post-harvest practices • Plug-Ins for ocean containers We are one of the only players of scale with the infrastructure to meet customer demands and support continued growth 6 Forward Distribution and Ripening Center Advantages • Ability to ripen to customer specification • Ability to store and deliver volume opportunistically as customer demand evolves • Proximity to clients
Our unique distribution scale and capabilities enable us to grow volumes with new and existing customers across multiple channels —The U.S. is our largest market, where our ripening and distribution centers are strategically located in key markets, in close proximity to our highest-volume customers nationwide. —Our unique facility footprint enables us to flex our ripening and storage capacity to fulfill demand during peak periods. — Our cold chain capabilities promote optimal fruit condition and precise levels of ripeness at arrival. —Our newest FDC in Laredo became fully operational in September 2021, increasing our North American capacity by ~40%. Its strategic placement provides greater flexibility to customers and supports periods of heavy volume within Mexico’s seasonality. Calgary 40,000 ft2 Portland 58,000 ft2 Oxnard 230,000 ft2 Denver 42,000 ft2 Dallas 34,000 ft2 Atlanta 70,000 ft2 Chicago 42,000 ft2 Toronto 37,000 ft2 Swedesboro 100,000 ft2 Laredo 261,000 ft2 Our North American Distribution Footprint 7
ü Provide specific grades of fruit and tailored specs with cost and margins in mind ü Offer around-the-clock customer support, localized distribution, and consistent supply to promote customer retention ü Provide ripening expertise to satisfy demand for high-quality, ready-to- eat fruit üProvide ripe, ready-to-eat fruit that is aesthetically pleasing üProvide value-added services, including customized packaging, category insights, and logistical management üOffer year-round availability of fruit via diversified sourcing to satisfy growing consumer demand Key Customer Channels Foodservice Retail 8
Overview of Value-Added Services We provide customers with leading operations and industry insights geared toward driving sales • Ripening to customer specifications • Bagging and custom packaging • Logistics management (especially trucking) • Hands-on training to facilitate proper fruit handling • Merchandising and promotional support • Around-the-clock customer support and availability • Avocado Intel Insights on market trends and consumer behavior Bags designed to meet varying consumer lifestyles Merchandising programs to drive growth Educational materials to promote a positive avocado experience 9
• U.S. avocado consumption has seen significant growth over the past decade • Mission is driving year-round availability in international markets to meet growing demand 3.8 8.6 US - 2010 US - 2021 18.0 8.6 6.3 3.3 1.4 0.6 Mexico US Canada EU Japan S. Korea Significant Growth Opportunity (1) International Avocado Consumption is Poised to Grow 10 (1) Hass Avocado Board. 2021 Consumption Estimates. Import Data Divided by Population. (2) Rabobank. Plenty of Avocado Advocates Around the World. May 2022. U.S. Per Capita Consumption in Pounds 2021 Global Per Capita Consumption in Pounds (1,2)
Europe • During the past decade, the European (EU – 27+UK) avocado market has grown at an average rate of 12% per year, and the total market is currently estimated at 861,000 metric tons(1)– a clear indicator of the European market’s growth potential. • Mission continues to increase exports from Peru, Guatemala, Colombia, and other regions to fill in supply gaps to meet growing demand with a consistent year-round supply • We established a state-of-the-art FDC in the United Kingdom (UK), planned to open in 2023, to support new direct retail relationships and expand our UK customer base. Asia • Consumption rates are increasing as acceptability and awareness grow. Avocado imports to Asia have increased from ~53,000 tons in 2012 to ~137,000 tons in 2022.(2) • We own strong and longstanding relationships with key importers and customers in Japan, Korea, and China. • We continue to maximize and expand on our avocado distribution network in China with our strategic partners. Existing Chinese distribution facilities serve as a platform to meet growing demand in China. Mission Produce consistently evaluates opportunities to capitalize on meaningful growth and consumption in international markets. Growth Drivers: We are Well-Positioned to Capitalize on International Distribution Opportunities 11(1) Rabobank. Plenty of Avocado Advocates Around the World. May 2022. (2) FruiTrop. Avocado World Statistics. September-October 2022 – No. 283.
Diversified Sourcing and Year-Round Supply Colombia Colombia can supply avocados year- round with one-week transit time to the U.S. Provides additional service to the European and Asian markets South Africa Partnership with one of the largest growers of avocados in South Africa Provides service to Europe during Peru’s off-season Peru Unique growing conditions provide supply to meet strong demand during the summer months, complementing the Mexican off-season Mission operates one of the world’s largest avocado packing facilities Chile Partnerships provide high-quality fruit with long-term pricing and stability for customers Guatemala Complementary seasonality to Peru services the European and Asian markets Mission is currently planting acres and working with partners in Guatemala California Partnerships with the state’s top growers Mission operates one of the largest avocado packing facilities in North America Mexico Mexico provides a year-round supply and represents approximately 80% of the U.S. market’s volume (1) Primary service to North American markets Mission owns two packing facilities in Mexico – the Uruapan facility can pack 1.7 million pounds of avocados per day Key sourcing geographies Mexico California Peru Other 12(1) Hass Avocado Board. Volume Data. 2021.
International Farming and Vertical Integration: Peru Case Study 14 We own 100% of our avocado and mango farming operations and packhouse, as well as a controlling interest in our blueberry farming operation. Being vertically integrated enables us to leverage our resources, and employ our workforce, on a year-round basis with complementary commodities, such as mangos and blueberries. 13 • Operating since 2011 • ~10,000 acres of avocados and mangos • ~1,000 acres of blueberries
EBITDA Margin Accretion Increase year-round supply coverage with complementary growing seasons Vertical integration capital planning We are focused on applying our successful Peru model in other emerging origins, such as Colombia and Guatemala Our vertically integrated investments provide us with long-term differentiated capabilities and unique competitive advantages Higher Margins Quality Control Oversight Into Supply Chain Enhanced Customer Service Unique Pricing Capabilities Diversified Sourcing We Take a Disciplined Approach Towards Our Long-Term Investments in Vertical Integration OUR APPROACH 14 • Since 2018 • Owned Area for Development: ~1,500 acres through JV • Since 2020 • Contracted Area for Development: ~1,700 acres GUATEMALA International Farming Mission’s Total Global Volume 584.3M lbs (23.5M lugs) 2022A volume (1) 19% (1) Inclusive of the 101mm lbs (4.0m lugs) of avocados supplied by the International Farming segment. COLOMBIA
Experienced, Values-Based Leaders Who Nurture a Culture of Innovation and Growth Bryan Giles Chief Financial Officer Juan Wiesner Director of Latin American Operations Steve Barnard Founder and Chief Executive Officer Jesus Garcia Director of Mexican Operations • Seasoned industry pioneers and veterans, many of whom have 30+ years of industry experience • On-the-ground support and expertise in key locations • Committed to corporate responsibility and sustainability • Foster an entrepreneurial culture that is focused on innovation and growth Anita Lemos Vice President of Human Resources Joanne Wu General Counsel Our Core Values 15 FUN INNOVATIVE RELIABLE SUCCESSFUL TRUSTWORTHY Tim Bulow President and Chief Operating Officer Fernando Garcia Director of Mexican Operations
Environmental, Social, Governance (ESG) Highlights • Food Waste: In FY 2021, we applied shelf-life extension technology to 34.8 million pounds of avocados to combat food waste • Packaging: We are working to reduce the plastic in our bags by 50% by 2025 – as of FY 2021, we are 34% of the way to reaching this goal • Energy & Emissions: In FY 2021, we decreased trash sent to landfills by 19% and increased recycling by 33% • Water: Mission's precision farming practices enable us to use 40% less water per avocado in California and 40.5% less in Peru compared to the industry average • Food Safety & Quality: In FY 2021, our Peru packhouse received the highest score on an unannounced audit by the British Retail Consortium (BRC), a widely recognized and GFSI-benchmarked food safety scheme • Our People: In May of 2021, we sponsored the produce industry's first- ever Diversity, Equity, and Inclusion initiative through the International Fresh Produce Association For nearly four decades, Mission has invested in providing the finest for its people, product, and planet. Highlights from Our FY 2021 ESG Report 16
The Mission Advantage: Barriers to Entry Key Relationships: Our relationships extend across thousands of avocado growers and regions globally Time and Capital Investments: Capital investment, ripening and logistics expertise, and significant lead time from seed to fruit Economics of Scale: Company-owned ripening, fulfillment, and distribution network Customer Relations and Market Intelligence: Market intelligence data in consumer purchasing behaviors, market trends, and POS Cultivation and Farming Expertise: Our staff is dedicated to progressive and biodiverse farming practices to cultivate strong yields Vertical Integration: Our owned farms and partnerships with key players give us enhanced control over supply and farming practices 17
20 APPENDIX
21 Non-GAAP Reconciliations: Adjusted EBITDA and Adjusted EBITDA Margin
Non-GAAP Financial Measure This document contains the non-GAAP financial measure “Adjusted EBITDA.” Management believes this measure provides useful information for analyzing the underlying business results. This measure is not in accordance with, nor is it a substitute for or superior to, the comparable financial measure by generally accepted accounting principles (“GAAP”). A reconciliation to the comparable non-GAAP financial measure is included in this document. Adjusted EBITDA refers to net income (loss), before interest expense, income taxes, depreciation and amortization expense, stock-based compensation expense, other income (expense), and income (loss) from equity method investees, further adjusted by asset impairment and disposals, net of insurance recoveries, farming costs for nonproductive orchards (which represents land lease costs), certain noncash and nonrecurring ERP costs, transaction costs, material legal settlements, amortization of inventory adjustments recognized from business combinations, and any special, non-recurring, or one-time items such as remeasurements or impairments, and any portion of these items attributable to the noncontrolling interest, all of which are excluded from the results the CEO reviews uses to assess segment performance and results. About Mission Produce, Inc. Mission Produce is a global leader in the worldwide avocado business. Since 1983, Mission Produce has been sourcing, producing and distributing fresh Hass avocados, and as of 2021, fresh mangos, to retail, wholesale and foodservice customers in over 25 countries. The vertically integrated Company owns and operates four state-of-the-art packing facilities in key growing locations globally, including California, Mexico and Peru and has additional sourcing capabilities in Chile, Colombia, the Dominican Republic, Guatemala, Brazil, Ecuador, South Africa and more, which allow the company to provide a year-round supply of premium fruit. Mission’s global distribution network includes 12 forward distribution centers that are strategically positioned in key markets throughout North America, China and Europe, offering value-added services such as ripening, bagging, custom packing and logistical management. For more information, please visit www.missionproduce.com. Forward-Looking Statements Statements in this presentation that are not historical in nature are forward-looking statements that, within the meaning of the federal securities laws, including the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, involve known and unknown risks and uncertainties. Words such as "may", "will", "expect", "intend", "plan", "believe", "seek", "could", "estimate", "judgment", "targeting", "should", "anticipate", "goal" and variations of these words and similar expressions, are also intended to identify forward-looking statements. The forward-looking statements in this presentation address a variety of subjects, including statements about our short-term and long-term assumptions, goals and targets. Many of these assumptions relate to matters that are beyond our control and changing rapidly. Although we believe the expectations reflected in such forward-looking statements are based upon reasonable assumptions, we can give no assurances that our expectations will be attained. Readers are cautioned that actual results could differ materially from those implied by such forward-looking statements due to a variety of factors, including: limitations regarding the supply of avocados, either through purchasing or growing; fluctuations in the market price of avocados; increasing competition; risks associated with doing business internationally, including Mexican and Peruvian economic, political and/or societal conditions; inflationary pressures; loss of one or more of our largest customers; general economic conditions or downturns; supply chain failures or disruptions; disruption to the supply of reliable and cost-effective transportation; failure to recruit or retain employees, poor employee relations, and/or ineffective organizational structure; inherent farming risks; seasonality in operating results; failures associated with information technology infrastructure, system security and cyber risks; new and changing privacy laws and our compliance with such laws; food safety events and recalls; failure to comply with laws and regulations, including those promulgated by the USDA and FDA, health and safety laws, environmental laws, and other laws and regulations; changes to trade policy and/or export/import laws and regulations; risks from business acquisitions, if any; lack of or failure of infrastructure; material litigation or governmental inquiries/actions; failure to maintain or protect our brand; changes in tax rates or international tax legislation; risks associated with the ongoing conflict in Russia and Ukraine; the viability of an active, liquid, and orderly market for our common stock; volatility in the trading price of our common stock; concentration of control in our executive officers, directors and principal stockholders over matters submitted to stockholders for approval; limited sources of capital appreciation; significant costs associated with being a public company and the allocation of significant management resources thereto; reliance on analyst reports; failure to maintain proper and effective internal control over financial reporting; restrictions on takeover attempts in our charter documents and under Delaware law; the selection of Delaware as the exclusive forum for substantially all disputes between us and our stockholders; risks related to restrictive covenants under our credit facility, which could affect our flexibility to fund ongoing operations, uses of capital and strategic initiatives, and, if we are unable to maintain compliance with such covenants, lead to significant challenges in meeting our liquidity requirements and acceleration of our debt; and other risks and factors discussed from time to time in our Annual and Quarterly Reports on Forms 10-K and 10-Q and in our other filings with the Securities and Exchange Commission. You can obtain copies of our SEC filings on the SEC’s website at www.sec.gov. The forward-looking statements contained in this presentation are made as of the date hereof and the Corporation does not intend to, nor does it assume any obligation to, update or supplement any forward-looking statements after the date hereof to reflect actual results or future events or circumstances. Mission Produce: A Global Leader in Avocados $238M Total Revenue ±0% YoY Avocado Volume Sold +6% YoY $17.2M Adjusted EBITDA -35% YoY Company & Sourcing Highlights Appointed Cheryl Hoefs as Senior Vice President of Sales and Marketing; Advanced sales department to enhance customer support and drive profitable growth for the Company Average Selling Price -10% YoY 169M LBS $1.28/LB FISCAL Q4 2022 SNAPSHOT Secured new avocado and mango business and expanded existing retailer programs; Established a ripe mango program with a nationwide retailer Entered a long-term 3PL partnership with NatureSweet®Tomatoes in Mission’s Laredo mega center; Began to consolidate an anticipated 70% of NatureSweet’s product coming from Mexico to the U.S. Announced plans to open a 13th forward distribution center in the United Kingdom (UK), anticipated in Spring 2023; International expansion expected to support Company’s UK customer base