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Good afternoon, and welcome to the Mission Produce Fiscal Fourth Quarter 2025 Conference Call. 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 Jeff Sonnek, Investor Relations at ICR. Sir, please go ahead.

Thank you. Today's presentation will be hosted by Steve Barnard, Chief Executive Officer; John Pawlowski, President and Chief Operating 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 the Investor Relations section of investors.missionproduce.com, for reconciliations of non-GAAP financial measures to their most directly comparable GAAP measures. And with that, I'd now like to turn the call over to Steve Barnard, CEO.

Thank you, Jeff. I'd like to start the call by addressing the leadership transition news that we announced concurrent with today's earnings results. We've been focused on succession planning for several years now, and the time is right to implement that plan. Effective at our annual meeting in April, our President and Chief Operating Officer, John Pawlowski, will assume the role of Chief Executive Officer, and I will transition to Executive Chairman of the Board. Let me be clear though. This company is the culmination of my life's work. And I am very excited about this next chapter of Mission's story. In my new role, I'll continue to support John and the leadership team while working closely with our board to drive the business forward. Over the past four decades, we've built Mission into the global leader in avocados, and John's immediate impact on harnessing our potential is being felt across our entire organization. His decades of experience in the global food industry make him the ideal leader to guide Mission through its next phase of growth. With two consecutive years of exceptional financial performance, the successful completion of our major capital investment cycle, and a balance sheet that positions us to capitalize on future opportunities, there's no better time for this succession. I'd like to thank our entire organization for their support and focus over the years as we've reshaped the industry and raised the bar on customer service. With that, I'll turn it over to John to discuss the results.

Thanks, Steve, for your confidence and partnership. I want to start by saying how honored I am to have the opportunity to lead this organization. When I stepped into this role, I had high expectations. But what I've experienced over the past twenty months has surpassed them in every way. The depth of operational capability, the strength of our global relationships, and the caliber of our team are truly remarkable. And this quarter, this year, showcased exactly why that matters. Steve and the team built something special over the past forty years. And I don't take lightly the responsibility of carrying that forward. But I also couldn't be more excited about where we are headed. The foundation is strong, the team is executing at a high level, and the opportunities in front of us are significant. Now let me turn to our results. Because fiscal 2025 was a defining year for Mission Produce. We delivered record revenue of $1.39 billion, growing 13% on top of a strong 2024. Driving that was a 7% volume growth to achieve a record 691 million pounds of avocados sold through our marketing and distribution business. We also delivered record adjusted EBITDA in the fourth quarter, capping off a two-year period in which we generated more than $180 million of operating cash flow. These results didn't happen by accident. They reflect the power of our integrated global platform, and most importantly, the exceptional execution of our team. What truly sets Mission apart is our ability to execute on a truly global stage. We are a connected global team that can adjust and pivot in real time to seize opportunities, creating a genuine differentiator for our company. Throughout the year, our commercial team demonstrated remarkable agility. We managed demand and supply shifts throughout the Peruvian season seamlessly across our U.S. and European operations. This coordination allowed our team in the United Kingdom to grow revenue by over 60% in 2025, while also enhancing our sales efforts in Southern Europe. These efforts combined to drive a 40% increase in European volumes sold, creating a foothold that enables us to cultivate deeper relationships and positions us for long-term growth in that region. We leveraged our entire platform—our global sourcing network, our distribution infrastructure, our forward positioning, and our category management tools—to drive the best possible outcomes for our customers, maximize the value of fruit across all channels, and deliver quality products to global consumers. We are a volume-centric business. Volume and per-unit margins are the metrics we manage to. They represent areas that we can exert control over and are what underpin our ability to drive strong financial performance. While we can't control the fluidity of industry pricing, our commercial and sales teams are continuously harnessing our data to provide our customers with value-added insights to drive category growth in support of our broader efforts to drive per capita consumption globally. No matter the noise in the market, whether it's tariff uncertainty, pricing volatility, or supply disruptions, this team has repeatedly demonstrated the ability to execute for our customers. That's what I'm most proud of this year. Let me walk through how this played out across our segments. First, our 7% avocado volume growth for the full year and 13% in the fourth quarter alone. The North American market was stable with modest growth. But where we really saw momentum was with greater international penetration. Europe and Asia both delivered strong volume growth in the quarter and for the full year. Importantly, we wouldn't have been able to capture that growth without our Peruvian product leverage. Having that supply consistently gave us the ability to build programs with large retailers and reinforces footholds in growth markets that will serve as a foundation to drive greater household penetration for years to come. Our international farming segment had an outstanding year as well. Our Peruvian orchards returned to normal growing conditions after last year's weather challenges, and we more than doubled our exportable avocado production for the season, selling approximately 105 million pounds compared to 43 million pounds in the previous harvest season. The team's ability to program our own fruit across multiple global regions, balancing customer commitments, market dynamics, and value optimization in real time, is a core differentiator. Our Peruvian production provides consistency of supply, quality control, and the flexibility to direct fruit where it creates the most value. That's vertical integration at work. In blueberries, we saw higher volumes as new plantings came into production across our expanded acreage in Peru. We continue to see tremendous long-term potential in this category, as consumer preferences shift towards healthy, convenient snacking options. Our blueberry strategy is focused on filling in the seasonal calendar and maximizing the productivity of our Peruvian assets. We are approaching the completion of our multiyear expansion efforts and now have approximately 700 hectares in production, focused on premium varietals that deliver superior flavor profiles and extended shelf life. Yields on newer acreage will take time to mature, but the volumes are building and position us well for growth in the years ahead. I also want to touch briefly on our mango business. We continue to make meaningful progress. We managed supply and demand dynamics well this year and grew our market share to 5.2%, up approximately 150 basis points for the full year. That's real traction in a category where we see significant long-term potential. Our goals for mangoes are centered on building the domestic market. We seek to grow consumer awareness and drive household penetration. In fact, household penetration is approaching 40%, up from just 35% three years ago. We are confident that our innovation, consumer engagement, and customer programming are driving these results. This is the same playbook we employed with avocados and is the reason we are building out our sourcing capabilities in mangoes. Consumer engagement and supply consistency go hand in hand. It's the dual focus that's setting the stage for stronger growth as we look out towards the horizon. Beyond the commercial execution, I want to highlight the foundational work we've done over the past twenty months to strengthen our organization. We focused specifically on three areas. First, we've deepened our focus on culture and collaboration. This starts with fostering a more connected global team, sharing ideas, aligning our priorities, and working together to solve problems. That connectivity has shown up in our results day in and day out. Second, we've invested in data and tools. We're building systems that give our commercial teams better access to information in the U.S. and abroad to inform faster, smarter decision-making alongside our customers. And finally, we've built a more disciplined process around our cadence of decision-making. We're being more proactive and more structured in how we drive the business forward. These are not flashy initiatives, but they compound over time and are vitally important to achieving the results that we know our shareholders expect. Looking ahead, we see significant runway for growth. In North America, there's meaningful opportunity both in growing overall avocado consumption and in taking share from competitors. Per capita consumption continues to climb, and we're well-positioned to lead category growth with our customers. Internationally, we're building real penetration. The growth we achieved in Europe and Asia this year wasn't a one-time event. It was the result of deliberate investment and execution that we will build upon in future years. Complementing this growth is an internal focus on driving enhanced free cash flow in the years ahead. We enter fiscal 2026 having largely completed our heavy capital investment cycle. With investments in growth infrastructure in place, CapEx is expected to step down and mark the beginning of a more modest cycle of spend. Combined with a healthy balance sheet and a team that knows how to execute, we have real flexibility to create value for shareholders in the years ahead. With that, I'll turn it over to Bryan for the financial details.

Thank you, John, and good afternoon to everyone on the call. Fiscal 2025 fourth quarter revenue totaled $319 million, which was down 10% from prior year figures that were elevated by a high sales pricing environment for avocados. We experienced a 27% decrease in average per unit avocado sales prices during the period, which masked the 13% volume growth that was achieved. The volume and price dynamics resulted from higher industry supply, both from greater availability of Mexican fruit driven by a larger crop in the current harvest season and from higher Peruvian avocado production driven by more favorable weather conditions in the current year. Gross profit was $55.7 million in 2025, essentially flat with the prior year, while our gross margin increased 180 basis points to 17.5% compared to the same period last year. While I will address gross profit movement in our segment discussion, the increase in margin percentage was primarily driven by lower avocado per unit pricing compared to last year. As a reminder, profitability in our marketing and distribution segment is managed on a per unit basis, which can lead to volatility in margin percentage when sales prices fluctuate. SG&A expense increased by $500,000 or 2% compared to the same period last year. The increase was primarily due to higher general operating costs, including performance-based stock compensation expense. SG&A growth was tempered by lower statutory profit-sharing expense within Peru and Mexico operations. Adjusted net income for the quarter was $22.2 million or $0.31 per diluted share, compared to $19.6 million or $0.28 per diluted share last year. Beyond the operating performance, we benefited from a reduction in interest expense, down $400,000 or 15% in the quarter, reflecting our continued focus on maintaining our healthy balance sheet through debt reduction and the resultant lower rates we incur on outstanding borrowings. We also realized a 55% increase in equity method income to $1.7 million driven by strong performance from our joint venture investment in Henry Avocado Corporation, which experienced robust results this period. Adjusted EBITDA increased 12% to a record $41.4 million compared to $36.9 million last year, driven by increased avocado production in our International Farming segment and higher overall volumes sold in our marketing and distribution segment. Total segment sales decreased 15% to $271.9 million, driven by the pricing dynamics I described. As mentioned, we manage this business primarily to volume and per unit margins, leveraging our global platform and sourcing network to optimize per unit margin performance regardless of the pricing environment. On that basis, the segment performed very well. Segment adjusted EBITDA increased 11% to $28.3 million, reflecting the impact of higher avocado and mango volumes sold supported by solid management of per unit margins. We are proud to achieve solid EBITDA growth despite comping against the prior year period where per unit margins significantly exceeded our historical averages. Our international farming segment delivered another quarter of strong results. Total segment sales increased 97% to $59.7 million, and segment adjusted EBITDA more than tripled to $8.4 million. This was driven by a recovery in yields at our owned avocado orchards in Peru, leading to sales of owned production during the quarter that were greater than three times prior year figures. While average per unit sales prices were lower compared to prior year, the effect of the higher yields on per unit production costs far outweighed the impact on our financial results.

Separate from farming production,

we also continue to benefit from improved utilization of our facility infrastructure through providing a higher volume of avocado packing and cooling services to third parties. In blueberries, net sales increased 16% to $36.5 million, primarily due to higher volume produced on our farms as a result of our expanded total acreage. Segment adjusted EBITDA decreased to $4.7 million compared to $8.6 million last year as a result of lower per unit margins. While our volumes were higher due to new acreage coming into production, overall yield per hectare for the 2025/2026 harvest season is anticipated to be lower than prior year, which drove up our per unit cost. This is part of the natural maturation process for newer acreage, and we expect yields and per unit cost to improve over time as these farms mature. Shifting to our balance sheet and cash flow. Cash and cash equivalents were $64.8 million as of October 31, 2025. For the full year, we generated $88.6 million in operating cash flow, bringing our two-year cumulative total to more than $180 million. This strong cash generation, combined with our disciplined focus on debt reduction, has strengthened our balance sheet considerably. We reduced long-term debt by approximately $18 million during fiscal 2025, and our interest expense for the full year declined by $3.2 million or 25% compared to the prior year. A direct benefit of that debt reduction and the lower rates I mentioned previously. Our net leverage as of fiscal year-end is very healthy at well below one times EBITDA. Capital expenditures were $51.4 million for the year, in line with our expectations. As we've discussed, we are now exiting our heavy capital investment cycle, and for fiscal 2026, we expect capital expenditures to step down to approximately $40 million. This setup positions us for accelerated free cash flow generation going forward. Now let me provide some context on our near-term outlook. For 2026, avocado industry volumes are expected to increase by approximately 10% versus the prior year period, driven by a larger Mexican crop in the current harvest season. Pricing is expected to be lower year over year by approximately 25% compared to the $1.75 per pound average experienced in 2025, driven by higher supply conditions from the larger Mexican crop. Further, while we expect some sequential margin compression in the first quarter due to the current sourcing environment, this is consistent with typical seasonality patterns. For blueberries, the harvest season in Peru will peak during the first quarter. We expect volume increases from our own farms as new acreage comes into production, which should translate to higher revenue as average sales prices are expected to be flat to slightly higher. Profitability will continue to be weighed on by higher unit costs resulting from lower projected yields per hectare in the current harvest season. That concludes our prepared remarks. Operator, now over to you. Please open the call to Q&A.

Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star and the number one on your telephone keypad. You may press star and the number two if you would like to remove your question from the queue. For any participants using speaker equipment, before pressing your star keys. Our first question comes from Mark Smith with Lake Street Capital. You may proceed with your question.

First question for me, I was curious about your outlook for mangoes. You've had fantastic growth here the last several years. Kind of curious where we are in that cycle, and any insights you can give us into potential growth here, this next fiscal year.

Really, the glide path on the mango side is going to be similar to last year's glide path, right, where continuing to pursue market share penetration. We're continuing to try and push our global sourcing initiatives in regards to access to the right fruit at the right time. We feel like we've not only gained nice penetration with new customer base last year but the opportunities continue to be in front of us. And cross-selling where we're already doing our avocados. And providing programs to some of those players out there that either aren't happy with or are open to new players in that space, helping them program things out and provide category insights. So the glide path you saw in '24 and '25, I would say, is consistent with the glide path that we're pushing and pursuing in '26.

Excellent. And then I wanted to ask about the cash flow story. Obviously, really attractive here, especially as you guys reach the end of kind of an investment cycle. I'm curious about the biggest risk in kind of accomplishing this free cash flow growth.

You know, I'm hey, Mark. This is Bryan. You know, when we look, you know, we've delivered two consecutive years of very strong operating cash performance, and that's driven off the operating results of the business. I do think we benefited some this year by the lower pricing environment we saw at the end of the year, and that did help to boost operating cash a bit. But I think in general, it's strong operating performance of the business that's driving that. On the CapEx side, you know, as we look at free cash flow, we've been communicating for a number of years now that we, you know, we were going through a cycle, and we expected meaningful step downs. We've set a kind of a target for $40 million of capital spend for the upcoming year. We believe that that is still leaving us ample room to make growth CapEx investments at those levels. So I think that there is still flexibility in that number, and you will see future year periods where the spend will be lower than that. Still. So, I mean, I think we feel comfortable that we've got the business set up to a point where, you know, we can generate meaningful cash flow, and we can do it potentially at lower levels than where we're at today if by chance there was a year where, you know, there were weather or crop conditions that had a negative impact on the business.

Okay. And as we think about capital allocation with lower CapEx maybe invested this year, leverage now under 1x. How should we think about the use of cash going forward? And are there other places from buybacks or anything else where you guys may put cash to work?

I mean, you know, I think that, you know, when we look at today, our priority is growth. And I think that with the strong performance we've had the last few years, it's provided us with a tremendous amount of flexibility as we look forward. You know, I think that we're always looking for potential opportunities, whether it comes from growth in our existing categories or expanding geographic reach or potentially even bolting on adjacent ones. But our primary focus is doing things that are going to create the most shareholder value. You know? So at this point, I think we feel very comfortable with where our leverage ratio is. We've done a really good job over the last couple of years paying down debt. I think certainly that that affords us now the opportunity to kind of look at a number of different options as we go forward. As you saw this year, we did share buybacks, so history will tell you that we're comfortable doing that. And, yeah, we will continue to look for other ways to, again, maximize that value to shareholders as we go forward with a strong cash position.

Okay. And the last one for me, if I can squeeze one more in here, is just, you know, with the changes in management coming up and congratulations, John, by the way, on the move here. Should we look for any changes in strategy because it sounds like it's really just kind of steady as she goes.

Yeah. Thanks, Mark. I would offer that, you know, me and Steve have been working really closely together over the last, you know, my entire time here, specifically over the last year on understanding where this boat is and what's the right direction for this boat and how comfortable do we feel with, you know, the team steering that boat. And we're collectively very excited about the organization's direction right now and the team that's helping steer it. Super proud of the results that we've been able to generate and do it consistently for, you know, in a year like '25 where things kind of worked out the way that we had planned even though, you know, there's a lot of work that goes into making a plan actually work. And then in '24 where things weren't exactly to plan, but the team was able to deliver consistently. That being said, to Bryan's point, you know, we're really in an interesting reflection point based on the CapEx that's been spent over the last ten years to generate the infrastructure that's supporting the model that we're so proud of. And I would offer that the commercial outlook from a growth perspective over the next five to ten years is one that we are keenly focused on right now and trying to understand exactly how to deploy that capital appropriately and to line up the right investments to look at organically growing over the next five to ten years and also considering inorganic opportunities as they present themselves. So I think you'll hear more from me on that over the coming months. But the idea is we're really excited with where we are but really want to accelerate how we grow and how we attack some of the global challenges we see ahead of us. We are prepared to do that from a cash position standpoint and are working on how to do that together.

Excellent. Thank you, guys.

Thanks, Mark.

Our next question comes from Puran Sharma Stephens. You may proceed with your question.

Thanks for the question, and congrats on the strong quarter. And then also congrats on the leadership transition here. Maybe just wanted to start off with CapEx. You kind of just talked about it. Mentioned we can still make growth CapEx in that $40 million for next year. Are you able to give us a sense as to how much of that 40 could potentially be growth CapEx?

Yeah. Yeah, Corinne. I mean, we don't, I mean, there's a lot of things that we do that it's kind of a gray line between whether it's growth or maintenance. I think, you know, we've invested significantly in farming operations that are still fairly young at this point. There's maintenance associated, you know, with keeping them up and running, but there's also still new acreage that's being put in the ground and acreage that's being maintained that isn't yet in production. That I think we'd consider to be growth-oriented. I think on the commercial side of our business, when we look at it, you know, I think, you know, the last few years, there's been investments associated with, you know, certainly investments that we've made associated with growing the business in the UK. I think as we look at Europe going forward, there could certainly be opportunities there as well. And certainly, though, I think we're happy with the footprint that we have in North America today. Maybe needs to add some additional capacity as volume continues to grow over time. But if I had to ballpark it, Corinne, I'd say roughly $20 million of the spend that we have in the coming year is for maintenance, and roughly $20 million of it is geared towards growth. And I don't think that that's kind of an unreasonable mix as we look at years going forward in terms of what the maintenance CapEx requirements are.

Okay. Thank you. I appreciate that color there. And maybe just wanted to ask about, I mean, you mentioned key areas of growth. Looks like you were able to reach Europe and Asia this quarter. I did want to ask you that your core infrastructure is built out, including, you know, the UK packing house, Laredo, and some other investments that you have including Guatemala. Where do you see the most upside from growing into your footprint? Are there specific regions or facilities that you'd like to call out? I know you did mention Europe and Asia. But was just seeing if we could get a little bit more granularity here.

Yeah. Hi, Puran. This is John. Good to hear your voice. I would offer two kind of highlights there. Number one, we did call out, I think I made it in my comments that there's white space when we think about the opportunity to grow into the existing market share franchise here in the United States. We feel that this particular market is one where we have a right to play in a deeper level than we're playing today. And feel that the infrastructure that we built can both support that in meaningful ways with minimal CapEx required to support that type of a move and offering leverage on those assets. The second piece is when you think about our Peruvian production and the Peruvian fruit, there's an opportunity to explore and dive deeper into the European marketplace. And that is high on our list of thinking about how to penetrate and understanding exactly how we want those investments to flow that support both of those things coming together. On top of that, as the Guatemalan fruit comes online over the next two to three years, both of those locations play into operational efficiencies and overhead absorption as we draw into the business.

Great. Appreciate that color, John. And maybe if I could just ask about the household penetration goals. I think in the past, you've mentioned that avocados are maybe closer to 70%. And that you wanted to target penetration of maybe other mature fruits that approach about 80 to 90%. Given we're kind of entering a lower pricing environment, you know, how long do you think it takes to get to that level of the other more mature fruits? And then how does being in a lower pricing environment help accelerate that process?

Yeah. Bryce. Hi, Bryce. That's a good question and you're pulling back on some of the conversations we've had in the past, which thanks. I mean, I wish I had a crystal ball and could tell you exactly how long it's going to take. Right? But these things go in cycles, right, where you have markets that create opportunities with an abundance of fruit or more fruit than is typical, or you have markets where fruit is a little bit tighter. And we're in a cycle here in the next, at least the way we're thinking about 2026, where you're going to have more fruit than is traditionally available during the course of the year. And so these times provide some of the headwinds that, you know, Bryan mentioned in regards to, you know, pricing being a little compressed during that time. But the tailwind there becomes an opportunity to move a lot of fruit. And to run promotions and be strategic with retailers on how to think about household penetration and consumer engagement. If you go back the last fifteen years, you'll see it play out where you had lower-priced environments. Where you had jumps in household penetration, and then the years after that where you had higher-priced environments, lower fruit, you maintained a lot of that household penetration and you kept those consumers engaged with that fruit even at slightly elevated prices. So we're moving into that cycle where we're going to have, at least we believe we're going to have, there's no perfection here, higher availability of fruit, going to be running a lot more promotions over the next twelve months. And yes, you're right. We're in that 70% range on household penetration. I would love to see that, you know, 73, 75% achieved over the next couple of years if we stay in a consistent place with availability of fruits. That to me becomes a two to three-year goal to get to that point. But and which even gives us more tailwinds in the future in regards to thinking about the years after that to think about getting to those 80 numbers, which some of the other categories hold. Hopefully, that helps.

No. That's very helpful. I appreciate the color there. Congrats on the quarter again. Steve, congrats on moving to chairman of the board. And John, congrats on the move as well. Looking forward to working with you.

Thanks, Puran. We're looking forward to it.

Thanks, Puran.

At this time, there are no further questions. I'd like to end the question and answer session and turn the conference call back over to management for any closing remarks.

Ladies and gentlemen, that concludes our conference call today. We thank you for attending. You may now disconnect your lines.