Mission Produce Q4 2020 Earnings Call Transcript

Mission Produce (AVO -1.47%)
Q4 2020 Earnings Call
Jan 19, 2021, 5:00 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good morning, and welcome to the Mission Produce fiscal fourth-quarter 2020 conference call. [Operator instructions] 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, the floor is yours.

Jeff Sonnek -- Investor Relations

Thank you, and good afternoon. Today's presentation will be hosted by Steve Barnard, chief executive officer; and Bryan Giles, chief financial officer. Chief Operating Officer Mike Browne is also participating on the call today and will be available for Q&A. The comments during today's call and the accompanying presentation contain forward-looking statements within the meaning of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995.

All statements other than statements of historical facts are considered forward-looking statements. These statements are based on management's current expectations and beliefs, as well as a number of assumptions concerning future events. Such forward-looking statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from the results discussed in the forward-looking statements. Some of these risks and uncertainties are identified and discussed in the company's filings with the SEC.

We'll also refer to certain non-GAAP financial measures today. Please refer to the tables included in the earnings release, which can be found on our investor relations website, investors.missionproduce.com, for reconciliations of non-GAAP financial measures to their most directly comparable GAAP measures. With that, I now like to turn the call over to Steve Barnard, CEO.

Steve Barnard -- Chief Executive Officer

Thank you, Jeff. Thank you for joining us on our first conference call as a public company. We're very happy to be here today to share some insights in the Mission Produce's wonderful business that we will continue to nourish and grow for many years ahead. We enjoyed speaking with many of you while out on the virtual road through during our IPO in October, and we look forward to meeting more of you during our participation at investor conferences in the future.

As the original founder of this business 37 years ago, I'm extremely proud of the Mission Produce organization that we built today and the leading global leadership position that we hold today. The avocado industry is tremendous with its large $14 billion global addressable market and the secular consumption trends that underpin the consistent growth that we've enjoyed for decades. However, I believe we are just getting started. Despite all the growth that the category has enjoyed over the past decade here in the U.S., which represents just over 40% of the global market, per capita consumption is still only about half of what Mexico consumes.

Demographic trends are in our favor with millennials and the growing Hispanic population here in North America, both of which have an incredible impact on our industry. Moreover, trends toward health and wellness, clean foods, nutrient-dense superfoods are perfectly aligned with our business. We are the only global pure-play provider of avocados in the world, and we didn't become the industry leader by accident. Mission is a story of true innovation.

We have been first every step of the way, blazing the trail with innovations that the entire industry enjoys today. We were the first to use avocado ripening centers. We were the first to import avocados from Mexico, Chile, and Peru. We were the first to utilize state of the art post-harvest techniques, and hydro cooling, and shelf life extension.

And we were the first to build a category management program to generate intel and opportunities for category growth. Mission is an organization that considers FIRST to be cultural foundation. It stands for fun, innovative, reliable, successful, and trustworthy. This is what has allowed us to stay ahead of our competition and grow into the global organization we are today.

We have been building relationships, investing in infrastructure, and establishing our dominant market position for 37 years. Fragmented players make up most of the industry, but our customers are demanding consistency and efficiency. There is no other company that can supply large volumes consistently year-round to the scale that Mission can. This takes infrastructure that's not easily replicated.

Our global network of grower relationships, packing houses, water distribution centers, and ripening centers. In fact, Mission has been so successful in building a presence in new markets that we were forced to identify new sources of supply. And today, we find ourselves as a vertically integrated grower and distributor of Hass avocados with our own operations in Peru, which is ideally suited to meet year-round demand during Mexico's off season. For all we've accomplished to date, we have significant opportunity for growth ahead.

We are poised to capitalize on the strong trends in our core U.S. market by expanding our nationwide distribution network. We are continuously looking at optimizing our infrastructure, opening new facilities and forward distribution centers to improve throughput, better service our customers, and drive sales. We are leveraging our global supply chain and distribution capabilities to continue developing international markets.

In Europe, we've been empowering retailers to grow the category through direct access to high-quality, ripe product by the way of our export capabilities in Peru, Guatemala, and Colombia. And in Asia, we are leveraging our more than 35-year presence in Japan in existing Chinese distribution facilities to service us as a platform to build our Asian distribution network. Both of these regions present immense long term growth opportunities for us with consumption rates that are a fraction of what the U.S. has grown into today.

And finally, we will continue to invest in our diversified sourcing capabilities to enhance our global leading market position and year-round supply position. Avocados are no longer a seasonal fruit, and we are continually evaluating opportunities to optimize our sourcing capabilities with third-party growers, as well as investing in our own farms and to ensure that we can control the quality that our customers come to expect. We've invested more than $350 million in our business over the past 10 years to build the infrastructure that shareholders are able to enjoy today. This infrastructure enables our financial model, which we expect to generate compounded adjusted EBITDA growth in the low double digits over the long term.

As a result, we're able to maintain an extremely healthy capital structure with nearly no debt and continue to fund our capital priorities that will fuel our growth for many years to come. With that, I'll pass the call over to our CFO, Bryan Giles, for some commentary around our recent financial results.

Bryan Giles -- Chief Financial Officer

Thank you, Steve, and good afternoon to everyone on the call. I'll start with a brief review of our fiscal fourth-quarter 2020 performance ended October 31, 2020, and touch on some of the drivers within our two operating segments. Then I'll provide a snapshot of our strong financial position and conclude with some thoughts around our outlook. As Steve mentioned, we had a great fiscal fourth-quarter 2020 which met our plan and reflects the strong global infrastructure we have in place to service our blue chip customer base.

Total revenue was $206.8 million, compared to $231.7 million for the fourth quarter of 2019, representing an 11% decrease. The decrease in revenue was driven by a lower average selling prices, which declined 24%, partially offset by volume growth of 16%. I'll touch on the price volume dynamics in a moment, but we'd like to reiterate that our business has managed the volume targets as we leverage our global presence to drive share of fresh avocados to our retail and foodservice customers. While prices fluctuate given the influences of global supply and demand, this is not something Mission can control or forecast with any degree of certainty.

That said, our leadership position as a global, value-added marketer and distributor of fresh avocados insulates our gross profits as these sought after value-added services such as ripening, storage, and distribution are largely unaffected by price changes. Our fourth-quarter gross profit decreased 7% compared to prior year despite an 11% decrease in total revenue, driving a gross profit margin improvement of 70 basis points to 19% of revenue. SG&A for the fourth quarter increased $6.1 million to $16.8 million, reflecting higher stock-based compensation expense due to awards that rested upon successful completion of our IPO and higher professional fees. For comparative purposes, stock-based compensation was $3.9 million in the fourth-quarter 2020 versus no expense in the prior-year period as we were a private company.

Net income for the fourth-quarter 2020 was $18.8 million, $0.29 per diluted share. This compares with net income of $23.9 million, or $0.38 per diluted share, for the same period last year. Adjusted net income was $21.9 million, or $0.34 per diluted share, for the fourth quarter of 2020, compared to adjusted net income of $24.7 million, or $0.39 per diluted share, for the same period last year. Adjusted EBITDA was $32.1 million for the fourth quarter of 2020, compared to $36.8 million for the same period last year.

In terms of our segment drivers, our marketing and distribution segment net sales decreased 12% to $202 million for the quarter. As I mentioned, the local revenue was driven by a lower average selling prices, which declined 24% and were partially offset by volume growth of 16%. As we look back across the fiscal year, strong industry supply in California and Peru had an inverse effect on average price. These decreases were concentrated in the second half of fiscal-year 2020, which impacted the fourth quarter and drove the year-over-year revenue decline despite meeting our volume goals for the quarter-end year.

Compared to the 12% sales decline, our segment adjusted EBITDA decreased to more modest 4% to $19.4 million. This is due to the insulating effect of our per box margins in our marketing and distribution segment where we can drive down fruit cost in correlation with lower market prices. This ability, combined with our scale, diversity of source, and value-added differentiation, provides the structural advantage to our model that we expect to remain in force over the long term. Our other operating segment is called international farming and represents our own farms that we manage in Peru.

Actually, the dynamics of this business are quite different from those in the marketing and distribution segment. Here, we behave as an operator and our ability to scale our operations in an efficient and profitable manner are central to our current and future success. While we are more exposed to price in this segment compared to our marketing and distribution segment, as Steve mentioned, this is a highly strategic initiative for Mission. Our growing base of global customers required year-round supply, and today's key growing regions can't keep up with international demand.

As a result, we made a commitment close to a decade ago to establish a presence where we control our own supply that we are able to sell the customers through our marketing and distribution segment operations. As we look forward in the short run, growth within our international farming segment will be dictated by yield improvement within our maturing orchards, while longer term growth will be supported by additional producing acreage that will come online and subsequently mature. For the fourth quarter, international farming segment sales increased 24% to $22 million due to volume growth of 46%, driven by higher yields on existing orchards versus prior year, which is a driver that we expect to remain in force for several years as the orchards approach targeted production at full maturity. Harvest timing also came into play on volume when we look at the business from a quarterly perspective.

This year, we experienced the delayed harvest due to the timing of fruit maturity, which led to a larger percentage of fruit harvested in the fourth quarter versus the third quarter. Net sales increased 85% to $4.8 million due to higher packing service revenues provided the third-party growers, driven by their higher volumes. Segment adjusted EBITDA decreased 23% to $12.7 million due to lower sales pricing during the quarter, which was impacted by higher overall supply conditions resulting from large industry volumes from California and Peru relative to prior year and harvest time in New Mexico. Shifting to our financial position.

In October 2020, we completed our IPO of common stock, in which we sold 7.5 million shares at $12 per share, generating total net proceeds of $78.1 million after deducting issuance cost. Including the IPO proceeds, cash and cash equivalents were $124 million in October 31, 2020, compared to $64 million last year. Total debt was $174.1 million. Mission's financial model has historically generated strong operating cash flow, which has provided this great flexibility to support our long term growth objectives with the -- with the required infrastructure and sourcing capabilities.

Despite significant investments in the business over the past decade as we build out our global footprint, our net leverage ratio is very healthy at 0.5 times our full-year 2020 adjusted EBITDA. Net cash provided by operating activities was $78.9 million for fiscal 2020, which is a decrease of $13.7 million compared to prior year. This decrease is primarily attributed to our lower adjusted net income, but was partially offset by lower working capital requirements, which were driven by an overall decrease in market pricing conditions. Capital expenditures were $67.3 million for the fiscal-year 2020, compared to $29.7 million for the same period last year as we invest in the construction of our new Texas distribution center, farm development and packing house expansion in Peru, and land improvements on new land leased in Guatemala.

Our Texas distribution center is on track to be completed in the third quarter of fiscal 2021. In terms of our outlook, we are providing our expectations for fiscal first-quarter 2021, which calls for consolidated volume in the range of 155 million to 165 million pounds, translating to revenue in the range of $165 million to $175 million, and consolidated adjusted EBITDA in the range of $11 million to $12.5 million. I'd also share a couple considerations as you think about the sequencing of our business from the standpoint of our fiscal year, which ends in October. November and December tend to look similar from a volume standpoint.

However, we have a significant lift in the business associated with the Super Bowl in January. So speaking with you today in the January, we are still extremely active before we close the quarter, which is why we are providing a wider range of expectations for volume, revenue, and adjusted EBITDA. As we've discussed here today, pricing is not something we can control, so we think that providing you with a volume-based metric is a better representation of our ability to meet our growth objectives than revenue. Further, I'd like to reemphasize that we have better control of our margins within the marketing and distribution segment, which we expect to translate to more consistency on the adjusted EBITDA line than what we may experience on the revenue line, again, due to changes in pricing driven by market forces.

That said, we are providing long-term financial targets today that we believe outline our goals and underpin the management of our business. We believe that over the long term, we can achieve compound volume growth in the high single-digit range in line with our expectations for industry growth rates. Adjusted EBITDA margins in the low double-digit range, excluding any material nonrecurring events or extreme market conditions. Compound adjusted EBITDA growth in the low double-digit range.

That concludes our prepared remarks. Operator, now over to you. Please open the call to Q&A.

Questions & Answers:

Operator

At this time, we'll be conducting a question-and-answer session. [Operator instructions] So one moment please while we poll for questions. And our first question comes from Bryan Spillane with the Bank of America. Please state your question.

Bryan Spillane -- Bank of America Merrill Lynch -- Analyst

Hi. Thanks, Operator, and -- and good afternoon, everyone. So a couple of questions for me. Maybe -- maybe the first one is just as we're thinking about this year, the -- the 2021 relative to the long-term EBITDA growth expectation, I guess would -- would we -- would it be fair to assume just knowing where pricing is now that this '21 would -- would -- would potentially be a year or maybe would be more difficult to -- to achieve that -- that -- that EBITDA growth expectation that you have longer term?

Steve Barnard -- Chief Executive Officer

Well, I think one of our obstacles right now is the -- the volume coming into the marketplace. Prices are pretty cheap by comparison to what we've been used to for most of the time over the last five years. But hopefully, we can make enough with volume, which would absorb a lot of the overhead. I think you'll probably see a reduced margin per box, but we're going to have more boxes.

So --

Bryan Spillane -- Bank of America Merrill Lynch -- Analyst

Right.

Bryan Giles -- Chief Financial Officer

Yeah.

Steve Barnard -- Chief Executive Officer

I think we'll end up being pretty close.

Bryan Giles -- Chief Financial Officer

And I'll -- I'll add on to that. I think that, certainly, lower pricing creates some different challenges for our international farming segment than it does for our marketing and distribution business. Again, as we sit here today, our farming operations really don't pick up significantly until we get into our Q3. I mean it's tough for us to anticipate where pricing is going to be at that point in time.

But if -- if pricing stayed at levels where it's not today, it -- it would put -- it would put pressure and create channels. But that being said, we've seen large movements in pricing over fairly short periods of time. So we're -- we're hesitant to -- to really make any projections at this point of where we think pricing may be as we move through the summer months.

Bryan Spillane -- Bank of America Merrill Lynch -- Analyst

OK. And then just -- just two on cost. I think you call that lower field cost in Mexico in the quarter and then I know we've seen freight costs in the U.S. kind of moving up just more broadly, so maybe could you just touch on those two topics and -- and how we should be thinking about those as we're -- we're -- we're modeling out '21?

Steve Barnard -- Chief Executive Officer

Well, I think there's two areas that are pretty common in the avocado world. Super Bowl has an effect on prices going up right now because the demand is record-setting. Volume is going up in the field also. And then the other time it'll go up in Mexico is right after Easter in that they generally take most of that week off and don't harvest and it creates a gap in the -- in the U.S.

inventory, and it historically has not caught up and -- and the prices generally go up after that period of time on the calendar.

Bryan Giles -- Chief Financial Officer

Yeah, I would kind of reiterate or -- or kind of add on to that that we -- in terms of field pricing, it adjusts pretty much in sync with what market pricing or retail price -- maybe not so much retail, but market pricing of fruit to our customers. So we're, on a daily basis, e -- evaluating prices we can afford to pay in the field to -- to hit our margin targets. There's points in time where that gets squeezed a little bit and there's points in times where we're able to expand it a bit. I -- but I think that it generally when we're buying third-party fruit, those costs are pretty variable and they can move in line with where our market pricing is at.

I think to some of the other input costs, Steve mentioned [Inaudible] transportation is one of the larger ones I think we have seen some increases recently. Not -- nothing that's created significant challenges for us in -- in achieving our margin goals, but it is something that we continually keep an eye on as we're looking at what we can afford to pay for fruit in the field and as we determined pricing for our customers.

Bryan Spillane -- Bank of America Merrill Lynch -- Analyst

OK. And then last one for me, just relative to the Super Bowl. If the Buffalo Bills win, does Mike Browne gets a week off?

Steve Barnard -- Chief Executive Officer

You'll have to ask him, he's on the line.

Mike Browne -- Chief Operating Officer

I'm going -- I'm going to need the week off.

Steve Barnard -- Chief Executive Officer

He's had one.

Bryan Spillane -- Bank of America Merrill Lynch -- Analyst

All right, guys. Thanks -- thanks -- thanks for -- for the help.

Steve Barnard -- Chief Executive Officer

OK.

Mike Browne -- Chief Operating Officer

Thanks, Bryan.

Operator

And our next question is from Tom Palmer with J.P. Morgan. Please state your question.

Tom Palmer -- J.P. Morgan -- Analyst

Hey, guys. Thanks for the question. I just wanted to follow up on the supply picture in Mexico. What is really driving the -- the high supply into the U.S.? Is it that the harvest was abnormally strong? Has demand from other parts of the world in some way have been impaired and therefore more -- a higher percentage of Mexico's harvest is coming into the U.S.? And then as -- as we think about kind of the timing of that flow through, when does Mexico become less important relative to seeing like California and Peru ramp up? And do you have any early read on yields in those regions?

Steve Barnard -- Chief Executive Officer

Well, historically, what -- what will happen. Mexico will generally has a peak and then they taper off. Last year, they peaked late in the season. That's why you saw the fourth quarter drop in price levels.

And that has continued. So we don't think that they can maintain this sort of volume 12 months. They never have historically. So we -- as I mentioned a minute ago, my guess is somewhere around Easter or right after, that thing will start creeping up legitimately rather -- I'm not talking about the Super Bowl, which is sometimes temporary, but on a longer-term basis in that.

Those change from small growers up in the mountains that maybe not -- don't have the infrastructure or the irrigation practices, so they have to harvest this time of year into a larger grower that has irrigation and can play -- play the game a little bit stronger, which generally drives prices up. So you look for the thing to change here in a couple of months, and I don't think it's going to go crazy. California doesn't have that of big crop, but Peru has a bigger crop. So they'll take their turn in the pot so to speak and we just work with all -- all sides of it and try to get ahead of it and stay ahead of it.

Mike Browne -- Chief Operating Officer

I can just add a -- a little bit to that. The -- the -- the summer crop for -- for Mexico is -- is really dependent on the bloom they call loca, and -- and that's undetermined at this point. But as Steve mentioned, the second half of the year, a lot of things happened with the -- with the Mexican crop in terms of quality and -- and -- and availability. This has been an on crop -- on crop season for -- for Mexico.

So their crop is -- is larger this year. It -- it -- it isn't that other markets aren't taking the fruit, it's just a -- just a larger crop and a lot of hectares harvesting. But the -- the other thing that Steve mentioned is as we look to the summer, California is down in terms of industry estimates, probably 85 million pounds, about 20%, 22% versus last year. And Peru is -- preliminary estimates for Peru is -- it's only up for the U.S.

market about 20% or 36 million pounds. So there's possible daylight out there for this -- this -- this static pulse of -- of heavy volume coming at us.

Tom Palmer -- J.P. Morgan -- Analyst

Great, thanks for that color. That's really helpful. And given how low prices are today, I realize you're dealing with a perishable product, but you also have facilities that can lengthen the shelf life. To what extent are you building up more inventory than -- than maybe you typically would to take advantage of -- of low prices to distribute maybe a -- a quarter down the road?

Steve Barnard -- Chief Executive Officer

Well, not too much. One of the things that's happened right now, the market in Europe's a lot better than it is here and we're -- we're sending a fair amount over there on a weekly basis as we are into Asia. We're -- we're spreading it out. But trying to play the market at this time of year, we -- we try to avoid that late in the season when we see a definite end to the crop we will try it.

But there's just plenty of fruit out there to be playing games on aging at this time.

Bryan Giles -- Chief Financial Officer

It's kind of risky.

Tom Palmer -- J.P. Morgan -- Analyst

OK. Understood. Thank you.

Operator

And our next question is from Gerry Sweeney with ROTH Capital.

Gerry Sweeney -- ROTH Capital Partners -- Analyst

Good morning, Steve, Bryan, and Mike. Thanks for taking my call. Or good afternoon, I'm sorry, I apologize.

Bryan Giles -- Chief Financial Officer

Good afternoon.

Gerry Sweeney -- ROTH Capital Partners -- Analyst

Just wanted to dig in a little bit more into timing and volumes that are -- if -- from what I can see, or hear, or from what I have heard, it sounds like Mexico had an on crop, it was on their alternating year side, and the crop came in later in the season. So we had a lot of volume coming in. But then we also had your volumes out partly due to timing. But I was also curious as to how much you benefited from maturing fields versus maybe good weather, etc.? Because if some of this pricing edge is out or -- and your volume stay up, there's -- there could be a pretty strong delta in there on profitability at some point as well.

Steve Barnard -- Chief Executive Officer

Well, I think that the reason our numbers in Mexico were up because we're pulling it through the system. They've got a larger customer base than we had a year ago. Our export business is substantially bigger. Like I said, I mentioned in going to Asia, we're going to Europe, and we're going to South America with a -- a substantial amount of -- of product.

So I think we're in a position where we can spread it out, providing an enough good product to make them ride. And -- I mean I think our -- our export numbers are probably close to double what they were a year ago and -- and what our loads per week. So there's more fruit out there to -- to pack and -- and distribute it if you have a place to go with it. The problem with a lot of the Mexican shippers, not necessarily the U.S.

shippers that are in Mexico, but the Mexican shippers, they really don't have a year-long plan, so rather than pull it through the system or the program, and value added services, transportation, ripes bags, etc., they'll send it to the border and their only variable is price and they usually get slaughtered when the market's a glut. They can do OK if there's a shortage, but it's just a different model. It's a different game. It takes a long time to get to the position Mission and some others are in.

Big investments, a lot of time and effort to get the customer base where you can pull it. There's -- there's really a twofold market.

Bryan Giles -- Chief Financial Officer

Yeah.

Steve Barnard -- Chief Executive Officer

With the Mexican product.

Bryan Giles -- Chief Financial Officer

And -- and, Gerry, I guess I'd -- I'd add a little more on our Peru crop in particular as we look at our farming segment. I think we're looking at -- certainly, we're anticipating growth in our volume from our own farms in 2021 relative to 2020. We think we'll have better information as we move forward in the next couple months. And -- and the bloom is set, but we continue to watch how the fruit develops on the tree.

So we'll -- we'll have better estimates as we move closer to the summer. But we do anticipate higher volumes from our own farms this year than we have last year. I think when it comes to pricing, that is probably the bigger variable that we're looking at. We touched on it a little earlier in the call is that, certainly, if -- we -- we've seen a broad range of pricing over the last four or five years.

So when we're doing our modeling, we're -- we're kind of trying to take into account where we think pricing will settle in based on all of the -- the -- the factors that come into play. Certainly, we would hope -- I think we're -- or we hope as we move toward the summer months, that pricing does pick up from the levels that it's at right now. But we -- we don't know with certainty that it will. But -- but [Audio gap] because it does, that is going to certainly have an impact on -- on what the profitability of that segment looks like as we move toward the end of the year.

Gerry Sweeney -- ROTH Capital Partners -- Analyst

Gotcha. So at -- at the end of day, I will -- I'll follow in a little bit with your fine. But at the end of the day, you're expecting a higher yield or a higher production out of your -- your international farming in this year coming up than this I guess it was 20 -- fiscal 2020.

Bryan Giles -- Chief Financial Officer

Yes.

Steve Barnard -- Chief Executive Officer

Yeah.

Bryan Giles -- Chief Financial Officer

Yeah. And that's -- I mean as -- as the trees mature, that lose that kind of in line with the -- with our expectations is that we still have room to grow before the --the trees reach full production levels.

Steve Barnard -- Chief Executive Officer

Yeah. Thousands of hectares, planted and paid for that aren't producing it.

Gerry Sweeney -- ROTH Capital Partners -- Analyst

Yeah, no, and I get that. They're -- and they're maturing, but I was also just curious if production was -- that 46% was I think you mentioned was higher than you'd anticipated? That's all.

Bryan Giles -- Chief Financial Officer

In last year, it was pretty -- in 2020, it was pretty much in line with what we expected. And I think that we mentioned that 46% was not the increase for the entire year. That was really just mean --

Gerry Sweeney -- ROTH Capital Partners -- Analyst

Yeah, that was for the quarter.

Bryan Giles -- Chief Financial Officer

Before. Real -- Q3 was relatively flat year over year and it was impacted by time in the harvest.

Gerry Sweeney -- ROTH Capital Partners -- Analyst

Got it.

Bryan Giles -- Chief Financial Officer

Overall, I think our -- our growth last year was probably about 20% in production from our own farms.

Gerry Sweeney -- ROTH Capital Partners -- Analyst

Got it. OK. Got it. That's helpful.

I appreciate it. Thank you.

Steve Barnard -- Chief Executive Officer

OK. Thank you.

Operator

And our next question is from Ben Bienvenu with Stephens Inc. State your question.

Ben Bienvenu -- Stephens Inc. -- Analyst

Hey, guys, [Inaudible] Congrats.

Bryan Giles -- Chief Financial Officer

Thanks.

Ben Bienvenu -- Stephens Inc. -- Analyst

I -- I wanted to ask as it relates to your long term guidance. So you guided for high single-digit volume growth and low double-digit EBITDA growth, so presumably margin expansion there. I'm curious, when you think about disaggregating the margin expansion, how -- how much of it comes from continued margin per pound unlock in your marketing and distribution business versus I would assume yield per hectare improvement and -- and just fixed cost absorption improvement in your Peru international farming segment? To extent you can add color over there, that'd be helpful.

Bryan Giles -- Chief Financial Officer

Sure. I -- I think that we're -- certainly, as we generate better margins on the sale of our own fruit as opposed to buying and selling third-party fruit, as the production from our own farms increases and it becomes a -- a larger percentage of the overall fruit that we sell, that is absolutely going to have a favorable impact on our margin profile and we believe that that's probably the larger portion of the margin improvement that we'd expect to see in the near term. I think in our marketing distribution segment, we tend to operate or -- or target a range of per box margins that -- that we shoot for. Sometimes, we operate a little bit above that, and then we saw that during the latter half of fiscal '20.

There are times we operate a little bit below. But I think there's a per box margin that -- that we generally target. I think there are things from an operational perspective that we're looking at that we've been looking at in terms of material costs and transportation cost reductions that -- that can add pennies here and there to that number. But I -- I think that in order to achieve our overall top line growth, and that's really where the -- the EBITDA growth cohesion segment is going to come from.

It's going to come from driving volume as opposed to -- to necessarily squeezing significant margin growth out of that side of the business.

Ben Bienvenu -- Stephens Inc. -- Analyst

OK. And thinking about Peru, and I don't want to belabor this point, but if we think about the supply demand setup for this year as -- as we transition out of Mexico and into California, presumably supply will get tighter this summer. I would also assume we'll get some demand recovery as we move through this year, although I know retail demand has been very strong. Foodservice could come back.

I would think that would support pricing to the comments that you made across the -- the broader market. At what point do you have to start making commitments around your fixed price contracting on the Peru crop for the back half of the year? It -- does happen and start in the spring and stagger through the summer? What does that lead time like?

Steve Barnard -- Chief Executive Officer

Well, we'll usually do it about a month out of the beginning of the harvest and we will have a better idea. Let's say two to four weeks out before we start harvesting. And keep in mind, it'll take two to three weeks to get here. So we're probably looking at early April on pricing.

Ben Bienvenu -- Stephens Inc. -- Analyst

OK. So you've got the other side.

Steve Barnard -- Chief Executive Officer

Yeah.

Mike Browne -- Chief Operating Officer

The other thing we do with that, we'll -- we'll -- we'll work together with the retail and we'll say put a fixed price of X on it with a -- with a limit up or down of say five dollars where it can -- it -- it doesn't wipe the other side out.

Ben Bienvenu -- Stephens Inc. -- Analyst

I see. OK. So think of it more like a band of pricing versus just a -- a -- a flat price with no variability up or down. Is that right?

Steve Barnard -- Chief Executive Officer

Yeah, it's like a moving band so to speak and say if -- just take a -- when you pick $30, that goes to $35 plus, the price will now be $31. And then if -- if it goes the other way, it'd be $29 as an example.

Ben Bienvenu -- Stephens Inc. -- Analyst

Got it. I see. OK. Thanks, guys.

Best of luck.

Operator

Our next question is from Brian Holland with the D.A. Davidson.

Brian Holland -- D.A. Davidson -- Analyst

Good afternoon, everyone. And so -- so I just wanted -- most of my questions have been answered, just a couple of quick ones here. I presume -- not a big deal or else we -- we would have heard more about this, but just thinking about how did the Super Bowl and the seasonal demand here, given gatherings will look certainly different than they did in -- than they have in years past. It -- you see no impact just confirming on demand in the quarter end ahead of the Super Bowl just -- just given the different dynamics we have this year?

Steve Barnard -- Chief Executive Officer

I don't know what our record volume per week was over the last years of Super Bowl, but the numbers are pretty substantial this year on volume. Now, the prices are lower, but we're pretty happy with the volume.

Brian Holland -- D.A. Davidson -- Analyst

Yup, understood. Yeah, I'm just on the pricing side, so -- so volume remains strong. And then just kind of on the foodservice side, any change there? I know as we look into the first half of 2021, we're lapping some mix impact, more bias toward kind of the -- the retail channels than foodservice. A -- any updated thoughts, any changes there?

Steve Barnard -- Chief Executive Officer

The fast-casual continues to grow actually.

Mike Browne -- Chief Operating Officer

I don't know, the other white cable plus side of it goes up and then they shut it down and it goes back down, but --

Steve Barnard -- Chief Executive Officer

The fast casual has been pretty impressive on their growth. I mean they're -- they're much higher than they were a year ago.

Brian Holland -- D.A. Davidson -- Analyst

Yup. Sure. Easy enough. Last one for me.

Just got curious, any impact from some of the broader -- some of the instability that -- that we're seeing in -- in the Peru market? I -- I'm talking more of the governmental level. Any -- any impact at all to your business?

Steve Barnard -- Chief Executive Officer

A little bit. This is our slowest time of year down there, so we're really not affected. We're done with the blueberries and really haven't started the avocados yet. But yeah, we've been quite familiar with it because we've been in the middle of trying and help negotiate.

What -- what that main issue is is some labor issues, but some labor contractors, not necessarily big companies like us or a couple or so or some of the others, it's -- it's the little guys that are hiring outside labor services that aren't doing what they're supposed to be doing. But it's -- there's some reform going on. There's some new tax rules coming out. But I think that'll all be remedied there very quickly because everyone agrees that it's isolated and we know what the problem is and we know what the solution is.

Brian Holland -- D.A. Davidson -- Analyst

Fair enough. Appreciate the color. Best of luck going forward. Thanks.

Bryan Giles -- Chief Financial Officer

Thank you.

Operator

And ladies and gentlemen, at this time, I'm showing no further questions, so I'd like to end the question-and-answer session and turn the conference call back over to management for any closing remarks.

Steve Barnard -- Chief Executive Officer

OK. Well, again, this is our -- our first quarter and our first conference call and I'd just like to thank and -- and -- and say thank you and appreciate everybody's interest in Mission and we look forward to a long and profitable partnership. And thank you for your time.

Operator

[Operator signoff]

Duration: 41 minutes

Call participants:

Jeff Sonnek -- Investor Relations

Steve Barnard -- Chief Executive Officer

Bryan Giles -- Chief Financial Officer

Bryan Spillane -- Bank of America Merrill Lynch -- Analyst

Mike Browne -- Chief Operating Officer

Tom Palmer -- J.P. Morgan -- Analyst

Gerry Sweeney -- ROTH Capital Partners -- Analyst

Ben Bienvenu -- Stephens Inc. -- Analyst

Brian Holland -- D.A. Davidson -- Analyst

All earnings call transcripts