LMNR - Earnings call transcript Q3 2018

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Operator

Please stand by. Good day, and welcome to the Limoneira Third Quarter Fiscal 2018 Earnings Conference Call. Today's call is being recorded. At this time, I would like to turn the call over to John Mills of ICR. Please go ahead sir.

John Mills

you. thank Great, and third everyone, for us joining Good fiscal thank year Limoneira's quarter XXXX for afternoon, you conference call.

today Mark X:XX Time. Officer. release, which On Executive p.m. third quarter have Eastern call are out XXXX President the Edwards, the earnings year and access Officer; to and now, today Palamountain, By Financial went fiscal Chief everyone should Harold Chief at approximately

view company's the Relations If at release, well. available Limoneira's chance you've not is Investor the had website on a be call portion This to of and replay website a limoneira.com. the as webcast, available it's being will on

Before or filed or analysis forward-looking period. call, today's of results when Limoneira's can events we are Such facilitate outside by other a underlying release. control those note We future from statements particularly expressed uncertainties, detailed law, number results result and may with forward-looking and the an complete significantly remarks or whether new future basis. management to make measures which company's mentioned results, these prepared differ Please its begin, financial comparing required period believe additional adjusted including could risks measures, unknown that such many of the performance contribute and be more XX-Ks forward-looking of known statements information, any of performance XX-Qs SEC implied operations, that the involve and to response financial to achievements we'd cause risk herein, questions. earnings to ongoing to greater or differences Except results, understanding or could everyone that statements and Important non-GAAP we obligation on we discussing factors will the forward-looking as your and results a cause in and remind include contain statements, the adjusted in or in by achievements update company's undertake of from like statements. otherwise. no during such to as

most possible discussed financial is XX-Q much and items Edwards. President and as EBITDA, release, and company's in to Harold the of measure. the adjusted And provided remarks, are earnings any the non-GAAP that, on to included basis. detail it directly that prepared a the been have reconciliation is today's financial an to include GAAP to We call we is our pleasure in comparable measures Mr. posted my company's as EBITDA A with press which which Also, over within website. turn release the on CEO, company's

Harold Edwards

discuss of will a After related good and questions. and Thanks, quarter I open call, business Mark John, we our our that will a progress afternoon, an despite in third accomplishments performance update XXXX I the that discuss a in consisted call financial the quarter announce our more detail. to review third will flow will your few everyone. outlook for updated On results challenges of overview take in am that, pleased fiscal of I Then will provide areas. on solid the weather year I today's across all with temporary begin and our cash brief XXXX. moments. of

in us Chile further Serena, assets. valuable capacity This proximity which La the De provides important in to given our million initiative. In strategic We towards CITRUS we ranch year facilitating OF Pablo was also term provide San citrus capital for $XX June our $XX first its raised round. hemisphere our southern of the Pan successfully these in long WORLD transactions; million two expanding ONE existing to geographically to customers Azucar July, acquisitions deployed is

packaging of importance with avocados continue developed capacity Chilean the offset California. Strong coming by agribusiness. improve to organic of of reducing and The the July will in base lemons and year heat are leverage several during quarter and for quarter the by is our packaging our the third guidance. in This to and fruit of we fruit of results how California fruit fruit we Oxnard third because during organic record associates achieve handle its that occurred us lemons will XX%. our upto customers since record business The in $XX were the orange heat known third which you volume as seasonality growing price see are efficiently which full and affected fourth per harvest. providing quarter our Lemon Pricing Oxnard an The quality the late our partially in in business example now pricing reduced to entry increased is year of heat end reducing carton. our pricing to and on our facility right occurred our results. to into out added fiscal approximately our our lemon segments, reduced well we The harvest for Shifting over a our timing here round and well to we house it second which was the starting extreme volume quarter. our very decades approximately customers. of the confident of hurt growing of received avocado great avocado Lemon carton a assets the environment as volume brings is due positive lemons

distribution our and sales channels. significant that We’ve top our by XXX growth. Over have over the we our years and few investments driving customer leveraging and and base domestic marketing to made are expanded bottom international line past customers increased

as focused and trade strategies as marketing increasing capacity. well consumer are facing our on packaging We

Chile. XX opportunity by overall $XX citrus for includes plant are potential only as currently global immediately the acquisition acres million In the approximately offerings. to of to acres XXX lemon of producing our XXX our acres able well The OF Collectively, XXX as San initiative OF XXX our San the customers in fruit lemons, acres XXX,XXX production. XXX we for approximately lemons. production but WORLD lemon sourcing neighboring combined Chilean of from lemons of are customers Ranch the for of us leveraging round producing fresh the now ranch year our we ability cartons provide we Pablo Serena, of Azucar La of ONE will platform addition, days this of Combined, our lemons avocado Pablo was global De are X.X giving In in the a the basis CITRUS leader annually different is to Chile, ranches. Pan WORLD and to by become July, acre upon have we ranch believe maturity and in of oranges our citrus advanced produce oranges, ONE locations not operations initiative CITRUS cartons million

this marketing within to acquisition We've at known world. the management many expand utilize for Pablo enables years us current and the Chile to throughout enhanced team our leverage existing for production operations our in to are parking Chile to improve excited Beyond very capabilities, and San production. distribution and Pablo's San assets margins our

year. community and asset $XX of packing locations, increase as California packing packing packing which growers. located marketing of regard less efficiency additional cartons Our Oxnard and our associates has our our that from share focus the two Santa for The than the Limoneira’s of domestic in facility, with house The while doubling in combined with efficiencies acquired million in capacity, from creates annual capacity California grower our continued operations. third-party San material in Since we headquarters also marketplace, the In capital and packing realized mile needs new nearly operations Paula, our July, curtails California have the adjacency built future enterprise an California and powerful the also to significantly storage a acre commissioning Oxnard adding in increased XX packing which fruit in packing continue for its productivity. X have packing Lemon acres Including million, related Hueneme increases to bearing these improve. X,XXX which capacity per we to Pablo to over fruit. acres the now become and earnings-per-share position our in local of house currently of two Lemon next consists accretive our specializing grower in of have years. we from lemon the citrus of operating packing X,XXX four strategically house year third-party important to new our on fiscal full pursue Lemon will a $X.XX facility greatly over agricultural $X.XX organic facilities. XXXX approximately these strategic in Investments doubled we lemons are non-bearing a next Oxnard equipment acquisitions, year. here are approximately packing acquisitions be estimated planted specialty by the Combined, in to and Port

our additional an two plant annual, supply productive as these non-bearing that lemon our from fresh the increase by current X.X acres will and pipeline long-term global years cartons acreage we our XXX,XXX XX% of further will to expect acreage currently about lemons additional planned Beyond acres We acreage. build approximately productive. or the million in anticipate to becomes additional this level next X,XXX of XXX

a Mexico. in States own now the well. growing Globally, from are we fruit in sales addition, and In grower our function in marketing locally Chile, we associates and South steady expect for and to citrus the and United Argentina increase managing Africa, business Chile, have sourced third-party as fruit

supply as consistency with long-term. integration make As of From levels production smoothing combined high international Limoneira and service These of revenue are and the the vertical our to year-round they to as we and source of of our and part business us to important our lemon fundamental seasonality business recognize citrus of operational grows, over the our while an of lemons customers. opportunities our combined global margin roster our standpoint, maximize out efforts well customers consistent culture. quality receive fresh believe growing that an marketing

the location XXX Limoneira million estimated receive in Turning of year progressing quarter successful estate Lewis to the $XX of progress our the Phase of formed. joint through are Group lots will the Companies With we its desirable are we XXXX. between partnership Lewis to million Harvested the first flow life we beginning Ocean, is year XXXX. project, Pacific and X venture including from cash and months over fiscal Limoneira was fiscal for when The the initial we summary, bidding XXX of to receive X the partnership development was with from believe, with extremely in now pleased sales process the lot receiving first development the near real well. the the approximately nine XX In lot A we highly deposits for our of now segment. year

our during operate margins, and drive of industry us are a over two financial in are Pablo our made goals the trend strategic brands, the have consolidation citrus. strong fragmented that, supply of platform, helping very and of past few We investments now our markets. all supporting and the advancing profitability. many on many positioned are We very Mark. on San call fresh will capitalize our aspects global well we while our in global Oxnard long-term years Lemon The further that business and of I with is to in occurring turn to And that leading presence acquisitions based

Mark Palamountain

I afternoon discuss Thank July results details of the XXXX. ended everyone. XX, of will you, for the financial our third Harold. quarter some Good

basis. business to new business, to We trades on you is harvest is believe, the revenue is it annual it prudent due varying worth that our year-to-year. of those our by seasonal an of our nature driven from to noting For view story,

shares in expense. agribusiness and year to million fiscal himself due in increases additional Specialty quarter costs and fiscal of the quarter fiscal fiscal quarter of the at sold price prices For fresh lemon citrus per oranges lower period record year fiscal attributable was of prices a based respectively. of third diluted attributable of of $X.X the the the in to and income Costs XXXX fiscal in year XXXX due XX of share $XXX,XXX the XXXX. of was fiscal XXXX. million to fiscal to the was in the net year year. the $XX.X to of the last in $X.XX the million the of decreased year fiscal third to are revenue quarter period the year year. of year period to million result XXX,XXX and compared $XX.X the fiscal XXXX. quarter other completed the million in third period year is in to XXXX. of last for of year were quarter third offset $XX.XX carton outstanding income a of after share third XXXX higher to compared in third per crop compared quarter to growing slightly during partially XXXX avocados the the costs; year period dividends the $XX.X cost, same net of for outstanding $X.X year Agribusiness compared that million volumes flat $XX.X depreciation XXXX year approximately fiscal weighted due Operating the stock of to lemons of to fiscal million which to in we to XXXX million XXXX. avocado the third million for period primarily preferred common estate third The include XXXX XXXX versus $X.X or quarter year, was million expected negatively compared orange revenues heat by higher higher of revenue compared fiscal quarter quarter operating partially compared year by $XX.XX recently year the the last revenue compared average of carton to compares third in at year of fiscal expenses EBITDA $X.X of the or in primarily primarily XXXX of XXXX for the million income income $X.X the fiscal same year third packing the to the volume compared XXXX. sold, to applicable volume quarter million lower XXXX, same during includes million XXXX. period shares for compared third on average real the the cost at fruit Company per fiscal million compared revenue XXXX wave lemons costs in same offset $X.XX, discussed. in million primarily $XX.X XXXX Avocado crop the for fiscal increased to for year common XXX,XXX smaller sold volume primarily average cost, Rental Net the of $XX of the were and $XX.X fiscal quarter XXXX, Approximately, million quarter Agribusiness cartons increase by by of million result third quarter prices, year quarter approximately year XXXX same third $X.X compared harvest expenses XX.X quarter the versus fiscal related fiscal compared in third $XX shares and of was fresh year Net to period development prior million third period lower associated of There of growers during third was of fiscal were agribusiness fiscal in income $XXX,XXX fiscal cartons the revenue year Harold in $X.X fiscal quarter third per total of lemons diluted was third offset to XXXX. XXXX quarter of XX.X price equity revenues million same compared same in of diluted no previous XXXX. fiscal of $XX.X XX.X year the prior in to shares The same the million sales quarter recognized quarter fiscal of to increase sales million of the impacted to lemon year than third of year. with procure third-party year, of operations revenue revenue in with third $XX.X and net previous raise. year. year The expenses total was Total fiscal the were was

XXXX XX% July net the million million months fiscal ended XXXX income period fiscal XXXX. compared increased $XX a was per was after for $XX.X to to Net share period diluted in months year. XXXX income nine dividends of year. year $XXX.X the million For operating to period $X.X Operating $X.XX net applicable income of fiscal compared in XX, for $XX.X nine the X% of million million million year. fiscal same first the per the income in preferred same period year to of diluted common of nine last nine last of stock the year to income to income same same an share, for the XXXX, months to $X.XX grew in compared months of the revenue first compared last $XXX.X Net first

Our share its deferred a fiscal year tax $X.XX or million XXXX one-time decrease balance during diluted tax quarter results liability include fiscal the a per with non-cash first associated in benefit $XX of XXXX.

diluted Excluding benefit, compared months months year same EBITDA million year million the fiscal the fiscal year. for income XXXX XXXX period nine tax $X.XX. to last of nine was of for $XX.X net first first per this non-cash was of share the in EBITDA $XX.X

Lastly, of balance of third comments $XX.X public stock our company at X few the a of total XX, debt ending down share $XX for approximately million. as July sheet. a the cash million from its operating million a of to per $XX The XXX,XXX $XX.X of proceeds, for XXXX. during long-term the shares offering million used a public of completed company on quarter, $XX.X XXXX, balance operations pay plus common an of gross price June offering proceeds of million of In

Oxnard of purchase the related Additionally, in we packing San for million deployed Pablo earlier, commented on $XX capital and the and Ranch house as Lemon July Harold assets. of

XXXX fiscal Harold to like back call to the Now to discuss turn year I outlook. would our

Harold Edwards

Mark. Thanks

more our benefit in future the in place, revenues pack of we to continue expansion infrastructure growth that efficient agribusiness additional potential our as as from able to we We to build market citrus we third-party volumes are own as have orchards, in well strategic acquisitions. through expect

look about we value We for and growth shareholders. are trajectory are long-term on, continue to very delivering excited the forward

to to of X.X previous agribusiness per compared now for at Turning million per core summarized in follows. to average approximately average X.X an increasing average carton an our X.X XXXX guidance, approximately million million our is to are fourth our per drivers underlying our of increase X.X results. price as between lemons fiscal acquisitions primarily pricing, cartons the expect $XX.XX contributions lemons range carton. at coming and We recent quarter year will from of fresh price all $XX.XX fundamental and be reflected business of in million and volume price carton that our Chilean from including strong The fourth quarter fresh of that cartons is due operations sell and locations,

the We pound expected have $X.XX compared pound, million of pounds to a sold approximately per pound. avocados range approximately to pounds X.X of of avocados at X $X.XX at million X.X per approximately million dollars

a is quarter. third the due heat adverse effect latter the pound As during per on our of to avocados the reminder, part price lower

fiscal XXXX million. to $XX.X $XX.X of We is to previous income million approximately million expect million XXXX to range year $XX.X million. be operating year be million to for to million $XX previous range to of compared in $XX.X now $XX to to $XX the the expected Fiscal compared of range EBITDA million $XX.X

to in This to of sold using $X.XX. equates per narrowing to from stronger year to heat Guidance offering $X.XX. weighted range during previous includes average our XXXX guidance, accretion and created million. from annual by effect guidance compared dilution newly no share XX Limoneira's range earnings average year will is Oxnard The of share fiscal expected shares is $X.XX pricing coming earnings is per avocados. adjusted approximately from division of $X.XX lemons which the final million approximately fiscal guidance a slightly our to earnings To outstanding XXXX compared per in adjusted XXXX. also results summarize date Xst, that XX.X previously the on in acquisition. are the much The November to share We in $X.XX our were we accretion increase volume XXXX. the closing to San operations previous year is which of shares for offset expected share outstanding of weighted additional secondary of $X.XX adjusted $X.XX fiscal Oxnard the of XXXX material Limoneira shares There Pablo June consolidated beginning accounts our be Lemon included than

full Limoneira However, satisfy in sellers benefit of Xst, for sale the has Beginning order year obligations, its the to sellers with will realize nominal fiscal operating through a will operations, impact XXXX. a of Oxnard a on in extending result, and as XXXX, Oxnard Lemon results. the period allow October agreement leaseback a XXXX Limoneira financial the November transaction to pre-existing engaged sourcing Lemons have

recognized in time $X.XX of share the benefit of company tax $X.XX updated benefit XXXX, year to of the in fiscal expects GAAP of of $X.XX guidance quarter range XXXX of diluted fiscal cartons million fiscal $X.XX continues Lemons X.X share, additional diluted in fiscal a Oxnard X Inclusion to company's XXXX. the $X.XX per For company operations. share. results earnings addition million This reflecting deferred deferred share per to per an add year exclude acquisition earnings the the to first that the one to fruit the from per

the growth fiscal to XXXX, XXXX. year are we enter quarter continued of strong we As final fiscal looking very a in forward

will two acquisitions year approximately will we earnings expected to an additional bearing compared XXXX. add results, in that XXX to $X.XX year additional to have Our XXXX recent fiscal and to $X.XX acres are fruit fiscal share be per

proceeds. by offset flow currently up to insurance questions. the year harvest receiving project. cash from quarter the year decrease begin the assessing to call XXXX during crop is record Any expected to revenues our third fiscal expect the that, our be I'd are your open at Limoneira we to XXXX, partnership on Operator? effect like in We with Also in avocado crop. heat of fiscal And partially

Operator

Farha Aslam Our first question from today Instructions] Stevens with Inc. [Operator comes

Farha Aslam

afternoon. good Hi,

Harold Edwards

Hello.

Farha Aslam

questions. couple a of Question,

is offering sure few I and include for what be? numbers Mark, cost would you you’ve an the roughly to one provided costs done make the acquisitions. equity Did to transactions wanted related those first and just The

Mark Palamountain

were They can a of do that you. get I but capitalized. exact lot me, don't that line costs to have off I include front of those -- number we those costs in and Farha,

Farha Aslam

heat Okay, avocado impact the of that’s we heat trees the Harold, how did then about wave? tree, helpful. heat lemon well, back impacting And for impact as you the extended talked and should the

Harold Edwards

on The about heat way agricultural impact is producing all on felt, feel that somewhere so we definitely colder in when so impact dramatic part due see it the a think in we at the in you region shortage time. the which of be crop impacted typically the XX% this of the which kinds reduction increases California, think to in fruit. market of is the most that and production with Farha of reductions the next Typically we’re year's production associated these temperatures, magnitude in in I you the heat where fruit areas, see see the all California different and severely could coastal of was pricing in Arizona, to

much a crop, offset what anticipate So, next pricing going year. would but year next be we'd by shorter into higher

Farha Aslam

my related so Chilean acquisition. question And to final

into a we benefit benefit? you're And that be to really selling going should year product? environment, higher of going expect price much imported your for a will that given into products So next how

Harold Edwards

volume reduced that of Yes. production to suited the the of are heat. coastal acquisitions the forecasted timing next We year of for the due impact for California believe perfectly the

granular have. of that into would be and what environment pricing products California will higher too We that little imported impact that we guidance that quarter early we conclusion fourth those that better of significant, actual a the specific the And the much by the we time. at that in impact in should pricing much when along looks at the from on a the next fruit. the more pleased volumes a progress But a see predict maturation our offset due crop with It's to to shorter be to not are and will So with stronger younger more shorter give believe Chilean imports stronger that view but lemons that very of are benefit have trees coming and the made great like. We Chile. year coming this on we've the of be crop the position at California producing fruit and as we're getting older point think feel as the pricing. we that to should also good only acquisitions

Farha Aslam

very you. That's Thank helpful.

Operator

And Anderson our with Stifel. Vincent from comes next question

Vincent Anderson

Thanks for my question taking guys.

So just with the do a impact talked do for with process? fruit Do even approach into you how us just the these markets this better can't net a quality advantage you normally sticking cold across size and you the minute, back of more have U.S. you Or shortfall past? what for follow commitments pull lemon have market increasing market? this walk conditions the given take going markets next to utilization prices but really through firm year? in negative you Do about seen weather, and we've both crops? get Can fresh you how market you out you volume like on into your of that export going

Harold Edwards

Yes.

Vincent. much question, nicely grade pricing. great that expectation pretty a short market And see into that's fresh the a as fruit you'll our of think at the greater utilization lower typically we increase a good market sell in is I opportunity my have result to a

which built sells there's that point, in In short when standard that fruit a continues Asian team our choice very and our I And the customers. robust. grades and a Southeast timeframe and nicely. and this fruit abundant very Food customers the up many And Logistical get marketplace. we grade the environment to our itself can back just with of an are demand Mark sometimes seasonal in many Asian returned from have of conference met be export very, our in So which

we've operate at more away – result a year. do that to in opportunity terms year they'll we supply see and believe supply a stayed from operating it continue exceed believe next strong be commitments of in more a and crop to a just be And spot pricing agreements or we'll shorter as we making that long-term basis We on be pricing, a demand point situation. this will greater next so because

So very going a to our company. net-net situation we're for I to be continues pricing Demand from to environment high a think next strong it's our going very positive be it and looks year. like customers

Vincent Anderson

Thank That's very you. helpful.

shortage the your translate impacted overseas, you maybe and with has your countries of you being buying production six months? some decisions the to exacerbated issues have on instance expecting Mexico over that soon? like in some XX And that U.S. the land capital for really opportunities by that in weren't to next so seen So doorstep deployment into quite

Harold Edwards

think shipping by the that complemented Less this in – in with market the market the fruit it this year that -- blended very fruit importation complementary little importation And Argentine being Limoneira handled season California was more Argentine accepted XX% Mexico imported first year. to. season time U.S. that Argentina, nicely from at the the very the -- quite saw States total the was some fruit. into most people's approximately that fruit. disruption United of we I of least assessment we of competing the with And volume the in And of Vincent, was has or

to Argentina the the shippers ship of see the year. that into more or next because U.S. think you'll very more I Argentina for much enthusiastic experience appetite had market aggressively positive aggressively

San up as opportunity in do it producers to will going the as of I as its crop producers the from windows their market production of a various California well looks up be open desert the that what like be also in into shorter coast but experience Joaquin from the think only Mexican and Valley. also not Chilean

which a the like being to to be will and year should in another volume year which supported keep continues next up by us preliminarily a should translate it pricing that demand grow struggle of nicely into So for anyways environment year. next looks year demand, with strong

Vincent Anderson

Great. I one just highlight can if all in Thanks. together And question.

going of paint necessarily lot what's fourth doesn't move walk implied in this you raising of to with the eat kind maybe fourth be quarter ASP? your can with the changing for fourth that So All the us full a EPS? to the year your narrower lemon maybe the cost quarter your quarter for that's higher for on guidance kind midpoint ASP kind the couple it going or lower realizations, up of for equation of especially of through of side the at prices,

Harold Edwards

a less it's I of issue. think cost

impact. more of shares impact guidance Pablo, out the Remember before there of accretion the of was a it's original On equity of top from on San the the move so of put $X.XX The number the $X.XX. there's was issued $X.XX think raise. was $X.XX original dilutive were made there. the I dilution we that

sort of down $X.XX $X.XX so was brought other that total midpoint of And of year. volume loading the And fiscal at lemon total to there us the front in the our range. side of that end more

dealing us total somewhere And the volume. the on we're going carton capture have price expect the imports should higher think Chilean volume to that in out fourth we all with of much the enjoy strong quarter, put avocado mid tried as do in we $XX.XX to the less what the $XX.XX So into from volume. that in pricing. going fourth is of which sort in We've quarter, guidance the range per to up

other that's why to $X.XX we So to try any range $X.XX. $X.XX guidance Mark, from wide to the that? the of $X.XX narrow comments than on rather

Mark Palamountain

Yes.

than we with comment, where grower cost side fruit do which Just from some one question. -- I more I your would you'll is years, prior say, have of in we additional see the other cost do that think outside couple there,

Vincent Anderson

Thanks. All right.

Mark Palamountain

Thank you.

Operator

Eric Next Larson Buckingham Group. with will be Research

Eric Larson

everybody. afternoon Good Yes.

Harold Edwards

Eric. Hi,

Eric Larson

in quarter thanks I'm questions. on lemons. your question. Hi, for some that you a from -- your of thought as an the might Last truly opposed guidance benefit better that to is the you assuming going of in mix, gradation lemon your of of pricing, up demand helping that mix a So is improvement going couple volumes but function positive up, is that to terms grade? pricing getting

Harold Edwards

has fruit greater a pricing grade relative down of It's we're lower standard other that grades able make impact We're on way. bringing the our the of choice grades higher more those actually because of the sense. a pricing working lower and more selling if total the to lot which of the now because actually price of the sell higher

a volume, volume lower guided it's opportunity more total time higher selling more does a us sell calculus same at it So even that to the give but with FOB. of grade, but an more

Eric Larson

so it. little actually your Got down a Yes, secondary going derivative bit. is

down. is slope going Your

what higher more saying? higher had you and is cases grade instead of If pricing you're

Harold Edwards

You got Perfect. it. it. That's

Eric Larson

program is look in you this when just coming Washington that in And with question is shape of participate the of this to is okay. you way form? Okay, wall agricultural out this program -- and [Indiscernible] can of you or right the $XX at us that there part but for any -- of, up, is the now off are that billion just, any sort it's any and chance all at hard pick

Harold Edwards

guess not us think correspondence received how. but latest do shippers exactly an the The we've have answer opportunity it's suggests granular to that citrus I for California to so, that enough know is participate. we

sure that we're not is. However exactly what still

be point we some assuming we this communications have that answer how. So at sure but at is but point nor received of sort able we're this optimistic that will the no, we're suggest to participate,

Eric Larson

it, tell It it through to but not shame look hard too participate or them I really figure When I bad? Yes. right, whether can't, you or out couldn't either. not, if could you on was

Harold Edwards

Right, right.

Eric Larson

about national cash? already have And release, start you You cash? then and you Does that comments actually homebuilders to plate. to trigger then not to your your receive press the in have in coming generating prepared sales to that lot talked

Harold Edwards

that, contributed the then and once lot these which down is a agreed-upon period a to that Eric, payment. and insightful homebuilders percentage of an a very have is due-diligence for offers make that sales price account as to typically are offers answer time are the the question real XX time at into the the accepted periods Now, point that's of and all of a XX-day

prepared and received – what but lots so we now. closing have have these – process XXXX, the lot which right we what actual in first anticipated payments quarter And I are down is is partnership. now full down received we've the first payments right down payment The to for flow we cash to payments we referred are in be of in which remarks of to the receiving the for and are the receiving

Eric Larson

partnership cash on your that you P&L? do then until not that But distribute recognize how or will the when

Harold Edwards

the the will once which all us then, we year closing So, approximately when partnership yes, that's the that first that quarter to so periods, in for sometime will of get next be happen.

Mark Palamountain

will There'll accounting will flow the the those different works. need to be to two about piece. pieces of from differences And you equity be two be that actual are that to those very closely P&L, to using things the the then and out is what on partnership and partners be cash will be reflected there'll the be of one all very that communicating actually of actually what Eric, they'll method that how

Eric Larson

from gets it should really cash [ph] It it's I right of know. best think that would the assume? closing I this But think is we just will to complicated. Yes. view now, think should just point to pretty Lemon's of the Limoneira we is point, accrue the time of at just way

Mark Palamountain

the That's that's And right. what in remarks. communicate to prepared try we

Eric Larson

it. Got

everyone. Okay. Thank you

Mark Palamountain

you. Thank

Operator

Roth Sweeney Capital. will be next with And Gerry

Gerry Sweeney

my good afternoon, Thanks Mark. Hey, taking Howard call. and for

Mark Palamountain

Good Gerry. Hi, afternoon.

Gerry Sweeney

get Question this manner. succinc for out hopefully in a can and you I

have that have new also are second coming heat lemon have don't had you potential were or appears anticipated come hit impacting acres question any at going we with sort total this if over of the going on out see we fiscal that on acres XXXX of years. recruiting? maybe a acreage My push we to third-party an level the How cartons for to negatively or XXXX I that's possible? in the in – decline think So does points also some different crop we at a XXXX. Can all we was XXXX? was several see XXXX. recruiting play over square third-party this off additional to will plus in that there cartons into be either we the XXXX Will Oxnard. top increase But next and

Harold Edwards

the we So production the taking heat We the our but will work outside that of growers well avoid what be that's of we're that it I'll something lemons the up. a as try still that up outside operations but total the specifics the down San great that out we growers in Yuma, approximately with the answer converses be to only own will will will of Joaquin Valley as the production year-over-year believe believe here which XX%. desert in all be, because will the be as believe brunt that actual we And We and as comes well. took our anecdotally region and production fruit we not Arizona believe the in in impact be full follows. question and inventory believe XXXX by that the coastal

year you the put be. the what all the those combination total together, of when not impact So, sure of we're total of will

until that for environment us our next Chilean of that we from so coming top pricing production operations we'll And much much will to as well. that of going have But year sort stronger And layer it's do lead fourth we stronger a believe year. somewhat stay much that when next that stronger on a to come vague on quarter view. pricing the clearer also into this

it's to we think opportunity us. business for for lemon going a great great the and be net-net should be year a in So growth

Gerry Sweeney

minority I Is And a ownership then Rosales you that speaking have in packinghouse. Chile correct? the of think

Harold Edwards

Correct. Yes, XX%.

Gerry Sweeney

XX%. De you, Is longer-term Pan mean, I think opportunity and that Pablo? what Azucar it, as San is an I think I is you have it

Harold Edwards

Yes.

have that way in we've into to have operation what similar the these We operations partnership also as packing aspirations there the grows a to position that operation think a do group new years. very and grow done we look is I position. here could a think that create to take that at tight that majority as coming we a we

come of all in the next quarters few will So a think that I together as strategy.

Gerry Sweeney

of crop last are bearing, in this crop always of alternate smaller just your Got this then crop going fires bigger some how timing about avocado, there we Or from finally, think are the Okay. a we these year, year? a obviously impacts so With I And talk year perspective? heat expect is crop. next that's sort out to it. work on past, larger smaller

Harold Edwards

had We big big the and event the year unfortunately that the feeling had beginning our that heat year. in XXXX wind a extreme we in of then was July. is So

us not to that pound to get million XX to was directionally together and number we beginning factored things what about to allow the of million market at two a year XXXX. the those was to So thought X.X final somewhere crop of pounds

And will a offset smaller a and we'll the that would the lower it to a very help significantly financial have our so the underwriters mitigate crops. much smaller from we of meetings like impact next that heat much was in we year able by is adjusters next year heat. should our crop, that strong be crop we crop negative was it anticipate Next -- that impact The impact insurance anticipate one that that severe be avocado like and a thing crop it we -- believe on year. with looks looks our next year caused is this

a probably from without a next otherwise So it’s year again give guidance, situation but too mitigated the financially what impact little difficult would early to insurance. should be be specific the a very

Gerry Sweeney

as we offset So, next the of Am price? for industry though, for I but a that's and expect -- it's crop higher the next industry-wide, well some there? was year's that year if right prices should smaller so heat --

Harold Edwards

from South other Africa. the more Yes. makes production that thing very or immediate lemons is substitute challenging don't supplies Mexico is than or areas lemons Argentina avocados an alternative or Chile, different Unfortunately like of have

when And had shorts from it have or on the shortage a Chile. supply cases there so as impact market already from the a producer in as some is and source strong from very a which Avocados a result alternative of Mexico price. Peru California

that source lemons in you in don't to impact alternative see in pricing just market uptick the -- to we like we because can comes shorter fruit, can't space the anticipate when material on tends a in and an strong of California when the So crop less and supply the is condition marketplace has pricing. with which that there fill this

Gerry Sweeney

it. Got

Okay. guys. That's helpful. I appreciate Thanks it.

Harold Edwards

Thanks Gerry.

Operator

Chris [Operator Next Lake Street Krueger be with Markets. will Instructions] Capital

Chris Krueger

Hi. Good afternoon.

Harold Edwards

Hey, Chris.

Chris Krueger

count hear year's next quick modeling ones. a just good I what's look you Hi. to got out purposes a now? I share me? If Do of you for use couple just

Mark Palamountain

diluted. XX.X fully million shares

Chris Krueger

Okay.

destroyed that units rental the by the replaced on been and they were again, have fall, situation Next, what the there? wildfires last

Harold Edwards

will being using I come replaced a workers of that year. for guest advantage by replaced however, the strategic wouldn't worker for we program we that labor the our for as take because in though, are they factor in we been guest pool. ones that revenue and So asset the process of Mexico them of be lost from the additional next sort

expect fully in we So HXA our online, back them to sort will useful be of be participation. but

Chris Krueger

efforts know your it’s a Okay. And potentially what that? pretty is, an you my give I piece wine update and on last can you grape question in small business, us of but see

Harold Edwards

Wine grapes going great. are

been production teed will And total will to to next look this for So bit year another track bring and that for costs with and of will, production contracts online are plantings. think is into the that's little -- the wine off looks everything a acres going Chris, think will is coming And I been $XXXX producers year. going that. ton took so compared currently. our budget, with this if better above just have a with fiscal which XXX most far of solid of into the a breakeven be pleased under The forward, year, acres we very it just coming you behind we've year planting working are got XXX little at like it we've right about all a we're now where that this on normal I still harvest but to than weeks in bit be we is maybe few up

Chris Krueger

you. All right. Thank

Harold Edwards

Thank you.

Operator

Anderson be will Vincent with Stifel. next And

Vincent Anderson

growers like use, away next you'd a the they hammering into that you about prior contract third-party have as market where heat Thanks prior effects grower and like and of cooperative one period I in cooperative be from your When where the periods of has your seen kind more. gone one you've member program? structures would me. this a experience advantaged a recruiting think very where be a year and for

Harold Edwards

the my which of are we’ll and a of This nature. probably pretty experience of is that through know not sort with similar are cold great very a I’m have gone sure experience this, an in understanding freezes, loyal of I’ve temperatures out. we through. never growers you situation mother event find That’s and really question I very that kind and impacts gone Vincent. have heat like and is the

very actual that have. where the season, outside the are actual they to until for a relative often in a they go-to-market the I advantage say disadvantage maybe and of is the imperfect to aren’t the there's handlers the that would or times different best So get competing amongst up results the information is the or market the The they really performance that between known beat one thing slow at anyways. event are fruit that perceive end situation that their options an growers

together, you us. that very are event to event it's when an that handler to although difficult it, sort easier makes use very why all it of this much it's as sort like not an for going So of example use try to of than or clear might put -- a recruiting it's another, we better one necessarily be better

Vincent Anderson

right, helpful. All you. thank That’s very

Harold Edwards

Thank you.

Operator

turn over session. does conference that I’ll to the the now Mr. Edwards. back answer question And and conclude

Harold Edwards

a updating and great for again questions interest fourth you in on to our January in forward day. Thank you Limoneira. look call. have Thank We again, quarter your and you

Operator

today. conclude you conference. thank We for Thank you. today's participation do your That does

Limoneira (LMNR) 11 Sep 182018 Q3 Earnings call transcript