LMNR - Earnings call transcript Q1 2019

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Operator

Good day, and welcome to Limoneira First Quarter Fiscal 2019 Earnings Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to John Mills of ICR. Please go ahead.

John Mills

Good afternoon, everyone, and thanks for joining us for Limoneira's First Quarter Fiscal Year 2019 Conference Call.

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

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

the remind to everyone to uncertainties, and a could to the prepared Such results, Before remarks differ additional and and statements, we like many unknown or and known which performance or begin, company's involve are company's forward-looking that cause achievements are management an forward-looking more can contain basis. we'd a results results risks items as results We've adjusted on statements of number EBITDA provided on results, statements EBITDA, your the of outside make expressed may basis. in in prepared period-to-period. future control response achievements today's turn significantly the its ongoing an from facilitate of as include adjusted measures from questions. on or performance Important to XX-Ks pleasure Please information, we that it detail We we underlying the the risks possible the earnings Limoneira's events company's could comparing with within in been such that Harold analysis XX-K of cause as call, today's press including release. President as forward-looking when by law, directly no financial to the XX-Qs and much call And filed contribute any and in statements. new Also, obligation detailed non-GAAP release result understanding any in operations, adjusted earnings Mr. and and measure. non-GAAP be with my note and is particularly most the or that discussed we'll release, those whether financial these measures, during comparable its implied A SEC and of to by forward-looking included or measures posted include of is financial discussing believe website. mentioned herein, reconciliation required company's greater factors update complete the financial which is differences such to GAAP CEO, to that, to otherwise. which other has Except or adjusted statements a over Edwards. a company's remarks, undertake future

Harold Edwards

fruit an and Spain. the slowdowns from pressure of grocery offset which financial our call throughout brief by good year that begin and progress today's drop everyone. $XX slowed demand was results first of result increased on XXX quarter, updated our all will call weather in supply $XX.X XX% lemons up update the lemon more traffic After as John, pressure in at afternoon, take to abundant the United There partially pricing of from and price States bad review quarter on I'll pricing the with due volumes of and I'll to with results with On primarily million temporarily open a Mark review areas. a from higher XXXX. increasing lemon for provide revenue finish will XX% Turkey as our with across detail then the fiscal business Thanks questions. outlook and restaurants fresh of revenues first well and your in we In our quarter oranges. and as million, the agribusiness an stores, in to imported

segments year to quarter, to the improve starting our half expected as Agribusiness. we of with second As we fiscal business our enter are second pricing enter Shifting but the see continuing we pressure to XXXX.

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

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

seasonality In addition, giving from our we've customers XXX locations dramatically of by reduced lemons. us for global different citrus sourcing days fresh

over As family-owned part entered of agreement a X,XXX month announced of and citrus oranges throughout lemons One FGF of we Argentina. World operation FGF, we FGF our Citrus in had or multi-generational that with an last Trapani, Argentina. initiative, into owns acres

acquired agreement a for under be as and period. holding interest. FGF sales XX% Limoneira the of the acquire Fresh will this responsible over SAU, will a Limoneira XX% and Limoneira holding a create FGF's of Trapani a in Argentina X,XXX with additional name XX% an the Limoneira Argentina Santa the which operate partner will Limoneira is part fruit agreement, all lemons Finca, XX% acres As three-year approximately with Argentina of parcels upfront to name and of Argentina subsidiary Argentina Clara under planted interest fresh managing

We year we for fiscal as expect slightly complete close end our fiscal XXXX and accretive to integration this the by the be quarter agreement of year. second this

excited be this during They expected our year are more the quarters fiscal we XXXX. a year in XXXX about and as in this accretion two third to benefit share second contributors from as a and of year this well year. the from additional integration. will from $X.XX expected acquisitions and opportunity year from our the fiscal expect as We We're benefit important contribution this results as performing full completed acquisition very results

in has operations and packing house operating the volume. Santa Our increased increase growing annual made carton handle to year last our our our the part assets of capacity which brings related Oxnard added to and capacity of efficiently packing lemon packing of due packing which efficiency packing also in we the acquisition is us capacity and Lemon doubled new our Paula house

full Lemon expected Paula four packing be acquired of in bearing It's cartons full came to And lemon XXX,XXX higher we X,XXX by outside in new our Santa as lower newly currently acres are cartons XXX,XXX the over last XXX full This are gain to as of than to with note planted we the beyond total efficiencies our came expected lemon XXXX, Beginning important we become be an of Oxnard and quarter, fresh we objective facility. acres approximately XXXX. to date over bearing additional cost XXXX. throughput growers. and carton assets next to continue addition lemon acres And increases. X,XXX today, which another from cost the by over facility and X,XXX year, have that estimated to than Last expect with our XXX,XXX packing cartons in bearing our lemon year have agricultural bearing larger to years. secured established an of will non recruit

lemon X,XXX fresh will this level productive. plant an global acres, to increase expect our acres cartons approximately additional these two of from cartons we additional or our of and XXX and believe the as current non-barring the acreage Beyond XXX,XXX X.X lemons million to in additional years supply next become planned XX% by acreage

fruit. a In steady addition, we to expect increase in third-party have grower

Home million first progression Limoneira the stronger progressing from sales year, quarter, pressure Lennar late units of joint the the the XXXX. lot Ongoing KB fiscal in approximately increased and broke and pricing joint venture we Argentina. substantially Harvest continue excited Lewis while project between Harvest successful at at of volumes six recent in development nine are to to segment. and harvest February cash our years. Group expect Limoneira KB flow the very year one received the Turning the units. at into the homes been the is integration In February, of we lot residential expected lot well. at Home companies at completed have Limoneira available expansion The and the from become this Oxnard second partnership improvements Limoneira development March $XXX XX and approximately estate experienced Phase with site At spring Lennar Longer-term, sales and of the into Home summary, with ground Lemon the year. our are real from on for acquisition. and In now approximately we Lennar attention Harvest is ventures of representing and quarter at for by very closed KB The representing and over residential and to XXX deposits Limoneira next expected in to by end

We are our leader on committed of to becoming platform. strong I'll in turn the goal that and citrus over our Mark. high-quality to capitalizing with the call And fresh

Mark Palamountain

we in afternoon, XX, those reiterate January ended therefore I'd good our an for I business, to a varying new revenue to year-to-year and financial discuss seasonal But quarterly by the believe first prudent the you everyone. and Thank greater for detail from not story to like results first due our now that business harvest is will it of periods view driven the annual our XXXX. to on basis. is quarter nature Harold,

development due quarter operation For million with includes the first higher net to of revenue quarter quarter fiscal closings. the the result There last first previous first from second compared for first million first the million fiscal increase $X Limoneira compared Agribusiness to previous quarter estate quarter net primarily fiscal period the partially sales year $XX year. to lemon of fiscal lemon million revenue the to to $XX.X total $XX.X recent sales. do of fiscal offset Rental year for quarter fiscal volume, during real equity $X.X year. were lower lemon XXXX in receive first by revenue increased $X.X quarter in prices expect of approximately lot sales million million stronger XXXX, due of million to in year same total million Harvest but the benefit was XXXX at quarter of or revenue of of in during year of XXXX the we year from earnings primarily our the of the compared to XXXX in was $XX.X no million revenues XXXX fiscal of in revenue the first the lemons. $XX.X net $XX.X year the the Agribusiness compared to

an of the due quarter. market at to in As pricing for during first dining of an higher the at compared the cartons of average XXXX habits to fiscal affecting per entering average of sold year first volume Harold first approximately of cartons during of quarter areas a cold were certain was XXXX. lemons fruit foreign fresh year sold X,XXX,XXX carton XXX,XXX carton combination of $XX.XX fiscal United said, and lower Approximately per the a $XX.XX States quarter the the weather

the delayed to lemons of by slip from persistent first XXXX. and as the a of quarter quarter harvest hurricanes reminder, the the XXX,XXX two from fourth such quarter was into of cartons from causing, rains As XXXX was impacted weeks fourth

in revenue year XXXX year. period quarter first avocado minimal last the As of recognize the anticipated, same we similar to fiscal

XXXX, February stated to progress during quarter and expect expenses unrealized to is $X.X to last will a February. applicable other crop this oranges same offset per period we mark-to-market of million higher in XXXX in the $X.X on for estate expenses attributable year of million expect interest year fiscal fiscal compared in or compared compared orange in fruit under the to the partially per party last capitalization of most million ceased and million accounting loss guidance. in quarter in million associated the year estate to year of first with effect year for of Cuts marketable our fiscal same was first XXXX in primarily first quarter the million dividends avocados normal sold, the comprised Limoneira depreciation XXXX. $X.X $X.X recognized Total It in but previous Cost capitalization interest Calavo of real to XXXX. our quarter includes commencement lot from to primarily joint on were XXXX. compared and Act interest $X XXXX. costs included first fiscal our have which cartons $XX projects $X.XX for is $X.X million a the revenue fiscal beginning of income cartons the development were of compared impact quarter rate in of from upon million in year. of year. includes preferred attributable was non-cash the of procured fiscal the This company to first revenue the in own We the $XXX,XXX of year capitalized of approximate to to the was now for method $X.X increase and stock after first benefit interest by million non-cash on in equity lower shares, quarter year. that of citrus XXXX, Other costs year to interest quarter million XXX,XXX impact which As and be fruit. to year lower capacity related XXXX. discontinued the XXXX Operating interest agribusiness and average capitalized the fiscal quarter quarter, We $XXX,XXX was Jobs growing first million expenses XXXX the prices and quarter fiscal construction for of of The vast in in agribusiness growers the packed common using development weighted of XXXX volume $XX.X costs on is already quarter increases from loss loss and loss important back Net real projects costs, fiscal contribution sales minimal has $X.X fiscal to of a $XX net million period Lewis first second our which $X.X year fiscal grower year production because year year the majority year this year the securities. mark-to-market note fully additional $X.X The sold margin compared month approximately quarter last is primarily third-party and fiscal used fiscal significant of first of compares quarter third expense. to share costs. SG&A a venture in compared Also of packing fiscal the fiscal of an and harvest expense of million Specialty operating and of first costs, in XXXX fiscal the or to Tax including

XXXX adjusted loss million non-cash quarter benefit. tax $X.X same stock fiscal to period $X.X for the excluding of million $X applicable compared the Calavo shares, Excluding the impact common non-cash was year million first net the from for year, last to aforementioned

shares first XXXX As mark-to-market a for million now respectively. was for the million Calavo for share Growers of a share $X.XX per quarterly new share basis. XXXX Net income and the on approximately outstanding XX reminder, same quarter based to the diluted rules due $X.XX diluted must on period net compared to holdings of loss year we of XX.X of diluted of average shares common shares weighted our accounting fiscal

loss Excluding Jobs for from for mark-to-market compared $XX share to $X.XX loss period $X.XX XXXX of XXXX. non-cash benefit adjusted and the year fiscal was fiscal year the the quarter from adjusted the in of of Act million the diluted share Tax per net net same diluted and first XXXX, the per fiscal Cuts

basis. a fiscal shares. saying and is increase $XXX,XXX quarter same non-cash fiscal fiscal XX% to first We for are of expect in annual we adjusted way of quarterly approximately earnings Adjusted why compared the the year to an was achieve $XXX,XXX our excludes consistent year year fiscal EBITDA XXXX EBITDA of in period XXXX compared results view on XXXX the to is mark-to-market this year to loss of income Adjusted of effect the Calavo XXXX. best in

Before our I balance comments call over sheet. hand on Harold the a to back few

year $XX million of $XX XXXX Our XXXX. at the was end fiscal as long-term January debt million of compared to XX,

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

Harold Edwards

Thank you, Mark.

acquisitions. in-house in to business we of as will about We well and are citrus more expect We trajectory our future as as expansion the our benefit that to growth agribusiness revenues we to through to and continue infrastructure able shareholders. work the build for orchards, efficient excited continue remain value from deliver place, additional we have the growth strategic in market of to volumes long-term third-party pack and our

production to our expansion to guidance. providing will Turning annual global of supply, acquisitions expected on Due going fiscal year detail lemon we lemon and forward. our recent XXXX be more our our

at an price sell to compared fresh our including million This fresh X X.X cartons of Limoneira guidance XXXX X.X downward prices million to X.X with $XX fiscal affiliates lemons to of of quarter of average fruit X.X includes $XX average million at of supply our the million of decrease per increased to globally. previous For weather average mixed average expected pressure cartons on due to in expects an domestic putting price in approximately lemons to the million The international foreign cartons X the million colder our year full carton. price.

second quarter to the to XXXX. We continue improve year in pressure the into back expect of pricing half and fiscal this

approximately year to which from heat avocado benefit at XXXX. we to pounds be will will in We pound experienced off this on sell a Offsetting $X.X avocados million X.X of to we expect that continue is million million $X.XX temporary for to the fiscal year. approximately pounds last X actual approximately calculated crop due insurance event, an harvest year

the quarter receive to in the expect We of year. insurance this crop fourth payment

We strong year. production expect next

We share XXXX income fiscal and guidance. operating adjusted EBITDA adjusted earnings per our year are reiterating previous

estimated benefit include any be $X.XX guidance we Harvest from Limoneira We million $XX expect income range the $X.XX fiscal second benefit does be million per adjusted approximate earnings expect income to million million for $X is per share in be $XX on for diluted compared between $XX an expected operating equity fiscal $XX which to share operating expected approximately XX.X year at XXXX earnings EBITDA be shares adjusted to to year to $X.X potential which million. is outstanding an diluted Fiscal an of XXXX of to to quarter. to XXXX project year the the XXXX. in million year million Fiscal based not

quarter venture earnings the in share about first a joint expected Adjusted share closing lemon of as potential portion common profitable at that of per up well And equity earnings from of the year mark-to-market of strategic value in questions. do the the stock of to all due the changes to our Argentina our like for I'd the fiscal in are estate expected shares Growers Overall, XXX,XXX for keeping our acquisition, very slightly call accretion development open growth our the in from XXXX and accretive unchanged per Calavo joint not venture. year timing positioned company exclude we lower your to expect our do in include guidance Operator? we be the fiscal we're Limoneira. of While how Harvest of offsets long-term impact earnings real with XXXX business. pricing to our excited the is project areas

Operator

now our first Vincent [Operator of Instructions] We'll from Anderson Please take question ahead. go Stifel.

VincentAnderson

Yes, Are you anticipate rainfall heavy thank to the on from gentlemen. any effects is in you. Good right Or just any California now? yet? impact it seeing early afternoon, significant too production

HaroldEdwards

impacts, rain right the harvest. partly No. we also we're out sizes specifically a makes that right and chain to grow in It's the our sizes for experiencing responsible getting have harvest. is seeing buildup which is Two is lemons we're real now. to it makes into primary And the end to one of larger creates difficult there now muddy in large it buildup that with But crews impact but are the also other it's a softness you farms in the dealing that tough quickly. challenge get real because some of there pricing of supply harvest to

lot increase opportunities sizes, us. out tougher our that smaller side the that's there for just there's pricing other a great of of conditions actually sizes Now to but market fruit a and creating creating the it's on large

VincentAnderson

Okay.

So your for volume would be impact guidance potential in the already year? that

HaroldEdwards

in factored all it's there. Yes,

VincentAnderson

Okay.

to turn you wanted be export that market? really open, short us if the now enough of Australia of supply be window their great? that seasonality demand opportunity to to right most quick. the in optionality you long expect to imbalance make have regards can with Do you how remind that'd So I And to

MarkPalamountain

Speaking specifically about the Australian market, Vincent?

VincentAnderson

Yes.

HaroldEdwards

Yes.

be market, way at our August the open that market. into we the various weeks early all ample able towards areas to having look Australian serve months anticipate September fruit to that pretty for that the of end can So much nine as through in the market is about reach various and October. we And productions of

do next So hard we it to look forward hitting year.

VincentAnderson

timing And a lemons. you. with you this Is of I With as poor their and here. more see thank being a Spanish normal coming believe US the Great, return add earlier Turkish import it to issue I'll is their one production more Do off development years? it's inflows new regards harvest in really to or just of these that a market?

HaroldEdwards

development. new normal --the This No. impact. of It's definitely not sort normal a is

your seasons. towards supplies think fruit comment limited probably I a as see normalcy East we to their life the has Coast pretty markets. accurate, That hit is the return we're of as So which is this end normal first is getting a shelf

for fruit So creates to which the California quality pretty those back markets. get and the great deteriorate grades start into to quickly, a opportunity

more winding I up the abnormal. situation. of so that we're tail end than supply characterize that And But normal being in as

Operator

now will ahead. We from take [Tim Perse] of our next go Please Inc. Stephens question

UnidentifiedAnalyst

Hey, And about for you afternoon. market? recruitment Can volumes? domestic of those progressing, your the talk Good the third the party volumes guys. volume higher are lemon of how driver guidance

HaroldEdwards

Sure.

seeing are we're fruit between to with opportunities grow the like Australian domestically, balance example for The of as we the market just and a our as opportunity creating for fruit. sort export the that about well just great market Vincent demand talked share So great globally. supply

as to Oxnard to As outside of ability retain captive are Limoneira's well growers, the organization. to new Lemon relates as growers who part it attract

from I XXX,XXX like settled we that think attract another it year. on recruit cartons. we're actually cartons doing were last looks to pretty when new dust to well. growers ourselves we --we recruiting XXX,XXX We able challenge worked can And the

of been Lemon Oxnard in actual an actual of perspective XX% from So in to closer that number directionally And that retained. but believe to over an performed growers of volume the part as many the XX% of grower has somewhere grower retention area. XX% were basis, volume relates are organization we we to it the we the retaining on

second of of us. that focused quarters the summer only early in for seasonally --we late we're That the you'll volume the to was So lot will type a not through and forward revenues spring, benefit fruit that drive second and flowing really those third to fruit but quarters. looking the begin in see that very third increase seeing are revenues

MarkPalamountain

X million cartons And increased to starting carton million The add. primarily Mark, a guidance it's in to million if X.X Tim is X.X to I the million to we're X.X might now from see bit of fruits more we when had summer out of pretty a inside the it's that fruit the more come estimates with And we pretty than small, little that first bit trees. hidden there's anticipated.

So the that lower was part partially price by guidance offset shift. of that

UnidentifiedAnalyst

that's source elaborate exactly the Coast the Can be the a you indexed. good the of on the window how is under is One of Argentina currently Okay, East from what Citrus Argentine I fruit into what acquisition the US World From shipped Limoneira And where for fits serves companies would is into great. that exactly fruit initiative? remember Argentina?

HaroldEdwards

that is one the much is the focus lemons. and more juice that world markets industrial on and said with Argentina but lower lemons oil utilization its of towards in and of for fresh So the producers biggest products going

So go our cartons The interesting we acquisitions Argentina. is movement United fresh to lemons Eastern we from X.XX and focus that of way that XXX,XXX will will XXX,XXX Trapani recent Southeast the Asia States. and to of and to Central Europe. believe is part find Trapani about will approximately balance our only million their cartons into believe fresh FGF with that and The move X.X Fresh

it's the to and think market bring our both is our estimates US XXXX as the a and between opportunity fruit in we to find you in are XXX,XXX of smaller XXX,XXX on markets. United valuable up into fruit. take to will But to advantage in So to Argentine Southeast relates the complete as that that basis continue role as those And its component of chains again cartons supply way Argentine of vital One to that Citrus grow play world in and Central And a a of Asia Europe. strategy, know States very Canada. fruit Eastern very, also since Argentina I open now some to it and

Operator

of Buckingham go Research question Please next Larson Our ahead. from Eric Group.

EricLarson

shortfall afternoon. in had last pneuma, qualify All a everybody, that how moving the into in year. good in of Can from which push believe a whole bunch going had in in And acquisitions -- year-over-year big QX right, fruit you in you QX quarter. you you yes, in I pieces thanks you quarter. had much to -- A the production then Can weren't volumes. increase was

So can point from Yuma was kind may of of you volume then give B, the came us base to point issue? what acquisitions. be from kind versus And A growth maybe what

HaroldEdwards

That's first We'll great total was the think to was a question volume try the that that into we that. on from best it difference QX Yuma in The our but QX quarter was XXX,XXX cartons year-on-year XXX,XXX shifted situation. XXX,XXX.

not. that quarter-to-quarter actually us as letting use their they account one way we --we outside it's for minimal our of the back outside of comes that lemons. provide cartons, relates reasons it's grower just new no actually Cost selling them shows and the and but for in costs the those their a us Eric, that's acquisitions. when return. Most And it the it fruit, return up from disparity we we is recruited as because So XXX,XXX sorry in grower marketing cost that's and the XXX,XXX cartons to cost their how margins, our our much fee. balance a us perform services subtract packing, then grower grower providing our money back there's services the it's of the then balance And so but on for is from P&L And growers. big is to comes, is the a what returned that giving growers bring

I of just was half the when disparity a cartons $XX And it so looked was earlier XXX,XXX And in then at we grower quarter-to-quarter; that's million was cost it the in fruit. moved because it difference more somewhat the today think of the call returned. it we But of structure. distorts balance cost because

EricLarson

I'm down. just writing that

differences -- any you third growing you've your bunch you lemons. the have i.e. now are that raise the different getting of you in right? different you a fruit, yourself, grow -- whole got may more so don't you finding may you how fruit party so husbandry, because Okay, realization rates Are practices,

getting describe to going So better cases of party you does what as fruit, third are good it more be would realization How is as you to a like? look in additional that less XXX,XXX have out juiced? that

HaroldEdwards

Yes.

pretty in all The we're think I footing. quality's excellent. even

All bit as growers certified. --it's global excellent of as quality. There are these good GAAP Every ours.

offering different together to So product across provide homogeneous grades. a all in nicely eight three sizes blends it the different

really sort grade, of noticed in haven't our any average we average grade sizing. our material So or in differences

So would is all been it's this we'd in packing older, gaining It's house. are bringing some of because that Oxnard our wanted little less a net-net, where back we're kind above having really spread it pretty throughput to in little complimentary. packing in cost out it's bit we just right hoped. it's at moved The Santa really efficient like our we're the we now margin by little a packing bit or masking by efficiencies And margins top Paula. all where our house of thing starting getting now. results new is on on to a be in of But volume exciting say Santa that's I increased the packing of Paula us projections

EricLarson

Okay.

that cadence Is of you that biggest guidance, you help us is of the before where are your come back use Can get more X B you X.X don't when QX. traditionally which what QX, So third-party from acquisitions? X.X QX rest then a at I'm year know good million to to go -- assuming difference X.X obviously from million. providers? you and X.X of or million to of I'm every get kind I impacts kind million that to of kind just was just on number what million X guidance Point to on sold, impact from -- want were traditionally to carton to your fruit. QX, your XXX,XXX-plus to A third-party you're million final if you Point acquisitions so question a is kind now But the you going similar

HaroldEdwards

there. best our try --we'll it try I'll Okay.

going be did cartons X.X the to ours from how it's is would go the and X guided and we're in year which growers' ours-- two. million million, of primarily the and last million million almost district then board seeing across X.X would the fruit. X.X we're X.X million much be increase outside So to we of we And cartons

here So summertime we bit the coastal fruit think more than we a saw. has fruit

X.X would outside So X.X to XX% point A million and carton growers. we were that million be call additional it XXX,XXX potential XX% now if

Operator

take Capital ahead. now Markets. question our Krueger will Street of Christ Lake Please We next go from

ChristopherKrueger

on answered but Good acquisitions afternoon, made you do there my of of I general the been XXXX. integrated guys. you second work the in to mean is or questions that? they're two half in fiscal Most more fully say

HaroldEdwards

San really fourth in that really Oxnard integrated. Pablo the helpful. and that integrated fully Lemon great quarter from we fully was ranch very So some got results then And

year. You'll third impact see volume the the but in that the this the big and acquisition in quarter that of benefit of second primarily

volume we that's that originally volume our much ramps thought. as ramping so than pushing of later it's And

of kind pushing Q QX. of into it's pushing So out and

So is QX place believe. thought wind I the to be QX bigger smaller than be is $X.XX and to to we somewhere we're would going in But same thought. up to $X.XX we much going right much than net-net between say to we going

ChristopherKrueger

bigger then or lemons see opportunities All primarily oranges is one right. Do question. right on focus a And in just now? you any other to get

HaroldEdwards

just It's do in also up relationship We're that behind --we now. harvesting a up the right they that bang-up off a job have export our of abilities some in us fruit a There and issues start. weather early. XXXX now. And We great however, things to the did Suntreat our crop to some sell great a get further trees the had and partnership the market really to but challenging bigger --we helps a in with production. more were hampered getting Joaquin pick off San beginning fruit markets, are Valley right XXXX. to

going to on we to We're to oranges. in decline but cautiously a We to we're -- consumption per a capita Globally oranges much the as a consumption oranges up net-net, global optimistic down your on maybe So that of basis starting other early to a able lemons. developing to back oranges for extent late little economies are getting more more that add too specifically it's value domestic guide and and us on be basis. of in find just you're see start to fragmented to oranges it's go in on seeing are believe the it's sorry question. we're least at tougher you're in parts world. value But the or add

Operator

Vincent ahead. from question next our take of Please now Anderson go will Stifel. We

VincentAnderson

new pack agreements was if Yes. Thanks developments a Oxnard me here. sneak more in letting wondering have you your win could supply that over new acquisition. house any any on result I potential supply you or for one agreements as of just

HaroldEdwards

there is maybe that either XX% grow growers what's pure the of are sizes, really in XX growers estimated total stay sizes there time. percent-ish leave reasons various have respect the were helping our may we've of in and leave. grower volume. XXX varying over they in reason would we I loyalty on approximately for we basis would is growers terms they that family or that us between that believe of would various somewhere of competitor say and might One kinds --outside So Oxnard a and retained all

result, so as up And there other but may some pick some lose growers. we a may actually outside we

report of handlers the watching nothing integration grower think of and specific I dancing interest, projections other many and a them to of the I also our kind industry would yet. of all And are that level the in we're but a what's certainly but of on our say level happening. So with results. are there's around still that's impact on right our we're sort who

VincentAnderson

at and I actually volumes referring not Yes, large agreements to getting thanks. you potential I or being supply was customers apologize -- to to for for clear. prior What was I of competitors' lemons

HaroldEdwards

see. Oh I

that. is to they're which other literally Yes, but this specific Sorry challenge volume this selling sales nothing at of doubling to our report than the that. I up stepping the missed team there that about year.

Some of over bit that coming and is of agreements. sales turning growth establishing is rocks coming new with existing by and customers. a customers But new finding growth that supply quite

taking And customers customers of from exactly and from those some as away sort business of are you're suggesting competitors. so our opportunities

Operator

from take now of Godil question Please Alpha. next Global Sain go our will ahead. We

SainGodil

I think A in Hal we sorry committed frame the any Yes. questions, QX Have October insurance and insurance avocado. few the to? about, Hi, -- talked for one on QX Mark. you is know Do regards that companies time amount you in clarity the to have that? the it still

HaroldEdwards

harvest insurance we point is the impacted believe be experience go we we'll the I and July. to have claim. point a the takes, know we that's And when we submit which of sort done month of And So at or that that works know then through exactly that two. the company should don't actual the by way directionally end at were how

So is October call time amount like we still said is we're the -- and, you you is anticipating think that it sort the QX of Mark,

MarkPalamountain

and a we're of a $X.X little historical million and amount a five it's So you're at and it's guaranteed it's predicated, complicated pricing to on year your crop. average looking but bit of XX% based equation, pounds

flipside more which are if would of we would it's we of all swung it very for one that [Indiscernible] is little better that so And just but equal And that of it and thought than so confident protects what mean we sort have a year the breakeven to essentially that in and in number. sort have you we at a production another. we're be bit it

same pounds price So with or the another. net-net and one should be per way the the insurance about the

SainGodil

lots Perfect the discussion. and to moving

spoke XXX cash Yes. earnings. their lots the impact about What's flow? You on and

what's cash kind -- So of flow

HaroldEdwards

Yes. That's question. a great

earnings the those LLC for and the partnership intents Lennar then the earnings purposes this which community then all a as builders And partnership. at there's point is which and partnership So the Lewis the project. the is its XX:XX recognizes cost certain allocates level Limoneira amortized amounts developing then getting which out of and and at life recorded the Limoneira of of still are level Lewis over entitlement the it's which partnership then

beginning the that project accounting the in talked that -- to million So throughout use be which talked equity up will the so of well about. mark $X.X that that'll $X the life million we'll the Mark use will we about. million show method equity $X

the into used that all line being pay cash In that of credit. flow, terms came is the of partnership down cash to revolving

there's balance revolving a very of that now line low So credit. on

going about And being that now phase to Limoneira back to very look so the that talk that lumpy. Mark, would flow infrastructure. be cash The targeting out how the will next actual in again of want is with you --

MarkPalamountain

Yes.

infrastructure improvement. for as So basically it's

lessened XX% distribution. completed. say infrastructure for project out as will the less, in of let's which That loan it net three balance of be accordion allow we years will that get, call And so the we're

cash through infrastructure, continuing. so going lumpy the in majority million cash to goes we're keep in imagine meaningful we XXXX to you pretty We the until be can but the million that, we've and the received get talking $XX of So if XXXX. far. for and It's don't but we $XXX flow expect project we the partnership cash of stay until have a flow guidance will

SainGodil

and infrastructure how we next any on much spend on for the lots? few would need money So the to more clarity timing the

HaroldEdwards

ample but It's line that revolving have rest of this million will of will required that, provide more capital credit credit that this capital into build for I'm point. specific contemplated to infrastructure. partnership be by the on total of We build-out no rest the Limoneira out though a funded point. has line the the $XX Not capital amount the that that going there's contribution answer the need at partnership. the not to of at from of better for

SainGodil

you phase it the when will in number could of us rest And total released? be and the what's remind of again and lots one

HaroldEdwards

Yes.

the and has we first phase. so sold first just part XXX lots of the So first phase the

data makes about actually of that'll two sense. infrastructure will to you put And in home sales in movement Phase I what anticipate go the place what's -- on so kind that of to still down to some one want see when we how go of But see be that terms part of discussions think say the in forma --we're believe we to So if based we pro next goes. begin it

MarkPalamountain

sales next to be the plan which should would just but --December the we our of amount which December equal --is lot would the XXXX for initial that put be be the next December up. calendar fiscal -- XXXX will

the Harold that will for how temperature So Q&A market first the the essentially like either first the forward as said phase. move selling movement of conditions. we and us on phases a get based of back that three lots they'll be they're allow End round and or of And to

Operator

This would concludes the to Harold session. turn remarks. closing today's like Edwards I any to Mr. question-and-answer for conference back

Harold Edwards

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

Operator

today's concludes disconnect. you now And call. may This your participation. Thank for you

John Mills	Managing Partner
Harold Edwards	President and Chief Executive Officer
Mark Palamountain	Chief Financial Officer
Vincent Anderson	Stifel, Nicolaus & Company
Eric Larson	The Buckingham Research Group
Christopher Krueger	Lake Street Capital Markets
Sain Godil	Global Alpha Capital Management Ltd

Limoneira (LMNR) 13 Mar 192019 Q1 Earnings call transcript