LMNR - Earnings call transcript Q1 2022

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Operator

Greetings, and welcome to Limoneira’s First Quarter Fiscal Year 2022 Financial Results. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation.

As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, John Mills with ICR. you. Thank

begin. may You

John Mills

and fiscal for year everyone, Limoneira’s us first quarter XXXX thank afternoon, joining you for Good conference call.

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

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

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

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

Harold Edwards

good last period John, with volume in pricing achieved afternoon, Thanks, year, compared quarter revenue growth first X% sale. lemon higher and top higher to and increasing and driven the line the by We everyone. avocado same

year throughout We these fiscal trends expect year continue raising are XXXX and our guidance. full to avocado

and more lower lemon were will than expected a we However, previously I pricing moments. details demand in few and provide

our same we Harvest development period achieve And with Limoneira our well $XX the our now to million. flow I so XX% are for cash from each project discuss this starting quarter, we is first raising performing expected approximately of will divisions’ that agribusiness. business out performance to real well-positioned and bottom the results compared strong nine the at of line top As last are year, estate we fiscal this look to project to months remaining year. our

last approximately at fiscal the fiscal at year. sold lemon For first quarter price significantly all year. the region, markets, larger X,XXX,XXX the being in was year tree for includes The markets is same million, year the average during of perspective, due cartons Agribusiness brokered carton, to million to X,XXX,XXX California at of a $XX.XX lemon pre-COVID XXXX unfavorable total the a to XXXX markets. U.S. per million, during lemon of with revenue of surplus $XX.X affecting revenue was combined the of aggregate first $XX.XX experiencing sales particularly of million and million quarter per XXXX, sold lemons of in year revenue to year fiscal $XX.X overall of including quarter an of Arizona price put quarter net the fiscal Agribusiness throughout of XX% Omicron sales the XXXX. to of approximately the compared weather XXXX, included total previous $X.X of the $XX.X in were to quarter $XX net East negatively million for fiscal $XX.X of of and compared this fresh first Asian fresh cartons carton first the and revenue in our first $X.X Lemon year Coast Asian this levels. fruit a a quarter year, fresh lemon compared and To year first demand fiscal in operating about are in during year fiscal crops average quarter industry growing packed variant XXXX fiscal the other compared revenues respectively. and sales, million on period inventory number factors conditions $XX.X of fiscal compared million XXXX last

to market XXXX. avocado demand if half XXXX compared continue recognized year improve $XXX,XXX same are to in Asian due XXXX. year and fiscal to XXXX, XXX,XXX price We were for approximately Asian aggregate period year year of we $X.X in reduced first of in to the comes second full decrease to of quarter no recognized raising improved the in oversupply industry export our could of we We orange avocado this Omicron. the pound fiscal We the $XXX,XXX We fiscal due of XXXX, of in but revenue the pounds if year, of revenue avocado continuing period million avocados the domestically, same the beginning volume prices per fiscal lemon current fiscal sold we this pressured market quarter revenue dramatically the expected at compared in average be last year expect $X.XX to see quarter first of year a back pricing during and are fiscal remain year to to Omicron. first the the and experience lemon believe of

Turning Limoneira very Harvest continues development to now division. now to our and at XXX perform real inception. has well estate since closed lots

now X are of this Phase We sold the have in on completely focused Phase project XXX for X. now sale lots and

owns Limoneira joint additional develop additional XX% XXX Builders the which XX an venture of signed acres to Additionally, LLC units. to has purchase potentially Lewis intent of residential letter a from Limoneira Limoneira Community an

approximately end the from XXXX to this fiscal of We by expect transaction. $X distribution new receive a year of million cash

additional acres our million for value raising and land to are distribution appreciation our in million the sale Harvest Limoneira an XX We to at cash Harvest existing at expectations from planned $XX in of the Limoneira. $XX reflect

to even medical an distributions our upside for revised due X of We also a is our believe to potential campus in greater there cash the development opportunity East Area development.

to team more driven results revenue provide we this bottom on are the will decisions we and results & enable campus third-party will expand year. have remaining One the and Elliott medical variety will be to and Overall, service expertise by pleased now achieve in combining provide we and Wileman the call And of returns. our information line customers over the year. stronger later our nine for and turn months our Citrus current will the volumes, Mark. World higher that, with to under Citrus made with with the strength our our are a to improve market alliances and of of One We us program service the World of such Bros. greater I’ll This confident as grow difficult

Mark Palamountain

Thank and good you, afternoon, Harold, everyone.

driven there from year-to-year. varying harvest our nature seasonal a our As a business reminder, periods with is to by revenue

annual, and as second our not it our are seasonally while business best view first quarters on quarters Our fourth a is basis. quarterly third to and stronger. quarters Therefore, softer an

of XXXX, the quarter during XXXX per first the in cartons was fiscal $XX.X fresh was relatively Agribusiness the first year quarter X,XXX,XXX net in flat at total quarter million first sales, to first quarter carton during Other $X.X compared fiscal price quarter compared million $XX.X carton of were the of of Agribusiness million average at million million fiscal year the last $XX fiscal XXXX $XX.XX for carton year. at quarter to year. previous fresh of includes the first average XXXX. same $XX.X the during of XXXX. X,XXX,XXX compared Approximately sold lemon quarter compared approximately the per price of fiscal the For to a XXXX. year year fiscal the year operations year net in lemons $XX.X of $XX.XX prior of revenue revenue period revenue year to sold to first fiscal million $XX.X total first revenue in revenue was million,

increase $X.X operating net and recorded $X.X same year the quarters. year for fiscal softer $X.XX XXX,XXX per million the the compared cost regions California primarily XXXX. one fiscal company in fiscal million compared from $XXX,XXX in of sales same XXXX fiscal Operating period quarter diluted per the loss of fiscal first year at adjusted the Brokered million the East associated of a XXXX. of an – first compared first cost loss carton for $XXX,XXX cost Alex first year a in $X.X average of the of XXXX, attributable per common XXXX, pound. quarter earnings loss the period for XXXX to the other XXXX of with time Omicron net the at after Operating $X.X loss crop was adjusted fiscal The share $X.X growing cartons continue million as in end compared of for million stock was reconciliation citrus very fiscal increased of a $X.XX of to and was $XXX,XXX net brokered Vice adverse a in loss compared of quarter throughout overall year will company and in share no first XXXX per first to the common of a XXXX, is the last of As cost Adjusted quarter compared recognized to are on net million year year. quarter harvest end in expenses of of Approximately on quarter quarter second to sold see and adjusted the first prices loss sales revenue compared Asian are President $X.X Teague. weighing the in loss the year EBITDA of quarter price company’s Limoneira’s variant, last EBITDA departure $XXX,XXX weather at of period The of the with quarter pounds loss provided in revenue agribusiness price combined fiscal compared fiscal markets the per of of in year diluted the revenue at approximately cost loss year sold a a to fiscal avocado XXXX. related and The the fiscal release. was the year the of of significantly demand applicable and quarter in loss the million of in is quarter stock applicable and lower fluctuate the decreased to period first loss quarter of lemon to increase million per seasonally demand the provided also the year year to compared million Net during of emergence fiscal XXXX of the our quarter party Harold the this of to the revenues net share to million avocados compared quarter supplier recognized sold of compared to of The $X.X fiscal last $X.X first of period. for previous in to larger Specialty in XX,XXX Arizona first Net year until $X.XX to to recognized first XXXX. quarter net compared pricing were same the XXXX. compared third of lemons this of a in during grower diluted year and in $X.X $XX.X year first mentioned, Chief $XX.XX in reconciliation first of dividends fiscal company as in first A loss tree fiscal oversupply loss fiscal currently fiscal Senior the of fiscal same quarter suffered The an quarter Approximately loss in open in first seasonal the per we carton the fiscal $X.X year. $X.XX Also, first is back quarter for fiscal release. an the preferred of marketplace. prior per same first were carton first XXXX to severance Officer the up. year of avocado year Coast, price crops the year year XXXX, XXXX, earnings in million the to XXXX first creating year. quarter fruit Adjusted year XXXX oranges period and of the of of in year $X.X XXX,XXX can fruit to $X.X a well in last period year loss orange XXXX. fiscal fiscal $XX.X XXXX. to XXXX diluted million fiscal fiscal to $X.XX year the was quarter Adjusted net $X.XX of share year. carton million our of net in for to of average average quarter was $XXX,XXX year a were Total company at million same

believe of compared agriculture balance million level Now year as real end of to XXXX.We liquidity. fiscal year XX, cash $XXX.X turning expected decrease debt $XXX.X was XXXX of debt our throughout Long-term over January the will to estate fiscal the businesses. flow XXXX due our and from sheet at million to and

our to XXXX longer-term like outlook Now, year I’d pipeline. Harold discuss to and call to turn the back fiscal growth

Harold Edwards

Mark. Thanks,

As and global our continues to a we all industry business logistics food know, on the service COVID-XX affect basis. pandemic

line and next However, compared last we bottom top to fruit expect of our due for growth business, diversified months to year. to XXXX, the nine achieve year fiscal

are we momentum a surplus volume all inventory the and on markets. conditions of regions the our offsetting particularly larger with year East combined throughout as this are last significantly tree and weather negatively Omicron California for slightly However, overall the markets, are the to year our growing effective experiencing Asian Coast, variant crops compared unfavorable Arizona demand

are see this We open Asian demand again. export experience fiscal to but expect remain market pressured domestically, to year until we we to beginning improved lemon the pricing begin

to We to the in avocado to million be of continue a X.X cartons XXXX, And the range to to to X range X million expect year for fresh of lemon million X X pounds. XXXX. volumes now guidance year in fiscal pounds for million we previous expect fiscal X be volumes million million of compared to

expect our citrus to expand XXXX World We One specialty also fiscal another and oranges year continue offerings program. producer’s to of in our marketing through Citrus by product

offerings, citrus our specialty attract that even citrus be we’ll of We by more to and single their enjoy have all for to list customers. a growing increasing customers one And supplier. of our oranges provide needs ability able

of million. Fiscal of million. million expected is XXXX expected receive to expect during $XX and XXXX. in Limoneira. Harvest call like to to expectation is expected new expectations year generate previous development. that, five $X million generate fiscal campus we is from intent compared East with Group. Limoneira to The a XXXX our year These The million from medical generate Fiscal from the is increasing of expected years, XXXX Operator? at as Fiscal $XX questions. include the generate with to the million. addition, fiscal expected flow Fiscal breakdown now land And do fiscal I follows. is year letter as is Limoneira cash Lewis previously year $XX cash next values year to beginning is to open to This not $XX In potential II I’d in due to mentioned, is Area of to $XX And XXXX opportunity harvest Harvest our XXXX annual generate expected your million. at year to $XX of up

Operator

you. Thank

Stephens. Ben conducting Bienvenu is go Our We will [Operator question ahead. first with Instructions] now a from Please be session. question-and-answer

Ben Bienvenu

Hey, good afternoon.

Harold Edwards

Hi, Ben.

Mark Palamountain

Hey, Ben.

Ben Bienvenu

think commentary want the When I appreciate volumes. – kind margin you chain is see equation a Does for of in looks the lemon business? need about the thinking underlying business? prices, As on to to to, recovery the broad of about the about here? from think costs guys in earnings we So like What based – around updated just I cost recognition path of in skip what recognize market. power obviously, you we’re do operational that business, order business inflation to supply the the and the that so of kind the margin seeing this ask bar improvement raise the path across to think where

Harold Edwards

Ben. there, a with question, the the And much that because is we’re think inflationary our a in with it’s are And we’ve there’s great the And is smaller and the oversupply in now challenging and on wrestling we tree in is question essence, been answer pandemic. both and lasting it’s – how based with experiencing sort it line larger how Yes, I in crops that of of experiencing is which to think bottom markets, much world? new with, living combination your the transitory everybody’s Arizona the combination but California, in of yes, of pressure much, that I question of impacts margins. much

cost then of of on sort pressure the pricing because seeing rising You’re and negative double oversupply. the

really our what pressure the on two issues are And driving so margins. those are

down advantages able be think to Now, and as get which volumes packing capacity, capture through eventually, to there, a believe demand more But more we get back help I’ll running he our greater get into we on situation, color it growing we in that. overall that’ll until we’ll and over we’re the certainly any has going other to for of ourselves of And that’s us Mark our to we’ll see our margins. if we drive challenged environment cost. help. turn a fundamentally

Mark Palamountain

is fight want other add, just we’re to to and this through the efficiency. I going Yes. productivity way increased

over range So coast in district years, home two. the the specifically, and on last here in our XX

and just through XX%. has farming innovative over techniques increased production Our agronomics different

So and new projects trellising we’ve like lemon some different initiated things.

basically the it’s prices be market following the an on all that combination all a saw if of article same I So producers aren’t of the to don’t costs. going into recently really thesis lemon everybody’s revolt this. Spanish you just went

So and get three it’s see first bulldozers and kind this of trees four in everyone’s you after activity of minds you years usually coming out. or

to So going that it’s imbalance. get through the and of and passing some supply through, we’re get increased productivity there charges demand

Ben Bienvenu

Yes.

enough. Fair Okay. That makes sense.

think Harvest about, solid of you redetermination does obviously, this which – XX% at upside how at another this land become that campus think the what make beyond Area project cast then appreciation, think that the about And to think I at Limoneira, as medical what number we another Thanks. East should almost see again? As the we revisit of you XX to you If sounds such point expect that the should pointed about What does you appreciation? to that enough you distribution thresholds and should kind it of we X, cash with, of be. flow was about in at continue it land the value receive this. to you potential value cash like, from from round acres kind increase pointed

Mark Palamountain

part Harold first can the then take take medical the and I’ll side.

we a originally out or XX-acre idea to sort Harvest the opportunity XXX a acres, city from and at for which So on retail the deemed of potentially that looked reached sort us at environment. going of that through we’ve be as whole to away, to the commercial held to was have and Limoneira, rent. of piece And went for the that develop residential so when had sale

of going idea. a had, And we more $X for so based originally in be was the million commercial first concept it to that distribution that

a then this original of balance Lewis the we million And increased and projections the guided project. plus developed partnership signed just in when $X what is that and the so land concept from now LOI with to

so land around had not the as but increases, And nearly seen cost this we much some as we’ve seen increases story. as

more by for we’re is, So it really And working And still second million. values estate units continue land insight year years could to some the that as end. we’ll climb potential years, have the then our There in real there two, cash your is question accordingly here more opportunity expect flows accordingly. three take hopefully continue adjust opportunity the on, we gave therefore part we’ll the yes, us up there. and if a that be XX see that to on next of great to additional climb,

Harold Edwards

included balance guidance we are the XXXX million. three is and, and do good But we’ll clarity of of second to highway to believe partner – hospital chance revolves the monetization is part that Ben, be another to that the as we’ll for previously with across for approximately healthcare is intent medical in land a the County medical medical the parcel X deals placeholder the will with of is a those balance XXXX, our land and direct the firm We $XX And sale then very XXXX. see developer believe East to we around place in hospital. office And of up. actually between in question a in Area And most that XXXX. a campus. in transactions Ventura our parcels agency Directionally, land in third of a who the and build bed developer building parcel parcels the announced in there your not Yes. property concurrently somewhere we in We’ve office a to partnership. the the which more and XXXX take of announced and a that of sell believe parcel directionally likely $XX and $X million will continuous letter any those then believe use transacting first XX building million of bring

Ben Bienvenu

great. you Okay, so Thank much.

Harold Edwards

Thanks, Ben.

Mark Palamountain

Ben. Thanks,

Operator

with Anderson from Please Stifel. Vincent is go question next ahead. The

Vincent Anderson

guys. thanks Yes,

net and Asian just it for the demand your year, can possible the an shortfall. for the of demand higher Coast East what is working increase between later Russia are level as crop at importance lemon. So given this quantify you to for impact us a – especially on then outlet that, the then, through the California thoughts supply maybe Argentinian And

Harold Edwards

United in lot that’s question unknown at of for insight, great their having that the how fruit for of of the profitability question importers that Argentina cost Argentine because ability go? double the big increased and a land into this will impact XX not that Russian States We’ve the shows point big States containers to exporters the events, seen of the point the and a is fruit and to by will the the market for of which all Argentine lemons the The or over in to the this all That’s lot the the access basically $XX where market. the profitably actually United that the of last lanes, breakeven profitable. carton mark, supply shipping a us a containerized below shippers is between we’re impact shipping chain how the driven logistical through and $X impact months we’re be challenges aware And out costs somewhere now of.

one be arrives going obviously Mark, will impact or sort that from sure year, not. this an Coast not or market have of that whether because, a the later its situation. oversupply to big it negative if find a the into East question, then likely way on that’s going most not we’re fruit’s U.S. So to on It’s

to potentially be sense we’ll in it but some participating since pressured hand, to us, those from going our other beneficial the to pricing be continue a we’re On is that could lemons of of continue imports, the the year, because – of that the be together, under we’ll at of the remainder pressure. be to oversupplied and least with suggest all coming we’ll all be variables perspective for

Vincent Anderson

Okay.

demand? of you And Asian relative what a just sorry, to you of did crop did scale you the what the lost California sense have – in

Harold Edwards

Yes.

we the do So larger – what desert year. than think XX% larger is year. was last know coast is XX% The is we XX% And than last valley XX% was the larger.

cartons year a have off Asian year to it about on larger crop the you of about together, the to going cartons cartons, the – year-on-year, put million find probably versus all on, of magnitude thing. it’s on year. industry it to someone additional relates If type last all demand, were equates as destruction it’s million for. in the this of hum tree It X to last XX XX% that And

combination there. it crowded of things out two the those are So making pretty

Vincent Anderson

Yes.

Okay.

are those numbers. So pretty real

Okay.

programs little last bit U.S. maybe land more of So you environment that just how really they or years, ground. trees party once, related that? third cooperative, there a different aware of are kind alternative out of of this just any them this are. of And to much of taken not And be everything mean, conversations question, Are maybe specifically, grower pack the market? at if modernization lot mentioned isn’t given the the seeing and is are happened. I with that the have going but too few that’s just where generally you’re should getting in the you’re a we but a of to Do competitors your

Harold Edwards

they’re latter, more to market. pack it’s there think and the I

we’re all our if coming, There’s keep oversupplied planted there’s aware there all we finger of so trees do an an the been nursery of California a sort try on activity, lot to in the and that’s that – We there’s and isn’t are discussion Arizona, because of And have nurseries pulse the situation. supply with lot being awful more young know and of of yet harbinger to California nursery Arizona. lot planted. that a come still in the And that’s of that online. there’s stock throughout

made to back the a Omicron up itself. how of ranches again, it’ll open we before the and a And all in you we’re coast, if out but are crossed with getting district bit it it’s expect in world to out, we little last to right are pulled things the the where pulling to way. in the the year, pretty in money our look for And as of ourselves closer. bad really partners As trees pain back as began district see manifests in farmers outside now, variant money to Growers a the two. back pricing the case, we’ve we actually be then down that where made grower but and lower not had and where valley to one threshold environment, be for situation we’re the we point shakes good interesting believe

Vincent Anderson

Okay.

hear And a wild that coming trees a so Those lot new were [indiscernible] of like around still to that okay. are I’m the guests. to planted surprised little bear there’s

Harold Edwards

have of because that’s parts is thing other of curtailment. drought – other the there’s the And the Exactly. growing you water different the there areas, dynamic Vince where

And cropping five survive feet so two of now lemons does something if with down seeing into like you’re a a planting that. feet and result were and using crop lot water. a you’re of as acre less going And to you acre acre, limited one to an permanent row

Vincent Anderson

Interesting.

saw And in agricultural development. Okay. stay and large, the to that California real that all land except is your we for by – exception has in estate

Harold Edwards

Yes.

piece We’re it definitely can’t to to and urban an be agricultural effort well done. might convert development anomaly the property just financially you politically so in an as the It of much rule. takes exception just that assume not

Vincent Anderson

Got you.

juice. try to case? much more about juicing to it’s one any you opportunity juice enough. or anti-dumping no. based money just of big that U.S. this know you could any Fair your not thoughts on $X not it’s a there? in have one, do goes and the found I But demand carton care ask $X what for supply there We do probably Okay. a on quick If Is to

Harold Edwards

outcome. inroads with a as we that And premium Yes. of relationship and juice has suit will will great at a of NFC him any filed that fizzle looking we was we kind friend direct who get for have offerings. filed a a that had really actually of a really fruit. cases successful expectation He’s send relationship a the into manufacturer just the that, that the ship we’ve result, the suit to and industry. overall typically say guy is What versus typically don’t the ours, gentleman periodically These

to even all it if expect I raise a the float really tide necessarily prevailed, little wouldn’t higher. he boats to So

for rooting camp. a successful. across it’s them, just be don’t but going we really as would it a don’t we’re think think really but I have come lot We one-off, to of

Vincent Anderson

guys. right, me. I problem. all for All it no appreciate That’s

Harold Edwards

Thanks, Vince.

Mark Palamountain

you. Thank

Operator

Ben Capital go Markets. The Street Lake from is next Please question Klieve with ahead.

Ben Klieve

at taking but around rights question do the discussed, the lemon, deployed how have thought already challenges, you that kind have I you to is of But there been way of have that, given that’s the to of the environment that, the that point? it a is have something that be water this a or to has right. I most for access current kind one me, to. consideration around Thanks what going your All been mean current monetize questions. I that, process really any address be this would to the thought about is in non-operational not water access wanted about excuse affects you environment, talking that guys

Harold Edwards

take Thanks stab and for the it question, I’ll Ben. good That jump one. Mark free a to it’s at in. a then feel

this water from rights. following monetize our interesting program. preparation not some just the a really in of own Colorado opportunities that in ways lemons. with X,XXX will new for acres to be to is that that farm Vegas. about generate We lemons. a XXX one alternative Phoenix and be that And only to need new see you’re project but housing program agricultural acres We’ve not And in of actively Arizona following to water growing way that farming in down growing beginning actually to uses essence, mostly will value return to that for River those pumping and other water to products. Central all us Arizona water the in first But allow growing is water water pumped up versus Las filling take to for of also and Tucson, for program announced So in that followed a be late to the are not following

the an see. later mid-to-late that example we probably in the So program that, of to one first expect you’ll you’ll – summer. that’s this formally And year, announce

are seeking color? taking and them so of them we inventory best highest sort our our with of use and with that’s to all Mark, there. And else that we’re any water of what something that constantly an do we’re going of other with and doing example assets

Mark Palamountain

the on front that the think I that’s that’s right now. No, plate one

Ben Klieve

Got it.

in more I’ll tuned Okay. Thanks back taking queue. we’ll for there. question. get interesting. I stay it for That’s my guess very for me. That’s

Harold Edwards

Ben. Thanks,

Mark Palamountain

Thanks, Ben.

Operator

is question next Partners. The with Instructions] Larson Please ahead. Eric from Research Seaport [Operator go

Eric Larson

guys. thanks, afternoon. Good Yes,

part I, already of one did addressed I So questions the that the Argentinian fruit. you’ve of with your of it

thinking big we Russia. So about you go I the happen number the don’t won’t impact on think know so U.S. that to have you won’t volume you’re – is got that there market but we that potentially what’s did that into that? the actually don’t what is. on going in volume impact volume yet, quantified case How Obviously, like potential a

Harold Edwards

there’s don’t, question. a – there’s We it other other go. that Because areas area Eric, can great also it’s

besides down Russia, crop considerably. Spanish the So is

window received a four this be a to shipping we there’ll Argentina report morning to fruit for that to go of six-week Spain. that So some

the we that fruit as help it’ll would the at all that the the fruit believe again now that’s year the the handled shipping on market And to a against about of is of of of ago. that on depend time fruit XX% what somewhere the million And order We a the was lot exporters. – so decision an and cartons. will raw from – increased handle directionally deliver that Argentina imported really juxtapose Limoneira on a Argentine that that the And going to be drive just the costs outlet. economics shipped of bearing

million you We’ll the all out the And its driven year, to really cartons for more, as that window open be that prohibitive down economics that see million And all be at of really to either prepared what’s just doubt be to come the so to supply that low right, the finds have in fruit of the pricing last were of to we is it import pricing – – us will into what’s economics district of market the of because by of importers the price shippers doing just much time two. that domestic to were to what if way have all more if but would coming export the imports it’ll market. we’ll would X close or the prepared that if X extrapolated would the or would I came

Mark Palamountain

market, typically the only went Argentina And a ever to fresh. XX% crop Eric of does have XX% large pretty juice

through total just And do the have not it ability so and whatnot they co-contracts get the disaster. breakeven, to below absorb maybe to some call but

they have So some do optionality.

Eric Larson

Okay, great.

– fruit do isn’t sending it of pretty it So fruit unique is they Europeans different that of Russian, kind ubiquitous of you’re a those so a grade type grade like countries. is to do or and that

You fruit shipped Can could that if United other shipping, the a again, anywhere areas talked you opened basically else in world? be States about up bit little that.

Harold Edwards

lemon standard, a It out lemon. case, a their specific they the exports – the and typically is lemon Argentina that is grades, three grade. in are And fancy, choice, of call Yes. – a the it what case, the fancy the

So if that it into other taking the it it. in interested go in would go likely Russia, can be can’t of to most any markets

Eric Larson

Okay.

question, final my I’ll So let guys go. you

assuming XX year crop of larger million about cartons. industry-wide that in cases impact is correct? So the that’s the this California or you I’m quantified number, an

Harold Edwards

right. That’s

Eric Larson

for change you acreage does million too, been that’s XX you other those carton so So short bit year. be or if the into other how And acres about been you’ve development – talked are the you little that it overabundance three the land? too. you developing put your four years, adding last you could We how correct, doing non-producing way fruit Does today and that you’ve a impact actually every obviously lemon of right? are plant,

Harold Edwards

Yes. question. And insightful that’s a very

growing of less be productivity stronger, we have regions younger, the a older, across stronger At that with time, lot portfolio of productive blocks. also balancing trees. will the So greater trees bringing young coming same we’re all the

of and lemons productive hear us areas. alternative blocks begin and going not see in less going older, you’ll pulling crops into some those likely So about most into and those to

the the most markets, is driven pandemic. big demand is is pullback to now, begin how services, think A return And to for us watching expand grower in it seeing going being supply. very, to there. fruit. the packing and balancing ability and total the acres moving of pandemic, growth to going the out as are because our demand continue double-digit of these limit part closely bring, the industry to balance Once to that’s pulling – we sell everybody we we and supply, plenty our just to part a between we market because less total we we’re As Eric for us doing. older, to were remember closer that to be still fill that trees slowly, big with an with correct expect those of there’s now way becoming hopefully, that to success to of amount services decrease partner else Asian of what pack our very as and move and by throughout outside other comes right the the of find we’re And towards impact productive ourself the back forward. bearing the be provide our our growers, constantly non-bearing that house do industry But we in fruit people’s albeit before and unknown fully

get there. not take just how We’re it’ll to sure back long

Eric Larson

it. Got

really that on last had back if goals lemons be – years more we customers. you U.S. land? that the the retail is striving full don’t orange I – that this believe over citrus more in that or of more become is for was one a really that been plantings. conversation So your four substitute citrus three would put – to service supplier And – I in you’ve oranges, more where primary and a say on you were let’s Is interested to of the that

Harold Edwards

not. Probably

And and good area and to avocados. secure And be about to pivot growth to access Santa consumption look cost if the bullish an lemon which few of and continued visited appear a that a us gives future, opportunity from you abundant, the that, in Paula, we’re avocado. really, out avocados really you water into the we think lower main to future ranch be would have where California in of relative an believe parts we to bullish where we’re expansion. I of very that other down

Eric Larson

it. Got

let guys last go. So I’ll question, you

all variant mandates stuff. – Omicron sharply, the all the the we’re in and requirements has all come off the that masking So lifting and U.S. very

Omicron Asia, do comes So relative are shouldn’t the off that else to So in in I where pretty probably they what we where when this infection U.S.? it’s seen of sharply U.S.? rate or the here in I know off, – and come should we’ve it sit the where in like

Harold Edwards

Hong so is at I the today. think having they’ve biggest Kong read far. had so, that this Like its morning outbreak we it’s peak

And is – like are, camp of it’s actively closely it for not are at are pandemic very, right in it’s So it that society been Hong it was peaking most. Kong us. it from they’re the like not. in with very would then it primary And like the And out view still is the it. they’re this impact, And dealing here Korea, XX% market they’re watching the we about is the hit test their feels the at at where just mirror, that’s South litmus very the – three and than the on of is there’s is feels more especially we’re we cautious work how closely. improving of the going and we’re we’re us And looking maybe point, because of with dealing rear the there’s United before States it but what’s it hurting just company markets a the but it’s but watching that we’re pandemic, the being orders where we getting Japanese reality the in reality now the the Those in trading I it. industry slide with, today. too. Japan put downhill

Eric Larson

it. little everybody. later. I’ll you, follow bit you a Thank to Got Okay.

Harold Edwards

Thanks, Eric.

Mark Palamountain

Thanks, Eric.

Operator

this time. are further at questions There no

the turn remarks. to like for closing would to floor Edwards back Harold over I So

Harold Edwards

all wish very much. Limoneira you Thank you Thank very much and for to day. you interest we great your questions a in want and

Operator

This concludes teleconference. today’s

at You may you disconnect for your your participation. lines time. this Thank

Limoneira (LMNR) 11 Mar 222022 Q1 Earnings call transcript