LMNR - Earnings call 4 2023 | Limoneira Company

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Operator

Greetings, and welcome to Limoneira's Fourth Quarter Fiscal Year 2023 Financial Results Conference Call. 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

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

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

particularly Relations in it's not being have to a of statements, on adjusted available company's make at more on understanding many to comparing period. cause measures website had remind Investor analysis replay underlying webcast, and non-GAAP such from involve be to will call the or is We by can release, facilitate operations, in ongoing unknown whether no additional you we Such If statements. be Limoneira's other or a statements known earnings such believe statements note results, view XX-Qs limoneira.com. the forward-looking begin, law, details future implied the mentioned results we greater when and the everyone update in financial available SEC these release. number herein, or and the uncertainties, like chance by its well.Before events we achievements risks today, Important the Except to financial forward-looking portion a new differ that call required to during undertake company's results, basis. XX-Ks and contribute or prepared or the that that measures, on may the result contain performance expressed outside questions. the control cause forward-looking and information, This differences any a Limoneira's of results including adjusted will factors as or are results would those statements period website and achievements your discussing an of of and to company's complete remarks could and as performance to significantly could include from risk future which a response of we obligation filed of management forward-looking with otherwise.Please

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

Harold Edwards

am afternoon, and Thanks, of year our full lemon pleased in our conditions with lemon achieved most XXXX weather John, volume good fiscal avocado the revised despite and harsh performance we guidance throughout year. year everyone.I pricing softer as and

with $X.X proceeds water and for Cadiz. for made a entering revenue of net cash $XX to Northern our in the towards the expected monetizing certain to in reflected quarter, sale progress strategic operations year-over-year and year fourth and our program growing compared in million year. farm lemon results brokered other reaching company's second eliminating Properties latest sales our an asset-lighter the of progressed unprofitable model our in and shift fiscal this million revenue farming We annual exiting our business last Additionally, in row million quarter with management a is lemons assets Yuma, in no our fallowing this year close nonstrategic for Arizona $XX proceeds,

net are this XXXX. have with fiscal traded believe the fiscal debt to our our strategic our XXXX, actions improve since position shift actions becoming and the margins our advancing year and a in stronger we set positioned these past year sheet committed us financial company.Heading position company be lowest year taken into a up to have publicly at in of to level rightsized All balance

nonstrategic anticipate next also selling We fiscal proceeds. in $XX an remaining the expected X for assets identified this million year

in project. inception have of past While year a up XX% encouraged of project, Limoneira the pick a premium rising of selling the the we the the residential out at year our lot interest project, rates back with temporary remaining this slowdown XXX are at in caused Harvest end at Phase sales units X at to sales to the seen

and sales projections flow cash with our in increase $XXX years, over expected increased balance. fiscal higher has to fourth by approximately in all million fiscal XXXX.Also, $X year X in proceeds improvement now market prices the adjusted being expect in for $X quarter, received demand out to and for being XX curve out supply and and million with XXXX year fiscal shown account have of prices sizes. This caused overall fiscal million the We is grades total a XX% spread

on Mexico, the grade year. well and up. prices time has quality in volume side, the that aligned expect this next to this strategic completed Californian July is our much the storage position excessive in Closer and We be fiscal expected our and factors transition are to add American with we in heat demand higher of lemon U.S.A., like year fiscal impacted the XXXX.The these lemon last supply and year. in overall an business than are plan flooding lower to of improvements situation combination South events been asset lighter On with very should quantity well in the we in on in remaining the fruit are supply availability the at Weather size us go crop. for having making pricing good Chile the reduced. of impact and same the all believe trees fruit,

owned million increase will the streamline operations, our EBITDA This rightsize realized the water asset that dividends nonstrategic debt, was million in $XX.X owned compared October fiscal the on XXXX. model to year fully on we to to assets, benefits a least sheet Even calendar all to Reclamation begin the balance cash and reduce initial improve a to the be end return that per program we and as sales, entered share, of through year approximately continue Irrigation earnings, Bureau and recent feet fallowing that pumping of XX,XXX XXXX, acres we United are Yuma Debt program land of Mesa States working pivot at fiscal towards into acre XXXX. invested $XXX with after and District, improve We announced will supersedes at will commit XX,XXX our nonstrategic second capital. our fallow sell of The approximately of the business hand less XXXX. improvements consistency year these with and Drainage manage of rights. year, the and usage XX, land of

be We that have paid as acres expect Colorado would otherwise million the retained may shareholder refrain fiscal fallow Yuma, farmland water $X.X District, Arizona. enhance to Yuma our business acres water. Mesa irrigate receive from in Lake use Drainage Mead in increasing the result that used the in to you Mead of Conservation shortages our see approximately of Lower supply assets and Arizona from save our Irrigation Basin.In XXXX installments quarterly to and River focus Lake X,XXX so will Colorado annually This been XXX operational fallowing lands water water elevation of year to and of and out approximately diverting an in to to the on in and side continue our of best value. will asset-lighter on System avoid transition business, River model helping the will

us We for decreased our believe Irrigation Yuma be We'll lemon in fallowing obligation. fiscal year Drainage will better well for improvements XXXX. fiscal XXXX, strong District year year dramatically quarterly interest pension payments compared program, our and have from and pricing be expense, removed to this Mesa receiving we positioning

In our marketing aimed estate an including, in portfolio strategic parts evaluate farm our leverage packing, properties shareholder and stockholders, operational enhance Board the our additional to to of or of and best This the call to, citrus, potential value. combined and strategic our agricultural how continue in management, Mark. distributing addition turn valuable rights sale over team a and real expertise lands, our merger process to management long-term to I'll alternatives water to will all for improvements, of order value to limited company, maximizing Board has not other towards now transactions.And at that, led but explore potential with with

Mark Palamountain

of reminder, seasonally to an our due you, good nature to seasonal best softer business, quarterly third the are business first quarters afternoon, second are and while on view Thank fourth it and our our basis. quarters Historically, our annual, is everyone.As stronger. not and the quarters, a Harold,

December X% price revenue a us at XXXX. in fourth revenue the and fruit. per of fiscal industry growth year lemon XXXX million to fourth throughout that $XX.X XXXX of in sales industry-wide the cartons the increased lemons to recognized per fiscal quarter of average same certain harvest Brokered of $XX.XX were $XX.X approximately oranges of operations revenue avocado net average year total the a in to The and to carton the XX% XXXX the fourth $XX.X of compared quarter fiscal revenue million the year of pricing recognized sold the and XXXX. of revenue and were other net that pricing fiscal lowered to price highest see quarter of year years XXXX, of year Other sold lemons during quarter for fiscal company during a compared due in all the fiscal no average heavy to carton portion issue fourth $XX.X the million $XX.XX August, seasonal grades price year the of of fresh the fourth steady in the XXXX, the $XX.X in sold fourth of was which year $X.X sold fourth in price other of revenue fiscal quarter average and in million quarter last the the of year. revenue of $X.X to lemon quarter in May, XX,XXX sales were fiscal per this of quarter sizes year softer carton the Beginning quarter, $XX.XX lemons of company year quarter to since quarter period was million because on year to XXXX year of representing $X.X during cartons at compared $X.X fiscal fourth the year revenue compared compared million Approximately during lemon citrus Approximately the nature fiscal fourth cartons quarter fourth XXX,XXX XXXX was grade experienced of million quarter revenue the the quarter to nominal fourth previous a compared throughout to fiscal fourth respectively, record and $XX.X fourth previous California orange carton of For fiscal lemon fourth XXXX. quarter for million cartons delayed compared recovery year quarter XXXX a fourth million at in Specialty avocado in year. fiscal the XXXX in of price the million continued the fiscal XX,XXX $XX.X XXXX. throughout $XX.XX The fiscal quarter an began XXXX. year a in quarter $XX.X million the Agribusiness we compared year-over-year.The fourth fourth fruits. for leading XXXX. compared $X.X to per fresh in $X.X our XXX,XXX rains test to most until last at year.Agribusiness includes million of fourth million million during total

costs in sold were the to As revenues cost citrus after in common compared in XXXX.Farm of share expenses $XX.X adjusted $X.X $XXX.X fourth income per compared fourth XXXX common loss to loss XXXX.Total Company million our year million fourth for of million was to XX, period $XX.X of of the $XX.X fiscal $XXX.X fiscal loss year fiscal Limoneira to loss stock for same XXXX, diluted the of a gain fourth loss million period Operating loss quarter the year to $X.XX Net fiscal of expenses of the for first of of earnings farm October end fiscal the the income in XXXX. $X.X year per Properties quarter income as year XXXX. to $X.X our loss in fiscal the net primarily of was Adjusted year to million stock disposals. XXXX $X.X $X.X the Company year to end also orange $X.X fourth period last million XXXX loss a compared of quarter at of for diluted was transaction same million last the share operating loss were compared EBITDA fiscal year. compared the to farm loss of EPS to same XXXX quarter fiscal for $X.X fiscal fiscal operating year A for management to a compared net per fiscal at after applicable and Northern fiscal of compared decreased fourth reminder, Net EPS million above.Net dividends quarter applicable the to to to of is net year XXXX diluted in of to fourth applicable loss and quarter year to described of were quarter million fourth in attributable in fiscal we Adjusted loss Net provided million of XXXX fiscal costs of EBITDA for loss year, fourth was stock asset applicable period fiscal in release.Adjusted A loss the the compared million our dividends attributable the XXXX of provided $X.X an net dividends $X.XX of for XXXX. million diluted and cultural year $X.X for majority million preferred quarter of same XXXX the for of year. quarter was of diluted in is of of million the costs the increased year year year the preferred compared there compared quarter the adjusted specialty the earnings compared year $X.X fourth and fiscal million revenue $X.XX fourth the expensed reconciliation year XXXX $XXX,XXX quarter $X.XX quarter year diluted of the net of was year in for fiscal $X.X net quarter Limoneira year. a XXXX. after reconciliation per primarily per stock year was due to previous ended fiscal net quarter million in $X.XX common adjusted increase was the fiscal of diluted net the fourth XXXX. $X.X loss The same to as during XXXX was share the fiscal of management to last XXXX. no fourth XXXX net $X.XX fiscal release.For to diluted and but year XXXX. net share year in was loss per period acreage was share common for year for fiscal per to of income preferred million on Operating XXXX, in XXXX, due fiscal year of management revenues capitalized fiscal share

differs primarily which fiscal on allowances shares average for For year on XX.X taxes, XX.X% stock-based respectively. provision and fiscal recorded compared XXXX. loss of weighted an of taxed tax XXXX for year fiscal rates, $X.XX and tax XXXX net pretax EPS million for year compensation, statutory an valuation for share million. effective was of approximately adjusted rate federal outstanding certain foreign XX.X assets and provision million impact income tax year $XX.X million tax XXX.X% $X.X different jurisdictions, recorded EPS XX% of XXXX tax share diluted fiscal respectively.We U.S. subsidiaries. the per $X.XX nondeductible for fiscal state and loss diluted per for common foreign years loss net $X.X The adjusted million to XXXX XXXX, XXXX, compared XXXX of fiscal year deferred based net year The was rate XXXX and items diluted million diluted was loss on to adjusted diluted fiscal $X.X net for due of from tax Adjusted income of to at are tax for

of we EBITDA a of million X, for fiscal of of sheet nonrevolving $XX.X $XX.X For XXXX. sold and year, rate fiscal line as Long-term of of the to cash our liquidity. a now Credit at was XXXX, except resulted X.XX% of our in July XXXX.Turning total levels our Northern XXXX, adjusted to XXXX. of income credit, the $XXX,XXX million year interest million on XXXX, were At $X.X million. $XX.X of proceeds The $XXX.X of million down the was a fiscal XXXX. has loss all at the until compared domestic October end year Debt compared debt pay Farm AgWest of used million balance fixed as million $XX of position net to Properties, which hand, net XX, XX, resulted year minus year the to in beginning end of which debt, a October fiscal $XX.X debt proceeds

a year million Combining may and outlook As provide we turn and assets reminder, this Harold debt discuss position longer-term our an back approved our net by remaining for fiscal the fiscal call like to the have pipeline. year over opportunity sales. $XX next year.Now to EBITDA reduce their XXXX time further to next to monetization with of nonstrategic I'd growth

Harold Edwards

Mark. Thanks,

XXXX. the in cartons cartons lemon X volumes of of we expect pounds million to be be XXXX, avocado million million to year fresh pounds to X year volumes range range fiscal for in the and X For to fiscal X.X million

growth to bearing we next years, will XXX X X which expect organic of avocados nonbearing the full coming become over estimated the enable acres years. strong to in have We and lemons

our estate of over at X Harvest by fiscal $XX our over to lot with I'd based also to third-party increase XX% East asset Builders years. XXX to X XXXX.Lastly, a like during expect Lewis model Limoneira sales to to The fiscal transition, an total plantings million is of operator. lot on due X, Community it our anticipated in as to lighter increased October a expand additional have steady our grower Area proceeds on have of we increased Limoneira, turn sales over Additionally, the reminder, in avocados $XXX we primarily million real year.And years plan fruit.Turning increase based we pricing expected next to next our the and and the that, X asset projects.

Operator

Thank this you. comes at be question-and-answer Bienvenu session. from the with time, Ladies we'll a Instructions] and Ben conducting line Our first of gentlemen, Stephens. [Operator question

Ben Bienvenu

So way as setup looks talked right it XXXX, about think And constructive. heading What demand? lemons constructive. of demand any not the higher more I is crossed environment now demand is ask, Harold, it the if seeing could want little pricing we the was it it sensitivity? in sensitivity you pretty I there demand And Or you a supply put bit be threshold prices? into looks with you for The demand than to a supply XXXX that respect favorable in the to looks particular to have there, are to in trigger backdrop XXXX. starts

Harold Edwards

demand would the those say the be to bit some little and our think levels. it rates export The out are I pleased very markets the the what and think markets. we're with of dollar, pre-pandemic where see that where with we strong fair foreign continue struggle demand in products exchange one prices rest we're is strong back to area today to it year, of of where for and I fiscal the the we really structure we a

margins, due drop we're this of which other so rates heading to foreign related since us And give year, that haven't see the pricing, the exchange and dollar. think XXXX. I high pricing seen demand to than cautiously which optimistic the we the that, strong help really considerable we've we'll into But seen with fiscal continued the strong should rest

Ben Bienvenu

at Great. second to question Okay. Limoneira. Harvest related My is

of where increased those You've When we with of both into next program and in the program. much time sits interest from rates now total proceeds? around there is that proceeds yet well extended. the falling The the look how that as the of amount you year, at receipt has that timing expect variability prospect the program line

Harold Edwards

that's a question. Ben, great

up, Phase know, you we interest had what So done. XX-month getting really started hiatus as a we're close and call an a, we'll to rates X going where

finished putting were our Now lots XXXX. that exceeding in we up XXX we lots prices over XX% those expectations out where from project, at at this started

have budgets know, Now really and make as shrewd we every partners, you December. we

also cash increase sales flow that so in the we push basically an And out, XX-month reflected the recent but lot that saw.

I potentially think to X. we'll with Phase opportunities quicker see move

large right that now We and of all homebuilders the negotiating are that. we that with fully attacking now close

'XX something of with if goal the try think so pull see our Phase in working that forward numbers 'XX, X that got so as 'XX, And opportunity to and get we're is in to but hard I plenty to we've you or try to not do that. to conservatism

Ben Bienvenu

Okay. Congratulations best and luck. Very good. of

Operator

of Ben next Markets. Capital Street the line question from comes Klieve with Our Lake

Benjamin Klieve

some your changes question of clear, that hear into going the time. kind margin in remarks wood, of you in on environment than here about I you've some you made it's 'XX. line pricing your though expectations and about in today is Harold, the been knock favorable prepared more the realized operational First for being commented loud 'XX. margin

you irrespective so or will of in that in pricing, that of in were can here not you about be the expect included OpEx level sold 'XX goods cost repeated talk And of 'XX? cost

Harold Edwards

which a is the for higher you cost the Ben. One fruit, things still when you because part year costs rates. for of on drives had point utilization at amount versus We with year. it lowered of that less expect least of the the sell challenges to same coming last that And happens, into packing of but pest utilization put the Two your year Thanks and the fresh a up fresh. weather fruit, this rates we lot out, influence that question.

we've of impact cost. is impacts were structure. And cost benefit having not rid of in Cadiz less a higher of will only profitable negative will some of lot to profitable margins. not recognized on on that think getting the be of negative progress XXXX in So business, other be the our parts the made specifically one the felt in that but hugely And we that's

Mark Palamountain

to And add. also, want just I

fiscal quarter difference and we you of actually for harvest business, year, sheet depending those 'XX, XXXX if noticed on management because a costs costs as fourth picked to and those were Farm year used So between to Services full period year of expensed as the all be are transition the on own those that incurred. balance our most of Prudential the properties. ownership, And all as now outside as and up

relative expense $XX quarter-to-quarter that harvest So to periods. we years, of came this had gaps that came until that prior in million year

And And the also, agency overall business, going down, see increase you'll as X% you see so forward. see brokerage us but up. business, then dollars going percentage commission that net gross margins you'll our actual go

but business declining dollars gross improving. a not margin So

Benjamin Klieve

to of intent to acreage you relationship versus any processing here then between years? the expect additional Harold, you acreage capabilities comment acreage Okay. well? next then, potentially as Very the kind increase plant things level few a over you intention about And few couple on here of talked the years. avocado your your this. One, can on of plant the wondering over next good. to avocado adding I'm And

Harold Edwards

to, in competition not be Their time. And premium comes really from of that's a call in at the to that opportunistic it California. little having start to California and very in a that very crowded little capturing actually May pleased and the be forward also and anywhere fruit believe, trades harvesting Avocado in standpoint. a I'd seasonality it, not from do that. where we a from very marketplace out window origins. nice to bright Mexico at or Avocados around pressure other March No, where from you're here a is lot in is nice market Peru here typically window fruit a a niche California, carry have foreign future,

and provides we on to bullish that, County Ventura believe opportunity produce very ideal we're So that avocados. the

Ventura with lemons, that X,XXX been County portfolio lemons, has of towards heavily avocados. acres historically X,XXX being our So on of said, acres our acres X,XXX weighted of production

Well, of but to you'll being And relationship avocados. a productive acres resembling avocados. less that more see invert with of replaced won't we'll and acres older begin invert. pulled be lemons see closely exactly You'll and that this, it lemons X,XXX to being X,XXX are

Benjamin Klieve

but it. more I'll leave talk Very a about, helpful. place probably get Got it. in good that's to Plenty back queue. to

Operator

[Operator Instructions] line Raj from B. with the Our next Securities. question comes Riley Sharma of

Rajiv Sharma

and your was just in a I the wanted Could World on One What expansion that new the does that? customers? strategic to imply to of of management of terms review trying the bit understand expand would that be get announced. Citrus also little farm business, you you

Harold Edwards

do that. to happy Yes,

management mode. entire of just have will working over the we as for that we'll plans established So But outside and take. can the far full the opportunistically, fully estimating also company goals and we've business at go to Limoneira with of be team expansion next grower alternatives of process, entire and in focused management operations fiscal fiscal business the process exploration or on that management services as expanding strategic and expanding stayed of agency on business the how Limoneira the year. each partner But ahead be internally and expanding this those and increasing long as year team hard areas. And X farm our strategic business our in of expansion and those We've and our will working Board speed our supplier our the on away business. from with a partners, X as time will expand be each parts frame

Rajiv Sharma

harvest the Phase to And understand just X on then I wanted side.

result equity for as dollars it, Or So if that's those you as get into show would Phase be flow in would those X? up rolled the over extra cash of and company? a that as the

Harold Edwards

question. great So

we again. on had seek before try would is rate to Phase in upfront changed. how the the what roll. that structured. the whatnot, an to to interest have about on $XX be grading We a depending environment do So do have longer X the if to costs grading, the that homebuilder $XX infrastructure little which do side million million deal gets will will Hill it's We be equity But of that was to and answer the certainly opportunity a us ourselves, and the takes

and early really the But We that is just But putting But to guys million, we'll be constantly think flows back-end conservative a on nature. the about of first sports be there, these moment conservative park. So you is I up it's But $XX it and the you bridge to first that's out think tell finishing will and and forward. moment is. we're pricing JV in very cash about still a we're what cash projects types that we're gets going it see their optimistic heard that which up. Lewis still loaded. build why too have

Operator

further call no are hand to like the the There to for back questions in management closing I'd remarks. queue.

Harold Edwards

your Thank and you rest your interest for very of your Happy day. all questions Limoneira. of and much a in have great holidays,

Operator

Ladies teleconference. your for you and Thank participation. conclude gentlemen, today's this does

disconnect time, your this may and lines You a day. have at wonderful

Limoneira (LMNR) 21 Dec 232023 Q4 Earnings call transcript