LMNR - Earnings call 1 2024 | Limoneira Company

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Operator

Greetings, and welcome to the Limoneira First Quarter 2024 Financial Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, John Mills with ICR. Thank you, sir.

You may begin.

John Mills

you. Thank and Year joining XXXX everyone, First for you Fiscal Quarter Conference thank afternoon, us for Limoneira's Good Call.

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

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

implied uncertainties, Such we results, begin, of known from involve and unknown contain its results, make remarks achievements management cause a the risks of Before prepared differ and may outside significantly like to or questions. are we'd such additional forward-looking many everyone response statements and or that statements the in company's and remind could number control which forward-looking by performance statements performance to forward-looking achievements your statements. or future to expressed

or that company's factors filed a no and cause of Important release. earnings the differences whether result to required in to law, otherwise. Except events obligation with any new mentioned and the XX-Qs SEC those XX-Ks other update herein, in statements detailed as or include risks undertake information, or such by could the contribute we future forward-looking

comparing and period. from during of results an to facilitate adjusted ongoing that can greater today's be financial non-GAAP on these analysis particularly period of adjusted more operations, Limoneira's note Please believe results we'll understanding complete when results a measures, We underlying discussing financial call, basis. including measures

on detail discussed provided as that basis. adjusted any have are We much items as an on possible

share adjusted are press to today's posted reconciliation per and in release, included which website. adjusted of Also, our comparable directly GAAP been per which EBITDA EBITDA the are share diluted remarks, financial included and we the has company's earnings company's diluted financial adjusted the non-GAAP measures. and measures release adjusted prepared earnings earnings within most to A in

to And and with to CEO, my call that, over it's the turn Edwards. company's the Mr. pleasure Harold President

Harold Edwards

John, good Thanks, afternoon, everyone. and

to model in year towards XXXX strategic very our the expenses shift improving results agribusiness see reflected period. loss XX%, adjusted to our first X%, decreasing fiscal Agribusiness asset-lighter by year business and in encouraged EBITDA with an of quarter the are XX% We improving by prior seasonally soft our operating compared by

in that the of Results for rainfall California impacted picking quarter the delayed to lemons increased from the the first by first quarter. quarter were second

do not we quality expect on any However, the of have to fruit. or the impact the the overall harvest other rainfall

run market avocado pressure U.S. and reduced harvest will Mexico QX due avocado to QX period. into from begin Additionally, California import of that during and in seasonality the in Peru the and

Peru. other We time believe which the opportunity a pressure niche of in significant for predominantly that not from July how producing from California avocado without have that country's the during frame recently that Ken and and producers areas avocados serve plantations United the seen state illegal you told to market regarding U.S. window the ambassador, contribute are the to Many largest deforestation. Michoacan, the market on coming States Salazar, provides media demand from U.S. avocado world, Mexico, fruit in to Mexico attention Mexico, will the avocados grown the U.S. import production April

illegally and on The port future farmed and XXX is now come agencies X/X To put represent efforts by of ] [ U.S., avocados the Michoacan this identified protocols this into have been are time This state orchards. perspective, from the of first working illegal in approximately export these grown authorities. approximately Mexican produce. Mexico to orchards

of the to X.X XX% Department according the supplied imported Over to the XXXX imports pounds and avocados, the of have the and billion in U.S. avocado Mexican nearly imports Mexico of alone, increase U.S. price this potentially past of avocados. States effect on years, has Agriculture. fresh United X believe an may We

our for decision announced to properties Turning leading rights. real evaluate acres one recently in into has XXX-year the to history valuable Limoneira's business, estate with of over overall alternatives water XX,XXX senior and strategic of the agribusiness companies sustainable grown lands, world, over the

near- enhance value. XX shareholder past the a map strategic intended we months, have road Over and developed to long-term

shift business sheet consider strategic having reduced we a in debt be rightsized an our to our ourselves recently through balance strong asset-lighter model. position, Today, financial and the towards ongoing net position

sale X remaining as As years. value instead of and add of the received, packinghouse next over strong nonstrategic value our is the of of on as interest interest pursuing pause well away our expanding we have from the assets production to best to the it avocado due and exploration decided X stockholders have maximize Chile, in the part strategic in move to a our temporarily focusing alternatives we by

to overall improvements transition our making asset are The we lighter strategic business with aligned are well plan. our

balance to return invested business capital. our and per the assets, reduce improve nonstrategic and model of are EBITDA improve sheet on our a sell pivot consistency share, towards working earnings, dividends our operations, We streamline the debt, rightsize that increase will the

feet year will acre shareholder see manage value. nonstrategic January on and million model XX, of best and assets of owned of to use the business to focus cash with million to business, compared land transition XXXX, continue after XX,XXX pumping approximately at enhance sales, Even to was In fiscal rights. asset-lighter approximately asset $XXX on XX,XXX acres hand, an XXXX side the to of on our operational less we of usage the Debt XXXX. year fiscal our end as you the our water continue $XX.X of recent

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

We also versus last. a crop this larger have avocado year

how In long-term marketing addition management in with to best operational to citrus lands, agricultural properties and our value. of Board valuable distributing continue shareholder packing, real in to evaluate rights leverage to order will and our management, enhance expertise our our estate combined improvements, and farm water portfolio team

with that, And call I'll now the to Mark. turn over

Mark Palamountain

and Thank afternoon, you, Harold, good everyone.

our the are third begin, stronger. first are Historically, would quarters, is fourth basis to the business. remind I nature I and Before quarterly our softer you view best to our it quarters quarters second annual, due on of not and seasonally an seasonal our while business

million revenue million of $XX.X X% total XXXX, in was net fiscal quarter the compared to million the the last of revenue first For first $XX.X year. year increased the quarter quarter fiscal compared million of $XX.X in year. total revenue first to $XX.X Agribusiness net to previous

operations our $X.X million and revenue in XXXX. year XXXX As the was quarter first of fiscal

year carton the XXXX. million fresh sold $XX.X first for year an revenue per to fiscal price year X,XXX,XXX a $XX.XX XXXX XXXX. quarter in of fiscal were the lemons quarter Approximately of of same lemon compared fiscal fresh during X,XXX,XXX XXXX the first at price the $XX.X first includes per fiscal Agribusiness average at carton sold to $XX.XX million during during cartons cartons quarter compared average year of of sales period

year California -- Brokered XXXX caused in due by XXXX million and or quarter less in received. rainfalls revenue of $X.X XXXX that first cartons million the to The were the The years sales the first year $X.X XXXX other of quarter in revenues and period lemons recognized fiscal fiscal of of respectively. in company company fiscal lower significant the to XXXX, has first lemon fresh of harvest sold lemons and express timing due quarter the no avocado harvest.

price during The a million the year the sold company carton to year an XXXX first of fiscal at during XXXX. quarter XXXX. quarter per cartons year to first of price of of XX,XXX XX,XXX were average of average revenue quarter orange million carton fiscal fiscal at compared sold of in XXXX $XX recognized $X.X compared the per Approximately $X.X first quarter the $XX.XX cartons year oranges first in fiscal

was for of our Properties million of year year farming, Northern orders management in and first revenues the with the Farm of in in $X to were As XXXX. services. of $X.X and a company due lemon first foodservice fiscal retail year has quarter quarter million operation revenue the XXXX customers were buy-sell first sales. citrus primarily quarter management million There opportunistically complement the to fiscal fiscal fiscal crop XXXX. management the $X.X first quarter reminder, to year the compared our revenues farm XXXX, other Specialty and in arrangements no

$XX in offset expenses. million selling, the of increase in of quarter compared for year and sale quarter expenses expenses XXXX was agribusiness last in million cost costs the $XX.X Total to and The the and million of first were $XX.X fiscal partially the of to due gain the decreases primarily fiscal first quarter year administrative XXXX, year. and on properties the Northern of by general first

loss year, $XX.X fiscal the in of the first Agribusiness first year year. declined quarter expenses to cost fiscal X% million first for first the compared quarter of previous properties XXXX. quarter compared in the in sale the of million to fiscal the million operating the of the year primarily $X.X of $XX.X of was XXXX million quarter for on to first and $XX.X fiscal last year of gain quarter the income Northern to Operating XXXX related

preferred dividends year of quarter XX% XXXX the compared million XXXX $X.X income loss in map execution to Net to operating the first year common common the was the for unprofitable Agribusiness first road compared strategic primarily the prior the fiscal of of same to stock million to elimination quarter loss of year, operations. XXXX. first in to year of $XX.X related fiscal improved quarter fiscal applicable the of after ongoing period net the for stock applicable and

in the period diluted year XXXX was income compared to share of $X.XX million was net per Adjusted loss fiscal for net loss for for first per XXXX. $X.XX EPS year $X.X per loss $X.XX first for of quarter period diluted quarter of loss the diluted the diluted diluted year was for fiscal same the of to first of the same year net XXXX the year net per adjusted XXXX. for Net $X.XX fiscal share Adjusted share first fiscal fiscal to quarter XXXX. $X.X fiscal compared compared year quarter million XXXX share of

Company Limoneira is EPS net net to of at earnings our to reconciliation attributable loss loss of provided diluted for the release. adjusted end A

$X.X financial first our a water of improvement fiscal a XXXX entering period to actions in in and Adjusted in EBITDA position $X.X loss management have million XXXX. to of quarter this last Northern of include same Arizona, fiscal services $X.X the a properties million is to exiting compared year a result farming stronger put of was the The we the loss following million in took year a year which operations year. Cadiz, unprofitable us perform in program much farm selling Yuma, of

is reconciliation loss of Limoneira end the at of earnings attributable net A adjusted to also to EBITDA our provided release. Company

X.XX% of fiscal to debt end which million year credit $XX.X balance our farm non-revolving to year, except proceeds has $XX.X The of sheet our Long-term Northern now all million we the XXXX, were of proceeds as credit, XXXX. and the July the debt until to down January liquidity. at a Turning and million. fixed compared last beginning At $XX our was a total of line XX, of used West net pay domestic interest sold XXXX. properties $XX.X resulted X, in Ag million of rate

net cash at on a Debt $XX.X levels as of resulted hand XX, of $XXX,XXX end. position million in January minus quarter debt XXXX, of

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

Harold Edwards

Thanks, Mark.

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

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

plan also the have in avocados third-party expect steady fruit. X years to over next and to expand a we of our grower plantings Additionally, increase

of primarily at Harvest sales expected our proceeds increased increased Builders projects, due East million we the pricing X to October Turning have X Lewis The years. to Community Area over fiscal our X, our in lot lot XXX XX% to estate based Limoneira Limoneira, is real and increase on XXXX. $XXX by total

the I'd to that, hand call operator. like with And over to back the

Operator

[Operator from Ben Inc. comes with Stephens Bienvenu Instructions] question Our first

Ben Bienvenu

sees the of part conclusions this around I as does a sale the strategic on strategic want the in review? is this to first review Or the final still a pause review, ongoing, ask the are the the of to the assets strategic decision review? discovery strategic these Health? and the review? of And any the decisions packaging Is other noncore you of Chile midst made

Harold Edwards

windfall still in passive an production review No. of in just The in the that early would we part robos felt review. vineyard process, entire is innings be then of strategic the there. probably Chile the important as the And assets portfolio of the part assets strategic keeping the overall are

So rather around peeling part them we'd discovery. off thought as than keep we ongoing the assets those prematurely, of

Ben Bienvenu

it. Got

impact shift all EBITDA quantify in makes quantify question first to should second to from the think that sense. is related the is or or most harvest weather on shift that it in quarter. That of got in My lemons the you Can shift volume to of to timing the whether that, and you based you it's Okay. XQ? whatever XQ the XQ the clear

Mark Palamountain

great question. a Yes, that's

had rains. because orchards get X different into oil and touch know, about or days as few really, X of consistent And can't you fruit spotting. the So for things get you a we weeks the like you

that So is looking QX quantify, QX out harvest, and and bit a into to -- to QX crop shift of as little into probably if will balance great. it's we cartons you XXX,XXX the from that the summarize XXX,XXX about

quality has been The there.

have utilizations good. been Our

move So X.X million -- able those our maintain and to but million volume to we'll and cartons. have from guidance still that X same be out

Ben Bienvenu

Great. Okay.

falls on And just impact that so quarter impact anticipate purely and of there's it's extension no timing this, and from of the which you it the utilization sizing by into?

Mark Palamountain

into we great exactly. away. and then It's turn saw XX where XXXX, yes, get all not thrown they fruits those to had Yes,

weeks. weather So, so the we're and like opening few far, good some it looks to get so is up, weather good window now the and supposed in next

feeling good it. it's So we're about

Operator

from comes question next with Capital. Klieve Lake Our Ben Street

Benjamin Klieve

to you the had being clarify to want they back you I assets already decisions avocado for like not sale. expected. even decision these Are strategic sounds this review decision are production, Can related? Or and between circle than it increase on X exclusive? the that X and the mutually more

Harold Edwards

looking World production Ben. Yes, felt part overall at we're our of of exclusive, mutually be they're At keep to exploration. would prudent when it the we assets the point, this Citrus as model, One

this Chilean capital and push any necessarily not move a house into Chile Our really not our decision to pause with just is forward deploy to investing by more into driven desire packing -- at point. more

as Chile. agency, that of chain to marketing continue out the services for that produce marketing sales as maintain the for come packing still But well supply will and we sales Chile by and fruit in services that providing and fruit the to

as own not fruit. with supply So agency and our and produce those them and more fruit, more work remain But partners our our operations but continue down will produce intact. We'll an house. grower chain as basis with to mature trees there more on necessarily then packing grows, our supplies, the younger packing

avocados. increased California far as the not niche there. plantings to So great the main the but of avocados. accelerate more driven to there's this by decision opportunistic that's little assets, that those really That's for realization And divest the as decisions just

a our land We continue and believe of more that great have oversupplied. as it's become lemons less to use profitable

and to We out lemon growing land growing see the grower keep and also in agency time marketing packing, avocado accelerating increase convert on services some our own in with avocado selling our the our our avocados, same County, our into which should of opportunity partners, production at business while that that but Ventura chain supply production. balancing and then to also citrus our our lemon

Benjamin Klieve

Okay.

time specifically. that you additional magnitude quantify my expecting to which questions avocado? have can on just the of wondering then And you just plantings a I the into question, I'm avocado other you're this frame redeploying you or And of kind over into? planting part new help One, the Okay. some Limoneira answered of is, is if of this think into going visibility be acreage acres existing couple

Harold Edwards

Yes.

acreage. it So the existing of just really a redeployment is

And about it's way, about think that. it exactly simple that not It's X,XXX acres of really of see X,XXX we X,XXX that in acres way going to acres avocados to acres from next years of what over pivot avocados County, acres to but you'll and acres close X,XXX lemons or -- have going is the the acres acres lemons been of X,XXX Ventura X,XXX quite of sorry, historically of the So about avocados. X to away X,XXX X,XXX lemons. is farm and

Mark Palamountain

Just one more on that. thing

and which and Investor growth house, as So of million. part our we look Day to it pivot packing the of Chilean out our to model, $XX get us at the was

quantifying to X,XXX and to it lemons, Just to economics us million of bearing. of for Today's and avocados down tee $XX $XX acres pricing X,XXX that. getting to million EBITDA sort of to up, about gets

sure communicated So about per it that lemons we just that, in profit in that is X wanted the to is operating make the acre Xx to what was pivot today.

really place County Ventura that's anymore south the so the And et San pivot. California the significantly further in Plus you to due grow challenges avocados reason behind in can Diego, is the really cetera. only

Operator

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

Rajiv Sharma

I is heard, out just things to there sell, strategic X,XXX X. grand does but the company on a or parts Is that's the scheme ongoing, what lemons a to in avocado understand what that want of related X,XXX the of wanted also really and entail? you to to sell company going going the acres to mandate figure review just to we what

it significantly hear operating did I higher? be So profit could that your X-year

Harold Edwards

process believe of per avocados our You back growth are currently. But lemons was which part the alternatives. profitability balls well. exploration as as of -- look of strategic that, we first your will did of maybe the yes. we to on believe that beneficial very a the the And be Raj, the where crystal will step into versus that We question, with future, enhance correctly, significantly that, acre hear just we take at given

has into into process a company. of begun the assets So the the with initially very dive deep robust, valuations

So the of assets company value of has, look completion like. our and asset best our the from of and a nearing that use better giving land assets the company of and understanding value directionally our And market fair the understanding we're sort water what really ourselves a of highest that. the assets and and directors existing might

in that All very from the been of to groups pleased interest of various significant been interested have assets. that levels while or types we've be all receiving would inbound of some

had interest. You've strategic

interest, funds, insurance sovereign citrus You've had companies, from large as development wealth you've also avocado interest. well as but and real interest water And pension had estate and multinational interest financial even interest.

So there's all it's been spectrum interest, been a inbound. whole of and

the to legal the but Board and expressed now will that interested So to might out which these process, parties have will interest have with expressed we forward the they take phase take part our may process potential decide be to exploration, of of bankers to a part on our look basis haven't advisers of move and room inventory would in. where with to the then action, any be an some think be you the and be closely working many interest, but in to might potentially outbound of of reach the next around inbound story which we'd interested valuations which the next be -- our agree there

then to or the explore Board presented the see of of that strategic continue now. themselves, decision will at opportunities down to some sale the it of or right Once point plan sort in the that has process potential place complete, of which make company the with path move whole have the is what to the all forward process we'll

But at really pretty and looks things an of and exciting possibilities the point. it's going exciting So busy on. a look us the this lot for We're potential all time.

Rajiv Sharma

That's great.

X you're you Can where So or in pricing? same lemon reallocating avocado that acreage. obviously so Mexican going you the along see acreage comment California year -- years, do pricing do Where do vein, And -- on is next the you see you on? the given into the avocado see what's premium. where there

Harold Edwards

this you California niche can that there with the that Yes. not May as wish I Ventura we market I tell and when availability avocado a wonderful from Peruvian window ball, the but believe market I County serve Mexican supplies. is will that supplies that to crowded or had of crystal is July in

our we also fresh nice can base, logistical And a within miles the fruit very premium customer but -- because during of significant our there'll we're have frame. that be very customer time believe that that to And we very, deliver advantage a that can strong market believe XXX enjoyed base we wants. little be a

come for is those and for be and will truncate to think seasonal be is because is imported selling from significant. that in pressure what July, the happen believe I won't much more but think market avocados, the the So harvesting And going window May values California to sustainable going there crowded. to from we strong that I make the the fruit really to

the for believe we million XXX just thesis pounds. consume pounds our transition, it's that's is industry over this is and to U.S. context, going billion So sustainable. produce to an the going X for only as year. California And

It's So niche. and it's but niche, in. real have will we for it's believe participate very our that small niche opportunity believe shareholders we great a one a to profitable we a

since avocado up post Super $X.XX And we've about Bowl. just seen from right about $X.XX a now, pound there prices

that about So think to typically, drop you when U.S. that creep million opportunity. million when see you is see and start to into XX we XX coming consumes a might below up those a have May, prices the pounds we week, April,

Operator

no that appears this It questions at Instructions] [Operator time. there are further

I back to would over closing comments. the turn for now like to Edwards floor Howard

Harold Edwards

much. you and your Limoneira. thank like Have for you day. questions in interest very your Thank I'd a great all to

Operator

today's concludes This teleconference.

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

Limoneira (LMNR) 7 Mar 242024 Q1 Earnings call transcript