LMNR - Earnings call transcript Q2 2024

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Operator

Greetings, and welcome to the Limoneira's Second Quarter 2024 Financial Results Conference Call. [Operator Instructions] It is now my pleasure to introduce your host, John Mills with ICR. Thank you, sir.

You may begin.

John Mills

Thank you, Diego, and good afternoon, everyone, and thank you for joining us for Limoneira's Second Quarter Fiscal Year 2024 Conference Call.

are Palamountain, President Chief today Officer; Chief call Mark and Financial the Harold and Edwards, Executive On Officer.

today release, By to now, went earnings the access X:XX out which second quarter Eastern everyone fiscal year should time. at approximately have p.m. XXXX

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

unknown that risk by Form or we to statements. Important contribute could to the company's forward-looking or such XX-Ks statements to may Such or and like that and to those XX-Qs are achievements remarks begin, everyone and could otherwise. achievements which in as we obligation significantly by factors result SEC results, of mentioned management filed release. whether new a to outside events Before questions. other and control with results, on contain in would of make statements expressed prepared remind statements performance a your law, known forward-looking differ in factors number implied and the forward-looking or required we herein, statements, performance as uncertainties, involve cause cause undertake the include the differences Except of future such company's information, forward-looking update additional risks earnings many any and its future or no response or

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

diluted which we much adjusted within press remarks, have detail adjusted are in adjusted are to most on diluted EBITDA EPS, any to measures. company's discussed possible company's of website. posted EBITDA the financial an financial that which today's been reconciliation adjusted the earnings A earnings basis. Also, are directly prepared release, per and include comparable and as provided on has release adjusted items and the as non-GAAP measures in its GAAP share included We

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

Harold Edwards

Thanks, continued decided very were joint overall John, double everyone. Limoneira and generated afternoon, real as even the project quarter, better $XX.X year for that with which EBITDA we I'm momentum represents our million the pricing the and our majority venture of our good third of harvesting that business achieved prior in pleased highlighting These of second the The Harvest than to period more the higher adjusted estate quarter volume. overall at development move to results Lewis Group. avocados for

our the our to planted fiscal by over avocado acres X expanding transition follow acres X,XXX year continue years through by next discussed We XXX to acres in XXXX. X,XXX previously with plantings with

mind, our cash discuss. We EBITDA recently compared of We this I this expect prior year the target increase in does million. $XX significant to milestones avocado Harvest longer-term million expansion flow of $XX the which fiscal include will by project, dramatically expected $XX our to million increase from at XXXX achieved Keep not our Limoneira will production in two for to our company.

sellout First, of A residential of XXX venture inception. the residential April development. units thus closed from total X sales joint units, in XXXX, representing the of project's lot on X,XXX of closed the have Phase the completing

to XXX joint Paula X,XXX total mixed-use ventures of III the a for-sale construct and single-family opportunities. Based the a events Lewis portion on increase units, separate XXX multifamily homes provide and unlocking residential land these plans home few will residential to of in increase value creation Council project. for sites our have in A This this continued Phase increase rental project, proposal increase further City a to we The X,XXX value weeks in over with the increased the by ago, is on expect XX% million total within associated Second, to XX% units year approved Harvest. from joint with of cash years the the unit spread the XXXX. number in additional approximately Santa XXX project venture flow out proceeds million $XXX receive future fiscal with expected fiscal now next projections $XX X units.

our provide overall evaluate to to alternatives on like quick Now strategic business. for I'd decision the a update

value. be near our months, past an recently enhance towards we debt developed a projections Limoneira. XX the our balance and to long-term reduced consider ongoing strategic flow Harvest financial model at map shareholder Today, ourselves the asset-lighter through business to having net strong increased intended position, and in our Over we sheet shift from have road rightsize a cash strategic position

is next quarter to alternatives stockholders in X $X.X our our position exploration $XX.X part focusing levels Chile on of best maximize strategic XXXX, the in production value over we of a XXXX, the by XX, XXXX. As $XX.X receiving, debt hand, at of debt are of end. year we was of move instead end April from our pursuing packinghouse resulted of at a years. Long-term compared it million the interest million as in to net million expanding less to of Debt XX, on strong avocado and given as the value million fiscal decided interest $XX.X away add and of April cash

venture is our million is which XXXX financial with to of note the residential of important liquidity venture and our April additional quarter Limoneira $XX to net of expected proceeds. debt Lewis million the XX%. Furthermore, closure beyond it's joint distribute cash source However, figure. in cash June sites held with in home with joint entitled to flexibility XXXX, additional $XX joint the further XXX million provides April, This the venture end the for of XX-XX $XXX.X equivalents as of share our that XX, of

we acre-feet of and this XX,XXX with usage of recent water to on use year the rights. will focus Even enhance XXXX, XX,XXX fiscal asset-lighter side In our asset owned assets of nonstrategic model continue business, years, acres the value. manage our pumping after land past see approximately X.X best an sales transition business to our the and operational shareholder to of you on continue to

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

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

Mark Palamountain

you, Thank Harold, good and afternoon, everyone.

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

to $XX.XX fiscal fiscal X,XXX,XXX of cartons XXXX, the fall $XX.X second a delayed of at quarter second $XX.X the $X.X year Agribusiness were compared sales packed was the caused quarter of increased same in $XX.X California million by million lemons XXXX for fiscal last during net to picking in to quarter per fiscal compared the quarter X,XXX,XXX to XX%. the of U.S. For carton the of revenue second total quarter fiscal second in revenue revenue average year year fresh carton quarter of quarter operations second million of Approximately average in year. million in XXXX quarter year. includes second $XX.X year. Results lemon pack to at and of of rainfall million of compared XXXX. net the previous of fiscal year revenue utilization the quarter sold the cartons revenue were the the period year to second price to during sold fresh $XX.X total XXXX that around impacted $XX.X per million to $X.X during in $XX.XX price quarter in compared Other second the year year compared X% fiscal last was of a million XXXX. decreased Agribusiness million in XXXX second fresh lemons second fiscal the

to $X.X year $XX.XX fiscal of second $X.XX year approximately order fiscal second Brokered were lemons the compared and representing fiscal $X.X at XXXX. XXXX were XXXX, and in revenues growth orange other of year to in the of years significant pound pricing. year average fiscal capture period at X,XXX,XXX of average oranges recognized same XXXX. avocado fiscal carton second to approximately quarter Avocado in $XX.XX year in of fiscal fiscal $X.X fiscal quarter quarter settlement sold XXXX average second million avocados. during of million in fiscal quarter sales per to included XXXX million the during quarter third compared aggregate of company of average revenue the pound from the XXXX. The during lemon the of into second $X.X respectively, $X.X company XX,XXX cartons per cartons XXXX to million quarter and $X.XX pounds second XXXX sold anticipated year recognized second company price in the $X.X second revenue fiscal carton quarter a sold million price at pounds proceeds second XX,XXX allocated fiscal a price year the year-over-year. The Approximately of of the a more during compared harvest XX% proportion strategically avocado of second XXXX a XXXX its year of quarter a of compared per million $X.X of of year XXX,XXX quarter postponed Approximately were The sold quarter the avocados the quarter million during to price the legal XXXX. favorable at per year in

sales. Specialty reminder, of compared our million second and XXXX. buy-sell arrangements was customers for a to our $XXX,XXX quarter the $X fiscal the XXXX fiscal complement year in opportunistically As year retail lemon to has other quarter in of with citrus and revenue crop second foodservice orders the company

XX,XXX of sold XXXX equivalents $XX.XX quarter an $XX.XX and XXXX, at per approximately second of carton and XX-pound XX,XXX respectively. and XX-pound the average were carton fiscal During -- year price

to million $X.X $X.X quarter was compared applicable second year compared quarter quarter million fiscal year XXXX. in and of common the second increases the year. stock $X.X previous of of The period the and the of to the asset XXXX to Ranch $X.XX XXXX year the of million year loss [ second $X.X by disposal, year for fiscal the fiscal and general Net to share operating diluted in to XXXX. year net the quarter fiscal dividends XXXX. Net Total were fiscal to compared loss of million $X.XX diluted last net decrease $XX.X common ] of quarter year agribusiness expenses income revenues offset in per after for second applicable in compared million $X.X $XX.X costs was million same $X Management the costs compared a $XX.X and were loss in share period of loss stock a quarter million second expenses expenses. Operating for preferred fiscal $X.X second same million of fiscal was year. primarily per XXXX second selling, partially the income was million related of administrative of million quarter Cadiz quarter XXXX Farm fiscal in for XXXX second to year the the of fiscal XXXX of of (sic) for to

per the of million million second compared Adjusted XXXX fiscal to diluted the $X.X for year in year was $X.X period net of fiscal XXXX. same quarter income EPS

was share fiscal $X.XX per second adjusted for XXXX. income share $X.XX diluted year net the diluted compared net of XXXX quarter quarter of of the for income Adjusted to second per year fiscal

release. or of to A to real than in Harvest also period million continued EPS at million. year $X.X second The loss to the compared our Limoneira diluted development to the end the doubled income $XX.X project. to year provided million XXXX of income was Company reconciliation earnings EBITDA adjusted loss earnings reconciliation net Limoneira momentum or highlights release. Adjusted is quarter attributable or of at of and prior $XX.X compared provided of end income net the estate the A for adjusted net our to Company more improvement attributable EBITDA fiscal our loss is of

fixed of total interest X, net the now last we Northern until which rate $XX.X all AgWest Turning a In year, has used million. to sold liquidity. first and the our XXXX. Properties, Farm quarter our pay line balance in of down to domestic were $XX of nonrevolving proceeds our credit, which debt, of Credit, July resulted except sheet million proceeds The X.XX%

$XX.X the the $X.X million Debt of net $XX.X increase The quarter to compared end. of minus was $XX.X debt April needs, a primarily working was year XX, which of at as at April by Long-term on second XXXX, XXXX. cash in capital end debt driven typically million fiscal quarter. in as million hand of XXXX, million peak of XX, resulted position levels

net partnership debt joint proceeds. distributed Lewis As Limoneira X, as This financial and it liquidity additional that equivalents June note on the XXXX, further of venture received is our million XX, with the joint joint $XXX.X closure the from Harold million April, held in in provides venture mentioned, cash cash the important XXXX, $XX of beyond our to of Furthermore, share is XX%. homesites XX-XX additional XXX with million figure. at and flexibility of our source which end April venture residential quarter $XX

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

Harold Edwards

Mark. Thanks,

pleased are our We direction with strategic very company. of the

to volumes for continue XXXX. be fiscal in the year million lemon We X.X of million fresh to cartons to expect X range

guidance the pounds for them are million and previous to X be in year XXXX to We X million now avocado to pounds. our million range million fiscal volume pounds compared increasing pounds XX of estimates X expect to of

of for expand planting term, from over consumer is next capitalize to demand million $XX its by to million. increase acres trends. by of outlook X,XXX robust XXXX, X by Longer $XX This target $XX of the are fiscal underpinned years accretion avocados raising production EBITDA previous we to significantly our plans avocado on year up million

During this from Limoneira. Keep does the operational XXXX. account earnings and similar XXXX year at take fiscal be expected fiscal in Harvest this not XXXX expects transition, company to fiscal additional year year into results mind, to

XX% entitled value now Limoneira, from years. Turning from at Community Due receive additional Area Builders we spread the Limoneira Lewis next lots East to overall future out $XXX a over expect increase increased of to to proceeds previous our of expectation total the real and projects, estate. fiscal million, and X the Harvest X X

And to like back to I'd the with it that, operator. turn

Operator

And question Raj Riley Securities. [Operator with our from B. Sharma Instructions] first comes

Rajiv Sharma

them. have of I couple a

that Phase correct? that clarify just was units, units -- and to The an wanted Just on reconcile was is Harvest. XXX done to Phase so XXX the that Phase X completed, to XXX was completed, far units X,XXX Phase And that's you now have X trying and X additional X,XXX then X, the is units units. original. And was

clarify I've of could got you that, questions. and couple more If a

Mark Palamountain

Yes.

X,XXX answers XXX XXXX X Phase there, that total that units will the is Phase to rent So indicated. completion X,XXX. sold units for get And as the be will to apartments is and you if us number of then additional the multifamily X, question. single-family be of The

Rajiv Sharma

it. Got

Okay.

Mark Palamountain

Phase about It's XXX math. X, the just additional in around you lots if did

Rajiv Sharma

it. Got

shareholder market asset taken ongoing that mean results relate you've the obviously that And your does value by another one, the helps -- to how and X us announced more on you comments perhaps final to strategic how review, color some avocados then related operation, you how years. provide review? understand Chilean think -- the -- post being of helpful. eventual in But house to the Can off strategic pack that to expanding the light your robust review. on the help could Okay. there? the not Is the make a and it That's very just for Harold's unlock review, strategic I comment I

Harold Edwards

Yes.

Raj. question, thank you So that for

were value anticipating that So domestically, packing offset potentially capital we in to to avocado in also believe the we more at the lemon our more supply look we build creation orchards pivot Chile there. only by chain than working our partners into then we're of expanding with. Not that and is, as the by increase house Chile, own our grower what of investing generating potential production forward strategic there with maturing trees but our the

access then it by production to for creation ideas opportunity avocado our of better a And for transitioning going us them, marketing felt that add and was increasing will shareholders but take so going lock value continuing to strategically, the have them, cartons Chile in but which in to capital value selling X to also on to investment. not how additional an necessarily to million by would we requirement eventually the here better packing focus much our we're be for

that we forecast So we be investment production, the avocado for Chile. that but of capital expand value views also our the on creation what it's think our a packing lot greater less significantly than were counts our to of will think

was put the you we together, of that So made it that pivot. rationale when all why

Rajiv Sharma

That's just you you EBITDA question up last see X,XXX $XX clarify see the the from then soon And How that this? could avocados very acres from of your over And me. it. helpful. years? help of of gone Got million I $XX million. Could X economics to estimate has

So that coming how additional current prices, And from those the the at $XX economics all $XX would million avocados. to million is work?

Mark Palamountain

Yes.

question. great So

the about So the full we've and acre ground got change we bearing. Typically, right pounds now, on avocados, depending of per acres acres to anywhere XX,XXX XX,XXX XXX and from of which in trees expect whatnot. age are to X,XXX the get

so year XX pound from time. get anywhere has and of volatility we'll additional know, to between of of the we a as planting, X,XXX you pounds believe million acres been to we're pricing somewhere over And a the period avocados. XX last $X pounds avocado the that And $X million

months started see So about we we XX it as why the planting we reason is planted, basically ago. flat

you'll is which usually so call to while that EBITDA. after rise first X get X.X year we the to see next, it, years, years, commercialization, then X, And start in their trees over those

by [ XXXX, the of there. call to price a range somewhere -- from $XX $X.XX that million very $X.XX and sort XX kind achievable XX think the that it, we million between depending on going ]is range in is $XX So of to

'XX I $X then growth going think up new just 'XX, every $X year, online. can trees as those 'XX, between and you million to So million see incremental just come

Rajiv Sharma

just Got it. lastly. then And

stay you right are dynamics to mean, expect avocados, the the impact as supply any years, they that expecting to So obviously, of you next look robust don't demand you X suffer to I in demand-supply expect you now? could... sort probably any Mexico from as

Harold Edwards

great a question, that's No, Raj.

are to avocados the be future, high-quality California May believe the future into into it's perceived and because the will the fruit seeking American and to very at sustainably have that be niche and that produce prefer. this and today, more and between we product, demand So closer we to is is a of from essentially believe fruit in consumers Peruvian at period a the allow the creates time opportunity product bullish avocados we North today us we window on if of and which sustainable here look a you against the Mexico want that competing crops are as logistics alone we market July seasonality fresher where little a market It's market California. We'll because the with market. point. But California during very that

market you've lot that more other in drought of is you've one the where that San exist Orange the we we significant to California capitalize production gives County, is County, is of in niche United Los little Ventura lot of moving Angeles And County, challenges produced ideal a and still a that the sold of here but believe on unique that's that there's seen not this avocados driving and seen opportunity of are this domestically in into avocados growth and water dynamics decision come us and California so water and out into this sources a County, States. climate area amount up up the a believe Diego conditions sustainable in coming sustainable, only as then production

Operator

Klieve [Operator Capital Street from Instructions] Our Markets. Ben next question comes with Lake

Benjamin Klieve

though, a initiative. congratulations again line news I are related far. My First, to really just out out questions, over the know agribusiness operations. congratulations and be of yes, thus that the the to while on took on harvest able the announce to getting sudden finish

I'm I'm the thought in quarters? Because the side. there announcing is the wondering it your today? avocado than the can that's elaborate seems on expectations of and avocado kind couple avocado you your Is what had next something of expansion you maybe different I'm on like over kind last in were all, if you of over this few First plans wrong. you're wondering is here direction that of materially if going, changed years

Harold Edwards

Thanks No. for that question, Ben.

will best American the the the for the before, seasonally of probably the combination have brings California, strengthened will punch the Michoacán the production in you market. And through its Mexican the for crops again, supply production just North of between most combined the out to window May from competing, Mexican able July. niche Peruvian that niche avocado And the of logistically that production against if that of our really, being ], we the we we So efficient Jalisco time be believe market in California and year-round the be with perfect California States production approximately confidence comes And then its where the harvested both California mentioned seasonality of out possesses the [ believe I at United and that of supply the really be and a provides and one-two production. as that seasons. will, exists it

interesting that And believe we a is will believe demand really move so grow continue we creates as and to we profile sustainable that forward.

less is crop confidence convert between for just transition pounds. that's somewhere profitable XXX Mexico older, a avocados. then million the some the million given produces We billion somewhere pounds blocks in lemon with continue to them. And in of the and the magnitude California be refresher, year behind favorable significant So X a and XXX again, avocado trends to into of demand tailwinds our believe them avocados us and

we magnitude production. So of from in an of sort comparison order you see pale of

our we believe because seasonality, we our demand However, a for of can product. sustainable have meet niche that

have the we've great and which typically per the profitable producing two years few lemons, oversupplied value creates with that So our those things really create avocados, on been more land the we farms discussed, convert last -- into our County. Ventura think are own as a in to in which here them combination for was significantly opportunity of acre

Benjamin Klieve

Got lemon lemon continues like kind you on to of one driving quite it. is to talk pricing. of outlook? And you questions the pricing I mean my Can about seem the alluded It oversupply other this. $XX.XX.

it what's think ago? now in here your the kind in disappoint? line I this was your with at of expectations that time fiscal did months half quarter? expectations Was And of this X kind Or of that in the second year?

Harold Edwards

a not, the No, by what receive, lemons ago. we pricing. mix market first we was a seen lot quarter of believe year is quarter we a driven fall was of it marketable would stronger, lot the filling a that And much that stronger percentage lot of the the lowest to quality, or which now, reporting higher had have more while and what you really quarter, higher the normal or a from this which mentioned of the the was in toll in the we the sell for up is of and on quality and we higher rainfall a challenges the -- had is a out. If had a we're on rains much a we percentage and the standards. -- had actually than second fresh but take we Mark significant by of which that of in pricing second it fancy driven the it aquifers, second had just more put that that earlier, -- winter, The even our by did the of a the amount product fruit, fruit lowest available with blessing has price the remember,

So challenging and better and getting a we into to lemons actually out. the the help And guess, X costs, be to in you're I are we think And sell because higher I going of pricing or going think overall of see this X pushed things year, continue lemons the that pricing lemon is future. more that's produce environment the to all and more space.

Mark Palamountain

on Yes. pricing $XX.XX. the sizes lot to pricing [ [ that. And There's there. two I'll low XXXs stories not add again, XXXs a ] right is that probably now even about the of environment the a that's bit And tale current is smaller out out of a ]. The little there, just so and

the I today think $XX range. I in high heard a quote

feeling supply it's that's point. but a $X in profitable up just we're still a and dynamics this but last So year, We're to at higher optimistic. than in obviously going it, march demand one be slower

Benjamin Klieve

Got you. Mark, line. in you, one back I'll it. both helpful get That's for then and of for

of years? it go associated kind over next in understand into bit becomes needs the and You you're to Totally can talked about initiative then before if understandable. though, of fiscal I'm the managing and couple the kind CapEx this of that you 'XX about expectations acreage your as the 'XX OpEx ramping avocado with us this wondering, acreage. help productive of a level

Mark Palamountain

question. Yes. Great

it the of an balance and it's manage acre inventory first look sheet. in X it So to plant cost if all goes we on at avocado our for and holistically, $XX,XXX then And an about years. that

that. see won't we So

few old quite bit cost next of business And also out see these a you'll come come going into the tired over be forward. years we'll commercialization. until than So of lemon trees pushing the trees those

volume a we'll be partner then see and also agency more you'll drop and outside little our of So volume growers up bit picking then business.

seeing costs in, year revenue years but which start then back right then now So and are actually, plantings X, as from about get we'll you'll be of through those getting once would I well. come on our -- X.X X/X say trades we those

perspective. expectation the wanted own set be we to business So flat from the our will that lemon that's it's why probably

renewing million. the project total will We CapEx some is also And $XX trees. be planting think the about lemons, lemon I over new X-year

million or go. $XX So million spread out into $X to And already be million over it will so X years. we're call that about $X that,

you really see it. won't So

Operator

at further no Edwards comments. back this hand floor for And point, there are Harold this I'll to time. closing questions at the

Harold Edwards

all you and questions you thank you to very like great in wish much. Limoneira, your interest to a and We'd your we'd for day. Thank like

Operator

good that, may you. a disconnect. today's And Have with Thank conclude All parties conference. day. we

Limoneira (LMNR) 6 Jun 242024 Q2 Earnings call transcript