LMNR - Earnings call transcript Q3 2024

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Operator

Greetings, and welcome to Limoneira's Third 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

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

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

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

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

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

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

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

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

Harold Edwards

Thanks, everyone. John, and good afternoon,

We overall are with for pleased of million in quarter, and the $XX.X net business by extremely revenue our XX% the this performance quarter. generating EBITDA adjusted highlighted growth

In for addition, $X.X of adjusted million $XX.X we generated to months period for of year the the million X compared EBITDA same year. first last this

well In contribute in pricing fiscal million XX%. our this avocados raising X our pricing by in experiencing first growth as with achieve record pounds with volume X avocado our our time robust company's conjunction in softer and seasonably year higher as we us over lemons driven million by This dynamics, was segment approximately revenue demand this avocado fresh guidance avocado favorable guidance, anticipate will quarter avocado improvement positioning to increased fourth volume to the history. and for

X production significantly years. decision These X,XXX results expand over validate next the our strategic acres avocado to our by

Harvest sales. home has our real our Limoneira momentum environment In venture, interest seen addition to development with agricultural current joint the success, estate steady in increased rate lower at

ongoing segments and growth EBITDA growth. expected avocado of strong success with expanded overall commitment agricultural sustainable production to achieving value reinforces in multiple our for creation our coupled diversified our underscores and our The improvements, from business solid the confidence earnings The stockholders. Harvest, across

this X our months milestones during estate, of the we X first Turning to achieved year. significant real

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

proposal to X,XXX total home Phase single-family units. Harvest. rental will provide venture's Santa the project. XXXX, for number project Second, X,XXX mixed-use to portion sites residential of separate units of in homes A increase within May increase the XXX-unit the to plans City for-sale XXX the The joint Paula III on approved XXX from of the joint of a construct the multifamily additional Lewis venture Group Council with

associated further total $XXX This increased the increase next the proceeds, XX% in project, and X increase dwelling spread future units, expect in the out is a years. XX% these land we opportunities. continued projections in flow by cash events to million our receive unlocking in Based on value-creation and this over fiscal June value with

highlight EBITDA quarter balance and was to our to Mark that will XX%, sheet, reduced real our improved provide dramatically from our I debt improvement second but thanks adjusted transactions. by estate in color long-term wanted quarter the third more on our to

debt XXXX, at July as million end. quarter XX, net was Our of $XX.X

XX, $XX However, approximately million had $XX.X as an unaudited our on share. XXXX, XX% closing which sites home development XXX we by of real and XX-XX estate million July joint additional our cash or equivalents of hand venture, on is of cash

the to XXXX, Harvest a long-term October strategic enhance and developed a Now business. sheet ongoing near from shareholder strategic asset-lighter flow Today, be value. an stronger in strategic Limoneira. a we on towards having our of we the to at model cash net business In projections our quick recently debt map position, through financial decision position road provide rightsized shift evaluate overall and for to reduced consider update balance stronger to ourselves and alternatives intended our

other of our of strategic and exploring XXXX, and alternatives parties to we our in that updates value further committed necessary remain Since at with interest if December stockholder Board diligently We all working Directors is options opportunities. received disclosure advisable. have or potential the provide to with Inc. find are will of significant Stephens advisers announcing exploration to maximize engage thoroughly these to evaluate

value the of opportunities owned manage the long-term to XX,XXX-acre acres with tremendous growth pumping X.X after our XX,XXX sales and rights, nonstrategic representing Even assets. water, past approximately we feet years, recent over approximately asset land in continue of usage

a third improvement asset-lighter an is transition to during and positive our enhance business operating having by our focus to quarter, see of effect. our model use the can best You shareholder in on the income our value assets

expense, removed have year our District, water fallowing volume Yuma dramatically for Drainage program we our and fiscal decreased a with We guidance obligation, are are the avocado through monetizing and significantly Mesa pension Irrigation XXXX. interest raising

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

Mark Palamountain

Thank you, and everyone. afternoon, Harold, good

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

during last year. last million revenue of operations $XX.X million XX% total XXXX, in was $XX.X third sold fiscal price compared per net of year. Agribusiness fiscal sold U.S. year third in quarter lemons at the year compared fiscal during sales the average the $X.X of million to lemon the packed revenue carton million $XX.X XXXX the of of the revenue includes for For compared third was packed cartons compared cartons in $XX.X during an Approximately compared year. quarter year fiscal increased $XX.X third quarter year fiscal million of were fresh fresh million same X,XXX,XXX total revenue price of third third $XX.XX the per the to XXXX $XX.X the Agribusiness net year fiscal X,XXX,XXX to million to revenue quarter to a third in million Other $X.X carton quarter at quarter year fiscal of XXXX. quarter average $XX.XX quarter the XXXX. third in period to XXXX previous of

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

to We remaining our also of expect have soft to quarter. fourth pounds harvest approximately X avocados in to X million million seasonally

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

our opportunistically retail a orange buy-sell As to arrangements for company and with customers foodservice our complement reminder, has the lemon orders sales.

was crop fiscal XXXX. in $XXX,XXX the quarter other fiscal quarter in citrus Specialty of and third $X.X XXXX to third year compared year the million revenue of

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

on to decisions of million were $X.X third the management period of farm was of revenues decrease weather The fiscal quarter the same quarter fiscal year crop farm on year and Farm year compared to XXXX fiscal in due XXXX conditions. revenues acreage. in similar management XXXX in $X.X primarily million management based the in third

on based managed, acres unchanged. total which is remains Our profitability

Total impairment expenses year. quarter cost of third cost and compared an of and in expenses $XXX,XXX $XX third of quarter the quarter intangible million to million fiscal year noncash This year's asset. third $XX.X were the for a XXXX included total last

total Excluding impairment, decreased the expenses noncash cost year-over-year. and

third was the income to to income quarter net to loss stock preferred of fiscal year. in of compared year year third of XXXX. quarter common after the of Operating in operating applicable dividends the the $X.X year quarter third fiscal to million $X.X million a XXXX $X.X fiscal loss applicable of stock million XXXX third for quarter Net of million fiscal an for the previous $X compared was common

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

The million $X.X or loss EBITDA for Adjusted attributable net is volume the period XXXX. the diluted compared same was highlights to of increased for attributable XXXX net lemons and earnings to of reconciliation Limoneira of in end fresh income loss for fiscal Limoneira loss provided to our is quarter earnings to release. the third EPS strong reconciliation $XX.X the also release. pricing Company fiscal year adjusted million A or year at to A adjusted EBITDA and million $XX income the or our income Company end of net of the of performance. at provided improvement avocado

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

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

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

Harold Edwards

Thanks, Mark.

XX second million guidance million to compared the volumes previous XXXX We expect to are We million raising in year. to our XX% for fiscal guidance now be avocado pounds, prior than the X of time to XX.X of range compared increase million GBP this guidance. a GBP for avocado to year XX.X more

record quarter Keep mind, to to with we X environment. harvest the and in pounds avocado to fourth ability avocado match remaining. pricing a a expect fourth quarter complete volume the million X approximately our We timing to our to hold to in the million expect in represent due fruit higher

fresh guidance volumes expect is be due cartons the of million X X.X from to of rains. X.X utilization now lemon to fresh for to previous compared complete. million to fiscal cartons XXXX for harvest fiscal to million X We year range The lemon in year late season lower XX% XXXX approximately million

expect future over and of X Community spread next Limoneira Lewis fiscal Community Builders proceeds from East $XXX out the We receive Harvest, total to Limoneira X, continue to X Area Builders, years. million Lewis

X,XXX by to over EBITDA capitalize robust on outlook, strong by Looking expand next to the we trends. years three ahead, production a to consumer acres continue underpinned avocado see plans demand

do the avocado take pricing During slightly alternate at be be year earnings to into trees, year due XXXX of additional lower to company account compared expects the nature the lower operational circumstances. due and from results year not Limoneira. pricing believes fiscal to fiscal this the volume avocado avocado compared to Harvest bearing environment transition, XXXX current to international These expected may company

Operator, the now open to questions. we'll call

Operator

Klieve first our of with from line Ben And Street Instructions] Markets. question Capital [Operator the comes Lake

Benjamin Klieve

current start a to like related I'd avocado with to couple the expectations.

to evolved a is, here major volume surprising. the months this can X in That such a question you about the talk that first last led number just just what So increase? was year, expected increase staggering with over

So I'd there. have appreciate thoughts any you

Harold Edwards

driving are Ben. factors X this, So

second The first made. to was And third much which into decision year-over-year, always one quarter is happened decision quarter. crop being a the that the the things But X harvest also, larger team's helpful. from delay when

to the bigger. continue The crop to by to delaying get the ability that first and harvest, gives that was the size grow

a factor closed -- Mexico it U.S. can the happens, fruit as increase the we peak impacted the the so producer, that paid XX then the were And pounds situation that as during border total for get because was positive harvested volume other where the by the season, and to materially And that Mexican actually our for to significantly Mexican because pound, the delay. drove during a due days was of season.

perspective, our put to was the we that the tailwinds anticipate Just underserved with which California we because strong -- behind higher. harvest year was the time, forward-looking of comments don't we the it dealt significantly happened next drove pricing harvest. of beginning year, began, That right market why for be period made -- from as prices a year and for this that pricing really the at when the environment a tremendous as a we this experienced into it is market

demand that I don't do expect avocado. next can for know demand we year, we strong that consumer anticipate but strong and

the will this as maybe pricing as that good, So we believe environment good just year. not be

Benjamin Klieve

guess year next I I from -- I'm to volume appreciate next taking year? you bearing nature I I be perspective? change very a your this if kind to significant guess follow-up of but the -- down alternate if of think for pricing. biannual how the clear question in on you increase think what, I'm lessons do does the similar are this the even any, And from crop, about year year? kind year Well, my managing last outlook mean, Or is curious Yes. this you will crop volume of then

Harold Edwards

don't I see significant any we'll think downward Ben, No, pressure.

some weight the that's that few different last anywhere this from down year, typical your or to I over you, done we've up tell the XX% received work in poundage part the year been crops. years year additional team. XX% will by think is I of is

avocados in and from renewed We've marketing farming started historically every as a which years, good focusing really avocado group so companies more myself. to Avocado this started called internally sales has evolved on We that our performed has the had to better Congress, constituent focus. we

met an we've for pounds that an year in XX,XXX really our a while. X prior from we're planted year years, we been historically and the this anywhere fertilization to acre we existing expecting In so a were good crop programs, tree And on aggressive pruning, on XX,XXX trees weekly. and changed have

as some the acre confidence so going our And see have trees, finished dense. us with we growth, see which tree per completely these different we going And get gives when rootstocks, to which in forward, forward poundage X spacing, we're the really in going you new plantings EBITDA robust years. have to new more be next will opportunity

Benjamin Klieve

to I'm Well One flow face thinking flow the Congress cash today good. Mark, kind in healthy Harvest Avocado there. the debt. that operating around Very position and more outlook good the you, how about over really it. for a Got work you interest keep you're at debt rates the fixed up cash tell of of curious declining here. have the plus Limoneira

debt you debt hand? you to over the just instruments Are of whenever to is considering have or like that here more cash excess facility eliminate months, XX that do to position allow Or various due? expect XX next, the course you on

Mark Palamountain

it's July So physically goes actually XXXX. variable year. due X on for X, It

line that us we'll do is to interest cash know the Lewis we have there. and probably million have balance are of to because credit. sheet. why have that $XX of Keep on we some And distribution, think we coming only the equivalents million So down, in we $XX distributed as we million that mind going once or we flexibility a rates the reason $XX for start remove

see lines forward, I potential out opportunity. more that extracting can up, loosen of credit the those for As going

a year to have figure rates very position now, will So forward. the and we'll we'll net with pleased where say next just strength I right balance But out this looking year, of we're will our see. have are. sheet and than lower have that just we to debt

Operator

Our B. from Sharma of next question comes Raj Riley. the with line

Rajiv Sharma

really you about a How -- talk but much little to -- this bit good I'd A talk I of could does is understand management how to out? Citrus about quarter, the on like proceed congratulations you just farm the pan strategic can't World forward? and your to trying if going know efforts One review,

could forward in terms that the is Harvest in be table that possible potential that parts JV move does would company? talk whole? If with the outcome -- Is How any everything the please, on you or about in the great. of some color, with

Harold Edwards

Raj. Sure,

extensively it, color we'll kind add but So to to not playing we've speak you how to tell about coached how our and try of it's at been out it. we're looking some just perspective, from

think the fair evaluating is the perspective. I from is of taking all Directors a statement not the and value anything opportunities off Board So table

company, consideration of enterprise owner, consideration of there's also in a PropCo company homebuilders more the avocados, with operating interest from perspective. the than a strategic property across there's there's OpCo, strategic -- way of there's there's there's an X across interest and lack strategic a developers. and interest so citrus, And better explain entirety, so the its it, to for ongoing a land And strategic from water interest

all will think to it that understand in you the Mark are I direction thinking the I fun early about received, a trying the So, having alternatives take. the with that on that really and process interest but of it's been we've very of it lot pleased we've I'll and tell all. strategic amount still

being if is to additional to Board introduced of forward but is in as prepared exploration that. are commentary, diligent we've deliberation. at ready the got provide everything considering Board least look And or we them, as and very quarter doing I to and being remarks said color the of another when know is our we I period think that's time, And another they

Rajiv Sharma

a out So timeline, of out, be or think I get quarter wanted wrapped sense a would the X quarters up? gets do you to that it

Harold Edwards

extremely quickly and It's is our but to be We're advisers. and from there, our it. deliberate and done, very banking say love experiencing about too We'd legal too. to thoughtful and the advisers early intentionally support it excellent service happen Board being to

do I it's to looking a So say, it, term. I but don't will to to say relatively the because happen near hesitant want it frame on I'd favorable miss whatever I'm that in set time that

Rajiv Sharma

And I decline on on management farm then you about and just just And last comment next the of of the to farm lower on you talk profitability. Can few a the a the know revenues. expect the It quarters the made than reasons management? what terms that was and works of profitability revenues year. it on follow-on works? kind the how acreage, in not question

Harold Edwards

You bet.

this this cetera, lower and past decisions prior pesticides, pruning were season et was pressures, there quarter, like [indiscernible] So that than inputs periods. in made or

and And so per we as a so basically it's our cost-plus profitability a -- you mentioned, -- on then based fee acre is scenario.

about machinery make there's stuff. and we then $XXX per different add-on So and acre, some for

So that's get about those the to profit. we've that you past about we if to $X in of talked million get where acres, X,XXX operating

as of really, of new the around lots now. profitability think about There's in to we're still So right that industry general the clients. forward, for look citrus to in flux continuing going business going

so grow look year And fiscal that we'll 'XX. in to

Operator

we And remarks. Harold I turn at questions there have time. back are CEO, floor Instructions] no closing like further to would [Operator this the for Edwards, to --

Harold Edwards

your Have day. interest Limoneira. Thank you everybody, your very a for much, and great questions all in

Operator

your at today's lines for may disconnect participation. This and your you this Thank time. conference you concludes

Limoneira (LMNR) 9 Sep 242024 Q3 Earnings call transcript