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Limoneira Company Announces First Quarter Fiscal Year 2024 Financial Results

Net Revenues Grew 5% to $39.7 Million in First Quarter of Fiscal Year 2024 Compared to Prior Year

Strategic Shift Toward Higher Margin “Asset-Lighter” Business Model Reflected in First Quarter of Fiscal Year 2024 Results; Agribusiness Operating Loss Improved 84% and Agribusiness Costs and Expenses Decreased 5% in First Quarter of Fiscal Year 2024 Compared to Prior Year

Brokered Lemons and Other Lemon Sales Increased to $2.9 Million and Company Achieved $2.0 Million in Farm Management Revenue in First Quarter of Fiscal Year 2024

Company Reiterates Lemon and Avocado Volume Guidance for Fiscal Year 2024

Company Continues Exploration of Strategic Alternatives Intended to Maximize Stockholder Value

Limoneira Company (the “Company” or “Limoneira”) (Nasdaq: LMNR), a diversified citrus growing, packing, selling and marketing company with related agribusiness activities and real estate development operations, today reported financial results for the first quarter ended January 31, 2024.

Management Comments

Harold Edwards, President and Chief Executive Officer of the Company, stated, “We are very encouraged to see the Company’s strategic shift towards an “asset-lighter” business model reflected in our results, with agribusiness expenses decreasing by 5%, agribusiness operating loss improving by 84% and our adjusted EBITDA improving by 39% in the first quarter of fiscal year 2024 compared to the prior year period. Going forward we expect continued improvement as the asset-lighter model starts to have a meaningful impact on our operating results. As part of the Company’s exploration of strategic alternatives to maximize value, we have decided it is in the best interest of our stockholders to temporarily pause the sale of the two remaining non-strategic assets, as well as move away from pursuing a packinghouse in Chile and instead add value by focusing on expanding our avocado production over the next three years.”

Mr. Edwards continued, “Results for the first quarter were impacted by increased rainfall in California that delayed the picking of lemons from the first quarter to the second quarter; however, we do not expect the rainfall to have any other impact on the overall harvest or the quality of the fruit. Additionally, avocado harvests will begin in the second quarter and run into the third quarter due to the seasonality of California avocados and lack of import pressure from Mexico and Peru in the U.S. market during that period.”

Fiscal Year 2024 First Quarter Results

For the first quarter of fiscal year 2024, total net revenue increased 5% to $39.7 million, compared to total net revenue of $37.9 million in the first quarter of the previous fiscal year. Agribusiness revenue was $38.3 million, compared to $36.5 million in the first quarter of last fiscal year. Other operations revenue was $1.4 million in both the first quarters of fiscal years 2024 and 2023.

Agribusiness revenue in the first quarter of fiscal year 2024 includes $23.9 million in fresh lemon sales, compared to $24.7 million of fresh lemon sales during the same period of fiscal year 2023. Approximately 1,137,000 cartons of U.S. packed fresh lemons were sold in aggregate during the first quarter of fiscal year 2024 at a $21.06 average price per carton, compared to approximately 1,308,000 cartons sold at a $18.88 average price per carton during the first quarter of fiscal year 2023. Brokered lemons and other lemon sales were $2.9 million and $1.4 million, in the first quarter of fiscal years 2024 and 2023, respectively.

The Company recognized no avocado revenue in the first quarters of fiscal years 2024 and 2023 due to the timing of harvest.

The Company recognized $1.1 million of orange revenue in the first quarter of fiscal year 2024, compared to $1.2 million in the same period of fiscal year 2023. Approximately 80,000 cartons of oranges were sold during the first quarter of fiscal year 2024 at a $14.26 average price per carton, compared to approximately 64,000 cartons sold at a $18.00 average price per carton during the first quarter of fiscal year 2023. Specialty citrus and other crops revenue was $1.1 million for the first quarter of fiscal year 2024, compared to $1.2 million in the same period of fiscal year 2023.

Farm management revenues were $2.0 million in the first quarter of fiscal year 2024, primarily due to the Northern Properties farming, management and operations services. There were no farm management revenues in the first quarter of fiscal year 2023.

Total costs and expenses in the first quarter of fiscal year 2024 were $47.5 million, compared to $12.0 million in the first quarter of last fiscal year. The increase of $35.5 million was primarily related to the gain on the sale of the Northern Properties in the first quarter of fiscal year 2023, partially offset by decreases in agribusiness costs and expenses and selling, general and administrative expenses.

Operating loss for the first quarter of fiscal year 2024 was $7.7 million, compared to operating income of $25.9 million in the first quarter of the previous fiscal year, which was primarily related to the gain on the sale of the Northern Properties in the first quarter of fiscal year 2023.

Net loss applicable to common stock, after preferred dividends, for the first quarter of fiscal year 2024 was $3.7 million, compared to net income applicable to common stock of $15.5 million in the first quarter of fiscal year 2023. Net loss per diluted share for the first quarter of fiscal year 2024 was $0.21, compared to net income per diluted share of $0.84 for the same period of fiscal year 2023.

Adjusted net loss for diluted EPS in the first quarter of fiscal year 2024 was $3.2 million or $0.18 per diluted share, compared to the first quarter of fiscal year 2023 of $9.3 million or $0.53 per diluted share. A reconciliation of net (loss) income attributable to Limoneira Company to adjusted net loss for diluted EPS is provided at the end of this release.

Non-GAAP adjusted EBITDA was a loss of $4.8 million in the first quarter of fiscal year 2024, compared to a loss of $7.9 million in the same period of fiscal year 2023. A reconciliation of net (loss) income attributable to Limoneira Company to non-GAAP adjusted EBITDA is provided at the end of this release.

Balance Sheet and Liquidity

During the first quarter of fiscal year 2024, net cash used in operating activities was $10.3 million, compared to $21.2 million in the same period of the prior fiscal year. For the first quarter of fiscal year 2024, net cash used in investing activities was $1.6 million, compared to net cash provided by investing activities of $99.1 million in the first quarter of the prior fiscal year. Net cash provided by financing activities was $8.8 million for the first quarter of fiscal year 2024, compared to net cash used in financing activities of $66.3 million in the same period of the prior fiscal year.

On January 31, 2023, the Company sold its Northern Properties, which resulted in total net proceeds of $98.4 million. The proceeds were used to pay down all of the Company’s domestic debt except the AgWest Farm Credit $40.0 million non-revolving line of credit with an interest rate that is fixed at 3.57% through July 1, 2025. Long-term debt as of January 31, 2024, was $51.4 million, compared to $40.6 million at the end of fiscal year 2023. Debt levels as of January 31, 2024, less $0.5 million of cash on hand, resulted in a net debt position of $51.6 million at quarter end.

Real Estate Development and Property Sales

The Company’s joint venture with The Lewis Group of Companies (“Lewis”) for the residential development of its East Area I real estate development project, named Harvest at Limoneira, is currently expected to have approximately 1,500 total residential units built and sold over the life of the project. In October 2023, the joint venture closed on lot sales representing 121 residential units, thus completing the sell-out of Phase 1 of the development. A total of 707 residential units have closed from the project’s inception to October 31, 2023. The company is also currently in negotiations for the entire Phase 2 of the development and is working on expanding the total number of residential units for the project from 1,500 to 2,050 units.

Guidance

The Company expects fresh lemon volumes to be in the range of 5.0 million to 5.5 million cartons for fiscal year 2024. Avocado volumes are expected to be in the range of 7.0 million to 8.0 million pounds for fiscal year 2024.

The Company expects to receive total proceeds of $131 million from Harvest at Limoneira, LLCB II and East Area II spread out over nine fiscal years, with approximately $8 million received in fiscal year 2022.

Updated Harvest at Limoneira Cash Flow Projections (in millions)

Fiscal Year

 

2022 Actual

 

2024

 

2025

 

2026

 

2027

 

2028

 

2029

 

2030

Projected Distributions

 

$8

 

$3

 

$8

 

$20

 

$30

 

$32

 

$15

 

$15

 

The Company has 700 acres of non-bearing lemons and avocados estimated to become full bearing over the next four to five years, which the Company expects will enable strong organic growth in the coming years. Additionally, the Company plans to expand its plantings of avocados over the next three years and also expects to have an increase in third-party grower fruit. The foregoing describes organic growth opportunities and does not include potential acquisition opportunities for the Company in its highly fragmented industry.

Conference Call Information

The Company will host a conference call to discuss its financial results on March 7, 2024, at 1:30 pm Pacific Time (4:30 pm Eastern Time). Investors interested in participating in the live call can dial (877) 407-0789 from the U.S. International callers can dial (201) 689-8562. A telephone replay will be available approximately two hours after the call concludes and will be available through March 21, 2024, by dialing (844) 512-2921 from the U.S., or (412) 317-6671 from international locations; passcode is 13744733.

About Limoneira Company

Limoneira Company, a 130-year-old international agribusiness headquartered in Santa Paula, California, has grown to become one of the premier integrated agribusinesses in the world. Limoneira (lē moñ âra) is a dedicated sustainability company with 11,000 acres of rich agricultural lands, real estate properties and water rights in California, Arizona, Chile and Argentina. The Company is a leading producer of lemons, avocados and other crops that are enjoyed throughout the world. For more about Limoneira Company, visit www.limoneira.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are based on Limoneira’s current expectations about future events and can be identified by terms such as “expect,” “may,” “anticipate,” “intend,” “should be,” “will be,” “is likely to,” “strive to,” and similar expressions referring to future periods.

Limoneira believes the expectations reflected in the forward-looking statements are reasonable but cannot guarantee future results, level of activity, performance or achievements. Actual results may differ materially from those expressed or implied in the forward-looking statements. Therefore, Limoneira cautions you against relying on any of these forward-looking statements. Factors that may cause future outcomes to differ materially from those foreseen in forward-looking statements include, but are not limited to: success in executing the Company’s business plans and strategies, including the review and evaluation of strategic transactions; the process by which the Company engages in its evaluation of strategic transactions; the outcome of potential future strategic transactions and the terms thereof; the possibility that the evaluation of potential strategic transactions will not realize any additional value to our stockholders, and managing the risks involved in the foregoing; additional impacts from the current COVID-19 pandemic, changes in laws, regulations, rules, quotas, tariffs and import laws; weather conditions that affect production, transportation, storage, import and export of fresh product; increased pressure from crop disease, insects and other pests; disruption of water supplies or changes in water allocations; disruption in the global supply chain; pricing and supply of raw materials and products; market responses to industry volume pressures; pricing and supply of energy; changes in interest and currency exchange rates; availability of financing for land development activities; political changes and economic crises; international conflict; acts of terrorism; labor disruptions, strikes or work stoppages; loss of important intellectual property rights; inability to pay debt obligations; inability to engage in certain transactions due to restrictive covenants in debt instruments; government restrictions on land use; and market and pricing risks due to concentrated ownership of stock. Other risks and uncertainties include those that are described in Limoneira’s SEC filings that are available on the SEC’s website at http://www.sec.gov. Limoneira undertakes no obligation to subsequently update or revise the forward-looking statements made in this press release, except as required by law.

 

LIMONEIRA COMPANY

 

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in thousands, except share and per share data)

 

 

January 31,

2024

 

October 31,

2023

Assets

 

 

 

Current assets:

 

 

 

Cash

$

527

 

 

$

3,631

 

Accounts receivable, net

 

16,663

 

 

 

14,458

 

Cultural costs

 

2,584

 

 

 

2,334

 

Prepaid expenses and other current assets

 

5,492

 

 

 

5,588

 

Receivables/other from related parties

 

3,333

 

 

 

4,214

 

Total current assets

 

28,599

 

 

 

30,225

 

Property, plant and equipment, net

 

160,197

 

 

 

160,631

 

Real estate development

 

9,980

 

 

 

9,987

 

Equity in investments

 

79,057

 

 

 

78,816

 

Goodwill

 

1,508

 

 

 

1,512

 

Intangible assets, net

 

6,419

 

 

 

6,657

 

Other assets

 

13,816

 

 

 

13,382

 

Total assets

$

299,576

 

 

$

301,210

 

 

 

 

 

Liabilities, Convertible Preferred Stock and Stockholders' Equity

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

8,765

 

 

$

9,892

 

Growers and suppliers payable

 

8,297

 

 

 

9,629

 

Accrued liabilities

 

8,084

 

 

 

8,651

 

Payables to related parties

 

5,139

 

 

 

4,805

 

Current portion of long-term debt

 

668

 

 

 

381

 

Total current liabilities

 

30,953

 

 

 

33,358

 

Long-term liabilities:

 

 

 

Long-term debt, less current portion

 

51,413

 

 

 

40,628

 

Deferred income taxes

 

17,988

 

 

 

22,172

 

Other long-term liabilities

 

4,224

 

 

 

4,555

 

Total liabilities

 

104,578

 

 

 

100,713

 

Commitments and contingencies

 

 

 

 

 

Series B Convertible Preferred Stock – $100.00 par value (50,000 shares authorized: 14,790 shares issued and outstanding at January 31, 2024 and October 31, 2023) (8.75% coupon rate)

 

1,479

 

 

 

1,479

 

Series B-2 Convertible Preferred Stock – $100.00 par value (10,000 shares authorized: 9,300 shares issued and outstanding at January 31, 2024 and October 31, 2023) (4% dividend rate on liquidation value of $1,000 per share)

 

9,331

 

 

 

9,331

 

Stockholders' equity:

 

 

 

Series A Junior Participating Preferred Stock – $0.01 par value (20,000 shares authorized: zero issued or outstanding at January 31, 2024 and October 31, 2023)

 

 

 

 

 

Common Stock – $0.01 par value (39,000,000 shares authorized: 18,255,895 and 18,192,009 shares issued and 18,004,918 and 17,941,032 shares outstanding at January 31, 2024 and October 31, 2023, respectively)

 

180

 

 

 

179

 

Additional paid-in capital

 

168,620

 

 

 

168,441

 

Retained earnings

 

13,957

 

 

 

19,017

 

Accumulated other comprehensive loss

 

(6,133

)

 

 

(5,666

)

Treasury stock, at cost, 250,977 shares at January 31, 2024 and October 31, 2023

 

(3,493

)

 

 

(3,493

)

Noncontrolling interest

 

11,057

 

 

 

11,209

 

Total stockholders' equity

 

184,188

 

 

 

189,687

 

Total liabilities, convertible preferred stock and stockholders' equity

$

299,576

 

 

$

301,210

 

 

LIMONEIRA COMPANY

 

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(in thousands, except per share data)

 

 

Three Months Ended

January 31,

 

 

2024

 

 

 

2023

 

Net revenues:

 

 

 

Agribusiness

$

38,339

 

 

$

36,528

 

Other operations

 

1,392

 

 

 

1,373

 

Total net revenues

 

39,731

 

 

 

37,901

 

Costs and expenses:

 

 

 

Agribusiness

 

39,114

 

 

 

41,241

 

Other operations

 

1,182

 

 

 

1,238

 

Gain on disposal of assets, net

 

(165

)

 

 

(39,742

)

Selling, general and administrative

 

7,345

 

 

 

9,280

 

Total costs and expenses

 

47,476

 

 

 

12,017

 

Operating (loss) income

 

(7,745

)

 

 

25,884

 

Other (expense) income:

 

 

 

Interest income

 

22

 

 

 

8

 

Interest expense, net of patronage dividends

 

(207

)

 

 

(1,172

)

Equity in earnings of investments, net

 

41

 

 

 

253

 

Other income (expense), net

 

22

 

 

 

(2,612

)

Total other expense

 

(122

)

 

 

(3,523

)

(Loss) income before income tax benefit (provision)

 

(7,867

)

 

 

22,361

 

Income tax benefit (provision)

 

4,190

 

 

 

(6,827

)

Net (loss) income

 

(3,677

)

 

 

15,534

 

Net loss attributable to noncontrolling interest

 

92

 

 

 

97

 

Net (loss) income attributable to Limoneira Company

 

(3,585

)

 

 

15,631

 

Preferred dividends

 

(125

)

 

 

(125

)

Net (loss) income applicable to common stock

$

(3,710

)

 

$

15,506

 

 

 

 

 

Basic net (loss) income per common share

$

(0.21

)

 

$

0.87

 

 

 

 

 

Diluted net (loss) income per common share

$

(0.21

)

 

$

0.84

 

 

 

 

 

Weighted-average common shares outstanding-basic

 

17,627

 

 

 

17,573

 

Weighted-average common shares outstanding-diluted

 

17,627

 

 

 

18,378

 

 

Non-GAAP Financial Measures

Due to significant depreciable assets associated with the nature of the Company's operations and interest costs associated with our capital structure, management believes that earnings before interest, income taxes, depreciation and amortization ("EBITDA") and adjusted EBITDA, which excludes stock-based compensation, pension settlement cost, gain on disposal of assets, net, and cash bonus related to sale of assets are important measures to evaluate our results of operations between periods on a more comparable basis. Such measurements are not prepared in accordance with U.S. generally accepted accounting principles ("GAAP") and should not be construed as an alternative to reported results determined in accordance with GAAP. The non-GAAP information provided is unique to the Company and may not be consistent with methodologies used by other companies.

EBITDA and adjusted EBITDA are summarized and reconciled to net (loss) income attributable to Limoneira Company, which management considers to be the most directly comparable financial measure calculated and presented in accordance with GAAP, as follows (in thousands):

 

Three Months Ended

January 31,

 

 

2024

 

 

 

2023

 

Net (loss) income attributable to Limoneira Company

$

(3,585

)

 

$

15,631

 

Interest income

 

(22

)

 

 

(8

)

Interest expense, net of patronage dividends

 

207

 

 

 

1,172

 

Income tax (benefit) provision

 

(4,190

)

 

 

6,827

 

Depreciation and amortization

 

2,058

 

 

 

2,447

 

EBITDA

 

(5,532

)

 

 

26,069

 

Stock-based compensation

 

864

 

 

 

1,064

 

Pension settlement cost

 

 

 

 

2,741

 

Gain on disposal of assets, net

 

(165

)

 

 

(39,742

)

Cash bonus related to sale of assets

 

 

 

 

2,000

 

Adjusted EBITDA

$

(4,833

)

 

$

(7,868

)

 

The following is a reconciliation of net (loss) income attributable to Limoneira Company to adjusted net loss for diluted EPS (in thousands, except per share data):

 

Three Months Ended

January 31,

 

 

2024

 

 

 

2023

 

Net (loss) income attributable to Limoneira Company

$

(3,585

)

 

$

15,631

 

Effect of preferred stock and unvested, restricted stock

 

(152

)

 

 

(286

)

Stock-based compensation

 

864

 

 

 

1,064

 

Pension settlement cost

 

 

 

 

2,741

 

Gain on disposal of assets, net

 

(165

)

 

 

(39,742

)

Cash bonus related to sale of assets

 

 

 

 

2,000

 

Tax effect of adjustments at federal and state rates

 

(192

)

 

 

9,269

 

Adjusted net loss for diluted EPS

$

(3,230

)

 

$

(9,323

)

 

 

 

 

Diluted net (loss) income per common share

$

(0.21

)

 

$

0.84

 

Adjusted diluted net loss per common share

$

(0.18

)

 

$

(0.53

)

 

 

 

 

Weighted-average common shares outstanding - diluted

 

17,627

 

 

 

18,378

 

Effect of preferred stock

 

 

 

 

(805

)

Adjusted weighted-average common shares outstanding - diluted

 

17,627

 

 

 

17,573

 

 

Supplemental Information

(in thousands, except acres and average price amounts):

 

Agribusiness Segment Information for the Three Months Ended January 31, 2024

 

Fresh

Lemons

Lemon

Packing

Eliminations

 

Avocados

Other

Agribusiness

Total

Agribusiness

Revenues from external customers

$

27,384

 

$

5,592

$

 

$

$

5,363

$

38,339

 

Intersegment revenue

 

 

 

6,716

 

(6,716

)

 

 

 

 

Total net revenues

 

27,384

 

 

12,308

 

(6,716

)

 

 

5,363

 

38,339

 

Costs and expenses

 

28,841

 

 

10,718

 

(6,716

)

 

 

4,527

 

37,370

 

Depreciation and amortization

 

 

 

 

 

 

 

 

1,744

 

Operating income (loss)

$

(1,457

)

$

1,590

$

 

$

$

836

$

(775

)

 

 

Agribusiness Segment Information for the Three Months Ended January 31, 2023

 

Fresh

Lemons

Lemon

Packing

Eliminations

 

Avocados

Other

Agribusiness

Total

Agribusiness

Revenues from external customers

$

27,321

 

$

5,648

$

 

$

$

3,559

$

36,528

 

Intersegment revenue

 

 

 

7,363

 

(7,363

)

 

 

 

 

Total net revenues

 

27,321

 

 

13,011

 

(7,363

)

 

 

3,559

 

36,528

 

Costs and expenses

 

32,314

 

 

11,353

 

(7,363

)

 

 

2,802

 

39,106

 

Depreciation and amortization

 

 

 

 

 

 

 

 

2,135

 

Operating income (loss)

$

(4,993

)

$

1,658

$

 

$

$

757

$

(4,713

)

 

Lemons

Q1 2024

Q1 2023

 

Lemon Packing

Q1 2024

Q1 2023

United States:

 

 

 

Cartons packed and sold

 

1,137

 

1,308

Acres harvested

 

1,900

 

3,600

 

Revenue

$

12,308

$

13,011

Limoneira cartons sold

 

185

 

443

 

Direct costs

 

10,718

 

11,353

Third-party grower cartons sold

 

952

 

865

 

Operating income

$

1,590

$

1,658

Average price per carton

$

21.06

$

18.88

 

 

 

 

 

 

 

 

Avocados

Q1 2024

Q1 2023

Chile:

 

 

 

Pounds sold

 

 

Lemon revenue

$

1,000

$

200

 

Average price per pound

$

$

40-pound carton equivalents

 

162

 

184

 

 

 

 

 

 

 

 

Other Agribusiness

Q1 2024

Q1 2023

Other:

 

 

 

Orange cartons sold

 

80

 

64

Lemon shipping and handling

$

5,600

$

5,600

 

Average price per carton

$

14.26

$

18.00

Lemon by-product sales

$

500

$

1,200

 

Specialty citrus cartons sold

 

17

 

54

Brokered lemons and other lemon sales

$

1,900

$

2,300

 

Average price per carton

$

28.88

$

23.09

 

 

 

 

Farm management

$

2,048

$

Agribusiness costs and expenses

Q1 2024

Q1 2023

 

 

 

 

Packing costs

$

10,718

$

11,353

 

 

 

 

Harvest costs

 

1,933

 

4,078

 

 

 

 

Growing costs

 

6,192

 

7,671

 

 

 

 

Third-party grower and supplier costs

 

17,723

 

15,018

 

 

 

 

Other costs

 

804

 

986

 

 

 

 

Depreciation and amortization

 

1,744

 

2,135

 

 

 

 

Agribusiness costs and expenses

$

39,114

$

41,241

 

 

 

 

 

Contacts

Investors

John Mills

Managing Partner

ICR 646-277-1254

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