Limoneira Company Announces Fiscal Second Quarter 2022 Financial Results
Limoneira Company (LMNR) reported a 4% revenue growth for Q2 FY 2022, totaling $46.8 million, driven by strong avocado and orange sales. Avocado pricing surged over 50% year-over-year. However, the company faced rising costs in labor and packing. Net income for Q2 was $1.4 million, down from $1.8 million in the previous year, with losses increasing in the first half. The company plans to expand its One World of Citrus initiative and monetize assets to improve cash flow. A fallowing program in Yuma is projected to save 1.3 billion gallons of water, boosting operating results by $1 million.
- 4% revenue growth in Q2 FY 2022 totaling $46.8 million.
- Strong avocado pricing up over 50% year-over-year.
- Projected operating results increase of $1 million from water-saving initiatives.
- Net income decreased to $1.4 million in Q2 FY 2022 from $1.8 million in Q2 FY 2021.
- Operating loss for the first six months increased to $7.0 million compared to $3.3 million the previous year.
- Long-term debt rose to $135.6 million.
Strategic Decision to
Strong Avocado Profitability for First Six Months of Fiscal 2022; Expect Higher Pricing to Continue Driving Avocado Profitability for Third Quarter of FY 2022
Announced Fallowing Program in
Management Comments
"A recent example of our efforts to streamline our operations and become a more efficient organization is the recently announced fallowing program with the Yuma Mesa
Fiscal Year 2022 Second Quarter Results
For the second quarter of fiscal year 2022, total net revenue was
Agribusiness revenue for the second quarter of fiscal year 2022 includes
The Company recognized
The Company recognized
Total costs and expenses for the second quarter of fiscal year 2022 were
Operating income for the second quarter of fiscal year 2022 increased to
Net income attributable to common stock for the second quarter of fiscal year 2022 was
Adjusted net income for the second quarter of fiscal year 2022 was
Adjusted EBITDA was
Fiscal Year 2022 First Six Months Results
For the six months ended
For the first six months of fiscal year 2022, adjusted net loss attributable to common stock was
Balance Sheet and Liquidity
During the first half of fiscal year 2022, net cash used in operating activities was
Long-term debt as of
Real Estate Development and Property Sales
The Company’s joint venture with
In
In
In the first quarter of fiscal year 2020, the Company entered into an agreement to sell its
COVID-19
The COVID-19 pandemic has had an adverse impact on the industries and markets in which the Company conducts business. In particular,
The decline in demand for Limoneira’s products beginning the second quarter of fiscal year 2020, which the Company believes was due to the COVID-19 pandemic, negatively impacted sales and profitability for the last three quarters of fiscal year 2020, all of fiscal year 2021, and the first six months of fiscal year 2022. While the duration of these trends and the magnitude of such impacts cannot be precisely estimated at this time, as they are influenced by a number of factors outside management’s control, the Company expects improvement in fiscal year 2022 compared to fiscal year 2021.
Guidance
The COVID-19 pandemic continues to affect the Company’s food service business and industry logistics on a global basis. The Company expects it will experience improving results in fiscal year 2022 compared to fiscal year 2021 due to its stronger position in retail food and club grocery and growing brokered fruit revenues. The resurgence of COVID-19 during the first half of this year pressured lemon prices. As food service and export markets recover, the Company expects lemon prices to increase in the second half of fiscal year 2022 compared to the prior year period.
The Company continues to expect fresh lemon volumes to be in the range of 4.5 million to 5.0 million cartons for fiscal year 2022. The Company expects avocado volumes to be in the range of 6.0 million to 7.0 million pounds for fiscal year 2022 and strong profitability for the third quarter of fiscal year 2022.
The Company expects cash distributions to be
Harvest at Limoneira Cash Flow Projections
Fiscal Year |
|
2022 |
|
2023 |
|
2024 |
|
2025 |
|
2026 |
Projected Distributions |
|
|
|
|
|
|
|
|
|
|
The Company has an additional 1,000 acres of non-bearing lemons estimated to become full bearing over the next four years, which will enable the Company to achieve strong organic growth for many years to come. The Company expects 200 of the 1,000 acres to become full bearing in fiscal year 2022. The Company anticipates this additional acreage will increase its domestic supply of
Conference Call Information
The Company will host a conference call to discuss its financial results today at
About
Forward-Looking Statements
This press release contains forward-looking statements, including guidance for fiscal years 2022 and beyond, 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.
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|||||||
CONSOLIDATED BALANCE SHEETS (UNAUDITED) |
|||||||
($ in thousands, except share amounts) |
|||||||
|
|
|
|
||||
Assets |
|
|
|
||||
Current assets: |
|
|
|
||||
Cash |
$ |
960 |
|
|
$ |
439 |
|
Accounts receivable, net |
|
22,139 |
|
|
|
17,483 |
|
Cultural costs |
|
2,858 |
|
|
|
7,500 |
|
Prepaid expenses and other current assets |
|
10,648 |
|
|
|
10,709 |
|
Receivables/other from related parties |
|
5,347 |
|
|
|
5,958 |
|
Total current assets |
|
41,952 |
|
|
|
42,089 |
|
|
|
|
|
||||
Property, plant and equipment, net |
|
239,594 |
|
|
|
242,420 |
|
Real estate development |
|
23,049 |
|
|
|
22,828 |
|
Equity in investments |
|
64,290 |
|
|
|
64,072 |
|
|
|
1,520 |
|
|
|
1,527 |
|
Intangible assets, net |
|
7,873 |
|
|
|
8,329 |
|
Other assets |
|
12,466 |
|
|
|
11,011 |
|
Total assets |
$ |
390,744 |
|
|
$ |
392,276 |
|
|
|
|
|
||||
Liabilities and Stockholders' Equity |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Accounts payable |
$ |
9,800 |
|
|
$ |
8,963 |
|
Growers and suppliers payable |
|
9,495 |
|
|
|
10,371 |
|
Accrued liabilities |
|
6,802 |
|
|
|
6,542 |
|
Payables to related parties |
|
8,035 |
|
|
|
6,976 |
|
Current portion of long-term debt |
|
3,678 |
|
|
|
2,472 |
|
Total current liabilities |
|
37,810 |
|
|
|
35,324 |
|
Long-term liabilities: |
|
|
|
||||
Long-term debt, less current portion |
|
135,575 |
|
|
|
130,353 |
|
Deferred income taxes |
|
20,975 |
|
|
|
22,853 |
|
Other long-term liabilities |
|
5,598 |
|
|
|
4,501 |
|
Total liabilities |
|
199,958 |
|
|
|
193,031 |
|
Commitments and contingencies |
|
— |
|
|
|
— |
|
|
|
|
|
||||
Series B Convertible Preferred Stock – |
|
1,479 |
|
|
|
1,479 |
|
Series B-2 Convertible Preferred Stock – |
|
9,331 |
|
|
|
9,331 |
|
|
|
|
|
||||
Stockholders' Equity: |
|
|
|
||||
Series A Junior Participating Preferred Stock – |
|
— |
|
|
|
— |
|
Common Stock – |
|
180 |
|
|
|
179 |
|
Additional paid-in capital |
|
164,253 |
|
|
|
163,965 |
|
Retained earnings |
|
13,691 |
|
|
|
21,552 |
|
Accumulated other comprehensive loss |
|
(6,539 |
) |
|
|
(5,733 |
) |
|
|
(3,493 |
) |
|
|
(3,493 |
) |
Noncontrolling interest |
|
11,884 |
|
|
|
11,965 |
|
Total equity |
|
179,976 |
|
|
|
188,435 |
|
Total liabilities and stockholders' equity |
$ |
390,744 |
|
|
$ |
392,276 |
|
|
|||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) |
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($ in thousands, except share amounts) |
|||||||||||||||
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||
Net revenues: |
|
|
|
|
|
|
|
||||||||
Agribusiness |
$ |
45,369 |
|
|
$ |
43,989 |
|
|
$ |
83,452 |
|
|
$ |
81,126 |
|
Other operations |
|
1,381 |
|
|
|
1,143 |
|
|
|
2,572 |
|
|
|
2,281 |
|
Total net revenues |
|
46,750 |
|
|
|
45,132 |
|
|
|
86,024 |
|
|
|
83,407 |
|
Costs and expenses: |
|
|
|
|
|
|
|
||||||||
Agribusiness |
|
37,599 |
|
|
|
36,442 |
|
|
|
78,843 |
|
|
|
73,380 |
|
Other operations |
|
1,093 |
|
|
|
1,090 |
|
|
|
2,167 |
|
|
|
2,172 |
|
Loss on disposal of assets |
|
346 |
|
|
|
— |
|
|
|
261 |
|
|
|
— |
|
Selling, general and administrative |
|
5,126 |
|
|
|
5,216 |
|
|
|
11,725 |
|
|
|
11,111 |
|
Total costs and expenses |
|
44,164 |
|
|
|
42,748 |
|
|
|
92,996 |
|
|
|
86,663 |
|
Operating income (loss) |
|
2,586 |
|
|
|
2,384 |
|
|
|
(6,972 |
) |
|
|
(3,256 |
) |
Other (expense) income: |
|
|
|
|
|
|
|
||||||||
Interest income |
|
27 |
|
|
|
25 |
|
|
|
48 |
|
|
|
68 |
|
Interest expense, net of patronage dividends |
|
(696 |
) |
|
|
(622 |
) |
|
|
(481 |
) |
|
|
(488 |
) |
Equity in earnings of investments, net |
|
299 |
|
|
|
643 |
|
|
|
350 |
|
|
|
1,009 |
|
Other income, net |
|
78 |
|
|
|
57 |
|
|
|
93 |
|
|
|
51 |
|
Total other (expense) income |
|
(292 |
) |
|
|
103 |
|
|
|
10 |
|
|
|
640 |
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) before income tax (expense) benefit |
|
2,294 |
|
|
|
2,487 |
|
|
|
(6,962 |
) |
|
|
(2,616 |
) |
Income tax (expense) benefit |
|
(722 |
) |
|
|
(974 |
) |
|
|
1,928 |
|
|
|
213 |
|
Net income (loss) |
|
1,572 |
|
|
|
1,513 |
|
|
|
(5,034 |
) |
|
|
(2,403 |
) |
Net (income) loss attributable to noncontrolling interest |
|
(11 |
) |
|
|
420 |
|
|
|
77 |
|
|
|
128 |
|
Net income (loss) attributable to |
|
1,561 |
|
|
|
1,933 |
|
|
|
(4,957 |
) |
|
|
(2,275 |
) |
Preferred dividends |
|
(126 |
) |
|
|
(126 |
) |
|
|
(251 |
) |
|
|
(251 |
) |
Net income (loss) attributable to common stock |
$ |
1,435 |
|
|
$ |
1,807 |
|
|
$ |
(5,208 |
) |
|
$ |
(2,526 |
) |
|
|
|
|
|
|
|
|
||||||||
Basic net income (loss) per common share |
$ |
0.08 |
|
|
$ |
0.10 |
|
|
$ |
(0.30 |
) |
|
$ |
(0.15 |
) |
|
|
|
|
|
|
|
|
||||||||
Diluted net income (loss) per common share |
$ |
0.08 |
|
|
$ |
0.10 |
|
|
$ |
(0.30 |
) |
|
$ |
(0.15 |
) |
|
|
|
|
|
|
|
|
||||||||
Weighted-average common shares outstanding-basic |
|
17,511,000 |
|
|
|
17,461,000 |
|
|
|
17,461,000 |
|
|
|
17,429,000 |
|
Weighted-average common shares outstanding-diluted |
|
17,511,000 |
|
|
|
17,461,000 |
|
|
|
17,461,000 |
|
|
|
17,429,000 |
|
Non-GAAP Financial Measures
Due to significant depreciable assets associated with the nature of our 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 named executive officer severance and loss (gain) on disposal of assets, are important measures to evaluate our results of operations between periods on a more comparable basis. In addition, we have presented adjusted net income (loss) attributable to
EBITDA and adjusted EBITDA are summarized and reconciled to net income (loss) attributable to
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||
Net income (loss) attributable to |
$ |
1,561 |
|
|
$ |
1,933 |
|
|
$ |
(4,957 |
) |
|
$ |
(2,275 |
) |
Interest income |
|
(27 |
) |
|
|
(25 |
) |
|
|
(48 |
) |
|
|
(68 |
) |
Interest expense, net of patronage dividends |
|
696 |
|
|
|
622 |
|
|
|
481 |
|
|
|
488 |
|
Income tax expense (benefit) |
|
722 |
|
|
|
974 |
|
|
|
(1,928 |
) |
|
|
(213 |
) |
Depreciation and amortization |
|
2,483 |
|
|
|
2,552 |
|
|
|
4,963 |
|
|
|
5,053 |
|
EBITDA |
|
5,435 |
|
|
|
6,056 |
|
|
|
(1,489 |
) |
|
|
2,985 |
|
Named executive officer severance |
|
— |
|
|
|
— |
|
|
|
770 |
|
|
|
— |
|
Loss (gain) on disposal of assets |
|
346 |
|
|
|
(16 |
) |
|
|
261 |
|
|
|
(16 |
) |
Adjusted EBITDA |
|
5,781 |
|
|
|
6,040 |
|
|
$ |
(458 |
) |
|
$ |
2,969 |
|
The following is a reconciliation of net income (loss) attributable to
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||
Net income (loss) attributable to |
$ |
1,561 |
|
|
$ |
1,933 |
|
|
$ |
(4,957 |
) |
|
$ |
(2,275 |
) |
Preferred dividends and earnings allocated to unvested, restricted stock |
|
(141 |
) |
|
|
(143 |
) |
|
|
(280 |
) |
|
|
(286 |
) |
Net income (loss) for basic EPS |
|
1,420 |
|
|
|
1,790 |
|
|
|
(5,237 |
) |
|
|
(2,561 |
) |
Named executive officer severance |
|
— |
|
|
|
— |
|
|
|
770 |
|
|
|
— |
|
Loss (gain) on disposal of assets |
|
346 |
|
|
|
(16 |
) |
|
|
261 |
|
|
|
(16 |
) |
Tax effect of adjustments at federal and state rates |
|
(101 |
) |
|
|
2 |
|
|
|
(300 |
) |
|
|
2 |
|
Adjusted net income (loss) for basic EPS |
$ |
1,665 |
|
|
$ |
1,776 |
|
|
$ |
(4,506 |
) |
|
$ |
(2,575 |
) |
|
|
|
|
|
|
|
|
||||||||
Adjusted net income (loss) for diluted EPS |
$ |
1,665 |
|
|
$ |
1,776 |
|
|
$ |
(4,506 |
) |
|
$ |
(2,575 |
) |
|
|
|
|
|
|
|
|
||||||||
Actual: |
|
|
|
|
|
|
|
||||||||
Basic net income (loss) per common share |
$ |
0.08 |
|
|
$ |
0.10 |
|
|
$ |
(0.30 |
) |
|
$ |
(0.15 |
) |
Diluted net income (loss) per common share |
$ |
0.08 |
|
|
$ |
0.10 |
|
|
$ |
(0.30 |
) |
|
$ |
(0.15 |
) |
|
|
|
|
|
|
|
|
||||||||
Weighted-average common shares outstanding-basic |
|
17,511,000 |
|
|
|
17,461,000 |
|
|
|
17,461,000 |
|
|
|
17,429,000 |
|
Weighted-average common shares outstanding-diluted |
|
17,511,000 |
|
|
|
17,461,000 |
|
|
|
17,461,000 |
|
|
|
17,429,000 |
|
Adjusted: |
|
|
|
|
|
|
|
||||||||
Basic net income (loss) per common share |
$ |
0.10 |
|
|
$ |
0.10 |
|
|
$ |
(0.26 |
) |
|
$ |
(0.15 |
) |
Diluted net income (loss) per common share |
$ |
0.10 |
|
|
$ |
0.10 |
|
|
$ |
(0.26 |
) |
|
$ |
(0.15 |
) |
|
|
|
|
|
|
|
|
||||||||
Weighted-average common shares outstanding-basic |
|
17,511,000 |
|
|
|
17,461,000 |
|
|
|
17,461,000 |
|
|
|
17,429,000 |
|
Weighted-average common shares outstanding-diluted |
|
17,511,000 |
|
|
|
17,461,000 |
|
|
|
17,461,000 |
|
|
|
17,429,000 |
|
Supplemental Information
(in thousands, except acres and average price amounts):
|
Agribusiness Segment Information for the Three Months Ended |
||||||||||||
|
Fresh
|
Lemon
|
Eliminations |
Avocados |
Other
|
Total
|
|||||||
Revenues from external customers |
$ |
30,992 |
$ |
6,743 |
$ |
— |
|
$ |
3,576 |
$ |
4,058 |
$ |
45,369 |
Intersegment revenue |
|
— |
|
9,373 |
|
(9,373 |
) |
|
— |
|
— |
|
— |
Total net revenues |
|
30,992 |
|
16,116 |
|
(9,373 |
) |
|
3,576 |
|
4,058 |
|
45,369 |
Costs and expenses |
|
27,222 |
|
11,662 |
|
(9,373 |
) |
|
2,073 |
|
3,828 |
|
35,412 |
Depreciation and amortization |
|
— |
|
— |
|
— |
|
|
— |
|
— |
|
2,187 |
Operating income |
$ |
3,770 |
$ |
4,454 |
$ |
— |
|
$ |
1,503 |
$ |
230 |
$ |
7,770 |
|
|
|
|
|
|
|
|||||||
|
Agribusiness Segment Information for the Three Months Ended |
||||||||||||
|
Fresh
|
Lemon
|
Eliminations |
Avocados |
Other
|
Total
|
|||||||
Revenues from external customers |
$ |
32,600 |
$ |
6,103 |
$ |
— |
|
$ |
2,707 |
$ |
2,579 |
$ |
43,989 |
Intersegment revenue |
|
— |
|
9,282 |
|
(9,282 |
) |
|
— |
|
— |
|
— |
Total net revenues |
|
32,600 |
|
15,385 |
|
(9,282 |
) |
|
2,707 |
|
2,579 |
|
43,989 |
Costs and expenses |
|
28,629 |
|
10,874 |
|
(9,282 |
) |
|
1,433 |
|
2,503 |
|
34,157 |
Depreciation and amortization |
|
— |
|
— |
|
— |
|
|
— |
|
— |
|
2,285 |
Operating income |
$ |
3,971 |
$ |
4,511 |
$ |
— |
|
$ |
1,274 |
$ |
76 |
$ |
7,547 |
Lemons |
Q2 2022 |
Q2 2021 |
|
Lemon Packing |
Q2 2022 |
Q2 2021 |
||||
|
|
|
|
Cartons packed and sold |
|
1,552 |
|
1,528 |
||
Acres harvested |
|
3,600 |
|
3,600 |
|
Revenue |
$ |
16,116 |
$ |
15,385 |
|
|
757 |
|
732 |
|
Direct costs |
|
11,662 |
|
10,874 |
Third-party grower cartons sold |
|
795 |
|
758 |
|
Operating income |
$ |
4,454 |
$ |
4,511 |
Average price per carton |
$ |
17.57 |
$ |
19.11 |
|
|
|
|
||
|
|
|
|
Avocados |
Q2 2022 |
Q2 2021 |
||||
Lemon revenue |
$ |
2,400 |
$ |
900 |
|
Pounds sold |
|
1,877 |
|
2,142 |
40-pound carton equivalents |
|
213 |
|
93 |
|
Average price per pound |
$ |
1.90 |
$ |
1.26 |
|
|
|
|
|
|
|
||||
Lemon revenue |
$ |
— |
$ |
900 |
|
Other Agribusiness |
Q2 2022 |
Q2 2021 |
||
40-pound carton equivalents |
|
— |
|
38 |
|
Orange cartons sold |
|
328 |
|
154 |
|
|
|
|
Average price per carton |
$ |
7.98 |
$ |
9.12 |
||
Lemon shipping and handling |
$ |
6,700 |
$ |
6,100 |
|
Specialty citrus cartons sold |
|
254 |
|
129 |
Lemon by-product sales |
$ |
1,100 |
$ |
1,600 |
|
Average price per carton |
$ |
5.68 |
$ |
9.11 |
Brokered fruit and other lemon sales |
$ |
300 |
$ |
1,400 |
|
|
|
|
||
|
|
|
|
|
|
|
||||
Agribusiness costs and expenses |
Q2 2022 |
Q2 2021 |
|
|
|
|
||||
Packing costs |
$ |
12,277 |
$ |
11,653 |
|
|
|
|
||
Harvest costs |
|
5,566 |
|
5,520 |
|
|
|
|
||
Growing costs |
|
7,997 |
|
6,713 |
|
|
|
|
||
Third-party grower and supplier costs |
|
9,572 |
|
10,271 |
|
|
|
|
||
Depreciation and amortization |
|
2,187 |
|
2,285 |
|
|
|
|
||
Agribusiness costs and expenses |
$ |
37,599 |
$ |
36,442 |
|
|
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20220607006255/en/
Investors
Managing Partner
ICR 646-277-1254
Source:
FAQ
What were Limoneira's Q2 FY 2022 revenue results?
What is the future outlook for Limoneira's avocado sales?
How has Limoneira addressed its rising operational costs?
What are the projected cash distributions from Harvest at Limoneira?