Limoneira Company Announces Third Quarter Fiscal Year 2023 Financial Results
- Brokered lemons and other lemon sales grew 76% YoY to $8.8M
- Anticipates higher lemon pricing in Q4
- Q3 total net revenue decreased YoY
- Adjusted EBITDA decreased YoY
- Fresh lemon volumes for FY 2023 revised down to 4.7M-5.0M cartons
- Net debt position of $30.2M
- Conference call scheduled to discuss financial results
Brokered Lemons and Other Lemon Sales Grew
Company Successfully Capitalized on Water Fallowing Conservation Program in
Company Achieved Avocado Volume Guidance and Updates Lemon Volume Guidance for Fiscal Year 2023
Company Anticipates Year-Over-Year Pricing Improvement in Fresh Lemons in Fourth Quarter of Fiscal Year 2023
Management Comments
Harold Edwards, President and Chief Executive Officer of the Company, stated, “The success of our strategic shift towards an “asset-lighter” business model is evident in our third quarter results with brokered lemons and other lemon sales growing
Mr. Edwards continued, “Our third quarter results were impacted by lower lemon pricing and lower fresh utilization rates as a result of the heavy rains in
Fiscal Year 2023 Third Quarter Results
For the third quarter of fiscal year 2023, total net revenue was
Agribusiness revenue for the third quarter of fiscal year 2023 includes
The Company recognized
The Company recognized
Total costs and expenses for the third quarter of fiscal year 2023 were
Operating loss for the third quarter of fiscal year 2023 was
Net loss applicable to common stock, after preferred dividends, for the third quarter of fiscal year 2023 was
Adjusted net income for diluted EPS in the third quarter of fiscal year 2023 was
Adjusted EBITDA was
Fiscal Year 2023 First Nine Months Results
For the nine months ended July 31, 2023, revenue was
For the first nine months of fiscal year 2023, adjusted net loss for diluted EPS was
Balance Sheet and Liquidity
During the nine months ended July 31, 2023, net cash used in operating activities was
On January 31, 2023, the Company sold its Northern Properties, which resulted in total net proceeds of
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. At the end of fiscal year 2022, the joint venture had closed the sales of lots representing 586 residential units, thus concluding lot sales in Phase 1 of the development.
In October 2022, the Company contributed 17 acres, known as the East Area I retained property, to a newly formed development entity, LLCB II, LLC, to potentially develop additional residential units and sold a
In July 2021, the Company entered into a non-binding letter of intent to sell approximately 25 acres of its East Area II property in five staged purchases to an investment company for the purpose of constructing a medical campus consisting of medical office buildings and an acute care hospital. Completion of the transaction is subject to the execution of a purchase and sale agreement and resolution of certain contingencies.
Updated Guidance
The Company’s food service business and industry logistics continue to experience slowdown due to supply chain and inflationary pressures on a global basis.
The Company now expects fresh lemon volumes to be in the range of 4.7 million to 5.0 million cartons for fiscal year 2023, compared to previous guidance of 5.0 million to 5.4 million cartons. The Company achieved avocado volume of approximately 3.8 million pounds in fiscal year 2023 compared to previous guidance of 3.0 million to 4.0 million pounds.
The Company expects to receive total proceeds of
Harvest at Limoneira Cash Flow Projections
Fiscal Year |
|
2022 Actual |
|
2023 |
|
2024 |
|
2025 |
|
2026 |
|
2027 |
|
2028 |
Projected Distributions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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. The Company also expects to have a steady 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 September 7, 2023, 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
About Limoneira Company
Limoneira Company, a 130-year-old international agribusiness headquartered in
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 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)
|
July 31, 2023 |
|
October 31, 2022 |
||||
Assets |
|
|
|
||||
Current assets: |
|
|
|
||||
Cash |
$ |
11,007 |
|
|
$ |
857 |
|
Accounts receivable, net |
|
18,067 |
|
|
|
15,651 |
|
Cultural costs |
|
2,618 |
|
|
|
8,643 |
|
Prepaid expenses and other current assets |
|
6,117 |
|
|
|
8,496 |
|
Receivables/other from related parties |
|
5,229 |
|
|
|
3,888 |
|
Total current assets |
|
43,038 |
|
|
|
37,535 |
|
Property, plant and equipment, net |
|
162,836 |
|
|
|
222,628 |
|
Real estate development |
|
9,967 |
|
|
|
9,706 |
|
Equity in investments |
|
73,425 |
|
|
|
72,855 |
|
Goodwill |
|
1,524 |
|
|
|
1,506 |
|
Intangible assets, net |
|
6,996 |
|
|
|
7,317 |
|
Other assets |
|
14,887 |
|
|
|
16,971 |
|
Total assets |
$ |
312,673 |
|
|
$ |
368,518 |
|
|
|
|
|
||||
Liabilities, Convertible Preferred Stock and Stockholders' Equity |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Accounts payable |
$ |
8,985 |
|
|
$ |
10,663 |
|
Growers and suppliers payable |
|
7,604 |
|
|
|
10,740 |
|
Accrued liabilities |
|
8,392 |
|
|
|
11,060 |
|
Payables to related parties |
|
4,704 |
|
|
|
4,860 |
|
Income taxes payable |
|
7,175 |
|
|
|
219 |
|
Current portion of long-term debt |
|
435 |
|
|
|
1,732 |
|
Total current liabilities |
|
37,295 |
|
|
|
39,274 |
|
Long-term liabilities: |
|
|
|
||||
Long-term debt, less current portion |
|
40,735 |
|
|
|
104,076 |
|
Deferred income taxes |
|
22,363 |
|
|
|
23,497 |
|
Other long-term liabilities |
|
6,079 |
|
|
|
9,807 |
|
Total liabilities |
|
106,472 |
|
|
|
176,654 |
|
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 |
|
|
|
177 |
|
Additional paid-in capital |
|
167,925 |
|
|
|
165,169 |
|
Retained earnings |
|
23,945 |
|
|
|
15,500 |
|
Accumulated other comprehensive loss |
|
(4,496 |
) |
|
|
(7,908 |
) |
Treasury stock, at cost, 250,977 shares at July 31, 2023 and October 31, 2022 |
|
(3,493 |
) |
|
|
(3,493 |
) |
Noncontrolling interest |
|
11,330 |
|
|
|
11,609 |
|
Total stockholders' equity |
|
195,391 |
|
|
|
181,054 |
|
Total liabilities, convertible preferred stock and stockholders' equity |
$ |
312,673 |
|
|
$ |
368,518 |
|
LIMONEIRA COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in thousands, except per share data)
|
Three Months Ended July 31, |
|
Nine Months Ended July 31, |
||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net revenues: |
|
|
|
|
|
|
|
||||||||
Agribusiness |
$ |
51,092 |
|
|
$ |
57,594 |
|
|
$ |
134,296 |
|
|
$ |
141,046 |
|
Other operations |
|
1,405 |
|
|
|
1,329 |
|
|
|
4,172 |
|
|
|
3,901 |
|
Total net revenues |
|
52,497 |
|
|
|
58,923 |
|
|
|
138,468 |
|
|
|
144,947 |
|
Costs and expenses: |
|
|
|
|
|
|
|
||||||||
Agribusiness |
|
46,845 |
|
|
|
41,463 |
|
|
|
126,275 |
|
|
|
120,306 |
|
Other operations |
|
1,034 |
|
|
|
1,127 |
|
|
|
3,281 |
|
|
|
3,294 |
|
Loss (gain) on disposal of assets, net |
|
1,545 |
|
|
|
242 |
|
|
|
(29,199 |
) |
|
|
503 |
|
Gain on legal settlement |
|
— |
|
|
|
— |
|
|
|
(2,269 |
) |
|
|
— |
|
Selling, general and administrative |
|
4,622 |
|
|
|
5,031 |
|
|
|
19,907 |
|
|
|
16,756 |
|
Total costs and expenses |
|
54,046 |
|
|
|
47,863 |
|
|
|
117,995 |
|
|
|
140,859 |
|
Operating (loss) income |
|
(1,549 |
) |
|
|
11,060 |
|
|
|
20,473 |
|
|
|
4,088 |
|
Other (expense) income: |
|
|
|
|
|
|
|
||||||||
Interest income |
|
178 |
|
|
|
6 |
|
|
|
248 |
|
|
|
54 |
|
Interest expense, net of patronage dividends |
|
(241 |
) |
|
|
(772 |
) |
|
|
(417 |
) |
|
|
(1,253 |
) |
Equity in earnings of investments, net |
|
199 |
|
|
|
331 |
|
|
|
514 |
|
|
|
681 |
|
Other (expense) income, net |
|
(215 |
) |
|
|
13 |
|
|
|
(2,627 |
) |
|
|
106 |
|
Total other expense |
|
(79 |
) |
|
|
(422 |
) |
|
|
(2,282 |
) |
|
|
(412 |
) |
(Loss) income before income tax benefit (provision) |
|
(1,628 |
) |
|
|
10,638 |
|
|
|
18,191 |
|
|
|
3,676 |
|
Income tax benefit (provision) |
|
378 |
|
|
|
(3,313 |
) |
|
|
(5,537 |
) |
|
|
(1,385 |
) |
Net (loss) income |
|
(1,250 |
) |
|
|
7,325 |
|
|
|
12,654 |
|
|
|
2,291 |
|
Net loss attributable to noncontrolling interest |
|
87 |
|
|
|
52 |
|
|
|
201 |
|
|
|
129 |
|
Net (loss) income attributable to Limoneira Company |
|
(1,163 |
) |
|
|
7,377 |
|
|
|
12,855 |
|
|
|
2,420 |
|
Preferred dividends |
|
(125 |
) |
|
|
(125 |
) |
|
|
(376 |
) |
|
|
(376 |
) |
Net (loss) income applicable to common stock |
$ |
(1,288 |
) |
|
$ |
7,252 |
|
|
$ |
12,479 |
|
|
$ |
2,044 |
|
|
|
|
|
|
|
|
|
||||||||
Basic net (loss) income per common share |
$ |
(0.07 |
) |
|
$ |
0.41 |
|
|
$ |
0.70 |
|
|
$ |
0.11 |
|
|
|
|
|
|
|
|
|
||||||||
Diluted net (loss) income per common share |
$ |
(0.07 |
) |
|
$ |
0.40 |
|
|
$ |
0.69 |
|
|
$ |
0.11 |
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average common shares outstanding-basic |
|
17,621 |
|
|
|
17,529 |
|
|
|
17,597 |
|
|
|
17,481 |
|
Weighted-average common shares outstanding-diluted |
|
17,621 |
|
|
|
18,334 |
|
|
|
18,381 |
|
|
|
17,481 |
|
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, named executive officer cash severance, pension settlement cost, loss (gain) on disposal of assets, net, cash bonus related to the sale of assets and gain on legal settlement are important measures to evaluate our results of operations between periods on a more comparable basis. Adjusted EBITDA in previous periods did not exclude stock-based compensation which has now been excluded as management believes this is a better representation of cash generated by operations and is consistent with peer company reporting. Adjusted EBITDA for prior periods has been restated to conform to the current presentation. Such measurements are not prepared in accordance with
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 July 31, |
|
Nine Months Ended July 31, |
||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net (loss) income attributable to Limoneira Company |
$ |
(1,163 |
) |
|
$ |
7,377 |
|
|
$ |
12,855 |
|
|
$ |
2,420 |
|
Interest income |
|
(178 |
) |
|
|
(6 |
) |
|
|
(248 |
) |
|
|
(54 |
) |
Interest expense, net of patronage dividends |
|
241 |
|
|
|
772 |
|
|
|
417 |
|
|
|
1,253 |
|
Income tax (benefit) provision |
|
(378 |
) |
|
|
3,313 |
|
|
|
5,537 |
|
|
|
1,385 |
|
Depreciation and amortization |
|
2,019 |
|
|
|
2,469 |
|
|
|
6,510 |
|
|
|
7,432 |
|
EBITDA |
|
541 |
|
|
|
13,925 |
|
|
|
25,071 |
|
|
|
12,436 |
|
Stock-based compensation |
|
756 |
|
|
|
618 |
|
|
|
2,785 |
|
|
|
1,993 |
|
Named executive officer cash severance |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
432 |
|
Pension settlement cost |
|
— |
|
|
|
— |
|
|
|
2,741 |
|
|
|
— |
|
Loss (gain) on disposal of assets, net |
|
1,545 |
|
|
|
242 |
|
|
|
(29,199 |
) |
|
|
503 |
|
Cash bonus related to sale of assets |
|
— |
|
|
|
— |
|
|
|
2,000 |
|
|
|
— |
|
Gain on legal settlement |
|
— |
|
|
|
— |
|
|
|
(2,269 |
) |
|
|
— |
|
Adjusted EBITDA |
$ |
2,842 |
|
|
$ |
14,785 |
|
|
$ |
1,129 |
|
|
$ |
15,364 |
|
The following is a reconciliation of net (loss) income attributable to Limoneira Company to adjusted net income (loss) for diluted EPS (in thousands, except per share data):
|
Three Months Ended July 31, |
|
Nine Months Ended July 31, |
||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net (loss) income attributable to Limoneira Company |
$ |
(1,163 |
) |
|
$ |
7,377 |
|
|
$ |
12,855 |
|
|
$ |
2,420 |
|
Effect of preferred stock and unvested, restricted stock |
|
(152 |
) |
|
|
(79 |
) |
|
|
(439 |
) |
|
|
(418 |
) |
Stock-based compensation |
|
756 |
|
|
|
618 |
|
|
|
2,785 |
|
|
|
1,993 |
|
Named executive officer cash severance |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
432 |
|
Pension settlement cost |
|
— |
|
|
|
— |
|
|
|
2,741 |
|
|
|
— |
|
Loss (gain) on disposal of assets, net |
|
1,545 |
|
|
|
242 |
|
|
|
(29,199 |
) |
|
|
503 |
|
Cash bonus related to sale of assets |
|
— |
|
|
|
— |
|
|
|
2,000 |
|
|
|
— |
|
Gain on legal settlement |
|
— |
|
|
|
— |
|
|
|
(2,269 |
) |
|
|
— |
|
Tax effect of adjustments at federal and state rates |
|
(628 |
) |
|
|
(251 |
) |
|
|
6,539 |
|
|
|
(853 |
) |
Adjusted net income (loss) for diluted EPS |
$ |
358 |
|
|
$ |
7,907 |
|
|
$ |
(4,987 |
) |
|
$ |
4,077 |
|
|
|
|
|
|
|
|
|
||||||||
Diluted net (loss) income per common share |
$ |
(0.07 |
) |
|
$ |
0.40 |
|
|
$ |
0.69 |
|
|
$ |
0.11 |
|
Adjusted diluted net income (loss) per common share |
$ |
0.02 |
|
|
$ |
0.43 |
|
|
$ |
(0.28 |
) |
|
$ |
0.23 |
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average common shares outstanding - diluted |
|
17,621 |
|
|
|
18,334 |
|
|
|
18,381 |
|
|
|
17,481 |
|
Effect of preferred stock |
|
— |
|
|
|
— |
|
|
|
(784 |
) |
|
|
— |
|
Adjusted weighted-average common shares outstanding - diluted |
|
17,621 |
|
|
|
18,334 |
|
|
|
17,597 |
|
|
|
17,481 |
|
Supplemental Information
(in thousands, except acres and average price amounts):
|
Agribusiness Segment Information for the Three Months Ended July 31, 2023 |
||||||||||||
|
Fresh Lemons |
Lemon Packing |
Eliminations |
Avocados |
Other Agribusiness |
Total Agribusiness |
|||||||
Revenues from external customers |
$ |
33,585 |
$ |
5,472 |
$ |
— |
|
$ |
3,462 |
$ |
8,573 |
$ |
51,092 |
Intersegment revenue |
|
— |
|
9,684 |
|
(9,684 |
) |
|
— |
|
— |
|
— |
Total net revenues |
|
33,585 |
|
15,156 |
|
(9,684 |
) |
|
3,462 |
|
8,573 |
|
51,092 |
Costs and expenses |
|
30,758 |
|
13,140 |
|
(9,684 |
) |
|
3,030 |
|
7,866 |
|
45,110 |
Depreciation and amortization |
|
— |
|
— |
|
— |
|
|
— |
|
— |
|
1,735 |
Operating income (loss) |
$ |
2,827 |
$ |
2,016 |
$ |
— |
|
$ |
432 |
$ |
707 |
$ |
4,247 |
|
Agribusiness Segment Information for the Three Months Ended July 31, 2022 |
||||||||||||
|
Fresh Lemons |
Lemon Packing |
Eliminations |
Avocados |
Other Agribusiness |
Total Agribusiness |
|||||||
Revenues from external customers |
$ |
33,823 |
$ |
6,337 |
$ |
— |
|
$ |
12,578 |
$ |
4,856 |
$ |
57,594 |
Intersegment revenue |
|
— |
|
9,696 |
|
(9,696 |
) |
|
— |
|
— |
|
— |
Total net revenues |
|
33,823 |
|
16,033 |
|
(9,696 |
) |
|
12,578 |
|
4,856 |
|
57,594 |
Costs and expenses |
|
32,600 |
|
11,953 |
|
(9,696 |
) |
|
3,154 |
|
1,280 |
|
39,291 |
Depreciation and amortization |
|
— |
|
— |
|
— |
|
|
— |
|
— |
|
2,172 |
Operating income (loss) |
$ |
1,223 |
$ |
4,080 |
$ |
— |
|
$ |
9,424 |
$ |
3,576 |
$ |
16,131 |
Lemons |
Q3 2023 |
Q3 2022 |
|
Lemon Packing |
Q3 2023 |
Q3 2022 |
||||
|
|
|
|
Cartons packed and sold |
|
1,352 |
|
1,512 |
||
Acres harvested |
|
2,300 |
|
3,600 |
|
Revenue |
$ |
15,156 |
$ |
16,033 |
Limoneira cartons sold |
|
758 |
|
817 |
|
Direct costs |
|
13,140 |
|
11,953 |
Third-party grower cartons sold |
|
594 |
|
695 |
|
Operating income |
$ |
2,016 |
$ |
4,080 |
Average price per carton |
$ |
17.92 |
$ |
18.39 |
|
|
|
|
||
|
|
|
|
Avocados |
Q3 2023 |
Q3 2022 |
||||
|
|
|
|
Pounds sold |
|
2,822 |
|
5,694 |
||
Lemon revenue |
$ |
500 |
$ |
400 |
|
Average price per pound |
$ |
0.99 |
$ |
2.21 |
40-pound carton equivalents |
|
292 |
|
87 |
|
|
|
|
||
|
|
|
|
Other Agribusiness |
Q3 2023 |
Q3 2022 |
||||
Other: |
|
|
|
Orange cartons sold |
|
71 |
|
209 |
||
Lemon shipping and handling |
$ |
5,500 |
$ |
6,300 |
|
Average price per carton |
$ |
18.17 |
$ |
17.88 |
Lemon by-product sales |
$ |
600 |
$ |
1,100 |
|
Specialty citrus cartons sold |
|
70 |
|
61 |
Brokered fruit and other lemon sales |
$ |
8,300 |
$ |
4,600 |
|
Average price per carton |
$ |
25.88 |
$ |
18.34 |
|
|
|
|
Farm management |
$ |
5,383 |
$ |
— |
||
Agribusiness costs and expenses |
Q3 2023 |
Q3 2022 |
|
|
|
|
||||
Packing costs |
$ |
13,780 |
$ |
12,463 |
|
|
|
|
||
Harvest costs |
|
6,189 |
|
6,219 |
|
|
|
|
||
Growing costs |
|
10,566 |
|
4,965 |
|
|
|
|
||
Third-party grower and supplier costs |
|
14,575 |
|
15,644 |
|
|
|
|
||
Depreciation and amortization |
|
1,735 |
|
2,172 |
|
|
|
|
||
Agribusiness costs and expenses |
$ |
46,845 |
$ |
41,463 |
|
|
|
|
||
View source version on businesswire.com: https://www.businesswire.com/news/home/20230907659906/en/
Investors
John Mills
Managing Partner
ICR 646-277-1254
Source: Limoneira Company
