Group 1 - The investment philosophy focuses on three main areas: high-quality growth companies, turnaround situations, and broader market commentary [2] - Emphasis on identifying emerging growth stories before they gain widespread attention, highlighting the importance of sustainable competitive advantages [2] - Expertise in turnaround situations involves seeking fundamentally sound companies that are undervalued due to temporary challenges or market pessimism [2] Group 2 - The analyst's educational background from the University of Virginia provides rigorous analytical skills, enhancing the ability to conduct disciplined research and risk management [2] - The goal is to share well-researched investment ideas and market insights, contributing valuable analysis for informed decision-making [2]

Core Insights - Mission Produce Inc. (AVO) and Limoneira Company (LMNR) are competing in the fresh produce market, focusing on avocados and citrus, respectively, with distinct business models and growth strategies [1][3]. Group 1: Company Overview - AVO is a global leader in the avocado market, sourcing from over 20 regions and supplying more than 25 countries [4]. - LMNR is a vertically integrated citrus grower with a growing avocado footprint, leveraging its California land holdings [2][12]. Group 2: Financial Performance - AVO reported a 28% year-over-year revenue increase to $380.3 million in Q2 fiscal 2025, driven by strong pricing, selling avocados at $2.00 per pound [5][8]. - LMNR experienced a 21% year-over-year revenue decline to $35.1 million in Q2 fiscal 2025, with a loss per share of 20 cents [10][9]. Group 3: Strategic Initiatives - AVO is building an ecosystem with a vertically integrated model and expanding into mangos and blueberries, enhancing its product mix [6][24]. - LMNR is undergoing a strategic transformation, partnering with Sunkist to improve efficiency and stabilize margins, while planning to expand avocado acreage by 2,000 acres by fiscal 2027 [11][14]. Group 4: Market Position and Valuation - AVO's stock has outperformed, with a total return of 16% over the past three months, compared to LMNR's 15.2% decline [20]. - AVO trades at a forward price-to-sales (P/S) multiple of 0.72X, below its 5-year median, while LMNR's P/S multiple is 1.44X [23][24]. Group 5: Future Outlook - AVO is positioned for continued growth with a strong earnings potential and diversified product offerings, reflecting resilience in a volatile market [26][27]. - LMNR's recovery may take longer due to top-line pressures and transitional costs, despite its long-term promise [25][28].

Group 1 - Lemons are considered essential in culinary practices, especially in seafood cooking, highlighting their cultural significance [1] - The author has extensive experience in foreign policy research and investment analysis, focusing on deep-discount value plays and underappreciated companies [1] - The author's investment philosophy is influenced by contrarian investment strategies, particularly those of David Dreman [1] Group 2 - There are no disclosed stock positions or plans to initiate any positions in the companies mentioned, indicating an unbiased perspective [2] - The article expresses personal opinions and is not influenced by compensation from companies mentioned [2] - Seeking Alpha emphasizes that past performance does not guarantee future results and that opinions may not reflect the views of the platform as a whole [3]

Group 1 - The core focus of Quad 7 Capital is to provide investment opportunities through their BAD BEAT Investing platform, emphasizing both long and short trades [1] - The team consists of 7 analysts with diverse expertise in business, policy, economics, mathematics, game theory, and sciences, aiming to educate investors on proficient trading [1] - Since May 2020, the company has maintained an average position of 95% long and 5% short, showcasing their strategic approach to market conditions [1] Group 2 - BAD BEAT Investing offers various benefits, including weekly well-researched trade ideas, access to multiple chat rooms, and daily summaries of key analyst upgrades and downgrades [2] - The platform also provides education on basic options trading and extensive trading tools to enhance investor knowledge and skills [2]

Core Insights - Limoneira Company will rejoin Sunkist Growers, Inc. effective November 1, 2025, marking a significant reunion for both companies [1][2] - The partnership aims to enhance collective capabilities and create greater value for growers, packers, and customers [2][3] - Limoneira will maintain its independent operations while transferring its fresh citrus sales and marketing responsibilities to Sunkist [2][3] Company Overview - Limoneira is a 132-year-old agribusiness based in Santa Paula, California, specializing in lemons, avocados, and other crops across 10,500 acres in multiple countries [5] - Sunkist Growers, founded in 1893, is a citrus marketing cooperative owned by over 1,000 family farmers in California and Arizona [6] Strategic Goals - The reconnection is expected to drive expanded market access, optimize citrus supply, and enhance the cooperative's ability to meet customer and grower needs [3][4] - Both companies are committed to ensuring a seamless transition and maintaining service excellence as they enter the new citrus season [4]

Core Viewpoint - Limoneira Company held its Second Quarter Fiscal Year 2025 Earnings Conference Call, discussing financial results and future outlook [1][2][3]. Financial Results - The earnings release for the second quarter of fiscal year 2025 was made available on the company's website, indicating a structured approach to investor communication [3]. - The conference call included key participants such as the President and CEO Harold Edwards and CFO Mark Palamountain, highlighting the leadership's involvement in financial disclosures [1][3]. Forward-Looking Statements - The company provided a reminder that prepared remarks may contain forward-looking statements, which are subject to various risks and uncertainties that could impact future performance [4]. - Management indicated that additional forward-looking statements might be made in response to questions during the call, emphasizing the dynamic nature of the company's outlook [4].

Financial Data and Key Metrics Changes - For the second quarter of fiscal year 2025, total net revenue was $35.1 million, down from $44.6 million in the same quarter of the previous fiscal year, representing a decline of approximately 21% [16] - Agribusiness revenue decreased to $33.6 million from $43.3 million year-over-year, primarily due to a temporarily oversupplied market causing significant pricing pressure [16][17] - The company reported a net loss applicable to common stock of $3.5 million for the second quarter, compared to a net income of $6.4 million in the same period last year [20] - Adjusted EBITDA for the second quarter was a loss of $167,000, compared to a gain of $16.6 million in the same period of the previous fiscal year [22] Business Line Data and Key Metrics Changes - Fresh packed lemon sales were $19.7 million, down from $25.8 million year-over-year, with 1.4 million cartons sold at an average price of $14.52 per carton, compared to $17.85 in the previous year [17] - Avocado revenue increased to $2.8 million from $2.3 million, with 1.2 million pounds sold at an average price of $2.26 per pound, compared to $1.47 in the previous year [18] - Orange revenue rose to $1.6 million from $1.2 million, with 92,000 cartons sold at an average price of $17.07 per carton, compared to $17.58 in the previous year [18] Market Data and Key Metrics Changes - The company expects relief from current market conditions in the second half of the year as it anticipates achieving more substantial market share and benefiting from seasonal pricing improvements [17] - The citrus sales and marketing plan with Sunkist is expected to enhance resilience to market volatility by creating a more efficient cost structure [17] Company Strategy and Development Direction - The company is merging its citrus sales and marketing operations with Sunkist Growers, which is expected to improve supply chain efficiency and reduce costs by approximately $5 million annually [6][8] - The partnership with Sunkist aims to enhance the company's citrus business model and expand access to food service and retail customers [10][12] - The company remains committed to growing its citrus business through multiple channels and enhancing long-term returns [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the operational enhancements and strategic initiatives that are expected to contribute to sustainable long-term shareholder value [13] - The company anticipates fresh lemon volumes to be in the range of 4.5 million to 5 million cartons for fiscal year 2025, down from previous expectations [24] - The partnership with Sunkist is expected to create a stronger operational foundation, despite a reduction in overall revenue due to the transition of the brokerage business [25] Other Important Information - Total costs and expenses for the second quarter decreased by 22% to $38.5 million compared to $49.3 million in the previous year [19] - Long-term debt increased to $54.9 million as of April 30, 2025, compared to $40 million at the end of the previous fiscal year [23] Q&A Session Summary Question: Can you elaborate on the brokered fruit business and its impact? - The brokered fruit business will be going away, but party cartons will continue to run through the facility and be reflected on the top line [30][31] Question: How should we think about the per box economics of the Sunkist deal? - The deal involves a fixed cost model for sales and marketing, which is expected to reduce costs significantly compared to previous arrangements [32][34] Question: What is the current state of the avocado harvest? - The weather has been favorable, and the strategy of delaying the harvest is expected to yield larger fruit sizes, which typically command better pricing [40][41] Question: Will any of the recent plantings contribute to increased yield by fiscal year 2026? - Early plantings are progressing well, and the company is optimistic about achieving higher yields sooner than expected [44][46]

Financial Data and Key Metrics Changes - For Q2 FY2025, total net revenue was $35.1 million, down from $44.6 million in Q2 FY2024, reflecting a decline in agribusiness revenue due to market oversupply and pricing pressure [14][15] - Adjusted EBITDA for Q2 FY2025 was a loss of $167,000 compared to a gain of $16.6 million in the same period last year [19] - Net loss applicable to common stock for Q2 FY2025 was $3.5 million, compared to net income of $6.4 million in Q2 FY2024 [18] Business Line Data and Key Metrics Changes - Agribusiness revenue for Q2 FY2025 was $33.6 million, down from $43.3 million in the same period last year, primarily due to lower fresh lemon sales [14][15] - Fresh packed lemon sales were $19.7 million in Q2 FY2025, compared to $25.8 million in Q2 FY2024, with an average price per carton dropping from $17.85 to $14.52 [15] - Avocado revenue increased to $2.8 million in Q2 FY2025 from $2.3 million in Q2 FY2024, with an average price per pound rising from $1.47 to $2.26 [16] Market Data and Key Metrics Changes - The company expects relief from current market conditions in the second half of the year as it gains market share and benefits from seasonal pricing improvements [15] - The citrus sales and marketing plan with Sunkist is anticipated to enhance resilience to market volatility and improve cost structure [15][23] Company Strategy and Development Direction - The company is merging its citrus sales and marketing operations with Sunkist Growers, which is expected to save approximately $5 million annually in selling and marketing expenses and improve EBITDA by the same amount [6][7] - The partnership with Sunkist aims to enhance operational capabilities and create a unified system to serve food service and retail customers more effectively [9][10] - The company remains committed to growing its citrus business and expanding avocado production while advancing real estate development and water monetization initiatives [12][23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the operational enhancements and strategic initiatives that will contribute to sustainable long-term shareholder value [12][25] - The company anticipates fresh lemon volumes for FY2025 to be between 4.5 million to 5 million cartons, down from previous estimates, while avocado volumes are expected to remain stable [22][23] - Management highlighted the importance of the partnership with Sunkist in strengthening the citrus business model and improving operational foundations [23][24] Other Important Information - Total costs and expenses for Q2 FY2025 decreased by 22% to $38.5 million compared to $49.3 million in the same period last year [17] - Long-term debt as of April 30, 2025, was $54.9 million, up from $40 million at the end of FY2024 [20] Q&A Session Summary Question: Can you elaborate on the Sunkist deal and its impact on revenue? - Management confirmed that the brokered fruit business will be phased out, but party cartons will continue to run through their facility [26][27] Question: What are the per box economics of the Sunkist partnership? - The partnership will transition to a fixed cost model for sales and marketing, reducing costs and improving margins due to streamlined operations [28][29] Question: How is the avocado harvest expected to perform this year? - Management indicated favorable weather conditions and a strategy to delay harvest for better fruit size and pricing [34][35] Question: Will there be an increase in avocado yield from recent plantings? - Early plantings are ahead of schedule, with expectations for increased yield by FY2026 [38]

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20%28Unaudited%29) This section presents the unaudited consolidated financial statements for Limoneira Company for the quarterly period ended April 30, 2025, including balance sheets, statements of operations, comprehensive income, stockholders' equity, and cash flows [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) As of April 30, 2025, total assets slightly decreased to $296.6 million, while total liabilities increased to $103.2 million, primarily due to a rise in long-term debt Consolidated Balance Sheet Highlights (in thousands) | Account | April 30, 2025 | October 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$296,627** | **$298,815** | | Total Current Assets | $29,834 | $25,846 | | Equity in investments | $74,073 | $81,546 | | **Total Liabilities** | **$103,166** | **$96,314** | | Long-term debt, less current portion | $54,929 | $40,031 | | **Total Stockholders' Equity** | **$182,651** | **$191,691** | [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) For the three months ended April 30, 2025, the company reported a net loss of $3.4 million, a significant decline from the prior year's net income, mainly due to decreased equity earnings from investments Statement of Operations Summary (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Total Net Revenues | $35,119 | $44,606 | $69,424 | $84,337 | | Operating Loss | $(3,345) | $(4,675) | $(8,691) | $(12,420) | | Equity in earnings of investments, net | $491 | $16,592 | $593 | $16,633 | | Net (Loss) Income | $(3,365) | $6,555 | $(6,436) | $2,878 | | Diluted Net (Loss) Income per Share | $(0.20) | $0.35 | $(0.38) | $0.15 | [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended April 30, 2025, net cash used in operating activities improved to $4.0 million, while investing activities used $6.5 million, and financing activities provided $9.6 million Cash Flow Summary for Six Months Ended April 30 (in thousands) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(3,984) | $(13,295) | | Net cash used in investing activities | $(6,506) | $(2,920) | | Net cash provided by financing activities | $9,554 | $14,016 | | **Net decrease in cash** | **$(913)** | **$(2,229)** | [Notes to Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail accounting policies, business segments, asset sales, real estate projects, debt, and subsequent events, including a $1.5 million gain from water rights sales and a new packinghouse agreement - The company's business primarily involves growing, harvesting, packing, and selling citrus (mainly lemons) and avocados, alongside rental operations and real estate development[29](index=29&type=chunk) - In January 2025, the company sold water rights in two transactions for a total of **$1.74 million**, recording a gain of **$1.5 million**[61](index=61&type=chunk)[62](index=62&type=chunk)[124](index=124&type=chunk) - The real estate joint venture, LLCB, closed on lot sales for **1,261 residential units** since inception and made a cash distribution of **$10.0 million** to the company in April 2025[53](index=53&type=chunk) - As of April 30, 2025, the company had **$55.0 million** in total long-term debt, primarily with AgWest Farm Credit, with an available borrowing capacity of **$60.1 million**[65](index=65&type=chunk)[66](index=66&type=chunk)[192](index=192&type=chunk) Segment Operating Income (Loss) for Six Months Ended April 30, 2025 (in thousands) | Segment | Total Net Revenues | Operating (Loss) Income | | :--- | :--- | :--- | | Fresh Lemons | $46,368 | $(340) | | Lemon Packing | $9,197 | $2,946 | | Avocados | $2,942 | $1,282 | | Other Agribusiness | $7,927 | $983 | | **Total Agribusiness** | **$66,434** | **$1,231** | - Subsequent to the quarter end, on June 6, 2025, the company entered into a three-year Commercial Packinghouse License Agreement with Sunkist Growers, Inc., effective November 1, 2025[105](index=105&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the financial results for Q2 and H1 fiscal 2025, attributing revenue and net income declines to lower lemon sales and reduced equity earnings from the LLCB real estate venture, while noting sufficient liquidity [Overview](index=27&type=section&id=Overview) Limoneira is an agribusiness company engaged in fruit production, sales, rental operations, and real estate development, managing approximately 10,500 acres of land and water resources across multiple regions - The company operates three business divisions: agribusiness, rental operations, and real estate development[113](index=113&type=chunk) - Agricultural plantings include approximately **3,100 acres of lemons**, **1,400 acres of avocados**, **100 acres of oranges**, and **400 acres of wine grapes** across California, Arizona, Chile, and Argentina[110](index=110&type=chunk) - The company is expanding avocado production by **1,000 acres** through fiscal year 2027 to capitalize on strong consumer demand[117](index=117&type=chunk) [Recent Developments](index=29&type=section&id=Recent%20Developments) In early 2025, Limoneira sold water rights, announced a $30.0 million share repurchase program, concluded strategic alternative exploration, received a real estate JV distribution, and formed a new organic waste recycling JV - Announced a **$30.0 million** share repurchase program in March 2025[126](index=126&type=chunk) - Concluded its process of exploring strategic alternatives, but will continue to evaluate M&A opportunities and monetize non-core assets[127](index=127&type=chunk) - Received a **$10.0 million** cash distribution from the Harvest at Limoneira real estate joint venture in April 2025[130](index=130&type=chunk) - Announced a letter of intent to form a 50/50 joint venture with Agromin Corporation to expand organic waste recycling operations[129](index=129&type=chunk) [Results of Operations](index=30&type=section&id=Results%20of%20Operations) For Q2 2025, total net revenues fell 21% to $35.1 million, and for H1 2025, they fell 18% to $69.4 million, primarily due to lower lemon sales volume and pricing, resulting in a net loss and negative Adjusted EBITDA Q2 Revenue by Product (in thousands) | Product | Q2 2025 | Q2 2024 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Lemons | $27,304 | $35,805 | $(8,501) | (24)% | | Avocados | $2,780 | $2,348 | $432 | 18% | | Oranges | $1,574 | $1,160 | $414 | 36% | | Farm management | $339 | $2,046 | $(1,707) | (83)% | H1 Revenue by Product (in thousands) | Product | H1 2025 | H1 2024 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Lemons | $55,565 | $68,781 | $(13,216) | (19)% | | Avocados | $2,942 | $2,348 | $594 | 25% | | Oranges | $3,142 | $2,301 | $841 | 37% | | Farm management | $1,520 | $4,094 | $(2,574) | (63)% | Adjusted EBITDA Reconciliation (in thousands) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net (loss) income attributable to Limoneira | $(3,361) | $6,567 | $(6,435) | $2,982 | | EBITDA | $(736) | $14,226 | $(3,956) | $8,694 | | **Adjusted EBITDA** | **$(167)** | **$16,560** | **$(2,461)** | **$11,727** | - The decrease in Q2 2025 other income was primarily due to a **$16.1 million** decrease in equity in earnings from investments, mainly from the LLCB joint venture which had significant home closings in the prior year period[144](index=144&type=chunk) [Segment Results of Operations](index=36&type=section&id=Segment%20Results%20of%20Operations) In Q2 2025, Fresh Lemons revenue fell 26% due to lower sales, Lemon Packing revenue decreased 13%, Avocados revenue increased due to higher prices, and Other Agribusiness revenue dropped 31% from a terminated farm management agreement - Fresh Lemons Q2 revenue decreased by **$8.1 million (26%)** due to a **$6.1 million** drop in fresh packed lemon sales and a **$1.4 million** decrease in brokered lemon sales[158](index=158&type=chunk)[161](index=161&type=chunk) - Lemon Packing Q2 operating income per carton fell to **$1.27** from **$1.58** in the prior year[162](index=162&type=chunk) - Avocados segment Q2 revenue increased to **$2.8 million** from **$2.3 million**, driven by higher prices per pound (**$2.26** vs **$1.47**), despite lower volume[134](index=134&type=chunk)[164](index=164&type=chunk) - Other Agribusiness Q2 revenue decreased by **$1.6 million (31%)**, primarily due to a **$1.7 million** decline in farm management revenues following the termination of the FMA[165](index=165&type=chunk) [Liquidity and Capital Resources](index=43&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity sources include cash from operations, its revolving credit facility, asset sales, and equity investment distributions, with management confident in sufficient liquidity for the next 12 months - Primary liquidity sources are cash from operations, the revolving credit facility, asset sales, and distributions from equity investments[185](index=185&type=chunk) - As of April 30, 2025, the company had **$54.9 million** in outstanding borrowings under its AgWest Farm Credit Facility and **$60.1 million** of availability[192](index=192&type=chunk) - The company received a **$10.0 million** cash distribution from its Harvest at Limoneira real estate joint venture in April 2025[195](index=195&type=chunk) - Management believes cash flows from operations and available borrowing capacity will be sufficient to satisfy capital expenditures, debt service, and working capital needs for the next 12 months[187](index=187&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=42&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) There have been no material changes in the company's market risk disclosures since its Annual Report on Form 10-K for the fiscal year ended October 31, 2024 - No material changes in market risk disclosures were reported for the period[200](index=200&type=chunk) [Controls and Procedures](index=42&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of April 30, 2025, with no significant changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that disclosure controls and procedures were effective as of April 30, 2025[201](index=201&type=chunk) - There were no significant changes in internal control over financial reporting during the quarter[202](index=202&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=43&type=section&id=Item%201.%20Legal%20Proceedings) The company is party to various legal proceedings arising in the ordinary course of business but does not expect any to have a material adverse effect on its financial condition or operating results - The company is not aware of any pending or threatened litigation that it expects will have a material adverse effect on its business[87](index=87&type=chunk)[205](index=205&type=chunk) [Risk Factors](index=43&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors disclosed in the company's Annual Report on Form 10-K for the fiscal year ended October 31, 2024 - No material changes in risk factors were reported for the period[206](index=206&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=43&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In March 2025, the Board approved a $30.0 million share repurchase program, though no shares were repurchased under it as of April 30, 2025; 6,680 shares were acquired from employees for tax obligations - In March 2025, the company's Board of Directors approved a share repurchase program for up to **$30.0 million** of its common stock[207](index=207&type=chunk) - No shares were repurchased under the new program as of April 30, 2025[207](index=207&type=chunk) - **6,680 shares** were acquired from employees at an average price of **$15.03 per share** to satisfy tax withholdings on vested restricted stock[207](index=207&type=chunk) [Other Information](index=43&type=section&id=Item%205.%20Other%20Information) There is no other information to report for this item - None[209](index=209&type=chunk) [Exhibits](index=44&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including certifications by the Principal Executive Officer and Principal Financial Officer, and XBRL data files - Exhibits filed include CEO and CFO certifications pursuant to Sarbanes-Oxley Act Sections 302 and 906[212](index=212&type=chunk) - The financial statements and notes are formatted in Inline XBRL[212](index=212&type=chunk)

Limoneira Company Announces Second Quarter Fiscal Year 2025 Financial Results Company Announces Plan to Merge Citrus Sales and Marketing into Sunkist Growers; Expected to Generate $5 Million in Annual Selling and Marketing Cost Savings and EBITDA Improvement Beginning Fiscal Year 2026 Operating Loss Improved 28% in Second Quarter of Fiscal Year 2025 Compared to Prior Year Exhibit 99.1 Avocado Business Continued to Deliver Strong Pricing Performance in Second Quarter of Fiscal Year 2025 Company Reiterates Av ...