Limoneira(US:LMNR)2020-01-14 01:26Financial Data and Key Metrics Changes - The company achieved record revenue in fiscal year 2019, with total revenue increasing to $171.4 million from $129.4 million in the previous year, despite facing adverse weather conditions [9][34] - For the fourth quarter of fiscal year 2019, total net revenue was $36.5 million, a significant increase from $14.7 million in the same period of the previous year [25] - Adjusted EBITDA for fiscal year 2019 was $1.9 million, a decrease from $23.4 million in the previous year, indicating challenges in profitability [35] Business Line Data and Key Metrics Changes - Agribusiness revenue for the fourth quarter of fiscal year 2019 was $35.3 million, up from $13.5 million in the same quarter of the previous year, primarily due to higher lemon volume [25] - Fresh lemon sales in the fourth quarter of fiscal year 2019 amounted to $17 million, compared to $7.1 million in the same period of fiscal year 2018, despite lower pricing [26] - Avocado production was significantly down in fiscal year 2019 due to extreme heat, with minimal revenue recognized, but a return to normal production is expected in fiscal year 2020 [18] Market Data and Key Metrics Changes - The overall lemon industry continues to expand globally, with improved pricing per carton expected as the company enters fiscal year 2020 [10] - The company anticipates selling between 7.5 million to 9.5 million cartons of fresh lemons globally in fiscal year 2020, with 5 million to 6 million cartons expected to be sold domestically [39] - The company is optimistic about moving a high percentage of its crop into Southeast Asian markets, contingent on the quality of the fruit harvested [52] Company Strategy and Development Direction - The company has made strategic investments to position itself for long-term growth, including a joint venture in Argentina and expansion of its customer base [15][14] - The company plans to simplify its guidance by focusing on adjusted EBITDA and lemon volume guidance, rather than earnings per share [38] - The Harvest at Limoneira project is projected to generate approximately $100 million in cash flow over the next 6 to 9 years, with initial lot sales already closed [19][40] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that weather events adversely affected the bottom line in fiscal year 2019, but expressed confidence in the company's long-term growth potential [37] - The company expects to achieve adjusted EBITDA in the range of $22 million to $26 million for fiscal year 2020, driven by improved crop yields and market conditions [39] - Management remains cautiously optimistic about the upcoming year, with expectations of improved utilization rates and pricing for lemons, avocados, and oranges [69] Other Important Information - The company recognized $2.3 million in revenue from avocado insurance payments related to prior weather impacts, which contributed to the overall revenue for fiscal year 2019 [27] - The company reported a net loss applicable to common stock of $6.4 million for fiscal year 2019, compared to a net income of $19.7 million in the previous year [34] Q&A Session Summary Question: What drives variability in carton guidance? - Management explained that variability in carton guidance is influenced by tree crop conditions and market demand, with a focus on achieving high fresh utilization rates [42][43] Question: What visibility is there regarding high winds affecting fruit quality? - Management noted that high winds could challenge fruit quality, potentially impacting pricing due to a higher percentage of lower-grade fruit [45][46] Question: How does the balance sheet support future acquisitions? - Management indicated a focus on maintaining a balanced sheet while being open to opportunistic acquisitions, particularly in South America [48][49] Question: What are the assumptions for non-U.S. lemon sales? - Management expressed optimism about exporting a significant portion of the crop to Southeast Asia, contingent on the quality of the fruit harvested [51][52] Question: What is the timeline for cash flow from Harvest at Limoneira? - Management expects to have better visibility on cash flow from the Harvest project by the end of fiscal year 2020, with significant cash flow anticipated in 2022 [74][75]