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Limoneira(LMNR) - 2024 Q4 - Earnings Call Transcript
LMNRLimoneira(LMNR)2024-12-24 01:57
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Financial Data and Key Metrics Changes - For fiscal year 2024, total net revenue increased by 6% to a record 191.5million,withadjustedEBITDAof191.5 million, with adjusted EBITDA of 26.7 million compared to a loss of 224,000infiscalyear2023[10][29][30]−Theoperatinglossforfiscalyear2024was224,000 in fiscal year 2023 [10][29][30] - The operating loss for fiscal year 2024 was 6.2 million, down from an operating income of 10.8millioninthepreviousyear,primarilyduetoanetgainondisposalofassets[29]−Netincomeapplicabletocommonstockafterpreferreddividendswas10.8 million in the previous year, primarily due to a net gain on disposal of assets [29] - Net income applicable to common stock after preferred dividends was 7.2 million for fiscal year 2024, compared to 8.9millionforfiscalyear2023[29]BusinessLineDataandKeyMetricsChanges−AgribusinessrevenueforQ4fiscalyear2024was8.9 million for fiscal year 2023 [29] Business Line Data and Key Metrics Changes - Agribusiness revenue for Q4 fiscal year 2024 was 42.5 million, up from 40.1millioninQ4fiscalyear2023[22]−FreshpackedlemonsalesinQ4fiscalyear2024were40.1 million in Q4 fiscal year 2023 [22] - Fresh packed lemon sales in Q4 fiscal year 2024 were 8.4 million, down from 11.3millioninthesameperiodlastyear,impactedbylowerfreshutilizationratesduetoweatherevents[23]−AvocadorevenueinQ4fiscalyear2024was11.3 million in the same period last year, impacted by lower fresh utilization rates due to weather events [23] - Avocado revenue in Q4 fiscal year 2024 was 8.9 million, compared to no revenue in Q4 fiscal year 2023, with 4.6 million pounds sold at an average price of 1.92perpound[24]MarketDataandKeyMetricsChanges−Thecompanyachievedavocadoandlemonvolumeguidancefortheyear,with15.1millionpoundsofavocadossold,thehighestvolumeinalmost15years[11]−Thecompanyexpectsfreshlemonvolumesforfiscalyear2025tobeintherangeof5millionto5.5millioncartons,andavocadovolumestobebetween7millionto8millionpounds[34]CompanyStrategyandDevelopmentDirection−Thecompanyplanstoexpandavocadoproductionby1,000acresthroughfiscalyear2027,aimingtocapitalizeonrobustconsumerdemandtrends[11][35]−Thecompanyiscommittedtoexploringstrategicalternativesforitsassetstomaximizestockholdervalue,withsignificantinterestreceivedsinceannouncingthisexploration[12][18]Management′sCommentsonOperatingEnvironmentandFutureOutlook−Managementexpressedconfidenceintheagriculturalplatform′sstrengthandthepotentialforsignificantEBITDAgrowthfromtheavocadoexpansion[11]−Thecompanyanticipatesmeaningfulwatermonetizationtransactionsinfiscalyear2025,particularlyfromtheSantaPaulawaterbasin[12][41]OtherImportantInformation−Thecompanyachievedtwosignificantrealestatemilestones,includingthecompletionofPhaseIIofaresidentialdevelopmentprojectandanincreaseinthetotalnumberofresidentialunitsapprovedbytheSantaPaulaCityCouncil[13][14]−ThenetdebtasofOctober31,2024,was1.92 per pound [24] Market Data and Key Metrics Changes - The company achieved avocado and lemon volume guidance for the year, with 15.1 million pounds of avocados sold, the highest volume in almost 15 years [11] - The company expects fresh lemon volumes for fiscal year 2025 to be in the range of 5 million to 5.5 million cartons, and avocado volumes to be between 7 million to 8 million pounds [34] Company Strategy and Development Direction - The company plans to expand avocado production by 1,000 acres through fiscal year 2027, aiming to capitalize on robust consumer demand trends [11][35] - The company is committed to exploring strategic alternatives for its assets to maximize stockholder value, with significant interest received since announcing this exploration [12][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the agricultural platform's strength and the potential for significant EBITDA growth from the avocado expansion [11] - The company anticipates meaningful water monetization transactions in fiscal year 2025, particularly from the Santa Paula water basin [12][41] Other Important Information - The company achieved two significant real estate milestones, including the completion of Phase II of a residential development project and an increase in the total number of residential units approved by the Santa Paula City Council [13][14] - The net debt as of October 31, 2024, was 37.6 million, with a strong balance sheet and cash flow projections increased by 46% [16][31] Q&A Session Summary Question: Water monetization efforts - Management believes the water monetization program for the Colorado River will be extended for another 25 years, with meaningful transactions expected from the Santa Paula water basin [41][42] Question: Relative value of water assets - The company highlighted significant differences in the value of water rights between the Colorado River and Santa Paula Basin, with Santa Paula rights expected to be more valuable [44][46] Question: Fresh lemon targets for 2025 - Management indicated that the fresh lemon target of 5 million to 5.5 million cartons is based on improved utilization rates and increased volume from third-party growers [53][55] Question: Avocado production and economics - The company is transitioning to higher density avocado planting, expecting significant increases in yield per acre, with a target of 30 million pounds by 2029 [67][75] Question: Real estate joint venture distributions - Management is uncertain about the timing of the next distribution from the joint venture but mentioned ongoing capital expenditures for infrastructure improvements [90]