Limoneira(US:LMNR)2025-03-13 01:39Financial Data and Key Metrics Changes - Total net revenue for Q1 2025 was $34.3 million, down from $39.7 million in Q1 2024, reflecting a decline of approximately 11% [25] - Agribusiness revenue decreased to $32.9 million from $38.3 million year-over-year, a decline of about 14% [25] - Total costs and expenses decreased by 16% to $39.7 million compared to $47.5 million in the previous year [32] - Operating loss improved to $5.3 million from $7.7 million, a reduction of approximately 31% [32] - Net loss applicable to common stock was $3.2 million, compared to $3.7 million in Q1 2024 [32] - Adjusted EBITDA improved to a loss of $2.3 million from a loss of $4.8 million year-over-year [33] Business Line Data and Key Metrics Changes - Fresh packed lemon sales were $21.2 million, down from $23.9 million, with 1,147,000 cartons sold at an average price of $18.44 per carton compared to $21.06 in the prior year [27] - Avocado revenue was $162,000 in Q1 2025, a new revenue stream compared to no revenue in Q1 2024, with 73,000 pounds sold at an average price of $2.25 per pound [28] - Orange revenues increased to $1.6 million from $1.1 million, with 75,000 cartons sold at an average price of $20.91 per carton [28] - Specialty citrus and wine grape revenue decreased to $0.5 million from $1.1 million, with no wine grape revenue recorded in Q1 2025 [30] Market Data and Key Metrics Changes - The lemon market faced temporary oversupply, leading to downward pricing pressure, which is expected to persist through Q2 2025 [26] - The company anticipates a strengthening of the lemon business in the second half of the year due to seasonal pricing improvements and reduced imports from Spain [13] Company Strategy and Development Direction - The company is focusing on transforming its business model to an asset-lighter approach, optimizing revenue mix, and expanding avocado production [9][11] - Strategic investments in citrus and avocado markets are aimed at diversifying revenue streams and enhancing long-term operational and financial outlook [11][26] - The company plans to expand avocado production by 1,000 acres through fiscal year 2027 to meet consumer demand [18] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the EBITDA outlook and the potential for additional asset monetization gains in fiscal year 2025 [38] - The company is confident in its ability to navigate market volatility and expects to receive $165 million from its joint ventures over the next six fiscal years [37] Other Important Information - The company successfully monetized water pumping rights for $1.5 million, contributing positively to its financial results [12][34] - A revised flood zone map approved by FEMA is expected to enhance interest in residential and commercial real estate in affected areas [20][21] Q&A Session Summary Question: Inquiry about Water right transaction volume - Management explained that the volume of 58 acre feet was based on opportunistic demand and benchmarked against local development rates [43][45] Question: Future water transactions and partnerships - Management indicated that both existing and new partners are being explored for future water monetization opportunities [47][48] Question: Expansion potential in avocado production - Management noted the feasibility of expanding avocado acreage by 250 to 500 additional acres, contingent on environmental conditions [51][53] Question: Market dynamics for avocado growth - Management discussed the limitations of nursery stock availability and the geographical constraints for avocado cultivation in California [59][58]