Limoneira(US:LMNR)2025-09-09 21:30Financial Data and Key Metrics Changes - For Q3 fiscal year 2025, total net revenue was $47.5 million, down from $63.3 million in the same quarter of the previous year [10] - Agribusiness revenue decreased to $45.9 million from $61.8 million year-over-year, primarily due to pricing pressure in the lemon market [10][11] - Operating loss for Q3 fiscal year 2025 was $600,000 compared to operating income of $9 million in the same quarter of the previous year [15] - Net loss applicable to common stock was $1 million, down from net income of $6.5 million in Q3 fiscal year 2024 [15] - Adjusted net loss for diluted EPS was $400,000 or $0.02 per diluted share, compared to adjusted net income of $7.8 million or $0.42 per diluted share in the same period of fiscal year 2024 [16] Business Line Data and Key Metrics Changes - Fresh-packed lemon sales were $23.8 million in Q3 fiscal year 2025, down from $25.8 million in the same period of fiscal year 2024 [11] - Avocado revenue was $8.5 million in Q3 fiscal year 2025, compared to $13.9 million in Q3 fiscal year 2024, with approximately 5.7 million pounds sold at an average price of $1.50 per pound [12] - Orange revenue increased to $1.7 million in Q3 fiscal year 2025 from $1.2 million in the same period of fiscal year 2024 [13] - Farm management revenues dropped to $100,000 in Q3 fiscal year 2025 from $3.2 million in the same period of fiscal year 2024 due to the termination of a farm management agreement [14] Market Data and Key Metrics Changes - The company experienced lower fresh utilization due to strategic timing, but remains confident in achieving volume goals for lemons and avocados in fiscal year 2025 [5] - The lemon market saw pricing pressures in the first two months of the quarter, but improvements were noted in July with higher prices for stored fruit [5][10] - The California avocado crop typically experiences alternating years of high and low production, impacting volume this year compared to last year [12] Company Strategy and Development Direction - The company is focused on a two-part value creation strategy: agriculture production optimization and land and water value creation [5] - A strategic partnership with Sunkist is expected to drive $5 million in annual cost savings and EBITDA enhancements starting in fiscal year 2026 [6] - The company is exploring development options for the Linco del Mar property to address housing shortages in Ventura County [7][8] - The company anticipates significant increases in avocado production as newly planted acreage matures in fiscal year 2027 and beyond [6] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about profitable growth opportunities ahead, despite current market challenges [5] - The company expects fresh lemon volumes to be in the range of 4.5 million to 5 million cartons for fiscal year 2025, with avocado volume around 7 million pounds [18] - Management believes lemons will return to profitability with normalized pricing and utilization levels in fiscal year 2026 [19] - The company is positioned for long-term growth through strategic partnerships and operational improvements [20] Other Important Information - Total costs and expenses for Q3 fiscal year 2025 decreased to $48.1 million from $54.3 million in the previous year [15] - Long-term debt increased to $63.3 million as of July 31, 2025, compared to $40 million at the end of fiscal year 2024 [17] - The company expects future distributions from real estate projects to total approximately $155 million over the next five fiscal years [7] Q&A Session Summary Question: Expectations of costs associated with Linco del Mar development - Management expects costs to be similar to previous developments, estimating $3 to $5 million over three to five years, with most costs capitalized [23][24] Question: Vision for long-term development of Linco del Mar - Management indicated that Limoneira is currently leading the project and is open to partnerships similar to the Lewis Group for future development [25][26] Question: Normalized pricing expectations for lemons - Management noted a rebound in lemon prices and expects supply constraints from regions like Spain and Turkey to support pricing in the upcoming year [28][30] Question: Expectations for avocado volumes in 2026 - Management stated it is too early to predict avocado volumes for 2026 but anticipates a significant breakout year in 2027 [33]