Limoneira(US:LMNR)2025-12-23 22:30Financial Data and Key Metrics Changes - For Q4 FY 2025, total net revenue was $42.8 million, a decrease from $43.9 million in Q4 FY 2024. Agribusiness revenue was $41.3 million compared to $42.5 million in the previous year [13][19] - The operating loss for Q4 FY 2025 was $11.1 million, compared to a loss of $2.8 million in Q4 FY 2024. The net loss applicable to common stock was $8.8 million, compared to a loss of $2 million in the same period last year [17][20] - For FY 2025, total net revenue was $159.7 million, down from $191.5 million in FY 2024, primarily due to decreased agribusiness revenues [19][20] Business Line Data and Key Metrics Changes - Agribusiness revenue for Q4 FY 2025 included $19.2 million in fresh packed lemon sales, significantly up from $8.4 million in Q4 FY 2024. Approximately 821,000 cartons of U.S. packed fresh lemons were sold at an average price of $23.33 per carton [13][14] - Avocado revenue was $300,000 in Q4 FY 2025, down from $8.9 million in Q4 FY 2024, with approximately 396,000 pounds sold at an average price of $0.79 per pound [15] - Orange revenue increased to $2.9 million in Q4 FY 2025 from $1.7 million in Q4 FY 2024, with 148,000 cartons sold at an average price of $19.67 per carton [16] Market Data and Key Metrics Changes - The company expects fresh lemon volumes of 4-4.5 million cartons and avocado volumes of 5-6 million pounds for FY 2026, indicating a strategic shift towards higher-demand products [24] - The transition to Sunkist is anticipated to enhance customer access and pricing stability, with a focus on contracted sales rather than open market sales [32] Company Strategy and Development Direction - The company is transforming its business model by reducing reliance on volatile lemon pricing and expanding into avocados and real estate development [5][9] - A planned organic recycling joint venture is expected to generate $4-$5 million in additional EBITDA starting in FY 2027 [7] - The company aims to achieve $10 million in cost savings in FY 2026, driven by operational restructuring and the Sunkist partnership [5][24] Management's Comments on Operating Environment and Future Outlook - Management highlighted the importance of the Sunkist partnership in improving cost structure and customer relationships, which is expected to yield financial benefits in FY 2026 [24] - The company anticipates a significant increase in avocado production capacity over the next few years, contributing to revenue growth [6][24] - Management expressed confidence in the long-term value of water rights and the potential for monetization through fallowing programs [39][46] Other Important Information - The company completed the sale of its Chilean assets for $15 million and is advancing the monetization of other non-strategic assets valued at approximately $40 million [8] - Long-term debt increased to $72.5 million as of October 31, 2025, compared to $40 million at the end of FY 2024 [22] Q&A Session Summary Question: Can you provide more details on the $10 million cost savings from the Sunkist partnership? - Management explained that the savings come from reduced sales and marketing costs and improved operational efficiencies, including renegotiated storage contracts [28][29] Question: How does the company plan to monetize its water rights? - Management discussed the complexities of water rights in water-scarce areas and the potential for monetization through conservation and fallowing programs [36][39] Question: What is the outlook for lemon pricing in the near term? - Management indicated that lemon prices are expected to stabilize, with a potential average price in the $20 range, depending on market conditions [72]