EX-99.1 2 lmnr73122ex991.htm EX-99.1 Document

Exhibit 99.1
limoneira03.jpg
Investor Contact:
John Mills
Managing Partner
ICR 646-277-1254



Limoneira Company Announces Fiscal Third Quarter 2022 Financial Results

Revenue Grew 20% to $58.9 Million Compared to Prior Year Driven by Record Avocado Revenues and Strong Fresh Lemon Sales

Operating Income Increased Over 200% to $11.1 Million Compared to Prior Year

Earnings Per Share were $0.40, a 100% Increase Compared to Prior Year

Company Expects to Receive $8 million in Proceeds during the Fiscal Fourth Quarter 2022 from Harvest at Limoneira

SANTA PAULA, Calif.-- (BUSINESS WIRE) – September 8, 2022 -- Limoneira Company (the “Company” or “Limoneira”) (Nasdaq: LMNR), a diversified citrus growing, packing, selling and marketing company with related agribusiness activities and real estate development operations, today reported financial results for the fiscal third quarter ended July 31, 2022.

Management Comments

Harold Edwards, President and Chief Executive Officer of the Company, stated, “Operating income increased over 200% and our top line by 20%, driven by record avocado revenues and increased fresh lemon sales in the third quarter of fiscal 2022. Our strategic approach to fresh utilization enabled our sales and marketing team to successfully market our fresh lemons throughout the year. In addition, our avocado segment has continued to outperform expectations this fiscal year with pricing almost doubling year-over-year resulting in record avocado revenues of $12.6 million in the third quarter of 2022. Lemon pricing remained challenged in the third quarter as the domestic and global lemon markets continue to work through a surplus of inventory. Our industry continued to face rising labor costs and higher packing and supplier costs, but our strong top line and more efficient marketing and selling plans more than offset these cost increases.”

Mr. Edwards continued, “Our new strategic plan to expand One World of Citrus, increase our avocado plantings and strategically sell certain assets to dramatically increase our cash flow in the near future is progressing as expected. As an example, in the fiscal fourth quarter of 2022, we expect to generate $8.0 million in cash proceeds from the sale of 17 acres to Limoneira Lewis Community Builders, LLC (“LLCB”) to potentially develop additional residential units. We will continue to develop “best in class” grower services to recruit additional grower partners. We have over 15,400 acres of rich agricultural lands, real estate properties, and water rights in California, Arizona, Chile and Argentina with a fair-market-value of over $600 million in today’s market yet a book value on Limoneira’s balance sheet of $220 million because many of these assets were acquired years ago at a low-cost basis. Selective monetization of certain assets in Limoneira’s portfolio potentially creates a tremendous value creation opportunity for our shareholders.”




Fiscal Year 2022 Third Quarter Results

For the third quarter of fiscal year 2022, total net revenue increased 20% to $58.9 million, compared to total net revenue of $49.1 million in the third quarter of the previous fiscal year. Agribusiness revenue was $57.6 million, compared to $48.0 million in the third quarter of last fiscal year. Other operations revenue increased to $1.3 million compared to $1.2 million for the third quarter of fiscal year 2021.

Agribusiness revenue for the third quarter of fiscal year 2022 includes $27.8 million in fresh lemon sales, compared to $24.4 million of fresh lemon sales during the same period of fiscal year 2021. Approximately 1,512,000 cartons of fresh lemons were sold in aggregate during the third quarter of fiscal year 2022 at an $18.39 average price per carton compared to approximately 1,144,000 cartons sold at a $21.34 average price per carton during the third quarter of fiscal year 2021.

The Company recognized a record $12.6 million of avocado revenue in the third quarter of fiscal year 2022 compared to $4.1 million in the same period last fiscal year. Approximately 5.7 million pounds of avocados were sold in aggregate during the third quarter of fiscal year 2022 at a $2.21 average price per pound compared to approximately 3.5 million pounds sold at a $1.16 average price per pound during the third quarter of fiscal year 2021.

The Company recognized $3.7 million of orange revenue in the third quarter of fiscal year 2022, compared to $2.0 million in the same period of fiscal year 2021, primarily attributable to higher prices partially offset by decreased volume of oranges sold. Approximately 209,000 cartons of oranges were sold during the third quarter of fiscal year 2022 at a $17.88 average price per carton, compared to approximately 259,000 cartons sold at a $7.65 average price per carton during the third quarter of fiscal year 2021.

Specialty citrus and other crops revenues were similar to the prior year at $1.1 million for the third quarter of fiscal years 2022 and 2021.

Total costs and expenses for the third quarter of fiscal year 2022 were $47.9 million, compared to $45.8 million in the third quarter of last fiscal year.

Despite the inflationary pressures throughout the Company’s industry, operating income for the third quarter of fiscal year 2022 increased by over 200% to $11.1 million, compared to operating income of $3.4 million in the third quarter of the previous fiscal year.

Net income applicable to common stock, after preferred dividends, for the third quarter of fiscal year 2022 was $7.3 million, compared to $3.6 million in the third quarter of fiscal year 2021. Net income per diluted share for the third quarter of fiscal year 2022 was $0.40 compared to $0.20 for the same period of fiscal year 2021.

Adjusted net income for diluted earnings per share (“EPS”) was $7.5 million or $0.41 per diluted share, compared to the third quarter of fiscal year 2021 of $3.7 million or $0.20 per diluted share. A reconciliation of adjusted net income to net income attributable to Limoneira Company is provided at the end of this release.

Adjusted EBITDA was $14.2 million in the third quarter of fiscal year 2022, compared to $7.8 million in the same period of fiscal year 2021. A reconciliation of adjusted EBITDA to net income attributable to Limoneira Company is provided at the end of this release.

Fiscal Year 2022 First Nine Months Results

For the nine months ended July 31, 2022, revenue was $144.9 million, compared to $132.5 million in the same period last fiscal year. Operating income for the first nine months of fiscal year 2022 was $4.1 million, compared to operating income of $0.1 million in the same period of last fiscal year. Net income applicable to common stock, after preferred dividends, was $2.0 million for the first nine months of fiscal year 2022, compared to net income


applicable to common stock of $1.1 million in the same period of last fiscal year. Net income per diluted share for the first nine months of fiscal year 2022 was $0.11, compared to net income per diluted share of $0.06 in the same period of fiscal year 2021.

For the first nine months of fiscal year 2022, adjusted net income for diluted EPS was $2.9 million compared to adjusted net income for diluted EPS of $1.0 million for the same period in fiscal year 2021. In the first nine months of 2022, adjusted net income per diluted share was $0.17 compared to adjusted net income per diluted share of $0.06 for the same period in fiscal year 2021, based on approximately 17.5 million and 17.4 million, respectively, weighted average diluted common shares outstanding.

Balance Sheet and Liquidity

During the nine months ended July 31, 2022, net cash provided by operating activities was $10.9 million, compared to net cash provided by operating activities of $16.8 million in the same period of the prior fiscal year. For the nine months ended July 31, 2022, net cash used in investing activities was $5.3 million, compared to net cash used in investing activities of $8.7 million in the same period of the prior fiscal year. Net cash used in financing activities was $4.8 million for the nine months ended July 31, 2022, compared to net cash used in financing activities of $7.8 million in the same period of last fiscal year.

Long-term debt as of July 31, 2022, was $129.0 million, compared to $130.4 million at the end of fiscal year 2021.

Real Estate Development and Property Sales

The Company’s joint venture with The Lewis Group of Companies (“Lewis”) for the residential development of its East Area I real estate development project, named Harvest at Limoneira, is currently expected to have approximately 1,500 total residential units built and sold over the life of the project. At the end of fiscal year 2021, the joint venture had closed the sales of lots representing 586 residential units, thus concluding lot sales in Phase 1 of the development.

In March 2022, the joint venture signed a letter of intent to purchase 17 acres from Limoneira to potentially develop additional residential units. In September 2022, the Company entered into an agreement to sell the property to LLCB and expects to close the transaction and receive approximately $8.0 million in cash proceeds in the fiscal fourth quarter of 2022.

In July 2021, the Company entered into a non-binding letter of intent to sell approximately 25 acres of its East Area II property in five staged purchases to an investment company for the purpose of constructing a medical campus consisting of medical office buildings and an acute care hospital. Completion of the transaction is subject to the execution of a purchase and sale agreement and resolution of certain contingencies.

In the first quarter of fiscal year 2020, the Company entered into an agreement to sell its Sevilla property for $2.7 million, which is expected to close in calendar year 2022. After transaction and other costs, the Company expects to receive proceeds of approximately $2.7 million from the sale of its Sevilla property. As of July 31, 2022, the $2.7 million carrying value of the property was classified as held for sale and included in prepaid expenses and other current assets.

Guidance

The Company’s food service business and industry logistics continue to experience slowdown in its supply chain as well as inflationary pressures on a global basis. The Company believes it will continue to experience improving year over year results for the fiscal fourth quarter of 2022 due to its stronger position in retail food and club grocery, as well as a gain from the joint venture with Lewis related to Harvest at Limoneira.



The Company continues to expect fresh lemon volumes to be in the range of 4.5 million to 5.0 million cartons for fiscal year 2022. For the first nine months of fiscal year 2022, the Company achieved avocado volume of approximately 8.0 million pounds, which exceeds the expected range of 6.0 million to 7.0 million pounds for fiscal year 2022.

The Company expects cash distributions to be $95 million from Harvest at Limoneira during the next five fiscal years, beginning in fiscal year 2022.

Harvest at Limoneira Cash Flow Projections

Fiscal Year20222023202420252026
Projected Distributions$8 Million$15 Million$27 Million$30 Million$15 Million

The Company has an additional 1,000 acres of non-bearing lemons estimated to become full bearing over the next four years, which enables the Company to achieve strong organic growth for many years to come. The Company expects 200 of the 1,000 acres to become full bearing in fiscal year 2022. The Company anticipates this additional acreage will increase its domestic supply of Limoneira-owned lemons from its 2021 level by approximately 50%, or by about 900 thousand to 1.3 million additional fresh cartons, as the non-bearing and planned acreage becomes productive. The Company also expects to have a steady increase in third-party grower fruit. The foregoing describes organic growth opportunities and does not include potential acquisition opportunities for the Company in its highly fragmented industry.

Conference Call Information

The Company will host a conference call to discuss its financial results on September 8, 2022, at 1:30 pm Pacific Time (4:30 pm Eastern Time). Investors interested in participating in the live call can dial (877) 407-0789 from the U.S. International callers can dial (201) 689-8562. A telephone replay will be available approximately two hours after the call concludes and will be available through September 22, 2022, by dialing (844) 512-2921 from the U.S., or (412) 317-6671 from international locations; passcode is 13732445.

About Limoneira Company

Limoneira Company, a 129-year-old international agribusiness headquartered in Santa Paula, California, has grown to become one of the premier integrated agribusinesses in the world. Limoneira (lē moñ âra) is a dedicated sustainability company with 15,400 acres of rich agricultural lands, real estate properties, and water rights in California, Arizona, Chile and Argentina. The Company is a leading producer of lemons, avocados, oranges, specialty citrus and other crops that are enjoyed throughout the world. For more about Limoneira Company, visit www.limoneira.com.

Investors
John Mills
Managing Partner
ICR 646-277-1254

Forward-Looking Statements

This press release contains forward-looking statements, including guidance for fiscal years 2022 and beyond, within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are based on Limoneira’s current expectations about future events and can be identified by terms such as “expect,” “may,” “anticipate,” “intend,” “should be,” “will be,” “is likely to,” “strive to,” and similar expressions referring to future periods.



Limoneira believes the expectations reflected in the forward-looking statements are reasonable but cannot guarantee future results, level of activity, performance or achievements. Actual results may differ materially from those expressed or implied in the forward-looking statements. Therefore, Limoneira cautions you against relying on any of these forward-looking statements. Factors that may cause future outcomes to differ materially from those foreseen in forward-looking statements include, but are not limited to: additional impacts from the current COVID-19 pandemic, changes in laws, regulations, rules, quotas, tariffs and import laws; weather conditions that affect production, transportation, storage, import and export of fresh product; increased pressure from crop disease, insects and other pests; disruption of water supplies or changes in water allocations; pricing and supply of raw materials and products; market responses to industry volume pressures; pricing and supply of energy; changes in interest and currency exchange rates; availability of financing for land development activities; political changes and economic crises; international conflict; acts of terrorism; labor disruptions, strikes or work stoppages; loss of important intellectual property rights; inability to pay debt obligations; inability to engage in certain transactions due to restrictive covenants in debt instruments; government restrictions on land use; and market and pricing risks due to concentrated ownership of stock. Other risks and uncertainties include those that are described in Limoneira’s SEC filings that are available on the SEC’s website at http://www.sec.gov. Limoneira undertakes no obligation to subsequently update or revise the forward-looking statements made in this press release, except as required by law.



LIMONEIRA COMPANY
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
($ in thousands, except share amounts) 

 July 31, 2022October 31, 2021
Assets  
Current assets:  
Cash$995 $439 
Accounts receivable, net18,457 17,483 
Cultural costs6,326 7,500 
Prepaid expenses and other current assets12,253 10,709 
Receivables/other from related parties4,392 5,958 
Total current assets42,423 42,089 
Property, plant and equipment, net241,069 242,420 
Real estate development23,231 22,828 
Equity in investments64,621 64,072 
Goodwill1,512 1,527 
Intangible assets, net7,582 8,329 
Other assets13,059 11,011 
Total assets$393,497 $392,276 
Liabilities and Stockholders' Equity  
Current liabilities:  
Accounts payable$7,078 $8,963 
Growers and suppliers payable12,018 10,371 
Accrued liabilities7,691 6,542 
Payables to related parties7,719 6,976 
Current portion of long-term debt3,554 2,472 
Total current liabilities38,060 35,324 
Long-term liabilities:  
Long-term debt, less current portion129,004 130,353 
Deferred income taxes24,282 22,853 
Other long-term liabilities5,656 4,501 
Total liabilities197,002 193,031 
Commitments and contingencies— — 
Series B Convertible Preferred Stock – $100.00 par value (50,000 shares authorized: 14,790 shares issued and outstanding at July 31, 2022 and October 31, 2021) (8.75% coupon rate)1,479 1,479 
Series B-2 Convertible Preferred Stock – $100.00 par value (10,000 shares authorized: 9,300 shares issued and outstanding at July 31, 2022 and October 31, 2021) (4% dividend rate on liquidation value of $1,000 per share)9,331 9,331 
Stockholders' Equity:  
Series A Junior Participating Preferred Stock – $0.01 par value (20,000 shares authorized: zero issued or outstanding at July 31, 2022 and October 31, 2021)— — 
Common Stock – $0.01 par value (39,000,000 shares authorized: 17,972,528 and 17,936,377 shares issued and 17,721,551 and 17,685,400 shares outstanding at July 31, 2022 and October 31, 2021, respectively)180 179 
Additional paid-in capital164,871 163,965 
Retained earnings19,618 21,552 
Accumulated other comprehensive loss(7,295)(5,733)
Treasury stock, at cost, 250,977 shares at July 31, 2022 and October 31, 2021(3,493)(3,493)
Noncontrolling interest11,804 11,965 
Total equity185,685 188,435 
Total liabilities and stockholders' equity$393,497 $392,276 




LIMONEIRA COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
($ in thousands, except share amounts)

 Three Months Ended
July 31,		Nine Months Ended
July 31,
 2022202120222021
Net revenues:  
Agribusiness$57,594 $47,954 $141,046 $129,080 
Other operations1,329 1,171 3,901 3,452 
Total net revenues58,923 49,125 144,947 132,532 
Costs and expenses:  
Agribusiness41,463 40,691 120,306 114,071 
Other operations1,127 1,017 3,294 3,189 
Loss on disposal of assets, net242 — 503 — 
Selling, general and administrative5,031 4,043 16,756 15,154 
Total costs and expenses47,863 45,751 140,859 132,414 
Operating income 11,060 3,374 4,088 118 
Other (expense) income:  
Interest income6 211 54 279 
Interest expense, net of patronage dividends(772)(574)(1,253)(1,062)
Equity in earnings of investments, net331 1,462 681 2,471 
Other income, net13 32 106 83 
Total other (expense) income (422)1,131 (412)1,771 
Income before income tax provision10,638 4,505 3,676 1,889 
Income tax provision(3,313)(1,335)(1,385)(1,122)
Net income 7,325 3,170 2,291 767 
Net loss attributable to noncontrolling interest52 535 129 663 
Net income attributable to Limoneira Company7,377 3,705 2,420 1,430 
Preferred dividends(125)(125)(376)(376)
Net income applicable to common stock$7,252 $3,580 $2,044 $1,054 
Basic net income per common share$0.41 $0.20 $0.11 $0.06 
Diluted net income per common share$0.40 $0.20 $0.11 $0.06 
Weighted-average common shares outstanding-basic17,529,000 17,461,000 17,481,000 17,439,000 
Weighted-average common shares outstanding-diluted18,334,000 18,243,000 17,481,000 17,439,000 




Non-GAAP Financial Measures

Due to significant depreciable assets associated with the nature of our operations and interest costs associated with our capital structure, management believes that earnings before interest, income taxes, depreciation and amortization ("EBITDA") and adjusted EBITDA, which excludes named executive officer severance and loss (gain) on disposal of assets, are important measures to evaluate our results of operations between periods on a more comparable basis. In addition, we have presented adjusted net income attributable to Limoneira Company and adjusted net income per common share attributable to Limoneira Company to reflect the exclusion of named executive officer severance and loss (gain) on disposal of assets. Such measurements are not prepared in accordance with U.S. generally accepted accounting principles ("GAAP") and should not be construed as an alternative to reported results determined in accordance with GAAP. The non-GAAP information provided is unique to the Company and may not be consistent with methodologies used by other companies. The Company has not provided a reconciliation of forward-looking non-GAAP measures, primarily due to variability and difficulty in making accurate forecasts and projections, as not all of the information necessary for a quantitative reconciliation is available to the Company without unreasonable efforts.

EBITDA and adjusted EBITDA are summarized and reconciled to net income attributable to Limoneira Company, which management considers to be the most directly comparable financial measure calculated and presented in accordance with GAAP as follows (in thousands):
 Three Months Ended July 31,Nine Months Ended July 31,
 2022202120222021
Net income attributable to Limoneira Company$7,377 $3,705 $2,420 $1,430 
Interest income(6)(211)(54)(279)
Interest expense, net of patronage dividends772 574 1,253 1,062 
Income tax provision3,313 1,335 1,385 1,122 
Depreciation and amortization2,469 2,437 7,432 7,490 
EBITDA13,925 7,840 12,436 10,825 
Named executive officer severance— — 770 — 
Loss (gain) on disposal of assets, net242 (4)503 (20)
Adjusted EBITDA14,167 7,836 $13,709 $10,805 



The following is a reconciliation of net income attributable to Limoneira Company to adjusted net income for diluted EPS (in thousands, except share amounts):
 Three Months Ended July 31,Nine Months Ended July 31,
 2022202120222021
Net income attributable to Limoneira Company$7,377 $3,705 $2,420 $1,430 
Preferred dividends and earnings allocated to unvested, restricted stock(204)(140)(418)(426)
Net income for basic EPS7,173 3,565 2,002 1,004 
Named executive officer severance— — 770 — 
Loss (gain) on disposal of assets, net242 (4)503 (20)
Tax effect of adjustments at federal and state rates(68)1 (356)5 
Adjusted net income for basic EPS$7,347 $3,562 $2,919 $989 
Effect of dilutive unvested, restricted stock and preferred stock125 140 — — 
Adjusted net income for diluted EPS$7,472 $3,702 $2,919 $989 
Actual:
Basic net income per common share$0.41 $0.20 $0.11 $0.06 
Diluted net income per common share$0.40 $0.20 $0.11 $0.06 
Weighted-average common shares outstanding-basic17,529,000 17,461,000 17,481,000 17,439,000 
Effect of dilutive unvested, restricted stock and preferred stock805,000 782,000 — — 
Weighted-average common shares outstanding-diluted18,334,000 18,243,000 17,481,000 17,439,000 
Adjusted:
Basic net income per common share$0.42 $0.20 $0.17 $0.06 
Diluted net income per common share$0.41 $0.20 $0.17 $0.06 
Weighted-average common shares outstanding-basic17,529,000 17,461,000 17,481,000 17,439,000 
Weighted-average common shares outstanding-diluted18,334,000 18,243,000 17,481,000 17,439,000 


Supplemental Information
(in thousands, except acres and average price amounts):
Agribusiness Segment Information for the Three Months Ended July 31, 2022
 Fresh
Lemons		Lemon
Packing		Eliminations 
Avocados		Other
Agribusiness		Total
Agribusiness
Revenues from external customers$33,823 $6,337 $— $12,578 $4,856 $57,594 
Intersegment revenue— 9,696 (9,696)— — — 
Total net revenues33,823 16,033 (9,696)12,578 4,856 57,594 
Costs and expenses32,600 11,953 (9,696)3,154 1,280 39,291 
Depreciation and amortization— — — — — 2,172 
Operating income$1,223 $4,080 $— $9,424 $3,576 $16,131 
Agribusiness Segment Information for the Three Months Ended July 31, 2021
 Fresh
Lemons		Lemon
Packing		Eliminations 
Avocados		Other
Agribusiness		Total
Agribusiness
Revenues from external customers$36,295 $4,540 $— $4,073 $3,046 $47,954 
Intersegment revenue— 7,192 (7,192)— — — 
Total net revenues36,295 11,732 (7,192)4,073 3,046 47,954 
Costs and expenses31,846 9,279 (7,192)2,708 1,956 38,597 
Depreciation and amortization— — — — — 2,094 
Operating income$4,449 $2,453 $— $1,365 $1,090 $7,263 

LemonsQ3 2022Q3 2021Lemon PackingQ3 2022Q3 2021
United States:Cartons packed and sold1,512 1,144 
Acres harvested3,600 3,600 Revenue$16,033 $11,732 
Limoneira cartons sold817 490 Direct costs11,953 9,279 
Third-party grower cartons sold695 654 Operating income$4,080 $2,453 
Average price per carton$18.39 $21.34 
Chile:AvocadosQ3 2022Q3 2021
Lemon revenue$400 $500 Pounds sold5,694 3,513 
40-pound carton equivalents87 132 Average price per pound$2.21 $1.16 
Argentina:
Lemon revenue$— $700 Other AgribusinessQ3 2022Q3 2021
40-pound carton equivalents— 339 Orange cartons sold209259 
Average price per carton$17.88 $7.65 
Lemon shipping and handling$6,300 $4,500 Specialty citrus cartons sold61 45 
Lemon by-product sales$1,100 $600 Average price per carton$18.34 $14.04 
Brokered fruit and other lemon sales$4,600 $10,000 
Agribusiness costs and expensesQ3 2022Q3 2021
Packing costs$12,463 $9,864 
Harvest costs6,219 3,383 
Growing costs4,965 7,522 
Third-party grower and supplier costs15,644 17,828 
Depreciation and amortization2,172 2,094 
Agribusiness costs and expenses$41,463 $40,691