• Net Revenue: $191.5 million for fiscal year 2024, a 6% increase from the previous year.
• Adjusted EBITDA: $26.7 million for fiscal year 2024, compared to a loss of $224,000 in fiscal year 2023.
• Net Debt: $37.6 million as of October 31, 2024.
• Agribusiness Revenue: $42.5 million in Q4 2024, up from $40.1 million in Q4 2023.
• Fresh Packed Lemon Sales: $8.4 million in Q4 2024, down from $11.3 million in Q4 2023.
• Avocado Revenue: $8.9 million in Q4 2024, with 4.6 million pounds sold.
• Operating Loss: $2.8 million in Q4 2024, compared to $9.7 million in Q4 2023.
• Net Loss: $2 million in Q4 2024, compared to $3.6 million in Q4 2023.
• Adjusted Net Loss Per Share: $0.09 in Q4 2024, compared to $0.15 in Q4 2023.
• Cash and Cash Equivalents (Joint Venture): $66.9 million as of October 31, 2024, with Limoneira's share approximately $33.5 million.

• Warning! GuruFocus has detected 6 Warning Sign with LMNR.

Release Date: December 23, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Limoneira Co (NASDAQ:LMNR) achieved a record net revenue of $191.5 million for fiscal year 2024, marking a 6% increase from the previous year.
• The company successfully sold 15.1 million pounds of avocados, the highest volume in nearly 15 years, validating their strategic expansion in avocado production.
• Limoneira Co (NASDAQ:LMNR) is experiencing increased penetration in the food service and quick service restaurant channels for its lemon offerings, with expectations for further market penetration in fiscal year 2025.
• The company's real estate joint venture with Lewis Group continues to perform well, with significant milestones achieved, including the approval to increase residential units from 1,500 to 2,050.
• Limoneira Co (NASDAQ:LMNR) has reduced its net debt position and is exploring strategic alternatives to maximize stockholder value, indicating a strong financial position and potential for future growth.

Negative Points

• The company experienced a decrease in fresh packed lemon sales, with a drop from $11.3 million in fiscal year 2023 to $8.4 million in fiscal year 2024, due to lower fresh utilization rates and weather-related delays.
• Specialty citrus and other crop revenue decreased from $6.5 million in fiscal year 2023 to $3.6 million in fiscal year 2024, primarily due to decreased volume and wine grape revenue.
• Limoneira Co (NASDAQ:LMNR) reported an operating loss of $6.2 million for fiscal year 2024, compared to an operating income of $10.8 million the previous year, largely due to the net gain on asset disposal.
• The company anticipates lower avocado volumes in fiscal year 2025 due to the alternate bearing nature of avocado trees, which may impact revenue growth.
• Despite improvements, the company still faces challenges with weather conditions affecting crop yields and fresh utilization rates, which can impact overall profitability.

Q & A Highlights

Q: Can you provide more details on the water monetization efforts and their expected impact in fiscal 2025? A: Harold Edwards, President and CEO, explained that the following program for the Colorado River is expected to be extended for another 25 years, with new terms defined in 2025 and enacted in 2026. While the new water monetization from the Colorado River won't take place in 2025, there will be meaningful water monetization from the Santa Paula Water Basin. The company plans to demonstrate some of their first transactions in that basin at meaningful values, highlighting the significant value of the Santa Paula Basin pumping rights.

Q: What is the relative value of an acre-foot of water in the Colorado River versus the Santa Paula Basin? A: Harold Edwards noted that the following program on the Colorado River allows Limoneira to follow half of their productive land, receiving $400 per acre-foot, generating about $1.3 million in value. In contrast, the Santa Paula Basin water rights are significantly more valuable, with opportunities to monetize these rights for urban needs.

Q: Can you discuss the strategic shift from lemons to avocados and the expected economic impact? A: Harold Edwards and Mark Palamountain, CFO, detailed that Limoneira is expanding avocado production by 1,000 acres, with 1,300 acres already planted. The company expects to achieve 15,000 to 20,000 pounds per acre, significantly increasing production compared to historical levels. The cost to farm avocados is about $5,000 per acre, with expected operating profit between $15,000 and $20,000 per acre, making avocados more profitable than lemons.

Q: What are the expected fresh lemon volumes for fiscal year 2025, and what factors contribute to this target? A: Mark Palamountain stated that Limoneira targets 5 million to 5.5 million cartons of fresh lemons for fiscal year 2025. The increase is driven by improved fresh utilization rates, increased penetration in quick service and food service channels, and recruiting additional volume from third-party growers.

Q: What is the status of the real estate joint venture and future distributions? A: Harold Edwards mentioned that the joint venture is in a strong position, having terminated its revolving line of credit and self-funding its working capital and CapEx. The next distribution timing is uncertain, but the partnership is well-positioned financially, with significant cash reserves and no debt.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.