• Total Net Revenue: $34.3 million, down from $39.7 million in the previous year.
• Agribusiness Revenue: $32.9 million, compared to $38.3 million last year.
• Other Operations Revenue: $1.5 million, up from $1.4 million last year.
• Fresh Packed Lemon Sales: $21.2 million, down from $23.9 million last year.
• Average Price per Lemon Carton: $18.44, compared to $21.06 last year.
• Avocado Revenue: $162,000, with no revenue in the same period last year.
• Average Price per Pound of Avocados: $2.25.
• Orange Revenue: $1.6 million, up from $1.1 million last year.
• Specialty Citrus and Wine Grape Revenue: $0.5 million, down from $1.1 million last year.
• Farm Management Revenues: $1.2 million, down from $2 million last year.
• Total Costs and Expenses: Decreased by 16% to $39.7 million from $47.5 million last year.
• Operating Loss: Improved to $5.3 million from $7.7 million last year.
• Net Loss Applicable to Common Stock: $3.2 million, compared to $3.7 million last year.
• Net Loss per Diluted Share: $0.18, compared to $0.21 last year.
• Adjusted Net Loss per Diluted Share: $0.14, compared to $0.18 last year.
• Adjusted EBITDA: Improved to a loss of $2.3 million from a loss of $4.8 million last year.
• Gain on Sales of Water Rights: $1.5 million.
• Long-term Debt: $57.9 million as of January 31, 2025, compared to $40 million at the end of fiscal year 2024.
• Net Debt Position: $56.8 million at quarter end.

• Warning! GuruFocus has detected 3 Warning Signs with AEYE.

Release Date: March 12, 2025

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

Positive Points

• Limoneira Co (NASDAQ:LMNR) is unlocking significant shareholder value through transformative land use conversion and water monetization.
• The company achieved improved operating expenses efficiency and enhanced bottom line performance despite a temporary oversupplied lemon market.
• Expansion of avocado production and growing citrus business through multiple channels has enhanced long-term operational and financial outlook.
• The company recorded avocado revenue this quarter, which was not present in the comparable period last year, contributing positively to the financial results.
• Limoneira Co (NASDAQ:LMNR) successfully monetized water rights alongside certain real estate assets, with further opportunities expected in fiscal year 2025.

Negative Points

• Total net revenue for the first quarter of fiscal year 2025 decreased to $34.3 million from $39.7 million in the previous fiscal year.
• Agribusiness revenue declined due to a temporarily oversupplied lemon market, placing downward pressure on prices.
• Farm management revenues decreased in the first quarter of fiscal year 2025 due to weather and crop conditions.
• The company experienced a net loss applicable to common stock of $3.2 million for the first quarter of fiscal year 2025.
• Adjusted EBITDA for the first quarter of fiscal year 2025 was a loss of $2.3 million, although improved from the previous year.

Q & A Highlights

Q: Can you provide more context on the recent water rights transaction and why 55 acre feet was the chosen amount? A: Harold Edwards, President and CEO, explained that the transaction was opportunistic, driven by demand at the benchmark value of $30,000 per acre foot. The sales involved two different buyers, one for development and another for agriculture. Limoneira owns approximately 9,500 acre feet in the basin, and more transactions are expected in 2025, including long-term water leases at municipal rates.

Q: Are there additional water rights transactions expected this fiscal year, and are they with existing or new partners? A: Harold Edwards confirmed that additional transactions are anticipated, involving both existing partners and new opportunities. Limoneira is also exploring the creation of a water utility to manage and provide water services to its agricultural and residential assets.

Q: Regarding avocado expansion, how much more acreage can be feasibly converted to avocado production, and are other growers in California doing the same? A: Mark Palamountain, CFO, stated that Limoneira could potentially expand by an additional 250 to 500 acres beyond the 2,000 already designated. The Ventura and Santa Barbara counties are ideal due to reliable water sources and suitable temperatures. Other growers are also converting lemon acreage to avocados, but nursery stock availability is a limiting factor.

Q: What are the challenges and opportunities in expanding avocado production given the current market conditions? A: Harold Edwards noted that while there is interest in expanding avocado production, challenges include temperature suitability and limited nursery stock. Despite these challenges, Limoneira's strategic location and reliable water supply provide a competitive advantage.

Q: How does the current market pressure on lemons affect Limoneira's strategy and operations? A: Harold Edwards highlighted that the company is diversifying its revenue streams beyond lemons, focusing on avocados and other citrus, and leveraging asset monetization to mitigate market volatility. The strategic shift aims to enhance long-term shareholder value.

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