SANTA PAULA, Calif.–(BUSINESS WIRE)–Limoneira Company BB #:168478, a diversified citrus packing, selling and marketing company with related agribusiness activities and real estate development operations, today reported financial results for the third quarter ended July 31, 2019.
Management Comments
Harold Edwards, President and Chief Executive Officer, stated, “Throughout the third quarter, we continued to face pricing headwinds due to larger than normal size fruit which resulted in low 50% fresh utilization and $18.00 price per carton. However, as we progress into the fourth quarter, we expect to achieve fresh utilization rates of 70% – 75% now that we are returning to a normal inventory of sizes and average price per carton has improved to approximately $21.50. For the full year of fiscal year 2019, we continue to expect to grow a tree crop of approximately 7.2 million domestic lemon cartons. Unfortunately, due to the lower fresh utilization rate during the third quarter, our lemons grown for fiscal year 2019 will not translate into our full year goal of fresh cartons sold.”
Mr. Edwards continued, “The weather events that affected the overall lemon and orange industry during the first nine months of this year offset the fact that we have achieved our grower retention goals and increased our market share. As we turn our sights to fiscal 2020, we are well positioned for a return to solid growth and improved profitability. Our Harvest at Limoneira real estate venture generated $2.6 million of equity earnings during the first nine months of this year and we are working with three of the leading homebuilders in the United States. Overall we continue to believe this venture will deliver approximately $100 million of cash flow over the estimated 7 to 10-year life of the project.”
Fiscal Year 2019 Third Quarter Results
For the third quarter of fiscal year 2019, total net revenue was $50.9 million, compared to total net revenue of $40.0 million in the third quarter of the previous fiscal year. Agribusiness revenue increased to $49.6 million, compared to $38.7 million in the third quarter last year, due to a higher lemon volume offset by lower fresh lemon prices and lower fresh utilization.
The lower pricing was due to continued effect of excessive rains in Southern California during the first and second quarters of fiscal year 2019 creating an overabundance of large fresh lemons, which created a decrease in lemon carton pricing. Rental operations revenue was flat versus the prior year period at $1.2 million in the third quarter of fiscal year 2019 and $1.3 million in the prior year period. There were no real estate development revenues in the third quarter of fiscal year 2019 or 2018.
Agribusiness revenue for the third quarter of fiscal year 2019 includes $46.4 million in lemon sales, compared to $30.7 million of lemon sales during the same period of fiscal year 2018, with the increase primarily the result of higher volume offset by lower prices of fresh lemons compared to the same period in fiscal year 2018.
Approximately 1,876,000 cartons of fresh lemons were sold during the third quarter of fiscal year 2019 at a $19.09 average price per carton compared to approximately 992,000 cartons sold at a $25.91 average price per carton during the third quarter of fiscal year 2018. Avocado revenue for the third quarter of fiscal year 2019 was $2.5 million, compared to $5.6 million in the same period last year, primarily the result of lower volume partially offset by higher prices compared to the same period in fiscal year 2018.
The Company recognized $0.7 million of orange revenue in the third quarter of fiscal year 2019, compared to $2.0 million in the same period of fiscal year 2018, primarily attributable to lower prices of oranges sold, partially offset by higher volume compared to the same period in fiscal year 2018. Specialty citrus and other crop had no revenue in the third quarter of fiscal year 2019, compared to $0.3 million in the third quarter of fiscal year 2018.
Total costs and expenses for the third quarter of fiscal year 2019 increased to $48.8 million, compared to $28.5 million in the third quarter of last fiscal year. The third quarter of fiscal year 2019 increase in operating expenses was primarily attributable to increases in agribusiness costs and expenses due to increased volume of lemons packed and increased selling, general and administrative costs. Costs associated with its agribusiness include in packing costs, harvest costs, growing costs, costs related to the fruit we procure and sell for third-party growers and depreciation expense.
Operating income for the third quarter of fiscal year 2019 decreased to $2.1 million, compared to income of $11.4 million in the third quarter of the previous fiscal year.
Fiscal Year 2019 First Nine Months Results
For the nine months ended July 31, 2019, revenue increased to $134.9 million, compared to $114.7 million in the same period last year. Operating loss for the first nine months of fiscal year 2019 was $(1.9) million, compared to operating income of $19.1 million in the same period last year.
Net loss applicable to common stock, after preferred dividends, was $(3.2) million for the first nine months of fiscal year 2019, compared to net income of $23.0 million in the same period last fiscal year. Net loss per diluted share for the first nine months of fiscal year 2019 was $(0.19), compared to a net income per diluted share of $1.50 in the same period of fiscal year 2018. Excluding the non-cash $2.1 million unrealized loss on stock in Calavo and $2.6 million equity in earnings of LLC for the first nine months of fiscal year 2019, adjusted net loss applicable to common stock was $(3.7) million or $(0.21) per share compared to adjusted net income of $13.4 million or $0.86 per share for the same period in fiscal year 2018, based on approximately 17.5 million and 15.6 million, respectively, weighted average diluted common shares outstanding.
Adjusted EBITDA for the first nine months of fiscal year 2019 was $4.1 million, compared to adjusted EBITDA of $24.6 million in the same period last year. A reconciliation of EBITDA to net income is provided at the end of this release.
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LIMONEIRA
John Chamberlain, 805-525-5541 ext. 1056
Director-Marketing
