Limoneira Company (LMNR) H2 2006 earnings summary

Executive summary

• FY06 was the strongest financial and operating year in 113 years, with record agribusiness results and growing real estate, housing, and investment income.

• Diversification reduced reliance on agriculture, while the January 2007 freeze materially weakened the FY07 outlook.

Financial highlights

• Revenue was $36.558M vs. $27.643M in FY05; operating profit reached $14.5M, up 41% YoY.

• Income from continuing operations before tax was $6.552M, up 119% YoY; net income was $3.486M, including a $929K loss from discontinued operations.

• Net income applicable to common stock was $3.224M; diluted EPS was $2.84, including $3.66 from continuing operations and a $0.82 loss from discontinued operations.

• Cash flow from operations was $8.228M; capital expenditures were $4.936M.

Outlook and guidance

• After the freeze, agribusiness operating profit was forecast down 36% vs. plan and 50% vs. FY06; total operating profit was forecast down 20% vs. plan.

• Preliminary earnings before tax were forecast down 55% vs. plan and FY06; another estimate put earnings at 45% of plan and 45% of FY06.

• Crop insurance and expected price increases from the smaller California crop were expected to offset part of the freeze impact; profitability and cash flows were still anticipated.