Limoneira Company (LMNR) H2 2008 earnings summary

Executive summary

• FY08 was a record operating-profit year, led by exceptional lemon results; East Area 1 gained voter approval, and solar installations expanded sustainable power generation.

• Operating profit, as defined in the report, reached $20.339 million, up 8% YoY; 2009 operating profit was forecast to decline significantly from the exceptional FY08 level.

Financial highlights

• Revenue was $39.053 million in FY08 versus $34.440 million in FY07; net income was $3.647 million versus $2.307 million.

• Income from continuing operations was $3.899 million versus $2.552 million; net income applicable to common stock was $3.385 million versus $2.045 million.

• Operating profit was $20.339 million versus $18.851 million, including $18.311 million from agribusiness versus $15.826 million.

• Cash provided by operating activities was $6.945 million versus $9.638 million; capital expenditures were $29.206 million versus $8.919 million.

Outlook and guidance

• FY09 operating profit and pretax earnings were expected to decline significantly from FY08; operating cash flow was also projected lower.

• Lemon prices were expected to return toward pre-2007 levels, reducing lemon profit; the avocado crop could be below 1 million pounds and may not break even.

• Orange operating profit was forecast above FY08’s $555,000, with specialty crops also expected to exceed FY08 levels; housing and commercial profit was forecast to rise modestly.

• Austerity measures targeted lower overhead, primarily through reduced real-estate entitlement spending and performance-based compensation.