Limoneira Company (LMNR) H2 2010 earnings summary

Executive summary

• FY2010 revenue rose 56% YoY to $54.284M; operating income was $3.123M versus a $7.504M loss in FY2009, and net income was $323K versus a $2.877M loss.

• Nasdaq listing began May 27, 2010; direct lemon marketing began Nov. 1, 2010 after ending the Sunkist license.

Financial highlights

• FY2010 agriculture revenue increased 52% to $47.034M, driven by higher lemon, avocado, orange and specialty-crop revenue.

• Lemon revenue rose 26% to $28.2M on 1.4M cartons sold at $18.93/carton; avocado revenue rose to $11.5M as volume increased to 17.7M pounds, despite a lower average price of $0.65/lb.

• Q4 FY2010 revenue was $12.483M; operating loss was $2.115M, net loss $3.132M and diluted EPS -$0.14.

• Adjusted EBITDA, excluding real estate impairment charges, was $8.629M, up from $4.050M in FY2009; reported net income was $323K.

Outlook and guidance

• FY2011 cash flows from agriculture and rental operations plus available credit were expected to cover capital expenditures, debt service, working capital and other obligations.

• Lemon fresh-market utilization was expected to increase to 75%-80% under direct sales; U.S. lemon production was forecast to rise 10% in 2011, potentially pressuring prices.

• FY2011 avocado production was expected to decline from FY2010; higher prices were anticipated based on expected lower supply and growing demand.

• Real estate development remained cautious and patient amid weak market conditions; development timing and external capital needs remained difficult to predict.