Limoneira Company (LMNR) H2 2014 earnings summary

Executive summary

• FY2014 set records: revenue $103.5M, up 22% YoY; net income $7.0M, up 41%; diluted EPS $0.46 vs. $0.36.

• Strong lemon pricing drove results amid constrained global supply; 2.9M cartons were sold, with average fresh-lemon price of $24.07 per carton vs. $16.61 in FY2013.

• Operating cash flow rose to $15.7M from $5.5M; strategic investment continued in packing capacity, workforce housing, citrus acreage and international operations.

Financial highlights

• Total revenue was $103.462M vs. $84.884M in FY2013; operating income was $9.893M vs. $5.398M.

• Net income was $6.991M, including a $3.573M income-tax provision; net income applicable to common stock was $6.531M.

• Adjusted EBITDA, excluding real estate impairment charges, was $14.455M vs. $9.967M; EBITDA was $14.020M vs. $9.872M.

• Operating cash flow was $15.652M vs. $5.490M; investing cash use was $28.183M and financing cash provided was $12.541M.

• Total assets increased to $247.638M from $209.914M; long-term debt, including current portion, rose to $68.354M from $62.132M.

Outlook and guidance

• FY2015 lemon sales forecast: 3.2M–3.4M cartons at an average $22.00 per carton; avocado production estimate reduced to 7.0M pounds at $1.00 per pound after cold temperatures.

• Orange volume expected to be similar to FY2014, but lower pricing is expected to reduce operating profit; FY2015 EPS forecast is $0.42–$0.46.

• Lemon packinghouse modernization and 71 workforce rental units were expected to be completed in 2015; housing was projected to add $0.9M annual rental revenue when fully occupied.

• Planned 2015 growth includes planting 200 lemon acres at Cadiz and 120 wine-grape acres at Windfall Farms; East Area 1 groundbreaking was targeted for 2015, subject to approvals and market conditions.