Limoneira Company (LMNR) H2 2019 earnings summary

Executive summary

• FY19 revenue reached a record $171.4M, up 32% YoY, but adverse weather across lemons, oranges and avocados drove a $5.9M attributable net loss.

• FY20 outlook called for record EBITDA, supported by improved crop conditions, ~75% year-to-date lemon fresh utilization and stronger expected performance across citrus and avocados.

Financial highlights

• Revenue was $171.4M vs. $129.4M in FY18; operating loss was $5.5M vs. operating income of $9.5M.

• Net loss attributable to shareholders was $5.9M; basic and diluted EPS were both $(0.37), compared with $20.2M net income and $1.26 basic EPS in FY18.

• Agribusiness revenue increased 34% to $166.5M; costs and expenses rose 55% to $152.4M, pressuring operating results.

• Operating cash flow was $1.4M vs. $18.4M in FY18; net cash used in investing was $23.7M and net cash from financing was $22.4M.

• EBITDA was $3.7M and adjusted EBITDA was $1.9M; adjusted measure excludes specified investment, property-sale and impairment items.

Outlook and guidance

• FY20 guidance targeted record EBITDA and global fresh lemon sales of 7.5M–9.5M cartons, including 5M–6M cartons domestically.

• Expected lemon supply mix was 45% internally produced and 55% from affiliated outside growers.

• FY20 outlook anticipated a normalized avocado crop, strong orange and specialty citrus export movement, and solid lemon-packing results.

• Preliminary lemon fresh utilization averaged ~75% year to date; inventory averaged 2.5 weeks before shipment.

• Planned irrigation improvements for FY20 included new wells and upgrades to existing wells and irrigation systems.