Limoneira Company (LMNR) H2 2020 earnings summary

Executive summary

• COVID-19 sharply reduced lemon export and foodservice demand, driving oversupply, lower prices and disappointing agribusiness results; record global lemon sales volume reached 7 million 40-lb cartons.

• Strong orange and avocado demand and rapidly accelerating Harvest at Limoneira home sales partly offset the pressure on the core lemon business.

• FY20 ended with a $19.0 million operating loss and $16.4 million net loss attributable to shareholders, versus losses of $5.5 million and $5.9 million, respectively, in FY19.

Financial highlights

• Revenue was $164.6 million, down from $171.4 million in FY19; agribusiness revenue declined 4% to $159.9 million.

• Operating loss was $19.0 million; net loss was $17.9 million and net loss attributable to shareholders was $16.4 million.

• Fresh lemon sales were $101.1 million on 5.5 million cartons at $18.32/carton, versus $110.1 million on 5.2 million cartons at $21.00/carton in FY19.

• Adjusted EBITDA was $(6.7) million, excluding Calavo stock loss, joint venture equity earnings, property sale/disposal results and real estate impairment where applicable.

• Operating cash flow was $(11.3) million versus $1.4 million in FY19; investing cash flow was $3.8 million and financing cash flow was $7.4 million.

Outlook and guidance

• Management expected improvement in FY21, particularly as restaurants and bars reopened, while warning that the scale and duration of pandemic effects remained uncertain.

• Management expected 1,200 non-bearing lemon acres to become fully bearing over four years, adding 900,000–1.2 million cartons by 2024.

• The East Area I joint venture closed 44 additional residential lots in FY21 Q1; management anticipated more lot sales in 2021 than in 2020.

• Cash flows and available credit were expected to cover FY21 capital expenditures, debt service, working capital and other obligations.