Limoneira Company (LMNR) Q3 2024 earnings summary

Executive summary

• Net revenues for Q3 2024 increased 21% year-over-year to $63.3 million, driven by strong pricing and volume in fresh lemons and avocados, with adjusted EBITDA of $13.8 million and net income of $6.6 million, reversing a prior year loss.

• Growth was fueled by record avocado sales, improved fresh lemon pricing, and robust demand, leading to a 50% increase in avocado volume guidance.

• The Harvest at Limoneira real estate joint venture closed 554 homesites, increasing entitled lots to 2,050 and raising future cash flow projections by 46%, with $180 million expected over seven years.

• The company is pursuing a strategic shift to an asset-lighter model and continues to evaluate strategic alternatives, including a potential sale or merger.

Financial highlights

• Q3 net revenue rose 21% to $63.3 million from $52.5 million year-over-year, with agribusiness revenue at $61.8 million and other operations at $1.5 million.

• Avocado revenue surged to $13.9 million from $3.5 million, with 8.9 million pounds sold at $1.57/lb versus 2.8 million pounds at $0.99/lb last year.

• Operating income was $9 million, reversing a $1.5 million loss; net income was $6.5 million, up from a $1.3 million loss.

• Adjusted EBITDA was $13.8 million, up from $2.8 million; adjusted net income per diluted share was $0.42, up from $0.02.

• Cash flow from operations for the nine months ended July 31, 2024 was $11.3 million, compared to $(12.6) million in the prior year.

Outlook and guidance

• Avocado volume guidance for FY2024 raised to 14.5–15.5 million pounds, over 50% higher than prior guidance.

• Fresh lemon volume guidance lowered to 4.5–5 million cartons due to late season rains.

• Harvest at Limoneira JV expected to provide $180 million in proceeds over the next seven years.

• FY2025 avocado volume expected to be lower due to alternate bearing, with pricing likely slightly lower.

• Management expects continued volatility in export demand due to lingering COVID-19 impacts and global supply chain disruptions.