- First Quarter 2017 Lemon Sales Increase 19% to $26 Million Compared
to Prior Year -
- Company Raises Fiscal Year 2017 Earnings Guidance Range -
SANTA PAULA, Calif.--(BUSINESS WIRE)--
Limoneira Company (the "Company" or "Limoneira") (NASDAQ: LMNR), a
leading global agribusiness with prime agricultural land and operations,
real estate and water rights in California, Arizona and Chile, today
reported financial results for the first quarter ended January 31, 2017.
Fiscal Year 2017 First Quarter Results
For the first quarter of fiscal year 2017, revenue increased 12% to
$28.1 million, compared to revenue of $25.0 million in the first quarter
of the previous fiscal year. Agribusiness revenue was $26.8 million,
compared to $23.6 million in the first quarter last year, primarily due
to stronger lemon sales. Rental operations revenue was $1.3 million in
the first quarter of fiscal year 2017, which compared to $1.4 million in
last year's first quarter. There were no real estate development
revenues in the first quarter of fiscal year 2017 or 2016.
Agribusiness revenue for the first quarter of fiscal year 2017 includes
$26.0 million in lemon sales, compared to $21.9 million of lemon sales
during the same period of fiscal year 2016, with the increase primarily
the result of higher volume of fresh lemons sold partially offset by
lower prices compared to the same period in fiscal year 2016.
Approximately 909,000 cartons of fresh lemons were sold during the first
quarter of fiscal year 2017 at a $23.10 average price per carton
compared to approximately 753,000 cartons sold at a $23.46 average price
per carton during the first quarter of fiscal year 2016. As anticipated
due to the seasonality of the avocado crop, the Company recognized no
avocado revenue in the first quarter of fiscal year 2017, compared to
minimal revenues in last year's first quarter. The Company recognized
$0.5 million of orange revenue in the first quarter of fiscal year 2017,
compared to $1.0 million in the same period of fiscal year 2016, due
largely to the increased rainfall which curtailed the available
harvesting days in January. Specialty citrus and other crop revenues
were similarly impacted by the rainfall and delayed harvest, resulting
in revenues of $0.3 million in the first quarter of fiscal year 2017,
compared to $0.7 million in the first quarter of fiscal year 2016.
Costs and expenses for the first quarter of fiscal year 2017 were
similar to the prior year period at $31.3 million. Slight increases in
agribusiness costs were offset by a decrease in real estate development
costs during the quarter.
Operating loss for the first quarter of fiscal year 2017 improved to
$3.2 million, compared to a $6.3 million loss in the first quarter of
the previous fiscal year. Net loss applicable to common stock, after
preferred dividends, for the first quarter of fiscal year 2017 was $2.2
million and compares to a net loss applicable to common stock of $4.1
million in the first quarter of fiscal year 2016. Net loss per diluted
share for the first quarter of fiscal year 2017 was $0.16 compared to a
net loss per diluted share of $0.29 for the same period of fiscal year
2016, with both periods based on approximately 14.2 million weighted
average diluted common shares outstanding.
EBITDA was negative $1.3 million in the first quarter of fiscal year
2017 compared to negative $4.7 million in the same period of fiscal year
2016. A reconciliation of EBITDA to net income is provided at the end of
this release.
Balance Sheet and Liquidity
During the first quarter of fiscal year 2017, net cash used by operating
activities was $4.3 million, compared to a $5.4 million use in the prior
year. Net cash used in investing activities was $6.8 million, compared
to a $3.0 million use in the prior year. The Company contributed $4.5
million to the East Area 1 real estate development joint venture in the
first quarter of fiscal year 2017 and no contributions were made to the
joint venture in the first quarter of fiscal year 2016.
Long-term debt as of January 31, 2017 was $100.6 million, compared to
$88.2 million at the end of fiscal 2016.
Real Estate Development
Limoneira Lewis Community Builders, LLC, is a 50%/50% real estate
development joint venture between Limoneira Company and The Lewis Group
of Companies that will engage in the residential development of Harvest
at Limoneira. Limoneira expects to receive 25% to 80% of the net cash
flows from the project, based on projected cash flow milestones, which
are estimated to aggregate approximately 70% of total net cash flows to
Limoneira, and the balance of net cash flows to The Lewis Group over the
estimated seven to ten-year life of the project. The joint venture's
results of operations are expected to be recognized by the Company under
the equity method of accounting. The Company contributed $2.3 million to
the joint venture in fiscal year 2016 and an additional $4.5 million in
the first quarter of fiscal year 2017 matching Lewis' contributions to
fund on-going development activities. The Company currently estimates
approximately 632 units will be included in Phase 1 of the project. Tree
removal and other site preparation activities are in process. Current
project plans indicate that grading should begin during the spring of
2017, Phase 1 site improvements to begin during the summer of 2017 and
initial lots sales are anticipated to begin near the end of 2017.
Management Comments
Harold Edwards, President and Chief Executive Officer, stated, "We
achieved record lemon sales for the first quarter of fiscal 2017 and the
efficiencies from our recently completed packing facility also benefited
our first quarter results. Over the past few years, we have made many
strategic investments including the purchase of additional citrus
acreage, expansion of our One World of Citrus™ marketing program
and increased partner relationships throughout the world which are
enabling us to expand our share of the global citrus market."
Mr. Edwards concluded, "As we enter the second quarter of fiscal 2017,
we are excited about the drivers of our top and bottom line growth.
These drivers include anticipated increase in avocado pricing and better
than expected lemon revenues. Based on our first quarter results and an
improved outlook for the year, we are raising our full year fiscal 2017
earnings guidance."
Recent Business Highlights
On February 24, 2017, the Company completed the acquisition of 90% of
the outstanding stock of Pan de Azucar S.A ("PDA"), a privately owned
Chilean corporation, for $5.8 million in cash. PDA also had
approximately $1.7 million in long term debt on the acquisition date,
which was assumed in the acquisition. A holdback of 10% of the purchase
proceeds to be paid to the seller was withheld for a six-month period to
allow for potential contingencies as defined in the purchase agreement.
PDA is a 210-acre lemon and orange orchard located near La Serena,
Chile. PDA's total assets of approximately $5.5 million on the
acquisition date include a 13% equity interest in Rosales, S.A,
("Rosales") in which Limoneira owns a 35% equity investment. Upon
completion of the acquisition, the Company will own 48% of Rosales and
PDA's remaining 10% stockholder will own the balance of Rosales, or 52%.
Rosales packs and sells all of PDA's citrus production. PDA had
approximately $0.4 million of net income on approximately $1.9 million
in sales for the year ended December 31, 2016. The results of operations
of PDA will be included in the Company's consolidated results of
operations from the acquisition date.
Alex Teague, Senior Vice President, stated, "The acquisition of PDA that
we announced on February 27th marks an important expansion of our
international business. The coastal growing region near La Serena, Chile
is a major citrus production area and the acquisition positions us to
execute on our long-term strategy to expand our agribusiness
internationally as a year round supplier of citrus, complementing
our One World Of Citrus™ strategy. Similar to other new acreage that
Limoneira has recently planted in the United States, PDA's orchards are
also young and beginning to enter their prime production, making our
combined business well suited to address increasing global demand in the
years to come."
Raising Fiscal Year 2017 Outlook
Based on improved total lemon revenues for the first quarter of fiscal
year 2017, and a positive pricing outlook for avocados, the Company is
raising its earnings guidance range for the fiscal year ending October
31, 2017. The Company currently expects earnings per diluted share to be
in the range of $0.48 to $0.52 per share compared to its previous
guidance range of $0.38 to $0.42 per diluted share. The Company expects
operating income for fiscal year 2017 to be in a range of approximately
$14.4 million to $14.9 million compared to the previous range of $11.4
million to $11.9 million. Fiscal year 2017 EBITDA is expected to be in
the range of $21.5 million to $22.0 million compared to the previous
range of $18.3 million to $18.8 million. As more fully described at the
end of this release under "Non-GAAP Financial Measures," the Company is
unable to reconcile without unreasonable effort the forgoing
forward-looking non-GAAP measures related to EBITDA, and the variability
of the changes excluded from these non-GAAP measures may have a
significant and potentially unpredictable impact on its future GAAP
financial results. The Company continues to expect to sell between 3.1
million and 3.5 million cartons of fresh lemons at an average price per
carton of approximately $23.00, however it anticipates total lemon
revenues, which includes sales of fresh cartons, lemon by-products and
shipping and handling revenue to be higher than previously estimated. In
addition, the Company continues to expect to sell approximately 8.5
million to 9.0 million pounds of avocados, but currently estimates an
average price per pound of $1.00 compared to previous expectations of
$0.80 per pound.
Conference Call Information
The Company will host a conference call and audio webcast on March 13,
2017, at 1:30 pm Pacific Time (4:30 pm Eastern Time) to discuss its
financial results. To access the conference call, participants in the
U.S. should dial (888) 820-9416 and international participants should
dial (913) 312-0398. Participants are encouraged to dial in to the
conference call ten minutes prior to the scheduled start time. The call
will also be broadcast live over the Internet and accessible through the
Investor Relations section of the Company's website at www.limoneira.com. Visitors
to the website should select the "Investor" link to access the
webcast. The webcast will be archived and accessible on the same website
for 30 days following the call. A telephone replay will be available
through March 27, 2017, by calling (844) 512-2921 from the U.S. or (412)
317-6671 from international locations to access the playback; passcode
is 8581572.
About Limoneira Company
Limoneira Company, a 124-year-old international agribusiness
headquartered in Santa Paula, California, has grown to become one of the
premier integrated agribusinesses in the world. Limoneira (pronounced lē
mon΄âra) is a dedicated sustainability company with over 11,000 acres of
rich agricultural lands, real estate properties, and water rights
in California, Arizona and Chile. The Company is a leading producer of
lemons, avocados, oranges, specialty citrus and other crops that are
enjoyed throughout the world. For more about Limoneira Company, visit www.limoneira.com.
Forward-Looking Statements
This press release contains forward-looking statements, including
earnings guidance for fiscal year 2017, within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These
forward-looking statements are based on Limoneira's current expectations
about future events and can be identified by terms such as "expect,"
"may," "anticipate," "intend," "should be," "will be," "is likely to,"
"strive to," and similar expressions referring to future periods.
Limoneira believes the expectations reflected in the forward-looking
statements are reasonable but cannot guarantee future results, level of
activity, performance or achievements. Actual results may differ
materially from those expressed or implied in the forward-looking
statements. Therefore, Limoneira cautions you against relying on
any of these forward-looking statements. Factors which may cause future
outcomes to differ materially from those foreseen in forward-looking
statements include, but are not limited to: changes in laws,
regulations, rules, quotas, tariffs and import laws; weather conditions
that affect production, transportation, storage, import and export of
fresh product; increased pressure from crop disease, insects and other
pests; disruption of water supplies or changes in water allocations;
pricing and supply of raw materials and products; market responses to
industry volume pressures; pricing and supply of energy; changes in
interest and currency exchange rates; availability of financing for land
development activities; political changes and economic crises;
international conflict; acts of terrorism; labor disruptions, strikes or
work stoppages; loss of important intellectual property rights;
inability to pay debt obligations; inability to engage in certain
transactions due to restrictive covenants in debt instruments;
government restrictions on land use; and market and pricing risks due to
concentrated ownership of stock. Other risks and uncertainties
include those that are described in Limoneira's SEC filings which are
available on the SEC's website at http://www.sec.gov.
Limoneira undertakes no obligation to subsequently update or revise
the forward-looking statements made in this press release, except as
required by law.
Non-GAAP Financial Measures
Due to significant depreciable assets associated with the nature of the
Company's operations and interest costs associated with its capital
structure, management believes that earnings before interest, income
taxes, depreciation and amortization ("EBITDA") and adjusted EBITDA,
which excludes impairments on real estate development assets when
applicable, is an important measure to evaluate the Company's results of
operations between periods on a more comparable basis. Such measurements
are not prepared in accordance with U.S. generally accepted accounting
principles ("GAAP"), and should not be construed as an alternative to
reported results determined in accordance with GAAP. The non-GAAP
information provided is unique to the Company and may not be consistent
with methodologies used by other companies. With respect to our
expectations under "Raising Fiscal Year 2017 Outlook" above, the Company
has not provided a reconciliation of forward-looking non-GAAP measures,
primarily due to variability and difficulty in making accurate forecasts
and projections, as not all of the information necessary for a
quantitative reconciliation is available to the Company without
unreasonable efforts. EBITDA and adjusted EBITDA is summarized and
reconciled to net income, which management considers to be the most
directly comparable financial measure calculated and presented in
accordance with GAAP as follows:
|
|
|
|
|
|
|
|
|
|
Three months ended January 31,
|
|
|
|
2017
|
|
|
2016
|
|
Net loss
|
|
$
|
(2,072,000
|
)
|
|
|
$
|
(3,912,000
|
)
|
|
Interest expense, net
|
|
|
434,000
|
|
|
|
|
219,000
|
|
|
Income tax benefit
|
|
|
(1,240,000
|
)
|
|
|
|
(2,167,000
|
)
|
|
Depreciation and amortization
|
|
|
1,577,000
|
|
|
|
|
1,128,000
|
|
|
EBITDA
|
|
$
|
(1,301,000
|
)
|
|
|
$
|
(4,732,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Limoneira Company
|
|
|
|
Consolidated Balance Sheets (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
January 31,
2017
|
|
|
October 31,
2016
|
|
Assets
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
Cash
|
|
$
|
69,000
|
|
|
$
|
38,000
|
|
Accounts receivable, net
|
|
|
8,819,000
|
|
|
|
9,298,000
|
|
Cultural costs
|
|
|
1,665,000
|
|
|
|
3,844,000
|
|
Prepaid expenses and other current assets
|
|
|
3,197,000
|
|
|
|
2,509,000
|
|
Income taxes receivable
|
|
|
4,048,000
|
|
|
|
2,810,000
|
|
Total current assets
|
|
|
17,798,000
|
|
|
|
18,499,000
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net
|
|
|
177,750,000
|
|
|
|
177,096,000
|
|
Real estate development
|
|
|
79,332,000
|
|
|
|
77,136,000
|
|
Equity in investments
|
|
|
10,778,000
|
|
|
|
6,254,000
|
|
Investment in Calavo Growers, Inc.
|
|
|
16,590,000
|
|
|
|
17,745,000
|
|
Other assets
|
|
|
8,918,000
|
|
|
|
8,718,000
|
|
Total Assets
|
|
$
|
311,166,000
|
|
|
$
|
305,448,000
|
|
|
|
|
|
|
|
|
|
|
Liabilities and stockholders' equity
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
5,435,000
|
|
|
$
|
5,555,000
|
|
Growers payable
|
|
|
7,000,000
|
|
|
|
8,577,000
|
|
Accrued liabilities
|
|
|
3,500,000
|
|
|
|
6,421,000
|
|
Fair value of derivative instrument
|
|
|
593,000
|
|
|
|
690,000
|
|
Current portion of long-term debt
|
|
|
2,513,000
|
|
|
|
2,508,000
|
|
Total current liabilities
|
|
|
19,041,000
|
|
|
|
23,751,000
|
|
Long-term liabilities:
|
|
|
|
|
|
|
|
|
Long-term debt, less current portion
|
|
|
100,564,000
|
|
|
|
88,164,000
|
|
Deferred income taxes
|
|
|
25,083,000
|
|
|
|
25,328,000
|
|
Other long-term liabilities
|
|
|
5,649,000
|
|
|
|
6,127,000
|
|
Sale-leaseback deferral
|
|
|
25,182,000
|
|
|
|
23,349,000
|
|
Total liabilities
|
|
|
175,519,000
|
|
|
|
166,719,000
|
|
Commitments and contingencies
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Series B Convertible Preferred Stock - $100.00 par value (50,000
shares authorized: 28,285 and 29,000 shares issued and outstanding
at January 31, 2017 and October 31, 2016) (8.75% coupon rate)
|
|
|
2,829,000
|
|
|
|
2,900,000
|
|
|
|
|
|
|
|
|
|
|
Series B-2 Convertible Preferred Stock - $100.00 par value (10,000
shares authorized: 9,300 shares issued and outstanding at January
31, 2017 and October 31, 2016) (4% dividend rate on liquidation
value of $1,000 per share)
|
|
|
9,331,000
|
|
|
|
9,331,000
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity:
|
|
|
|
|
|
|
|
|
Series A Junior Participating Preferred Stock - $.01 par value
(20,000 shares authorized: zero issued or outstanding at January 31,
2017 and October 31, 2016)
|
|
|
-
|
|
|
|
-
|
|
Common Stock - $.01 par value (19,900,000 shares authorized:
14,236,344 and 14,178,226 shares issued and outstanding at January
31, 2017 and October 31, 2016, respectively)
|
|
|
142,000
|
|
|
|
142,000
|
|
Additional paid-in capital
|
|
|
92,205,000
|
|
|
|
91,841,000
|
|
Retained earnings
|
|
|
28,804,000
|
|
|
|
31,812,000
|
|
Accumulated other comprehensive income
|
|
|
2,336,000
|
|
|
|
2,703,000
|
|
Total stockholders' equity
|
|
|
123,487,000
|
|
|
|
126,498,000
|
|
Total Liabilities and Stockholders' Equity
|
|
$
|
311,166,000
|
|
|
$
|
305,448,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Limoneira Company
|
|
|
|
Consolidated Statements of Operations (unaudited)
|
|
|
|
|
|
|
|
Three months ended
January 31,
|
|
|
|
|
2017
|
|
|
|
2016
|
|
|
Net revenues:
|
|
|
|
|
|
|
|
|
|
Agribusiness
|
|
$
|
26,769,000
|
|
|
$
|
23,567,000
|
|
|
Rental operations
|
|
|
1,323,000
|
|
|
|
1,408,000
|
|
|
Real estate development
|
|
|
-
|
|
|
|
12,000
|
|
|
Total net revenues
|
|
|
28,092,000
|
|
|
|
24,987,000
|
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
Agribusiness
|
|
|
26,344,000
|
|
|
|
25,472,000
|
|
|
Rental operations
|
|
|
1,055,000
|
|
|
|
949,000
|
|
|
Real estate development
|
|
|
85,000
|
|
|
|
1,436,000
|
|
|
Selling, general and administrative
|
|
|
3,847,000
|
|
|
|
3,464,000
|
|
|
Total costs and expenses
|
|
|
31,331,000
|
|
|
|
31,321,000
|
|
|
Operating loss
|
|
|
(3,239,000
|
)
|
|
|
(6,334,000
|
)
|
|
Other income:
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
|
(434,000
|
)
|
|
|
(219,000
|
)
|
|
Equity in earnings of investments
|
|
|
74,000
|
|
|
|
114,000
|
|
|
Other income, net
|
|
|
287,000
|
|
|
|
360,000
|
|
|
Total other (loss) income
|
|
|
(73,000
|
)
|
|
|
255,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income tax benefit
|
|
|
(3,312,000
|
)
|
|
|
(6,079,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Income tax benefit
|
|
|
1,240,000
|
|
|
|
2,167,000
|
|
|
Net loss
|
|
|
(2,072,000
|
)
|
|
|
(3,912,000
|
)
|
|
Preferred dividends
|
|
|
(155,000
|
)
|
|
|
(158,000
|
)
|
|
Net loss applicable to common stock
|
|
$
|
(2,227,000
|
)
|
|
$
|
(4,070,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Basic net loss per common share
|
|
$
|
(0.16
|
)
|
|
$
|
(0.29
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net loss per common share
|
|
$
|
(0.16
|
)
|
|
$
|
(0.29
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Dividends per common share
|
|
$
|
0.06
|
|
|
$
|
0.05
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding-basic
|
|
|
14,202,000
|
|
|
|
14,148,000
|
|
|
Weighted-average common shares outstanding-diluted
|
|
|
14,202,000
|
|
|
|
14,148,000
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20170313006064/en/
Investor Contact:
ICR
John Mills
Partner
646-277-1254
Source: Limoneira Company
News Provided by Acquire Media
