- Second Quarter Revenue Increased 29% Compared to Second Quarter of
Last Year -
- Lemons Sales Increased 41% Compared to Second Quarter of Last Year -
- Executed on Agribusiness Growth Strategy with Agreements to Acquire
125 Acres of Agricultural Property in California -
- Expects Continued Growth in Fiscal Year 2012 Agribusiness Revenue
Resulting from Increase in Fresh Lemon Sales and Avocado Production -
SANTA PAULA, Calif.--(BUSINESS WIRE)--
Limoneira Company (NASDAQ: LMNR), a leading agribusiness with prime
agricultural land and operations, real estate and water rights in
California, today reported financial results for the second quarter and
six months ended April 30, 2012.
Fiscal Year 2012 Second Quarter Results
For the second quarter of fiscal year 2012, revenue was $16.1 million,
compared to revenue of $12.5 million in the second quarter of the
previous fiscal year. Agribusiness revenue increased 31% to $15.0
million, compared to $11.5 million in the second quarter last year.
Rental operations revenue was $1.0 million in the second quarter of
fiscal years 2012 and 2011. Real estate development revenue was $44,000,
compared to $51,000 in the second quarter last year.
Second quarter 2012 agribusiness revenue is primarily comprised of $12.4
million in lemon sales, compared to $8.8 million of lemon sales during
the same period of fiscal year 2011, reflecting a larger number of
cartons of fresh lemons sold as well as a higher average price per
carton. The Company also experienced higher sales of lemon by-products
compared to the same period last year. Avocado revenue in the second
quarter of fiscal year 2012 was $601,000 compared to $369,000 in the
second quarter last year. The Company expects that avocado sales will
continue to improve on a year-over-year basis in the coming quarters of
fiscal year 2012. The Company generated $2.0 million of orange,
specialty citrus and other crop revenues in the second quarter of fiscal
year 2012 compared to $2.3 million in the same period of fiscal year
2011 due primarily to lower sales volume and prices of specialty citrus
crops.
Costs and expenses for the second quarter of fiscal year 2012 were $15.0
million, compared to $14.1 million in the second quarter of last fiscal
year. The year-over-year increase in operating expenses reflects
increased agribusiness costs associated with the higher sales for this
segment and higher selling, general and administrative expenses,
partially offset by a decrease in impairments of real estate development
assets. The Company incurred a non-cash charge of $1.2 million
attributable to impairments of real estate development assets in the
second quarter of fiscal year 2011.
Operating income for the fiscal year 2012 second quarter was $1.1
million, compared to operating loss of $1.5 million in the second
quarter of the previous fiscal year.
Adjusted EBITDA (defined as net income excluding interest, income taxes,
depreciation and amortization, and non-cash impairment charges on real
estate development) in the second quarter of fiscal years 2012 and 2011
was $1.5 million. A reconciliation of Adjusted EBITDA to the GAAP
measure net income is provided at the end of this release.
As a result of a larger amount of capitalized interest and lower average
debt levels during the second quarter of fiscal year 2012, interest
expense was $71,000 compared to $268,000 in the same period of fiscal
year 2011. Additionally, non-cash fair value adjustments on the
Company's interest rate swap resulted in income of $196,000 in the
second quarter of fiscal year 2012 compared to income of $38,000 in the
same period of the prior year.
Net income applicable to common stock, after preferred dividends, for
the second quarter of fiscal year 2012 was $672,000, or $0.06 per share.
This compares to net loss applicable to common stock, after preferred
dividends, in the second quarter of fiscal year 2011 of $329,000, or
($0.03) per share.
Fiscal Year 2012 First Six Months Results
For the six months ended April 30, 2012, revenue was $26.3 million,
compared to $18.4 million in the same period last year. Operating loss
for the first six months of fiscal year 2012 was $3.6 million, compared
to an operating loss of $7.1 million in the same period last year. Net
loss applicable to common stock, after preferred dividends, for the
first six months of fiscal year 2012 was $2.2 million, or ($0.20) per
share, compared to a loss of $3.7 million, or ($0.33) per share, in the
same period last year.
Management Comments
Harold Edwards, President and Chief Executive Officer, stated, "We are
pleased with our second quarter financial results, as we achieved strong
top line growth of 29% and significantly improved our profitability on a
year-over-year basis. Our agribusiness revenue increased 31% in the
second quarter, driven by strong lemon sales due to more cartons sold
and higher prices. Our avocado sales also increased, and we expect to
generate significant revenue contribution from our avocado sales in the
third quarter when avocados experience peak seasonality."
Mr. Edwards continued, "In the second quarter, we achieved strong
revenue and earnings growth and entered into key agreements and
acquisitions that will benefit our business in coming quarters. We
recently announced two separate agreements to acquire an aggregate of
125 acres of agricultural property in the San Joaquin Valley of
California, which is strategically located near our existing orchards in
Porterville, California. Similar to our Sheldon lease agreement in the
first fiscal quarter, these acquisitions add to our portfolio of quality
citrus acreage. We look forward to continuing to capitalize on
selective, strategic acquisitions as the opportunities arise. In
addition, we entered into an agreement with Associated Citrus Packers of
Yuma, Arizona, to pack and market an estimated 850,000 cartons of lemons
to begin in the fourth quarter of this fiscal year. Regarding our real
estate development efforts, we continue to evaluate market conditions
and are committed to capitalizing on opportunities to monetize our real
estate portfolio at the appropriate time."
Balance Sheet and Liquidity
The Company had working capital of $1.2 million as of April 30, 2012.
Cash generated by operating activities in the second quarter of fiscal
year 2012 was $2.0 million, compared to $0.9 million in the second
quarter of fiscal year 2011. Seasonality in agriculture operations
results in corresponding quarterly fluctuations in operating cash flows.
As operating cash flows typically improve during the year, the Company
plans to apply such cash flows towards debt reduction and investments in
strategic objectives.
Real Estate Development
During the second quarter of fiscal year 2012, the Company continued to
execute its real estate development strategy by capitalizing development
costs of $654,000 compared to $1.5 million in the same period of fiscal
year 2011.
Recent Business Highlights
The Company continues to benefit from the success of its direct lemon
sales and marketing strategy. In the second quarter of fiscal year 2012,
lemon sales were comprised of approximately 75% to U.S. and Canada-based
customers and 25% to domestic exporters.
Alex Teague, Senior Vice President, stated, "Our direct lemon marketing
and sales strategy has now been implemented for over one year, and we
are extremely pleased with its success. In the second quarter, we sold
approximately 102,000 more fresh lemon cartons than the second quarter
of last year, and we are looking forward to continued growth throughout
this year."
In January 2012, the Company entered into a series of operating leases
for approximately 1,000 acres of lemon, orange, specialty citrus and
other crop orchards in Lindsay, California. Each of the leases is for a
ten-year term and provides for four five-year renewal options with an
aggregate base rent of approximately $500,000 per year. The leases also
contain a profit share arrangement with the landowners as additional
rent on each of the properties and a provision for the potential
purchase of the property by Limoneira in the future.
On March 22, 2012, the Company announced an agreement with Associated
Citrus Packers of Yuma, Arizona to pack and market lemons. Associated
Citrus Packers has historically packed approximately 850,000 cartons of
lemons grown on nearly 2,000 acres. Associated Citrus harvests and packs
lemons, Rio Red grapefruit, Mineola tangelos, Navel oranges, Blood
oranges and Valencia oranges. The commercial citrus harvesting and
packing season in Southwestern Arizona typically begins in late August
and is completed during the spring of the following year. This strategic
alliance will greatly enhance product and service for customers and
growers alike due to greater efficiencies that Limoneira's and
Associated Citrus Packers' combined efforts will provide.
In April 2012, the Company purchased land for use as a citrus orchard
and also entered into a separate agreement to acquire an additional
citrus orchard for purchase prices of $430,000 and $800,000,
respectively, paid or to be paid in cash. The acquisitions are for 60
and 65 acres of agricultural property, respectively, and both properties
are located in close proximity to the Company's existing orchards in
Porterville, California. The acquired citrus orchard was accounted for
as an asset purchase with substantially the entire purchase price
allocated to land and included in property, plant and equipment on the
Company's consolidated balance sheet at April 30, 2012. The second
acquisition was in escrow at April 30, 2012.
About Limoneira Company
Limoneira Company, a 119-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 approximately 7,850
acres of rich agricultural lands, real estate properties and water
rights in California. 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 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 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; increased costs from becoming a public company 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, 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. Unaudited EBITDA and
Adjusted EBITDA are 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:
|
|
|
Quarter ended April 30,
|
|
Six Months Ended April 30,
|
|
|
|
|
2012
|
|
|
|
2011
|
|
|
|
2012
|
|
|
|
2011
|
|
|
Net income (loss)
|
|
$
|
737,000
|
|
|
$
|
(264,000
|
)
|
|
$
|
(2,072,000
|
)
|
|
$
|
(3,591,000
|
)
|
|
Total interest (income) expense, net
|
|
|
(152,000
|
)
|
|
|
203,000
|
|
|
|
(161,000
|
)
|
|
|
51,000
|
|
|
Income taxes
|
|
|
385,000
|
|
|
|
(197,000
|
)
|
|
|
(1,195,000
|
)
|
|
|
(1,909,000
|
)
|
|
Depreciation and amortization
|
|
|
546,000
|
|
|
|
532,000
|
|
|
|
1,066,000
|
|
|
|
1,100,000
|
|
|
EBITDA
|
|
|
1,516,000
|
|
|
|
274,000
|
|
|
|
(2,362,000
|
)
|
|
|
(4,349,000
|
)
|
|
Impairments of real estate development assets
|
|
|
-
|
|
|
|
1,196,000
|
|
|
|
-
|
|
|
|
1,196,000
|
|
|
Adjusted EBITDA
|
|
$
|
1,516,000
|
|
|
$
|
1,470,000
|
|
|
$
|
(2,362,000
|
)
|
|
$
|
(3,153,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Limoneira Company
|
|
Consolidated Balance Sheets (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
April 30,
2012
|
|
|
October 31,
2011
|
|
|
Assets
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
Cash
|
|
$
|
16,000
|
|
|
$
|
21,000
|
|
|
Accounts receivable, net
|
|
|
7,062,000
|
|
|
|
2,410,000
|
|
|
Notes receivable — related parties
|
|
|
41,000
|
|
|
|
36,000
|
|
|
Notes receivable
|
|
|
-
|
|
|
|
350,000
|
|
|
Cultural costs
|
|
|
1,121,000
|
|
|
|
926,000
|
|
|
Prepaid expenses and other current assets
|
|
|
2,251,000
|
|
|
|
1,385,000
|
|
|
Income taxes receivable
|
|
|
2,119,000
|
|
|
|
1,324,000
|
|
|
Total current assets
|
|
|
12,610,000
|
|
|
|
6,452,000
|
|
|
Property, plant and equipment, net
|
|
|
50,024,000
|
|
|
|
49,187,000
|
|
|
Real estate development
|
|
|
74,418,000
|
|
|
|
72,623,000
|
|
|
Equity in investments
|
|
|
8,966,000
|
|
|
|
8,896,000
|
|
|
Investment in Calavo Growers, Inc.
|
|
|
19,072,000
|
|
|
|
15,009,000
|
|
|
Notes receivable — related parties
|
|
|
16,000
|
|
|
|
56,000
|
|
|
Notes receivable
|
|
|
2,412,000
|
|
|
|
2,123,000
|
|
|
Other assets
|
|
|
5,133,000
|
|
|
|
4,682,000
|
|
|
Total assets
|
|
$
|
172,651,000
|
|
|
$
|
159,028,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and stockholders' equity
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
3,408,000
|
|
|
$
|
2,650,000
|
|
|
Growers payable
|
|
|
4,435,000
|
|
|
|
1,004,000
|
|
|
Accrued liabilities
|
|
|
2,809,000
|
|
|
|
2,399,000
|
|
|
Current portion of long-term debt
|
|
|
748,000
|
|
|
|
736,000
|
|
|
Total current liabilities
|
|
|
11,400,000
|
|
|
|
6,789,000
|
|
|
Long-term liabilities:
|
|
|
|
|
|
|
|
|
|
Long-term debt, less current portion
|
|
|
89,972,000
|
|
|
|
82,135,000
|
|
|
Deferred income taxes
|
|
|
11,337,000
|
|
|
|
10,160,000
|
|
|
Other long-term liabilities
|
|
|
8,754,000
|
|
|
|
7,892,000
|
|
|
Total long-term liabilities
|
|
|
110,063,000
|
|
|
|
100,187,000
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
Stockholders' equity:
|
|
|
|
|
|
|
|
|
|
Series B Convertible Preferred Stock — $100.00 par value (50,000
shares authorized: 30,000 shares issued and outstanding at April
30, 2012 and October 31, 2011) (8.75% coupon rate)
|
|
|
3,000,000
|
|
|
|
3,000,000
|
|
|
Series A Junior Participating Preferred Stock — $.01 par value
(50,000 shares authorized: 0 issued or outstanding at April 30,
2012 and October 31, 2011)
|
|
|
-
|
|
|
|
-
|
|
|
Common Stock — $.01 par value (19,900,000 shares authorized:
|
|
|
|
|
|
|
|
|
|
11,196,745 and 11,205,241 shares issued and outstanding at April
30, 2012 and October 31, 2011, respectively)
|
|
|
112,000
|
|
|
|
112,000
|
|
|
Additional paid-in capital
|
|
|
35,121,000
|
|
|
|
34,863,000
|
|
|
Retained earnings
|
|
|
12,078,000
|
|
|
|
14,980,000
|
|
|
Accumulated other comprehensive income (loss)
|
|
|
877,000
|
|
|
|
(903,000
|
)
|
|
Total stockholders' equity
|
|
|
51,188,000
|
|
|
|
52,052,000
|
|
|
Total liabilities and stockholders' equity
|
|
$
|
172,651,000
|
|
|
$
|
159,028,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Limoneira Company
|
|
Consolidated Statements of Operations (unaudited)
|
|
|
|
|
|
|
|
|
|
Three months ended
April 30,
|
|
Six months ended
April 30,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2012
|
|
|
|
2011
|
|
|
|
2012
|
|
|
|
2011
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agribusiness
|
|
$
|
15,046,000
|
|
|
$
|
11,463,000
|
|
|
$
|
24,248,000
|
|
|
$
|
16,338,000
|
|
|
Rental operations
|
|
|
1,006,000
|
|
|
|
996,000
|
|
|
|
1,997,000
|
|
|
|
1,966,000
|
|
|
Real estate development
|
|
|
44,000
|
|
|
|
51,000
|
|
|
|
88,000
|
|
|
|
107,000
|
|
|
Total revenues
|
|
|
16,096,000
|
|
|
|
12,510,000
|
|
|
|
26,333,000
|
|
|
|
18,411,000
|
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agribusiness
|
|
|
11,680,000
|
|
|
|
9,740,000
|
|
|
|
23,070,000
|
|
|
|
17,378,000
|
|
|
Rental operations
|
|
|
530,000
|
|
|
|
532,000
|
|
|
|
1,098,000
|
|
|
|
1,092,000
|
|
|
Real estate development
|
|
|
241,000
|
|
|
|
367,000
|
|
|
|
489,000
|
|
|
|
657,000
|
|
|
Impairments of real estate development assets
|
|
|
-
|
|
|
|
1,196,000
|
|
|
|
-
|
|
|
|
1,196,000
|
|
|
Selling, general and administrative
|
|
|
2,513,000
|
|
|
|
2,220,000
|
|
|
|
5,284,000
|
|
|
|
5,170,000
|
|
|
Total costs and expenses
|
|
|
14,964,000
|
|
|
|
14,055,000
|
|
|
|
29,941,000
|
|
|
|
25,493,000
|
|
|
Operating income (loss)
|
|
|
1,132,000
|
|
|
|
(1,545,000
|
)
|
|
|
(3,608,000
|
)
|
|
|
(7,082,000
|
)
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
(71,000
|
)
|
|
|
(268,000
|
)
|
|
|
(246,000
|
)
|
|
|
(622,000
|
)
|
|
Interest income from derivative instruments
|
|
|
196,000
|
|
|
|
38,000
|
|
|
|
355,000
|
|
|
|
515,000
|
|
|
Gain on sale of Rancho Refugio/Caldwell Ranch
|
|
|
-
|
|
|
|
1,351,000
|
|
|
|
-
|
|
|
|
1,351,000
|
|
|
Interest income
|
|
|
27,000
|
|
|
|
27,000
|
|
|
|
52,000
|
|
|
|
56,000
|
|
|
Other (expense) income, net
|
|
|
(137,000
|
)
|
|
|
(34,000
|
)
|
|
|
208,000
|
|
|
|
303,000
|
|
|
Total other income
|
|
|
15,000
|
|
|
|
1,114,000
|
|
|
|
369,000
|
|
|
|
1,603,000
|
|
|
Income before income tax (provision) benefit
and equity in losses of investments
|
|
|
1,147,000
|
|
|
|
(431,000
|
)
|
|
|
(3,239,000
|
)
|
|
|
(5,479,000
|
)
|
|
Income tax (provision) benefit
|
|
|
(385,000
|
)
|
|
|
197,000
|
|
|
|
1,195,000
|
|
|
|
1,909,000
|
|
|
Equity in losses of investments
|
|
|
(25,000
|
)
|
|
|
(30,000
|
)
|
|
|
(28,000
|
)
|
|
|
(21,000
|
)
|
|
Net income (loss)
|
|
|
737,000
|
|
|
|
(264,000
|
)
|
|
|
(2,072,000
|
)
|
|
|
(3,591,000
|
)
|
|
Preferred dividends
|
|
|
(65,000
|
)
|
|
|
(65,000
|
)
|
|
|
(131,000
|
)
|
|
|
(131,000
|
)
|
|
Net income (loss) applicable to common stock
|
|
$
|
672,000
|
|
|
$
|
(329,000
|
)
|
|
$
|
(2,203,000
|
)
|
|
$
|
(3,722,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income (loss) per common share
|
|
$
|
0.06
|
|
|
$
|
(0.03
|
)
|
|
$
|
(0.20
|
)
|
|
$
|
(0.33
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income (loss) per common share
|
|
$
|
0.06
|
|
|
$
|
(0.03
|
)
|
|
$
|
(0.20
|
)
|
|
$
|
(0.33
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends per common share
|
|
$
|
0.03
|
|
|
$
|
0.03
|
|
|
$
|
0.06
|
|
|
$
|
0.06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding-basic
|
|
|
11,201,000
|
|
|
|
11,217,000
|
|
|
|
11,203,000
|
|
|
|
11,205,000
|
|
|
Weighted-average common shares outstanding-diluted
|
|
|
11,201,000
|
|
|
|
11,217,000
|
|
|
|
11,203,000
|
|
|
|
11,205,000
|
|
Investor Contact:
ICR
John Mills
Senior Managing
Director
310-954-1105
Source: Limoneira Company
News Provided by Acquire Media
