UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date
of Report (Date of earliest event reported): January 26, 2011
Limoneira
Company
(Exact
name of registrant as specified in its charter)
|
Delaware
|
001-34755
|
77-0260692
|
||
|
(State
or other jurisdiction
|
(Commission
File Number)
|
(I.R.S.
Employer Identification No.)
|
||
|
of
incorporation)
|
1141
Cummings Road
Santa
Paula, CA 93060
(Address
of principal executive offices and zip code)
Registrant’s
telephone number, including area code: (805) 525-5541
Check the
appropriate box below if the Form 8-K is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following
provisions:
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
|
Section 2
|
Financial
Information
|
|
|
Item 2.02
|
Results of Operations and
Financial Condition
|
On January 26, 2011, Limoneira Company (NASDAQ: LMNR)
issued a press release announcing its financial results for the fourth quarter
and fiscal year ended October 31, 2010. A copy of the press release
is furnished within this report as Exhibit 99.1.
|
Section 9
|
Financial Statements and
Exhibits
|
|||
|
Item 9.01
|
Financial Statements and
Exhibits
|
|||
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(d)
|
Exhibits.
|
|||
|
99.1
|
Limoneira
Press Release dated January 26,
2011.
|
|||
SIGNATURES
JOSEPH D.
RUMLEY
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
|
Date:
January 26, 2011
|
LIMONEIRA
COMPANY
|
||||
|
By:
|
/s/
JOSEPH D. RUMLEY
|
||||
|
Joseph
D. Rumley
|
|||||
|
Chief
Financial Officer, Treasurer and Corporate Secretary
(Principal
Financial and Accounting Officer)
|
|||||
Investor
Contact:
John
Mills
Senior
Managing Director
ICR
310.954.1105
Limoneira
Company Announces Fourth Quarter and Fiscal Year 2010 Financial
Results
-
Fourth
quarter revenue increased 36% to $12.5 million –
- Fiscal
year 2010 revenue increased 56% to $54.3 million –
-
Fiscal
Year operating income grew 142% to $3.1 million, driven primarily by
agribusiness –
-
Adjusted
EBITDA improved to $8.6 million –
-
Generated
positive cash flow from operating activities of $7.1 million in 2010
–
Santa
Paula, CA., January 26, 2011 – Limoneira Company (NASDAQ: LMNR), a leading
agribusiness with prime agricultural land and operations, real estate and water
rights throughout California, today reported financial results for the fourth
quarter and fiscal year ended October 31, 2010.
Fiscal
Year 2010 Fourth Quarter Results
For the
fourth quarter of fiscal year 2010, revenue increased 36% to $12.5 million,
compared to revenue of $9.2 million in the fourth quarter of the previous fiscal
year. All three of the Company’s main revenue sources—agriculture,
rental operations, and real estate development—contributed to this
period-over-period revenue growth. Agriculture revenue was $8.3
million, compared to $8.2 million in the fourth quarter last
year. Rental revenue was $1.1 million in the fourth quarter, up from
$1.0 million in the fourth quarter last year. Real estate development
revenue increased to $3.0 million, compared to $15,000 in the fourth quarter
last year. Real estate development realized sales in the fourth
quarter primarily attributable to the Company’s sale of its Cactus Wren property
in Arizona in August, 2010.
Fourth
quarter 2010 agriculture revenue is comprised of $5.0 million in lemon sales
compared to $4.9 million during the same period of fiscal year 2009, $0.9
million of avocado revenue compared to $1.4 million in the same period of fiscal
year 2009, $1.2 million of orange and specialty crop revenues compared to $1.1
million in the same period of fiscal year 2009, and $1.2 million in citrus
products revenue compared to $0.8 million in the same period of fiscal year
2009. The fluctuation in revenues is generally due to the normal volatility of
agriculture production, except for the increase in citrus products revenue,
which reflects stronger pricing in the juice and products market in fourth
quarter 2010 as compared to the fourth quarter of fiscal year 2009.
Costs and
expenses for the fourth quarter of fiscal year 2010 were $14.6 million compared
to $13.7 million in the fourth quarter last fiscal year. The
year-over-year increase in operating expenses reflects higher selling, general
and administrative expenses due to ongoing costs associated with being a newly
publicly traded company and employee incentive compensation of approximately
$0.6 million due to stronger fiscal year 2010 operating results, both of which
did not occur in the fourth quarter of fiscal year 2009. Fourth
quarter of fiscal year 2010 operating expenses also include $3.0 million
associated with the sale of the Company’s Cactus Wren property. These
higher SG&A and real estate development costs were partially offset by lower
impairment charges of real estate development assets of $4.3 million in the
fourth quarter of fiscal year 2010 compared to the fourth quarter of the prior
fiscal year, due to the slowing decline in real estate values.
Operating
loss for the fiscal year 2010 fourth quarter was $2.1 million, compared to $4.6
million in the fourth quarter of the previous fiscal year.
The
Company generated Adjusted EBITDA (defined as net income excluding interest
expense, income taxes, depreciation and amortization, and non-cash impairment
charges on real estate development) in the fourth quarter of fiscal
year 2010 of $654,000, compared to $5.0 million in the fourth quarter
of the previous fiscal year. A reconciliation of Adjusted EBITDA to
the GAAP measure net income is provided at the end of this release.
Fiscal
Year 2010 Results
For the
fiscal year ended October 31, 2010, revenue increased by 56% to $54.3 million
from $34.8 million during fiscal year 2009. The increase was driven
by growth in all three of the Company’s main revenue sources: agriculture
revenue increased to $47.0 million, compared to $31.0 million last year; rental
revenue increased to $4.0 million compared to $3.8 million last year; and real
estate development revenue increased to $3.3 million, compared to $39,000 last
year. Operating income for fiscal year 2010 was $3.1 million,
compared to an operating loss of $7.5 million in the same period last
year. Fiscal year 2010 operating income includes charges of $2.4
million attributable to impairments of certain of the Company’s real estate
development assets. Fiscal year 2009 operating loss includes $6.2
million of charges attributable to impairments of the Company’s real estate
development assets. The year-over-year improvement in asset impairment charges
reflects slowing rates of decline in real estate values over the course of the
past year.
Net
income applicable to common stock, after preferred dividends for fiscal year
2010 was $61,000 or $0.01 per share, compared to a net loss of $3.1 million or
($0.28) per share, in the same period last fiscal year. Adjusted EBITDA for
fiscal year 2010 was $8.6 million, compared to $4.1 million in fiscal year
2009. A reconciliation of Adjusted EBITDA to the GAAP measure net
income is provided at the end of this release.
Harold
Edwards, President and Chief Executive Officer, stated, “We are pleased with our
fourth quarter results, which marks a solid finish to a very exciting year for
Limoneira. In fiscal year 2010, we achieved solid revenue, operating
income and net income growth, as well as strong cash flow from
operations. Our agribusiness in fiscal year 2010
benefitted from year-over-year growth in all of our crop varieties, reflecting
favorable harvest conditions in addition to growing global demand; our avocado
business was extremely strong, as avocado revenue increased 188% compared to
last fiscal year. Our overall revenue also benefitted from improved
real estate revenue due to the sale of the Cactus Wren project in Arizona, which
enabled us to reduce debt in the fourth quarter.”
Mr.
Edwards continued, “In addition to our improved financial results, we are proud
of the accomplishments of our business in fiscal year 2010 and are encouraged by
our positive momentum as we begin fiscal year 2011. In May, we listed
our common stock on the NASDAQ Global Market, and as previously announced,
beginning on November 1, 2010, we implemented a direct selling and marketing
strategy for our lemon business, which will enable us to achieve improved
efficiencies throughout our distribution channel and establish global
recognition of the Limoneira brand. We are pleased with the initial
success of this new initiative and look forward to incremental improvements
being reflected in our financial results throughout fiscal year
2011.”
Mr.
Edwards concluded, “We are excited about the opportunities ahead for Limoneira
in fiscal year 2011 and beyond. We will remain diligently focused on
expanding our core agribusiness, and we will continue to capitalize on
opportunities to monetize our real estate
investments. Limoneira is well-positioned to make solid
progress in our business during the coming quarters and improve our top and
bottom line results and enhance our shareholder value.”
Balance
Sheet and Liquidity
During
the fourth quarter of fiscal year 2010, the Company decreased its long-term debt
by $6.0 million. The Company had a working capital of $1.1 million as
of October 31, 2010, compared to $2.4 million as of October 31,
2009. Net cash provided by operating activities during fiscal year
October 31, 2010 was $7.1 million, compared to a net use of cash from operating
activities of $1.0 million during fiscal year 2009.
Real
Estate Development
During
the fourth quarter and fiscal year ended October 31, 2010, the Company continued
to execute its real estate development strategy capitalizing development costs
of $1.0 million and $3.7 million, respectively. During the same
periods in fiscal year 2009, the Company capitalized real estate development
costs of $0.8 million and $5.1 million, respectively.
As
previously announced, in August 2010, the Company sold one of its Arizona
properties, Cactus Wren, for $3.0 million cash; realizing net cash of $2.8
million after selling and other closing costs. The Company recognized
an impairment charge of $0.5 million in the third quarter in connection with the
sale in the fourth quarter of fiscal year 2010. The Company used the
funds received from the transaction to pay down debt.
Recent
Business Highlights
As previously announced, effective
November 1, 2010, the
Company began implementing its strategic decision to increase its brand exposure
in agribusiness by marketing and selling its lemons directly to foodservice,
wholesale and retail customers around the world. The Company has added its
commercial lemons to its existing
specialty lemon sales, completing the value chain from tree to customer, with a
new marketing and selling strategy. The initial results of the direct
lemon sales strategy have shown improvement in fresh utilization and
customer acceptance of Limoneira brands in
the market place.
About
Limoneira Company
Limoneira
Company, a 117-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 7,300 acres of rich
agricultural lands, real estate properties and water rights throughout
California. The Company is a leading producer of lemons, avocados, oranges, and
other specialty 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 expense, 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. EBITDA and adjusted
EBITDA are summarized and reconciled to net income (loss) which management
considers to be the most directly comparable financial measure calculated and
presented in accordance with GAAP as follows:
Years Ended October 31, 2010 and
2009
|
2010
|
2009
|
|||||||
|
Net income
(loss)
|
$
|
323,000
|
$
|
(2,877,000
|
)
|
|||
|
Total
interest expense
|
3,619,000
|
692,000
|
||||||
|
Income
taxes
|
(72,000
|
)
|
(2,291,000
|
)
|
||||
|
Depreciation and
amortization
|
2,337,000
|
2,323,000
|
||||||
|
EBITDA
|
6,207,000
|
(2,153,000
|
)
|
|||||
|
Impairments
of real estate development assets
|
2,422,000
|
6,203,000
|
||||||
|
Adjusted
EBITDA
|
$
|
8,629,000
|
$
|
4,050,000
|
||||
Fourth Quarter Fiscal Years 2010 and
2009
|
2010
|
2009
|
|||||||
|
Net income
(loss)
|
$
|
(1,572,000
|
)
|
$
|
(1,110,000
|
)
|
||
|
Total
interest expense
|
823,000
|
188,000
|
||||||
|
Income
taxes
|
(1,115,000
|
)
|
(891,000
|
)
|
||||
|
Depreciation and
amortization
|
613,000
|
621,000
|
||||||
|
EBITDA
|
(1,251,000
|
)
|
(1,192,000
|
)
|
||||
|
Impairments
of real estate development assets
|
1,905,000
|
6,203,000
|
||||||
|
Adjusted
EBITDA
|
$
|
654,000
|
$
|
5,011,000
|
||||
Limoneira Company
Consolidated Balance
Sheets
|
October 31,
|
||||||||
|
2010
|
2009
|
|||||||
|
Current
assets:
|
||||||||
|
Cash
|
$
|
258,000
|
$
|
603,000
|
||||
|
Accounts receivable,
net
|
3,390,000
|
3,735,000
|
||||||
|
Notes receivable - related
parties
|
33,000
|
1,519,000
|
||||||
|
Cultural
costs
|
1,059,000
|
858,000
|
||||||
|
Prepaid expenses and other current
assets
|
1,244,000
|
894,000
|
||||||
|
Income taxes
receivable
|
1,241,000
|
-
|
||||||
|
Current assets of discontinued
operations
|
168,000
|
9,000
|
||||||
|
Total current
assets
|
7,393,000
|
7,618,000
|
||||||
|
Property, plant and equipment,
net
|
53,283,000
|
53,817,000
|
||||||
|
Real estate
development
|
68,412,000
|
53,125,000
|
||||||
|
Assets held for
sale
|
-
|
6,774,000
|
||||||
|
Equity in
investments
|
9,057,000
|
1,635,000
|
||||||
|
Investment in Calavo Growers,
Inc.
|
14,564,000
|
11,870,000
|
||||||
|
Notes receivable - related
parties
|
60,000
|
284,000
|
||||||
|
Notes
receivable
|
2,154,000
|
2,000,000
|
||||||
|
Other
assets
|
4,515,000
|
4,307,000
|
||||||
|
Non-current assets of discontinued
operations
|
253,000
|
438,000
|
||||||
|
Total
Assets
|
$
|
159,691,000
|
$
|
141,868,000
|
||||
|
Liabilities and Stockholders'
Equity
|
||||||||
|
Current
liabilities:
|
||||||||
|
Accounts
payable
|
$
|
2,031,000
|
$
|
1,669,000
|
||||
|
Growers
payable
|
871,000
|
988,000
|
||||||
|
Accrued
liabilities
|
2,776,000
|
2,065,000
|
||||||
|
Current portion of long-term
debt
|
626,000
|
465,000
|
||||||
|
Current liabilities of
discontinued operations
|
34,000
|
2,000
|
||||||
|
Total current
liabilities
|
6,338,000
|
5,189,000
|
||||||
|
Long-term
liabilities:
|
||||||||
|
Long-term debt, less current
portion
|
85,312,000
|
69,251,000
|
||||||
|
Deferred income
taxes
|
8,697,000
|
8,764,000
|
||||||
|
Other long-term
liabilities
|
7,248,000
|
6,903,000
|
||||||
|
Total long-term
liabilities
|
101,257,000
|
84,918,000
|
||||||
|
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 October 31, 2010 and
2009) (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 October 31, 2010 and
2009)
|
-
|
-
|
||||||
|
Common Stock – $.01 par value (19,900,000 shares
authorized: 11,194,460 and 11,262,880 shares issued and outstanding at
October 31, 2010 and 2009, respectively)
|
112,000
|
113,000
|
||||||
|
Additional paid-in
capital
|
34,735,000
|
34,718,000
|
||||||
|
Retained
earnings
|
15,044,000
|
16,386,000
|
||||||
|
Accumulated other comprehensive
loss
|
(795,000
|
)
|
(2,456,000
|
)
|
||||
|
Total stockholders'
equity
|
52,096,000
|
51,761,000
|
||||||
|
Total Liabilities and
Stockholders' Equity
|
$
|
159,691,000
|
$
|
141,868,000
|
||||
Limoneira Company
Consolidated Statements of
Operations
|
Three
months ended October 31,
|
Years
ended October 31,
|
||||||||||||||
|
2010
|
2009
|
2010
|
2009
|
||||||||||||
|
Revenues:
|
|||||||||||||||
|
Agriculture
|
$
|
8,345,000
|
$
|
8,176,000
|
$
|
47,034,000
|
$
|
31,033,000
|
|||||||
|
Rental
|
1,095,000
|
987,000
|
3,976,000
|
3,766,000
|
|||||||||||
|
Real
estate development
|
3,043,000
|
15,000
|
3,274,000
|
39,000
|
|||||||||||
|
Total
revenues
|
12,483,000
|
9,178,000
|
54,284,000
|
34,838,000
|
|||||||||||
|
Costs
and expenses:
|
|||||||||||||||
|
Agriculture
|
6,221,000
|
5,154,000
|
31,457,000
|
27,281,000
|
|||||||||||
|
Rental
|
548,000
|
516,000
|
2,173,000
|
2,061,000
|
|||||||||||
|
Real
estate development
|
3,299,000
|
85,000
|
4,416,000
|
318,000
|
|||||||||||
|
Impairment
of real estate assets
|
1,905,000
|
6,203,000
|
2,422,000
|
6,203,000
|
|||||||||||
|
Selling,
general and administrative
|
2,626,000
|
1,779,000
|
10,694,000
|
6,469,000
|
|||||||||||
|
(Gain)
loss on disposals/sales of assets
|
(1,000
|
)
|
7,000
|
(1,000
|
)
|
10,000
|
|||||||||
|
Total
costs and expenses
|
14,598,000
|
13,744,000
|
51,161,000
|
42,342,000
|
|||||||||||
|
Operating
income (loss)
|
(2,115,000
|
)
|
(4,566,000
|
)
|
3,123,000
|
(7,504,000
|
)
|
||||||||
|
Other
income (expense):
|
|||||||||||||||
|
Interest
expense
|
(376,000
|
)
|
(188,000
|
)
|
(1,632,000
|
)
|
(692,000
|
)
|
|||||||
|
Interest
expense related to derivative instruments
|
(447,000
|
)
|
-
|
(1,987,000
|
)
|
-
|
|||||||||
|
Gain
on sale of stock in Calavo Growers, Inc.
|
-
|
2,729,000
|
-
|
2,729,000
|
|||||||||||
|
Interest
income
|
28,000
|
48,000
|
113,000
|
225,000
|
|||||||||||
|
Other
income (expense), net
|
(22,000
|
)
|
(32,000
|
)
|
332,000
|
256,000
|
|||||||||
|
Total
other (expense)
|
(817,000
|
)
|
2,557,000
|
(3,174,000
|
)
|
2,518,000
|
|||||||||
|
Income
(loss) from continuing operations before
income
tax (provision) benefit and
equity
in earnings (losses) of investments
|
(2,932,000
|
) |
(2,009,000
|
) |
(51,000
|
) |
(4,986,000
|
) | |||||||
|
Income
tax (provision) benefit
|
1,115,000
|
891,000
|
72,000
|
2,291,000
|
|||||||||||
|
Equity
in earnings (losses) of investments
|
270,000
|
13,000
|
345,000
|
(170,000
|
)
|
||||||||||
|
Income
(loss) from continuing operations
|
(1,547,000
|
)
|
(1,105,000
|
)
|
366,000
|
(2,865,000
|
)
|
||||||||
|
Loss
from discontinued operations, net of income taxes
|
(25,000
|
)
|
(5,000
|
)
|
(43,000
|
)
|
(12,000
|
)
|
|||||||
|
Net
income (loss)
|
(1,572,000
|
)
|
(1,110,000
|
)
|
323,000
|
(2,877,000
|
)
|
||||||||
|
Preferred
dividends
|
(65,000
|
)
|
(65,000
|
)
|
(262,000
|
)
|
(262,000
|
)
|
|||||||
|
Net
income (loss) applicable to common stock
|
$
|
(1,637,000
|
)
|
$
|
(1,175,000
|
)
|
$
|
61,000
|
$
|
(3,139,000
|
)
|
||||
|
Per
common share basic:
|
|||||||||||||||
|
Continuing
operations
|
$
|
(0.14
|
)
|
$
|
(0.10
|
)
|
$
|
0.01
|
$
|
(0.28
|
)
|
||||
|
Discontinued
operations
|
(0.00
|
)
|
(0.00
|
)
|
(0.00
|
)
|
(0.00
|
)
|
|||||||
|
Basic
net income (loss) per share
|
$
|
(0.14
|
)
|
$
|
(0.10
|
)
|
$
|
0.01
|
$
|
(0.28
|
)
|
||||
|
Per
common share-diluted:
|
|||||||||||||||
|
Continuing
operations
|
$
|
(0.14
|
)
|
$
|
(0.10
|
)
|
$
|
0.01
|
$
|
(0.28
|
)
|
||||
|
Discontinued
operations
|
(0.00
|
)
|
(0.00
|
)
|
(0.00
|
)
|
(0.00
|
)
|
|||||||
|
Diluted
net income (loss) per share
|
$
|
(0.14
|
)
|
$
|
(0.10
|
)
|
$
|
0.01
|
$
|
(0.28
|
)
|
||||
|
Dividends
per common share
|
$
|
0.03
|
$
|
0.03
|
$
|
0.13
|
$
|
0.06
|
|||||||
|
Weighted-average
shares outstanding-basic
|
11,194,000
|
11,263,000
|
11,210,000
|
11,242,000
|
|||||||||||
|
Weighted-average
shares outstanding-diluted
|
11,194,000
|
11,263,000
|
11,251,000
|
11,242,000
|
|||||||||||