- First Quarter Revenue Increased 49% Versus Last Year -
- First Quarter Lemon Sales Increased 50% Versus Last Year -
- $1.9 Million Improvement in First Quarter Results of Operations
Versus Last Year -
- Company Reiterates Fiscal Year 2014 Outlook; Continues to Expect
30% Increase in Operating Income -
SANTA PAULA, Calif.--(BUSINESS WIRE)--
Limoneira Company (the "Company" or "Limoneira") (NASDAQ: LMNR), a
leading agribusiness with prime agricultural land and operations, real
estate and water rights in California and Arizona, today reported
financial results for the first quarter ended January 31, 2014.
Fiscal Year 2014 First Quarter Results
For the first quarter of fiscal year 2014, revenue was $25.9 million,
compared to revenue of $17.4 million in the first quarter of the
previous fiscal year. Agribusiness revenue was $24.7 million, compared
to $16.3 million in the first quarter last year, primarily reflecting
higher lemon revenue. Rental operations revenue was $1.1 million in the
first quarter of fiscal year 2014, compared to $1.0 million in the first
quarter last year. Real estate development revenue was $44,000, compared
to $48,000 in the first quarter last year.
Agribusiness revenue for the first quarter of fiscal year 2014 includes
$20.9 million in lemon sales, compared to $14.0 million of lemon sales
during the same period of fiscal year 2013, reflecting a higher average
price per carton due to more favorable market conditions, partially
offset by a lower number of cartons of fresh lemons sold. As
anticipated, due to the typical seasonality of the avocado crop, the
Company did not record significant avocado sales during the first
quarter of fiscal year 2014. The Company recognized $1.9 million of
orange revenue in the first quarter of fiscal year 2014, compared to
$1.4 million of orange revenue in the same period of fiscal year 2013,
reflecting higher average prices per field box partially offset by a
lower number of field boxes sold. Specialty citrus and other crop
revenues were $1.9 million in the first quarter of fiscal year 2014,
compared to $0.9 million in the first quarter of fiscal year 2013
resulting from higher average prices and sales volume.
Costs and expenses for the first quarter of fiscal year 2014 were $28.1
million, compared to $22.7 million in the first quarter of last fiscal
year. The year-over-year increase in operating expenses primarily
reflects increased agribusiness costs associated with the Company's
expanded agribusiness, including the acquisitions of Associated Citrus
Packers, Inc. ("Associated") and Lemons 400, compared to the same period
last year.
Operating loss for the first quarter of fiscal year 2014 was $2.2
million, compared to $5.3 million in the first quarter of the previous
fiscal year.
EBITDA was ($1.1) million in the first quarter of fiscal year 2014,
compared to ($4.4) million in the same period of fiscal year 2013. A
reconciliation of EBITDA to the GAAP measure net income is provided at
the end of this release.
In the first quarter of fiscal year 2014 all interest incurred was
capitalized on non-bearing orchards, real estate development projects
and significant construction in progress. In the first quarter of fiscal
year 2013, the Company's interest expense was $0.1 million. Non-cash
interest income as a result of fair value adjustments on the Company's
interest rate swap was zero in the first quarter of fiscal year 2014,
compared to $0.2 million in the same period of the prior year. The
interest rate swap that generated income in prior periods expired in the
third quarter of fiscal year 2013.
Net loss applicable to common stock, after preferred dividends, for the
first quarter of fiscal year 2014 was $1.3 million, compared to $3.2
million in the first quarter of fiscal year 2013. Loss per diluted share
for the first quarter of fiscal year 2014 was $0.09 on approximately
14.0 million weighted average diluted common shares outstanding,
compared to loss per diluted share of $0.28 on approximately 11.2
million weighted average diluted common shares outstanding in the same
period of the prior year. The year-over-year increase in shares
outstanding is primarily due to the Company's February 2013 public
offering of common stock and shares issued in connection with the
acquisition of Associated.
Management Comments
Harold Edwards, President and Chief Executive Officer, stated, "We are
pleased to report a solid start to fiscal year 2014. While our results
reflect the anticipated seasonality of our agribusiness in the quarter,
we achieved strong year-over-year revenue growth and operating results,
primarily driven by higher lemon sales. Our acquisition of Associated
mitigated a portion of the seasonality of our business contributing
approximately $2.0 million of operating income for the quarter and
underscores our ability to successfully integrate acquired orchards into
our operations. We look forward to capitalizing on strategic
opportunities to further expand our agribusiness acres going forward.
Based on our year-to-date results and outlook for the remainder of the
year, we are reiterating our previously issued guidance."
"In December 2013, we entered into a construction contract that includes
design and construction services for the expansion of our lemon packing
facilities. The project is expected to increase the efficiency of our
packing facilities and once completed, which is expected to be in fiscal
year 2015, our annual lemon packing capacity is estimated to be
approximately twice what it is today."
Mr. Edwards continued, "We continue to make progress towards breaking
ground on East Area 1. We are currently working on tract mapping plans
and we are pleased with the progress to-date on the rock remediation we
began during the first quarter. We continue to engage in discussions
with leading home builders and remain focused on our goal to break
ground on the project and begin selling homes during fiscal year 2015. "
"Lastly, even with the current drought in California, we believe our
extensive water resources including water rights, usage rights and
pumping rights associated with our property provide adequate supplies of
water for our agribusiness as well as our real estate development and
rental operations."
Balance Sheet and Liquidity
The Company had working capital of $2.6 million at the end of the first
quarter of fiscal year 2014. Long-term debt as of January 31, 2014 was
$71.3 million, compared to $61.6 million at October 31, 2013. The
increase in long-term debt was primarily due to typical seasonality of
our business and to expenditures on strategic initiatives such as the
expansion of our lemon packing facilities and construction of additional
farm worker housing units.
Real Estate Development
During the first quarter of fiscal year 2014, the Company executed its
on-going real estate development strategy by capitalizing development
costs of $909,000. In the first quarter of fiscal year 2013, the Company
capitalized real estate development costs of $1,330,000.
Recent Business Highlights
The Company continues to benefit from the success of its direct lemon
sales and marketing strategy. In the first quarter of fiscal year 2014,
lemon sales were comprised of approximately 65% to U.S. and Canada-based
customers, 34% to domestic exporters and 1% to international customers.
Alex Teague, Senior Vice President stated, "We increased the number of
direct lemon customers to approximately 140, underscoring the success of
our sales team. Our business is also benefitting from strategic
acquisitions that we made last year, including the acquisition of
Associated in Yuma, Arizona, and lemon orchards in Porterville,
California. We are now better positioned to provide lemons to our
customers on a year round basis. We look forward to another strong year
of agribusiness in fiscal year 2014."
Fiscal Year 2014 Outlook
The Company is reiterating its previously issued guidance.
For the second quarter of fiscal year 2014, the Company expects to
realize incremental revenue and earnings resulting from the acquisition
of Lemons 400.
For the fiscal year ending October 31, 2014, the Company expects to sell
between 3.0 million to 3.3 million cartons of fresh lemons, and expects
to sell approximately 6.0 million pounds of avocados. The California
avocado crop typically experiences alternating years of high and low
production due to plant physiology. Fiscal year 2013 was a high avocado
production year and fiscal year 2014 is expected to be a lower avocado
production year. Lemon and avocado prices are expected to be higher in
fiscal year 2014 than fiscal year 2013 due to lower industry production.
The Company expects to earn approximately $7.0 million in operating
income in fiscal year 2014, representing approximately a 30% increase
over fiscal year 2013 operating income of $5.3 million. The expected
increase in operating income is primarily due to the additional lemon
revenues to be generated by the acquisitions of Associated and Lemons
400, partially offset by lower expected avocado revenues. Fiscal year
2014 pre-tax earnings are anticipated to be similar to fiscal year 2013
as $1.3 million of earnings from asset sales and $0.7 million in
interest rate swap income realized in fiscal year 2013 are not expected
to recur in fiscal year 2014.
The Company began fiscal year 2014 with approximately 2,300 additional
agricultural acres, representing a 30% increase compared to the
beginning of fiscal year 2013.
Conference Call Information
The Company will host a conference call and audio webcast on March 10,
2014, 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 (877) 718-5098, and international participants should
dial (719) 325-4870. 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 24, 2014, by calling (877) 870-5176 from the U.S. or (858)
384-5517 from international locations to access the playback; passcode
is 3682788.
About Limoneira Company
Limoneira Company, a 120-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 10,000
acres of rich agricultural lands, real estate properties and water
rights in California and Arizona. 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 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. Unaudited 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,
|
|
|
|
2014
|
|
|
2013
|
|
Net loss
|
|
$
|
(1,219,000
|
)
|
|
|
$
|
(3,122,000
|
)
|
|
Total interest income, net
|
|
|
(20,000
|
)
|
|
|
|
(121,000
|
)
|
|
Income tax benefit
|
|
|
(717,000
|
)
|
|
|
|
(1,655,000
|
)
|
|
Depreciation and amortization
|
|
|
817,000
|
|
|
|
|
542,000
|
|
|
EBITDA
|
|
$
|
(1,139,000
|
)
|
|
|
$
|
(4,356,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Limoneira Company
Consolidated Balance Sheets (unaudited)
|
|
|
|
|
|
|
|
|
|
|
January 31,
2014
|
|
|
October 31,
2013
|
|
Assets
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
Cash
|
|
$
|
58,000
|
|
|
$
|
82,000
|
|
Accounts receivable, net
|
|
|
11,738,000
|
|
|
|
6,419,000
|
|
Note receivable - related party
|
|
|
17,000
|
|
|
|
-
|
|
Cultural costs
|
|
|
1,632,000
|
|
|
|
4,124,000
|
|
Prepaid expenses and other current assets
|
|
|
3,549,000
|
|
|
|
2,972,000
|
|
Income taxes receivable
|
|
|
840,000
|
|
|
|
-
|
|
Total current assets
|
|
|
17,834,000
|
|
|
|
13,597,000
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net
|
|
|
89,809,000
|
|
|
|
86,210,000
|
|
Real estate development
|
|
|
84,328,000
|
|
|
|
83,419,000
|
|
Equity in investments
|
|
|
1,708,000
|
|
|
|
1,800,000
|
|
Investment in Calavo Growers, Inc.
|
|
|
15,190,000
|
|
|
|
14,845,000
|
|
Note receivable - related party
|
|
|
-
|
|
|
|
17,000
|
|
Notes receivable
|
|
|
2,043,000
|
|
|
|
2,024,000
|
|
Other assets
|
|
|
8,223,000
|
|
|
|
8,002,000
|
|
Total assets
|
|
$
|
219,135,000
|
|
|
$
|
209,914,000
|
|
|
|
|
|
|
|
|
|
|
Liabilities and stockholders' equity
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
4,997,000
|
|
|
$
|
4,784,000
|
|
Growers payable
|
|
|
6,089,000
|
|
|
|
2,325,000
|
|
Accrued liabilities
|
|
|
2,816,000
|
|
|
|
6,280,000
|
|
Fair value of derivative instrument
|
|
|
766,000
|
|
|
|
717,000
|
|
Current portion of long-term debt
|
|
|
573,000
|
|
|
|
569,000
|
|
Total current liabilities
|
|
|
15,241,000
|
|
|
|
14,675,000
|
|
Long-term liabilities:
|
|
|
|
|
|
|
|
|
Long-term debt, less current portion
|
|
|
71,264,000
|
|
|
|
61,563,000
|
|
Deferred income taxes
|
|
|
18,841,000
|
|
|
|
18,540,000
|
|
Other long-term liabilities
|
|
|
4,185,000
|
|
|
|
4,483,000
|
|
Total long-term liabilities
|
|
|
94,290,000
|
|
|
|
84,586,000
|
|
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 January 31,
2014
and October 31, 2013) (8.75% coupon rate)
|
|
|
3,000,000
|
|
|
|
3,000,000
|
|
Series A Junior Participating Preferred Stock - $.01 par value
(20,000
shares authorized: 0 issued or outstanding at January 31, 2014 and
October 31, 2013)
|
|
|
-
|
|
|
|
-
|
|
Common Stock - $.01 par value (19,900,000 shares authorized:
|
|
|
|
|
|
|
|
|
14,050,390 and 14,016,011 shares issued and outstanding at
January 31, 2014 and October 31, 2013, respectively)
|
|
|
141,000
|
|
|
|
140,000
|
|
Additional paid-in capital
|
|
|
88,463,000
|
|
|
|
88,160,000
|
|
Retained earnings
|
|
|
17,287,000
|
|
|
|
19,098,000
|
|
Accumulated other comprehensive income
|
|
|
713,000
|
|
|
|
255,000
|
|
Total stockholders' equity
|
|
|
109,604,000
|
|
|
|
110,653,000
|
|
Total liabilities and stockholders' equity
|
|
$
|
219,135,000
|
|
|
$
|
209,914,000
|
|
|
|
Limoneira Company
Consolidated Statements of Operations
(unaudited)
|
|
|
|
|
|
|
|
Three months ended
January 31,
|
|
|
|
|
2014
|
|
|
|
2013
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Agribusiness
|
|
$
|
24,704,000
|
|
|
$
|
16,298,000
|
|
|
Rental operations
|
|
|
1,134,000
|
|
|
|
1,036,000
|
|
|
Real estate development
|
|
|
44,000
|
|
|
|
48,000
|
|
|
Total revenues
|
|
|
25,882,000
|
|
|
|
17,382,000
|
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
Agribusiness
|
|
|
23,462,000
|
|
|
|
18,587,000
|
|
|
Rental operations
|
|
|
728,000
|
|
|
|
619,000
|
|
|
Real estate development
|
|
|
344,000
|
|
|
|
243,000
|
|
|
Selling, general and administrative
|
|
|
3,541,000
|
|
|
|
3,265,000
|
|
|
Total costs and expenses
|
|
|
28,075,000
|
|
|
|
22,714,000
|
|
|
Operating loss
|
|
|
(2,193,000
|
)
|
|
|
(5,332,000
|
)
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
-
|
|
|
|
(124,000
|
)
|
|
Interest income related to derivative instruments
|
|
|
-
|
|
|
|
221,000
|
|
|
Interest income
|
|
|
20,000
|
|
|
|
24,000
|
|
|
Other income, net
|
|
|
153,000
|
|
|
|
417,000
|
|
|
Total other income
|
|
|
173,000
|
|
|
|
538,000
|
|
|
Loss before income tax benefit and
equity in earnings of investments
|
|
|
(2,020,000
|
)
|
|
|
(4,794,000
|
)
|
|
Income tax benefit
|
|
|
717,000
|
|
|
|
1,655,000
|
|
|
Equity in earnings of investments
|
|
|
84,000
|
|
|
|
17,000
|
|
|
Net loss
|
|
|
(1,219,000
|
)
|
|
|
(3,122,000
|
)
|
|
Preferred dividends
|
|
|
(66,000
|
)
|
|
|
(66,000
|
)
|
|
Net loss applicable to common stock
|
|
$
|
(1,285,000
|
)
|
|
$
|
(3,188,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Basic net loss per common share
|
|
$
|
(0.09
|
)
|
|
$
|
(0.28
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net loss per common share
|
|
$
|
(0.09
|
)
|
|
$
|
(0.28
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Dividends per common share
|
|
$
|
0.04
|
|
|
$
|
0.04
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding-basic
|
|
|
14,030,000
|
|
|
|
11,220,000
|
|
|
Weighted-average common shares outstanding-diluted
|
|
|
14,030,000
|
|
|
|
11,220,000
|
|
Investor Contact:
ICR
John Mills
Partner
310.954.1105
Source: Limoneira Company
News Provided by Acquire Media
