- First Quarter of Fiscal Year 2016 Revenue was $25.0 Million -
-Company Raises Fiscal Year 2016 Guidance Range -
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, 2016 and
raised its annual guidance range for fiscal year 2016.
Fiscal Year 2016 First Quarter Results
For the first quarter of fiscal year 2016, revenue was $25.0 million,
compared to revenue of $28.0 million in the first quarter of the
previous fiscal year. Agribusiness revenue was $23.6 million, compared
to $26.9 million in the first quarter last fiscal year, primarily due to
lower lemon sales. Rental operations revenue was $1.4 million in the
first quarter of fiscal year 2016, compared to $1.1 million in the first
quarter of last fiscal year. Real estate development revenue was $12,000
compared to $10,000 in the first quarter last fiscal year.
Agribusiness revenue for the first quarter of fiscal year 2016 includes
$21.9 million in lemon sales, compared to $24.7 million of lemon sales
during the same period of fiscal year 2015, primarily reflecting lower
volume of fresh lemons sold, partially offset by higher prices.
Approximately 753,000 cartons of fresh lemons were sold during the first
quarter of fiscal year 2016 at a $23.46 average price per carton
compared to approximately 869,000 cartons sold at a $23.40 average price
per carton during the first quarter of fiscal year 2015. The decrease in
volume in the first quarter of fiscal year 2016 was primarily due to
lower production from the Company's orchards in Yuma, Arizona. Avocado
revenue was not significant in the first quarter of fiscal years 2016
and 2015. The Company recognized $1.0 million of orange revenue in the
first quarter of fiscal year 2016, compared to $1.5 million of orange
revenue in the same period of fiscal year 2015. The lower orange revenue
in the first quarter of fiscal year 2016 is primarily attributable to
fewer harvest days in January 2016 due to increased rainfall. Specialty
citrus and other crop revenues were $0.7 million in the first quarter of
fiscal year 2016, which is similar compared to the first quarter of
fiscal year 2015.
Costs and expenses for the first quarter of fiscal year 2016 were $31.3
million compared to $30.5 million in the first quarter of last fiscal
year. The first quarter of fiscal year 2016 increase in operating
expenses primarily reflects higher real estate development costs
partially offset by lower agribusiness costs. First quarter of fiscal
year 2016 real estate development expenses include $1.2 million of
transaction costs paid upon entering the previously announced joint
venture with the Lewis Group of Companies. Agribusiness costs and
expenses are $0.3 million lower for the first quarter of fiscal year
2016 compared to the first quarter of last fiscal year primarily related
to lower volumes of lemons and oranges harvested and sold.
Operating loss for the first quarter of fiscal year 2016 was $6.3
million, compared to a $2.5 million operating 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 2016 was $4.1
million, compared to net loss applicable to common stock of $1.6 million
in the first quarter of fiscal year 2015. Net loss per diluted share for
the first quarter of fiscal year 2016 was $0.29 compared to a net loss
per diluted share of $0.11 for the same period of fiscal year 2015, with
both periods based on approximately 14.1 million weighted average
diluted common shares outstanding. The previously described joint
venture transaction costs of $1.2 million increased the first quarter of
fiscal year 2016 net loss per share by approximately $0.05.
EBITDA was ($4.7) million in the first quarter of fiscal year 2016,
compared to ($1.2) million in the same period of fiscal year 2015. A
reconciliation of EBITDA to net income is provided at the end of this
release.
Real Estate Development
On November 10, 2015, Limoneira Lewis Community Builders, LLC, a real
estate development joint venture between Limoneira Company and The Lewis
Group of Companies ("The Lewis Group"), was formed. Limoneira Lewis
Community Builders is a 50%/50% joint venture between Limoneira and The
Lewis Group that will engage in the residential development of Harvest
at Limoneira (formerly Santa Paula Gateway Project and East Area 1). The
formation of the joint venture culminated with Limoneira's contribution
of its East Area 1 property to the joint venture and The Lewis Group's
payment to Limoneira of $20.0 million for its 50% interest in the joint
venture. Limoneira expects to receive 25% to 80% of the net cash flow of
the project, based on projected cash flow milestones provided in the
operating agreement, which is estimated to aggregate approximately 70%
of total net cash flows to Limoneira, including the initial $20 million
payment, and the balance of net cash flows to The Lewis Group over the
estimated seven to ten year life of the project. The build-out of lots
is expected to begin in 2016. The Company anticipates that Limoneira
Lewis Community Builders will begin receiving security deposits from
homebuilders for lots sales in mid-2017 and the sale of lots is expected
to begin in the fourth quarter of 2017. The joint venture's results of
operations are expected to be recognized by the Company under the equity
method of accounting.
Management Comments
Harold Edwards, President and Chief Executive Officer, stated, "Our
first quarter top line results reflect the typical seasonality of our
business and were impacted by lower lemon volumes from our orchards in
Arizona. Looking ahead, we believe that we are well positioned to
deliver a strong year in fiscal 2016. We expect to benefit from
additional lemon sales in certain districts/regions as well as more
favorable lemon pricing, and we also anticipate realizing strong orange
sales and pricing in coming quarters. Our expanded and modernized Santa
Paula packing house is now operational and, beginning in March 2016, is
expected to produce meaningful cost savings that will positively impact
on our financial results. Based on these factors, we are raising our
annual operating income, EBITDA, and earnings per share guidance."
Mr. Edwards continued, "Regarding our real estate development business,
we continue to make progress on the development of Harvest at Limoneira.
We expect to receive $100 million to $130 million from the joint venture
over the seven to ten year life of the project, including the $20
million we received upon entering into the joint venture. We are also
focused on the development of over 40 acres of commercial properties
adjacent to project property, which represents an additional opportunity
for meaningful cash flows."
Mr. Edwards added, "Our long-term goal is to be one of the leading
global citrus agribusinesses. Over the past several years, we have made
a number of strategic investments in both the US and internationally
that will drive long-term top and bottom line results. We currently have
approximately 7,600 planted agricultural acres of which approximately
1,500 are non-bearing and are estimated to become full-bearing over the
next four years with plans to plant an additional 500 acres in the next
two years. We anticipate this additional acreage will increase our
annual lemon supply by approximately 0.9 million to 1.3 million fresh
cartons as the non-bearing and planned acreage become productive, which
our new packing house is expected to efficiently manage."
Balance Sheet and Liquidity
During the first quarter of fiscal year 2016, net cash used in operating
activities was $5.4 million, compared to $5.8 million in the prior year
period. Net cash used in investing activities was $3.0 million in the
first quarter of fiscal year 2016, compared to $7.1 million in the prior
year period. Net cash provided by financing activities was $8.3 million
in the first quarter of fiscal year 2016, compared to $12.9 million in
the same period last year. Long-term debt as of January 31, 2016 was
$97.2 million, compared to $89.1 million at the end of fiscal year 2015.
During the first quarter of fiscal year 2016, the Company executed its
on-going real estate development strategy by capitalizing real estate
development costs of $3.5 million. In the first quarter of fiscal year
2015, the Company capitalized real estate development costs of $1.2
million.
During the first quarter and February of fiscal year 2016, the Company
entered into fixed rate, long-term credit arrangements totaling $27.0
million. The loan proceeds were used to pay down the Company's revolving
line of credit, which provides additional availability for real estate
development, agribusiness investments and other corporate purposes.
Recent Business Highlights
The Company continues to benefit from the success of its direct lemon
sales and marketing strategy. During the first quarter of fiscal year
2016, lemon sales were comprised of approximately 72% domestic sales,
24% sales to domestic exporters, and 4% international sales.
Alex Teague, Senior Vice President stated, "We are excited about the
outlook for our agribusiness in fiscal year 2016. With our lemon packing
expansion and modernization project becoming operational, we anticipate
increased efficiencies and cost savings as a result of the new facility.
In addition, we expect to benefit from other investments and
acquisitions that we have made over the past several years."
On December 2, 2015, the Company completed the acquisition of 757 acres
of lemon, orange and specialty citrus orchards in the San Joaquin
Valley, for approximately $15.1 million. This complements the Company's
acquisition of an additional 157 acres of lemon, orange and specialty
citrus orchards in the fourth quarter of fiscal year 2015. The orchards
were acquired pursuant to purchase options contained in certain
operating leases the Company has had since 2012 for approximately 1,000
acres of lemon, orange, specialty citrus and other crops, which the
Company refers to as the Sheldon Ranch leases. The lease agreements
included base rent of $500 per acre and contingent rent of 50% of the
operating profit of the leased property as defined in the lease
agreements. Total rent expense for fiscal year 2015 on the acquired
property was approximately $1.0 million.
On December 15, 2015, the Company declared a quarterly cash dividend of
$0.05 per common share, which was paid on January 15, 2016 in the
aggregate amount of approximately $0.7 million to stockholders of record
on December 28, 2015. This represents an 11% increase compared to the
Company's previous quarterly dividend of $0.045 per common share.
Increasing Fiscal Year 2016 Outlook
For the fiscal year ending October 31, 2016, the Company continues to
expect to sell between 2.7 million and 3.0 million cartons of fresh
lemons at an average price of approximately $23.00 per carton, increased
from $22.50 previously expected, and expects to sell approximately 8.5
to 9.5 million pounds of avocados at approximately $0.80 per pound.
The Company is raising its guidance range for operating income, EBITDA,
and earnings per diluted share for fiscal year 2016. The Company now
expects operating income for fiscal year 2016 to be approximately $8.6
million to $9.1 million, compared to its previous range of $7.8 million
to $8.3 million. Fiscal year 2016 EBITDA is now expected to be in the
range of $14.6 million to $15.1 million, compared to the previous range
of $13.6 million to $14.1 million. The Company now expects fiscal year
2016 earnings per diluted share to be in the range of $0.28 to $0.33,
compared to the previous range of $0.25 to $0.29. Excluding transaction
costs incurred in connection with the Limoneira / Lewis joint venture,
fiscal year 2016 earnings per diluted share are expected to be in the
range of $0.33 to $0.38, compared to previous estimates of $0.30 to
$0.34.
Fiscal year 2016 estimated operating results reflect an anticipated
increase in operating income primarily related to cost savings from the
Company's new lemon packing facilities, increased revenues from
additional farm worker housing units and the elimination of lease
expense resulting from the acquisition of the previously leased Sheldon
Ranches, offset by transaction costs of $1.2 million incurred on the
close of the Limoneira / Lewis joint venture and an expected increase in
depreciation expense that results from the new packing facilities, the
acquired Sheldon Ranch property and the additional farm working housing
units. In addition, interest expense is expected to increase in fiscal
year 2016 related to the new packing house and the additional farm
worker housing units being placed into service because related interest
costs were capitalized during the construction period.
Conference Call Information
The Company will host a conference call and audio webcast on March 10,
2016, 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) 713-4485, and international participants should
dial (913) 312-1516. 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, 2016, by calling (877) 870-5176 from the U.S. or (858)
384-5517 from international locations to access the playback; passcode
is 5313443.
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 10,700
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, including
earnings guidance for fiscal year 2016, 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 "Increasing Fiscal Year 2016 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,
|
|
|
|
2016
|
|
|
2015
|
|
Net loss
|
|
$
|
(3,912,000
|
)
|
|
|
$
|
(1,448,000
|
)
|
|
Interest expense, net
|
|
|
219,000
|
|
|
|
|
12,000
|
|
|
Income tax benefit
|
|
|
(2,167,000
|
)
|
|
|
|
(755,000
|
)
|
|
Depreciation and amortization
|
|
|
1,128,000
|
|
|
|
|
989,000
|
|
|
EBITDA
|
|
$
|
(4,732,000
|
)
|
|
|
$
|
(1,202,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Limoneira Company
|
|
Consolidated Balance Sheets (unaudited)
|
|
|
|
|
|
|
|
|
|
|
January 31,
2016
|
|
|
October 31,
2015
|
|
Assets
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
Cash
|
|
$
|
60,000
|
|
|
$
|
39,000
|
|
Accounts receivable, net
|
|
|
8,844,000
|
|
|
|
7,420,000
|
|
Cultural costs
|
|
|
1,650,000
|
|
|
|
3,916,000
|
|
Prepaid expenses and other current assets
|
|
|
2,876,000
|
|
|
|
2,387,000
|
|
Income taxes receivable
|
|
|
1,992,000
|
|
|
|
-
|
|
Total current assets
|
|
|
15,422,000
|
|
|
|
13,762,000
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net
|
|
|
145,986,000
|
|
|
|
128,951,000
|
|
Real estate development
|
|
|
99,607,000
|
|
|
|
96,067,000
|
|
Equity in investments
|
|
|
3,161,000
|
|
|
|
3,047,000
|
|
Investment in Calavo Growers, Inc.
|
|
|
18,630,000
|
|
|
|
18,508,000
|
|
Other assets
|
|
|
9,128,000
|
|
|
|
9,035,000
|
|
Total Assets
|
|
$
|
291,934,000
|
|
|
$
|
269,370,000
|
|
|
|
|
|
|
|
|
|
|
Liabilities and stockholders' equity
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
6,683,000
|
|
|
$
|
6,611,000
|
|
Growers payable
|
|
|
6,551,000
|
|
|
|
5,841,000
|
|
Accrued liabilities
|
|
|
3,413,000
|
|
|
|
5,864,000
|
|
Fair value of derivative instrument
|
|
|
729,000
|
|
|
|
767,000
|
|
Current portion of long-term debt
|
|
|
1,877,000
|
|
|
|
589,000
|
|
Total current liabilities
|
|
|
19,253,000
|
|
|
|
19,672,000
|
|
Long-term liabilities:
|
|
|
|
|
|
|
|
|
Long-term debt, less current portion
|
|
|
97,204,000
|
|
|
|
89,079,000
|
|
Deferred income taxes
|
|
|
19,546,000
|
|
|
|
19,425,000
|
|
Other long-term liabilities
|
|
|
5,649,000
|
|
|
|
7,641,000
|
|
Sale-leaseback deferral
|
|
|
21,114,000
|
|
|
|
-
|
|
Total liabilities
|
|
|
162,766,000
|
|
|
|
135,817,000
|
|
Commitments and contingencies
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Series B Convertible Preferred Stock - $100.00 par value (50,000
shares authorized: 29,500
shares issued and outstanding at January 31, 2016 and October 31,
2015) (8.75% coupon rate)
|
|
|
2,950,000
|
|
|
|
2,950,000
|
|
|
|
|
|
|
|
|
|
|
Series B-2 Convertible Preferred Stock - $100.00 par value (10,000
shares authorized: 9,300
shares issued and outstanding at January 31, 2016 and October 31,
2015) (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,
2016 and October 31, 2015)
|
|
|
-
|
|
|
|
-
|
|
Common Stock - $.01 par value (19,900,000 shares authorized:
14,171,976 and 14,135,080
|
|
|
|
|
|
|
|
|
shares issued and outstanding at January 31, 2016 and October 31,
2015, respectively)
|
|
|
141,000
|
|
|
|
141,000
|
|
Additional paid-in capital
|
|
|
90,962,000
|
|
|
|
90,759,000
|
|
Retained earnings
|
|
|
22,439,000
|
|
|
|
27,216,000
|
|
Accumulated other comprehensive income
|
|
|
3,345,000
|
|
|
|
3,156,000
|
|
Total stockholders' equity
|
|
|
116,887,000
|
|
|
|
121,272,000
|
|
Total Liabilities and Stockholders' Equity
|
|
$
|
291,934,000
|
|
|
$
|
269,370,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Limoneira Company
|
|
Consolidated Statements of Operations (unaudited)
|
|
|
|
|
|
|
|
Three months ended
January 31,
|
|
|
|
|
2016
|
|
|
|
2015
|
|
|
Net revenues:
|
|
|
|
|
|
|
|
|
|
Agribusiness
|
|
$
|
23,567,000
|
|
|
$
|
26,883,000
|
|
|
Rental operations
|
|
|
1,408,000
|
|
|
|
1,118,000
|
|
|
Real estate development
|
|
|
12,000
|
|
|
|
10,000
|
|
|
Total net revenues
|
|
|
24,987,000
|
|
|
|
28,011,000
|
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
Agribusiness
|
|
|
25,472,000
|
|
|
|
25,814,000
|
|
|
Rental operations
|
|
|
949,000
|
|
|
|
805,000
|
|
|
Real estate development
|
|
|
1,436,000
|
|
|
|
242,000
|
|
|
Selling, general and administrative
|
|
|
3,464,000
|
|
|
|
3,667,000
|
|
|
Total costs and expenses
|
|
|
31,321,000
|
|
|
|
30,528,000
|
|
|
Operating loss
|
|
|
(6,334,000
|
)
|
|
|
(2,517,000
|
)
|
|
Other income:
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
|
(219,000
|
)
|
|
|
(12,000
|
)
|
|
Equity in earnings of investments
|
|
|
114,000
|
|
|
|
85,000
|
|
|
Other income, net
|
|
|
360,000
|
|
|
|
241,000
|
|
|
Total other income
|
|
|
255,000
|
|
|
|
314,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income tax benefit
|
|
|
(6,079,000
|
)
|
|
|
(2,203,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Income tax benefit
|
|
|
2,167,000
|
|
|
|
755,000
|
|
|
Net loss
|
|
|
(3,912,000
|
)
|
|
|
(1,448,000
|
)
|
|
Preferred dividends
|
|
|
(158,000
|
)
|
|
|
(159,000
|
)
|
|
Net loss applicable to common stock
|
|
$
|
(4,070,000
|
)
|
|
$
|
(1,607,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Basic net loss per common share
|
|
$
|
(0.29
|
)
|
|
$
|
(0.11
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net loss per common share
|
|
$
|
(0.29
|
)
|
|
$
|
(0.11
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Dividends per common share
|
|
$
|
0.05
|
|
|
$
|
0.04
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding-basic
|
|
|
14,148,000
|
|
|
|
14,098,000
|
|
|
Weighted-average common shares outstanding-diluted
|
|
|
14,148,000
|
|
|
|
14,098,000
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20160310006036/en/
ICR
John Mills
Partner
646-277-1254
Source: Limoneira Company
News Provided by Acquire Media
