-Second Quarter Lemon Sales Increased 17% Versus Last Year-
-Second Quarter Operating Income Improved 35% Versus Last Year-
-Company Raises Annual FY 2014 Guidance-
-Company Expects to Achieve Annual FY 2014 Earnings Per Share in
Range of $0.45 to $0.50-
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 second quarter ended April 30, 2014.
Fiscal Year 2014 Second Quarter Results
For the second quarter of fiscal year 2014, revenue was $24.8 million,
compared to revenue of $23.3 million in the second quarter of the
previous fiscal year. Agribusiness revenue was $23.6 million, compared
to $22.2 million in the second quarter last year, primarily reflecting
higher lemon revenue. Rental operations revenue was $1.2 million in the
second quarter of fiscal year 2014, compared to $1.1 million in the
second quarter last year. Real estate development revenue was $31,000,
compared to $41,000 in the second quarter last year.
Agribusiness revenue for the second quarter of fiscal year 2014 includes
$18.1 million in lemon sales, compared to $15.5 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. The decrease
in volume in fiscal year 2014 compared to fiscal year 2013 is primarily
due to weather conditions and the related timing of fruit harvest. The
Company generated avocado sales of $1.2 million in the second quarter of
fiscal year 2014, compared to $2.7 million in the same period of fiscal
year 2013, reflecting lower pounds of avocados sold, partially offset by
higher prices. The Company recognized $3.4 million of orange revenue in
the second quarter of fiscal year 2014, compared to $2.3 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 $0.9 million
in the second quarter of fiscal year 2014, compared to $1.7 million in
the second quarter of fiscal year 2013, reflecting lower average prices
and lower volume.
Costs and expenses for the second quarter of fiscal year 2014 were $21.6
million, compared to $20.9 million in the second 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 income for the second quarter of fiscal year 2014 increased
35% to $3.2 million, compared to $2.4 million in the second quarter of
the previous fiscal year.
EBITDA was $4.1 million in the second quarter of fiscal year 2014,
compared to $4.2 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 second quarters of fiscal years 2014 and 2013 all interest
incurred was capitalized on non-bearing orchards, real estate
development projects and significant construction in progress. Non-cash
interest income as a result of fair value adjustments on the Company's
interest rate swap was zero in the second 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. In the second quarter of fiscal year
2013, the Company realized a $3.1 million gain on the sale of stock in
Calavo Growers, Inc.
Net income applicable to common stock, after preferred dividends, for
the second quarter of fiscal year 2014 was $2.0 million, compared to
$2.4 million in the second quarter of fiscal year 2013. Earnings per
diluted share for the second quarter of fiscal year 2014 was $0.15 on
approximately 14.1 million weighted average diluted common shares
outstanding, compared to earnings per diluted share of $0.19 on
approximately 12.8 million weighted average diluted common shares
outstanding in the same period of the prior year. Second quarter fiscal
year 2013 net income and earnings per share include the aforementioned
gain on the sale of Calavo Growers, Inc. stock and a loss on equity
investments of $1.8 million related to the sale of HM East Ridge LLC.
These two transactions generated $0.9 million of net income or $0.07
earnings per diluted share in aggregate in the second quarter of fiscal
year 2013. 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.
Fiscal Year 2014 First Six Months Results
For the six months ended April 30, 2014, revenue was $50.7 million,
compared to $40.7 million in the same period last year. Operating income
for the first six months of fiscal year 2014 was $1.0 million, compared
to an operating loss of ($2.9) million in the same period last year. Net
income applicable to common stock, after preferred dividends, for the
first six months of fiscal year 2014 was $0.8 million, compared to net
loss of ($0.7) million in the same period last year. Earnings per
diluted share for the first six months of fiscal year 2014 was $0.05 on
approximately 14.0 million weighted average diluted common shares
outstanding, compared to loss per diluted share of ($0.06) on
approximately 12.1 million weighted average diluted common shares
outstanding. 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, "Our
second quarter financial results reflect the steady progress we are
making with our business. We continue to grow our top line, reflecting
our expanding agribusiness, including our lemon and citrus sales. We
also remain pleased with the contributions of our acquired orchards,
which generated approximately $2.6 million of operating income in the
first half of fiscal year 2014. In the second quarter, we reduced our
long-term debt, paying down over $10 million in debt in the quarter.
Based on lemon prices we are currently enjoying, our results for the
first six months of fiscal 2014 and our positive outlook for the back
half of the year, we are raising our previously issued guidance for the
full year results of operations. Importantly, even with the
well-publicized drought in California, we continue to believe that our
extensive water rights, usage rights and pumping rights will provide us
with adequate supplies of water as we begin our seasonally strongest
quarter of the year."
Mr. Edwards continued, "Regarding our real estate development business,
we continue to move forward on the East Area 1/Santa Paula Gateway
project. Last month, we submitted the Master Tentative Tract Map to the
City of Santa Paula, which we expect to be approved this calendar year.
We also continue to engage in discussions with leading homebuilders and
remain focused on our goal to break ground on the project during 2015."
Balance Sheet and Liquidity
In the second quarter of fiscal year 2014, the Company reduced its
long-term debt by $10.9 million with the proceeds from the issuance of
series B-2 convertible preferred stock. Long-term debt as of April 30,
2014 was $60.4 million, compared to $71.3 million as of January 31, 2014
and $61.6 million at October 31, 2013. Net cash from operating
activities increased $7.7 million in the six months ended April 30, 2014
compared to the same period of fiscal year 2013. Net cash used in
investing activities increased $9.5 million in the six months ended
April 30, 2014 compared to the same period of fiscal year 2013,
primarily related to investments in the expansion of lemon packing
facilities and additional farm worker housing units.
Real Estate Development
During the second quarter of fiscal year 2014, the Company executed its
on-going real estate development strategy by capitalizing development
costs of $1.4 million. In the second quarter of fiscal year 2013, the
Company capitalized real estate development costs of $1.4 million.
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 2014,
lemon sales were comprised of approximately 78% to U.S. and Canada-based
customers, 19% to domestic exporters and 3% to international customers.
Alex Teague, Senior Vice President, stated, "We currently have over 140
direct lemon customers, 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
Lemons 400 in Porterville, California. We are better positioned to
provide lemons to our customers on a year round basis. In addition, the
lemon prices we are currently enjoying are significantly higher than
historical averages, and while we expect favorable prices to continue
for the remainder of the year, we anticipate a settling back to
historical averages in the coming months. We look forward to another
strong year of agribusiness in fiscal year 2014."
Fiscal Year 2014 Outlook
The Company is raising its previously issued guidance and providing
annual earnings per share guidance.
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.
Due to higher lemon prices than previously expected, the Company is
raising operating income guidance to $10.6 million to $11.8 million
compared to previous guidance of approximately $7.0 million. The
increased operating income in fiscal year 2014 represents approximately
a 100% increase over fiscal year 2013 operating income of $5.4 million.
The expected increase in operating income is primarily due to the
additional lemon revenue generated by the acquisitions of Associated and
Lemons 400 and increased lemon prices, partially offset by lower
expected avocado revenue. Fiscal year 2014 pre-tax earnings are
anticipated to be $11.3 million to $12.4 million compared to previous
guidance of approximately $8.1 million, which is similar to fiscal year
2013 pretax income.
The Company expects fiscal year 2014 earnings per diluted share to be in
the range of $0.45 to $0.50 based on estimated weighted average diluted
common shares outstanding of approximately 14.0 million. Consistent with
the typical seasonality of the Company's agriculture operations, we
expect that substantially all of the second half of fiscal year 2014
earnings will be generated in the third quarter with little to no
earnings in the fourth quarter.
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 June 9,
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 (888) 378-4361, and international participants should
dial (719) 457-2639. 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 June 23, 2014, by calling (877) 870-5176 from the U.S. or (858)
384-5517 from international locations to access the playback; passcode
is 1532803.
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:
|
|
|
Quarter ended April 30,
|
|
Six Months Ended April 30,
|
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
2,113,000
|
|
|
$
|
2,505,000
|
|
|
$
|
894,000
|
|
|
$
|
(617,000
|
)
|
|
Total interest income, net
|
|
|
(19,000
|
)
|
|
|
(243,000
|
)
|
|
|
(39,000
|
)
|
|
|
(364,000
|
)
|
|
Income taxes
|
|
|
1,145,000
|
|
|
|
1,427,000
|
|
|
|
428,000
|
|
|
|
(228,000
|
)
|
|
Depreciation and amortization
|
|
|
845,000
|
|
|
|
545,000
|
|
|
|
1,662,000
|
|
|
|
1,087,000
|
|
|
EBITDA
|
|
$
|
4,084,000
|
|
|
$
|
4,234,000
|
|
|
$
|
2,945,000
|
|
|
$
|
(122,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Limoneira Company
Consolidated Balance Sheets (unaudited)
|
|
|
|
|
|
|
|
|
|
|
April 30,
2014
|
|
|
October 31,
2013
|
|
Assets
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
Cash
|
|
$
|
71,000
|
|
|
$
|
82,000
|
|
Accounts receivable, net
|
|
|
11,178,000
|
|
|
|
6,419,000
|
|
Cultural costs
|
|
|
1,411,000
|
|
|
|
4,124,000
|
|
Prepaid expenses and other current assets
|
|
|
3,742,000
|
|
|
|
2,972,000
|
|
Total current assets
|
|
|
16,402,000
|
|
|
|
13,597,000
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net
|
|
|
92,269,000
|
|
|
|
86,210,000
|
|
Real estate development
|
|
|
85,748,000
|
|
|
|
83,419,000
|
|
Equity in investments
|
|
|
1,655,000
|
|
|
|
1,800,000
|
|
Investment in Calavo Growers, Inc.
|
|
|
15,545,000
|
|
|
|
14,845,000
|
|
Note receivable - related party
|
|
|
-
|
|
|
|
17,000
|
|
Notes receivable
|
|
|
2,063,000
|
|
|
|
2,024,000
|
|
Other assets
|
|
|
8,146,000
|
|
|
|
8,002,000
|
|
Total assets
|
|
$
|
221,828,000
|
|
|
$
|
209,914,000
|
|
|
|
|
|
|
|
|
|
|
Liabilities and stockholders' equity
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
5,755,000
|
|
|
$
|
4,784,000
|
|
Growers payable
|
|
|
6,036,000
|
|
|
|
2,325,000
|
|
Accrued liabilities
|
|
|
4,363,000
|
|
|
|
6,280,000
|
|
Fair value of derivative instrument
|
|
|
802,000
|
|
|
|
717,000
|
|
Current portion of long-term debt
|
|
|
577,000
|
|
|
|
569,000
|
|
Total current liabilities
|
|
|
17,533,000
|
|
|
|
14,675,000
|
|
Long-term liabilities:
|
|
|
|
|
|
|
|
|
Long-term debt, less current portion
|
|
|
60,446,000
|
|
|
|
61,563,000
|
|
Deferred income taxes
|
|
|
19,139,000
|
|
|
|
18,540,000
|
|
Other long-term liabilities
|
|
|
3,673,000
|
|
|
|
4,483,000
|
|
Total liabilities
|
|
|
100,791,000
|
|
|
|
99,261,000
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
Series B-2 Convertible Preferred Stock - $100 par value (10,000
shares
authorized: 9,300 shares issued and outstanding at April 30, 2014)
(4% dividend rate on liquidation value of $1,000 per share)
|
|
|
9,300,000
|
|
|
|
-
|
|
Stockholders' equity:
|
|
|
|
|
|
|
|
|
Series B Convertible Preferred Stock - $100 par value (50,000 shares
authorized: 30,000 shares issued and outstanding at April 30, 2014
and October 31, 2013) (8.75% coupon rate)
|
|
|
3,000,000
|
|
|
|
3,000,000
|
|
Series A Junior Participating Preferred Stock
|
|
|
-
|
|
|
|
-
|
|
Common Stock - $.01 par value (19,900,000 shares authorized:
|
|
|
|
|
|
|
|
|
14,050,070 and 14,016,011 shares issued and outstanding at
April 30, 2014 and October 31, 2013, respectively)
|
|
|
141,000
|
|
|
|
140,000
|
|
Additional paid-in capital
|
|
|
88,625,000
|
|
|
|
88,160,000
|
|
Retained earnings
|
|
|
18,808,000
|
|
|
|
19,098,000
|
|
Accumulated other comprehensive income
|
|
|
1,163,000
|
|
|
|
255,000
|
|
Total stockholders' equity
|
|
|
111,737,000
|
|
|
|
110,653,000
|
|
Total liabilities and stockholders' equity
|
|
$
|
221,828,000
|
|
|
$
|
209,914,000
|
|
|
|
|
|
|
|
|
|
|
Limoneira Company
Consolidated Statements of Operations
(unaudited)
|
|
|
|
|
|
|
|
Three months ended
April 30,
|
|
Six months ended
April 30,
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
2014
|
|
|
|
|
2013
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agribusiness
|
$
|
23,604,000
|
|
|
$
|
22,190,000
|
|
|
$
|
48,308,000
|
|
|
|
$
|
38,488,000
|
|
|
Rental operations
|
|
1,167,000
|
|
|
|
1,055,000
|
|
|
|
2,301,000
|
|
|
|
|
2,091,000
|
|
|
Real estate development
|
|
31,000
|
|
|
|
41,000
|
|
|
|
75,000
|
|
|
|
|
89,000
|
|
|
Total revenues
|
|
24,802,000
|
|
|
|
23,286,000
|
|
|
|
50,684,000
|
|
|
|
|
40,668,000
|
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agribusiness
|
|
17,463,000
|
|
|
|
17,262,000
|
|
|
|
40,925,000
|
|
|
|
|
35,849,000
|
|
|
Rental operations
|
|
707,000
|
|
|
|
638,000
|
|
|
|
1,435,000
|
|
|
|
|
1,257,000
|
|
|
Real estate development
|
|
257,000
|
|
|
|
226,000
|
|
|
|
601,000
|
|
|
|
|
469,000
|
|
|
Selling, general and administrative
|
|
3,145,000
|
|
|
|
2,774,000
|
|
|
|
6,686,000
|
|
|
|
|
6,039,000
|
|
|
Total costs and expenses
|
|
21,572,000
|
|
|
|
20,900,000
|
|
|
|
49,647,000
|
|
|
|
|
43,614,000
|
|
|
Operating income (loss)
|
|
3,230,000
|
|
|
|
2,386,000
|
|
|
|
1,037,000
|
|
|
|
|
(2,946,000
|
)
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
(124,000
|
)
|
|
Interest income from derivative instrument
|
|
-
|
|
|
|
221,000
|
|
|
|
-
|
|
|
|
|
442,000
|
|
|
Gain on sale of stock in Calavo Growers, Inc.
|
|
-
|
|
|
|
3,138,000
|
|
|
|
-
|
|
|
|
|
3,138,000
|
|
|
Interest income
|
|
19,000
|
|
|
|
22,000
|
|
|
|
39,000
|
|
|
|
|
46,000
|
|
|
Other income (expense), net
|
|
62,000
|
|
|
|
(29,000
|
)
|
|
|
215,000
|
|
|
|
|
388,000
|
|
|
Total other income
|
|
81,000
|
|
|
|
3,352,000
|
|
|
|
254,000
|
|
|
|
|
3,890,000
|
|
|
Income before income tax (provision) benefit and
equity in (losses) earnings of investments
|
|
3,311,000
|
|
|
|
5,738,000
|
|
|
|
1,291,000
|
|
|
|
|
944,000
|
|
|
Income tax (provision) benefit
|
|
(1,145,000
|
)
|
|
|
(1,427,000
|
)
|
|
|
(428,000
|
|
)
|
|
|
228,000
|
|
|
Equity in (losses) earnings of investments
|
|
(53,000
|
)
|
|
|
(1,806,000
|
)
|
|
|
31,000
|
|
|
|
|
(1,789,000
|
)
|
|
Net income (loss)
|
|
2,113,000
|
|
|
|
2,505,000
|
|
|
|
894,000
|
|
|
|
|
(617,000
|
)
|
|
Preferred dividends
|
|
(65,000
|
)
|
|
|
(65,000
|
)
|
|
|
(131,000
|
)
|
|
|
|
(131,000
|
)
|
|
Net income (loss) applicable to common stock
|
$
|
2,048,000
|
|
|
$
|
2,440,000
|
|
|
$
|
763,000
|
|
|
|
$
|
(748,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income (loss) per common share
|
$
|
0.15
|
|
|
$
|
0.19
|
|
|
$
|
0.05
|
|
|
|
$
|
(0.06
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income (loss) per common share
|
$
|
0.15
|
|
|
$
|
0.19
|
|
|
$
|
0.05
|
|
|
|
$
|
(0.06
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends per common share
|
$
|
0.04
|
|
|
$
|
0.04
|
|
|
$
|
0.08
|
|
|
|
$
|
0.08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding-basic
|
|
14,050,000
|
|
|
|
12,789,000
|
|
|
|
14,039,000
|
|
|
|
|
12,114,000
|
|
|
Weighted-average common shares outstanding-diluted
|
|
14,050,000
|
|
|
|
12,789,000
|
|
|
|
14,039,000
|
|
|
|
|
12,114,000
|
|
Investor Contact:
ICR
John Mills
Partner
310.954.1105
Source: Limoneira Company
News Provided by Acquire Media
