-Second Quarter Lemon Revenue and Carton Volume Increase 10% Versus
Last Year-
-Company Reiterates Fiscal Year 2016 Guidance Ranges -
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, 2016 and
reiterated its fiscal year 2016 guidance ranges.
Fiscal Year 2016 Second Quarter Results
For the second quarter of fiscal year 2016, revenue was $27.4 million,
compared to revenue of $28.3 million in the second quarter of the
previous fiscal year. Agribusiness revenue was $25.9 million compared to
$26.9 million in the second quarter last fiscal year, primarily due to
lower avocado sales because the Company began its avocado harvest later
in fiscal year 2016 than fiscal year 2015. Rental operations revenue was
$1.4 million in the second quarter of fiscal year 2016, compared to $1.3
million in the second quarter of last fiscal year. Real estate
development revenue was $8,000 compared to $18,000 in the second quarter
last fiscal year.
Agribusiness revenue for the second quarter of fiscal year 2016 includes
$20.8 million in lemon sales, compared to $18.8 million of lemon sales
during the same period of fiscal year 2015, primarily the result of
higher prices and volume of fresh lemons sold compared to the same
period in fiscal year 2015. Approximately 780,000 cartons of fresh
lemons were sold during the second quarter of fiscal year 2016 at a
$22.44 average price per carton compared to approximately 711,000
cartons sold at a $21.94 average price per carton during the second
quarter of fiscal year 2015. Avocado revenue for the second quarter of
fiscal year 2016 was $1.2 million, compared to $4.1 million in the same
period last year, primarily the result of decreased prices and volume of
avocados sold compared to the same period in fiscal year 2015. The
Company recognized $2.6 million of orange revenue in each of the second
quarters of fiscal year 2016 and 2015. Specialty citrus and other crop
revenues were $1.3 million in the second quarter of fiscal year 2016,
compared to $1.4 million in the same period of fiscal year 2015. Second
quarter of fiscal year 2016 results for oranges and specialty citrus
reflect lower prices partially offset by higher volume compared to the
same period in fiscal year 2015.
Costs and expenses for the second quarter of fiscal year 2016 were $25.2
million compared to $24.1 million in the second quarter of last fiscal
year. The second quarter of fiscal year 2016 increase in operating
expenses was primarily attributable to increases in agribusiness costs
partially offset by decreases in selling, general and administrative
costs. Agribusiness costs and expenses are $1.2 million higher for the
second quarter of fiscal year 2016 compared to the second quarter of
last fiscal year primarily attributable to increases in packing, harvest
and third-party grower costs mainly due to higher lemon sales and
harvest volume, partially offset by lower growing costs.
Operating income for the second quarter of fiscal year 2016 was $2.2
million, compared to a $4.1 million operating income in the second
quarter of the previous fiscal year. Net income applicable to common
stock, after preferred dividends, for the second quarter of fiscal year
2016 was $1.1 million, compared to net income applicable to common stock
of $2.4 million in the second quarter of fiscal year 2015. Net income
per diluted share for the second quarter of fiscal year 2016 was $0.08
compared to a net income per diluted share of $0.17 for the same period
of fiscal year 2015, based on approximately 14.2 million and 14.1
million weighted average diluted common shares outstanding, respectively.
EBITDA was $3.4 million in the second quarter of fiscal year 2016,
compared to $5.0 million in the same period of fiscal year 2015. A
reconciliation of EBITDA to net income is provided at the end of this
release.
Fiscal Year 2016 First Six Months Results
For the six months ended April 30, 2016, revenue was $52.4 million,
compared to $56.3 million in the same period last year. Operating loss
for the first six months of fiscal year 201 was $4.1 million, compared
to operating income of $1.6 million in the same period last year. Net
loss applicable to common stock, after preferred dividends, was $3.0
million for the first six months of fiscal year 2016, compared to net
income of $0.8 million in the same period last year. Net loss per
diluted share for the first six months of fiscal year 2016 was $0.21 on
approximately 14.2 million weighted average diluted common shares
outstanding, compared to net earnings per diluted share of $0.06 on
approximately 14.1 million weighted average diluted common shares
outstanding in the same period of fiscal year 2015.
EBITDA for the first six months of fiscal year 2016 was ($1.3) million,
compared to EBITDA of $3.8 million in the same period last year. A
reconciliation of EBITDA to net income is provided at the end of this
release.
The decrease in operating results for the six months ended April 30,
2016 compared to the same period last year is impacted by $2.9 million
lower avocado sales because the Company began its avocado harvest later
in fiscal year 2016 compared to last year. In addition, the six months
ended April 30, 2016 results of operations include $1.2 million of
transaction costs paid upon entering the previously announced joint
venture with the Lewis Group of Companies. Such costs are included in
real estate development costs.
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. Development grading on
the project is expected to begin in early calendar year 2017 and lot
sales are estimated to begin at the end of calendar year 2017. The joint
venture's results of operations are expected to be recognized by the
Company under the equity method of accounting. The Company contributed
$0.5 million to the joint venture in the second quarter of fiscal year
2016 and an additional $0.5 million in May 2016 matching Lewis'
contributions to fund on-going development activities.
Management Comments
Harold Edwards, President and Chief Executive Officer, stated, "Our
second quarter results reflect higher prices and volume of fresh lemons
sold, which were offset by the timing of avocado shipments moving into
the third quarter compared to shipments occurring in the second quarter
of last year."
Mr. Edwards continued, "We are excited to be working with the Lewis
organization on the Harvest at Limoneira project. It is rewarding to be
making progress on the development and we expect to begin selling lots
at the end of 2017."
Balance Sheet and Liquidity
During the first six months of fiscal year 2016, net cash used in
operating activities was $5.9 million, compared to $1.5 million in the
prior year period. Net cash used in investing activities was $7.5
million in the first six months of fiscal year 2016, compared to $16.4
million in the prior year period. Net cash provided by financing
activities was $13.4 million in the first six months of fiscal year
2016, compared to $17.9 million in the same period last year. Long-term
debt as of April 30, 2016 was $102.5 million, compared to $89.1 million
at the end of fiscal year 2015.
Recent Business Highlights
A project to double the capacity and increase the efficiency of the
Company's lemon packing facilities became operational in March 2016 and
the Company expects to begin realizing the efficiency benefits of this
project during the third quarter of fiscal year 2016. The project is
estimated to cost approximately $28.0 million in the aggregate.
Alex Teague, Senior Vice President, stated, "I am pleased with the
expansion and modernization of our lemon packing house which became
operational in March of 2016. We believe we are well positioned to
increase the profitability of our lemon business and anticipate
meaningful cost savings and increased efficiencies as our lemon packing
and sales volume continues to increase."
Mr. Teague continued, "We are excited about the recently announced
formation of Limoneira S. A. and partnership with South African based
Real Citrus as another component of our One World of Citrus model. This
represents another step towards our mission of enhancing the 52-week
citrus supply chain for our global customers."
On March 22, 2016, the Company declared a quarterly cash dividend of
$0.05 per common share, which was paid on April 15, 2016 in the
aggregate amount of approximately $0.7 million to stockholders of record
on April 4, 2016.
Reconfirming 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 and
expects to sell approximately 8.5 to 9.5 million pounds of avocados at
approximately $0.80 per pound.
The Company is reiterating its guidance range for operating income,
EBITDA, and earnings per diluted share for fiscal year 2016. The Company
expects operating income for fiscal year 2016 to be approximately $8.6
million to $9.1 million. Fiscal year 2016 EBITDA is expected to be in
the range of $14.6 million to $15.1 million. The Company expects fiscal
year 2016 earnings per diluted share to be in the range of $0.28 to
$0.33. 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.
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 June 9,
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) 726-2413, and international participants should
dial (913) 312-0639. 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, 2016, by calling (877) 870-5176 from the U.S. or (858)
384-5517 from international locations to access the playback; passcode
is 120742.
About Limoneira Company
Limoneira Company, a 124-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 measures are
widely used by analysts, investors and lenders as well as by management
in assessing our Company's financial performance and business trends
relating to our results of operations and financial condition. These
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 "Reconfirming 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 (loss), 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,
|
|
|
|
2016
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
1,222,000
|
|
$
|
2,563,000
|
|
$
|
(2,690,000
|
)
|
|
$
|
1,115,000
|
|
Interest expense, net
|
|
|
344,000
|
|
|
45,000
|
|
|
563,000
|
|
|
|
57,000
|
|
Income taxes
|
|
|
562,000
|
|
|
1,456,000
|
|
|
(1,605,000
|
)
|
|
|
701,000
|
|
Depreciation and amortization
|
|
|
1,285,000
|
|
|
980,000
|
|
|
2,413,000
|
|
|
|
1,969,000
|
|
EBITDA
|
|
$
|
3,413,000
|
|
$
|
5,044,000
|
|
$
|
(1,319,000
|
)
|
|
$
|
3,842,000
|
|
|
|
Limoneira Company
|
|
|
|
Consolidated Balance Sheets (unaudited)
|
|
|
|
|
|
April 30,
|
|
October 31,
|
|
|
|
2016
|
|
2015
|
|
Current assets:
|
|
|
|
|
|
Cash
|
|
$
|
46,000
|
|
$
|
39,000
|
|
Accounts receivable, net
|
|
|
12,005,000
|
|
|
7,420,000
|
|
Cultural costs
|
|
|
1,420,000
|
|
|
3,916,000
|
|
Prepaid expenses and other current assets
|
|
|
3,128,000
|
|
|
2,387,000
|
|
Income taxes receivable
|
|
|
1,453,000
|
|
|
-
|
|
Total current assets
|
|
|
18,052,000
|
|
|
13,762,000
|
|
|
|
|
|
|
|
Property, plant and equipment, net
|
|
|
147,962,000
|
|
|
128,951,000
|
|
Real estate development
|
|
|
100,734,000
|
|
|
96,067,000
|
|
Equity in investments
|
|
|
3,468,000
|
|
|
3,047,000
|
|
Investment in Calavo Growers, Inc.
|
|
|
20,581,000
|
|
|
18,508,000
|
|
Other assets
|
|
|
8,797,000
|
|
|
9,035,000
|
|
Total Assets
|
|
$
|
299,594,000
|
|
$
|
269,370,000
|
|
|
|
|
|
|
|
Liabilities and stockholders' equity
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
Accounts payable
|
|
$
|
5,551,000
|
|
$
|
6,611,000
|
|
Growers payable
|
|
|
6,731,000
|
|
|
5,841,000
|
|
Accrued liabilities
|
|
|
3,185,000
|
|
|
5,864,000
|
|
Fair value of derivative instrument
|
|
|
717,000
|
|
|
767,000
|
|
Current portion of long-term debt
|
|
|
2,464,000
|
|
|
589,000
|
|
Total current liabilities
|
|
|
18,648,000
|
|
|
19,672,000
|
|
Long-term liabilities:
|
|
|
|
|
|
Long-term debt, less current portion
|
|
|
102,520,000
|
|
|
89,079,000
|
|
Deferred income taxes
|
|
|
20,448,000
|
|
|
19,425,000
|
|
Other long-term liabilities
|
|
|
5,348,000
|
|
|
7,641,000
|
|
Sale-leaseback deferral (Note 8)
|
|
|
21,591,000
|
|
|
-
|
|
Total liabilities
|
|
|
168,555,000
|
|
|
135,817,000
|
|
Commitments and contingencies
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
Series B Convertible Preferred Stock - $100.00 par value (30,000
shares authorized: 29,000 and 29,500 shares issued and outstanding
at April 30, 2016 and October 31, 2015, respectively) (8.75% coupon
rate)
|
|
|
2,900,000
|
|
|
2,950,000
|
|
|
|
|
|
|
|
Series B-2 Convertible Preferred Stock - $100.00 par value (10,000
shares authorized: 9,300 shares issued and outstanding at April
30, 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 April 30,
2016 and October 31, 2015)
|
|
|
-
|
|
|
-
|
|
Common Stock - $.01 par value (19,900,000 shares authorized:
14,178,226 and 14,135,080 shares issued and outstanding at April
30, 2016 and October 31, 2015, respectively)
|
|
|
142,000
|
|
|
141,000
|
|
Additional paid-in capital
|
|
|
91,132,000
|
|
|
90,759,000
|
|
Retained earnings
|
|
|
22,795,000
|
|
|
27,216,000
|
|
Accumulated other comprehensive income
|
|
|
4,739,000
|
|
|
3,156,000
|
|
Total stockholders' equity
|
|
|
118,808,000
|
|
|
121,272,000
|
|
Total Liabilities and Stockholders' Equity
|
|
$
|
299,594,000
|
|
$
|
269,370,000
|
|
|
|
Limoneira Company
|
|
|
|
Consolidated Statements of Operations (unaudited)
|
|
|
|
|
|
Three months ended
|
|
Six months ended
|
|
|
|
April 30,
|
|
April 30,
|
|
|
|
|
2016
|
|
|
|
2015
|
|
|
|
2016
|
|
|
|
2015
|
|
|
Net revenues:
|
|
|
|
|
|
|
|
|
|
Agribusiness
|
|
$
|
25,946,000
|
|
|
$
|
26,919,000
|
|
|
$
|
49,513,000
|
|
|
$
|
53,802,000
|
|
|
Rental operations
|
|
|
1,411,000
|
|
|
|
1,340,000
|
|
|
|
2,819,000
|
|
|
|
2,458,000
|
|
|
Real estate development
|
|
|
8,000
|
|
|
|
18,000
|
|
|
|
20,000
|
|
|
|
28,000
|
|
|
Total net revenues
|
|
|
27,365,000
|
|
|
|
28,277,000
|
|
|
|
52,352,000
|
|
|
|
56,288,000
|
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
Agribusiness
|
|
|
21,238,000
|
|
|
|
20,023,000
|
|
|
|
46,710,000
|
|
|
|
45,837,000
|
|
|
Rental operations
|
|
|
873,000
|
|
|
|
759,000
|
|
|
|
1,822,000
|
|
|
|
1,564,000
|
|
|
Real estate development
|
|
|
195,000
|
|
|
|
239,000
|
|
|
|
1,631,000
|
|
|
|
481,000
|
|
|
Selling, general and administrative
|
|
|
2,844,000
|
|
|
|
3,116,000
|
|
|
|
6,308,000
|
|
|
|
6,783,000
|
|
|
Total costs and expenses
|
|
|
25,150,000
|
|
|
|
24,137,000
|
|
|
|
56,471,000
|
|
|
|
54,665,000
|
|
|
Operating income (loss)
|
|
|
2,215,000
|
|
|
|
4,140,000
|
|
|
|
(4,119,000
|
)
|
|
|
1,623,000
|
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
|
(344,000
|
)
|
|
|
(45,000
|
)
|
|
|
(563,000
|
)
|
|
|
(57,000
|
)
|
|
Equity in losses of investments
|
|
|
(143,000
|
)
|
|
|
(97,000
|
)
|
|
|
(29,000
|
)
|
|
|
(12,000
|
)
|
|
Other income, net
|
|
|
56,000
|
|
|
|
21,000
|
|
|
|
416,000
|
|
|
|
262,000
|
|
|
Total other income (expense)
|
|
|
(431,000
|
)
|
|
|
(121,000
|
)
|
|
|
(176,000
|
)
|
|
|
193,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income tax (provision) benefit
|
|
|
1,784,000
|
|
|
|
4,019,000
|
|
|
|
(4,295,000
|
)
|
|
|
1,816,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax (provision) benefit
|
|
|
(562,000
|
)
|
|
|
(1,456,000
|
)
|
|
|
1,605,000
|
|
|
|
(701,000
|
)
|
|
Net income (loss)
|
|
|
1,222,000
|
|
|
|
2,563,000
|
|
|
|
(2,690,000
|
)
|
|
|
1,115,000
|
|
|
Preferred dividends
|
|
|
(157,000
|
)
|
|
|
(158,000
|
)
|
|
|
(315,000
|
)
|
|
|
(317,000
|
)
|
|
Net income (loss) applicable to common stock
|
|
$
|
1,065,000
|
|
|
$
|
2,405,000
|
|
|
$
|
(3,005,000
|
)
|
|
$
|
798,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income (loss) per common share
|
|
$
|
0.08
|
|
|
$
|
0.17
|
|
|
$
|
(0.21
|
)
|
|
$
|
0.06
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income (loss) per common share
|
|
$
|
0.08
|
|
|
$
|
0.17
|
|
|
$
|
(0.21
|
)
|
|
$
|
0.06
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends per common share
|
|
$
|
0.05
|
|
|
$
|
0.05
|
|
|
$
|
0.10
|
|
|
$
|
0.09
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding-basic
|
|
|
14,174,000
|
|
|
|
14,124,000
|
|
|
|
14,159,000
|
|
|
|
14,109,000
|
|
|
Weighted-average common shares outstanding-diluted
|
|
|
14,174,000
|
|
|
|
14,124,000
|
|
|
|
14,159,000
|
|
|
|
14,109,000
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20160609006321/en/
Investor Contact:
ICR
John Mills
Partner
646-277-1254
Source: Limoneira Company
News Provided by Acquire Media
