Limoneira Co (LMNR) 2024 Q3 Earnings Call Summary
September 9, 2024 
Limoneira Co (LMNR)
| Market Cap | 0.21T |
|---|---|
| Beta | |
| P/E | 39.75452774136047 |
| EPS | 12.247158441111395 |
| Dividend | 0 |
| Dividend Yield | 0.00% |
Optimistic Highlights
- Revenue Growth
Net revenue grew by 21% to $63.3 million in Q3 2024. - Avocado Segment Performance
Avocado revenue increased significantly to $13.9 million from $3.5 million in Q3 2023. - Real Estate Development
Achieved milestones in the Harvest at Limoneira project, including closing on lot sales for 554 residential units and increasing the total number of units from 1,500 to 2,050. - Debt Reduction
Long-term debt reduced by 33% from Q2 to Q3 2024. - Adjusted EBITDA
Generated $13.8 million in adjusted EBITDA for Q3 2024, up from $2.8 million in Q3 2023.
- Revenue Growth
Pessimistic Highlights
- Specialty Citrus Revenue Decline
Specialty citrus and other crop revenue decreased to $600,000 from $1.9 million in Q3 2023. - Farm Management Revenue Decline
Farm management revenues fell to $3.2 million from $5.4 million in Q3 2023. - Orange Revenue Decline
Orange revenue decreased to $1.2 million from $1.3 million in Q3 2023.
- Specialty Citrus Revenue Decline
Company Outlook
- Avocado Volume Guidance
Raised avocado volume guidance to 14.5-15.5 million pounds for fiscal year 2024. - Lemon Volume Guidance
Lowered fresh lemon volume guidance to 4.5-5 million cartons due to late-season rains. - Future Proceeds from Real Estate
Expect to receive $180 million in total future proceeds from Harvest at Limoneira over the next seven fiscal years. - Avocado Production Expansion
Plans to expand avocado production by 1,000 acres over the next three years. - EBITDA Outlook
Strong EBITDA outlook supported by diversified agricultural improvements and real estate development.
- Avocado Volume Guidance
Q & A Highlights
Q: With just a staggering increase in the expected volume this year, can you talk about kind of what evolved over the last three months that led to such a major increase? (Ben Klieve, Lake Street Capital Markets)
A: Two factors: a much larger crop year-over-year and the decision to delay harvest, which allowed the crop size to grow and capture more favorable pricing. (Harold Edwards)
Q: What if any lessons are you taking from this year to your outlook for next year? (Ben Klieve, Lake Street Capital Markets)
A: We don't expect significant downward pressure. The team has focused on pruning and fertilization, expecting robust poundage per acre going forward. (Harold Edwards)
Q: How are you thinking about the fixed debt position in the face of declining interest rates and a healthy cash flow outlook? (Ben Klieve, Lake Street Capital Markets)
A: We are pleased with the strength of our balance sheet and will have a lower net debt position next year. (Mark Palamountain)
Q: How does your strategic review impact efforts on one world of citrus and the farm management? (Raj Sharma, B. Riley Securities)
A: The Board is evaluating all opportunities, including the ongoing enterprise, OpCo, PropCo, and strategic interest across various segments. (Harold Edwards)
Q: Can you talk about the reasons for the decline in farm management revenues and what to expect in the next few quarters? (Raj Sharma, B. Riley Securities)
A: Decisions were made for lower inputs like pesticides and pruning. Profitability is based on a per-acre fee, and we are looking to grow this in fiscal year 2025. (Harold Edwards)