Limoneira Company (NASDAQ:LMNR) Q4 2019 Earnings Conference Call - Final Transcript
Jan 13, 2020 • 04:30 pm ET
Thank you. [Operator Instructions] We'll take our first question from Ben Bienvenu with Stephens, Inc. Please go ahead.
Hey, good afternoon, guys.
I want to start and ask about the carton guidance. The global guidance, 7.5 million to 9.5 million, and the domestic guidance of 5 million to 6 million. So it's a bit wider range than we've seen historically. I'm just curious, the elements within that guidance that drive variability from one into the other. And then Harold you mentioned comments, I think, briefly on wins in the first quarter. Any comments you could make that would help fill in and provide color on that would be helpful as it relates to the full year, to the extent, you have visibility at this point?
Yeah. I'd be happy to Ben. So, the tree crops across each of the districts domestically, so D3 in the desert, D1 up in the San Joaquin Valley and D2 on the California Coast, are essentially the same as the prior year. Not significantly more fruit. Last year, as we made comments to, was a record tree crop year. This year seems to be a similar year. At this point with -- we've returned back to a normal distribution of size and grades, which bodes very well for our ability to market and sell high levels of fresh utilization, which was our primary challenge last year.
With that said, we believe though that, as we've engaged in more food service contract sales, will see the crops from district one and district two, which is the -- basically the spring and the summer crops, begin to move forward, which may have an impact of selling smaller, greener fruit, which is great from a fresh sales perspective, but could influence the volume that we sell and -- meaning that we would sell fewer fresh cartons, but typically that's associated with higher pricing opportunities for us. So that's the reason we stretched out the ranges, because we think the tree crop is there. We feel very confident that we'll have at or normal fresh utilization rates. But if our Harvest strategy brings more fruit off earlier, we could see a fewer cartons going out at this point higher pricing than we initial thought. So it's that volume-price relationship that we play with every day as we sort of view what mother nature's giving us on our trees.
Okay. That's great. And then maybe just following on there. You mentioned high wins in the quarter-to-date period. What visibility do you have at this point? And just any elaboration, if you can on that, if not, we're happy to wait till next quarter to get a state of the union?
We won't know for sure until we get to the next quarter, but every year in the early fall season into the early winter season we experience -- we can experience strong Santa Ana winds and this year was no exception. We had a number of high