Limoneira Company (NASDAQ:LMNR) Q4 2019 Earnings Conference Call - Final Transcript

Jan 13, 2020 • 04:30 pm ET


Limoneira Company (NASDAQ:LMNR) Q4 2019 Earnings Conference Call - Final Transcript


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Harold Edwards

of lemons in the next two years and believe this additional acreage will increase our domestic supply of Limoneira-owned lemons by approximately 50% from our current level of 900,000 cartons to 1.3 million additional fresh cartons as the non-bearing and planned acreage become productive. In addition, we expect to have a steady increase in third-party grower fruit.

Turning to avocados. In fiscal year 2019, our production was down due to the previously announced extreme heat that affected production. As expected, we recognized minimal avocado revenue in 2019 but we will be back to normal production in fiscal year 2020.

Turning now to our real estate development segment. I'm happy to report that the partnership between Limoneira and The Lewis Group of Companies for the development of Harvest at Limoneira is on track. Phase 1 site improvements have been substantially completed and the joint ventures received a lot deposits from Lennar and KB Home's in fiscal year 2018. Initial lot sales representing 210 residential units closed in fiscal 2019, and we recently closed an additional 33 in the first quarter of fiscal year 2020. Longer term, we are projecting approximately $100 million in cash flow from the Harvest at Limoneira project over the next six years to nine years, which is expected to include 1,500 homes.

In addition, during the fourth quarter, we announced the sale of a multi-use facility consisting of a retail convenience store, gas station, car wash and quick serve restaurant located in Santa Paula, California. The transaction closed on August 30, 2019 and we received approximately $4 million in net proceeds and recorded a gain of approximately $600,000 in the fourth quarter.

Lastly, in October of 2019, we sold The Terraces at Pacific Crest for approximately $3 million. We received net proceeds of $2.9 million and recognized a gain of approximately $400,000 in the fourth quarter.

In summary, while our full-year fiscal 2019 results were affected by unforeseen weather conditions, it is a temporary hurdle and does not diminish the inroads we have made to position us for solid growth and improve profitability in the coming years.

And with that, I'll now turn the call over to Mark.

Mark Palamountain

Thank you, Harold, and good afternoon, everyone. I will discuss some of the details of our financial results for the fourth quarter and full-year ended October 31, 2019. I'd like to reiterate to everyone that due to the seasonal nature of our business, revenue is driven by varying harvest periods from year-to-year, and therefore, we believe it is prudent to view our business on an annual basis, not a quarterly basis. Historically, our first and fourth quarters are the seasonally softer quarters, while our second and third quarters are stronger.

For the fourth quarter of fiscal year 2019, total net revenue was $36.5 million, compared to total net revenue of $14.7 million in the fourth quarter of the previous fiscal year. Agribusiness revenue was $35.3 million, compared to $13.5 million in the fourth quarter last year. The increase was