Picture supply: The Motley Idiot.
DATE
Tuesday, September 9, 2025 at 4:30 p.m. ET
CALL PARTICIPANTS
President and Chief Govt Officer — Harold Edwards
Govt Vice President and Chief Monetary Officer — Mark Palamountain
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RISKS
Agribusiness incomedeclined by $15.9 million, from $61.8 million in Q3 FY2024 to $45.9 million in Q3 FY2025, as a consequence of ongoing lemon pricing stress and lowered contemporary utilization.
Working efficiencyshifted from $9 million in working revenue to a $600,000 working loss, pushed by decrease lemon and avocado revenues.
Internet revenuefell from $6.5 million in Q3 FY2024 to a $1 million internet loss for Q3 FY2025, whereas adjusted EBITDA (non-GAAP) decreased from $13.8 million to $3 million over the identical interval.
Lengthy-term debtwas $63.3 million as of Q3 FY2025, leading to a internet debt place of $61.3 million.
TAKEAWAYS
Complete internet income— $47.5 million, down $15.8 million from final 12 months, primarily as a consequence of lemon market pressures.
Contemporary packed lemon gross sales— $23.8 million from promoting 1.4 million cartons at $17.02 per carton, in comparison with $25.8 million at $18.43 per carton for a similar quantity final 12 months.
Brokered and different lemon gross sales— $3.8 million versus $9.8 million, indicating a $6 million decline on this sub-segment year-over-year.
Avocado income— $8.5 million on 5.7 million kilos at $1.50 per pound, down from $13.9 million on 8.9 million kilos at $1.57 per pound, attributed to a decrease manufacturing cycle.
Orange income— $1.7 million from 94,000 cartons at $18 per carton, up from $1.2 million on 43,000 cartons at $26.98 per carton, as quantity features offset value declines.
Farm administration income— $100,000, down from $3.2 million final 12 months, as a result of termination of an settlement as of March 31, 2025.
Adjusted internet loss for diluted EPS— $400,000 or 2¢ per share, versus adjusted internet revenue of $7.8 million or 42¢ per share final 12 months.
Strategic partnership with Sunkist— Anticipated to ship $5 million in annual value financial savings and EBITDA enhancements starting in FY2026, whereas increasing entry to new high-quality clients.
Avocado acreage growth— 700 acres of nonbearing timber anticipated to develop into totally productive within the subsequent two to 4 years, which administration stated, “will likely be a close to 100% improve in avocado-producing acreage.” in accordance with Harold Edwards
Actual property improvement— Administration expects $155 million in distributions from tasks over the following 5 fiscal years, with the Harvest at Limoneira venture progressing forward of schedule.
Water rights sale— $1.7 million proceeds had been generated in January 2025, leading to $1.5 million in recorded features.
Lengthy-term debt— $63.3 million with $2.1 million in money, resulting in a $61.3 million internet debt place as of Q3 FY2025.
Lemco Del Mar improvement— $3 million to $5 million of entitlement and planning prices over three to 5 years, with most prices capitalized and two main “worth triggers” depending on venture milestones.
SUMMARY
Administration introduced a key operational partnership with Sunkist aiming to enhance structural effectivity and market entry, with focused EBITDA enhancements scheduled to start the next fiscal 12 months. The growth of avocado acreage is predicted to drive substantial natural quantity progress starting in FY2027, as 700 acres enter full manufacturing. The corporate accelerated its actual property monetization technique, highlighting Harvest at Limoneira’s faster-than-anticipated progress and the Lemco Del Mar infill property as a brand new high-value venture underneath entitlement assessment. The quarter included express plans for $155 million in actual property distributions over the following 5 fiscal years, highlighting dependence on non-operating money movement sources for long-term worth creation.
CEO Edwards stated, “We anticipate lemons to return to profitability with extra normalized pricing and contemporary utilization ranges in fiscal 12 months 2026.”
The CFO said, “Avocado pricing and quantity had been on plan, and we achieved our quantity objectives for FY2025.” regardless of the business’s naturally fluctuating quantity cycle.
The corporate plans extra avocado plantings over the following two fiscal years to increase manufacturing capability past present expectations.
Sunkist partnership is described as a “elementary” enterprise mannequin change anticipated to enhance resilience to market volatility and unlock new buyer channels.
INDUSTRY GLOSSARY
Contemporary utilization: The proportion of harvested lemons which are bought as contemporary fruit, somewhat than diverted to juice or different processed varieties.
Entitlement: The authorized and regulatory course of required to acquire approval for actual property improvement, usually comprising a number of authorities and group opinions.
SOAR: Ventura County’s “Save Open Area and Agricultural Assets” initiative requiring voter approval for sure agricultural-to-urban land conversions.
CEQA: California Environmental High quality Act, mandating environmental impression evaluation for important land improvement tasks.
Full Convention Name Transcript
Operator: Greetings, and welcome to the Limoneira’s Third Quarter 2025 Monetary Outcomes Convention Name. At the moment, all contributors are in a listen-only mode. A quick query and reply session will comply with the formal presentation. It’s now my pleasure to introduce your host, Nidra Thompson with ICR. You could start. Good afternoon, everybody.
Nidra Thompson: And thanks for becoming a member of us for Limoneira’s Third Quarter Fiscal 12 months 2025 Convention Name. On the decision immediately are Harold Edwards, President and Chief Govt Officer, and Mark Palamountain, Govt Vice President and Chief Monetary Officer. By now, everybody ought to have entry to the third quarter fiscal 12 months 2025 earnings launch that went out immediately at roughly 4:05 PM Jap Time. When you have not had an opportunity to view the discharge, it is obtainable on the Investor Relations portion of the corporate’s website at limoneira.com. This name is being webcast, and a replay will likely be obtainable on Limoneira’s web site.
Earlier than we start, we would wish to remind everybody that ready remarks include forward-looking statements, and administration could make extra forward-looking statements in response to your questions. Such statements contain numerous recognized and unknown dangers and uncertainties, a lot of that are exterior the corporate’s management and will trigger its future outcomes, efficiency, or achievements to vary considerably from the outcomes, efficiency, or achievements expressed or implied by such forward-looking statements. Vital components that would trigger or contribute to such variations embrace dangers detailed within the firm’s Kind 10-Qs and 10-Ks filed with the SEC and people talked about within the earnings launch.
Besides as required by legislation, we undertake no obligation to replace any forward-looking or different statements herein, whether or not on account of new info, future occasions, or in any other case. Please be aware that in immediately’s name, we will likely be discussing non-GAAP monetary measures, together with outcomes on an adjusted foundation. We imagine these adjusted monetary measures can facilitate a extra full evaluation and larger understanding of Limoneira’s ongoing outcomes of operations, notably when evaluating underlying outcomes from interval to interval. We have now supplied as a lot element as doable on any gadgets which are mentioned on an adjusted foundation. Additionally, throughout the firm’s earnings launch and in immediately’s ready remarks, we embrace adjusted EBITDA and adjusted diluted EPS, that are non-GAAP monetary measures.
A reconciliation of adjusted EBITDA and adjusted diluted EPS to probably the most straight comparable GAAP monetary measures is included within the firm’s press launch, which has been posted to its web site. And with that, it is my pleasure to show the decision over to the corporate’s President and CEO, Mr. Harold Edwards.
Harold Edwards: Thanks, Deirdre, and good afternoon, everybody. In the course of the third quarter, we made important strides in unlocking long-term worth via our two-part worth creation technique: agriculture manufacturing optimization and land and water worth creation. As we enter the fourth quarter and switch our consideration to fiscal 12 months 2026, we’re excited concerning the worthwhile progress alternatives forward. Within the third quarter, we continued to navigate difficult lemon market circumstances with pricing pressures within the first two months. Although we noticed enchancment within the closing months, as we captured greater costs for fruit held in storage.
Our contemporary utilization was decrease as a result of strategic timing, we stay assured in attaining our quantity objectives for each lemons and avocados in fiscal 12 months 2025. As well as, we anticipate pricing to enhance in fiscal 2026 as a consequence of anticipated shortages in a number of worldwide areas. Our strategic partnership with Sunkist for citrus gross sales and advertising and marketing stays on observe to drive $5 million in annual value financial savings and EBITDA enhancements beginning in fiscal 12 months 2026. This partnership will unlock entry to new high-quality clients whereas creating the operational efficiencies we have mentioned. We anticipate lemons to return to profitability with extra normalized pricing and contemporary utilization ranges in fiscal 12 months 2026.
Our avocado enterprise continues to increase, with pricing and quantity on plan in the course of the quarter. We anticipate a major improve in avocado manufacturing as our newly planted acreage begins maturing in fiscal 12 months 2027 and past. We have now 700 acres of nonbearing avocados estimated to develop into full bearing over the following two to 4 years, enabling sturdy natural progress. This will likely be a close to 100% improve in avocado-producing acreage. Our actual property improvement continues to exceed expectations. Harvest at Limoneira is promoting properties forward of schedule, and we proceed to anticipate future distributions from our actual property tasks to complete roughly $155 million over the following 5 fiscal years.
At present, I am additionally excited to announce our exploration of improvement choices for our Lienco Del Mar property. This 221-acre agricultural infill property bordered by developed areas within the metropolis of Ventura presents a possibility for residential improvement that straight addresses Ventura County’s essential housing scarcity. As a traditionally native firm, Limoneira is devoted to serving to remedy this housing disaster. We imagine {that a} sturdy group wants properties for everybody, and we’re able to do our half. The Limco Del Mar Ranch is ideally suited to environment friendly, well-planned infill improvement that will stimulate financial progress, create jobs, and contribute to vibrant, livable communities.
We’re dedicated to conducting a complete community-based planning course of, together with full CEQA, the California Environmental High quality Act assessment, metropolis of Ventura Metropolis Council assessment, a SOAR save open area and agricultural assets vote, and the LAFCO native company formation fee assessment course of for annexation to the town of Ventura. Our aim is to create a pathway to design, allow, and develop new properties that can meet the wants of Ventura County’s residents. We proceed to advance our water monetization efforts. In January 2025, we bought water pumping rights within the Santa Paula Basin for $30,000 per acre-foot throughout three transactions, producing $1.7 million in proceeds and recording $1.5 million of features.
In abstract, we’re executing a complete technique that positions us for long-term progress. Our citrus operational enhancements via the Sunkist partnership, increasing avocado manufacturing, accelerating actual property improvement, including new housing improvement alternatives, and ongoing water worth creation all contribute to constructing sustainable long-term shareholder worth. And with that, I am going to now flip the decision over to Mark to debate our third quarter outcomes.
Mark Palamountain: Thanks, Harold, and good afternoon, everybody. Earlier than I start, I might remind you it’s best to view our enterprise on an annual, not quarterly foundation, as a result of seasonal nature of our enterprise. Traditionally, our first and fourth quarters are the seasonally softer quarters, whereas our second and third quarters are stronger. For 2025, complete internet income was $47.5 million in comparison with complete internet income of $63.3 million within the third quarter of the earlier fiscal 12 months. Agribusiness income was $45.9 million in comparison with $61.8 million within the third quarter final 12 months. Different operations income was $1.5 million for 2025 and 2024.
The decline in agribusiness income stems primarily from continued pricing stress within the lemon market in the course of the first two months of the quarter, although we noticed enchancment in July. Moreover, our contemporary utilization was decrease as we held lemons longer in storage to seize greater costs in the course of the closing month of the quarter. Trying past this 12 months, the citrus gross sales and advertising and marketing plan we introduced with Sunkist is anticipated to reinforce our resilience to market volatility by making a extra environment friendly value construction, resulting in an anticipated $5 million in EBITDA enchancment throughout fiscal 12 months 2026. Agribusiness income for 2025 consists of $23.8 million in contemporary packed lemon gross sales in comparison with $25.8 million throughout the identical interval of fiscal 12 months 2024.
Roughly 1.4 million cartons of US packed contemporary lemons had been bought throughout 2025 at a $17.02 common value per carton in comparison with 1.4 million cartons bought at an $18.43 common value per carton throughout 2024. Brokered lemons and different lemon gross sales had been $3.8 million and $9.8 million in 2025 and 2024, respectively. The corporate acknowledged $8.5 million of avocado income in 2025 in comparison with $13.9 million of avocado income in the identical interval of fiscal 12 months 2024. Roughly 5.7 million kilos of avocados had been bought in mixture throughout 2025 at a $1.50 common value per pound in comparison with roughly 8.9 million kilos bought at a $1.57 common value per pound throughout 2024.
The California avocado crop usually experiences alternating years of excessive and low manufacturing as a consequence of plant physiology and was the first motive for decrease quantity this 12 months in comparison with final 12 months. Each avocado pricing and quantity had been on plan, and we achieved our quantity objectives for fiscal 12 months 2025. The corporate acknowledged $1.7 million of orange income in 2025 in comparison with $1.2 million in 2024. Roughly 94,000 cartons of oranges had been bought throughout 2025 at an $18 common value per carton in comparison with roughly 43,000 cartons bought at a $26.98 common value per carton throughout 2024. Specialty citrus and wine grape income had been $600,000 for 2025 and 2024.
Farm administration revenues had been $100,000 in 2025 in comparison with $3.2 million in the identical interval of fiscal 12 months 2024. The decline was as a result of termination of our farm administration settlement efficient March 31, 2025. Complete value and bills for 2025 decreased to $48.1 million in comparison with $54.3 million within the third quarter of final 12 months. Working loss for 2025 was $600,000 in comparison with working revenue of $9 million within the third quarter of the earlier fiscal 12 months. Internet loss relevant to frequent inventory after most popular dividends for 2025 was $1 million in comparison with internet revenue relevant to frequent inventory of $6.5 million in 2024.
Internet loss per diluted share for 2025 was 6¢ in comparison with internet revenue per diluted share of 35¢ for a similar interval of fiscal 12 months 2024. Adjusted internet loss for diluted EPS for 2025 was $400,000 or 2¢ per diluted share in comparison with adjusted internet revenue per diluted EPS of $7.8 million or 42¢ per diluted share in the identical interval of fiscal 12 months 2024. A reconciliation of internet revenue or loss attributable to Limoneira Firm to adjusted internet revenue or loss for diluted EPS is supplied on the finish of our earnings launch. Non-GAAP adjusted EBITDA for 2025 was $3 million in comparison with $13.8 million in the identical interval of fiscal 12 months 2024.
A reconciliation of internet revenue or loss attributable to Limoneira Firm to adjusted EBITDA can be supplied on the finish of our earnings launch. Turning now to our stability sheet and liquidity. Lengthy-term debt as of July 31, 2025, was $63.3 million in comparison with $40 million on the finish of fiscal 12 months 2024. Debt ranges as of July 31, 2025, much less the $2.1 million of money readily available resulted in a internet debt place of $61.3 million at quarter-end. In April 2025, we obtained $10 million of our share of a $20 million money distribution from our fifty-fifty actual property improvement three way partnership with the Lewis Group of Corporations.
The distribution got here from the three way partnership’s obtainable money and money equivalents, which as of July 31, 2025, totaled $36.4 million. Now I might like to show the decision again to Harold to debate our fiscal 12 months 2025 outlook and longer-term progress pipeline.
Harold Edwards: Thanks, Mark. We proceed to anticipate contemporary lemon volumes to be within the vary of 4.5 million to five million cartons for fiscal 12 months 2025, and avocado quantity is roughly 7 million kilos for fiscal 12 months 2025. Fiscal 12 months 2025 avocado quantity is decrease than fiscal 12 months 2024, primarily as a result of alternate bearing nature of avocado timber. Trying past fiscal 12 months 2025, we’ve sturdy visibility on a number of worth drivers. First, we imagine we’re in a great place to divest extra actual property belongings in fiscal 12 months 2026. Second, we anticipate to obtain a further $155 million from our actual property tasks over the following 5 fiscal years.
Third, we’ve 700 acres of nonbearing avocados estimated to develop into full bearing over the following two to 4 years, which we anticipate will allow sturdy natural progress in avocado manufacturing. Moreover, we plan to proceed increasing our plantings of avocados over the following two fiscal years. Fourth, we anticipate lemons to return to profitability with extra normalized lemon costs and contemporary utilization ranges in fiscal 12 months 2026, during which we proceed to estimate 4 million to 4.5 million cartons. Our partnership with Sunkist basically strengthens our citrus enterprise mannequin, unlocking availability to new high-quality clients and driving an anticipated $5 million in annual value financial savings starting in fiscal 12 months 2026.
This partnership positions us for sustainable EBITDA progress and creates a robust basis for long-term worth creation. And fifth, the exploration of our Lemco Del Mar property represents one other important worth creation alternative, addressing essential group wants with anticipated substantial returns for shareholders. In abstract, we’re executing on a complete technique throughout agricultural manufacturing optimization and asset monetization that positions us for each near-term resilience and long-term progress. We imagine we’ve the asset base, strategic partnerships, and operational enhancements in place to ship sustainable worth creation whereas sustaining flexibility to capitalize on extra alternatives as they come up. Operator, we are going to now open the decision to questions.
Operator: Thanks. We’ll now be conducting a query and reply session. If you need to ask a query, please press 1 in your phone keypad. A affirmation tone will point out your line is within the query queue. You could press 2 to take away your self from the queue. For contributors utilizing speaker gear, it could be crucial to choose up the handset earlier than urgent the star keys. One second, please, whereas we ballot for questions.
Operator: Our first query comes from the road of Ben Klieve with Lake Avenue Capital Markets. Please proceed together with your query.
Ben Klieve: Alright. Thanks for taking my questions. First, a few questions on the Lemco Del Mar alternative right here. It is nice to listen to that is progressing. One very particular query on is there any sort of prices flowing via the revenue assertion on this, you understand, say, via ’26, possibly related to, you understand, regulatory prices or consulting prices, something of that nature? After which second, on a better degree, what’s your imaginative and prescient for a way it will get developed over the long run? By way of what Limoneira’s function will likely be? I imply, are you going to be in search of sort of a Lewis Group kind fifty-fifty companion?
Do you need to possibly offload extra of the, you understand, sort of developmental burden on, you understand, a companion? Sort of how are you eager about that from an enormous image perspective?
Mark Palamountain: Nice query, Ben. Thanks. So a number of items to that. So we’ll begin with the fee and the revenue assertion. In order you understand, we not too long ago tendered from our place. We had 28% as the final companion and achieved as much as 55%. It is good to know we’ve a bunch of locals nonetheless concerned on this, and so we have assist from throughout. From a price perspective, it will be just like how we developed Harvest and the entitlement interval. You realize, we’re making an attempt to be conservative, considering three years on a minimal, 5 years out, and $3 to $5 million relying on that time-frame.
However the majority of these prices will likely be capitalized and won’t run via the revenue assertion. After which as we develop the venture. Now Limoneira being, you understand, the group participant behind all of this, and, you understand, Lewis has been an important companion, and we would like to have them concerned at that time. Now proper now, it is simply Limoneira working with the ball, after which we have put collectively an important group of authorized consultants and improvement consultants and county consultants to essentially determine what the group profit’s going to be, and the way we make this a profit for everyone so we will transfer it throughout the road.
And so on the finish of the day, I believe, you understand, the $3 to $5 million is an effective quantity to carry on to. And, you understand, we’re working actually laborious. We have already began and had some good progress and good assist as nicely.
Harold Edwards: Ben, I might additionally simply add that there will be two worth triggers that occur alongside this journey. The primary actual value-creating alternative will develop into evident upon entitlement. And in order talked about within the description earlier, we’ll undergo a complete CEQA assessment, a complete SOAR vote, after which assuming that we’re profitable in successful a SOAR vote, and that vote will likely be comprised of the town of Ventura residents voting to assist the venture. Assuming a majority of the residents vote sure, then we’ll work with the native company formation fee to annex the 220 acres into the town of Ventura. And at that time, it could develop into entitled. At that time, the worth creation will likely be important.
However then the second chapter of that worth creation will likely be within the precise improvement of the venture. And as Mark identified, we have had an important relationship with the Lewis Group. The best way that we have developed Harvest at Limoneira in Santa Paula has been extraordinarily profitable. However I might say after we get to the purpose of improvement, we’ll assess what the very best choices are for the group of Ventura, but in addition for the Limoneira Firm and determine at that time.
Ben Klieve: Received it. That makes loads of sense. Superb. We’ll keep tuned for updates on that in quarters to come back. I’ve received a query on the lemon facet. It is nice to see contemporary lemon costs rebound sequentially from a tough second quarter. You guys talked about sort of a normalization of pricing going into subsequent 12 months as there’s possibly some business provide constraints that must be supportive. Given the reset that the lemon market has had over the previous few years, how do you sort of take into consideration what normalized pricing is on this enterprise immediately?
After which what are the completely different sources of provide constraints that you simply see on the market which are going to be useful as you look into subsequent 12 months?
Mark Palamountain: Yeah. So Ben, we had been pleasantly stunned into August into the lemon pricing. In order we talked about, you understand, it lasted slightly longer. You realize, our common value within the quarter was in Q3 was simply over $17. August, we noticed costs within the low twenties. So nearly a $4 to $5 soar. It is, you understand, there was a little bit of a scarcity round on the East Coast. A whole lot of the imports that normally got here to the US went to Europe. And also you talked about a few of these points. And Turkey had a extremely difficult freeze, which, you understand, it is all the time laborious to get the very best evaluation.
However it might have gone all the way in which right down to damaging timber, which might be two years of crop. And so after which additionally Spain had their very own set of climate points. So subsequent 12 months, we see Spain and Turkey being brief, you understand, name it 20 to 30%, which then once more will enable our Southern Hemisphere mates to maneuver fruit there. And all of our market is about stability. Proper? And so when us, you understand, Limoneira coming again into the Sunkist, there’s much more contracted enterprise. And, you understand, we have these new clients within the quick-serve restaurant enterprise. Together with our present buyer base. We see much more potential for stability.
And I believe you will see a value with a two in entrance of it. Proper now, you understand, as I stated, August was within the low twenties, name it $23. And when you preserve a better value, and this has been historic since so long as I have been right here, coming into the autumn, you all the time have a dip into that winter. However when you’ve got a better entry level, clearly, you are going to have a decrease low. Theoretically. And in order that’s type of what it is organising. And, you understand, we’re at 12 months seven going into 12 months eight of a extremely difficult lemon surroundings. And normally, these cycles final that lengthy. Now will we’ve a mom nature occasion?
You realize, we’re unsure about that. However for probably the most half, that is what provides us confidence is the stability all over the world. The lemons we have seen come out, together with our personal, at a better start line going into subsequent 12 months.
Ben Klieve: Received it. Received it. That’d be nice to see. Superb. Yet one more for me, and I am going to get again in queue. And it could be slightly untimely on the ’26 outlook for avocados. However given the sort of biannual nature of the crop and the California harvest full at this level, do you may have any sort of tough concepts of what your expectations are for avocado volumes right here trying into ’26?
Harold Edwards: So it is slightly untimely, however, you understand, we’re trying up into timber proper now. You are seeing a set. I might say that as we’re counting items and assuming we maintain on to the fruit, I might anticipate it to not be larger than this 12 months. It appears like it should be just like this 12 months to much less, but it surely’s too early to essentially know that. So I would not depend on an enormous rebound in manufacturing. It is why we made our forward-looking feedback that we imagine our first large breakout 12 months with quantity enchancment will likely be 2027. However extra to come back. Let’s have a look at what we give you.
And after we speak within the subsequent name, we’ll have a a lot better concept of what we’re for 2026 with avocados.
Ben Klieve: Superb. Nicely, I recognize that. Thanks for taking my questions. I am going to get again in queue.
Harold Edwards: Thanks.
Mark Palamountain: Thanks.
Operator: And as a reminder, if anybody has any questions, you could press 1 in your phone keypad to affix the queue. And, once more, another time. When you have any questions, urgent star 1 will be a part of you into the query and reply session. To ask a name. Ask a query.
Operator: And we’ve reached the top of the query and reply session. I want to flip the ground again over to CEO Harold Edwards for closing remarks.
Harold Edwards: Thanks. I might wish to level out that as of this afternoon, we’ve up to date our investor deck, which is now obtainable on our web site at limoneira.com. I might wish to thanks all in your questions and your curiosity in Limoneira. Have an important day.
Operator: And girls and gents, this concludes immediately’s convention. You could disconnect your line right now. We thanks in your participation. Have an important day.
