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01/11 03:19
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call revealed multiple negative factors: increased debt levels, a net loss in Q3 FY2025, and a decline in adjusted EBITDA. Despite strategic plans like the merger with Sunkist and avocado production expansion, the financial performance was weak, with significant revenue and income declines. The Q&A session highlighted uncertainties in avocado volumes and management's unclear responses. These negative elements outweigh potential positives, leading to a 'Negative' sentiment rating for the stock price over the next two weeks.
Total Net Revenue $47.5 million in Q3 FY2025, down from $63.3 million in Q3 FY2024, primarily due to pricing pressure in the lemon market and lower fresh utilization.
Agribusiness Revenue $45.9 million in Q3 FY2025, down from $61.8 million in Q3 FY2024, driven by pricing pressure in the lemon market and strategic timing of lemon storage.
Fresh Packed Lemon Sales $23.8 million in Q3 FY2025, down from $25.8 million in Q3 FY2024. 1.4 million cartons sold at $17.02 per carton in Q3 FY2025 compared to $18.43 per carton in Q3 FY2024.
Brokered Lemons and Other Lemon Sales $3.8 million in Q3 FY2025, down from $9.8 million in Q3 FY2024.
Avocado Revenue $8.5 million in Q3 FY2025, down from $13.9 million in Q3 FY2024. 5.7 million pounds sold at $1.50 per pound in Q3 FY2025 compared to 8.9 million pounds at $1.57 per pound in Q3 FY2024. The decline was due to the alternate bearing nature of avocado trees.
Orange Revenue $1.7 million in Q3 FY2025, up from $1.2 million in Q3 FY2024. 94,000 cartons sold at $18 per carton in Q3 FY2025 compared to 43,000 cartons at $26.98 per carton in Q3 FY2024.
Farm Management Revenues $100,000 in Q3 FY2025, down from $3.2 million in Q3 FY2024, due to the termination of the farm management agreement effective March 31, 2025.
Total Costs and Expenses $48.1 million in Q3 FY2025, down from $54.3 million in Q3 FY2024.
Operating Loss $600,000 in Q3 FY2025, compared to operating income of $9 million in Q3 FY2024.
Net Loss Applicable to Common Stock $1 million in Q3 FY2025, compared to net income of $6.5 million in Q3 FY2024.
Net Loss Per Diluted Share $0.06 in Q3 FY2025, compared to net income per diluted share of $0.35 in Q3 FY2024.
Adjusted Net Loss Per Diluted Share $0.02 in Q3 FY2025, compared to adjusted net income per diluted share of $0.42 in Q3 FY2024.
Non-GAAP Adjusted EBITDA $3 million in Q3 FY2025, down from $13.8 million in Q3 FY2024.
Long-Term Debt $63.3 million as of July 31, 2025, up from $40 million at the end of FY2024.
Net Debt Position $61.3 million as of July 31, 2025, after accounting for $2.1 million in cash on hand.
Cash Distribution from Real Estate Joint Venture $10 million received in April 2025 from a 50-50 joint venture with The Lewis Group of Companies.
Avocado Business Expansion: 700 acres of nonbearing avocados are expected to become full-bearing over the next 2 to 4 years, leading to a near 100% increase in avocado-producing acreage. Pricing and volume are on plan, with significant production increases anticipated in fiscal year 2027 and beyond.
Strategic Partnership with Sunkist: The partnership is expected to drive $5 million in annual cost savings and EBITDA enhancements starting in fiscal year 2026. It will unlock access to new high-quality customers and create operational efficiencies.
Lemon Market Conditions: Pricing pressures were observed in the first two months of the quarter, but improvements were seen in the final month. Fresh utilization was lower due to strategic timing, but volume goals for lemons and avocados are expected to be met for fiscal year 2025.
Water Monetization: Water pumping rights in the Santa Paula Basin were sold for $30,000 per acre foot, generating $1.7 million in proceeds and $1.5 million in gains.
Real Estate Development: The Harvest at Limoneira project is ahead of schedule, with future distributions from real estate projects expected to total approximately $155 million over the next 5 fiscal years. Exploration of development options for the 221-acre Limco Del Mar property is underway, addressing Ventura County's housing shortage.
Lemon Market Pricing Pressures: The company faced challenging lemon market conditions with pricing pressures in the first two months of the quarter, leading to a decline in agribusiness revenue.
Lower Fresh Utilization: Fresh utilization of lemons was lower due to strategic timing, impacting revenue and operational efficiency.
Avocado Production Variability: The alternate bearing nature of avocado trees led to lower avocado production volume in fiscal year 2025 compared to the previous year.
Farm Management Revenue Decline: Farm management revenues dropped significantly due to the termination of a farm management agreement effective March 31, 2025.
Increased Debt Levels: Long-term debt increased to $63.3 million as of July 31, 2025, compared to $40 million at the end of fiscal year 2024, raising concerns about financial leverage.
Net Loss in Q3 FY 2025: The company reported a net loss of $1 million in Q3 FY 2025 compared to a net income of $6.5 million in the same period of the previous year.
Decline in Adjusted EBITDA: Adjusted EBITDA for Q3 FY 2025 was $3 million, a significant drop from $13.8 million in the same period of fiscal year 2024.
Lemon Market Outlook: Pricing is expected to improve in fiscal 2026 due to anticipated shortages in several international areas. Lemons are expected to return to profitability with more normalized pricing and fresh utilization levels in fiscal year 2026. Fresh lemon volumes are projected to be in the range of 4.5 million to 5 million cartons for fiscal year 2025, and 4 million to 4.5 million cartons in fiscal year 2026.
Avocado Production Growth: A significant increase in avocado production is anticipated as newly planted acreage matures in fiscal year 2027 and beyond. Approximately 700 acres of nonbearing avocados are estimated to become full-bearing over the next 2 to 4 years, nearly doubling avocado-producing acreage. Fiscal year 2025 avocado volume is projected at approximately 7 million pounds, lower than fiscal year 2024 due to the alternate bearing nature of avocado trees.
Real Estate Development: Future distributions from real estate projects are expected to total approximately $155 million over the next 5 fiscal years. Exploration of development options for the 221-acre Limco Del Mar property is underway, with plans for residential development to address Ventura County's housing shortage. This project is expected to stimulate economic growth and provide substantial returns for shareholders.
Sunkist Partnership Impact: The strategic partnership with Sunkist is anticipated to drive $5 million in annual cost savings and EBITDA enhancements starting in fiscal year 2026. This partnership is expected to unlock access to new high-quality customers and create operational efficiencies.
Water Monetization: Efforts to monetize water assets continue, with $1.7 million generated from water pumping rights sales in January 2025. Further opportunities in water value creation are being pursued.
The selected topic was not discussed during the call.
The earnings call reveals significant financial challenges, with increased losses and declining revenues across key areas. Although there are positive strategic initiatives like the Sunkist partnership and real estate development, the Q&A section highlights uncertainties, particularly in cost savings timelines and financial impacts. The strategic transformation costs and power outages further exacerbate financial woes. The lack of specific guidance and the negative financial performance outweigh the potential long-term benefits of strategic initiatives, leading to a negative sentiment.
The earnings call revealed multiple negative factors: increased debt levels, a net loss in Q3 FY2025, and a decline in adjusted EBITDA. Despite strategic plans like the merger with Sunkist and avocado production expansion, the financial performance was weak, with significant revenue and income declines. The Q&A session highlighted uncertainties in avocado volumes and management's unclear responses. These negative elements outweigh potential positives, leading to a 'Negative' sentiment rating for the stock price over the next two weeks.
The earnings call reveals a mixed outlook with several negative indicators. Financial performance is weak, with significant declines in revenue and earnings, and increased long-term debt. Despite some positive aspects like improved avocado revenue and strategic partnerships, these are overshadowed by reduced lemon volume expectations, a significant net loss, and unclear management responses in the Q&A. The overall sentiment is negative, suggesting a likely stock price decline in the range of -2% to -8% over the next two weeks.
The earnings call indicates mixed results: positive developments in avocado production and real estate ventures, but challenges due to oversupplied lemon market and increased debt. Improved EBITDA and net loss figures are offset by weak revenue performance and market risks. The Q&A section did not alleviate concerns. Given these factors and without market cap data, the stock price is likely to remain stable.
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