Stock Roundup: Limoneira Company (NASDAQ: LMNR)

On Tuesday, Shares of Limoneira Company (NASDAQ: LMNR) showed the bearish trend with a lower momentum of -2.17% and ended its trading session at $24.85. The company traded total volume of 13,495 shares as contrast to its average volume of 152.98K shares. The company has a market value of $442.98M and about 17.44M shares outstanding.

Limoneira Company (LMNR) recently stated financial results for the third quarter ended July 31, 2018.

Fiscal Year 2018 Third Quarter Results:

For the third quarter of fiscal year 2018, total net revenue was $40.00M, contrast to total net revenue of $40.40M in the third quarter of the previous fiscal year. Agribusiness revenue reduced slightly to $38.70M, contrast to $39.10M in the third quarter last year, mainly because of a smaller than expected avocado crop that was negatively influenced by an extended period of excessive heat late in the quarter. Rental operations revenue was flat as compared to the prior year period at $1.30M in the third quarter of fiscal year 2018. There were no real estate development revenues in the third quarter of fiscal year 2018 or 2017.

Agribusiness revenue for the third quarter of fiscal year 2018 includes $30.70M in lemon sales; contrast to $30.00M of lemon sales during the same period of fiscal year 2017, with the increase mainly the result of higher volume offset by lower prices of fresh lemons contrast to the same period in fiscal year 2017. About 992.0K cartons of fresh lemons were sold during the third quarter of fiscal year 2018 at a $25.91 average price per carton contrast to about 919.0K cartons sold at a $28.45 average price per carton during the third quarter of fiscal year 2017. Avocado revenue for the third quarter of fiscal year 2018 was $5.60M, contrast to $7.50M in the same period last year, mainly the result of lower prices partially offset by higher volume contrast to the same period in fiscal year 2017. The Company recognized $2.00M of orange revenue in the third quarter of fiscal year 2018, contrast to $1.10M in the same period of fiscal year 2017, mainly attributable to higher prices of oranges sold, partially offset by lower volume contrast to the same period in fiscal year 2017. Specialty citrus and other crop revenues were $0.30M in the third quarter of fiscal year 2018, contrast to $0.40M in the third quarter of fiscal year 2017.

Total costs and expenses for the third quarter of fiscal year 2018 increased to $28.50M, contrast to $27.20M in the third quarter of last fiscal year. The third quarter of fiscal year 2018 increase in operating expenses was mainly attributable to increases in agribusiness costs and expenses because of increased volumes of lemons and avocados as compared to the prior year. Costs associated with its agribusiness include in packing costs, harvest costs, growing costs, costs related to the fruit we procure and sell for third-party growers and depreciation expense.

Operating income for the third quarter of fiscal year 2018 reduced to $11.40M, contrast to income of $13.20M in the third quarter of the previous fiscal year. Net income applicable to common stock, after preferred dividends, for the third quarter of fiscal year 2018 was $8.10M and compares to $7.70M in the third quarter of fiscal year 2017. Net income per diluted share for the third quarter of fiscal year 2018 was $0.50 contrast to $0.52 in the same period of fiscal year 2017, based on about 16.60M and 15.00M, respectively weighted average diluted common shares outstanding as compared to the prior year.

EBITDA was $13.40M in the third quarter of fiscal year 2018 contrast to $14.90M in the same period of fiscal year 2017.

Fiscal Year 2018 First Nine Months Results:

For the nine months ended July 31, 2018, revenue increased to $114.70M, contrast to $105.40M in the same period last year. Operating income for the first nine months of fiscal year 2018 grew to $19.10M, contrast to an operating income of $16.10M in the same period last year. Net income applicable to common stock, after preferred dividends, was $23.00M for the first nine months of fiscal year 2018, contrast to net income of $8.80M in the same period last year. Net income per diluted share for the first nine months of fiscal year 2018 was $1.50, contrast to a net income per diluted share of $0.62 in the same period of fiscal 2017. Because of the Tax Cuts and Jobs Act of 2017, the Company recognized a non-cash $10.00M, or $0.64 per diluted share, one-time tax benefit associated with the decrease in its deferred tax liability balance during the first quarter of fiscal year 2018. Excluding this non-cash tax benefit, diluted net income per share for the first nine months of fiscal year 2018 was $0.86.

EBITDA for the first nine months of fiscal year 2018 was $24.60M, contrast to EBITDA of $21.50M in the same period last year.

Balance Sheet and Liquidity:

In June 2018, the Company accomplished a public offering of 3,136.0K shares of its common stock at a public offering price of $22.00 per share, for total gross proceeds of about $69.00M. In June and July 2018, the Company used the offering proceeds to pay down debt, purchase San Pablo ranch and purchase Oxnard Lemon’s packinghouse, related land and certain other assets.

During the first nine months of fiscal year 2018, net cash offered by operating activities increased to $23.20M, contrast to $20.10M in the prior year. Net cash used in investing activities was $50.90M, contrast to a $23.10M use in the prior year. The increase was mainly because of the San Pablo and Oxnard Lemon acquisitions. The Company contributed $3.50M to the East Area 1 real estate development joint venture in the first nine months of fiscal year 2018, which compares to a $7.50M contribution made to the joint venture in the first nine months of fiscal year 2017. Net cash offered by financing activities was $27.60M in the first nine months of fiscal year 2018, contrast to $4.80M in the same period last year.

Long-term debt as of July 31, 2018 reduced to $70.60M, contrast to $102.10M at the end of fiscal 2017.

Recent Planned Acquisitions:

In July 2018, the Company accomplished the acquisition of San Pablo ranch and related assets in La Serena, Chile, for $13.10M. The San Pablo ranch consists of 3,317 total acres on two parcels, counting 247 acres producing lemons, 61 acres producing oranges, the opportunity to right away plant 120 acres for lemon production, as well as the potential for about 500 acres of avocado production.

Also in July 2018, the Company reached a contract to purchase a packinghouse, related land and certain other assets of Oxnard Lemon for $25.00M. This acquisition expands Limoneira’s packing capabilities and ensures Limoneira will now be a leading provider of organic lemons for the first time. Following the agreement, we attained certain hard assets of Oxnard Lemon, counting a packinghouse and related land for a purchase price of $24.70M on July 27, 2018. The closing on the purchase and sale of the soft assets of Oxnard Lemon, counting tradenames and copyrights, shall take place on or before October 31, 2018, at which point an additional $0.30M in purchase price shall be paid. In Addition To, the agreement provides that the sellers shall lease back the hard assets until October 31, 2018, following a lease agreement executed July 27, 2018.

Reiterating and Narrowing Fiscal Year 2018 Outlook:

The Company is reiterating and narrowing its fiscal year 2018 guidance.

  • The Company now anticipates to sell between 3.2 and 3.40M cartons of fresh lemons at an average price of about $25.50 per carton, contrast to the previous range of 3.1 and 3.30M cartons of fresh lemons at an average price of about $24.50 per carton,
  • The Company anticipates selling about 6.3 pounds of avocados at about $1.04 per pound contrast to the previous range of 6.0 to 6.50M pounds of avocados at about $1.30 per pound. The reduced price per pound is because of the reduced quality of fruit from the excessive heat practiced towards the end of the third fiscal quarter.
  • The Company now anticipates operating income for fiscal year 2018 to be about $15.00M to $16.10M contrast to the previous range of $15.70M to $17.80M. Fiscal year 2018 EBITDA is now expected to be in the range of $22.50M to $23.50M contrast to the previous range of $23.00M to $25.00M.

The Company offered net profit margin of 15.50% while its gross profit margin was 23.00%. ROE was recorded as 12.20% while beta factor was 0.85. The stock, as of recent close, has shown the weekly upbeat performance of 2.84% which was maintained at 14.78% in this year.

Grover Beam

Grover Beam has over 14 years experience in the financial services industry giving him a vast understanding of how news affects the financial markets. He is an active day trader spending the majority of her time analyzing earnings reports and watching commodities and derivatives. He has a Masters Degree in Economics from Westminster University with previous roles counting Investment Banking.

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