Limoneira Company (LMNR) Q2 2024 earnings summary

Executive summary

• Adjusted EBITDA for Q2 2024 reached $16.6 million, more than double the prior year, driven by strong performance in the Harvest at Limoneira real estate joint venture and strategic avocado harvest timing.

• Net income for Q2 2024 was $6.6 million, reversing a prior-year loss, supported by real estate JV gains and improved operational performance.

• Strategic shift underway to expand avocado acreage by 1,000 acres over three years, targeting 2,000 acres and long-term EBITDA of $45–$55 million by 2030.

• Real estate joint venture completed Phase II lot sales and secured approval to increase total residential units from 1,500 to 2,050, boosting future cash flow projections by 46%.

• The company is conducting a strategic review, including potential sale or merger, and closed a significant real estate transaction in April 2024.

Financial highlights

• Q2 2024 net revenue decreased 7% year-over-year to $44.6 million, impacted by delayed lemon harvests due to rainfall.

• Agribusiness revenue was $43.3 million, with fresh packed lemon sales at $25.8 million and avocado revenue at $2.3 million.

• Net income applicable to common stock was $6.4 million, reversing a $1.7 million loss in Q2 2023; diluted EPS was $0.35 versus a $0.10 loss.

• Adjusted net income per diluted share was $0.44, up from $0.21 year-over-year; Adjusted EBITDA rose to $16.6 million from $6.2 million.

• Operating loss for Q2 2024 was $4.7 million, compared to a $3.9 million loss in Q2 2023.

Outlook and guidance

• Fresh lemon volume for FY24 expected at 5–5.5 million cartons; avocado volume guidance raised to 9–10 million pounds.

• Long-term EBITDA outlook increased to $45–$55 million by FY2030, driven by avocado expansion.

• Real estate proceeds from Harvest at Limoneira projected at $180 million over seven years, up 46% from prior guidance.

• FY25 and FY26 operational results expected to be similar to FY24 as avocado plantings mature.

• Management expects continued volatility in export markets and ongoing impacts from the COVID-19 pandemic.