Limoneira Company: Limoneira Company Announces Fourth Quarter Fiscal Year 2015 Financial Results

Tickers: LMNR
January 11, 2016

- Fiscal Year 2015 Revenue was -

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- FY 2015 EBITDA Increased 10% Compared to Prior Year-

-Company Expects FY 2016 Operating Income to Increase Approximately 75% Compared to FY 2015-

--(BUSINESS WIRE)-- (the 'Company' or 'Limoneira') (: LMNR), a leading agribusiness with prime agricultural land and operations, real estate and water rights in and , today reported financial results for the fourth quarter and full year ended and guidance for fiscal year 2016.

Fiscal Year 2015 Fourth Quarter Results

For the fourth quarter of fiscal year 2015, revenue was , compared to revenue of in the fourth quarter of the previous fiscal year. Agribusiness revenue was , compared to in the fourth quarter last year, primarily due to lower lemon sales. Rental operations revenue was in the fourth quarter of fiscal year 2015, compared to in the fourth quarter of last year. Real estate development revenue was compared to in the fourth quarter last year.

Agribusiness revenue for the fourth quarter of fiscal year 2015 includes in lemon sales, compared to of lemon sales during the same period of fiscal year 2014, primarily reflecting lower fresh lemon prices and volume. Approximately 388,000 cartons of fresh lemons were sold during the fourth quarter of fiscal year 2015 at a average price per carton compared to approximately 413,000 cartons sold at a average price per carton during the fourth quarter of fiscal year 2014. As anticipated, the Company did not recognize any avocado revenue in the fourth quarter of fiscal year 2015. In the fourth quarter of fiscal year 2014, avocado revenue was . The Company recognized of orange revenue in the fourth quarter of fiscal year 2015, which was similar to the same period of fiscal year 2014. Specialty citrus and other crop revenues were in the fourth quarter of fiscal year 2015, compared to in the fourth quarter of fiscal year 2014.

Costs and expenses for the fourth quarter of fiscal year 2015 were compared to in the fourth quarter of last fiscal year. The fourth quarter of fiscal year 2015 decrease in operating expenses reflects lower agribusiness costs and selling, general and administrative expenses net of approximately in legal, consulting and accounting expenses associated with the Company's real estate development joint venture described below.

Operating loss for the fourth quarter of fiscal year 2015 was , compared to in the fourth quarter of the previous fiscal year. Net income applicable to common stock, after preferred dividends, for the fourth quarter of fiscal year 2015 was , compared to net loss applicable to common stock of in the fourth quarter of fiscal year 2014. Fourth quarter fiscal year 2015 net income includes a gain associated with the sale of 140,000 shares of (: CVGW) ('Calavo') common stock and a gain on the sale of the Company's . Earnings per diluted share for the fourth quarter of fiscal year 2015 were compared to a net loss per diluted share of for the same period of fiscal year 2014, with both periods based on approximately 14.1 million weighted average diluted common shares outstanding.

The difference between the Company's previously expected fourth quarter fiscal year 2015 operating results and its actual operating results are primarily due to lower lemon revenue related to less volume of fresh lemon cartons sold and additional legal costs associated with the Company's joint venture with the Lewis Group as further described below, offset by lower operating expenses and the gain on the sale of Calavo stock.

EBITDA was in the fourth quarter of fiscal year 2015 compared to a negative in the same period of fiscal year 2014. A reconciliation of EBITDA to net income is provided at the end of this release.

Fiscal Year 2015 Results

For the fiscal year ended , revenue was compared to for fiscal year 2014. Operating income for fiscal year 2015 was compared to last year. Lower fiscal year 2015 operating income primarily reflects lower orange revenues on lower prices and volume, lower lemon revenues and higher agribusiness expenses, primarily associated with the Company's packing operations in , that was acquired . In addition, while selling, general and administrative expenses for fiscal year 2015 were less than fiscal year 2014 by approximately , primarily reflecting lower incentive compensation, such expenses include approximately in legal, consulting and accounting expenses associated with the Company's real estate development joint venture described below.

Net income applicable to common stock, after preferred dividends, was for fiscal year 2015 compared to for fiscal year 2014. Fiscal year 2015 operating results include the aforementioned gain associated with the sale of common stock and gain associated with the sale of the . Earnings per diluted share for fiscal years 2015 and 2014 was with both years based on approximately 14.1 million weighted average diluted common shares outstanding.

EBITDA for fiscal year 2015 was compared to EBITDA of in fiscal year 2014.

Real Estate Development

On , , a real estate development partnership between and (''), was formed. received (, net of transaction costs) upon the establishment of the partnership in addition to the Company received from in , in anticipation of forming the partnership. is a 50%/50% partnership between and that will engage in the residential development of Harvest at (formerly and East Area 1). The formation of the partnership culminated with contribution of its East Area 1 property and contribution of . The funds were distributed to upon closing the transaction, which it expects to record as a reduction in the basis of its joint venture investment. expects to receive 25% to 80% of the net cash flow of the project, based on projected cash flow milestones provided in the partnership agreement, which is estimated to aggregate approximately 70% of total net cash flows to , including the initial distribution, and the balance of net cash flows to over the estimated seven to ten year life of the project. The build-out of lots is expected to begin in 2016. The Company anticipates that will begin receiving security deposits from homebuilders for lots sales in mid-2017 and the sale of lots is expected to begin in the fourth quarter of 2017.

Management Comments

, President and Chief Executive Officer, stated, 'Over the past year, we continued to execute on our long-term growth strategy. We formed a development partnership between our company and , a leading real estate development and investment company, for the development of Harvest at . We expect to receive to from the joint venture, including the we have received, over the seven to ten year life of the project. We are also focused on the development of over 40 acres of commercial properties adjacent to project property, which represents an additional opportunity for meaningful cash flows.'

continued, 'In addition, in fiscal year 2015, we made significant progress on our agribusiness. We substantially completed the expansion of our lemon packing house in . We expect the new packing facilities to become operational in the first quarter of fiscal year 2016 and anticipate that it will increase our packing efficiency and double the annual capacity of our lemon packing operations with significantly less labor costs. We also recently acquired approximately 900 acres of lemon, orange, and specialty citrus orchards in that we had previously been leasing and expect to benefit from incremental operating results and cash flows resulting from the elimination of lease expense beginning in fiscal year 2016. Looking forward, we intend to continue to make investments to expand our agribusiness operations in both and internationally in order to expand Limoneira's position as a leading global citrus agribusiness.'

concluded, 'Our financial results for the fourth quarter of fiscal year 2015 reflect our ability to strategically monetize investments and non-core assets, including the sale of Calavo stock and the sale of the , which combined generated approximately of gain in the quarter. Our operating cash flows combined with projected future cash flows from real estate development initiatives, are expected to provide the financial flexibility to invest in our business while continuing to pay a quarterly dividend, which we recently raised by 11%.'

Balance Sheet and Liquidity

During fiscal year 2015, net cash provided by operating activities was , compared to in the prior year. Net cash used in investing activities was in fiscal year 2015, compared to in the prior year, primarily related to the Company's investments in the expansion of its lemon packing facilities, acquisition of agriculture property and additional farm worker housing units, as well as investments in real estate development projects. Net cash provided by financing activities was approximately in fiscal year 2015 compared to net cash provided by financing activities of last year. Long-term debt as of was , compared to at the end of fiscal year 2014.