Limoneira Company (the “Company” or “Limoneira”) (NASDAQ: LMNR), a diversified citrus packing, sales and marketing company with related agribusiness activities and real estate development operations, today announced a business and guidance update for its fiscal year ending October 31, 2019 and provided initial guidance for its fiscal year ending October 31, 2020. In addition, on December 17, 2019, the Board of Directors announced a cash dividend of $0.075 per common share payable on January 15, 2020, to stockholders of record on December 30, 2019.

Fiscal Year 2019 Business Update and Initial Fiscal Year 2020 Guidance

Domestically, the power outages related to the recent California fires delayed four days of lemon shipments at the end of the fourth quarter of fiscal year 2019 and into the first quarter of fiscal year 2020. The Company experienced normal shifting of shipment timing, which delayed a few shipments into the first quarter of fiscal year 2020. In addition, the final wine grape yields were as expected; however, market pricing was lower than anticipated. A portion of the harvest timing was delayed until the first quarter of fiscal year 2020, instead of the fourth quarter of fiscal year 2019. Internationally, in the fourth quarter of fiscal year 2019, lemon shipments from Chile realized a lower freight on board (“FOB”) price at market than previously expected. Based on these events, the Company is updating its fiscal year 2019 guidance and providing initial fiscal year 2020 adjusted EBITDA and lemon volume guidance. Fiscal year 2019 guidance is based on preliminary results and subject to completion of audit procedures.

For fiscal year 2019, the Company expects revenue to increase approximately 31% to $170 million and expects net loss per diluted share applicable to common stock, after preferred dividends, to be in the range of $(0.39) to $(0.43). Excluding the non-cash $2.4 million unrealized loss on stock in Calavo, $1.0 million gain on sale of property assets and $2.5 million equity in earnings from Harvest at Limoneira for fiscal year 2019, the Company expects adjusted net loss per diluted share applicable to common stock, after preferred dividends, to be in the range of $(0.44) to $(0.48).

(*Consensus sees FY19 loss per share of $0.19 on revenue of $169.55 million and FY20 EPS of $0.60 on revenue of $205.85 million)

EBITDA for fiscal year 2019 is expected to be in the range of $2.5 million to $3.0 million. Adjusted EBITDA for fiscal year 2019 is expected to be in the range of $1.5 million to $2.0 million.

For fiscal year 2020, the Company is providing adjusted EBITDA guidance and lemon volume guidance by cartons and will not be providing earnings per share guidance going forward. The Company believes adjusted EBITDA can facilitate a more complete analysis and greater transparency into its ongoing results of operations and remove certain non-cash items that create fluctuations in its earnings per share. These items include:

• Depreciation and amortization, which will be increasing on an annual basis from recent and expected future acquisitions,
• The requirement to mark-to-market the stock price of its holdings in Calavo stock, and
• The expected continuous equity in earnings being generated from Harvest at Limoneira.

Excluding the non-cash mark-to-market on stock in Calavo and equity in earnings from Harvest at Limoneira adjusted EBITDA for fiscal year 2020 is expected to be in the range of $22 million to $26 million. For fiscal year 2020, the Company and its international affiliates are expecting to sell 7.5 to 9.5 million cartons of fresh lemons globally. Included in the global cartons estimate, are 5 to 6 million cartons the Company expects to sell domestically.

Looking into fiscal year 2020 and beyond, the Company has an additional 1,200 acres of non-bearing lemons that are estimated to become full bearing over the next four years, which will enable the Company to achieve strong organic growth for many years to come. The Company expects 300 of the 1,200 acres to become full bearing in fiscal year 2021. Beyond these 1,200 acres, Limoneira intends to plant an additional 250 acres of lemons in the next two years that it believes will further build its long-term pipeline of productive acreage. The Company anticipates this additional acreage will increase annual lemon supply from its 2020 level by approximately 30%, or about 900 thousand to 1.3 million additional fresh cartons, as the non-bearing and planned acreage becomes productive. The Company also expects to have a steady increase in third party grower fruit. The foregoing describes organic growth and does not include potential acquisition opportunities for the Company in its highly fragmented industry.

Management Comments

Harold Edwards, President and Chief Executive Officer of the Company, stated, “Fiscal year 2019 was a challenging year for our Company due to the uncontrollable aspects of our business. Untimely and persistent rains dramatically affected lemons, higher temperatures affected orange pricing throughout the year and, as expected, our avocado harvest was minimal due to the prior year’s heatwave. Despite these challenges, our Company still generated record revenue and expanded our market share. We also began realizing equity earnings from our real estate development, Harvest at Limoneira, and successfully closed a very important acquisition in Argentina, expanding our One World of Citrus.”

Mr. Edwards continued, “As we enter fiscal year 2020, our grower retention is very strong, and we expect to increase our lemon market share again in fiscal year 2020. We are very well positioned for a return to solid growth and improved profitability and expect improved contributions from lemons, oranges and avocados in this coming year.”

The Company will report its full fourth quarter and fiscal year 2019 results on January 13, 2020.

Conference Call Information

The Company will host a conference call to discuss its financial results on January 13, 2020, at 1:30 pm Pacific Time (4:30 pm Eastern Time). Investors interested in participating in the live call can dial (866) 548-4713 from the U.S. and international callers can dial (323) 794-2093. A telephone replay will be available approximately two hours after the call concludes and will be available through January 27, 2020, by dialing (844) 512-2921 from the U.S., or (412) 317-6671 from international locations; the passcode is 2517152.