U.S.: avocados drag down Limoneira results in Q4
Agribusiness Limoneira (NASDAQ: LMNR) reported a 3.4% drop in its fourth quarter revenue, down to US$14.3 million. The company cited complications due in large part to poor performance in the avocado category.
The results come in contrast to the overall reporting for the fiscal year ending Oct. 31, 2013, which notched a 29% spike in revenue, hitting US$84.9 million.
Fourth quarter EBITDA dropped 45% to US$0.6 million.
"Avocado revenue was $1.2 million in the fourth quarter of fiscal year 2013, compared to $3.3 million during the same period of the previous fiscal year, reflecting an earlier completion of the avocado harvest in fiscal year 2013 compared to fiscal year 2012. The decrease in volume was partially offset by higher average price per pound," the company said in its financial results.
Difficulties in the avocado category were cited as a leading factor in the company's 220% increase in operating losses, totaling US$1.6 million.
"Operating loss for the quarter was primarily the result of a $2.1 million decrease in avocado revenue due to lower production," the company said.
In contrast, lemon revenue rose almost 12% to US$9.5 million. This was attributed to a higher average price per carton, encouraged by more favorable market conditions.
Although the number of cartons sold in the fourth quarter dropped, the company's direct lemon marketing strategy pushed the category to rise throughout the year, said senior vice president Alex Teague.
"We continue to benefit from our direct lemon marketing and sales strategy. We now have approximately 140 lemon customers, underscoring the success of our sales team," Teague said.
"In fiscal year 2013, we sold approximately 700,000 more fresh lemon cartons than in last fiscal year, and we are well positioned for continued growth throughout fiscal year 2014 as we benefit from the additional agricultural acreage we acquired and leased over the past years."
The lemon category has also been influenced by recent acquisitions and future growth plans.
"In addition, our lemon business will be strengthened by our acquisition of Associated Citrus Packers in Yuma, Arizona, and our recent acquisition of lemon orchards in Porterville, California, both of which will enhance our ability to provide lemons to our customers on a year round basis," Teague said.
In fiscal year 2014, avocado sales are expected to remain low. As part of its natural alternating pattern, the California avocado crop will experience a low production year in 2014.
Additional lemon revenue, encouraged by recent acquisitions, should once again offset a drop in the avocado category.
"The Company expects to earn approximately $7.0 million in operating income in fiscal year 2014, representing approximately a 30% increase over fiscal year 2013 operating income of $5.3 million," Limoneira said.
"Fiscal year 2014 pre-tax earnings are anticipated to be similar to fiscal year 2013 as $1.3 million of earnings from asset sales and $0.7 million in interest rate swap income realized in fiscal 2013 are not expected to recur in fiscal year 2014."