LMNR — Limoneira Company

Summary of Limoneira's Q2 2026 Earnings Call

1. Key Financial Results and Metrics

• Total Net Revenues: $23.9 million, down from $35.1 million in Q2 FY25.
• Agribusiness Revenues: $22.5 million, compared to $33.6 million in the prior year.
• Operating Loss: $21.7 million, significantly higher than a loss of $3.3 million in Q2 FY25.
• Net Loss Applicable to Common Stock: $21.4 million, or $1.20 per diluted share, compared to a loss of $3.5 million or $0.20 per diluted share in Q2 FY25.
• Adjusted Net Loss: $5.2 million, or $0.29 per diluted share, versus a loss of $3.1 million, or $0.17 per diluted share in the prior year.
• Adjusted EBITDA: Loss of $1.7 million, compared to a loss of $200,000 in Q2 FY25.
• Fresh Lemon Sales: $17.1 million from approximately 1.03 million cartons sold at an average price of $16.63 per carton.

2. Strategic Updates and Business Highlights

• Operational Efficiency: Achieved $10 million in annual savings from SG&A improvements, with ongoing benefits from the Sunkist partnership.
• Avocado Production: Increased full-year avocado volume guidance, with 1.7 thousand acres planted and 800 acres expected to bear fruit soon.
• Water Monetization Strategy: Focus on low water use crops in Arizona, ceasing citrus farming on 600 acres to enhance profitability.
• Real Estate Development: Continued progress on the Harvest at Limoneira project, expecting $155 million in proceeds over the next five fiscal years.
• Joint Venture: Established a 50-50 organic recycling joint venture with AgriMin, projected to generate substantial earnings when operational in FY27.

3. Forward Guidance and Outlook

• Positive Adjusted EBITDA: Anticipated in Q3 and Q4 FY26, driven by increased avocado volumes and improved lemon pricing.
• Lemon Volume Guidance: Reiterated fresh lemon volumes of 4 million to 4.5 million cartons for FY26, with avocado volumes raised to 5.5 million to 6.5 million pounds.
• Long-term Growth: Positioned to unlock significant asset value and improve profitability through diversified operations and strategic initiatives.

4. Bad News, Challenges, or Points of Concern

• Revenue Decline: Significant year-over-year revenue drop due to the transition under the Sunkist partnership and exit from non-core operations.
• Increased Operating Loss: The operating loss widened due to noncash charges, including a $9.3 million impairment and a $7.8 million loss from asset disposals.
• Foreign Exchange Losses: Recognized $5.1 million in foreign exchange losses related to Chilean farming entities.
• Seasonal Revenue Shift: The first half of the fiscal year is now seasonally weaker, impacting cash flows until the stronger second half.

5. Notable Q&A Insights

• Avocado Pricing: Approximately 500,000 pounds of avocado volume pushed from Q2 to Q3, with current market pricing around $1.30 to $1.40 per pound.
• Lemon Pricing Forecast: Average lemon pricing expected to rise to $21 per carton in July, with a monthly increase projected through October.
• Windfall Farms Sale: The sale structure includes $10 million in cash and a $6 million note, with potential risks if the buyer cannot close on schedule by the end of October.

Overall, Limoneira's Q2 2026 results reflect a challenging transitional period with strategic initiatives underway to improve operational efficiency and profitability in the long term.