Q3 2020 Limoneira Co Earnings Call
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Good afternoon, everyone. Thank you for joining us for Luminaires third quarter fiscal year 2020 conference call.
The call today are Harold Edwards, President and Chief Executive Officer, and Mark how about in Chief Financial Officer.
By now everyone should have access to the third quarter fiscal year 2020 earnings release, which went out today at approximately four PM eastern time.
If you have not had a chance to be either really it's available on the investor relations portion of the company's website.
Limoneira Dot com.
This call is being webcast a replay will be available on the luminaires website as well.
Before we begin we'd like to remind everyone that prepared remarks contain forward looking statements and management may make additional forward looking statements in response to your questions.
Such statements involve a number of known and unknown risks and uncertainties many of which are outside the company's control could cause its future results performance or achievements to differ significantly from the results performance or achievements expressed <unk> implied by such forward looking statements.
Factors that could cause or contribute to such differences include risks detailed in the company's gen. Queues in 10-K's follow the FCC and those mentioned in the earnings release, except as required by law, we undertake no obligation to update any forward looking or other statements herein.
The result of new information future events or otherwise.
Please note that during today's call will be discussing non-GAAP financial measures, including results on adjusted basis. We believe these adjusted financial measures can facilitate a more complete analysis in greater understanding and Luminaires ongoing results of operations, particularly when comparing underlying results from period to period.
Provided as much detail as possible in the items that are discussed on adjusted basis also within the company's earnings release today's prepared remarks, we included adjusted EBITDA, which the non-GAAP financial measure reconciliation of adjusted EBITDA to the most directly comparable GAAP financial measures is included in the company's Genfuel and.
Yes release, which have been posted to its website.
With that it's my pleasure to turn the call or to the company's president and CEO Mr. help efforts.
Thanks, John and good afternoon, everyone.
Despite covert 19, continuing to affect our foodservice business due to temporary closures and reduce seating capacity at restaurants and bars strong volume in grocery retail enabled us to achieve revenue EBITDA and earnings growth in the third quarter, driven by lemons, and avocados and oranges and it does.
And we continue to be a leader in foodservice and export and are well positioned as dining out continues to slowly improve.
Our team is shown tremendous agility during the past six months by greatly expanding our reach into retail and grocery and this has led to solid lemon volume growth compared to last year and we believe we're very well positioned for solid growth next year, if foodservice business improves as restaurants and bars continued to slowly Oh.
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I'll now discuss each of our business divisions performances for the third quarter, starting with agribusiness.
Agribusiness revenue for the third quarter increased to $52.4 million compared to $49.6 million. The prior year and included $35.4 million in fresh lemon sales during the quarter. Our fresh lemon revenue was flat as increased volume was offset by a reduction in pricing.
From an oversupply of North American fruit due to covert 19 related foodservice closures.
Despite the reduction in sales from restaurant closures in the quarter, we experienced year over year sales growth in both avocados oranges and specialty crops. We sold approximately 6.1 million pounds of avocados at an average price per pound of one dollar for a total of $6.1 million.
And sold approximately 184000 cartons of Orange is at an average price per carton of $12.13 for a total of $2.2 million in revenue in the third quarter and our specialty citrus and other crop revenue was $800000 compared to no sales last year.
Sure.
Turning now to our real estate development segment.
We are having very strong interest in our residential development harvest at Limoneira in the third quarter of fiscal year 2020, we closed the sales of initial residential lots, representing 110 residential units and announced that one of our primary builders will be offering a new concept of harvest single story.
Redundancies through July 31st of 2020, the joint venture has closed the sales of initial residential lots representing 354 residential units an increase of 144 sales during the first nine months of fiscal year 2020, our guest builders is seen continued robo.
Yes demand, averaging seven homes sold per week over the last eight weeks over the six to nine year life for this project. The joint venture will have approximately 1500 total residential units built and sold and we expected to try to provide our company an additional $80 million of cash flow.
We're very pleased with the agility of our company during the current challenging industry dynamics created by Cobot I believe we will be even better position for long term growth. Thanks to our grocery and club expansion. During this pandemic. We're encouraged by the increase in fresh lemon volume in the first nine months and continued to exceed.
<unk> record lemon sales for fiscal year 2020.
And with that I'll now turn the call over to Mark.
Thank you Harold and good afternoon, everyone.
The third quarter fiscal year 2020, total net revenue was $53.6 million compared to total net revenue of $50.9 million in the third quarter of the previous fiscal year.
Agribusiness revenue was $52.4 million compared to $49.6 million and the third quarter last year. Other revenue was relatively flat at $1.2 million.
Agribusiness revenue for the third quarter fiscal year 2020 includes $35.4 million in fresh lemon sales compared to $35.8 million a fresh lemon sales during the same period of fiscal year 2019.
We achieved significant growth in our grocery channels, but this was offset by covert 19 related foodservice closures, reducing the demand for fresh lemons and creating an oversupply in the marketplace, which resulted in lower average per carton prices in the third quarter of fiscal year 2020.
Approximately 1.979 million cartons of fresh lemons were sold during the third quarter of fiscal year 2020 at a 17 dollar and 91 said average price per carton compared to approximately 1.876 million cartons sold at a 19.
Color and nine cents average price per carton during the third quarter of fiscal year 2019.
We have already started to see an improvement in 11 market as bars and restaurants have started to reopen and continue to expect a steady increase in the market price of fresh lemons for the rest of Twentytwenty.
The company recognize $6.1 million of avocado revenue in the third quarter of fiscal year 2020, compared to $2.5 million and the same period last fiscal year.
Approximately 6.1 million pounds of avocados were sold during the third quarter fiscal year 2020 at one dollar average price per pound compared to approximately 1.4 million pounds sold at $1.80 average price per pound during the prior year period.
The company recognize $2.2 million of Orange revenue in the third quarter of fiscal year 2020, compared to $700000 and the same period of fiscal year 2019 attributable to higher prices, partially offset by decrease in volume.
Approximately 184000 cartons of Orange is were sold during the third quarter fiscal year 2020 at a 12 dollar and 13 cents average price per carton compared to approximately 382000 cartons sold at a $1.86 cents average price per carton during the same period.
The previous fiscal year.
Specialty citrus and other crop revenues were 800000, and the third quarter fiscal year 2020, compared to no sales and the third quarter fiscal year 2019.
Total cost and expenses for the third quarter fiscal year, 2020 increased to $51.7 million compared to $48.8 million in the third quarter of last fiscal year.
Third quarter of fiscal year 2020 increase in operating expenses was primarily attributable to increases in agribusiness costs and expenses, partially offset by decreases in selling general and administrative expenses.
Cost associated with the company's agribusiness include packing costs harvest costs growing costs cost related to the fruit procured and sold for third party growers and depreciation and amortization expense.
Operating income for the third quarter fiscal year, 2020 was $1.8 million compared to operating income of $2.1 million in the third quarter of the previous fiscal year.
Net income applicable to common stock after preferred dividends for the third quarter fiscal year, 2020 was $2.2 million compared to a net loss of $1.1 million and the third quarter of fiscal year 2019.
Net income per diluted share for the third quarter fiscal year 2020 was 12 cents compared to a net loss per diluted share of six cents for fiscal year 2019.
Excluding the loss on stock and Calavo noncash equity in earnings of leaving their Louis community builders LLC and loss on asset disposals. Adjusted net income applicable to common stock was $1.9 million or 10 cents per diluted share compared to third quarter fiscal year 2000.
19, adjusted net loss applicable to common stock of $100000 or $0 per diluted share.
Adjusted EBITDA was $5.3 million in the third quarter fiscal year, 2020, compared to $3.8 million and the same period of fiscal year 2019.
A reconciliation of adjusted EBITDA to net income is provided at the end of our earnings release.
For the nine month ended July 31, 2020 revenue was $134.8 million compared to $134.9 million in the same period last year.
Operating loss for the first nine months of fiscal year, 2020 was $9.5 million compared to an operating loss of $1.9 million and the same period last year net loss applicable to common stock after preferred dividends was $9.44 million for the first nine months of fiscal year.
Here 2020, compared to net loss of $3.2 million in the same period last fiscal year.
Excluding the loss on stock and Calavo noncash equity in earnings of LLC, B and Las an asset disposals for the first nine months of fiscal year 2020, adjusted net loss applicable to common stock was $4.7 million compared to adjusted net loss of 3.7.
$10 million for the same period in fiscal year 2019.
Turning now to our balance sheet long term debt as of July 31, 2020 was $122.2 million compared to $105.9 million at the end of fiscal year 2019.
During the first nine months of the fiscal year 2020, the company received a $2 million income tax benefit from the cares Act and we expect to receive approximately $6.4 million of federal and California tax refunds in calendar year Twentytwenty.
The company also purchased 42100 shares under the share repurchase program for approximately $600000 during the third quarter.
As of July 31, 2020, the remaining authorization under this program is approximately $9.4 million.
Now I'd like to turn the call back to Harold to discuss our fiscal year 2020 outlook.
Thank you Mark.
Well it is true that we are seeing our foodservice customers begin to opened their doors. They are doing so at a cautious pace and at a reduced capacity and for those reasons along with the unknown duration and financial impact of covert 19, we will be continuing to not issue specific guidance for fiscal year 2020.
We continue to expect record lemon volumes in fiscal year 2020, and we believe our housing units sales will continue at a strong pace.
Looking beyond fiscal year 2020, we believe we're very well positioned to achieve solid growth in fiscal year 2021, as we continue to perform well in the grocery channel and in restaurants and bars as they continue to slowly open back up we also have an additional 1200 acres of nonbearing.
In lemons estimated to become full bearing over the next four years, which will enable us to achieve strong organic growth for many years to calm the company expects 200 of the 1200 acres to become full bearing in fiscal year 2021.
Beyond these 1200 acres, we intend to plant an additional 250 acres of lemons in the next two years that we believe will further build our long term pipeline of productive acreage.
We anticipate this additional acreage will increase domestic supply of lemons from our 2020 level by approximately 50% or about 900000 to 1.3 million additional fresh cartons as the nonbearing and planned acreage becomes productive. We also expect to have a steady increase.
In third party grower fruit.
And with that I'd like to open up the call to your questions operator.
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Sorry, Keith when lumber.
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Our first question comes from the line.
You May proceed with your question.
Yes, thanks, and good afternoon guys.
Inventory Vincent thanks.
Before getting to lemons I just wanted to ask quickly.
With copper prices and gold prices.
Performing really quite well recently has there been any progress in talks over your Colorado River water rights recently.
[noise], there's been a lot of talks as it relates to the Colorado River rights, specifically more as it relates to the Central Arizona project and housing requirements in Phoenix, Scottsdale, all the way to Tucson for reliable supplies of water.
And there's been more interest in following programs and the reallocation of of that water from agricultural usage to urban development usage less so from the industrial mining companies that you're referring to but more for just the a.
Systemic or over allocation of that water resource as it relates to ongoing requirements for housing in urban do dwelling. So while we don't have anything to specifically announce as it relates to our our Colorado River water rights at this time, a we are actually beginning to.
Make.
Investments into creating more efficiency and how we irrigate to free up potential supplies for potential sales up mostly for urban development uses.
All right that's interesting thank you.
So just recently with the heat wave kind of state wide it looks like district to his state under.
Under a 100 degrees for any kind of prolong period of time, but it does does kind of raise fears of what we saw back in 2018.
Can you comment on what you're seeing there whether it's district, one or just are too in terms of.
Any impact from the heat.
Yes. It at this point, we think district, one made it through the heat very effectively with minimal damage here in district to on the coast.
We reached a temperatures that were very comparable to 2018, the biggest difference vinces.
If you recall 2018 that he'd event took place in July and here. We are in September and the difference of the timing of that heat seasonally makes a huge difference so.
As it relates to our avocado trees. The fruit that's hanging on the trees were bigger stronger and and actually were able to endure the heat much more effectively than in 2018.
Some of the younger lemon trees or did.
Suffer from from the event, but nothing at this point that we can point to that says that will be significantly off of our initial forecast for next year.
So we think we you know cautiously optimistic that we've we've made it through the this series of heat events in this last week.
With most of our production intact.
Great. Thanks, and then just last one if I could sneak it in actually found one of your branded women's from Mexico, and a food delivery service that I use is that an area of focus with decent economics, and then just kind of overall.
Howard the conversations with kind of larger contact customers, whether in foodservice restaurant grocery how those changed as we sort of went back to normal not just volumes, but kind of the nature of those discussions.
Yes, so so the retail environment is incredibly competitive as you know very well from from your work with not only Lehman era, but many of some of your other clients that sell into the retail channels.
So just seasonally every August we experience a shift from supply from the California coast going to the Mexican.
The Mexican supply we have a co packing relationship that's a 7% deal down there were a Mexican co Packer puts Mexican prove very high quality. The same quality standards of the fruit that we pull out of California, and Arizona into a luminaire a box for sales and a and we do that because.
As our customers, specifically ask for that and and I'd say, that's going going very well. That's why you side in the club in the home delivery service that you used.
We do see that as seasons change.
Behavior changes at the retail level also so.
An example was all through the first part of the summer we had very very strong sales to a Texas based retailer no called Agb, which you know you probably know agb and as the shares the season shifted towards supplies from Mexico, we saw our percentage of sales into Agb.
Decline because of relationships that have agb has with other suppliers specifically out of Mexico. So it's dynamic it always has been and most retailers maintain multiple sources of supply. So it's not always surprising when you pick up a new customer or you lose a a customer but but our sales.
Teams stays active everyday knocking on doors and offering our our full array of of product offerings to the retailers just to continue to try to grow that business.
Alright, thank you.
Our next question.
Ben.
You May proceed with your question.
Hi, Thanks, good afternoon.
And then.
I want to I want to focusing on some comments mark that you made.
You talked about selling your your costs.
It looks like when when you look through the buckets of of the agribusiness costs on a per carton basis really you guys manage costs really nicely everywhere, except for the packing cost per lemon cartons, just curious kind of what what was going on there and then when we look at harvest costs growing costs.
Your third party costs, all those kind of pieces of business on the cost side that we're down substantially on a per carton basis kind of what you're doing there that's working.
To lower your cost structure.
Sure. That's great question, Ben So if you recall we started this this big covered Russian in mid March and as there was that's basically the prime time of de to season, and so we got into another utilization place, where we actually had a much bigger harvest than we thought.
And so as we progress and we went through until the basic first openings in June we were experiencing utilization in the call. It low to mid Fiftys again, similar to last year, where we saw those I'm really hit the per unit and so as as you didn't start.
Good opening we started aggressively harvesting again, and where we had eight we probably had one of the better junes that we've seen in which we were even more optimistic about the Q3 and then that then they turned out to be so I think right now at the end, we're right where about 60% utilization.
And as you know I mean, our goal is is 70 to 75. So every increment below that really takes its toll on on a per unit costs, specifically because you have to harvest all of it right. It all has to come up the tree I'm you got to put it through the packing as for the most part there are instances, where it comes off the front of the.
The line, where you've seen at the wash, but but that's primarily the reason on it on a per unit basis, and then you know the demand you know really wasnt there for for certain part of that so as you we had to let it sit longer in the coolers I'm you know more of that fruit got older and tired or.
It couldn't go export if at all was possible. So I'm not unlike last year from utilization perspective, just a different reason I think your second question. We've we've really tried to buckle down on all of our costs harvest individually you have different components of that the picking.
All transportation, we're working diligently with some outside vendors to attack all of our expense accounts and specifically our DNA target was to reduce DNA starting in March for $2 million for the year, which we're on track for that and outside of some discrete items that are related to.
Our ERP implementation, which where we're continuing to enhance on that so hopefully I answered your question and all that.
Yes, that's great color. Thanks.
I want to ask.
Recognizing the demand side of the equation is challenging and choppy.
The though I think we're all hopeful that things continue to improve as we get into next year and we can get back to normal.
Can you comment at all on the supply side of things both from a a lemon and avocado perspectives glad to hear that.
Your acreage and the crops largely spared from some of the heat.
She is that that.
Vincent reference, but just a.
I'm curious to hear any color that you have at this point on on what supply might look like.
Going forward.
Happy to Ben. Thanks. Thanks, Great question, we are cautiously very optimistic about next year, mostly for this very question. So at this point it looks like the desert crop, which is our district three crop, which typically begins in call. It mid to late August and then carries its way through.
Due to usually the new year that its later and potentially 30% smaller as it as a as an industry than it was last year. So we believe that bodes very well for the next couple of months of improved pricing and and we're starting to begin to see some of those.
Harvest take place and and not only will that be very helpful from reducing or minimizing an oversupply situation, but also the the quality the crop looks good the percentage of the first grade fancy grade fruit is back to what we would call normal sort of in the 40% to 50% range.
Which means that a lot of that fruit will find its way too very valuable export markets and I'm very pleased to say that the export markets of Japan, and Korea, and many of the smaller Asian Tiger countries have found their way back to sort of pre coded level. So that's that's really exciting for us we're chopping it a bit to get out.
After that fruit because the irony for US right now as we've got the orders, but we can't fill them because we don't have the fruit yet because we haven't been able to start harvesting in the desert, but thats just starting now and we should see that that should pick up here very soon.
As it relates to the district, one crop the a that's that's the San Joaquin Valley crop that crop typically starts in say November and carries on through March April.
The quality the quality looks excellent the size of the crop looks 10% to 15% down as an industry, but what's exciting about that for US is that's where the majority of our younger trees are that are as we mentioned in some of our comments are are coming online. So we don't think our own production.
We will be stunted in any way, we actually anticipate growth out of district, one and so that's going to be very exciting because we think the combination of those two things bode well for not only volume, but also price it's too early to to make any comments on district to because that fruit hasn't started to set up yet so we don't know.
We we see a significant increase in the size and the quality of our crop in Argentina for next year, a and also a similar crop in Chile, just to put us sort or a global perspective on it so.
That's the lemon side of the deal and we were very pleasantly surprised with the the size and the quality of our avocado crop. This year it looks like as for the full year, it's going to come in at 8 million pounds. This year, which is fantastic on an industry wide crop in California of I think some.
Around 340 to 350 million pounds next year, we believed that the industry in California is going to be down call. It 250 million pounds, but we see a larger crop for ourselves next year. So look too early to put a specific number on that will try to do a better job guiding for that after our fourth quarter, but when you put.
Those those two things together and maybe the last pieces oranges orange years will be smaller, but the quality looks better and that the opportunity for price looks better. So we think that the orange is in the specialty citrus will be strong next year as well.
That's awesome great. Thanks, so much and congrats on a good quarter.
Thank you management.
Our next question comes from the line.
With National Securities Corporation, You May proceed with your question.
Alright, Thanks for taking my questions on first one regarding London pricing.
The second quarter as soon as third quarter had obviously.
Wide range.
End market given how fluid cover 19 wasn't I'm wondering if you can elaborate a bit on how lemon pricing really evolved from say the beginning according to the ended the quarter and where it stands today.
So maybe I'll start with just a quick explanation and then Mark will provide his comments. So the thing that really hurt the pricing more than anything Ben was as as the company pivoted to retail that's where all our fence fancy grade fruit ended up going and and so.
No it left not only our company, but the majority of the industry with very very few homes for that second grade choice fruit typically that's the fruit that find its way into foodservice in June as as parts of the country began to pick up we saw the demand increased to a level that.
It actually absorbed a lot of that fruit until we saw us much stronger pricing as mark alluded to in some of his earlier comments in June but in July we all felt another pullback at foodservice level and that did that was very very challenging for us as it related to a utilization perspective fresh.
Position.
But also a price.
Perspective, as the second grade fruit really was massively oversupplied because the restaurants in the bars pulled back and close again and it was just an oversupplied situation. So what what we experienced as a total company in the Lemon category was a product mix issue, where we got good pricing for our first grade.
Fruit, but we got very poor pricing for our second grade fruit and that in total led to a or a total decline in the average price per carton of I think something like $2 per carton versus the third quarter of last year, Mark any other color, yeah, and and as held alluded to it's off the product mix and as Dave.
Mr to ended season into the fruit gets what we call tired I'm you lose the ability to get that export potential which has that call it 25 or higher product mix into it and so that's that's really what the effect. So we're just basically now finishing up our coolers with the two I think we have.
Hundred thousand or so cartons left of that to go.
And then we start to see that increase in the export currently our prices is about $20 average.
In the market you know from choice to fancy all the sizes, it's between 15 and 28 with some exceptions around but we really like the way we see it's shaping up with an industry overall down volume and as weak as we commented earlier that we think we'll see steady prices.
Into the ended the calendar year, I think really starting to show up sort of mid to end of October our fiscal year and really benefiting I'm starting in our fiscal 21.
Perfect very helpful. Thank you.
On harvest at Limoneira have a question, but first a quick clarifying question on you alluded to seven lots sales per week over the last eight weeks was that the last eight weeks of the of the fiscal quarter or is that lasting weeks.
Upsell, causing that.
Both.
Well.
Just to clarify those those are those are the homebuilder home sales I'm not the actual currency that we have the lot sales. So it's really the proven the printing that shows the velocity that the at the homes are selling which then allows us to then put more lots out and the other exciting sort of data point is that while we don't control.
Basing for our guests builders.
Their prices are going up right now and we've seen a home price improvement from a from a seller's perspective.
And that bodes very well to the to the future of the project as well.
Got it perfect and on I guess two questions. Then on this first these can you remind us kind of how how best weekly sale total compares to kind of your the goals that were laid out by by this project I mean at seven seven homes, a week substantially greater than than.
Whatever the predetermine goal is kind of help us kind of quantify that if you will.
Yes. So every year, we do it I and operating budget and a forecast for the year on which comes out in November December for for the for the Lewis Group and this year was forecasted to be a two homes per week, so substantially greater velocity. It all started really right around co bid.
You had the interest rates I'm, obviously basically going to zero and also the the departure from urban areas for people the ability to to work and live at home and and if you recall, we are I'm, a one gigabyte community, which is one of the fastest if not fab.
Fastest internet.
Providing at a at our harvest location. So all those I think together really boosted the velocity and it's quite incredible and see.
Very good well you actually just answered my my final question. So congratulations on great quarter, and I'll leave it there and get back in Q.
Great. Thanks, I have you been.
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Well, we pull for questions.
Our next question comes the line of Mark Smith.
Well Mark you May proceed with your question.
Hi, guys wanted to ask about kind of end markets as you focus on grocery growth can you breakout how much growth there was really within existing locations versus new customers.
So happy to.
Part of part of the success in the pivot and the growth was related to some.
Back some some capex that we made in the packing house, where we put in a new state of the art bagging technology and the sound bite of it it goes something like the old bag per minute rate was.
I'm trying to remember what it was but it was something like.
20 bags, a minute and that's now 100 bags a minute is so the just the productivity is massively more successful, but the main thing was it allowed us to be able to accept these larger orders from larger retailers, specifically, we picked up agb we picked up.
A lot more cosco business, and we picked up wakefern back on the East coast.
And a little bit more kroger business than we normally have a those were all new and actually we did a little bit of Cosco business pre co bid, but certainly not at this level.
And so I'd say specifically to your question, 50% of the growth was to new customers and 50% were too.
Sort of more supply to existing customers.
Excellent and then looking at labor costs could you just talked about kind of whats your markets like right now as far as being able to find employees and bring people on where needed.
Yes, so firstleap labor spin been tight the last two years, but up because Lehman era has.
Very strategic workforce housing capabilities, we've been able to take advantage of.
Hmm way programs and at any given time have upwards of 100.
Yes workers from Mexico, who are living here and working with us.
You probably read about some of the challenges that covert provided not from us but from some of the other workforce housing developments here in California. So we've been working very closely with the Ventura County Health Health care agency at making sure that a that all of our facilities were.
Appropriately socially distance everybody was maston and a that nobody nobody basically came down with co bid. So that we wouldn't experience any outbreaks and we've been very fortunate that we have been able to avoid that and keep our keep our workforce healthy and safe, but also intact and that's kept us in business.
Through this challenging time.
Perfect.
Just one for me just looking at the avocado business and you kind of the year over year growth.
How much of that if you can talk to how much of that was driven by just the price difference this year versus last year.
Versus kind of these new.
End markets in new customers.
Yes. So avocados are are kind of the perfect a fruit because that's 100% utilization. This demand is voracious in the marketplace consumption around the world continues to grow and so the bottom line is if you can grow but then you probably can sell it. There's two grades there is the first grade in the second grade of fruit.
We try to keep our second grade.
Sort of in the in the 5% to 10% range as we as we farm.
The biggest difference in the year was.
Last year, just was a smaller crop they've got a higher price. So it was I can't run with a total volume was up four and a half million I believe I am I right, but it but it was that $1.80 where this year.
It was just the perfect combination of whether we had we had a pretty good set of fruit, but the late spring early summer was very temperate it was it wasn't too hot it wasn't wasn't too cold and that allowed the fruit to stay on the trait tree and grow and that gave us another 20 to 30.
Percent of actual production if you can picture a piece of fruit growing it actually gains weight as it grows so by being able to keep it on the tree and mother nature cooperating with us to allow us to do that we picked up another 20% to 30% of total pounds per produced a that was unexpected and unbudgeted.
In an unplanned an unforeseen and then ended up getting a pretty decent price for the for the fruit. So all in all it was it was it was a good avocado year for us this year and as I as I alluded to before we believe that next year I has the opportunity even better.
Because we believe the initial set on the trees, which we can now see and the fruit is getting to be right now about four to five ounces per piece.
It is a is theres a lot of lot of pieces and.
It's coming into a industry crop in California that we think is going to be 100 million pounds smaller than it was this last year, which gives us a belief that we we could see some some pretty good pricing next year as well.
Okay excellent. Thank you.
Ladies and gentlemen.
Today's question answer session I would like to try and all that.
Edwards for closing remarks.
Thank you for your questions and interest in Lehman area have a great day.
This concludes.
Your line.
Thanks.
Yeah.
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