Q2 2024 Limoneira Company Earnings Call
Operator: Greetings and welcome to the Limoneira's second quarter 2024 financial results conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. It is now my pleasure to introduce your host, John Mills with ICR. Thank you, sir. You may begin.
Greetings and welcome to the Lehman Era's second quarter 2024 financial results Conference call.
Speaker Change: At this time all participants are in a listen only mode.
Speaker Change: A brief question and answer session will follow the formal presentation.
Speaker Change: It is now my pleasure to introduce your host John Mills with ICR. Thank you Sir you may begin.
Diego: Thank you Diego and good afternoon, everyone and thank you for joining us for Lehman areas second quarter fiscal year 2024 conference call.
John Mills: Thank you, Diego. Good afternoon, everyone.
John Mills: And thank you for joining us for Limoneira's second quarter fiscal year 2024 conference call. On the call today are Harold Edwards, President and Chief Executive Officer, and Mark Palamountain, Chief Financial Officer. By now, everyone should have access to the second quarter fiscal year 2024 earnings release, which went out today at approximately 4 p.m. Eastern. If you've not had a chance to review the release, it's available on the investor relations portion of the company's website at www.limoneira.com. This call is being webcast, and a replay will be available on Limoneira's website as well.
Diego: On the call today are Harold Edwards, President and Chief Executive Officer, and Mark Hello Mountain Chief Financial Officer.
Diego: By now everyone should have access to the second quarter of fiscal year 2024 earnings release, which went out today at approximately four P M Eastern time.
Speaker Change: If you've not had a chance to review the release, it's available on the Investor Relations portion of the company's website at Lehman era dotcom.
Speaker Change: This call is being webcast and a replay will be available on <unk> website as well.
John Mills: Before we begin, we would like to remind everyone that these prepared remarks contain forward-looking statements, and management may make additional forward-looking statements in response to your question. Such statements involve a number of known and unknown risks and uncertainties, many of which are outside the company's control and could cause its future results, performance, or achievements to differ significantly from the results, performance, or achievements expressed or implied by such forward-looking statements. Important factors that could cause or contribute to such differences include risk factors in the companies' Form 10 Q's and 10Ks, filed with the SEC, and those mentioned in the earnings risk. Except as required by law, we undertake no obligation to update any forward-looking or other statements herein, whether as a result of new information, future events, or otherwise.
Speaker Change: 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.
Speaker Change: Such statements involve a number of known and unknown risks and uncertainties many of which are outside the company's control and could cause its future results performance or achievements to differ significantly from the results performance or achievements expressed or implied by such forward looking statements.
Speaker Change: Important factors that could cause or contribute to such differences include risk factors in the company's form 10, Qs and 10-K filed with the SEC 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, whether a result of new information future events.
Speaker Change: Or otherwise please note that during today's call, we will be discussing non-GAAP financial measures, including results on an adjusted basis. We believe these adjusted financial measures can facilitate a more complete analysis and greater understanding of <unk> ongoing results of operations, particularly when comparing underlying results.
John Mills: Please note that during today's call, we will be discussing non-GAAP financial measures, including results on an adjusted basis. We believe these adjusted financial measures can facilitate a more complete analysis and a greater understanding of Lumenaire's ongoing results of operations. Particularly when comparing underlying results from period to period, we have provided as much detail as possible on any items that are discussed on an adjusted basis. Also, within the company's earnings release and in today's prepared remarks, we include adjusted EBITDA and adjusted diluted EPS, which are non-GAAP financial measures.
Speaker Change: From period to period, we have provided as much detail as possible on any items that are discussed on adjusted basis also within the company's earnings release and in today's prepared remarks. We include adjusted EBITDA and adjusted diluted EPS, which are non-GAAP financial measures a reconciliation of adjusted.
Speaker Change: EBITDA and adjusted diluted earnings per share to the most directly comparable GAAP financial measures.
John Mills: A reconciliation of adjusted EBITDA and adjusted diluted earnings per share to the most directly comparable GAAP financial measures is included in the company's press release, which has been posted on its website. And with that, it is my pleasure to turn the call over to the company's president and CEO, Mr. Harold Edwards.
Speaker Change: And in the company's press release, which has been posted to its website.
Speaker Change: And with that it is my pleasure to turn the call over to the company's President and CEO, Mr. Harold Edwards.
Speaker Change: Thanks, John and good afternoon, everyone I'm very pleased that our overall business generated adjusted EBITDA of $16.6 million for the second quarter, which represents more than double that of the prior year period, highlighting the continued momentum in our harvest at luminaire.
Harold S. Edwards: Thanks, John. And good afternoon, everyone.
Harold S. Edwards: I'm very pleased that our overall business generated adjusted EBITDA of $16.6 million for the second quarter, which represents more than double that of the prior year period, highlighting the continued momentum in our Harvest at Limoneira real estate development joint venture project with the Lewis Group. These overall results were achieved even as we decided to move the majority of harvesting our avocados to the third quarter for higher prices and better volume. We continue to follow through with our previously discussed transition by expanding our avocado plantings by 1,000 acres over the next three years to 2,000 acres, with 223 acres planted in fiscal year 2024.
Speaker Change: Real estate development joint venture project with the Lewis group.
Speaker Change: These overall results were achieved even as we decided to move the majority of harvesting our avocados cause the third quarter for higher pricing and better volume.
Speaker Change: We continue to follow through with our previously discussed transition by expanding our avocado plantings by a thousand acres over the next three years to 2000 acres with 223 acres planted in fiscal year 'twenty 'twenty four.
Harold S. Edwards: We expect this expansion of our avocado production will dramatically increase our longer-term EBITDA to $45 million to $55 million by fiscal year 2030 compared to the prior target of $30 million. Keep in mind, this does not include our expected increase in cash flow from the Harvest at Limoneira project, which I will discuss. We recently achieved two significant milestones for our company. First, in April of 2024, the joint venture closed on lot sales representing 554 residential units, thus completing the sellout of phase two of the development. A total of 1,261 residential units have been closed since the project's inception.
Speaker Change: We expect this expansion of our avocado production will dramatically increase our longer term EBITDA.
Speaker Change: The $45 million to $55 million.
By fiscal year, 'twenty 30, compared to the prior target of $30 million keep in mind. This does not include our expected increase in cash flow from the harvest at Luminary project, which I will discuss.
We recently achieved two significant milestones for our company first in April of 'twenty 'twenty four joint venture closed on lot sales, representing 554 residential units. That's completing the sellout of phase two of the development a total of 1261.
Speaker Change: One residential units have closed from the project's inception.
Speaker Change: Second.
Harold S. Edwards: A few weeks ago, the Santa Paula City Council approved the joint ventures proposal to increase the total number of residential units for the project from 1,500 to 2,050 units. The 550-unit increase will provide 250 additional single-family for-sale homesites within Phase 3 of Harvest. A separate joint venture with Lewis plans to construct 300 multifamily rental homes on a mixed-use portion of the project.
A few weeks ago, the Santa Paula City Council approved the joint Venture's proposal to increase the total number of residential units for the project from 1500 to 2050 units. A 550 unit increase will provide 250 additional single family Force.
Speaker Change: Sale Homesites within phase three of harvest a separate joint venture with Louis plans to construct 300 multifamily rental homes on a mixed use portion of the project.
Harold S. Edwards: This is a 37% increase in residential units. Unlocking Further Value Creation Opportunities Based on these events and a continued increase in the land value associated with this project, we have increased our cash flow projections by 46% and now expect to receive $180 million in total future proceeds spread out over the next seven fiscal years, with approximately $18 million expected in fiscal year 2024. Now I'd like to provide a quick update on our decision to evaluate strategic alternatives for the overall business.
Speaker Change: This is a 37% increase in residential units.
Louis: Unlocking further value creation opportunities based on these events and continued increase in the land value associated with this project, we have increased our cash flow projections by 46% and now expect to receive $180 million in total future proceeds spread out over the next seven.
Louis: Fiscal years with approximately $18 million expected in fiscal year 'twenty 'twenty four.
Speaker Change: Now I'd like to provide a quick update on our decision to evaluate strategic alternatives for the overall business.
Harold S. Edwards: Over the past 18 months, we have developed a strategic roadmap intended to enhance near and long-term shareholder value. Today, we consider ourselves to be in a strong financial position, having recently reduced our net debt position, right-sized the balance sheet through our ongoing strategic shift towards an asset-lighter business model, and increased our cash flow projections from harvest at Limoneira. As part of our exploration of strategic alternatives to maximize value, and given the strong interest we are receiving, we decided it is in the best interest of our stockholders to move away from pursuing a packinghouse in Chile and instead add value by focusing on expanding our avocado production over the next three years.
Over the past 18 months, we have developed a strategic roadmap intended to enhance near and long term shareholder value.
Harold S. Edwards: Long-term debt as of April 30, 2024 was $59.5 million, compared to $40.6 million at the end of fiscal year 2023. Debt levels as of April 30, 2024, less $1.4 million of cash on hand, resulted in a net debt position of $58.7 million at quarter end. However, it's important to note that our 50-50 joint venture with Lewis held $102.1 million of cash and cash equivalents as of April 30, 2024, of which our share is 50%.
Speaker Change: Today, we consider ourselves to be in a strong financial position, having recently reduced our net position net debt position right size the balance sheet through our ongoing strategic shift towards an asset light business model and increased our cash flow projections from harvest that luminaire.
Harold S. Edwards: Furthermore, with the closure of the additional 554 residential home sites in April, the joint venture is expected to distribute $30 million in June of 2024, with Limoneira entitled to $15 million of the proceeds. This additional liquidity source from our joint venture provides further financial flexibility beyond the quarterly-end net debt figure. Even after the recent non-strategic asset sales this past year and a half, we continue to manage approximately 10,500 acres of land with 21,000 acre feet of owned water usage and pumping.
Speaker Change: That's part of our exploration of strategic alternatives to maximize value and given the strong interest we are receiving we decided as it is in the best interest of our stockholders to move away from pursuing a packinghouse in Chile, and instead add value by focusing on expanding our avocado production over the next three years.
Speaker Change: <unk>.
Long term debt as of April 30 of 2024 was $59.5 million compared to $46 million at the end of fiscal year 2023.
Speaker Change: Debt levels as of April 30th 'twenty, 'twenty, four less $1 $4 million of cash on hand resulted in a net debt position of $58 $7 million at quarter end. However.
Speaker Change: However, it's important to note that our 50 50 joint venture with Louis held $102.1 million of cash and cash equivalents as of April 30th 'twenty 'twenty four of which our share is 50%.
Speaker Change: Furthermore, with the closure of the additional 554 residential Homesites in April the joint venture is expected to distribute $30 million in June of 'twenty 'twenty four with Lehman are entitled to $15 million of the proceeds this additional liquidity source for our joint venture provides.
Speaker Change: Further financial flexibility beyond the quarter end net debt figure.
Speaker Change: Even after the recent nonstrategic asset sales this past year and a half we continued to manage approximately 10500 acres of land with 21000 acre feet of owned water usage and pumping rates in fiscal year 'twenty 'twenty four on the operational side of our business you will continue to see our true.
Harold S. Edwards: In fiscal year 2024, on the operational side of our business, you will continue to see our transition to an asset-light business model and focus on the best use of our assets to enhance shareholder value. We have dramatically decreased interest expense, removed our pension obligation, and are receiving quarterly payments from Yuma Mesa Irrigation and Drainage District for our following program.
Speaker Change: <unk> to an asset light business model and focus on the best use of our assets to enhance shareholder value.
Speaker Change: We have dramatically decreased decreased interest expense, we moved our pension obligation are receiving quarterly payments from Yuma Mesa irrigation and drainage district for our following program and we believe lemon and avocado pricing will be better this year compared to fiscal year 2023 positioning us.
Harold S. Edwards: And we believe lemon and avocado prices will be better this year compared to fiscal year 2023, positioning them as well for strong improvements in fiscal year 2024. In addition to our operational improvements, our board and management team will continue to evaluate how to best leverage our expertise in farm management, packing, marketing, and distributing citrus, combined with our valuable portfolio of agricultural lands, real estate properties, and water rights, in order to enhance long-term shareholder value. And with that, I'll turn the call over to Mark.
Speaker Change: Well for strong improvements in fiscal year 2024 in.
Speaker Change: In addition to our operational improvements our board and management team will continue to evaluate how to best leverage our expertise in farm management packing marketing and distributing citrus combined with our valuable portfolio of agricultural land real estate properties and water rights in order to enhance long term.
Speaker Change: Term shareholder value and with that I'll turn the call over to Mark.
Mark Palamountain: Thank you, Harold, and good afternoon, everyone. Before I begin, I would remind you it is best to view our business on an annual, not quarterly, basis due to the seasonal nature of our business. Historically, our first and fourth quarters are the seasonally softer quarters, while our second and third quarters are stronger. For the second quarter of fiscal year 2024, total net revenue decreased 7% to $44.6 million compared to total net revenue of $48.1 million in the second quarter of the previous fiscal year.
Mark: Thank you Harold and good afternoon, everyone.
Mark: Before I begin I would remind you it is best to view our business on an annual not quarterly basis due to the seasonal nature of our business historically.
Historically, our first and fourth quarters are the seasonally softer quarters, while our second and third quarters are stronger.
Speaker Change: For the second quarter of fiscal year 2024, total net revenue decreased 7% to $44.6 million compared to total net revenue of $48 $1 million in the second quarter of the previous fiscal year.
Mark Palamountain: Agribusiness revenue was $43.3 million compared to $46.7 million in the second quarter of last year. Other operations revenue was $1.3 million in the second quarter of fiscal year 2024 compared to $1.4 million in the second quarter of last year. Results in the second quarter of fiscal year 2024 were impacted by increased rainfall in California that delayed the picking of lemons and caused fresh utilization in the second quarter to fall to around 70%.
Speaker Change: Agribusiness revenue was $43 $3 million compared to $46 $7 million in the second quarter last year.
Speaker Change: Other operations revenue was $1.3 million in the second quarter of fiscal year 2024, compared to $1.4 million in the second quarter last year.
Speaker Change: Results in the second quarter of fiscal year 2024 hour work were impacted by increased rainfall in California that delayed the picking up lemons and cause factory utilization in the second quarter to fall to around 70%.
Mark Palamountain: Agribusiness revenue for the second quarter of fiscal year 2024 includes $25.8 million in fresh-packed lemon sales compared to $26.6 million during the same period of fiscal year 2023. Approximately 1,446,000 cartons of US-packed fresh lemons were sold during the second quarter of fiscal year 2024 at a $17.85 average price per carton, compared to 1,547,000 cartons sold at a $17.23 average price per carton during the second quarter of fiscal year 2023.
Speaker Change: Agribusiness revenue for the second quarter of fiscal year, 2024 includes $25 $8 million and fresh packed lemon sales compared to $26 $6 million during the same period of fiscal year 2023.
Speaker Change: <unk> 1 million and 446000 cartons of U S. Packaged fresh lemons were sold during the second quarter of fiscal year 2024 at a $17 85 average price per carton compared to 1.547 million cartons sold at a $17 23 average.
Speaker Change: Price per carton during the second quarter of fiscal year 2023.
Speaker Change: Brokered lemons and other lemon sales were $3 $8 million and $2 $5 million in the second quarter of fiscal year, 2024, and 2023, respectively, representing 52% growth year over year.
Mark Palamountain: Brokered lemons and other lemon sales were $3.8 million and $2.5 million in the second quarter of fiscal year 2024 and 2023, respectively, representing 52% growth year over year. The company recognized $2.3 million of avocado in the second quarter of fiscal year 2024, compared to $3.6 million during the same period of fiscal year 2023. Avocado revenues in the second quarter of fiscal year 2023 included legal settlement proceeds of $2.4 million allocated to avocados.
Speaker Change: The company recognized $2 $3 million of avocado in the second quarter our revenue.
We have new year's fiscal 'twenty, 'twenty, four compared to $3.6 million during the same period of fiscal year 2023.
Speaker Change: Cost of revenues in the second quarter of fiscal year 2023 included legal settlement proceeds of $2 $4 million allocated to avocado.
Speaker Change: Approximately 1.595 million.
Mark Palamountain: Approximately 1,595,000 pounds of avocados were sold in aggregate during the second quarter of fiscal year 2024 at a $1.47 average price per pound, compared to approximately 941,000 pounds sold at a $1.30 average price per pound during the second quarter of fiscal year 2023. The company strategically postponed a significant proportion of its avocado harvest from the second quarter into the third quarter of fiscal year 2024 in order to capture more favorable anticipated prices.
Speaker Change: Pounds of Avocados were sold in aggregate during the second quarter of fiscal year, 'twenty 'twenty, four and a $1 47 said average price per pound compared to approximately 941000 pounds sold and a $1 30 average price per pound during the second quarter of fiscal year 2023.
Speaker Change: <unk>.
Speaker Change: The company strategically postpone a significant proportion of its avocado harvest from the second quarter into the third quarter of fiscal year 2024 in order to capture more favorable anticipated pricing.
Speaker Change: The company recognized $1 $2 million of Orange revenue in the second quarter of fiscal year 2024, compared to $1 $4 million in the second quarter of fiscal year 2023.
Mark Palamountain: The company recognized $1.2 million in orange revenue in the second quarter of fiscal year 2024 compared to $1.4 million in the second quarter of fiscal year 2023. Approximately 66,000 cartons of oranges were sold during the second quarter of fiscal year 2024 at a $17.58 average price per carton compared to approximately 88,000 cartons sold at a $15.72 average price per carton during the second quarter of fiscal year 2023. As a reminder, the company opportunistically has buy-sell arrangements for orders with our retail and food service customers to complement our lemon sales.
Speaker Change: Approximately 66000 cartons of oranges were sold during the second quarter of fiscal year, 2024, and a $17 58 average price per carton compared to approximately 88000 cartons sold at a $15 72 said average price per carton during the second quarter of fiscal year 2023.
Speaker Change: As a reminder, the company Opportunistically has buy sell arrangements for orders with our retail and foodservice customers to complement our lemon sales.
Speaker Change: Specialty citrus and other crop revenue was $800000 in the second quarter of fiscal year 2024, compared to $1 million in the second quarter of fiscal year 2023.
Mark Palamountain: Specialty citrus and other crop revenue was $800,000 in the second quarter of fiscal year 2024. Compared to 1 million dollars in the second quarter of fiscal year 2023, during the second quarter of fiscal years 2024 and 2023, approximately $29,000 and $41,000 40-pound carton equivalents were sold at an average price per carton of $29.24 and $24.78, respectively. Farm Management revenues were $2 million in the second quarter of fiscal year 2024, compared to $1.4 million in the same period of fiscal year 2023.
Speaker Change: During the second quarter of fiscal years, 2024, and 2023, approximately 29040 1040 pound for pound carton equivalents were sold at an average price per carton of $29 24 and $24.78 respectively.
Speaker Change: Farm management revenues were $2 million in the second quarter of fiscal year, 'twenty 'twenty four compared to one $4 million in the same period of fiscal year 2023.
Mark Palamountain: Total costs and expenses for the second quarter of fiscal year 2024 were $49.3 million compared to $59.1 million in the second quarter of last year. The decrease of $2.7 million was primarily related to the 2023 Cadiz Ranch asset disposal, partially offset by increases in agribusiness costs and expenses and selling general administrative expenses. Operating loss for the second quarter of fiscal year 2024 was $4.7 million, compared to an operating loss of $3.9 million in the second quarter of the previous fiscal year.
Speaker Change: Total costs and expenses for the second quarter of fiscal year, 2024, or $49 $3 million compared to $59 $1 million in the second quarter of last year.
The decrease of $2 $7 million was primarily related to the 2023, Cadiz ranch asset disposal, partially offset by increases in agribusiness costs and expenses and selling general and administrative expenses.
Speaker Change: Operating loss for the second quarter of fiscal year, 2024 was $4 $7 million compared to operating.
Speaker Change: Operating loss of $3 $9 million in the second quarter of the previous fiscal year.
Speaker Change: Net income applicable to common stock after preferred dividends for the second quarter of fiscal year, 2024 was $6 $4 million compared to a net loss applicable to common stock of $1 $7 million in the second quarter of fiscal year 2023.
Mark Palamountain: Net income applicable to common stock after preferred dividends for the second quarter of fiscal year 2024 was $6.4 million compared to a net loss applicable to common stock of $1.7 million in the second quarter of fiscal year 2023. Net income per diluted share for the second quarter of fiscal year 2024 was $0.35 compared to a net loss per diluted share of $0.10 for the same period of fiscal year 2023.
Speaker Change: Net income per diluted share for the second quarter of fiscal year 2024 was 35 cents compared to a net loss per diluted share of 10 cents for the same period of fiscal year 2023.
Speaker Change: Adjusted net income for diluted EPS for the second quarter of fiscal year, 2024 was $8 $1 million compared to $3 $9 million in the same period of fiscal year 2023.
Mark Palamountain: Adjusted net income for diluted EPS for the second quarter of fiscal year 2024 was $8.1 million compared to $3.9 million in the same period of fiscal year 2023. Adjusted net income for diluted share for the second quarter of fiscal year 2024 was 44 cents compared to adjusted net income for diluted share of 21 cents for the second quarter of fiscal year 2023. A reconciliation of net income or loss attributable to Limoneira Company to adjusted net income or loss for diluted EPS is provided at the end of this earnings release.
Speaker Change: Adjusted net income per diluted share for the second quarter of fiscal year 2024 was 44 cents compared to adjusted net income per diluted share of 21 cents for the second quarter of fiscal year 'twenty two 'twenty three.
Speaker Change: Conciliation of net income or loss attributable to luminaire company to adjusted net income or loss for diluted EPS is provided at the end of our earnings release.
Mark Palamountain: Adjusted EBITDA more than doubled in the second quarter of fiscal year 2024 compared to the prior year period and was $16.6 million compared to $6.2 million. The $10.4 million improvement highlights the continued momentum of our Harvest Real Estate Development Project. A reconciliation of net income or loss attributable to Limoneira Company to adjusted EBITDA is also provided at the end of our earnings release. Turning now to our balance sheet and liquidity. In the first quarter of last year, we sold our northern properties, which resulted in a total net proceeds of $98.4 million.
Speaker Change: Adjusted EBITDA more than doubled in the second quarter of fiscal year 2024, compared to the prior year period, and was $16 $6 million compared to $6 $2 million the $10 $4 million improvement highlights. The continued momentum of our harvest real estate development project are.
Speaker Change: A reconciliation of net income or loss attributable to Luminaire company to adjusted EBITDA is also provided at the end of our earnings release.
Speaker Change: Turning now to our balance sheet and liquidity.
Speaker Change: In the first quarter of last year, we sold our northern properties, which resulted in total net proceeds of $98 $4 million. The proceeds were used to pay down all our domestic debt, except the AG West farm credit $40 million non revolving line of credit, which has a fixed interest rate of 3.57% until July one.
Mark Palamountain: The proceeds were used to pay down all our domestic debt, except the Ag West Farm Credit $40 million non-revolving credit, which has a fixed interest rate of 3.57% until July 1st, 2025. Long-term debt as of April 30, 2024 was $59.5 million compared to $40.6 million at the end of fiscal year 2023. The increase was primarily driven by working capital needs, which typically peak in the second quarter.
Speaker Change: Of 2025.
Speaker Change: Long term debt as of April 32024 was $59 5 million compared to $46 million at the end of fiscal year 2023.
The increase was primarily driven by working capital needs, which typically peak in the second quarter.
Mark Palamountain: Debt levels as of April 30, 2024, minus $1.4 million of cash on hand, resulted in a net debt position of $58.7 million at quarter end. As Harold mentioned, it is important to note that our 50-50 joint venture with Lewis held $102.1 million of cash in equivalents as of April 30, 2024, of which our share is 50%. Furthermore, with the closure of the additional 554 residential homesites in April, the joint venture distributed $30 million on June 5, 2024, and Limoneira received $15 million in cash.
Speaker Change: Debt levels as of April 32024, minus $1.4 million of cash on hand resulted in a net debt position of $58 $7 million at quarter end.
Harold S. Edwards: As Harold mentioned it is important to note that our 50 50 joint venture with Louis held at $102 $1 million of cash and equivalents as of April 32024 of which our share is 50%.
luminaire: Furthermore, with the closure of the additional 554 residential Homesites in April the joint venture distributed $30 million on June 5th 2024, and luminaire received $15 million in cash proceeds.
Mark Palamountain: This additional liquidity source from our joint venture partnership provides further financial flexibility beyond the quarterly-end net debt figure. Now, I'd like to turn the call back over to Harold to discuss our fiscal year 2024 outlook and long-term growth pipeline. Thanks, Mark.
luminaire: This additional liquidity source from our joint venture partnership provides further financial flexibility beyond the quarter end net debt figure now I'd like to turn the call back over to Harold to discuss our fiscal year 2020 for outlook and long term growth pipeline.
Harold S. Edwards: We are very pleased with the strategic direction of our company. We continue to expect fresh lemon volumes to be in the range of 5 million to 5.5 million cartons for fiscal year 2024. We are increasing our avocado volume estimates and now expect them to be in the range of 9 million to 10 million pounds for fiscal year 2024, compared to previous guidance of 7 million to 8 million pounds. Additionally, longer term, we are raising our outlook for EBITDA accretion of $45 million to $55 million by fiscal year 2030, up from its previous target of $30 million.
Harold: Thanks, Marc we are very pleased with the strategic direction of our company. We continue to expect fresh lemon volumes to be in the range of 5 million to $5 5 million cartons for fiscal year 2024.
Harold: We are increasing our avocado volume estimates and now expect them to be in the range of 9 million to 10 million pounds for fiscal year 2024, compared to previous guidance of 7 million to 8 million pounds.
Harold: Longer term, we are raising our outlook for EBITDA accretion of $45 million to $55 million by fiscal year, 'twenty 30 up from its previous target of $30 million.
Speaker Change: This increase is underpinned by plans to significantly expand avocado production by planting 1000 acres of avocados over the next three years to capitalize on robust consumer demand trends. During this transition the company expects fiscal year 2025 in fiscal year 2026 operational.
Harold S. Edwards: This increase is underpinned by plans to significantly expand avocado production by planting 1000 acres of avocados over the next three years to capitalize on robust consumer demand trends. During this transition, the company expects fiscal year 2025 and fiscal year 2026 operational results to be similar to fiscal year 2024. Keep in mind, this does not take into account expected additional earnings from harvest at Lehmanera. Turning to our real estate, due to additional entitled lots and the increased value of the overall projects, we now expect to receive total future proceeds of $180 million, a 46% increase from previous expectations from Harvest at Limoneira, Limoneira-Lewis Community Builders II, and East Area II spread out over the next seven fiscal years. And with that, I'd like to turn it back to the operator. And we will now be...
Speaker Change: <unk> to be similar to fiscal year 2024 keep in mind. This does not take into account expected additional earnings from harvest at Lehman era.
Speaker Change: Turning to our real estate due to additional entitled lots and the increased value of the overall projects. We now expect to receive total future proceeds of $180 million, a 46% increase from previous expectation from harvest at Lehman era Luminaire Lewis community.
Speaker Change: Builders too and east area too spread out over the next seven fiscal years.
Speaker Change: And with that I'd like to turn it back to the operator.
Speaker Change: Thank you.
Operator: Thank you. We will now be conducting our question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.
Speaker Change: And we will now be conducting our question and answer session. If you would.
Speaker Change: To ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate that your line is in the question queue. You May Press Star two if you would like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star keys, one moment, please while we poll for.
Operator: One moment, please, while we pull for questions. And our first question comes from Raj Sharma with B. Reilly Securities. Please state your question.
Speaker Change: Questions.
Speaker Change: Yeah.
Speaker Change: Sure.
Speaker Change: And our first question comes from Raj Sharma with B Riley Securities. Please state your question.
Raj Sharma: Thank you for taking my questions. I have a couple of them.
Raj Sharma: Just wanted to clarify on Harvest, the phase one was that that's completed, phase two is completed, and now you have an additional 550 and phase one with 707 units, and phase II was 554, is that correct? And then just kind of reconcile the 1261 done so far to the 1500 that was original. If you could clarify that, and I've got a couple more questions.
Speaker Change: Hi.
Raj Sharma: Thank you for taking my questions.
Raj Sharma: I have a couple of them.
Speaker Change: Wanted to clarify.
Raj Sharma: On harvest the phase one well that's completed phase III completed.
Speaker Change: And now you have an additional $5 50 and phase one was 777 units.
Speaker Change: Phase two was 554 is that correct and then just kind of reconcile the 12 61.
Speaker Change: Done so far to the 1500 that was original if you could clarify that and I've got a couple more questions.
Harold S. Edwards: Yeah, so the 1261 is the completion of Phase 1 and Phase 2, as you indicated. The total number of single-family units that will be sold is 1,750, and then the additional 300 to get us to 2,050 will be for rent multifamily apartments there, if that answers the question.
Speaker Change: Yeah. So the 12 61 is the completion of phase one and phase two as you indicated the total number of single family units that will be sold is 1700 50, and then the additional 300 to get us to 2050 will be for rent multifamily apartments, there with that if that answers the question.
Speaker Change: Oh got it okay, great. Thank you yeah. So it's about it's about just around 500 additional lots in phase III and if you do the math.
Raj Sharma: Oh, got it. Okay, great. Thank you. Yeah, so it's about just around 500 additional lots in phase three.
Raj Sharma: Got it. Okay, that's very helpful.
Speaker Change: Got it yes.
Okay. That's very helpful. Thank you and then just your comment on strategic review.
Raj Sharma: Thank you. And then just your comment on strategic review. I think Harold's comment on strategic review. How does that relate to, I mean, you've obviously not announced the final results of the review, but how could you help us understand how that relates to the Chilean pack in the house, you know, being taken off the market and expanding the avocados? you know, for another three years. Can you provide some color there? Is it to make your ongoing operation a more robust one, acid light, and that perhaps helps the... Eventual shareholder value unlocked, host to the Strategic Review.
Speaker Change: Harold's comments on strategic review, how does that relate to.
Speaker Change: You've obviously not announce the final results of the review, but how could you help us understand how that related to the Chilean pack in the house.
Speaker Change:
Speaker Change: <unk> being taken off the market and expanding the autos.
Speaker Change: You know for another.
Speaker Change: Three years.
Speaker Change: Can you provide some color there.
Speaker Change: Is it to make.
Speaker Change: Ongoing operation a more robust one asset light and that perhaps helps.
Speaker Change: Eventual shareholder value.
Speaker Change: <unk>.
Speaker Change: As to the strategic review.
Harold S. Edwards: Yeah, so thank you for that question Raj. The strategic pivot there is as we look forward to the potential value creation of expanding our avocado production domestically. We believe that more than offsets what we were anticipating in potentially generating by investing more capital into Chile to build the packing house and then to increase our supply chain by the maturing lemon trees that we're working with, not only in our own orchards in Chile but also with our grower partners there.
Speaker Change: Yes. So thank you for that question Raj. So the strategic pivot there is as we look forward at the potential value creation of expanding our avocado production domestically.
Speaker Change: We believe that more than offsets, what we were anticipating and potentially generating by investing more capital into Chile to build the packinghouse and then to increase our supply chain by the maturing lemon trees that were working with.
Speaker Change: Not only of our own orchards in Chile, but also with our grow our partner Roche.
Speaker Change: Our partners there and so we felt strategically it would be a much better opportunity for us to.
Harold S. Edwards: And so we felt strategically it would be a much better opportunity for us to lock in better value creation for our shareholders by increasing the avocado production here, but also then transitioning our ideas of how we're going to add value to the 5 million cartons that we'll eventually have access to in Chile by continuing to focus on marketing and selling them, but not necessarily packing them, which would require an additional requirement for capital investment. So we think that it's a lot less capital investment to expand our avocado production, but we also think the value creation of that will be significantly greater than our views on what our forecasts were for the packing house in Chile. So when you put it all together, that was the rationale for why we made that pivot.
Speaker Change: Lock in better value creation for our shareholders by increasing the avocado production here, but also then transitioning our ideas of what how we're going to add value to the 5 million cartons that eventually will have access to in Chile by continuing.
Raj Sharma: Got it. That's very helpful.
And to focus on marketing and selling them, but not necessarily packing them, which was going to take an additional requirement for capital investment.
Speaker Change: So we think that it's it's a lot less capital investment to expand our avocado production, but we also think the value creation of that will be significantly greater than our views on what our forecasts were for the packinghouse at Chile. So when you put it all together that was that was the rationale of why we made that pivot.
Speaker Change: Got it that's very helpful and then just.
Raj Sharma: And then just a last question from me. Could you help clarify the economics for the thousand acres of avocados over three years? So how soon could you see this? And I see that your estimate of EBITDA has gone up from 30 million to 45. So is that the additional 15 to 20 all coming from The Avocados, and at current prices, how would those economics work?
Speaker Change: Last question from me could.
Speaker Change: Could you help clarify the economics of a thousand acres of avocados over three years. So how soon could you see this.
Speaker Change: And I see that you're.
Speaker Change: Estimate of EBITDA has gone up from 30 million to 45 is that the additional 15 to 20 all coming from.
Speaker Change: The avocados and at current prices, how good those economics work.
Speaker Change: Yeah. So great question. So right now avocados, we've got about 200 acres in the ground of which 800 and change our full bearing.
Harold S. Edwards: Yeah, so great question. So right now, we've got about 1200 acres of avocados in the ground, of which 800 and change our full bearing. Typically, we expect to get anywhere from 10 to 15,000 pounds per acre, depending on the age of the trees and whatnot. And so the additional 1000 acres that we're planting, we believe will get to somewhere between 25 and 30 million pounds a year in avocados. And as you know, the volatility of avocado pricing has been anywhere from $1 to $2 a pound over the last period of time. So the reason why we see it basically flat is, you know, as we planted. We started planting about 18 months ago.
Speaker Change: Typically we expect to get anywhere from 10 to 15000 pounds per acre depending on the age of the trees and whatnot and so that's the additional 1000 acres that we're planting we believe we'll get to somewhere between 25, and 30 million pounds, a year of avocados and as you know the volatility of avocado pricing it has been.
Harold S. Edwards: And so over the next call it two years, two and a half years, while we get those trees to their first commercialization, which is usually after year four, then you'll start to see that rise in EBITDA. So going, you know, call it from the 15 to $20 million range, you know, by 2030, I think, you know, somewhere between 40 and 55 is very achievable, you know, depending on the price, which is that sort of the $1.20 to $1.70 kind of range there. So, you know, between 26, 27, and then 30, I think you can just see incremental growth going up every year, you know, five to $7 million, just as those new trees come online.
Speaker Change: Anywhere from a dollar to $2 a pound over the last period of time so.
Speaker Change: The reason why we see it basically flat as you know as we've planted we started planting about 18 months ago and so over the next call. It two years, two and a half years, while we get those trees to their first commercialization, which is usually after year. Four then you'll start to see that rise in EBITDA, So Boeing call.
Speaker Change: From the $15 million to $20 million range.
Speaker Change: By 2030, we think somewhere between 40 and 55 is a very achievable depending on the price and that is that sort of that $1 20 to $1 70 kind of range there. So.
Speaker Change: Between 'twenty six 'twenty seven and then 30 I think you can just see incremental growth going up every year and we have $5 million to $7 million just as those new trees come on line.
Raj Sharma: Got it. And then, just lastly, so obviously, you are expecting the next three years, you don't, you don't expect any sort of demand-supply dynamics to suffer in Avocados, you expect the demand-supply dynamics to stay as robust as they probably look to you right now. I mean, any impact from Mexico that that could have?
Speaker Change: Got it and then just just lastly, so obviously.
Speaker Change: You are expecting the next three years, you don't you don't expect any sort of demand supply to suffer.
Speaker Change: In avocado, you expect the demand supply dynamics to stay as robust as they probably look to you right now I mean any impact from Mexico.
Speaker Change: Hum.
Harold S. Edwards: Now that's a great question Raj. So we are very bullish on California avocados because if you look at the seasonality of the avocados that we produce here today and into the future, we believe we have a sustainable market niche in the North American market where Mexico is between crops, and that creates a little window of opportunity from May to July that will allow us to essentially be alone with California. We'll be competing against Peruvian fruit at that point, but the market today, and we believe sustainably into the future, is seeking more California fruit during this time period because the logistics are closer to the market, it's a fresher product, and it's perceived as a very high quality product, which consumers demand, want, and prefer.
Now that's a great question Raj so we.
Speaker Change: Are very bullish on California, avocados, because if you look at the seasonality of the avocados that we produce here today and into the future. We believe we have a sustainable market niche in the North American market, where Mexico is between crops and that.
Raj Sharma: It's a little window of opportunity from May to July that were.
Raj Sharma: To allow us to essentially be alone with California will be competing against a Peruvian fruit at that point, but the the market today and we believe sustainably into the future is seeking more California fruit. During this time period, because the logistics are closer to the.
Raj Sharma: Market, it's a fresher product and it's a it's perceived as a very high quality product, which are which consumers demand and want and prefer and so we believe this this little niche is not only sustainable but one of the other dynamics. That's driving this decision is is ads.
Harold S. Edwards: We believe this little niche is not only sustainable, but one of the other dynamics that's driving this decision is as you've seen drought conditions and water challenges in San Diego County, Orange County, moving up into Los Angeles County, you've seen a lot of that California production of avocados come out and a lot more production coming up into Ventura County where the climate is ideal and there's still sustainable sources of water that exist in this area that we believe gives us a unique opportunity to capitalize on a significant growth in the amount of California avocados that are produced and then marketed and sold domestically here in the United States. Great, excellent. Thank you.
Speaker Change: <unk> seen drought conditions and water challenges in San Diego County, Orange County, moving up into Los Angeles County, you've seen a lot of that California production of avocados come out and a lot more production coming up in the Ventura County, where the climate is ideal and Theres still some.
Speaker Change: Stable sources of water that exist in this this area that we believe gives us a unique opportunity to capitalize on.
Speaker Change: Significant growth in the amount of California, Avocados that are produced and then marketed and sold domestically here in the United States.
Raj Sharma: Great, great, excellent. Thank you for taking my questions. I'll take this offline.
Speaker Change: Great Great excellent. Thank you for taking my questions I'll take this offline.
Raj Sharma: Okay. Thank you Raj.
Raj Sharma: Thank you.
Operator: As a reminder, to ask a question, press star 1 on your telephone keypad. Press star 2 to remove yourself from the queue. Once again, to get into the queue, press star 1 on your telephone keypad. Our next question comes from Ben Klieve with Lake Street Capital Market. Please state your question.
Speaker Change: A reminder to ask a question press star one on your telephone Keypad Press star two to remove yourself from the queue once again to get into the queue Press star one on your telephone keypad.
Benjamin Shelton Bienvenu: Our next question comes from Ben <unk> with Lake Street Capital markets. Please state your question.
Benjamin David Klieve: All right, thanks for taking my question. First, congratulations on really accepting these out of the harvest initiative. I know that took a while to be able to announce, and yeah, just congratulations again getting that over the finish line thus far. My questions, though, are related to agribusiness operations. First of all, on the avocado side, I'm wondering if you can elaborate on kind of what is different in your avocado expansion plans over the next few years, then you know, then maybe you had thought over the last couple of quarters because it seems like this was kind of the direction you were going, and I'm wondering if I'm wrong, is there something that's materially changed here in your avocado expectations that you're announcing today?
Benjamin Shelton Bienvenu: Alright, Thanks for taking my question first congratulations on the really sudden news out of the harvest.
Benjamin Shelton Bienvenu: Initiative.
Speaker Change: No no.
Speaker Change: It took a while to Oh.
Speaker Change: To be able to announce them.
Speaker Change: Just congratulations again getting out over the finish line thus far.
Speaker Change: My question's, though are related to the agribusiness operations first of all on the avocado side.
Speaker Change: I'm wondering.
Speaker Change: I'm wondering if you can elaborate on kind of what.
Speaker Change: Different than your avocado expansion plans over the next few years then.
Speaker Change: Maybe you had had spot over the last couple of quarters because it seems like this is kind of the direction. You were you were going and I'm wondering if I'm. If I'm wrong is there something that's materially changed here in your avocado expectations are that you are announcing today.
Speaker Change: No. Thanks for that question Ben So we.
Harold S. Edwards: No, thanks for that question, Ben. So we really just have strengthened our confidence in that niche that we believe the California avocado possesses, with its seasonality of being able to be harvested from approximately May through July. And we believe that the combination of Mexican production out of both Michoacan and Jalisco combined then with the production that comes out of California provides the perfect one-two punch of year-round supply for the North American market and probably the most logistically efficient and the best supply for the market.
Speaker Change #100: Really just have strengthened our confidence in that niche that we believe the California avocado possess.
Speaker Change: Possesses.
Speaker Change: It's seasonality of being able to be harvested from approximately may through July and we believe that the combination of the Mexican production out of both mutual con and Jalisco.
Speaker Change #101: I'm buying then with the production that comes out of California.
Provides the perfect one two punch of year round supply for the North American market and probably the most logistical logistically.
Speaker Change #102: Efficient and the best supply for the market.
Harold S. Edwards: Again, as I mentioned before, the California window and the niche that its production exists in seasonally brings it into the United States at a time when the Mexican crops will be between seasons, and really, California production will be competing, if you will, against Peruvian production. We believe that creates a really interesting demand profile that we believe is sustainable and will continue to grow as we move forward. That's given us the confidence to transition some of our older, less profitable lemon blocks and convert them into avocados.
Speaker Change #102: And again as I mentioned before the California window and the niche that is that at its production exists seasonally.
Speaker Change #102: Brings it into the United States at a time, where the Mexican crops will be between seasons.
Speaker Change #103: And really the key.
Speaker Change #103: California production will be competing if you will against the Peruvian production.
Speaker Change #104: And so we believe that creates a really interesting demand profile that we believe is sustainable and will continue to grow.
Speaker Change #104: As we move forward, so that's given us the confidence.
Speaker Change #105: Two to transition some of our older less profitable lemon blocks and convert them into avocados.
Harold S. Edwards: We believe the demand trends for avocados continue to be favorable with significant tailwinds behind them. Then, again, for just a refresher, Mexico produces somewhere in the magnitude of four billion pounds a year, and the California avocado crop is somewhere between 200 and 300 million pounds. You see, we pale in comparison to an older magnitude of production. However, because of our seasonality, we believe we have a sustainable niche that can meet demand for our product.
Speaker Change #106: We believe the demand trends in avocados continue to be favorable with significant tailwind behind them.
Speaker Change #107: And then again for just a refresher.
Speaker Change #108: Mexico produces somewhere in the magnitude of 4 billion pounds, a year and the California avocado crop is somewhere between 200 and 300 million pounds. So you see we we sort of pale in comparison from an order of magnitude of production. However, because of our seasonality. We believe we have.
Speaker Change #108: A sustainable niche that can meet demand for our product. So we think the combination of those two things creates a really great opportunity to create value with the land that was producing lemons, which as we've discussed have been typically oversupplied for the last few years and convert them into avocados, which.
Harold S. Edwards: We think the combination of those two things creates a really great opportunity to create value with the land that was producing lemons, which, as we've discussed, have been typically oversupplied for the last few years, and convert it into avocados, which are significantly more profitable per acre on our own farms here in Ventura County.
Speaker Change #108: Eh are significantly more profitable per acre and are on our own farms here in Ventura County.
Benjamin David Klieve: Got it. Thanks, Harold.
Harold: Thanks Harold.
Harold:
Speaker Change #109: Your you alluded to one of my other questions on women pricing continues to seem like what's the oversupply is.
Harold S. Edwards: And you alluded to one of my other questions on lemon pricing, which continues to seem like like oversupply is driving this. Can you kind of talk about the lemon pricing outlook? I mean, the 1785. I think it was in the quarter. Was that kind of in line with your expectations at this time three months ago, or did that disappoint you? And kind of what are your expectations now for the second half of this fiscal year?
Speaker Change #110: Driving this can you kind of talk about the London pricing outlook I mean, the 17 85 I think it was in the quarter or was that kind of in line with your expectations. At this time three months ago or did not disappoint and kind of what's your expectations now here in the second half of this fiscal year.
Harold S. Edwards: Now, believe it or not, the market is a lot stronger, and prices are a lot stronger than a year ago. The challenges that we had in the first and second quarters, actually the second quarter, which we're reporting on now, were really driven more by the product mix of the lemons that we had available to sell, which had a much higher percentage of the lowest quality, which had the lowest price of fresh marketable fruit by standards.
Speaker Change #111: No I believe it or not the market is a lot stronger and the pricing is a lot stronger than a year ago. The challenges that we had in the first and second quarters or actually the second quarter, which we're reporting on now was really driven more by the product mix of the lemons that we had available to sell with a much higher <unk>.
Speaker Change #111: Percentage of the lowest quality, which has the lowest price of fresh marketable fruit of the standards and a lot of that was just driven by the landmark mentioned this earlier, but by the rains that we had remember we had we had a significant amount of rainfall fall and the winter that while it was a blessing from filling up our Aqua <unk>.
Harold S. Edwards: And a lot of that was just driven by, and Mark mentioned this earlier, but by the rains that we had. Remember, we had a significant amount of rainfall in the fall and the winter that, while it was a blessing from filling up our aquifers, it did take a toll in the second quarter on the quality of what we put out. If we had a higher percentage of fancy fruit, which is more normal for what we receive, we would have seen even higher prices. We think things are actually getting better in the lemon space.
Speaker Change #112: It did take a toll in the second quarter on the quality of what we put out.
Speaker Change #113: We had a higher percentage of fancy fruit, which is more normal for what we what we what we receive you would've seen even a much higher pricing. So we think things are actually getting better in the lemon space and because this is year, I guess five or six of challenging pricing and higher.
Harold S. Edwards: Because this is the year, I guess, five or six of challenging pricing and higher costs, you're going to see more and more lemons be pushed out, and I think that's all going to help the overall pricing environment of the lemons that we continue to produce and sell into the future. And I'll just add on to that: the current price right now is about $19.50, and again, that's probably a little bit low. The pricing environment is a tale of two stories out there. There's not a lot of smaller sizes out there, so the $165s and the $200s.
Speaker Change #113: Cos.
Speaker Change #114: Youre going to see more and more lemons b b be pushed out and I think that's all going to help the.
Speaker Change #115: The overall pricing environment of the lemons that we continue to produce and sell into the future and I'll just add onto that the current pricing right. Now is about 1950 and again, that's even probably a little bit low that the pricing environment is a tale of two stories out there there's not a lot of the smaller sizes out there. So the $1 65 in the two.
Speaker Change #115: <unk> I.
Harold S. Edwards: I think I heard a quote today in the high $30 range. So that's obviously supply-demand dynamics, but we're feeling optimistic. We're a dollar higher than last year, and it's just going to be a slower march up in it, but still a profitable one at this point.
Speaker Change #115: I think I heard a quote today in the high $30 range. So that's obviously supply that man dynamics, but were.
Speaker Change #115: Oh, and optimistic where a dollar higher than last year.
Speaker Change #115: It's just going to be a slower march up in it but still at a profitable one at this point.
Speaker Change #116: Got it that's helpful from both of you. Thank you Mark one for you and then I'll get back in line I mean, you talked about the kind of expectations in fiscal 'twenty five 'twenty six.
Benjamin David Klieve: You know, you talked about the kind of expectations in fiscal 25 and 26 as you're ramping up your avocado acreage. Totally understandable. I'm wondering, though, if you can help us understand a bit about the kind of the CapEx that needs to go into this initiative and then the associated OpEx with, you know, managing this level of acreage before it becomes productive over the next couple of years.
Speaker Change #118: You're ramping your avocado acreage totally understandable I'm wondering though if you can help us understand a bit about kind of the capex needs to go into this into this initiative and then the associated Opex with managing these this level of acreage before it becomes productive over the next cut.
Mark Palamountain: Yeah, great question. So if we look at it holistically, it's about $15,000 an acre to plant an avocado and then manage it for the first four years. And all of that cost goes into inventory on our balance sheet, so we won't see that.
Speaker Change #117: Three years.
Mark Palamountain: So you'll see quite a bit of cost come out of the business over the next few years until these trees come into commercialization. And also, we'll be pushing those old tired lemon trees going forward. So you'll see a little bit of our volume drop, and then we'll be picking up outside volume from outside partner growers, and then also more agency business. So but once we get through year four, which I would say a third of our plantings right now are about a year and a half in, then you'll start seeing those costs come back on.
Speaker Change #119: Yeah, Great question. So if we look at it holistically, it's about $15000 an acre to plant and avocado and then manage it for the first four years and all of that cost goes in on inventory on our balance sheet. So we won't see that so you'll see quite a bit of cost come out of the business over the next few years until these these.
Speaker Change #119: Trees come into commercialization.
Speaker Change #120: And also we'll be pushing those old tired lemon trees.
Speaker Change #121: And going forward, so you'll see a little bit of our volume dropped and then we will be picking up outside outside.
Mark Palamountain: And then actually, we'll be getting revenue from those trees as well. So it's, it's, that's why we wanted to set the expectation that the lemon business will probably be flat from our own perspective. We will also be planting some new lemon trees.
Speaker Change #120: Hum.
Speaker Change #122: Partner growers volume and then also more agency business, so, but once we get through year, four which I'd say.
Speaker Change #122: Third of our plantings right now are about a year and a half and then youll start seeing those costs come back on and then actually you will be getting revenue from the streets as well so.
Speaker Change #122: It's that's why we wanted to set the expectation that that the lemon business will probably be flat from our own perspective, we will also be planting some new lemons renewing lemon trees.
Mark Palamountain: And I think the total capex over the five-year project is about 15 million. So we're already about four or 5 million into that. So call it 10 to go. And that'll be spread out over three years.
Speaker Change #122: The total capex over the five year project is about $15 million. So we're already about four 5 million into that so call. It 10 to go.
Speaker Change #123: And that'll be spread out over three years, So you won't really see it.
Benjamin David Klieve: Okay, great. Very good. Well, I appreciate all the color. Thank you for taking my questions. We'll get back in queue.
Speaker Change #124: Okay, great very good well I appreciate all the color.
Benjamin David Klieve: So you won't really see it. Okay, great. Very good. Well, I appreciate it.
Speaker Change #125: Thanks for taking my questions I'll get back in queue.
Ben: Thanks, Ben Thank you.
Ben: Mhm.
Ben: Thank you and at this point there are no further questions at this time I'll hand, the floor back to Harold Edwards for closing comments.
Harold S. Edwards: Thank you. And at this point, there are no further questions at this time. I'll hand the floor back to Harold Edwards for closing comments.
Harold S. Edwards: We'd like to thank you for your questions and your interest in Limoneira, and we'd like to wish you all a great day. Thank you very much.
Harold S. Edwards: We'd like to thank you for your questions and your interest in leaving era and we'd like to wish you all a great day. Thank you very much.
Harold S. Edwards: Thank you and with that we conclude today's conference all parties may disconnect have a good day.
Operator: Thank you, and with that, we conclude today's conference. All parties may disconnect. Have a good day.