Q1 2026 Limoneira Co Earnings Call

March 12, 2026

Operator 1: Greetings, and welcome to Limoneira's Q1 2026 Financial Results Conference Call. At this time, all participants are on 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. You may begin.

Speaker #2: It is now my pleasure to introduce your host, John Mills with ICR. Thank you. You may begin. Great, thank you. Good afternoon, everyone, and thank you for joining us for Limoneira's first quarter fiscal year 2026 conference call.

John Mills: Great. Thank you. Good afternoon, everyone, and thank you for joining us for Limoneira's Q1 Fiscal Year 2026 Conference Call. On the call today are Harold Edwards, President and Chief Executive Officer, and Greg Hamm, Chief Financial Officer. By now, everyone should have access to the Q1 fiscal year 2026 earnings release, which went out today after the market closed. If you've not had a chance to view the release, it's available on the investor relations portion of the company's website at limoneira.com. This call is being webcast, and a replay will be available on Limoneira's 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.

Speaker #2: On the call today are Harold Edwards, President and Chief Executive Officer, and Greg Hamm, Chief Financial Officer. By now, everyone should have access to the first quarter fiscal year 2026 earnings release, which went out today after the market closed.

Speaker #2: If you've not had a chance to view the release, it's available on the investor relations portion of the company's website at limoneira.com. This call is being webcast and a replay will be available on Limoneira's website as well.

Speaker #2: 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 #2: 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.

John Mills: 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 risks detailed in the company's Form 10-Qs and 10-Ks 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, or otherwise. Please note that during today's call, we'll be discussing non-GAAP financial measures, including results on an adjusted basis.

Speaker #2: Important factors that could cause or contribute to such differences include risks detailed in the company's Form 10-Qs and 10-Ks filed with the SEC, and those mentioned in the earnings release.

Speaker #2: 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 #2: Please note that during today's call, we'll 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 Limoneira's ongoing results of operations particularly when comparing underlying results from period to period.

John Mills: We believe these adjusted financial measures can facilitate a more complete analysis and greater understanding of Limoneira'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. A reconciliation of adjusted EBITDA and adjusted diluted earnings per share to the most directly comparable GAAP financial measures are included in the company's press release, which has been posted to its website. With that, it's my pleasure to turn the call over to the company's President and CEO, Mr. Harold Edwards.

Speaker #2: We have provided as much detail as possible in 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 #2: 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 to its website.

Speaker #2: And with that, it is my pleasure to turn the call over to the company's President and CEO, Mr. Harold Edwards. Thanks, John, and good afternoon, everyone.

Harold Edwards: Thanks, John, and good afternoon, everyone. Our Q1 results reflect the strategic transformation we've been executing to position Limoneira for sustainable long-term value creation. While the cadence of lemon sales will shift during our return to Sunkist, and due to our return to Sunkist, with the Q1 and Q2 expected to have lower sales and the Q3 and Q4 higher, we're pleased that fresh utilization improved in the Q1. Even though we incurred some specific costs, which we believe are non-recurring during this transition quarter, the strategic foundation we've built is now delivering measurable results, and we remain firmly on track to achieve our fiscal 2026 objectives, including our annual volume guidance for lemons and avocados. I would like to add a little more color on the specific costs reflected in our Q1 results.

Speaker #2: Our first quarter results reflect the strategic transformation we've been executing to position Limoneira for sustainable, long-term value creation. While the cadence of lemon sales will shift during our return to SunKist, and due to our return to SunKist, with the first and second quarters expected to have lower sales and the third and fourth quarters higher, we're pleased that fresh utilization improved in the first quarter.

Speaker #2: Even though we incurred some specific costs, which we believe are non-recurring during this transition quarter, the strategic foundation we've built is now delivering measurable results, and we remain firmly on track to achieve our fiscal 2026 objectives, including our annual volume guidance for lemons and avocados.

Speaker #2: I would like to add a little more color on the specific costs reflected in our first quarter results. We experienced $2.5 million in specific expenses which consisted of $1 million in packing house repairs that we recovered from insurance proceeds in the second quarter.

Harold Edwards: We experienced $2.5 million in specific expenses, which consisted of $1 million in packing house repairs that we recovered from insurance proceeds in Q2. Half a million dollars in costs related to the closing of our Chilean farming operations and $1 million in foreign exchange fluctuation on the receivables from the sale of the Chilean farming assets. Adjusted net loss was a $0.48 loss per diluted share and includes approximately $0.06 per share of loss related to the packing house repairs, and closing the Chilean farming operations. Additionally, we are expecting another $1.4 million of insurance proceeds in Q2. Looking beyond these items, our underlying business performance demonstrates the strength of our strategic repositioning. Our Sunkist partnership is functioning as planned. Our avocado operations continue to expand, and our asset monetization initiatives are progressing on schedule.

Speaker #2: Half a million dollars in costs related to the closing of our Chilean farming operations and $1 million in foreign exchange fluctuation on the receivables from the sale of the Chilean farming assets.

Speaker #2: Adjusted net loss was a $48 cent loss per diluted share and includes approximately $0.06 per share of loss related to the packing house repairs and closing the Chilean farming operations.

Speaker #2: Additionally, we are expecting another $1.4 million of insurance proceeds in the second quarter. Looking beyond these items, our underlying business performance demonstrates the strength of our strategic repositioning.

Speaker #2: Our sun-kissed partnership is functioning as planned. Our avocado operations continue to expand. And our asset monetization initiatives are progressing on schedule. The strategic initiatives we began implementing were driven by a clear assessment of market realities.

Harold Edwards: The strategic initiatives we began implementing were driven by a clear assessment of market realities. We took decisive action to reduce our exposure to volatile lemon pricing while building sustainable competitive advantages. In Q4 of fiscal year 2025, we accelerated this work by reducing future costs to position us for stronger fiscal year 2026 results. In fiscal year 2026, we expect the enhancements we are making to our cost structure will generate $10 million in selling, general, and administrative savings compared to fiscal year 2025. Importantly, Sunkist provides enhanced customer access to premium accounts and major US retailers through a full category citrus offering. This positions us to deliver comprehensive solutions for retail buyers while removing pricing pressure from the marketplace and strengthening both our packing margins and grower-partner relationships. Another key initiative involved expanding our avocado production.

Speaker #2: We took decisive action to reduce our exposure to volatile lemon pricing while building sustainable, competitive advantages. In the fourth quarter of fiscal year 2025, we accelerated this work by reducing future costs to position us for stronger fiscal year 2026 results.

Speaker #2: In fiscal year 2026, we expect the enhancements we are making to our cost structure will generate $10 million in selling, general, and administrative savings compared to fiscal year 2025.

Speaker #2: Importantly, Sun-kissed provides enhanced customer access to premium accounts and major U.S. retailers through a full-category citrus offering. This positions us to deliver comprehensive solutions for retail buyers while removing pricing pressure from the marketplace and strengthening both our packing margins and grower partner relationships.

Speaker #2: Another key initiative involved expanding our avocado production. Today, we have 1,600 acres planted, with only 800 acres currently bearing fruit. The additional 800 acres will begin bearing fruit over the next two to four years, representing a near 100% increase in our avocado production capacity.

Harold Edwards: Today, we have 1,600 acres planted, with only 800 acres currently bearing fruit. The additional 800 acres will begin bearing fruit over the next 2 to 4 years, representing a near 100% increase in our avocado production capacity. California avocados command premium pricing due to superior quality, and our strategic location provides logistical advantages to the highest per capita consumption markets in the Western United States. Our strategic initiatives extend well beyond agriculture. We have our planned 50/50 organic recycling joint venture with Agromin that we expect to process 300,000 tons of organic waste annually and contribute to EBITDA when the facility becomes operational in fiscal year 2027. We also have our real estate development project, Harvest at Limoneira.

Speaker #2: California avocados command premium pricing due to superior quality, and our strategic location provides logistical advantages to the highest per capita consumption markets in the western United States.

Speaker #2: Our strategic initiatives extend well beyond agriculture. We have our planned 50/50 organic recycling joint venture with Agerman that we expect to process 300,000 tons of organic waste annually and contribute to EBITDA when the facility becomes operational in fiscal year 2027.

Speaker #2: We also have our real estate development project, Harvest at Limoneira. We continue to expect future proceeds from Harvest Limoneira Lewis Community Builders II and East Area II to total $155 million over the next five fiscal years.

Harold Edwards: We continue to expect future proceeds from Harvest, Limoneira Lewis Community Builders Two, and East Area Two to total $155 million over the next five fiscal years. Phase three of the project consists of approximately 550 home lots and 300 apartments, plus we have 35 acres of East Area Two medical pavilion development that we believe could begin to be monetized in fiscal year 2026. Additionally, we have Limco Del Mar, our 221-acre agricultural infill property in the city of Ventura, California, which represents a strategic asset with potential for residential development and significant long-term value creation. We are also unlocking value by divesting non-strategic assets and monetizing our water rights to fuel this transformation and strengthen our balance sheet.

Speaker #2: Phase three of the project consists of approximately 550 home lots and 300 apartments, plus we have 35 acres of East Area II medical pavilion development that we believe could begin to be monetized in fiscal year 2026.

Speaker #2: Additionally, we have Limco Del Mar, our 221-acre agricultural infill property in the city of Ventura, California, which represents a strategic asset with potential for residential development and significant long-term value creation.

Speaker #2: We are also unlocking value by divesting non-strategic assets and monetizing our water rights to fuel this transformation and strengthen our balance sheet. We are now advancing the monetization of our Windfall Farm's vineyard in Paso Robles and our Argentina agricultural assets, with Windfall Farm's completion targeted by the end of fiscal year 2026.

Harold Edwards: We are now advancing the monetization of our Windfall Farms vineyard in Paso Robles and our Argentina agricultural assets with Windfall Farms completion targeted by the end of fiscal year 2026. Our water monetization strategy is also progressing well. Following last year's $1.7 million realization from Santa Paula Basin water rights sales, we are actively working to realize meaningful value from our Class Three Colorado River water rights and Santa Paula Basin conserve pumping rights. These water assets represent high-value, non-operational resources that we can convert to cash while maintaining our agricultural operations. The proof points are clear. Our cost structure is dramatically improved, our customer access enhanced, our product mix is optimized, and our asset base is being monetized. These are strategic initiatives that we believe will drive financial results throughout fiscal year 2026.

Speaker #2: Our water monetization strategy is also progressing well. Following last year's $1.7 million realization from Santa Paula Basin water rights sales, we are actively working to realize meaningful value from our Class III Colorado River water rights and Santa Paula Basin conserved pumping rights.

Speaker #2: These water assets represent high-value, non-operational resources that we can convert to cash while maintaining our agricultural operations. The proof points are clear. Our cost structure is dramatically improved.

Speaker #2: Our customer access is enhanced. Our product mix is optimized. And our asset base is being monetized. These are strategic initiatives that we believe will drive financial results throughout fiscal year 2026.

Speaker #2: In summary, our first quarter fiscal year 2026 results reflect a company in transition, absorbing specific costs while building the foundation for sustained profitability. The strategic initiatives we've implemented are now delivering tangible financial benefits.

Harold Edwards: In summary, our Q1 fiscal year 2026 results reflect a company in transition, absorbing specific costs while building the foundation for sustained profitability. The strategic initiatives we've implemented are now delivering tangible financial benefits. We anticipate you will see these improvements on a sequential basis this year, as we expect our Q2 to show improvement compared to the Q1 and our Q3 and Q4 being the strongest period of the year. We've transformed our cost structure, focused our revenue streams, optimized our asset base, and positioned ourselves for sustainable EBITDA growth. The Limoneira of today is a fundamentally stronger company, more focused and better positioned for long-term value creation. We look forward to demonstrating continued progress throughout fiscal year 2026. Now I'd like to officially introduce Greg Hamm as our new Chief Financial Officer.

Speaker #2: We anticipate you will see these improvements on a sequential basis this year, as we expect our second quarter (Q2) to show improvement compared to the first quarter (Q1), and our third (Q3) and fourth (Q4) quarters being the strongest period of the year.

Speaker #2: We've transformed our cost structure, focused our revenue streams, optimized our asset base, and positioned ourselves for sustainable EBITDA growth. The Limoneira of today is a fundamentally stronger company.

Speaker #2: More focused and better positioned for long-term value creation. We look forward to demonstrating continued progress throughout fiscal year 2026. Now I'd like to officially introduce Greg Ham as our new Chief Financial Officer.

Speaker #2: I've had the privilege to work with Greg for over 22 years at Limoneira since he was hired in 2004. He previously served as our Vice President and Corporate Controller since 2008.

Harold Edwards: I've had the privilege to work with Greg for over 22 years at Limoneira since he was hired in 2004. He previously served as our Vice President and Corporate Controller since 2008. Greg succeeds Mark Palamountain, who served as our Chief Financial Officer since 2018 and was instrumental in our strategic transformation. As part of our commitment to succession planning, we identified Greg as a candidate for Chief Financial Officer, and we have worked closely with him over the years to prepare him for this role. Now let me turn it over to Greg for the financial details, and then we'll take your questions.

Speaker #2: Greg succeeds Mark Palamountain, who served as our Chief Financial Officer since 2018 and was instrumental in our strategic transformation. As part of our commitment to succession planning, we identified Greg as a candidate for Chief Financial Officer and we have worked closely with him over the years to prepare him for this role.

Speaker #2: Now let me turn it over to Greg for the financial details and then we'll take your questions. Thank you, Harold. And good afternoon, everyone.

Gregory C. Hamm: Thank you, Harold, and good afternoon, everyone. I'm pleased to be speaking with you today as Limoneira's chief financial officer. While I've had the privilege of working alongside this talented team for a number of years, this marks my first earnings call in this role, and I'm pleased to share our financial results with you. As Harold mentioned, we're executing a significant transformation that we believe positions Limoneira for sustainable long-term value creation. Let me walk you through the financial details of our Q1 performance and explain how our strategic initiatives are ready to deliver measurable results. Before diving into specifics, I want to remind everyone that our business is best viewed on an annual basis due to its seasonal nature. With our transition to Sunkist, our quarterly rhythm has fundamentally shifted.

Greg Hamm: Thank you, Harold, and good afternoon, everyone. I'm pleased to be speaking with you today as Limoneira's chief financial officer. While I've had the privilege of working alongside this talented team for a number of years, this marks my first earnings call in this role, and I'm pleased to share our financial results with you. As Harold mentioned, we're executing a significant transformation that we believe positions Limoneira for sustainable long-term value creation. Let me walk you through the financial details of our Q1 performance and explain how our strategic initiatives are ready to deliver measurable results. Before diving into specifics, I want to remind everyone that our business is best viewed on an annual basis due to its seasonal nature. With our transition to Sunkist, our quarterly rhythm has fundamentally shifted.

Speaker #2: I'm pleased to be speaking with you today as Limoneira's Chief Financial Officer. While I've had the privilege of working alongside this talented team for a number of years, this marks my first earnings call in this role and I'm pleased to share our financial results with you.

Speaker #2: As Harold mentioned, we're executing a significant transformation that we believe positions Limoneira for sustainable, long-term value creation. Let me walk you through the financial details of our first quarter performance and explain how our strategic initiatives are ready to deliver measurable results.

Speaker #2: Before diving into specifics, I want to remind everyone that our business is best viewed on an annual basis due to its seasonal nature. With our transition to Sunkist, our quarterly rhythm has fundamentally shifted.

Speaker #2: Under our partnership with Sunkist, the first and second quarters are now our seasonally softer periods, while the third and fourth quarters will be stronger.

Gregory C. Hamm: Under our partnership with Sunkist, the Q1 and Q2 are now our seasonally softer periods, while the Q3 and Q4 will be stronger. As we move through fiscal year 2026, you'll see this new cadence taking shape. Let me walk you through our revenue performance for the Q1. Total net revenues were $18.2 million, compared to $34.3 million in the Q1 of fiscal year 2025. Agribusiness revenues totaled $16.8 million, compared to $32.9 million in the prior year Q1.

Greg Hamm: Under our partnership with Sunkist, the Q1 and Q2 are now our seasonally softer periods, while the Q3 and Q4 will be stronger. As we move through fiscal year 2026, you'll see this new cadence taking shape. Let me walk you through our revenue performance for the Q1. Total net revenues were $18.2 million, compared to $34.3 million in the Q1 of fiscal year 2025. Agribusiness revenues totaled $16.8 million, compared to $32.9 million in the prior year Q1.

Speaker #2: As we move through fiscal year 2026, you'll see this new cadence taking shape. Let me walk you through our revenue performance for the first quarter.

Speaker #2: Total net revenues were $18.2 million, compared to $34.3 million in the first quarter of fiscal year 2025. Agribusiness revenues totaled $16.8 million, compared to $32.9 million in the prior year first quarter.

Speaker #2: The year-over-year decrease in total net revenue reflects the strategic transition to Sunkist for lemon sales and marketing and the resulting shift in quarterly sales cadence.

Gregory C. Hamm: The year-over-year decrease in total net revenue reflects the strategic transition to Sunkist for lemon sales and marketing, and the resulting shift in quarterly sales cadence, as well as exiting our brokerage business in Q1 of fiscal year 2026, and farm management business during fiscal year 2025, which further contributed to the year-over-year revenue decrease. Other operations revenue was $1.4 million and essentially flat compared to the prior year quarter. Fresh packed lemon sales were $11.9 million compared to $21.2 million in the same period last year. We sold approximately 681,000 cartons of US-packed fresh lemons at an average price of $17.41 per carton, compared to 1,147,000 cartons at $18.44 per carton in the prior year first quarter.

Greg Hamm: The year-over-year decrease in total net revenue reflects the strategic transition to Sunkist for lemon sales and marketing, and the resulting shift in quarterly sales cadence, as well as exiting our brokerage business in Q1 of fiscal year 2026, and farm management business during fiscal year 2025, which further contributed to the year-over-year revenue decrease. Other operations revenue was $1.4 million and essentially flat compared to the prior year quarter. Fresh packed lemon sales were $11.9 million compared to $21.2 million in the same period last year. We sold approximately 681,000 cartons of US-packed fresh lemons at an average price of $17.41 per carton, compared to 1,147,000 cartons at $18.44 per carton in the prior year Q1.

Speaker #2: As well as exiting our brokerage business in the first quarter of fiscal year 2026 and farm management business during fiscal year 2025, which further contributed to the year-over-year revenue decrease.

Speaker #2: Other operations revenue was $1.4 million and essentially flat compared to the prior year quarter. Fresh packed lemon sales were $11.9 million, compared to $21.2 million in the same period last year.

Speaker #2: We sold approximately 681,000 cartons of US-packed fresh lemons at an average price of $1,741 per carton, compared to 1,147,000 cartons at $1,844 per carton in the prior year first quarter.

Speaker #2: The decrease in volume was entirely related to the changing cadence under the Sunkist agreement. It's important to note that per-carton prices for fiscal 2026 are now net of the Sunkist marketing fee.

Gregory C. Hamm: The decrease in volume was entirely related to the change in cadence under the Sunkist agreement. It's important to note that per carton prices for fiscal 2026 are now net of the Sunkist marketing fee. Brokered lemons and other lemon sales were $1 million compared to $2.2 million in Q1 of fiscal year 2025, reflecting the transition of brokerage operations to Sunkist. There was no avocado revenue in Q1 of fiscal year 2026 compared to $162,000 in the prior year period due to harvest timing. Orange revenue was $10,000 compared to $1.6 million in the same period last year, reflecting the sale of our Chilean agricultural properties and the transition of brokerage operations to Sunkist.

Greg Hamm: The decrease in volume was entirely related to the change in cadence under the Sunkist agreement. It's important to note that per carton prices for fiscal 2026 are now net of the Sunkist marketing fee. Brokered lemons and other lemon sales were $1 million compared to $2.2 million in Q1 of fiscal year 2025, reflecting the transition of brokerage operations to Sunkist. There was no avocado revenue in Q1 of fiscal year 2026 compared to $162,000 in the prior year period due to harvest timing. Orange revenue was $10,000 compared to $1.6 million in the same period last year, reflecting the sale of our Chilean agricultural properties and the transition of brokerage operations to Sunkist.

Speaker #2: Brokered lemons and other lemon sales were $1 million compared to $2.2 million in the first quarter of fiscal year 2025, reflecting the transition of brokerage operations to Sunkist.

Speaker #2: There was no avocado revenue in the first quarter of fiscal year 2026, compared to $162,000 in the prior-year period, due to harvest timing.

Speaker #2: Orange revenue was $10,000 compared to $1.6 million in the same period last year, reflecting the sale of our Chilean agricultural properties and the transition of brokerage operations to Sunkist.

Speaker #2: Specialty citrus, wine grape, and other revenues were $700,000 in the first quarter of fiscal year 2026 compared to $500,000 in the first quarter of fiscal year 2025.

Gregory C. Hamm: Specialty citrus, wine grape, and other revenues were $700,000 in Q1 of fiscal year 2026 compared to $500,000 in Q1 of fiscal year 2025. There was no farm management revenue in Q1 2026 compared to $1.2 million in the prior year period due to the termination of our farm management agreement effective 31 March 2025. Total costs and expenses in Q1 were $28.8 million, down 27% from $39.7 million in Q1 of fiscal year 2025. The decrease was primarily driven by reduced agribusiness volumes and the elimination of citrus sales and marketing costs following the transition to Sunkist, which resulted in lower agribusiness costs and a meaningful decrease in selling, general, and administrative expenses.

Greg Hamm: Specialty citrus, wine grape, and other revenues were $700,000 in Q1 of fiscal year 2026 compared to $500,000 in Q1 of fiscal year 2025. There was no farm management revenue in Q1 2026 compared to $1.2 million in the prior year period due to the termination of our farm management agreement effective 31 March 2025. Total costs and expenses in Q1 were $28.8 million, down 27% from $39.7 million in Q1 of fiscal year 2025. The decrease was primarily driven by reduced agribusiness volumes and the elimination of citrus sales and marketing costs following the transition to Sunkist, which resulted in lower agribusiness costs and a meaningful decrease in selling, general, and administrative expenses.

Speaker #2: There was no farm management revenue in the first quarter of 2026 compared to $1.2 million in the prior year period due to the termination of our farm management agreement effective March 31, 2025.

Speaker #2: Total costs and expenses in the first quarter were $28.8 million down $27% from $39.7 million in the first quarter of fiscal year 2025. The decrease was primarily driven by reduced agribusiness volumes and the elimination of citrus sales and marketing costs following the transition to Sunkist, which resulted in lower agribusiness costs and a meaningful decrease in selling general and administrative expenses.

Speaker #2: Operating loss for the first quarter of fiscal year 2026 was $10.6 million compared to an operating loss of $5.3 million in the prior year period.

Gregory C. Hamm: Operating loss for Q1 of fiscal year 2026 was $10.6 million compared to an operating loss of $5.3 million in the prior year period. The increase in operating loss was primarily due to decreased agribusiness revenues as well as $1 million in packing house repairs, $500,000 of costs related to closing the Chilean farming operations, and $1.5 million of gain on sales of water rights in fiscal year 2025. Additionally, total other expenses for fiscal year 2026 includes $1 million in foreign exchange fluctuations on the receivables from the sale of our Chilean farming assets. Excluding these items, our underlying operational performance reflects the cost improvements we've been implementing.

Greg Hamm: Operating loss for Q1 of fiscal year 2026 was $10.6 million compared to an operating loss of $5.3 million in the prior year period. The increase in operating loss was primarily due to decreased agribusiness revenues as well as $1 million in packing house repairs, $500,000 of costs related to closing the Chilean farming operations, and $1.5 million of gain on sales of water rights in fiscal year 2025. Additionally, total other expenses for fiscal year 2026 includes $1 million in foreign exchange fluctuations on the receivables from the sale of our Chilean farming assets. Excluding these items, our underlying operational performance reflects the cost improvements we've been implementing.

Speaker #2: The increase in operating loss was primarily due to decreased agribusiness revenues, as well as $1 million in packing house repairs, $500,000 of costs related to closing the Chilean farming operations, and a $1.5 million gain on sales of water rights in fiscal year 2025.

Speaker #2: Additionally, total other expenses for fiscal year 2026 include $1 million in foreign exchange fluctuations on the receivables from the sale of our Chilean farming assets.

Speaker #2: Excluding these items, our underlying operational performance reflects the cost improvements we've been implementing. Net loss applicable to common stock after preferred dividends was $9.6 million or $53 cents per diluted share for the first quarter of fiscal year 2026 compared to a net loss of $3.2 million or $0.18 per diluted share in the first quarter of fiscal year 2025.

Gregory C. Hamm: Net loss applicable to common stock after preferred dividends was $9.6 million or $0.53 per diluted share for Q1 of fiscal year 2026, compared to a net loss of $3.2 million or $0.18 per diluted share in Q1 of fiscal year 2025. On an adjusted basis, adjusted net loss for diluted EPS in Q1 of fiscal year 2026 was $8.5 million or $0.48 per diluted share, compared to an adjusted net loss of $2.5 million or $0.14 per diluted share in the prior year period. A full reconciliation is provided in our earnings release. Non-GAAP adjusted EBITDA was a loss of $7.7 million in Q1 of fiscal year 2026, compared to a loss of $2.3 million in the same period last year.

Greg Hamm: Net loss applicable to common stock after preferred dividends was $9.6 million or $0.53 per diluted share for Q1 of fiscal year 2026, compared to a net loss of $3.2 million or $0.18 per diluted share in Q1 of fiscal year 2025. On an adjusted basis, adjusted net loss for diluted EPS in Q1 of fiscal year 2026 was $8.5 million or $0.48 per diluted share, compared to an adjusted net loss of $2.5 million or $0.14 per diluted share in the prior year period. A full reconciliation is provided in our earnings release. Non-GAAP adjusted EBITDA was a loss of $7.7 million in Q1 of fiscal year 2026, compared to a loss of $2.3 million in the same period last year.

Speaker #2: On an adjusted basis, adjusted net loss for diluted EPS in the first quarter of fiscal year 2026 was $8.5 million, or $0.48 per diluted share, compared to an adjusted net loss of $2.5 million, or $0.14 per diluted share, in the prior year period.

Speaker #2: A full reconciliation is provided in our earnings release. Non-GAAP adjusted EBITDA A was a loss of $7.7 million in the first quarter of fiscal year 2026, compared to a loss of $2.3 million in the same period last year.

Speaker #2: A reconciliation of net loss attributable to limonera company to adjusted EBITDA is also provided in our earnings release. Again, I want to emphasize that these first quarter results reflect the new seasonal cadence under our Sunkist partnership.

Gregory C. Hamm: A reconciliation of net loss attributable to Limoneira Company to adjusted EBITDA is also provided in our earnings release. Again, I want to emphasize that these Q1 results reflect the new seasonal cadence under our Sunkist partnership, the specific expenses mentioned, and the strategic investments we're making to position the company for improved performance throughout the remainder of fiscal year 2026. Turning to our balance sheet, we remain in a solid position to execute on our strategic initiatives. Long-term debt as of 31 January 2026 was $89.9 million compared to $72.5 million at the end of fiscal year 2025. Our net debt position was $88.6 million at quarter end after accounting for $1.3 million of cash on hand. Let me provide more detail on the financial impact of our strategic initiatives, particularly our Sunkist partnership.

Greg Hamm: A reconciliation of net loss attributable to Limoneira Company to adjusted EBITDA is also provided in our earnings release. Again, I want to emphasize that these Q1 results reflect the new seasonal cadence under our Sunkist partnership, the specific expenses mentioned, and the strategic investments we're making to position the company for improved performance throughout the remainder of fiscal year 2026. Turning to our balance sheet, we remain in a solid position to execute on our strategic initiatives. Long-term debt as of 31 January 2026 was $89.9 million compared to $72.5 million at the end of fiscal year 2025. Our net debt position was $88.6 million at quarter end after accounting for $1.3 million of cash on hand. Let me provide more detail on the financial impact of our strategic initiatives, particularly our Sunkist partnership.

Speaker #2: The specific expenses mentioned, and the strategic investments we're making, are to position the company for improved performance throughout the remainder of fiscal year 2026. Turning to our balance sheet, we remain in a solid position to support initiatives.

Speaker #2: Long-term debt as of January 31, 2026 was $89.9 million compared to $72.5 million at the end of fiscal year 2025. Our net debt position was $88.6 million at quarter end after accounting for $1.3 million of cash on hand.

Speaker #2: Let me provide more detail on the financial impact of our strategic initiatives, particularly our Sunkist partnership. We expect to realize approximately $10 million in total annual selling, general, and administrative savings for fiscal year 2026.

Gregory C. Hamm: We expect to realize approximately $10 million in total annual selling, general, and administrative savings for fiscal year 2026. These are real, tangible cost reductions that will flow through our P&L this fiscal year and position us for improved profitability as our revenue cadence normalizes in the second half of the year. In summary, while our Q1 results reflect the new seasonal cadence and specific expenses, the underlying operational improvements are substantial. The 27% reduction in costs year-over-year demonstrates our disciplined execution. We have clear visibility into $10 million of selling, general, and administrative savings benefiting fiscal year 2026 through the Sunkist partnership, which fundamentally improves our cost structure. Now, I would like to turn the call back to Harold to discuss our fiscal year 2026 outlook and longer-term growth pipeline.

Greg Hamm: We expect to realize approximately $10 million in total annual selling, general, and administrative savings for fiscal year 2026. These are real, tangible cost reductions that will flow through our P&L this fiscal year and position us for improved profitability as our revenue cadence normalizes in the second half of the year. In summary, while our Q1 results reflect the new seasonal cadence and specific expenses, the underlying operational improvements are substantial. The 27% reduction in costs year-over-year demonstrates our disciplined execution. We have clear visibility into $10 million of selling, general, and administrative savings benefiting fiscal year 2026 through the Sunkist partnership, which fundamentally improves our cost structure. Now, I would like to turn the call back to Harold to discuss our fiscal year 2026 outlook and longer-term growth pipeline.

Speaker #2: These are real tangible cost reductions that will flow through our P&L this fiscal year and position us for improved profitability as our revenue cadence normalizes in the second half of the year.

Speaker #2: In summary, while our first quarter results reflect the new seasonal cadence and specific expenses, the underlying operational improvements are substantial. The $27% reduction in costs year over year demonstrates our disciplined execution.

Speaker #2: We have clear visibility into $10 million of selling, general, and administrative savings benefiting fiscal year 2026 through the Sunkist partnership, which fundamentally improves our cost structure.

Speaker #2: Now, I would like to turn the call back to Harold to discuss our fiscal year 2026 outlook and longer-term growth pipeline.

Speaker #1: Thank you, Greg. Looking at the remainder of fiscal year 2026, we expect this period to be when our strategic transformation begins delivering measurable financial results.

Harold Edwards: Thank you, Greg. Looking at the remainder of fiscal year 2026, we expect this period to be when our strategic transformation begins delivering measurable financial results. We anticipate you will see these improvements on a sequential basis this year as we expect our Q2 to show improvement compared to the Q1 and our Q3 and Q4 being the strongest periods of the year. We enter this year with approximately $10 million in cost-saving initiatives based primarily on the benefits of our Sunkist partnership, which will be visible in our fiscal year 2026 results through improved cost structure and enhanced customer relationships.

Speaker #1: We anticipate you will see these improvements on a sequential basis this year as we expect our second quarter to show improvement compared to the first quarter and our third and fourth quarters being the strongest periods of the year.

Speaker #1: We enter this year with approximately $10 million in cost-saving initiatives, based primarily on the benefits of our Sunkist partnership, which will be visible in our fiscal year 2026 results through improved cost structure and enhanced customer relationships.

Speaker #1: Our avocado expansion continues on schedule with significant production increases expected in fiscal year 2027 as our non-bearing acreage matures. For full-year fiscal 2026, we are reiterating the following guidance: fresh lemon volumes of 4 to 4.5 million cartons and avocado volumes of 5 to 6 million pounds.

Harold Edwards: Our avocado expansion continues on schedule with significant production increases expected in fiscal year 2027 as our non-bearing acreage matures. For full year fiscal 2026, we are reiterating the following guidance. Fresh lemon volumes of 4 to 4.5 million cartons and avocado volumes of 5 to 6 million pounds. Beyond our core operations, we have several additional value creation opportunities progressing. Our real estate pipeline remains strong with $155 million in expected total proceeds over the next five fiscal years. The Limco Del Mar entitlement process represents another significant real estate development opportunity, and our planned organic recycling joint venture is expected to contribute meaningful EBITDA when the facility becomes operational in fiscal year 2027. We've built a more resilient business model that's less dependent on commodity lemon pricing while creating multiple engines for profitable growth.

Speaker #1: Beyond our core operations, we have several additional value-creating opportunities progressing. Our real estate pipeline remains strong, with $155 million in expected total proceeds over the next five fiscal years.

Speaker #1: The Limco Del Mar entitlement process represents another significant real estate development opportunity and our planned organic recycling joint venture is expected to contribute meaningful EBITDA when the facility becomes operational in fiscal year 2027.

Speaker #1: We've built a more resilient business model that's less dependent on commodity lemon pricing, while creating multiple engines for profitable growth. Operator, we'll now open the call to questions.

Harold Edwards: Operator, we'll now open the call to questions.

Speaker #2: Thank you. At this time, we'll be conducting a question-and-answer session. If you'd like to ask a question, please press star one on your telephone keypad.

Operator 2: Thank you. At this time, we'll be conducting a question and answer session. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd 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 questions. Our first question comes from Puran Sharma with Stephens. Your line is now live.

Operator: Thank you. At this time, we'll be conducting a question and answer session. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd 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 questions. Our first question comes from Puran Sharma with Stephens. Your line is now live.

Speaker #2: A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue.

Speaker #2: For participants choosing speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions.

Speaker #2: Our first question comes from Purin Sharma with Stevens. Your line is now live.

Speaker #3: Good afternoon, and thanks for the question. This is Adam Shepherdon for Puron. On the $10 million in expected SG&A savings this year, I think you mentioned $10 million was to be realized this year.

Adam Shepherd: Good afternoon, and thanks for the question. This is Adam Shepherd on for Puran. On the $10 million in expected SG&A savings this year, I think you mentioned $10 million was to be realized this year and was gonna ask about how much would be visible in the first half versus the back half, and if that ramp kind of implies there might be a higher than $10 million run rate exiting the year. Then if there are any offsets to keep in mind as the Sunkist transition, like, fully ramps. That'd be great. Thanks.

Speaker #3: And I was going to ask about how much would be visible in the first half versus the back half and if that ramp kind of implies there might be a higher-than-$10 million run rate exiting the year.

Speaker #3: And then, if there are any offsets to keep in mind as the Sunkist transition fully ramps up, that'd be great. Thanks.

Speaker #1: No, those are great questions, Adam. Thank you. I think that you'll see we had some lingering or dragging costs from fiscal year 2025 that entered into the first quarter of 2026.

Harold Edwards: No, those are great questions, Adam. Thank you. I think that you'll see we had some lingering or dragging costs from fiscal year 2025 that entered into Q1 of 2026. While we were pleased with our cost reduction, we think our run rate was slightly behind in Q1 versus what you'll see in Q2, Q3, and Q4. The actual reduction isn't gonna be linear, so you'll see it move around. We've also tried to be conservative in our estimates. I think at the end of the year, though, you'll see a total reduction of $10 million from the SG&A overhead line item.

Speaker #1: So, while we were pleased with our cost reduction, we think our run rate was slightly behind in Q1 versus what you'll see in Q2, Q3, and Q4.

Speaker #1: The actual reduction isn't going to be linear, so you'll see it move around. And we've also tried to be conservative in our estimates. I think at the end of the year, though, you'll see a total reduction of $10 million from the SG&A overhead line item.

Harold Edwards: As it relates to whether you'll see sort of a faster or higher run ramp and rate at the end of the fiscal year, I wouldn't expect it. I think you'll get to the end of the year and then see much more of a fixed overhead as we enter 2027.

Speaker #1: As it relates to whether you'll see sort of a faster or higher run ramp and rate at the end of the fiscal year, I wouldn't expect it.

Speaker #1: I think you'll get to the end of the year and then see much more of a fixed overhead as we enter 2027.

Speaker #4: Yeah, I agree. It's not tied to volume. It's more of a steady savings throughout the year.

Gregory C. Hamm: Yeah, I agree. It's not tied to volume. It's more of a steady savings throughout the year.

Greg Hamm: Yeah, I agree. It's not tied to volume. It's more of a steady savings throughout the year.

Speaker #3: Okay, great. Thank you. And then switching over to avocados for my follow-up, are you able to just give us an update on weather conditions, how the trees are looking, just color around that would be great too?

Adam Shepherd: Okay, great. Thank you. Switching over to avocados for my follow-up. Are you able to just give us an update on weather conditions, how the trees are looking? Just color around that would be great too.

Speaker #1: Sure. It's been pretty much an idyllic winter in California. It really never got cold, which is fantastic. And the east winds, which can oftentimes be a real problem for holding fruit on the trees, have been moderate.

Harold Edwards: Sure. It's been pretty much an idyllic winter in California. It really never got cold, which is fantastic. The east winds, which can oftentimes be a real problem for holding fruit on the trees, have been moderate. The young trees look fantastic. We're actually entering a week here. It's 12 March today of potentially record heat levels, which won't harm the trees. It'll actually accelerate fruit growth, but also the bloom and the flower on the trees for next year's crop setting. We've had really good rain conditions this year. You know, a normal year of rain in this part of the world is about 17 inches a year.

Speaker #1: The young trees look fantastic. We're actually entering a week here—it's March 12th today—of potentially record heat levels, which won't harm the trees.

Speaker #1: It'll actually accelerate fruit growth, but also the bloom and the flower on the trees for next year's crop setting. We've had really good rain conditions this year.

Speaker #1: A normal year of rain in this part of the world is about 17 inches a year. To date, we've received almost 25 inches in nice, steady, warm rains.

Harold Edwards: To date, we've received almost 25 inches in nice, steady, warm rains, and that's allowed us to realize good fruit growth. There's good, big fruit hanging on the trees for this year. It looks like the flowering and the bloom and set for next year with the avocados looks as good as it can right now. We feel like it's been almost idyllic weather conditions to set us up for a strong 2027 with avocados.

Speaker #1: And that's allowed us to realize good fruit growth. So there's good big fruit hanging on the trees for this year. And it looks like the flowering and the bloom and set for next year with the avocados looks as good as it can right now.

Speaker #1: So we feel like it's been almost idyllic weather conditions to set us up for a strong 2027 with avocados.

Speaker #3: Okay, great. Thank you very much.

Adam Shepherd: Okay, great. Thank you very much.

Speaker #1: Thank you.

Harold Edwards: Thank you.

Speaker #4: Thank you.

Gregory C. Hamm: Thank you.

Greg Hamm: Thank you.

Speaker #2: As a reminder, if you'd like to ask a question, please press star one on your telephone keypad. One moment, please, while we poll for questions.

Operator 2: As a reminder, if you'd like to ask a question, please press star one on your telephone keypad. One moment, please, while we poll for questions. Our next question comes from Mark Smith with Lake Street Capital Markets. Your line is now live.

Operator: As a reminder, if you'd like to ask a question, please press star one on your telephone keypad. One moment, please, while we poll for questions. Our next question comes from Mark Smith with Lake Street Capital Markets. Your line is now live.

Speaker #2: Our next question comes from Mark Smith with Lake Street Capital. Your line is now live.

Speaker #5: Hey, guys. Similar to the last question, just wanted to ask kind of around fruit pricing, around lemons, weather impact, anything that you're seeing there.

Mark Smith: Hey, guys. Similar to the last question, just wanted to ask kind of around fruit pricing, lemons, weather impact, anything that you're seeing there.

Speaker #1: Yeah, I'll start with avocados, Mark. Thanks for the question. So, Mexico has an extraordinarily large crop this year. And through the last three months of weekly shipments, we've seen some of the highest weekly shipments coming into the United States from Mexico.

Harold Edwards: Yeah, I'll start with avocados, Mark. Thanks for the question. So Mexico has an extraordinarily large crop this year. Through the last three months of weekly shipments, we've seen some of the highest weekly shipments coming into the United States from Mexico. Conventional wisdom was always that the US consumed about 60 million lbs a week. The last week saw 75 million lbs of fruit from Mexico come into the US. The good news is that fruit's all being consumed. But the issue is that with that much fruit coming in, it's putting downward pricing pressure on avocados right now. Size 48s are going for about $1 a pound right now. 60s are going for about $1.05 to $1.10.

Speaker #1: Conventional wisdom was always that the US consumed about 60 million pounds a week the last week saw 75 million pounds of fruit from Mexico come into the US.

Speaker #1: The good news is that the fruit is all being consumed. But the issue is that with that much fruit coming in, it's putting downward pricing pressure on avocados right now.

Speaker #1: 48s are going for a size 48s are going for about a dollar, a pound right now. And 60s are going for about a dollar, 5 to a dollar 10.

Speaker #1: So ironically, the smaller sizing fruit is more valuable right now. As you see and we begin to see Mexico's crop tapering off, I would expect pricing to buoy a little bit here in California.

Harold Edwards: Ironically, the smaller sizing fruit is more valuable right now. As you see, and we begin to see Mexico's crop tapering off, I would expect pricing to buoy a little bit here in California, maybe $1.10 to $1.20. But right now you're seeing pricing sort of on the low end because of how much fruit is in the marketplace. Again, it's great news that the fruit's being consumed. You're seeing per capita consumption growing when you see pricing this low as it works its way through the supply chain, and consumers are able to access fruit more readily and less expensively. That should set us up for, you know, a pretty strong environment in 2027.

Speaker #1: Maybe a dollar 10 to a dollar 20. But right now, you're seeing pricing sort of on the low end because of how much fruit is in the marketplace.

Speaker #1: Again, it's great news that the fruit's being consumed. You're seeing per capita consumption growing when you see pricing this low as it works its way through the supply chain, and consumers are able to access fruit more readily and less expensively.

Speaker #1: So that should set us up for a pretty strong environment in 2027. As it relates to lemons, we started out Q1 with pricing that was similar to 2025 in Q1.

Harold Edwards: As it relates to lemons, we started out Q1 with pricing that was similar to 2025 in Q1, and then the market became supplied and full, and we've seen sort of lower pricing for pricing in lemons. Greg, you wanna maybe comment on lemon pricing?

Speaker #1: And then the market became supplied and full. And we've seen sort of lower pricing for lemons. Greg, do you want to maybe comment on lemon pricing?

Speaker #4: Yeah. We ended up at 17.42 for this quarter versus 18.44. And that sunkissed charge is 60 cents a carton. So you take that into account.

Gregory C. Hamm: Yeah. We, you know, we ended up at $17.42 for this quarter versus $18.44, and that Sunkist charge is $0.60 a carton, so you take that into account. Coming into February, it softened up to around $16, which isn't as low as it was last year. I predict that this is probably the trough for pricing, and that'll start picking back up again as we head towards May.

Greg Hamm: Yeah. We, you know, we ended up at $17.42 for this quarter versus $18.44, and that Sunkist charge is $0.60 a carton, so you take that into account. Coming into February, it softened up to around $16, which isn't as low as it was last year. I predict that this is probably the trough for pricing, and that'll start picking back up again as we head towards May.

Speaker #4: And then coming into February, it's softened up to around $16. Which isn't as low as it was last year, but I predict that this is probably the trough for pricing and it'll start picking back up again as we head towards May.

Speaker #1: And Mark, the other comment I just make on that pricing is that sort of a lemon isn't a lemon isn't a lemon because buried into that average pricing is a product mix sort of factor is how much of your valuable fancy fruit how much of your middle range choice fruit and how much of your standards actually got sold fresh.

Harold Edwards: Mark, the other comment I'd just make on that pricing is that, you know, sort of a lemon isn't a lemon because buried into that average pricing is a product mix sort of factor, is how much of your valuable fancy fruit, how much of your middle range choice fruit, and how much of your standards actually got sold fresh. The comment that we made earlier about a much higher percentage of fresh utilization in Q1 meant that a lot of the standards which before, like last year, went to juice, that actually made it to the fresh market. The total impact, it drags your average price down, but your units are much higher.

Speaker #1: And so the comment that we made earlier about a much higher percentage of fresh utilization the first quarter meant that a lot of the standards which before last year went to juice, that actually made it to the fresh market.

Speaker #1: So the total impact it drags your average price down, but your units are much higher. And throughout the course of the full season, that should sort of work itself out in a very positive way for us if that makes sense.

Harold Edwards: Throughout the course of the full season, that should sort of work itself out in a very positive way for us, if that makes sense. While it seems like it's very, very low pricing, on half the fruit, we sold a significant amount of more volume fresh in Q1 than we saw last year, and that bodes very, very well for the rest of the year for us.

Speaker #1: So while it seems like it's very, very low pricing, on half the fruit, we sold a significant amount of more volume fresh in the first quarter than we saw last year.

Speaker #1: And that bodes very, very well for the rest of the year for us.

Speaker #5: Perfect. And last question for me was just, as we look at certain markets in the West with drought conditions and low snowpack, does this create opportunities for monetization of some of these water assets? And any update you can give us on how that process is going would be great.

Mark Smith: Perfect. The last question for me was just as we look at, you know, certain markets in the West with drought conditions, low snowpack, you know, does this create opportunities for monetization of some of these water assets? Any update you can give us on kinda how that process is going would be great.

Harold Edwards: Yeah. Thanks, Mark. That's a great question. I'm glad we get to talk about it a little, just a little bit. The two most opportunistic situations we have with our water assets are related to our conserved water in the Santa Paula water basin, and not much to report there other than that, there remains demand for that water. As you probably remember, we sold water last year at $30,000 an acre-foot and sort of did that as a placeholder to show sort of the potential value that could be created as more and more of that water that's conserved is made available into the marketplace in Santa Paula.

Speaker #1: Yeah, thanks, Mark. That's a great question. I'm glad we get to talk about it just a little bit. So the two most opportunistic situations we have with our water assets are related to our conserved water in the Santa Paula water basin.

Speaker #1: And not much to report there other than that there remains demand for that water. As you probably remember, we sold water last year at $30,000 an acre-foot.

Speaker #1: And sort of did that as a placeholder to show the potential value that could be created as more and more of that water is conserved.

Speaker #1: Is made available into the marketplace in Santa Paula. The real opportunity right now—and I'm sure this is what most people are focused on, we certainly are—is what's going on on the Colorado River.

Harold Edwards: The real opportunity right now, and I'm sure this is what most people are focused on, we certainly are, is what's going on the Colorado River. For background, as you may recall, we have Colorado River water rights. There are seven states now that are negotiating as to who gets what in terms of a new water accord that's put on the Colorado River. The U.S. Department of the Interior and the Bureau of Reclamation have mandated that one-third of the consumptive use of the Colorado River be cut. Now each of the seven states who derive benefit off the river today are negotiating as to who gets what and what kind of cuts need to be made. The reality is that the actual agreements for future water use have not been reached.

Speaker #1: For background, as you may recall, we have Class III Colorado River water rights. There are seven states now that are negotiating who gets what.

Speaker #1: In terms of a new water accord that's put on the Colorado River, the Department of Interior and the Bureau of Reclamation have mandated that one-third of the consumptive use of the Colorado River be cut.

Speaker #1: And so now, each of the seven states who derive benefit off the river today are negotiating on who gets what, and what kinds of cuts need to be made.

Speaker #1: The reality is that the actual agreements for future water use have not been reached. There continues to be quite a bit of turmoil between the states.

Harold Edwards: There continues to be quite a bit of turmoil between the states, and there's been sort of an inability, at least to this point, to come up with an agreement for each of the seven states that is satisfactory. With that being said, though, the amount of cuts that need to come off the river put Limoneira's water rights off the Colorado River into a position of being very, very valuable. How they monetize at this point is still a little bit unclear, although we do believe that there'll be long-term fallowing programs that will be positioned for our advantage.

Speaker #1: And there's been sort of an inability, at least to this point, to come up with an agreement for each of the seven states that is satisfactory.

Speaker #1: With that being said, though, the amount of cuts that need to come off the river put Limoneira's water rights off the Colorado River into a position of being very, very valuable.

Speaker #1: How they monetize at this point is still a little bit unclear. Although, we do believe that there will be long-term following programs that will be positioned for our advantage.

Speaker #1: And we do expect to announce programs in the near term that will be able to take advantage of that, will bring value, and allow that water from the Colorado River to be monetized in the near term.

Harold Edwards: We do expect to announce programs in the near term that we'll be able to take advantage of that will bring value and allow that water from the Colorado River to be monetized in the near term. Nothing specific to report at this time. However, I would say that I would hope that by the next time we talk at the conclusion of Q2, we'll have specifics in which we can address and speak to about the monetization of our Colorado River water rights. Excellent. Thank you.

Speaker #1: So nothing specific to report at this time. However, I would say that I would hope that by the next time we talk in the at the conclusion of the second quarter, we'll have specifics in which we can address and speak to about the monetization of our Colorado River water rights.

Speaker #5: Excellent. Thank you.

Mark Smith: Thank you.

Speaker #3: We have reached the end of the question-and-answer session. I'd now like to turn the call back over to Harold Edwards for closing comments.

Operator 2: We have reached the end of the question and answer session. I'd now like to turn the call back over to Harold Edwards for closing comments.

Operator: We have reached the end of the question and answer session. I'd now like to turn the call back over to Harold Edwards for closing comments.

Speaker #1: Great. Thank you very much for all of your questions and your interest in Limoneira. Have a great day.

Harold Edwards: Great. Thank you very much for all of your questions and your interest in Limoneira. Have a great day. Thank you.

Speaker #5: Thank you.

Operator 2: This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.

Operator: This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.

Q1 2026 Limoneira Co Earnings Call

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