Limoneira Q4 Earnings Call Highlights

Limoneira (NASDAQ:LMNR) executives used the company’s fiscal fourth-quarter earnings call to outline what President and CEO Harold Edwards described as a significant shift away from a business model heavily tied to volatile lemon pricing and toward a diversified set of profit centers, including avocados, real estate development, water monetization, and a planned organic recycling venture.

Management frames a “strategic transformation”

Edwards said Limoneira has spent the past two years addressing oversupply in the global lemon market by reducing exposure to commodity lemon pricing and improving the company’s cost structure. He pointed to the company’s return to Sunkist as a key strategic move, which management expects will generate $10 million in cost savings in fiscal 2026 compared with fiscal 2025. Edwards said Sunkist also improves access to premium retail accounts and large U.S. retailers through a “full-category citrus offering,” which he said benefits retail buyers seeking “one-stop shopping.”

In the Q&A session, management provided more detail on the cost savings. CFO Mark Palamountain said roughly half of the $10 million stems from shifting the sales and marketing function to Sunkist, while the other half is tied to storage and operational efficiencies, including renegotiated storage contracts and use of Sunkist capacity to reduce transportation and leasing costs. Edwards added that Limoneira’s “all-in” sales and marketing expense had been about $1.50 per carton and is now expected to be fixed at $0.60 per carton under Sunkist, which he said illustrates the savings potential when applied across expected lemon volumes.

Fourth-quarter results show higher transformation costs

For the fourth quarter of fiscal 2025, Limoneira reported total net revenue of $42.8 million, compared with $43.9 million in the prior-year quarter. Agribusiness revenue was $41.3 million versus $42.5 million a year earlier, while other operations revenue was $1.5 million compared with $1.4 million.

Palamountain said total costs and expenses rose to $53.9 million from $46.6 million, resulting in an operating loss of $11.1 million, compared with an operating loss of $2.8 million in the fourth quarter of fiscal 2024. Net loss applicable to common stock after preferred dividends was $8.8 million, or a loss of $0.49 per diluted share, compared with a net loss of $2.0 million, or $0.11 per diluted share, in the prior-year quarter.

Management attributed the year-over-year increase in losses primarily to $6.7 million in “strategic transformation costs,” which included expenses related to the Sunkist transition, tree disposals tied to expanding avocado production, and other non-recurring costs. The company also incurred costs related to a power outage at storage facilities, which it expects to recover through insurance proceeds in the first quarter of fiscal 2026.

On a non-GAAP basis, the company reported an adjusted EBITDA loss of $7.0 million for the quarter, compared with adjusted EBITDA income of $1.2 million a year earlier. Adjusted net loss for diluted EPS was $8.0 million, or $0.45 per diluted share, compared with an adjusted net loss of $1.6 million, or $0.09 per diluted share, in the prior-year quarter.

Commodity and volume swings highlighted in key categories

Palamountain walked through changes in major agribusiness lines. Fresh packed lemon sales increased to $19.2 million in the quarter from $8.4 million a year earlier. The company sold about 821,000 cartons of U.S. packed fresh lemons at an average price of $23.33 per carton, compared with 470,000 cartons at $17.95 per carton in the prior-year quarter.

By contrast, avocado results reflected what management described as the crop’s typical alternate-bearing cycle. Avocado revenue was $300,000, down from $8.9 million in the prior-year quarter. Limoneira sold approximately 396,000 pounds at an average price of $0.79 per pound, compared with about 4.6 million pounds at $1.92 per pound a year earlier. Palamountain said the alternate-bearing dynamic was the primary reason for the lower volume compared with the prior year, while noting the company achieved its avocado volume goal for fiscal 2025.

Orange revenue rose to $2.9 million from $1.7 million, with 148,000 cartons sold at $19.67 per carton, compared with 91,000 cartons at $18.99 per carton in the prior-year quarter. Specialty citrus, wine grape, and other revenue totaled $2.9 million, down from $3.5 million.

Farm management revenue was absent in the quarter due to the termination of a farm management agreement effective March 31, 2025. That line item had contributed $2.9 million in the prior-year quarter.

Full-year results and balance sheet update

For the fiscal year ended Oct. 31, 2025, Limoneira reported total net revenue of $159.7 million, down from $191.5 million in fiscal 2024. Palamountain said the decline was driven by decreased agribusiness revenue from lemons, avocados, wine grapes, and farm management, partially offset by increased agribusiness revenue from oranges.

The company posted an operating loss of $20.4 million for fiscal 2025, compared with an operating loss of $6.2 million a year earlier. Net loss applicable to common stock after preferred dividends was $16.5 million, compared with net income of $7.2 million in fiscal 2024. Net loss per diluted share was $0.93, compared with net income per diluted share of $0.40 in fiscal 2024. Adjusted EBITDA was a loss of $6.5 million, compared with adjusted EBITDA income of $26.7 million in fiscal 2024.

On the balance sheet, long-term debt was $72.5 million as of Oct. 31, 2025, up from $40.0 million at the end of fiscal 2024. With $1.5 million in cash on hand, net debt was $71.0 million. Palamountain also said the company received $10.0 million in April 2025 as its share of a $20.0 million cash distribution from its 50/50 real estate development joint venture with the Lewis Group of Companies; the joint venture’s cash and cash equivalents totaled $31.2 million as of Oct. 31, 2025.

Palamountain said Limoneira negotiated more favorable banking covenants that allow continued use of the full capacity of its $115 million credit facility, with $41.6 million available as of Oct. 31, 2025. In the Q&A, management said it intends to pay down debt over time and discussed covenant changes that shifted certain measurements toward a balance-sheet-based ratio, while a debt service coverage measurement was suspended until the end of fiscal 2027.

Guidance and longer-term value drivers

Looking to fiscal 2026, Edwards said the company expects the restructuring initiated in fiscal 2025 to begin producing measurable financial results. Limoneira provided volume guidance for fiscal 2026 of fresh lemon volumes of 4.0 to 4.5 million cartons and avocado volumes of 5.0 to 6.0 million pounds.

Beyond core agribusiness, Edwards reiterated several longer-term initiatives and monetization efforts discussed during the call:

• Avocado expansion: 1,500 acres planted, with 800 acres currently bearing fruit; management said the remaining 700 acres are expected to begin bearing over the next three to four years.
• Organic recycling joint venture: A planned 50/50 venture with Agromin, expected to process 300,000 tons annually and generate $4 million to $5 million of additional EBITDA beginning in fiscal 2027, according to management.
• Real estate: Harvest at Limoneira expected to generate $155 million in future distributions over the next five fiscal years, with management noting phase three includes about 500 home lots and 300 apartments and referencing a 35-acre “East Area 2” medical pavilion development that could begin monetization in fiscal 2026.
• Asset sales: The company completed the sale of Chilean assets in November for $15 million and said it is advancing monetization of the Windfall Farms vineyard in Paso Robles and Argentina agricultural assets, together valued at about $40 million, targeted for completion by the end of fiscal 2026.
• Water monetization: Management said it realized $1.7 million from sales of Santa Paula Basin pumping water rights over the past year and believes it is positioned to capture an additional $50 million to $70 million in value through fiscal 2027 from Class III Colorado River water rights and conserved Santa Paula Basin pumping rights.

During the Q&A, management emphasized that the Colorado River water rights strategy is tied to potential fallowing programs, in which entities pay farmers not to use water so it can be diverted to other uses. Executives said negotiations around a new long-term framework are ongoing, with a deadline they cited of Dec. 31, 2026, and they discussed how water scarcity and urban demand could influence monetization opportunities.

Edwards concluded that the company is seeking to increase core agricultural EBITDA while using real estate and other asset monetization as a bridge, positioning Limoneira to evaluate capital allocation options such as debt reduction, share repurchases, and potential dividend increases as cash generation improves.

About Limoneira (NASDAQ:LMNR)

Limoneira Company (NASDAQ: LMNR), founded in 1893 and based in Santa Paula, California, is a diversified agribusiness and real estate enterprise. As one of the oldest citrus producers in the United States, Limoneira has built a reputation for cultivating and marketing high-quality citrus fruits, avocados and specialty crops. The company’s vertically integrated model encompasses farming, packing, processing and marketing activities designed to deliver fresh produce to domestic and international markets.

In its agricultural operations, Limoneira specializes in lemons, oranges and avocados, employing modern irrigation, harvesting and packing technologies to maintain consistent product quality and supply.