Limoneira Co

Greetings and welcome to the Lehman Yara first quarter fiscal year 2021 financial results. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during a conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, John Mills with ICR. Thank you. You may begin.

Good afternoon, everyone, and thank you for joining us for Lehman Air's first quarter fiscal year 2021 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 first quarter fiscal year 2021 earnings release, which went out today at approximately 4 p.m. Eastern time. If you have not had a chance to view the release, it's available on the investor relations portion of the company's website at limanera.com. This call is being webcast and a replay will be available on Limanera's website as well. Before we begin, we would like to remind everyone that prepared remarks contain forward-looking statements and management may make additional forward-looking statements in response to your questions. Such statements involve a number of known and unknown risks and uncertainties, many of which are outside the company's control 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 details in the company's 10 Qs and 10 Ks filed with the SEC and those mentioned in the earnings relief. 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 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 Lehman Air'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, which is a non-GAAP financial measure. A reconciliation of adjusted EBITDA to the most directly comparable GAAP financial measures is included in the company's 10-Q and press release, which have been posted to its website. 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. I'm pleased with our start to fiscal year 2021 as we achieved record first quarter lemon volume, solid specialty citrus revenues, and our improved cost structure contributed to improvement in cash flow compared to last year. As a reminder, since our first quarter ends January 31st, the pandemic did not have a material effect on our fiscal first quarter last year. So this year over year improvement was due to our ability to dramatically expand our focus on grocery retail and the reason we believe we are very well positioned to achieve a meaningful increase in domestic food service and exports once dining out improves from COVID-19 vaccine distribution. In addition, Even though it is early in the season, we expect strong results from avocado and oranges in fiscal year 2021. During the first quarter, higher and more frequent than normal winds affected our lemon industry growers in District 2. This temporarily reduced the quality of the industry's crop coming out of this district, but it also is expected to drive increased pricing for top graded lemons during the springtime. I'll now discuss each of our business divisions performance for the first quarter, starting with agribusiness. Agribusiness revenue was $37.1 million compared to $40.5 million in the first quarter of fiscal year 2020. Fresh lemon revenue was $25 million compared to $27 million during the same period of fiscal year 2020. Even though we achieved record lemon volume in the quarter, overall pricing was $18.91 average price per carton compared to $21.12 average price per carton. U.S. pricing was approximately $20 and our pricing in South America approximately $10, which is expected to rise as we enter their export season. Orange revenue was lower in the first quarter as higher prices of oranges were partially offset by the timing of harvest. The orange season has had a slower start than anticipated. However, it is our expectation for fiscal year 2021 to have better profitability on fewer cartons and acres dedicated to oranges. Specialty citrus and other crop revenue was similar to prior fiscal year period of $1.8 million. Turning now to our real estate development segment. Our real estate development project, Harvest at Limonera, continues to perform very well, and we have now closed 398 lots since inception, including 44 new lot closings in the first quarter of fiscal year 2021. As each quarter closes, we gain confidence in the timing of the expected $80 million of cash distributions from Harvest at Limonera over the next six years, beginning in fiscal year 2022. The expected cash distributions do not include the potential upside from increased density in housing at Harvest at Lima Nera, as well as the potential opportunity of a medical campus in our East Area 2 development. We expect to be in a position to provide greater transparency on these opportunities in the upcoming quarters. Our company now has over 15,000 acres of prime agricultural land, 550 acres of residential housing we are selling, many additional non-agricultural assets we expect to monetize in the future, and over 28,000 acre feet of water rights, pumping rights, and usage rights. We continue to be very good stewards of these assets and believe our company will continue to reward long-term shareholders for many years to come. As we enter our stronger second and third quarter growing seasons, we are very confident we will achieve improved year-over-year results due to our expanded footprint in retail as well as the potential for food service to begin coming back online as everyone continues to receive their vaccines, allowing restaurants and bars to reopen. We're encouraged by the record fresh lemon volume during our first quarter and the continued improvement in our cost structure. We expect positive cash flow towards the end of fiscal year 2022 from harvest at Limonera and look forward to updating you on our agribusiness and retail real estate progress in the coming months. And with that, I'll now turn the call over to Mark.