Limoneira Co

Greetings and welcome to the Lehman Air's Second Quarter 2025 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.

Good afternoon, everyone, and thank you for joining us for Lehman Air's Second Quarter Fiscal Year 2025 Conference Call. On the call today are Harold Edwards, President and Chief Executive Officer and Mark Palamountain, Executive Vice President and Chief Financial Officer. By now, everyone should have access to the second quarter fiscal year 2025 earnings release, which went out today at approximately 4 p.m. Eastern time. If you have not had a chance to review 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'd like to remind everyone that prepared remarks contain forward-looking statements and management may make additional forward-looking statements in response to your questions. Such statements involve a number of known and unknown risks and uncertainties, many of which are outside the company's control 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 Form 10Qs and 10Ks 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 will be discussing measures including results on an adjusted basis We believe these adjusted financial measures can facilitate a more complete analysis and greater understanding of Luminaire'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 EPS to the most directly comparable GAAP financial measures are included in the company's press release, which has 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. As we've discussed on previous calls, we've been executing our roadmap to create stockholder value through multiple strategic avenues. We conducted a lengthy process to explore strategic alternatives, which concluded in March and provided valuable insights leading to today's citrus sales and marketing announcement. I'm pleased to announce that beginning in the first quarter of fiscal year 2026, we're merging our citrus sales and marketing operations with Sunkist Growers as one of their largest lemon growers and as a Sunkist private licensed packer. We expect this to quickly improve the efficiency of our supply chain, significantly reduce cost, and provide access to many of the best food service and retail customers in the country. Our sales and marketing personnel will transfer to Sunkist with a significant cost savings to our bottom line. The move will also allow us to cooperatively partner with other Sunkist packers to utilize excess wash and storage capacity within the Sunkist system. These moves will save us approximately $5 million a year in selling and marketing expenses and improve our EBITDA by approximately $5 million a year. This transition directly advances several key objectives, enhances our citrus services business, sharpens our focus on sustainable value drivers, and expands our access to food service and regional and national quick serve restaurants. This citrus sales and marketing announcement reunites organizations built on a shared foundation with a legacy of collaboration, shared values, and deep trust. Both companies were founded in 1893 with common founders and worked together for over a century, developing a profound understanding of the land, our growers, and the market, along with longstanding relationships with customers and partners. Over the years, each entity has evolved and has specialized in distinct ways, strengthening our capabilities, insights, and regional expertise with learnings that now complement one another perfectly. This intentional reunion allows us to blend our individual strengths for greater impact, creating a unified system with aligned teams and shared strategic direction that honors what worked in our past while building new pathways forward. Together we can deliver a leading platform serving food service and quick serve restaurants across multiple segments. This combined sales and marketing effort is uniquely positioned to drive continued growth in the fast-growing QSR sector as well as a strong retail growth opportunity. We are now part of an offering that includes a full category of citrus, providing us access to the very best retail customers in the country who require one go-to-market partner to provide all their citrus needs. By combining with Sunkist, we immediately have access to the largest retail grocers throughout the country because we can assure reliable supply while operating at the lowest cost with a full citrus offering. Through our broader footprint and deeper combined expertise, we'll have enhanced scale and capabilities to serve customers more effectively across the entire citrus market. The combined go-to-market approach will generate meaningful operational efficiencies. Sunkist will consolidate all sales and marketing functions for both companies, citrus production, enhancing our customer relationships while reducing overhead. We'll optimize our supply chain through shared storage, washing, and packing capabilities and deliver enhanced value-added services for customers. Once the transaction is effective, our citrus brokerage business will transition to Sunkist which will reduce our top line revenue. But more importantly, this process will enhance our operational capabilities and cost structure, improving our foundation for sustainable EBITDA growth and margin expansion in our citrus operations. This represents the natural evolution of strategies we've been discussing. We're not changing direction. We're accelerating execution on our stated priorities of growing our citrus business through multiple channels, and growing our long-term citrus returns. The combined scale and capabilities position us to serve our grower partners more effectively, expand our packing services, both our own production and grower partner production, and capture growth opportunities across multiple customer segments, including the high-growth QSR market where consumer demand continues to drive category expansion. We remain committed to our multifaceted approach to shareholder value creation. This joining of forces strengthens our core operating business while we continue executing across our other strategic initiatives. Our avocado business remains unchanged. We continue our planting regime as one of the largest growers in the United States while working with several different handlers, a structure that serves us well. Our real estate development project, Harvest at Limonera, is seeing strong velocity in home sales with robust activity that could accelerate the timing of phase three. We continue to advance our water monetization efforts with two transactions expected to close this year while also remaining focused on the divestiture of our farming assets in Chile and our windfall farms vineyard in Paso Robles. In summary, we're making meaningful progress across our business while positioning ourselves for stronger performance ahead. Our citrus operational enhancements, expanding avocado production, real estate development progress, and water monetization initiatives all contribute to building sustainable long-term shareholder value through our unique asset base and market position. We look forward to updating you on our continued progress across all of these initiatives as we move through the year. And with that, I'll now turn the call over to Mark to discuss our second quarter results.