Limoneira Co · NASDAQ:LMNR
Limoneira — Investor Presentation (March 2018)
30 slides from Limoneira's investor presentation, March 2018
Slide 1: Investor Presentation March 2018
Investor Presentation March 2018
Slide 2: Cautionary Statement
Cautionary Statement The following information and the statements made during this presentation contain forward-looking statements. These forward-looking statements are based on Management’s current expectations and beliefs, as well as a number of assumptions concerning future events. Forward-lookin
Slide 3: Experienced Senior Management Team
Experienced Senior Management Team Limoneira’s Senior Management Team has an Average of 26 Years of Industry Expertise Harold Edwards Mark Palamountain Alex Teague President / CEO Chief Financial Officer Senior Vice President / COO • 28 years industry experience • 20 years finance experience • 31 ye
Slide 4: Limoneira – A Diversified Citrus Company
Limoneira – A Diversified Citrus Company From Our Groves to Your Home bringing you the best since 1893 Diverse and On-Trend Citrus Fruit Bearing Acres (revenue by product) (in thousands) 10 +6.2% CAGR 8.2 Agribusiness is 4%4% 96% of Revenue 8 1.0 6% 6.0 6 1.5 8% 4.5 0.5 0.9 $121 4 0.4 1.1 1.4 0.9 mi
Slide 5: Scale: Fully Integrated Player Within a Highly Fragmented Space
Fully Integrated Player Within a Highly Fragmented Space Integrated. Scaled. Global sitting between highly fragmented growers and diverse end markets End Customers Supply Partners Growers Packers Marketers / Distributors (Retail, Food Service, Manufacturing) LMNR Operations • Limoneira delivers: – I
Slide 6: One World of Citrus – Global Reach Year Round Supply
One World of Citrus™ – Global Reach Year Round Supply 73% Domestic Sales / 23% Domestic Exporter Sales / 4% Direct International Sales Lemons Avocados Oranges Global End Markets Year Round Production and Sourcing Capabilities Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Lemons Avocados Oranges Mi
Slide 7: Diversified U.S. Lemon Production Platform
Diversified U.S. Lemon Production Platform Locations Across Key Growing Regions provides low cost access to grower base and key customers LMNR Lemon Revenue by Product LMNR Growing Regions California 6% 4% 16 agricultural 9% Fresh Lemons ranch locations Packing under management By-Product San Franci
Slide 8: Continued Growth in Core Segments: Lemons
Continued Growth in Core Segments: Lemons One of the Largest Growers, Packers, Marketers & Distributors of lemons in the U.S. Fresh Lemon Consumption Lemon Segment Highlights 4.5 4.3 % of Agri. Revenue 81% U.S. Pounds per Person 4.1 3.9 Fresh Market Size 35.6 million cartons 4.0 3.6 3.5 3.5 3.4 % U.
Slide 9: A Leader in the Highly Fragmented Lemon Industry
A Leader in the Highly Fragmented Lemon Industry History. Tradition. Trust. delivering the finest citrus for over a century Growing Market Share • In 2017, LMNR marketed & distributed 7.2% of LMNR Production the U.S. lemon crop, compared to 3.9% in 2011 2011 2017 Other U.S. Production – up 84.6% (or
Slide 10: State of the Art Packing Facility – Investing for the Future
State of the Art Packing Facility – Investing for the Future Highly Automated Packing Platform is a Source of Continued Growth $29 million lemon packing facility enhancement in 2016 Current Packing Facility 2017 Results (vs. 2016) • Cost / Carton down 11% • 10% more lemons packed • 17% increase in 3
Slide 11: State of the Art Packing Facility (cont'd)
State of the Art Packing Facility – Investing for the Future (cont’d) Highly Automated Packing Platform is a Source of Continued Growth $29 million lemon packing facility enhancement in 2016 Millions of Lemon Cartons Packed & Sold Packing Volume Mix 3.5 3.2 LMNR Cartons 3rd Party Cartons 3.1 3.0 2.9
Slide 12: Continued Growth in Core Segments: Avocados
Continued Growth in Core Segments: Avocados 103% Consumption Growth in Avocados in the past 10 years Avocado Consumption Avocado Highlights 8 7.0 7.2 7.1 U.S. Pounds per Person % of Agri. Revenue 8% 7 6.1 6 5.6 5.1 % U.S. Market Share 2.2%, one of the largest growers 5 4.3 4.0 3.8 Planted Acres 900
Slide 13: Continued Growth in Core Segments: Oranges
Continued Growth in Core Segments: Oranges Oranges Provide Crop Diversity and Represent a Key Aspect of Limoneira’s One World of Citrus Program Orange Consumption Orange Highlights 11 10.5 10.4 U.S. Pounds per Person 9.9 10.0 % of Agri. Revenue 6% 10 9.7 9.4 9.2 9.1 % U.S. Market Share 1.0% 9 8.7 8.
Slide 14: Continued Growth in Core Segments: Specialty Citrus
Continued Growth in Core Segments: Specialty Citrus Global Consumers Expect Variety and New Flavors Specialty Citrus Consumption Specialty Citrus & Other Crops Highlights 8 U.S. Pounds per Person 7.4 7.5 % of Agri. Revenue 5% 7.1 7.2 7.2 7 6.9 % U.S. Market Share NA 6.5 6.5 6.2 6.0 Planted Acres 1,0
Slide 15: Significant Investment to Grow Our Platform
Significant Investment to Grow Our Platform Limoneira has made significant investments to ensure that customers receive a consistent supply of high quality citrus year-round, which many of our competitors are unable to supply July 2013 Oct. 2013 2014 Feb. 2015 Dec. 2015 2016 Feb. 2017 Lease Acquired
Slide 16: Well Positioned for Industry Consolidation – Strong Acquisition Pipeline
Well Positioned for Industry Consolidation – Strong Acquisition Pipeline Meaningful Opportunity to Consolidate a Fragmented Space • Over 25+ qualified targets; $250mm M&A & Partnership Considerations pipeline • Production Acreage • Long-term goal is to continue to increase Asset Types • Packing Faci
Slide 17: Non-core Accelerators Will Unlock Value
Non-core Accelerators Will Unlock Value Further growth in the citrus division can be funded with incremental cash flows from these and other ongoing development projects • Limoneira has entered into a partnership with the Lewis Project Status Group of Companies to develop “Harvest at Limoneira”, a m
Slide 18: Non-core Accelerators Will Unlock Value
Non-core Accelerators Will Unlock Value • Residential zone (East Area 1) is currently in development • Commercial zone (East Area 2) to be developed at a later – Grading began in November of 2017 date – Lot sales process expected to begin spring of 2018 with closings in Q1 2019 Residential (East Are
Slide 19: Non-core Accelerators Will Enhance Value and Provide Cash Flow
Non-core Accelerators Will Enhance Value and Provide Cash Flow Additional Ancillary Cash Flows Rental Operations Water Rights • Rental properties provide steady cash flow and • ~28,000 acre feet of owned water rights, usage support expansion in the citrus division rights, and pumping rights to the w
Slide 20: Avenues of Continued Growth and Margin Expansion
Avenues of Continued Growth and Margin Expansion Expand U.S. and international platform for production, packing and 1 marketing of lemons 2 Acquire and invest in citrus producing properties Increase owned and third-party lemon volumes packed at our new highly- 3 efficient facility 4 Apply success in
Slide 21: Financial Performance
Financial Performance
Slide 22: Fiscal Year 2018 Outlook
Fiscal Year 2018 Outlook Fiscal Year 2018 Guidance • The Company expects to sell: – Lemons: Between 3.1 million and 3.3 million cartons of fresh lemons at an average price of approximately $24.50 per carton – Avocados: Approximately 6.0 to 6.5 million pounds of avocados at approximately $1.30 per po
Slide 23: Strong Financial Performance
Strong Financial Performance Revenue EBITDA(1) Dollars in Millions Dollars in Millions $125 $121.3 $25 $24.0 20% $111.8 18% $103.5 $100.3 $20.1 $100 $20 16% $84.9 4.4 $19.0 14% $15.4 $75 $15 $14.5 12% $65.8 6.0 24.0 10% $52.5 115.9 $10.0 $50 106.1 $10 8% 98.5 95.1 19.0 80.0 $6.9 3.2 15.7 $6.3 14.5 6
Slide 24: Revenue Growth & Operational Efficiencies Driving EPS & DPS Growth
Revenue Growth & Operational Efficiencies Driving EPS & DPS Growth $ Per Share Earnings Per Share (1) Dividends Per Share $0.80 $0.30 $0.70 $0.70 $0.25 $0.25 $0.22 $0.60 $0.52 $0.20 $0.20 $0.18 $0.50 $0.46 $0.46 $0.17 $0.42 $0.15 $0.40 $0.36 $0.15 $0.13 $0.13 0.31 0.70 $0.30 $0.26 $0.10 0.25 0.46 0.
Slide 25: Agribusiness Land Asset Base Holds Significant Value
Agribusiness Land Asset Base Holds Significant Value Book Value of Land (1) Debt / Book Value of Land Dollars in Millions $100 3.0x $88.8 2.7x 2.7x $90 $86.4 2.5x $80 $70 2.0x $60 $56.1 $53.6 $53.8 1.6x $50 1.5x 1.3x $40 1.1x 1.0x 1.1x $33.0 $30.7 1.0x $30 $20 0.5x $10 $0 0.0 x 2011 2012 2013 2014 2
Slide 26: Appendix
Appendix
Slide 27: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation (Dollars in Thousands) Fiscal Year Ended October 31, 2010 2011 2012 2013 2014 2015 2016 2017 Net Income $ 323 $ 1,598 $ 3,150 $ 4,906 $ 6,991 $ 7,082 $ 8,058 $ 6,595 Interest Expense 3,506 619 (335) (672) (60) 148 1,409 1,778 Income Taxes (72) 707 1,978 3,235 3,573 3,9
Slide 28: Annual Results
Annual Results (in thousands) FY 2015 % of Rev FY 2016 % of Rev FY 2017 % of Rev Revenues: Lemons $ 78,978 79% $ 85,267 76% $ 94,199 78% Avocados 7,132 7% 10,767 10% 9,522 8% Oranges 5,626 6% 6,143 5% 7,099 6% Specialty Crops 3,388 3% 3,953 4% 5,049 4% Total Agriculture Rev 95,124 95% 106,130 95% 11
Slide 29: Annual Expenses & Operating Metrics
Annual Expenses & Operating Metrics (in thousands) FY 2015 % of Rev FY 2016 % of Rev FY 2017 % of Rev Costs and Expenses Packing $ 20,644 21% $ 21,939 20% $ 23,778 20% Harvest 11,742 12% 13,263 12% 13,717 11% Growing 20,131 20% 18,774 17% 21,345 18% Third-Party Grower 21,328 21% 25,307 23% 26,833 22
Slide 30: Annual Cash Flow
Annual Cash Flow (in thousands) FY 2015 FY 2016 FY 2017 Net Income (Loss) $ 7,082 $ 8,058 $ 6,549 Depn & Amort 4,184 5,339 6,467 Impairment - - 120 (Gain) / Loss - Sales of Assets (5,603) (4,289) 300 Stock Comp 1,077 1,309 1,328 Equity (Earnings) /Losses 600 8 663 Deferred Income tax (350) 6,195 2,2
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