Limoneira Co · NASDAQ:LMNR
Limoneira — Investor Presentation (June 2018)
31 slides from Limoneira's investor presentation, June 2018
Slide 1: Investor Presentation June 2018
Investor Presentation June 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: Global Demand for Fresh Citrus Continues to Grow
Global Demand for Fresh Citrus Continues to Grow Attractive & Growing Global Market for Fresh Citrus Fresh Lemon/Lime Consumption on the Rise Global Consumption U.S. Consumption Fresh Lemon/Lime Consumption 6.00 5.36 5.37 4.95 5.09 5.00 4.48 4.58 4.60 (MM Metric Tons) 4.00 3.00 2.00 1.23 1.23 0.96 0
Slide 5: 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 U.S. Fruit Bearing Acres (1) (revenue by product) (in thousands) 10 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 mill
Slide 6: Vertically Integrated Player Within a Highly Fragmented Space
Vertically 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 deliver
Slide 7: One World of Citrus – Global Reach With Year Round Supply
One World of Citrus™ – Global Reach With Year Round Supply Limoneira’s U.S. Lemon Supply: 73% Domestic Sales / 23% Domestic Exporter Sales / 4% Direct International Sales Lemons Avocados Oranges Global End Markets = Partnerships Pan de Azucar = LMNR Majority Ownership = LMNR Minority Ownership Year
Slide 8: 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 9: State of the Art Lemon Packing Facility – Investing for the Future
State of the Art Lemon Packing Facility – Investing for the Future Highly Automated Packing Platform is a Source of Continued Growth $29 million lemon packing facility enhancement in 2016 Millions of U.S. of Lemon Cartons Packed & Sold (1) 7.0 6.2 6.0 LMNR Cartons 3rd Party Cartons 5.5 4.8 5.0 4.0 3
Slide 10: Well Positioned for Industry Consolidation – Strong Acquisition Pipeline
Well Positioned for Industry Consolidation – Strong Acquisition Pipeline Accelerating Opportunity to Consolidate a Fragmented Space • Limoneira has successfully completed and M&A & Partnership Considerations integrated 6 acquisitions over the past 5 years • Production Acreage • Over 25+ qualified ta
Slide 11: Overview of San Pablo Acquisition
Overview of San Pablo Acquisition
Slide 12: Overview of San Pablo Acquisition
Overview of San Pablo Acquisition San Pablo -- $15.8 Million All-in Capital Required • Frutícola San Pablo S.A. (“San Pablo”) produces and sells lemons, as well as navel and Valencia oranges. The business is located near La Serena, Chile, near Limoneira’s existing assets in Chile • Limoneira is acqu
Slide 13: Frutícola San Pablo – Aerial View
Frutícola San Pablo – Aerial View Note: Aerial photograph taken circa 2015. 13
Slide 14: Frutícola San Pablo – Acreage Map
Frutícola San Pablo – Acreage Map 14
Slide 15: Frutícola San Pablo – Acquisition Rationale
Frutícola San Pablo – Acquisition Rationale • High-quality lemon and orange grove acreage • Modern production technology, including precision irrigation and fertilization. Much of the operation can be managed from a digital tablet 247 Acres • Enhances Limoneira’s “One World of Citrus” capability wit
Slide 16: Limoneira Overview
Limoneira Overview
Slide 17: 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 81.3% 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 %
Slide 18: 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 the LMNR Distribution Other U.S. Distribution U.S. lemon crop, compared to 3.9% in 2011 – up 84.6% (or 9.1%
Slide 19: 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 Previous Packing Facility 2017 Results (vs. 2016) • Current packinghouse processes 3 times the amount of fruit in the
Slide 20: 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 7.2 7.1 U.S. Pounds per Person 7.0 % of Agri. Revenue 8.2% 7 6.1 6 5.6 5.1 % U.S. Market Share 2.2%, one of the largest growers 5 4.0 4 Planted Acres 900 3 Cu
Slide 21: 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 10.0 % of Agri. Revenue 6.1% 10 9.4 9.2 % U.S. Market Share 1.0% 9 8.7 8.5 Planted
Slide 22: 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 4.4% 7.1 7.2 7.2 7 6.9 % U.S. Market Share NA 6.5 Planted Acres 1,000 6 Curre
Slide 23: 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 Feb. 2015 Dec. 2015 Aug. 2017 April 2018 Lease agreeme
Slide 24: Avenues of Continued Growth and Margin Expansion
Avenues of Continued Growth and Margin Expansion Expand U.S. and international platform for production, packing, marketing 1 and distribution 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 Ap
Slide 25: 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 entered a partnership with the Lewis Project Status Group of Companies to develop “Harvest at Limoneira”, a marquee re
Slide 26: Non-Core Accelerators Will Unlock Value
Non-Core Accelerators Will Unlock Value • Residential zone (East Area 1) • Commercial zone (East Area 2) to be developed at a later date Residential (East Area 1) Commercial (East Area 2) 26
Slide 27: 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 28: Financial Performance
Financial Performance
Slide 29: Strong Financial Performance
Strong Financial Performance Revenue Adj. EBITDA (1) Dollars in Millions Dollars in Millions $140 $25 20% $121.3 18% $120 $111.8 $20.1 $103.5 $20 16% $100.3 $100 4.4 $19.0 14% $84.9 $15.4 $15 $14.5 12% $80 $74.7 $65.8 $65.0 6.0 $11.2 10% $60 $10.0 - $52.5 115.9 $10 8% 106.1 98.5 95.1 3.2 $40 80.0 $6
Slide 30: Revenue Growth & Operational Efficiencies Driving EPS & DPS Growth
Revenue Growth & Operational Efficiencies Driving EPS & DPS Growth Earnings Per Share (1) Dividends Per Share $0.60 $0.25 $0.52 $0.22 $0.50 $0.20 $0.46 $0.46 $0.20 0.14 $0.42 $0.18 $0.17 $0.40 $0.36 $0.15 $0.15 0.23 $0.13 $0.13 $0.30 $0.26 0.25 $0.10 $0.20 0.38 $0.12 0.23 $0.05 $0.10 0.06 0.11 0.06
Slide 31: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation (Dollars in Thousands) 6 Months Ended Fiscal Year Ended October 31, April 30, 2011 2012 2013 2014 2015 2016 2017 2017 2018 Net Income $ 1,598 $ 3,150 $ 4,906 $ 6,991 $ 7,082 $ 8,058 $ 6,595 $ 1,468 $ 15,224 Interest Expense 619 (335) (672) (60) 148 1,409 1,778 851 794
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