Limoneira Company reported its financial results for the third quarter ended July 31, 2020.
Harold Edwards, President and Chief Executive Officer of the Company, stated, “We achieved revenue and earnings growth in the third quarter driven by lemons, avocados and oranges. Our overall business continues to be affected by the COVID-19 pandemic; however, we are experiencing strong volume in grocery retail as consumer buying patterns are focusing on at-home dining instead of foodservice venues. We continue to be a leader in foodservice and export and are well positioned as dining-out continues to improve. Our real estate development project, Harvest at Limoneira, has now closed on 354 lots since inception, including 144 new closings this fiscal year. This has exceeded our expectations and we are very pleased with the strong interest in this beautiful development.”
Mr. Edwards continued, “We generated $5.3 million of adjusted EBITDA in the third quarter due to strong revenue and focus on expenses. In addition, we recently closed on the sale of a non-strategic property for $6.0 million in the Central Valley of California, strengthening our balance sheet for the fourth quarter of fiscal 2020. Looking forward, we are very excited about our growth opportunities in fiscal 2021 as we have dramatically increased our sales in grocery this year and believe we are very well positioned for foodservice growth as restaurants and bars begin to reopen.”
Fiscal Year 2020 Third Quarter results
For the third quarter of fiscal year 2020, total net revenue was $53.6 million, compared to total net revenue of $50.9 million in the third quarter of the previous fiscal year. Agribusiness revenue was $52.4 million, compared to $49.6 million in the third quarter of last fiscal year. Other operations revenue was similar to the prior fiscal year at $1.2 million.
Agribusiness revenue for the third quarter of fiscal year 2020 includes $35.4 million in fresh lemon sales, compared to $35.8 million of fresh lemon sales during the same period of fiscal year 2019. The decrease was primarily the result of COVID-19 related food service closures reducing the demand for lemons and creating an over-supply in the marketplace, which resulted in lower average per carton prices in the third quarter of fiscal year 2020. Approximately 1,979,000 cartons of fresh lemons were sold in aggregate during the third quarter of fiscal year 2020 at a $17.91 average price per carton compared to approximately 1,876,000 cartons sold at a $19.09 average price per carton during the third quarter of fiscal year 2019. The Company recognized $6.1 million of avocado revenue in the third quarter of fiscal year 2020, compared to $2.5 million in the same period last fiscal year. Approximately 6.1 million pounds of avocados were sold during the third quarter of fiscal year 2020 at a $1.00 average price per pound, compared to approximately 1.4 million pounds sold at a $1.80 average price per pound during the third quarter of fiscal year 2019.
The Company recognized $2.2 million of orange revenue in the third quarter of fiscal year 2020, compared to $0.7 million in the same period of fiscal year 2019, attributable to higher prices of oranges partially offset by a decrease in volume. Approximately 184,000 cartons of oranges were sold during the third quarter of fiscal year 2020 at a $12.13 average price per carton, compared to approximately 382,000 cartons sold at a $1.86 average price per carton during the third quarter of fiscal year 2019. Specialty citrus and other crop revenues were $0.8 million in the third quarter of fiscal year 2020, compared to no sales in the third quarter of fiscal year 2019.
Total costs and expenses for the third quarter of fiscal year 2020 increased to $51.7 million, compared to $48.8 million in the third quarter of last fiscal year. The third quarter of fiscal year 2020 increase in operating expenses was primarily attributable to increases in agribusiness costs partially offset by decreases in selling, general and administrative expenses. Costs associated with agribusiness include packing costs, harvest costs, growing costs, costs related to the fruit procured and sold for third-party growers and depreciation and amortization expense.
Operating income for the third quarter of fiscal year 2020 was $1.8 million, compared to operating income of $2.1 million in the third quarter of the previous fiscal year.
Adjusted EBITDA was $5.3 million in the third quarter of fiscal year 2020, compared to $3.8 million in the same period of fiscal year 2019. A reconciliation of adjusted EBITDA to net income is provided at the end of this release.
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