Limoneira NASDAQ: LMNR executives said the company’s fiscal second-quarter results reflected a transitional period tied to its Sunkist partnership, asset sales and cost-reduction efforts, while management pointed to stronger expected results in the second half of fiscal 2026.
President and Chief Executive Officer Harold Edwards said the quarter included $23.8 million of non-cash charges, including a $9.3 million impairment on the Windfall Farms property, a $7.8 million loss on asset disposals primarily related to Yuma, Arizona lemon orchards, $5.1 million of net accumulated foreign exchange losses and a $1.6 million allowance on foreign receivables.
Despite those charges, Edwards said Limoneira “exceeded expectations for revenue and Adjusted EBITDA in the second quarter,” adding that the company remains confident in its strategic actions, including targeted annual selling, general and administrative savings of $10 million and operational changes under its Sunkist relationship.
Revenue Declines as Business Mix Shifts
Chief Financial Officer Greg Hamm said total net revenue for the second quarter of fiscal 2026 was $23.9 million, compared with $35.1 million in the prior-year quarter. AgriBusiness revenue totaled $22.5 million, down from $33.6 million a year earlier, while other operations revenue was $1.4 million, compared with $1.5 million.
Hamm attributed the revenue decline to three strategic changes: the Sunkist transition and resulting shift in quarterly sales cadence, Limoneira’s exit from the brokerage business and Chilean farming operations in the first quarter, and the termination of farm management operations in the prior fiscal year.
Fresh lemon carton sales were $17.1 million, compared with $19.7 million in the year-ago quarter. Limoneira sold approximately 1.03 million cartons of fresh lemons at an average price of $16.63 per carton, compared with 1.36 million cartons at $14.52 per carton in the prior-year period. Hamm said the lower volume reflected the cadence change under the Sunkist agreement, while noting that 2026 per-carton prices are net of the Sunkist marketing fee.
Avocado revenue was nominal in the quarter, compared with $2.8 million a year earlier, as Limoneira deliberately delayed harvesting some fruit to seek better expected pricing in the third quarter. Orange revenue, specialty citrus and wine grapes also were nominal, reflecting the transition of citrus brokerage operations to Sunkist.
Non-Cash Charges Drive Wider Loss
Total costs and expenses rose to $45.6 million from $38.5 million in the prior-year quarter, primarily due to the Windfall Farms impairment and Yuma orchard disposal charges. Hamm characterized those actions as “disciplined capital allocation decisions.”
Operating loss was $21.7 million, compared with an operating loss of $3.3 million in the second quarter of fiscal 2025. Net loss applicable to common stock after preferred dividends was $21.4 million, or $1.20 per diluted share, compared with a net loss of $3.5 million, or $0.20 per diluted share, a year earlier.
On an adjusted basis, Limoneira reported a net loss of $5.2 million, or $0.29 per diluted share, compared with an adjusted net loss of $3.1 million, or $0.17 per diluted share, in the prior-year period. Adjusted EBITDA was a loss of $1.7 million, compared with a loss of $200,000 a year earlier.
Hamm said the company received $2.3 million in insurance proceeds in March 2026 related to an incident at its packing house. Of that amount, $1.2 million was recognized as a reduction of agribusiness costs and $1.1 million was recorded in other operating income during the second quarter.
Company Points to Stronger Second Half
Management said Limoneira expects positive Adjusted EBITDA in the third and fourth quarters of fiscal 2026, supported by higher avocado volumes, better lemon volume and pricing, and cost savings.
For the full year, Limoneira reiterated its fresh lemon volume guidance of 4 million to 4.5 million cartons and raised its avocado volume outlook to 5.5 million to 6.5 million pounds.
Edwards said lemon pricing has improved, noting during the question-and-answer session that average pricing across grades and sizes was above $20 per carton. He said a forecast viewed by management showed average pricing rising by about $1 per carton each month through October, adding that Limoneira had not seen that level of strength in lemon pricing since 2018.
In response to a question about avocados, Edwards said Limoneira moved about 500,000 pounds from the second quarter into the third quarter. He said current pricing for 48-size avocados was around $1.30 to $1.40, with an expected blended average price “somewhere on the order of magnitude” of $1.30.
Asset Monetization Remains Central to Strategy
Limoneira also highlighted several asset monetization and development initiatives. The company announced an agreement to sell an 80% interest in approximately 724 acres of its Windfall Farms vineyard property in Paso Robles, California, for $16 million, consisting of $10 million in cash at closing and a $6 million seller-financed note. Hamm said Limoneira will retain a 20% interest and expects the transaction to close in the fourth quarter of fiscal 2026.
Edwards said the buyer can close any time after July 1 and has until the end of October to complete due diligence, at which point the buyer would need to fund $10 million to execute the transaction. The remaining $6 million would be paid at $2 million annually over the following three years, according to Edwards.
The company also said it ceased citrus farming operations on 600 acres of lemons in Yuma, Arizona, as part of a strategy to conserve and monetize water by shifting to lower-water-use crops. Hamm said an outright sale of Colorado River water rights is less likely than a structure involving crop substitution that frees up allocated water for long-term lease or sale of access rights.
Edwards said Limoneira continues to expect future proceeds from Harvest at Limoneira, Limoneira Lewis Community Builders II and East Area 2 to total $155 million over the next five fiscal years. He said Phase 2 home sales remain robust, with two to seven homes sold per week, and Phase 3, consisting of approximately 500 home lots, is expected to go to market in fiscal 2027.
Limoneira also pointed to its 50/50 organic recycling joint venture with Agromin, which Edwards said has the ability to process up to 295,000 tons of organic waste annually and is expected to generate shared earnings after becoming operational in fiscal 2027.
About Limoneira NASDAQ: LMNR
Limoneira Company NASDAQ: LMNR, founded in 1893 and based in Santa Paula, California, is a diversified agribusiness and real estate enterprise. As one of the oldest citrus producers in the United States, Limoneira has built a reputation for cultivating and marketing high-quality citrus fruits, avocados and specialty crops. The company's vertically integrated model encompasses farming, packing, processing and marketing activities designed to deliver fresh produce to domestic and international markets.
In its agricultural operations, Limoneira specializes in lemons, oranges and avocados, employing modern irrigation, harvesting and packing technologies to maintain consistent product quality and supply.
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