Limoneira Company (LMNR) Q2 2020 Earnings Report, Transcript and Summary

Greetings and welcome to the Limoneira Second Quarter 2020 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to John Mills with ICR. Thank you. Please begin.

Thank you. Good afternoon, everyone, and thank you for joining us for Limoneira’s second quarter fiscal year 2020 conference call. On the call today are Harold Edwards, President and Chief Executive Officer; and Mark Palamountain, Chief Financial Officer. By now everyone should have access to the second quarter fiscal year 2020 earnings release which went out today at approximately 4:00 PM Eastern Time. If you’ve not had a chance to view the release, it’s available on the Investor Relations portion of the company’s website at limoneira.com. This call is being webcast and a replay will be available on Limoneira’s website as well. Before we begin, we would 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 than 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 10-Qs and 10-Ks 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. And please note that during today’s call we will be discussing non-GAAP financial measures including results on an adjusted basis. We believe these adjusted financial measures can facilitate a more complete analysis and greater understanding of Limoneira’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 included adjusted EBITDA, which is a non-GAAP financial measure. A reconciliation of adjusted EBITDA to the most directly comparable GAAP financial measures is included in the company’s 10-Q and press release which have been posted to its website. And with that, it’s my pleasure to turn the call over to the company’s President and CEO, Mr. Harold Edwards. Good ahead, Harold.

Thanks, John and good afternoon everyone. On today’s call, I will provide an overview on the impact of COVID-19 that has had on our business to date as well as a brief review of our operational results for the second fiscal quarter. Mark will then follow with an in-depth review of our financial results, and I will finish with a discussion regarding our outlook for the remainder of fiscal year 2020. After that, we will open up the call to your questions. The COVID-19 pandemic has had an adverse impact on the industries and markets we service. The United States lemon market has seen a significant decline in volume with the overall lemon industry demand falling more than 50% since shelter-in-place orders were issued in mid-March. This has resulted in a significant market oversupply. Additionally, the export market for fresh product has also significantly declined due to COVID-19. While our retail food and club grocery business have outperformed during this period, it has been more than offset by the decline in the foodservice industry with restaurants and bars forced to temporarily close or restricted to delivery and front-of-door service only. To improve our long-term liquidity position given these uncertain times, we have taken measures including selling our position in Calavo stock, repurposing certain agricultural acreage, temporarily postponing nonessential capital expenditures, and increasing our revolving line of credit. While we were starting to see results improve in our foodservice business, the pressure COVID-19 has put on lemon pricing will take time to recover. However, our team has shown tremendous agility by greatly expanding our reach into retail and grocery. This has led to strong lemon volume growth of 14% compared to the same period last year. I will now discuss each of our business divisions, starting with our agribusiness. Agribusiness revenue for the second quarter was $38.4 million, compared to $40.8 million the prior year and included $25.3 million in fresh lemon sales. During the quarter, our fresh lemon volume increased 14% to 1.5 million cartons due to our strong team, tremendous partners, and expanding relationships in our industry. However, the increased volume was offset by a reduction in pricing from an oversupply of North American fruit and reduction in overseas shipments. This is a rapidly changing environment, and during the past few weeks of our third quarter of fiscal year 2020, we are continuing to experience strong volume at grocery retail and beginning to see a slow improvement in foodservice as certain states begin to open restaurants and bars on a limited basis. Despite the reduction in sales from restaurant closures in the quarter, we experienced year-over-year sales growth in both avocados and oranges. We sold approximately 1.2 million pounds of avocados at an average price per pound of $1.64 for a total of $2 million and sold approximately 356,000 cartons of oranges at an average price per carton of $7.49 for a total of $2.7 million in revenue in the second quarter. However, specialty citrus and other crop revenue was down year-over-year at $1.2 million compared to $1.9 million in the same prior-year period. Turning now to our real estate development segment, the builders working with us on Harvest at Limoneira have sold 70 homes since the beginning of the calendar year for a total of 112 homes sold out of the 244 initial lot closings. We are very pleased with the recent home sales and expect this project in its entirety to be 1,500 homes and provide the company with additional $80 million of cash flow over the next six to nine years. These are challenging times in our industry, but we have been through tough times before and we are starting to see our partners in the foodservice industry beginning to open locations. We are encouraged by the increase in fresh lemon volume in the second quarter combined with the increased fruit bearing acreage we have coming online this year. In order to keep our long-term growth intact and weather this temporary disruption to our business, we have taken the necessary actions to secure the strength of our long-term financial position. And with that, I will now turn the call over to Mark.

Thank you, Harold and good afternoon everyone. For the second quarter of fiscal year 2020, total net revenue was $39.6 million compared to total net revenue of $42 million in the second quarter of the previous fiscal year. Agribusiness revenue was $38.4 million compared to $40.8 million in the second quarter last year. The year-over-year decline can be attributed to a dramatic reduction in the pricing of lemons due to the oversupply caused from a reduction in demand from COVID-19. Other revenue was $1.1 million compared to $1.2 million in the second quarter of fiscal year 2020. Agribusiness revenue for the second quarter of fiscal year 2020 includes $25.3 million in fresh lemon sales compared to $26.3 million of fresh lemon sales during the same period of fiscal year 2019. Sales of $2.3 million by Trapani Fresh on 143,000 cartons of fresh lemons partially offset the decrease in revenues in the second quarter of fiscal year 2020. Approximately 1,475,000 cartons of fresh lemons were sold during the second quarter of fiscal year 2020 at an average of $17.14 average price per carton compared to approximately 1,300,000 cartons sold at a $20.26 average price per carton during the second quarter of fiscal year 2019. We expect an improving lemon market, but it is important to realize we will continue to experience pressure on the price of fresh lemons into the second half of 2020 as restaurants and bars are slowly beginning to open back up and are expected to be operating at a reduced capacity. The company recognized $2 million of avocado revenue in the second quarter of fiscal year 2020 compared to minimal avocado revenue in the prior year as a result of the excessive heat we experienced. Approximately 1.2 million pounds of avocados were sold during the second quarter of fiscal year 2020 at a $1.64 average price per pound compared to approximately 400,000 pounds sold at a $1.20 average price per pound during the prior-year period. The company recognized $2.7 million of orange revenue in the second quarter of fiscal year 2020 compared to $2 million in the same period of fiscal year 2019 attributable to higher prices, partially offset by decrease in volume. Approximately 356,000 cartons of oranges were sold during the second quarter of fiscal year 2020 at a $7.49 average price per carton compared to approximately 361,000 cartons sold at a $5.52 average price per carton during the same period of the previous fiscal year. Specialty citrus and other crop revenues were $1.2 million in the second quarter of fiscal year 2020 compared to $1.9 million in the second quarter of fiscal year 2019. The decrease was primarily due to lower volume, partially offset by higher prices. Total costs and expenses for the second quarter of fiscal year 2020 decreased to $42.4 million, compared to $43 million in the second quarter of last fiscal year. The second quarter of fiscal year 2020 decrease in operating expenses was primarily attributable to decreases in agribusiness costs and expenses. Costs associated with the company’s agribusiness include packing costs, harvest costs, growing costs, costs related to the fruit procured and sold for third-party growers and depreciation expense. Operating loss for the second quarter of fiscal year 2020 was $2.8 million compared to a loss of $1 million in the second quarter of the previous fiscal year. Net loss applicable to common stock after preferred dividends for the second quarter of fiscal year 2020 was $5 million compared to net income of $2.7 million in the second quarter of fiscal year 2019. Net loss per diluted share for the second quarter of fiscal year 2020 was $0.29 compared to net income per diluted share of $0.15 for fiscal year 2019. Excluding the loss on stock in Calavo Growers, non-cash equity in the loss of Limoneira Community Builders and loss on assets disposals for the second quarter of fiscal year 2020, adjusted net loss applicable to common stock was $1.4 million compared to second quarter of fiscal year 2019 adjusted net loss of $1.6 million. Adjusted EPS was a loss of $0.08 in the second quarter of fiscal year 2020 compared to a loss of $0.09 in the same period of fiscal year 2019. Adjusted EPS in the current quarter excludes a non-recurring loss of $0.02 impact from tree removals as well as a loss of $0.18 on Calavo stock. Adjusted EBITDA was breakeven in the second quarter of fiscal year 2020 compared to a gain of $800,000 in the same period of fiscal year 2019. A reconciliation of adjusted EBITDA to net income is provided at the end of our earnings release. For the 6 months ended April 30, 2020 revenue was $81.2 million compared to $84.1 million in the same period last year. Operating loss for the first six months of fiscal year 2020 was $11.3 million compared to an operating loss of $4 million in the same period last year. Net loss applicable to common stock after preferred dividends was $11.6 million for this first six months of fiscal year 2020 compared to a net loss of $2.1 million in the same period last fiscal year. Net loss per diluted share for the fist 6-month period this fiscal year was $0.66 compared to a net loss per diluted share of $0.12 in the same period of fiscal year 2019. Excluding the loss on stock in Calavo, non-cash equity in loss of LLCB and loss on asset disposals for the first six months of fiscal year 2020, adjusted net loss applicable to common stock was $6.6 million compared to adjusted net loss of $3.6 million for the same period in fiscal year 2019. Adjusted net loss per diluted share was $0.37 compared to adjusted net loss per diluted share of $0.21 for the same period in fiscal year 2019 based on approximately 17.6 million and 17.5 million respectively weighted average diluted common shares outstanding. Before I hand the call back over to Harold, a comment on our balance sheet, long-term debt as of April 30, 2020 was $124.3 million compared to $105.9 million at the end of fiscal year 2019. Due to improvements in our cost structure, the disposition of our Calavo stock and an increase in our revolving line of credit, we ended the quarter with approximately $27 million of availability on our lines of credits. In addition, we expect to receive tax related refunds from the CARES Act. As a reminder, the CARES Act provides numerous tax provisions and other stimulus measures, including temporary changes regarding the prior and future utilization of net operating losses and temporary changes to the prior and future limitation on interest deductions. Based on this benefit and our lines of credit, we are confident we have ample financial resources for the temporary downturn in the current environment. Now I would like to turn the call back to Harold to discuss our fiscal year 2020 outlook.

Thank you, Mark. As a result of uncertainty around the duration, scope and ultimate financial impact of the COVID-19 pandemic, Limoneira management is withdrawing our fiscal year 2020 outlook that was previously provided on March 11, 2020. The decline in demand for our products during the second quarter of 2020, which we believe was a result of the COVID-19 pandemic, negatively impacted our sales and profitability for the second quarter of 2020. The duration of these trends and the magnitude of such impacts cannot be precisely estimated at this time as they are affected by a number of factors, many of which are outside management’s control. Although subject to unforeseen changes that may arise as the COVID-19 pandemic continues to unfold, we currently expect improvement in the adjusted EBITDA during the second half of 2020. We are seeing improved sell-through results during the month of May compared to March and April due to seasonality as well as foodservice beginning to open in certain areas of the United States. In addition, the company anticipates record lemon volumes for fiscal year 2020 offset by expected lower pricing. Talking about our longer term growth pipeline, looking into the back half of 2020 and beyond, we have an additional 1,200 acres of non-bearing lemons estimated to become full bearing over the next 4 years, which will enable us to achieve strong organic growth for many years to come. The company expects 300 of the 1,200 acres to become full bearing in fiscal year 2021. Beyond these 1,200 acres we intend to plant an additional 250 acres of lemons in the next two years. We anticipate this additional acreage will increase our domestic supply of Limoneira owned lemons from its 2020 level by approximately 50% or about 900,000 to 1.3 million additional fresh cartons as the non-bearing and planned acreage becomes productive. We also expect to have a steady increase in third-party grower fruit. And with that, I’d like to open the call up to your questions. Operator?

Thank you. [Operator Instructions] Our first questions come from the line of Ben Bienvenu of Stephens. Please proceed with your questions.

Hey. Good afternoon, guys. Thanks for taking the questions.

Hey, Ben.

I want to start with lemon prices. They really across – it looks like across all sizes and grades have moved up pretty nicely over the last several months, and I suspect part of that is a recovery in foodservice, albeit slow. Lemon price is still below average, but now it looks like they’re up year-over-year. Can you talk at all should the slope of that curve largely mirror the foodservice recovery? And then any color, Harold, that you could provide just on the crop and how it’s faring for this year and then how – what implications it has for next year as well?

Happy to, Ben. So, yes, your observation about -- and I guess slight speculation about demand improvement because restaurants are opening up and foodservice is pulling more demand is exactly what’s going on. The other thing that’s going on is we’ve gone through the first initial picks in District 2, which you know is the coastal region of California. And as we look towards the second part of the coastal pick, it looks like the overall industry supply is less than the first part. So, we are going to see a better balance between demand and supply than we saw in the first half of the year. And I think – so, I think the combination of those two things is really having a very positive impact on pricing. Just anecdotally, as you know, we reported a combined price of – Mark, $17…

$17.14.

$17.14 in the second quarter. Pricing today is across all sizes and grades in the mid 19s. And our expectation or I will put it this way, our goal for the third quarter is to see that price finish at approximately $20.50 to $21. And our sales team feels that’s achievable giving the – given the response they’re receiving from the marketplace today.

Okay.

And so – maybe now – yes, now to talk about the second half and what the crop looks like for next year. It’s a little too early to know just because there’s a lot of things that Mother Nature will do between now and when we actually get into the harvest. But aside from the growth of bearing acres, at this point we believe that we will see similar crop sizes for next year. One thing that we believe we will have a better opportunity to do next year is to recruit new outside growers. Our returns this year are much more competitive to our third-party growers than they were last year. And even though it’s a disappointing year through the first half given the oversupply situation, the overall returns are lower than, I think, expectation because of overall pricing is lower. Our returns are very competitive this year, and that gives us a better opportunity to recruit new growers for next year. So, year-on-year volume growth we next – for next year we see a real opportunity to grow.

Okay. That’s great. Thank you. Mark, looking at the SG&A line, how much flexibility is there on that particular line item of the P&L to remove cost? How lean are you all in SG&A? And then any other components of the business where you think there is fungibility around cost that you can get leaner on in the midst of this downturn?

Yes, that’s a great question, Ben. So we have been working very hard and diligently on attacking that exact question in the last, call it, 8 weeks. The short answer is it’s about – we’ve targeted about $2 million of cost just from the G&A side. Simply – obviously, compensation is one place that’s easy to go to. Travel related expenses and then just other non-essential items, we’ve identified. We were coming into the year a little bit heavier because, as you know, we implemented a new ERP system, which always gets complicated. So, we were running about $500,000 to $700,000 ahead. So, I think if we end the year sort of $1 million under where we’ve all been is our first target. The thing we don’t ever want to really get into, especially believing in our long-term growth strategy, is cutting costs in the field. There’s just too much long-term problems if we get into that. And I think and we all believe that the lemon market is stabilizing and coming back to a good place, and you compromise yields in the field that’s just – it’s never a good story. So – but in general from the G&A side, I think that’s where we’re attacking and sort of a 10% reduction number is the goal.

Ben, this is Harold. One other sort of comment for color on that, in the SG&A of the second quarter was approximately $0.04 of non-recurring SG&A items related to accounting expense related to the FGF Trapani acquisition as well as then one-time ERP implementation costs. So that was one of the reasons why those costs looked sort of out of line given where we were, but they were accounting issues that we did not anticipate when we budgeted. Those have now – we’re past those. And so, you’ll see a nice fall-off in our trend of SG&A in the coming quarters.

Okay. Very helpful. Thank you both and best of luck.

Thanks, Ben.

Thanks, Ben.

Our next questions come from the line of Vincent Anderson of Stifel. Please proceed with your questions.

Good afternoon. Thanks.

Hi, Vince.

Hi. So just quickly, we are about to gear up for Mexican imports for lemons. Just curious if you had any intel on the ground there. How their season is shaping up, so that’s going to be a big part of the supply demand balance in the back half of the year?

We had a little bit of intel Vince. So as far as we know, crops are slightly below volume levels of last year, and we do know that one of the largest suppliers or exporters out of Mexico pull a significant amount of acreage related to HLB issues and greening issues that they encountered down there. And so, it’s our expectation that the total amount of Mexican fruit that comes into the market should be south of 3 million cartons. And it’s the usual fire drill when that fruit starts coming in. They attack certain regional markets. But typically with the choice and the standard grades, they have a hard time putting up a real fancy grade. So as it relates to the overall competitiveness of our pricing, it always makes some of that lesser grade fruit more crowded. But I don’t anticipate there’ll be a huge downturn in overall pricing as a result of the Mexican imports this year.

That’s good to hear. And this might be tough to pinpoint, but if you were to kind of just hold an idea of what normal imports would be for the second half of the year and you look at your best guess for inventory levels, given the demand destruction, how quickly do we really need to see a return to normal on the demand side of the equation such that inventories don’t become a big overhang into ‘20 – early ‘21?

No that’s always a great – that is the issue and that’s a great question. So just because we get to participate in the export or imports dependent on your perspective out of Chile and out of Argentina, we are hearing lots of rhetoric from some of the Argentine shippers that they are looking forward to shipping into the US market. Their break-even, as we understand it, is $17 to $18 a carton. So we don’t anticipate that there’ll be that much additional fruit in the marketplace from Argentina. We’ll see – as we’ve discussed before, they have a slight logistical advantage for land and fruit under the East Coast market. So you’ll see some of that Argentine fruit in those markets. But we also – we haven’t made any comments to it, but we’re seeing a nice return of foodservice and demand business into Western and Eastern Europe and a lot of that Argentine and Chilean fruit finds its way that over there. The export markets in Southeast Asia are recovering at very different spotty rates. Example being the Japanese market is very, very slow to recover. Right now they are pulling in about a fifth of what they normally pull in of normal lemon imports and – but the Korean market is back to almost like normal and we are seeing normal levels of shipments there. So it will certainly be a very positive thing for Limoneira to see restaurants and bars around the world recover and get back into business. It’s just – it’s very difficult to predict how quickly that’s going to happen and how that is happening. But just anecdotally every week we are seeing our shipments improve and increase aside from our retail growth and we attribute that to both the seasonality of the summer months but also to restaurants and bars beginning to open up.

Yes. And Vince, one thing I might add is, I think you’ve noted in the recent weeks that Chile has now opened up, or China has accessed – opened up access into Chile with very little phyto sanitary protocol. And so that is a, what we call, a new market for our lemons down there. So we’ll probably see some demand pull go that way, which will also help the balance.

Alright. Well, thanks for getting out ahead of my last question, Mark. Instead, can I go back to – can I go back to Europe just briefly? I mean, everything we read is that that market continues to be red hot, both Western and Eastern Europe. Is there something different about how they purchase or how Argentina sells into Europe that you’re not maybe a little bit more bullish, or is this just about moderating expectations given how crazy things are right now?

The latter. We are just being careful. We just don’t know. The one thing we can say from Argentina’s perspective that we do know is – and I think we reported on it in the first quarter, but there was extreme heat in the first part of the season which did impact the entire industry’s crops. So the size of the crop is down. Order of magnitude, maybe what?

30%.

30%. So that bullishness that you’re referring to in all of Europe is certainly going to be extremely beneficial for our domestic market because that’ll defer a lot of that sourced fruit from Argentina and Chile into those markets and keep it out of the United States, which should ultimately help us.

Perfect. Thanks, guys.

Thanks, Vince.

Our next question is coming from the line of Mark Smith with Lake Street Capital. Please proceed with your questions.

Hi, guys. First off, can you just talk about any outbreaks or shutdowns that you saw potentially during the quarter of facilities?

Our sister company Calavo had an outbreak. Somebody got sick, went home, tested positive. 60 of their workforce went home, sheltered in place were tested. In total 45 of their employees, most of whom were asymptomatic, tested positive. But they were able to come in with a second shift of temporary employees to remain in operation. As it relates to the Limoneira company’s operation, we had one employee in the orchard, actually out in our farming group, who tested positive. He was sent home, sheltered in place, recovered. He exposed three other people. All of them tested negative, but sheltered in place for 14 days and they’re now back to work. We had one temporary employee in the packinghouse who tested positive. They were exposed to three other people. All those people were sent home for 14 days. The three other employees, or the temporary employees were asymptomatic or actually, sorry, tested negative. So in our – and then in our Yuma, Arizona operation, we had two employees test positive for it. And at this point, that’s the extent of the outbreaks of the cases that we’ve had throughout our company. We’ve been diligently practicing social safe distancing. Everybody is wearing a mask. We’re checking temperatures every day in the packing houses and working as diligently as we can to prevent any future outbreaks.

Perfect. And similar to that, any incremental costs that you can call out that really hurt gross profit margin as you look at different initiatives and projects put in place to kind of prevent and safety measures for COVID?

Not necessarily specific to COVID, nothing that really move the needle. I mean, there’s more training expense, there is more personnel expense as it relates to cleaning and sanitizing, but nothing that really is moving the needle that dramatically. We have put the safety of our employees as the number one priority. So, we’re really not only trying to walk the walk but walk the talk and just really working hard in partnership with the Ventura County Health Department locally here to do what we need to do to prevent any future outbreaks, but really not moving the needle significantly on the cost side.

Okay, great. Thank you.

Our next questions come from the line of Ben Klieve with National Securities. Please proceed with your questions.

Alright. Thanks for taking my questions. Just a couple from me here, first wondering if you can comment on kind of the state of the M&A market. Are you seeing kind of smaller growers or smaller businesses that you’ve been looking at? Maybe you have any kind of enhanced need to go to market and as such presenting you with some M&A opportunities that maybe weren’t there six months ago or have you not yet noticed any kind of meaningful change in the M&A market amid the COVID pandemic?

No, that’s a great question and we actually are seeing quite a bit of activity. It’s funny talking about farmers and M&A because if you said M&A to a farmer, I don’t think anybody know what you were talking about. But certainly in the lemon space throughout California, this is year number two back-to-back of challenging lemon returns and challenged lemon profits and profitability. And so we’re beginning to see – and we see this as good news, we are beginning to see farmers throughout Arizona and California begin to take lemon acreage out. So that’s always a good sign for us because that sort of leads us to believe that we’ve sort of passed the tipping point of this imbalance between demand and supply. So that’s good news. But also your – until the pandemic, we’ve seen 3 years in a row of challenged returns from oranges. And we have seen a lot of orange acreage beginning to come up, but we’re also seeing a lot of activity from interested people enrolling up and purchasing orange acreage. And so in future quarters, you will hear Limoneira talk more and more about some of our acreage rationalization and opportunities for us to dispose of less productive citrus ground and so the sort of the improvement or increase in the M&A activity in that space has been very helpful to us.

Got it. Got it, thank you. Only other question for me is regarding the Harvest at Limoneira. Some really encouraging numbers that you guys talked about in your prepared comments. Can you talk a bit about kind of the benchmarks that we should look for here for when we’re going to be able to better understand the timing of the future cash payments? Do you need to sell out of those initial 244 lots? Do you think we’ll have visibility of that in advance of that kind of what should we be looking here for regarding this initiative over the next few quarters?

Yes, that’s a great question, Ben. So, just some color on this year, so, so far this year we’ve sold 70 homes, the homebuilders have sold 70 of those lots. Our benchmark at the beginning of the project was two homes per week. This last week alone we netted 11 sales. One week we had 10, one week we had zero, but overall compared to all of the Southern California real estate developments. Santa Paula has really, really outshined and our business partners are pretty optimistic on that. And so the way that we think about the next phases are we’re already in full motion. You’ll see some stuff coming from us in the next quarter and some announcements hopefully on those next phases of lot still in phase one. But those 244 don’t need to be sold out, to your question. We are just in a continual rollout development. So we still think it’s about six to seven years for the full development on the 1,500 homes and $80 million of additional cash. We look toward the end of 2021, early 2022 fiscal to get our first real meaningful cash distribution in the tens of millions. So we are optimistic and that’s why we want to talk about it in this – that things are looking good in this environment. Whether it’s interest rates or people moving out of urban areas, it’s probably a little bit of both, but it’s definitely a silver lining right now to the story.

Yes, for sure. Well, congratulations on that progress. Very good. I think that does it for me. Thanks for taking my questions and I’ll get back in queue here.

Great. Thanks.

Thank you.

Thank you. We have reached the end of the question-and-answer session. I will now turn the call back over to Harold Edwards for any closing remarks.

Thank you for your questions and interest in Limoneira. Have a great day.

This does conclude today’s conference. You may disconnect your lines at this time. Thank you for your participation and have a great evening.