Limoneira Company
Q4 2020 Earnings Call Transcript

Published: 11 Jan 2021

[Operator:]

Greetings and welcome to Limoneira fourth quarter 2020 earnings conference call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. . As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, John Mills.

[John Mills:]

Thank you. Good afternoon everyone and thank you for joining us for Limoneira's fourth quarter fiscal year 2020 conference call. On the call today are Harold Edwards, President and Chief Executive Officer and Mark Palamountain, Chief Financial Officer.

[Harold Edwards:]

Thanks, John and good afternoon, everyone. During the fiscal 2020, we made important strides in many areas of our overall business despite the dramatic affect that COVID-19 pandemic had on our foodservice business. We achieved record domestic lemon volume and our real estate development harvest at Limoneira exceeded our expectations. Domestic lemon volume was up due to our expanded focus on grocery retail as consumers continued to dine at home instead of foodservice venues. COVID-19 has affected our citrus businesses since March and this continued during our seasonally soft fiscal fourth quarter of 2020.

[Mark Palamountain:]

Thank you, Harold and good afternoon everybody. As a reminder to everyone listening, due to the seasonal nature of our business, revenue is driven by varying harvest periods from year-to-year and therefore it is best to view our business on an annual, not quarterly basis. Historically, our first and fourth quarters are the seasonally softer quarters while our second and third quarters are stronger. For the fourth quarter of fiscal year 2020, total net revenue was $29.8 million compared to total net revenue of $36.5 million in the fourth quarter of the previous fiscal year. Agribusiness revenue was $28.6 million compared to $35.3 million in the fourth quarter last year. Other operations revenue was relatively flat at $1.1 million. Agribusiness revenue for the fourth quarter of fiscal year 2020 includes $13.3 million in fresh lemon sales compared to $17 million of fresh lemon sales during the same period of fiscal year 2019. Pricing was lower than expected during the back half of the quarter due to COVID-19 pandemic-related foodservice closures reducing the demand for fresh lemons with reduced exports to Asia due to the pandemic. Approximately 787,000 cartons of fresh lemons were sold during the fourth quarter of fiscal year 2020 at $17 average price per carton compared to approximately 793,000 cartons sold at a $21.46 average price per carton during the fourth quarter of fiscal year 2019. The company recognized $500,000 of avocado revenue in the fourth quarter of fiscal year 2020, compared to $2.3 million in the same period last fiscal year. Approximately 500,000 pounds of avocados were sold during the fourth quarter of fiscal year 2020 at a $0.99 average price per pound, compared to no avocados sold during the prior year period. The year-over-year decline in avocado revenue was due to receipt of crop insurance proceeds in the fourth quarter of 2019. The company recognized $500,000 of orange revenue in the fourth quarter of fiscal year 2020, compared to $2.1 million in the same period of fiscal year 2019, attributable to lower brokered fruit sales. Specialty citrus and other crop revenue were $2 million in the fourth quarter of fiscal year 2020, compared to $2.1 million in the fourth quarter of fiscal year 2019.

[Harold Edwards:]

Thank you, Mark. The recent increase in the COVID-19 pandemic affected our domestic and export pricing during the back half of the fourth quarter of fiscal year 2020 and we expect it to continue to create uncertainty on global pricing for the near term. Until this uncertainty dissipates, we are not going to provide guidance regarding our lemon volume right now. Offsetting some of this uncertainty, we do expect to generate strong orange and avocado revenue in fiscal year 2021, based on early market factors and initial crop indicators. We also have an additional 1,200 acres of non-bearing lemons estimated to become full bearing over the next four years, which will enable us to achieve strong organic growth for the many years to come. The company expects 200 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 that we believe will further build our long term pipeline of productive acreage. We anticipate this additional acreage will increase domestic supply of lemons from our 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. Also, due to more clarity in the development of harvest at Limoneira, we believe we will generate cash distributions from harvest as follows. Fiscal year 2021 is expected to be neutral. Fiscal 2022 is expected to generate $3 million of cash to Limoneira. Fiscal year 2023 is expected to generate $15 million. Fiscal year 2024 is expected to generate $27 million. Fiscal year 2025 is expected to generate $25 million. And 2026 is expected to generate $10 million. This will be about $80 million of cash back to Limoneira in the next six years. These expectations from harvest do not include the potential upside from increased density in the housing at harvest as well as the potential opportunity of a medical campus in our East Area 2 development. We expect to be in a position to provide greater transparency on these opportunities later this year.

[Operator:]

. Our first question comes from Ben Bienvenu with Stephens.

[Ben Bienvenu:]

Hi Harold. Hi Mark. How are you all?

[Harold Edwards:]

Hi Ben.

[Mark Palamountain:]

Hi Ben.

[Ben Bienvenu:]

Thanks for the additional color around harvest. I wanted to ask, as it relates to the projected distribution that you gave and the comments that you made around the potential hospital development in East Area 2. Is the East Area 2 project solely a function of that potential hospital development? Or could you build out that real estate ownership parcel as well exclusive of the hospital opportunity? And if you did, would that impact the projected distribution that you have laid out here from East Area 1 for the net payout or distribution?

[Harold Edwards:]

Certainly. So I will answer the last part of the question first. So this is all incremental above the comments we made about the distributions from harvest. So this is all on top of that. So essentially the East Area 2 property is 38 acres and it has been zoned and was historically zoned and targeted to become complementary commercial property for the residential piece in harvest. And with the changes that we are all observing in retail and big-box retail, the likelihood of seeing that property convert into a retail development has decreased significantly since we first began the project. The city of Santa Paula was looking forward to receiving tax benefits, sales tax benefits, from that retail. So they actually approached us on converting the focus into solving a problem that the community has, in that they have a community-based hospital which is today based up on the hill in Downtown Santa Paula. And for seismic reasons, it needs to be completely rebuilt by the year 2030. They were approached by the Ventura County Health Care Agency that currently operates our hospital about the potential of relocating the hospital and then developing medical office that would house three of the existing clinics that the Health Care Agency runs in town to a new medical office building and then complement that with a skilled nursing facility and then eventually assisted living. And so there is a vision for that campus and there is a demand for that campus. And so, Limoneira has made a nonbinding commitment to work very closely with the developer and the Health Care Agency in structuring a transaction where Limoneira would sell the ground to the developer who would then build the buildings and that would eventually become a hospital, a medical office building, skilled nursing and assisted living. To go back to the first part of your question though, the East Area 2 development will also retain additional land that could be used for complementary commercial purposes. And we also have the opportunity to tuck-in some additional residential for sale or residential for rent housing on the property as well. So as that development takes shape, we will be able to give much more granularity to the actual components of the East Area 2 project and will most likely include the hospital campus concept that I just laid out, but also complementary commercial and high density, multifamily housing. And then there is also some recent commentary from the county and the local press that we can show you just that really highlights their intent to make this project work. So it's a pretty opportunity.

[Ben Bienvenu:]

Okay. Great. So this is East Area 1. If you do begin to develop East Area 2 and the JV needs cash, maybe these numbers change. But that's all incremental relative to this, if I distill your comments down?

[Harold Edwards:]

Yes, exactly. So the East Area 2 has nothing to do with the partnership in harvest. And so today, it's 39 acres of commercially zoned property owned by the Limoneira Company that most likely the way we would transact that development would be to actually sell the land and monetize it upfront that would bring incremental benefits back to Limoneira.

[Ben Bienvenu:]

Okay. That's great color and this is a nice update. Thanks. On the pricing in 4Q and Harold, your commentary around export markets continuing to impact the first quarter, two questions. One, is the export market impact also, is that hinged to the COVID recovery globally, more broadly? And then two, your realized price in the fourth quarter for lemons relative to the market price for, say, choice 115s? Was that a function of the winds impact that you mentioned? And will not have any residual impact as we head into 2021?

[Harold Edwards:]

Those are great questions. So the export markets will be just tied directly to, I assume, the distribution of the vaccine and the reopening of foodservice venues, restaurants and bars around the world. And towards the beginning of the first quarter, we saw export markets begin to reappear and for a period of time, we were doing almost pre-COVID levels of shipments to our Japanese and to our Korean partners, but towards the second part of the first quarter this year, we have seen those pull back again. So just like, we are reading about around the world and around the United States, you are seeing situations of opening and then reclosing, opening and reclosing which gives us moment to pause about sort of how to predict the rest of the year. With that being said, though, the winds that were mentioned in our earlier remarks did have a negative impact on pricing. This season, as we start this new year, we have a much better distribution of grades throughout each of the growing districts, in District 3, District 1 and District 2 and a much higher percentage of first grade fruit. So we expect that that will have a very positive impact on overall pricing in fiscal year 2021.

[Ben Bienvenu:]

Okay. Thank you very much. Best of luck guys.

[Harold Edwards:]

Great. Thanks, Ben.

[Operator:]

And our next question comes from Gerry Sweeney with ROTH Capital.

[Gerry Sweeney:]

Good morning guys. I am sorry, good afternoon. Thanks for taking my call.

[Harold Edwards:]

Hi Gerry.

[Gerry Sweeney:]

I wanted to dig a little deeper just on supply and demand. Obviously, export and foodservice are headwinds. But I think the deeper question I wanted to get at would be, is there an oversupply of plantings or acreage today even if there's headwinds in the export and foodservice decline rectify themselves? In other words, even if we get past COVID, is there a chance of these record volumes continuing still seeing some price compression?

[Harold Edwards:]

So that's a great question, Gerry. And certainly, with the impact that we have today of COVID-related foodservice closures, it is oversupplied. Once we get COVID behind us and we can get back to the emerging market development and growth of those markets and consumption and demand growth, we believe that we are properly supplied. The part of that question that is somewhat complicated is because of the different growing regions and the timing of the production in those areas, there will be times when we are oversupplied and times when we are properly supplied on a global basis and times when we are even undersupplied. So really looking at the seasonality of the production, the age of the blocks in the productivity and then looking forward at the plantings that are out there, the non-bearing acreage is coming online, but then anticipating the acreage that's going to come out, producers have a tendency to, if you go, so this is the second year in a row of California lemon production that has not been profitable for lemon producers in California. So we are beginning to see some of that acreage pull out. We also know that Argentina, it's projected to have a 30% decrease in its total production of fresh lemons this coming year due to a drought that they have experienced there. So there are factors out there on a global basis that give us reason to believe that once we get beyond COVID and once we get back to pre-COVID demand levels and we return to global consumption and demand growth that we are properly supplied. But it's a great question and when we look at the total acreage that are planted right now, there is about two or three months that look like towards the back half of the summer that are oversupplied and we will just have to continue to monitor that as the economy recovers and as restaurants and bars reopen around the world.

[Gerry Sweeney:]

Got it. And as you expand production globally, you have South American production, is there an ability to store some of the lemons and maybe even out some of your shipping and exporting activities maybe balance out some of that unevenness?

[Harold Edwards:]

So the really great part about our Chilean investments is that almost all of that production can be consumed normally profitably within the Chilean market. So it does not necessarily have to find and export home. Argentina is different. They don't have the consumption nor the demand to absorb that. But to go back to the Argentina production, a lot of that acreage and a lot of that production targets the European markets. And that gives us a great purge valve in the situation when the United States is oversupplied or there is too much fruit in the market. So we are constantly looking at global markets and the best opportunities from each of the production sources to find out what the optimal way to move that fruit around is to maximize its value.

[Mark Palamountain:]

And Gerry, as an example, now we were actually exporting, starting here pretty soon into or importing into Chile where their summertime lemon starts to fall off, they start seeing better prices and we are able to send some of our choices and lemons down that way. So it works both ways.

[Gerry Sweeney:]

Got it. Thanks. That's it for me. I appreciate it and I appreciate the clarity at the harvest at Limoneira and the cash flows. So, thank you.

[Harold Edwards:]

Great. Thank you Gerry.

[Operator:]

And our next question is from Vincent Anderson with Stifel.

[Vincent Anderson:]

Yes. Thanks. Good afternoon guys.

[Harold Edwards:]

Hi Vince.

[Mark Palamountain:]

Hi Vince.

[Vincent Anderson:]

So, I appreciate you confirming the drought in Argentina. I heard there might be some cost issues down there as well. So one, have you escaped that? Or is that impacting your production as well? And then, you talked about Europe being an important exit valve but has Argentina regained access to the European market yet?

[Harold Edwards:]

So, the first part of your question about our production. So the great news for us, for Argentina, is that our primary production is north of Tucuman. And Tucuman is the province where the majority of lemons are produced. That is the area that's experiencing the significant drought. And so that area is up to 30% off. But we are actually producing in the province of Jujuy, which is the furthest northern most province in the country of Argentina. And we have not been impacted by the drought. And our production actually looks to be up in this coming year. So we believe that's a very good thing. And when we talk about the European market, really Central and Eastern Europe is where we move most of our fruit today. So were are able to move that fruit even though there are issues today, as you as you mentioned, in Western Europe.

[Vincent Anderson:]

Got it. Prefect. Thank you. And then if we were to kind of throw a worst-case scenario on foodservice demand this year. Maybe if you could talk about how you did in the fourth quarter in terms of adding more grocery sales? Obviously, a bigger export quarter is going to be tough to say. But if we see a slow recovery in foodservice, one, how could 2021 look versus 2020 on a fresh utilization rate just from the progress you made that? And how flexible can you be this year in terms of letting fruit size up a bit more to penetrate grocery better?

[Harold Edwards:]

That's a great question. And so, the thing that really hit us the hardest last year in 2020 was the oversupply of the second grade, the choice lemons, which predominantly -- mostly finds its way into foodservice. So a couple of things that are good news for us coming into 2021 are, first of all, last year because of the heavy winds that we mentioned, the percentage of first grade fancy fruit felt to 20% where normally that would be around 40% to 50%. In 2021, we are back to normal and we are sort of in that 40% to 50% of first grade fruit which means that if we can get the proper sizing on that fruit, it will be much easier for us to move into retail customers and at higher value. So that's a great thing for us this year. The other thing that happened to us last year as we came into March, April, May and June, which is our District 2 coastal crop, we had a situation where our juice partner, so if we can't sell it fresh, we sell the balance of that production for juice and products. Our juice partner had a market outlook that was predominantly foodservice. And so, when that juice partner was unable to sell the majority of what we are taking them. They closed that plant. We pivoted over to sell it to another plant that was supplied by our competitor and we were shut out of that. And so, the reality for us on the utilization was very negative because we lost that juice outlet for a period of time. That has now been completely restored as our juice partner has been able to find outlets at retail that have been great. So in the event that we don't get the foodservice business back as quickly as we would like this next year, our pivot over to retail, our partnership with a juicer that has retail outlets for the juice bodes much better for our total utilization in this next year. And we have made great progress with specific retail customers, Costco being the biggest success for us. Picking up a big part of the national business for Costco but also H-E-B in Texas and Wakefern on the East Coast. The one risk factor that I will point to though is that California is well below, throughout the state, its normal levels of rainfall. And the rainfall is what we depend on to get proper sizing of our fruit throughout each of our growing areas. And if we don't get the rain and we don't get the size, it will be difficult for us to move the crop in an orderly way because there is only so much market for that smaller pieces of fruit. So our strategy is to actually stretch our seasons out to give the trees a greater chance for growing the normal sizes that we sell and the grades that we want to sell to the market. And while that may add a little bit more cost, it will give us a much better opportunity to have the sizes that the market and the customers want.

[Vincent Anderson:]

That is perfect. Thank you. So, I guess kind of a quick housekeeping question. Those 200 acres you are bringing on this year, it looks like you might be netting them against some old acres you are pulling. And if so, is there a measurable net fresh carton impact that we should be modeling to? Or it would kind of just be negligible for the first year or so?

[Harold Edwards:]

So there is a lot of moving pieces that are part of that, the answer to that question. But the way to think about it, Vince, is District 3 is 30% lower in total tree crop for the industry and for us. District 1, where we are now up in the San Joaquin Valley, is 15% lower than it was a year ago for everybody and us. But the acreage that's coming online is up in District 1. So our total sales in District 1 should be about the same because of those 200 acres of fruit trees are now bearing. And then as we come down to District 2 on the Coast, it's still little too early to talk about the crop size. We still do not see enough of it to know. So our assumption is that it's going to be similar to last year and only with a higher percentage of fancy grade fruit because we are able to see that coming online now. So it will come down to the size. And if we can get that rain and get that extra size, that will be the difference maker and really us that volume confidence later in the year.

[Vincent Anderson:]

All right. Excellent. Thanks again guys. Good luck this year.

[Harold Edwards:]

Thanks Vince.

[Operator:]

And our next question is from Ben Klieve with National Securities Corporation.

[Ben Klieve:]

All right. Thanks for taking my questions. First one here. And Harold, you kind of alluded to this in your prior answer, but I am wondering if you could elaborate a bit more on how you are looking at managing inventory in coming months and quarters in the event that the foodservice industry really does pick up? I mean, to what extent are you going to leave fruit on the trees for a bit longer, leave fruit that's already been processed for a little bit longer with the hope of getting better pricing as foodservice opens up? Or is that really not something that you are going to mess around with too much?

[Harold Edwards:]

That's a great question, Ben. And that is sort of the nature of our business. So the sales team have done a really good job getting in front of what we see from each of our growing districts and what we know we have and we think we have and setting up contracts with retail customers that are allowing us to sort of anticipate demand and anticipate sales. And I guess the good news is, because we are behind the rainfall and the fruit is growing more slowly, we are inventorying a lot of this fruit just on the tree naturally and letting mother nature do her thing and not having to pull it off the tree and then put into storage, which creates more risk because if you put it in storage, you lose a customer or are unable to sell it then you have to dump it or send it to the juice plant at much lower values. So our strategy is just to keep monitoring on a day-to-day basis in weekly and monthly the sizing of the fruit and then let mother nature determine when the optimal time for us to harvest and really do as good a job as we think we can keeping it out of our cold storage, because once you put all the cost into that fruit and you put into it into storage, if you aren't able to sell it, it's the double negative getting much lower value because it goes to the juice plant but also you got all the cost in that fruit. Whereas if we knew later on in the season that we weren't going to be able to find a home for that fruit, we won't put the cost in it but we will actually just send it straight to the juice plant. And the combination of all those things have a huge factor in what we call our fresh utilization. Our net result of fresh utilization in 2020 were 60%. And it was really just because in the summer months, which is really March, April and May, so spring and summer when COVID impacted us so negatively and then we had that juice plant challenge, we suffered much lower utilization than we would have anticipated. So as we look forward on a go-forward basis into 2021, we know that we are going to be challenged at some level with the closure of foodservice. So we are pivoting to retail and working as diligently as we can to find export market opportunities for a lot of that fruit while meanwhile focusing in on the type of quickserve restaurants that are still doing pretty good business with their drive-throughs and their take-out and really attacking that part of the market. And the combination of all of those things should improve our fresh utilization and should overall improve our pricing. We are being careful with guidance just because we are were just unsure the magnitude of the demand reduction because of foodservice and export and also how quickly or slowly we will see the return of foodservice business.

[Ben Klieve:]

Got it. Very interesting. Well, it's tricky to navigate, but best of luck as you do so. My other question here is regarding water rights. I am hoping you can just kind of provide a general update on how you are looking at water rights over the next year and in particular in the context of, like you said, a dry year so far in California and an even drier year in the Colorado River Basin. The current weather impact, how you are thinking about those at all? And any updates from a big picture would be appreciated.

[Harold Edwards:]

Happy to talk about water. I think the thing that's happened since the last time we spoke is that water became a futures market has been developed in the capital markets for water and water is now beginning to be actively publicly traded, which is interesting. So as your question sort of implied, as there's scarcity, there also becomes more value with water and water rights. And so as it relates to all of our assets and our deployment of water, our primary focus right now is using the majority of our water assets to basically monetize our agricultural production and to support our agricultural operations. With that being said, though, as you go around the portfolio of investments that we have and the land and water that we have access to, we do have surplus water in certain areas. And one area of value where we are working very hard to find ways to monetize that water is our Class 3 Colorado River water rights. We have a partnership with a private equity group that has a water focus on monetizing those assets. Nothing to really report in terms of being able to speak specifically about any transactions that relates to that 12,000 acre feet of water that we have. But we are working to try to find potential buyers of that water and to structure the monetization of those water rights. As it relates to our Santa Paula basin pumping rights, right now those pumping rights are being used for our farming operations. But there is also a demand and supply imbalance where there is more demand and supply of that water. And eventually some of that will begin to monetize. We just haven't found that the right time to do that is now. But we are exploring those opportunities and waiting to put the first transactions on the board. At this point though, we don't have anything that's imminent. So as it relates to 2021, we are probably not going to experience much water monetization other than providing surplus pumping rights that we will sell agriculturally, but won't have a significant financial return in 2021 as it relates to monetizing some of those assets and those water rights.

[Ben Klieve:]

Got it. Perfect. Well, I appreciate the color on both of those. I think that does it for me. That's a lot coming up here in coming quarters and I will jump back in queue.

[Harold Edwards:]

Thank you, Ben.

[Mark Palamountain:]

Thank you.

[Operator:]

And our next question comes from Mark Smith with Lake Street Capital Markets.

[Mark Smith:]

Hi guys. First question for me is, just any other insight into changing consumer trends within grocery retail? And additionally, you already talked about some of the new partners that you added during the quarter and anybody else to maybe discuss or kind of your long term prospects with some of these new partners?

[Harold Edwards:]

We tried to allude it in the comments that we made earlier, but I guess the exciting thing that we are experiencing is, pre-COVID we were 70% sales to foodservice customers and 30% to retail. And when COVID hit, we were forced to pivot over to retail. And so that's sort of translating to approximately 50/50. And we have made some great progress with some great new retail customers. And we are seeing much stronger demand at retail once COVID hit than we saw pre-COVID. And so I guess the hope that we have is, as our sales team is out there with sort of uncertainty about total foodservice demand, there is a much stronger focus on retail penetration and there's some really exciting new accounts that the sales team have contracted and set up some business for the coming months with some new customers for us. But I guess the hope here and it's more of what we suspect, we suspect that as restaurants and bars and foodservice gradually begins to recover based on vaccination and restaurants and bars reopening around the country that we will see continued high levels of demand at retail, but also now new found demand at foodservice as it begins to recover and that total demand and total consumption will actually be up once we get past the pandemic. And that's sort of what we are anticipating coming just because of the way that consumers are behaving today doing a lot more in-home cooking and shopping at grocery stores.

[Mark Palamountain:]

And Mark, if I might add, our thesis of still chasing after QSRs and fresh lemonade, we are very focused on that. Obviously, that gets our lowest grade fruit the highest possible value. So one of our bigger customer Raising Cane's, the chicken QSR out of the South, expanding. I think they are over 500 stores now. And we pick up one or two more of those that we are focused on. It really helps with that balance of that lower grade multiple size fruit. So again, that will be a focus for us.

[Mark Smith:]

Okay. The only other question for me is just really looking at the profitability. Can you just talk about labor pressure as you look at this new year? Anything else that you are seeing that may be impacting costs? And then really just how we improve the profitability here, especially if we stay in an environment with low commodity prices?

[Harold Edwards:]

Yes. The biggest impact to our profitability and it's the second year in a row, but for completely different reasons we have been challenged, is our fresh utilization. If we are able to produce a normal percentage of first grade fruit and have good demand for that first grade fruit, find good demand for the second grade fruit and sell that third grade fruit at a percentage that would allow us to get our fresh utilization above 70%, which by the way, historically was always what we did, then that drives our cost down to a level to restore significant profitability. We spent a lot of time talking about demand destruction because of the pandemic and the loss of foodservice and then the oversupply that that's created and then the commodity impact on total pricing has been very negative. But we believe that with the pivot to retail, our ability to have a much higher percentage of first grade fruit that we will probably find ourselves in, call it and this is speculative, but a $20 average price per carton worst-case, if we sort of see this slow recovery of foodservice. And with foodservice coming back, but if we can get utilization back to the 70% to 75% level, given the realities of our cost environment, we should be able to return our cost to, call it, $15 a carton and restore profitability. And that's the laser beam focus that we have right now. And through the first, almost first quarter of the year we are achieving those levels. The real challenge for us is going to come when we see the big volumes in the big shipment months of March, April and May. But if we can get through those months with above 70% fresh utilization, then we will restore the profitability of the business and drive the cost down to a level that will allow us to achieve good profitability.

[Mark Smith:]

Okay. Great. Thank you.

[Operator:]

Ladies and gentlemen, we have reached the end of question-and-answer session. I would like to turn the call back over to Mr. Harold Edwards for closing remarks. Thank you.

[Harold Edwards:]

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

[Operator:]

This concludes tonight's webinar. You may disconnect your lines at this time. Thank you for your participation. Have a good evening.