LMNR - NASDAQ

Greetings, and welcome to the Limoneira's Fourth Quarter Fiscal Year 2024 Financial Results 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. It is now my pleasure to introduce your host John Mills with ICR. Thank you. You may begin.

Good afternoon, everyone, and thank you for joining us for Limoneira's fourth quarter and fiscal year 2024 conference call. On the call today are Harold Edwards, President and Chief Executive Officer, and Mark Palamountain, Evecutive Vice President, and Chief Financial Officer. By now, everyone should have access to the fourth quarter fiscal year 2024 earnings release, which went out today at approximately 4:00 p.m. Eastern time. If you've not had a chance to review 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 from the results, performance or achievements expressed or implied by such forward-looking statements. Important factors that could cause or contribute to such differences including risk detailed in the company's Form 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 as a result of new information, future events or otherwise. 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 include adjusted EBITDA and adjusted diluted earnings per share, which are non-GAAP financial measures. A reconciliation of adjusted EBITDA and adjusted diluted EPS to the most directly comparable GAAP financial measures are included in the company's press release, which has been posted to our website. And with that, it is my pleasure to turn the call over to the company's President and CEO, Mr. Harold Edwards.

Thanks John and good afternoon everyone. We're extremely pleased with our fourth quarter and full fiscal year 2024 results. For the full-year net revenue grew 6% to a record $191.5 million and adjusted EBITDA was $26.7 million, compared to a loss of $224,000 for fiscal year 2023. We achieved avocado and lemon volume guidance for the year. In fact, the 15.1 million pounds of avocados sold in fiscal year 2024 was the most volume sold in almost 15-years. These overall results demonstrate the strength of our agricultural platform and validate our strategic decision to expand our avocado production by 1,000 acres through fiscal year 2027, which is expected to drive significant EBITDA growth. In addition, our lemon offering is achieving increased penetration in the food service and quick service restaurant channels, and we expect more meaningful market penetration in fiscal year 2025. Our agricultural success combined with a compelling portfolio of real estate assets, valuable water resources, and a strong balance sheet create multiple potential pathways to build lasting stockholder value. As an example, our residential joint venture with the Lewis Group of Companies for the Harvest Real Estate Development Project continues to perform very well, and we anticipate meaningful water monetization transactions in fiscal year 2025. In addition, we continue to explore strategic alternatives for our assets and are very pleased with the interest. We remain committed to thoroughly exploring all options to maximize stockholder value, and we'll provide updates if the board of directors find that further disclosure is necessary or advisable. In fiscal year 2024, we achieved two significant real estate milestones. First, in April, our joint venture with Lewis closed on lot sales representing 554 residential units, thus completing the sellout of Phase II of the development, a total of 1,261 residential units have closed from the project's inception. Second, in May, we announced the Santa Paula City Council approved the joint venture's proposal to increase the total number of residential units for the project from 1,500 to 2,050 units. The 550 unit increase will provide 250 additional single-family, four-sale home sites within Phase III of harvest. A separate joint venture with Lewis plans to construct 300 multifamily rental homes on a mixed-use portion of the project. This is a 37% increase in dwelling units, unlocking further value creation opportunities. Based on these events and the expected continued increase in land value associated with this project, we increased our cash flow projections by 46% in June and expect to receive $180 million in total proceeds spread out over seven fiscal years with $15 million received this year. In addition, in December of 2024, we received approval from the Federal Emergency Management Agency or FEMA, to revise a flood zone map area effective May 15, 2025 that significantly reduces the number of property owners that are required to pay flood insurance within East Area 1, East Area 2 and other real estate within the flood zone area West of Santa Paula Creek. Within East Area 1, approximately 1,100 existing and future residents will not be subject to mandatory flood insurance due to the revised flood zone map. It has been a time of intensive process as we have been working with various public agencies since 2020 to correct the FEMA flood zone insurance rate map. Revising the flood zone map is expected to improve future interest in residential and in commercial real estate in these zones, as it removes the concern of flooding and the cost of mandatory flood insurance. Turning to our balance sheet, our net debt as of October 31 2024, was $37.6 million. Additionally, our 50-50 real estate development joint venture had $66.9 million of cash and cash equivalents as of October 31, 2024, of which 50% is approximately $33.5 million. The joint venture currently has no debt. We consider this approximately $33.5 million as an offset to our net debt position of $37.6 million. Now to provide a quick update on a decision to evaluate strategic alternatives for the overall business. Today, we consider ourselves to be a very strong financial position, having recently reduced our net debt position and right-sized the balance sheet through our ongoing strategic shift towards an asset lighter business model and with stronger cash flow projections from Harvest at Limoneira. Since announcing our exploration of strategic alternatives, we have received significant interest and are diligently working with our advisors to evaluate these potential opportunities. We remain committed to thoroughly exploring all options to maximize stockholder value, and will provide updates if the board of directors find that further disclosure is necessary or advisable. Even after the recent non-strategic asset sales over the past 1.5 years, we continue to manage approximately 10,500 acres of land with approximately 21,000 acre feet of owned water. Usage and pumping rights represent tremendous long-term value growth opportunities from our assets. You can see by our improvement in agri business operating income during the fourth quarter and full year, our transition to an asset-light or business model and focus on the best use of our assets to enhance stockholder value is having a positive effect. We removed our pension obligation, achieved our significantly increased volume guidance for fiscal year 2024, and are monetizing water through a following program with the Yuma Mesa Irrigation and Drainage Ditch. And with that, I'll now turn the call over to Mark.

Thank you, Harold, and good afternoon, everyone. To best gauge our performance, we encourage viewing our business on an annual basis given our natural seasonality, with Q2 and Q3 historically stronger and Q1 and Q4 more moderate. For the fourth quarter of fiscal year 2024, total net revenue increased 6% to $43.9 million, compared to total net revenue of $41.4 million in the fourth quarter of the previous fiscal year. Agribusiness revenue was $42.5 million, compared to $40.1 million in the fourth quarter last year. Other operations revenue was $1.4 million in the fourth quarter of fiscal year 2024, compared to $1.3 million in the fourth quarter last year. Agribusiness revenue for the fourth quarter of fiscal year 2024 includes $8.4 million in fresh packed lemon sales, compared to $11.3 million during the same period of fiscal year 2023. Approximately 470,000 cartons of U.S. packed fresh lemons were sold during the fourth quarter of fiscal year 2024 at a $17.95 average price per carton, compared to 550, 000 cartons sold at a $20.39 average price per carton during the fourth quarter of fiscal year 2023. During the fourth quarter of fiscal year 2024, our lemon volume was impacted by lower fresh utilization rates due to weather-driven events, coupled with a delayed start to the desert region harvest period. Brokered lemons and other lemon sales were $14.6 million and $13.2 million in the fourth quarter of fiscal years 2024 and 2023 respectively, representing 11% growth year-over-year. The company recognized $8.9 million of avocado revenue in the fourth quarter of fiscal year 2024, compared to no avocado revenue in the fourth quarter of fiscal year 2023, due to the biannual nature of this fruit. Approximately 4.6 million pounds of avocados were sold in aggregate during the fourth quarter of fiscal year 2024 at a $1.92 average price per pound. The company recognized $1.7 million of orange revenues in the fourth quarter of fiscal year 2024, compared to $1.9 million in the fourth quarter of fiscal year 2023. Approximately 91,000 cartons of oranges were sold during the fourth quarter of fiscal year 2024 at an average of $18.99 price per carton, compared to approximately 69,000 cartons sold at a $28.32 average price per carton during the fourth quarter of fiscal year 2023. As a reminder, the company opportunistically has buy-sell arrangements for orange orders with our retail and food service customers to complement our lemon sales. Specialty citrus and other crop revenue was $3.6 million in the fourth quarter of fiscal year 2024, compared to $6.5 million in the fourth quarter of fiscal year ‘23. The decrease was primarily due to decreased volume of specialty citrus sold and decreased wine grape revenue. During the fourth quarters of fiscal year 2024 and 2023, approximately 8,000 and 75,000 40-pound carton equivalents were sold at an average price of $42.63 and fixed $32.64 respectively. Wine grape revenues were $2.3 million in the fourth quarter of fiscal year 2024, compared to $2.9 million in the same period of fiscal year 2023. Farm management revenues were $2.9 million in the fourth quarter of fiscal year 2024, compared to $3.1 million in the same period of fiscal year 2023 on similar acreage. Total costs and expenses for the fourth quarter of fiscal year 2024 were $46.6 million, compared to $51.1 million in the fourth quarter of last year. Operating loss for the fourth quarter of fiscal year 2024 was $2.8 million, compared to an operating loss of $9.7 million in the fourth quarter of the previous fiscal year. Net loss applicable to common stock after preferred dividends for the fourth quarter of fiscal year 2024 was $2 million, compared to a net loss applicable to common stock of $3.6 million in the fourth quarter of fiscal year 2023. Net loss per diluted share for the fourth quarter of fiscal year 2024 was $0.11, compared to a net loss per diluted share of $0.20 for the same period of fiscal year 2023. Adjusted net loss for diluted earnings per share for the fourth quarter of fiscal year 2024 was $1.6 million, compared to $2.6 million in the same period of fiscal year 2023. Adjusted net loss per diluted share for the fourth quarter of fiscal year 2024 was $0.09, compared to adjusted net loss per diluted share of $0.15 for the fourth quarter of fiscal year 2023. A reconciliation of net loss or income attributable to Limoneira Company to adjusted net loss or income for diluted earnings per share is provided at the end of our earnings release. Adjusted EBITDA for the fourth quarter of fiscal year 2024 was $1.2 million, compared to a loss of $1.3 million in the same period of fiscal year 2023. A reconciliation of net loss or income attributable to Limoneira Company to adjusted EBITDA is also provided at the end of our earnings release. For the fiscal year ended October 31, 2024, total net revenue was $191.5 million, compared to $179.9 million last year, primarily driven by record avocado sales. Operating loss for fiscal year 2024 was $6.2 million, compared to operating income of $10.8 million last year, primarily due to the net gain on disposal of assets. Net income applicable to common stock after preferred dividends was $7.2 million for fiscal year 2024, compared to $8.9 million for fiscal year 2023. Net income per diluted share for fiscal year 2024 was $0.40, compared to net income per diluted share of $0.50 in fiscal year 2023. For fiscal year 2024, adjusted net income per diluted earnings per share was $11 million, compared to an adjusted net loss per diluted earnings per share of $7.6 million for fiscal year 2023. Adjusted net income per diluted share for fiscal year 2024 was $0.62, compared to an adjusted net loss per diluted share of $0.43 for fiscal year 2023, based on approximately 17.7 million and 17.6 million weighted average diluted common shares outstanding respectively. The effective tax rates for fiscal year 2024 and 2023 were 37.9% and 31.8% respectively. For fiscal year 2024, adjusted EBITDA was $26.7 million, compared to a loss of $224,000 for fiscal year 2023. Turning now to our balance sheet and liquidity, in the first quarter of last year, we sold our Northern properties, which resulted in total net proceeds of $98.4 million. The proceeds were used to pay down all of our domestic debt except the Ag West Farm Credit $40 million non-revolving line of credit, which has a fixed interest rate of 3.57% until July 1, 2025. Long-term debt as of October 31, 2024 was $40 million compared to $40.6 million at the end of fiscal year 2023. Debt levels as of October 31, 2024, minus $3 million of cash on hand, resulted in a net debt position of $37.6 million at the end of fiscal year 2024. Our 50-50 real estate development joint venture had $66.9 million of cash and cash equivalents on hand as of October 31, 2024, of which 50% or $33.5 million is approximately Limoneira. The joint venture currently has no debt. We consider this approximately $33.5 million as an offset to our net debt position of $37.6 million. Furthermore, with the closure of the additional 554 residential home sites in April, the joint venture distributed $30 million in June and Limoneira received $15 million in cash proceeds. This additional liquidity source from our joint venture partnership provides further financial flexibility. Now I'd like to turn the call back to Harold to discuss our fiscal year 2025 outlook and longer term growth pipelines.

Thanks, Mark. We expect fresh lemon volumes to be in the range of 5 million to 5.5 million cartons for fiscal year 2025 and expect avocado volumes to be in the range of 7 million to 8 million pounds for fiscal year 2025. In addition, we now expect to receive total proceeds of $180 million from harvest LLCB II and LLC and East Area 2 spread out over seven fiscal years with $15 million received in fiscal year 2024. Looking ahead, we continue to see a strong EBITDA outlook underpinned by plans to expand avocado production by 1,000 acres through fiscal year 2027 to capitalize on robust consumer demand trends. During this transition, the company expects fiscal year 2025 avocado volume to be lower, compared to fiscal year 2024, due to the alternate bearing nature of avocado trees. These operational results do not take into account anticipated additional gains from asset monetization. Operator will now open the call to questions.

Thank you. We'll now be conducting a question-and-answer session. [Operator Instructions] Thank you. Our first question is from Ben Klieve with Lake Street Capital Markets. Please proceed with your question.

Thanks for taking my questions and congratulations on a really good year here. First, I have a couple of questions around the water monetization efforts. First of all, you characterized the events that you anticipate coming in fiscal ‘25 as being meaningful? And I'm wondering relative to the following events, which were certainly appropriate and accretive, would you characterize those following events to have been meaningful as well? I'm just trying to get kind of a relative scale of you know, what we can expect here in fiscal ‘25.

Yes. So first of all, good to talk to you, Ben. So we believe that the following program for the Colorado River will be extended for another 25-years with new terms defined in 2025, but enacted in 2026. So the new water monetization from the Colorado River Water Rights won't take place in 2025. We do expect there will be meaningful water monetization from the Santa Paula water basin and meaningful from the standpoint that as we have continued to create and accumulate surplus water shares in that basin, we'll be able to demonstrate some of our first transactions in that basin at meaningful values that will, I think, help us better point to the definition of the significant value that exists in those Santa Paula Basin pumping rights.

Got it. Thank you. Harold, can you remind us what the relative value of an acre for the water in the Colorado River versus Santa Paula Basin is?

Well they're very different. So the following program right now on the Colorado River allows us to fallow half of our productive land there. So right now we have 600 acres that are fallowed. The Bureau of Reclamation grants us 5.5 acre feet of water to fallow per acre that we've fallowed and we get paid $400 an acre foot, which generates about $1.3 million of value for us and for not taking that water there. So that's really the economics of those interests. In the Santa Paula basin, as we've accumulated surplus water rights in that basin. We're finding the opportunities to begin to monetize some of those rights for urban needs surrounding us. And when we announce the transactions, we'll be able to announce the terms of those sales, but they are significant and actually significantly more valuable than the Colorado River water rights.

Right. Okay. Very good. Thank you. We'll stay tuned for more information there. And then, kind of a big picture question on this dynamic is the -- I'm wondering kind of the status of the regulatory environment as it pertains to these water assets. I mean, is the -- are there any barriers in place today or events coming soon that you think may be a catalyst for a monetization effort either via the Colorado River compact or some other regulatory agency or state or local? Anything like that, that we should have our ears open to?

Well, I think the Department of Interior and their management arm of the Bureau of Reclamation have mandated that one-third of the consumptive use be cut off the Colorado River. And as you've probably been reading, the number -- the numerous states that derive benefit from the Colorado River have been sort of fighting, not the right word, but negotiating on who's going to cut what. We believe that one of the biggest needs of actual water for urban development and urban needs exists in Arizona, because of the Central Arizona Project, which is all the housing from Scottsdale and Phoenix all the way down to Tucson, but also Lake Mead which is a primary feeder of Las Vegas and its water. We believe that, that water will be necessary to divert from agricultural uses at some level anyways into meeting the urban demands and needs. And so therefore we believe that our Class 3 Colorado River rights will be in perfect position to take advantage of those following programs. So, and that new 25-year accord needs to be set and begun on the river beginning in 2026. So we believe that as administrations change right now, there'll be a big focus on putting that next 25-year accord onto the Colorado River. And I would keep our eye to your question on those negotiations and the deal that's actually cut on the river that's going to add up to a third of the consumptive use being cut.

Got it. Very good, a lot going on here. Well, we'll stay tuned for more news there. One question for me on the agribusiness front, and then I'll get back in queue, is around the fresh lemon targets here for ‘25. So you're targeting 5 million to 5.5 million cartons, which you know nice you know 10% or so step up from where you were this year, but I think that was on lower utilization? So can you talk about what is embedded in that 5 million to 5.5 million in terms of an improvement in the utilization rate, more volume coming in from third-party growers, and the other big drivers here to get to that 5 million to 5.5 million carton figure?

Yes, you bet Ben. Nice talking to you. So a couple things, so as we finished this year, we had all of Mother Nature's normal challenges that we -- from heat in the wrong times to cold in the wrong times to wind. And so our fresh utilization was hovering near or at 70% for the year. And so when we get down to those levels, our unit costs obviously go up. You're only selling seven out of every 10 lemons. And so as we look at this year, and we mentioned our penetration into more quick service restaurants and food service restaurants, it gives us an opportunity to sell that standard lemon a little bit easier, which does two things. It helps fresh utilization. So if we can get up into the 80% range by selling more quick serve, it'll bring down our average overall price, but our gross net dollars back to the grower and ourselves goes up. And so that's what we're seeing. We're gaining most of our volume through recruiting. We've recruited about over 0.5 million cartons so far this year. And as you know, we have our pivot from avocados, or excuse me, lemons into avocados and are planting a 1,000 acres of avocados. So some of our lemons will be coming out over time, but the goal is still to get somewhere between 20% and 25% of our own fruit owned and then the balance of those 5 million to 5.5 million cartons will be outside growers.

Got it. Very good. All right. Well, I appreciate you guys taking my questions. That does it for me, I'll get back in queue.

Thanks, Ben.

Great. Thank you.

Thank you. Our next question is from Gerard Sweeney with ROTH Capital Partners. Please proceed with your question.

Harold and Mark, thanks for taking my call.

Hey, Gerard.

Hi, Gerry.

Ben asked a couple of my questions, which was great, but I wanted to touch on avocados, right? So obviously the underlying theme here is, you know, shift from more lemons, less lemons, more avocados, and you highlight I think a 1,000 additional acres. Could you give us a little bit more details? You know, I know that this is going to be a multi-year process, but how those avocados come into play, and maybe if you're in a position to do so, sort of the economics behind that shift.

So let me take a stab and then Mark can fill in the rest. So if you look back at our tremendous results of over 15 million pounds produced and sold in fiscal year 2024, we did that on 800 acres that were bearing. But as of right now, we have a little over 1,300 acres planted. And so what you'll see is over the course of the next two to three years, the balance of another 700 acres being planted. Part of that comes from being able to get the nursery stock and enough trees to actually accomplish that. The great news is that we've got them, we've got them on order, they're being produced, so that's less of a concern. As it relates to the economics now, you're going to see, even though we mentioned the alternate bearing nature of production, you know, we just guided from 7 million to 8 pounds in fiscal year 2025. We've done that trying to be conservative. Part of what drives a crop is not only the number of pieces, but also how much size you can get, which the bigger the fruit, the heavier the amount of pounds that you get to sell. A lot of that is driven by rainfall, and we're sitting here towards the end of December, have not had a lot of rain so far. It's too early to say whether that sizing will actually take place or not, but we've tried to guide being conservative that we wouldn't necessarily get the growth in the pieces that are hanging on the tree that we got last year. If we do, then you'll see considerably more avocado volume achieved. But we're again trying to be conservative as we make that guidance. As we look forward, we expect that next year should be a -- 2026 would be a bigger crop year, but also on the existing acres, but also seeing some of the non-bearing acres that have been planted beginning to produce fruit. And as we look forward, and I'll turn it over to Mark, maybe he could give us a look at what he would expect the volume to be. But before I do that, we've also in our forecast, just so you know, we've used an average price per pound in our models of $1.30 a pound. There are tailwinds that are going with us at this point that could allow us to achieve significantly greater pricing than that. But again, in an attempt to be conservative, we used $1.30. So if you're building a model, that's kind of where you see our forecast. But I'll turn it over to Mark and you can make his comments.

Yes, so if we think about the cadence, so we're two years into the, to call it, four to five year replanting process. So as Harold mentioned, we're almost 1,400 acres in the ground of which 750 are bearing at this point. And that replanting started about two years ago. So we think anywhere from three to four years is when you first start getting your real commercial fruit and then six to seven years is full bearing. You look at some of the trees we've planted right now and some of our neighbor growers have even commented on how well they've grown already. We've got them a little bit bigger out of the nursery it seems and so we're really anticipating sooner than four years of seeing our first crop. And so if we look at what we've done, compared to historical plantings, we're planting higher density trees, different, more robust root stocks, and also implementing technology to be able to best feed and water arteries when they need it, not just when we have the ability to serve. And so all of those contributing factors are going to take our average pounds per acre. Where historically we were anywhere from 7,000 pounds to 15,000 pounds an acre, now we think we'll produce between 15,000 pounds and 20,000 pounds an acre between the on and off years. So quite a significant increase in production. And if you do the math, it costs us about $5,000 an acre currently to farm it. And at $20,000 an acre at $1.30, you're making over $20,000 per acre back to the farm. So quite different than where lemons are today at anywhere from $2,000 to $5,000, just depending on where the location is. So that's why we're really confident in this year validated that that strategy change.

Got it. And just a lot of numbers there. You know, this year 2025, not much change in avocado pounds, one because what Harold talked about the rain, but the non-bearing acres should start to come into play a little bit in ‘26, more in ‘27, and more in ‘28. Is that sort of …

Yes, so you could kind of go equally. So on our way to 30 million pounds is sort of the target goal. As an average, once we have 2,000 acres in, you'll see some years that have 40 million pounds and you'll see some years that have 25 million pounds. And so we think 30 million pounds by 2029 is a good number to have as sort of your baseline average and then you know assume price from there.

And 30 million pounds got it. And I mean but it was did you say $15,000 an acre for avocados on average?

It's $5,000 for us to farm it, and it's $15,000 to $20,000 of operating profit per acre when we get to those levels.

Very, very compelling. How's that compared to lemons?

So lemons, so if you go back to the 2018 days, we got up to about $10,000 per acre with a lot more noise and effort. Avocados, just depending on, we have Mexico, who's the 10,000 pound gorilla down there, that they produce about 90% of what the U.S. consumes. As we see comments on tariffs, deforestation, and potential other cartel type issues, the U.S. and California avocado, which is where all avocados, or most avocados are produced in the U.S., has a distinct market advantage because 70% of avocados are consumed West of the Rockies and primarily a lot of the Latin influence. And so I think we feel really comfortable with pricing at $1.30 to be conservative. You saw Mission Produce come out with their earnings last week, that they see pricing to be up 20% year-over-year. So all things point up for avocados at this point.

Great. Got it. Shifting gears, real estate, JV. I think the last distribution was in June of this past year. Two questions on: one, do you know when the next distribution will be? I mean, is it generally speaking June, the timeframe they look at it and two, I know you said there's $30 some a million in there, no debt, but you know, is what about the CapEx side or inflows outflows on that number? I know it's going to grow over time, but I'm just curious as to…

Yes, let me just take a swing at that, Jerry. So the one thing that happened is when we made our distributions, we actually terminated the revolving line of credit that the partnership has because we're now in position to self-fund our working capital in our CapEx and so we do have some CapEx item the next big one is we're about to build a bridge across Santa Paula Creek…

Oh yes.

…and so that's scheduled to break ground and begin construction this spring. And nice -- what's that?

Is that the Harold Edwards Bridge?

I think that's the Mark Palamountain Bridge. So, yes, and that's actually a really great part of the project, because that's actually going to create a lot more better access for people in town to get out to the harvest project. And so that's actually going to be a really beneficial part of our project, but there will be some capital expenditure that's required from that. And then we still have the final part of the infrastructure for Phase III to go as well. So there is a little bit more fund the CapEx requirements, but there's also community fund districts and the issuance of bond benefits that will come that will help balance that. The answer to your question is when the next distribution will be? We're not sure at this point, so we're keeping our share in the partnership at this point.

Got it. Okay. I appreciate it. Thanks. I'll jump back in line.

Great. Thanks, Gerry.

Thanks, Gerry.

Thank you. Our next question is from Ben Klieve with Lake Street Capital Market. Please proceed with your question.

Yes, thanks for taking my follow-up. Mark, you were talking about an avocado yield per acre and how to follow-up on this. So your rough math is that this year and the down year and the alternating cycle that your 800 acres is going to yield something like 9,000 pounds an acre. And you said that over the next few years that you think that 15,000 even on the downside is going to be possible via how you guys are constructing the workers and the different technologies to support this. That's a huge increase. I want to make sure one that I've heard that right and then second if you can elaborate a bit on this, talk about the real drivers here, between current yield and where you think it will be a few years from now?

Yes, so you did hear right. We've got a -- we’ve been obviously in replanting mode with a lot more trees per acre, almost potentially double in some instances. Our young and really intelligent agricultural team has put together the farming practices, pruning that we just never did. And I'll go back to say that since this last year, we started a group internally called the Avocado Congress, which has focused all the stakeholders together from sales to harvest to farming to the executive team and even an external farming board member to come together, sometimes weekly during the season, to go through how best to take from farm to market the avocados. And so when we have more trees per acre, obviously that's pretty easy to get from a higher number. We had really antiquated irrigation systems for a long time, which were as we replant these new acreages going forward. We're going to have pressurized lines where before it was literally turn it on and turn it off, you know, and you just would have to do two-week cycles. Where now we could spoon feed on a weekly basis, give all the nutrients you need, and it sounds fundamental, but it actually really, really helps as far as long-term productivity for a tree. And we're also doing things like drone sprays now, which they're much more precise versus helicopters. So it's just multi-factor of things. But we're, like this year we saw on 700 acres over 15 million pounds. And so just that alone and half of those trees are still older legacy trees. So we're really confident in that 15,000 pound number and getting to over 20,000 pounds per acre in those high years when we have perfect weather conditions.

And so Ben, just for statistics, so the old plantings had approximately 90 trees planted per acre. All of our new plantings are high density with over 180 trees per acre. So you can see the significant increase there. And also just as Mark was mentioning in the way that we're farming them, our internal models are sort of averaging at 17,000 pounds an acre on the new plantings and the new acreage. And as he said, there'll be years that are lower, there'll be years that are higher. But our team really feels pretty confident that the new planting should drive that 17,000 pounds per acre as we retool the operation.

Got it. Very interesting. Well, congratulations to the Avocado Congress and hurray for Ag Tech. So it's great to hear all that. Thanks for taking my follow-up again.

Thanks, Ben.

Thanks, Ben.

Thank you. There are no further questions at this time. I'd like to hand the floor back over to Harold Edwards for any closing comments.

Thank you all for your questions and your interest in Limoneira. Happy holidays to all of you.