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Limoneira Co (NASDAQ:LMNR)
Q1 2020 Earnings Call
Mar 11, 2020, 4:30 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Greetings and welcome to the Limoneira First Quarter 2012 Earnings Conference Call.

[Operator Instructions]

As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, John Mills of ICR. Thank you sir, you may begin.

John Mills -- Managing Partner

Good afternoon everyone and thank you for joining us for Limoneira's first 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 first 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 the 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 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. 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 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 has been posted to our website. And with that, it's my pleasure to turn the call over to the Company's President and CEO, Mr. Harold Edwards.

Harold Edwards -- President and Chief Executive Officer

Thanks, John, and good afternoon everyone. On today's call, I will provide a brief overview of our operational results for the first fiscal quarter, which is seasonally the softest quarter of the year. Mark will then review the financial results in more detail and I will finish with our outlook for fiscal year 2020. After that, we will open up the call and take your questions. As expected, our fiscal year 2020 first quarter generated higher lemon volume offset by lower pricing, primarily due to the strong winds we discussed on our fourth quarter call. These wins affected our ranches in Southern California, reducing the amount of higher priced fancy lemons for sale. We also experienced an increase in avocados, oranges and specialty citrus revenue year-over-year. I'll now discuss each of our business segments starting with a full review of our agribusiness.

Over the past few years, we have made important investments that have us positioned for longer-term growth and improved efficiencies. Paramount to this growth is expansion of our customer base, which we've expanded to over 250 customers, including leading restaurants and grocery store chains. This expansion has come by leveraging our domestic and international marketing and sales channels, focusing more on trade marketing, and consumer-facing strategies and utilizing our increased packing capacity. Of equal importance is expansion of our agricultural acres. We enter fiscal 2020 with over 9,700 planted agricultural acres, of which approximately 1,200 acres are currently nonbearing lemons but estimated to become full bearing over the next four years. In 2020, we expect 300 of these acres to be full bearing with an additional 300 acres to be full bearing by 2021 and the remaining 600 to become full bearing by 2023. Beyond these 1,200 acres, we have plans to plant an additional 50 acres of lemons in the next two years and believe this additional acreage will increase our domestic supply of Limoneira owned lemons by approximately 50% from our current level of 900,000 cartons to 1.3 million cartons additional fresh cartons as the non-bearing and planned acreage becomes productive. In addition, we expect to have a steady increase in third-party grower fruit. As we expected, avocados, oranges and specialty citrus were all up year-over-year. We sold approximately 125,000 pounds of avocados during the first quarter of fiscal year 2020 compared to minimal pounds in 2019. We also achieved $2.3 million dollars of orange revenue in the first quarter of fiscal year 2020 compared to $900,000 in the same period last year. Specialty citrus and other crop revenues were $1.9 million in the first quarter of fiscal year 2020 compared to $1.3 million in the first quarter of fiscal year 2019.

Turning now to our real estate development division. I'm happy to report the partnership between Limoneira and the Lewis Group of Companies for the development of Harvest at Limoneira continues to perform well. Initial lot sales representing 210 residential units closed in fiscal year 2019 and we recently closed an additional 34 in the first quarter of fiscal year 2020. Longer term, we are projecting approximately an additional $80 million in cash flow from the Harvest at Limoneira project over the next six years to nine years, which is expected to include 1,500 homes. During the past few weeks, we have begun to experience negative headwinds to consumer demand and supply chain logistics from COVID-19. Lemon and orange export shipments to Japan, Korea and the rest of Southeast Asia are down significantly. People aren't going out as much in those markets, which is impacting demand. We are also experiencing shipping challenges to those export markets as ports wrestle with the impact of the virus. The combination of these factors is also causing a current oversupply of lemons and oranges domestically, which is also affecting price. I'll discuss our guidance a little later on in the call, but wanted to provide that color on the current state of affairs in our business and industry.

In summary, we can only control what we can control, and while we are seeing near-term pressure on pricing and demand, we are working through these constraints and continuing to make investments behind our business to drive longer-term growth. And with that, I'll now turn the call over to Mark.

Mark Palamountain -- Chief Financial Officer

Thank you, Harold, and good afternoon everyone. Before I discuss our financial results for the first quarter ended January 31, 2020, I want to remind everyone that due to the seasonal nature of our business, revenue is driven by varying harvest periods from year to year. And therefore, we advise people to view our business on an annual, not quarterly basis. Additionally, our first and fourth quarters have historically been seasonally softer quarters while our second and third quarters are stronger. For the first quarter of fiscal year 2020, total net revenue was $41.7 million compared to total net revenue of $42 million in the first quarter of the previous fiscal year. Agribusiness revenue was $40.5 million compared to $40.8 million in the first quarter last year. Other operations revenue was relatively flat compared to the prior year at $1.2 million in the first quarter of fiscal year 2020. Agribusiness revenue for the first quarter of fiscal year 2020 includes $27 million in fresh lemon sales compared to $30.9 million of fresh lemon sales during the same period of fiscal year 2019. As Harold said earlier, the decrease was the result of lower prices being partially offset by an increase in the volume of fresh lemons. Approximately $1.280 million cartons of fresh lemons were sold during the first quarter of fiscal year 2020 at a $21.12 average price per carton compared to approximately $1.272 million cartons sold at a $24.30 average price per carton during the first quarter of fiscal year 2019. It is our expectation that the pressure seen on fresh lemon pricing will continue until the North American summer demand picks up in late spring early summer. The company recognized $200,000 of avocado revenue in the first quarter of fiscal year 2020 compared to minimal avocado revenue in the first quarter of fiscal year 2019. Approximately 125,000 pounds of avocados were sold during the first quarter of fiscal year 2020 at a $1.34 average price per pound. The company recognized $2.3 million of orange revenue in the first quarter of fiscal year 2020 compared to $900,000 in the same period of fiscal year 2019, attributable to higher volume, partially offset by lower prices. Approximately 196,000 cartons of oranges were sold during the first quarter of fiscal year 2020 at a $6.71 average price per carton compared to approximately 124,000 cartons sold at a $7.63 average price per carton during the same period of the previous fiscal year. Additionally, in fiscal year 2020, $900,000 of oranges were purchased for resale. Specialty citrus and other crop revenues were $1.9 million in the first quarter of fiscal year 2020, compared to $1.3 million in the first quarter of fiscal year 2019. The increase was primarily due to higher volume and a decrease in price of specialty citrus. Total cost and expenses for the first quarter of fiscal year 2020 increased to $50.1 million compared to $45 million in the first quarter of last fiscal year. The first quarter of fiscal year 2020 increase in operating expenses was primarily attributable to increases in agribusiness and selling, general and administrative 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 first quarter of fiscal year 2020 was $8.5 million compared to a loss of $3 million in the first quarter of the previous fiscal year. Net loss applicable to common stock after preferred dividends for the first quarter of fiscal year 2020 was $6.6 million and compares to a net loss of $4.8 million in the first quarter of fiscal year 2019. Net loss per diluted share for the first quarter of fiscal year 2020 was $0.37 and $0.28 for fiscal year 2019. Excluding the noncash unrealized loss on stock in Calavo Growers and equity in earnings of Limoneira Lewis Community Builders for the first quarter of fiscal year 2020, adjusted net loss applicable to common stock was $5.2 million or $0.30 per diluted share, compared to the first quarter of fiscal year 2019 net loss of $2 million or $0.11 per diluted share, which excludes the non-cash unrealized loss on stock in Calavo. Adjusted EBITDA was a loss of $5.1 million in the first quarter of fiscal year 2020 compared to a loss of $600,000 in the same period of fiscal year 2019. A reconciliation of adjusted EBITDA to net income is provided at the end of this release. Before I hand the call back over to Harold, a comment on our balance sheet. Long-term debt as of January 31, 2020 was $126.6 million, compared to $105.9 million at the end of fiscal year 2019. Now I would like to turn the call back to Harold to discuss our fiscal year 2020 outlook.

Harold Edwards -- President and Chief Executive Officer

Thank you, Mark. As a reminder, for those of you new to our story, we are providing adjusted EBITDA guidance and lemon volume guidance by cartons and no longer providing earnings per share guidance. We believe adjusted EBITDA can facilitate a more complete analysis and greater transparency into our ongoing results of operations and remove certain non-cash items that create fluctuations in earnings per share. As I mentioned in my earlier remarks, due to the coronavirus effect on our Asian markets, we are updating our full year fiscal 2020 adjusted EBITDA guidance. Excluding the non-cash mark-to-market on stock in Calavo and equity in earnings from Harvest at Limoneira, we now expect our adjusted EBITDA for fiscal year 2020 to be in the range of $15 million to $20 million compared to the previous range of $22 million to $26 million. In addition, we continue to expect to sell 7.5 million to 9.5 million cartons of fresh lemons globally. Included in this revised global cartons estimate are 5 million to 6 million cartons we expect to sell domestically. And with that, I'd like to open the call up to your questions. Operator?

Questions and Answers:

Operator

Thank you. Ladies and gentlemen, we will now be conducting the question-and-answer session.

[Operator Instructions]

Our first question comes from the line of Vincent Anderson with Stifel. Please proceed with your question.

Vincent Anderson -- Stifel -- Analyst

Thanks, good afternoon. So I just wanted to maybe, I just wanted to kind of dig into guidance a little bit more help us bridge the old EBITDA and the new EBITDA just because at the midpoint it's 30% reduction. And I don't think you had 30% of EBITDA coming from the Asian export markets, but maybe if you could just frame that up in terms of what you're losing to exports, what you're kind of baking into your expected realized pricing for the year, what's coming out of fancy, just any additional detail you can provide there?

Harold Edwards -- President and Chief Executive Officer

Sure, I'll make some comments. Mark, jump in after. So basically, we've seen export shipments dropped to what are normally 30%, down to 20% and which is mostly due to the disruption from the virus causing impacts on we believe reducing demand and also making logistics more challenging as charters are expanding out from one week to two weeks. So that's a part of it. Also just due to our product mix this year at least where we believe it will be in terms of a lower percentage of fancy fruit, that fancy fruit is typically what hits the export markets. So the combination of product mix and fewer shipments to Southeast Asia are what are really creating the biggest impact on price. And so, the simple summary of the reduction in the range of EBITDA is due to lemon pricing but the primary contributors are reduced shipments to the Southeast Asia and actual lower shipments domestically of fancy fruit.

Mark Palamountain -- Chief Financial Officer

And I'll add just specific details. So we were at our last call in January, looking at a $22.50 price for the year. Currently, we're selling into March at $18 as you saw in this Q, the numbers was about toward $21.12. So we're cautiously, looking now at a $21 target for the entire year. Now some of that depends on summer pricing getting up into the low-to-mid 20s, which we think is very achievable but yet to be seen. The other component to the adjustment down is in navel oranges. Most recently the price has come out that last year we thought was the worst pricing in history of navel oranges and this year looks to be worse given the difference of matching export pricing to domestic and now having a crowded domestic market. So we shaved a few million dollars off of our orange total numbers, just simply because we're 60% picked. We do have the late varieties that are coming, they garner typically better pricing. But again, it's too early to tell. And so as we said we'd update on oranges, that's the other component there.

Vincent Anderson -- Stifel -- Analyst

All right, great, that's helpful. And it feels maybe a little conservative in terms of just drawing sort of a flat line from where we are today. So if we look overseas then, Turkey, those imports to the US are already tracking well below last year, Spain, same thing. I was wondering if you had any early insights into Mexico and what you're kind of baking in for your mid-year, you summer pricing in terms of imports from those regions?

Harold Edwards -- President and Chief Executive Officer

So Mexico, haven't had a lot. They just finished in December. So, but in general, we are sort of looking for roughly $24 as the summer total average price and that's depending on and that's just US. And then South America anywhere from $16 to $20 FOBs. Depending on how those markets open up, Spain being shorter that we know, Turkey as you mentioned. Do we have those opportunities to go into those markets? We think so. Argentina starts here in the next few weeks, maybe get pushed a little bit just from demand, which consider on the trees still. So that's a good thing. So there is lots of upside and also some risks. And so we just felt like this was the right place to be.

Vincent Anderson -- Stifel -- Analyst

Great, thanks. And then if I could sneak in one more, just turning to corona COVID here in the US, it does seem that we're hearing more and more chatter that we're losing foot traffic in US restaurants, obviously conference is getting canceled, hotel bookings down and those seem to be the hot spots for food service providers. Are you seeing any early indications of slower buying from the foodservice companies or is it just too early to tell on that?

Harold Edwards -- President and Chief Executive Officer

Vince, it 's a little too early at this point. We are shipping at normal levels, still. So we really don't have a good feeling as to whether that's inventory building or whether it's really flowing through at normal levels. But it feels like it's still business as usual from a demand perspective, we did hear that there was some reduction in demand being caused in the fresh segment across the whole produce category because of stockpiling, people seeking shelf stability and going more toward frozen foods for storage purposes. But while we were while are hearing about that, our shipments remained at normal levels. So, so far, [Indecipherable] we believe we're still shipping into normal demand domestically.

Vincent Anderson -- Stifel -- Analyst

All right. Thanks so much.

Operator

Thank you. Our next question comes from the line of Pooran Sharma with Stephens. Please proceed with your question.

Pooran Sharma -- Stephens -- Analyst

Hey guys, good afternoon.

Harold Edwards -- President and Chief Executive Officer

Good afternoon.

Pooran Sharma -- Stephens -- Analyst

So I just want to get your sense, I mean lemon prices have been weaker. I want to ask what type of visibility you have into the summer for pricing? And then if you could just once again just talk about the global supply demand dynamics that we should be aware of as we head into the spring in the summer?

Harold Edwards -- President and Chief Executive Officer

So our bigger issue right now is as the harvest domestically have shifted down into the coastal lemon, just the way the year has played out, there is a lot -- there is good size distribution, which bodes well for the future, fresh utilization of the fruit. But it typically looks like it's tree ripe and yellow, which means that as that first pick of the summer fruit comes off, then the real catalyst for increasing pricing capability is going to be on the second pick, and the second pick of fruit, which probably will begin sometime around late April, early May and that's when we believe we'll start to get some lift in the pricing because there isn't as much of that part of the crop available. But right now, it's pretty crowded and with the reduction in the export sales that keeps more of that fruit home here in the domestic market, which is really having a negative impact on the price.

Pooran Sharma -- Stephens -- Analyst

Okay, thank you. And just wanted to shift over to avocados real quick. Could you talk about the avocado crop for the summer? What does it look like and are you seeing kind of any COVID-19 impacts specifically for your avocados?

Harold Edwards -- President and Chief Executive Officer

We've seen no COVID impact for our avocados. We believe we have a crop somewhere between 4 million to 6 million pounds, 5 million pounds at the midpoint. The very pleasant surprise is it was anticipated that Mexico would have a very, very large crop and that the importation of Mexican avocados would create a much more oversupplied situation which would have a negative impact on pricing. That has not played out. Mexico has been very slow to import. We've heard the Mexican fruit has been smaller, so they're leaving it on their trees longer to get size. That's created some great pricing opportunities for us. And as Mark reported, we've seen our first couple of hundred thousand pounds hit the market at about a $1.30 where as we go forward, we're seeing prices now for 48 [Phonetic] at a $1.80 which was much stronger than we thought. So as we work with Mother Nature to size up our fruit, we believe that we will harvest the majority of our avocados probably by the end of June, early July, and we're optimistic or hopeful that these prices will hold up and will exceed our plan for avocados for the year.

Pooran Sharma -- Stephens -- Analyst

Thank you guys. That's all I have for today.

Operator

Thank you. Thank you. Our next question comes from the line of Ben Klieve with National Securities Corporation. Please proceed with your question.

Ben Klieve -- National Securities Corporation -- Analyst

All right, thank you. A couple from me. First regarding the guidance. I'm wondering if you can give us any insight as to how you are thinking about domestic demand, kind of the range of domestic demand and how -- what it would take to hit the high end of the guidance versus the low end of the guidance here, again on the domestic side please?

Mark Palamountain -- Chief Financial Officer

So we have a range of 5 million to 6 million cartons US. I think part of that will be utilization. Right now, we're in the, call it mid-70 percentile where we like to be. If things come to fruition, where there isn 't enough fancy fruit and some of the lesser-grade fruit comes up, there's possibility to increase that whether it's from some of the juicing opportunities we've all discussed. But in general, the tree crop is still there, which is why we didn't change our tree crop guidance. It just depends on, is there going to be any restaurant demand fall off or do we have opportunities to move [Indecipherable] fruit in other places that don't have it internationally that we've had for export. So I think we're comfortable right in the middle right now. We're looking at the trees right now at the window and there is tons of fruit on them. And so it's to be to be seen, but we're happy with the tree crop.

Harold Edwards -- President and Chief Executive Officer

And if I may, just one other comment. The size distribution across the remainder of the crop that we see seems to be much more normal versus last year, when all the fruit got big which really crimped that size of the market. So by having a normal size distribution, that gives us a great opportunity to get our sales. And if we can get our sales, then we can get great utilization and great performance from our outside growers in our packing house. At that point, then it's down to what's the average price we can get back to our own production and by moving the amount of fruit that we're forecasting, we can get the efficiency that keeps our cost in the -- call it the $15 to $16 per carton range and then it's just what we anticipate as an average FOB selling price, which as Mark indicated earlier, he is now used $21 for the remainder of the year or actually to average for the year, which is sort of the midpoint of our guidance.

Ben Klieve -- National Securities Corporation -- Analyst

Got it. Okay, thanks. That's helpful. And wondering if on, you can kind of comment on the, given the nature of the kind of chaos in the market today, to what degree your kind of near-term capital allocation plan is being impacted? Are you making -- are you going to see any shifts in your strategy, any decreases in your capex outlook for the year? Any comments there would be helpful.

Harold Edwards -- President and Chief Executive Officer

So back today [Phonetic] we can only control what we can control. So we've met as a management team just recently to discuss austerity measures to really clamp down and focus in on cost reduction. At this point, we're really just trying to become as efficient as we can to stretch out the margins which are really being challenged because of the average pricing. And along with that to your question, we're also really being a lot more conservative on how we're looking at our capex and prioritizing the things that have to be done that affect revenue in the near-medium and long-term first and slowing down on capital projects that can be delayed or suspended without any real near-term impacts on our business. So we are really trying to take a harder look at costs and really kind of rain in capex as we manage through this uncertainty.

Ben Klieve -- National Securities Corporation -- Analyst

Got it, thank you. And just one last quick one from me, if I recall at this time last year you guys were just swimming out in the fields in Southern California. I was wondering if you could just elaborate a bit on field conditions, how especially the precipitation has cooperated this year and kind of what your outlook is as far as you can tell in coming weeks and months?

Harold Edwards -- President and Chief Executive Officer

Yes, we had above-average rainfall through December and then it went dry and so we were ahead of normal rainfall through December. It went dry in January and February which then pushed it back into a shortage situation and it's been raining for the last three days. So my feeling is that it's kind of been a -- we're probably going to average come out to have sort of average rainfall, it's been good rainfall from the standpoint that it hasn't necessarily impacted our ability to harvest. So we're harvesting normal distributions of fresh fruit. As mentioned earlier, we're still dealing with the impacts of less fancy grade, mostly driven by the early wins that we experienced in this production year. But at this point, it feels like it's going to be sort of normal rainfall, and it's been a warm winter so far. So, no negative impacts from freeze or from cold temperatures.

Ben Klieve -- National Securities Corporation -- Analyst

Perfect. That's good to hear. And with that, I'll jump back in queue. Thanks guys.

Harold Edwards -- President and Chief Executive Officer

Thank you.

Operator

Thank you. Our next question comes from the line of Chris Krueger with Lake Street Capital Markets. Please proceed with your question.

Chris Krueger -- Lake Street Capital Markets -- Analyst

Hi, good afternoon guys.

Harold Edwards -- President and Chief Executive Officer

Hey Chris.

Chris Krueger -- Lake Street Capital Markets -- Analyst

Just a couple of quick ones. What percent of your sales goes into those Asian countries that are affected by the COVID?

Harold Edwards -- President and Chief Executive Officer

So depending on the balance and the blend of first grade, second grade or third grade fruit, if we have a normal distribution of first grade fruit, which should average somewhere between 40% to 45%, shipments to Southeast Asia from the US are typically for us about 30% to 35%. This year, we're seeing first grade so that fancy grade averaging around 20% to 25%. And so average shipments or not average but shipments to those export markets are trending around 20% driven by those two things, one, less first grade fruit to get to those markets, but also demand disruption caused by the virus.

Chris Krueger -- Lake Street Capital Markets -- Analyst

And still on the virus, any, might be kind of a weird question, but any impact on your harvest of Limoneira real estate as far as people not wanting to to get out and check out your lots or whatever?

Harold Edwards -- President and Chief Executive Officer

You know it's interesting the activity and the pace of visits for the new homes at Harvest at Limoneira are at the highest level we've seen since inception. And we believe it's because these historically low interest rates and mortgage rates right now. But since the beginning of the year, we've been averaging somewhere between four to five home sales and that's not us, it's our guests builders. But four to five homes being sold a week by our guests builders. So the demand has been robust, the visits have been robust and the purchasing has been robust and even since in the last couple of days with the greater levels of concern about the spread of the virus, we still haven't seen an impact to the traffic so far.

Chris Krueger -- Lake Street Capital Markets -- Analyst

Okay, last question. Can you give an update on your wine grapes?

Harold Edwards -- President and Chief Executive Officer

So it's a little too early to say the harvest. But we have three, we will have 320 full-bearing acres and it's -- that 's not quite true because the last planting is not quite full bearing. But I think it's probably safe for us to anticipate somewhere on the order of 4 tons to 6 tons per the acre, about 80% of all of what will be produced, assuming we can produce them into the specifications that were provided to us by the wineries that we've got these contracts with, about 80% are contracts that average somewhere between $1,200 and $1,300 a ton. So that's the very positive side of it, the sort of the challenge, the challenge as we look into the remainder of the year is there is an oversupply of just the basic Cabernet Sauvignon variety. And so without those contracts, the open market is going to be tougher. But that being said, we're in discussions for the final 20% to contract, which we're working diligently now to try to nail down before we actually get into the harvest at the end of the year. So at this point we're cautiously looking forward to the same view that we had when we guided at the beginning of the year for our wine grapes.

Chris Krueger -- Lake Street Capital Markets -- Analyst

All right, thank you. That 's it for me.

Harold Edwards -- President and Chief Executive Officer

Thanks Chris.

Operator

Thank you. We have an additional question from the line of Vincent Anderson with Stifel. Please proceed with your question.

Vincent Anderson -- Stifel -- Analyst

Yes, thanks. I just had a quick one for Mark. With how well things are progressing at [Indecipherable] Is there anything clever that we can do maybe more of those cash flows, make opportunistic share repurchases or if there's any land out there with the persistent weakness in lemon prices?

Mark Palamountain -- Chief Financial Officer

Good question. You kind of broke in and out. But what I heard was opportunistic cash flows, either from harvest or land purchases or stock purchases. I think there that we're looking at all of that is from harvest that schedule is pretty set relative to, if we're selling two homes to four homes a week, based on the deployment of capital for the infrastructure and once that's complete for the final phases, that's really when the accordion starts coming back out to us in early 2022 on those larger cash flows. There is always some opportunity to look at. We have Calavo stock. We have a pretty robust line. So right now we're just taking a deep breath and really looking at everything. We thought with the decline in the general market and our stock equal or a bit more, I think just by reassuring everybody that the business is intact is our first goal and then really figuring out opportunistically how we can use our resources and our assets to further enhance the business.

Vincent Anderson -- Stifel -- Analyst

Thanks. And I apologize if this changes your answer at all. The first part of my question was specific to actually bringing some of those harvest cash flows forward whether through some kind of securitization or a new borrowing line against them?

Mark Palamountain -- Chief Financial Officer

Yes I think -- so, right now we have a $45 million line with BMA [Phonetic] that's unsecured between the both partners. We are working on moving that up to $50 million. At this point that is going to allow us not to have to put any further capital contributions into it. So far we $2.8 million this year, but I just don't see it. Lewis is such a conservative group and we like to work under their tutelage in that space. And so at this point we're going to keep those numbers where they are.

Vincent Anderson -- Stifel -- Analyst

Fair enough. Thanks so much.

Operator

Thank you. It appears we have no additional questions at this time. So I'd like to pass the floor back over to Mr. Edwards for any additional concluding comments.

Harold Edwards -- President and Chief Executive Officer

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

Operator

[Operator Closing Remarks]

Duration: 38 minutes

Call participants:

John Mills -- Managing Partner

Harold Edwards -- President and Chief Executive Officer

Mark Palamountain -- Chief Financial Officer

Vincent Anderson -- Stifel -- Analyst

Pooran Sharma -- Stephens -- Analyst

Ben Klieve -- National Securities Corporation -- Analyst

Chris Krueger -- Lake Street Capital Markets -- Analyst

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