Greetings, and welcome to Limoneira's second quarter fiscal year 2022 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 second quarter fiscal year 2022 conference call. On the call today are Harold Edwards, President and Chief Executive Officer, and Mark Palamountain, Chief Financial Officer. By now, everyone should have access to the second quarter fiscal year 2022 earnings release, which went out today at approximately 4:00 P.M. Eastern Time. If you've not had a chance to view the release, it's available on the investor relations portion of the company's website at limoneira.com. This call is being webcast and a replay will be available on Limoneira's website as well. Before we begin, we'd 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 risks detailed 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 statement herein, whether as a result of new information, future events, or otherwise. Please note that during today's call, we will also 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 measure is included in the company's 10-Q and press release, which have been posted to our website. 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 achieved top-line growth of 4% to $47 million and generated $5.8 million of adjusted EBITDA in the second quarter. The growth was driven by higher avocado, orange, and specialty citrus revenue. Our avocado segment has continued to outperform expectations this fiscal year with pricing up 50% compared to last year. Lemon pricing remained challenged in the second quarter as the domestic lemon market works through a surplus of inventory. However, we were encouraged to see the lemon export markets begin to return to normal. The top-line improvement in the second quarter was partially offset by the cost side of our business as we and our industry continue to face rising labor costs and higher packing and supplier costs. Our company is 129 years old, and over the past 20 years, we have made important strategic investments in our overall business to become a leading global producer, packager, and marketer of citrus, leading to the creation of our One World of Citrus. This new marketing plan, combined with our recent investments, have enabled us to increase our revenue by over 200% from $54 million in 2010 to over $166 million in fiscal year 2021, which equates to an 11% CAGR. Today, we have over 15,400 acres of rich agricultural lands, real estate properties, and water rights in California, Arizona, Chile, and Argentina with a fair market value of over $600 million in today's market, yet a book value on Limoneira's balance sheet of $220 million because many of these assets were acquired many years ago at a low basis. Selective monetization of certain assets in Limoneira's portfolio going forward creates a tremendous value creation opportunity for our shareholders. Based on this, and in order to better leverage our leading global position and enhance shareholder value, over 6 months ago, our board of directors and management formulated a plan that included updated priorities and objectives for Limoneira to achieve in the coming years and certain metrics to measure our progress. Our board's objectives are as follows. Number one, to reduce debt and rightsize our balance sheet. We also reiterated today that we expect to receive approximately $95 million over the next 5 years from Harvest at Limoneira beginning this year. In addition to Harvest, we have identified over $100 million in assets that we will be monetizing or selling in the near term to streamline our operations. Number two, transitioning our One World of Citrus to an asset-lighter business model. In order to unlock the value of our many assets and better leverage our leading global citrus position, we will be expanding our One World of Citrus while also strategically selling certain assets and streamlining our operations to dramatically increase our long-term cash flow. To accomplish this, we will be increasing our focus on growth of the asset-light model using more grower partner fruit in order to reduce the impact of pricing volatility and farming costs. We will continue to develop best-in-class grower services to recruit additional grower partners. We will also be reconfiguring our global lemon packing network to better support our grower partners' fruit. This may include reducing certain orange and lemon acreage globally while still increasing the packing and marketing of the fruit grown on these locations. In the coming years, we expect 30% of our lemon global supply chain to come from Limoneira fruit and 70% to come from grower partner fruit while maintaining our overall growth goals. To put this in perspective, today 50% of our fruit is produced on Limoneira properties. As an example, last week we announced our engagement with the Yuma Mesa Irrigation and Drainage District in a 2-year fallowing and forbearance program at the company's Associated Citrus Packers Ranch in Yuma, Arizona. The program targets 400 acres of farmable land on the property over the duration of the agreement and will result in excess of 4,200 acre ft or more than 1.3 billion gal annually of saved water that may be retained in Lake Mead as Colorado River system conservation water. In addition to conserving natural water resources, the program converts previously unprofitable acreage to be profitable with an estimated annual savings of approximately $1 million. As a reminder, our Associated Citrus Packers Ranch includes 1,300 acres of land comprised of approximately 900 acres of productive lemon orchards and 400 acres of other crops and facilities with access to the Colorado River for crop irrigation. We cultivate, harvest, and pack fruit for sale within the Limoneira family of brands as well as third-party contract partners. Now, with the fallowing program in place, we will have 700 acres of productive lemons, 400 fallowed acres, and 200 acres of other crops. We'll continue to leverage our existing supply chain for the 700 acres of lemons and expect to add more grower partners in the desert area into our supply chain in the coming year. This will result in more lemon volume than we previously generated. This asset-light model will enable us to achieve improvements in the following metrics our board is using to measure progress and position us to improve shareholder value. The first is reduced investment risk outside of North America, generate more stable and higher growth in EBITDA and earnings, and lastly, to improve our annual return on invested capital. During the past 12 years, we grew our One World of Citrus offering. We also made certain investments in assets that were embedded in this growth and the overall infrastructure of Limoneira. Now we'll be focusing on monetizing certain of these assets that have increased in value over the years, and this will dramatically improve our return on invested capital. We expect to also leverage our leading avocado position by increasing avocado production in Ventura County and exploring additional ways to participate in the packing, marketing, and selling of avocados as a complement to our One World of Citrus. Our fifth strategic objective is enhancing our ESG goals. Limoneira has a long history of sustainability practices, and this is one of the reasons our company has enjoyed almost 130 years of giving back to the community. We build housing for farm workers, sponsor community programs, reduce our carbon footprints with seven solar installations, manage green waste with a 20-acre facility that receives 200+ tons per day of organic green waste, minimize pesticides, and we are a pioneer in water conservation. However, in order to ensure our land is here for future generations, we are redoubling our efforts on environmental, social, and governance standards. We're increasing our focus on regenerative agricultural practices, including expanding our relationships with third-party agronomists to further enhance and properly nurture our soil and water conservation efforts. We continue to improve our digital information system to increase efficiencies across our supply chain. This system will work in tandem with our agricultural practices by monitoring daily tree health and fruit growth, identifying labor and distribution needs, predicting the right time to harvest and match harvests, fruit grades, and sizes to meet global demand. Lastly, we are evolving our governance structure to ensure best practices. We believe that this new strategic plan will result in an asset lighter business model, dramatic debt reduction, reduced volatility, and an increase in EBITDA and earnings per share, higher return on invested capital, increase in our quarterly dividend, higher ESG scores, expansion of global fruit packaged and marketed by Limoneira, and lastly, an increase in the growing, packing, marketing, and selling of avocados. We'll update you on a regular basis regarding our progress, and we believe we will be in a position to announce additional asset sales and streamlining of our business model in the coming quarters. Our entire team at Limoneira is very excited about our new strategic plan to realize the value of the many investments we have made over the past 20 years. This will dramatically improve our financial position and expand our One World of Citrus opportunities. We have a deep history of being a leader in the citrus and avocado world, and this new plan will elevate Limoneira and enhance the value of our company for all stakeholders. With that, I'll now turn the call over to Mark. Thank you, Harold, and good afternoon, everyone. For the second quarter of fiscal year 2022, total net revenue was $46.8 million compared to total net revenue of $45.1 million in the second quarter of the previous fiscal year. Agribusiness revenue was $45.4 million compared to $44 million in the second quarter last year. Other operations revenue was $1.4 million compared to $1.1 million in the second quarter of the previous fiscal year. Agribusiness revenue for the second quarter of fiscal year 2022 includes $27.3 million in fresh lemon sales compared to $28.7 million in the same period of fiscal year 2021. Approximately 1,552,000 cartons of fresh lemons were sold during the second quarter of fiscal year 2022 at a $17.57 average price per carton, compared to approximately 1,528,000 cartons sold at a $18.79 average price per carton during the second quarter of fiscal year 2021. Lemon pricing has remained challenging for the first half of fiscal year 2022 as we've dealt with adverse weather on the East Coast as well as the emergence of the Omicron variant, creating an oversupply of lemons in the marketplace. We are seeing the lemon export market to begin to return to normal levels. However, it is expected to be a slower recovery, and so while we expect improvement in the second half of this year, it is still expected to be down year over year. The company recognized $2.7 million of brokered fruit and other lemon sales in the second quarter of fiscal year 2022, compared to $2.3 million in the same period last year. The company recognized $3.6 million of avocado revenue in the second quarter of fiscal year 2022, compared to $2.7 million in the same period last fiscal year. Approximately 1,877,000 lbs of avocados were sold during the second quarter of fiscal year 2022 at a $1.90 average price per pound, compared to approximately 2,142,000 lbs sold at a $1.26 average price per pound during the second quarter of fiscal year 2021. The company recognized $2.6 million of orange revenue in the second quarter of fiscal year 2022, compared to $1.4 million in the same period of fiscal year 2021. Approximately 328,000 cartons of oranges were sold during the second quarter of fiscal year 2022 at a $7.98 average price per carton, compared to approximately 154,000 cartons sold at a $9.12 average price per carton in the prior year period. Specialty citrus and other crop revenues was $1.4 million in the second quarter of fiscal year 2022, compared to $1.2 million in the second quarter of fiscal year 2021. Total costs and expenses for the second quarter of fiscal year 2022 were $44.1 million compared to $42.7 million in the second quarter of last fiscal year. The increase in operating costs was primarily attributable to the company's agribusiness associated with an increase in packing and growing costs, partially offset by decreases in third-party grower and supplier costs in the second quarter of fiscal year 2022. Operating income for the second quarter of fiscal year 2022 increased to $2.7 million compared to operating income of $2.4 million in the second quarter of the previous fiscal year. Net income applicable to common stock after preferred dividends for the second quarter of fiscal year 2022 was $1.4 million compared to a net income of $1.8 million in the second quarter of fiscal year 2021. Net income per diluted share for the second quarter of fiscal year 2022 was $0.08 compared to a net income per diluted share of $0.10 for the same period of fiscal year 2021. Adjusted net income applicable to common stock for the second quarter of fiscal year 2022 was $1.7 million compared to net income of $1.8 million in the same period of fiscal year 2021. Adjusted net income per diluted share was $0.10 for the second quarter of fiscal year 2022 and 2021. A reconciliation of net income to adjusted net income is provided at the end of our earnings release. Adjusted EBITDA was $5.8 million in the second quarter of fiscal year 2022 compared to $6 million in the same period of fiscal year 2021. A reconciliation of net income to adjusted EBITDA is provided at the end of our earnings release. Now turning to our balance sheet and liquidity. Long-term debt as of April 30, 2022 was $135.6 million compared to $130.4 million at the end of fiscal year 2021. We believe the level of debt will decrease throughout fiscal 2022 due to expected cash flow from our agriculture and real estate businesses. Now, I'd like to turn the call back over to Harold to discuss our fiscal year 2022 outlook and longer-term growth pipeline. Thanks, Mark. As we all know, the COVID-19 pandemic continues to affect our food service business and industry logistics on a global basis. However, due to our diversified food business, we expect to achieve stronger top-line growth in the third quarter compared to our second quarter and improved EBITDA. We are beginning to experience improved lemon demand domestically, but we expect lemon pricing to remain pressured this fiscal year until we see the Asian export markets fully open again. We continue to expect fresh lemon volumes to be in the range of 4.5 million-5 million cartons for fiscal year 2022, and we expect strong profitable avocado demand to continue into the third quarter of fiscal year 2022. We also expect volumes to be in the 6 million-7 million lb range for fiscal year 2022. We continue to expand our product offerings in fiscal year 2022 by marketing another producer's oranges and specialty citrus through our One World of Citrus program. We have a growing list of customers that enjoy our ability to provide all of their citrus needs from one single supplier. By increasing our oranges and specialty citrus offerings, we will be able to attract even more customers. We continue to expect to receive $95 million from Harvest at Limoneira during the next 5 fiscal years, beginning in fiscal year 2022. Currently, we are in negotiations of Phase 2, which represents 554 residential lots. The breakdown of annual cash flows expected from Harvest at Limoneira is as follows. Fiscal year 2022 is expected to generate $8 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 $30 million. Fiscal year 2026 is expected to generate $15 million. These expectations from Harvest do not include the potential opportunity of a medical campus in our East Area 2 development. Now, I will open the call to your questions. Operator? At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two to remove your question from the queue. For participants using speaker equipment, it may be necessary for you to pick up your handset before pressing the star keys. One moment while we poll for questions. Our first question comes to the line of Ben Bienvenu with Stephens. You may proceed with your question. Hey, hey, this is Jack Hardin subbing in for Ben Bienvenu. Good afternoon. Hi, Jack. Hey, Jack. Hello. I wanted to ask about the expanded strategic scope of One World of Citrus. I know you identified $100 million in assets to be sold in the near term. Do you have any sense of how much of the $600 million you would like to monetize overall? Maybe if you could provide some additional color on how you would deploy that capital. Yes, be glad to. We went through a rigorous review of the assets that are involved in the One World of Citrus business model with our board and developed collaboratively a strategic plan back in February that was unanimously approved by the board. We're tasked at the management level to provide the board with a roadmap for the expansion of the asset lighter model that includes over $100 million of non-core assets to be divested. Some of those assets are specific assets in areas where our returns on invested capital historically have not been achieving the desired levels that we wanted to have. Yet we've seen those assets appreciate, the land and the water, significantly over time. For us to convert some of our owned acreage to be able to divest that to interested financial parties that would then allow us to continue to market and sell the fruit by running that fruit through our packing, marketing, and sales program is specifically what we're talking about. While we don't have necessarily the ability to talk about the specific assets that we're working on, there are assets in each of the growing district areas in District 1, District 2, and District 3 that will be potentially in a package of assets that we're going to run a process to try to monetize. Awesome. Thank you so much. That's it from us. Thank you. Our next question comes from the line of Gerry Sweeney with Roth Capital. You may proceed with your question. Hey, Harold, Mark, thanks for taking my call. Hi, Gerry. Hey, Gerry. Just staying on the asset divestitures and maybe realignment, you know, are most of the assets, you know, domestic, or are you looking at making any, you know, changes on the international side? Gerry, as you know, we also own assets in Argentina and in Chile. In Argentina, our desire is to opportunistically transition the business there into more of an agency approach where we represent other shippers' fruit and work on the potential divestiture of our owned acreage in Argentina for political risk reasons. In Chile, our thoughts are to monetize a percentage of our production, but then to convert that capital in Chile into the development of a new packing house and a new packing operation, very similar to what we did in Santa Paula. Got it. Speaking of that was sort of my next question. You kind of alluded to that in the prepared remarks, maybe some other investments. Is that packing facility in Chile the one? Are you looking at one facility in terms of packing houses, or will there be others? Secondarily, are there other sort of value enhancing investments you can make as well to sort of support this asset lighter model? Yes. We own a packing house and a majority interest in a packing, marketing, and selling company called Rosales S.A. in Chile. Our packing house currently has a capacity of about 1 million cartons. Based on our relationships with certain farm managers, we have somewhere between 4 million-5 million cartons identified of lemon throughput that need a home from a packing, marketing, and sales perspective. We see a great opportunity to expand our Rosales packing operation to build a packing house with a 4 million-5 million carton annual capacity to take advantage of that throughput. As a great way for us to grow the asset lighter model of our One World of Citrus. One more thing to add there. On the domestic front, we're gonna see opportunities in our packing house. There's just tremendous growth and volume in bagging these days for retail. We're gonna add a number of bagging machines to our packing house. As we pay down debt to what we think are sufficient levels, we're also gonna redeploy capital into up to 500 acres of avocados and explore other opportunities in the food chain there. Got you. On the avocado side, would you do any packing on that front, or would you just sell it in, just to the other, you know, third party packagers? Right now we see a great opportunity with our land and water assets in Ventura County to reduce our own lemon production because fundamentally there's an oversupply in that part of California during that season. Convert that acreage into the expansion of avocado production by somewhere between 250-500 additional acres of additional production. With the significant growth in volume to then explore the potential of entering the packing, marketing, and selling of avocados by potentially being acquisitive. Gotcha. Switching gears, I'm not sure if there's other people in line, but real quick, just on the real estate side. The medical campus and additional sort of acre sales that it looks like you're gonna be doing on the real estate, you know, separate from the Harvest at Limoneira, that's gonna be a little bit different sort of structure in terms of cash flow. I mean, is that a direct sale of land and you get the cash up front, not necessarily like a joint venture where you had to develop and then build the land, then get the cash flow? Just any guidance on that front. That's exactly right, Gerry. We entered a letter of intent with a developer who in return has also developed a letter of intent, which is about to be formalized with the Ventura County Health Care Agency, which is the public hospital system in Ventura County. The idea is that the land. There's a upwards of 50-bed hospital that's envisioned on 5 acres and a 150,000 sq ft outpatient medical office building, which is on 5 acres. When it's ready to break ground, then Limoneira will sell that land, so that 10 acres to the developer. Now, we envision that that monetization for Limoneira will be an all cash outright sale. The terms have been already negotiated, and we expect that to take place in 2023. In addition to that, we also have another 2.5 acres that's contiguous to that, where we're currently negotiating with a hotel on an outright land sale as well to serve as a complement, not only to the Harvest at Limoneira residential component, but also to the medical campus component. The last piece to that is that that will leave 20 acres in the East Area 2 area. We're currently under discussions with the Ventura County Community College District to potentially sell 10-20 acres to them. If we were successful doing that would complete all of East Area 2. It's exciting to see the momentum and progress. We expect to begin to see the monetization of that next year in 2023. Gotcha. I appreciate it. I'll jump back in line. Our next question comes from the line of Ben Klieve with Lake Street Capital Markets. You may proceed with your question. All right. Thanks for taking my questions here. First I have a question on the monetization of the water rights that you announced last week and touched on here on the call today. Curious that the $1 million of improved operating profit that you are looking for here from that announcement, can you kind of outline how you get to that number from the perspective of, you know, of increased cash flow due to, you know, due to the water rights being divested versus savings on, you know, operating savings, you know, given that those acres are not gonna be productive anymore? Yeah, sure. Thanks for the question. Really the way we're looking at that is over the past 3 or 4 years, that acreage that was specified for the fallowing program was very tired and old lemons. A typical lemon only lasts 20 to 25 years, a lemon tree in the Yuma desert area. As we saw this program come out, it was about a $1,000 an acre losing proposition. Because specifically it's just not that much fruit being produced as they get older. Then, you know, the trucking costs and shipping costs of getting it all the way to Santa Paula just made it more difficult. That $1,000 an acre then flipped over to a $600,000 benefit from the fallowing program. Basically just looking at about $1 million turnaround from where it was in a money-losing position to then having no input costs and getting $600,000 for the program. Got it. That's really helpful. I guess a follow question to that is, you know, at the end of 2 years here, you're gonna set this. You're effectively gonna have completely fallowed land and then make a decision on whether to replant with lemons or replant with another, you know, another crop or, you know, divest it or sit on it and continue to monetize the water rights. Is that kind of the different calculation that you're looking at right now, for 2 years out for that plant? We actually, Ben, that's a great question. We actually believe that the situation on the Colorado River is dire. If you read about what's happening with Lake Powell and Lake Mead as storage facilities for western water, the situation is really bad. As a result, we expect that this fallowing program will just become more and more lucrative over a period of time because the agencies that govern the river and the requirement to divert more and more water away from agriculture and into storage for residential and urban use is going to happen. What we fully expect to happen at the end of the fallowing program is that there will be a new fallowing program that will be put in place at significantly higher values. Really the way we're thinking about that asset in Arizona is more as a long-term water monetization opportunity and less as a place where we're going to produce reliable supplies of lemons. We're going to, from a supply chain perspective, begin to pivot some of the supply chain to the west, I guess, into the Coachella Valley, where there's still quite a bit of young production and high quality production. Still hang on to our Yuma investments, but focused on the monetization of that water. Got it. Very interesting. Yeah, it's pretty impossible to be optimistic about the outlook for water throughout the Colorado River system. I hear you loud and clear there. On the lemon market side, I wholly appreciate the broad comments around your approach to kind of move from a more vertically integrated business to one where you're more of a processor and marketer of third party fruit. My question though is, you know, given the challenge that you guys have observed now for 4 years in this market, can you talk about the farmers that you're gonna be sourcing from here in an increasing manner via this business model? I mean, what is the state of the lemon market and the average farmer, and you know, how much pressure do you see on this business here over the long term, that could potentially impact your efforts to be a marketer of a fruit in a you know, really challenged environment? No, that's a great question, and that's sort of at the essence of our shift in our strategy. The answer to your question is different in each of the growing regions. In Yuma, you're going to see, because of the water situation, a natural reduction in production there because of the fallowing programs and just the lack of access to water to irrigate trees. That's going to reduce the supply chain from that area. The other thing that we're observing just by following local nurseries is that there's an awful lot of new plantings and young plantings in the District 3 region in the Coachella Valley. We are already in discussions with a number of high quality citrus producers who are very committed to growing in that region, who are looking forward to our marketing approach and focusing on higher fresh utilization rates and good returns to keep them profitable versus our competition. That's the desert. In the San Joaquin Valley, we've also observed significant plantings of young trees that will be coming online. There's an awful lot of opportunity to source new growers in the San Joaquin Valley. Finally, the dynamic that's driving the shift to more lemon plantings on the coast in District 2 is with the curtailment of access to water in certain areas in Ventura County. You're seeing growers who used to have access to a lot of water and were able to successfully row crop have their water rationed and cut way back. It takes a lot less water to grow a lemon tree than it does to produce a number of tons of produce and vegetables and even strawberries or different types of berries. We're seeing a significantly larger amount of lemon plantings going into Ventura County than we would have thought. Now, the dynamic with that increase in young trees and production is, as you were saying, the pressure from three really bad years because of oversupply and low pricing, some caused because of COVID and some caused because of systemic over-planting around the world. That dynamic will be very interesting to follow, but we're very bullish on the opportunity to access new grower partners and continue to grow that part of our business. Okay. That's really interesting. Yeah, there's plenty going on there. It's good to hear your thoughts, though. You know, there's plenty more to ask. That's probably a good place to leave it. I appreciate you guys taking my questions, and I'll get back in queue. Thanks, Ben. Thanks, Ben. As a reminder, if you would like to ask a question, please press star one on your telephone keypad. One moment while we poll for questions. Our next question comes from the line of Eric Larson with Seaport Research. You may proceed with your question. Yeah. Hi, guys. Thanks for taking my question. So- Sure. My first one, guys, is what was your fresh utilization in the quarter? I see the fresh sales were off a little bit. Obviously, pricing was not fun. What was the utilization, and were you able to get good market sizing? There were no sizing issues per se maybe in the quarter? Great question, Eric. It was a really good quarter. Seasonally, the majority of the fruit that was produced and sourced came from the San Joaquin Valley in our District 1 area. We finalized the District 1 crop at a little over 78% fresh utilization and an average return per bin of about $165 a bin, which was very competitive. When you take the combination of a great grower return per bin times the amount of fruit that we sold, it drove a much higher profitability back to the acre for our grower partners than was able to be provided by our competition. Got it. Okay. We're probably 3 or 4 weeks away from kind of the traditional seasonal influx of fruit from Peru. What does the import situation look like this year from Peru? Yeah. Peru, certainly. Are you talking avocados, Eric? Yeah. Yeah. Yeah. So that's a great question, and I appreciate it coming from you 'cause I know you follow the avocado handlers as well. This has been an extraordinary avocado year and season for us as producers 'cause it's the first time in 20 years that I've been involved with our business that the pendulum of leverage has swung from the handler back to the producers because of, as you know, dramatic shortages that are coming out of Mexico and the ability to have, you know, pretty good size early in California, and it's led to dramatically higher returns coming back to our California fruit. We expect that part to end, though, when that Peruvian fruit starts to pour in, and the first boats are on the water right now, so we expect that season to really get going, you know, in the very near term. As producers in California, we have our foot on the gas with our picking strategy to try to get all of our fruit off as quickly as we can and try to be done with our harvests and our marketing by the beginning of July. Okay. Wow. That's a pretty fast timeframe. Didn't you have a little bit of delayed harvest in avocados a year ago? Would that make your third quarter better than fourth quarter for volumes? I might be messing up my timeframe here. No, you're pretty close. The timing will be pretty close to last year. You know, the calculus of working on the crop is how much risk do you assume by holding your avocados on the tree and letting them size naturally, and then juxtaposing that against what you think the future returns are gonna be as a lot of the imported fruit from Mexico and Peru come into the market to influence that pricing. What happened last year is we held, I think, Mark, 1 million lbs towards a later time. Yeah, we held it later. Yeah. This year, because the pricing's so high, we're gonna try to get that fruit off the tree and into the market as soon as we can. You know, we have an opportunity from a revenue perspective of hitting $9-$10- $9 million-$10 million at this point in avocados. ... if we play this right. We're really going after it just because of the extraordinary pricing we're seeing right now in the market. Wow. Excellent. Okay. Kind of back to some of the questions that you're talking about kind of your strategic asset sales, and you identified $100 million of potential sale value. First question is, number one, is that an after-tax value? And number two, can you maybe give us a little better feeling for the timeframe on that? And then number three, I think this question was probably asked, so maybe I missed the real answer on it, but is it limited to only $100 million, or do you have other sort of underperforming ROIC land and assets that could come up on top of that $100 million. All great questions. First, as far as the $100 million and thinking about the basis of the stuff that we've identified so far, there's about $30 million of gain that we could potentially see from that. We've got a number of offsets already on hand. We've got about $15 million-$16 million of NOLs on the books. I'm not sure if we've talked about it in prior calls, but we also are in the process of terminating our pension, which has an AOCI loss on the books there. There's a number of other offsets that for that $100 million, we almost completely shelter that from tax. I think the next part of your question is timeframe. You know, sometime in the next 12-24 months, we see as a high probability. We're working hard on it now, and there's currently a process on some of the assets. We're pretty optimistic that this is gonna happen in an orderly, quick fashion. With the third part, would you repeat it again? Yeah. No, the third part is, you've identified $100 million right now and have disclosed publicly here a $100 million of low return, you know, more strategic divestiture assets. Is it limited to that, or do you have, you know, is there a longer runway on lower ROIC assets that you would be willing to divest? And what is your hurdle rate for ROIC? Great question, the last part of it. We think it's somewhere around 10%, but we're still kind of formulating that internally. You know, one of the challenges of many of the investments that we've made over the years, Eric, and you'll appreciate this, is that when you make an investment in land and water, which fundamentally is appreciating, you've got a lot of capital tied up there, which, you know, you don't really realize the full benefit of the return on that invested capital till you divest that land and that water. Primarily, our game plan has not been to divest land and water, except after kind of looking at the inventory of some of the assets, we've seen an opportunity to do that. I think very profitably, but also very beneficially because in some of these situations, the assets have been performing suboptimally or are sort of right on the cusp of needing significant additional investment into them, so it's the right time to begin to make these transitions. The first part of your question is, we identified $100 million of opportunity, but let's just say there's a significantly greater amount that we're working on, and maybe twice that. It'll really just come down to what the market will bear and our success in finding willing buyers for those assets that are being marketed right now. Our weighted average cost of capital is somewhere just below 6%. At this point, as you know, we've been a LIBOR plus 150 borrower for a long time. As we see these rates going up, which is obviously part of the debt paydown program, but the goal would be to get obviously above 6%, so you're not destroying value, and somewhere towards 10%, as a hurdle. Thank you, Mark. I appreciate that, you know, that clarity. The final question I have for you guys is this is really, you know, just kinda your thoughts about California, the drought. It's drying up like a prune, and you're not in the prune business. I've been watching the, you know, the water levels in Lake Powell, and I mean, it is pretty serious stuff. We're starting to see water rationing in California, et cetera, et cetera. I know you guys have tremendous water rights, et cetera, but how is all this gonna play out in California agriculture? I'm not talking just you, I'm talking almonds. You know, almonds are very water intensive. Are they gonna get the water down from Northern California to Southern California to make almonds? I guess I'm just really curious on the California drought and how your perspective on it. No, thank you, Eric, and I'll try to give just sort of our thoughts on it. You know, we've been around for 130 years, and we've been monitoring the cycles in weather and in rainfall and snowpack for 130 years. We've seen prolonged periods of drought, and we've seen prolonged periods of wet. Obviously right now, the West Coast is in a prolonged period of drought. What makes the situation really kinda scary right now is that you've got politicians that are willing to sacrifice productive farmland to save fish and the environmental agenda, and then obviously the urban agenda and the requirement to provide fresh water for urban centers. It's making it tougher and tougher as farmers for us to reliably count on, you know, the politicians to protect our water and our water rights, especially our riparian rights that come from the snowpack and the snow melt in the Sierra Nevada mountains. It was a very low snowpack this year, and so the allocation of water went down to historically low levels this year. That's what's putting all the pressure on the Northern California assets this year. We believe that our assets are in pretty good shape, and we are farming in areas where we have some of the first access to the groundwater in our groundwater pumping, but also typically very reliable supplies of riparian rights through the canals and the riparian ditches that come out of the rivers. We believe long term, we are in good shape, but this year has been an especially challenging year, not only for us, but for everybody in the San Joaquin Valley. The further west you go in the San Joaquin Valley, the less water there is to the point where many producers have no access to water. You are going to see quite a bit of the agriculture start coming out in the valley. What's going on in Arizona or in the Colorado River, that's not necessarily driven by drought. That's driven more by systemic over allocation of that water, although it is influenced by the drought and the snowpack in the Rocky Mountains. That situation's different than what's going on in California. I guess to complete the story quickly, the water rights that we have from groundwater pumping in Ventura County in Southern California are very strong, and we have very deep aquifers that can sustain us through these times of low rainfall and challenged rainfall. I share your concern, but at the same time, I think the right way to summarize it's gonna get more and more dynamic, and it's gonna create opportunities, but there will be winners and there will be losers as it relates to access to water. Okay, great. Thanks, guys. I'll follow up later. Thanks for the comments. Thank you. Ladies and gentlemen, we have reached the end of today's question and answer session. I would like to turn this call back over to Mr. Harold Edwards for closing remarks. Thank you, operator, and thank you for all your questions and your interest in Limoneira. Have a great day. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation, and enjoy the rest of your day.