Limoneira enters $115 million credit agreement with AgWest Farm Credit

Limoneira Company (NASDAQ:LMNR) has entered into a new Master Loan Agreement with AgWest Farm Credit, PCA, dated June 26, 2025, according to a statement filed with the Securities and Exchange Commission. The agricultural company, currently valued at $288 million, operates with a moderate debt level, maintaining a debt-to-equity ratio of 0.34. According to InvestingPro analysis, the company’s stock is trading above its Fair Value, with additional insights available in the comprehensive Pro Research Report.

The agreement provides Limoneira with a total borrowing capacity of $115 million. Of this, $114 million is available under a revolving credit facility, while $1 million is available under a non-revolving credit facility. The agreement amends and restates a previous loan agreement between the two parties from March 2024.

The initial interest rate for the revolving credit facility is set at 6.600% per annum, with the rate to be automatically adjusted starting July 1, 2025, and on the first day of each subsequent month. The rate will be based on the forward-looking one-month term SOFR, rounded up to the nearest 0.05%, plus a margin ranging from 2.15% to 3.00%, depending on Limoneira’s funded indebtedness to EBITDA ratio. The lender may adjust the margin annually beginning July 1, 2026. All outstanding amounts under the revolving credit facility are due July 1, 2030, and Limoneira may prepay without penalty.

The non-revolving credit facility carries an initial interest rate of 6.900% per annum, which may also be adjusted monthly at the lender’s discretion. Amounts outstanding under this facility are also due July 1, 2030, and can be prepaid without penalty.

Both facilities are secured by a first lien on certain company-owned stock or participation certificates, company funds maintained with the lender, allocated surplus, and agricultural properties in Ventura County, California, as well as related building fixtures, improvements, and investments in mutual water companies.

The agreement includes financial covenants requiring Limoneira to maintain a minimum debt service coverage ratio of at least 1.00:1 for the fiscal year ending October 31, 2025, and at least 1.25:1 for subsequent fiscal years. The company’s total net leverage ratio must not exceed 6.00:1 for the quarter ending July 31, 2026, 5.00:1 for the quarter ending October 31, 2026, and 4.50:1 for later quarters.

This article is based on a press release statement filed with the SEC. The company’s stock has declined 34% over the past six months, reflecting ongoing challenges. Investors seeking deeper insights can access comprehensive analysis and 10 additional ProTips through InvestingPro, including detailed financial health metrics and growth projections.

In other recent news, Limoneira Co reported disappointing second-quarter FY2025 results, missing both earnings per share (EPS) and revenue forecasts. The company announced an EPS of -$0.17, significantly below the expected $0.04, and reported revenue of $35.1 million, falling short of the projected $44.7 million. Limoneira also disclosed a net loss per diluted share of $0.20, contrasting with a net income of $0.35 per share in the previous year. Additionally, the company is merging its citrus operations with Sunkist Growers, expecting annual cost savings of $5 million. This strategic move aims to enhance efficiency and reduce costs by transferring sales and marketing personnel to Sunkist. Limoneira’s long-term debt increased to $54.9 million from $40 million, which could impact its financial flexibility. Looking ahead, the company projects significant growth in avocado production and anticipates generating $155 million from real estate developments over the next six years. The merger with Sunkist is expected to improve Limoneira’s operational foundation and enhance its ability to serve food service and retail customers.

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