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Yuki Nishio: [Foreign Language] Now I'd like to turn this call over to KK, Senior Vice President, JAPAC and CFO. S.Krishna Kumar: Thank you, Nishio-san. Good afternoon, everyone, and welcome to Oracle Japan's Second Quarter and Fiscal Year 2026 Earnings Conference Call. We achieved excellent results this Q2, particularly in our cloud business, reinforcing our position as a leading cloud vendor. While shifting our focus to cloud, we have also maintained steady order intake in our license business. We are pleased to share that 2 months ago, we announced our fourth alloy partner in Japan, SoftBank. We have initiated a collaboration to offer services with data sovereignty by operating data and systems in the cloud under our country's jurisdiction. Based on this partnership, SoftBank will launch Cloud PF type A, a cloud platform service tailored for the Japanese market starting from April 2026. In addition, AI services provided through Oracle Cloud Infrastructure will also be rolled out as they become available. We had a lot of cloud customers in various industries like public sector, manufacturing and financial industries. So now let me give you some examples. Number one, ITOKI Corporation. ITOKI has developed a predictive maintenance system that detects signs of malfunctions in automated logistics warehouses. Using Oracle's AI technology, leveraging Oracle autonomous AI database and Oracle Cloud Infrastructure data science, the system collects and analyzes operational data automated warehouses with AI to identify potential issues in advance. In the logistics industry, where automation and labor-saving measures are rapidly advancing due to labor shortages, sudden equipment downtime poses significant risk to production and planning. To address these challenges, ITOKI has developed a predictive maintenance system, Smart Maintenance, that enables the visualization of operational status and analysis of operational data to detect signs of malfunction. This system reduces downtime and supports planned maintenance. And now what I'm saying is going to be very important. By combining Oracle AI Vector Search, LLMs and customers' proprietary data, the system delivers highly accurate responses. Additionally, it enables rapid development and deployment of machine learning models within database even at large scale. This is an extremely important development especially for Japan, and we are going to see more and more adoption across industries of these technologies. Customer #2, Neo First Life Insurance. Neo First Life Insurance, a member of Dai-ichi Life Co. has surpassed 1 million policies by providing optimal and comprehensive coverage at affordable premiums along with fast and simple online support. The company has adopted Oracle Database at Azure as the database foundation for its insurance policy management. By implementing Oracle Database at Azure, on Oracle Cloud Infrastructure hosted within Microsoft Azure data centers, Neo Life -- Neo First Life ensures high availability and scalability for its mission-critical policy management system, which manages over 1 million contracts while optimizing costs. Customer #3, Tokio Marine Holdings. Tokio Marine has achieved profit growth, particularly in its overseas businesses through operations spanning 57 countries worldwide. As they expanded, there was a growing need for a more advanced management system that could facilitate the timely collection and analysis of overseas group companies' performance to enable decision-making and support smooth communication across group companies. To address this, the company has implemented Oracle Fusion Cloud EPM as its global management system. This allows for construction of interfaces without altering the accounting systems of the overseas group companies, enabling efficient and timely collection of information consistent with those of overseas subsidiaries. As a result, various management performance indicators can now be analyzed in accordance with the granularity of the segment information maintained by the overseas group companies. These were just to give you a sense of the broad outreach in the market that we have with our different products and services and to undermine Oracle's presence in most mission-critical systems applications and industries. Now let me move to the numbers. Our total revenue was JPY 134.677 billion growing at 7.5% and compared to previous year, driven by strong growth in our cloud revenue. Total cloud revenue was JPY 39.129 billion, up 38.3% and now represents 29% of the total company revenues. Infrastructure consumption revenues had very strong momentum, which includes autonomous database. Operating income was JPY 42.659 billion, increasing 1.8%. Net income was JPY 29.913 billion, up 1.9%. Total revenue and all profit categories hit record high for the second quarter. We also have a robust pipeline for the second half of the year. And at this point in time, I intend to stick with my revenue guidance for the year. Thank you very much. Back to you, Nishio-san. Yuki Nishio: [Foreign Language] [Operator Instructions] So the first question from Matthew of JPMorgan. It is about AI-related revenue and the breakdown of the percentage as well as growth rate. S.Krishna Kumar: Well, we don't break down revenues by AI because AI is embedded in all our products. So we can't identify sort of AI revenue separately. But the fact is that AI is driving and will drive our future growth in Japan. The segments that I have that we already split for public consumption is what you see in the supplementals, and they will continue to be the same. Thank you very much. Yuki Nishio: [Foreign Language] The second question is from Kikuchi-san of SMBC Nikko Securities. You mentioned that the second half pipeline is robust. So could you elaborate what kind of pipeline is it? And the license in the first half was a little weak. So could you tell us that the pipeline of the license is stronger in the second half? Or is it the robustness comes from the alloy-related business? S.Krishna Kumar: Thank you for the question. It is a mixture of everything. We do have a strong license pipeline in the second half. And by the way, we do expect our license to decline in small percentages because the future is in cloud and our cloud revenue -- growth in our cloud revenue will overcome the decline in license revenues as we go into the future. So yes, our outlook for the second half for license continues to be strong as expected, and growth will continue to come from cloud revenues. Yuki Nishio: [Foreign Language] Another question from Matthew from JPMorgan. So about the financing of the parent company, the Oracle Corporation, and as well as the cash flow. There are some concerns and probably that is impacting the share price of Oracle Japan. We understand that basically, they are not related. But if you can comment on the potential increase of the loan to the parent company as well as this concern about the minority shareholder, we would appreciate it. S.Krishna Kumar: Oracle Japan is an independent company, and we finance our own growth. We rely on the corporation for the intellectual property that it supplies to us, and it will continue to do so. So I don't think anything that happens at Oracle Corporation impacts Oracle Japan's independent business. I think I would leave it at that. Thank you. Yuki Nishio: [Foreign Language] Another question from Kikuchi-san of SMBC Nikko. The question is that the first half expenses, the personnel cost especially increased year-on-year. But personnel cost was up from the second half of the previous year. So is it okay to forecast that this growth is smaller than the year before? And are there any other expenses which are likely to increase in the second half? S.Krishna Kumar: So for overall expenses at this point in time, we don't see any extraordinary increases or changes in the second half. There will be the normal increases that you would expect to correspond to a growing business. Regarding the first half personnel expenses, there was some onetime restructuring expenses. As we continue to look at our organization and refresh our people with the right skill sets to support future Oracle Corporation's growth. Some of these expenses have to be incurred at some point. So it's basically that it's a onetime expense. Yuki Nishio: [Foreign Language] [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]
Yuki Nishio: [Foreign Language] Now I'd like to turn this call over to KK, Senior Vice President, JAPAC and CFO. S.Krishna Kumar: Thank you, Nishio-san. Good afternoon, everyone, and welcome to Oracle Japan's Second Quarter and Fiscal Year 2026 Earnings Conference Call. We achieved excellent results this Q2, particularly in our cloud business, reinforcing our position as a leading cloud vendor. While shifting our focus to cloud, we have also maintained steady order intake in our license business. We are pleased to share that 2 months ago, we announced our fourth alloy partner in Japan, SoftBank. We have initiated a collaboration to offer services with data sovereignty by operating data and systems in the cloud under our country's jurisdiction. Based on this partnership, SoftBank will launch Cloud PF type A, a cloud platform service tailored for the Japanese market starting from April 2026. In addition, AI services provided through Oracle Cloud Infrastructure will also be rolled out as they become available. We had a lot of cloud customers in various industries like public sector, manufacturing and financial industries. So now let me give you some examples. Number one, ITOKI Corporation. ITOKI has developed a predictive maintenance system that detects signs of malfunctions in automated logistics warehouses. Using Oracle's AI technology, leveraging Oracle autonomous AI database and Oracle Cloud Infrastructure data science, the system collects and analyzes operational data automated warehouses with AI to identify potential issues in advance. In the logistics industry, where automation and labor-saving measures are rapidly advancing due to labor shortages, sudden equipment downtime poses significant risk to production and planning. To address these challenges, ITOKI has developed a predictive maintenance system, Smart Maintenance, that enables the visualization of operational status and analysis of operational data to detect signs of malfunction. This system reduces downtime and supports planned maintenance. And now what I'm saying is going to be very important. By combining Oracle AI Vector Search, LLMs and customers' proprietary data, the system delivers highly accurate responses. Additionally, it enables rapid development and deployment of machine learning models within database even at large scale. This is an extremely important development especially for Japan, and we are going to see more and more adoption across industries of these technologies. Customer #2, Neo First Life Insurance. Neo First Life Insurance, a member of Dai-ichi Life Co. has surpassed 1 million policies by providing optimal and comprehensive coverage at affordable premiums along with fast and simple online support. The company has adopted Oracle Database at Azure as the database foundation for its insurance policy management. By implementing Oracle Database at Azure, on Oracle Cloud Infrastructure hosted within Microsoft Azure data centers, Neo Life -- Neo First Life ensures high availability and scalability for its mission-critical policy management system, which manages over 1 million contracts while optimizing costs. Customer #3, Tokio Marine Holdings. Tokio Marine has achieved profit growth, particularly in its overseas businesses through operations spanning 57 countries worldwide. As they expanded, there was a growing need for a more advanced management system that could facilitate the timely collection and analysis of overseas group companies' performance to enable decision-making and support smooth communication across group companies. To address this, the company has implemented Oracle Fusion Cloud EPM as its global management system. This allows for construction of interfaces without altering the accounting systems of the overseas group companies, enabling efficient and timely collection of information consistent with those of overseas subsidiaries. As a result, various management performance indicators can now be analyzed in accordance with the granularity of the segment information maintained by the overseas group companies. These were just to give you a sense of the broad outreach in the market that we have with our different products and services and to undermine Oracle's presence in most mission-critical systems applications and industries. Now let me move to the numbers. Our total revenue was JPY 134.677 billion growing at 7.5% and compared to previous year, driven by strong growth in our cloud revenue. Total cloud revenue was JPY 39.129 billion, up 38.3% and now represents 29% of the total company revenues. Infrastructure consumption revenues had very strong momentum, which includes autonomous database. Operating income was JPY 42.659 billion, increasing 1.8%. Net income was JPY 29.913 billion, up 1.9%. Total revenue and all profit categories hit record high for the second quarter. We also have a robust pipeline for the second half of the year. And at this point in time, I intend to stick with my revenue guidance for the year. Thank you very much. Back to you, Nishio-san. Yuki Nishio: [Foreign Language] [Operator Instructions] So the first question from Matthew of JPMorgan. It is about AI-related revenue and the breakdown of the percentage as well as growth rate. S.Krishna Kumar: Well, we don't break down revenues by AI because AI is embedded in all our products. So we can't identify sort of AI revenue separately. But the fact is that AI is driving and will drive our future growth in Japan. The segments that I have that we already split for public consumption is what you see in the supplementals, and they will continue to be the same. Thank you very much. Yuki Nishio: [Foreign Language] The second question is from Kikuchi-san of SMBC Nikko Securities. You mentioned that the second half pipeline is robust. So could you elaborate what kind of pipeline is it? And the license in the first half was a little weak. So could you tell us that the pipeline of the license is stronger in the second half? Or is it the robustness comes from the alloy-related business? S.Krishna Kumar: Thank you for the question. It is a mixture of everything. We do have a strong license pipeline in the second half. And by the way, we do expect our license to decline in small percentages because the future is in cloud and our cloud revenue -- growth in our cloud revenue will overcome the decline in license revenues as we go into the future. So yes, our outlook for the second half for license continues to be strong as expected, and growth will continue to come from cloud revenues. Yuki Nishio: [Foreign Language] Another question from Matthew from JPMorgan. So about the financing of the parent company, the Oracle Corporation, and as well as the cash flow. There are some concerns and probably that is impacting the share price of Oracle Japan. We understand that basically, they are not related. But if you can comment on the potential increase of the loan to the parent company as well as this concern about the minority shareholder, we would appreciate it. S.Krishna Kumar: Oracle Japan is an independent company, and we finance our own growth. We rely on the corporation for the intellectual property that it supplies to us, and it will continue to do so. So I don't think anything that happens at Oracle Corporation impacts Oracle Japan's independent business. I think I would leave it at that. Thank you. Yuki Nishio: [Foreign Language] Another question from Kikuchi-san of SMBC Nikko. The question is that the first half expenses, the personnel cost especially increased year-on-year. But personnel cost was up from the second half of the previous year. So is it okay to forecast that this growth is smaller than the year before? And are there any other expenses which are likely to increase in the second half? S.Krishna Kumar: So for overall expenses at this point in time, we don't see any extraordinary increases or changes in the second half. There will be the normal increases that you would expect to correspond to a growing business. Regarding the first half personnel expenses, there was some onetime restructuring expenses. As we continue to look at our organization and refresh our people with the right skill sets to support future Oracle Corporation's growth. Some of these expenses have to be incurred at some point. So it's basically that it's a onetime expense. Yuki Nishio: [Foreign Language] [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]
Keri August: Good afternoon, ladies and gentlemen, and welcome to the Good Times Restaurants Inc. Fiscal 2025 Fourth Quarter and Year-end Earnings Call. I am Keri August, the company's Senior Vice President of Finance and Accounting. By now, everyone should have access to the company's earnings release, which is available in the Investors section of the company's website. As a reminder, a part of today's discussion will include forward-looking statements within the meaning of federal securities laws. These forward-looking statements are not guarantees of future performance, and therefore, you should not put undue reliance on them. These statements involve known and unknown risks, which may cause the company's actual results to differ materially from results expressed or implied by the forward-looking statements. Such risks and uncertainties include, among other things, the market price of the company's stock prevailing from time to time, the nature of other investment opportunities presented to the company, the disruption to our business from pandemics and other public health emergencies; the impact of staffing constraints at our restaurants, the impact of supply chain constraints and inflation, the uncertain nature of current restaurant development plans and the ability to implement those plans and integrate new restaurants. Delays in developing opening new restaurants because of weather, local permitting or other reasons, increased competition, cost increases or ingredient shortages, general economic and operating conditions, risks associated with our share repurchase program, risks associated with the acquisition of additional restaurants, adequacy of cash flows and the cost and availability of capital or credit facility borrowings to provide liquidity. Changes in federal state or local laws and regulations affecting our restaurants, including wage and tip credit regulations and other matters discussed under the Risk Factors section of Good Times annual report on Form 10-K for the fiscal year ended September 24, 2024, and other reports filed with the SEC, including Form 10-K for the fiscal year ended September 30, 2025. During today's call, we will discuss non-GAAP measures, which we believe can be useful in evaluating our performance. The presentation of this additional information should not be considered in isolation or as a substitute for results prepared in accordance with GAAP and reconciliation to comparable GAAP measures available in our earnings release. And now I would like to turn the call over to our Chief Executive Officer, Ryan Zink. Ryan Zink: Thank you, Keri, and thank you all for joining us today. As have been reported by other company-operated quick service burger companies, the fourth fiscal quarter was a challenging 1 for us, in particular, at our Good Times concept. The combination of soft sales and higher costs most specifically, the significantly elevated cost of ground beef put a dent in profitability for the quarter. Keri will go into details surrounding the financial performance during the quarter, but it goes without saying that we are disappointed in the results and committed to immediate improvement. Of note, although the same-store sales at Good Times remained negative in the fourth quarter, the 6.6% decline represented a 240 basis point sequential improvement from the fiscal third quarter. And for the first 11 weeks of the first fiscal quarter, Good Times same-store sales were down approximately 3.6% compared to the same time period in the prior year. Craig Soto, our Director of Operations, for Good Times continues to demonstrate strong leadership and has been holding a higher level of accountability among above store leaders, which is cascaded down to our restaurant level general managers. Craig is focused on realigning general manager schedules to better align the time GMs are in restaurant with peak revenue periods, which is creating greater GM level awareness and interaction with team members throughout the day, enabling them to address product and service opportunities that exist primarily in the dinner and late-night dayparts. Craig, along with our learning and development team, have made significant strides in improving restaurant-level training paving the way for us to roll out true cook to order among all of our burger products with minimal impact on speed of service. We have several different price tiers within our system and remain sensitive to menu price increases as the quick service burger segment has earned a poor reputation recently for value as a result of the significant price increases major players have taken in the years since the pandemic. Our core menu pricing at Good Times remains near its lowest premium to our large competitors in fast food as we have only taken approximately 1% of menu price, since January of 2024. With our upcoming cook-to-order process and continued improvements in ops execution, we believe we can re-earn a premium to those competitors over time. We continue to be averse to large-scale discounting due to its impacts on profitability however, we will be addressing value concerns with highly targeted value promotions starting this spring and expect expanded offerings through our GT Rewards loyalty program and a recently refreshed mobile app meant to simplify the mobile ordering experience. For Bad Daddy's, although our same-store sales weakened during the fourth quarter, they have improved sequentially to date in the first quarter and were down approximately 1.6% through the first 11 weeks of the quarter compared to the same time period in the prior year. Same-store sales improvement has been most evident in our Colorado restaurants marking a change in trend from 2025, when our Colorado restaurants had been a drag on same-store sales for the Bad Daddy's system. Similar to Good Times, we've made some targeted pricing adjustments and have made some upward adjustments to our bad a** margarita pricing in the fall. We currently have a blended year-over-year price increase covering food and beverage of less than 1% and expect an average year-over-year price increase for the first quarter of approximately 1.7%. Our fall product promotion, which, among other items, featured a giant shareable Bavarian pretzel served with a house-made sauce trio of Jalapeño Cheddar, Sam Adams Beer Cheese and whole grain Dijonnaise, was a hit with our guests, and we see opportunity for the pretzel to be included in our core menu at some point in the future. Our holiday promotion includes the chocolate cookie cheesecake that is made in-house and has satisfied a long-term guest request for a chocolate dessert. Similar to the Pretzel, we see the Cheesecake as a potential future core menu addition. Following a winter promotion anchored by a Mediterranean Power Bowl and 2 regional burger features, we expect to move to a burger of the month platform, which will simplify messaging around the product feature, enable a sharper focus on product execution and salesmanship, but more importantly, will feature approachable and familiar items to our guests, but still with Bad Daddy's quality, and scratch-made ingredients. I'll now turn the call over to Keri for a review of our performance during the quarter. Keri August: Thank you, Ryan. Let's review this quarter's results. Total revenues decreased approximately 5.1% for the quarter to $34 million and decreased approximately 0.5% compared to our all-time record fiscal year 2024 sales to $141.6 million. We'll start by going through Bad Daddy's results. Total restaurant sales decreased $1.7 million to $24 million for the quarter and decreased $2.2 million to $101.4 million for the full year. The sales decrease for the quarter was primarily driven by reduced customer traffic as well as the closure of the Longmont, Colorado restaurant in the fourth quarter of fiscal 2024, partially offset by menu price increases. Our average menu price during the quarter was 0.4% higher than Q4, 2024. Same-store sales decreased 4.6% for the quarter with 38 Bad Daddy's in the comp base at quarter end. As Ryan mentioned, same-store sales have improved into the first quarter of the new year, with the most significant improvement in our Colorado restaurants. We expect an average price increase of approximately 1.7% for the first quarter 2026. With the exception of certain targeted adjustments due to menu engineering, we do not expect any significant price increases over the next 6 months. Food and beverage costs were 31.6% for the quarter, a 40 basis point increase from last year's quarter. The increase is primarily attributable to record high ground beef prices in fourth quarter 2025, as well as significantly higher prices for other proteins over the prior year quarter, partially offset by the impact of the 24% average increase in menu pricing. Thus far in the first quarter 2026, we have experienced lower input costs and despite the large number of complementary burgers for our military guests on Veterans Day, expect food and beverage costs as a percent of sales to improve quarter-over-quarter. Labor costs increased by 140 basis points compared to the prior year quarter to 35.7% for the quarter. This increase as a percentage of sales is primarily attributable to lower team member productivity resulting from sales deleverage. Although we expect improvement in this metric in the current year, in January, Colorado's minimum wage increases to $15.16, a 2.4% increase and the tipped minimum wage increases to $12.14, a 3% increase. Occupancy costs were 6.7%, an increase of 50 basis points from the prior year quarter. The increase is primarily due to a decrease in benefit from the GAAP required noncash rent adjustments between the quarterly periods. Other operating costs were 16% for the quarter, an increase of 80 basis points primarily due to increased repair and maintenance and utility expenses. Overall, restaurant-level operating profit, a non-GAAP measure, for Bad Daddy's was approximately $2.4 million for the quarter or 9.9% of sales compared to $3.4 million or 13.2% last year, primarily due to increases in labor and food and beverage costs as well as the deleveraging impact of lower sales on various fixed costs. Moving over to Good Times, total restaurant sales for company-owned restaurants decreased approximately $0.3 million to $9.7 million for the quarter compared to the prior year fourth quarter and increased $1.2 million to $39.2 million for the year compared to the 2024 fiscal year. Same-store sales decreased 6.6% for the quarter with 27 Good Times restaurants in the comp base at quarter end. The average menu price for the quarter was approximately the same as the prior year quarter. We have taken a small menu price increase for the first quarter of fiscal 2026 and currently expect to take only modest price increases as we have assessed our relative pricing position in the market. We expect to monitor competitive pricing in January and continue to make very targeted adjustments to the pricing of specific menu items, but believe it is unlikely we will take any significant across-the-board price increases. Food and packaging costs were 32.1% for the quarter, an increase of 120 basis points compared to last year's quarter. As with Bad Daddy's, we experienced record high beef prices during the quarter. We also saw significantly higher costs for bacon and eggs. As is the case with Bad Daddy's, input costs have decreased into the first quarter, and we expect food and beverage costs as a percent of sales to improve quarter-over-quarter. Total labor cost increased to 35.9%, a 200 basis point increase from the 33.9% we ran during last year's quarter due to higher average wage rates resulting from market forces and the CPI index minimum wage in Denver and the state of Colorado, as well as decreased productivity due to sales deleverage. Occupancy costs were 9.1%, an increase of 10 basis points from prior year quarter. Other operating costs were 15% for the quarter, an increase of 110 basis points, primarily due to increased customer delivery, technology and utility expenses. Good Times restaurant-level operating profit decreased by $0.4 million for the quarter to $0.8 million. As a percent of sales, restaurant-level operating profit decreased by 420 basis points versus last year to 8% due to elevated costs throughout the P&L. Combined general and administrative expenses were $2.4 million during the quarter or 7% of total revenues, a decrease of 70 basis points from the prior year quarter. Primarily related to decreased multi-unit supervision costs, legal and professional services and outsourced accounting fees as well as health insurance underwriting costs, partially offset by an increase in recruiting and training related costs. We anticipate 6% to 7% general and administrative costs in fiscal 2026. Our net loss to common shareholders for the quarter was $3,000 or $0.00 per share versus net income of $0.2 million, $0.02 per share in the fourth quarter last year. There was approximately $0.5 million of income tax benefit recorded during the current quarter versus $0.4 million in the prior year quarter. Adjusted EBITDA for the quarter was negative $74,000 compared to $1.3 million for the fourth quarter of 2024. We finished the quarter with $2.6 million in cash and $2.3 million of long-term debt. And now I will turn the call back to Ryan. Ryan Zink: Thank you, Keri. Abby, we can open the call for questions at this time. Operator: [Operator Instructions] And we have no questions at this time. I will turn the conference back over to Mr. Ryan Zink. Ryan Zink: Thank you, Abby. Although the fourth quarter was a difficult one for our concepts, the first quarter of fiscal 2026 is shaping to mark improvement in same-store sales and in adjusted EBITDA. Our product and promotional road map at both concepts is robust and targeted towards broadcast appeals, and we continue to drive operating improvements translating into great guest experiences. I am proud of our leaders and team members in our restaurants, who each day deliver memorable experiences for our guests and who ultimately are the ones who create value for our shareholders. Thank you all for joining us today. And in conclusion, I wish all of you as well as all of the members of the Good Times and Bad Daddy's teams happy holidays. Operator: And ladies and gentlemen, this concludes today's call, and we thank you for your participation. You may now disconnect.
Operator: Greetings and welcome to Limoneira's Fourth Quarter Fiscal Year 2025 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. It is now my pleasure to introduce your host, John Mills with ICR. Thank you, and you may begin. Good afternoon, everyone, and thank you for joining us for Limoneira's fourth quarter Fiscal Year 2025 Conference Call. John Mills: On the call today are Harold Edwards, President and Chief Executive Officer, and Mark Palamountain, Executive Vice President and Chief Financial Officer. By now, everyone should have access to the fourth quarter fiscal year 2025 earnings release, which went out today at approximately 4:05 PM Eastern Time. If you have not had a chance to view the release, it is 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. Before we begin, we would like to remind everyone that prepared remarks contain forward-looking statements. 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 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 or operations, particularly when comparing underlying results from period to period. Provide 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 earnings per share to the most directly comparable GAAP financial measures is included in the company's press release, which has been posted to its website. And with that, it is my pleasure to turn the call over to the company's President and CEO, Mr. Harold Edwards. Harold Edwards: Thanks, John, and good afternoon, everyone. Today, I want to update you on the substantial progress we have made in transforming Limoneira's business model. Over the past two years, we have systematically addressed the fundamental oversupply in the global lemon market by repositioning our company around multiple profit centers and dramatically improving our cost structure. The strategic initiatives we began implementing in fiscal year 2023 were driven by a clear assessment of market realities. We took decisive action to reduce our exposure to volatile lemon pricing while building sustainable competitive advantages. In 2025, we accelerated this work by reducing future costs to position us for stronger fiscal year 2026 results. Our return to Sunkist exemplifies this strategy in action. In fiscal year 2026, we expect to generate $10 million in cost savings compared to fiscal year 2025. Importantly, Sunkist provides enhanced customer access to premium accounts and major US retailers through a full category citrus offering. This positions us to deliver comprehensive solutions for retail buyers while removing pricing pressure from the marketplace and strengthening both our packing margins and grower partner relationships. Another key initiative involved expanding our avocado offering. Today, we have 1,500 acres planted with only 800 acres currently bearing fruit. The additional 700 acres will begin bearing fruit over the next three to four years, representing a near 100% increase in our avocado production capacity. California avocados command premium pricing due to superior quality, and our strategic location provides logistical advantages to the highest per capita consumption markets in the Western United States. Our strategic initiatives extend well beyond agriculture. We have our planned 50/50 organic recycling joint venture with Agerman that we expect to process 300,000 tons of organic waste annually and generate $4 to $5 million in additional EBITDA beginning in fiscal year 2027. We also have our real estate development project, Harvest at Limoneira. We continue to expect future distributions to total $155 million over the next five fiscal years. Phase three of the project consists of approximately 500 home lots and 300 apartments. Plus, we have an additional 35-acre East Area Two medical pavilion development that we believe could begin to be monetized in fiscal year 2026. Additionally, we have Limco Del Mar, our 221-acre agricultural property that is infill property within the city of Ventura, which represents a strategic asset with potential for residential development and significant long-term value creation. We are also unlocking value by divesting non-strategic assets and monetizing our water rights to fuel this transformation and strengthen our balance sheet. We successfully completed the sale of our Chilean assets in November for $15 million. We are now advancing the monetization of our Windfall Farms vineyard in Paso Robles and Argentina agricultural assets together valued at approximately $40 million, with completion targeted by the end of fiscal year 2026. Simultaneously, our water modernization strategy is gaining momentum. We realized $1.7 million from the sales of Santa Paula Basin pumping water rights this past year and are positioned to capture an additional $50 to $70 million in value through fiscal year 2027 from our class three Colorado River water rights and Santa Paula Basin conserved pumping rights. These represent a transformation of our business model, shifting from a focus on oversupplied lemons to higher demand avocados, optimizing our asset base through strategic divestitures and partnerships, and operating with a more asset-light structure across multiple profit centers. Fiscal year 2026 will mark the beginning of this transformation's financial impact, with multiple value drivers converging simultaneously. We expect to realize a 50% reduction in SG&A, or approximately $10 million in savings in fiscal year 2026 from our operational restructuring initiatives completed in 2025. Our expanding avocado production will begin contributing meaningfully in fiscal year 2027 as our 700 acres of nonbearing trees begin maturing. Additionally, our diversification strategy gains momentum with our planned Agerman organic recycling joint venture moving toward its expected $4 to $5 million EBITDA contribution beginning in fiscal year 2027. Combined with continued asset optimization and reduced commodity exposure, we expect fiscal year 2026 to deliver substantially improved financial performance. The proof points are clear. Our cost structure is dramatically improved. Our customer access is enhanced. Our product mix is optimized. And our asset base is being monetized. These are strategic initiatives that we believe will drive financial results beginning in fiscal year 2026. As our cash generation improves, we will evaluate capital allocation opportunities, including share repurchases if our stock price does not reflect our operational improvements, debt reduction, and potential dividend increases as our diversified cash flows improve. In closing, Limoneira today is fundamentally different from the company we were eighteen months ago. We have transformed from a commodity lemon producer to a diversified agricultural and real estate company with multiple growth engines and a dramatically improved cost structure. Now let me turn it over to Mark for the financial details, and then we will take your questions. Mark Palamountain: Thank you, Harold, and good afternoon, everyone. Before I begin, I would remind you it is best to view our business on an annual, not quarterly basis due to the seasonal nature of our business. Historically, our first and fourth quarters have been the seasonally softer quarters, while our second and third quarters have been stronger. A pattern that has held true for the fiscal year 2025. However, beginning in fiscal year 2026, our seasonal cadence will shift due to our Sunkist partnership transition. Under this new structure, we expect the cadence of the quarterly results to be as follows: the first and second quarters will be the seasonally softer quarters, while our third and fourth quarters now will be stronger. This represents an important change in our quarterly rhythm that investors should factor into their modeling as we move forward. For 2025, total net revenue was $42.8 million, compared to total net revenue of $43.9 million in the fourth quarter of the previous fiscal year. Agribusiness revenue was $41.3 million compared to $42.5 million in the fourth quarter last year. Other operations revenue was $1.5 million in 2025 compared to $1.4 million in the fourth quarter of last year. Agribusiness revenue for 2025 includes $19.2 million in fresh packed lemon sales, compared to $8.4 million during the same period of fiscal year 2024. Approximately 821,000 cartons of US packed fresh lemons were sold during 2025 at a $23.33 average price per carton compared to 470,000 cartons sold at a $17.95 average price per carton during 2024. Brokered lemons and other lemon sales were $12.5 million and $14.7 million in 2025 and 2024, respectively. The company recognized $300,000 of avocado revenue in 2025 compared to $8.9 million of avocado revenue in the same period of fiscal year 2024. Approximately 396,000 pounds of avocados were sold in aggregate during 2025 at a 79¢ average price per pound compared to approximately 4.6 million pounds sold at a $1.92 average price per pound during 2024. The California avocado crop typically experiences alternate years of high and low production due to plant physiology and was the primary reason for lower volume this year compared to last year. We achieved our avocado volume goal for fiscal year 2025. The company recognized $2.9 million of orange revenue in 2025 compared to $1.7 million in 2024. Approximately 148,000 cartons of oranges were sold during 2025 at a $19.67 average price per carton, compared to approximately 91,000 cartons sold at an $18.99 average price per carton during 2024. Specialty citrus, wine grape, and other revenues were $2.9 million in 2025 compared to $3.5 million in 2024. Due to the termination of our farm management agreement effective 03/31/2025, there was no farm management revenue in 2025 compared to $2.9 million in the same period of fiscal year 2024. Total cost and expenses for 2025 were $53.9 million compared to $46.6 million in the fourth quarter of last year. Operating loss for 2025 was $11.1 million compared to an operating loss of $2.8 million in the fourth quarter of the previous year. Net loss applicable to common stock for 2025 was $8.8 million compared to a net loss applicable to common stock of $2 million in 2024. Net loss per diluted share for 2025 was 49¢ compared to a net loss per diluted share of 11¢ for the same period of fiscal 2024. The increase in net loss and net loss per share compared to the prior year reflects $6.7 million in strategic transformation costs, including expenses related to the Sunkist transition, tree disposals for the expansion of avocado production, and other nonrecurring costs and expenses. In addition, we incurred costs related to a power outage at our storage facilities, which we expect to recover through insurance proceeds in 2026. Adjusted net loss for diluted EPS for 2025 was $8 million or 45¢ per diluted share compared to an adjusted net loss per diluted EPS of $1.6 million or 9¢ per diluted share in the same period of fiscal year 2024. A reconciliation of net income or loss attributable to Limoneira Company to adjusted net income or loss for diluted EPS is provided at the end of the earnings release. Non-GAAP adjusted EBITDA for 2025 was a loss of $7 million compared to income of $1.2 million in the same period of fiscal year 2024. A reconciliation of net income or loss attributable to Limoneira Company to adjusted EBITDA is also provided at the end of our earnings release. Looking beyond this year, the citrus sales and marketing plan we announced with Sunkist is anticipated to enhance our resilience to market volatility by creating a more efficient cost structure. For the fiscal year ended 10/31/2025, total net revenue was $159.7 million compared to $191.5 million last year. The decrease was primarily driven by decreased agribusiness revenues from lemons, avocados, wine grapes, and farm management, partially offset by increased agribusiness revenues from oranges. Operating loss for fiscal year 2025 was $20.4 million compared to an operating loss of $6.2 million last year. Net loss applicable to common stock after preferred dividends was $16.5 million for fiscal year 2025 compared to net income of $7.2 million for fiscal year 2024. Net loss per diluted share for fiscal year 2025 was 93¢ compared to net income per diluted share of 40¢ in fiscal year 2024. For fiscal year 2025, adjusted net loss for diluted EPS was $14 million compared to adjusted net income for diluted EPS of $11 million for fiscal year 2024. Adjusted net loss per diluted share for fiscal year 2025 was 79¢ compared to adjusted net income per diluted share of 62¢ for fiscal year 2024, based on approximately 17.8 million and 17.7 million weighted average diluted common shares outstanding, respectively. The effective tax rates for fiscal year 2025 and 2024 were 22% and 37.9%, respectively. For fiscal year 2025, adjusted EBITDA was a loss of $6.5 million compared to an income of $26.7 million for fiscal year 2024. Turning now to our balance sheet and liquidity. Long-term debt as of 10/31/2025 was $72.5 million compared to $40 million at the end of fiscal year 2024. Debt levels as of 10/31/2025, less $1.5 million of cash on hand, resulted in a net debt position of $71 million at the end of fiscal year 2025. In April 2025, we received $10 million of our share of a $20 million cash distribution from our 50/50 real estate development joint venture with the Lewis Group of Companies. The distribution came from the joint venture's available cash and cash equivalents, which as of 10/31/2025, totaled $31.2 million. Last week, we negotiated more favorable banking covenants that allow us to continue to use the full capacity of our $115 million credit facility, of which we had $41.6 million of availability as of 10/31/2025. Now I would like to turn the call back to Harold to discuss our fiscal year 2026 outlook and longer-term growth pipeline. Harold Edwards: Thank you, Mark. Looking ahead to fiscal 2026, we expect this to be the year our strategic transformation begins delivering measurable financial results. We enter fiscal 2026 with approximately $10 million in anticipated cost savings initiated in fiscal year 2025 that are expected to benefit fiscal year 2026. This includes the benefits of our Sunkist partnership, which will be visible in our fiscal year 2026 results through improved cost structure and enhanced customer relationships. Our avocado expansion continues on schedule, with significant production increases expected in fiscal year 2027 as our nonbearing acreage matures. For fiscal 2026, we are providing the following guidance: fresh lemon volumes of 4 to 4.5 million cartons and avocado volumes of 5 to 6 million pounds. Beyond our core operations, we have several additional value creation opportunities progressing. Our real estate pipeline remains strong with $155 million in expected distributions over the next five fiscal years. The Limco Del Mar entitlement process represents another significant real estate development opportunity. And our planned organic recycling joint venture is expected to contribute meaningful EBITDA beginning fiscal year 2027. We have built a more resilient business model that is less dependent on commodity lemon pricing while creating multiple engines for profitable growth. Operator, we will now open the call to questions. Operator: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, a confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For any participants using speaker equipment, before pressing your star keys. Our first question comes from Puran Sharma with Stephens. You may proceed with your question. Puran Sharma: Good afternoon, and thanks for the question. Just wanted to start off with the partnership here. I know you just mentioned $10 million of cost savings. Just wondering if you could give us a little bit more granularity into kind of operationally how you expect to get that $10 million. And then, also, you did quote better customer relationships in your prepared comments. Just wondering if you could parse that out a little bit more. Maybe, you know, just give us a sense of how much of your lemon volumes are moving toward contracted versus open. And maybe, you know, how this compares to your business before the partnership. Mark Palamountain: Great. Thank you, Puran. I will take the first part around the cost and the cost reduction, and then Harold will go for your second question. So as you recall back in June, we announced our transition to Sunkist that was expected to generate approximately another $5 million, and that is the transition of our sales and marketing team, which most of those employees did go over to Sunkist and expand their program with all of our customers. And as we analyzed the rest of the structure and the program, we really took a deeper check at storage first and foremost and all of our operational processes there. While our sales and marketing plan with Sunkist now has a new cadence which requires more storage, we have successfully renegotiated some of our storage contracts and also utilized some of the Sunkist unused capacities. This should have allowed us to lower transportation costs and also leasing costs. So there is a pretty good split in the $10 million. So five that we started with, which was, you know, the sales employees and all those going over, and then another five relative to storage and operational efficiency, as well as using the opportunity to what we will say right-size our own business, whether in every category from farming, accounting, packing, just to make sure, you know, as we were going to become smaller to get bigger, we had the best platform to be able to do that. And as we go through '26 and start to see that and recognize that, and then pile on the new revenue opportunity as we will double plus our avocado production, I think that is what we are really trying to set ourselves up for. Harold Edwards: And, Puran, I might just follow up with that by saying that when we did a deep dive into our cost structure, and we held ourselves accountable to the entire team that we had put together to advance the marketing and sales efforts, we realized that we were spending all in, including all the administrative support and efforts that went behind the sales and marketing function, about $1.50 a carton for that sales and marketing effort. And by returning to Sunkist now, that is now fixed at 60¢ a carton. So if you multiply that over 4 million to 4.5 million cartons, you see where the savings comes from. As to the second part of your question about stronger marketing and selling opportunities by returning to Sunkist, it is really driven by two things. Number one, we were beginning to face challenges in the retail segment of the market because as a single commodity supplier of just selling lemons, we were really challenged competitively against the other big marketers and sellers like Sunkist who had the full category of citrus. And as we all know, citrus buyers at retail like one-stop shopping. And so by us rejoining Sunkist and becoming part of that supply chain with lemons across their full category of citrus, we now take advantage of much greater access to the top retail customers in the country. But also a lot of their prices are fixed for a period of time, which versus the spot markets give us a much greater pricing advantage, which should manifest itself in better grower returns for our grower partners. But also in greater returns back to our own lemon production as a large lemon grower. And then the last part to the puzzle, which is one of the biggest reasons we returned, is Sunkist has an exclusivity in supply to one of the largest food service buyers of fresh lemons. This one customer makes fresh lemonade in all of their quick-serve restaurants across the country. And they do that by using exclusively Sunkist lemons. And so for us to now become part of Sunkist's lemon supply chain, it gives us access to some of the top food service customers at very excellent pricing, which gives us a greater opportunity for higher fresh utilization but ultimately for higher pricing, not only for our grower partners but also for ourselves as a large lemon producer. Puran Sharma: Great. Appreciate the color there. Was maybe wondering if we could talk about some of the strategic assets or I should say non-core assets that you are selling off. And I wanted to specifically focus in on water. Looks like you made some moves this quarter. I think you have mentioned in the past a range of valuation that you get per acre-foot. How does this compare versus your expectations? And could you maybe go through some of the puts and takes in terms of trying to achieve a higher valuation? Do you get pushback from some of the local governments? We would just love to hear some color regarding your water assets. Harold Edwards: Yes. Water is complex because it sort of follows that when you are dealing with water in water-scarce areas, the value of the water is much higher than when you are dealing with and managing water assets in areas where there is water abundance. We really have two dynamics where we are dealing with local scarcity. One is as we continue to operate our agricultural operations in the Santa Paula Basin, we are surrounded on both sides of our operations by municipalities to the West, the city of Ventura, and to the East, the city of Santa Paula. And as a result of the scarcity and the lack of water supply in both of those municipalities, the opportunity to monetize conserved water rights and pumping rights as we do a better job with conservation and sustainability in our own operations creates opportunities periodically to monetize some of these conserved rights. When a city is following an urban growth mandate, which all cities in California do, there is a certain requirement for new development of residential, commercial, or industrial development to bring water to any specific project. And typically, the developers of these projects do not have water, so they pay a fee in lieu to the city. And the cities then need to go out and purchase the water rights. So we have put ourselves in a position to be one of the suppliers of some of these water rights for some of those opportunities as it relates to opportunities in the Santa Paula Basin. The other interesting water monetization opportunity relates to our assets that we own in Yuma, Arizona, which have class three Colorado River riparian water rights. And as the Department of Interior, the Bureau of Reclamation have mandated that one-third of the consumptive use of the Colorado River be cut, we have put ourselves into position to take advantage of following programs where entities like the Central Arizona Project, like the Bureau of Reclamation, actually pay farmers to not use the water so that water can be diverted off for higher and better uses, which in this case typically is for urban use. And so as a result, those following programs have become very, very valuable. The Colorado River has just ended its 25-year accord that was on the river and is now looking to put the next 25 years of following PER together. We believe that those programs will be put into place by 2026, and we are negotiating and working with other agricultural water owners to figure out the best way to monetize those water rights. But fundamentally, those water rights are very, very valuable and most likely will be contributed to following programs at which we will be paid to not use that water. Puran Sharma: Got it. I appreciate the color there. I will jump back in the queue. Operator: Our next question comes from Gerard Sweeney with ROTH Capital Partners. You may proceed with your question. Gerard Sweeney: Good afternoon, Harold and Mark. Thanks for taking my call. Just following up on the water side. Obviously, you know, the renegotiation of the Colorado River compact is underway starting. I think there was a big comp tab in Vegas last week discussing this. I would imagine my sense is or what I am hearing is that there are going to be a lot of cuts along the river and less allocation. So, you know, specifically impacting Arizona and Southern California. I would believe this would be a strong positive for your water rights strategy. Can you confirm that and maybe provide a little bit of details around it? Mark Palamountain: Yeah. You bet. So as Harold alluded to, we have class three Colorado River water rights, and there are eight different classes throughout the system, which start with the American Indians, the government, and then third is ours, which are original generation farms that were formed in the early to mid-1900s. Following that, subsequently, four, five, six, seven, eight, you have Phoenix, Tucson, Scottsdale, Las Vegas, California, and all of the Western states that have their piece of that pie. It was recently, as we have all watched Lake Mead in the last two to three years with all of the drought, federally mandated that one-third of the water needs to come off the river and getting everyone in the green. So everyone has been in the back room, all of the federal, state, and local agencies paired with local agricultural growers and commercial water users. And I think as you mentioned, that water conference last week was a big step forward. We were not there, but we did hear a lot of it. And a lot of the people that were working negotiations that we are thinking about contributing our water for the better good of that were going very well. Now 12/31/26 is the deadline when everybody needs to agree, which means everyone needs to agree before the summer starts. And, you know, as we see, it is obviously raining in California, and it is about to rain a lot more. And sometimes that makes people complacent. But the water values that people are talking about just, you know, sort of in the back rooms have been double per acre-foot of the current fouling programs and allowing more use of your total acreage. The one part that we are very conscious about is the social aspect of it and the conserved nature of the water. So not just walking away from the water and the community, like, for example, Yuma, Arizona, where we have farmers and jobs and local communities. Part of the whole plan will need to incorporate that. So really going to, as an example, a low-use water crop like agave where you can still have jobs, you can still have economies, and then also have, you know, the rest of those that need, whether it is California, Arizona, or other Western states, to have that water. So I think the answer is yes, yes, and yes. There is going to be a deal that is going to need to be done. People are starting to come to the table and agree. And they will be at higher values. Gerard Sweeney: Just curious on that side since you are class two. Right? So most people, I do not know, understand that it is first in time and place. So class one, the American Indians. They have the most senior water rights, and class three is very senior as well. So that is where you are standing. Is there any talk of cuts down to class three, or would the cuts come in classes that are below you? Or later in time? Mark Palamountain: No. That is a great question because we have always had our eye on that, Jerry. As you know, there are eight tiers. And in times of scarcity or cuts, they cut tier eight first, then seven, six, five, four, three, so on. And all of the discussions that have been held to our level of awareness have been below class three. Down to class five is what we have heard. A lot of the Central Arizona projects, so all the housing that Mark was talking about from Phoenix to Tucson and all of Las Vegas, those are class five water rights. And so that is really where the demand is coming from for all the urban uses of class five water that needs to be replaced with a more senior class. And to your earlier point, that puts us in a great spot. Great position. Yep. To take advantage of that. Gerard Sweeney: Gotcha. Super helpful. Couple more questions. I just before I go to the ad side, but Limco Del Mar, obviously, that is infill land. Right in Okay. In the town. Any ideas on how that develops? And I would imagine that acreage is highly valuable. And when I say how it develops, I am just curious if you have come up to a conclusion whether or not I mean, do you sell it? Do you self-develop it? Do you partner again? And take a similar track with, like, you did at Harvest at Limoneira? Harold Edwards: No. That is a great question. So there are two pieces to this. The first part, which is the heavy lift, is the entitlement piece. As you know, Jerry, in Ventura County, there is a mandate for a public vote to convert an agricultural piece of land into an urban development piece of land. And it follows that people would much rather look at a beautiful orchard than a strip mall and a bunch of condos and houses. And so the trick to gaining entitlements is to build development agreements that have enough benefit to the local communities that they are willing to vote to endure the cost of the loss of the beautiful agriculture and the, you know, the trap that they will have to endure and, you know, just the general inconvenience of development. So there is an art to it. And so what that art involves is a lot of outreach and public charrettes where we will be listening to the local community members tell us what they really want incorporated into this project. And following these public charrettes, which will take place throughout most of 2026, we will then take the ideas that we have pulled together and incorporate them into a specific plan. We will then do all of the environmental impact review and sequel work, which is arduous and comprehensive. And there is just a lot of work, a lot of studying. And then once that is done, we will sit down with the city officials in the city of Ventura to create a development agreement that provides a lot of the benefits that we hope to bring to the community in terms of types of housing and parks and recreations and schools and all kinds of things that will be contemplated. And then once all of that is put together, then we have to go to the polls and have a public vote. If we win that vote, then at that point, that property becomes entitled to convert, at which point then we go to another agency, which is called LAFCO, for the annexation of that property into the city of Ventura. And then we can start the second phase, which is where the biggest value or a lot of the value is created, which is the development phase. Your question related to how we would go about developing it, I think we are not there yet. We are not sure. We, you know, we have great relationships with our development partner at Harvest at Limoneira. We are in discussions with them about the potential of moving forward with Del Mar, but there is a lot of heavy lifting to be done with the entitlement part of the project. So that is really what we are focusing on right now. Gerard Sweeney: Got it. I would imagine there is a pretty hefty increase in value of the land as well when it moves from the entitlement if you were to win the entitlement vote. That is a pretty heavy lift itself. Correct? Harold Edwards: Yeah. And it is a heavy lift. If you get the vote, anecdotally, the value of the land goes from $100,000 an acre to $1 million an acre. Gerard Sweeney: Okey dokey. Well, that is good to know. Good number. It is a good boat to get. Harold Edwards: Yeah. Gerard Sweeney: And I know SQL is not easy too. That is a process. Harold Edwards: That is right. And I do not mean to be flippant about it. It is a very arduous and challenging process. And you only win that vote if you truly have connected with the local community. So that is really what we are really trying to do. Gerard Sweeney: Got it. Switching gears. I do not want to take this over, but switching gears real quick just to the avocado. So I have two questions on that front. The cadence of the 700 acres coming into production, and in calls past, we have talked about the operating income per acre for avocados, if we could touch upon that again. Mark Palamountain: Yeah. So right now, we have 700 acres that are nonbearing at the moment. We have another 250 to 300 acres to plant this year and then the same the following year. So as you see it, and it is still the same in our deck, and I think most people have that, and it is up to date. But next year will be our first year of our first planting. So think about four to five total plantings of 250 acres a year starting in '27 and going all the way through 2021 maturing equally. So as we have, as you know, avocados are alternate bearing. And so as we go through those years, we think we will still have increasing volumes even with those alternate bearing acres. And remember, the new plantings are twice as dense. So instead of 90 trees per acre, 120 trees per acre. So we are expecting an average of about 7,000 pounds an acre if you consider the alternate bearing going forward over a ten-year period. You know, you will have the lows to 10 to 12 and the highs to 25 plus thousand pounds per acre. And we expect anywhere, you know, if we use historical pricing, over the last ten years, was it about $1.33 a pound? This year was a little bit of an anomaly. You saw a big or heavy crop this late summer, which took the price below a dollar. We are starting to see that recover, and then you obviously get the infamous Super Bowl time and Cinco de Mayo when the prices come back. So we are really comfortable with the long-term price of $1.30 plus. And, you know, using anywhere from, you know, $12,000 to $14,000 in operating profit per acre. It ends up costing us about $5,000 to farm it per acre. And, currently, right now, it is about $3,500 to pick and haul it. So, you know, the math off of that might, you know, off $20,000 an acre or $12,000 an acre, it ends up being about $12,000 to $14,000 of operating profit. Gerard Sweeney: Gotcha. I really appreciate it, and I will jump back in queue. Thanks. Operator: Before we move on to our next question, as a reminder, if you would like to ask a question, you may press star and the number one on your telephone keypad to enter the queue. Our next question comes from Mark Smith with Lake Street Capital Markets. You may proceed with your question. Mark Smith: Hi, guys. I want to look first at kind of the expense side of things. You guys talked about streamlining operations and potential cost cutting, and I think you gave some insight into potential SG&A savings next year on the work that you have already done. Could you just give us more update on that? How much of that is worked in the transition to Sunkist and how much is kind of other projects that you have been working on? Mark Palamountain: So good question. It is pretty complex. So, really, November 1 was the start. Right? And so it is never a perfect cutoff line. We had a transition of the Salesforce go over. We actually some of them left a little bit before. Some of them left a little bit after. And then some of the ancillary accounting positions. We did, you remember, transition our whole brokerage business, which is why we will have the large drop in revenue, which was that 6 to 8% commission business. About $30 million. And so that closed out. We actually just finished selling the brokerage business. So you will have some of that cleanup. If you looked at a full calendar year twelve months, probably is the realistic conservative $10 million. But we also think that, in that number, transportation we used to have a packing house up in the Central Valley. We packed District 1 through with about a half million dollars of transportation costs. There are going to be a number of new items that are shut down and no longer this year that are not included in our budgetary purposes or guidance. I think we will be surprised. It will be, you know, as we see it and prove it out. And then, really, you know, we will get through January. We just are finalizing integrating all the computer systems. Sunkist has a different system, obviously, and we just finalized implementing a system of our own. So those are starting to work well together. So a lot of those operational efficiencies, another one, was we renegotiated our lease at Oxnard Lemon that saved us about $700,000 in that one respect. And so we have got some more work to do around storage. So we are going to be learning the transition in Sunkist and being asked to store fruit longer. So we have got to have mother nature as our friend always working with that. But the value proposition from the new Sunkist plan and holding that fruit longer into a higher price market into those Chick-fil-A and Raising Cane's kinds of customers makes a lot of sense to us. And so that is why you saw in our fourth quarter this year, we had our first glimpse into those customers, and it is an average price of over $23. So bottom line is a lot of the people cost have moved out. There will be a little bit of dragging through December. And then it is all right straight into operational, and that is going to be our focus. Mark Smith: Okay. And then just you had mentioned some lemon pricing. Just any insights you can give us into your outlook for kind of lemon pricing here near term or even, you know, through the fiscal year? Mark Palamountain: Yeah. So that is the $10 million question. So last year, we had the Chernobyl market, which I had not seen in my fifteen years here where we had one of the packing houses left Sunkist and with 4 million cartons without a home. And so the only way you sell lemons without a home and real good customers is with price. And so we saw an imbalance in the market that took pricing in February, sometimes below $10. Right now, the price is somewhere just below $20. Typically, we see a dip go into the, you know, the $16-$17 range in sort of February, January, February, March. And a lot of it is contract-based. And so if you do not have much of the market fruit, which now being in the Sunkist system, we do not, you really get that floor protection. And so then going into the summer is what is going to happen again, which we think will be a repeat of next summer because Turkey and Spain had a really tough freeze last year, which will turn into a two-year event. And what happens there is, again, it is all about balance of supply. Most of the Southern Hemisphere fruit will go to Europe this summer instead of coming to the US. And so our fruit, which we will be holding, will be in a better balance. So at the end of the day, I would like to say there would be a two in front of the average price this year. We are not going to put a formal forecast out, but if it plays out like last year, we do not get the low lows in February, then we should have a good opportunity to try to hit that. Mark Smith: Excellent. I think the last question for me is just kind of comfort around the balance sheet. You guys talked about kind of reworking some covenants and stuff. Just any update and thoughts around the debt and kind of your comfort levels. Mark Palamountain: Yeah. So the first thing we want to do is pay down debt when we can get to. I think, you know, $40 million-ish is a good number. We have always had our target on. This year was elevated, obviously, with the operating loss and then the continued, you know, foot on the gas for the CapEx. We also, as you might have seen, we had to our loan was up at term this summer, and so we had to put a new term out there and new conditions. And one of the new conditions was this max leverage debt ratio that came out. And it was new for the bank. It was new for us, and it was backward-looking. Four quarters, which on the face of it, it looked good. But as a company that is in development, i.e., 40% of our acreage is nonbearing, but with a continued expense, it was challenging to have backward-looking measurement. And while you do not breach it until you breach it, obviously, that is from the accounting side and Deloitte. You have to forecast out what looks forward. And so being in that position was something that we were not comfortable in. And the bank, we sat down with everybody at the bank. We went through a good forecast. And we have a new ratio, which is basically a capitalization ratio or a debt or balance sheet-based, which we forecasted out as far as at '27. And it looks like it is in good shape. So it is basically debt divided by assets minus liabilities in a ratio there. So and then the other ratio that we have, which is the debt service coverage ratio, which is basically computing interest expense and your ability to pay. They suspended that measurement until the end of fiscal '27. So really gave us free rein to open up and use our capacity. We have had a great lender in Farm Credit Ag West. And they just showed up again. So that was just very helpful, and it was a real positive. Harold Edwards: Mark, the oversimplified way to try to explain this is that putting all of the efforts we are working on with the avocados, the organic recycling, and our return back to Sunkist is to get our core operating agricultural business to generate consistently more EBITDA while at the same time then using asset monetization and real estate development as the stopgap between now and when that core business is really generating growing cash flows to pay down debt. And to delever that way. So EBITDA up, debt down with a core business that then can operate sustainably and very profitably and begin to generate free cash flow that then, you know, at that point, the world is our oyster, and then we will have some great sort of capital allocation decisions to make. Mark Smith: Okay. Great. Thank you, guys. Operator: This now concludes our question and answer session. I would like to turn the call back over to Harold Edwards for closing comments. Harold Edwards: So I would like to thank you all for your questions and your interest in Limoneira. And finally, I would like to wish you all a very happy holidays. Thank you for your time. Operator: Ladies and gentlemen, thank you for your participation. This concludes today's conference. Please disconnect your lines and have a wonderful day.
Keri A. August: Good afternoon, ladies and gentlemen, and welcome to Good Times Restaurants Inc. Fiscal 2025 Fourth Quarter and Year End Earnings Call. I am Keri A. August, the company's Senior Vice President of Finance and Accounting. By now, everyone should have access to the company's earnings release, which is available in the Investors section of the company's website. As a reminder, a part of today's discussion will include forward-looking statements within the meaning of federal securities laws. These forward-looking statements are not guarantees of future performance, and therefore, you should not put undue reliance on them. These statements involve known and unknown risks, which may cause the company's actual results to differ materially from results expressed or implied by the forward-looking statements. Such risks and uncertainties include, among other things, the market price of the company's stock prevailing from time to time, the nature of other investment opportunities presented to the company, the disruption to our business from pandemics and other public health emergencies, the impact of staffing constraints at our restaurants, the impact of supply chain constraints and inflation, the uncertain nature of current restaurant development plans, and the ability to implement those plans and integrate new restaurants, delays in developing and opening new restaurants because of weather, local permitting, or other reasons, increased competition, cost increases or ingredient shortages, general economic or operating conditions, risks associated with our share repurchase program, risks associated with the acquisition of additional restaurants, adequacy of cash flows, and the cost and availability of capital or credit facility borrowings to provide liquidity, changes in federal, state, or local laws and regulations affecting our restaurants, including wage and tip credit regulations, and other matters discussed under the risk factor section of Good Times annual report on Form 10-K for the fiscal year ended 09/24/2024, and other reports filed with the SEC, including Form 10-K for the fiscal year ended 09/30/2025. During today's call, we will discuss non-GAAP measures, which we believe can be useful in evaluating our performance. The presentation of this additional information should not be considered in isolation or as a substitute for results prepared in accordance with GAAP, and reconciliation to comparable GAAP measures is available in our earnings release. And now I would like to turn the call over to our Chief Executive Officer, Ryan Zink. Ryan M. Zink: Thank you, Keri, and thank you all for joining us today. As has been reported by other company-operated quick-service burger companies, the fourth fiscal quarter was a challenging one for us, in particular, at our Good Times concept. The combination of soft sales and higher costs, most specifically the significantly elevated cost of ground beef, put a dent in profitability for the quarter. Keri will go into details surrounding the financial performance during the quarter, but it goes without saying that we are disappointed in the results and committed to immediate improvement. Of note, although the same-store sales at Good Times remained negative in the fourth quarter, the 6.6% decline represented a 240 basis point sequential improvement from the fiscal third quarter, and through the first eleven weeks of the first fiscal quarter, Good Times same-store sales are down approximately 3.6% compared to the same time period in the prior year. Craig So to, our director of operations for Good Times, continues to demonstrate strong leadership and has been holding a higher level of accountability among above-store leaders, which has cascaded down to our restaurant-level general managers. Craig has focused on realigning general manager schedules to better align the time GMs are in the restaurant with peak revenue periods, which is creating greater GM-level awareness and interaction with team members throughout the day, enabling them to address product and service opportunities that exist primarily in the dinner and late-night dayparts. Craig, along with our learning and development team, have made significant strides in improving restaurant-level training, paving the way for us to roll out true cook-to-order among all of our burger products with minimal impact on speed of service. We have several different price tiers within our system and remain sensitive to menu price increases, as the quick-service burger segment has earned a poor reputation recently for value as a result of the significant price increases major players have taken in the years since the pandemic. Our core menu pricing at Good Times remains near its lowest premium to our large competitors in fast food, as we have only taken approximately 1% of menu price since January 2024. With our upcoming cook-to-order process and continued improvements in ops execution, we believe we can re-earn a premium to those competitors over time. We continue to be averse to large-scale discounting due to its impacts on profitability. However, we will be addressing value concerns with highly targeted value promotions starting this spring and expect expanded offerings through our GT rewards loyalty program, a recently refreshed mobile app meant to simplify the mobile ordering experience. For Bad Daddy's, although our same-store sales weakened during the fourth quarter, they have improved sequentially to date in the first quarter, and we are down approximately 1.6% through the first eleven weeks of the quarter compared to the same time period in the prior year. Same-store sales improvement has been most evident in our Colorado restaurants, marking a change in trend from 2025 when our Colorado restaurants have been a drag on same-store sales for the Bad Daddy's system. Similar to Good Times, we've made some targeted pricing adjustments and have made some upward adjustments to our Badass Margarita pricing in the fall. We currently have a blended year-over-year price increase covering food and beverage of less than 1%, and expect an average year-over-year price increase for the first quarter of approximately 1.7%. Our fall product promotion, which among other items featured a giant shareable Bavarian pretzel served with a house-made sauce trio of jalapeno cheddar Sam Adams beer cheese, whole grain dijonnaise, was a hit with our guests. And we see an opportunity for the pretzel to be included in our core menu at some point in the future. Our holiday promotion includes a chocolate cookie cheesecake that is made in-house and has satisfied a long-term guest request for a chocolate dessert. Similar to the pretzel, we see the cheesecake as a potential future core menu addition. Following a winter promotion anchored by a Mediterranean Power Bowl and two regional burger features, we expect to move to a burger of the month platform, which will simplify messaging around the product feature, enable a sharper focus on product execution and salesmanship, but more importantly, will feature approachable and familiar items to our guests but still with Bad Daddy's quality and scratch-made ingredients. I'll now turn the call over to Keri for a review of our performance during the quarter. Keri A. August: Thank you, Ryan. Let's review this quarter's results. Total revenues decreased approximately 5.1% for the quarter to $34 million and decreased approximately 0.5% compared to our all-time record fiscal year 2024 sales to $141.6 million. We'll start by going through Bad Daddy's results. Total restaurant sales decreased $1.7 million to $24 million for the quarter and decreased $2.2 million to $101.4 million for the full year. The sales decrease for the quarter was primarily driven by reduced customer traffic as well as the closure of the Longmont, Colorado restaurant in 2024, partially offset by menu price increases. Our average menu price during the quarter was 0.4% higher than Q4 2024. Same-store sales decreased 4.6% for the quarter with 38 Bad Daddy's in the comp base at quarter-end. As Ryan mentioned, same-store sales have improved into the first quarter of the New Year, with the most significant improvement in our Colorado restaurants. We expect an average price increase of approximately 1.7% for the quarter 2026. With the exception of certain targeted adjustments due to menu engineering, we do not expect any significant price increases over the next six months. Food and beverage costs were 31.6%, a 40 basis point increase from last year's quarter. The increase is primarily attributable to record high ground beef prices in the fourth quarter of 2025, as well as significantly higher prices for other proteins over the prior year quarter, partially offset by the impact of the 0.4% average increase in menu pricing. Thus far into the first quarter of 2026, we have experienced lower input costs. And despite the large number of complimentary burgers for our military guests on Veterans Day, we expect food and beverage costs as a percent of sales to improve quarter over quarter. Labor costs increased by 140 basis points compared to the prior year quarter to 35.7% for the quarter. This increase as a percentage of sales is primarily attributable to lower team member productivity resulting from sales deleverage. Although we expect improvement in this metric in the current year, in January, Colorado's minimum wage increases to $15.16, a 2.4% increase, and the tipped minimum wage increases to $12.14, a 3% increase. Occupancy costs were 6.7%, an increase of 50 basis points from the prior year quarter. The increase is primarily due to a decrease in benefit from the GAAP-required noncash rent adjustments between the quarterly periods. Other operating costs were 16% for the quarter, an increase of 80 basis points, primarily due to increased repair and maintenance and utility expenses. Overall, restaurant-level operating profit, a non-GAAP for Bad Daddy's, was approximately $2.4 million for the quarter or 9.9% of sales, compared to $3.4 million or 13.2% last year, primarily due to increases in labor and food and beverage costs as well as the deleveraging impact of lower sales on various fixed costs. Moving over to Good Times. Total restaurant sales for company-owned restaurants decreased approximately $300,000 to $9.7 million for the quarter compared to the prior year fourth quarter, and increased $1.2 million to $39.2 million for the year compared to the 2024 fiscal year. Same-store sales decreased 6.6% for the quarter with 27 Good Times restaurants in the comp base at quarter-end. The average menu price for the quarter was approximately the same as the prior year quarter. We have taken a small menu price increase for 2026 and currently expect to take only modest price increases as we have assessed our relative pricing position in the market. We expect to monitor competitive pricing in January and continue to make very targeted adjustments to the pricing of specific menu items but believe it is unlikely we will take any significant across-the-board price increases. Food and packaging costs were 32.1% for the quarter, an increase of 120 basis points compared to last year's quarter. As with Bad Daddy's, we experienced record high beef prices during the quarter. We also saw significantly higher costs for bacon and eggs. As is the case with Bad Daddy's, input costs have decreased into the first quarter, and we expect food and beverage costs as a percent of sales to improve quarter over quarter. Total labor cost increased to 35.9%, a 200 basis point increase from the 33.9% we ran during last year's quarter, due to higher average wage rates resulting from market forces and the CPI index minimum wage in Denver and the state of Colorado, as well as decreased productivity due to sales deleverage. Occupancy costs were 9.1%, an increase of 10 basis points from the prior year quarter. Other operating costs were 15% for the quarter, an increase of 110 basis points primarily due to increased customer delivery, technology, and utility expenses. Good Times restaurant-level operating profit decreased by $400,000 for the quarter to $800,000. As a percent of sales, restaurant-level operating profit decreased by 420 basis points versus last year to 8% due to elevated costs throughout the P&L. Combined general and administrative expenses were $2.4 million during the quarter or 7% of total revenues, a decrease of 70 basis points from the prior year quarter, primarily related to decreased multiunit supervision costs, legal and professional services, and outsourced accounting fees, as well as health insurance underwriting costs, partially offset by an increase in recruiting and training-related costs. We anticipate 6% to 7% general and administrative costs in fiscal 2026. Our net loss to common shareholders for the quarter was $3,000 or $0 per share, versus net income of $200,000 or $0.02 per share in the fourth quarter last year. There was approximately $500,000 income tax benefit recorded during the current quarter versus $400,000 in the prior year quarter. Adjusted EBITDA for the quarter was negative $74,000 compared to $1.3 million for 2024. We finished the quarter with $2.6 million in cash and $2.3 million of long-term debt. And now I will turn the call back to Ryan. Ryan M. Zink: Thank you, Keri. Abby, we can open the call for questions at this time. Operator: Thank you. If you have dialed in and would like to ask a question, please press 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press 1 a second time. If you are called upon to ask your question and are listening via speakerphone on your device, please pick up your handset and ensure that your phone is not on mute when asking your question. Again, it is 1 if you would like to join the queue. Again, it is 1 if you'd like to join the queue. And we have no questions at this time. I will turn the conference back over to Mr. Ryan Zink. Ryan M. Zink: Thank you, Abby. Although the fourth quarter was a difficult one for our concepts, 2026 is shaping up to mark improvement in same-store sales and in adjusted EBITDA. Our product and promotional roadmap at both concepts is robust and targeted towards broad guest appeal, and we continue to drive operating improvements translating into great guest experiences. I am proud of our leaders and team members in our restaurants who each day deliver memorable experiences for our guests and who are ultimately the ones who create value for our shareholders. Thank you all for joining us today. And in conclusion, I wish all of you, as well as all of the members of the Good Times and Bad Daddy's teams, happy holidays. Operator: And ladies and gentlemen, this concludes today's call, and we thank you for your participation. You may now disconnect.
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