Farmland Partners Inc. Q4 FY2021 Earnings Call

Good morning, ladies and gentlemen. Thank you for attending today's Farmland Partners Fourth Quarter 2021 Earnings Conference Call. My name is Sian, and I will be your moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. I would now like to turn the conference over to your host, Paul Pittman from Farmland Partners Incorporated. Please proceed.

Thank you, ma'am. Good morning and welcome to Farmland Partners fourth quarter and full year 2021 earnings conference call and webcast. We appreciate you taking the time to join us for these calls. I'll now turn the call to James for some customary remarks. James?

Thank you, Paul. The press release announcing our fourth quarter and full year earnings was distributed yesterday afternoon. The supplemental package was posted to the Investor Relations section of our website under the sub-header presentations and other materials yesterday afternoon as well. For those who listen to the recording of this presentation, we will remind you that the remarks made here as of today, February 23rd, 2022, will not be updated subsequent to this call. During this call, we will make forward-looking statements, including statements related to the future performance of our portfolio, our identified and potential acquisitions and dispositions, impacts of acquisitions, dispositions and financing activities, business development opportunities, as well as comments on our outlook for our business, rent, and the broader agricultural markets. We will also discuss certain non-GAAP financial measures, including net operating income, FFO, adjusted FFO, EBITDAre and adjusted EBITDAre. Definitions of these non-GAAP measures, as well as reconciliations to the most comparable GAAP measures, are included in the Company's press release announcing fourth quarter and full year earnings, which is available on our website and is furnished as an exhibit to our current report on form 8-K dated February 23, 2022. Listeners are cautioned that these statements are subject to certain risks and uncertainties, many of which are difficult to predict and generally beyond our control. These risks and uncertainties can cause actual results to differ materially from our current expectations, and we advise listeners to review the risk factors discussed in our press release distributed yesterday and in documents we have filed with or furnished to the SEC. I would now like to turn the call to our Chairman and CEO, Paul Pittman. Paul?

Thank you, James. So, I'm going to make just a few minutes of comments regarding two broad topics: the performance of the Company itself, although I'll let James and Luca go through a little more detail later in the call, and also the general market conditions for Farmland in particular and the Ag economy generally. I want to start by saying this was an outstanding quarter operationally for the Company. We had about 12% year-over-year revenue growth and about 17% year-over-year operating income growth when you compare the fourth quarter of 2020 to the fourth quarter of 2021. The full year results were also very strong when compared to 2020. If you set aside the expense related to the ongoing litigation with Quinton Mathews and Saberpoint, as well as the class action suit associated with that, we've got our AFFO per share up 74% from the 2020 year to the 2021 year. As I mentioned briefly, we still have the financial drag that comes from the litigation related to the short-and-distort attack. However, based on recent news reports, it appears that the Department of Justice is actually investigating some, if not all, of the parties involved in the attack on our company as well as attacks on other companies. So maybe after three or four years, we will finally reach a positive result in those litigations. Looking at rent renewals turning back to operational matters for a moment, the rent renewals that we completed in 2021 were very strong, and we believe they will be similarly strong in 2022. Each year, we renew about a third of the row crop portion of our portfolio, and that fixed cash rent portion of the portfolio, which is almost entirely primary row crops, accounts for about 70% of our overall revenues. About a third of that is renewed every year. What we renewed in 2021 was up 10.5%. The benefit of those increased rents will show up in our 2022 financials. You'll see some of that when James discusses guidance. The renewals we will conduct in 2022 are likely to be at even higher increases than we saw in 2021. Again, we will renew about a third of the fixed rents this year. If we examine the market for farmland and the farm economy generally, land values on a nationwide basis, but especially in the corn belt, are increasing very rapidly. This is the strongest farm economy we have seen since the 2012-2014 era, shown by the increases in grain prices, land prices, and input prices influencing the entire production sector. Agriculture is in a very robust period and, in our view, is likely to remain in this strong period for probably another couple of years at least. Absolute increases in land values are reported as high as 35 to 40%. I believe that's a bit overstated, but I certainly think land values across the board, our portfolio included in the core of the corn belt, are up approximately 15 to 20% year over year, or maybe even more. If you show up at an auction in the Midwest today, you will often see a farm selling for $17,000 or $18,000 an acre with auctions concluding in a matter of minutes. This is a strong environment, where 75% of the purchases are being made by farmers. This is not a speculator-driven boom in farmland. This is a farmer-driven boom, as it should be. This is based on the strong profitability last year and the outlook for continued strong profitability in the coming couple of years. That profitability is largely due to significant increases in grain prices, along with continual improvements in yield and farming efficiencies. Grain prices are very strong for several fundamental reasons. The first reason, and the most important long-term, is the period of relatively low commodity prices we experienced from 2015 to the summer of 2020 led to rapidly increasing demand for many of those commodities. This created a new fundamental demand base that is still growing. Then we hit scarcity with weather-related challenges in certain regions globally, which led to dramatic price jumps. Strong pricing is likely to persist in 2022 due to the South American crop of corn and soybeans suffering significantly due to weather, thus reducing the expectation of output from the South American harvest currently ongoing. Additionally, there is a growing crisis in Ukraine and Russia, notable grain-growing regions in the world, indicating significant risk that those commodities may not be grown or exported at the same quantities historically. Lastly, we have not yet begun the season in the United States, and there is a level of a weather and risk premium being built into the market. The pivotal question is how long will this last? I believe the strong grain prices and therefore farmer profitability will last through 2022, and while I'm less certain, it may last through 2023 and possibly beyond. This is not merely a supply issue. It’s a supply issue in the face of rapidly increasing demand for all primary grains. Oil prices have rebounded, leading to significant ethanol demand, alongside an ever-increasing amount of acreage producing soy for biodiesel in the United States. And, of course, food and feed demand continues to grow over time. An additional tailwind for farmland as an asset is inflation. We have certainly observed inflation, and in my view, it will persist for a while, possibly the remainder of this year or longer. Historically, inflation has driven farmland values significantly. I believe we will continue to benefit from this trend. I will now turn it over to Luca to make some additional and slightly more detailed comments. Luca, do you want to take over and discuss specific operational performance in certain regions and portfolio generally?

Thank you, Paul. Today, there are three ideas that I would like to cover with my comments. First and foremost, I'd like to build on Paul’s point regarding the recovering operating performance in our portfolio, specifically focusing on California, permanent crops. While our agriculture was not as impacted by the COVID pandemic as many other industries, in 2020, specific crops did experience negative effects. For instance, the bar market had dramatically lower demand for citrus, especially lemons. We saw that impact in our financials. Additionally, in 2020, trade disruptions affected our returns. We have observed a strong recovery in those crops in 2021 compared to 2020, reflected in both variable rents and the gross margin in the directly operated farms in our portfolio. The second point I would like to address is our acquisition and disposition activity. During 2021, we made 12 acquisitions totaling $81.2 million and 20 dispositions totaling $73 million. This appears to be a very modest increase in our portfolio size. However, I would like to highlight that of the $73 million in dispositions, $21.5 million was to the Opportunity Zone Fund that we manage, allowing those farms sold to the Opportunity Zone Fund to continue generating revenue for us through our management fee in the fund. Furthermore, our acquisition and disposition activity at the margins of our portfolio continues to gradually improve cap rates in those specific farms. Lastly, I would like to address another significant event for us in 2021, which is the Series B conversion that took place in the fourth quarter. This event de-levered our balance sheet and increased our common equity without attracting underwriting discounts or fees. It granted us excellent access to capital at a time when common equity was not a viable avenue for us. The common stock price increased by 45% between the time we issued the Series B and when we converted it. Most importantly, this Series B conversion is accretive to AFFO and cash flow in general. In the fourth quarter of 2021, we began to observe the positive impact of the conversion, which will undoubtedly be magnified in the full year of 2022. With that, those were my comments for today, and I will now turn the call over to James to cover some financial highlights from our earnings release and supplemental.

Thank you, Luca. I'm going to refer to the supplemental package in my comments. As a reminder, the package is available in the Investor Relations section of our website under the sub-header presentations and other materials. Pages 1 to 10 of the package contain the press release and related financial information, while pages 11 through 20 include the supplemental information. First, let me share a few financial metrics from pages 2 and 3 for the 12 months ended December 31, 2021. Net income was $10.2 million compared to $7.5 million for 2020. Adjusted for litigation, net income was $18.5 million compared to $10.2 million for 2020. Net income per share available to common stockholders was negative $0.17 compared to negative $0.18 for 2020. Adjusted for litigation, net income per share available to common stockholders was positive $0.06 compared to negative $0.01 for 2020. AFFO was $0.4 million compared to $1.8 million for 2020. Adjusted for litigation, AFFO was $8.6 million compared to $4.5 million for 2020. AFFO for diluted weighted average share was $0.01 compared to $0.06 for 2020. Adjusted for litigation, AFFO per diluted weighted average share was $0.24 compared to $0.14 for 2020. As of December 31, 2021, total debt was $513.4 million, and fully diluted shares total 47.0 million. Next, I will draw your attention to supplemental information on page 13. At the bottom of the page, you can see a graph of debt maturities by year. Earlier this month, we completed an extension of our $112 million debt facility with Rutledge and Farm Credit, extending the term for five years to 2027. The price changed from LIBOR plus 1.3% to SUL4R-PLUS with a grid of 1.8% to 2.25%, with an initial spread of 1.95%. While we are disappointed to see the spread increase, the new pricing is still in line with the market, and we are pleased to continue our partnership with Rutledge and Farm Credit. Next, I will turn to page 14 to provide an overview of our income statement. We have over 300 farms in the portfolio, many of which have multiple revenue streams. We try to simplify the business into a few baskets described in this table. The first category is fixed payments. Fixed payments include fixed farm rent, wind rent, solar rent, recreation rent, tenant reimbursement, management fees, and interest income on loans, which we consider to be low risk. Fixed farm rent represents the bulk of fixed payments. As a point of information, farmers generally pay 50% to 100% of fixed farm rent before planting, mostly in the first quarter, which creates positive working capital for a significant portion of the year. The next category is variable payments, which are paid by tenants as a percentage of farm gross proceeds. This rent exposes us to both the upside and downside of farm performance, although the downside is mitigated because cost overruns are borne by the tenants. These variable payments are generally made after harvest in Q4 and Q1. We have one large variable rent contract that accounts for approximately $6.5 million, which is very well covered by farm revenue, with at least 1.7 times coverage for the last four years, including 2020, which was impacted by COVID-19. We consider this large contract to be relatively low risk. Next, direct operations are inherently higher risk than variable payments because we don’t have a tenant bearing the cost or risk of cost overruns, but the upside potential is also higher as we do not share farm revenue with a tenant. We present direct operations gross profit to make it more comparable to the first two categories; for direct operations gross profit, we add crop sales and crop insurance and subtract the cost of goods sold. The last category is other items, which includes revenue associated with auction, brokerage, and other activities. When we consider the total amount of revenue less the cost of goods sold, we note that the lower-risk components of the business—the fixed payments and that one large low-risk variable rent contract—represent approximately 85% to 95% of total revenue for 2020 and 2021. Again, approximately 85% to 95% of revenues in 2020 and 2021 were comprised of fixed payments and that one large low-risk variable rent contract. 2021 was slightly lower than 2020 on that percentage basis, as we had greater variable payments and other revenue items. The charts below this table show the values for these different categories for 2021 and 2020. Total revenue less cost of goods sold for 2021 was $50.2 million compared to $47.3 million in 2020. On the next page, page 15, we provide details on the fixed and variable payments, creating a variance bridge from 2020 to 2021. For fixed payment details, we separated out the performance of the same row crop farms from other items such as acquisitions, dispositions, permanent crops, and farms that were non-comparable between the periods, focusing on the same row crop farms we had in the portfolio before January 1, 2020. We believe same row crop farms provide the best way to remove the noise from various activities that are grouped into the other category. Performance increased by $200,000 from 2020 to 2021. It is important to note that many of the renewals from 2020 that impacted this year’s comparison were negotiated during the COVID-19 pandemic when the farm economy was still recovering. Fixed payments connected to acquisitions, dispositions, and other items declined by $2.7 million. In the variable payment category, tree nuts improved by $2.4 million, citrus improved by $900,000, grains decreased by $100,000, and all other crops—which include corn, soybeans, and wheat—were up $600,000. On the next page, page 16, we provide an outlook for 2022. The table starts with the same categories described on page 14: fixed payments, variable payments, direct operations gross profit, and others. We estimate that fixed payments from same row crop farms will increase by around $1 million, driven by rent increases discussed during this call and prior earnings calls. Fee citrus farms transitioned from third-party contracts to direct operations in the second half of 2021. Thus, 2022 shows a shift toward direct operations for those citrus farms and away from fixed and variable payments. Other revenue includes auction and brokerage business from our colleagues at Murray Wise Associates and acquisitions completed in Q4 2021. The expense categories are based on assumptions included at the bottom of the page. This results in AFFO in the range of $9.1 million to $11.7 million compared to $0.4 million in 2021. AFFO per share would range from $0.19 to $0.25 compared to $0.01 in 2021. We are assuming that the litigation concludes in 2022, with litigation costs ranging from $2.4 million to $3 million. AFFO, adjusted for the midpoint of that litigation spend, would be in the range of $11.8 million to $14.4 million compared to $8.6 million in 2021. Adjusted for litigation, AFFO per share would be in the $0.25 to $0.31 range compared to $0.24 for 2021. We will update this analysis through the year as necessary and communicate the results to you. This wraps up my comments for the morning. I will turn the call back to Paul for concluding remarks.

Thank you, James. Just before we go to Q&A, I wanted to amplify a couple of points that James made. I didn't do this in my earlier comments because it's easier for everyone on the phone to grasp the importance after James had spoken. So, we've gone back to publishing supplemental information and providing guidance as we have turned the corner back to a growth strategy. We believe this will significantly help investors understand the Company and its outlook. Reviewing the full year 2022 outlook on the revenue side, I want to highlight where the risks lie so analysts and others understand them. As James explained, our fixed payments represent a relatively low-risk component of our revenues, and approximately $6.5 million of variable payments are quite secure due to their extensive coverage, meaning that around 85% of our revenue is of relatively low volatility. We still face collection risks, similar to any landlord, but we should remain close to 85% of our revenue. The revenue projection's risk primarily emerges from our crop share, variable rent sections, which are mainly West Coast specialty crops. This volatility also appears in our direct operations, mostly consisting of West Coast citrus. Weather variations will influence these outdoor crops and direct operations. We plan to continuously update the market throughout the year on the performance of our various farms. As for the different crops, citrus likely accounts for 25% of our total risk and variable exposure, with the citrus harvest beginning right around the turn of the year and continuing into early summer for the majority. Therefore, in the earnings call at the end of the first quarter, we will provide an update on both citrus volume and the impact of weather. Variations in pricing will need to wait until later in the summer for us to assess those regarding citrus, since tree nuts are harvested more in late summer to early fall. I think we are in a very good position moving into the year, but I wanted to emphasize a few cautionary notes on how to consider the risks embedded in the 2022 outlook. Operator, with that, we are going to open it up for questions.

The first question comes from Rob Stevenson with Janney. You may proceed.

Paul, is there a lawsuit against Saberpoint now over? Their lawyers put out a release that the suit was dismissed. What's the status from your end there?

No, that lawsuit is not over. What they put out was it was, quote-unquote, dismissed at the lowest level of State Court in Texas based on a jurisdictional ruling. We are, of course, appealing that decision. It was surprising to us that the lower-level judge dismissed it at all, especially considering Quentin Matthews’ statement last summer, which essentially admitted that the article was largely, if not entirely false and that he had been paid to write it by Saberpoint. If you were to believe that the dismissal would hold, it would imply that the American judicial system endorses stock manipulation and stock fraud. But it’s a court system, so we will have to wait and see what happens. However, we are certainly appealing and continuing our pursuit.

Okay. And then along those lines, is there any, you know, roadmarks along the way here for the lawsuit against the Company? Is there anything coming up that we need to be aware of? And is that still sort of a first-half thing? Or is that going to span throughout the year, do you think at this point?

Yes, as James indicated, we have projected that the lawsuits will likely conclude sometime in the second or third quarter of this year, probably late second or early third if I wanted to narrow the range a little. The basic status of the two primary cases, although I won't go into the derivative cases, is that in the class action against the Company, we are currently at the summary judgment stage. We have requested the judge to rule that there are no claims against the Company based on law. Presently, these claims only relate to the loan program. The discovery process has made it clear that there is essentially no evidence suggesting that we intended to defraud the market or made loans to related parties that the auditors did not fully comprehend. There is just no evidence. We are hopeful that it will be dismissed based on summary judgment. However, as I mentioned earlier, that certainty can't be guaranteed. If we win the summary judgment, that concludes that case unless the other side appeals, but we are hopeful that they won't. We remain engaged while the Department of Justice investigates ongoing issues regarding what happened to us and other companies affected by the short-and-distort crowd, including Quentin Matthews. His admission regarding the falsity of their claims is now under scrutiny. We have implored the class action lawyers and plaintiffs to drop their case, but unfortunately, as is often the case, it’s about greed.

And James, I missed it when you said how much for the 2.4 to 4.7 legal guidance is attributed to the ongoing litigation?

Yes. Down at the bottom of that page, we gave a range of $2.4 million to $3 million for what we've projected.

And then, Paul or Luca, what was the cap rate yield on the acquisitions made in the fourth quarter? How has pricing changed throughout the year relative to what it would have been at the beginning of 2020 or even back in 2020?

So, cap rates—as land values.

Especially equity comes down a bit; how are you guys thinking about that from a balance sheet and financing standpoint relative to the acquisitions? And how are those being priced in the market?

We are certainly hopeful about growing the Company during the 2022 year. We will consider several off-balance-sheet opportunities, joint ventures, and other ways to attract private capital to deploy and generate management fees. The payments for that management will ultimately benefit our common shareholders. While we will remain selective about transactions, it’s our intention to focus on creating value and not merely increasing size. We believe the stock is trading somewhat lower than the net asset value. We will contemplate capital raises for projects that present promising long-term returns and financial rewards but will also be cautious about scale for scale’s sake. Hence, we will likely prioritize off-balance-sheet strategies until we see substantial stock price recovery, but we aspire to continue growing the Company across all facets, including managing capital from others and expanding our public company asset base.

And then Paul, one last one for me. You talked about citrus and knowing about weather, etc. How much of your citrus crops have been impacted by greening? And what's the outlook there considering the management difficulties these days?

We are fortunate to have a citrus portfolio primarily based in California. We have one very small citrus farm in Florida, which is negatively impacted like all citrus farms in that state due to greening. Fortunately, this particular farm contains an Israeli variety known as Ori, which exhibits some resistance to greening compared to traditionally grown varieties. The situation in Florida isn’t ideal, but it’s manageable. In California, the Department of Agriculture is proactive and has successfully kept citrus greening out of the state thus far. If the disease is discovered in any commercial citrus, the tree is promptly destroyed to mitigate the spread. The last point is that they are aggressive in their efforts to eradicate it. So, we have not experienced significant greening in our crops from California due to these measures. We hope the situation continues, and we are not considerably affected.

The next question is from the line of Dave Rodgers with Baird. You may proceed.

Yes, good morning. And Paul, thanks to you and the team for the significant improvement in disclosures this quarter. I wanted to follow up on the acquisitions pipeline. You talked about competition in the corn-belt and current pricing trends. Can you share your insights on the overall acquisition pipeline you are monitoring today and whether that competition extends beyond the corn-belt?

Yes, we have a very strong pipeline today. As I mentioned, we are sensitive to not just growing for growth's sake. However, we have several hundred million dollars in transactions that we are currently tracking. The Murray Wise acquisition has broadened our scope for transaction opportunities. As I have mentioned in previous calls, the primary source of our transactions today is our tenants. Local tenants understand our capital positioning and bring us appealing ideas. We evaluate these carefully, sometimes purchasing and sometimes choosing not to. Overall, our pipeline is robust, and regarding competition—among institutional investors, we are distinctively positioned as we tend to buy much smaller farms, particularly in the Midwest, Southeast, and Delta regions, compared to other institutional managers. We believe this is the best approach as we aim to own various properties of disparate sizes. If a liquidation situation arises, we want to avoid simply selling to other major institutional holders, as that could lead to market-wide challenges. Therefore, we actively seek smaller assets that can easily be bought by family farmers and individual investors. We have seen competition primarily from farmers bidding on those assets, but we generally concede to them in an auction setting when they show genuine interest. Competition among institutional investors largely occurs in larger assets, but our focus on the core Midwest enables us to capture demand in that region.

Maybe one follow-up question for you or for James, Paul. On the '22 leads, I think you said it was comparable to what you saw in '21. Please dive a bit deeper on that. As for the second part, James, when we look at the fixed 2020 number's growth on a same-store basis, obviously fairly anemic. You explained why that was the case. What does that look like on a like-for-like basis in '22, adjusting for farms that will shift to direct operation? What I'm asking is for a clearer view of the true comparable for same-store revenue in 2022. Thank you.

Yes, let me start addressing this, then I’ll turn it over to James for additional support. First, as James alluded to in his prepared remarks, we have historically presented same-store sales numbers based on having everything owned for two full years, but that methodology obscures what investors want to know, which is the trends in fixed rents that we generate from tenant negotiations. Thus, while we reported a same-store sales number, it mainly reflected weather impacts. We were overly influenced by performance on West Coast specialty crops—big dollar amounts can make a significant difference. Therefore, we aim to refine our focus to what's happening with fixed rent—specifically crop measures—and the fixed cash rent that gets negotiated. Cash-wise, our rents usually go up because we have cost of living adjustments. However, GAAP reporting straight-lining deviates from this through lesser reported renewals. The 2020 results revealed we didn’t capitalize on higher lease negotiations in 2021 as they were largely negotiated during the COVID crisis period. We hope to push fixed rent increases above 10.5%. Ultimately, I expect that we will approach or surpass that number for 2023, given potential increases in 2022.

Yes, we anticipate that the fixed payments for same row crops will increase by about $1 million in 2022. The increases taking place in 2022 during late summer to fall will primarily impact the revenue cycle for 2023.

Thank you. The next question is from the line of Buck Horne from Raymond James. You may proceed.

I wanted to clarify a couple of things in the guidance, if I could. Within the revenue guide for 2022, is there any new net M&A activity on the acquisition or disposition side that’s embedded in the guidance for this year?

No, we did not project capital raises, equity capital raises, debt issuances, acquisitions, or dispositions into our guidance. We aim to only present a baseline while moving forward as specific traits occur throughout the year. James, anything you want to elaborate on?

No, well covered. I have nothing additional to add.

Got it. That's helpful. Thank you. I appreciate that. And then also going back to the guidance, could you clarify the variance from last year’s general and administrative expense to this year's projection?

Yes, I will highlight the major points. First, when not considering litigation, the cost structure in our guidance, aside from litigation, is predictable and straightforward. Addressing general and administrative costs specifically, the increase year-over-year from '21 to '22 arises from three key factors. The first is that we have added senior staff as we transitioned back to a growth-oriented company. James joined us, and Luca became President, contributing higher quality yet higher-cost staff members, along with others in Public Relations. Secondly, the Murray Wise acquisition added costs, which we incorporate into our P&L now. We believe this will ultimately become a growing profit contributor. However, as a base farm management and real estate brokerage company, they have added staff and therefore costs, but we anticipate revenues above these costs. Lastly, we have expanded the size of our Board to address various ESG initiatives, further incrementally raising costs. So, these are the main factors influencing the increase in G&A.

Thank you. The next question is from the line of Craig Kucera from B. Riley Securities. You may proceed.

Yes. Good morning everyone. I wanted to circle back to the guidance, addressing the other income/revenue line item. Is it primarily revenue from your expectations of Murray Wise, or are you expecting to roll out a bit more on the loan program in 2022?

James, I will turn that question to you because I don't have specific answers on that.

Yes, sure. It’s primarily revenue from auction brokerage activities, which stem from Murray Wise activities. Throughout the year, there may be minor miscellaneous revenue that will show up in that line as well, but we don’t have specific projections at this time.

Got it. I think that answers the rest of my inquiries. Thank you.

Great. Thank you, Craig.

Thank you. The next question is from the line of Ryan Watson with Medium Investment Advisors. You may proceed.

Hey, Paul, I believe you've covered everything, but let me just ask one question. Did the DOJ notify FPI if it's investigating Saberpoint?

No, we have not been notified, nor would we be specifically expecting that. We largely know what you have read in the news articles. A few weeks ago, there was a relatively extensive Bloomberg article, followed by a substantial Wall Street Journal article, and then a significant Reuters article discussing potential RICO charges. You should refer to those articles if you want to see names and relationships. Our situation is often referenced, and we know it is part of the investigation. While it has taken a long time, we remain optimistic as there isn’t much more that can be said, considering Quentin Matthews' earlier admission. It would be encouraging to see the DOJ advance the process pertaining to those responsible for damaging substantial shareholder value in our company.

Sure. And can I ask one follow-up? On the previous freeze, I read that 15 to 20% of Florida citrus production is going to be cut this year. I know the weather usually doesn't extend that far south. Could you indicate whether the current freeze sweeping the U.S. is expected to impact any of your farms in California? That's all for me.

It's quite interesting that you ask. The answer is we don’t know at this point, but currently we believe we will be okay. Yesterday, we discussed the cold snap that is affecting places like Denver. We are experiencing chilling in the West Coast and Intermountain regions. Predictions suggest the freeze will be short-lived and likely won't harm most citrus farms, including ours. We have mechanisms, like big fans, that circulate air to prevent the cold from settling and causing deep freeze conditions. We believe citrus will withstand this weather. Almonds, however, are blooming right around now, and while there could be some worry, we think we can navigate without major issues. If there is a significant reduction in volume available, often an accompanying price response can result that could exceed the decline in volume. That said, we remain hopeful for minimal adverse impacts but will track the conditions closely. Call back in a week, and I’ll have a clearer response.

Thank you. There are no additional questions at this time. I will now pass it back to the management team for any further remarks.

Thank you, ma'am. I want to express my gratitude to everyone on the call. Congratulations to our CFO, James Gilligan, for his role in producing the high-quality supplemental documentation we've published. A great deal of effort was put into this by him and his team. We hope it enhances transparency and communication with the investment community. With that, we will conclude the call and look forward to speaking with you again in the next quarter.

That concludes today's conference call. Thank you and have a great day.