What changed in this filing

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Item 1. Financial Statements

2021-06-08 compared with 2021-03-10 · 244 added, 135 removed, 504 unchanged (43% of the section changed)

3 unchanged sentences

($ in thousands, except share amounts)

January 31, 2021 October 31, 2020

April 30, 2021 October 31, 2020

Current assets:

28 unchanged sentences

Series B Convertible Preferred Stock – $ 100.00 par value ( 50,000 shares authorized:

14,790 shares issued and outstanding at January 31, 2021 and October 31, 2020) ( 8.75 % coupon rate)

14,790 shares issued and outstanding at April 30, 2021 and October 31, 2020) ( 8.75 % coupon rate)

Series B-2 Convertible Preferred Stock – $ 100.00 par value ( 10,000 shares authorized:

9,300 shares issued and outstanding at January 31, 2021 and October 31, 2020) ( 4 % dividend rate on liquidation value of $ 1,000 per share)

9,300 shares issued and outstanding at April 30, 2021 and October 31, 2020) ( 4 % dividend rate on liquidation value of $ 1,000 per share)

Stockholders' Equity:

Series A Junior Participating Preferred Stock – $ 0.01 par value ( 20,000 shares authorized:

zero issued or outstanding at January 31, 2021 and October 31, 2020)

zero issued or outstanding at April 30, 2021 and October 31, 2020)

Common Stock – $ 0.01 par value ( 39,000,000 shares authorized:

17,935,904 and 17,857,707 shares issued and 17,684,927 and 17,606,730 shares outstanding at January 31, 2021 and October 31, 2020, respectively)

17,936,377 and 17,857,707 shares issued and 17,685,400 and 17,606,730 shares outstanding at April 30, 2021 and October 31, 2020, respectively)

Additional paid-in capital 163,020 162,084

1 unchanged sentence

Accumulated other comprehensive loss ( 5,908 ) ( 7,548 )

Treasury stock, at cost, 250,977 shares at January 31, 2021 and October 31, 2020

Treasury stock, at cost, 250,977 shares at April 30, 2021 and October 31, 2020

( 3,493 ) ( 3,493 )

Noncontrolling interest 13,669 13,741

Total equity 191,729 195,760

Total stockholders' equity 193,087 195,760

Total liabilities and stockholders' equity $ 394,627 $ 389,600

4 unchanged sentences

Three Months Ended

April 30, Six Months Ended

2021 2020 2021 2020

Net revenues:

7 unchanged sentences

Total costs and expenses 42,748 42,404 86,663 92,526

Operating loss ( 5,640 ) ( 8,466 )

Operating income (loss) 2,384 ( 2,833 ) ( 3,256 ) ( 11,299 )

Other income (expense):

Interest income 25 — 68 —

Interest expense, net of dividends 134 ( 170 )

Interest expense, net of patronage dividends ( 622 ) ( 1,052 ) ( 488 ) ( 997 )

Equity in earnings (losses) of investments, net 643 ( 371 ) 1,009 ( 491 )

Loss on stock in Calavo Growers, Inc.

Other (expense) income, net ( 6 ) 515

— ( 4,275 ) — ( 6,299 )

Other income (expense), net 57 ( 280 ) 51 235

Total other income (expense) 103 ( 5,978 ) 640 ( 7,552 )

Loss before income tax benefit ( 5,103 ) ( 10,040 )

Income tax benefit 1,187 3,136

Net loss ( 3,916 ) ( 6,904 )

Net (income) loss attributable to noncontrolling interest ( 292 ) 477

Net loss attributable to Limoneira Company ( 4,208 ) ( 6,427 )

Income (loss) before income tax (provision) benefit 2,487 ( 8,811 ) ( 2,616 ) ( 18,851 )

Income tax (provision) benefit ( 974 ) 3,505 213 6,641

Net income (loss) 1,513 ( 5,306 ) ( 2,403 ) ( 12,210 )

Net loss attributable to noncontrolling interest 420 423 128 900

Net income (loss) attributable to Limoneira Company 1,933 ( 4,883 ) ( 2,275 ) ( 11,310 )

Preferred dividends ( 126 ) ( 126 ) ( 251 ) ( 251 )

Net loss attributable to common stock $ ( 4,333 ) $ ( 6,552 )

Basic net loss per common share $ ( 0.25 ) $ ( 0.37 )

Diluted net loss per common share $ ( 0.25 ) $ ( 0.37 )

Net income (loss) attributable to common stock $ 1,807 $ ( 5,009 ) $ ( 2,526 ) $ ( 11,561 )

Basic net income (loss) per common share $ 0.10 $ ( 0.29 ) $ ( 0.15 ) $ ( 0.66 )

Diluted net income (loss) per common share $ 0.10 $ ( 0.29 ) $ ( 0.15 ) $ ( 0.66 )

Weighted-average common shares outstanding-basic 17,461,000 17,634,000 17,429,000 17,602,000

2 unchanged sentences

LIMONEIRA COMPANY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

(In thousands)

Three Months Ended January 31,

Net loss $ ( 3,916 ) $ ( 6,904 )

Three Months Ended April 30, Six Months Ended April 30,

2021 2020 2021 2020

Net income (loss) $ 1,513 $ ( 5,306 ) $ ( 2,403 ) $ ( 12,210 )

Other comprehensive income (loss), net of tax:

Foreign currency translation adjustments 577 ( 619 ) 1,372 ( 1,886 )

Minimum pension liability adjustment, net of tax of $ 51 and $ 50 for the three months ended January 31, 2021 and 2020, respectively.

Minimum pension liability adjustment, net of tax of $ 50 , $ 50 , $ 100 and $ 100 for the three and six months ended April 30, 2021 and 2020, respectively.

134 60 268 195

Residual state tax effects on sale of equity securities — 140 — 140

Total other comprehensive income (loss), net of tax 711 ( 419 ) 1,640 ( 1,551 )

Comprehensive loss ( 2,987 ) ( 8,036 )

Comprehensive (income) loss attributable to noncontrolling interest ( 331 ) 465

Comprehensive loss attributable to Limoneira Company $ ( 3,318 ) $ ( 7,571 )

Comprehensive income (loss) 2,224 ( 5,725 ) ( 763 ) ( 13,761 )

Comprehensive loss attributable to noncontrolling interest 403 422 72 887

Comprehensive income (loss) attributable to Limoneira Company $ 2,627 $ ( 5,303 ) $ ( 691 ) $ ( 12,874 )

The accompanying notes are an integral part of these unaudited consolidated financial statements.

20 unchanged sentences

Balance at January 31, 2021 17,684,927 $ 179 $ 162,450 $ 25,140 $ ( 6,619 ) $ ( 3,493 ) $ 14,072 $ 191,729 $ 1,479 $ 9,331

Dividends Common ($ 0.075 per share)

— — — ( 1,327 ) — — — ( 1,327 ) — —

Dividends Series B ($ 2.19 per share)

— — — ( 33 ) — — — ( 33 ) — —

Dividends Series B-2 ($ 10 per share)

— — — ( 93 ) — — — ( 93 ) — —

Stock compensation 473 — 570 — — — — 570 — —

Net income (loss) — — — 1,933 — — ( 420 ) 1,513 — —

Other comprehensive income, net of tax — — — — 711 — 17 728 — —

Balance at April 30, 2021 17,685,400 $ 179 $ 163,020 $ 25,620 $ ( 5,908 ) $ ( 3,493 ) $ 13,669 $ 193,087 $ 1,479 $ 9,331

Stockholders' Equity Temporary Equity

16 unchanged sentences

Balance at January 31, 2020 17,857,707 $ 179 $ 160,869 $ 45,199 $ ( 8,387 ) $ — $ 14,957 $ 212,817 $ 1,479 $ 9,331

Dividends Common ($ 0.075 per share)

— — — ( 1,341 ) — — — ( 1,341 ) — —

Dividends Series B ($ 2.19 per share)

— — — ( 32 ) — — — ( 32 ) — —

Dividends Series B-2 ($ 10 per share)

— — — ( 93 ) — — — ( 93 ) — —

Stock compensation — — 358 — — — — 358 — —

Noncontrolling interest adjustment — — — — — — ( 145 ) ( 145 ) — —

Net loss — — — ( 4,883 ) — — ( 423 ) ( 5,306 ) — —

Other comprehensive (loss) income, net of tax — — — — ( 419 ) — 1 ( 418 ) — —

Balance at April 30, 2020 17,857,707 $ 179 $ 161,227 $ 38,850 $ ( 8,806 ) $ — $ 14,390 $ 205,840 $ 1,479 $ 9,331

The accompanying notes are an integral part of these unaudited consolidated financial statements.

1 unchanged sentence

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (In thousands)

Three Months Ended

Six Months Ended

Operating activities

Net loss $ ( 2,403 ) $ ( 12,210 )

Adjustments to reconcile net loss to net cash used in operating activities:

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Depreciation and amortization 5,053 4,998

Gain on disposals of assets — ( 250 )

(Gain) or loss on disposals of assets ( 16 ) 264

Stock compensation expense 1,637 1,187

Non-cash lease expense 237 228

Equity in earnings of investments ( 366 ) 120

Equity in (earnings) losses of investments, net ( 1,009 ) 491

Deferred income taxes ( 213 ) ( 6,641 )

10 unchanged sentences

Other long-term liabilities ( 257 ) 291

Net cash used in operating activities ( 1,790 ) ( 12,209 )

Net cash provided by (used in) operating activities 4,643 ( 15,798 )

Investing activities

Capital expenditures ( 5,409 ) ( 5,415 )

Net proceeds from sales of property assets 83 —

Net proceeds from sale of stock in Calavo Growers, Inc.

Loan to Limoneira Lewis Community Builders, LLC — ( 1,800 )

Collection on note receivable 25 —

1 unchanged sentence

Investments in mutual water companies and water rights ( 200 ) ( 51 )

Net cash used in investing activities ( 3,580 ) ( 6,515 )

Insurance proceeds received — 250

Net cash (used in) provided by investing activities ( 5,501 ) 1,232

Financing activities

12 unchanged sentences

(In thousands)

Three Months Ended

Six Months Ended

Supplemental disclosures of cash flow information

Cash paid during the period for interest, net of amounts capitalized $ 780 $ 981

Cash paid during the period for income taxes, net of (refunds received) $ ( 4,997 ) $ —

Cash (received) paid during the period for income taxes, net $ ( 4,997 ) $ —

Non-cash investing and financing activities:

23 unchanged sentences

Summary of Significant Accounting Policies

Comprehensive Loss

Comprehensive loss represents all changes in a company’s net assets, except changes resulting from transactions with shareholders.

Comprehensive Income (Loss)

Comprehensive income (loss) represents all changes in a company’s net assets, except changes resulting from transactions with stockholders.

Other comprehensive income or loss primarily includes foreign currency translation items and defined benefit pension items.

Accumulated other comprehensive (loss) income is reported as a component of the Company's stockholders' equity.

The following table summarizes the changes in other comprehensive income (loss) by component (in thousands):

Three Months Ended January 31,

Pre-tax Amount Tax (Expense) Benefit Net Amount Pre-tax Amount Tax (Expense) Benefit Net Amount

Accumulated other comprehensive income (loss) is reported as a component of the Company's stockholders' equity.

The following tables summarizes the changes in other comprehensive income (loss) by component (in thousands):

Three Months Ended April 30,

Pre-tax Amount Tax Expense Net Amount Pre-tax Amount Tax Expense Net Amount

Foreign currency translation adjustments $ 577 $ — $ 577 $ ( 619 ) $ — $ ( 619 )

1 unchanged sentence

Other comprehensive gain before reclassifications 184 ( 50 ) 134 110 ( 50 ) 60

Available-for-sale securities:

Amounts reclassified to earnings included in "Selling, general and administrative" — — — 140 — 140

Other comprehensive income (loss) $ 761 $ ( 50 ) $ 711 $ ( 369 ) $ ( 50 ) $ ( 419 )

2 unchanged sentences

Summary of Significant Accounting Policies (continued)

Six Months Ended April 30,

Pre-tax Amount Tax Expense Net Amount Pre-tax Amount Tax Expense Net Amount

Foreign currency translation adjustments $ 1,372 $ — $ 1,372 $ ( 1,886 ) $ — $ ( 1,886 )

Minimum pension liability adjustments:

Other comprehensive gain before reclassifications 368 ( 100 ) 268 295 ( 100 ) 195

Available-for-sale securities:

Amounts reclassified to earnings included in "Selling, general and administrative" — — — 140 — 140

Other comprehensive income (loss) $ 1,740 $ ( 100 ) $ 1,640 $ ( 1,451 ) $ ( 100 ) $ ( 1,551 )

The following table summarizes the changes in accumulated other comprehensive (loss) income by component (in thousands):

Foreign Currency Translation Loss Defined Benefit Pension Plan Available-for-Sale Securities Accumulated Other Comprehensive (Loss) Income

Foreign Currency Translation (Loss) Income Defined Benefit Pension Plan Available-for-Sale Securities Accumulated Other Comprehensive (Loss) Income

Balance as of October 31, 2020 $ ( 3,069 ) $ ( 4,479 ) $ — $ ( 7,548 )

Other comprehensive income 1,372 268 — 1,640

Balance as of January 31, 2021 $ ( 2,274 ) $ ( 4,345 ) $ — $ ( 6,619 )

Foreign Currency Translation Loss Defined Benefit Pension Plan Available-for-Sale Securities Accumulated Other Comprehensive (Loss) Income

Balance as of April 30, 2021 $ ( 1,697 ) $ ( 4,211 ) $ — $ ( 5,908 )

Foreign Currency Translation Loss Defined Benefit Pension Plan Available-for-Sale Securities Accumulated Other Comprehensive Loss

Balance as of October 31, 2019 $ ( 2,362 ) $ ( 4,753 ) $ ( 140 ) $ ( 7,255 )

Other comprehensive (loss) income ( 1,886 ) 195 140 ( 1,551 )

Balance as of January 31, 2020 $ ( 3,629 ) $ ( 4,618 ) $ ( 140 ) $ ( 8,387 )

Balance as of April 30, 2020 $ ( 4,248 ) $ ( 4,558 ) $ — $ ( 8,806 )

Recent Accounting Pronouncements

8 unchanged sentences

Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity

This amendment simplifies accounting for convertible instruments by removing major separation models required under current GAAP.

This amendment simplifies accounting for convertible instruments by removing major separation models currently required under GAAP.

Consequently, more convertible debt instruments will be reported as a single liability instrument and more convertible preferred stock as a single equity instrument with no separate accounting for embedded conversion features.

4 unchanged sentences

The Company is evaluating the effect this ASU may have on its consolidated financial statements.

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Concentrations and Geographic Information

Lemons procured from third-party growers were 48 % and 55 % of the Company's lemon supply in the three months ended January 31, 2021 and 2020, respectively, of which one third-party grower was 26 % of the lemon supply for the three months ended January 31, 2021.

Lemons procured from third-party growers were 50 % and 60 % of the Company's lemon supply in the three months ended April 30, 2021 and 2020, respectively.

Lemons procured from third-party growers were 49 % and 58 % of the Company's lemon supply in the six months ended April 30, 2021 and 2020, respectively, of which one third-party grower was 19 % of the lemon supply for the six months ended April 30, 2021.

The Company sells the majority of its avocado production to Calavo.

Sales of avocados to Calavo were insignificant for the three months ended January 31, 2021 and 2020, respectively.

The Company sells a majority of its oranges and specialty citrus to a third-party packinghouse.

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Concentrations and Geographic Information (continued)

Concentrations of credit risk with respect to revenues and accounts receivables are limited due to a large, diverse customer base.

One individual customer represented 23 % of revenues for the three months ended January 31, 2021.

One individual customer represented 12 % of accounts receivable, net as of January 31, 2021.

During the three months ended January 31, 2021 and 2020, the Company had approximately $ 1,027,000 and $ 539,000 , respectively, of total sales in Chile by Fruticola Pan de Azucar S.A.

Concentrations of credit risk with respect to revenues and account receivables are limited due to a large, diverse customer base.

One individual customer represented 11 % of revenues for the six months ended April 30, 2021.

One individual customer represented more than 10 % of accounts receivable, net as of April 30, 2021.

During the three months ended April 30, 2021 and 2020, the Company had approximately $ 950,000 and $ 921,000 , respectively, of total sales in Chile by Fruticola Pan de Azucar S.A.

("PDA") and Agricola San Pablo SpA ("San Pablo").

During the three months ended January 31, 2021 and 2020, the Company had approximately $ 1,671,000 and $ 199,000 , respectively, of total sales in Argentina by Trapani Fresh.

During the three months ended April 30, 2021 and 2020, the Company had approximately $ 884,000 and $ 2,280,000 , respectively, of total sales in Argentina by Trapani Fresh.

During the six months ended April 30, 2021 and 2020, the Company had approximately $ 1,977,000 and $ 1,460,000 , respectively, of total sales in Chile by PDA and San Pablo.

During the six months ended April 30, 2021 and 2020, the Company had approximately $ 2,555,000 and $ 2,479,000 , respectively, of total sales in Argentina by Trapani Fresh.

Aggregate foreign exchange transaction losses realized for our foreign subsidiaries was approximately $ 551,000 for the six months ended April 30, 2021 and are included in selling, general and administrative expenses in the consolidated statements of operations.

Foreign exchange transaction gains/losses were immaterial for the six months ended April 30, 2020.

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist of the following (in thousands):

January 31, 2021 October 31, 2020

April 30, 2021 October 31, 2020

Prepaid supplies and insurance $ 2,769 $ 2,080

6 unchanged sentences

Real estate development assets are comprised primarily of land and land development costs and consist of the following (in thousands):

January 31, 2021 October 31, 2020

April 30, 2021 October 31, 2020

Retained Property - East Area I $ 12,903 $ 13,169

1 unchanged sentence

$ 21,941 $ 21,636

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Real Estate Development (continued)

East Area I, Retained Property and East Area II

4 unchanged sentences

Under the terms of the Retained Property Agreement, the Joint Venture transferred certain contributed East Area I property, which is entitled for commercial development, back to the Company (the "Retained Property") and arranged for the design and construction of certain improvements to the Retained Property, subject to certain reimbursements by the Company.

The balance in Retained Property and East Area II includes estimated costs incurred by and reimbursable to LLCB of $ 5,300,000 at January 31, 2021 and October 31, 2020, which is included in payables to related parties.

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Real Estate Development (continued)

East Area I, Retained Property and East Area II (continued)

The balance in Retained Property and East Area II includes estimated costs incurred by and reimbursable to LLCB of $ 5,450,000 and $ 5,300,000 at April 30, 2021 and October 31, 2020, respectively, which is included in payables to related parties.

In January 2018, the Joint Venture entered into a $ 45,000,000 unsecured Line of Credit Loan Agreement and Promissory Note (the “Loan”) with Bank of America, N.A.

to fund early development activities.

The Loan originally was scheduled to mature in January 2020 and was extended to February 22, 2021 per the terms thereof.

The Loan originally was scheduled to mature in January 2020 and was extended to February 22, 2021.

In February 2021, this loan was extended to February 22, 2023 with an option to extend to February 22, 2024, subject to certain conditions.

The interest rate on the Loan is LIBOR plus 2.85 % and is payable monthly.

The Loan contains certain customary default provisions and the Joint Venture may prepay any amounts outstanding under the Loan without penalty.

In February 2021, this loan was extended to February 22, 2023 with an option to extend to February 22, 2024, subject to certain conditions.

The Joint Venture recorded the Loan balance of $ 17,411,000 as of January 31, 2021.

The Joint Venture had an outstanding balance of $ 11,411,000 as of April 30, 2021.

In February 2018, certain principals from Lewis and by the Company guaranteed the obligations under the Loan.

3 unchanged sentences

Additionally, a Reimbursement Agreement was executed between the Lewis guarantors and the Company, which provides for unpaid liabilities of the Joint Venture to be shared pro-rata by the Lewis guarantors and the Company in proportion to their percentage interest in the Joint Venture.

The Company made contributions to the Joint Venture of zero and $ 2,800,000 in the three months ended January 31, 2021 and 2020, respectively.

Through January 31, 2021, the Joint Venture has closed the sales of the initial residential lots representing 398 residential units.

The Company made contributions to the Joint Venture of zero and $ 2,800,000 in the six months ended April 30, 2021 and 2020, respectively.

Through April 30, 2021, the Joint Venture has closed the sales of the initial residential lots representing 464 residential units.

Other Real Estate Development Projects

2 unchanged sentences

After transaction and other costs, the Company expects to receive cash proceeds of approximately $ 2,550,000 and recognize an immaterial gain upon closing.

At January 31, 2021, the $ 2,543,000 carrying value of the property was classified as held for sale and included in prepaid expenses and other current assets.

At April 30, 2021, the $ 2,543,000 carrying value of the property was classified as held for sale and included in prepaid expenses and other current assets.

During December 2017, the Company sold its Centennial property with a net book value of $ 2,983,000 for $ 3,250,000 .

1 unchanged sentence

The promissory note was originally scheduled to mature in December 2019 but was extended to December 15, 2020 and the interest rate was reset to equal to the 6-month LIBOR plus 2.75 % on the outstanding principal balance of the note, interest only paid monthly on the first day of each month beginning January 1, 2020.

In September 2020, the promissory note was further extended to June 15, 2021 on the same terms and conditions upon making a principal paydown of $ 25,000 , which was paid in November 2020, and an option to further extend the maturity date of the promissory note to December 15, 2021 on the same terms and conditions and upon making an additional principal paydown of $ 25,000 on or before June 1, 2021.

At January 31, 2021, the net carrying value of the note was $ 2,625,000 and classified in prepaid expenses and other current assets.

In September 2020, the promissory note was further extended to June 15, 2021 on the same terms and conditions upon making a principal paydown of $ 25,000 , which was paid in November 2020, with an option to further extend the maturity date of the promissory note to December 15, 2021 on the same terms and conditions and upon making an additional principal paydown of $ 25,000 .

The option was exercised and the extension payment was paid in May 2021.

At April 30, 2021, the net carrying value of the note was $ 2,625,000 and classified in prepaid expenses and other current assets.

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Equity in Investments

Equity in investments consist of the following (in thousands):

January 31, 2021 October 31, 2020

April 30, 2021 October 31, 2020

Limoneira Lewis Community Builders, LLC $ 58,475 $ 57,142

4 unchanged sentences

Unconsolidated Significant Subsidiary

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Equity in Investments (continued)

In accordance with Rule 10-01(b)(1) of Regulation S-X, which applies to interim reports on Form 10-Q, the Company must determine if its equity method investees are considered “significant subsidiaries." In evaluating its investments, there are two tests utilized to determine if equity method investees are considered significant subsidiaries:

1 unchanged sentence

Summarized income statement information of an equity method investee is required in an interim report if either of the two tests exceed 20% in the interim periods presented.

During the year-to-date interim periods for the three months ended January 31, 2021 and 2020, this threshold was not met for any of the Company's equity investments.

Although not required for the three months ended January 31, 2021, the Company included the LLCB summarized income statement information in this Quarterly Report on Form 10-Q since it anticipates it will be required in the second quarter of 2021.

During the year-to-date interim periods for the six months ended April 30, 2021 and 2020, this threshold was met for the Company's equity investment in LLCB.

The following is unaudited summarized financial information for LLCB (in thousands):

Three Months Ended

Six Months Ended

Revenues $ 19,827 $ 4,768

8 unchanged sentences

Foreign currency translation adjustment 15

Balance at January 31, 2021 $ 1,544

Balance at April 30, 2021 $ 1,550

Goodwill is tested for impairment on an annual basis or when an event or changes in circumstances indicate that its carrying value may not be recoverable.

There have been no impairment charges recorded against goodwill as of January 31, 2021.

During the three months ended January 31, 2021, the Company acquired additional water rights in Chile for $ 186,000 .

Intangible assets consisted of the following as of January 31, 2021 and October 31, 2020 (in thousands):

January 31, 2021 October 31, 2020

There have been no impairment charges recorded against goodwill as of April 30, 2021.

During the six months ended April 30, 2021, the Company acquired additional water rights in Chile for $ 186,000 .

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Goodwill and Intangible Assets (continued)

Intangible assets consisted of the following as of April 30, 2021 and October 31, 2020 (in thousands):

April 30, 2021 October 31, 2020

Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted Average Useful Life in Years Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted Average Useful Life in Years

4 unchanged sentences

$ 13,769 $ ( 2,609 ) $ 11,160 $ 13,392 $ ( 2,083 ) $ 11,309

Amortization expense totaled $ 263,000 and $ 285,000 for the three months ended January 31, 2021 and 2020, respectively.

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Goodwill and Intangible Assets

Estimated future amortization expense of intangible assets as of January 31, 2021 are as follows (in thousands):

2021 (excluding the three months ended January 31, 2021) $ 777

Amortization expense totaled $ 263,000 and $ 205,000 for the three months ended April 30, 2021 and 2020, respectively.

Amortization expense totaled $ 526,000 and $ 490,000 for the six months ended April 30, 2021 and 2020, respectively.

Estimated future amortization expense of intangible assets as of April 30, 2021 are as follows (in thousands):

2021 (excluding the six months ended April 30, 2021) $ 514

Thereafter 2,763

1 unchanged sentence

The Company’s investments in various not-for-profit mutual water companies provide the Company with the right to receive a proportionate share of water from each of the not-for-profit mutual water companies that have been invested in and do not constitute voting shares and/or rights.

Amounts included in other assets in the consolidated balance sheets as of January 31, 2021 and October 31, 2020 were $ 5,567,000 and $ 5,563,000 , respectively.

Amounts included in other assets in the consolidated balance sheets as of April 30, 2021 and October 31, 2020 were $ 6,024,000 and $ 5,563,000 , respectively.

Accrued Liabilities

Accrued liabilities consist of the following (in thousands):

January 31, 2021 October 31, 2020

April 30, 2021 October 31, 2020

Compensation $ 2,688 $ 2,275

9 unchanged sentences

Long-term debt is comprised of the following (in thousands):

January 31, 2021 October 31, 2020

April 30, 2021 October 31, 2020

Farm Credit West revolving and non-revolving lines of credit:

the interest rate of the revolving line of credit is variable based on the one-month London Interbank Offered Rate (“LIBOR”), which was 0.15 % at January 31, 2021, plus 1.60 %.

the interest rate of the revolving line of credit is variable based on the one-month London Interbank Offered Rate (“LIBOR”), which was 0.11 % at April 30, 2021, plus 1.60 %.

The interest rate for the $ 40.0 million outstanding balance of the non-revolving line of credit was fixed at 4.77 %.

20 unchanged sentences

Note Payable:

the interest rate ranges from 5.00 % to 7.00 % and was 6.00 % at January 31, 2021.

the interest rate ranges from 5.00 % to 7.00 % and was 6.50 % at April 30, 2021.

The loan includes interest only monthly payments and principal is due in February 2023.

16 unchanged sentences

The Supplements and RELOC provide aggregate borrowing capacity of $ 130,000,000 comprised of $ 75,000,000 under the Revolving Credit Supplement, $ 40,000,000 under the Non-Revolving Credit Supplement and $ 15,000,000 under the RELOC.

The borrowing capacity based on collateral value was $ 130,000,000 at January 31, 2021, of which $ 17,980,000 was available to borrow.

The borrowing capacity based on collateral value was $ 130,000,000 at April 30, 2021, of which $ 20,516,000 was available to borrow.

All indebtedness under the Loan Agreement and RELOC with Farm Credit West, including any indebtedness under the Supplements, is secured by a first lien on certain of its agricultural properties in Tulare, Ventura and San Luis Obispo counties in California and certain of the Company's building fixtures and improvements and investments in mutual water companies associated with the pledged agricultural properties.

5 unchanged sentences

In December 2020, Farm Credit West declared an annual cash patronage dividend of 1.50 % of average eligible loan balances.

The Company accrued the $ 1,170,000 dividend receivable in prepaid expenses and other current assets at January 31, 2021, which was received in February 2021.

The Company received $ 1,170,000 in February 2021.

The Loan Agreement subjects the Company to affirmative and restrictive covenants including, among other customary covenants, financial reporting requirements, requirements to maintain and repair any collateral, restrictions on the sale of assets, restrictions on the use of proceeds, prohibitions on the incurrence of additional debt and restrictions on the purchase or sale of major assets of the Company's business.

2 unchanged sentences

Interest is capitalized on non-bearing orchards, real estate development projects and significant construction in progress.

The Company capitalized interest of zero and $ 89,000 during the three months ended January 31, 2021 and 2020, respectively.

The Company capitalized interest of $ 308,000 and $ 355,000 during the three months ended April 30, 2021 and 2020, respectively, and $ 308,000 and $ 444,000 during the six months ended April 30, 2021 and 2020, respectively.

Capitalized interest is included in property, plant and equipment and real estate development assets in the Company’s consolidated balance sheets.

5 unchanged sentences

Three Months Ended

April 30, Six Months Ended

2021 2020 2021 2020

Operating lease revenue $ 1,070 $ 1,061 $ 2,129 $ 2,157

7 unchanged sentences

Leases with an initial term of 12 months or less are not recorded on the balance sheet and the Company recognizes lease expense for these leases on a straight-line basis over the lease term.

As of January 31, 2021, there were no material finance leases for which the Company was a lessee.

Operating lease costs were $ 142,000 and $ 137,000 for the three months ended January 31, 2021 and 2020, respectively, which are primarily included in agribusiness costs and expenses in the Company’s consolidated statements of operations.

As of April 30, 2021, there were no material finance leases for which the Company was a lessee.

Operating lease costs were $ 136,000 and $ 137,000 for the three months ended April 30, 2021 and 2020, respectively, and $ 278,000 and $ 274,000 for the six months ended April 30, 2021 and 2020, respectively, which are primarily included in agribusiness costs and expenses in the Company’s consolidated statements of operations.

Variable and short term lease costs were immaterial.

4 unchanged sentences

Supplemental balance sheet information related to leases consists of the following (in thousands):

Classification January 31, 2021 October 31, 2020

Classification April 30, 2021 October 31, 2020

Operating lease ROU assets Other assets $ 2,087 $ 2,053

Liabilities and Stockholders' Equity

Current operating lease liabilities Accrued liabilities 529 521

Current operating lease liabilities Accrued liabilities and payables to related parties 473 521

Non-current operating lease liabilities Other long-term liabilities 1,661 1,610

2 unchanged sentences

Three Months Ended

April 30, Six Months Ended

2021 2020 2021 2020

Cash paid for amounts included in the measurement of lease liabilities:

1 unchanged sentence

ROU assets obtained in exchange for new operating lease liabilities $ — $ — $ 271 $ —

Basic and Diluted Net Loss per Share

Basic net loss per common share is calculated using the weighted-average number of common shares outstanding during the period without consideration of the dilutive effect of conversion of preferred stock.

Diluted net loss per common share is calculated using the weighted-average number of common shares outstanding during the period plus the dilutive effect of conversion of unvested, restricted stock and preferred stock.

The computations for basic and diluted net loss per common share are as follows (in thousands, except per share amounts):

Basic and Diluted Net Income (Loss) per Share

Basic net income (loss) per common share is calculated using the weighted-average number of common shares outstanding during the period without consideration of the dilutive effect of conversion of preferred stock.

Diluted net income (loss) per common share is calculated using the weighted-average number of common shares outstanding during the period plus the dilutive effect of conversion of unvested, restricted stock and preferred stock.

The computations for basic and diluted net income (loss) per common share are as follows (in thousands, except per share amounts):

Three Months Ended

Basic net loss per common share:

Net loss applicable to common stock $ ( 4,333 ) $ ( 6,552 )

April 30, Six Months Ended

2021 2020 2021 2020

Basic net income (loss) per common share:

Net income (loss) applicable to common stock $ 1,807 $ ( 5,009 ) $ ( 2,526 ) $ ( 11,561 )

Effect of unvested, restricted stock ( 17 ) ( 17 ) ( 35 ) ( 34 )

Net loss for basic EPS ( 4,351 ) ( 6,569 )

Net income (loss) for basic EPS 1,790 ( 5,026 ) ( 2,561 ) ( 11,595 )

Weighted average common shares-basic 17,461 17,634 17,429 17,602

Basic net loss per common share $ ( 0.25 ) $ ( 0.37 )

Diluted net loss per common share:

Net loss for diluted EPS $ ( 4,351 ) $ ( 6,569 )

Basic net income (loss) per common share $ 0.10 $ ( 0.29 ) $ ( 0.15 ) $ ( 0.66 )

Diluted net income (loss) per common share:

Net income (loss) for diluted EPS $ 1,790 $ ( 5,026 ) $ ( 2,561 ) $ ( 11,595 )

Weighted average common shares–basic 17,461 17,634 17,429 17,602

1 unchanged sentence

Weighted average common shares–diluted 17,461 17,634 17,429 17,602

Diluted net loss per common share $ ( 0.25 ) $ ( 0.37 )

Diluted net income (loss) per common share $ 0.10 $ ( 0.29 ) $ ( 0.15 ) $ ( 0.66 )

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Basic and Diluted Net Loss per Share (continued)

Basic and Diluted Net Income (Loss) per Share (continued)

Diluted earnings (losses) per common share are computed using the more dilutive method of either the two-class method or the treasury stock method.

1 unchanged sentence

The Company’s unvested, restricted stock awards qualify as participating shares.

The Company excluded 226,000 and 149,000 , unvested, restricted shares, as calculated under the treasury stock method, from its computation of diluted earnings (losses) per share for the three months ended January 31, 2021 and 2020, respectively.

The Company excluded 178,000 and 220,000 , unvested, restricted shares, as calculated under the treasury stock method, from its computation of diluted earnings (losses) per share for the three months ended April 30, 2021 and 2020, respectively, and 185,000 and 196,000 for the six months ended April 30, 2021 and 2020, respectively.

Related-Party Transactions

The Company has transactions with various related-parties as summarized in the tables below (in thousands):

January 31, 2021 October 31, 2020

April 30, 2021 October 31, 2020

Balance Sheet Balance Sheet

2 unchanged sentences

3 Cooperative association $ — $ — $ 49 $ — $ — $ — $ 123 $ —

4 Calavo $ 1,635 $ — $ — $ — $ — $ — $ — $ —

5 Cadiz / Fenner / WAM $ — $ 1,405 $ 247 $ 1,316 $ — $ 1,443 $ 182 $ 1,353

2 unchanged sentences

9 LLCB $ — $ — $ 5,450 $ — $ — $ — $ 5,300 $ —

Three Months Ended January 31, 2021 Three Months Ended January 31, 2020

10 Freska $ 86 $ — $ — $ — $ — $ — $ — $ —

11 Third party growers $ — $ — $ 94 $ — $ — $ — $ — $ —

Three Months Ended April 30, 2021 Three Months Ended April 30, 2020

Consolidated Statement of Operations Consolidated Statement of Operations

8 unchanged sentences

8 FGF $ 884 $ — $ 970 $ — $ 2,280 $ — $ 2,270 $ — $ —

10 Freska $ 96 $ — $ 142 $ — $ — $ — $ — $ — $ —

11 Third party growers $ — $ — $ 116 $ — $ — $ — $ — $ — $ —

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Related-Party Transactions (continued)

Six Months Ended April 30, 2021 Six Months Ended April 30, 2020

Consolidated Statement of Operations Consolidated Statement of Operations

Ref Related Party Net Revenue Agribusiness Net Revenue Rental Operations Agribusiness Expense and Other Dividends Paid Net Revenue Agribusiness Net Revenue Rental Operations Agribusiness Expense and Other Other Income, Net Dividends Paid

1 Employees $ — $ 404 $ — $ — $ — $ 390 $ — $ — $ —

2 Mutual water companies $ — $ — $ 605 $ — $ — $ — $ 464 $ — $ —

3 Cooperative association $ — $ — $ 526 $ — $ — $ — $ 893 $ — $ —

4 Calavo $ 2,553 $ 157 $ 280 $ 252 $ 1,572 $ 165 $ 178 $ 220 $ 252

5 Cadiz / Fenner / WAM $ — $ — $ 235 $ — $ — $ — $ 171 $ — $ —

6 Colorado River Growers $ 157 $ — $ 2,772 $ — $ 522 $ — $ 5,337 $ — $ —

7 YMIDD $ — $ — $ 62 $ — $ — $ — $ 86 $ — $ —

8 FGF $ 2,555 $ — $ 1,228 $ — $ 2,479 $ — $ 2,433 $ — $ —

10 Freska $ 96 $ — $ 142 $ — $ — $ — $ — $ — $ —

11 Third party growers $ — $ — $ 116 $ — $ — $ — $ — $ — $ —

(1) Employees - The Company rents certain of its residential housing assets to employees on a month-to-month basis and recorded rental income from employees.

There were no rental payments due from employees at January 31, 2021 and October 31, 2020.

There were no rental payments due from employees at April 30, 2021 or October 31, 2020.

(2) Mutual water companies - The Company has representation on the boards of directors of the mutual water companies in which the Company has investments, refer to Note 8 - Other Assets.

5 unchanged sentences

Additionally, the Company leases office space to Calavo, purchased storage services from Calavo and had immaterial amounts due to Calavo for those services.

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Related-Party Transactions (continued)

(5) Cadiz / Fenner / WAM - A member of the Company’s board of directors serves as the CEO, President and a member of the board of directors of Cadiz, Inc.

9 unchanged sentences

The Company purchased water from YMIDD and had amounts payable to them for such purchases.

(8) FGF - The Company advances funds to FGF for fruit purchases which are recorded as an asset until the sales occur and the remaining proceeds become due to FGF.

(8) FGF Trapani ("FGF") - The Company advances funds to FGF for fruit purchases which are recorded as an asset until the sales occur and the remaining proceeds become due to FGF.

Additionally, FGF provided farming, packing, by-product processing and administrative services to Trapani Fresh.

The Company had a receivable from FGF for lemon sales and a payable due to FGF for fruit purchases and services.

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Related-Party Transactions (continued)

(9) LLCB - Refer to Note 5 - Real Estate Development.

The effective tax rate for the three months ended January 31, 2021 was higher than the federal statutory tax rate of 21% mainly due to foreign jurisdictions which are taxed at different rates, state taxes, and nondeductible tax items.

The Company has no material uncertain tax positions as of January 31, 2021.

(10) Freska - A member of the Company's board of directors is a majority shareholder of Freska Produce International, LLC ("Freska").

The Company had avocado sales to Freska and a corresponding receivable for such sales.

(11) Third party growers - A member of the Company's board of directors markets lemons through the Company and the Company had payments due to the member for such lemon procurement.

The effective tax rate for the six months ended April 30, 2021 was lower than the federal statutory tax rate of 21% mainly due to foreign jurisdictions which are taxed at different rates, state taxes, and nondeductible tax items.

The Company has no material uncertain tax positions as of April 30, 2021.

The Company recognizes interest expense and penalties related to income tax matters as a component of income tax expense.

There was no accrued interest or penalties associated with uncertain tax positions as of January 31, 2021.

There was no accrued interest or penalties associated with uncertain tax positions as of April 30, 2021.

Retirement Plans

3 unchanged sentences

The Plan is funded consistent with the funding requirements of federal law and regulations.

There were no funding contributions during the three months ended January 31, 2021 and 2020.

The components of net periodic pension cost for the Plan for the three months ended January 31, 2021 and 2020 were as follows (in thousands):

There were no funding contributions during the six months ended April 30, 2021 and 2020.

The components of net periodic pension cost for the Plan for the three and six months ended April 30, 2021 and 2020 were as follows (in thousands):

Three Months Ended

April 30, Six Months Ended

2021 2020 2021 2020

Administrative expenses $ 69 $ 69 $ 138 $ 139

4 unchanged sentences

Net periodic benefit cost $ 166 $ 179 $ 331 $ 357

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Commitments and Contingencies

2 unchanged sentences

Legal claims are inherently uncertain, however, and it is possible that the Company’s business, financial condition, liquidity and/or operating results could be adversely affected in the future by legal proceedings.

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Stock-based Compensation and Treasury Stock

14 unchanged sentences

During January 2021 and 2020, 27,815 and 17,841 shares, respectively, of common stock were granted as Director Awards.

The Company recognized $ 469,000 and $ 358,000 of stock-based compensation to non-employee directors during the three months ended January 31, 2021 and 2020, respectively.

The Company recognized $ 469,000 and $ 358,000 of stock-based compensation to non-employee directors during the six months ended April 30, 2021 and 2020, respectively.

During the three months ended January 31, 2021 and 2020, members of management exchanged 46,993 and 11,314 shares, respectively, of common stock with fair values of $ 701,000 and $ 213,000 , respectively, at the date of the exchanges, for the payment of payroll taxes associated with the vesting of shares under the Company’s stock-based compensation programs.

2 unchanged sentences

On March 12, 2020, the Board of Directors of the Company approved a share repurchase program authorizing the Company to repurchase up to $ 10,000,000 of its outstanding shares of common stock through March 2021.

Under the share repurchase program, purchases of shares of common stock may be made from time to time in the open market or in privately negotiated transactions.

The share repurchase program may be modified, suspended or discontinued at any time and does not commit the Company to repurchase shares of its common stock.

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

During fiscal year 2020, the Company repurchased 250,977 shares under the share repurchase program for approximately $ 3,493,000 .

This program expired in March 2021.

Segment Information

9 unchanged sentences

The other agribusiness segment includes sales, farming and harvest costs of oranges, specialty citrus and other crops.

Revenues related to rental operations are included in “Corporate and Other.” Other agribusiness revenues consist of oranges of $ 1,091,000 and specialty citrus and other crops of $ 1,849,000 for the three months ended January 31, 2021 and oranges of $ 2,272,000 and specialty citrus and other crops of $ 1,892,000 for the three months ended January 31, 2020.

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Segment Information (continued)

Revenues related to rental operations are included in “Corporate and Other.” Other agribusiness revenues consisted of oranges of $ 1,404,000 and $ 2,495,000 and specialty citrus and other crops of $ 1,175,000 and $ 3,024,000 for the three and six months ended April 30, 2021, respectively.

Other agribusiness revenues consisted of oranges of $ 2,667,000 and $ 4,939,000 and specialty citrus and other crops of $ 1,152,000 and $ 3,044,000 for the three and six months ended April 30, 2020, respectively.

The Company does not separately allocate depreciation and amortization to its fresh lemons, lemon packing, avocados and other agribusiness segments.

4 unchanged sentences

Intersegment revenues represent packing revenues related to lemons grown on the Company’s orchards.

Segment information for the three months ended January 31, 2021 (in thousands):

Segment information for the three months ended April 30, 2021 (in thousands):

Packing Eliminations

8 unchanged sentences

Depreciation and amortization — — — — — 2,285 267 2,552

Operating (loss) income $ ( 207 ) $ 2,051 $ — $ — $ 567 $ 199 $ ( 5,839 ) $ ( 5,640 )

Segment information for the three months ended January 31, 2020 (in thousands):

Operating income (loss) $ 3,971 $ 4,511 $ — $ 1,274 $ 76 $ 7,547 $ ( 5,163 ) $ 2,384

Segment information for the three months ended April 30, 2020 (in thousands):

Packing Eliminations

8 unchanged sentences

Depreciation and amortization — — — — — 2,160 273 2,433

Operating income (loss) $ 1,754 $ 2,009 $ — $ 461 $ 426 $ 2,490 $ ( 5,323 ) $ ( 2,833 )

Segment information for the six months ended April 30, 2021 (in thousands):

Packing Eliminations

Avocados Other

Agribusiness Total

Agribusiness Corporate

and Other Total

Revenues from external customers $ 61,900 $ 11,000 $ — $ 2,707 $ 5,519 $ 81,126 $ 2,281 $ 83,407

Intersegment revenue — 15,967 ( 15,967 ) — — — — —

Total net revenues 61,900 26,967 ( 15,967 ) 2,707 5,519 81,126 2,281 83,407

Costs and expenses 58,136 20,405 ( 15,967 ) 1,433 4,876 68,883 12,727 81,610

Depreciation and amortization — — — — — 4,497 556 5,053

Operating income (loss) $ 3,764 $ 6,562 $ — $ 1,274 $ 643 $ 7,746 $ ( 11,002 ) $ ( 3,256 )

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Segment Information (continued)

Segment information for the six months ended April 30, 2020 (in thousands):

Packing Eliminations

Avocados Other

Agribusiness Total

Agribusiness Corporate

and Other Total

Revenues from external customers $ 60,772 $ 7,977 $ — $ 2,190 $ 7,983 $ 78,922 $ 2,305 $ 81,227

Intersegment revenue — 15,559 ( 15,559 ) — — — — —

Total net revenues 60,772 23,536 ( 15,559 ) 2,190 7,983 78,922 2,305 81,227

Costs and expenses 61,312 18,937 ( 15,559 ) 2,034 7,324 74,048 13,480 87,528

Depreciation and amortization — — — — — 4,444 554 4,998

Operating (loss) income $ ( 540 ) $ 4,599 $ — $ 156 $ 659 $ 430 $ ( 11,729 ) $ ( 11,299 )

Subsequent Events

In June 2021, the Company entered into an agreement, effective March 1, 2021, to sell and license certain assets of Trapani Fresh to its 49 % partner in the joint venture, FGF.

These assets consist of packing supplies and certain intangible assets related to the packing, marketing, and selling business of Trapani Fresh.

The total consideration to be received is approximately $ 3,800,000 over an 8-year term in 16 equal installments.

There was no material gain or loss recognized on the transaction.

Trapani Fresh continues to own and operate the 1,200 -acre Santa Clara ranch and now sells the lemons it grows to FGF, who packs, markets, and sells the fruit to its export customers.

Except as described in the notes to the interim consolidated financial statements, no other subsequent events occurred that require recognition or disclosure in the unaudited consolidated financial statements.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements