What changed in this filing

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Item 2. Management’s Discussion and Analysis

2021-09-08 compared with 2021-06-08 · 217 added, 200 removed, 412 unchanged (50% of the section changed)

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("Associated"), we began using federal project water in Arizona from the Colorado River through the YMIDD.

We also have acquired water rights in Chile related to our acquisitions of PDA and San Pablo and in Argentina related to our acquisition of Trapani Fresh.

We also have acquired water rights in Chile related to our acquisitions of PDA and San Pablo.

We use a combination of ground water provided by wells that derive water from the San Joaquin Valley Basin and water from various water districts and irrigation districts in Tulare County, California, which is in the agriculturally productive San Joaquin Valley.

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California has experienced below average precipitation since 2018 and according to the U.S.

Drought Monitor, California is experiencing severe drought conditions as of April 30, 2021.

Drought Monitor, California is experiencing exceptional drought conditions as of July 31, 2021.

In May 2021, the California Governor declared a drought state of emergency for 41 of the 58 counties.

Federal officials who oversee the Central Valley Project, California’s largest water delivery system, allocated 5% of the contracted amount of water to San Joaquin Valley farmers in 2021, compared to 100% in 2017 through 2020.

We are assessing the impact these reductions may have on our California orchards.

In August 2021, the U.S.

Bureau of Reclamation declared a Level 1 Shortage Condition at Lake Mead in the Lower Colorado River Basin for the first time ever, requiring shortage reductions and water savings contributions for states in the southwest.

Beginning January 1, 2022, Arizona will see water releases from Lake Mead reduced by approximately 18% of the state’s annual apportionment.

We are assessing the impact these reductions may have on our Arizona orchards.

Recent Developments

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The first phase of the project broke ground to commence mass grading in November 2017.

The Joint Venture has closed on lot sales representing 464 units from inception through April 30, 2021, including 110 units in fiscal year 2021.

The Joint Venture has closed on lot sales representing 556 units from inception through July 31, 2021, including 202 units in fiscal year 2021.

For further information see Note 5 – Real Estate Development of the notes to consolidated financial statements included in this Quarterly Report on Form 10-Q.

In December 2020, we received $5.0 million of federal income tax refunds related to the Coronavirus Aid Relief and Economic Security Act and we expect to receive an additional $0.9 million of California state refunds in fiscal year 2021.

On March 12, 2020, the Board of Directors of our Company approved a share repurchase program authorizing us to repurchase up to $10.0 million of our outstanding shares of common stock through March 2021.

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This program expired in March 2021.

On March 23, 2021, we declared a cash dividend of $0.075 per common share paid on April 16, 2021, in the aggregate amount of $1.3 million to stockholders of record as of April 5, 2021.

In December 2020, we received $5.0 million of federal income tax refunds related to the Coronavirus Aid Relief and Economic Security Act and received an additional $0.9 million of California state refunds in the third quarter of fiscal year 2021.

In June 2021, we entered into an agreement, effective March 1, 2021, to sell and license certain assets of Trapani Fresh to our 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 $3.9 million 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.

As a result of this transaction, Trapani Fresh now recognizes lemon revenues at the market price less packinghouse charges to harvest, pack and market the fruit.

In June 2021, we entered into a Master Loan Agreement (the “MLA”) with Farm Credit West, PCA (the “Lender”) dated June 1, 2021, together with a revolving credit facility supplement (the “Revolving Credit Supplement”), a non-revolving credit facility supplement (the “Non-Revolving Credit Supplement,” and together with the Revolving Credit Supplement, the “Supplements”) and an agreement to convert to fixed interest rate ("Fixed Interest Rate Agreement").

The MLA governs the terms of the Supplements.

The MLA amends and restates the previous Master Loan Agreement between the Company and the Lender, dated June 19, 2017 and extends the principal repayment to July 1, 2026.

In August 2021, we entered into an equipment finance agreement (a "FCW term loan") with Lender in the amount of $2.5 million and used the proceeds to payoff the Wells Fargo term loan.

The FCW term loan has a fixed interest rate of 3.19% and is payable in monthly installments through September 2026.

On June 22, 2021, we declared a cash dividend of $0.075 per common share paid on July 16, 2021, in the aggregate amount of $1.3 million to stockholders of record as of July 6, 2021.

During the nine months ended July 31, 2021, we have paid cash dividends of $0.225 per common share in the aggregate amount of $4.0 million.

COVID-19 Pandemic

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The export market for fresh product has also significantly declined due to COVID-19 impacts.

The decline in demand for our products beginning the second quarter of fiscal year 2020, which we believe was a result of the COVID-19 pandemic, negatively impacted our sales and profitability for the second, third and fourth quarters of fiscal year 2020 and in the first half of fiscal year 2021.

The decline in demand for our products beginning the second quarter of fiscal year 2020, which we believe was a result of the COVID-19 pandemic, negatively impacted our sales and profitability for the last three quarters of fiscal year 2020 and in the first three quarters of fiscal year 2021.

We also expect an adverse impact on our sales and profitability in future periods.

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Risk Factors of our Annual Report on Form 10-K for the year ended October 31, 2020.

Although subject to unforeseen changes that may arise as the COVID-19 pandemic continues to unfold, we currently expect improvement in the second half of fiscal year 2021.

Although subject to unforeseen changes that may arise as the COVID-19 pandemic continues to unfold, we currently expect improvement in fiscal year 2022.

We took proactive actions early on to protect the health of our employees and their families, including curtailing business travel and encouraging video conferencing whenever possible.

In addition, as the COVID-19 pandemic worsened throughout the spring of 2020, we allowed personnel to work remotely to the extent possible.

While we believe we have responded appropriately to mitigate the impacts of the COVID-19 pandemic, as the situation evolves, we will continue to analyze additional mitigation measures that

may be needed to preserve the health and safety of our workforce and our customers and the ongoing continuity of our business operations.

While we believe we have responded appropriately to mitigate the impacts of the COVID-19 pandemic, as the situation evolves, we will continue to analyze additional mitigation measures that may be needed to preserve the health and safety of our workforce and our customers and the ongoing continuity of our business operations.

Those measures might include modifying workspaces, continuing social distancing policies, implementing new personal protective equipment or health screening policies at our facilities, or such other industry best practices needed to continue to maintain a healthy and safe environment for our employees amidst the COVID-19 pandemic.

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economy, the ongoing business operations of our clients and our results of operations and financial condition.

While our management team is actively monitoring the impacts of the COVID-19 pandemic and may take further actions altering our business operations that we determine are in the best interests of our employees and clients or as required by federal, state, or local authorities, the full impact of the COVID-19 pandemic on our results of operations, financial condition, or liquidity for the second half of fiscal year 2021 and beyond cannot be fully estimated at this point.

While our management team is actively monitoring the impacts of the COVID-19 pandemic and may take further actions altering our business operations that we determine are in the best interests of our employees and clients or as required by federal, state, or local authorities, the full impact of the COVID-19 pandemic on our results of operations, financial condition, or liquidity for the fourth quarter of fiscal year 2021 and beyond cannot be fully estimated at this point.

The following discussions are subject to the future effects of the COVID-19 pandemic on our ongoing business operations.

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The following table shows the results of operations (in thousands):

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

Three Months Ended July 31, Nine Months Ended July 31,

2021 2020 2021 2020

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Interest expense, net of patronage dividends (574) (92) (1,062) (1,089)

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

Equity in earnings of investments, net 1,462 832 2,471 341

Loss on stock in Calavo Growers, Inc.

— — — (6,299)

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

Other income, net 32 11 83 246

Total other income (expense) 1,131 751 1,771 (6,801)

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EBITDA and adjusted EBITDA are summarized and reconciled to net income (loss) attributable to Limoneira Company which management considers to be the most directly comparable financial measure calculated and presented in accordance with GAAP as follows (in thousands):

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

Three Months Ended July 31, Nine Months Ended July 31,

2021 2020 2021 2020

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Loss on stock in Calavo Growers, Inc.

— 4,275 — 6,299

(Gain) loss on sale and disposal of property assets (4) 255 (20) 769

Adjusted EBITDA $ 7,836 $ 5,978 $ 10,805 $ 835

Three Months Ended April 30, 2021 Compared to the Three Months Ended April 30, 2020

Total net revenues for the second quarter of fiscal year 2021 were $45.1 million compared to $39.6 million for the same period of fiscal year 2020.

The 14% increase of $5.5 million was primarily the result of increased agribusiness revenues, as detailed below ($ in thousands):

Agribusiness Revenues for the Three Months Ended April 30,

Three Months Ended July 31, 2021 Compared to the Three Months Ended July 31, 2020

Total net revenues for the third quarter of fiscal year 2021 were $49.1 million compared to $53.6 million for the same period of fiscal year 2020.

The 8% decrease of $4.4 million was primarily the result of decreased agribusiness revenues in lemons and avocados, as detailed below ($ in thousands):

Agribusiness Revenues for the Three Months Ended July 31,

2021 2020 Change

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Agribusiness revenues $ 47,954 $ 52,387 $ (4,433) (8)%

The increase in the second quarter of fiscal year 2021 was primarily the result of increased volume and higher prices of fresh lemons sold compared to the same period in fiscal year 2020.

During the second quarter of fiscal years 2021 and 2020, fresh lemon sales were $28.7 million and $25.3 million on, in aggregate, 1,528,000 and 1,475,000 cartons of lemons sold at average per carton prices of $18.79 and $17.14, respectively.

Lemon revenues in the second quarter of fiscal years 2021 and 2020 included $6.1 million and $3.9 million shipping and handling, $1.6 million and $1.6 million lemon by-products and $2.3 million and $1.9 million other lemon sales, respectively.

The increase in the second quarter of fiscal year 2021 was primarily the result of increased volume of avocados sold partially offset by lower prices compared to the same period of fiscal year 2020.

During the second quarter of fiscal years 2021 and 2020, 2,142,000 and 1,233,000 pounds of avocados were sold at an average per pound price of $1.26 and $1.64, respectively.

The decrease in the second quarter of fiscal year 2021 was primarily the result of decreased volume of oranges sold partially offset by higher prices compared to the same period in fiscal year 2020.

In the second quarter of fiscal years 2021 and 2020, we sold 154,000 and 356,000 40-pound carton equivalents of oranges at an average per carton price of $9.12 and $7.49, respectively.

Additionally, in the second quarter of fiscal year 2021, revenues included $0.1 million in Chile and in the second quarter of fiscal year 2020, revenues included $0.6 million of oranges purchased for resale.

The decrease in the third quarter of fiscal year 2021 was primarily the result of decreased volume of fresh lemons sold partially offset by higher prices and increased other lemon sales related to brokered fruit compared to the same period of fiscal year 2020.

During the third quarter of fiscal years 2021 and 2020, fresh lemon sales were $24.4 million and $35.4 million on, in aggregate, 1,144,000 and 1,979,000 cartons of lemons sold at average per carton prices of $21.34 and $17.91, respectively.

Lemon revenues in the third quarter of fiscal years 2021 and 2020 included $4.5 million and $3.8 million shipping and handling, $0.6 million and $1.1 million lemon by-products and $11.2 million and $2.9 million other lemon sales, respectively.

The decrease in the third quarter of fiscal year 2021 was primarily the result of decreased volume of avocados sold partially offset by higher prices compared to the same period of fiscal year 2020.

During the third quarter of fiscal years 2021 and 2020, 3,513,000 and 6,138,000 pounds of avocados were sold at an average per pound price of $1.16 and $1.00, respectively.

During the third quarter of fiscal years 2021 and 2020, we sold 259,000 and 184,000 40-pound carton equivalents of oranges at an average per carton price of $7.65 and $12.13, respectively.

• Specialty citrus and other crops:

Specialty citrus and other crops revenues in the second quarter of fiscal year 2021 were similar to the same period in fiscal year 2020.

During the second quarter of fiscal years 2021 and 2020, we sold 129,000 and 125,000 40-pound carton equivalents of specialty citrus at an average per carton price of $9.11 and $9.22, respectively.

Other operations revenue in the second quarter of fiscal year 2021 was similar to the same period of fiscal year 2020.

During the third quarter of fiscal years 2021 and 2020, we sold 45,000 and 72,000 40-pound carton equivalents of specialty citrus at an average per carton price of $14.04 and $10.94, respectively.

Other operations revenue in the third quarter of fiscal year 2021 was similar to the same period of fiscal year 2020.

Costs and Expenses

Our total costs and expenses in the second quarter of fiscal year 2021 were $42.7 million compared to $42.4 million in the same period of fiscal year 2020.

The 1% increase of $0.3 million was primarily attributable to increases in our harvest costs and packing costs, partially offset by decreases in growing costs and third-party grower costs.

Our total costs and expenses in the third quarter of fiscal year 2021 were $45.8 million compared to $51.7 million in the same period of fiscal year 2020.

The 12% decrease of $6.0 million was primarily attributable to decreased packing costs and harvest costs, partially offset by increased growing costs and third-party grower costs.

Costs and expenses associated with our agribusiness division include packing costs, harvest costs, growing costs, costs related to the fruit we procure and sell for third-party growers and depreciation and amortization expense, as detailed below ($ in thousands):

Agribusiness Costs and Expenses for the Three Months Ended April 30,

Agribusiness Costs and Expenses for the Three Months Ended July 31,

2021 2020 Change

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Packing costs primarily consist of the costs to pack lemons for sale such as labor and benefits, cardboard cartons, fruit treatments, packing and shipping supplies and facility operating costs.

In the second quarter of fiscal years 2021 and 2020, lemon packing costs were $10.9 million and $10.4 million, respectively.

During the second quarter of fiscal years 2021 and 2020, we packed and sold 1,528,000 and 1,475,000 cartons of lemons at average per carton costs of $7.12 and $7.06, respectively.

Additionally, in the second quarter of fiscal years 2021 and 2020, packing costs included $0.8 million and $0.7 million of shipping costs, respectively.

In the third quarter of fiscal years 2021 and 2020, lemon packing costs were $9.3 million and $15.9 million, respectively.

During the third quarter of fiscal years 2021 and 2020, we packed and sold 1,144,000 and 1,979,000 cartons of lemons at average per carton costs of $8.11 and $8.05, respectively.

Additionally, in the third quarter of fiscal years 2021 and 2020, packing costs included $0.6 million and $1.1 million of shipping costs, respectively.

• Harvest costs:

The increase in the second quarter of fiscal year 2021 was primarily the result of increased volume of lemons and avocados harvested partially offset by decreased volume of oranges and specialty citrus harvested compared to the same period in fiscal year 2020.

The decrease in the third quarter of fiscal year 2021 was primarily the result of decreased volume of lemons, avocados and specialty citrus harvested, partially offset by increased volume of oranges harvested compared to the same period of fiscal year 2020.

• Growing costs:

Growing costs, also referred to as cultural costs, consist of orchard maintenance costs such as cultivation, fertilization and soil amendments, pest control, pruning and irrigation.

The decrease in the second quarter of fiscal year 2021 was primarily due to farm management decisions based on weather, harvest timing and crop conditions.

Also referred to as cultural costs, consist of orchard maintenance costs such as cultivation, fertilization and soil amendments, pest control, pruning and irrigation.

The increase in the third quarter of fiscal year 2021 was primarily due to farm management decisions based on weather, harvest timing and crop conditions.

• Third-party grower costs:

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The cost of procuring lemons from other growers is referred to as third-party grower costs.

The decrease in the second quarter of fiscal year 2021 was primarily due to decreased volume of third-party grower lemons sold partially offset by higher prices compared to the same period of fiscal year 2020.

Of the 1,528,000 and 1,475,000 cartons of lemons packed and sold during the second quarter of fiscal years 2021 and 2020, 758,000 (50%) and 882,000 (60%) were procured from third-party growers at average per carton prices of $12.92 and $11.70, respectively.

Additionally, in the second quarter of fiscal year 2021 and 2020 we incurred $0.5 million and $0.9 million, respectively, of costs for purchased, packed fruit for resale.

The increase in the third quarter of fiscal year 2021 was primarily due to higher prices partially offset by decreased volume of third party grower fruit sold compared to the same period of fiscal year 2020.

Of the 1,144,000 and 1,979,000 cartons of lemons packed and sold during the third quarter of fiscal years 2021 and 2020, 655,000 (57%) and 1,269,000 (64%) were procured from third-party growers at average per carton prices of $14.88 and $8.78, respectively.

Additionally, in the third quarter of fiscal years 2021 and 2020 we incurred $8.1 million and $3.5 million, respectively, of costs for purchased, packed fruit for resale.

• Depreciation and amortization:

Depreciation and amortization expense for the second quarter of fiscal year 2021 was approximately $0.1 million higher than the same period of fiscal year 2020.

Other operations expenses were $1.1 million in the second quarter of fiscal years 2021 and 2020.

Selling, general and administrative costs and expenses were $5.2 million in the second quarter of fiscal year 2021 compared to $5.3 million in the second quarter of fiscal year 2020.

The 2% decrease of $0.1 million primarily consisted of the following:

• Audit, audit-related and income tax fees for the second quarter of fiscal year 2021 were $0.4 million lower than the same period of fiscal year 2020.

• Lemon selling expenses for the second quarter of fiscal year 2021 were $0.3 million lower than the same period of fiscal year 2020.

• Training, depreciation and other costs associated with an ERP software implementation for the second quarter of fiscal year 2021 were $0.1 million lower than the same period of fiscal year 2020.

• Labor, benefits and incentive compensation for the second quarter of fiscal year 2021 were $0.7 million higher than the same period of fiscal year 2020.

Depreciation and amortization expense for the third quarter of fiscal year 2021 was approximately $0.2 million lower than the same period of fiscal year 2020.

Other operations expenses were $1.0 million in the third quarter of both fiscal years 2021 and 2020.

Selling, general and administrative costs and expenses were $4.0 million in the third quarter of fiscal year 2021 compared to $3.9 million in the third quarter of fiscal year 2020.

The 3% increase of $0.1 million primarily consisted of the following:

• Lemon selling expenses for the third quarter of fiscal year 2021 were $0.3 million higher than the same period of fiscal year 2020.

• Labor, benefits and incentive compensation for the third quarter of fiscal year 2021 were $0.6 million lower than the same period of fiscal year 2020.

• General and administrative expenses, including certain corporate overhead expenses, for the third quarter of fiscal year 2021 were $0.4 million higher than the same period of fiscal year 2020.

Other Income (Expense)

Other income in the second quarter of fiscal year 2021 was comprised primarily of $0.6 million of equity in earnings of investments and $0.6 million of net interest expense.

Other expense in the second quarter of fiscal year 2020 was comprised primarily of $4.3 million loss on stock in Calavo Growers, Inc., $0.4 million of equity in losses of investments and $1.1 million of net interest expense.

We recorded an estimated income tax (provision) benefit of $(1.0) million and $3.5 million in the second quarter of fiscal years 2021 and 2020 on pre-tax income (loss) of $2.5 million and $(8.8) million, respectively.

The tax provision recorded for the second quarter of fiscal year 2021 differs from the U.S.

Other income in the third quarter of fiscal year 2021 was comprised primarily of $1.5 million of equity in earnings of investments and $0.4 million of net interest expense.

Other income in the third quarter of fiscal year 2020 was comprised primarily of $0.8 million of equity in earnings of investments and $0.1 million of net interest expense.

We recorded an estimated income tax provision of $1.3 million and $0.8 million in the third quarter of fiscal years 2021 and 2020, respectively, on pre-tax income of $4.5 million and $2.6 million, respectively.

The tax provision recorded for the third quarter of fiscal year 2021 differs from the U.S.

federal statutory tax rate of 21.0% due primarily to foreign jurisdictions which are taxed at different rates, state taxes, and nondeductible tax items.

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Net Loss Attributable to Noncontrolling Interest

Net loss attributable to noncontrolling interest represents 10% and 49% of the net loss of PDA and Trapani Fresh, respectively.

Six Months Ended April 30, 2021 Compared to the Six Months Ended April 30, 2020

Total net revenues for the six months ended April 30, 2021 were $83.4 million compared to $81.2 million for the six months ended April 30, 2020.

The 3% increase of $2.2 million was primarily the result of increased agribusiness revenues, as detailed below ($ in thousands):

Agribusiness Revenues for the Six Months Ended April 30,

Net loss attributable to noncontrolling interest represents 10% and 49% of the net losses of PDA and Trapani Fresh, respectively.

Nine Months Ended July 31, 2021 Compared to the Nine Months Ended July 31, 2020

Total net revenues for the nine months ended July 31, 2021 were $132.5 million compared to $134.8 million for the nine months ended July 31, 2020.

The 2% decrease of $2.3 million was primarily the result of decreased avocados and oranges agribusiness revenues partially offset by increased lemons agribusiness revenues, as detailed below ($ in thousands):

Agribusiness Revenues for the Nine Months Ended July 31,

2021 2020 Change

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Agribusiness revenues $ 129,080 $ 131,309 $ (2,229) (2)%

The increase in the first six months of fiscal year 2021 was primarily the result of increased volume of fresh lemons sold partially offset by lower prices compared to the same period in fiscal year 2020.

During the first six months of fiscal years 2021 and 2020, fresh lemon sales were $53.7 million and $52.3 million on, in aggregate, 2,847,000 and 2,755,000 cartons of lemons sold at average per carton prices of $18.85 and $18.99, respectively.

Lemon revenues in the first six months of fiscal years 2021 and 2020 included $11.0 million and $8.0 million shipping and handling, $2.5 million and $2.6 million lemon by-products and $5.8 million and $5.9 million other lemon sales, respectively.

The increase in the first six months of fiscal year 2021 was primarily the result of increased volume of avocados sold partially offset by lower prices compared to the same period of fiscal year 2020.

During the first six months of fiscal years 2021 and 2020, 2,142,000 and 1,359,000 pounds of avocados were sold at an average per pound price of $1.26 and $1.61, respectively.

The decrease in the first six months of fiscal year 2021 was primarily the result of decreased volume of oranges sold partially offset by higher prices compared to the same period in fiscal year 2020.

In the first six months of fiscal years 2021 and 2020, we sold 273,000 and 551,000 40-pound carton equivalents of oranges at an average per carton price of $9.14 and $8.75, respectively.

Additionally, in the first six months of both fiscal years 2021 and 2020, revenues included $0.1 million in Chile and in the first six months of fiscal year 2020, revenues included $1.4 million of oranges purchased for resale.

The increase in the first nine months of fiscal year 2021 was primarily the result of increases in other lemon sales related to brokered fruit and shipping and handling, partially offset by decreased volume of fresh lemons sold compared to the same period of fiscal year 2020.

During the first nine months of fiscal years 2021 and 2020, fresh lemon sales were $78.1 million and $87.8 million on, in aggregate, 3,992,000 and 4,734,000 cartons of lemons sold at average per carton prices of $19.56 and $18.54, respectively.

Lemon revenues in the first nine months of fiscal years 2021 and 2020 included $15.5 million and $11.8 million shipping and handling, $3.1 million and $3.7 million lemon by-products and $17.0 million and $8.8 million other lemon sales, respectively.

The decrease in the first nine months of fiscal year 2021 was primarily the result of decreased volume of avocados sold partially offset by higher prices compared to the same period of fiscal year 2020.

During the first nine months of fiscal years 2021 and 2020, 5,655,000 and 7,497,000 pounds of avocados were sold at an average per pound price of $1.20 and $1.11, respectively.

The decrease in the first nine months of fiscal year 2021 was primarily the result of decreased volume and lower prices of oranges sold compared to the same period of fiscal year 2020.

In the first nine months of fiscal years 2021 and 2020, we sold 533,000 and 736,000 40-pound carton equivalents of oranges at an average per carton price of $8.40 and $9.74, respectively.

• Specialty citrus and other crops:

Specialty citrus and other crops revenues in the first six months of fiscal year 2021 were similar to the same period in fiscal year 2020.

During the first six months of fiscal years 2021 and 2020, we sold 243,000 and 256,000 40-pound carton equivalents of specialty citrus at an average per carton price of $12.44 and $11.89, respectively.

Other operations revenue in the first six months of fiscal year 2021 was similar to the same period of fiscal year 2020.

Revenues during the first nine months of fiscal year 2021 were similar to the same period of fiscal year 2020.

During the first nine months of fiscal years 2021 and 2020, we sold 289,000 and 328,000 40-pound carton equivalents of specialty citrus at an average per carton price of $12.40 and $11.68, respectively.

Other operations revenue in the first nine months of fiscal year 2021 was similar to the same period of fiscal year 2020.

Costs and Expenses

Our total costs and expenses in the first six months of fiscal year 2021 were $86.7 million compared to $92.5 million in the same period of fiscal year 2020.

The 6% decrease of $5.9 million was primarily attributable to decreases in our growing and third-party grower costs partially offset by increased packing costs.

Our total costs and expenses in the first nine months of fiscal year 2021 were $132.4 million compared to $144.3 million in the same period of fiscal year 2020.

The 8% decrease of $11.9 million was primarily attributable to decreases in our packing costs, harvest costs and third-party grower costs.

Agribusiness Costs and Expenses for the Six Months Ended April 30,

Agribusiness Costs and Expenses for the Nine Months Ended July 31,

2021 2020 Change

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Packing costs primarily consist of the costs to pack lemons for sale such as labor and benefits, cardboard cartons, fruit treatments, packing and shipping supplies and facility operating costs.

In the first six months of fiscal years 2021 and 2020, lemon packing costs were $20.4 million and $19.0 million, respectively.

During the first six months of fiscal years 2021 and 2020, we packed and sold 2,847,000 and 2,755,000 cartons of lemons at average per carton costs of $7.17 and $6.89, respectively.

Additionally, in the first six months of fiscal years 2021 and 2020, packing costs included $1.6 million and $1.3 million of shipping costs, respectively.

In the first nine months of fiscal years 2021 and 2020, lemon packing costs were $29.7 million and $34.9 million, respectively.

During the first nine months of fiscal years 2021 and 2020, we packed and sold 3,992,000 and 4,734,000 cartons of lemons at average per carton costs of $7.44 and $7.38, respectively.

Additionally, in the first nine months of fiscal years 2021 and 2020, packing costs included $2.2 million and $2.4 million of shipping costs, respectively.

• Harvest costs:

The decrease in the first six months of fiscal year 2021 was primarily the result of decreased volume of oranges and specialty citrus harvested partially offset by increased volume of lemons and avocados harvested compared to the same period in fiscal year 2020.

The decrease in the first nine months of fiscal year 2021 was primarily the result of decreased volume of lemons, oranges and avocados harvested compared to the same period in fiscal year 2020.

• Growing costs:

Growing costs, also referred to as cultural costs, consist of orchard maintenance costs such as cultivation, fertilization and soil amendments, pest control, pruning and irrigation.

The decrease in the first six months of fiscal year 2021 was primarily due to farm management decisions based on weather, harvest timing and crop conditions.

Also referred to as cultural costs, consist of orchard maintenance costs such as cultivation, fertilization and soil amendments, pest control, pruning and irrigation.

The decrease in the first nine months of fiscal year 2021 was primarily due to farm management decisions based on weather, harvest timing and crop conditions.

• Third-party grower costs:

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The cost of procuring lemons from other growers is referred to as third-party grower costs.

The decrease in the first six months of fiscal year 2021 was primarily due to decreased volume and lower prices of third-party grower lemons sold compared to the same period of fiscal year 2020.

Of the 2,847,000 and 2,755,000 cartons of lemons packed and sold during the first six months of fiscal years 2021 and 2020, 1,394,000 (49%) and 1,587,000 (58%) were procured from third-party growers at average per carton prices of $13.70 and $13.87, respectively.

Additionally, in the first six months of fiscal year 2021 and 2020 we incurred $2.5 million and $4.3 million, respectively, of costs for purchased, packed fruit for resale.

The decrease in the first nine months of fiscal year 2021 was primarily due to decreased volume of third-party grower lemons sold partially offset by higher prices compared to the same period of fiscal year 2020.

Of the 3,992,000 and 4,734,000 cartons of lemons packed and sold during the first nine months of fiscal years 2021 and 2020, 2,048,000 (51%) and 2,856,000 (60%) were procured from third-party growers at average per carton prices of $14.08 and $11.61, respectively.

Additionally, in the first nine months of fiscal years 2021 and 2020 we incurred $10.6 million and $7.8 million, respectively, of costs for purchased, packed fruit for resale.

• Depreciation and amortization:

Depreciation and amortization expense for the first six months of fiscal year 2021 was approximately $0.1 million higher than the same period of fiscal year 2020.

Other operations expenses were $2.2 million and $2.4 million in the first six months of fiscal years 2021 and 2020, respectively.

Selling, general and administrative costs and expenses were $11.1 million in the first six months of fiscal year 2021 compared to $11.6 million in the first six months of fiscal year 2020.

Depreciation and amortization expense for the first nine months of fiscal year 2021 was approximately $0.1 million lower than the same period of fiscal year 2020.

Other operations expenses were $3.2 million and $3.4 million in the first nine months of fiscal years 2021 and 2020, respectively.

Selling, general and administrative costs and expenses were $15.2 million in the first nine months of fiscal year 2021 compared to $15.6 million in the first nine months of fiscal year 2020.

The 3% decrease of $0.4 million primarily consisted of the following:

• Lemon selling expenses for the first six months of fiscal year 2021 were $0.6 million lower than the same period of fiscal year 2020.

• Training, depreciation and other costs associated with an ERP software implementation for the first six months of fiscal year 2021 were $0.4 million lower than the same period of fiscal year 2020.

• Labor, benefits and incentive compensation for the first six months of fiscal year 2021 were $0.6 million higher than the same period of fiscal year 2020.

• General and administrative expenses, including certain corporate overhead expenses, for the first six months of fiscal year 2021 were $0.2 million lower than the same period of fiscal year 2020.

• Lemon selling expenses for the first nine months of fiscal year 2021 were $0.3 million lower than the same period of fiscal year 2020.

• Training, depreciation and other costs associated with an ERP software implementation for the first nine months of fiscal year 2021 were $0.3 million lower than the same period of fiscal year 2020.

• General and administrative expenses, including certain corporate overhead expenses, for the first nine months of fiscal year 2021 were $0.2 million higher than the same period of fiscal year 2020.

Other Income (Expense)

Other income in the first six months of fiscal year 2021 was comprised primarily of $1.0 million of equity in earnings of investments and $0.4 million of net interest expense.

Other expense in the first six months of fiscal year 2020 was comprised primarily of $6.3 million loss on stock in Calavo Growers, Inc., $0.5 million of equity in losses of investments and $1.0 million of net interest expense.

We recorded an estimated income tax benefit of $0.2 million and $6.6 million in the first six months of fiscal years 2021 and 2020 on pre-tax loss of $2.6 million and $18.9 million, respectively.

The tax benefit recorded for the first six months of fiscal year 2021 differs from the U.S.

Other income in the first nine months of fiscal year 2021 was comprised primarily of $2.5 million of equity in earnings of investments and $0.8 million of net interest expense.

Other expense in the first nine months of fiscal year 2020 was comprised primarily of $6.3 million loss on stock in Calavo Growers, Inc.

and $1.1 million of net interest expense, partially offset by $0.3 million of equity in earnings of investments.

We recorded an estimated income tax (provision) benefit of $(1.1) million and $5.9 million in the first nine months of fiscal years 2021 and 2020 on pre-tax income (loss) of $1.9 million and $(16.3) million, respectively.

The tax provision recorded for the first nine months of fiscal year 2021 differs from the U.S.

federal statutory tax rate of 21.0% due primarily to foreign jurisdictions which are taxed at different rates, state taxes, and nondeductible tax items.

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Net Loss Attributable to Noncontrolling Interest

Net loss attributable to noncontrolling interest represents 10% and 49% of the net loss of PDA and Trapani Fresh, respectively.

Net loss attributable to noncontrolling interest represents 10% and 49% of the net losses of PDA and Trapani Fresh, respectively.

Segment Results of Operations

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See Note 18 - Segment Information of the notes to consolidated financial statements included in this Quarterly Report on Form 10-Q for additional information regarding our operating segments.

Three Months Ended April 30, 2021 Compared to the Three Months Ended April 30, 2020

The following table shows the segment results of operations for the three months ended April 30, 2021 (in thousands):

Three Months Ended July 31, 2021 Compared to the Three Months Ended July 31, 2020

The following table shows the segment results of operations for the three months ended July 31, 2021 (in thousands):

Packing Eliminations

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Operating income (loss) $ 4,449 $ 2,453 $ — $ 1,365 $ 1,090 $ 7,263 $ (3,889) $ 3,374

The following table shows the segment results of operations for the three months ended April 30, 2020 (in thousands):

The following table shows the segment results of operations for the three months ended July 31, 2020 (in thousands):

Packing Eliminations

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Depreciation and amortization — — — — — 2,271 286 2,557

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

Operating (loss) income $ (235) $ 4,117 $ — $ 3,596 $ 354 $ 5,561 $ (3,747) $ 1,814

The following analysis should be read in conjunction with the previous section “Results of Operations.”

Fresh lemons segment revenue is comprised of sales of fresh lemons, lemon by-products and other lemon revenue such as purchased, packed fruit for resale.

For the second quarter of fiscal years 2021 and 2020, our fresh lemons segment total net revenues were $32.6 million and $28.7 million, respectively.

The 14% increase of $3.9 million was primarily due to increases in fresh lemon carton sales of $3.4 million, lemon by-products of $0.1 million and brokerage and other sales of $0.4 million.

For the third quarter of fiscal years 2021 and 2020, our fresh lemons segment total net revenues were $36.3 million and $39.5 million, respectively.

The 8% decrease of $3.2 million was primarily due to decreases in fresh lemon carton and lemon by-products sales of $11.5 million partially offset by an increase in brokered fruit and other lemon sales of $8.3 million.

Costs and expenses associated with our fresh lemons segment include harvest costs, growing costs and costs of lemons we procure from third-party growers.

For the second quarter of fiscal years 2021 and 2020, our fresh lemons segment costs and expenses were $28.6 million and $27.0 million, respectively.

The 6% increase of $1.7 million primarily consisted of the following:

• Harvest costs for the second quarter of fiscal year 2021 were $1.2 million higher than the same period of fiscal year 2020.

• Growing costs for the second quarter of fiscal year 2021 were $0.1 million higher than the same period of fiscal year 2020.

• Third-party grower costs for the second quarter of fiscal year 2021 were $0.4 million lower than the same period of fiscal year 2020.

• Transportation costs for the second quarter of fiscal year 2021 were $0.1 million higher than the same period of fiscal year 2020.

• Intersegment costs and expenses for the second quarter of fiscal year 2021 were $0.8 million higher than the same period of fiscal year 2020.

For the third quarter of fiscal years 2021 and 2020, our fresh lemons segment costs and expenses were $31.8 million and $39.7 million, respectively.

The 20% decrease of $7.8 million primarily consisted of the following:

• Harvest costs for the third quarter of fiscal year 2021 were $3.0 million lower than the same period of fiscal year 2020.

• Growing costs for the third quarter of fiscal year 2021 were $1.1 million higher than the same period of fiscal year 2020.

• Third-party grower costs for the third quarter of fiscal year 2021 were $3.6 million higher than the same period of fiscal year 2020.

• Transportation costs for the third quarter of fiscal year 2021 were $0.5 million lower than the same period of fiscal year 2020.

• Intersegment costs and expenses for the third quarter of fiscal year 2021 were $9.1 million lower than the same period of fiscal year 2020.

Lemon Packing

Lemon packing segment revenue is comprised of intersegment packing revenue and shipping and handling revenue.

For the second quarter of fiscal years 2021 and 2020, our lemon packing segment total net revenues were $15.4 million and $12.3 million, respectively.

The 25% increase of $3.0 million was primarily due to higher average per carton pack revenue.

For the third quarter of fiscal years 2021 and 2020, our lemon packing segment total net revenues were $11.7 million and $20.1 million, respectively.

The 42% decrease of $8.4 million was primarily due to decreased volume of lemons packed and sold.

Costs and expenses associated with our lemon packing segment consist of the cost to pack lemons for sale such as labor and benefits, cardboard cartons, fruit treatments, packing and shipping supplies and facility operating costs.

For the second quarter of fiscal years 2021 and 2020, our lemon packing costs and expenses were $10.9 million and $10.3 million, respectively.

The 5% increase of $0.5 million was primarily due to increased volume of lemons packed at higher average per carton costs.

For the second quarter of fiscal years 2021 and 2020, lemon packing segment operating income per carton sold was $2.95 and $1.41, respectively.

In the second quarter of fiscal years 2021 and 2020, the lemon packing segment included $9.3 million and $8.5 million, respectively, of intersegment revenues that were charged to the fresh lemons segment to pack lemons for sale.

For the third quarter of fiscal years 2021 and 2020, our lemon packing costs and expenses were $9.3 million and $16.0 million, respectively.

The 42% decrease of $6.7 million was primarily due to decreased volume of lemons packed.

For the third quarter of fiscal years 2021 and 2020, lemon packing segment operating income per carton sold was $2.14 and $2.08, respectively.

In the third quarter of fiscal years 2021 and 2020, the lemon packing segment included $7.2 million and $16.3 million, respectively, of intersegment revenues that were charged to the fresh lemons segment to pack lemons for sale.

Such intersegment revenues and expenses are eliminated in our consolidated financial statements.

For the second quarter of fiscal years 2021 and 2020, our avocados segment had total revenues of $2.7 million and $2.0 million, respectively.

For the third quarter of fiscal years 2021 and 2020, our avocados segment had total revenues of $4.1 million and $6.1 million, respectively.

Costs and expenses associated with our avocados segment include harvest and growing costs.

For the second quarter of fiscal years 2021 and 2020, our avocados segment costs and expenses were $1.4 million and $1.6 million, respectively.

The 8% decrease of $0.1 million primarily consisted of growing costs.

For the third quarter of fiscal years 2021 and 2020, our avocados segment costs and expenses were $2.7 million and $2.5 million, respectively.

The 7% increase of $0.2 million primarily consisted of growing costs.

Other Agribusiness

For the second quarter of fiscal years 2021 and 2020, our other agribusiness segment total net revenues were $2.6 million and $3.8 million, respectively.

The 32% decrease of $1.2 million primarily consisted of the following:

• Orange revenues for the second quarter of fiscal year 2021 were $1.3 million lower than the same period of fiscal year 2020.

• Specialty citrus and other crops revenues for the second quarter of fiscal year 2021 were similar to the same period of fiscal year 2020.

For the third quarter of fiscal years 2021 and 2020, our other agribusiness segment total net revenues were similar at $3.0 million, which consisted of the following:

• Orange revenues for the third quarter of fiscal year 2021 were $0.3 million lower than the same period of fiscal year 2020.

• Specialty citrus and other crops revenues for the third quarter of fiscal year 2021 were $0.3 million higher compared to the same period of fiscal year 2020.

Costs and expenses associated with our other agribusiness segment include harvest costs, growing costs and purchased fruit costs.

For the second quarter of fiscal years 2021 and 2020, our other agribusiness costs and expenses were $2.5 million and $3.4 million, respectively.

For the third quarter of fiscal years 2021 and 2020, our other agribusiness costs and expenses were $2.0 million and $2.7 million, respectively.

The 27% decrease of $0.7 million primarily consisted of the following:

• Harvest costs for the second quarter of fiscal year 2021 were $0.4 million lower than the same period of fiscal year 2020.

• Growing costs for the second quarter of fiscal year 2021 were $0.1 million higher than the same period of fiscal year 2020.

• Purchased fruit costs for the second quarter of fiscal year 2021 were $0.6 million lower than the same period of fiscal year 2020.

Total agribusiness depreciation and amortization expenses for the second quarter of fiscal year 2021 were $0.1 million higher than the same period of fiscal year 2020.

• Harvest costs for the third quarter of fiscal year 2021 were $0.1 million higher than the same period of fiscal year 2020.

• Growing costs for the third quarter of fiscal year 2021 were $0.4 million lower than the same period of fiscal year 2020.

• Purchased fruit costs for the third quarter of fiscal year 2021 were $0.4 million lower than the same period of fiscal year 2020.

Total agribusiness depreciation and amortization expenses for the third quarter of fiscal year 2021 were $0.2 million lower than the same period of fiscal year 2020.

Corporate and Other

Our corporate and other operations had revenues of $1.1 million for the second quarter of both fiscal years 2021 and 2020.

Costs and expenses in our corporate and other operations for the second quarter of fiscal years 2021 and 2020 were approximately $6.0 million and $6.2 million, respectively, and include selling, general and administrative costs and expenses not allocated to the operating segments.

Depreciation and amortization expenses for the second quarter of fiscal years 2021 and 2020 were similar at approximately $0.3 million.

Six Months Ended April 30, 2021 Compared to the Six Months Ended April 30, 2020

The following table shows the segment results of operations for the six months ended April 30, 2021 (in thousands):

Our corporate and other operations had revenues of $1.2 million for the third quarter of both fiscal years 2021 and 2020.

Costs and expenses in our corporate and other operations for the third quarter of fiscal years 2021 and 2020 were $4.7 million and $4.6 million, respectively, and include selling, general and administrative costs and expenses not allocated to the operating segments.

Depreciation and amortization expenses for the third quarter of fiscal years 2021 and 2020 were similar at approximately $0.3 million.

Nine Months Ended July 31, 2021 Compared to the Nine Months Ended July 31, 2020

The following table shows the segment results of operations for the nine months ended July 31, 2021 (in thousands):

Packing Eliminations

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Operating income (loss) $ 8,213 $ 9,015 $ — $ 2,639 $ 1,733 $ 15,009 $ (14,891) $ 118

The following table shows the segment results of operations for the six months ended April 30, 2020 (in thousands):

The following table shows the segment results of operations for the nine months ended July 31, 2020 (in thousands):

Packing Eliminations

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Fresh lemons segment revenue is comprised of sales of fresh lemons, lemon by-products and other lemon revenue such as purchased, packed fruit for resale.

For the first six months of fiscal years 2021 and 2020, our fresh lemons segment total net revenues were $61.9 million and $60.8 million, respectively.

The 2% increase of $1.1 million was primarily due to increases in fresh

lemon carton sales of $1.4 million partially offset by decreases in lemon by-products of $0.1 million and decreases in brokerage and other sales of $0.1 million.

For the first nine months of fiscal years 2021 and 2020, our fresh lemons segment total net revenues were $98.2 million and $100.2 million, respectively.

The 2% decrease of $2.0 million was primarily due to decreases in fresh lemon carton and lemon by-products sales of $10.2 million, partially offset by an increase in brokered fruit and other lemon sales of $8.2 million.

Costs and expenses associated with our fresh lemons segment include harvest costs, growing costs and costs of lemons we procure from third-party growers.

For the first six months of fiscal years 2021 and 2020, our fresh lemons segment costs and expenses were $58.1 million and $61.3 million, respectively.

For the first nine months of fiscal years 2021 and 2020, our fresh lemons segment costs and expenses were $90.0 million and $101.0 million, respectively.

The 11% decrease of $11.0 million primarily consisted of the following:

• Harvest costs for the first six months of fiscal year 2021 were $0.1 million higher than the same period of fiscal year 2020.

• Growing costs for the first six months of fiscal year 2021 were $0.7 million lower than the same period of fiscal year 2020.

• Third-party grower costs for the first six months of fiscal year 2021 were $3.3 million lower than the same period of fiscal year 2020.

• Transportation costs for the first six months of fiscal year 2021 were $0.3 million higher than the same period of fiscal year 2020.

• Intersegment costs and expenses for the first six months of fiscal year 2021 were $0.4 million higher than the same period of fiscal year 2020.

• Harvest costs for the first nine months of fiscal year 2021 were $2.9 million lower than the same period of fiscal year 2020.

• Growing costs for the first nine months of fiscal year 2021 were $0.5 million higher than the same period of fiscal year 2020.

• Third-party grower costs for the first nine months of fiscal year 2021 were $0.3 million higher than the same period of fiscal year 2020.

• Transportation costs for the first nine months of fiscal year 2021 were $0.1 million lower than the same period of fiscal year 2020.

• Intersegment costs and expenses for the first nine months of fiscal year 2021 were $8.7 million lower than the same period of fiscal year 2020.

Lemon Packing

Lemon packing segment revenue is comprised of intersegment packing revenue and shipping and handling revenue.

For the first six months of fiscal years 2021 and 2020, our lemon packing segment total net revenues were $27.0 million and $23.5 million, respectively.

The 15% increase of $3.4 million was primarily due to higher average per carton pack revenue.

For the first nine months of fiscal years 2021 and 2020, our lemon packing segment total net revenues were $38.7 million and $43.6 million, respectively.

The 11% decrease of $4.9 million was primarily due to decreased volume of lemons packed and sold.

For the first six months of fiscal years 2021 and 2020, our lemon packing costs and expenses were $20.4 million and $18.9 million, respectively.

The 8% increase of $1.5 million was primarily due to increased volume of lemons packed at higher average per carton costs.

For the first six months of fiscal years 2021 and 2020, lemon packing segment operating income per carton sold was $2.30 and $1.67, respectively.

In the first six months of fiscal years 2021 and 2020, the lemon packing segment included $16.0 million and $15.6 million, respectively, of intersegment revenues that were charged to the fresh lemons segment to pack lemons for sale.

For the first nine months of fiscal years 2021 and 2020, our lemon packing costs and expenses were $29.7 million and $34.9 million, respectively.

The 15% decrease of $5.2 million was primarily due to decreased volume of lemons packed.

For the first nine months of fiscal years 2021 and 2020, lemon packing segment operating income per carton sold was $2.26 and $1.84, respectively.

In the first nine months of fiscal years 2021 and 2020, the lemon packing segment included $23.2 million and $31.9 million, respectively, of intersegment revenues that were charged to the fresh lemons segment to pack lemons for sale.

Such intersegment revenues and expenses are eliminated in our consolidated financial statements.

For the first six months of fiscal years 2021 and 2020, our avocados segment had total revenues of $2.7 million and $2.2 million, respectively.

For the first nine months of fiscal years 2021 and 2020, our avocados segment had total revenues of $6.8 million and $8.3 million, respectively.

Costs and expenses associated with our avocados segment include harvest and growing costs.

For the first six months of fiscal years 2021 and 2020, our avocados segment costs and expenses were $1.4 million and $2.0 million, respectively.

The 30% decrease of $0.6 million primarily consisted of growing costs.

For the first nine months of fiscal years 2021 and 2020, our avocados segment costs and expenses were $4.1 million and $4.6 million, respectively.

The 9% decrease of $0.4 million primarily consisted of harvest costs.

Other Agribusiness

For the first six months of fiscal years 2021 and 2020, our other agribusiness segment total net revenues were $5.5 million and $8.0 million, respectively.

For the first nine months of fiscal years 2021 and 2020, our other agribusiness segment total net revenues were $8.6 million and $11.0 million, respectively.

The 22% decrease of $2.4 million primarily consisted of the following:

• Orange revenues for the first six months of fiscal year 2021 were $2.4 million lower than the same period of fiscal year 2020.

• Specialty citrus and other crops revenues for the first six months of fiscal year 2021 were similar to the same period of fiscal year 2020.

• Orange revenues for the first nine months of fiscal year 2021 were $2.7 million lower than the same period of fiscal year 2020.

• Specialty citrus and other crops revenues for the first nine months of fiscal year 2021 were $0.3 million higher compared to the same period of fiscal year 2020.

Costs and expenses associated with our other agribusiness segment include harvest costs, growing costs and purchased fruit costs.

For the first six months of fiscal years 2021 and 2020, our other agribusiness costs and expenses were $4.9 million and $7.3 million, respectively.

For the first nine months of fiscal years 2021 and 2020, our other agribusiness costs and expenses were $6.8 million and $10.0 million, respectively.

The 32% decrease of $3.2 million primarily consisted of the following:

• Harvest costs for the first six months of fiscal year 2021 were $0.6 million lower than the same period of fiscal year 2020.

• Growing costs for the first six months of fiscal year 2021 were $0.5 million lower than the same period of fiscal year 2020.

• Purchased fruit costs for the first six months of fiscal year 2021 were $1.4 million lower than the same period of fiscal year 2020.

Total agribusiness depreciation and amortization expenses for the first six months of fiscal year 2021 were $0.1 million higher than the same period of fiscal year 2020.

• Harvest costs for the first nine months of fiscal year 2021 were $0.5 million lower than the same period of fiscal year 2020.

• Growing costs for the first nine months of fiscal year 2021 were $0.9 million lower than the same period of fiscal year 2020.

• Purchased fruit costs for the first nine months of fiscal year 2021 were $1.8 million lower than the same period of fiscal year 2020.

Total agribusiness depreciation and amortization expenses for the first nine months of fiscal year 2021 were $0.1 million lower than the same period of fiscal year 2020.

Corporate and Other

Our corporate and other operations had revenues of $2.3 million for the first six months of both fiscal years 2021 and 2020.

Costs and expenses in our corporate and other operations for the first six months of fiscal years 2021 and 2020 were approximately $12.7 million and $13.5 million, respectively, and include selling, general and administrative costs and expenses not allocated to the operating segments.

Depreciation and amortization expenses for the first six months of fiscal years 2021 and 2020 were similar at approximately $0.6 million.

Our corporate and other operations had revenues of $3.5 million for the first nine months of both fiscal years 2021 and 2020.

Costs and expenses in our corporate and other operations for the first nine months of fiscal years 2021 and 2020 were approximately $17.4 million and $18.1 million, respectively, and include selling, general and administrative costs and expenses not allocated to the operating segments.

Depreciation and amortization expenses for the first nine months of fiscal years 2021 and 2020 were $0.9 million and $0.8 million, respectively.

Seasonal Operations

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Due to this seasonality and to avoid the inference that interim results are indicative of the estimated results for a full fiscal year, we present supplemental information for 12-month periods ended at the interim date for the current and preceding years.

Results of Operations for the Trailing Twelve Months Ended April 30, 2021 and 2020

Results of Operations for the Trailing Twelve Months Ended July 31, 2021 and 2020

The following table shows the unaudited results of operations (in thousands):

Trailing Twelve Months Ended April 30,

Trailing Twelve Months Ended July 31,

Agribusiness $ 157,708 $ 166,604

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The following analysis should be read in conjunction with the previous section “Results of Operations.”

• Total revenues decreased $1.8 million in the twelve months ended April 30, 2021 compared to the twelve months ended April 30, 2020 primarily due to decreased agribusiness revenues, which primarily consisted of decreased lemon and orange sales, partially offset by increased avocados sales.

• Total costs and expenses decreased $3.7 million in the twelve months ended April 30, 2021 compared to the twelve months ended April 30, 2020 primarily due to decreases in our agribusiness costs and selling, general and administrative expenses partially offset by increase in the loss on sale and disposal of property assets.

The decrease in agribusiness costs is primarily attributable to decreased cost of third-party grower fruit and the decrease in selling, general and administrative expenses is primarily attributable to decreased corporate expenses associated with our strategic initiatives.

• Total other income (expense) increased $10.9 million in the twelve months ended April 30, 2021 compared to the twelve months ended April 30, 2020 primarily due to decreased interest expense, increased equity in earnings of investments and decreased loss on stock in Calavo.

• Income tax benefit decreased $5.0 million in the twelve months ended April 30, 2021 compared to the twelve months ended April 30, 2020 primarily due to the decrease in pre-tax loss of $12.7 million.

• Total revenues decreased $9.0 million in the twelve months ended July 31, 2021 compared to the twelve months ended July 31, 2020 primarily due to decreased agribusiness revenues, consisting of decreased lemon, avocado and orange sales.

• Total costs and expenses decreased $12.6 million in the twelve months ended July 31, 2021 compared to the twelve months ended July 31, 2020, primarily due to decreases in our agribusiness costs and selling, general and administrative expenses, partially offset by an increase in the loss on sale and disposal of property assets.

The decrease in agribusiness costs is primarily attributable to decreased packing costs, harvest costs and the cost of third-party grower fruit and the decrease in selling, general and administrative expenses is primarily attributable to decreased corporate expenses associated with our strategic initiatives.

• Total other income increased $8.4 million in the twelve months ended July 31, 2021 compared to the twelve months ended July 31, 2020 primarily due to increased equity in earnings of investments and decreased loss on stock in Calavo.

• Income tax benefit decreased $5.3 million in the twelve months ended July 31, 2021 compared to the twelve months ended July 31, 2020 primarily due to the decrease in pre-tax loss of $12.1 million.

Liquidity and Capital Resources

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Cash Flows from Operating Activities

For the six months ended April 30, 2021, net cash provided by operating activities was $4.6 million compared to net cash used in operating activities of $15.8 million for the six months ended April 30, 2020.

The significant components of our cash flows used in operating activities were as follows:

• Net loss for the six months ended April 30, 2021 was $2.4 million compared to net loss of $12.2 million for the six months ended April 30, 2020.

The components of net loss in the six months ended April 30, 2021 compared to the same period in fiscal year 2020 consist of a decrease in operating loss of $8.0 million, an increase in total other income of $8.2 million and a decrease in income tax benefit of $6.4 million.

• The adjustments to reconcile net loss to net cash provided by (used in) operating activities provided $6.0 million of cash in the six months ended April 30, 2021 compared to providing $6.8 million of cash in the same period in fiscal year 2020, primarily due to significant changes in deferred income taxes, loss on stock in Calavo and equity in earnings of investments.

• The changes in operating assets and liabilities provided $1.1 million of operating cash in the six months ended April 30, 2021 compared to using $10.4 million of operating cash in the same period in fiscal year 2020, primarily due to significant changes in accounts receivable and receivables/other from related parties, income taxes receivable and accounts payable and growers payable.

For the nine months ended July 31, 2021, net cash provided by operating activities was $16.8 million compared to net cash used in operating activities of $11.4 million for the nine months ended July 31, 2020.

The significant components of our cash flows provided by (used in) operating activities were as follows:

• Net income for the nine months ended July 31, 2021 was $0.8 million compared to net loss of $10.4 million for the nine months ended July 31, 2020.

The components of net income in the nine months ended July 31, 2021 compared to the net loss in the same period in fiscal year 2020 consist of a decrease in operating loss of $9.6 million, an increase in total other income of $8.6 million and a decrease in income tax benefit of $7.0 million.

• The adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities provided $8.7 million of cash in the nine months ended July 31, 2021 compared to providing $15.4 million of cash in the same period in fiscal year 2020, primarily due to significant changes in deferred income taxes, loss on stock in Calavo and equity in earnings of investments.

• The changes in operating assets and liabilities provided $7.3 million of operating cash in the nine months ended July 31, 2021 compared to using $16.4 million of operating cash in the same period of fiscal year 2020, primarily due to significant changes in accounts receivable and receivables/other from related parties, income taxes receivable and accounts payable and growers payable.

Cash Flows from Investing Activities

For the six months ended April 30, 2021 and 2020, net cash used in investing activities was $5.5 million compared to net cash provided by investing activities of $1.2 million, respectively.

Net cash used in investing activities for the six months ended April 30, 2021 was primarily comprised of capital expenditures.

• Capital expenditures were $5.4 million in the six months ended April 30, 2021, comprised of $5.2 million for property, plant and equipment primarily related to orchard and vineyard development and $0.2 million for real estate development projects.

• Capital expenditures were $5.4 million in the six months ended April 30, 2020, comprised of $5.3 million for property, plant and equipment primarily related to orchard and vineyard development and $0.1 million for real estate development projects.

Additionally, in the six months ended April 30, 2020, we received proceeds from sale of stock in Calavo of $11.0 million, contributed $2.8 million to the Joint Venture for the development of our East Area I real estate development project and loaned $1.8 million to the Joint Venture.

For the nine months ended July 31, 2021 and 2020, net cash used in investing activities was $8.7 million compared to net cash provided by investing activities of $0.3 million, respectively.

• Capital expenditures were $8.3 million in the nine months ended July 31, 2021, comprised of $8.0 million for property, plant and equipment primarily related to orchard and vineyard development and $0.3 million for real estate development projects.

• Capital expenditures were $8.2 million in the nine months ended July 31, 2020, comprised of $7.9 million for property, plant and equipment primarily related to orchard and vineyard development and $0.3 million for real estate development projects.

Additionally, in the nine months ended July 31, 2020, we received proceeds from sale of stock in Calavo of $11.0 million and contributed $2.8 million to the Joint Venture for the development of our East Area I real estate development project.

Cash Flows from Financing Activities

For the six months ended April 30, 2021 and 2020, net cash provided by financing activities was $1.9 million and $15.4 million, respectively.

• The $1.9 million of cash provided by financing activities during the six months ended April 30, 2021 was primarily comprised of net borrowings of long-term debt in the amount $5.5 million partially offset by common and preferred dividends, in aggregate, of $2.9 million.

• The $15.4 million of cash provided by financing activities during the six months ended April 30, 2020 was primarily comprised of net borrowings of long-term debt in the amount $18.5 million partially offset by common and preferred dividends, in aggregate, of $2.9 million.

For the nine months ended July 31, 2021 and 2020, net cash used in financing activities was $7.8 million compared to net cash provided by financing activities of $11.5 million, respectively.

• The $7.8 million of cash used in financing activities during the nine months ended July 31, 2021 was primarily comprised of net repayments of long-term debt in the amount of $2.8 million and common and preferred dividends, in aggregate, of $4.4 million.

• The $11.5 million of cash provided by financing activities during the nine months ended July 31, 2020 was primarily comprised of net borrowings of long-term debt in the amount of $16.7 million partially offset by common and preferred dividends, in aggregate, of $4.4 million and purchases of shares of our common stock of $0.6 million under our share repurchase program.

Transactions Affecting Liquidity and Capital Resources

Our Company and Farm Credit West, FLCA (“Farm Credit West”) are parties to that certain Master Loan Agreement (the “Loan Agreement”), dated June 20, 2017, which includes a Revolving Credit Supplement and a Non-Revolving Credit Supplement (together, the “Supplements”).

On June 30, 2020, we entered into a Conversion Agreement with Farm Credit West to convert term loans to fixed interest rates effective July 1, 2020.

In June 2021, we entered into the MLA with the Lender dated June 1, 2021, together with the Supplements and a Fixed Interest Rate Agreement.

The MLA governs the terms of the Supplements.

The MLA amends and restates the previous Master Loan Agreement between the Company and the Lender, dated June 19, 2017 and extends the principal repayment to July 1, 2026.

In June 2020, we entered into a Conversion Agreement with Farm Credit West to convert term loans to fixed interest rates effective July 1, 2020.

No changes were made to the outstanding principal balances on the term loans and no cash repayments of principal were made by us.

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The Supplements and RELOC provide aggregate borrowing capacity of $130.0 million comprised of $75.0 million under the Revolving Credit Supplement, $40.0 million under the Non-Revolving Credit Supplement and $15.0 million under the RELOC.

The borrowing capacity based on collateral value was $130.0 million at April 30, 2021.

The interest rate for any amount outstanding under the Supplements is based on the one-month London Interbank Offered Rate (“LIBOR”) rate plus an applicable margin, which is subject to adjustment on a monthly basis.

The applicable margin ranges from 1.60% to 2.35% depending on the ratio of current assets plus the remaining available commitment divided by current liabilities.

On July 1st of each year we have the option to convert the interest rate in use under each Supplement from the preceding LIBOR-based calculation to a variable interest rate, or the reverse, as applicable.

Any amounts outstanding under the Supplements are due and payable in full on July 1, 2022.

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 our agricultural properties in Tulare and Ventura counties in California and certain of our building fixtures and improvements and investments in mutual water companies associated with the pledged agricultural properties.

The Loan Agreement includes customary default provisions that provide that should an event of default occur, Farm Credit West, at its option, may declare all or any portion of the indebtedness under the Loan Agreement to be immediately due and payable without demand, notice of non-payment, protest or prior recourse to collateral, and terminate or suspend our right to draw or request funds on any loan or line of credit.

The Loan Agreement subjects us 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 our business.

Under the Loan Agreement, we are required to comply with a minimum debt service coverage ratio (as calculated in accordance with the Loan Agreement) of 1.25:1.0 measured as of October 31 each year.

In August 2020, Farm Credit West modified the covenant to defer measurement at October 31, 2020 and revert to a debt service coverage ratio of 1.25:1.0 measured as of October 31, 2021.

We expect to be in compliance with these covenants in fiscal year 2021.

The borrowing capacity based on collateral value was $130.0 million at July 31, 2021.

For amounts outstanding under both Supplements interest will begin to be charged on the date the Lender disburses principal and will continue until the outstanding indebtedness under the Supplements is paid in full with interest.

The initial interest rate in effect under the Revolving Credit Supplement was 1.69% per annum, and was automatically adjusted commencing July 1, 2021 and on the first day of each month thereafter.

The interest rate for any amount outstanding under the Revolving Credit Supplement will be based on the one-month LIBOR rate plus or minus an applicable margin.

The applicable margin will range from 1.75% to 2.35% depending on the ratio of current assets, plus the remaining available commitment divided by current liabilities.

On July 1, 2022, and on each one-year anniversary thereafter, we have the option to convert the interest rate in use under the Revolving Credit Supplement from the preceding LIBOR-based calculation to a variable interest rate.

Any amounts outstanding under the Revolving Credit Supplement is due and payable in full on July 1, 2026.

The Company may prepay any amounts outstanding under the Revolving Credit Supplement without penalty.

The initial interest rate in effect under the Non-Revolving Credit Supplement is a fixed interest rate of 4.77% per year and such rate shall continue for a period of one year and one month.

Pursuant to the Fixed Interest Rate Agreement, the Non-Revolving Credit Supplement will convert to a fixed interest rate of 3.57% per year until July 1, 2025 (the “Fixed Rate Term”).

Thereafter, the interest rate will convert to a variable interest rate established by the Lender corresponding to the corresponding interest rate group.

Any amounts outstanding under the Non-Revolving Credit Supplement is due and payable in full on July 1, 2026.

We may not prepay any amounts under the outstanding Non-Revolving Credit Supplement during the Fixed Rate Term.

Thereafter, we may prepay any amounts outstanding under the Non-Revolving Credit Supplement, provided that a fee equal to 0.50% of the amount prepaid and any other cost or loss suffered by the Lender must be paid with any prepayment.

All indebtedness under the MLA and RELOC, including any indebtedness under the Supplements, is secured by a first lien on Company-owned stock or participation certificates, Company funds maintained with Lender, Lender’s unallocated surplus, and certain of the Company’s agricultural properties in Tulare and Ventura 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.

The MLA includes customary default provisions that provide that should an event of default occur, the Lender, at its option, may declare all or any portion of the indebtedness under the MLA to be immediately due and payable without demand, notice of non-payment, protest or prior recourse to collateral, and terminate or suspend the Company’s right to draw or request funds on any loan or line of credit.

The MLA subjects us 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 our business.

We are also subject to a covenant that we will maintain a debt service coverage ratio greater than or equal to 1.15:1.00 measured at October 31, 2021, and greater than or equal to 1.25:1 when measured at October 31, 2022, and annually thereafter.

In August 2021, the Lender modified the covenant to a minimum debt service coverage ratio greater than or equal to 1.0:1.0 measured at October 31, 2021.

In August 2021, we entered into a FCW term loan with Lender in the amount of $2.5 million and used the proceeds to payoff the Wells Fargo term loan.

The FCW term loan has a fixed interest rate of 3.19% and is payable in monthly installments through September 2026.

In February 2021, we received an annual patronage dividend of $1.2 million from Farm Credit West, of which $0.8 million was recorded as a reduction in interest expense and $0.4 million reduced our real estate development assets.

We finance our working capital and other liquidity requirements primarily through cash from operations and our Farm Credit West Credit Facility, which includes the Loan Agreement, Supplements and RELOC.

We finance our working capital and other liquidity requirements primarily through cash from operations and our Farm Credit West Credit Facility, which includes the MLA, Supplements and RELOC.

In addition, we have the Farm Credit West term loans, Wells Fargo term loan, Banco de Chile term loan and COVID-19 loans, and a note payable to the sellers of a land parcel.

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

The Joint Venture had an outstanding balance of $11.4 million as of April 30, 2021 related to this Loan.

The Joint Venture had an outstanding balance of zero as of July 31, 2021 related to this Loan.

The obligations under the Loan are guaranteed by certain principals from Lewis and by us.

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We recognize the majority of our revenue at a point in time when we satisfy a performance obligation and transfer control of the product to the respective customer.

The amount of revenue that is recognized is based on the transaction price, which represents the

invoiced amount and includes estimates of variable consideration such as allowances for estimated customer discounts or concessions, where applicable.

The amount of revenue that is recognized is based on the transaction price, which represents the invoiced amount and includes estimates of variable consideration such as allowances for estimated customer discounts or concessions, where applicable.

The amount of variable consideration included in the transaction price may be constrained and is included only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized under the contract will not occur in a future period.

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The acquisition method requires identifiable assets acquired and liabilities assumed and any noncontrolling interest in the business acquired be recognized and measured at fair value on the acquisition date, which is the date that the acquirer obtains control of the acquired business.

The amount by which the fair value of consideration

transferred as the purchase price exceeds the net fair value of assets acquired and liabilities assumed is recorded as goodwill.

The amount by which the fair value of consideration transferred as the purchase price exceeds the net fair value of assets acquired and liabilities assumed is recorded as goodwill.

Acquisitions that do not meet the definition of a business under the ASC are accounted for as asset acquisitions.

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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 2. Management’s Discussion and Analysis