What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2022-01-10 compared with 2021-01-14 · 96 added, 161 removed, 252 unchanged (50% of the section changed)

2 unchanged sentences

For detailed financial information with respect to our business and our operations, see our consolidated financial statements and the related notes to consolidated financial statements, which are included in Item 8 in this Annual Report.

In addition, general information concerning our Company can be found on our website, the internet address of which is www.limoneira.com.

In addition, general information concerning our Company can be found on our website at www.limoneira.com.

All of our filings with the SEC, including but not limited to, annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments thereto, are available free of charge on our website as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC.

The contents of our website referred to above are not incorporated into this report.

Further, any references to our website are intended to be interactive textual references only.

We are primarily an agribusiness company founded and based in Santa Paula, California, committed to responsibly using and managing our approximately 15,400 acres of land, water resources and other assets to maximize long-term stockholder value.

10 unchanged sentences

("San Pablo"), a lemon and orange orchard, all of which are located near La Serena, Chile.

We have a 51% interest in a joint venture, Trapani Fresh Consorcio de Cooperacion ("Trapani Fresh"), a lemon growing, packing, marketing and selling business in Argentina.

We have a 51% interest in a joint venture, Trapani Fresh Consorcio de Cooperacion ("Trapani Fresh"), a lemon orchard in Argentina.

Our water resources include water rights, usage rights and pumping rights to the water in aquifers under, and canals that run through, the land we own.

5 unchanged sentences

We currently have an interest in three real estate development projects in California.

These projects include multi-family housing and single-family homes comprising 256 completed rental units and another approximately 1,150 units in various stages of planning and development.

These projects include multi-family housing and single-family homes of approximately 900 units in various stages of planning and development.

Fiscal Year 2021 Highlights and Recent Developments

We are equal partners in a joint venture with The Lewis Group of Companies (“Lewis”) for the residential development of our East Area I real estate development project.

To consummate the transaction, we formed Limoneira Lewis Community Builders, LLC (the "LLCB" or "Joint Venture").

To consummate the transaction, we formed Limoneira Lewis Community Builders, LLC ("LLCB") as the development entity.

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

The Joint Venture has closed on lot sales representing 354 units from inception through October 31, 2020.

In the first quarter of fiscal year 2020, we entered into an agreement to sell our Sevilla property for $2.7 million.

After transaction and other costs, we expect to receive proceeds of approximately $2.6 million and recognize an insignificant gain.

At October 31, 2020, the $2.5 million carrying value of the property was classified as held for sale and included in prepaid expenses and other current assets.

In March 2020, we entered into a revolving equity line of credit promissory note and loan agreement with Farm Credit West for a $15.0 million Revolving Equity Line of Credit (the "RELOC") secured by a first lien on the Windfall Investors, LLC property.

The RELOC matures in 2043 and features a 3-year draw period followed by 20 years of fully amortized loan payments.

The interest rate

is variable with monthly interest-only payments during the 3-year draw period and monthly principal and interest payments thereafter.

In March 2020, we sold our remaining 200,000 shares of Calavo Growers, Inc.

("Calavo") common stock at an average price of $55.29 per share.

Net proceeds from the sale were $11.0 million and we recognized a loss of $6.3 million.

In March 2020, the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") was signed into law.

The CARES Act provides numerous tax provisions and other stimulus measures, including temporary changes regarding the prior and future utilization of net operating losses, temporary changes to the prior and future limitations on interest deductions, temporary suspension of certain payment requirements for the employer portion of Social Security taxes, the creation of certain refundable employee retention credits, and technical corrections from prior tax legislation for tax depreciation of certain qualified improvement property.

We evaluated the impact of the CARES Act on our consolidated financial statements and recorded approximately $1.9 million of income tax benefit and applied for $5.8 million of federal refunds and an additional $0.9 million of California refunds in fiscal years 2020 and 2021, of which $0.8 million and $5.0 million were received in October 2020 and December 2020, respectively.

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.

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 us to repurchase shares of our common stock.

During fiscal year 2020, we repurchased 250,977 shares under the share repurchase program for approximately $3.5 million.

As of October 31, 2020, the remaining authorization under this program is approximately $6.5 million.

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

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

The rates are subject to a prepayment restriction period for a portion of the fixed rate term that will expire on January 1, 2021, after which we may prepay any amounts without penalty.

In August 2020, we sold a property, located in Lindsay, California.

We received net proceeds of $6.0 million and after transaction and other costs, we recorded a loss of approximately $0.4 million as of October 31, 2020.

LLCB has closed on lot sales representing 586 units from inception through October 31, 2021, including 232 units in fiscal year 2021.

For further information see Note 7 – Real Estate Development of the notes to consolidated financial statements included in this Annual Report.

In December 2020, we received $5.0 million of federal income tax refunds related to the Coronavirus Aid Relief and Economic Security Act ("CARES 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 Trapani ("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.

In August 2021, we entered into several additional agreements whereby the additional 25% interest in Finca Santa Clara ("Santa Clara") was transferred into the trust resulting in the trust now holding a 100% interest in Santa Clara.

Trapani Fresh owns and operates 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 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 our Company and the Lender, dated June 19, 2017 and extends the principal repayment to July 1, 2026.

In July 2021, we entered into a non-binding letter of intent to sell approximately 25 acres of our East Area II property in five staged purchases to an investment company for the purpose of constructing a medical campus consisting of medical office buildings and an acute care hospital.

Completion of the transaction is subject to the execution of a purchase and sale agreement and resolution of certain contingencies.

In August 2021, we entered into an equipment finance agreement (the "FCW term loan") with the Lender in the amount of $2.5 million and used the proceeds to pay off 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 September 2021, 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 September 2022.

No shares have been repurchased under this program.

On December 14, 2021, we declared a cash dividend of $0.075 per common share payable on January 14, 2022, in the aggregate amount of $1.3 million to stockholders of record as of December 27, 2021.

COVID-19 Pandemic

The global spread of the novel coronavirus (COVID-19) in recent months has negatively impacted the global economy, disrupted global supply chains and created significant volatility and disruption of financial markets.

The impact of this pandemic has created significant uncertainty in the global economy and has affected our business, employees, suppliers, and customers.

The COVID-19 pandemic has had an adverse impact on the industries and markets in which we conduct business.

In particular, the United States lemon market has seen a significant decline in volume.

Lemon demand began falling in mid-March when wide spread shelter in place orders were issued, resulting in a significant market oversupply.

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

The decline in demand for our products beginning the second quarter of 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 2020.

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

These impacts are expected to be material.

However, the duration of these trends and the magnitude of such impacts cannot be precisely estimated at this time, as they are affected by a number of factors, many of which are outside management’s control, including, but not limited, to those presented in - Item 1A.

Risk Factors of this Annual Report.

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

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, 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.

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.

Given the economic uncertainty as a result of the COVID-19 pandemic, we have taken actions to improve our current liquidity position, including temporarily postponing capital expenditures, selling equity securities to increase cash, reducing operating costs, and substantially reducing discretionary spending.

We are one of the largest growers of lemons and avocados in the United States and maintain our country's food chain infrastructure and thus are considered an essential business and permitted to remain open during the ongoing pandemic, be it at reduced volumes, in order to fulfill our customers' needs.

However, there is significant uncertainty around the breadth and duration of our business disruptions related to the COVID-19 pandemic, as well as its impact on the U.S.

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 fiscal year 2021 and beyond cannot be fully estimated at this point.

In particular, the United States lemon market has seen a significant decline in volume, with lemon demand falling since widespread shelter in place orders were issued in mid-March 2020, resulting in a significant market oversupply.

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

As of October 31, 2021, the demand within both markets is recovering but has not yet returned to pre-pandemic levels.

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

We also expect material adverse impacts on our sales and profitability in future periods.

The duration of these trends and the magnitude of such impacts cannot be estimated at this time, as they are influenced by a number of factors, many of which are outside management’s control, including, but not limited, to those presented in Item 1A Risk Factors of this Annual Report.

Notwithstanding the adverse impacts and subject to unforeseen changes that may arise as the COVID-19 pandemic continues, we currently expect improvement in fiscal year 2022 compared to fiscal year 2021.

Given the economic uncertainty as a result of the COVID-19 pandemic over the past two years, we have taken actions to improve our current liquidity position, including temporarily postponing capital expenditures, selling equity securities to increase cash, reducing operating costs, and substantially reducing discretionary spending.

Although we are considered an essential business, there is significant uncertainty around the breadth and duration of our business disruptions related to the COVID-19 pandemic, as well as its impact on the U.S.

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

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 customers 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 fiscal year 2022 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.

2 unchanged sentences

agribusiness, rental operations and real estate development.

The agribusiness division is comprised of three reportable operating segments:

fresh lemons, lemon packing and other agribusiness, which includes avocados, oranges, specialty citrus and other crops.

The agribusiness division is comprised of four reportable operating segments:

fresh lemons, lemon packing, avocados and other agribusiness, which includes oranges, specialty citrus and other crops.

The agribusiness division includes our core operations of farming, harvesting, lemon packing and lemon sales operations.

The rental operations include our residential and commercial rentals, leased land operations and organic recycling.

The rental operations division includes our residential and commercial rentals, leased land operations and organic recycling.

The real estate development division includes our investments in real estate development projects.

Financial information and discussion of our four reportable segments are contained in the notes to the accompanying consolidated financial statements of this Annual Report.

Agribusiness Summary

We market and sell lemons directly to our food service, wholesale and retail customers throughout the United States, Canada, Asia, Australia and certain other international markets.

We market and sell lemons directly to our food service, wholesale and retail customers throughout the United States, Canada, Asia, Australia, Europe and certain other international markets.

We are one of the largest lemon growers in the United States with approximately 6,100 acres of lemons planted primarily in Ventura, Tulare and San Bernardino Counties in California and in Yuma County, Arizona.

3 unchanged sentences

We also grow approximately 8% of our lemons near La Serena, Chile and 17% of our lemons in Argentina.

There are over fifty varieties of lemons, with the Lisbon, Eureka and Genoa being the predominant varieties marketed on a worldwide basis.

There are many varieties of lemons, with the Lisbon, Eureka and Genoa being the predominant varieties marketed on a worldwide basis.

Approximately 88% of our lemon plantings are of the Lisbon, Eureka and Genoa varieties and approximately 12% are of other varieties such as sweet Meyer lemons, Proprietary Seedless lemons and Pink Variegated lemons.

3 unchanged sentences

In California, the avocado growing area stretches from San Diego County to Monterey County, with the majority of the growing areas located approximately 100 miles north and south of Los Angeles County.

California-grown avocados are available year-round, with peak production periods occurring between February and September.

California-grown avocados have peak production periods occurring between February and July.

Other avocado varieties have a more limited picking season and typically command a lower price.

5 unchanged sentences

Calavo receives fruit from our orchards at its packinghouse located in Santa Paula, California.

proximity to our agricultural operations enables us to keep transportation and handling costs to a minimum.

Calavo’s proximity to our agricultural operations enables us to keep transportation and handling costs to a minimum.

Our avocados are packed by Calavo and sold and distributed under its own brands to its customers primarily in the United States and Canada.

Primarily due to differing soil conditions, the care of avocado trees is intensive and during our 80-year history of growing avocados, growing techniques have changed dramatically.

Primarily due to differing soil conditions, the care of avocado trees is intensive.

The need for more production per acre to compete with foreign sources of supply has required us to take an important lead in the practice of dense planting (typically four times the number of avocado trees per acre versus traditional avocado plantings) and mulching composition to help trees acclimate under conditions that more closely resemble those found in the tropics, a better climate for avocado growth.

8 unchanged sentences

A portion of our oranges and specialty citrus is marketed and sold under the Sunkist brand by Sunkist and orders are processed by Sunkist-member packinghouses.

As an agricultural cooperative, Sunkist coordinates the sales and marketing of the oranges and specialty citrus and orders are processed by Sunkist-member packinghouses for direct shipment to customers.

agricultural cooperative, Sunkist coordinates the sales and marketing of the oranges and specialty citrus and orders are processed by Sunkist-member packinghouses for direct shipment to customers.

We currently market our other crops, such as pistachios and wine grapes, utilizing processors that are not members of agricultural cooperatives.

49 unchanged sentences

In fiscal year 2016, our updated lemon packing facility became operational, which doubled our lemon packing capacity and increased the efficiency and financial results of these operations.

Additionally, we purchased a packing house and related land ("Oxnard Lemon") in fiscal year 2018.

Rental Operations Summary

16 unchanged sentences

This property is also known as our Teague McKevett Ranch.

We believe East Area I is an ideal location for a master planned community of commercial and residential properties designed to satisfy expected demand in a region that we believe will have few other developments in this coming decade.

In 2008, after we completed a process of community planning and environmental review, the citizens of Santa Paula voted to approve the annexation of East Area I into Santa Paula.

East Area I is the location for our master planned community of commercial and residential properties designed to satisfy expected demand in a region that we believe will have few other developments in this coming decade.

In 2008, after we completed a process of community planning and environmental review, the citizens of Santa Paula voted to approve the annexation

of East Area I into Santa Paula.

This vote was a requirement of the Save Open-Space and Agricultural Resources (“SOAR”) ordinance that mandates a public vote of the City of Santa Paula for land use conversion.

In November 2015, we entered into the Joint Venture with Lewis for the residential development of our East Area I real estate development project.

In November 2015, we entered into a joint venture with Lewis for the residential development of our East Area I real estate development project.

To consummate the transaction, we formed LLCB as the development entity, contributed our East Area I property to the joint venture and sold a 50% interest in the joint venture to Lewis for $20.0 million.

We expect to receive approximately $100.0 million from the Joint Venture over the estimated 10 to 12-year life of the project, including $20.0 million received on the consummation of the Joint Venture.

The Joint Venture partners will share in capital contributions to fund project costs until loan proceeds and/or revenues are sufficient to fund the project.

Since inception, each Joint Venture partner has made funding contributions of $21.4 million, including $2.8 million, $4.0 million and $3.5 million in fiscal years 2020, 2019 and 2018, respectively.

We expect to receive approximately $100.0 million from LLCB over the estimated 10 to 12-year life of the project, including $20.0 million received on the consummation of LLCB.

LLCB's partners will share in capital contributions to fund project costs until loan proceeds and/or revenues are sufficient to fund the project.

Since inception, each partner has made funding contributions of $21.4 million, including $2.8 million in fiscal year 2020.

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

Project plans include approximately 1,500 residential units with 632 residential units in Phase 1 and site improvements substantially completed.

representing 144 and 210 residential units closed in fiscal years 2020 and 2019, respectively and 354 residential units have closed from the project's inception to October 31, 2020.

The Joint Venture closed an additional 44 units in the first quarter of fiscal year 2021.

Project plans include approximately 1,500 residential units and site improvements substantially completed.

Lot sales representing 232 and 144 residential units closed in fiscal years 2021 and 2020, respectively, and 586 residential units have closed from the project's inception to October 31, 2021.

East Area II - Santa Paula, California.

1 unchanged sentence

East Area II is also a part of our Teague McKevett Ranch, which we believe is suited to commercial and/or industrial development along the south side of California Highway 126, a heavily traveled corridor that connects Highway 101 at Ventura on the west with Interstate 5 at Santa Clarita on the east.

When completed, we expect that the development will contribute to the economic vitality of the region and allow residents to work and shop within close proximity to their homes.

The successful development of East Area II will be partly dependent on the success of East Area I.

We expect that East Area II could accommodate large retailers, a medium or large employer, a complex of mixed business and retail, or some combination of the foregoing.

We are actively cultivating prospects to become future tenants in East Area II and expect that development will closely follow the build-out of East Area I.

Completion of the transaction is subject to the execution of a purchase and sale agreement and resolution of certain contingencies.

Santa Maria - Santa Barbara County, California.

As of October 31, 2021, we were invested in one entitled development parcel, Sevilla, located in Santa Maria in Santa Barbara County, California.

In the first quarter of fiscal year 2020, the Company entered into an agreement to sell its Sevilla property for $2.7 million, which is expected to close in fiscal year 2021.

In fiscal year 2020, we entered into an agreement to sell our Sevilla property for $2.7 million, which is expected to close in the second quarter of fiscal year 2022.

Markets and Competitive Strengths

5 unchanged sentences

Our agricultural properties in Tulare County, which is in the San Joaquin Valley in Central California, and in Yuma, Arizona, are also located in areas that are well-suited for growing citrus crops.

• Historically, a higher percentage of our crops go to the fresh market, which is commonly referred to as fresh utilization, than that of other growers and packers with which we compete.

• Historically, a higher percentage of our crops goes to the fresh market, which is commonly referred to as fresh utilization, than that of other growers and packers with which we compete.

• We have contiguous and nearby land resources that permit us to efficiently use our agricultural land and resources.

6 unchanged sentences

The electricity generated by these investments provides us with a significant portion of the electricity required to operate our packinghouse and cold storage facilities located in Santa Paula, California and provides a significant portion of the electricity required to operate four deep-water well pumps at one of our ranches in Tulare County, California.

Additionally, these investments support our sustainable agricultural practices, reduce our dependence on fossil-based electricity generation and lower our carbon footprint.

Additionally, these investments support our sustainable agricultural practices, reduce our dependence

on fossil-based electricity generation and lower our carbon footprint.

Moreover, electricity that we generate and do not use is conveyed seamlessly back to the investor-owned utilities operating in these two markets.

2 unchanged sentences

We own shares in the following mutual water companies:

Farmers Irrigation Co., Canyon Irrigation Co., San Cayetano Mutual Water Co., Middle Road

Mutual Water Co.

Farmers Irrigation Co., Canyon Irrigation Co., San Cayetano Mutual Water Co., Middle Road Mutual Water Co.

and Pioneer Water Company, Inc.

2 unchanged sentences

With respect to our real estate development operations, we believe our competitive advantages are as follows:

• We have entitlements to build approximately 1,500 residential units in our East Area I (Harvest at Limoneira) development.

• We have entitlements to build approximately 1,500 residential units in our East Area I development.

• We have partnered with an experienced and financially strong land developer for our East Area I residential master plan development.

9 unchanged sentences

In order to be considered, such properties would need to have certain characteristics to provide acceptable returns, such as an adequate source of water, a warm micro-climate and well-drained soils.

We anticipate that the most attractive opportunities to acquire lemon producing properties will be in South America and in the San Joaquin Valley near our existing operations in Tulare County, California.

We anticipate that the most attractive opportunities to acquire lemon producing properties will be in the San Joaquin Valley near our existing operations in Tulare County, California.

• Expand our Sources of Lemon Supply.

Peak lemon production occurs at different times of the year depending on geographic region.

In addition to our lemon production in California and Arizona and lemons we acquire from third-party growers, we have expanded our lemon supply sources to international markets such as Mexico, Chile and Argentina.

Increases in lemons procured from third-party growers and international sources improve our ability to provide our customers with fresh lemons throughout the year.

In addition to our lemon production in California and Arizona and lemons we acquire from domestic third-party growers and suppliers, we have expanded our lemon supply sources to international markets such as Mexico, Chile and Argentina.

Increases in lemons procured from third-party growers and suppliers and international sources improve our ability to provide our customers with fresh lemons throughout the year.

• Increase the Volume of our Lemon Packing Operations .

1 unchanged sentence

In this regard, cost per carton is a function of throughput.

We continually seek to acquire additional lemons from third-party growers to pack through our plants.

Third-party growers are only added if we determine their fruit is of good quality and can be cost effective for both the grower and us.

We continually seek to acquire additional lemons from third-party growers and suppliers to pack through our plants.

Third-party growers and suppliers are only added if we determine their fruit is of good quality and can be cost effective for both the grower and us.

Of most importance is the overall fresh utilization rate for our fruit, which is directly related to quality.

7 unchanged sentences

A project to double the capacity and increase the efficiency of our lemon packing facilities became operational in fiscal year 2016.

We expect that

this project will has increased fresh lemon processing capacity and lower packing costs by reducing labor and handling inputs.

This project has increased fresh lemon processing capacity.

• Opportunistically Expand our Plantings of Avocados, Oranges, Specialty Citrus and Other Crops .

2 unchanged sentences

While we may expand our avocados, oranges, specialty citrus and other crops, we expect to do so on an opportunistic basis in locations that we believe offer a record of historical profitability.

• Maintain our Relationship with Calavo .

Our alignment with Calavo comprises our current marketing strategy for avocados.

Calavo has expanded its sourcing into other regions of the world, including Mexico, Chile and Peru, which allows it to supply avocados to its retail and food service customers on a year-round basis.

California avocados occupy a unique market window in the year-round supply chain and Calavo has experienced a general expansion of volume as consumption has grown.

Thus, we intend to continue to have a strong and viable market for our California avocados.

Other Operations

17 unchanged sentences

Information about Geographic Areas

During fiscal years 2020, 2019 and 2018, we had an aggregate of approximately $3.5 million, $3.2 million and $2.8 million of total sales in Chile by PDA and San Pablo, respectively.

During fiscal years 2020 and 2019, we had an aggregate of approximately $14.2 million and $14.7 million of total sales in Argentina by Trapani Fresh.

During fiscal years 2021, 2020 and 2019, we had an aggregate of approximately $3.0 million, $3.5 million and $3.2 million, respectively, of total sales in Chile by PDA and San Pablo.

During fiscal years 2021, 2020 and 2019, we had an aggregate of approximately $3.6 million, $14.2 million and $14.7 million, respectively, of total sales in Argentina by Trapani Fresh.

The majority of our avocados, oranges and specialty citrus and other crops are sold to packinghouses and processors located in the United States.

3 unchanged sentences

Customers are typically large retail chains, food service companies, industrial manufacturers and distributors who sell and deliver to smaller customers in local markets throughout the world.

In the purest sense, our largest competitors in our agribusiness segments are other citrus and avocado producers in California, Mexico, Chile, Argentina and Florida, a number of which are members of cooperatives such as Sunkist or have selling relationships with Calavo similar to

that of Limoneira.

Our lemons and oranges also compete with other fruits and vegetables for the share of consumer expenditures devoted to fresh fruit and vegetables:

apples, pears, melons, pineapples and other tropical fruit.

Avocado products compete in the supermarket with hummus products and other dips and salsas.

Avocado products compete in the

supermarket with hummus products and other dips and salsas.

For our specific crops, the size of the U.S.

9 unchanged sentences

We have numerous trademarks and brands under which we market and sell our fruits, particularly lemons, domestically and internationally, many of which have been owned for decades.

The material brands of Limoneira lemons include, but are not limited to, Santa®, Paula®, Bridal Veil®, Fountain®, Golden Bowl® and Level®.

The material brands of Limoneira lemons include, but are not limited to, One World of Citrus®, Santa®, Paula®, Bridal Veil®, Fountain®, Golden Bowl® and Level®.

These trademarks are owned by us and registered with the United States Patent and Trademark Office.

We also acquired certain lemon brands with acquisitions, including Kiva® and Kachina®, Oxnard Lemon, Uno, Sunny, Trapani, Argentinian Beauty, Natural and Trapani Fresh.

We also acquired certain lemon brands with acquisitions, including Kiva®, Kachina®, Oxnard Lemon, Uno, Sunny, Trapani, Argentinian Beauty, Natural and Trapani Fresh.

Seasonal Nature of Business

1 unchanged sentence

The harvest and sale of our lemons, avocados, oranges and specialty citrus and other crops occurs in all quarters, but is generally more concentrated during our third quarter.

Our lemons are generally grown and marketed throughout the year, our avocados are primarily sold from January through August, our oranges are primarily sold from January through June, our specialty citrus is sold from November through April and our specialty crops, such as pistachios and wine grapes, are sold in September and October.

Our lemons are generally grown and marketed throughout the year, our avocados are primarily sold from January through August, our oranges are primarily sold from January through June, our specialty citrus is primarily sold from November through April and our specialty crops, such as pistachios and wine grapes, are primarily sold in September and October.

Environmental and Regulatory Matters

9 unchanged sentences

These remedies can increase costs, decrease revenues and lead to additional charges to earnings, which may have a material adverse effect on our business, results of operations and financial condition.

Environmental, Social and Governance (“ESG”)

Limoneira is an agricultural and community development company which, based upon its rich heritage and traditions, seeks not only to maximize value for its customers and shareholders, but also to enhance its legacy by employing sustainable practices in all aspects of operations including stewardship of both its natural and human resources.

The Company recognizes the increased emphasis by shareholders, business partners and other key constituents in recent years on ESG programs that are embedded into

day-to-day business policies and practices.

The Company is proud of its commitment to doing the right thing for communities, the environment and its employees.

Corporate responsibility is an important priority for the Company and its Board of Directors.

We have a long history of strong commitment to being an ethical and responsible company acting with integrity and respect for each other, our communities and the environment.

The Board of Directors tasked the Nominating and Corporate Governance Committee with the responsibility for overseeing our environmental, social responsibility and sustainability programs and practices, including the consideration of potential long- and short-term trends and impacts that environmental and social responsibility and sustainability issues may have related to our business.

Environmental

Sustainability has been a mindset at Limoneira that was instilled by the Company’s founders over 127 years ago and is the basis of our corporate culture at Limoneira.

Not only does Limoneira’s sustainable agriculture address many environmental and social concerns, it offers innovative and economically viable opportunities for Limoneira and other producers, employees, consumers, and policy makers in the entire global food system.

From 2010 to 2019, we achieved and maintained GLOBALG.A.P.

certification by successfully demonstrating our adherence to specific Good Agricultural Practices ("GAP") and other farming standards.

Beginning in fiscal 2020, Limoneira has received the highest rating (Superior) from Primus Labs, the first certification body of the Global Food Safety Initiative (GFSI).

PrimusGFS is focused on the food safety of the agricultural sector products and establishes a series of GAP and other requirements for managing the production, handling, processing and storing operations.

We believe that our certification differentiates us from our competitors and serves as reassurance to consumers and retailers that food reaches acceptable levels of safety and quality, and has been produced sustainably, respecting the health, safety and welfare of workers and the environment, and in consideration of animal welfare issues.

Limoneira adheres to all food safety regulations and follows Good Manufacturing Practices (GMPs) as established in the Code of Federal Regulations (21 CFR 1 10), which have led to the Company’s food safety rating being one of the highest in the industry.

Limoneira has seven solar installations across the Company that produce a total of approximately seven million kilowatts annually and enable us to be approximately 50% off the grid.

We also have a 750kWh Tesla scalable energy storage system that reduces energy costs, improves reliability for demand charges and shifts energy use from peak to off peak times.

Water Management

Water is one of our world’s most valuable resources, and the supply of this natural resource faces continual pressure from growing populations, economic activities, and the increasing need for agricultural food production.

Limoneira takes important steps to protect this resource.

Our water quality and supply is maintained through ground water monitoring, rigorous lab testing, filtration systems, and a network of micro sprinklers.

Limoneira constructed a natural wastewater treatment system using patented technology that is a low carbon footprint project with a series of gravity-fed ponds that circulate and clean 30 million gallons of water annually utilizing natural vegetation, local plants and fine gravels.

Ultraviolet Rays (UV) remove any bacteria in the water to achieve California Title 22 drinking water standards.

Organic Recycling

With the help of one of our tenants, Agromin, Inc., a processor of premium soil products and a green waste recycler, we developed and implemented an innovative organic recycling facility on our land in Ventura County.

This 10 acre facility receives green materials (lawn clipping, leaves, bark and other plant materials) that would typically go to landfills and converts such material into mulch that we spread throughout our agricultural properties to help curb erosion, improve water efficiency, reduce weeds and moderate soil temperatures.

Biological Pest Management

Limoneira was one of the founders of the Integrated Pest Management program in Ventura County.

We have been working with Associates Insectary since 1928 to minimize the use of pesticides by releasing beneficial insects into orchards to control destructive agricultural pests.

Social and Human Capital Resources

Limoneira is committed to protecting the human rights, safety and dignity of the people who contribute to the success of our business.

We also seek to support the welfare of the people who produce, process and harvest the products we sell.

For a discussion of the various risks we face from regulation and compliance matters, see Item 1A Risk Factors of this Annual Report.

Human Capital Resources

At October 31, 2021, we had 268 employees, of which 98 were salaried and 170 were hourly.

None of our employees is subject to a collective bargaining agreement.

None of our employees are subject to a collective bargaining agreement.

We believe that our relations with our employees are good.

Health and Safety

We believe that an environment of diversity, inclusion, and belonging fosters innovation, strengthens our global workforce, and drives our ability to serve customers.

Our global presence is strengthened by having a workforce that reflects the diversity of the customers we serve and by maintaining an environment in which such diversity contributes to our mission.

Limoneira is committed to protecting the human rights, safety and dignity of the people who contribute to the success of our business.

We are committed to improving the lives of all our stakeholders by helping to provide access to our products and increasing the diversity of our workforce.

We also seek to support the welfare of the people who produce, process and harvest the products we sell.

We have established several new diversity, inclusion and belonging efforts and programs to better ensure that we are supporting our employees.

Limoneira’s overall culture emphasizes the health and safety of our employees and the customers we serve.

Our recent Take a Healthy Stand™ campaign showcases the many ways that lemons can play a role in helping to alleviate serious health issues and our free Nature’s Pharmacy™ app links items found in the produce section of local grocery stores to related health benefits.

Our website offers tips, tricks, recipes and other ways to incorporate citrus into everyday life.

Limoneira has an Illness and Injury Prevention Plan (IIPP) and a Safety Guide and conforms to and follows all regulations and guidelines set forth by OSHA in all facilities and operations.

Where the State’s guidelines, such as Cal OHSA, are different from the OSHA standard, Limoneira adheres to the most extensive guideline.

Limoneira has an Illness and Injury Prevention Plan (IIPP), a Safety Guide and conforms to and follows regulations and guidelines set forth by OSHA in all facilities and operations.

Where a particular jurisdiction's guidelines, such as Cal OHSA, are different from the OSHA standard, Limoneira adheres to the most extensive guideline.

We have excellent results from our safety programs compared to similar companies within our industry.

In response to the COVID-19 pandemic, we have implemented, and continue to improve, appropriate safety measures in all of our facilities and locations.

The Company offers comprehensive health insurance coverage to all employees and has a supplemental wellness program.

Employee Engagement

Limoneira has always operated on the principle that all businesses are only as successful as their employees – and content employees are motivated employees.

We have a well-trained and retentive labor force with many employees remaining with us for more than 30 years.

We offer competitive pay and best-in-class benefits, including a 401k plan with both profit sharing and safe-harbor matching contributions.

With approximately 87% of our workforce Hispanic or Latino, to avoid language barriers, we provide bilingual company communications and educational programs such as English as a Second Language.

Our new initiative "Every Box Counts" emphasizes our employees’ pride in delivering quality produce from farm to table.

Workforce Housing

We own and maintain 256 residential housing units located in Ventura and Tulare Counties in California that we lease to employees, former employees and non-employees.

In response to the COVID-19 pandemic, we implemented, and continue to improve, appropriate safety measures in all our facilities and locations.

We strive to be a great place for our employees to work and live.

We offer competitive pay and best-in-class benefits, including a 401k plan with matching contribution opportunities, comprehensive paid healthcare plans, wellness programs, and tuition reimbursement.

We own and maintain 256 residential housing units located in Ventura and Tulare Counties in California.

We lease these housing units to employees, former employees and non-employees.

Our residential units provide affordable housing to many of our employees, including our agribusiness employees.

1 unchanged sentence

This unique employment benefit helps us maintain a dependable, long-term employee base.

Community Development and Philanthropy

We have deep roots in our community and each year we collaborate with and devote resources to many worthwhile entities that make our region a special place to live and work.

We fund children’s agricultural education, college scholarships, health and human services, industry, community, cultural events and projects that make our communities more vibrant and sustainable.

Limoneira also founded a federal credit union onsite to provide agricultural employees an opportunity to accumulate savings and create a source of credit.

Management and employees volunteer time and resources for various industry, community and non-profit organizations by serving on their boards and committees and staffing events.

Our Harvest at Limoneira master-planned community continues our long history of building, integrating and sustaining community to promote economic, social and cultural vitality in our community.

Business Practices

Limoneira supports the efforts of the Produce Marketing Association and the United Fresh Produce Association to create an industry-wide framework on the responsible production and procurement of fresh fruit, vegetables and flowers.

The Ethical Charter on Responsible Labor Practices captures this mission and we adhere to the charter’s guiding principles regarding opposing

discrimination in any form.

We live by our Supplier Code of Conduct in how we approach our business.

This Code is global in its scope, and applies to all suppliers and their facilities, as well as our manufacturing facilities.

In order to align with international standards, the Code is derived from the policies, standards, and conventions of the United Nations (UN) and the International Labor Organization (ILO), as well as other leading independent standards such as the Responsible Business Alliance (RBA) and Worldwide Responsible Accredited Production (WRAP).

Limoneira’s Board and Management expect the Company’s vendors, suppliers and their products and services to adhere to similar environmental standards.

We partner with some local schools to provide transportation for residents.

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-K

Item 1. Business