What changed in this filing

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Item 1. Financial Statements

2022-09-08 compared with 2022-06-07 · 176 added, 153 removed, 614 unchanged (35% of the section changed)

3 unchanged sentences

($ in thousands, except share amounts)

April 30, 2022 October 31, 2021

July 31, 2022 October 31, 2021

Current assets:

27 unchanged sentences

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

14,790 shares issued and outstanding at April 30, 2022 and October 31, 2021) ( 8.75 % coupon rate)

14,790 shares issued and outstanding at July 31, 2022 and October 31, 2021) ( 8.75 % coupon rate)

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

9,300 shares issued and outstanding at April 30, 2022 and October 31, 2021) ( 4 % dividend rate on liquidation value of $ 1,000 per share)

9,300 shares issued and outstanding at July 31, 2022 and October 31, 2021) ( 4 % dividend rate on liquidation value of $ 1,000 per share)

Stockholders' Equity:

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

zero issued or outstanding at April 30, 2022 and October 31, 2021)

zero issued or outstanding at July 31, 2022 and October 31, 2021)

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

17,972,528 and 17,936,377 shares issued and 17,721,551 and 17,685,400 shares outstanding at April 30, 2022 and October 31, 2021, respectively)

17,972,528 and 17,936,377 shares issued and 17,721,551 and 17,685,400 shares outstanding at July 31, 2022 and October 31, 2021, respectively)

Additional paid-in capital 164,871 163,965

1 unchanged sentence

Accumulated other comprehensive loss ( 7,295 ) ( 5,733 )

Treasury stock, at cost, 250,977 shares at April 30, 2022 and October 31, 2021

Treasury stock, at cost, 250,977 shares at July 31, 2022 and October 31, 2021

( 3,493 ) ( 3,493 )

7 unchanged sentences

Three Months Ended

April 30, Six Months Ended

July 31, Nine Months Ended

2022 2021 2022 2021

9 unchanged sentences

Total costs and expenses 47,863 45,751 140,859 132,414

Operating income (loss) 2,586 2,384 ( 6,972 ) ( 3,256 )

Operating income 11,060 3,374 4,088 118

Other (expense) income:

4 unchanged sentences

Total other (expense) income ( 422 ) 1,131 ( 412 ) 1,771

Income (loss) before income tax (expense) benefit 2,294 2,487 ( 6,962 ) ( 2,616 )

Income tax (expense) benefit ( 722 ) ( 974 ) 1,928 213

Net income (loss) 1,572 1,513 ( 5,034 ) ( 2,403 )

Net (income) loss attributable to noncontrolling interest ( 11 ) 420 77 128

Net income (loss) attributable to Limoneira Company 1,561 1,933 ( 4,957 ) ( 2,275 )

Income before income tax provision 10,638 4,505 3,676 1,889

Income tax provision ( 3,313 ) ( 1,335 ) ( 1,385 ) ( 1,122 )

Net income 7,325 3,170 2,291 767

Net loss attributable to noncontrolling interest 52 535 129 663

Net income attributable to Limoneira Company 7,377 3,705 2,420 1,430

Preferred dividends ( 125 ) ( 125 ) ( 376 ) ( 376 )

Net income (loss) attributable to common stock $ 1,435 $ 1,807 $ ( 5,208 ) $ ( 2,526 )

Basic net income (loss) per common share $ 0.08 $ 0.10 $ ( 0.30 ) $ ( 0.15 )

Diluted net income (loss) per common share $ 0.08 $ 0.10 $ ( 0.30 ) $ ( 0.15 )

Net income applicable to common stock $ 7,252 $ 3,580 $ 2,044 $ 1,054

Basic net income per common share $ 0.41 $ 0.20 $ 0.11 $ 0.06

Diluted net income per common share $ 0.40 $ 0.20 $ 0.11 $ 0.06

Weighted-average common shares outstanding-basic 17,529,000 17,461,000 17,481,000 17,439,000

2 unchanged sentences

LIMONEIRA COMPANY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

(In thousands)

Three Months Ended

April 30, Six Months Ended

July 31, Nine Months Ended

2022 2021 2022 2021

Net income (loss) $ 1,572 $ 1,513 $ ( 5,034 ) $ ( 2,403 )

Net income $ 7,325 $ 3,170 $ 2,291 $ 767

Other comprehensive (loss) income, net of tax:

Foreign currency translation adjustments ( 828 ) ( 1,042 ) ( 1,779 ) 330

Minimum pension liability adjustment, net of tax of $ 27 , $ 50 , $ 54 and $ 100 for the three and six months ended April 30, 2022 and 2021, respectively.

Minimum pension liability adjustment, net of tax of $ 27 , $ 50 , $ 81 and $ 150 for the three and nine months ended July 31, 2022 and 2021, respectively.

72 135 217 403

Total other comprehensive (loss) income, net of tax ( 756 ) ( 907 ) ( 1,562 ) 733

Comprehensive income (loss) 639 2,224 ( 5,840 ) ( 763 )

Comprehensive (income) loss attributable to noncontrolling interest ( 5 ) 403 81 72

Comprehensive income (loss) attributable to Limoneira Company $ 634 $ 2,627 $ ( 5,759 ) $ ( 691 )

Comprehensive income 6,569 2,263 729 1,500

Comprehensive loss attributable to noncontrolling interest 80 558 161 630

Comprehensive income attributable to Limoneira Company $ 6,649 $ 2,821 $ 890 $ 2,130

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

31 unchanged sentences

Balance at April 30, 2022 17,721,551 $ 180 $ 164,253 $ 13,691 $ ( 6,539 ) $ ( 3,493 ) $ 11,884 $ 179,976 $ 1,479 $ 9,331

Dividends Common ($ 0.075 per share)

— — — ( 1,325 ) — — — ( 1,325 ) — —

Dividends Series B ($ 2.19 per share)

— — — ( 32 ) — — — ( 32 ) — —

Dividends Series B-2 ($ 10 per share)

— — — ( 93 ) — — — ( 93 ) — —

Stock compensation — — 618 — — — — 618 — —

Net income (loss) — — — 7,377 — — ( 52 ) 7,325 — —

Other comprehensive loss, net of tax — — — — ( 756 ) — ( 28 ) ( 784 ) — —

Balance at July 31, 2022 17,721,551 $ 180 $ 164,871 $ 19,618 $ ( 7,295 ) $ ( 3,493 ) $ 11,804 $ 185,685 $ 1,479 $ 9,331

LIMONEIRA COMPANY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY AND TEMPORARY EQUITY (CONTINUED)

($ in thousands)

Stockholders' Equity Temporary Equity

26 unchanged sentences

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

Dividends Common ($ 0.075 per share)

— — — ( 1,326 ) — — — ( 1,326 ) — —

Dividends Series B ($ 2.19 per share)

— — — ( 32 ) — — — ( 32 ) — —

Dividends Series B-2 ($ 10 per share)

— — — ( 93 ) — — — ( 93 ) — —

Stock compensation — — 440 — — — — 440 — —

Noncontrolling interest adjustment — — — — — — ( 1,331 ) ( 1,331 ) — —

Net income (loss) — — — 3,705 — — ( 535 ) 3,170 — —

Other comprehensive loss, net of tax — — — — ( 907 ) — ( 23 ) ( 930 ) — —

Balance at July 31, 2021 17,685,400 $ 179 $ 163,460 $ 27,874 $ ( 6,815 ) $ ( 3,493 ) $ 11,780 $ 192,985 $ 1,479 $ 9,331

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

2 unchanged sentences

(In thousands)

Six Months Ended

Nine Months Ended

Operating activities

Net loss $ ( 5,034 ) $ ( 2,403 )

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

Net income $ 2,291 $ 767

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 7,432 7,490

15 unchanged sentences

Other long-term liabilities ( 193 ) ( 419 )

Net cash (used in) provided by operating activities ( 1,160 ) 4,643

Net cash provided by operating activities 10,919 16,802

Investing activities

1 unchanged sentence

Net proceeds from sale of assets 110 87

Collection on note receivable 2,600 25

Collection on notes receivable 2,755 25

Cash distribution from equity investment — 106

Investments in mutual water companies and water rights ( 494 ) ( 652 )

3 unchanged sentences

Repayments of long-term debt ( 119,327 ) ( 72,438 )

Principal paid on finance leases ( 169 ) —

Proceeds from equipment financings 1,020 —

Principal paid on finance lease and equipment financings ( 271 ) —

Dividends paid – common ( 3,978 ) ( 3,977 )

1 unchanged sentence

Exchange of common stock ( 1,086 ) ( 700 )

Net cash provided by financing activities 2,326 1,908

Net cash used in financing activities ( 4,814 ) ( 7,809 )

Effect of exchange rate changes on cash ( 247 ) ( 3 )

5 unchanged sentences

(In thousands)

Six Months Ended

Nine Months Ended

Supplemental disclosures of cash flow information

Cash paid during the period for interest, net of amounts capitalized $ 1,108 $ 1,340

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

Cash received during the period for income taxes, net $ — $ 5,942

Non-cash investing and financing activities:

Capital expenditures accrued but not paid at period-end $ 359 $ 437

Accrued contribution obligation of investment in water company $ 450 $ 450

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

20 unchanged sentences

Summary of Significant Accounting Policies

Comprehensive Income (Loss)

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

Comprehensive Income

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

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

1 unchanged sentence

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

Three Months Ended April 30,

Three Months Ended July 31,

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

2 unchanged sentences

Other comprehensive gain before reclassifications 99 ( 27 ) 72 185 ( 50 ) 135

Other comprehensive (loss) income $ ( 906 ) $ ( 27 ) $ ( 933 ) $ 761 $ ( 50 ) $ 711

Other comprehensive loss $ ( 729 ) $ ( 27 ) $ ( 756 ) $ ( 857 ) $ ( 50 ) $ ( 907 )

LIMONEIRA COMPANY

1 unchanged sentence

Summary of Significant Accounting Policies (continued)

Comprehensive Income (Loss) (continued)

Six Months Ended April 30,

Comprehensive Income (continued)

Nine Months Ended July 31,

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

4 unchanged sentences

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

Foreign Currency Translation (Loss) Gain Defined Benefit Pension Plan Accumulated Other Comprehensive Loss

Foreign Currency Translation Loss Defined Benefit Pension Plan Accumulated Other Comprehensive Loss

Balance at October 31, 2021 $ ( 3,754 ) $ ( 1,979 ) $ ( 5,733 )

Other comprehensive (loss) income ( 1,779 ) 217 ( 1,562 )

Balance at April 30, 2022 $ ( 4,705 ) $ ( 1,834 ) $ ( 6,539 )

Balance at July 31, 2022 $ ( 5,533 ) $ ( 1,762 ) $ ( 7,295 )

Foreign Currency Translation (Loss) Gain Defined Benefit Pension Plan Accumulated Other Comprehensive Loss

1 unchanged sentence

Other comprehensive income 330 403 733

Balance at April 30, 2021 $ ( 1,697 ) $ ( 4,211 ) $ ( 5,908 )

Balance at July 31, 2021 $ ( 2,739 ) $ ( 4,076 ) $ ( 6,815 )

COVID-19 Pandemic

There is uncertainty around the breadth and duration of the Company's business disruptions related to the COVID-19 pandemic.

The decline in demand for the Company's products beginning the second quarter of fiscal year 2020, which it believes was due to the COVID-19 pandemic, negatively impacted its sales and profitability for the last three quarters of fiscal year 2020, all of fiscal year 2021, and the first two quarters of fiscal year 2022.

The Company also expects COVID-19 to impact its sales and profitability in future periods.

The Company also expects the COVID-19 pandemic to impact its sales and profitability in future periods.

The duration of these trends and the magnitude of such impacts are uncertain and therefore cannot be estimated at this time, as they are influenced by a number of factors, many of which are outside management’s control.

14 unchanged sentences

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

Two customers represented 13 % and 11 % of revenue, respectively, for the six months ended April 30, 2022.

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

One individual customer represented 11 % of accounts receivable, net as of April 30, 2022.

No individual customer represented more than 10% of accounts receivable, net as of October 31, 2021.

Lemons procured from third-party growers were 51 % and 50 % of the Company's lemon supply for the three months ended April 30, 2022 and 2021, respectively, and were 54 % and 49 % of the Company's lemon supply for the six months ended April 30, 2022 and 2021, respectively.

One third-party grower was 13 % and 19 % of the lemon supply for the six months ended April 30, 2022 and 2021, respectively.

During the three months ended April 30, 2022 and 2021, the Company had approximately $ 2,503,000 and $ 950,000 , respectively, of total sales in Chile by Fruticola Pan de Azucar S.A.

One customer represented 11 % of revenue for the nine months ended July 31, 2022.

Two customers represented 17 % and 13 % of revenue, respectively, for the nine months ended July 31, 2021.

No individual customer represented more than 10% of accounts receivable, net as of July 31, 2022 or October 31, 2021.

Lemons procured from third-party growers were 46 % and 57 % of the Company's lemon supply for the three months ended July 31, 2022 and 2021, respectively, and were 51 % and 51 % of the Company's lemon supply for the nine months ended July 31, 2022 and 2021, respectively.

One third-party grower was 10 % of the lemon supply for the nine months ended July 31, 2021.

During the three months ended July 31, 2022 and 2021, the Company had approximately $ 491,000 and $ 578,000 , respectively, of total sales in Chile by Fruticola Pan de Azucar S.A.

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

During the six months ended April 30, 2022 and 2021, the Company had approximately $ 2,711,000 and $ 1,977,000 , respectively, of total sales in Chile by PDA and San Pablo.

During the nine months ended July 31, 2022 and 2021, the Company had approximately $ 3,202,000 and $ 2,555,000 , respectively, of total sales in Chile by PDA and San Pablo.

In March 2022, the Company signed an agreement to lease Finca Santa Clara, its 1,200 -acre lemon ranch in Argentina, to FGF Trapani ("FGF"), its 49 % partner in Trapani Fresh Consorcio de Cooperacion ("Trapani Fresh").

The lease is retroactive beginning November 1, 2021, with a term of 14 months at a fixed sum of $ 400,000 , payable in five equal, monthly installments beginning August 2022 until December 2022.

During the three and six months ended April 30, 2022, the Company had approximately $ 171,000 of lease income by Trapani Fresh included in other operations revenue.

During the three and six months ended April 30, 2021, the Company had approximately $ 884,000 and $ 2,555,000 , respectively, of total agribusiness sales in Argentina by Trapani Fresh.

Aggregate foreign exchange transaction losses realized for our foreign subsidiaries was approximately $ 107,000 and $ 551,000 for the six months ended April 30, 2022 and 2021, respectively, and were included in selling, general and administrative expenses in the consolidated statements of operations.

During the three and nine months ended July 31, 2022, the Company had approximately $ 86,000 and $ 257,000 , respectively, of lease income by Trapani Fresh included in other operations revenue.

During the three and nine months ended July 31, 2021, the Company had approximately $ 710,000 and $ 3,265,000 , respectively, of total agribusiness sales in Argentina by Trapani Fresh.

Aggregate foreign exchange transaction losses realized for our foreign subsidiaries was approximately $ 137,000 and $ 598,000 for the nine months ended July 31, 2022 and 2021, respectively, and were included in selling, general and administrative expenses in the consolidated statements of operations.

Prepaid Expenses and Other Current Assets

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

April 30, 2022 October 31, 2021

July 31, 2022 October 31, 2021

Prepaid supplies and insurance $ 3,378 $ 2,521

7 unchanged sentences

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

April 30, 2022 October 31, 2021

July 31, 2022 October 31, 2021

East Area I - Retained Property $ 13,633 $ 13,335

10 unchanged sentences

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

The balance in Retained Property and East Area II includes estimated costs incurred by and reimbursable to LLCB of $ 5,771,000 at April 30, 2022 and October 31, 2021, which is included in payables to related parties.

The balance in Retained Property and East Area II includes estimated costs incurred by and reimbursable to LLCB of $ 5,771,000 at July 31, 2022 and October 31, 2021, which is included in payables to related parties.

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

3 unchanged sentences

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

The joint venture had an outstanding balance of $ 1,000,000 as of April 30, 2022.

The Loan has a one year extension option through February 22, 2024 subject to terms and conditions as defined in the agreement, with the maximum borrowing amount reduced to $ 35,000,000 during the extension period.

The Loan had an outstanding balance of $ 2,500,000 as of July 31, 2022.

The Loan has a one year extension option through February 22, 2024 subject to terms and conditions as defined in the Loan agreement, with the maximum borrowing amount reduced to $ 35,000,000 during the extension period.

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

The guarantee shall continue in effect until all of the Loan obligations are fully paid and the guarantors are jointly and severally liable for all Loan obligations in the event of default by LLCB.

The guarantors are jointly and severally liable for all Loan obligations in the event of default by LLCB.

The guarantee continues in effect until all of the Loan obligations are fully paid.

The $ 1,080,000 estimated value of the guarantee was recorded in the Company’s consolidated balance sheets and is included in other long-term liabilities with a corresponding value in equity in investments.

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

Through April 30, 2022, LLCB has closed sales of initial residential lots representing 586 residential units.

Through July 31, 2022, LLCB has closed sales of initial residential lots representing 586 residential units.

In September 2022, the Company entered into an agreement with LLCB to sell its East Area 1 - Retained Property to potentially develop additional residential units.

The Company expects to close the transaction in the fourth quarter of fiscal year 2022, receive approximately $ 8,000,000 in cash proceeds and record an estimated gain of approximately $ 4,700,000 .

Other Real Estate Development Projects

The remaining real estate development parcel within the Templeton Santa Barbara, LLC project is described as Sevilla.

In fiscal year 2020, the Company entered into an agreement to sell its Sevilla property for $ 2,700,000 , which is expected to close in fiscal year 2022.

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

At April 30, 2022 and October 31, 2021, the $ 2,543,000 carrying value of the property was classified as held for sale and included in prepaid expenses and other current assets.

In fiscal year 2020, the Company entered into an agreement to sell its Sevilla property for $ 2,700,000 , which is expected to close in calendar year 2022.

After transaction and other costs, the Company expects to receive cash proceeds of approximately $ 2,670,000 .

During the third quarter of fiscal year 2022, the Company incurred additional costs to prepare the asset for sale, of which $ 127,000 were capitalized and $ 153,000 were recorded in loss on disposal of assets.

The carrying value of the property at July 31, 2022 and October 31, 2021, was $ 2,670,000 and $ 2,543,000 , respectively, and classified as held for sale and included in prepaid expenses and other current assets.

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

7 unchanged sentences

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

April 30, 2022 October 31, 2021

July 31, 2022 October 31, 2021

Limoneira Lewis Community Builders, LLC $ 60,827 $ 60,216

3 unchanged sentences

$ 64,621 $ 64,072

Net amounts due (to) from Rosales were $( 23,000 ) and $ 1,570,000 at April 30, 2022 and October 31, 2021, respectively, and are included in receivables/other from related parties and payables to related parties.

Net amounts due from Rosales were $ 540,000 and $ 1,570,000 at July 31, 2022 and October 31, 2021, respectively, and are included in receivables/other from related parties and payables to related parties.

Unconsolidated Significant Subsidiary

2 unchanged sentences

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

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

During the year-to-date interim period for the nine months ended July 31, 2021, this threshold was met for the Company's equity investment in LLCB.

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

Six Months Ended

Nine Months Ended

Revenues $ 1,686 $ 36,684

8 unchanged sentences

Foreign currency translation adjustment ( 15 )

Balance at April 30, 2022 $ 1,520

Balance at July 31, 2022 $ 1,512

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

There have been no impairment charges recorded against goodwill as of April 30, 2022.

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

There have been no impairment charges recorded against goodwill as of July 31, 2022.

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

LIMONEIRA COMPANY

2 unchanged sentences

Intangible assets consisted of the following (in thousands):

April 30, 2022 October 31, 2021

July 31, 2022 October 31, 2021

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

4 unchanged sentences

$ 10,019 $ ( 2,437 ) $ 7,582 $ 10,223 $ ( 1,894 ) $ 8,329

Amortization expense totaled $ 180,000 and $ 263,000 for the three months ended April 30, 2022 and 2021, respectively.

Amortization expense totaled $ 361,000 and $ 526,000 for the six months ended April 30, 2022 and 2021, respectively.

Estimated future amortization expense of intangible assets as of April 30, 2022 is as follows (in thousands):

2022 (excluding the six months ended April 30, 2022) $ 362

Amortization expense totaled $ 182,000 and $ 210,000 for the three months ended July 31, 2022 and 2021, respectively.

Amortization expense totaled $ 543,000 and $ 736,000 for the nine months ended July 31, 2022 and 2021, respectively.

Estimated future amortization expense of intangible assets as of July 31, 2022 is as follows (in thousands):

2022 (excluding the nine months ended July 31, 2022) $ 180

Thereafter 1,103

1 unchanged sentence

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

As of April 30, 2022 and October 31, 2021, $ 6,484,000 and $ 5,994,000 , respectively, were included in other assets.

As of July 31, 2022 and October 31, 2021, $ 6,488,000 and $ 5,994,000 , respectively, were included in other assets.

Accrued Liabilities

Accrued liabilities consist of the following (in thousands):

April 30, 2022 October 31, 2021

July 31, 2022 October 31, 2021

Compensation $ 2,871 $ 2,112

8 unchanged sentences

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

April 30, 2022 October 31, 2021

July 31, 2022 October 31, 2021

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

the interest rate of the revolving line of credit is variable based on the one-month London Interbank Offered Rate (“LIBOR”), which was 0.45 % at April 30, 2022, plus 1.75 %.

The interest rate for the $ 40.0 million outstanding balance of the non-revolving line of credit is fixed at 4.77 % through July 1, 2022, 3.57 % through July 1, 2025 and variable thereafter.

the interest rate of the revolving line of credit is variable based on the one-month London Interbank Offered Rate (“LIBOR”), which was 1.65 % at July 31, 2022, plus 1.85 %.

The interest rate for the $ 40.0 million outstanding balance of the non-revolving line of credit was fixed at 4.77 % through July 1, 2022, is 3.57 % through July 1, 2025 and variable thereafter.

Interest is payable monthly and the principal is due in full on July 1, 2026.

$ 112,994 $ 111,293

Farm Credit West revolving equity line of credit:

the interest rate is variable based on the Lender's variable interest rate plan, which was 2.75 % at April 30, 2022.

The loan is payable in interest-only monthly payments through April 2023 and monthly principal and interest payments thereafter, through February 2043.

Farm Credit West term loan:

17 unchanged sentences

Note Payable:

the interest rate ranges from 5.00 % to 7.00 % and was 7.00 % at April 30, 2022.

the interest rate ranges from 5.00 % to 7.00 % and was 7.00 % at July 31, 2022.

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

10 unchanged sentences

Long-term debt, less current portion $ 129,004 $ 130,353

In June 2021, the Company 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 for a period of time as described in the table above ("Fixed Interest Rate Agreement").

The Company 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 a fixed interest rate for a period of time as described in the table above ("Fixed Interest Rate Agreement").

The MLA governs the terms of the Supplements.

3 unchanged sentences

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

As of April 30, 2022, the Company's outstanding borrowings under the Supplements and RELOC were $ 119,102,000 and it had $ 10,898,000 available to borrow.

As of July 31, 2022, the Company's outstanding borrowings under the Supplements and RELOC were $ 112,994,000 and it had $ 17,006,000 available to borrow.

LIMONEIRA COMPANY

1 unchanged sentence

Long-Term Debt (continued)

The interest rate in effect under the Revolving Credit Supplement 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, the Company has 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.

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

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

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

On each one year anniversary of July 1, the Company has 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.

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 % through July 1, 2022 and then will convert to a fixed interest rate of 3.57 % per year until July 1, 2025 (the “Fixed Rate Term”).

The initial interest rate in effect under the Non-Revolving Credit Supplement was a fixed interest rate of 4.77 % through July 1, 2022 and then converted 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 applicable interest rate group.

1 unchanged sentence

Thereafter, the Company 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.

The interest rate in effect under the RELOC is a variable interest rate established by the Lender corresponding to the applicable interest rate group, which was 2.75 % as of April 30, 2022.

The interest rate in effect under the RELOC is a variable interest rate established by the Lender corresponding to the applicable interest rate group, which was 4.00 % as of July 31, 2022.

The interest rate may be adjusted automatically under the provisions of the Lender's variable interest rate plan.

5 unchanged sentences

In December 2021, the Lender declared an annual cash patronage dividend of 1.25 % of average eligible loan balances and the Company received the aggregate of $ 1,582,000 in March and April 2022.

In December 2020, Farm Credit West declared an annual cash patronage dividend of 1.50 % of average eligible loan balances and the Company received $ 1,170,000 in February 2021.

In December 2020, the Lender declared an annual cash patronage dividend of 1.50 % of average eligible loan balances and the Company received $ 1,170,000 in February 2021.

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

The Company capitalized interest of zero and $ 308,000 during the three months ended April 30, 2022 and 2021, respectively, and zero and $ 308,000 during the six months ended April 30, 2022 and 2021, respectively.

The Company capitalized interest of $ 235,000 and $ 353,000 during the three months ended July 31, 2022 and 2021, respectively, and $ 235,000 and $ 661,000 during the nine months ended July 31, 2022 and 2021, respectively.

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

9 unchanged sentences

Three Months Ended

April 30, Six Months Ended

July 31, Nine Months Ended

2022 2021 2022 2021

8 unchanged sentences

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

Operating lease costs were $ 135,000 and $ 136,000 for the three months ended April 30, 2022 and 2021, respectively, and $ 258,000 and $ 278,000 for the six months ended April 30, 2022 and 2021, respectively, which are primarily included in agribusiness costs and expenses in the Company’s consolidated statements of operations.

Finance lease costs were $ 98,000 and zero for the three months ended April 30, 2022 and 2021, respectively, and $ 156,000 and zero for the six months ended April 30, 2022 and 2021, respectively, which are primarily included in agribusiness costs and expenses in the Company’s consolidated statements of operations.

Operating lease costs were $ 137,000 and $ 128,000 for the three months ended July 31, 2022 and 2021, respectively, and $ 395,000 and $ 406,000 for the nine months ended July 31, 2022 and 2021, respectively, which are primarily included in agribusiness costs and expenses in the Company’s consolidated statements of operations.

Finance lease costs were $ 37,000 and zero for the three months ended July 31, 2022 and 2021, respectively, and $ 112,000 and zero for the nine months ended July 31, 2022 and 2021, respectively, which are primarily included in agribusiness costs and expenses in the Company’s consolidated statements of operations.

Variable and short term lease costs were immaterial.

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

Classification April 30, 2022 October 31, 2021

Classification July 31, 2022 October 31, 2021

Operating lease ROU assets Other assets $ 2,058 $ 2,041

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Supplemental cash flow information related to leases consists of the following (in thousands):

Three Months Ended

April 30, Six Months Ended

2022 2021 2022 2021

Nine Months Ended

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

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ROU assets obtained in exchange for new operating lease liabilities $ 355 $ 271

Leased assets obtained in exchange for new finance lease liabilities $ — $ — $ 1,020 $ —

Basic and Diluted Net Income (Loss) per Share

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

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

Basic and Diluted Net Income per Share

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

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

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

Three Months Ended

April 30, Six Months Ended

July 31, Nine Months Ended

2022 2021 2022 2021

Basic net income (loss) per common share:

Net income (loss) applicable to common stock $ 1,435 $ 1,807 $ ( 5,208 ) $ ( 2,526 )

Basic net income per common share:

Net income applicable to common stock $ 7,252 $ 3,580 $ 2,044 $ 1,054

Earnings allocated to unvested, restricted stock ( 79 ) ( 15 ) ( 42 ) ( 50 )

Net income (loss) for basic EPS 1,420 1,790 ( 5,237 ) ( 2,561 )

Net income for basic EPS 7,173 3,565 2,002 1,004

Weighted average common shares-basic 17,529 17,461 17,481 17,439

Basic net income (loss) per common share $ 0.08 $ 0.10 $ ( 0.30 ) $ ( 0.15 )

Diluted net income (loss) per common share:

Net income (loss) for basic EPS $ 1,420 $ 1,790 $ ( 5,237 ) $ ( 2,561 )

Basic net income per common share $ 0.41 $ 0.20 $ 0.11 $ 0.06

Diluted net income per common share:

Net income for basic EPS $ 7,173 $ 3,565 $ 2,002 $ 1,004

Effect of dilutive unvested, restricted stock and preferred stock 125 140 — —

Net income (loss) for diluted EPS $ 1,420 $ 1,790 ( 5,237 ) ( 2,561 )

Net income for diluted EPS $ 7,298 $ 3,705 2,002 1,004

Weighted average common shares–basic 17,529 17,461 17,481 17,439

1 unchanged sentence

Weighted average common shares–diluted 18,334 18,243 17,481 17,439

Diluted net income (loss) per common share $ 0.08 $ 0.10 $ ( 0.30 ) $ ( 0.15 )

Diluted net income (loss) per common share is computed using the more dilutive method of either the two-class method or the treasury stock method.

Diluted net income per common share $ 0.40 $ 0.20 $ 0.11 $ 0.06

Diluted net income per common share is computed using the more dilutive method of either the two-class method or the treasury stock method.

Unvested stock-based compensation awards that contain non-forfeitable rights to dividends as participating shares are included in computing earnings per share.

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

Diluted net loss per common share was calculated under the two-class method for the three and six months ended April 30, 2022.

The Company excluded 178,000 , unvested, restricted shares, as calculated under the treasury stock method, from its computation of diluted net loss per common share for the three months ended April 30, 2021 and 185,000 for the six months ended April 30, 2021.

Diluted net income per common share was calculated under the two-class method for the three and nine months ended July 31, 2022.

The Company excluded 147,000 , unvested, restricted shares, as calculated under the treasury stock method, from its computation of diluted net income per common share for the three months ended July 31, 2021 and 146,000 for the nine months ended July 31, 2021.

LIMONEIRA COMPANY

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The Company has transactions with equity method investments and various related parties summarized in Note 6 - Equity in Investments and in the tables below (in thousands):

April 30, 2022 October 31, 2021

July 31, 2022 October 31, 2021

Balance Sheet Balance Sheet

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11 Third-party growers $ — $ — $ — $ — $ — $ — $ 41 $ —

Three Months Ended April 30, 2022 Three Months Ended April 30, 2021

Three Months Ended July 31, 2022 Three Months Ended July 31, 2021

Consolidated Statement of Operations Consolidated Statement of Operations

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5 Cadiz / Fenner / WAM $ — $ — $ 895 $ — $ — $ — $ 36 $ —

7 YMIDD $ — $ — $ 62 $ — $ — $ — $ 53 $ —

8 FGF $ 83 $ 86 $ 2 $ — $ 710 $ — $ 1,761 $ —

1 unchanged sentence

11 Third-party growers $ — $ — $ — $ — $ — $ — $ 16 $ —

Six Months Ended April 30, 2022 Six Months Ended April 30, 2021

Nine Months Ended July 31, 2022 Nine Months Ended July 31, 2021

Consolidated Statement of Operations Consolidated Statement of Operations

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

There were no rental payments due from employees at April 30, 2022 or October 31, 2021.

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

The Company recorded capital contributions, purchased water and water delivery services and had water payments due to the mutual water companies.

There were no material rental payments due from employees at July 31, 2022 or October 31, 2021.

(2) Mutual water companies - The Company has representation on the boards of directors of the mutual water companies in which the Company has investments, as well as other water districts.

Refer to Note 8 - Other Assets.

The Company recorded capital contributions, purchased water and water delivery services and had water payments due to the mutual water companies and districts.

LIMONEIRA COMPANY

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

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

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

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

(11) Third-party growers - A member of the Company's board of directors markets lemons through the Company.

The former board member resigned effective June 14, 2022 and Freska is no longer a related party.

(11) Third-party growers - A former member of the Company's board of directors markets lemons through the Company.

The Company had payments due to the member for such lemon procurement.

The effective tax rate for the six months ended April 30, 2022 was higher than the federal statutory tax rate of 21% mainly due to foreign jurisdictions that are taxed at different rates, state taxes, tax impact of stock-based compensation, and nondeductible tax items.

The Company has no material uncertain tax positions as of April 30, 2022.

The former board member resigned effective June 14, 2022.

The effective tax rate for the nine months ended July 31, 2022 was higher than the federal statutory tax rate of 21% mainly due to foreign jurisdictions that are taxed at different rates, state taxes, tax impact of stock-based compensation, and nondeductible tax items.

The Company has no material uncertain tax positions as of July 31, 2022.

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

There was no accrued interest or penalties associated with uncertain tax positions as of April 30, 2022.

There was no accrued interest or penalties associated with uncertain tax positions as of July 31, 2022.

Retirement Plans

The Limoneira Company Retirement Plan (the “Plan”) is a noncontributory, defined benefit, single employer pension plan, which provides retirement benefits for all eligible employees.

The Limoneira Company Retirement Plan (the “Plan”) is a noncontributory, defined benefit, single employer pension plan, that provides retirement benefits for all eligible employees.

Benefits paid by the Plan are calculated based on years of service, highest five-year average earnings, primary Social Security benefit and retirement age.

6 unchanged sentences

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

There were no funding contributions during the six months ended April 30, 2022 and 2021.

Plan assets are invested in a group trust consisting primarily of pooled funds, mutual funds, short-term investment funds and cash.

The components of net periodic pension cost for the Plan for the three and six months ended April 30, 2022 and 2021 were as follows (in thousands):

There were no funding contributions during the nine months ended July 31, 2022 and 2021.

Plan assets are invested in a group trust consisting primarily of pooled funds, mutual funds, cash and cash equivalents.

The components of net periodic pension cost for the Plan for the three and nine months ended July 31, 2022 and 2021 were as follows (in thousands):

Three Months Ended

April 30, Six Months Ended

July 31, Nine Months Ended

2022 2021 2022 2021

13 unchanged sentences

Stock-based Compensation

The Company has a stock-based compensation plan (the “Stock Plan”) that allows for the grant of common stock of the Company to members of management, key executives and non-employee directors.

The fair value of such awards is based on the fair value of the Company’s stock on the date of grant and all are classified as equity awards.

The Company has a stock-based compensation plan (the “Stock Plan”) that allows for the grant of restricted stock of the Company to members of management, key executives and non-employee directors.

The fair value of such awards is based on the fair value of the Company’s common stock on the date of grant and all are classified as equity awards.

Performance Awards

5 unchanged sentences

Executive awards generally vest over a three to five-year period as service is provided.

During December 2021, the Company granted 70,000 shares of common stock with a per share price of $ 14.96 to key executives under the Stock Plan, of which 15,000 shares were forfeited on February 1, 2022 pursuant to a key executive's severance agreement.

During December 2021, the Company granted 70,000 shares of restricted stock with a per share price of $ 14.96 to key executives under the Stock Plan, of which 15,000 shares were forfeited on February 1, 2022 pursuant to a key executive's severance agreement.

The related compensation expense after forfeiture of approximately $ 823,000 will be recognized equally over the next three years as the shares vest.

5 unchanged sentences

On an annual basis, the Company generally issues shares of common stock to non-employee directors under the Stock Plan (“Director Awards”).

During March 2022, 46,279 shares of common stock were granted as Director Awards, which vest over a one-year period from date of grant.

During March 2022, 46,279 shares of restricted stock were granted as Director Awards, which vest after a one-year period from date of grant.

The related stock-based compensation of approximately $ 627,000 will be recognized equally over the next year as the shares vest.

During January 2021, 27,815 shares of common stock were granted as Director Awards that vested upon grant.

The Company recognized $ 469,000 of stock-based compensation to non-employee directors during the six months ended 2021.

During the six months ended April 30, 2022 and 2021, members of management exchanged 68,080 and 46,993 shares of common stock with fair values of $ 1,086,000 and $ 701,000 , respectively, at the date of the exchanges, for the payment of payroll taxes associated with the vesting of shares under the Stock Plan.

During January 2021, 27,815 shares of restricted stock were granted as Director Awards that vested upon grant.

The related stock-based compensation of $ 469,000 was recognized during the first quarter of fiscal year 2021.

During the nine months ended July 31, 2022 and 2021, members of management exchanged 68,080 and 46,993 shares of common stock with fair values totaling $ 1,086,000 and $ 701,000 , respectively, at the dates of the exchanges, for the payment of payroll taxes associated with the vesting of shares under the Stock Plan.

Treasury Stock

7 unchanged sentences

The fresh lemons segment includes sales, farming and harvesting expenses and third-party grower and supplier costs relative to fresh lemons.

The lemon packing segment includes packing revenues and shipping and handling revenues relative to lemon packing.

The lemon packing segment includes packing revenues, intersegment packing revenues and shipping and handling revenues relative to lemon packing.

The lemon packing segment expenses are comprised of lemon packing costs.

3 unchanged sentences

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

Revenues related to rental operations are included in “Corporate and Other.” Other agribusiness revenues consisted of oranges of $ 2,617,000 and $ 3,490,000 and specialty citrus and other crops of $ 1,441,000 and $ 2,317,000 for the three and six months ended April 30, 2022, respectively.

Other agribusiness revenues consisted of oranges of $ 1,404,000 and $ 2,495,000 and specialty citrus and other crops of $ 1,175,000 and $ 3,024,000 for the three and six months ended April 30, 2021, respectively.

Revenues related to rental operations are included in “Corporate and Other.” Other agribusiness revenues consisted of oranges of $ 3,736,000 and $ 7,226,000 and specialty citrus and other crops of $ 1,120,000 and $ 3,437,000 for the three and nine months ended July 31, 2022, respectively.

Other agribusiness revenues consisted of oranges of $ 1,981,000 and $ 4,476,000 and specialty citrus and other crops of $ 1,065,000 and $ 4,089,000 for the three and nine months ended July 31, 2021, respectively.

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

2 unchanged sentences

The Company does not allocate selling, general and administrative expense, total other income (expense) and income taxes, or specifically identify them to its operating segments.

The Company earns packing revenue for packing lemons grown on its orchards and lemons procured from third-party growers and suppliers.

The Company earns packing revenue for packing lemons grown on its orchards and lemons procured from third-party growers.

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

2 unchanged sentences

Segment Information (continued)

Segment information for the three months ended April 30, 2022 (in thousands):

Segment information for the three months ended July 31, 2022 (in thousands):

Packing Eliminations

9 unchanged sentences

Operating income (loss) $ 1,223 $ 4,080 $ — $ 9,424 $ 3,576 $ 16,131 $ ( 5,071 ) $ 11,060

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

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

Packing Eliminations

9 unchanged sentences

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

Segment information for the six months ended April 30, 2022 in thousands):

Segment information for the nine months ended July 31, 2022 (in thousands):

Packing Eliminations

9 unchanged sentences

Operating income (loss) $ 2,432 $ 10,535 $ — $ 11,372 $ 2,945 $ 20,740 $ ( 16,652 ) $ 4,088

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

Segment information for the nine months ended July 31, 2021 (in thousands):

Packing Eliminations

10 unchanged sentences

Subsequent Events

The Company has evaluated events subsequent to April 30, 2022 through the date of this filing, to assess the need for potential recognition or disclosure in this Quarterly Report on Form 10-Q.

The Company evaluated events subsequent to July 31, 2022 through the date of this filing, to assess the need for potential recognition or disclosure in this Quarterly Report on Form 10-Q.

Based upon this evaluation, except as described in the notes to the interim consolidated financial statements, it was determined that no other subsequent events occurred that require recognition or disclosure in the unaudited consolidated financial statements.

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

What changed 10-Q

Item 1. Financial Statements