What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-09-08 compared with 2022-06-07 · 210 added, 199 removed, 350 unchanged (54% of the section changed)

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Our avocado producing business is important to us, yet it faces constraints on growth as there is little additional land with sufficient water that can be cost-effectively acquired to support new avocado orchards in Southern California.

Also, avocado production is cyclical as avocados typically bear fruit on a bi-annual basis with large crops in one year followed by smaller crops the next year.

While our avocado production can be volatile, the profitability and cash flow realized from our avocados helps to diversify our fruit production base.

Therefore, we are currently assessing all of our farmland in Ventura County for opportunities to expand our plantings of avocados.

While avocado production is cyclical as avocados typically bear fruit on a bi-annual basis, the profitability and cash flow realized from our avocados helps to diversify our fruit production base.

In addition to growing lemons and avocados, we grow oranges, specialty citrus and other crops, typically utilizing land not suitable for growing high quality lemons.

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According to the U.S.

Drought Monitor, Ventura and San Bernardino Counties were experiencing severe drought conditions and Tulare County was experiencing extreme drought conditions as of April 30, 2022.

Drought Monitor, Ventura and San Bernardino Counties were experiencing severe drought conditions and Tulare County was experiencing extreme drought conditions as of July 31, 2022.

In October 2021, the California Governor declared a drought state of emergency statewide.

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

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

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

In January 2022, Arizona experienced water releases from Lake Mead reduced by approximately 18% of the state’s annual apportionment.

In August 2022, the U.S.

Bureau of Reclamation announced Lake Mead to operate in a Tier-2a shortage, which increases water restrictions for states in the southwest.

In January 2023, Arizona will forfeit an additional 80,000-acre feet of water from Lake Mead.

In response, we entered into a fallowing agreement and we are assessing the impact these additional reductions may have on our Arizona orchards.

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 and formed Limoneira Lewis Community Builders, LLC ("LLCB") as the development entity.

LLCB has closed on lot sales representing 586 units from inception through April 30, 2022.

LLCB has closed on lot sales representing 586 units from inception through July 31, 2022.

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

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Effective November 1, 2021, the majority of our oranges and certain specialty citrus are packed by Wileman.

In February 2022, we terminated our Avocado Marketing Agreement and the associated Letter Agreement Regarding Fruit Commitment with Calavo to pursue opportunities with other packing and marketing companies.

In January 2022, we were notified of Alex M.

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Teague will receive certain other benefits as set forth in the agreement.

As of April 30, 2022, we paid $0.4 million cash severance and recognized $0.3 million accelerated vesting of stock-based compensation.

As of July 31, 2022, we paid $0.4 million cash severance and recognized $0.3 million accelerated vesting of stock-based compensation.

In March 2022, we signed an agreement to lease Finca Santa Clara, our 1,200-acre lemon ranch in Argentina, to FGF Trapani ("FGF"), our 49% partner in 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.

In April 2022, the promissory note previously received for the sale of our Centennial property, with net a carrying value of $2,350,000, was paid in full and the deferred gain of $161,000 was recognized in the second quarter of fiscal year 2022.

On March 23, 2022, we declared a cash dividend of $0.075 per common share paid on April 14, 2022, in the aggregate amount of $1.3 million to stockholders of record as of April 5, 2022.

The lease is retroactive beginning November 1, 2021, with a term of 14 months at a fixed sum of $0.4 million, payable in five equal, monthly installments beginning August 2022 until December 2022.

In April 2022, the promissory note previously received for the sale of our Centennial property, with a net carrying value of $2.4 million, was paid in full and the deferred gain of $0.2 million was recognized in the second quarter of fiscal year 2022.

In June 2022, we engaged with YMIDD in a two-year fallowing and forbearance program at our Associated Citrus Packers ranch in Yuma, Arizona.

We expect to receive payments totaling approximately $1.3 million during the program.

With the fallowing program in place, this ranch will have approximately 700 acres of productive lemons, 400 fallowed acres and 200 acres of other crops.

On June 28, 2022, we declared a cash dividend of $0.075 per common share paid on July 15, 2022, in the aggregate amount of $1.3 million to stockholders of record as of July 11, 2022.

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

We expect to close the transaction in the fourth quarter of fiscal year 2022, receive approximately $8.0 million in cash proceeds and record an estimated gain of approximately $4.7 million.

COVID-19 Pandemic

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

The export market for fresh produce also significantly

declined due to the COVID-19 pandemic impacts.

As of April 30, 2022, 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, all of fiscal year 2021, and the first two quarters of fiscal year 2022.

We also expect COVID-19 to impact our sales and profitability in future periods.

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

As of July 31, 2022, the demand within both markets is recovering but has not yet returned to pre-pandemic levels.

We also expect the COVID-19 pandemic to impact 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 our Annual Report on Form 10-K for the year ended October 31, 2021.

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Three Months Ended

April 30, Six Months Ended

July 31, Nine Months Ended

2022 2021 2022 2021

Net revenues:

Agribusiness $ 57,594 $ 47,954 $ 141,046 $ 129,080

7 unchanged sentences

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

Operating income (loss):

Operating income:

Agribusiness 16,131 7,263 20,740 15,009

2 unchanged sentences

Selling, general and administrative (5,031) (4,043) (16,756) (15,154)

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

Non-GAAP Financial Measures

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The non-GAAP information provided is unique to us and may not be consistent with methodologies used by other companies.

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

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

Three Months Ended

April 30, Six Months Ended

July 31, Nine Months Ended

2022 2021 2022 2021

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

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

Interest income (6) (211) (54) (279)

Interest expense, net of patronage dividends 772 574 1,253 1,062

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

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

Depreciation and amortization 2,469 2,437 7,432 7,490

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Adjusted EBITDA $ 14,167 $ 7,836 $ 13,709 $ 10,805

Three Months Ended April 30, 2022 Compared to the Three Months Ended April 30, 2021

Total net revenues for the three months ended April 30, 2022 were $46.8 million, compared to $45.1 million for the three months ended April 30, 2021.

Three Months Ended July 31, 2022 Compared to the Three Months Ended July 31, 2021

Total net revenues for the three months ended July 31, 2022 were $58.9 million, compared to $49.1 million for the three months ended July 31, 2021.

The 20% increase of $9.8 million was primarily the result of increased avocados and oranges agribusiness revenues, partially offset by decreased lemon agribusiness revenues, as detailed below ($ in thousands):

Agribusiness Revenues for the Three Months Ended April 30,

Agribusiness Revenues for the Three Months Ended July 31,

2022 2021 Change

4 unchanged sentences

Agribusiness revenues $ 57,594 $ 47,954 $ 9,640 20%

The decrease in the second quarter of fiscal year 2022 was primarily the result of lower prices, partially offset by higher volume of fresh lemons sold, compared to the same period of fiscal year 2021.

During the second quarter of fiscal years 2022 and 2021, fresh lemon sales were $27.3 million and $28.7 million, in aggregate, on 1,552,000 and 1,528,000 cartons of lemons sold at average per carton prices of $17.57 and $18.79, respectively.

Lemon revenues in the second quarter of fiscal years 2022 and 2021 included shipping and handling of $6.7 million and $6.1 million, brokered fruit and other lemon sales of $2.7 million and $2.3 million and lemon by-product sales of $1.1 million and $1.6 million, respectively.

The increase in the second quarter of fiscal year 2022 was primarily the result of higher prices, partially offset by decreased volume of avocados sold, compared to the same period of fiscal year 2021.

During the second quarter of fiscal years 2022 and 2021, 1,877,000 and 2,142,000 pounds of avocados were sold at an average per pound price of $1.90 and $1.26, respectively.

The increase in the second quarter of fiscal year 2022 was primarily the result of increased volume, partially offset by lower prices of oranges sold, compared to the same period of fiscal year 2021.

In the second quarter of fiscal years 2022 and 2021, we sold 328,000 and 154,000 40-pound carton equivalents of oranges at an average per carton price of $7.98 and $9.12, respectively.

The decrease in the third quarter of fiscal year 2022 was primarily the result of decreased brokered fruit and other lemon sales, partially offset by increased fresh lemon sales and shipping and handling compared to the same period of fiscal year 2021.

During the third quarter of fiscal years 2022 and 2021, fresh lemon sales were $27.8 million and $24.4 million, in aggregate, on 1,512,000 and 1,144,000 cartons of lemons sold at average per carton prices of $18.39 and $21.34, respectively.

Lemon revenues in the third quarter of fiscal years 2022 and 2021 included shipping and handling of $6.3 million and $4.5 million, brokered fruit and other lemon sales of $5.0 million and $11.2 million, and lemon by-product sales of $1.1 million and $0.6 million, respectively.

The increase in the third quarter of fiscal year 2022 was primarily the result of increased volume and higher prices of avocados sold, compared to the same period of fiscal year 2021.

During the third quarter of fiscal years 2022 and 2021, 5,694,000 and 3,513,000 pounds of avocados were sold at an average per pound price of $2.21 and $1.16, respectively.

The increase in the third quarter of fiscal year 2022 was primarily the result of higher prices, partially offset by decreased volume of oranges sold, compared to the same period of fiscal year 2021.

In the third quarter of fiscal years 2022 and 2021, we sold 209,000 and 259,000 40-pound carton equivalents of oranges at an average per carton price of $17.88 and $7.65, respectively.

• Specialty citrus and other crops:

The increase in the second quarter of fiscal year 2022 was primarily the result of increased volume, partially offset by lower prices of specialty citrus sold, compared to the same period of fiscal year 2021.

During the second quarter of fiscal years 2022 and 2021, we sold 254,000 and 129,000 40-pound carton equivalents of specialty citrus at an average per carton price of $5.68 and $9.11, respectively.

Other operations revenue in the second quarter of fiscal years 2022 and 2021 was $1.4 million and $1.1 million, respectively.

The increase in the third quarter of fiscal year 2022 was primarily the result of increased volume and higher prices of specialty citrus sold, compared to the same period of fiscal year 2021.

During the third quarter of fiscal years 2022 and 2021, we sold 61,000 and 45,000 40-pound carton equivalents of specialty citrus at an average per carton price of $18.34 and $14.04, respectively.

Other operations revenue in the third quarter of fiscal years 2022 and 2021 was $1.3 million and $1.2 million, respectively.

Costs and Expenses

Our total costs and expenses in the second quarter of fiscal year 2022 were $44.2 million, compared to $42.7 million in the same period of fiscal year 2021.

The 3% increase of $1.4 million was primarily attributable to increases in our packing costs and growing costs, partially offset by decreases in our third-party grower and supplier costs.

Our total costs and expenses in the third quarter of fiscal year 2022 were $47.9 million, compared to $45.8 million in the same period of fiscal year 2021.

The 5% increase of $2.1 million was primarily attributable to increases in packing costs, harvest costs and selling, general and administrative expenses, partially offset by decreases in our growing and third-party grower and supplier costs.

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

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

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

2022 2021 Change

7 unchanged sentences

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

In the second quarter of fiscal years 2022 and 2021, lemon packing costs were $11.7 million and $10.9 million, respectively.

During the second quarter of fiscal years 2022 and 2021, we packed and sold 1,552,000 and 1,528,000 cartons of lemons at average per carton costs of $7.51 and $7.12, respectively.

The increase in average per carton cost is primarily due to costs of labor and benefits, cardboard cartons, fruit treatments and packaging and shipping supplies from inflation and supply chain issues.

Additionally, in the second quarter of fiscal years 2022 and 2021, packing costs included $0.6 million and $0.8 million of shipping costs, respectively.

In the third quarter of fiscal years 2022 and 2021, lemon packing costs were $12.0 million and $9.3 million, respectively.

During the third quarter of fiscal years 2022 and 2021, we packed and sold 1,512,000 and 1,144,000 cartons of lemons at average per carton costs of $7.91 and $8.11, respectively.

Additionally, in the third quarter of fiscal years 2022 and 2021, packing costs included $0.5 million and $0.6 million of shipping costs, respectively.

• Harvest costs:

Harvest costs in the second quarter of fiscal year 2022 were similar to the same period in fiscal year 2021.

Harvest costs increased in the third quarter of fiscal year 2022 primarily as a result of increased volume of lemons and avocados harvested compared to the same period in fiscal year 2021.

• Growing costs:

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

The increase in the second quarter of fiscal year 2022 was primarily due to farm management decisions based on weather, harvest timing and crop conditions and inflation and supply chain issues.

The decrease in the third quarter of fiscal year 2022 was primarily due to the lease of Finca Santa Clara in Argentina and farm management decisions based on weather, harvest timing and crop conditions.

• Third-party grower and supplier costs:

1 unchanged sentence

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

The decrease in the second quarter of fiscal year 2022 was primarily due to lower prices, partially offset by increased volume of third-party grower fruit sold, compared to the same period of fiscal year 2021.

Of the 1,552,000 and 1,528,000 cartons of lemons packed and sold during the second quarter of fiscal years 2022 and 2021, 795,000 (51%) and 758,000 (50%) were procured from third-party growers at average per carton prices of $10.13 and $12.92, respectively.

Additionally, in the second quarter of fiscal years 2022 and 2021 we incurred $1.5 million and $0.5 million, respectively, of costs for purchased, packed fruit for resale.

The decrease in the third quarter of fiscal year 2022 was primarily due to lower prices, partially offset by increased volume of third-party grower fruit sold, compared to the same period of fiscal year 2021.

Of the 1,512,000 and 1,144,000 cartons of lemons packed and sold during the third quarter of fiscal years 2022 and 2021, 695,000 (46%) and 655,000 (57%) were procured from third-party growers at average per carton prices of $12.42 and $14.88, respectively.

Additionally, in the third quarter of fiscal years 2022 and 2021, we incurred $7.0 million and $8.1 million, respectively, of costs for purchased, packed fruit for resale.

• Depreciation and amortization:

Depreciation and amortization expense for the second quarter of fiscal years 2022 and 2021 was $2.2 million and $2.3 million, respectively.

Other operations expenses were $1.1 million in the second quarter of fiscal years 2022 and 2021.

Selling, general and administrative costs and expenses were $5.1 million in the second quarter of fiscal year 2022 compared to $5.2 million in the second quarter of fiscal year 2021.

Depreciation and amortization expense for the third quarter of fiscal years 2022 and 2021 was $2.2 million and $2.1 million, respectively.

Other operations expenses were $1.1 million and $1.0 million in the third quarter of fiscal years 2022 and 2021, respectively.

Loss on disposal of assets, net was $0.2 million and zero in the third quarter of fiscal years 2022 and 2021, respectively.

Selling, general and administrative costs and expenses were $5.0 million and $4.0 million in the third quarter of fiscal years 2022 and 2021, respectively.

The 24% increase of $1.0 million primarily consisted of the following:

• Salaries, benefits and incentive compensation in the third quarter of fiscal year 2022 was $1.0 million higher than the same period of fiscal year 2021.

• Other selling, general and administrative expenses, including certain corporate overhead expenses in the third quarter of fiscal year 2022 were $0.1 million higher than the same period of fiscal year 2021.

Other (Expense) Income

Other expense in the second quarter of fiscal year 2022 was comprised primarily of $(0.7) million of net interest expense, partially offset by $0.3 million of equity in earnings of investments.

Other income in the second quarter of fiscal year 2021 was comprised primarily of $0.6 million of equity in earnings of investments, partially offset by $(0.6) million of net interest expense.

We recorded an estimated income tax provision of $0.7 million and $1.0 million in the second quarter of fiscal years 2022 and 2021 on pre-tax income of $2.3 million and $2.5 million, respectively.

The tax provision recorded for the second quarter of fiscal year 2022 differs from the U.S.

Other expense in the third quarter of fiscal year 2022 was comprised primarily of $(0.8) million of net interest expense, partially offset by $0.3 million of equity in earnings of investments.

Other income in the third quarter of fiscal year 2021 was comprised primarily of $1.5 million of equity in earnings of investments, partially offset by $(0.4) million of net interest expense.

We recorded an estimated income tax provision of $3.3 million and $1.3 million in the third quarter of fiscal years 2022 and 2021 on pre-tax income of $10.6 million and $4.5 million, respectively.

The tax provision recorded for the third quarter of fiscal year 2022 differs from the U.S.

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

Our projected annual effective blended tax rate for fiscal year 2022, excluding discrete items, is approximately 41.3%.

Net (Income) Loss Attributable to Noncontrolling Interest

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

Six Months Ended April 30, 2022 Compared to the Six Months Ended April 30, 2021

Total net revenues for the six months ended April 30, 2022 were $86.0 million, compared to $83.4 million for the six months ended April 30, 2021.

The 3% increase of $2.6 million was primarily the result of increased lemons, avocados and oranges agribusiness revenues, partially offset by decreased specialty citrus and other crops agribusiness revenues, as detailed below ($ in thousands):

Agribusiness Revenues for the Six Months Ended April 30,

Net Loss Attributable to Noncontrolling Interest

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

Nine Months Ended July 31, 2022 Compared to the Nine Months Ended July 31, 2021

Total net revenues for the nine months ended July 31, 2022 were $144.9 million, compared to $132.5 million for the nine months ended July 31, 2021.

The 9% increase of $12.4 million was primarily the result of increased avocados and oranges agribusiness revenues, partially offset by decreased lemons and specialty citrus and other crops agribusiness revenues, as detailed below ($ in thousands):

Agribusiness Revenues for the Nine Months Ended July 31,

2022 2021 Change

4 unchanged sentences

Agribusiness revenues $ 141,046 $ 129,080 $ 11,966 9%

The increase in the first six months of fiscal year 2022 was primarily the result of increased shipping and handling, partially offset by decreased fresh lemon sales, compared to the same period of fiscal year 2021.

During the first six months of fiscal years 2022 and 2021, fresh lemon sales were $52.0 million and $53.7 million, in aggregate, on 2,759,000 and 2,847,000 cartons of lemons sold at average per carton prices of $18.85 and $18.85, respectively.

Lemon revenues in the first six months of fiscal years 2022 and 2021 included shipping and handling of $12.7 million and $11.0 million, brokered fruit and other lemon sales of $6.5 million and $5.8 million and lemon by-product sales of $2.1 million and $2.5 million, respectively.

The increase in the first six months of fiscal year 2022 was primarily the result of higher prices and increased volume of avocados sold, compared to the same period of fiscal year 2021.

During the first six months of fiscal years 2022 and 2021, 2,242,000 and 2,142,000 pounds of avocados were sold at an average per pound price of $1.94 and $1.26, respectively.

The increase in the first six months of fiscal year 2022 was primarily the result of increased volume and higher prices of oranges sold, compared to the same period of fiscal year 2021.

In the first six months of fiscal years 2022 and 2021, we sold 381,000 and 273,000 40-pound carton equivalents of oranges at an average per carton price of $9.16 and $9.14, respectively.

The decrease in the first nine months of fiscal year 2022 was primarily the result of decreased brokered fruit and other lemon sales, partially offset by increased fresh lemon and shipping and handling sales compared to the same period of fiscal year 2021.

During the first nine months of fiscal years 2022 and 2021, fresh lemon sales were $79.8 million and $78.1 million, in aggregate, on 4,271,000 and 3,992,000 cartons of lemons sold at average per carton prices of $18.68 and $19.56, respectively.

Lemon revenues in the first nine months of fiscal years 2022 and 2021 included shipping and handling of $19.0 million and $15.5 million, brokered fruit and other lemon sales of $11.5 million and $17.0 million, respectively, and lemon by-product sales of $3.1 million in both fiscal years.

The increase in the first nine months of fiscal year 2022 was primarily the result of increased volume and higher prices of avocados sold, compared to the same period of fiscal year 2021.

During the first nine months of fiscal years 2022 and 2021, 7,936,000 and 5,655,000 pounds of avocados were sold at an average per pound price of $2.13 and $1.20, respectively.

The increase in the first nine months of fiscal year 2022 was primarily the result of increased volume and higher prices of oranges sold, compared to the same period of fiscal year 2021.

In the first nine months of fiscal years 2022 and 2021, we sold 590,000 and 533,000 40-pound carton equivalents of oranges at an average per carton price of $12.25 and $8.40, respectively.

• Specialty citrus and other crops:

The decrease in the first six months of fiscal year 2022 was primarily the result of lower prices, partially offset by increased volume of specialty citrus sold, compared to the same period of fiscal year 2021.

During the first six months of fiscal years 2022 and 2021, we sold 305,000 and 243,000 40-pound carton equivalents of specialty citrus at an average per carton price of $7.45 and $12.44, respectively.

Other operations revenue in the first six months of fiscal years 2022 and 2021 was $2.6 million and $2.3 million, respectively.

The decrease in the first nine months of fiscal year 2022 was primarily the result of lower prices, partially offset by increased volume of specialty citrus sold, compared to the same period of fiscal year 2021.

During the first nine months of fiscal years 2022 and 2021, we sold 366,000 and 289,000 40-pound carton equivalents of specialty citrus at an average per carton price of $9.26 and $12.40, respectively.

Other operations revenue in the first nine months of fiscal years 2022 and 2021 was $3.9 million and $3.5 million, respectively.

Costs and Expenses

Our total costs and expenses in the first six months of fiscal year 2022 were $93.0 million, compared to $86.7 million in the same period of fiscal year 2021.

The 7% increase of $6.3 million was primarily attributable to increases in our packing costs, growing costs and third-party grower and supplier costs.

Our total costs and expenses in the first nine months of fiscal year 2022 were $140.9 million, compared to $132.4 million in the same period of fiscal year 2021.

The 6% increase of $8.4 million was primarily attributable to increases in our packing costs, harvest costs and selling, general and administrative expenses, partially offset by decreases in our growing costs.

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

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

2022 2021 Change

7 unchanged sentences

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

In the first six months of fiscal years 2022 and 2021, lemon packing costs were $22.2 million and $20.4 million, respectively.

During the first six months of fiscal years 2022 and 2021, we packed and sold 2,759,000 and 2,847,000 cartons of lemons at average per carton costs of $8.05 and $7.17, respectively.

Additionally, in the first six months of fiscal years 2022 and 2021, packing costs included $1.3 million and $1.6 million of shipping costs, respectively.

In the first nine months of fiscal years 2022 and 2021, lemon packing costs were $34.2 million and $29.7 million, respectively.

During the first nine months of fiscal years 2022 and 2021, we packed and sold 4,271,000 and 3,992,000 cartons of lemons at average per carton costs of $8.00 and $7.44, respectively.

Additionally, in the first nine months of fiscal years 2022 and 2021, packing costs included $1.8 million and $2.2 million of shipping costs, respectively.

• Harvest costs:

Harvest costs in the first six months of fiscal year 2022 were similar to the same period in fiscal year 2021.

Harvest costs increased in the first nine months of fiscal year 2022 primarily as a result of increased volume of lemons and avocados harvested compared to the same period in fiscal year 2021.

• Growing costs:

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

The increase in the first six months of fiscal year 2022 was primarily due to farm management decisions based on weather, harvest timing and crop conditions and inflation and supply chain issues.

The decrease in the first nine months of fiscal year 2022 was primarily due to the lease of Finca Santa Clara in Argentina, partially offset by increases related to farm management decisions based on weather, harvest timing and crop conditions.

• Third-party grower and supplier costs:

1 unchanged sentence

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

The increase in the first six months of fiscal year 2022 was partially due to increased volume of third-party grower fruit sold, compared to the same period of fiscal year 2021.

Of the 2,759,000 and 2,847,000 cartons of lemons packed and sold during the first six months of fiscal years 2022 and 2021, 1,488,000 (54%) and 1,394,000 (49%) were procured from third-party growers at average per carton prices of $13.00 and $13.70, respectively.

Additionally, in the first six months of fiscal years 2022 and 2021, we incurred $4.5 million and $2.5 million, respectively, of costs for purchased, packed fruit for resale.

The increase in the first nine months of fiscal year 2022 was primarily due to increased volume, partially offset by lower prices of third-party grower fruit sold, compared to the same period of fiscal year 2021.

Of the 4,271,000 and 3,992,000 cartons of lemons packed and sold during the first nine months of fiscal years 2022 and 2021, 2,183,000 (51%) and 2,048,000 (51%) were procured from third-party growers at average per carton prices of $12.81 and $14.08, respectively.

Additionally, in the first nine months of fiscal years 2022 and 2021, we incurred $11.5 million and $10.6 million, respectively, of costs for purchased, packed fruit for resale.

• Depreciation and amortization:

Depreciation and amortization expense for the first six months of fiscal years 2022 and 2021 was $4.4 million and $4.5 million, respectively.

Other operations expenses were $2.2 million in the first six months of fiscal years 2022 and 2021.

Selling, general and administrative costs and expenses were $11.7 million in the first six months of fiscal year 2022 compared to $11.1 million in the first six months of fiscal year 2021.

Depreciation and amortization expense for the first nine months of fiscal years 2022 and 2021 was $6.5 million and $6.6 million, respectively.

Other operations expenses were $3.3 million and $3.2 million in the first nine months of fiscal years 2022 and 2021, respectively.

Loss on disposal of assets, net was $0.5 million and zero in the first nine months of fiscal years 2022 and 2021, respectively.

Selling, general and administrative costs and expenses were $16.8 million in the first nine months of fiscal year 2022 compared to $15.2 million in the first nine months of fiscal year 2021.

The 11% increase of $1.6 million primarily consisted of the following:

• Named executive officer severance for the first six months of fiscal year 2022 was $0.7 million compared to zero in the same period of fiscal year 2021.

• Selling expenses for the first six months of fiscal year 2022 were $0.2 million higher than the same period of fiscal year 2021.

• Other selling, general and administrative expenses, including certain corporate overhead expenses, for the first six months of fiscal year 2022 were $0.4 million lower than the same period of fiscal year 2021.

• Salaries, benefits and incentive compensation for the first nine months of fiscal year 2022 were $1.1 million higher than the same period of fiscal year 2021.

• Named executive officer severance for the first nine months of fiscal year 2022 was $0.8 million compared to zero in the same period of fiscal year 2021.

• Other selling, general and administrative expenses, including certain corporate overhead expenses, for the first nine months of fiscal year 2022 were $0.3 million lower than the same period of fiscal year 2021.

Other (Expense) Income

Other income in the first six months of fiscal year 2022 was comprised primarily of $0.4 million of equity in earnings of investments, partially offset by $(0.4) million of net interest expense.

Other income in the first six months of fiscal year 2021 was comprised primarily of $1.0 million of equity in earnings of investments, partially offset by $(0.4) million of net interest expense.

We recorded an estimated income tax benefit of $1.9 million and $0.2 million in the first six months of fiscal years 2022 and 2021 on pre-tax loss of $7.0 million and $2.6 million, respectively.

The tax benefit recorded for the first six months of fiscal year 2022 differs from the U.S.

Other expense in the first nine months of fiscal year 2022 was comprised primarily of $(1.2) million of net interest expense, partially offset by $0.7 million of equity in earnings of investments.

Other income in the first nine months of fiscal year 2021 was comprised primarily of $2.5 million of equity in earnings of investments, partially offset by $(0.8) million of net interest expense.

We recorded an estimated income tax provision of $1.4 million and $1.1 million in the first nine months of fiscal years 2022 and 2021 on pre-tax income of $3.7 million and $1.9 million, respectively.

The tax provision recorded for the first nine months of fiscal year 2022 differs from the U.S.

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

Our projected annual effective blended tax rate for fiscal year 2022, excluding discrete items, is approximately 41.3%.

Net (Income) Loss Attributable to Noncontrolling Interest

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

Net Loss Attributable to Noncontrolling Interest

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

Segment Results of Operations

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

Three Months Ended April 30, 2022 Compared to the Three Months Ended April 30, 2021

The following table shows the segment results of operations for the three months ended April 30, 2022 (in thousands):

Three Months Ended July 31, 2022 Compared to the Three Months Ended July 31, 2021

The following table shows the segment results of operations 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

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

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

Packing Eliminations

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

For the second quarter of fiscal years 2022 and 2021, our fresh lemons segment total net revenues were $31.0 million and $32.6 million, respectively.

The 5% decrease of $1.6 million was primarily due to a net decrease in fresh lemon sales of $1.4 million.

For the third quarter of fiscal years 2022 and 2021, our fresh lemons segment total net

revenues were $33.8 million and $36.3 million, respectively.

The 7% decrease of $2.5 million was primarily due to a net decrease in brokered fruit and other lemon sales of $6.3 million, partially offset by increased fresh lemon sales of $3.4 million.

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

For the second quarter of fiscal years 2022 and 2021, our fresh lemons segment costs and expenses were $27.2 million and $28.6 million, respectively.

The 5% decrease of $1.4 million primarily consisted of the following:

• Harvest costs for the second quarter of fiscal year 2022 were $0.3 million lower than the same period of fiscal year 2021.

• Growing costs for the second quarter of fiscal year 2022 were $0.2 million lower than the same period of fiscal year 2021.

• Third-party grower and supplier costs for the second quarter of fiscal year 2022 were $0.8 million lower than the same period of fiscal year 2021.

• Transportation costs for the second quarter of fiscal year 2022 were $0.2 million lower than the same period of fiscal year 2021.

• Intersegment costs and expenses for the second quarter of fiscal year 2022 were $0.1 million higher than the same period of fiscal year 2021.

For the third quarter of fiscal years 2022 and 2021, our fresh lemons segment costs and expenses were $32.6 million and $31.8 million, respectively.

The 2% increase of $0.8 million primarily consisted of the following:

• Harvest costs for the third quarter of fiscal year 2022 were $2.2 million higher than the same period of fiscal year 2021.

• Growing costs for the third quarter of fiscal year 2022 were $1.7 million lower than the same period of fiscal year 2021.

• Third-party grower and supplier costs for the third quarter of fiscal year 2022 were $2.3 million lower than the same period of fiscal year 2021.

• Intersegment costs and expenses for the third quarter of fiscal year 2022 were $2.5 million higher than the same period of fiscal year 2021.

Lemon Packing

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

For the second quarter of fiscal years 2022 and 2021, our lemon packing segment total net revenues were $16.1 million and $15.4 million, respectively.

The 5% increase of $0.7 million was primarily due to increased price per carton of lemons packed.

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

For the third quarter of fiscal years 2022 and 2021, our lemon packing segment total net revenues were $16.0 million and $11.7 million, respectively.

The 37% increase of $4.3 million was primarily due to increased volume of lemons packed and sold.

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

For the second quarter of fiscal years 2022 and 2021, our lemon packing costs and expenses were $11.7 million and $10.9 million, respectively.

The 7% increase of $0.8 million was primarily due to increased costs of labor and benefits, cardboard cartons, fruit treatments and packaging and shipping supplies from inflation and supply chain issues.

For the second quarter of fiscal years 2022 and 2021, lemon packing segment operating income per carton sold was $2.87 and $2.95, respectively.

In the second quarter of fiscal years 2022 and 2021, the lemon packing segment included $9.4 million and $9.3 million, respectively, of intersegment revenues that were charged to the fresh lemons segment to pack lemons for sale.

For the third quarter of fiscal years 2022 and 2021, our lemon packing costs and expenses were $12.0 million and $9.3 million, respectively.

The 29% increase of $2.7 million was primarily due to increased volume of lemons packed and sold.

For the third quarter of fiscal years 2022 and 2021, lemon packing segment operating income per carton sold was $2.70 and $2.14, respectively.

In the third quarter of fiscal years 2022 and 2021, the lemon packing segment included $9.7 million and $7.2 million, respectively, of intersegment revenues that were charged to the fresh lemons segment to pack lemons for sale.

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

For the second quarter of fiscal year 2022 and 2021, our avocados segment had revenues of $3.6 million and $2.7 million, respectively.

For the third quarter of fiscal year 2022 and 2021, our avocados segment had revenues of $12.6 million and $4.1 million, respectively.

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

For the second quarter of fiscal years 2022 and 2021, our avocados segment costs and expenses were $2.1 million and $1.4 million, respectively.

For the third quarter of fiscal years 2022 and 2021, our avocados segment costs and expenses were $3.2 million and $2.7 million, respectively.

The increase of $0.4 million primarily consisted of the following:

• Harvest costs for the second quarter of fiscal year 2022 were $0.1 million higher than the same period of fiscal year 2021.

• Growing costs for the second quarter of fiscal year 2022 were $0.5 million higher than the same period of fiscal year 2021.

• Harvest costs for the third quarter of fiscal year 2022 were $0.8 million higher than the same period of fiscal year 2021.

• Growing costs for the third quarter of fiscal year 2022 were $0.4 million lower than the same period of fiscal year 2021.

Other Agribusiness

For the second quarter of fiscal years 2022 and 2021, our other agribusiness segment total net revenues were $4.1 million and $2.6 million, respectively.

For the third quarter of fiscal years 2022 and 2021, our other agribusiness segment total net revenues were $4.9 million and $3.0 million, respectively.

The 59% increase of $1.8 million primarily consisted of the following:

• Orange revenues for the second quarter of fiscal year 2022 were $1.2 million higher than the same period of fiscal year 2021.

• Specialty citrus and other crops revenues for the second quarter of fiscal year 2022 were $0.3 million higher compared to the same period of fiscal year 2021.

• Orange revenues for the third quarter of fiscal year 2022 were $1.8 million higher than the same period of fiscal year 2021.

• Specialty citrus and other crops revenues for the third quarter of fiscal year 2022 were $0.1 million higher than the same period of fiscal year 2021.

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

For the second quarter of fiscal years 2022 and 2021, our other agribusiness costs and expenses were $3.8 million and $2.5 million, respectively.

The 53% increase of $1.3 million primarily consisted of the following:

• Harvest costs for the second quarter of fiscal year 2022 were $0.2 million higher than the same period of fiscal year 2021.

• Growing costs for the second quarter of fiscal year 2022 were $1.0 million higher than the same period of fiscal year 2021

• Purchased fruit costs for the second quarter of fiscal year 2022 were $0.1 million higher than the same period of fiscal year 2021.

Total agribusiness depreciation and amortization expenses for the second quarter of fiscal year 2022 were $0.1 million lower than the same period of fiscal year 2021.

For the third quarter of fiscal years 2022 and 2021, our other agribusiness costs and expenses were $1.3 million and $2.0 million, respectively.

The 35% decrease of $0.7 million primarily consisted of the following:

• Harvest costs for the third quarter of fiscal year 2022 were $0.2 million lower than the same period of fiscal year 2021.

• Growing costs for the third quarter of fiscal year 2022 were $0.5 million lower than the same period of fiscal year 2021.

• Purchased fruit costs for the third quarter of fiscal year 2022 were $0.1 million higher than the same period of fiscal year 2021.

Total agribusiness depreciation and amortization expenses for the third quarter of fiscal year 2022 were $0.1 million higher than the same period of fiscal year 2021.

Corporate and Other

Our corporate and other operations had revenues of $1.4 million and $1.1 million for the second quarter of fiscal years 2022 and 2021, respectively.

Costs and expenses in our corporate and other operations for the second quarter of fiscal years 2022 and 2021 were approximately $6.3 million and $6.0 million, respectively, and include selling, general and administrative costs and expenses not allocated to the operating segments.

Depreciation and amortization expenses for the second quarter of fiscal years 2022 and 2021 were similar at $0.3 million.

Six Months Ended April 30, 2022 Compared to the Six Months Ended April 30, 2021

The following table shows the segment results of operations for the six months ended April 30, 2022 (in thousands):

Our corporate and other operations had revenues of $1.3 million and $1.2 million for the third quarter of fiscal years 2022 and 2021, respectively.

Costs and expenses in our corporate and other operations for the third quarter of fiscal years 2022 and 2021 were approximately $6.1 million and $4.7 million, respectively, and include selling, general and administrative costs and expenses not allocated to the operating segments.

Depreciation and amortization expenses for the third quarter of fiscal years 2022 and 2021 were similar at $0.3 million.

Nine Months Ended July 31, 2022 Compared to the Nine Months Ended July 31, 2021

The following table shows the segment results of operations for the nine months ended July 31, 2022 (in thousands):

Packing Eliminations

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

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

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

Packing Eliminations

10 unchanged sentences

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

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

For the first six months of fiscal years 2022 and 2021, our fresh lemons segment total net revenues were $60.6 million and $61.9 million, respectively.

The 2% decrease of $1.3 million was primarily due to a decrease in fresh lemon sales of $1.7 million.

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

For the first nine months of fiscal years 2022 and 2021, our fresh lemons segment total net revenues were $94.4 million and $98.2 million, respectively.

The 4% decrease of $3.8 million was primarily due to a decrease in brokered fruit and other lemon sales of $5.5 million, partially offset by increased fresh lemon sales of $1.7 million.

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

For the first six months of fiscal years 2022 and 2021, our fresh lemons segment costs and expenses were $59.4 million and $58.1 million, respectively.

For the first nine months of fiscal years 2022 and 2021, our fresh lemons segment costs and expenses were $92.0 million and $90.0 million, respectively.

The 2% increase of $2.0 million primarily consisted of the following:

• Harvest costs for the first six months of fiscal year 2022 were $0.4 million higher than the same period of fiscal year 2021.

• Growing costs for the first six months of fiscal year 2022 were $0.4 million lower than the same period of fiscal year 2021.

• Third-party grower and supplier costs for the first six months of fiscal year 2022 were $1.5 million higher than the same period of fiscal year 2021.

• Transportation costs for the first six months of fiscal year 2022 were $0.3 million lower than the same period of fiscal year 2021.

• Harvest costs for the first nine months of fiscal year 2022 were $2.6 million higher than the same period of fiscal year 2021.

• Growing costs for the first nine months of fiscal year 2022 were $2.0 million lower than the same period of fiscal year 2021.

• Third-party grower and supplier costs for the first nine months of fiscal year 2022 were $0.7 million lower than the same period of fiscal year 2021.

• Transportation costs for the first nine months of fiscal year 2022 were $0.4 million lower than the same period of fiscal year 2021.

• Intersegment costs and expenses for the first nine months of fiscal year 2022 were $2.5 million higher than the same period of fiscal year 2021.

Lemon Packing

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

For the first six months of fiscal years 2022 and 2021, our lemon packing segment total net revenues were $28.7 million and $27.0 million, respectively.

The 6% increase of $1.7 million was primarily due to increased price per carton of lemons packed.

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

For the first nine months of fiscal years 2022 and 2021, our lemon packing segment total net revenues were $44.7 million and $38.7 million, respectively.

The 16% increase of $6.0 million was primarily due to increased volume of lemons packed and sold.

For the first six months of fiscal years 2022 and 2021, our lemon packing costs and expenses were $22.2 million and $20.4 million, respectively.

The 9% increase of $1.8 million was primarily due to increased costs of labor and benefits, cardboard cartons, fruit treatments and packaging and shipping supplies from inflation and supply chain issues.

For the first six months of fiscal years 2022 and 2021, lemon packing segment operating income per carton sold was $2.34 and $2.30, respectively.

In the first six months of fiscal years 2022 and 2021, the lemon packing segment included $16.0 million of intersegment revenues that were charged to the fresh lemons segment to pack lemons for sale.

For the first nine months of fiscal years 2022 and 2021, our lemon packing costs and expenses were $34.2 million and $29.7 million, respectively.

The 15% increase of $4.5 million was primarily due to increased volume of lemons packed and sold.

For the first nine months of fiscal years 2022 and 2021, lemon packing segment operating income per carton sold was $2.47 and $2.26, respectively.

In the first nine months of fiscal years 2022 and 2021, the lemon packing segment included $25.7 million and $23.2 million, respectively, of intersegment revenues that were charged to the fresh lemons segment to pack lemons for sale.

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

For the first six months of fiscal years 2022 and 2021, our avocados segment had revenues of $4.3 million and $2.7 million, respectively.

For the first nine months of fiscal years 2022 and 2021, our avocados segment had revenues of $16.9 million and $6.8 million, respectively.

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

For the first six months of fiscal years 2022 and 2021, our avocados segment costs and expenses were $2.4 million and $1.4 million, respectively.

For the first nine months of fiscal years 2022 and 2021, our avocados segment costs and expenses were $5.5 million and $4.1 million, respectively.

The increase of $1.4 million primarily consisted of the following:

• Harvest costs for the first six months of fiscal year 2022 were $0.2 million higher than the same period of fiscal year 2021.

• Growing costs for the first six months of fiscal year 2022 were $0.8 million higher than the same period of fiscal year 2021.

• Harvest costs for the first nine months of fiscal year 2022 were $1.0 million higher than the same period of fiscal year 2021.

• Growing costs for the first nine months of fiscal year 2022 were $0.4 million higher than the same period of fiscal year 2021.

Other Agribusiness

For the first six months of fiscal years 2022 and 2021, our other agribusiness segment total net revenues were $5.8 million and $5.5 million, respectively.

For the first nine months of fiscal years 2022 and 2021, our other agribusiness segment total net revenues were $10.7 million and $8.6 million, respectively.

The 24% increase of $2.1 million primarily consisted of the following:

• Orange revenues for the first six months of fiscal year 2022 were $1.0 million higher than the same period of fiscal year 2021.

• Specialty citrus and other crops revenues for the first six months of fiscal year 2022 were $0.7 million lower compared to the same period of fiscal year 2021.

• Orange revenues for the first nine months of fiscal year 2022 were $2.8 million higher than the same period of fiscal year 2021.

• Specialty citrus and other crops revenues for the first nine months of fiscal year 2022 were $0.7 million lower than the same period of fiscal year 2021.

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

For the first six months of fiscal years 2022 and 2021, our other agribusiness costs and expenses were $6.4 million and $4.9 million, respectively.

For the first nine months of fiscal years 2022 and 2021, our other agribusiness costs and expenses were $7.7 million and $6.8 million, respectively.

The 13% increase of $0.9 million primarily consisted of the following:

• Harvest costs for the first six months of fiscal year 2022 were $0.2 million lower than the same period of fiscal year 2021.

• Growing costs for the first six months of fiscal year 2022 were $1.0 million higher than the same period of fiscal year 2021.

• Purchased fruit costs for the first six months of fiscal year 2022 were $0.7 million higher than the same period of fiscal year 2021.

Total agribusiness depreciation and amortization expenses for the first six months of fiscal year 2022 were $0.1 million lower than the same period of fiscal year 2021.

• Harvest costs for the first nine months of fiscal year 2022 were $0.4 million lower than the same period of fiscal year 2021.

• Growing costs for the first nine months of fiscal year 2022 were $0.5 million higher than the same period of fiscal year 2021.

• Purchased fruit costs for the first nine months of fiscal year 2022 were $0.8 million higher than the same period of fiscal year 2021.

Total agribusiness depreciation and amortization expenses for the first nine months of fiscal year 2022 were similar to the same period of fiscal year 2021.

Corporate and Other

Our corporate and other operations had revenues of $2.6 million and $2.3 million for the first six months of fiscal years 2022 and 2021, respectively.

Costs and expenses in our corporate and other operations for the first six months of fiscal years 2022 and 2021 were approximately $13.6 million and $12.7 million, respectively, and include selling, general and administrative costs and expenses not allocated to the operating segments.

Depreciation and amortization expenses for the first six months of fiscal years 2022 and 2021 were similar at $0.6 million.

Our corporate and other operations had revenues of $3.9 million and $3.5 million for the first nine months of fiscal years 2022 and 2021, respectively.

Costs and expenses in our corporate and other operations for the first nine months of fiscal years 2022 and 2021 were approximately $19.7 million and $17.4 million, respectively, and include selling, general and administrative costs and expenses not allocated to the operating segments.

Depreciation and amortization expenses for the first nine months of fiscal years 2022 and 2021 were similar at $0.9 million.

Seasonal Operations

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

Results of Operations for the Trailing Twelve Months Ended April 30, 2022 and 2021

Results of Operations for the Trailing Twelve Months Ended July 31, 2022 and 2021

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

Trailing Twelve Months Ended April 30,

Trailing Twelve Months Ended July 31,

Net revenues:

Agribusiness $ 173,347 $ 157,708

Other operations 5,095 4,597

Total revenues 168,644 166,739

Total net revenues 178,442 162,305

Costs and expenses:

5 unchanged sentences

Operating loss (2,362) (9,405)

Other income:

Other (expense) income:

Interest income 154 641

2 unchanged sentences

Other income, net 112 56

Total other income 1,540 765

Total other (expense) income (13) 1,145

Loss before income tax benefit (2,375) (8,260)

1 unchanged sentence

Net loss (2,372) (6,764)

Loss attributable to noncontrolling interest 405 734

(Income) loss attributable to noncontrolling interest (78) 760

Net loss attributable to Limoneira Company $ (2,450) $ (6,004)

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

• Total revenues increased $1.9 million in the twelve months ended April 30, 2022 compared to the twelve months ended April 30, 2021 primarily due to increased agribusiness revenues, particularly increased lemon sales.

• Total costs and expenses increased $1.0 million in the twelve months ended April 30, 2022 compared to the twelve months ended April 30, 2021, primarily due to increases in our agribusiness costs, partially offset by decreases in selling, general and administrative expenses.

The increase in agribusiness costs is primarily attributable to increased costs of growing and third-party grower and supplier fruit, partially offset by decreased packing and harvest costs.

The decrease in selling, general and administrative expenses is primarily attributable to decreased corporate expenses associated with our strategic initiatives.

• Total other income increased $0.8 million in the twelve months ended April 30, 2022 compared to the twelve months ended April 30, 2021 primarily due to increased equity in earnings of investments.

• Income tax benefit decreased $0.1 million in the twelve months ended April 30, 2022 compared to the twelve months ended April 30, 2021 primarily due to the decrease in pre-tax loss of $1.7 million.

• Total revenues increased $16.1 million in the twelve months ended July 31, 2022 compared to the twelve months ended July 31, 2021, primarily due to increased agribusiness revenues, particularly increased avocado sales.

• Total costs and expenses increased $9.1 million in the twelve months ended July 31, 2022 compared to the twelve months ended July 31, 2021, primarily due to increases in our agribusiness costs.

• Total other income decreased $1.2 million in the twelve months ended July 31, 2022 compared to the twelve months ended July 31, 2021, primarily due to decreased equity in earnings of investments.

• Income tax benefit decreased $1.5 million in the twelve months ended July 31, 2022 compared to the twelve months ended July 31, 2021, primarily due to the decrease in pre-tax loss of $5.9 million.

Liquidity and Capital Resources

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In fiscal year 2021, we decided to terminate the Plan effective December 31, 2021.

The liabilities disclosed as of April 30, 2022, reflect an estimate of the additional cost to pay lump sums to a portion of the active and vested terminated participants and purchase annuities for all remaining participants from an insurance company.

See Note 10 - Long-Term Debt, Note 11 - Leases and Note 15 - Retirement Plans to the consolidated financial statements in this Quarterly Report on Form 10-Q for amounts outstanding as of April 30, 2022, related to debt, leases and the Plan.

The liabilities disclosed as of July 31, 2022, reflect an estimate of the additional cost to pay lump sums to a portion of the active and vested terminated participants and purchase annuities for all remaining participants from an insurance company.

See Note 10 - Long-Term Debt, Note 11 - Leases and Note 15 - Retirement Plans to the consolidated financial statements in this Quarterly Report on Form 10-Q for amounts outstanding as of July 31, 2022, related to debt, leases and the Plan.

Purchase obligations consist of contracts primarily related to packing supplies and pollination services, the majority of which are due in the next three years.

2 unchanged sentences

Cash Flows from Operating Activities

For the six months ended April 30, 2022, net cash used in operating activities was $1.2 million, compared to net cash provided by operating activities of $4.6 million for the six months ended April 30, 2021.

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

• Net loss for the six months ended April 30, 2022 and 2021 was $5.0 million and $2.4 million, respectively.

The components of net loss in the six months ended April 30, 2022, compared to the net loss in the same period in fiscal year 2021 consist of an increase in operating loss of $3.7 million, a decrease in total other income of $0.6 million and an increase in income tax benefit of $1.7 million.

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

◦ Provided $5.0 million and $6.0 million in the six months ended April 30, 2022 and 2021, respectively, primarily due to depreciation and amortization, stock compensation expense and deferred income taxes.

◦ Changes in operating assets and liabilities (used) provided $(1.1) million and $1.1 million of operating cash in the six months ended April 30, 2022 and 2021, respectively, primarily due to accounts receivables/other from related parties, cultural costs, prepaid expenses and other current assets and accrued liabilities and payables to related parties.

For the nine months ended July 31, 2022, net cash provided by operating activities was $10.9 million, compared to net cash provided by operating activities of $16.8 million for the nine months ended July 31, 2021.

The significant components of our cash flows provided by operating activities were as follows:

• Net income for the nine months ended July 31, 2022 and 2021 was $2.3 million and $0.8 million, respectively.

The components of net income in the nine months ended July 31, 2022, compared to the net income in the same period in fiscal year 2021 consist of an increase in operating income of $4.0 million, a decrease in total other income of $2.2 million and an increase in income tax expense of $0.3 million.

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

◦ Adjustments provided $11.9 million and $8.7 million in the nine months ended July 31, 2022 and 2021, respectively, primarily due to depreciation and amortization, stock compensation expense and deferred income taxes.

◦ Changes in operating assets and liabilities (used) provided $(3.3) million and $7.3 million of operating cash in the nine months ended July 31, 2022 and 2021, respectively, primarily due to accounts receivables/other from related parties, cultural costs, prepaid expenses and other current assets and accrued liabilities and payables to related parties.

Cash Flows from Investing Activities

For the six months ended April 30, 2022 and 2021, net cash used in investing activities was $0.4 million and $5.5 million, respectively.

• Capital expenditures were $4.1 million in the six months ended April 30, 2022, comprised of $3.9 million for property, plant and equipment primarily related to orchard development and $0.2 million for real estate development projects.

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

For the nine months ended July 31, 2022 and 2021, net cash used in investing activities was $5.3 million and $8.7 million, respectively.

• Capital expenditures were $7.7 million in the nine months ended July 31, 2022, comprised of $7.3 million for property, plant and equipment primarily related to orchard development and $0.4 million for real estate development projects.

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

Cash Flows from Financing Activities

For the six months ended April 30, 2022 and 2021, net cash provided by financing activities was $2.3 million and $1.9 million, respectively.

• The $2.3 million of cash provided by financing activities during the six months ended April 30, 2022 was primarily comprised of net borrowings of long-term debt in the amount of $6.5 million, partially offset by common and preferred dividends, in aggregate, of $2.9 million and the exchange of common stock of $1.1 million.

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

For the nine months ended July 31, 2022 and 2021, net cash used in financing activities was $4.8 million and $7.8 million, respectively.

• The $4.8 million of cash used in financing activities during the nine months ended July 31, 2022 was primarily comprised of common and preferred dividends, in aggregate, of $4.4 million, the exchange of common stock of $1.1 million and proceeds from equipment financings of $1.0 million.

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

Transactions Affecting Liquidity and Capital Resources

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

As of April 30, 2022, our outstanding borrowings under the Farm Credit West Credit Facility and RELOC were $119.1 million and we had $10.9 million of availability.

As of July 31, 2022, our outstanding borrowings under the Farm Credit West Credit Facility and RELOC were $113.0 million and we had $17.0 million of availability.

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

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The holders of the Series B Convertible Preferred Stock (the “Series B Stock”) and the Series B-2 Preferred Stock (the “Series B-2 Preferred Stock”) are entitled to receive cumulative cash dividends.

Such preferred dividends paid were $0.3 million in the six months ended April 30, 2022 and 2021, respectively.

Cash dividends declared in the six months ended April 30, 2022 and 2021 were $0.15 per common share and such dividends paid were $2.7 million in the six months ended April 30, 2022 and 2021.

Such preferred dividends paid were $0.4 million in the nine months ended July 31, 2022 and 2021, respectively.

Cash dividends declared in the nine months ended July 31, 2022 and 2021 were $0.23 per common share and such dividends paid were $4.0 million in the nine months ended July 31, 2022 and 2021.

Off-Balance Sheet Arrangements

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Actual results may materially differ from these estimates under different assumptions or conditions as new or additional information become available in future periods.

During the six months ended April 30, 2022, our critical accounting policies and estimates have not changed since the filing of our Annual Report on Form 10-K as of October 31, 2021.

During the nine months ended July 31, 2022, our critical accounting policies and estimates have not changed since the filing of our Annual Report on Form 10-K as of October 31, 2021.

Please refer to that filing for a description of our critical accounting policies and estimates.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis