What changed in this filing

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Item 1. Business

2022-12-22 compared with 2022-01-10 · 118 added, 106 removed, 242 unchanged (48% of the section changed)

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

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

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

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

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Our current operations consist of fruit production, sales and marketing, rental operations, real estate and capital investment activities.

Agribusiness activities are performed through these four reporting segments:

We are one of California’s oldest citrus growers.

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We have agricultural plantings throughout Ventura, Tulare, San Luis Obispo and San Bernardino Counties in California, Yuma County in Arizona, La Serena, Chile and Jujuy, Argentina, which collectively consist of approximately 5,600 acres of lemons, 900 acres of avocados, 1,000 acres of oranges and 1,000 acres of specialty citrus and other crops.

We also operate our own packinghouses in Santa Paula and Oxnard, California and Yuma, Arizona, where we process, pack and sell lemons that we grow, as well as lemons grown by others.

We also operate our own packinghouses in Santa Paula, California and Yuma, Arizona, where we process, pack and sell lemons that we grow, as well as lemons grown by others.

We have a 47% interest in Rosales S.A.

(“Rosales”), a citrus packing, marketing and sales business, a 90% interest in Fruticola Pan de Azucar S.A.

(“PDA”), a lemon and orange orchard and 100% interest in Agricola San Pablo SpA.

(“PDA”), a lemon and orange orchard and a 100% interest in Agricola San Pablo SpA.

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

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For more than 100 years, we have been making strategic investments in California agriculture and real estate.

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

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

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

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

Fiscal Year 2022 Highlights and Recent Developments

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

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

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

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

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

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

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

These assets consist of packing supplies and certain intangible assets related to

the packing, marketing, and selling business of Trapani Fresh.

The total consideration to be received is approximately $3.9 million over an 8-year term in 16 equal installments.

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

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

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

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

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

The MLA governs the terms of the Supplements.

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

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

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

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

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

In September 2021, the Board of Directors of our Company approved a share repurchase program authorizing us to repurchase up to $10.0 million of our outstanding shares of common stock through September 2022.

No shares have been repurchased under this program.

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

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 October 31, 2022.

In October 2022, we entered

into a joint venture with Lewis for the development of our 17-acre East Area I Retained Property (“Retained Property”).

We formed LLCB II, LLC ("LLCB II") as the development entity, contributed our Retained Property to the joint venture and sold a 50% interest to Lewis for $8.0 million.

We recorded a gain on the transaction of approximately $4.7 million, of which $0.5 million was deferred.

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

In connection with the closing, we amended LLCB’s Limited Liability Company Agreement to provide that LLCB is to include the processing of final approval for additional residential units to be developed and constructed on the Retained Property.

For further information see Note 5 – Real Estate Development.

In September 2021, we signed a Memorandum of Understanding with Wileman Bros.

& Elliott, Inc.

("Wileman"), to form an alliance to sell their combined citrus volumes under Limoneira's One World of Citrus trademark.

Wileman is a 95-year-old citrus business located in California’s Central Valley with a focus on oranges, mandarins and specialty citrus.

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

In January 2022, we were notified of Alex M.

Teague’s decision to retire as Senior Vice President and Chief Operating Officer of our Company, effective February 1, 2022.

In connection with his retirement, we entered into a separation agreement with Mr.

Teague whereas, (i) Mr.

Teague was paid one year of his annual base salary, which was paid in one lump sum within 90 business days of January 12, 2022;

(ii) 23,999 shares of our common stock granted to Mr.

Teague pursuant to the Limoneira Company Omnibus Incentive Plan fully vested;

and (iii) Mr.

Teague received certain other benefits as set forth in the agreement.

In fiscal year 2022, Mr.

Teague received $0.4 million cash severance and $0.3 million accelerated vesting of stock-based compensation.

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 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 $0.4 million, payable in five equal, monthly installments from August 2022 through December 2022.

We expect to extend the lease agreement for an additional year.

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

("Associated") 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.

In October 2022, we sold our Oxnard Lemon property and packing facility located in Ventura County, California.

We received net proceeds of $19.1 million and recognized a gain of approximately $0.8 million.

Concurrent with the closing of the sale, we entered into a lease agreement to continue our use of the property as a lessee for a period of 36 months from the closing date, with extension options for an additional 24 months.

On December 20, 2022, we declared a cash dividend of $0.075 per common share payable on January 13, 2023, in the aggregate amount of $1.3 million to stockholders of record as of January 3, 2023.

In fiscal year 2020, we entered into an agreement to sell our Sevilla property for $2.7 million, which closed on November 30, 2022.

We received net proceeds of $2.6 million and recorded an immaterial loss in the first quarter of fiscal year 2023.

COVID-19 Pandemic

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

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

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

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 October 31, 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 and all of fiscal year 2021.

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

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

The COVID-19 pandemic may impact our sales and profitability in future periods.

Risk Factors of this Annual

Notwithstanding the adverse impacts and subject to unforeseen changes that may arise as the COVID-19 pandemic continues, we currently expect improvement in fiscal year 2023 compared to fiscal year 2022.

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

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

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

Our management team is actively monitoring the impacts of the COVID-19 pandemic and may take further actions altering our business operations that we determine are in the best interests of our employees and customers or as required by federal, state, or local authorities, the full impact of the COVID-19 pandemic on our results of operations, financial condition, or liquidity for fiscal year 2022 and beyond cannot be fully estimated at this point.

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

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

economy and the ongoing business operations of our customers.

The ongoing impact of the COVID-19 pandemic on our results of operations, financial condition, or liquidity for fiscal year 2023 and beyond cannot be fully estimated at this point.

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

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

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

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

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

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Because of superior eating quality, the Hass avocado has contributed greatly to the avocado’s growing popularity through its retail, restaurant and other food service uses.

Approximately 95% of our avocado plantings are of the Hass variety.

Approximately

95% of our avocado plantings are of the Hass variety.

The storage life of fresh avocados generally ranges from one to four weeks, depending upon the maturity of the fruit, the growing methods used and the handling conditions in the distribution chain.

We provide a majority of our avocado production to Calavo, a packing and marketing company listed on the NASDAQ Global Select Market under the symbol CVGW.

Calavo’s customers include many of the largest retail and food service companies in the United States and Canada.

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

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

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

Through fiscal year 2021, the Company sold the majority of its avocado production to Calavo Growers, Inc.

(“Calavo”), a packing and marketing company listed on the NASDAQ Global Select Market under the symbol CVGW.

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

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

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

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

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

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

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In addition, we may acquire agricultural property with existing productive orchards or without productive orchards, which would require new orchard plantings.

The fruit varieties that we grow are typically non-producing for approximately the first four years after planting.

The fruit varieties that we grow are typically non-producing for approximately the first four to five years after the year of planting.

Orchards may continue producing fruit longer than their depreciable lives.

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Lemon Packing and Sales

We are the oldest continuous lemon packing operation in North America.

We are one of the oldest continuous lemon packing operations in North America.

We pack and sell lemons grown by us as well as lemons grown by others, the operations of which are included in our financial statements under the lemon packing segment.

Lemons delivered to our packinghouses in Santa Paula and Oxnard, California and Yuma, Arizona are sized, graded, cooled, ripened and packed for delivery to customers.

Lemons delivered to our packinghouse in Santa Paula, California and Yuma, Arizona are sized, graded, cooled, ripened and packed for delivery to customers.

Our ability to accurately estimate the size, grade and timing of the delivery of the annual lemon crop has a substantial impact on both our costs and the sales price we receive for the fruit.

A significant portion of the costs related to our lemon packing operation is fixed.

Our strategy for growing the profitability of our lemon packing operations calls for optimizing the percentage of a crop that goes to the fresh market, or fresh utilization, and procuring a larger percentage of the California and Arizona lemon crop.

We invest considerable time and research into refining and improving our lemon packing through innovation and are continuously searching for new techniques to refine how premium lemons are delivered to our consumers.

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

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

Rental Operations Summary

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

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

We also own several commercial office buildings and as with our residential housing units, these properties generate reliable cash flows that we use to partially fund the operating costs of our business.

We own and maintain 257 residential housing units located mainly in Ventura and Tulare Counties in California that we lease to employees, former employees and non-employees.

We also own several commercial office buildings.

These properties generate reliable cash flows that we use to partially fund the operating cost's of our business.

As of October 31, 2022, we lease approximately 500 acres of our land to third-party agricultural tenants who grow a variety of row crops.

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We also partner with one of our tenants and have an organic recycling facility on our land in Ventura County.

Effective November 1, 2021, we also lease our 1,200 acre Santa Clara ranch in Argentina.

Real Estate Development Summary

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Our goal is to redeploy real estate earnings and cash flow into the expansion of our agribusiness and other income producing real estate.

For real estate development projects and joint ventures, it is not unusual for the timing and amounts of revenues and costs, partner contributions and distributions, project loans, other financing assumptions and project cash flows to be impacted by government approvals, project revenue and cost estimates and assumptions, economic conditions, financing sources and product demand as well as other factors.

impacted by government approvals, project revenue and cost estimates and assumptions, economic conditions, financing sources and product demand as well as other factors.

Such factors could affect our results of operations, cash flows and liquidity.

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Our current real estate developments include developable land parcels, multi-family housing and single-family homes with approximately 900 units in various stages of planning and development.

The following is a summary of each of the strategic agricultural and development real estate investment properties in which we own an interest:

The following is a summary of each of the strategic real estate investment properties in which we own an interest:

East Area I - Santa Paula, California.

East Area I consists of 523 acres that we historically used as agricultural land and is located in Santa Paula approximately ten miles from the City of Ventura and the Pacific Ocean.

This property is also known as our Teague McKevett Ranch.

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

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

of East Area I into Santa Paula.

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

This property was formerly known as our Teague McKevett Ranch.

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

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

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

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

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

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

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

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

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

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

A total of 586 residential units have closed from the project's inception to October 31, 2022.

In October 2022, we entered into another joint venture with Lewis for the development of our 17-acre East Area I Retained Property (“Retained Property”), which is located within the East Area I property.

We formed LLCB II, LLC as the development entity, contributed our Retained Property to the joint venture and sold a 50% interest to Lewis for approximately $8.0 million.

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

Since inception, each partner has made funding contributions of $21.4 million to LLCB.

We expect to receive approximately $115.0 million from LLCB and LLCB II over the seven remaining years of the projects, including the $8.0 million received in fiscal year 2022.

East Area II - Santa Paula, California.

Our design associates and we are in the process of formulating plans for East Area II, a parcel of approximately 30 acres adjacent to East Area I.

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

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As of October 31, 2022, we were invested in one entitled development parcel, Sevilla, located in Santa Maria in Santa Barbara County, California.

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

In fiscal year 2020, we entered into an agreement to sell our Sevilla property for $2.7 million, which closed in the first quarter of fiscal year 2023.

Markets and Competitive Strengths

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• A significant amount of our agribusiness property was acquired many years ago, which results in a low-cost basis and associated expenses.

• In our fresh lemons and lemon packing segments, our integrated business model with respect to growing, packing, marketing and selling lemons allows us to better serve our customers.

• In our fresh lemons and lemon packing segments, our integrated business model with respect to growing, packing, marketing and selling citrus allows us to better serve our customers.

• Our lemon packing operations provide marketing opportunities with other citrus companies and their respective products.

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

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

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

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

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

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Business Strategy

We are an agribusiness and real estate development company that generates annual cash flows to support investments in agricultural and real estate development activities.

As our agricultural and real estate development investments are monetized, we intend to seek to expand our agribusiness into new regions and markets and invest in cash-producing residential, commercial and industrial rental assets.

We are an agribusiness and real estate development company that generates revenue and annual cash flows to support investments in agricultural efficiencies and acquisitions and real estate development activities.

As our agricultural and non-strategic real estate development investments are monetized, we intend to use the cash flow to reduce existing debt, fund acquisitions, invest in farming efficiencies and expand packing capacities through our One World of Citrus Asset Light Business Model.

We will also use more third-party grower and supplier fruit to reduce the impact of pricing volatility and rising farming costs.

We believe the asset-lighter model will enable us to achieve revenue and cash flow growth by reducing investment risk in North and South America, generating more stable and higher growth in cash flow and earnings, and improving our annual return on invested capital.

The following describes the key elements of our business strategy.

With respect to our agribusiness operations, key elements of our strategy are:

• Acquire Additional Lemon Producing Properties .

To the extent attractive opportunities arise and our capital availability permits, we intend to consider the acquisition of additional lemon producing properties.

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

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

• Expand our One World of Citrus Asset Light Business Model in three main channels:

◦ Growing, packing, marketing and distributing fruit grown on our properties;

◦ Utilizing third-party fruit by packing, marketing and distributing their fruit through Limoneira channels;

◦ Marketing and distributing brokered fruit.

We intend to strategically sell certain assets to reduce existing debt, fund acquisitions, increase farming efficiencies and expand packing capabilities.

Increased volume of fruit sales is expected to be fueled by sourcing from third-party growers and suppliers, thus mitigating the volatility that commodity pricing has on growers.

• Expand our Sources of Lemon Supply.

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

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

In addition to our lemon production in California and Arizona and lemons we acquire from domestic

third-party growers and suppliers, we have expanded our lemon supply sources to international markets such as Mexico, Chile and Argentina.

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

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

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

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

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

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

• Expand International Production and Marketing of Lemons .

• Expand International Sales and Marketing of Lemons .

We estimate that we currently have approximately 10% of the fresh lemon market in the United States and a larger share of the United States lemon export market.

We intend to explore opportunities to expand our international production and marketing of lemons.

We intend to explore opportunities to expand our international sales and marketing of lemons.

We have the ability to supply a wide range of customers and markets and, because we produce high quality lemons, we can export our lemons to international customers, which many of our competitors are unable to supply.

• Construction of an Updated Lemon Packinghouse .

Over the years, new machinery and equipment along with upgrades have been added to our original packinghouse and cold storage facilities.

This, along with an aggressive and proactive maintenance program, has allowed us to operate an efficient, competitive lemon packing facility.

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

This project has increased fresh lemon processing capacity.

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

Our plantings of avocados, oranges, specialty citrus and other crops have been profitable and have been pursued to diversify our product line.

Agricultural land that we believe is not suitable for lemons is typically planted with oranges, specialty citrus or other crops.

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

• Opportunistically Expand our Plantings of Avocados .

Our plantings of avocados have been profitable and have been pursued to diversify our product line.

Agricultural land that we believe is not suitable for lemons is typically planted with avocados, oranges, specialty citrus or other crops.

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

Other Operations

With respect to our rental operations and real estate development activities, key elements of our strategy include the following:

• Secure Additional Rental and Housing Units .

• Selectively Secure Additional Rental and Housing Units .

Our housing, commercial and land rental operations provide us with a consistent, dependable source of cash flow that helps to fund our overall activities.

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and international customers during fiscal year 2022.

We sell a majority of our avocados to Calavo.

Our oranges, specialty citrus and other crops are sold through Sunkist and other third-party packinghouses and our wine grapes are sold to wine producers.

Information about Geographic Areas

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

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

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

We sell our avocados, oranges, specialty citrus and other crops to third-party packinghouses and our wine grapes to wine producers.

The agribusiness crop markets are intensely competitive, but no single producer has any significant market power over any market segments, as is consistent with the production of most agricultural commodities.

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

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

packinghouses similar to that of Limoneira.

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

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

Avocado products compete in the

supermarket with hummus products and other dips and salsas.

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

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

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The sale and leasing of residential, commercial and industrial real estate is very competitive, with competition coming from numerous and varied sources throughout California.

Our greatest direct competition for each of our current real estate development properties in Ventura and Santa Barbara Counties comes from other residential and commercial developments in nearby areas.

Our greatest direct competition for each of our current real estate development properties in Ventura County comes from other residential and commercial developments in nearby areas.

Resources and Raw Materials

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

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

We also acquired certain lemon brands with acquisitions, including Kiva®, Kachina®, Oxnard Lemon and Trapani Fresh.

Seasonal Nature of Business

1 unchanged sentence

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

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

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

Environmental and Regulatory Matters

9 unchanged sentences

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

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

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

Risk Factors of this Annual Report.

Human Capital Resources

10 unchanged sentences

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

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

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

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

2 unchanged sentences

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

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

We own and maintain 257 residential housing units located mainly in Ventura and Tulare Counties in California.

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

4 unchanged sentences

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

What changed 10-K

Item 1. Business