What changed in this filing

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Item 1. Financial Statements

2023-09-07 compared with 2023-06-06 · 146 added, 119 removed, 641 unchanged (29% of the section changed)

2 unchanged sentences

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

($ in thousands, except share amounts)

April 30, 2023 October 31, 2022

(in thousands, except share and per share data)

July 31, 2023 October 31, 2022

Current assets:

12 unchanged sentences

Total assets $ 312,673 $ 368,518

Liabilities and Stockholders' Equity

Liabilities, Convertible Preferred Stock and Stockholders' Equity

Current liabilities:

13 unchanged sentences

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

14,790 shares issued and outstanding at April 30, 2023 and October 31, 2022) ( 8.75 % coupon rate)

14,790 shares issued and outstanding at July 31, 2023 and October 31, 2022) ( 8.75 % coupon rate)

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

9,300 shares issued and outstanding at April 30, 2023 and October 31, 2022) ( 4 % dividend rate on liquidation value of $ 1,000 per share)

9,300 shares issued and outstanding at July 31, 2023 and October 31, 2022) ( 4 % dividend rate on liquidation value of $ 1,000 per share)

Stockholders' equity:

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

zero issued or outstanding at April 30, 2023 and October 31, 2022)

zero issued or outstanding at July 31, 2023 and October 31, 2022)

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

18,229,887 and 17,935,292 shares issued and 17,978,910 and 17,684,315 shares outstanding at April 30, 2023 and October 31, 2022, respectively)

18,229,887 and 17,935,292 shares issued and 17,978,910 and 17,684,315 shares outstanding at July 31, 2023 and October 31, 2022, respectively)

Additional paid-in capital 167,925 165,169

1 unchanged sentence

Accumulated other comprehensive loss ( 4,496 ) ( 7,908 )

Treasury stock, at cost, 250,977 shares at April 30, 2023 and October 31, 2022

Treasury stock, at cost, 250,977 shares at July 31, 2023 and October 31, 2022

( 3,493 ) ( 3,493 )

1 unchanged sentence

Total stockholders' equity 195,391 181,054

Total liabilities and stockholders' equity $ 316,326 $ 368,518

Total liabilities, convertible preferred stock and stockholders' equity $ 312,673 $ 368,518

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

1 unchanged sentence

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

($ in thousands, except share amounts)

(in thousands, except per share data)

Three Months Ended

April 30, Six Months Ended

July 31, Nine Months Ended

2023 2022 2023 2022

11 unchanged sentences

Operating (loss) income ( 1,549 ) 11,060 20,473 4,088

Other income (expense):

Other (expense) income:

Interest income 178 6 248 54

1 unchanged sentence

Equity in earnings of investments, net 199 331 514 681

Other income (expense), net 200 78 ( 2,412 ) 93

Total other income (expense) 1,320 ( 292 ) ( 2,203 ) 10

Other (expense) income, net ( 215 ) 13 ( 2,627 ) 106

Total other expense ( 79 ) ( 422 ) ( 2,282 ) ( 412 )

(Loss) income before income tax benefit (provision) ( 1,628 ) 10,638 18,191 3,676

1 unchanged sentence

Net (loss) income ( 1,250 ) 7,325 12,654 2,291

Net loss (income) attributable to noncontrolling interest 17 ( 11 ) 114 77

Net loss attributable to noncontrolling interest 87 52 201 129

Net (loss) income attributable to Limoneira Company ( 1,163 ) 7,377 12,855 2,420

10 unchanged sentences

Three Months Ended

April 30, Six Months Ended

July 31, Nine Months Ended

2023 2022 2023 2022

2 unchanged sentences

Foreign currency translation adjustments ( 485 ) ( 828 ) 1,688 ( 1,779 )

Minimum pension liability adjustments, net of tax of $ 0 , $ 27 , $( 135 ) and $ 54 for the three and six months ended April 30, 2023 and 2022, respectively

Minimum pension liability adjustments, net of tax of $ 0 , $ 27 , $( 135 ) and $ 81 for the three and nine months ended July 31, 2023 and 2022, respectively

— 72 ( 220 ) 217

Pension settlement cost, net of tax of $ 0 and $ 756 for the three and six months ended April 30, 2023

Pension settlement cost, net of tax of $ 0 and $ 756 for the three and nine months ended July 31, 2023

Total other comprehensive (loss) income, net of tax ( 485 ) ( 756 ) 3,412 ( 1,562 )

Comprehensive (loss) income ( 1,735 ) 6,569 16,066 729

Comprehensive loss (income) attributable to noncontrolling interest 17 ( 5 ) 114 81

Comprehensive loss attributable to noncontrolling interest 87 80 201 161

Comprehensive (loss) income attributable to Limoneira Company $ ( 1,648 ) $ 6,649 $ 16,267 $ 890

2 unchanged sentences

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

($ in thousands)

(in thousands, except share and per share data)

Stockholders' Equity Temporary Equity

27 unchanged sentences

Balance at April 30, 2023 17,978,910 $ 180 $ 167,169 $ 26,582 $ ( 4,011 ) $ ( 3,493 ) $ 11,417 $ 197,844 $ 1,479 $ 9,331

Dividends Common ($ 0.075 per share)

— — — ( 1,349 ) — — — ( 1,349 ) — —

Dividends Series B ($ 2.19 per share)

— — — ( 32 ) — — — ( 32 ) — —

Dividends Series B-2 ($ 10 per share)

— — — ( 93 ) — — — ( 93 ) — —

Stock compensation — — 756 — — — — 756 — —

Net loss — — — ( 1,163 ) — — ( 87 ) ( 1,250 ) — —

Other comprehensive loss, net of tax — — — — ( 485 ) — — ( 485 ) — —

Balance at July 31, 2023 17,978,910 $ 180 $ 167,925 $ 23,945 $ ( 4,496 ) $ ( 3,493 ) $ 11,330 $ 195,391 $ 1,479 $ 9,331

LIMONEIRA COMPANY

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

(in thousands, except share and per share data)

Stockholders' Equity Temporary Equity

27 unchanged sentences

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

Dividends Common ($ 0.075 per share)

— — — ( 1,325 ) — — — ( 1,325 ) — —

Dividends Series B ($ 2.19 per share)

— — — ( 32 ) — — — ( 32 ) — —

Dividends Series B-2 ($ 10 per share)

— — — ( 93 ) — — — ( 93 ) — —

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

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

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

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

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

2 unchanged sentences

(in thousands)

Six Months Ended

Nine Months Ended

Operating activities

Net income (loss) $ 13,904 $ ( 5,034 )

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

Net income $ 12,654 $ 2,291

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

Depreciation and amortization 6,510 7,432

16 unchanged sentences

Other long-term liabilities ( 1,247 ) ( 193 )

Net cash used in operating activities ( 18,443 ) ( 1,160 )

Net cash (used in) provided by operating activities ( 12,588 ) 10,919

Investing activities

1 unchanged sentence

Net proceeds from sales of assets 98,526 110

Net proceeds from legal settlement 853 —

Net proceeds from sale of real estate development assets 2,577 —

Cash distribution from Trapani Fresh 82 —

Collection on note receivable — 2,600

Collection on notes receivable 66 2,755

Equity investment contributions ( 275 ) —

4 unchanged sentences

Repayments of long-term debt ( 122,827 ) ( 119,327 )

Proceeds from equipment financings — 1,020

Principal paid on finance lease and equipment financings ( 323 ) ( 271 )

2 unchanged sentences

Exchange of common stock ( 26 ) ( 1,086 )

Net cash (used in) provided by financing activities ( 68,012 ) 2,326

Net cash used in financing activities ( 69,646 ) ( 4,814 )

Effect of exchange rate changes on cash 26 ( 247 )

5 unchanged sentences

(in thousands)

Six Months Ended

Nine Months Ended

Supplemental disclosures of cash flow information

3 unchanged sentences

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

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

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

5 unchanged sentences

The Company markets and sells citrus directly to food service, wholesale and retail customers throughout the United States, Canada, Asia, Europe and other international markets.

The Company is a member of Sunkist Growers, Inc.

(“Sunkist”), an agricultural marketing cooperative, and sells a portion of its oranges, specialty citrus and other crops to Sunkist-licensed and other third-party packinghouses.

The Company is a member of Sunkist Growers, Inc., an agricultural marketing cooperative, and sells a portion of its oranges, specialty citrus and other crops to Sunkist-licensed and other third-party packinghouses.

Basis of Presentation and Preparation

12 unchanged sentences

Accumulated other comprehensive loss is reported as a component of the Company's stockholders' equity.

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

Three Months Ended April 30,

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

Three Months Ended July 31,

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

6 unchanged sentences

Summary of Significant Accounting Policies (continued)

Six Months Ended April 30,

Nine Months Ended July 31,

Pre-tax Amount Tax Benefit (Expense) Net Amount Pre-tax Amount Tax Expense Net Amount

8 unchanged sentences

Other comprehensive income 1,688 1,724 3,412

Balance at April 30, 2023 $ ( 4,011 ) $ — $ ( 4,011 )

Balance at July 31, 2023 $ ( 4,496 ) $ — $ ( 4,496 )

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

1 unchanged sentence

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

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

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

COVID-19 Pandemic

3 unchanged sentences

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

The full impact of the COVID-19 pandemic on the Company's results of operations, financial condition, and liquidity, including its ability to comply with debt covenants, for fiscal year 2023 and beyond, is driven by estimates that contain uncertainties.

Concentrations

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

One individual customer represented 12 % of revenue for the six months ended April 30, 2023.

One individual customer represented 10 % of accounts receivable, net as of April 30, 2023.

One individual supplier represented 11 % of accounts payable as of April 30, 2023.

Lemons procured from third-party growers were 57 % and 54 % of the Company's lemon supply for the six months ended April 30, 2023 and 2022, respectively.

Two third-party growers were 23 % and 19 % of the lemon supply for the six months ended April 30, 2023, respectively.

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

One individual customer represented 12 % of revenue for the nine months ended July 31, 2023.

No individual customer represented more than 10 % of accounts receivable, net as of July 31, 2023.

No individual supplier represented 10 % of accounts payable as of July 31, 2023.

Lemons procured from third-party growers were 53 % and 51 % of the Company's lemon supply for the nine months ended July 31, 2023 and 2022, respectively.

One third-party grower was 11 % of the lemon supply for the nine months ended July 31, 2023.

The Company maintains its cash in federally insured financial institutions.

20 unchanged sentences

The proceeds were used to pay down all of the Company’s domestic debt except the AgWest Farm Credit $ 40,000,000 non-revolving line of credit.

The Northern Properties component, including an allocation of interest expense related to the debt directly repaid through the transaction, had a pretax loss of $ 1,677,000 and $ 1,423,000 for the six months ended April 30, 2023 and 2022, respectively.

The Northern Properties component, including an allocation of interest expense related to the debt directly repaid through the transaction, had a pretax loss of $ 1,667,000 and $ 776,000 for the nine months ended July 31, 2023 and 2022, respectively.

On January 31, 2023, the Company entered into a Farm Management Agreement (“FMA”) with an affiliate of PGIM to provide farming, management and operations services related to the Northern Properties.

2 unchanged sentences

In April 2023, the Company determined that citrus farming operations were economically unviable on 670 acres of leased agricultural land at the Cadiz Ranch.

As a result, the Company ceased farming operations, disposed of the related property, plant and equipment and recorded a loss on disposal of assets of $ 9,012,000 as of April 30, 2023.

As a result, the Company ceased farming operations, disposed of the related property, plant and equipment and recorded a loss on disposal of assets of $ 9,012,000 during the nine months ended July 31, 2023.

Prepaid Expenses and Other Current Assets

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

April 30, 2023 October 31, 2022

July 31, 2023 October 31, 2022

Prepaid supplies and insurance $ 2,753 $ 2,958

2 unchanged sentences

Lemon supplier advances 1,907 1,188

Legal settlement receivable 6,109 —

Other 985 1,205

3 unchanged sentences

Real Estate Development

Real estate development assets are comprised primarily of land and land development costs for the East Area II property in the amount of $ 9,858,000 and $ 9,706,000 at April 30, 2023 and October 31, 2022, respectively.

Real estate development assets are comprised primarily of land and land development costs for the East Area II property in the amount of $ 9,967,000 and $ 9,706,000 at July 31, 2023 and October 31, 2022, respectively.

East Area I, Retained Property and East Area II

3 unchanged sentences

The Company and LLCB also entered into a Retained Property Development Agreement on the Transaction Date (the “Retained Property Agreement”).

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

The balance in East Area II includes estimated costs incurred by and reimbursable to LLCB of $ 3,444,000 at April 30, 2023 and October 31, 2022, which is included in payables to related parties.

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

The balance in East Area II includes estimated costs incurred by and reimbursable to LLCB of $ 3,444,000 at July 31, 2023 and October 31, 2022, which is included in payables to related parties.

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

3 unchanged sentences

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

The Loan had an outstanding balance of $ 13,100,000 as of April 30, 2023.

The Loan had an outstanding balance of $ 15,000,000 as of July 31, 2023.

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

5 unchanged sentences

The Company formed LLCB II, LLC (“LLCB II”) as the development entity, contributed the Retained Property to the joint venture and sold a 50 % interest to Lewis for $ 7,975,000 .

The Company recorded a deferred gain of $ 465,000 on the transaction, which is included in other long-term liabilities as of April 30, 2023 and October 31, 2022.

The Company recorded a deferred gain of $ 465,000 on the transaction, which is included in other long-term liabilities as of July 31, 2023 and October 31, 2022.

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.

The Company made contributions of $ 275,000 to LLCB II during the six months ended April 30, 2023.

Through April 30, 2023, LLCB has closed sales of initial residential lots representing 586 residential units.

Real Estate Development (continued)

The Company made contributions of $ 275,000 to LLCB II during the nine months ended July 31, 2023.

Through July 31, 2023, LLCB has closed sales of initial residential lots representing 586 residential units.

Other Real Estate Development Projects

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

After transaction and other costs, the Company received cash proceeds of approximately $ 2,577,000 and recorded an immaterial loss on disposal of assets during the six months ended April 30, 2023.

After transaction and other costs, the Company received cash proceeds of approximately $ 2,577,000 and recorded an immaterial loss on disposal of assets during the nine months ended July 31, 2023.

LIMONEIRA COMPANY

2 unchanged sentences

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

April 30, 2023 October 31, 2022

July 31, 2023 October 31, 2022

Limoneira Lewis Community Builders, LLC $ 61,605 $ 61,154

4 unchanged sentences

$ 73,425 $ 72,855

Net amounts due from Rosales were $ 442,000 and $ 270,000 at April 30, 2023 and October 31, 2022, respectively, and are included in receivables/other from related parties and payables to related parties.

Net amounts due from Rosales were $ 2,348,000 and $ 270,000 at July 31, 2023 and October 31, 2022, respectively, and are included in receivables/other from related parties.

Unconsolidated Significant Subsidiary

2 unchanged sentences

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

During the year-to-date interim periods for the six months ended April 30, 2023 and 2022, this threshold was not met for any of the Company's equity investments.

During the year-to-date interim periods for the nine months ended July 31, 2023 and 2022, this threshold was not met for any of the Company's equity investments.

Goodwill and Intangible Assets, Net

3 unchanged sentences

Foreign currency translation adjustment 18

Balance at April 30, 2023 $ 1,529

Balance at July 31, 2023 $ 1,524

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

There have been no impairment charges recorded against goodwill as of April 30, 2023.

Intangible assets consisted of the following (in thousands):

April 30, 2023 October 31, 2022

There have been no impairment charges recorded against goodwill as of July 31, 2023.

Intangible assets consist of the following (in thousands):

July 31, 2023 October 31, 2022

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

4 unchanged sentences

$ 10,166 $ ( 3,170 ) $ 6,996 $ 9,934 $ ( 2,617 ) $ 7,317

Goodwill and Intangible Assets, Net (continued)

Amortization expense totaled $ 178,000 and $ 180,000 for the three months ended April 30, 2023 and 2022, respectively.

Amortization expense totaled $ 375,000 and $ 361,000 for the six months ended April 30, 2023 and 2022 respectively.

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Estimated future amortization expense of intangible assets as of April 30, 2023 is as follows (in thousands):

2023 (remaining six months) $ 354

Goodwill and Intangible Assets, Net (continued)

Amortization expense totaled $ 178,000 and $ 182,000 for the three months ended July 31, 2023 and 2022, respectively.

Amortization expense totaled $ 553,000 and $ 543,000 for the nine months ended July 31, 2023 and 2022 respectively.

Estimated future amortization expense of intangible assets as of July 31, 2023 is as follows (in thousands):

2023 (remaining three months) $ 176

Thereafter 676

2 unchanged sentences

In January 2023, the Company sold an investment in a mutual water company with a net book value of $ 1,320,000 as part of the Northern Properties sale described in Note 3 - Asset Sales and Disposals.

As of April 30, 2023 and October 31, 2022, $ 5,681,000 and $ 6,500,000 , respectively, were included in other assets.

Amounts included in other assets in the consolidated balance sheets as of July 31, 2023 and October 31, 2022 were $ 5,691,000 and $ 6,500,000 , respectively.

Accrued Liabilities

Accrued liabilities consist of the following (in thousands):

April 30, 2023 October 31, 2022

July 31, 2023 October 31, 2022

Compensation $ 1,886 $ 3,572

8 unchanged sentences

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

April 30, 2023 October 31, 2022

July 31, 2023 October 31, 2022

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

the interest rate of the revolving line of credit is variable based on the one-month Secured Overnight Financing Rate ("SOFR"), which was 4.80 % at April 30, 2023, plus 1.78 %.

the interest rate of the revolving line of credit is variable based on the one-month Secured Overnight Financing Rate (“SOFR”), which was 5.11 % at July 31, 2023, plus 1.78 %.

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

34 unchanged sentences

The Supplements provide aggregate borrowing capacity of $ 115,000,000 comprised of $ 75,000,000 under the Revolving Credit Supplement, and $ 40,000,000 under the Non-Revolving Credit Supplement.

As of April 30, 2023, the Company's outstanding borrowings under the Supplements were $ 40,000,000 and it had $ 75,000,000 available to borrow.

As of July 31, 2023, the Company's outstanding borrowings under the Supplements were $ 40,000,000 and it had $ 75,000,000 available to borrow.

In January 2023, the Company used the proceeds from the Northern Properties sale as described in Note 3 - Asset Sales and Disposals to reduce the Company's long-term debt.

4 unchanged sentences

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

As of January 1, 2023, the rate transitioned from LIBOR to the Secured Overnight Financing Rate ("SOFR").

As of January 1, 2023, the rate transitioned from LIBOR to the SOFR.

The applicable margin ranges from 1.78 % to 2.28 % depending on the ratio of current assets, plus the remaining available commitment divided by current liabilities.

8 unchanged sentences

The MLA subjects the Company 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 the Company’s business.

The Company is also subject to a financial covenant that requires it to maintain compliance with a specific debt service coverage ratio greater than or equal to 1.25 :1.0 when measured at October 31, 2023 and annually thereafter.

The Company was in compliance as of October 31, 2022.

The Company was in compliance with the covenants as of October 31, 2022.

In September 2023, the Lender modified the covenant to defer measurement at October 31, 2023 and resume a debt service coverage ratio of 1.25 :1.0 measured as of October 31, 2024.

In February 2023, the Lender declared an annual cash patronage dividend of 1.25 % of average eligible loan balances and the Company received $ 1,413,000 in the second quarter of fiscal year 2023.

1 unchanged sentence

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

The Company capitalized interest of zero during the three months ended April 30, 2023 and 2022, and $ 306,000 and zero during the six months ended April 30, 2023 and 2022, respectively.

The Company capitalized interest of $ 207,000 and $ 235,000 during the three months ended July 31, 2023 and 2022, respectively and $ 513,000 and $ 235,000 during the nine months ended July 31, 2023 and 2022, respectively.

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

1 unchanged sentence

Other long-term liabilities consist of the following (in thousands):

April 30, 2023 October 31, 2022

July 31, 2023 October 31, 2022

Minimum pension liability $ — $ 2,272

11 unchanged sentences

Three Months Ended

April 30, Six Months Ended

July 31, Nine Months Ended

2023 2022 2023 2022

9 unchanged sentences

All lease costs are primarily included in agribusiness costs and expenses in the Company's consolidated statements of operations .

Operating lease costs were $ 491,000 and $ 135,000 for the three months ended April 30, 2023 and 2022, respectively, and $ 982,000 and $ 258,000 for the six months ended April 30, 2023 and 2022, respectively.

Finance lease costs were immaterial and $ 98,000 for the three months ended April 30, 2023 and 2022, respectively and immaterial and $ 156,000 for the six months ended April 30, 2023 and 2022, respectively.

Variable lease costs were immaterial for the three and six months ended April 30, 2023 and 2022.

Short term lease costs were $ 175,000 and immaterial for the three months ended April 30, 2023 and 2022, respectively, and $ 338,000 and immaterial for the six months ended April 30, 2023 and 2022, respectively.

Operating lease costs were $ 522,000 and $ 137,000 for the three months ended July 31, 2023 and 2022, respectively, and $ 1,504,000 and $ 395,000 for the nine months ended July 31, 2023 and 2022, respectively.

Finance lease costs were immaterial for the three months ended July 31, 2023 and 2022, and $ 122,000 and $ 112,000 for the nine months ended July 31, 2023 and 2022, respectively.

Variable lease costs were immaterial for the three and nine months ended July 31, 2023 and 2022.

Short term lease costs were $ 155,000 and immaterial for the three months ended July 31, 2023 and 2022, respectively, and $ 493,000 and $ 174,000 for the nine months ended July 31, 2023 and 2022, respectively.

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

Classification April 30, 2023 October 31, 2022

Classification July 31, 2023 October 31, 2022

Operating lease ROU assets Other assets $ 5,118 $ 6,190

11 unchanged sentences

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

Six Months Ended

Nine Months Ended

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

6 unchanged sentences

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

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

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

Three Months Ended

April 30, Six Months Ended

July 31, Nine Months Ended

2023 2022 2023 2022

16 unchanged sentences

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

Diluted net (loss) income per common share was calculated under the two-class method for the three and six months ended April 30, 2023 and 2022 .

Diluted net (loss) income per common share was calculated under the two-class method for the three and nine months ended July 31, 2023 and 2022.

LIMONEIRA COMPANY

2 unchanged sentences

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

April 30, 2023 October 31, 2022

July 31, 2023 October 31, 2022

Balance Sheet Balance Sheet

4 unchanged sentences

9 LLCB $ 66 $ — $ 3,444 $ — $ 66 $ — $ 3,444 $ —

Three Months Ended April 30, 2023 Three Months Ended April 30, 2022

Three Months Ended July 31, 2023 Three Months Ended July 31, 2022

Consolidated Statement of Operations Consolidated Statement of Operations

6 unchanged sentences

8 FGF $ 132 $ 50 $ — $ — $ 83 $ 86 $ 2 $ —

11 Third-party growers $ — $ — $ — $ — $ 104 $ — $ — $ —

12 Principal owner $ — $ — $ — $ 446 $ — $ — $ — $ —

Six Months Ended April 30, 2023 Six Months Ended April 30, 2022

Nine Months Ended July 31, 2023 Nine Months Ended July 31, 2022

Consolidated Statement of Operations Consolidated Statement of Operations

10 unchanged sentences

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

There were no material rental payments due from employees at April 30, 2023 or October 31, 2022.

There were no material rental payments due from employees at July 31, 2023 and October 31, 2022.

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

28 unchanged sentences

(12) Principal owner - The Company has one principal owner with ownership shares over 10% and paid dividends to such owner.

The effective tax rate for the six months ended April 30, 2023 was higher than the federal statutory tax rate of 21% mainly due to foreign jurisdictions that are taxed at different rates, state taxes, tax impact of executive compensation, and nondeductible tax items.

The Company has no material uncertain tax positions as of April 30, 2023.

The effective tax rate for the nine months ended July 31, 2023 was higher than the federal statutory tax rate of 21% mainly due to foreign jurisdictions that are taxed at different rates, state taxes, tax impact of executive compensation, and nondeductible tax items.

The Company has no material uncertain tax positions as of July 31, 2023.

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

There was no accrued interest or penalties associated with uncertain tax positions as of April 30, 2023.

There was no accrued interest or penalties associated with uncertain tax positions as of July 31, 2023.

Retirement Plans

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

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

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

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

Effective June 2004, the Company froze the Plan and no additional benefits accrued to participants subsequent to that date.

The Plan is administered by Principal Bank and Mercer Human Resource Consulting.

The Plan was administered by Principal Bank and Mercer Human Resource Consulting.

In fiscal year 2021, the Company terminated the Plan effective December 31, 2021.

3 unchanged sentences

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

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

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

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

2 unchanged sentences

Retirement Plans (continued)

The components of net periodic pension cost for the Plan for the three and six months ended April 30, 2023 and 2022 were as follows (in thousands):

The components of net periodic pension cost for the Plan were as follows (in thousands):

Three Months Ended

April 30, Six Months Ended

July 31, Nine Months Ended

2023 2022 2023 2022

3 unchanged sentences

Prior service cost — 12 4 34

Recognized actuarial loss — 100 — 199

Amortization of net loss — 99 — 298

Settlement loss recognized — — 2,700 —

7 unchanged sentences

Under the terms of the Settlement Agreement, the Company was awarded a total settlement of $ 9,000,000 .

On May 19, 2023, the Company received $ 6,109,000 , net of legal and related costs, of which $ 3,840,000 is recorded in agribusiness revenues and $ 2,269,000 is recorded in gain on legal settlement as of April 30, 2023.

On May 19, 2023, the Company received $ 6,109,000 , net of legal and related costs, of which $ 3,840,000 was recorded in agribusiness revenues and $ 2,269,000 was recorded in gain on legal settlement as of April 30, 2023.

Stock-based Compensation

3 unchanged sentences

Certain restricted stock grants are made to management each December under the Stock Plan based on the achievement of certain annual financial performance and other criteria achieved during the previous fiscal year (“Performance Awards”).

The Performance Awards are based on a percentage of the employee’s base salary divided by the stock price on the grant date once the performance criteria have been met, and generally vest over a two-year period as service is provided.

During December 2022, 79,972 shares of restricted stock with a per share price of $ 13.19 were granted to management under the Stock Plan for fiscal year 2022 performance, resulting in total compensation expense of approximately $ 1,055,000 , with $ 365,000 recognized in the fiscal year ended October 31, 2022, and the balance will be recognized over the next two years as the shares vest.

The performance grants are based on a percentage of the employee’s base salary divided by the stock price on the grant date once the performance criteria has been met, and generally vest over a two-year period as service is provided.

During December 2022, subsequent to fiscal year 2022, 79,972 shares of restricted stock with a per share price of $ 13.19 were granted to management under the Stock Plan for fiscal year 2022 performance, resulting in total compensation expense of approximately $ 1,055,000 , with $ 365,000 recognized in the fiscal year ended October 31, 2022, and the balance will be recognized over the next two years as the shares vest.

Executive Awards

Certain restricted stock grants are made to key executives under the Stock Plan (“Executive Awards”).

Executive Awards generally vest over a three-year period as service is provided.

During December 2022, the Company granted 55,000 shares of restricted stock with a per share price of $ 13.19 to key executives under the Stock Plan.

These grants generally vest over a three-year period as service is provided.

During December 2022, subsequent to fiscal year 2022, the Company granted 55,000 shares of restricted stock with a per share price of $ 13.19 to key executives under the Stock Plan.

The related compensation expense of approximately $ 725,000 will be recognized equally over the next three years as the shares vest.

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In fiscal year 2022, the Company entered into Retention Bonus Agreements with key executives (collectively, the “Retention Bonus Agreements”) whereby the executives will be eligible to receive cash and restricted stock grants.

During December 2022, the Company granted 11,317 shares of restricted stock with a per share price of $ 13.19 to key executives related to the Retention Bonus Agreements.

During December 2022, subsequent to fiscal year 2022, the Company granted 11,317 shares of restricted stock with a per share price of $ 13.19 to key executives related to the Retention Bonus Agreements.

The related compensation expense of approximately $ 149,000 had $ 122,000 recognized in the fiscal year ended October 31, 2022, and the balance will be recognized over the next year as the shares vest.

6 unchanged sentences

Exchange of Common Stock

During the six months ended April 30, 2023 and 2022, members of management exchanged 1,594 and 68,080 shares of common stock with fair values totaling $ 26,000 and $ 1,086,000 , respectively, at the dates of the exchanges, for the payment of payroll taxes associated with the vesting of shares under the Stock Plan.

During the nine months ended July 31, 2023 and 2022, members of management exchanged 1,594 and 68,080 shares of common stock with fair values totaling $ 26,000 and $ 1,086,000 , respectively, at the dates of the exchanges, for the payment of payroll taxes associated with the vesting of shares under the Stock Plan.

Segment Information

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

Revenues related to rental operations are included in “Corporate and Other.” Other agribusiness revenues consisted of oranges of $ 1,383,000 and $ 2,535,000 and specialty citrus and other of $ 2,420,000 and $ 3,667,000 for the three and six months ended April 30, 2023.

Other agribusiness revenues consisted of oranges of $ 2,617,000 and $ 3,490,000 and specialty citrus and other of $ 1,441,000 and $ 2,317,000 for the three and six months ended April 30, 2022.

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

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Segment Information (continued)

Segment information for the three months ended April 30, 2023 (in thousands):

Segment information for the three months ended July 31, 2023 is as follows (in thousands):

Packing Eliminations

8 unchanged sentences

Depreciation and amortization — — — — — 1,735 284 2,019

Operating income (loss) $ 2,870 $ 4,657 $ — $ 2,580 $ 120 $ 8,487 $ ( 12,349 ) $ ( 3,862 )

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

Operating (loss) income $ 2,827 $ 2,016 $ — $ 432 $ 707 $ 4,247 $ ( 5,796 ) $ ( 1,549 )

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

Packing Eliminations

9 unchanged sentences

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

Segment information for the six months ended April 30, 2023 (in thousands):

Segment information for the nine months ended July 31, 2023 is as follows (in thousands):

Packing Eliminations

8 unchanged sentences

Depreciation and amortization — — — — — 5,610 900 6,510

Operating income (loss) $ ( 1,949 ) $ 6,315 $ — $ 2,580 $ 703 $ 3,774 $ 18,248 $ 22,022

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

Operating income $ 878 $ 8,331 $ — $ 3,012 $ 1,410 $ 8,021 $ 12,452 $ 20,473

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

Packing Eliminations

9 unchanged sentences

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

Revenues related to rental operations are included in “Corporate and Other.” The detail of other agribusiness revenues is as follows (in thousands):

Three Months Ended

July 31, Nine Months Ended

2023 2022 2023 2022

Oranges $ 1,290 $ 3,736 $ 3,825 $ 7,226

Specialty citrus and other 1,900 1,120 4,163 3,437

Farm management 5,383 — 6,787 —

Other agribusiness revenues $ 8,573 $ 4,856 $ 14,775 $ 10,663

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Subsequent Events

The Company evaluated events subsequent to April 30, 2023 through the date of this filing, to assess the need for potential recognition or disclosure in this Quarterly Report on Form 10-Q.

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

The Company evaluated events subsequent to July 31, 2023 through the date of this filing, to assess the need for potential recognition or disclosure in this Quarterly Report.

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

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

What changed 10-Q

Item 1. Financial Statements