What changed in this filing

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Item 1. Financial Statements

2024-03-07 compared with 2023-09-07 · 193 added, 293 removed, 494 unchanged (50% of the section changed)

3 unchanged sentences

(in thousands, except share and per share data)

July 31, 2023 October 31, 2022

January 31, 2024 October 31, 2023

Current assets:

18 unchanged sentences

Payables to related parties 5,139 4,805

Income taxes payable 7,175 219

Current portion of long-term debt 668 381

7 unchanged sentences

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

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

14,790 shares issued and outstanding at January 31, 2024 and October 31, 2023) ( 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 July 31, 2023 and October 31, 2022) ( 4 % dividend rate on liquidation value of $ 1,000 per share)

9,300 shares issued and outstanding at January 31, 2024 and October 31, 2023) ( 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 July 31, 2023 and October 31, 2022)

zero issued or outstanding at January 31, 2024 and October 31, 2023)

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 July 31, 2023 and October 31, 2022, respectively)

18,255,895 and 18,192,009 shares issued and 18,004,918 and 17,941,032 shares outstanding at January 31, 2024 and October 31, 2023, respectively)

Additional paid-in capital 168,620 168,441

1 unchanged sentence

Accumulated other comprehensive loss ( 6,133 ) ( 5,666 )

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

Treasury stock, at cost, 250,977 shares at January 31, 2024 and October 31, 2023

( 3,493 ) ( 3,493 )

7 unchanged sentences

Three Months Ended

July 31, Nine Months Ended

2023 2022 2023 2022

Net revenues:

5 unchanged sentences

Other operations 1,182 1,238

Loss (gain) on disposal of assets, net 1,545 242 ( 29,199 ) 503

Gain on legal settlement — — ( 2,269 ) —

Gain on disposal of assets, net ( 165 ) ( 39,742 )

Selling, general and administrative 7,345 9,280

5 unchanged sentences

Equity in earnings of investments, net 41 253

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

Other income (expense), net 22 ( 2,612 )

Total other expense ( 122 ) ( 3,523 )

15 unchanged sentences

Three Months Ended

July 31, Nine Months Ended

2023 2022 2023 2022

Net (loss) income $ ( 3,677 ) $ 15,534

1 unchanged sentence

Foreign currency translation adjustments ( 467 ) 2,223

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 nine months ended July 31, 2023

Minimum pension liability adjustments, net of tax of $ 0 and $( 135 )

Pension settlement cost, net of tax of $ 0 and $ 756

Total other comprehensive (loss) income, net of tax ( 467 ) 3,947

11 unchanged sentences

Preferred Series B-2

Shares Amount Capital Earnings (Loss) Income Stock Interest Equity Stock Stock

Shares Amount Capital Earnings Loss Stock Interest Equity Stock Stock

Balance at October 31, 2023 17,941,032 $ 179 $ 168,441 $ 19,017 $ ( 5,666 ) $ ( 3,493 ) $ 11,209 $ 189,687 $ 1,479 $ 9,331

6 unchanged sentences

Stock compensation 99,983 1 863 — — — — 864 — —

Noncontrolling interest adjustment — — — — — — ( 78 ) ( 78 ) — —

Net income — — — 15,631 — — ( 97 ) 15,534 — —

Other comprehensive income, net of tax — — — — 3,947 — — 3,947 — —

Balance at January 31, 2023 17,830,604 $ 178 $ 166,232 $ 29,669 $ ( 3,961 ) $ ( 3,493 ) $ 11,434 $ 200,059 $ 1,479 $ 9,331

Dividends Common ($ 0.075 per share)

— — — ( 1,348 ) — — — ( 1,348 ) — —

Dividends Series B ($ 2.19 per share)

— — — ( 33 ) — — — ( 33 ) — —

Dividends Series B-2 ($ 10 per share)

— — — ( 93 ) — — — ( 93 ) — —

Stock compensation 149,900 2 963 — — — — 965 — —

Exchange of common stock ( 36,097 ) — ( 684 ) — — — — ( 684 ) — —

Net loss — — — ( 1,613 ) — — ( 17 ) ( 1,630 ) — —

Other comprehensive loss, net of tax — — — — ( 50 ) — — ( 50 ) — —

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 — —

Noncontrolling interest adjustment — — — — — — ( 60 ) ( 60 ) — —

Net loss — — — ( 3,585 ) — — ( 92 ) ( 3,677 ) — —

Other comprehensive loss, net of tax — — — — ( 467 ) — — ( 467 ) — —

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)

Balance at January 31, 2024 18,004,918 $ 180 $ 168,620 $ 13,957 $ ( 6,133 ) $ ( 3,493 ) $ 11,057 $ 184,188 $ 1,479 $ 9,331

Stockholders' Equity Temporary Equity

12 unchanged sentences

Stock compensation 146,289 1 1,063 — — — — 1,064 — —

Exchange of common stock ( 55,362 ) — ( 900 ) — — — — ( 900 ) — —

Net loss — — — ( 6,518 ) — — ( 88 ) ( 6,606 ) — —

Noncontrolling interest adjustment — — — — — — ( 78 ) ( 78 ) — —

Net income — — — 15,631 — — ( 97 ) 15,534 — —

Other comprehensive income, net of tax — — — — 3,947 — — 3,947 — —

Balance at January 31, 2023 17,830,604 $ 178 $ 166,232 $ 29,669 $ ( 3,961 ) $ ( 3,493 ) $ 11,434 $ 200,059 $ 1,479 $ 9,331

Dividends Common ($ 0.075 per share)

— — — ( 1,325 ) — — — ( 1,325 ) — —

Dividends Series B ($ 2.19 per share)

— — — ( 33 ) — — — ( 33 ) — —

Dividends Series B-2 ($ 10 per share)

— — — ( 93 ) — — — ( 93 ) — —

Stock compensation 34,231 — 378 — — — — 378 — —

Exchange of common stock ( 12,718 ) — ( 186 ) — — — — ( 186 ) — —

Net income — — — 1,561 — — 11 1,572 — —

Other comprehensive loss, net of tax — — — — ( 933 ) — ( 6 ) ( 939 ) — —

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)

Nine Months Ended

Three Months Ended

Operating activities

Net income $ 12,654 $ 2,291

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

Net (loss) income $ ( 3,677 ) $ 15,534

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

Depreciation and amortization 2,058 2,447

(Gain) loss on disposal of assets, net ( 29,199 ) 503

Gain on legal settlement ( 853 ) —

Gain on disposal of assets, net ( 165 ) ( 39,742 )

Stock compensation expense 864 1,064

1 unchanged sentence

Equity in earnings of investments, net ( 41 ) ( 253 )

Cash distributions from equity investments 220 132

Deferred income taxes ( 4,190 ) 6,827

4 unchanged sentences

Prepaid expenses and other current assets ( 196 ) 529

Income taxes payable ( 330 ) —

Other assets ( 85 ) ( 10 )

2 unchanged sentences

Other long-term liabilities ( 447 ) ( 430 )

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

Net cash used in operating activities ( 10,271 ) ( 21,190 )

Investing activities

1 unchanged sentence

Net proceeds from sales of assets 783 98,888

Net proceeds from legal settlement 853 —

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

1 unchanged sentence

Collection on notes receivable 66 —

Equity investment contributions ( 275 ) —

Equity investment contributions and capitalized interest ( 294 ) ( 275 )

Investments in mutual water companies and water rights ( 15 ) ( 11 )

Net cash provided by (used in) investing activities 92,358 ( 5,302 )

Net cash (used in) provided by investing activities ( 1,639 ) 99,110

Financing activities

1 unchanged sentence

Repayments of long-term debt ( 26,429 ) ( 122,692 )

Proceeds from equipment financings — 1,020

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

Principal paid on finance leases and equipment financings ( 121 ) ( 107 )

Dividends paid – common ( 1,350 ) ( 1,337 )

1 unchanged sentence

Exchange of common stock ( 684 ) —

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

Net cash provided by (used in) financing activities 8,815 ( 66,321 )

Effect of exchange rate changes on cash ( 9 ) 8

Net increase in cash 10,150 556

Net (decrease) increase in cash ( 3,104 ) 11,607

Cash at beginning of period 3,631 857

3 unchanged sentences

(in thousands)

Nine Months Ended

Three Months Ended

Supplemental disclosures of cash flow information

3 unchanged sentences

Capital expenditures accrued but not paid at period-end $ 116 $ 818

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

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

2 unchanged sentences

Organization and Basis of Presentation

Limoneira Company (together with its consolidated subsidiaries, the “Company”) engages primarily in growing citrus and avocados, picking and hauling citrus, and packing, marketing and selling citrus.

Limoneira Company (together with its consolidated subsidiaries, the “Company”) engages primarily in growing citrus and avocados, harvesting citrus, and packing, marketing and selling citrus.

The Company is also engaged in residential rentals and other rental operations and real estate development activities.

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

Through fiscal year 2023, the Company was a member of Sunkist Growers, Inc., an agricultural marketing cooperative, and sold 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 by component (in thousands):

Three Months Ended July 31,

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

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

Three Months Ended January 31,

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

Foreign currency translation adjustments $ ( 467 ) $ — $ ( 467 ) $ 2,223 $ — $ 2,223

Minimum pension liability adjustments:

Other comprehensive income before reclassifications — — — 99 ( 27 ) 72

Other comprehensive loss $ ( 485 ) $ — $ ( 485 ) $ ( 729 ) $ ( 27 ) $ ( 756 )

Other comprehensive (loss) income before reclassifications — — — ( 355 ) 135 ( 220 )

Amounts reclassified to earnings included in “Other income (expense), net” — — — 2,700 ( 756 ) 1,944

Other comprehensive (loss) income $ ( 467 ) $ — $ ( 467 ) $ 4,568 $ ( 621 ) $ 3,947

LIMONEIRA COMPANY

1 unchanged sentence

Summary of Significant Accounting Policies (continued)

Nine Months Ended July 31,

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

Foreign currency translation adjustments $ 1,688 $ — $ 1,688 $ ( 1,779 ) $ — $ ( 1,779 )

Minimum pension liability adjustments:

Other comprehensive (loss) income before reclassifications ( 355 ) 135 ( 220 ) 298 ( 81 ) 217

Amounts reclassified to earnings included in "Other income (expense), net" 2,700 ( 756 ) 1,944 — — —

Other comprehensive income (loss) $ 4,033 $ ( 621 ) $ 3,412 $ ( 1,481 ) $ ( 81 ) $ ( 1,562 )

Comprehensive (Loss) Income (continued)

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

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

Balance at October 31, 2023 $ ( 5,666 ) $ — $ ( 5,666 )

Other comprehensive loss ( 467 ) — ( 467 )

Balance at January 31, 2024 $ ( 6,133 ) $ — $ ( 6,133 )

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

1 unchanged sentence

Other comprehensive income 2,223 1,724 3,947

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

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

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

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

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

Balance at January 31, 2023 $ ( 3,961 ) $ — $ ( 3,961 )

COVID-19 Pandemic

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

The decline in demand for the Company's products has negatively impacted the Company's sales and profitability since the beginning of the second quarter of fiscal year 2020.

The COVID-19 pandemic may continue to impact the Company's sales and profitability in future periods.

The decline in demand for the Company's products as a result of the COVID-19 pandemic negatively impacted the Company's sales and profitability beginning in the second quarter of fiscal year 2020.

The export market for fresh produce continues to experience decreased demand and the COVID-19 pandemic may continue to impact the Company's sales and profitability in future periods.

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

Recent Accounting Pronouncements

Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures

ASU 2023-07 is intended to improve reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses, the chief operating decision maker (“CODM”), and how the CODM uses the reported measure(s) of segment profit or loss.

This amendment also requires that a public entity provide all annual disclosures about a reportable segment’s profit or loss and assets currently required by FASB Accounting Standards Codification Topic 280, Segment Reporting, in interim periods.

The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted.

A public entity should apply the amendments retrospectively to all prior periods presented in the financial statements.

The Company is currently evaluating the impact of this guidance on its consolidated financial statements.

ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures

ASU 2023-09 requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid.

The ASU is effective for public business entities with annual periods beginning after December 15, 2024, with early adoption permitted.

The Company is currently evaluating the impact of this guidance on its consolidated financial statements .

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 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.

The account balances at these institutions periodically exceed Federal Deposit Insurance Corporation (“FDIC”) insurance coverage and, as a result, there is a concentration of risk related to amounts on deposit in excess of FDIC insurance coverage.

One individual customer represented 13 % of revenue for the three months ended January 31, 2024.

Three individual customers represented 19 %, 16 % and 11 % of accounts receivable, net as of January 31, 2024.

One individual supplier represented 15 % of accounts payable as of January 31, 2024.

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Summary of Significant Accounting Policies (continued)

Concentrations (continued)

Lemons procured from third-party growers were 84 % and 66 % of the Company's lemon supply for the three months ended January 31, 2024 and 2023, respectively.

One third-party grower was 19 % of the lemon supply for the three months ended January 31, 2024.

The Company maintains its cash in federally insured financial institutions.

Asset Sales and Disposals

3 unchanged sentences

During the quarter ended April 30, 2023, the purchase price was decreased by $ 397,000 for reimbursement of certain cultural costs and prepaid expenses, resulting in a final purchase price of $ 100,008,000 .

After transaction costs the Company received net proceeds of $ 98,411,000 .

The following is a summary of the transaction (in thousands):

11 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 $ 1,667,000 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.

1 unchanged sentence

Further, on January 31, 2023, the Company entered into a Grower Packing and Marketing Agreement to provide packing, marketing and selling services for lemons harvested on the Northern Properties for a minimum five-year term, subject to certain benchmarking standards.

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 during the nine months ended July 31, 2023.

Yuma Property

In December 2023, the Company sold 12 acres of real property located in Yuma, Arizona for a sales price of $ 775,000 .

After transaction and closing costs, the Company recorded a gain on disposal of assets of approximately $ 187,000 during the quarter ended January 31, 2024.

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Prepaid Expenses and Other Current Assets

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

July 31, 2023 October 31, 2022

January 31, 2024 October 31, 2023

Prepaid supplies and insurance $ 2,401 $ 1,667

Real estate development held for sale — 2,670

Assets held for sale — 535

Sales tax receivable 287 490

Income tax receivable 815 816

Lemon supplier advances 412 791

1 unchanged sentence

$ 5,492 $ 5,588

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

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 $ 9,967,000 and $ 9,706,000 at July 31, 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 $ 9,980,000 and $ 9,987,000 as of January 31, 2024 and October 31, 2023, respectively.

East Area I, Retained Property and East Area II

4 unchanged sentences

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

The balance in East Area II includes estimated costs incurred by and reimbursable to LLCB of $ 3,444,000 as of January 31, 2024 and October 31, 2023, 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.

2 unchanged sentences

As of February 1, 2023, the interest rate on the Loan transitioned from the London Interbank Offered Rate (“LIBOR”) to the Bloomberg Short-Term Bank Yield Index rate (“BSBY”) plus 2.85 % and is payable monthly.

Effective as of February 22, 2024, the loan maturity date was extended to August 22, 2024 and the interest rate transitioned from the BSBY to the Secured Overnight Financing Rate ("SOFR") plus 2.85 %.

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 $ 15,000,000 as of July 31, 2023.

The Loan had no outstanding balance as of January 31, 2024.

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

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

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

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

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

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

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Real Estate Development (continued)

East Area I, Retained Property and East Area II (continued)

In October 2022, the Company entered into a joint venture with Lewis for the development of the Retained Property.

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 July 31, 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 January 31, 2024 and October 31, 2023.

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 nine months ended July 31, 2023.

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

The Company made contributions of $ 200,000 and $ 275,000 to LLCB II during the three months ended January 31, 2024 and 2023, respectively.

Through January 31, 2024, LLCB has closed on lot sales representing 707 residential units since inception.

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 nine months ended July 31, 2023.

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

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 three months ended January 31, 2023.

Equity in Investments

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

July 31, 2023 October 31, 2022

January 31, 2024 October 31, 2023

Limoneira Lewis Community Builders, LLC $ 66,359 $ 66,288

4 unchanged sentences

$ 79,057 $ 78,816

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 nine months ended July 31, 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 three months ended January 31, 2024, this threshold was met for LLCB and thus summarized income statement information is presented in this Quarterly Report on Form 10-Q.

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

Three Months Ended January 31,

Revenues $ 913 $ 344

Cost of land sold 800 —

Operating expenses 21 240

Net income $ 92 $ 104

Net income attributable to Limoneira Company $ 92 $ 104

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Goodwill and Intangible Assets, Net

3 unchanged sentences

Foreign currency translation adjustment ( 4 )

Balance at July 31, 2023 $ 1,524

Balance at January 31, 2024 $ 1,508

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 July 31, 2023.

There have been no impairment charges recorded against goodwill as of January 31, 2024.

Intangible assets consist of the following (in thousands):

July 31, 2023 October 31, 2022

January 31, 2024 October 31, 2023

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

$ 9,945 $ ( 3,526 ) $ 6,419 $ 10,004 $ ( 3,347 ) $ 6,657

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

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

Amortization expense totaled $ 179,000 and $ 197,000 for the three months ended January 31, 2024 and 2023, respectively.

Estimated future amortization expense of intangible assets as of January 31, 2024 is as follows (in thousands):

2024 (remaining nine months) $ 532

Thereafter 248

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.

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.

Amounts included in other assets in the consolidated balance sheets as of January 31, 2024 and October 31, 2023 were $ 6,168,000 and $ 5,703,000 , respectively.

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Accrued Liabilities

Accrued liabilities consist of the following (in thousands):

July 31, 2023 October 31, 2022

January 31, 2024 October 31, 2023

Compensation $ 2,333 $ 2,858

4 unchanged sentences

$ 8,084 $ 8,651

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Long-Term Debt

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

July 31, 2023 October 31, 2022

January 31, 2024 October 31, 2023

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 5.11 % at July 31, 2023, plus 1.78 %.

the interest rate of the revolving line of credit is variable based on the one-month SOFR, which was 5.35 % at January 31, 2024, 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.

1 unchanged sentence

$ 51,288 $ 40,000

AgWest Farm Credit term loan:

The interest rate was fixed at 3.24 %.

The loan was repaid in January 2023.

AgWest Farm Credit term loan:

The interest rate was fixed at 3.24 %.

The loan was repaid in January 2023.

AgWest Farm Credit term loan:

The interest rate was fixed at 2.77 % until July 1, 2025, becoming variable for the remainder of the loan.

The loan was repaid in January 2023.

AgWest Farm Credit term loan:

The interest rate was fixed at 3.19 %.

The loan was repaid in January 2023.

Banco de Chile term loan:

7 unchanged sentences

The loans are payable in monthly installments through September 2026.

Subtotal 41,170 105,902

Less deferred financing costs, net of accumulated amortization — 94

Total long-term debt, net 41,170 105,808

Total long-term debt 52,081 41,009

Less current portion 668 381

2 unchanged sentences

The MLA governs the terms of the Supplements.

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

In March 2020, the Company entered into a revolving equity line of credit promissory note and loan agreement with the Lender for a $ 15,000,000 Revolving Equity Line of Credit (the “RELOC”) secured by a first lien on the Windfall Investors, LLC property.

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

As of January 31, 2024, the Company's outstanding borrowings under the Supplements were $ 51,288,000 and it had $ 63,712,000 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 SOFR.

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

The applicable margin ranges from 1.68 % to 2.28 % depending on the ratio of current assets, plus the remaining available commitment divided by current liabilities.

On each one-year anniversary of July 1, the Company has the option to convert the interest rate in use under the Revolving Credit Supplement from the preceding SOFR-based calculation to a variable interest rate.

On each anniversary of July 1, the Company has the option to convert the interest rate in use under the Revolving Credit Supplement from the preceding SOFR-based calculation to a variable interest rate.

The Company may prepay any amounts outstanding under the Revolving Credit Supplement without penalty.

3 unchanged sentences

Thereafter, the Company may prepay any amounts outstanding under the Non-Revolving Credit Supplement, provided that a fee equal to 0.50 % of the amount prepaid and any other cost or loss suffered by the Lender must be paid with any prepayment.

All indebtedness under the MLA, including any indebtedness under the Supplements, is secured by a first lien on Company-owned stock or participation certificates, Company funds maintained with the Lender, the Lender’s unallocated surplus, and certain of the Company’s agricultural properties in Ventura counties in California and certain of the Company’s building fixtures and improvements and investments in mutual water companies associated with the pledged agricultural properties.

The MLA includes customary default provisions that provide should an event of default occur, the Lender, at its option, may declare all or any portion of the indebtedness under the MLA to be immediately due and payable without demand, notice of nonpayment, protest or prior recourse to collateral, and terminate or suspend the Company’s right to draw or request funds on any loan or line of credit.

All indebtedness under the MLA, including any indebtedness under the Supplements, is secured by a first lien on Company-owned stock or participation certificates, Company funds maintained with the Lender, the Lender’s unallocated surplus, certain of the Company’s agricultural properties, certain of the Company’s building fixtures and improvements, and investments in mutual water companies associated with the pledged agricultural properties.

The MLA includes customary default provisions.

Should an event of default occur, the Lender, at its option, may declare all or any portion of the indebtedness under the MLA to be immediately due and payable without demand, notice of nonpayment, protest or prior recourse to collateral, and terminate or suspend the Company’s right to draw or request funds on any loan or line of credit.

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 as of October 31, 2023, and annually thereafter.

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.

The Company is also subject to a financial covenant that requires it to maintain compliance with a specific debt service coverage ratio on an annual basis.

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

In December 2023, the Lender declared an annual cash patronage dividend of 1.25 % of average eligible loan balances and the Company received $ 300,000 in the second quarter of fiscal year 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.

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

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

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.

The Company capitalized interest of $ 56,000 and $ 347,000 during the three months ended January 31, 2024 and 2023, respectively.

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

Other Long-Term Liabilities

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

July 31, 2023 October 31, 2022

Minimum pension liability $ — $ 2,272

January 31, 2024 October 31, 2023

Loan guarantee 1,080 1,080

2 unchanged sentences

$ 4,224 $ 4,555

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Lessor Arrangements

2 unchanged sentences

All of the residential rentals have month-to-month lease terms.

The Company's rental operations revenue consists of the following (in thousands):

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Leases (continued)

Lessor Arrangements (continued)

T he Company's rental operations revenue consists of the following (in thousands):

Three Months Ended

July 31, Nine Months Ended

2023 2022 2023 2022

Operating lease revenue $ 1,292 $ 1,291

4 unchanged sentences

These lease contracts are classified as either operating or finance leases.

The Company’s lease contracts are generally for agricultural land and packinghouse facilities and equipment with remaining lease terms ranging from one to 15 years, with various term extensions available.

The Company’s lease agreements do not contain any residual value guarantees or material restrictive covenants.

The Company’s lease contracts are generally for agricultural land and packinghouse facilities and equipment with remaining lease terms ranging from one to four years , with various term extensions available.

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

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

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.

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

Lease costs consist of the following (in thousands):

Three Months Ended

Operating lease costs $ 499 $ 491

Finance lease costs:

Amortization of lease assets 47 33

Interest on lease liabilities 9 8

Variable lease costs ( 18 ) 145

Short-term lease costs 69 162

Total lease costs $ 606 $ 839

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

Classification July 31, 2023 October 31, 2022

Classification January 31, 2024 October 31, 2023

Operating lease ROU assets Other assets $ 3,399 $ 3,484

1 unchanged sentence

$ 4,533 $ 4,666

Liabilities and Stockholders' Equity

Current operating lease liabilities Accrued liabilities and payables to related parties $ 1,965 $ 1,892

Current operating lease liabilities Accrued liabilities $ 1,943 $ 1,831

Current finance lease liabilities Accrued liabilities 319 319

6 unchanged sentences

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

Nine Months Ended

Three Months Ended

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

8 unchanged sentences

Three Months Ended

July 31, Nine Months Ended

2023 2022 2023 2022

Basic net (loss) income per common share:

15 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 nine months ended July 31, 2023 and 2022.

Diluted net (loss) income per common share was calculated under the two-class method for the three months ended January 31, 2024 and 2023.

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):

July 31, 2023 October 31, 2022

January 31, 2024 October 31, 2023

Balance Sheet Balance Sheet

Ref Related-Party Receivable/Other from Related Parties Other Assets Payables to Related Parties Other Long-Term Liabilities Receivable/Other from Related Parties Other Assets Payables to Related Parties Other Long-Term Liabilities

2 Mutual water companies $ — $ 511 $ 261 $ — $ — $ 506 $ 133 $ —

5 Cadiz / Fenner / WAM $ — $ 1,226 $ 162 $ 1,137 $ — $ 1,288 $ 446 $ 1,198

8 FGF $ 2,815 $ 2,586 $ 837 $ — $ 2,965 $ 2,652 $ 837 $ —

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

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

Consolidated Statement of Operations Consolidated Statement of Operations

Ref Related-Party Net Revenue Agribusiness Net Revenue Other Operations Agribusiness Expense and Other Dividends Paid Net Revenue Agribusiness Net Revenue Other Operations Agribusiness Expense and Other Dividends Paid

1 Employees $ — $ 222 $ — $ — $ — $ 220 $ — $ —

Ref Related-Party Receivables/Other from Related Parties Other Assets Payables to Related Parties Receivables/Other from Related Parties Other Assets Payables to Related Parties

2 Mutual water companies $ — $ 465 $ 652 $ — $ 523 $ 48

3 Cooperative association $ — $ — $ 412 $ — $ — $ — $ 585 $ —

5 Cadiz / Fenner / WAM $ — $ — $ 206 $ — $ — $ 206

1 unchanged sentence

7 FGF $ 2,560 $ 2,519 $ 837 $ 2,681 $ 2,519 $ 837

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

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

8 LLCB $ — $ — $ 3,444 $ 66 $ — $ 3,444

10 Rosales $ 447 $ — $ — $ 896 $ — $ 270

Three Months Ended January 31, 2024 Three Months Ended January 31, 2023

Consolidated Statement of Operations Consolidated Statement of Operations

3 unchanged sentences

3 Cooperative association $ — $ — $ 489 $ — $ — $ — $ 393 $ —

4 Calavo $ — $ — $ — $ — $ — $ 80 $ 2 $ 126

5 Cadiz / Fenner / WAM $ — $ — $ — $ 93 $ — $ — $ 1,138 $ —

1 unchanged sentence

7 FGF $ 83 $ 50 $ — $ — $ 83 $ 74 $ 10 $ —

11 Third-party growers $ — $ — $ — $ — $ 104 $ — $ 12 $ —

9 Principal Owner $ — $ — $ — $ 224 $ — $ — $ — $ 209

10 Rosales $ 1,323 $ — $ 49 $ — $ — $ — $ — $ —

(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 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.

3 unchanged sentences

The Company purchased services and supplies from and had immaterial payments due to the cooperative association.

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Related-Party Transactions (continued)

(4) Calavo - Through January 2022, the Company had representation on the board of directors of Calavo.

Calavo owned common stock of the Company and the Company paid dividends on such common stock to Calavo.

Additionally, the Company leases office space to Calavo.

As of February 2022, Calavo is no longer a related-party.

(5) Cadiz / Fenner / WAM - A member of the Company’s board of directors serves as the CEO, President and a member of the board of directors of Cadiz, Inc.

(5) Cadiz / Fenner / WAM - A member of the Company’s board of directors served as the CEO, President and a member of the board of directors of Cadiz, Inc.

through December 31, 2023.

As of January 1, 2024, Cadiz, Inc.

is no longer a related-party.

In 2013, the Company entered a long-term lease agreement (the “Lease”) with Cadiz Real Estate, LLC (“Cadiz”), a wholly owned subsidiary of Cadiz, Inc., and leased 670 acres located in eastern San Bernardino County, California.

In 2016, Cadiz assigned this lease to Fenner Valley Farms, LLC (“Fenner”), a subsidiary of Water Asset Management, LLC (“WAM”).

As of the date of this lease assignment, the Company no longer has any related-party transactions with Cadiz.

As of the date of the lease assignment, the Company no longer had any related-party transactions with Cadiz.

An affiliate of WAM is the holder of 9,300 shares of the Company's Series B-2 convertible preferred stock.

The annual base rent is equal to the sum of $ 200 per planted acre and 20 % of gross revenues from the sale of harvested lemons (less operating expenses), not to exceed $ 1,200 per acre per year.

Upon the adoption of ASC 842, the Company recorded a right-of-use, or ROU, asset and corresponding lease liability.

The annual base rent was equal to the sum of $ 200 per planted acre and 20 % of gross revenues from the sale of harvested lemons (less operating expenses), not to exceed $ 1,200 per acre per year.

Upon the adoption of ASC 842, the Company recorded a ROU asset and corresponding lease liability, which were written off in fiscal year 2023 upon cessation of farming operations.

(6) Yuma Mesa Irrigation and Drainage District (“YMIDD”) - The Company has representation on the board of directors of YMIDD.

The Company purchased water from YMIDD and had no amounts payable to them for such purchases.

Additionally, the Company received fallowing revenue from YMIDD.

Additionally, the Company received fallowing revenue from YMIDD and has a receivable outstanding.

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Related-Party Transactions (continued)

(7) FGF - The Company advances funds to FGF for fruit purchases, which are recorded as an asset until the sales occur and the remaining proceeds become due to FGF.

3 unchanged sentences

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

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

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

(9) 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 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.

(10) Rosales - The Company has an equity interest in Rosales as further described in Note 6 - Equity in Investments.

The Company recognizes lemon sales to Rosales, procures lemons and oranges from Rosales and has amounts due to and due from Rosales for such sales and consignments.

The effective tax rate for the three months ended January 31, 2024 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, nondeductible tax items and valuation allowances on certain deferred tax assets of foreign subsidiaries.

The Company has no material uncertain tax positions as of January 31, 2024.

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 July 31, 2023.

There was no accrued interest or penalties associated with uncertain tax positions as of January 31, 2024.

Retirement Plans

8 unchanged sentences

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

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.

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Retirement Plans (continued)

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

Three Months Ended

July 31, Nine Months Ended

2023 2022 2023 2022

Administrative expenses $ — $ 20

2 unchanged sentences

Prior service cost — 4

Amortization of net loss — 99 — 298

Settlement loss recognized — 2,700

Net periodic benefit cost $ — $ 2,741

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Commitments and Contingencies

2 unchanged sentences

Legal claims are inherently uncertain, however, and it is possible that the Company’s business, financial condition, liquidity and/or operating results could be adversely affected in the future by legal proceedings.

The Company was party to a lawsuit, initiated on March 27, 2018, against Southern California Edison in Superior Court of the State of California, County of Los Angeles whereby the Company claimed unspecified damages, attorneys’ fees and other costs, as a result of the Thomas Fire in fiscal year 2018.

On April 18, 2023, the Company entered into a Confidential Settlement Agreement and Release (the “Settlement Agreement”) with Southern California Edison Company and Edison International to formally resolve any and all claims related to the fire.

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 was recorded in agribusiness revenues and $ 2,269,000 was recorded in gain on legal settlement as of April 30, 2023.

Stock-based Compensation

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

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

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

1 unchanged sentence

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 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.

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 have been met, and generally vest over a two-year period as service is provided.

During December 2023, 36,127 shares of common stock with a per share price of $ 19.57 were granted to management under the Stock Plan for fiscal year 2023 performance, resulting in total compensation expense of approximately $ 707,000 , with $ 293,000 recognized in the fiscal year ended October 31, 2023, and the balance will be recognized over the next two years as the shares vest.

Executive Awards

1 unchanged sentence

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.

During November 2023, the Company granted 53,078 shares of common stock with a per share price of $ 14.13 to key executives under the Stock Plan.

The related compensation expense of approximately $ 750,000 will be recognized equally over the next three years as the shares vest.

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Stock-based Compensation (continued)

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, 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.

During December 2023, the Company granted 12,709 shares of common stock with a per share price of $ 19.57 to key executives related to the Retention Bonus Agreements.

The related compensation expense of approximately $ 249,000 had $ 115,000 recognized in the fiscal year ended October 31, 2023, and the balance will be recognized over the next year as the shares vest.

During March 2023, the Company granted 127,064 shares of restricted stock with a per share price of $ 15.74 to key executives related to the Retention Bonus Agreements.

The related compensation expense of approximately $ 2,000,000 will be recognized over the next year as the shares vest.

In November 2023, the Company entered into Performance Share-Based Award Agreements with key executives whereby the executives may be granted performance shares in the future based on the achievement of certain long-term performance goals.

The Company recorded $ 80,000 of stock compensation expense related to these awards during the three months ended January 31, 2024 .

Director Awards

The Company issues shares of restricted stock to non-employee directors under the Stock Plan on an annual basis that generally vest over a one-year period (“Director Awards”).

During March 2023, 22,836 shares of restricted stock were granted with a per share price of $ 16.26 as Director Awards, which vest over a one-year period from date of grant.

The related compensation expense of approximately $ 371,000 will be recognized equally over the next year as the shares vest.

The Company issues shares of common stock to non-employee directors under the Stock Plan on an annual basis that generally vest over a one-year period (“Director Awards”).

During January 2024, 609 shares of common stock were granted as Director Awards with a per share price of $ 20.37 .

Exchange of Common Stock

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.

During the three months ended January 31, 2024 and 2023, members of management exchanged 36,097 and zero shares of common stock with fair values totaling $ 684,000 and zero , respectively, at the dates of the exchanges, for the payment of payroll taxes associated with the vesting of shares under the Stock Plan.

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Segment Information

3 unchanged sentences

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

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

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

The lemon packing segment includes packing revenues and lemon packing costs.

The lemon packing segment revenues include intersegment revenues between fresh lemons and lemon packing.

1 unchanged sentence

The avocados segment includes sales, farming and harvest costs.

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

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

During fiscal year 2024, the Company changed its reporting of other revenue and other costs and includes these items in the other agribusiness segment instead of the fresh lemons segment.

Prior year's information has been restated to conform to the current year's presentation.

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

1 unchanged sentence

The Company measures operating performance, including revenues and operating income, of its operating segments and allocates resources based on its evaluation.

The Company does not allocate selling, general and administrative expense, gain on disposal of assets, gain on legal settlement, total other income (expense) and income taxes, or specifically identify them to its operating segments.

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

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

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

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Segment Information (continued)

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

Segment information for the three months ended January 31, 2024 is as follows (in thousands):

Packing Eliminations

9 unchanged sentences

Operating (loss) income $ ( 1,457 ) $ 1,590 $ — $ — $ 836 $ ( 775 ) $ ( 6,970 ) $ ( 7,745 )

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

Packing Eliminations

Avocados Other

Agribusiness Total

Agribusiness Corporate

and Other Total

Revenues from external customers $ 33,823 $ 6,337 $ — $ 12,578 $ 4,856 $ 57,594 $ 1,329 $ 58,923

Intersegment revenue — 9,696 ( 9,696 ) — — — — —

Total net revenues 33,823 16,033 ( 9,696 ) 12,578 4,856 57,594 1,329 58,923

Costs and expenses 32,600 11,953 ( 9,696 ) 3,154 1,280 39,291 6,103 45,394

Depreciation and amortization — — — — — 2,172 297 2,469

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

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

Packing Eliminations

Avocados Other

Agribusiness Total

Agribusiness Corporate

and Other Total

Revenues from external customers $ 94,913 $ 17,543 $ — $ 7,065 $ 14,775 $ 134,296 $ 4,172 $ 138,468

Intersegment revenue — 27,356 ( 27,356 ) — — — — —

Total net revenues 94,913 44,899 ( 27,356 ) 7,065 14,775 134,296 4,172 138,468

Costs and expenses (gains) 94,035 36,568 ( 27,356 ) 4,053 13,365 120,665 ( 9,180 ) 111,485

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

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):

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

Packing Eliminations

8 unchanged sentences

Depreciation and amortization — — — — — 2,135 312 2,447

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

Operating (loss) income $ ( 4,993 ) $ 1,658 $ — $ — $ 757 $ ( 4,713 ) $ 30,597 $ 25,884

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 $ 1,141 $ 1,152

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

Specialty citrus and other crops 1,086 1,247

Farm management 2,048 —

Other 1,088 1,160

Other agribusiness revenues $ 5,363 $ 3,559

2 unchanged sentences

Subsequent Events

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.

The Company evaluated events subsequent to January 31, 2024 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 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