What changed in this filing

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Item 1. Financial Statements

2024-06-06 compared with 2024-03-07 · 246 added, 135 removed, 552 unchanged (41% of the section changed)

3 unchanged sentences

(in thousands, except share and per share data)

January 31, 2024 October 31, 2023

April 30, 2024 October 31, 2023

Current assets:

27 unchanged sentences

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

14,790 shares issued and outstanding at January 31, 2024 and October 31, 2023) ( 8.75 % coupon rate)

14,790 shares issued and outstanding at April 30, 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 January 31, 2024 and October 31, 2023) ( 4 % dividend rate on liquidation value of $ 1,000 per share)

9,300 shares issued and outstanding at April 30, 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 January 31, 2024 and October 31, 2023)

zero issued or outstanding at April 30, 2024 and October 31, 2023)

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

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)

18,223,633 and 18,192,009 shares issued and 17,972,656 and 17,941,032 shares outstanding at April 30, 2024 and October 31, 2023, respectively)

Additional paid-in capital 168,540 168,441

1 unchanged sentence

Accumulated other comprehensive loss ( 6,370 ) ( 5,666 )

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

Treasury stock, at cost, 250,977 shares at April 30, 2024 and October 31, 2023

( 3,493 ) ( 3,493 )

7 unchanged sentences

Three Months Ended

April 30, Six Months Ended

2024 2023 2024 2023

Net revenues:

5 unchanged sentences

Other operations 1,429 1,009 2,611 2,247

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

Loss (gain) on disposal of assets, net 48 8,998 ( 117 ) ( 30,744 )

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

Selling, general and administrative 7,368 6,005 14,713 15,285

1 unchanged sentence

Operating (loss) income ( 4,675 ) ( 3,862 ) ( 12,420 ) 22,022

Other (expense) income:

Other income (expense):

Interest income 14 62 36 70

2 unchanged sentences

Other income (expense), net 197 200 219 ( 2,412 )

Total other expense ( 122 ) ( 3,523 )

(Loss) income before income tax benefit (provision) ( 7,867 ) 22,361

Income tax benefit (provision) 4,190 ( 6,827 )

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

Total other income (expense) 16,452 1,320 16,330 ( 2,203 )

Income (loss) before income tax (provision) benefit 11,777 ( 2,542 ) 3,910 19,819

Income tax (provision) benefit ( 5,222 ) 912 ( 1,032 ) ( 5,915 )

Net income (loss) 6,555 ( 1,630 ) 2,878 13,904

Net loss attributable to noncontrolling interest 12 17 104 114

Net (loss) income attributable to Limoneira Company ( 3,585 ) 15,631

Net income (loss) attributable to Limoneira Company 6,567 ( 1,613 ) 2,982 14,018

Preferred dividends ( 126 ) ( 126 ) ( 251 ) ( 251 )

Net (loss) income applicable to common stock $ ( 3,710 ) $ 15,506

Basic net (loss) income per common share $ ( 0.21 ) $ 0.87

Diluted net (loss) income per common share $ ( 0.21 ) $ 0.84

Net income (loss) applicable to common stock $ 6,441 $ ( 1,739 ) $ 2,731 $ 13,767

Basic net income (loss) per common share $ 0.36 $ ( 0.10 ) $ 0.15 $ 0.77

Diluted net income (loss) per common share $ 0.35 $ ( 0.10 ) $ 0.15 $ 0.75

Weighted-average common shares outstanding-basic 17,707 17,597 17,677 17,587

2 unchanged sentences

LIMONEIRA COMPANY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (UNAUDITED)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

(in thousands)

Three Months Ended

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

April 30, Six Months Ended

2024 2023 2024 2023

Net income (loss) $ 6,555 $ ( 1,630 ) $ 2,878 $ 13,904

Other comprehensive (loss) income, net of tax:

Foreign currency translation adjustments ( 237 ) ( 50 ) ( 704 ) 2,173

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

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

Minimum pension liability adjustments, net of tax of $( 135 ) for the six months ended April 30, 2023

— — — ( 220 )

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

Total other comprehensive (loss) income, net of tax ( 237 ) ( 50 ) ( 704 ) 3,897

Comprehensive (loss) income ( 4,144 ) 19,481

Comprehensive income (loss) 6,318 ( 1,680 ) 2,174 17,801

Comprehensive loss attributable to noncontrolling interest 12 17 104 114

Comprehensive (loss) income attributable to Limoneira Company $ ( 4,052 ) $ 19,578

Comprehensive income (loss) attributable to Limoneira Company $ 6,330 $ ( 1,663 ) $ 2,278 $ 17,915

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

21 unchanged sentences

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

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 30,808 1 1,070 — — — — 1,071 — —

Exchange of common stock ( 63,070 ) ( 1 ) ( 1,150 ) — — — — ( 1,151 ) — —

Net income (loss) — — — 6,567 — — ( 12 ) 6,555 — —

Other comprehensive loss, net of tax — — — — ( 237 ) — — ( 237 ) — —

Balance at April 30, 2024 17,972,656 $ 180 $ 168,540 $ 19,050 $ ( 6,370 ) $ ( 3,493 ) $ 11,045 $ 188,952 $ 1,479 $ 9,331

Stockholders' Equity Temporary Equity

13 unchanged sentences

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

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

Net income (loss) — — — 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 ( 1,594 ) — ( 26 ) — — — — ( 26 ) — —

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

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

2 unchanged sentences

(in thousands)

Three Months Ended

Six Months Ended

Operating activities

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

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

Net income $ 2,878 $ 13,904

Adjustments to reconcile net income to net cash used in operating activities:

Depreciation and amortization 4,158 4,491

Gain on disposal of assets, net ( 117 ) ( 30,744 )

Gain on legal settlement — ( 853 )

Stock compensation expense 1,935 2,029

10 unchanged sentences

Accrued liabilities and payables to related parties 1,923 ( 2,708 )

Income taxes payable ( 259 ) ( 330 )

Other long-term liabilities ( 900 ) ( 840 )

24 unchanged sentences

(in thousands)

Three Months Ended

Six Months Ended

Supplemental disclosures of cash flow information

Cash paid during the period for interest (net of amounts capitalized) $ 451 $ 397

Cash paid during the period for income taxes $ — $ —

Cash paid during the period for income taxes, net $ 259 $ 330

Non-cash investing and financing activities:

19 unchanged sentences

Summary of Significant Accounting Policies

Comprehensive (Loss) Income

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

Comprehensive Income (Loss)

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

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

1 unchanged sentence

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

Three Months Ended January 31,

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

Three Months Ended April 30,

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

Foreign currency translation adjustments $ ( 237 ) $ — $ ( 237 ) $ ( 50 ) $ — $ ( 50 )

Other comprehensive loss $ ( 237 ) $ — $ ( 237 ) $ ( 50 ) $ — $ ( 50 )

Six Months Ended April 30,

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

Foreign currency translation adjustments $ ( 704 ) $ — $ ( 704 ) $ 2,173 $ — $ 2,173

Minimum pension liability adjustments:

5 unchanged sentences

Summary of Significant Accounting Policies (continued)

Comprehensive (Loss) Income (continued)

Comprehensive Income (Loss) (continued)

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

2 unchanged sentences

Other comprehensive loss ( 704 ) — ( 704 )

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

Balance at April 30, 2024 $ ( 6,370 ) $ — $ ( 6,370 )

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

1 unchanged sentence

Other comprehensive income 2,173 1,724 3,897

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

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

COVID-19 Pandemic

16 unchanged sentences

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 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.

SEC Release No.

The Enhancement and Standardization of Climate-Related Disclosures for Investors

In March 2024, the SEC adopted final rules under SEC Release No.

The Enhancement and Standardization of Climate-Related Disclosures for Investors , which requires registrants to provide certain climate-related information in their registration statements and annual reports.

The rules require information about a registrant's climate-related risks that are reasonably likely to have a material impact on its business, results of operations, or financial condition.

These requirements are effective for the Company in various fiscal years, starting with its fiscal year beginning November 1, 2026.

On April 4, 2024, the SEC determined to voluntarily stay the final rules pending certain legal challenges.

The Company is currently evaluating the impact of these final rules on its consolidated financial statements and disclosures.

LIMONEIRA COMPANY

1 unchanged sentence

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.

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 14 % of revenue for the six months ended April 30, 2024.

Two individual customers represented 20 % and 11 % of accounts receivable, net as of April 30, 2024.

One individual vendor represented 26 % of accounts payable as of April 30, 2024.

Lemons procured from third-party growers were 79 % and 57 % of the Company's lemon supply for the six months ended April 30, 2024 and 2023, respectively.

One third-party grower was 20 % of the Company's lemon supply for the six months ended April 30, 2024.

The Company maintains its cash in federally insured financial institutions.

20 unchanged sentences

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.

The FMA has an initial term expiring March 31, 2024, and thereafter continuing from year to year unless earlier terminated under the terms of the FMA.

The FMA had an initial term expiring March 31, 2024, and thereafter continues from year to year unless earlier terminated under the terms of the FMA.

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.

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Asset Sales and Disposals (continued)

Yuma Property

1 unchanged sentence

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)

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 at the Cadiz Ranch, disposed of the related property, plant and equipment and recorded a loss on disposal of assets of $ 9,012,000 during the quarter ended April 30, 2023.

Prepaid Expenses and Other Current Assets

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

January 31, 2024 October 31, 2023

April 30, 2024 October 31, 2023

Prepaid supplies and insurance $ 2,660 $ 1,667

1 unchanged sentence

Sales tax receivable 166 490

Income tax receivable 815 816

Income taxes receivable — 816

Lemon supplier advances 472 791

2 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 $ 9,980,000 and $ 9,987,000 as of January 31, 2024 and October 31, 2023, respectively.

Real estate development assets are comprised primarily of land and land development costs for the East Area II property in the amount of $ 9,995,000 and $ 9,987,000 as of April 30, 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 as of January 31, 2024 and October 31, 2023, 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 April 30, 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.

4 unchanged sentences

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

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

As of April 30, 2024, the Loan had no outstanding balance and LLCB had unaudited cash and cash equivalents of $ 102,078,000 .

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Real Estate Development (continued)

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

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

3 unchanged sentences

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 January 31, 2024 and October 31, 2023.

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

The Company made contributions of $ 200,000 and $ 275,000 to LLCB II during the six months ended April 30, 2024 and 2023, respectively.

Through April 30, 2024, LLCB closed on lot sales representing 1,261 residential units since inception, including 554 residential units in the second quarter of fiscal year 2024.

In June 2024, the Company received a cash distribution of $ 15,005,000 from LLCB.

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 three months ended January 31, 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 six months ended April 30, 2023.

Equity in Investments

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

January 31, 2024 October 31, 2023

April 30, 2024 October 31, 2023

Limoneira Lewis Community Builders, LLC $ 82,953 $ 66,288

8 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 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.

During the year-to-date interim period for the six months ended April 30, 2024, this threshold was met for LLCB and thus summarized income statement information is presented in this Quarterly Report on Form 10-Q.

The full audited financial statements of LLCB for the years ended October 31, 2023, 2022 and 2021 were provided as exhibits to the Annual Report on Form 10-K for the fiscal year ended October 31, 2023.

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Equity in Investments (continued)

Unconsolidated Significant Subsidiary (continued)

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

Three Months Ended January 31,

Six Months Ended

Revenues $ 94,540 $ 678

3 unchanged sentences

Net income attributable to Limoneira Company $ 19,455 $ 270

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

April 30, 2024 October 31, 2023

Cash and cash equivalents $ 102,078 $ 12,863

Unsecured line of credit $ — $ —

Goodwill and Intangible Assets, Net

3 unchanged sentences

Foreign currency translation adjustment ( 7 )

Balance at January 31, 2024 $ 1,508

Balance at April 30, 2024 $ 1,505

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 January 31, 2024.

There have been no impairment charges recorded against goodwill as of April 30, 2024.

Intangible assets consist of the following (in thousands):

January 31, 2024 October 31, 2023

April 30, 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

$ 9,913 $ ( 3,703 ) $ 6,210 $ 10,004 $ ( 3,347 ) $ 6,657

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

Amortization expense totaled $ 177,000 and $ 178,000 for the three months ended April 30, 2024 and 2023, respectively.

Amortization expense totaled $ 356,000 and $ 375,000 for the six months ended April 30, 2024 and 2023, respectively.

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Goodwill and Intangible Assets, Net (continued)

Estimated future amortization expense of intangible assets as of April 30, 2024 is as follows (in thousands):

2024 (remaining six months) $ 355

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 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)

Amounts included in other assets in the consolidated balance sheets as of April 30, 2024 and October 31, 2023 were $ 6,200,000 and $ 5,703,000 , respectively.

Accrued Liabilities

Accrued liabilities consist of the following (in thousands):

January 31, 2024 October 31, 2023

April 30, 2024 October 31, 2023

Compensation $ 3,549 $ 2,858

2 unchanged sentences

Leases 2,237 2,150

Income taxes payable 761 —

Other 1,301 872

2 unchanged sentences

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

January 31, 2024 October 31, 2023

April 30, 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 SOFR, which was 5.35 % at January 31, 2024, plus 1.78 %.

the interest rate of the revolving line of credit is variable based on the one-month SOFR, which was 5.33 % at April 30, 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.

13 unchanged sentences

Long-term debt, less current portion $ 59,503 $ 40,628

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Long-Term Debt (continued)

The Company entered into a Master Loan Agreement (the “MLA”) with AgWest Farm Credit, formerly known as Farm Credit West, (the “Lender”) dated June 1, 2021, together with a revolving credit facility supplement (the “Revolving Credit Supplement”), a non-revolving credit facility supplement (the “Non-Revolving Credit Supplement,” and together with the Revolving Credit Supplement, the “Supplements”) and an agreement to convert to a fixed interest rate for a period of time as described in the table above (“Fixed Interest Rate Agreement”).

4 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 January 31, 2024, the Company's outstanding borrowings under the Supplements were $ 51,288,000 and it had $ 63,712,000 available to borrow.

As of April 30, 2024, the Company's outstanding borrowings under the Supplements were $ 59,417,000 and it had $ 55,583,000 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.

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Long-Term Debt (continued)

The interest rate in effect under the Revolving Credit Supplement automatically adjusts on the first day of each month.

17 unchanged sentences

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

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

The Company capitalized interest of $ 98,000 and zero during the three months ended April 30, 2024 and 2023, and $ 154,000 and $ 306,000 for the six months ended April 30, 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.

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Other Long-Term Liabilities

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

January 31, 2024 October 31, 2023

April 30, 2024 October 31, 2023

Loan guarantee 1,080 1,080

6 unchanged sentences

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

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):

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

Three Months Ended

April 30, Six Months Ended

2024 2023 2024 2023

Operating lease revenue $ 1,274 $ 1,274 $ 2,566 $ 2,564

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 four years , with various term extensions available.

The Company’s lease contracts are generally for agricultural land, packinghouse facilities, equipment and vehicles 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.

2 unchanged sentences

Three Months Ended

April 30, Six Months Ended

2024 2023 2024 2023

Operating lease costs $ 519 $ 491 $ 1,018 $ 982

5 unchanged sentences

Total lease costs $ 612 $ 472 $ 1,217 $ 1,312

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Leases (continued)

Lessee Arrangements (continued)

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

Classification January 31, 2024 October 31, 2023

Classification April 30, 2024 October 31, 2023

Operating lease ROU assets Other assets $ 3,274 $ 3,484

6 unchanged sentences

$ 3,895 $ 4,466

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Leases (continued)

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

Three Months Ended

Six Months Ended

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

3 unchanged sentences

ROU assets obtained in exchange for new operating lease liabilities $ 689 $ 114

Basic and Diluted Net (Loss) Income Per Share

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

Diluted net (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 data):

Leased assets obtained in exchange for new finance lease liabilities $ 494 $ —

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Basic and Diluted Net Income (Loss) Per Share

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

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

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

Three Months Ended

Basic net (loss) income per common share:

Net (loss) income applicable to common stock $ ( 3,710 ) $ 15,506

April 30, Six Months Ended

2024 2023 2024 2023

Basic net income (loss) per common share:

Net income (loss) applicable to common stock $ 6,441 $ ( 1,739 ) $ 2,731 $ 13,767

Effect of unvested, restricted stock ( 101 ) ( 23 ) ( 47 ) ( 188 )

Net (loss) income for basic EPS ( 3,737 ) 15,345

Net income (loss) for basic EPS 6,340 ( 1,762 ) 2,684 13,579

Weighted average common shares–basic 17,707 17,597 17,677 17,587

Basic net (loss) income per common share $ ( 0.21 ) $ 0.87

Diluted net (loss) income per common share:

Net (loss) income for basic EPS $ ( 3,737 ) $ 15,345

Basic net income (loss) per common share $ 0.36 $ ( 0.10 ) $ 0.15 $ 0.77

Diluted net income (loss) per common share:

Net income (loss) for basic EPS $ 6,340 $ ( 1,762 ) $ 2,684 $ 13,579

Effect of dilutive preferred stock 126 — — 251

Net (loss) income for diluted EPS ( 3,737 ) 15,470

Net income (loss) for diluted EPS 6,466 ( 1,762 ) 2,684 13,830

Weighted average common shares–basic 17,707 17,597 17,677 17,587

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Weighted average common shares–diluted 18,362 17,597 17,677 18,328

Diluted net (loss) income per common share $ ( 0.21 ) $ 0.84

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

Diluted net income (loss) per common share $ 0.35 $ ( 0.10 ) $ 0.15 $ 0.75

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

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

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

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

Diluted net income (loss) per common share was calculated under the two-class method for the three and six months ended April 30, 2024 and 2023.

LIMONEIRA COMPANY

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

January 31, 2024 October 31, 2023

April 30, 2024 October 31, 2023

Balance Sheet Balance Sheet

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10 Rosales $ 450 $ — $ — $ 896 $ — $ 270

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

Three Months Ended April 30, 2024 Three Months Ended April 30, 2023

Consolidated Statement of Operations Consolidated Statement of Operations

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10 Rosales $ 1,861 $ — $ — $ — $ — $ — $ — $ —

Six Months Ended April 30, 2024 Six Months Ended April 30, 2023

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 $ — $ 455 $ — $ — $ — $ 444 $ — $ —

2 Mutual water companies $ — $ — $ 574 $ — $ — $ — $ 778 $ —

3 Cooperative association $ — $ — $ 559 $ — $ — $ — $ 866 $ —

5 Cadiz / Fenner / WAM $ — $ — $ — $ 186 $ — $ — $ 1,555 $ —

6 YMIDD $ 629 $ — $ 62 $ — $ 270 $ — $ 72 $ —

7 FGF $ 165 $ 100 $ — $ — $ 116 $ 124 $ — $ —

9 Principal Owner $ — $ — $ — $ 450 $ — $ — $ — $ 431

10 Rosales $ 3,184 $ — $ 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.

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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)

(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.

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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.

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

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.

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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.

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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 effective tax rate for the six months ended April 30, 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 April 30, 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 January 31, 2024.

There was no accrued interest or penalties associated with uncertain tax positions as of April 30, 2024.

Retirement Plans

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

During the three months ended January 31, 2023, the Company made funding contributions of $ 2,500,000 to fully fund and settle the plan obligations.

During the six months ended April 30, 2023, the Company made funding contributions of $ 2,500,000 to fully fund and settle the plan obligations.

Lump sum payments were made to a portion of the active and vested terminated participants and annuities were purchased for all remaining participants from an insurance company.

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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

Six Months Ended

Administrative expenses $ — $ 20

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Net periodic benefit cost $ — $ 2,741

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Commitments and Contingencies

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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

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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 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.

These 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 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.

During April 2024, 4,330 shares of stock with a weighted average per share price of $ 19.49 were granted to management under the Stock Plan and vested upon issuance.

Executive Awards

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

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.

During November 2023, the Company granted 53,078 shares of 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)

Executive Awards (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 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.

During December 2023, the Company granted 12,709 shares of 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.

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 .

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

The Company recorded $ 175,000 of stock compensation expense related to these awards during the six months ended April 30, 2024.

Director Awards

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 .

Certain restricted stock grants are made to non-employee directors under the Stock Plan on an annual basis that generally vest after a one-year period (“Director Awards”).

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

During March 2024, an additional 26,478 shares of stock were granted as Director Awards with a per share price of $ 19.26 .

Exchange of Common Stock

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)

During the six months ended April 30, 2024 and 2023, members of management exchanged 99,167 and 1,594 shares of common stock with fair values totaling $ 1,835,000 and $ 26,000 , 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 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 or loss on disposal of assets, 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, gain on legal settlement, 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.

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

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Segment Information (continued)

Segment information for the three months ended April 30, 2024 is as follows (in thousands):

Packing Eliminations

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Operating (loss) income $ 1,972 $ 2,290 $ — $ 923 $ ( 576 ) $ 2,821 $ ( 7,496 ) $ ( 4,675 )

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

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

Packing Eliminations

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Operating (loss) income $ 2,723 $ 4,657 $ — $ 2,580 $ 267 $ 8,487 $ ( 12,349 ) $ ( 3,862 )

Segment information for the six months ended April 30, 2024 is as follows (in thousands):

Packing Eliminations

Avocados Other

Agribusiness Total

Agribusiness Corporate

and Other Total

Revenues from external customers $ 58,225 $ 10,556 $ — $ 2,348 $ 10,467 $ 81,596 $ 2,741 $ 84,337

Intersegment revenue — 17,630 ( 17,630 ) — — — — —

Total net revenues 58,225 28,186 ( 17,630 ) 2,348 10,467 81,596 2,741 84,337

Costs and expenses 57,710 24,306 ( 17,630 ) 1,425 10,207 76,018 16,581 92,599

Depreciation and amortization — — — — — 3,532 626 4,158

Operating (loss) income $ 515 $ 3,880 $ — $ 923 $ 260 $ 2,046 $ ( 14,466 ) $ ( 12,420 )

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

Packing Eliminations

Avocados Other

Agribusiness Total

Agribusiness Corporate

and Other Total

Revenues from external customers $ 59,263 $ 12,071 $ — $ 3,603 $ 8,267 $ 83,204 $ 2,767 $ 85,971

Intersegment revenue — 17,672 ( 17,672 ) — — — — —

Total net revenues 59,263 29,743 ( 17,672 ) 3,603 8,267 83,204 2,767 85,971

Costs and expenses (gains) 61,533 23,428 ( 17,672 ) 1,023 7,243 75,555 ( 16,097 ) 59,458

Depreciation and amortization — — — — — 3,875 616 4,491

Operating income (loss) $ ( 2,270 ) $ 6,315 $ — $ 2,580 $ 1,024 $ 3,774 $ 18,248 $ 22,022

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

April 30, Six Months Ended

2024 2023 2024 2023

Oranges $ 1,160 $ 1,383 $ 2,301 $ 2,535

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Subsequent Events

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.

The Company evaluated events subsequent to April 30, 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