What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-06-06 compared with 2024-03-07 · 300 added, 126 removed, 265 unchanged (62% of the section changed)

3 unchanged sentences

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

We are one of California’s oldest citrus growers.

According to Sunkist Growers, Inc., we are one of the largest growers of lemons in the United States and, according to the California Avocado Commission, one of the largest growers of avocados in the United States.

We are one of California’s oldest citrus growers and are one of the largest growers of lemons in the United States.

According to the California Avocado Commission, we are one of the largest growers of avocados in the United States.

In addition to growing lemons and avocados, we grow oranges and other crops.

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Our Windfall Farms property located in San Luis Obispo County, California obtains water from wells that derive water from the Paso Robles Basin (aquifer).

Our Associated farming operations in Yuma, Arizona source water from the Colorado River through the YMIDD, where we have access to approximately 11,700 acre-feet of Class 3 Colorado River water rights.

Our farming operations in Yuma, Arizona source water from the Colorado River through the YMIDD, where we have access to approximately 11,700 acre-feet of Class 3 Colorado River water rights.

We use ground water provided by wells and surface water for our PDA and San Pablo farming operations in La Serena, Chile and our Trapani Fresh farming operations in Argentina.

California experienced above average precipitation during the 2022 - 2023 rainfall season after experiencing three years of below average precipitation and drought conditions.

California received above average precipitation during the 2022 - 2023 rainfall season and is experiencing above average precipitation for the 2023 - 2024 rainfall season, after experiencing three years of below average precipitation and drought conditions.

The above average precipitation helped to alleviate the drought conditions in California.

As of January 31, 2024, the state was free from moderate drought conditions and Ventura County was free from any drought conditions.

As of April 30, 2024, the state was free from moderate drought conditions and Ventura County was free from any drought conditions.

We continue to assess the impact drought conditions may have on our California orchards.

In August 2023, the U.S.

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

In August 2022, the Bureau announced Lake Mead to operate in a Tier 2 shortage, which further increased water restrictions.

As a result, in January 2023, Arizona forfeited approximately 21% of the state's yearly allotment of water from Lake Mead.

In August 2023, the Bureau announced Lake Mead will operate in a Tier 1 shortage in 2024, which requires Arizona to forfeit approximately 18% of the state's yearly allotment of water from Lake Mead.

In response to these water shortages, we entered into fallowing agreements during fiscal years 2023 and 2022 and continue to assess the impact these reductions may have on our Arizona orchards.

Bureau of Reclamation announced that Lake Mead will operate in a Tier 1 shortage in 2024, which requires Arizona to forfeit approximately 18% of the state's yearly allotment of water from Lake Mead.

In response to this and prior year water shortages, we entered into fallowing agreements during fiscal years 2023 and 2022 and continue to assess the impact these reductions may have on our Arizona orchards.

Recent Developments

5 unchanged sentences

After transaction and closing costs, we recorded a gain on sale of approximately $0.2 million.

On December 19, 2023, we declared a cash dividend of $0.075 per common share paid on January 12, 2024, in the aggregate amount of approximately $1.3 million to stockholders of record as of January 2, 2024.

On April 5, 2024, we declared a cash dividend of $0.075 per common share paid on April 12, 2024, in the aggregate amount of approximately $1.3 million to stockholders of record as of April 1, 2024.

In April 2024, the Company conducted an organization restructuring which resulted in severance benefits of approximately $1.2 million.

On April 30, 2024, our real estate development joint venture with The Lewis Group of Companies (“Lewis”) closed an additional 554 residential homesites at the Harvest at Limoneira master planned community in Santa Paula, CA (“Harvest”) and we recorded equity in earnings of investments of $16.6 million in the second quarter of fiscal year 2024.

On June 5, 2024, we received a cash distribution of $15.0 million from the joint venture.

On May 7, 2024, we announced that the Santa Paula City Council has approved the proposal brought forward by the Company's real estate development joint venture with Lewis to increase the number of entitled lots at Harvest from 1,500 dwelling units to 2,050 dwelling units.

The Santa Paula City Council approved an amendment allowing for the 550-unit increase on April 3, 2024.

The 550-unit increase will provide 250 additional single family for-sale homesites within Phase 3 of Harvest.

Additionally, the Company in partnership with Lewis plans to construct 300 multi-family rental homes on a mixed-use portion of the project.

COVID-19 Pandemic

11 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

3 unchanged sentences

Other operations (80) 385 130 520

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)

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

Non-GAAP Financial Measures

Due to significant depreciable assets associated with the nature of our operations and interest costs associated with our capital structure, management believes that earnings before interest, income taxes, depreciation and amortization (“EBITDA”) and adjusted EBITDA, which excludes stock-based compensation, pension settlement cost, gain on disposal of assets, net, and cash bonus related to sale of assets are important measures to evaluate our results of operations between periods on a more comparable basis.

Due to significant depreciable assets associated with the nature of our operations and interest costs associated with our capital structure, management believes that earnings before interest, income taxes, depreciation and amortization (“EBITDA”) and adjusted EBITDA, which excludes stock-based compensation, pension settlement cost, loss (gain) on disposal of assets, net, cash bonus related to sale of assets, gain on legal settlement and severance benefits are important measures to evaluate our results of operations between periods on a more comparable basis.

Such measurements are not prepared in accordance with U.S.

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

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

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

Three Months Ended

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

April 30, Six Months Ended

2024 2023 2024 2023

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

Interest income (14) (62) (36) (70)

Interest expense, (net of patronage dividends) 351 (996) 558 176

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

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

Depreciation and amortization 2,100 2,044 4,158 4,491

2 unchanged sentences

Pension settlement cost — — — 2,741

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

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

Cash bonus related to sale of assets — — — 2,000

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

Severance benefits 1,215 — 1,215 —

Adjusted EBITDA $ 16,560 $ 6,155 $ 11,727 $ (1,713)

Three Months Ended January 31, 2024 Compared to the Three Months Ended January 31, 2023

Total net revenues for the three months ended January 31, 2024 were $39.7 million, compared to $37.9 million for the three months ended January 31, 2023.

The 5% increase of $1.8 million was primarily due to farm management revenues from our relationship with PGIM.

Agribusiness revenues are detailed below (in thousands):

Three Months Ended January 31,

Three Months Ended April 30, 2024 Compared to the Three Months Ended April 30, 2023

Total net revenues for the three months ended April 30, 2024 were $44.6 million, compared to $48.1 million for the three months ended April 30, 2023.

The 7% decrease of $3.5 million was primarily due to decreased lemons and avocados agribusiness revenues as detailed below ($ in thousands):

Three Months Ended April 30,

2024 2023 Change

6 unchanged sentences

Agribusiness revenues $ 43,257 $ 46,676 $ (3,419) (7)%

Revenues in the first quarter of fiscal year 2024 were similar to the same period of fiscal year 2023.

During the first quarter of fiscal years 2024 and 2023, fresh lemon sales were $23.9 million and $24.7 million, in aggregate, on 1,137,000 and 1,308,000 cartons of lemons sold at average per carton prices of $21.06 and $18.88, respectively.

Lemon revenues in the first quarter of fiscal years 2024 and 2023 included brokered lemons and other lemon sales of $2.9 million and $1.4 million, shipping and handling of $5.6 million and $5.6 million and lemon by-product sales of $0.5 million and $1.2 million, respectively.

Due to harvest timing, no sales were recorded for the first quarters of fiscal years 2024 and 2023.

Revenues in the first quarter of fiscal year 2024 were similar to the same period of fiscal year 2023.

During the first quarter of fiscal years 2024 and 2023, we sold 80,000 and 64,000 cartons of oranges at an average per carton price of $14.26 and $18.00, respectively.

The decrease in the second quarter of fiscal year 2024, compared to the same period of fiscal year 2023, was primarily due to decreased volume, partially offset by higher prices of fresh lemons sold and legal settlement proceeds allocated to lemons in the second quarter of fiscal year 2023.

During the second quarter of fiscal years 2024 and 2023, fresh packed lemon sales were $25.8 million and $26.6 million, in aggregate, on 1,446,000 and 1,547,000 cartons of lemons sold at average per carton prices of $17.85 and $17.23, respectively.

Lemon revenues in the second quarter of fiscal years 2024 and 2023 included brokered lemons and other lemon sales of $3.8 million and $2.5 million, lemon packing of $5.0 million and $6.4 million and lemon by-product sales of $1.2 million and $1.3 million, respectively, and included legal settlement proceeds of $1.4 million allocated to lemons in the second quarter of fiscal year 2023.

The decrease in the second quarter of fiscal year 2024, compared to the same period of fiscal year 2023, was primarily due to legal settlement proceeds of $2.4 million allocated to avocados in the second quarter of fiscal year 2023, partially offset by increased volume and higher prices of avocados sold.

The California avocado crop typically experiences alternating years of high and low production due to plant physiology.

During the second quarter of fiscal years 2024 and 2023, we sold 1,595,000 and 941,000 pounds of avocados at an average per pound price of $1.47 and $1.30, respectively.

The decrease in the second quarter of fiscal year 2024, compared to the same period of fiscal year 2023, was primarily due to decreased volume, partially offset by higher prices of oranges sold.

During the second quarter of fiscal years 2024 and 2023, we sold 66,000 and 88,000 cartons of oranges at an average per carton price of $17.58 and $15.72, respectively.

• Specialty citrus and other crops:

The decrease in the first quarter of fiscal year 2024, compared to the same period of fiscal year 2023, was primarily due to a decrease in specialty citrus revenue of $0.8 million, partially offset by wine grapes revenue of $0.6 million.

During the first quarter of fiscal years 2024 and 2023, we sold 17,000 and 54,000 40-pound carton equivalents of specialty citrus at an average per carton price of $28.88 and $23.09, respectively.

During the second quarter of fiscal years 2024 and 2023, we sold 29,000 and 41,000 40-pound carton equivalents of specialty citrus at an average per carton price of $29.24 and $24.78, respectively.

• Farm management:

Farm management revenues in the first quarter of fiscal year 2024 were $2.0 million, primarily related to the Northern Properties farming, management and operations services.

There were no farm management revenues in the first quarter of fiscal year 2023.

Farm management revenue is comprised primarily of Northern Properties farming, management and operations services.

The increase in farm management revenues in the second quarter of fiscal year 2024, compared to the same period of fiscal year 2023, was primarily due to farm management decisions based on weather and crop conditions.

Other revenue is comprised primarily of fallowing and freight revenue.

Other revenues in the first quarter of fiscal year 2024 were similar to the same period of fiscal year 2023.

Other operations revenue in the first quarters of fiscal years 2024 and 2023 were $1.4 million.

Other revenues in the second quarter of fiscal year 2024 were similar to the same period of fiscal year 2023.

Other operations revenue in the second quarters of fiscal years 2024 and 2023 were $1.3 million and $1.4 million, respectively.

Costs and Expenses

Total costs and expenses in the first quarter of fiscal year 2024 were $47.5 million, compared to $12.0 million in the same period of fiscal year 2023.

The 295% increase of $35.4 million was primarily related to the gain on the sale of the Northern Properties in the first quarter of fiscal year 2023, partially offset by decreases in agribusiness costs and expenses and selling, general and administrative expenses.

Total costs and expenses in the second quarter of fiscal year 2024 were $49.3 million, compared to $51.9 million in the same period of fiscal year 2023.

The 5% decrease of $2.6 million was primarily due to the 2023 loss on disposal of Cadiz Ranch assets, partially offset by the 2023 gain on legal settlement and increases in agribusiness costs and expenses and selling, general and administrative expenses.

Agribusiness costs and expenses are detailed below ($ in thousands):

Three Months Ended January 31,

Three Months Ended April 30,

2024 2023 Change

7 unchanged sentences

• Packing costs:

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

During the first quarter of fiscal years 2024 and 2023, we packed and sold 1,137,000 and 1,308,000 cartons of lemons at average per carton costs of $9.43 and $8.68, respectively.

The increase in per carton packing costs was primarily due to decreased volume packed and sold.

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

During the second quarter of fiscal years 2024 and 2023, we packed and sold 1,446,000 and 1,547,000 cartons of lemons at average per carton costs of $9.39 and $7.81, respectively.

The increase in per carton packing costs was primarily due to decreased volume packed and sold and increased subcontracted costs in the second quarter of fiscal year 2024.

• Harvest costs:

The decrease in the first quarter of fiscal year 2024, compared to the same period of fiscal year 2023, was primarily due to decreased volume of lemons harvested due to rainfall delaying harvest.

The decrease in the second quarter of fiscal year 2024, compared to the same period of fiscal year 2023, was primarily due to decreased volume of lemons harvested related to the sale of the Northern Properties.

• Growing costs:

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

The decrease in the first quarter of fiscal year 2024, compared to the same period in fiscal year 2023, was primarily due to the Northern Properties sale in the first quarter of fiscal year 2023.

The decrease in the second quarter of fiscal year 2024, compared to the same period in fiscal year 2023, was primarily due to farm management decisions based on weather, harvest timing and crop conditions.

• Third-party grower and supplier costs:

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

The increase in the first quarter of fiscal year 2024, compared to the same period of fiscal year 2023, was primarily due to increased volume and prices for third-party grower fruit.

In the first quarter of fiscal years 2024 and 2023, we incurred costs for third-party grower fruit of $14.7 million and $11.8 million, respectively.

Of the 1,137,000 and 1,308,000 cartons of lemons packed and sold during the first quarter of fiscal years 2024 and 2023, 952,000 (84%) and 866,000 (66%), were procured from third-party growers at average per carton prices of $15.41 and $13.60, respectively.

The increased volume for third-party grower fruit was primarily due to Northern Properties fruit that was Limoneira fruit in the first quarter of fiscal year 2023 and third-party grower fruit in the first quarter of fiscal year 2024.

In the first quarter of fiscal years 2024 and 2023, we incurred costs for third-party supplier fruit of $3.0 million and $3.2 million, respectively.

The increase in the second quarter of fiscal year 2024, compared to the same period of fiscal year 2023, was primarily due to increased volume of third-party grower fruit.

In the second quarter of fiscal years 2024 and 2023, we incurred costs for third-party grower fruit of $12.4 million and $8.8 million, respectively.

Of the 1,446,000 and 1,547,000 cartons of lemons packed and sold during the second quarter of fiscal years 2024 and 2023, 1,099,000 (76%) and 765,000 (49%), were procured from third-party growers at average per carton prices of $11.36 and $11.46, respectively.

The increased volume for third-party grower fruit was primarily due to the sale of the Northern Properties.

Additionally, in the second quarter of fiscal years 2024 and 2023, we incurred $3.5 million and $2.6 million, respectively, of costs for purchased, packed fruit for resale.

• Other costs:

The decrease in the first quarter of fiscal year 2024, compared to the same period of fiscal year 2023, was primarily due to decreased freight costs.

Other costs in the second quarter of fiscal year 2024 were similar to the same period of fiscal year 2023.

• Depreciation and amortization:

Depreciation and amortization expense for the first quarter of fiscal years 2024 and 2023 was $1.7 million and $2.1 million, respectively.

The decrease in the first quarter of fiscal year 2024, compared to the same period of fiscal year 2023, was primarily due to the Northern Properties sale in the first quarter of fiscal year 2023.

Other operations expenses were $1.2 million in the first quarters of fiscal years 2024 and 2023.

Gain on disposal of assets, net was $0.2 million and $39.7 million in the first quarter of fiscal years 2024 and 2023, respectively.

The decrease was primarily due to the Northern Properties sale in the first quarter of fiscal year 2023.

Selling, general and administrative costs and expenses were $7.3 million and $9.3 million in the first quarter of fiscal years 2024 and 2023, respectively.

Depreciation and amortization expense in the second quarter of fiscal year 2024 was similar to the same period of fiscal year 2023.

Other operations expenses were $1.4 million and $1.0 million in the second quarter of fiscal years 2024 and 2023, respectively.

The increase in other operations expenses was primarily due to severance benefits in the second quarter of fiscal year 2024.

Loss on disposal of assets, net was immaterial and $9.0 million in the second quarter of fiscal years 2024 and 2023, respectively.

The decrease in loss on disposal of assets, net was primarily due to the disposal of Cadiz Ranch assets in the second quarter of fiscal year 2023.

Gain on legal settlement was $2.3 million in the second quarter of fiscal year 2023 due to the Settlement Agreement related to the Thomas fire.

Selling, general and administrative costs and expenses were $7.4 million and $6.0 million in the second quarter of fiscal years 2024 and 2023, respectively.

The 23% increase of $1.4 million was primarily due to:

• $1.0 million net increase in salaries, benefits and incentive compensation, primarily due to compensation expense related to the Retention Bonus Agreements;

• $0.4 million net increase in other selling, general and administrative expenses, primarily associated with our strategic initiatives.

Other Income (Expense)

Total other income was $16.5 million and $1.3 million in the second quarter of fiscal years 2024 and 2023, respectively.

The increase of $15.2 million in total other income was primarily due to:

• $16.5 million increase in equity in earnings of investments, net, primarily due to LLCB's closing of 554 residential homesites in the second quarter of fiscal year 2024;

• $1.3 million increase in interest expense, net of patronage dividends, primarily due to decreased patronage dividends.

We recorded an estimated income tax (provision) benefit of $(5.2) million and $0.9 million in the second quarter of fiscal years 2024 and 2023 on pre-tax income (loss) of $11.8 million and $(2.5) million, respectively.

The tax provision recorded for the second quarter of fiscal year 2024 differs from the U.S.

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

Our projected annual effective blended tax rate for fiscal year 2024, excluding discrete items, is approximately 29.9%.

Net Loss Attributable to Noncontrolling Interest

Net loss attributable to noncontrolling interest represents 10% and 49% of PDA and Trapani Fresh, respectively, of the net income or loss in the second quarter of fiscal years 2024 and 2023.

Six Months Ended April 30, 2024 Compared to the Six Months Ended April 30, 2023

Total net revenues for the six months ended April 30, 2024 were $84.3 million, compared to $86.0 million for the six months ended April 30, 2023.

The 2% decrease of $1.7 million was primarily due to decreased lemons and avocados agribusiness revenues, partially offset by increased farm management agribusiness revenues, as detailed below ($ in thousands):

Six Months Ended April 30,

2024 2023 Change

Lemons $ 68,781 $ 71,334 $ (2,553) (4)%

Avocados 2,348 3,603 (1,255) (35)%

Oranges 2,301 2,535 (234) (9)%

Specialty citrus and other crops 1,925 2,263 (338) (15)%

Farm management 4,094 1,404 2,690 192%

Other $ 2,147 $ 2,065 82 4%

Agribusiness revenues $ 81,596 $ 83,204 $ (1,608) (2)%

The decrease in the first six months of fiscal year 2024, compared to the same period of fiscal year 2023, was primarily due to decreased volume, partially offset by higher prices of fresh lemons sold and legal settlement proceeds allocated to lemons in fiscal year 2023.

During the first six months of fiscal years 2024 and 2023, fresh packed lemon sales were $49.8 million and $51.3 million, in aggregate, on 2,583,000 and 2,855,000 cartons of lemons sold at average per carton prices of $19.27 and $17.98, respectively.

Lemon revenues in the first six months of fiscal years 2024 and 2023 included brokered lemons and other lemon sales of $6.8 million and $3.9 million, lemon packing of $10.6 million and $12.1 million, and lemon by-product sales of $1.7 million and $2.6 million, respectively, and included legal settlement proceeds of $1.4 million allocated to lemons in fiscal year 2023.

The decrease in the first six months of fiscal year 2024, compared to the same period in fiscal year 2023, was primarily due to legal settlement proceeds of $2.4 million allocated to avocados in fiscal year 2023, partially offset by increased volume and higher prices of avocados sold.

The California avocado crop typically experiences alternating years of high and low production due to plant physiology.

During the first six months of fiscal years 2024 and 2023, we sold 1,595,000 and 941,000 pounds of avocados at an average per pound price of $1.47 and $1.30, respectively.

The decrease in the first six months of fiscal year 2024, compared to the same period of fiscal year 2023, was primarily due to decreased volume and lower prices of oranges sold.

During the first six months of fiscal years 2024 and 2023, we sold 146,000 and 152,000 cartons of oranges at an average per carton price of $15.76 and $16.68, respectively.

• Specialty citrus and other crops:

During the first six months of fiscal years 2024 and 2023, we sold 46,000 and 95,000 40-pound carton equivalents of specialty citrus at an average per carton price of $29.11 and $23.82, respectively.

• Farm management:

Farm management revenue is comprised primarily of Northern Properties farming, management and operations services.

The increase in farm management revenues in the first six months of fiscal year 2024, compared to the same period of fiscal year 2023, was primarily due to farm management decisions based on weather and crop conditions.

Other revenue is comprised primarily of fallowing and freight revenue.

Other revenues in the first six months of fiscal year 2024 were similar to the same period of fiscal year 2023.

Other operations revenue in the first six months of fiscal years 2024 and 2023 was $2.7 million and $2.8 million , respectively.

Costs and Expenses

Total costs and expenses in the first six months of fiscal year 2024 were $96.8 million, compared to $63.9 million in the same period of fiscal year 2023.

The 51% increase of $32.9 million was primarily due to the 2023 gain on disposal of Northern Properties assets, the 2023 gain on legal settlement, partially offset by the 2023 loss on disposal of Cadiz Ranch assets.

Agribusiness costs and expenses in the first six months of fiscal year 2024 were similar compared to the same period of fiscal year 2023, as detailed below ($ in thousands):

Six Months Ended April 30,

2024 2023 Change

Packing costs $ 24,306 $ 23,428 $ 878 4%

Harvest costs 4,811 10,385 (5,574) (54)%

Growing costs 11,654 13,620 (1,966) (14)%

Third-party grower and supplier costs 33,662 26,378 7,284 28%

Other costs 1,585 1,744 (159) (9)%

Depreciation and amortization 3,532 3,875 (343) (9)%

Agribusiness costs and expenses $ 79,550 $ 79,430 $ 120 —%

• Packing costs:

During the first six months of fiscal years 2024 and 2023, we packed and sold 2,583,000 and 2,855,000 cartons of lemons at average per carton costs of $9.41 and $8.21, respectively.

The increase in per carton packing costs was primarily due to decreased volume packed and sold and increased subcontracted costs in fiscal year 2024.

• Harvest costs:

The decrease in the first six months of fiscal year 2024, compared to the same period in fiscal year 2023, was primarily due to decreased volume of lemons harvested related to the sale of the Northern Properties.

• Growing costs:

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

The decrease in the first six months of fiscal year 2024, compared to the same period in fiscal year 2023, was primarily due to farm management decisions based on weather, harvest timing and crop conditions.

• Third-party grower and supplier costs:

We sell fruit that we grow and fruit that we procure from other growers and suppliers.

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

The increase in the first six months of fiscal year 2024, compared to the same period of fiscal year 2023, was primarily due to increased volume and higher prices of third-party grower fruit sold.

In the first six months of fiscal years 2024 and 2023, we incurred costs for third-party grower fruit of $27.2 million and $20.5 million, respectively.

Of the 2,583,000 and 2,855,000 cartons of lemons packed and sold during the first six months of fiscal years 2024 and 2023, 2,052,000 (79%) and 1,630,000 (57%), were procured from third-party growers at average per carton prices of $13.24 and $12.60, respectively.

The increased volume for third-party grower fruit was primarily due to the sale of the Northern Properties.

Additionally, in the first six months of fiscal years 2024 and 2023, we incurred $6.5 million and $5.8 million, respectively, of costs for purchased, packed fruit for resale.

• Other costs:

The decrease in the first six months of fiscal year 2024, compared to the same period of fiscal year 2023, was primarily due to decreased freight costs.

• Depreciation and amortization:

The decrease in the first six months of fiscal year 2024, compared to the same period of fiscal year 2023, was primarily due to the Northern Properties sale in fiscal year 2023.

Other operations expenses were $2.6 million and $2.2 million in the first six months of fiscal years 2024 and 2023, respectively.

The increase in other operations expenses was primarily due to severance benefits in fiscal year 2024.

Gain on disposal of assets, net was $0.1 million and $30.7 million in the first six months of fiscal years 2024 and 2023, respectively.

The decrease in gain on disposal of assets, net was primarily due to the gain on the sale of the Northern Properties, partially offset by the loss on disposal of Cadiz Ranch assets in fiscal year 2023.

Gain on legal settlement was $2.3 million in the first six months of fiscal year 2023 due to the Settlement Agreement related to the Thomas fire.

Selling, general and administrative costs and expenses were $14.7 million and $15.3 million in the first six months of fiscal years 2024 and 2023, respectively.

The 4% decrease of $0.6 million was primarily due to:

• $2.0 million net decrease in salaries, benefits and incentive compensation, primarily due to the Northern Properties sale;

• $1.1 million net decrease in salaries, benefits and incentive compensation, primarily due to compensation expense related to the Retention Bonus Agreements;

• $0.5 million net increase in other selling, general and administrative expenses, primarily associated with our strategic initiatives.

Other (Expense) Income

Total other expense was $0.1 million and $3.5 million in the first quarter of fiscal years 2024 and 2023, respectively.

The decrease of $3.4 million in total other expense was primarily due to:

• $1.0 million decrease in interest expense as a result of decreased long-term debt;

• $2.6 million decrease in other expense, net, primarily related to the pension plan settlement.

We recorded an estimated income tax benefit (provision) of $4.2 million and $(6.8) million in the first quarter of fiscal years 2024 and 2023 on pre-tax (loss) income of $(7.9) million and $22.4 million, respectively.

The tax benefit recorded for the first quarter of fiscal year 2024 differs from the U.S.

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

Other Income (Expense)

Total other income (expense) was $16.3 million and $(2.2) million in the first six months of fiscal years 2024 and 2023, respectively.

The increase of $18.5 million in total other income was primarily due to:

• $16.3 million increase of equity in earnings of investments, net, primarily due to LLCB's closing of 554 residential homesites in 2024;

• $2.6 million decrease of other income (expense), net primarily due to pension settlement cost in 2023;

• $0.4 million increase of interest expense, net of patronage dividends due to decreased patronage dividends.

We recorded an estimated income tax provision of $1.0 million and $5.9 million in the first six months of fiscal years 2024 and 2023 on pre-tax income of $3.9 million and $19.8 million, respectively.

The tax provision recorded for the first six months of fiscal year 2024 differs from the U.S.

Our projected annual effective blended tax rate for fiscal year 2024, excluding discrete items, is approximately 29.9%.

Net Loss Attributable to Noncontrolling Interest

Net loss attributable to noncontrolling interest represents 10% and 49% of PDA and Trapani Fresh, respectively, of the net loss in the first quarter of fiscal years 2024 and 2023, respectively.

Net loss attributable to noncontrolling interest represents 10% and 49% of PDA and Trapani Fresh, respectively, of the net income or loss in the first six months of fiscal years 2024 and 2023.

Segment Results of Operations

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See Note 19 - Segment Information for additional information regarding our operating segments.

Three Months Ended January 31, 2024 Compared to the Three Months Ended January 31, 2023

The following table shows the segment results of operations for the three months ended January 31, 2024 (in thousands):

Three Months Ended April 30, 2024 Compared to the Three Months Ended April 30, 2023

The following table shows the segment results of operations for the three months ended April 30, 2024 (in thousands):

Packing Eliminations

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

The following table shows the segment results of operations for the three months ended January 31, 2023 (in thousands):

The following table shows the segment results of operations for the three months ended April 30, 2023 (in thousands):

Packing Eliminations

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Fresh lemons segment revenue is comprised of sales of fresh lemons, lemon by-products, brokered lemons and other lemon revenue.

For the first quarter of fiscal years 2024 and 2023, our fresh lemons segment total net revenues were $27.4 million and $27.3 million, respectively.

The increase of $0.1 million was primarily due to:

• Fresh lemon sales decrease of $0.8 million;

For the second quarter of fiscal years 2024 and 2023, our fresh lemons segment total net revenues were $30.8 million and $31.9 million, respectively.

The (3)% decrease of $1.1 million was primarily due to:

• Fresh packed lemon sales decrease of $0.8 million;

• Lemon by-products sales decrease of $0.2 million;

• Brokered lemons and other lemon sales increase of $1.3 million;

• Legal settlement proceeds of $1.4 million allocated to fresh lemons in the second quarter of fiscal year 2023.

Costs and expenses associated with our fresh lemons segment include growing costs, harvest costs, cost of lemons we procure from third-party growers and suppliers and packing service charges incurred from the lemon packing segment to pack lemons for sale.

For the first quarter of fiscal years 2024 and 2023, our fresh lemons segment costs and expenses were $28.8 million and $32.3 million, respectively.

For the second quarter of fiscal years 2024 and 2023, our fresh lemons segment costs and expenses were $28.9 million and $29.2 million, respectively.

The 1% decrease of $0.3 million was primarily due to:

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• Third-party grower and supplier costs increase of $4.3 million;

• Intersegment costs and expenses decrease of $0.7 million.

• Intersegment costs and expenses increase of $0.6 million.

Lemon Packing

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

For the first quarter of fiscal years 2024 and 2023, our lemon packing segment total net revenues were $12.3 million and $13.0 million, respectively.

The 5% decrease of $0.7 million was primarily due to decreased volume of lemons packed.

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

For the first quarter of fiscal years 2024 and 2023, our lemon packing costs and expenses were $10.7 million and $11.4 million, respectively.

The 6% decrease of $0.6 million was primarily due to decreased volume packed and sold.

For the first quarter of fiscal years 2024 and 2023, lemon packing segment operating income per carton sold was $1.40 and $1.27, respectively.

The lemon packing segment included $6.7 million and $7.4 million of intersegment revenues for the first quarter of fiscal years 2024 and 2023, respectively, that were charged to the fresh lemons segment to pack lemons for sale.

For the second quarter of fiscal years 2024 and 2023, our lemon packing segment total net revenues were $15.9 million and $16.7 million, respectively.

The 5% decrease of $0.8 million was primarily due to decreased volume of lemons packed and sold.

For the second quarter of fiscal years 2024 and 2023, our lemon packing costs and expenses were $13.6 million and $12.1 million, respectively.

The 13% increase of $1.5 million was primarily due to increased subcontracted costs in the second quarter of fiscal year 2024, partially offset by decreased volume of lemons packed and sold.

For the second quarter of fiscal years 2024 and 2023, lemon packing segment operating income per carton sold was $1.58 and $3.01, respectively.

The lemon packing segment included $10.9 million and $10.3 million of intersegment revenues for the second quarter of fiscal years 2024 and 2023, respectively, that were charged to the fresh lemons segment to pack lemons for sale.

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

Our avocados segment had no revenues for the first quarters of fiscal years 2024 and 2023.

For the second quarter of fiscal years 2024 and 2023, our avocados segment revenues were $2.3 million and $3.6 million, respectively.

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

Our avocados segment had no costs and expenses for the first quarters of fiscal years 2024 and 2023.

For the second quarter of fiscal years 2024 and 2023, our avocados segment costs and expenses were $1.4 million and $1.0 million, respectively.

The increase of $0.4 million was primarily due to the following:

• Harvest costs increase of $0.1 million;

• Growing costs increase of $0.3 million.

Other Agribusiness

Our other agribusiness segment total net revenues were $5.4 million and $3.6 million for the first quarter of fiscal years 2024 and 2023, respectively.

Our other agribusiness segment total net revenues were $5.1 million and $4.7 million for the second quarter of fiscal years 2024 and 2023, respectively.

The 8% increase of $0.4 million was primarily due to:

• Farm management revenues increase of $0.6 million;

• Specialty citrus and other crops revenues decrease of $0.2 million.

• Farm management revenues for the first quarter of fiscal year 2024 were $2.0 million.

There were no farm management revenues in the first quarter of fiscal year 2023.

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

Our other agribusiness costs and expenses were $4.5 million and $2.8 million for the first quarter of fiscal years 2024 and 2023, respectively.

Our other agribusiness costs and expenses were $5.7 million and $4.4 million for the second quarter of fiscal years 2024 and 2023, respectively.

The 28% increase of $1.3 million was primarily due to:

• Growing costs increase of $1.0 million;

• Purchased fruit costs increase of $0.3 million.

Total agribusiness depreciation and amortization expenses were $1.8 million and $1.7 million for the second quarter of fiscal years 2024 and 2023, respectively.

Corporate and Other

Our corporate and other operations had revenues of $1.3 million and $1.4 million for the second quarter of fiscal years 2024 and 2023, respectively.

Costs and expenses in our corporate and other operations were approximately $8.5 million and $13.4 million for the second quarter of fiscal years 2024 and 2023, respectively, and include selling, general and administrative costs and expenses, loss on disposal of assets, net and gain on legal settlement not allocated to the operating segments.

Depreciation and amortization expenses for the second quarters of fiscal years 2024 and 2023 were similar at $0.3 million.

Six Months Ended April 30, 2024 Compared to the Six Months Ended April 30, 2023

The following table shows the segment results of operations for the six months ended April 30, 2024 (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)

The following table shows the segment results of operations for the six months ended April 30, 2023 (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

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

Fresh lemons segment revenue is comprised of sales of fresh lemons, lemon by-products, brokered lemons and other lemon revenue.

For the first six months of fiscal years 2024 and 2023, our fresh lemons segment total net revenues were $58.2 million and $59.3 million, respectively.

The 2% decrease of $1.1 million was primarily due to:

• Fresh packed lemon sales decrease of $1.6 million;

• Lemon by-products decrease of $0.9 million;

• Brokered lemons and other lemon sales increase of $2.8 million;

• Legal settlement proceeds of $1.4 million allocated to fresh lemons in the first six months of fiscal year 2023.

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

For the first six months of fiscal years 2024 and 2023, our fresh lemons segment costs and expenses were $57.7 million and $61.5 million, respectively.

The 6% decrease of $3.8 million was primarily due to:

• Harvest costs decrease of $5.7 million;

• Growing costs decrease of $5.3 million;

• Third-party grower and supplier costs increase of $7.2 million.

Lemon Packing

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

For the first six months of fiscal years 2024 and 2023, our lemon packing segment total net revenues were $28.2 million and $29.7 million, respectively.

The 5% decrease of $1.5 million was primarily due to decreased volume of lemons packed and sold.

For the first six months of fiscal years 2024 and 2023, our lemon packing costs and expenses were $24.3 million and $23.4 million, respectively.

The 4% increase of $0.9 million was primarily due to increased subcontracted costs in the first six months of fiscal year 2024, partially offset by decreased volume of lemons packed and sold.

For the first six months of fiscal years 2024 and 2023, lemon packing segment operating income per carton sold was $1.50 and $2.21, respectively.

The lemon packing segment included $17.6 million and $17.7 million of intersegment revenues in the first six months of fiscal years 2024 and 2023, respectively, that were charged to the fresh lemons segment to pack lemons for sale.

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

For the first six months of fiscal years 2024 and 2023, our avocados segment revenues were $2.3 million and $3.6 million, respectively.

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

Our avocados segment costs and expenses were $1.4 million and $1.0 million for the first six months of fiscal years 2024 and 2023, respectively.

The 39% increase of $0.4 million was primarily due to the following:

• Harvest costs increase of $0.1 million;

• Growing costs increase of $0.3 million.

• Purchased fruit costs decrease of $0.2 million;

Other Agribusiness

Our other agribusiness segment total net revenues were $10.5 million and $8.3 million for the first six months of fiscal years 2024 and 2023, respectively.

The 27% increase of $2.2 million was primarily due to:

• Farm management revenues increase of $2.7 million;

• Orange revenues decrease of $0.2 million;

• Specialty citrus and other crops revenues decrease of $0.3 million.

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

Our other agribusiness costs and expenses were $10.2 million and $7.2 million for the first six months of fiscal years 2024 and 2023, respectively.

The 41% increase of $3.0 million was primarily due to:

• Growing costs increase of $3.1 million;

• Purchased fruit costs increase of $0.1 million;

• Freight costs decrease of $0.2 million.

Total agribusiness depreciation and amortization expenses were $1.7 million and $2.1 million for the first quarter of fiscal years 2024 and 2023, respectively.

Total agribusiness depreciation and amortization expenses were $3.5 million and $3.9 million, for the first six months of fiscal years 2024 and 2023, respectively.

Corporate and Other

Our corporate and other operations had revenues of $1.4 million for the first quarters of fiscal years 2024 and 2023.

Costs and expenses in our corporate and other operations were approximately $8.0 million and $(29.5) million for the first quarter of fiscal years 2024 and 2023, respectively, and include selling, general and administrative costs and expenses and gain on disposal of assets, net.

Depreciation and amortization expenses for the first quarters of fiscal years 2024 and 2023 were similar at $0.3 million.

Our corporate and other operations revenues were $2.7 million and $2.8 million for the first six months of fiscal years 2024 and 2023, respectively.

Costs and expenses (gains) in our corporate and other operations were $16.6 million and $(16.1) million for the first six months of fiscal years 2024 and 2023, respectively, and include selling, general and administrative costs and expenses, loss (gain) on disposal of assets, net and gain on legal settlement not allocated to the operating segments.

Depreciation and amortization expenses for the first six months of fiscal years 2024 and 2023 were similar at $0.6 million.

Seasonal Operations

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

Results of Operations for the Trailing Twelve Months Ended January 31, 2024 and 2023

Results of Operations for the Trailing Twelve Months Ended April 30, 2024 and 2023

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

Trailing Twelve Months Ended January 31,

Trailing Twelve Months Ended April 30,

Net revenues:

22 unchanged sentences

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

• Total revenues decreased $1.5 million, primarily due to decreased avocados and oranges agribusiness revenues, partially offset by increased farm management revenues.

• Total costs and expenses increased $59.0 million, primarily due to loss (gain) on disposal of assets and increased agribusiness costs and selling, general and administrative expenses.

• Total other income decreased $11.7 million, primarily due to decreased interest expense, increased equity in earnings of investments, net and decreased other expense related to pension settlement costs.

• Income tax benefit increased $17.1 million, primarily due to increased pre-tax loss of $48.8 million.

• Total revenues decreased $6.3 million, primarily due to decreased lemons, avocados and oranges agribusiness revenues, partially offset by increased farm management revenues.

• Total costs and expenses increased $48.6 million, primarily due to loss (gain) on disposal of assets, gain on legal settlement and increased agribusiness costs and selling, general and administrative expenses.

• Total other income increased $25.2 million, primarily due to increased equity in earnings of investments, net related to LLCB and decreased other expense related to pension settlement costs.

• Income tax provision decreased $9.3 million, primarily due to decreased pre-tax income of $29.7 million.

Liquidity and Capital Resources

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Material contractual obligations arising in the normal course of business consist primarily of purchase obligations, long-term fixed rate and variable rate debt and related interest payments and operating and finance leases.

See Note 10 - Long-Term Debt and Note 12 - Leases for amounts outstanding as of January 31, 2024, related to debt and leases.

See Note 10 - Long-Term Debt and Note 12 - Leases for amounts outstanding as of April 30, 2024, related to debt and leases.

Purchase obligations consist of contracts primarily related to packing supplies, the majority of which are due in the next 5 years.

We believe that the cash flows from operations and available borrowing capacity from our existing credit facilities will be sufficient to satisfy our capital expenditures, debt service, working capital needs and other contractual obligations for the next twelve months.

We believe our revenue generating operations, distributions from equity investments and credit facilities will generate sufficient cash needed to operate beyond the next twelve months.

We believe our revenue generating operations, distributions from equity investments and credit facilities will generate sufficient cash needed to operate beyond the next 12 months.

In addition, we have the ability to control a portion of our investing cash flows to the extent necessary based on our liquidity demands.

Cash Flows from Operating Activities

Net cash used in operating activities was $10.3 million and $21.2 million for the three months ended January 31, 2024 and 2023, respectively.

Net cash used in operating activities was $13.3 million and $18.4 million for the six months ended April 30, 2024 and 2023, respectively.

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

• Net (loss) income was $(3.7) million and $15.5 million for the three months ended January 31, 2024 and 2023, respectively.

The components of net loss in the three months ended January 31, 2024, compared to the net income in the same period in fiscal year 2023 consist of a decrease in operating income of $33.6 million primarily due to the Northern Properties sale, a decrease in total other expense of $3.4 million and an increase in income tax benefit of $11.0 million.

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

◦ Adjustments used $1.1 million and $29.1 million in the three months ended January 31, 2024 and 2023, respectively, primarily related to depreciation and amortization, gain on disposal of assets and deferred income taxes.

◦ Changes in operating assets and liabilities used $5.5 million and $7.6 million of operating cash in the three months ended January 31, 2024 and 2023, respectively, primarily related to accounts receivables and receivables/other from related parties and accounts payable and growers and suppliers payable.

• Net income was $2.9 million and $13.9 million for the six months ended April 30, 2024 and 2023, respectively.

The components of net income in the six months ended April 30, 2024, compared to the net income in the same period in fiscal year 2023 consist of a decrease in operating income of $34.4 million primarily due to the Northern Properties sale, an increase in total other income of $18.5 million, primarily related to LLCB equity earnings and a decrease in income tax provision of $4.9 million.

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

◦ Adjustments used $8.7 million and $18.5 million in the six months ended April 30, 2024 and 2023, respectively, primarily related to gain on disposal of assets, net, equity in earnings in investments, net and deferred income taxes.

◦ Changes in operating assets and liabilities used $7.5 million and $13.8 million of operating cash in the six months ended April 30, 2024 and 2023, respectively, primarily related to accounts receivables and receivables/other from related parties, cultural costs, prepaid expenses and other current assets, accounts payable and growers and suppliers payable and accrued liabilities and payables to related parties.

Cash Flows from Investing Activities

Net cash (used in) provided by investing activities was $(1.6) million and $99.1 million for the three months ended January 31, 2024 and 2023, respectively.

▪ The $1.6 million of cash used in investing activities during the three months ended January 31, 2024 was comprised primarily of capital expenditures of $2.2 million, primarily related to orchard and vineyard development, and equity investment contributions and capitalized interest of $0.3 million, partially offset by net proceeds from sales of assets of $0.8 million.

▪ The $99.1 million of cash provided by investing activities during the three months ended January 31, 2023 was comprised primarily of net proceeds from sales of assets of $98.9 million and net proceeds from the sale of real estate development assets of $2.6 million, partially offset by capital expenditures of $2.2 million, primarily related to orchard and vineyard development.

Net cash (used in) provided by investing activities was $(2.9) million and $95.4 million for the six months ended April 30, 2024 and 2023, respectively.

▪ The $2.9 million of cash used in investing activities during the six months ended April 30, 2024 was comprised primarily of capital expenditures of $3.7 million, primarily related to orchard and vineyard development, partially offset by net proceeds from sales of assets of $0.9 million.

▪ The $95.4 million of cash provided by investing activities during the six months ended April 30, 2023 was comprised primarily of net proceeds from sales of assets of $98.5 million and net proceeds from the sale of real estate development assets of $2.6 million, partially offset by capital expenditures of $5.4 million, primarily related to orchard and vineyard development.

Cash Flows from Financing Activities

Net cash provided by (used in) financing activities was $8.8 million and $(66.3) million for the three months ended January 31, 2024 and 2023, respectively.

• The $8.8 million of cash provided by financing activities during the three months ended January 31, 2024 was comprised primarily of net borrowings of long-term debt of $11.1 million, partially offset by common and preferred stock dividends of $1.5 million and exchange of common stock of $0.7 million.

• The $66.3 million of cash used in financing activities during the three months ended January 31, 2023 was comprised primarily of net repayments of long-term debt of $64.8 million and common and preferred dividends of $1.5 million.

Net cash provided by (used in) financing activities was $14.0 million and $(68.0) million for the six months ended April 30, 2024 and 2023, respectively.

• The $14.0 million of cash provided by financing activities during the six months ended April 30, 2024 was comprised primarily of net borrowings of long-term debt of $19.2 million, partially offset by common and preferred stock dividends of $2.9 million and exchange of common stock of $1.8 million.

• The $68.0 million of cash used in financing activities during the six months ended April 30, 2023 was comprised primarily of net repayments of long-term debt of $64.8 million and common and preferred dividends of $2.9 million.

Transactions Affecting Liquidity and Capital Resources

Credit Facilities and Long-Term Debt

We finance our working capital and other liquidity requirements primarily through cash from operations and from our AgWest Farm Credit Facility, which includes the Master Loan Agreement (the “MLA”) and Supplements.

We finance our working capital and other liquidity requirements primarily through cash from operations and from our Credit Facility with AgWest Farm Credit, formerly know as Farm Credit West, (the "Lender"), which includes the Master Loan Agreement (the “MLA”), 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 a Fixed Interest Rate Agreement, which extends principal repayment to July 1, 2026.

The MLA governs the terms of the Supplements.

In addition, we have Banco de Chile term loans and COVID-19 loans.

Additional information regarding these loans can be found in Note 10 - Long-Term Debt.

In June 2021, we entered into the MLA with the Lender, together with the Supplements and a Fixed Interest Rate Agreement, which extends the principal repayment to July 1, 2026.

The MLA governs the terms of the Supplements.

The Supplements provide aggregate borrowing capacity of $115.0 million, comprised of $75.0 million under the Revolving Credit Supplement and $40.0 million under the Non-Revolving Credit Supplement.

As of January 31, 2024, our outstanding borrowings under the AgWest Farm Credit Facility were $51.3 million and we had $63.7 million of availability.

As of April 30, 2024, our outstanding borrowings under the AgWest Farm Credit Facility were $59.4 million and we had $55.6 million of availability.

On January 31, 2023, the Company sold the Northern Properties which resulted in total net proceeds of $98.4 million.

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In February 2023, the Lender declared an annual cash patronage dividend of 1.25% of average eligible loan balances and we received $1.4 million in the second quarter of fiscal year 2023.

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

Such preferred dividends paid were $0.1 million in the three months ended January 31, 2024 and 2023.

Cash dividends declared in the three months ended January 31, 2024 and 2023 were $0.075 per common share and such dividends paid were $1.4 million and $1.3 million in the three months ended January 31, 2024 and 2023, respectively.

Real Estate Development Joint Ve nture

On April 30, 2024, our real estate development joint venture with Lewis closed an additional 554 residential homesites at the Harvest at Limoneira master planned community in Santa Paula, CA, and we recorded equity in earnings of investments of $16.6 million in the second quarter of fiscal year 2024.

As of April 30, 2024, the 50%-owned unconsolidated joint venture had $102.1 million of unaudited cash and cash equivalents on hand, and on June 5, 2024, the joint venture made a cash distribution of $30.0 million.

We intend to pay down debt with our $15.0 million portion of this cash distribution.

The holders of our Series B Convertible Preferred Stock and Series B-2 Preferred Stock are entitled to receive cumulative cash dividends.

Such preferred dividends paid were $0.3 million in the six months ended April 30, 2024 and 2023.

Cash dividends declared in the six months ended April 30, 2024 and 2023 were $0.15 per common share and such dividends paid were $2.7 million in the six months ended April 30, 2024 and 2023.

Critical Accounting Estimates

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

During the three months ended January 31, 2024, our critical accounting policies and estimates have not changed since the filing of our Annual Report on Form 10-K as of October 31, 2023.

During the six months ended April 30, 2024, our critical accounting policies and estimates have not changed since the filing of our Annual Report on Form 10-K as of October 31, 2023.

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

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis