What changed in this filing

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Item 1. Financial Statements

2024-09-09 compared with 2024-06-06 · 144 added, 106 removed, 692 unchanged (27% of the section changed)

3 unchanged sentences

(in thousands, except share and per share data)

April 30, 2024 October 31, 2023

July 31, 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 April 30, 2024 and October 31, 2023) ( 8.75 % coupon rate)

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

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

9,300 shares issued and outstanding at April 30, 2024 and October 31, 2023) ( 4 % dividend rate on liquidation value of $ 1,000 per share)

9,300 shares issued and outstanding at July 31, 2024 and October 31, 2023) ( 4 % dividend rate on liquidation value of $ 1,000 per share)

Stockholders' equity:

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

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

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

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

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)

18,302,878 and 18,192,009 shares issued and 18,051,901 and 17,941,032 shares outstanding at July 31, 2024 and October 31, 2023, respectively)

Additional paid-in capital 169,743 168,441

1 unchanged sentence

Accumulated other comprehensive loss ( 6,380 ) ( 5,666 )

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

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

( 3,493 ) ( 3,493 )

7 unchanged sentences

Three Months Ended

April 30, Six Months Ended

July 31, Nine Months Ended

2024 2023 2024 2023

6 unchanged sentences

Other operations 1,250 1,034 3,861 3,281

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

Impairment of intangible asset

(Gain) loss on disposal of assets, net ( 12 ) 1,545 ( 129 ) ( 29,199 )

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

1 unchanged sentence

Total costs and expenses 54,312 54,046 151,069 117,995

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

Operating income (loss) 8,993 ( 1,549 ) ( 3,427 ) 20,473

Other income (expense):

1 unchanged sentence

Interest expense, net of patronage dividends

( 273 ) ( 241 ) ( 831 ) ( 417 )

Equity in earnings of investments, net 483 199 17,116 514

17 unchanged sentences

Three Months Ended

April 30, Six Months Ended

July 31, Nine Months Ended

2024 2023 2024 2023

2 unchanged sentences

Foreign currency translation adjustments ( 10 ) ( 485 ) ( 714 ) 1,688

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

Minimum pension liability adjustments, net of tax of $( 135 ) for the nine months ended July 31, 2023

— — — ( 220 )

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

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

Total other comprehensive (loss) income, net of tax ( 10 ) ( 485 ) ( 714 ) 3,412

6 unchanged sentences

(in thousands, except share and per share data)

Stockholders' Equity Temporary Equity

Stockholders' Equity

Temporary Equity

Common Stock Additional

Paid-In Retained Accumulated

Comprehensive Treasury Non- controlling Total Series B

Preferred Series B-2

Shares Amount Capital Earnings Loss Stock Interest Equity Stock Stock

Comprehensive

Treasury Non- controlling

Loss Stock Interest

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

22 unchanged sentences

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

Dividends Common ($ 0.075 per share)

— — — ( 1,354 ) — — — ( 1,354 ) — —

Dividends Series B ($ 2.19 per share)

— — — ( 32 ) — — — ( 32 ) — —

Dividends Series B-2 ($ 10 per share)

— — — ( 93 ) — — — ( 93 ) — —

Stock compensation 79,245 1 1,203 — — — — 1,204 — —

Net income (loss) — — — 6,593 — — ( 377 ) 6,216 — —

Other comprehensive loss, net of tax — — — — ( 10 ) — — ( 10 ) — —

Balance at July 31, 2024 18,051,901 $ 181 $ 169,743 $ 24,164 $ ( 6,380 ) $ ( 3,493 ) $ 10,668 $ 194,883 $ 1,479 $ 9,331

LIMONEIRA COMPANY

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

(in thousands, except share and per share data)

Stockholders' Equity Temporary Equity

27 unchanged sentences

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

Dividends Common ($ 0.075 per share)

— — — ( 1,349 ) — — — ( 1,349 ) — —

Dividends Series B ($ 2.19 per share)

— — — ( 32 ) — — — ( 32 ) — —

Dividends Series B-2 ($ 10 per share)

— — — ( 93 ) — — — ( 93 ) — —

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

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

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

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

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

2 unchanged sentences

(in thousands)

Six Months Ended

Nine Months Ended

Operating activities

Net income $ 9,094 $ 12,654

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

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

Depreciation and amortization 6,273 6,510

Impairment of intangible asset 643 —

Gain on disposal of assets, net ( 129 ) ( 29,199 )

3 unchanged sentences

Equity in earnings of investments, net ( 17,116 ) ( 514 )

Cash distributions from equity investments 15,005 220

Deferred income taxes 4,051 5,537

9 unchanged sentences

Other long-term liabilities ( 1,366 ) ( 1,247 )

Net cash used in operating activities ( 13,295 ) ( 18,443 )

Net cash provided by (used in) operating activities 11,266 ( 12,588 )

Investing activities

1 unchanged sentence

Net proceeds from sales of assets 950 98,526

Net proceeds from legal settlement — 853

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

11 unchanged sentences

Exchange of common stock ( 1,835 ) ( 26 )

Net cash provided by (used in) financing activities 14,016 ( 68,012 )

Net cash used in financing activities ( 7,108 ) ( 69,646 )

Effect of exchange rate changes on cash ( 15 ) 26

5 unchanged sentences

(in thousands)

Six Months Ended

Nine Months Ended

Supplemental disclosures of cash flow information

3 unchanged sentences

Capital expenditures accrued but not paid at period-end $ 348 $ —

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

Cancellation of loan guarantee related to equity investment $ 1,080 $ —

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

21 unchanged sentences

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

Three Months Ended April 30,

Three Months Ended July 31,

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

1 unchanged sentence

Other comprehensive loss $ ( 10 ) $ — $ ( 10 ) $ ( 485 ) $ — $ ( 485 )

Six Months Ended April 30,

Nine Months Ended July 31,

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

12 unchanged sentences

Other comprehensive loss ( 714 ) — ( 714 )

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

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

Balance at July 31, 2024 $ ( 6,380 ) $ — $ ( 6,380 )

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

Balance at October 31, 2022 $ ( 6,184 ) $ ( 1,724 ) $ ( 7,908 )

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

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

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

COVID-19 Pandemic

29 unchanged sentences

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.

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

One individual customer represented 10 % of accounts receivable, net as of July 31, 2024.

No individual vendor represented more than 10% of accounts payable as of July 31, 2024.

Lemons procured from third-party growers were 73 % and 53 % of the Company's lemon supply for the nine months ended July 31, 2024 and 2023, respectively.

One third-party grower was 14 % of the Company's lemon supply for the nine months ended July 31, 2024.

The Company maintains its cash in federally insured financial institutions.

32 unchanged sentences

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

April 30, 2024 October 31, 2023

July 31, 2024 October 31, 2023

Prepaid supplies and insurance $ 2,630 $ 1,667

6 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 $ 9,995,000 and $ 9,987,000 as of April 30, 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 $ 10,110,000 and $ 9,987,000 as of July 31, 2024 and October 31, 2023, respectively.

East Area I, Retained Property and East Area II

4 unchanged sentences

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

The balance in East Area II includes estimated costs incurred by and reimbursable to LLCB of $ 3,444,000 as of April 30, 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 July 31, 2024 and October 31, 2023, which is included in payables to related parties.

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

1 unchanged sentence

Effective as of February 22, 2023, the Loan maturity date was extended to February 22, 2024, and the maximum borrowing amount was reduced to $ 35,000,000 .

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

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

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

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

As of May 3, 2024, the Loan had no outstanding balance and was cancelled.

As of July 31, 2024, LLCB had unaudited cash and cash equivalents of $ 69,856,000 .

LIMONEIRA COMPANY

3 unchanged sentences

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

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

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

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

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

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

Additionally, a Reimbursement Agreement was executed between the Lewis guarantors and the Company, which provided 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.

The guarantee continued in effect until all of the Loan obligations were fully paid and the Loan terminated.

The $ 1,080,000 estimated value of the guarantee was recorded in the Company’s consolidated balance sheets and, upon cancellation of the Loan in May 2024, was removed from other long-term liabilities and the corresponding value in equity in investments.

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 April 30, 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 July 31, 2024 and October 31, 2023.

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

The Company made contributions of $ 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.

The Company made contributions of $ 400,000 and $ 275,000 to LLCB II during the nine months ended July 31, 2024 and 2023, respectively.

Through July 31, 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.

1 unchanged sentence

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

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

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

Equity in Investments

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

April 30, 2024 October 31, 2023

July 31, 2024 October 31, 2023

Limoneira Lewis Community Builders, LLC $ 67,279 $ 66,288

1 unchanged sentence

Limco Del Mar, Ltd.

("Del Mar") 1,737 1,832

Rosales 1,459 1,325

5 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 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.

During the year-to-date interim period for the nine months ended July 31, 2024, this threshold was met for LLCB and thus summarized income statement information for LLCB 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.

4 unchanged sentences

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

Six Months Ended

Nine Months Ended

Revenues $ 91,402 $ 1,086

3 unchanged sentences

Net income attributable to Limoneira Company $ 19,765 $ 477

April 30, 2024 October 31, 2023

July 31, 2024 October 31, 2023

Cash and cash equivalents $ 69,856 $ 12,863

Unsecured line of credit $ — $ —

Goodwill and Intangible Assets, Net

3 unchanged sentences

Foreign currency translation adjustment ( 7 )

Balance at April 30, 2024 $ 1,505

Balance at July 31, 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 April 30, 2024.

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

Intangible assets consist of the following (in thousands):

April 30, 2024 October 31, 2023

July 31, 2024 October 31, 2023

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

4 unchanged sentences

$ 8,579 $ ( 3,193 ) $ 5,386 $ 10,004 $ ( 3,347 ) $ 6,657

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.

Amortization expense totaled $ 177,000 and $ 178,000 for the three months ended July 31, 2024 and 2023, respectively.

Amortization expense totaled $ 533,000 and $ 553,000 for the nine months ended July 31, 2024 and 2023, respectively.

In July 2024, the Company determined that the carrying value of one of its customer relationships was not recoverable, recorded an impairment charge of $ 643,000 and wrote off the intangible asset.

LIMONEIRA COMPANY

1 unchanged sentence

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

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

2024 (remaining three months) $ 144

Thereafter 171

Investments in Mutual Water Companies

The Company’s investments in various not-for-profit mutual water companies provide it with the right to receive a proportionate share of water from each of the not-for-profit mutual water companies that have been invested in and do not constitute voting shares and/or rights.

The Company’s investments in various not-for-profit mutual water companies provide it with the right to receive a proportionate share of water from each of the not-for-profit mutual water companies that the Company has invested in and do not constitute voting shares and/or rights.

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 April 30, 2024 and October 31, 2023 were $ 6,200,000 and $ 5,703,000 , respectively.

Amounts included in other assets in the consolidated balance sheets as of July 31, 2024 and October 31, 2023 were $ 6,215,000 and $ 5,703,000 , respectively.

Accrued Liabilities

Accrued liabilities consist of the following (in thousands):

April 30, 2024 October 31, 2023

July 31, 2024 October 31, 2023

Compensation $ 3,705 $ 2,858

7 unchanged sentences

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

April 30, 2024 October 31, 2023

July 31, 2024 October 31, 2023

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

the interest rate of the revolving line of credit is variable based on the one-month SOFR, which was 5.33 % at April 30, 2024, plus 1.78 %.

the interest rate of the revolving line of credit is variable based on the one-month SOFR, which was 5.34 % at July 31, 2024, plus 1.78 %.

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

22 unchanged sentences

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

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

As of July 31, 2024, the Company's outstanding borrowings under the Supplements were $ 40,000,000 and it had $ 75,000,000 available to borrow.

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

18 unchanged sentences

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

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.

The Company capitalized interest of $ 347,000 and $ 207,000 during the three months ended July 31, 2024 and 2023, and $ 501,000 and $ 513,000 for the nine months ended July 31, 2024 and 2023, respectively.

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

3 unchanged sentences

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

April 30, 2024 October 31, 2023

July 31, 2024 October 31, 2023

Loan guarantee — 1,080

8 unchanged sentences

Three Months Ended

April 30, Six Months Ended

July 31, Nine Months Ended

2024 2023 2024 2023

10 unchanged sentences

Three Months Ended

April 30, Six Months Ended

July 31, Nine Months Ended

2024 2023 2024 2023

11 unchanged sentences

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

Classification April 30, 2024 October 31, 2023

Classification July 31, 2024 October 31, 2023

Operating lease ROU assets Other assets $ 2,809 $ 3,484

7 unchanged sentences

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

Six Months Ended

Nine Months Ended

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

11 unchanged sentences

Three Months Ended

April 30, Six Months Ended

July 31, Nine Months Ended

2024 2023 2024 2023

16 unchanged sentences

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

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.

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

LIMONEIRA COMPANY

2 unchanged sentences

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

April 30, 2024 October 31, 2023

July 31, 2024 October 31, 2023

Balance Sheet Balance Sheet

6 unchanged sentences

10 Rosales $ 1,202 $ — $ 924 $ 896 $ — $ 270

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

11 Del Mar $ — $ — $ 462 $ — $ — $ —

Three Months Ended July 31, 2024 Three Months Ended July 31, 2023

Consolidated Statement of Operations Consolidated Statement of Operations

8 unchanged sentences

10 Rosales $ 368 $ — $ 1,545 $ — $ — $ — $ — $ —

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

Nine Months Ended July 31, 2024 Nine Months Ended July 31, 2023

Consolidated Statement of Operations Consolidated Statement of Operations

30 unchanged sentences

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

(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.

The Company has a receivable from FGF for lemon sales and the sale of packing supplies and a payable due to FGF for fruit purchases and services.

(7) FGF - The Company has a receivable from FGF for lemon sales and the sale of packing supplies and a payable due to FGF for fruit purchases and services.

The Company records revenue related to the licensing of intangible assets to FGF.

4 unchanged sentences

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 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.

(11) Del Mar - The Company has an interest in Del Mar as a general partner and as a limited partner as further described in Note 6 - Equity in Investments.

Del Mar markets lemons through the Company and the Company has a payable due to Del Mar for such lemon procurement.

The effective tax rate for the nine months ended July 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 stock-based compensation, 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 July 31, 2024.

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

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

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

Retirement Plans

4 unchanged sentences

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

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.

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.

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.

6 unchanged sentences

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

Six Months Ended

Nine Months Ended

Administrative expenses $ — $ 20

15 unchanged sentences

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

Performance Awards

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”).

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.

Management Performance Awards

Certain restricted stock grants are made to management under the Stock Plan ("Performance Awards").

Historically the Company granted awards to management each December based on the achievement of certain annual financial performance and other criteria achieved during the previous fiscal year.

These grants were based on a percentage of the employee’s base salary divided by the stock price on the grant date once the performance criteria were met, and generally vested over a two-year period as service was provided.

During December 2023, 36,127 shares of stock with a per share price of $ 19.57 were granted to management 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 and vested upon issuance.

The related compensation expense of $ 84,000 was recognized upon vesting.

During May 2024, 35,779 shares of stock with a per share price of $ 20.07 were granted to management.

The related compensation expense of approximately $ 718,000 will be recognized over three years as the shares vest.

In May 2024, the Company entered into Performance Share-Based Agreements with members of management whereby the employees may be granted common stock in the future based on the achievement of certain long-term performance goals.

The Company recorded $ 197,000 of stock compensation expense related to these awards during the nine months ended July 31, 2024.

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Stock-based Compensation (continued)

Executive Awards

1 unchanged sentence

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

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.

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

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.

1 unchanged sentence

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

During June 2024, the Company granted 40,926 shares of stock with a per share price of $ 20.36 .

The related compensation expense of approximately $ 833,000 will be recognized over the next year as the shares vest.

In November 2023, the Company entered into Performance Share-Based Award Agreements with key executives whereby the executives may be granted 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.

The Company recorded $ 292,000 of stock compensation expense related to these awards during the nine months ended July 31, 2024.

Director Awards

3 unchanged sentences

Exchange of Common Stock

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.

During the nine months ended July 31, 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

13 unchanged sentences

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, gain on legal settlement, total other income (expense) and income taxes, or specifically identify them to its operating segments.

The Company does not allocate selling, general and administrative expense, impairment of intangible asset, 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.

3 unchanged sentences

Segment Information (continued)

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

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

Packing Eliminations

8 unchanged sentences

Depreciation and amortization — — — — — 1,799 316 2,115

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

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

Operating income (loss) $ 3,769 $ 4,555 $ — $ 9,793 $ 94 $ 16,412 $ ( 7,419 ) $ 8,993

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

Packing Eliminations

8 unchanged sentences

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

Operating (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):

Operating income (loss) $ 2,621 $ 2,016 $ — $ 432 $ 913 $ 4,247 $ ( 5,796 ) $ ( 1,549 )

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

Packing Eliminations

8 unchanged sentences

Depreciation and amortization — — — — — 5,331 942 6,273

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):

Operating income (loss) $ 4,284 $ 8,435 $ — $ 10,716 $ 354 $ 18,458 $ ( 21,885 ) $ ( 3,427 )

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

Packing Eliminations

8 unchanged sentences

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

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

Operating income $ 351 $ 8,331 $ — $ 3,012 $ 1,937 $ 8,021 $ 12,452 $ 20,473

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

July 31, Nine Months Ended

2024 2023 2024 2023

7 unchanged sentences

Subsequent Events

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.

The Company evaluated events subsequent to July 31, 2024 through the date of this filing, to assess the need for potential recognition or disclosure in this Quarterly Report.

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

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

What changed 10-Q

Item 1. Financial Statements