What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2024-09-09 compared with 2024-06-06 · 199 added, 196 removed, 369 unchanged (52% of the section changed)

65 unchanged sentences

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

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

As of July 31, 2024, the state was free from severe 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.

1 unchanged sentence

Bureau of Reclamation announced that Lake Mead will operate in a Tier 1 shortage in 2025, 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.

In response to this and prior years' 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 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.

1 unchanged sentence

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.

On May 7, 2024, we announced that the Santa Paula City Council 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.

1 unchanged sentence

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

On July 12, 2024, we declared a cash dividend of $0.075 per common share paid on July 19, 2024, in the aggregate amount of approximately $1.4 million to stockholders of record as of July 8, 2024.

COVID-19 Pandemic

11 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 643 — 643 —

(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:

Operating income (loss):

Agribusiness 16,412 4,247 18,458 8,021

Other operations 206 371 336 891

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

Impairment of intangible asset (643) — (643) —

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

Gain on legal settlement — — — 2,269

Selling, general and administrative (6,994) (4,622) (21,707) (19,907)

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):

10 unchanged sentences

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, 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.

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, impairment of intangible asset, (gain) loss 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.

3 unchanged sentences

Three Months Ended

April 30, Six Months Ended

July 31, Nine Months Ended

2024 2023 2024 2023

7 unchanged sentences

Pension settlement cost — — — 2,741

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

Impairment of intangible asset 643 — 643 —

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

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

2 unchanged sentences

Adjusted EBITDA $ 13,791 $ 2,842 $ 25,518 $ 1,129

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,

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

Total net revenues for the three months ended July 31, 2024 were $63.3 million, compared to $52.5 million for the three months ended July 31, 2023.

The 21% increase of $10.8 million was primarily due to increased agribusiness revenues from avocados and lemons.

This was partially offset by decreased agribusiness revenues from specialty citrus and other crops and farm management, as detailed below ($ in thousands):

Three Months Ended July 31,

2024 2023 Change

6 unchanged sentences

Agribusiness revenues $ 61,849 $ 51,092 $ 10,757 21%

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 increase in the third quarter of fiscal year 2024, compared to the same period of fiscal year 2023, was primarily due to increased volume and higher prices of fresh lemons sold.

During the third quarter of fiscal years 2024 and 2023, fresh packed lemon sales were $25.8 million and $24.2 million, in aggregate, on 1,400,000 and 1,352,000 cartons of lemons sold at average per carton prices of $18.43 and $17.92, respectively.

Lemon revenues in the third quarter of fiscal years 2024 and 2023 included brokered lemons and other lemon sales of $9.8 million and $8.0 million, lemon packing of $5.2 million and $5.5 million and lemon by-product sales of $1.2 million and $0.6 million, respectively.

The increase in the third quarter of fiscal year 2024, compared to the same period of fiscal year 2023, was primarily due to 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.

During the third quarter of fiscal years 2024 and 2023, we sold 8,855,000 and 2,822,000 pounds of avocados at an average per pound price of $1.57 and $0.99, respectively.

The decrease in the third 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 third quarter of fiscal years 2024 and 2023, we sold 43,000 and 71,000 cartons of oranges at an average per carton price of $26.98 and $18.17, respectively.

• Specialty citrus and other crops:

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.

The decrease in the third quarter of fiscal year 2024, compared to the same period of fiscal year 2023, was primarily due to decreased volume and lower prices of specialty citrus sold.

During the third quarter of fiscal years 2024 and 2023, we sold 25,000 and 70,000 40-pound carton equivalents of specialty citrus at an average per carton price of $22.00 and $25.88, 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 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.

The decrease in farm management revenues in the third 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 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.

The increase in other revenue in the third quarter of fiscal year 2024, compared to the same period of fiscal year 2023, was primarily due to fallowing revenue.

Other operations revenue in the third quarters of fiscal years 2024 and 2023 were $1.5 million and $1.4 million, respectively.

Costs and 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.

Total costs and expenses in the third quarter of fiscal year 2024 were $54.3 million, compared to $54.0 million in the same period of fiscal year 2023.

The increase of $0.3 million was primarily due to an increase in selling, general and administrative expenses and the 2024 impairment of intangible asset, partially offset by the decrease in loss on disposal of assets and a decrease in agribusiness costs and expenses.

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

Three Months Ended April 30,

Three Months Ended July 31,

2024 2023 Change

8 unchanged sentences

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.

During the third quarter of fiscal years 2024 and 2023, we packed and sold 1,400,000 and 1,352,000 cartons of lemons at average per carton costs of $7.96 and $9.72, respectively.

The decrease in per carton packing costs was primarily due to higher volume and decreased costs for labor and benefits and facility operating costs.

• Harvest costs:

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.

The decrease in the third quarter of fiscal year 2024, compared to the same period of fiscal year 2023, was primarily due to decreased volume of lemons harvested, partially offset by increased volume of avocados harvested.

• 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 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.

The decrease in the third 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:

1 unchanged sentence

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

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.

The increase in the third quarter 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.

In the third quarter of fiscal years 2024 and 2023, we incurred costs for third-party grower fruit of $10.5 million and $6.4 million, respectively.

Of the 1,400,000 and 1,352,000 cartons of lemons packed and sold during the third quarter of fiscal years 2024 and 2023, 869,000 (62%) and 594,000 (44%), were procured from third-party growers at average per carton prices of $12.06 and $10.78, respectively.

Additionally, in the third quarter of fiscal years 2024 and 2023, we incurred $9.4 million and $8.2 million, respectively, of costs for purchased, packed fruit for resale.

• Other costs:

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

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

• Depreciation and amortization:

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.

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

Other operations expenses were $1.3 million and $1.0 million in the third quarter of fiscal years 2024 and 2023, respectively.

(Gain) loss on disposal of assets, net was immaterial and $1.5 million in the third quarter of fiscal years 2024 and 2023, respectively.

The fiscal year 2023 loss on disposal of assets, net was primarily due to orchard disposals.

Selling, general and administrative costs and expenses were $7.0 million and $4.6 million in the third quarter of fiscal years 2024 and 2023, respectively.

The 51% increase of $2.4 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.

• $1.7 million net increase in salaries, benefits and incentive compensation;

• $0.9 million net increase in selling expenses;

• $0.2 million net decrease in other selling, general and administrative expenses.

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.

Total other income (expense) was $0.2 million and $(0.1) million in the third quarter of fiscal years 2024 and 2023, respectively.

The increase of $0.3 million in total other income was primarily due to increased equity earnings related to LLCB.

We recorded an estimated income tax (provision) benefit of $(3.0) million and $0.4 million in the third quarter of fiscal years 2024 and 2023 on pre-tax income (loss) of $9.2 million and $(1.6) million, respectively.

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

federal statutory tax rate of 21.0% due primarily 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.

Our projected annual effective blended tax rate for fiscal year 2024, excluding discrete items, is approximately 33.0%.

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,

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

Nine Months Ended July 31, 2024 Compared to the Nine Months Ended July 31, 2023

Total net revenues for the nine months ended July 31, 2024 were $147.6 million, compared to $138.5 million for the nine months ended July 31, 2023.

The 7% increase of $9.1 million was primarily due to increased agribusiness revenues from avocados and lemons, partially offset by decreased agribusiness revenues from specialty citrus and other crops, as detailed below ($ in thousands):

Nine Months Ended July 31,

2024 2023 Change

6 unchanged sentences

Agribusiness revenues $ 143,445 $ 134,296 $ 9,149 7%

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 increase in the first nine months of fiscal year 2024, compared to the same period of fiscal year 2023, was primarily due to higher prices, partially offset by decreased volume of fresh lemons sold.

During the first nine months of fiscal years 2024 and 2023, fresh packed lemon sales were $75.6 million and $75.6 million, in aggregate, on 3,983,000 and 4,206,000 cartons of lemons sold at average per carton prices of $18.98 and $17.96, respectively.

Lemon revenues in the first nine months of fiscal years 2024 and 2023 included brokered lemons and other lemon sales of $16.5 million and $11.9 million, lemon packing of $15.8 million and $17.5 million, and lemon by-product sales of $2.9 million and $3.1 million, respectively, and included legal settlement proceeds of $1.4 million allocated to lemons in fiscal year 2023.

The increase in the first nine months of fiscal year 2024, compared to the same period in fiscal year 2023, was primarily due to 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.

During the first nine months of fiscal years 2024 and 2023, we sold 10,450,000 and 3,763,000 pounds of avocados at an average per pound price of $1.55 and $1.06, respectively.

In addition, avocado revenues in fiscal year 2023 included legal settlement proceeds of $2.4 million allocated to avocados and crop insurance proceeds of $0.7 million.

The decrease in the first nine 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 oranges sold.

During the first nine months of fiscal years 2024 and 2023, we sold 189,000 and 223,000 cartons of oranges at an average per carton price of $18.31 and $17.15, 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.

The decrease in the first nine 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 specialty citrus sold.

During the first nine months of fiscal years 2024 and 2023, we sold 71,000 and 165,000 40-pound carton equivalents of specialty citrus at an average per carton price of $26.61 and $24.70, 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.

The increase in farm management revenues in the first nine 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.

The increase in other revenue in the first nine months of fiscal year 2024, compared to the same period of fiscal year 2023, was primarily due to fallowing revenue.

Other operations revenue in both the first nine months of fiscal years 2024 and 2023 was $4.2 million.

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,

Total costs and expenses in the first nine months of fiscal year 2024 were $151.1 million, compared to $118.0 million in the same period of fiscal year 2023.

The 28% increase of $33.1 million was primarily due to the 2023 net gain on disposal of assets, the 2023 gain on legal settlement and an increase in selling, general and administrative expenses, partially offset by a decrease in agribusiness costs and expenses.

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

Nine Months Ended July 31,

2024 2023 Change

8 unchanged sentences

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.

During the first nine months of fiscal years 2024 and 2023, we packed and sold 3,983,000 and 4,206,000 cartons of lemons at average per carton costs of $8.90 and $8.69, respectively.

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

• 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.

The decrease in the first nine 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, partially offset by increased volume of avocados harvested.

• 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.

The decrease in the first nine 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:

1 unchanged sentence

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.

The increase in the first nine 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 nine months of fiscal years 2024 and 2023, we incurred costs for third-party grower fruit of $37.6 million and $26.9 million, respectively.

Of the 3,983,000 and 4,206,000 cartons of lemons packed and sold during the first nine months of fiscal years 2024 and 2023, 2,921,000 (73%) and 2,224,000 (53%), were procured from third-party growers at average per carton prices of $12.89 and $12.11, respectively.

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

Additionally, in the first nine months of fiscal years 2024 and 2023, we incurred $15.9 million and $14.0 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.

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

• 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.

Depreciation and amortization expense in the first nine months of fiscal year 2024 were similar to the same period of fiscal year 2023.

Other operations expenses were $3.9 million and $3.3 million in the first nine 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:

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

Gain on disposal of assets, net was $0.1 million and $29.2 million in the first nine months of fiscal years 2024 and 2023, respectively.

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

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

Selling, general and administrative costs and expenses were $21.7 million and $19.9 million in the first nine months of fiscal years 2024 and 2023, respectively.

The 9% increase of $1.8 million was primarily due to:

• $0.9 million net increase in selling expenses;

• $0.6 million net increase in salaries, benefits and incentive compensation;

• $0.3 million net increase in other selling, general and administrative expenses, primarily associated with our strategic initiatives.

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.

Total other income (expense) was $16.6 million and $(2.3) million in the first nine months of fiscal years 2024 and 2023, respectively.

The increase of $18.9 million in total other income was primarily due to:

• $16.6 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;

• $2.9 million decrease of other 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.

We recorded an estimated income tax provision of $4.1 million and $5.5 million in the first nine months of fiscal years 2024 and 2023 on pre-tax income of $13.1 million and $18.2 million, respectively.

The tax provision recorded for the first nine 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 33.0%.

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 first six months of fiscal years 2024 and 2023.

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

Segment Results of Operations

5 unchanged sentences

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

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):

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

The following table shows the segment results of operations for the three months ended July 31, 2024 (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)

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

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

The following table shows the segment results of operations for the three months ended July 31, 2023 (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)

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

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 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;

For the third quarter of fiscal years 2024 and 2023, our fresh lemons segment total net revenues were $36.7 million and $32.7 million, respectively.

The 12% increase of $4.0 million was primarily due to:

• Fresh packed lemon sales increase of $1.6 million;

• Lemon by-products sales increase of $0.6 million;

• Brokered lemons and other lemon sales increase of $1.8 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 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:

For the third quarter of fiscal years 2024 and 2023, our fresh lemons segment costs and expenses were $33.0 million and $30.1 million, respectively.

The 9% increase of $2.9 million was primarily due to:

• Harvest costs decrease of $3.0 million;

4 unchanged sentences

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

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 third quarter of fiscal years 2024 and 2023, our lemon packing segment total net revenues were $15.7 million and $15.2 million, respectively.

The 4% increase of $0.5 million was primarily due to increased volume of lemons packed and sold.

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, subcontracted costs and facility operating costs.

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.

For the third quarter of fiscal years 2024 and 2023, our lemon packing costs and expenses were $11.1 million and $13.1 million, respectively.

The 15% decrease of $2.0 million was primarily due to decreased costs for labor and benefits and facility operating costs in the third quarter of fiscal year 2024.

For the third quarter of fiscal years 2024 and 2023, lemon packing segment operating income per carton sold was $3.25 and $1.49, respectively.

The lemon packing segment included $10.5 million and $9.7 million of intersegment revenues for the third 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.

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

For the third quarter of fiscal years 2024 and 2023, our avocados segment revenues were $13.9 million and $3.5 million, respectively.

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

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.

For the third quarter of fiscal years 2024 and 2023, our avocados segment costs and expenses were $4.1 million and $3.0 million, respectively.

The increase of $1.1 million was primarily due to the following:

• Harvest costs increase of $1.2 million;

• Growing costs increase of $0.3 million.

• Growing costs decrease of $0.1 million.

Other Agribusiness

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;

Our other agribusiness segment total net revenues were $6.0 million and $9.4 million for the third quarter of fiscal years 2024 and 2023, respectively.

The 36% decrease of $3.4 million was primarily due to:

• Farm management revenues decrease of $2.2 million;

• Specialty citrus and other crops revenues decrease of $1.4 million;

• Other revenues increase of $0.2 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 $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.

Our other agribusiness costs and expenses were $5.9 million and $8.5 million for the third quarter of fiscal years 2024 and 2023, respectively.

The 30% decrease of $2.6 million was primarily due to:

• Growing costs decrease of $2.0 million;

• Purchased fruit costs decrease of $0.6 million.

Total agribusiness depreciation and amortization expenses were $1.8 million and $1.7 million for the third 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):

Our corporate and other operations had revenues of $1.5 million and $1.4 million for the third quarter of fiscal years 2024 and 2023, respectively.

Costs and expenses in our corporate and other operations were approximately $8.6 million and $6.9 million for the third quarter of fiscal years 2024 and 2023, respectively, and include selling, general and administrative costs and expenses, impairment of intangible asset, (gain) loss on disposal of assets, net and gain on legal settlement, none of which are allocated to the operating segments.

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

Nine Months Ended July 31, 2024 Compared to the Nine Months Ended July 31, 2023

The following table shows the segment results of operations for the nine months ended July 31, 2024 (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)

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

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

The following table shows the segment results of operations for the nine months ended July 31, 2023 (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

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;

For the first nine months of fiscal years 2024 and 2023, our fresh lemons segment total net revenues were $95.0 million and $92.0 million, respectively.

The 3% increase of $3.0 million was primarily due to:

• Brokered lemons and other lemon sales increase of $4.6 million;

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

• Lemon by-products decrease of $0.2 million;

• Legal settlement proceeds of $1.4 million allocated to fresh lemons in 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.

For the first nine months of fiscal years 2024 and 2023, our fresh lemons segment costs and expenses were $90.7 million and $91.7 million, respectively.

The 1% decrease of $1.0 million was primarily due to:

2 unchanged sentences

• Third-party grower and supplier costs increase of $13.1 million;

• Intersegment costs and expenses increase of $0.8 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.

For the first nine months of fiscal years 2024 and 2023, our lemon packing segment total net revenues were $43.9 million and $44.9 million, respectively.

The 2% decrease of $1.0 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.

For the first nine months of fiscal years 2024 and 2023, our lemon packing costs and expenses were $35.5 million and $36.6 million, respectively.

The 3% decrease of $1.1 million was primarily due to decreased volume of lemons packed and sold, partially offset by increased subcontracted costs.

For the first nine months of fiscal years 2024 and 2023, lemon packing segment operating income per carton sold was $2.12 and $1.98, respectively.

The lemon packing segment included $28.1 million and $27.4 million of intersegment revenues in the first nine 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.

For the first nine months of fiscal years 2024 and 2023, our avocados segment revenues were $16.2 million and $7.1 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.

Our avocados segment costs and expenses were $5.5 million and $4.1 million for the first nine months of fiscal years 2024 and 2023, respectively.

The 36% increase of $1.5 million was primarily due to the following:

2 unchanged sentences

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;

Our other agribusiness segment total net revenues were $16.5 million and $17.7 million for the first nine months of fiscal years 2024 and 2023, respectively.

The 7% decrease of $1.2 million was primarily due to:

• Orange revenues decrease of $0.4 million;

• Specialty citrus and other crops revenues decrease of $1.7 million;

• Farm management revenues increase of $0.5 million;

• Other revenues increase 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.

Our other agribusiness costs and expenses were $16.1 million and $15.7 million for the first nine months of fiscal years 2024 and 2023, respectively.

The 2% increase of $0.4 million was primarily due to:

• Growing costs increase of $1.1 million;

• Purchased fruit costs increase of $0.1 million;

• Freight costs decrease of $0.2 million.

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.

• Purchased fruit costs decrease of $0.6 million.

Total agribusiness depreciation and amortization expenses were $5.3 million and $5.6 million, for the first nine months of fiscal years 2024 and 2023, respectively.

Corporate and Other

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.

Our corporate and other operations revenues were $4.2 million for the first nine months of both fiscal years 2024 and 2023.

Costs and expenses (gains) in our corporate and other operations were $25.1 million and $(9.2) million for the first nine months of fiscal years 2024 and 2023, respectively, and include selling, general and administrative costs and expenses, impairment of intangible asset, (gain) loss on disposal of assets, net and gain on legal settlement, none of which are allocated to the operating segments.

Depreciation and amortization expenses for the first nine months of fiscal years 2024 and 2023 were similar at $0.9 million.

Seasonal Operations

3 unchanged sentences

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 April 30, 2024 and 2023

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

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

Trailing Twelve Months Ended April 30,

Trailing Twelve Months Ended July 31,

Net revenues:

5 unchanged sentences

Other operations 5,192 4,425

Impairment of intangible asset 643 —

Loss (gain) on disposal of assets 221 (34,202)

9 unchanged sentences

Total other income (expense) 21,435 (3,722)

(Loss) income before income tax benefit (provision) (2,546) 27,130

Income tax benefit (provision) 636 (8,666)

Net (loss) income (1,910) 18,464

Income before income tax provision 8,317 14,864

Income tax provision (2,761) (4,975)

Net income 5,556 9,889

Loss attributable to noncontrolling interest 563 310

Net (loss) income attributable to Limoneira Company $ (1,637) $ 18,739

Net income attributable to Limoneira Company $ 6,119 $ 10,199

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

• 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 revenues increased $10.9 million, primarily due to increased avocado and farm management revenue.

• Total costs and expenses increased $42.7 million, primarily due to the gain on disposal of assets and legal settlement recognized in 2023, as well as increased agribusiness costs and selling, general and administrative expenses in 2024.

• 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.

1 unchanged sentence

Liquidity and Capital Resources

Our primary sources of liquidity are cash and cash flows generated from our operations and use of our revolving credit facility.

Our primary sources of liquidity are cash and cash flows generated from our operations, use of our revolving credit facility, sales of assets and distributions from our equity investments.

Our liquidity and capital position fluctuates during the year depending on seasonal production cycles, weather events and demand for our products.

3 unchanged sentences

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 April 30, 2024, related to debt and leases.

See Note 10 - Long-Term Debt and Note 12 - Leases for amounts outstanding as of July 31, 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.

3 unchanged sentences

Cash Flows from Operating Activities

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 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.

Net cash provided by (used in) operating activities was $11.3 million and $(12.6) million for the nine months ended July 31, 2024 and 2023, respectively.

The significant components of our cash flows provided by (used in) operating activities were as follows:

• Net income was $9.1 million and $12.7 million for the nine months ended July 31, 2024 and 2023, respectively.

The components of net income in the nine months ended July 31, 2024, compared to the net income in the same period in fiscal year 2023 consist of a decrease in operating income of $23.9 million primarily due to the Northern Properties sale, an increase in total other income of $18.9 million, primarily related to LLCB equity earnings and a decrease in income tax provision of $1.5 million.

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

◦ Adjustments were $13.2 million and $(14.1) million in the nine months ended July 31, 2024 and 2023, respectively, primarily related to gain on disposal of assets, net, cash distributions from equity investments, equity in earnings of investments, net, depreciation and amortization and deferred income taxes.

◦ Changes in operating assets and liabilities were $11.1 million of operating cash in both the nine months ended July 31, 2024 and 2023, primarily related to accounts receivables and receivables/other from related parties, cultural costs, prepaid expenses and other current assets, accrued liabilities and payables to related parties, income taxes payable and other long-term liabilities.

Cash Flows from Investing Activities

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.

Net cash (used in) provided by investing activities was $(6.7) million and $92.4 million for the nine months ended July 31, 2024 and 2023, respectively.

▪ The $6.7 million of cash used in investing activities during the nine months ended July 31, 2024 was comprised primarily of capital expenditures of $6.7 million, primarily related to orchard and vineyard development.

▪ The $92.4 million of cash provided by investing activities during the nine months ended July 31, 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 $9.0 million, primarily related to orchard and vineyard development.

Cash Flows from Financing Activities

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.

Net cash used in financing activities was $7.1 million and $69.6 million for the nine months ended July 31, 2024 and 2023, respectively.

• The $7.1 million of cash used in financing activities during the nine months ended July 31, 2024 was comprised primarily of common and preferred dividends of $4.4 million and exchange of common stock of $1.8 million.

• The $69.6 million of cash used in financing activities during the nine months ended July 31, 2023 was comprised primarily of net repayments of long-term debt of $64.9 million and common and preferred dividends of $4.4 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 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.

We finance our working capital and other liquidity requirements primarily through cash from operations, distributions from equity investments and from our Credit Facility with AgWest Farm Credit, formerly known 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.

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

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

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 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.

The proceeds were used to pay down all of the Company's domestic debt except the Non-Revolving Credit Supplement.

As of July 31, 2024, our outstanding borrowings under the AgWest Farm Credit Facility were $40.0 million and we had $75.0 million of availability.

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

The proceeds were used to pay down all of our domestic debt except the Non-Revolving Credit Supplement.

The MLA subjects us to affirmative and restrictive covenants including, among other customary covenants, financial reporting requirements, requirements to maintain and repair any collateral, restrictions on the sale of assets, restrictions on the use of proceeds, prohibitions on the incurrence of additional debt and restrictions on the purchase or sale of major assets of our business.

4 unchanged sentences

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.

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 $17.1 million in the nine months ended July 31, 2024.

On June 5, 2024, we received a cash distribution of $15.0 million from the joint venture which we used to pay down debt.

As of July 31, 2024, the 50%-owned unconsolidated joint venture had $69.9 million of unaudited cash and cash equivalents on hand.

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.

Such preferred dividends paid were $0.4 million in the nine months ended July 31, 2024 and 2023.

Cash dividends declared in the nine months ended July 31, 2024 and 2023 were $0.225 per common share and such dividends paid were $4.1 million and $4.0 million, in the nine months ended July 31, 2024 and 2023, respectively.

Critical Accounting Estimates

2 unchanged sentences

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 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.

During the nine months ended July 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.

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

4 unchanged sentences

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