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Item 7. Management’s Discussion and Analysis

2024-12-23 compared with 2023-12-21 · 141 added, 132 removed, 206 unchanged (57% of the section changed)

12 unchanged sentences

The agribusiness division is comprised of four reportable operating segments:

fresh lemons, lemon packing, avocados and other agribusiness, which includes oranges, specialty citrus, other crops and farm management services.

fresh lemons, lemon packing, avocados and other agribusiness, which primarily includes oranges, specialty citrus, other crops and farm management services.

The agribusiness division includes our core operations of farming, harvesting, lemon packing and lemon sales operations.

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Other operations 5,274 3 % 4,612 3 % 4,438 2 %

(Gain) loss on disposal of assets, net (28,849) (17) % (4,500) (2) % 109 — %

Impairment of intangible asset 643 1 % — — % — — %

Gain on disposal of assets, net (507) (1) % (28,849) (17) % (4,500) (2) %

Gain on legal settlement — — % (2,269) (1) % — — %

1 unchanged sentence

Total costs and expenses 197,681 100 % 169,118 100 % 182,404 100 %

Operating income (loss):

Operating (loss) income:

Agribusiness 21,116 5,212 18,630

Other operations 306 908 886

Gain (loss) on disposal of assets, net 28,849 4,500 (109)

Impairment of intangible asset (643) — —

Gain on disposal of assets, net 507 28,849 4,500

Gain on legal settlement — 2,269 —

Selling, general and administrative (27,464) (26,455) (21,815)

Operating income (loss) 10,783 2,201 (6,333)

Operating (loss) income (6,178) 10,783 2,201

Other income (expense):

2 unchanged sentences

Equity in earnings of investments, net 18,356 5,322 1,341

Other (expense) income, net (2,611) (955) 89

Other income (expense), net 212 (2,611) (955)

Total other income (expense) 17,725 2,581 (1,852)

Income (loss) before income tax (provision) benefit 13,364 349 (4,163)

Income tax (provision) benefit (4,247) (823) 266

Income before income tax provision 11,547 13,364 349

Income tax provision (4,373) (4,247) (823)

Net income (loss) 7,174 9,117 (474)

2 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, named executive officer cash severance, pension settlement cost, (gain) loss on disposal of assets, net, cash bonus related to sale of assets and gain on legal settlement are important measures to evaluate our results of operations between periods on a more comparable basis.

Adjusted EBITDA in fiscal year 2021 did not exclude stock-based compensation which has now been excluded as management believes this is a better representation of cash generated by operations and is consistent with peer company reporting.

Adjusted EBITDA for fiscal year 2021 has been restated to conform to the current presentation.

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, named executive officer cash severance, pension settlement cost, impairment of intangible asset, gain on disposal of assets, net, cash bonus related to sale of assets, gain on legal settlement and severance benefits are important measures to evaluate our results of operations between periods on a more comparable basis.

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

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Interest expense, net of patronage dividends 961 494 2,291

Income tax provision (benefit) 4,247 823 (266)

Income tax provision 4,373 4,247 823

Depreciation and amortization 8,374 8,576 9,798

3 unchanged sentences

Pension settlement cost — 2,700 607

(Gain) loss on disposal of assets, net (28,849) (4,500) 109

Impairment of intangible asset 643 — —

Gain on disposal of assets, net (507) (28,849) (4,500)

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

Gain on legal settlement — (2,269) —

Severance benefits 1,160 — —

Adjusted EBITDA $ 26,718 $ (224) $ 11,894

1 unchanged sentence

Total net revenues for fiscal year 2024 were $191.5 million compared to $179.9 million for fiscal year 2023.

The 3% decrease of $4.7 million was primarily due to decreased avocados and oranges agribusiness revenues, partially offset by farm management agribusiness revenues, as detailed below (in thousands):

The 6% increase of $11.6 million was primarily due to increased agribusiness revenues from avocados, partially offset by decreased agribusiness revenues from lemons and specialty citrus and other crops, as detailed below ($ in thousands):

Years Ended October 31,

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Farm management 10,212 9,931 281 3%

Other 4,144 4,092 52 1%

Agribusiness revenues $ 185,923 $ 174,381 $ 11,542 7%

The decrease in fiscal year 2023, compared to fiscal year 2022, was primarily due to decreased fresh lemon sales, partially offset by increased brokered lemons and other lemon sales.

During fiscal years 2023 and 2022, fresh lemon sales were $86.8 million and $92.9 million, in aggregate, on 4.8 million and 4.9 million cartons of lemons sold at average per carton prices of $18.24 and $18.77, respectively.

Lemon revenues in fiscal years 2023 and 2022 included brokered lemons and other lemon sales of $30.3 million and $24.5 million, shipping and handling of $20.6 million and $22.2 million, and lemon by-product sales of $3.0 million and $3.5 million, respectively.

In addition, lemon revenues included settlement proceeds of $1.4 million allocated to lemons in fiscal year 2023.

The decrease in fiscal year 2023, compared to fiscal year 2022 was primarily due to decreased volume and lower prices of avocados sold.

During fiscal years 2023 and 2022, 3.8 million and 8.2 million pounds of avocados were sold at an average per pound price of $1.06 and $2.08, respectively.

The decrease for fiscal year 2024, compared to fiscal year 2023, was primarily due to decreased volume, partially offset by higher prices of fresh lemons sold.

Fresh lemon sales were $84.0 million and $86.8 million, in aggregate, on 4.5 million and 4.8 million cartons of lemons sold at average per carton prices of $18.87 and $18.24 for fiscal years 2024 and 2023, respectively.

Lemon revenues included brokered lemons and other lemon sales of $32.0 million and $26.2 million, lemon packing of $17.1 million and $20.6 million, and lemon by-product sales of $3.0 million and $3.0 million, respectively, for fiscal years 2024 and 2023.

Fiscal year 2023 revenues included settlement proceeds of $1.4 million allocated to lemons.

The increase for fiscal year 2024, compared to fiscal year 2023 was 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.

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

The decrease in fiscal year 2023, compared to fiscal year 2022, was primarily due to decreased volume, mainly related to the Northern Properties sale.

During fiscal years 2023 and 2022, 292,000 and 676,000 cartons of oranges were sold at an average per carton price of $19.79 and $14.66, respectively.

We sold 15.1 million and 3.8 million pounds of avocados at an average price per pound of $1.67 and $1.06 for fiscal years 2024 and 2023, respectively.

Fiscal year 2023 revenues included settlement proceeds of $2.4 million allocated to avocados and crop insurance proceeds of $0.7 million.

The decrease for fiscal year 2024, compared to fiscal year 2023, was primarily due to decreased volume and lower prices of oranges sold.

We sold 280,000 and 292,000 cartons of oranges at an average price per carton of $18.53 and $19.79 for fiscal years 2024 and 2023, respectively.

• Specialty citrus and other crops:

The increase in fiscal year 2023, compared to fiscal year 2022, was primarily due to higher prices, partially offset by decreased volume of specialty citrus sold.

During fiscal years 2023 and 2022, we sold 240,000 and 434,000 40-pound carton equivalents of specialty citrus at an average per carton price of $27.18 and $13.22, respectively.

Additionally, during fiscal years 2023 and 2022, we sold $2.9 million and $3.2 million of wine grapes, respectively.

The decrease for fiscal year 2024, compared to fiscal year 2023, was primarily due to decreased volume, partially offset by higher prices of specialty citrus sold.

We sold 79,000 and 240,000 40-pound carton equivalents of specialty citrus at an average price per carton of $28.23 and $27.18 for fiscal years 2024 and 2023, respectively.

Additionally, we sold $2.9 million of wine grapes for both fiscal years 2024 and 2023.

• Farm management:

Farm management revenues in fiscal year 2023 were $9.9 million, primarily due to the Northern Properties farming, management and operations services.

There were no farm management revenues in fiscal year 2022.

Other operations revenue in fiscal years 2023 and 2022 was $5.5 million and $5.3 million, respectively.

The increase in fiscal year 2023, compared to fiscal year 2022, was primarily due to increased leased land revenue.

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

The increase in farm management revenue for fiscal year 2024, compared to fiscal year 2023, was primarily due to twelve months of activity in fiscal year 2024 compared to nine months of activity in fiscal year 2023.

Other revenue is comprised primarily of fallowing and freight revenue.

Other revenue for fiscal year 2024 was similar compared to fiscal year 2023.

Other operations revenue for fiscal year 2024 was $5.6 million compared to $5.5 million for fiscal year 2023.

Costs and Expenses

Our total costs and expenses in fiscal year 2023 were $169.1 million, compared to $182.4 million in the same period of fiscal year 2022.

The 7% decrease of $13.3 million was primarily due to increased gain on disposal of assets, mainly related to the Northern Properties sale, partially offset by the loss on disposal of Cadiz Ranch assets and increased agribusiness costs and expenses.

Total costs and expenses for fiscal year 2024 were $197.7 million compared to $169.1 million for fiscal year 2023.

The 17% increase of $28.6 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):

5 unchanged sentences

Third-party grower and supplier costs 72,176 61,273 10,903 18%

Other costs 2,601 2,892 (291) (10)%

Depreciation and amortization 7,117 7,323 (206) (3)%

2 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 and facility operating costs.

In fiscal years 2023 and 2022, lemon packing costs were $45.7 million and $43.0 million, respectively.

The increase in fiscal year 2023 was primarily due to higher average per carton costs, partially offset by decreased volume of fresh lemons packed and sold compared to fiscal year 2022.

During fiscal years 2023 and 2022, we packed and sold 4.8 million and 4.9 million cartons of lemons at average per carton costs of $9.61 and $8.69, respectively.

The increase in average per carton costs in fiscal year 2023, compared to fiscal year 2022, was primarily due to increased labor and benefit costs.

Additionally, in fiscal years 2023 and 2022, packing costs included $2.9 million and $2.4 million of shipping costs, respectively.

The decrease for fiscal year 2024, compared to fiscal year 2023, was primarily due to decreased volume.

We packed and sold 4.5 million and 4.8 million cartons of lemons at average per carton costs of $9.60 and $9.61 for fiscal years 2024 and 2023, respectively.

• Harvest costs:

The decrease in harvest costs in fiscal year 2023, compared to fiscal year 2022, was primarily due to decreased volume of avocados, oranges and specialty citrus harvested, partially offset by increased volume of lemons harvested.

The decrease in harvest costs for fiscal year 2024 compared to 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 increase in fiscal year 2023, compared to fiscal year 2022, was primarily due to the Northern Properties farm management costs which were expensed in fiscal year 2023 and were capitalized as cultural costs in fiscal year 2022, as well as farm management decisions based on weather, harvest timing and crop conditions.

The decrease for fiscal year 2024, compared to fiscal year 2023, was primarily due to farm management decisions based on weather, harvest timing and crop conditions.

• Third-party grower and supplier costs:

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

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

The increase in fiscal year 2023, compared to fiscal year 2022, was primarily due to increased costs incurred for brokered fruit, partially offset by decreased costs for third-party growers and suppliers' fruit.

In fiscal years 2023 and 2022, we incurred costs for purchased, packed fruit for resale of $29.4 million and $26.2 million, respectively.

In fiscal years 2023 and 2022, we incurred costs for third-party growers and suppliers' fruit of $31.9 million and $33.4 million, respectively.

During fiscal years 2023 and 2022 of the 4.8 million and 4.9 million cartons of lemons packed and sold, 2.6 million (54%) and 2.6 million (52%), were procured from third-party growers and suppliers at average per carton prices of $12.44 and $13.03, respectively.

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

The increase for fiscal year 2024, compared to fiscal year 2023, was primarily due to increased volume and higher prices of third-party grower fruit sold.

We incurred costs for third-party grower fruit of $40.9 million and $31.9 million for fiscal years 2024 and 2023, respectively.

Of the 4.5 million and 4.8 million cartons of lemons packed and sold, 3.2 million (72%) and 2.6 million (54%), were procured from third-party growers at average per carton prices of $12.76 and $12.44 for fiscal years 2024 and 2023, 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, we incurred costs for supplier costs and purchased, packed fruit for resale of $31.3 million and $29.4 million for fiscal years 2024 and 2023, respectively.

• Other costs:

The decrease in other costs for fiscal year 2024 compared to fiscal year 2023 was primarily due to a decrease in shipping costs, mainly related to a decrease in volume of lemons sold.

• Depreciation and amortization:

Depreciation and amortization expense for fiscal years 2023 and 2022 was $7.3 million and $8.6 million, respectively.

The decrease in fiscal year 2023, compared to fiscal year 2022, was primarily due to the Northern Properties sale in fiscal year 2023.

Other operations expenses for fiscal years 2023 and 2022 were $4.6 million and $4.4 million, respectively.

Gain on disposal of assets, net in fiscal years 2023 and 2022 were $28.8 million and $4.5 million, respectively.

The change is 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 fiscal year 2023 due to the Settlement Agreement related to the Thomas fire.

Depreciation and amortization expenses for fiscal year 2024 were similar to fiscal year 2023.

Other operations expenses for fiscal year 2024 were $5.3 million compared to $4.6 million for fiscal year 2023.

The increase in other operations expenses was primarily due to severance benefits paid in fiscal year 2024 and increased residential and commercial rental expenses.

Gain on disposal of assets, net for fiscal year 2024 was $0.5 million compared to $28.8 million for fiscal year 2023.

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 for fiscal year 2023 due to the Settlement Agreement related to the Thomas fire.

Selling, general and administrative expenses for fiscal year 2024 were $27.5 million compared to $26.5 million for fiscal year 2023.

The $1.0 million increase was primarily due to:

• $2.5 million net increase in salaries, benefits and incentive compensation;

• $0.7 million increase in tax, legal and consulting fees primarily related to disposals of Northern Properties and Cadiz;

• $0.9 million increase in selling expenses;

• $1.3 million net increase in other selling, general and administrative expenses, primarily associated with our strategic initiatives.

Other Income (Expense)

Total other income (expense) was $2.6 million and $(1.9) million for fiscal years 2023 and 2022, respectively.

• $0.7 million increase in legal and consulting fees associated with our strategic initiatives;

• $0.1 million net increase in salaries, benefits and incentive compensation;

• $0.7 million net decrease in other selling, general and administrative expenses.

Total other income for fiscal year 2024 was $17.7 million compared to $2.6 million for fiscal year 2023.

The $15.1 million increase in total other income was primarily due to:

• $4.0 million increase of equity earnings in investments primarily due to LLCB;

• $1.8 million decrease of interest expense due to decreased long-term debt;

• $1.7 million increase of other expense primarily due to pension settlement cost.

We recorded for fiscal years 2023 and 2022 income tax provision of $4.2 million and $0.8 million on pre-tax income of $13.4 million and $0.3 million, respectively.

• $13.0 million increase of equity in earnings of investments, net, primarily due to LLCB’s closing of 554 residential homesites in fiscal year 2024;

• $2.8 million increase of other income, net primarily due to pension settlement cost in fiscal year 2023;

• $0.5 million increase of interest expense, net of patronage dividends, primarily due to decreased patronage dividends.

We recorded an income tax provision of $4.4 million and $4.2 million on pre-tax income of $11.5 million and $13.4 million for fiscal years 2024 and 2023, respectively.

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

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

federal statutory tax rate of 21.0% primarily 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.

Our effective tax rate for fiscal years 2024 and 2023 was 37.9% and 31.8%, respectively.

7 unchanged sentences

Each segment is subject to review and evaluations related to current market conditions, market opportunities and available resources.

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

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

See Note 21 - Segment Information for additional information regarding our operating segments.

8 unchanged sentences

Total net revenues 119,044 49,258 (32,127) 25,114 24,634 185,923 5,580 191,503

Costs and expenses (gain) 120,494 45,689 (31,081) 4,034 22,710 161,846 (1,304) 160,542

Costs and expenses 116,308 42,751 (32,127) 7,334 23,424 157,690 31,617 189,307

Depreciation and amortization — — — — — 7,117 1,257 8,374

Operating income $ 1,043 $ 5,965 $ — $ 3,012 $ 2,515 $ 5,212 $ 5,571 $ 10,783

Operating (loss) income $ 2,736 $ 6,507 $ — $ 17,780 $ 1,210 $ 21,116 $ (27,294) $ (6,178)

Segment information for fiscal year 2023 (in thousands):

7 unchanged sentences

Total net revenues 117,445 51,654 (31,081) 7,046 29,317 174,381 5,520 179,901

Costs and expenses 115,119 43,017 (29,817) 5,524 18,204 152,047 20,559 172,606

Costs and expenses (gains) 117,602 45,689 (31,081) 4,034 25,602 161,846 (1,304) 160,542

Depreciation and amortization — — — — — 7,323 1,253 8,576

3 unchanged sentences

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

For fiscal years 2023 and 2022, our fresh lemons segment total net revenues were $121.5 million and $120.9 million, respectively.

Our fresh lemons segment total net revenues for fiscal year 2024 were $119.0 million compared to $117.4 million for fiscal year 2023.

The 1% increase of $1.6 million was primarily due to:

• Fresh lemon sales decrease of $6.2 million;

• Brokered lemons and other lemon sales increase of $5.8 million;

• Lemon by-products decrease of $0.4 million;

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

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, transportation costs and packing service charges incurred from the lemon packing segment to pack lemons for sale.

For fiscal years 2023 and 2022, our fresh lemons segment costs and expenses were $120.5 million and $115.1 million, respectively.

The 5% increase of $5.4 million was primarily due to:

• Harvest costs increase of $0.3 million;

• Growing costs increase of $3.2 million;

• Fresh lemon sales decrease of $2.8 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.

Our fresh lemons segment costs and expenses for fiscal year 2024 were $116.3 million compared to $117.6 million for fiscal year 2023.

The 1% decrease of $1.3 million was primarily due to:

• Harvest costs decrease of $8.5 million;

• Growing costs decrease of $7.7 million;

• Third-party grower and supplier costs increase of $13.9 million;

• Transportation costs increase of $0.5 million;

• Intersegment costs and expenses increase of $1.0 million.

Lemon Packing

Lemon packing segment revenue is comprised of packing revenue, intersegment packing revenue and shipping and handling revenue.

For fiscal years 2023 and 2022, our lemon packing segment total net revenues were $51.7 million and $52.0 million, respectively, a 1% decrease of $0.3 million.

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

For fiscal years 2023 and 2022, our lemon packing costs and expenses were $45.7 million and $43.0 million, respectively.

The 6% increase of $2.7 million was primarily due to increased labor and benefit costs.

Lemon packing segment operating income per carton sold was $1.25 and $1.81 for fiscal years 2023 and 2022, respectively.

The lemon packing segment included $31.1 million and $29.8 million of intersegment revenues for fiscal years 2023 and 2022, respectively, that were charged to the fresh lemons segment to pack lemons for sale.

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

Our lemon packing segment total net revenues for fiscal year 2024 were $49.3 million compared to $51.7 million for fiscal year 2023.

The 5% decrease of $2.4 million was primarily due to decreased volume of lemons packed and sold.

Our lemon packing costs and expenses for fiscal year 2024 were $42.8 million compared to $45.7 million for fiscal year 2023.

The 6% decrease of $2.9 million was primarily due to decreased volume of lemons packed and sold, partially offset by increased subcontracted costs.

Lemon packing segment operating income per carton sold for fiscal year 2024 was $1.46 compared to $1.25 for fiscal year 2023.

The lemon packing segment included intersegment revenues for fiscal year 2024 of $32.1 million compared to $31.1 million for fiscal year 2023, that were charged to the fresh lemons segment to pack lemons for sale.

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

Our avocados segment revenues were $7.0 million and $17.3 million for fiscal years 2023 and 2022, respectively, a 59% decrease of $10.3 million, due primarily to alternating years of high and low production due to plant physiology.

Our avocados segment revenues for fiscal year 2024 were $25.1 million compared to $7.0 million for fiscal year 2023.

The 256% increase of $18.1 million was primarily due to alternating years of high and low production due to plant physiology and higher pricing.

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

Our avocados segment costs and expenses were $4.0 million and $5.5 million for fiscal years 2023 and 2022, respectively.

The 27% decrease of $1.5 million primarily consisted of the following:

• Harvest costs decrease of $0.9 million;

• Growing costs decrease of $0.6 million.

Our avocados segment costs and expenses for fiscal year 2024 were $7.3 million compared to $4.0 million for fiscal year 2023.

The 82% increase of $3.3 million primarily consisted of the following:

• Harvest costs increase of $2.3 million;

• Growing costs increase of $1.0 million.

Other Agribusiness

Our other agribusiness segment total net revenues were $25.2 million and $18.9 million for fiscal years 2023 and 2022, respectively.

The 34% increase of $6.3 million was primarily due to:

Our other agribusiness segment total net revenues for fiscal year 2024 were $24.6 million compared to $29.3 million for fiscal year 2023.

The 16% decrease of $4.7 million was primarily due to:

• Specialty citrus and other crops revenues decrease of $4.4 million;

• Orange revenues decrease of $0.6 million;

• Specialty citrus and other revenues increase of $0.5 million;

• Farm management revenues in fiscal year 2023 were $9.9 million.

There were no farm management revenues in fiscal year 2022.

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

Our other agribusiness costs and expenses were $22.7 million and $18.2 million for fiscal years 2023 and 2022, respectively.

The 25% increase of $4.5 million was primarily due to:

• Harvest costs decrease of $1.5 million;

• Farm management revenues increase of $0.3 million.

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

Our other agribusiness costs and expenses for fiscal year 2024 were $23.4 million compared to $25.6 million for fiscal year 2023.

The 9% decrease of $2.2 million was primarily due to:

• Purchased and supplier fruit costs decrease of $3.0 million;

• Shipping costs decrease of $0.3 million;

• Growing costs increase of $0.9 million;

• Purchased fruit costs increase of $1.6 million.

Total agribusiness depreciation and amortization expenses were $7.3 million and $8.6 million for fiscal years 2023 and 2022, respectively.

• Harvest costs increase of $0.2 million.

Total agribusiness depreciation and amortization expenses for fiscal year 2024 were $7.1 million compared to $7.3 million for fiscal year 2023.

Corporate and Other

Our corporate and other operations revenues were $5.5 million and $5.3 million for fiscal years 2023 and 2022, respectively.

Costs and expenses (gain) in our corporate and other operations were $(1.3) million and $20.6 million for fiscal years 2023 and 2022, respectively, and include selling, general and administrative costs and expenses, gain on disposal of assets, net and gain on legal settlement not allocated to the operating segments.

Depreciation and amortization expenses for fiscal years 2023 and 2022 were $1.3 million and $1.2 million, respectively.

Our corporate and other operations revenues for fiscal year 2024 were $5.6 million compared to $5.5 million for fiscal year 2023.

Costs and expenses (gains) in our corporate and other operations for fiscal years 2024 and 2023 were $31.6 million and $(1.3) million, respectively, and include selling, general and administrative costs and expenses, impairment of intangible asset, gain on disposal of assets, net and gain on legal settlement not allocated to the operating segments.

Depreciation and amortization expenses for were $1.3 million for both fiscal years 2024 and 2023.

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.

5 unchanged sentences

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

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

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

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

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

Cash Flows from Operating Activities

Net cash (used in) provided by operating activities was $(15.9) million and $14.8 million for fiscal years 2023 and 2022, respectively.

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

• Net income (loss) was $9.1 million and $(0.5) million for fiscal years 2023 and 2022, respectively.

The components of net income for fiscal year 2023, compared to net loss for fiscal year 2022, consists of an increase in operating income of $8.6 million and an increase in total other income of $4.4 million, offset by an increase in income tax provision of $3.4 million.

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

◦ Adjustments (used) provided $(22.5) million and $10.0 million for fiscal years 2023 and 2022, respectively, primarily related to depreciation and amortization, gain on disposal of assets, stock compensation expense, equity in earnings of investments, net and deferred income taxes.

◦ Changes in operating assets and liabilities (used in) provided by $(2.5) million and $5.3 million of operating cash for fiscal years 2023 and 2022, respectively, primarily related to cultural costs, prepaid expenses/other current assets, accounts payable/growers and suppliers payable, accrued liabilities/payables to related parties, and other long-term liabilities.

Net cash provided by (used in) operating activities was $17.9 million and $(15.9) million for fiscal years 2024 and 2023, respectively.

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

• Net income was $7.2 million and $9.1 million for fiscal years 2024 and 2023, respectively.

The components of net income for fiscal year 2024, compared to net income for fiscal year 2023, primarily consists of a decrease in operating income of $17.0 million and an increase in total other income of $15.1 million.

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

◦ Adjustments provided (used) $9.0 million and $(22.5) million for fiscal years 2024 and 2023, respectively, primarily related to depreciation and amortization, gain on disposal of assets, net, stock compensation expense, equity in earnings of investments, net and cash distributions from equity investments.

◦ Changes in operating assets and liabilities provided by (used in) $1.7 million and $(2.5) million of operating cash for fiscal years 2024 and 2023, respectively, primarily related to cultural costs, accounts payable/growers and suppliers payable, accrued liabilities/payables to related parties, and other long-term liabilities.

Cash Flows from Investing Activities

▪ The $90.6 million of net cash provided by investing activities during fiscal year 2023 was comprised primarily of net proceeds from sales of assets of $98.5 million, net proceeds from the sale of real estate development assets of $2.6 million, partially offset by capital expenditures of $10.3 million, primarily related to orchard and vineyard development.

▪ The $19.4 million of net cash provided by investing activities during fiscal year 2022 was comprised primarily of net proceeds from sale of assets of $19.3 million, net proceeds from the sale of real estate development assets of $7.9 million, collection on notes receivable of $2.8 million, partially offset by capital expenditures of $10.1 million related to orchard and vineyard development.

▪ The $9.2 million of net cash used in investing activities for fiscal year 2024 was comprised primarily of capital expenditures of $9.4 million related to orchard and vineyard development.

▪ The $90.6 million of net cash provided by investing activities for fiscal year 2023 was comprised primarily of net proceeds from sale of assets of $98.5 million, net proceeds from the sale of real estate development assets of $2.6 million, partially offset by capital expenditures of $10.3 million related to orchard and vineyard development.

Cash Flows from Financing Activities

• The $71.9 million of net cash used in financing activities during fiscal year 2023 was comprised primarily of net repayments of long-term debt $65.0 million and common and preferred stock dividends of $5.9 million.

• The $33.5 million of net cash used in financing activities during fiscal year 2022 was comprised primarily of net repayments of long-term debt of $26.8 million, common and preferred stock dividends of $5.8 million and the exchange of common stock of $1.5 million, partially offset by proceeds from equipment financings of $1.0 million.

• The $9.3 million of net cash used in financing activities for fiscal year 2024 was comprised primarily of common and preferred stock dividends of $5.9 million and exchange of common stock of $2.3 million.

• The $71.9 million of net cash used in financing activities for fiscal year 2023 was comprised primarily of net repayments of long-term debt of $65.0 million and common and preferred stock dividends of $5.9 million.

Transactions Affecting Liquidity and Capital Resources

Credit Facilities and Long-Term Debt

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

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

Additional information regarding these loans can be found in Note 11- Long-Term Debt.

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

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 and COVID-19 loans.

Additional information regarding these loans can be found in Note 11- 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 October 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, 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.

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.

We are also subject to a financial covenant that requires us to maintain compliance with a specific debt service coverage ratio on an annual basis.

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

In fiscal years 2023 and 2022 we received annual patronage dividends of $1.4 million and $1.6 million, respectively, from the Lender.

We are also subject to a financial covenant that requires us to maintain compliance with a specific debt service coverage ratio of 1.25:1.0 on an annual basis.

We were in compliance as of October 31, 2024.

We received annual patronage dividends from the Lender of $0.6 million and $1.4 million for fiscal years 2024 and 2023, respectively.

Real Estate Development Joint Ve nture

On April 30, 2024, our real estate development joint venture with Lewis closed an additional 554 residential homesites at the Harvest at Limoneira master planned community in Santa Paula, CA, and we recorded equity in earnings of investments of $17.8 million for LLCB for fiscal year 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 October 31, 2024, the 50%-owned unconsolidated joint venture had $66.9 million of cash and cash equivalents on hand.

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

Such preferred dividends paid totaled $0.5 million in each of the fiscal years 2024 and 2023.

Cash dividends declared in each of the fiscal years 2023 and 2022 totaled $0.30 per common share and such dividends paid totaled $5.4 million in fiscal year 2023 and $5.3 million in fiscal year 2022.

In fiscal years 2023 and 2022 , we paid income taxes of $7.2 million and $0.1 million , respectively.

Cash dividends declared in each of the fiscal years 2024 and 2023 totaled $0.30 per common share and such dividends paid totaled $5.4 million for both fiscal years 2024 and 2023.

We paid income taxes of $5.2 million and $7.2 million for fiscal years 2024 and 2023, respectively.

Real Estate Development Activities and Related Capital Resources

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We formed LLCB II as the development entity, contributed our Retained Property to the joint venture and sold a 50% interest to Lewis for approximately $8.0 million.

We recorded a gain on the transaction of approximately $4.7 million, of which $0.5 million was deferred.

We recorded a gain on the transaction of approximately $4.7 million, of which $0.5 million was deferred and recognized in fiscal year 2024.

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 projects.

Since inception each partner has made funding contributions of $21.4 million to LLCB and $1.0 million to LLCB II.

We expect to receive approximately $123.0 million from LLCB, LLCB II and East Area II over the next seven years of the projects.

We expect to receive approximately $165.0 million from LLCB, LLCB II and East Area II over the next six years of the projects.

Trend Information

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Over the past several decades, the benefits of natural, preservative-free and organic foods have become an increasingly significant element of the public dialogue on health and nutrition.

As a result, consumption of fresh fruit and vegetables has markedly increased.

Conversely, a decrease in demand, as was seen during the COVID-19 pandemic as a result of restaurant closures, has the impact of reducing our pricing and therefore our revenues and margins.

As a result, consumption of fresh fruits and vegetables markedly increased.

Conversely, a decrease in demand, as was seen during the COVID-19 pandemic as a result of restaurant closures, had the impact of reducing our pricing and therefore our revenues and margins.

Critical Accounting Estimates

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We base our estimates and judgments on historical experience, available relevant data and other information that we believe to be reasonable under the circumstances, and we continue to review and evaluate these estimates.

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

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

For further information on significant accounting policies, see discussion in Note 2 - Summary of Significant Accounting Policies.

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Our evaluation for impairment involves an initial assessment of each real estate development project to determine whether events or changes in circumstances exist that may indicate that the carrying amounts of, or investment in, real estate development projects are no longer recoverable.

Possible indications of impairment may include events or changes in circumstances affecting the entitlement process, zoning, government regulation, geographical demand for new housing or commercial property, and market conditions related to residential or commercial land lots.

When events or changes in circumstances exist, we further evaluate the real estate development projects for impairment by a) comparing undiscounted future cash flows expected to be generated over the life of the real estate development projects to the respective carrying amount for our real estate development or b) determining if our equity in investment has incurred an other-than-temporary decline.

Possible indications of impairment may include events or changes in circumstances affecting the entitlement process, litigation, zoning, government regulation, geographical demand for new housing or commercial property, and market conditions related to residential or commercial land lots.

We make significant judgments in evaluating each real estate development project, as held by us or within our investments in LLCB and LLCB II, for possible indications of impairment.

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Changes in these judgments could have a significant impact on real estate development or equity in investments.

For fiscal years 2023, 2022 and 2021, no impairment loss has been recognized on any real estate development and no other-than-temporary-impairment has been recognized on our equity in LLCB or LLCB II.

No impairment loss has been recognized on any real estate development and no other-than-temporary-impairment has been recognized on our equity in LLCB or LLCB II, for fiscal years 2024, 2023 and 2022.

The impairment calculation for real estate developments held by us compares the carrying value of the asset to the asset’s estimated future cash flows (undiscounted).

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

What changed 10-K

Item 7. Management’s Discussion and Analysis