Limoneira CO 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations Overview Limoneira Company, a Delaware corporation, is the successor to several businesses with operations in California since 1893. We are primarily an agribusiness company founded and based in Santa Paula, California, committed to responsibly using and managing our approximately 10,500 acres of land, water resources and other assets to maximize long-term stockholder value. Our current operations consist of fruit production, sales and marketing, rental operations, real estate and capital investment activities. We are one of California’s oldest citrus growers and according to the California Avocado Commission, we are one of the largest growers of avocados in the United States. In addition to growing lemons and avocados, we grow oranges and wine grapes. We have agricultural plantings throughout Ventura and San Luis Obispo Counties in California, Yuma County in Arizona, La Serena, Chile and Jujuy, Argentina, which collectively consist of approximately 3,100 acres of lemons, 1,400 acres of avocados, 100 acres of oranges and 400 acres of wine grapes. We also operate our own packinghouses in Santa Paula, California and Yuma, Arizona, where we process, pack and sell lemons that we grow, as well as lemons grown by others. We have a 47% interest in Rosales S.A. (“Rosales”), a citrus packing, marketing and sales business, a 90% interest in Fruticola Pan de Azucar S.A. (“PDA”), a lemon and orange orchard and a 100% interest in Agricola San Pablo, SpA (“San Pablo”), a lemon and orange orchard, all of which are located near La Serena, Chile. We have a 51% interest in a joint venture, Trapani Fresh Consorcio de Cooperacion (“Trapani Fresh”), a lemon orchard in Argentina. Our water resources include water rights, usage rights and pumping rights to the water in aquifers under, and canals that run through, the land we own. Water for our farming operations is sourced from the existing water resources associated with our land, which includes rights to water in the adjudicated Santa Paula Basin (aquifer) and the un-adjudicated Fillmore and Paso Robles Basins (aquifers). We also use surface water in Arizona from the Colorado River through the Yuma Mesa Irrigation and Drainage District (“YMIDD”). We use ground water provided by wells and surface water for our PDA and San Pablo farming operations in Chile and our Trapani Fresh farming operations in Argentina. For more than 100 years, we have been making strategic investments in California agriculture and real estate. We currently have an interest in three real estate development projects in California. These projects include multi-family housing, single-family homes and apartments of approximately 800 units in various stages of planning and development. Business Division Summary We have three business divisions: agribusiness, rental operations and real estate development. The agribusiness division is comprised of four reportable operating segments: fresh lemons, lemon packing, avocados and other agribusiness, which primarily includes oranges, specialty citrus, wine grapes and farm management services. The agribusiness division includes our core operations of farming, harvesting, lemon packing and lemon sales operations. The rental operations division includes our residential and commercial rentals, leased land operations and organic recycling. The real estate development division includes our investments in real estate development projects. Generally, we see our Company as a land and farming company that generates annual cash flows to support our progress into diversified real estate development activities. Financial information and discussion of our four reportable segments are contained in the notes to the accompanying consolidated financial statements of this Quarterly Report. Agribusiness Summary We market and sell citrus directly to our food service, wholesale and retail customers throughout the United States, Canada, Asia, and certain other international markets. We sell our avocados and oranges to third-party packinghouses. Additionally, we sell our wine grapes to various wine producers. Historically, our agribusiness division has been seasonal in nature with quarterly revenue fluctuating depending on the timing and variety of crops being harvested. Cultural costs, also referred to as growing costs, in our agribusiness division tend to be higher in the first and second quarters and lower in the third and fourth quarters because of the timing of expensing cultural costs in the current year that were inventoried in the prior year. Our harvest costs generally increase in the second quarter and peak in the third quarter, coinciding with the increase in production and revenue. 27 Fluctuations in price are a function of global supply and demand with weather conditions, such as unusually low temperatures, typically having the most dramatic effect on the amount of lemons supplied in any individual growing season. We believe we have a competitive advantage by maintaining our own lemon packing operations, even though a significant portion of the costs related to these operations are fixed. As a result, cost per carton is a function of fruit throughput. While we regularly monitor our costs for redundancies and opportunities for cost reductions, we also supplement the number of lemons we pack in our packinghouse with additional lemons procured from other growers. Because the fresh utilization rate for our lemons, or percentage of lemons we harvest and pack that are sold to the fresh market, is directly related to the quality of lemons we pack and, consequently, the price we receive per 40-pound box, we only pack lemons from other growers if we determine their lemons are of good quality. Our avocado plantings have been profitable and historically were pursued to diversify our product line. Since fiscal year 2023, we expanded our avocado production by 500 acres, and we plan to expand an additional 500 acres through fiscal year 2027. This 1,000-acre expansion reflects our strategy to capitalize on robust consumer demand trends for avocados. In addition to growing lemons and avocados, we grow oranges and wine grapes. We regularly monitor the demand for the fruit we grow in the current marketplace to identify trends. Rental Operations Summary Our rental operations include our residential and commercial rentals, leased land operations and organic recycling. Our residential rental units generate cash flows that we use to partially fund the operating costs of our business and provide affordable housing to many of our employees, including our agribusiness employees. We believe that this unique employment benefit helps us maintain a dependable, long-term employee base. In addition, our leased land business provides us with a typically profitable diversification. Revenue from rental operations is generally level throughout the year. Real Estate Development Summary We invest in real estate investment projects and recognize that long-term strategies are required for successful real estate development activities. For real estate development projects and joint ventures, it is not unusual for the timing and amounts of revenues and costs, partner contributions and distributions, project loans, other financing assumptions and project cash flows to be impacted by government approvals, project revenue and cost estimates and assumptions, economic conditions, financing sources and product demand as well as other factors. Such factors could affect our results of operations, cash flows and liquidity. Water and Mineral Rights Our water resources include water rights, usage rights and pumping rights to the water in aquifers under, and canals that run through, the land we own. We believe we have adequate supplies of water for our agribusiness segments as well as our rental and real estate development activities. Water for our farming operations located in Ventura County, California is sourced from the existing water resources associated with our land, which includes approximately 8,700 acre-feet of water rights in the adjudicated Santa Paula Basin (aquifer) and additional rights in the un-adjudicated Fillmore Basin (aquifer). Our Windfall Farms property located in San Luis Obispo County, California obtains water from wells that derive water from the Paso Robles Basin (aquifer). Our farming operations in Yuma, Arizona source water from the Colorado River through the YMIDD, where we have access to approximately 11,500 acre-feet of Class 3 Colorado River water rights. We use ground water provided by wells and surface water for our PDA and San Pablo farming operations in La Serena, Chile and our Trapani Fresh farming operations in Argentina. Southern California is experiencing below average precipitation for the 2024 - 2025 rainfall season. As of July 31, 2025, Ventura County was experiencing severe drought conditions. We continue to assess the impact drought conditions may have on our California orchards. In August 2025, the U.S. Bureau of Reclamation announced that Lake Mead will continue to operate in a Tier 1 shortage in 2026, which requires Arizona to forfeit approximately 18% of the state’s yearly allotment of water from Lake Mead. In response to this and prior years’ water shortages, we entered into fallowing agreements during fiscal years 2022 and 2023 and in February 2025, extended an existing fallowing agreement through calendar year 2026. We continue to assess the impact these ongoing water reductions may have on our Arizona orchards. 28 Recent Developments In January 2025, we completed three separate sale transactions of Santa Paula Basin water pumping rights at a selling price of $30,000 per acre-foot, totaling $1.7 million and recorded a gain on sales of water rights of $1.5 million. On March 1, 2025, we received a notice of termination from PGIM Real Estate Finance, LLC (“PGIM”) regarding The Farm Management Agreement (“FMA”) dated January 31, 2023. The FMA was terminated effective March 31, 2025. Under the FMA, we provided farming, management and operations related to the 3,537 acres in Tulare County, California (the “Northern Properties”), which we had previously sold to PGIM. The FMA initially expired on March 31, 2024, and automatically renewed on a yearly basis thereafter, subject to termination with written notice at least thirty days prior to April 1. On March 17, 2025, we announced that our Board of Directors approved a share repurchase program authorizing the Company to repurchase up to $30.0 million shares of our outstanding common stock. The share repurchase program may be modified, suspended or discontinued at any time and does not commit the Company to repurchase any shares. On March 17, 2025, we announced that we formally concluded our process to explore potential strategic alternatives that we previously announced on December 1, 2023. While this formal exploration process has concluded, we remain committed to executing our comprehensive strategic roadmap to create long-term stockholder value. As part of our normal course of business, we will continue to be opportunistic in evaluating potential strategic merger and acquisition opportunities, while also advancing our initiatives to monetize non-core assets. On April 8, 2025, we announced that we are entering into a letter of intent to form a 50%/50% joint venture with Agromin Corporation, the largest organics waste recycler in California, to significantly expand their successful organic waste recycling program. The joint venture plans to expand from the existing 15-acre green waste composting facility at Limoneira Ranch in Santa Paula into a 70-acre, commercial-scale composting facility capable of processing green waste and food waste. We expect to enter into the joint venture and begin construction in fiscal year 2026. On April 9, 2025, we announced that we received $10.0 million as our share of a $20.0 million cash distribution from our real estate joint venture, Harvest at Limoneira, with the Lewis Group of Companies (“Lewis”). On June 6, 2025, we entered into a Commercial Packinghouse License Agreement with Sunkist Growers, Inc., a nonprofit marketing cooperative (“Sunkist”), effective as of November 1, 2025. The agreement permits us to grade, label, pack, prepare for marketing by Sunkist and ship Sunkist grower fruit, and to use Sunkist trademarks in these activities. The agreement has an initial term of three years from November 1, 2025 to October 31, 2028, unless terminated earlier per the provisions of the agreement. On November 1, 2026, and on each anniversary of such date thereafter, the agreement will automatically extend for an additional year unless either party gives written notice on or prior to October 31 of each fiscal year. On June 24, 2025, we declared a cash dividend of $0.075 per common share paid on July 18, 2025, in the aggregate amount of $1.4 million to common stockholders of record as of July 7, 2025. On June 26, 2025, the Company entered into a Master Loan Agreement (the “MLA”) with AgWest Farm Credit, PCA (the “Lender”), dated June 26, 2025, together with a revolving credit facility supplement (the “Revolving Credit Supplement”) and a non-revolving credit facility supplement (the “Non-Revolving Credit Supplement” and together with the Revolving Credit Supplement, the “Supplements”). The MLA amends and restates the previous Master Loan Agreement between the Company and the Lender, dated June 1, 2021, and extends the principal repayment to July 1, 2030. The Company is the General Partner of Limco Del Mar, Ltd. (“Del Mar”), a California partnership that produces lemons and avocados and operates certain real property known as the Limco Del Mar Ranch. To enable the Company to determine the strategy for Del Mar to enhance long term financial returns and to provide liquidity for limited partners, on March 21, 2025, the Company made an offer to purchase up to 224,859 limited partnership units of Del Mar from the limited partners (the “Offer”). On August 4, 2025, the Company closed the Offer and purchased 80,608 limited partnership units from 78 limited partners at a price of $70 per unit for approximately $5.6 million (the “Purchase”). The Purchase increased the Company’s ownership from 28.8% to 54.5%. 29 Results of Operations The following table shows the results of operations (in thousands): Three Months Ended July 31, Nine Months Ended July 31, 2025 2024 2025 2024 Net revenues: Agribusiness $ 45,942 $ 61,849 $ 112,376 $ 143,445 Other operations 1,536 1,456 4,526 4,197 Total net revenues 47,478 63,305 116,902 147,642 Costs and expenses: Agribusiness 42,050 45,437 107,253 124,987 Other operations 1,086 1,250 3,266 3,861 Impairment of intangible asset — 643 — 643 Gain on sales of water rights — — (1,488) — Loss (gain) on disposal of assets, net 15 (12) 27 (129) Selling, general and administrative 4,957 6,994 17,165 21,707 Total costs and expenses 48,108 54,312 126,223 151,069 Operating (loss) income: Agribusiness 3,892 16,412 5,123 18,458 Other operations 450 206 1,260 336 Impairment of intangible asset — (643) — (643) Gain on sales of water rights — — 1,488 — (Loss) gain on disposal of assets, net (15) 12 (27) 129 Selling, general and administrative (4,957) (6,994) (17,165) (21,707) Operating (loss) income (630) 8,993 (9,321) (3,427) Other (expense) income: Interest income 22 27 50 63 Interest expense, net of patronage dividends (410) (273) (898) (831) Equity in earnings of investments, net 274 483 867 17,116 Other income, net 10 5 26 224 Total other (expense) income (104) 242 45 16,572 (Loss) income before income tax (provision) benefit (734) 9,235 (9,276) 13,145 Income tax (provision) benefit (182) (3,019) 1,924 (4,051) Net (loss) income (916) 6,216 (7,352) 9,094 Net loss attributable to noncontrolling interest 61 377 62 481 Net (loss) income attributable to Limoneira Company $ (855) $ 6,593 $ (7,290) $ 9,575 30 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, impairment of intangible asset, loss (gain) on disposal of assets, net 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. generally accepted accounting principles (“GAAP”) and should not be construed as an alternative to reported results determined in accordance with GAAP. The non-GAAP information provided is unique to us and may not be consistent with methodologies used by other companies. EBITDA and adjusted EBITDA are summarized and reconciled to net (loss) income attributable to Limoneira Company which management considers to be the most directly comparable financial measure calculated and presented in accordance with GAAP, as follows (in thousands): Three Months Ended July 31, Nine Months Ended July 31, 2025 2024 2025 2024 Net (loss) income attributable to Limoneira Company $ (855) $ 6,593 $ (7,290) $ 9,575 Interest income (22) (27) (50) (63) Interest expense, net of patronage dividends 410 273 898 831 Income tax provision (benefit) 182 3,019 (1,924) 4,051 Depreciation and amortization 2,482 2,115 6,607 6,273 EBITDA $ 2,197 $ 11,973 $ (1,759) $ 20,667 Stock-based compensation 762 1,204 2,245 3,139 Impairment of intangible asset — 643 — 643 Loss (gain) on disposal of assets, net 15 (12) 27 (129) Severance benefits — (17) — 1,198 Adjusted EBITDA $ 2,974 $ 13,791 $ 513 $ 25,518 Three Months Ended July 31, 2025 Compared to the Three Months Ended July 31, 2024 Revenues Total net revenues were $47.5 million for the three months ended July 31, 2025, compared to $63.3 million for the same period of fiscal year 2024. The 25% decrease of $15.8 million was primarily due to decreased agribusiness revenues from lemons, avocados and farm management as detailed below ($ in thousands): Three Months Ended July 31, 2025 2024 Change Lemons $ 34,186 $ 41,946 $ (7,760) (18)% Avocados 8,488 13,897 (5,409) (39)% Oranges 1,696 1,160 536 46% Specialty citrus and wine grapes 618 550 68 12% Farm management 102 3,202 (3,100) (97)% Other 852 1,094 (242) (22)% Agribusiness revenues $ 45,942 $ 61,849 $ (15,907) (26)% • Lemons: The decrease for the third quarter of fiscal year 2025, compared to the same period of fiscal year 2024, was primarily due to lower prices of fresh and brokered lemons sold and other lemon sales. Fresh packed lemon sales were $23.8 million and $25.8 million, in aggregate, on 1,397,000 and 1,400,000 cartons of lemons sold at average per carton prices of $17.02 and $18.43, for the third quarter of fiscal years 2025 and 2024, respectively. Lemon revenues included brokered lemons and other lemon sales of $3.8 million and $9.8 million, lemon packing of $6.1 million and $5.2 million and lemon by-product sales of $0.5 million and $1.2 million, for the third quarter of fiscal years 2025 and 2024, respectively. 31 • Avocados: The decrease for the third quarter of fiscal year 2025, compared to the same period of fiscal year 2024, was primarily due to decreased volume and lower prices of avocados sold. The California avocado crop typically experiences alternating years of high and low production due to plant physiology. We sold 5,654,000 and 8,855,000 pounds of avocados at average per pound prices of $1.50 and $1.57, for the third quarter of fiscal years 2025 and 2024, respectively. • Oranges: The increase for the third quarter of fiscal year 2025, compared to the same period of fiscal year 2024, was primarily due to increased volume, partially offset by lower prices of oranges sold. We sold 94,000 and 43,000 cartons of oranges at average per carton prices of $18.00 and $26.98, for the third quarter of fiscal years 2025 and 2024, respectively. • Specialty citrus and wine grapes: The increase for the third quarter of fiscal year 2025, compared to the same period of fiscal year 2024, was primarily due to higher prices, partially offset by decreased volume of specialty citrus sold. We sold 17,000 and 25,000 40-pound carton equivalents of specialty citrus at average per carton prices of $36.01 and $22.00, for the third quarter of fiscal years 2025 and 2024, respectively. • Farm management: Farm management revenue, comprised primarily of Northern Properties farming, management and operations services, decreased for the third quarter of fiscal year 2025, compared to the same period of fiscal year 2024, due to the FMA termination effective March 31, 2025. • Other: Other revenue, comprised primarily of fallowing and shipping, decreased for the third quarter of fiscal year 2025, compared to the same period of fiscal year 2024, primarily due to decreased shipping revenue. • Other operations revenue was $1.5 million for the third quarter of fiscal years 2025 and 2024. Costs and Expenses Total costs and expenses were $48.1 million for the three months ended July 31, 2025, compared to $54.3 million for the same period of fiscal year 2024. The 11% decrease of $6.2 million was primarily due to a decrease in agribusiness costs and expenses, a decrease in selling, general and administrative expenses and the 2024 impairment of intangible asset. Agribusiness costs and expenses are detailed below ($ in thousands): Three Months Ended July 31, 2025 2024 Change Packing costs $ 12,724 $ 11,144 $ 1,580 14% Harvest costs 3,910 4,330 (420) (10)% Growing costs 4,056 7,650 (3,594) (47)% Third-party grower and supplier costs 18,670 19,860 (1,190) (6)% Other costs 448 654 (206) (31)% Depreciation and amortization 2,242 1,799 443 25% Agribusiness costs and expenses $ 42,050 $ 45,437 $ (3,387) (7)% • Packing costs: 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. We packed and sold 1,397,000 and 1,400,000 cartons of lemons at average per carton costs of $9.11 and $7.96, for the third quarter of fiscal years 2025 and 2024, respectively. The increase in per carton packing costs was primarily due to higher labor costs. • Harvest costs: The decrease for the third quarter of fiscal year 2025, compared to the same period of fiscal year 2024, was primarily due to decreased 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 for the third quarter of fiscal year 2025, compared to the same period of fiscal year 2024, was primarily due to the decrease in farm management growing costs related to the FMA termination and farm management decisions made in response to weather, harvest timing and crop conditions. 32 • Third-party grower and supplier costs: We sell fruit that we grow and fruit that we procure from other growers and suppliers. The cost of procuring fruit from other growers and suppliers is referred to as third-party grower and supplier costs. The decrease for the third quarter of fiscal year 2025, compared to the same period of fiscal year 2024, was primarily due to decreased costs for brokered fruit, partially offset by increased costs of third-party grower fruit. We incurred costs for brokered fruit of $7.2 million and $9.4 million, for the third quarter of fiscal years 2025 and 2024, respectively. Additionally, we incurred costs for third-party grower fruit of $11.5 million and $10.5 million, for the third quarter of fiscal years 2025 and 2024, respectively. Of the 1,397,000 and 1,400,000 cartons of lemons packed and sold, 1,012,000 (72%) and 869,000 (62%) were procured from third-party growers at average per carton prices of $11.35 and $12.06, for the third quarter of fiscal years 2025 and 2024, respectively. • Other costs: The decrease in the third quarter of fiscal year 2025, compared to the same period of fiscal year 2024, was due to decreased freight costs. • Depreciation and amortization: Depreciation and amortization was $2.2 million in the third quarter of fiscal year 2025, compared to $1.8 million in the same period of fiscal year 2024. Other operations expenses were $1.1 million for the third quarter of fiscal year 2025, compared to $1.3 million for the same period of fiscal year 2024. Impairment of intangible asset was $0.6 million for the third quarter of fiscal year 2024. There was no impairment of intangible asset for the third quarter of fiscal year 2025. Selling, general and administrative costs and expenses were $5.0 million for the third quarter of fiscal year 2025, compared to $7.0 million for the same period of fiscal year 2024. The 29% decrease of $2.0 million was primarily due to: • $2.2 million net decrease in salaries, benefits and incentive compensation; • $0.5 million net decrease in selling expenses; and • $0.7 million net increase in other general and administrative expenses. Other (Expense) Income Total other (expense) income was $(0.1) million for the third quarter of fiscal year 2025, compared to $0.2 million for the same period of fiscal year 2024. The decrease of $0.3 million was primarily due to: • $0.2 million decrease of equity in earnings of investments, net; and • $0.1 million increase of interest expense, net of patronage dividends. Income Taxes We recorded an estimated income tax provision expense of $0.2 million and $3.0 million on pre-tax (loss) income of $(0.7) million and $9.2 million, for the third quarter of fiscal years 2025 and 2024, respectively. The tax provision recorded for the third quarter of fiscal year 2025 differs from the U.S. 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 projected annual effective blended tax rate for fiscal year 2025, excluding discrete items, is approximately 23.2%. Net Loss Attributable to Noncontrolling Interest Net loss attributable to noncontrolling interest reflects 10% of PDA’s net loss and 49% of Trapani Fresh’s net loss for the third quarter of fiscal years 2025 and 2024, respectively. 33 Nine Months Ended July 31, 2025 Compared to the Nine Months Ended July 31, 2024 Revenues Total net revenues were $116.9 million for the nine months ended July 31, 2025, compared to $147.6 million for the same period of fiscal year 2024. The 21% decrease of $30.7 million was primarily due to decreased agribusiness revenues from lemons, avocados and farm management, partially offset by increased agribusiness revenues from oranges, as detailed below ($ in thousands): Nine Months Ended July 31, 2025 2024 Change Lemons $ 89,751 $ 110,727 $ (20,976) (19)% Avocados 11,430 16,245 (4,815) (30)% Oranges 4,838 3,461 1,377 40% Specialty citrus and wine grapes 1,792 2,475 (683) (28)% Farm management 1,622 7,296 (5,674) (78)% Other 2,943 3,241 (298) (9)% Agribusiness revenues $ 112,376 $ 143,445 $ (31,069) (22)% • Lemons: The decrease for the first nine months of fiscal year 2025, compared to the same period of fiscal year 2024, was primarily due to lower prices and decreased volume of fresh and brokered lemons sold and other lemon sales. Fresh packed lemon sales were $64.6 million and $75.6 million, in aggregate, on 3,901,000 and 3,983,000 cartons of lemons sold at average per carton prices of $16.57 and $18.98, for the first nine months of fiscal years 2025 and 2024, respectively. Lemon revenues included brokered lemons and other lemon sales of $8.5 million and $16.5 million, lemon packing of $15.3 million and $15.8 million and lemon by-product sales of $1.4 million and $2.9 million, for the first nine months of fiscal years 2025 and 2024, respectively. • Avocados: The decrease for the first nine months of fiscal year 2025, compared to the same period of fiscal year 2024, was primarily due to decreased volume, partially offset by higher prices of avocados sold. The California avocado crop typically experiences alternating years of high and low production due to plant physiology. We sold 6,959,000 and 10,450,000 pounds of avocados at average per pound prices of $1.64 and $1.55, for the first nine months of fiscal years 2025 and 2024, respectively. • Oranges: The increase for the first nine months of fiscal year 2025, compared to the same period of fiscal year 2024, was primarily due to increased volume and higher prices of oranges sold. We sold 261,000 and 189,000 cartons of oranges at average per carton prices of $18.50 and $18.31, for the first nine months of fiscal years 2025 and 2024, respectively. • Specialty citrus and wine grapes: The decrease for the first nine months of fiscal year 2025, compared to the same period of fiscal year 2024, was primarily due to a decrease in wine grape revenues. Due to harvest timing, no wine grape revenue was recorded for the first nine months of fiscal year 2025, compared to $0.6 million for the first nine months of fiscal year 2024. • Farm management: Farm management revenue, comprised primarily of Northern Properties farming, management and operations services, decreased for the first nine months of fiscal year 2025, compared to the same period of fiscal year 2024, primarily due to the FMA termination effective March 31, 2025. • Other: Other revenue, comprised primarily of fallowing and shipping, decreased for the first nine months of fiscal year 2025, compared to the same period of fiscal year 2024, primarily due to decreased shipping revenue. Other operations revenue was $4.5 million for the first nine months of fiscal year 2025, compared to $4.2 million for the same period of fiscal year 2024. The 7% increase of $0.3 million was primarily due to increased rental operations revenue. 34 Costs and Expenses Total costs and expenses were $126.2 million for the first nine months of fiscal year 2025, compared to $151.1 million for the same period of fiscal year 2024. The 16% decrease of $24.9 million was primarily due to decreases in agribusiness costs and expenses, decreases in selling, general and administrative expenses and gains on sales of water rights. Agribusiness costs and expenses are detailed below ($ in thousands): Nine Months Ended July 31, 2025 2024 Change Packing costs $ 35,441 $ 35,450 $ (9) —% Harvest costs 7,088 9,141 (2,053) (22)% Growing costs 11,684 19,304 (7,620) (39)% Third-party grower and supplier costs 45,460 53,522 (8,062) (15)% Other costs 1,698 2,239 (541) (24)% Depreciation and amortization 5,882 5,331 551 10% Agribusiness costs and expenses $ 107,253 $ 124,987 $ (17,734) (14)% • Packing costs: 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. We packed and sold 3,901,000 and 3,983,000 cartons of lemons at average per carton costs of $9.09 and $8.90, for the first nine months of fiscal years 2025 and 2024, respectively. The increase in per carton packing costs was primarily due to higher labor costs. • Harvest costs: The decrease for the first nine months of fiscal year 2025, compared to the same period of fiscal year 2024, was primarily due to decreased volume of lemons and 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 for the first nine months of fiscal year 2025, compared to the same period of fiscal year 2024, was primarily due to the decrease in farm management growing costs related to the FMA termination and farm management decisions made in response to weather, harvest timing and crop conditions. • Third-party grower and supplier costs: We sell fruit that we grow and fruit that we procure from other growers and suppliers. The cost of procuring fruit from other growers and suppliers is referred to as third-party grower and supplier costs. The decrease for the first nine months of fiscal year 2025, compared to the same period of fiscal year 2024, was primarily due to lower prices of third-party grower fruit sold and decreased costs of brokered fruit. We incurred costs for third-party grower fruit of $33.3 million and $37.6 million, for the first nine months of fiscal years 2025 and 2024, respectively. Of the 3,901,000 and 3,983,000 cartons of lemons packed and sold, 3,215,000 (82%) and 2,921,000 (73%) were procured from third-party growers at average per carton prices of $10.36 and $12.89, for the first nine months of fiscal years 2025 and 2024, respectively. Additionally, we incurred $12.2 million and $15.9 million of costs for brokered fruit, for the first nine months of fiscal years 2025 and 2024, respectively. • Other costs: The decrease for the first nine months of fiscal year 2025, compared to the same period of fiscal year 2024, was due to decreased freight costs. • Depreciation and amortization: Depreciation and amortization was $5.9 million for the first nine months of fiscal year 2025, compared to $5.3 million in the same period of fiscal year 2024. Other operations expenses were $3.3 million for the first nine months of fiscal year 2025, compared to $3.9 million for the same period of fiscal year 2024. The 15% decrease of $0.6 million was primarily due to severance benefits in fiscal year 2024. Impairment of intangible asset was $0.6 million for the first nine months of fiscal year 2024. There was no impairment of intangible asset for the first nine months of fiscal year 2025. Gain on sales of water rights was $1.5 million for the first nine months of fiscal year 2025. There were no sales of water rights for the same period of fiscal year 2024. 35 Selling, general and administrative costs and expenses were $17.2 million for the first nine months of fiscal year 2025, compared to $21.7 million for the same period of fiscal year 2024. The 21% decrease of $4.5 million was primarily due to: • $4.9 million net decrease in salaries, benefits and incentive compensation; • $0.3 million net decrease in selling expenses; and • $0.7 million net increase in other general and administrative expenses. Other Income Total other income was immaterial for the first nine months of fiscal year 2025, compared to $16.6 million for the same period of fiscal year 2024. The decrease of $16.6 million was primarily due to: • $16.3 million decrease of equity in earnings of investments, net, primarily due to LLCB’s closing of 554 residential homesites in the first nine months of fiscal year 2024; • $0.2 million decrease of other income, net; and • $0.1 million increase of interest expense, net of patronage dividends. Income Taxes We recorded an estimated income tax benefit (provision) of $1.9 million and $(4.1) million on pre-tax (loss) income of $(9.3) million and $13.1 million, for the first nine months of fiscal years 2025 and 2024, respectively. The tax benefit recorded for the first nine months of fiscal year 2025 differs from the U.S. 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 projected annual effective blended tax rate for fiscal year 2025, excluding discrete items, is approximately 23.2%. Net Loss Attributable to Noncontrolling Interest Net loss attributable to noncontrolling interest reflects 10% of PDA’s net income/loss and 49% of Trapani Fresh’s net loss for the first nine months of fiscal years 2025 and 2024, respectively. Segment Results of Operations We operate in four reportable operating segments: fresh lemons, lemon packing, avocados and other agribusiness. Our reportable operating segments are strategic business units with different products and services, distribution processes and customer bases. We evaluate the performance of our operating segments separately to monitor the different factors affecting financial results. Each segment is subject to review and evaluations related to current market conditions, market opportunities and available resources. See Note 17 - Segment Information for additional information regarding our operating segments. 36 Three Months Ended July 31, 2025 Compared to the Three Months Ended July 31, 2024 The following table shows the segment results of operations for the three months ended July 31, 2025 (in thousands): Fresh Lemons Lemon Packing Eliminations Avocados Other Agribusiness Total Agribusiness Corporate and Other Total Revenues from external customers $ 28,123 $ 6,063 $ — $ 8,488 $ 3,268 $ 45,942 $ 1,536 $ 47,478 Intersegment revenues — 8,493 (8,493) — — — — — Total net revenues 28,123 14,556 (8,493) 8,488 3,268 45,942 1,536 47,478 Costs and expenses 29,298 12,724 (8,493) 3,733 2,546 39,808 5,818 45,626 Depreciation and amortization — — — — — 2,242 240 2,482 Operating (loss) income $ (1,175) $ 1,832 $ — $ 4,755 $ 722 $ 3,892 $ (4,522) $ (630) The following table shows the segment results of operations for the three months ended July 31, 2024 (in thousands): Fresh Lemons Lemon Packing Eliminations Avocados Other Agribusiness Total Agribusiness Corporate and Other Total Revenues from external customers $ 36,746 $ 5,200 $ — $ 13,897 $ 6,006 $ 61,849 $ 1,456 $ 63,305 Intersegment revenues — 10,499 (10,499) — — — — — Total net revenues 36,746 15,699 (10,499) 13,897 6,006 61,849 1,456 63,305 Costs and expenses 32,977 11,144 (10,499) 4,104 5,912 43,638 8,559 52,197 Depreciation and amortization — — — — — 1,799 316 2,115 Operating income (loss) $ 3,769 $ 4,555 $ — $ 9,793 $ 94 $ 16,412 $ (7,419) $ 8,993 The following analysis should be read in conjunction with the previous section “Results of Operations.” Fresh Lemons Fresh lemons segment revenue is comprised of sales of fresh lemons, lemon by-products, brokered lemons and other lemon revenue. Our fresh lemons segment total net revenues were $28.1 million for the third quarter of fiscal year 2025, compared to $36.7 million for the same period of fiscal year 2024. The 23% decrease of $8.6 million was primarily due to: • Brokered lemons and other lemon sales decrease of $5.9 million; • Fresh packed lemon sales decrease of $2.0 million; and • Lemon by-products sales decrease of $0.7 million. Costs and expenses associated with our fresh lemons segment include growing costs, harvest costs and cost of lemons we procure from third-party growers and suppliers. Our fresh lemons segment costs and expenses were $29.3 million for the third quarter of fiscal year 2025, compared to $33.0 million for the same period of fiscal year 2024. The 11% decrease of $3.7 million was primarily due to: • Third-party grower and supplier costs decrease of $1.4 million; • Intersegment costs and expenses decrease of $2.0 million; • Growing costs decrease of $0.6 million; and • Harvest costs increase of $0.3 million. Lemon Packing Lemon packing segment revenue is comprised of packing revenue and intersegment packing revenue. Our lemon packing segment total net revenues were $14.6 million for the third quarter of fiscal year 2025, compared to $15.7 million for the same period of fiscal year 2024. The 7% decrease of $1.1 million was due to intersegment packing revenue. 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. Our lemon packing costs and expenses were $12.7 million for the third quarter of fiscal year 2025, compared to $11.1 million for the same period of fiscal year 2024. The 14% increase of $1.6 million was primarily due to increased labor costs. Lemon packing segment operating income per carton sold was $1.31 for the third quarter of fiscal year 2025, compared to $3.25 for the same period of fiscal year 2024. 37 The lemon packing segment included $8.5 million of intersegment revenues for the third quarter of fiscal year 2025, compared to $10.5 million for the same period of fiscal year 2024, 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. Avocados Our avocados segment had revenues of $8.5 million for the third quarter of fiscal year 2025, compared to $13.9 million for the same period of fiscal year 2024. Costs and expenses associated with our avocados segment include growing and harvest costs. Our avocados segment costs and expenses were $3.7 million for the third quarter of fiscal year 2025, compared to $4.1 million for the same period of fiscal year 2024. The decrease of $0.4 million was primarily due to: • Harvest costs decrease of $0.7 million; and • Growing costs increase of $0.3 million. Other Agribusiness Our other agribusiness segment total net revenues were $3.3 million for the third quarter of fiscal year 2025, compared to $6.0 million for the same period of fiscal year 2024. The 46% decrease of $2.7 million was primarily due to: • Farm management revenues decrease of $3.1 million; • Other revenues decrease of $0.2 million; • Orange revenues increase of $0.5 million; and • Specialty citrus revenues increase of $0.1 million. Costs and expenses associated with our other agribusiness segment include growing costs, harvest costs, brokered fruit costs and shipping costs. Our other agribusiness costs and expenses were $2.5 million for the third quarter of fiscal year 2025, compared to $5.9 million for the same period of fiscal year 2024. The 57% decrease of $3.4 million was primarily due to: • Growing costs decrease of $3.4 million; • Shipping costs decrease of $0.2 million; and • Brokered fruit costs increase of $0.2 million. Total agribusiness depreciation and amortization expenses were $2.2 million for the third quarter of fiscal year 2025, compared to $1.8 million for the same period of fiscal year 2024. Corporate and Other Our corporate and other operations revenues were $1.5 million for the third quarter of fiscal years 2025 and 2024. Costs and expenses in our corporate and other operations primarily includes selling, general and administrative costs and expenses, impairment of intangible asset and disposal of assets, net, not allocated to the operating segments. Costs and expenses in our corporate and other operations were $5.8 million for the third quarter of fiscal year 2025, compared to $8.6 million for the same period of fiscal year 2024. Depreciation and amortization expenses in our corporate and other operations were $0.2 million for the third quarter of fiscal year 2025, compared to $0.3 million for the same period of fiscal year 2024. 38 Nine Months Ended July 31, 2025 Compared to the Nine Months Ended July 31, 2024 The following table shows the segment results of operations for the nine months ended July 31, 2025 (in thousands): Fresh Lemons Lemon Packing Eliminations Avocados Other Agribusiness Total Agribusiness Corporate and Other Total Revenues from external customers $ 74,491 $ 15,260 $ — $ 11,430 $ 11,195 $ 112,376 $ 4,526 $ 116,902 Intersegment revenues — 24,959 (24,959) — — — — — Total net revenues 74,491 40,219 (24,959) 11,430 11,195 112,376 4,526 116,902 Costs and expenses 76,006 35,441 (24,959) 5,393 9,490 101,371 18,245 119,616 Depreciation and amortization — — — — — 5,882 725 6,607 Operating (loss) income $ (1,515) $ 4,778 $ — $ 6,037 $ 1,705 $ 5,123 $ (14,444) $ (9,321) The following table shows the segment results of operations for the nine months ended July 31, 2024 (in thousands): Fresh Lemons Lemon Packing Eliminations Avocados Other Agribusiness Total Agribusiness Corporate and Other Total Revenues from external customers $ 94,971 $ 15,756 $ — $ 16,245 $ 16,473 $ 143,445 $ 4,197 $ 147,642 Intersegment revenues — 28,129 (28,129) — — — — — Total net revenues 94,971 43,885 (28,129) 16,245 16,473 143,445 4,197 147,642 Costs and expenses 90,687 35,450 (28,129) 5,529 16,119 119,656 25,140 144,796 Depreciation and amortization — — — — — 5,331 942 6,273 Operating (loss) income $ 4,284 $ 8,435 $ — $ 10,716 $ 354 $ 18,458 $ (21,885) $ (3,427) The following analysis should be read in conjunction with the previous section “Results of Operations.” Fresh Lemons Fresh lemons segment revenue is comprised of sales of fresh lemons, lemon by-products, brokered lemons and other lemon revenue. Our fresh lemons segment total net revenues were $74.5 million for the first nine months of fiscal year 2025, compared to $95.0 million for the same period of fiscal year 2024. The 22% decrease of $20.5 million was primarily due to: • Fresh packed lemon sales decrease of $11.0 million; • Brokered lemons and other lemon sales decrease of $8.1 million; and • Lemon by-products sales decrease of $1.4 million. Costs and expenses associated with our fresh lemons segment include growing costs, harvest costs and cost of lemons we procure from third-party growers and suppliers. Our fresh lemons segment costs and expenses were $76.0 million for the first nine months of fiscal year 2025, compared to $90.7 million for the same period of fiscal year 2024. The 16% decrease of $14.7 million was primarily due to: • Third-party grower and supplier costs decrease of $8.8 million; • Intersegment costs and expenses decrease of $3.2 million; • Growing costs decrease of $1.6 million; and • Harvest costs decrease of $1.1 million. Lemon Packing Lemon packing segment revenue is comprised of packing revenue and intersegment packing revenue. Our lemon packing segment total net revenues were $40.2 million for the first nine months of fiscal year 2025, compared to $43.9 million for the same period of fiscal year 2024. The 8% decrease of $3.7 million was due to intersegment packing revenue. 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 and facility operating costs. Our lemon packing costs and expenses were $35.4 million for the first nine months of fiscal year 2025, compared to $35.5 million for the same period of fiscal year 2024. Lemon packing segment operating income per carton sold was $1.23 for the first nine months of fiscal year 2025, compared to $2.12 for the same period of fiscal year 2024. 39 The lemon packing segment included $25.0 million of intersegment revenue for the first nine months of fiscal year 2025, compared to $28.1 million for the same period of fiscal year 2024, 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. Avocados Our avocados segment revenues were $11.4 million for the first nine months of fiscal year 2025, compared to $16.2 million for the same period of fiscal year 2024. Costs and expenses associated with our avocados segment include growing and harvest costs. Our avocados segment costs and expenses were $5.4 million for the first nine months of fiscal year 2025, compared to $5.5 million for the same period of fiscal year 2024. The 2% decrease of $0.1 million was primarily due to: • Harvest costs decrease of $0.8 million; and • Growing costs increase of $0.7 million. Other Agribusiness Our other agribusiness segment total net revenues were $11.2 million for the first nine months of fiscal year 2025, compared to $16.5 million for the same period of fiscal year 2024. The 32% decrease of $5.3 million was primarily due to: • Farm management revenues decrease of $5.7 million; • Specialty citrus and wine grape revenues decrease of $0.7 million; • Other revenues decrease of $0.3 million; and • Orange revenues increase of $1.4 million. Costs and expenses associated with our other agribusiness segment include growing costs, harvest costs, brokered fruit costs and shipping costs. Our other agribusiness costs and expenses were $9.5 million for the first nine months of fiscal year 2025, compared to $16.1 million for the same period of fiscal year 2024. The 41% decrease of $6.6 million was primarily due to: • Growing costs decrease of $6.6 million; • Shipping costs decrease of $0.5 million; • Harvest costs decrease of $0.2 million; and • Brokered fruit costs increase of $0.7 million. Total agribusiness depreciation and amortization expenses were $5.9 million for the first nine months of fiscal year 2025, compared to $5.3 million for the same period of fiscal year 2024. Corporate and Other Our corporate and other operations revenues were $4.5 million for the first nine months of fiscal year 2025, compared to $4.2 million for the same period of fiscal year 2024. Costs and expenses in our corporate and other operations primarily includes selling, general and administrative costs and expenses, impairment of intangible asset, sales of water rights and disposal of assets, net, none of which are allocated to the operating segments. Costs and expenses in our corporate and other operations were $18.2 million for the first nine months of fiscal year 2025, compared to $25.1 million for the same period of fiscal year 2024. Depreciation and amortization expenses in our corporate and other operations were $0.7 million for the first nine months of fiscal year 2025, compared to $0.9 million for the same period of fiscal year 2024. Seasonal Operations Historically, our agribusiness operations have been seasonal in nature with quarterly revenue fluctuating depending on the timing and the variety of crops being harvested. Cultural costs in our agribusiness tend to be higher for the first and second quarters and lower for the third and fourth quarters because of the timing of expensing cultural costs for the current year that were inventoried for the prior year. Our harvest costs generally increase for the second quarter and peak for the third quarter coinciding with the increase in production and revenue. 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. 40 Results of Operations for the Trailing Twelve Months Ended July 31, 2025 and 2024 The following table shows the unaudited results of operations (in thousands): Trailing Twelve Months Ended July 31, 2025 2024 Net revenues: Agribusiness $ 154,854 $ 183,530 Other operations 5,909 5,544 Total net revenues 160,763 189,074 Costs and expenses: Agribusiness 147,073 167,881 Other operations 4,679 5,192 Impairment of intangible asset — 643 Gain on sales of water rights (1,488) — (Gain) loss on disposal of assets (351) 221 Selling, general and administrative 22,922 28,255 Total costs and expenses 172,835 202,192 Operating loss (12,072) (13,118) Other income (expense): Interest income 105 179 Interest expense, net of patronage dividends (1,028) (908) Equity in earnings of investments, net 2,107 21,924 Other income, net 14 240 Total other income 1,198 21,435 (Loss) income before income tax benefit (provision) (10,874) 8,317 Income tax benefit (provision) 1,602 (2,761) Net (loss) income (9,272) 5,556 Loss attributable to noncontrolling interest 123 563 Net (loss) income attributable to Limoneira Company $ (9,149) $ 6,119 The following analysis should be read in conjunction with the previous section “Results of Operations.” • Total revenues decreased $28.3 million, primarily due to decreased lemon, specialty citrus and wine grapes, and farm management revenue, partially offset by increased avocado revenue. • Total costs and expenses decreased $29.4 million, primarily due to decreased agribusiness costs and selling, general and administrative expenses. • Total other income decreased $20.2 million, primarily due to decreased equity in earnings of investments, net related to LLCB. • Income tax benefit increased $4.4 million due to increased pre-tax loss of $19.2 million and the effects of estimated interim tax provisions. 41 Liquidity and Capital Resources Overview 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. Typically, our first and last fiscal quarters coincide with the fall and winter months during which we are growing crops that are harvested and sold in the spring and summer, which are our second and third quarters. To meet working capital demand and investment requirements of our agribusiness and real estate development projects and to supplement operating cash flows, we utilize our revolving credit facility to fund agricultural inputs and farm management practices until sufficient returns from crops allow us to repay amounts borrowed. Raw materials needed to propagate the various crops grown by us consist primarily of fertilizer, herbicides, insecticides, fuel and water, all of which are readily available from local sources. Material contractual obligations arising in the normal course of business consist primarily of purchase obligations, long-term variable rate debt and related interest payments and operating and finance leases. See Note 10 - Long-Term Debt and Note 11 - Leases for amounts outstanding as of July 31, 2025 related to debt and leases. 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 12 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 $(7.0) million and $11.3 million for the nine months ended July 31, 2025 and 2024, respectively. The significant components of our cash flows (used in) provided by operating activities were as follows: • Net (loss) income was $(7.4) million and $9.1 million for the nine months ended July 31, 2025 and 2024, respectively. The components of net loss for the nine months ended July 31, 2025, compared to net income for the same period of fiscal year 2024, consists of a decrease in total other income of $16.5 million, primarily related to LLCB equity earnings, an increase in operating loss of $5.9 million and an increase in income tax benefit of $6.0 million. • Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: ◦ Adjustments were $16.1 million and $13.2 million for the nine months ended July 31, 2025 and 2024, respectively, primarily related to gain on sales of water rights, stock compensation expense, equity in earnings of investments, net, cash distributions from equity investments and deferred income taxes. ◦ Changes in operating assets and liabilities used $15.7 million and $11.1 million of operating cash for the nine months ended July 31, 2025 and 2024, respectively, primarily related to accounts receivables and receivables/other from related parties, prepaid and other current assets, accounts payable and growers and suppliers payable, accrued liabilities and payables to related parties and other long-term liabilities. Cash Flows from Investing Activities Net cash used in investing activities was $9.9 million and $6.7 million for the nine months ended July 31, 2025 and 2024, respectively. ▪ The $9.9 million of cash used in investing activities for the nine months ended July 31, 2025 was comprised primarily of capital expenditures of $9.6 million, mainly related to orchard and vineyard development, and equity investment contributions and capitalized interest of $2.3 million, partially offset by proceeds from sales of water rights of $1.7 million. ▪ The $6.7 million of cash used in investing activities for the nine months ended July 31, 2024 was comprised primarily of capital expenditures of $6.7 million, related to orchard and vineyard development. 42 Cash Flows from Financing Activities Net cash provided by (used in) financing activities was $15.9 million and $(7.1) million for the nine months ended July 31, 2025 and 2024, respectively. • The $15.9 million of cash provided by financing activities for the nine months ended July 31, 2025 was comprised primarily of net borrowings of long-term debt of $22.8 million, partially offset by common and preferred dividends of $4.4 million and the exchange of common stock of $1.6 million. • The $7.1 million of cash used in financing activities for the nine months ended July 31, 2024 was comprised primarily of common and preferred dividends of $4.4 million and the exchange of common stock of $1.8 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, distributions from equity investments and from our Lender, which includes the MLA and Supplements with principal repayment due July 1, 2030. The MLA governs the terms of the Supplements. 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 $114.0 million under the Revolving Credit Supplement and $1.0 million under the Non-Revolving Credit Supplement which can be used solely to support calls on Letters of Credit. As of July 31, 2025, our outstanding borrowings under the Revolving Credit Supplement were $63.3 million and we had $50.7 million of availability. 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 subject to an annual financial covenant that requires us to maintain compliance with a specific debt service coverage ratio of 1.0:1.0 for the fiscal year ending October 31, 2025, and 1.25:1.0 for any fiscal year ending thereafter. In September 2025, the Lender modified the debt service coverage ratio covenant to defer measurement as of October 31, 2025 and resume a debt service coverage ratio of 1.25:1.0 measured as of October 31, 2026. We are also subject to a quarterly financial covenant that requires us to maintain compliance with a specific total net leverage ratio as of the end of any fiscal quarter beginning July 31, 2026, with a ratio of no more than 6.0:1.0 for the fiscal quarter ending July 31, 2026, 5.0:1.0 for the fiscal quarter ending October 31, 2026 and 4.5:1.0 for any fiscal quarter ending thereafter. We were in compliance with the covenants as of October 31, 2024. In fiscal years 2025 and 2024, the Lender declared an annual cash patronage dividend and we received $0.6 million in the nine months ended July 31, 2025 and 2024. Real Estate Development Joint Ve nture On April 9, 2025, we received a cash distribution of $10.0 million representing our share of a $20.0 million distribution from our joint venture, Harvest at Limoneira. As of July 31, 2025, the 50%-owned unconsolidated joint venture had $36.4 million of cash and cash equivalents on hand. Dividends 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 $0.4 million for the nine months ended July 31, 2025 and 2024. Cash dividends declared for the nine months ended July 31, 2025 and 2024 were $0.225 per common share. Such dividends paid were $4.1 million for the nine months ended July 31, 2025 and 2024. 43 Critical Accounting Estimates The preparation of our consolidated financial statements in accordance with GAAP requires us to develop critical accounting policies and make certain estimates, assumptions and judgments that may affect the reported amounts of assets, liabilities, revenues and expenses. 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 becomes available in future periods. As of July 31, 2025, our critical accounting policies and estimates have not changed since the filing of our Annual Report on Form 10-K for the fiscal year ended October 31, 2024, as filed with the SEC on December 23, 2024. Please refer to that filing for a description of our critical accounting policies and estimates. Recent Accounting Pronouncements See Note 2 - Summary of Significant Accounting Policies of the notes to consolidated financial statements included in this Quarterly Report for information concerning recent accounting pronouncements. Item 3. Quantitative and Qualitative Disclosures about Market Risk There have been no material changes in the disclosures discussed in the section entitled “Quantitative and Qualitative Disclosures about Market Risk” in Part II, Item 7A of our Annual Report on Form 10-K for the fiscal year ended October 31, 2024, as filed with the SEC on December 23, 2024.