UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 FOR THE QUARTERLY PERIOD ENDED JULYFor The Quarterly Period Ended July 31, 20222023
OR
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
For The Transition Period From              To             
Commission File Number: 001-34755001-34755
LIMONEIRA COMPANY
(Exact name of registrant as specified in its charter)
Delaware77-0260692
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)Number)
1141 Cummings Road,
Santa Paula,, CA93060
(Address of principal executive offices)(Zipoffices and zip code)

Registrant’s telephone number, including area code: (805) 525-5541
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Classeach classTrading SymbolsymbolName of Each Exchange of Which Registeredeach exchange on which registered
Common Stock, $0.01 par value $0.01LMNR
The NASDAQ Stock Market LLC (NASDAQ
(NASDAQ Global Select Market)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ YesNo ☐  No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ YesNo ☐ No 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,”company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:  Act:
☐Large accelerated filer☒ ☐Accelerated filer ☒Non-accelerated filer ☐Emerging growth Smaller reporting
company
☐Non-accelerated filerEmerging growth
company ☐		Smaller reporting company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ YesNo ☒  No

As of August 31, 2022,2023, there were 17,721,55117,978,910 shares outstanding of the registrant’s common stock.


LIMONEIRA COMPANY
TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION
4
  
Item 1.Financial Statements (Unaudited)
4
   
Consolidated Balance Sheets – July 31, 20222023 and October 31, 20212022
4
  
Consolidated Statements of Operations – three and nine months ended July 31, 20222023 and 20212022
5
  
Consolidated Statements of Comprehensive (Loss) Income – three and nine months ended July 31, 20222023 and 20212022
6
  
Consolidated Statements of Stockholders' Equity and Temporary Equity – three and nine months ended July 31, 20222023 and 20212022
7
Consolidated Statements of Cash Flows – nine months ended July 31, 20222023 and 20212022
9
  
Notes to Consolidated Financial Statements
11
  
Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations
2627
   
Item 3.Quantitative and Qualitative Disclosures about Market Risk
44
   
Item 4.Controls and Procedures
44
   
PART II. OTHER INFORMATION
45
  
Item 1.Legal Proceedings
45
   
Item 1A.Risk Factors
45
   
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds
45
   
Item 3.Defaults Upon Senior Securities
45
   
Item 4.Mine Safety Disclosures
45
   
Item 5.Other Information
45
   
Item 6.Exhibits
46
   
SIGNATURES
48

2

CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (this “Quarterly Report”) contains both historical and forward-looking statements. Forward-looking statements in this Quarterly Report on Form 10-Q are subject to a number of risks and uncertainties, some of which are beyond the Company’s control. The potential risks and uncertainties that could cause our actual financial condition, results of operations and future performance to differ materially from those expressed or implied in this quarterly reportQuarterly Report include:

•success in executing the Company's business plans and strategies and managing the risks involved in the foregoing;
•negative impacts related to the COVID-19 pandemic and the effectiveness of our Company's responses to the pandemic;
•changes in laws, regulations, rules, quotas, tariffs, and import laws;
•adverse weather conditions, natural disasters and other adverse natural conditions, including freezes, rains, fires, winds and droughts that affect the production, transportation, storage, import and export of fresh produce;
•market responses to industry volume pressures;
•increased pressure from disease, insects and other pests;
•disruption of water supplies or changes in water allocations;
•disruption in the global supply chain;
•product and raw materials supplies and pricing;
•energy supply and pricing;
•changes in interest rates;rates and the impact of inflation;
•availability of financing for development activities;
•general economic conditions for residential and commercial real estate development;
•political changes and economic crises;
•international conflict;
•acts of terrorism;
•labor disruptions, strikes, shortages or work stoppages;
•the impact of foreign exchange rate movements;
•ability to maintain compliance with covenants under our loan agreements;
•loss of important intellectual property rights; and
•other factors disclosed in our public filings with the Securities and Exchange Commission (the "SEC"“SEC”).

These forward-looking statements involve risks and uncertainties that we have identified as having the potential to cause actual results to differ materially from those contemplated herein. We have described in Part I, Item 1A-“1A Risk Factors”Factors in our Annual Report on Form 10-K for the fiscal year ended October 31, 20212022 additional factors that could cause our actual results to differ from our projections or estimates, especially relating to the COVID-19 pandemic.

Many of these risks and uncertainties are currently amplified by, and will continue to be amplified by, or in the future may be amplified by, the COVID-19 pandemic. It is not possible to predict or identify all such risks.

estimates.
The Company’s actual results, performance, prospects or opportunities could differ materially from those expressed in or implied by the forward-looking statements. Additional risks of which the Company is not currently aware or which the Company currently deems immaterial could also cause the Company’s actual results to differ, including those discussed in the section entitled “Risk Factors” included in our Annual Report on Form 10-K for the fiscal year ended October 31, 2021.2022. Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. You should not place undue reliance on these forward-looking statements, which apply only as of the date of this Quarterly Report on Form 10-Q.Report. Except as required by law, we undertake no obligation to update these forward-looking statements, even if our situation changes in the future.

All references to “we,” "us,"“us,” “our,” “our Company,” "the Company"“the Company” or "Limoneira"“Limoneira” in this Quarterly Report on Form 10-Q mean Limoneira Company, a Delaware corporation, and its consolidated subsidiaries.
3

PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
LIMONEIRA COMPANY
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
($ in thousands, except share amounts) and per share data)

July 31, 2022October 31, 2021 July 31, 2023October 31, 2022
AssetsAssets  Assets  
Current assets:Current assets:  Current assets:  
CashCash$995 $439 Cash$11,007 $857 
Accounts receivable, netAccounts receivable, net18,457 17,483 Accounts receivable, net18,067 15,651 
Cultural costsCultural costs6,326 7,500 Cultural costs2,618 8,643 
Prepaid expenses and other current assetsPrepaid expenses and other current assets12,253 10,709 Prepaid expenses and other current assets6,117 8,496 
Receivables/other from related partiesReceivables/other from related parties4,392 5,958 Receivables/other from related parties5,229 3,888 
Total current assetsTotal current assets42,423 42,089 Total current assets43,038 37,535 
Property, plant and equipment, netProperty, plant and equipment, net241,069 242,420 Property, plant and equipment, net162,836 222,628 
Real estate developmentReal estate development23,231 22,828 Real estate development9,967 9,706 
Equity in investmentsEquity in investments64,621 64,072 Equity in investments73,425 72,855 
GoodwillGoodwill1,512 1,527 Goodwill1,524 1,506 
Intangible assets, netIntangible assets, net7,582 8,329 Intangible assets, net6,996 7,317 
Other assetsOther assets13,059 11,011 Other assets14,887 16,971 
Total assetsTotal assets$393,497 $392,276 Total assets$312,673 $368,518 
Liabilities and Stockholders' Equity  
Liabilities, Convertible Preferred Stock and Stockholders' EquityLiabilities, Convertible Preferred Stock and Stockholders' Equity  
Current liabilities:Current liabilities:  Current liabilities:  
Accounts payableAccounts payable$7,078 $8,963 Accounts payable$8,985 $10,663 
Growers and suppliers payableGrowers and suppliers payable12,018 10,371 Growers and suppliers payable7,604 10,740 
Accrued liabilitiesAccrued liabilities7,691 6,542 Accrued liabilities8,392 11,060 
Payables to related partiesPayables to related parties7,719 6,976 Payables to related parties4,704 4,860 
Income taxes payableIncome taxes payable7,175 219 
Current portion of long-term debtCurrent portion of long-term debt3,554 2,472 Current portion of long-term debt435 1,732 
Total current liabilitiesTotal current liabilities38,060 35,324 Total current liabilities37,295 39,274 
Long-term liabilities:Long-term liabilities:  Long-term liabilities:  
Long-term debt, less current portionLong-term debt, less current portion129,004 130,353 Long-term debt, less current portion40,735 104,076 
Deferred income taxesDeferred income taxes24,282 22,853 Deferred income taxes22,363 23,497 
Other long-term liabilitiesOther long-term liabilities5,656 4,501 Other long-term liabilities6,079 9,807 
Total liabilitiesTotal liabilities197,002 193,031 Total liabilities106,472 176,654 
Commitments and contingencies (See Note 16)— — 
Series B Convertible Preferred Stock – $100.00 par value (50,000 shares authorized: 14,790 shares issued and outstanding at July 31, 2022 and October 31, 2021) (8.75% coupon rate)1,479 1,479 
Series B-2 Convertible Preferred Stock – $100.00 par value (10,000 shares authorized: 9,300 shares issued and outstanding at July 31, 2022 and October 31, 2021) (4% dividend rate on liquidation value of $1,000 per share)9,331 9,331 
Stockholders' Equity:  
Series A Junior Participating Preferred Stock – $0.01 par value (20,000 shares authorized: zero issued or outstanding at July 31, 2022 and October 31, 2021)— — 
Common Stock – $0.01 par value (39,000,000 shares authorized: 17,972,528 and 17,936,377 shares issued and 17,721,551 and 17,685,400 shares outstanding at July 31, 2022 and October 31, 2021, respectively)180 179 
Commitments and contingenciesCommitments and contingencies— — 
Series B Convertible Preferred Stock – $100.00 par value (50,000 shares authorized: 14,790 shares issued and outstanding at July 31, 2023 and October 31, 2022) (8.75% coupon rate)Series B Convertible Preferred Stock – $100.00 par value (50,000 shares authorized: 14,790 shares issued and outstanding at July 31, 2023 and October 31, 2022) (8.75% coupon rate)1,479 1,479 
Series B-2 Convertible Preferred Stock – $100.00 par value (10,000 shares authorized: 9,300 shares issued and outstanding at July 31, 2023 and October 31, 2022) (4% dividend rate on liquidation value of $1,000 per share)Series B-2 Convertible Preferred Stock – $100.00 par value (10,000 shares authorized: 9,300 shares issued and outstanding at July 31, 2023 and October 31, 2022) (4% dividend rate on liquidation value of $1,000 per share)9,331 9,331 
Stockholders' equity:Stockholders' equity:  
Series A Junior Participating Preferred Stock – $0.01 par value (20,000 shares authorized: zero issued or outstanding at July 31, 2023 and October 31, 2022)Series A Junior Participating Preferred Stock – $0.01 par value (20,000 shares authorized: zero issued or outstanding at July 31, 2023 and October 31, 2022)— — 
Common Stock – $0.01 par value (39,000,000 shares authorized: 18,229,887 and 17,935,292 shares issued and 17,978,910 and 17,684,315 shares outstanding at July 31, 2023 and October 31, 2022, respectively)Common Stock – $0.01 par value (39,000,000 shares authorized: 18,229,887 and 17,935,292 shares issued and 17,978,910 and 17,684,315 shares outstanding at July 31, 2023 and October 31, 2022, respectively)180 177 
Additional paid-in capitalAdditional paid-in capital164,871 163,965 Additional paid-in capital167,925 165,169 
Retained earningsRetained earnings19,618 21,552 Retained earnings23,945 15,500 
Accumulated other comprehensive lossAccumulated other comprehensive loss(7,295)(5,733)Accumulated other comprehensive loss(4,496)(7,908)
Treasury stock, at cost, 250,977 shares at July 31, 2022 and October 31, 2021(3,493)(3,493)
Treasury stock, at cost, 250,977 shares at July 31, 2023 and October 31, 2022Treasury stock, at cost, 250,977 shares at July 31, 2023 and October 31, 2022(3,493)(3,493)
Noncontrolling interestNoncontrolling interest11,804 11,965 Noncontrolling interest11,330 11,609 
Total stockholders' equityTotal stockholders' equity185,685 188,435 Total stockholders' equity195,391 181,054 
Total liabilities and stockholders' equity$393,497 $392,276 
Total liabilities, convertible preferred stock and stockholders' equityTotal liabilities, convertible preferred stock and stockholders' equity$312,673 $368,518 
The accompanying notes are an integral part of these unaudited consolidated financial statements.
4

LIMONEIRA COMPANY

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
($ in thousands, except per share amounts)data)

Three Months Ended
July 31,		Nine Months Ended
July 31,		 Three Months Ended
July 31,		Nine Months Ended
July 31,
2022202120222021 2023202220232022
Net revenues:Net revenues:  Net revenues:  
AgribusinessAgribusiness$57,594 $47,954 $141,046 $129,080 Agribusiness$51,092 $57,594 $134,296 $141,046 
Other operationsOther operations1,329 1,171 3,901 3,452 Other operations1,405 1,329 4,172 3,901 
Total net revenuesTotal net revenues58,923 49,125 144,947 132,532 Total net revenues52,497 58,923 138,468 144,947 
Costs and expenses:Costs and expenses:  Costs and expenses:  
AgribusinessAgribusiness41,463 40,691 120,306 114,071 Agribusiness46,845 41,463 126,275 120,306 
Other operationsOther operations1,127 1,017 3,294 3,189 Other operations1,034 1,127 3,281 3,294 
Loss on disposal of assets, net242 — 503 — 
Loss (gain) on disposal of assets, netLoss (gain) on disposal of assets, net1,545 242 (29,199)503 
Gain on legal settlementGain on legal settlement— — (2,269)— 
Selling, general and administrativeSelling, general and administrative5,031 4,043 16,756 15,154 Selling, general and administrative4,622 5,031 19,907 16,756 
Total costs and expensesTotal costs and expenses47,863 45,751 140,859 132,414 Total costs and expenses54,046 47,863 117,995 140,859 
Operating income11,060 3,374 4,088 118 
Operating (loss) incomeOperating (loss) income(1,549)11,060 20,473 4,088 
Other (expense) income:Other (expense) income:  Other (expense) income:  
Interest incomeInterest income6 211 54 279 Interest income178 6 248 54 
Interest expense, net of patronage dividendsInterest expense, net of patronage dividends(772)(574)(1,253)(1,062)Interest expense, net of patronage dividends(241)(772)(417)(1,253)
Equity in earnings of investments, netEquity in earnings of investments, net331 1,462 681 2,471 Equity in earnings of investments, net199 331 514 681 
Other (expense) income, netOther (expense) income, net(215)13 (2,627)106 
Total other expenseTotal other expense(79)(422)(2,282)(412)
(Loss) income before income tax benefit (provision)(Loss) income before income tax benefit (provision)(1,628)10,638 18,191 3,676 
Income tax benefit (provision)Income tax benefit (provision)378 (3,313)(5,537)(1,385)
Net (loss) incomeNet (loss) income(1,250)7,325 12,654 2,291 
Net loss attributable to noncontrolling interestNet loss attributable to noncontrolling interest87 52 201 129 
Net (loss) income attributable to Limoneira CompanyNet (loss) income attributable to Limoneira Company(1,163)7,377 12,855 2,420 
Preferred dividendsPreferred dividends(125)(125)(376)(376)
Net (loss) income applicable to common stockNet (loss) income applicable to common stock$(1,288)$7,252 $12,479 $2,044 
Basic net (loss) income per common shareBasic net (loss) income per common share$(0.07)$0.41 $0.70 $0.11 
Other income, net13 32 106 83 
Total other (expense) income(422)1,131 (412)1,771 
Income before income tax provision10,638 4,505 3,676 1,889 
Income tax provision(3,313)(1,335)(1,385)(1,122)
Net income7,325 3,170 2,291 767 
Net loss attributable to noncontrolling interest52 535 129 663 
Net income attributable to Limoneira Company7,377 3,705 2,420 1,430 
Preferred dividends(125)(125)(376)(376)
Net income applicable to common stock$7,252 $3,580 $2,044 $1,054 
Basic net income per common share$0.41 $0.20 $0.11 $0.06 
Diluted net income per common share$0.40 $0.20 $0.11 $0.06 
Diluted net (loss) income per common shareDiluted net (loss) income per common share$(0.07)$0.40 $0.69 $0.11 
Weighted-average common shares outstanding-basicWeighted-average common shares outstanding-basic17,529,000 17,461,000 17,481,000 17,439,000 Weighted-average common shares outstanding-basic17,621 17,529 17,597 17,481 
Weighted-average common shares outstanding-dilutedWeighted-average common shares outstanding-diluted18,334,000 18,243,000 17,481,000 17,439,000 Weighted-average common shares outstanding-diluted17,621 18,334 18,381 17,481 
The accompanying notes are an integral part of these unaudited consolidated financial statements.


5

LIMONEIRA COMPANY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (UNAUDITED)
(Inin thousands)

Three Months Ended
July 31,		Nine Months Ended
July 31,
2022202120222021 Three Months Ended
July 31,		Nine Months Ended
July 31,
Net income$7,325 $3,170 $2,291 $767 
2023202220232022
Net (loss) incomeNet (loss) income$(1,250)$7,325 $12,654 $2,291 
Other comprehensive (loss) income, net of tax:Other comprehensive (loss) income, net of tax:  Other comprehensive (loss) income, net of tax:  
Foreign currency translation adjustmentsForeign currency translation adjustments(828)(1,042)(1,779)330 Foreign currency translation adjustments(485)(828)1,688 (1,779)
Minimum pension liability adjustment, net of tax of $27, $50, $81 and $150 for the three and nine months ended July 31, 2022 and 2021, respectively.72 135 217 403 
Minimum pension liability adjustments, net of tax of $0, $27, $(135) and $81 for the three and nine months ended July 31, 2023 and 2022, respectivelyMinimum pension liability adjustments, net of tax of $0, $27, $(135) and $81 for the three and nine months ended July 31, 2023 and 2022, respectively— 72 (220)217 
Pension settlement cost, net of tax of $0 and $756 for the three and nine months ended July 31, 2023Pension settlement cost, net of tax of $0 and $756 for the three and nine months ended July 31, 2023— — 1,944 — 
Total other comprehensive (loss) income, net of taxTotal other comprehensive (loss) income, net of tax(756)(907)(1,562)733 Total other comprehensive (loss) income, net of tax(485)(756)3,412 (1,562)
Comprehensive income6,569 2,263 729 1,500 
Comprehensive (loss) incomeComprehensive (loss) income(1,735)6,569 16,066 729 
Comprehensive loss attributable to noncontrolling interestComprehensive loss attributable to noncontrolling interest80 558 161 630 Comprehensive loss attributable to noncontrolling interest87 80 201 161 
Comprehensive income attributable to Limoneira Company$6,649 $2,821 $890 $2,130 
Comprehensive (loss) income attributable to Limoneira CompanyComprehensive (loss) income attributable to Limoneira Company$(1,648)$6,649 $16,267 $890 
The accompanying notes are an integral part of these unaudited consolidated financial statements.

6

LIMONEIRA COMPANY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY AND TEMPORARY EQUITY (UNAUDITED)
($ in thousands)thousands, except share and per share data)

 Stockholders' Equity Temporary Equity
 Common StockAdditional
Paid-In		RetainedAccumulated
Other
Comprehensive		TreasuryNon- controllingTotalSeries B
Preferred		Series B-2
Preferred
 SharesAmountCapitalEarningsLossStockInterestEquityStockStock
Balance at October 31, 202117,685,400 $179 $163,965 $21,552 $(5,733)$(3,493)$11,965 $188,435 $1,479 $9,331 
Dividends Common ($0.075 per share)— — — (1,328)— — — (1,328)— — 
Dividends Series B ($2.19 per share)— — — (32)— — — (32)— — 
Dividends Series B-2 ($10 per share)— — — (93)— — — (93)— — 
Stock compensation70,000 1 996 — — — — 997 — — 
Exchange of common stock(55,362)— (900)— — — — (900)— — 
Net loss— — — (6,518)— — (88)(6,606)— — 
Other comprehensive income, net of tax— — — — 127 — 2 129 — — 
Balance at January 31, 202217,700,038$180 $164,061 $13,581 $(5,606)$(3,493)$11,879 $180,602 $1,479 $9,331 
Dividends Common ($0.075 per share)— — — (1,325)— — — (1,325)— — 
Dividends Series B ($2.19 per share)— — — (33)— — — (33)— — 
Dividends Series B-2 ($10 per share)— — — (93)— — — (93)— — 
Stock compensation34,231 — 378 — — — — 378 — — 
Exchange of common stock(12,718)— (186)— — — — (186)— — 
Net income— — — 1,561 — — 11 1,572 — — 
Other comprehensive loss, net of tax— — — — (933)— (6)(939)— — 
Balance at April 30, 202217,721,551 $180 $164,253 $13,691 $(6,539)$(3,493)$11,884 $179,976 $1,479 $9,331 
Dividends Common ($0.075 per share)— — — (1,325)— — — (1,325)— — 
Dividends Series B ($2.19 per share)— — — (32)— — — (32)— — 
Dividends Series B-2 ($10 per share)— — — (93)— — — (93)— — 
Stock compensation— — 618 — — — — 618 — — 
Net income (loss)— — — 7,377 — — (52)7,325 — — 
Other comprehensive loss, net of tax— — — — (756)— (28)(784)— — 
Balance at July 31, 202217,721,551$180 $164,871 $19,618 $(7,295)$(3,493)$11,804 $185,685 $1,479 $9,331 










 Stockholders' Equity Temporary Equity
 Common StockAdditional
Paid-In		RetainedAccumulated
Other
Comprehensive		TreasuryNon- controllingTotalSeries B
Preferred		Series B-2
Preferred
 SharesAmountCapitalEarnings(Loss) IncomeStockInterestEquityStockStock
Balance at October 31, 202217,684,315 $177 $165,169 $15,500 $(7,908)$(3,493)$11,609 $181,054 $1,479 $9,331 
Dividends Common ($0.075 per share)— — — (1,337)— — — (1,337)— — 
Dividends Series B ($2.19 per share)— — — (32)— — — (32)— — 
Dividends Series B-2 ($10 per share)— — — (93)— — — (93)— — 
Stock compensation146,289 1 1,063 — — — — 1,064 — — 
Noncontrolling interest adjustment— — — — — — (78)(78)— — 
Net income— — — 15,631 — — (97)15,534 — — 
Other comprehensive income, net of tax— — — — 3,947 — — 3,947 — — 
Balance at January 31, 202317,830,604$178 $166,232 $29,669 $(3,961)$(3,493)$11,434 $200,059 $1,479 $9,331 
Dividends Common ($0.075 per share)— — — (1,348)— — — (1,348)— — 
Dividends Series B ($2.19 per share)— — — (33)— — — (33)— — 
Dividends Series B-2 ($10 per share)— — — (93)— — — (93)— — 
Stock compensation149,900 2 963 — — — — 965 — — 
Exchange of common stock(1,594)— (26)— — — — (26)— — 
Net loss— — — (1,613)— — (17)(1,630)— — 
Other comprehensive loss, net of tax— — — — (50)— — (50)— — 
Balance at April 30, 202317,978,910 $180 $167,169 $26,582 $(4,011)$(3,493)$11,417 $197,844 $1,479 $9,331 
Dividends Common ($0.075 per share)— — — (1,349)— — — (1,349)— — 
Dividends Series B ($2.19 per share)— — — (32)— — — (32)— — 
Dividends Series B-2 ($10 per share)— — — (93)— — — (93)— — 
Stock compensation— — 756 — — — — 756 — — 
Net loss— — — (1,163)— — (87)(1,250)— — 
Other comprehensive loss, net of tax— — — — (485)— — (485)— — 
Balance at July 31, 202317,978,910$180 $167,925 $23,945 $(4,496)$(3,493)$11,330 $195,391 $1,479 $9,331 












7

LIMONEIRA COMPANY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY AND TEMPORARY EQUITY (CONTINUED)(UNAUDITED)
($ in thousands)thousands, except share and per share data)

Stockholders' Equity Temporary Equity
Common StockAdditional
Paid-In		RetainedAccumulated
Other
Comprehensive		TreasuryNon- controllingTotalSeries B
Preferred		Series B-2
Preferred
SharesAmountCapitalEarningsLossStockInterestEquityStockStock
Balance at October 31, 202017,606,730 $179 $162,084 $30,797 $(7,548)$(3,493)$13,741 $195,760 $1,479 $9,331 
Dividends Common ($0.075 per share)— — — (1,324)— — — (1,324)— — 
Dividends Series B ($2.19 per share)— — — (32)— — — (32)— — 
Dividends Series B-2 $10 per share)— — — (93)— — — (93)— — 
Stock compensation125,190 1 1,066 — — — — 1,067 — — 
Exchange of common stock(46,993)(1)(700)— — — — (701)— — 
Net (loss) income— — — (4,208)— — 292 (3,916)— — 
Other comprehensive income, net of tax— — — — 929 — 39 968 — — 
Balance at January 31, 202117,684,927$179 $162,450 $25,140 $(6,619)$(3,493)$14,072 $191,729 $1,479 $9,331 
Dividends Common ($0.075 per share)— — — (1,327)— — — (1,327)— — 
Dividends Series B ($2.19 per share)— — — (33)— — — (33)— — 
Dividends Series B-2 ($10 per share)— — — (93)— — — (93)— — 
Stock compensation473 — 570 — — — — 570 — — 
Net income (loss)— — — 1,933 — — (420)1,513 — — 
Other comprehensive income, net of tax— — — — 711 — 17 728 — — 
Balance at April 30, 202117,685,400$179 $163,020 $25,620 $(5,908)$(3,493)$13,669 $193,087 $1,479 $9,331 
Dividends Common ($0.075 per share)— — — (1,326)— — — (1,326)— — 
Dividends Series B ($2.19 per share)— — — (32)— — — (32)— — 
Dividends Series B-2 ($10 per share)— — — (93)— — — (93)— — 
Stock compensation— — 440 — — — — 440 — — 
Noncontrolling interest adjustment— — — — — — (1,331)(1,331)— — 
Net income (loss)— — — 3,705 — — (535)3,170 — — 
Other comprehensive loss, net of tax— — — — (907)— (23)(930)— — 
Balance at July 31, 202117,685,400$179 $163,460 $27,874 $(6,815)$(3,493)$11,780 $192,985 $1,479 $9,331 

Stockholders' Equity Temporary Equity
Common StockAdditional
Paid-In		RetainedAccumulated
Other
Comprehensive		TreasuryNon- controllingTotalSeries B
Preferred		Series B-2
Preferred
SharesAmountCapitalEarnings(Loss) IncomeStockInterestEquityStockStock
Balance at October 31, 202117,685,400 $179 $163,965 $21,552 $(5,733)$(3,493)$11,965 $188,435 $1,479 $9,331 
Dividends Common ($0.075 per share)— — — (1,328)— — — (1,328)— — 
Dividends Series B ($2.19 per share)— — — (32)— — — (32)— — 
Dividends Series B-2 $10 per share)— — — (93)— — — (93)— — 
Stock compensation70,000 1 996 — — — — 997 — — 
Exchange of common stock(55,362)— (900)— — — — (900)— — 
Net loss— — — (6,518)— — (88)(6,606)— — 
Other comprehensive income, net of tax— — — — 127 — 2 129 — — 
Balance at January 31, 202217,700,038$180 $164,061 $13,581 $(5,606)$(3,493)$11,879 $180,602 $1,479 $9,331 
Dividends Common ($0.075 per share)— — — (1,325)— — — (1,325)— — 
Dividends Series B ($2.19 per share)— — — (33)— — — (33)— — 
Dividends Series B-2 ($10 per share)— — — (93)— — — (93)— — 
Stock compensation34,231 — 378 — — — — 378 — — 
Exchange of common stock(12,718)— (186)— — — — (186)— — 
Net income— — — 1,561 — — 11 1,572 — — 
Other comprehensive loss, net of tax— — — — (933)— (6)(939)— — 
Balance at April 30, 202217,721,551$180 $164,253 $13,691 $(6,539)$(3,493)$11,884 $179,976 $1,479 $9,331 
Dividends Common ($0.075 per share)— — — (1,325)— — — (1,325)— — 
Dividends Series B ($2.19 per share)— — — (32)— — — (32)— — 
Dividends Series B-2 ($10 per share)— — — (93)— — — (93)— — 
Stock compensation— — 618 — — — — 618 — — 
Net income (loss)— — — 7,377 — — (52)7,325 — — 
Other comprehensive loss, net of tax— — — — (756)— (28)(784)— — 
Balance at July 31, 202217,721,551$180 $164,871 $19,618 $(7,295)$(3,493)$11,804 $185,685 $1,479 $9,331 
The accompanying notes are an integral part of these unaudited consolidated financial statements.
8

LIMONEIRA COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Inin thousands)

Nine Months Ended
July 31,		 Nine Months Ended
July 31,
20222021 20232022
Operating activitiesOperating activities  Operating activities
Net incomeNet income$2,291 $767 Net income$12,654 $2,291 
Adjustments to reconcile net income to net cash provided by operating activities:  
Adjustments to reconcile net income to net cash (used in) provided by operating activities:Adjustments to reconcile net income to net cash (used in) provided by operating activities:  
Depreciation and amortizationDepreciation and amortization7,432 7,490 Depreciation and amortization6,510 7,432 
Loss (gain) on disposal of assets, net503 (20)
(Gain) loss on disposal of assets, net(Gain) loss on disposal of assets, net(29,199)503 
Gain on legal settlementGain on legal settlement(853)— 
Stock compensation expenseStock compensation expense1,993 2,077 Stock compensation expense2,785 1,993 
Non-cash lease expenseNon-cash lease expense323 346 Non-cash lease expense1,226 323 
Equity in earnings of investments, netEquity in earnings of investments, net(681)(2,471)Equity in earnings of investments, net(514)(681)
Cash distributions from equity investmentsCash distributions from equity investments132 — Cash distributions from equity investments220 132 
Deferred income taxesDeferred income taxes1,385 1,122 Deferred income taxes5,537 1,385 
Other, netOther, net816 193 Other, net161 816 
Changes in operating assets and liabilities:Changes in operating assets and liabilities:  Changes in operating assets and liabilities:
Accounts receivable and receivables/other from related partiesAccounts receivable and receivables/other from related parties(1,260)(2,301)Accounts receivable and receivables/other from related parties(3,881)(1,260)
Cultural costsCultural costs1,168 1,430 Cultural costs2,175 1,168 
Prepaid expenses and other current assetsPrepaid expenses and other current assets(4,181)(494)Prepaid expenses and other current assets(336)(4,181)
Income taxes receivable— 5,911 
Income taxes payableIncome taxes payable(330)— 
Other assetsOther assets3 52 Other assets19 3 
Accounts payable and growers and suppliers payableAccounts payable and growers and suppliers payable(424)4,731 Accounts payable and growers and suppliers payable(4,442)(424)
Accrued liabilities and payables to related partiesAccrued liabilities and payables to related parties1,612 (1,612)Accrued liabilities and payables to related parties(3,073)1,612 
Other long-term liabilitiesOther long-term liabilities(193)(419)Other long-term liabilities(1,247)(193)
Net cash provided by operating activities10,919 16,802 
Net cash (used in) provided by operating activitiesNet cash (used in) provided by operating activities(12,588)10,919 
Investing activitiesInvesting activities  Investing activities  
Capital expendituresCapital expenditures(7,673)(8,282)Capital expenditures(8,960)(7,673)
Net proceeds from sale of assets110 87 
Net proceeds from sales of assetsNet proceeds from sales of assets98,526 110 
Net proceeds from legal settlementNet proceeds from legal settlement853 — 
Net proceeds from sale of real estate development assetsNet proceeds from sale of real estate development assets2,577 — 
Cash distribution from Trapani FreshCash distribution from Trapani Fresh82 — 
Collection on notes receivableCollection on notes receivable2,755 25 Collection on notes receivable66 2,755 
Equity investment contributionsEquity investment contributions(275)— 
Cash distribution from equity investment— 106 
Investments in mutual water companies and water rightsInvestments in mutual water companies and water rights(494)(652)Investments in mutual water companies and water rights(511)(494)
Net cash used in investing activities(5,302)(8,716)
Net cash provided by (used in) investing activitiesNet cash provided by (used in) investing activities92,358 (5,302)
Financing activitiesFinancing activities  Financing activities  
Borrowings of long-term debtBorrowings of long-term debt119,204 69,682 Borrowings of long-term debt57,940 119,204 
Repayments of long-term debtRepayments of long-term debt(119,327)(72,438)Repayments of long-term debt(122,827)(119,327)
Proceeds from equipment financingsProceeds from equipment financings1,020 — Proceeds from equipment financings— 1,020 
Principal paid on finance lease and equipment financingsPrincipal paid on finance lease and equipment financings(271)— Principal paid on finance lease and equipment financings(323)(271)
Dividends paid – commonDividends paid – common(3,978)(3,977)Dividends paid – common(4,034)(3,978)
Dividends paid – preferredDividends paid – preferred(376)(376)Dividends paid – preferred(376)(376)
Exchange of common stockExchange of common stock(1,086)(700)Exchange of common stock(26)(1,086)
Net cash used in financing activitiesNet cash used in financing activities(4,814)(7,809)Net cash used in financing activities(69,646)(4,814)
Effect of exchange rate changes on cashEffect of exchange rate changes on cash(247)(3)Effect of exchange rate changes on cash26 (247)
Net increase in cashNet increase in cash556 274 Net increase in cash10,150 556 
Cash at beginning of periodCash at beginning of period439 501 Cash at beginning of period857 439 
Cash at end of periodCash at end of period$995 $775 Cash at end of period$11,007 $995 
9

LIMONEIRA COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (CONTINUED)
(Inin thousands)

 Nine Months Ended
July 31,
 20222021
Supplemental disclosures of cash flow information  
Cash paid during the period for interest, net of amounts capitalized$1,108 $1,340 
Cash received during the period for income taxes, net$— $5,942 
Non-cash investing and financing activities:  
Capital expenditures accrued but not paid at period-end$359 $437 

 Nine Months Ended
July 31,
 20232022
Supplemental disclosures of cash flow information  
Cash paid during the period for interest (net of amounts capitalized)$592 $1,108 
Cash paid during the period for income taxes$330 $— 
Non-cash investing and financing activities:  
Capital expenditures accrued but not paid at period-end$— $359 
The accompanying notes are an integral part of these unaudited consolidated financial statements.



10

LIMONEIRA COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. Organization and Basis of Presentation

Business

Limoneira Company (together with its consolidated subsidiaries, the “Company”) engages primarily in growing citrus and avocados, picking and hauling citrus, and packing, marketing and selling citrus. The Company is also engaged in residential rentals and other rental operations and real estate development activities.

The Company markets and sells citrus directly to food service, wholesale and retail customers throughout the United States, Canada, Asia, Europe and other international markets. The Company is a member of Sunkist Growers, Inc. (“Sunkist”), an agricultural marketing cooperative, and sells a portion of its oranges, specialty citrus and other crops to Sunkist-licensed and other third-party packinghouses.

Through fiscal year 2021, the Company sold the majority of its avocado production to Calavo Growers, Inc. (“Calavo”), a packing and marketing company listed on the NASDAQ Global Select Market under the symbol CVGW. In February 2022, the Company terminated its Avocado Marketing Agreement and the associated Letter Agreement Regarding Fruit Commitment with Calavo to pursue opportunities with other packing and marketing companies.

Basis of Presentation and Preparation

The accompanying unaudited interim consolidated financial statements include the accounts of the Company and the accounts of all the subsidiaries and investments in which the Company holds a controlling interest. Intercompany balances and transactions have been eliminated in consolidation. In the opinion of the Company, the unaudited interim consolidated financial statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation. The preparation of these unaudited interim consolidated financial statements and accompanying notes in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Certain information and footnote disclosures normally included in the annual consolidated financial statements have been condensed or omitted pursuant to the rules and regulations of the SEC. Because the consolidated financial statements do not include all of the information and notes required by GAAP for a complete set of consolidated financial statements, they should be read in conjunction with the audited consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K.

2. Summary of Significant Accounting Policies

Comprehensive (Loss) Income

Comprehensive (loss) income represents all changes in a company’s net assets, except changes resulting from transactions with stockholders. Other comprehensive income or loss primarily includes foreign currency translation items and defined benefit pension items. Accumulated other comprehensive loss is reported as a component of the Company's stockholders' equity.

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

Three Months Ended July 31,
 20222021
 Pre-tax AmountTax ExpenseNet AmountPre-tax AmountTax ExpenseNet Amount
Foreign currency translation adjustments$(828)$— $(828)$(1,042)$— $(1,042)
Minimum pension liability adjustments:
Other comprehensive gain before reclassifications99 (27)72 185 (50)135 
Other comprehensive loss$(729)$(27)$(756)$(857)$(50)$(907)




Three Months Ended July 31,
20232022
Pre-tax AmountTax ExpenseNet AmountPre-tax AmountTax ExpenseNet Amount
Foreign currency translation adjustments$(485)$— $(485)$(828)$— $(828)
Minimum pension liability adjustments:
Other comprehensive income before reclassifications— — — 99 (27)72 
Other comprehensive loss$(485)$— $(485)$(729)$(27)$(756)
11

LIMONEIRA COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
2. Summary of Significant Accounting Policies (continued)

Nine Months Ended July 31,
 20232022
 Pre-tax AmountTax Benefit (Expense)Net AmountPre-tax AmountTax ExpenseNet Amount
Foreign currency translation adjustments$1,688 $— $1,688 $(1,779)$— $(1,779)
Minimum pension liability adjustments:
Other comprehensive (loss) income before reclassifications(355)135 (220)298 (81)217 
Amounts reclassified to earnings included in "Other income (expense), net"2,700 (756)1,944 — — — 
Other comprehensive income (loss)$4,033 $(621)$3,412 $(1,481)$(81)$(1,562)
Comprehensive Income (continued)
Nine Months Ended July 31,
 20222021
 Pre-tax AmountTax ExpenseNet AmountPre-tax AmountTax ExpenseNet Amount
Foreign currency translation adjustments$(1,779)$— $(1,779)$330 $— $330 
Minimum pension liability adjustments:
Other comprehensive gain before reclassifications298 (81)217 553 (150)403 
Other comprehensive (loss) income$(1,481)$(81)$(1,562)$883 $(150)$733 

The following table summarizes the changes in accumulated other comprehensive loss by component (in thousands):

 Foreign Currency Translation (Loss) GainDefined Benefit Pension PlanAccumulated Other Comprehensive Loss
Balance at October 31, 2022$(6,184)$(1,724)$(7,908)
Other comprehensive income1,688 1,724 3,412 
Balance at July 31, 2023$(4,496)$— $(4,496)
 Foreign Currency Translation LossDefined Benefit Pension PlanAccumulated Other Comprehensive Loss
Balance at October 31, 2021$(3,754)$(1,979)$(5,733)
Other comprehensive (loss) income(1,779)217 (1,562)
Balance at July 31, 2022$(5,533)$(1,762)$(7,295)
 Foreign Currency Translation (Loss) GainDefined Benefit Pension PlanAccumulated Other Comprehensive Loss
Balance at October 31, 2020$(3,069)$(4,479)$(7,548)
Other comprehensive income330 403 733 
Balance at July 31, 2021$(2,739)$(4,076)$(6,815)
COVID-19 Pandemic

There is continued uncertainty around the breadth and duration of the Company's business disruptions related to the COVID-19 pandemic. The decline in demand for the Company's products has negatively impacted the Company's sales and profitability since the beginning of the second quarter of fiscal year 2020, which it believes was due to the2020. The COVID-19 pandemic negatively impacted its sales and profitability for the last three quarters of fiscal year 2020, all of fiscal year 2021, and the first three quarters of fiscal year 2022. The Company also expects the COVID-19 pandemicmay continue to impact itsthe Company's sales and profitability in future periods. The duration of these trends and the magnitude of such impacts are uncertain and therefore cannot be estimated at this time, as they are influenced by a number of factors, many of which are outside management’s control. The full impact of the COVID-19 pandemic on the Company's results of operations, financial condition, and liquidity, including its ability to comply with debt covenants, for fiscal year 2022 and beyond, is driven by estimates that contain uncertainties.

Recent Accounting Pronouncements

Financial Accounting Standards Board ("FASB") Accounting Standards Update ("ASU") 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity

This amendment simplifies accounting for convertible instruments by removing major separation models currently required under GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument and more convertible preferred stock as a single equity instrument with no separate accounting for embedded conversion features. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for it. The ASU also simplifies the diluted earnings per share (EPS) calculation in certain areas.

ASU 2020-06 is effective for public business entities that meet the definition of a SEC filer for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2020. The Company adopted this ASU effective November 1, 2021 and the adoption did not have a material impact on its consolidated financial statements.




12

LIMONEIRA COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
3. Concentrations and Geographic Information

Concentrations of credit risk with respect to revenues and tradeaccounts receivable are limited due to a large, diverse customer base. One individual customer represented 11%12% of revenue for the nine months ended July 31, 2022. Two customers represented 17% and 13% of revenue, respectively, for the nine months ended July 31, 2021.2023. No individual customer represented more than 10% of accounts receivable, net as of July 31, 2022 or October2023.
No individual supplier represented 10% of accounts payable as of July 31, 2021.

2023.
Lemons procured from third-party growers were 46% and 57% of the Company's lemon supply for the three months ended July 31, 2022 and 2021, respectively, and were 51%53% and 51% of the Company's lemon supply for the nine months ended July 31, 20222023 and 2021,2022, respectively. One third-party grower was 10%11% of the lemon supply for the nine months ended July 31, 2021.2023.

During the three months ended July 31, 2022The Company maintains its cash in federally insured financial institutions. The account balances at these institutions periodically exceed Federal Deposit Insurance Corporation (“FDIC”) insurance coverage and, 2021, the Company had approximately $491,000as a result, there is a concentration of risk related to amounts on deposit in excess of FDIC insurance coverage.
12
LIMONEIRA COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
3. Asset Sales and $578,000, respectively, of total sales in Chile by Fruticola Pan de Azucar S.A. ("PDA") and Agricola San Pablo SpA ("San Pablo"). During the nine months ended July 31, 2022 and 2021, the Company had approximately $3,202,000 and $2,555,000, respectively, of total sales in Chile by PDA and San Pablo.Disposals

Northern Properties
In MarchOctober 2022, the Company signed anentered into a Purchase and Sale Agreement, as amended, (the “Agreement”) with PGIM Real Estate Finance, LLC (“PGIM”) to sell 3,537 acres of land and citrus orchards in Tulare County, California (the “Northern Properties”) for a purchase price of approximately $100,405,000. On January 25, 2023, the Board approved the Agreement creating a binding agreement of the Company to lease Finca Santa Clara, its 1,200-acre lemon ranch in Argentina, to FGF Trapani ("FGF"), its 49% partner in Trapani Fresh Consorcio de Cooperacion ("Trapani Fresh"). The lease is retroactive beginning November 1, 2021, with a term of 14 months at a fixed sum of $400,000, payable in five equal, monthly installments beginning August 2022 until December 2022.sell the Northern Properties and the transaction closed on January 31, 2023. During the threequarter ended April 30, 2023, the purchase price was decreased by $397,000 for reimbursement of certain cultural costs and nine months ended July 31, 2022,prepaid expenses, resulting in a final purchase price of $100,008,000.
The following is a summary of the Companytransaction (in thousands):
Net cash proceeds received$85,494 
Debt directly repaid through the transaction12,917 
Total net proceeds received98,411 
Less: net book value of assets sold
Cultural costs3,853 
Prepaid expenses and other current assets155 
Property, plant and equipment, net53,144 
Intangible assets, net12 
Other assets1,320 
Accrued liabilities(68)
58,416 
Gain on disposal of assets$39,995 
The proceeds were used to pay down all of the Company’s domestic debt except the AgWest Farm Credit $40,000,000 non-revolving line of credit. The Northern Properties component, including an allocation of interest expense related to the debt directly repaid through the transaction, had approximately $86,000a pretax loss of $1,667,000 and $257,000, respectively, of lease income by Trapani Fresh included in other operations revenue. During the three and nine months ended July 31, 2021, the Company had approximately $710,000 and $3,265,000, respectively, of total agribusiness sales in Argentina by Trapani Fresh.

Aggregate foreign exchange transaction losses realized for our foreign subsidiaries was approximately $137,000 and $598,000$776,000 for the nine months ended July 31, 2023 and 2022, respectively.
On January 31, 2023, the Company entered into a Farm Management Agreement (“FMA”) with an affiliate of PGIM to provide farming, management and 2021, respectively,operations services related to the Northern Properties. The FMA has an initial term expiring March 31, 2024, and thereafter continuing from year to year unless earlier terminated under the terms of the FMA. Further, on January 31, 2023, the Company entered into a Grower Packing and Marketing Agreement to provide packing, marketing and selling services for lemons harvested on the Northern Properties for a minimum five-year term, subject to certain benchmarking standards.
Cadiz Ranch
In April 2023, the Company determined that citrus farming operations were included in selling, generaleconomically unviable on 670 acres of leased agricultural land at the Cadiz Ranch. As a result, the Company ceased farming operations, disposed of the related property, plant and administrative expenses inequipment and recorded a loss on disposal of assets of $9,012,000 during the consolidated statements of operations.

nine months ended July 31, 2023.
4. Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist of the following (in thousands):
 July 31, 2022October 31, 2021
Prepaid supplies and insurance$3,378 $2,521 
Note receivable and related interest— 2,438 
Real estate development held for sale2,670 2,543 
Sales tax receivable451 909 
Lemon supplier advances3,487 676 
Other2,267 1,622 
 $12,253 $10,709 

5. Real Estate Development

Real estate development assets are comprised primarily of land and land development costs and consist of the following (in thousands):
 July 31, 2022October 31, 2021
East Area I - Retained Property$13,633 $13,335 
East Area II9,598 9,493 
 $23,231 $22,828 






 July 31, 2023October 31, 2022
Prepaid supplies and insurance$2,753 $2,958 
Real estate development held for sale— 2,670 
Sales tax receivable472 475 
Lemon supplier advances1,907 1,188 
Other985 1,205 
 $6,117 $8,496 
13

LIMONEIRA COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
5. Real Estate Development (continued)

Real estate development assets are comprised primarily of land and land development costs for the East Area II property in the amount of $9,967,000 and $9,706,000 at July 31, 2023 and October 31, 2022, respectively.
East Area I, Retained Property and East Area II

In fiscal year 2005, the Company began capitalizing the costs of two real estate development projects east of Santa Paula, California, for the development of 550 acres of land into residential units, commercial buildings and civic facilities. In November 2015 (the “Transaction Date”), the Company entered into a joint venture with The Lewis Group of Companies (“Lewis”) for the residential development of its East Area I real estate development project. To consummate the transaction, the Company formed Limoneira Lewis Community Builders, LLC (“LLCB”) as the development entity, contributed its East Area I property to LLCB, and sold a 50% interest in LLCB to Lewis for $20,000,000.

The Company and LLCB also entered into a Retained Property Development Agreement on the Transaction Date (the "Retained“Retained Property Agreement"Agreement”). Under the terms of the Retained Property Agreement, LLCB transferred certain contributed East Area I property, which is entitled for commercial development, back to the Company (the "Retained Property"“Retained Property”) and arranged for the design and construction of certain improvements to the Retained Property and East Area II, subject to certain reimbursements by the Company. The balance in Retained Property and East Area II includes estimated costs incurred by and reimbursable to LLCB of $5,771,000$3,444,000 at July 31, 20222023 and October 31, 2021,2022, which is included in payables to related parties.

In January 2018, LLCB entered into a $45,000,000 unsecured Line of Credit Loan Agreement and Promissory Note (the “Loan”) with Bank of America, N.A. to fund early development activities. The Loan,Effective as modified and extended, maturesof February 22, 2023. The2023, the Loan maturity date was extended to February 22, 2024, and the maximum borrowing amount was reduced to $35,000,000. As of February 1, 2023, the interest rate on the Loan is LIBORtransitioned from the London Interbank Offered Rate (“LIBOR”) to the Bloomberg Short-Term Bank Yield Index rate (“BSBY”) plus 2.85% and is payable monthly. The Loan contains certain customary default provisions and LLCB may prepay any amounts outstanding under the Loan without penalty. The Loan had an outstanding balance of $2,500,000$15,000,000 as of July 31, 2022. The Loan has a one year extension option through February 22, 2024 subject to terms and conditions as defined in the Loan agreement, with the maximum borrowing amount reduced to $35,000,000 during the extension period.

2023.
In February 2018, the Company and certain principals from Lewis guaranteed the obligations under the Loan. The guarantors are jointly and severally liable for all Loan obligations in the event of default by LLCB. The guarantee continues in effect until all of the Loan obligations are fully paid. The $1,080,000 estimated value of the guarantee was recorded in the Company’s consolidated balance sheets and is included in other long-term liabilities with a corresponding value in equity in investments. Additionally, a Reimbursement Agreement was executed between the Lewis guarantors and the Company, which provides for unpaid liabilities of LLCB to be shared pro-rata by the Lewis guarantors and the Company in proportion to their percentage interest in LLCB.

In October 2022, the Company entered into a joint venture with Lewis for the development of the Retained Property. The Company formed LLCB II, LLC (“LLCB II”) as the development entity, contributed the Retained Property to the joint venture and sold a 50% interest to Lewis for $7,975,000. The Company recorded a deferred gain of $465,000 on the transaction, which is included in other long-term liabilities as of July 31, 2023 and October 31, 2022. The joint venture partners will share in the capital contributions to fund project costs until loan proceeds and/or revenues are sufficient to fund the project. The Company made contributions of $275,000 to LLCB II during the nine months ended July 31, 2023.
Through July 31, 2022,2023, LLCB has closed sales of initial residential lots representing 586 residential units.

In September 2022, the Company entered into an agreement with LLCB to sell its East Area 1 - Retained Property to potentially develop additional residential units. The Company expects to close the transaction in the fourth quarter of fiscal year 2022, receive approximately $8,000,000 in cash proceeds and record an estimated gain of approximately $4,700,000.

Other Real Estate Development Projects

In fiscal year 2020, the Company entered into an agreement to sell its Sevilla property for $2,700,000, which is expected to closeclosed in calendar yearNovember 2022. After transaction and other costs, the Company expects to receivereceived cash proceeds of approximately $2,670,000. During the third quarter of fiscal year 2022, the Company incurred additional costs to prepare the asset for sale, of which $127,000 were capitalized$2,577,000 and $153,000 were recorded inan immaterial loss on disposal of assets. The carrying value ofassets during the property atnine months ended July 31, 2022 and October 31, 2021, was $2,670,000 and $2,543,000, respectively, and classified as held for sale and included in prepaid expenses and other current assets.

In December 2017, the Company sold its Centennial property with a net book value of $2,983,000 for $3,250,000. The Company received cash and a $3,000,000 promissory note secured by the property for the balance of the purchase. The promissory note was originally scheduled to mature in December 2019, but was periodically extended with principal payments totaling $400,000 received through October 31, 2021. In November 2021, the promissory note was further extended to June 30, 2022 upon making a principal paydown of $250,000, which was paid in November 2021, and revising the interest rate to 4.00% per annum. In April 2022, the $2,350,000 net carrying value of the promissory note was paid in full and the deferred gain of $161,000 was recognized in the second quarter of fiscal year 2022.


2023.
14

LIMONEIRA COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)


6. Equity in Investments

Equity in investments consist of the following (in thousands):
 July 31, 2022October 31, 2021
Limoneira Lewis Community Builders, LLC$60,827 $60,216 
Limco Del Mar, Ltd.2,106 1,997 
Rosales1,183 1,351 
Romney Property Partnership505 508 
 $64,621 $64,072 

 July 31, 2023October 31, 2022
Limoneira Lewis Community Builders, LLC$61,605 $61,154 
LLCB II, LLC8,297 8,023 
Limco Del Mar, Ltd.1,839 2,024 
Rosales1,182 1,147 
Romney Property Partnership502 507 
 $73,425 $72,855 
Net amounts due from Rosales were $540,000$2,348,000 and $1,570,000$270,000 at July 31, 20222023 and October 31, 2021,2022, respectively, and are included in receivables/other from related parties and payables to related parties.

Unconsolidated Significant Subsidiary

In accordance with Rule 10-01(b)(1) of Regulation S-X, which applies to interim reports on Form 10-Q, the Company must determine if its equity method investees are considered “significant subsidiaries."” In evaluating its investments, there are two tests utilized to determine if equity method investees are considered significant subsidiaries: the income test and the investment test. Summarized income statement information of an equity method investee is required in an interim report if either of the two tests exceed 20% in the interim periods presented. During the year-to-date interim periodperiods for the nine months ended July 31, 2021,2023 and 2022, this threshold was not met for any of the Company's equity investment in LLCB.

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

Nine Months Ended
July 31,
20222021
Revenues$1,686 $36,684 
Cost of land sold— 28,062 
Operating expenses569 634 
Net income$1,117 $7,988 
Net income attributable to Limoneira Company$658 $3,944 

investments.
7. Goodwill and Intangible Assets, Net

A summary of the change in the carrying amount of goodwill is as follows (in thousands):
Goodwill Carrying Amount
Balance at October 31, 20212022$1,5271,506 
Foreign currency translation adjustment(15)18 
Balance at July 31, 20222023$1,5121,524 

Goodwill is tested for impairment on an annual basis or when an event or changes in circumstances indicate that its carrying value may not be recoverable. There have been no impairment charges recorded against goodwill as of July 31, 2022.2023.

Intangible assets consist of the following (in thousands):
During the nine months ended July 31, 2021, the Company acquired additional water rights in Chile for $186,000.


July 31, 2023October 31, 2022
Gross Carrying AmountAccumulated AmortizationNet Carrying AmountWeighted Average Useful Life in YearsGross Carrying AmountAccumulated AmortizationNet Carrying AmountWeighted Average Useful Life in Years
Trade names and trademarks$2,108 (1,053)1,055 8$2,108 $(881)$1,227 8
Customer relationships4,037 (1,998)2,039 94,037 (1,660)2,377 9
Non-competition agreement437 (119)318 8437 (76)361 8
Acquired water and mineral rights3,584 — 3,584 Indefinite3,352 — 3,352  Indefinite
$10,166 $(3,170)$6,996 $9,934 $(2,617)$7,317 

15

LIMONEIRA COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
7. Goodwill and Intangible Assets, Net (continued)

Intangible assets consisted of the following (in thousands):
July 31, 2022October 31, 2021
Gross Carrying AmountAccumulated AmortizationNet Carrying AmountWeighted Average Useful Life in YearsGross Carrying AmountAccumulated AmortizationNet Carrying AmountWeighted Average Useful Life in Years
Trade names and trademarks$2,108 (826)1,282 8$2,108 $(663)$1,445 8
Customer relationships4,037 (1,547)2,490 94,037 (1,209)2,828 9
Non-competition agreement437 (64)373 8437 (22)415 8
Acquired water and mineral rights3,437 — 3,437 Indefinite3,641 — 3,641  Indefinite
$10,019 $(2,437)$7,582 $10,223 $(1,894)$8,329 

Amortization expense totaled $182,000$178,000 and $210,000$182,000 for the three months ended July 31, 20222023 and 2021,2022, respectively. Amortization expense totaled $543,000$553,000 and $736,000$543,000 for the nine months ended July 31, 2023 and 2022 and 2021, respectively.

Estimated future amortization expense of intangible assets as of July 31, 20222023 is as follows (in thousands):

2022 (excluding the nine months ended July 31, 2022)$180 
2023724 
2024716 
2025711 
2026711 
Thereafter1,103 
 $4,145 

2023 (remaining three months)$176 
2024711 
2025711 
2026711 
2027427 
Thereafter676 
 $3,412 
8. Other Assets

Investments in Mutual Water Companies

The Company’s investments in various not-for-profit mutual water companies provide it with the right to receive a proportionate share of water from each of the not-for-profit mutual water companies that have been invested in and do not constitute voting shares and/or rights. AsIn January 2023, the Company sold an investment in a mutual water company with a net book value of $1,320,000 as part of the Northern Properties sale described in Note 3 - Asset Sales and Disposals. Amounts included in other assets in the consolidated balance sheets as of July 31, 20222023 and October 31, 2021, $6,488,0002022 were $5,691,000 and $5,994,000, respectively, were included in other assets.

$6,500,000, respectively.
9. Accrued Liabilities

Accrued liabilities consist of the following (in thousands):
July 31, 2022October 31, 2021July 31, 2023October 31, 2022
CompensationCompensation$2,871 $2,112 Compensation$1,886 $3,572 
Property taxesProperty taxes311 676 Property taxes370 664 
Operating expensesOperating expenses2,319 1,203 Operating expenses2,548 2,341 
LeasesLeases765 604 Leases2,233 2,026 
OtherOther1,425 1,947 Other1,355 2,457 
$7,691 $6,542 $8,392 $11,060 











16

LIMONEIRA COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
10. Long-Term Debt
Long-term debt is comprised of the following (in thousands):
 July 31, 2022October 31, 2021
Farm Credit West revolving and non-revolving lines of credit: the interest rate of the revolving line of credit is variable based on the one-month London Interbank Offered Rate (“LIBOR”), which was 1.65% at July 31, 2022, plus 1.85%. The interest rate for the $40.0 million outstanding balance of the non-revolving line of credit was fixed at 4.77% through July 1, 2022, is 3.57% through July 1, 2025 and variable thereafter. Interest is payable monthly and the principal is due in full on July 1, 2026.$112,994 $111,293 
Farm Credit West term loan: The interest rate is fixed at 2.48%. The loan is payable in quarterly installments through November 2022.327 809 
Farm Credit West term loan: The interest rate is fixed at 3.24%. The loan is payable in monthly installments through October 2035.933 974 
Farm Credit West term loan: The interest rate is fixed at 3.24%. The loan is payable in monthly installments through March 2036.7,673 8,004 
Farm Credit West term loan: The interest rate is fixed at 2.77% until July 1, 2025, becoming variable for the remainder of the loan. The loan is payable in monthly installments through March 2036.5,640 5,892 
Farm Credit West term loan: Effective August 2, 2021, the interest rate was fixed at 3.19%. The loan is payable in monthly installments through September 2026.2,122 2,475 
Banco de Chile term loan: the interest rate is fixed at 6.48%. The loan is payable in annual installments through January 2025.769 1,011 
Note Payable: the interest rate ranges from 5.00% to 7.00% and was 7.00% at July 31, 2022. The loan includes interest only monthly payments and principal is due in February 2023.1,435 1,435 
Banco de Chile COVID-19 loans: The interest rates are fixed at 3.48%. The loans are payable in monthly installments through September 2024.275 411 
Banco de Chile COVID-19 loans: The interest rates are fixed at 3.48% and 4.26%. The loans are payable in monthly installments through September 2026.489 652 
Subtotal132,657 132,956 
Less deferred financing costs, net of accumulated amortization99 131 
Total long-term debt, net132,558 132,825 
Less current portion3,554 2,472 
Long-term debt, less current portion$129,004 $130,353 

 July 31, 2023October 31, 2022
AgWest Farm Credit revolving and non-revolving lines of credit: the interest rate of the revolving line of credit is variable based on the one-month Secured Overnight Financing Rate (“SOFR”), which was 5.11% at July 31, 2023, plus 1.78%. The interest rate for the $40.0 million outstanding balance of the non-revolving line of credit is fixed at 3.57% through July 1, 2025 and variable thereafter. Interest is payable monthly and the principal is due in full on July 1, 2026.$40,000 $88,521 
AgWest Farm Credit term loan: The interest rate was fixed at 3.24%. The loan was repaid in January 2023.— 919 
AgWest Farm Credit term loan: The interest rate was fixed at 3.24%. The loan was repaid in January 2023.— 7,562 
AgWest Farm Credit term loan: The interest rate was fixed at 2.77% until July 1, 2025, becoming variable for the remainder of the loan. The loan was repaid in January 2023.— 5,555 
AgWest Farm Credit term loan: The interest rate was fixed at 3.19%. The loan was repaid in January 2023.— 2,003 
Banco de Chile term loan: The interest rate is fixed at 6.48%. The loan is payable in annual installments through January 2025.633 675 
Banco de Chile COVID-19 loans: The interest rates are fixed at 3.48%. The loans are payable in monthly installments through September 2024.158 233 
Banco de Chile COVID-19 loans: The interest rates are fixed at 3.48% and 4.26%. The loans are payable in monthly installments through September 2026.379 434 
Subtotal41,170 105,902 
Less deferred financing costs, net of accumulated amortization— 94 
Total long-term debt, net41,170 105,808 
Less current portion435 1,732 
Long-term debt, less current portion$40,735 $104,076 
The Company entered into a Master Loan Agreement (the “MLA”) with AgWest Farm Credit, formerly known as Farm Credit West, PCA (the "Lender"“Lender”) dated June 1, 2021, together with 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 an agreement to convert to a fixed interest rate for a period of time as described in the table above ("(“Fixed Interest Rate Agreement"Agreement”). The MLA governs the terms of the Supplements. The MLA amends and restates the previous Master Loan Agreement between the Company and the Lender, dated June 19, 2017, and extends the principal repayment to July 1, 2026.

In March 2020, the Company entered into a revolving equity line of credit promissory note and loan agreement with the Lender for a $15,000,000 Revolving Equity Line of Credit (the "RELOC"“RELOC”) secured by a first lien on the Windfall Investors, LLC property. The RELOC matures in 2043 and featuresfeatured a 3-year draw period followed by 20 years of fully amortized loan payments.

 On March 31, 2023, the draw period expired and the RELOC was closed as there was no balance outstanding.
The Supplements and RELOC provide aggregate borrowing capacity of $130,000,000$115,000,000 comprised of $75,000,000 under the Revolving Credit Supplement, and $40,000,000 under the Non-Revolving Credit Supplement and $15,000,000 under the RELOC. 

Supplement. As of July 31, 2022,2023, the Company's outstanding borrowings under the Supplements and RELOC were $112,994,000$40,000,000 and it had $17,006,000$75,000,000 available to borrow.






In January 2023, the Company used the proceeds from the Northern Properties sale as described in Note 3 - Asset Sales and Disposals to reduce the Company's long-term debt.
17

LIMONEIRA COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
10. Long-Term Debt (continued)

The interest rate in effect under the Revolving Credit Supplement automatically adjusted commencing on July 1, 2021 andadjusts on the first day of each month thereafter.month. The interest rate for any amount outstanding under the Revolving Credit Supplement iswas based on the one-month LIBOR rate plus or minus an applicable margin. As of January 1, 2023, the rate transitioned from LIBOR to the SOFR. The applicable margin ranges from 1.75%1.78% to 2.35%2.28% depending on the ratio of current assets, plus the remaining available commitment divided by current liabilities. On each one yearone-year anniversary of July 1, the Company has the option to convert the interest rate in use under the Revolving Credit Supplement from the preceding LIBOR-basedSOFR-based calculation to a variable interest rate. The Company may prepay any amounts outstanding under the Revolving Credit Supplement without penalty.

The initial interest rate in effect under the Non-Revolving Credit Supplement was a fixed interest rate of 4.77% through July 1, 2022 and then converted tois a fixed interest rate of 3.57% per year until July 1, 2025 (the “Fixed Rate Term”). Thereafter, the interest rate will convert to a variable interest rate established by the Lender corresponding to the applicable interest rate group. The Company may not prepay any amounts under the outstanding Non-Revolving Credit Supplement during the Fixed Rate Term. Thereafter, the Company may prepay any amounts outstanding under the Non-Revolving Credit Supplement, provided that a fee equal to 0.50% of the amount prepaid and any other cost or loss suffered by the Lender must be paid with any prepayment.

The interest rate in effect under the RELOC is a variable interest rate established by the Lender corresponding to the applicable interest rate group, which was 4.00% as of July 31, 2022. The interest rate may be adjusted automatically under the provisions of the Lender's variable interest rate plan. The Company may prepay any amounts outstanding under the RELOC without penalty.

All indebtedness under the MLA, and RELOC, including any indebtedness under the Supplements, is secured by a first lien on Company-owned stock or participation certificates, Company funds maintained with the Lender, the Lender’s unallocated surplus, and certain of the Company’s agricultural properties in Tulare and Ventura counties in California and certain of the Company’s building fixtures and improvements and investments in mutual water companies associated with the pledged agricultural properties. The MLA includes customary default provisions that provide should an event of default occur, the Lender, at its option, may declare all or any portion of the indebtedness under the MLA to be immediately due and payable without demand, notice of nonpayment, protest or prior recourse to collateral, and terminate or suspend the Company’s right to draw or request funds on any loan or line of credit.

The MLA subjects the Company 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 the Company’s business. The Company is also subject to a financial covenant that requires it to maintain compliance with a specific debt service coverage ratio greater than or equal to 1.25:11.0 when measured as of October 31, 2023, and annually thereafter. The Company was in compliance with the covenants as of October 31, 2022. In September 2023, the Lender modified the covenant to defer measurement at October 31, 20222023 and annually thereafter.resume a debt service coverage ratio of 1.25:1.0 measured as of October 31, 2024.

In February 2023, the Lender declared an annual cash patronage dividend of 1.25% of average eligible loan balances and the Company received $1,413,000 in the second quarter of fiscal year 2023. In December 2021, the Lender declared an annual cash patronage dividend of 1.25% of average eligible loan balances and the Company received the aggregate of $1,582,000 in March and AprilFebruary 2022. In December 2020, the Lender declared an annual cash patronage dividend of 1.50% of average eligible loan balances and the Company received $1,170,000 in February 2021.

Interest is capitalized on non-bearing orchards, real estate development projects and significant construction in progress. The Company capitalized interest of $235,000$207,000 and $353,000$235,000 during the three months ended July 31, 20222023 and 2021,2022, respectively and $235,000$513,000 and $661,000$235,000 during the nine months ended July 31, 20222023 and 2021,2022, respectively. Capitalized interest is included in property, plant and equipment and real estate development assets in the Company’s consolidated balance sheets.

11. Other Long-Term Liabilities
Other long-term liabilities consist of the following (in thousands):
11. Leases
 July 31, 2023October 31, 2022
Minimum pension liability$— $2,272 
Loan guarantee1,080 1,080 
Leases3,775 5,062 
Other1,224 1,393 
 $6,079 $9,807 


18
LIMONEIRA COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
12. Leases
Lessor Arrangements

The Company enters into leasing transactions in which it rents certain of its assets and the Company is the lessor. These lease contracts are typically classified as operating leases with remaining terms ranging from one month to 2120 years, with various renewal terms available. All of the residential rentals have month-to-month lease terms.





18

LIMONEIRA COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
11. Leases (continued)

Lessor Arrangements (continued)

The Company’sCompany's rental operations revenue consists of the following (in thousands):

Three Months Ended
July 31,		Nine Months Ended
July 31,		Three Months Ended
July 31,		Nine Months Ended
July 31,
20222021202220212023202220232022
Operating lease revenueOperating lease revenue$1,265 $1,086 $3,678 $3,215 Operating lease revenue$1,308 $1,265 $3,872 $3,678 
Variable lease revenueVariable lease revenue64 85 223 237 Variable lease revenue97 64 300 223 
Total lease revenueTotal lease revenue$1,329 $1,171 $3,901 $3,452 Total lease revenue$1,405 $1,329 $4,172 $3,901 

Lessee Arrangements

The Company enters into leasing transactions in which the Company is the lessee. These lease contracts are classified as either operating or finance leases. The Company’s lease contracts are generally for agricultural land and packinghouse facilities and farming equipment with remaining lease terms ranging from one to 1615 years, with various term extensions available. The Company’s lease agreements do not contain any residual value guarantees or material restrictive covenants. Leases with an initial term of 12 months or less are not recorded on the balance sheet and the Company recognizes lease expense for these leases on a straight-line basis over the lease term.

OperatingAll lease costs were $137,000 and $128,000 for the three months ended July 31, 2022 and 2021, respectively, and $395,000 and $406,000 for the nine months ended July 31, 2022 and 2021, respectively, which are primarily included in agribusiness costs and expenses in the Company’sCompany's consolidated statements of operations. Finance
Operating lease costs were $37,000$522,000 and zero$137,000 for the three months ended July 31, 20222023 and 2021,2022, respectively, and $112,000$1,504,000 and zero$395,000 for the nine months ended July 31, 2023 and 2022, respectively. Finance lease costs were immaterial for the three months ended July 31, 2023 and 2022, and 2021, respectively, which are primarily included in agribusiness$122,000 and $112,000 for the nine months ended July 31, 2023 and 2022, respectively. Variable lease costs were immaterial for the three and expenses in the Company’s consolidated statements of operations. Variablenine months ended July 31, 2023 and short2022. Short term lease costs were immaterial.

$155,000 and immaterial for the three months ended July 31, 2023 and 2022, respectively, and $493,000 and $174,000 for the nine months ended July 31, 2023 and 2022, respectively.
Supplemental balance sheet information related to leases consists of the following (in thousands):

ClassificationJuly 31, 2022October 31, 2021ClassificationJuly 31, 2023October 31, 2022
AssetsAssetsAssets
Operating lease ROU assetsOperating lease ROU assetsOther assets$2,058 $2,041 Operating lease ROU assetsOther assets$5,118 $6,190 
Finance lease assetsFinance lease assetsOther assets1,055 1,142 Finance lease assetsOther assets992 1,091 
Total lease assets$3,113 $3,183 
$6,110 $7,281 
Liabilities and Stockholders' EquityLiabilities and Stockholders' EquityLiabilities and Stockholders' Equity
Current operating lease liabilitiesCurrent operating lease liabilitiesAccrued liabilities and payables to related parties$426 $488 Current operating lease liabilitiesAccrued liabilities and payables to related parties$1,965 $1,892 
Current finance lease liabilitiesCurrent finance lease liabilitiesAccrued liabilities249 249 Current finance lease liabilitiesAccrued liabilities268 268 
Non-current operating lease liabilitiesNon-current operating lease liabilitiesOther long-term liabilities1,675 1,648 Non-current operating lease liabilitiesOther long-term liabilities3,239 4,347 
Non-current finance lease liabilitiesNon-current finance lease liabilitiesOther long-term liabilities723 884 Non-current finance lease liabilitiesOther long-term liabilities536 715 
Total lease liabilities$3,073 $3,269 
$6,008 $7,222 









19

LIMONEIRA COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
11.12. Leases (continued)

Lessee Arrangements (continued)

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

Nine Months Ended
July 31,
20222021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows from operating leases$442 $422 
Operating cash outflows from finance leases$26 $— 
Financing cash outflows from finance leases$161 $— 
ROU assets obtained in exchange for new operating lease liabilities$355 $271 

Nine Months Ended
July 31,
20232022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows from operating leases$1,459 $442 
Operating cash outflows from finance leases$23 $26 
Financing cash outflows from finance leases$178 $161 
ROU assets obtained in exchange for new operating lease liabilities$138 $355 
12.13. Basic and Diluted Net (Loss) Income perPer Share

Basic net (loss) income per common share is calculated using the weighted-average number of common shares outstanding during the period without consideration of the dilutive effect of conversion of preferred stock. Diluted net (loss) income per common share is calculated using the weighted-average number of common shares outstanding during the period plus the dilutive effect of unvested, restricted stock and conversion of preferred stock. The computations for basic and diluted net loss(loss) income per common share are as follows (in thousands, except per share amounts)data):
 Three Months Ended
July 31,		Nine Months Ended
July 31,
 2022202120222021
Basic net income per common share:  
Net income applicable to common stock$7,252 $3,580 $2,044 $1,054 
Less: Earnings allocated to unvested, restricted stock(79)(15)(42)(50)
Numerator: Net income for basic EPS7,173 3,565 2,002 1,004 
Denominator: Weighted average common shares-basic17,529 17,461 17,481 17,439 
Basic net income per common share$0.41 $0.20 $0.11 $0.06 
Diluted net income per common share:  
Net income for basic EPS$7,173 $3,565 $2,002 $1,004 
Effect of dilutive unvested, restricted stock and preferred stock125 140 — — 
Numerator: Net income for diluted EPS$7,298 $3,705 2,002 1,004 
Weighted average common shares–basic17,529 17,461 17,481 17,439 
Effect of dilutive unvested, restricted stock and preferred stock805 782 — — 
Denominator: Weighted average common shares–diluted18,334 18,243 17,481 17,439 
Diluted net income per common share$0.40 $0.20 $0.11 $0.06 
 Three Months Ended
July 31,		Nine Months Ended
July 31,
 2023202220232022
Basic net (loss) income per common share:  
Net (loss) income applicable to common stock$(1,288)$7,252 $12,479 $2,044 
Effect of unvested, restricted stock(27)(79)(194)(42)
Numerator: Net (loss) income for basic EPS(1,315)7,173 12,285 2,002 
Denominator: Weighted average common shares-basic17,621 17,529 17,597 17,481 
Basic net (loss) income per common share$(0.07)$0.41 $0.70 $0.11 
Diluted net (loss) income per common share:  
Net (loss) income for basic EPS$(1,315)$7,173 $12,285 $2,002 
Effect of dilutive preferred stock— 125 376 — 
Numerator: Net (loss) income for diluted EPS(1,315)7,298 12,661 2,002 
Weighted average common shares–basic17,621 17,529 17,597 17,481 
Effect of dilutive preferred stock— 805 784 — 
Denominator: Weighted average common shares–diluted17,621 18,334 18,381 17,481 
Diluted net (loss) income per common share$(0.07)$0.40 $0.69 $0.11 

Diluted net (loss) income per common share is computed using the more dilutive method of either the two-class method or the treasury stock method. Unvested stock-based compensation awards that contain non-forfeitable rights to dividends as participating shares are included in computing earnings per share. The Company’s unvested, restricted stock awards qualify as participating shares. Diluted net (loss) income per common share was calculated under the two-class method for the three and nine months ended July 31, 2022. The Company excluded 147,000, unvested, restricted shares, as calculated under the treasury stock method, from its computation of diluted net income per common share for the three months ended July 31, 20212023 and 146,000 for the nine months ended July 31, 2021.2022.




20

LIMONEIRA COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
13. Related Party14. Related-Party Transactions

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

 July 31, 2022October 31, 2021 July 31, 2023October 31, 2022
 Balance SheetBalance Sheet Balance SheetBalance Sheet
RefRefRelated PartyReceivable/Other from Related PartiesOther AssetsPayables to Related PartiesOther Long-Term LiabilitiesReceivable/Other from Related PartiesOther AssetsPayables to Related PartiesOther Long-Term LiabilitiesRefRelated-PartyReceivable/Other from Related PartiesOther AssetsPayables to Related PartiesOther Long-Term LiabilitiesReceivable/Other from Related PartiesOther AssetsPayables to Related PartiesOther Long-Term Liabilities
2 2 Mutual water companies$— $494 $54 $— $— $432 $40 $— 2 Mutual water companies$— $511 $261 $— $— $506 $133 $— 
3 Cooperative association$— $— $18 $— $— $— $19 $— 
5 5 Cadiz / Fenner / WAM$— $1,308 $572 $1,219 $— $1,386 $273 $1,297 5 Cadiz / Fenner / WAM$— $1,226 $162 $1,137 $— $1,288 $446 $1,198 
8 8 FGF$3,380 $2,653 $832 $— $4,598 $980 $832 $— 8 FGF$2,815 $2,586 $837 $— $2,965 $2,652 $837 $— 
9 9 LLCB$— $— $5,771 $— $— $— $5,771 $— 9 LLCB$66 $— $3,444 $— $66 $— $3,444 $— 
11 Third-party growers$— $— $— $— $— $— $41 $— 

Three Months Ended July 31, 2022Three Months Ended July 31, 2021Three Months Ended July 31, 2023Three Months Ended July 31, 2022
 Consolidated Statement of OperationsConsolidated Statement of Operations Consolidated Statement of OperationsConsolidated Statement of Operations
RefRefRelated PartyNet Revenue AgribusinessNet Revenue Rental OperationsAgribusiness Expense and OtherDividends PaidNet Revenue AgribusinessNet Revenue Rental OperationsAgribusiness Expense and OtherDividends PaidRefRelated-PartyNet Revenue AgribusinessNet Revenue Other OperationsAgribusiness Expense and OtherDividends PaidNet Revenue AgribusinessNet Revenue Other OperationsAgribusiness Expense and OtherDividends Paid
1 1 Employees$— $220 $— $— $— $204 $— $— 1 Employees$— $222 $— $— $— $220 $— $— 
2 2 Mutual water companies$— $— $481 $— $— $— $274 $— 2 Mutual water companies$— $— $201 $— $— $— $481 $— 
3 3 Cooperative association$— $— $585 $— $— $— $652 $— 3 Cooperative association$— $— $412 $— $— $— $585 $— 
4 Calavo$— $— $— $— $4,036 $80 $408 $126 
5 5 Cadiz / Fenner / WAM$— $— $895 $— $— $— $36 $— 5 Cadiz / Fenner / WAM$— $— $359 $— $— $— $895 $— 
7 7 YMIDD$135 $— $70 $— $— $— $— $— 
8 8 FGF$132 $50 $— $— $83 $86 $2 $— 
8 FGF$83 $86 $2 $— $710 $— $1,761 $— 
10 Freska$— $— $— $— $23 $— $— $— 
11 Third-party growers$— $— $— $— $— $— $16 $— 
12 12 Principal owner$— $— $— $446 $— $— $— $— 

Nine Months Ended July 31, 2022Nine Months Ended July 31, 2021Nine Months Ended July 31, 2023Nine Months Ended July 31, 2022
 Consolidated Statement of OperationsConsolidated Statement of Operations Consolidated Statement of OperationsConsolidated Statement of Operations
RefRefRelated PartyNet Revenue AgribusinessNet Revenue Rental OperationsAgribusiness Expense and OtherDividends PaidNet Revenue AgribusinessNet Revenue Rental OperationsAgribusiness Expense and OtherDividends PaidRefRelated-PartyNet Revenue AgribusinessNet Revenue Other OperationsAgribusiness Expense and OtherDividends PaidNet Revenue AgribusinessNet Revenue Other OperationsAgribusiness Expense and OtherDividends Paid
1 1 Employees$— $650 $— $— $— $608 $— $— 1 Employees$— $666 $— $— $— $650 $— $— 
2 2 Mutual water companies$— $— $975 $— $— $— $879 $— 2 Mutual water companies$— $— $979 $— $— $— $975 $— 
3 3 Cooperative association$— $— $1,369 $— $— $— $1,178 $— 3 Cooperative association$— $— $1,278 $— $— $— $1,369 $— 
4 4 Calavo$— $80 $2 $126 $6,589 $237 $688 $377 4 Calavo$— $— $— $— $— $80 $2 $126 
5 5 Cadiz / Fenner / WAM$— $— $2,084 $— $— $— $271 $— 5 Cadiz / Fenner / WAM$— $— $1,914 $— $— $— $2,084 $— 
6 Colorado River Growers$— $— $— $— $157 $— $2,772 $— 
7 7 YMIDD$— $— $76 $— $— $— $62 $— 7 YMIDD$405 $— $142 $— $— $— $76 $— 
8 8 FGF$248 $257 $2 $— $3,265 $— $2,989 $— 8 FGF$248 $174 $— $— $248 $257 $2 $— 
10 Freska$— $— $— $— $119 $— $142 $— 
11 11 Third-party growers$104 $— $12 $— $— $— $132 $— 11 Third-party growers$— $— $— $— $104 $— $12 $— 
12 12 Principal owner$— $— $— $656 $— $— $— $— 

(1) Employees - The Company rents certain of its residential housing assets to employees on a month-to-month basis and recorded rental income from employees. There were no material rental payments due from employees at July 31, 2022 or2023 and October 31, 2021.

2022.
(2) Mutual water companies - The Company has representation on the boards of directors of the mutual water companies in which the Company has investments, as well as other water districts. Refer to Note 8 - Other Assets. The Company recorded capital contributions, purchased water and water delivery services and had water payments due to the mutual water companies and districts.



21

LIMONEIRA COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
13. Related Party Transactions (continued)

(3) Cooperative association - The Company has representation on the board of directors of a non-profit cooperative association that provides pest control services for the agricultural industry. The Company purchased services and supplies from and had immaterial payments due to the cooperative association.

21
LIMONEIRA COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
14. Related-Party Transactions (continued)
(4) Calavo - Through January 2022, the Company had representation on the board of directors of Calavo. Calavo ownsowned common stock of the Company and the Company payspaid dividends on such common stock to Calavo. Additionally, the Company leases office space to Calavo. As of February 2022, Calavo is no longer a related party.

related-party.
(5) Cadiz / Fenner / WAM - A member of the Company’s board of directors serves as the CEO, President and a member of the board of directors of Cadiz, Inc. In 2013, the Company entered a long-term lease agreement (the “Lease”) with Cadiz Real Estate, LLC (“Cadiz”), a wholly owned subsidiary of Cadiz, Inc., and currently leasesleased 670 acres located in eastern San Bernardino County, California. In 2016, Cadiz assigned this lease to Fenner Valley Farms, LLC (“Fenner”), a subsidiary of Water Asset Management, LLC (“WAM”). As of the date of this lease assignment, the Company no longer has any related-party transactions with Cadiz. An affiliate of WAM is the holder of 9,300 shares of the Company's Series B-2 convertible preferred stock. The annual base rentalrent is equal to the sum of $200 per planted acre and 20% of gross revenues from the sale of harvested lemons (less operating expenses), not to exceed $1,200 per acre per year. In 2016, Cadiz assigned this lease to Fenner Valley Farms, LLC (“Fenner”), a subsidiary of Water Asset Management, LLC (“WAM”). An affiliate of WAM is the holder of 9,300 shares of the Company's Series B-2 convertible preferred stock. Upon the adoption of ASC 842, the Company recorded a right-of-use, or ROU, asset and corresponding lease liability.

(6) Colorado River Growers, Inc. (“CRG”) - The Company had representation on the board of directors of CRG, a non-profit cooperative association of fruit growers engaged in the agricultural harvesting business in Yuma County, Arizona. CRG was dissolved in August 2021. The Company paid harvest expense to CRG and provided harvest management and administrative services to CRG.

(7) Yuma Mesa Irrigation and Drainage District (“YMIDD”) - The Company has representation on the board of directors of YMIDD. The Company purchased water from YMIDD and had immaterialno amounts payable to them for such purchases.

 Additionally, the Company received fallowing revenue from YMIDD.
(8) FGF - The Company advances funds to FGF for fruit purchases, which are recorded as an asset until the sales occur and the remaining proceeds become due to FGF. Additionally, FGF provided farming, packing, by-product processing and administrative services to Trapani Fresh. The Company hadhas a receivable from FGF for lemon sales and the sale of packing supplies and a payable due to FGF for fruit purchases and services. The Company records revenue related to the licensing of intangible assets to FGF. Effective November 1, 2021, theThe Company leases Fincathe Santa Clara ranch to FGF and records rental revenue related to the leased land.

(9) LLCB - Refer to Note 5 - Real Estate Development.

(10) Freska - A former member of the Company's board of directors is a majority shareholder of Freska Produce International, LLC ("Freska"). The Company had avocado sales to Freska and corresponding receivables for such sales. The former board member resigned effective June 14, 2022 and Freska is no longer a related party.

(11) Third-party growers - A former member of the Company's board of directors marketsmarketed lemons through the Company. The Company had payments due to the member for such lemon procurement. The former board member resigned effective June 14, 2022.2022 and is no longer a related-party.

(12) Principal owner - The Company has one principal owner with ownership shares over 10% and paid dividends to such owner.
14.15. Income Taxes

The effective tax rate for the nine months ended July 31, 20222023 was higher than the federal statutory tax rate of 21% mainly due to foreign jurisdictions that are taxed at different rates, state taxes, tax impact of stock-basedexecutive compensation, and nondeductible tax items. The Company has no material uncertain tax positions as of July 31, 2022.2023. The Company recognizes interest expense and penalties related to income tax matters as a component of income tax expense. There was no accrued interest or penalties associated with uncertain tax positions as of July 31, 2022.

2023.
15.16. Retirement Plans

The Limoneira Company Retirement Plan (the “Plan”) iswas a noncontributory, defined benefit, single employer pension plan, that provideswhich provided retirement benefits for all eligible employees. Benefits paid by the Plan arewere calculated based on years of service, highest five-year average earnings, primary Social Security benefit and retirement age. Effective June 2004, the Company froze the Plan and no additional benefits accrued to participants subsequent to that date. The Plan iswas administered by Wells FargoPrincipal Bank and Mercer Human Resource Consulting. In fiscal year 2021, the Company terminated the Plan effective December 31, 2021.
22

LIMONEIRA COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
15. Retirement Plans (continued)

During the three months ended January 31, 2023, the Company made funding contributions of $2,550,000 to fully fund and settle the plan obligations. Lump sum payments were made to a portion of the active and vested terminated participants and annuities were purchased for all remaining participants from an insurance company. There are no remaining benefit obligations or plan assets and the remaining accumulated other comprehensive loss was fully recognized.
The Plan was funded consistent with the funding requirements of federal law and regulations. There were no funding contributions during the nine months ended July 31, 2022 and 2021.2022. Plan assets arewere invested in a group trust consisting primarily of pooled funds, mutual funds, cash and cash equivalents.


22
LIMONEIRA COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
16. Retirement Plans (continued)
The components of net periodic pension cost for the Plan for the three and nine months ended July 31, 2022 and 2021 were as follows (in thousands):
 Three Months Ended
July 31,		Nine Months Ended
July 31,
 2022202120222021
Administrative expenses$180 $70 $539 $208 
Interest cost130 137 390 412 
Expected return on plan assets(128)(236)(383)(708)
Prior service cost12 11 34 33 
Recognized actuarial loss99 185 298 553 
Net periodic benefit cost$293 $167 $878 $498 
 Three Months Ended
July 31,		Nine Months Ended
July 31,
 2023202220232022
Administrative expenses$— $180 $20 $539 
Interest cost— 130 34 390 
Expected return on plan assets— (128)(17)(383)
Prior service cost— 12 4 34 
Amortization of net loss— 99 — 298 
Settlement loss recognized— — 2,700 — 
Net periodic benefit cost$— $293 $2,741 $878 
16.17. Commitments and Contingencies

The Company is from time to time involved in various lawsuits and legal proceedings that arise in the ordinary course of business. At this time, the Company is not aware of any pending or threatened litigation against it that it expects will have a material adverse effect on its business, financial condition, liquidity, or operating results. Legal claims are inherently uncertain, however, and it is possible that the Company’s business, financial condition, liquidity and/or operating results could be adversely affected in the future by legal proceedings.

The Company iswas party to a lawsuit, initiated on March 27, 2018, against Southern California Edison in Superior Court of the State of California, County of Los Angeles whereby the Company is claimingclaimed unspecified damages, attorneys'attorneys’ fees and other costs, as a result fromof the Thomas Fire in fiscal year 2018. While the outcome of this lawsuit is uncertain,
On April 18, 2023, the Company believes its claim for damages is valid.
entered into a Confidential Settlement Agreement and Release (the “Settlement Agreement”) with Southern California Edison Company and Edison International to formally resolve any and all claims related to the fire. Under the terms of the Settlement Agreement, the Company was awarded a total settlement of $9,000,000. On May 19, 2023, the Company received $6,109,000, net of legal and related costs, of which $3,840,000 was recorded in
agribusiness revenues and $2,269,000 was recorded in gain on legal settlement as of April 30, 2023.
17.18. Stock-based Compensation and Treasury Stock

Stock-based Compensation

The Company has a stock-based compensation plan (the “Stock Plan”) that allows for the grant of restricted stock of the Company to members of management, key executives and non-employee directors. The fair value of such awards is based on the fair value of the Company’s common stock on the date of grant and all are classified as equity awards.

Performance Awards

Certain restricted stock grants are made to management each December under the Stock Plan based on the achievement of certain annual financial performance and other criteria achieved during the previous fiscal year (“Performance Awards”). The Performance Awardsperformance grants are based on a percentage of the employee’s base salary divided by the stock price on the grant date once the performance criteria has been met, and generally vest over a two-year period as service is provided. ThereDuring December 2022, subsequent to fiscal year 2022, 79,972 shares of restricted stock with a per share price of $13.19 were no Performance Awards granted to management under the Stock Plan for fiscal year 2021 because2022 performance, resulting in total compensation expense of approximately $1,055,000, with $365,000 recognized in the financial performancefiscal year ended October 31, 2022, and other criteria were not met.

the balance will be recognized over the next two years as the shares vest.
Executive Awards

Certain restricted stock grants are made to key executives under the Stock Plan (“Executive Awards”). Executive awardsThese grants generally vest over a three to five-yearthree-year period as service is provided. During December 2021,2022, subsequent to fiscal year 2022, the Company granted 70,00055,000 shares of restricted stock with a per share price of $14.96$13.19 to key executives under the Stock Plan, of which 15,000 shares were forfeited on February 1, 2022 pursuant to a key executive's severance agreement.Plan. The related compensation expense after forfeiture of approximately $823,000$725,000 will be recognized equally over the next three years as the shares vest.

23

LIMONEIRA COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
17. Stock-based Compensation and Treasury Stock (continued)

18. Stock-based Compensation (continued)

In fiscal year 2022, the Company entered into Retention Bonus Agreements with key executives (collectively, the “Retention Bonus Agreements”) whereby the executives will be eligible to receive cash and restricted stock grants. During December 2022, subsequent to fiscal year 2022, the Company granted 11,317 shares of restricted stock with a per share price of $13.19 to key executives related to the Retention Bonus Agreements. The related compensation expense of approximately $149,000 had $122,000 recognized in the fiscal year ended October 31, 2022, and the balance will be recognized over the next year as the shares vest. During March 2023, the Company granted 127,064 shares of restricted stock with a per share price of $15.74 to key executives related to the Retention Bonus Agreements. The related compensation expense of approximately $2,000,000 will be recognized over the next year as the shares vest.
Director Awards

On an annual basis, theThe Company generally issues shares of commonrestricted stock to non-employee directors under the Stock Plan on an annual basis that generally vest over a one-year period (“Director Awards”). During March 2022, 46,2792023, 22,836 shares of restricted stock were granted with a per share price of $16.26 as Director Awards, which vest afterover a one-year period from date of grant. The related stock-based compensation expense of approximately $627,000$371,000 will be recognized equally over the next year as the shares vest. During January 2021, 27,815 shares
Exchange of restricted stock were granted as Director Awards that vested upon grant. The related stock-based compensation of $469,000 was recognized during the first quarter of fiscal year 2021.

Common Stock
During the nine months ended July 31, 20222023 and 2021,2022, members of management exchanged 68,0801,594 and 46,99368,080 shares of common stock with fair values totaling $1,086,000$26,000 and $701,000,$1,086,000, respectively, at the dates of the exchanges, for the payment of payroll taxes associated with the vesting of shares under the Stock Plan.

Treasury Stock

Share Repurchase Program

In fiscal year 2021, the Company's Board of Directors approved a share repurchase program authorizing the Company to repurchase up to $10,000,000 of its outstanding shares of common stock through September 2022. No shares have been repurchased under this program.

18.19. Segment Information

The Company operates in four reportable operating segments: fresh lemons, lemon packing, avocados and other agribusiness. The reportable operating segments of the Company are strategic business units with different products and services, distribution processes and customer bases. The fresh lemons segment includes sales, farming and harvesting expensesharvest costs and third-party grower and supplier costs relative to fresh lemons. The lemon packing segment includes packing revenues, intersegment packing revenues and shipping and handling revenues relative to lemon packing. The lemon packing segment expenses are comprised of lemon packing costs. The lemon packing segment revenues include intersegment revenues between fresh lemons and lemon packing. The intersegment revenues are included gross in the segment note and a separate line item is shown as an elimination. The avocados segment includes sales, farming and harvest costs. The other agribusiness segment includes sales, farm management, farming and harvest costs and brokered fruit costs of oranges, specialty citrus and other crops.

Revenues related to rental operations are included in “Corporate and Other.” Other agribusiness revenues consisted of oranges of $3,736,000 and $7,226,000 and specialty citrus and other crops of $1,120,000 and $3,437,000 for the three and nine months ended July 31, 2022, respectively. Other agribusiness revenues consisted of oranges of $1,981,000 and $4,476,000 and specialty citrus and other crops of $1,065,000 and $4,089,000 for the three and nine months ended July 31, 2021, respectively.

The Company does not separately allocate depreciation and amortization to its fresh lemons, lemon packing, avocados and other agribusiness segments. No asset information is provided for reportable operating segments, as these specified amounts are not included in the measure of segment profit or loss reviewed by the Company’s chief operating decision maker. The Company measures operating performance, including revenues and operating income, of its operating segments and allocates resources based on its evaluation. The Company does not allocate selling, general and administrative expense, gain on disposal of assets, gain on legal settlement, total other income (expense) and income taxes, or specifically identify them to its operating segments. The Companylemon packing segment earns packing revenue for packing lemons grown on its orchards and lemons procured from third-party growers. Intersegment revenues represent packing revenues related to lemons grown on the Company’s orchards.








24

LIMONEIRA COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
18.19. Segment Information (continued)

Segment information for the three months ended July 31, 2023 is as follows (in thousands):
 Fresh
Lemons		Lemon
Packing		Eliminations
Avocados		Other
Agribusiness		Total
Agribusiness		Corporate
and Other		Total
Revenues from external customers$33,585 $5,472 $— $3,462 $8,573 $51,092 $1,405 $52,497 
Intersegment revenue— 9,684 (9,684)— — — — — 
Total net revenues33,585 15,156 (9,684)3,462 8,573 51,092 1,405 52,497 
Costs and expenses30,758 13,140 (9,684)3,030 7,866 45,110 6,917 52,027 
Depreciation and amortization— — — — — 1,735 284 2,019 
Operating (loss) income$2,827 $2,016 $— $432 $707 $4,247 $(5,796)$(1,549)
Segment information for the three months ended July 31, 2022 is as follows (in thousands):

 Fresh
Lemons		Lemon
Packing		Eliminations
Avocados		Other
Agribusiness		Total
Agribusiness		Corporate
and Other		Total
Revenues from external customers$33,823 $6,337 $— $12,578 $4,856 $57,594 $1,329 $58,923 
Intersegment revenue— 9,696 (9,696)— — — — — 
Total net revenues33,823 16,033 (9,696)12,578 4,856 57,594 1,329 58,923 
Costs and expenses32,600 11,953 (9,696)3,154 1,280 39,291 6,103 45,394 
Depreciation and amortization— — — — — 2,172 297 2,469 
Operating income (loss)$1,223 $4,080 $— $9,424 $3,576 $16,131 $(5,071)$11,060 

Segment information for the threenine months ended July 31, 20212023 is as follows (in thousands):

Fresh
Lemons		Lemon
Packing		Eliminations 
Avocados		Other
Agribusiness		Total
Agribusiness		Corporate
and Other		Total Fresh
Lemons		Lemon
Packing		Eliminations
Avocados		Other
Agribusiness		Total
Agribusiness		Corporate
and Other		Total
Revenues from external customersRevenues from external customers$36,295 $4,540 $— $4,073 $3,046 $47,954 $1,171 $49,125 Revenues from external customers$94,913 $17,543 $— $7,065 $14,775 $134,296 $4,172 $138,468 
Intersegment revenueIntersegment revenue— 7,192 (7,192)— — — — — Intersegment revenue— 27,356 (27,356)— — — — — 
Total net revenuesTotal net revenues36,295 11,732 (7,192)4,073 3,046 47,954 1,171 49,125 Total net revenues94,913 44,899 (27,356)7,065 14,775 134,296 4,172 138,468 
Costs and expenses31,846 9,279 (7,192)2,708 1,956 38,597 4,717 43,314 
Costs and expenses (gains)Costs and expenses (gains)94,035 36,568 (27,356)4,053 13,365 120,665 (9,180)111,485 
Depreciation and amortizationDepreciation and amortization— — — — — 2,094 343 2,437 Depreciation and amortization— — — — — 5,610 900 6,510 
Operating income (loss)$4,449 $2,453 $— $1,365 $1,090 $7,263 $(3,889)$3,374 
Operating incomeOperating income$878 $8,331 $— $3,012 $1,410 $8,021 $12,452 $20,473 

Segment information for the nine months ended July 31, 2022 is as follows (in thousands):
 Fresh
Lemons		Lemon
Packing		Eliminations
Avocados		Other
Agribusiness		Total
Agribusiness		Corporate
and Other		Total
Revenues from external customers$94,415 $19,048 $— $16,920 $10,663 $141,046 $3,901 $144,947 
Intersegment revenue— 25,658 (25,658)— — — — — 
Total net revenues94,415 44,706 (25,658)16,920 10,663 141,046 3,901 144,947 
Costs and expenses91,983 34,171 (25,658)5,548 7,718 113,762 19,665 133,427 
Depreciation and amortization— — — — — 6,544 888 7,432 
Operating income (loss)$2,432 $10,535 $— $11,372 $2,945 $20,740 $(16,652)$4,088 
Revenues related to rental operations are included in “Corporate and Other.” The detail of other agribusiness revenues is as follows (in thousands):
 Three Months Ended
July 31,		Nine Months Ended
July 31,
 2023202220232022
Oranges$1,290 $3,736 $3,825 $7,226 
Specialty citrus and other1,900 1,120 4,163 3,437 
Farm management5,383 — 6,787 — 
Other agribusiness revenues$8,573 $4,856 $14,775 $10,663 

Segment information for the nine months ended July 31, 2021 (in thousands):
25
 Fresh
Lemons		Lemon
Packing		Eliminations 
Avocados		Other
Agribusiness		Total
Agribusiness		Corporate
and Other		Total
Revenues from external customers$98,195 $15,540 $— $6,780 $8,565 $129,080 $3,452 $132,532 
Intersegment revenue— 23,159 (23,159)— — — — — 
Total net revenues98,195 38,699 (23,159)6,780 8,565 129,080 3,452 132,532 
Costs and expenses89,982 29,684 (23,159)4,141 6,832 107,480 17,444 124,924 
Depreciation and amortization— — — — — 6,591 899 7,490 
Operating income (loss)$8,213 $9,015 $— $2,639 $1,733 $15,009 $(14,891)$118 

19.
LIMONEIRA COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
20. Subsequent Events

The Company evaluated events subsequent to July 31, 20222023 through the date of this filing, to assess the need for potential recognition or disclosure in this Quarterly Report on Form 10-Q.Report. Based upon this evaluation, except as described in the notes to the interim consolidated financial statements, it was determined that no other subsequent events occurred that require recognition or disclosure in the unaudited consolidated financial statements.

2526

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 15,40011,100 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. According to Sunkist Growers, Inc. (“Sunkist”), we are one of the largest growers of lemons in the United States and, according to the California Avocado Commission, one of the largest growers of avocados in the United States. In addition to growing lemons and avocados, we grow oranges and a variety of specialty citrus and other crops. We have agricultural plantings throughout Ventura, Tulare, San Luis Obispo and San Bernardino Counties in California, Yuma County in Arizona, La Serena, Chile and Jujuy, Argentina, which collectively consist of approximately 6,1003,800 acres of lemons, 8001,000 acres of avocados, 1,000100 acres of oranges and 900300 acres of specialty citrus and other crops. We also operate our own packinghouses in Santa Paula, and Oxnard, 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"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"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 used ground water from the San Joaquin Valley Basin and water from local water and irrigation districts in Tulare County, which is in California’s San Joaquin Valley. We also useused ground water from the Cadiz Valley Basin in California's San Bernardino County and surface water in Arizona from the Colorado River through the Yuma Mesa Irrigation and Drainage District (“YMIDD”).County. 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, and single-family homes and apartments of approximately 900 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 includes oranges, specialty citrus, other crops and other crops.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. Financial information and discussion of our four reportable segments are contained in the notes to the accompanying consolidated financial statements of this Quarterly Report on Form 10-Q.
Report.
Agribusiness Summary

We market and sell citrus directly to our food service, wholesale and retail customers throughout the United States, Canada, Asia, Australia, Europe and certain other international markets. We are one of the largest growers of lemons and avocados in the United States. In fiscal year 2021, we sold a majority ofsell our avocados and oranges, and sold our specialty citrus, to Calavo Growers, Inc. (“Calavo”).third-party packinghouses. Additionally, we sell our wine grapes to various wine producers, and sold our pistachios to a roaster, packager and marketer of nuts, and our wine grapes to various wine producers.

nuts.
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 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 increasing production and revenue.
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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
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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 producing business is important to us yet it faces constraints on growth as there is little additional land with sufficient water that can be cost-effectively acquired to support new avocado orchards in Southern California. Therefore,and we are currently assessing all of our farmland in Ventura County for opportunities to expand our plantings of avocados. While avocado production is cyclical as avocados typically bear fruit on a bi-annual basis, the profitability and cash flow realized from our avocados helps to diversify our fruit production base.

In addition to growing lemons and avocados, we grow oranges specialty citrus and other crops typically utilizing land not suitable for growing high quality lemons. We regularly monitor the demand for the fruit we grow in the ever-changingcurrent marketplace to identify trends. For instance, while per capita consumption of oranges in the United States has been decreasing since 2000 primarily as a result of consumers increasing their consumption of mandarin oranges and other specialty citrus, the international market demand for U.S. oranges has increased. As a result, we have focused our orange production on high quality late season Navel oranges primarily for export to Japan, China and Korea, which are typically highly profitable niche markets. We produce our specialty citrus and other crops in response to identified consumer trends and believe that we are a leader in the niche production and sale of certain of these high margin fruits. We carefully monitor the respective markets of specialty citrus and other crops and we believe that demand for the types and varieties of specialty citrus and other crops that we grow will continue to increase throughout the world.
Rental Operations Summary
Our rental operations include our residential and commercial rentals, leased land operations and organic recycling. Our residential rental units generate reliable 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. 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. Our goal is to redeploy real estate earnings and cash flow into the expansion of our agribusiness and other income producing real estate. 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 8,600 acre-feet of adjudicated water rights to water in the adjudicated Santa Paula Basin (aquifer) and the un-adjudicated Fillmore and Paso Robles Basins (aquifers)Basin (aquifer). We use ground water and water from local water districts in Tulare County and ground water in San Bernardino County. Following our acquisition of Associated Citrus Packers, Inc. ("Associated"), we began using federal project water in Arizona from the Colorado River through the YMIDD. We also have acquired water rights in Chile related to our acquisitions of PDA and San Pablo.

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We use a combination ofused ground water provided by wells that derive water from the San Joaquin Valley Basin and water from various water districts and irrigation districts in Tulare County, California, which is in the agriculturally productive San Joaquin Valley. We use ground water provided by wells which derive water from the Cadiz Valley Basin at the Cadiz Ranch in San Bernardino County, California. Our Windfall Farms property located in San Luis Obispo County, California obtains water from wells that derive water from the Paso Robles Basin.Basin (aquifer). Our Associated Citrus Packers, Inc. (“Associated”) farming operations in Yuma, Arizona source water from the Colorado River through the YMIDD, where we have access to approximately 11,700-acre11,700 acre feet of Class 3 Colorado River water rights. We use ground water provided by wells and surface water for our PDA and San Pablo farming operations in La Serena, Chile and our Trapani Fresh farming operations in Argentina.

California has experienced belowabove average precipitation since 2018. Accordingduring the first ten months of the 2022 - 2023 rainfall season after experiencing the three driest years on record. The above average precipitation this season helped to alleviate the U.S. Drought Monitor, Ventura and San Bernardino Counties were experiencingdrought conditions in California. As of July 31, 2023, the state was free from severe drought conditions and TulareVentura County was experiencing extremefree from any drought conditions as of July 31, 2022. In October 2021, the California Governor declared a drought state of emergency statewide. Federal officials who oversee the Central Valley Project, California’s largest water delivery system, allocated 0% of the contracted amount of waterconditions. We continue to San Joaquin Valley farmers in 2022 compared to 5% in 2021 and 100% in 2017 through 2020. We are assessingassess the impact these reductionsdrought conditions may have on our California orchards.
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In August 2021, the U.S. Bureau of Reclamation (the “Bureau”) declared a Level 1 Shortage Condition at Lake Mead in the Lower Colorado River Basin for the first time ever, requiring shortage reductions and water savings contributions for states in the southwest. In January 2022, Arizona experienced water releases from Lake Mead reduced by approximately 18% of the state’s annual apportionment. In August 2022, the U.S. Bureau of Reclamation announced Lake Mead to operate in a Tier-2aTier 2 shortage, which increasesfurther increased water restrictions for statesrestrictions. As a result, in the southwest. In January 2023, Arizona will forfeit an additional 80,000-acre feetforfeited approximately 21% of the state's yearly allotment of water from Lake Mead. The Federal Government responded in April 2023 by proposing options for managing the Colorado River water shortage and a final decision is anticipated later this year. In response to these water shortages, we entered into a fallowing agreementagreements in fiscal years 2023 and we are assessing2022 and continue to assess the impact these additional reductions may have on our Arizona orchards.

Recent Developments
Recent Developments

We are equal partners in a joint venture with The Lewis Group of Companies (“Lewis”) for the residential development of our East Area I real estate development project and formed Limoneira Lewis Community Builders, LLC ("LLCB") as the development entity. LLCB has closed on lot sales representing 586 units from inception through July 31, 2022. For further information see Note 5 – Real Estate Development of the notes to consolidated financial statements included in this Quarterly Report on Form 10-Q.

In September 2021, we signed a Memorandum of Understanding with Wileman Bros. & Elliott, Inc. ("Wileman"), to form an alliance to sell their combined citrus volumes under Limoneira's One World of Citrus trademark. Wileman is a 95-year-old citrus business located in California’s Central Valley with a focus on oranges, mandarins and specialty citrus. Effective November 1, 2021, the majority of our oranges and certain specialty citrus are packed by Wileman.

In JanuaryOn October 10, 2022, we were notified of Alex M. Teague’s decision to retire as Senior Vice President and Chief Operating Officer of our Company, effective February 1, 2022. In connection with his retirement, we entered into a separationPurchase and Sale Agreement, as amended (the “Agreement”), with PGIM Real Estate Finance, LLC (“PGIM”) to sell 3,537 acres of land and citrus orchards in Tulare County, California (the “Northern Properties”) for an adjusted purchase price of approximately $100.0 million. The agreement became effective on January 25, 2023, when the Board of Directors approved the Agreement, binding us to sell the Northern Properties and the transaction closed on January 31, 2023. We received net cash proceeds of approximately $98.4 million and recorded a gain of approximately $40.0 million. The proceeds were used primarily to pay down debt.
On January 31, 2023, we entered into a Farm Management Agreement (the “FMA”) with Mr. Teague whereas, (i) Mr. Teague was paid onean affiliate of PGIM to provide farming, management and operations services related to the Northern Properties. The FMA has an initial term expiring March 31, 2024, and thereafter continuing from year to year unless earlier terminated under the terms of his annual base salary, which was paid in one lump sum within ninety (90) business daysthe FMA. Further, on January 31, 2023, we entered into a Grower Packing and Marketing Agreement to provide packing, marketing and selling services for lemons harvested on the Northern Properties for a minimum five-year term, subject to certain benchmarking standards.
During the three months ended January 31, 2023, the Company made funding contributions of January 12, 2022; (ii) twenty-three thousand nine hundred ninety-nine (23,999) shares$2.6 million to fully fund and settle the plan obligations of our common stock granted to Mr. Teague pursuant to the Limoneira Company Omnibus Incentive PlanRetirement Plan. Lump sum payments were made to a portion of the active and vested terminated participants and annuities were purchased for all remaining participants from an insurance company. There are no remaining benefit obligations or plan assets and the remaining accumulated other comprehensive loss was fully vested;recognized.
On November 30, 2022, we sold our Sevilla property, received net proceeds of $2.6 million and (iii) Mr. Teague will receive certain other benefits as set forthrecorded an immaterial loss in the agreement. As of July 31, 2022, we paid $0.4 million cash severance and recognized $0.3 million accelerated vesting of stock-based compensation.

In February 2022, we terminated our Avocado Marketing Agreement and the associated Letter Agreement Regarding Fruit Commitment with Calavo to pursue opportunities with other packing and marketing companies.

In March 2022, we signed an agreement to lease Finca Santa Clara, our 1,200-acre lemon ranch in Argentina, to FGF Trapani ("FGF"), our 49% partner in Trapani Fresh. The lease is retroactive beginning November 1, 2021, with a term of 14 months at a fixed sum of $0.4 million, payable in five equal, monthly installments beginning August 2022 until December 2022.

In April 2022, the promissory note previously received for the sale of our Centennial property, with a net carrying value of $2.4 million, was paid in full and the deferred gain of $0.2 million was recognized in the secondfirst quarter of fiscal year 2022.

In June 2022, we engaged with YMIDD in a two-year fallowing and forbearance program at our Associated Citrus Packers ranch in Yuma, Arizona. We expect to receive payments totaling approximately $1.3 million during the program. With the fallowing program in place, this ranch will have approximately 700 acres of productive lemons, 400 fallowed acres and 200 acres of other crops.

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2023.
On June 28, 2022,27, 2023, we declared a cash dividend of $0.075 per common share paid on July 15, 2022,14, 2023, in the aggregate amount of $1.3 million to stockholders of record as of July 11, 2022.2023.

In September 2022,On April 18, 2023, we entered into an agreementa Confidential Settlement Agreement and Release (the “Settlement Agreement”) with LLCBSouthern California Edison and Edison International to sell our East Area 1 - Retained Propertyformally resolve any and all claims related to potentially develop additional residential units. We expect to close the transactionThomas Fire in fiscal year 2018. Under the terms of the Settlement Agreement, the Company was awarded a total settlement of $9.0 million. On May 19, 2023, the Company received approximately $6.1 million, net of legal and related costs.
In April 2023, we determined that citrus farming operations were economically unviable on 670 acres of leased agricultural land at the Cadiz Ranch. As a result, we ceased farming operations, disposed of the related property, plant and equipment and recorded a loss on disposal of assets of $9.0 million in the fourthsecond quarter of fiscal year 2022,2023.
In August 2023, we engaged with YMIDD and the United States Bureau of Reclamation in a fallowing and forbearance program at our Associated ranch in Yuma, Arizona. We expect to receive approximately $8.0$1.3 million annually, paid in cash proceeds and record an estimated gainquarterly installments, for fallowing approximately 600 acres out of approximately $4.7 million.1,300 acres of farmland through calendar year 2025.

COVID-19 Pandemic

The COVID-19 pandemic has had an adverse impact on the industries and markets in which we conduct business. In particular, the United States lemon market saw a significant decline in volume, with lemon demand falling since widespread shelter in place orders were issued in March 2020, resulting in a significant market oversupply. The export market for fresh produce also significantly declined due to the COVID-19 pandemic impacts. As of July 31, 2022,2023, the demand within both markets is recovering but has not yet returned to pre-pandemic levels.
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The decline in demand for ourthe Company's products beginning the second quarter of fiscal year 2020, which we believe was due to the COVID-19 pandemic,has negatively impacted our sales and profitability for the last three quarters offour fiscal year 2020, all of fiscal year 2021, and the first three quarters of fiscal year 2022. We also expect theyears. The COVID-19 pandemic may continue to impact our sales and profitability in future periods. The duration of these trends and the magnitude of such impacts are uncertain and therefore cannot be estimated at this time, as they are influenced by a number of factors, many of which are outside management’s control, including, but not limited, to those presented in Item 1A1A. Risk Factors of our Annual Report on Form 10-K for the year ended October 31, 2021. Notwithstanding the adverse impacts and subject to unforeseen changes that may arise as the COVID-19 pandemic continues, we currently expect improvement in fiscal year 2022 compared to fiscal year 2021.2022.

Given the economic uncertainty as a result of the COVID-19 pandemic over the past twofour fiscal years, we have taken actions to improve our current liquidity position, including strategically selling certain assets, temporarily postponing capital expenditures selling equity securities to increase cash, reducing operating costs, and substantially reducing discretionary spending.

Although we are considered an essential business, thereThere is significantcontinued uncertainty around the breadth and duration of our business disruptions related to the COVID-19 pandemic, as well as its impact on the U.S. economy and the ongoing business operations of our customers and our results of operations and financial condition. Our management team is actively monitoring the impacts of the COVID-19 pandemic and may take further actions altering our business operations that we determine are in the best interests of our employees and customers or as required by federal, state, or local authorities.customers. The fullongoing impact of the COVID-19 pandemic on our results of operations, financial condition, or liquidity for fiscal year 20222023 and beyond cannot be fully estimated at this point.time. The following discussions are subject to the future effects of the COVID-19 pandemic on our ongoing business operations.




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

 Three Months Ended
July 31,		Nine Months Ended
July 31,
 2022202120222021
Net revenues:  
Agribusiness$57,594 $47,954 $141,046 $129,080 
Other operations1,329 1,171 3,901 3,452 
Total net revenues58,923 49,125 144,947 132,532 
Costs and expenses:
Agribusiness41,463 40,691 120,306 114,071 
Other operations1,127 1,017 3,294 3,189 
Loss on disposal of assets, net242 — 503 — 
Selling, general and administrative5,031 4,043 16,756 15,154 
Total costs and expenses47,863 45,751 140,859 132,414 
Operating income:
Agribusiness16,131 7,263 20,740 15,009 
Other operations202 154 607 263 
Loss on disposal of assets, net(242)— (503)— 
Selling, general and administrative(5,031)(4,043)(16,756)(15,154)
Operating income11,060 3,374 4,088 118 
Other (expense) income:
Interest income6 211 54 279 
Interest expense, net of patronage dividends(772)(574)(1,253)(1,062)
Equity in earnings of investments, net331 1,462 681 2,471 
Other income, net13 32 106 83 
Total other (expense) income(422)1,131 (412)1,771 
Income before income tax provision10,638 4,505 3,676 1,889 
Income tax provision(3,313)(1,335)(1,385)(1,122)
Net income7,325 3,170 2,291 767 
Net loss attributable to noncontrolling interest52 535 129 663 
Net income attributable to Limoneira Company$7,377 $3,705 $2,420 $1,430 
 Three Months Ended
July 31,		Nine Months Ended
July 31,
 2023202220232022
Net revenues:  
Agribusiness$51,092 $57,594 $134,296 $141,046 
Other operations1,405 1,329 4,172 3,901 
Total net revenues52,497 58,923 138,468 144,947 
Costs and expenses:
Agribusiness46,845 41,463 126,275 120,306 
Other operations1,034 1,127 3,281 3,294 
Loss (gain) on disposal of assets, net1,545 242 (29,199)503 
Gain on legal settlement— — (2,269)— 
Selling, general and administrative4,622 5,031 19,907 16,756 
Total costs and expenses54,046 47,863 117,995 140,859 
Operating (loss) income:
Agribusiness4,247 16,131 8,021 20,740 
Other operations371 202 891 607 
(Loss) gain on disposal of assets, net(1,545)(242)29,199 (503)
Gain on legal settlement— — 2,269 — 
Selling, general and administrative(4,622)(5,031)(19,907)(16,756)
Operating (loss) income(1,549)11,060 20,473 4,088 
Other (expense) income:
Interest income178 6 248 54 
Interest expense, net of patronage dividends(241)(772)(417)(1,253)
Equity in earnings of investments, net199 331 514 681 
Other (expense) income, net(215)13 (2,627)106 
Total other expense(79)(422)(2,282)(412)
(Loss) income before income tax benefit (provision)(1,628)10,638 18,191 3,676 
Income tax benefit (provision)378 (3,313)(5,537)(1,385)
Net (loss) income(1,250)7,325 12,654 2,291 
Net loss attributable to noncontrolling interest87 52 201 129 
Net (loss) income attributable to Limoneira Company$(1,163)$7,377 $12,855 $2,420 
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, andpension settlement cost, loss (gain) on disposal of assets, net, cash bonus related to the 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 previous periods 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 prior periods has been restated to conform to the current presentation. 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.
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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):
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Three Months Ended
July 31,		Nine Months Ended
July 31,
2022202120222021 Three Months Ended
July 31,		Nine Months Ended
July 31,
Net income attributable to Limoneira Company$7,377��$3,705 $2,420 $1,430 
2023202220232022
Net (loss) income attributable to Limoneira CompanyNet (loss) income attributable to Limoneira Company$(1,163)$7,377 $12,855 $2,420 
Interest incomeInterest income(6)(211)(54)(279)Interest income(178)(6)(248)(54)
Interest expense, net of patronage dividendsInterest expense, net of patronage dividends772 574 1,253 1,062 Interest expense, net of patronage dividends241 772 417 1,253 
Income tax provision3,313 1,335 1,385 1,122 
Income tax (benefit) provisionIncome tax (benefit) provision(378)3,313 5,537 1,385 
Depreciation and amortizationDepreciation and amortization2,469 2,437 7,432 7,490 Depreciation and amortization2,019 2,469 6,510 7,432 
EBITDAEBITDA$13,925 $7,840 $12,436 $10,825 EBITDA$541 $13,925 $25,071 $12,436 
Named executive officer severance— — 770 — 
Stock-based compensationStock-based compensation756 618 2,785 1,993 
Named executive officer cash severanceNamed executive officer cash severance— — — 432 
Pension settlement costPension settlement cost— — 2,741 — 
Loss (gain) on disposal of assets, netLoss (gain) on disposal of assets, net242 (4)503 (20)Loss (gain) on disposal of assets, net1,545 242 (29,199)503 
Cash bonus related to sale of assetsCash bonus related to sale of assets— — 2,000 — 
Gain on legal settlementGain on legal settlement— — (2,269)— 
Adjusted EBITDAAdjusted EBITDA$14,167 $7,836 $13,709 $10,805 Adjusted EBITDA$2,842 $14,785 $1,129 $15,364 
Three Months Ended July 31, 20222023 Compared to the Three Months Ended July 31, 2021
2022
Revenues
Total net revenues for the three months ended July 31, 20222023 were $58.9$52.5 million, compared to $49.1$58.9 million for the three months ended July 31, 2021.2022. The 20% increase11% decrease of $9.8$6.4 million was primarily the result of increaseddecreased avocados, oranges and orangeslemons agribusiness revenues, partially offset by decreased lemonincreases in farm management and specialty citrus and other agribusiness revenues, as detailed below ($ in(in thousands):

Agribusiness Revenues for the Three Months Ended July 31, Agribusiness Revenues for the Three Months Ended July 31,
20222021Change 20232022Change
LemonsLemons$40,160 $40,835 $(675)(2)%Lemons$39,057 $40,160 $(1,103)(3)%
AvocadosAvocados12,578 4,073 8,505 209%Avocados3,462 12,578 (9,116)(72)%
OrangesOranges3,736 1,981 1,755 89%Oranges1,290 3,736 (2,446)(65)%
Specialty citrus and other crops1,120 1,065 55 5%
Specialty citrus and otherSpecialty citrus and other1,900 1,120 780 70%
Farm managementFarm management5,383 — 5,383 —%
Agribusiness revenuesAgribusiness revenues$57,594 $47,954 $9,640 20%Agribusiness revenues$51,092 $57,594 $(6,502)(11)%
•Lemons: The decrease in the third quarter of fiscal year 2022 was primarily the result of decreased brokered fruit and other lemon sales, partially offset by increased fresh lemon sales and shipping and handling2023, compared to the same period of fiscal year 2021.2022, was primarily related to decreased volume and lower prices of fresh lemons sold. During the third quarter of fiscal years 20222023 and 2021,2022, fresh lemon sales were $27.8$24.2 million and $24.4$27.8 million, in aggregate, on 1,512,0001,352,000 and 1,144,0001,512,000 cartons of lemons sold at average per carton prices of $18.39$17.92 and $21.34,$18.39, respectively. Lemon revenues in the third quarter of fiscal years 20222023 and 20212022 included shipping and handling of $5.5 million and $6.3 million, and $4.5 million, brokered fruitlemons and other lemon sales of $5.0$8.8 million and $11.2$5.0 million, and lemon by-product sales of $1.1$0.6 million and $0.6$1.1 million, respectively.
•Avocados: The increasedecrease in the third quarter of fiscal year 2023, compared to the same period of fiscal year 2022, was primarily the result of increaseddecreased volume and higherlower prices of avocados sold, compared to the same period ofpartially offset by crop insurance proceeds in fiscal year 2021.2023. The California avocado crop typically experiences alternating years of high and low production due to plant physiology. During the third quarter of fiscal years 2023 and 2022, 2,822,000 and 2021, 5,694,000 and 3,513,000 pounds of avocados were sold at an average per pound price of $0.99 and $2.21, respectively. Avocados agribusiness revenue in the third quarter of fiscal year 2023 included $0.7 million from crop insurance proceeds.
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•Oranges: The decrease in the third quarter of fiscal year 2023, compared to the same period of fiscal year 2022, was primarily the result of decreased volume of oranges sold due to the sale of the Northern Properties in fiscal year 2023. During the third quarter of fiscal years 2023 and $1.16,2022, we sold 71,000 and 209,000 cartons of oranges at an average per carton price of $18.17 and $17.88, respectively.
•Oranges:Specialty citrus and other: The increase in the third quarter of fiscal year 2022 was primarily the result of higher prices, partially offset by decreased volume of oranges sold,2023, compared to the same period of fiscal year 2021. In the third quarter of fiscal years 2022 and 2021, we sold 209,000 and 259,000 40-pound carton equivalents of oranges at an average per carton price of $17.88 and $7.65, respectively.
•Specialty citrus and other crops: The increase in the third quarter of fiscal year 2022, was primarily the result of increased volume and higher prices of specialty citrus sold, compared to the same period of fiscal year 2021.sold. During the third quarter of fiscal years 20222023 and 2021,2022, we sold 61,00070,000 and 45,00061,000 40-pound carton equivalents of specialty citrus at an average per carton price of $18.34$25.88 and $14.04,$18.34, respectively.

•Farm management: Farm management revenues in the third quarter of fiscal year 2023 were $5.4 million, primarily related to the Northern Properties farming, management and operations services. There were no farm management revenues in the third quarter of fiscal year 2022.
Other operations revenue in the third quarter of fiscal years 2023 and 2022 was $1.4 million and 2021 was $1.3 million, and $1.2 million, respectively.




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Costs and Expenses
Our totalTotal costs and expenses in the third quarter of fiscal year 20222023 were $47.9$54.0 million, compared to $45.8$47.9 million in the same period of fiscal year 2021.2022. The 5%13% increase of $2.1$6.1 million was primarily attributablerelated to increases in packing costs, harvestgrowing costs and selling, general and administrative expenses,packing costs, partially offset by decreases in our growing and third-party grower and supplier costs. Costs and expenses associated with our agribusiness division include packing costs harvest costs, growing costs, costs related to the fruit we procure and sell for third-party growers and suppliers and depreciation and amortization expense, asamortization. Agribusiness costs and expenses are detailed below ($ in(in thousands):

 Agribusiness Costs and Expenses for the Three Months Ended July 31,
 20222021Change
Packing costs$12,463 $9,864 $2,599 26%
Harvest costs6,219 3,383 2,836 84%
Growing costs4,965 7,522 (2,557)(34)%
Third-party grower and supplier costs15,644 17,828 (2,184)(12)%
Depreciation and amortization2,172 2,094 78 4%
Agribusiness costs and expenses$41,463 $40,691 $772 2%

 Agribusiness Costs and Expenses for the Three Months Ended July 31,
 20232022Change
Packing costs$13,780 $12,463 $1,317 11%
Harvest costs6,189 6,219 (30)—%
Growing costs10,566 4,965 5,601 113%
Third-party grower and supplier costs14,575 15,644 (1,069)(7)%
Depreciation and amortization1,735 2,172 (437)(20)%
Agribusiness costs and expenses$46,845 $41,463 $5,382 13%
•Packing costs: Packing costs consist primarily 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. In the third quarter of fiscal years 20222023 and 2021,2022, lemon packing costs were $12.0$13.1 million and $9.3$12.0 million, respectively. During the third quarter of fiscal years 20222023 and 2021,2022, we packed and sold 1,512,0001,352,000 and 1,144,0001,512,000 cartons of lemons at average per carton costs of $9.72 and $7.91, respectively. The increase in per carton packing costs was primarily related to increased labor and $8.11, respectively.benefit costs. Additionally, in the third quarter of fiscal years 20222023 and 2021,2022, packing costs included $0.5$0.6 million and $0.6$0.5 million of shipping costs, respectively.
•Harvest costs: Harvest costs increased in the third quarter of fiscal year 2022 primarily as a result of increased volume of lemons and avocados harvested compared2023 were similar to the same period inof fiscal year 2021.2022.
•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 decreaseincrease in the third quarter of fiscal year 2023, compared to the same period in fiscal year 2022, was primarily duerelated to the lease of Finca Santa ClaraNorthern Properties farm management costs which were expensed in Argentinafiscal 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.
•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 in the third quarter of fiscal year 2022 was primarily due to lower prices, partially offset by increased volume of third-party grower fruit sold,2023, compared to the same period of fiscal year 2021.2022, was primarily the result of decreased volume and lower prices of third-party grower fruit sold. Of the 1,512,0001,352,000 and 1,144,0001,512,000 cartons of lemons packed and sold during the third quarter of fiscal years 2023 and 2022, 594,000 (44%) and 2021, 695,000 (46%) and 655,000 (57%), respectively, were procured from third-party growers at average per carton prices of $12.42$10.78 and $14.88, respectively. Additionally, in$12.42. In the third quarter of fiscal years 20222023 and 2021,2022, we incurred $7.0$8.2 million and $8.1$7.0 million, respectively, of costs for purchased, packed fruit for resale.
•Depreciation and amortization: Depreciation and amortization expense for the third quarter of fiscal years 2023 and 2022 was $1.7 million and 2021 was $2.2 million, and $2.1 million, respectively. The decrease in the third quarter of fiscal year 2023, compared to the same period of fiscal year 2022, was primarily related to the Northern Properties sale in fiscal year 2023.
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Other operations expenses were $1.1$1.0 million and $1.0$1.1 million in the third quarter of fiscal years 2023 and 2022, and 2021, respectively.

Loss on disposal of assets, net was $0.2$1.5 million and zero$0.2 million in the third quarter of fiscal years 2023 and 2022, respectively. The increase is primarily related to the loss on disposal of assets in preparation for the Yuma, Arizona fallowing program and 2021, respectively.

other orchard disposals.
Selling, general and administrative costs and expenses were $5.0$4.6 million and $4.0$5.0 million in the third quarter of fiscal years 20222023 and 2021,2022, respectively. The 24% increase8% decrease of $1.0$0.4 million was primarily consisted of the following:result of:

•$0.8 million net decrease in salaries, benefits and incentive compensation;
•Salaries, benefits$0.2 million decrease in selling expenses; and incentive compensation in the third quarter of fiscal year 2022 was $1.0 million higher than the same period of fiscal year 2021.
•Other$0.6 million net increase in other selling, general and administrative expenses, including certain corporate overhead expenses in the third quarter of fiscal year 2022 were $0.1 million higher than the same period of fiscal year 2021.primarily associated with our strategic initiatives.




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Other (Expense) Income

OtherTotal other expense in the third quarter of fiscal year 2022 was comprised primarily of $(0.8) million of net interest expense, partially offset by $0.3 million of equity in earnings of investments. Other income in the third quarter of fiscal year 2021 was comprised primarily of $1.5 million of equity in earnings of investments, partially offset by $(0.4) million of net interest expense.

Income Taxes
We recorded an estimated income tax provision of $3.3$0.1 million and $1.3$0.4 million in the third quarter of fiscal years 2023 and 2022, respectively. The decrease of $0.3 million in total other expense was primarily the result of:
•$0.5 million decrease in interest expense as a result of decreased long-term debt; and
•$0.2 million increase in other expense.
Income Taxes
We recorded an estimated income tax benefit (provision) of $0.4 million and 2021$(3.3) million in the third quarter of fiscal years 2023 and 2022 on pre-tax (loss) income of $10.6$(1.6) million and $4.5$10.6 million, respectively. The tax provisionbenefit recorded for the third quarter of fiscal year 20222023 differs from the U.S. federal statutory tax rate of 21.0% due primarily to foreign jurisdictions whichthat are taxed at different rates, state taxes, tax impact of stock-basedexecutive compensation, and nondeductible tax items. Our projected annual effective blended tax rate for fiscal year 2022,2023, excluding discrete items, is approximately 41.3%33.5%.
Net Loss Attributable to Noncontrolling Interest
Net loss attributable to noncontrolling interest represents 10% and 49% of the net loss of PDA and Trapani Fresh, respectively, of the net loss in the third quarter of fiscal years 2023 and 2022, respectively.

Nine Months Ended July 31, 20222023 Compared to the Nine Months Ended July 31, 2021
2022
Revenues
Total net revenues for the nine months ended July 31, 20222023 were $144.9$138.5 million, compared to $132.5$144.9 million for the nine months ended July 31, 2021.2022. The 9% increase4% decrease of $12.4$6.4 million was primarily the result of increaseddecreased avocados, oranges and orangeslemons agribusiness revenues, partially offset by decreased lemonsincreases in farm management and specialty citrus and other crops agribusiness revenues, as detailed below ($ in(in thousands):
    Agribusiness Revenues for the Nine Months Ended July 31,
 20232022Change
Lemons$112,456 $113,463 $(1,007)(1)%
Avocados7,065 16,920 (9,855)(58)%
Oranges3,825 7,226 (3,401)(47)%
Specialty citrus and other4,163 3,437 726 21%
Farm management6,787 — 6,787 —%
Agribusiness revenues$134,296 $141,046 $(6,750)(5)%
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 Agribusiness Revenues for the Nine Months Ended July 31,
 20222021Change
Lemons$113,463 $113,735 $(272)—%
Avocados16,920 6,780 10,140 150%
Oranges7,226 4,476 2,750 61%
Specialty citrus and other crops3,437 4,089 (652)(16)%
Agribusiness revenues$141,046 $129,080 $11,966 9%
•Lemons: The decrease in the first nine months of fiscal year 2022 was primarily the result of decreased brokered fruit and other lemon sales, partially offset by increased fresh lemon and shipping and handling sales2023, compared to the same period of fiscal year 2021.2022, was primarily related to decreased volume and lower prices of fresh lemons sold. During the first nine months of fiscal years 20222023 and 2021,2022, fresh lemon sales were $79.8$75.6 million and $78.1$79.8 million, in aggregate, on 4,271,0004,206,000 and 3,992,0004,271,000 cartons of lemons sold at average per carton prices of $18.68$17.96 and $19.56,$18.68, respectively. Lemon revenues in the first nine months of fiscal years 20222023 and 20212022 included shipping and handling of $17.5 million and $19.0 million, and $15.5 million, brokered fruitlemons and other lemon sales of $11.5$14.8 million and $17.0$11.5 million, respectively, and lemon by-product sales of $3.1 million and $3.1 million, respectively, and included legal settlement proceeds of $1.4 million allocated to lemons in both fiscal years.year 2023.
•Avocados: The increasedecrease in the first nine months of fiscal year 2023, compared to the same period in fiscal year 2022, was primarily the result of increaseddecreased volume and higherlower prices of avocados sold, compared to the same period ofpartially offset by legal settlement proceeds and crop insurance proceeds in fiscal year 2021.2023. The California avocado crop typically experiences alternating years of high and low production due to plant physiology. During the first nine months of fiscal years 2023 and 2022, 3,763,000 and 2021, 7,936,000 and 5,655,000 pounds of avocados were sold at an average per pound price of $1.06 and $2.13, respectively. In addition, avocado revenues included legal settlement proceeds of $2.4 million allocated to avocados and $1.20,crop insurance proceeds of $0.7 million in fiscal year 2023.
•Oranges: The decrease in the first nine months of fiscal year 2023, compared to the same period of fiscal year 2022, was primarily the result of decreased volume due to the sale of the Northern Properties in fiscal year 2023. During the first nine months of fiscal years 2023 and 2022, 223,000 and 590,000 cartons of oranges were sold at an average per carton price of $17.15 and $12.25, respectively.
•Oranges:Specialty citrus and other: The increase in the first nine months of fiscal year 2022 was primarily the result of increased volume and higher prices of oranges sold,2023, compared to the same period of fiscal year 2021. In the first nine months of fiscal years 2022 and 2021, we sold 590,000 and 533,000 40-pound carton equivalents of oranges at an average per carton price of $12.25 and $8.40, respectively.
•Specialty citrus and other crops: The decrease in the first nine months of fiscal year 2022, was primarily the result of lowerhigher prices, partially offset by increaseddecreased volume of specialty citrus sold, compared to the same period of fiscal year 2021.sold. During the first nine months of fiscal years 20222023 and 2021,2022, we sold 366,000165,000 and 289,000366,000 40-pound carton equivalents of specialty citrus at an average per carton price of $9.26$24.70 and $12.40,$9.26, respectively.

•Farm management: Farm management revenues in the first nine months of fiscal year 2023 were $6.8 million, primarily related to the Northern Properties farming, management and operations services. There were no farm management revenues in the first nine months of fiscal year 2022.
Other operations revenue in the first nine months of fiscal years 2023 and 2022 and 2021 was $3.9$4.2 million and $3.5$3.9 million, respectively.
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 The increase in the first nine months of fiscal year 2023, compared to the same period of fiscal year 2022, was primarily related to an increase in leased land revenue.
Costs and Expenses
Our totalTotal costs and expenses in the first nine months of fiscal year 20222023 were $140.9$118.0 million, compared to $132.4$140.9 million in the same period of fiscal year 2021.2022. The 6% increase16% decrease of $8.4$22.9 million was primarily attributablethe result of increased gain on disposal of assets, primarily related to increases in our packing costs, harvest costs and selling, general and administrative expenses,the Northern Properties sale partially offset by decreases in our growing costs. Coststhe loss on disposal of Cadiz Ranch assets, and increased agribusiness costs and expenses. Agribusiness costs and expenses associated with our agribusiness division include packing costs, harvest costs, growing costs, costs related to the fruit we procure and sell for third-party growers and suppliers and depreciation and amortization expense, asare detailed below ($ in(in thousands):

Agribusiness Costs and Expenses for the Nine Months Ended July 31, Agribusiness Costs and Expenses for the Nine Months Ended July 31,
20222021Change 20232022Change
Packing costsPacking costs$36,020 $31,894 $4,126 13%Packing costs$38,952 $36,020 $2,932 8%
Harvest costsHarvest costs17,031 13,826 3,205 23%Harvest costs16,574 17,031 (457)(3)%
Growing costsGrowing costs21,240 22,348 (1,108)(5)%Growing costs24,186 21,240 2,946 14%
Third-party grower and supplier costsThird-party grower and supplier costs39,471 39,412 59 —%Third-party grower and supplier costs40,953 39,471 1,482 4%
Depreciation and amortizationDepreciation and amortization6,544 6,591 (47)(1)%Depreciation and amortization5,610 6,544 (934)(14)%
Agribusiness costs and expensesAgribusiness costs and expenses$120,306 $114,071 $6,235 5%Agribusiness costs and expenses$126,275 $120,306 $5,969 5%

•Packing costs: Packing costs consist primarily 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. In the first nine months of fiscal years 20222023 and 2021,2022, lemon packing costs were $34.2$36.6 million and $29.7$34.2 million, respectively. During the first nine months of fiscal years 20222023 and 2021,2022, we packed and sold 4,271,0004,206,000 and 3,992,0004,271,000 cartons of lemons at average per carton costs of $8.69 and $8.00, respectively. The increase in per carton packing costs was primarily related to increased labor and $7.44, respectively.benefit costs. Additionally, in the first nine months of fiscal years 20222023 and 2021,2022, packing costs included $1.8$2.4 million and $2.2$1.8 million of shipping costs, respectively.
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•Harvest costs: HarvestThe decrease in harvest costs increased in the first nine months of fiscal year 2022 primarily as a result of increased volume of lemons and avocados harvested2023, compared to the same period in fiscal year 2021.2022, was primarily the result of decreased volume of avocados, oranges and specialty citrus harvested, partially offset by increased volume of lemons 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 decreaseincrease in the first nine months of fiscal year 2023, compared to the same period in fiscal year 2022, was primarily duerelated to the lease of Finca Santa ClaraNorthern Properties farm management costs which were expensed in Argentina, partially offset by increases related tofiscal 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.
•Third-party grower and supplier costs: We sell fruit that we grow and fruit that we procure from other growers and suppliers. The cost of procuring fruit from other growers and suppliers is referred to as third-party grower and supplier costs. The increase in the first nine months of fiscal year 2023, compared to the same period of fiscal year 2022, was primarily due tothe result of increased volume, partially offset by lower prices of third-party grower fruit sold, compared to the same period of fiscal year 2021.sold. Of the 4,271,0004,206,000 and 3,992,0004,271,000 cartons of lemons packed and sold during the first nine months of fiscal years 2023 and 2022, 2,224,000 (53%) and 2021, 2,183,000 (51%) and 2,048,000 (51%), respectively, were procured from third-party growers at average per carton prices of $12.81$12.11 and $14.08, respectively.$12.81. Additionally, in the first nine months of fiscal years 20222023 and 2021,2022, we incurred $11.5$14.0 million and $10.6$11.5 million, respectively, of costs for purchased, packed fruit for resale.
•Depreciation and amortization: Depreciation and amortization expense for the first nine months of fiscal years 2023 and 2022 was $5.6 million and 2021 was $6.5 million, and $6.6 million, respectively.

 The decrease in the first nine months of fiscal year 2023, compared to the same period of fiscal year 2022, was primarily related to the Northern Properties sale in fiscal year 2023.
Other operations expenses were $3.3 million and $3.2 million in the first nine months of fiscal years 20222023 and 2021, respectively.2022.

Loss(Gain) loss on disposal of assets, net was $0.5$(29.2) million and zero$0.5 million in the first nine months of fiscal years 2023 and 2022, and 2021, respectively. The change is primarily related to the gain on the sale of the Northern Properties, partially offset by the loss on disposal of Cadiz Ranch assets in fiscal year 2023.

Gain on legal settlement was $2.3 million in the first nine months of fiscal year 2023 due to the Settlement Agreement related to the Thomas fire.
Selling, general and administrative costs and expenses were $19.9 million and $16.8 million in the first nine months of fiscal yearyears 2023 and 2022, compared to $15.2respectively. The 19% increase of $3.2 million was primarily the result of:
•$1.8 million net increase in salaries, benefits and incentive compensation;
•$0.2 million increase in selling expenses; and
•$1.2 million net increase in other selling, general and administrative expenses, primarily associated with our strategic initiatives.
Other (Expense) Income
Total other expense was $2.3 million and $0.4 million in the first nine months of fiscal year 2021.years 2023 and 2022, respectively. The 11% increase of $1.6$1.9 million in total other expense was primarily consisted of the following:result of:

•$0.8 million decrease of interest expense as a result of decreased long-term debt; and
•Salaries, benefits and incentive compensation for the first nine months$2.7 million increase of fiscal year 2022 were $1.1 million higher than the same periodother expense; primarily as a result of fiscal year 2021.
•Named executive officer severance for the first nine months of fiscal year 2022 was $0.8 million compared to zero in the same period of fiscal year 2021.
•Other selling, general and administrative expenses, including certain corporate overhead expenses, for the first nine months of fiscal year 2022 were $0.3 million lower than the same period of fiscal year 2021.



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Other (Expense) Income

Other expense in the first nine months of fiscal year 2022 was comprised primarily of $(1.2) million of net interest expense, partially offset by $0.7 million of equity in earnings of investments. Other income in the first nine months of fiscal year 2021 was comprised primarily of $2.5 million of equity in earnings of investments, partially offset by $(0.8) million of net interest expense.

pension settlement costs
Income Taxes

We recorded an estimated income tax provision of $1.4$5.5 million and $1.1$1.4 million in the first nine months of fiscal years 20222023 and 20212022 on pre-tax income of $3.7$18.2 million and $1.9$3.7 million, respectively. The tax provision recorded for the first nine months of fiscal year 20222023 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-basedexecutive compensation, and nondeductible tax items. Our projected annual effective blended tax rate for fiscal year 2022,2023, excluding discrete items, is approximately 41.3%33.5%.
Net Loss Attributable to Noncontrolling Interest
Net loss attributable to noncontrolling interest represents 10% and 49% of the net loss of PDA and Trapani Fresh, respectively.respectively, of the net loss in the first nine months of fiscal years 2023 and 2022.
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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 1819 - Segment Information of the notes to consolidated financial statements included in this Quarterly Report on Form 10-Q for additional information regarding our operating segments.

Three Months Ended July 31, 20222023, Compared to the Three Months Ended July 31, 20212022
The following table shows the segment results of operations for the three months ended July 31, 2023 (in thousands):
 Fresh
Lemons		Lemon
Packing		Eliminations
Avocados		Other
Agribusiness		Total
Agribusiness		Corporate
and Other		Total
Revenues from external customers$33,585 $5,472 $— $3,462 $8,573 $51,092 $1,405 $52,497 
Intersegment revenue— 9,684 (9,684)— — — — — 
Total net revenues33,585 15,156 (9,684)3,462 8,573 51,092 1,405 52,497 
Costs and expenses30,758 13,140 (9,684)3,030 7,866 45,110 6,917 52,027 
Depreciation and amortization— — — — — 1,735 284 2,019 
Operating (loss) income$2,827 $2,016 $— $432 $707 $4,247 $(5,796)$(1,549)
The following table shows the segment results of operations for the three months ended July 31, 2022 (in thousands):

 Fresh
Lemons		Lemon
Packing		Eliminations
Avocados		Other
Agribusiness		Total
Agribusiness		Corporate
and Other		Total
Revenues from external customers$33,823 $6,337 $— $12,578 $4,856 $57,594 $1,329 $58,923 
Intersegment revenue— 9,696 (9,696)— — — — — 
Total net revenues33,823 16,033 (9,696)12,578 4,856 57,594 1,329 58,923 
Costs and expenses32,600 11,953 (9,696)3,154 1,280 39,291 6,103 45,394 
Depreciation and amortization— — — — — 2,172 297 2,469 
Operating income (loss)$1,223 $4,080 $— $9,424 $3,576 $16,131 $(5,071)$11,060 

The following table shows the segment results of operations for the three months ended July 31, 2021 (in thousands):

 Fresh
Lemons		Lemon
Packing		Eliminations 
Avocados		Other
Agribusiness		Total
Agribusiness		Corporate
and Other		Total
Revenues from external customers$36,295 $4,540 $— $4,073 $3,046 $47,954 $1,171 $49,125 
Intersegment revenue— 7,192 (7,192)— — — — — 
Total net revenues36,295 11,732 (7,192)4,073 3,046 47,954 1,171 49,125 
Costs and expenses31,846 9,279 (7,192)2,708 1,956 38,597 4,717 43,314 
Depreciation and amortization— — — — — 2,094 343 2,437 
Operating income (loss)$4,449 $2,453 $— $1,365 $1,090 $7,263 $(3,889)$3,374 

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, and brokered fruitlemons and other lemon revenue such as purchased, packed fruit for resale.revenue. For the third quarter of fiscal years 20222023 and 2021,2022, our fresh lemons segment total net revenues were $33.6 million and $33.8 million, respectively. The 1% decrease of $0.2 million was primarily the result of:
•Fresh lemon sales decreased $3.6 million;
•Lemon by-products sales decreased $0.5 million; and
•Brokered lemons and other lemon sales increased $3.8 million.
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revenues were $33.8 million and $36.3 million, respectively. The 7% decrease of $2.5 million was primarily due to a net decrease in brokered fruit and other lemon sales of $6.3 million, partially offset by increased fresh lemon sales of $3.4 million.

Costs and expenses associated with our fresh lemons segment include growing costs, harvest costs, and costscost of lemons we procure from third-party growers and suppliers.suppliers, transportation costs and packing service charges incurred from the lemon packing segment to pack lemons for sale. For the third quarter of fiscal years 20222023 and 2021,2022, our fresh lemons segment costs and expenses were $32.6$30.8 million and $31.8$32.6 million, respectively. The 2% increase6% decrease of $0.8$1.8 million was primarily consisted of the following:  

result of:
•Harvest costs for the third quarter of fiscal year 2022 were $2.2 million higher than the same period of fiscal year 2021.increased $1.0 million;
•Growing costs for the third quarter of fiscal year 2022 were $1.7 million lower than the same period of fiscal year 2021.increased $0.6 million;
•Third-party grower and supplier costs for the third quarter of fiscal year 2022 were $2.3 million lower than the same period of fiscal year 2021.decreased $3.5 million; and
•IntersegmentTransportation costs and expenses for the third quarter of fiscal year 2022 were $2.5 million higher than the same period of fiscal year 2021.

increased $0.1 million.
Lemon Packing
Lemon packing segment revenue is comprised of packing revenue, intersegment packing revenue and shipping and handling revenue. For the third quarter of fiscal years 20222023 and 2021,2022, our lemon packing segment total net revenues were $16.0$15.2 million and $11.7$16.0 million, respectively. The 37% increase5% decrease of $4.3$0.8 million was primarily due to increasedthe result of decreased volume of lemons packed and sold.

packed.
Costs and expenses associated with our lemon packing segment consist of the costcosts to pack lemons for sale such as labor and benefits, cardboard cartons, fruit treatments, packing and shipping supplies and facility operating costs. For the third quarter of fiscal years 20222023 and 2021,2022, our lemon packing costs and expenses were $12.0$13.1 million and $9.3$12.0 million, respectively. The 29%10% increase of $2.7$1.1 million was primarily due tothe result of increased volume of lemons packedlabor and sold.
benefit costs.
For the third quarter of fiscal years 20222023 and 2021,2022, lemon packing segment operating income per carton sold was $1.49 and $2.70, and $2.14, respectively.
In the third quarter of fiscal years 20222023 and 2021,2022, the lemon packing segment included $9.7 million and $7.2 million, respectively, of intersegment revenues 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
For the third quarter of fiscal yearyears 2023 and 2022, and 2021, our avocados segment had revenues of $3.5 million and $12.6 million, and $4.1 million, respectively.
Costs and expenses associated with our avocados segment include growing and harvest costs. For the third quarter of fiscal years 20222023 and 2021,2022, our avocados segment costs and expenses were $3.2$3.0 million and $2.7$3.2 million, respectively. The increasedecrease of $0.4$0.2 million primarily consistedconsists of the following:

•Harvest costs for the third quarter of fiscal year 2022 were $0.8 million higher than the same period of fiscal year 2021.decreased $0.7 million; and
•Growing costs for the third quarter of fiscal year 2022 were $0.4 million lower than the same period of fiscal year 2021.

increased $0.5 million.
Other Agribusiness
For the third quarter of fiscal years 20222023 and 2021,2022, our other agribusiness segment total net revenues were $4.9$8.6 million and $3.0$4.9 million, respectively. The 59%77% increase of $1.8$3.7 million was primarily consisted of the following:
result of:
•Orange revenues decreased $2.4 million;
•Specialty citrus and other revenues increased $0.8 million; and
•Farm management revenues for the third quarter of fiscal year 20222023 were $1.8 million higher than the same period of fiscal year 2021.
•Specialty citrus and other crops$5.4 million. There were no farm management revenues forin the third quarter of fiscal year 2022 were $0.1 million higher than the same period of fiscal year 2021.

2022.
Costs and expenses associated with our other agribusiness segment include growing costs, harvest costs and purchased fruit costs. For the third quarter of fiscal years 20222023 and 2021,2022, our other agribusiness costs and expenses were $1.3$7.9 million and $2.0$1.3 million, respectively. The 35% decrease515% increase of $0.7$6.6 million was primarily consisted of the following: 

36

result of:
•Harvest costs for the third quarter of fiscal year 2022 were $0.2 million lower than the same period of fiscal year 2021.decreased $0.4 million;
•Growing costs for the third quarter of fiscal year 2022 were $0.5 million lower than the same period of fiscal year 2021.increased $4.5 million; and
•Purchased fruit costs for the third quarter of fiscal year 2022 were $0.1 million higher than the same period of fiscal year 2021.increased $2.5 million.
38

Total agribusiness depreciation and amortization expenses for the third quarter of fiscal yearyears 2023 and 2022 were $0.1$1.7 million higher than the same period of fiscal year 2021.

and $2.2 million, respectively.
Corporate and Other
Our corporate and other operations had revenues of $1.3$1.4 million and $1.2$1.3 million for the third quarter of fiscal years 2023 and 2022, and 2021, respectively.
Costs and expenses in our corporate and other operations for the third quarter of fiscal years 20222023 and 20212022 were approximately $6.1$6.9 million and $4.7$6.1 million, respectively, and include selling, general and administrative costs and expenses not allocated to the operating segments.and loss on disposal of assets, net. Depreciation and amortization expenses for the third quarter of fiscal years 20222023 and 20212022 were similar at $0.3 million.

Nine Months Ended July 31, 20222023, Compared to the Nine Months Ended July 31, 20212022
The following table shows the segment results of operations for the nine months ended July 31, 2023 (in thousands):
 Fresh
Lemons		Lemon
Packing		Eliminations
Avocados		Other
Agribusiness		Total
Agribusiness		Corporate
and Other		Total
Revenues from external customers$94,913 $17,543 $— $7,065 $14,775 $134,296 $4,172 $138,468 
Intersegment revenue— 27,356 (27,356)— — — — — 
Total net revenues94,913 44,899 (27,356)7,065 14,775 134,296 4,172 138,468 
Costs and expenses (gain)94,035 36,568 (27,356)4,053 13,365 120,665 (9,180)111,485 
Depreciation and amortization— — — — — 5,610 900 6,510 
Operating income$878 $8,331 $— $3,012 $1,410 $8,021 $12,452 $20,473 
The following table shows the segment results of operations for the nine months ended July 31, 2022 (in thousands):

 Fresh
Lemons		Lemon
Packing		Eliminations
Avocados		Other
Agribusiness		Total
Agribusiness		Corporate
and Other		Total
Revenues from external customers$94,415 $19,048 $— $16,920 $10,663 $141,046 $3,901 $144,947 
Intersegment revenue— 25,658 (25,658)— — — — — 
Total net revenues94,415 44,706 (25,658)16,920 10,663 141,046 3,901 144,947 
Costs and expenses91,983 34,171 (25,658)5,548 7,718 113,762 19,665 133,427 
Depreciation and amortization— — — — — 6,544 888 7,432 
Operating income (loss)$2,432 $10,535 $— $11,372 $2,945 $20,740 $(16,652)$4,088 

The following table shows the segment results of operations for the nine months ended July 31, 2021 (in thousands):

 Fresh
Lemons		Lemon
Packing		Eliminations 
Avocados		Other
Agribusiness		Total
Agribusiness		Corporate
and Other		Total
Revenues from external customers$98,195 $15,540 $— $6,780 $8,565 $129,080 $3,452 $132,532 
Intersegment revenue— 23,159 (23,159)— — — — — 
Total net revenues98,195 38,699 (23,159)6,780 8,565 129,080 3,452 132,532 
Costs and expenses89,982 29,684 (23,159)4,141 6,832 107,480 17,444 124,924 
Depreciation and amortization— — — — — 6,591 899 7,490 
Operating income (loss)$8,213 $9,015 $— $2,639 $1,733 $15,009 $(14,891)$118 

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, and brokered fruitlemons and other lemon revenue such as purchased, packed fruit for resale.revenue. For the first nine months of fiscal years 20222023 and 2021,2022, our fresh lemons segment total net revenues were $94.4$94.9 million and $98.2$94.4 million, respectively. The 4% decrease1% increase of $3.8$0.5 million was primarily due to a decrease in brokered fruitthe result of:
•Fresh lemon sales decreased $4.2 million;
•Brokered lemons and other lemon sales of $5.5 million, partially offset by increased fresh lemon sales of $1.7 million.$3.3 million; and

•Legal settlement proceeds allocated to fresh lemons for the first nine months of fiscal year 2023 was $1.4 million.
Costs and expenses associated with our fresh lemons segment include growing costs, harvest costs, and costscost of lemons we procure from third-party growers and suppliers.suppliers, transportation costs and packing service charges incurred from the lemon packing segment to pack lemons for sale. For the first nine months of fiscal years 20222023 and 2021,2022, our fresh lemons segment costs and expenses were $92.0$94.0 million and $90.0$92.0 million, respectively. The 2% increase of $2.0 million was primarily consisted of the following:  

result of:
•Harvest costs for the first nine months of fiscal year 2022 were $2.6 million higher than the same period of fiscal year 2021.increased $1.7 million;
•Growing costs for the first nine months of fiscal year 2022 were $2.0 million lower than the same period of fiscal year 2021.increased $1.8 million;
37

•Third-party grower and supplier costs for the first nine months of fiscal year 2022 were $0.7 million lower than the same period of fiscal year 2021.decreased $3.6 million;
•Transportation costs for the first nine months of fiscal year 2022 were $0.4 million lower than the same period of fiscal year 2021.increased $0.5 million; and
•Intersegment costs and expenses for the first nine months of fiscal year 2022 were $2.5 million higher than the same period of fiscal year 2021.increased $1.7 million.
39

Lemon Packing
Lemon packing segment revenue is comprised of packing revenue, intersegment packing revenue and shipping and handling revenue. For the first nine months of fiscal years 20222023 and 2021,2022, our lemon packing segment total net revenues were $44.9 million and $44.7 million, and $38.7 million, respectively. The 16% increase of $6.0 million was primarily due to increased volume of lemons packed and sold.

Costs and expenses associated with our lemon packing segment consist of the costcosts to pack lemons for sale such as labor and benefits, cardboard cartons, fruit treatments, packing and shipping supplies and facility operating costs. For the first nine months of fiscal years 20222023 and 2021,2022, our lemon packing costs and expenses were $34.2$36.6 million and $29.7$34.2 million, respectively. The 15%7% increase of $4.5$2.4 million was primarily due tothe result of increased volume of lemons packedlabor and sold.
benefit costs.
For the first nine months of fiscal years 20222023 and 2021,2022, lemon packing segment operating income per carton sold was $1.98 and $2.47, and $2.26, respectively.
In the first nine months of fiscal years 20222023 and 2021,2022, the lemon packing segment included $25.7$27.4 million and $23.2$25.7 million, respectively, of intersegment revenues 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
For the first nine months of fiscal years 20222023 and 2021,2022, our avocados segment had revenues of $7.1 million and $16.9 million, and $6.8 million, respectively.
Costs and expenses associated with our avocados segment include growing and harvest costs. For the first nine months of fiscal years 20222023 and 2021,2022, our avocados segment costs and expenses were $5.5$4.1 million and $4.1$5.5 million, respectively. The increasedecrease of $1.4 million primarily consisted of the following:

•Harvest costs for the first nine months of fiscal year 2022 were $1.0 million higher than the same period of fiscal year 2021.decreased $0.9 million; and
•Growing costs for the first nine months of fiscal year 2022 were $0.4 million higher than the same period of fiscal year 2021.

decreased $0.6 million.
Other Agribusiness
For the first nine months of fiscal years 20222023 and 2021,2022, our other agribusiness segment total net revenues were $10.7$14.8 million and $8.6$10.7 million, respectively. The 24%39% increase of $2.1$4.1 million was primarily consisted of the following:
result of:
•Orange revenues decreased $3.4 million;
•Specialty citrus and other revenues increased $0.7 million; and
•Farm management revenues for the first nine months of fiscal year 20222023 were $2.8 million higher than the same period of fiscal year 2021.
•Specialty citrus and other crops$6.8 million. There were no farm management revenues forin the first nine months of fiscal year 2022 were $0.7 million lower than the same period of fiscal year 2021.

2022.
Costs and expenses associated with our other agribusiness segment include growing costs, harvest costs and purchased fruit costs. For the first nine months of fiscal years 20222023 and 2021,2022, our other agribusiness costs and expenses were $7.7$13.4 million and $6.8$7.7 million, respectively. The 13%73% increase of $0.9$5.6 million was primarily consisted of the following: 

result of:
•Harvest costs for the first nine months of fiscal year 2022 were $0.4 million lower than the same period of fiscal year 2021.decreased $1.2 million;
•Growing costs for the first nine months of fiscal year 2022 were $0.5 million higher than the same period of fiscal year 2021.increased $1.7 million; and
•Purchased fruit costs for the first nine months of fiscal year 2022 were $0.8 million higher than the same period of fiscal year 2021.increased $5.1 million.

38

Total agribusiness depreciation and amortization expenses for the first nine months of fiscal yearyears 2023 and 2022 were similar to the same period of fiscal year 2021.

$5.6 million and $6.5 million, respectively.
Corporate and Other
Our corporate and other operations had revenues of $3.9$4.2 million and $3.5$3.9 million for the first nine months of fiscal years 2023 and 2022, and 2021, respectively.
Costs and expenses (gain) in our corporate and other operations for the first nine months of fiscal years 20222023 and 20212022 were approximately $19.7$(9.2) million and $17.4$19.7 million, respectively, and include selling, general and administrative costs and expenses, (gain) loss on disposal of assets, net and gain on legal settlement not allocated to the operating segments. Depreciation and amortization expenses for the first nine months of fiscal years 20222023 and 20212022 were similar at $0.9 million.
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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 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 increasing 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.


39

Results of Operations for the Trailing Twelve Months Ended July 31, 20222023 and 2021

2022
The following table shows the unaudited results of operations (in thousands):

Trailing Twelve Months Ended July 31, Trailing Twelve Months Ended July 31,
20222021 20232022
Net revenues:Net revenues:  Net revenues:  
AgribusinessAgribusiness$173,347 $157,708 Agribusiness$172,531 $173,347 
Other operationsOther operations5,095 4,597 Other operations5,595 5,095 
Total net revenuesTotal net revenues178,442 162,305 Total net revenues178,126 178,442 
Costs and expenses:Costs and expenses:Costs and expenses:
AgribusinessAgribusiness154,727 146,034 Agribusiness166,620 154,727 
Other operationsOther operations4,437 4,297 Other operations4,425 4,437 
Loss on disposal of assets, net612 502 
(Gain) loss on disposal of assets(Gain) loss on disposal of assets(34,202)612 
Gain on legal settlementGain on legal settlement(2,269)— 
Selling, general and administrativeSelling, general and administrative21,028 20,877 Selling, general and administrative24,966 21,028 
Total costs and expensesTotal costs and expenses180,804 171,710 Total costs and expenses159,540 180,804 
Operating loss(2,362)(9,405)
Operating income (loss)Operating income (loss)18,586 (2,362)
Other (expense) income:Other (expense) income:Other (expense) income:
Interest incomeInterest income154 641 Interest income247 154 
Interest expense, net of patronage dividendsInterest expense, net of patronage dividends(1,692)(2,021)Interest expense, net of patronage dividends(1,455)(1,692)
Equity in earnings of investments, netEquity in earnings of investments, net1,413 2,469 Equity in earnings of investments, net1,174 1,413 
Other income, net112 56 
Total other (expense) income(13)1,145 
Loss before income tax benefit(2,375)(8,260)
Income tax benefit3 1,496 
Net loss(2,372)(6,764)
(Income) loss attributable to noncontrolling interest(78)760 
Net loss attributable to Limoneira Company$(2,450)$(6,004)
Other (expense) income, netOther (expense) income, net(3,688)112 
Total other expenseTotal other expense(3,722)(13)
Income (loss) before income tax (provision) benefitIncome (loss) before income tax (provision) benefit14,864 (2,375)
Income tax (provision) benefitIncome tax (provision) benefit(4,975)3 
Net income (loss)Net income (loss)9,889 (2,372)
Loss (income) attributable to noncontrolling interestLoss (income) attributable to noncontrolling interest310 (78)
Net income (loss) attributable to Limoneira CompanyNet income (loss) attributable to Limoneira Company$10,199 $(2,450)
The following analysis should be read in conjunction with the previous section “Results of Operations.”
•Total revenues increased $16.1decreased $0.3 million, inprimarily the twelve months ended July 31, 2022 compared to the twelve months ended July 31, 2021, primarily due to increasedresult of decreased avocados agribusiness revenues, particularly increased avocado sales.partially offset by farm management agribusiness revenues.
•Total costs and expenses decreased $21.3 million, primarily the result of gain on disposal of assets and gain on legal settlement, partially offset by increased $9.1 million in the twelve months ended July 31, 2022 compared to the twelve months ended July 31, 2021, primarily due to increases in our agribusiness costs.costs and selling, general and administrative expenses.
•Total other income decreased $1.2expense increased $3.7 million, inprimarily the twelve months ended July 31, 2022 comparedresult of increased other expense related to the twelve months ended July 31, 2021, primarily due to decreased equity in earnings of investments.pension settlement costs.
•Income tax benefit decreased $1.5provision increased $5.0 million, inprimarily the twelve months ended July 31, 2022 compared to the twelve months ended July 31, 2021, primarily due to the decrease inresult of increased pre-tax lossincome of $5.9$17.2 million.
41

40

Liquidity and Capital Resources
Overview
Our primary sources of liquidity are cash and cash flows generated from our operations and use of our revolving credit facility. 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 consist of purchase obligations, long-term fixed rate and variable rate debt and related interest payments and operating and finance leases and our noncontributory, defined benefit pension plan (“the Plan”). In fiscal year 2021, we decided to terminate the Plan effective December 31, 2021. The liabilities disclosed as of July 31, 2022, reflect an estimate of the additional cost to pay lump sums to a portion of the active and vested terminated participants and purchase annuities for all remaining participants from an insurance company.leases. See Note 10 - Long-Term Debt and Note 1112 - Leases and Note 15 - Retirement Plans to the consolidated financial statements in this Quarterly Report on Form 10-Q for amounts outstanding as of July 31, 2022,2023, related to debt leases and the Plan.leases. Purchase obligations consist of contracts primarily related to packing supplies, and pollination services, 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. 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
For the nine months ended July 31, 2022,2023, net cash provided byused in operating activities was $10.9$12.6 million, compared to net cash provided by operating activities of $16.8$10.9 million for the nine months ended July 31, 2021.2022. The significant components of our cash flows (used in) provided by operating activities were as follows:
•Net income for the nine months ended July 31, 2023 and 2022 and 2021 was $2.3$12.7 million and $0.8$2.3 million, respectively. The components of net income in the nine months ended July 31, 2022,2023, compared to the net income in the same period in fiscal year 20212022 consist of an increase in operating income of $4.0$16.4 million, a decreasean increase in total other incomeexpense of $2.2$1.9 million and an increase in income tax expenseprovision of $0.3$4.2 million.
•Adjustments to reconcile net income to net cash (used in) provided by operating activities:
◦Adjustments provided $11.9used $14.1 million and $8.7provided $11.9 million in the nine months ended July 31, 20222023 and 2021,2022, respectively, primarily duerelated to depreciation and amortization, gain on disposal of assets, stock compensation expense and deferred income taxes.
◦Changes in operating assets and liabilities (used) provided $(3.3)used $11.1 million and $7.3$3.3 million of operating cash in the nine months ended July 31, 20222023 and 2021,2022, respectively, primarily duerelated to accounts receivables/other from related parties, cultural costs, prepaid expenses and expenses/other current assets, accounts payable/growers and suppliers payable and accrued liabilities and liabilities/payables to related parties.

Cash Flows from Investing Activities
For the nine months ended July 31, 2023 and 2022, net cash provided by (used in) investing activities was $92.4 million and 2021,$(5.3) million, respectively.
•The $92.4 million of cash provided by investing activities during the nine months ended July 31, 2023 was comprised primarily of net proceeds from sales of assets of $98.5 million, net proceeds from the sale of real estate development assets of $2.6 million, partially offset by capital expenditures of $9.0 million, primarily related to orchard and vineyard development.
•The $5.3 million of cash used in investing activities was $5.3 million and $8.7 million, respectively.
•Capital expenditures were $7.7 million induring the nine months ended July 31, 2022 was comprised primarily of $7.3capital expenditures of $7.7 million for property, plant and equipment primarily related to orchard development and $0.4 million for real estate development projects.
•Capital expenditures were $8.3 million in the nine months ended July 31, 2021, comprised of $8.0 million for property, plant and equipment primarily related to orchard and vineyard development and $0.3investments in mutual water companies and water rights of $0.5 million, for real estate development projects.





partially offset by collection of note receivable of $2.8 million.
4142

Cash Flows from Financing Activities
For the nine months ended July 31, 20222023 and 2021,2022, net cash used in financing activities was $4.8$69.6 million and $7.8$4.8 million, respectively.
•The $69.6 million of cash used in financing activities during the nine months ended July 31, 2023 was comprised primarily of net repayments of long-term debt of $64.9 million and common and preferred stock dividends of $4.4 million.
•The $4.8 million of cash used in financing activities during the nine months ended July 31, 2022 was comprised primarily comprised of common and preferred dividends in aggregate, of $4.4 million and the exchange of common stock of $1.1 million, andpartially offset by proceeds from equipment financings of $1.0 million.
•The $7.8 million of cash used in financing activities during the nine months ended July 31, 2021 was primarily comprised of net repayments of long-term debt in the amount of $2.8 million and common and preferred dividends, in aggregate, of $4.4 million.

Transactions Affecting Liquidity and Capital Resources

Credit Facilities and Long-Term Debt

We finance our working capital and other liquidity requirements primarily through cash from operations and from our AgWest Farm Credit West Credit Facility, which includes the MLA, SupplementsMaster Loan Agreement (the “MLA”) and Revolving Equity Line of Credit (the "RELOC").Supplements. In addition, we have the Farm Credit West term loans, Banco de Chile term loans and COVID-19 loans, and a note payable to the sellers of a land parcel.loans. Additional information regarding these loans and the note payable can be found in Note 10 - Long-Term Debt to the consolidated financial statements included in this Quarterly Report on Form 10-Q.

Debt.
In June 2021, we entered into the MLA with the Lender dated June 1, 2021,AgWest Farm Credit, formerly known as Farm Credit West, PCA (the “Lender”), together with the Supplements and a Fixed Interest Rate Agreement.Agreement, which extends the principal repayment to July 1, 2026. The MLA governs the terms of the Supplements. The MLA amends and restates the previous Master Loan Agreement between us and the Lender, dated June 19, 2017, and extends the principal repayment to July 1, 2026.

The Supplements and RELOC provide aggregate borrowing capacity of $130.0$115.0 million, comprised of $75.0 million under the Revolving Credit Supplement and $40.0 million under the Non-Revolving Credit Supplement and $15.0 million under the RELOC.Supplement. As of July 31, 2022,2023, our outstanding borrowings under the AgWest Farm Credit West Credit Facility and RELOC were $113.0$40.0 million and we had $17.0$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.
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 specified debt service coverage ratio greater than or equal to 1:25:1.0 on an annual basis. We were in compliance with the covenants as of October 31, 2022. In December 2021,September 2023, the Lender modified the covenant to defer measurement at October 31, 20212023 and revert toresume a debt service coverage ratio of 1.25:1.0 measured as of October 31, 2022. We expect to be2024.
In February 2023, the Lender declared an annual cash patronage dividend of 1.25% of average eligible loan balances, and we received $1.4 million in compliance with these covenants inthe second quarter of fiscal year 2022.

2023. In the first quarter of fiscal yearsyear 2022, and 2021, Farm Credit Westthe Lender declared an annual patronage dividend of $1.6 million, and $1.2 million, respectively, which we received in the second quarter of fiscal years 2022 and 2021, respectively.

Treasury Stock

In fiscal year 2021, our Company's Board of Directors approved a share repurchase program authorizing us to repurchase up to $10.0 million of our outstanding shares of common stock through September 2022. No shares have been repurchased under this program.

Dividends

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 were $0.4 million in the nine months ended July 31, 20222023 and 2021, respectively.

2022.
Cash dividends declared in the nine months ended July 31, 2023 and 2022 and 2021 were $0.23$0.225 per common share and such dividends paid were $4.0 million in the nine months ended July 31, 20222023 and 2021.

42

Off-Balance Sheet Arrangements
As discussed in Note 7 – Real Estate Development and Note 8 – Equity in Investments of the notes to consolidated financial statements included in our fiscal year 2021 Annual Report on Form 10-K, we have investments in joint ventures and partnerships that are accounted for using the equity method of accounting.

2022.
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 become available in future periods. During the nine months ended July 31, 2022,2023, our critical accounting policies and estimates have not changed since the filing of our Annual Report on Form 10-K as of October 31, 2021.2022. 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 on Form 10-Q for information concerning recent accounting pronouncements.
43

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, 20212022, as filed with the SEC on January 10,December 22, 2022.
Item 4. Controls and Procedures
Disclosure Controls and Procedures. As of July 31, 2022,2023, we evaluated,carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our "disclosure“disclosure controls and procedures,"” as such term is defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act").Act. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this Quarterly Report on Form 10-Q.Report.
Changes in Internal Control over Financial Reporting. There have been no materialsignificant changes in our internal control over financial reporting during the period covered by this Quarterly Report on Form 10-Qquarter ended July 31, 2023, or, to our knowledge, in other factors that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on the Effectiveness of Controls. Control systems, no matter how well conceived and operated, are designed to provide a reasonable, but not an absolute, level of assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within ourthe Company have been detected. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.





44

PART II. OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, we are a party to various lawsuits, arbitrations or mediations that arise in the ordinary course of business. The disclosure called for by Part II, Item 1 regarding our legal proceedings is incorporated by reference herein from Part I, Item 1 Note 1617 - Commitments and Contingencies of the notesNotes to the consolidated financial statementsConsolidated Financial Statements in this Quarterly Report on Form 10-Q for the quarter ended July 31, 2022.
Report.
Item 1A. Risk Factors
There hashave been no material changes in the disclosures discussed in the section entitled “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended October 31, 2021,2022, as filed with the SEC on January 10,December 22, 2022.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

None
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
None.
45

Item 6. Exhibits
Exhibit
Number		Exhibit
3.1
Restated Certificate of Incorporation of Limoneira Company, dated July 5, 1990 (Incorporated by reference to ExhibitExhibit 3.1 to the Company’s Registration Statement on Form 10, and amendments thereto, declared effective April 13, 2010 (File No. 000-53885))
3.2
Certificate of Merger of Limoneira Company and The Samuel Edwards Associates into Limoneira Company, dated October 31, 1990 (Incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement on Form 10, and amendments thereto, declared effective April 13, 2010 (File No. 000-53885))
3.3
Certificate of Merger of McKevett Corporation into Limoneira Company dated December 31, 1994 (Incorporated by reference to Exhibit 3.3 to the Company’s Registration Statement on Form 10, and amendments thereto, declared effective April 13, 2010 (File No. 000-53885))
3.4
Agreement of Merger Between Ronald Michaelis Ranches, Inc. and Limoneira Company, dated June 24, 1997 (Incorporated by reference to ExhibitExhibit 3.6 to the Company’s Registration Statement on Form 10, and amendments thereto, declared effective April 13, 2010 (File No. 000-53885))
3.53.3
Certificate of Amendment of Certificate of Incorporation of Limoneira Company, dated April 22, 2003 (Incorporated by reference to ExhibitExhibit 3.7 to the Company’s Registration Statement on Form 10, and amendments thereto, declared effective April 13, 2010 (File No. 000-53885))
3.63.4
Certificate of Amendment of Certificate of Incorporation of Limoneira Company, dated March 24, 2010 (Incorporated by reference to ExhibitExhibit 3.9 to the Company’s Registration Statement on Form 10, and amendments thereto, declared effective April 13, 2010 (File No. 000-53885))
3.73.5
Certificate of Amendment of Certificate of Incorporation of Limoneira Company, dated March 29, 2017 (Incorporated by reference to ExhibitExhibit 3.1 to the Company’s Current Report on Form 8-K, filed March 31, 2017 (File No. 001-34755))
3.83.6
Amended and Restated Bylaws of Limoneira Company (Incorporated by reference to ExhibitExhibit 3.1 to the Company's Current Report on Form 8-K, filed October 27, 2021 (File No. 001-34755))
4.1
Specimen Certificate representing shares of Common Stock, par value $0.01 per share (Incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form 10, and amendments thereto, declared effective April 13, 2010 (File No. 000-53885))
4.2
Rights Agreement dated December 20, 2006 between Limoneira Company and The Bank of New York, as Rights Agent (Incorporated by reference to ExhibitExhibit 4.2 to the Company’s Registration Statement on Form 10, and amendments thereto, declared effective April 13, 2010 (File No. 000-53885))
4.34.2
Certificate of Designation, Preferences and Rights of $8.75 Voting Preferred Stock, $100.00 Par Value, Series B of Limoneira Company, dated May 21, 1997 (Incorporated by reference to ExhibitExhibit 3.4 to the Company’s Registration Statement on Form 10, and amendments thereto, declared effective April 13, 2010 (File No. 000-53885))
4.44.3
Amended Certificate of Designation, Preferences and Rights of $8.75 Voting Preferred Stock, $100.00 Par Value, Series B of Limoneira Company, dated May 21, 1997 (Incorporated by reference to Exhibit 3.5 to the Company’s Registration Statement on Form 10, and amendments thereto, declared effective April 13, 2010 (File No. 000-53885))
4.4
Exhibit 3.5Certificate of Designation, Preferences and Rights of Series A Junior Participating Preferred Stock, $.01 Par Value, of Limoneira Company, dated November 21, 2006 (Incorporated by reference to Exhibit 3.8 to the Company’s Registration Statement on Form 10, and amendments thereto, declared effective April 13, 2010 (File No. 000-53885))
4.5
Certificate of Designation, Preferences and Rights of Series A Junior Participating Preferred Stock, $.01 Par Value, of Limoneira Company, dated November 21, 2006 (Incorporated by reference to Exhibit 3.8 to the Company’s Registration Statement on Form 10, and amendments thereto, declared effective April 13, 2010 (File No. 000-53885))
4.6
Certificate of Designation, Preferences and Rights of 4% Voting Preferred Stock, $100.00 Par Value, Series B-2 of Limoneira Company, dated March 20, 2014 (Incorporated by reference to ExhibitExhibit 3.1 to the Company’s Current Report on Form 8-K, filed March 24, 2014 (File No. 001-34755))
46

Exhibit
Number		Exhibit
10.1
Purchase and Sale Agreement and Joint Escrow Instructions, dated October 10, 2022, by and between Limoneira 2022 Omnibus Incentive Plan, as approved by the Stockholders on March 22, 2022Company and PGIM Real Estate Finance, LLC (Incorporated by referencereference to Exhibit 10.2Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed August 1, 2022 (File No. 001-34755))filed January 31, 2023)
10.2
Form of Time-Based Restricted Share AwardFirst Amendment to Purchase and Sale Agreement for Non-Employee Directors, Pursuantand Joint Escrow Instructions, dated January 17, 2023 (Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed January 31, 2023)
10.3
Limoneira Company 2022 Omnibus Incentive PlanSecond Amendment to Purchase and Sale Agreement and Joint Escrow Instructions, dated January 24, 2023 (Incorporated by reference reference to ExhibitExhibit 10.3 to the Company’s Current Report on Form 8-K, filed August 1, 2022)
10.3
Form of Performance-Based Restricted Share Award Agreement, Pursuant to the Limoneira Company 2022 Omnibus Incentive Plan (Incorporated by reference toExhibit 10.4 to the Company’s Current Report on Form 8-K, filed August 1, 2022)January 31, 2023)
10.4
Form of Time-Based Restricted Share AwardFarm Management Agreement, for Employees, Pursuant to thedated January 31, 2023, by and between Capital Agricultural Property Services, Inc. and Limoneira Company 2022 Omnibus Incentive Plan (Incorporated by reference to Exhibit 10.5reference to Exhibit 10.6 to the Company’s CurrentQuarterly Report on Form 8-K,10-Q, filed March 9, 2023)
10.5
August 1, 2022)Grower Packing & Marketing Agreement, dated as of January 31, 2023, by and between Limoneira Company and PAI Centurion Citrus, LLC (Incorporated by reference to Exhibit 10.7 to the Company’s Quarterly Report on Form 10-Q, filed March 9, 2023)
31.1*
Certification of the Principal Executive Officer pursuant to Exchange Act Rule 13a-14(a) and 15d-14(a)
31.2*
Certification of the Principal Financial Officer pursuant to Exchange Act Rule 13a-14(a) and 15d-14(a)
32.1*
Certification of the Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2*
Certification of the Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*101*The following information from the Company's Quarterly Report on Form 10-Q for the quarter ended July 31, 2023 formatted in Inline XBRL Instance Document
101.SCH*XBRL Taxonomy Extension Schema Document
101.CAL*XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*XBRL Taxonomy Extension Label Linkbase Document
101.PRE*XBRL Taxonomy Extension Presentation Linkbase Document(Extensible Business Reporting Language) includes: (i) the Consolidated Balance Sheets (Unaudited), (ii) the Consolidated Statements of Operations (Unaudited), (iii) the Consolidated Statements of Comprehensive (Loss) Income (Unaudited), (iv) the Consolidated Statements of Stockholders' Equity and Temporary Equity (Unaudited), (v) the Consolidated Statements of Cash Flows (Unaudited), and (vi) the Notes to Consolidated Financial Statements (Unaudited)
104The cover page for the Company's Quarterly Report on Form 10-Q for the quarter ended July 31, 20222023 has been formatted in Inline XBRL
*Filed or furnished herewith,
In accordance with Item 601(b)(32)(ii) of Regulation S-K and SEC Release Nos. 33-8238 and 34-47986, Final Rule: Management's Report on Internal Control Over Financial Reporting and Certification of Disclosure in Exchange Act Periodic Reports, the certifications furnished in Exhibits 32.1 and 32.2 hereto are deemed to accompany this Quarterly Report on Form 10-Q and will not be deemed “filed” for purposes of Section 18 of the Exchange Act. Such certifications will not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.


47

LIMONEIRA COMPANY

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 LIMONEIRA COMPANY
   
September 8, 20227, 2023By:
/s/ HAROLD S. EDWARDS
 
  Harold S. Edwards
  Director, President and Chief Executive Officer
  (Principal Executive Officer)
   
September 8, 20227, 2023By:
/s/ MARK PALAMOUNTAIN
 
  Mark Palamountain
  Chief Financial Officer and Treasurer
  (Principal Financial and Accounting Officer)







































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