Start Time: 16:30 January 1, 0000 5:23 PM ET Limoneira Company (NASDAQ:LMNR) Q1 2023 Earnings Conference Call March 09, 2023, 16:30 PM ET Company Participants Harold Edwards - President and CEO Mark Palamountain - CFO John Mills - Managing Partner, ICR Conference Call Participants Eric Larson - Seaport Research Partners Raj Sharma - B. Riley Ben Klieve - Lake Street Capital Markets Vincent Anderson - Stifel Operator Greetings, and welcome to Limoneira’s First Quarter Fiscal Year 2023 Financial Results Confe ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Delaware 77-0260692 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) FOR THE QUARTERLY PERIOD ENDED JANUARY 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission File Number: 001-34755 LIMONEIRA ...

Forward-Looking Statements | --- | --- | |-------|----------------------------------------------------------------------------------------------------------| | | Real Estate Development Project | | | $115 M | | | expected revenue spread out over seven fiscal years, with first proceeds received in fiscal year 2022 | Improve consistency of earnings 8 Core Operating Business Revenue Streams 12 $27 $25 $23 $21 $19 $17 $15 2022 2017 2019 2020 2021 2018 -Average FOB -Cost per Carton *International includes Chile, ...

Limoneira Company (NASDAQ:LMNR) Q4 2022 Earnings Conference Call December 22, 2022 4:30 PM ET Company Participants John Mills - Investor Relations Harold Edwards - President and Chief Executive Officer Mark Palamountain - Chief Financial Officer Conference Call Participants Ben Bienvenu - Stephens Eric Larson - Seaport Research Partners Ben Klieve - Lake Street Capital Markets Operator Greetings and welcome to Limoneira’s Fourth Quarter Fiscal Year 2022 Financial Results Conference Call. At this time, all p ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED OCTOBER 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number: 001-34755 LIMONEIRA COMPANY (Exact name of registrant as specified in its charter) Delaware 77-0260692 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer ...

Limoneira Company (NASDAQ:LMNR) Q3 2022 Earnings Conference Call September 8, 2022 4:30 PM ET Company Participants John Mills - IR, ICR Harold Edwards - President & CEO Mark Palamountain - CFO Conference Call Participants Ben Bienvenu - Stephens Vincent Anderson - Stifel Financial Corp Ben Klieve - Lake Street Capital Markets Eric Larson - Seaport Research Partners Operator Greetings, and welcome to Limoneira’s Third Quarter Fiscal Year 2022 Financial Results Conference Call. At this time, all participants ...

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JULY 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission File Number: 001-34755 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q LIMONEIRA COMPANY (Exact name of registrant as specified in its charter) Delaware 77-0260692 (State or other jurisdiction of incorpor ...

Limoneira Company (NASDAQ:LMNR) Q2 2022 Earnings Conference Call June 7, 2022 4:30 PM ET Company Participants John Mills - IR, ICR Harold Edwards - President & CEO Mark Palamountain - CFO Conference Call Participants Jack Atkins - Stephens Gerry Sweeney - ROTH Capital Ben Klieve - Lake Street Capital Markets Eric Larson - Seaport Research Partners Operator Greetings, and welcome to the Limoneira’s Second Quarter Fiscal Year 2022 Financial Results Conference Call. At this time, all participants are in a list ...

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) The unaudited statements detail the company's financial position, performance, and cash flows for the period ended April 30, 2022 [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets%20%E2%80%93%20April%2030%2C%202022%20and%20October%2031%2C%202021) Total assets slightly decreased to $390.7 million, while increased liabilities led to a decline in stockholders' equity to $180.0 million Consolidated Balance Sheet Highlights (in thousands) | Metric | Oct 31, 2021 (in thousands) | Apr 30, 2022 (in thousands) | Change (in thousands) | | :----- | :-------------------------- | :-------------------------- | :-------------------- | | Total Assets | $392,276 | $390,744 | $(1,532) | | Total Liabilities | $193,031 | $199,958 | $6,927 | | Total Stockholders' Equity | $188,435 | $179,976 | $(8,459) | | Cash | $439 | $960 | $521 | | Accounts Receivable, net | $17,483 | $22,139 | $4,656 | | Current Portion of Long-Term Debt | $2,472 | $3,678 | $1,206 | | Long-Term Debt, less current portion | $130,353 | $135,575 | $5,222 | [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations%20%E2%80%93%20three%20and%20six%20months%20ended%20April%2030%2C%202022%20and%202021) For the six-month period, a 3% revenue increase was offset by a 7% rise in costs, widening the net loss to $5.0 million Consolidated Statements of Operations Highlights (in thousands, except per share amounts) | Metric | 3 Months Ended Apr 30, 2022 | 3 Months Ended Apr 30, 2021 | 6 Months Ended Apr 30, 2022 | 6 Months Ended Apr 30, 2021 | | :----- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Total Net Revenues | $46,750 | $45,132 | $86,024 | $83,407 | | Total Costs and Expenses | $44,164 | $42,748 | $92,996 | $86,663 | | Operating Income (Loss) | $2,586 | $2,384 | $(6,972) | $(3,256) | | Net Income (Loss) | $1,572 | $1,513 | $(5,034) | $(2,403) | | Net Income (Loss) Attributable to Limoneira Company | $1,561 | $1,933 | $(4,957) | $(2,275) | | Basic Net Income (Loss) per Common Share | $0.08 | $0.10 | $(0.30) | $(0.15) | | Diluted Net Income (Loss) per Common Share | $0.08 | $0.10 | $(0.30) | $(0.15) | [Consolidated Statements of Comprehensive Income (Loss)](index=7&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)%20%E2%80%93%20three%20and%20six%20months%20ended%20April%2030%2C%202022%20and%202021) Comprehensive loss widened to $5.8 million for the six-month period, driven primarily by negative foreign currency translation adjustments Consolidated Statements of Comprehensive Income (Loss) Highlights (in thousands) | Metric | 3 Months Ended Apr 30, 2022 | 3 Months Ended Apr 30, 2021 | 6 Months Ended Apr 30, 2022 | 6 Months Ended Apr 30, 2021 | | :----- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net Income (Loss) | $1,572 | $1,513 | $(5,034) | $(2,403) | | Foreign currency translation adjustments | $(1,006) | $577 | $(951) | $1,372 | | Minimum pension liability adjustment | $73 | $134 | $145 | $268 | | Total other comprehensive (loss) income | $(933) | $711 | $(806) | $1,640 | | Comprehensive income (loss) | $639 | $2,224 | $(5,840) | $(763) | [Consolidated Statements of Stockholders' Equity and Temporary Equity](index=8&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Equity%20and%20Temporary%20Equity%20%E2%80%93%20three%20and%20six%20months%20ended%20April%2030%2C%202022%20and%202021) Total stockholders' equity decreased by $8.5 million to $180.0 million, primarily due to the net loss and other comprehensive loss Consolidated Stockholders' Equity Highlights (in thousands) | Metric | Oct 31, 2021 (in thousands) | Apr 30, 2022 (in thousands) | Change (in thousands) | | :----- | :-------------------------- | :-------------------------- | :-------------------- | | Total Stockholders' Equity | $188,435 | $179,976 | $(8,459) | | Retained Earnings | $21,552 | $13,691 | $(7,861) | | Accumulated Other Comprehensive Loss | $(5,733) | $(6,539) | $(806) | | Common Stock Shares Outstanding | 17,685,400 | 17,721,551 | 36,151 | [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20%E2%80%93%20six%20months%20ended%20April%2030%2C%202022%20and%202021) Net cash used in operations was $1.2 million, a significant reversal from the $4.6 million provided in the prior-year period Consolidated Statements of Cash Flows Highlights (in thousands) | Metric | 6 Months Ended Apr 30, 2022 | 6 Months Ended Apr 30, 2021 | Change | | :----- | :-------------------------- | :-------------------------- | :----- | | Net cash (used in) provided by operating activities | $(1,160) | $4,643 | $(5,803) | | Net cash used in investing activities | $(442) | $(5,501) | $5,059 | | Net cash provided by financing activities | $2,326 | $1,908 | $418 | | Net increase in cash | $521 | $1,089 | $(568) | | Cash at end of period | $960 | $1,590 | $(630) | [Notes to Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) These notes provide detailed disclosures on accounting policies, segment information, debt, and other key financial items [1. Organization and Basis of Presentation](index=11&type=section&id=1.%20Organization%20and%20Basis%20of%20Presentation) Limoneira is an agribusiness focused on citrus and avocados, with additional operations in real estate development and rentals - Limoneira Company's core business involves growing citrus (lemons, oranges, specialty citrus) and avocados, along with packing, marketing, and selling these products[27](index=27&type=chunk) - The company terminated its Avocado Marketing Agreement with Calavo Growers, Inc. in February 2022 to pursue new packing and marketing opportunities[29](index=29&type=chunk) [2. Summary of Significant Accounting Policies](index=11&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) This section outlines key accounting policies and highlights the ongoing negative financial impact of the COVID-19 pandemic - The COVID-19 pandemic has negatively impacted the company's sales and profitability since Q2 fiscal year 2020 and is expected to continue affecting future periods, with the full impact remaining uncertain[35](index=35&type=chunk) - The company adopted ASU 2020-06 (Accounting for Convertible Instruments and Contracts in an Entity's Own Equity) effective November 1, 2021, which did not have a material impact on its consolidated financial statements[37](index=37&type=chunk) [3. Concentrations and Geographic Information](index=15&type=section&id=3.%20Concentrations%20and%20Geographic%20Information) The company has diversified revenue streams but relies on two key customers for a significant portion of revenue and third-party growers for lemon supply - Two customers accounted for **13% and 11% of total revenue** for the six months ended April 30, 2022[39](index=39&type=chunk) - Third-party growers supplied **54% of the company's lemon supply** for the six months ended April 30, 2022[40](index=40&type=chunk) - The company leased its 1,200-acre lemon ranch in Argentina (Finca Santa Clara) to FGF Trapani for a fixed sum of $400,000 over 14 months, effective November 1, 2021[42](index=42&type=chunk) [4. Prepaid Expenses and Other Current Assets](index=15&type=section&id=4.%20Prepaid%20Expenses%20and%20Other%20Current%20Assets) Prepaid expenses and other current assets remained stable, with a notable increase in lemon supplier advances offset by a note receivable collection Prepaid Expenses and Other Current Assets (in thousands) | Item | Oct 31, 2021 (in thousands) | Apr 30, 2022 (in thousands) | Change (in thousands) | | :--- | :-------------------------- | :-------------------------- | :-------------------- | | Prepaid supplies and insurance | $2,521 | $3,030 | $509 | | Note receivable and related interest | $2,438 | $0 | $(2,438) | | Lemon supplier advances | $676 | $3,073 | $2,397 | | Total | $10,709 | $10,648 | $(61) | [5. Real Estate Development](index=15&type=section&id=5.%20Real%20Estate%20Development) The company's real estate joint venture continues to close residential unit sales, and proceeds from property sales have been collected - The joint venture Limoneira Lewis Community Builders, LLC (LLCB) has closed sales for **586 residential units** in the East Area I project through April 30, 2022[52](index=52&type=chunk) - The company received full payment of a **$2.35 million promissory note** from the sale of its Centennial property in April 2022, recognizing a deferred gain of $161,000[54](index=54&type=chunk) - The sale of the Sevilla property for **$2.7 million** is expected to close in fiscal year 2022, with an immaterial gain[53](index=53&type=chunk) [6. Equity in Investments](index=18&type=section&id=6.%20Equity%20in%20Investments) Equity in investments remained stable, though net income attributable from the LLCB joint venture decreased significantly Equity in Investments (in thousands) | Investment | Oct 31, 2021 (in thousands) | Apr 30, 2022 (in thousands) | Change (in thousands) | | :--------- | :-------------------------- | :-------------------------- | :-------------------- | | Limoneira Lewis Community Builders, LLC | $60,216 | $60,479 | $263 | | Total Equity in Investments | $64,072 | $64,290 | $218 | LLCB Summarized Financial Information (in thousands) | LLCB Financials | 6 Months Ended Apr 30, 2021 | 6 Months Ended Apr 30, 2022 | Change | | :-------------- | :-------------------------- | :-------------------------- | :----- | | Revenues | $19,827 | $865 | $(18,962) | | Net income attributable to Limoneira Company | $2,005 | $287 | $(1,718) | [7. Goodwill and Intangible Assets, Net](index=18&type=section&id=7.%20Goodwill%20and%20Intangible%20Assets%2C%20Net) Goodwill and intangible assets decreased slightly due to foreign currency adjustments and amortization, with no impairment charges recorded Goodwill and Intangible Assets, Net (in thousands) | Metric | Oct 31, 2021 (in thousands) | Apr 30, 2022 (in thousands) | Change (in thousands) | | :----- | :-------------------------- | :-------------------------- | :-------------------- | | Goodwill | $1,527 | $1,520 | $(7) | | Intangible Assets, Net | $8,329 | $7,873 | $(456) | - Amortization expense for intangible assets totaled **$361,000** for the six months ended April 30, 2022, down from $526,000 in the prior year[63](index=63&type=chunk) [8. Other Assets](index=20&type=section&id=8.%20Other%20Assets) Investments in mutual water companies, which provide rights to water shares, increased during the period Investments in Mutual Water Companies (in thousands) | Item | Oct 31, 2021 (in thousands) | Apr 30, 2022 (in thousands) | Change (in thousands) | | :--- | :-------------------------- | :-------------------------- | :-------------------- | | Investments in Mutual Water Companies | $5,994 | $6,484 | $490 | [9. Accrued Liabilities](index=20&type=section&id=9.%20Accrued%20Liabilities) Accrued liabilities increased slightly, driven by higher compensation and operating expense accruals Accrued Liabilities (in thousands) | Item | Oct 31, 2021 (in thousands) | Apr 30, 2022 (in thousands) | Change (in thousands) | | :--- | :-------------------------- | :-------------------------- | :-------------------- | | Compensation | $2,112 | $2,392 | $280 | | Property taxes | $676 | $14 | $(662) | | Operating expenses | $1,203 | $2,343 | $1,140 | | Total Accrued Liabilities | $6,542 | $6,802 | $260 | [10. Long-Term Debt](index=21&type=section&id=10.%20Long-Term%20Debt) Total long-term debt increased to $139.3 million, with the company expecting to remain in compliance with its debt covenants Long-Term Debt (in thousands) | Debt Type | Oct 31, 2021 (in thousands) | Apr 30, 2022 (in thousands) | Change (in thousands) | | :-------- | :-------------------------- | :-------------------------- | :-------------------- | | Farm Credit West revolving and non-revolving lines of credit | $111,293 | $114,797 | $3,504 | | Farm Credit West revolving equity line of credit | $0 | $4,305 | $4,305 | | Total Long-Term Debt, Net | $132,825 | $139,253 | $6,428 | - The company has an aggregate borrowing capacity of **$130 million** under its Farm Credit West Credit Facility and RELOC, with **$10.9 million available** as of April 30, 2022[70](index=70&type=chunk)[201](index=201&type=chunk) - The company expects to maintain compliance with its debt service coverage ratio covenant of **1.25:1.0**, measured annually as of October 31, 2022[76](index=76&type=chunk)[202](index=202&type=chunk) [11. Leases](index=22&type=section&id=11.%20Leases) The company's lease activities as both lessor and lessee expanded, with increases in lease revenue, assets, and liabilities Total Lease Revenue (in thousands) | Metric | 6 Months Ended Apr 30, 2021 | 6 Months Ended Apr 30, 2022 | Change | | :----- | :-------------------------- | :-------------------------- | :----- | | Total Lease Revenue (Lessor) | $2,281 | $2,572 | $291 | Lease Assets and Liabilities (in thousands) | Lease Item | Oct 31, 2021 | Apr 30, 2022 | Change | | :--------- | :----------- | :----------- | :----- | | Total Lease Assets | $3,183 | $4,213 | $1,030 | | Total Lease Liabilities | $3,269 | $4,198 | $929 | [12. Basic and Diluted Net Income (Loss) per Share](index=26&type=section&id=12.%20Basic%20and%20Diluted%20Net%20Income%20(Loss)%20per%20Share) Net loss per common share doubled to $(0.30) for the six-month period, reflecting the increased net loss attributable to common stock Basic and Diluted Net Income (Loss) per Common Share | Metric | 3 Months Ended Apr 30, 2022 | 3 Months Ended Apr 30, 2021 | 6 Months Ended Apr 30, 2022 | 6 Months Ended Apr 30, 2021 | | :----- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Basic Net Income (Loss) per Common Share | $0.08 | $0.10 | $(0.30) | $(0.15) | | Diluted Net Income (Loss) per Common Share | $0.08 | $0.10 | $(0.30) | $(0.15) | [13. Related Party Transactions](index=27&type=section&id=13.%20Related%20Party%20Transactions) The company engages in transactions with related parties, including joint ventures, and terminated its relationship with Calavo Growers - Calavo Growers, Inc. is **no longer considered a related party** as of February 2022[94](index=94&type=chunk) - The company has a new lease agreement with FGF Trapani for its Finca Santa Clara lemon ranch in Argentina, generating rental revenue[94](index=94&type=chunk) [14. Income Taxes](index=28&type=section&id=14.%20Income%20Taxes) The company recorded a $1.9 million income tax benefit for the six-month period, with an effective tax rate higher than the federal statutory rate - The effective tax rate for the six months ended April 30, 2022, exceeded the **21% federal statutory rate** due to foreign taxes, state taxes, stock-based compensation, and nondeductible items[95](index=95&type=chunk) Income Tax (Expense) Benefit (in thousands) | Metric | 6 Months Ended Apr 30, 2022 | 6 Months Ended Apr 30, 2021 | | :----- | :-------------------------- | :-------------------------- | | Income tax (expense) benefit | $1,928 | $213 | [15. Retirement Plans](index=28&type=section&id=15.%20Retirement%20Plans) The company terminated its defined benefit pension plan at the end of 2021, though net periodic benefit costs increased year-over-year - The Limoneira Company Retirement Plan, a defined benefit pension plan, was **terminated effective December 31, 2021**[96](index=96&type=chunk) Net Periodic Pension Cost (in thousands) | Metric | 6 Months Ended Apr 30, 2022 | 6 Months Ended Apr 30, 2021 | Change | | :----- | :-------------------------- | :-------------------------- | :----- | | Net periodic benefit cost | $585 | $331 | $254 | [16. Commitments and Contingencies](index=30&type=section&id=16.%20Commitments%20and%20Contingencies) The company is involved in ordinary course litigation, including a notable lawsuit against Southern California Edison related to the Thomas Fire - The company is a party to a lawsuit against Southern California Edison for unspecified damages from the Thomas Fire in fiscal year 2018, believing its claim is valid[102](index=102&type=chunk) [17. Stock-based Compensation and Treasury Stock](index=30&type=section&id=17.%20Stock-based%20Compensation%20and%20Treasury%20Stock) The company manages stock-based compensation programs and has an authorized but unused share repurchase program - **No Performance Awards were granted** for fiscal year 2021 due to the financial performance and other criteria not being met[104](index=104&type=chunk) - The company granted **70,000 shares** of common stock to key executives in December 2021, with 15,000 shares forfeited in February 2022[105](index=105&type=chunk) - A **$10 million share repurchase program** was approved in fiscal year 2021, but no shares have been repurchased under this program as of April 30, 2022[109](index=109&type=chunk)[204](index=204&type=chunk) [18. Segment Information](index=32&type=section&id=18.%20Segment%20Information) Agribusiness revenue increased to $83.5 million for the six-month period, but operating income declined significantly to $4.6 million - The company's agribusiness division comprises four reportable segments: fresh lemons, lemon packing, avocados, and other agribusiness (oranges, specialty citrus, and other crops)[110](index=110&type=chunk) Agribusiness Segment Performance (in thousands) | Metric | 6 Months Ended Apr 30, 2022 | 6 Months Ended Apr 30, 2021 | Change | | :----- | :-------------------------- | :-------------------------- | :----- | | Agribusiness Revenues from external customers | $83,452 | $81,126 | $2,326 | | Agribusiness Operating Income (Loss) | $4,609 | $7,746 | $(3,137) | [19. Subsequent Events](index=34&type=section&id=19.%20Subsequent%20Events) No material subsequent events requiring disclosure were identified after the reporting period - No material subsequent events requiring disclosure occurred between April 30, 2022, and the filing date[118](index=118&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=35&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes financial performance for the period, discussing operational results, liquidity, and the impact of the COVID-19 pandemic [Overview](index=35&type=section&id=Overview) Limoneira is a diversified agribusiness and real estate company with extensive land and water resources across the Americas - Limoneira Company is a long-standing agribusiness company (since 1893) focused on fruit production (lemons, avocados, oranges, specialty citrus), sales, marketing, rental operations, real estate, and capital investments[119](index=119&type=chunk)[120](index=120&type=chunk) - The company manages approximately **15,400 acres** of land and water resources across California, Arizona, Chile, and Argentina[119](index=119&type=chunk)[120](index=120&type=chunk) [Business Division Summary](index=35&type=section&id=Business%20Division%20Summary) The company's operations are structured across three primary divisions: agribusiness, rental operations, and real estate development - The company's operations are structured into three divisions: agribusiness, rental operations, and real estate development[123](index=123&type=chunk) - The agribusiness division includes fresh lemons, lemon packing, avocados, and other agribusiness (oranges, specialty citrus, other crops)[123](index=123&type=chunk) [Agribusiness Summary](index=35&type=section&id=Agribusiness%20Summary) The agribusiness division operates seasonally, focusing on high-quality citrus for export and managing cyclical avocado production - Agribusiness operations are seasonal, with cultural costs higher in the first and second quarters and harvest costs peaking in the third quarter[125](index=125&type=chunk) - The company focuses orange production on high-quality late season Navel oranges primarily for export to profitable niche markets like Japan, China, and Korea[129](index=129&type=chunk) - Avocado production is cyclical (bi-annual bearing) and faces growth constraints due to limited suitable land and water in Southern California[128](index=128&type=chunk) [Rental Operations Summary](index=37&type=section&id=Rental%20Operations%20Summary) Rental operations provide stable cash flows and support employee retention through affordable housing options - Rental operations generate reliable cash flows, partially funding business operating costs and providing affordable housing for employees, which helps maintain a dependable, long-term employee base[130](index=130&type=chunk) [Real Estate Development Summary](index=37&type=section&id=Real%20Estate%20Development%20Summary) The company's long-term real estate projects aim to generate capital for reinvestment into its core agribusiness operations - The company's real estate development strategy aims to redeploy earnings and cash flow into expanding its agribusiness and other income-producing real estate[131](index=131&type=chunk) - Real estate project financials are influenced by government approvals, economic conditions, financing, and product demand[131](index=131&type=chunk) [Water and Mineral Rights](index=37&type=section&id=Water%20and%20Mineral%20Rights) The company manages diverse water resources but faces significant challenges from severe drought conditions in California and Arizona - The company's water resources include rights to aquifers and canals in California, ground water in Arizona (Colorado River), and wells/surface water in Chile and Argentina[132](index=132&type=chunk)[133](index=133&type=chunk) - California and Arizona are experiencing severe to extreme drought conditions, resulting in significant water allocation reductions (e.g., **0% for San Joaquin Valley farmers in 2022**, 18% reduction from Lake Mead for Arizona), which may impact the company's orchards[134](index=134&type=chunk)[135](index=135&type=chunk) [Recent Developments](index=38&type=section&id=Recent%20Developments) Key recent activities include progress in real estate, new strategic alliances, and changes to marketing and international operations - The LLCB joint venture has closed sales for **586 residential units**[136](index=136&type=chunk) - An alliance was formed with Wileman Bros. & Elliott, Inc. to sell combined citrus volumes under Limoneira's "One World of Citrus" trademark, effective November 1, 2021[137](index=137&type=chunk) - The Avocado Marketing Agreement with Calavo was terminated in February 2022 to pursue other packing and marketing opportunities[138](index=138&type=chunk) - The company leased its 1,200-acre lemon ranch in Argentina to FGF Trapani for a fixed sum of **$400,000** over 14 months, retroactive to November 1, 2021[140](index=140&type=chunk) - The promissory note for the Centennial property sale was paid in full in April 2022, recognizing a **$161,000 deferred gain**[141](index=141&type=chunk) - A cash dividend of **$0.075 per common share** was declared on March 23, 2022, totaling $1.3 million[141](index=141&type=chunk) [COVID-19 Pandemic](index=38&type=section&id=COVID-19%20Pandemic) The pandemic continues to negatively affect sales and profitability due to suppressed lemon demand, though recovery is underway - The COVID-19 pandemic caused a significant decline in U.S. lemon market volume and export demand, negatively impacting sales and profitability through Q2 fiscal year 2022[142](index=142&type=chunk)[144](index=144&type=chunk) - Demand is recovering but has **not returned to pre-pandemic levels**, and future impacts on sales and profitability are uncertain[143](index=143&type=chunk)[144](index=144&type=chunk) - The company implemented measures to improve liquidity, such as postponing capital expenditures, selling equity, and reducing operating and discretionary spending[145](index=145&type=chunk) [Results of Operations](index=40&type=section&id=Results%20of%20Operations) For the six-month period, revenue grew 3% to $86.0 million, but a 7% increase in costs led to a wider operating loss of $7.0 million Results of Operations Highlights (in thousands) | Metric | 6 Months Ended Apr 30, 2022 | 6 Months Ended Apr 30, 2021 | Change (in thousands) | Change (%) | | :----- | :-------------------------- | :-------------------------- | :-------------------- | :--------- | | Total Net Revenues | $86,024 | $83,407 | $2,617 | 3% | | Total Costs and Expenses | $92,996 | $86,663 | $6,333 | 7% | | Operating Income (Loss) | $(6,972) | $(3,256) | $(3,716) | (114)% | | Net Income (Loss) Attributable to Limoneira Company | $(4,957) | $(2,275) | $(2,682) | (118)% | [Non-GAAP Financial Measures](index=40&type=section&id=Non-GAAP%20Financial%20Measures) Non-GAAP measures like EBITDA and Adjusted EBITDA show a significant decline in profitability compared to the prior year - EBITDA and adjusted EBITDA are used as non-GAAP measures to evaluate results, excluding depreciation, amortization, interest, income taxes, executive severance, and asset disposal gains/losses[148](index=148&type=chunk) EBITDA and Adjusted EBITDA (in thousands) | Metric | 3 Months Ended Apr 30, 2022 | 3 Months Ended Apr 30, 2021 | 6 Months Ended Apr 30, 2022 | 6 Months Ended Apr 30, 2021 | | :----- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | EBITDA | $5,435 | $6,056 | $(1,489) | $2,985 | | Adjusted EBITDA | $5,781 | $6,040 | $(458) | $2,969 | [Three Months Ended April 30, 2022 Compared to the Three Months Ended April 30, 2021](index=41&type=section&id=Three%20Months%20Ended%20April%2030%2C%202022%20Compared%20to%20the%20Three%20Months%20Ended%20April%2030%2C%202021) Quarterly revenue increased 4% to $46.8 million, driven by strong avocado and orange sales, though lemon revenue declined Agribusiness Revenues (Three Months Ended April 30, in thousands) | Agribusiness Revenue | Apr 30, 2022 | Apr 30, 2021 | Change (in thousands) | Change (%) | | :------------------- | :----------- | :----------- | :-------------------- | :--------- | | Lemons | $37,735 | $38,703 | $(968) | (3)% | | Avocados | $3,576 | $2,707 | $869 | 32% | | Oranges | $2,617 | $1,404 | $1,213 | 86% | | Specialty citrus and other crops | $1,441 | $1,175 | $266 | 23% | | Total Agribusiness Revenues | $45,369 | $43,989 | $1,380 | 3% | Agribusiness Costs and Expenses (Three Months Ended April 30, in thousands) | Agribusiness Costs | Apr 30, 2022 | Apr 30, 2021 | Change (in thousands) | Change (%) | | :----------------- | :----------- | :----------- | :-------------------- | :--------- | | Packing costs | $12,277 | $11,653 | $624 | 5% | | Growing costs | $7,997 | $6,713 | $1,284 | 19% | | Third-party grower and supplier costs | $9,572 | $10,271 | $(699) | (7)% | [Six Months Ended April 30, 2022 Compared to the Six Months Ended April 30, 2021](index=44&type=section&id=Six%20Months%20Ended%20April%2030%2C%202022%20Compared%20to%20the%20Six%20Months%20Ended%20April%2030%2C%202021) Six-month revenue grew 3% to $86.0 million, but a 7% rise in costs across packing, growing, and third-party supply drove higher losses Agribusiness Revenues (Six Months Ended April 30, in thousands) | Agribusiness Revenue | Apr 30, 2022 | Apr 30, 2021 | Change (in thousands) | Change (%) | | :------------------- | :----------- | :----------- | :-------------------- | :--------- | | Lemons | $73,303 | $72,900 | $403 | 1% | | Avocados | $4,342 | $2,707 | $1,635 | 60% | | Oranges | $3,490 | $2,495 | $995 | 40% | | Specialty citrus and other crops | $2,317 | $3,024 | $(707) | (23)% | | Total Agribusiness Revenues | $83,452 | $81,126 | $2,326 | 3% | Agribusiness Costs and Expenses (Six Months Ended April 30, in thousands) | Agribusiness Costs | Apr 30, 2022 | Apr 30, 2021 | Change (in thousands) | Change (%) | | :----------------- | :----------- | :----------- | :-------------------- | :--------- | | Packing costs | $23,557 | $22,030 | $1,527 | 7% | | Harvest costs | $10,812 | $10,443 | $369 | 4% | | Growing costs | $16,275 | $14,825 | $1,450 | 10% | | Third-party grower and supplier costs | $23,827 | $21,585 | $2,242 | 10% | [Income Taxes](index=44&type=section&id=Income%20Taxes) The company recorded a $1.9 million tax benefit on its pre-tax loss, with a projected annual effective tax rate of 32.5% - The company recorded an income tax benefit of **$1.9 million** for the six months ended April 30, 2022, on a pre-tax loss of $7.0 million[165](index=165&type=chunk) - The projected annual effective blended tax rate for fiscal year 2022, excluding discrete items, is approximately **32.5%**[165](index=165&type=chunk) [Net (Income) Loss Attributable to Noncontrolling Interest](index=44&type=section&id=Net%20(Income)%20Loss%20Attributable%20to%20Noncontrolling%20Interest) The net loss attributable to noncontrolling interests in PDA and Trapani Fresh decreased compared to the prior year - Noncontrolling interest represents 10% of PDA and 49% of Trapani Fresh's net income/loss[166](index=166&type=chunk) Net (Income) Loss Attributable to Noncontrolling Interest (in thousands) | Metric | 6 Months Ended Apr 30, 2022 | 6 Months Ended Apr 30, 2021 | Change | | :----- | :-------------------------- | :-------------------------- | :----- | | Net (income) loss attributable to noncontrolling interest | $77 | $128 | $(51) | [Segment Results of Operations](index=47&type=section&id=Segment%20Results%20of%20Operations) Agribusiness segment performance was mixed, with strong avocado results offset by a significant decline in fresh lemons operating income - The company evaluates segment performance based on revenues and operating income, allocating resources accordingly[112](index=112&type=chunk) Segment Operating Income (Loss) (Six Months Ended April 30, in thousands) | Segment Operating Income (Loss) | Apr 30, 2022 | Apr 30, 2021 | Change | | :------------------------------ | :----------- | :----------- | :----- | | Fresh Lemons | $1,209 | $3,764 | $(2,555) | | Lemon Packing | $6,455 | $6,562 | $(107) | | Avocados | $1,948 | $1,274 | $674 | | Other Agribusiness | $(631) | $643 | $(1,274) | [Three Months Ended April 30, 2022 Compared to the Three Months Ended April 30, 2021](index=47&type=section&id=Three%20Months%20Ended%20April%2030%2C%202022%20Compared%20to%20the%20Three%20Months%20Ended%20April%2030%2C%202021_segment) Quarterly segment results showed strong performance in Avocados and Other Agribusiness, while Fresh Lemons operating income declined [Fresh Lemons](index=47&type=section&id=Fresh%20Lemons) Fresh lemons segment revenue and costs both decreased by 5%, resulting in a slight decline in operating income Fresh Lemons Segment Performance (Three Months Ended April 30, in thousands) | Fresh Lemons | Apr 30, 2022 | Apr 30, 2021 | Change (in thousands) | Change (%) | | :------------- | :----------- | :----------- | :-------------------- | :--------- | | Total Net Revenues | $30,992 | $32,600 | $(1,608) | (5)% | | Costs and Expenses | $27,222 | $28,629 | $(1,407) | (5)% | | Operating Income (Loss) | $3,770 | $3,971 | $(201) | (5)% | [Lemon Packing](index=49&type=section&id=Lemon%20Packing) Lemon packing revenue grew 5%, but a 7% increase in costs due to inflation led to a slight decrease in operating income Lemon Packing Segment Performance (Three Months Ended April 30, in thousands) | Lemon Packing | Apr 30, 2022 | Apr 30, 2021 | Change (in thousands) | Change (%) | | :------------ | :----------- | :----------- | :-------------------- | :--------- | | Total Net Revenues | $16,116 | $15,385 | $731 | 5% | | Costs and Expenses | $11,662 | $10,874 | $788 | 7% | | Operating Income (Loss) | $4,454 | $4,511 | $(57) | (1)% | | Operating income per carton sold | $2.87 | $2.95 | $(0.08) | (3)% | - Increased costs for labor, cardboard, fruit treatments, and packing/shipping supplies due to **inflation and supply chain issues** drove up packing costs[172](index=172&type=chunk) [Avocados](index=49&type=section&id=Avocados) The avocado segment saw a 33% revenue increase, which outpaced a 42% rise in costs, leading to higher operating income Avocados Segment Performance (Three Months Ended April 30, in thousands) | Avocados | Apr 30, 2022 | Apr 30, 2021 | Change (in thousands) | Change (%) | | :--------- | :----------- | :----------- | :-------------------- | :--------- | | Revenues | $3,576 | $2,707 | $869 | 32% | | Costs and Expenses | $2,073 | $1,433 | $640 | 45% | | Operating Income (Loss) | $1,503 | $1,274 | $229 | 18% | - Harvest costs for avocados increased by **$0.1 million**, and growing costs increased by **$0.5 million** in Q2 fiscal year 2022 compared to the prior year[175](index=175&type=chunk) [Other Agribusiness](index=49&type=section&id=Other%20Agribusiness) Other agribusiness revenue grew 57%, driven by orange and specialty citrus sales, resulting in a significant increase in operating income Other Agribusiness Segment Performance (Three Months Ended April 30, in thousands) | Other Agribusiness | Apr 30, 2022 | Apr 30, 2021 | Change (in thousands) | Change (%) | | :----------------- | :----------- | :----------- | :-------------------- | :--------- | | Total Net Revenues | $4,058 | $2,579 | $1,479 | 57% | | Costs and Expenses | $3,828 | $2,503 | $1,325 | 53% | | Operating Income (Loss) | $230 | $76 | $154 | 203% | - Orange revenues increased by **$1.2 million**, and specialty citrus revenues increased by **$0.3 million** in Q2 fiscal year 2022[175](index=175&type=chunk) - Growing costs for other agribusiness increased by **$1.0 million** in Q2 fiscal year 2022[175](index=175&type=chunk) [Corporate and Other](index=50&type=section&id=Corporate%20and%20Other) Corporate and other revenues increased, while costs and expenses also rose, keeping the operating loss relatively stable Corporate and Other Segment Performance (Three Months Ended April 30, in thousands) | Corporate and Other | Apr 30, 2022 | Apr 30, 2021 | Change (in thousands) | Change (%) | | :------------------ | :----------- | :----------- | :-------------------- | :--------- | | Revenues | $1,381 | $1,143 | $238 | 21% | | Costs and Expenses | $6,269 | $6,039 | $230 | 4% | | Operating Income (Loss) | $(5,184) | $(5,163) | $(21) | (0)% | [Six Months Ended April 30, 2022 Compared to the Six Months Ended April 30, 2021](index=50&type=section&id=Six%20Months%20Ended%20April%2030%2C%202022%20Compared%20to%20the%20Six%20Months%20Ended%20April%2030%2C%202021_segment) For the six-month period, strong avocado performance was offset by a sharp decline in Fresh Lemons operating income and a loss in Other Agribusiness [Fresh Lemons](index=50&type=section&id=Fresh%20Lemons_6M) Fresh lemons revenue decreased 2% while costs rose 2%, leading to a significant 68% decline in operating income Fresh Lemons Segment Performance (Six Months Ended April 30, in thousands) | Fresh Lemons | Apr 30, 2022 | Apr 30, 2021 | Change (in thousands) | Change (%) | | :------------- | :----------- | :----------- | :-------------------- | :--------- | | Total Net Revenues | $60,592 | $61,900 | $(1,308) | (2)% | | Costs and Expenses | $59,383 | $58,136 | $1,247 | 2% | | Operating Income (Loss) | $1,209 | $3,764 | $(2,555) | (68)% | - Third-party grower and supplier costs for fresh lemons increased by **$1.5 million** in the first six months of fiscal year 2022[181](index=181&type=chunk) [Lemon Packing](index=51&type=section&id=Lemon%20Packing_6M) Lemon packing revenue grew 6%, but a 9% cost increase due to inflation and supply chain issues resulted in a slight operating income decline Lemon Packing Segment Performance (Six Months Ended April 30, in thousands) | Lemon Packing | Apr 30, 2022 | Apr 30, 2021 | Change (in thousands) | Change (%) | | :------------ | :----------- | :----------- | :-------------------- | :--------- | | Total Net Revenues | $28,673 | $26,967 | $1,706 | 6% | | Costs and Expenses | $22,218 | $20,405 | $1,813 | 9% | | Operating Income (Loss) | $6,455 | $6,562 | $(107) | (2)% | | Operating income per carton sold | $2.34 | $2.30 | $0.04 | 2% | - Increased costs for labor, cardboard, fruit treatments, and packing/shipping supplies from **inflation and supply chain issues** drove up packing costs[184](index=184&type=chunk) [Avocados](index=51&type=section&id=Avocados_6M) The avocado segment delivered strong growth, with a 60% revenue increase driving a 53% rise in operating income despite higher costs Avocados Segment Performance (Six Months Ended April 30, in thousands) | Avocados | Apr 30, 2022 | Apr 30, 2021 | Change (in thousands) | Change (%) | | :--------- | :----------- | :----------- | :-------------------- | :--------- | | Revenues | $4,342 | $2,707 | $1,635 | 60% | | Costs and Expenses | $2,394 | $1,433 | $961 | 67% | | Operating Income (Loss) | $1,948 | $1,274 | $674 | 53% | - Harvest costs for avocados increased by **$0.2 million**, and growing costs increased by **$0.8 million** in the first six months of fiscal year 2022[186](index=186&type=chunk) [Other Agribusiness](index=51&type=section&id=Other%20Agribusiness_6M) Other agribusiness revenue grew 5%, but a 32% surge in costs pushed the segment from an operating profit to a loss Other Agribusiness Segment Performance (Six Months Ended April 30, in thousands) | Other Agribusiness | Apr 30, 2022 | Apr 30, 2021 | Change (in thousands) | Change (%) | | :----------------- | :----------- | :----------- | :-------------------- | :--------- | | Total Net Revenues | $5,807 | $5,519 | $288 | 5% | | Costs and Expenses | $6,438 | $4,876 | $1,562 | 32% | | Operating Income (Loss) | $(631) | $643 | $(1,274) | (198)% | - Orange revenues increased by **$1.0 million**, while specialty citrus revenues decreased by **$0.7 million** in the first six months of fiscal year 2022[186](index=186&type=chunk) - Growing costs for other agribusiness increased by **$1.0 million**, and purchased fruit costs increased by **$0.7 million** in the first six months of fiscal year 2022[186](index=186&type=chunk) [Corporate and Other](index=52&type=section&id=Corporate%20and%20Other_6M) Corporate and other revenues increased, but higher costs led to a slightly larger operating loss for the six-month period Corporate and Other Segment Performance (Six Months Ended April 30, in thousands) | Corporate and Other | Apr 30, 2022 | Apr 30, 2021 | Change (in thousands) | Change (%) | | :------------------ | :----------- | :----------- | :-------------------- | :--------- | | Revenues | $2,572 | $2,281 | $291 | 13% | | Costs and Expenses | $13,562 | $12,727 | $835 | 7% | | Operating Income (Loss) | $(11,581) | $(11,002) | $(579) | (5)% | [Seasonal Operations](index=52&type=section&id=Seasonal%20Operations) Agribusiness operations are seasonal, with revenue and cost fluctuations throughout the fiscal year based on crop cycles - Agribusiness operations are seasonal, with cultural costs higher in the first and second quarters and harvest costs peaking in the third quarter[189](index=189&type=chunk) [Results of Operations for the Trailing Twelve Months Ended April 30, 2022 and 2021](index=53&type=section&id=Results%20of%20Operations%20for%20the%20Trailing%20Twelve%20Months%20Ended%20April%2030%2C%202022%20and%202021) On a trailing twelve-month basis, revenue and costs both increased by 1%, resulting in a slight improvement in the operating loss Results of Operations (Trailing Twelve Months Ended April 30, in thousands) | Metric | Apr 30, 2022 | Apr 30, 2021 | Change (in thousands) | Change (%) | | :----- | :----------- | :----------- | :-------------------- | :--------- | | Total Revenues | $168,644 | $166,739 | $1,905 | 1% | | Total Costs and Expenses | $178,693 | $177,704 | $989 | 1% | | Operating Loss | $(10,049) | $(10,965) | $916 | 8% | | Net Loss Attributable to Limoneira Company | $(6,123) | $(7,400) | $1,277 | 17% | - The increase in agribusiness costs was primarily due to higher growing and third-party grower and supplier fruit costs, partially offset by decreased packing and harvest costs[192](index=192&type=chunk) [Liquidity and Capital Resources](index=54&type=section&id=Liquidity%20and%20Capital%20Resources) The company relies on cash from operations and its credit facility for liquidity and expects these sources to be sufficient for the next year - Primary liquidity sources are cash from operations and the Farm Credit West Credit Facility[193](index=193&type=chunk)[199](index=199&type=chunk) - The company believes current liquidity will be sufficient to meet capital expenditures, debt service, working capital, and other obligations for the next twelve months[195](index=195&type=chunk) Cash Flow Summary (Six Months Ended April 30, in thousands) | Cash Flow | Apr 30, 2022 | Apr 30, 2021 | Change | | :---------- | :----------- | :----------- | :----- | | Net cash (used in) provided by operating activities | $(1,160) | $4,643 | $(5,803) | | Net cash provided by financing activities | $2,326 | $1,908 | $418 | [Overview](index=54&type=section&id=Overview_liquidity) Liquidity needs fluctuate seasonally, with the company using its revolving credit facility to fund agricultural and real estate activities - Liquidity and capital position fluctuate seasonally, with higher working capital demand in the first and last fiscal quarters[193](index=193&type=chunk) - The company utilizes its revolving credit facility to fund agricultural inputs and real estate development projects[193](index=193&type=chunk) - The defined benefit pension plan was **terminated effective December 31, 2021**[194](index=194&type=chunk) [Cash Flows from Operating Activities](index=54&type=section&id=Cash%20Flows%20from%20Operating%20Activities) Net cash used in operating activities was $1.2 million, a reversal from the prior year due to a higher net loss and working capital changes Operating Cash Flow (Six Months Ended April 30, in thousands) | Operating Cash Flow | Apr 30, 2022 | Apr 30, 2021 | Change | | :------------------ | :----------- | :----------- | :----- | | Net cash (used in) provided by operating activities | $(1,160) | $4,643 | $(5,803) | - The shift to net cash used in operating activities was driven by an increased net loss and changes in accounts receivable, cultural costs, and prepaid expenses[197](index=197&type=chunk) [Cash Flows from Investing Activities](index=54&type=section&id=Cash%20Flows%20from%20Investing%20Activities) Net cash used in investing activities decreased significantly to $0.4 million, reflecting lower capital expenditures Investing Cash Flow (Six Months Ended April 30, in thousands) | Investing Cash Flow | Apr 30, 2022 | Apr 30, 2021 | Change | | :------------------ | :----------- | :----------- | :----- | | Net cash used in investing activities | $(442) | $(5,501) | $5,059 | | Capital expenditures | $4,123 | $5,409 | $(1,286) | [Cash Flows from Financing Activities](index=55&type=section&id=Cash%20Flows%20from%20Financing%20Activities) Net cash from financing activities increased to $2.3 million, driven by higher net borrowings on long-term debt Financing Cash Flow (Six Months Ended April 30, in thousands) | Financing Cash Flow | Apr 30, 2022 | Apr 30, 2021 | Change | | :------------------ | :----------- | :----------- | :----- | | Net cash provided by financing activities | $2,326 | $1,908 | $418 | | Net borrowings of long-term debt | $6,485 | $5,510 | $975 | | Dividends paid – common | $(2,653) | $(2,651) | $(2) | | Dividends paid – preferred | $(251) | $(251) | $0 | [Transactions Affecting Liquidity and Capital Resources](index=55&type=section&id=Transactions%20Affecting%20Liquidity%20and%20Capital%20Resources) The company maintains a $130 million credit facility and a $10 million share repurchase program while continuing to pay dividends - The Farm Credit West Credit Facility provides **$130 million** in aggregate borrowing capacity, with **$10.9 million available** as of April 30, 2022[201](index=201&type=chunk) - The company expects to comply with its debt service coverage ratio covenant of **1.25:1.0** by October 31, 2022[202](index=202&type=chunk) - A **$10 million share repurchase program** was approved in fiscal year 2021, but no shares have been repurchased to date[204](index=204&type=chunk) Dividends Paid (Six Months Ended April 30, in thousands) | Dividends Paid | Apr 30, 2022 | Apr 30, 2021 | Change | | :------------- | :----------- | :----------- | :----- | | Preferred dividends | $251 | $251 | $0 | | Common dividends | $2,653 | $2,651 | $2 | [Off-Balance Sheet Arrangements](index=56&type=section&id=Off-Balance%20Sheet%20Arrangements) The company holds investments in joint ventures and partnerships that are accounted for using the equity method - The company holds investments in joint ventures and partnerships accounted for using the equity method[206](index=206&type=chunk) [Critical Accounting Estimates](index=56&type=section&id=Critical%20Accounting%20Estimates) There have been no material changes to the company's critical accounting policies and estimates since its last annual report - Critical accounting policies and estimates have not materially changed since the October 31, 2021, Annual Report on Form 10-K[207](index=207&type=chunk) [Recent Accounting Pronouncements](index=56&type=section&id=Recent%20Accounting%20Pronouncements) Information regarding recent accounting pronouncements is detailed in Note 2 to the consolidated financial statements - Refer to Note 2 for details on recent accounting pronouncements[208](index=208&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=57&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) There have been no material changes in the company's market risk disclosures since its fiscal year 2021 annual report - No material changes in quantitative and qualitative disclosures about market risk since the October 31, 2021, Annual Report on Form 10-K[210](index=210&type=chunk) [Item 4. Controls and Procedures](index=57&type=section&id=Item%204.%20Controls%20and%20Procedures) The company's disclosure controls and procedures were deemed effective, with no material changes to internal controls during the period - Disclosure controls and procedures were **effective** as of April 30, 2022[211](index=211&type=chunk) - **No material changes** in internal control over financial reporting occurred during the period[212](index=212&type=chunk) - Control systems have inherent limitations, providing reasonable but not absolute assurance[213](index=213&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=58&type=section&id=Item%201.%20Legal%20Proceedings) Information on legal proceedings is provided in Note 16 to the consolidated financial statements - Legal proceedings information is incorporated by reference from Note 16 of the financial statements[215](index=215&type=chunk) [Item 1A. Risk Factors](index=58&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors disclosed in the company's fiscal year 2021 annual report - No material changes in risk factors since the October 31, 2021, Annual Report on Form 10-K[216](index=216&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=58&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company acquired shares from a retired employee for tax purposes but made no repurchases under its public buyback program Issuer Purchases of Equity Securities (Q2 Fiscal Year 2022) | Period | Total Number of Shares Purchased | Weighted Average Price Paid per Share | Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs | | :----- | :------------------------------- | :------------------------------------ | :------------------------------------------------------------------------------------------------------- | | Feb 1, 2022 - Feb 28, 2022 | 12,718 | $14.69 | — | | Total | 12,718 | | $10,000,000 (remaining authorization) | - Shares were acquired from a retired employee for payroll taxes related to restricted stock vesting, not under the public repurchase program[217](index=217&type=chunk) [Item 3. Defaults Upon Senior Securities](index=58&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reports no defaults upon senior securities - No defaults upon senior securities[219](index=219&type=chunk) [Item 4. Mine Safety Disclosures](index=58&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's operations - Not applicable[219](index=219&type=chunk) [Item 5. Other Information](index=58&type=section&id=Item%205.%20Other%20Information) The company reports no other information for this period - No other information to report[220](index=220&type=chunk) [Item 6. Exhibits](index=59&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including corporate documents and required certifications - The exhibits include corporate organizational documents, stock-related agreements, and certifications required by the Exchange Act[221](index=221&type=chunk)[222](index=222&type=chunk) SIGNATURES [Signatures](index=61&type=section&id=SIGNATURES_details) The report was duly signed by the company's Chief Executive Officer and Chief Financial Officer on June 7, 2022 - The report was signed by the CEO and CFO on **June 7, 2022**[226](index=226&type=chunk)

Financial Data and Key Metrics Changes - Total net revenue for Q1 2022 was $39.3 million, a 3% increase from $38.3 million in Q1 2021 [10][21] - Agribusiness revenue was $38.1 million, up from $37.1 million in the same period last year [12][21] - Operating loss increased to $9.6 million in Q1 2022 from a loss of $5.6 million in Q1 2021 [28] - Net loss applicable to common stock was $6.6 million, compared to a net loss of $4.3 million in the prior year [28] - Adjusted net loss was $6.2 million, compared to a loss of $4.4 million in the same period last year [29] Business Line Data and Key Metrics Changes - Fresh lemon sales generated $24.7 million in Q1 2022, down from $25 million in Q1 2021, with an average price per carton of $20.48 compared to $18.91 [12][22] - Avocado revenue was $800,000 in Q1 2022, compared to no revenue in the same period last year, with 365,000 pounds sold at an average price of $2.10 per pound [15][24] - Orange revenue decreased to $900,000 from $1.1 million year-over-year, with 53,000 cartons sold at an average price of $16.42 [15][25] - Specialty citrus and other crop revenues decreased to $900,000 from $1.8 million in the prior year [26] Market Data and Key Metrics Changes - The lemon industry is facing an oversupply due to larger tree crops in California and Arizona, and reduced demand from Asian markets, operating at about 50% of pre-COVID levels [13][14] - The overall tree crop is estimated to be about 25% larger year-on-year, equating to approximately 10 million additional cartons [63] Company Strategy and Development Direction - The company is raising its avocado volume guidance for FY 2022 from 5 million to 6 million pounds to 6 million to 7 million pounds [32] - The real estate development project, Harvest at Limoneira, is expected to generate $95 million in cash flow, up from a previous estimate of $80 million, due to land value appreciation [17][34] - The company is expanding its product offerings through the One World of Citrus program to attract more customers [33] Management's Comments on Operating Environment and Future Outlook - Management expects continued top and bottom line growth for the remaining nine months of FY 2022 despite challenges from supply chain inflation and oversupply [31] - Lemon pricing is expected to remain pressured until the Asian export market recovers [32] - The company is optimistic about improved domestic demand and anticipates a return to pre-pandemic growth levels in Asian markets [101] Other Important Information - The company recorded approximately $770,000 in one-time severance costs related to the departure of a senior executive [27] - Long-term debt increased to $142.1 million as of January 31, 2022, from $130.4 million at the end of FY 2021 [30] Q&A Session Summary Question: Impact of supply chain costs on lemon pricing and margin recovery - Management acknowledged that inflationary pressures are challenging margins, compounded by oversupply and reduced demand due to the pandemic [41][42] Question: Cash flow expectations from Harvest at Limoneira - The company indicated that land value appreciation and new development opportunities could lead to further increases in cash flow expectations [45][50] Question: Supply-demand dynamics between California crop increase and Asian demand shortfall - Management estimated that California's crop is about 25% larger year-on-year, while Asian demand has decreased by approximately 5 million cartons [63][64] Question: Water rights and monetization opportunities - The company is exploring ways to monetize water rights, including a fallowing program that allows water to be used for other purposes [79][81] Question: Volume impact of Argentinian fruit not going to Russia - Management noted that the volume impact is uncertain, but they handled about 20% of all imported fruit from Argentina last year, equating to around 1 million cartons [91][92]