Limoneira Co. Files Q2 2024 10-Q

TL;DR

Limoneira's Q2 2024 10-Q is in. Check financials.

AI Summary

Limoneira Co. filed its 10-Q for the period ending April 30, 2024, reporting on its agribusiness operations. The company's fiscal year ends on October 31st. Key financial details and operational highlights for the second quarter of 2024 are presented in this filing.

Why It Matters

This filing provides investors and analysts with the latest financial performance and operational updates for Limoneira Co., crucial for understanding the company's current standing and future prospects in the agribusiness sector.

Risk Assessment

Risk Level: medium — As an agribusiness, Limoneira is subject to risks related to weather, commodity prices, and agricultural regulations, which can significantly impact its financial performance.

Key Players & Entities

• Limoneira Co. (company) — Filer of the 10-Q
• 20240430 (date) — End of the reporting period
• 20240606 (date) — Filing date
• 1031 (date) — Fiscal year end

FAQ

Key Financial Figures

• $0.01 — ich registered Common Stock, par value $0.01 LMNR The NASDAQ Stock Market LLC (NASD

Filing Documents

• lmnr-20240430.htm (10-Q) — 1930KB
• lmnr43024exhibit311.htm (EX-31.1) — 11KB
• lmnr43024exhibit312.htm (EX-31.2) — 11KB
• lmnr43024exhibit321.htm (EX-32.1) — 5KB
• lmnr43024exhibit322.htm (EX-32.2) — 5KB
• 0001342423-24-000015.txt ( ) — 9717KB
• lmnr-20240430.xsd (EX-101.SCH) — 59KB
• lmnr-20240430_cal.xml (EX-101.CAL) — 112KB
• lmnr-20240430_def.xml (EX-101.DEF) — 284KB
• lmnr-20240430_lab.xml (EX-101.LAB) — 629KB
• lmnr-20240430_pre.xml (EX-101.PRE) — 474KB
• lmnr-20240430_htm.xml (XML) — 1770KB

FINANCIAL INFORMATION 4

PART I. FINANCIAL INFORMATION 4

Financial Statements (Unaudited) 4

Item 1. Financial Statements (Unaudited) 4 Consolidated Balance Sheets – April 30, 2024 and October 31, 2023 4 Consolidated Statements of Operations – three and six months ended April 30, 2024 and 2023 5 Consolidated Statements of Comprehensive Income (Loss) – three and six months ended April 30, 2024 and 2023 6 Consolidated Statements of Stockholders' Equity and Temporary Equity – three and six months ended April 30, 2024 and 2023 7 Consolidated Statements of Cash Flows – six months ended April 30, 2024 and 2023 8

Notes to Consolidated Financial Statements 10

Notes to Consolidated Financial Statements 10

Management's Discussion and Analysis of Financial Condition and Results of Operations 27

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 27

Quantitative and Qualitative Disclosures about Market Risk 44

Item 3. Quantitative and Qualitative Disclosures about Market Risk 44

Controls and Procedures 44

Item 4. Controls and Procedures 44

OTHER INFORMATION 45

PART II. OTHER INFORMATION 45

Legal Proceedings 45

Item 1. Legal Proceedings 45

Risk Factors 45

Item 1A. Risk Factors 45

Unregistered Sales of Equity Securities and Use of Proceeds 45

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 45

Defaults Upon Senior Securities 45

Item 3. Defaults Upon Senior Securities 45

Mine Safety Disclosures 45

Item 4. Mine Safety Disclosures 45

Other Information 45

Item 5. Other Information 45

Exhibits 46

Item 6. Exhibits 46 SIGNATURES 48 2

FORWARD-LOOKING STATEMENTS

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 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 Report include: success in executing the Company's business plans and strategies and managing the risks involved in the foregoing; 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; negative impacts related to the COVID-19 pandemic and our Company's responses to the pandemic; product and raw materials supplies and pricing; energy supply and pricing; changes in interest 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"). These forward-looking statements involve risks and uncertainties t

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements LIMONEIRA COMPANY CONSOLIDATED BALANCE SHEETS (UNAUDITED) (in thousands, except share and per share data) April 30, 2024 October 31, 2023 Assets Current assets: Cash $ 1,402 $ 3,631 Accounts receivable, net 22,516 14,458 Cultural costs 3,430 2,334 Prepaid expenses and other current assets 4,539 5,588 Receivables/other from related parties 2,943 4,214 Total current assets 34,830 30,225 Property, plant and equipment, net 160,683 160,631 Real estate development 9,995 9,987 Equity in investments 95,669 78,816 Goodwill 1,505 1,512 Intangible assets, net 6,210 6,657 Other assets 13,293 13,382 Total assets $ 322,185 $ 301,210 Liabilities, Convertible Preferred Stock and Stockholders' Equity Current liabilities: Accounts payable $ 9,934 $ 9,892 Growers and suppliers payable 10,566 9,629 Accrued liabilities 11,258 8,651 Payables to related parties 5,139 4,805 Current portion of long-term debt 626 381 Total current liabilities 37,523 33,358 Long-term liabilities: Long-term debt, less current portion 59,503 40,628 Deferred income taxes 21,378 22,172 Other long-term liabilities 4,019 4,555 Total liabilities 122,423 100,713 Commitments and contingencies — — Series B Convertible Preferred Stock – $ 100.00 par value ( 50,000 shares authorized: 14,790 shares issued and outstanding at April 30, 2024 and October 31, 2023) ( 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 April 30, 2024 and October 31, 2023) ( 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 April 30, 2024 and October 31, 2023) — — Common Stock – $ 0.01 par value ( 39,000,000 shares authorized: 18,223,633 and 18,192,009 shares issued and 17,972,656 and 17,941,032 shares

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. Organization and Basis of Presentation

Business

Business Limoneira Company (together with its consolidated subsidiaries, the "Company") engages primarily in growing citrus and avocados, harvesting 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, Australia and other international markets. Through fiscal year 2023, the Company was a member of Sunkist Growers, Inc., an agricultural marketing cooperative, and sold a portion of its oranges, specialty citrus and other crops to Sunkist-licensed and other third-party packinghouses. 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 conso

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) 2. Summary of Significant Accounting Policies (continued) Comprehensive Income (Loss) (continued) The following table summarizes the changes in accumulated other comprehensive loss by component (in thousands): Foreign Currency Translation Loss Defined Benefit Pension Plan Accumulated Other Comprehensive Loss Balance at October 31, 2023 $ ( 5,666 ) $ — $ ( 5,666 ) Other comprehensive loss ( 704 ) — ( 704 ) Balance at April 30, 2024 $ ( 6,370 ) $ — $ ( 6,370 ) Foreign Currency Translation (Loss) Gain Defined Benefit Pension Plan Accumulated Other Comprehensive Loss Balance at October 31, 2022 $ ( 6,184 ) $ ( 1,724 ) $ ( 7,908 ) Other comprehensive income 2,173 1,724 3,897 Balance at April 30, 2023 $ ( 4,011 ) $ — $ ( 4,011 ) COVID-19 Pandemic The decline in demand for the Company's products as a result of the COVID-19 pandemic negatively impacted the Company's sales and profitability beginning in the second quarter of fiscal year 2020. The export market for fresh produce continues to experience decreased demand and the COVID-19 pandemic may continue to impact the 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. Recent Accounting Pronouncements Financial Accounting Standards Board ("FASB") Accounting Standards Update ("ASU") 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures ASU 2023-07 is intended to improve reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses, the chief operating decision maker ("CODM"), and how the CODM uses the reported measure(s) of segment profit or loss. This amendment also requires that a public entity provide all annual disclosures about a

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) 2. Summary of Significant Accounting Policies (continued) Concentrations Concentrations of credit risk with respect to revenues and accounts receivable are limited due to a large, diverse customer base. One individual customer represented 14 % of revenue for the six months ended April 30, 2024. Two individual customers represented 20 % and 11 % of accounts receivable, net as of April 30, 2024. One individual vendor represented 26 % of accounts payable as of April 30, 2024. Lemons procured from third-party growers were 79 % and 57 % of the Company's lemon supply for the six months ended April 30, 2024 and 2023, respectively. One third-party grower was 20 % of the Company's lemon supply for the six months ended April 30, 2024. The 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, as a result, there is a concentration of risk related to amounts on deposit in excess of FDIC insurance coverage. 3. Asset Sales and Disposals Northern Properties In October 2022, the Company entered 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 sell the Northern Properties and the transaction closed on January 31, 2023. During the quarter ended April 30, 2023, the purchase price was decreased by $ 397,000 for reimbursement of certain cultural costs and prepaid expenses, resulting in a final purchase price of $ 100,008,000 . After transaction costs the Company received net proceeds of $ 98,411,000 . The following is a summary of the transactio

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