Limoneira (LMNR) Files Q3 2024 10-Q Report

Ticker: LMNR · Form: 10-Q · Filed: Sep 9, 2024 · CIK: 1342423

Sentiment: neutral

Topics: 10-Q, financials, reporting

Related Tickers: LMNR

TL;DR

LMNR filed its 10-Q for July 31, 2024. All good.

AI Summary

Limoneira Company (LMNR) filed its quarterly report for the period ended July 31, 2024. The company is incorporated in Delaware and its principal executive offices are located at 1141 Cummings Road, Santa Paula, CA 93060. Limoneira's common stock is traded on The NASDAQ Stock Market LLC under the symbol LMNR.

Why It Matters

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

Risk Assessment

Risk Level: low — This is a standard quarterly filing providing financial information, not indicating any immediate or significant new risks.

Key Players & Entities

FAQ

What is the Commission File Number for Limoneira Company?

The Commission File Number for Limoneira Company is 001-34755.

What is the par value of Limoneira Company's common stock?

The par value of Limoneira Company's common stock is $0.01.

On which exchange is Limoneira Company's common stock traded?

Limoneira Company's common stock is traded on The NASDAQ Stock Market LLC (NASDAQ Global Select Market).

What is the IRS Employer Identification Number for Limoneira Company?

The IRS Employer Identification Number for Limoneira Company is 77-0260692.

What is the telephone number for Limoneira Company's principal executive offices?

The telephone number for Limoneira Company's principal executive offices is (805) 525-5541.

Filing Stats: 5,005 words · 20 min read · ~17 pages · Grade level 19.9 · Accepted 2024-09-09 16:05:09

Key Financial Figures

Filing Documents

FINANCIAL INFORMATION 4

PART I. FINANCIAL INFORMATION 4

Financial Statements (Unaudited) 4

Item 1. Financial Statements (Unaudited) 4 Consolidated Balance Sheets – July 31, 2024 and October 31, 2023 4 Consolidated Statements of Operations – three and nine months ended July 31, 2024 and 2023 5 Consolidated Statements of Comprehensive Income (Loss) – three and nine months ended July 31, 2024 and 2023 6 Consolidated Statements of Stockholders' Equity and Temporary Equity – three and nine months ended July 31, 2024 and 2023 7 Consolidated Statements of Cash Flows – nine months ended July 31, 2024 and 2023 9

Notes to Consolidated Financial Statements 11

Notes to Consolidated Financial Statements 11

Management's Discussion and Analysis of Financial Condition and Results of Operations 28

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 28

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 supply 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 tha

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) July 31, 2024 October 31, 2023 Assets Current assets: Cash $ 1,090 $ 3,631 Accounts receivable, net 21,398 14,458 Cultural costs 3,302 2,334 Prepaid expenses and other current assets 5,593 5,588 Receivables/other from related parties 4,098 4,214 Total current assets 35,481 30,225 Property, plant and equipment, net 161,625 160,631 Real estate development 10,110 9,987 Equity in investments 80,375 78,816 Goodwill 1,505 1,512 Intangible assets, net 5,386 6,657 Other assets 12,831 13,382 Total assets $ 307,313 $ 301,210 Liabilities, Convertible Preferred Stock and Stockholders' Equity Current liabilities: Accounts payable $ 7,416 $ 9,892 Growers and suppliers payable 11,456 9,629 Accrued liabilities 12,665 8,651 Payables to related parties 6,080 4,805 Current portion of long-term debt 594 381 Total current liabilities 38,211 33,358 Long-term liabilities: Long-term debt, less current portion 40,049 40,628 Deferred income taxes 21,007 22,172 Other long-term liabilities 2,353 4,555 Total liabilities 101,620 100,713 Commitments and contingencies — — Series B Convertible Preferred Stock – $ 100.00 par value ( 50,000 shares authorized: 14,790 shares issued and outstanding at July 31, 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 July 31, 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 July 31, 2024 and October 31, 2023) — — Common Stock – $ 0.01 par value ( 39,000,000 shares authorized: 18,302,878 and 18,192,009 shares issued and 18,051,901 and 17,941,032 shares out

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 ( 714 ) — ( 714 ) Balance at July 31, 2024 $ ( 6,380 ) $ — $ ( 6,380 ) Foreign Currency Translation (Loss) Gain Defined Benefit Pension Plan Accumulated Other Comprehensive (Loss) Income Balance at October 31, 2022 $ ( 6,184 ) $ ( 1,724 ) $ ( 7,908 ) Other comprehensive income 1,688 1,724 3,412 Balance at July 31, 2023 $ ( 4,496 ) $ — $ ( 4,496 ) 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

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 13 % of revenue for the nine months ended July 31, 2024. One individual customer represented 10 % of accounts receivable, net as of July 31, 2024. No individual vendor represented more than 10% of accounts payable as of July 31, 2024. Lemons procured from third-party growers were 73 % and 53 % of the Company's lemon supply for the nine months ended July 31, 2024 and 2023, respectively. One third-party grower was 14 % of the Company's lemon supply for the nine months ended July 31, 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 wa

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