FORM 10-Q |
ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
FOR THE TRANSITION PERIOD FROM TO |
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 Identification No.) |
1141 Cummings Road, Santa Paula, CA | 93060 |
(Address of Principal Executive Offices) | (Zip Code) |
Not Applicable (Former name, former address and former fiscal year, if changed since last report) | ||
Title of Each Class | Trading Symbol (s) | Name of Each Exchange of Which Registered |
Common Stock, $0.01 par value | LMNR | The NASDAQ Stock Market LLC |
¨ Large accelerated filer | ý Accelerated filer | ¨ Emerging growth company |
¨ Non-accelerated filer | ¨ Smaller reporting company |
PART I. FINANCIAL INFORMATION | ||
Item 1. | Financial Statements | |
Consolidated Balance Sheets – April 30, 2019 and October 31, 2018 | ||
Consolidated Statements of Operations – three and six months ended April 30, 2019 and 2018 | ||
Consolidated Statements of Comprehensive Income (Loss) – three and six months ended April 30, 2019 and 2018 | ||
Consolidated Statements of Stockholders' Equity and Temporary Equity – six months ended April 30, 2019 and 2018 | ||
Consolidated Statements of Cash Flows – six months ended April 30, 2019 and 2018 | ||
Notes to Consolidated Financial Statements | ||
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | |
Item 3. | Quantitative and Qualitative Disclosures about Market Risk | |
Item 4. | Controls and Procedures | |
PART II. OTHER INFORMATION | ||
Item 1. | Legal Proceedings | |
Item 1A. | Risk Factors | |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | |
Item 3. | Defaults Upon Senior Securities | |
Item 4. | Mine Safety Disclosures | |
Item 5. | Other Information | |
Item 6. | Exhibits | |
SIGNATURES |
• | changes in laws, regulations, rules, quotas, tariff, and import laws; |
• | adverse weather conditions, natural disasters and other adverse natural conditions, including freezes, rains, fires 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; |
• | product and raw materials supplies and pricing; |
• | energy supply and pricing; |
• | changes in interest and currency exchange rates; |
• | availability of financing for development activities; |
• | general economic conditions for residential and commercial real estate development; |
• | political changes and economic crisis; |
• | international conflict; |
• | acts of terrorism; |
• | labor disruptions, strikes, shortages or work stoppages; |
• | loss of important intellectual property rights; and |
• | other factors disclosed in our public filings with the Securities and Exchange Commission (the "SEC"). |
April 30, 2019 | October 31, 2018 | |||||
Assets | ||||||
Current assets: | ||||||
Cash | $ | 1,491 | $ | 609 | ||
Accounts receivable, net | 19,960 | 14,116 | ||||
Cultural costs | 2,821 | 5,413 | ||||
Prepaid expenses and other current assets | 11,808 | 10,528 | ||||
Income taxes receivable | — | 378 | ||||
Total current assets | 36,080 | 31,044 | ||||
Property, plant and equipment, net | 230,592 | 225,681 | ||||
Real estate development | 16,156 | 107,162 | ||||
Equity in investments | 57,470 | 18,698 | ||||
Investment in Calavo Growers, Inc. | 23,953 | 24,250 | ||||
Other assets | 19,034 | 14,504 | ||||
Total assets | $ | 383,285 | $ | 421,339 | ||
Liabilities and stockholders’ equity | ||||||
Current liabilities: | ||||||
Accounts payable | $ | 10,002 | $ | 6,134 | ||
Growers payable | 17,029 | 10,089 | ||||
Accrued liabilities | 4,828 | 7,724 | ||||
Current portion of long-term debt | 2,915 | 3,127 | ||||
Total current liabilities | 34,774 | 27,074 | ||||
Long-term liabilities: | ||||||
Long-term debt, less current portion | 93,744 | 76,966 | ||||
Deferred income taxes | 24,751 | 25,372 | ||||
Other long-term liabilities | 3,347 | 3,647 | ||||
Sale-leaseback deferral | — | 58,330 | ||||
Total liabilities | 156,616 | 191,389 | ||||
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 April 30, 2019 and October 31, 2018) (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, 2019 and October 31, 2018) (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, 2019 and October 31, 2018) | — | — | ||||
Common Stock – $0.01 par value (39,000,000 shares authorized: 17,772,753 and 17,647,135 shares issued and outstanding at April 30, 2019 and October 31, 2018, respectively) | 178 | 176 | ||||
Additional paid-in capital | 159,992 | 159,071 | ||||
Retained earnings | 59,757 | 50,354 | ||||
Accumulated other comprehensive (loss) income | (4,643 | ) | 8,965 | |||
Noncontrolling interest | 575 | 574 | ||||
Total stockholders’ equity | 215,859 | 219,140 | ||||
Total liabilities and stockholders’ equity | $ | 383,285 | $ | 421,339 |
Three Months Ended April 30, | Six Months Ended April 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net revenues: | |||||||||||||||
Agribusiness | $ | 40,823 | $ | 41,865 | $ | 81,623 | $ | 72,198 | |||||||
Rental operations | 1,212 | 1,270 | 2,430 | 2,530 | |||||||||||
Real estate development | — | — | — | — | |||||||||||
Total net revenues | 42,035 | 43,135 | 84,053 | 74,728 | |||||||||||
Costs and expenses: | |||||||||||||||
Agribusiness | 37,078 | 28,798 | 75,994 | 56,960 | |||||||||||
Rental operations | 1,095 | 976 | 2,174 | 2,041 | |||||||||||
Real estate development | 24 | 39 | 52 | 69 | |||||||||||
Selling, general and administrative | 4,843 | 3,942 | 9,858 | 8,016 | |||||||||||
Total costs and expenses | 43,040 | 33,755 | 88,078 | 67,086 | |||||||||||
Operating (loss) income | (1,005 | ) | 9,380 | (4,025 | ) | 7,642 | |||||||||
Other income (expense): | |||||||||||||||
Interest expense | (686 | ) | (284 | ) | (539 | ) | (794 | ) | |||||||
Equity in earnings of investments | 1,927 | (126 | ) | 1,969 | (83 | ) | |||||||||
Unrealized gain (loss) on stock in Calavo Growers, Inc. | 3,612 | — | (298 | ) | — | ||||||||||
Other income, net | 56 | 16 | 360 | 257 | |||||||||||
Total other income (expense) | 4,909 | (394 | ) | 1,492 | (620 | ) | |||||||||
Income (loss) before income tax (provision) benefit | 3,904 | 8,986 | (2,533 | ) | 7,022 | ||||||||||
Income tax (provision) benefit | (1,084 | ) | (2,380 | ) | 677 | 8,207 | |||||||||
Net income (loss) | 2,820 | 6,606 | (1,856 | ) | 15,229 | ||||||||||
Net income attributable to noncontrolling interest | (5 | ) | (7 | ) | (22 | ) | (5 | ) | |||||||
Net income (loss) attributable to Limoneira Company | 2,815 | 6,599 | (1,878 | ) | 15,224 | ||||||||||
Preferred dividends | (126 | ) | (126 | ) | (251 | ) | (251 | ) | |||||||
Net income (loss) attributable to common stock | $ | 2,689 | $ | 6,473 | $ | (2,129 | ) | $ | 14,973 | ||||||
Basic net income (loss) per common share | $ | 0.15 | $ | 0.45 | $ | (0.12 | ) | $ | 1.04 | ||||||
Diluted net income (loss) per common share | $ | 0.15 | $ | 0.44 | $ | (0.12 | ) | $ | 1.02 | ||||||
Weighted-average common shares outstanding-basic | 17,554,000 | 14,379,000 | 17,516,000 | 14,341,000 | |||||||||||
Weighted-average common shares outstanding-diluted | 18,225,000 | 15,023,000 | 17,516,000 | 14,986,000 |
Three Months Ended April 30, | Six Months Ended April 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net income (loss) | $ | 2,820 | $ | 6,606 | $ | (1,856 | ) | $ | 15,229 | ||||||
Other comprehensive (loss) income, net of tax: | |||||||||||||||
Foreign currency translation adjustments | (452 | ) | 50 | 443 | 293 | ||||||||||
Minimum pension liability adjustment, net of tax of $28, $52, $55 and $103 for the three and six months ended April 30, 2019 and 2018, respectively. | 72 | 123 | 146 | 247 | |||||||||||
Unrealized holding gains on security available-for-sale, net of tax of $0, $589, $0 and $1,758 for the three and six months ended April 30, 2019 and 2018, respectively. | — | 1,421 | — | 4,242 | |||||||||||
Unrealized gains from derivative instrument, net of tax of $0, $25, $0 and $67 for the three and six months ended April 30, 2019 and 2018, respectively. | — | 58 | — | 161 | |||||||||||
Total other comprehensive (loss) income, net of tax | (380 | ) | 1,652 | 589 | 4,943 | ||||||||||
Comprehensive income (loss) | 2,440 | 8,258 | (1,267 | ) | 20,172 | ||||||||||
Comprehensive (income) loss attributable to noncontrolling interest | 13 | 13 | 1 | 36 | |||||||||||
Comprehensive income (loss) attributable to Limoneira Company | $ | 2,453 | $ | 8,271 | $ | (1,266 | ) | $ | 20,208 |
Stockholders’ Equity | Temporary Equity | |||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-In | Retained | Accumulated Other Comprehensive | Noncontrolling | Series B Preferred | Series B-2 Preferred | ||||||||||||||||||||||||||||
Shares | Amount | Capital | Earnings | Income (Loss) | Interest | Total | Stock | Stock | ||||||||||||||||||||||||||
Balance at October 31, 2018 | 17,647,135 | $ | 176 | $ | 159,071 | $ | 50,354 | $ | 8,965 | $ | 574 | $ | 219,140 | $ | 1,479 | $ | 9,331 | |||||||||||||||||
Dividends Common ($0.075 per share) | — | — | — | (1,332 | ) | — | — | (1,332 | ) | — | — | |||||||||||||||||||||||
Dividends Series B ($2.19 per share) | — | — | — | (32 | ) | — | — | (32 | ) | — | — | |||||||||||||||||||||||
Dividends Series B-2 ($10 per share) | — | — | — | (93 | ) | — | — | (93 | ) | — | — | |||||||||||||||||||||||
Stock compensation | 145,737 | 2 | 789 | — | — | — | 791 | — | — | |||||||||||||||||||||||||
Exchange of common stock | (20,119 | ) | — | (305 | ) | — | — | — | (305 | ) | — | — | ||||||||||||||||||||||
Net (loss) income | — | — | — | (4,693 | ) | — | 17 | (4,676 | ) | — | — | |||||||||||||||||||||||
Other comprehensive income, net of tax | 969 | (12 | ) | 957 | — | — | ||||||||||||||||||||||||||||
Reclassification of unrealized gain on marketable securities upon adoption of ASU 2016-01 | — | — | — | 15,921 | (15,921 | ) | — | — | — | — | ||||||||||||||||||||||||
Reclassification upon adoption of ASU 2018-02 | — | — | — | (1,724 | ) | 1,724 | — | — | — | — | ||||||||||||||||||||||||
Balance at January 31, 2019 | 17,772,753 | 178 | 159,555 | 58,401 | (4,263 | ) | 579 | 214,450 | 1,479 | 9,331 | ||||||||||||||||||||||||
Dividends Common ($0.075 per share) | — | — | — | (1,333 | ) | — | — | (1,333 | ) | — | — | |||||||||||||||||||||||
Dividends Series B ($2.19 per share) | — | — | — | (33 | ) | — | — | (33 | ) | — | — | |||||||||||||||||||||||
Dividends Series B-2 ($10 per share) | — | — | — | (93 | ) | — | — | (93 | ) | — | — | |||||||||||||||||||||||
Stock compensation | — | — | 437 | — | — | — | 437 | — | — | |||||||||||||||||||||||||
Net (loss) income | — | — | — | 2,815 | — | 5 | 2,820 | — | — | |||||||||||||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | (380 | ) | (9 | ) | (389 | ) | — | — | ||||||||||||||||||||||
Balance at April 30, 2019 | 17,772,753 | $ | 178 | $ | 159,992 | $ | 59,757 | $ | (4,643 | ) | $ | 575 | $ | 215,859 | $ | 1,479 | $ | 9,331 | ||||||||||||||||
Stockholders’ Equity | Temporary Equity | |||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-In | Retained | Accumulated Other Comprehensive | Noncontrolling | Series B Preferred | Series B-2 Preferred | ||||||||||||||||||||||||||||
Shares | Amount | Capital | Earnings | Income (Loss) | Interest | Total | Stock | Stock | ||||||||||||||||||||||||||
Balance at October 31, 2017 | 14,405,031 | $ | 144 | $ | 94,294 | $ | 34,692 | $ | 7,076 | $ | 587 | $ | 136,793 | $ | 1,479 | $ | 9,331 | |||||||||||||||||
Dividends Common Stock ($0.0625 per share) | — | — | — | (908 | ) | — | — | (908 | ) | — | — | |||||||||||||||||||||||
Dividends Series B ($2.19 per share) | — | — | — | (32 | ) | — | — | (32 | ) | — | — | |||||||||||||||||||||||
Dividends Series B-2 ($10 per share) | — | — | — | (93 | ) | — | — | (93 | ) | — | — | |||||||||||||||||||||||
Stock compensation | 145,441 | 1 | 708 | — | — | — | 709 | — | — | |||||||||||||||||||||||||
Exchange of common stock | (17,520 | ) | — | (401 | ) | — | — | — | (401 | ) | — | — | ||||||||||||||||||||||
Net income | — | — | — | 8,625 | — | (2 | ) | 8,623 | — | — | ||||||||||||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | 3,291 | 25 | 3,316 | — | — | |||||||||||||||||||||||||
Balance at January 31, 2018 | 14,532,952 | 145 | 94,601 | 42,284 | 10,367 | 610 | 148,007 | 1,479 | 9,331 | |||||||||||||||||||||||||
Dividends Common Stock ($0.0625 per share) | — | — | — | (908 | ) | — | — | (908 | ) | — | — | |||||||||||||||||||||||
Dividends Series B ($2.19 per share) | — | — | — | (33 | ) | — | — | (33 | ) | — | — | |||||||||||||||||||||||
Dividends Series B-2 ($10 per share) | — | — | — | (93 | ) | — | — | (93 | ) | — | — | |||||||||||||||||||||||
Stock compensation | — | — | 230 | — | — | — | 230 | — | — | |||||||||||||||||||||||||
Net income | — | — | — | 6,599 | — | 7 | 6,606 | — | — | |||||||||||||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | 1,652 | 6 | 1,658 | — | — | |||||||||||||||||||||||||
Balance at April 30, 2018 | 14,532,952 | $ | 145 | $ | 94,831 | $ | 47,849 | $ | 12,019 | $ | 623 | $ | 155,467 | $ | 1,479 | $ | 9,331 |
Six Months Ended April 30, | |||||||
2019 | 2018 | ||||||
Operating activities | |||||||
Net (loss) income | $ | (1,856 | ) | $ | 15,229 | ||
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 4,247 | 3,434 | |||||
(Gain) loss on disposals of assets | (11 | ) | 193 | ||||
Gain on sales of real estate development assets | — | (25 | ) | ||||
Stock compensation expense | 1,228 | 939 | |||||
Equity in earnings of investments | (1,969 | ) | 83 | ||||
Cash distributions from equity investments | 282 | — | |||||
Deferred income taxes | (642 | ) | (10,781 | ) | |||
Accrued interest on notes receivable | (92 | ) | (83 | ) | |||
Unrealized loss on stock in Calavo Growers, Inc. | 298 | — | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | (5,838 | ) | (6,284 | ) | |||
Cultural costs | 2,608 | 2,112 | |||||
Prepaid expenses and other current assets | (1,409 | ) | (1,052 | ) | |||
Income taxes receivable | 378 | — | |||||
Other assets | (130 | ) | 25 | ||||
Accounts payable and growers payable | 9,947 | 2,244 | |||||
Accrued liabilities | (2,927 | ) | 1,000 | ||||
Other long-term liabilities | (96 | ) | 49 | ||||
Net cash provided by operating activities | 4,018 | 7,083 | |||||
Investing activities | |||||||
Capital expenditures | (8,151 | ) | (5,420 | ) | |||
Purchase of real estate development parcel | — | (1,444 | ) | ||||
Net proceeds from sales of real estate development assets | — | 1,543 | |||||
Agriculture property acquisition | (397 | ) | — | ||||
Payments to FGF Trapani (See Note 19) | (4,000 | ) | — | ||||
Collections of installments on note receivable | 150 | — | |||||
Equity investment contributions | (4,000 | ) | (3,500 | ) | |||
Investments in mutual water companies | (16 | ) | (16 | ) | |||
Net cash used in investing activities | (16,414 | ) | (8,837 | ) | |||
Financing activities | |||||||
Borrowings of long-term debt | 58,340 | 41,801 | |||||
Repayments of long-term debt | (41,844 | ) | (37,564 | ) | |||
Dividends paid – common | (2,665 | ) | (1,816 | ) | |||
Dividends paid – preferred | (251 | ) | (251 | ) | |||
Exchange of common stock | (305 | ) | (401 | ) | |||
Net cash provided by financing activities | 13,275 | 1,769 | |||||
Effect of exchange rate changes on cash | 3 | (14 | ) | ||||
Net increase in cash | 882 | 1 | |||||
Cash at beginning of period | 609 | 492 | |||||
Cash at end of period | $ | 1,491 | $ | 493 |
Six Months Ended April 30, | |||||||
2019 | 2018 | ||||||
Supplemental disclosures of cash flow information | |||||||
Cash paid during the period for interest (net of amounts capitalized) | $ | 1,327 | $ | 1,150 | |||
Cash paid during the period for income taxes, net of (refunds) | $ | 130 | $ | 100 | |||
Non-cash investing and financing activities: | |||||||
Unrealized holding gain on Calavo investment | $ | — | $ | (6,000 | ) | ||
(Decrease) increase in real estate development and sale-leaseback deferral | $ | (58,330 | ) | $ | 8,425 | ||
Reclassification from real estate development to equity in investments | $ | (33,353 | ) | $ | — | ||
Increase in equity in investments and other long-term liabilities | $ | — | $ | 750 | |||
Non-cash issuance of note receivable | $ | — | $ | 3,000 | |||
Non-cash reduction of note receivable | $ | — | $ | 68 | |||
Capital expenditures accrued but not paid at period-end | $ | 400 | $ | 299 | |||
Accrued contribution obligation of investment in water company | $ | 450 | $ | 315 | |||
Accrued Series B-2 Convertible Preferred Stock dividends | $ | 31 | $ | 31 | |||
Non-cash issuance of note payable | $ | — | $ | 1,435 |
• | Identify the contract(s) with a customer. |
• | Identify the performance obligations in the contract. |
• | Determine the transaction price. |
• | Allocate the transaction price to the performance obligations in the contract. |
• | Recognize revenue when (or as) the entity satisfies a performance obligation. |
• | A lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and |
• | A right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. |
Cultural costs | $ | 579 | |
Land and land improvements | 9,114 | ||
Buildings and equipment | 207 | ||
Orchards | 2,058 | ||
Water rights | 1,153 | ||
Total assets acquired | $ | 13,111 |
Land and land improvements | $ | 7,294 | |
Buildings and equipment | 14,866 | ||
Customer relationships and trade names | 2,270 | ||
Goodwill | 570 | ||
Total assets acquired | $ | 25,000 |
April 30, 2019 | Level 1 | Level 2 | Level 3 | Total | |||||||||||
Assets at fair value: | |||||||||||||||
Equity securities | $ | 23,953 | $ | — | $ | — | $ | 23,953 |
October 31, 2018 | Level 1 | Level 2 | Level 3 | Total | |||||||||||
Assets at fair value: | |||||||||||||||
Equity securities | $ | 24,250 | $ | — | $ | — | $ | 24,250 |
April 30, 2019 | October 31, 2018 | ||||||
Prepaid insurance | $ | 779 | $ | 647 | |||
Prepaid supplies | 1,165 | 1,196 | |||||
Lemon supplier advances | 508 | 170 | |||||
Note receivable, net | 2,552 | 2,797 | |||||
Real estate development held for sale | 5,024 | 5,024 | |||||
Water assessment fees and other | 1,780 | 694 | |||||
$ | 11,808 | $ | 10,528 |
April 30, 2019 | October 31, 2018 | ||||||
East Area I | $ | — | $ | 91,357 | |||
Retained Property - East Area I | 10,613 | 10,408 | |||||
East Area II | 5,543 | 5,397 | |||||
$ | 16,156 | $ | 107,162 |
April 30, 2019 | October 31, 2018 | ||||||
Limoneira Lewis Community Builders, LLC | $ | 53,416 | $ | 14,060 | |||
Limco Del Mar, Ltd. | 2,001 | 1,935 | |||||
Rosales | 1,543 | 2,191 | |||||
Romney Property Partnership | 510 | 512 | |||||
$ | 57,470 | $ | 18,698 |
Six Months Ended April 30, | |||||||
2019 | 2018 | ||||||
Revenues | $ | 30,354 | $ | — | |||
Cost of land sold | 22,005 | — | |||||
Operating expenses | 107 | 83 | |||||
Net income (loss) | $ | 8,242 | $ | (83 | ) | ||
Net income (loss) attributable to Limoneira Company | $ | 3,481 | $ | (83 | ) |
April 30, 2019 | October 31, 2018 | ||||||
Investments in mutual water companies | $ | 5,486 | $ | 5,026 | |||
Acquired water and mineral rights | 3,841 | 3,783 | |||||
Deposit for land purchase | 608 | 593 | |||||
Deferred lease assets and other | 335 | 396 | |||||
Notes receivable | 815 | 566 | |||||
Revolving funds and memberships | 244 | 267 | |||||
Acquired trade names, trademarks and customer relationships | 2,270 | 2,442 | |||||
Goodwill | 1,435 | 1,431 | |||||
Payments to FGF Trapani | 4,000 | — | |||||
$ | 19,034 | $ | 14,504 |
April 30, 2019 | October 31, 2018 | ||||||
Compensation | $ | 2,258 | $ | 2,784 | |||
Property taxes | 21 | 785 | |||||
Interest | 342 | 297 | |||||
Deferred rental income and deposits | 460 | 497 | |||||
Lease expense | 78 | 378 | |||||
Lemon supplier payables | 53 | 1,214 | |||||
Capital expenditures and other | 1,616 | 1,769 | |||||
$ | 4,828 | $ | 7,724 |
April 30, 2019 | October 31, 2018 | |||||||
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 2.50% at April 30, 2019, plus 1.60%. Effective July 1, 2018, the interest rate for the $40.0 million outstanding balance of the non-revolving line of credit was fixed at 4.77%. Interest is payable monthly and the principal is due in full on July 1, 2022. | $ | 69,142 | $ | 50,888 | ||||
Farm Credit West term loan: the interest rate is variable and was 4.95% at April 30, 2019. The loan is payable in quarterly installments through November 2022. | 2,321 | 2,602 | ||||||
Farm Credit West term loan: the interest rate is variable and was 4.95% at April 30, 2019. The loan is payable in monthly installments through October 2035. | 1,100 | 1,122 | ||||||
Farm Credit West term loan: the interest rate is fixed at 4.70%. The loan is payable in monthly installments though March 2036. | 9,000 | 9,172 | ||||||
Farm Credit West term loan: the interest rate is fixed at 3.62% until March 2021, becoming variable for the remainder of the loan. The loan is payable in monthly installments though March 2036. | 6,666 | 6,808 | ||||||
Wells Fargo term loan: the interest rate is fixed at 3.58%. The loan is payable in monthly installments through January 2023. | 5,667 | 6,367 | ||||||
Banco de Chile term loan: the interest rate is fixed at 6.48%. The loan is payable in annual installments through January 2025. | 1,470 | 1,857 | ||||||
Note Payable: the interest rate ranges from 5.00% to 7.00% and was 5.50% at April 30, 2019. The loan includes interest-only monthly payments and principal is due in February 2023. | 1,435 | 1,435 | ||||||
Subtotal | 96,801 | 80,251 | ||||||
Less deferred financing costs, net of accumulated amortization | 142 | 158 | ||||||
Total long-term debt, net | 96,659 | 80,093 | ||||||
Less current portion | 2,915 | 3,127 | ||||||
Long-term debt, less current portion | $ | 93,744 | $ | 76,966 |
Three Months Ended April 30, | Six Months Ended April 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Basic net income (loss) per common share: | |||||||||||||||
Net income (loss) applicable to common stock | $ | 2,689 | $ | 6,473 | $ | (2,129 | ) | $ | 14,973 | ||||||
Effect of unvested, restricted stock | (16 | ) | (10 | ) | (33 | ) | (19 | ) | |||||||
Numerator: Net income (loss) for basic EPS | 2,673 | 6,463 | (2,162 | ) | 14,954 | ||||||||||
Denominator: Weighted average common shares-basic | 17,554 | 14,379 | 17,516 | 14,341 | |||||||||||
Basic net income (loss) per common share | $ | 0.15 | $ | 0.45 | $ | (0.12 | ) | $ | 1.04 |
Diluted net income (loss) per common share: | |||||||||||||||
Numerator: Net income (loss) for diluted EPS | $ | 2,815 | $ | 6,599 | $ | (2,162 | ) | $ | 15,224 | ||||||
Weighted average common shares–basic | 17,554 | 14,379 | 17,516 | 14,341 | |||||||||||
Effect of dilutive unvested, restricted stock and preferred stock | 671 | 644 | — | 645 | |||||||||||
Denominator: Weighted average common shares–diluted | 18,225 | 15,023 | 17,516 | 14,986 | |||||||||||
Diluted net income (loss) per common share | $ | 0.15 | $ | 0.44 | $ | (0.12 | ) | $ | 1.02 |
Three Months Ended April 30, | Six Months Ended April 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Administrative expenses | $ | 47 | $ | 63 | $ | 94 | $ | 126 | |||||||
Interest cost | 207 | 192 | 414 | 385 | |||||||||||
Expected return on plan assets | (272 | ) | (268 | ) | (544 | ) | (536 | ) | |||||||
Prior service cost | 11 | 11 | 22 | 22 | |||||||||||
Recognized actuarial loss | 100 | 175 | 201 | 350 | |||||||||||
Net periodic benefit cost | $ | 93 | $ | 173 | $ | 187 | $ | 347 |
Fresh Lemons(1) | Lemon Packing | Eliminations | Avocados | Other Agribusiness | Total Agribusiness | Rental Operations | Real Estate Development | Corporate and Other | Total | |||||||||||||||||||||
Revenues from external customers | $ | 32,428 | $ | 3,954 | $ | — | $ | 540 | $ | 3,901 | $ | 40,823 | $ | 1,212 | $ | — | $ | — | $ | 42,035 | ||||||||||
Intersegment revenue | — | 8,157 | (8,157 | ) | — | — | — | — | — | — | — | |||||||||||||||||||
Total net revenues | 32,428 | 12,111 | (8,157 | ) | 540 | 3,901 | 40,823 | 1,212 | — | — | 42,035 | |||||||||||||||||||
Costs and expenses | 27,915 | 10,664 | (8,157 | ) | 921 | 3,875 | 35,218 | 901 | 24 | 4,776 | 40,919 | |||||||||||||||||||
Depreciation and amortization | — | — | — | — | — | 1,860 | 194 | — | 67 | 2,121 | ||||||||||||||||||||
Operating income (loss) | $ | 4,513 | $ | 1,447 | $ | — | $ | (381 | ) | $ | 26 | $ | 3,745 | $ | 117 | $ | (24 | ) | $ | (4,843 | ) | $ | (1,005 | ) |
Fresh Lemons | Lemon Packing | Eliminations | Avocados | Other Agribusiness | Total Agribusiness | Rental Operations | Real Estate Development | Corporate and Other | Total | |||||||||||||||||||||
Revenues from external customers | $ | 30,561 | $ | 3,008 | $ | — | $ | 935 | $ | 7,361 | $ | 41,865 | $ | 1,270 | $ | — | $ | — | $ | 43,135 | ||||||||||
Intersegment revenue | — | 7,152 | (7,152 | ) | — | — | — | — | — | — | — | |||||||||||||||||||
Total net revenues | 30,561 | 10,160 | (7,152 | ) | 935 | 7,361 | 41,865 | 1,270 | — | — | 43,135 | |||||||||||||||||||
Costs and expenses | 22,601 | 7,170 | (7,152 | ) | 875 | 3,808 | 27,302 | 781 | 39 | 3,889 | 32,011 | |||||||||||||||||||
Depreciation and amortization | — | — | — | — | — | 1,496 | 195 | — | 53 | 1,744 | ||||||||||||||||||||
Operating income (loss) | $ | 7,960 | $ | 2,990 | $ | — | $ | 60 | $ | 3,553 | $ | 13,067 | $ | 294 | $ | (39 | ) | $ | (3,942 | ) | $ | 9,380 |
Fresh Lemons(1) | Lemon Packing | Eliminations | Avocados | Other Agribusiness | Total Agribusiness | Rental Operations | Real Estate Development | Corporate and Other | Total | |||||||||||||||||||||
Revenues from external customers | $ | 66,921 | $ | 8,057 | $ | — | $ | 543 | $ | 6,102 | $ | 81,623 | $ | 2,430 | $ | — | $ | — | $ | 84,053 | ||||||||||
Intersegment revenue | — | 15,201 | (15,201 | ) | — | — | — | — | — | — | — | |||||||||||||||||||
Total net revenues | 66,921 | 23,258 | (15,201 | ) | 543 | 6,102 | 81,623 | 2,430 | — | — | 84,053 | |||||||||||||||||||
Costs and expenses | 59,997 | 19,448 | (15,201 | ) | 1,637 | 6,385 | 72,266 | 1,785 | 52 | 9,728 | 83,831 | |||||||||||||||||||
Depreciation and amortization | — | — | — | — | — | 3,728 | 389 | — | 130 | 4,247 | ||||||||||||||||||||
Operating income (loss) | $ | 6,924 | $ | 3,810 | $ | — | $ | (1,094 | ) | $ | (283 | ) | $ | 5,629 | $ | 256 | $ | (52 | ) | $ | (9,858 | ) | $ | (4,025 | ) |
Fresh Lemons | Lemon Packing | Eliminations | Avocados | Other Agribusiness | Total Agribusiness | Rental Operations | Real Estate Development | Corporate and Other | Total | |||||||||||||||||||||
Revenues from external customers | $ | 55,537 | $ | 5,841 | $ | — | $ | 935 | $ | 9,885 | $ | 72,198 | $ | 2,530 | $ | — | $ | — | $ | 74,728 | ||||||||||
Intersegment revenue | — | 12,076 | (12,076 | ) | — | — | — | — | — | — | — | |||||||||||||||||||
Total net revenues | 55,537 | 17,917 | (12,076 | ) | 935 | 9,885 | 72,198 | 2,530 | — | — | 74,728 | |||||||||||||||||||
Costs and expenses | 45,491 | 12,894 | (12,076 | ) | 1,579 | 6,129 | 54,017 | 1,651 | 69 | 7,915 | 63,652 | |||||||||||||||||||
Depreciation and amortization | — | — | — | — | — | 2,943 | 390 | — | 101 | 3,434 | ||||||||||||||||||||
Operating income (loss) | $ | 10,046 | $ | 5,023 | $ | — | $ | (644 | ) | $ | 3,756 | $ | 15,238 | $ | 489 | $ | (69 | ) | $ | (8,016 | ) | $ | 7,642 |
Three Months Ended April 30, | Six Months Ended April 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Fresh lemons (1) | $ | 32,428 | $ | 30,561 | $ | 66,921 | $ | 55,537 | |||||||
Lemon packing | 12,111 | 10,160 | 23,258 | 17,917 | |||||||||||
Intersegment revenue | (8,157 | ) | (7,152 | ) | (15,201 | ) | (12,076 | ) | |||||||
Lemon revenues | 36,382 | 33,569 | 74,978 | 61,378 | |||||||||||
Avocados | 540 | 935 | 543 | 935 | |||||||||||
Navel and Valencia oranges | 1,991 | 5,223 | 2,937 | 6,566 | |||||||||||
Specialty citrus and other crops | 1,910 | 2,138 | 3,165 | 3,319 | |||||||||||
Other agribusiness revenues | 3,901 | 7,361 | 6,102 | 9,885 | |||||||||||
Agribusiness revenues | 40,823 | 41,865 | 81,623 | 72,198 | |||||||||||
Residential and commercial rentals | 885 | 878 | 1,762 | 1,728 | |||||||||||
Leased land | 224 | 326 | 493 | 654 | |||||||||||
Organic recycling and other | 103 | 66 | 175 | 148 | |||||||||||
Rental operations revenues | 1,212 | 1,270 | 2,430 | 2,530 | |||||||||||
Real estate development revenues | — | — | — | — | |||||||||||
Total net revenues | $ | 42,035 | $ | 43,135 | $ | 84,053 | $ | 74,728 |
Three Months Ended April 30, | Six Months Ended April 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Revenues: | |||||||||||||||
Agribusiness | $ | 40,823 | $ | 41,865 | $ | 81,623 | $ | 72,198 | |||||||
Rental operations | 1,212 | 1,270 | 2,430 | 2,530 | |||||||||||
Real estate development | — | — | — | — | |||||||||||
Total net revenues | 42,035 | 43,135 | 84,053 | 74,728 | |||||||||||
Costs and expenses: | |||||||||||||||
Agribusiness | 37,078 | 28,798 | 75,994 | 56,960 | |||||||||||
Rental operations | 1,095 | 976 | 2,174 | 2,041 | |||||||||||
Real estate development | 24 | 39 | 52 | 69 | |||||||||||
Selling, general and administrative | 4,843 | 3,942 | 9,858 | 8,016 | |||||||||||
Total costs and expenses | 43,040 | 33,755 | 88,078 | 67,086 | |||||||||||
Operating income: | |||||||||||||||
Agribusiness | 3,745 | 13,067 | 5,629 | 15,238 | |||||||||||
Rental operations | 117 | 294 | 256 | 489 | |||||||||||
Real estate development | (24 | ) | (39 | ) | (52 | ) | (69 | ) | |||||||
Selling, general and administrative | (4,843 | ) | (3,942 | ) | (9,858 | ) | (8,016 | ) | |||||||
Operating (loss) income | (1,005 | ) | 9,380 | (4,025 | ) | 7,642 | |||||||||
Other income (expense): | |||||||||||||||
Interest expense | (686 | ) | (284 | ) | (539 | ) | (794 | ) | |||||||
Equity in earnings of investments | 1,927 | (126 | ) | 1,969 | (83 | ) | |||||||||
Unrealized gain (loss) on stock in Calavo Growers, Inc. | 3,612 | — | (298 | ) | — | ||||||||||
Other income, net | 56 | 16 | 360 | 257 | |||||||||||
Total other expense | 4,909 | (394 | ) | 1,492 | (620 | ) | |||||||||
Income (loss) before income tax (provision) benefit | 3,904 | 8,986 | (2,533 | ) | 7,022 | ||||||||||
Income tax (provision) benefit | (1,084 | ) | (2,380 | ) | 677 | 8,207 | |||||||||
Net income (loss) | 2,820 | 6,606 | (1,856 | ) | 15,229 | ||||||||||
Net income attributable to noncontrolling interest | (5 | ) | (7 | ) | (22 | ) | (5 | ) | |||||||
Net income (loss) attributable to Limoneira Company | $ | 2,815 | $ | 6,599 | $ | (1,878 | ) | $ | 15,224 |
Three Months Ended April 30, | Six Months Ended April 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net income (loss) attributable to Limoneira Company | $ | 2,815 | $ | 6,599 | $ | (1,878 | ) | $ | 15,224 | ||||||
Interest expense | 686 | 284 | 539 | 794 | |||||||||||
Income tax provision (benefit) | 1,084 | 2,380 | (677 | ) | (8,207 | ) | |||||||||
Depreciation and amortization | 2,121 | 1,744 | 4,247 | 3,434 | |||||||||||
EBITDA | $ | 6,706 | $ | 11,007 | $ | 2,231 | $ | 11,245 | |||||||
Unrealized (gain) loss on stock in Calavo Growers, Inc. | (3,612 | ) | — | 298 | — | ||||||||||
LLC earnings in equity investment | (2,270 | ) | — | (2,270 | ) | — | |||||||||
Adjusted EBITDA | $ | 824 | $ | 11,007 | $ | 259 | $ | 11,245 |
Agribusiness Revenues for the Three Months Ended April 30, | |||||||||||
2019 | 2018 | Change | |||||||||
Lemons | $ | 36,382 | $ | 33,569 | $ | 2,813 | 8% | ||||
Avocados | 540 | 935 | (395 | ) | (42)% | ||||||
Navel and Valencia oranges | 1,991 | 5,223 | (3,232 | ) | (62)% | ||||||
Specialty citrus and other crops | 1,910 | 2,138 | (228 | ) | (11)% | ||||||
Agribusiness revenues | $ | 40,823 | $ | 41,865 | $ | (1,042 | ) | (2)% |
• | Lemons: The increase in the second quarter of fiscal year 2019 was primarily the result of increased volume of lemon by-products compared to the same period in fiscal year 2018. Additionally, lower fresh lemon prices were partially offset by increased volume of fresh lemons sold compared to the same period in fiscal year 2018. During the second quarter of fiscal years 2019 and 2018, fresh lemon sales were $26.3 million and $27.1 million, respectively, on 1,300,000 and 1,157,000 cartons of lemons sold at average per carton prices of $20.26 and $23.42, respectively. Lemon revenues included $4.0 million shipping and handling, $4.3 million lemon by-products and $1.8 million other lemon sales in the second quarter of fiscal year 2019 compared to $3.0 million shipping and handling, $2.2 million lemon by-products and $1.3 million other lemon sales during the same period in fiscal year 2018. Other lemon sales in the second quarter of fiscal year 2019 included $1.0 million in Chile by PDA and San Pablo compared to $0.4 million in Chile by PDA in the second quarter of fiscal year 2018. |
• | Avocados: The decrease in the second quarter of fiscal year 2019 was primarily the result of lower volume partially offset by higher prices of avocados sold compared to the same period in fiscal year 2018. During the second quarter of fiscal year 2019 0.4 million pounds of avocados were sold at an average per pound price of $1.27 compared to 1.0 million pounds of avocados were sold at an average per pound price of $0.94 during the same period in fiscal year 2018. The higher prices in fiscal year 2019 are the result of lower supply in the marketplace. |
• | Navel and Valencia oranges: The decrease in the second quarter of fiscal year 2019 was primarily attributable to lower prices and lower volume of oranges sold compared to the same period in fiscal year 2018. In the second quarter of fiscal year 2019, 361,000 40-pound carton equivalents of oranges were sold at average per carton prices of $5.52 compared to 471,000 40-pound carton equivalents sold at average per carton prices of $11.09 in the second quarter of fiscal year 2018. Orange sales in the second quarter of fiscal year 2019 were zero in Chile by PDA and San Pablo compared to $0.1 million in Chile by PDA in the second quarter of fiscal year 2018. |
• | Specialty citrus and other crops: The decrease in the second quarter of fiscal year 2019 was primarily the result of lower prices partially offset by higher volume of specialty citrus sold compared to the same period in fiscal year 2018. During the second quarter of fiscal year 2019, 272,000 40-pound carton equivalents of specialty citrus were sold at an average per carton price of |
Agribusiness Costs and Expenses for the Three Months Ended April 30, | |||||||||||
2019 | 2018 | Change | |||||||||
Packing costs | $ | 10,664 | $ | 7,170 | $ | 3,494 | 49% | ||||
Harvest costs | 4,672 | 4,828 | (156 | ) | (3)% | ||||||
Growing costs | 6,665 | 5,857 | 808 | 14% | |||||||
Third-party grower costs | 13,217 | 9,447 | 3,770 | 40% | |||||||
Depreciation and amortization | 1,860 | 1,496 | 364 | 24% | |||||||
Agribusiness costs and expenses | $ | 37,078 | $ | 28,798 | $ | 8,280 | 29% |
• | Packing costs: Packing costs 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. Lemon packing costs were $9.9 million and $6.6 million in the second quarter of fiscal years 2019 and 2018, respectively. During the second quarter of fiscal year 2019, we packed and sold 1,300,000 cartons of lemons at average per carton costs of $7.60 compared to 1,157,000 cartons of lemons sold at average per carton costs of $5.68 during the same period in fiscal year 2018. The increase in average per carton costs in fiscal year 2019 compared to fiscal year 2018 is primarily due to increased volume of lemon by-products and $2.2 million of operating costs incurred at the Oxnard Lemon facility. Additionally, packing costs included $0.8 million of shipping costs in the second quarter of fiscal year 2019 compared to $0.6 million in the second quarter of fiscal year 2018. |
• | Harvest costs: The increase in the second quarter of fiscal year 2019 is primarily attributable to increased volume of lemons harvested partially offset by decreased volume of avocados and oranges 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 increase in the second quarter of fiscal year 2019 was primarily due to net increased cost of $0.8 million for cultivation, fertilization and soil amendments, pest control and San Pablo cultural costs compared to the same period in fiscal year 2018. Growing costs reflect farm management decisions based on weather, harvest timing and crop conditions. |
• | Third-party grower costs: We sell fruit that we grow and fruit that we procure from other growers. The cost of procuring fruit from other growers is referred to as third-party grower costs. The increase in the second quarter of fiscal year 2019 is primarily attributable to higher volume partially offset by lower price of third-party grower fruit sold. Of the 1,300,000 and 1,157,000 cartons of lemons packed and sold during the second quarter of fiscal years 2019 and 2018, respectively, 770,000 (59%) and 493,000 (43%) cartons were procured from third-party growers at average per carton prices of $17.01 and $19.19, respectively. |
• | Depreciation and amortization expense for the second quarter of fiscal year 2019 was approximately $0.4 million higher than the second quarter of fiscal year 2018 primarily due to the acquisitions of Oxnard Lemon and San Pablo and an increase in assets placed into service. |
Agribusiness Revenues for the Six Months Ended April 30, | |||||||||||
2019 | 2018 | Change | |||||||||
Lemons | $ | 74,978 | $ | 61,378 | $ | 13,600 | 22% | ||||
Avocados | 543 | 935 | (392 | ) | (42)% | ||||||
Navel and Valencia oranges | 2,937 | 6,566 | (3,629 | ) | (55)% | ||||||
Specialty citrus and other crops | 3,165 | 3,319 | (154 | ) | (5)% | ||||||
Agribusiness revenues | $ | 81,623 | $ | 72,198 | $ | 9,425 | 13% |
• | Lemons: The increase in the first six months of fiscal year 2019 was primarily the result of higher volume partially offset by lower prices of fresh lemons sold compared to the same period in fiscal year 2018. During the first six months of fiscal years 2019 and 2018, fresh lemon sales were $57.2 million and $51.1 million, respectively, on 2,572,000 and 2,069,000 cartons of lemons sold at average per carton prices of $22.26 and $24.70, respectively. Lemon revenues included $8.1 million shipping and handling, $6.3 million lemon by-products and $3.3 million other lemon sales in the first six months of fiscal year 2019 compared to $5.8 million shipping and handling, $2.7 million lemon by-product and $1.8 million other lemon sales during the same period in fiscal year 2018. Other lemon sales in the first six months of fiscal year 2019 include $1.4 million in Chile by PDA and San Pablo compared to $0.4 million in Chile by PDA in the first six months of fiscal year 2018. |
• | Avocados: The decrease in the first six months of fiscal year 2019 was primarily the result of lower volume offset partially by higher prices of avocados sold compared to the same period in fiscal year 2018. During the first six months of fiscal year 2019 0.4 million pounds of avocados were sold at an average per pound price of $1.27 compared to 1.0 million pounds of avocados were sold at an average per pound price of $0.94 during the same period in fiscal year 2018. The higher prices in fiscal year 2019 are the result of lower supply in the marketplace. |
• | Navel and Valencia oranges: The decrease in the first six months of fiscal year 2019 was primarily attributable to lower volume and prices of oranges sold compared to the same period in fiscal year 2018. In the first six months of fiscal year 2019, 486,000 40-pound carton equivalents of oranges were sold at average per carton prices of $6.04 compared to 575,000 40-pound carton equivalents sold at average per carton prices of $11.42 in the same period of fiscal year 2018. Orange sales in the first six months |
• | Specialty citrus and other crops: The decrease in the first six months of fiscal year 2019 was primarily the result of lower prices partially offset by higher volume of specialty citrus sold compared to the same period in fiscal year 2018. During the first six months of fiscal year 2019, 353,000 40-pound carton equivalents of specialty citrus were sold at an average per carton price of $8.97 compared to 276,000 40-pound carton equivalents sold at an average per carton price of $12.02 during the same period in fiscal year 2018. |
Agribusiness Costs and Expenses for the Six Months Ended April 30, | |||||||||||
2019 | 2018 | Change | |||||||||
Packing costs | $ | 19,448 | $ | 12,894 | $ | 6,554 | 51% | ||||
Harvest costs | 9,237 | 8,101 | 1,136 | 14% | |||||||
Growing costs | 14,278 | 12,695 | 1,583 | 12% | |||||||
Third-party grower costs | 29,303 | 20,327 | 8,976 | 44% | |||||||
Depreciation and amortization | 3,728 | 2,943 | 785 | 27% | |||||||
Agribusiness costs and expenses | $ | 75,994 | $ | 56,960 | $ | 19,034 | 33% |
• | Packing costs: Packing costs 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. Lemon packing costs were $18.2 million and $12.0 million in the first six months of fiscal years 2019 and 2018, respectively. During the first six months of fiscal year 2019, we packed and sold 2,572,000 cartons of lemons at average per carton costs of $7.06 compared to 2,069,000 cartons of lemons sold at average per carton costs of $5.80 during the same period in fiscal year 2018. The increase in average per carton costs in fiscal year 2019 compared to fiscal year 2018 is primarily due to $3.4 million of operating costs incurred at the Oxnard Lemon facility, partially offset by decreased average per carton costs incurred at our Santa Paula facility. Additionally, packing costs included $1.3 million of shipping costs in the first six months of fiscal year 2019 compared to $0.9 million in the first six months of fiscal year 2018. |
• | Harvest costs: The increase in the first six months of fiscal year 2019 is primarily attributable to increased volume of lemons harvested partially offset by decreased volume of avocados and oranges 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 increase in the first six months of fiscal year 2019 was primarily due to net increased costs of $1.6 million primarily for cultivation, fertilization and soil amendments, pest control, and San Pablo cultural costs compared to the same period of fiscal year 2018. Growing costs reflect farm management decisions based on weather, harvest timing and crop conditions. |
• | Third-party grower costs: We sell fruit that we grow and fruit that we procure from other growers. The cost of procuring fruit from other growers is referred to as third-party grower costs. The increase in the first six months of fiscal year 2019 is primarily attributable to higher volume partially offset by lower price of third-party grower fruit sold. Of the 2,572,000 and 2,069,000 cartons of lemons packed and sold during the first six months of fiscal years 2019 and 2018, respectively, 1,527,000 (59%) and 976,000 (47%) cartons were procured from third-party growers at average per carton prices of $18.92 and $20.81, respectively. |
• | Depreciation and amortization expense for the first six months of fiscal year 2019 was approximately $0.8 million higher than the first six months of fiscal year 2018 primarily due to the acquisitions of Oxnard Lemon and San Pablo and an increase in assets placed into service. |
Fresh Lemons(1) | Lemon Packing | Eliminations | Avocados | Other Agribusiness | Total Agribusiness | Rental Operations | Real Estate Development | Corporate and Other | Total | |||||||||||||||||||||
Revenues from external customers | $ | 32,428 | $ | 3,954 | $ | — | $ | 540 | $ | 3,901 | $ | 40,823 | $ | 1,212 | $ | — | $ | — | $ | 42,035 | ||||||||||
Intersegment revenue | — | 8,157 | (8,157 | ) | — | — | — | — | — | — | — | |||||||||||||||||||
Total net revenues | 32,428 | 12,111 | (8,157 | ) | 540 | 3,901 | 40,823 | 1,212 | — | — | 42,035 | |||||||||||||||||||
Costs and expenses | 27,915 | 10,664 | (8,157 | ) | 921 | 3,875 | 35,218 | 901 | 24 | 4,776 | 40,919 | |||||||||||||||||||
Depreciation and amortization | — | — | — | — | — | 1,860 | 194 | — | 67 | 2,121 | ||||||||||||||||||||
Operating income (loss) | $ | 4,513 | $ | 1,447 | $ | — | $ | (381 | ) | $ | 26 | $ | 3,745 | $ | 117 | $ | (24 | ) | $ | (4,843 | ) | $ | (1,005 | ) |
Fresh Lemons | Lemon Packing | Eliminations | Avocados | Other Agribusiness | Total Agribusiness | Rental Operations | Real Estate Development | Corporate and Other | Total | |||||||||||||||||||||
Revenues from external customers | $ | 30,561 | $ | 3,008 | $ | — | $ | 935 | $ | 7,361 | $ | 41,865 | $ | 1,270 | $ | — | $ | — | $ | 43,135 | ||||||||||
Intersegment revenue | — | 7,152 | (7,152 | ) | — | — | — | — | — | — | — | |||||||||||||||||||
Total net revenues | 30,561 | 10,160 | (7,152 | ) | 935 | 7,361 | 41,865 | 1,270 | — | — | 43,135 | |||||||||||||||||||
Costs and expenses | 22,601 | 7,170 | (7,152 | ) | 875 | 3,808 | 27,302 | 781 | 39 | 3,889 | 32,011 | |||||||||||||||||||
Depreciation and amortization | — | — | — | — | — | 1,496 | 195 | — | 53 | 1,744 | ||||||||||||||||||||
Operating income (loss) | $ | 7,960 | $ | 2,990 | $ | — | $ | 60 | $ | 3,553 | $ | 13,067 | $ | 294 | $ | (39 | ) | $ | (3,942 | ) | $ | 9,380 |
• | Harvest costs for the second quarter of fiscal year 2019 were $0.1 million lower than the second quarter of fiscal year 2018. |
• | Growing costs for the second quarter of fiscal year 2019 were $0.6 million higher than the second quarter of fiscal year 2018. |
• | Third-party grower costs for the second quarter of fiscal year 2019 were $3.8 million higher than the second quarter of fiscal year 2018. |
• | Intersegment costs and expenses for the second quarter of fiscal year 2019 were $1.0 million higher than the second quarter of fiscal year 2018. |
• | Harvest costs for the second quarter of fiscal year 2019 were $0.1 million lower than the second quarter of fiscal year 2018. |
• | Growing costs for the second quarter of fiscal year 2019 were $0.1 million higher than the second quarter of fiscal year 2018. |
• | Navel and Valencia orange revenues for the second quarter of fiscal year 2019 were $3.2 million lower than the second quarter of fiscal year 2018. |
• | Specialty citrus and other crop revenues for the second quarter of fiscal year 2019 were $0.2 million lower than the second quarter of fiscal year 2018. |
• | Harvest costs for the second quarter of fiscal year 2019 were similar to the second quarter of fiscal year 2018. |
• | Growing costs for the second quarter of fiscal year 2019 were $0.1 million higher than the second quarter of fiscal year 2018. |
Fresh Lemons(1) | Lemon Packing | Eliminations | Avocados | Other Agribusiness | Total Agribusiness | Rental Operations | Real Estate Development | Corporate and Other | Total | |||||||||||||||||||||
Revenues from external customers | $ | 66,921 | $ | 8,057 | $ | — | $ | 543 | $ | 6,102 | $ | 81,623 | $ | 2,430 | $ | — | $ | — | $ | 84,053 | ||||||||||
Intersegment revenue | — | 15,201 | (15,201 | ) | — | — | — | — | — | — | — | |||||||||||||||||||
Total net revenues | 66,921 | 23,258 | (15,201 | ) | 543 | 6,102 | 81,623 | 2,430 | — | — | 84,053 | |||||||||||||||||||
Costs and expenses | 59,997 | 19,448 | (15,201 | ) | 1,637 | 6,385 | 72,266 | 1,785 | 52 | 9,728 | 83,831 | |||||||||||||||||||
Depreciation and amortization | — | — | — | — | — | 3,728 | 389 | — | 130 | 4,247 | ||||||||||||||||||||
Operating income (loss) | $ | 6,924 | $ | 3,810 | $ | — | $ | (1,094 | ) | $ | (283 | ) | $ | 5,629 | $ | 256 | $ | (52 | ) | $ | (9,858 | ) | $ | (4,025 | ) |
Fresh Lemons | Lemon Packing | Eliminations | Avocados | Other Agribusiness | Total Agribusiness | Rental Operations | Real Estate Development | Corporate and Other | Total | |||||||||||||||||||||
Revenues from external customers | $ | 55,537 | $ | 5,841 | $ | — | $ | 935 | $ | 9,885 | $ | 72,198 | $ | 2,530 | $ | — | $ | — | $ | 74,728 | ||||||||||
Intersegment revenue | — | 12,076 | (12,076 | ) | — | — | — | — | — | — | — | |||||||||||||||||||
Total net revenues | 55,537 | 17,917 | (12,076 | ) | 935 | 9,885 | 72,198 | 2,530 | — | — | 74,728 | |||||||||||||||||||
Costs and expenses | 45,491 | 12,894 | (12,076 | ) | 1,579 | 6,129 | 54,017 | 1,651 | 69 | 7,915 | 63,652 | |||||||||||||||||||
Depreciation and amortization | — | — | — | — | — | 2,943 | 390 | — | 101 | 3,434 | ||||||||||||||||||||
Operating income (loss) | $ | 10,046 | $ | 5,023 | $ | — | $ | (644 | ) | $ | 3,756 | $ | 15,238 | $ | 489 | $ | (69 | ) | $ | (8,016 | ) | $ | 7,642 |
• | Harvest costs for the six months ended April 30, 2019 were $1.1 million higher than the six months ended April 30, 2018. |
• | Growing costs for the six months ended April 30, 2019 were $1.3 million higher than the six months ended April 30, 2018. |
• | Third-party grower costs for the six months ended April 30, 2019 were $9.0 million higher than the six months ended April 30, 2018. |
• | Intersegment costs and expenses for the six months ended April 30, 2019 were $3.1 million higher than the six months ended April 30, 2018. |
• | Harvest costs for the six months ended April 30, 2019 were $0.1 million lower than the six months ended April 30, 2018. |
• | Growing costs for the six months ended April 30, 2019 were $0.1 million higher than the six months ended April 30, 2018. |
• | Navel and Valencia orange revenues for the six months ended April 30, 2019 were $3.6 million lower than the six months ended April 30, 2018. |
• | Specialty citrus and other crop revenues for the six months ended April 30, 2019 were $0.2 million lower than the six months ended April 30, 2018. |
• | Harvest costs for the six months ended April 30, 2019 were $0.1 million higher than the six months ended April 30, 2018. |
• | Growing costs for the six months ended April 30, 2019 were $0.2 million higher than the six months ended April 30, 2018. |
Trailing twelve months ended April 30, | |||||||
2019 | 2018 | ||||||
Revenues: | |||||||
Agribusiness | $ | 133,769 | $ | 125,881 | |||
Rental operations | 4,948 | 5,171 | |||||
Real estate development | — | — | |||||
Total revenues | 138,717 | 131,052 | |||||
Costs and expenses: | |||||||
Agribusiness | 117,117 | 95,323 | |||||
Rental operations | 4,218 | 3,968 | |||||
Real estate development | 110 | 229 | |||||
Impairment of real estate development assets | 1,558 | — | |||||
Selling, general and administrative | 17,895 | 15,000 | |||||
Total costs and expenses | 140,898 | 114,520 | |||||
Operating (loss) income | (2,181 | ) | 16,532 | ||||
Other income (expense): | |||||||
Interest expense | (867 | ) | (1,721 | ) | |||
Equity in earnings of investments | 2,635 | 33 | |||||
Gain on sale of stock in Calavo Growers, Inc. | 4,223 | — | |||||
Unrealized gain (loss) on stock in Calavo Growers, Inc. | (298 | ) | — | ||||
Other income, net | 416 | 422 | |||||
Total other income (expense) | 6,109 | (1,266 | ) | ||||
Income before income tax (provision) benefit | 3,928 | 15,266 | |||||
Income tax (provision) benefit | (801 | ) | 5,048 | ||||
Net income | 3,127 | 20,314 | |||||
(Income) loss attributable to noncontrolling interest | (41 | ) | 37 | ||||
Net income attributable to Limoneira Company | $ | 3,086 | $ | 20,351 |
• | Total revenues increased $7.7 million in the twelve months ended April 30, 2019 compared to the twelve months ended April 30, 2018 primarily due to increased agribusiness revenues, particularly increased lemon sales. |
• | Total costs and expenses increased $26.4 million in the twelve months ended April 30, 2019 compared to the twelve months ended April 30, 2018 primarily due to increases in our agribusiness costs, real estate impairments and selling, general and administrative expenses. The increase in agribusiness costs is associated with increased agribusiness production and the increase in selling, general and administrative expenses is primarily attributable to increased personnel and higher salaries, benefits and incentive compensation. |
• | Total other income increased $7.4 million in the twelve months ended April 30, 2019 compared to the twelve months ended April 30, 2018 primarily due to a $0.9 million decrease in net interest expense, $2.6 million increase in equity in earnings of investments and $4.2 million gain on sale of stock in Calavo. |
• | Income tax benefit decreased $5.8 million in the twelve months ended April 30, 2019 compared to the twelve months ended April 30, 2018 primarily due to the approximately $10.0 million decrease in deferred tax liabilities related to the change in the federal corporate tax rate from the 2017 Act offset by the effect of earnings before income taxes. |
• | Net loss for the six months ended April 30, 2019 was $1.9 million compared to net income of $15.2 million for the six months ended April 30, 2018. The decrease in net income of $17.1 million in the six months ended April 30, 2019 compared to the same period in fiscal year 2018 was primarily attributable to a decrease in operating income of $11.7 million and a decrease in income tax benefit of $7.5 million, offset by an increase in other income of $2.1 million. |
• | Depreciation and amortization expenses increased $0.8 million in the six months ended April 30, 2019 compared to the same period in fiscal year 2018 primarily due to the acquisitions of San Pablo and Oxnard Lemon in July 2018 and an increase in assets placed into service. |
• | The gain on disposals of assets was $11,000 in the six months ended April 30, 2019 compared to a loss on disposals of assets of $0.2 million in the six months ended April 30, 2018. Fiscal year 2018 loss was primarily the result of expenses incurred from orchard disposals related to the December 2017 Southern California wildfires and our ongoing orchard redevelopment plans. |
• | Stock compensation expense was $1.2 million and $0.9 million in the six months ended April 30, 2019 and 2018, respectively, and was comprised primarily of vesting and expense recognition of the 2016, 2017, 2018 and 2019 grants to management under our stock-based compensation plan plus non-employee directors’ stock-based compensation. |
• | Accounts receivable, net balance at April 30, 2019 was $20.0 million compared to $14.1 million at October 31, 2018, resulting in a corresponding decrease in operating cash flows of approximately $5.8 million in the six months ended April 30, 2019. Accounts receivable, net balance at April 30, 2018 was $17.2 million compared to $11.0 million at October 31, 2017, resulting in a corresponding decrease in operating cash flows of $6.3 million. The $5.8 million decrease in operating cash flows in the |
• | Cultural costs provided $2.6 million of operating cash flows in the six months ended April 30, 2019 compared to providing $2.1 million of operating cash flows during the same period in fiscal year 2018. This increase in operating cash flows was primarily due to an initial higher amount of capitalized cultural costs carried at the beginning of fiscal year 2019 and the related amortization of such costs during the six months ended April 30, 2019 compared to the same period in fiscal year 2018. |
• | Income taxes receivable balance was zero and $0.4 million at April 30, 2019 and October 31, 2018, respectively. Income taxes receivable balance was $0.6 million at April 30, 2018 and October 31, 2017. |
• | Accounts payable and growers payable provided $9.9 million and $2.2 million of operating cash flows in the six months ended April 30, 2019 and 2018, respectively. The $9.9 million of cash provided in the six months ended April 30, 2019 was primarily the result of $3.9 million increase in accounts payable, $6.9 million increase in growers payable offset by $0.4 million of capital expenditures accrued but not paid at period end and $0.5 million accrued contribution obligation of investment in mutual water company. The $2.2 million of cash provided by the six months ended April 30, 2018 was primarily the result of $3.5 million increase in growers payable, offset by $0.6 million decrease in accounts payable, $0.3 million of capital expenditures accrued but not paid at period end and $0.3 million accrued contribution obligation of investment in mutual water company. |
• | Accrued liabilities used $2.9 million of operating cash flows in the six months ended April 30, 2019 compared to $1.0 million of operating cash flows provided during the same period in fiscal year 2018. The operating cash used in the six months ended April 30, 2019 was primarily due to payments for incentive compensation, property taxes and lemon suppliers. The operating cash flows used in the six months ended April 30, 2018 was primarily comprised of accrued income taxes offset by payments for incentive compensation and property taxes. |
• | Other long-term liabilities operating cash flows in the six months ended April 30, 2019 represented $0.2 million of non-cash pension expense offset by $0.3 million of pension contributions for the period. Other long-term liabilities operating cash flows in the six months ended April 30, 2018 represented $0.3 million of non-cash pension expense offset by $0.3 million of pension contributions for the period. |
• | Term Loan Maturing November 2022. As of April 30, 2019, we had $2.3 million outstanding under the Farm Credit West Term Loan that matures in November 2022. This term loan bears interest at a variable rate equal to an internally calculated rate based on Farm Credit West’s internal monthly operations and their cost of funds and generally follows the changes in the 90-day treasury rates in increments divisible by 0.25% and is payable in quarterly installments through November 2022. The interest rate resets monthly and was 4.95% at April 30, 2019. This term loan is secured by certain of our agricultural properties. |
• | Term Loan Maturing October 2035. As of April 30, 2019, Windfall had $1.1 million outstanding under the Farm Credit West Term Loan that matures in October 2035. This term loan bears interest at a variable rate equal to an internally calculated rate based on Farm Credit West’s internal monthly operations and their cost of funds and generally follows the changes in the 90-day treasury rates in increments divisible by 0.25% and is payable in monthly installments through October 2035. The interest rate resets monthly and was 4.95% at April 30, 2019. This term loan is secured by the Windfall Farms property. |
• | Term Loan Maturing March 2036. As of April 30, 2019, we had $9.0 million outstanding under the Farm Credit West Term Loan that matures in March 2036. This loan bears interest at a fixed rate of 4.70% and is payable in monthly installments through March 2036. This term loan is secured by certain of our agricultural properties. |
• | Term Loan Maturing March 2036. As of April 30, 2019, we had $6.7 million outstanding under the Farm Credit West Term Loan that matures in March 2036. This loan bears interest at a fixed rate of 3.62% until March 2021, becoming variable for the remainder of the loan at a variable rate equal to an internally calculated rate based on Farm Credit West’s internal monthly operations and their cost of funds and generally follows the changes in the 90-day treasury rates in increments divisible by 0.25%. This term loan is payable in monthly installments through March 2036 and is secured by certain of our agricultural properties. |
• | Identify the contract(s) with a customer. |
• | Identify the performance obligations in the contract. |
• | Determine the transaction price. |
• | Allocate the transaction price to the performance obligations in the contract. |
• | Recognize revenue when (or as) the entity satisfies a performance obligation. |
Exhibit Number | Exhibit |
3.1 | |
3.2 | |
3.3 | |
3.4 | |
3.5 | |
3.6 | |
3.7 | |
3.8 | |
3.8.1 | |
3.8.2 | |
3.8.3 | |
3.8.4 | |
4.1 | |
4.2 | |
4.3 |
Exhibit Number | Exhibit |
4.4 | |
4.5 | |
4.6 | |
31.1* | |
31.2* | |
32.1* | |
32.2* | |
101.INS* | 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 |
* | Filed 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 Reports on Internal Control Over Financial Reporting and Certification of Disclosure in Exchange Act Periodic Reports, the certifications furnished in Exhibit 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. |
LIMONEIRA COMPANY | ||
June 10, 2019 | By: | /s/ HAROLD S. EDWARDS |
Harold S. Edwards | ||
Director, President and Chief Executive Officer | ||
(Principal Executive Officer) | ||
June 10, 2019 | By: | /s/ MARK PALAMOUNTAIN |
Mark Palamountain | ||
Chief Financial Officer, Treasurer and Corporate Secretary | ||
(Principal Financial and Accounting Officer) |
1. | I have reviewed this Quarterly Report on Form 10-Q of Limoneira Company (the “Registrant”); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report; |
4. | The Registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d- 15(f)) for the Registrant and have: |
(a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and |
5. | The Registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions): |
(a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and |
(b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting. |
June 10, 2019 | /s/ Harold S. Edwards | |
Harold S. Edwards, | ||
Director, President, and Chief Executive Officer | ||
(Principal Executive Officer) |
1. | I have reviewed this Quarterly Report on Form 10-Q of Limoneira Company (the “Registrant”); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report; |
4. | The Registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d- 15(f)) for the Registrant and have: |
(a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and |
5. | The Registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions): |
(a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and |
(b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting. |
June 10, 2019 | /s/ Mark Palamountain | |
Mark Palamountain, | ||
Chief Financial Officer, Treasurer and Corporate Secretary | ||
(Principal Financial and Accounting Officer) |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant. |
June 10, 2019 | /s/ Harold S. Edwards | |
Harold S. Edwards, | ||
Director, President, and Chief Executive Officer | ||
(Principal Executive Officer) |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant. |
June 10, 2019 | /s/ Mark Palamountain | |
Mark Palamountain, | ||
Chief Financial Officer, Treasurer and Corporate Secretary | ||
(Principal Financial and Accounting Officer) |
Document And Entity Information - shares |
6 Months Ended | |
---|---|---|
Apr. 30, 2019 |
May 31, 2019 |
|
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Apr. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Entity Registrant Name | Limoneira CO | |
Entity Central Index Key | 0001342423 | |
Current Fiscal Year End Date | --10-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Trading Symbol | LMNR | |
Entity Common Stock, Shares Outstanding | 17,772,753 |
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Apr. 30, 2019 |
Apr. 30, 2018 |
Apr. 30, 2019 |
Apr. 30, 2018 |
|
Net revenues: | ||||
Revenues | $ 42,035,000 | $ 43,135,000 | $ 84,053,000 | $ 74,728,000 |
Rental operations | 1,212,000 | 1,270,000 | 2,430,000 | 2,530,000 |
Total net revenues | 42,035,000 | 43,135,000 | 84,053,000 | 74,728,000 |
Costs and expenses: | ||||
Rental operations | 1,095,000 | 976,000 | 2,174,000 | 2,041,000 |
Selling, general and administrative | 4,843,000 | 3,942,000 | 9,858,000 | 8,016,000 |
Total costs and expenses | 43,040,000 | 33,755,000 | 88,078,000 | 67,086,000 |
Operating (loss) income | (1,005,000) | 9,380,000 | (4,025,000) | 7,642,000 |
Other income (expense): | ||||
Interest expense | (686,000) | (284,000) | (539,000) | (794,000) |
Equity in earnings of investments | 1,927,000 | (126,000) | 1,969,000 | (83,000) |
Unrealized gain (loss) on stock in Calavo Growers, Inc. | 3,612,000 | 0 | (298,000) | 0 |
Other income, net | 56,000 | 16,000 | 360,000 | 257,000 |
Total other income (expense) | 4,909,000 | (394,000) | 1,492,000 | (620,000) |
Income (loss) before income tax (provision) benefit | 3,904,000 | 8,986,000 | (2,533,000) | 7,022,000 |
Income tax (provision) benefit | (1,084,000) | (2,380,000) | 677,000 | 8,207,000 |
Net income (loss) | 2,820,000 | 6,606,000 | (1,856,000) | 15,229,000 |
Net income attributable to noncontrolling interest | (5,000) | (7,000) | (22,000) | (5,000) |
Net income (loss) attributable to Limoneira Company | 2,815,000 | 6,599,000 | (1,878,000) | 15,224,000 |
Preferred dividends | (126,000) | (126,000) | (251,000) | (251,000) |
Net income (loss) attributable to common stock | $ 2,689,000 | $ 6,473,000 | $ (2,129,000) | $ 14,973,000 |
Basic net income (loss) per common share (in dollars per share) | $ 0.15 | $ 0.45 | $ (0.12) | $ 1.04 |
Diluted net income (loss) per common share (in dollars per share) | $ 0.15 | $ 0.44 | $ (0.12) | $ 1.02 |
Weighted-average common shares outstanding-basic (in shares) | 17,554,000 | 14,379,000 | 17,516,000 | 14,341,000 |
Weighted-average common shares outstanding-diluted (in shares) | 18,225,000 | 15,023,000 | 17,516,000 | 14,986,000 |
Agribusiness [Member] | ||||
Net revenues: | ||||
Revenues | $ 40,823,000 | $ 41,865,000 | $ 81,623,000 | $ 72,198,000 |
Costs and expenses: | ||||
Costs and expenses | 37,078,000 | 28,798,000 | 75,994,000 | 56,960,000 |
Real estate development [Member] | ||||
Net revenues: | ||||
Revenues | 0 | 0 | 0 | 0 |
Costs and expenses: | ||||
Costs and expenses | $ 24,000 | $ 39,000 | $ 52,000 | $ 69,000 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Apr. 30, 2019 |
Apr. 30, 2018 |
Apr. 30, 2019 |
Apr. 30, 2018 |
|
Statement of Other Comprehensive Income [Abstract] | ||||
Pension liability adjustment, tax | $ 28 | $ 52 | $ 55 | $ 103 |
Unrealized holding gain (loss) on security available-for-sale, tax | 0 | 589 | 0 | 1,758 |
Unrealized gain (loss) from derivative instrument, tax | $ 0 | $ 25 | $ 0 | $ 67 |
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY AND TEMPORARY EQUITY (Parenthetical) - $ / shares |
3 Months Ended | |||
---|---|---|---|---|
Apr. 30, 2019 |
Jan. 31, 2019 |
Apr. 30, 2018 |
Jan. 31, 2018 |
|
Dividends common stock (in dollars per share) | $ 0.075 | $ 0.075 | $ 0.0625 | $ 0.0625 |
Series B Preferred Stock [Member] | ||||
Dividends preferred stock (in dollars per share) | 2.19 | 2.19 | 2.19 | 2.19 |
Series B2 Preferred Stock [Member] | ||||
Dividends preferred stock (in dollars per share) | $ 10 | $ 10 | $ 10 | $ 10 |
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Parenthetical) $ in Thousands |
1 Months Ended | |||
---|---|---|---|---|
Feb. 28, 2018
USD ($)
|
Dec. 31, 2017
USD ($)
|
Oct. 31, 2017
USD ($)
|
Feb. 28, 2013
a
|
|
East Areas II [Member] | ||||
Conversion of Stock [Line Items] | ||||
Area of real estate property | a | 7 | |||
Real estate investment property, net | $ 3,145 | |||
Payments to acquire and develop real estate | 1,444 | |||
Notes payable | $ 1,435 | |||
Centennial Property [Member] | ||||
Conversion of Stock [Line Items] | ||||
Real estate development held for sale | $ 3,250 | |||
Proceeds from sale of real estate held-for-investment | $ 179 | |||
Proceeds from issuance of debt | $ 3,000 |
Organization and Basis of Presentation |
6 Months Ended |
---|---|
Apr. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | 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 lemons. The Company is also engaged in residential rentals and other rental operations and real estate development activities. The Company markets and sells lemons directly to food service, wholesale and retail customers throughout the United States, Canada, Asia and other international markets. The Company is a member of Sunkist Growers, Inc. (“Sunkist”), an agricultural marketing cooperative, and sells its oranges, specialty citrus and other crops to Sunkist-licensed and other third-party packinghouses. The Company sells all 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. Calavo’s customers include many of the largest retail and food service companies in the United States and Canada. The Company’s avocados are packed by Calavo, which are then sold and distributed under Calavo brands to its customers. 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 a controlling interest is held by the Company. Intercompany accounts and transactions have been eliminated. 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 accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported. Actual results could differ materially 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. |
Summary of Significant Accounting Policies |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Revenue Recognition On November 1, 2018, the Company adopted Financial Accounting Standards Board (“FASB”) – Accounting Standards Update (“ASU”) ASU 2014-09, Revenue from Contracts with Customers (Topic 606), that amends the guidance for the recognition of revenue from contracts with customers. The results for the reporting period beginning after November 1, 2018 are presented in accordance with the new standard which was adopted using the modified-retrospective method and applied to those contracts that were not completed as of November 1, 2018. There was no net effect of applying the standard and therefore no cumulative adjustment to retained earnings was necessary at the date of initial application. As a result comparative information has not been restated and the results for the reporting periods before November 1, 2018 continue to be reported under the accounting standards and policies in effect for those periods. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps:
The Company determined the appropriate method by which it recognizes revenue by analyzing the nature of the products or services being provided as well as the terms and conditions of contracts or arrangements entered into with its customers. The Company accounts 2. Summary of Significant Accounting Policies (continued) Revenue Recognition (continued) for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. A contract's transaction price is allocated to each distinct good or service (i.e., performance obligation) identified in the contract and each performance obligation is valued based on its estimated relative standalone selling price. The Company recognizes the majority of its revenue at a point in time when it satisfies a performance obligation and transfers control of the product to the respective customer. The amount of revenue that is recognized is based on the transaction price, which represents the invoiced amount and includes estimates of variable consideration such as allowances for estimated customer discounts or concessions, where applicable. The amount of variable consideration included in the transaction price may be constrained and is included only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized under the contract will not occur in a future period. Upon adoption, the Company changed the accounting of certain brokered fruit sales. Under previous guidance, the Company was considered an agent and recorded revenues for certain brokered fruit sales and the costs of such fruit on a net basis in its consolidated statement of operations. Under the new revenue recognition standard, the Company is considered a principal in the transaction and revenues are recorded on a gross basis in the Company’s consolidated statement of operations with the related cost of such fruit included in agribusiness costs and expenses. This change resulted in the recognition of additional agribusiness revenue and agribusiness costs and expenses of $162,000 and $168,000, respectively, during the three months ended April 30, 2019 and $456,000 and $420,000, respectively, during the six months ended April 30, 2019. Had it used the previous revenue recognition guidance, the Company would have recorded insignificant net agribusiness revenue for the three and six months ended April 30, 2019. No cumulative adjustment to retained earnings was necessary as there is no net effect of applying the standard. Agribusiness revenue - Revenue from lemon sales is generally recognized at a point in time when the customer takes control of the fruit from the Company’s packinghouse, which aligns with the transfer of title to the customer. The Company has elected to treat any shipping and handling costs incurred after control of the goods has been transferred to the customer as agribusiness costs. The Company’s avocados, oranges, specialty citrus and other specialty crops are packed and sold by Calavo and other third-party packinghouses. The Company delivers all of its avocado production from its orchards to Calavo. These avocados are then packed by Calavo at its packinghouse and sold and distributed under Calavo brands to its customers primarily in the United States and Canada. The Company’s arrangements with other third-party packinghouses related to its oranges, specialty citrus and other specialty crops are similar to its arrangement with Calavo. The Company’s arrangements with its third-party packinghouses are such that the Company is the producer and supplier of the product and the third-party packinghouses are the Company’s customers. The revenues the Company recognizes related to the fruits sold to the third-party packinghouses are based on the volume and quality of the fruits delivered, the market price for such fruit, less the packinghouses’ charges to pack and market the fruit. Such packinghouse charges include the grading, sizing, packing, cooling, ripening and marketing of the related fruit. The Company controls the product until it is delivered to the third-party packinghouses at which time control of the product is transferred to the third-party packinghouses and revenue is recognized. Such third-party packinghouse charges are recorded as a reduction of revenue as they are not for distinct services. The identifiable benefit the Company receives from the third-party packinghouses for packaging and marketing services cannot be sufficiently separated from the third-party packinghouses’ purchase of the Company’s products. In addition, the Company is not able to reasonably estimate the fair value of the benefit received from the third-party packinghouses for such services and as such, these costs are characterized as a reduction of revenue in the Company’s consolidated statements of operations. Revenue from the sales of certain of the Company’s agricultural products is recorded based on estimated proceeds provided by certain of the Company’s sales and marketing partners (Calavo and other third-party packinghouses) due to the time between when the product is delivered by the Company and the closing of the pools for such fruits at the end of each month or harvest period. Calavo and other third-party packinghouses are agricultural cooperatives or function in a similar manner as an agricultural cooperative. The Company estimates the variable consideration using the most likely amount method, with the most likely amount being the quantities actually shipped extended by the prices reported by Calavo and other third-party packinghouses. Revenue is recognized at time of delivery to the packinghouses relating to fruits that are in pools that have not yet closed at month end if: (a) the related fruits have been delivered 2. Summary of Significant Accounting Policies (continued) Revenue Recognition (continued) to and accepted by Calavo and other third-party packinghouses (i.e., Calavo and other third-party packinghouses obtain control) and (b) sales price information has been provided by Calavo and other third-party packinghouses (based on the marketplace activity for the related fruit) to estimate with reasonable certainty the final selling price for the fruit upon the closing of the pools. In such instances the Company has the present right to payment and Calavo and other third-party packinghouses have the present right to direct the use of, and obtain substantially all of the remaining benefits from, the delivered fruit. The Company does not expect that there is a high likelihood that a significant reversal in the amount of cumulative revenue recognized in the early periods of the pool will occur once the final pool prices have been reported by the packinghouses. Historically, the revenue that is recorded based on the sales price information provided to the Company by Calavo and other third-party packinghouses at the time of delivery, have not materially differed from the actual amounts that are paid after the monthly or harvest period pools are closed. The Company has entered into brokerage arrangements with third-party international packinghouses. In certain of these arrangements, the Company has the exclusive ability to direct the use of and obtains substantially all of the remaining benefits from the fruit, and is therefore acting as a principal. As such, the Company records the related revenue and costs of the fruit gross in the consolidated statement of operations. Revenue from crop insurance proceeds is recorded when the amount can be reasonably determined and upon establishment of the present right to payment. Rental Revenue - Minimum rental revenues are generally recognized on a straight-line basis over the respective initial lease term. Contingent rental revenues are contractually defined as to the percentage of rent received by the Company and are based on fees collected by the lessee. Such revenues are recognized when actual results, based on collected fees reported by the tenant, are received. The Company's rental arrangements generally require payment on a monthly or quarterly basis. Real Estate Development Revenue - The Company recognizes revenue on real estate development projects with customers at a point in time (i.e., the closing) when the Company satisfies the single performance obligation and transfers control of such real estate to a buyer. The transaction price, which is the amount of consideration the Company receives upon delivery of the completed real estate to the buyer, is allocated to this single obligation and is received at closing. Real estate development projects with non-customers are accounted for in accordance with Accounting Standards Code (“ASC”) 610-20, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets. Recent Accounting Pronouncements FASB ASU 2016-01, Financial Instruments Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities The amendments in ASU 2016-01, among other things, require equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. Requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes. Requires separate presentation of financial assets and financial liabilities by measurement category and form of financial assets (i.e., securities or loans and receivables). Eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate fair value that is required to be disclosed for financial instruments measured at amortized cost. ASU 2016-01 is effective for public companies for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company’s adoption of this ASU on November 1, 2018 resulted in a cumulative-effect adjustment to the statement of financial position, with the Company reclassifying unrealized holding gains of $15,921,000, net of taxes, in Calavo common stock to retained earnings from accumulated other comprehensive income ("AOCI") at the date of adoption. In addition, the change in the fair value of Calavo common stock has been disclosed as a separate line item in the statement of operations subsequent to the adoption of ASU 2016-01. FASB ASU 2016-02, Leases (Topic 842) Under the new guidance, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: 2. Summary of Significant Accounting Policies (continued) Recent Accounting Pronouncements (continued)
Under the new guidance, lessor accounting is largely unchanged. Certain targeted improvements were made to align, where necessary, lessor accounting with the lessee accounting model and Topic 606, Revenue from Contracts with Customers. The new lease guidance simplified the accounting for sale and leaseback transactions primarily because lessees must recognize lease assets and lease liabilities. Lessees will no longer be provided with a source of off-balance sheet financing. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted. Lessees (for capital and operating leases) and lessors (for sales-type, direct financing, and operating leases) must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. Lessees and lessors may not apply a full retrospective transition approach. The ASU will be effective for the Company beginning in the first quarter of its fiscal year ending October 31, 2020. The Company is evaluating the effect this ASU may have on its consolidated financial statements, however it expects to apply the practical expedients provided in the ASU. Note 20 – Commitments and Contingencies of the notes to consolidated financial statements included in the Company's 2018 Annual Report on Form 10-K describes its operating lease arrangements as of October 31, 2018. FASB ASU 2017-07, Compensation — Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost The amendment requires that an employer report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. If a separate line item or items are used to present the other components of net benefit cost, that line item or items must be appropriately described. If a separate line item or items are not used, the line item or items used in the income statement to present the other components of net benefit cost must be disclosed. The amendment is effective for public business entities for annual periods beginning after December 15, 2017, including interim periods within those annual periods. The Company’s adoption of this ASU during the first quarter of fiscal year 2019 had no material impact on its consolidated financial statements. FASB ASU 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income This amendment provides financial statement preparers with an option to reclassify stranded tax effects within AOCI to retained earnings in each period in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act of 2017 (the "2017 Act") (or portion thereof) is recorded. The amendment is effective for all organizations for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. Organizations should apply the proposed amendment either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the 2017 Act is recognized. The Company early adopted this ASU on November 1, 2018, and as a result recorded a cumulative-effect reclassification in the statement of financial position to retained earnings from AOCI at the date of adoption of $1,724,000 related to the investment in Calavo and pension liability. FASB ASU 2018-14, Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans This amendment adds, removes and clarifies the disclosure requirements for employers that sponsor defined benefit pension or other post retirement plans. 2. Summary of Significant Accounting Policies (continued) Recent Accounting Pronouncements (continued) For public business entities, the amendments are effective for fiscal years ending after December 15, 2020. Early adoption is permitted. The Company is evaluating the effect this ASU may have on its consolidated financial statements. SEC Amendments to Certain Disclosure Requirements In August 2018, the SEC adopted amendments to certain disclosure requirements for a number of SEC rules, including Rule 3-04 of Regulation S-X. Rule 3-04 requires that a public registrant’s Form 10-Q include a reconciliation of changes in stockholders’ equity for each period for which a statement of comprehensive income is required to be filed. These amendments are effective for interim periods beginning after November 5, 2018, therefore the Company has included a separate statement of stockholders’ equity and temporary equity in this Quarterly Report on Form 10-Q. |
Acquisitions |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions | Acquisitions Agriculture Property Acquisition In January 2019, the Company purchased land for use as a citrus orchard for a cash purchase price of $397,000. The acquisition was for 26 acres of agricultural property adjacent to the Company’s orchards in Lindsay, California. This agriculture property acquisition is included in property, plant and equipment on the Company’s consolidated balance sheet. San Pablo On July 18, 2018, the Company completed the acquisition of San Pablo ranch and related assets in La Serena, Chile, for $13,000,000. The San Pablo ranch consists of 3,317 acres on two parcels, including 247 acres producing lemons, 61 acres producing oranges, the opportunity to immediately plant 120 acres for lemon production, as well as the potential for approximately 500 acres of avocado production. This acquisition was accounted for as an asset purchase and is included in property, plant and equipment in the Company’s consolidated balance sheet. In addition, transaction costs of $111,000 were capitalized as part of total acquisition costs. Below is a summary of the fair value of the net assets acquired on the acquisition date based on a third-party valuation (in thousands):
The unaudited, pro forma consolidated statement of operations as if San Pablo had been included in the consolidated results of the Company for the year ended October 31, 2018 results in revenue of $130,262,000 and net income of $18,785,000. Business Combinations Oxnard Lemon On July 24, 2018, the Company and Oxnard Lemon Associates, Ltd., a California limited partnership (“Seller”), entered into an Asset Purchase Agreement (the “Purchase Agreement”). Pursuant to the Purchase Agreement, on July 26, 2018 (the “Initial Closing Date”), the Company acquired certain tangible assets of seller, including a packinghouse and related land (“Oxnard Lemon”), for a purchase price of $24,750,000 (the “Initial Acquisition”). Pursuant to the Purchase Agreement, the closing on the purchase and sale of the intangible assets of Seller, including Seller’s trade names, trademarks and copyrights, took place on October 31, 2018 (the “Final Closing Date”), at which point an additional $250,000 in purchase price was paid to Seller by the Company. The aggregate purchase price for the tangible assets and the intangible assets provided in the Purchase Agreement was $25,000,000. Additionally, the Purchase 3. Acquisitions (continued) Business Combinations Agreement provided that Seller lease back the tangible assets from the Company until the Final Closing Date, pursuant to a lease executed on the Initial Closing Date. Transaction costs of $142,000 were included in selling, general and administrative expense. Below is a summary of the fair value of the net assets acquired on the acquisition date based on a third-party valuation (in thousands):
The unaudited, pro forma consolidated statement of operations as if Oxnard Lemon had been included in the consolidated results of the Company for the year ended October 31, 2018 in revenue of $142,253,000 and net income of $19,728,000. |
Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements Under the FASB ASC 820, Fair Value Measurement and Disclosures, a fair value measurement is determined based on the assumptions that a market participant would use in pricing an asset or liability. A three-tiered hierarchy draws distinctions between market participant assumptions based on (i) observable inputs such as quoted prices in active markets (Level 1), (ii) inputs other than quoted prices in active markets that are observable either directly or indirectly (Level 2) and (iii) unobservable inputs that require the Company to use present value and other valuation techniques in the determination of fair value (Level 3). The following table sets forth the Company’s financial assets and liabilities as of April 30, 2019 and October 31, 2018, which are measured on a recurring basis during the period, segregated by level within the fair value hierarchy (in thousands):
Equity securities consist of marketable securities in Calavo common stock. At April 30, 2019 and October 31, 2018, the Company owned 250,000 shares, representing approximately 1.4% of Calavo’s outstanding common stock. These securities are measured at fair value by quoted market prices and changes in fair value are included in the statement of operations subsequent to the adoption of ASU 2016-01. With the adoption of FASB ASU 2016-01 on November 1, 2018, changes in the fair value of the marketable securities result in gains or losses recognized in net income. The Company recorded an unrealized gains (losses) of $3,612,000 and $(298,000) during the three and six months ended April 30, 2019, respectively, which is included in other income (expense) in the consolidated statements of operations. The Company recorded unrealized holding gains of $2,010,000 ($1,421,000 net of tax) and $6,000,000 ($4,242,000 net of tax), during the three and six months ended April 30, 2018, which were included in AOCI in the consolidated balance sheet. Calavo’s stock price at April 30, 2019 and October 31, 2018 was $95.81 and $97.00 per share, respectively. Prior to the adoption of ASU 2016-01, these equity securities were classified as available-for-sale securities and changes in fair value were recorded in AOCI net of tax. |
Concentrations |
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Risks and Uncertainties [Abstract] | |
Concentrations | Concentrations Lemons procured from third-party growers were 59% and 43% of lemon supply in the three months ended April 30, 2019 and 2018, respectively. Lemons procured from third-party growers were 59% and 47% of lemon supply in the six months ended April 30, 2019 and 2018, respectively, of which one third-party grower was 10% of lemon supply at April 30, 2019. The Company sells all of its avocado production to Calavo and the majority of its oranges and specialty citrus to a third-party packing house. |
Prepaid Expenses and Other Current Assets |
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Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Prepaid Expenses and Other Current Assets | repaid Expenses and Other Current Assets Prepaid expenses and other current assets consist of the following (in thousands):
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Real Estate Development |
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Real Estate [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Real Estate Development | Real Estate Development Real estate development assets are comprised primarily of land and land development costs and consist of the following (in thousands):
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. On November 10, 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 (the “LLC” or “Joint Venture”) as the development entity, contributed its East Area I property to the LLC and sold a 50% interest in the LLC to Lewis for $20,000,000. The Company and the Joint Venture also entered into a Retained Property Development Agreement on the Transaction Date (the "Retained Property Agreement"). Under the terms of the Retained Property Agreement, the Joint Venture transferred certain contributed East Area I property, which is entitled for commercial development, back to the Company (the "Retained Property") and arranged for the design and construction of certain improvements to the Retained Property, subject to certain reimbursements by the Company. In August 2018, the Retained Property, was transferred back to the Company. The net carrying value of the Retained Property as of April 30, 2019 and October 31, 2018 was $10,613,000 and $10,408,000, respectively, and classified as real estate development. Further, on the Transaction Date, the Joint Venture and the Company entered into a Lease Agreement (the "Lease Agreement"), pursuant to which the Joint Venture would lease certain of the contributed East Area I property back to the Company for continuation of agricultural operations, and certain other permitted uses, on the property until the Joint Venture required the property for development. In December 2018, the Company terminated the Lease Agreement pursuant to the terms therein. The Company’s sale of an interest in the LLC in which the Company’s contributed property comprises the LLC’s primary asset, combined with the Lease Agreement was considered a sale-leaseback transaction under FASB ASC 840, Leases, because of the Company’s continuing involvement in the property in the form of its agricultural operations. Accordingly, the property was carried on 7. Real Estate Development (continued) East Area I, Retained Property and East Area II (continued) the consolidated balance sheet as real estate development, rather than being classified as an equity investment and a sale-leaseback deferral had been recorded for the $20,000,000 payment made by Lewis for the purchase of the LLC interest. Lease expense associated with the Lease Agreement was not required under sale-leaseback accounting since the Company was treated as though it continued to own the property. During the three and six months ended April 30, 2018, the Company recorded $5,699,000 and $8,425,000, respectively, of real estate development costs and corresponding increases in the sale-leaseback deferral to recognize real estate development costs capitalized by the LLC. There were no repayment requirements for the sale-leaseback deferral. When the Lease Agreement was terminated in December 2018 control of the property transferred to the Joint Venture and therefore, the Company reduced the sale lease-back deferral and corresponding real estate development by $58,330,000 and reclassified $33,353,000 to equity in investments upon derecognition of the real estate development. As the fair value of the Company’s ownership interest in the Joint Venture approximated the Company’s historical basis in the real estate development at the inception of the Joint Venture, no gain or loss was recorded. The Company made contributions to the Joint Venture of $4,000,000 and $3,500,000 in the six months ended April 30, 2019 and 2018, respectively. Additionally, the Company recorded equity income, net of amortization of basis differences, of $2,270,000 for both the three and six months ended April 30, 2019. In February and March 2019, the Company announced that its Joint Venture with Lewis closed the sales of the initial residential lots representing a total of 174 residential units. Templeton Santa Barbara, LLC The real estate development parcels within the Templeton Santa Barbara, LLC project are described as The Terraces at Pacific Crest (“Pacific Crest”), and Sevilla. The net carrying values of Pacific Crest and Sevilla were $2,481,000 and $2,543,000, respectively, as of April 30, 2019 and October 31, 2018. These projects were idle during the six months ended April 30, 2019 and 2018 and, as such, no costs were capitalized and expenses were insignificant. In October 2018, the Company began negotiations to sell its Pacific Crest and Sevilla properties for a combined total price of $5,200,000. As a result, the Company recorded impairment charges on Pacific Crest and Sevilla of $769,000 and $789,000, respectively, in October 2018. These negotiations have not resulted in a sale and the Company is actively marketing these properties. At April 30, 2019 and October 31, 2018, the $2,481,000 carrying value of Pacific Crest and the $2,543,000 carrying value of Sevilla were classified as held for sale and included in prepaid expenses and other current assets. |
Equity in Investments |
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Equity Method Investments and Joint Ventures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity in Investments | Equity in Investments Equity in investments consist of the following (in thousands):
The Rosales equity investment includes the Company’s 35% interest acquired in fiscal year 2014 and an additional 12% interest acquired with the purchase of PDA in fiscal year 2017. The Company’s investment in Rosales is accounted for using the equity method of accounting based on the sum of its direct and indirect ownership. The Limoneira Lewis Community Builders, LLC investment balance includes the value of the Company's ownership interest in the Joint Venture as described in Note 7 - Real Estate Development. 8. Equity in Investments (continued) Unconsolidated Significant Subsidiary The LLC investment balance includes the value of the Company's ownership interest in the LLC. In accordance with Rule 10-01(b)(1) of Regulation S-X, which applies for 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. Rule 10-01(b)(1) of Regulation S-X requires summarized income statement information of an equity method investee in an interim report if either of the two tests exceed 20%. During the current quarter, this threshold was met for the LLC and thus requires summarized income statement information in this Quarterly Report on Form 10-Q. The following is unaudited summarized financial information for the LLC (in thousands):
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Other Assets |
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Other Assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Assets | Other Assets Other assets consist of the following (in thousands):
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Accrued Liabilities |
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Accounts Payable and Accrued Liabilities, Current [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Liabilities | Accrued Liabilities Accrued liabilities consist of the following (in thousands):
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Long-Term Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Debt | Long-Term Debt Long-term debt is comprised of the following (in thousands):
On June 20, 2017, the Company entered into a Master Loan Agreement (the “Loan Agreement”) with Farm Credit West, FLCA (“Farm Credit West”) which includes a Revolving Credit Supplement and a Non-Revolving Credit Supplement (the “Supplements”). Proceeds from the Supplements were used to pay down all the remaining outstanding indebtedness under the revolving credit facility the Company had with Rabobank, N.A. On January 29, 2018, the Company amended the Revolving Credit Supplement to increase the borrowing capacity from $60,000,000 to $75,000,000. The Supplements provide aggregate borrowing capacity of $115,000,000 comprised of $75,000,000 under the Revolving Credit Supplement and $40,000,000 under the Non-Revolving Credit Supplement. The borrowing capacity based on collateral value was $115,000,000 at April 30, 2019. All indebtedness under the Loan Agreements, including any indebtedness under the Supplements, is secured by a first lien on 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 Loan Agreement includes customary default provisions that provide should an event of default occur, Farm Credit West, at its option, may declare all or any portion of the indebtedness under the Loan Agreement to be immediately due and payable without demand, notice of non-payment, 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. Interest is capitalized on non-bearing orchards, real estate development projects and significant construction in progress. The Company capitalized interest of $344,000 and $372,000 during the three months ended April 30, 2019 and 2018, respectively, and $611,000 and $949,000 during the six months ended April 30, 2019 and 2018, respectively. Capitalized interest is included in property, plant and equipment and real estate development in the Company’s consolidated balance sheets. |
Basic and Diluted Net (Loss) Income per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basic and Diluted Net (Loss) Income per Share | Basic and Diluted Net (Loss) Income per Share Basic net income (loss) 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 income (loss) per common share is calculated using the weighted-average number of common shares outstanding during the period plus the dilutive effect of conversion of unvested, restricted stock and preferred stock. The computations for basic and diluted net (loss) income per common share are as follows (in thousands, except per share amounts):
Diluted (losses) earnings per common share are computed using the more dilutive method of either the two-class method or the treasury 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. The Company excluded 140,000 and 94,000, unvested, restricted shares, as calculated under the treasury stock method, from its computation of diluted (losses) earnings per share for the three months ended April 30, 2019 and 2018, respectively, and 219,000 and 93,000 for the six months ended April 30, 2019 and 2018, respectively. |
Related-Party Transactions |
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Apr. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | Related-Party Transactions The Company rents certain of its residential housing assets to employees on a month-to-month basis. The Company recorded $182,000 and $178,000 of rental revenue from employees in the three months ended April 30, 2019 and 2018, respectively, and $360,000 and $355,000 in the six months ended April 30, 2019 and 2018, respectively. There were no rental payments due from employees at April 30, 2019 or October 31, 2018. The Company has representation on the boards of directors of the mutual water companies in which the Company has investments. The Company recorded capital contributions and purchased water and water delivery services from such mutual water companies, in aggregate, of $81,000 and $166,000 in the three months ended April 30, 2019 and 2018, respectively, and $858,000 and $886,000 in the six months ended April 30, 2019 and 2018, respectively. Capital contributions are included in other assets in the Company’s consolidated balance sheets and purchases of water and water delivery services are included in agribusiness expense in the Company’s consolidated statements of operations. Water payments due to the mutual water companies were, in aggregate, $681,000 and $142,000 at April 30, 2019 and October 31, 2018, respectively. 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 of $540,000 and $508,000 from the association in the three months ended April 30, 2019 and 2018, respectively, and $856,000 and $815,000 in the six months ended April 30, 2019 and 2018, respectively, which are included in agribusiness expense in the Company’s consolidated statements of operations. Payments due to the cooperative were $185,000 and $142,000 at April 30, 2019 and October 31, 2018, respectively. 13. Related-Party Transactions (continued) The Company has an investment in and representation on the board of directors of Calavo and Calavo has an investment in and had representation on the board of directors of the Company. The Company recorded dividend income of $250,000 and $285,000 in the six months ended April 30, 2019 and 2018, respectively, on its investment in Calavo, which is included in other income (expense), net in the Company’s consolidated statements of operations. The Company paid $255,000 and $216,000 of dividends to Calavo for the six months ended April 30, 2019 and 2018, respectively. The Company had $540,000 and $935,000 in avocado sales to Calavo for the three months ended April 30, 2019 and 2018, respectively, and $543,000 and $935,000 for the six months ended April 30, 2019 and 2018, respectively. which are included in agribusiness revenues in the Company's consolidated statements of operations. There were $467,000 and zero amounts receivable by the Company from Calavo at April 30, 2019 and October 31, 2018, respectively. The Company leases office space to Calavo and received rental income of $80,000 and $73,000 in the three months ended April 30, 2019 and 2018, respectively, and $159,000 and $145,000 in the six months ended April 30, 2019 and 2018, respectively, which is included in rental operations revenues in the Company’s consolidated statements of operations. The Company purchased $1,000 and $4,000 of storage services from Calavo in the six months ended April 30, 2019 and 2018, respectively. Amounts due to Calavo at April 30, 2019 and October 31, 2018 were zero and $3,000, respectively. Certain members of the Company’s board of directors market lemons through the Company. The aggregate amount of lemons procured from entities owned or controlled by members of the board of directors was $232,000 and $1,158,000 in the three months ended April 30, 2019 and 2018, respectively, and $609,000 and $1,386,000 in the six months ended April 30, 2019 and 2018, respectively, which are included in agribusiness expense in the Company’s consolidated statements of operations. Payments due to these board members were $500,000 and $487,000 at April 30, 2019 and October 31, 2018, respectively. Additionally, the Company leases approximately 31 acres of orchards from entities affiliated with a member on the board of directors and incurred $23,000 and $11,000 of lease expense related to these leases in the six months ended April 30, 2019 and 2018, respectively. On July 1, 2013, the Company and Cadiz Real Estate LLC (“Cadiz”), a wholly-owned subsidiary of Cadiz Inc., entered into a long-term lease agreement (the “Lease”) for a minimum of 320 acres, with options to lease up to an additional 960 acres, located within 9,600 zoned agricultural acres owned by Cadiz in eastern San Bernardino County, California. The initial term of the Lease runs for 20 years and the annual base rental rate 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. 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. Additionally, this board member is an attorney with a law firm that provided services of $12,000 and $10,000 to the Company during the three months ended April 30, 2019 and 2018, respectively, and $14,000 and $19,000 during the six months ended April 30, 2019 and 2018, respectively. Payments due to the law firm were zero and $67,000 at April 30, 2019 and October 31, 2018, respectively. The Company incurred lease and farming expenses of $22,000 and $50,000 in the three months ended April 30, 2019 and 2018, respectively, and $88,000 and $86,000 in the six months ended April 30, 2019 and 2018, respectively, which are recorded in agribusiness expense in the Company’s consolidated statements of operations. On February 5, 2015, the Company entered into a Modification of Lease Agreement (the “Amendment”) with Cadiz. The Amendment, among other things, increased by 200 acres the amount of property leased by the Company under the lease agreement dated July 1, 2013. In connection with the Amendment, the Company paid a total of $1,212,000 to acquire existing lemon trees and irrigations systems from Cadiz and a Cadiz tenant. In February 2016, Cadiz assigned this lease to Fenner Valley Farms, LLC (“Fenner”), a subsidiary of Water Asset Management, LLC (“WAM”). An entity affiliated with WAM is the holder of 9,300 shares of Limoneira Company Series B-2 convertible preferred stock. Amounts due to Fenner were $80,000 and $100,000 at April 30, 2019 and October 31, 2018, respectively. The Company has representation on the board of directors of Colorado River Growers, Inc. (“CRG”), a non-profit cooperative association of fruit growers engaged in the agricultural harvesting business in Yuma County, Arizona. The Company paid harvest costs to CRG of zero in the three months ended April 30, 2019 and 2018. The Company paid harvest costs to CRG of $3,841,000 and $2,451,000 in the six months ended April 30, 2019 and 2018, respectively. Such amounts are included in agribusiness expense in the Company’s consolidated statements of operations. Additionally, Associated provided harvest management and administrative services to CRG in the amounts of zero during the three months ended April 30, 2019 and 2018. Associated provided harvest management and administrative services to CRG in the amounts of $306,000 and $218,000 during the six months ended April 30, 2019 and 2018, respectively. Such amounts are included in agribusiness revenues in the Company’s consolidated statements of operations. There was zero and $232,000 due to Associated from CRG at April 30, 2019 and October 31, 2018, respectively, which is included in accounts receivable, net in the Company’s consolidated balance sheets. 13. Related-Party Transactions (continued) The Company has representation on the board of directors of Yuma Mesa Irrigation and Drainage District (“YMIDD”). The Company purchased water in the amounts of $53,000 and $65,000 during the three months ended April 30, 2019 and 2018, respectively, and $85,000 and $149,000 from YMIDD during the six months ended April 30, 2019 and 2018, respectively, which is included in agribusiness expenses in the Company’s consolidated statements of operations. There were no amounts due to YMIDD at April 30, 2019 or October 31, 2018. The Company has a 1.3% interest in Limco Del Mar, Ltd. (“Del Mar”) as a general partner and a 26.8% interest as a limited partner. The Company provides Del Mar with farm management, orchard land development and accounting services and received expense reimbursements of $45,000 and $43,000 in the three months ended April 30, 2019 and 2018, respectively, and $80,000 and $95,000 in the six months ended April 30, 2019 and 2018, respectively. The Company procures lemons from Del Mar and fruit proceeds (due from) payable to Del Mar were $(2,000) and $709,000 at April 30, 2019 and October 31, 2018, respectively, and are included in grower’s payable in the Company’s consolidated balance sheets. The Company received no cash distributions and recorded equity in (losses) earnings of this investment of $(139,000) and $(45,000) in the three months ended April 30, 2019 and 2018, respectively, and $66,000 and $118,000, in the six months ended April 30, 2019 and 2018, respectively. On August 14, 2014, the Company’s wholly owned subsidiary, Limoneira Chile SpA, invested approximately $1,750,000 for a 35% interest in Rosales, a citrus packing, marketing and sales business located in La Serena, Chile. The Company purchased an additional 12% interest in Rosales with the February 2017 acquisition of PDA. The Company recognized zero and $782,000 of lemon sales to Rosales in the three months ended April 30, 2019 and 2018, respectively, and $521,000 and $923,000 in the six months ended April 30, 2019 and 2018, respectively. Additionally, San Pablo recognized aggregate lemon and orange sales of $720,000 and $780,000 to Rosales for the three and six months ended April 30, 2019, respectively. PDA recognized aggregate lemon and orange sales of $685,000 and $421,000 to Rosales in the three months ended April 30, 2019 and 2018, respectively, and $765,000 and $703,000 in the six months ended April 30, 2019 and 2018, respectively, which are recorded in agribusiness revenues in the Company’s consolidated statements of operations. The aggregate amount of lemons and oranges procured from Rosales was zero in the three months ended April 30, 2019 and 2018 and $359,000 and zero in the six months ended April 30, 2019 and 2018, respectively. Amounts due from (payable to) Rosales were $234,000 and $(65,000) at April 30, 2019 and October 31, 2018, respectively. The Company recorded equity in (losses) earnings of this investment of $(119,000) and $3,000 in the three months ended April 30, 2019 and 2018, respectively, and amortization of fair value basis differences of $85,000 in the three months ended April 30, 2019 and 2018. The Company recorded equity in losses of this investment of $(196,000) and $(33,000) in the six months ended April 30, 2019 and 2018, respectively, and amortization of fair value basis differences of $169,000 in the six months ended April 30, 2019 and 2018. The Company received $283,000 and zero cash distributions from this equity investment in the six months ended April 30, 2019 and 2018, respectively. |
Income Taxes |
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Apr. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company’s estimated annual effective blended tax rate for fiscal year 2019 is approximately 28.2%. A 26.7% estimated effective blended tax rate, after discrete items, was utilized by the Company in the six months ended April 30, 2019 to calculate its income tax provision. The Company has no uncertain tax positions as of April 30, 2019. The Company’s policy is to recognize interest expense and penalties related to income tax matters as a component of income tax expense. The Company has not accrued any interest and penalties associated with uncertain tax positions as of April 30, 2019. The Company applied the guidance in Staff Accounting Bulletin No. 118 (“SAB 118”) when accounting for the enactment-date effects of the 2017 Act throughout fiscal year 2018. At January 31, 2019, the Company completed its evaluation for all of the enactment-date income tax effects of the 2017 Act and no material adjustments noted to be made on the provisional amounts recorded at January 31, 2018. |
Retirement Plans |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Plans | Retirement Plans The Limoneira Company Retirement Plan (the “Plan”) is a noncontributory, defined benefit, single employer pension plan, which provides retirement benefits for all eligible employees. Benefits paid by the Plan are 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. 15. Retirement Plans (continued) The Plan is funded consistent with the funding requirements of federal law and regulations. There were funding contributions of $150,000 during both three months ended April 30, 2019 and 2018, respectively, and $300,000 during both six months ended April 30, 2019 and 2018, respectively. The components of net periodic pension cost for the Plan for the three and six months ended April 30, 2019 and 2018 were as follows (in thousands):
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Contingencies |
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Apr. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | 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. |
Stock-based Compensation |
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Apr. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock-based Compensation | Stock-based Compensation The Company has a stock-based compensation plan (the “Stock Plan”) that allows for the grant of common stock of the Company to members of management based on achievement of certain annual financial performance and other criteria. The number of shares granted is based on a percentage of the employee’s base salary divided by the stock price on the grant date. Shares granted under the Stock Plan vest over two to five-year periods. In December 2018, 40,094 shares of common stock with a per share value of $18.74 were granted to management under the Stock Plan for fiscal year 2018 performance, resulting in total compensation expense of approximately $751,000, with $343,000 recognized in the year ended October 31, 2018 and the balance to be recognized over the next two years as the shares vest. In addition, 90,000 shares of common stock with a per share value of $19.84 were granted to key executives under the Stock Plan, resulting in a total compensation expense of approximately $1,786,000, to be recognized equally over the next three years as the shares vest. During January 2019 and 2018, 15,642 and 14,033 shares, respectively, of common stock were granted to the Company’s non-employee directors under the Company’s stock-based compensation plans. The Company recognized $339,000 and $309,000 of stock-based compensation to non-employee directors during the six months ended April 30, 2019 and 2018, respectively. |
Segment Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | Segment Information The Company operates in six reportable operating segments: fresh lemons, lemon packing, avocados, other agribusiness, rental operations and real estate development. 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 expenses and third-party grower costs relative to fresh lemons. The lemon packing segment includes 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, farming and harvesting of oranges, specialty citrus and other crops. The rental operations segment includes housing and commercial rental operations, leased land and organic recycling. The real estate development segment includes real estate development operations. 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, other income, interest expense and income taxes, or specifically identify them to its operating segments. The Company 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. Segment information for the three months ended April 30, 2019 (in thousands):
Segment information for the three months ended April 30, 2018 (in thousands):
Segment information for the six months ended April 30, 2019 (in thousands):
18. Segment Information (continued) Segment information for the six months ended April 30, 2018 (in thousands):
The following table sets forth revenues by category, by segment for the three and six months ended April 30, 2019 and 2018 (in thousands):
(1) During the first quarter of fiscal 2019, the Company adopted a comprehensive new revenue recognition standard using a modified retrospective method that does not restate prior periods to be comparable to the current period presentation. The adoption of this guidance primarily impacted the presentation of certain brokered fruit sales revenue received and the related cost of fruit incurred by the Company. The adoption of this guidance resulted in revenue within the Company’s fresh lemon segment of $162,000 and $456,000, during the three and six months ended April 30, 2019, respectively. See Note 2 - Summary of Significant Accounting Policies for additional information. |
Subsequent Events |
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Apr. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events The Company has evaluated events subsequent to April 30, 2019 through the date of this filing, to assess the need for potential recognition or disclosure in this Quarterly Report on Form 10-Q. Based upon this evaluation, except as described below or 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. Acquisition On May 30, 2019, the Company acquired a 51% interest in a joint venture formed with FGF Trapani (“FGF”), a multi-generational, family owned citrus operation in Argentina, and acquired a 51% interest in an Argentine Trust that holds a 75% interest in Finca Santa Clara (“Santa Clara”), a ranch with approximately 1,200 acres of planted lemons. The joint venture will control the trust and operate under the name Trapani Fresh to grow, pack, market and sell fresh citrus. Total consideration paid for the Company’s interest in Trapani Fresh was $15,000,000. $7,500,000 of consideration was paid to FGF on May 30, 2019. The remaining $7,500,000 of consideration was advanced to FGF as prepayments for the 25% interest in Santa Clara retained by FGF. $4,000,000 was advanced in February 2019 and $3,500,000 was advanced in May 2019. Title to this 25% of Santa Clara will transfer to Trapani Fresh by 2024. These advances will be accounted for as an acquisition of property by the Company in May 2019. The Company is currently evaluating the accounting treatment for its 51% interest in Trapani Fresh and anticipates that it will consolidate Trapani Fresh as a business combination and reflect FGF’s 49% interest in Trapani Fresh as a non-controlling interest in its consolidated financial statements. |
Summary of Significant Accounting Policies (Policies) |
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Apr. 30, 2019 | |||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||
Revenue Recognition | Revenue Recognition On November 1, 2018, the Company adopted Financial Accounting Standards Board (“FASB”) – Accounting Standards Update (“ASU”) ASU 2014-09, Revenue from Contracts with Customers (Topic 606), that amends the guidance for the recognition of revenue from contracts with customers. The results for the reporting period beginning after November 1, 2018 are presented in accordance with the new standard which was adopted using the modified-retrospective method and applied to those contracts that were not completed as of November 1, 2018. There was no net effect of applying the standard and therefore no cumulative adjustment to retained earnings was necessary at the date of initial application. As a result comparative information has not been restated and the results for the reporting periods before November 1, 2018 continue to be reported under the accounting standards and policies in effect for those periods. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps:
The Company determined the appropriate method by which it recognizes revenue by analyzing the nature of the products or services being provided as well as the terms and conditions of contracts or arrangements entered into with its customers. The Company accounts 2. Summary of Significant Accounting Policies (continued) Revenue Recognition (continued) for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. A contract's transaction price is allocated to each distinct good or service (i.e., performance obligation) identified in the contract and each performance obligation is valued based on its estimated relative standalone selling price. The Company recognizes the majority of its revenue at a point in time when it satisfies a performance obligation and transfers control of the product to the respective customer. The amount of revenue that is recognized is based on the transaction price, which represents the invoiced amount and includes estimates of variable consideration such as allowances for estimated customer discounts or concessions, where applicable. The amount of variable consideration included in the transaction price may be constrained and is included only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized under the contract will not occur in a future period. Upon adoption, the Company changed the accounting of certain brokered fruit sales. Under previous guidance, the Company was considered an agent and recorded revenues for certain brokered fruit sales and the costs of such fruit on a net basis in its consolidated statement of operations. Under the new revenue recognition standard, the Company is considered a principal in the transaction and revenues are recorded on a gross basis in the Company’s consolidated statement of operations with the related cost of such fruit included in agribusiness costs and expenses. This change resulted in the recognition of additional agribusiness revenue and agribusiness costs and expenses of $162,000 and $168,000, respectively, during the three months ended April 30, 2019 and $456,000 and $420,000, respectively, during the six months ended April 30, 2019. Had it used the previous revenue recognition guidance, the Company would have recorded insignificant net agribusiness revenue for the three and six months ended April 30, 2019. No cumulative adjustment to retained earnings was necessary as there is no net effect of applying the standard. Agribusiness revenue - Revenue from lemon sales is generally recognized at a point in time when the customer takes control of the fruit from the Company’s packinghouse, which aligns with the transfer of title to the customer. The Company has elected to treat any shipping and handling costs incurred after control of the goods has been transferred to the customer as agribusiness costs. The Company’s avocados, oranges, specialty citrus and other specialty crops are packed and sold by Calavo and other third-party packinghouses. The Company delivers all of its avocado production from its orchards to Calavo. These avocados are then packed by Calavo at its packinghouse and sold and distributed under Calavo brands to its customers primarily in the United States and Canada. The Company’s arrangements with other third-party packinghouses related to its oranges, specialty citrus and other specialty crops are similar to its arrangement with Calavo. The Company’s arrangements with its third-party packinghouses are such that the Company is the producer and supplier of the product and the third-party packinghouses are the Company’s customers. The revenues the Company recognizes related to the fruits sold to the third-party packinghouses are based on the volume and quality of the fruits delivered, the market price for such fruit, less the packinghouses’ charges to pack and market the fruit. Such packinghouse charges include the grading, sizing, packing, cooling, ripening and marketing of the related fruit. The Company controls the product until it is delivered to the third-party packinghouses at which time control of the product is transferred to the third-party packinghouses and revenue is recognized. Such third-party packinghouse charges are recorded as a reduction of revenue as they are not for distinct services. The identifiable benefit the Company receives from the third-party packinghouses for packaging and marketing services cannot be sufficiently separated from the third-party packinghouses’ purchase of the Company’s products. In addition, the Company is not able to reasonably estimate the fair value of the benefit received from the third-party packinghouses for such services and as such, these costs are characterized as a reduction of revenue in the Company’s consolidated statements of operations. Revenue from the sales of certain of the Company’s agricultural products is recorded based on estimated proceeds provided by certain of the Company’s sales and marketing partners (Calavo and other third-party packinghouses) due to the time between when the product is delivered by the Company and the closing of the pools for such fruits at the end of each month or harvest period. Calavo and other third-party packinghouses are agricultural cooperatives or function in a similar manner as an agricultural cooperative. The Company estimates the variable consideration using the most likely amount method, with the most likely amount being the quantities actually shipped extended by the prices reported by Calavo and other third-party packinghouses. Revenue is recognized at time of delivery to the packinghouses relating to fruits that are in pools that have not yet closed at month end if: (a) the related fruits have been delivered 2. Summary of Significant Accounting Policies (continued) Revenue Recognition (continued) to and accepted by Calavo and other third-party packinghouses (i.e., Calavo and other third-party packinghouses obtain control) and (b) sales price information has been provided by Calavo and other third-party packinghouses (based on the marketplace activity for the related fruit) to estimate with reasonable certainty the final selling price for the fruit upon the closing of the pools. In such instances the Company has the present right to payment and Calavo and other third-party packinghouses have the present right to direct the use of, and obtain substantially all of the remaining benefits from, the delivered fruit. The Company does not expect that there is a high likelihood that a significant reversal in the amount of cumulative revenue recognized in the early periods of the pool will occur once the final pool prices have been reported by the packinghouses. Historically, the revenue that is recorded based on the sales price information provided to the Company by Calavo and other third-party packinghouses at the time of delivery, have not materially differed from the actual amounts that are paid after the monthly or harvest period pools are closed. The Company has entered into brokerage arrangements with third-party international packinghouses. In certain of these arrangements, the Company has the exclusive ability to direct the use of and obtains substantially all of the remaining benefits from the fruit, and is therefore acting as a principal. As such, the Company records the related revenue and costs of the fruit gross in the consolidated statement of operations. Revenue from crop insurance proceeds is recorded when the amount can be reasonably determined and upon establishment of the present right to payment. Rental Revenue - Minimum rental revenues are generally recognized on a straight-line basis over the respective initial lease term. Contingent rental revenues are contractually defined as to the percentage of rent received by the Company and are based on fees collected by the lessee. Such revenues are recognized when actual results, based on collected fees reported by the tenant, are received. The Company's rental arrangements generally require payment on a monthly or quarterly basis. Real Estate Development Revenue - The Company recognizes revenue on real estate development projects with customers at a point in time (i.e., the closing) when the Company satisfies the single performance obligation and transfers control of such real estate to a buyer. The transaction price, which is the amount of consideration the Company receives upon delivery of the completed real estate to the buyer, is allocated to this single obligation and is received at closing. Real estate development projects with non-customers are accounted for in accordance with Accounting Standards Code (“ASC”) 610-20, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets. |
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Recent Accounting Pronouncements | Recent Accounting Pronouncements FASB ASU 2016-01, Financial Instruments Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities The amendments in ASU 2016-01, among other things, require equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. Requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes. Requires separate presentation of financial assets and financial liabilities by measurement category and form of financial assets (i.e., securities or loans and receivables). Eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate fair value that is required to be disclosed for financial instruments measured at amortized cost. ASU 2016-01 is effective for public companies for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company’s adoption of this ASU on November 1, 2018 resulted in a cumulative-effect adjustment to the statement of financial position, with the Company reclassifying unrealized holding gains of $15,921,000, net of taxes, in Calavo common stock to retained earnings from accumulated other comprehensive income ("AOCI") at the date of adoption. In addition, the change in the fair value of Calavo common stock has been disclosed as a separate line item in the statement of operations subsequent to the adoption of ASU 2016-01. FASB ASU 2016-02, Leases (Topic 842) Under the new guidance, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: 2. Summary of Significant Accounting Policies (continued) Recent Accounting Pronouncements (continued)
Under the new guidance, lessor accounting is largely unchanged. Certain targeted improvements were made to align, where necessary, lessor accounting with the lessee accounting model and Topic 606, Revenue from Contracts with Customers. The new lease guidance simplified the accounting for sale and leaseback transactions primarily because lessees must recognize lease assets and lease liabilities. Lessees will no longer be provided with a source of off-balance sheet financing. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted. Lessees (for capital and operating leases) and lessors (for sales-type, direct financing, and operating leases) must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. Lessees and lessors may not apply a full retrospective transition approach. The ASU will be effective for the Company beginning in the first quarter of its fiscal year ending October 31, 2020. The Company is evaluating the effect this ASU may have on its consolidated financial statements, however it expects to apply the practical expedients provided in the ASU. Note 20 – Commitments and Contingencies of the notes to consolidated financial statements included in the Company's 2018 Annual Report on Form 10-K describes its operating lease arrangements as of October 31, 2018. FASB ASU 2017-07, Compensation — Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost The amendment requires that an employer report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. If a separate line item or items are used to present the other components of net benefit cost, that line item or items must be appropriately described. If a separate line item or items are not used, the line item or items used in the income statement to present the other components of net benefit cost must be disclosed. The amendment is effective for public business entities for annual periods beginning after December 15, 2017, including interim periods within those annual periods. The Company’s adoption of this ASU during the first quarter of fiscal year 2019 had no material impact on its consolidated financial statements. FASB ASU 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income This amendment provides financial statement preparers with an option to reclassify stranded tax effects within AOCI to retained earnings in each period in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act of 2017 (the "2017 Act") (or portion thereof) is recorded. The amendment is effective for all organizations for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. Organizations should apply the proposed amendment either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the 2017 Act is recognized. The Company early adopted this ASU on November 1, 2018, and as a result recorded a cumulative-effect reclassification in the statement of financial position to retained earnings from AOCI at the date of adoption of $1,724,000 related to the investment in Calavo and pension liability. FASB ASU 2018-14, Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans This amendment adds, removes and clarifies the disclosure requirements for employers that sponsor defined benefit pension or other post retirement plans. 2. Summary of Significant Accounting Policies (continued) Recent Accounting Pronouncements (continued) For public business entities, the amendments are effective for fiscal years ending after December 15, 2020. Early adoption is permitted. The Company is evaluating the effect this ASU may have on its consolidated financial statements. SEC Amendments to Certain Disclosure Requirements In August 2018, the SEC adopted amendments to certain disclosure requirements for a number of SEC rules, including Rule 3-04 of Regulation S-X. Rule 3-04 requires that a public registrant’s Form 10-Q include a reconciliation of changes in stockholders’ equity for each period for which a statement of comprehensive income is required to be filed. These amendments are effective for interim periods beginning after November 5, 2018, therefore the Company has included a separate statement of stockholders’ equity and temporary equity in this Quarterly Report on Form 10-Q. |
Acquisitions (Tables) |
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Apr. 30, 2019 | |||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||
Schedule of Asset Acquisition | Below is a summary of the fair value of the net assets acquired on the acquisition date based on a third-party valuation (in thousands):
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Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | Below is a summary of the fair value of the net assets acquired on the acquisition date based on a third-party valuation (in thousands):
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Fair Value Measurements (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following table sets forth the Company’s financial assets and liabilities as of April 30, 2019 and October 31, 2018, which are measured on a recurring basis during the period, segregated by level within the fair value hierarchy (in thousands):
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Prepaid Expenses and Other Current Assets (Tables) |
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Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consist of the following (in thousands):
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Real Estate Development (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Real Estate [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Real Estate Properties | Real estate development assets are comprised primarily of land and land development costs and consist of the following (in thousands):
|
Equity in Investments (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Method Investments and Joint Ventures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Equity in Investments | The following is unaudited summarized financial information for the LLC (in thousands):
Equity in investments consist of the following (in thousands):
|
Other Assets (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Assets | Other assets consist of the following (in thousands):
|
Accrued Liabilities (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Payable and Accrued Liabilities, Current [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accrued Liabilities | Accrued liabilities consist of the following (in thousands):
|
Long-Term Debt (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-term Debt Instruments | Long-term debt is comprised of the following (in thousands):
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Basic and Diluted Net (Loss) Income per Share (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | The computations for basic and diluted net (loss) income per common share are as follows (in thousands, except per share amounts):
|
Retirement Plans (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Benefit Costs | The components of net periodic pension cost for the Plan for the three and six months ended April 30, 2019 and 2018 were as follows (in thousands):
|
Segment Information (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Information by Segment | Segment information for the three months ended April 30, 2019 (in thousands):
Segment information for the three months ended April 30, 2018 (in thousands):
Segment information for the six months ended April 30, 2019 (in thousands):
18. Segment Information (continued) Segment information for the six months ended April 30, 2018 (in thousands):
The following table sets forth revenues by category, by segment for the three and six months ended April 30, 2019 and 2018 (in thousands):
(1) During the first quarter of fiscal 2019, the Company adopted a comprehensive new revenue recognition standard using a modified retrospective method that does not restate prior periods to be comparable to the current period presentation. The adoption of this guidance primarily impacted the presentation of certain brokered fruit sales revenue received and the related cost of fruit incurred by the Company. The adoption of this guidance resulted in revenue within the Company’s fresh lemon segment of $162,000 and $456,000, during the three and six months ended April 30, 2019, respectively. See Note 2 - Summary of Significant Accounting Policies for additional information. |
Fair Value Measurements (Schedule of Fair Value) (Details) - Fair Value, Recurring [Member] - USD ($) $ in Thousands |
Apr. 30, 2019 |
Oct. 31, 2018 |
---|---|---|
Assets at fair value: | ||
Equity securities | $ 23,953 | |
Equity securities | $ 24,250 | |
Level 1 [Member] | ||
Assets at fair value: | ||
Equity securities | 23,953 | |
Equity securities | 24,250 | |
Level 2 [Member] | ||
Assets at fair value: | ||
Equity securities | 0 | |
Equity securities | 0 | |
Level 3 [Member] | ||
Assets at fair value: | ||
Equity securities | $ 0 | |
Equity securities | $ 0 |
Fair Value Measurements (Textual) (Details) - USD ($) |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Apr. 30, 2019 |
Apr. 30, 2018 |
Apr. 30, 2019 |
Apr. 30, 2018 |
Oct. 31, 2018 |
Oct. 31, 2014 |
|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Ownership percentage | 35.00% | |||||
Unrealized gain (loss) on stock in Calavo Growers, Inc. | $ 3,612,000 | $ 0 | $ (298,000) | $ 0 | ||
Available-for-sale securities, change in unrealized holding gain (loss) before taxes | 2,010,000 | 6,000,000 | ||||
Available-for-sale securities, change in net unrealized holding gain, net of tax | $ 1,421,000 | $ 4,242,000 | ||||
Calavo Growers, Inc. [Member] | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Investment owned (in shares) | 250,000 | 250,000 | 250,000 | |||
Ownership percentage | 1.40% | 1.40% | 1.40% | |||
Equity method investment investee, price per share (in dollars per share) | $ 95.81 | $ 95.81 | $ 97.00 |
Concentrations (Details) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Apr. 30, 2019 |
Apr. 30, 2018 |
Apr. 30, 2019 |
Apr. 30, 2018 |
|
Supplier Concentration Risk [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk | 10.00% | |||
Lemons [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk | 59.00% | 43.00% | 59.00% | 47.00% |
Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands |
Apr. 30, 2019 |
Oct. 31, 2018 |
---|---|---|
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid insurance | $ 779 | $ 647 |
Prepaid supplies | 1,165 | 1,196 |
Lemon supplier advances | 508 | 170 |
Note receivable, net | 2,552 | 2,797 |
Real estate development held for sale | 5,024 | 5,024 |
Water assessment fees and other | 1,780 | 694 |
Prepaid expenses and other current assets | $ 11,808 | $ 10,528 |
Real Estate Development (Schedule of Real Estate Development) (Details) - USD ($) $ in Thousands |
Apr. 30, 2019 |
Oct. 31, 2018 |
---|---|---|
Real Estate Properties [Line Items] | ||
Real estate development assets | $ 16,156 | $ 107,162 |
East Area I [Member] | ||
Real Estate Properties [Line Items] | ||
Real estate development assets | 0 | 91,357 |
Retained Property [Member] | ||
Real Estate Properties [Line Items] | ||
Real estate development assets | 10,613 | 10,408 |
East Areas II [Member] | ||
Real Estate Properties [Line Items] | ||
Real estate development assets | $ 5,543 | $ 5,397 |
Equity in Investments (Schedule of Equity in Investments) (Details) - USD ($) $ in Thousands |
Apr. 30, 2019 |
Oct. 31, 2018 |
---|---|---|
Schedule of Equity Method Investments [Line Items] | ||
Equity in investments | $ 57,470 | $ 18,698 |
Limoneira Lewis Community Builders, LLC [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Equity in investments | 53,416 | 14,060 |
Limco Del Mar, Ltd. [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Equity in investments | 2,001 | 1,935 |
Rosales [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Equity in investments | 1,543 | 2,191 |
Romney Property Partnership [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Equity in investments | $ 510 | $ 512 |
Equity in Investments (Textual) (Details) |
Oct. 31, 2017 |
Oct. 31, 2014 |
---|---|---|
Schedule of Equity Method Investments [Line Items] | ||
Ownership percentage | 35.00% | |
Limoneira Company [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Additional ownership percentage | 12.00% |
Equity in Investments Equity in Investments (Financial Information for Equity in Investments) (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Apr. 30, 2019 |
Apr. 30, 2018 |
|
Schedule of Equity Method Investments [Line Items] | ||
Net income (loss) | $ 3,481 | $ (83) |
Limoneira Lewis Community Builders [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Revenues | 30,354 | 0 |
Cost of land sold | 22,005 | 0 |
Operating expenses | 107 | 83 |
Net income (loss) | $ 8,242 | $ (83) |
Other Assets (Details) - USD ($) $ in Thousands |
Apr. 30, 2019 |
Oct. 31, 2018 |
---|---|---|
Other Assets [Abstract] | ||
Investments in mutual water companies | $ 5,486 | $ 5,026 |
Acquired water and mineral rights | 3,841 | 3,783 |
Deposit for land purchase | 608 | 593 |
Deferred lease assets and other | 335 | 396 |
Notes receivable | 815 | 566 |
Revolving funds and memberships | 244 | 267 |
Acquired trade names, trademarks and customer relationships | 2,270 | 2,442 |
Goodwill | 1,435 | 1,431 |
Payments to FGF Trapani | 4,000 | 0 |
Other assets | $ 19,034 | $ 14,504 |
Accrued Liabilities (Details) - USD ($) $ in Thousands |
Apr. 30, 2019 |
Oct. 31, 2018 |
---|---|---|
Accounts Payable and Accrued Liabilities, Current [Abstract] | ||
Compensation | $ 2,258 | $ 2,784 |
Property taxes | 21 | 785 |
Interest | 342 | 297 |
Deferred rental income and deposits | 460 | 497 |
Lease expense | 78 | 378 |
Lemon supplier payables | 53 | 1,214 |
Capital expenditures and other | 1,616 | 1,769 |
Accrued liabilities | $ 4,828 | $ 7,724 |
Long-Term Debt (Textual) (Details) - USD ($) |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Apr. 30, 2019 |
Apr. 30, 2018 |
Apr. 30, 2019 |
Apr. 30, 2018 |
Jan. 29, 2018 |
Jun. 20, 2017 |
|
Debt Instrument [Line Items] | ||||||
Interest costs capitalized | $ 344,000 | $ 372,000 | $ 611,000 | $ 949,000 | ||
Revolving Credit Facility [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 75,000,000 | |||||
Farm Credit West Master Loan [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 115,000,000 | $ 115,000,000 | ||||
Farm Credit West Master Loan [Member] | Revolving Credit Facility [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 75,000,000 | $ 60,000,000 | ||||
Farm Credit West Master Loan [Member] | Non-Revolving Credit Facility [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 40,000,000 |
Basic and Diluted Net (Loss) Income per Share (Textual) (Details) - shares shares in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Apr. 30, 2019 |
Apr. 30, 2018 |
Apr. 30, 2019 |
Apr. 30, 2018 |
|
Restricted Stock [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 140 | 94 | 219 | 93 |
Income Taxes (Details) |
6 Months Ended |
---|---|
Apr. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Effective blended tax rate | 28.20% |
Effective income tax rate | 26.70% |
Retirement Plans (Textual) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Apr. 30, 2019 |
Apr. 30, 2018 |
Apr. 30, 2019 |
Apr. 30, 2018 |
|
Retirement Benefits [Abstract] | ||||
Average earnings | 5 years | |||
Contributions | $ 150 | $ 150 | $ 300 | $ 300 |
Retirement Plans (Net Benefit Costs) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Apr. 30, 2019 |
Apr. 30, 2018 |
Apr. 30, 2019 |
Apr. 30, 2018 |
|
Retirement Benefits [Abstract] | ||||
Administrative expenses | $ 47 | $ 63 | $ 94 | $ 126 |
Interest cost | 207 | 192 | 414 | 385 |
Expected return on plan assets | (272) | (268) | (544) | (536) |
Prior service cost | 11 | 11 | 22 | 22 |
Recognized actuarial loss | 100 | 175 | 201 | 350 |
Net periodic benefit cost | $ 93 | $ 173 | $ 187 | $ 347 |
Stock-based Compensation (Textual) (Details) - Share-based Payment Arrangement [Member] - USD ($) $ / shares in Units, $ in Thousands |
1 Months Ended | 6 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|---|
Jan. 31, 2019 |
Dec. 31, 2018 |
Jan. 31, 2018 |
Apr. 30, 2019 |
Apr. 30, 2018 |
Oct. 31, 2018 |
|
Management [Member] | ||||||
Class of Stock [Line Items] | ||||||
Vesting period | 2 years | |||||
Shares granted (in shares) | 40,094 | |||||
Common stock per share (in dollars per share) | $ 18.74 | |||||
Cost from stock compensation | $ 751 | |||||
Share-based compensation expense | $ 343 | |||||
Executive Officer [Member] | ||||||
Class of Stock [Line Items] | ||||||
Vesting period | 3 years | |||||
Shares granted (in shares) | 90,000 | |||||
Common stock per share (in dollars per share) | $ 19.84 | |||||
Cost from stock compensation | $ 1,786 | |||||
Nonemployee Directors [Member] | ||||||
Class of Stock [Line Items] | ||||||
Shares granted (in shares) | 15,642 | 14,033 | ||||
Share-based compensation expense | $ 339 | $ 309 | ||||
Minimum [Member] | ||||||
Class of Stock [Line Items] | ||||||
Vesting period | 2 years | |||||
Maximum [Member] | ||||||
Class of Stock [Line Items] | ||||||
Vesting period | 5 years |
Segment Information (Textual) (Details) |
6 Months Ended |
---|---|
Apr. 30, 2019
segment
| |
Segment Reporting [Abstract] | |
Number of reportable segments | 6 |
Label | Element | Value |
---|---|---|
Accounting Standards Update 2016-01 [Member] | AOCI Attributable to Parent [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (15,921,000) |
Accounting Standards Update 2016-01 [Member] | Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 15,921,000 |
Accounting Standards Update 2018-02 [Member] | AOCI Attributable to Parent [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 1,724,000 |
Accounting Standards Update 2018-02 [Member] | Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (1,724,000) |
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