|
x
|
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
|
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)
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¨ Large
accelerated filer
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¨ Accelerated
filer
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x Non-accelerated
filer
|
¨ Smaller
reporting company
|
(Do not check if a smaller reporting company)
|
PART
I. FINANCIAL INFORMATION
|
3
|
Item
1. Financial Statements
(unaudited)
|
3
|
Consolidated
Condensed Statement of Operations – three and six months ended April 30,
2010 and 2009
|
3
|
Consolidated
Condensed Balance Sheets – April 30, 2010 and October 31,
2009
|
4
|
Consolidated
Condensed Statements of Comprehensive Income (Loss) – three and six months
ended April 30, 2010 and 2009
|
5
|
Consolidated
Condensed Statements of Cash Flows – six months ended April 30, 2010 and
2009
|
6
|
Notes
to Consolidated Condensed Financial Statements
|
9
|
Item
2. Management’s Discussion and
Analysis of Financial Condition and Results of Operations
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21
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Item
3. Quantitative and Qualitative
Disclosures About Market Risk
|
36
|
Item
4. Controls and
Procedures
|
37
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PART
II. OTHER INFORMATION
|
37
|
Item
1. Legal
Proceedings
|
37
|
Item
1A. Risk Factors
|
37
|
Item
2. Unregistered Sales of Equity
Securities and Use of Proceeds
|
45
|
Item
3. Defaults Upon Senior
Securities
|
45
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Item
4. [Removed and
Reserved]
|
45
|
Item
5. Other
Information
|
45
|
Item
6. Exhibits
|
45
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SIGNATURES
|
46
|
Three months ended
April 30
|
Six months ended
April 30
|
||||||||||||||
2010
|
2009
|
2010
|
2009
|
||||||||||||
Revenues:
|
|||||||||||||||
Agriculture
|
$
|
12,202,000
|
$
|
6,797,000
|
$
|
17,474,000
|
$
|
10,802,000
|
|||||||
Rental
|
962,000
|
955,000
|
1,917,000
|
1,866,000
|
|||||||||||
Other
|
45,000
|
8,000
|
180,000
|
8,000
|
|||||||||||
Total
revenues
|
13,209,000
|
7,760,000
|
19,571,000
|
12,676,000
|
|||||||||||
Costs
and expenses:
|
|||||||||||||||
Agriculture
|
8,791,000
|
6,995,000
|
15,684,000
|
13,633,000
|
|||||||||||
Rental
|
584,000
|
480,000
|
1,091,000
|
1,061,000
|
|||||||||||
Other
|
396,000
|
58,000
|
723,000
|
141,000
|
|||||||||||
Selling,
general and administrative
|
2,413,000
|
1,784,000
|
5,829,000
|
3,262,000
|
|||||||||||
Loss
on sale of assets
|
-
|
3,000
|
-
|
3,000
|
|||||||||||
Total
cost and expenses
|
12,184,000
|
9,320,000
|
23,327,000
|
18,100,000
|
|||||||||||
Operating
income (loss)
|
1,025,000
|
(1,560,000
|
)
|
(3,756,000
|
)
|
(5,424,000
|
)
|
||||||||
Other
income (expense):
|
|||||||||||||||
Other
income (expense), net
|
1,000
|
(22,000
|
)
|
364,000
|
314,000
|
||||||||||
Interest
income
|
29,000
|
86,000
|
58,000
|
123,000
|
|||||||||||
Interest
expense
|
(955,000
|
)
|
(88,000
|
)
|
(1,383,000
|
)
|
(301,000
|
)
|
|||||||
Total
other income (expense)
|
(925,000
|
)
|
24,000
|
(961,000
|
)
|
136,000
|
|||||||||
Income
(loss) from continuing operations before income tax (provision) benefit
and equity in investments
|
100,000
|
(1,584,000
|
)
|
(4,717,000
|
)
|
(5,288,000
|
)
|
||||||||
Income
tax (provision) benefit
|
(48,000
|
)
|
739,000
|
1,661,000
|
2,391,000
|
||||||||||
Equity
in earnings (losses) of investments
|
64,000
|
(75,000
|
)
|
48,000
|
(99,000
|
)
|
|||||||||
Income
(loss) from continuing operations
|
116,000
|
(920,000
|
)
|
(3,008,000
|
)
|
(2,996,000
|
)
|
||||||||
Loss
from discontinued operations, net of income taxes
|
(4,000
|
)
|
(5,000
|
)
|
(12,000
|
)
|
(6,000
|
)
|
|||||||
Net
income (loss)
|
112,000
|
(925,000
|
)
|
(3,020,000
|
)
|
(3,002,000
|
)
|
||||||||
Preferred
dividends
|
(65,000
|
)
|
(65,000
|
)
|
(131,000
|
)
|
(131,000
|
)
|
|||||||
Net
income (loss) applicable to common stock
|
$
|
47,000
|
$
|
(990,000
|
)
|
$
|
(3,151,000
|
)
|
$
|
(3,133,000
|
)
|
||||
Per
common share basic:
|
|||||||||||||||
Continuing
operations
|
$
|
0.00
|
$
|
(0.09
|
)
|
$
|
(0.28
|
)
|
$
|
(0.28
|
)
|
||||
Discontinued
operations
|
(0.00
|
)
|
(0.00
|
)
|
(0.00
|
)
|
(0.00
|
)
|
|||||||
Basic
net income (loss) per share
|
$
|
0.00
|
$
|
(0.09
|
)
|
$
|
(0.28
|
)
|
$
|
(0.28
|
)
|
||||
Per
common share-diluted:
|
|||||||||||||||
Continuing
operations
|
$
|
0.00
|
$
|
(0.09
|
)
|
$
|
(0.28
|
)
|
$
|
(0.28
|
)
|
||||
Discontinued
operations
|
(0.00
|
)
|
(0.00
|
)
|
(0.00
|
)
|
(0.00
|
)
|
|||||||
Diluted
net income (loss) per share
|
$
|
0.00
|
$
|
(0.09
|
)
|
$
|
(0.28
|
)
|
$
|
(0.28
|
)
|
||||
Dividends
per common share
|
$
|
0.03
|
$
|
-
|
$
|
0.06
|
$
|
0.03
|
|||||||
Weighted-average
shares outstanding-basic
|
11,194,000
|
11,263,000
|
11,194,000
|
11,224,000
|
|||||||||||
Weighted-average
shares outstanding-diluted
|
11,194,000
|
11,263,000
|
11,194,000
|
11,247,000
|
April 30
2010
|
October 31
2009
|
|||||||
Assets
|
||||||||
Current
assets:
|
||||||||
Cash
and cash equivalents
|
$
|
11,000
|
$
|
603,000
|
||||
Accounts
receivable
|
6,981,000
|
3,735,000
|
||||||
Notes
receivable – related parties
|
–
|
1,519,000
|
||||||
Inventoried
cultural costs
|
529,000
|
858,000
|
||||||
Prepaid
expenses and other current assets
|
1,618,000
|
894,000
|
||||||
Income
taxes receivable
|
1,669,000
|
-
|
||||||
Current
assets of discontinued operations
|
5,000
|
9,000
|
||||||
Total
current assets
|
10,813,000
|
7,618,000
|
||||||
Property,
plant, and equipment, net
|
53,964,000
|
53,817,000
|
||||||
Real
estate development
|
64,531,000
|
53,125,000
|
||||||
Assets
held for sale
|
6,774,000
|
6,774,000
|
||||||
Equity
in investments
|
8,834,000
|
1,635,000
|
||||||
Investment
in Calavo Growers, Inc.
|
11,531,000
|
11,870,000
|
||||||
Notes
receivable – related parties
|
94,000
|
284,000
|
||||||
Notes
receivable
|
2,109,000
|
2,000,000
|
||||||
Other
assets
|
4,471,000
|
4,307,000
|
||||||
Noncurrent
assets of discontinued operations
|
438,000
|
438,000
|
||||||
Total
assets
|
$
|
163,559,000
|
$
|
141,868,000
|
||||
Liabilities
and stockholders’ equity
|
||||||||
Current
liabilities:
|
||||||||
Accounts
payable
|
$
|
1,048,000
|
$
|
970,000
|
||||
Growers
payable
|
2,616,000
|
988,000
|
||||||
Accrued
liabilities
|
2,947,000
|
2,764,000
|
||||||
Current
portion of long-term debt
|
613,000
|
465,000
|
||||||
Current
liabilities of discontinued operations
|
-
|
2,000
|
||||||
Total
current liabilities
|
7,224,000
|
5,189,000
|
||||||
Long-term
liabilities:
|
||||||||
Long-term
debt, less current portion
|
95,609,000
|
69,251,000
|
||||||
Deferred
income taxes
|
8,469,000
|
8,764,000
|
||||||
Other
long-term liabilities
|
5,172,000
|
6,903,000
|
||||||
Total
long-term liabilities
|
109,250,000
|
84,918,000
|
||||||
Commitments
and contingencies
|
||||||||
Stockholders’
equity:
|
||||||||
Series
B Convertible Preferred Stock – $100.00 par value (50,000 shares
authorized: 30,000 shares issued and outstanding at April 30, 2010 and
October 31, 2009) (8.75% coupon rate)
|
3,000,000
|
3,000,000
|
||||||
Series
A Junior Participating Preferred Stock – $.01 par value (50,000 shares
authorized: 0 issued or outstanding at April 30, 2010 and October 31,
2009)
|
–
|
–
|
||||||
Common
Stock – $.01 par value (19,900,000 shares authorized:
|
||||||||
11,194,460
and 11,262,880 shares issued and outstanding at April 30, 2010
and October 31, 2009, respectively)
|
112,000
|
113,000
|
||||||
Additional
paid-in capital
|
33,817,000
|
34,718,000
|
||||||
Retained
earnings
|
12,534,000
|
16,386,000
|
||||||
Accumulated
other comprehensive loss
|
(2,378,000
|
)
|
(2,456,000
|
)
|
||||
Total
stockholders’ equity
|
47,085,000
|
51,761,000
|
||||||
Total
liabilities and stockholders’ equity
|
$
|
163,559,000
|
$
|
141,868,000
|
Three months ended
April 30
|
Six months ended
April 30
|
|||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||
Net
income (loss)
|
$
|
112,000
|
$
|
(925,000
|
)
|
$
|
(3,080,000
|
)
|
$
|
(3,002,000
|
)
|
|||
Other
comprehensive income (loss), net of tax:
|
||||||||||||||
Minimum
pension liability adjustment, net of tax
|
87,000
|
3,000
|
188,000
|
6,000
|
||||||||||
Unrealized
holding gains (losses) of security available-for-sale, net of
tax
|
265,000
|
1,119,000
|
(204,000
|
)
|
2,261,000
|
|||||||||
Unrealized
gains (losses) resulting from changes in fair values of derivative
instruments, net of tax
|
108,000
|
1,000
|
94,000
|
(901,000
|
)
|
|||||||||
Total
other comprehensive income, net of tax
|
460,000
|
1,123,000
|
78,000
|
1,366,000
|
||||||||||
Comprehensive
income (loss)
|
$
|
572,000
|
$
|
198,000
|
$
|
(2,942,000
|
)
|
$
|
(1,636,000
|
)
|
Six months ended
|
||||||||
April 30
2010
|
April 30
2009
|
|||||||
Operating
activities
|
||||||||
Net
loss
|
$
|
(3,020,000
|
)
|
$
|
(3,002,000
|
)
|
||
Less:
Net loss from discontinued operations
|
(12,000
|
)
|
(6,000
|
)
|
||||
Net
loss from continuing operations
|
(3,008,000
|
)
|
(2,996,000
|
)
|
||||
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
||||||||
Depreciation
and amortization
|
1,158,000
|
1,153,000
|
||||||
Loss
on disposal/sale of fixed assets
|
-
|
3,000
|
||||||
Orchard
write-offs
|
-
|
23,000
|
||||||
Stock
compensation expense
|
242,000
|
450,000
|
||||||
Expense
related to Officers notes receivable forgiveness and payroll
taxes
|
687,000
|
-
|
||||||
Equity
in (earnings) losses of investments
|
(48,000
|
)
|
99,000
|
|||||
Amortization
of deferred financing costs
|
14,000
|
8,000
|
||||||
Non-cash
interest expense on derivatives (Note 11)
|
564,000
|
-
|
||||||
Changes
in operating assets and liabilities:
|
||||||||
Accounts
and notes receivable
|
(2,725,000
|
)
|
(1,915,000
|
)
|
||||
Inventoried
cultural costs
|
329,000
|
688,000
|
||||||
Prepaid
and other current assets
|
(592,000
|
)
|
(130,000
|
)
|
||||
Income
taxes receivable
|
(1,669,000
|
)
|
(1,159,000
|
)
|
||||
Other
assets
|
(5,000
|
)
|
(22,000
|
)
|
||||
Accounts
payable and growers payable
|
1,507,000
|
(551,000
|
)
|
|||||
Accrued
liabilities and payroll taxes
|
(468,000
|
)
|
(2,404,000
|
)
|
||||
Other
long-term liabilities
|
(4,000
|
)
|
(315,000
|
)
|
||||
Net
cash used in operating activities from continuing
operations
|
(4,018,000
|
)
|
(7,068,000
|
)
|
||||
Net
cash used in operating activities from discontinued
operations
|
(10,000
|
)
|
(8,000
|
)
|
||||
Net
cash used in operating activities
|
(4,028,000
|
)
|
(7,076,000
|
)
|
||||
Investing
activities
|
||||||||
Capital
expenditures
|
(2,857,000
|
)
|
(4,265,000
|
)
|
||||
Net
proceeds from sale of assets
|
13,000
|
23,000
|
||||||
Cash
distributions from equity investments
|
72,000
|
72,000
|
||||||
Equity
investment contributions
|
(17,000
|
)
|
-
|
|||||
Issuance
of notes receivable
|
(46,000
|
)
|
(325,000
|
)
|
||||
Investments
in water companies
|
(105,000
|
)
|
(15,000
|
)
|
||||
Other
|
(7,000
|
)
|
(100,000
|
)
|
||||
Net
cash used in investing activities from continuing
operations
|
(2,947,000
|
)
|
(4,610,000
|
)
|
||||
Net
cash used in investing activities from discontinued
operations
|
-
|
(5,000
|
)
|
|||||
Net
cash used in investing activities
|
(2,947,000
|
)
|
(4,615,000
|
)
|
||||
Financing
activities
|
||||||||
Borrowings
of long-term debt
|
15,710,000
|
17,186,000
|
||||||
Repayments
of long-term debt
|
(8,494,000
|
)
|
(4,980,000
|
)
|
||||
Dividends
paid – Common
|
(702,000
|
)
|
(348,000
|
)
|
||||
Dividends
paid – Preferred
|
(131,000
|
)
|
(131,000
|
)
|
||||
Payments
of debt financing costs
|
-
|
(105,000
|
)
|
|||||
Net
cash provided by financing activities from continuing
operations
|
6,383,000
|
11,622,000
|
||||||
Net
decrease in cash and cash equivalents
|
(592,000
|
)
|
(69,000
|
)
|
||||
Cash
and cash equivalents at beginning of period
|
603,000
|
90,000
|
||||||
Cash
and cash equivalents at end of period
|
$
|
11,000
|
$
|
21,000
|
Six months ended
|
||||||||
April 30
2010
|
April 30
2009
|
|||||||
Supplemental
disclosures of cash flow information
|
||||||||
Cash
paid during the period for interest
|
$
|
1,910,000
|
$
|
1,533,000
|
||||
Cash
paid during the period for income taxes, net of (refunds)
received
|
$
|
93,000
|
$
|
(1,235,000
|
)
|
|||
Non-cash
investing, financing, and other comprehensive income (loss)
transactions:
|
||||||||
Minimum
pension liability adjustment, net of tax
|
$
|
(188,000
|
)
|
$
|
(6,000
|
)
|
||
Unrealized
holding loss (gain) on security, net of tax
|
$
|
204,000
|
$
|
(2,261000
|
)
|
|||
Unrealized
(gain) loss from derivatives, net of tax
|
$
|
(94,000
|
)
|
$
|
901,000
|
At November 15
2009
|
||||
Current
assets
|
$
|
218,000
|
||
Property,
plant and equipment
|
262,000
|
|||
Real
estate development
|
16,842,000
|
|||
Deferred
income taxes
|
345,000
|
|||
Other
assets
|
32,000
|
|||
Total
assets acquired
|
$
|
$17,699,000
|
||
Current
liabilities
|
(152,000
|
)
|
||
Current
portion of long-term debt
|
(10,141,000
|
)
|
||
Long-term
debt
|
(9,148,000
|
)
|
||
Net
liabilities assumed
|
$
|
(1,742,000
|
)
|
·
|
The
period after the balance sheet date during which management of a reporting
entity should evaluate events or transactions that may occur for potential
recognition or disclosure in the financial
statements.
|
·
|
The
circumstances under which an entity should recognize events or
transactions occurring after the balance sheet date in its financial
statements.
|
·
|
The
disclosures that an entity should make about events or transactions that
occurred after the balance sheet
date.
|
At November 15, 2009
|
||||
Current
assets
|
$ | 218,000 | ||
Property,
plant and equipment
|
262,000 | |||
Real
estate development
|
16,842,000 | |||
Deferred
income taxes
|
345,000 | |||
Other
assets
|
32,000 | |||
Total
assets acquired
|
17,699,000 | |||
Current
liabilities
|
(152,000 | ) | ||
Current
portion of long-term debt
|
(10,141,000 | ) | ||
Long-term
debt, less current portion
|
(9,148,000 | ) | ||
Net
liabilities assumed
|
$ | (1,742,000 | ) |
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
Assets
at fair value:
|
||||||||||||||||
Available-
for -sale securities
|
$
|
11,531,000
|
$
|
–
|
$
|
–
|
$
|
11,531,000
|
||||||||
Liabilities
at fair value:
|
||||||||||||||||
Derivatives
|
–
|
2,579,000
|
–
|
2,579,000
|
April 30,
2010
|
October 31,
2009
|
|||||||
East
Areas 1 and 2:
|
||||||||
Land
and land development costs
|
$
|
39,120,000
|
$
|
37,788,000
|
||||
Templeton
Santa Barbara, LLC:
|
||||||||
Land
and land development costs
|
8,338,000
|
15,337,000
|
||||||
Windfall
Investors, LLC:
|
||||||||
Land
and land development costs
|
17,073,000
|
–
|
||||||
Total
included in real estate development asset
|
$
|
64,531,000
|
$
|
53,125,000
|
April 30,
2010
|
October 31,
2009
|
|||||||
Templeton
Santa Barbara, LLC and Arizona Development Project:
|
||||||||
Land
and land development costs
|
$
|
6,774,000
|
$
|
6,774,000
|
||||
Total
included in assets held for sale
|
$
|
6,774,000
|
$
|
6,774,000
|
April 30,
2010
|
October 31,
2009
|
|||||||
Rabobank
revolving credit facility secured by property with a net book value of
$12,260,000 at April 30,
2010 and October 31, 2009. The interest rate is variable based on the
one-month London Interbank Offered
Rate plus 1.50%. Interest is payable monthly and the principal is due in
full in June 2013.
|
$ | 68,691,000 | $ | 61,671,000 | ||||
Central
Coast Federal Land Bank Association loan secured by property with a net
book value of $11,656,000
at April 30, 2010 and $11,674,000 at October 31, 2009. The interest rate
is variable and was
3.25% at April 30, 2010. The loan is payable in quarterly installments
through November 2022.
|
6,878,000 | 7,094,000 | ||||||
Central
Coast Federal Land Bank Association loan secured by property with a net
book value of $11,656,000 at April 30, 2010 and $11,674,000 at October 31,
2009. The interest rate is variable and was 3.25% at April 30, 2010. The
loan is payable in monthly installments through May 2032.
|
936,000 | 951,000 | ||||||
Farm
Credit West non-revolving line of credit. The interest rate is variable
and was 3.50% at April 30, 2010. Interest is payable monthly and the
principal is due in full in May 2013.
|
10,499,000 | – | ||||||
Farm
Credit West term loan secured by property with a net book value of
$17,073,000 at April
30, 2010. The interest rate is fixed at 6.73% until November 2011,
becoming variable for the remainder of the loan. The loan is payable in
monthly installments through October 2035.
|
9,218,000 | – | ||||||
Subtotal
|
96,222,000 | 69,716,000 | ||||||
Less
current portion
|
613,000 | 465,000 | ||||||
Total
long-term debt, less current portion
|
$ | 95,609,000 | $ | 69,251,000 |
Notional Amount
|
Fair Value Net Liability
|
|||||||||||||||
April 30,
2010
|
October 31,
2009
|
April 30,
2010
|
October 31,
2009
|
|||||||||||||
Pay
fixed-rate, receive floating-rate interest rate swap, maturing
2013
|
$
|
42,000,000
|
$
|
22,000,000
|
$
|
2,579,000
|
$
|
1,678,000
|
||||||||
Pay
fixed-rate, receive floating-rate interest rate swap designated as cash
flow hedge, cancelled April 2010
|
-
|
10,000,000
|
-
|
287,000
|
||||||||||||
Pay
fixed-rate, receive floating-rate interest rate swap designated as cash
flow hedge, cancelled April 2010
|
-
|
10,000,000
|
-
|
206,000
|
||||||||||||
Total
|
$
|
42,000,000
|
$
|
42,000,000
|
$
|
2,579,000
|
$
|
2,171,000
|
2010
|
2009
|
|||||||
Service
cost
|
$
|
37,000
|
$
|
22,000
|
||||
Interest
cost
|
210,000
|
222,000
|
||||||
Expected
return on plan assets
|
(255,000
|
)
|
(256,000
|
)
|
||||
Recognized
actuarial loss
|
156,000
|
5,000
|
||||||
Net
periodic pension cost
|
$
|
148,000
|
$
|
(7,000
|
)
|
2010
|
2009
|
|||||||
Service
cost
|
$
|
74,000
|
$
|
43,000
|
||||
Interest
cost
|
420,000
|
444,000
|
||||||
Expected
return on plan assets
|
(509,000
|
)
|
(513,000
|
)
|
||||
Recognized
actuarial loss
|
313,000
|
11,000
|
||||||
Net
periodic pension cost
|
$
|
298,000
|
$
|
(15,000
|
)
|
Agri-business
|
Rental
Operations
|
Real Estate
Development
|
Corporate and
Other
|
Total
|
||||||||||||||||
Revenues
|
$
|
12,202,000
|
$
|
962,000
|
$
|
45,000
|
$
|
–
|
$
|
13,209,000
|
||||||||||
Costs
and expenses
|
8,791,000
|
584,000
|
396,000
|
2,413,000
|
12,184,000
|
|||||||||||||||
Impairment
charges
|
–
|
–
|
–
|
–
|
–
|
|||||||||||||||
Loss
on sale of assets
|
–
|
–
|
–
|
–
|
–
|
|||||||||||||||
Operating
income (loss)
|
$
|
3,411,000
|
$
|
378,000
|
$
|
(351,000
|
)
|
$
|
(2,413,000
|
)
|
$
|
1,025,000
|
Agri-business
|
Rental
Operations
|
Real Estate
Development
|
Corporate and
Other
|
Total
|
||||||||||||||||
Revenues
|
$
|
6,797,000
|
$
|
955,000
|
$
|
8,000
|
$
|
–
|
$
|
7,760,000
|
||||||||||
Costs
and expenses
|
6,995,000
|
480,000
|
58,000
|
1,784,000
|
9,318,000
|
|||||||||||||||
Impairment
charges
|
–
|
–
|
–
|
–
|
–
|
|||||||||||||||
Loss
on sale of assets
|
–
|
–
|
–
|
3,000
|
3,000
|
|||||||||||||||
Operating
income (loss)
|
$
|
(198,000
|
)
|
$
|
475,000
|
$
|
(50,000
|
)
|
$
|
(1,787,000
|
)
|
$
|
(1,560,000
|
)
|
April 30,
2010
|
April 30,
2009
|
|||||||
Lemons
|
$ | 7,875,000 | $ | 5,296,000 | ||||
Avocados
|
2,654,000 | 98,000 | ||||||
Navel
oranges
|
845,000 | 592,000 | ||||||
Valencia
oranges
|
– | 65,000 | ||||||
Specialty
citrus and other crops
|
828,000 | 746,000 | ||||||
Agri-business
revenues
|
12,202,000 | 6,797,000 | ||||||
Rental
operations
|
541,000 | 543,000 | ||||||
Leased
land
|
370,000 | 364,000 | ||||||
Organic
recycling
|
51,000 | 48,000 | ||||||
Rental
operations revenues
|
962,000 | 955,000 | ||||||
Real
estate operations
|
45,000 | 8,000 | ||||||
Real
estate revenues
|
45,000 | 8,000 | ||||||
Total
revenues
|
$ | 13,209,000 | $ | 7,760,000 |
Agri-business
|
Rental
Operations
|
Real Estate
Development
|
Corporate and
Other
|
Total
|
||||||||||||||||
Revenues
|
$
|
17,474,000
|
$
|
1,917,000
|
$
|
180,000
|
$
|
–
|
$
|
19,571,000
|
||||||||||
Costs
and expenses
|
15,684,000
|
1,091,000
|
723,000
|
5,829,000
|
23,327,000
|
|||||||||||||||
Impairment
charges
|
–
|
–
|
–
|
–
|
–
|
|||||||||||||||
Loss
on sale of assets
|
–
|
–
|
–
|
–
|
–
|
|||||||||||||||
Operating
income (loss)
|
$
|
1,790,000
|
$
|
826,000
|
$
|
(543,000
|
)
|
$
|
(5,829,000
|
)
|
$
|
(3,756,000
|
)
|
Agri-business
|
Rental
Operations
|
Real Estate
Development
|
Corporate and
Other
|
Total
|
||||||||||||||||
Revenues
|
$
|
10,802,000
|
$
|
1,866,000
|
$
|
8,000
|
$
|
–
|
$
|
12,676,000
|
||||||||||
Costs
and expenses
|
13,633,000
|
1,061,000
|
141,000
|
3,262,000
|
18,097,000
|
|||||||||||||||
Impairment
charges
|
–
|
–
|
–
|
–
|
–
|
|||||||||||||||
Loss
on sale of assets
|
–
|
–
|
–
|
3,000
|
3,000
|
|||||||||||||||
Operating
income (loss)
|
$
|
(2,831,000
|
)
|
$
|
805,000
|
$
|
(133,000
|
)
|
$
|
(3,265,000
|
)
|
$
|
(5,424,000
|
)
|
April 30,
2010
|
April 30,
2009
|
|||||||
Lemons
|
$ | 11,264,000 | $ | 8,532,000 | ||||
Avocados
|
2,879,000 | 103,000 | ||||||
Navel
oranges
|
1,422,000 | 893,000 | ||||||
Valencia
oranges
|
149,000 | 191,000 | ||||||
Specialty
citrus and other crops
|
1,760,000 | 1,083,000 | ||||||
Agri-business
revenues
|
17,474,000 | 10,802,000 | ||||||
Rental
operations
|
1,071,000 | 1,057,000 | ||||||
Leased
land
|
751,000 | 724,000 | ||||||
Organic
recycling
|
95,000 | 85,000 | ||||||
Rental
operations revenues
|
1,917,000 | 1,866,000 | ||||||
Real
estate operations
|
180,000 | 8,000 | ||||||
Real
estate revenues
|
180,000 | 8,000 | ||||||
Total
revenues
|
$ | 19,571,000 | $ | 12,676,000 |
|
·
|
changes in laws, regulations,
rules, quotas, tariffs, and import
laws;
|
|
·
|
weather conditions, including
freezes 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
current exchange rates;
|
|
·
|
availability of financing for
land development activities;
|
|
·
|
political changes and economic
crises;
|
|
·
|
international
conflict;
|
|
·
|
acts of
terrorism;
|
|
·
|
labor disruptions, strikes or
work stoppages;
|
|
·
|
loss of important intellectual
property rights; and
|
|
·
|
other factors disclosed in our
public filings with the Securities and Exchange
Commission.
|
Quarter
Ended April 30,
|
Six
Months Ended April 30,
|
|||||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
Revenues:
|
||||||||||||||||
Agriculture
|
$ | 12,202,000 | $ | 6,797,000 | $ | 17,474,000 | $ | 10,802,000 | ||||||||
Rental
|
962,000 | 955,000 | 1,917,000 | 1,866,000 | ||||||||||||
Other
|
45,000 | 8,000 | 180,000 | 8,000 | ||||||||||||
Total
revenues
|
13,209,000 | 7,760,000 | 19,571,000 | 12,676,000 | ||||||||||||
Costs
and expenses:
|
||||||||||||||||
Agriculture
|
8,791,000 | 6,995,000 | 15,684,000 | 13,633,000 | ||||||||||||
Rental
|
584,000 | 480,000 | 1,091,000 | 1,061,000 | ||||||||||||
Other
|
396,000 | 58,000 | 723,000 | 141,000 | ||||||||||||
Selling,
general and administrative
|
2,413,000 | 1,784,000 | 5,829,000 | 3,262,000 | ||||||||||||
Loss
on sale of assets
|
- | 3,000 | - | 3,000 | ||||||||||||
Total
cost and expenses
|
12,184,000 | 9,320,000 | 23,327,000 | 18,100,000 | ||||||||||||
Operating
income (loss)
|
1,025,000 | (1,560,000 | ) | (3,756,000 | ) | (5,424,000 | ) | |||||||||
Other
income (expense):
|
||||||||||||||||
Other
income (expense), net
|
1,000 | (22,000 | ) | 364,000 | 314,000 | |||||||||||
Interest
income
|
29,000 | 86,000 | 58,000 | 123,000 | ||||||||||||
Interest
expense
|
(955,000 | ) | (88,000 | ) | (1,383,000 | ) | (301,000 | ) | ||||||||
Total
other income (expense), net
|
(925,000 | ) | 24,000 | (961,000 | ) | 136,000 | ||||||||||
Income
(loss) from continuing operations before income tax (provision) benefit
and equity in investments
|
100,000 | (1,584,000 | ) | (4,717,000 | ) | (5,288,000 | ) | |||||||||
Income
tax (provision) benefit
|
(48,000 | ) | 739,000 | 1,661,000 | 2,391,000 | |||||||||||
Equity
in earnings (losses) of investments
|
64,000 | (75,000 | ) | 48,000 | (99,000 | ) | ||||||||||
Income
(loss) from continuing operations
|
116,000 | (920,000 | ) | (3,008,000 | ) | (2,996,000 | ) | |||||||||
Loss
from discontinued operations, net of income taxes
|
(4,000 | ) | (5,000 | ) | (12,000 | ) | (6,000 | ) | ||||||||
Net
income (loss)
|
112,000 | (925,000 | ) | (3,020,000 | ) | (3,002,000 | ) | |||||||||
Preferred
dividends
|
(65,000 | ) | (65,000 | ) | (131,000 | ) | (131,000 | ) | ||||||||
Net
income (loss) applicable to common stock
|
$ | 47,000 | $ | (990,000 | ) | $ | (3,151,000 | ) | $ | (3,133,000 | ) | |||||
Per
common share basic:
|
||||||||||||||||
Continuing
operations
|
$ | 0.00 | $ | (0.09 | ) | $ | (0.28 | ) | $ | (0.28 | ) | |||||
Discontinued
operations
|
0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||
Basic
net loss per share
|
$ | 0.00 | $ | (0.09 | ) | $ | (0.28 | ) | $ | (0.28 | ) | |||||
Per
common share-diluted:
|
||||||||||||||||
Continuing
operations
|
$ | 0.00 | $ | (0.09 | ) | $ | (0.28 | ) | $ | (0.28 | ) | |||||
Discontinued
operations
|
0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||
Diluted
net loss per share
|
$ | 0.00 | $ | (0.09 | ) | $ | (0.28 | ) | $ | (0.28 | ) | |||||
Dividends
per common share
|
$ | 0.03 | $ | - | $ | 0.06 | $ | 0.03 | ||||||||
Weighted-average
shares outstanding-basic
|
11,194,000 | 11,263,000 | 11,194,000 | 11,224,000 | ||||||||||||
Weighted-average
shares outstanding-diluted
|
11,194,000 | 11,263,000 | 11,194,000 | 11,247,000 |
Quarter Ended April 30,
|
Six Months Ended April 30,
|
|||||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
Revenues
|
||||||||||||||||
Agribusiness
|
$ | 12,202,000 | $ | 6,797,000 | $ | 17,474,000 | $ | 10,802,000 | ||||||||
Rental
operations
|
962,000 | 955,000 | 1,917,000 | 1,866,000 | ||||||||||||
Real
estate development
|
45,000 | 8,000 | 180,000 | 8,000 | ||||||||||||
Total
revenues
|
13,209,000 | 7,760,000 | 19,571,000 | 12,676,000 | ||||||||||||
Costs
and expenses
|
||||||||||||||||
Agribusiness
|
8,791,000 | 6,995,000 | 15,684,000 | 13,633,000 | ||||||||||||
Rental
operations
|
584,000 | 480,000 | 1,091,000 | 1,061,000 | ||||||||||||
Real
estate development
|
396,000 | 58,000 | 723,000 | 141,000 | ||||||||||||
Corporate
and other
|
2,413,000 | 1,787,000 | 5,829,000 | 3,265,000 | ||||||||||||
Total
costs and expenses
|
12,184,000 | 9,320,000 | 23,327,000 | 18,100,000 | ||||||||||||
Operating
income (loss)
|
||||||||||||||||
Agribusiness
|
3,411,000 | (198,000 | ) | 1,790,000 | (2,831,000 | ) | ||||||||||
Rental
operations
|
378,000 | 475,000 | 826,000 | 805,000 | ||||||||||||
Real
estate development
|
(351,000 | ) | (50,000 | ) | (543,000 | ) | (133,000 | ) | ||||||||
Corporate
and other
|
(2,413,000 | ) | (1,787,000 | ) | (5,829,000 | ) | (3,265,000 | ) | ||||||||
Total
operating income (loss)
|
$ | 1,025,000 | $ | (1,560,000 | ) | $ | (3,756,000 | ) | $ | (5,424,000 | ) |
Payments due by Period
|
||||||||||||||||||||
Contractual Obligations:
|
Total
|
< 1 year
|
1-3 years
|
3-5 years
|
5+ years
|
|||||||||||||||
Fixed
rate debt (principal)
|
$ | 51,218,000 | $ | 141,000 | $ | 312,000 | $ | 42,357,000 | $ | 8,408,000 | ||||||||||
Variable
rate debt (principal)
|
45,004,000 | 472,000 | 991,000 | 38,249,000 | 5,292,000 | |||||||||||||||
Operating
lease obligations
|
9,391,000 | 1,606,000 | 2,893,000 | 2,192,000 | 2,700,000 | |||||||||||||||
Total
contractual obligations
|
$ | 105,613,000 | $ | 2,219,000 | $ | 4,196,000 | $ | 82,798,000 | $ | 16,400,000 | ||||||||||
Interest
payments on fixed and variable rate debt
|
$ | 22,155,000 | $ | 3,753,000 | $ | 6,639,000 | $ | 3,803,000 | $ | 7,960,000 |
Notional Amount
|
Fair Value Net Liability
|
|||||||||||||||
April 30,
2010
|
October 31,
2009
|
April 30,
2010
|
October 31,
2009
|
|||||||||||||
Pay
fixed-rate, receive floating-rate interest rate swap, maturing
2013
|
$
|
42,000,000
|
$
|
22,000,000
|
$
|
2,579,000
|
$
|
1,678,000
|
||||||||
Pay
fixed-rate, receive floating-rate interest rate swap designated as cash
flow hedge, cancelled April 2010
|
-
|
10,000,000
|
-
|
287,000
|
||||||||||||
Pay
fixed-rate, receive floating-rate interest rate swap designated as cash
flow hedge, cancelled April 2010
|
-
|
10,000,000
|
-
|
206,000
|
||||||||||||
Total
|
$
|
42,000,000
|
$
|
42,000,000
|
$
|
2,579,000
|
$
|
2,171,000
|
·
|
Some
of our competitors may have greater operating flexibility and, in certain
cases, this may permit them to respond better or more quickly to changes
in the industry or to introduce new products and packaging more quickly
and with greater marketing support.
|
|
·
|
We
cannot predict the pricing or promotional actions of our competitors or
whether those actions will have a negative effect on
us.
|
·
|
the
seasonality of our supplies and consumer demand;
|
|
·
|
the
ability to process products during critical harvest periods;
and
|
|
·
|
the
timing and effects of ripening and
perishability.
|
·
|
economic
and competitive conditions;
|
·
|
changes
in laws and regulations;
|
·
|
operating
difficulties, increased operating costs or pricing pressures we may
experience; and
|
·
|
delays
in implementing any strategic
projects.
|
·
|
incur
additional indebtedness;
|
·
|
make
certain investments or
acquisitions;
|
·
|
create
certain liens on our assets;
|
·
|
engage
in certain types of transactions with
affiliates;
|
·
|
merge,
consolidate or transfer substantially all our assets;
and
|
·
|
transfer
and sell assets.
|
·
|
employment
levels;
|
·
|
availability
of financing;
|
·
|
interest
rates;
|
·
|
consumer
confidence;
|
·
|
demand
for the developed product, whether residential or industrial;
and
|
·
|
supply
of similar product, whether residential or
industrial.
|
·
|
natural
risks, such as geological and soil problems, earthquakes, fire, heavy
rains and flooding, and heavy
winds;
|
·
|
shortages
of qualified trades people;
|
·
|
reliance
on local contractors, who may be inadequately
capitalized;
|
·
|
shortages
of materials; and
|
·
|
increases
in the cost of certain
materials.
|
·
|
quarterly
fluctuations in our operating
results;
|
·
|
changes
in investors and analysts perception of the business risks and conditions
of our business;
|
·
|
our
ability to meet the earnings estimates and other performance expectations
of financial analysts or investors;
|
·
|
unfavorable
commentary or downgrades of our stock by equity research
analysts;
|
·
|
fluctuations
in the stock prices of our peer companies or in stock markets in general;
and
|
·
|
general
economic or political conditions.
|
·
|
division
of our board of directors into three classes, with each class serving a
staggered three-year term;
|
·
|
removal
of directors by stockholders by a supermajority of two-thirds of the
outstanding shares;
|
·
|
ability
of the board of directors to authorize the issuance of preferred stock in
series without stockholder approval;
and
|
·
|
prohibitions
on our stockholders that prevent them from acting by written consent and
limitations on calling special
meetings.
|
Exhibit
Number
|
Exhibit
|
|
31.1
|
Certificate
of the Principal Executive Officer Pursuant to Exchange Act Rule 13a-14(a)
and 15d-14(a)
|
|
31.2
|
Certificate
of the Principal Financial and Accounting Officer Pursuant to Exchange Act
Rule 13a-14(a) and 15d-14(a)
|
|
32.1
|
Certification
of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
|
|
32.2
|
Certification
of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
|
LIMONEIRA
COMPANY
|
||
June
14, 2010
|
By:
|
/s/
HAROLD S. EDWARDS
|
Harold
S. Edwards
|
||
Director,
President and Chief Executive Officer
|
||
(Principal
Executive Officer)
|
||
June
14, 2010
|
By:
|
/s/
DON P. DELMATOFF
|
Don
P. Delmatoff
|
||
Vice
President of Finance & Administration,
Chief
Financial Officer and 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)
|
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
|
|
(c)
|
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 person 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
14, 2010
|
/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)
|
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
|
|
(c)
|
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 person 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
14, 2010
|
/s/
Don P. Delmatoff
|
|
Don
P. Delmatoff,
|
||
Chief
Financial Officer
|
||
(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
14, 2010
|
/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
14, 2010
|
/s/
Don P. Delmatoff
|
|
Don
P. Delmatoff,
|
||
Chief
Financial Officer
|
||
(Principal
Financial and Accounting
Officer)
|