Limoneira COLMNR
Limoneira CO Income Taxes Disclosure
Income Taxes
A reconciliation of income before income taxes for domestic and foreign locations for the fiscal years ended October 31 are as follows (in thousands):
| 2025 | 2024 | 2023 | |||||||||||||||
| United States | $ | (19,126) | $ | 12,894 | $ | 14,395 | |||||||||||
| Foreign | (1,879) | (1,347) | (1,031) | ||||||||||||||
| (Loss) income before income taxes | $ | (21,005) | $ | 11,547 | $ | 13,364 | |||||||||||
15. Income Taxes (continued)
The components of the provision for income taxes for the fiscal years ended October 31 are as follows (in thousands):
| 2025 | 2024 | 2023 | |||||||||||||||
| Current: | |||||||||||||||||
| Federal | $ | (108) | $ | (4,493) | $ | (5,696) | |||||||||||
| State | 51 | (1,972) | (498) | ||||||||||||||
| Foreign | — | 5 | — | ||||||||||||||
| Total current tax provision | (57) | (6,460) | (6,194) | ||||||||||||||
| Deferred: | |||||||||||||||||
| Federal | 3,338 | 1,641 | 2,665 | ||||||||||||||
| State | 1,368 | 446 | (717) | ||||||||||||||
| Foreign | — | — | (1) | ||||||||||||||
| Total deferred tax benefit | 4,706 | 2,087 | 1,947 | ||||||||||||||
| Total income tax benefit (provision) | $ | 4,649 | $ | (4,373) | $ | (4,247) | |||||||||||
Deferred income taxes reflect the net of temporary differences between the carrying amount of the assets and liabilities for financial reporting and income tax purposes. The components of deferred income tax assets as of October 31 are as follows (in thousands):
| 2025 | 2024 | ||||||||||
| Deferred income tax assets: | |||||||||||
| Reserves and other accruals | $ | 26 | $ | 1,233 | |||||||
| Net operating losses | 7,570 | 1,645 | |||||||||
| Lease liabilities | 137 | 679 | |||||||||
| Amortization | 59 | — | |||||||||
| Other assets | 239 | 366 | |||||||||
| Interest expense limitation | 681 | — | |||||||||
| Stock-based compensation | 1,322 | 1,761 | |||||||||
| Total deferred income tax assets | 10,034 | 5,684 | |||||||||
| Valuation allowance | (2,951) | (1,973) | |||||||||
| Total net deferred income tax assets | 7,083 | 3,711 | |||||||||
| Deferred income tax liabilities: | |||||||||||
| Property taxes | (100) | (193) | |||||||||
| Depreciation | (11,234) | (13,182) | |||||||||
| Amortization | — | (40) | |||||||||
| Land and other indefinite life assets | (4,197) | (4,207) | |||||||||
| Investment in joint ventures and other basis adjustments | (6,626) | (5,334) | |||||||||
| Right-of-use assets | (137) | (663) | |||||||||
| Prepaids and receivables | (165) | (174) | |||||||||
| Other | (2) | (2) | |||||||||
| Total deferred income tax liabilities | (22,461) | (23,795) | |||||||||
| Net deferred income tax liabilities | $ | (15,378) | $ | (20,084) | |||||||
| Deferred income taxes — noncurrent assets | $ | — | $ | — | |||||||
| Deferred income taxes — noncurrent liabilities | $ | (15,378) | $ | (20,084) | |||||||
15. Income Taxes (continued)
The Company periodically evaluates the recoverability of the deferred tax assets. The Company recognizes deferred tax assets to the extent that it believes that these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. The Company recorded a valuation allowance of $2,951,000 on the net deferred tax assets of its subsidiaries in Argentina, Chile and Holland as of October 31, 2025 as the Company does not believe it is more likely than not that these deferred tax assets will be realized due to the recent history of cumulative pre-tax book losses and lack of objectively verifiable future sources of taxable income.
As of October 31, 2025, the Company recorded a deferred tax asset of $7,570,000 related to its state and foreign net operating loss carryforwards. The net operating losses begin to expire as follows (in thousands):
| Jurisdiction | Gross Amount | Begin to Expire | |||||||||
| Federal | 19,488 | Indefinite | |||||||||
| State | 23,760 | 10/31/2040 | |||||||||
| Chile | 5,455 | Indefinite | |||||||||
| Holland | 152 | 10/31/2026 | |||||||||
| Argentina | 1,866 | 10/31/2027 | |||||||||
The benefit (provision) for income taxes differs from the amount of income tax determined by applying the U.S. statutory federal income tax rate to pretax income as a result of the following differences for the fiscal years ended October 31 (in thousands):
| 2025 | 2024 | 2023 | |||||||||||||||||||||||||||||||||
| Amount | % | Amount | % | Amount | % | ||||||||||||||||||||||||||||||
| Benefit (provision) at statutory rates | $ | 4,411 | (21.0) | % | $ | (2,425) | (21.0) | % | $ | (2,806) | (21.0) | % | |||||||||||||||||||||||
| State income tax, net of federal benefit | 1,141 | (5.4) | % | (1,201) | (10.4) | % | (814) | (6.2) | % | ||||||||||||||||||||||||||
| Share-based compensation | 83 | (0.4) | % | 243 | 2.1 | % | 20 | 0.2 | % | ||||||||||||||||||||||||||
| Executive compensation | (505) | 2.4 | % | (561) | (4.9) | % | (395) | (3.0) | % | ||||||||||||||||||||||||||
| Tax law change | — | — | % | — | — | % | 137 | 1.0 | % | ||||||||||||||||||||||||||
| State rate adjustment | (1) | — | % | (64) | (0.6) | % | (95) | (0.7) | % | ||||||||||||||||||||||||||
| Valuation allowance | (986) | 4.7 | % | (80) | (0.7) | % | (436) | (3.3) | % | ||||||||||||||||||||||||||
| Foreign rate differential | 115 | (0.6) | % | (85) | (0.7) | % | 66 | 0.5 | % | ||||||||||||||||||||||||||
| Noncontrolling interests, net | (76) | 0.4 | % | (114) | (1.0) | % | (48) | (0.4) | % | ||||||||||||||||||||||||||
| Other permanent items | 509 | (2.4) | % | (86) | (0.7) | % | 247 | 1.9 | % | ||||||||||||||||||||||||||
| Tax credit and others | (42) | 0.2 | % | — | — | % | (123) | (0.8) | % | ||||||||||||||||||||||||||
| Total income tax benefit (provision) | $ | 4,649 | (22.1) | % | $ | (4,373) | (37.9) | % | $ | (4,247) | (31.8) | % | |||||||||||||||||||||||
As of October 31, 2025 and 2024, the Company had no unrecognized tax benefits. The Company files income tax returns in the U.S., California, Arizona, Chile, Argentina and Holland. The Company is no longer subject to significant U.S., state and Chilean income tax examinations for years prior to the statutory periods of three years for federal, four years for state and three years for Chilean tax jurisdictions. The Company recognizes interest expense and penalties related to income tax matters as a component of income tax expense. There were no accrued interest or penalties associated with uncertain tax positions as of October 31, 2025.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Dec 23, 2025 | Showing above |
| 2021 | Jan 10, 2022 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.