Limoneira Company Form 8-K Summary
Business Context and Reporting Period
This Current Report on Form 8-K was filed by Limoneira Company (Delaware) on May 27, 2010, with the earliest event reported dated May 7, 2010. The filing details a material definitive agreement entered into by Windfall Investors, LLC, a wholly owned subsidiary of the Company, with Farm Credit West, PCA ("FCW").
Key Financial Metrics and Debt Structure
The filing focuses on the amendment and restatement of a non-revolving credit facility. Key terms include:
- Commitment Increase: The total commitment under the facility was increased to $13 million.
- Initial Outstanding Balance: $10.5 million.
- Interest Rate: Variable rate based on FCW's cost of funds, tracking 90-day treasury rates. The initial rate is 3.50%.
- Maturity Date: Extended to May 1, 2013.
- Collateral: Secured by Windfall's stock/participation certificates, funds held with FCW, and a First Deed of Trust on La Cuesta Ranch and La Campana Ranch. Additionally, 319 shares of San Cayetano Mutual water stock and 246 shares of Canyon Irrigation Company water stock were pledged.
- Guarantee: Limoneira Company guaranteed all indebtedness under the agreement.
Material Changes Versus Prior Period
Compared to the Original Loan Agreement dated September 23, 2005, the Amended Loan Agreement introduces the following material changes:
- Extension of the maturity date to May 1, 2013.
- Increase in the credit commitment to $13 million.
- Establishment of a new Promissory Note and Supplement to the Master Loan Agreement.
Outlook, Risks, and Covenants
The proceeds from the Amended Loan Agreement are designated to repay amounts under the Original Loan Agreement and to fund annual cash flow financing and development. The agreement includes strict covenants limiting the subsidiary's ability to sell assets, merge, obtain additional credit (outside customary trade credit), or become a guarantor for third-party debts. An event of default allows FCW to declare all amounts immediately due and payable without prior recourse to collateral.
Note: This filing does not provide specific revenue, profit, or cash flow figures for the Company or the subsidiary.
Investor Verification Checklist
- Verify the current utilization of the $13 million commitment against the $10.5 million initial draw.
- Review the specific terms of the variable interest rate formula to assess sensitivity to treasury rate fluctuations.
- Confirm the status of the pledged real estate (La Cuesta Ranch and La Campana Ranch) and water stock as collateral.
- Monitor compliance with negative covenants regarding asset sales and additional indebtedness.
- Check subsequent filings for any events of default or further amendments to the credit facility.