Squire,
Sanders & Dempsey L.L.P.
221
E. Fourth St., Suite 2900
Cincinnati,
OH 45202
Office: +1.513.361.1200
Fax:
+1.513.361.1201
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Direct
Dial: +1.513.361.1230
smahon@ssd.com
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Re:
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Limoneira
Company
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Amendment
No. 1 to Registration Statement on Form
10
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Filed
March 31, 2010
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File
No. 0-53885
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1.
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Please
disclose the specific experience, qualifications, attributes or skills of
each person serving as director. See amended Item 401(e)(1) of
Regulation S-K, effective February 28,
2010.
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2.
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We
note that you have not included any disclosure in response to Item 402(s)
of Regulation S-K. Please advise us of the basis for your
conclusion that disclosure is not necessary and describe the process you
undertook to reach that conclusion.
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3.
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As
previously requested in comment 17 of our March 11, 2010 letter, please
explain how you benchmark against the five companies you have
listed.
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4.
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Your
disclosure indicates that no cash incentive compensation was paid for
2009. Please reconcile with the summary compensation table,
which reflects non-equity incentive plan compensation in
2009.
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5.
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Please
add the 2009 grants, which are discussed under these headings, to the
grants table.
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6.
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Please
revise the table to comply with Item 402(c)(2)(v) of Regulation S-K and
the related instructions, as amended effective February 28,
2010.
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7.
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We
note from your response to comment 32 of our letter dated March 11, 2010
that you estimate the net proceeds to be received for those sales for
which the pools have not yet closed. Please tell us how these
sales satisfy the criterion within SAB Topic 13:A.1 as having a fixed or
determinable price, as it appears that the final price will be impacted by
the outcome of sales that have yet to occur. In addition,
disclose whether you recognize revenue upon delivery to the third-party
packinghouse or upon sell-through by the third-party packinghouse to the
end-customer, and explain to us how your policy is consistent with SAB
Topic 13.
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8.
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We
note your response to comment 33 of our letter dated March 11,
2010. Please expand your disclosure to describe more fully the
revenue cycle related to sales of products sold through by Calavo and
other third-party packinghouses for which you apply net revenue
recognition treatment. In your response, explain to us the
following:
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·
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Whether
your collection of receivables is contingent upon the third-party
packinghouses' collection from the end-customer;
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· |
Whether
you bear inventory risk for the period of time up to delivery to the
third- party packinghouses;
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Whether
you have the ability to select a different packinghouse through which to
market your products;
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· |
Whether
the packinghouse is obligated to pay you for products delivered to it
regardless of whether it has sold the products to an end-customer;
and
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· |
How
the amount you earn is determined (i.e., a fixed dollar amount per
transaction or a commission versus an amount determined based on the
volume and quality of product delivered) and those factors that impact
your net proceeds received.
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·
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Credit
risk resides with the third-party packinghouses for the amounts billed to
the end customer. The Company’s collection of receivables is not
contingent upon the third-party packinghouses’ collection from the
end-customer;
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·
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The
Company bears inventory risk prior the fruit being delivered to and
accepted by the third-party packinghouses since the title on the related
fruit has not transferred to the third-party packinghouses prior to
delivery;
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·
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The
Company is paid for the fruit that it delivers to third-party
packinghouses. The third-party packinghouse initiates and
requests what fruit is to be delivered to them based on the order they
have with their end customers;
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·
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The
Company also generally has the ability to select different third-party
packinghouses to sell and market its
fruit; and
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·
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The
revenues the Company earns related to the fruits sold through third-party
packinghouses are based on the volume and quality of the fruits delivered
to the third-party packinghouses, the market price for such fruit, less
the packinghouses charges to pack and market the
fruit.
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9.
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Please
describe the costs that are netted against revenue in arriving at net
revenue. In your response, tell us where you classify on your
income statement the cultural costs related to goods sold under these
arrangements with third-party
packinghouses.
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10.
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Please
tell us how you considered the guidance of FASB ASC 605-40-45-2 (EITF
01-9) in accounting for the arrangements with the
packinghouses. In this regard, tell us whether you receive an
identifiable benefit for the packaging and marketing services performed by
the third-party packinghouses and whether you can reasonably estimate the
fair value of the benefit
identified.
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11.
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We
note from your response to comment 34 of our letter dated March 11, 2001
that you pay a fixed amount per carton sold to Sunkist for sales and
marketing services. Please clarify that the amount you pay to
Sunkist is a fixed amount per carton sold rather than a fixed amount over
a period of time. In addition, disclose where you classify the
amounts paid to Sunkist for the sales and marketing
services.
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Very
truly yours,
/s/
Stephen C. Mahon
Stephen C. Mahon
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cc:
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Ms.
Janice McGuirk, Division of Corporate Finance
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Mr.
David Walz, Division of Corporate Finance
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Mr.
Ryan Milne, Division of Corporate
Finance
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