Alico, Inc. (“Alico” or the “Company”) (Nasdaq: ALCO) today
announces financial results for the third quarter of fiscal year
2020 and the nine months ended June 30, 2020, the highlights which
are as follows:
- With the recent execution
of two new Citrus supply agreements, the Company now has contracts
in place that provide for prices per pound solid over the next
several years which will be greater than the current year’s prices
per pound solid.
- Company entered into a new
long-term agreement to provide citrus grove management for
approximately 7,000 acres in southwestern
Florida.
- The coronavirus outbreak
(“COVID-19”) did not impact the Company’s fiscal year 2020 harvest
and has not had a material adverse impact on the Company’s overall
business operations.
- Company appoints two new
Board members with Florida agriculture expertise and exceptional
credentials.
- Company provides Net Income
and EBITDA guidance for the remainder of fiscal year
2020.
Results of Operations
For the nine months ended June 30, 2020, the
Company earned net income attributable to Alico common
stockholders of approximately $6.5 million and earnings of $0.86
per diluted common share, compared to net income attributable to
Alico common stockholders of approximately $21.3 million and
earnings of $2.85 per diluted common share for the nine months
ended June 30, 2019. The decrease in net income attributable to
Alico common stockholders is primarily due to a decline in the
market price per pound solids for citrus fruit this past 2019/2020
harvest season because of unfavorable industry supply dynamics and
a decrease in processed box production caused by greater fruit drop
in the current harvest season as compared to the 2018/2019 harvest
season. Partially offsetting this decrease was (i) funds awarded
through the federal disaster relief program, (ii) a reduction in
certain general and administrative costs and (iii) a gain on the
sale of certain parcels on the east side of the Alico Ranch.
When both periods are adjusted for certain
non-recurring items, the Company had adjusted net income of $0.25
per diluted common share for the nine months ended June 30, 2020,
compared to adjusted net income of $3.26 per diluted common share
for the nine months ended June 30, 2019. Adjusted EBITDA for the
nine months ended June 30, 2020 and 2019 was $17.7 million and
$48.1 million, respectively.
These financial results reflect the seasonal
nature of the Company’s business. The majority of the Company’s
citrus crop is harvested in the second and third quarters of the
fiscal year; consequently, most of the Company's profit and cash
flows from operating activities are typically recognized in those
quarters and our working capital requirements are typically greater
in the first and fourth quarters of the fiscal year.
The Company reported the following financial results:
(in thousands, except for per share amounts and percentages) |
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Three Months Ended June
30, |
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Nine Months Ended June
30, |
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2020 |
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2019 |
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Change |
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2020 |
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2019 |
|
Change |
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Net income
attributable to Alico, Inc. common stockholders |
$ |
2,096 |
|
$ |
16,244 |
|
$ |
(14,148 |
) |
(87.1 |
)% |
|
$ |
6,458 |
|
$ |
21,324 |
|
$ |
(14,866 |
) |
(69.7 |
)% |
EBITDA (1) |
$ |
7,518 |
|
$ |
26,962 |
|
$ |
(19,444 |
) |
(72.1 |
)% |
|
$ |
23,932 |
|
$ |
44,472 |
|
$ |
(20,540 |
) |
(46.2 |
)% |
Adjusted EBITDA (1) |
$ |
7,441 |
|
$ |
26,720 |
|
$ |
(19,279 |
) |
(72.2 |
)% |
|
$ |
17,712 |
|
$ |
48,058 |
|
$ |
(30,346 |
) |
(63.1 |
)% |
Earnings per diluted common
share |
$ |
0.28 |
|
$ |
2.17 |
|
$ |
(1.89 |
) |
(87.1 |
)% |
|
$ |
0.86 |
|
$ |
2.85 |
|
$ |
(1.99 |
) |
(69.8 |
)% |
Net
cash provided by operating activities |
$ |
9,433 |
|
$ |
35,618 |
|
$ |
(26,185 |
) |
(73.5 |
)% |
|
$ |
21,121 |
|
$ |
41,686 |
|
$ |
(20,565 |
) |
(49.3 |
)% |
(1) See “Non-GAAP Financial Measures” at the end
of this earnings release for details regarding these measures.
Alico Citrus Division Results
Citrus production for the three and nine months
ended June 30, 2020 and 2019 is summarized in the
following table.
(in thousands,
except per box and per pound solids data) |
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Three MonthsEnded |
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Nine MonthsEnded |
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June 30, |
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Change |
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June 30, |
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Change |
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2020 |
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2019 |
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Unit |
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% |
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2020 |
|
2019 |
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Unit |
|
% |
Boxes Harvested: |
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Early and Mid-Season |
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— |
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— |
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— |
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NM |
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3,146 |
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3,114 |
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32 |
|
1.0 |
% |
Valencias |
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1,905 |
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3,492 |
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(1,587 |
) |
(45.4 |
)% |
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4,165 |
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4,790 |
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(625 |
) |
(13.0 |
)% |
Total Processed |
|
1,905 |
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|
3,492 |
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(1,587 |
) |
(45.4 |
)% |
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7,311 |
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|
7,904 |
|
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(593 |
) |
(7.5 |
)% |
Fresh Fruit |
|
44 |
|
|
74 |
|
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(30 |
) |
(40.5 |
)% |
|
|
247 |
|
|
210 |
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|
37 |
|
17.6 |
% |
Total |
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1,949 |
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|
3,566 |
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(1,617 |
) |
(45.3 |
)% |
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7,558 |
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8,114 |
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(556 |
) |
(6.9 |
)% |
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Pound Solids
Produced: |
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Early and Mid-Season |
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— |
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— |
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— |
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NM |
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17,947 |
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16,873 |
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1,074 |
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6.4 |
% |
Valencias |
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11,970 |
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22,023 |
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(10,053 |
) |
(45.6 |
)% |
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25,631 |
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29,854 |
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(4,223 |
) |
(14.1 |
)% |
Total |
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11,970 |
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22,023 |
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(10,053 |
) |
(45.6 |
)% |
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43,578 |
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46,727 |
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(3,149 |
) |
(6.7 |
)% |
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Average Pound Solids
per Box: |
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Early and Mid-Season |
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— |
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— |
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— |
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NM |
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5.70 |
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5.42 |
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0.28 |
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5.2 |
% |
Valencias |
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6.28 |
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6.31 |
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(0.03 |
) |
(0.5 |
)% |
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6.15 |
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6.23 |
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(0.08 |
) |
(1.3 |
)% |
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Price per Pound
Solids: |
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Early and Mid-Season |
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— |
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— |
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— |
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NM |
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$ |
1.74 |
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$ |
2.35 |
|
$ |
(0.61 |
) |
(26.0 |
)% |
Valencias |
$ |
2.03 |
|
$ |
2.49 |
|
$ |
(0.46 |
) |
(18.5 |
)% |
|
$ |
1.95 |
|
$ |
2.46 |
|
$ |
(0.51 |
) |
(20.7 |
)% |
NM - Not meaningful
For the nine months ended June 30, 2020, Alico
Citrus harvested approximately 7.6 million boxes of fruit, a
decrease of 6.9% from the same period of the prior fiscal year. The
decrease was principally attributable to greater fruit drop in the
current harvest season as compared to the prior harvest season. The
Company saw a reduction in its average blended price per pound
solid fall from $2.42 in the prior fiscal year to $1.86 in the
current fiscal year, largely due to the Florida citrus crop being
greater than expected in the 2018/2019 harvest season, leading to
excess inventory levels at Florida citrus juice processors in the
current harvest season. The price reduction was also impacted
by the continued inflow of imported orange juice, though at lower
levels than the prior year. Because of increased consumption of
not-from-concentrate orange juice by retail consumers since
February 2020, as indicated in the published Nielsen data,
inventory levels at the Florida citrus juice processors have been
decreasing. The Company expects this inventory trend will lead to
improved market pricing improvement in the next harvest season.
The Company’s harvesting activities were not
impacted by the coronavirus pandemic, and there were no disruptions
in delivering fruit to the processors. Additionally, to date, the
Company has not experienced any material challenges to its
operations from COVID-19.
In July 2020, the Company entered into a
long-term agreement to provide citrus grove management services,
including harvest and haul responsibilities, to another top ten
Florida grower, Barron Collier Companies. The Company will manage
citrus operations for approximately 7,000 acres of Barron Collier
groves in Collier and Hendry Counties, in exchange for a per acre
management fee after being reimbursed for all of its costs
incurred.
Water Resources and Other
Operations Division Results
Income from operations for the Water
Resources and Other Operations Division for the nine months
ended June 30, 2020 improved by approximately $0.4 million compared
to the nine months ended June 30, 2019. This was primarily due to
lower expenses related to the dispersed water project, as well as a
reduction in land consulting expenses.
As a result of the Company granting the State of
Florida an option to purchase an approximate 10,700 acre parcel on
the western part of Alico Ranch (the “State Option”), and because a
sale of those acres would affect the proposed dispersed water
management project, the Company has decided to suspend all permit
approval activities for its dispersed water management project. The
Company expects this transaction to close by the end of September
2020.
Management Comment
John Kiernan, President and Chief Executive
Officer, commented, “Alico is deeply saddened by the passing of our
former President and Chairman of the Board, Ben Hill Griffin, III,
last month. Ben Hill Griffin, III was a champion for Florida citrus
and led Alico through a time of strong growth. He was a role model
as a true Floridian and leaves an indelible legacy in agriculture.
Alico is forever proud to have donated the land for Florida Gulf
Coast University under Ben Hill’s leadership. We extend our
sincerest condolences to Mr. Griffin’s family and continue to
strive to live up to the ideals that generations of Griffins set
for Alico.
We are proud to embark on a new business
initiative working with Barron Collier to manage their citrus grove
operations. This multi-year partnership allows Alico to
leverage its existing grove management expertise. We currently own,
operate and manage more than 31,000 net citrus acres and by adding
approximately 7,000 Barron Collier net citrus acres to our platform
it will enable Alico to continue to improve its economies of
scale. We are delighted to have been able to add the majority
of the Barron Collier citrus team members to our Alico team and are
impressed with their professionalism and citrus grove management
expertise. We believe that our combined best practices will
improve all of our groves and continue to establish our position as
a citrus industry leader. Alico will continue to pursue similar
citrus grove management opportunities over the next year.
To continue to become more transparent to our
investors, Alico is providing limited financial guidance for the
remainder of fiscal year ended September 30, 2020. As
anticipated and discussed last quarter, Alico will realize lower
earnings this fiscal year primarily because of lower market prices
for citrus fruit. However, our new citrus supply agreements, which
extend until 2024, have pricing mechanisms which will protect the
Company in the event of over-supply. Under these agreements, Alico
is entitled to receive greater prices per pound solid than the
prices per pound solid realized by the Company this fiscal year, as
the agreements incorporate certain increasing pricing provisions
over the next several seasons. Additionally, because higher levels
of consumer demand have increased not-from-concentrate orange juice
consumption in 2020 and driven down processor inventory levels, we
anticipate the market prices next season for pound solids may be
above our hard floors as well. We are pleased that our operating
costs have been consistent over the last few years, after executing
operational and financial improvements previously outlined in our
Alico 2.0 Modernization program, and hope that pricing improvement
will allow Alico to return to greater levels of profitability.”
Mr. Kiernan continued, “Alico is fortunate to
welcome both Kate English and Adam Putnam to its Board of
Directors, which was announced this morning. These two directors
will further enhance the strength of our existing Board. As
lifelong Floridians, Ms. English and Mr. Putnam both bring
firsthand knowledge of citrus, cattle and recreational hunting
operations to the Alico team. They are exceptional
professionals within their respective fields, and we look forward
to their contributions to support the Company’s strategies and
growth. Ms. English is a Partner at Pavese Law Firm, and her
practice concentrates on environmental and land use law, with an
emphasis on seeking and maintaining entitlements for larger
properties. Mr. Putnam is the Chief Executive Officer of Ducks
Unlimited, an American nonprofit organization dedicated to the
conservation of wetlands and associated upland habitats for
waterfowl and other wildlife. Mr. Putnam also served as
Florida’s Commissioner of Agriculture from 2011-2019 and was a US
Congressman for five terms.”
Other Corporate Financial
Information
General and administrative expenses for the nine
months ended June 30, 2020 totaled approximately $8.3 million,
compared to approximately $10.8 million for the nine months ended
June 30, 2019. The decrease was attributable in large part to (i) a
reduction in professional fees of approximately $2.3 million
relating to corporate matters incurred in the nine months ended
June 30, 2019, (ii) a reduction in consulting and separation fees
of approximately $0.8 million incurred in the nine months ended
June 30, 2019 relating to a settlement agreement with a former
senior executive, (iii) a reduction in rent expense of
approximately $0.15 million as a result of the Company not renewing
its lease for office space in New York City and (iv) a reduction in
Board of Director compensation of approximately $0.15 million.
These decreases were partially offset by an adjustment to stock
compensation expense whereby the Company recorded a reduction in
stock compensation expense of approximately $0.8 million for the
nine months ended June 30, 2019, as a result of a former senior
executive forfeiting his stock options as part of a settled
litigation and an increase in Directors and Officers insurance
premiums of approximately $0.18 million.
Other expense, net, for the nine months ended
June 30, 2020 and 2019 was approximately $1.6 million and
approximately $6.5 million, respectively. The decrease in the other
expense, net is primarily due to (i) the Company recognizing a gain
on sale of real estate, property and equipment and assets held for
sale of approximately $3.0 million during the nine months ended
June 30, 2020 compared to the same period in the prior year where
no significant gain on sale of assets was recorded, (ii) the
Company recognizing a reduction of approximately $1.0 million in
lower interest expense as a result of the reduction of its
long-term debt attributable to making its mandatory principal
payments and making a prepayment of one of its long-term debt
obligations and (iii) during the nine months ended June 30, 2019,
the Company recorded an expense of approximately $1.0 million
relating to the change in fair value of the derivative asset and
derivative liabilities.
During the nine months ended June 30, 2020 the
Company received approximately $4.6 million of additional proceeds
under the Florida Citrus Recovery Block Grant (“Florida CRBG”)
program relating to Hurricane Irma. To date, the Company has
received approximately $20.2 million of proceeds under the Florida
CRBG program, which represented reimbursement under Part 1 and Part
2. The timing and amount to be received under Part 3 of the
Florida CRBG program, if any, has not yet been finalized.
Guidance
Following the close of the 2019/2020 harvest
season and an evaluation of forecasted expenses for its fourth
quarter, the Company is projecting net income for its fiscal year
ended September 30, 2020 between $22.0 million and $24.0 million
and EBITDA for its fiscal year ended September 30, 2020 between
$49.5 million and $52.5 million. The net income and EBITDA guidance
reflects the assumption that the State Option will be exercised and
will close prior to September 30, 2020.
Dividend
On July 12, 2020, the Company paid a third
quarter cash dividend of $0.09 per share on its outstanding common
stock to stockholders of record as of June 28, 2020.
Balance Sheet and Liquidity
The Company continues to demonstrate financial
strength within its balance sheet, as highlighted below:
- The Company’s working capital, excluding approximately $64.4
million drawn on its lines of credit which is being held in cash as
a liquidity reserve, was approximately $24.6 million at June 30,
2020, representing a 2.00 to 1.00 ratio.
- The Company continues to improve upon its debt to equity
ratio. At June 30, 2020, September 30, 2019 and September 30,
2018, the ratios, excluding the approximately $64.4 million drawn
on its lines of credit which is being held in cash, were 0.74 to
1.00, 0.82 to 1.00 and 1.00 to 1.00, respectively.
At June 30, 2020, the Company had term debt,
including lines of credit, net of cash and cash equivalents and
restricted cash, of approximately $134.1 million.
About Alico
Alico, Inc. primarily operates two divisions:
Alico Citrus, one of the nation’s largest citrus producers, and
Alico Water Resources and Other Operations, a leading water storage
and environmental services division. Learn more about Alico
(Nasdaq: “ALCO”) at www.alicoinc.com.
Forward-Looking Statements
This press release contains forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended. These forward-looking statements are based on
Alico’s current expectations about future events and can be
identified by terms such as “plans,” “expect,” “may,” “anticipate,”
“intend,” “should be,” “will be,” “is likely to,” “believes,” and
similar expressions referring to future periods.
Alico believes the expectations reflected in the
forward-looking statements are reasonable but cannot guarantee
future results, level of activity, performance or achievements.
Actual results may differ materially from those expressed or
implied in the forward-looking statements. Therefore, Alico
cautions you against relying on any of these forward-looking
statements. Factors which may cause future outcomes to differ
materially from those foreseen in forward-looking statements
include, but are not limited to: changes in laws, regulation and
rules; weather conditions that affect production, transportation,
storage, demand, import and export of fresh product and their
by-products; increased pressure from diseases including citrus
greening and citrus canker, as well as insects and other pests;
disruption of water supplies or changes in water allocations;
market pricing of citrus; pricing and supply of raw materials and
products; market responses to industry volume pressures; pricing
and supply of energy; changes in interest rates; availability of
financing for land development activities and other growth and
corporate opportunities; onetime events; acquisitions and
divestitures; seasonality; labor disruptions; inability to pay debt
obligations; inability to engage in certain transactions due to
restrictive covenants in debt instruments; government restrictions
on land use; changes in agricultural land values; Alico’s receipt
of future funding from the state of Florida in connection with
water retention projects; impact of the COVID-19 outbreak and the
coronavirus pandemic on our agriculture operations, including
without limitation demand for product, supply chain, health and
availability of our labor force, the labor force of contractors we
engage, and the labor force of our competitors; other risks related
to the duration and severity of the COVID-19 outbreak and
coronavirus pandemic and its impact on Alico’s business; the impact
of the COVID-19 outbreak and coronavirus pandemic on the U.S. and
global economies and financial markets; access to governmental
loans and incentives; any reduction in the public float resulting
from repurchases of common stock by Alico; changes in equity awards
to employees; any increase in the public float resulting from the
distribution by 734 Investors of its shares to its members; whether
the Company's dividend policy, including its recent increased
dividend amounts, is continued; expressed desire of certain of our
stockholders to liquidate their shareholdings by virtue of past
market sales of common stock by sales of common stock or by way of
future transactions; political changes and economic crises;
competitive actions by other companies; increased competition from
international companies; changes in environmental regulations and
their impact on farming practices; the ability to secure permits
for the Water Storage Contract and Project from the South Florida
Water Management District; the land ownership policies of
governments; changes in government farm programs and policies and
international reaction to such programs; changes in pricing
calculations with our customers; fluctuations in the value of the
U. S. dollar, interest rates, inflation and deflation rates; length
of terms of contracts with customers; impact of concentration of
sales to one customer; whether the State of Florida exercises an
option to purchase approximately 10,700 acres of land from Alico;
and changes in and effects of crop insurance programs, global trade
agreements, trade restrictions and tariffs; and soil conditions,
harvest yields, prices for commodities, and crop production
expenses. Other risks and uncertainties include those that
are described in Alico’s SEC filings, which are available on the
SEC’s website at http://www.sec.gov. Alico undertakes no obligation
to subsequently update or revise the forward-looking statements
made in this press release, except as required by law.
This press release also contain financial
projections that are necessarily based upon a variety of estimates
and assumptions which may not be realized and are inherently
subject, in addition to the risks identified in the forward-looking
statement disclaimer, to business, economic, competitive, industry,
regulatory, market and financial uncertainties, many of which are
beyond the Company’s control. There can be no assurance that
the assumptions made in preparing the projected financial impact
will prove accurate. Accordingly, actual results may differ
materially from the projected financial impact.
Investor Contact:
Investor Relations(646)
277-1254InvestorRelations@alicoinc.com
Richard RalloSenior Vice President and Chief Financial
Officer(239) 226-2000rrallo@alicoinc.com
ALICO, INC.CONDENSED
CONSOLIDATED BALANCE SHEETS(in thousands, except
share amounts)
|
June 30, |
|
|
September 30, |
|
|
2020 |
|
|
2019 |
|
|
(Unaudited) |
|
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|
|
ASSETS |
|
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|
Current
assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
80,426 |
|
|
$ |
18,630 |
|
Accounts receivable, net |
|
909 |
|
|
|
713 |
|
Inventories |
|
29,253 |
|
|
|
40,143 |
|
Assets held for sale |
|
1,366 |
|
|
|
1,442 |
|
Prepaid expenses and other current assets |
|
1,645 |
|
|
|
1,049 |
|
Total current assets |
|
113,599 |
|
|
|
61,977 |
|
|
|
|
|
|
|
|
|
Restricted cash |
|
784 |
|
|
|
5,208 |
|
Property and equipment, net |
|
351,077 |
|
|
|
345,648 |
|
Goodwill |
|
2,246 |
|
|
|
2,246 |
|
Other non-current assets |
|
2,226 |
|
|
|
2,309 |
|
Total assets |
$ |
469,932 |
|
|
$ |
417,388 |
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
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|
|
Current
liabilities: |
|
|
|
|
|
|
|
Accounts payable |
$ |
4,503 |
|
|
$ |
4,163 |
|
Accrued liabilities |
|
5,803 |
|
|
|
7,769 |
|
Long-term debt, current portion |
|
5,130 |
|
|
|
5,338 |
|
Deferred retirement obligations |
|
5,226 |
|
|
|
5,226 |
|
Income taxes payable |
|
2,802 |
|
|
|
5,536 |
|
Other current liabilities |
|
1,139 |
|
|
|
919 |
|
Total current liabilities |
|
24,603 |
|
|
|
28,951 |
|
|
|
|
|
|
|
|
|
Long-term debt: |
|
|
|
|
|
|
|
Principal amount, net of current portion |
|
145,810 |
|
|
|
158,111 |
|
Less: deferred financing costs, net |
|
(1,195 |
) |
|
|
(1,369 |
) |
Long-term debt less current portion and deferred financing costs,
net |
|
144,615 |
|
|
|
156,742 |
|
Lines of credit |
|
64,380 |
|
|
|
— |
|
Deferred income tax liabilities,
net |
|
31,353 |
|
|
|
32,125 |
|
Other liabilities |
|
246 |
|
|
|
172 |
|
Total liabilities |
|
265,197 |
|
|
|
217,990 |
|
Commitments and Contingencies
(Note 12) |
|
|
|
|
|
|
|
Stockholders'
equity: |
|
|
|
|
|
|
|
Preferred stock, no par value, 1,000,000 shares authorized; none
issued |
|
— |
|
|
|
— |
|
Common stock, $1.00 par value, 15,000,000 shares authorized;
8,416,145 shares issued and 7,486,108 and 7,476,513 shares
outstanding at June 30, 2020 and September 30, 2019,
respectively |
|
8,416 |
|
|
|
8,416 |
|
Additional paid in capital |
|
20,181 |
|
|
|
19,781 |
|
Treasury stock, at cost, 930,037 and 939,632 shares held at June
30, 2020 and September 30, 2019, respectively |
|
(31,539 |
) |
|
|
(31,943 |
) |
Retained earnings |
|
202,488 |
|
|
|
198,049 |
|
Total Alico stockholders' equity |
|
199,546 |
|
|
|
194,303 |
|
Noncontrolling interest |
|
5,189 |
|
|
|
5,095 |
|
Total stockholders' equity |
|
204,735 |
|
|
|
199,398 |
|
Total liabilities and stockholders' equity |
$ |
469,932 |
|
|
$ |
417,388 |
|
ALICO, INC.CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)(in thousands, except per share
amounts)
|
Three Months EndedJune 30, |
|
|
Nine Months EndedJune 30, |
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Operating revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alico Citrus |
$ |
25,360 |
|
|
$ |
56,819 |
|
|
$ |
85,336 |
|
|
$ |
118,539 |
|
Water Resources and Other Operations |
|
762 |
|
|
|
746 |
|
|
|
2,306 |
|
|
|
2,326 |
|
Total operating revenues |
|
26,122 |
|
|
|
57,565 |
|
|
|
87,642 |
|
|
|
120,865 |
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alico Citrus |
|
19,508 |
|
|
|
31,141 |
|
|
|
67,866 |
|
|
|
73,597 |
|
Water Resources and Other Operations |
|
394 |
|
|
|
420 |
|
|
|
1,325 |
|
|
|
1,768 |
|
Total operating expenses |
|
19,902 |
|
|
|
31,561 |
|
|
|
69,191 |
|
|
|
75,365 |
|
Gross
profit |
|
6,220 |
|
|
|
26,004 |
|
|
|
18,451 |
|
|
|
45,500 |
|
General and administrative
expenses |
|
2,556 |
|
|
|
2,682 |
|
|
|
8,269 |
|
|
|
10,786 |
|
Income from operations |
|
3,664 |
|
|
|
23,322 |
|
|
|
10,182 |
|
|
|
34,714 |
|
Other (expense) income,
net: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
(1,603 |
) |
|
|
(1,745 |
) |
|
|
(4,599 |
) |
|
|
(5,625 |
) |
Gain on sale of real estate, property and equipment and assets held
for sale |
|
154 |
|
|
|
114 |
|
|
|
3,017 |
|
|
|
137 |
|
Change in fair value of derivatives |
— |
|
|
|
— |
|
|
— |
|
|
|
(989 |
) |
Other income (expense) |
|
44 |
|
|
|
8 |
|
|
|
(20 |
) |
|
|
18 |
|
Total other (expense) income, net |
|
(1,405 |
) |
|
|
(1,623 |
) |
|
|
(1,602 |
) |
|
|
(6,459 |
) |
Income before income
taxes |
|
2,259 |
|
|
|
21,699 |
|
|
|
8,580 |
|
|
|
28,255 |
|
Income tax provision |
|
171 |
|
|
|
5,483 |
|
|
|
2,028 |
|
|
|
7,082 |
|
Net income |
|
2,088 |
|
|
|
16,216 |
|
|
|
6,552 |
|
|
|
21,173 |
|
Net loss (income) attributable to
noncontrolling interests |
|
8 |
|
|
|
28 |
|
|
|
(94 |
) |
|
|
151 |
|
Net income attributable
to Alico, Inc. common stockholders |
$ |
2,096 |
|
|
$ |
16,244 |
|
|
$ |
6,458 |
|
|
$ |
21,324 |
|
Per share information
attributable to Alico, Inc. common stockholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common
share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.28 |
|
|
$ |
2.17 |
|
|
$ |
0.86 |
|
|
$ |
2.85 |
|
Diluted |
$ |
0.28 |
|
|
$ |
2.17 |
|
|
$ |
0.86 |
|
|
$ |
2.85 |
|
Weighted-average number
of common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
7,486 |
|
|
|
7,470 |
|
|
|
7,481 |
|
|
|
7,470 |
|
Diluted |
|
7,493 |
|
|
|
7,471 |
|
|
|
7,493 |
|
|
|
7,494 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends declared
per common share |
$ |
0.09 |
|
|
$ |
0.06 |
|
|
$ |
0.27 |
|
|
$ |
0.18 |
|
ALICO, INC.CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)(in thousands)
|
Nine Months EndedJune 30, |
|
|
2020 |
|
|
2019 |
|
Net cash provided by operating activities: |
|
|
|
|
|
|
|
Net income |
$ |
6,552 |
|
|
$ |
21,173 |
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
|
|
|
|
Depreciation, depletion, and amortization |
|
10,847 |
|
|
|
10,441 |
|
Deferred income tax (benefit) expense |
|
(772 |
) |
|
|
454 |
|
Loss on disposal of long-lived assets |
|
48 |
|
|
|
— |
|
Gain on sale of real estate, property and equipment and assets held
for sale |
|
(3,065 |
) |
|
|
(137 |
) |
Change in fair value of derivatives |
|
— |
|
|
|
989 |
|
Impairment of long-lived assets |
|
723 |
|
|
|
244 |
|
Impairment of right-of-use asset |
|
87 |
|
|
|
— |
|
Stock-based compensation expense |
|
1,042 |
|
|
|
537 |
|
Other |
|
15 |
|
|
|
(160 |
) |
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
Accounts receivable |
|
(196 |
) |
|
|
(3,741 |
) |
Inventories |
|
10,890 |
|
|
|
10,327 |
|
Prepaid expenses and other assets |
|
(758 |
) |
|
|
(480 |
) |
Accounts payable and accrued liabilities |
|
(1,852 |
) |
|
|
(2,587 |
) |
Income tax payable |
|
(2,734 |
) |
|
|
4,250 |
|
Other liabilities |
|
294 |
|
|
|
376 |
|
Net cash provided by operating activities |
|
21,121 |
|
|
|
41,686 |
|
|
|
|
|
|
|
|
|
Cash flows from investing
activities: |
|
|
|
|
|
|
|
Purchases of property and equipment |
|
(17,007 |
) |
|
|
(14,567 |
) |
Net proceeds from sale of real estate, property and equipment and
assets held for sale |
|
3,322 |
|
|
|
419 |
|
Change in deposits on purchase of citrus trees |
|
53 |
|
|
|
(256 |
) |
Deposit on purchase of citrus grove |
|
(25 |
) |
|
|
— |
|
Advances on notes receivables, net |
|
91 |
|
|
|
56 |
|
Net cash used in investing activities |
|
(13,566 |
) |
|
|
(14,348 |
) |
|
|
|
|
|
|
|
|
Cash flows from financing
activities: |
|
|
|
|
|
|
|
Repayments on revolving lines of credit |
|
(46,187 |
) |
|
|
(86,123 |
) |
Borrowings on revolving lines of credit |
|
110,567 |
|
|
|
83,438 |
|
Principal payments on term loans |
|
(12,509 |
) |
|
|
(8,169 |
) |
Treasury stock purchases |
|
(238 |
) |
|
|
(25,576 |
) |
Payment on termination of sugarcane agreement |
— |
|
|
|
(11,300 |
) |
Dividends paid |
|
(1,793 |
) |
|
|
(1,343 |
) |
Deferred financing costs |
|
(23 |
) |
|
|
— |
|
Net cash provided by (used in) financing activities |
|
49,817 |
|
|
|
(49,073 |
) |
|
|
|
|
|
|
|
|
Net increase (decrease)
in cash and cash equivalents and restricted cash |
|
57,372 |
|
|
|
(21,735 |
) |
Cash and cash equivalents and
restricted cash at beginning of the period |
|
23,838 |
|
|
|
32,260 |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents and restricted cash at end of the
period |
$ |
81,210 |
|
|
$ |
10,525 |
|
Non-GAAP Financial Measures
Adjusted EBITDA(in thousands)
|
Three Months Ended June 30, |
|
|
Nine Months Ended June 30, |
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to
common stockholders |
$ |
2,096 |
|
|
$ |
16,244 |
|
|
$ |
6,458 |
|
|
$ |
21,324 |
|
Interest expense |
|
1,603 |
|
|
|
1,745 |
|
|
|
4,599 |
|
|
|
5,625 |
|
Income tax provision |
|
171 |
|
|
|
5,483 |
|
|
|
2,028 |
|
|
|
7,082 |
|
Depreciation, depletion, and amortization |
|
3,648 |
|
|
|
3,490 |
|
|
|
10,847 |
|
|
|
10,441 |
|
EBITDA |
|
7,518 |
|
|
|
26,962 |
|
|
|
23,932 |
|
|
|
44,472 |
|
Adjustments for non-recurring
items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment of right-of-use asset |
|
— |
|
|
|
— |
|
|
|
87 |
|
|
|
— |
|
Impairment of long-lived assets |
|
— |
|
|
|
244 |
|
|
|
723 |
|
|
|
244 |
|
Employee stock compensation expense (1) |
|
77 |
|
|
|
114 |
|
|
|
512 |
|
|
|
684 |
|
Separation agreement expense (2) |
|
— |
|
|
|
— |
|
|
|
104 |
|
|
|
800 |
|
Tender offer expenses |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
32 |
|
Professional fees relating to corporate matters |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,283 |
|
Change in fair value of derivatives |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
989 |
|
Forfeiture of stock options (3) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(823 |
) |
Federal relief proceeds - Hurricane Irma |
|
— |
|
|
|
(486 |
) |
|
|
(4,629 |
) |
|
|
(486 |
) |
Gains on sale of real estate, property and equipment and assets
held for sale |
|
(154 |
) |
|
|
(114 |
) |
|
|
(3,017 |
) |
|
|
(137 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
$ |
7,441 |
|
|
$ |
26,720 |
|
|
$ |
17,712 |
|
|
$ |
48,058 |
|
(1) Includes stock compensation expense for current and former
executives and managers.(2) Includes separation expenses for a
former CEO and senior manager.(3) Includes forfeitures of stock
options by former CEO, resulting in expense recapture.
Adjusted Earnings Per Diluted Common Share(in
thousands)
|
Three Months Ended June 30, |
|
|
Nine Months Ended June 30, |
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to
common stockholders |
$ |
2,096 |
|
|
$ |
16,244 |
|
|
$ |
6,458 |
|
|
$ |
21,324 |
|
Adjustments for non-recurring
items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment of right-of-use asset |
|
— |
|
|
|
— |
|
|
|
87 |
|
|
|
— |
|
Impairment of long-lived assets |
|
— |
|
|
|
244 |
|
|
|
723 |
|
|
|
244 |
|
Employee stock compensation expense (1) |
|
77 |
|
|
|
114 |
|
|
|
512 |
|
|
|
684 |
|
Separation agreement expense (2) |
|
— |
|
|
|
— |
|
|
|
104 |
|
|
|
800 |
|
Tender offer expenses |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
32 |
|
Professional fees relating to corporate matters |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,283 |
|
Change in fair value of derivatives |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
989 |
|
Forfeiture of stock options (3) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(823 |
) |
Federal relief proceeds - Hurricane Irma |
|
— |
|
|
|
(486 |
) |
|
|
(4,629 |
) |
|
|
(486 |
) |
Gains on sale of real estate, property and equipment and assets
held for sale |
|
(154 |
) |
|
|
(114 |
) |
|
|
(3,017 |
) |
|
|
(137 |
) |
Tax impact |
|
(160 |
) |
|
|
64 |
|
|
|
1,671 |
|
|
|
(468 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income
attributable to common stockholders |
$ |
1,859 |
|
|
$ |
16,066 |
|
|
$ |
1,909 |
|
|
$ |
24,442 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted common shares |
|
7,493 |
|
|
|
7,471 |
|
|
|
7,493 |
|
|
|
7,494 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income per
diluted common share |
$ |
0.25 |
|
|
$ |
2.15 |
|
|
$ |
0.25 |
|
|
$ |
3.26 |
|
(1) Includes stock compensation expense for current and former
executives and managers.(2) Includes separation expenses for a
former CEO and senior manager.(3) Includes forfeitures of stock
options by former CEO, resulting in expense recapture.
Alico utilizes the non-GAAP measures EBITDA,
Adjusted EBITDA and Adjusted Earnings per Diluted Common Share
among other measures, to evaluate the performance of its business.
Due to significant depreciable assets associated with the nature of
our operations and, to a lesser extent, interest costs associated
with our capital structure, management believes that EBITDA,
Adjusted EBITDA and Adjusted Earnings per Diluted Common Share are
important measures to evaluate our results of operations between
periods on a more comparable basis and to help investors analyze
underlying trends in our business, evaluate the performance of our
business both on an absolute basis and relative to our peers and
the broader market, provide useful information to both management
and investors by excluding certain items that may not be indicative
of our core operating results and operational strength of our
business and help investors evaluate our ability to service our
debt. Such measurements are not prepared in accordance with
accounting principles generally accepted in the United States
(“U.S. GAAP”) and should not be construed as an alternative to
reported results determined in accordance with U.S. GAAP. The
non-GAAP information provided is unique to Alico and may not be
consistent with methodologies used by other companies. EBITDA is
defined as net income before interest expense, provision for income
taxes, depreciation and amortization. Adjusted EBITDA is defined as
net income before interest expense, provision for income taxes,
depreciation and amortization and adjustments for non-recurring
transactions or transactions that are not indicative of our core
operating results, such as gains or losses on sales of real estate,
property and equipment and assets held for sale. Adjusted Earnings
per Diluted Common Share is defined as net income adjusted for
non-recurring transactions divided by diluted common shares.
Fiscal Year 2020 Guidance |
|
(in thousands) |
|
|
|
|
Fiscal Year End |
|
September 30, 2020 |
|
Projected range |
Net Income attributable to
common stockholders |
$22,000 -
$24,000 |
Interest expense |
$5,900 -
$6,100 |
Income tax provision |
$7,300 -
$7,900 |
Depreciation, depletion and amortization |
$14,300 -
$14,500 |
|
|
EBITDA |
$49,500 -
$52,500 |
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