Alico, Inc. (“Alico” or the “Company”) (Nasdaq “ALCO”) today
announces financial results for the fourth quarter and fiscal year
ended September 30, 2018 and an update on the Alico 2.0
Modernization Program.
For the fiscal year ended September 30,
2018, the Company recorded net income attributable to Alico common
shareholders of $13.1 million and earnings of $1.57 per diluted
common share, compared to a net loss attributable to Alico common
shareholders of $9.5 million and a loss of $1.14 per diluted common
share in the prior fiscal year. Net income attributable to Alico
common shareholders for the fiscal year ended September 30, 2018
benefited from higher gains from sales of real estate, property and
equipment and assets held for sale, insurance proceeds received
relating to Hurricane Irma damage, lower operating expenses and a
one-time deferred tax benefit of approximately $9.8 million due to
the federal corporate tax rate reduction enacted on December 22,
2017. These benefits were offset by lower citrus production due to
the impact of Hurricane Irma and a valuation allowance of
approximately $5.6 million associated with the expiration of a
capital loss carryforward.
When both periods are adjusted for non-recurring
items related to transaction costs, separation and consulting
arrangements, gains on sale of real estate, property and equipment,
assets held for sale, employee stock compensation expense,
impairment of inventory and long-lived assets, insurance proceeds
received relating to Hurricane Irma, and net deferred tax
adjustments, the Company had an adjusted net loss attributable to
Alico common shareholders of $1.6 million and adjusted earnings of
$(0.19) per diluted common share for the fiscal year ended
September 30, 2018, compared to adjusted net income attributable to
Alico common shareholders of $2.0 million and adjusted earnings of
$0.24 per diluted common share for the fiscal year ended September
30, 2017. Adjusted EBITDA for the fiscal years ended September 30,
2018 and 2017 was $21.2 million and $35.7 million, respectively.
Adjusted free cash flow for the fiscal years ended
September 30, 2018 and 2017 was $(3.5) million and $16.8
million, respectively.
The Company reported the following financial
results: (1)
(in thousands except
for per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Fiscal Year Ended September 30, |
|
2018 |
|
2017 |
|
Change |
|
2018 |
|
2017 |
|
Change |
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to Alico, Inc. common stockholders |
$ |
718 |
|
|
$ |
(19,028 |
) |
|
$ |
19,746 |
|
|
$ |
13,050 |
|
|
$ |
(9,451 |
) |
|
$ |
22,501 |
|
EBITDA |
$ |
5,742 |
|
|
$ |
(23,673 |
) |
|
$ |
29,415 |
|
|
$ |
35,757 |
|
|
$ |
11,070 |
|
|
$ |
24,687 |
|
Earnings (loss) per
diluted common share |
$ |
0.09 |
|
|
$ |
(2.29 |
) |
|
$ |
2.38 |
|
|
$ |
1.57 |
|
|
$ |
(1.14 |
) |
|
$ |
2.71 |
|
Net cash provided by
(used in) operating activities |
$ |
2,936 |
|
|
$ |
(671 |
) |
|
$ |
3,607 |
|
|
$ |
19,055 |
|
|
$ |
28,229 |
|
|
$ |
(9,174 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
- See “Non-GAAP Financial Measures” at the end of this earnings
release for details regarding certain of these measures.
Alico Citrus Division
Results
For the fiscal year ended September 30,
2018, Alico Citrus harvested approximately 4.8 million boxes of
fruit, a decline of 36.4% from the prior fiscal year. The Early and
Mid-Season box production decreased by 43.7%, while the Valencia
box production decreased by 28.5% as compared to the prior fiscal
year. The decrease was a direct result of the impact of Hurricane
Irma.
Following Hurricane Irma in September 2017, the
Company estimated its fiscal year 2018 box production would
decrease by approximately 40-45% compared to fiscal year
2017. As stated above, based on the final harvest totals, the
Company’s box production was down approximately 36.4%. The
improvement over the original estimate is the result of the
Valencia late season crop experiencing less fruit drop than was
anticipated.
To date, the Company has received approximately
$9.4 million in property and casualty and crop insurance proceeds
relating to the damage incurred from Hurricane Irma. In addition,
the Company may be eligible for Hurricane Irma federal relief
programs distributed by the Farm Service Agency under the 2017
Wildfires and Hurricane Indemnity Program (2017 WHIP) as well as
block grants that will be administered through the State of
Florida. At this time, the Company cannot determine the
amount, if any, of federal relief funds which will be received or
when any such funds will be disbursed.
Citrus production for the fiscal years ended
September 30, 2018 and 2017 is summarized in the following
table:
(boxes and pound solids
in thousands) |
|
|
|
|
|
|
|
|
Fiscal Year Ended |
|
|
|
|
|
September 30, |
|
Change |
|
2018 |
|
2017 |
|
Unit |
|
% |
Boxes
Harvested: |
|
|
|
|
|
|
|
Early and
Mid-Season |
1,811 |
|
|
3,215 |
|
|
(1,404 |
) |
|
(43.7 |
)% |
Valencias |
2,891 |
|
|
4,044 |
|
|
(1,153 |
) |
|
(28.5 |
)% |
Total Processed |
4,702 |
|
|
7,259 |
|
|
(2,557 |
) |
|
(35.2 |
)% |
Fresh
Fruit |
125 |
|
|
328 |
|
|
(203 |
) |
|
(61.9 |
)% |
Total |
4,827 |
|
|
7,587 |
|
|
(2,760 |
) |
|
(36.4 |
)% |
Pound Solids
Produced: |
|
|
|
|
|
|
|
Early and
Mid-Season |
9,194 |
|
|
17,950 |
|
|
(8,756 |
) |
|
(48.8 |
)% |
Valencias |
17,319 |
|
|
24,661 |
|
|
(7,342 |
) |
|
(29.8 |
)% |
Total |
26,513 |
|
|
42,611 |
|
|
(16,098 |
) |
|
(37.8 |
)% |
|
|
|
|
|
|
|
|
Average Pound Solids
Per Box |
5.64 |
|
5.87 |
|
(0.23 |
) |
|
(3.9 |
)% |
|
|
|
|
|
|
|
|
Price per Pound
Solids: |
|
|
|
|
|
|
|
Early and
Mid-Season |
$ |
2.64 |
|
|
$ |
2.56 |
|
|
$ |
0.08 |
|
|
3.1 |
% |
Valencias |
$ |
2.82 |
|
|
$ |
2.72 |
|
|
$ |
0.10 |
|
|
3.7 |
% |
Alico Citrus costs of sales decreased to $46.5
million in fiscal year 2018 compared to $84.9 million in fiscal
year 2017. The $38.4 million decrease in costs of sales was due to
an inventory casualty loss recorded in fiscal year 2017 after
Hurricane Irma caused a loss of unharvested fruit and certain other
impairments to long-lived assets and a reduction in costs related
to the Alico 2.0 efficiencies.
Water Resources and Other Operations
Division Results
Operating revenue for the Water Resources and
Other Operations division was $3.2 million in fiscal year 2018,
compared to $6.4 million in the prior fiscal year, a decrease of
$3.2 million. The decrease in revenue is primarily due to the sale
of the Company's cattle herd in January 2018. As part of such sales
transaction, the Company entered into a long-term leasing
arrangement with the purchaser for the grazing rights on the
property. In addition, the Company continues to own the property
and conduct its long-term water dispersement program and wildlife
management programs on such property.
Water Resources and Other Operations financial
results also include $1.6 million and $1.8 million of operating
costs related to the environmental services project in fiscal years
2018 and 2017, respectively. Funding for the water project was
approved in the Florida state budget in 2018, and on September 19,
2018, the South Florida Water Management District ("SFWMD") issued
a press release announcing the issuance of an Environmental
Resource Permit for Alico. The SFWMD release also stated that (i)
the issuance of the permit cleared the path for Alico to deliver a
dispersed water storage project in the Caloosahatchee Watershed,
(ii) Alico has all necessary state approvals to proceed, and (iii)
the project is expected to be operational within one year from the
start of construction, which is contingent on Alico securing
additional local and federal approvals. These approvals include a
compatible use agreement from the Natural Resources Conservation
Service, as well as approvals from the local water control
districts.
Other Corporate Financial Information
General and administrative expenses increased
slightly to $15.1 million in fiscal year 2018 from $15.0 million in
fiscal year 2017. The slight increase primarily relates to
increases in bonus awards provided to senior executives and
managers, an acceleration of stock compensation expense as a result
of two senior executives forfeiting a portion of their stock
options without any replacement options being granted, costs
related to the tender offer which commenced in September 2018 and
an increase in rent, as a result of the Company selling its office
building in Fort Myers, FL, and leasing back a portion of the space
beginning October 30, 2017. These items resulted in an aggregate
increase in general and administrative expenses of approximately
$2.7 million. These increases were offset by decreases in general
and administrative expenses primarily attributable to salary and
stock compensation expenses incurred with respect to employment
agreements executed for new executives in fiscal year 2017, which
did not occur in fiscal year 2018, a reduction of expenses incurred
relating to separation and consulting arrangements, and a reduction
in bad debt expense and recruiting fees.
Other income (expense), net was $2.7 million for
fiscal year 2018 compared to $(7.2) million for fiscal year 2017.
The increase of $9.9 million is primarily attributable to an $8.9
million increase in gain on sale of real estate, property and
equipment and assets held for sale and a decrease in interest
expense by $0.6 million as certain balances on term loans have been
reduced as a result of principal payments.
The Company paid a fourth quarter cash dividend
of $0.06 per share on its outstanding common stock on
October 12, 2018 to shareholders of record at
September 28, 2018. Dividends for the year totaled $0.24
per share.
The Company ended the year with long-term debt,
net of cash and cash equivalents and restricted cash, of $144.8
million.
In October 2018, the Company completed a tender
offer of 752,234 shares at a price of $34.00 per share. This
transaction was accretive to both Earnings Per Share and Return on
Capital Employed and resulted in a new fully diluted share count of
approximately 7.4 million. 734 Investors, LLC, Alico’s largest
shareholder since 2013, participated in the tender offer and sold a
small percentage of its holdings to satisfy a debt obligation.
Members of neither the management team nor the Board of Directors
sold any shares directly into the tender offer.
UPDATE ON ALICO 2.0 MODERNIZATION
PROGRAM
On November 16, 2017, Alico announced the Alico
2.0 Modernization Program (“Alico 2.0”). This program was initiated
to transform three legacy businesses (Alico, Orange Co., and Silver
Nip) into a single efficient enterprise, Alico Citrus, so it would
remain the leader in the U.S. citrus industry. As part of
Alico 2.0, Alico Citrus is reducing expenses through better
purchasing, more precise application of selected fertilizers and
chemicals, by outsourcing work such as harvesting, hauling, and
certain caretaking tasks, and by streamlining grove management.
Alico Citrus has also deployed a more efficient labor model that is
consistent and uniform for field staffing and grove operating
programs and aligns with the geographical footprint of the citrus
groves.
The Company previously provided guidance on
November 17, 2017, after assessing the impact of Hurricane
Irma. That guidance described the expected improvements of
Alico 2.0 once citrus production returned to pre-hurricane
production levels of approximately 7.9 million boxes annually.
Today, the Company still believes this production level is
potentially achievable in fiscal year 2020.
This season, falling in fiscal year 2019, is the
second season since Hurricane Irma, whose impact is still being
felt by the Company. For this fiscal year, the Company expects
production in the range of 6.3-6.6 million boxes, which would
represent a 31-37% increase from fiscal year 2018 production of
approximately 4.8 million boxes.
Our restructuring and cost-cutting programs are
substantially complete, and the Company is working to maintain
operational efficiencies and deploy its resources to solidify the
Company's position as a leader in the recovering citrus
industry.
As previously announced, Alico Water Resources
received a conditional Environmental Resource Permit from the South
Florida Water Management District in September 2018. The Company
has been working diligently with other federal, state and local
agencies to secure final approvals for the Alico Dispersed Water
Project. If the Company is not successful in receiving full
permitting for the water project, it plans to explore alternative
uses of the 35,000 acre property, including complete
disposition.
The Company continues to conduct its divestiture
program for low returning assets.
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 its
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;
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; our ability to
achieve the anticipated cost savings under the Alico 2.0
Modernization Program; customer concentration; 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; and market and pricing risks due to concentrated ownership
of stock. 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.
Investor Contact:John E.
KiernanExecutive Vice President and Chief Financial Officer(239)
226-2000JKiernan@alicoinc.com
|
ALICO, INC. |
CONSOLIDATED BALANCE SHEETS |
(in thousands, except share
amounts) |
|
|
|
|
|
September 30, |
|
2018 |
|
2017 |
ASSETS |
|
|
|
Current
assets: |
|
|
|
Cash and cash
equivalents |
$ |
25,260 |
|
|
$ |
3,395 |
|
Accounts
receivable, net |
2,544 |
|
|
4,286 |
|
Inventories |
41,033 |
|
|
36,204 |
|
Assets
held for sale |
1,391 |
|
|
20,983 |
|
Prepaid
expenses and other current assets |
2,012 |
|
|
1,621 |
|
Total current
assets |
72,240 |
|
|
66,489 |
|
|
|
|
|
Restricted cash |
7,000 |
|
|
— |
|
Property and equipment,
net |
340,403 |
|
|
349,337 |
|
Goodwill |
2,246 |
|
|
2,246 |
|
Deferred financing
costs, net of accumulated amortization |
136 |
|
|
262 |
|
Other non-current
assets |
1,397 |
|
|
848 |
|
Total
assets |
$ |
423,422 |
|
|
$ |
419,182 |
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
Current
liabilities: |
|
|
|
Accounts
payable |
$ |
3,764 |
|
|
$ |
3,192 |
|
Accrued
liabilities |
9,226 |
|
|
6,781 |
|
Income
taxes payable |
2,320 |
|
|
— |
|
Long-term
debt, current portion |
5,275 |
|
|
4,550 |
|
Other
current liabilities |
913 |
|
|
1,460 |
|
Total current
liabilities |
21,498 |
|
|
15,983 |
|
|
|
|
|
Long-term debt: |
|
|
|
Principal |
169,074 |
|
|
181,926 |
|
Less:
deferred financing costs, net |
(1,563 |
) |
|
(1,767 |
) |
Long-term
debt less deferred financing costs, net |
167,511 |
|
|
180,159 |
|
Lines of credit |
2,685 |
|
|
— |
|
Deferred income tax
liability |
25,153 |
|
|
27,108 |
|
Deferred gain on
sale |
24,928 |
|
|
26,440 |
|
Deferred retirement
obligations, net of current portion |
4,052 |
|
|
4,123 |
|
Total
liabilities |
245,827 |
|
|
253,813 |
|
|
|
|
|
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 and
8,416,145 shares issued and 8,199,957 and 8,238,830 shares
outstanding at September 30, 2018 and 2017, respectively |
8,416 |
|
|
8,416 |
|
Additional paid in capital |
20,126 |
|
|
18,694 |
|
Treasury
stock, at cost, 216,188 and 177,315 shares held at September 30,
2018 and 2017, respectively |
(7,536 |
) |
|
(6,502 |
) |
Retained
earnings |
151,111 |
|
|
140,033 |
|
Total Alico stockholders'
equity |
172,117 |
|
|
160,641 |
|
Noncontrolling interest |
5,478 |
|
|
4,728 |
|
Total stockholders'
equity |
177,595 |
|
|
165,369 |
|
Total liabilities and
stockholders' equity |
$ |
423,422 |
|
|
$ |
419,182 |
|
|
|
ALICO, INC. |
CONSOLIDATED STATEMENTS OF
OPERATIONS |
(in thousands, except per share
amounts) |
|
|
|
|
|
|
|
Fiscal Year Ended September 30, |
|
2018 |
|
2017 |
|
2016 |
Operating
revenues: |
|
|
|
|
|
Alico Citrus |
$ |
78,121 |
|
|
$ |
123,441 |
|
|
$ |
137,282 |
|
Water
Resources and Other Operations |
3,160 |
|
|
6,388 |
|
|
6,914 |
|
Total operating
revenues |
81,281 |
|
|
129,829 |
|
|
144,196 |
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
Alico
Citrus |
51,709 |
|
|
111,947 |
|
|
102,347 |
|
Water
Resources and Other Operations |
3,979 |
|
|
8,952 |
|
|
6,790 |
|
Total operating
expenses |
55,688 |
|
|
120,899 |
|
|
109,137 |
|
|
|
|
|
|
|
Gross
profit |
25,593 |
|
|
8,930 |
|
|
35,059 |
|
General and
administrative expenses |
15,058 |
|
|
15,024 |
|
|
13,213 |
|
|
|
|
|
|
|
Income (loss) from
operations |
10,535 |
|
|
(6,094 |
) |
|
21,846 |
|
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
Investment and interest (loss) income, net |
39 |
|
|
(148 |
) |
|
— |
|
Interest
expense |
(8,561 |
) |
|
(9,141 |
) |
|
(9,893 |
) |
Gain on
sale of real estate, property and equipment and assets held for
sale |
11,041 |
|
|
2,181 |
|
|
618 |
|
Other
income (expense), net |
136 |
|
|
(140 |
) |
|
(91 |
) |
Total other income (expense), net |
2,655 |
|
|
(7,248 |
) |
|
(9,366 |
) |
Income (loss)
before income taxes |
13,190 |
|
|
(13,342 |
) |
|
12,480 |
|
Provision (benefit) for
income taxes |
390 |
|
|
(3,846 |
) |
|
5,521 |
|
Net income
(loss) |
12,800 |
|
|
(9,496 |
) |
|
6,959 |
|
Net loss attributable
to noncontrolling interests |
250 |
|
|
45 |
|
|
34 |
|
Net income
(loss) attributable to Alico, Inc. common
stockholders |
$ |
13,050 |
|
|
$ |
(9,451 |
) |
|
$ |
6,993 |
|
|
|
|
|
|
|
Per share
information attributable to Alico, Inc. common
stockholders: |
|
|
|
|
|
Earnings (loss)
per common share: |
|
|
|
|
|
Basic |
$ |
1.59 |
|
|
$ |
(1.14 |
) |
|
$ |
0.84 |
|
Diluted |
$ |
1.57 |
|
|
$ |
(1.14 |
) |
|
$ |
0.84 |
|
Weighted-average number of common shares
outstanding: |
|
|
|
|
|
Basic |
8,232 |
|
|
8,300 |
|
|
8,303 |
|
Diluted |
8,301 |
|
|
8,300 |
|
|
8,311 |
|
|
|
|
|
|
|
Cash dividends
declared per common share |
$ |
0.24 |
|
|
$ |
0.24 |
|
|
$ |
0.24 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ALICO, INC. |
CONSOLIDATED STATEMENTS OF CASH
FLOWS |
(in thousands) |
|
|
|
|
|
|
|
Fiscal Year Ended September 30, |
|
2018 |
|
2017 |
|
2016 |
Cash flows from
operating activities: |
|
|
|
|
|
Net income (loss) |
$ |
12,800 |
|
|
$ |
(9,496 |
) |
|
$ |
6,959 |
|
Adjustments to reconcile net income (loss) to net cash provided by
operating activities: |
|
|
|
|
|
Gain on
sale of sugarcane land |
(967 |
) |
|
(538 |
) |
|
(618 |
) |
Depreciation, depletion and amortization |
13,756 |
|
|
15,226 |
|
|
15,382 |
|
Loss on
breeding herd sales |
13 |
|
|
337 |
|
|
296 |
|
Deferred
income tax (benefit) expense |
(1,955 |
) |
|
(3,948 |
) |
|
5,277 |
|
Cash
surrender value |
(27 |
) |
|
(15 |
) |
|
(20 |
) |
Deferred
retirement benefits |
(41 |
) |
|
(102 |
) |
|
65 |
|
Magnolia
Fund undistributed (earnings) loss |
(8 |
) |
|
202 |
|
|
103 |
|
(Gain)
loss on sale of real estate, property and equipment and assets held
for sale |
(10,281 |
) |
|
(1,373 |
) |
|
147 |
|
Inventory
casualty loss |
— |
|
|
13,489 |
|
|
— |
|
Inventory
net realizable value adjustment |
1,115 |
|
|
1,199 |
|
|
— |
|
Impairment of long-lived assets and assets held for sale |
2,234 |
|
|
9,346 |
|
|
— |
|
Loss on
disposal of property and equipment |
207 |
|
|
— |
|
|
— |
|
Non-cash
interest expense on deferred gain on sugarcane land |
1,361 |
|
|
1,413 |
|
|
1,406 |
|
Bad debt
expense |
24 |
|
|
312 |
|
|
— |
|
Stock-based compensation expense |
2,613 |
|
|
1,653 |
|
|
924 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
Accounts receivable |
1,718 |
|
|
142 |
|
|
(1,707 |
) |
Inventories |
(6,554 |
) |
|
3,724 |
|
|
(196 |
) |
Prepaid expenses |
177 |
|
|
(604 |
) |
|
(1,758 |
) |
Income tax receivable |
(15 |
) |
|
1,013 |
|
|
1,074 |
|
Other assets |
23 |
|
|
333 |
|
|
821 |
|
Accounts payable and accrued expenses |
2,987 |
|
|
(2,895 |
) |
|
3,720 |
|
Income tax payable |
2,320 |
|
|
— |
|
|
— |
|
Other liabilities |
(2,445 |
) |
|
(1,189 |
) |
|
(1,518 |
) |
Net cash
provided by operating activities |
19,055 |
|
|
28,229 |
|
|
30,357 |
|
|
|
|
|
|
|
Cash flows from
investing activities: |
|
|
|
|
|
Purchases
of property and equipment |
(16,352 |
) |
|
(13,353 |
) |
|
(14,305 |
) |
Return on
investment in Magnolia Fund |
25 |
|
|
324 |
|
|
171 |
|
Net
proceeds from sales of property and equipment and assets held for
sale |
37,969 |
|
|
760 |
|
|
799 |
|
Proceeds
from surrender of life insurance policies |
— |
|
|
— |
|
|
297 |
|
Net
proceeds from sales of real estate |
1,811 |
|
|
2,184 |
|
|
— |
|
Deposit
on purchase of citrus trees |
(431 |
) |
|
— |
|
|
— |
|
Notes
receivable |
(575 |
) |
|
— |
|
|
— |
|
Other |
— |
|
|
— |
|
|
4 |
|
Net cash
provided by (used in) investing activities |
22,447 |
|
|
(10,085 |
) |
|
(13,034 |
) |
|
|
|
|
|
|
Cash flows from
financing activities: |
|
|
|
|
|
Proceeds
from term loans |
— |
|
|
— |
|
|
2,500 |
|
Principal
payments on revolving line of credit |
(25,600 |
) |
|
(70,770 |
) |
|
(53,882 |
) |
Borrowings on revolving line of credit |
28,285 |
|
|
65,770 |
|
|
58,882 |
|
Principal
payments on term loans |
(12,127 |
) |
|
(10,743 |
) |
|
(10,761 |
) |
Contingent consideration paid |
— |
|
|
— |
|
|
(7,500 |
) |
Treasury
stock purchases |
(2,215 |
) |
|
(3,064 |
) |
|
(3,141 |
) |
Dividends
paid |
(1,972 |
) |
|
(1,987 |
) |
|
(1,993 |
) |
Capital
contribution received from noncontrolling interest |
1,000 |
|
|
— |
|
|
— |
|
Capital
lease obligation principal payments |
(8 |
) |
|
(580 |
) |
|
(277 |
) |
Net cash
used in financing activities |
(12,637 |
) |
|
(21,374 |
) |
|
(16,172 |
) |
|
|
|
|
|
|
Net increase
(decrease) in cash and cash equivalents and restricted
cash |
28,865 |
|
|
(3,230 |
) |
|
1,151 |
|
Cash and cash
equivalents and restricted cash at beginning of the year |
3,395 |
|
|
6,625 |
|
|
5,474 |
|
|
|
|
|
|
|
Cash and cash equivalents and restricted cash at end of the
year |
$ |
32,260 |
|
|
$ |
3,395 |
|
|
$ |
6,625 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
disclosure of cash flow information: |
|
|
|
|
|
|
|
|
|
|
|
Cash paid
for interest, net of amount capitalized |
$ |
7,654 |
|
|
$ |
7,534 |
|
|
$ |
7,530 |
|
Cash paid
(refunded) for income taxes, net of income tax |
$ |
25 |
|
|
$ |
(911 |
) |
|
$ |
(878 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
disclosure of non-cash investing and financing
activities: |
|
|
|
|
|
|
|
|
|
|
|
Dividend
declared but unpaid |
$ |
492 |
|
|
$ |
494 |
|
|
$ |
498 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Financial Measures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA |
|
|
|
|
|
|
|
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
Three Months EndedSeptember 30, |
|
Year Ended September 30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to common stockholders |
|
$ |
718 |
|
|
$ |
(19,028 |
) |
|
$ |
13,050 |
|
|
$ |
(9,451 |
) |
Interest
expense |
|
1,879 |
|
|
2,217 |
|
|
8,561 |
|
|
9,141 |
|
Provision
(benefit) for income taxes |
|
(284 |
) |
|
(10,559 |
) |
|
390 |
|
|
(3,846 |
) |
Depreciation, depletion and amortization |
|
3,429 |
|
|
3,697 |
|
|
13,756 |
|
|
15,226 |
|
EBITDA |
|
$ |
5,742 |
|
|
$ |
(23,673 |
) |
|
$ |
35,757 |
|
|
$ |
11,070 |
|
|
|
|
|
|
|
|
|
|
Inventory
casualty loss |
|
— |
|
|
13,489 |
|
|
— |
|
|
13,489 |
|
Inventory
net realizable value adjustment |
|
1,115 |
|
|
1,199 |
|
|
1,115 |
|
|
1,199 |
|
Impairment of long-lived assets and assets held for sale |
|
379 |
|
|
9,346 |
|
|
2,234 |
|
|
9,346 |
|
Gains on
sale of real estate, property and equipment and assets held for
sale |
|
(1,958 |
) |
|
(192 |
) |
|
(11,041 |
) |
|
(2,181 |
) |
Tender
offer expense |
|
493 |
|
|
— |
|
|
493 |
|
|
— |
|
Payments
on consulting agreements |
|
— |
|
|
1,275 |
|
|
188 |
|
|
1,750 |
|
Insurance
proceeds - Hurricane Irma |
|
(5,244 |
) |
|
— |
|
|
(9,429 |
) |
|
— |
|
Stock
compensation expense (1) |
|
1,039 |
|
|
232 |
|
|
1,754 |
|
|
880 |
|
Transaction costs |
|
— |
|
|
— |
|
|
98 |
|
|
196 |
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
$ |
1,566 |
|
|
$ |
1,676 |
|
|
$ |
21,169 |
|
|
$ |
35,749 |
|
|
|
|
|
|
|
|
|
|
(1) Includes stock
compensation expense for current and former executives. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
Earnings (Loss) Per Diluted Common Share |
|
|
|
|
|
|
|
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
Three Months EndedSeptember 30, |
|
Year Ended September 30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to common stockholders |
|
$ |
718 |
|
|
$ |
(19,028 |
) |
|
$ |
13,050 |
|
|
$ |
(9,451 |
) |
Inventory
casualty loss |
|
— |
|
|
13,489 |
|
|
— |
|
|
13,489 |
|
Inventory
net realizable value adjustment |
|
1,115 |
|
|
1,199 |
|
|
1,115 |
|
|
1,199 |
|
Impairment of long-lived assets and asset held for sale |
|
379 |
|
|
9,346 |
|
|
2,234 |
|
|
9,346 |
|
One-time
deferred tax adjustment due to new tax legislation |
|
124 |
|
|
— |
|
|
(9,847 |
) |
|
— |
|
Valuation
allowance on capital loss carryforward |
|
(426 |
) |
|
— |
|
|
5,634 |
|
|
— |
|
Gains on
sale of real estate, property and equipment and assets held for
sale |
|
(1,958 |
) |
|
(192 |
) |
|
(11,041 |
) |
|
(2,181 |
) |
Tender
offer expense |
|
493 |
|
|
— |
|
|
493 |
|
|
— |
|
Payments
on consulting agreements |
|
— |
|
|
1,275 |
|
|
188 |
|
|
1,750 |
|
Insurance
proceeds - Hurricane Irma |
|
(5,244 |
) |
|
— |
|
|
(9,429 |
) |
|
— |
|
Stock
compensation expense (1) |
|
1,039 |
|
|
232 |
|
|
1,754 |
|
|
880 |
|
Transaction costs |
|
— |
|
|
— |
|
|
98 |
|
|
196 |
|
Tax
impact |
|
1,199 |
|
|
(13,488 |
) |
|
4,187 |
|
|
(13,213 |
) |
|
|
|
|
|
|
|
|
|
Adjusted net income
(loss) |
|
$ |
(2,561 |
) |
|
$ |
(7,167 |
) |
|
$ |
(1,564 |
) |
|
$ |
2,015 |
|
|
|
|
|
|
|
|
|
|
Diluted common
shares |
|
8,260 |
|
|
8,300 |
|
|
8,301 |
|
|
8,300 |
|
|
|
|
|
|
|
|
|
|
Adjusted Earnings
(Loss) per Diluted Common Share |
|
$ |
(0.31 |
) |
|
$ |
(0.86 |
) |
|
$ |
(0.19 |
) |
|
$ |
0.24 |
|
|
|
|
|
|
|
|
|
|
(1) Includes stock
compensation expense for current and former executives. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Free
Cash Flow |
|
|
|
|
|
|
|
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
Three Months EndedSeptember 30, |
|
Year Ended September 30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
|
|
|
|
|
|
|
Cash provided by (used
in) operating activities |
|
$ |
2,936 |
|
|
$ |
(671 |
) |
|
$ |
19,055 |
|
|
$ |
28,229 |
|
Adjustments for
non-recurring items: |
|
|
|
|
|
|
|
|
Payments
on consulting agreements |
|
— |
|
|
1,275 |
|
|
188 |
|
|
1,750 |
|
Insurance
proceeds - Hurricane Irma |
|
(5,244 |
) |
|
— |
|
|
(9,429 |
) |
|
— |
|
Tender
offer expense |
|
493 |
|
|
— |
|
|
493 |
|
|
— |
|
Transaction costs |
|
— |
|
|
— |
|
|
98 |
|
|
196 |
|
Tax
impact |
|
1,364 |
|
|
— |
|
|
2,483 |
|
|
— |
|
Capital
expenditures |
|
(4,223 |
) |
|
(1,903 |
) |
|
(16,352 |
) |
|
(13,353 |
) |
|
|
|
|
|
|
|
|
|
Adjusted Free Cash
Flow |
|
$ |
(4,674 |
) |
|
$ |
(1,299 |
) |
|
$ |
(3,464 |
) |
|
$ |
16,822 |
|
|
Alico utilizes the non-GAAP measures EBITDA,
Adjusted EBITDA, Adjusted Earnings (Loss) per Diluted Common Share,
Adjusted Free Cash Flow and Return on Capital Employed 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 and other factors, management believes that
EBITDA, Adjusted EBITDA, Adjusted Earnings (Loss) per Diluted
Common Share, Adjusted Free Cash Flow and Return on Capital
Employed 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 (loss) before interest expense,
provision (benefit) for income taxes, depreciation and
amortization. Adjusted EBITDA is defined as net income (loss)
before interest expense, provision (benefit) 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
(Loss) per Diluted Common Share is defined as earnings adjusted for
non-recurring transactions divided by diluted common shares.
Adjusted Free Cash Flow is defined as cash provided by (used in)
operating activities adjusted for non-recurring transactions less
capital expenditures. The Company uses Adjusted Free Cash Flow to
evaluate its business and this measure is considered an important
indicator of the Company's liquidity, including its ability to
reduce net debt, make strategic investments, and pay dividends to
common stockholders. The Company’s definition of Adjusted Free Cash
Flow does not represent residual cash flows available for
discretionary spending. Return on Capital Employed is defined
as earnings before interest and taxes divided by total capital with
total capital defined as debt plus stockholders equity.
Alico (NASDAQ:ALCO)
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