Alico, Inc. (“Alico” or the “Company”) (Nasdaq: ALCO) today
announces financial results for the fourth quarter and fiscal year
ended September 30, 2019, the highlights which are as follows:
- Processed box production
increases 68% from prior year and 9% from pre-hurricane harvest
season.
- Company records net income
attributable to common stockholders of $37.8 million and adjusted
EBITDA of $48.5 million.
- Company increases quarterly
dividend by 50% to $0.09 per share for the upcoming quarter ending
December 31, 2019.
- Company achieves goals of
Alico 2.0 Modernization Program (“Alico2.0”) and completes
transition to a high-quality, low-cost producer of citrus fruit.
$12 million of expense savings was targeted when Alico 2.0 was
announced in 2017 and over $16 million is now being saved
annually.
- Company generates Return on
Assets of 9.0%, Return on Invested Capital of 10.1%, Return on
Capital Employed of 12.6% and Return on Equity of
20.7%.
Results of Operations
For the fiscal year ended September 30, 2019,
the Company recorded net income attributable to Alico common
stockholders of $37.8 million and earnings of $5.05 per diluted
common share, compared to net income attributable to Alico common
stockholders of $13.1 million and earnings of $1.57 per diluted
common share in the prior year. The increase in net income
attributable to Alico common stockholders is primarily due to
increased processed box production in the current fiscal year, as
compared to the prior fiscal year, funds awarded through the
federal disaster relief program and the impact of a valuation
allowance resulting in tax expense for the fiscal year ended
September 30, 2018. Partially offsetting this increase are higher
harvesting and hauling costs directly related to the greater
processed box production, and a one-time deferred tax benefit
attributable to the federal corporate tax rate change enacted on
December 22, 2017, that was recorded in the fiscal year ended
September 30, 2018.
When both years are adjusted for certain
non-recurring items, the Company had adjusted earnings of $2.86 per
diluted common share for the fiscal year ended September 30, 2019,
compared to an adjusted loss of $0.19 per diluted common share for
the fiscal year ended September 30, 2018. Adjusted EBITDA for the
fiscal years ended September 30, 2019 and 2018 was $48.5 million
and $21.2 million, respectively.
The Company reported the following financial results:
(in
thousands, except for per share amounts and percentages) |
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Three Months Ended September 30, |
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Fiscal Year
Ended September 30, |
|
2019 |
|
2018 |
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Change |
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2019 |
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2018 |
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Change |
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Net income attributable to Alico common stockholders |
$ |
16,509 |
|
$ |
718 |
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$ |
15,791 |
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NM |
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$ |
37,833 |
|
$ |
13,050 |
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$ |
24,783 |
|
189.9 |
% |
EBITDA
(1) |
$ |
27,248 |
|
$ |
5,742 |
|
$ |
21,506 |
|
374.5 |
% |
|
$ |
71,720 |
|
$ |
35,757 |
|
$ |
35,963 |
|
100.6 |
% |
Earnings per
diluted common share |
$ |
2.21 |
|
$ |
0.09 |
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$ |
2.12 |
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NM |
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$ |
5.05 |
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$ |
1.57 |
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$ |
3.48 |
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221.7 |
% |
Net cash
provided by operating activities |
$ |
7,146 |
|
$ |
2,360 |
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$ |
4,786 |
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202.8 |
% |
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$ |
48,832 |
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$ |
18,578 |
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$ |
30,254 |
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162.8 |
% |
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(1) See “Non-GAAP Financial Measures” at the end
of this earnings release for details regarding these measures.NM -
Not meaningful
Alico Citrus Division Results
Citrus production for the fiscal years
ended September 30, 2019 and 2018 is summarized in the
following table.
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(in thousands, except
per box and per pound solids data) |
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Fiscal Year
Ended |
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September 30, |
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Change |
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2019 |
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2018 |
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Unit |
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% |
Boxes Harvested: |
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Early and Mid-Season |
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3,114 |
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1,811 |
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1,303 |
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71.9 |
% |
Valencias |
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4,790 |
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2,891 |
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1,899 |
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65.7 |
% |
Total Processed |
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7,904 |
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4,702 |
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3,202 |
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68.1 |
% |
Fresh Fruit |
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210 |
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125 |
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85 |
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68.0 |
% |
Total |
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8,114 |
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4,827 |
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3,287 |
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68.1 |
% |
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Pound Solids Produced: |
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Early and Mid-Season |
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16,873 |
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9,194 |
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7,679 |
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83.5 |
% |
Valencias |
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29,854 |
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17,319 |
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12,535 |
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72.4 |
% |
Total |
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46,727 |
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26,513 |
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20,214 |
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76.2 |
% |
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Average Pound Solids per Box: |
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Early and Mid-Season |
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5.42 |
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5.07 |
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0.35 |
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6.9 |
% |
Valencias |
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6.23 |
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5.99 |
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0.24 |
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4.0 |
% |
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Price per Pound Solids: |
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Early and Mid-Season |
$ |
2.35 |
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$ |
2.64 |
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$ |
(0.29 |
) |
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(11.0 |
)% |
Valencias |
$ |
2.46 |
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$ |
2.82 |
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$ |
(0.36 |
) |
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(12.8 |
)% |
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For the fiscal year ended September 30, 2019,
Alico Citrus harvested 8.1 million boxes of fruit, an increase of
68.1% from the prior fiscal year. The increase was directly related
to the negative impact of Hurricane Irma on the prior fiscal year
harvest. As a result of Hurricane Irma, the Company experienced a
greater amount of fruit drop and consequently harvested a smaller
number of boxes in fiscal year 2018. The Company also saw an
overall increase in pound solids per box, which was 5.91 for the
fiscal year ended September 30, 2019, as compared to 5.64 for the
fiscal year ended September 30, 2018. Last season, the Company
experienced a reduction in the price per pound solids, largely due
to the Florida citrus crop being greater than initially anticipated
and the continued inflow of imported fruit.
During the 2018-2019 harvest season, the Florida
citrus industry benefited from a historically low rate of
post-greening fruit drop. We estimate that our production in the
2019-2020 harvest season will be slightly higher than in the prior
year. However, we anticipate there is likely to be a continued
reduction in market prices during the 2019-2020 harvest season
because of excess supply from domestic and international growers.
Continued scrutiny and aggressive management of all costs and
expenses in this pricing environment will remain one of the
Company’s highest priorities.
Water Resources and Other
Operations Division Results
Operating results for the Water Resources
and Other Operations Division for the fiscal year ended
September 30, 2019 improved by $1.7 million from the fiscal year
ended September 30, 2018, primarily due to the Company selling its
cattle herd in late January 2018, and no longer incurring expenses
relating to calves and culls. As part of this transaction, the
Company entered into a long-term arrangement with the purchaser for
grazing rights on the ranch. The Company continues to own the
property and conduct its long-term dispersed water program and
wildlife management programs. Alico is still working to obtain
approvals necessary to secure required permits to begin
construction of the dispersed water project.
Management Comment
John Kiernan, President and Chief Executive
Officer, is proud of Alico’s financial results over the past year.
“While the majority of our improved earnings was generated from
increased revenues, we continued to execute our Alico 2.0
Modernization Program. We have developed a strong and stable
management team, maintained a culture of accountability and respect
throughout the Company, focused our resources and attention on our
core strength in citrus and made decisions that are designed to
benefit Alico in the long term. The Alico 2.0 program saw the sale
of several underperforming assets and a continued reduction in
operating costs while investing in new plantings to create higher
density in our groves. I believe that Alico is now an
industry-leading high-quality, low-cost producer of citrus fruit in
the U.S.”
“Our net income attributable to Alico common
stockholders’ margin was 30.9% and our adjusted EBITDA margin was
39.6%, both measured as a percentage of revenue, and these margins
generated strong rates of return for our stockholders. Our Return
on Assets was 9.0%, our Return on Invested Capital was 10.1%, our
Return on Capital Employed was 12.6% and our Return on Equity was
20.7%. Going forward, Alico expects to use cash generated from the
sale of underperforming assets, as well as from business
operations, to seed new innovation initiatives, to accelerate debt
repayments, to continue to increase our quarterly dividend, and to
fund working capital needs and tree plantings. I believe that Alico
is well-positioned to continue generating operating income and
positive cash flow.”
Mr. Kiernan continued, “In addition, our Board
of Directors has decided to increase the quarterly dividend by 50%.
This decision is a significant endorsement of our business momentum
and strategic plan. Since 2014, Alico has returned almost $100
million of capital to shareholders and lenders through dividends,
buybacks, a tender offer and debt repayments. At the same time, our
debt balance has been reduced by over 17% over the past three
years.”
Other Corporate Financial
Information
General and administrative expenses increased by
$0.1 million to $15.1 million for the fiscal year ended September
30, 2019. The increase in general and administrative expenses for
the fiscal year ended September 30, 2019, as compared the
fiscal year ended September 30, 2018, was primarily due to an
increase in professional fees, relating to a corporate litigation
matter, of approximately $2.3 million during the fiscal year ended
September 30, 2019. This litigation has been resolved with a
settlement being reached on February 11, 2019. Additionally, as
part of this settlement, the Company recorded consulting and
separation fees of $0.8 million during the fiscal year ended
September 30, 2019. The Company also recorded a one-time
pension expense of approximately $0.7 million in fiscal year 2019
relating to the termination of its defined supplemental deferred
retirement benefit plan. Partially offsetting these increases in
general and administrative expenses were decreases in expenses
relating to (i) a reduction in stock compensation expense of
approximately $0.8 million as a result of a former senior executive
forfeiting his stock options as part of the settled litigation,
(ii) a reduction in rent expense of approximately $0.5 million as a
result of the Company not renewing its lease for office space in
New York City, (iii) an acceleration of stock compensation
expense in fiscal year 2018 of approximately $0.8 million as a
result of two senior executives forfeiting a portion of their stock
options, and (iv) a reduction in payroll costs of approximately
$1.3 million. The reduction in payroll costs was primarily from (i)
a reduction in separation expenses of approximately $0.4 million;
(ii) a reduction in accrual for paid time-off of approximately $0.1
million; and (iii) a reduction in executive compensation expense of
approximately $0.7 million relating to the resignation of a former
senior executive.
Other income, which primarily consists of
interest expense, change in fair value of derivatives and gain or
loss on sale of real estate, property and equipment and assets held
for sale, was $5.0 million for the fiscal year ended September 30,
2019, as compared to other income of $2.7 million for the fiscal
year ended September 30, 2018. The increase in other income was
primarily due to the Company recording a higher gain on sale of
real estate, property and equipment and assets held for sale in
fiscal year 2019, as compared to fiscal year 2018.
During the fourth quarter of fiscal year 2019
and for the year ended September 30, 2019, the Company received
approximately $15.6 million under the Florida Citrus Recovery Block
Grant (“Florida CRBG”) program relating to Hurricane Irma. This
represents the Part 1 and a portion of the Part 2 reimbursement
under a three-part program. Subsequent to fiscal year end 2019, the
Company received additional proceeds of $4.1 million under the
Florida CRBG program. The timing and amount to be received under
the remaining portion of the Part 2 and the Part 3 of the program,
if any, has not yet been finalized.
Dividend
The Company paid a fourth quarter cash dividend
of $0.06 per share on its outstanding common stock on
October 11, 2019 to stockholders of record as of
September 27, 2019. Additionally, the Company has declared a
dividend of $0.09 per share on its outstanding common stock to
stockholders of record as of December 27, 2019 for the first
quarter of fiscal year 2020.
Balance Sheet and Liquidity
The Company continues to demonstrate financial
strength within its balance sheet, as highlighted below:
- The Company’s working capital was
$33.0 million at September 30, 2019, representing a 2.14 to 1.00
ratio.
- The Company continues to improve
upon its debt to equity ratio. At September 30, 2019, 2018
and 2017, the ratios were 0.82 to 1.00, 1.00 to 1.00 and 1.13 to
1.00.
At September 30, 2019, the Company had term
debt, net of cash and cash equivalents and restricted cash, of
$139.6 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; changes in the political environment and agendas; 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 continue to achieve
the planned 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:
Investor Relations(646)
277-1254InvestorRelations@alicoinc.com
Richard RalloSenior Vice President and Chief Financial
Officer(239) 226-2000rrallo@alicoinc.com
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ALICO,
INC.CONSOLIDATED BALANCE SHEETS(in thousands, except share
amounts) |
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September 30, |
|
2019 |
|
2018 |
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ASSETS |
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Current assets: |
|
|
|
Cash and cash equivalents |
$ |
18,630 |
|
|
$ |
25,260 |
|
Accounts receivable, net |
|
713 |
|
|
|
2,544 |
|
Inventories |
|
40,143 |
|
|
|
41,033 |
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Assets held for sale |
|
1,442 |
|
|
|
1,391 |
|
Prepaid expenses and other current assets |
|
1,049 |
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|
|
833 |
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Total current assets |
|
61,977 |
|
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|
71,061 |
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Restricted
cash |
|
5,208 |
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|
|
7,000 |
|
Property and
equipment, net |
|
345,648 |
|
|
|
340,403 |
|
Goodwill |
|
2,246 |
|
|
|
2,246 |
|
Other
non-current assets |
|
2,309 |
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|
|
2,712 |
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Total assets |
$ |
417,388 |
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$ |
423,422 |
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LIABILITIES AND STOCKHOLDERS' EQUITY |
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Current liabilities: |
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Accounts payable |
$ |
4,163 |
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$ |
3,764 |
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Accrued liabilities |
|
7,769 |
|
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|
8,881 |
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Long-term debt, current portion |
|
5,338 |
|
|
|
5,275 |
|
Deferred retirement obligations, current portion |
|
5,226 |
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|
|
345 |
|
Income taxes payable |
|
5,536 |
|
|
|
2,320 |
|
Other current liabilities |
|
919 |
|
|
|
891 |
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|
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Total current liabilities |
|
28,951 |
|
|
|
21,476 |
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Long-term
debt: |
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Principal amount, net of current portion |
|
158,111 |
|
|
|
169,074 |
|
Less: deferred financing costs, net |
|
(1,369 |
) |
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|
(1,563 |
) |
Long-term debt less current portion and deferred financing costs,
net |
|
156,742 |
|
|
|
167,511 |
|
Lines of
credit |
|
— |
|
|
|
2,685 |
|
Deferred
income tax liabilities, net |
|
32,125 |
|
|
|
25,153 |
|
Deferred
gain on sale |
|
— |
|
|
|
24,928 |
|
Deferred
retirement obligations |
|
— |
|
|
|
4,052 |
|
Other
liabilities |
|
172 |
|
|
|
22 |
|
|
|
|
|
|
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Total liabilities |
|
217,990 |
|
|
|
245,827 |
|
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Stockholders' equity: |
|
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Preferred stock, no par value, 1,000,000 shares authorized; none
issued |
|
— |
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|
— |
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Common stock, $1.00 par value, 15,000,000 shares authorized;
8,416,145 shares issued and 7,476,513 and 8,199,957 shares
outstanding at September 30, 2019 and September 30, 2018,
respectively |
|
8,416 |
|
|
|
8,416 |
|
Additional paid in capital |
|
19,781 |
|
|
|
20,126 |
|
Treasury stock, at cost, 939,632 and 216,188 shares held at
September 30, 2019 and September 30, 2018, respectively |
|
(31,943 |
) |
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|
(7,536 |
) |
Retained earnings |
|
198,049 |
|
|
|
151,111 |
|
Total Alico stockholders' equity |
|
194,303 |
|
|
|
172,117 |
|
Noncontrolling interest |
|
5,095 |
|
|
|
5,478 |
|
Total stockholders' equity |
|
199,398 |
|
|
|
177,595 |
|
Total liabilities and stockholders' equity |
$ |
417,388 |
|
|
$ |
423,422 |
|
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ALICO,
INC.CONSOLIDATED STATEMENTS OF OPERATIONS(in thousands, except per
share amounts) |
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Fiscal Year Ended September 30, |
|
2019 |
|
2018 |
|
2017 |
Operating revenues: |
|
|
|
|
|
Alico Citrus |
$ |
119,031 |
|
|
$ |
78,121 |
|
|
$ |
123,441 |
|
Water Resources and Other Operations |
|
3,220 |
|
|
|
3,160 |
|
|
|
6,388 |
|
Total operating revenues |
|
122,251 |
|
|
|
81,281 |
|
|
|
129,829 |
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
Alico Citrus |
|
59,594 |
|
|
|
51,709 |
|
|
|
111,947 |
|
Water Resources and Other Operations |
|
2,297 |
|
|
|
3,979 |
|
|
|
8,952 |
|
Total operating expenses |
|
61,891 |
|
|
|
55,688 |
|
|
|
120,899 |
|
Gross profit |
|
60,360 |
|
|
|
25,593 |
|
|
|
8,930 |
|
General and
administrative expenses |
|
15,146 |
|
|
|
15,058 |
|
|
|
15,024 |
|
|
|
|
|
|
|
Income
(loss) from operations |
|
45,214 |
|
|
|
10,535 |
|
|
|
(6,094 |
) |
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
Investment and interest income (loss), net |
|
49 |
|
|
|
39 |
|
|
|
(148 |
) |
Interest expense |
|
(7,180 |
) |
|
|
(8,561 |
) |
|
|
(9,141 |
) |
Gain on sale of real estate, property and equipment and assets held
for sale |
|
13,166 |
|
|
|
11,041 |
|
|
|
2,181 |
|
Change in fair value of derivatives |
|
(989 |
) |
|
|
— |
|
|
|
— |
|
Other (loss) income, net |
|
(27 |
) |
|
|
136 |
|
|
|
(140 |
) |
Total other income (expense) |
|
5,019 |
|
|
|
2,655 |
|
|
|
(7,248 |
) |
|
|
|
|
|
|
Income (loss) before income taxes |
|
50,233 |
|
|
|
13,190 |
|
|
|
(13,342 |
) |
Income tax
provision (benefit) |
|
12,783 |
|
|
|
390 |
|
|
|
(3,846 |
) |
|
|
|
|
|
|
Net
income (loss) |
|
37,450 |
|
|
|
12,800 |
|
|
|
(9,496 |
) |
Net loss
attributable to noncontrolling interests |
|
383 |
|
|
|
250 |
|
|
|
45 |
|
Net
income (loss) attributable to Alico, Inc. common
stockholders |
$ |
37,833 |
|
|
$ |
13,050 |
|
|
$ |
(9,451 |
) |
|
|
|
|
|
|
Per
share information attributable to Alico, Inc. common
stockholders: |
|
|
|
|
|
Earnings (loss) per common share: |
|
|
|
|
|
Basic |
$ |
5.06 |
|
|
$ |
1.59 |
|
|
$ |
(1.14 |
) |
Diluted |
$ |
5.05 |
|
|
$ |
1.57 |
|
|
$ |
(1.14 |
) |
Weighted-average number of common shares
outstanding: |
|
|
|
|
|
Basic |
|
7,472 |
|
|
|
8,232 |
|
|
|
8,300 |
|
Diluted |
|
7,493 |
|
|
|
8,301 |
|
|
|
8,300 |
|
|
|
|
|
|
|
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, |
|
2019 |
|
2018 |
|
2017 |
|
|
|
|
|
|
Net
cash provided by operating activities: |
|
|
|
|
|
Net income (loss) |
$ |
37,450 |
|
|
$ |
12,800 |
|
|
$ |
(9,496 |
) |
Adjustments to reconcile net income (loss) to net cash provided by
operating activities: |
|
|
|
|
|
Deferred gain on sale of sugarcane land |
|
— |
|
|
|
(967 |
) |
|
|
(538 |
) |
Depreciation, depletion and amortization |
|
13,924 |
|
|
|
13,756 |
|
|
|
15,226 |
|
Loss on breeding herd sales |
|
— |
|
|
|
13 |
|
|
|
337 |
|
Deferred income tax expense (benefit) |
|
3,267 |
|
|
|
(1,955 |
) |
|
|
(3,948 |
) |
Cash surrender value |
|
11 |
|
|
|
(27 |
) |
|
|
(15 |
) |
Deferred retirement benefits |
|
829 |
|
|
|
(41 |
) |
|
|
(102 |
) |
Magnolia Fund undistributed loss (earnings) |
|
— |
|
|
|
(8 |
) |
|
|
202 |
|
Gain on sale of real estate, property and equipment and assets held
for sale |
|
(13,166 |
) |
|
|
(10,281 |
) |
|
|
(1,373 |
) |
Inventory casualty loss |
|
— |
|
|
|
— |
|
|
|
13,489 |
|
Inventory net realizable value adjustment |
|
808 |
|
|
|
1,115 |
|
|
|
1,199 |
|
Loss on disposal of property and equipment |
|
— |
|
|
|
207 |
|
|
|
— |
|
Change in fair value of derivatives |
|
989 |
|
|
|
— |
|
|
|
— |
|
Impairment of long-lived assets |
|
396 |
|
|
|
2,234 |
|
|
|
9,346 |
|
Non-cash interest expense on deferred gain on sugarcane land |
|
— |
|
|
|
1,361 |
|
|
|
1,413 |
|
Insurance proceeds received for damage to property and
equipment |
|
(486 |
) |
|
|
(477 |
) |
|
|
— |
|
Bad debt expense |
|
— |
|
|
|
24 |
|
|
|
312 |
|
Stock-based compensation expense |
|
824 |
|
|
|
2,613 |
|
|
|
1,653 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
Accounts receivable |
|
1,531 |
|
|
|
1,718 |
|
|
|
142 |
|
Inventories |
|
82 |
|
|
|
(6,554 |
) |
|
|
3,724 |
|
Prepaid expenses |
|
(211 |
) |
|
|
177 |
|
|
|
(604 |
) |
Income tax receivable |
|
15 |
|
|
|
(15 |
) |
|
|
1,013 |
|
Other assets |
|
288 |
|
|
|
23 |
|
|
|
(415 |
) |
Accounts payable and accrued liabilities |
|
(1,113 |
) |
|
|
2,987 |
|
|
|
(2,895 |
) |
Income tax payable |
|
3,216 |
|
|
|
2,320 |
|
|
|
— |
|
Other liabilities |
|
178 |
|
|
|
(2,445 |
) |
|
|
(1,189 |
) |
Net cash provided by operating activities |
|
48,832 |
|
|
|
18,578 |
|
|
|
27,481 |
|
|
|
|
|
|
|
Cash
flows from investing activities: |
|
|
|
|
|
Purchases of property and equipment |
|
(20,000 |
) |
|
|
(16,352 |
) |
|
|
(13,353 |
) |
Return on investment in Magnolia Fund |
|
— |
|
|
|
25 |
|
|
|
324 |
|
Net proceeds from sale of property and equipment and assets held
for sale |
|
14,602 |
|
|
|
37,969 |
|
|
|
760 |
|
Net proceeds from sale of real estate |
|
— |
|
|
|
1,811 |
|
|
|
2,184 |
|
Insurance proceeds received for damage to property and
equipment |
|
486 |
|
|
|
477 |
|
|
|
— |
|
Change in deposits on purchase of citrus trees |
|
(108 |
) |
|
|
(431 |
) |
|
|
748 |
|
Advances on notes receivables, net |
|
60 |
|
|
|
(575 |
) |
|
|
— |
|
Net cash (used in) provided by investing activities |
|
(4,960 |
) |
|
|
22,924 |
|
|
|
(9,337 |
) |
|
|
|
|
|
|
Cash
flows from financing activities: |
|
|
|
|
|
Repayments on revolving lines of credit |
|
(89,231 |
) |
|
|
(25,600 |
) |
|
|
(70,770 |
) |
Borrowings on revolving lines of credit |
|
86,546 |
|
|
|
28,285 |
|
|
|
65,770 |
|
Principal payments on term loans |
|
(10,900 |
) |
|
|
(12,127 |
) |
|
|
(10,743 |
) |
Treasury stock purchases |
|
(25,576 |
) |
|
|
(2,215 |
) |
|
|
(3,064 |
) |
Payment on termination of sugarcane agreement |
|
(11,300 |
) |
|
|
— |
|
|
|
— |
|
Dividends paid |
|
(1,833 |
) |
|
|
(1,972 |
) |
|
|
(1,987 |
) |
Capital contribution received from noncontrolling interest |
|
— |
|
|
|
1,000 |
|
|
|
— |
|
Capital lease obligation payments |
|
— |
|
|
|
(8 |
) |
|
|
(580 |
) |
Net cash used in financing activities |
|
(52,294 |
) |
|
|
(12,637 |
) |
|
|
(21,374 |
) |
|
|
|
|
|
|
Net
(decrease) increase in cash and cash equivalents and restricted
cash |
|
(8,422 |
) |
|
|
28,865 |
|
|
|
(3,230 |
) |
Cash and
cash equivalents and restricted cash at beginning of the
period |
|
32,260 |
|
|
|
3,395 |
|
|
|
6,625 |
|
|
|
|
|
|
|
Cash and cash equivalents and restricted cash at end of the
period |
$ |
23,838 |
|
|
$ |
32,260 |
|
|
$ |
3,395 |
|
|
|
|
|
|
|
Supplemental disclosure of cash flow
information: |
|
|
|
|
|
Cash paid for interest, net of amount capitalized |
$ |
6,940 |
|
|
$ |
6,721 |
|
|
$ |
7,240 |
|
Cash paid (refunded) for income taxes |
$ |
6,285 |
|
|
$ |
25 |
|
|
$ |
(911 |
) |
|
|
|
|
|
|
Supplemental disclosure of non-cash investing and financing
activities: |
|
|
|
|
|
Dividend
declared but unpaid |
$ |
449 |
|
|
$ |
492 |
|
|
$ |
494 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Financial Measures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
|
|
|
|
|
|
(in
thousands) |
|
|
|
|
|
|
|
|
Three Months EndedSeptember 30, |
|
Year Ended September 30, |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|
|
|
|
|
|
|
Net income attributable to common stockholders |
$ |
16,509 |
|
|
$ |
718 |
|
|
$ |
37,833 |
|
|
$ |
13,050 |
|
Interest expense |
|
1,555 |
|
|
|
1,879 |
|
|
|
7,180 |
|
|
|
8,561 |
|
Income tax provision (benefit) |
|
5,701 |
|
|
|
(284 |
) |
|
|
12,783 |
|
|
|
390 |
|
Depreciation, depletion and amortization |
|
3,483 |
|
|
|
3,429 |
|
|
|
13,924 |
|
|
|
13,756 |
|
EBITDA |
|
27,248 |
|
|
|
5,742 |
|
|
|
71,720 |
|
|
|
35,757 |
|
Adjustments for non-recurring items: |
|
|
|
|
|
|
|
Inventory net realizable value adjustments |
|
808 |
|
|
|
1,115 |
|
|
|
808 |
|
|
|
1,115 |
|
Impairment of long-lived assets |
|
152 |
|
|
|
379 |
|
|
|
396 |
|
|
|
2,234 |
|
Employee stock compensation expense (1) |
|
94 |
|
|
|
1,039 |
|
|
|
778 |
|
|
|
1,754 |
|
Separation and consulting agreement expense (2) |
|
— |
|
|
|
— |
|
|
|
800 |
|
|
|
188 |
|
Tender offer expenses |
|
— |
|
|
|
493 |
|
|
|
32 |
|
|
|
493 |
|
Professional fees relating to corporate matters |
|
— |
|
|
|
— |
|
|
|
2,283 |
|
|
|
— |
|
Change in fair value of derivatives |
|
— |
|
|
|
— |
|
|
|
989 |
|
|
|
— |
|
Pension plan termination - payout tax gross-up |
|
720 |
|
|
|
— |
|
|
|
720 |
|
|
|
— |
|
Forfeiture of stock options (3) |
|
— |
|
|
|
— |
|
|
|
(823 |
) |
|
|
— |
|
Transaction costs |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
98 |
|
Insurance and federal relief proceeds - Hurricane Irma |
|
(15,597 |
) |
|
|
(5,244 |
) |
|
|
(16,083 |
) |
|
|
(9,429 |
) |
Gains on sale of real estate and property and equipment and assets
held for sale |
|
(13,029 |
) |
|
|
(1,958 |
) |
|
|
(13,166 |
) |
|
|
(11,041 |
) |
|
|
|
|
|
|
|
|
Adjusted
EBITDA |
$ |
396 |
|
|
$ |
1,566 |
|
|
$ |
48,454 |
|
|
$ |
21,169 |
|
|
|
|
|
|
|
|
|
(1) Includes stock
compensation expense for current and former executives. |
(2) Includes
consulting and compensation fees for former CEO. |
(3) Includes
forfeitures of stock options by former CEO, resulting in the
reversal of previously recorded stock compensation expense. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
Earnings (Loss) Per Diluted Common Share |
(in thousands) |
|
Three Months EndedSeptember 30, |
|
Year Ended September 30, |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|
|
|
|
|
|
|
Net income
attributable to common stockholders |
$ |
16,509 |
|
|
$ |
718 |
|
|
$ |
37,833 |
|
|
$ |
13,050 |
|
Adjustments for non-recurring items: |
|
|
|
|
|
|
|
Inventory net realizable value adjustments |
|
808 |
|
|
|
1,115 |
|
|
|
808 |
|
|
|
1,115 |
|
Impairment of long-lived assets |
|
152 |
|
|
|
379 |
|
|
|
396 |
|
|
|
2,234 |
|
One-time deferred tax adjustment due to new tax legislation |
|
— |
|
|
|
124 |
|
|
|
— |
|
|
|
(9,847 |
) |
Valuation allowance on capital loss carryforward |
|
— |
|
|
|
(426 |
) |
|
|
— |
|
|
|
5,634 |
|
Transaction costs |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
98 |
|
Employee stock compensation expense (1) |
|
94 |
|
|
|
1,039 |
|
|
|
778 |
|
|
|
1,754 |
|
Separation and consulting agreement expense (2) |
|
— |
|
|
|
— |
|
|
|
800 |
|
|
|
188 |
|
Tender offer expenses |
|
— |
|
|
|
493 |
|
|
|
32 |
|
|
|
493 |
|
Professional fees relating to corporate matters |
|
— |
|
|
|
— |
|
|
|
2,283 |
|
|
|
— |
|
Change in fair value of derivatives |
|
— |
|
|
|
— |
|
|
|
989 |
|
|
|
— |
|
Pension plan termination - payout tax gross-up |
|
720 |
|
|
|
— |
|
|
|
720 |
|
|
|
— |
|
Forfeiture of stock options (3) |
|
— |
|
|
|
— |
|
|
|
(823 |
) |
|
|
— |
|
Insurance and federal relief proceeds - Hurricane Irma |
|
(15,597 |
) |
|
|
(5,244 |
) |
|
|
(16,083 |
) |
|
|
(9,429 |
) |
Gains on sale of real estate and property and equipment and assets
held for sale |
|
(13,029 |
) |
|
|
(1,958 |
) |
|
|
(13,166 |
) |
|
|
(11,041 |
) |
Tax impact |
|
7,306 |
|
|
|
1,199 |
|
|
|
6,839 |
|
|
|
4,187 |
|
|
|
|
|
|
|
|
|
Adjusted net
income (loss) attributable to common stockholders |
$ |
(3,037 |
) |
|
$ |
(2,561 |
) |
|
$ |
21,406 |
|
|
$ |
(1,564 |
) |
|
|
|
|
|
|
|
|
Diluted
common shares |
|
7,487 |
|
|
|
8,260 |
|
|
|
7,493 |
|
|
|
8,301 |
|
|
|
|
|
|
|
|
|
Adjusted
earnings (loss) per diluted common share |
$ |
(0.41 |
) |
|
$ |
(0.31 |
) |
|
$ |
2.86 |
|
|
$ |
(0.19 |
) |
|
|
|
|
|
|
|
|
(1) Includes stock
compensation expense for current and former executives. |
(2) Includes
consulting and compensation fees for former CEO. |
(3) Includes
forfeitures of stock options by former CEO, resulting in the
reversal of previously recorded stock compensation expense. |
|
|
|
|
|
Alico utilizes the non-GAAP measures EBITDA,
Adjusted EBITDA and Adjusted Earnings (Loss) 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 (Loss) 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
(Loss) per Diluted Common Share is defined as net income (loss)
adjusted for non-recurring transactions divided by diluted common
shares.
Return on Assets, Return on Invested
Capital, Return on Capital Employed and Return on
Equity
Alico management may refer to Return on Assets
(“ROA”), Return on Invested Capital (“ROIC”), Return on Capital
Employed (“ROCE”) and Return on Equity (“ROE”) when communicating
with analysts, investors and shareholders. These ratios are
computed as follows:
ROA - equals net income attributable to Alico
common stockholders divided by the average of total assets at the
beginning and end of the reporting period.ROIC - equals net income
attributable to Alico common stockholders less dividends divided by
gross debt plus Alico stockholders’ equity.ROCE - equals income
from operations divided by gross debt plus Alico stockholders’
equity.ROE - equals net income attributable to Alico common
stockholders divided by the average of total Alico stockholders’
equity at the beginning and end of the reporting period.
This method of determining these metrics may
differ from other companies' methods and therefore may not be
comparable to those used by other companies.
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