Alico, Inc. (“Alico” or the “Company”) (Nasdaq: ALCO) today
announces financial results for the second quarter of fiscal year
2020 and the six months ended March 31, 2020, the highlights which
are as follows:
- The coronavirus outbreak (“COVID-19”) has had minimal
impact on the Company’s harvest and business
operations.
- Company paid a second quarter cash dividend and has no
plans to reduce payout for the foreseeable future.
- Demand for Not-From-Concentrate (“NFC”) orange juice
surges - consumption increases 49.7% in trailing four-week period
ended April 11, 2020 as compared to same period in prior
year. (*)
- Company has strengthened its liquidity by drawing down
on its lines of credit to retain cash on its balance
sheet during these uncertain
times.
Results of Operations
For the six months ended March 31, 2020,
the Company earned net income attributable to Alico common
stockholders of approximately $4.4 million and earnings of $0.58
per diluted common share, compared to net income attributable to
Alico common stockholders of approximately $5.1 million and
earnings of $0.68 per diluted common share in the prior year. 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 season due to unfavorable industry supply
dynamics and an increase in cost of goods sold specifically
relating to the timing of the harvest. Partially offsetting this
decrease was (i) an increase in Valencia boxes harvested relating
to the timing of the harvest, (ii) funds awarded through the
federal disaster relief program, (iii) a reduction in certain
general and administrative costs and (iv) a gain on the sale of
certain parcels on the east side of Alico Ranch.
When both periods are adjusted for certain
non-recurring items, the Company had adjusted net income of $0.01
per diluted common share for the six months ended March 31, 2020,
compared to adjusted income of $1.12 per diluted common share for
the six months ended March 31, 2019. Adjusted EBITDA for the six
months ended March 31, 2020 and 2019 was $10.3 million and $21.3
million, respectively.
These 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 March 31, |
|
Six Months Ended March 31, |
|
2020 |
|
2019 |
|
Change |
|
2020 |
|
2019 |
|
Change |
Net income attributable to Alico, Inc. common
stockholders |
$ |
3,571 |
|
|
$ |
7,547 |
|
|
$ |
(3,976 |
) |
|
(52.7 |
)% |
|
$ |
4,362 |
|
|
$ |
5,080 |
|
|
$ |
(718 |
) |
|
(14.1 |
)% |
EBITDA (1) |
$ |
10,109 |
|
|
$ |
15,231 |
|
|
$ |
(5,122 |
) |
|
(33.6 |
)% |
|
$ |
16,414 |
|
|
$ |
17,510 |
|
|
$ |
(1,096 |
) |
|
(6.3 |
)% |
Adjusted EBITDA (1) |
$ |
8,070 |
|
|
$ |
17,278 |
|
|
$ |
(9,208 |
) |
|
(53.3 |
)% |
|
$ |
10,271 |
|
|
$ |
21,338 |
|
|
$ |
(11,067 |
) |
|
(51.9 |
)% |
Earnings per diluted common
share |
$ |
0.48 |
|
|
$ |
1.01 |
|
|
$ |
(0.53 |
) |
|
(52.5 |
)% |
|
$ |
0.58 |
|
|
$ |
0.68 |
|
|
$ |
(0.10 |
) |
|
(14.7 |
)% |
Net
cash provided by operating activities |
$ |
17,731 |
|
|
$ |
18,069 |
|
|
$ |
(338 |
) |
|
(1.9 |
)% |
|
$ |
11,688 |
|
|
$ |
6,068 |
|
|
$ |
5,620 |
|
|
92.6 |
% |
(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 six
months ended March 31, 2020 and 2019 is summarized
in the following table.
(in thousands,
except per box and per pound solids data) |
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Three Months Ended |
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Six Months Ended |
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|
|
March 31, |
|
Change |
|
March 31, |
|
Change |
|
2020 |
|
2019 |
|
Unit |
|
% |
|
2020 |
|
2019 |
|
Unit |
|
% |
Boxes
Harvested: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Early and Mid-Season |
2,266 |
|
|
2,120 |
|
|
146 |
|
|
6.9 |
% |
|
3,146 |
|
|
3,114 |
|
|
32 |
|
|
1.0 |
% |
Valencias |
2,260 |
|
|
1,298 |
|
|
962 |
|
|
74.1 |
% |
|
2,260 |
|
|
1,298 |
|
|
962 |
|
|
74.1 |
% |
Total Processed |
4,526 |
|
|
3,418 |
|
|
1,108 |
|
|
32.4 |
% |
|
5,406 |
|
|
4,412 |
|
|
994 |
|
|
22.5 |
% |
Fresh Fruit |
108 |
|
|
33 |
|
|
75 |
|
|
NM |
|
203 |
|
|
136 |
|
|
67 |
|
|
49.3 |
% |
Total |
4,634 |
|
|
3,451 |
|
|
1,183 |
|
|
34.3 |
% |
|
5,609 |
|
|
4,548 |
|
|
1,061 |
|
|
23.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pound Solids
Produced: |
|
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|
|
|
|
|
|
|
|
|
|
|
|
Early and Mid-Season |
13,091 |
|
|
11,735 |
|
|
1,356 |
|
|
11.6 |
% |
|
17,947 |
|
|
16,873 |
|
|
1,074 |
|
|
6.4 |
% |
Valencias |
13,661 |
|
|
7,831 |
|
|
5,830 |
|
|
74.4 |
% |
|
13,661 |
|
|
7,831 |
|
|
5,830 |
|
|
74.4 |
% |
Total |
26,752 |
|
|
19,566 |
|
|
7,186 |
|
|
36.7 |
% |
|
31,608 |
|
|
24,704 |
|
|
6,904 |
|
|
27.9 |
% |
|
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|
Average Pound Solids
per Box: |
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|
|
|
|
Early and Mid-Season |
5.78 |
|
|
5.54 |
|
|
0.24 |
|
|
4.3 |
% |
|
5.70 |
|
|
5.42 |
|
|
0.28 |
|
|
5.2 |
% |
Valencias |
6.04 |
|
|
6.04 |
|
|
— |
|
|
— |
% |
|
6.04 |
|
|
6.04 |
|
|
— |
|
|
— |
% |
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|
Price per Pound
Solids: |
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|
|
|
|
|
Early and Mid-Season |
$ |
1.70 |
|
|
$ |
2.38 |
|
|
$ |
(0.68 |
) |
|
(28.6 |
)% |
|
$ |
1.74 |
|
|
$ |
2.35 |
|
|
$ |
(0.61 |
) |
|
(26.0 |
)% |
Valencias |
$ |
1.89 |
|
|
$ |
2.39 |
|
|
$ |
(0.50 |
) |
|
(20.9 |
)% |
|
$ |
1.89 |
|
|
$ |
2.39 |
|
|
$ |
(0.50 |
) |
|
(20.9 |
)% |
NM - Not meaningful
For the six months ended March 31, 2020, Alico
Citrus harvested approximately 5.61 million boxes of fruit, an
increase of 23.3% from the same period of the prior fiscal year.
The increase was principally related to the harvest for the
Valencia fruit commencing earlier in the current fiscal year
compared to the prior fiscal year. The Company has seen a reduction
in its average realized/blended price per pound solid fall from
$2.36 in the prior fiscal year to $1.81 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
in the current harvest season. Also impacting the price
reduction was the continued inflow of imported fruit.
The Company expects to complete its current year
harvest season by mid-May 2020. To date, the Company’s
harvesting activities have not been impacted by the coronavirus
pandemic, and there has been no disruption in delivering fruit to
the processors, all of whom indicated they have been rigorous in
their safety protocols. Alico is encouraged by a measurable
increase in not-from-concentrate orange juice consumption by retail
consumers during the past quarter which is reducing inventory
levels at the Florida citrus processors, and which is expected to
improve market pricing in the next harvest season.
Water Resources and Other
Operations Division Results
Operating results for the Water Resources
and Other Operations Division for the six months ended March
31, 2020 improved by approximately $0.4 million compared to the six
months ended March 31, 2019. This was primarily due to lower
expenses related to the dispersed water project, as well as a
reduction in land consulting expenses.
Management Comment
John Kiernan, President and Chief Executive
Officer, commented, “The coronavirus has had an impact on all of us
personally, but so far there has been no disruption to our
business. We have been able to prioritize the health and
safety of our employees by instituting applicable health guidelines
without impacting our day-to-day activities. Alico is fortunate to
have individual grove managers who have been managing our
operations for between 15 and 45 years enabling us to navigate
through these challenging times seamlessly. We believe our grove
managers are some of the best in the industry.
“Alico did not seek any federal relief under the CARES Act.
However, because we cannot predict the impact of COVID-19 going
forward we decided to draw down on our lines of credit and
strengthen our liquidity during these uncertain times by placing
enough cash on our balance sheet to meet operating expenses for
more than a full year.
“As expected in fiscal year 2020, Alico will realize lower
profits and lower rates of return this year as a result of lower
market prices for citrus fruit. However, we are encouraged by the
recent increase in demand among retail consumers for NFC orange
juice, which, when combined with the impact of lower levels of
imported juice, potentially will improve market pricing next season
as processor inventory supplies decrease.”
Mr. Kiernan continued, “For the first time since
2015, excluding our purchases of small citrus groves within its
existing grove, Alico has purchased a new citrus grove. Although
only 334 acres in size, this well-managed grove in Polk County is
adjacent to another Alico citrus grove, and we anticipate will
allow us to realize operating economies of scale. This transaction
was done in coordination with the sale of a small portion of the
east side of Alico Ranch, which allowed us to defer taxes on the
gain associated with this sale.
“The Alico Board remains confident about our business model and
prospects in the citrus industry and is committed to continue
uninterrupted quarterly dividend payments as we have done for the
past five decades.”
Other Corporate Financial
Information
General and administrative expenses for the six
months ended March 31, 2020 totaled approximately $5.7
million, compared to approximately $8.1 million for the six months
ended March 31, 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 six
months ended March 31, 2019, (ii) a reduction in consulting and
separation fees of $0.8 million incurred in the six months ended
March 31, 2019 relating to a settlement agreement with a former
senior executive and (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. 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 six months ended
March 31, 2019, as a result of a former senior executive forfeiting
his stock options as part of a settled litigation.
Other expense, net, for the six months ended
March 31, 2020 and 2019 was approximately $0.2 million and
approximately $4.8 million, respectively. The decrease in the other
expense, net is primarily due to (i) the Company recording a gain
on sale of real estate, property and equipment and assets held for
sale of approximately $2.9 million during the six months ended
March 31, 2020 while in the same period in the prior year no
significant gain on sale of assets was recorded, (ii) the Company
recording less interest expense by approximately $0.9 million as a
result of borrowing on average fewer funds under its line of credit
in the six months ended March 31, 2020, as compared to the six
months ended March 31, 2019, along with the reduction of its
long-term debt attributable to making its mandatory principal
payments and (iii) during the six months ended March 31, 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 six months ended March 31, 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 $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.
Dividend
On April 10, 2020, the Company paid a second quarter cash
dividend of $0.09 per share on its outstanding common stock to
stockholders of record as of March 27, 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 the $66.7 million
drawn on its lines of credit which is in cash, was approximately
$25.8 million at March 31, 2020, representing a 2.09 to 1.00
ratio.
- The Company continues to improve upon its debt to equity
ratio. At March 31, 2020, September 30, 2019 and September
30, 2018, the ratios, excluding the $66.7 million drawn on is line
of credit which is in cash, were 0.76 to 1.00, 0.82 to 1.00 and
1.00 to 1.00, respectively.
At March 31, 2020, the Company had term debt,
including lines of credit, net of cash and cash equivalents and
restricted cash, of $136.3 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.
_____________________________* - Source:
Nielsen_____________________________
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; the Company's
receipt of future funding from the state of Florida in connection
with water retention projects; impact of the coronavirus pandemic
on our agriculture operations, including without limitation demand
for product, supply chain, health and availability of our labor
force and the labor force of our competitors and access to
governmental loans and incentives; any reduction in the public
float resulting from repurchases of common stock by the Company;
changes in equity awards to employees; any increase in 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; risks
related to the duration and severity of the COVID-19 outbreak and
its impact on the Company’s business; the impact of the COVID-19
outbreak on the U.S. and global economies and financial market;
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 on concentration of sales to one customer; 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.
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) |
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|
|
March 31, |
|
September 30, |
|
2020 |
|
2019 |
|
(Unaudited) |
|
|
ASSETS |
|
|
|
Current
assets: |
|
|
|
Cash and cash equivalents |
$ |
80,407 |
|
|
$ |
18,630 |
|
Accounts receivable, net |
4,385 |
|
|
713 |
|
Inventories |
28,503 |
|
|
40,143 |
|
Assets held for sale |
1,366 |
|
|
1,442 |
|
Prepaid expenses and other current assets |
1,521 |
|
|
1,049 |
|
Total current assets |
116,182 |
|
|
61,977 |
|
|
|
|
|
Restricted cash |
3,671 |
|
|
5,208 |
|
Property and equipment,
net |
347,816 |
|
|
345,648 |
|
Goodwill |
2,246 |
|
|
2,246 |
|
Other non-current assets |
2,369 |
|
|
2,309 |
|
Total assets |
$ |
472,284 |
|
|
$ |
417,388 |
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
Current
liabilities: |
|
|
|
Accounts payable |
$ |
5,154 |
|
|
$ |
4,163 |
|
Accrued liabilities |
4,943 |
|
|
7,769 |
|
Long-term debt, current portion |
5,130 |
|
|
5,338 |
|
Deferred retirement obligations |
5,226 |
|
|
5,226 |
|
Income taxes payable |
2,660 |
|
|
5,536 |
|
Other current liabilities |
554 |
|
|
919 |
|
Total current liabilities |
23,667 |
|
|
28,951 |
|
|
|
|
|
Long-term debt: |
|
|
|
Principal amount, net of current portion |
148,499 |
|
|
158,111 |
|
Less: deferred financing costs, net |
(1,240 |
) |
|
(1,369 |
) |
Long-term debt less current portion and deferred financing costs,
net |
147,259 |
|
|
156,742 |
|
Lines of credit |
66,714 |
|
|
— |
|
Deferred income tax
liabilities, net |
31,298 |
|
|
32,125 |
|
Other liabilities |
278 |
|
|
172 |
|
Total liabilities |
269,216 |
|
|
217,990 |
|
|
|
|
|
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 7,479,671 and 7,476,513 shares
outstanding at March 31, 2020 and September 30, 2019,
respectively |
8,416 |
|
|
8,416 |
|
Additional paid in capital |
20,174 |
|
|
19,781 |
|
Treasury stock, at cost, 936,474 and 939,632 shares held at March
31, 2020 and September 30, 2019, respectively |
(31,784 |
) |
|
(31,943 |
) |
Retained earnings |
201,065 |
|
|
198,049 |
|
Total Alico stockholders' equity |
197,871 |
|
|
194,303 |
|
Noncontrolling interest |
5,197 |
|
|
5,095 |
|
Total stockholders' equity |
203,068 |
|
|
199,398 |
|
Total liabilities and stockholders' equity |
$ |
472,284 |
|
|
$ |
417,388 |
|
|
|
ALICO, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (in
thousands, except per share amounts) |
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|
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|
|
Three Months Ended March 31, |
|
Six Months Ended March 31, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Operating
revenues: |
|
|
|
|
|
|
|
Alico Citrus |
$ |
49,801 |
|
|
$ |
47,823 |
|
|
$ |
59,976 |
|
|
$ |
61,720 |
|
Water Resources and Other Operations |
714 |
|
|
698 |
|
|
1,544 |
|
|
1,580 |
|
Total operating revenues |
50,515 |
|
|
48,521 |
|
|
61,520 |
|
|
63,300 |
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
Alico Citrus |
43,518 |
|
|
31,582 |
|
|
48,358 |
|
|
42,456 |
|
Water Resources and Other Operations |
380 |
|
|
625 |
|
|
931 |
|
|
1,348 |
|
Total operating expenses |
43,898 |
|
|
32,207 |
|
|
49,289 |
|
|
43,804 |
|
Gross
profit |
6,617 |
|
|
16,314 |
|
|
12,231 |
|
|
19,496 |
|
General and administrative
expenses |
2,953 |
|
|
4,654 |
|
|
5,713 |
|
|
8,104 |
|
|
|
|
|
|
|
|
|
Income from operations |
3,664 |
|
|
11,660 |
|
|
6,518 |
|
|
11,392 |
|
|
|
|
|
|
|
|
|
Other income
(expense), net: |
|
|
|
|
|
|
|
Interest expense |
(1,452 |
) |
|
(1,963 |
) |
|
(2,996 |
) |
|
(3,880 |
) |
Gain on sale of real estate, property and equipment and assets held
for sale |
2,838 |
|
|
1 |
|
|
2,863 |
|
|
23 |
|
Change in fair value of derivatives |
— |
|
|
(33 |
) |
|
— |
|
|
(989 |
) |
Other income (expense) |
12 |
|
|
23 |
|
|
(64 |
) |
|
10 |
|
Total other income (expense), net |
1,398 |
|
|
(1,972 |
) |
|
(197 |
) |
|
(4,836 |
) |
|
|
|
|
|
|
|
|
Income before income
taxes |
5,062 |
|
|
9,688 |
|
|
6,321 |
|
|
6,556 |
|
Income tax provision |
1,496 |
|
|
2,228 |
|
|
1,857 |
|
|
1,599 |
|
|
|
|
|
|
|
|
|
Net
income |
3,566 |
|
|
7,460 |
|
|
4,464 |
|
|
4,957 |
|
Net loss (income) attributable
to noncontrolling interests |
5 |
|
|
87 |
|
|
(102 |
) |
|
123 |
|
Net income
attributable to Alico, Inc. common stockholders |
$ |
3,571 |
|
|
$ |
7,547 |
|
|
$ |
4,362 |
|
|
$ |
5,080 |
|
|
|
|
|
|
|
|
|
Per share information
attributable to Alico, Inc. common stockholders: |
|
|
|
|
|
|
|
Earnings per common
share: |
|
|
|
|
|
|
|
Basic |
$ |
0.48 |
|
|
$ |
1.01 |
|
|
$ |
0.58 |
|
|
$ |
0.68 |
|
Diluted |
$ |
0.48 |
|
|
$ |
1.01 |
|
|
$ |
0.58 |
|
|
$ |
0.68 |
|
Weighted-average
number of common shares outstanding: |
|
|
|
|
|
|
|
Basic |
7,480 |
|
|
7,463 |
|
|
7,478 |
|
|
7,471 |
|
Diluted |
7,496 |
|
|
7,469 |
|
|
7,494 |
|
|
7,506 |
|
|
|
|
|
|
|
|
|
Cash dividends
declared per common share |
$ |
0.09 |
|
|
$ |
0.06 |
|
|
$ |
0.18 |
|
|
$ |
0.12 |
|
|
|
ALICO, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS (UNAUDITED) (in thousands) |
|
|
|
|
|
Six Months Ended March 31, |
|
2020 |
|
2019 |
Net cash provided by
operating activities: |
|
|
|
Net income |
$ |
4,464 |
|
|
$ |
4,957 |
|
|
|
|
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
Depreciation, depletion and amortization |
7,199 |
|
|
6,951 |
|
Deferred income tax (benefit) expense |
(827 |
) |
|
73 |
|
Gain on sale of real estate, property and equipment and assets held
for sale |
(2,863 |
) |
|
(23 |
) |
Change in fair value of derivatives |
— |
|
|
989 |
|
Impairment of long-lived assets |
723 |
|
|
— |
|
Impairment of right-of-use asset |
87 |
|
|
— |
|
Stock-based compensation expense |
790 |
|
|
223 |
|
Other |
(36 |
) |
|
(51 |
) |
Changes in operating assets and liabilities: |
|
|
|
Accounts receivable |
(3,672 |
) |
|
(11,453 |
) |
Inventories |
11,640 |
|
|
4,922 |
|
Prepaid expenses |
(234 |
) |
|
92 |
|
Other assets |
(387 |
) |
|
— |
|
Accounts payable and accrued liabilities |
(2,061 |
) |
|
370 |
|
Income tax payable |
(2,876 |
) |
|
(852 |
) |
Other liabilities |
(259 |
) |
|
(130 |
) |
Net cash provided by operating activities |
11,688 |
|
|
6,068 |
|
|
|
|
|
Cash flows from
investing activities: |
|
|
|
Purchases of property and equipment |
(9,960 |
) |
|
(9,524 |
) |
Net proceeds from sale of property and equipment and assets held
for sale |
2,994 |
|
|
202 |
|
Change in deposits on purchase of citrus trees |
(57 |
) |
|
(515 |
) |
Deposit on purchase of citrus grove |
(25 |
) |
|
— |
|
Advances on notes receivables, net |
87 |
|
|
50 |
|
Net cash used in investing activities |
(6,961 |
) |
|
(9,787 |
) |
|
|
|
|
Cash flows from
financing activities: |
|
|
|
Repayments on revolving lines of credit |
(18,805 |
) |
|
(41,360 |
) |
Borrowings on revolving lines of credit |
85,519 |
|
|
63,637 |
|
Principal payments on term loans |
(9,820 |
) |
|
(5,437 |
) |
Treasury stock purchases |
(238 |
) |
|
(25,576 |
) |
Payment on termination of sugarcane agreement |
— |
|
|
(11,300 |
) |
Dividends paid |
(1,120 |
) |
|
(895 |
) |
Deferred financing costs |
(23 |
) |
|
— |
|
Net cash provided by (used in) financing activities |
55,513 |
|
|
(20,931 |
) |
|
|
|
|
Net increase
(decrease) in cash and cash equivalents and restricted
cash |
60,240 |
|
|
(24,650 |
) |
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 |
$ |
84,078 |
|
|
$ |
7,610 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Financial
Measures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA |
|
|
|
|
|
|
|
(in thousands) |
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
Six Months Ended March 31, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
|
|
|
|
|
|
|
Net income attributable to common stockholders |
$ |
3,571 |
|
|
$ |
7,547 |
|
|
$ |
4,362 |
|
|
$ |
5,080 |
|
Interest expense |
1,452 |
|
|
1,963 |
|
|
2,996 |
|
|
3,880 |
|
Income tax provision |
1,496 |
|
|
2,228 |
|
|
1,857 |
|
|
1,599 |
|
Depreciation, depletion and amortization |
3,590 |
|
|
3,493 |
|
|
7,199 |
|
|
6,951 |
|
EBITDA |
10,109 |
|
|
15,231 |
|
|
16,414 |
|
|
17,510 |
|
Adjustments for non-recurring items: |
|
|
|
|
|
|
|
Impairment of right-of-use asset |
— |
|
|
— |
|
|
87 |
|
|
— |
|
Impairment of long-lived assets |
635 |
|
|
— |
|
|
723 |
|
|
— |
|
Employee stock compensation expense (1) |
327 |
|
|
255 |
|
|
435 |
|
|
570 |
|
Separation agreement expense (2) |
— |
|
|
800 |
|
|
104 |
|
|
800 |
|
Tender offer expenses |
— |
|
|
— |
|
|
— |
|
|
32 |
|
Professional fees relating to corporate matters |
— |
|
|
1,783 |
|
|
— |
|
|
2,283 |
|
Change in fair value of derivatives |
— |
|
|
33 |
|
|
— |
|
|
989 |
|
Forfeiture of stock options (3) |
— |
|
|
(823 |
) |
|
— |
|
|
(823 |
) |
Federal relief proceeds - Hurricane Irma |
(163 |
) |
|
— |
|
|
(4,629 |
) |
|
— |
|
Gains on sale of real estate and property and equipment and assets
held for sale |
(2,838 |
) |
|
(1 |
) |
|
(2,863 |
) |
|
(23 |
) |
|
|
|
|
|
|
|
|
Adjusted EBITDA |
$ |
8,070 |
|
|
$ |
17,278 |
|
|
$ |
10,271 |
|
|
$ |
21,338 |
|
|
|
|
|
|
|
|
|
(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 March 31, |
|
Six Months Ended March 31, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
|
|
|
|
|
|
|
Net income attributable to common stockholders |
$ |
3,571 |
|
|
$ |
7,547 |
|
|
$ |
4,362 |
|
|
$ |
5,080 |
|
Adjustments for non-recurring items: |
|
|
|
|
|
|
|
Impairment of right-of-use asset |
— |
|
|
— |
|
|
87 |
|
|
— |
|
Impairment of long-lived assets |
635 |
|
|
— |
|
|
723 |
|
|
— |
|
Employee stock compensation expense (1) |
327 |
|
|
255 |
|
|
435 |
|
|
570 |
|
Separation agreement expense (2) |
— |
|
|
800 |
|
|
104 |
|
|
800 |
|
Tender offer expenses |
— |
|
|
— |
|
|
— |
|
|
32 |
|
Professional fees relating to corporate matters |
— |
|
|
1,783 |
|
|
— |
|
|
2,283 |
|
Change in fair value of derivatives |
— |
|
|
33 |
|
|
— |
|
|
989 |
|
Forfeiture of stock options (3) |
— |
|
|
(823 |
) |
|
— |
|
|
(823 |
) |
Federal relief proceeds - Hurricane Irma |
(163 |
) |
|
— |
|
|
(4,629 |
) |
|
— |
|
Gains on sale of real estate and property and equipment and assets
held for sale |
(2,838 |
) |
|
(1 |
) |
|
(2,863 |
) |
|
(23 |
) |
Tax impact |
630 |
|
|
(322 |
) |
|
1,832 |
|
|
(532 |
) |
|
|
|
|
|
|
|
|
Adjusted net income
attributable to common stockholders |
$ |
2,162 |
|
|
$ |
9,272 |
|
|
$ |
51 |
|
|
$ |
8,376 |
|
|
|
|
|
|
|
|
|
Diluted common shares |
7,496 |
|
|
7,469 |
|
|
7,494 |
|
|
7,506 |
|
|
|
|
|
|
|
|
|
Adjusted net income per
diluted common share |
$ |
0.29 |
|
|
$ |
1.24 |
|
|
$ |
0.01 |
|
|
$ |
1.12 |
|
|
|
|
|
|
|
|
|
(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.
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