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þ
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Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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|
|
For the Quarterly Period Ended June 30, 2018
|
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or
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¨
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Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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||
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For the transition period
|
||
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from____________________
|
to_________________________
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Alico, Inc.
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(
Exact name of registrant as specified in its charter
)
|
Florida
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|
59-0906081
|
(
State or other jurisdiction of
incorporation or organization
)
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|
(
I.R.S. Employer Identification No.
)
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|
|
|
10070 Daniels Interstate Court,
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|
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Suite 100, Fort Myers, FL
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|
33913
|
(Address of principal executive offices)
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(Zip Code)
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239-226-2000
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(Registrant’s telephone number, including area code
)
|
Large accelerated filer
|
¨
|
Accelerated filer
|
þ
|
Non-accelerated filer
|
¨
|
Smaller Reporting Company
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¨
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Emerging Growth Company
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¨
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Page
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ALICO, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share amounts) |
||||||||
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|
|||||
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June 30,
|
|
September 30,
|
|||||
|
2018
|
|
2017
|
|||||
|
(Unaudited)
|
|
|
|||||
ASSETS
|
|
|
|
|||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
$
|
26,553
|
|
|
$
|
3,395
|
|
|
Accounts receivable, net
|
8,796
|
|
|
4,286
|
|
|||
Inventories
|
29,726
|
|
|
36,204
|
|
|||
Assets held for sale
|
10,295
|
|
|
20,983
|
|
|||
Prepaid expenses and other current assets
|
2,558
|
|
|
1,621
|
|
|||
Total current assets
|
77,928
|
|
|
66,489
|
|
|||
|
|
|
|
|||||
Property and equipment, net
|
337,235
|
|
|
349,337
|
|
|||
Goodwill
|
2,246
|
|
|
2,246
|
|
|||
Deferred financing costs, net of accumulated amortization
|
198
|
|
|
262
|
|
|||
Other non-current assets
|
1,009
|
|
|
848
|
|
|||
Total assets
|
$
|
418,616
|
|
|
$
|
419,182
|
|
|
|
|
|
|
|||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|||||
Current liabilities:
|
|
|
|
|
||||
Accounts payable
|
$
|
3,061
|
|
|
$
|
3,192
|
|
|
Accrued liabilities
|
6,348
|
|
|
6,781
|
|
|||
Long-term debt, current portion
|
5,250
|
|
|
4,550
|
|
|||
Other current liabilities
|
856
|
|
|
1,460
|
|
|||
Total current liabilities
|
15,515
|
|
|
15,983
|
|
|||
|
|
|
|
|||||
Long-term debt:
|
|
|
|
|||||
Principal amount, net of current portion
|
171,805
|
|
|
181,926
|
|
|||
Less: deferred financing costs, net
|
(1,613
|
)
|
|
(1,767
|
)
|
|||
Long-term debt less current portion and deferred financing costs, net
|
170,192
|
|
|
180,159
|
|
|||
Deferred income tax liabilities
|
27,757
|
|
|
27,108
|
|
|||
Deferred gain on sale
|
24,788
|
|
|
26,440
|
|
|||
Deferred retirement obligations
|
4,053
|
|
|
4,123
|
|
|||
Total liabilities
|
242,305
|
|
|
253,813
|
|
|||
Commitments and Contingencies (Note 11)
|
|
|
|
|
|
|||
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 8,192,398 and 8,238,830 shares outstanding at June 30, 2018 and September 30, 2017, respectively
|
8,416
|
|
|
8,416
|
|
|||
Additional paid in capital
|
19,168
|
|
|
18,694
|
|
|||
Treasury stock, at cost, 223,747 and 177,315 shares held at June 30, 2018 and September 30, 2017, respectively
|
(7,854
|
)
|
|
(6,502
|
)
|
|||
Retained earnings
|
150,885
|
|
|
140,033
|
|
|||
Total Alico stockholders' equity
|
170,615
|
|
|
160,641
|
|
|||
Noncontrolling interest
|
5,696
|
|
|
4,728
|
|
|||
Total stockholders' equity
|
176,311
|
|
|
165,369
|
|
|||
Total liabilities and stockholders' equity
|
$
|
418,616
|
|
|
$
|
419,182
|
|
ALICO, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (in thousands, except per share amounts) |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
|
Three Months Ended June 30,
|
|
Nine Months Ended June 30,
|
|||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|||||||||
Operating revenues:
|
|
|
|
|
|
|
|
|||||||||
Alico Citrus
|
$
|
25,711
|
|
|
$
|
49,993
|
|
|
$
|
77,499
|
|
|
$
|
122,537
|
|
|
Conservation and Environmental Resources
|
544
|
|
|
1,151
|
|
|
1,400
|
|
|
1,789
|
|
|||||
Other Operations
|
262
|
|
|
374
|
|
|
751
|
|
|
837
|
|
|||||
Total operating revenues
|
26,517
|
|
|
51,518
|
|
|
79,650
|
|
|
125,163
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|||||||
Alico Citrus
|
13,697
|
|
|
35,059
|
|
|
56,102
|
|
|
90,067
|
|
|||||
Conservation and Environmental Resources
|
864
|
|
|
1,451
|
|
|
3,054
|
|
|
2,726
|
|
|||||
Other Operations
|
42
|
|
|
—
|
|
|
165
|
|
|
93
|
|
|||||
Total operating expenses
|
14,603
|
|
|
36,510
|
|
|
59,321
|
|
|
92,886
|
|
|||||
Gross profit
|
11,914
|
|
|
15,008
|
|
|
20,329
|
|
|
32,277
|
|
|||||
General and administrative expenses
|
2,955
|
|
|
3,709
|
|
|
9,914
|
|
|
10,896
|
|
|||||
Income from operations
|
8,959
|
|
|
11,299
|
|
|
10,415
|
|
|
21,381
|
|
|||||
Other (expense) income:
|
|
|
|
|
|
|
|
|
|
|||||||
Interest expense
|
(2,188
|
)
|
|
(2,223
|
)
|
|
(6,682
|
)
|
|
(6,924
|
)
|
|||||
Gain on sale of real estate, property and equipment and assets held for sale
|
7,248
|
|
|
157
|
|
|
9,083
|
|
|
1,989
|
|
|||||
Other income (expense), net
|
14
|
|
|
(96
|
)
|
|
158
|
|
|
(120
|
)
|
|||||
Total other (expense) income, net
|
5,074
|
|
|
(2,162
|
)
|
|
2,559
|
|
|
(5,055
|
)
|
|||||
Income before income taxes
|
14,033
|
|
|
9,137
|
|
|
12,974
|
|
|
16,326
|
|
|||||
Provision for income taxes
|
4,941
|
|
|
3,665
|
|
|
674
|
|
|
6,713
|
|
|||||
Net income
|
9,092
|
|
|
5,472
|
|
|
12,300
|
|
|
9,613
|
|
|||||
Net income (loss) attributable to noncontrolling interests
|
8
|
|
|
7
|
|
|
32
|
|
|
(36
|
)
|
|||||
Net income attributable to Alico, Inc. common stockholders
|
$
|
9,100
|
|
|
$
|
5,479
|
|
|
$
|
12,332
|
|
|
$
|
9,577
|
|
|
Per share information attributable to Alico, Inc. common stockholders:
|
|
|
|
|
|
|
|
|||||||||
Earnings per common share:
|
|
|
|
|
|
|
|
|
|
|||||||
Basic
|
$
|
1.11
|
|
|
$
|
0.66
|
|
|
$
|
1.50
|
|
|
$
|
1.15
|
|
|
Diluted
|
$
|
1.09
|
|
|
$
|
0.66
|
|
|
$
|
1.48
|
|
|
$
|
1.15
|
|
|
Weighted-average number of common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|||||||
Basic
|
8,228
|
|
|
8,293
|
|
|
8,243
|
|
|
8,315
|
|
|||||
Diluted
|
8,324
|
|
|
8,364
|
|
|
8,314
|
|
|
8,340
|
|
|||||
|
|
|
|
|
|
|
|
|||||||||
Cash dividends declared per common share
|
$
|
0.06
|
|
|
$
|
0.06
|
|
|
$
|
0.18
|
|
|
$
|
0.18
|
|
ALICO, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (in thousands) |
||||||||
|
|
|
|
|||||
|
Nine Months Ended June 30,
|
|||||||
|
2018
|
|
2017
|
|||||
Net cash provided by operating activities:
|
|
|
|
|
|
|||
Net income
|
$
|
12,300
|
|
|
$
|
9,613
|
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|||
Deferred gain on sale of sugarcane land
|
(767
|
)
|
|
(422
|
)
|
|||
Depreciation, depletion and amortization
|
10,327
|
|
|
11,529
|
|
|||
Deferred income tax provision
|
649
|
|
|
4,437
|
|
|||
Gain on sale of real estate, property and equipment and assets held for sale
|
(8,315
|
)
|
|
(1,338
|
)
|
|||
Impairment of long-lived assets
|
1,855
|
|
|
—
|
|
|||
Non-cash interest expense on deferred gain on sugarcane land
|
1,021
|
|
|
1,060
|
|
|||
Stock-based compensation expense
|
1,337
|
|
|
1,230
|
|
|||
Other
|
(285
|
)
|
|
145
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|||
Accounts receivable
|
(4,510
|
)
|
|
(7,104
|
)
|
|||
Inventories
|
6,478
|
|
|
17,350
|
|
|||
Prepaid expenses and other assets
|
(892
|
)
|
|
(621
|
)
|
|||
Accounts payable and accrued expenses
|
(594
|
)
|
|
(6,826
|
)
|
|||
Income tax payable
|
—
|
|
|
1,539
|
|
|||
Other liabilities
|
(2,485
|
)
|
|
(1,692
|
)
|
|||
Net cash provided by operating activities
|
16,119
|
|
|
28,900
|
|
|||
|
|
|
|
|||||
Cash flows from investing activities:
|
|
|
|
|
|
|||
Purchases of property and equipment
|
(12,129
|
)
|
|
(11,450
|
)
|
|||
Net proceeds from sale of property and equipment and assets held for sale
|
31,671
|
|
|
3,016
|
|
|||
Notes receivable
|
(379
|
)
|
|
—
|
|
|||
Other
|
—
|
|
|
155
|
|
|||
Net cash provided by (used in) investing activities
|
19,163
|
|
|
(8,279
|
)
|
|||
|
|
|
|
|||||
Cash flows from financing activities:
|
|
|
|
|
|
|||
Repayments on revolving lines of credit
|
(21,424
|
)
|
|
(70,770
|
)
|
|||
Borrowings on revolving lines of credit
|
21,424
|
|
|
65,770
|
|
|||
Principal payments on term loans
|
(9,421
|
)
|
|
(8,061
|
)
|
|||
Treasury stock purchases
|
(2,215
|
)
|
|
(2,174
|
)
|
|||
Dividends paid
|
(1,480
|
)
|
|
(1,496
|
)
|
|||
Capital contribution received from noncontrolling interest
|
1,000
|
|
|
—
|
|
|||
Capital lease obligation payments
|
(8
|
)
|
|
(571
|
)
|
|||
Net cash used in financing activities
|
(12,124
|
)
|
|
(17,302
|
)
|
|||
|
|
|
|
|||||
Net increase in cash and cash equivalents
|
23,158
|
|
|
3,319
|
|
|||
Cash and cash equivalents at beginning of the period
|
3,395
|
|
|
6,625
|
|
|||
|
|
|
|
|||||
Cash and cash equivalents at end of the period
|
$
|
26,553
|
|
|
$
|
9,944
|
|
(in thousands)
|
June 30,
|
|
September 30,
|
||||
|
2018
|
|
2017
|
||||
Unharvested fruit crop on the trees
|
$
|
27,724
|
|
|
$
|
32,145
|
|
Beef cattle
|
—
|
|
|
1,954
|
|
||
Other
|
2,002
|
|
|
2,105
|
|
||
Total inventories
|
$
|
29,726
|
|
|
$
|
36,204
|
|
(in thousands)
|
Carrying Value
|
||||||
|
June 30,
|
|
September 30,
|
||||
|
2018
|
|
2017
|
||||
Office Building
|
$
|
—
|
|
|
$
|
3,214
|
|
Nursery - Gainesville
|
—
|
|
|
6,500
|
|
||
Chancey Bay (Citrus Grove)
|
—
|
|
|
4,179
|
|
||
Gal Hog
|
—
|
|
|
70
|
|
||
Breeding Herd
|
—
|
|
|
5,858
|
|
||
Trailers
|
637
|
|
|
1,162
|
|
||
Island Pond (Citrus Grove)
|
5,878
|
|
|
—
|
|
||
Rawle (Citrus Grove)
|
3,680
|
|
|
—
|
|
||
Parcels on East Ranch
|
100
|
|
|
—
|
|
||
Total Assets Held For Sale
|
$
|
10,295
|
|
|
$
|
20,983
|
|
(in thousands)
|
June 30,
|
|
September 30,
|
||||
|
2018
|
|
2017
|
||||
Citrus trees
|
$
|
258,924
|
|
|
$
|
258,949
|
|
Equipment and other facilities
|
52,491
|
|
|
54,592
|
|
||
Buildings and improvements
|
8,040
|
|
|
8,835
|
|
||
Total depreciable properties
|
319,455
|
|
|
322,376
|
|
||
Less: accumulated depreciation and depletion
|
(87,670
|
)
|
|
(82,443
|
)
|
||
Net depreciable properties
|
231,785
|
|
|
239,933
|
|
||
Land and land improvements
|
105,450
|
|
|
109,404
|
|
||
Net property and equipment
|
$
|
337,235
|
|
|
$
|
349,337
|
|
|
June 30, 2018
|
|
September 30, 2017
|
||||||||||||
|
Principal
|
|
Deferred Financing Costs, Net
|
|
Principal
|
|
Deferred Financing Costs, Net
|
||||||||
|
(in thousands)
|
||||||||||||||
|
|
|
|
|
|
|
|
||||||||
Long-term debt, net of current portion:
|
|
|
|
|
|
|
|
||||||||
Met Fixed-Rate Term Loans
|
$
|
97,500
|
|
|
$
|
865
|
|
|
$
|
99,062
|
|
|
$
|
954
|
|
Met Variable-Rate Term Loans
|
47,438
|
|
|
398
|
|
|
49,594
|
|
|
439
|
|
||||
Met Citree Term Loan
|
4,950
|
|
|
45
|
|
|
5,000
|
|
|
49
|
|
||||
Pru Loans A & B
|
17,707
|
|
|
245
|
|
|
23,030
|
|
|
258
|
|
||||
Pru Loan E
|
4,730
|
|
|
19
|
|
|
4,895
|
|
|
25
|
|
||||
Pru Loan F
|
4,730
|
|
|
41
|
|
|
4,895
|
|
|
42
|
|
||||
|
177,055
|
|
|
1,613
|
|
|
186,476
|
|
|
1,767
|
|
||||
Less current portion
|
5,250
|
|
|
—
|
|
|
4,550
|
|
|
—
|
|
||||
Long-term debt
|
$
|
171,805
|
|
|
$
|
1,613
|
|
|
$
|
181,926
|
|
|
$
|
1,767
|
|
|
June 30, 2018
|
|
September 30, 2017
|
||||||||||||
|
Principal
|
|
Deferred Financing Costs, Net
|
|
Principal
|
|
Deferred Financing Costs, Net
|
||||||||
|
(in thousands)
|
||||||||||||||
|
|
|
|
|
|
|
|
||||||||
Lines of Credit:
|
|
|
|
|
|
|
|
||||||||
RLOC
|
$
|
—
|
|
|
$
|
71
|
|
|
$
|
—
|
|
|
$
|
109
|
|
WCLC
|
—
|
|
|
127
|
|
|
—
|
|
|
153
|
|
||||
Lines of Credit
|
$
|
—
|
|
|
$
|
198
|
|
|
$
|
—
|
|
|
$
|
262
|
|
(in thousands)
|
June 30,
|
|
September 30,
|
||||
|
2018
|
|
2017
|
||||
|
|
|
|
||||
Ad valorem taxes
|
$
|
1,482
|
|
|
$
|
2,648
|
|
Accrued interest
|
1,185
|
|
|
1,165
|
|
||
Accrued employee wages and benefits
|
2,197
|
|
|
1,320
|
|
||
Accrued dividends
|
491
|
|
|
494
|
|
||
Current portion of deferred retirement obligations
|
345
|
|
|
315
|
|
||
Accrued insurance
|
92
|
|
|
166
|
|
||
Other accrued liabilities
|
556
|
|
|
673
|
|
||
Total accrued liabilities
|
$
|
6,348
|
|
|
$
|
6,781
|
|
(in thousands except per share amounts)
|
|
|
|
|
|
|
|
||||||||
|
Three Months Ended June 30,
|
|
Nine Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Net income attributable to Alico, Inc. common stockholders
|
$
|
9,100
|
|
|
$
|
5,479
|
|
|
$
|
12,332
|
|
|
$
|
9,577
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average number of common shares outstanding - basic
|
8,228
|
|
|
8,293
|
|
|
8,243
|
|
|
8,315
|
|
||||
Dilutive effect of equity-based awards
|
96
|
|
|
71
|
|
|
71
|
|
|
25
|
|
||||
Weighted average number of common shares outstanding - diluted
|
8,324
|
|
|
8,364
|
|
|
8,314
|
|
|
8,340
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net income per common shares attributable to Alico, Inc. common stockholders:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
1.11
|
|
|
$
|
0.66
|
|
|
$
|
1.50
|
|
|
$
|
1.15
|
|
Diluted
|
$
|
1.09
|
|
|
$
|
0.66
|
|
|
$
|
1.48
|
|
|
$
|
1.15
|
|
(in thousands)
|
Three Months Ended June 30,
|
|
Nine Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Alico Citrus
|
$
|
25,711
|
|
|
$
|
49,993
|
|
|
$
|
77,499
|
|
|
$
|
122,537
|
|
Conservation and Environmental Resources
|
544
|
|
|
1,151
|
|
|
1,400
|
|
|
1,789
|
|
||||
Other Operations
|
262
|
|
|
374
|
|
|
751
|
|
|
837
|
|
||||
Total revenues
|
26,517
|
|
|
51,518
|
|
|
79,650
|
|
|
125,163
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Alico Citrus
|
13,697
|
|
|
35,059
|
|
|
56,102
|
|
|
90,067
|
|
||||
Conservation and Environmental Resources
|
864
|
|
|
1,451
|
|
|
3,054
|
|
|
2,726
|
|
||||
Other Operations
|
42
|
|
|
—
|
|
|
165
|
|
|
93
|
|
||||
Total operating expenses
|
14,603
|
|
|
36,510
|
|
|
59,321
|
|
|
92,886
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Gross profit (loss):
|
|
|
|
|
|
|
|
||||||||
Alico Citrus
|
12,014
|
|
|
14,934
|
|
|
21,397
|
|
|
32,470
|
|
||||
Conservation and Environmental Resources
|
(320
|
)
|
|
(300
|
)
|
|
(1,654
|
)
|
|
(937
|
)
|
||||
Other Operations
|
220
|
|
|
374
|
|
|
586
|
|
|
744
|
|
||||
Total gross profit
|
$
|
11,914
|
|
|
$
|
15,008
|
|
|
$
|
20,329
|
|
|
$
|
32,277
|
|
|
|
|
|
|
|
|
|
||||||||
Depreciation, depletion and amortization:
|
|
|
|
|
|
|
|
||||||||
Alico Citrus
|
$
|
3,342
|
|
|
$
|
3,508
|
|
|
$
|
10,106
|
|
|
$
|
10,529
|
|
Conservation and Environmental Resources
|
29
|
|
|
150
|
|
|
119
|
|
|
469
|
|
||||
Other Operations
|
15
|
|
|
3
|
|
|
42
|
|
|
66
|
|
||||
Other Depreciation, Depletion and Amortization
|
19
|
|
|
72
|
|
|
60
|
|
|
465
|
|
||||
Total depreciation, depletion and amortization
|
$
|
3,405
|
|
|
$
|
3,733
|
|
|
$
|
10,327
|
|
|
$
|
11,529
|
|
(in thousands)
|
June 30,
|
|
September 30,
|
||||
|
2018
|
|
2017
|
||||
Assets:
|
|
|
|
||||
Alico Citrus
|
$
|
400,596
|
|
|
$
|
387,972
|
|
Conservation and Environmental Resources
|
5,299
|
|
|
13,845
|
|
||
Other Operations
|
10,695
|
|
|
10,974
|
|
||
Other Corporate Assets
|
2,026
|
|
|
6,391
|
|
||
Total Assets
|
$
|
418,616
|
|
|
$
|
419,182
|
|
Expected Volatility
|
32.19
|
%
|
Expected Term (in years)
|
2.6 - 4.0
|
|
Risk Free Rate
|
24.5
|
%
|
(in thousands, except share amounts)
|
|
|
|
|||
|
Shares
|
|
Cost
|
|||
Balance as of September 30, 2017
|
177,315
|
|
|
$
|
6,502
|
|
Purchased
|
72,266
|
|
|
2,215
|
|
|
Issued to employees and directors
|
(25,834
|
)
|
|
(863
|
)
|
|
|
|
|
|
|||
Balance as of June 30, 2018
|
223,747
|
|
|
$
|
7,854
|
|
•
|
Alico Citrus
includes activities related to planting, owning, cultivating and/or managing citrus groves in order to produce fruit for sale to fresh and processed citrus markets, including activities related to the purchase and resale of fruit and value-added services, which include contracting for the harvesting, marketing and hauling of citrus;
|
•
|
Conservation and Environmental Resources
includes activities related to sod, native plant sales, leasing, management and/or conservation of unimproved native pasture land; and
|
•
|
Other Operations consists of activities related to rock mining royalties and other insignificant lines of business. Also included are activities related to owning and/or leasing improved farmland. Improved farmland is acreage that has been converted, or is permitted to be converted, from native pasture and which may have various improvements including irrigation, drainage and roads.
|
•
|
sold its Gal Hog property for approximately $7,300,000;
|
•
|
sold its property at Chancey Bay for approximately $4,200,000. As part of the transaction, the Company agreed to pay the purchaser rent of $200,000 in exchange for Alico retaining the rights of harvesting and selling of the fruit in the 2017/2018 harvest season;
|
•
|
sold its Nursery located in Gainesville for approximately $6,500,000. The Company continues to operate a nursery in its Joshua location;
|
•
|
sold its breeding herd to a third party for approximately $7,800,000. As part of this transaction, the purchaser is also leasing grazing and other rights on the Alico Ranch from the Company at a rate of $100,000 per month; and
|
•
|
sold its corporate office building in Fort Myers, Florida for $5,300,000. The sales agreement provides that the Company will lease back a portion of the office space for five years.
|
(in thousands)
|
Three Months Ended
|
|
|
|
|
|
Nine Months Ended
|
|
|
|
|
||||||||||||||||||
|
June 30,
|
|
Change
|
|
June 30,
|
|
Change
|
||||||||||||||||||||||
|
2018
|
|
2017
|
|
$
|
|
%
|
|
2018
|
|
2017
|
|
$
|
|
%
|
||||||||||||||
Operating revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Alico Citrus
|
$
|
25,711
|
|
|
$
|
49,993
|
|
|
$
|
(24,282
|
)
|
|
(48.6
|
)%
|
|
$
|
77,499
|
|
|
$
|
122,537
|
|
|
$
|
(45,038
|
)
|
|
(36.8
|
)%
|
Conservation and Environmental Resources
|
544
|
|
|
1,151
|
|
|
(607
|
)
|
|
(52.7
|
)%
|
|
1,400
|
|
|
1,789
|
|
|
(389
|
)
|
|
(21.7
|
)%
|
||||||
Other Operations
|
262
|
|
|
374
|
|
|
(112
|
)
|
|
(29.9
|
)%
|
|
751
|
|
|
837
|
|
|
(86
|
)
|
|
(10.3
|
)%
|
||||||
Total operating revenues
|
26,517
|
|
|
51,518
|
|
|
(25,001
|
)
|
|
(48.5
|
)%
|
|
79,650
|
|
|
125,163
|
|
|
(45,513
|
)
|
|
(36.4
|
)%
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Gross profit (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Alico Citrus
|
12,014
|
|
|
14,934
|
|
|
(2,920
|
)
|
|
(19.6
|
)%
|
|
21,397
|
|
|
32,470
|
|
|
(11,073
|
)
|
|
(34.1
|
)%
|
||||||
Conservation and Environmental Resources
|
(320
|
)
|
|
(300
|
)
|
|
(20
|
)
|
|
6.7
|
%
|
|
(1,654
|
)
|
|
(937
|
)
|
|
(717
|
)
|
|
76.5
|
%
|
||||||
Other Operations
|
220
|
|
|
374
|
|
|
(154
|
)
|
|
(41.2
|
)%
|
|
586
|
|
|
744
|
|
|
(158
|
)
|
|
(21.2
|
)%
|
||||||
Total gross profit
|
11,914
|
|
|
15,008
|
|
|
(3,094
|
)
|
|
(20.6
|
)%
|
|
20,329
|
|
|
32,277
|
|
|
(11,948
|
)
|
|
(37.0
|
)%
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
General and administrative expenses
|
2,955
|
|
|
3,709
|
|
|
(754
|
)
|
|
(20.3
|
)%
|
|
9,914
|
|
|
10,896
|
|
|
(982
|
)
|
|
(9.0
|
)%
|
||||||
Income from operations
|
8,959
|
|
|
11,299
|
|
|
(2,340
|
)
|
|
(20.7
|
)%
|
|
10,415
|
|
|
21,381
|
|
|
(10,966
|
)
|
|
(51.3
|
)%
|
||||||
Total other (expense) income, net
|
5,074
|
|
|
(2,162
|
)
|
|
7,236
|
|
|
NM
|
|
|
2,559
|
|
|
(5,055
|
)
|
|
7,614
|
|
|
NM
|
|
||||||
Income before income taxes
|
14,033
|
|
|
9,137
|
|
|
4,896
|
|
|
53.6
|
%
|
|
12,974
|
|
|
16,326
|
|
|
(3,352
|
)
|
|
(20.5
|
)%
|
||||||
Provision for income taxes
|
4,941
|
|
|
3,665
|
|
|
1,276
|
|
|
34.8
|
%
|
|
674
|
|
|
6,713
|
|
|
(6,039
|
)
|
|
(90.0
|
)%
|
||||||
Net income
|
9,092
|
|
|
5,472
|
|
|
3,620
|
|
|
66.2
|
%
|
|
12,300
|
|
|
9,613
|
|
|
2,687
|
|
|
28.0
|
%
|
||||||
Net income (loss) attributable to noncontrolling interests
|
8
|
|
|
7
|
|
|
1
|
|
|
14.3
|
%
|
|
32
|
|
|
(36
|
)
|
|
68
|
|
|
NM
|
|
||||||
Net income attributable to Alico, Inc. common stockholders
|
$
|
9,100
|
|
|
$
|
5,479
|
|
|
$
|
3,621
|
|
|
66.1
|
%
|
|
$
|
12,332
|
|
|
$
|
9,577
|
|
|
$
|
2,755
|
|
|
28.8
|
%
|
(in thousands, except per pound data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Three Months Ended June 30,
|
|
|
|
|
|
Nine Months Ended June 30,
|
|
|
|
|
||||||||||||||||||
|
|
Change
|
|
|
Change
|
||||||||||||||||||||||||
|
2018
|
|
2017
|
|
Unit
|
|
%
|
|
2018
|
|
2017
|
|
Unit
|
|
%
|
||||||||||||||
Revenue From:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Sale of Calves
|
$
|
—
|
|
|
$
|
381
|
|
|
$
|
(381
|
)
|
|
NM
|
|
|
$
|
57
|
|
|
$
|
401
|
|
|
$
|
(344
|
)
|
|
(85.8
|
)%
|
Sale of Culls
|
—
|
|
|
601
|
|
|
(601
|
)
|
|
NM
|
|
|
—
|
|
|
625
|
|
|
(625
|
)
|
|
NM
|
|
||||||
Land Leasing
|
536
|
|
|
19
|
|
|
517
|
|
|
NM
|
|
|
1,248
|
|
|
474
|
|
|
774
|
|
|
163.3
|
%
|
||||||
Other
|
8
|
|
|
150
|
|
|
(142
|
)
|
|
(94.7
|
)%
|
|
95
|
|
|
289
|
|
|
(194
|
)
|
|
(67.1
|
)%
|
||||||
Total
|
$
|
544
|
|
|
$
|
1,151
|
|
|
$
|
(607
|
)
|
|
(52.7
|
)%
|
|
$
|
1,400
|
|
|
$
|
1,789
|
|
|
$
|
(389
|
)
|
|
(21.7
|
)%
|
Pounds Sold:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Calves
|
—
|
|
|
225
|
|
|
(225
|
)
|
|
NM
|
|
|
49
|
|
|
241
|
|
|
(192
|
)
|
|
(79.7
|
)%
|
||||||
Culls
|
—
|
|
|
919
|
|
|
(919
|
)
|
|
NM
|
|
|
—
|
|
|
964
|
|
|
(964
|
)
|
|
NM
|
|
||||||
Price Per Pound:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Calves
|
$
|
—
|
|
|
$
|
1.69
|
|
|
$
|
(1.69
|
)
|
|
NM
|
|
|
$
|
1.17
|
|
|
$
|
1.66
|
|
|
$
|
(0.49
|
)
|
|
(29.5
|
)%
|
Culls
|
$
|
—
|
|
|
$
|
0.65
|
|
|
$
|
(0.65
|
)
|
|
NM
|
|
|
$
|
—
|
|
|
$
|
0.65
|
|
|
$
|
(0.65
|
)
|
|
NM
|
|
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Cost of Calves Sold
|
$
|
—
|
|
|
$
|
416
|
|
|
$
|
(416
|
)
|
|
NM
|
|
|
$
|
1,015
|
|
|
$
|
440
|
|
|
$
|
575
|
|
|
130.7
|
%
|
Cost of Culls Sold
|
—
|
|
|
543
|
|
|
(543
|
)
|
|
NM
|
|
|
—
|
|
|
572
|
|
|
(572
|
)
|
|
NM
|
|
||||||
Land Leasing Expenses
|
253
|
|
|
119
|
|
|
134
|
|
|
112.6
|
%
|
|
563
|
|
|
208
|
|
|
355
|
|
|
170.7
|
%
|
||||||
Water Conservation
|
496
|
|
|
373
|
|
|
123
|
|
|
33.0
|
%
|
|
1,263
|
|
|
1,475
|
|
|
(212
|
)
|
|
(14.4
|
)%
|
||||||
Other
|
115
|
|
|
—
|
|
|
115
|
|
|
NM
|
|
|
213
|
|
|
31
|
|
|
182
|
|
|
NM
|
|
||||||
Total
|
$
|
864
|
|
|
$
|
1,451
|
|
|
$
|
(587
|
)
|
|
(40.5
|
)%
|
|
$
|
3,054
|
|
|
$
|
2,726
|
|
|
$
|
328
|
|
|
12.0
|
%
|
(in thousands)
|
June 30,
|
|
September 30,
|
|
|
||||||
|
2018
|
|
2017
|
|
Change
|
||||||
Cash and cash equivalents
|
$
|
26,553
|
|
|
$
|
3,395
|
|
|
$
|
23,158
|
|
Total current assets
|
$
|
77,928
|
|
|
$
|
66,489
|
|
|
$
|
11,439
|
|
Total current liabilities
|
$
|
15,515
|
|
|
$
|
15,983
|
|
|
$
|
(468
|
)
|
Working capital
|
$
|
62,413
|
|
|
$
|
50,506
|
|
|
$
|
11,907
|
|
Total assets
|
$
|
418,616
|
|
|
$
|
419,182
|
|
|
$
|
(566
|
)
|
Principal amount of term loans and lines of credit
|
$
|
177,055
|
|
|
$
|
186,476
|
|
|
$
|
(9,421
|
)
|
Current ratio
|
5.02 to 1
|
|
|
4.16 to 1
|
|
|
|
(in thousands)
|
Nine Months Ended June 30,
|
|
|
||||||||
|
2018
|
|
2017
|
|
Change
|
||||||
Net income
|
$
|
12,300
|
|
|
$
|
9,613
|
|
|
$
|
2,687
|
|
Deferred gain on sale of sugarcane land
|
(767
|
)
|
|
(422
|
)
|
|
(345
|
)
|
|||
Depreciation, depletion and amortization
|
10,327
|
|
|
11,529
|
|
|
(1,202
|
)
|
|||
Deferred income tax provision
|
649
|
|
|
4,437
|
|
|
(3,788
|
)
|
|||
Gain on sale of real estate, property and equipment and assets held for sale
|
(8,315
|
)
|
|
(1,338
|
)
|
|
(6,977
|
)
|
|||
Impairment of long-lived assets
|
1,855
|
|
|
—
|
|
|
1,855
|
|
|||
Non-cash interest expense on deferred gain on sugarcane land
|
1,021
|
|
|
1,060
|
|
|
(39
|
)
|
|||
Stock-based compensation expense
|
1,337
|
|
|
1,230
|
|
|
107
|
|
|||
Other
|
(285
|
)
|
|
145
|
|
|
(430
|
)
|
|||
Change in working capital
|
(2,003
|
)
|
|
2,646
|
|
|
(4,649
|
)
|
|||
Net cash provided by operating activities
|
$
|
16,119
|
|
|
$
|
28,900
|
|
|
$
|
(12,781
|
)
|
(in thousands)
|
Nine Months Ended June 30,
|
|
|
||||||||
|
2018
|
|
2017
|
|
Change
|
||||||
Capital expenditures:
|
|
|
|
|
|
||||||
Citrus tree development
|
$
|
(10,092
|
)
|
|
$
|
(6,789
|
)
|
|
$
|
(3,303
|
)
|
Breeding herd purchases
|
(317
|
)
|
|
(287
|
)
|
|
(30
|
)
|
|||
Equipment and other
|
(1,720
|
)
|
|
(4,374
|
)
|
|
2,654
|
|
|||
Total
|
(12,129
|
)
|
|
(11,450
|
)
|
|
(679
|
)
|
|||
|
|
|
|
|
|
||||||
Net proceeds from sale of property and equipment and assets held for sale
|
31,671
|
|
|
3,016
|
|
|
28,655
|
|
|||
Notes receivable
|
(379
|
)
|
|
—
|
|
|
(379
|
)
|
|||
Other
|
—
|
|
|
155
|
|
|
(155
|
)
|
|||
Net cash provided by (used in) investing activities
|
$
|
19,163
|
|
|
$
|
(8,279
|
)
|
|
$
|
27,442
|
|
(in thousands)
|
Nine Months Ended June 30,
|
|
|
||||||||
|
2018
|
|
2017
|
|
Change
|
||||||
Repayments on revolving lines of credit
|
$
|
(21,424
|
)
|
|
$
|
(70,770
|
)
|
|
$
|
49,346
|
|
Borrowings on revolving lines of credit
|
21,424
|
|
|
65,770
|
|
|
(44,346
|
)
|
|||
Principal payments on term loans
|
(9,421
|
)
|
|
(8,061
|
)
|
|
(1,360
|
)
|
|||
Treasury stock purchases
|
(2,215
|
)
|
|
(2,174
|
)
|
|
(41
|
)
|
|||
Dividends paid
|
(1,480
|
)
|
|
(1,496
|
)
|
|
16
|
|
|||
Capital contribution received from noncontrolling interest
|
1,000
|
|
|
—
|
|
|
1,000
|
|
|||
Capital lease obligation payments
|
(8
|
)
|
|
(571
|
)
|
|
563
|
|
|||
Net cash used in financing activities
|
$
|
(12,124
|
)
|
|
$
|
(17,302
|
)
|
|
$
|
5,178
|
|
(a)
|
Evaluation of Disclosure Controls and Procedures.
|
(b)
|
Changes in Internal Control over Financial Reporting.
|
|
ALICO, INC. (Registrant)
|
|
|
|
|
August 6, 2018
|
By:
|
/s/ Remy W. Trafelet
|
|
|
Remy W. Trafelet
|
|
|
President and Chief Executive Officer
|
|
|
|
August 6, 2018
|
By:
|
/s/ John E. Kiernan
|
|
|
John E. Kiernan
|
|
|
Executive Vice President and Chief Financial Officer
|
(a)
|
Shared Office Services
. Supplier shall provide Purchaser with, and Purchaser shall purchase from Supplier, a license to use and occupy a portion of Supplier’s office space located at 410 Park Avenue, 17th Floor (or such other space as is mutually agreed by the parties hereto, the “
Shared Office
”) (the “
Shared Office Services
”
)
;
|
(b)
|
Administrative Support
. Supplier shall provide Purchaser with, and Purchaser shall purchase from Supplier, such other services as are attendant to the Shared Office Services, including reception, secretarial services and related facilities services, as requested by Purchaser.
|
(a)
|
General Shared Service Fees
. In consideration of the Services, during the Term of this Agreement, Purchaser will pay Supplier an amount equal to Supplier’s actual costs of providing the Services as a base shared services fee. Such base shared services fee shall include internal allocations, as determined by Supplier in consultation with Purchaser, and a prorated portion of any security deposit, rent, utilities, telecommunications, phone, information technology infrastructure and support, leasehold improvements, property taxes, office supplies and similar payments actually paid by Supplier in respect of the Shared Office determined by multiplying the amounts paid by Supplier by the percentage of the Shared Office used by Purchaser. All such expenses and payments shall be fully supported with reasonable documentation and copies of all such documentation shall be provided to Purchaser upon Purchaser’s reasonable request to the extent required to support such expenses and payments.
|
(b)
|
On or before December 1 of each year of the Term of this Agreement, Supplier and Purchaser shall jointly agree on an estimate of Supplier’s fees for each functional category of Service set forth in Section 1.1(b) to be provided pursuant this Agreement for the next calendar year; provided, that to the extent such fees cannot be determined, as to such unknown fees, Supplier shall set out the basis on which they shall be charged. It is understood and agreed that all fees charged
|
ALICO Shared Services Allocation
|
2018-20
|
||||
|
|
||||
- Lease up Jun 30, 2020 (6,073 RSF).
|
|
||||
- TBCM put up $300k LOC in Feb 2018.
|
|
||||
|
|
||||
Trafelet Brokaw & Co. Office Costs:
|
|
||||
|
|
|
|
||
Occupancy
|
|
|
$
|
510,539
|
|
Communications & Technology (internet only)
|
19,200
|
|
|||
General office expense
|
|
1,300
|
|
||
|
|
|
542,739
|
|
|
|
|
|
|
||
|
|
|
|
||
Alico Allocation for Shared Services:
|
|
|
|||
|
|
|
|
||
Office Overhead Costs:
|
|
72.79
|
%
|
||
|
|
|
|||
Total office overhead allocation
|
|
395,076
|
|
||
|
|
|
|
||
Staff Support:
|
|
|
|
||
Administrative Assistance
|
|
223,399
|
|
||
Total Staff Support
|
|
|
223,399
|
|
|
|
|
|
|
||
Total Annual Alico Allocation for Shared Services
|
$
|
618,476
|
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Alico, Inc. (Alico),
|
2.
|
Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, and is not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of Alico as of, and for, the periods presented in this report;
|
4.
|
Alico’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for Alico and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to Alico, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of Alico’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in Alico’s internal control over financial reporting that occurred during Alico’s most recent fiscal quarter ended
June 30, 2018
, that has materially affected, or is reasonably likely to materially affect, Alico’s internal control over financial reporting; and
|
5.
|
Alico’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to Alico’s auditors and audit committee of Alico’s Board of Directors:
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: August 6, 2018
|
By:
|
/s/ Remy W. Trafelet
|
|
|
Remy W. Trafelet
|
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Alico, Inc. (Alico),
|
2.
|
Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, and is not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of Alico as of, and for, the periods presented in this report;
|
4.
|
Alico’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for Alico and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to Alico, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of Alico’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in Alico’s internal control over financial reporting that occurred during Alico’s most recent fiscal quarter ended
June 30, 2018
, that has materially affected, or is reasonably likely to materially affect, Alico’s internal control over financial reporting; and
|
5.
|
Alico’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to Alico’s auditors and audit committee of Alico’s Board of Directors:
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: August 6, 2018
|
By:
|
/s/ John E. Kiernan
|
|
|
John E. Kiernan
|
|
|
Chief Financial Officer and Executive Vice President
|
Date: August 6, 2018
|
By:
|
/s/ Remy W. Trafelet
|
|
|
Remy W. Trafelet
|
|
|
President and Chief Executive Officer
|
Date: August 6, 2018
|
By:
|
/s/ John E. Kiernan
|
|
|
John E. Kiernan
|
|
|
Chief Financial Officer and Executive Vice President
|