UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-K __X__ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED) For the fiscal year ended August 31, 1997. OR _____ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED) For the transition period from ________________ to_______________. Commission file number 0-261. ALICO, INC. ______________________________________________________ (Exact name of registrant as specified in its charter) Florida 59-0906081 _______________________________ ____________________ (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) P. O. Box 338, La Belle, Florida 33975 ________________________________________ __________ (Address of principal executive offices) (Zip Code) (941)675-2966 Registrant's telephone number, including area code______________ SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: Name of each exchange on Title of each class which registered ___________________ ________________________ None None SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: COMMON CAPITAL STOCK, $1.00 Par value, Non-cumulative _____________________________________________________ (Title of Class) Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. _________ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that such registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes __X__ No_____ As of October 20, 1997 there were 7,027,827 shares of stock outstanding and the aggregate market value (based upon the average bid and asked price, as quoted on NASDAQ) of the common stock held by nonaffiliates was approximately $83,851,165. DOCUMENTS INCORPORATED BY REFERENCE Portions of the registrant's Annual Report and Proxy Statement dated November 10, 1997 are incorporated by reference in Parts II and III, respectively. PART I ______ Item 1. Business. __________________________ Alico, Inc. (the "Company") is generally recognized as an agribusiness company operating in Central and Southwest Florida. The Company's primary asset is 142,709 acres of land located in Collier, Hendry, Lee and Polk Counties. (See table on Page 5 for location and acreage by current primary use.) The Company is involved in various operations and activities including citrus fruit production, cattle ranching, sugarcane and sod production, and forestry. The Company also leases land for farming, cattle grazing, recreation, and oil exploration. The Company's land is managed for multiple use wherever possible. Cattle ranching, forestry and land leased for farming, grazing, recreation and oil exploration, in some instances, utilize the same acreage. Agricultural operations have combined to produce from 68 to 91 percent of annual revenues during the past five years. Citrus groves generate the most gross revenue. Sugarcane ranks second in revenue production. While the cattle ranching operation utilizes the largest acreage, it ranks third in the production of revenue. Approximately 10,006 acres of the Company's property are classified as timberlands, however, the area in which these lands are located is not highly rated for timber production. These lands are also utilized as native range, in the ranching operation, and leased out for recreation and oil exploration. Diversification of the Company's agricultural base was initiated with the development of a Sugarcane Division at the end of the 1988 fiscal year. The 5,042 acres in production during the 1997 fiscal year consisted of 995 acres planted in the fall of 1992, 993 acres planted in 1993, 1558 acres planted in 1994, and 1,496 acres planted in 1995. The Company continued to expand agriculture activities during the 1997 fiscal year, continuing development of a farm leasing project. Leasing of lands for rock mining and oil and mineral exploration, rental of land for grazing, farming, recreation and other uses, while not classified as agricultural operations, are important components of the Company's land utilization and operation. Gross revenue from these activities during the past five years has ranged from 3 to 5 percent of total revenue. The Company is not in the land sales and development business, except through its wholly owned subsidiary, Saddlebag Lake Resorts, Inc.; however, it does from time to time sell properties which, in the judgment of management, are surplus to the Company's primary operations. Gross revenue from land sales during the past five years has ranged from 1 to 24 percent of total revenues. For further discussion of the relative importance of the various segments of the Company's operations, including financial information regarding revenues, operating profits (losses) and assets attributable to each major segment of the Company's business, see Note 11 of Notes to Consolidated Financial Statements and "Management's Discussion and Analysis of Financial Condition and Results of Operations" incorporated in this document. Subsidiary Operations _____________________ The Company's wholly owned subsidiary, Saddlebag Lake Resorts, Inc. (the "Subsidiary"), is only active in the subdividing, development and sale of real estate. The financial results of the operation of this subsidiary are consolidated with those of the Company. (See Note 1 of Notes to Financial Statements.) Contributions by the Subsidiary to the net income of the Company, during the past five years, have ranged from 0 to 1 percent. The Subsidiary has two subdivisions near Frostproof, Florida which have been developed and are on the market. Approximately 74% of the lots have been sold. Citrus ______ Approximately 8,358 acres of citrus were harvested during the 1997 season. Since 1983 the Company has maintained a marketing contract covering the majority of the Company's citrus crop with Ben Hill Griffin, Inc., a Florida corporation and major shareholder. The agreement provides for modifications to meet changing market conditions and provides that either party may terminate the contract by giving notice prior to August 1st, preceding the fruit season immediately following. Under the terms of the contract the Company's fruit is packed and/or processed and sold along with fruit from other growers, including Ben Hill Griffin, Inc. The proceeds are distributed on a pro rata basis as the finished product is sold. During the year ended August 31, 1997, approximately 89% of the Company's fruit crop was marketed under this agreement, as compared to 88% in 1995/96. The Company expects that the majority of the 1997/98 crop will be marketed under the same terms. In addition, Ben Hill Griffin, Inc. provides harvesting services to the Company for citrus sold to unrelated processors. These sales accounted for the remaining 11% of total citrus revenue for the year. Ranch _____ The Company has a cattle operation located in Hendry and Collier Counties, Florida which is engaged primarily in the production of beef cattle and the raising of replacement heifers. The breeding herd consists of approximately 16,500 cows, bulls and replacement heifers. Approximately 45% of the herd are from one to five years old, while the remaining 55% are six and older. The Company primarily sells to packing and processing plants. The Company also sells cattle through local livestock auction markets and to contract cattle buyers. These buyers provide ready markets for the Company's cattle. The loss of any one or a few of these plants and/or buyers would not, in management's view, have a material adverse effect on the Company's cattle operation. Subject to prevailing market conditions, the Company may hedge up to 50% of its beef inventory by entering into cattle futures contracts to reduce exposure to changes in market prices. Sugarcane _________ The Company had 5,042 acres and 5,023 acres of sugarcane in production during the 1996/97 and 1995/96 fiscal year, respectively. The 1996/97 and 1995/96 crops yielded approximately 158,000 and 187,000 gross tons, respectively. Forest Products _______________ Approximately 7% of the Company's properties are classified as timberlands. The principal forest products sold by the Company are pulpwood and sabal palms. These products are sold to a paper company and various landscaping companies, respectively. The Company does not incur any of the harvesting expenses. Part of the lands, from which the timber was removed, is being converted to semi-improved pasture and other uses. Land Rental for Grazing, Agricultural and Other Uses ____________________________________________________ The Company rents lands to others for grazing, farming and recreational uses, on a tenant-at-will basis, for an annual fee. The income is not significant when compared to overall gross income, however, it does help to offset the expense of carrying these properties until they are put to a more profitable use. The Company has developed additional land to lease for farming. There were no significant changes in the method of rental for these purposes during the past fiscal year. Leases for Oil and Mineral Exploration ______________________________________ The Company has leased subsurface rights to a portion of it's properties for the purpose of oil and mineral exploration. Currently, there are two leases in effect. Twenty-four wells have been drilled during the years that the Company has been leasing subsurface rights to oil companies. The drilling has resulted in twenty-one dry holes, one marginal producer, which has been abandoned, and two average producers, still producing. Mining Operations: Rock and Sand _________________________________ The Company leases 7,927 acres in Lee County, Florida to Florida Rock Industries, Inc. of Jacksonville, Florida for mining and production of rock, aggregate, sand, baserock and other road building and construction materials. Royalties which the company receives for these products are based on a percentage of the f.o.b. plant sales price. Competition ___________ As indicated, the Company is primarily engaged in a limited number of agricultural activities, all of which are highly competitive. For instance, citrus is grown in several states, the most notable of which are: Florida, California, Arizona and Texas. In addition, citrus and sugarcane products are imported from some foreign countries. Beef cattle are produced throughout the United States and domestic beef sales must also compete with sales of imported beef. Additionally, forest and rock products are produced in most parts of the United States. Leasing of land for oil exploration is also widespread. The Company's share of the market for citrus, cattle and forest products in the United States is insignificant. Environmental Regulations _________________________ The Company's operation is subject to various federal, state and local laws regulating the discharge of materials into the environment. The Company is in substantial compliance with all such rules and such compliance has not had a material effect upon capital expenditures, earnings or the competitive position of the Company. While compliance with environmental regulations has not had a material economic effect on the Company's operations, executive officers are required to spend a considerable amount of time keeping current on these matters. In addition, there are ongoing costs incurred in complying with the permitting and reporting requirements. Employees _________ At the end of August 1997 the Company had a total of 124 full-time employees classified as follows: Citrus 59; Ranch 12; Sugarcane 9; Facilities Maintenance Support 28; General and Administrative 16. There are no employees engaged in the development of new products or research. Seasonal Nature of Business ___________________________ As with any agribusiness enterprise, the Company's business operations are predominantly seasonal in nature. The harvest and sale of citrus fruit generally occurs from October to June. Sugarcane is harvested during the first, second and third quarters. Other segments of the Company's business such as its cattle and sod sales, and its timber, mining and leasing operations, tend to be more successive than seasonal in nature. Item 2. Properties. ____________________________ At August 31, 1997, the Company owned a total of 142,709 acres of land located in four counties in Florida. Acreage in each county and the primary classification with respect to present use of these properties is shown in the following table:
ACREAGE BY CURRENT PRIMARY USE ______________________________ Timber Native Improved Citrus Sugar- Agri- County Land Pasture Pasture Sod Land cane culture Other Total ___________________________________________________________________________ Polk 550 8,848 447 -- 3,148 -- -- 4 12,997 Lee 3,731 1,088 -- -- -- -- 1,460 3,635 9,914 Hendry 3,823 57,621 25,381 220 2,299 7,300 8,186 3,629 108,459 Collier 1,902 1,951 1,112 -- 4,041 -- -- 2,333 11,339 ______ _______ ______ ___ _____ _____ _____ _____ _______ Totals 10,006 69,508 26,940 220 9,488 7,300 9,646 9,601 142,709 ______ _______ ______ ___ _____ _____ _____ _____ _______ ______ _______ ______ ___ _____ _____ _____ _____ _______
Of the above lands, the Company utilizes 26,493 acres of improved pasture plus approximately 56,000 acres of native pasture for cattle production and 7,927 acres are leased for rock mining operations. Much of the land is also leased for multi-purpose use such as cattle grazing, oil exploration, agriculture and recreation. In addition to the land shown in the above table, the Company owns full subsurface rights to 1,064 acres and fractional subsurface rights to 18,882 acres. From the inception of the Company's initial development program in 1948, the goal has been to develop the lands for the most profitable use. Prior to implementation of the development program, detailed studies were made of the properties focusing on soil capabilities, topography, transportation, availability of markets and the climatic characteristics of each of the tracts. Based on these and later studies, the use of each tract was determined. It is the opinion of Management that the lands are suitable for agricultural, residential and commercial uses. However, since the Company is primarily engaged in agricultural activities, some of the lands are considered surplus to its needs for this purpose and, as indicated under Item 1 of this report, sales of real property are made from time to time. Management believes that each of the major programs is adequately supported by agricultural equipment, buildings, fences, irrigation systems and other amenities required for the operation of the projects. In October 1992 the Company entered into a contract, with the Board of Regents of the State of Florida, committing to a donation of 975 acres of land and other items, in connection with a new state university. In addition to the contribution of land, the following items and amounts were also committed: design and planning - $200,000; academic chairs - $1,200,000; road construction - $2,400,000. Governmental approvals have been obtained to develop approximately 2,500 acres surrounding the University site. However, the development schedule of the University is subject to the appropriation of funds by the legislature. The University opened in August 1997. Item 3. Legal Proceedings. ___________________________________ There are no pending legal proceedings involving the Company. Item 4. Submission of Matters to a Vote of Security Holders. _____________________________________________________________________ There were no matters submitted to a vote of security holders during the 1997 fiscal year. Executive Officers of the Company _________________________________ Pursuant to General Instruction G(3) of Form 10-K, the following list is included as an unnumbered Item in Part I of this report in lieu of being included in the Proxy Statement for the Annual Meeting of Stockholders to be held on December 2, 1997. Election of Executive Officer is held each year at the Annual Meeting of the Board of Directors following the Annual Meeting of the Stockholders. Name Title Age ____ _____ ___ Ben Hill Griffin, III Chairman of the Board (since March 1990), President and Chief Executive Officer (since January 1988) and Director (since March 1973) 55 W. Bernard Lester Executive Vice President and Chief Operating Officer (since January 1988) and Director (since 1987), prior to July 1, 1986 was Executive Director of Florida Department of Citrus for over five years 58 L. Craig Simmons Vice President (effective February, 1995), Treasurer and Chief Financial Officer (effective September 1, 1992), prior thereto was Controller (from January 1 to August 31, 1992) and Assistant Comptroller (from January 1 to December 31, 1991), prior to September 1990 was Controller of Farm/Citrus Division, Collier Enterprises, Agribusiness Group 45 Based solely upon a review of Forms 3 and 4 and amendments thereto furnished to the Company pursuant to Rule 16a-3(e) during the 1997 fiscal year and Forms 5 and amendments thereto furnished to the Company during fiscal year 1992 and certain written representations, if any, made to the Company, no officer, director or beneficial owners of 10% or more of the Company's common stock has failed to file on a timely basis any reports required by Section 16(a) of the Exchange Act to be filed during fiscal 1997. PART II _______ Item 5. Market for the Registrant's Common Stock and Related _____________________________________________________________________ Stockholder Matters. ____________________ Common Stock Prices ___________________ The common stock of Alico, Inc. is traded over-the-counter on the NASDAQ National Market System under the symbol ALCO. The high and low sales prices, by fiscal quarter, during the years ended August 31, 1997 and 1996 are presented below:
1997 1996 Bid Price Bid Price _________ _________ High Low High Low First Quarter 22 1/4 19 1/4 22 1/4 17 Second Quarter 21 1/4 18 26 1/2 21 3/4 Third Quarter 20 1/2 17 5/8 25 1/2 20 11/16 Fourth Quarter 25 1/4 18 1/2 22 3/4 17 1/4
Approximate Number of Holders of Common Stock _____________________________________________ As of October 20, 1997 there were approximately 928 holders of record of Alico, Inc. Common Stock. Dividend Information ____________________ Only year-end dividends have been paid, and during the last three fiscal years were as follows: Amount Paid Record Date Payment Date Per Share ___________ ____________ ___________ October 21, 1994 November 10, 1994 $.25 October 20, 1995 November 10, 1995 $.35 October 25, 1996 November 8, 1996 $.15 Dividends are paid at the discretion of the Company's Board of Directors. The Company foresees no change in its ability to pay annual dividends in the immediate future; nevertheless, there is no assurance that dividends will be paid in the future since they are dependent upon earnings, the financial condition of the Company, and other factors. Item 6. Selected Financial Data. _________________________________________
Years Ended August 3l, DESCRIPTION 1997 1996 1995 1994 1993 ________ ________ ________ ________ ________ (In Thousands Except Per Share Amounts) Revenues $ 47,433 $ 36,089 $ 39,571 $ 38,502 $ 28,563 Costs and Expenses 29,583 29,269 25,105 26,799 24,103 Income Taxes 6,677 2,381 5,525 3,975 1,503 Cumulative Effect of Accounting Change - - - - 2,337 Net Income 11,173 4,439 8,941 7,728 5,294 Average Number of Shares Outstanding 7,028 7,028 7,028 7,028 7,028 Net Income per Share 1.59 .63 1.27 1.10 .75 Cash Dividend Paid per Share .15 .35 .25 .15 .15 Current Assets 37,887 34,877 31,736 28,341 23,597 Total Assets 117,723 114,504 109,007 102,185 90,516 Current Liabilities 4,988 5,115 5,656 5,660 2,936 Ratio-Current Assets to Current Liabilities 7.59:1 6.82:1 5.61:1 5.01:1 8.04:1 Working Capital 32,899 29,762 26,080 22,680 20,661 Long-Term Obligations 24,582 32,006 27,945 28,568 26,296 Total Liabilities 29,570 37,121 33,601 34,228 29,232 Stockholders' Equity 88,153 77,383 75,406 67,957 61,283
Item 7. Management's Discussion and Analysis of Financial __________________________________________________________________ Condition and Results of Operations. ____________________________________ The following discussion focuses on the results of operations and the financial condition of Alico. This section should be read in conjunction with the consolidated financial statements and notes. Liquidity and Capital Resources _______________________________ The Company had cash and marketable securities of $12.9 million at August 31, 1997 compared with $11.1 million at August 31, 1996. Working capital also increased, from $29.8 million at August 31, 1996 to $32.9 million at August 31, 1997. An increase in the number of animals, resulting from the Company's policy of placing cattle into feedlots, has caused the beef inventory to rise and is the primary reason for the increase in working capital. A large real estate sale ($11.5 million gross sales price) to the State of Florida was closed in the second quarter of fiscal 1997. Proceeds from the sale were used to reduce the note payable and pay income taxes. Cash outlay for land, equipment, building, and other improvements totaled $5.8 million, compared to $7.1 million during August 31, 1997 and 1996, respectively. Major expenditures included capitalized maintenance costs for young citrus groves. Land excavation for farm leasing also continued, as did expenditures for replacement equipment and sugarcane capital maintenance. Development is now complete on citrus groves. Capital projects are currently expected to decline during the next fiscal year. Management believes that the Company will be able to meet its working capital requirements, for the foreseeable future, with internally generated funds. In addition, the Company has unused credit commitments which provided for revolving credit of up to $30 million of which $17.1 million was available for the Company's general use at August 31, 1997 (see note 6 of consolidated financial statements). Results of Operations _____________________ Summary of results (in thousands):
Years Ended August 31, 1997 1996 1995 _______ _______ _______ Operating revenue $34,543 $34,505 $30,547 Gross profit 5,886 6,720 7,059 Profit on sale of real estate 11,271 57 7,585 Interest and investment income 1,137 1,033 998 Interest expense 444 990 1,176 Provision for income taxes 6,677 2,381 5,525 Effective income tax rate 37.4% 34.9% 38.2% Net income 11,173 4,439 8,941
Operating Revenue _________________ Operating revenues for fiscal 1997 approximated those of fiscal 1996. Decreases in citrus and sugarcane sales were offset by increased cattle and rock sales, and increased land rentals. Operating revenues for fiscal 1996 increased 13% over fiscal 1995, primarily the result of increased citrus and ranch sales revenues. Gross Profit ____________ Gross profit during fiscal 1997 declined by 12% from fiscal 1996. The decrease was primarily due to lower market prices for citrus products and decreased sugarcane production. Gross profit during fiscal 1996 decreased 5% from fiscal 1995. While gross profit from agriculture during the year approximated the prior year, the decline was due to increases in general and administrative expenses and allocated costs. Profit on Sale of Real Estate ____________________________________ Profit from the sale of real estate increased to $11.27 million during fiscal 1997, as compared to $57 thousand during fiscal 1996. Sales during 1997 included the sale of approximately 21,700 acres of land in Hendry and Collier Counties, Florida, to the State of Florida for $11.5 million, the pretax gain from which was $11.1 million, and several smaller sales in Lee, Collier and Polk Counties. Profit from the sale of real estate declined to $57 thousand during fiscal 1996, compared to $7.6 million during fiscal 1995. Sales were minimal, compared to 1995, which included a large sale in Polk County. Interest and Investment Income ______________________________ Interest and investment income is generated principally from investments in marketable equity securities, corporate and municipal bonds, mutual funds, U.S. Treasury securities and mortgages held on real estate sold on the installment basis. Investment earnings were reinvested throughout fiscal 1997 and 1996, increasing investment levels during each year. The rise in fiscal 1997 net interest and investment income resulted from higher investment levels and favorable market conditions. The rise in fiscal 1996 net interest and investment income resulted from higher investment levels. Interest Expense ________________ Interest expense decreased 56% during fiscal 1997 due primarily to a large reduction in total long-term debt, likewise, total interest cost, which includes capitalized interest and is discussed in Note 6, decreased 37%. During fiscal year 1996, interest expense decreased 16% and total interest cost decreased 3% compared to fiscal year 1995, due to lower interest rates. Provision for Income Taxes __________________________ The effective tax rate increased to 37.4% during fiscal year 1997, from 34.9% during fiscal year 1996. Higher taxable income levels during fiscal 1997 decreased the percentage impact of certain tax exempt investment income. Individual Operating Divisions ______________________________ Gross profit for the individual operating divisions, for fiscal 1997, 1996 and 1995, is presented in the following schedule and is discussed in subsequent sections:
Years Ended August 31, (in thousands) 1997 1996 1995 _______ _______ _______ CITRUS Revenues: Sales $22,287 $22,966 $19,674 Less harvesting & marketing 8,210 6,948 6,569 _______ _______ _______ Net Sales 14,077 16,018 13,105 Cost and Expenses: Direct production** 6,875 5,964 5,488 Allocated cost* 2,352 2,470 2,205 _______ _______ _______ Total 9,227 8,434 7,693 _______ _______ _______ Gross profit, citrus 4,850 7,584 5,412 _______ _______ _______ SUGARCANE Revenues: Sales 4,967 5,851 6,026 Less harvesting & hauling 1,120 1,237 1,294 _______ _______ _______ Net Sales 3,847 4,614 4,732 Costs and expenses: Direct production 1,826 1,758 1,681 Allocated cost* 1,190 1,152 1,291 _______ _______ _______ Total 3,016 2,910 2,972 _______ _____ _______ Gross profit, sugarcane 831 1,704 1,760 _______ _______ _______ Individual Operating Divisions (Continued) Years Ended August 31, (in thousands) 1997 1996 1995 _______ _______ _______ RANCH Revenues: Sales 4,876 3,796 2,952 Costs and expenses: Direct production 3,165 3,890 1,438 Allocated cost* 946 1,539 1,008 _______ _______ _______ Total 4,111 5,429 2,446 _______ _______ _______ Gross profit (loss), ranch 765 (1,633) 506 _______ _______ _______ Total gross profit, agriculture 6,446 7,655 7,678 _______ _______ _______ OTHER OPERATIONS Revenues: Rock products and sand 1,258 935 956 Oil leases and land rentals 831 679 678 Forest products 224 197 146 Other 100 80 116 _______ _______ _______ Total 2,413 1,891 1,896 Costs and expenses: Allocated Cost* 481 456 384 General and administrative, all operations 2,492 2,370 2,131 _______ _______ _______ Total 2,973 2,826 2,515 _______ _______ _______ Gross loss, other operations (560) (935) (619) _______ _______ _______ Total gross profit 5,886 6,720 7,059 _______ _______ _______ Years Ended August 31, (in thousands) 1997 1996 1995 _______ _______ _______ INTEREST & DIVIDENDS Revenue 1,137 1,033 998 Expense 444 990 1,176 _______ _______ _______ Interest & dividends, net 693 43 (178) _______ _______ _______ REAL ESTATE Revenue: Sale of real estate 11,753 551 8,026 Expenses: Cost of sales 122 151 111 Other Costs 360 343 330 _______ _______ _______ Total 482 494 441 _______ _______ _______ Gain on sale of real estate 11,271 57 7,585 _______ _______ _______ Income before income taxes $17,850 $ 6,820 $14,466 _______ _______ _______ _______ _______ _______
* Allocated expense includes ad valorem and payroll taxes, depreciation and insurance. ** Excludes capitalized maintenance cost of groves less than five years of age consisting of $875 thousand on 1,130 acres in 1997, $1.6 million on 1,648 acres in 1996 and $1.4 million on 1,718 acres in 1995. Citrus ______ Gross profit was $4.8 million in fiscal 1997, $7.6 million for fiscal 1996, and $5.4 million in 1995. Revenue from citrus sales decreased 3% during fiscal 1997, compared to fiscal 1996 ($22.3 million during fiscal 1997 vs. $22.9 million during fiscal 1996). Despite an 18% increase in production for the year (4.4 million boxes during fiscal 1997 vs. 3.7 million boxes during fiscal 1996), an offsetting 18% decline in the average market price per box ($5.09 in fiscal 1997 vs. $6.21 per box in fiscal 1996) caused the decrease. The increase in the number of boxes harvested during fiscal 1997 generated harvesting and marketing costs in excess of the prior year ($8.2 million in fiscal 1997 vs. $6.9 million in fiscal 1996). Direct production and allocated costs likewise increased as a result of the rise in production. The production increase was attributable to the addition of the first phase of the K-T Grove, combined with improved yields from maturing groves in South Florida. Revenue from citrus sales increased 17% during fiscal 1996, compared to fiscal 1995 ($22.9 million during fiscal 1996 vs. $19.7 million during fiscal 1995). This was largely attributable to an 8% increase in production for the year (3.7 million boxes during fiscal 1996 vs. 3.4 million during fiscal 1995), combined with an 8% increase in the average market price per box ($6.21 in fiscal 1996 vs. $5.80 in fiscal 1995). Direct production costs, associated with the increased yield, rose 10% during fiscal 1996. The corresponding large increase in revenues from citrus sales offset the rise in costs and generated the 40% increase in gross profit for this division. The final returns from citrus pools are not precisely determinable at year end. Returns are estimated each year based on the most current information available conservatively applied. Differences between the estimates and the final realization of revenues can be significant. Revenue collected in excess of prior year and year end estimates was $1.0 million, $1.1 million and $1.8 million during fiscal 1997, 1996 and 1995, respectively.
ACREAGE BY VARIETY AND AGE VARIETY 0-1 1-2 3-4 5-6 7-8 9-10 11-12 13-14 15-16 20+ Acres ___ ___ ___ ___ ___ ____ _____ _____ _____ ___ _____ Early: Parson Brown Oranges - - - 117 30 - - - - - 147 Hamlin Oranges - 386 170 32 30 714 - 110 239 1,335 3,016 Red Grapefruit- - - 54 - - - 48 158 169 429 White Grapefruit- - - - 318 - - - - 21 339 Tangelos - - - - - - - - - 135 135 Navel Oranges - - - 15 - - - 54 84 - 153 Mid Season: Pineapple Oranges - - 103 - - - - 18 - 467 588 Queen Oranges - - - - - - - - - 51 51 Honey Tangerines - 80 - - 45 - - - 94 - 219 Midsweet Oranges - 54 110 - - - - - - - 164 Late: Valencia Oranges - 826 310 557 329 800 - 35 165 1,225 4,247 _____ ___ ___ ___ _____ ___ ___ ___ ___ _____ _____ Totals: - 1,346 693 775 752 1,514 - 265 740 3,403 9,488
Sugarcane _________ Gross profit for fiscal 1997 was $831 thousand compared to $1.7 million in fiscal 1996 and $1.8 million in fiscal 1995. Sales revenues from sugarcane decreased 15% during fiscal 1997, compared to fiscal 1996 ($4.9 million vs. $5.9 million, respectively). During the same period, direct production and allocated costs increased by 4% ($3.0 million in fiscal 1997 vs. $2.9 million in fiscal 1996). Although the acres harvested during 1997 approximated fiscal 1996 levels (roughly 5 thousand acres each year), the number of gross tons harvested during fiscal 1997 was 15% below year ago levels (158 thousand gross tons harvested during 1997 vs. 187 thousand harvested during fiscal 1996). Poor weather conditions were the cause for the decrease in sugarcane production. Sales revenues from sugarcane decreased 3% during fiscal 1996, compared to fiscal 1995 ($5.9 million vs. $6.0 million, respectively). Direct production and allocated costs also decreased 2% during the year ($2.9 million vs. $3.0 million, respectively). The number of acres harvested and resulting yield for fiscal 1996 approximated fiscal 1995 levels, causing the relatively minor difference in operating results (5 thousand acres harvested yielded 187 thousand gross tons in fiscal 1996 vs. 5 thousand acres yielding 186 thousand gross tons during fiscal 1995). Ranching ________ The gross profit (loss) from ranch operations for fiscal 1997, 1996 and 1995 was $765 thousand, $(1.6 million), and $506 thousand, respectively. Revenues from cattle sales increased 28% during fiscal 1997, compared to fiscal 1996 ($4.9 million in fiscal 1997 vs. $3.8 million in fiscal 1996). The number of animals sold during the year increased 26% over the prior year (9,095 animals sold in fiscal 1997 vs. 7,211 in fiscal 1996). The rise is due to increased sales of feeder cattle inventories during the year, combined with a significant improvement in market prices for beef. Direct and allocated costs declined from their year ago levels ($4.1 million in fiscal 1997 vs. $5.4 million in fiscal 1996). Due to market conditions, the Company was required to write down its fiscal 1996 beef inventory to net realizable value. This adjustment totaled $909 thousand. Additionally, in fiscal 1996, the Company wrote off $400 thousand of sod costs. The charge was included in ranching costs. The sod write off was necessary because of excessive rain and subsequent weed intrusion. The Company's cattle marketing activities include retention of calves in western feedlots, contract and auction sales, and risk management contracts. Revenues from cattle sales increased 27% during fiscal 1996, compared to fiscal 1995 ($3.8 million in fiscal 1996 vs. $3.0 million in fiscal 1995). The number of animals sold increased 11% over the prior year (7,211 sold in fiscal 1996 vs. 6,482 in fiscal 1995); however, the average revenue per pound decreased 17% due to poor market conditions. Additional costs to feed calves to maturity, increased by a grain shortage, caused direct and allocated costs to increase during fiscal 1996 when compared to fiscal 1995 ($5.4 million vs. $2.4 million during fiscal 1996 and 1995, respectively). The increased costs during fiscal 1996 also included a beef inventory write down and the write off of sod costs referred to above. Other Operations ________________ Revenues from oil royalties and land rentals were $831 thousand for fiscal 1997 compared to $679 thousand for fiscal 1996 and $678 thousand for fiscal 1995. The rise during fiscal 1997 was primarily due to increased revenue as a result of the development of additional land for farming leases. Returns from rock products and sand were $1.2 million for fiscal 1997 compared to $935 thousand and $956 thousand for fiscal 1996 and 1995, respectively. The variations between each of the years is due to the overall economic situation in the construction and road building industries. Rock and sand supplies are sufficient, and no major price changes have occurred over the past 3 years. Profits from the sale of sabal palms, for landscaping purposes, during fiscal 1997 were $169 thousand compared to $197 thousand and $146 thousand for fiscal years 1996 and 1995, respectively. Additionally, the Company received $55 thousand from the sale of pulpwood during fiscal 1997. No such sales were made during fiscal 1996 or 1995. Direct and allocated expenses charged to the "Other" operations category included general and administrative and other costs not charged directly to citrus, ranching, sugarcane or forestry. These expenses totaled $3.0 million during fiscal 1997 compared to $2.8 million during fiscal 1996 and $2.5 million during fiscal 1995. The fiscal 1997 increase over 1996 was partially related to costs expended for maintenance of properties used in farm lease operations ($82 thousand). The fiscal 1996 increase over 1995 was primarily attributable to increases in employee benefits ($141 thousand), worker's compensation expense ($38 thousand) and ad valorem taxes ($82 thousand). The Florida Gulf Coast University opened its doors in August 1997. The Company is continuing its marketing and permit activities for its land which surrounds the University site. During November of 1996, the Company announced an agreement with Miromar Development, Inc. of Montreal, Canada to sell 550 acres of land surrounding the University site in Lee County for $9.35 million. The contract calls for 25% of the purchase price to be paid at closing, with the balance payable over the next four years. If the sale closes, it will generate a pretax gain of approximately $8.7 million. Additionally, the Company announced an option agreement with REJ Group, Inc. The option agreement permits the acquisition of a minimum 150 acres and a maximum of 400 acres within the 2,300 acre university village. The potential pretax gain to Alico, if the option is exercised, would vary from $8.5 million to $24.5 million, depending on the time at which the option is exercised, and the total number of acres selected. Item 8. Financial Statements and Supplementary Data. _____________________________________________________________ Independent Auditors' Report ____________________________ The Stockholders and Board of Directors Alico, Inc.: We have audited the consolidated balance sheets of Alico, Inc. and subsidiary as of August 31, 1997 and 1996, and the related consolidated statements of operations, stockholders' equity, and cash flows for each of the years in the three-year period ended August 31, 1997. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and signif- icant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Alico, Inc. and subsidiary at August 31, 1997 and 1996, and the results of their operations and cash flows for each of the years in the three-year period ended August 31, 1997, in conformity with generally accepted accounting principles. KPMG PEAT MARWICK LLP (Signature) Orlando, Florida October 10, 1997
CONSOLIDATED BALANCE SHEETS August 31, 1997 1996 _____________ ____________ ASSETS Current assets: Cash, including time deposits and other cash investments of $1,414,436 in 1997 and $1,396,193 in 1996 $ 1,459,765 $ 1,428,059 Marketable equity securities available for sale, at estimated fair value in 1997 and in 1996 (note 2) 9,195,341 6,799,590 Other marketable securities available for sale, at estimated fair value in 1997 and in 1996 (note 2) 2,217,574 2,826,435 Accounts receivable ($5,549,080 in 1997 and $7,758,469 in 1996 due from affiliate) (note 9) 7,456,937 9,432,838 Mortgages and notes receivable, current portion (note 3) 901,112 867,145 Inventories (note 4) 16,387,128 13,284,527 Other current assets 269,463 238,038 ____________ ____________ Total current assets 37,887,320 34,876,632 ____________ ____________ Other assets: Land inventories 8,345,116 7,777,942 Mortgages and notes receivable, net of current portion (note 3) 588,860 1,531,947 Investments 955,779 1,016,526 ____________ ____________ Total other assets 9,889,755 10,326,415 ____________ ____________ Property, buildings and equipment (note 5) 96,709,440 97,029,453 Less accumulated depreciation (26,763,790) (27,728,927) ____________ ____________ Net property, buildings and equipment 69,945,650 69,300,526 ____________ ____________ Total assets $117,722,725 $114,503,573 ____________ ____________ ____________ ____________ August 31, 1997 1996 ____________ ____________ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 1,158,012 $ 1,070,092 Due to profit sharing plan (note 7) 230,545 223,152 Accrued ad valorem taxes 1,253,053 1,095,427 Accrued road commitment (note 10) 212,075 1,236,340 Accrued expenses 329,772 142,047 Income taxes payable 934,895 190,639 Deferred income taxes (note 8) 869,763 1,157,169 ____________ ____________ Total current liabilities 4,988,115 5,114,866 Notes payable to a banks (note 6) 12,856,000 20,630,000 Deferred income taxes (note 8) 11,712,806 11,291,936 Deferred retirement benefits (note 7) 13,259 84,117 ____________ ____________ Total liabilities 29,570,180 37,120,919 ____________ ____________ Stockholders' equity: Preferred stock, no par value. Authorized 1,000,000 shares; issued, none - - Common stock, $1 par value. Authorized 15,000,000 shares; issued and outstanding 7,027,827 in 1997 and 1996 7,027,827 7,027,827 Unrealized gains on marketable securities (note 2) 913,059 261,686 Retained earnings 80,211,659 70,093,141 ____________ ____________ Total stockholders' equity 88,152,545 77,382,654 ____________ ____________ Total liabilities and stockholders' equity $117,722,725 $114,503,573 ____________ ____________ ____________ ____________ See accompanying notes to consolidated financial statements.
CONSOLIDATED STATEMENTS OF OPERATIONS Years Ended August 31, 1997 1996 1995 ___________ ___________ ___________ Revenue: Citrus (note 9) $22,287,006 $22,966,004 $19,673,501 Sugarcane 4,966,837 5,850,764 6,025,745 Ranch 4,875,826 3,795,612 2,952,214 Forest products 224,090 196,906 146,196 Rock products and sand 1,257,665 934,992 955,461 Oil lease and land rentals 831,254 679,039 677,712 Profit on sales of real estate 11,753,199 550,578 8,026,209 Interest and investment income 1,136,928 1,033,124 998,185 Other income 99,872 81,817 115,760 ___________ ___________ ___________ Total revenue 47,432,677 36,088,836 39,570,983 ___________ ___________ ___________ Costs and expenses (including charges from affiliate) (note 9): Citrus production, harvesting and marketing 17,436,648 15,381,924 14,261,502 Sugarcane production, harvesting and hauling 4,136,302 4,147,284 4,265,976 Ranch 4,110,969 5,429,239 2,446,117 Real estate 481,870 494,281 441,535 Interest (note 6) 444,217 990,082 1,175,599 Other, general and administrative expenses 2,972,863 2,826,422 2,514,573 ___________ ___________ ___________ Total costs and expenses 29,582,869 29,269,232 25,105,302 ___________ ___________ ___________ Income before income taxes 17,849,808 6,819,604 14,465,681 Provision for income taxes (note 8) 6,677,116 2,380,414 5,524,311 ___________ ___________ ___________ Net Income 11,172,692 $ 4,439,190 $ 8,941,370 ___________ ___________ ___________ ___________ ___________ ___________ Weighted average number of shares outstanding 7,027,827 7,027,827 7,027,827 ___________ ___________ ___________ ___________ ___________ ___________ Per share amounts: Net income $ 1.59 $ .63 $ 1.27 Dividends .15 $ .35 $ .25 See accompanying notes to consolidated financial statements.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY Unrealized Common Stock Gains On Preferred Shares Retained Securi- Stock Issued Amount Earnings ities _____ _________ __________ ___________ _______ Balances, August 31, 1994 $ - 7,027,827 $7,027,827 $60,929,277 $ - ________________________ Net income for the year ended August 31, 1995 - - - 8,941,370 - Unrealized gains on securities - - - - 264,739 Dividends paid - - - (1,756,957) - ______ _________ __________ ___________ ________ Balances, August 31, 1995 - 7,027,827 7,027,827 68,113,690 264,739 ________________________ Net income for the year ended August 31, 1996 - - - 4,439,190 - Unrealized losses on securities - - - - (3,053) Dividends paid - - - (2,459,739) - ______ _________ __________ ___________ ________ Balances, August 31, 1996 - 7,027,827 7,027,827 70,093,141 261,686 ________________________ Net income for the year ended August 31, 1997 - - - 11,172,692 - Unrealized gains on securities - - - - 651,373 Dividends paid - - - (1,054,174) - ______ _________ __________ ___________ ________ Balances, August 31, 1997 $ - 7,027,827 $7,027,827 $80,211,659 $913,059 ______ _________ __________ ___________ ________ ______ _________ __________ ___________ ________ See accompanying notes to consolidated financial statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS Years Ended August 31, 1997 1996 1995 ___________ ___________ ___________ Increase (Decrease) in Cash and Cash Investments: Cash flows from operating activities: Net Income $11,172,692 $ 4,439,190 $ 8,941,370 Adjustments to reconcile net income to cash provided by operating activities: Depreciation and amortization 4,240,117 4,136,333 4,177,199 Gain on breeding herd sales (526,266) (255,277) (185,422) Deferred income tax expense, net (259,533) (607,302) 2,906,324 Deferred retirement benefits (63,465) (130,828) (213,796) Net gain on sale of marketable securities (414,669) (128,473) (14,511) Road commitment payments (1,024,265) (401,698) (465,013) Loss on sale of property and equipment 424,915 305,485 157,334 Gain on real estate sales (11,957,753) (379,734) (8,011,703) Increase in land inventories (567,174) (455,202) (565,191) Cash provided by (used for) changes in: Accounts receivable 1,975,901 (2,443,469) (53,005) Inventories (2,845,384) (227,391) (2,375,786) Other assets (31,425) 94,118 14,758 Accounts payable and accrued expenses 433,271 126,145 (455,575) Income taxes payable 744,256 (63,754) 198,090 ___________ ___________ ___________ Net cash provided by operating activities 1,301,218 4,008,143 4,055,073 ___________ ___________ ___________ Years Ended August 31, 1997 1996 1995 ____________ ____________ ___________ Cash flows from investing activities: Purchases of property and equipment (5,752,072) (7,141,814) (8,340,284) Proceeds from disposals of property and equipment 608,658 364,398 233,813 Proceeds from sale of real estate 12,060,060 420,364 8,322,300 Purchases of other assets (100,896) (215,575) (115,108) Proceeds from the sale of other assets 161,643 124,834 - Purchases of marketable securities (4,694,859) (3,848,245) (1,900,519) Proceeds from sales of marketable securities 4,367,008 3,756,639 1,622,586 Collection of mortgages and notes receivable 909,120 695,321 719,631 ___________ __________ __________ Net cash provided by (used for) investing activities 7,558,662 (5,844,078) 542,419 ___________ __________ __________ Cash flows from financing activities: Proceeds of bank loans 18,749,000 17,316,000 17,666,002 Repayment of loans (26,523,000) (12,741,000) (20,325,000) Dividends paid (1,054,174) (2,459,739) (1,756,957) ___________ ___________ __________ Net cash provided by (used for) financing activities (8,828,174) 2,115,261 (4,415,955) ___________ ___________ __________ Net increase in cash and cash investments 31,706 279,326 181,537 Cash and Cash investments: At beginning of year 1,428,059 1,148,733 967,196 ___________ ___________ ___________ At end of year $ 1,459,765 $ 1,428,059 $ 1,148,733 ___________ ___________ ___________ ___________ ___________ ___________ Supplemental disclosures of cash flow information: Cash paid for interest, net of amount capitalized $ 396,988 $ 886,239 $ 1,079,939 ___________ ___________ ___________ ___________ ___________ ___________ Cash paid for income taxes $ 6,183,310 $ 3,186,861 $ 2,419,600 ___________ ___________ ___________ ___________ ___________ ___________ See accompanying notes to consolidated financial statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Years Ended August 31, 1997, 1996 and 1995 (1) Summary of Significant Accounting Policies __________________________________________ (a) Basis of Consolidated Financial Statement Presentation ______________________________________________________ The accompanying financial statements include the accounts of Alico, Inc. (the Company) and its wholly owned subsidiary, Saddlebag Lake Resorts, Inc. (Saddlebag), after elimination of all significant intercompany balances and transactions. (b) Revenue Recognition ___________________ Income from sales of citrus under marketing pool agreements is recognized at the time the crop is harvested. The revenue is based on the Company's estimates of the amounts to be received as the sales of pooled products are completed. Fluctuation in the market prices for citrus fruit has caused the Company to recognize additional revenue from the prior year's crop totaling $1,007,211, $1,087,921, and $1,770,146 during fiscal years 1997, 1996 and 1995, respectively. (c) Real Estate ___________ Real estate sales are recorded under the accrual method of accounting. Retail land sales are not recognized until payments received, including interest, aggregate 10 percent of the contract sales price for residential real estate or 20 percent for commercial real estate. Sales are discounted to yield the market rate of interest where the stated rate is less than the market rate. The recorded valuation discounts are realized as the balances due are collected. In the event of early liquidation, interest is recognized on the simple interest method. Tangible assets that are purchased during the period to aid in the sale of the project as well as costs for services performed to obtain regulatory approval of the sales are capitalized as land and land improvements to the extent they are estimated to be recoverable from the sale of the property. Land and land improvement costs are allocated to individual parcels on a per lot basis which approximates the relative sales value method. (1), Continued The Company has entered into an agreement with a real estate consultant to assist in obtaining the necessary regulatory approvals for the development and marketing of a tract of raw land. The marketing costs under this agreement are being expensed as incurred. The costs incurred to obtain the necessary regulatory approvals are capitalized into land costs when paid. These costs will be expensed as cost of sales when the underlying real estate is sold. (d) Marketable Securities Available for Sale ________________________________________ For the year ending August 31, 1995, the Company adopted Statement of Financial Accounting Standards (SFAS) No. 115 "Accounting for Certain Investments in Debt and Equity Securities". Marketable securities available for sale are carried at the aggregate estimated fair value of the portfolio. Aggregate net unrealized investment gains or losses are recorded net of related deferred taxes in a separate component of stockholders' equity until realized. Fair value for debt and equity investments is based on quoted market prices at the reporting date for those or similar investments. The cost of all marketable securities available for sale are determined on the specific identification method. (e) Inventories ___________ Beef cattle inventories are stated at the lower of cost or market. The cost of the beef cattle inventory is based on the accumulated cost of developing such animals for sale. Unharvested crops are stated at the lower of cost or market. The cost for unharvested crops is based on accumulated production costs incurred during the eight month period from January 1 through August 31. (f) Property, Buildings and Equipment _________________________________ Property, buildings and equipment are stated at cost. Properties acquired from the Company's predecessor corporation in exchange for common stock issued in 1960, at the inception of the Company, are stated on the basis of cost to the predecessor corporation. Property acquired as part of a land exchange trust is valued at the carrying value of the property transferred to the trust. The breeding herd consists of purchased animals and animals raised on the ranch. Purchased animals are stated at cost. The cost of animals raised on the ranch is based on the accumulated cost of developing such animals for productive use. Depreciation for financial reporting purposes is computed on straight-line and accelerated methods over the estimated useful lives of the various classes of depreciable assets. (g) Income Taxes ____________ The Company accounts for income taxes under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in in- come in the period that includes the enactment date. (h) Earnings Per Share __________________ Earnings per share has been computed by dividing net income by the weighted average number of common shares outstanding during the year. (i) Cash Flows __________ For purposes of the cash flows, cash and cash investments include cash on hand and amounts due from banks with an original maturity of less than three months. (j) Reclassifications _________________ Certain amounts from 1996 and 1995 have been reclassified to conform to the 1997 presentation. (k) Use of Estimates ________________ In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities. Actual results could differ significantly from those estimates. Although some variability is inherent in these estimates, management believes that the amounts provided are adequate. (l) Financial Instruments and Accruals __________________________________ The carrying amounts in the consolidated balance sheets for accounts receivable, accounts payable and accrued expenses approximate fair value, because of the immediate or short term maturity of these items. The carrying amounts reported for the Company's long-term debt approximate fair value, because the instrument is a variable rate note which reprices frequently. (2) Marketable Securities Available for Sale ________________________________________ The Company has classified 100% of its investments in marketable securities as available-for-sale and, as such, the securities are carried at estimated fair value. Any unrealized gains and losses, net of related deferred taxes, are recorded as a net amount in a separate component of stock- holders' equity until realized. The amortized cost and estimated fair values of marketable securities available for sale at August 31, 1997 and 1996 (in thousands) were as follows:
1997 1996 __________________________________________ __________________________________________ Gross Estimated Gross Estimated Unrealized Market Unrealized Market Cost Gains Losses Value Cost Gains Losses Value __________ ________ ________ __________ __________ ________ ________ __________ Equity securities $7,793 $1,450 $48 $ 9,195 $6,486 $421 $107 $6,800 Debt securities 2,155 76 13 2,218 2,721 119 14 2,826 ______ ______ ___ _______ ______ ____ ____ ______ Marketable securities available for sale $9,948 $1,526 $61 $11,413 $9,207 $540 $121 $9,626 ______ ______ ___ _______ ______ ____ ____ ______ ______ ______ ___ ______ ______ ____ ____ ______ At August 31, 1997, debt instruments (net of mutual funds of $1,040,007) are collectible as follows: $2,000 within one year, $164,000 between one and five years, $348,381 between five and ten years, and $601,102 thereafter.
(3) Notes Receivable ________________ Notes receivable include mortgage and other notes receivable. Mortgage notes receivable arose principally from real estate sales. The balances (in thousands) at August 31, 1997 and 1996 are as follows:
1997 1996 ______ ______ Mortgage notes receivable on retail land sales, net $ 383 $ 448 Mortgage notes receivable on bulk land sales 936 1,735 Other notes receivable 171 216 ______ ______ Total mortgage notes receivable 1,490 2,399 Less current portion 901 867 ______ ______ Non-current portion $ 589 $1,532 ______ ______ ______ ______
At August 31, 1997, substantially all contracts and mortgages on retail land sales were collectible over periods ranging from 1 to 10 years with expected maturities as follows: $45 thousand in 1998, $68 thousand in 1999, $59 thousand in 2000, $53 thousand in 2001, $50 thousand in 2002, and $108 thousand thereafter. At August 31, 1997, notes receivable, other than those from retail land sales, were collectible over periods ranging from 1 to 4 years with expected maturities as follows: $856 thousand in 1998, $178 thousand in 1999, $8 thousand in 2000, and $65 thousand in 2001. (4) Inventories ___________ A summary of the Company's inventories (in thousands) at August 31, 1997 and 1996 is shown below:
1997 1996 _______ _______ Unharvested fruit crop on trees $ 6,909 $ 7,064 Unharvested sugarcane 2,322 2,231 Beef cattle 6,993 3,937 Sod 163 53 _______ _______ Total inventories $16,387 $13,285 _______ _______ _______ _______
Subject to prevailing market conditions, the Company may hedge up to 50% of its beef inventory by entering into cattle futures contracts to reduce exposure to changes in market prices. The Company has designated these agreements as a hedge and, therefore, any gains or losses anticipated under these agreements will be deferred, with the cost of the related cattle being adjusted when the contracts are settled. (5) Property, Buildings and Equipment _________________________________ A summary of the Company's property, buildings and equipment (in thousands) at August 31, 1997 and 1996 is shown below:
Estimated Use- 1997 1996 ful Lives _______ _______ ___________ Breeding herd $12,127 $13,184 5-7 years Buildings 2,973 3,038 5-40 years Citrus trees 19,820 20,109 22-40 years Sugarcane 2,768 2,651 4-15 years Equipment and other facilities 24,477 24,624 3-40 years _______ _______ Total depreciable properties 62,165 63,606 Less accumulated depreciation 26,763 27,729 _______ _______ Net depreciable properties 35,402 35,877 Land and land improvements 34,544 33,424 _______ _______ Net property, buildings and equipment $69,946 $69,301 _______ _______ _______ _______
The Company's citrus trees, fruit crop, unharvested sugarcane and cattle are partially uninsured. (6) Indebtedness ____________ The Company has unsecured financing agreements with commercial banks that permit the Company to borrow up to $3,000,000 which is due on demand and up to $27,000,000 which is due in January 1999. Under these agreements, there was no current debt as of August 31, 1997 and 1996. The total amount of long-term debt under this agreement at August 31, 1997 and 1996 was $12,856,000 and $20,630,000 respectively. Interest cost expensed and capitalized (in thousands) during the three years ended August 31, 1997, 1996 and 1995 was as follows:
1997 1996 1995 ______ ______ ______ Interest expense $ 444 $ 990 $1,176 Interest capitalized 618 703 576 ______ ______ ______ Total interest cost $1,062 $1,693 $1,752 ______ ______ ______ ______ ______ ______
(7) Employee Benefit Plans ______________________ The Company has a profit sharing plan covering substantially all employees. The plan was established under Internal Revenue Code Section 401(k). Contributions made to the profit sharing plan were $230,545, $223,152 and $217,968 for the years ended August 31, 1997, 1996 and 1995, respectively. Certain officers and employees also have employment contracts for additional retirement benefits, the cost of which is accruable on a present value basis over the remaining term of the employment agreements. The lives of such officers and employees have been insured as a means of funding such additional benefits. The accrued pension liability for these additional retirement benefits at August 31, 1997 and 1996 was $3,133 and $56,088, respectively. Additionally, the Company implemented a nonqualified defined benefit retirement plan covering the officers and other key management personnel of the Company. The plan is being funded by the purchase of insurance contracts. The accrued pension liability for the nonqualified defined benefit retirement plan at August 31, 1997 and 1996 was $10,126 and $28,029, respectively. Pension expenses for the additional retirement benefits were approximately $217,000, $191,000 and $167,000 for the years ended August 31, 1997, 1996 and 1995, respectively. (8) Income Taxes ____________ The provision for income taxes (in thousands) for the years ended August 31, 1997, 1996 and 1995 is summarized as follows:
1997 1996 1995 ______ ______ ______ Current: Federal income tax $5,919 $1,974 $1,980 State income tax 1,000 353 322 ______ ______ ______ 6,919 2,327 2,302 ______ ______ ______ Deferred: Federal income tax (207) 48 2,911 State income tax (35) 5 311 ______ ______ ______ (242) 53 3,222 ______ ______ ______ Total provision for income taxes $6,677 $2,380 $5,524 ______ ______ ______ ______ ______ ______
Following is a reconciliation of the expected income tax expense computed at the U.S. Federal statutory rate of 34% and the actual income tax provision (in thousands) for the years ended August 31, 1997, 1996 and 1995:
1997 1996 1995 ______ ______ ______ Expected income tax $6,069 $2,319 $4,918 Increase (decrease) resulting from: State income taxes, net of federal benefit 648 248 525 Nontaxable interest and dividends (120) (174) (180) Other reconciling items, net 80 (13) 261 ______ ______ ______ Total provision for income taxes $6,677 $2,380 $5,524 ______ ______ ______ ______ ______ ______
(8), Continued Some items of revenue and expense included in the statement of operations may not be currently taxable or deductible on the income tax returns. Therefore, income tax assets and liabilities are divided into a current portion, which is the amount attributable to the current year's tax return, and a deferred portion, which is the amount attributable to another year's tax return. The revenue and expense items not currently taxable or deductible are called temporary differences. At August 31, 1997 the Company had an unused charitable contribution carryover totaling $8,524,520. Management estimates that $1,000,000 will be used to reduce taxable income over the next three years. As a result, the estimated unusable portion of the carryover has been set up as the valuation amount in the deferred tax asset schedule below. The contri- bution carryover expires in 2000. The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are presented below (in thousands):
1997 1996 _______ _______ Deferred Tax Assets: Contribution carryover $(3,103) $(3,851) Less valuation allowance 2,727 3,287 _______ _______ Net contribution carryover (376) (564) Beef cattle inventory (131) (136) Pension (84) (116) Prepaid sales commissions (489) - Other (133) (32) _______ _______ Total gross deferred tax assets (1,213) (848) _______ _______ (8), Continued 1997 1996 _______ _______ Deferred Tax Liabilities: Revenue recognized from citrus and sugarcane 432 999 Deferred revenues 3,011 3,134 Property and equipment (principally due to depreciation and soil and water deductions) 9,265 8,208 Mortgage notes receivable 348 643 Other 740 313 _______ _______ Total gross deferred tax liabilities 13,796 13,297 _______ _______ Net deferred income tax liabilities $12,583 $12,449 _______ _______ _______ _______
The Company is currently under examination by the Internal Revenue Service for the years ended August 31, 1991, 1992, 1993 and 1994. When the examinations are resolved, any income taxes due will become currently payable. However, the majority of the proposed adjustments relate to the timing of certain income and expense items already provided for in the Company's deferred tax liability accounts. Previously the Company had been under audit for the year ended August 31, 1990. A final settlement was reached in August of 1997. Payments totaling approximately $1.4 million resulted in a refund due of approximately $80 thousand. The items settled related to the timing of recognition of certain items previously expensed. The aforementioned payments increased interest expense by $124,784 and $263,000 during the fiscal years ended August 31, 1995 and 1996, respectively. The adjustments proposed to date for the years ended August 31, 1991 and 1992 would potentially result in $3.3 million of additional income tax payments. Management anticipates a settlement regarding these years to occur within the next twelve months. No adjustments have yet been proposed for the years ended August 31, 1993 and 1994. (9) Related Party Transactions __________________________ Citrus ______ Citrus revenues of $20,065,303, $20,386,090 and $17,398,420 were recognized for a portion of citrus crops sold under a marketing agreement with Ben Hill Griffin, Inc. (Griffin) for the years ended August 31, 1997, 1996 and 1995, respectively. Griffin is the owner of 49.71 percent of the Company's common stock. Accounts receivable, resulting from citrus sales, include amounts due from Griffin totaling $5,549,080 and $7,758,469 at August 31, 1997 and 1996, respectively. These amounts represent estimated revenues to be received periodically under pooling agreements as the sale of pooled products is completed. Harvesting, marketing, and processing costs, related to the citrus sales noted above, totaled $7,335,825, $6,099,481, and $5,732,506 for the years ended August 31, 1997, 1996 and 1995, respectively. In addition, Griffin provided the harvesting services for citrus sold to an unrelated processor. The aggregate cost of these services was $779,715, $767,144 and $764,082 for the years ended August 31, 1997, 1996 and 1995, respectively. The accompanying balance sheets include accounts payable to Griffin for citrus production, harvesting and processing costs in the amount of $383,614 and $484,789 at August 31, 1997 and 1996, respectively. Other Transactions __________________ The Company purchased fertilizer and other miscellaneous supplies, services, and operating equipment from Griffin, on a competitive bid basis, for use in its cattle, sugarcane, sod and citrus operations. Such purchases totaled $4,451,224, $5,535,086 and $4,190,784 during the years ended August 31, 1997, 1996 and 1995, respectively. (10) Commitment __________ During October 1992 the Company entered into an agreement to donate land, improvements and other items, to the State of Florida, to be used as a site for a new university. The gift included 975 acres of land, road construction, engineering and planning services, assistance with utility costs and academic chairs. The commitment was recorded as a contribution in May 1994 when the title to the land was transferred. Costs related to road construction have been accrued and capitalized into land. Other costs will be expensed as incurred. (11) Business Segment Information ____________________________ The Company is primarily engaged in agricultural operations, which are subject to risk including market prices, weather conditions and environmental concerns. The Company is also engaged in retail land sales and, from time to time, sells real estate considered surplus to its operating needs. Information about the Company's operations (in thousands) for the years ended August 31, 1997, 1996 and 1995 is summarized as follows:
1997 1996 1995 ________ ________ ________ Revenues: Agriculture: Citrus $ 22,287 $ 22,966 $ 19,674 Sugarcane 4,967 5,851 6,026 Ranch 4,876 3,796 2,952 ________ ________ ________ Total agriculture 32,130 32,613 28,652 Real estate 11,753 551 8,026 General corporate 3,550 2,925 2,893 ________ ________ ________ Consolidated total $ 47,433 $ 36,089 $ 39,571 ________ ________ ________ ________ ________ ________ Operating income (loss): Agriculture: Citrus $ 4,850 $ 7,584 $ 5,412 Sugarcane 831 1,704 1,760 Ranch 765 (1,633) 506 ________ ________ ________ Total agriculture 6,446 7,655 7,678 Real estate 11,271 56 7,585 General corporate 3,550 2,925 2,893 ________ ________ ________ Total operating income 21,267 10,636 18,156 Interest expense (444) (990) (1,176) General corporate expenses (2,973) (2,826) (2,514) ________ ________ ________ Income before income taxes $ 17,850 $ 6,820 $ 14,466 ________ ________ ________ ________ ________ ________ 1997 1996 1995 ________ ________ ________ Capital expenditures: Agriculture: Citrus $ 1,829 $ 2,734 $ 4,301 Sugarcane 1,890 967 743 Ranch 1,159 2,786 2,189 Sod 39 54 78 Farm lands 340 365 155 Heavy equipment 91 89 574 ________ ________ ________ Total agriculture 5,348 6,995 8,040 General corporate 404 147 300 ________ ________ ________ Consolidated total $ 5,752 $ 7,142 $ 8,340 ________ ________ ________ ________ ________ ________ 1997 1996 1995 ________ ________ ________ Depreciation, depletion and amortization: Agriculture: Citrus $ 1,818 $ 1,706 $ 1,731 Sugarcane 909 925 937 Ranch 1,101 1,040 1,035 Sod 17 49 81 Farm lands 19 11 5 Heavy equipment 306 311 295 ________ ________ ________ Total agriculture 4,170 4,042 4,084 General corporate 70 94 93 ________ ________ ________ Consolidated total $ 4,240 $ 4,136 $ 4,177 ________ ________ ________ ________ ________ ________ Identifiable assets: Agriculture: Citrus $ 45,361 $ 47,874 $ 43,449 Sugarcane 23,746 22,846 22,154 Ranch 16,355 13,710 12,619 Sod 379 247 1,474 Farm lands 1,561 1,240 887 Heavy equipment 1,246 1,461 1,699 ________ ________ ________ Total agriculture 88,648 87,378 82,282 Real estate 9,835 10,177 10,417 General corporate 19,240 16,949 16,308 ________ ________ ________ Consolidated total $117,723 $114,504 $109,007 ________ ________ ________ ________ ________ ________
Identifiable assets represents assets on hand at year-end which are allocable to a particular segment either by their direct use or by allocation when used jointly by two or more segments. General corporate assets consist principally of cash, temporary investments, mortgage notes receivable and property and equipment used in general corporate business.
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) Summarized quarterly financial data (in thousands except for per share amounts) for the years ended August 31, 1997 and August 31, 1996, is as follows: Quarters Ended November 30, Feb. 28, Feb. 29, May 31, August 31, 1996 1995 1997 1996 1997 1996 1997 1996 _______ _______ _______ _______ _______ _______ _______ _______ Revenue: Citrus $ 2,093 $ 4,170 $ 9,826 $ 7,133 $ 8,527 $ 8,721 $ 1,841 $ 2,942 Sugarcane 1,078 1,386 3,518 4,022 153 355 218 88 Ranch 838 1,535 1,661 196 1,741 1,533 636 532 Property sales 24 17 11,384 80 15 91 330 363 Interest 244 352 351 260 353 234 189 187 Other revenues 535 364 494 429 661 506 723 592 _______ _______ _______ _______ _______ _______ _______ _______ Total revenue 4,812 7,824 27,234 12,120 11,450 11,440 3,937 4,704 _______ _______ _______ _______ _______ _______ _______ _______ Costs and expenses: Citrus 1,789 3,375 8,596 5,631 5,916 5,090 1,136 1,286 Sugarcane 828 1,051 3,263 3,147 - - 45 (51) Ranch 566 1,529 1,344 144 1,642 3,198 559 558 Interest 249 136 60 173 73 487 62 194 Other 816 748 744 866 673 585 1,222 1,122 _______ _______ _______ _______ _______ _______ _______ _______ Total costs and expenses 4,248 6,839 14,007 9,961 8,304 9,360 3,024 3,109 _______ _______ _______ _______ _______ _______ _______ _______ Income before income taxes 564 985 13,227 2,159 3,146 2,080 913 1,595 Provision for income taxes 182 338 4,970 759 1,154 857 371 426 _______ _______ _______ _______ _______ _______ _______ _______ Net income $ 382 $ 647 $ 8,257 $ 1,400 $ 1,992 $ 1,223 $ 542 $ 1,169 _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ Net income per share $ .06 $ .09 $ 1.17 $ .20 $ .28 $ .17 $ .08 $ .17 _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ The weighted average number of shares outstanding totaled 7,027,827 shares during each of the periods presented above.
Item 9. Disagreements on Accounting and Financial Disclosure. _______________________________________________________________________ There were no disagreements on accounting and financial disclosures. PART III ________ Item 10. Directors and Executive Officers of the Registrant. _____________________________________________________________________ For information with respect to the executive officers of the registrant, see "Executive Officers of the Registrant" at the end of Part I of this report. The information called for regarding directors is incorporated by reference to Proxy Statement dated November 10, 1997. Item 11. Executive Compensation. _________________________________________ Item 12. Security Ownership of Certain Beneficial Owners and _____________________________________________________________________ Management. ___________ Item 13. Certain Relationships and Related Transactions. _________________________________________________________________ Information called for by Items 11, 12 and 13 is incorporated by reference to Proxy Statement dated November 10, 1997. PART IV _______ Item 14. Exhibits, Financial Statement Schedules and Reports _____________________________________________________________________ on Form 8-K. ____________ (a)1. Financial Statements: ____________________ Included in Part II, Item 8 of this Report Report of Independent Certified Public Accountants Consolidated Balance Sheets - August 31, 1997 and 1996 Consolidated Statements of Operations - For the Years Ended August 31, 1997, 1996 and 1995 Consolidated Statements of Stockholders' Equity - For the Years Ended August 31, 1997, 1996 and 1995 Consolidated Statements of Cash Flows - For the Years Ended August 31, 1997, 1996 and 1995 (a)2. Financial Statement Schedules: _____________________________ Selected Quarterly Financial Data - For the Years Ended August 31, 1997 and 1996 - Included in Part II, Item 8 Schedule I - Marketable Securities and Other Investments - For Year Ended August 31, 1997 Schedule V - Property, Plant and Equipment - For the Years Ended August 31, 1997, 1996 and 1995 Schedule VI - Reserves for Depreciation, Depletion and Amortization of Property, Plant and Equipment - For the Years Ended August 31, 1997, 1996 and 1995 Schedule IX - Supplementary Income Statement Information - For the Years Ended August 31, 1997, 1996 and 1995 All other schedules not listed above are not submitted because they are not applicable or not required or because the required information is included in the financial statements or notes thereto. (a)3. Exhibits: ________ (3) Articles of Incorporation: * Schedule I - Restated Certificate of Incorporation, Dated February 17, 1972 Schedule II - Certificate of Amendment to Certificate of Incorporation, Dated January 14, 1974 Schedule III - Amendment to Articles of Incorporation, Dated January 14, 1987 Schedule IV - Amendment to Articles of Incorporation, Dated December 27, 1988 Schedule V - By-Laws of Alico, Inc., Amended to September 13, 1994 (4) Instruments Defining the Rights of Security Holders, Including Indentures - Not Applicable (9) Voting Trust Agreement - Not Applicable (10) Material Contracts - Citrus Processing and Marketing Agreement with Ben Hill Griffin, Inc., dated November 2, 1983, a Continuing Contract. * (11) Statement - Computation of Per Share Earnings (12) Statement - Computation of Ratios (18) Change in Accounting Principal - Not Applicable (19) Annual Report to Security Holders - By Reference (21) Subsidiaries of the Registrant - Not Applicable (22) Published Report Regarding Matters Submitted to Vote of Security Holders - Not Applicable (23) Consents of Experts and Counsel - Not Applicable (24) Power of Attorney - Not Applicable (28) Information From Reports Furnished to State Insurance Regulatory Authorities - Not Applicable (99) Additional Exhibits - None (b)3. Reports on Form 8-K: ___________________ Form 8-K dated December 3, 1996 regarding re-election of Directors and election of Officers. * Material has been filed with Securities and Exchange Commission and NASDAQ and may be obtained upon request.
ALICO, INC. SCHEDULE I Marketable Securities and Other Investments August 31, 1997 COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E ________ ________ ________ ________ ________ Amount of Which Each Portfolio of Equity Secu- rity Issues and Number of Shares or Each Other Se- Name of Issuer Units-Principal Market Value of Each curity Issue and Title of Amounts of Bonds Issue at Balance Sheet Carried in the Each Issue and Notes Cost of Each Issue Date Balance Sheet ______________ ________________ __________________ ______________________ _______________ Municipal Bonds $ 751,512 $ 751,512 $ 794,872 $ 794,872 Mutual Funds $4,607,653 4,607,653 5,833,612 5,833,612 Preferred Stocks 106,900 2,728,319 2,794,879 2,794,879 Common Stocks 35,778 1,282,737 1,416,313 1,416,313 Other Investments $ 578,591 578,591 573,239 573,239 __________ ___________ ___________ Total: $9,948,812 $11,412,915 $11,412,915 __________ ___________ ___________ __________ ___________ ___________
ALICO, INC. SCHEDULE V PROPERTY, PLANT AND EQUIPMENT COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F ________ _________ _________ ___________ ______________ __________ Balance Other Changes Balance at Beginning Additions Retirements Debit and/or Close of Description of Period at Cost or Sales Credit-Describe Period ___________ _________ _________ ___________ ________________ ____________ For Year Ended August 31, 1997 ______________________________ Land $14,504,916 $ 334,165 $ 470,119 $ $14,368,962 Roads 745,525 207,656 953,181 Agricultural Land Preparation 9,906 9,906 Forest Improvements 100,026 100,026 Pasture Improvements 2,801,321 155,453 2,956,774 Buildings 3,037,575 6,007 70,096 2,973,486 Feeding and Watering Facilities for Cattle Herd 36,067 1,900 34,167 Water Control Facilities 871,337 866,000 5,337 Fences 270,133 34,484 12,420 292,197 Cattle Pens 134,955 134,955 Citrus Groves, Including Irrigation Systems 38,634,654 1,532,126 1,744,166 38,422,614 Equipment 6,999,963 563,979 283,365 7,280,577 Breeding Herd 13,184,291 935,625 1,993,227 12,126,689 Sugarcane-Land Preparation, Etc. 14,304,486 1,603,607 630,792 15,277,301 Sod-Land Preparation, Etc. 141,922 39,016 180,938 Farm Land Preparation 1,252,376 339,954 1,592,330 ___________ __________ __________ ________________ ___________ $97,029,453 $5,752,072 $6,072,085 $ 0 $96,709,440 ___________ __________ __________ ________________ ___________ ___________ __________ __________ ________________ ___________
ALICO, INC. SCHEDULE V PROPERTY, PLANT AND EQUIPMENT COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F ________ _________ _________ ___________ ______________ ____________ Balance Other Changes Balance at Beginning Additions Retirements Debit and/or Close of Description of Period at Cost or Sales Credit-Describe Period ___________ _________ _________ __________ _______________ ___________ For the Year Ended August 31, 1996 __________________________________ Land $14,409,797 $ 133,396 $ 38,277 $ $14,504,916 Roads 489,213 256,312 745,525 Agricultural Land Preparation 9,906 9,906 Forest Improvements 100,026 100,026 Pasture Improvements 2,363,419 434,194 3,708 * 2,801,321 Buildings 3,034,835 82,938 80,198 3,037,575 Feeding and Watering Facilities for Cattle Herd 36,486 419 36,067 Water Control Facilities 871,337 871,337 Fences 228,811 47,066 5,744 270,133 Cattle Pens 155,219 20,264 134,955 Citrus Groves, Including Irrigation Systems 36,176,961 2,573,697 116,004 38,634,654 Equipment 6,815,062 328,372 143,471 6,999,963 Breeding Herd 12,094,179 2,165,878 1,075,766 13,184,291 Sugarcane-Land Prep.,Etc. 12,907,640 715,188 681,658 * 14,304,486 Sod-Land Preparation,Etc. 1,118,258 44,615 335,585 (685,366)* 141,922 Farm Land Preparation 892,218 360,158 1,252,376 ___________ __________ __________ ___________ ___________ $91,703,367 $7,141,814 $1,815,728 $ 0 $97,029,453 ___________ __________ __________ ___________ ___________ ___________ __________ __________ ___________ ___________ * Reclassification (/TABLE>
ALICO, INC. SCHEDULE V PROPERTY, PLANT AND EQUIPMENT COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F ________ _________ _________ __________ _______________ ___________ Balance Other Changes Balance at Beginning Additions Retirements Debit and/or Close of Description of Period at Cost or Sales Credit-Describe Period ___________ _________ _________ ___________ _______________ ___________ For Year Ended August 31, 1995 ______________________________ Land $14,574,228 $ 159,902 $ 324,333 $14,409,797 Roads 403,107 86,106 489,213 Agricultural Land Preparation 9,906 9,906 Forest Improvements 102,818 2,792 100,026 Pasture Improvements 1,997,036 366,383 2,363,419 Buildings 2,907,306 147,043 19,514 3,034,835 Feeding and Watering Facilities for Cattle Herd 32,886 3,600 36,486 Water Control Facilities 871,337 871,337 Fences 188,806 79,107 39,102 228,811 Cattle Pens 118,149 44,658 7,588 155,219 Citrus Groves, Including Irrigation Systems 32,761,874 3,611,450 196,363 36,176,961 Equipment 5,980,970 1,386,613 552,521 6,815,062 Breeding Herd 10,979,640 1,622,552 508,013 12,094,179 Sugarcane-Land Preparation,Etc. 12,761,667 629,125 483,152 12,907,640 Sod-Land Preparation,Etc. 1,080,849 48,305 10,896 1,118,258 Farm Land Preparation 736,778 155,440 892,218 ___________ __________ __________ _________________ ___________ $85,507,357 $8,340,284 $2,144,274 $0 $91,703,367 ___________ __________ __________ _________________ ___________ ___________ __________ __________ _________________ ___________
ALICO, INC. SCHEDULE VI Reserves for Depreciation, Depletion and Amortization of Property, Plant and Equipment ______________________________________________________________________________________ COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F ________ __________ __________ ___________ ______________ ___________ Additions Balance Charged To Other Changes Balance at Beginning Profit & Loss Add (Deduct) Close of Description of Period of Income Retirements Describe ___________ __________ __________ ___________ _______________ __________ For Year Ended August 31, 1997 ______________________________ Buildings $ 1,152,448 $ 139,550 $ 70,096 $ 1,221,902 Feeding and Watering Facilities for Cattle Herd 24,044 1,915 1,900 24,059 Water Control Facilities 866,000 866,000 0 Fences 112,016 24,421 12,420 124,017 Cattle Pens 43,362 13,951 57,313 Citrus Groves, Including Irrigation Systems 10,189,551 1,448,900 1,744,166 9,894,285 Equipment 4,106,878 822,968 283,365 4,646,481 Breeding Herd 7,518,756 939,309 1,596,516 6,861,549 Roads 10,731 21,366 32,097 Sugarcane-Land Preparation,Etc. 3,683,734 807,626 630,791 3,860,569 Sod-Land Preparation,Etc. 2,054 1,903 3,957 Farm Land Preparation 19,353 18,208 37,561 ___________ __________ __________ _______ ___________ $27,728,927 $4,240,117 $5,205,254 $0 $26,763,790 ___________ __________ __________ _______ ___________ ___________ __________ __________ _______ ___________
ALICO, INC. SCHEDULE VI Reserves for Depreciation, Depletion and Amortization of Property, Plant and Equipment ______________________________________________________________________________________ COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F ________ __________ __________ _____________ ___________ ____________ Additions Balance Charged to Other Changes Balance at Beginning Profit & Loss Add (Deduct) Close of Description of period of Income Retirements Describe Period ___________ _________ _____________ _____________ _____________ ___________ For the Year Ended August 31, 1996 __________________________________ Buildings $ 1,092,981 $ 139,665 $ 80,198 $ $ 1,152,448 Feeding and Watering Facilities for Cattle Herd 21,741 2,722 419 24,044 Water Control Facilities 866,000 866,000 Fences 96,330 21,430 5,744 112,016 Cattle Pens 49,676 13,951 20,265 43,362 Citrus Groves, Including Irrigation Systems 9,002,178 1,303,376 116,003 10,189,551 Equipment 3,329,601 904,448 127,171 4,106,878 Breeding Herd 7,559,946 867,887 909,077 7,518,756 Roads 0 10,731 10,731 Sugarcane-Land Prep.,Etc. 2,752,281 827,397 104,056 * 3,683,734 Sod-Land Preparation,Etc. 174,201 33,524 101,615 (104,056)* 2,054 Farm Land Preparation 8,151 11,202 19,353 ___________ __________ __________ _________ ___________ $24,953,086 $4,136,333 $1,360,492 $ 0 $27,728,927 ___________ __________ __________ _________ ___________ ___________ __________ __________ _________ ___________ * Reclassification
ALICO, INC. SCHEDULE VI Reserves for Depreciation, Depletion and Amortization of Property, Plant and Equipment ______________________________________________________________________________________ COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F ________ __________ _____________ ___________ ___________ __________ Additions Balance Charged to Other Changes Balance at Beginning Profit & Loss Add (Deduct) Close of Description of Period or Income Retirements Describe Period ___________ _________ _____________ ___________ ___________ __________ For the Year Ended August 31, 1995 __________________________________ Forest Improvements $ 2,792 $ $ 2,792 $ 0 Buildings 974,796 137,700 19,515 1,092,981 Feeding and Watering Facilities for Cattle Herd 19,034 2,707 21,741 Water Control Facilities 707,510 158,490 866,000 Fences 121,246 14,187 39,103 96,330 Cattle Pens 45,006 12,258 7,588 49,676 Citrus Groves, Including Irrigation System 7,834,438 1,364,102 196,362 9,002,178 Equipment 2,924,537 866,991 461,927 3,329,601 Breeding Herd 7,120,195 855,410 415,659 7,559,946 Sugarcane-Land Preparation, Etc. 2,521,318 714,115 483,152 2,752,281 Sod-Land Preparation, Etc. 129,539 46,514 1,852 174,201 Farm Land Preparation 3,426 4,725 8,151 ___________ __________ __________ __________ ___________ $22,403,837 $4,177,199 $1,627,950 $0 $24,953,086 ___________ __________ __________ __________ ___________ ___________ __________ __________ __________ ___________
ALICO, INC. SCHEDULE IX ____________ SUPPLEMENTARY INCOME STATEMENT INFORMATION __________________________________________ ____________________________________________________________________________________________________ COLUMN A COLUMN B ____________________________________________________________________________________________________ Charged to Costs and Expenses _____________________________ Years Ended August 31, ______________________ Item 1997 1996 1995 ____ ____ ____ ____ 1. Maintenance and repairs $ 990,184 $ 858,253 $ 948,602 2. Taxes, other than payroll and income taxes 1,755,168 1,476,159 1,539,544
EXHIBIT 11 ALICO, INC. Computation of Weighted Average Shares Outstanding as of August 31, 1997: Number of shares outstanding at August 31, 1996 7,027,827 _________ _________ Number of shares outstanding at August 31, 1997 7,027,827 _________ _________ Weighted Average 9/1/96 - 8/31/97 7,027,827 _________ _________ EXHIBIT 12 ALICO, INC. Computation of Ratios: 1996 Current Assets $34,876,632 Current Liabilities 5,114,866 34,876,632 divided by 5,114,866 = 6.82:1 1997 Current Assets $37,887,320 Current Liabilities 4,988,115 37,887,320 divided by 4,988,115 = 7.59:1 Pursuant to the requirements of Section 13 of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ALICO, INC. (Registrant) November 11, 1997 Ben Hill Griffin, III Date President, Chief Executive Officer and Director (Signature) November 11, 1997 W. Bernard Lester Date Executive Vice President, Chief Operating Officer and Director (Signature) November 11, 1997 L. Craig Simmons Date Vice President and Chief Financial Officer (Signature) Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated: J. C. Barrow, Jr. K. E. Hartsaw Director Director (Signature) (Signature) Walker E. Blount, Jr. Lloyd G. Hendry Director Director (Signature) (Signature) Ben Hill Griffin, IV Thomas E. Oakley Director Director (Signature) (Signature) John C. Updike Director (Signature) November 11, 1997 Date