An American Agribusiness... Built for Today's World

For the Investment Community

Keeping you Informed

Press Releases

Alico Reports Third Quarter Earnings

Download PDF

LABELLE, Fla., Aug. 11, 2008 (PRIME NEWSWIRE) -- Alico, Inc. (Nasdaq:ALCO), a land management company, announced net income for the third quarter of fiscal year 2008 of $5.0 million, or $0.68 per share, compared with a net loss of $19.0 million, or $2.58 per share, during the three months ended June 30, 2007. For the nine months ended June 30, 2008, the Company reported net earnings of $9.3 million, or $1.26 per share, compared with a net loss of $10.9 million, or $1.48 per share, for the nine months ended June 30, 2007.

Results from both periods were impacted by the IRS audit assessments. Pretax income from continuing operations was $2.7 million, or $0.36 per share, and $9.8 million, or $1.33 per share for the three and nine months ended June 30, 2008, respectively, compared with $10.2 million, or $1.39 per share, and $24.5 million, or $3.33 per share, for the three and nine months ended June 30, 2007, respectively.

Operating revenues during the third quarter of fiscal year 2008 totaled $42.1 million, compared with $46.1 million for the three months ended June 30, 2007. Operating revenues were $113.0 million for the nine months ended March 31, 2008, compared with $127.4 million for the nine months ended June 30, 2007.

Dan L. Gunter, President and Chief Executive Officer, noted, "We are continuing in our efforts to streamline operations, improve efficiencies and reduce costs, as well as to explore new strategic initiatives in order to increase profitability and shareholder value. During the past quarter, we have discontinued several unprofitable ventures, settled the IRS dispute and made changes that should result in a leaner and more responsive operation."



                                Three months ended   Nine months ended
                                     June 30,            June 30,
                                  2008      2007      2008      2007
                                --------  --------  --------  --------
 Revenues
  Agriculture:
   Bowen Brothers Fruit         $ 17,451  $ 20,810  $ 44,294  $ 52,240
   Citrus groves                  17,528    19,640    40,679    46,729
   Sugarcane                       1,581       451     9,341     9,213
   Cattle                          3,049     2,893     6,451     8,093
   Vegetables                      1,522       898     5,460     3,803
   Sod                               404       527       877     1,577
                                --------  --------  --------  --------
 Agriculture operations revenue   41,535    45,219   107,102   121,655
 Real estate operations                1        79     3,870     3,329
 Land leasing and other              542       450     1,674     1,275
 Mining royalties                     69       401       335     1,135
                                --------  --------  --------  --------

 Total operating revenue        $ 42,147  $ 46,149  $112,981  $127,394
                                ========  ========  ========  ========


                                Three months ended   Nine months ended
                                     June 30,            June 30,
                                  2008      2007      2008      2007
                                --------  --------  --------  --------
 Gross profit:
  Agriculture:
   Bowen Brothers Fruit         $    856  $    480  $  1,715  $  1,138
   Citrus groves                   6,052    10,613    13,054    23,477
   Sugarcane                         (41)       32       101       405
   Cattle                           (363)      253    (1,290)      607
   Vegetables                        130        (2)      (45)      553
   Sod                              (391)      367      (456)      904
                                --------  --------  --------  --------
 Gross profit from agricultural
  operations                       6,243    11,743    13,079    27,084
 Real estate operations             (293)      125     2,143     1,931
 Other                               407       790     1,561     2,110
                                --------  --------  --------  --------
    Gross profit                   6,357    12,658    16,783    31,125
 Profits from the sale of bulk
  real estate                         --       239       817     1,277
 Net interest and investment
  income                            (216)      807     2,468     1,702
 Corporate general and
  administrative and other        (3,471)   (3,494)  (10,283)   (9,561)
 Discontinued operations            (816)     (206)     (927)     (282)
                                --------  --------  --------  --------
 Income before income taxes        1,854    10,004     8,858    24,261
 Provision for income taxes       (3,129)   29,025      (453)   35,199
                                --------  --------  --------  --------
    Net Income                  $  4,983  $(19,021) $  9,311  $(10,938)
                                ========  ========  ========  ========

Addressing the divisional results for the quarter, Mr. Gunter noted that:



 * Citrus prices have declined an estimated 28% during fiscal year
   2008 from their prior year levels. For this reason, the Company
   expects profits from its citrus groves to be lower in fiscal year
   2008 when compared with fiscal year 2007. Prices have declined in
   the Florida citrus industry due to an increasing supply of citrus
   as groves have recovered from the damages brought on by the
   hurricanes of 2004 and 2005.

 * Due to rising feed and fuel costs, cattle margins have eroded
   considerably, causing the Company to write down its cattle
   inventory by $0.4 million, to its net realizable value.

On June 30, 2008, the Company received the final Settlement Agreement related to the audits of Alico for the tax years 2000 through 2004 from the Internal Revenue Service. The terms of the IRS settlement agreement generated an income tax benefit of $5.2 million in the third quarter of fiscal year 2008.

On June 24, 2008 Florida Governor Charlie Crist announced that the South Florida Water Management District (SFWMD) was negotiating the purchase of the assets of United States Sugar Corporation (USSC). USSC (and its subsidiary Southern Gardens) is the Company's largest customer. Under the terms of the initial proposal USSC will continue its operations for a transition period of six years. The Company is evaluating various options regarding sugarcane production, including alternative uses for the property if determined necessary or advantageous.

Effective June 30, 2008, the Company ceased operating its Alico Plant World facility. The Company is currently leasing the Plant World facilities to a commercial greenhouse operator and has also sold a portion of the equipment used to operate the greenhouse. The results of Alico Plant World's operations have been reported as discontinued operations.

Also effective as of June 30, 2008, the Company discontinued its participation in Alico-J&J, LLC a joint venture vegetable farm. The Company is currently working to dissolve the venture and distribute the assets equitably among the members.

The Company has begun dissolution of its Agri-Insurance subsidiary, which has the effect of dissolving the Alico-Agri partnership. The dissolutions will transfer the assets of the subsidiaries to Alico, Inc. The costs of dissolution are not expected to be material to the Company.

About Alico, Inc.

Alico, Inc., a land management company operating in Central and Southwest Florida, owns approximately 135,500 acres of land located in Collier, Glades, Hendry, Lee and Polk counties. Alico is involved in various agricultural operations and real estate activities. Alico's mission is to grow its asset values through its agricultural and real estate activities to produce superior long-term returns for its shareholders.

Statements in this press release that are not statements of historical or current fact constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward looking statements include expectations regarding the future performance of the Company's operating divisions. Such forward-looking statements involve known and unknown risks, uncertainties and other unknown factors that could cause the actual results of the Company to be materially different from the historical results or from any future results expressed or implied by such forward-looking statements. The forward-looking statements contained herein are also subject generally to other risks and uncertainties that are described from time to time in the Company's reports and registration statements filed with the Securities and Exchange Commission.

Alico, Inc.
La Belle, Florida
Dan L. Gunter
(863) 675-2966