UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q __X__ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For six months ended February 28, 2001. OR _____ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 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 of organization) Identification No.) P. O. Box 338, La Belle, FL 33975 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code 863/675-2966 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 the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No There were 7,031,625 shares of common stock, par value $1.00 per share, outstanding at April 12, 2001.
PART I. FINANCIAL INFORMATION Item 1. Financial Statements ALICO, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited - See Accountants' Review Report) Three Months Ended Six Months Ended Feb. 28, 2001 Feb. 29, 2000 Feb. 28, 2001 Feb. 29, 2000 _____________ _____________ _____________ ______________ Revenue: Citrus $10,421,372 $ 9,169,863 $ 11,516,991 $ 10,872,427 Sugarcane 6,303,311 5,021,040 9,241,521 6,472,180 Ranch 951,472 582,446 5,751,244 3,569,264 Rock products and sand 412,213 333,432 833,858 682,272 Oil lease and land rentals 167,860 193,876 372,600 607,012 Forest products 576 12,168 28,283 45,416 Profit on sales of real estate 1,025,459 132,003 1,220,723 12,991,854 Interest and investment income 229,659 1,565,781 731,581 2,335,453 Other 51,251 10,628 141,856 10,455 ___________ ___________ ____________ __________ Total revenue 19,563,173 17,021,237 29,838,657 37,586,333 ___________ ___________ ____________ ____________ Cost and expenses: Citrus production, harvesting and marketing 9,424,949 8,527,121 10,260,103 9,602,576 Sugarcane production and harvesting 5,056,250 4,452,486 7,292,628 5,875,186 Ranch 918,405 523,905 5,233,684 3,423,473 Real estate expenses 84,003 118,464 182,351 287,818 Interest 979,890 777,157 1,708,700 1,409,556 Other, general and administrative 1,165,033 725,944 2,046,407 1,321,829 ___________ ___________ ___________ __________ Total costs and expenses 17,628,530 15,125,077 26,723,873 21,920,438 ___________ ___________ ____________ ___________ Income before income taxes 1,934,643 1,896,160 3,114,784 15,665,895 Provision for income taxes 643,777 643,575 1,019,174 5,801,939 ___________ ___________ ____________ ___________ Net income 1,290,866 1,252,585 2,095,610 9,863,956 ___________ ___________ ____________ ___________ ___________ ___________ ____________ ___________ Weighted average number of shares outstanding 7,027,827 7,027,827 7,027,827 7,027,827 ___________ ___________ ____________ ___________ ___________ ___________ ____________ ___________ Per share amounts: Basic and diluted $ .18 $ .18 $ .30 $ 1.40 Dividends $ - $ - $ 1.00 $ .30 See accompanying Notes to Condensed Consolidated Financial Statements.
ALICO, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (See Accountants' Review Report) February 28, 2001 August 31, 2000 (Unaudited) _________________ _______________ ASSETS Current assets: Cash and cash investments $ 2,489,053 $ 1,796,428 Marketable Securities 18,428,247 18,055,099 Accounts receivable 10,392,243 11,954,721 Mortgage and notes receivable 2,544,976 2,509,034 Inventories 17,243,833 21,915,039 Other current assets 393,641 348,062 ____________ ____________ Total current assets 51,491,993 56,578,383 Notes receivable, non-current 7,553,043 7,334,579 Land held for development and sale 7,502,494 7,147,937 Investments 1,163,388 959,252 Property, buildings and equipment 137,747,147 136,822,381 Less: Accumulated depreciation (33,002,429) (31,966,492) ____________ ____________ Total assets $172,455,636 $176,876,040 ____________ ____________ ____________ ____________ ALICO, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (See Accountants' Review Report) (Continued) February 28, 2001 August 31, 2000 (Unaudited) LIABILITIES _________________ _______________ Current liabilities: Accounts payable $ 1,367,540 $ 2,429,242 Due to profit sharing plan 0 429,784 Accrued ad valorem taxes 374,360 1,780,807 Current portion of notes payable 1,298,890 1,298,890 Accrued expenses 1,187,928 988,011 Income taxes payable 1,290,946 4,169,517 Deferred income taxes 895,833 1,250,026 ____________ ____________ Total current liabilities 6,415,497 12,346,277 Deferred revenue 9,652,407 9,540,000 Notes payable 46,782,766 40,302,855 Deferred income taxes 10,592,354 10,889,095 Deferred retirement benefits 350,502 252,809 ____________ ____________ Total liabilities 73,793,526 73,331,036 ____________ ____________ STOCKHOLDERS' EQUITY Common stock $ 7,027,827 $ 7,027,827 Additional paid in capital 104,354 17,885 Accumulated other comprehensive income 1,122,299 1,159,445 Retained earnings 90,407,630 95,339,847 ____________ ____________ Total stockholders' equity 98,662,110 103,545,004 ____________ ____________ Total liabilities and stockholders' equity $172,455,636 $176,876,040 ____________ ____________ ____________ ____________ See accompanying Notes to Condensed Consolidated Financial Statements.
ALICO, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (See Accountants' Review Report) Accumulated Common Stock Other Additional Shares Retained Comprehensive Paid in Issued Amount Earnings Income Capital Total _________ _________ __________ _______ _________ _______ Balances, August 31, 1999 7,027,827 $7,027,827$83,337,579 $1,029,953 - $91,395,359 _______________ Comprehensive income: Net income for the year ended August 31, 2000 - - 14,110,616 - - 14,110,616 Unrealized gains on securities, net of taxes - - - 129,492 - 129,492 and reclassification adjustment __________ Total comprehensive income 14,240,108 Dividends paid - - (2,108,348) - - (2,108,348) Stock based compensation - - - - $17,885 17,885 _________ _______ ___________ ________ ________ __________ Balances, August 31, 2000 7,027,827$7,027,827 $95,339,847$1,159,445$17,885 $103,545,004 _______________ Comprehensive income: Net income for the six months ended February 28, 2001 - - 2,095,610 - - 2,095,610 Unrealized gains on securities, net of taxes and - - - (37,146) - (37,146) reclassification adjustment ___________ Total comprehensive income 2,058,464 Dividends paid - - (7,027,827) - - (7,027,827) Stock based compensation - - - - $86,469 86,469 ________ _________ ___________ ________ ________ __________ Balances, February 28, 2001 (Unaudited) 7,027,827 $7,027,827$90,407,630$1,122,299$104,354 $98,662,110 _________ __________ __________ ________ ________ __________ _________ __________ __________ ________ ________ __________ February 28, August 31, 2001 2000 (Unaudited) Disclosure of reclassification amount: ____________ ___________ Unrealized holding gains (losses) arising during the period $(552,477) $2,176,940 Less: reclassification adjustment for gains (losses) included in net income (515,331) 2,047,448 _________ __________ Net unrealized gains (losses) on securities $ (37,146) $ 129,492 _________ __________ _________ __________ See accompanying Notes to Condensed Consolidated Financial Statements. ALICO, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited - See Accountants' Review Report) Six Months Ended February 28, 2001 2000 _______________________________ Cash flows from operating activities: Net income $ 2,095,610 $9,863,956 Adjustments to reconcile net income to cash provided from (used for) operating activities: Depreciation and amortization 3,470,493 2,747,779 Net decrease in current assets and liabilities 1,528,714 1,197,886 Deferred income taxes (628,525) 3,711,525 Gain on sales of real estate (1,038,372) (12,991,854) Other (318,693) (202,236) __________ __________ Net cash provided from operating activities 5,109,227 4,327,056 __________ __________ Cash flows from (used for) investing activities: Purchases of property and equipment (4,719,030) (6,642,920) Proceeds from sales of real estate 692,676 4,141,731 Proceeds from sales of property and equipment 880,351 309,712 Purchases of marketable securities (1,558,796) (1,024,602) Proceeds from sales of marketable securities 1,090,519 553,895 __________ __________ Net cash used for investing activities (3,614,280) (2,662,184) __________ __________ Cash flows from (used for) financing activities: Notes receivable collections (254,406) 38,074 Repayment of bank loan (24,038,916) (16,201,724) Proceeds from bank loan 30,518,827 16,643,391 Dividends paid (7,027,827) (2,108,348) __________ __________ Net cash used for financing activities (802,322) (1,628,607) __________ __________ Net increase in cash and cash investments $ 692,625 $ 36,265 __________ __________ __________ __________ Cash at beginning of period 1,796,428 740,829 __________ __________ __________ __________ Cash at end of period 2,489,053 777,094 __________ __________ __________ __________ Supplemental disclosures of cash flow information: Cash paid for interest, net of amount capitalized $1,857,944 $1,560,086 __________ __________ __________ __________ Cash paid for income taxes $4,291,269 $ 383,817 __________ __________ __________ __________ Non-cash investing and financing activities: Mortgage and notes receivable issued in exchange for land, less unamortized discount $ -0- $11,511,190 ___________ __________ ___________ __________ Fair value adjustments to securities available for sale $ (59,557) $ 444,520 __________ __________ __________ __________ Income tax effect related to fair value adjustment $ 22,411 $ 166,926 __________ __________ __________ __________ See accompanying Notes to Condensed Consolidated Financial Statements.
ALICO, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (See Accountants' Review Report) 1. Basis of financial statement presentation: The accompanying condensed consolidated financial statements include the accounts of Alico, Inc. and its wholly owned subsidiaries, Saddlebag Lake Resorts, Inc. (Saddlebag) and Agri-Insurance Company, Ltd. (Agri), after elimination of all significant intercompany balances and transactions. The accompanying unaudited condensed consolidated financial statements have been prepared on a basis consistent with the accounting principles and policies reflected in the Company's annual report for the year ended August 31, 2000. In the opinion of Management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting only of normal recur- ring accruals) necessary for a fair presentation of its consolidated financial position at February 28, 2001 and August 31, 2000 and the consolidated results of operations and cash flows for the three and six months ended February 28, 2001 and February 29, 2000. The basic business of the Company is agriculture which is of a seasonal nature and subject to the influence of natural phenomena and wide price fluctuations. Fluctuation in the market prices for citrus fruit has caused the Company to recognize additional revenue from the prior year's crop totaling $280,758 in 2001 and $1,839,642 in 2000. The results of operations for the stated periods are not necessarily indicative of results to be expected for the full year. 2. Real Estate: Real Estate sales are recorded under the accrual method of accounting. Under this method, a sale is not recognized until payment is received, including interest, aggregating 10% of the contract sales price for residential properties and 20% for commercial properties. 3. Mortgage and notes receivable: Mortgage and notes receivable arose from real estate sales. The balances at February 28, 2001 and August 31, 2000 are as follows: February 28, August 31, 2001 2000 ____________ __________ Mortgage notes receivable on retail land sales $ 238,019 $ 238,417 Mortgage notes receivable on bulk land sales 9,540,000 9,540,000 Other notes receivable 320,000 65,196 ____________ __________ Total mortgage notes receivable $ 10,098,019 $ 9,843,613 Less current portion 2,544,976 2,509,034 ____________ __________ Non-current portion $ 7,553,043 $7,334,579 ____________ __________ ____________ __________ In July 2000, the Company received a mortgage note in exchange for land sold. The note totaled $9,540,000 and principal payments of $2,385,000 are due annually on July 14, bearing interest at the LIBOR, over the next four years.
4. Inventories: A summary of the Company's inventories (in thousands) is shown below: February 28, August 31, 2001 2000 ____________ ___________ Unharvested fruit crop on trees $ 8,661,770 $ 9,160,234 Unharvested sugarcane 2,134,993 5,095,514 Beef cattle 6,232,666 7,469,897 Sod 214,404 189,394 ____________ ___________ Total inventories $ 17,243,833 $21,915,039 ____________ ___________ ____________ ___________ Subject to prevailing market conditions, the Company may hedge a portion of its beef inventory by entering into cattle futures contracts to reduce exposure to changes in market prices. Any gains or losses anticipated under these agreements were deferred, with the cost of the related cattle being adjusted when the contracts are settled. As discussed in the Company's first quarter 10-Q, effective September 1, 2000, gains and losses under these agreements are recognized as incurred. The Company recorded losses under these agreements for the three months ended February 28, 2001 totaling $38,000. 5. Income taxes: The provision for income taxes for the quarters and six months ended February 28, 2001 and February 29, 2000 is summarized as follows: Three Months Ended Six Months Ended Feb. 28, 2001 Feb. 29, 2000 Feb. 28, 2001 Feb. 29, 2000 _____________ _____________ _____________ ______________ Current: Federal income tax $ 842,581 $1,137,366 $1,395,355 $1,829,848 State income tax 163,895 139,780 252,344 260,566 _____________ _____________ _____________ ______________ 1,006,476 1,277,146 1,647,699 2,090,414 _____________ _____________ _____________ ______________ Deferred: Federal income tax (308,573) (555,221) (535,546) 3,154,796 State income tax (54,126) (78,350) (92,979) 556,729 _____________ _____________ _____________ ______________ (362,699) (633,571) (628,525) 3,711,525 _____________ _____________ _____________ ______________ Total provision for income taxes $ 643,777 $ 643,575 $1,019,174 $5,801,939 _____________ _____________ _____________ ______________ _____________ _____________ _____________ ______________ 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 for the quarters and six months ended February 28, 2001 and February 29, 2000: Three Months Ended Six Months Ended Feb. 28, 2001 Feb. 29, 2000 Feb. 28, 2001 Feb. 29, 2000 _____________ _____________ _____________ ______________ Expected income tax $ 657,779 $ 644,695 $ 1,059,027 $ 5,326,404 Increase (decrease) resulting from: State income taxes, net of federal benefit 71,581 41,236 103,754 539,415 Nontaxable interest and dividends (31,606) (31,052) (64,026) (57,788) Tax exempt income from Agri-Insurance Co, Ltd (133,585) -0- (133,585) -0- Other reconciling items, net (20,392) (11,304) 54,004 (6,092) ____________ ____________ ____________ ___________ Total provision for income taxes $ 643,777 $ 643,575 $ 1,019,174 $ 5,801,939 ____________ _____________ ____________ ___________ ____________ _____________ ____________ ____________ 6. Indebtedness: The Company has financing agreements with commercial banks that permit the Company to borrow up to $44 million. The financing agreements allow the Company to borrow up to $41 million which is due in 2002 and up to $3 million which is due on demand. In March 1999, the Company mortgaged 7,680 acres for $19 million in connection with a $22.5 million acquisition of producing citrus and sugarcane operations. The total amount of long-term debt under these agreements at February 28, 2001 and August 31, 2000 was $46,782,766 and $40,302,855, respectively. Maturities of the indebtedness of the Company over the next five years are as follows: 2001- $1,298,890; 2002- $32,479,973; 2003- $1,303,559; 2004- $1,306,142; 2005- $1,308,905; thereafter $10,384,187. Interest cost expensed and capitalized during the six months ended February 28, 2001 and February 29, 2000 was as follows: 2001 2000 ________ ________ Interest expensed $1,708,700 $1,409,556 Interest capitalized 109,909 228,667 ________ ________ Total interest cost $1,818,609 $1,638,223 ________ ________ ________ ________ 7. Dividends: On October 3, 2000 the Company declared a year-end dividend of $1.00 per share, which was paid on October 27, 2000. 8. Disclosures about reportable segments: Alico, Inc. has four reportable segments: citrus, sugarcane, ranching and general corporate. The commodities produced by these segments are sold to wholesalers and processors who prepare the products for consumption. The Company's operations are located in Florida. The accounting policies of the segments are the same as those described in the summary of significant accounting policies. Alico, Inc. evaluates performance based on profit or loss from operations before income taxes. Alico, Inc.'s reportable segments are strategic business units that offer different products. They are managed separately because each segment requires different management techniques, knowledge and skills. The following table presents information for each of the Company's operating segments as of and for the six months ended February 28, 2001: ____________________________________________________________ General Consolidated Citrus Sugarcane Ranch Corporate* Total ____________________________________________________________ Revenue $ 11,516,991 9,241,521 5,751,244 3,328,901 29,838,657 Costs and expenses 10,260,103 7,292,628 5,233,684 3,937,458 26,723,873 Depreciation and amortization 1,243,000 1,256,219 718,639 252,635 3,470,493 Segment profit 1,256,888 1,948,893 517,560 (608,557) 3,114,784 Segment assets 54,845,676 51,831,962 20,407,345 45,370,653 172,455,636 The following table presents information for each of the Company's operating segments as of and for the six months ended February 29, 2000: ____________________________________________________________ General Consolidated Citrus Sugarcane Ranch Corporate* Total ____________________________________________________________ Revenue $ 10,872,427 6,472,180 3,569,264 16,672,462 37,586,333 Costs and expenses 9,602,576 5,875,186 3,423,473 3,019,203 21,920,438 Depreciation and amortization 1,214,698 992,681 288,922 251,478 2,747,779 Segment profit 1,269,851 596,994 145,791 13,653,259 15,665,895 Segment assets 56,030,620 49,794,338 20,969,288 40,175,563 166,969,809 *Consists of rents, investments, real estate activities and other such items of a general corporate nature. 9. Stock Option Plan On November 3, 1998, the Company adopted the Alico, Inc., Incentive Equity Plan (The Plan) pursuant to which the Board of Directors of the Company may grant options, stock appreciation rights, and/or restricted stock to certain directors and employees. The Plan authorizes grants of shares or options to purchase up to 650,000 shares of authorized but unissued common stock. Stock options granted have vesting schedules which are at the discretion of the Board of Directors and determined on the effective date of the grant. Weighted Weighted average average remaining exercise contractual Shares price Life (in years) _______ _________ _______________ Balance outstanding, August 31, 2000 49,692 14.62 10 _______________ Granted 51,074 14.62 _______________ _______ _________ Balance outstanding, February 28, 2001 100,766 14.62 _______ _________ _______ _________ On February 28, 2001, there were 49,692 shares exercisable and 549,234 shares available for grant. ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. LIQUIDITY AND CAPITAL RESOURCES: Working capital increased to $45,076,496 at February 28, 2001, up from $44,232,006 at August 31, 2000. As of February 28, 2001, the Company had cash and cash investments of $2,489,053 compared to $1,796,428 at August 31, 2000. Marketable securities increased from $18,055,099 to $18,428,247 during the same period. The ratio of current assets to current liabilities increased to 8.03 to 1 at February 28, 2001 from 4.58 to 1 at August 31, 2000. Total assets decreased to $172,455,636 at February 28, 2001, compared to $176,876,040 at August 31, 2000. In connection with financing agreements with commercial banks (See Note 6 under Notes to Condensed Consolidated Financial Statements), the Company has an unused availability of funds of approximately $12.8 million at February 28, 2001. RESULTS OF OPERATIONS: The basic business of the Company is agriculture, which is of a seasonal nature and subject to the influence of natural phenomena and wide price fluctuations. The results of operations for the stated periods are not necessarily indicative of results to be expected for the full year. Net income for the six months ending February 28, 2001 decreased by $7,768,346 when compared to the same period a year ago. ($2,095,610 vs. $9,863,956 for the six months ended February 28, 2001 and February 29, 2000, respectively). Net income increased during the three months ended February 28, 2001, compared to the same period a year ago ($1,290,866 vs. $1,252,585). Income before income taxes decreased $12,551,111 for the six months ended February 28, 2001, when compared to the same period a year ago. This was primarily due to the decrease in earnings from real estate activities ($1,038,372 for the six months ended February 28, 2001 compared to $12,704,036 for the six months ended February 29, 2000). Earnings from agricultural activities increased from the prior year ($2,276,551 vs. $1,269,837 for the second quarter, and $3,723,341 vs. $2,012,636 during the first six months of fiscal 2001 and 2000, respectively). Citrus ______ Citrus earnings increased for the second quarter ($996,423 during fiscal 2001 vs. $642,742 during fiscal 2000) but decreased slightly during the six months ended February 28, 2001, when compared to the prior year ($1,256,888 during the first half of fiscal 2001 vs. $1,269,851 during the same period in fiscal 2000). This is largely the result of the recognition of revenue from the fiscal 1999 fresh fruit crop which was greater than the comparable amount realized in the second quarter of the current year ($280,758 in the second quarter of fiscal 2001, compared to $758,750 in the second quarter of fiscal 2000, see Note 1 to the Notes to Condensed Consolidated Financial Statements). Sugarcane _________ Sugarcane earnings increased both for the second quarter ($1,247,061 for fiscal 2001 vs. $568,554 for fiscal 2000) and the six months ended February 28, 2001 ($1,948,893 vs. $596,994 for the six months ended February 29, 2000) Producing acres have increased and, as a result, more acres are being harvested. The increased yields and market prices continue to contribute to the improvement. Ranching ________ Ranch earnings decreased for the second quarter ($33,067 vs. $58,541 for the three months ended February 28, 2001 and February 29, 2000, respectively) but increased when compared to a year ago ($517,560 vs. $145,791 for the six months ended February 28, 2001 and February 29, 2000, respectively). Increased production and improved market prices for beef are the primary cause of the improvement. General Corporate _________________ The Company is continuing its marketing and permitting activities for its land which surrounds the Florida Gulf Coast University site. The Company announced the formation of Agri-Insurance Company, Ltd. (Agri) a wholly owned subsidiary, during July of 2000. The insurance company has been capitalized by transferring cash and approximately 6,000 acres of the Lee County property along with the sales contracts, referred to below. General and administrative expenses increased $725 thousand, primarily due to the formation of Agri. Through Agri, the Company expects to be able to underwrite previously uninsurable risk related to catastrophic crop and other losses. Additionally, the insurance company will have access to reinsurance markets, otherwise inaccessible. While Agri has underwritten a modest amount of coverage (approximately $3.2 million) during August and December of 2000, it is expected that more significant coverages will be written before the end of 2001. In December of 1999, the Company entered into a contract to sell approximately 2,500 acres for $50 million to Naples/Dallas Venture, Inc. The agreement called for closings to occur on 250 acres per year for 10 years. In January 2001, a third party contracted with the Company to purchase approximately 2000 additional acres. The purchaser has assumed the Naples/Dallas contract, combining the two parcels for a total purchase price of approximately $112 million. The new contract calls for closings to occur on 450 acres per year for 10 years. The first closing is expected during fiscal 2003. During September of 1999, the Company completed a sale of 1,230 acres of land surrounding the University site in Lee County for $16.5 million. The contract called for 25 percent of the purchase price to be paid at closing, with the balance of $12.3 million payable annually over the next four years. In August of 2000, Agri sold another 488 acres to Miromar, also near the University, for $10.6 million. In connection with the sale, they agreed to pay off the $12.3 million mortgage related to the September 1999 sale and pay 10% of the contract price for their second purchase at closing. The balance is payable over the next four years. The first sale generated a pre-tax gain of $13.4 million. The gain related to the second sale has only been recognized to the extent that 10% of the purchase price has been collected net of closing costs ($959 thousand). The remainder of the gain and related mortgage will be recognized upon receipt of 20% of the contract price. This is expected to occur during August of 2001. In July of 1999, the Company entered into a contract to sell up to 402 acres near the University to Thomas B. Garlick, a Trustee of Florida Land Trust 996 for approximately $15.5 million. The contract was subsequently renegotiated, as provided for in the original agreement, and calls for the sale of 44 acres for $5 million. Cautionary Statement ____________________ Readers should note, in particular, that this Form 10-Q contains forward- looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), that involve substantial risks and uncertainties. When used in this document, or in the documents incorporated by reference herein, the words "anticipate", "believe", "estimate", "may", "intend" and other words of similar meaning, are likely to address the Company's growth strategy, financial results and/or product development programs. Actual results, performance or achievements could differ materially from those contemplated, expressed or implied by the forward-looking statements contained herein. The considerations listed herein represent certain important factors the Company believes could cause such results to differ. These considerations are not intended to represent a complete list of the general or specific risks that may effect the Company. It should be recognized that other risks, including general economic factors and expansion strategies, may be significant, presently or in the future, and the risks set forth herein may affect the Company to a greater extent than indicated. ITEM 3. Quantitative and Qualitative Disclosures about Market Risk No changes FORM 10-Q PART II. OTHER INFORMATION ITEM 6. Exhibits and reports on Form 8-K. (a) Exhibits: A. Accountant's Report. B. Computation of Weighted Average Shares Outstanding at February 28, 2001. (b) Reports on Form 8-K. November 3, 2000 December 7, 2000 December 14, 2000 December 18, 2000 December 21, 2000 March 7, 2001 March 23, 2001 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. ALICO, INC. (Registrant) April 12, 2001 W. Bernard Lester Date President Chief Operating Officer (Signature) April 12, 2001 L. Craig Simmons Date Vice President Chief Financial Officer (Signature) April 12, 2001 Deirdre M. Purvis Date Controller (Signature) EXHIBIT A INDEPENDENT ACCOUNTANT'S REVIEW REPORT ______________________________________ The Stockholders and Board of Directors Alico, Inc.: We have reviewed the condensed consolidated balance sheet of Alico, Inc. and subsidiaries as of February 28, 2001, and the related condensed consolidated statements of operations for the three-month and six-month periods ended February 28, 2001 and February 29, 2000, the condensed consolidated statements of stockholders' equity for the six-month period February 28, 2001, and the condensed consolidated statements of cash flows for the six-month periods ended February 28, 2001 and February 29, 2000. These condensed consolidated financial statements are the responsibility of the Company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical review procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our reviews, we are not aware of any material modifications that should be made to the condensed consolidated financial statements referred to above for them to be in conformity with accounting principles generally accepted in the United States of America. We have previously audited, in accordance with generally accepted auditing standards, the consolidated balance sheet of Alico, Inc. and subsidiaries as of August 31, 2000 and the related consolidated statements of operations, stockholders' equity and cash flows for the year then ended (not presented herein); and in our report dated October 12, 2000 we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of August 31, 2000, is fairly presented, in all material respects, in relation to the consolidated balance sheet from which it has been derived. s/s KPMG LLP Orlando, Florida April 2, 2001 EXHIBIT B ALICO, INC. Computation of Weighted Average Shares Outstanding as of February 28, 2001: Number of shares outstanding at August 31, 2000 7,027,827 _________ _________ Number of shares outstanding at February 28, 2001 7,027,827 _________ _________ Weighted Average 9/1/00 - 02/28/01 7,027,827 _________ _________