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 three months ended November 30, 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 7,064,829 shares of common stock, par value $1.00 per share, outstanding at January 14, 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 November 30, 2001 2000 _______________________________ Revenue: Citrus $ 1,505,998 $ 1,095,619 Sugarcane 2,255,263 2,938,210 Ranch 3,589,560 4,799,772 Rock products and sand 454,797 421,645 Oil lease and land rentals 169,425 204,740 Forest products 104,484 27,707 Profit on sales of real estate 2,821,890 195,264 Interest and investment income 497,479 501,922 Other 149,726 90,605 ___________ ___________ Total revenue 11,548,622 10,275,484 ___________ ___________ Cost and expenses: Citrus production, harvesting and marketing 1,485,057 835,154 Sugarcane production and harvesting 1,854,842 2,236,378 Ranch 3,010,443 4,315,279 Real estate expenses 36,782 98,348 Interest 514,243 728,810 Other, general and administrative 1,366,640 881,374 ____________ ___________ Total costs and expenses 8,268,007 9,095,343 ____________ ___________ Income before income taxes 3,280,615 1,180,141 Provision for income taxes 276,963 375,397 ____________ ___________ Net income 3,003,652 804,744 ____________ ___________ ____________ ___________ Weighted average number of shares outstanding 7,055,720 7,027,827 ____________ ___________ ____________ ___________ Per share amounts: Basic and diluted $ .43 $ .11 Dividends $ 1.00 $ 1.00 See accompanying Notes to Condensed Consolidated Financial Statements.
ALICO, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (See Accountants' Review Report) November 30, 2001 August 31, 2001 ___(Unaudited)_____________________ ASSETS Current assets: Cash and cash investments $ 8,711,027 $ 6,225,088 Marketable Securities 18,478,754 18,726,723 Accounts receivable 7,274,827 10,153,205 Mortgage and notes receivable 2,924,727 2,482,454 Inventories 24,185,341 23,246,609 Other current assets 951,044 510,760 ____________ ____________ Total current assets 62,525,720 61,344,839 Notes receivable, non-current 6,451,252 5,112,309 Land held for development and sale 7,906,852 7,931,544 Investments 1,283,210 1,170,898 Property, buildings and equipment 140,345,408 138,352,300 Less: Accumulated depreciation (36,253,606) (34,878,310) ____________ ____________ Total assets $182,258,836 $179,033,580 ____________ ____________ ____________ ____________ ALICO, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (See Accountants' Review Report) (Continued) November 30, 2001 August 31, 2001 LIABILITIES ___(Unaudited)_______________________ Current liabilities: Accounts payable $ 1,092,912 $ 1,810,094 Due to profit sharing plan 0 443,942 Accrued ad valorem taxes 0 1,383,111 Current portion of notes payable 4,301,146 1,301,146 Accrued expenses 1,652,704 1,394,940 Income taxes payable 211,274 22,670 Deferred income taxes 960,514 1,234,697 ____________ ____________ Total current liabilities 8,218,550 7,590,600 Deferred revenue 25,024 52,987 Notes payable 53,129,274 46,704,954 Deferred income taxes 11,643,630 11,909,252 Deferred retirement benefits 219,488 150,429 ____________ ____________ Total liabilities 73,235,966 66,408,222 ____________ ____________ STOCKHOLDERS' EQUITY Common stock $ 7,062,465 $ 7,044,513 Additional paid in capital 803,963 331,617 Accumulated other comprehensive income 833,678 871,077 Retained earnings 100,322,764 104,378,151 ____________ ____________ Total stockholders' equity 109,022,870 112,625,358 ____________ ____________ Total liabilities and stockholders' equity $182,258,836 $179,033,580 ____________ ____________ ____________ ____________ 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, 2000 7,027,827 $7,027,827 $95,339,847 $1,159,445 $ 17,885 $103,545,004 _______________ Comprehensive income: Net income for the year ended August 31, 2000 - - 16,066,131 - - 16,066,131 Unrealized gains on securities, net of taxes and reclassification adjustment - - - (288,368) - (288,368) ___________ Total comprehensive income: 15,777,763 Dividends paid - - (7,027,827) - - (7,027,827) Stock options exercised 16,686 16,686 - - 227,264 243,950 Stock based compensation - - - - 86,468 86,468 _________ __________ ___________ ________ ____________ Balances, August 31, 2001 7,044,513 $7,044,513 $104,378,151 $871,077 $331,617 $112,625,358 _______________ Comprehensive income: Net income for the three months ended November 30, 2001 - - 3,003,652 - - 3,003,652 Unrealized gains on securities, net of taxes and reclassification adjustment - - - (37,399) - (37,399) ___________ Total comprehensive income: 2,966,253 Dividends paid - - (7,059,039) - - (7,059,039) Stock options exercised 17,952 17,952 - - 249,632 267,584 Stock based compensation - - - - 222,714 222,714 _________ __________ ___________ ________ ___________ Balances, November 30, 2001 (Unaudited) 7,062,465 $7,062,465 $100,322,764 $ 833,678 $803,963 $109,022,870 _________ __________ ___________ ________ ___________ _________ __________ ___________ ________ ___________ November 30, August 31, 2001 2001 Disclosure of reclassification amount: _(Unaudited) ___________ Unrealized holding gains (losses) arising during the period $ 211,256 $ (206,715) Less: reclassification adjustment for gains (losses) included in net income 248,655 81,653 _________ __________ Net unrealized losses on securities $ (37,399) $ (288,368) _________ __________ _________ __________ See accompanying Notes to Condensed Consolidated Financial Statements. ALICO, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited - See Accountants' Review Report) Three Months Ended November 30, 2001 2000 _______________________________ Cash flows from operating activities: Net income $ 3,003,652 $ 804,744 Adjustments to reconcile net income to cash provided from (used for) operating activities: Depreciation and amortization 1,770,604 1,750,647 Net decrease in current assrts and liabilities (1,337,086) (6,180,210) Deferred income taxes (517,241) 27,682 Gain on sales of real estate (2,785,108) (96,916) Stock options granted below fair market value 222,714 86,468 Other 20,076 (470,108) __________ __________ Net cash provided from (used for) operating activities 377,611 (4,077,693) __________ __________ Cash flows from (used for) investing activities: Purchases of property and equipment (2,176,516) (2,462,959) Proceeds from sales of real estate 1,113,702 210,595 Proceeds from sales of property and equipment 185,662 409,800 Purchases of marketable securities (1,042,966) (1,209,992) Proceeds from sales of marketable securities 1,417,338 1,075,976 __________ __________ Net cash used for investing activities (502,780) (1,976,580) __________ __________ Cash flows from (used for) financing activities: Notes receivable (additions) collections (21,757) 6,540 Repayment of bank loan (7,271,853) (13,277,249) Proceeds from bank loan 16,696,173 26,613,827 Proceeds from exercising stock options 267,584 0 Dividends paid (7,059,039) (7,027,827) __________ __________ Net cash provided from financing activities 2,611,108 6,315,291 __________ __________ Net increase in cash and cash investments $2,485,939 $ 261,018 __________ __________ __________ __________ Supplemental disclosures of cash flow information: Cash paid for interest, net of amount capitalized $ 635,971 $ 749,395 __________ __________ __________ __________ Cash paid for income taxes $ 605,600 $4,284,296 __________ __________ __________ __________ Non-cash investing and financing activities: Mortgage and notes receivable issued in exchange for land, less unamortized discount $ 1,759,459 $ -0- ___________ __________ ___________ __________ Fair value adjustments to securities available for sale $ 59,962 $ 779,982 __________ __________ __________ __________ Income tax effect related to fair value adjustment $ 22,563 $ 293,507 __________ __________ __________ __________ Reclassification of breeding herd to property & equipment $ 515,398 $ 370,192 __________ __________ __________ __________ 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, 2001. 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 November 30, 2001 and August 31, 2001 and the consolidated results of operations and cash flows for the three months ended November 30, 2001 and 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 $185,697 in 2001 and $280,758 in 2000. The results of operations for the stated periods are not necessarily indicative of results to be expected for the full year. Certain items from 2000 have been reclassified to conform to 2001 presentation. 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 November 30, 2001 and August 31, 2001 are as follows:
November 30, August 31, 2001 2001 ____________ __________ Mortgage notes receivable on retail land sales $ 249 $ 242 Mortgage notes receivable on bulk land sales 8,787 7,262 Other notes receivable 340 90 ____________ __________ Total mortgage notes receivable $ 9,376 $ 7,594 Less current portion 2,925 2,482 ____________ __________ Non-current portion $ 6,451 $ 5,112 ____________ __________ ____________ __________
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 four years. In November 2001, the Company received a mortgage note in exchange for land sold. The note totaled $1,759,459 and principal payments of $439,865 are due annually on November 15, bearing interest at 1/2% under prime, over four years. 4. Inventories: A summary of the Company's inventories (in thousands) is shown below:
November 30, August 31, 2001 2001 ____________ ___________ Unharvested fruit crop on trees $ 11,468 $ 9,626 Unharvested sugarcane 5,440 5,387 Beef cattle 7,109 8,076 Sod 168 158 ____________ ___________ Total inventories $ 24,185 $ 23,247 ____________ ___________ ____________ ___________
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. At November 30, 2001, the Company had no open positions. 5. Income taxes: The provision for income taxes for the quarters ended November 30, 2001 and 2000 is summarized as follows:
Three Months Ended November 30, 2001 2000 _______________________________ Current: Federal income tax $ 697,389 $ 552,774 State income tax 119,379 88,449 __________ __________ 816,768 641,223 __________ __________ Deferred: Federal income tax (468,122) (226,973) State income tax (71,683) (38,853) __________ __________ (539,805) (265,826) __________ __________ Total provision for income taxes $ 276,963 $ 375,397 __________ __________ __________ __________
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 2003 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 November 30, 2001 and August 31, 2001 was $53,129,274 and $46,704,954, respectively. Maturities of the indebtedness of the Company over the next five years are as follows: 2002- $4,301,146; 2003- $39,813,373; 2004- $1,306,142; 2005- $1,308,905; 2006- $1,311,862; thereafter $9,388,992. Interest cost expensed and capitalized during the three months ended November 30, 2001 and 2000 was as follows: 2001 2000 ________ ________ Interest expensed $514,243 $728,810 Interest capitalized 51,233 53,930 ________ ________ Total interest cost $565,476 $782,740 ________ ________ ________ ________ 7. Dividends: On October 2, 2001 the Company declared a year-end dividend of $1.00 per share, which was paid on October 26, 2001. 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 three months ended November 30, 2001: ____________________________________________________________ General Consolidated Citrus Sugarcane Ranch Corporate* Total ____________________________________________________________ Revenue $ 1,505,998 2,255,263 3,589,560 4,197,801 11,548,622 Costs and expenses 1,485,057 1,854,842 3,010,443 1,917,665 8,268,007 Depreciation and amortization 604,196 660,346 380,954 125,108 1,770,604 Segment profit 20,941 400,421 579,117 2,280,136 3,280,615 Segment assets 54,748,884 53,042,121 20,371,634 54,096,197 182,258,836 The following table presents information for each of the Company's operating segments as of and for the three months ended November 30, 2000: ____________________________________________________________ General Consolidated Citrus Sugarcane Ranch Corporate* Total ____________________________________________________________ Revenue $ 1,095,619 2,938,210 4,799,772 1,441,883 10,275,484 Costs and expenses 835,154 2,236,378 4,315,279 1,708,532 9,095,343 Depreciation and amortization 610,453 652,679 356,917 130,598 1,750,647 Segment profit 260,465 701,832 484,493 (266,649) 1,180,141 Segment assets 54,259,074 52,036,655 20,930,064 48,633,942 175,859,735 *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 a strike price and vesting schedules which are at the discretion of the Board of Directors and determined on the effective date of the grant. The strike price cannot be less than 55% of the market price.
Weighted Weighted average average remaining exercise contractual Shares price Life (in years) _______ _________ _______________ Balance outstanding, August 31, 1999 34,700 $14.42 8 Granted 15,042 14.62 _______________ _______ _________ _______________ Balance outstanding, August 31, 2000 49,742 14.62 9 _______________ Granted 51,074 14.62 _______________ Exercised 16,686 14.62 _______ _________ Balance outstanding, August 31, 2001 84,130 14.62 10 _______________ Granted 69,598 15.68 _______________ Exercised 17,952 14.91 _______ _________ Balance outstanding, November 30, 2001 135,776 15.11 _______ _________ _______ _________
On November 30, 2001, there were 135,776 shares exercisable and 479,636 shares available for grant. 10. Future Application of Accounting Standards In June 2001, the Financial Accounting standard Board (FASB) issued Financial Accounting Standards (SFAS) No. 141, "Business Combinations". This Statement addresses financial accounting and reporting for business combinations and supersedes Accounting Principal Board (APB) Opinion No. 16, Business Combinations, and FASB Statement No. 38, Accounting for Preacquisition Contingencies of Purchased Enterprises. All business combinations in the scope of this Statement are to be accounted for using one method. The provisions of this Statement apply to all business combinations initiated after June 30, 2001. The Statement also applies to all business combinations accounted for using the purchase method for which the date of acquisition is July 1, 2001, or later. Adoption of this Statement is not expected to have a significant impact on the financial position or results of operation of the Company. In June 2001, the FASB issued SFAS No. 142, "Goodwill and Other Intangible Assets". This Statement addresses financial accounting and reporting for acquired goodwill and other intangible assets and supersedes APB Opinion No. 17, Intangible Assets. It addresses how intangible assets that are acquired individually or with a group of other assets (but not those acquired in a business combination) should be accounted for in financial statements upon their acquisition. This Statement also addresses how goodwill and other intangible assets should be accounted for after they have been initially recognized in the financial statements. Adoption of this Statement is not expected to have any impact on the financial position or results of operations of the Company. Statement of Financial Accounting Standards No. 143, "Accounting for Asset Retirement Obligations", relates to the accounting for the obligations associated with the retirement of long-lived assets. The Company is currently reviewing this statement and the impact of its adoption on its financial position, results of operations, and cash flow. The Company will adopt Statement 143 beginning in the first quarter of its fiscal year ending August 31, 2003. Statement of Financial Accounting Standards No. 144, "Accounting for Impairment or Disposal of Long-lived Assets" establishes methods of accounting and reporting for impairment of long-lived assets other than goodwill and intangible assets not being amortized. The Company is currently reviewing this statement and the impact of its adoption on is financial position, results of operations and cash flows. The Company will adopt Statement 144 beginning in the first quarter of its fiscal year ending August 31, 2003. ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. LIQUIDITY AND CAPITAL RESOURCES: Working capital increased to $54,307,170 at November 30, 2001, up from $53,754,239 at August 31, 2001. As of November 30, 2001, the Company had cash and cash investments of $8,711,027 compared to $6,225,088 at August 31, 2001. Marketable securities decreased from $18,726,723 to $18,478,754 during the same period. The ratio of current assets to current liabilities decreased to 7.61 to 1 at November 30, 2001 from 8.08 to 1 at August 31, 2001. Total assets increased by $3,225,256 to $182,258,836 at November 30, 2001 from $179,033,580 at August 31, 2001. 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 $ 2.5 million at November 30, 2001. During December 2001, the Company secured a $10 million mortgage. The terms of the mortgage call for interest to be paid quarterly and annual principal to be made evenly over the next five years. 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 three months ending November 30, 2001 increased by $2,198,908 when compared to the first quarter of fiscal 2001. Income before income taxes increased $2,100,474 for the three months ended November 30, 2001, when compared to the same period a year ago. This was primarily due to an increase in earnings from land sales during the first quarter of fiscal 2001, compared to the same period a year ago. ($2,821,890 vs. $195,264 during the first three months of fiscal 2001 and 2000, respectively. Citrus ______ Citrus earnings decreased for the quarter ended November 30, 2001, when compared to the prior year ($20,941 during the first quarter of fiscal 2002 vs. $260,465 during the same period in fiscal 2001). This is partially the result of the recognition of revenue from the fiscal 2000 fresh fruit crop which was greater than the comparable amount realized in the first quarter of the current year from the fiscal 2001 fresh fruit crop ($185,697 in the first quarter of fiscal 2002, compared to $280,758 in the first quarter of fiscal 2001, see Note 1 to the Notes to Condensed Consolidated Financial Statements). Additionally, producing acreage decreased when compared to the prior year, resulting in higher unit costs for both the boxes harvested and the related pounds of solids. Sugarcane _________ Sugarcane earnings decreased during the first quarter of 2002 ($400,421 during fiscal 2002 vs. $701,832 during fiscal 2001) when compared to the prior year. Fewer acres have been harvested to date, when compared to the same period last year. However, this is a matter of timing and it is early in the harvesting cycle. The difference in yields will turnaround as remaining acres are harvested, baring unforeseen circumstances. Ranching ________ Ranch earnings increased when compared to a year ago ($579,117 vs. $484,493 for the three months ended November 30, 2001 and November 30, 2000, respectively). Reduced operating expenses for beef are the primary cause of the improvement. Market prices for the first quarter of fiscal 2002 were approximately the same as a year ago. While the number of cattle sold decreased 32%, total revenue remained consistent due to the average weight per head sold increasing 8%. General Corporate _________________ The Company is continuing its marketing and permitting activities for its land which surrounds the Florida Gulf Coast University site. At November 30, 2001, there were sales contracts in place for more than 7,400 acres of the Lee County, Florida property totaling $164 million. The agreements are at various stages of the due diligence periods with closing dates over the next ten years. The Company announced the formation of Agri-Insurance Company, Ltd. (Agri) a wholly owned subsidiary, during July of 2000. The insurance company was initially capitalized by transferring cash and approximately 3,000 acres of the Lee County property (along with the sales contracts totaling $8 million). 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. To expedite the creation of the capital liquidity necessary to underwrite the Company's exposure to catastrophic losses, through land sales, another 5,600 acres was transferred during fiscal 2001. Agri underwrote a limited amount of coverage during fiscal 2001. During November 2001, Agri began closing on a 2,500 acre, $30 million sale, of which 40 acres were transferred in November and 1,740 acres were transferred in December. The remaining 720 acres are expected to be transferred by the end of calendar year 2002. Also in December 2001, the Company agreed to donate $5 million to Florida Gulf Coast University for a new athletic complex, scholarships and athletic programs. The agreement calls for $1 million to be donated during the current fiscal year and $800 thousand to be donated each year over the next five years. During January 2002, the Company acquired 40 acres of Lee County property for $9.5 million. The property is located near one of the interstate highway access ramps to Florida Gulf Coast University. 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 November 30, 2001. (b) Reports on Form 8-K. October 2, 2001 October 9, 2001 December 5, 2001 December 7, 2001 December 7, 2001 December 12, 2001 December 13, 2001 January 7, 2002 January 7, 2002 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) January 14, 2002 W. Bernard Lester Date President Chief Operating Officer (Signature) January 14, 2002 L. Craig Simmons Date Vice President Chief Financial Officer (Signature) January 14, 2002 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 November 30, 2001, and the related condensed consolidated statements of operations for the three month periods ended November 30, 2001 and 2000, the condensed consolidated statements of stockholders' equity for the three month period ended November 30, 2001, and the condensed consolidated statements of cash flows for the three month periods ended November 30, 2001 and 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 auditing standards generally accepted in the United States of America, 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 auditing standards generally accepted in the United States of America, the consolidated balance sheet of Alico, Inc. and subsidiaries as of August 31, 2001 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, 2001 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, 2001, is fairly presented, in all material respects, in relation to the consolidated balance sheet from which it has been derived. /s/ KPMG LLP Orlando, Florida January 4, 2002 EXHIBIT B ALICO, INC. Computation of Weighted Average Shares Outstanding as of November 30, 2001: Number of shares outstanding at August 31, 2001 7,044,513 _________ _________ Number of shares outstanding at November 30, 2001 7,062,465 _________ _________ Weighted Average 9/1/01 - 11/30/01 7,055,720 _________ _________