Investor Contact: Exhibit 99.1
Mark Humphrey  
Chief Financial Officer and Senior Vice President  
239-226-2000  

 

 

Alico, Inc. Announces Third Quarter and Nine Months of Fiscal Year 2012

Financial Results 

 

Third Quarter Net Income Increased 60.9% Compared to the Third Quarter Last Fiscal Year

 

 

Fort Myers, FL, August 9, 2012 – Alico, Inc. (NASDAQ: ALCO) (“Alico”), a land management company primarily engaged in a variety of agribusiness pursuits, today announced financial results for the three and nine months ended June 30, 2012.

 

Fiscal Year 2012 Third Quarter Results

 

For the third quarter of fiscal year 2012, total operating revenue was $40.4 million as compared to $39.3 million for the third quarter of fiscal year 2011, an increase of 2.8%. Agricultural revenue was $39.7 million in the third quarter of fiscal year 2012 as compared to $38.7 million in the third quarter of fiscal year 2011, an increase of 2.6%.

 

Historically, our agricultural operations have been seasonal in nature with the second and third quarters generally producing the majority of our annual revenues and the first and fourth quarters producing less revenue. Third quarter fiscal year 2012 agricultural revenue included $38.6 million in citrus revenues compared to $38.2 million in the same period of fiscal year 2011. Sugarcane revenue was $0.6 million for the third quarter of fiscal year 2012 as compared to $0.2 million during the same period of fiscal year 2011, an increase of $0.4 million or 200%, primarily due to favorable market pricing.

 

Total operating expenses for the third quarter of fiscal year 2012 were $29.9 million compared to $27.5 million for the third quarter of fiscal year 2011. Gross profit for the third quarter of fiscal year 2012 was $10.5 million compared to $11.8 million for the third quarter of fiscal year 2011, a decrease of 11.1%, primarily due to decreases in the market price of Valencias, increases in harvest and haul costs and the incurrence of certain costs in the third quarter of fiscal year 2012 as compared to the fourth quarter of fiscal year 2011.

 

During the third quarter of fiscal year 2012, we closed on the sales contracts for two parcels of land in Polk County, FL. The sale price of the Polk County, FL parcels totaled approximately $10.1 million from which we received cash of approximately $9.8 million for the sale. The sale of the two parcels resulted in pre-tax gains totaling approximately $9.1 million. Both parcels were considered to be surplus to our agricultural operations.

 

Net income applicable to common stock for the third quarter of fiscal year 2012 was $9.6 million, or $1.31 per share, as compared to net income of $6.0 million, or $0.81 per share, in the third quarter of fiscal year 2011. On April 27, 2012, the Board of Directors of Alico declared a cash dividend of $0.04 per share on its outstanding common stock, which was paid on July 16, 2012, to shareholders of record as of June 29, 2012.

 

EBITDA (defined as net income excluding interest expense, income taxes and depreciation and amortization) for the third quarter of fiscal year 2012 was $18.0 million as compared to $12.1 million for the third quarter of fiscal year 2011. A reconciliation of EBITDA to the GAAP measure net income is provided at the end of this release.

 
 

The increase of $5.9 million in EBITDA quarter-over-quarter is primarily due to pre-tax income of $15.5 million generated in the third quarter of fiscal year 2012 as compared to a pre-tax income of $9.7 million in the same period of fiscal year 2011.

  

JD Alexander, Alico’s President and Chief Executive Officer, stated, “Our third quarter results were as expected. We finished harvesting our Valencia crop in early June and although there were some negative price fluctuations in the Valencia market, our production increases and protections provided by our delivery contracts offset the price decreases in the quarter. Overall citrus crop production for all varieties for the 2012 fiscal year was approximately 20% greater than the prior year. The U.S. Department of Agriculture issued its final forecast for the 2011-2012 season for Florida citrus production and reported a 4.2% increase over the prior year harvest season. For the second consecutive season, we have significantly outperformed the statewide increases in production to the point that our groves are some of the more productive in the State of Florida on an average per acre basis. Although we have been effective in increasing our production there is a structural limit to the number of boxes an acre can produce. While we believe more production is possible from our existing groves, significant future growth increases will come primarily from additional citrus acreage.

 

Mr. Alexander continued, “Additionally, in our current fiscal year, we also converted pasture land into approximately 4,500 acres of net improved, irrigated farm land with the intention of planting sugar cane.  This brings our total net improved, irrigated farm land to approximately 22,000 acres, exclusive of citrus.

 

Mr. Alexander concluded, “With the recent announcements of the land sales in Polk and Lee Counties, FL, we will be able to bring approximately $20.0 million in cash to our balance sheet. We will continue to market and sell under productive assets that are surplus to our operations in order to reinvest in assets that more appropriately align with our return criteria.”

 

Fiscal Year 2012 Nine Months Results

 

Net income for the nine months ended June 30, 2012 was $19.0 million, or $2.58 per share, compared to $8.6 million, or $1.17 per share, for the same period of fiscal year 2011, an increase of 121.0%. For the nine months ended June 30, 2012, total operating revenue was $120.6 million as compared to $92.4 million for the same period of fiscal year 2011, an increase of 30.6%. Income from operations for the nine months of fiscal year 2012 was $24.6 million as compared to $17.0 million for the same period of fiscal year 2011, an increase of 44.7%.

 

EBITDA in the first nine months of fiscal year 2012 was $38.2 million as compared to $20.9 million in the first nine months of fiscal year 2011. The increase of $17.3 million in EBITDA for the nine months ended June 30, 2012 as compared to the nine months ended June 30, 2011 is primarily due to pre-tax income of $30.6 million generated in the first nine months of fiscal year 2012 as compared to a pre-tax income of $14.0 million in the same period of fiscal year 2011. A reconciliation of EBITDA to the GAAP measure net income is provided at the end of this release.

 

Balance Sheet and Liquidity

 

We had working capital of approximately $32.8 million at June 30, 2012 and $17.4 million at September 30, 2011. Cash provided by operating activities was $25.6 million for the first nine months of fiscal year 2012 as compared to $7.2 million during the first nine months of fiscal year 2011. At June 30, 2012, $60.0 million was available under our revolving line of credit as compared to $46.0 million at September 30, 2011. Due to the seasonal nature of our business, working capital requirements are typically greater in the first and fourth quarter of our fiscal year coinciding with our planting cycles. Cash flows from operating activities typically improve in our second and third fiscal quarters as we harvest our crops. As operating cash flows typically improve during the fiscal year, the Company plans to apply such cash flows towards reducing debt and other strategic capital expenditures.

 

About Alico, Inc.

 

Alico, headquartered in Fort Myers, FL, is a land management company operating in Central and Southwest Florida. Alico owns approximately 135,590 acres of land located in Collier, Glades, Hendry, Lee and Polk counties, Florida. Alico is involved in citrus, sugarcane, cattle and other agricultural operations and real estate activities. Alico’s mission is to grow its asset values through agricultural and real estate activities to produce superior long-term returns for its shareholders. For more about Alico, Inc., visit www.alicoinc.com.

 
 

 

Forward-Looking Statements

 

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are based on Alico’s current expectations about future events and can be identified by terms such as “plans,” “expect,” “may,” “anticipate,” “intend,” “should be,” “will be,” “is likely to,” “believes,” and similar expressions referring to future periods.

 

Alico believes the expectations reflected in the forward-looking statements are reasonable but cannot guarantee future results, level of activity, performance or achievements. Actual results may differ materially from those expressed or implied in the forward-looking statements. Therefore, Alico cautions you against relying on any of these forward-looking statements. Factors which may cause future outcomes to differ materially from those foreseen in forward-looking statements include, but are not limited to: changes in laws, regulation and rules; weather conditions that affect production, transportation, storage, import and export of fresh product; increased pressure from disease, insects and other pests; disruption of water supplies or changes in water allocations; pricing and supply of raw materials and products; market responses to industry volume pressures; pricing and supply of energy; changes in interest rates; availability of financing for land development activities; political changes and economic crises; international conflict; acts of terrorism; labor disruptions; inability to pay debt obligations; inability to engage in certain transactions due to restrictive covenants in debt instruments; government restrictions on land use; market and pricing risks due to concentrated ownership of stock. Other risks and uncertainties include those that are described in Alico’s SEC filings, which are available on the SEC’s website at http://www.sec.gov. Alico undertakes no obligation to subsequently update or revise the forward-looking statements made in this press release, except as required by law.

 

 
 

Non-GAAP Financial Measures

 

Due to significant depreciable assets associated with the nature of our operations and, to a lesser extent, interest costs associated with our capital structure, management believes EBITDA is an important measure to evaluate our results of operations between periods on a more comparable basis. Such measurements are not prepared in accordance with accounting principles generally accepted in the United States (“GAAP”), and should not be construed as an alternative to reported results determined in accordance with GAAP. The non-GAAP information provided is unique to Alico and may not be consistent with methodologies used by other companies. Unaudited EBITDA is summarized and reconciled to net income, which management considers being the most directly comparable financial measure calculated and presented in accordance with GAAP as follows:

 

    Quarter ended June 30, Nine Months June 30,  
    2012   2011   2012   2011
Net income $ 9,607 $ 5,971 $ 18,954 $ 8,590  
Total interest expense, net   354   502   1,290   1,572  
Income taxes   5,919   3,771   11,665   5,378  
Depreciation and amortization   2,147   1,901   6,254   5,374  
EBITDA $ 18,027 $ 12,145 $ 38,163 $ 20,914  

 

 
 

ALICO, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(dollars in thousands, except for share data)

 

   

June 30,

2012

    September 30, 2011  
ASSETS   (unaudited)        
Current assets:                
Cash and cash equivalents   $ 3,967     $ 1,336  
Restricted cash     10,747        
Investments     255       989  
Accounts receivable, net     4,639       2,928  
Federal income tax receivable           699  
Inventories     21,648       22,373  
Assets held for sale     9,884        
Deferred income taxes     277        
Other current assets     973       856  
Total current assets     52,390       29,181  
                 
Mortgages and notes receivable, net of current portion     47       75  
Investment in Magnolia Fund     5,550       10,283  
Investments, deposits and other non-current assets     2,095       2,220  
Deferred income taxes     7,306       8,672  
Cash surrender value of life insurance     835       824  
Property, buildings and equipment, net     121,395       128,780  
Total assets   $ 189,618     $ 180,035  
     
LIABILITIES & STOCKHOLDERS’ EQUITY                
Current liabilities:                
Accounts payable   $ 3,584     $ 2,946  
Long-term debt, current portion     3,267       3,279  
Income taxes payable     6,451        
Accrued expenses     2,223       1,719  
Dividend payable     295       882  
Accrued ad valorem taxes     1,184       1,938  
Other current liabilities     2,590       1,063  
Total current liabilities     19,594       11,827  
     
Long-term debt, net of current portion     37,450       53,879  
Deferred retirement benefits, net of current portion     3,761       3,667  
Total liabilities     60,805       69,373  
                 
Commitments and contingencies                
                 
Stockholders’ equity:                
Common stock, $1 par value; 15,000,000 shares authorized; 7,377,106  shares issued and 7,349,410 and 7,342,513 shares outstanding at June 30, 2012 and September 30, 2011, respectively     7,377       7,377  
Additional paid in capital     9,089       9,212  
Treasury stock at cost, 27,696 and 34,593 shares held at June 30, 2012 and September 30, 2011, respectively     (660 )     (862 )
Retained earnings     113,007       94,935  
Total stockholders’ equity     128,813       110,662  
Total liabilities and stockholders’ equity   $ 189,618     $ 180,035  

 

 
 

ALICO, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(dollars in thousands, except for per share data)

 

   Three months ended June 30,  Nine months ended June 30,
   2012  2011  2012  2011
Operating revenues:                    
Agricultural operations  $39,681   $38,681   $118,501   $90,274 
Non-agricultural operations   739    660    2,127    2,112 
Real estate operations   —     —     —     —  
                     
Total operating revenue   40,420    39,341    120,628    92,386 
                     
Operating expenses:                    
Agricultural operations   29,326    27,110    88,930    68,674 
Non-agricultural operations   481    302    1,027    948 
Real estate operations   85    90    327    364 
                     
Total operating expenses   29,892    27,502    90,284    69,986 
                     
Gross profit   10,528    11,839    30,344    22,400 
Corporate general and administrative   1,890    1,766    5,751    5,374 
                     
Income from operations   8,638    10,073    24,593    17,026 
Other (expense) income:                    
Interest and investment income, net   (16)   57    26    (1,657)
Interest expense   (354)   (502)   (1,290)   (1,572)
Gain on sale of real estate   9,124        9,124    —  
Impairment on assets held for sale   (1,868)       (1,868)   —   
Other   2    114    34    171 
                     
Total other income (expense), net   6,888    (331)   6,026    (3,058)
                     
Income before income taxes   15,526    9,742    30,619    13,968 
Income tax expense   5,919    3,771    11,665    5,378 
                     
Net income  $9,607   $5,971   $18,954   $8,590 
                     
Weighted-average number of shares outstanding                    
Basic   7,354    7,352    7,354    7,366 
Diluted   7,354    7,352    7,354    7,366 
Earnings  per common share amounts:                    
Basic  $1.31   $0.81   $2.58   $1.17 
Diluted  $1.31   $0.81   $2.58   $1.17 
Cash dividends declared per common share  $0.04   $0.00   $0.12   $0.00