Alico, Inc. (“Alico” or the “Company”) (NASDAQ:ALCO), today
announces financial results for the first quarter ended
December 31, 2016. The Company earned ($0.21) per share
in the first quarter compared to ($0.36) per share in the prior
year reflecting an increase in fruit pricing partially offset by a
decrease in production volume. When both periods are adjusted for
certain items including merger and acquisition transaction costs,
litigation costs, consulting fees, real estate gains and stock
compensation expense, the Company earned ($0.22) per share in the
first quarter of fiscal year 2017 and ($0.29) per share in the
first quarter of fiscal year 2016.
These results are reflective of the seasonal
nature of the Company’s business as we harvest the majority of our
citrus crops in the second and third quarters of our fiscal
year. Accordingly, we typically recognize the majority of our
profit and cash flow from operations in the second and third
quarters, and experience greater working capital requirements in
the first and fourth quarters.
|
|
Three Months Ended December 31, |
|
2016 |
|
2015 |
|
Change |
|
|
|
|
|
|
|
|
Net loss |
$ |
(1,743 |
) |
|
$ |
(3,019 |
) |
|
$ |
1,276 |
|
|
42.3 |
% |
EBITDA |
$ |
3,235 |
|
|
$ |
1,425 |
|
|
$ |
1,810 |
|
|
127.0 |
% |
Earnings per diluted
common share |
$ |
(0.21 |
) |
|
$ |
(0.36 |
) |
|
$ |
0.15 |
|
|
41.7 |
% |
Net cash used in
operating activities |
$ |
(17,437 |
) |
|
$ |
(14,781 |
) |
|
$ |
(2,656 |
) |
|
(18.0 |
)% |
|
Orange Co. Division Results
Orange Co.'s financial results improved in the
first quarter of fiscal year 2017 due to an increase in fruit
prices. We realized a price of $2.51 per pound solid in the
first quarter of fiscal year 2017 compared to $2.01 in the same
period of the prior year, an increase of 24.9%.
Orange Co.'s crop production was lower by 21.5%
on a pound solids basis and by 23.2% on a box basis for the quarter
ended December 31, 2016 compared to the first quarter of
fiscal year 2016. These results are significantly impacted by
timing as our harvest activities commenced later this year. On
January 12, 2017, the USDA estimated that the Florida orange crop,
as measured in boxes, for the 2016-2017 season will decline by
approximately 12.3% compared to last year. We are currently
projecting a full season year-over-year decline in production of
approximately 10%.
Citrus production for the quarters ended
December 31, 2016 and 2015 is summarized in the following
table.
(boxes and
pound solids in thousands) |
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
December 31, |
|
|
|
2016 |
|
2015 |
|
% Change |
Boxes
Harvested: |
|
|
|
|
|
Early and
Mid-Season |
1,029 |
|
|
1,311 |
|
|
(21.5 |
)% |
Total
Processed |
1,029 |
|
|
1,311 |
|
|
(21.5 |
)% |
Fresh
Fruit |
129 |
|
|
196 |
|
|
(34.2 |
)% |
Total |
1,158 |
|
|
1,507 |
|
|
(23.2 |
)% |
Pound Solids
Produced: |
|
|
|
|
|
|
Early and
Mid-Season |
5,440 |
|
|
6,931 |
|
|
(21.5 |
)% |
Total |
5,440 |
|
|
6,931 |
|
|
(21.5 |
)% |
|
|
|
|
|
|
|
Average Pound Solids
Per Box |
5.29 |
|
|
5.29 |
|
|
— |
% |
|
|
|
|
|
|
|
Price per Pound
Solids: |
|
|
|
|
|
|
Early and
Mid-Season |
$ |
2.51 |
|
|
$ |
2.01 |
|
|
24.9 |
% |
Orange Co. continues to focus on efficiency and
cost control. Our cost of sales for fiscal year 2017 are
expected to decrease by approximately $1.2 million from the prior
year despite the challenges of unusual weather and disease;
however, the cost of production per pound solid increased 2.0% from
$1.37 to $1.39 in the first quarter because of lower volumes
supporting the cost base.
Conservation and Environmental Resources
Division Results
Conservation and Environmental Resources (“CER”)
revenues for the first quarter of fiscal year 2017 totaled $0.3
million compared to $1.0 million in the first quarter of fiscal
year 2016. The decrease relates primarily to the timing of calf
sales. CER held an additional 1,000 calves in inventory at
September 30, 2015 which would have historically been sold prior to
year-end but were instead sold in the first quarter of fiscal year
2016.
CER operating expenses decreased by $1.0
million for the three months ended December 31, 2016 compared
to the three months ended December 31, 2015 due to the timing
of additional pounds sold and a $0.5 million decrease in water
conservation related expenses.
Other Corporate Financial
Information
Alico continues to invest in information
technology, management talent and strategic acquisition activities
while simultaneously controlling recurring general and
administrative costs. Recurring general and administrative
costs decreased by approximately $0.2 million in the first quarter
compared to the first quarter of fiscal year 2016. Corporate
G&A expenses for the three months ended December 31, 2016
totaled $3.8 million compared to $3.9 million for the three months
ended December 31, 2015, a decrease of $0.1 million.
Other expense, net was $2.0 million and $2.5
million for the three months ended December 31, 2016 and 2015,
respectively. The decrease of $0.5 million is primarily
attributable to a $0.3 million increase in gains on real estate
sales and a $0.2 million decrease in interest expense.
The Company paid a first quarter cash dividend
of $0.06 per share on its outstanding common stock on January 13,
2017 to shareholders of record at December 30, 2016.
The Company ended the quarter with term debt,
net of cash and cash equivalents, of $193.4 million.
About Alico
Alico is a holding company with assets and
related operations in agriculture and environmental resources,
including cattle ranching, water management, and mining. Our
mission is to create value for shareholders by managing existing
assets to their optimal current income and total returns,
opportunistically acquiring new assets and producing high quality
agricultural products while exercising responsible environmental
stewardship. Learn more about Alico (NASDAQ:ALCO) at
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, demand, import and export of fresh product and its
by-products, increased pressure from diseases including citrus
greening and citrus canker, as well as 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 and other growth opportunities; onetime events;
acquisitions and divestitures, including our ability to achieve the
anticipated results of the Orange-Co acquisition and Silver Nip
merger; seasonality; 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; changes in agricultural land values; and 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 |
|
|
|
|
|
|
|
Adjusted
EBITDA |
|
|
|
(in thousands) |
|
|
|
|
Three Months Ended December 31, |
|
2016 |
|
2015 |
|
|
|
|
Net loss attributable
to common stockholders |
$ |
(1,735 |
) |
|
$ |
(3,011 |
) |
Interest
expense |
2,327 |
|
|
2,503 |
|
Income
tax benefit |
(1,273 |
) |
|
(2,075 |
) |
Depreciation and amortization |
3,916 |
|
|
4,008 |
|
EBITDA |
3,235 |
|
|
1,425 |
|
|
|
|
|
Gains on
sale of real estate |
(436 |
) |
|
(142 |
) |
Litigation expenses related to shareholder lawsuit |
— |
|
|
400 |
|
Consulting agreement expenses |
50 |
|
|
304 |
|
Stock
compensation expense |
185 |
|
|
38 |
|
Transaction costs |
18 |
|
|
397 |
|
|
|
|
|
Adjusted EBITDA |
$ |
3,052 |
|
|
$ |
2,422 |
|
|
|
|
|
|
|
|
|
Adjusted
Earnings Per Diluted Common Share |
|
|
|
(in thousands) |
|
|
|
|
Three Months Ended December 31, |
|
2016 |
|
2015 |
|
|
|
|
Net loss attributable
to common stockholders |
$ |
(1,735 |
) |
|
$ |
(3,011 |
) |
Gains on
sale of real estate |
(436 |
) |
|
(142 |
) |
Litigation expenses related to shareholder lawsuit |
— |
|
|
400 |
|
Payments
on consulting agreements |
50 |
|
|
304 |
|
Stock
compensation expense |
185 |
|
|
38 |
|
Transaction costs |
18 |
|
|
397 |
|
Tax
impact |
77 |
|
|
(406 |
) |
|
|
|
|
|
|
|
|
Adjusted net
income |
$ |
(1,841 |
) |
|
$ |
(2,420 |
) |
|
|
|
|
|
|
|
|
Diluted common
shares |
|
8,324 |
|
|
|
8,303 |
|
|
|
|
|
|
|
|
|
Adjusted Earnings per
Diluted Common Share |
$ |
(0.22 |
) |
|
$ |
(0.29 |
) |
|
|
|
|
|
|
|
|
Adjusted Free
Cash Flow |
|
|
|
(in thousands) |
|
|
|
|
Three Months Ended December 31, |
|
2016 |
|
2015 |
|
|
|
|
Net cash used in
operating activities |
$ |
(17,437 |
) |
|
$ |
(14,781 |
) |
Adjustments for
non-recurring items: |
|
|
|
Litigation expenses related to shareholder lawsuit |
— |
|
|
400 |
|
Payments
on consulting agreements |
50 |
|
|
304 |
|
Transaction costs |
18 |
|
|
397 |
|
Tax
impact |
(29 |
) |
|
(448 |
) |
Capital
expenditures |
(2,357 |
) |
|
(2,988 |
) |
Adjusted Free Cash
Flow |
$ |
(19,755 |
) |
|
$ |
(17,116 |
) |
|
|
|
|
|
|
|
|
Alico utilizes the non-GAAP measures Adjusted
EBITDA, Adjusted Earnings per Diluted Common Share and Adjusted
Free Cash Flow among other measures, to evaluate the performance of
its business. 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
that Adjusted EBITDA, Adjusted Earnings per Diluted Common Share,
and Adjusted Free Cash Flow are important measures to evaluate our
results of operations between periods on a more comparable basis
and to help investors analyze underlying trends in our business,
evaluate the performance of our business both on an absolute basis
and relative to our peers and the broader market, provides useful
information to both management and investors by excluding certain
items that may not be indicative of our core operating results and
operational strength of our business and helps investors evaluate
our ability to service our debt. Such measurements are not
prepared in accordance with accounting principles generally
accepted in the United States (“U.S. GAAP”) and should not be
construed as an alternative to reported results determined in
accordance with U.S. GAAP. The non-GAAP information provided is
unique to Alico and may not be consistent with methodologies used
by other companies. Adjusted EBITDA is defined as earnings before
interest expense, provision for income taxes, depreciation and
amortization adjusted for non-recurring transactions. Adjusted
Earnings per Diluted Common Share is defined as Net Income adjusted
for non-recurring transactions divided by diluted common
shares. Adjusted Free Cash Flow is defined as cash provided
by operations adjusted for non-recurring transactions less capital
expenditures. The Company uses Adjusted Free Cash Flow to evaluate
its business and this measure is considered an important indicator
of the Company's liquidity, including its ability to reduce net
debt, make strategic investments and pay dividends to common
stockholders. The Company’s definition of Adjusted Free Cash Flow
does not represent residual cash flows available for discretionary
spending.
|
ALICO, INC. |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED) |
(in thousands, except per share
amounts) |
|
|
|
|
|
Three Months Ended December 31, |
|
2016 |
|
2015 |
Operating
revenues: |
|
|
|
Orange
Co. |
$ |
16,877 |
|
|
$ |
19,295 |
|
Conservation and Environmental Resources |
301 |
|
|
1,007 |
|
Other
Operations |
267 |
|
|
302 |
|
Total
operating revenues |
17,445 |
|
|
20,604 |
|
|
|
|
|
Operating
expenses: |
|
|
|
Orange
Co. |
14,085 |
|
|
17,608 |
|
Conservation and Environmental Resources |
514 |
|
|
1,560 |
|
Other
Operations |
93 |
|
|
70 |
|
Total
operating expenses |
14,692 |
|
|
19,238 |
|
|
|
|
|
Gross
profit |
2,753 |
|
|
1,366 |
|
General and
administrative expenses |
3,788 |
|
|
3,925 |
|
|
|
|
|
Loss from
operations |
(1,035 |
) |
|
(2,559 |
) |
|
|
|
|
Other (expense) income: |
|
|
|
Interest
expense |
(2,327 |
) |
|
(2,503 |
) |
Gain on
sale of real estate |
436 |
|
|
142 |
|
Other
expense, net |
(90 |
) |
|
(174 |
) |
Total
other expense, net |
(1,981 |
) |
|
(2,535 |
) |
|
|
|
|
Loss before
income taxes |
(3,016 |
) |
|
(5,094 |
) |
Benefit for income
taxes |
(1,273 |
) |
|
(2,075 |
) |
|
|
|
|
Net
loss |
(1,743 |
) |
|
(3,019 |
) |
Net loss attributable
to noncontrolling interests |
8 |
|
|
8 |
|
Net loss
attributable to Alico, Inc. common stockholders |
$ |
(1,735 |
) |
|
$ |
(3,011 |
) |
Per share
information attributable to Alico, Inc. common
stockholders: |
|
|
|
Earnings per
common share: |
|
|
|
Basic |
$ |
(0.21 |
) |
|
$ |
(0.36 |
) |
Diluted |
$ |
(0.21 |
) |
|
$ |
(0.36 |
) |
Weighted-average number of common shares
outstanding: |
|
|
|
Basic |
8,324 |
|
|
8,303 |
|
Diluted |
8,324 |
|
|
8,303 |
|
|
|
|
|
Cash dividends
declared per common share |
$ |
0.06 |
|
|
$ |
0.06 |
|
ALICO, INC. |
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED) |
(in thousands, except share
amounts) |
|
|
|
|
|
December 31, |
|
September 30, |
|
2016 |
|
2016 |
ASSETS |
|
|
|
Current
assets: |
|
|
|
Cash and
cash equivalents |
$ |
1,126 |
|
|
$ |
6,625 |
|
Accounts
receivable, net |
11,917 |
|
|
4,740 |
|
Inventories |
62,522 |
|
|
58,469 |
|
Income
tax receivable |
1,013 |
|
|
1,013 |
|
Prepaid
expenses and other current assets |
3,374 |
|
|
1,024 |
|
Total current assets |
79,952 |
|
|
71,871 |
|
|
|
|
|
Property and equipment,
net |
376,806 |
|
|
379,247 |
|
Goodwill |
2,246 |
|
|
2,246 |
|
Deferred financing
costs, net of accumulated amortization |
326 |
|
|
389 |
|
Other non-current
assets |
1,423 |
|
|
1,692 |
|
Total assets |
$ |
460,753 |
|
|
$ |
455,445 |
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
Current
liabilities: |
|
|
|
Accounts
payable |
$ |
3,731 |
|
|
$ |
5,975 |
|
Accrued
liabilities |
3,020 |
|
|
6,422 |
|
Dividend
payable |
499 |
|
|
498 |
|
Long-term
debt, current portion |
4,475 |
|
|
4,493 |
|
Obligations under capital leases, current portion |
288 |
|
|
288 |
|
Other
current liabilities |
681 |
|
|
1,002 |
|
Total current liabilities |
12,694 |
|
|
18,678 |
|
|
|
|
|
Long-term debt: |
|
|
|
Principal amount |
190,045 |
|
|
192,726 |
|
Less: deferred
financing costs, net |
(1,927 |
) |
|
(1,980 |
) |
Long-term debt less
deferred financing costs, net |
188,118 |
|
|
190,746 |
|
Lines of credit |
21,945 |
|
|
5,000 |
|
Deferred tax
liability |
29,784 |
|
|
31,056 |
|
Deferred gain on
sale |
27,258 |
|
|
27,204 |
|
Deferred retirement
obligations |
4,192 |
|
|
4,198 |
|
Obligations under
capital leases |
300 |
|
|
300 |
|
Total liabilities |
284,291 |
|
|
277,182 |
|
|
|
|
|
Stockholders'
equity: |
|
|
|
Preferred
stock, no par value, 1,000,000 shares authorized; none issued |
— |
|
|
— |
|
Common
stock, $1.00 par value, 15,000,000 shares authorized; 8,416,145
shares issued and 8,324,727 and 8,315,535 shares outstanding at
December 31, 2016 and September 30, 2016, respectively |
8,416 |
|
|
8,416 |
|
Additional paid in capital |
18,210 |
|
|
18,155 |
|
Treasury
stock, at cost, 91,398 and 100,610 shares held at December 31, 2016
and September 30, 2016, respectively |
(4,199 |
) |
|
(4,585 |
) |
Retained
earnings |
149,270 |
|
|
151,504 |
|
Total Alico stockholders' equity |
171,697 |
|
|
173,490 |
|
Noncontrolling interest |
4,765 |
|
|
4,773 |
|
Total stockholders' equity |
176,462 |
|
|
178,263 |
|
Total liabilities and stockholders' equity |
$ |
460,753 |
|
|
$ |
455,445 |
|
|
|
|
|
|
|
|
|
ALICO, INC. |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED) |
(in thousands) |
|
|
|
|
|
Three Months Ended December 31, |
|
2016 |
|
2015 |
|
|
|
|
Net cash used
in operating activities: |
$ |
(17,437 |
) |
|
$ |
(14,781 |
) |
|
|
|
|
Cash flows from
investing activities: |
|
|
|
Purchases
of property and equipment |
(2,357 |
) |
|
(2,988 |
) |
Other |
547 |
|
|
140 |
|
Net cash
used in investing activities |
(1,810 |
) |
|
(2,848 |
) |
|
|
|
|
Cash flows from
financing activities: |
|
|
|
Repayments on revolving lines of credit |
(5,000 |
) |
|
— |
|
Borrowings on revolving lines of credit |
21,945 |
|
|
24,986 |
|
Principal
payments on term loans |
(2,699 |
) |
|
(2,699 |
) |
Contingent consideration paid |
— |
|
|
(3,750 |
) |
Treasury
stock purchases |
— |
|
|
(2,602 |
) |
Dividends
paid |
(498 |
) |
|
(504 |
) |
Net cash
provided by financing activities |
13,748 |
|
|
15,431 |
|
|
|
|
|
Net decrease in
cash and cash equivalents |
(5,499 |
) |
|
(2,198 |
) |
Cash and cash
equivalents at beginning of the period |
6,625 |
|
|
5,474 |
|
|
|
|
|
Cash and cash equivalents at end of the
period |
$ |
1,126 |
|
|
$ |
3,276 |
|
|
|
|
|
|
|
|
|
Investor Contact:
John E. Kiernan
Senior Vice President and Chief Financial Officer
(239) 226-2000
JKiernan@alicoinc.com
Alico (NASDAQ:ALCO)
Historical Stock Chart
From Mar 2024 to Apr 2024
Alico (NASDAQ:ALCO)
Historical Stock Chart
From Apr 2023 to Apr 2024