Alico, Inc. (“Alico”) (Nasdaq:ALCO), an agribusiness and natural
resources company, today announced financial results for the second
quarter and six months ended March 31, 2015. Net income applicable
to common stock for the second quarter of fiscal 2015 was $2.8
million, or $0.34 per basic and diluted share, compared to net
income of $4.7 million, or $0.64 per basic and diluted share, in
the second quarter of fiscal 2014. Adjusted EBITDA, excluding
non-recurring income and expense items, was $15.7 million for the
second quarter of fiscal 2015 compared to $10.8 million for the
second quarter of fiscal 2014.
Fiscal Year 2015 Second Quarter
Results
For the second quarter of fiscal year 2015,
total operating revenue was $55.1 million as compared to $40.6
million for the second quarter of fiscal year 2014. The increase in
operating revenue was due primarily to acquisitions in our Citrus
Groves segment offset by decreased sales in the Improved Farmland
segment as a result of the recent disposition of our sugarcane
operations.
Second quarter fiscal year 2015 revenue included
Citrus Groves revenue of $50.4 million compared to $22.6 million
from the same period of fiscal year 2014, an increase of
approximately $27.8 million. This increase was due primarily
to our December 1, 2014 acquisition of certain citrus and other
assets of Orange-Co, LP (“Orange-Co”).
We sold approximately 3.1 million boxes of Early
and Mid-Season oranges in the second quarter of 2015 compared to
approximately 1.4 million boxes in the same period of fiscal year
2014. Production of Early and Mid-Season pound solids totaled
18.7 million in the second quarter of 2015 compared to pound solids
production of approximately 8.6 million in the second quarter of
2014. The market price per pound solid for Early and
Mid-Season varieties in the second quarter of fiscal year 2015 was
approximately $1.93 compared to $2.07 in the same period of fiscal
2014, a decrease of $0.14 per pound solid or 6.8%.
Improved Farmland revenue, which
previously included the results of our sugarcane operations, was
$1.0 million for the second quarter of fiscal year 2015 as compared
to $10.8 million for the same period of fiscal year 2014. On
November 21, 2014, we completed the sale of approximately 36,000
acres of land in Hendry County, Florida that had been used for
sugarcane production and land leasing.
Total operating expenses for the second quarter
of fiscal year 2015 were $45.0 million as compared to $30.7 million
for the second quarter of fiscal year 2014, an increase of $14.3
million. Operating expenses increased by approximately $25.7
million in the Citrus Groves segment primarily due to the
acquisition of Orange-Co. Operating expenses increased by
$4.2 million as a result of purchase accounting related to the
acquisition of Orange-Co. The valuation of fruit inventory
acquired from Orange-Co was marked to fair value to account for the
stage of the fruit development at the time of acquisition. We
expect approximately $3.0 million of incremental operating expenses
related the purchase accounting in the second half of fiscal year
2015. The impact of the purchase accounting on operating expenses
is non-recurring beyond fiscal year 2015.
Gross profit for the second quarter of fiscal
year 2015 was $10.1 million compared to $10.0 million for the
second quarter of fiscal year 2014. Citrus Grove gross profit
was $10.0 million for the second quarter of fiscal year 2015
compared to $7.9 million in the second quarter of fiscal year 2014.
The 2015 Citrus Groves gross profit was impacted by a $4.2 million
increase in cost of sales due to the purchase accounting related
valuation of the inventory acquired from Orange-Co.
Gross profit exclusive of the impact of the fair market valuation
of inventory increased by $4.3 million. Gross profit for Improved
Farmland was ($.3) million for the second quarter of fiscal year
2015 compared to $1.9 million for the second quarter of 2014 due to
the sale of our sugarcane operations.
Adjusted EBITDA (defined as net income excluding
interest expense, income taxes, depreciation and amortization and
non-recurring income and expense items) for the second quarter of
fiscal year 2015 was $15.7 million as compared to $10.8 million for
the second quarter of fiscal year 2014. A reconciliation of net
income to Adjusted EBITDA is provided at the end of this
release.
Adjusted Earnings per Common Share (defined as
net income excluding non-recurring income and expense items, net of
related income taxes) were $0.76 for the second quarter of fiscal
year 2015 as compared to $0.66 for the second quarter of fiscal
2014. A reconciliation of net income to Adjusted Earnings per
Common Share is provided at the end of this release.
Fiscal Year 2015 Six Months
Results
Net income for the six months ended March 31,
2015 was $10.5 million, or $1.35 per diluted share, compared to
$4.0 million, or $0.54 per diluted share, for the same period of
fiscal 2014, an increase of $6.5 million. For the six months ended
March 31, 2015, total operating revenue was $71.3 million, compared
to $55.6 million for the same period of fiscal year 2014, an
increase of $15.7 million. Increased Citrus Groves revenues
were offset by decreases in Agricultural Supply Chain Management
and Improved Farmland revenues resulting from a reduction in
external boxes handled and the sale of our sugarcane operations,
respectively.
Adjusted EBITDA in the first six months of
fiscal year 2015 was $18.5 million as compared to $14.0
million in the first six months of fiscal year 2014. The increase
of $4.5 million in Adjusted EBITDA is driven by an increase in
gross profit from the Citrus Groves segment of $7.0 million,
partially offset by a $2.9 million decrease in gross profit from
Improved Farmland’s sugarcane operations. A reconciliation of net
income to Adjusted EBITDA is provided at the end of this
release.
Adjusted Earnings per Common Share for the first
six months of fiscal year 2015 was $.084 compared to $0.71 for the
first six months of fiscal year 2014. A reconciliation of net
income to Adjusted Earnings per Common Share is provided at the end
of this release.
Balance Sheet and Liquidity
Cash used in operating activities was ($6.3)
million for the first six months of fiscal year 2015 as compared to
cash provided by operating activities of $4.6 million during the
first six months of fiscal year 2014. Availability under our
revolving lines of credit was $ 61.5 million at March 31, 2015 and
$60.0 million at September 30, 2014. The Company paid down
approximately $11.3 million of term debt in the second quarter of
fiscal year 2015. Debt net of cash and cash equivalents was
$229.2 million at March 31, 2015 and $33.8 million at September 30,
2014.
About Alico
Alico is a holding company with assets and
related operations in agriculture and natural resources. In
addition to its citrus operations, Alico is currently involved in
cattle ranching, water management, mining and other natural
resources. Our mission is to create value for our customers,
clients and shareholders by managing existing lands to their
optimal current income and total returns, opportunistically
acquiring new agricultural 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 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 and other growth opportunities; onetime
events; acquisitions and divestitures; 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
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 and Adjusted Earnings per Common Share are
important measures 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. Net
income which management considers being the most directly
comparable financial measure calculated and presented in accordance
with GAAP is reconciled to Adjusted EBITDA and Adjusted Earnings
per Common Share, as follows:
Adjusted EBITDA
|
(in thousands) |
|
Three
Months Ended March 31, |
|
Six Months
Ended March 31, |
|
|
|
2015 |
|
|
2014 |
|
|
|
2015 |
|
|
2014 |
|
|
|
|
|
|
|
|
Net
income |
|
|
2,794 |
|
|
4,697 |
|
|
$ |
10,525 |
|
$ |
3,992 |
|
Interest expense, net |
|
|
2,285 |
|
|
395 |
|
|
|
3,586 |
|
|
638 |
|
Loss on extinguishment of debt |
|
|
17 |
|
|
- |
|
|
|
964 |
|
|
- |
|
Income taxes |
|
|
950 |
|
|
2,992 |
|
|
|
4,713 |
|
|
2,445 |
|
Depreciation and amortization |
|
|
4,020 |
|
|
2,427 |
|
|
|
6,068 |
|
|
4,929 |
|
|
|
|
|
|
|
|
EBITDA |
|
|
10,066 |
|
|
10,511 |
|
|
|
25,856 |
|
|
12,004 |
|
Asset impairment |
|
|
541 |
|
|
- |
|
|
|
541 |
|
|
- |
|
Transaction costs |
|
|
774 |
|
|
260 |
|
|
|
4,353 |
|
|
2,005 |
|
Acquired citrus inventory fair
value adjustments |
|
|
4,202 |
|
|
- |
|
|
|
4,202 |
|
|
- |
|
Gain on sale of real estate |
|
|
116 |
|
|
- |
|
|
|
(16,424 |
) |
|
1 |
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
$ |
15,699 |
|
$ |
10,771 |
|
|
$ |
18,528 |
|
$ |
14,010 |
|
|
|
|
|
|
|
|
Adjusted Earnings per Common Share
|
(in thousands) |
Three
Months Ended March 31, |
|
Six Months
Ended March 31, |
|
|
2015 |
|
|
2014 |
|
|
|
2015 |
|
|
2014 |
|
|
Net
income |
$ |
2,794 |
|
$ |
4,697 |
|
|
$ |
10,525 |
|
$ |
3,992 |
|
Loss on extinguishment of debt |
|
17 |
|
|
- |
|
|
|
964 |
|
|
- |
|
Asset impairment |
|
541 |
|
|
- |
|
|
|
541 |
|
|
- |
|
Transaction costs |
|
774 |
|
|
260 |
|
|
|
4,353 |
|
|
2,005 |
|
Acquired citrus inventory fair
value adjustments |
|
4,202 |
|
|
- |
|
|
|
4,202 |
|
|
- |
|
Losses (Gains) on sales of real
estate |
|
116 |
|
|
- |
|
|
|
(16,424 |
) |
|
1 |
|
Tax impact |
|
(2,147 |
) |
|
(99 |
) |
|
|
2,418 |
|
|
(762 |
) |
|
|
|
|
|
|
Adjusted net
income |
$ |
6,297 |
|
$ |
4,858 |
|
|
$ |
6,579 |
|
$ |
5,236 |
|
|
|
|
|
|
|
Diluted shares |
|
8,272 |
|
|
7,349 |
|
|
|
7,815 |
|
|
7,349 |
|
|
|
|
|
|
|
Adjusted Earnings per
Common Share |
$ |
0.76 |
|
$ |
0.66 |
|
|
$ |
0.84 |
|
$ |
0.71 |
|
ALICO, INC. AND SUBSIDIARIES |
CONDENSED COMBINED CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME (UNAUDITED) |
(in thousands, except per share
amounts) |
|
|
|
|
|
|
|
|
|
Three Months Ended March
31, |
|
Six Months Ended March
31, |
|
|
|
2015 |
|
|
2014 |
|
|
|
2015 |
|
|
2014 |
|
Operating
revenues: |
|
|
|
|
|
|
Citrus Groves |
|
$ |
50,371 |
|
$ |
22,590 |
|
|
$ |
63,289 |
|
$ |
28,223 |
|
Agricultural Supply Chain
Management |
|
|
3,296 |
|
|
6,135 |
|
|
|
4,479 |
|
|
8,241 |
|
Improved Farmland |
|
|
982 |
|
|
10,750 |
|
|
|
2,074 |
|
|
17,282 |
|
Ranch and Conservation |
|
|
309 |
|
|
910 |
|
|
|
1,145 |
|
|
1,441 |
|
Other Operations |
|
|
164 |
|
|
257 |
|
|
|
313 |
|
|
444 |
|
Total operating revenue |
|
|
55,122 |
|
|
40,642 |
|
|
|
71,300 |
|
|
55,631 |
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
Citrus Groves |
|
|
40,349 |
|
|
14,699 |
|
|
|
50,476 |
|
|
18,243 |
|
Agricultural Supply Chain
Management |
|
|
2,740 |
|
|
5,844 |
|
|
|
4,111 |
|
|
8,169 |
|
Improved Farmland |
|
|
1,286 |
|
|
8,865 |
|
|
|
2,077 |
|
|
14,395 |
|
Ranch and Conservation |
|
|
623 |
|
|
1,171 |
|
|
|
1,368 |
|
|
1,547 |
|
Other Operations |
|
|
45 |
|
|
90 |
|
|
|
93 |
|
|
507 |
|
Total operating expenses |
|
|
45,043 |
|
|
30,669 |
|
|
|
58,125 |
|
|
42,861 |
|
|
|
|
|
|
|
|
Gross profit |
|
|
10,079 |
|
|
9,973 |
|
|
|
13,175 |
|
|
12,770 |
|
Corporate general and
administrative |
|
|
3,381 |
|
|
1,834 |
|
|
|
9,294 |
|
|
5,622 |
|
|
|
|
|
|
|
|
Income from
operations |
|
|
6,698 |
|
|
8,139 |
|
|
|
3,881 |
|
|
7,148 |
|
|
|
|
|
|
|
|
Other income (expense), net: |
|
|
|
|
|
|
Interest and investment income,
net |
|
|
- |
|
|
(9 |
) |
|
|
2 |
|
|
27 |
|
Interest expense |
|
|
(2,285 |
) |
|
(396 |
) |
|
|
(3,588 |
) |
|
(665 |
) |
Loss on extinguishment of debt |
|
|
(17 |
) |
|
- |
|
|
|
(964 |
) |
|
- |
|
Gain (loss) on sale of real
estate |
|
|
(116 |
) |
|
(1 |
) |
|
|
16,424 |
|
|
(1 |
) |
Asset impairment |
|
|
(541 |
) |
|
- |
|
|
|
(541 |
) |
|
- |
|
Other income (loss), net |
|
|
5 |
|
|
(44 |
) |
|
|
24 |
|
|
(72 |
) |
Total other income (expense),
net |
|
|
(2,954 |
) |
|
(450 |
) |
|
|
11,357 |
|
|
(711 |
) |
|
|
|
|
|
|
|
Income before income
taxes |
|
|
3,744 |
|
|
7,689 |
|
|
|
15,238 |
|
|
6,437 |
|
Income taxes |
|
|
950 |
|
|
2,992 |
|
|
|
4,713 |
|
|
2,445 |
|
|
|
|
|
|
|
|
Net
income attributable to common
shareholders |
|
|
2,794 |
|
|
4,697 |
|
|
|
10,525 |
|
|
3,992 |
|
|
|
|
|
|
|
|
Comprehensive income,
net of tax effect |
|
|
- |
|
|
- |
|
|
|
- |
|
|
- |
|
|
|
|
|
|
|
|
Comprehensive income attributable to
common shareholders |
$ |
2,794 |
|
$ |
4,697 |
|
|
$ |
10,525 |
|
$ |
3,992 |
|
|
|
|
|
|
|
|
ALICO, INC. AND SUBSIDIARIES |
CONDENSED COMBINED CONSOLIDATED BALANCE SHEETS
(UNAUDITED) |
(dollars in thousands, except share and per
share amounts) |
|
|
|
|
|
|
|
March 31,
2015 |
September 30,
2014 |
|
(unaudited) |
(unaudited) |
|
|
|
ASSETS |
|
|
Current
assets: |
|
|
Cash and cash equivalents |
$ |
2,775 |
|
$ |
31,020 |
|
Investments |
|
264 |
|
|
263 |
|
Accounts receivable, net |
|
21,206 |
|
|
8,724 |
|
Inventories |
|
58,539 |
|
|
25,469 |
|
Deferred tax asset |
|
71 |
|
|
- |
|
Assets held for sale |
|
1,509 |
|
|
59,513 |
|
Other current assets |
|
1,511 |
|
|
721 |
|
Total current
assets |
|
85,875 |
|
|
125,710 |
|
|
|
|
Investment in Magnolia
Fund |
|
998 |
|
|
1,435 |
|
Investments, deposits
and other non-current assets |
|
6,269 |
|
|
2,905 |
|
Goodwill |
|
1,146 |
|
|
- |
|
Cash surrender value of
life insurance |
|
688 |
|
|
695 |
|
Property, buildings and
equipment, net |
|
383,446 |
|
|
126,833 |
|
Total assets |
$ |
478,422 |
|
$ |
257,578 |
|
|
|
|
LIABILITIES & STOCKHOLDERS’ EQUITY |
|
|
Current
liabilities: |
|
|
Accounts payable |
$ |
4,966 |
|
$ |
2,052 |
|
Long-term debt, current
portion |
|
4,511 |
|
|
3,196 |
|
Accrued expenses |
|
8,685 |
|
|
1,934 |
|
Income taxes payable |
|
4,085 |
|
|
4,572 |
|
Dividend payable |
|
442 |
|
|
442 |
|
Accrued ad valorem taxes |
|
930 |
|
|
1,850 |
|
Capital lease obligation |
|
258 |
|
|
259 |
|
Other current liabilities |
|
751 |
|
|
6,365 |
|
Total current
liabilities |
|
24,628 |
|
|
20,670 |
|
|
|
|
Long-term debt, net of
current portion |
|
205,500 |
|
|
58,444 |
|
Line of credit |
|
21,975 |
|
|
3,160 |
|
Other liability,
noncurrent |
|
3,633 |
|
|
- |
|
Deferred gain on
sale |
|
29,140 |
|
|
- |
|
Capital lease
obligation, noncurrent |
|
839 |
|
|
839 |
|
Deferred income taxes,
net of current portion |
|
11,966 |
|
|
5,738 |
|
Deferred retirement
benefits, net of current portion |
|
3,883 |
|
|
6,877 |
|
Total
liabilities |
|
301,564 |
|
|
95,728 |
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
Stockholders’
equity: |
|
|
Preferred stock, no par value.
Authorized 1,000,000 shares; issued and outstanding, none |
|
- |
|
|
- |
|
Common stock, $1 par value;
15,000,000 shares authorized; 8,300,363 shares issued and 8,284,173
and 7,361,340 shares outstanding at March 31, 2015 and
September 30, 2014, respectively |
|
8,300 |
|
|
7,377 |
|
Additional paid in capital |
|
21,173 |
|
|
3,742 |
|
Treasury stock at cost 16,190 and
15,766 shares held at March 31, 2015 and September 30, 2014,
respectively |
|
(771 |
) |
|
(650 |
) |
Member's equity |
|
- |
|
|
15,768 |
|
Retained earnings |
|
143,222 |
|
|
135,613 |
|
Total Alico stockholders’
equity |
|
171,924 |
|
|
161,850 |
|
|
|
|
Noncontrolling interest |
|
4,934 |
|
|
- |
|
|
|
|
Total liabilities and
stockholders’ equity |
$ |
478,422 |
|
$ |
257,578 |
|
|
|
|
Investor Contact:
Mark Humphrey
Senior Vice President and Chief Financial Officer
(239) 226-2000
mhumphrey@alicoinc.com
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