Alico, Inc. (“Alico” or the “Company”) (NASDAQ:ALCO), today announces financial results for the second quarter and six months ended March 31, 2016.
 
    Three Months Ended March 31,   Six Months Ended March 31,
    2016   2015   Change   2016   2015   Change
                                 
Adjusted Non-GAAP Measures                                
EBITDA   $ 20,837     $ 16,676     $ 4,161     25.0 %   $ 23,220     $ 21,037     $ 2,183     10.4 %
Earnings per Diluted Common Share   $ 1.02     $ 1.04     $ (0.02 )   (1.9 ) %   $ 0.72     $ 0.92     $ (0.20 )   (21.7 ) %
Free Cash Flow   $ 24,226     $ 9,846     $ 14,380     146.0 %   $ 7,558     $ (4,829 )   $ 12,387     NM
Free Cash Flow per Diluted Common Share   $ 2.92     $ 1.19     $ 1.73     145.4 %   $ 0.91     $ (0.62 )   $ 1.53     NM
                                 
GAAP Measures                                
Net income attributable to common stockholders   $ 8,734     $ 4,226     $ 4,508     106.7 %   $ 5,722     $ 9,433     $ (3,711 )   (39.3 ) %
Earnings Per Diluted Common Share   $ 1.05     $ 0.51     $ 0.54     105.9 %   $ 0.69     $ 1.21     $ (0.52 )   (43.0 ) %
Net cash provided by (used in) operating activities   $ 26,919     $ 12,499     $ 14,420     115.4 %   $ 12,138     $ (3,947 )   $ 16,085     NM
NM = Not Meaningful
 

Orange Co. Division Results

Orange Co.’s 2016 crop production is projected to be lower than its previous harvest season.  Total pound solids are projected to decline by approximately 15-17% and box production by 11-13%.  Orange Co.’s early and mid-season box production finished lower by approximately 17% compared to the prior year, but its late season production is expected to be more stable with a projected box production decrease of approximately 4-6% compared to last year.  The USDA estimates the entire Florida orange crop will decrease by 21.5% this season, and Orange Co. believes these declines are due to extreme weather patterns, such as El Nino, as well as citrus greening.  Orange Co.’s late season harvesting activities were accelerated this year, and the Orange Co. quarterly financial results have been positively affected by this accelerated activity.

On March 4, 2016, the Florida Commissioner of Agriculture exercised his authority under the Emergency Exemptions provisions of the Federal Insecticide, Fungicide and Rodenticide Act to allow use of certain foliar bactericide applications.  Florida growers can use these products until the Environmental Protection Agency completes its review of a specific exemption petition submitted by the Florida Department of Agriculture and Consumer Services.  These bactericides are approved and successfully applied on other permanent crops throughout the United States.  Orange Co. began application of these bactericides to all of its groves in April 2016.  Orange Co. is encouraged by the potential of foliar bactericide treatments to enhance the overall health of citrus trees and thereby mitigate the impact of citrus greening.

Citrus production for the second quarter and six months ended March 31, 2016 and 2015 is summarized in the following table.

(boxes and total pound solids in thousands)                              
                                   
    Three Months Ended March 31,     Six Months Ended March 31,
    2016   2015   Change     2016   2015   Change
                                   
Boxes   4,787     4,403     384     8.7 %       6,294     5,851     443     7.6 %
Total Pound Solids   27,116     25,872     1,244     4.8 %     34,047     33,372     675     2.0 %
Average Pound Solids Per Box   5.85     6.10     (0.25 )   (4.1 )%     5.73     5.95     (0.22 )   (3.7 )%
Price Per Pound Solids - Early-Mids   $ 2.27     $ 1.96     $ 0.31     15.8 %     $ 2.18     $ 1.95     $ 0.23     11.8 %
Price Per Pound Solids - Valencias   $ 2.42     $ 2.15     $ 0.27     12.6 %     $ 2.42     $ 2.15     $ 0.27     12.6 %
                                                               

Orange Co.’s total costs of production in fiscal year 2016 are expected to remain in line with the prior year, but the cost per box has increased by approximately $0.12, from $7.00 to $7.12, due to expected decreased box production for the season.  To date, operating expenses increased over the prior periods largely due to selling more boxes in the second quarter and first six months of fiscal year 2016 compared to the same periods in fiscal year 2015.

Conservation and Environmental Resources Division Results

For the six months ended March 31, 2016, Conservation and Environmental Resources (“CER”) revenues of $1.7 million were earned primarily from calf sales with a 667,000 increase in pounds sold generating $1.5 million of increased revenue partially offset by a ($0.4) million decrease due to the price per pound declining from $2.18 to $1.68 year over year.  The 667,000 increase in pounds sold was due to the timing of calf sales as CER held an additional 1,000 calves in inventory at September 30, 2015 which would have historically been sold prior to year-end.  CER operating expenses increased by $0.8 million for the six months ended March 31, 2016 compared to the six months ended March 31, 2015 due to the timing of additional pounds sold.

Other Corporate Financial Information

Alico continues to invest in information technology, management talent and strategic acquisition activities, which has increased its general and administrative costs. Corporate G&A expenses for the six months ended March 31, 2016 totaled $6.8 million compared to $9.0 million for the six months ended March 31, 2015, a decrease of ($2.2) million.  The decrease relates primarily to $3.4 million in non-recurring professional and legal fees associated with the Orange-Co and Silver Nip acquisitions in fiscal year 2015 offset by certain fiscal year 2016 expenses including $0.4 million in legal fees related to the shareholder litigation and $0.4 million in bonuses.

Other expense, net for the six months ended March 31, 2016 was $4.4 million compared to $8.3 million of other income for the six months ended March 31, 2015.  The decrease of $12.7 million is primarily attributable to a $12.7 million decrease in partial gain recognition on the sale of the sugarcane land and a $1.3 million increase in interest expense offset by non-recurring fiscal year 2015 losses including a $1.0 million loss on extinguishment of debt and a $0.5 million asset impairment.

The Company paid a second quarter cash dividend of $0.06 per share on its outstanding common stock on April 15, 2016, to shareholders of record at March 31, 2016 and repurchased 14,310 shares of common stock at an average cost of $37.62 per share in the quarter. 

The Company ended the quarter with term debt, net of cash and cash equivalents, of $196.5 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 http://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, 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 March 31,   Six Months Ended March 31,
    2016   2015   2016   2015
                 
Net income attributable to common stockholders   $ 8,734     $ 4,226     $ 5,722     $ 9,433  
Interest expense   2,475     2,257     4,978     3,636  
Provision for income taxes   6,102     1,127     4,027     4,890  
Depreciation and amortization   4,036     3,505     8,044     6,489  
EBITDA   21,347     11,115     22,771     24,448  
                 
Asset impairment       541         541  
Transaction costs   105     274     502     3,853  
Acquired citrus inventory fair value adjustments       4,202         4,202  
Loss on extinguishment of debt       17         964  
Payments on consulting agreements   142     500     446     500  
Litigation expenses related to shareholder lawsuit   3         403      
(Gains) losses on sale of real estate   (760 )   27     (902 )   (13,471 )
                 
Adjusted EBITDA   $ 20,837     $ 16,676     $ 23,220     $ 21,037  
                 
                 
                 
                 
Adjusted Earnings Per Common Share                
(in thousands)                
    Three Months Ended March 31,   Six Months Ended March 31,
    2016   2015   2016   2015
                 
Net income attributable to common stockholders   $ 8,734     $ 4,226     $ 5,722     $ 9,433  
Loss on extinguishment of debt       17         964  
Asset impairment       541         541  
Transaction costs   105     274     502     3,853  
Litigation expenses related to shareholder lawsuit   3         403      
Acquired citrus inventory fair value adjustments       4,202         4,202  
Payments on consulting agreements   142     500     446     500  
Gains on sale of real estate   (760 )   27     (902 )   (13,471 )
Tax impact   209     (1,171 )   (186 )   1,164  
                 
Adjusted net income   $ 8,433     $ 8,616     $ 5,985     $ 7,186  
                 
Diluted common shares   8,303     8,272     8,309     7,815  
                 
Adjusted Earnings per Diluted Common Share   $ 1.02     $ 1.04     $ 0.72     $ 0.92  
                 
                 
                 
Adjusted Free Cash Flow                
(in thousands)                
    Three Months Ended March 31,   Six Months Ended March 31,
    2016   2015   2016   2015
                 
Net cash provided by (used in) operating activities   $ 26,919     $ 12,499     $ 12,138     $ (3,947 )
Adjustments for non-recurring items:                
Transaction costs   105     274     502     3,853  
Payments on consulting agreements   142     500     446     500  
Litigation expenses related to shareholder lawsuit   3         403      
Capital expenditures   (2,943 )   (3,427 )   (5,931 )   (5,235 )
Adjusted Free Cash Flow   $ 24,226     $ 9,846     $ 7,558     $ (4,829 )
                 
Diluted common shares   8,303     8,272     8,309     7,815  
                 
Adjusted Free Cash Flow per Diluted Common Share   $ 2.92     $ 1.19     $ 0.91     $ (0.62 )

Alico utilizes Adjusted EBITDA 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, Adjusted Free Cash Flow and Adjusted Free Cash Flow per Diluted Common Share 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 Free Cash Flow is defined as cash provided by operations less capital expenditures adjusted for non-recurring transactions. The Company uses Adjusted Free Cash Flow and Adjusted Free Cash Flow per Diluted Common Share 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.

ALICO, INC.
CONDENSED COMBINED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in thousands, except share and per share amounts)
       
  March 31,   September 30,
  2016   2015
ASSETS      
Current assets:      
Cash and cash equivalents $ 3,552     $ 5,474  
Accounts receivable, net 24,766     3,137  
Inventories 46,421     58,273  
Income tax receivable 2,088     2,088  
Prepaid expenses and other current assets 1,312     1,791  
Total current assets 78,139     70,763  
       
Property and equipment, net 379,100     381,099  
Goodwill 2,246     2,246  
Deferred financing costs, net of accumulated amortization 2,598     2,978  
Other non-current assets 1,769     3,002  
Total assets $ 463,852     $ 460,088  
       
LIABILITIES AND STOCKHOLDERS' EQUITY      
Current liabilities:      
Accounts payable $ 6,810     $ 4,407  
Accrued liabilities 10,817     13,815  
Long-term debt, current portion 4,511     4,511  
Income taxes payable 4,027      
Deferred tax liability, current portion 151     151  
Obligations under capital leases, current portion 277     277  
Other current liabilities 359     974  
Total current liabilities 26,952     24,135  
       
Long-term debt 195,589     200,970  
Lines of credit 5,000      
Deferred tax liability 25,581     25,628  
Deferred gain on sale 28,432     29,122  
Deferred retirement obligations 4,170     4,134  
Obligations under capital leases 588     588  
Total liabilities 286,312     284,577  
       
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 and8,416,145 shares issued and 8,302,063 and 8,325,580 shares outstanding at March31, 2016 and September 30, 2015, respectively 8,416     8,416  
Additional paid in capital 18,257     19,795  
           
Treasury stock, at cost, 114,082 and 90,565 shares held at March 31, 2016 andSeptember 30, 2015, respectively (5,151 )   (3,962 )
Retained earnings 151,229     146,455  
Total Alico stockholders' equity 172,751     170,704  
Noncontrolling interest 4,789     4,807  
Total stockholders' equity 177,540     175,511  
Total liabilities and stockholders' equity $ 463,852     $ 460,088  
ALICO, INC.
CONDENSED COMBINED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (UNAUDITED)
(in thousands, except per share amounts)
                 
    Three Months Ended March 31,   Six Months Ended March 31,
    2016   2015   2016   2015
Operating revenues:                
Orange Co.   $ 70,982     $ 58,557     $ 90,277     $ 75,550  
Conservation and Environmental Resources   644     309     1,651     1,145  
Other Operations   263     1,146     565     2,387  
Total operating revenues   71,889     60,012     92,493     79,082  
                 
Operating expenses:                
Orange Co.   51,716     46,383     69,324     60,597  
Conservation and Environmental Resources   581     623     2,141     1,368  
Other Operations   77     1,330     147     2,169  
Total operating expenses   52,374     48,336     71,612     64,134  
                 
Gross profit   19,515     11,676     20,881     14,948  
General and administrative expenses   2,849     3,499     6,774     8,982  
                 
Income from operations   16,666     8,177     14,107     5,966  
                 
Other (expense) income:                
Investment and interest income, net               2  
Interest expense   (2,475 )   (2,257 )   (4,978 )   (3,636 )
Gain (loss) on sale of real estate   760     (27 )   902     13,471  
Loss on extinguishment of debt       (17 )       (964 )
Impairment of asset held for sale       (541 )       (541 )
Other (expense) income, net   (125 )   18     (300 )   25  
Total other (expense) income, net   (1,840 )   (2,824 )   (4,376 )   8,357  
                 
Income before income taxes   14,826     5,353     9,731     14,323  
Provision for income taxes   6,102     1,127     4,027     4,890  
                 
Net income   8,724     4,226     5,704     9,433  
Net loss attributable to noncontrolling interests   10         18      
Net income attributable to Alico, Inc. common stockholders   8,734     4,226     5,722     9,433  
Comprehensive income attributable to noncontrolling interests                
Comprehensive income attributable to Alico, Inc. common stockholders   $ 8,734     $ 4,226     $ 5,722     $ 9,433  
                 
Per share information attributable to Alico, Inc. common stockholders:                
Earnings per common share:                
Basic   $ 1.05     $ 0.51     $ 0.69     $ 1.21  
Diluted   $ 1.05     $ 0.51     $ 0.69     $ 1.21  
Weighted-average number of common shares outstanding:                
Basic   8,286     8,272     8,294     7,815  
Diluted   8,303     8,272     8,309     7,815  
                 
Cash dividends declared per common share   $ 0.06     $ 0.06     $ 0.12     $ 0.12  
ALICO, INC.
CONDENSED COMBINED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
(in thousands)
       
  Six Months Ended March 31,
  2016   2015
       
Net cash provided by (used in) operating activities: $ 12,138     $ (3,947 )
       
Cash flows from investing activities:      
Acquisition of citrus businesses, net of cash acquired     (264,586 )
Proceeds on sale of sugarcane land     97,151  
Purchases of property and equipment (5,931 )   (5,235 )
Other 141     1,093  
Net cash used in investing activities (5,790 )   (171,577 )
       
Cash flows from financing activities:      
Proceeds from term loans     182,500  
Repayments on revolving line of credit (45,132 )   (49,942 )
Borrowings on revolving line of credit 50,132     63,528  
Repayment of term loan     (34,000 )
Principal payments on term loans (5,381 )   (12,489 )
Contingent consideration paid (3,750 )    
Treasury stock purchases (3,141 )   (512 )
Financing costs     (2,895 )
Dividends paid (998 )   (885 )
Net cash (used in) provided by financing activities (8,270 )   145,305  
       
Net decrease in cash and cash equivalents (1,922 )   (30,219 )
Cash and cash equivalents at beginning of the period 5,474     31,130  
       
Cash and cash equivalents at end of the period $ 3,552     $ 911  

 

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 Feb 2024 to Mar 2024 Click Here for more Alico Charts.
Alico (NASDAQ:ALCO)
Historical Stock Chart
From Mar 2023 to Mar 2024 Click Here for more Alico Charts.