Alico, Inc 10-Q for FY2021 Q1

Alico, Inc. (ALCO)

10-Q 2021-02-04 For: 2020-12-31

Added on April 06, 2026

About this 10-Q

Alico, Inc filed this 10-Q on February 4, 2021, covering the quarter ended December 31, 2020 (FY2021 Q1).

Headline figures

Quarter ended December 31, 2020, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $13.73M; up 24.8% from $11.01M a year earlier
Net income: $3.85M; up 386.1% from net income of $791K a year earlier
Diluted EPS: $0.51; up 363.6% from $0.11 a year earlier

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☑	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

	For the Quarterly Period Ended December 31, 2020

	or

☐	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934


Florida			59-0906081
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)
10070 Daniels Interstate Court
10070 Daniels Interstate Court
Suite 100	Fort Myers	FL	33913
(Address of principal executive offices)			(Zip Code)

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	ALCO	Nasdaq Global Select Market

Large Accelerated Filer	☐	Accelerated Filer	☑
Non-accelerated filer	☐	Smaller Reporting Company	☐
Emerging Growth Company	☐

Part I - FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3. Quantitative and Qualitative Disclosures About Market Risk	30
Item 4. Controls and Procedures	30
Part II - OTHER INFORMATION	31
Item 1. Legal Proceedings	31
Item 1A. Risk Factors	31
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	31
Item 3. Defaults Upon Senior Securities	31
Item 4. Mine Safety Disclosure	31
Item 5. Other Information	31
Item 6. Exhibits	32
Signatures	33


For the transition period
	from____________________	to_________________________


(239)	226-2000
(Registrant’s telephone number, including area code)

Condensed Consolidated Balance Sheets as of December 31, 2020 (Unaudited) and September 30, 2020	1
Condensed Consolidated Statements of Operations for the three months ended December 31, 2020 and 2019 (Unaudited)	2
Condensed Consolidated Statements of Changes in Equity for the three months ended December 31, 2020 and 2019 (Unaudited)	3
Condensed Consolidated Statements of Cash Flows for the three months ended December 31, 2020 and 2019 (Unaudited)	4
Notes to Condensed Consolidated Financial Statements (Unaudited)	5

	December 31,			September 30,
	2020			2020
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	2,601		$	3,163
Accounts receivable, net		5,598			4,347
Inventories		46,430			40,855
Income tax receivable	—				781
Assets held for sale		1,410			1,366
Prepaid expenses and other current assets		1,755			1,387
Total current assets		57,794			51,899

Restricted cash		—			16,524
Property and equipment, net		367,221			350,061
Goodwill		2,246			2,246
Other non-current assets		2,921			3,207
Total assets	$	430,182		$	423,937

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	1,950		$	3,533
Accrued liabilities		5,473			7,095
Long-term debt, current portion		9,090			9,145
Income taxes payable		469			—
Other current liabilities		1,031			1,385
Total current liabilities		18,013			21,158

Long-term debt:
Principal amount, net of current portion		136,472			139,106
Less: deferred financing costs, net		(1,109	)		(1,151	)
Long-term debt less current portion and deferred financing costs, net		135,363			137,955
Lines of credit		12,204			2,942
Deferred income tax liabilities, net		39,728			39,728
Other liabilities		332			372
Total liabilities		205,640			202,155
Commitments and Contingencies (Note 12)
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 7,506,160 and 7,492,524 shares outstanding at December 31, 2020 and September 30, 2020, respectively		8,416			8,416
Additional paid in capital		19,634			19,685
Treasury stock, at cost, 909,985 and 923,621 shares held at December 31, 2020 and September 30, 2020, respectively		(30,421	)		(30,779	)
Retained earnings		221,513			219,019
Total Alico stockholders' equity		219,142			216,341
Noncontrolling interest		5,400			5,441
Total stockholders' equity		224,542			221,782
Total liabilities and stockholders' equity	$	430,182		$	423,937

	Three Months Ended December 31,
	2020			2019
Operating revenues:
Alico Citrus	$	12,926		$	10,175
Land Management and Other Operations		806			830
Total operating revenues		13,732			11,005
Operating expenses:
Alico Citrus		8,147			4,840
Land Management and Other Operations	188				551
Total operating expenses		8,335			5,391
Gross profit		5,397			5,614
General and administrative expenses		2,528			2,760
Income from operations		2,869			2,854
Other income (expense), net:
Interest expense		(1,189	)		(1,544	)
Gain on sale of real estate, property and equipment and assets held for sale		3,364			25
Other income (expense)		10			(76	)
Total other income (expense), net		2,185			(1,595	)
Income before income taxes		5,054			1,259
Income tax provision		1,250			361
Net income		3,804			898
Net loss (income) attributable to noncontrolling interests		41			(107	)
Net income attributable to Alico, Inc. common stockholders	$	3,845		$	791
Per share information attributable to Alico, Inc. common stockholders:
Earnings per common share:
Basic	$	0.51		$	0.11
Diluted	$	0.51		$	0.11
Weighted-average number of common shares outstanding:
Basic		7,503			7,477
Diluted		7,503			7,491

Cash dividends declared per common share	$	0.18		$	0.09

					Additional									Total			Non-
	Common stock				Paid In			Treasury			Retained			Alico, Inc.			controlling			Total
	Shares		Amount		Capital			Stock			Earnings			Equity			Interest			Equity
Balance at September 30, 2020		8,416	$	8,416	$	19,685		$	(30,779	)	$	219,019		$	216,341		$	5,441		$	221,782
Net income (loss)		—		—		—			—			3,845			3,845			(41	)		3,804
Dividends ($0.18/share)		—		—		—			—			(1,351	)		(1,351	)		—			(1,351	)
Stock-based compensation:
Directors		—		—		20			202			—			222			—			222
Executives and Managers		—		—		(71	)		156			—			85			—			85
Balance at December 31, 2020		8,416	$	8,416	$	19,634		$	(30,421	)	$	221,513		$	219,142		$	5,400		$	224,542

(in thousands)
	Three Months Ended December 31,
	2020		2019
Alico Citrus
Early and Mid-Season	$	9,315	$	9,066
Fresh Fruit		409		735
Grove Management Services		3,092		305
Other		110		69
Total	$	12,926	$	10,175

Land Management and Other Operations
Land and Other Leasing	$	727	$	663
Other		79		167
Total	$	806	$	830

Total Revenues	$	13,732	$	11,005

(in thousands)	Carrying Value
	December 31,		September 30,
	2020		2020
East and West Ranch	$	1,410	$	1,366
Total Assets Held for Sale	$	1,410	$	1,366

	December 31, 2020				September 30, 2020
(in thousands)	Principal		Deferred Financing Costs, Net		Principal		Deferred Financing Costs, Net
Long-term debt, net of current portion:
Met Fixed-Rate Term Loans	$	81,875	$	596	$	83,438	$	621
Met Variable-Rate Term Loans		40,250		274		40,969		286
Met Citree Term Loan		4,450		35		4,512		36
Pru Loans A & B		14,807		203		15,097		207
Pru Loan E		4,180		1		4,235		1
		145,562		1,109		148,251		1,151
Less current portion		9,090		—		9,145		—
Long-term debt	$	136,472	$	1,109	$	139,106	$	1,151

(in thousands)
	December 31, 2020
Due within one year	$	9,090
Due between one and two years		10,535
Due between two and three years		22,739
Due between three and four years		10,535
Due between four and five years		10,535
Due beyond five years		94,332

Total future maturities	$	157,766

(in thousands)	December 31,			September 30,
	2020			2020
Citrus trees	$	307,384		$	296,012
Equipment and other facilities		56,617			55,593
Buildings and improvements		8,110			8,128
Total depreciable properties		372,111			359,733
Less: accumulated depreciation and depletion		(118,795	)		(115,440	)
Net depreciable properties		253,316			244,293
Land and land improvements		113,905			105,768
Property and equipment, net	$	367,221		$	350,061

	December 31, 2020
Weighted-average remaining lease term	1.36 years
Weighted-average discount rate		3.20	%

2020 Option Grant
Expected Volatility		26.0	%
Expected Term (in years)	3.61
Risk Free Rate		1.60	%

2019 Modified Option Grant
Expected Volatility		25.0	%
Expected Term (in years)	1.50
Risk Free Rate		2.52	%

(in thousands except per share amounts)	Three Months Ended December 31,
	2020		2019
Net income attributable to Alico, Inc. common stockholders	$	3,845	$	791

Weighted average number of common shares outstanding - basic		7,503		7,477
Dilutive effect of equity-based awards		—		14
Weighted average number of common shares outstanding - diluted		7,503		7,491

Net income per common share attributable to Alico, Inc. common stockholders:
Basic	$	0.51	$	0.11
Diluted	$	0.51	$	0.11

(in thousands)	Three Months Ended December 31,
Operating lease components	2020		2019
Operating leases costs recorded in General and Administrative expenses	$	132	$	52
Operating lease right-of-use asset impairment recorded in Other expenses	$	—	$	87

2019 Option Grants
Expected Volatility		30.0	%
Expected Term (in years)	4.09
Risk Free Rate		2.95	%

(in thousands, except share amounts)
	Shares			Cost
Balance as of September 30, 2020		923,621		$	30,779
Issued to employees and directors		(13,636	)		(358	)
Balance as of December 31, 2020		909,985		$	30,421

(in thousands)
	Three Months Ended December 31,					Change
	2020		2019			$			%
Operating revenues:
Alico Citrus	$	12,926	$	10,175		$	2,751			27.0	%
Land Management and Other Operations		806		830			(24	)		(2.9	)%
Total operating revenues		13,732		11,005			2,727			24.8	%

Gross profit:
Alico Citrus		4,779		5,335			(556	)		(10.4	)%
Land Management and Other Operations		618		279			339			121.5	%
Total gross profit		5,397		5,614			(217	)		(3.9	)%

General and administrative expenses		2,528		2,760			(232	)		(8.4	)%
Income from operations		2,869		2,854			15			0.5	%
Total other income (expense), net		2,185		(1,595	)		3,780		NM
Income before income taxes		5,054		1,259			3,795		NM
Income tax provision		1,250		361			889		NM
Net income		3,804		898			2,906		NM
Net loss (income) attributable to noncontrolling interests		41		(107	)		148		NM
Net income attributable to Alico, Inc. common stockholders	$	3,845	$	791		$	3,054		NM

(in thousands, except per box and per pound solids data)

	Three Months Ended
	December 31,						Change
	2020			2019			Unit			%
Operating Revenues:
Early and Mid-Season	$	9,315		$	9,066		$	249			2.7	%
Fresh Fruit		409			735			(326	)		(44.4	)%
Purchase and Resale of Fruit		57			47			10			21.3	%
Grove Management Services		3,092			305			2,787		NM
Other		53			22			31			140.9	%
Total	$	12,926		$	10,175		$	2,751			27.0	%
Boxes Harvested:
Early and Mid-Season		785			880			(95	)		(10.8	)%
Total Processed		785			880			(95	)		(10.8	)%
Fresh Fruit		48			95			(47	)		(49.5	)%
Total		833			975			(142	)		(14.6	)%
Pound Solids Produced:
Early and Mid-Season		4,132			4,856			(724	)		(14.9	)%
Total		4,132			4,856			(724	)		(14.9	)%
Pound Solids per Box:
Early and Mid-Season		5.26			5.52			(0.26	)		(4.7	)%
Price per Pound Solids:
Early and Mid-Season	$	2.25		$	1.87		$	0.38			20.3	%
Price per Box:
Fresh Fruit	$	8.52		$	7.74		$	0.78			10.1	%
Operating Expenses:
Cost of Sales	$	7,420		$	6,627		$	793			12.0	%
Harvesting and Hauling		2,079			2,465			(386	)		(15.7	)%
Purchase and Resale of Fruit		50			32			18			56.3	%
Grove Management Services		2,734			182			2,552		NM
Other		(4,136	)		(4,466	)		330			(7.4	)%
Total	$	8,147		$	4,840		$	3,307			68.3	%

Exhibit Number		Exhibit Index

3.1		Restated Certificate of Incorporation, dated February 17, 1972 (incorporated by reference to Exhibit 3.1 of Alico's filing on Form 10-K dated December 11, 2017)

3.2		Certificate of Amendment to Certificate of Incorporation, dated January 14, 1974 (incorporated by reference to Alico’s Registration Statement on Form S-8, dated December 21, 2005, Registration No. 333-130575)

3.3		Amendment to Articles of Incorporation, dated January 14, 1987 (incorporated by reference to Alico’s Registration Statement on Form S-8, dated December 21, 2005, Registration No. 333-130575)

3.4		Amendment to Articles of Incorporation, dated December 27, 1988 (incorporated by reference to Alico’s Registration Statement on Form S-8, dated December 21, 2005, Registration No. 333-130575)

3.5		By-Laws of Alico, Inc., amended and restated (incorporated by reference to Exhibit 3.6 of Alico's filing on Form 8-K dated January 15, 2021)

10.1		Eleventh Amendment and Waiver to Credit Agreement dated January 7, 2021

10.2		Danny Sutton Offer letter, dated November 15, 2017

31.1		Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 Rule 13a-14(a) certification

31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 Rule 13a-14(a) certification

32.1		Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350

32.2		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350

101.INS	*	Inline XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.

101.SCH	*	Inline XBRL Taxonomy Extension Schema Document

101.CAL	*	Inline XBRL Taxonomy Calculation Linkbase Document

101.DEF	*	Inline XBRL Taxonomy Definition Linkbase Document

101.LAB		Inline XBRL Taxonomy Label Linkbase Document

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104		The cover page for the Company’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2020, has been formatted in Inline XBRL.
*		In accordance with Rule 406T of Regulation S-T, these XBRL (eXtensible Business Reporting Language) documents are furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject to liability under these sections.

		ALICO, INC. (Registrant)

February 4, 2021	By:	/s/ John E. Kiernan
		John E. Kiernan
		President and Chief Executive Officer
		(Principal Executive Officer)


February 4, 2021	By:	/s/ Richard Rallo
		Richard Rallo
		Senior Vice President and Chief Financial Officer
		(Principal Financial and Accounting Officer)