UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

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

Commission File Number: 0-261

Alico, Inc.

Florida		59-0906081
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
P.O. Box 338, LaBelle, FL		33975
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: 863-675-2966

N/A

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. þ Yes o No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (paragraph 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). þ Yes o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o		Accelerated filer þ		Non-accelerated filer o		Smaller reporting company o
				(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). oYes þ No

There were 7,370,043 shares of common stock, par value $1.00 per share, outstanding at August 2, 2009.

 

 

Index

Alico, Inc.
Form 10-Q
For the quarter ended June 30, 2009

Part I. Financial Information
Item 1. Unaudited Financial Statements and Footnotes		3
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		23
Item 3. Quantitative and Qualitative Disclosures about Market Risk		32
Item 4. Controls and Procedures		32
Part II. Other Information
Item 1. Legal Proceedings		32
Item 1A. Risk Factors		33
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		33
Item 3. Defaults Upon Senior Securities		33
Item 4. Submission of Matters to a Vote of Security Holders		33
Item 5. Other Information		33
Item 6. Exhibits		33
Signatures		34
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1
Exhibit 32.2

Part I. Financial Information

Item 1. Financial Statements

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands except per share data)

		Three months ended								Nine months ended
		June 30,								June 30,
		2009				2008				2009				2008
Operating revenue
Agricultural operations		$	30,424			$	41,535			$	80,905			$	107,102
Non-agricultural operations			757				611				2,544				2,009
Real estate operations			—				1				1,372				3,870
Total operating revenue			31,181				42,147				84,821				112,981
Operating expenses
Agricultural operations			26,873				35,292				76,010				94,023
Non-agricultural operations			334				204				907				448
Real estate operations			231				294				819				1,727
Total operating expenses			27,438				35,790				77,736				96,198
Gross profit			3,743				6,357				7,085				16,783
Corporate general and administrative			1,671				3,568				7,483				10,365
Profit (loss) from continuing operations			2,072				2,789				(398	)			6,418
Other income (expenses):
Profit on sales of bulk real estate, net			—				—				1,546				817
Interest and investment income (loss), net			(151	)			1,184				826				6,582
Interest expense			(1,122	)			(1,400	)			(4,459	)			(4,969	)
Other			(33	)			97				6,985				82
Total other income (expense) net			(1,306	)			(119	)			4,898				2,512
Income from continuing operations before income taxes			766				2,670				4,500				8,930
Provision for (benefit from) income taxes			157				(3,129	)			2,010				(752	)
Income from continuing operations			609				5,799				2,490				9,682
Loss from discontinued operations, net of taxes			—				(816	)			—				(927	)
Net income		$	609			$	4,983			$	2,490			$	8,755
Weighted-average number of shares outstanding			7,367				7,364				7,368				7,364
Weighted-average number of shares outstanding assuming dilution			7,370				7,389				7,374				7,383
Per share amounts- income from continuing operations:
Basic		$	0.08			$	0.79			$	0.34			$	1.31
Diluted		$	0.08			$	0.78			$	0.34			$	1.31
Per share amounts- net income
Basic		$	0.08			$	0.68			$	0.34			$	1.19
Diluted		$	0.08			$	0.67			$	0.34			$	1.19
Dividends		$	0.14			$	0.28			$	0.55			$	0.83

See accompanying Notes to Condensed Consolidated Financial Statements.

ALICO, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)

		(Unaudited)
		June 30,				September 30,
		2009				2008
ASSETS
Current assets:
Cash and cash equivalents		$	25,465			$	54,370
Investments			3,404				24,267
Accounts receivable, net			4,245				5,394
Federal income tax receivable			4,200				6,388
Mortgages and notes receivable			72				2,830
Inventories			16,295				27,451
Deferred tax asset			1,630				1,507
Other current assets			822				923
Total current assets			56,133				123,130
Mortgages and notes receivable, net of current portion			7,271				4,774
Investments, deposits and other non-current assets			9,606				6,975
Deferred tax assets			6,054				6,056
Cash surrender value of life insurance, designated			5,815				7,585
Property, buildings and equipment			183,252				181,429
Less: accumulated depreciation			(58,639	)			(56,017	)
Total assets		$	209,492			$	273,932

(continued)

ALICO, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (continued)
(in thousands)

		(Unaudited)
		June 30,				September 30,
		2009				2008
LIABILITIES & STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	2,252			$	1,847
Income taxes payable			—				281
Notes payable			5,051				5,470
Accrued expenses			2,977				3,372
Dividend payable			1,013				2,027
Accrued ad valorem taxes			1,408				2,270
Other current liabilities			924				2,933
Total current liabilities			13,625				18,200
Notes payable, net of current portion			76,281				132,288
Deferred retirement benefits, net of current portion			3,186				4,151
Commissions and deposits payable			2,616				3,800
Total liabilities			95,708				158,439
Stockholders’ equity:
Common stock			7,377				7,376
Additional paid in capital			9,552				9,474
Treasury stock			(376	)			(64	)
Accumulated other comprehensive income (loss)			7				(92	)
Retained earnings			97,224				98,799
Total stockholders’ equity			113,784				115,493
Total liabilities and stockholders’ equity		$	209,492			$	273,932

See accompanying Notes to Condensed Consolidated Financial Statements.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

		Nine months ended
		June 30,
		2009				2008
Net cash provided by operating activities		$	18,596			$	26,622
Cash flows from investing activities:
Purchases of property and equipment			(5,141	)			(4,418	)
Purchases of investments			(9,127	)			(40,654	)
Proceeds from sales of property and equipment			466				1,478
Proceeds from sales of investments			26,948				48,318
Note receivable collections			1,776				2,844
Net cash provided by investing activities			14,922				7,568
Cash flows from financing activities:
Principal payments on notes payable			(80,462	)			(37,232	)
Proceeds from notes payable			24,036				21,959
Proceeds from stock option exercises			16				31
Treasury stock purchases			(934	)			(1,196	)
Dividends paid			(5,079	)			(6,073	)
Net cash used for financing activities			(62,423	)			(22,511	)
Net (decrease) increase in cash and cash equivalents		$	(28,905	)		$	11,679
Cash and cash equivalents:
At beginning of period		$	54,370			$	31,599
At end of period		$	25,465			$	43,278
Supplemental disclosures of cash flow information
Cash paid for interest, net of amount capitalized		$	4,818			$	6,664
Cash paid for income taxes		$	1,482			$	—
Supplemental schedule of non-cash investing activities:
Reclassification of breeding herd to property and equipment		$	552			$	458

See accompanying notes to Condensed Consolidated Financial Statements.

ALICO, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands except for per share data)

1. Basis of financial statement presentation:

The accompanying condensed consolidated financial statements (“Financial Statements”) include the accounts of Alico, Inc. (“Alico”) and its wholly owned subsidiaries, Alico Land Development, Inc., Agri-Insurance Company, Ltd. (“Agri”), Alico-Agri, Ltd., Alico Plant World, LLC and Bowen Brothers Fruit, LLC (“Bowen”) (collectively referred to as the “Company”) after elimination of all significant intercompany balances and transactions.

The following Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and note disclosures normally included in annual financial statements prepared in accordance with United States generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations. The Company believes that the disclosures made are adequate to make the information not misleading.

The accompanying unaudited condensed consolidated financial statements have been prepared on a basis consistent with the accounting principles and policies reflected in the Company’s annual report for the fiscal year ended September 30, 2008. In the opinion of Management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting only of normal recurring accruals) necessary for a fair presentation of its consolidated financial position at June 30, 2009 and September 30, 2008 and the consolidated results of operations and cash flows for the three and nine month periods ended June 30, 2009 and 2008.

The Company is involved in agriculture, which is of a seasonal nature and subject to the influence of natural phenomena and wide price fluctuations. The results of operations for the stated periods are not necessarily indicative of results to be expected for the full year. Certain items from 2008 have been reclassified to conform to the 2009 presentation.

2. Investments, deposits and other non-current assets:

The Company’s investments, deposits and other non-current assets consisted of the following:

		June 30, 2009												September 30, 2008
		(Unaudited)
		Current				Non-current				Total				Current				Non-current				Total
Auction rate municipal bonds		$	—			$	3,841			$	3,841			$	20,591			$	2,755			$	23,346
Auction rate mutual funds (municipals)			—				1,111				1,111				—				1,325				1,325
U.S. Treasury notes and bonds			—				—				—				1,599				—				1,599
Corporate bonds			2,008				—				2,008				140				—				140
Certificates of deposit			1,396				117				1,513				1,937				—				1,937
Available for sale securities			3,404				5,069				8,473				24,267				4,080				28,347
Cooperative retains receivable, net			—				1,252				1,252				—				1,095				1,095
Stock in agricultural cooperatives			—				732				732				—				804				804
Escrowed funds			—				150				150				—				150				150
Intangibles			—				614				614				—				629				629
Tax certificates			—				1,305				1,305				—				—				—
Other			—				484				484				—				217				217
Total		$	3,404			$	9,606			$	13,010			$	24,267			$	6,975			$	31,242

The Company reports available for sales securities at estimated fair value. Unrealized gains and losses occurring solely due to changes in market interest rates are recorded as other comprehensive income, net of related deferred taxes, until realized. During the quarter ended June 30, 2009, the Company recognized losses totaling $213 thousand which were determined to be other than temporary impairments in fair values. These losses related to the auction rate municipal bonds and mutual funds held by the Company, for which there is not currently an active market.

The cost and estimated fair value of available for sale securities at June 30, 2009 and September 30, 2008 were as follows:

		June 30, 2009																September 30, 2008
		(Unaudited)
						Gross								Estimated								Gross								Estimated
						Unrealized								Fair								Unrealized								Fair
		Cost				Gains				Losses				Value				Cost				Gains				Losses				Value
Municipal bonds		$	3,841			$	—			$	—			$	3,841			$	23,493			$	3			$	(150	)		$	23,346
Certificates of Deposit			1,513				—				—				1,513				1,937				—				—				1,937
US Treasury Notes & Bonds			—				—				—				—				1,592				7				—				1,599
Mutual Funds			1,111				—				—				1,111				1,325				—				—				1,325
Corporate bonds			2,001				7				—				2,008				150				—				(10	)			140
Total		$	8,466			$	7			$	—			$	8,473			$	28,497			$	10			$	(160	)		$	28,347
Non current portion															(5,069	)															(4,080	)
Current														$	3,404															$	24,267

The aggregate fair value of investments in debt instruments (net of mutual funds of $1,111) as of June 30, 2009 by contractual maturity date consisted of the following:

Due within 1 year		$	1,396
Due between 1 and 2 years			2,008
Due between 2 and 3 years			—
Due between 3 and 4 years			—
Due between 4 and 5 years			—
Due beyond five years			3,958
Total		$	7,362

There were no gross unrealized losses that were deemed to be temporarily impaired at June 30, 2009.

3. Mortgages and notes receivable:

The balances of the Company’s mortgages and notes receivable were as follows:

		June 30,				September 30,
		2009				2008
		(unaudited)
Mortgage notes receivable on retail land sales		$	186			$	205
Mortgage notes receivable on bulk land sales			52,320				54,108
Note receivable- other			86				90
Total mortgage and notes receivable			52,592				54,403
Less: Deferred revenue			(45,246	)			(46,793	)
Discount on notes to impute market interest			(3	)			(6	)
Current portion			(72	)			(2,830	)
Non-current portion		$	7,271			$	4,774

The mortgage note receivable on bulk land sales relates to a parcel in Lee County, Florida referred to as the “East parcel” which was sold to the Ginn Companies (“Ginn”). In July 2005, Alico’s subsidiary, Alico-Agri, entered into a sales contract for the East property, consisting of approximately 4,538 acres for a total sales price of $62.9 million. At the time of the sale, Alico-Agri received a down payment of $6.2 million and a mortgage note of $56.6 million in exchange for the East parcel.

Alico-Agri records real estate sales following the provisions in Financial Accounting Standards Board, or FASB, Statement of Financial Accounting Standards No. 66, “Accounting for Sales of Real Estate,” Under these guidelines, gains from commercial or bulk land sales are not recognized until payments received for property to be developed within two years after the sale represent a 20% continuing interest in the property or for property to be developed after two years, a 25% continuing interest in the property according to the installment sales method. The continuing interest thresholds for gain recognition have not been met for the East contract and Alico-Agri is recognizing gains proportionate to principal receipts through deferred gain accounts which serve to discount the mortgage note receivables under the installment method.

In November 2008, Alico-Agri received a principal payment of $1.8 million on the East contract. Alico-Agri recognized a profit of $1.5 million as non-operating revenue under the installment method related to the receipt. Additionally during the quarter ended December 31, 2008, the Company recognized $1.2 million of operating revenue upon the expiration of an option contract that had previously been deferred.

Interest was scheduled to accrue on the unpaid balance of the note and be paid in quarterly installments. The note was scheduled to bear interest at HSH LIBOR plus 150 basis points from September 29, 2008 to September 28, 2009, HSH LIBOR plus 200 basis points from September 29, 2009 to September 28, 2010 and HSH LIBOR plus 250 basis points thereafter until the note is paid in full.

In April 2009, the purchaser defaulted on the East parcel contract. Under the terms of the contract, a quarterly interest payment of $283 thousand was due on March 30, 2009 but the payment was not received. Alico-Agri has initiated foreclosure proceedings and ceased accruing interest on the note at March 31, 2009. A development order for the property allows up to 336 residential units. Pursuant to the contract, Ginn is entitled to receive a release of 399 acres in exchange for prior principal payments. When the foreclosure becomes final, the net mortgage note receivable of $7.1 million (consisting of the note balance of $52.3 million less deferred revenue of $45.2 million), plus accrued interest through March 31, 2009 of $0.3 million, reduced by the associated commissions payable account of $2.6 million will be reclassified as basis in the property.

4. Inventories:

A summary of the Company’s inventories is shown below:

		June 30,				September 30,
		2009				2008
		(unaudited)
Unharvested fruit crop on trees		$	10,702			$	14,322
Unharvested sugarcane			1,508				5,978
Beef cattle			3,464				5,065
Unharvested sod			320				449
Plants and vegetables			270				1,563
Rock, fill and other			31				74
Total inventories		$	16,295			$	27,451

The following schedule details net realizable value adjustments to the Company’s inventories for the periods reported. All adjustments to inventory resulted from changing market conditions for the respective crops and were realized as cost of sales in the period of adjustment (unaudited):

		Three months ended								Nine months ended
		June 30,								June 30,
		2009				2008				2009				2008
Unharvested citrus		$	—			$	—			$	878			$	—
Unharvested sugarcane			716				—				1,286				—
Beef cattle			—				549				1,011				1,552
Unharvested sod			—				461				538				461
Unharvested vegetables			—				—				658				261
Rock, fill and other			—				—				—				—
Total		$	716			$	1,010			$	4,371			$	2,274

5. Income taxes:

The provision for income taxes for the three and nine months ended June 30, 2009 and June 30, 2008 is summarized as follows (unaudited):

		Three months ended June 30,												Nine months ended June 30,
		2009												2009
		Continuing				Discontinued								Continuing				Discontinued
		Operations				Operations				Total				Operations				Operations				Total
Current
Federal		$	134			$	—			$	134			$	1,755			$	—			$	1,755
State			23				—				23				433				—				433
Total current			157				—				157				2,188				—				2,188
Deferred
Federal			—				—				—				(121	)			—				(121	)
State			—				—				—				(57	)			—				(57	)
Total deferred			—				—				—				(178	)			—				(178	)
Total Provision		$	157			$	—			$	157			$	2,010			$	—			$	2,010

		Three months ended June 30,												Nine months ended June 30,
		2008												2008
		Continuing				Discontinued								Continuing				Discontinued
		Operations				Operations				Total				Operations				Operations				Total
Current
Federal		$	(380	)		$	(420	)		$	(800	)		$	1,414			$	(477	)		$	937
State			546				(77	)			469				865				(87	)			778
Total current			166				(497	)			(331	)			2,279				(564	)			1,715
Deferred
Federal			(2,431	)			—				(2,431	)			(2,529	)			—				(2,529	)
State			(864	)			—				(864	)			(502	)			—				(502	)
Total deferred			(3,295	)			—				(3,295	)			(3,031	)			—				(3,031	)
Total Provision		$	(3,129	)		$	(497	)		$	(3,626	)		$	(752	)		$	(564	)		$	(1,316	)

The Internal Revenue Service (“IRS”) is currently auditing Alico’s amended tax returns for the fiscal years ended August 31, 2007, 2006 and 2005 and the short period return filed for the transition month ended September 30, 2007. Alico has extended the statute of limitations on the originally filed 2005 tax return to June 30, 2010 pursuant to a request by IRS Exams.

6. Indebtedness:

The following table reflects outstanding debt under the Company’s various loan agreements:

		Revolving line								Mortgage note
		of credit				Term note				payable				All other				Total
June 30, 2009
Principal balance outstanding			28,540				46,749				6,017				26				81,332
Remaining available credit			46,460				—				—				—				46,460
Effective interest rate			2.80	%			6.79	%			6.68	%		Various
Scheduled maturity date		Aug. 2012				Sept. 2018				Mar. 2014				Various
Collateral		Real Estate				Real Estate				Real Estate				Various
September 30, 2008
Principal balance outstanding			80,740				50,000				6,967				51				137,758
Remaining available credit			44,260				—				—				—				44,260
Effective interest rate			4.25	%			6.79	%			6.68	%		Various
Scheduled maturity date		Aug. 2011				Sept. 2018				Mar. 2014				Various
Collateral		Real Estate				Real Estate				Real Estate				Various

Alico, Inc. has a Term Note, a Mortgage and a Revolving Line of Credit (RLOC) with Farm Credit of Southwest Florida. All three agreements are cross collateralized by 7,680 acres of real estate in Hendry County used for farm leases, sugarcane and citrus production. The Term Note and Revolving Line of Credit are additionally collateralized by 43,847 acres of real estate in Hendry County used for cattle ranching, farm and recreational leases.

The Term Note calls for equal payments of principal and interest of $1.7 million per quarter over a ten year term until maturity. The Mortgage note calls for monthly principal payments of $106 thousand plus accrued interest until maturity.

On March 30, 2009 the Company modified its RLOC with Farm Credit of Southwest Florida. According to the terms of the modification, the total availability of funds pursuant to the RLOC was reduced from $125 million to $75 million. Additionally, several covenants were modified as follows: a) the covenant requiring the Company to maintain stockholder equity of at least $110 million was eliminated in its entirety b) the minimum current ratio was increased to 2.5 to 1 from 2.0 to 1 and c) the fixed charge coverage ratio was replaced by a debt coverage ratio requiring the Company to maintain a debt coverage of not less than 1.10 to 1 on a rolling four quarter basis. The maturity date of the RLOC was extended from August 1, 2011 to August 1, 2012. The interest rate index was changed from 3 month LIBOR to 1 month LIBOR, and the interest rate spreads increased by 100 basis points. The Company also pledged an additional 10,147 acres of real estate in Hendry County, Florida bringing the total acres pledged to 51,527. In addition to the covenants discussed above, the agreements set limitations on the extension of loans or additional borrowings by Alico or any subsidiary. The covenants also restrict Alico’s activities regarding investments, liens, borrowing and leasing. The RLOC provides $75.0 million which may be used for general corporate purposes including: (i) the normal operating needs of Alico and its operating divisions, (ii) the purchase of capital assets and (iii) the payment of dividends. The Revolving Line of Credit also allows for an annual extension at the lender’s option.

The Company’s Chairman of the Board of Directors, John R. Alexander, was a member of the Board of Directors of the Company’s primary lender, Farm Credit of Southwest Florida from 1992 to April 2009. During his tenure, Mr. Alexander abstained from voting on matters that directly affected the Company.

Maturities of the Company’s debt were as follows:

		June 30,
		2009
Due within 1 year		$	5,051
Due between 1 and 2 years			5,305
Due between 2 and 3 years			5,580
Due between 3 and 4 years			34,424
Due between 4 and 5 years			5,885
Due beyond five years			25,087
Total		$	81,332

Interest costs expensed and capitalized to property, buildings and equipment were as follows (unaudited):

		Three months ended								Nine months ended
		June 30,								June 30,
		2009				2008				2009				2008
Interest expense		$	1,122			$	1,400			$	4,459			$	4,969
Interest capitalized			11				11				38				26
Total interest cost		$	1,133			$	1,411			$	4,497			$	4,995

As an agricultural credit cooperative, Farm Credit of Southwest Florida is owned by the member-borrowers who purchase stock and earn participation certificates in the cooperative. Allocations of patronage are made to members on an annual basis according to the proportionate amount of interest paid by the member. Allocations are made in cash and non-cash participation certificates. The Company reduced its interest expense by $34 thousand and $101 thousand during the three and nine months ended June 30, 2009, respectively, and by $1.0 million during the three and nine months ended June 30, 2008, respectively for patronage allocations. Patronage receivable is included with investments, deposits and other non-current assets.

7. Discontinued Operations:

Effective June 30, 2008, the Company ceased operating its Alico Plant World facility. The Company is currently leasing the Alico Plant World facilities to a commercial greenhouse operator and has also sold a portion of the equipment used to operate the greenhouse. The results of Alico Plant World’s operations have been reported as discontinued operations.

8. Disclosures about reportable segments:

Alico has six reportable segments: Bowen, Citrus Groves, Sugarcane, Cattle, Real Estate and Leasing. Alico’s operations are located in Florida. Alico accounts for intersegment sales and transfers as if the sales or transfers were to third parties, that is, at current market prices. Descriptions of the various activities of the segments are described fully in the Company’s annual report on Form 10-K.

Although the Vegetable segment does not meet the quantitative thresholds to be considered as a reportable segment, information about this segment may be useful and has been included in the schedules below. For a description of the business activities of the Vegetable segment please refer to Item 1 of the Company’s most recent annual report on Form 10-K.

The following tables summarize the performance of the Company’s segments for the unaudited three and nine month periods ended June 30, 2009 and 2008, and the related assets and depreciation at June 30, 2009 (unaudited) and September 30, 2008:

		Three months ended								Nine months ended
		June 30,								June 30,
		2009				2008				2009				2008
Revenues (from external customers except as noted)
Bowen		$	10,818			$	17,451			$	27,461			$	44,294
Intersegment sales through Bowen			3,305				4,109				8,274				9,667
Citrus groves			14,876				17,528				35,698				40,679
Sugarcane			307				1,581				7,368				9,341
Cattle			2,838				3,049				5,207				6,451
Real estate			—				1				1,372				3,870
Leasing			703				504				2,249				1,617
Vegetables			1,378				1,522				4,670				5,460
Revenue from segments			34,225				45,745				92,299				121,379
Other operations			261				511				796				1,269
Less: intersegment revenues eliminated			(3,305	)			(4,109	)			(8,274	)			(9,667	)
Total operating revenue		$	31,181			$	42,147			$	84,821			$	112,981
Operating expenses
Bowen			9,960				16,595				25,862				42,579
Intersegment sales through Bowen			3,305				4,109				8,274				9,667
Citrus groves			10,851				11,476				27,205				27,625
Sugarcane			723				1,622				9,703				9,240
Cattle			2,705				3,412				6,092				7,741
Real estate			231				294				819				1,727
Leasing			311				146				830				315
Vegetables			2,417				1,392				6,641				5,505
Segment operating expenses			30,503				39,046				85,426				104,399
Other operations			240				853				584				1,466
Less: intersegment expenses eliminated			(3,305	)			(4,109	)			(8,274	)			(9,667	)
Total operating expenses		$	27,438			$	35,790			$	77,736			$	96,198
Gross profit (loss):
Bowen			858				856				1,599				1,715
Citrus groves			4,025				6,052				8,493				13,054
Sugarcane			(416	)			(41	)			(2,335	)			101
Cattle			133				(363	)			(885	)			(1,290	)
Real estate			(231	)			(293	)			553				2,143
Leasing			392				358				1,419				1,302
Vegetables			(1,039	)			130				(1,971	)			(45	)
Gross profit from segments			3,722				6,699				6,873				16,980
Other			21				(342	)			212				(197	)
Gross Profit		$	3,743			$	6,357			$	7,085			$	16,783

		Three months ended								Nine months ended
		June 30,								June 30,
		2009				2008				2009				2008
Depreciation, depletion and amortization:
Bowen		$	87			$	89			$	263			$	267
Citrus groves			535				555				1,598				1,666
Sugarcane			324				392				1,178				1,321
Cattle			411				461				1,251				1,402
Leasing			58				23				151				67
Vegetable			54				38				154				97
Total segment depreciation and amortization			1,469				1,558				4,595				4,820
Other depreciation, depletion and amortization			248				455				1,065				1,370
Total depreciation, depletion and amortization		$	1,717			$	2,013			$	5,660			$	6,190

		June 30,				September 30,
		2009				2008
		(unaudited)
Total assets:
Bowen		$	2,025			$	2,581
Citrus groves			44,304				49,201
Sugarcane			41,992				43,525
Cattle			16,880				18,343
Leasing			4,569				2,370
Vegetables			3,061				4,213
Segment assets			112,831				120,233
Other Corporate assets			96,661				153,699
Total assets		$	209,492			$	273,932

9. Stock Compensation Plans:

The Board of Directors of the Company may grant options, stock appreciation rights, and/or restricted stock to certain directors and employees. No stock options or stock appreciation rights were granted during the nine months ended June 30, 2009 or 2008.

The Company measures the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. The cost is recognized over the period during which an employee is required to provide service in exchange for the award (usually the vesting period). If an equity award is modified after the grant date, incremental compensation cost will be recognized in an amount equal to the excess of the fair value of the modified award over the fair value of the original award immediately before the modification.

In fiscal year 2006, the Company began granting restricted shares to certain key employees as long term incentives. The restricted shares vest in accordance with the terms and description outlined in the tables following. The payment of each installment is subject to continued employment with the Company. At June 30, 2009 and September 30, 2008 there were 31,278 and 27,707 restricted shares, respectively, vested in accordance with these grants.

The following table summarizes the Company’s restricted share awards granted to date including compensation expense related to such grants for the nine month periods ended June 30, 2009 and 2008:

																		Weighted
										Compensation				Compensation				Average
										Expense				Expense				Grant date
						Fair Market Value				Recognized for				Recognized for				Fair value
Grant Date		Shares Granted				on Date of Grant				2009				2008				Per share
April 2006			20,000			$	908								129
October 2006			20,000				1,239								453
January 2008			25,562				1,040				185				417
September 2008			7,500				331				72				—
Total			73,062			$	3,518			$	257			$	999			$	48.15

The shares granted in April 2006 were recognized as forfeited in September 2008. 4,000 of the shares granted in October 2006 related to past service and were immediately vested and an additional 4,000 shares vested September 30, 2007. The remaining shares under the October 2006 grant vested June 30, 2008.

A grant of 25,562 restricted shares was made to four senior executives in January 2008 with a fair value of $40.67 per share, in order to replace previous retirement benefits offered. 7,707 of the shares granted in January 2008 related to previously vested retirement benefits and vested immediately. 3,571 of the shares vested in January 2009. The remaining 14,284 shares granted in January 2008 vest 20% annually in January of each year until fully vested. The shares granted in September 2008 vest 20% annually beginning in September 2010 until fully vested.