10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


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

	For the Quarterly Period Ended December 31, 2022

	or

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


For the transition period
	from____________________	to_________________________

Commission File Number: 0-261

ALICO, INC.

(Exact name of registrant as specified in its charter)


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 200	Fort Myers	FL	33913
(Address of principal executive offices)			(Zip Code)


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

Securities registered pursuant to Section 12(b) of the Act:


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

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. ☑Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☑Yes ☐ No

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


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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

There were 7,599,492 shares of common stock outstanding at February 3, 2023.

ALICO, INC.

FORM 10-Q

For the three months ended December 31, 2022 and 2021

Table of Contents


Part I - FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3. Quantitative and Qualitative Disclosures About Market Risk	33
Item 4. Controls and Procedures	33
Part II - OTHER INFORMATION	35
Item 1. Legal Proceedings	35
Item 1A. Risk Factors	35
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	35
Item 3. Defaults Upon Senior Securities	35
Item 4. Mine Safety Disclosure	35
Item 5. Other Information	35
Item 6. Exhibits	36
Signatures	37

PART I

Item 1. Condensed Consolidated Financial Statements

Index to Condensed Consolidated Financial Statements


Condensed Consolidated Balance Sheets as of December 31, 2022 (Unaudited) and September 30, 2022	1
Condensed Consolidated Statements of Operations for the three months ended December 31, 2022 and 2021 (Unaudited)	2
Condensed Consolidated Statements of Changes in Equity for the three months ended December 31 2022 and 2021 (Unaudited)	3
Condensed Consolidated Statements of Cash Flows for the three months ended December 31, 2022 and 2021 (Unaudited)	4
Notes to Condensed Consolidated Financial Statements (Unaudited)	5

ALICO, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)


	December 31,			September 30,
	2022			2022
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	269		$	865
Accounts receivable, net		4,369			324
Inventories		28,998			27,682
Income tax receivable		2,199			1,116
Assets held for sale		174			205
Prepaid expenses and other current assets		1,546			1,424
Total current assets		37,555			31,616
Property and equipment, net		370,095			372,479
Goodwill		2,246			2,246
Other non-current assets		3,094			2,914
Total assets	$	412,990		$	409,255

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	2,951		$	3,366
Accrued liabilities		3,306			9,062
Long-term debt, current portion		3,035			3,035
Other current liabilities		933			1,062
Total current liabilities		10,225			16,525
Long-term debt:
Principal amount, net of current portion		102,902			103,661
Less: deferred financing costs, net		(716	)		(748	)
Long-term debt less current portion and deferred financing costs, net		102,186			102,913
Lines of credit		19,045			4,928
Deferred income tax liabilities, net		35,589			35,589
Other liabilities		341			435
Total liabilities		167,386			160,390
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 7,592,937 and 7,586,995 shares outstanding at December 31, 2022 and September 30, 2022, respectively		8,416			8,416
Additional paid in capital		19,943			19,784
Treasury stock, at cost, 823,208 and 829,150 shares held at December 31, 2022 and September 30, 2022, respectively		(27,802	)		(27,948	)
Retained earnings		239,960			243,490
Total Alico stockholders' equity		240,517			243,742
Noncontrolling interest		5,087			5,123
Total stockholders' equity		245,604			248,865
Total liabilities and stockholders' equity	$	412,990		$	409,255

See accompanying notes to the condensed consolidated financial statements.

ALICO, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(in thousands, except per share amounts)


	Three Months Ended December 31,
	2022			2021
Operating revenues:
Alico Citrus	$	10,268		$	14,748
Land Management and Other Operations		320			589
Total operating revenues		10,588			15,337
Operating expenses:
Alico Citrus		14,295			13,386
Land Management and Other Operations		94			140
Total operating expenses		14,389			13,526
Gross (loss) profit		(3,801	)		1,811
General and administrative expenses		2,509			2,584
Loss from operations		(6,310	)		(773	)
Other income (expense), net:
Interest expense		(1,148	)		(901	)
Gain on sale of real estate, property and equipment and assets held for sale		3,189			8,445
Other income, net		—			9
Total other income, net		2,041			7,553
(Loss) income before income taxes		(4,269	)		6,780
Income tax benefit		(1,083	)		(3,300	)
Net (loss) income		(3,186	)		10,080
Net loss attributable to noncontrolling interests		36			51
Net (loss) income attributable to Alico, Inc. common stockholders	$	(3,150	)	$	10,131
Per share information attributable to Alico, Inc. common stockholders:
Earnings per common share:
Basic	$	(0.41	)	$	1.34
Diluted	$	(0.41	)	$	1.34
Weighted-average number of common shares outstanding:
Basic		7,593			7,535
Diluted		7,593			7,542

Cash dividends declared per common share	$	0.05		$	0.50

See accompanying notes to the condensed consolidated financial statements.

ALICO, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED)

(in thousands)


For the Three Months Ended December 31, 2022

					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, 2022		8,416	$	8,416	$	19,784	$	(27,948	)	$	243,490		$	243,742		$	5,123		$	248,865
Net loss		—		—		—		—			(3,150	)		(3,150	)		(36	)		(3,186	)
Dividends ($0.05/share)		—		—		—		—			(380	)		(380	)		—			(380	)
Stock-based compensation:
Directors		—		—		11		145			—			156			—			156
Executives and Managers		—		—		92		—			—			92			—			92
Employees		—		—		56		1			—			57			—			57
Balance at December 31, 2022		8,416	$	8,416	$	19,943	$	(27,802	)	$	239,960		$	240,517		$	5,087		$	245,604

ALICO, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED)

(in thousands)


For the Three Months Ended December 31, 2021

					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, 2021 (Restated)		8,416	$	8,416	$	19,989	$	(29,853	)	$	246,163		$	244,715		$	5,402		$	250,117
Net income		—		—		—		—			10,131			10,131			(51	)		10,080
Dividends ($0.50/share)		—		—		—		—			(3,770	)		(3,770	)		—			(3,770	)
Exercise of stock options		—		—		15		155			—			170			—			170
Stock-based compensation:
Directors		—		—		23		156			—			179			—			179
Executives and Managers		—		—		53		143			—			196			—			196
Balance at December 31, 2021 (Restated)		8,416	$	8,416	$	20,080	$	(29,399	)	$	252,524		$	251,621		$	5,351		$	256,972

See accompanying notes to the condensed consolidated financial statements.

ALICO, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(in thousands)


	Three Months Ended December 31,
	2022			2021
Net cash used in operating activities:
Net (loss) income	$	(3,186	)	$	10,080
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Depreciation, depletion and amortization		3,950			3,836
Debt issue costs expense		36			43
Gain on sale of real estate, property and equipment and assets held for sale		(3,189	)		(8,445	)
Loss on disposal of long-lived assets		1,915			137
Deferred income tax benefit		—			(4,876	)
Stock-based compensation expense		305			375
Other		8			—
Changes in operating assets and liabilities:
Accounts receivable		(4,045	)		(2,796	)
Inventories		(1,316	)		(2,573	)
Prepaid expenses		(122	)		(418	)
Income tax receivable		(1,083	)		1,576
Other assets		108			117
Accounts payable and accrued liabilities		(2,822	)		(6,328	)
Other liabilities		(224	)		(336	)
Net cash used in operating activities		(9,665	)		(9,608	)

Cash flows from investing activities:
Purchases of property and equipment		(3,453	)		(4,193	)
Acquisition of citrus groves		(29	)		(136	)
Net proceeds from sale of real estate, property and equipment and assets held for sale		3,287			8,604
Change in deposits on purchase of citrus trees		(301	)		(196	)
Net cash (used in) provided by investing activities		(496	)		4,079

Cash flows from financing activities:
Repayments on revolving lines of credit		(8,902	)		(16,319	)
Borrowings on revolving lines of credit		23,019			25,696
Principal payments on term loans		(759	)		(1,072	)
Exercise of stock options		—			170
Dividends paid		(3,793	)		(3,763	)
Net cash provided by financing activities		9,565			4,712

Net decrease in cash and cash equivalents and restricted cash		(596	)		(817	)
Cash and cash equivalents and restricted cash at beginning of the period		865			886

Cash and cash equivalents and restricted cash at end of the period	$