alco-10q_20200630.htm

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

For the transition period

from____________________

to_________________________

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 June 30, 2020

		or

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 100	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 7,491,642 shares of common stock outstanding at August 5, 2020.

ALICO, INC.

FORM 10-Q

For the three and nine months ended June 30, 2020 and 2019

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	25
Item 3. Quantitative and Qualitative Disclosures About Market Risk	36
Item 4. Controls and Procedures	36
Part II - OTHER INFORMATION	37
Item 1. Legal Proceedings	37
Item 1A. Risk Factors	37
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	38
Item 3. Defaults Upon Senior Securities	38
Item 4. Mine Safety Disclosures	38
Item 5. Other Information	38
Item 6. Exhibits	39
Signatures	40

PART I

Item 1. Condensed Consolidated Financial Statements

Index to Condensed Consolidated Financial Statements

	Page
Condensed Consolidated Balance Sheets as of June 30, 2020 (Unaudited) and September 30, 2019	1
Condensed Consolidated Statements of Operations for the three and nine months ended June 30, 2020 and 2019 (Unaudited)	2
Condensed Consolidated Statements of Changes in Equity for the three and nine months ended June 30, 2020 and 2019 (Unaudited)	3
Condensed Consolidated Statements of Cash Flows for the nine months ended June 30, 2020 and 2019 (Unaudited)	5
Notes to Condensed Consolidated Financial Statements (Unaudited)	6

ALICO, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)

	June 30,			September 30,
	2020			2019
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	80,426		$	18,630
Accounts receivable, net		909			713
Inventories		29,253			40,143
Assets held for sale		1,366			1,442
Prepaid expenses and other current assets		1,645			1,049
Total current assets		113,599			61,977

Restricted cash		784			5,208
Property and equipment, net		351,077			345,648
Goodwill		2,246			2,246
Other non-current assets		2,226			2,309
Total assets	$	469,932		$	417,388

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	4,503		$	4,163
Accrued liabilities		5,803			7,769
Long-term debt, current portion		5,130			5,338
Deferred retirement obligations		5,226			5,226
Income taxes payable		2,802			5,536
Other current liabilities		1,139			919
Total current liabilities		24,603			28,951

Long-term debt:
Principal amount, net of current portion		145,810			158,111
Less: deferred financing costs, net		(1,195	)		(1,369	)
Long-term debt less current portion and deferred financing costs, net		144,615			156,742
Lines of credit		64,380			—
Deferred income tax liabilities, net		31,353			32,125
Other liabilities		246			172
Total liabilities		265,197			217,990
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 7,486,108 and 7,476,513 shares outstanding at June 30, 2020 and September 30, 2019, respectively		8,416			8,416
Additional paid in capital		20,181			19,781
Treasury stock, at cost, 930,037 and 939,632 shares held at June 30, 2020 and September 30, 2019, respectively		(31,539	)		(31,943	)
Retained earnings		202,488			198,049
Total Alico stockholders' equity		199,546			194,303
Noncontrolling interest		5,189			5,095
Total stockholders' equity		204,735			199,398
Total liabilities and stockholders' equity	$	469,932		$	417,388

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 June 30,						Nine Months Ended June 30,
	2020			2019			2020			2019
Operating revenues:
Alico Citrus	$	25,360		$	56,819		$	85,336		$	118,539
Water Resources and Other Operations		762			746			2,306			2,326
Total operating revenues		26,122			57,565			87,642			120,865
Operating expenses:
Alico Citrus		19,508			31,141			67,866			73,597
Water Resources and Other Operations		394			420			1,325			1,768
Total operating expenses		19,902			31,561			69,191			75,365
Gross profit		6,220			26,004			18,451			45,500
General and administrative expenses		2,556			2,682			8,269			10,786
Income from operations		3,664			23,322			10,182			34,714
Other (expense) income, net:
Interest expense		(1,603	)		(1,745	)		(4,599	)		(5,625	)
Gain on sale of real estate, property and equipment and assets held for sale		154			114			3,017			137
Change in fair value of derivatives	—				—		—				(989	)
Other (expense) income		44			8			(20	)		18
Total other (expense) income, net		(1,405	)		(1,623	)		(1,602	)		(6,459	)
Income before income taxes		2,259			21,699			8,580			28,255
Income tax provision		171			5,483			2,028			7,082
Net income		2,088			16,216			6,552			21,173
Net loss (income) attributable to noncontrolling interests		8			28			(94	)		151
Net income attributable to Alico, Inc. common stockholders	$	2,096		$	16,244		$	6,458		$	21,324
Per share information attributable to Alico, Inc. common stockholders:
Earnings per common share:
Basic	$	0.28		$	2.17		$	0.86		$	2.85
Diluted	$	0.28		$	2.17		$	0.86		$	2.85
Weighted-average number of common shares outstanding:
Basic		7,486			7,470			7,481			7,470
Diluted		7,493			7,471			7,493			7,494

Cash dividends declared per common share	$	0.09		$	0.06		$	0.27		$	0.18

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 June 30, 2020

					Additional									Total			Non-
	Common stock				Paid In			Treasury			Retained			Alico, Inc.			controlling			Total
	Shares		Amount		Capital			Stock			Earnings			Equity			Interest			Equity
Balance at March 31, 2020		8,416	$	8,416	$	20,174		$	(31,784	)	$	201,065		$	197,871		$	5,197		$	203,068
Net income (loss)		—		—		—			—			2,096			2,096			(8	)		2,088
Dividends ($0.09/share)		—		—		—			—			(673	)		(673	)		—			(673	)
Stock-based compensation:
Directors		—		—		(70	)		245			—			175			—			175
Executives and Managers		—		—		77			—			—			77			—			77
Balance at June 30, 2020		8,416	$	8,416	$	20,181		$	(31,539	)	$	202,488		$	199,546		$	5,189		$	204,735

For the Nine Months Ended June 30, 2020

					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, 2019		8,416	$	8,416	$	19,781		$	(31,943	)	$	198,049		$	194,303		$	5,095	$	199,398
Net income		—		—		—			—			6,458			6,458			94		6,552
Dividends ($0.27/share)		—		—		—			—			(2,019	)		(2,019	)		—		(2,019	)
Treasury stock purchases		—		—		—			(238	)		—			(238	)		—		(238	)
Stock-based compensation:
Directors		—		—		(112	)		642			—			530			—		530
Executives and Managers		—		—	512				—			—			512			—		512
Balance at June 30, 2020		8,416	$	8,416	$	20,181		$	(31,539	)	$	202,488		$	199,546		$	5,189	$	204,735

ALICO, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED)

(in thousands)

For the Three Months Ended June 30, 2019

					Additional							Total		Non-
	Common stock				Paid In		Treasury			Retained		Alico, Inc.		controlling			Total
	Shares		Amount		Capital		Stock			Earnings		Equity		Interest			Equity
Balance at March 31, 2019		8,416	$	8,416	$	19,733	$	(32,496	)	$	166,193	$	161,846	$	5,355		$	167,201
Net income (loss)		—		—		—		—			16,244		16,244		(28	)		16,216
Dividends ($0.06/share)		—