Alico, Inc.
[Pages:49]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 March 31, 2019
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
(State or other jurisdiction of incorporation or organization)
59-0906081
(I.R.S. Employer Identification No.)
10070 Daniels Interstate Court, Suite 100, Fort Myers, FL
(Address of principal executive offices)
33913
(Zip Code)
239-226-2000
(Registrant's telephone number, including area code)
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
?
Non-accelerated filer
?
Emerging Growth Company
?
Accelerated filer ? Smaller Reporting 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 ?
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Common Stock
Trading Symbol(s) ALCO
Name of each exchange on which registered NASDAQ Global Market
There were 7,470,031 shares of common stock outstanding atMay 3, 2019.
ALICO, INC. FORM 10-Q For the three and six months ended March 31, 2019 and 2018 Table of Contents
Part I - FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements
1
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
25
Item 3. Quantitative and Qualitative Disclosures About Market Risk
37
Item 4. Controls and Procedures
37
Part II - OTHER INFORMATION
Item 1. Legal Proceedings
38
Item 1A. Risk Factors
40
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
40
Item 3. Defaults Upon Senior Securities
40
Item 4. Mine Safety Disclosures
40
Item 5. Other Information
40
Item 6. Exhibits
41
Signatures
42
Part 1 - FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements.
Index to Condensed Consolidated Financial Statements
Page
Condensed Consolidated Balance Sheets as of March 31, 2019 (Unaudited) and September 30, 2018
1
Condensed Consolidated Statements of Operations for the three and six months ended March 31, 2019 and 2018 (Unaudited)
2
Condensed Consolidated Statements of Changes in Equity for the three and six months ended March 31, 2019 and 2018 (Unaudited)
3
Condensed Consolidated Statements of Cash Flows for the six months ended March 31, 2019 and 2018 (Unaudited)
5
Notes to Condensed Consolidated Financial Statements (Unaudited)
6
Current assets: Cash and cash equivalents Accounts receivable, net Inventories Assets held for sale Prepaid expenses and other current assets Total current assets
ALICO, INC. CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)
ASSETS
March 31, 2019
(Unaudited)
September 30, 2018
$
606 $
25,260
13,997
2,544
36,111
41,033
1,403
1,391
946
833
53,063
71,061
Restricted cash Property and equipment, net Goodwill Deferred financing costs, net of accumulated amortization Other non-current assets
Total assets
7,004
7,000
342,930
340,403
2,246
2,246
44
136
2,802
2,576
$
408,089 $
423,422
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities:
Accounts payable Accrued liabilities Long-term debt, current portion Income taxes payable Other current liabilities
Total current liabilities
$
7,372 $
3,764
5,988
9,226
5,313
5,275
1,468
2,320
437
913
20,578
21,498
Long-term debt: Principal amount, net of current portion Less: deferred financing costs, net
Long-term debt less current portion and deferred financing costs, net Lines of credit Deferred income tax liabilities Deferred gain on sale Deferred retirement obligations Other liabilities
Total liabilities
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 and 8,416,145 shares issued and 7,462,803 and 8,199,957 shares outstanding at March 31, 2019 and September 30, 2018, respectively Additional paid in capital Treasury stock, at cost, 953,342 and 216,188 shares held at March 31, 2019 and September 30, 2018, respectively Retained earnings
Total Alico stockholders' equity Noncontrolling interest
Total stockholders' equity
Total liabilities and stockholders' equity
$
See accompanying notes to the condensed consolidated financial statements.
1
163,599 (1,465 )
162,134 24,962 28,930
-- 3,938
346 240,888
--
8,416 19,733 (32,496 ) 166,193 161,846
5,355 167,201 408,089 $
169,074 (1,563 )
167,511 2,685
25,153 24,928
4,052 --
245,827
--
8,416 20,126 (7,536 ) 151,111 172,117
5,478 177,595 423,422
ALICO, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in thousands, except per share amounts)
Operating revenues: Alico Citrus Water Resources and Other Operations Total operating revenues
Operating expenses: Alico Citrus Water Resources and Other Operations Total operating expenses
Gross profit: General and administrative expenses Income from operations Other (expense) income:
Interest expense Gain on sale of real estate, property and equipment and assets held for sale Change in fair value of derivatives Other income, net
Total other expenses, net Income (loss) before income taxes Income tax provision (benefit) Net income (loss) Net loss attributable to noncontrolling interests Net income (loss) attributable to Alico, Inc. common stockholders
Per share information attributable to Alico, Inc. common stockholders: Earnings (loss) per common share:
Basic Diluted Weighted-average number of common shares outstanding: Basic Diluted
Three Months Ended March 31,
2019
2018
Six Months Ended March 31,
2019
2018
$
47,823 $
34,709 $
61,720 $
51,788
698
891
1,580
1,345
48,521
35,600
63,300
53,133
31,582 625
32,207 16,314
4,654 11,660
26,110 1,657
27,767 7,833 3,073 4,760
42,456 1,348
43,804 19,496
8,104 11,392
42,405 2,313
44,718 8,415 6,959 1,456
(1,963 )
(2,239 )
(3,880 )
(4,494 )
1
99
23
1,835
(33)
--
(989 )
--
23
--
10
144
(1,972 )
(2,140 )
(4,836 )
(2,515 )
9,688
2,620
6,556
(1,059 )
2,228
8,150
1,599
(4,267 )
7,460
(5,530 )
4,957
3,208
87
16
123
24
$
7,547 $
(5,514 ) $
5,080 $
3,232
$
1.01 $
(0.67) $
0.68 $
0.39
$
1.01 $
(0.67) $
0.68 $
0.39
7,463 7,469
8,256 8,256
7,471 7,506
8,251 8,310
Cash dividends declared per common share
$
0.06 $
0.06 $
0.12 $
0.12
See accompanying notes to the condensed consolidated financial statements.
2
ALICO, INC. CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(in thousands)
For the three months ended March 31, 2019
Common stock
Shares
Amount
Additional Paid In Capital
Treasury Stock
Retained Earnings
Total Alico, Inc. Equity
Noncontrolling
Interest
Total Equity
Balance at December 31, 2018 Net Income (loss) Dividends ($0.06/share) Treasury stock purchases Stock-based compensation:
Directors Executives Executive forfeiture
Balance at March 31, 2019
8,416 $ -- -- --
8,416 $ -- -- --
--
--
--
--
--
--
20,384
$ (32,817) $ 159,094
$
155,077 $
--
--
7,547
7,547
--
--
(448 )
(448 )
--
--
--
--
(83 )
321
--
255
--
--
(823 )
--
--
238 255 (823 )
8,416 $ 8,416 $
19,733
$ (32,496) $ 166,193
$
161,846 $
5,442 $ (87 ) -- --
-- -- --
160,519 7,460 (448 ) --
238 255 (823 )
5,355 $
167,201
For the six months ended March 31, 2019
Common stock
Shares
Amount
Additional Paid In Capital
Treasury Stock
Retained Earnings
Total Alico, Inc. Equity
Noncontrolling
Interest
Total Equity
Balance at September 30, 2018 Net Income (loss) Dividends ($0.12/share) Treasury stock purchases ASC 610-20 adoption Stock-based compensation:
Directors Executives Executive forfeiture
Balance at March 31, 2019
8,416 $ -- -- -- --
8,416 $ -- -- -- --
--
--
--
--
--
--
20,126
$ (7,536) $ 151,111
$
172,117 $
--
--
5,080
5,080
--
--
(895 )
(895 )
--
(25,576 )
--
(25,576 )
--
--
10,897
10,897
(140 )
616
--
570
--
--
(823 )
--
--
476 570 (823 )
8,416 $ 8,416 $
19,733
$ (32,496) $ 166,193
$
161,846 $
5,478 $ (123 )
-- -- --
-- -- --
177,595 4,957 (895 )
(25,576 ) 10,897
476 570 (823 )
5,355 $
167,201
3
Common stock
Shares
Amount
Balance at December 31, 2017 Net loss Dividends ($0.06/share) Treasury stock purchases Stock-based compensation:
Directors Executives
8,416 -- -- --
-- --
8,416 -- -- --
-- --
Balance at March 31, 2018
8,416
8,416
For the three months ended March 31, 2018
Additional Paid In Capital
Treasury Stock
Retained Earnings
18,890 -- -- --
(82 ) 242
(6,275 ) -- --
(206 )
273 --
148,285 (5,514 ) (494 ) --
-- --
19,050
(6,208 )
142,277
Total Alico, Inc. Equity
Noncontrolling
Interest
169,316 (5,514 ) (494 ) (206 )
191 242
4,720 (16 ) -- --
-- --
163,535
4,704
Total Equity
174,036 (5,530 ) (494 ) (206 )
191 242
168,239
For the six months ended March 31, 2018
Common stock
Shares
Amount
Additional Paid In Capital
Treasury Stock
Retained Earnings
Total Alico, Inc. Equity
Noncontrolling
Interest
Total Equity
Balance at September 30, 2017 Net Income (loss) Dividends ($0.12/share) Treasury stock purchases Stock-based compensation:
Directors Executives
8,416 $ -- -- --
8,416 $ -- -- --
--
--
--
--
18,694
$ (6,502) $ 140,033
$
160,641 $
--
--
3,232
3,232
--
--
(988 )
(988 )
--
(206 )
--
(206 )
(118 )
500
--
382
474
--
--
474
4,728 $ (24 ) -- --
-- --
165,369 3,208 (988 ) (206 )
382 474
Balance at March 31, 2018
8,416 $ 8,416 $
19,050
$ (6,208) $ 142,277
$
163,535 $
4,704 $
168,239
See accompanying notes to the condensed consolidated financial statements. 4
ALICO, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in thousands)
Net cash provided by (used in) operating activities: Net income Adjustments to reconcile net income to net cash provided by (used in) operating activities: Deferred gain on sale of sugarcane land Depreciation, depletion and amortization Deferred income tax provision (benefit) Gain on sale of real estate, property and equipment and assets held for sale Change in fair value of derivatives Non-cash interest expense on deferred gain on sugarcane land Stock-based compensation expense Other Changes in operating assets and liabilities: Accounts receivable Inventories Prepaid expenses and other assets Accounts payable and accrued expenses Income tax payable Other liabilities Net cash provided by (used in) operating activities
Six Months Ended March 31,
2019
2018
$
4,957 $
3,208
-- 6,951
73 (23 ) 989 -- 223 (51 )
(282 ) 6,922 (4,306 ) (1,835 )
-- 688 856 (300 )
(11,453 ) 4,922 92 370 (852 ) (130 ) 6,068
(12,229 ) 9,194 (620 ) (533 ) -- (1,014 ) (251 )
Cash flows from investing activities:
Purchases of property and equipment Net proceeds from sale of property and equipment and assets held for sale Deposits on purchase of citrus trees Notes receivable
Net cash (used in) provided by investing activities
(9,524 ) 202 (515 ) 50
(9,787 )
(7,438 ) 24,612
-- (379 ) 16,795
Cash flows from financing activities: Repayments on revolving lines of credit Borrowings on revolving lines of credit Principal payments on term loans Treasury stock purchases Payment on termination of Global Ag agreement Dividends paid Capital lease obligation payments Net cash used in financing activities
(41,360 ) 63,637 (5,437 ) (25,576 ) (11,300 )
(895 ) --
(20,931 )
(21,424 ) 21,424 (6,715 )
(206 ) --
(988 ) (8 )
(7,917 )
Net (decrease) increase in cash and cash equivalents and restricted cash Cash and cash equivalents and restricted cash at beginning of the period
(24,650 ) 32,260
Cash and cash equivalents and restricted cash at end of the period
$
See accompanying notes to the condensed consolidated financial statements.
5
7,610 $
8,627 3,395
12,022
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