Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis should be read in conjunction with the accompanying Condensed Consolidated Financial Statements and related Notes thereto.
Cautionary Statement Regarding Forward-Looking Information
We provide forward-looking information in this Quarterly Report on Form 10-Q, particularly in this Management’s Discussion and Analysis of Financial Condition and Results of Operations, pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Any statements in this Quarterly Report on Form 10-Q that are not historical facts are forward-looking statements. Forward-looking statements include, but are not limited to, statements that express our intentions, beliefs, expectations, strategies, predictions or any other statements relating to our future activities or other future events or conditions. These statements are based on our current expectations, estimates and projections about our business based, in part, on assumptions made by our management and can be identified by terms such as “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “forecasts,” “predicts,” “potential” or “continue” or the negative of these terms or other similar expressions. Alico believes the expectations reflected in the forward-looking statements are reasonable but cannot guarantee future results, level of activity, performance or achievements. Actual results may differ materially from those expressed or implied in the forward-looking statements. Therefore, Alico cautions you against relying on any of these forward-looking statements. Factors which may cause future outcomes to differ materially from those foreseen in forward-looking statements include, but are not limited to: adverse weather conditions, natural disasters and other natural conditions, including the effects of climate change; damage and loss to our citrus groves from disease including but not limited to citrus greening and citrus canker; hurricanes and tropical storms given our geographic concentration in Florida; any adverse event affecting our citrus business; our ability to maintain our market share in a highly competitive business; our dependency on our relationship with Tropicana and Tropicana’s relationship with certain third parties; heightened risks as a result of the sale of a majority of ownership of Tropicana to a French private equity firm; supply and demand pricing; development and execution of our strategic growth initiatives; product contamination and product liability claims; water use regulations restricting our access to water; changes in immigration laws; risks associated with acquisition of additional agricultural assets and other businesses; adverse impacts from dispositions of our assets; harm to our reputation; tax risks associated with a “Section 1031 Exchange”; undertaking one or more significant corporate transactions; seasonality of our citrus business; significant competition in our agricultural operations; fluctuations in our earnings as a result of market supply and prices and demand for our products; climate change, or legal, regulatory or market measures to address climate change and sustainability; increases in labor, personnel and benefits costs; increases in commodity or raw product costs, such as fuel and chemical costs; transportation risks; any change or the classification or valuation methods employed by county property appraisers related to our real estate taxes; any weakness or instability in the real estate industry; liability for the use of fertilizers, pesticides, herbicides and other potentially hazardous substances; compliance with applicable environmental laws; loss of key employees; material weaknesses and other control deficiencies, including as a result of restatement of our financial statements as of September 30, 2021, and the end of certain quarterly periods; the impact of any restatements and any resulting investigations, legal or administrative proceedings; the effect of inflation on our operations, including as a result of the conflict in Ukraine; increased costs as a result of being a public company; system security risks; the COVID-19 pandemic; any harm by natural disasters or epidemics; our indebtedness and ability to generate sufficient cash flow to service our debt obligations; higher interest expenses as a result of variable rates of interest for our debt; our ability to continue to pay cash dividends; and risks related with repurchases. These forward-looking statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in the forward-looking statements due to numerous factors, including those Risks Factors described in our Annual Report on Form 10-K for the fiscal year ended September 30, 2022, and our Quarterly Reports on Form 10-Q. Except as required by law, we do not undertake an obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments, or otherwise.
23
Business Overview
Business Description
Alico, Inc., together with its subsidiaries (collectively, “Alico”, the “Company”, “we”, “us” or “our”) generates operating revenues primarily from the sale of its citrus products, providing services to citrus groves owned by third parties, and grazing and hunting leasing. The Company operates as two business segments, and all its operating revenues are generated in the United States. For the three months ended March 31, 2023 and March 31, 2022, the Company generated operating revenues of approximately $21,294,000 and $49,641,000, respectively, (loss) income from operations of approximately ($8,995,000) and $1,461,000, respectively, and net (loss) income attributable to common stockholders of approximately ($7,787,000) and $20,702,000, respectively. Net cash used in operating activities was approximately $7,108,000 for the six months ended March 31, 2023.
Business Segments
Operating segments are defined in the criteria established under the Financial Accounting Standards Board – Accounting Standards Codification (“FASB ASC”) Topic 280 as components of public entities that engage in business activities from which they may earn revenues and incur expenses for which separate financial information is available and which is evaluated regularly by the Company’s chief operating decision maker (“CODM”) in deciding how to assess performance and allocate resources. The Company’s CODM assesses performance and allocates resources based on its operating segments.
The Company has two segments as follows:
•Alico Citrus includes activities related to planting, owning, cultivating and/or managing citrus groves to produce fruit for sale to fresh and processed citrus markets, including activities related to the purchase and resale of fruit and value-added services, which include contracting for the harvesting, marketing and hauling of citrus; and
•Land Management and Other Operations includes activities related to native plant sales, grazing and hunting leasing, management and/or conservation of unimproved native pastureland and activities related to rock mining royalties and other insignificant lines of business. Also included are activities related to owning and/or leasing improved farmland. Improved farmland is acreage that has been converted, or is permitted to be converted, from native pasture and which may have various improvements including irrigation, drainage and roads.
For the three months ended March 31, 2023, the Alico Citrus segment generated 98.3% of the Company’s consolidated revenues and the Land Management and Other Operations segment generated 1.7% of the Company’s consolidated revenues.
Critical Accounting Policies and Estimates
The discussion and analysis of the Company’s financial condition and results of operations is based upon its unaudited condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires the Company to make certain estimates and judgments that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. Alico bases these estimates on historical experience, available current market information and on various other assumptions that management believes are reasonable under the circumstances. Additionally, the Company evaluates the results of these estimates on an on-going basis. Management’s estimates form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
See Note 1. “Description of Business and Basis of Presentation” to the condensed consolidated financial statements in Item 1 of Part I of this Form 10-Q for a detailed description of recent accounting pronouncements. There have been no material changes to the Company’s critical accounting policies and estimates from those reflected in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2022, as filed with the SEC on December 13, 2022.
24
Recent Developments
Hurricane Ian
On September 28, 2022, Hurricane Ian made landfall on the southwest coast of Florida and a majority of the Company’s groves were impacted by the storm. The impact of Hurricane Ian has affected our fiscal year 2023 fruit production as the Company accelerated the harvest to maximize box production for both its Early and Mid-Season and Valencia harvest, which was completed earlier than the prior year harvest season. Approximately 48,900 gross acres of our citrus groves, which are in Charlotte, Collier, DeSoto, Hardee, Hendry, Highlands and Polk Counties, sustained hurricane or tropical storm force winds for varying durations of time. While we lost a small percentage of trees, the force and duration of the storm impacted the majority of the groves. Based upon prior experience with serious storms of this nature, we expect it may take up to two full seasons or more for the groves to recover to pre-hurricane production levels.
The Company maintains crop insurance and, as of March 31, 2023, has received approximately $4,759,000 in proceeds for crop claims. During April 2023, the Company received additional Hurricane Ian crop insurance proceeds of approximately $8,900,000 and approximately $838,000 relating to property and casualty damage claims. The Company has submitted additional crop insurance claims and is working closely with our insurers and adjusters awaiting determination of additional proceeds to be received.
Citrus Greening Treatment
In 2022, the Company began testing a new application of the Citrus Greening therapy Oxytetracycline (“OTC”), which is used in citrus and other crops. After a review of the new application method by the U.S. Environmental Protection Agency, the Florida Department of Agriculture and Consumer Services (“FDACS”) granted a special local-need registration (24c) on October 28, 2022. The Company began treating its trees on January 16, 2023, as the product and application devices became available, and treated approximately ten percent of its trees as of March 31, 2023. The extent of any benefit of the OTC application will not be measurable until the completion of the fiscal year 2024 harvest. Although not a cure for citrus greening, this OTC application mitigates some of the impacts of citrus greening and has shown to decrease the rate of fruit drop and improve fruit quality.
Extension of the Working Capital Line of Credit
On October 27, 2022, the working capital line of credit agreement (“WCLC”) was amended and the primary terms of the amendment were an extension of the maturity to November 1, 2025, and the conversion of the interest rate from LIBOR plus a spread to SOFR plus a spread, which spread is adjusted quarterly, based on the Company’s debt service coverage ratio for the preceding quarter and can vary from 175 to 250 basis points. There were no changes to the commitment amount.
Sales and Purchase of Land
During the second quarter 2023, the company sold approximately 279 acres to various third parties for approximately $1,596,000 and recognized a gain of approximately $1,500,000.
During the first quarter 2023, the company sold approximately 609 acres to various third parties for approximately $3,300,000. One of these sales transactions was a sale of approximately 85 acres to Mr. Kiernan, the Company’s President and CEO on October 20, 2022 for approximately $438,900 ($5,161 per acre). On January 1, 2022, Mr. Kiernan entered into a Hunting Lease Agreement and Real Estate Purchase and Sale Option Agreement with the Company (the “Kiernan Lease Agreement”). Under the Kiernan Lease Agreement, the Company was leasing what was originally estimated to be approximately 93 acres of Company owned, largely unimproved land (the “Land”) to Mr. Kiernan for a three-year term commencing on January 1, 2022, and ending on January 1, 2025, and with a yearly rent of $1,860.00. Additionally, under the terms of the Kiernan Lease Agreement, the Company had granted to Mr. Kiernan an option to purchase the Land from the Company, exercisable only during the one-year
25
period January 1, 2022 through January 1, 2023, and at a price of $480,000 ($5,161 per acre), which price was based on an independent appraisal obtained by the Company and dated as of November 11, 2021. On August 26, 2022, Mr. Kiernan exercised his option to purchase the land. Pursuant to exercise of the option, the Company sold what turned out to be a parcel of approximately 85 acres to Mr. Kiernan.
Federal Relief Program – Hurricane Ian
In December 2022, the Consolidated Appropriations Act was signed into law by the federal government; however, the details of the mechanism and funding of any Hurricane Ian relief still remains unclear and, if available, the extent to which the Company will be eligible. The Company intends to take advantage of any such available programs as and when they become available. The Company is currently working with Florida Citrus Mutual, the industry trade group, and government agencies on the federal relief programs available as part of the Consolidated Appropriations Act.
Federal Relief Program – Hurricane Irma
The Company was eligible for Hurricane Irma federal relief programs for block grants that were being administered through the State of Florida. The Company has received a total of approximately $26,900,000 in Hurricane Irma federal relief for the period commencing in fiscal year ended September 30, 2019 through December 31, 2022. As of December 31, 2022, the Company has received all funds due under the Florida Citrus Recovery Block Grant (“CRBG”) program. These federal relief proceeds are included as a reduction to operating expenses in the Condensed Consolidated Statements of Operations. For the six months ended March 31, 2023 and March 31, 2022, the Company received Hurricane Irma federal relief proceeds of approximately $1,266,000 and $1,123,000, respectively.
26
Condensed Consolidated Results of Operations
The following discussion provides an analysis of Alico’s results of operations and should be read in conjunction with the accompanying Condensed Consolidated Statements of Operations for the three and six months ended March 31, 2023 and 2022:
|
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|
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|
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|
|
|
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|
|
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31, |
|
|
Change |
|
|
Six Months Ended
March 31, |
|
|
Change |
|
|
|
2023 |
|
|
2022 |
|
|
$ |
|
|
% |
|
|
2023 |
|
|
2022 |
|
|
$ |
|
|
% |
|
Operating revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alico Citrus |
|
$ |
20,937 |
|
|
$ |
49,032 |
|
|
$ |
(28,095 |
) |
|
|
(57.3 |
)% |
|
$ |
31,205 |
|
|
$ |
63,780 |
|
|
$ |
(32,575 |
) |
|
|
(51.1 |
)% |
Land Management and Other Operations |
|
|
357 |
|
|
|
609 |
|
|
|
(252 |
) |
|
|
(41.4 |
)% |
|
|
677 |
|
|
|
1,198 |
|
|
|
(521 |
) |
|
|
(43.5 |
)% |
Total operating revenues |
|
|
21,294 |
|
|
|
49,641 |
|
|
|
(28,347 |
) |
|
|
(57.1 |
)% |
|
|
31,882 |
|
|
|
64,978 |
|
|
|
(33,096 |
) |
|
|
(50.9 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross (loss) profit: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alico Citrus |
|
|
(6,583 |
) |
|
|
3,542 |
|
|
|
(10,125 |
) |
|
NM |
|
|
|
(10,610 |
) |
|
|
4,904 |
|
|
|
(15,514 |
) |
|
NM |
|
Land Management and Other Operations |
|
|
255 |
|
|
|
457 |
|
|
|
(202 |
) |
|
|
(44.2 |
)% |
|
|
481 |
|
|
|
906 |
|
|
|
(425 |
) |
|
|
(46.9 |
)% |
Total gross (loss) profit |
|
|
(6,328 |
) |
|
|
3,999 |
|
|
|
(10,327 |
) |
|
NM |
|
|
|
(10,129 |
) |
|
|
5,810 |
|
|
|
(15,939 |
) |
|
NM |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative expenses |
|
|
2,667 |
|
|
|
2,538 |
|
|
|
129 |
|
|
|
5.1 |
% |
|
|
5,176 |
|
|
|
5,122 |
|
|
|
54 |
|
|
|
1.1 |
% |
(Loss) income from operations |
|
|
(8,995 |
) |
|
|
1,461 |
|
|
|
(10,456 |
) |
|
NM |
|
|
|
(15,305 |
) |
|
|
688 |
|
|
|
(15,993 |
) |
|
NM |
|
Total other income, net |
|
|
330 |
|
|
|
25,735 |
|
|
|
(25,405 |
) |
|
|
(98.7 |
)% |
|
|
2,371 |
|
|
|
33,288 |
|
|
|
(30,917 |
) |
|
|
(92.9 |
)% |
(Loss) income before income taxes |
|
|
(8,665 |
) |
|
|
27,196 |
|
|
|
(35,861 |
) |
|
NM |
|
|
|
(12,934 |
) |
|
|
33,976 |
|
|
|
(46,910 |
) |
|
NM |
|
Income tax (benefit) provision |
|
|
(534 |
) |
|
|
6,579 |
|
|
|
(7,113 |
) |
|
NM |
|
|
|
(1,617 |
) |
|
|
3,279 |
|
|
|
(4,896 |
) |
|
NM |
|
Net (loss) income |
|
|
(8,131 |
) |
|
|
20,617 |
|
|
|
(28,748 |
) |
|
NM |
|
|
|
(11,317 |
) |
|
|
30,697 |
|
|
|
(42,014 |
) |
|
NM |
|
Net loss attributable to noncontrolling interests |
|
|
344 |
|
|
|
85 |
|
|
|
259 |
|
|
NM |
|
|
|
380 |
|
|
|
136 |
|
|
|
244 |
|
|
|
179.4 |
% |
Net (loss) income attributable to Alico, Inc. common stockholders |
|
$ |
(7,787 |
) |
|
$ |
20,702 |
|
|
$ |
(28,489 |
) |
|
NM |
|
|
$ |
(10,937 |
) |
|
$ |
30,833 |
|
|
$ |
(41,770 |
) |
|
NM |
|
NM = Not meaningful
27
The following discussion provides an analysis of the Company’s two operating segments, Alico Citrus and Land Management and Other Operations segments:
Alico Citrus
The table below presents key operating measures for the three and six months ended March 31, 2023 and 2022 for the Alico Citrus segment:
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|
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|
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|
(in thousands, except per box and per pound solids data) |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
|
|
|
|
Six Months Ended |
|
|
|
|
|
|
|
|
|
March 31, |
|
|
Change |
|
|
March 31, |
|
|
Change |
|
|
|
2023 |
|
|
2022 |
|
|
Unit |
|
|
% |
|
|
2023 |
|
|
2022 |
|
|
Unit |
|
|
% |
|
Operating Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Early and Mid-Season |
|
$ |
2,368 |
|
|
$ |
17,909 |
|
|
$ |
(15,541 |
) |
|
|
(86.8 |
)% |
|
$ |
11,954 |
|
|
$ |
28,287 |
|
|
$ |
(16,333 |
) |
|
|
(57.7 |
)% |
Valencias |
|
|
17,930 |
|
|
|
25,854 |
|
|
|
(7,924 |
) |
|
|
(30.6 |
)% |
|
|
17,930 |
|
|
|
25,854 |
|
|
|
(7,924 |
) |
|
|
(30.6 |
)% |
Fresh Fruit |
|
|
74 |
|
|
|
350 |
|
|
|
(276 |
) |
|
|
(78.9 |
)% |
|
|
522 |
|
|
|
1,229 |
|
|
|
(707 |
) |
|
|
(57.5 |
)% |
Purchase and Resale of Fruit |
|
|
196 |
|
|
|
454 |
|
|
|
(258 |
) |
|
|
(56.8 |
)% |
|
|
234 |
|
|
|
507 |
|
|
|
(273 |
) |
|
|
(53.8 |
)% |
Grove Management Services |
|
|
362 |
|
|
|
4,416 |
|
|
|
(4,054 |
) |
|
|
(91.8 |
)% |
|
|
551 |
|
|
|
7,834 |
|
|
|
(7,283 |
) |
|
|
(93.0 |
)% |
Other |
|
|
7 |
|
|
|
49 |
|
|
|
(42 |
) |
|
|
(85.7 |
)% |
|
|
14 |
|
|
|
69 |
|
|
|
(55 |
) |
|
|
(79.7 |
)% |
Total |
|
$ |
20,937 |
|
|
$ |
49,032 |
|
|
$ |
(28,095 |
) |
|
|
(57.3 |
)% |
|
$ |
31,205 |
|
|
$ |
63,780 |
|
|
$ |
(32,575 |
) |
|
|
(51.1 |
)% |
Boxes Harvested: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Early and Mid-Season |
|
|
174 |
|
|
|
1,348 |
|
|
|
(1,174 |
) |
|
|
(87.1 |
)% |
|
|
979 |
|
|
|
2,175 |
|
|
|
(1,196 |
) |
|
|
(55.0 |
)% |
Valencias |
|
|
1,254 |
|
|
|
1,883 |
|
|
|
(629 |
) |
|
|
(33.4 |
)% |
|
|
1,254 |
|
|
|
1,883 |
|
|
|
(629 |
) |
|
|
(33.4 |
)% |
Total Processed |
|
|
1,428 |
|
|
|
3,231 |
|
|
|
(1,803 |
) |
|
|
(55.8 |
)% |
|
|
2,233 |
|
|
|
4,058 |
|
|
|
(1,825 |
) |
|
|
(45.0 |
)% |
Fresh Fruit |
|
|
4 |
|
|
|
19 |
|
|
|
(15 |
) |
|
|
(78.9 |
)% |
|
|
40 |
|
|
|
88 |
|
|
|
(48 |
) |
|
|
(54.5 |
)% |
Total |
|
|
1,432 |
|
|
|
3,250 |
|
|
|
(1,818 |
) |
|
|
(55.9 |
)% |
|
|
2,273 |
|
|
|
4,146 |
|
|
|
(1,873 |
) |
|
|
(45.2 |
)% |
Pound Solids Produced: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Early and Mid-Season |
|
|
849 |
|
|
|
7,013 |
|
|
|
(6,164 |
) |
|
|
(87.9 |
)% |
|
|
4,586 |
|
|
|
11,034 |
|
|
|
(6,448 |
) |
|
|
(58.4 |
)% |
Valencias |
|
|
6,560 |
|
|
|
9,781 |
|
|
|
(3,221 |
) |
|
|
(32.9 |
)% |
|
|
6,560 |
|
|
|
9,781 |
|
|
|
(3,221 |
) |
|
|
(32.9 |
)% |
Total |
|
|
7,409 |
|
|
|
16,794 |
|
|
|
(9,385 |
) |
|
|
(55.9 |
)% |
|
|
11,146 |
|
|
|
20,815 |
|
|
|
(9,669 |
) |
|
|
(46.5 |
)% |
Pound Solids per Box: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Early and Mid-Season |
|
|
4.88 |
|
|
|
5.20 |
|
|
|
(0.32 |
) |
|
|
(6.2 |
)% |
|
|
4.68 |
|
|
|
5.07 |
|
|
|
(0.39 |
) |
|
|
(7.7 |
)% |
Valencias |
|
|
5.23 |
|
|
|
5.19 |
|
|
|
0.04 |
|
|
|
0.7 |
% |
|
|
5.23 |
|
|
|
5.19 |
|
|
|
0.04 |
|
|
|
0.7 |
% |
Price per Pound Solids: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Early and Mid-Season |
|
|
2.79 |
|
|
|
2.55 |
|
|
$ |
0.24 |
|
|
|
9.2 |
% |
|
|
2.61 |
|
|
|
2.56 |
|
|
$ |
0.05 |
|
|
|
2.0 |
% |
Valencias |
|
|
2.73 |
|
|
|
2.64 |
|
|
$ |
0.09 |
|
|
|
3.4 |
% |
|
|
2.73 |
|
|
|
2.64 |
|
|
$ |
0.09 |
|
|
|
3.4 |
% |
Price per Box: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fresh Fruit |
|
$ |
18.50 |
|
|
$ |
18.42 |
|
|
$ |
0.08 |
|
|
|
0.4 |
% |
|
$ |
13.05 |
|
|
$ |
13.97 |
|
|
$ |
(0.92 |
) |
|
|
(6.6 |
)% |
Operating Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of Sales |
|
$ |
26,558 |
|
|
$ |
32,031 |
|
|
$ |
(5,473 |
) |
|
|
(17.1 |
)% |
|
$ |
39,044 |
|
|
$ |
40,887 |
|
|
$ |
(1,843 |
) |
|
|
(4.5 |
)% |
Harvesting and Hauling |
|
|
5,547 |
|
|
|
9,248 |
|
|
|
(3,701 |
) |
|
|
(40.0 |
)% |
|
|
8,526 |
|
|
|
11,609 |
|
|
|
(3,083 |
) |
|
|
(26.6 |
)% |
Purchase and Resale of Fruit |
|
|
154 |
|
|
|
359 |
|
|
|
(205 |
) |
|
|
(57.1 |
)% |
|
|
183 |
|
|
|
405 |
|
|
|
(222 |
) |
|
|
(54.8 |
)% |
Grove Management Services |
|
|
240 |
|
|
|
4,027 |
|
|
|
(3,787 |
) |
|
|
(94.0 |
)% |
|
|
307 |
|
|
|
7,098 |
|
|
|
(6,791 |
) |
|
|
(95.7 |
)% |
Other |
|
|
(4,979 |
) |
|
|
(175 |
) |
|
|
(4,804 |
) |
|
NM |
|
|
|
(6,245 |
) |
|
|
(1,123 |
) |
|
|
(5,122 |
) |
|
NM |
|
Total |
|
$ |
27,520 |
|
|
$ |
45,490 |
|
|
$ |
(17,970 |
) |
|
|
(39.5 |
)% |
|
$ |
41,815 |
|
|
$ |
58,876 |
|
|
$ |
(17,061 |
) |
|
|
(29.0 |
)% |
NM = Not meaningful
Components of Results of Operations for Alico Citrus Segment
The Company sells its Early and Mid-Season and Valencia oranges to processors that convert most of the citrus crop into orange juice. The processors generally buy the citrus crop on a pound solids basis, which is the measure of the soluble solids (sugars and acids) contained in one box of fruit. The Company’s Fresh Fruit revenue is derived from sales to packing houses that purchase the citrus on a per box basis. The Company also provides citrus grove caretaking and harvest and haul management services to third parties in which revenues are recorded as Grove Management Services, including a management fee. Other revenues consist of the purchase and reselling of fruit.
Alico’s operating expenses for its Alico Citrus segment consist primarily of Cost of Sales, Harvesting and Hauling costs and Grove Management Service costs. Cost of Sales represents the cost of maintaining the citrus groves for the preceding calendar
28
year and does not vary in relation to production. Harvesting and Hauling costs represent the costs of bringing citrus product to processors and vary based upon the number of boxes produced. Grove Management Services costs include those costs associated with citrus grove caretaking and harvest and haul management services provided to third parties. Other expenses include the period costs of third-party grove caretaking and the purchase and reselling of third-party fruit.
Comparison of the Three and Six Months Ended March 31, 2023 and 2022 for the Alico Citrus Segment
The decrease in revenue for the three and six months ended March 31, 2023, compared to the three and six months ended March 31, 2022, was primarily due to a decrease in revenue generated from the Early and Mid-Season and Valencia fruit harvested, driven by the increased fruit drop caused by the ongoing impact of Hurricane Ian and a decrease in Grove Management Services, as described further below.
The decrease in the Early and Mid-Season and Valencia fruit harvested was primarily driven by a decrease in processed box production for both the Early and Mid-Season and Valencia Crop and a decrease in pound solids per box in the Early and Mid-Season crop for the six months ended March 31, 2023. The Company decided to accelerate the harvesting of the Early and Mid-Season and Valencia crops to maximize the box production and avoid additional fruit drop as a result of the impact of Hurricane Ian. The Early and Mid-Season harvest has been completed and the pound solids per box decreased 7.7% and the processed box production decreased 55.0% as compared to the same six-month period in the prior year. As of March 31, 2023, the Company expects to complete the Valencia fruit harvest earlier in the current fiscal year, as compared to the prior fiscal year, and expects an overall decrease in the number of boxes harvested and revenues generated from the Valencia fruit for the fiscal year 2023 harvest, as compared to the fiscal year 2022 harvest. The Valencia fruit harvest box production as of March 31, 2023 was down 33.4% and the pound solids per box was up 0.7%, as compared to the same period in the prior year. Although Hurricane Ian impacted the fiscal year 2023 harvest, there does not appear to be long-term damage to the citrus trees. The Valencia fruit harvest box production as of March 31, 2023 was down 33.4% and the pound solids per box was up 0.7%, as compared to the same period in the prior year. Although Hurricane Ian impacted the fiscal year 2023 harvest, there does not appear to be long-term damage to the citrus trees.
The Company also recorded a decrease in revenue from sales of Fresh Fruit. The decrease in the Fresh Fruit is primarily due to a decrease in both boxes sold and pricing per box.
The decrease in Grove Management Services is primarily due to a primary group of third-party grove owners, who are affiliated with each other (collectively, the “Grove Owners”), to whom the Company was providing caretaking management services, deciding to exit the citrus business at the beginning of the three months ended June 30, 2022. This decision to exit the citrus business eliminated the need for caretaking management services. The Company recorded approximately $0 and $7,200,000 of revenue from the Grove Owners relating to grove management services for the six months ended March 31, 2023 and 2022, respectively. As a result, caretaking management services and the accompanying reimbursement of caretaking expenses decreased during the three and six months ended March 31, 2023, when compared to the same periods in the prior year.
The USDA, in its April 11, 2023 Citrus Crop Forecast for the 2022-23 harvest season, indicated its expectation is that the overall Florida orange crop will decrease from approximately 41,200,000 boxes for the 2021-22 crop year to approximately 16,100,000 boxes for the 2022-23 crop year, a decrease of approximately 60.9%. Overall, the Company, along with the Florida citrus industry in general, is recording a smaller number of boxes harvested due to an even greater fruit drop rate, attributed to the hurricanes and disease during the current harvest season, as compared to the previous year.
The decrease in Operating expenses for the six months ended March 31, 2023, as compared to the six months ended March 31. 2022, primarily relates to the inventory adjustments recorded at September 30, 2022 on the ending inventory balance, as a result of the impact of Hurricane Ian, which effectively lowered the inventory to be expensed in fiscal year 2023. The Company experienced significant cost increases in fertilizer, herbicide, labor and fuel in maintaining its groves. These cost increases, coupled with the timing of the harvest, and the expected lower box production for both its Early and Mid-Season and Valencia
29
harvest, resulted in a higher cost of sales per box for the six months ended March 31, 2023, as compared to the same period in the prior year. In addition, the Company incurred additional costs related to the clean-up and repairs as a result of Hurricane Ian.
The Company also recorded increases in its Harvesting and Hauling expenses per box which is directly related to an increase in the harvesting labor costs, as well as the increased time spent by the harvesters to fill the boxes as a result of the increased fruit drop caused by Hurricane Ian for the six months ended March 31, 2023, when compared to the similar period in the prior year.
The decrease in Grove Management Services expense is directly related to the termination of the grove management services by the Grove Owners in June 2022. As mentioned above, the decision by the Grove Owners to exit the citrus business eliminated the need for the caretaking management services for the Grove Owners. The Company recorded approximately $0 and $6,700,000 of operating expenses relating to grove management services for the Grove Owners in the six months ended March 31, 2023 and 2022, respectively. As a result, caretaking expenses decreased significantly during the six months ended March 31, 2023, when compared to the same period in the prior year.
The credit amounts shown in “Other” in operating expenses above primarily represent insurance proceeds of approximately $4,759,000 received in the six months ended March 31, 2023 and federal relief proceeds received under the CRBG program in the six months ended March 31, 2023 and 2022 of approximately $1,267,000 and $1,123,000, respectively.
Land Management and Other Operations
The table below presents key operating measures for the three and six months ended March 31, 2023 and 2022 for the Land Management and Other Operations segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31, |
|
|
Change |
|
|
Six Months Ended
March 31, |
|
|
Change |
|
|
|
2023 |
|
|
2022 |
|
|
$ |
|
|
% |
|
|
2023 |
|
|
2022 |
|
|
$ |
|
|
% |
|
Revenue From: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Land and Other Leasing |
|
$ |
273 |
|
|
$ |
442 |
|
|
$ |
(169 |
) |
|
|
(38.2 |
)% |
|
$ |
554 |
|
|
$ |
970 |
|
|
$ |
(416 |
) |
|
|
(42.9 |
)% |
Other |
|
|
84 |
|
|
|
167 |
|
|
|
(83 |
) |
|
|
(49.7 |
)% |
|
|
123 |
|
|
|
228 |
|
|
|
(105 |
) |
|
|
(46.1 |
)% |
Total |
|
$ |
357 |
|
|
$ |
609 |
|
|
$ |
(252 |
) |
|
|
(41.4 |
)% |
|
$ |
677 |
|
|
$ |
1,198 |
|
|
$ |
(521 |
) |
|
|
(43.5 |
)% |
Operating Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Land and Other Leasing |
|
$ |
98 |
|
|
$ |
148 |
|
|
$ |
(50 |
) |
|
|
(33.8 |
)% |
|
$ |
191 |
|
|
$ |
288 |
|
|
$ |
(97 |
) |
|
|
(33.7 |
)% |
Other |
|
|
4 |
|
|
|
4 |
|
|
|
— |
|
|
|
— |
% |
|
|
5 |
|
|
|
4 |
|
|
|
1 |
|
|
|
25.0 |
% |
Total |
|
$ |
102 |
|
|
$ |
152 |
|
|
$ |
(50 |
) |
|
|
(32.9 |
)% |
|
$ |
196 |
|
|
$ |
292 |
|
|
$ |
(96 |
) |
|
|
(32.9 |
)% |
Components of Results of Operations for Land Management and Other Operations Segment
Land and Other Leasing includes lease income from leases for grazing rights, hunting leases, a farm lease, a lease to a third party of an aggregate mine, leases of oil extraction rights to third parties, and other miscellaneous income.
Land and Other Leasing operating expenses includes real estate, property taxes, general and administrative expenses including salaries, benefits and legal.
30
Comparison of the Three and Six Months Ended March 31, 2023 and 2022 for the Land Management and Other Operations Segment
The decrease in revenues from Land Management and Other Operations for the three and six months ended March 31, 2023, as compared to the three and six months ended March 31, 2022, is primarily due to a decrease in grazing and hunting lease revenue due to the sales of portions of the Alico Ranch, which resulted in the reduction of land covered under grazing and hunting lease contracts. Additionally, the modification to the grazing leases resulted in a reduction in the ad valorem taxes due from the lessees, as the Company revised the grazing lease agreements due to the sale of certain of the ranch acres previously covered under the agreement.
The slight decrease in operating expenses from Land Management and Other Operations for the three and six months ended March 31, 2023, as compared to the three and six months ended March 31, 2022, is primarily due to the reduction of the ad valorem tax expense due to the Company owning fewer ranch acres as result of the sale of certain acres.
The following discussion provides an analysis of the Company’s results of operation, as a whole:
Operating Revenue
The decrease in revenue for the three and six months ended March 31, 2023, as compared to the three and six months ended March 31, 2022, was primarily driven by the overall decrease in fruit processed box production in the Early and Mid-Season and Valencia crop harvests as compared to the same period in the prior year, and the decrease in Grove Management Services, which are discussed in further details above.
Operating Expenses
The decrease in operating expenses for the three and six months ended March 31, 2023, as compared to the three and six months ended March 31, 2022 was primarily driven by lower cost of sales due to the inventory adjustments recorded at September 30, 2022 on the ending inventory balance, as a result of the impact of Hurricane Ian and a reduction in the harvest and haul expenses due to the decreased box production and a reduction in Grove Management Services, which are discussed in further detail above.
General and Administrative Expense
General and administrative expense for the three months ended March 31, 2023 was approximately $2,667,000, compared to approximately $2,538,000 for the three months ended March 31, 2022. The increase was primarily due to an increase in legal and professional fees of approximately $102,000, as compared to the same period in the prior year.
General and administrative expense for the six months ended March 31, 2023 was approximately $5,176,000, compared to approximately $5,122,000 for the six months ended March 31, 2022. The increase was primarily due to an increase in legal and professional fees of approximately $265,000, which was partially offset by lower stock compensation expenses, as compared to the same period in the prior year.
Other Income (expense), net
Other income, net for the three months ended March 31, 2023 and 2022, was approximately $330,000 and $25,735,000, respectively. The decrease to other income, net, is primarily due to the timing of the gains on sale of real estate, property and equipment and assets held for sale. During the quarter ended March 31, 2023 the Company sold approximately 279 acres, in the aggregate, from the Alico Ranch to several third parties and recognized gains of approximately $1,596,000. By comparison, for the three months ended March 31, 2022, the Company recognized gains of approximately $26,604,000 relating to the sale of real estate, property and equipment and assets held for sale. In addition, the Company recognized an increase in interest expense of
31
approximately $404,000 for the three months ended March 31, 2023, as compared to the three months ended March 31, 2022, as a result of an increase in borrowings under the WCLC and an increase in the overall interest rates on its variable rate term debt and the WCLC.
Other income (expense), net for the six months ended March 31, 2023 and 2022 was approximately $2,371,000 and approximately $33,288,000, respectively. The decrease in other income, net, is primarily due to gains on sale of real estate, property and equipment and assets held for sale of approximately $4,763,000 relating to the sale during the six months ended March 31, 2023 of approximately 888 acres, in the aggregate, from the Alico Ranch to several third parties. By comparison, for the six months ended March 31, 2022, the Company recognized gains of approximately $35,049,000 relating to the sale of real estate, property and equipment and assets held for sale. Additionally, an increase in interest expense of approximately $651,000 for the six months ended March 31, 2023, as compared to the six months ended March 31, 2022, was the result of an increase in borrowings under the WCLC, and an increase in interest rates on its variable rate term debt and the variable rate interest on the WCLC.
Income Taxes
The income tax (benefit) provision was approximately ($534,000) and $6,579,000 for the three months ended March 31, 2023 and 2022, respectively, and approximately ($1,617,000) and $3,279,000 for the six months ended March 31, 2023 and 2022, respectively. During the six months ended March 31, 2022 the Company sold 1,638 acres of land to the State of Florida at a price below market value, which resulted in a charitable deduction for tax purposes and a tax benefit of approximately $4,900,000 impacting the income tax provision for the six-month period ended March 31, 2022. The decrease in the tax provision is the result of the net loss realized in the six-month period ending March 31, 2023 as compared to the net income realized in the six month period ending March 31, 2022, primarily due to the lower harvesting revenue generated and lower gains realized on the sale of real estate, property and equipment.
Seasonality
The Company is primarily engaged in the production of fruit for sale to citrus markets, which is of a seasonal nature, and subject to the influence of natural phenomena and wide price fluctuations. Historically, the second and third quarters of Alico’s fiscal year produce most of the Company's annual revenue. Working capital requirements are typically greater in the first and fourth quarters of the fiscal year, coinciding with harvesting cycles. Because of the seasonality of the business, results for any quarter are not necessarily indicative of the results that may be achieved for the full fiscal year.
Liquidity and Capital Resources
A comparative balance sheet summary is presented in the following table:
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands) |
|
March 31, |
|
|
September 30, |
|
|
|
|
|
|
2023 |
|
|
2022 |
|
|
Change |
|
Cash and cash equivalents |
|
$ |
148 |
|
|
$ |
865 |
|
|
$ |
(717 |
) |
Total current assets |
|
$ |
36,973 |
|
|
$ |
31,616 |
|
|
$ |
5,357 |
|
Total current liabilities |
|
$ |
14,311 |
|
|
$ |
16,525 |
|
|
$ |
(2,214 |
) |
Working capital |
|
$ |
22,662 |
|
|
$ |
15,091 |
|
|
$ |
7,571 |
|
Total assets |
|
$ |
411,561 |
|
|
$ |
409,255 |
|
|
$ |
2,306 |
|
Principal amount of term loans and lines of credit |
|
$ |
126,301 |
|
|
$ |
111,624 |
|
|
$ |
14,677 |
|
Current ratio |
|
2.58 to 1 |
|
|
1.91 to 1 |
|
|
|
|
Sources and Uses of Liquidity and Capital
Alico's business has historically generated full fiscal year positive net cash flows from operating activities, although the net cash flow in the first quarter of each fiscal year has been negative because of seasonality and the associated need to expend cash in advance of generating revenues from the harvesting season. The Company's Early and Mid-Season and Valencia fiscal year 2023 harvest season generated lower revenue, as compared to the prior year, which decreased cash flow from operations for the first
32
half of fiscal year 2023, as compared to the prior year. Sources of cash primarily include cash flows from operations, sales of under-performing land and other assets, amounts available under the Company’s credit facilities, and access to capital markets. Access to additional borrowings under revolving lines of credit is subject to the satisfaction of customary borrowing conditions. As a public company, Alico may have access to other sources of capital. However, access to, and availability of, financing on acceptable terms in the future will be affected by many factors, including (i) financial condition, prospects, and credit rating; (ii) liquidity of the overall capital markets; and (iii) the state of the economy. There can be no assurance that the Company will continue to have access to the capital markets on acceptable terms, or at all.
The principal uses of cash that affect Alico’s liquidity position include the following: operating expenses including employee costs, the cost of maintaining the citrus groves, harvesting and hauling of citrus products, capital expenditures, stock repurchases, dividends, debt service costs including interest and principal payments on term loans and other credit facilities and acquisitions.
Management believes that a combination of cash-on-hand, cash generated from operations, and asset sales and availability under the Company’s lines of credit will provide sufficient liquidity to service the principal and interest payments on its indebtedness and will satisfy working capital requirements and capital expenditures for at least the next twelve months and over the long term. However, this is subject, to a certain extent, on general economic, financial, competitive, regulatory and other factors that are beyond our control.
Borrowing Facilities and Long-term Debt
Alico has a $70,000,000 working capital line of credit, of which approximately $48,630,000 was available for general use as of March 31, 2023, and a $25,000,000 revolving line of credit, all of which was available for general use as of March 31, 2023 (see Note 5. “Long-Term Debt and Lines of Credit” to the accompanying Condensed Consolidated Financial Statements). Additionally, effective May 1, 2021, the Company converted its Met Fixed-Rate Term Loans into interest bearing only loans with a balloon payment of the balance due at maturity, which is November 1, 2029. Such conversion has increased available cash and may be expected to continue to increase the available cash for the foreseeable future. The Company may utilize the available cash to pay down indebtedness, pursue citrus grove acquisitions, conduct share repurchases, and possibly reinstate increased dividends. If the Company chooses to pursue significant growth and other corporate opportunities, these actions could have a material adverse impact on its cash balances and may require the Company to finance such activities by drawing down on its lines of credit or by obtaining additional debt or equity financing. There can be no assurance that additional financing will be available to the Company when needed or, if available, that it can be obtained on commercially reasonable terms. Any inability to obtain additional financing could adversely impact Alico’s ability to pursue different growth and other corporate opportunities.
The level of debt could have important consequences on Alico's business, including, but not limited to, increasing its vulnerability to general adverse economic and industry conditions, limiting the availability of cash flow to fund future investments, capital expenditures, working capital, business activities and other general corporate requirements, and limiting flexibility in planning for, or reacting to, changes in its business and industry.
Alico’s credit facilities are subject to various debt covenants including the following financial covenants: (i) minimum debt service coverage ratio of 1.10 to 1.00; (ii) tangible net worth of at least $160,000,000 increased annually by 10% of consolidated net income for the preceding years, or approximately $174,462,000 applicable for the year ended September 30, 2022; (iii) minimum current ratio of 1.50 to 1.00; (iv) debt to total assets ratio not greater than .625 to 1.00; and (v) solely in the case of the WCLC, a limit on capital expenditures of $30,000,000 per fiscal year. As of March 31, 2023, the Company was in compliance with all of the financial covenants, except for the minimum debt service coverage ratio of 1.10 to 1.00, for which the Company obtained a waiver from the lender, Rabo, for the second quarter ended March 31, 2023.
33
Cash Management Impacts
Cash and cash equivalents increased from approximately $26,000 as of March 31, 2022, to approximately $148,000 as of March 31, 2023. The components of these changes are discussed below.
Net Cash (Used In)/Provided By Operating Activities
The following table details the items contributing to Net Cash (Used In) Provided By Operating Activities for the six months ended March 31, 2023 and 2022:
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands) |
|
Six Months Ended
March 31, |
|
|
|
|
|
|
2023 |
|
|
2022 |
|
|
Change |
|
Net (loss) income |
|
$ |
(11,317 |
) |
|
$ |
30,697 |
|
|
$ |
(42,014 |
) |
Depreciation, depletion and amortization |
|
|
7,847 |
|
|
|
7,668 |
|
|
|
179 |
|
Gain on sale of real estate, property and equipment and assets held for sale |
|
|
(4,763 |
) |
|
|
(35,049 |
) |
|
|
30,286 |
|
Deferred income tax benefit |
|
|
52 |
|
|
|
(4,746 |
) |
|
|
4,798 |
|
Loss on disposal of long-lived assets |
|
|
4,032 |
|
|
|
909 |
|
|
|
3,123 |
|
Inventory net realized value adjustment |
|
|
1,616 |
|
|
|
— |
|
|
|
1,616 |
|
Debt issue costs expense |
|
|
71 |
|
|
|
85 |
|
|
|
(14 |
) |
Other |
|
|
18 |
|
|
|
— |
|
|
|
18 |
|
Stock-based compensation expense |
|
|
533 |
|
|
|
630 |
|
|
|
(97 |
) |
Change in operating assets and liabilities |
|
|
(5,199 |
) |
|
|
8,604 |
|
|
|
(13,803 |
) |
Net cash (used in) provided by operating activities |
|
$ |
(7,110 |
) |
|
$ |
8,798 |
|
|
$ |
(15,908 |
) |
The ($15,908) change from $8,798 Net cash provided by operating activities for the six months ended March 31, 2022, to ($7,110) of Net cash used in operating activities for the six months ended March 31, 2023, was primarily due to the lower box production as result of Hurricane Ian, and a reduction in grove management fees due to the termination of the grove management services by the Grove Owners. The Company also recorded additional costs related to the clean-up and repair costs due to Hurricane Ian. The change in operating assets and liabilities is primarily due to a smaller decrease in the inventory balance for the six months ended March 31, 2023, as compared to the same period in the prior year, primarily due to the Hurricane Ian inventory adjustments recorded as of September 30, 2022.
Net Cash (Used In) Provided By Investing Activities
The following table details the items contributing to Net Cash (Used In) Provided By Investing Activities for the six months ended March 31, 2023 and 2022:
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands) |
|
Six Months Ended
March 31, |
|
|
|
|
|
|
2023 |
|
|
2022 |
|
|
Change |
|
Capital expenditures: |
|
|
|
|
|
|
|
|
|
Citrus trees |
|
$ |
(7,665 |
) |
|
$ |
(7,534 |
) |
|
$ |
(131 |
) |
Equipment and other |
|
|
(780 |
) |
|
|
(2,894 |
) |
|
|
2,114 |
|
Total |
|
|
(8,445 |
) |
|
|
(10,428 |
) |
|
|
1,983 |
|
|
|
|
|
|
|
|
|
|
|
Acquisition of citrus groves |
|
|
(29 |
) |
|
|
(136 |
) |
|
|
107 |
|
Net proceeds from sale of real estate, property and equipment and assets held for sale |
|
|
4,927 |
|
|
|
36,657 |
|
|
|
(31,730 |
) |
Notes Receivable |
|
|
(570 |
) |
|
|
— |
|
|
|
(570 |
) |
Change in deposits on purchase of citrus trees |
|
|
6 |
|
|
|
(95 |
) |
|
|
101 |
|
Net cash (used in) provided by investing activities |
|
$ |
(4,111 |
) |
|
$ |
25,998 |
|
|
$ |
(30,109 |
) |
34
The $30,109 change from $25,998 Net cash provided by investing activities for the six months ended March 31, 2022, to $4,111 of Net cash used in investing activities for the six months ended March 31, 2023, was primarily due to the timing of ranch sales. The Company received net proceeds of $36,657 from the sale of real estate, property and equipment and assets held for sale in the six months ended March 31, 2022, when compared to $4,927 during the six months ended March 31, 2023.
Net Cash Provided By (Used In) Financing Activities
The following table details the items contributing to Net Cash Provided By (Used In) Financing Activities for the six months ended March 31, 2023 and 2022:
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands) |
|
Six Months Ended
March 31, |
|
|
|
|
|
|
2023 |
|
|
2022 |
|
|
Change |
|
Repayments on revolving lines of credit |
|
$ |
(24,995 |
) |
|
$ |
(46,470 |
) |
|
$ |
21,475 |
|
Borrowings on revolving lines of credit |
|
|
41,189 |
|
|
|
46,470 |
|
|
|
(5,281 |
) |
Principal payments on term loans |
|
|
(1,517 |
) |
|
|
(2,143 |
) |
|
|
626 |
|
Exercise of stock options |
|
|
— |
|
|
|
170 |
|
|
|
(170 |
) |
Dividends paid |
|
|
(4,173 |
) |
|
|
(7,533 |
) |
|
|
3,360 |
|
Net cash provided by (used in) financing activities |
|
$ |
10,504 |
|
|
$ |
(9,506 |
) |
|
$ |
20,010 |
|
The increase of $20,010 in cash provided by financing activities for the six months ended March 31, 2023 to $10,504, as compared to $9,506 cash used in financing activities for the six months ended March 31, 2022, was primarily due to the Company increasing the net borrowings under the working capital line of credit during the six months ended March 31, 2023, as compared to the same period in the prior year. This was primarily due to the lower proceeds from the sale of real estate, property and equipment and assets held for sale in the six months ended March 31, 2023, when compared to the prior six months ended March 31, 2022.
The Company had approximately $21,122,000 and $0 outstanding on its revolving lines of credit as of March 31, 2023 and 2022, respectively.
The WCLC line of credit agreement provides for Rabo Agrifinance, Inc. to issue up to $2,000,000 in letters of credit on the Company’s behalf. As of March 31, 2023, there was approximately $248,000 in outstanding letters of credit, which correspondingly reduced Alico's availability under the WCLC line of credit.
Purchase Commitments
The Company enters into contracts for the purchase of citrus trees during the normal course of its business. As of March 31, 2023, the Company had approximately $4,762,000 relating to outstanding commitments for these purchases that will be paid upon the delivery of the remaining citrus trees.
35