Alico (ALCO) 7 Dec 232023 Q4 Earnings call transcript

Good morning. Welcome to Alico's Fourth Quarter 2023 Earnings Conference Call. [Operator Instructions].

As a reminder, today's conference is being recorded. Last night, the company issued a press release announcing its results for the fourth quarter and full year ended September 30, 2023.

had on to of the website alicoinc.com. not it the the have at available is Investor you a review chance release, company's If Relations portion available webcast, replay This well. and is website as being will call be on Alico's a

in would Such to expressed Before statements. that everyone or that contain are may statements. and the XX-K, mentioned release. The other differ earnings undertakes factors subject on current call in those to any these cause to the we statements in Form like no implied differences that Form remind results Form remarks company materially factors subsequently prepared from required could update today's or on to obligation on begin, contribute forward-looking reports except today SEC X-K and law. include the actual I and statements details on as forward-looking filed reports Important or risk by risks, those uncertainties quarterly reports cause made thereto revise amended the XX-Q, company's statements to annual the with such

company also During the including will adjusted call, discuss measures, non-GAAP EBITDA this and financial EBITDA.

details on press issued turn please go Please today. With refer these to release President will to the the Mr. that, company's I the over Kiernan. John measures, earlier call company's more CEO, For and ahead, sir.

for Quarter XXXX Fourth Alico's Earnings Melissa, you, us morning. everyone, thank and this joining Thank for you, Call

ready and for Hurricane financial season a aftermath harvest that for half decrease XXXX XX.X% used a for of the The Alico in counties in decrease our the $XX.X Florida that year. in acres During year orange box in were was citrus received compared USDA our which the that harvest to of of during results programs Ian for we of reported as located caretaking the in expected. The from box fiscal XXXX, our approximately grove XX.X% were our be intended approximately insurance recovering overall Alico prior across season, citrus as damaged million X the overall harvest XXXX, XXXX-XXXX the prior for period was versus crop production so production to the occurred crop healthy crops disappointing September Florida to will in same maintain help year. proceeds XX,XXX XXXX-XXXX. Alico the

end, well Citrus continue to We passed continues receive was refunds eligible December of trade timing Appropriations into of Mutual, relief federal any that be may officials to disaster for group, the finalize hope XXXX, storm. of Florida programs as law and in to industry they that cannot Alico possible to To we work support the relief from relief for, federal although the our or Act amount we XXXX payments. as fund as determine this government Consolidated agencies

XXXX-XXXX are we million because our our Although Alico's since XXXX. practices confident that X season planted company harvesting over exceptional crop are now, just recovery be this and significant of beginning maturity activities the of the by trees caretaking will

citrus our believe XXXX, sheet management our of and reimbursed harvest. Alico that with all has their to XXXX with services. grower acres to trees measurable manage groves extent it XX% XXXX-XXXX oxytetracycline the and already greatest January fiscal paid to citrus goal of after benefits improve that quality of in that with to X,XXX have our rate one fruit partnered with now the treated injection citrus of is fruit of balance our large combat In We will an addition, the been since not full The of is approximately share us strengths. to greening be treatment proud drop. fee over another the for expenses decrease until

ensuring challenging credit line Our year we that through continue extremely to could business. flexibility in and our revenues an the while invest financial of work operate to reduced us allowed capital with working significantly

to debt ended increased levels during approximately the XXXX. XX, September our year have million $XX While

million on $XX credit, the provide recent events. credit, of undrawn of a comprised working November have undrawn $XX with continues from impact revolving XXXX of matures credit, as while to credit liquidity, in million in ample which line these that matures continue to our well credit available recover line which $XX of which We the capital believe is of weather million of XXXX. We on company facilities as November approximately of Alico of the

with year, very ended ranch purchases for X we XXXX, sold September million. grove acres the that X,XXX our contiguous approximately Florida with XXXX, one XX, land XX,XXX Ranch the Alico we fiscal approximately to sell During contract $XX.X year the a of remaining signed small of Alico of on the approximately citrus the closed of XX, are groves. in acres current $XX September for Also, million. On State

continue gain to reducing debt the Alico since by is used approximately that as a that priority than anticipated February XXXX. will acres XX,XXX if more balances and over the Plans with Ian of proceeds balances the balances, $XX it citrus debt fiscal expected of $XX decrease years come, amount $XXX.X significant close groves to years during the general repay the in near but net ranch for X of will on will million Florida, planning with approximately is operating X,XXX-acre in for also being clear, the to purposes. It which and for XX as use rate those of from To professionals Hurricane a corporate use to on million sale, could of XXXX, the led are capital a the long-term The balance variable decision our by potential County. million Ranch a penalty as million Alico is working incurred well debt work highest be Myers we are deal a commence repayment concluded past Collier and losses $XXX the to without conduct between process a variable multiyear evaluating its regular land-planning pending line total of land-use for to have end debt the all our the Once buyers XX, at September recently grove net the entitlement proceeds finalized substantial is operations, XXXX. and range for operations of XXXX. Outside company's closed, shield possible our here our incurred to Alico sold real for professionals work at Alico of at credit citrus Fort best estate of balances net our possible assets.

prejudice voluntarily sheet will the to I all financial shareholder all Finally, more related restatement December dismissed -- plaintiffs. With year turn that, by over the discuss in to litigation without balance results. Brad, the call last will last our has Alico's been detail who

everyone. morning, Thank you, John, and good

is XXXX our our primarily As results full year seasonal full of not results business, to quarter our today. the on due nature year of fourth indicative will focus I our

majority our And the quarters. second third flows is as a harvested majority and profit are citrus such, second the the reminder, As also our and the fiscal of third in and recognized of the crop cash year. quarters of in

fiscal September our XX, $XX.X of was for XXXX, in and by harvested in ended ended in box XXXX, a fruit for $XX.X of September For to XXXX. Hurricane the revenue ended amount decrease the fiscal the was as decrease a million September million total September a XXXX XXXX. services compared was $XX.X as result in agreement and result September fiscal XX, $XX.X drop to a the per in the decrease by XX, termination a of for pound revenue $XX.X operating driven compared and grove revenue June respectively. a million XXXX, XXXX year XX, management the million the of fruit year caused food year year fiscal Ian, property The solids million Citrus revenue ended XX, decrease management

While to not the to decrease the box was impact fruit to our XXXX fiscal pound quality appear being as the solids mainly our The in per trees. not as measurable does strong our it year. be in internal there to citrus prior was damage was due of long-term crop substantial, year

The in production to per to overall box decrease the box result Mid-Season and which in a hauling and impact primarily million received solid services improvement haul fiscal solids the such, same year both $XXX.X pound balance solids the the and drop box. Partially expenses as in decrease box solids. year September decrease harvest the XXXX box harvest of of management an impact the lower per to average offsetting relates was production in Total $XX.X The processed and in in The compared we lower XXXX expensed realized lowered operating inventory price to result reduction expenses. pound operating Valencia of adjustments inventory as XXXX September in Ian fiscal $XX.X our decrease million expense. during X.X% be ended Early crop we the intent result ended to of the accelerated the a In a of production Hurricane our pound and year. due the XXXX. Inventory of was realized to year a pound the in citrus grove for proceeds XX, the overall insurance addition, as compared as in XX, a Ian, Hurricane to per of expenses increase ended the lower prior year recorded price ending were as fruit XX, a the XXXX, the year production in effectively of harvesting September realized with fruit. an company and period million prior expenses per and year the maximize in the for minimize the as

decrease as up in drop. These owners costs the management the in by However, exit due business harvesting increase grove were the relation a XXXX the result owners The costs is repairs to and of the for of to as the increase harvesters termination increased the to the citrus as year to the decision Hurricane management harvesting in as decreases the well by the for partially labor boxes directly a Ian. year offset management caretaking grove services for time the cost to September The additional fill XXXX. to the owners. the grove grove compared as eliminated in property expense services per June need related clean by services result the an fruit increased by incurred ended box of XX, spent the prior

September is primarily September caretaking in prior professional million result, expenses $XX.X during as increase fees ended $XX.X XX, significantly due and net prior $X.X expenses XXXX XX, for the and compared million respectively. same year, the due $XX.X the XX, fewer an increase and year year equipment. September closing decreased income which decrease XXXX, year. General the of the to year in other was to lower and was Other period ended year administrative XXXX. XXXX income year. million, The the XXXX compared ended a and resulted to on the XX, the compared legal As primarily in to for were September ended the during sale for net million to sales gains property in land The

approximately and to recognized of Ranch During for the ended the XXXX, acres a gain By recognized year $XX.X and September of year company XXXX, million. related the Alico company X,XXX comparison, ended the million property XX, September equipment. the approximately sale of XX, gains sold $XX.X of

the million on a credit. addition, in recognized ended capital working on balance credit rate year, interest expense $X.X term line compared as of increase and prior debt higher variable September the to and line for rates working as the of XX, overall In XXXX, of capital in the company the its year the an an increase interest result of

For $X.X the of stockholders and legal September to ended $XX.X million XXXX and XX, income XXXX, reported net attributable fiscal respectively. common year million, we

of sheet. million to loss million 'XX September ended strong year the of balance $XX.X a a for compared was the fiscal EBITDA adjusted maintain year. Alico -- as $XX.X XX, prior for income 'XX Our to continues

at Our respectively. I call a September the XX, XXXX and million will maintain to representing working John. of capital X.XX:X pass back and at X.X:X X.X:X and ratio to was we XXXX, now XXXX, approximately debt-to-equity continue ratio a solid $XX.X XX, September

Brad. Thanks,

we as caretaking on its experienced groves. harvest season, the never X XXXX invest over focus in million of OTC Although has over team land practices We've support These and And trees. Alico year years fruit exceptional during we've with harvested trees. XXXX, the our and in significant along XX% to has Florida management. experience lost in harvest. fiscal best-in-class a a voile season. for tested Alico applied Alico therapy continues over investments, next and to since the ] caretaking [ a planted should leader increase difficult XXX of our our members agriculture

create to investments land properties that that, our to all comes the optionality open best value strives long-term to from with and of with agricultural the highest and through questions our evaluating to of line analysts. determine benefits conventional continue now with we the will their stability provide for We use management. And enhanced shareholders. Alico Melissa? will industry our investors active up

[Operator Our the first Instructions] Gerry from of Sweeney line MKM. question comes Roth with

citrus with want have trees a wanted the the the potential on side. to just we're would and some start coming to clarity side recovery and to year's But maybe when you Hurricane Just maybe overall aspect the real then obviously, I of new season. maybe see Ian? into size, quality estate last the after go

the evaluate able answer OTC So couple another would able sort to of able likely simplest to be of most and really impact remaining season. expect will been part treatment the early for the of we'll in the harvested evaluate of what the the have be Valencia of during on we of that be to be months, kind our crop some might will indication that season. we that's us give going to hopefully mid-season And

able make heard positive you the cetera, -- it's some all plant. impacts to I a some so stronger to speaking But on wrap in I -- with reduce deal very and I extremely citrus early tree drop, But OTC of big OTC be up with next very to Florida. commentary would should a from it X fruit help mids? efficacy, believe question. positive, going I've all just was of positive. and the apologize. et was couple questions the mean the you comment, Just industry It and obviously, my varying see

do commentary you around have early benefit of you're can one, the two, into the you some to maybe see going So, today as season? the efficacy any treatment? mid And

visually, the and those to that a have down come like looked that season you way. can that have treated I noticeable at yourself. see when to the complete you really with of Florida, point. ones to trees that look can OTC evaluate the is have efficacy you been see But haven't better this difference between the OTC haven't. And can't end speak for at that with and a treating this we'd The season. past the simplest good the And trees been

fruit a the The to fruit going of [ is it's little enough longer, allow the of by additional hopefully, mature is of in much real Florida of improve reducing test the and quality you time and stay juice will on bit rate drop how out get to OTC treatment tree that the which extra the that that, clearly looking what ]. we're fruit

in that the then near contract future? do negotiations Got the give -- some do has And price think any do your time you just your year-over-year. any think up with to you on an of believe in when you per go that your I then finally, stated some can of update would release, press do structure I it. be us the contracts. And contracts pound expire? Or of I secondarily, nearest you thought, into solids when contracts? in

Brad. Gerry, this is

renewed yes, contract ] on So our contracts, the [ summer. just we over MXXX the

renewed point. was that higher a at price So

with we Tropicana as in this harvest to some year run what of and pickup the other far end 'XX-'XX as are So the we runs we what until realize Then expect the until contract under the citrus the there that contracts see year. contract. of will final That those season. --

contract So soon. will negotiations those begin

board all the the the processors in Across with State. here

you. Got

position orange, You of is Brazil's can that negotiations say, ask imagine tough I for in Now put good coming these That question, down. you think, comment. contract going some probably know it. I'm up? a no answer I production can't to global would

Gerry. working would going in We've hope expected call that than this. together slower oranges at time, comment long the no it's say you to for. will We're I on a a the processors not to Florida sure been like rebound, rate but to But is a I'm of supply

trees well time need going the as spent those improve continue the clearly, that in maturity as that ability near-term reaching the treatment practices So going feel a year-over-year-over-year. to future. We at to those planted caretaking of are as supply Alico money grow and our to here resources we benefits the more good on and and is and of kind foreseeable trees imports we the to trees for of OTC lot hopefully, is

in take Hopefully, So continue behalf profitability line to improve shrinks of consistent bottom we straight to hopefully we're on our be next are able going that of of global hopefully set to increase going is a strong, which to as go basically supply the very to our the increases. contract the be revenues, maybe supplier and terms. our shareholders our to to and advantage supply going hopefully

we more Fort Obviously, sort real use important And What of commentary, particular of next are Got questions. it's should I land. is the Myers. think are estate it. as watch process key quick land-use regarding of going the best think that Two time a we and I decision-making should part planning steps? And are near or What orchard aware sort next there steps lines that go process? any through that be you of be gates that on the to of? for

Yes. consultants early and going all and very it's professionals internally In at work because our term, retained contractors is to be near that of with planning the done stages. the

business still any we with because We this haven't or like as on publicly -- have drawing looking the that our but but on drawing the strong to interest of any project run a future done really that the usual. the county of that anything grove externally going as board, we're officials in organizations operations citrus it's we is on something the board continue that are to acknowledge it and towards, foreseeable it's we're for

board, estate just going that this for in but XXX% you moving the near orchard. at the drawing have to looks project that on a move like some operation, some at point, I would point, Florida, Is to Florida, location a Myers a Obviously, knowing to real estate growth being the least is it. say, project... the at of Fort real to committed Got probability strong

I near is think midterm Yes. probability there a yes. that of good of term, the term, long very kind in

that that you great is up the eventually. know the do finally, client. as the one say think But of there? little we a -- -- with the up and grove available management, want opportunity the I mean I down I sheet, I bit in All side? you the see how at sort don't look that's then expertise, closing background, been And more, balance client, you grove ended or but new What leverage to or being best right. most grove to grove I think, equipment had a a in this of operators around management most picked

demonstrated do again, some selectively We that business this customers with. see selective to are board. potential expertise third-party that the we've on there opportunities that we're We're on other basically for willing caretaking just, take

have has of near a be very that and not take beyond be this or X,XXX We demonstrate on behalf move continues overall. a going resources we it above to because take we and we think self-contained there of on industry care the forth get large citrus citrus some long-term of, to acres good care that that's operation thing and enough kind to acres, but of another hopefully our and the just an manpower the to competitive has to are could we be can planted only that's and industry it commitment easily focusing are and so back existing growth fee, to either to we Alico's management of

of is some operations? that that Is your is X,XXX, or close to self-contained that

is self-contained. one That actually

turn final our the comments. any concludes That I'll session. back Mr. for to floor Kiernan question-and-answer

February. for continued you, like our would We everyone about support Merry Thank this we your look At forward happy you with we first point, to just of Alico. holidays. and quarter And speaking all wish to results everybody Melissa. in thank Christmas

concludes Thank call. conference today's you. This

time. your this lines you at participation. Thank You for may disconnect your