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Alico, Inc. Announces Third Quarter Results Highlighted by $42.7 Million of Adjusted EBITDA and $21.7 Million of Adjusted Free Cash Flow for the Nine Months of Fiscal Year 2015

20:00 EDT 4 Aug 2015 | Globe Newswire

Performance Highlights

  • The Company posted Adjusted EBITDA of $24.1 million in the third quarter and $42.7 million for the nine months ended June 30 for its fiscal year 2015.
     
  • The Company posted Adjusted Free Cash Flow of $29.2 million in the third quarter and $21.7 million for the nine month ended June 30 for its fiscal year 2015.
     
  • The Company posted Adjusted Earnings per Diluted Common Share of $1.25 per share in the third quarter and $2.12 per share for the nine months ended June 30 for its fiscal year 2015.
     
  • The recent Orange Co. and Silver Nip Citrus acquisitions drove 5% pro forma year-over-year improvement in production.
     
  • For the nine months ended June 30, the Company sold 9.8 million boxes of citrus fruit and produced a total of 58.3 million pound solids. 

FORT MYERS, Fla., Aug. 05, 2015 (GLOBE NEWSWIRE) -- Alico, Inc. (“Alico” or the “Company”) (NASDAQ:ALCO), an American agribusiness and natural resources company, today announced financial results for the third quarter and nine months of fiscal year 2015.

       
     Three Months Ended June 30,   Nine Months Ended June 30, 
     2015   2014   2015   2014 
           
Non-GAAP Measures         
 Adjusted EBITDA $  24,133  $  7,350  $  42,663  $  21,397 
 Adjusted earnings per diluted common share$  1.25  $  0.35  $  2.12  $  1.06 
 Adjusted free cash flow$  29,208  $  7,908  $  21,685  $  5,781 
 Adjusted free cash flow per diluted common share$  3.53  $  1.08  $  2.72  $  0.79 
 
GAAP Measures         
 Revenues  $  68,809  $  33,875  $  140,109  $  89,506 
 Operating income  $  16,177  $  2,254  $  20,058  $  9,402 
 Net income $  7,767  $  1,031  $  18,292  $  5,023 
 Diluted EPS $  0.94  $  0.14  $  2.29  $  0.68 
 Cash provided by operations$  32,156  $  10,144  $  25,895  $  14,770 
                 

Clay Wilson, Alico’s Chief Executive Officer, said “The Company is delighted with the number of boxes Alico harvested and sold this season, which represented approximately 9.8 million boxes.   Pro forma for a full year of Orange-Co and Silver Nip Citrus production, the Company sold approximately 10.5 million boxes, an increase of 5% over the 10.0 million boxes sold in the prior season.  This compares favorably to the 8% decrease the Florida orange crop experienced during the same period, as reported by the U.S. Department of Agriculture’s final tally of the 2014/2015 Florida orange crop production.  Alico is proud to have grown in this challenging industry environment and attributes the result to our purchase of high quality groves and superior crop care and growing practices in the field.”

Pro Forma Results for Citrus Groves

The unaudited pro forma financial information below for the nine months ended June 30, 2015 and 2014 gives effect to the acquisitions of Orange-Co and Silver Nip Citrus as if the acquisitions had occurred on October 1, 2014. The pro forma financial information is not necessarily indicative of the results of operations if the acquisitions had been effective as of this date.

 
(in thousands, except for pound solids per box)
 
 Nine Months Ended June 30,    
 20152014  Change % Change
       
Total Citrus Boxes Harvested  10,471  9,970    501   5.0%
       
Total Pound Solids Produced  62,183  62,262    (79)  (0.1)%
       
Pound Solids Per Box - Combined  6.21  6.44    (0.23)  (3.6)%
           

Fiscal Year 2015 Third Quarter Results

The Company’s results of operations for the three and nine months ended June 30, 2015 versus the prior year comparable periods were impacted by the acquisitions of Orange-Co and Silver Nip Citrus  and the sale of its sugarcane operations.

Silver Nip Citrus’ fiscal year end is June 30. As a result, the Company’s results of operations for the three and nine months ended June 30, 2015 includes the Silver Nip Citrus results of operations for the three and nine months ended March 31, 2015, and the Company’s financial condition as of June 30, 2015 includes the financial condition of Silver Nip Citrus as of March 31, 2015. The Company’s results of operations for the three and nine months ended June 30, 2014 includes Silver Nip Citrus’ results of operations from November 19, 2013 (the initial date of common control) through March 31, 2014.

For the third quarter of fiscal year 2015, revenues were $68.8 million as compared to $33.9 million for the third quarter of fiscal year 2014. The increase in revenues was due primarily to the Orange-Co acquisition but also due to increased citrus production for the 2014/15 season, but more than offset by lower citrus prices and decreased sales in the Improved Farmland segment as a result of the recent disposition of our sugarcane operations.

The Company sold approximately 4.5 million boxes of oranges in the third quarter of fiscal year 2015 compared to approximately 1.7 million boxes in the same period of fiscal year 2014.  Total  pound solids were 27.6 million in the third quarter of fiscal year 2015 compared to pound solids production of approximately 11.1 million in the third quarter of fiscal year 2014.  The market price per pound solid for the Valencia variety in the third quarter of fiscal year 2015 was approximately $2.07 compared to $2.37 in the same period of fiscal year 2014, a decrease of $0.30 per pound solid or 13%.

Total operating expenses for the third quarter of fiscal year 2015 were $49.0 million as compared to $29.3 million for the third quarter of fiscal year 2014, an increase of $19.7 million. Operating expenses increased by approximately $27.2 million in the Citrus Groves segment primarily due to the acquisition of Orange-Co and 2.8 million more boxes were harvested in the third quarter of fiscal year 2015 compared to the third quarter of fiscal year 2014.  Of the $27.2 million increase in operating expenses, $3.0 million is a non-cash expense as a result of purchase accounting related adjustments from the acquisition of Orange-Co.  The valuation of fruit inventory acquired from Orange-Co was marked to fair value to account for the stage of the fruit development at the time of acquisition. The Company does not expect any additional  incremental operating expenses related to purchase accounting for the remainder of fiscal year 2015. The impact of the purchase accounting adjustments on operating expenses is non-recurring beyond fiscal year 2015.  Reported results include $2.6 million of non-recurring expenses, net of taxes, for the quarter and $1.4 million of non-recurring income, net of tax for the nine months ended June 30, 2015.

Net income for the third quarter of fiscal year 2015 was $7.8 million, or $0.94 per basic and diluted share, compared to net income of $1.0 million, or $0.14 per basic and diluted share in the third quarter of fiscal year 2014.

Adjusted EBITDA (defined as net income excluding interest expense, income tax provision, depreciation and amortization and adjusted for non-recurring income and expense items) for the third quarter of fiscal year 2015 was $24.1 million as compared to $7.4 million for the third quarter of fiscal year 2014. A reconciliation of Net Income to Adjusted EBITDA is provided at the end of this release.

Adjusted Earnings per Diluted Common Share (defined as net income excluding non-recurring income and expense items, net of related income taxes) was $1.25 for the third quarter of fiscal year 2015 as compared to $0.35 for the third quarter of fiscal year 2014.  A reconciliation of Net Income to Adjusted Earnings per Diluted Common Share is provided at the end of this release.

Fiscal Year 2015 Nine Months Results

For the nine months ended June 30, 2015, revenues were $140.1 million, compared to $89.5 million for the same period of fiscal year 2014.  Increased Citrus Groves revenues were offset by lower citrus prices and decreases in Agricultural Supply Chain Management and Improved Farmland revenues resulting from a reduction in external boxes handled, as well as the sale of our sugarcane operations.

Net income for the nine months ended June 30, 2015 was $18.3 million, or $2.29 per diluted share, compared to $5.0 million, or $0.68 per diluted share, for the same period of fiscal year 2014.   Adjusted EBITDA for the nine months ended June 30, 2015 was $42.7 million as compared to $21.4 million in the same period of fiscal year 2014.  Adjusted Earnings per Diluted Common Share was $2.12 compared to $1.06 for the same period in fiscal year 2014. 

Balance Sheet and Liquidity

The Company ended the third quarter with debt, net of cash and cash equivalents, of $200.2 million, a reduction of $29.0 million in the third quarter.  Net interest expense was $2.1 million in the third quarter.   Availability under the Company’s revolving lines of credit was $55.2 million as of June 30, 2015.  The Company paid down approximately $15.1 million of new term loan debt in the nine months of fiscal year 2015, of which $8.75 million could serve to reduce future mandatory repayments through 2016.  

The Company repurchased approximately 10,000 shares of common stock at an average cost of $49.27 per share in the quarter.

The Company recorded an effective tax rate of 37.4 percent for the nine months ended June 30, 2015, due to the favorable impact of claiming certain deductions on amended federal and state income tax returns filed in previous fiscal years.

About Alico

Alico is a holding company with assets and related operations in agriculture and natural resources. In addition to its citrus operations, Alico is currently involved in cattle ranching, water management, mining and other natural resources. Our mission is to create value for shareholders by managing existing assets to their optimal current income and total returns, opportunistically acquiring new assets and producing high quality agricultural products while exercising responsible environmental stewardship. Learn more about Alico (NASDAQ:ALCO) at www.alicoinc.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are based on Alico’s current expectations about future events and can be identified by terms such as “plans,” “expect,” “may,” “anticipate,” “intend,” “should be,” “will be,” “is likely to,” “believes,” and similar expressions referring to future periods.

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: changes in laws, regulation and rules; weather conditions that affect production, transportation, storage, demand, import and export of fresh product and its by-products, increased pressure from disease, insects and other pests; disruption of water supplies or changes in water allocations; pricing and supply of raw materials and products; market responses to industry volume pressures; pricing and supply of energy; changes in interest rates; availability of financing for land development activities and other growth opportunities; onetime events; acquisitions and divestitures, including our ability to achieve the anticipated results of the Orange-Co acquisition and Silver Nip merger; seasonality; labor disruptions; inability to pay debt obligations; inability to engage in certain transactions due to restrictive covenants in debt instruments; government restrictions on land use; changes in agricultural land values; and market and pricing risks due to concentrated ownership of stock. Other risks and uncertainties include those that are described in Alico’s SEC filings, which are available on the SEC’s website at http://www.sec.gov. Alico undertakes no obligation to subsequently update or revise the forward-looking statements made in this press release, except as required by law.

Non-GAAP Financial Measures

Alico utilizes Adjusted EBITDA among other measures, to evaluate the performance of its business. Due to significant depreciable assets associated with the nature of our operations and, to a lesser extent, interest costs associated with our capital structure, management believes that Adjusted EBITDA, Adjusted Earnings per Diluted Common Share, Adjusted Free Cash Flow and Adjusted Free Cash Flow per Diluted Common Share are important measures to evaluate our results of operations between periods on a more comparable basis and to help investors analyze underlying trends in our business, evaluate the performance of our business both on an absolute basis and relative to our peers and the broader market, provides useful information to both management and investors by excluding certain items that may not be indicative of our core operating results and operational strength of our business and helps investors evaluate our ability to service our debt.  Such measurements are not prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and should not be construed as an alternative to reported results determined in accordance with U.S. GAAP. The non-GAAP information provided is unique to Alico and may not be consistent with methodologies used by other companies. Adjusted Free Cash Flow is defined as cash provided by operations less capital expenditures adjusted for non-recurring transactions. The Company uses Adjusted Free Cash Flow and Adjusted Free Cash Flow per Diluted Common Share to evaluate its business and this measure is considered an important indicator of the Company's liquidity, including its ability to reduce net debt, make strategic investments, and pay dividends to common stockholders. An analysis of Adjusted Free Cash Flow and Adjusted Free Cash Flow per Diluted Common Share is provided below. Net income, which management considers being the most directly comparable financial measure calculated and presented in accordance with U.S. GAAP, is reconciled to Adjusted EBITDA and Adjusted Earnings per Common Share, as follows:

          
Adjusted EBITDA         
(in thousands)         
     Three Months Ended June 30,   Nine Months Ended June 30, 
     2015   2014   2015   2014 
           
Net income  $  7,767  $  1,031  $  18,292  $  5,023 
 Interest expense     2,127     657     5,715     1,322 
 Income tax provision    6,227     791     10,940     3,236 
 Depreciation and amortization    3,851     2,305     9,919     7,244 
           
EBITDA     19,972     4,784     44,866     16,825 
 Asset impairment     -      -      541     -  
 Loss on extinguishment of debt    -      -      964     -  
 Transaction costs     407     261     4,760     2,266 
 Write-off of certain inventory and plant cane costs   -      2,309     -      2,309 
 Acquired citrus inventory fair value adjustments   3,023     -      7,225     -  
 Payments on consulting agreements    704     -      704     -  
 Loss (gain) on sale of assets    27     (4)    (16,397)    (3)
           
Adjusted EBITDA  $  24,133  $  7,350  $  42,663  $  21,397 
           
           
Adjusted Earnings Per Diluted Common Share Three Months Ended June 30,   Nine Months Ended June 30, 
(in thousands)   2015   2014   2015   2014 
           
Net income  $  7,767  $  1,031  $  18,292  $  5,023 
 Asset impairment     -      -      541     -  
 Loss on extinguishment of debt    -      -      964     -  
 Transaction costs     407     261     4,760     2,266 
 Write-off of certain inventory and plant cane costs   -      2,309     -      2,309 
 Acquired citrus inventory fair value adjustments   3,023     -      7,225     -  
 Payments on consulting agreements    704     -      704     -  
 Loss (gain) on sale of assets    27     (4)    (16,397)    (3)
 Tax impact      (1,594)    (1,030)    824     (1,792)
           
Adjusted net income  $  10,334  $  2,567  $  16,913  $  7,803 
           
Dilutive common shares    8,284     7,356     7,971     7,351 
           
Adjusted Earnings Per Diluted Common Share$  1.25  $  0.35  $  2.12  $  1.06 
           
           
Adjusted Free Cash Flow  Three Months Ended June 30,   Nine Months Ended June 30, 
(in thousands)   2015   2014   2015   2014 
           
Cash provided by operations $  32,156  $  10,144  $  25,895  $  14,770 
Adjustments for non-recurring items:        
 Transaction costs     407     261     4,760     2,266 
 Payments on consulting agreements    704     -      704     -  
           
Capital expenditures     (4,059)    (2,497)    (9,674)    (11,255)
           
Adjusted Free Cash Flow $  29,208  $  7,908  $  21,685  $  5,781 
           
Dilutive common shares    8,284     7,356     7,971     7,351 
           
Adjusted Free Cash Flow Per Diluted Common Share$  3.53  $  1.08  $  2.72  $  0.79 
 

 

ALICO, INC. 
CONDENSED COMBINED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(in thousands, except per share amounts)
       
   Three Months Ended June 30,   Nine Months Ended June 30, 
    2015    2014     2015    2014  
   (unaudited)   (unaudited) 
Operating revenues:      
Citrus Groves $  65,795 $  27,167  $  129,084 $  55,390 
Agricultural Supply Chain Management    2,105    4,083     6,584    12,324 
Improved Farmland    418    2,159     2,492    19,441 
Ranch and Conservation    296    408     1,441    1,849 
Other Operations    195    58     508    502 
Total operating revenue    68,809    33,875     140,109    89,506 
       
Operating expenses:      
Citrus Groves    45,551    18,317     96,027    36,560 
Agricultural Supply Chain Management    1,467    3,916     5,578    12,085 
Improved Farmland    659    6,591     2,736    20,986 
Ranch and Conservation    624    684     1,992    2,231 
Other Operations    693    (226)    786    281 
Total operating expenses    48,994    29,282     107,119    72,143 
       
Gross profit    19,815    4,593     32,990    17,363 
Corporate, general and administrative    3,638    2,339     12,932    7,961 
       
Income from operations    16,177    2,254     20,058    9,402 
       
Other income (expense), net:      
Interest and investment income, net    42    88     44    115 
Interest expense    (2,127)   (657)    (5,715)   (1,322)
Loss on extinguishment of debt    -     -      (964)   -  
Gain (loss) on sale of real estate    (27)   4     16,397    3 
Asset impairment    -     -      (541)   -  
Other income (loss), net    (71)   133     (47)   61 
Total other income (expense), net    (2,183)   (432)    9,174    (1,143)
       
Income before income taxes    13,994    1,822     29,232    8,259 
Income taxes    6,227    791     10,940    3,236 
       
Net income    7,767    1,031     18,292    5,023 
Net income (loss) attributable to noncontrolling interests    -     -      -     -  
       
Net income attributable to Alico, Inc. common stockholders   7,767    1,031     18,292    5,023 
Other comprehensive income (loss), net of tax    -     -      -     -  
Comprehensive income    7,767    1,031     18,292    5,023 
Comprehensive income (loss) attributable to noncontrolling interest   -     -      -     -  
Comprehensive income attributable to Alico, Inc. common stockholders$  7,767 $  1,031  $  18,292 $  5,023 
       
Earnings per common share:      
Basic $  0.94 $  0.14  $  2.30 $  0.69 
Diluted $  0.94 $  0.14  $  2.29 $  0.68 
Weighted-average number of common shares outstanding:     
Basic    8,278    7,356     7,969    7,327 
Diluted    8,284    7,356     7,971    7,351 
       
Cash dividends declared per common share $  0.06 $  0.06  $  0.18 $  0.18 
       

 

ALICO, INC. 
CONDENSED COMBINED CONSOLIDATED BALANCE SHEETS 
(in thousands, except share and per share amounts)
   
  June
30,

2015 
 September 30,
2014
 
  (unaudited)  (unaudited) 
   
ASSETS  
Current assets:  
Cash and cash equivalents$  9,739 $  31,020 
Short-term investments   -     263 
Accounts receivable, net   15,103    8,724 
Inventories, net   46,255    25,469 
Income tax receivable   2,074    -  
Assets held for sale   -     59,513 
Other current assets   5,504    721 
Total current assets  78,675   125,710 
   
Property, buildings and equipment, net   383,100    126,833 
Goodwill   2,246    -  
Investment in Magnolia Fund   825    1,435 
Cash surrender value of life insurance   705    695 
Investments, deposits and other assets   4,671    2,905 
Total assets$ 470,222 $ 257,578 
   
   
LIABILITIES & EQUITY  
Current liabilities:  
Accounts payable$  3,352 $  2,052 
Long-term debt, current portion   4,511    3,196 
Accrued expenses   7,941    1,934 
Income taxes payable   -     4,572 
Deferred tax liability, current portion   725    3,135 
Dividends payable   497    442 
Accrued ad valorem taxes   1,757    1,850 
Capital lease obligation, current portion   258    259 
Other current liabilities   1,002    3,229 
Total current liabilities   20,043    20,669 
   
Long-term debt, net of current portion   202,069    58,444 
Lines of credit   3,348    3,160 
Deferred gain on sale of assets, net of current portion   29,139    -  
Capital lease obligation, net of current portion   839    839 
Deferred tax liability, net of current portion   23,595    8,760 
Deferred retirement benefits   3,895    3,855 
Other liabilities   3,867    -  
Total liabilities  286,795    95,727 
   
Commitments and contingencies (Note 11)  
   
Equity:  
Preferred stock, no par value, 1,000,000 shares authorized; none issued   -     -  
Common stock, $1 par value; 15,000,000 shares authorized, 8,300,363 and 7,377,106 shares issued and 8,277,513 and 7,361,340 shares outstanding as of June 30, 2015 and September 30, 2014, respectively   8,300    7,377 
Additional paid-in-capital   21,360    3,742 
Treasury stock at cost, 22,850 and 15,766 shares held as of June 30, 2015 and September 30, 2014, respectively   (1,147)   (650)
Members' equity   -     16,414 
Retained earnings  150,076   134,968 
Total Alico, Inc. equity  178,589   161,851 
   
Noncontrolling interest   4,838    -  
   
Total liabilities and equity$ 470,222 $ 257,578 
   

 

ALICO, INC.
CONDENSED COMBINED CONSOLIDATED STATEMENTS OF CASH FLOWS 
(in thousands)
   
 Nine Months Ended
 June 30,
  2015  2014 
  (unaudited) 
   
Net cash provided by operating activities$  25,895 $  14,770 
   
Cash flows from investing activities:  
Capital expenditures   (9,674)   (11,255)
Acquisition of citrus businesses, net of cash acquired   (283,211)   -  
Proceeds from sale of sugarcane operations   97,151    -  
Proceeds for the sale of assets   9,045    928 
Return on investment in Magnolia Fund   652    3,185 
Other   (1)   27 
Net cash used in investing activities   (186,038)   (7,115)
   
Cash flows from financing activities:  
Principal payments on term loans   (15,061)   (3,041)
Repayment of term loan   (34,000)   -  
Borrowings on revolving line of credits   81,135    -  
Repayments on revolving line of credits   (80,947)   -  
Proceeds from term loans   193,500    -  
Financing costs   (3,353)   -  
Treasury stock purchases   (1,029)   (4,844)
Dividends paid   (1,381)   (2,744)
Principal payments on capital lease obligation   (2)   -  
Net cash provided by (used in) financing activities   138,862    (10,629)
   
Net decrease in cash and cash equivalents   (21,281)   (2,974)
Cash and cash equivalents at beginning of period   31,020    27,252 
   
Cash and cash equivalents at end of period$  9,739 $  24,278 
   
Supplemental cash flow information:  
Cash paid for interest, net of amount capitalized$  4,892 $  1,193 
Cash paid for income taxes$  5,200 $  925 
   
Investor Contact:
John E. Kiernan
Senior Vice President and Chief Financial Officer
(239) 226-2000
JKiernan@alicoinc.com

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