- Earnings call transcript Q4 2022

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Operator

Welcome to Alico's Fourth Quarter and Full-Year 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode.

As a reminder, today's conference is being recorded. Earlier today, the Company issued a press release announcing its results for the fourth quarter and full-year ended September 30, 2022.

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

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

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

that, more the would John these details refer With please the like press and For Kiernan. release the today. earlier to measures, Company's turn Company's to call issued Mr. over to President on I CEO,

John Kiernan

challenging the September a Thank our company XXXX was earnings on for you, industry. fourth afternoon. Florida had for joining ended year a everyone, citrus fiscal weather you, events XXXX year XX, impact Thank quarter call Doug. us Alico. and for and meaningful Alico's Fiscal Two this year

At beginning the of made substantial harvest hour the and of the XXX-mile decision our our January, drop standards. at drop in to storm end accelerate time season, not and Hurricane fruit The Southwestern struck the we fruit discussed, the for As with harvesting Valencia majority remaining did winds. the fruit quality across state, the September, causing crop at an Florida our increased Ian to slow-moving optimal have of to that the mature moved of previously groves. freeze

XXXX largely This Hurricane items tree point or aggregate financial property. season. one casualty was harvest $XX are we and of adjustments. one-time results losses fruit damage pre-hurricane for experience our to may Fortunately, recovery we levels crop closely fruit anticipate that however, have working We lower the year adjusters year for Fiscal limited upon prior evaluate storms take because maybe if impacted will only following maintain determine sale. of it and after XXXX see recover through in million of up inventory less XXXX, revenue an any. for with Based our nature, recovered amount to groves this out, with of available and fiscal two to our of and approximately lost we our groves to to, insurers insurance insurance Irma our entitled I levels. more seasons struck would to production the currently we

to XXXX, For income Alico for losses net $XX.X stockholders of $XX.X approximately income Hurricane the Ian. approximately to fiscal by one-time $XX impacted million The XX, were results related fiscal for negatively items impact of year year the ended ended XXXX September casualty of inventory XXXX. and adjustments company common approximately net fiscal September compared to to attributable ended stockholders of XX, million year the common attributable Alico the reported million

million was the XX, for Our September year EBITDA ended $XX.X XXXX. fiscal million which ended to as compared excludes approximately non-recurring for year $XX.X fiscal adjusted items, XXXX approximately

our greatest in recent approximately of years boxes, was actions X.X XXXX year sheet fiscal million strengths. compared that Company decrease one believes XX.X% for production of balance a fiscal our year box as make to overall Our XXXX. taken

extension XXXX is XXXX. Inc. of reduced until our its of term negotiated Our million an X, capital Agrifinance, debt $XX significantly most and non-amortizing. prepayments long-term been in through November working Rabo debt levels maturing credit of Alico line have with now

MetLife $XX.X XXXX. and line November such effects the the credit significant debt, other fiscal million recent to from Ian. approximately included as Senior the a with impact prepayment events. Our which seek revolving repaid Citrus aid have rate our of the company of the million Alico loans. with the $XX.X company with Hurricane liquidity also million government group, industry We manages extends of working credit agencies, trade following. federal throughout term believe our year, took $XX through recovery ample to the relief while actions until We closely of Florida Alico approximately facilities managers on Mutual, variable weather the that provide of been of these

ratio XX, September having made X principal to debt-to-equity X.XX we debt And to have X.XX over to our past we six XX%, of was balances it XXXX, of year years, our a the improved $XX by reduced million. ago. approximately X, As payments

tree potential new fruit groves. we now planted own trees acres season. to We enable we XXXX density committed XXXX, six Our tree harvest existing over years significantly X.X to our has approximately increased to current the years. believe over our the of and box coming million approximately of as the the planting In materially agreements in supply new which last recently the increase XX% strategy purchased the production long-term

at to our assets attractive evaluate be ranch off and flow. believe cash sold land generate we to We continue prices non-citrus opportunistically to

allocation During Future land closed to, to Alico XX,XXX opportunities other land, as returns acres still we citrus be making ranch the the in approximately common special not potential at are pursuing are include, we of seeing decisions fiscal acquire have X,XXX even potential but an additional portions sale or ranch interest of will on acres as shares, realized. asset of limited additional may of considering and prices, attractive such are repurchasing which the shareholders, to we Ranch, acquisitions year sales maximize to and dividends continued acres for effort XXXX, evaluated buyers. approximately capital sale from

sustainability and social published second initiatives environmental, and annual continue Our governance our report. we just

formed code guide we to our assessment of discuss results. Global and ESG a communicated, the corporate and policy, support safety we which joined responsibility, framework sustainability an that on to manual. With to Compact financial that, call committee, helped includes rights We Perry company's labor UN activities, sustainability conduct principles Board our sustainability anticorruption. like and a a detailed inform turn website, of materiality human future environmental completed launched over our Del and the sustainability to As universal Vecchio our the ESG a previously more I'd page to vendor

Perry Del Vecchio

you, Thank John, good and everyone. afternoon,

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

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

production was decrease XX, September to For in by million XXXX. the to September $XXX.X and a fiscal the respectively. compared million million XXXX, particularly and in our September harvested XX, pound revenue and revenue XXXX, for Services. years decrease fiscal fiscal revenue Citrus primarily Valencia XX, fruit compared the ended XXXX, in the The The ended box box revenue year in a year lower operating Grove XX, September decrease in per for from year the and was fiscal year was reduction and primarily a due September total ended $XX.X process XX, mid $XXX.X decrease Management driven a fiscal the early our XXXX box. XXXX, ended production ended for to Valencia in fruit million $XX.X and was solids decrease

drop As which optimal the previously discussed, due did XXXX this our not fruit time the and increased mature harvesting to standards. of we harvest of to the have fruit made accelerate to primarily the January was Valencia at which event, the season, remaining quality to decision beginning freeze

for current year the pricing Our average harvested in citrus for being per at turn levels to price was reduced fiscal juice offsetting led the the which previous drop per $X.XX due number Florida in in of fiscal number XX, result to year. boxes a primarily processors. of compared fewer lower as prior general, the year solid boxes in from of smaller pound Valencia as Largely tighter this the ended increased year. of current harvest a to the supplies recorded fiscal lower pound the during to the which entire fruit greater This was and resulted increase $X.XX harvested fruit, revenues. industry, in box with along inventory compared to prior blended year, XXXX, September We the season solid

with XXXX grove Grove serviced Services, top acres agreement, Management XXXX, the citrus management includes all under grower. and owned entered which in approximately of into fiscal which which approximately management X,XXX services During X,XXX harvest was parties XX caretaking by acres, third to of and provided July land we are property our year a

property approximate During X,XXX agreement of June the ceased and by grove property XXXX, and as management these acres terminated of XXXX. was the all caretaking management the services XX, quarter third covering owner

As coverage acres third providing are these from for the all receive based on costs services incurred agreements, to part these relating reimbursed management of a we fee parties. and

an reminder, and we revenues and in a As both we increase as when provide recorded services. expenses these

offset in by approximately year citrus compared operating million we million the in year In XX.X% XXXX. decrease mostly for XX year of Grove haul The million casualty as of inventory The Grove the year $XX.X year from ended season, XXXX, agreement increase This to expenses million terminated operating expenses. fiscal in ended million increase loss and recorded Services declined as in compared XX, harvest ended The a USDA $XX and final decreased the that relates XX.X a and in approximately in in from ended Management million $XX the represents boxes XXXX $XX.X revenue crop as fiscal season. crop season harvest boxes current to the forecast Florida XXXX, as was property by year approximately orange the in for the XXXX Management by we worth adjustments fiscal revenue the in Hurricane to prior fiscal partially harvest September management million result XXXX/XXXX fiscal harvest Services approximate For XX, compared indicated $XX.X XX.X%. comparison, September Ian. to in fiscal its XXXX. to

an stated, XX acres. we into entered agreement services and covering previously property approximately X,XXX caretaking As management the top to grower with provide

all services was third grove property and XXXX. XX, quarter the agreement the June property these acres covering of and XXXX, and the approximate owner ceased management During caretaking by management as X,XXX terminated of

attributable the XXXX year $XX.X a operating ended legal year approximately recorded from year XX, with For Management as XXXX, million ended Grove approximately XXXX. property expenses $XX.X $XX.X compared compared fiscal from box September fiscal XXXX from expenses terminated ended ended to fiscal XXXX, we XX, year expenses Services, of million insurers $X.X legal The the fiscal due in expenses haul ended for to expenses reduced XXXX. in approximately to to fiscal reduction fiscal September the by primarily approximately XXXX operating legal as XXXX. in as and represented discussed. in million Increase previously in the to ended an harvest lower compared expenses million the was the agreement fiscal year to XXXX. and XX, $XX.X General lower We management for administrative the million year $XXX,XXX ended fiscal year for $X.X reimbursement million compared matter were year increase corporate September recognized

at of due increases restricted sales XX, recording fiscal primarily to reduction of the gains expenses previous estate, higher assets Other on was fiscal million, September director was net relating fiscal offset compared XXX the and addition employees. Directors. agreement as of year reduction XXXX increases million million real approximately a recognized expense compensation and payroll a XXXX, years and of by of in in a fees income property other The for fiscal These year. approximately ended non-executive the $XX.X and from modification sale XXXX partially $X.X on September the respectively. to of approximately equipment awarded approximately in in year company for down XX, to for a stock stock $X.X to held for XXXX to the income ended relating million of in In the approximately the headcount XXX company's Board to $X.X XXXX, net September in compensation reduction XX, million were $XX.X XXXX,

million acres recorded we we to the parties. sale the year held and For of XX, By ended XXXX, sale recognized to approximately estate for sale $XX.X equipment real $XX.X of XXXX, property for and comparison, estate, relating held of on X,XXX assets property approximately of of the for fiscal the XX, sale and third Alico year several assets sale from ended September equipment and Ranch gains million. fiscal on gains September approximately real

approximately year of debt was with expense interest of reduction September in XX, mandatory other XXXX $X.X the decrease million and due realized our as a for prepayments. to ended ended fiscal Additionally, of year to XXXX, XX, September principal along compared the the making fiscal payments long-term

September XX, proceeds Irma the of XXXX. damage under XXXX, approximately Citrus to Hurricane Block During Recovery the million additional fiscal year ended XX, received operations. sustained in relating included we Florida These September as Through September operating Grant under proceeds the approximately in million we consolidated $X.X proceeds program $XX.X program. statements to federal are relief expenses XXXX, received of of a reduction this

During year the funds of this first million. that incurred expenses XXXX, under quarter due certain of program portion crop $X.X received the to insurance approximately related the of the by fiscal have we are of remaining reimbursement us

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

was as ended to approximately for the for ended EBITDA million adjusted $XX.X the XX, XX, approximately XXXX. compared fiscal year million fiscal year Our $XX.X XXXX September September

We our continue to sheet. strengthen balance

working at September XXXX, $XX.X was X ratio. approximately Our capital XX, representing X.XX million a to

XXXX at Our ratios respectively. fiscal related certain we X.XX were provide loans. voluntary to This in debt-to-equity the XX, on production, X mandatory to ratio improvement XXXX. to X, and as for approximately XX, million XXXX year unable April drop long-term box September and estimated the uncertainty XXXX, prepayments fruit to to variable term September are as driven time rate well improve. the XXXX, Due has X.XX guidance $XX.X and XX, to continued been At this on X, prepayments including our September to by the X.XX debt continues

of statement in had balance the our During company John. increase annual liabilities back now a of I fiscal and sheet consolidated The calculation error of of XXXX, XXXX, presented items but consolidated earnings of XX-K the cash on for statement fiscal the on completion cumulative XX, XXXX Form retained ending each XX, approximately and fiscal liability in identified resulted end cumulative previously error XXXX. in December of the in consolidated of report the September of corresponding like no XX-K, XXXX, year resulting of reported restatement since balance quarter deferred on the September the an years through for a as of as XX, our as a in deferred impact tax our pass to would XXXX. earlier or tax this flows the Form to $X,XXX,XXX sheet our afternoon, September operations audited filed call in reduction the XX,

John Kiernan

Thanks, Perry.

for it Florida since to our source million pride have six we of became a able Rate sales discussed, shareholders. more our enabled challenging our amounts shareholders. dividends than we industry, common a of dividend in proceeds levels paid returned capital of As be year shareholders to company as since back and payments strengthen has and publicly operations reductions increased consistently has decades and been to approximately ranch to sheet in debt held for significant the ago. our XXXX citrus although returned $XX.X balance it were was Alico to dividends

in the Florida. into most quarterly share. Board of However, account what of the We believe investments the Alico reduce created the several groves common to recent Directors to have its taking the unanimously years that citrus to storm, per impact be has $X.XX productive we voted past over made next dividend Alico's believe

the will We assets. investment on conventional continue a real to to with returns ability agriculture optimize the blend our

generate questions we expect line land from and over Doug? for our industry will are And this with we planning open shareholders now the next to to years, through the returns with analysts. active We strategy professionals up management. that, to work continuing land-use several develop to greater help which implement

Operator

time, Ladies be Please Thank your first Gerry comes and Capital. this question-and-answer at Sweeney a of [Operator session. line we the Instructions] gentlemen, Our will conducting proceed you. question question. from with ROTH with

Gerard Sweeney

Hey, taking John call. for Perry. the and Thanks

John Kiernan

Gerry. Hi,

Gerard Sweeney

process status sorry... that availability if then, when us go – Curious on of what sort you of timing yes, bit to give you in fully of understand could crop maybe insurance the and on any, if little is insurance, a you through the have insight

John Kiernan

in take order. No, them we'll

insurance of acres. We crop catastrophic. all have It's primarily on our

we So to that is not of is measure affect actual of few at estimates very majority And it's going of certainly significant a of don't really but be measure to until going quite damage. to And them, itself. we can't the the affecting very, we're crop them. a going to all actually the point to this measure our have actual end crop groves. now, season harvest think going results. do right a until the but It We

it's be months. few So more to going a

Gerard Sweeney

bit switch you coming be was and came sort get Ian of do up. quality to back the a got – just of fruit Again, to But the for to. season clear, gears the of I on kind get when that do little harvest, tree visibility you it. the when the And Got step this harvest? some off during

So really as know we rebound have. good like correct? year to what kind rebound to or a even probably solid what a that for of we're going big Is won't

John Kiernan

to similar Hurricane XXXX. back Irma in what Yes, saw we in

we'll those in order. take So

early just what the force hurricane lot And of So more we tree so evaluation grain that with yes, of for September. salt that and crop to to crop. us the started size tell to a we a or a was again, in mid-season this the about affected. do ago. still came our was probably because through mature most week take have too hanging those actually harvesting you varieties and and all early on winds really because it larger when have It's And

going and is standard going we in season, we're kind the storm. the be. certainly eventually right unfortunately, by affected start can't juice give storm, quality mid-February, as of to of guidance the but anticipating or Valencia not likely is affected by kind quantity The So what to ultimate most now

So disclosures really us another weeks, much its in we quality no standards. It's early few all for these optimism better don't relative semblance and the a there's did mid more for some reason have because in of today, But just know should much of September. issue some there. crop certainly to small we with than timing we that ideas kind

Gerard Sweeney

of relates of when September to, visibility XXXX in harvest, sort fiscal you up? With of a get would be Would Got that on harvest. that early visibility as next say, mid, coming So sort year August, right? it. it this year we'll

John Kiernan

Yes.

do the late internally crop traditionally, months. of of summer forecast in So kind our kind first we

August would And September is traditional. it be So be a visibility tree first us make And kind of our first early the or into like. sure going it would again, fruit of and matures. game next that the on the looks the season will waiting that that what into crop give stays glimpse to

that was in quick saw there on a we As we that, say and to actually out going We rebound. a Irma, expect happen. to want go very limb don't that's

two-plus preproduction We prior will kind crossed, it levels. But to of to our would obviously. rebound fingers keep Irma, years to have taken

be as to crossed and unfortunately just game first start we summer then to fingers waiting another get harvest glimpse going the it's next November, for season next So to the December. next

Gerard Sweeney

Got it.

in or if Going a any updates relief, Federal week insurance to back of two, process, a moved last the but I going that? know the anything that's be couple part. weeks? has to on

John Kiernan

visibility our of on And have trade Citrus state-driven a come very Yes. the Washington. kind initiative industry entirely in the the dependent kind we mode. Most out a of We're kind lot this going to almost point growers likely to we wait Florida. behalf but in citrus good Unfortunately, program. to funding. all state be It's like unfortunately, That's of a of on of that's of closely group. going is of Mutual, don't this is starting theme, on be working not sound and with federal are

Gerard Sweeney

this that don't an Got think for at and separate state thought relief you. was funding? process? emergency for Does open And apologize the federal that – this I relief of I Or a here. of – probably a funding a since is federal on of or questions and whole But assume declared again, there some of federal the state does I to automatically, want the whole I sort say automatically level. federal but that door –

John Kiernan

or really it some early the funds Rubio a similar those it's generations think a that here whole the back large for separate past. relief in and because way, outlined that going Alico and to and something and disaster Florida. peers both sort process specific think can We to in earmark industry-type Yes. I for citrus and long go our Senator what friends keep was very program This theme It's will emergency. to very, and to really, initiative very in that was isn't to sponsored of for really come hopefully, funds continue a kind October, like legislation a industry alive be growing of similar

Gerard Sweeney

the on estate more One side. Okay. real

Just how looks of or activity – sort the how curious tone tenor demand properties, sales front? of in market if backlog, terms property the on

John Kiernan

Sure. get big we information statistics or release. really in into We the press saw have that them [indiscernible] a

quarter. We few small have in transactions this closed a

in said consider to at press we we is As attractive. be prices that release, it the

there We've several buyers point. are a demand. negotiating or continued So is stage at in other contract that this got

real So the estate still Ranch. we Alico active are front relative the to on

Gerard Sweeney

you. Got

for Okay. me. That's it

John Kiernan

your Thank you, support. for Gerry. Thanks

Operator

to Kiernan Mr. session. I'd to closing it back our hand remarks. concludes for like That question-and-answer

John Kiernan

speaking our and you and our of support rest the Alico. down of for today with of Alico up joining much. Perry Florida, Fort about call we everyone, in very you, February. look team for Thank On first forward and results your in coming the quarter to here also based Myers, Thanks myself behalf

Operator

gentlemen, does your teleconference. this for Thank participation. and conclude Ladies you today's

disconnect and this your at a time, lines wonderful have may day. You

Alico (ALCO) 16 Dec 222022 Q4 Earnings call transcript