Earnings call transcript Q3 2023

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Operator

Welcome to Alico's Third Quarter 2023 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 third quarter ended June 30, 2023.

If you've 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

statements. subject Before these remind factors materially prepared forward-looking from everyone begin, that that statements we we results or the remarks would may cause those today to and expressed risks, statements. uncertainties to like actual to Such other are differ contain in implied

SEC those statements update the or reports with as also details on on the filed could subsequently undertakes forward-looking that any the contribute except Form and annual law. in Form company's factors made earnings differences, company release. and risk to by The reports Important including revise current reports to today's the quarterly XX-Q, in X-K obligation no on on XX-K, call mentioned such Form required thereto amendments

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

and measures please directly of on For reconciliations these for details the to refer GAAP financial non-GAAP issued comparable press company's these earlier more release today. most the financial measures to measures,

the I'd to the like turn and Kiernan. President call to Mr. over that, CEO, With John company's

John Kiernan

with XXXX earnings Thank us for XXXX are forward impacts the for last you, optimism. but everyone, morning. Ian been September, guarded call season difficult season harvest to joining we this looking Alico, And The quarter third Mark. because of has Alico's thank the XXXX, a citrus for you, one from upcoming Hurricane

of that greening for beginning upcoming will but began a production recover level increase combined consistent to help compared quantities XXXX, harvest the apply practices, season. it XXXX, therapy to such in this Historically, grove we expectation or as many two storm, citrus us planted have substantially XXXX, Of for year, seasons gives to the production has season taken better the our of season, we Alico. produce support harvest now meaningful are new XXXX confidence a this millions fruit enough with and from citrus of trees, mature Alico’s more a harvest XXXX devastating for for citrus to the caretaking

We was XX.X% XXXX the the have for versus prior harvest reported box production XXXX, year. overall in the Alico decrease for season

in better orange overall the than crop USDA, the forecasted the Although for period prior XX.X% to as the decrease this year. box by production is Florida in the same compared

on our Because This production lower business. flow requirements, meet million XX, level is balance all groves. Alico received insurance impact XXXX, our to insurance strength approximately received of production June had temporary crop was another, but proceeds have $X.X Alico operating maintains our of of to crop loss weather weather-related always million insufficient was sheet this Through proceeds insurance July. we the $XX.X risk, cash in to in crop a and

trees an claims with a there approximately $XXX,XXX but our per filed damage number for that appear and coverage were winds have groves significant Ian. did Gorda receive direct the through damage, after minimal hit Punta We damage, insurer. suffered of sustained our property permanent claim a XXX-mile made and citrus We of insurance hours near a with lost. trees all Nearly Hurricane but the we to casualty with our for no storm of one it our filed for tree hour under

relief Hurricane has Finally, that We into federal passed The established mechanism funds Fed relief. eventually the for in the the funding hope earmarked which pending. law the of Irma is was disaster relief previously Act, disbursement Appropriations these for Consolidated funds. still follow funds XXXX, December

caused related cannot amount, the relief to relief however, of be programs eligible Company Ian available to Act; the they We us. our finalize if we support the determine may Mutual, federal Hurricane Citrus government continue industry trade work to group, for as Florida and agencies under the federal damage any,

in injections One of overall as government-approved a truck the began in greening with past OTC product following a citrus our citrus citrus Florida therapy. of Agriculture XXXX. greening October Florida this Services via trees therapy by its new an highlight has of We XXXX, the the and approval treating of been for as oxytetracycline January year, industry Consumer the use application Department

utilized This more application and has than XXXX, It trees. apple of is crops. June been have a in and citrus, once XX% treated XX, through our year other applied we

rate as treatment The extent some as to completion until of of improved measurable fiscal mitigate well fruit application greening, any of expect therapy impacts the will of benefits year this drop citrus the of be the not We the the OTC decrease quality. harvest. fruit of XXXX

hopeful is XXXX, season Alico OTC season. improve with next line expects industry will in be that citrus the in Currently, pricing past helps XXXX the Everyone the that harvest.

We through fruit Tropicana with have season under contract the harvest harvest XXXX one XXXX, the for the of majority XXXX, our extended pricing. have season with and improved our contracts of XXXX

are for we time, lower prices productions, chemicals. year some is and Alico our financial fertilizer the at Although fiscal for making not next observing required of market any this

both over Labor we years possible us past and as the and utilize critical for in few as has the expenses. increased our those fuel level resources daily efficiently of although base remain operating operations, inflation

which Hurricane of credit, of capacity capital line and from XXXX Our revolving our in remain relationships in we recovers of XXXX line provide as November of lenders Ian. million matures on have strong, and which with matures Alico ample liquidity November of working to undrawn credit our $XX.X our

certain in the of with additional proceeds all small our for use continue are to approximately XX, million. one to competitive. net company optimize of to potential acquired parcels third to acres the work we are citrus $X.X believe current with Also, and very our of are purchases contiguous X,XXX located real Florida professionals with that land citrus acres or June for XX,XXX have long-term land of State XXXX, grow approximately we land groves evaluate two is of we planning interested actively throughout ranch assets. prices, engaged are we fiscal year, the continuing Through ranch The value of and approximately sold parties in how

common attributable months common of as for million the $X.X three of approximately stockholders period XXXX, $XX.X to stockholders ended approximately Alico Alico the year. net the prior income company in For June to million net same reported XX, attributable to the compared income

when an impacted And drop. in gross impact result received results Third primarily approximately of months were insurance as XX.X by as the receiving ended and offset fruit during quarter profits a three Valencia a proceeds XXXX. result the XXXX million increase decrease of Ian causing proceeds insurance the June crop XX, property Hurricane for of crops excluding in partially

detailed to turn more discuss that, the With financial I'll results. to call over Perry our

Perry Del Vecchio

harvested second recognized morning, our Due the the is nature of full-year to our the and quarter quarters and citrus everyone. for John, the quarters. in indicative Majority in you, of third of results not crop profit seasonal year, the business, results. our Thank are of quarterly good second third third with also fiscal majority the of and is cash flow and our our

compared ended was quarter for June Total $X.X June $XX.X for million XXXX, XX, approximately to operating the million revenue quarter XXXX. approximately the ended XX,

was revenue XXXX XXXX million $X.X and citrus XX, the ended quarters June for Our $XX.X respectively. and approximately million

in Valencia increase harvested, in was revenue the three primarily ended in the and impacts primarily fruit to driven box the as fruit a solids decrease of Valencia to the June result in processed ended the XXXX greater decrease from XXXX and, was lesser decrease fruit The services. management the drop decrease Hurricane production Ian. box a grove by compared in per pound The XX, a months due June a months revenue decrease from to of generated extent, a harvested XX, three for in

XXXX XXXX, approximately boxes for XXXX With XXXX, the orange The a million the XX, for decline. season expects decrease crop XXXX USDA it crop to of forecasted crop overall XXXX for year, the XX.X%. Early respect from XXXX, in a and its XX.X% crop the year the July decrease USDA Mid-season approximately approximately harvest $XX.X forecast million indicated will to Citrus Florida the crop, XX.X boxes

and for XX%. season Early down Mid-season Our crop the was

decrease Valencia XX%. production the box the was Valencia USDA forecasting our XX% Regarding and the of down crop, is

to crops, long-term impact trees. measurable damage fiscal to While there XXXX was not be an year does to there our our appear

being pound decrease to the The previous internal in solids our was was of in mainly strong it fruit due year. as per the not box quality as

the impact production. box accelerated to a drop Valencia Mid-Season as of and minimize fruit maximize crop harvesting of the both Hurricane the Ian we our addition, to In Early, with result the of intent the

we result, realized solids a a lower per As box. pound

per Partially pound offsetting solids. solids in processed pound price an the per per which June ended year was due XX, improvement decrease period price was box citrus the to box the months of production solids reduced for XXXX, the inventory increase production compared the has in X.X% three lower levels. The in the pound in led to same to prior overall the fruit, as in

decrease million negative the XX, XXXX. for approximately as ended operating ended XXXX, period the in were the in relates XX, proceeds received same $X.X to compared expenses Total operating primarily year. during quarter months expenses in three June $XX.X the the The insurance June million to prior

as impact adjustments year in which a of result effectively harvest and expense in ending Hurricane lower production. expensed a Inventory XXXX the be the inventory fiscal of to recorded in of the balance a year result Ian, haul as lowered XXXX's and inventory box reduction fiscal

box box Valencia fertilizer the The increases, fuel groves. as for production the and the harvest labor timing XXXX, its Mid-Season three year. a company higher harvest with and its in herbicide both to per cost the and of prior experienced months ended maintaining increases lower coupled same of compared XX, sales cost the cost the These and significant in Early period for and in June resulted

hauling The company and expenses. realized its an decrease harvest in overall

increased as increased harvesting XX, the in per time Ian. by to period However, as the in prior months spent compared year result to as labor by box the the XXXX drop as to ended Hurricane same increase cost harvesters fill an due increased the for the boxes of fruit harvesting three cost the well a caused the June

Ian June the approximately XX, $XX.X the in received company three Hurricane months XXXX, crop During ended property and insurance proceeds. million

also is by company XXXX. a of and the the the Grove costs decrease termination to cleanup of of June Grove owners Ian. in directly to related expense as Management additional Management The in The the Hurricane incurred repairs Services Grove result related Services

the to for the for mentioned Grove citrus services eliminated need caretaking by decision owners above, As management the the exist business Grove owners. the

the same decreased result, prior a in June As months caretaking period the compared ended year. when to during XX, significantly the XXXX, expenses three

increase for increased as prior XXXX for in $X.X to expenses administrative XX, period and same XXXX. the The to legal and ended year. salaries XX, to the wages compared professional fees and an the the months were and June months due three ended in million three approximately General $X.X compared primarily approximately increase was million June

to due Other income decrease the sale. and primarily was to respectively. approximately $X.X sale property the June for XX, real income gains of XXXX net estate, for and equipment timing The XXXX ended of on held million, and the three net other million months and $X.X is assets

the quarter ended recognized million the approximately company ended XXX the the from of a $X.X June approximately for During three and approximately sale. of to sale the XX, $X.X Alico gain estate, recognized Ranch, property million. gains sold real assets held months By XXXX, XXXX, the and comparison for of relating XX, June company acres equipment

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

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

the prior EBITDA year. continues XXXX June XX, third a was to for a $X.X adjusted balance strong million same to fiscal quarter approximately million Alico as of in for the the loss sheet. Our $X.X maintain period compared ended

XX, was X.X:X capital approximately representing June a Our on ratio. working XXXX, $XX.X million

maintain XXXX, respectively. X, We X continue June at a September the XX, were to to debt-to-equity XXXX, and to and to XX, X, X.X ratios X.XX XX, September solid ratio XXXX, X.XX

now call back the will John. I to pass

John Kiernan

focused our is our respective Perry. on harvest. of with Florida groves rest the for next Thanks, caretaking the industry Alico, the along for citrus

OTC the optimistic we to practices since are utilizing are grove therapy that mature, consistent a injections with and of increase trees substantial have some our of the of truck guardedly citrus the next anticipated every of XX% support planted benefits our We perform harvested fruit day, caretaking over from combined new season. we our new millions in which the now expectations trees XXXX, green

of of sales balance with parcels Alico continues, strong. Ranch the and sheet Progress our remains

soon. limited quickly are that our damage tree providers be and that paid crop, We grateful claims to our our property paid casualty insurance and expect claims

patiently are mechanism from relief for regarding funds. decisions awaiting We Hurricane Congress Ian the funding

use real for the this later Our to is optimize value work year. calendar to our long-term potential conclude assets expected with land planning professionals

have conventional with Alico enhanced And now, with and that for as to benefits agricultural year a reiterated investors the land investment the active more comes through we wants provide than optionality management. stability of

to And with the line that, questions Mark? we will from industry up now open analysts.

Operator

we Instructions] ROTH line Thank And Gerry you. ahead. Sweeney the have on a [Operator of go Capital. Please from question

open. is line Your

Gerard Sweeney

morning, Good for taking Hey. my John Perry. call. and Thanks

John Kiernan

Gerry. Good morning,

Perry Del Vecchio

Good morning.

Gerard Sweeney

of I'm couple questions. to know little the harvest. A XXXX, with going bit early. a start I it's XXXX

I it harvest think the you is or at the quality shape about alluded the the of prepared tree. to in least taking how remarks

this get is how better see shaping the today, circle that trees and So one, is on two, your will a as and you for to I just just as harvest; back view initial wanted and to of take up? what when

John Kiernan

to us Sure. to the until any start early December. It for not make from any actually We inspection it early early on appears to of further as there really is us drive sort too around, but any storm September. late want now, harvesting right But from forecast. forecast of be Hurricane Ian good, too tree make permanent And XXXX. is looks again, to damage it is you the last November, for XXXX, the

a don't season for for can't actually but you have potentially quantify next reason what we looks So we like. concern,

Gerard Sweeney

harvest? able sometime or early a until it. to that have in you pre-harvest we Got Will just like wait be the should fall forecast

John Kiernan

as makes we It's quantify. on to to closer sense later wait recent and Yes. years, before really it try get harvest probably to should we estimate based

Gerard Sweeney

big size? How but I the probably documents know can it. Punta or is the Gorda it in up curious I Got the look of just

John Kiernan

X,XXX. I think, around Total acres, is

Gerard Sweeney

you've terms testing but checks it. bit the gears treated, as news little switching less you of to been bigger And when indicated know know a et any enhancement that out this XX% average upon your is will done Got think, tree thoughts – have been cost, I And Okay. I just again, there. is cetera. yield touching I of OTC, has obviously, one, the in than to some any yield [indiscernible] probably then have our and on: curious Then two, of been of per $X. it's that early, some probably

is treatment of may I could, $X year, per Now is so dose be unpack sure I'm a if a not if or couple that questions or little $X that per just that is a you per there know there bit?

John Kiernan

are statistics and it to our very That's is from are And have it. evidence share. from the we've Thank transparently that my There of research measurable from in seen everything basically and benefits as damage through the hurricane and answer can the we we what peers of competitors some some and of OTC. us there press, per you. of some can did the of is benefits do a make doesn't anecdotal and facilities clear that you a we some very, testing good available that prevented question, and best publicly Alico other year. as this some kind try some [indiscernible] friends We And Florida data tried. of year trials there last had the from trunk actually do some I'll doing injection and it and State to it once proprietary is measure what unfortunately, meaningful the information tree. of it but application

our groves all So of asked We of we start that how about goes. XX% you this of trees the question in different all had kind a own.

per $X.XX the $X I and tree were the throughout And a think originally, goes, as between estimates cost spread as somewhere tree. it's the So state. far

from gotten scale application we is don't but think, has with. per to of have economies less any figure you, but $X, give that sheer I just statistics below can per probably specific a bad not we tree start $X than

Gerard Sweeney

roughly you It a was walk of XXXX Got I they to extended little guess, that if it’s the that been laddering just size your mentioned comments. the info apologize question. of finger the at the it. tips? of you has one Could different? a follow-up a you your at season. that us Tropicana contract, XXXX, on them, maybe Final expire So the when contracts through contract have maybe

John Kiernan

the been have dominating I all Sure. Q&A.

Vecchio Perry So answer that. I'll let Del

Perry Del Vecchio

Thanks, Gerry.

this of As it for one relates end the Tropicana, year, to contracts harvest. the is smaller larger the up year’s come contract of contracts, contracts with next the expiration next do at

Gerard Sweeney

XXXX, fiscal of end the At just…

Perry Del Vecchio

Yes.

Gerard Sweeney

I way the at would a you Okay. have harvest good of historically, time that looking the is of them Got it? renewed it. of before then end say, the amount And

John Kiernan

year will negotiating so season. of been are them next in be now, anticipate do at comes typically within the on contracts next And it I out. we doing those And mean, when the right durations, that season, a contracts. end renew we've I to shorter we'll the of Yes. expiration middle shorter-term expiring of

Gerard Sweeney

it. Got

Okay. Thank That’s really appreciate it for you. me. it. I

John Kiernan

Gerry. Thank you, again.

Perry Del Vecchio

you. Thank

John Kiernan

have do other Mark, we queries? any

Operator

There Mr. I'd to the remarks. call the Kiernan like back the hand over to questions for session. are no on closing

John Kiernan

want thank results I your joining and and to Alico. look say We just quarter our full-year our for call of to with our on fourth call everyone December. you you today in forward to support for speaking

Alico (ALCO) 3 Aug 232023 Q3 Earnings call transcript