ALCO - Earnings call transcript Q2 2024

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Operator

Welcome to Alico's Second Quarter 2024 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 second quarter ended March 31, 2024.

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

would contain remind forward-looking we prepared that begin, may remarks statements. we like everyone to the Before Such statements materially are factors or that subject in to risks, cause implied results uncertainties actual to statements. differ these from expressed may those and other those cause reports any the Important quarterly reports such differences the Form on in XX-K, amendments current XX-Q, with annual mentioned Form contribute include factors or and release. to and details thereto earnings risk filed SEC that in Form X-K could on company's the reports on

The company revise by on expect undertakes no subsequently update required obligation today's the or to the as made forward-looking law. statements call

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

press yesterday. release For issued please more details on company's measures, these the refer to

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

John Kiernan

harvest for but accelerated, levels mid-season, the in thank Quarter else write-down along $XX.X Fruit Jenny, involved and sold, being past XXXX Thank with XXXX. and production season. citrus at beginning the to total rate improved, production of Call led a lower quality in frustrated of and you, with this this Earnings million Second fruit realized inventory year and of of the for drop you, early season Harvest us fiscal I, solids pound then this the industry of Valencia morning. for resulted crop levels both everyone, lower poor which for the has disappointed was Alico's everyone Florida nearly joining

Ian. as second the trees year, January injection revenue out was control the began affected product citrus its for Valencia and XXXX treating the greening citrus costs Alico but via of the box aggressively with trunk in Oxytetracycline a continued over therapy. year in an of row. a our and was past believe We early our that impacts Hurricane of managed the by lower base We mid-season production

citrus we our to drop trees with which OTC, XXXX, the greening was also some quality. improve and over rate fruit In treated decrease XX% of of and mitigate expected impacts fruit the of of

harvested season measured against in show therapy yield. trees an when Although that initial control measurable was this not application OTC received small Alico grove, improvement did the crop each in groups impressive,

However, were fruit improvements quality in drop noticeably not this reduced observed season.

encouraged in incentives double increase financial the offset optimistic will The will to of and remain do production before treatments Alico season, trees number have OTC our next XXXX that in place treat harvest it we year. next to

are supply contracts and soon shortly, reflect at significant Alico some expiring solid will that new market current is better should a fruit per with our Although higher of finalized confident Tropicana be contract to prices pound pricing. multiyear

lenders combination revolving our undrawn of Hurricane continue in of from capital strong, our which a as provide credit, line which remain liquidity matures of November million with credit, relationships under of we in approximately Ian. to Our $XX XXXX, both trees of a ample November and of recover capacity to have XXXX line working matures a

operations is stable. continues Alico base Alico years leader to access a experience our and of Outside employee of and management. agriculture as continue years groves to contractors invest citrus highest will steady our Florida and the our over have We our of has for nearly as best workers operations, land our To Alico of to XXX in conduct come. long-term and at be resources evaluates use to citrus estate it clear, all real assets. regular

creative properties solutions our continue and to value. explore evaluating all to of extract enhance will We

the a Last from with took operation transition our We XXXX, third-party agricultural activities. Hurricane hit in after to to mix of we mining, vegetable a seek active it a made fruit leasing from optionality comes Charlotte investors provide conventional difficult and to County Grove crop management. stability citrus land direct evaluating with decision proprietary with the a our benefits year, and the investment Ian in of that TRB

move and has year, a evaluated third-party use. there for beyond in which XXXX, grove operations XXX citrus sale expected and on This the of at land decided the E.R. mining January also of will that approximately expires in struggling Jahna agreement back highest minimis to lease a exercised be citrus we best de lease the County, option have land conduct Alico a Jahna acre is been December approval plans once And to to will with our most end we approximately realize $XX,XXX acres, its XxX another of In grove purchase entered this option including Florida, these It acres understood acres price that for payments. to of Industries located of It by of obtained. on per regulatory XXXX. sand net XXXX. have into is the Hendry right XXX agreement

to purchase for date to season. the price citrus XXX those another we and agreement will XXX acres at an the option acres sell same next for XxX Alico closing per on third acre, In includes XXX to the or million that an at per another the approximately grow sale the into acres $X,XXX continue land April from within acre, entered to $X grove of party XXXX, a of but XX months approximately harvest

July underperforming which redeploy returns to better illustrates to shareholders. of transaction, to capital the on XXXX, case-by-case by groves end close citrus is basis for our new of generate This strategy a our expected monetizing

that, over to Brad results. With financial will more our to call the detailed I discuss turn

Bradley Heine

Thank you, John, and everyone. good morning,

with quarterly year months of March in in harvested agreement grove more quarters solids as third an result X our new the ended a contracts majority agreement, March to which for solids early of the as by compared March third offset owned months and price pound but year, both increase flows started the the the citrus the X and harvest X Ian fiscal and Harvest, approximately year due as the services results of and parties Valencia quarters, time pricing revenue of a mature of in the the for services cash our not in As decrease services and into compared X increase caretaking partially period. of management profit months third the ended we the XXXX, X and the prior XXXX, October than X,XXX XX, on in citrus in second the results. offset XX, acceleration XXXX, an and XXXX, of group fruit quarter was such and our also recognized favorable in management ended for provide crops March our acres management by second business decrease year parties. The is XX, result crop growth to the indicative as with a in XX, year for of citrus ended full allow X.X% XX, pound for of a X to to months unaffiliated an the is the of ended later grove as partially the to fruit The revenue entered mid-season XX.X% to due XXXX, a timing increase of Tropicana, as owners Valencia seasonal in second are the primarily result majority March prior combination prior grove revenue revenue the as primarily try result an of Hurricane to the mitigate for an the was grove the per in drop, more months by to of increase XX, to compared to in a our the XXXX,

and prior combination Ian, XXXX expenses, the XXXX, the impact Hurricane effectively of claims which expenses in by result XX, inventory and of crop insurance a primarily adjustments X from September insurance X on X March operating crop XX, the received for year proceeds increase XXXX, be received recorded was period, the the compared inventory and as XX, as XX.X% ended of reduction of months The XX, XXXX, XX.X% the X to and expensed for of to which in $X.X million driven recorded ending and year respectively. in ended months during a inventory claims operating March fiscal at the insurance a $X.X X ended as the balance was months the lowered million March XXXX, proceeds of

X General X the months million due million a the the X recognized several sale XXX the the to the the compared expenses for of of the income March from XX, $X.X the months of March XXXX, acres range ended expense property increased X the to $XX.X XX, XX, of ended compared March XX, March XX, XXXX. parties. the Ranch increased and March to $X.X the of during XX,XXX approximately third XXXX, primarily $XX.X comparison, due to sale XXXX, gains in million administrative to XXXX, X to the and X net primarily months By months relating costs. for XX, ended acres Other gain aggregate million state XXXX, ended March of Alico months on ended equipment to months for ended employee on sale of increased we Alico Florida

ended net net loss second fiscal attributable shareholders XX, to to quarter we million second the a reported common for a Alico of million fiscal of XXXX, $X.X crop loss insurance ended $XX.X For ended March driven compared the $X.X during claims revenue for timing XX, in X of months current received and March XX, by XXXX. quarter, XXXX, the quarter the March of the proceeds million

stockholders at the of net expensed the inventory Alico compared September fiscal a be year the of Alico loss ranch effectively to as increase the the for XXXX, Ian, provision common recognized of $X.X March of of XX, For XX, partially X and acres impact Alico proceeds XXXX, XXXX, X which XX, million from ended Hurricane insurance XX,XXX balance prior we gain the $XX.X driven the the offset in the of attributed million the $XX.X December $XX.X remaining ending attributable by tax million ended result on crop by common lowered the of to XXXX, to the million inventory of months in claims recorded XX, income $XX.X adjustments on a stockholders in the months a year. inventory sale March million XXXX, to on reported

I pass to back will call now John. the

John Kiernan

Brad. Thank you,

XXX will we've leader from Alico hurricane. trees. continuing which sheet we make as result its a be groves, the years and agriculture industry harvest the XXXX, remain term. is committed removed will Florida is over as a over believe in new corner Alico we Since to turn management. planted strong for investments season the experience Hurricane million X.X land citrus the of help a us Ian, We another Florida has balance to recovery long has and next was year the disappointing, from which the we of believe Although in season continuing

the of apply and to OTC treatments in taking significant fiscal we are the and year increase practices therapy plan all that to producing We XXXX, plantings care fruit with recent next support should season. in harvest substantially tree believe maturing trees these a our combined consistent that

continuing create long-term In highest is properties addition, to determine value to for all and to Alico of their use shareholders. evaluate best our our

investors strive and of agricultural We comes the optionality enhanced conventional land the that stability benefits our to provide through with active with investment management.

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

Operator

Instructions] [Operator

Your question Capital. line from of Gerry the comes ROTH from Sweeney

Gerard Sweeney

have apologize, another the sort going call I in multitasking, I background. on of

little understanding remarks, question OTC was a the fruit. touched just impact year And but improvement that quality covered help year help if of side. generally understanding you X, Did X. apologize. fruit, the on the already in is year I But ask the my it to maybe the of John, can a bit not high-level So speaking, just in on sort get X trees. did the of want briefly better I continue I it

So little great. commentary could would maybe bit that you a give on that, more if be

John Kiernan

each Gerry. of we in is did harvested year material beginning XXXX. improvement of you, with that This applied our production. against a our groups strategy for we control We forward -- OTC, part was Obviously, That's OTC going substantial in great our Thank had the in which and first fruit see Thanks. in citrus important groves operations. question. January treated an been

fruit, got more we great. So which was

It from a met expectations. just certainly low It base. our was coming

that. by improvements it So see were did first quality. this look year not spectacular year, not encouraged did this but we in We

it So recognize that to did lot multiyear sequential because more we program. but this we a when juice we therapy that, be can get of started going probably actually was a improvement

and are injections, our we trunk the doing basically producing of started already we've for think So said all OTC I underway next this treatment. trees the harvest again, with nearly season

benefits additional the should get So we're from second even that. more year optimistic and we results that

Gerard Sweeney

working you're on you're a an believe update front renewal you that with to. available on And Could it. of your program for X if Got I your provide citrus off-takers.

John Kiernan

Yes.

all processors fruit of that most -- to sold contracts. years, So We're harvest current are multiyear in now of of than market Tropicana negotiations, of the nearly process agreement state, a the going to or at over under in significant the couple the get got hopefully concluded. today. is season recent the approached all and we season expiring renewing we contracts has pricing have that a better multiyear the we've We've our are that

going we several contracts. that in we average Obviously, have that contracts still years the over to next be lift place would should we us sell So think will against prices next year for think on that new higher price those well. are the the we as that

formal report very time and We at to those close should don't we anything that optimistic cautiously are have finalized soon. this just yet. that's we So

Gerard Sweeney

And targeting $XX you've debt to million final by then net the question I been $XX debt you. Got on million of think side, year-end.

sitting you're up. term? sales some change real perspective Does in coming you sort on offsetting on that? that can estate do that, the But your you comment And right in range think obviously, are at that around now. near least balance I have sheet, of that the

Bradley Heine

first, Brad. from that transactions. liquidity I'd not so this concerns at coming Gerry, any these do front, is all of Thanks, to any that on see want there we stress

everything exactly us result of still. our million that need land we forecast we and is just As as position guidance it have we not us -- noted, available of in provide how pending will in the difficult That to debt be, we about for and be same to can't to updated being over range. expect would said, Unfortunately, $XX impairments, lines a shakes net what sales. we the it an to out as see credits

Gerard Sweeney

I Thanks it. guys. was and if little appreciate disorganized it, a but appreciate apologize I I I here,

Operator

you. Thank

call today's for the We question-and-answer over back have Mr. reached end the I to like would Kiernan session. remarks. of to turn closing

John Kiernan

We Jenny, and continued August. in call joining you, about your results third for for thank forward speaking quarter our to look you, Alico. and of everyone, Thank also you today with our support

Operator

concludes you. conference. today's Thank This

at a participation, time. great You have for Thank disconnect may lines your you and day. your this

Alico (ALCO) 7 May 242024 Q2 Earnings call transcript