# Alico, Inc.: Form 10-Q for the period ended Jun 30, 2024

- Company: [Alico, Inc.](/companies/alco.md) (CIK 3545)
- Form: 10-Q
- Filed: 2024-08-05
- Accepted by EDGAR: Aug 5, 2024, 20:04 ET
- Period: 2024-06-30
- Accession: 0000003545-24-000099
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/3545/000000354524000099/alco-20240630.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/3545/000000354524000099/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2024-06-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2024-04-01 to 2024-06-30 | $13.6m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 9 months, 2023-10-01 to 2024-06-30 | $45.7m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Gross profit | 3 months, 2024-04-01 to 2024-06-30 | −$4.3m | us-gaap:GrossProfit |
| Gross profit | 9 months, 2023-10-01 to 2024-06-30 | −$36.7m | us-gaap:GrossProfit |
| Operating income | 3 months, 2024-04-01 to 2024-06-30 | −$6.7m | us-gaap:OperatingIncomeLoss |
| Operating income | 9 months, 2023-10-01 to 2024-06-30 | −$44.7m | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2024-04-01 to 2024-06-30 | −$861.0k | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 9 months, 2023-10-01 to 2024-06-30 | $9.7m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2024-04-01 to 2024-06-30 | −$2.0m | us-gaap:NetIncomeLoss |
| Net income | 9 months, 2023-10-01 to 2024-06-30 | $25.1m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2024-04-01 to 2024-06-30 | −$0.27 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 9 months, 2023-10-01 to 2024-06-30 | $3.29 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2024-04-01 to 2024-06-30 | −$0.27 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 9 months, 2023-10-01 to 2024-06-30 | $3.29 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2024-04-01 to 2024-06-30 | 7,624,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 9 months, 2023-10-01 to 2024-06-30 | 7,620,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 9 months, 2023-10-01 to 2024-06-30 | −$18.7m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 9 months, 2023-10-01 to 2024-06-30 | $15.9m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Dividends paid | 9 months, 2023-10-01 to 2024-06-30 | $1.1m | us-gaap:PaymentsOfDividendsCommonStock |
| Cash and equivalents | at 2024-06-30 | $9.1m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2024-06-30 | $54.4m | us-gaap:AssetsCurrent |
| Total assets | at 2024-06-30 | $414.6m | us-gaap:Assets |
| Current liabilities | at 2024-06-30 | $20.4m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2024-06-30 | $140.3m | us-gaap:Liabilities |
| Long-term debt | at 2024-06-30 | $82.6m | us-gaap:LongTermDebtNoncurrent |
| Current portion of debt | at 2024-06-30 | $1.4m | us-gaap:LongTermDebtCurrent |
| Shareholders' equity | at 2024-06-30 | $269.5m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 32,438 characters.

*The following discussion and analysis should be read in conjunction with the accompanying Condensed Consolidated Financial Statements and related Notes thereto and other information included elsewhere in this Quarterly Report, our 2023 Annual Report on Form 10-K, and in our other filings with the SEC. Our actual results of operations may differ materially from those discussed in forward-looking statements as a result of various factors, including, but not limited to, those included our 2023 Annual Report on Form 10-K and other portions of this Quarterly Report. Additionally, our historical results are not necessarily indicative of the results that may be expected for any period in the future. In the following discussion and analysis, dollars are in thousands, except per share and per acre amounts.*

### Business Overview

### Business Description

Alico, Inc., together with its subsidiaries (collectively, “Alico”, the “Company”, “we”, “us” or “our”) generates operating revenues primarily from the sale of our citrus products, providing management services to citrus groves owned by third parties, and grazing and hunting leasing. We operate as two business segments, and all of our operating revenues are generated in the United States. For the three months ended June 30, 2024 and June 30, 2023, we generated operating revenue of $13,610 and $7,284, respectively, (loss) income from operations of $(6,728) and $12,572, respectively, and net (loss) income attributable to common stockholders of $(2,044) and $11,832, respectively. Net cash used in operating activities was $18,720 and $618 for the nine months ended June 30, 2024 and June 30, 2023, respectively.

### Business Segments

Operating segments are defined in the criteria established under FASB ASC Topic 280 as components of public entities that engage in business activities from which they may earn revenues and incur expenses for which separate financial information is available and which is evaluated regularly by our CODM in deciding how to assess performance and allocate resources. Our CODM assesses performance and allocates resources based on its operating segments.

Our two segments are as follows:

- Alico Citrus includes activities related to planting, owning, cultivating and/or managing citrus groves to produce fruit for sale to fresh and processed citrus markets, including activities related to the purchase and resale of fruit and value-added services, which include contracting for the harvesting, marketing and hauling of citrus; and
- Land Management and Other Operations includes activities related to grazing and hunting leasing, management and/or conservation of unimproved native pastureland and activities related to rock mining royalties and other insignificant lines of business. Also included are activities related to owning and/or leasing improved farmland. Improved farmland is acreage that has been converted, or is permitted to be converted, from native pasture and which may have various improvements including irrigation, drainage and roads.

For the three months ended June 30, 2024 and 2023, the Alico Citrus segment generated 97.3% and 92.1%, respectively, of our consolidated revenues and the Land Management and Other Operations segment generated 2.7% and 7.9%, respectively, of our consolidated revenues.

For the nine months ended June 30, 2024 and 2023, the Alico Citrus segment generated 97.6% and 96.8%, respectively, of our consolidated revenues and the Land Management and Other Operations segment generated 2.4% and 3.2%, respectively, of our consolidated revenues.

### Recent Developments

#### Tropicana Orange Purchase Agreement

On June 5, 2024, we entered a new three-year Orange Purchase Agreement (the “Tropicana Agreement”) to sell oranges to Tropicana at prices that are approximately 33% to 50% higher, over the life of the contract, than the average price for all the citrus fruit sold to Tropicana last season. The Tropicana Agreement is effective June 5, 2024 through July 31, 2027, subject to its terms and conditions, and succeeds existing agreements with Tropicana that expired at the end of July 2024.

#### Citrus Research and Field Trial Foundation

In June 2024, we received $1,106 from CRAFT of grower’s support payments in connection with our use of OTC, to combat the effect of “greening” in our citrus trees.

#### Land Sale

On June 28, 2024, we sold 798 acres of citrus land for approximately $7,183 ($9,000 per acre).

### Condensed Consolidated Results of Operations

The following discussion provides an analysis of our results of operations for the three and nine months ended June 30, 2024, as compared to 2023:

*(in thousands)*

| Operating revenues: | Three Months Ended June 30, 2024 | 2023 | Change $% |  | Nine Months Ended June 30, 2024 | 2023 | Change $% |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Alico Citrus | $13,237 | $6,712 | $6,525 | 97.2% | $44,591 | $37,917 | $6,674 | 17.6% |
| Land Management and Other Operations | 373 | 572 | (199) | (34.8)% | 1,117 | 1,249 | (132) | (10.6)% |
| Total operating revenues | 13,610 | 7,284 | 6,326 | 86.8% | 45,708 | 39,166 | 6,542 | 16.7% |
| **Gross (loss) profit:** |  |  |  |  |  |  |  |  |
| Alico Citrus | (4,576) | 15,034 | (19,610) | (130.4)% | (37,471) | 4,424 | (41,895) | (947.0)% |
| Land Management and Other Operations | 289 | 468 | (179) | (38.2)% | 771 | 949 | (178) | (18.8)% |
| Total gross (loss) profit | (4,287) | 15,502 | (19,789) | (127.7)% | (36,700) | 5,373 | (42,073) | (783.0)% |
| General and administrative expenses | 2,441 | 2,930 | (489) | (16.7)% | 8,034 | 8,106 | (72) | (0.9%) |
| (Loss) income from operations | (6,728) | 12,572 | (19,300) | (153.5)% | (44,734) | (2,733) | (42,001) | NM |
| Total other expense, net | 3,958 | 1,423 | 2,535 | 178.1% | 78,969 | 3,794 | 75,175 | NM |
| (Loss) income before income taxes | (2,770) | 13,995 | (16,765) | (119.8)% | 34,235 | 1,061 | 33,174 | NM |
| Income tax (benefit) provision | (861) | 1,923 | (2,784) | (144.8%) | 9,721 | 306 | 9,415 | NM |
| Net (loss) income | (1,909) | 12,072 | (13,981) | (115.8)% | 24,514 | 755 | 23,759 | NM |
| Net (loss) income attributable to noncontrolling interests | (135) | (240) | 105 | (43.8)% | 583 | 140 | 443 | 316.4% |
| Net (loss) income attributable to Alico, Inc. common stockholders | $(2,044) | $11,832 | $(13,876) | (117.3)% | $25,097 | $895 | $24,202 | NM |

#### NM = Not meaningful

### Operating Revenue

The 86.8% increase in revenue for the three months ended June 30, 2024, as compared to the three months ended June 30, 2023, was primarily due to the timing of the Valencia harvest, which is discussed in further detail below.

The 16.7% increase in revenue for the nine months ended June 30, 2024, as compared to the nine months ended June 30, 2023, was primarily due to an increase in pound solids produced as we began to recover to pre-hurricane levels and an increase in the price per pound solids for both the Early and Mid-season and Valencia crops, as a result of more favorable pricing in one of our contracts with Tropicana, which is discussed in further detail below. In addition, there was an increase in Grove Management Services revenue as a result of the Citrus Grove Management Agreement we entered into on October 30, 2023 (the “Grove Owners Agreement”) with an unaffiliated group of third parties (the “Grove Owners”) to provide citrus grove caretaking services for approximately 3,300 acres owned by such third parties for the nine months ended June 30, 2024, as compared to the nine months ended June 30, 2023.

### Operating Expenses

The increase in operating expenses for the three and nine months ended June 30, 2024, as compared to the three and nine months ended June 30, 2023, was primarily driven by insurance proceeds of $16,643 and $21,403 for crop claims received during the three and nine months ended June 30, 2023 (the “Crop Insurance Proceeds”), which were recorded as a reduction of operating expenses. In addition, the increase in operating expenses for the three and nine months ended June 30, 2024 was impacted by a combination of the inventory adjustments recorded at September 30, 2022 on the ending inventory balance, as a result of the impact of Hurricane Ian, which effectively lowered the inventory to be expensed in fiscal year 2023, as well as a 103.1% and 15.1% increase in the number of boxes which needed to be harvested in the three and nine months ended June 30, 2024, respectively. See Note 3. Inventories to the Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report.

### General and Administrative Expense

General and administrative expense decreased $489 for the three months ended June 30, 2024, compared to the three months ended June 30, 2023. The decrease was primarily due to lower employee costs (as a result of lower bonus accruals), lower depreciation, lower legal costs (as a result of the voluntary dismissal of the shareholder lawsuit in the prior year), and lower accounting and insurance costs.

General and administrative expense decreased $72 for the nine months ended June 30, 2024, compared to the nine months ended June 30, 2023, primarily due to lower depreciation, legal and insurance costs, partially offset by increased employee costs.

### Other Expense, net

Other Expense, net for the three months ended June 30, 2024 increased $2,535, compared to the three months ended June 30, 2023, driven by gains of $4,396 on the sale of 798 acres of citrus land during the quarter ended June 30, 2024 compared to gains of $2,613 on the sale of 548 acres of the Alico Ranch during the quarter ended June 30, 2023.

Other Expense, net for the nine months ended June 30, 2024 increased $75,175, compared to the nine months ended June 30, 2023, primarily due to the sale of 17,229 acres of the Alico Ranch to the State of Florida and the sale of 798 acres of citrus land during the nine months ended June 30, 2024. By comparison, for the nine months ended June 30, 2023 we recognized gains on sale of property and equipment of approximately $7,368 relating to the sale of 1,436 acres, in the aggregate, from the Alico Ranch to several third parties.

### Income Taxes

The decrease in the income tax (benefit) provision of $(2,784) for the three months ended June 30, 2024, as compared to the three months ended June 30, 2023, was driven by a pre-tax loss for the current period, as opposed to pre-tax income in the three months ended June 30, 2023.

The increase in the income tax (benefit) provision of $9,415 for the nine months ended June 30, 2024, as compared to the nine months ended June 30, 2023, was principally due to the gain on the sale of 17,229 acres of the Alico Ranch to the State of Florida in the current year, while the income tax provision for the nine months ended June 30, 2023 was due to the lower pre-tax income generated for the period.

The following discussion provides an analysis of our operating segments:

### Alico Citrus

*(in thousands, except per box and per pound solids data)*

| Operating Revenues: | Three Months Ended June 30, 2024 | 2023 | Change Unit% |  | Nine Months Ended June 30, 2024 | 2023 | Change Unit% |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Early and Mid-Season | $— | $— | $— | — | $14,534 | $11,954 | $2,580 | 21.6% |
| Valencias | 12,183 | 6,064 | 6,119 | 100.9% | 26,915 | 23,994 | 2,921 | 12.2% |
| Fresh Fruit and Other | 108 | 221 | (113) | (51.1)% | 801 | 991 | (190) | (19.2)% |
| Grove Management Services | 946 | 427 | 519 | 121.5% | 2,341 | 978 | 1,363 | 139.4% |
| Total | $13,237 | $6,712 | $6,525 | 97.2% | $44,591 | $37,917 | $6,674 | 17.6% |
| **Boxes Harvested:** |  |  |  |  |  |  |  |  |
| Early and Mid-Season | — | — | — | — | 1,194 | 979 | 215 | 22.0% |
| Valencias | 843 | 415 | 428 | 103.1% | 1,855 | 1,669 | 186 | 11.1% |
| Total Processed | 843 | 415 | 428 | 103.1% | 3,049 | 2,648 | 401 | 15.1% |
| Fresh Fruit | — | 1 | (1) | (100.0)% | 35 | 41 | (6) | (14.6)% |
| Total | 843 | 416 | 427 | 102.6% | 3,084 | 2,689 | 395 | 14.7% |
| **Pound Solids Produced:** |  |  |  |  |  |  |  |  |
| Early and Mid-Season | — | — | — | — | 5,364 | 4,586 | 778 | 17.0% |
| Valencias | 4,294 | 2,142 | 2,152 | 100.5% | 9,365 | 8,702 | 663 | 7.6% |
| Total | 4,294 | 2,142 | 2,152 | 100.5% | 14,729 | 13,288 | 1,441 | 10.8% |
| **Pound Solids per Box:** |  |  |  |  |  |  |  |  |
| Early and Mid-Season | — | — | — | — | 4.49 | 4.68 | (0.19) | (4.0)% |
| Valencias | 5.09 | 5.16 | (0.07) | (1.3)% | 5.05 | 5.21 | (0.16) | (3.1)% |
| **Price per Pound Solids:** |  |  |  |  |  |  |  |  |
| Early and Mid-Season | $— | $— | $— | — | $2.71 | $2.61 | $0.10 | 3.8% |
| Valencias | $2.84 | $2.83 | $0.01 | 0.3% | $2.87 | $2.76 | $0.11 | 4.1% |
| **Price per Box:** |  |  |  |  |  |  |  |  |
| Fresh Fruit | $— | NM | $— | — | $15.89 | $14.02 | $1.87 | 13.3% |
| **Operating Expenses:** |  |  |  |  |  |  |  |  |
| Cost of Sales | $14,038 | $6,603 | $7,435 | 112.6% | $68,857 | $45,647 | $23,210 | 50.8% |
| Harvesting and Hauling | 3,296 | 2,047 | 1,249 | 61.0% | 11,843 | 10,573 | 1,270 | 12.0% |
| Fresh Fruit and Other | (222) | (17,278) | 17,056 | (98.7)% | (229) | (23,340) | 23,111 | (99.0)% |
| Grove Management Services | 701 | 306 | 395 | 129.1% | 1,591 | 613 | 978 | 159.5% |
| Total | $17,813 | $(8,322) | $26,135 | (314.0)% | $82,062 | $33,493 | $48,569 | 145.0% |

23

### Components of Results of Operations for Alico Citrus Segment

We sell our Early and Mid-Season and Valencia oranges to orange juice processors. The processors generally buy the citrus crop on a pound solids basis, which is the measure of the soluble solids (sugars and acids) contained in one box of fruit. Our Fresh Fruit revenue is derived from sales to packing houses that purchase the citrus on a per box basis. We also provide citrus grove caretaking and harvest and haul management services to third parties from which revenues are recorded as Grove Management Services, including a management fee. Other revenues consist of the purchase and reselling of fruit.

Operating expenses for our Alico Citrus segment consist primarily of Cost of Sales, Harvesting and Hauling costs and Grove Management Service costs. Cost of Sales represents the cost of maintaining the citrus groves for the preceding calendar year and does not vary in relation to production. Harvesting and Hauling costs represent the costs of bringing citrus product to processors and vary based upon the number of boxes produced. Grove Management Services costs include those costs associated with citrus grove caretaking and harvest and haul management services provided to third parties. Other expenses include the period costs of third-party grove caretaking and the purchase and reselling of third-party fruit.

### Comparison of the Three and Nine Months Ended June 30, 2024 and 2023 for the Alico Citrus Segment

The 97.2% increase in revenue for the three months ended June 30, 2024, compared to the three months ended June 30, 2023, was primarily due to a 100.5% increase in pound solids, driven by a combination of factors related to the timing of the Valencia harvest, which started later this year to allow the fruit more time to mature, as compared to an acceleration of the harvest in the prior year as a result of Hurricane Ian, to try to mitigate the fruit drop.

The 17.6% increase in revenue for the nine months ended June 30, 2024, as compared to the nine months ended June 30, 2023, was primarily due to an 10.8% increase in pound solids produced as the trees continue to recover from the effects of Hurricane Ian, an increase in the price per pound solids for both the Early and Mid-season and Valencia crops as a result of more favorable pricing in one of our contracts with Tropicana, and an increase in Grove Management Services revenue as a result of the signing of the Grove Owners Agreement. Although Hurricane Ian initially impacted the fiscal year 2023 harvest, we expect it may take another season, or more, for the groves to recover to pre-hurricane production levels.

The Early and Mid-Season harvest was completed in the second quarters of 2024 and 2023. For the nine months ended June 30, 2024 the pound solids per box decreased 4.0%, and the processed box production increased 22.0%, compared to the same nine month period in the prior year. Although the overall decrease in pound solids per box for the season was disappointing, the increase in total boxes produced demonstrates that the groves are beginning to recover from the effects of Hurricane Ian. In addition, there was an increase in the price per pound solids of 3.8% in the Early and Mid-Season fruit harvested for the nine months ended June 30, 2024, compared to the same period in the prior year, as a result of more favorable pricing in one of our contracts with Tropicana.

The Valencia harvest was completed for the three and nine months ended June 30, 2024 and pound solids per box decreased 1.3% and 3.1%, respectively, and the processed box production increased 103.1% and 11.1%, respectively, compared to the same three and nine month periods in the prior year. In addition, there was an increase in the price per pound solids of 0.3% and 4.1% in the Valencia fruit harvested for the three and nine months ended June 30, 2024, respectively, compared to the same periods in the prior year, as a result of more favorable pricing in one of our contracts with Tropicana.

For the three and nine months ended June 30, 2024, we recognized a decrease in revenue from sales of Fresh Fruit and Other of $113 and $190, respectively, compared to the same periods in the prior year, driven by a decrease in the amount of fruit that was resold on behalf of grove owners.

Revenue for the three and nine months ended June 30, 2024 from the grove owners relating to Grove Management Services increased 121.5% and 139.4%, respectively, compared to the prior year, principally due to the signing of the Grove Owners Agreement in October 2023.

For the three and nine months ended June 30, 2024, we recognized an increase in Cost of Sales of $7,435 and $23,210, respectively, compared to the same periods in the prior year, which was driven by a combination of the inventory adjustments recorded at September 30, 2022 on the ending inventory balance as a result of the impact of Hurricane Ian, which effectively lowered the inventory to be expensed in fiscal year 2023, as well as a 103.1% and 15.1% increase in boxes harvested in the three and nine months ended June 30, 2024, respectively, compared to the same periods in the prior year.

For the three month period ended June 30, 2024, Harvest and Hauling expenses increased $1,249, compared to the prior year period, driven by the increase in the number of boxes produced for the period as a result of the timing of our harvest. For the nine months ended June 30, 2024, Harvesting and Hauling expenses were up $1,270, when compared to the same period in the prior year, driven by the increase in the number of boxes produced for the period as we continue to recover from the impact of Hurricane Ian.

For the three and nine month periods ended June 30, 2024, the credit amounts shown in “Fresh Fruit and Other” in operating expenses above primarily represent a final true-up of Crop Insurance Proceeds from Hurricane Ian, received in the current period. For the three and nine month periods ended June 30, 2023, the credit amounts primarily represent the Crop Insurance Proceeds of $16,643 and $21,403, respectively, which were recorded as a reduction of operating expenses, and includes $1,315 in federal relief proceeds received under the CRBG program in the nine months ended June 30, 2023.

There was a 129.1% and 159.5% increase in operating expenses relating to grove management services for the Grove Owners for the three and nine months ended June 30, 2024 and 2023, respectively, primarily due to the new Grove Owners Agreement.

### Land Management and Other Operations

The table below presents key operating measures for the three and nine months ended June 30, 2024 and 2023 for the Land Management and Other Operations segment:

*(in thousands)*

| Revenue From: | Three Months Ended June 30, 2024 | 2023 | Change $% |  | Nine Months Ended June 30, 2024 | 2023 | Change $% |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Land and Other Leasing | $302 | $474 | $(172) | (36.3)% | $894 | $1,028 | $(134) | (13.0)% |
| Other | 71 | 98 | (27) | (27.6)% | 223 | 221 | 2 | 0.9% |
| Total | $373 | $572 | $(199) | (34.8)% | $1,117 | $1,249 | $(132) | (10.6)% |
| **Operating Expenses:** |  |  |  |  |  |  |  |  |
| Land and Other Leasing | $84 | $104 | $(20) | (19.2)% | $341 | $295 | $46 | 15.6% |
| Other | — | — | — | — | 5 | 5 | — | — |
| Total | $84 | $104 | $(20) | (19.2)% | $346 | $300 | $46 | 15.3% |

### Components of Results of Operations for Land Management and Other Operations Segment

Land and Other Leasing includes lease income from leases for grazing rights, hunting leases, a farm lease, a lease to a third party of an aggregate mine, leases of oil extraction rights to third parties, and other miscellaneous income.

Land and Other Leasing operating expenses includes real estate, property taxes, general and administrative expenses including salaries, benefits and legal.

### Comparison of the Three and Nine Months Ended June 30, 2024 and 2023 for the Land Management and Other Operations Segment

Land Management and Other Operations revenue for the three and nine months ended June 30, 2024 decreased 34.8% and 10.6%, respectively, as compared to the same period in the prior year principally due to a decrease in hunting lease revenue as a result of the sale of the ranch land.

The decrease in operating expenses from Land Management and Other Operations for the three months ended June 30, 2024, as compared to the three months ended June 30, 2023, was primarily due to a decrease in property taxes related to land sales. The increase in operating expenses from Land Management and Other Operations for the nine months ended

June 30, 2024, as compared to the nine months ended June 30, 2023, was primarily due to an increase in mining permitting costs, offset by a decrease in property taxes related to land sales.

### Seasonality

We are primarily engaged in the production of fruit for sale to citrus markets, which is of a seasonal nature, and subject to the influence of natural phenomena and wide price fluctuations. Historically, the second and third quarters of our fiscal year produce most of our annual revenue. However, due to the timing of the current year harvest, more of the citrus crop was harvested in the first and second quarters of this fiscal year. Working capital requirements are typically greater in the first and fourth quarters of the fiscal year, coinciding with harvesting cycles. Because of the seasonality of the business, results for any quarter are not necessarily indicative of the results that may be achieved for the full fiscal year.

### Liquidity and Capital Resources

A comparative balance sheet summary is presented in the following table:

*(in thousands)*

|  | June 30, 2024 | September 30, 2023 | Change |
| --- | ---: | ---: | ---: |
| Cash and cash equivalents | $9,106 | $1,062 | $8,044 |
| Total current assets | $54,364 | $58,805 | $(4,441) |
| Total current liabilities | $20,358 | $15,065 | $5,293 |
| Working capital | $34,006 | $43,740 | $(9,734) |
| Total assets | $414,602 | $428,353 | $(13,751) |
| Principal amount of term loans and lines of credit | $84,510 | $129,319 | $(44,809) |
| Working capital ratio | 2.67 to 1 | 3.90 to 1 |  |
| Debt to total assets ratio | 0.20 to 1 | 0.30 to 1 |  |

### Sources and Uses of Liquidity and Capital

Our business has historically generated full fiscal year positive net cash flows from operating activities, although the net cash flow in the first quarter of each fiscal year has been negative because of seasonality and the associated need to expend cash in advance of generating revenues from the harvesting season. Sources of cash primarily include cash flows from operations, sales of under-performing land and other assets, amounts available under our credit facilities, and access to capital markets. Access to additional borrowings under revolving lines of credit is subject to the satisfaction of customary borrowing conditions. As a public company, we may have access to other sources of capital. However, access to, and availability of, financing on acceptable terms in the future will be affected by many factors, including (i) financial condition, prospects, and credit rating; (ii) liquidity of the overall capital markets; and (iii) the state of the economy. There can be no assurance that we will continue to have access to the capital markets on acceptable terms, or at all.

The principal uses of cash that affect our liquidity position include the following: operating expenses including employee costs, the cost of maintaining the citrus groves, harvesting and hauling of citrus products, capital expenditures, stock repurchases, dividends, debt service costs including interest and principal payments on term loans and other credit facilities and acquisitions. Although the current year tax provision is recorded within Income taxes payable on our balance sheet, as required by U.S. GAAP; we do not expect to pay any further income taxes for the fiscal year ended September 30, 2024. The income tax payable is expected to be reclassified to Deferred income tax liabilities, net, at year-end, as we anticipate utilizing a portion of our prior year net operating loss carryover.

Management believes that a combination of cash-on-hand, cash generated from operations, and asset sales and availability under our lines of credit will provide sufficient liquidity to service the principal and interest payments on our indebtedness and will satisfy working capital requirements and capital expenditures for at least the next twelve months and over the long term. However, this is subject, to a certain extent, on general economic, financial, competitive, regulatory and other factors that are beyond our control.

### Borrowing Facilities and Long-term Debt

We have a $70,000 working capital line of credit and a $25,000 revolving line of credit, of which $69,752 and $25,000 was available for general use as of June 30, 2024 (see Note 7. Long-Term Debt and Lines of Credit to the accompanying Condensed Consolidated Financial Statements). We may utilize the available cash to pay down indebtedness, pursue citrus grove acquisitions, conduct share repurchases, and possibly reinstate increased dividends. If we choose to pursue significant growth and other corporate opportunities, these actions could have a material adverse impact on our cash balances and may require us to finance such activities by drawing down on our lines of credit or by obtaining additional debt or equity financing. There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. Any inability to obtain additional financing could adversely impact our ability to pursue different growth and other corporate opportunities.

The level of debt could have important consequences on our business, including, but not limited to, increasing our vulnerability to general adverse economic and industry conditions, limiting the availability of cash flow to fund future investments, capital expenditures, working capital, business activities and other general corporate requirements, and limiting flexibility in planning for, or reacting to, changes in its business and industry.

Our credit facilities are subject to various debt covenants including the following financial covenants: (i) minimum debt service coverage ratio of 1.10 to 1.00; (ii) tangible net worth of at least $160,000 increased annually by 10% of consolidated net income for the preceding years, or $174,628 applicable for the year ended September 30, 2023; (iii) minimum current ratio of 1.50 to 1.00; (iv) debt to total assets ratio not greater than 0.625 to 1.00; and (v) solely in the case of the WCLC, a limit on capital expenditures of $30,000 per fiscal year. As of June 30, 2024, we were in compliance with all of the financial covenants.

### Cash Flows

Cash and cash equivalents increased from $1,592 as of June 30, 2023, to $9,106 as of June 30, 2024. The components of these changes are discussed below.

*(in thousands)*

|  | Nine Months Ended June 30, 2024 | 2023 | Change |
| --- | ---: | ---: | ---: |
| Net cash (used in) operating activities | $(18,720) | $(618) | $(18,102) |
| Net cash provided by (used in) investing activities | 70,088 | (5,718) | 75,806 |
| Net cash (used in) provided by financing activities | (45,954) | 7,063 | (53,017) |
| Net increase in cash and restricted cash | $5,414 | $727 | $4,687 |

#### Net Cash (Used In) Operating Activities

The $(18,102) increase in Net Cash (used in) operating activities was driven by Crop Insurance Proceeds of $21,403 during the nine months ended June 30, 2023, partially offset by increased revenues for the nine months ended June 30, 2024.

#### Net Cash Provided By (Used In) Investing Activities

The $75,806 increase in Net Cash provided by (used in) investing activities for the nine months ended June 30, 2024, compared to the nine months ended June 30, 2023, was primarily due to proceeds from the sale of 17,229 acres of the Alico Ranch and the 798 acres of citrus land.

#### Net Cash (Used In) Provided By Financing Activities

The increase of $(53,017) in Net Cash (used in) provided by financing activities for the nine months ended June 30, 2024, as compared to the nine months ended June 30, 2023, was primarily due to the repayment of the WCLC and the $19,094 Met Life Variable-Rate Term debt with the proceeds from the sale of 17,229 acres of the Alico Ranch, as compared to an increase in net borrowings under the WCLC in the same period in the prior year.

We had $0 and $17,910 outstanding on our revolving lines of credit as of June 30, 2024 and June 30, 2023, respectively.

The WCLC agreement provides for Rabo Agrifinance, Inc. to issue up to $2,000 in letters of credit on our behalf. As of June 30, 2024, there was $248 in outstanding letters of credit, which correspondingly reduced our availability under the WCLC.

#### Contractual Obligations

Our material cash requirements from known contractual and other obligations are described in the accompanying notes to the financial statements within Part I, Item 1 of this Quarterly Report. These include principal and interest payments on long-term debt as described in Note 7. Long-Term Debt and Lines of Credit, operating leases as described in Note 10. Leases and purchase commitments as described in Note 12. Commitments and Contingencies to the Condensed Consolidated Financial Statements included in this Quarterly Report.

### Critical Accounting Policies and Estimates

The discussion and analysis of the Company’s financial condition and results of operations is based upon its unaudited condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires the Company to make certain estimates and judgments that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. We base these estimates on historical experience, available current market information and on various other assumptions that management believes are reasonable under the circumstances. Additionally, the Company evaluates the results of these estimates on an on-going basis. Management’s estimates form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

See Note 1. Description of Business and Basis of Presentation to the Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report for a detailed description of recent accounting pronouncements. There have been no material changes to the Company’s Critical Accounting Policies and Estimates from those reflected in the Company’s 2023 Annual Report on Form 10-K.

## Market risk

As filed, 821 characters.

*Interest Rate Risk* - We are subject to interest rate risk from the utilization of financial instruments such as term loan debt and other borrowings. Our primary long-term obligations are fixed rate debts subject to fair value risk due to interest rate fluctuations. See Note 1. Description of Business and Basis of Presentation to these Condensed Consolidated Financial Statements.

We are also subject to interest rate risk on our variable rate debt; however, at June 30, 2024, we had no variable-rate debt outstanding.

In the three months ended June 30, 2024, there were no other material changes to our quantitative and qualitative disclosures about market risk from those discussed in Part II, Item 7A in our Annual Report on Form 10-K for the year ended September 30, 2023, filed with the SEC on December 6, 2023.

## Controls and procedures

As filed, 1,330 characters.

#### Limitations on effectiveness of controls and procedures

In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

#### Evaluation of Disclosure Controls and Procedures

Management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) as of June 30, 2024, our disclosure controls and procedures were effective at the reasonable assurance level.

#### Changes in Internal Control over Financial Reporting

During the quarter ended June 30, 2024 there were no changes in our internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 223 characters.

There have been no material changes to the risk factors set forth in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended September 30, 2023, as filed with the SEC on December 6, 2023.

Filed Aug 5, 2024.
Source: SEC EDGAR, the filing index for accession 0000003545-24-000099. Last ingested by Listed: Oct 24, 2026, 14:51 ET. No prices; not investment advice.