Alico(US:ALCO)2023-12-07 15:26Financial Data and Key Metrics Changes - For the fiscal year ended September 30, 2023, total operating revenue was $39.8 million, a decrease from $91.9 million for the fiscal year ended September 30, 2022 [11] - Citrus revenue decreased to $38.1 million from $89.7 million in the previous year, driven by reduced fruit harvested due to Hurricane Ian [12] - Net income attributable to Alico common stockholders was $1.8 million for the fiscal year ended September 30, 2023, down from $12.5 million in the prior year [17] - Adjusted EBITDA was a loss of $16.1 million for the year ended September 30, 2023, compared to income of $13.4 million for the prior fiscal year [17] - Total operating expenses decreased to $33.4 million from $106.7 million in the same period last year, primarily due to insurance proceeds and reduced harvest expenses [14] Business Line Data and Key Metrics Changes - The overall decrease in box production for Alico was 51.5% for the 2022-2023 harvest season compared to the prior year [4] - The decrease in pound solids per box was attributed to lower internal fruit quality and accelerated harvesting to minimize fruit drop [13] - Grove management services revenue decreased by $10.7 million due to the termination of a property management agreement in June 2022 [12] Market Data and Key Metrics Changes - The USDA reported a 61.7% decrease in box production for the overall Florida orange crop compared to the same period in the prior year [4] - Alico's average realized price per pound solids improved by 2.6% for the year ended September 30, 2023, due to lower overall production of citrus fruit [13] Company Strategy and Development Direction - Alico continues to invest in its groves, applying oxytetracycline therapy to over 35% of its trees to combat citrus greening [6] - The company is evaluating the highest and best use of its real estate assets while maintaining its citrus operations [10] - Alico has partnered with another large citrus grower to manage approximately 3,300 acres of citrus groves, indicating a focus on expanding its management services [6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in a significant crop recovery for the 2023-2024 season due to exceptional caretaking practices and the maturity of over 2 million trees planted since 2017 [6] - The company is hopeful for federal disaster relief funds to assist in recovery from Hurricane Ian, although the timing and amount remain uncertain [5] - Management highlighted the strength of the balance sheet, with $70 million available in undrawn credit, providing liquidity during recovery [7] Other Important Information - Alico sold approximately 2,255 acres of ranch land for about $12 million and anticipates closing a deal to sell 17,229 acres of Alico Ranch for approximately $77.6 million by February 2024 [8] - All shareholder litigation related to the balance sheet restatement last year has been voluntarily dismissed [10] Q&A Session Summary Question: Clarity on citrus recovery after Hurricane Ian - Management indicated that clarity on the size and quality of the crop will be available in a couple of months after evaluating the Early and Mid-Season harvests [22][23] Question: Efficacy of oxytetracycline treatment - Management noted visible differences in treated trees and expressed hope for improved fruit quality and reduced drop rates, but definitive efficacy will be evaluated at the end of the season [25][26] Question: Update on contracts and pricing - Management confirmed that contracts have been renewed at higher price points, with negotiations for other contracts expected to begin soon [27][28] Question: Real estate land-use planning - Management stated that planning is in early stages and will be conducted internally before engaging with external parties [33] Question: Opportunities in grove management - Management sees potential for growth in third-party caretaking services, focusing on selective opportunities that are self-contained or near existing operations [36]