Alico, Inc. (ALCO) on Q1 2021 Results - Earnings Call Transcript
Operator: Greetings, and welcome to Alico's First Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. As a reminder, today's conference is being recorded. On the call today are John Kiernan, President and Chief Executive Officer; and Rich Rallo, Chief Financial Officer. Earlier today, the Company issued a press release announcing its results for the first quarter ended December 31, 2020. If you have not had a chance to review the release, it is available on Investor Relations portion of the Company's website at www.alicoinc.com. This call is being webcast, and a replay will be available on Alico's website as well. Before we begin, the Company would like to remind everyone that the prepared remarks today contain forward-looking statements. Such statements are subject to risks, uncertainties and other factors that may cause actual results to differ materially from those expressed or implied in these statements. Important factors that could cause or contribute to such differences include risk details in the Company's quarterly reports on Form 10-Q, annual reports on Form 10-K, current reports on Form 8-K and any amendments thereto filed with the SEC and those mentioned in earnings release. John Kiernan: Thank you, Latonya, and thank you, everyone, for joining us for Alico's First Quarter 2021 Earnings Call this morning. As we begin our fiscal year 2021, we are encouraged by higher citrus fruit market prices per pound solid and that the downward pressure on citrus pricing experienced by the industry last year has subsided. Pricing for the early and mid-season fruit is above $2 per pound solid, compared to a year ago, our market pricing was in the low $1 range. The increase in price is being driven by both an increase in consumption of not-from-concentrate orange juice by retail consumers as well as tighter supplies of citrus fruit from Florida, Brazil and Mexico. These factors have led to decreased inventory supply levels at the citrus juice processors. Robust consumption of not-from-concentrate orange juice by retail consumers continues to remain strong. Since March 2020, there has been double-digit growth in consumption demand, and the latest published Nielsen data shows the double-digit year-over-year increase in not-from-concentrate orange juice consumption is continuing to hold steady. We are confident that all of these factors will support higher Valencia market pricing for this season, which will begin to be harvested in the next couple of weeks. With respect to the 2021 harvest, which commenced in December of 2020, we have seen, along with the entire Florida citrus industry, a decrease in processed box production of the early and mid-season crop as compared to the same period last year. At the beginning of January, the USDA released its citrus crop forecast for the 2020/'21 harvest season and indicated its expectation that the Florida orange crop will decrease by approximately 19.8% this year as compared to the prior year, with much of this discrete -- with much of this decrease relating to the early and mid-season crop, which is estimated to decline by approximately 32.6%. We're running a comprehensive growth management program backed by decades of operational knowledge and rigorous efficiencies, which we believe will allow our percentage decline in the early and mid-season crop to be substantially lower than the USDA's forecast. Rich Rallo: Thank you, John, and good morning, everyone. As this is our second earnings call, I would again like to remind everyone of the seasonality of our business. The majority of our citrus crop is harvested in the second and third quarters of the fiscal year, and the majority of our profit and cash flows are typically recognized in the second and third quarters as well. As such, the quarterly results for the first quarter are not indicative of our full year results. John Kiernan: Thanks, Rich. Alico is the leading high-quality, low-cost producer of citrus in Florida, and one of the largest citrus growers in the United States. We will continue to focus on controlling and managing costs and unlocking additional value for our shareholders to ensure that the legacy of Alico thrives for decades to come. After carefully considering the impact of lower production but higher prices this season, we are affirming our previously announced guidance for the fiscal year 2021. Our confidence is the result of a combination of our insight into the factors supporting increased market prices as well as our track record for continued stringent management of our operating and general and administrative expenses. Operator: Our first question comes from Gerry Sweeney with ROTH Capital. Gerry Sweeney: I want to start out with just the harvest. Obviously, you talked a little bit about the early, mids and the size of the harvest. If we -- and some of the harvest in this first quarter was -- I think you harvested more acres in this quarter versus last quarter -- or last year, in the first quarter. If we just combined the early and mids production from last year and sort of reduce that by the range that you provided, would that be sort of a good guidepost to potential production in the early and mids this year? John Kiernan: Rich? Rich Rallo: Yes. So Gerry, I would say that would be -- the early, mid would be a fair assessment. Gerry Sweeney: Got it. And then pricing, obviously, pricing looks very good. And as we move forward into the Valencia, which I think we start to see some in the 2Q and then obviously, in the third quarter, how does -- the early, mid had a substantial step-up in pricing. How do we look at pricing for Valencia? And how does that compare to early and mids? I'm sure there's some nuances there, so I was just curious as to how that potentially may play out or some things we can keep an eye out for? Rich Rallo: Yes. So Gerry, as we've seen and mentioned, the consumption of not-from-concentrate orange juice continues to be strong. So while we don't have specifics, we anticipate that this trend for the Valencia, with respect to market pricing, will be similar, if not a little bit stronger than what we've seen in the early, mid size. So I think, as we look forward, there's nothing here that says that trend would be anything different. Gerry Sweeney: Got it. John Kiernan: Again, the harvest season hasn't started yet, but every indication is that the Valencia prices will be higher than what the market prices for early and mids were this season, which would be a substantial increase over last year. Gerry Sweeney: Yes. And then what gives you confidence that, obviously, early and mids were lower, more fruit drop, et cetera. When you look at your acreage, it sounds like you have some confidence that as well as the Florida state, the Valencia should be less impacted or not have as nearly as much decline in the harvest. Can you go through what provides that confidence? Or the difference why early and mid felt more declined versus potentially on the Valencia side? John Kiernan: I'll take that, Rich. The -- I guess the facts to support that claim is really we're monitoring and working all of our groves every day, so it's under constant inspection. We saw the drop actually taper off in our early mids, and we believe that, that trend hopefully will continue as we go into the Valencia season. So at these lower drop levels extrapolating out, that gives us great confidence as we forecasted our financial results for this current season. Gerry Sweeney: Got it. And then one more for me, and I'll jump back in line. Grove management, are you -- how is that moving -- in potential new customers, how is that moving along? Are you in discussions with other groves? Any sort of qualitative, quantitative view you can provide on that? John Kiernan: Sure. It's all going to be qualitative. We don't have any quantitative we can at this point. We've discussed previously that we're very selective on the grove management services we would provide to potential customers. They have to meet a pretty stringent set of criteria. So it's less than a dozen potential targets, and we've been in discussions with several of them. I don't have anything to report at this time on either the likelihood that we'll close in this current fiscal year. But when we do, it will be at profitable levels. But there are active discussions that we are having. Operator: At this time, there are no more questions in the queue. I would like to turn the call back over to Mr. John Kiernan for closing comments. John Kiernan: I just want to thank everyone for joining our call today and for your support of Alico. In addition, I want to send a special thank you to our dedicated employees and the rest of our management team for their continued efforts to make Alico the best it can be. Our annual meeting will be held on Thursday, February 25 in Tampa. And we're strongly encouraging shareholders this year to mail in their proxy vote. We look forward to hosting another earnings call for our second quarter results in May. We hope everybody stays safe. Thank you. Operator: Thank you, ladies and gentlemen. This concludes today's conference. You may disconnect your lines at this time, and thank you for your participation.
Alico, Inc. (NASDAQ: ALCO) Surpasses Revenue Estimates in Q4 2024
- Alico, Inc. (NASDAQ:ALCO) reported a significant revenue beat with $935,000 in Q4 2024, far exceeding the estimated $400,000.
- The company achieved a net income of $7 million and an EBITDA of $29.7 million, with strategic land sales contributing significantly to its financial results.
- Alico maintained a strong liquidity position and showcased robust financial metrics, including a low debt-to-equity ratio of 0.039 and a current ratio of 3.81.
Alico, Inc. (NASDAQ:ALCO) is a company involved in agribusiness, primarily focusing on citrus production and land management. On December 2, 2024, ALCO reported its earnings, revealing a revenue of $935,000, which surpassed the estimated $400,000. This significant revenue beat highlights the company's strong performance in the fourth quarter of 2024.
During the Q4 2024 earnings call, key figures such as John Kiernan, the President and CEO, and Brad Heine, the CFO, provided insights into the company's financial performance. ALCO reported a net income of $7 million attributable to its common stockholders for the fiscal year. The company also achieved an EBITDA of $29.7 million, although the Adjusted EBITDA was a negative $3.8 million after accounting for non-recurring items.
Alico's strategic land sales contributed significantly to its financial results. The company sold approximately 18,354 acres, generating around $86.2 million in gross proceeds. This move aligns with Alico's strategy to optimize its asset portfolio and strengthen its financial position. Additionally, the company maintained a strong liquidity position with about $86.6 million of undrawn credit available under its revolving line of credit.
ALCO's financial metrics provide further insights into its market valuation. The company's price-to-earnings (P/E) ratio is approximately 28.89, indicating the price investors are willing to pay for each dollar of earnings. The price-to-sales ratio stands at about 4.32, suggesting the market values its sales at over four times its revenue. The enterprise value to sales ratio is around 4.47, reflecting the company's total valuation relative to its sales.
The company's financial health is further supported by a low debt-to-equity ratio of 0.039, indicating a conservative use of debt in its capital structure. Additionally, ALCO's current ratio of 3.81 suggests a strong liquidity position, enabling the company to cover its short-term liabilities effectively. These financial metrics highlight Alico's robust financial standing and its ability to navigate market challenges.
Alico, Inc. (NASDAQ: ALCO) Surpasses Revenue Estimates in Q4 2024
- Alico, Inc. (NASDAQ:ALCO) reported a significant revenue beat with $935,000 in Q4 2024, far exceeding the estimated $400,000.
- The company achieved a net income of $7 million and an EBITDA of $29.7 million, with strategic land sales contributing significantly to its financial results.
- Alico maintained a strong liquidity position and showcased robust financial metrics, including a low debt-to-equity ratio of 0.039 and a current ratio of 3.81.
Alico, Inc. (NASDAQ:ALCO) is a company involved in agribusiness, primarily focusing on citrus production and land management. On December 2, 2024, ALCO reported its earnings, revealing a revenue of $935,000, which surpassed the estimated $400,000. This significant revenue beat highlights the company's strong performance in the fourth quarter of 2024.
During the Q4 2024 earnings call, key figures such as John Kiernan, the President and CEO, and Brad Heine, the CFO, provided insights into the company's financial performance. ALCO reported a net income of $7 million attributable to its common stockholders for the fiscal year. The company also achieved an EBITDA of $29.7 million, although the Adjusted EBITDA was a negative $3.8 million after accounting for non-recurring items.
Alico's strategic land sales contributed significantly to its financial results. The company sold approximately 18,354 acres, generating around $86.2 million in gross proceeds. This move aligns with Alico's strategy to optimize its asset portfolio and strengthen its financial position. Additionally, the company maintained a strong liquidity position with about $86.6 million of undrawn credit available under its revolving line of credit.
ALCO's financial metrics provide further insights into its market valuation. The company's price-to-earnings (P/E) ratio is approximately 28.89, indicating the price investors are willing to pay for each dollar of earnings. The price-to-sales ratio stands at about 4.32, suggesting the market values its sales at over four times its revenue. The enterprise value to sales ratio is around 4.47, reflecting the company's total valuation relative to its sales.
The company's financial health is further supported by a low debt-to-equity ratio of 0.039, indicating a conservative use of debt in its capital structure. Additionally, ALCO's current ratio of 3.81 suggests a strong liquidity position, enabling the company to cover its short-term liabilities effectively. These financial metrics highlight Alico's robust financial standing and its ability to navigate market challenges.
