UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
__X__ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For nine months ended May 31, 1995
OR
_____ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________________ to
________________________.
Commission file number 0-261.
ALICO, INC.
(Exact name of registrant as specified in its charter)
Florida 59-0906081
(State or other jurisdiction of (I.R.S. Employer
incorporation of organization) Identification No.)
P. O. Box 338, La Belle, FL 33935
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 813/675-2966
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Yes X No
There were 7,027,827 shares of common stock, par value $1.00 per
share, outstanding at July 14, 1995.
<PAGE>
<TABLE>
<CAPTION>
FORM 10-Q
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
ALICO, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
(See Accountants' Review Report)
(Unaudited) (Unaudited)
Three Months Ended May 31, Nine Months Ended May 31,
1995 1994 1995 1994
_______________________________ _______________________________
<S> <C> <C> <C> <C>
Revenue:
Citrus $ 6,104,297 $ 5,003,313 $16,354,582 $16,079,635
Sugarcane 847,565 1,102,100 5,870,393 6,650,841
Ranch 1,209,980 1,356,222 2,150,968 3,310,253
Rock products and sand 222,144 324,518 712,832 829,436
Oil lease and land rentals 329,898 307,029 500,659 469,495
Forest products 39,040 52,662 92,982 103,632
Profit on sales of real estate 60,905 4,065,524 97,129 4,225,789
Interest and investment income 238,342 192,756 758,720 789,492
Other 12,529 11,967 58,912 57,058
___________ ___________ ___________ ___________
Total revenue 9,064,700 12,416,091 26,597,177 32,515,631
___________ ___________ ___________ ___________
Cost and expenses:
Citrus production, harvesting and
marketing 4,633,091 3,798,896 12,927,855 12,080,450
Sugarcane production and harvesting 485,693 585,025 4,238,053 4,791,768
Ranch 975,349 972,095 1,614,161 2,119,532
Real estate expenses 129,156 151,049 357,587 493,081
Interest 406,694 208,358 943,299 501,001
Other, general and administrative 513,377 1,305,836 1,572,282 2,497,286
____________ ___________ ___________ ___________
Total costs and expenses 7,143,360 7,021,259 21,653,237 22,483,118
____________ ___________ ___________ ___________
Income before income taxes 1,921,340 5,394,832 4,943,940 10,032,513
Provision for income taxes 694,279 1,918,665 1,755,440 3,517,101
____________ ___________ ___________ ___________
Net income 1,227,061 3,476,167 3,188,500 6,515,412
Retained earnings beginning of period 61,133,759 56,240,678 60,929,277 54,255,607
Dividends paid - - (1,756,957) (1,054,174)
___________ ___________ ___________ ___________
Retained earnings end of period $62,360,820 $59,716,845 $62,360,820 $59,716,845
___________ ___________ ___________ ___________
___________ ___________ ___________ ___________
Weighted average number of shares outstanding 7,027,827 7,027,827 7,027,827 7,027,827
___________ ___________ ___________ ___________
___________ ___________ ___________ ___________
Per share amounts:
Net income $ .17 $ .49 $ .45 $ .93
Dividends $ - $ - $ .25 $ .15
<FN>
See accompanying notes to condensed consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ALICO, INC. AND SUBSIDIARY FORM 10-Q
CONDENSED CONSOLIDATED BALANCE SHEETS
(See Accountants' Review Report)
(Unaudited) (Audited)
May 31, 1995 August 31,1994
_________________ ______________
<S>
ASSETS
<C> <C>
Current assets:
Cash and cash investments $ 1,080,863 $ 967,196
Marketable Securities 8,869,972 8,693,865
Accounts and mortgage notes receivable 9,108,799 7,618,943
Inventories 10,553,142 10,681,350
Prepaid expenses 84,028 189,120
Interest receivable 93,800 190,543
____________ ____________
Total current assets 29,790,604 28,341,017
Mortgage notes receivable, non-current 2,024,432 3,131,465
Land held for development and sale 7,131,243 6,757,549
Investments 925,785 810,677
Other 45,195 40,470
Property, buildings and equipment 91,100,075 85,507,357
Less: Accumulated depreciation (24,401,252) (22,403,837)
____________ ____________
Total assets $106,616,082 $102,184,698
____________ ____________
____________ ____________
<PAGE>
CONDENSED CONSOLIDATED BALANCE SHEETS
(See Accountants' Review Report)
(Continued)
(Unaudited) (Audited)
<S> May 31, 1995 August 31, 1994
LIABILITIES _________________ _______________
<C> <C>
Current liabilities:
Accounts payable $ 1,176,926 $ 1,386,912
Due to profit sharing plan - 248,594
Accrued donation (See Note 6) 1,908,468 2,103,051
Accrued expenses 968,526 1,297,862
Income taxes payable 468,897 56,303
Deferred income taxes 335,586 567,426
Note payable to bank, current portion 593,000 -
____________ ____________
Total current liabilities 5,451,403 5,660,148
Note payable to bank, long-term 22,000,000 18,713,998
Deferred income taxes 9,254,119 9,424,707
Deferred retirement benefits 521,913 428,741
____________ ____________
Total liabilities 37,227,435 34,227,594
____________ ____________
STOCKHOLDERS' EQUITY
Common stock $ 7,027,827 $ 7,027,827
Retained earnings 62,360,820 60,929,277
____________ ____________
Total stockholders' equity 69,388,647 67,957,104
____________ ____________
Total liabilities and stockholders' equity $106,616,082 $102,184,698
____________ ____________
____________ ____________
<FN>
See Accompanying notes to condensed consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ALICO, INC. AND SUBSIDIARY FORM 10-Q
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(See Accountants' Review Report)
(Unaudited)
Nine Months Ended May 31,
1995 1994
<S> _______________________________
Cash flows from operating activities:
<C> <C>
Net income $ 3,188,500 $ 6,515,412
Adjustments to reconcile net income to cash
provided from (used for) operating activities:
Depreciation 3,097,942 2,811,025
Accrued donation (194,583) 2,290,692
Net decrease in current assets and liabilities (1,123,711) (2,440,192)
Deferred income taxes (402,428) 1,866,341
Other (341,350) (4,668,018)
___________ ___________
Net cash provided from operating activities 4,224,370 6,375,260
___________ ___________
Cash flows from (used for) investing activities:
Purchases of property and equipment (6,848,571) (6,028,772)
Proceeds from sales of property and equipment 190,783 694,734
Purchases of marketable securities (1,249,473) (1,758,062)
Proceeds from sales of marketable securites 978,904 1,455,005
___________ ___________
Net cash used for investing activities (6,928,357) (5,637,095)
___________ ___________
Cash flows from (used for) financing activities:
Notes receivable collections 695,609 112,068
Repayment of bank loan (9,570,000) (7,050,025)
Proceeds from bank loan 13,449,002 7,524,574
Dividends paid (1,756,957) (1,054,174)
___________ ___________
Net cash provided from financing activities 2,817,654 (467,557)
___________ ___________
Net increase (decrease) in cash
and cash investments $ 113,667 $ 270,608
___________ ___________
___________ ___________
Supplemental disclosures of cash flow information:
Cash paid for interest, net of amount capitalized $ 833,080 $ 432,237
___________ ___________
___________ ___________
Cash paid for income taxes $ 1,744,600 $ 2,210,861
___________ ___________
___________ ___________
<FN>
See accompanying notes to condensed consolidated financial statements.
</TABLE>
<PAGE>
ALICO, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(See Accountants' Review Report)
1. Basis of financial statement presentation:
The accompanying condensed consolidated financial statements
include the accounts of the Company and its wholly owned
subsidiary, Saddlebag Lake Resorts, Inc., after elimination of all
significant intercompany balances and transactions.
The accompanying unaudited condensed consolidated financial
statements have been prepared on a basis consistent with the
accounting principles and policies reflected in the Company's
annual report for the year ended August 31, 1994. In the opinion
of Management, the accompanying unaudited condensed consolidated
financial statements contain all adjustments (consisting only of
normal recurring accruals) necessary for a fair presentation of its
consolidated financial position at May 31, 1995 and August 31,
1994 and the consolidated results of operations and cash flows for
the nine months ended May 31, 1995 and 1994.
The basic business of the Company is agriculture which is of a
seasonal nature and subject to the influence of natural phenomena
and wide price fluctuations. Fluctuation in the market prices for
citrus fruit has caused the Company to recognize additional revenue
from the prior year's crop totaling $1,770,146 in 1995 and
$1,697,547 in 1994. The results of operations for the stated
periods are not necessarily indicative of results to be expected
for the full year.
2. Recognition of revenue for real estate sales
Mortgage notes receivable are recorded under the accrual method of
accounting. Under this method, a sale is not recognized until
payment is received, including interest, aggregating 10% of the
contract sales price for residential properties and 20% for
commercial properties.
The Company has entered into an option agreement for the sale of
certain property at a purchase price of approximately $8,300,000
with an estimated gross profit of approximately $7,900,000.
3. Inventories:
A summary of the Company's inventories is shown below:
May 31, August 31,
1995 1994
____________ ___________
Unharvested fruit crop on trees $ 4,712,561 $ 5,936,629
Unharvested sugarcane 1,399,414 2,160,025
Beef cattle 4,033,919 2,227,320
Sod 407,248 357,376
___________ ___________
Total inventories $10,553,142 $10,681,350
___________ ___________
___________ ___________
<PAGE>
<TABLE>
<CAPTION>
FORM 10-Q
4. Income taxes:
The provision for income taxes for the quarters ended May 31, 1995 and 1994 is summarized as follows:
Three Months Ended May 31, Nine Months Ended May 31,
1995 1994 1995 1994
_______________________________ _____________________________
<S> <C> <C> <C> <C>
Current:
Federal income tax $ 600,190 $ 370,819 $1,579,707 $1,410,570
State income tax 99,105 26,734 263,516 240,190
__________ __________ __________ __________
699,295 397,553 1,843,223 1,650,760
__________ __________ __________ __________
Deferred:
Federal income tax (3,933) 1,335,612 (75,561) 1,587,298
State income tax (1,083) 185,500 (12,222) 279,043
__________ __________ __________ __________
(5,016) 1,521,112 (87,783) 1,866,341
__________ __________ __________ __________
Total provision for
income taxes $ 694,279 $1,918,665 $1,755,440 $3,517,101
__________ __________ __________ __________
__________ __________ __________ __________
Following is a reconciliation of the expected income tax expense computed at the U.S. Federal statutory rate of 34% and the
actual income tax provision for the quarters ended May 31, 1995 and 1994:
Three Months Ended May 31, Nine Months Ended May 31,
1995 1994 1995 1994
_______________________________ _____________________________
<S> <C> <C> <C> <C>
Expected income Tax $ 653,256 $1,834,242 $1,680,940 $3,411,054
Increase (decrease) resulting
from:
State income taxes, net
of federal benefit 69,745 195,835 179,465 364,180
Nontaxable interest and
dividends (34,748) (34,995) (134,906) (136,643)
Other reconciling items,
net 6,026 (76,417) 29,941 (121,490)
__________ __________ __________ __________
Total provision for
income taxes $ 694,279 $1,918,665 $1,755,440 $3,517,101
__________ __________ __________ __________
__________ __________ __________ __________
<PAGE>
The Company is currently under examination by the Internal Revenue Service for the years ended August 31, 1992, 1991 and
1990. The adjustments proposed to date by the Internal Revenue Service would result in approximately $6 million in
additional income taxes. When the matter is resolved, any income taxes due will become currently payable. However, the
majority of the proposed adjustments relate to the timing of recognition of certain income and expense items already
provided for in the Company's deferred tax liability accounts. Management intends to vigorously oppose the proposed
adjustments and is of the opinion that the ultimate outcome will not have a significant adverse effect on the financial
position or operations of the Company.
A partial settlement was reached with the Internal Revenue Service during April of 1995. A payment of $385,043 was made
consisting of $260,259 taxes and $124,784 interest. The items conceded related to the timing of recognition of certain
items previously expensed. The effect of this payment was to increase interest expense by $124,784 and reduce the current
deferred tax liability by $260,259.
</TABLE>
5. Indebtedness:
The Company has a financing agreement with a commercial bank that
permits the Company to borrow up to $25 million. The financing
agreement allows the Company to borrow up to $22,000,000 which is
due in January 1997 and up to $3,000,000 which is due on demand.
The total amount of long-term debt under this agreement at May 31,
1995 and August 31, 1994 was $22,000,000 and $18,713,998,
respectively.
Interest cost expensed and capitalized during the nine months ended
May 31, 1995 and May 31, 1994 was as follows:
1995 1994
__________ ________
Interest expensed $ 943,299 $501,001
Interest capitalized 384,946 236,500
__________ ________
Total interest cost $1,328,245 $737,501
__________ ________
__________ ________
6. Commitment:
The Company donated land, improvements and other items, to the
State of Florida, to be used as a site for a new university. The
gift included 975 acres of land, road construction, engineering and
planning services, assistance with utility costs and academic
chairs. Amounts for academic chairs and planning activities were
finalized during prior years and charged against earnings. The
title to the land was transferred during May 1994, recorded as a
contribution and charged against earnings. The commitment for road
construction, totaling $2.4 million, was accrued at May 31, 1994.
The portion allocable to the university land was expensed as a
donation while the remainder was capitalized.
7. Accountants' review report:
The accompanying unaudited condensed consolidated financial
statements have been reviewed by the Company's independent auditors
in accordance with standards for such limited reviews established
by the American Institute of Certified Public Accountants. The
report of such auditors with respect to their limited review is
attached hereto as Exhibit A.
<PAGE>
ITEM 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
LIQUIDITY AND CAPITAL RESOURCES:
Working capital increased to $24,339,201 at May 31, 1995, up
from $22,680,869 at August 31, 1994. As of May 31, 1995 the
Company had cash and cash investments of $1,080,863 compared to
$967,196 at August 31, 1994. Marketable securities increased from
$8,693,865 to $8,869,972 during the same period. The ratio of
current assets to current liabilities increased from 5.01 to 1 at
August 31, 1994 to 5.46 to 1 at May 31, 1995. Total assets
increased by $4,431,384 from $102,184,698 at August 31, 1994 to
$106,616,082 at May 31, 1995.
The working capital increase (approximately $1.7 million) is
primarily the result of increased accounts and mortgage notes
receivable (approximately $1.5 million) at May 31, 1995. Total
boxes of citrus harvested has increased over the last year due to
an increase in the amount of producing acres, resulting in higher
revenues and related receivables. Additionally, the current
portion of mortgage notes receivable at May 31, 1995 increased
over the August 31, 1994 balances.
In connection with a financing agreement with a commercial bank
(See Note 5 under Notes to Condensed Consolidated Financial
Statements), the Company has an unused availability of funds of
approximately $2.4 million at May 31, 1995.
RESULTS OF OPERATIONS:
When compared to the same period a year ago, net income decreased
$2,249,106 and $3,326,912 during the three and nine months ended
May 31, 1995, respectively. Income before income taxes decreased
$5,088,573 during the first nine months and $3,473,492 during the
third quarter of fiscal 1995, when compared to the same periods a
year ago. This was largely due to a decrease in earnings from real
estate sales ($3,993,166). The Company sold 40 acres of land in
Lee County, Florida last year for a $3.9 million gain which was
included in earnings for the third quarter of fiscal 1994.
Additionally, earnings from agricultural activities declined
($5,688,856 in 1995 vs. $7,152,611 in 1994).
Citrus earnings increased during the third quarter of fiscal 1995
when compared to the same period last year ($1,471,206 vs.
$1,204,417) primarily as a result of a 21% increase in the total
boxes harvested. However, the average revenue per box has declined
approximately 7% from the prior year, due to a decrease
in the average number of pound solids per box. The decrease in
pound solids per box is the primary factor in the year to date
decline in earnings for this division ($3,426,727 vs. $3,999,185
during the nine months ended May 31, 1995 and 1994, respectively).
<PAGE>
FORM 10-Q
ITEM 2. Management's Discussion
RESULTS OF OPERATIONS (Continued):
Earnings from sugarcane operations have also declined when compared
to last year ($1,632,340 vs. $1,859,073 for the nine months ended
May 31, 1995 and 1994, respectively). Gross profit per acre
approximated the prior year level ($326 vs. $330). However, there
were fewer acres in production this year (5,000 acres vs. 5,626
acres during fiscal 1995 and 1994, respectively). Consequently,
fewer gross tons were harvested compared to the prior year (186,035
tons harvested in the current year vs. 230,142 tons in the prior
year).
Ranch earnings decreased $653,914 during the first nine months of
fiscal 1995 ($536,807 vs. $1,190,721), compared to the same period
a year ago. An increase in the number of animals placed in
feedlots has decreased the number of calves sold during the period.
More calves have been placed on feed in an attempt to improve the
gross profit per calf.
Permits have been filed with the South Florida Water Management
District and the U.S. Army Corps of Engineers to begin construction
on the new state university. The Company is currently providing the
first phanse of Tree Line Avenue as part of its previously accrued
commitment. Campus construction permits were filed at the end of June.
Actual construction on the university is anticipated to begin in January
1996. Current plans are to have the core buildings completed for a
projected opening day in August 1997.
The Company has entered into an option agreement for the sale of
5,800 acres in Polk County, Florida. The agreement calls for a
sales price of approximately $8.3 million and will generate a $7.9
million gain.
<PAGE>
FORM 10-Q
PART II. OTHER INFORMATION
ITEM 6. Exhibits and reports on Form 8-K.
(a) Exhibits:
A. Accountant's Report.
B. Computation of Weighted Average Shares Outstanding at
May 31, 1995.
C. Exhibit 27 - Financial Data Schedule.
(b) Reports on Form 8-K.
None.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
ALICO, INC.
(Registrant)
July 14, 1995 W. Bernard Lester
Date Exeuctive Vice President
and Chief Operating Officer
(Signature)
July 14, 1995 L. Craig Simmons
Date Vice President and
Chief Financial Officer
(Signature)
July 14, 1995 Patrick W. Murphy
Date Controller
(Signature)
<PAGE>
EXHIBIT A
INDEPENDENT ACCOUNTANT'S REVIEW REPORT
______________________________________
The Stockholders and
Board of Directors
Alico, Inc:
We have reviewed the condensed consolidated balance sheet of Alico,
Inc. and subsidiary as of May 31, 1995, and the related condensed
consolidated statements of operations and retained earnings for the
three-month and the nine-month periods ended May 31, 1995 and 1994,
and the related condensed consolidated statements of cash flows for
the nine-month periods ended May 31, 1995 and 1994, in accordance
with Statements on Standards for Accounting and Review Services
issued by the American Institute of Certified Public Accountants.
A review of interim financial information consists principally of
obtaining an understanding of the system for the preparation of
interim financial information, applying analytical review
procedures to financial data, and making inquiries of persons
responsible for financial and accounting matters. It is
substantially less in scope than an audit in accordance with
generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements
taken as a whole. Accordingly, we do not express such an opinion.
Based on our reviews, we are not aware of any material
modifications that should be made to the condensed consolidated
financial statements referred to above for them to be in conformity
with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the consolidated balance sheet of Alico, Inc.
and subsidiary as of August 31, 1994 and the related consolidated
statements of operations, stockholders' equity and cash flows for
the year then ended (not presented herein); and in our report dated
October 16, 1994, we expressed an unqualified opinion on those
consolidated financial statements. In our opinion, the information
set forth in the accompanying condensed consolidated balance sheet
as of August 31, 1994, is fairly presented, in all material
respects, in relation to the balance sheet from which it has been
derived.
KPMG PEAT MARWICK LLP
(Signature)
Orlando, Florida
June 28, 1995
<PAGE>
FORM 10-Q
ALICO, INC.
Computation of Weighted Average Shares Outstanding as of May 31,
1995:
Number of shares outstanding at August 31, 1994 7,027,827
_________
_________
Number of shares outstanding at May 31, 1995 7,027,827
_________
_________
Weighted Average 9/1/94 - 5/31/95 7,027,827
_________
_________
EXHIBIT B
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
BALANCE SHEET OF ALICO, INC. AND SUBSIDIARY AS OF MAY 31, 1995 AND THE
RELATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS AND CASH FLOWS FOR
THE NINE MONTHS THEN ENDED AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> AUG-31-1995
<PERIOD-START> SEP-01-1994
<PERIOD-END> MAY-31-1995
<CASH> 1080863
<SECURITIES> 8869972
<RECEIVABLES> 9108799
<ALLOWANCES> 0
<INVENTORY> 10553142
<CURRENT-ASSETS> 29790604
<PP&E> 91100075
<DEPRECIATION> (24401252)
<TOTAL-ASSETS> 106616082
<CURRENT-LIABILITIES> 5451403
<BONDS> 0
<COMMON> 7027827
0
0
<OTHER-SE> 62360820
<TOTAL-LIABILITY-AND-EQUITY> 106616082
<SALES> 25838457
<TOTAL-REVENUES> 26597177
<CGS> 18780069
<TOTAL-COSTS> 18780069
<OTHER-EXPENSES> 1929869
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 943299
<INCOME-PRETAX> 4943940
<INCOME-TAX> 1755440
<INCOME-CONTINUING> 3188500
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3188500
<EPS-PRIMARY> .45
<EPS-DILUTED> .45
</TABLE>
