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 three months ended November 30, 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 January 12, 1996.
<PAGE>
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<CAPTION>
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)
Three Months Ended November 30,
1995 1994
_______________________________
<S> <C> <C>
Revenue:
Citrus $ 4,170,160 $ 3,447,467
Sugarcane 1,386,324 1,162,104
Ranch 1,534,571 611,420
Rock products and sand 234,392 277,488
Oil lease and land rentals 71,148 53,851
Forest products 39,450 28,622
Profit on sales of real estate 16,908 19,597
Interest and investment income 351,632 246,301
Other 19,944 29,016
___________ ___________
Total revenue 7,824,529 5,875,866
___________ ___________
Cost and expenses:
Citrus production, harvesting and
marketing 3,374,648 3,141,489
Sugarcane production and harvesting 1,051,472 792,353
Ranch 1,528,916 446,941
Real estate expenses 97,204 115,274
Interest 136,311 218,571
Other, general and administrative 650,587 522,084
____________ ___________
Total costs and expenses 6,839,138 5,236,712
____________ ___________
Income before income taxes 985,391 639,154
Provision for income taxes 338,065 218,141
____________ ___________
Net income 647,326 421,013
Retained earnings beginning of period 68,113,690 60,929,277
Dividends paid (2,459,739) (1,756,957)
___________ ___________
Retained earnings end of period 66,301,277 59,593,333
___________ ___________
Weighted average number of shares outstanding 7,027,827 7,027,827
___________ ___________
----------- -----------
Per share amounts:
Net income $ .09 $ .06
Dividends $ .35 $ .25 $ .25 $ .15
<FN>
See accompanying notes to condensed consolidated financial statements.
</TABLE>
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<TABLE>
<CAPTION>
ALICO, INC. AND SUBSIDIARY FORM 10-Q
CONDENSED CONSOLIDATED BALANCE SHEETS
(See Accountants' Review Report)
(Unaudited) (Audited)
November 30, 1995 August 31, 1995
ASSETS
<S> <C> <C>
Current assets:
Cash and cash investments $ 1,597,381 $ 1,148,733
Marketable Securities 9,056,883 9,410,936
Accounts and mortgage notes receivable 7,525,714 7,854,254
Inventories 12,660,278 13,057,136
Prepaid expenses 418,452 101,461
Interest receivable 193,900 163,342
____________ ____________
Total current assets 31,452,608 31,735,862
Mortgage notes receivable, non-current 2,213,199 2,229,528
Land held for development and sale 7,637,755 7,322,740
Investments 800,951 925,785
Other 64,427 42,983
Property, buildings and equipment 93,253,331 91,703,367
Less: Accumulated depreciation (25,861,626) (24,953,086)
____________ ____________
Total assets $109,560,645 $109,007,179
____________ ____________
____________ ____________
<PAGE>
CONDENSED CONSOLIDATED BALANCE SHEETS
(See Accountants' Review Report)
(Continued)
(Unaudited) (Audited)
<S> November 30, 1995 August 31, 1995
LIABILITIES _________________ _______________
<C> <C>
Current liabilities:
Accounts payable $ 1,180,436 $ 949,397
Due to profit sharing plan - 217,968
Accrued ad valorem taxes - 1,076,241
Accrued donation (See Note 6) 1,539,641 1,638,038
Accrued expenses 132,855 136,597
Income taxes payable 376,875 254,393
Deferred income taxes 1,223,853 1,383,820
____________ ____________
Total current liabilities 4,453,660 5,656,454 21,711,454
Note payable to bank 19,590,000 16,055,000
Deferred income taxes 11,750,634 11,674,524
Deferred retirement benefits 165,384 214,945
____________ ____________
Total liabilities 35,959,678 33,600,923
____________ ____________
STOCKHOLDERS' EQUITY
Common stock $ 7,027,827 $ 7,027,827
Unrealized gains on marketable securities 271,863 264,739
Retained earnings 66,301,277 68,113,690
____________ ____________
Total stockholders' equity 73,600,967 75,406,256
____________ ____________
Total liabilities and
stockholders' equity $109,560,645 $109,007,179
____________ ____________
____________ ____________
<FN>
See Accompanying notes to condensed consolidated financial statements.
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<TABLE>
<CAPTION>
ALICO, INC. AND SUBSIDIARY FORM 10-Q
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(See Accountants' Review Report)
(Unaudited)
Three Months Ended November 30,
1995 1994
<S> _______________________________
Cash flows from operating activities:
<C> <C>
Net income $ 647,326 $ 421,013
Adjustments to reconcile net income to cash
provided from (used for) operating activities:
Depreciation 1,042,544 994,930
Accrued donation (98,397) (25,487)
Net decrease in current assets and
liabilities (563,878) (927,539)
Deferred income taxes (88,159) (87,835)
Other (497,759) (63,905)
__________ __________
Net cash provided from
operating activities 441,677 311,177
__________ __________
Cash flows from (used for) investing activities:
Purchases of property and equipment (1,698,177) (2,210,714)
Proceeds from sales of property and equipment 40,431 -
Purchases of marketable securities (694,369) (115,169)
Proceeds from sales of marketable securites 1,270,199 410,010
__________ __________
Net cash used for
investing activities (1,081,916) (1,915,873)
__________ __________
Cash flows from (used for) financing activities:
Notes receivable collections 13,626 21,174
Repayment of bank loan (3,270,000) (3,350,000)
Proceeds from bank loan 6,805,000 6,830,000
Dividends paid (2,459,739) (1,756,957)
__________ __________
Net cash provided from
financing activities 1,088,887 1,744,217
__________ __________
Net increase (decrease) in
cash and cash investments $ 448,648 $ 139,521
__________ __________
__________ __________
Supplemental disclosures of cash flow information:
Cash paid for interest, net of
amount capitalized $ 118,075 $ 191,563
__________ __________
__________ __________
Cash paid for income taxes $ 285,000 $ 185,000
__________ __________
__________ __________
<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, 1995.
In the opinion of Management, the accompanying unaudited condensed consolidated
financial statements contain all adjustments (consisting only of normal recur-
ring accruals) necessary for a fair presentation of its consolidated financial
position at November 30, 1995 and August 31, 1995 and the consolidated results
of operations and cash flows for the three months ended November 30, 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 $482,211 in
1995 and $283,492 in 1994. The results of operations for the stated periods
are not necessarily indicative of results to be expected for the full year.
2. Accounts and mortgage notes receivable:
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.
3. Inventories:
A summary of the Company's inventories (in thousands) is shown below:
November 30, August 31,
1995 1995
____________ __________
Unharvested fruit crop on trees $ 6,257 $ 6,027
Unharvested sugarcane 2,048 2,138
Beef cattle 3,819 4,429
Sod 536 463
_______ _______
Total inventories $12,660 $13,057
_______ _______
_______ _______
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<CAPTION>
FORM 10-Q
4. Income taxes:
The provision for income taxes for the quarters ended November 30, 1995 and 1994
is summarized as follows:
Three Months Ended November 30,
1995 1994
_______________________________ _____________________________
<S> <C> <C>
Current:
Federal income tax $ 348,863 $ 277,110
State income tax 58,322 28,866 263,516 240,190
__________ __________
407,185 305,976
__________ __________
Deferred:
Federal income tax (62,452) (82,956)
State income tax (6,668) (4,879)
__________ __________
(69,120) (87,835)
__________ __________
Total provision for
income taxes $ 338,065 $ 218,141
__________ __________
__________ __________
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 November 30, 1995 and 1994:
Three Months Ended November 30,
1995 1994
_______________________________ _____________________________
<S> <C> <C>
Expected income tax $ 335,033 $ 217,312
Increase (decrease) resulting
from:
State income taxes, net
of federal benefit 35,770 23,201
Nontaxable interest and
dividends (42,100) (49,606)
Other reconciling items,
net 9,362 27,234
__________ __________
Total provision for
income taxes $ 338,065 $ 218,141
__________ __________
__________ __________
<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 $6.9 million
in additional income taxes. When the matter is resolved, any income taxes due
will become currently payable. However, the majority of the proposed adjust-
ments relate to the timing of recognition of certain income and expense items
already provided for in the Company's deferred tax liability accounts.
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.
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 November 30, 1995 and August 31, 1995 was $19,590,000 and $16,055,000,
respectively.
Interest cost expensed and capitalized during the three months
ended November 30, 1995 and November 30, 1994 was as follows:
1995 1994
________ ________
Interest expensed $136,311 $218,571
Interest capitalized 175,990 103,853
________ ________
Total interest cost $312,301 $322,424
________ ________
________ ________
6. Commitment:
During October 1992 the Company entered into an agreement to donate 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. The commitment was recorded as a contribution in May 1994 when the
title to the land was transferred. Costs related to road construction have been
accrued and capitalized into land. Other costs will be expensed as incurred.
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 $26,998,948 at November 30, 1995, up from
$26,079,408 at August 31, 1995. As of November 30, 1995 the Company had cash
and cash investments of $1,597,381 compared to $1,148,733 at August 31, 1995
Marketable securities decreased from $9,410,936 to $9,056,883 during the same
period. The ratio of current assets to current liabilities increased from 5.61
to 1 at August 31, 1995 to 7.06 to 1 at November 30, 1995. Total assets
increased by $553,466 from $109,007,179 at August 31, 1995 to $109,560,645 at
November 30, 1995.
The working capital increase ($919,540) is primarily the result of the
decrease in current liabilities ($5,656,454 vs. $4,453,660 at August 31, 1995
and November 30, 1995, respectively). Ad valorem taxes ($1,076,241) and the
profit sharing plan contribution ($217,968), accrued at August 31, 1995 were
paid during the first quarter of fiscal 1996.
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 $5.4 million at
November 30, 1995.
RESULTS OF OPERATIONS:
When compared to the same period a year ago, net income increased $226,313
during the first quarter of fiscal 1996. Income before income taxes
increased $346,237 during the first quarter of fiscal 1996, when compared to
the same period a year ago, largely due to an increase in earnings
from agricultural activities ($1,136,019 vs. $840,208 during the first
quarters of fiscal 1996 and 1995, respectively.)
Citrus earnings increased during the first quarter of fiscal 1996, when
compared to the same period last year ($795,512 vs. $305,978), primarily the
result of improved market prices for citrus products.
<PAGE>
FORM 10-Q
ITEM 2. Management's Discussion
RESULTS OF OPERATIONS (Continued):
Sugarcane earnings, during the first quarter, approximated those of the same
period a year ago ($334,852 vs. $369,751 during the first quarter of fiscal
1996 and 1995, respectively). Ranch earnings, however, decreased $158,824
during the first quarter of fiscal 1996, compared to the first quarter of
fiscal 1995 ($5,655 vs. $164,479, respectively). A decrease in market prices
for beef is the primary cause for the decrease in profits for this division.
Land preparation activities are underway for the new Florida Gulf Coast
University which is scheduled to open in August 1997. The Company is
continuing its marketing and permit activities for its land which surrounds
the University site.
<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
November 30, 1995.
C. Exhibit 27 - Financial Data Schedule.
(b) Reports on Form 8-K.
December 18, 1995.
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)
January 12, 1996 W. Bernard Lester
Date Exeuctive Vice President
and Chief Operating Officer
(Signature)
January 12, 1996 L. Craig Simmons
Date Vice President and
Chief Financial Officer
(Signature)
January 12, 1996 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 November 30, 1995, and the related condensed consolidated
statements of operations and retained earnings for the three-month periods ended
November 30, 1995 and 1994, and the related condensed consolidated statements of
cash flows for the three-month periods ended November 30, 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 informa-
tion, 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, 1995 and the related consolidated statements of operations, stock-
holders' equity and cash flows for the year then ended (not presented herein);
and in our report dated October 6, 1995, 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,
1995, 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
January 5, 1996
<PAGE>
FORM 10-Q
ALICO, INC.
Computation of Weighted Average Shares Outstanding as of November 30, 1995:
Number of shares outstanding at August 31, 1995 7,027,827
_________
_________
Number of shares outstanding at November 30, 1995 7,027,827
_________
_________
Weighted Average 9/1/95 - 11/30/95 7,027,827
_________
_________
EXHIBIT B
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
BALANCE SHEET OF ALICO, INC. AND SUBSIDIARY AS OF NOVEMBER 30, 1995 AND THE
RELATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS AND CASH FLOWS FOR
THE THREE MONTHS THEN ENDED AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> AUG-31-1996
<PERIOD-START> SEP-01-1995
<PERIOD-END> NOV-30-1995
<CASH> 1597381
<SECURITIES> 9056883
<RECEIVABLES> 7525714
<ALLOWANCES> 0
<INVENTORY> 12660278
<CURRENT-ASSETS> 31452608
<PP&E> 93253331
<DEPRECIATION> 25861626
<TOTAL-ASSETS> 109560645
<CURRENT-LIABILITIES> 4453660
<BONDS> 0
0
0
<COMMON> 7027827
<OTHER-SE> 66573140
<TOTAL-LIABILITY-AND-EQUITY> 109560645
<SALES> 7472897
<TOTAL-REVENUES> 7824529
<CGS> 5955036
<TOTAL-COSTS> 5955036
<OTHER-EXPENSES> 747791
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 136311
<INCOME-PRETAX> 985391
<INCOME-TAX> 338065
<INCOME-CONTINUING> 647326
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 647326
<EPS-PRIMARY> .09
<EPS-DILUTED> .09
</TABLE>
