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, 1998.
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 or organization) Identification No.)
P. O. Box 338, La Belle, FL 33975
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 941/675-2966
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 14, 1999.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
ALICO, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
(See Accountants' Review Report)
(Unaudited)
Three Months Ended November 30,
1998 1997
_______________________________
Revenue:
Citrus $ 1,586,598 $ 3,814,858
Sugarcane 1,193,533 1,699,690
Ranch 2,647,356 3,099,678
Rock products and sand 352,174 312,082
Oil lease and land rentals 134,449 159,896
Forest products 54,248 44,491
Profit on sales of real estate - 627,660
Interest and investment income 195,852 295,532
Other 11,546 14,599
___________ ___________
Total revenue 6,175,756 10,068,486
___________ ___________
Cost and expenses:
Citrus production, harvesting and
marketing 1,275,238 3,443,008
Sugarcane production and harvesting 875,922 1,475,296
Ranch 2,787,028 2,818,387
Real estate expenses 131,112 103,625
Interest 408,937 169,995
Other, general and administrative 688,987 588,048
____________ ___________
Total costs and expenses 6,167,224 8,598,359
____________ ___________
Income before income taxes 8,532 1,470,127
Provision for income taxes (18,562) 522,789
____________ ___________
Net income 27,094 947,338
____________ ___________
Other comprehensive income, net of tax:
Unrealized gains on securities 534,009 133,403
____________ ___________
Other comprehensive income 534,009 133,403
____________ ___________
Comprehensive income 561,103 1,080,741
____________ ___________
____________ ___________
Weighted average number of shares outstanding 7,027,827 7,027,827
Per share amounts:
Basic $ 0.00 $ 0.13
Dividends $ 0.50 $ 0.60
See accompanying notes to condensed consolidated financial statements.
<PAGE>
ALICO, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(See Accountants' Review Report)
(Unaudited)
November 30, 1998 August 31, 1998
ASSETS
Current assets:
Cash and cash investments $ 431,964 $ 908,268
Marketable securities 13,661,538 12,291,767
Accounts and mortgage notes receivable 8,827,948 11,193,508
Inventories 17,568,597 17,625,923
Other current assets 427,443 334,577
____________ ____________
Total current assets 40,917,490 42,354,043
Mortgage notes receivable, non-current 537,022 514,796
Land held for development and sale 8,976,551 8,837,957
Other assets 977,614 965,230
Property, buildings and equipment 110,413,654 107,064,751
Less: Accumulated depreciation (30,303,107) (29,182,416)
____________ ____________
Total assets $131,519,224 $130,554,361
____________ ____________
____________ ____________
<PAGE>
CONDENSED CONSOLIDATED BALANCE SHEETS
(See Accountants' Review Report)
(Continued)
(Unaudited)
November 30, 1998 August 31, 1998
LIABILITIES _________________ _______________
[C] [C]
Current liabilities:
Accounts payable $ 1,463,708 $ 1,464,159
Due to profit sharing plan - 296,368
Accrued ad valorem taxes - 1,329,136
Current portion of notes payable 2,528,145 28,145
Accrued expenses 194,433 538,897
Income taxes payable 117,504 623,128
Deferred income taxes 560,003 1,023,886
Deferred revenue 453,642 345,763
____________ ____________
Total current liabilities 5,317,435 5,649,482
Notes payable 27,360,723 23,210,723
Deferred income taxes 11,788,947 11,723,895
Deferred retirement benefits 37,989 3,320
____________ ____________
Total liabilities 44,505,094 40,587,420
____________ ____________
STOCKHOLDERS' EQUITY
Common stock $ 7,027,827 $ 7,027,827
Accumulated other comprehensive income 702,354 168,345
Retained earnings 79,283,949 82,770,769
____________ ____________
Total stockholders' equity 87,014,130 89,966,941
____________ ____________
Total liabilities and
stockholders' equity $131,519,224 130,554,361
____________ ____________
____________ ____________
See Accompanying notes to condensed consolidated financial statements.
ALICO, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(See Accountants' Review Report)
Accumulated
Common Stock Other
Shares Retained Comprehensive
Issued Amount Earnings Income
__________________________________________________
Balances August 31, 1997 7,027,827 $7,027,827 $80,211,659 $913,059
Net income for the year
ended August 31, 1997 - - 6,775,806 -
Other comprehensive income,
net of tax - - - (744,714)
Dividends paid - - (4,216,696) -
_________________________________________________
Balances August 31, 1998 7,027,827 7,027,827 82,770,769 168,345
Net income for the
three months ended
November 30, 1998 - - 27,094 -
Other comprehensive
income, net of tax - - - 534,009
Dividends paid - - (3,513,914) -
_________________________________________________
Balances November 30, 1998 7,027,827 $7,027,827 $79,283,949 $702,354
_________________________________________________
_________________________________________________
See accompanying notes to condensed consolidated financial statement.
ALICO, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(See Accountants' Review Report)
(Unaudited)
Three Months Ended November 30,
1998 1997
_______________________________
Cash flows from operating activities:
[C] [C]
Net income $ 27,094 $ 947,338
Adjustments to reconcile net income to cash
provided from (used for) operating activities:
Depreciation 1,212,374 1,140,337
Net decrease in current assets and
liabilities (87,098) 52,050
Deferred income taxes (718,306) (192,523)
Other (97,431) (945,573)
__________ __________
Net cash provided from
operating activities 336,633 1,001,629
__________ __________
Cash flows from (used for) investing activities:
Purchases of property and equipment (3,468,992) (1,833,714)
Proceeds from sales of property and
equipment 4,894 789,258
Purchases of marketable securities (1,041,667) (994,553)
Proceeds from sales of marketable
securities 530,014 567,965
__________ __________
Net cash used for
investing activities (3,975,751) (1,471,044)
__________ __________
Cash flows used for financing activities:
Notes receivable collections 26,728 8,211
Repayment of bank loan (4,850,000) (5,435,000)
Proceeds from bank loan 11,500,000 9,935,000
Dividends paid (3,513,914) (4,216,696)
__________ __________
Net cash provided from
financing activities 3,162,814 291,515
__________ __________
Net decrease in cash and
cash investments $ (476,304) $ (177,900)
__________ __________
__________ __________
Supplemental disclosures of cash flow information:
Cash paid for interest, net of
amount capitalized $ 368,647 $ 144,670
__________ __________
__________ __________
Cash paid for income taxes $ 792,700 $ 798,000
__________ __________
__________ __________
See accompanying notes to condensed consolidated financial statements.
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, 1998. 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 and stockholders'
equity at November 30, 1998 and August 31, 1998 and the consolidated
results of operations and cash flows for the three months ended November
30, 1998 and 1997.
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 $218,943 in 1998 and $663,413 in 1997. The results of
operations for the stated periods are not necessarily indicative of
results to be expected for the full year.
2. Real Estate:
Real estate sales 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,
1998 1998
____________ __________
Unharvested fruit crop on trees $ 9,047 $ 7,466
Unharvested sugarcane 2,315 2,358
Beef cattle 5,922 7,535
Sod 285 267
_______ _______
Total inventories $17,569 $17,626
_______ _______
_______ _______
4. Income taxes:
The provision for income taxes for the quarters ended November 30, 1998
and 1997 is summarized as follows:
Three Months Ended November 30,
1998 1997
_______________________________
Current:
Federal income tax $ 100,453 $ 542,685
State income tax 17,051 94,523
__________ __________
117,504 637,208
__________ __________
Deferred:
Federal income tax (122,940) (103,382)
State income tax (13,126) (11,037)
__________ __________
(136,066) (114,419)
__________ __________
Total provision for
income taxes $ (18,562) $ 522,789
__________ __________
__________ __________
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, 1998 and 1997:
Three Months Ended November 30,
1998 1997
_______________________________
[S] [C] [C]
Expected income tax $ 2,901 $ 499,843
Increase (decrease) resulting
from:
State income taxes, net
of federal benefit 310 53,366
Nontaxable interest and
dividends (23,825) (25,514)
Other reconciling items,
net 2,052 (4,906)
__________ __________
Total provision for
income taxes $ (18,562) $ 522,789
__________ __________
__________ __________
The Company is currently under examination by the Internal Revenue Service
for the years ended August 31, 1991, 1992, 1993, 1994, 1995 and 1996.
When the examinations are resolved, any income taxes due will become
currently payable. However, the majority of the proposed adjustments
relate to, among other things, the Company's computation of the deferral
of citrus revenue, timing of deductions for certain expenses, and the
determination of the amounts of certain charitable contributions, all of
which have been provided for in the Company's deferred tax liability
account. The Company plans to continue to defend the positions taken in
its amended tax returns. No adjustments have yet been proposed for the
years ended August 31, 1995 and 1996.
5. Indebtedness:
The Company has financing agreements with commercial banks that permit the
Company to borrow up to $34 million. The financing agreements allow the
Company to borrow up to $27,000,000 which is due in 2000 and up to
$7,000,000 which is due on demand. The total amount of debt under these
agreements at November 30, 1998 and August 31, 1998 was $29,500,000 and
$22,850,000, respectively.
Interest cost expensed and capitalized during the three months ended
November 30, 1998 and November 30, 1997 was as follows:
1998 1997
________ ________
Interest expensed $408,937 $169,995
Interest capitalized 29,943 84,803
________ ________
Total interest cost $438,880 $254,798
________ ________
________ ________
6. Dividends:
On October 6, 1998 the Company declared a year-end dividend of $.50 per
share, which was paid on November 6, 1998.
<PAGE>
7. Disclosures about reportable segments:
Alico, Inc. has four reportable segments: citrus, sugarcane, ranching and
general corporate. The commodities produced by these segments are sold to
wholesalers and processors who prepare the products for consumption. The
Company's operations are located in Florida.
The accounting policies of the segments are the same as those described in
the summary of significant accounting policies. Alico, Inc. evaluates
performance based on profit or loss from operations before income taxes.
Alico, Inc.'s reportable segments are strategic business units that offer
different products. They are managed separately because each segment
requires different management techniques, knowledge and skills.
The following table presents information for each of the Company's
Operating segments as of and for the three months ended November 30, 1998:
__________________________________________________________
General Consolidated
Citrus Sugarcane Ranch Corporate Total
__________________________________________________________
Revenue 1,586,598 1,193,533 2,647,356 748,269 6,175,756
Costs and
expenses 1,275,238 875,922 2,787,028 1,229,036 6,167,224
Depreciation and
amortization 538,097 252,726 322,554 98,997 1,212,374
Segment profit
(loss) 311,360 317,611 (139,672) (480,767) 8,532
Segment assets 31,444,890 29,595,776 10,757,284 59,721,274 131,519,224
*Consists of rents, investments, real estate activities and other such
items of a general corporate nature.
8. Accounting pronouncements
As of September 1, 1998, Alico adopted Statement of Financial Accounting
Standards No. 130 (SFAS 130), "Reporting Comprehensive Income." Statement
130 requires that an enterprise compute and display comprehensive income
and its components in a full set of general-purpose financial statements.
Comprehensive income is defined as the change in equity of a business
enterprise during a period from transactions and other events and
circumstances from nonowner sources. It includes both net income and
other comprehensive income which caused the equity change.
Items included in other comprehensive income shall be classified based on
their nature. For example, it would include unrealized holding gains and
losses relating to securities transactions, and changes in market values
of futures contracts which qualifies as a hedge among other items. The
total of other comprehensive income for a period will be transferred to an
equity account and displayed as "accumulated other comprehensive income."
9. Subsequent events:
In December 1998, the State of Florida approved the purchase of
approximately 12,728 acres of land in Hendry and Collier Counties, Florida
from Alico, Inc. by the South Florida Water Management District for $8.8
million. On completion of the sale, the Company will recognize a gain of
approximately $8.6 million. The Company also signed a contract to
purchase approximately 7,680 acres in Hendry County, Florida, for $22.5
million. For income tax purposes, the Company plans to effect a like-kind
exchange for these two real estate transactions which will allow the Company
to defer income taxes resulting from the sale.
At its annual meeting of shareholders on December 1, 1998, the stockholders
approved an incentive plan which is intended to provide officers, board
members and other key employees of the Comnpany an opportunity to increase
their stock ownership in the Company and give them additional incentive to
achieve the Company's objectives. There have been 650,000 shares of the
Company's Common Stock reserved for awards under the incentive plan. No
grants have been made to date under this plan.
10. 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.
ITEM 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
LIQUIDITY AND CAPITAL RESOURCES:
Working capital decreased to $35,600,055 at November 30, 1998, down from
$36,704,561 at August 31, 1998. As of November 30, 1998, the Company had
cash and cash investments of $431,964 compared to $908,268 at August 31,
1998. Marketable securities increased to $13,661,538 from $12,291,767
during the same period. The ratio of current assets to current liabilities
increased to 7.69 to 1 at November 30, 1998 from 7.50 to 1 at August 31,
1998. Total assets increased by $964,863 to $131,519,224 at November 30,
1998 from $130,554,361 at August 31, 1998.
The working capital decrease of $1,104,506 is largely resulting from the
development of additional sugarcane acreage requiring capital outlay.
In connection with a financing agreement with commercial banks (See Note 5
under Notes to Condensed Consolidated Financial Statements), the Company
has an unused availability of funds of approximately $4.5 million at
November 30, 1998.
RESULTS OF OPERATIONS:
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. The results of operations for the stated periods are not
necessarily indicative of results to be expected for the full year.
Net income for the three months ending November 30, 1998 decreased by
$920,244 when compared to the first quarter of fiscal 1998. Income before
income taxes decreased $1,461,595 for the three months ended November 30,
1998, respectively, when compared to the same period a year ago. This was
primarily due to decreases in earnings from real estate activities (a loss
of ($131,112) for the three months ended November 30, 1998, as compared to
a gain of $524,035 for the three months ended November 30, 1997) and
agricultural activities.
Earnings from agricultural activities also decreased during the first
Quarter of fiscal 1999 ($489,299 vs. $877,535 during the first three months
of fiscal 1999 and 1998, respectively).
Citrus
______
Citrus revenues and earnings decreased for the quarter ended November 30,
1998 when compared to the prior year ($311,360 earnings during the first
quarter of fiscal 1999 vs. $371,850 during fiscal 1998). This is largely
the result of less fruit harvested during the first quarter when compared
to the same period last year. Additionally, recognition of the revenues
from the prior year's fresh fruit crop were less than amount realized in
the first quarter of the prior year ($218,943 in the first quarter of fiscal
1999, compared to $663,413 in the first quarter of 1998, see Note 1 to the
Condensed Consolidated Financial Statements). Management expects current
year earnings to improve as additional fruit is harvested.
Sugarcane
_________
Sugarcane earnings were higher for the first quarter of 1999 ($317,611
during fiscal 1999 vs. $224,394 during fiscal 1998) when compared to the
prior year. Although revenues declined due to fewer acres harvested,
improved sugar yield per acre has generated the higher year-to-date
earnings.
Ranching
________
Ranch earnings declined from those of a year ago for the quarter ended
November 30, 1998 when compared to the prior year (a loss of ($139,672) vs.
a profit of $281,291 for the three months ended November 30, 1998 and
November 30, 1997, respectively). Lower market prices for beef is the
primary cause of the decline.
General Corporate
_________________
The Company is continuing its marketing and permit activities for its land
which surrounds the Florida Gulf Coast University.
During November of 1996, the Company announced an agreement with Miromar
Development, Inc. of Montreal, Canada to sell 550 acres of land surrounding
the University site in Lee County for $9.35 million. The contract calls for
25 percent of the purchase price to be paid at closing, with the balance
payable over the next four years. If the sale closes, it will generate a
pretax gain of approximately $8.7 million.
Additionally, the Company announced an option agreement with REJ Group, Inc.
The option agreement permits the acquisition of a minimum of 150 acres and a
maximum of 400 acres within the 2,300 acre University Village. The
potential pretax gain to Alico, if the option is exercised, would vary from
$8.5 million to $24.5 million, depending on the time at which the option is
exercised, and the total number of acres selected.
In December 1998, the State of Florida approved the purchase of
approximately 12,728 acres of land in Hendry and Collier Counties, Florida
from Alico, Inc. by the South Florida Water Management District for $8.8
million. On completion of the sale, the Company will recognize a gain of
approximately $8.6 million. The Company also signed a contract to purchase
approximately 7,680 acres in Hendry County, Florida for $22.5 million. For
income tax purposes, the Company plans to effect a like-kind exchange for
these two real estate transactions which will allow the Company to defer
income taxes resulting from the sale.
At its annual meeting of shareholders on December 1, 1998, the stockholders
approved an incentive plan which is intended to provide officers, board
members and other key employees of the Company an opportunity to increase
their stock ownership in the Company and give them additional incentive to
achieve the Company's objectives. There are 650,000 shares of the Company's
Common Stock reserved for awards under the incentive plan. No grants have
yet been approved or distributed under the plan.
Year 2000 Compliance
____________________
The Company recognizes that year 2000 issues could result in system failures
or miscalculations causing disruptions of operations, including, among
others, a temporary inability to process transactions, send invoices or
engage in similar normal business activities.
The Company has been engaged in an evaluation of its year 2000 readiness in
connection with various aspects of its business. Specifically, the Company
has focused on its information technology and non-information technology
systems. In addition, the Company has analyzed its production processes and
products. The Company has also attempted to analyze year 2000 issues
relating to third parties with whom the Company has a business relationship.
The current status of the Company's efforts is as follows:
Internal Systems, Processes and Products
________________________________________
Information Technology Systems:
The Company's accounting software provider and operating system provider
have advised the Company that such software is year 2000 compliant.
Non-Information Technology Systems:
The Company does not believe that non-information technology systems are
material to its business; however, the Company has completed its review and
testing of such systems. The Company is not aware of any problems
concerning its non-information technology.
Products:
The Company's products are not date sensitive. Therefore, the Company does
not believe it has any material exposure with regard to its products as a
result of the year 2000 issue.
Year 2000 Issues Relating to Third Parties
__________________________________________
Suppliers:
Certain products purchased by the Company are obtained from a limited group
of suppliers. The Company surveyed such suppliers in 1998 regarding their
year 2000 status. Absent widespread difficulties affecting several major
vendors, the Company does not anticipate that vendors' year 2000 issues
would have a material adverse effect on the Company, because the Company
believes alternative sources of supply are available for all required
components.
The Company is not currently aware of the year 2000 readiness of certain
outside service companies. Any adverse effect caused by the failure of
these providers to be year 2000 compliant is not currently susceptible to
quantification.
Customers:
Because the Company intends to distribute the majority of its agricultural
products through third party distribution and marketing agreements, and
because the customer base is expected to change from year to year, the
Company is unable to predict the identity of most of its major customers in
the year 2000 and thereafter. Accordingly, the Company is unable to make an
inquiry as to whether the customers' computer driven payment or purchasing
processes are year 2000 compliant.
A customer's year 2000 issues could cause a delay in receipt of purchase
orders or in payment. If year 2000 issues are widespread among the
Company's customers, the Company's sales and cash flow could be materially
affected.
Cautionary Statement
____________________
This report of Form 10-Q contains certain forward-looking statements.
Actual results could differ materially from those projected in the forward-
looking statements as a result of various factors, including but not limited
to, the competitive environment of the Company's products, weather forces
and government regulations.
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, 1998.
C. Exhibit 27 - Financial Data Schedule.
(b) Reports on Form 8-K.
December 1, 1998.
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 14, 1998 W. Bernard Lester
Date President
Chief Operating Officer
(Signature)
January 14, 1998 L. Craig Simmons
Date Vice President
Chief Financial Officer
(Signature)
January 14, 1998 Patrick W. Murphy
Date Controller
(Signature)
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, 1998, and the related condensed consolidated
statements of operations and comprehensive income, cash flows and
stockholders' equity for the three-month periods ended November 30, 1998 and
1997. These condensed consolidated financial statements are the
responsibility of the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of 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 conducted 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, 1998 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 9, 1998 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, 1998, is fairly presented, in all material respects,
in relation to the consolidated balance sheet from which it has been
derived.
KPMG LLP
(Signature)
Orlando, Florida
January 6, 1998
ALICO, INC.
Computation of Weighted Average Shares Outstanding as of November 30, 1998:
Number of shares outstanding at August 31, 1998 7,027,827
_________
_________
Number of shares outstanding at November 30, 1998 7,027,827
_________
_________
Weighted Average 9/1/98 - 11/30/98 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 NOVEMBER 30, 1998 AND THE
RELATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME, STOCKHOLDERS'
EQUITY, 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-31-1999
<PERIOD-START> SEP-01-1998
<PERIOD-END> NOV-30-1998
<CASH> 431964
<SECURITIES> 13661538
<RECEIVABLES> 8827948
<ALLOWANCES> 0
<INVENTORY> 17568597
<CURRENT-ASSETS> 40917490
<PP&E> 110413654
<DEPRECIATION> 30303107
<TOTAL-ASSETS> 131519224
<CURRENT-LIABILITIES> 5317435
<BONDS> 0
0
0
<COMMON> 7027827
<OTHER-SE> 79986303
<TOTAL-LIABILITY-AND-EQUITY> 131519224
<SALES> 5979904
<TOTAL-REVENUES> 6175756
<CGS> 4938188
<TOTAL-COSTS> 4938188
<OTHER-EXPENSES> 820099
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 408937
<INCOME-PRETAX> 8532
<INCOME-TAX> (18562)
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<EXTRAORDINARY> 0
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<NET-INCOME> 27094
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</TABLE>
