Filed by Bowne Pure Compliance
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
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þ |
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Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the quarterly period ended December 31, 2007
or
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o |
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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)
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Florida
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59-0906081 |
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.) |
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P.O. Box 338, LaBelle, FL
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33975 |
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(Address of principal executive offices)
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(Zip Code) |
Registrants telephone number, including area code: 863-675-2966
N/A
(Former name, former address and former fiscal year, if changed since last report.)
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.
þ Yes o No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer,
a non-accelerated filer, or a smaller reporting company.
See the definitions of large
accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one):
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Large accelerated filer o |
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Accelerated filer þ |
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Non-accelerated filer o
(Do not check if a smaller reporting company) |
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Smaller Reporting Company o |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act).
o Yes þ No
There
were 7,373,728 shares of common stock, par value $1.00 per share,
outstanding at February 11, 2008.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands except per share data)
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One Month ended |
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Three months ended December 31, |
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September 30, |
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2007 |
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2006 |
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2007 |
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Operating revenue |
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Agricultural operations |
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$ |
19,009 |
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$ |
23,411 |
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$ |
989 |
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Non-agricultural operations |
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676 |
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670 |
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188 |
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Real estate operations |
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3,869 |
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2,447 |
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Total operating revenue |
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23,554 |
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26,528 |
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1,177 |
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Operating expenses |
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Agricultural operations |
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18,215 |
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20,220 |
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912 |
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Non-agricultural operations |
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108 |
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113 |
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46 |
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Real estate operations |
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891 |
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240 |
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59 |
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Total operating expenses |
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19,214 |
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20,573 |
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1,017 |
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Gross profit |
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4,340 |
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5,955 |
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160 |
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Corporate general and administrative |
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3,001 |
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3,167 |
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850 |
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Income (loss) from operations |
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1,339 |
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2,788 |
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(690 |
) |
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Other income (expenses): |
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Profit on sales of bulk real estate: |
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Sales |
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817 |
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1,870 |
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Cost of sales |
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578 |
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Profit on sales of bulk real estate, net |
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817 |
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1,292 |
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Interest & investment income |
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4,333 |
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1,626 |
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693 |
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Interest expense |
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(2,466 |
) |
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(1,261 |
) |
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(820 |
) |
Other |
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265 |
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74 |
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(4 |
) |
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Total other income, (expense) net |
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2,949 |
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1,731 |
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(131 |
) |
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Income (loss) before income taxes |
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4,288 |
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4,519 |
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(821 |
) |
Provision for income taxes |
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1,498 |
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1,939 |
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(141 |
) |
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Net income (loss) |
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$ |
2,790 |
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$ |
2,580 |
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$ |
(680 |
) |
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Weighted-average number of shares
outstanding |
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7,361 |
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7,373 |
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7,358 |
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Weighted-average number of shares
outstanding assuming dilution |
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7,375 |
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7,393 |
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7,376 |
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Per share amounts: |
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Basic |
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$ |
0.38 |
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$ |
0.35 |
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$ |
(0.09 |
) |
Diluted |
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0.38 |
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0.35 |
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(0.09 |
) |
Dividends |
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$ |
0.00 |
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$ |
0.25 |
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$ |
0.28 |
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2
ALICO, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
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December 31, |
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September 30, |
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2007 |
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2007 |
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August 31, |
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(unaudited) |
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(unaudited) |
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2007 |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
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$ |
39,811 |
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$ |
31,599 |
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$ |
34,825 |
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Marketable securities available for sale |
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49,275 |
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46,511 |
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46,242 |
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Accounts receivable |
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17,490 |
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14,848 |
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15,738 |
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Mortgage and notes receivable |
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3,387 |
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3,832 |
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|
487 |
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Inventories |
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28,301 |
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27,232 |
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25,214 |
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Current deferred tax asset |
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2,716 |
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2,661 |
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2,312 |
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Other current assets |
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2,242 |
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2,719 |
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2,398 |
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Total current assets |
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143,222 |
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129,402 |
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127,216 |
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Mortgages and notes receivable, net of current portion |
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5,063 |
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6,688 |
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9,939 |
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Investments, deposits and other |
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4,335 |
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3,237 |
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3,262 |
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Deferred tax benefit |
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3,810 |
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3,805 |
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3,950 |
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Cash surrender value of life insurance, designated |
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7,542 |
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7,656 |
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7,530 |
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Property, buildings and equipment |
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180,319 |
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178,968 |
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178,917 |
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Less: accumulated depreciation |
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(52,160 |
) |
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(50,422 |
) |
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(49,927 |
) |
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Total assets |
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$ |
292,131 |
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$ |
279,334 |
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$ |
280,887 |
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(continued)
3
ALICO, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (continued)
(in thousands)
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December 31, |
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September 30, |
|
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|
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2007 |
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2007 |
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|
August 31, |
|
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|
(unaudited) |
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(unaudited) |
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2007 |
|
LIABILITIES & STOCKHOLDERS EQUITY |
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Current liabilities: |
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Accounts payable |
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$ |
4,903 |
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$ |
1,943 |
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$ |
2,328 |
|
Income taxes payable |
|
|
4,981 |
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|
3,418 |
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|
3,335 |
|
Current portion of notes payable |
|
|
1,349 |
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|
|
1,350 |
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|
|
1,350 |
|
Accrued expenses |
|
|
5,042 |
|
|
|
4,425 |
|
|
|
4,330 |
|
Dividend payable |
|
|
2,024 |
|
|
|
4,048 |
|
|
|
2,024 |
|
Accrued ad valorem taxes |
|
|
|
|
|
|
2,105 |
|
|
|
1,876 |
|
Other current liabilities |
|
|
1,563 |
|
|
|
2,153 |
|
|
|
2,276 |
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|
|
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|
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|
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Total current liabilities |
|
|
19,862 |
|
|
|
19,442 |
|
|
|
17,519 |
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|
|
|
|
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|
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|
|
|
|
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Notes payable, net of current portion |
|
|
144,011 |
|
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|
134,534 |
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|
|
135,539 |
|
Deferred retirement benefits, net of current portion |
|
|
5,269 |
|
|
|
5,098 |
|
|
|
5,041 |
|
Commissions and deposits payable |
|
|
4,358 |
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|
|
4,265 |
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|
|
3,842 |
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|
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|
|
|
|
|
|
|
|
|
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|
Total liabilities |
|
|
173,500 |
|
|
|
163,339 |
|
|
|
161,941 |
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|
|
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|
|
|
|
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Stockholders equity: |
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|
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|
|
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|
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|
|
|
|
|
|
|
|
Common stock |
|
|
7,376 |
|
|
|
7,376 |
|
|
|
7,376 |
|
Additional paid in capital |
|
|
9,950 |
|
|
|
10,199 |
|
|
|
10,169 |
|
Treasury stock |
|
|
(783 |
) |
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|
(891 |
) |
|
|
(1,046 |
) |
Accumulated
other comprehensive income |
|
|
36 |
|
|
|
49 |
|
|
|
45 |
|
Retained earnings |
|
|
102,052 |
|
|
|
99,262 |
|
|
|
102,402 |
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|
|
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|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
Total stockholders equity |
|
|
118,631 |
|
|
|
115,995 |
|
|
|
118,946 |
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|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders equity |
|
$ |
292,131 |
|
|
$ |
279,334 |
|
|
$ |
280,887 |
|
|
|
|
|
|
|
|
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|
|
See accompanying Notes to Condensed Consolidated Financial Statements.
4
ALICO, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(in thousands)
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|
|
|
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|
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|
Three months ended |
|
|
One Month Ended |
|
|
|
December 31, |
|
|
September 30, |
|
|
|
2007 |
|
|
2006 |
|
|
2007 |
|
|
|
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|
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|
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|
|
|
|
|
|
|
|
|
|
|
|
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|
Cash flows from operating activities: |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used for)
operating activities |
|
$ |
3,314 |
|
|
$ |
(1,035 |
) |
|
$ |
(1,753 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate deposits and accrued commissions |
|
|
|
|
|
|
1,616 |
|
|
|
|
|
Purchases of property and equipment |
|
|
(2,131 |
) |
|
|
(3,229 |
) |
|
|
(293 |
) |
Purchases of other investments |
|
|
(644 |
) |
|
|
|
|
|
|
|
|
Proceeds from sale of real estate |
|
|
|
|
|
|
600 |
|
|
|
|
|
Proceeds from sales of property and equipment |
|
|
586 |
|
|
|
1,223 |
|
|
|
90 |
|
Purchases of marketable securities |
|
|
(15,645 |
) |
|
|
(7,539 |
) |
|
|
(1,574 |
) |
Proceeds from sales of marketable securities |
|
|
12,849 |
|
|
|
14,215 |
|
|
|
1,309 |
|
Note receivable collections |
|
|
2,873 |
|
|
|
1,693 |
|
|
|
|
|
Other |
|
|
70 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used for)
investing activities |
|
|
(2,042 |
) |
|
|
8,579 |
|
|
|
(468 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Repayment of loans |
|
|
(1,824 |
) |
|
|
(4,621 |
) |
|
|
(2,106 |
) |
Proceeds from loans |
|
|
11,300 |
|
|
|
11,124 |
|
|
|
1,101 |
|
Proceeds from stock transactions |
|
|
16 |
|
|
|
|
|
|
|
|
|
Proceeds used for stock transactions |
|
|
(528 |
) |
|
|
|
|
|
|
|
|
Dividends paid |
|
|
(2,024 |
) |
|
|
(2,028 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used for)
financing activities |
|
|
6,940 |
|
|
|
4,475 |
|
|
|
(1,005 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash
equivalents |
|
$ |
8,212 |
|
|
$ |
12,019 |
|
|
$ |
(3,226 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents: |
|
|
|
|
|
|
|
|
|
|
|
|
At beginning of period |
|
$ |
31,599 |
|
|
$ |
25,158 |
|
|
$ |
34,825 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At end of period |
|
$ |
39,811 |
|
|
$ |
37,177 |
|
|
$ |
31,599 |
|
|
|
|
|
|
|
|
|
|
|
(continued)
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
One Month Ended |
|
|
|
December 31, |
|
|
September 30, |
|
|
|
2007 |
|
|
2006 |
|
|
2007 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosures of cash flow information |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid for interest, net of amount capitalized |
|
$ |
2,199 |
|
|
$ |
1,044 |
|
|
$ |
43 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid for income taxes |
|
|
|
|
|
$ |
2,075 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net non cash investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of mortgage notes |
|
|
|
|
|
$ |
13,341 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value adjustments to securities available for sale
net of tax effects |
|
$ |
(2 |
) |
|
$ |
37 |
|
|
$ |
27 |
|
|
|
|
|
|
|
|
|
|
|
Reclassification of breeding herd to property and
equipment |
|
$ |
458 |
|
|
$ |
566 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying Notes to Condensed Consolidated Financial Statements
6
ALICO, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands except for per share data)
1. Basis of financial statement presentation:
On September 28, 2007, the Board of Directors of the Company approved a change in the Companys
fiscal year end from August 31 to September 30. The fiscal year change is effective beginning with
the Companys 2008 fiscal year. The Companys 2008 fiscal year began on October 1, 2007 and will
end September 30, 2008, resulting in a one month transition period that began September 1, 2007 and
ended September 30, 2007. This Form 10Q includes the unaudited results for the quarter ended
December 31, 2007 and 2006, and the unaudited results for the one month ended September 30, 2007.
The Company has also included selected unaudited results for the one month ended September 30, 2006
for comparative purposes in Note 14. The audited results for the one month ended September 30,
2007 will be included separately in the Companys Annual Report on Form 10K for the fiscal year
ending September 30, 2008.
The accompanying condensed consolidated financial statements (Financial Statements) include the
accounts of Alico, Inc. (Alico) and its wholly owned subsidiaries, Alico Land Development
Company, Agri-Insurance Company, Ltd. (Agri), Alico-Agri, Ltd., Alico Plant World, LLC and Bowen
Brothers Fruit, LLC (Bowen) (collectively referred to as the Company) after elimination of all
significant intercompany balances and transactions.
The following Financial Statements have been prepared pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and note disclosures normally included in
annual financial statements prepared in accordance with United States generally accepted accounting
principles have been condensed or omitted pursuant to those rules and regulations. The Company
believes that the disclosures made are adequate to make the information not misleading.
The accompanying unaudited condensed consolidated financial statements have been prepared on a
basis consistent with the accounting principles and policies reflected in the Companys annual
report for the year ended August 31, 2007. 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
December 31, 2007, September 30, 2007 and August 31, 2007 and the consolidated results of
operations and cash flows for the quarters ended December 31, 2007 and 2006, and one month ended
September 30, 2007.
The Company is involved in 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 adjustments to revenue from the prior years crop totaling $53
thousand for the quarter ended December 31, 2007, and $(20) thousand for the quarter ended December
31, 2006.
The results of operations for the stated periods are not necessarily indicative of results to be
expected for the full year. Certain items from 2006 have been reclassified to conform to the 2007
presentation.
2. Real Estate:
Real estate sales are recorded under the accrual method of accounting. Under this method, a sale is
not recognized until certain criteria are met including whether the profit is determinable,
collectibility of the sales price is reasonably assured or the earnings process is complete.
Real estate project costs incurred for the acquisition, development and construction of real estate
projects are capitalized. Additionally, costs to market real estate are capitalized if they are
reasonably expected to be removed from the sale of the
project and have been performed to obtain regulatory approval for the sale. An allowance is
provided to reduce capitalized project costs to estimated realizable value.
7
During the fourth quarter of fiscal year 2006, the Company established a real estate department to
manage its real estate assets. Gains or losses resulting from real estate transactions entered
into before the establishment of the Companys real estate department, which have not been
substantially modified as defined by GAAP, have been recorded as non-operating items. Gains or
losses resulting from contracts substantially modified or initiated by the Companys real estate
department are classified as operating items.
Properties are tested for impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. Impairment losses are recognized when the carrying amount
of a property exceeds its fair value. Such events or changes in circumstances include significant
decreases in the market price of such properties; significant adverse changes in legal factors, the
business climate or the extent or manner in which the asset is being used; an accumulation of costs
significantly in excess of amounts originally expected for the property; continuing operating cash
flow losses associated with the property or an expectation that it is more likely than not that the
property will be sold or otherwise disposed of significantly before the end of its previously
estimated useful life. Impairment losses are measured as the amount by which the carrying amount
of a property exceeds its fair value.
3. Marketable Securities Available for Sale:
The Company has classified 100% of investments in marketable securities as available for sale and,
as such, the securities are carried at estimated fair value. Unrealized gains and losses determined
to be temporary are recorded as other comprehensive income, net of related deferred taxes, until
realized. Unrealized losses determined to be other than temporary are recognized in the period the
determination is made.
The cost and estimated fair value of marketable securities available for sale at December 31, 2007
and August 31, 2007 and September 30, 2007 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2007 |
|
|
August 31, 2007 |
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross |
|
|
Estimated |
|
|
|
|
|
|
Gross |
|
|
Estimated |
|
|
|
|
|
|
|
Unrealized |
|
|
Fair |
|
|
|
|
|
|
Unrealized |
|
|
Fair |
|
|
|
Cost |
|
|
Gains |
|
|
Losses |
|
|
Value |
|
|
Cost |
|
|
Gains |
|
|
Losses |
|
|
Value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Municipal bonds |
|
$ |
32,800 |
|
|
$ |
51 |
|
|
$ |
(1 |
) |
|
$ |
32,850 |
|
|
$ |
28,881 |
|
|
$ |
6 |
|
|
$ |
(10 |
) |
|
$ |
28,877 |
|
Mutual funds |
|
|
2,000 |
|
|
|
|
|
|
|
|
|
|
|
2,000 |
|
|
|
2,000 |
|
|
|
|
|
|
|
|
|
|
|
2,000 |
|
Fixed maturity funds |
|
|
11,759 |
|
|
|
16 |
|
|
|
(4 |
) |
|
|
11,771 |
|
|
|
12,656 |
|
|
|
55 |
|
|
|
(4 |
) |
|
|
12,707 |
|
Corporate bonds |
|
|
2,659 |
|
|
|
|
|
|
|
(5 |
) |
|
|
2,654 |
|
|
|
2,673 |
|
|
|
1 |
|
|
|
(16 |
) |
|
|
2,658 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketable
securities
available for sale |
|
$ |
49,218 |
|
|
$ |
67 |
|
|
$ |
(10 |
) |
|
$ |
49,275 |
|
|
$ |
46,210 |
|
|
$ |
62 |
|
|
$ |
(30 |
) |
|
$ |
46,242 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2007 |
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
Gross |
|
|
Estimated |
|
|
|
|
|
|
|
Unrealized |
|
|
Fair |
|
|
|
Cost |
|
|
Gains |
|
|
Losses |
|
|
Value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Municipal bonds |
|
$ |
29,213 |
|
|
$ |
23 |
|
|
$ |
(2 |
) |
|
$ |
29,234 |
|
Mutual funds |
|
|
2,000 |
|
|
|
|
|
|
|
|
|
|
|
2,000 |
|
Fixed maturity funds |
|
|
12,569 |
|
|
|
49 |
|
|
|
(2 |
) |
|
|
12,616 |
|
Corporate bonds |
|
|
2,670 |
|
|
|
|
|
|
|
(9 |
) |
|
|
2,661 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketable
securities
available for sale |
|
$ |
46,452 |
|
|
$ |
72 |
|
|
$ |
(13 |
) |
|
$ |
46,511 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The aggregate fair value of investments in debt instruments (net of mutual funds of $2,000) as of
December 31, 2007 and September 30, 2007 by contractual maturity date consisted of the following:
|
|
|
|
|
|
|
|
|
|
|
Aggregate Fair Value |
|
|
|
December 31, |
|
|
September 30, |
|
|
|
2007 |
|
|
2007 |
|
Due within 1 year |
|
$ |
37,863 |
|
|
$ |
31,093 |
|
Due between 1 and 2 years |
|
|
148 |
|
|
|
4,205 |
|
Due between 2 and 3 years |
|
|
221 |
|
|
|
219 |
|
Due between 3 and 4 years |
|
|
|
|
|
|
|
|
Due between 4 and 5 years |
|
|
1,200 |
|
|
|
1,512 |
|
Due beyond five years |
|
|
7,843 |
|
|
|
7,482 |
|
|
|
|
|
|
|
|
Total |
|
$ |
47,275 |
|
|
$ |
44,511 |
|
|
|
|
|
|
|
|
The following table shows the gross unrealized losses and fair value of the Companys investments
with unrealized losses that are not deemed to be other than temporarily impaired, aggregated by
investment category and length of time that individual securities have been in a continuous
unrealized loss position, at:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2007 |
|
|
|
Less than 12 months |
|
|
12 months or greater |
|
|
Total |
|
|
|
Fair |
|
|
Unrealized |
|
|
Fair |
|
|
Unrealized |
|
|
Fair |
|
|
Unrealized |
|
|
|
Value |
|
|
Losses |
|
|
Value |
|
|
Losses |
|
|
Value |
|
|
Losses |
|
Fixed maturity funds |
|
$ |
4,919 |
|
|
$ |
(3 |
) |
|
$ |
|
|
|
$ |
|
|
|
$ |
4,919 |
|
|
$ |
(3 |
) |
Corporate bonds |
|
|
|
|
|
|
|
|
|
|
2,654 |
|
|
|
(6 |
) |
|
|
2,654 |
|
|
|
(6 |
) |
Municipal Bonds |
|
|
1,617 |
|
|
|
(1 |
) |
|
|
|
|
|
|
|
|
|
|
1,617 |
|
|
|
(1 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
6,536 |
|
|
$ |
(4 |
) |
|
$ |
2,654 |
|
|
$ |
(6 |
) |
|
$ |
9,190 |
|
|
$ |
(10 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2007 |
|
|
|
Less than 12 months |
|
|
12 months or greater |
|
|
Total |
|
|
|
Fair |
|
|
Unrealized |
|
|
Fair |
|
|
Unrealized |
|
|
Fair |
|
|
Unrealized |
|
|
|
Value |
|
|
Losses |
|
|
Value |
|
|
Losses |
|
|
Value |
|
|
Losses |
|
Fixed maturity funds |
|
$ |
3,478 |
|
|
$ |
(2 |
) |
|
$ |
|
|
|
$ |
|
|
|
$ |
3,478 |
|
|
$ |
(2 |
) |
Corporate bonds |
|
|
|
|
|
|
|
|
|
|
2,661 |
|
|
|
(9 |
) |
|
|
2,661 |
|
|
|
(9 |
) |
Municipal Bonds |
|
|
5,475 |
|
|
|
(2 |
) |
|
|
|
|
|
|
|
|
|
|
5,475 |
|
|
|
(2 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
8,953 |
|
|
$ |
(4 |
) |
|
$ |
2,661 |
|
|
$ |
(9 |
) |
|
$ |
11,614 |
|
|
$ |
(13 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized gain on the sale of securities for the three months ended December 31, 2007 and 2006
and one month ended September 30, 2007 were $0, ($35 thousand) and $0, respectively.
Debt instruments and funds. The unrealized losses on fixed maturity funds, corporate bonds and
municipal bonds were primarily due to changes in interest rates. At December 31, 2007 the Company
held loss positions in 33 debt instruments. Because the decline in market values of these
securities is attributable to changes in interest rates and not credit quality and because the
Company has the ability and intent to hold these investments until a recovery of fair value, which
may be maturity, the Company does not believe any of the unrealized losses represent other than
temporary impairment based on the evaluation of available evidence as of December 31, 2007.
4. Mortgages and notes receivable:
The balances of the Companys mortgages and notes receivable were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, |
|
|
September 30, |
|
|
|
|
|
|
2007 |
|
|
2007 |
|
|
August 31, |
|
|
|
(unaudited) |
|
|
(unaudited) |
|
|
2007 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage notes receivable on
retail land sales |
|
$ |
271 |
|
|
$ |
299 |
|
|
$ |
311 |
|
Mortgage notes receivable on bulk
land sales |
|
|
65,518 |
|
|
|
65,963 |
|
|
|
65,963 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total mortgage and notes receivable |
|
|
65,789 |
|
|
|
66,262 |
|
|
|
66,274 |
|
Less: Deferred revenue |
|
|
(57,034 |
) |
|
|
(53,253 |
) |
|
|
(53,254 |
) |
Discount on notes to
impute market interest |
|
|
(305 |
) |
|
|
(2,489 |
) |
|
|
(2,594 |
) |
Current portion |
|
|
(3,387 |
) |
|
|
(3,832 |
) |
|
|
(487 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current portion |
|
$ |
5,063 |
|
|
$ |
6,688 |
|
|
$ |
9,939 |
|
|
|
|
|
|
|
|
|
|
|
Mortgage
notes receivable related to retail land sales are generated from the sale of lots by the Companys
Alico Land Development subsidiary. Mortgage notes related to bulk land sales were generated by the
sale of the Companys Lee County properties. Real estate sales are recorded under the accrual
method of accounting. Gains from commercial or bulk land sales are not recognized until payments
received for property to be developed within two years after the sale equal 20% or property to be
developed after two years equal 25% of the contract sales price according to the installment sales
method.
Profits from commercial real estate sales are discounted to reflect the market rate of interest
when the stated rate of the mortgage note is less than the market rate. The recorded imputed
interest discounts are realized as the balances due are collected. In the event of early
liquidation, interest is recognized on the simple interest method.
10
In July 2005, the Companys Alico-Agri subsidiary sold property in Lee County, Florida for $62.9
million. At the time of the sale, the Company received a down payment of $6.2 million and a 2.5%
interest bearing mortgage note of $56.6 million in exchange for the land sold. Because the down
payment did not meet the thresholds for full gain recognition, a deferred revenue account was
established as an offset to the carrying amount of the note. Additionally, because the stated
interest rate of the note was below market rates at the date of inception, a note discount was
recorded. In December 2006, the Company restructured the contract and received $3.8 million upon
execution. The major provisions of the restructuring were the extension of the principal payments
and an increase in the interest rate to 4.0% annually, causing readjustment of the note discount.
Under the terms of the renegotiated contract, $3.8 million of the closing proceeds were subtracted
from the existing mortgage receivable principal of $56.6 million and accrued interest of $1.7
million was added back to the mortgage receivable as additional principal. Four annual principal
plus interest payments of the remaining $54.5 million mortgage were scheduled to commence with a
payment of $13.6 million on September 28, 2007.
The Company again restructured the contract in October of 2007. Major provisions of the
renegotiation included a reduction of the scheduled principal payments due in September of 2008 and
2009; an increased interest rate based on LIBOR plus a percentage to be applied forward from July
2005; and quarterly interest payments equal to the applicable quarterly interest rate as described
above on the outstanding principal balance for the term of the note. Further provisions include
increased flexibility of the Company to receive lots in the event of default. The Company received
a payment of $6.8 million related to the renegotiated contract consisting of $0.4 million of
principal, $6.1 million of interest and the balance as an expense reimbursement. As a result of
the changed interest terms from the October 2007 restructure, the note discount was eliminated.
In December 2006, the Company sold property in Lee County, Florida for $12.0 million. The Company
recognized revenue of $0.6 million and recorded a mortgage note receivable for $11.4 million and
deferred revenue of $10.2 million. The mortgage note receivable, which accrues interest at the
rate of 6% annually, was discounted by $0.3 million to adjust for the current market rate of
interest. Interest only will be collected annually for the first four years, followed by four
equal annual payments of principal and interest.
5. Inventories:
A summary of the Companys inventories is shown below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, |
|
|
September 30, |
|
|
|
|
|
|
2007 |
|
|
2007 |
|
|
August 31, |
|
|
|
(unaudited) |
|
|
(unaudited) |
|
|
2007 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unharvested fruit crop on trees |
|
$ |
13,866 |
|
|
$ |
12,982 |
|
|
$ |
12,177 |
|
Unharvested sugarcane |
|
|
4,401 |
|
|
|
5,410 |
|
|
|
4,922 |
|
Beef cattle |
|
|
6,676 |
|
|
|
5,757 |
|
|
|
5,429 |
|
Unharvested sod |
|
|
1,540 |
|
|
|
1,476 |
|
|
|
1,449 |
|
Plants and vegetables |
|
|
1,746 |
|
|
|
1,484 |
|
|
|
1,086 |
|
Rock, fill and other |
|
|
72 |
|
|
|
123 |
|
|
|
151 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total inventories |
|
$ |
28,301 |
|
|
$ |
27,232 |
|
|
$ |
25,214 |
|
|
|
|
|
|
|
|
|
|
|
The Company records its inventory at the lower of cost or net realizable value. At December 31,
2007, the Company adjusted its cattle inventory down by $256 thousand due to changing market
conditions and reduced its vegetable inventory by $188 thousand due to damage from heavy rains. At
December 31, 2006, the Company wrote down sugarcane inventory by $338 thousand and vegetable
inventory by $216 thousand. The adjustments were included as costs of sales in the period of
adjustment.
11
6. Income taxes:
The provision for income taxes for the three months ended December 31, 2007 and 2006 and one month
ended September 30, 2007 is summarized as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended December 31, |
|
|
One month ended |
|
|
|
(unaudited) |
|
|
September 30, |
|
|
|
2007 |
|
|
2006 |
|
|
2007 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current: |
|
|
|
|
|
|
|
|
|
|
|
|
Federal income tax |
|
$ |
1,202 |
|
|
$ |
993 |
|
|
$ |
16 |
|
State income tax |
|
|
257 |
|
|
|
170 |
|
|
|
12 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,459 |
|
|
|
1,163 |
|
|
|
28 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred: |
|
|
|
|
|
|
|
|
|
|
|
|
Federal income tax |
|
|
(24 |
) |
|
|
701 |
|
|
|
(194 |
) |
State income tax |
|
|
63 |
|
|
|
75 |
|
|
|
25 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
39 |
|
|
|
776 |
|
|
|
(169 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total provision for income taxes |
|
$ |
1,498 |
|
|
$ |
1,939 |
|
|
$ |
(141 |
) |
|
|
|
|
|
|
|
|
|
|
The Internal Revenue Service (IRS) issued a thirty day letter dated August 14, 2006 pertaining
to audits of Alico for the tax years 2000 through 2004. In the thirty day letter, the IRS proposed
several alternative theories as a basis for its argument that Alico should have reported additional
taxable income in the years under audit. These theories principally related to the formation and
capitalization of the Companys Agri Insurance subsidiary and its tax exempt status during the
years under audit. The Company has been working with IRS appeals to resolve the case and has
reached a tentative agreement for the payment of federal taxes, penalties and interest of
approximately $66.2 million. In order to cease additional interest from accruing on this
liability, the Company has paid $66.2 million to the IRS from its revolving credit line. Based on
the contemplated settlement, the Company estimated additional state taxes and interest of
approximately $10.3 million at December 31, 2007 which will be due and payable when the IRS audit
is concluded. Further details regarding the settlement, including the future of Agri, are in
ongoing negotiations with the IRS and a proposed closing document has been prepared by the
Companys tax counsel and provided to IRS Appeals for review. The Company expects full resolution
of this matter by the end of March 2008; however, the Company has executed statute extensions with
the IRS for the tax returns affected until December 31, 2008.
Alico capitalized Agri by contributing real estate located in Lee County Florida. The real estate
was transferred at its historical cost basis. As the Lee County real estate was sold, substantial
gains were generated in Agri, creating differences between amounts recorded on Agris books and the
related tax returns. For property transferred to Agri but not sold during the years under audit,
the historical tax basis will be stepped-up to the fair market value of the property at the time of
transfer. The Company has estimated the amount of basis step-up based on discussions with the IRS
and classified the step ups resulting from the transfer of property not sold as of August 31, 2004
based on their estimated tax benefits as a deferred tax asset at August 31, 2007. Should the
actual outcome of the IRS settlement differ from the estimated amounts, the deferred taxes related
to the basis step-ups could fluctuate from the amounts recorded.
Since January 1, 2004 Agri has been filing as a taxable entity. This change in tax status resulted
from changes in the Internal Revenue Code.
The Company adopted the provisions of Financial Accounting Standards Board (FASB)
Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an Interpretation of FASB
Statement No. 109 (Interpretation No. 48), on October 1, 2007. Among other things, FIN 48
requires application of a more likely than not threshold to the recognition and derecognition of
tax positions. It further requires that a change in judgment related to prior years tax positions
be recognized in the quarter of such change.
At October 1, 2007, the Company had $441,000 of potential tax exposure related to uncertain tax
positions, which was recorded as a one time adjustment to retained earnings. All of this amount would, if recognized, affect the effective tax rate. The Company
recognizes interest and penalties related to uncertain tax positions in income tax expense and
classifies such interest and penalties in the liability for uncertain tax positions. Interest and
penalties accrued as of the date of adoption are approximately $57,000. As of December 31, 2007,
the Company had approximately $73,000 accrued for the payment of interest and penalties related to
uncertain tax positions.
12
The U.S. Internal Revenue Agency is currently examining the returns of Alico and related entities
for tax years 2000 through 2004. The statute of limitations for those years has been extended as
part of that examination. Additionally, the tax years ended August 31, 2005 and August 31, 2006
remain open to examination. The state income tax returns have not been audited and are subject to
audit for the same tax periods open for federal tax purposes. We believe that the unrecognized tax
liabilities currently recorded will change significantly within 12 months of the report date due to
the filing of amended returns. The unrecognized tax liabilities could decrease by $450,000 (due to
payment) within the next 12 months.
Pursuant to recent Securities Exchange Commission guidance, the Company has not provided the
tabular reconciliation disclosures required by FIN 48. The Company will provide all required FIN 48
disclosures in its 2008 Annual Report on Form 10-K.
7. Indebtedness:
Alico, Inc. has a Credit Facility with Farm Credit of Southwest Florida that provides a $175.0
million revolving line of credit which matures on August 1, 2010. Funds from the Credit Facility
may be used for general corporate purposes including: (i) the normal operating needs of the Company
and its operating divisions, (ii) the purchase of capital assets and (iii) the payment of
dividends. The Credit Facility also allows for an annual extension at the lenders option.
The Credit Facility contains numerous restrictive covenants described more fully in the Companys
annual report on Form 10-K. In the opinion of Management, the Company was in compliance with all
of the covenants and provisions of the amended Credit Facility at December 31, 2007.
The Companys Chief Executive Officer, John R. Alexander, is a member of the Board of Directors of
the Companys primary lender, Farm Credit of Southwest Florida. Mr. Alexander abstains from voting
on matters that directly affect the Company.
The following table reflects outstanding debt under the Companys various loan agreements:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal Balance |
|
|
|
|
|
|
|
|
|
December 31, |
|
|
September 30, |
|
|
August 31, |
|
|
Interest |
|
|
|
|
|
|
2007 |
|
|
2007 |
|
|
2007 |
|
|
Rate |
|
|
Collateral |
|
a) Revolving Credit
Facility |
|
$ |
137,319 |
|
|
$ |
127,519 |
|
|
$ |
128,419 |
|
|
Libor +1.50 |
% |
|
Real estate |
b) Mortgage note payable |
|
|
7,917 |
|
|
|
8,234 |
|
|
|
8,339 |
|
|
|
6.68 |
% |
|
Real estate |
c) Mortgage note payable |
|
|
52 |
|
|
|
52 |
|
|
|
52 |
|
|
|
7.00 |
% |
|
Real estate |
d) Vehicle financing |
|
|
72 |
|
|
|
79 |
|
|
|
79 |
|
|
|
0%-2.90 |
% |
|
3 Vehicles |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
145,360 |
|
|
$ |
135,884 |
|
|
$ |
136,889 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
a) |
|
Terms described above; Additional credit available at December 31, 2007 was $37,681. |
|
b) |
|
First mortgage on 7,680 acres of cane, citrus, pasture and improvements in Hendry
County, Florida with commercial lender. Monthly principal payments of $106 thousand
plus accrued interest. |
|
c) |
|
First mortgage on a parcel of land in Polk County, Florida with private seller. Annual
equal payments of $55 thousand. |
|
d) |
|
3-5 year term loans. Monthly principal payments plus interest. |
|
e) |
|
The LIBOR rate was 4.88%, 5.50% and 5.63% at December 31, 2007, September 30, 2007
and August 31, 2007, respectively. |
13
Maturities of the Companys debt at December 31, 2007, September 30, 2007, and August 31, were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, |
|
|
September 30, |
|
|
August 31, |
|
|
|
2007 |
|
|
2007 |
|
|
2007 |
Due within 1 year |
|
$ |
1,349 |
|
|
$ |
1,350 |
|
|
|
1,350 |
|
Due between 1 and 2 years |
|
|
1,293 |
|
|
|
1,297 |
|
|
|
1,298 |
|
Due between 2 and 3 years |
|
|
138,592 |
|
|
|
128,794 |
|
|
|
129,695 |
|
Due between 3 and 4 years |
|
|
1,274 |
|
|
|
1,273 |
|
|
|
1,273 |
|
Due between 4 and 5 years |
|
|
1,269 |
|
|
|
1,270 |
|
|
|
1,269 |
|
Due beyond five years |
|
|
1,583 |
|
|
|
1,900 |
|
|
|
2,004 |
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
145,360 |
|
|
$ |
135,884 |
|
|
$ |
136,889 |
|
|
|
|
|
|
|
|
|
|
|
Interest costs expensed and capitalized to property, buildings and equipment were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
One month ended |
|
|
|
December 31, |
|
|
September 30, |
|
|
|
2007 |
|
|
2006 |
|
|
2007 |
|
|
|
(unaudited) |
|
|
(unaudited) |
|
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
$ |
2,466 |
|
|
$ |
1,261 |
|
|
$ |
820 |
|
Interest capitalized |
|
|
12 |
|
|
|
13 |
|
|
|
5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest cost |
|
$ |
2,478 |
|
|
$ |
1,274 |
|
|
$ |
825 |
|
|
|
|
|
|
|
|
|
|
|
As an agricultural credit cooperative, Farm Credit of Southwest Florida is owned by the member-borrowers who purchase
stock/participation certificates in the cooperative. Allocations of patronage are made to members on an annual basis
according to the proportionate amount of interest paid by the member. Allocations are made in cash and non cash
participation certificates. The Company has recorded the cash allocations as received as a reduction of interest
expense. Non cash patronage receivables of $854 thousand have been included as other income in the accompanying
condensed consolidated statements of operations for the three months ended December 31, 2007. Such amounts relate to
cumulative non cash allocations which are considered by management to have both a qualitatively and quantitatively
immaterial effect on any prior period.
8. Dividends:
At its meeting on September 28, 2007 the Board of Directors declared a quarterly dividend of $0.275
per share payable to stockholders of record as of December 29, 2007 that was paid on January 15,
2008. At its meeting on January 18, 2008, the Board of Directors declared a quarterly dividend of
$0.275 per share payable to stockholders of record as of April 30, 2008 with payment expected on or
around
May 16, 2008.
9. Disclosures about reportable segments:
The Company has four reportable segments: Bowen, Citrus Groves, Sugarcane and Cattle. Bowen
provides harvesting and marketing services for citrus producers including Alicos Citrus Grove
division. Additionally, Bowen purchases citrus fruit and resells the fruit to citrus processors and fresh
packing facilities. The Citrus Groves segment produces citrus fruit for sale to citrus processors
and fresh packing facilities. The Sugarcane segment produces sugarcane for delivery to the sugar
mill and refinery. The Cattle division raises beef cattle for sale to western feedlots and meat
packing facilities. The goods and services produced by these segments are sold to wholesalers and
processors in the United States who prepare the products for consumption. The Companys operations
are located in Florida.
14
Although the Companys Real Estate, Plant World, Vegetable and Sod segments do not meet the
quantitative thresholds to be considered as reportable segments, information about these segments
has been included in the schedules below. For a description of the business activities of the
Plant World, Vegetables and Sod segments please refer to Item 1 of the Companys annual report on
Form 10-K for the year ended August 31, 2007.
The accounting policies of all of the segments are the same as those described in the summary of
significant accounting policies in the Companys annual report on Form 10-K for the year ended
August 31, 2007. The Company evaluates performance based on direct margins from operations before
general and administrative costs and income taxes not including nonrecurring gains and losses.
The Company accounts for intersegment sales and transfers as if the sales or transfers were to
third parties; that is, at the then current market prices.
The Companys reportable segments are strategic business units that offer different products. They
are managed separately because each business requires different knowledge, skills and marketing
strategies.
Information concerning the various segments of the Company as of and for the three months ended
December 31, 2007 and 2006 and one month ended September 30, 2007 are summarized on the following
page:
15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
One month ended |
|
|
|
December 31, |
|
|
September 30, |
|
|
|
2007 |
|
|
2006 |
|
|
2007 |
|
Revenues (from external customers except as noted) |
|
|
|
|
|
|
|
|
|
|
|
|
Bowen |
|
$ |
7,815 |
|
|
$ |
7,633 |
|
|
$ |
143 |
|
Intersegment fruit sales through Bowen |
|
|
1,264 |
|
|
|
804 |
|
|
|
|
|
Citrus groves |
|
|
4,665 |
|
|
|
6,172 |
|
|
|
5 |
|
Sugarcane |
|
|
3,221 |
|
|
|
3,738 |
|
|
|
|
|
Cattle |
|
|
486 |
|
|
|
3,653 |
|
|
|
330 |
|
Real Estate |
|
|
3,869 |
|
|
|
2,447 |
|
|
|
|
|
Alico Plant World |
|
|
902 |
|
|
|
749 |
|
|
|
419 |
|
Vegetables |
|
|
1,724 |
|
|
|
1,117 |
|
|
|
|
|
Sod |
|
|
196 |
|
|
|
349 |
|
|
|
92 |
|
|
|
|
|
|
|
|
|
|
|
Revenue from segments |
|
|
24,142 |
|
|
|
26,662 |
|
|
|
989 |
|
Other operations |
|
|
676 |
|
|
|
670 |
|
|
|
188 |
|
Less: intersegment revenues eliminated |
|
|
(1,264 |
) |
|
|
(804 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating revenue |
|
$ |
23,554 |
|
|
$ |
26,528 |
|
|
$ |
1,177 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Bowen |
|
$ |
7,712 |
|
|
$ |
7,424 |
|
|
$ |
222 |
|
Intersegment fruit sold through Bowen |
|
|
1,264 |
|
|
|
804 |
|
|
|
|
|
Citrus groves |
|
|
3,845 |
|
|
|
3,708 |
|
|
|
3 |
|
Sugarcane |
|
|
3,251 |
|
|
|
4,144 |
|
|
|
|
|
Cattle |
|
|
858 |
|
|
|
3,035 |
|
|
|
289 |
|
Real Estate |
|
|
891 |
|
|
|
240 |
|
|
|
59 |
|
Alico Plant World |
|
|
833 |
|
|
|
491 |
|
|
|
190 |
|
Vegetables |
|
|
1,400 |
|
|
|
1,216 |
|
|
|
|
|
Sod |
|
|
316 |
|
|
|
202 |
|
|
|
208 |
|
|
|
|
|
|
|
|
|
|
|
Segment operating expenses |
|
|
20,370 |
|
|
|
21,264 |
|
|
|
971 |
|
Other operations |
|
|
108 |
|
|
|
113 |
|
|
|
46 |
|
Less: intersegment expenses eliminated |
|
|
(1,264 |
) |
|
|
(804 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses |
|
$ |
19,214 |
|
|
$ |
20,573 |
|
|
$ |
1,017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
Bowen Brothers Fruit |
|
$ |
103 |
|
|
$ |
209 |
|
|
$ |
(79 |
) |
Citrus groves |
|
|
820 |
|
|
|
2,464 |
|
|
|
2 |
|
Sugarcane |
|
|
(30 |
) |
|
|
(406 |
) |
|
|
|
|
Cattle |
|
|
(372 |
) |
|
|
618 |
|
|
|
41 |
|
Real Estate |
|
|
2,978 |
|
|
|
2,207 |
|
|
|
(59 |
) |
Alico Plant World |
|
|
69 |
|
|
|
258 |
|
|
|
229 |
|
Vegetables |
|
|
324 |
|
|
|
(99 |
) |
|
|
|
|
Sod |
|
|
(120 |
) |
|
|
147 |
|
|
|
(116 |
) |
|
|
|
|
|
|
|
|
|
|
Gross profit from segments |
|
|
3,772 |
|
|
|
5,398 |
|
|
|
18 |
|
Other |
|
|
568 |
|
|
|
557 |
|
|
|
142 |
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
$ |
4,340 |
|
|
$ |
5,955 |
|
|
$ |
160 |
|
|
|
|
|
|
|
|
|
|
|
16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
One month ended |
|
|
|
December 31, |
|
|
September 30, |
|
|
|
2007 |
|
|
2006 |
|
|
2007 |
|
Depreciation, depletion and amortization: |
|
|
|
|
|
|
|
|
|
|
|
|
Bowen Brothers Fruit |
|
$ |
62 |
|
|
$ |
68 |
|
|
$ |
21 |
|
Citrus Groves |
|
|
556 |
|
|
|
606 |
|
|
|
188 |
|
Sugarcane |
|
|
518 |
|
|
|
517 |
|
|
|
171 |
|
Cattle |
|
|
398 |
|
|
|
487 |
|
|
|
134 |
|
Alico Plant World |
|
|
162 |
|
|
|
163 |
|
|
|
53 |
|
Vegetables |
|
|
30 |
|
|
|
13 |
|
|
|
12 |
|
Sod |
|
|
54 |
|
|
|
48 |
|
|
|
18 |
|
|
|
|
|
|
|
|
|
|
|
Total segment depreciation and amortization |
|
|
1,780 |
|
|
|
1,902 |
|
|
|
597 |
|
Other depreciation, depletion and amortization |
|
|
241 |
|
|
|
214 |
|
|
|
78 |
|
|
|
|
|
|
|
|
|
|
|
Total depreciation, depletion and amortization |
|
$ |
2,021 |
|
|
$ |
2,116 |
|
|
$ |
675 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, |
|
|
September 30, |
|
|
|
|
|
|
2007 |
|
|
2007 |
|
|
August 31, |
|
|
|
(unaudited) |
|
|
(unaudited) |
|
|
2007 |
|
Total Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
Bowen Brothers Fruit |
|
$ |
6,171 |
|
|
$ |
2,891 |
|
|
$ |
3,042 |
|
Citrus groves |
|
|
55,641 |
|
|
|
53,339 |
|
|
|
54,558 |
|
Sugarcane |
|
|
43,728 |
|
|
|
45,128 |
|
|
|
46,053 |
|
Cattle |
|
|
21,756 |
|
|
|
20,837 |
|
|
|
20,813 |
|
Alico Plant World |
|
|
7,525 |
|
|
|
6,862 |
|
|
|
6,711 |
|
Vegetables |
|
|
4,574 |
|
|
|
3,238 |
|
|
|
2,766 |
|
Sod |
|
|
5,432 |
|
|
|
5,400 |
|
|
|
5,362 |
|
|
|
|
|
|
|
|
|
|
|
Segment assets |
|
|
144,827 |
|
|
|
137,695 |
|
|
|
139,305 |
|
Other Corporate assets |
|
|
147,304 |
|
|
|
141,639 |
|
|
|
141,582 |
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
292,131 |
|
|
$ |
279,334 |
|
|
$ |
280,887 |
|
|
|
|
|
|
|
|
|
|
|
10. Stock Compensation Plans:
The Board of Directors of the Company may grant options, stock appreciation rights, and/or
restricted stock to certain directors and employees. No stock options were granted during fiscal
year 2007, the three months ended December 31, 2007, or the one month ended September 30, 2007.
The Company measures the cost of employee services received in exchange for an award of equity
instruments based on the grant-date fair value of the award. The cost is recognized over the
period during which an employee is required to provide service in exchange for the award (usually
the vesting period). If an equity award is modified after the grant date, incremental compensation
cost will be recognized in an amount equal to the excess of the fair value of the modified award
over the fair value of the original award immediately before the modification.
At December 31, 2007, September 30, 2007 and August 31, 2007, there were 7,158, 8,158 and 8,158,
options respectively, fully vested and exercisable and 273,815 shares available for grant. The
options outstanding had a fair value of $133 thousand, $208 thousand, and $271 thousand at December
31, 2007, September 30, 2007 and August 31, 2007, respectively. There was no unrecognized
compensation expense related to outstanding stock option grants at August 31, 2007, September 30,
2007 or December 31, 2007.
17
In fiscal year 2006, the Company began granting restricted shares to certain key employees as long
term incentives. The restricted shares vest in accordance with the table and description outlined
below. The payment of each installment is subject to continued employment with the Company. At
December 31, 2007, September 30, 2007 and August 31, 2007 there were 8,000 restricted shares vested
in accordance with these grants.
The table below summarizes the Companys restricted share awards granted to date:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation |
|
|
Compensation |
|
|
Weighted |
|
|
|
|
|
|
|
|
|
|
|
Expense Recognized |
|
|
Expense Recognized |
|
|
Average |
|
|
|
|
|
|
|
|
|
|
|
for the |
|
|
for the |
|
|
Grant date |
|
|
|
|
|
|
|
Fair Market Value |
|
|
three months ended |
|
|
one month ended |
|
|
Fair value |
|
Grant Date |
|
Shares Granted |
|
|
on Date of Grant |
|
|
December 31, 2007 |
|
|
September 30, 2007 |
|
|
Per share |
|
April 2006 |
|
|
20,000 |
|
|
$ |
908 |
|
|
$ |
43 |
|
|
|
14 |
|
|
|
|
|
October 2006 |
|
|
20,000 |
|
|
|
1,239 |
|
|
|
67 |
|
|
|
22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
40,000 |
|
|
$ |
2,147 |
|
|
$ |
110 |
|
|
$ |
36 |
|
|
$ |
53.68 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The shares granted in April 2006 vest 25% in April 2010 and 25% annually thereafter until fully
vested. Four thousand of the shares granted in October 2006 related to past service and were
immediately vested and an additional 4,000 shares vested August 31, 2007. The remaining shares
granted in October 2006 vest 33% effective August 31, 2008 and 33% annually thereafter until fully
vested. The Company is recognizing compensation cost equal to the fair market value of the stock
at the grant dates prorated over the vesting period of each award. The fair value of the unvested
restricted stock awards at December 31, 2007 was $1.2 million and will be recognized over a
weighted average period of 6 years.
During November 2007, the CEO and COO elected to receive a portion of their annual incentive bonus
in Company stock. The CEO chose to receive 4,000 shares at a value of $177 thousand, while the COO
chose to receive 500 shares at a value of $22 thousand. These shares do not contain any
restrictions, but were issued under the Companys Incentive Equity Plan. Compensation expense for
these awards was accrued and recognized during the fourth quarter of the Companys fiscal 2007
year.
11. Other Comprehensive Income:
Other comprehensive income, arising from market fluctuations in the Companys securities portfolio,
was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months ended |
|
|
For the one month ended |
|
|
|
December 31, |
|
|
September 30, |
|
|
|
2007 |
|
|
2006 |
|
|
2007 |
|
Accumulated Other Comprehensive Income
(loss) at beginning of period |
|
$ |
49 |
|
|
$ |
(29 |
) |
|
$ |
45 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change resulting from market
fluctuations,
net of tax, and realized gains and losses |
|
|
(13 |
) |
|
|
40 |
|
|
|
4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated Other Comprehensive Income |
|
$ |
36 |
|
|
$ |
11 |
|
|
$ |
49 |
|
|
|
|
|
|
|
|
|
|
|
12. New Accounting Pronouncements:
In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements. SFAS No. 157 defines
fair value, establishes a framework for measuring fair value in generally accepted accounting
principles and expands disclosures about fair value measurements. SFAS No. 157 applies under other
accounting
pronouncements that require or permit fair value measurements. The Company is required
to adopt SFAS No. 157 effective at the beginning of fiscal year 2009. The Company does not expect
the adoption of SFAS 157 to have a material impact on its financial statements.
18
In February 2007, the FASB issued FASB Statement No. 159 (FAS 159), The Fair Value Option for
Financial Assets and Financial LiabilitiesIncluding an Amendment of FASB Statement No. 115,
which provides companies the irrevocable option to measure many financial assets and liabilities at
fair value with the changes in fair value recognized in earnings. SFAS No. 159 will be effective
for fiscal year 2009. The Company does not expect the adoption of
SFAS 159 to have a material
impact on its financial statements.
13. Treasury Stock
The Companys Board of Directors has authorized the repurchase of up to 131,000 shares of the
Companys common stock through August 31, 2010, for the purpose of funding restricted stock grants under its 1998 Incentive Equity Plan in order to
provide restricted stock to eligible Directors and Senior Managers and align their interests with
those of the Companys shareholders.
The stock repurchases began in November 2005 and will be made on a quarterly basis until August 31,
2010 through open market transactions, at times and in such amounts as the Companys broker
determines subject to the provisions of a 10b5-1 Plan which the Company has adopted for such
purchases. The timing and actual number of shares repurchased will depend on a variety of factors
including price, corporate and regulatory requirements and other market conditions. All purchases
will be made subject to restrictions of Rule 10b-18 relating to volume, price and timing so as to
minimize the impact of the purchases upon the market for the Companys shares. The Company does not
anticipate that any purchases under the Plan will be made from any officer, director or control
person. There are currently no arrangements with any person for the purchase of the shares. In
accordance with the approved plans, the Company may purchase an additional 75,230 shares. The
Company purchased 12,000 shares in the open market during the first quarter of fiscal year 2008 at
an average price of $43.98 per share.
The following table provides information relating to purchases of the Companys common shares by
the Company on the open market pursuant to the aforementioned plans for the quarter ended December
31, 2007 (no treasury purchases occurred during the month ended September 30, 2007):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total shares |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
purchased as |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
part of publicly |
|
|
Total dollar value |
|
|
|
Total number of |
|
|
Average price |
|
|
announced plans |
|
|
of shares purchased |
|
Date |
|
shares purchased |
|
|
paid per share |
|
|
or programs |
|
|
(thousands) |
|
11/20/2007 |
|
|
2,500 |
|
|
$ |
44.23 |
|
|
|
2,500 |
|
|
$ |
112 |
|
11/21/2007 |
|
|
2,500 |
|
|
|
43.64 |
|
|
|
2,500 |
|
|
|
110 |
|
11/26/2007 |
|
|
2,500 |
|
|
|
42.92 |
|
|
|
2,500 |
|
|
|
108 |
|
11/27/2007 |
|
|
2,000 |
|
|
|
42.52 |
|
|
|
2,000 |
|
|
|
86 |
|
11/28/2007 |
|
|
2,500 |
|
|
|
44.29 |
|
|
|
2,500 |
|
|
|
112 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
12,000 |
|
|
$ |
43.98 |
|
|
|
12,000 |
|
|
$ |
528 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19
14. Transition Period Financial Information:
On September 28, 2007, the Companys fiscal year end was changed from August 31 to September 30.
Accordingly, the Company is presenting unaudited financial statements for the one month transition
period ended September 30, 2007. The following table provides certain unaudited comparative
financial information of the same period of the prior year.
|
|
|
|
|
|
|
|
|
|
|
One Month Ended |
|
|
|
September 30, |
|
|
September 30, |
|
(In thousands, except per share data) |
|
2007 |
|
|
2006 |
|
Statement of operations data: |
|
|
|
|
|
|
|
|
Operating revenue |
|
$ |
1,177 |
|
|
$ |
1,682 |
|
Operating and general and administrative expenses |
|
|
1,867 |
|
|
|
2,499 |
|
|
|
|
|
|
|
|
Earnings (loss) from operations |
|
|
(690 |
) |
|
|
(817 |
) |
Other earnings (loss) |
|
|
(131 |
) |
|
|
101 |
|
Income taxes (benefit) |
|
|
(141 |
) |
|
|
(341 |
) |
|
|
|
|
|
|
|
Net earnings (loss) |
|
$ |
(680 |
) |
|
$ |
(375 |
) |
|
|
|
|
|
|
|
Earnings (loss) per share: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.09 |
) |
|
$ |
(0.05 |
) |
Diluted |
|
$ |
(0.09 |
) |
|
$ |
(0.05 |
) |
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
|
September 30, |
|
|
|
2007 |
|
|
2006 |
|
Balance sheet data: |
|
|
|
|
|
|
|
|
Current assets |
|
$ |
129,402 |
|
|
$ |
110,029 |
|
Total assets |
|
|
279,334 |
|
|
|
261,761 |
|
Current liabilities |
|
|
19,442 |
|
|
|
16,950 |
|
Other liabilities |
|
|
143,897 |
|
|
|
104,035 |
|
Stockholders equity |
|
$ |
115,995 |
|
|
$ |
140,776 |
|
20
ITEM 2.
Managements Discussion and Analysis of Financial Condition and Results of Operations.
Cautionary Statement
Some of the statements in this document include statements about future expectations. Statements
that are not historical facts are forward-looking statements for the purpose of the safe harbor
provided by Section 21E of the Exchange Act and Section 27A of the Securities Act. These
forward-looking statements, which include references to one or more potential transactions,
expectation of results and strategic alternatives under consideration are predictive in nature or
depend upon or refer to future events or conditions, are subject to known, as well as unknown risks
and uncertainties that may cause actual results to differ materially from Company expectations.
There can be no assurance that any future transactions will occur or be structured in the manner
suggested or that any such transaction will be completed. The Company undertakes no obligation to
update publicly any forward-looking statements, whether as a result of future events, new
information or otherwise.
When used in this document, or in the documents incorporated by reference herein, the words
anticipate, believe, estimate, may, intend, expect, should, could and other words
of similar meaning, are likely to address the Companys growth strategy, financial results and/or
product development programs. Actual results, performance or achievements could differ materially
from those contemplated, expressed or implied by the forward-looking statements contained herein.
The considerations listed herein represent certain important factors the Company believes could
cause such results to differ. These considerations are not intended to represent a complete list of
the general or specific risks that may affect the Company. It should be recognized that other
risks, including general economic factors and expansion strategies, may be significant, presently
or in the future, and the risks set forth herein may affect the Company to a greater or lesser
extent than indicated.
Change in fiscal year
On September 28, 2007, the Board of Directors of the Company approved a change in the Companys
fiscal year end from August 31 to September 30. The fiscal year change is effective beginning with
the Companys 2008 fiscal year. The Companys 2008 fiscal year began on October 1, 2007 and will
end September 30, 2008, resulting in a one month transition period that began September 1, 2007 and
ended September 30, 2007. This Form 10Q includes the
unaudited results for the quarters ended
December 31, 2007 and 2006, and the unaudited results for the one month ended September 30, 2007.
The Company has also included selected unaudited results for the one month ended September 30, 2006
for comparative purposes in Note 14. The audited results for the one month ended September 30,
2007 will be included separately in the Companys Annual Report on Form 10K for the fiscal year
ending September 30, 2008.
LIQUIDITY AND CAPITAL RESOURCES:
Liquidity and Capital Resources
Working capital increased to $123.4 million at December 31, 2007 from $109.7 million at August 31,
2007. As of December 31, 2007, the Company had cash and cash equivalents of $39.8 million compared
to $34.8 million at August 31, 2007. Marketable securities increased to $49.3 million from $46.2
million during the same period. The ratio of current assets to current liabilities decreased to
7.21 to 1 at December 31, 2007 from 7.26 to 1 at August 31, 2007. Total assets increased by $11.2
million to $292.1 million at December 31, 2007, compared to $280.9 million at August 31, 2007.
21
Management believes the Company will be able to meet its working capital requirements for the
foreseeable future with internally generated funds. Management expects continued profitability
from the Companys operations. In addition, the Company has credit commitments to provide for
revolving credit of up to $175.0 million of which $37.7 million
was available for the Companys general use at December 31, 2007.
Cash outlays for land, equipment, buildings, and other improvements totaled $2.1 million during the
three months ended December 31, 2007, compared with $3.2 million during the three months ended
December 31, 2006.
IRS Audit
The Company, through its tax counsel, continues to work with IRS Appeals to reach a closing
settlement.
Details regarding the settlement, including the future of Agri, are in ongoing negotiations with
the IRS and a proposed closing document has been prepared by the Companys tax counsel and provided
to IRS Appeals for review. The Company expects full resolution of this matter by the end of March
2008; however, the Company has executed statute extensions with the IRS for the tax returns
affected until December 31, 2008.
The Internal Revenue Service (IRS) issued a thirty day letter dated August 14, 2006 pertaining to
audits of Alico for the tax years 2000 through 2004. In the thirty day letter, the IRS proposed
several alternative theories as a basis for its argument that Alico should have reported additional
taxable income in the years under audit. These theories principally related to the formation and
capitalization of the Companys Agri Insurance subsidiary and its tax exempt status during the
years under audit. The Company has been working with IRS appeals to resolve the case and has
reached a tentative agreement for the payment of federal taxes, penalties and interest of
approximately $66.2 million. In order to cease additional interest from accruing on this
liability, the Company has paid $66.2 million to the IRS from its revolving credit line. Based on
the contemplated settlement, the Company estimated additional state taxes and interest of
approximately $10.3 million at December 31, 2007 which will be due and payable when the IRS audit
is concluded. Further details regarding the settlement, including the future of Agri, are in
ongoing negotiations with the IRS.
Alico capitalized Agri by contributing real estate located in Lee County Florida. The real estate
was transferred at its historical cost basis. As the Lee County real estate was sold, substantial
gains were generated in Agri, creating differences between amounts recorded on Agris books and the
related tax returns. For property transferred to Agri but not sold during the years under audit,
the historical tax basis will be stepped-up to the fair market value of the property at the time of
transfer. The Company has estimated the amount of basis step-up from discussions with the IRS
and classified the step ups resulting from the transfer of property not sold as of August 31, 2004
based on their estimated tax benefits as a deferred tax asset at August 31, 2007. Should the
actual outcome of the IRS settlement differ from the estimated amounts, the deferred taxes related
to the basis step-ups could fluctuate from the amounts recorded.
Since January 1, 2004, Agri has been filing as a taxable entity. This change in tax status is a
direct result of changes in the Internal Revenue Code increasing premium and other annual income
levels. Due to these changes, Agri no longer qualifies as a tax-exempt entity.
22
Real estate activities
Due to complications in the permitting process and an overall slowdown in the real estate market,
the Company agreed to restructure a contract in connection with a previous land sale in September
2007, with the terms to be effective as of the original closing in July 2005. Under the terms of
the restructure, the Company received $6.8 million on October 22, 2007 representing $0.4 million of
principal with the remaining proceeds classified as interest. Additionally, under the terms of the
renegotiated agreement, Alico will receive quarterly interest payments based upon LIBOR, plus a
percentage, as well as $3.4 million of principal on September 28, 2008, $12.0 million principal
payments on September 28, 2009 & 2010, and the remaining principal of $26.6 million on September
28, 2011. Alico received the first quarterly interest payment of $0.9 million due on the note in
December, 2007.
The Company received an extension payment of $3.6 million during October, 2007. The payment was in
connection with an option contract for a gross sales price of $63.5 million. Under the terms of
this contract, the buyer has four annual options with up to three additional annual extensions.
The next option will expire on September 28, 2008, unless it is extended. In order to extend the
time to exercise the option, the buyer must pay an annual extension fee equal to 6% of the
remaining unexercised sales price.
The Company also received an interest payment of $0.7 million in October 2007 representing interest
on an $11.4 million mortgage on a third contract. The mortgage provides for interest payments only
for the next three years annually in September, followed by four equal annual payments of principal
together with accrued interest thereon. The annual interest rate under the note is 6%.
Treasury stock purchase plan
The Companys Board of Directors has authorized the repurchase of up to 131,000 shares of the
Companys common stock through August 31, 2010, for the purpose of funding restricted stock grants under its 1998 Incentive Equity Plan in order to
provide restricted stock to eligible Directors and Senior Managers and align their interests with
those of the Companys shareholders.
The stock repurchases began in November 2005 and will be made on a quarterly basis until August 31,
2010 through open market transactions, at times and in such amounts as the Companys broker
determines subject to the provisions of a 10b5-1 Plan which the Company has adopted for such
purchases. The timing and actual number of shares repurchased will depend on a variety of factors
including price, corporate and regulatory requirements and other market conditions. All purchases
will be made subject to restrictions of Rule 10b-18 relating to volume, price and timing so as to
minimize the impact of the purchases upon the market for the Companys shares. The Company does not
anticipate that any purchases under the Plan will be made from any officer, director or control
person. There are currently no arrangements with any person for the purchase of the shares. In
accordance with the approved plans, the Company may purchase an additional 75,230 shares. The
Company purchased 12,000 shares in the open market during the first quarter of fiscal year 2008 at
an average price of $43.98 per share.
Dividends
The Company paid a quarterly dividend of $0.275 per share on October 15, 2007. At its meeting on
September 28, 2007 the Board of Directors declared a quarterly dividend of $0.275 per share payable
to stockholders of record as of December 29, 2007 that was paid on January 15, 2008. At its
meeting on January 18, 2008, the Board of Directors declared a quarterly dividend of $0.275 per
share payable to stockholders of record as of April 30, 2008 with payment expected on or around May
16, 2008.
23
Results of Operations
|
|
|
|
|
|
|
|
|
Summary of results (in thousands): |
|
Three months ended December 31, |
|
|
|
2007 |
|
|
2006 |
|
Operating revenue |
|
$ |
23,554 |
|
|
$ |
26,528 |
|
Gross profit |
|
|
4,340 |
|
|
|
5,955 |
|
General & administrative expenses |
|
|
3,001 |
|
|
|
3,167 |
|
Income from operations |
|
|
1,339 |
|
|
|
2,788 |
|
Profit on sale of bulk real estate |
|
|
817 |
|
|
|
1,292 |
|
Interest and investment income |
|
|
4,333 |
|
|
|
1,626 |
|
Interest expense |
|
|
(2,466 |
) |
|
|
(1,261 |
) |
Other income |
|
|
265 |
|
|
|
74 |
|
Provision for income taxes |
|
|
1,498 |
|
|
|
1,939 |
|
Effective income tax rate |
|
|
34.9 |
% |
|
|
42.9 |
% |
Net income |
|
$ |
2,790 |
|
|
$ |
2,580 |
|
Overall, income from operations decreased for the three months ended December 31, 2007 compared
with the three months ended December 31, 2006, primarily the result of inferior results from
agricultural operations. The Company expects that operations will be profitable in fiscal year
2008, but will be significantly below fiscal year 2007 levels. These expectations are a
consequence of lower prices for citrus products for fiscal year 2008 when compared with fiscal year
2007.
Operations by segment are discussed separately below.
General and Administrative
General and administrative expenses decreased by $0.2 million for the three months ended December
31, 2007 when compared with the three months ended December 31, 2006. The Company is working to
reduce its general and administrative costs for fiscal year 2008. Thus far, the reduction effort
has included eliminating staff positions and using internal staff to reduce Sarbanes Oxley
compliance costs which was outsourced for the past several years.
Profit from the Sale of Real Estate
The Company restructured a contract in October 2007, with the terms to be effective as of the
original closing in July 2005. The Company recognized approximately $0.8 million of non-operating
gain in connection with the restructure.
The Company also restructured several contracts for the sale of real estate during three months
ended December 31, 2006. The Company recognized $3.9 million of operating revenue during the three
months ended December 31, 2007 from the extension of these contracts. The Company recognized gains
of $0.5 million of installment proceeds on a prior sale that was recorded as non-operating income
during the three months ended December 31, 2006. Additionally, the Company recorded income in
connection with a restructuring of a second contract of $1.9 million during the three months ended
December 31, 2006, that was classified as operating revenue.
24
Provision for Income taxes
The effective tax rate was 34.9 % and 42.9% for the three months ended December 31, 2007 and 2006,
respectively. The rates for both years were impacted by adjustments related to the ongoing IRS
proceedings for tax years 2000, 2001, 2002, 2003 and 2004 (see Note 6 to the condensed consolidated
financial statements).
The Company adopted the provisions of Financial Accounting Standards Board (FASB) Interpretation
No. 48, Accounting for Uncertainty in Income Taxes, an Interpretation of FASB Statement No. 109
(Interpretation No. 48), on September 1, 2007. At September 1, 2007, the Company had $441
thousand of potential tax exposure related to uncertain tax positions. The Company recognizes
interest and penalties related to uncertain tax positions in income tax expense and classifies such interest and
penalties in the liability for uncertain tax positions. As of December 31, 2007, the Company had
approximately $15,000 accrued for the payment of interest and penalties related to uncertain tax
positions. The tax years ended August 31, 2005 and August 31, 2006 remain open to examination by
the major taxing jurisdictions to which the Company is subject.
Interest and Investment Income
Interest and investment income is generated principally from investments in corporate and municipal
bonds, mutual funds, U.S. Treasury securities, and mortgages held on real estate sold on the
installment basis.
Interest and investment income was $4.3 million compared with $1.6 million for the three month
periods ended December 31, 2007 and 2006, respectively. The increased interest earnings for the
three months ended December 31, 2007 were primarily due to the restructuring of a real estate
mortgage note receivable, which allowed for higher interest rates effective retroactively to July
2005. Additionally, the Company recognized unallocated patronage from Farm Credit of $854 thousand
during the quarter ended December 31, 2007.
Interest Expense
Interest expense increased for the three months ended December 31, 2007 when compared with the
three months ended December 31, 2006 due to higher debt levels. The Companys borrowings increased
significantly during the fourth quarter of fiscal year 2007 due to the payment of taxes, interest
and penalties associated with the ongoing IRS audits.
25
Operating Revenues
|
|
|
|
|
|
|
|
|
|
|
Three months ended December 31, |
|
|
|
2007 |
|
|
2006 |
|
Revenues |
|
|
|
|
|
|
|
|
Agriculture: |
|
|
|
|
|
|
|
|
Bowen Brothers Fruit |
|
$ |
7,815 |
|
|
$ |
7,633 |
|
Citrus groves |
|
|
4,665 |
|
|
|
6,172 |
|
Sugarcane |
|
|
3,221 |
|
|
|
3,738 |
|
Cattle |
|
|
486 |
|
|
|
3,653 |
|
Alico Plant World |
|
|
902 |
|
|
|
749 |
|
Vegetables |
|
|
1,724 |
|
|
|
1,117 |
|
Sod |
|
|
196 |
|
|
|
349 |
|
|
|
|
|
|
|
|
Agriculture operations revenue |
|
|
19,009 |
|
|
|
23,411 |
|
Real estate operations |
|
|
3,869 |
|
|
|
2,447 |
|
Land leasing and rentals |
|
|
536 |
|
|
|
259 |
|
Mining royalties |
|
|
140 |
|
|
|
411 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating revenue |
|
$ |
23,554 |
|
|
$ |
26,528 |
|
|
|
|
|
|
|
|
Operating revenues decreased by 11.2% to $23.6 million for the three months ended December 31,
2007, when compared with operating revenues of $26.5 million for the three months ended December
31, 2006. The decrease was primarily due to lower revenues from agriculture operations, discussed
in detail below.
Gross Profit
|
|
|
|
|
|
|
|
|
|
|
Three months ended December 31, |
|
|
|
2007 |
|
|
2006 |
|
Gross profit: |
|
|
|
|
|
|
|
|
Agriculture: |
|
|
|
|
|
|
|
|
Bowen Brothers Fruit |
|
$ |
103 |
|
|
$ |
209 |
|
Citrus groves |
|
|
820 |
|
|
|
2,464 |
|
Sugarcane |
|
|
(30 |
) |
|
|
(406 |
) |
Cattle |
|
|
(372 |
) |
|
|
618 |
|
Alico Plant World |
|
|
69 |
|
|
|
258 |
|
Vegetables |
|
|
324 |
|
|
|
(99 |
) |
Sod |
|
|
(120 |
) |
|
|
147 |
|
|
|
|
|
|
|
|
Gross profit from agricultural operations |
|
|
794 |
|
|
|
3,191 |
|
Real estate operations |
|
|
2,978 |
|
|
|
2,207 |
|
Land leasing and rentals |
|
|
459 |
|
|
|
187 |
|
Mining royalties |
|
|
109 |
|
|
|
370 |
|
|
|
|
|
|
|
|
Gross profit |
|
|
4,340 |
|
|
|
5,955 |
|
Profits from the sale of bulk real estate |
|
|
817 |
|
|
|
1,292 |
|
Net interest and investment income |
|
|
1,867 |
|
|
|
365 |
|
Corporate general and administrative and other |
|
|
(2,736 |
) |
|
|
(3,093 |
) |
|
|
|
|
|
|
|
Income before income taxes |
|
$ |
4,288 |
|
|
$ |
4,519 |
|
|
|
|
|
|
|
|
Gross profit was $4.3 million for the three months ended December 31, 2007 compared with $6.0
million for the three months ended December 31, 2006. The decrease was due primarily to decreased
profitability from agricultural operations.
26
Agricultural Operations
Agricultural operations generate a large portion of the Companys revenues. Agricultural
operations are subject to a wide variety of risks including weather and disease. Additionally, it
is not unusual for agricultural commodities to experience wide variations in prices from year to
year or from season to season. A discussion of agricultural operations follows:
Bowen
Bowens operations generated revenues totaling $7.8 million for the three months ended December 31,
2007 compared with revenue of $7.6 million for the three months ended December 31, 2006. Gross
profit for the three months ended December 31, 2007 was $0.1 million compared with $0.2 million for
the three months ended December 31, 2006. Citrus prices have declined an estimated 20% during
fiscal year 2008 from their prior year levels and are expected to be below their prior year levels
throughout the 2008 fiscal year. Due to the decreased prices, Bowens per unit margins have also
declined.
Citrus Groves
Citrus revenues were $4.7 million for the three months ended December 31, 2007, and $6.2 million
for the three months ended December 31, 2006. The Citrus Division recorded gross profits of $0.8
million for the three months ended December 31, 2007, compared with $2.5 million for the three
months ended December 31, 2006. The Company expects to harvest more citrus during fiscal year 2008
than it did in fiscal year 2007; however, the Companys citrus crop matured later during fiscal
year 2008 when compared with fiscal year 2007, delaying the harvest and thus causing lower volumes
of fruit movement through December. The volume delay is timing related and should recover in
subsequent quarters. Citrus prices have declined an estimated 20% during fiscal year 2008 from
their prior year levels. For this reason, the Company expects profits from its citrus groves to be
lower in fiscal year 2008 when compared with fiscal year 2007. Prices have declined in the citrus
industry due to an increasing supply of citrus as groves have
recovered from the damages caused by the hurricanes of 2004 and 2005.
Sugarcane
Sugarcane revenues were $3.2 million and $3.7 million for the three months ended December 31, 2007
and December 31, 2006, respectively. Sugarcane operations generated a loss of $30 thousand
compared with a loss of $406 thousand for the three months ended December 31, 2007 and December 31,
2006, respectively. Continuing low margins from sugarcane operations has prompted the Company to
reduce its harvestable acreage of sugarcane during the current fiscal year in favor of expanding
vegetable operations and land leasing. Accordingly, gross profits for the sugarcane division are
expected to be lower in fiscal year 2008 when compared to fiscal year 2007 due to an expected
reduction in the number of tons harvested.
Cattle
Cattle revenues were $0.5 million for the three months ended December 31, 2007, compared with $3.7
million for the three months ended December 31, 2006. Cattle recorded a loss of ($0.4 million) for
the three months ended December 31, 2007 compared with a gross profit of $0.6 million for the three
months ended December 31, 2006. More calves were sold during the three months ended December 31,
2006 compared with the three months ended December 31, 2007. As a result, cattle revenues
decreased from their prior year levels.
27
During the first quarter of fiscal year 2008, the Company wrote down the cattle inventory by $256
thousand, to its net realizable value. In an effort to improve conception and general nutrition,
the Company has reduced the size of its cattle herd. As the herd size is reduced, cost savings
are expected. However, during the current fiscal year, due to a decline in births caused by the
reduced size of the cattle herd, and stress brought about by a severe drought, the cost per calf
has increased and as a result per unit margins have suffered. As a result, cattle operations are
not expected to perform as well in fiscal year 2008 as they did in fiscal year 2007.
Plant World
Plant World generated gross revenues of $0.9 million compared with $0.7 million during the three
months ended December 31, 2007 and 2006, respectively. Gross profits were $69 thousand compared
with $258 thousand for the three months ended December 31, 2007 and 2006, respectively.
Vegetables
Revenues from the sale of vegetables were $1.7 million for the three months ended December 31,
2007, respectively, compared with $1.1 million for the three months ended December 31, 2006. The
Vegetable division recorded gross profits of $0.3 million and a loss of $0.1 million, respectively,
for the three months ended December 31, 2007 and December 31, 2006. Alico began farming sweet corn
and green beans in the second quarter of fiscal year 2006. The fiscal year 2007 fall corn crop was
damaged by insects, which caused the Company to recognize a loss during December of 2006.
During
the second quarter of fiscal year 2007, the Company formed a new company, Alico/J&J Farms, LLC
and entered into a joint venture with J&J Produce to produce vegetables on land owned by Alico,
Inc. The joint venture is currently farming green peppers and eggplant. Alico accounts for its
investment in Alico/J&J under the equity method. For the three months ended December 31, 2007,
Alico recognized a loss of $215 thousand on its portion of the investment. The loss was included
as vegetable revenue for the quarter. Vegetable prices are highly volatile. As such, it is
difficult to speculate as to the future profitability of the venture.
Sod
Due to continued slow sales in the real estate market, sod sales have declined considerably for the
three months ended December 31, 2007 when compared with the three months ended December 31, 2006.
As a result of the reduced sales, the Company has written off a portion of its sod inventory. Sod
costs will continue to be expensed as incurred until the sales volume increases sufficiently to
reduce inventories.
Off Balance Sheet Arrangements
The Company through its wholly owned subsidiary Bowen Brothers Fruit, LLC enters into contracts for
the purchase of citrus products during the normal course of its business. Typically, these
purchases are covered by sales contracts. The total purchase contracts under these
agreements totaled $21.2 million at December 31, 2007. All of these purchases except for $0.1
million were covered by sales agreements at prices exceeding cost. In addition, Bowen had sales contracts totaling $1.0 million at December 31, 2007 for which purchases had not been
contracted. Bowen management currently believes that all committed sales quantities can be
purchased below the committed sales price.
28
Disclosure of Contractual Obligations
The contractual obligations of the Company at December 31, 2007 are set forth in the table below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payment due by period |
|
|
|
|
|
|
|
Less than |
|
|
1 - 3 |
|
|
3-5 |
|
|
Greater than |
|
Contractual obligations |
|
Total |
|
|
1 year |
|
|
years |
|
|
years |
|
|
5 years |
|
Long-term debt |
|
$ |
145,360 |
|
|
$ |
1,349 |
|
|
$ |
139,885 |
|
|
$ |
2,543 |
|
|
$ |
1,583 |
|
Expected interest on debt |
|
|
24,547 |
|
|
|
9,294 |
|
|
|
14,676 |
|
|
|
466 |
|
|
|
111 |
|
Leases operating |
|
|
751 |
|
|
|
261 |
|
|
|
481 |
|
|
|
9 |
|
|
|
|
|
FIN 48 |
|
|
456 |
|
|
|
456 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Commissions |
|
|
3,276 |
|
|
|
167 |
|
|
|
1,200 |
|
|
|
1,623 |
|
|
|
286 |
|
Citrus purchase contracts |
|
|
21,217 |
|
|
|
15,649 |
|
|
|
5,568 |
|
|
|
|
|
|
|
|
|
Retirement benefits |
|
|
5,737 |
|
|
|
468 |
|
|
|
788 |
|
|
|
788 |
|
|
|
3,693 |
|
Fixed Asset additions |
|
|
523 |
|
|
|
523 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Consulting contracts |
|
|
793 |
|
|
|
700 |
|
|
|
93 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
202,660 |
|
|
$ |
28,867 |
|
|
$ |
162,691 |
|
|
$ |
5,429 |
|
|
$ |
5,673 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Critical Accounting Policies and Estimates
The Company adopted the provisions of Financial Accounting Standards Board (FASB) Interpretation
No. 48, Accounting for Uncertainty in Income Taxes, an Interpretation of FASB Statement No. 109
(Interpretation No. 48), on September 1, 2007. At September 1, 2007, the Company had $441
thousand of potential tax exposure related to uncertain tax positions. The Company recognizes
interest and penalties related to uncertain tax positions in income tax expense and classifies such interest and
penalties in the liability for uncertain tax positions. As of December 31, 2007, the Company had
approximately $15,000 accrued for the payment of interest and penalties related to uncertain tax
positions. The tax years ended August 31, 2005 and August 31, 2006 remain open to examination by
the major taxing jurisdictions to which the Company is subject.
As an agricultural credit cooperative, Farm Credit of Southwest Florida is owned by the member-borrowers who purchase
stock/participation certificates in the cooperative. Allocations of patronage are made to members on an annual basis
according to the proportionate amount of interest paid by the member. Allocations are made in cash and non cash
participation certificates. The Company has recorded the cash allocations as received as a reduction of interest
expense. Non cash patronage receivables of $854 thousand have been included as other income in the accompanying
condensed consolidated statements of operations for the three months ended December 31, 2007. Such amounts relate to
cumulative non cash allocations which are considered by management to have both a qualitatively and quantitatively
immaterial effect on any prior period.
Notwithstanding
the above, there have been no substantial changes in the Companys policies
regarding critical accounting issues or estimates since the Companys last annual report on form
10-K.
ITEM 3. Quantitative and Qualitative Disclosures about Market Risk
Reference is made to the discussion under Part II, Item 7A Quantitative and Qualitative
Disclosures about Market Risk in the companys 2007 Annual Report on Form 10-K for the fiscal year
ended August 31, 2007. There are no material changes since the Companys disclosure of this item
on its last annual report on Form 10-K.
29
ITEM 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
The Company maintains disclosure controls and procedures, as defined in Rules 13a-15(e) and
15d-15(e) under the Securities Exchange Act of 1934, as amended, referenced herein as the Exchange
Act. These disclosure controls and procedures are designed to ensure that information required to
be disclosed by the Company in the reports that it files or submits under the Exchange Act is
recorded, processed, summarized, and reported within the time periods specified in the SECs rules
and forms, and that such information is accumulated and communicated to Companys management,
including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely
decisions regarding required disclosure. The Company carried out, under the supervision and with
the participation of the Companys management, including the Companys Chief Executive Officer and
the Companys Chief Financial Officer, an evaluation of the effectiveness of the design and
operation of the Companys disclosure controls and procedures performed pursuant to Rule 13a-15
under the Securities Exchange Act of 1934 as amended. Based on their evaluation at the end of
fiscal year 2007, the month ended September 30, 2007, and the three months ended December 31, 2007,
the Companys Chief Executive Officer and its Chief Financial Officer concluded that, as of
December 31, 2007, the Companys disclosure controls and procedures were effective.
Management assessed the effectiveness of the Companys internal control over financial reporting as
of August 31, 2007, September 30, 2007 and December 31, 2007. In making the assessment, Management
used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO) in Internal Control Integrated Framework. Based on this assessment, the Management of
Alico, Inc. concluded that as of August 31, 2007, September 30, 2007 and December 31, 2007, the
Companys disclosure controls and procedures were effective.
Managements Annual Report on Internal Control over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial
reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f)
promulgated under the Exchange Act as a process designed by, or under the supervision of, the
Companys principal executive and principal financial officers and implemented by the Companys
board of directors, management and other personnel, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles and includes those polices and
procedures that:
Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the
transactions and dispositions of the assets of the company;
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of
financial statements in accordance with Generally Accepted Accounting Principles, and that receipts
and expenditures of the company are being made only in accordance with authorizations of management
and directors of the company; and
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition,
use or disposition of the companys assets that could have a material effect on the financial
statements.
Based on our evaluations of the internal controls, we have concluded that as of August 31, 2007,
September 30, 2007 and December 31, 2007, the Company maintained effective internal control over
financial reporting.
Managements assessment of the effectiveness of internal control over financial reporting as of
August 31, 2007 was audited by McGladrey & Pullen, LLP, an independent registered certified
public accounting firm, as stated in their report which was included
in Item 9A of the
Companys Form 10-K for the fiscal year ended August 31, 2007.
30
FORM 10-Q
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings.
This item is omitted as there are no items to report during this interim period.
ITEM 1A. Risk Factors.
This item is omitted as there were no significant changes regarding risk factors from those
disclosed in the Companys annual report on Form 10-K.
ITEM 2. Unregistered sales of Equity Securities
This item is omitted as there are no items to report during this interim period.
ITEM 3. Defaults Upon Senior Securities.
This item is omitted as there are no items to report during this interim period.
ITEM 4. Submission of Matters to a Vote of Security Holders.
At its annual stockholders meeting held on Friday January 18, 2008, the stockholders elected John
R. Alexander, JD Alexander, Robert E. Lee Caswell, Evelyn DAn, Phillip S. Dingle, Gregory T. Mutz,
Charles Palmer, Robert J. Viguet, Jr. and Dr. Gordon Walker to serve on the Companys Board of
Directors.
Voting results were as follows:
|
|
|
|
|
Number of shares issued outstanding and entitled to vote: |
|
|
7,363,419 |
|
Shares represented by proxy votes: |
|
|
5,006,043 |
|
Representative share of proxy votes: |
|
|
67.99 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For |
|
|
Withheld |
|
|
Total votes |
|
|
Total shares |
|
|
Directors: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John R. Alexander |
|
|
4,949,028 |
|
|
|
98.86 |
% |
|
|
57,015 |
|
|
|
1.14 |
% |
|
|
5,006,043 |
|
|
|
7,363,419 |
|
JD Alexander |
|
|
4,591,401 |
|
|
|
91.72 |
% |
|
|
414,642 |
|
|
|
8.28 |
% |
|
|
5,006,043 |
|
|
|
7,363,419 |
|
Robert E. Lee Caswell |
|
|
4,948,227 |
|
|
|
98.85 |
% |
|
|
57,816 |
|
|
|
1.15 |
% |
|
|
5,006,043 |
|
|
|
7,363,419 |
|
Evelyn DAn |
|
|
4,924,593 |
|
|
|
98.37 |
% |
|
|
81,450 |
|
|
|
1.63 |
% |
|
|
5,006,043 |
|
|
|
7,363,419 |
|
Phillip S. Dingle |
|
|
4,807,469 |
|
|
|
96.03 |
% |
|
|
198,574 |
|
|
|
3.97 |
% |
|
|
5,006,043 |
|
|
|
7,363,419 |
|
Gregory T. Mutz |
|
|
4,948,075 |
|
|
|
98.84 |
% |
|
|
57,968 |
|
|
|
1.16 |
% |
|
|
5,006,043 |
|
|
|
7,363,419 |
|
Charles L. Palmer |
|
|
4,968,383 |
|
|
|
99.25 |
% |
|
|
37,660 |
|
|
|
0.75 |
% |
|
|
5,006,043 |
|
|
|
7,363,419 |
|
Baxter G. Troutrnan |
|
|
758,432 |
|
|
|
15.15 |
% |
|
|
4,247,611 |
|
|
|
84.85 |
% |
|
|
5,006,043 |
|
|
|
7,363,419 |
|
Robert J. Viguet, Jr. |
|
|
4,867,654 |
|
|
|
97.24 |
% |
|
|
138,389 |
|
|
|
2.76 |
% |
|
|
5,006,043 |
|
|
|
7,363,419 |
|
Gordon Walker |
|
|
4,945,761 |
|
|
|
98.80 |
% |
|
|
60,282 |
|
|
|
1.20 |
% |
|
|
5,006,043 |
|
|
|
7,363,419 |
|
31
ITEM 5. Other Information.
This item is omitted as there are no items to report during this interim period.
ITEM 6. Exhibits
|
|
|
Exhibit 11
|
|
Computation of Earnings per share. |
Exhibit 31.1
|
|
Rule 13a-14(a) certification. |
Exhibit 31.2
|
|
Rule 13a-14(a) certification. |
Exhibit 32.1
|
|
Section 1350 certification. |
Exhibit 32.2
|
|
Section 1350 certification. |
32
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)
February 15, 2008
John R. Alexander
Chairman
Chief Executive Officer
(Signature)
February 15, 2008
Patrick W. Murphy
Vice President
Chief Financial Officer
(Signature)
February 15, 2008
Jerald R. Koesters
Controller
(Signature)
33
EXHIBIT INDEX
|
|
|
Exhibit 11
|
|
Computation of Earnings per share. |
Exhibit 31.1
|
|
Rule 13a-14(a) certification. |
Exhibit 31.2
|
|
Rule 13a-14(a) certification. |
Exhibit 32.1
|
|
Section 1350 certification. |
Exhibit 32.2
|
|
Section 1350 certification. |
34