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Mar 31, 2020
Alico Q2 2020 Earnings Report
Alico's financial performance declined due to lower market prices for citrus fruit and increased cost of goods sold, though Valencia boxes harvested increased and federal disaster relief funds were awarded.
Key Takeaways
Alico Inc. reported a decrease in net income attributable to common stockholders for the second quarter of fiscal year 2020, primarily due to a decline in citrus fruit market prices and an increase in cost of goods sold. The company has strengthened its liquidity by drawing down on its lines of credit.
The coronavirus outbreak has had minimal impact on the Company’s harvest and business operations.
Company paid a second quarter cash dividend and has no plans to reduce payout for the foreseeable future.
Demand for Not-From-Concentrate orange juice surges, with consumption increasing 49.7% in the trailing four-week period ended April 11, 2020, compared to the same period in the prior year.
Company has strengthened its liquidity by drawing down on its lines of credit to retain cash on its balance sheet during these uncertain times.
Alico
Alico
Alico Revenue by Segment
Revenue by Segment
Alico Citrus Revenue
CapyFin.comLand Mgmt & Other Ops Revenue
CapyFin.com Forward Guidance
Alico anticipates lower profits and rates of return in fiscal year 2020 due to decreased market prices for citrus fruit, but is encouraged by increased retail demand for NFC orange juice and potential improvements in market pricing next season.
Positive Outlook
- The coronavirus has had an impact on all of us personally, but so far there has been no disruption to our business.
- Alico is fortunate to have individual grove managers who have been managing our operations for between 15 and 45 years enabling us to navigate through these challenging times seamlessly.
- Alico did not seek any federal relief under the CARES Act.
- We are encouraged by the recent increase in demand among retail consumers for NFC orange juice, which, when combined with the impact of lower levels of imported juice, potentially will improve market pricing next season as processor inventory supplies decrease.
- The Alico Board remains confident about our business model and prospects in the citrus industry and is committed to continue uninterrupted quarterly dividend payments as we have done for the past five decades.
Challenges Ahead
- As expected in fiscal year 2020, Alico will realize lower profits and lower rates of return this year as a result of lower market prices for citrus fruit.
- Alico decided to draw down on our lines of credit and strengthen our liquidity during these uncertain times by placing enough cash on our balance sheet to meet operating expenses for more than a full year.
- Because we cannot predict the impact of COVID-19 going forward
- The Company’s working capital, excluding the $66.7 million drawn on its lines of credit which is in cash, was approximately $25.8 million at March 31, 2020, representing a 2.09 to 1.00 ratio.
- At March 31, 2020, the Company had term debt, including lines of credit, net of cash and cash equivalents and restricted cash, of $136.3 million.
Revenue & Expenses
Visualization of income flow from segment revenue to net income