Alico (ALCO) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue rose 86.8% year-over-year to $13.6M, driven by a later Valencia harvest and higher processed fruit sales; nine-month revenue reached $45.7M, up 16.7% year-over-year.

• Net loss of $2.0M for Q3 2024, compared to net income of $11.8M last year, mainly due to higher costs and lower insurance proceeds; nine-month net income surged to $25.1M from $0.9M, primarily due to significant land sales.

• Signed a new three-year Orange Purchase Agreement with Tropicana, effective June 2024, providing 33% to 50% higher prices over the contract term.

• Treated nearly all producing trees with OTC, expecting improved yields and production growth in 2024-25 as new trees mature and disease treatment initiatives expand.

• Announced board succession, with Adam Putnam to become chairman in 2025, and hired new EVP of Real Estate to accelerate land strategy.

Financial highlights

• Harvested 0.8 million and 3.1 million boxes of fruit for the three and nine months ended June 30, 2024, up from 0.4 and 2.7 million in the prior year.

• Q3 EBITDA was $1.3M, down from $18.8M; nine-month EBITDA rose to $48.7M from $16.5M, reflecting large land sale gains.

• EPS of -$0.27 for the quarter and $3.29 for the nine months, versus $1.56 and $0.12 in the prior year.

• Inventory write-down of $28.5M in fiscal 2024 due to lower production.

• Realized price per pound solid increased 3.9% year-over-year for the nine months.

Outlook and guidance

• Optimism for improved yields and reduced fruit drop next season due to expanded disease treatment and tree maturity; expects significant production growth in 2024-25 as 4.5M trees mature.

• Anticipates higher fruit prices under new Tropicana contract, with further increases in subsequent years.

• Full recovery to pre-hurricane production may take another season or more.

• Liquidity expected to be sufficient for at least the next twelve months, supported by cash, operations, asset sales, and available credit.