Alico, Inc.

Good morning. Welcome to Alico's fourth quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode. As a reminder, today's conference is being recorded. Last night, the company issued a press release announcing its results for the fourth quarter and full year ended September 30, 2023. If you have not had a chance to view the release It is available on the investor relations portion of the company's website at alicoinc.com. This call is being webcast and a replay will be available on Alico's website as well. Before we begin, I would like to remind everyone that the prepared remarks today contain forward-looking statements. Such statements are subject to risks, uncertainties, and other factors that may cause actual results to differ materially from those expressed or implied in these statements. Important factors that could cause or contribute to such differences include risk details in the company's quarterly reports on Form 10Q, annual reports on Form 10K, current reports on Form 8K, and any amended statements thereto filed with the SEC and those mentioned in the earnings release. The company undertakes no obligation to subsequently update or revise the forward-looking statements made on today's call except as required by law. During this call, the company will also discuss non-GAAP financial measures, including EBITDA and adjusted EBITDA. For more details on these measures, please refer to the company's press release issued earlier today. With that, I will turn the call over to the company's president and CEO, Mr. John Kiernan. Please go ahead, sir.

Thank you, Melissa, and thank you, everyone, for joining us for Alico's fourth quarter 2023 earnings call this morning. During 2023 earnings, Oliko was recovering from the aftermath of Hurricane Ian that occurred in September of 2022, which damaged half of our crops intended for the 2023 harvest season, and our financial results were disappointing as expected. The overall decrease in box production for Oliko was 51.5% for the 2022-2023 harvest season versus the prior year. USDA reported a 61.7% decrease in box production for the overall Florida orange crop as compared to the same period in the prior year. The approximately 28.2 million of insurance proceeds that we received during the fiscal year were used to help maintain our Grove caretaking programs for our approximately 49,000 citrus acres located across seven counties in Florida so that Alico will be ready to harvest a healthy citrus crop in 2023-2024. We continue to hope to receive federal disaster relief funds from the Consolidated Appropriations Act that was passed into law in December of 2022, although we cannot determine the amount of relief we may be eligible for or the timing of any possible relief fund payments. To that end, Alico continues to support Florida Citrus Mutual, our industry trade group, as well as government officials and agencies as they work to finalize federal relief programs for this 2022 storm. Although our 2023-2024 harvesting activities are just beginning now, we are confident that Alico's crop recovery this season will be significant because of our exceptional caretaking practices and the maturity of over 2 million trees planted by the company since 2017. In addition, over 35% of our trees have now been treated with an oxytetracycline injection since January 2023 to combat citrus greening with the goal to improve fruit quality and decrease the rate of fruit drop. The full extent of the benefits of that treatment will not be measurable until after the 2023-2024 harvest. OECO is proud to share that in fiscal 2024, it has already partnered with another large citrus grower to manage approximately 3,300 acres of their citrus groves with all expenses reimbursed and a management fee paid to us for our services. We believe that our balance sheet is one of our greatest strengths. Our working capital line of credit allowed us the financial flexibility to work through an extremely challenging year with significantly reduced revenues while ensuring that we could continue to operate and invest in our business. While our debt levels have increased approximately $18 million during the year ended September 30, 2023, we continue to have $70 million available of undrawn credit. which is comprised of approximately $45 million on our working capital line of credit, which matures in November of 2025, as well as a $25 million of undrawn credit on the revolving line of credit, which matures in November of 2029. We believe that these credit facilities provide Alico with ample liquidity while the company continues to recover from the impact of recent weather events. During the year ended, September 30, 2023, we sold approximately 2,255 acres of ranch land for approximately $12 million. Also, in the current fiscal year, we closed on two very small citrus grove purchases that are contiguous with one of our groves. On September 18, 2023, Alico signed a contract with the state of Florida to sell the remaining 17,229 acres of the Ilico Ranch for approximately $77.6 million. The deal is anticipated to close by February 2024. Once closed, we will have sold a total of approximately 69,000 acres of the Ilico Ranch for approximately $226 million to more than 25 buyers since 2018. Plans for the use of proceeds are being finalized with reducing balances on our working capital credit line incurred during Hurricane Ian as a priority, as well as repayment of variable rate debt balances without penalty and for general corporate purposes. It is possible that net operating losses incurred over the past two years will shield a significant amount of the expected gain on the pending ranch sale, and it is also possible that if the proceeds are used to repay variable debt balances, the company's net debt balances could range between $75 million and $80 million at the end of fiscal 2024, which is a substantial decrease from the $127.6 million net debt balance at September 30, 2023. Outside of our citrus operations, Alico recently concluded its work with land use planning professionals in Florida evaluating the long-term potential highest and best use for our real estate assets. To be clear, Alico will continue to conduct our regular citrus operations at all of our groves for years to come, but the work of those land planning professionals led to a decision by Alico to commence the multi-year entitlement process for a 4,500-acre grove near Fort Myers here in Collier County. Finally, All OECO shareholder litigation related to the balance sheet restatement last December has been voluntarily dismissed without prejudice by all the plaintiffs. With that, I will turn the call over to Brad, who will discuss in more detail our financial results.

Thank you, John, and good morning, everyone. As our fourth quarter is not indicative of our full-year results due to the seasonal nature of our business, I will focus primarily on our full-year 2023 results today. As a reminder, the majority of our citrus crop is harvested in the second and third quarters of the fiscal year, and as such, the majority of our profit and cash flows are also recognized in the second and third quarters. For the fiscal year ended September 30, 2023, total operating revenue was $39.8 million compared to $91.9 million for the fiscal year ended September 30, 2022. Citrus revenue was $38.1 million and $89.7 million for the fiscal year ended September 30, 2023 and 2022 respectively. The decrease in revenue for the fiscal year ended September 30, 2023 compared to September 30, 2022 was driven by a decrease in the amount of food harvested as a result of the food drop caused by hurricane Ian, a decrease in pound solids per box and a 10.7 million decrease in our growth management services revenue as a result of the termination of a property management agreement in June, 2022. While the impact to our fiscal year 2023 crop was substantial, there does not appear to be long-term measurable damage to our citrus trees. The decrease in pound solids per box was mainly due to the internal quality of our fruit not being as strong as it was in the prior year. In addition, we accelerated the harvesting of both the early and mid-season and Valencia crop to minimize the fruit drop as a result of the impact of Hurricane Ian with the intent to maximize our box production And as such, we realized a lower pound solids per box. Partially offsetting the decrease in processed box production and pound solids per box was an increase in the price per pound solids. The 2.6% improvement in our average realized price per pound solids for the year ended September 30, 2023, as compared to the prior year, was due to the overall lower production of citrus fruit. Total operating expenses were 33.4 million for the year ended September 30, 2023, as compared to 106.7 million in the same period in the prior year. The decrease in operating expenses primarily relates to the 28.2 million of insurance proceeds received during the year ended September 30, 2023. inventory adjustments recorded in fiscal year 2022's ending inventory balance as a result of the impact of Hurricane Ian, which effectively lowered the inventory to be expensed in fiscal year 2023, a reduction in harvest and haul expenses as a result of the lower box production, and a decrease in grove management services expense. The company realized an overall decrease in its harvest and hauling expenses. However, the harvesting cost per box increased for the year end of September 30, 2023, as compared to the prior year, due to an increase in the harvesting labor costs, as well as the increased time spent by the harvesters to fill the boxes as a result of the increased fruit drop. These decreases were partially offset by additional costs incurred in relation to cleanup and repairs as a result of Hurricane Ian. The decrease in growth management services expenses directly related to the termination of the property management service services by the grove owners in June 2022. The decision by the grove owners to exit the citrus business eliminated the need for the caretaking management services for the grove owners as a result caretaking expenses decreased significantly during the year and September 30 2023 compared to the prior year. General administrative expenses for the year ended September 30, 2023 were 10.6 million compared to 10.1 million for the year ended September 30, 2022. The increase was probably due to an increase in legal and professional fees as compared to the same period in the prior year. Other income net for the year ended September 30, 2023 and 2022 was 6.7 million and 37.8 million respectively. The decrease in other income net is probably due to fewer land sales closing during the year. which resulted in lower gains in the sale of property and equipment. During the year end of September 30, 2023, the company sold approximately 2,255 acres of Alico Ranch and recognized a gain of approximately $11.4 million. By comparison, for the year end of September 30, 2022, the company recognized gains of $41.1 million related to the sale of property and equipment. In addition, the company recognized an increase in interest expense of $1.6 million for the year ended September 30, 2023, as compared to the prior year, as a result of higher balance on the working capital line of credit and an increase in the overall interest rates on its variable rate term debt and the working capital line of credit. For the fiscal year ended September 30, 2023 and 2022, we reported net income attributable to legal common stockholders of $1.8 million and $12.5 million, respectively. Our adjusted EBITDA was a loss of $16.1 million for the year ended September 30, 2023, as compared to income of $13.4 million for the prior fiscal year. LECO continues to maintain a strong balance sheet. Our working capital was approximately $43.7 million at September 30, 2023, representing a 3.9 to 1 ratio, and we continue to maintain a solid debt to equity ratio of 0.3 to 1, and 0.27 to 1 at September 30, 2023 and 2022, respectively. I will now pass the call back to John.