Alico, Inc.

Welcome to ALICO's first quarter 2024 earnings conference call. At this time, all participants are in listen-only mode. And as a reminder, today's conference is being recorded. Last night, the company issued a press release announcing its results for the first quarter ended December 31st, 2023. If you have not had the 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 replay will be available on Alico's website as well. Before we begin, we would like to remind everyone that the prepared remarks today contain forward-looking statements. Such statements are subject to risk, uncertainties, and other factors 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 10-Q and annual reports on Form 10-K, current reports Form 8-K, and any 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 the law. During this call, the company will also discuss non-GAAP financial measures, including adjusted EBITDA and net debt. For more details on these measures, please refer to the company's press release issued earlier today. With that, I would like to turn the conference call over to the company's president and CEO, Mr. John Kierton. Please go ahead.

Thank you, Kelsey. And thank you, everyone, for joining us for Alico's first quarter 2024 earnings call this morning. As previously announced, on September 18, 2023, Alico signed a contract with the state of Florida to sell the remaining 17,229 acres of the Alico Ranch. And on December 21, 2023, We closed on the sale for $77.6 million in gross proceeds. A portion of the proceeds from this sale were used to repay the outstanding balance on our working capital line of credit and $19.1 million of MetLife variable rate term loans plus accrued interest. The remainder we retained in cash. Results from our early and mid-season harvest this season were disappointing and resulting in an inventory write-down of approximately $10.8 million in the first quarter of fiscal year 2024. We believe that the early and mid-season box production was affected by the continued impacts of Hurricane Ian. We are cautiously optimistic that our Valencia crop, which will begin harvesting soon, will show a stronger rate of recovery. That harvest is expected to begin in another week or so. In January 2024, the company received funding from the Citrus Research and Field Trial Foundation to support our use of oxytetracycline to combat the effect of greening in the citrus trees. Last year, beginning in January 2023, over 35% of our producing trees were treated with an OTC trunk injection with the expectation that it would improve fruit quality and decrease the rate of fruit drop. We expect that the full extent of the benefits of these prior year OTC treatments will not be measurable until the full 2023-24 harvest is completed. Also last month, we published our 2023 Annual Sustainability Report, highlighting our approach to sustainability and progress with our environmental, social, and governance priorities. We believe that our balance sheet remains one of our greatest strengths as we continue to operate in a challenging citrus industry. Because of the sale of the remaining acreage of Oliko Ranch, we have been able to reduce our total debt by $44 million and our net debt by almost $62 million, representing a decrease of 34% in our total debt and a decrease of 48% in our net debt, in each case from September 30th, 2023 to to December 31st, 2023. Even more importantly, we have the full $95 million available of undrawn credit, which is comprised of approximately $70 million on our working capital line, which matures in November 2025, as well as $25 million of undrawn credit on the revolving line of credit, which matures in November of 2029. We believe that these credit facilities provide Aleko with ample liquidity while the company continues to recover from the impact of recent weather events. With that, I will turn the call over to Brad to discuss our more detailed financial results.

Thank you, John. Good morning, everyone. I'd like to remind everyone that our business is seasonal, and the majority of our citrus crop is harvested in the second and third quarters of the fiscal year, with the majority of our profit and cash flows also recognized in the second and third quarters. Quarterly results for the first quarter are not indicative of our full-year results. The $3.3 million increase in revenue for the three months ended December 31, 2023, as compared to the three months ended December 31, 2022, was primarily due to a 24.9% increase in pound solids, driven by a 30.1% increase in processed box production as we begin to recover from the effects of Hurricane Ian. Our fruit production for the three months ended December 31, 2022 was adversely impacted by the fruit drop caused as a result of the impact of Hurricane Ian in September 22. And although Hurricane initially impacted the fiscal year 2023 harvest, we expected to take another season or more for the growth to recover to pre-hurricane production levels. In addition, there was an increase in the price per pound solid of 3.4% for the three months ended December 31, 2023, compared to the same period in the prior year as a result of more favorable pricing in one of our contracts with Tropicana. Total operating expenses were 28.2 million and 14.4 million for the fiscal first quarters ended December 31, 2023 and 2022, respectively. The increase in operating expenses primarily relates the 10.8 million adjustment to reduce our inventory to its net realizable value as a result of significantly lower than anticipated box production from our early and mid-season crop due to the ongoing effects of our canine as well as an increase in harvest and haul costs driven by our increased box production and approximately 1.3 million we received in the quarter ended december 31 2022 which was the last installment of the Florida Citrus Block Grant Program for the 2017 storm, Hurricane Irma. General and administrative expenses for the three months ended December 31, 2023 and 2022 were $3.3 million and $2.5 million respectively. The increase was primarily due to an increase in salary and wages of $0.6 million and consulting fees principally related to real estate entitlement activities of $0.3 million. Other income expense net for the three months ended December 31, 2023, and 2022 was $75.5 million and $2 million, respectively. The increase is primarily due to the sale of 17,229 acres of the Alico Ranch to the state of Florida. For the first fiscal quarter ended December 31, 2023, the company reported net income attributable to Alico common stockholders of $42.9 million. compared to a net loss of $3.2 million for the first fiscal quarter ended December 31, 2022, driven by the aforementioned sale of the Alico Ranch. I will now pass the call back to John.