La Belle, FL., January 17,2006 -- Alico, Inc., (NASDAQ: ALCO) one of the South's best known agribusiness companies operating in Central and Southwest Florida, announced net earnings for the first quarter of fiscal year 2006 of $1.2 million, or $0.16 per share, compared with net earnings of $1.0 million, or $0.1 3 per share, during the first quarter of fiscal year 2005.
Operating revenues during the first quarter of fiscal year 2006 totaled $6.7 million,
compared with $7.6 million for the first quarter of fiscal year 2005. The decrease in
operating revenues was primarily due to decreased revenues from the sale of rock and sand products.
John R. Alexander, Chairman and Chief Executive Officer, noted, "Hurricane Wilma, a category three hurricane, swept through southwest Florida on October 24, 2005, causing extensive damage to the Company's crops and infrastructure in Collier and Hendry Counties. The Company recorded a casualty loss of $5.7 million of damages to crop inventories and infrastructure from the hurricane. However, increased income from bulk real estate sales ($4.4 million compared with $0.0 million for the three months ended November 30, 2005 and November 30, 2004, respectively) and interest and investment income ($5.0 million for the three months ended November 30,2005 compared with $1.3 million for the three months ended November 30, 2004) offset the casualty loss and loss from operations ($1 -0 million loss compared with $1.1 million income for the three
months ended November 30,2005 and 2004, respectively)."
Addressing the divisional results, Mr. Alexander noted that:
* The Citrus Division reported operating profits of $0.6 million during the first quarter of fiscal 2006, compared with $0.8 million for the first quarter of fiscal year 2005. Hurricanes, citrus canker finds and increased real estate development in the central and southern portions of Florida where the majority of citrus is produced within the state have combined to reduce the supply of citrus for the past two years, resulting in price increases for citrus products across the industry. However, crop losses in the current fiscal year due to hurricane Wilma are expected to continue to offset the increased prices for citrusproducts.
* Sugarcane and sod generated a loss of $0.6 million for the three months ended
November 30, 2005 compared with earnings of $0.4 million for the three months ended November 30, 2004. Fertilizer is the largest component of production costs for the Company's sugarcane crop. Due to price increases in the cost of fie1 used to produce fertilizer, fertilizer prices increased 23% over their prior year levels. The increased price of fertilizer caused the Company's production costs per ton to rise above the expected net realizable value. As a result, the Company adjusted its inventoried sugarcane crop by $834 thousand in the first quarter of fiscal 2005, charging it to cost of sales. This adjustment, caused by the price increase in fertilizer described above, was the primary cause of the loss.
* Ranch earnings increased during the three months ended November 30, 2005 when compared to the same period a year ago ($0.5 million compared to $0.2 million for the quarters ended November 30, 2005 and 2004, respectively). Prices for Alico's beef products have improved during the current year compared to the prior year ($0.82 per pound average for the first quarter months of fiscal year 2006, compared to $0.76 per pound for the first quarter of fiscal 2005). The price increase is the primary cause for the increased profits in the current year.
Management expects continued profitability from the Company's agricultural operations in fiscal year 2006, but at reduced levels from fiscal year 2005 due to the hurricane.
About Alico
Alico, hc., an agribusiness company operating in Central and Southwest Florida, owns approximately 136,000 acres of land located in Collier, Hendry, Lee and Polk Counties . The company is involved in various operations and activities including citrus fruit production, cattle ranching, sugarcane, sod production, and forestry. The Company also leases land for farming, cattle grazing, recreation and oil exploration, and is increasingly involved in exploring real estate development in and beyond its holdings.
Some of the statements in this press release 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 expectations about future prospects are predictive in nature or depend upon or refer to future events or conditions which may not be achievable and, are subject to known, as well as, unknown risks and uncertainties that may cause actual results to differ materially from our expectations The Company undertakes no obligation to update publicly any forward-looking statements, whether as a result of future events, new information or otherwise. |
