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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K
__X__ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended August 31, 1998.
OR
_____ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from ________________ to_______________.
Commission file number 0-261.
ALICO, INC.
______________________________________________________
(Exact name of registrant as specified in its charter)
Florida 59-0906081
_______________________________ ____________________
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
P. O. Box 338, La Belle, Florida 33975
________________________________________ __________
(Address of principal executive offices) (Zip Code)
(941)675-2966
Registrant's telephone number, including area code______________
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Name of each exchange on
Title of each class which registered
___________________ ________________________
None None
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
COMMON CAPITAL STOCK, $1.00 Par value, Non-cumulative
_____________________________________________________
(Title of Class)
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.
_________
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that
such registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes __X__ No_____
As of October 19, 1998 there were 7,027,827 shares of stock outstanding and
the aggregate market value (based upon the average bid and asked price, as
quoted on NASDAQ) of the common stock held by nonaffiliates was
approximately $61,156,635.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant's Annual Report and Proxy Statement dated
November 9, 1998 are incorporated by reference in Parts II and III,
respectively.
PART I
______
Item 1. Business.
__________________________
Alico, Inc. (the "Company") is generally recognized as an agribusiness
company operating in Central and Southwest Florida. The Company's primary
asset is 151,067 acres of land located in Collier, Hendry, Lee and Polk
Counties. (See table on Page 5 for location and acreage by current primary
use.) The Company is involved in various operations and activities
including citrus fruit production, cattle ranching, sugarcane and sod
production, and forestry. The Company also leases land for farming, cattle
grazing, recreation, and oil exploration.
The Company's land is managed for multiple use wherever possible. Cattle
ranching, forestry and land leased for farming, grazing, recreation and oil
exploration, in some instances, utilize the same acreage.
Agricultural operations have combined to produce from 68 to 91 percent of
annual revenues during the past five years. Citrus groves generate the
most gross revenue. Sugarcane ranks second in revenue production. While
the cattle ranching operation utilizes the largest acreage, it ranks third
in the production of revenue. Approximately 10,006 acres of the Company's
property are classified as timberlands, however, the area in which these
lands are located is not highly rated for timber production. These lands
are also utilized as native range, in the ranching operation, and leased
out for recreation and oil exploration.
Diversification of the Company's agricultural base was initiated with the
development of a Sugarcane Division at the end of the 1988 fiscal year.
The 5,698 acres in production during the 1998 fiscal year consisted of
565 acres planted in 1993, 1,558 acres planted in 1994, 1,496 acres planted
in 1995, and 2,079 acres planted in 1997.
The Company continued to expand agriculture activities during the 1998
fiscal year, purchasing additional property (approximately 8,400 acres in
Hendry County, Florida) primarily to be used as sugarcane land.
Leasing of lands for rock mining and oil and mineral exploration, rental of
land for grazing, farming, recreation and other uses, while not classified
as agricultural operations, are important components of the Company's land
utilization and operation. Gross revenue from these activities during the
past five years has ranged from 3 to 5 percent of total revenue.
The Company is not in the land sales and development business, except
through its wholly owned subsidiary, Saddlebag Lake Resorts, Inc.; however,
it does from time to time sell properties which, in the judgment of
management, are surplus to the Company's primary operations. Gross revenue
from land sales during the past five years has ranged from 1 to 24 percent
of total revenues.
For further discussion of the relative importance of the various segments
of the Company's operations, including financial information regarding
revenues, operating profits (losses) and assets attributable to each major
segment of the Company's business, see Note 10 of Notes to Consolidated
Financial Statements and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" incorporated in this document.
Subsidiary Operations
_____________________
The Company's wholly owned subsidiary, Saddlebag Lake Resorts, Inc. (the
"Subsidiary"), is only active in the subdividing, development and sale of
real estate. The financial results of the operation of this subsidiary are
consolidated with those of the Company. (See Note 1 of Notes to Financial
Statements.)
Contributions by the Subsidiary to the net income of the Company, during
the past five years, have ranged from 0 to 1 percent. The Subsidiary has
two subdivisions near Frostproof, Florida which have been developed and are
on the market. Approximately 74% of the lots have been sold.
Citrus
______
Approximately 8,836 acres of citrus were harvested during the 1998 season.
Since 1983 the Company has maintained a marketing contract covering the
majority of the Company's citrus crop with Ben Hill Griffin, Inc., a
Florida corporation and major shareholder. The agreement provides for
modifications to meet changing market conditions and provides that either
party may terminate the contract by giving notice prior to August 1st,
preceding the fruit season immediately following. Under the terms of the
contract the Company's fruit is packed and/or processed and sold along with
fruit from other growers, including Ben Hill Griffin, Inc. The proceeds
are distributed on a pro rata basis as the finished product is sold.
During the year ended August 31, 1998, approximately 90% of the Company's
fruit crop was marketed under this agreement, as compared to 89% in 1996/97.
The Company expects that the majority of the 1998/99 crop will be marketed
under the same terms. In addition, Ben Hill Griffin, Inc. provides
harvesting services to the Company for citrus sold to unrelated processors.
These sales accounted for the remaining 10% of total citrus revenue for the
year.
Ranch
_____
The Company has a cattle operation located in Hendry and Collier Counties,
Florida which is engaged primarily in the production of beef cattle and the
raising of replacement heifers. The breeding herd consists of
approximately 16,200 cows, bulls and replacement heifers. Approximately
39% of the herd are from one to five years old, while the remaining 61% are
six and older. The Company primarily sells to packing and processing
plants. The Company also sells cattle through local livestock auction
markets and to contract cattle buyers. These buyers provide ready markets
for the Company's cattle. The loss of any one or a few of these plants
and/or buyers would not, in management's view, have a material adverse
effect on the Company's cattle operation. Subject to prevailing market
conditions, the Company may hedge its beef inventory by entering into cattle
futures contracts to reduce exposure to changes in market prices.
Sugarcane
_________
The Company had 5,698 acres and 5,042 acres of sugarcane in production
during the 1997/98 and 1996/97 fiscal years, respectively. The 1997/98 and
1996/97 crops yielded approximately 204,000 and 158,000 gross tons,
respectively.
Forest Products
_______________
Approximately 7% of the Company's properties are classified as timberlands.
The principal forest products sold by the Company are pulpwood and sabal
palms. These products are sold to a paper company and various landscaping
companies, respectively. The Company does not incur any of the harvesting
expenses.
Part of the lands, from which the timber was removed, is being converted to
semi-improved pasture and other uses.
Land Rental for Grazing, Agricultural and Other Uses
____________________________________________________
The Company rents lands to others for grazing, farming and recreational
uses, on a tenant-at-will basis, for an annual fee. The income is not
significant when compared to overall gross income, however, it does help to
offset the expense of carrying these properties until they are put to a
more profitable use. The Company has developed additional land to lease
for farming.
There were no significant changes in the method of rental for these
purposes during the past fiscal year.
Leases for Oil and Mineral Exploration
______________________________________
The Company has leased subsurface rights to a portion of it's properties
for the purpose of oil and mineral exploration. Currently, there are two
leases in effect.
Twenty-four wells have been drilled during the years that the Company has
been leasing subsurface rights to oil companies. The drilling has resulted
in twenty-one dry holes, one marginal producer, which has been abandoned,
and two average producers, still producing.
Mining Operations: Rock and Sand
_________________________________
The Company leases 7,927 acres in Lee County, Florida to Florida Rock
Industries, Inc. of Jacksonville, Florida for mining and production of
rock, aggregate, sand, baserock and other road building and construction
materials.
Royalties which the company receives for these products are based on a
percentage of the f.o.b. plant sales price.
Competition
___________
As indicated, the Company is primarily engaged in a limited number of
agricultural activities, all of which are highly competitive. For
instance, citrus is grown in several states, the most notable of which are:
Florida, California, Arizona and Texas. In addition, citrus and sugarcane
products are imported from some foreign countries. Beef cattle are
produced throughout the United States and domestic beef sales must also
compete with sales of imported beef. Additionally, forest and rock
products are produced in most parts of the United States. Leasing of land
for oil exploration is also widespread.
The Company's share of the market for citrus, cattle and forest products in
the United States is insignificant.
Environmental Regulations
_________________________
The Company's operation is subject to various federal, state and local laws
regulating the discharge of materials into the environment. The Company is
in substantial compliance with all such rules and such compliance has not
had a material effect upon capital expenditures, earnings or the
competitive position of the Company.
While compliance with environmental regulations has not had a material
economic effect on the Company's operations, executive officers are
required to spend a considerable amount of time keeping current on these
matters. In addition, there are ongoing costs incurred in complying with
the permitting and reporting requirements.
Employees
_________
At the end of August 1998 the Company had a total of 119 full-time
employees classified as follows: Citrus 51; Ranch 19; Sugarcane 9;
Facilities Maintenance Support 25; General and Administrative 15. There
are no employees engaged in the development of new products or research.
Seasonal Nature of Business
___________________________
As with any agribusiness enterprise, the Company's business operations are
predominantly seasonal in nature. The harvest and sale of citrus fruit
generally occurs from October to June. Sugarcane is harvested during the
first, second and third quarters. Other segments of the Company's business
such as its cattle and sod sales, and its timber, mining and leasing
operations, tend to be more successive than seasonal in nature.
Item 2. Properties.
____________________________
At August 31, 1998, the Company owned a total of 151,067 acres of land
located in four counties in Florida. Acreage in each county and the
primary classification with respect to present use of these properties is
shown in the following table:
ACREAGE BY CURRENT PRIMARY USE
______________________________
Timber Native Improved Citrus Sugar- Agri-
County Land Pasture Pasture Sod Land cane culture Other Total
___________________________________________________________________________
Polk 550 9,351 447 -- 3,148 -- -- 4 13,500
Lee 3,731 1,088 -- -- -- -- 1,460 3,599 9,878
Hendry 3,823 56,026 26,495 220 2,299 7,343 16,630 3,629 116,465
Collier 1,902 1,836 1,112 -- 4,041 -- -- 2,333 11,224
______ _______ ______ ___ _____ _____ _____ _____ _______
Totals 10,006 68,301 28,054 220 9,488 7,343 18,090 9,565 151,067
______ _______ ______ ___ _____ _____ ______ _____ _______
______ _______ ______ ___ _____ _____ ______ _____ _______
Of the above lands, the Company utilizes 26,407 acres of improved pasture
plus approximately 56,000 acres of native pasture for cattle production and
7,927 acres are leased for rock mining operations. Much of the land is
also leased for multi-purpose use such as cattle grazing, oil exploration,
agriculture and recreation.
In addition to the land shown in the above table, the Company owns full
subsurface rights to 1,064 acres and fractional subsurface rights to 18,882
acres.
From the inception of the Company's initial development program in 1948,
the goal has been to develop the lands for the most profitable use. Prior
to implementation of the development program, detailed studies were made of
the properties focusing on soil capabilities, topography, transportation,
availability of markets and the climatic characteristics of each of the
tracts. Based on these and later studies, the use of each tract was
determined. It is the opinion of Management that the lands are suitable
for agricultural, residential and commercial uses. However, since the
Company is primarily engaged in agricultural activities, some of the lands
are considered surplus to its needs for this purpose and, as indicated
under Item 1 of this report, sales of real property are made from time to
time.
Management believes that each of the major programs is adequately supported
by agricultural equipment, buildings, fences, irrigation systems and other
amenities required for the operation of the projects.
Item 3. Legal Proceedings.
___________________________________
There are no pending legal proceedings involving the Company.
Item 4. Submission of Matters to a Vote of Security Holders.
_____________________________________________________________________
There were no matters submitted to a vote of security holders during the
1998 fiscal year.
Executive Officers of the Company
_________________________________
Pursuant to General Instruction G(3) of Form 10-K/A, the following list is
included as an unnumbered Item in Part I of this report in lieu of being
included in the Proxy Statement for the Annual Meeting of Stockholders to
be held on December 1, 1998.
Election of Executive Officer is held each year at the Annual Meeting of
the Board of Directors following the Annual Meeting of the Stockholders.
Name Title Age
____ _____ ___
Ben Hill Griffin, III Chairman of the Board (since March 1990),
Chief Executive Officer (since January
1988) and Director (since March 1973) 56
W. Bernard Lester President (since December 1997) and Chief
Operating Officer (since January 1988) and
Director (since 1987), prior to July 1, 1986
was Executive Director of Florida Department
of Citrus for over five years 59
L. Craig Simmons Vice President (effective February, 1995),
Treasurer and Chief Financial Officer
(effective September 1, 1992), prior thereto
was Controller (from January 1 to August 31,
1992) and Assistant Comptroller (from January
1 to December 31, 1991), prior to September
1990 was Controller of Farm/Citrus Division,
Collier Enterprises, Agribusiness Group 46
Based solely upon a review of Forms 3 and 4 and amendments thereto
furnished to the Company pursuant to Rule 16a-3(e) during the 1998 fiscal
year and Forms 5 and amendments thereto furnished to the Company during
fiscal year 1992 and certain written representations, if any, made to the
Company, no officer, director or beneficial owners of 10% or more of the
Company's common stock has failed to file on a timely basis any reports
required by Section 16(a) of the Exchange Act to be filed during fiscal
1998.
PART II
_______
Item 5. Market for the Registrant's Common Stock and Related
_____________________________________________________________________
Stockholder Matters.
____________________
Common Stock Prices
___________________
The common stock of Alico, Inc. is traded over-the-counter on the NASDAQ
National Market System under the symbol ALCO. The high and low sales
prices, by fiscal quarter, during the years ended August 31, 1998 and 1997
are presented below:
1998 1997
Bid Price Bid Price
_________ _________
High Low High Low
First Quarter 25 1/2 23 7/8 22 1/4 19 1/4
Second Quarter 24 1/2 19 1/2 21 1/4 18
Third Quarter 23 19 3/4 20 1/2 17 5/8
Fourth Quarter 20 3/4 17 5/8 25 1/4 18 1/2
Approximate Number of Holders of Common Stock
_____________________________________________
As of October 19, 1998 there were approximately 854 holders of record of
Alico, Inc. Common Stock.
Dividend Information
____________________
Only year-end dividends have been paid, and during the last three fiscal
years were as follows:
Amount Paid
Record Date Payment Date Per Share
___________ ____________ ___________
October 20, 1995 November 10, 1995 $.35
October 25, 1996 November 8, 1996 $.15
October 20, 1997 November 7, 1997 $.60
Dividends are paid at the discretion of the Company's Board of Directors.
The Company foresees no change in its ability to pay annual dividends in
the immediate future; nevertheless, there is no assurance that dividends
will be paid in the future since they are dependent upon earnings, the
financial condition of the Company, and other factors.
Item 6. Selected Financial Data.
_________________________________________
Years Ended August 3l,
DESCRIPTION 1998 1997 1996 1995 1994
________ ________ ________ ________ ________
(In Thousands Except Per Share Amounts)
Revenues $ 44,679 $ 47,433 $ 36,089 $ 39,571 $ 38,502
Costs and Expenses 33,654 29,583 29,269 25,105 26,799
Income Taxes 4,249 6,677 2,381 5,525 3,975
Net Income 6,776 11,173 4,439 8,941 7,728
Average Number of
Shares Outstanding 7,028 7,028 7,028 7,028 7,028
Basic Earnings Per Share .96 1.59 .63 1.27 1.10
Cash Dividend Paid per Share .60 .15 .35 .25 .15
Current Assets 42,354 37,887 34,877 31,736 28,341
Total Assets 130,554 117,723 114,504 109,007 102,185
Current Liabilities 5,649 4,988 5,115 5,656 5,660
Ratio-Current Assets
to Current Liabilities 7.50:1 7.59:1 6.82:1 5.61:1 5.01:1
Working Capital 36,705 32,899 29,762 26,080 22,680
Long-Term Obligations 34,938 24,582 32,006 27,945 28,568
Total Liabilities 40,587 29,570 37,121 33,601 34,228
Stockholders' Equity 89,967 88,153 77,383 75,406 67,957
Item 7. Management's Discussion and Analysis of Financial
__________________________________________________________________
Condition and Results of Operations.
____________________________________
The following discussion focuses on the results of operations and the
financial condition of Alico.
This section should be read in conjunction with the consolidated financial
statements and notes.
Liquidity and Capital Resources
_______________________________
The Company had cash and marketable securities of $13.2 million at August
31, 1998 compared with $12.9 million at August 31, 1997. Working capital
also increased, from $32.9 million at August 31, 1997 to $36.7 million at
August 31, 1998. An increase in citrus prices has caused accounts
receivable to increase and is the primary reason for the increase in working
capital.
During the fourth quarter, the Company purchased approximately 8,400 acres
of land in Hendry County, Florida from Atlantic Gulf Communities, Inc. for
$8.1 million. Funds for the purchase came from the Company's credit line
(see note 5 of the consolidated financial statements). The purchase enabled
the Company to take advantage of an income tax deferral arising from a sale
of property in Polk County, Florida, to the State of Florida during fiscal
1995. With this purchase, the Company was able to defer, for income tax
purposes, recognition of the gain on the Polk County sale by replacing the
property within the stipulated three-year period.
Cash outlay for land, equipment, building, and other improvements totaled
$12.2 million, compared to $5.8 million during August 31, 1998 and 1997,
respectively. Major expenditures included the land purchase discussed
above, as well as capitalized maintenance costs for young citrus groves.
Land excavation for farm leasing also continued, as did expenditures for
replacement equipment, raising of breeding cattle and sugarcane capital
maintenance. Capital projects for the upcoming year are expected to include
development of additional sugarcane acreage.
Management believes that the Company will be able to meet its working
capital requirements, for the foreseeable future, with internally generated
funds. In addition, the Company has unused credit commitments which
provided for revolving credit of up to $30 million of which $7.2 million was
available for the Company's general use at August 31, 1998 (see note 5 of
consolidated financial statements).
Year 2000 Compliance
____________________
The Company recognizes that year 2000 issues could result in system
failures or miscalculations causing disruptions of operations, including,
among others, a temporary inability to process transactions, send invoices
or engage in similar normal business activities.
The Company has been engaged in an evaluation of its year 2000 readiness in
connection with various aspects of its business. Specifically, the Company
has focused on its information technology and non-information technology
systems. In addition, the Company has analyzed its production processes and
products. The Company has also attempted to analyze year 2000 issues
relating to third parties with whom the Company has a business relationship.
The current status of the Company's efforts is as follows:
Internal Systems, Processes and Products
________________________________________
Information Technology Systems:
The Company's accounting software provider and operating system provider
have advised the Company that such software is year 2000 compliant.
Non-Information Technology Systems:
The Company does not believe that non-information technology systems are
material to its business; however, the Company has begun reviewing and
testing such systems. The Company does not believe that it will incur any
material costs in connection with the review and testing of such systems.
Products:
The Company's products are not date sensitive. Therefore, the Company does
not believe it has any material exposure with regard to its products as a
result of the year 2000 issue.
Year 2000 Issues Relating to Third Parties
__________________________________________
Suppliers:
Certain products purchased by the Company are obtained from a limited group
of suppliers. The Company surveyed such suppliers in 1998 regarding their
year 2000 status. Absent widespread difficulties affecting several major
vendors, the Company does not anticipate that vendors' year 2000 issues
would have a material adverse effect on the Company, because the Company
believes alternative sources of supply are available for all required
components.
The Company is not currently aware of the year 2000 readiness of certain
outside services companies. Any adverse effect caused by the failure of
these providers to be year 2000 compliant is not currently susceptible to
quantification.
Customers:
Because the Company intends to distribute the majority of its agricultural
products through third party distribution and marketing agreements, and
because the customer base is expected to change from year to year, the
Company is unable to predict the identity of most of its major customers in
the year 2000 and thereafter. Accordingly, the Company is unable to make an
inquiry as to whether the customers' computer driven payment or purchasing
processes are year 2000 compliant. A customer's year 2000 issues could
cause a delay in receipt of purchase orders or in payment. If year 2000
issues are widespread among the Company's customers, the Company's sales
and cash flow could be materially affected.
Cautionary Statement
____________________
This annual report of form 10-K contains certain forward-looking statements.
Actual results could differ materially from those projected in the
forward-looking statements as a result of various factors, including but not
limited to, the competitive environment of the Company's products, weather
forces and government regulations.
Results of Operations
_____________________
Summary of results (in thousands):
Years Ended August 31,
1998 1997 1996
_______ _______ _______
Operating revenue $41,618 $34,543 $34,505
Gross profit 9,532 5,886 6,720
Profit on sale of real estate 875 11,271 57
Interest and investment income 1,734 1,137 1,033
Interest expense 1,116 444 990
Provision for income taxes 4,249 6,677 2,381
Effective income tax rate 38.5% 37.4% 34.9%
Net income 6,776 11,173 4,439
Operating Revenue
_________________
Operating revenues (revenues other than real estate sales and investment
income) for fiscal 1998 increased when compared to those of fiscal 1997.
Revenues from agriculture operations were higher than in the prior year.
Operating revenues for fiscal 1997 approximated those of fiscal 1996.
Decreases in citrus and sugarcane sales were offset by increased cattle and
rock sales, and increased land rentals.
Gross Profit
____________
Gross profit from operations during fiscal 1998 increased by 62% over fiscal
1997. The increase was primarily due to larger harvest volume for sugarcane,
combined with improved market prices for citrus products.
Gross profit during fiscal 1997 declined by 12% from fiscal 1996. The
decrease was primarily due to lower market prices for citrus products and
decreased sugarcane production.
Profit on Sale of Real Estate
____________________________________
Profit from the sale of real estate was $875 thousand during fiscal 1998, as
compared to $11.27 million during fiscal 1997. Sales during 1998 included
residential lot sales in Polk County, sales in Lee County and additional
proceeds resulting from a final survey of the large fiscal 1997 land sale
in Hendry County. During fiscal 1997 revenues included the sale of
approximately 21,700 acres of land in Hendry and Collier Counties, Florida,
to the State of Florida for $11.5 million, the pretax gain from which was
$11.1 million, and several smaller sales in Lee, Collier and Polk Counties.
Profit from the sale of real estate increased to $11.27 million during
fiscal 1997, as compared to $57 thousand during fiscal 1996. Sales during
1997 included the sale of approximately 21,700 acres of land in Hendry and
Collier Counties, Florida, to the State of Florida for $11.5 million, the
pretax gain from which was $11.1 million, and several smaller sales in Lee,
Collier and Polk Counties.
Interest and Investment Income
______________________________
Interest and investment income is generated principally from investments in
marketable equity securities, corporate and municipal bonds, mutual funds,
U.S. Treasury securities and mortgages held on real estate sold on the
installment basis. Investment earnings were reinvested throughout fiscal
1998, 1997 and 1996, increasing investment levels during each year. The
rise in fiscal interest and investment income for the years presented
resulted from higher investment levels and favorable market conditions
during each of the years. During the market downturn of August 1998, the
Company experienced unrealized declines in its portfolio which have been
reflected in stockholders' equity, net of related taxes.
Interest Expense
________________
Interest expense increased during fiscal 1998, primarily due to increased
borrowings used to acquire the property from Atlantic Gulf Communities, and
interest associated with settling the August 31, 1993 and 1994 income tax
audits. Total interest cost, which includes capitalized interest and is
discussed in Note 5 of the consolidated financial statements, increased 38%.
Interest expense decreased 56% during fiscal 1997 due primarily to a large
reduction in total long-term debt, likewise, total interest cost, which
includes capitalized interest and is discussed in Note 5, decreased 37%.
Provision for Income Taxes
__________________________
The effective tax rate increased to 38.5% during fiscal year 1998, from
37.4% during fiscal year 1997, and 34.9% during fiscal year 1996. Higher
taxable income levels during fiscal 1998 and 1997, combined with the impact
of decreased tax exempt investment income to raise the effective rate.
Individual Operating Divisions
______________________________
Gross profit for the individual operating divisions, for fiscal 1998, 1997
and 1996, is presented in the following schedule and is discussed in
subsequent sections:
Years Ended August 31,
(in thousands)
1998 1997 1996
_______ _______ _______
CITRUS
Revenues:
Sales $26,622 $22,287 $22,966
Less harvesting & marketing 8,421 8,210 6,948
_______ _______ _______
Net Sales 18,201 14,077 16,018
Cost and Expenses:
Direct production** 6,908 6,875 5,964
Allocated cost* 2,616 2,352 2,470
_______ _______ _______
Total 9,524 9,227 8,434
_______ _______ _______
Gross profit, citrus 8,677 4,850 7,584
_______ _______ _______
SUGARCANE
Revenues:
Sales 6,123 4,967 5,851
Less harvesting & hauling 1,400 1,120 1,237
_______ _______ _______
Net Sales 4,723 3,847 4,614
Costs and expenses:
Direct production 1,926 1,826 1,758
Allocated cost* 1,189 1,190 1,152
_______ _______ _______
Total 3,115 3,016 2,910
_______ _____ _______
Gross profit, sugarcane 1,608 831 1,704
_______ _______ _______
RANCH
Revenues:
Sales 6,883 4,876 3,796
Costs and expenses:
Direct production 4,715 3,165 3,890
Allocated cost* 1,552 946 1,539
_______ _______ _______
Total 6,267 4,111 5,429
_______ _______ _______
Gross profit (loss), ranch 616 765 (1,633)
_______ _______ _______
Total gross profit,
agriculture 10,901 6,446 7,655
_______ _______ _______
OTHER OPERATIONS
Revenues:
Rock products and sand 1,203 1,258 935
Oil leases and land rentals 505 831 679
Forest products 161 224 197
Other 122 100 80
_______ _______ _______
Total 1,991 2,413 1,891
Costs and expenses:
Allocated Cost* 570 481 456
General and administrative,
all operations 2,789 2,492 2,370
_______ _______ _______
Total 3,359 2,973 2,826
_______ _______ _______
Gross loss, other
operations (1,368) (560) (935)
_______ _______ _______
Total gross profit 9,533 5,886 6,720
_______ _______ _______
INTEREST & DIVIDENDS
Revenue 1,734 1,137 1,033
Expense 1,116 444 990
_______ _______ _______
Interest & dividends, net 618 693 43
_______ _______ _______
REAL ESTATE
Revenue:
Sale of real estate 1,327 11,753 551
Expenses:
Cost of sales 93 122 151
Other Costs 360 360 343
_______ _______ _______
Total 453 482 494
_______ _______ _______
Gain on sale of real estate 874 11,271 57
_______ _______ _______
Income before income taxes $11,025 $17,850 $ 6,820
_______ _______ _______
_______ _______ _______
* Allocated expense includes ad valorem and payroll taxes, depreciation
and insurance.
** Excludes capitalized maintenance cost of groves less than five years of
age consisting of $236 thousand on 620 acres in 1998, $875 thousand on
1,130 acres in 1997, and $1.6 million on 1,648 acres in 1996.
Citrus
______
Gross profit was $8.7 million in fiscal 1998, $4.8 million in fiscal 1997,
and $7.6 million for fiscal 1996.
Revenue from citrus sales increased 19% during fiscal 1998, compared to
fiscal 1997 ($26.6 million during fiscal 1998 vs. $22.3 million during
fiscal 1997). The increase primarily resulted from higher prices for citrus
products.
Production remained steady for the year (4.4 million boxes during fiscal
1998 and fiscal 1997), while average market prices per box increased ($6.01
in fiscal 1998 vs. $5.09 in fiscal 1997).
Harvesting and marketing costs rose slightly from the prior year, due to
competing demands for labor ($8.4 million in fiscal 1998 vs. $8.2 million
in fiscal 1997). Direct production and allocated costs also increased
slightly (3%), largely due to inflation.
Revenue from citrus sales decreased 3% during fiscal 1997, compared to
fiscal 1996 ($22.3 million during fiscal 1997 vs. $22.9 million during
fiscal 1996).
Despite an 18% increase in production for the year (4.4 million boxes during
fiscal 1997 vs. 3.7 million boxes during fiscal 1996), an offsetting 18%
decline in the average market price per box ($5.09 in fiscal 1997 vs. $6.21
per box in fiscal 1996) caused the decrease.
The increase in the number of boxes harvested during fiscal 1997 generated
harvesting and marketing costs in excess of the prior year ($8.2 million in
fiscal 1997 vs. $6.9 million in fiscal 1996). Direct production and
allocated costs likewise increased as a result of the rise in production.
The production increase was attributable to the addition of the first phase
of the KT Grove, combined with improved yields from maturing groves in South
Florida.
ACREAGE BY VARIETY AND AGE
VARIETY 3-4 5-6 7-8 9-10 11-12 13-14 15-16 17+ Acres
___ ___ ___ ____ _____ _____ _____ ____ _____
Early:
Parson Brown
Oranges - - 117 30 - - - - 147
Hamlin
Oranges 386 170 62 - 714 - 110 1,574 3,016
Red Grapefruit - - 54 - - - 48 327 429
White Grapefruit - - - 318 - - - 21 339
Tangelos - - - - - - - 135 135
Navel Oranges - - 15 - - - 54 84 153
Mid Season:
Pineapple
Oranges - 103 - - - - 18 467 588
Queen Oranges - - - - - - - 51 51
Honey
Tangerines 80 - - 45 - - - 94 219
Midsweet
Oranges 54 110 - - - - - - 164
Late:
Valencia
Oranges 826 310 557 329 800 - 35 1,390 4,247
_____ ___ ___ ___ _____ ___ ___ _____ _____
Totals: 1,346 693 805 722 1,514 - 265 4,143 9,488
The final returns from citrus pools are not precisely determinable at year
end. Returns are estimated each year based on the most current information
available conservatively applied. Differences between the estimates and the
final realization of revenues can be significant. Revenue collected in
excess of prior year and year end estimates was $2.7 million, $1.0 million
and $1.1 million during fiscal 1998, 1997 and 1996, respectively.
Sugarcane
_________
Gross profit for fiscal 1998 was $1.6 million compared to $831 thousand in
fiscal 1997 and $1.7 million in fiscal 1996.
Sales revenues from sugarcane increased 23% during fiscal 1998, compared to
fiscal 1997 ($6.1 million vs. $4.9 million, respectively). During the same
period, direct production and allocated costs increased by 3% ($3.1 million
in fiscal 1998 vs. $3.0 million in fiscal 1997).
The revenue improvement during the year was largely due to increases in
acres harvested (656 additional acres) and gross tons yielded per acre.
The total gross tons harvested during fiscal 1998 was 29% higher than the
previous year (204 thousand gross tons harvested during fiscal 1998 vs. 158
thousand gross tons harvested during fiscal 1997). Poor weather conditions
caused decreased yields during the prior year.
Sales revenues from sugarcane decreased 15% during fiscal 1997, compared to
fiscal 1996 ($4.9 million vs. $5.9 million, respectively). During the same
period, direct production and allocated costs increased by 4% ($3.0 million
in fiscal 1997 vs. $2.9 million in fiscal 1996).
Although the acres harvested during 1997 approximated fiscal 1996 levels
(roughly 5 thousand acres each year), the number of gross tons harvested
during fiscal 1997 was 15% below year ago levels (158 thousand gross tons
harvested during 1997 vs. 187 thousand harvested during fiscal 1996). Poor
weather conditions during the growing season was the cause for the decrease
in sugarcane production.
Ranching
________
The gross profit (loss) from ranch operations for fiscal 1998, 1997 and 1996
was $616 thousand, $765 thousand, and $(1.6 million), respectively.
Revenues from cattle sales increased 41% during fiscal 1998, compared to
fiscal 1997 ($6.9 million in fiscal 1998 vs. $4.9 million in fiscal 1997).
The number of animals sold during the year increased 17% over the prior year
(10,668 animals sold in fiscal 1998 vs. 9,095 animals sold in fiscal 1997)
due to increased sales of feeder cattle inventories during the year.
Direct and allocated costs increased from their year ago levels ($6.3
million in fiscal 1998 vs. $4.1 million in fiscal 1997). The costs
increased as a result of the increase in the number of animals sold, and
the type of animals sold. During the prior year, the Company sold a larger
number of fully depreciated brood cows, resulting in a lower cost basis and
a higher profit margin per unit.
The Company's cattle marketing activities include retention of calves in
feedlots, and contract and auction sales.
Revenues from cattle sales increased 28% during fiscal 1997, compared to
fiscal 1996 ($4.9 million in fiscal 1997 vs. $3.8 million in fiscal 1996).
The number of animals sold during the year increased 26% over the prior year
(9,095 animals sold in fiscal 1997 vs. 7,211 in fiscal 1996). The rise is
due to increased sales of feeder cattle inventories during the year,
combined with a significant improvement in market prices for beef.
Direct and allocated costs declined from their year ago levels ($4.1 million
in fiscal 1997 vs. $5.4 million in fiscal 1996). Due to market conditions,
the Company was required to write down its fiscal 1996 beef inventory to net
realizable value. This adjustment totaled $909 thousand. Additionally, in
fiscal 1996, the Company wrote off $400 thousand of sod costs. The charge
was included in ranching costs. The sod write off was necessary because of
excessive rain and subsequent weed intrusion.
Other Operations
________________
Revenues from oil royalties and land rentals were $505 thousand for fiscal
1998 compared to $831 thousand for fiscal 1997 and $679 thousand for fiscal
1996. Land rentals are expected to regain their previous levels during the
next fiscal year.
Returns from rock products and sand were $1.2 million for fiscal 1998 and
1997, and $935 thousand for fiscal 1996. Rock and sand supplies are
sufficient, and no major price changes have occurred over the past 3 years.
Profits from the sale of sabal palms, for landscaping purposes, during
fiscal 1998 were $161 thousand compared to $169 thousand and $197 thousand
for fiscal years 1997 and 1996, respectively.
Direct and allocated expenses charged to the "Other" operations category
included general and administrative and other costs not charged directly to
citrus, ranching, sugarcane or forestry. These expenses totaled $3.4
million during fiscal 1998 compared to $3.0 million during fiscal 1997 and
to $2.8 million during fiscal 1996.
The Florida Gulf Coast University completed its first academic year since
opening its doors in August 1997. The Company is continuing its marketing
and permit activities for its land which surrounds the University site.
During November of 1996, the Company announced an agreement with Miromar
Development, Inc. of Montreal, Canada to sell 550 acres of land surrounding
the University site in Lee County for $9.35 million. The contract calls for
25% of the purchase price to be paid at closing, with the balance payable
over the next four years. If the sale closes, it will generate a pretax
gain of approximately $8.7 million.
Additionally, the Company announced an option agreement with REJ Group, Inc.
The option agreement permits the acquisition of a minimum 150 acres and a
maximum of 400 acres within the 2,300 acre university village. The
potential pretax gain to Alico, if the option is exercised, would vary from
$8.5 million to $24.5 million, depending on the time at which the option is
exercised, and the total number of acres selected.
In October 1998, the Company signed an agreement to sell 12,728 acres of
land, in Hendry and Collier Counties, Florida, to the South Florida Water
Management District for $8.8 million. Prior to closing, the agreement must
be approved by the South Florida Water Management District Governing Board
at its November 13, 1998 meeting and the State of Florida Cabinet at its
December 8, 1998 meeting. If closed, the Company expects to recognize an
$8.6 million gain.
Also, the Company signed a purchase agreement for approximately 7,680 acres
in Hendry County, Florida, from Hilliard Brothers of Florida, LTD for $22.5
million in November 1998.
Item 8. Financial Statements and Supplementary Data.
_____________________________________________________________
Independent Auditors' Report
____________________________
The Stockholders and Board of Directors
Alico, Inc.:
We have audited the consolidated balance sheets of Alico, Inc. and
subsidiary as of August 31, 1998 and 1997, and the related consolidated
statements of operations, stockholders' equity, and cash flows for each of
the years in the three-year period ended August 31, 1998. In connection
with our audits of the consolidated financial statements, we also have
audited the related consolidated financial statement schedules as listed in
Item 14(a)(2) herein. These consolidated financial statements and financial
statement schedules are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Alico,
Inc. and subsidiary at August 31, 1998 and 1997, and the results of their
operations and cash flows for each of the years in the three-year period
ended August 31, 1998, in conformity with generally accepted accounting
principles. Also in our opinion, the related consolidated financial
statement schedules, when considered in relation to the consolidated
financial statements taken as a whole, present fairly, in all material
respects, the information set forth therein.
KPMG PEAT MARWICK LLP
(Signature)
Orlando, Florida
October 9, 1998
CONSOLIDATED BALANCE SHEETS
August 31,
1998 1997
_____________ ____________
ASSETS
Current assets:
Cash, including time deposits and other
cash investments of $849,905 in 1998
and $1,414,436 in 1997 $ 908,268 $ 1,459,765
Marketable equity securities available
for sale, at estimated fair value in
1998 and in 1997 (note 2) 12,291,767 11,412,915
Accounts receivable ($8,332,514 in 1998 and
$5,549,080 in 1997 due from affiliate)
(note 8) 11,093,835 7,456,937
Mortgages and notes receivable, current
portion 99,673 901,112
Inventories (note 3) 17,625,923 16,387,128
Other current assets 334,577 269,463
____________ ____________
Total current assets 42,354,043 37,887,320
____________ ____________
Other assets:
Land inventories 8,837,957 8,345,116
Mortgages and notes receivable, net of
current portion 514,796 588,860
Investments 965,230 955,779
____________ ____________
Total other assets 10,317,983 9,889,755
____________ ____________
Property, buildings and equipment (note 4) 107,064,751 96,709,440
Less accumulated depreciation (29,182,416) (26,763,790)
____________ ____________
Net property, buildings and equipment 77,882,335 69,945,650
____________ ____________
Total assets $130,554,361 $117,722,725
____________ ____________
____________ ____________
August 31,
1998 1997
____________ ____________
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,464,159 $ 1,158,012
Due to profit sharing plan (note 6) 296,368 230,545
Accrued ad valorem taxes 1,329,136 1,253,053
Current portion of notes payable (note 5) 28,145 -
Accrued expenses 538,897 541,847
Income taxes payable 623,128 934,895
Deferred income taxes (note 7) 1,023,886 869,763
Deferred revenue 345,763 -
____________ ____________
Total current liabilities 5,649,482 4,988,115
Notes payable (note 5) 23,210,723 12,856,000
Deferred income taxes (note 7) 11,723,895 11,712,806
Deferred retirement benefits (note 6) 3,320 13,259
____________ ____________
Total liabilities 40,587,420 29,570,180
____________ ____________
Stockholders' equity:
Preferred stock, no par value. Authorized
1,000,000 shares; issued, none - -
Common stock, $1 par value. Authorized
15,000,000 shares; issued and outstanding
7,027,827 in 1998 and 1997 7,027,827 7,027,827
Unrealized gains on marketable securities
(note 2) 168,345 913,059
Retained earnings 82,770,769 80,211,659
____________ ____________
Total stockholders' equity 89,966,941 88,152,545
____________ ____________
Total liabilities and stockholders'
equity $130,554,361 $117,722,725
____________ ____________
____________ ____________
See accompanying notes to consolidated financial statements.
CONSOLIDATED STATEMENTS OF OPERATIONS
Years Ended August 31,
1998 1997 1996
___________ ___________ ___________
Revenue:
Citrus (including charges from
affiliate (note 8)) $26,621,714 $22,287,006 $22,966,004
Sugarcane 6,122,822 4,966,837 5,850,764
Ranch 6,882,149 4,875,826 3,795,612
Forest products 161,309 224,090 196,906
Rock and sand royalties 1,203,160 1,257,665 934,992
Oil lease and land rentals 505,426 831,254 679,039
Profit on sales of real estate 1,326,624 11,753,199 550,578
Interest and investment income 1,734,023 1,136,928 1,033,124
Other income 121,509 99,872 81,817
___________ ___________ ___________
Total revenue 44,678,736 47,432,677 36,088,836
___________ ___________ ___________
Costs and expenses:
Citrus production, harvesting and
Marketing (including charges from
Affiliate (note8)) 17,945,016 17,436,648 15,381,924
Sugarcane production, harvesting
and hauling 4,514,424 4,136,302 4,147,284
Ranch 6,266,688 4,110,969 5,429,239
Real estate 451,912 481,870 494,281
Interest (note 5) 1,116,688 444,217 990,082
Other, general and administrative
expenses 3,359,392 2,972,863 2,826,422
___________ ___________ ___________
Total costs and expenses 33,654,120 29,582,869 29,269,232
___________ ___________ ___________
Income before income taxes 11,024,616 17,849,808 6,819,604
Provision for income taxes (note 7) 4,248,810 6,677,116 2,380,414
___________ ___________ ___________
Net Income 6,775,806 $11,172,692 $ 4,439,190
___________ ___________ ___________
___________ ___________ ___________
Weighted average number of shares
outstanding 7,027,827 7,027,827 7,027,827
___________ ___________ ___________
___________ ___________ ___________
Per share amounts:
Basic earnings $ .96 $ 1.59 $ .63
Dividends .60 $ .15 $ .35
See accompanying notes to consolidated financial statements.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Unrealized
Gains
Common Stock (Losses) on
Preferred Shares Retained Securi-
Stock Issued Amount Earnings ities
_____ _________ __________ ___________ _______
Balances,
August 31, 1995 $ - 7,027,827 $7,027,827 $68,113,690 $264,739
_______________
Net income for the year
ended August 31, 1996 - - - 4,439,190 -
Unrealized losses on
securities - - - - (3,053)
Dividends paid - - - (2,459,739) -
______ _________ __________ ___________ ________
Balances,
August 31, 1996 - 7,027,827 7,027,827 70,093,141 261,686
_______________
Net income for the year
ended August 31, 1997 - - - 11,172,692 -
Unrealized gains on
securities - - - - 651,373
Dividends paid - - - (1,054,174) -
______ _________ __________ ___________ ________
Balances,
August 31, 1997 - 7,027,827 7,027,827 80,211,659 913,059
_______________
Net income for the year
ended August 31, 1998 - - - 6,775,806 -
Unrealized losses on
securities - - - - (744,714)
Dividends paid - - - (4,216,696) -
______ _________ __________ ___________ ________
Balances,
August 31, 1998 $ - 7,027,827 $7,027,827 $82,770,769 $168,345
______ _________ __________ ___________ ________
______ _________ __________ ___________ ________
See accompanying notes to consolidated financial statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended August 31,
1998 1997 1996
___________ ___________ __________
Increase (Decrease) in Cash and Cash Investments:
Cash flows from operating activities:
Net Income $ 6,775,806 $11,172,692 $ 4,439,190
Adjustments to reconcile net income
to cash provided by operating activities:
Depreciation and amortization 4,717,219 4,240,117 4,136,333
Gain on breeding herd sales (465,482) (526,266) (255,277)
Deferred income tax expense, net 714,257 (259,533) (607,302)
Deferred retirement benefits (9,939) (63,465) (130,828)
Net gain on sale of marketable
securities (850,446) (414,669) (128,473)
(Gain) Loss on sale of property
and equipment (14,678) 424,915 305,485
Gain on real estate sales (1,239,031) (11,957,753) (379,734)
Increase in land inventories (492,841) (567,174) (455,202)
Cash provided by (used for) changes in:
Accounts receivable (3,636,898) 1,975,901 (2,443,469)
Inventories (1,924,894) (2,845,384) (227,391)
Other assets (65,114) (31,425) 94,118
Deferred revenues 345,763 - -
Accounts payable and accrued
expenses 479,862 (590,994) (275,553)
Income taxes payable (311,767) 744,256) (63,754)
___________ ___________ ___________
Net cash provided by operating
activities 4,021,817 1,301,218 4,008,143
___________ ___________ ___________
Cash flows from investing activities:
Purchases of property and
equipment (12,186,976) (5,752,072) (7,141,814)
Proceeds from disposals of
property and equipment 510,432 608,658 364,398
Proceeds from sale of real
estate 1,393,170 12,060,060 420,364
Purchases of other assets (51,446) (100,896) (215,575)
Proceeds from the sale of
other assets 41,995 161,643 124,834
Purchases of marketable
securities (5,255,681) (4,694,859) (3,848,245)
Proceeds from sales of
marketable securities 3,933,517 4,367,008 3,756,639
Collection of mortgages and
notes receivable 875,503 909,120 695,321
___________ __________ ___________
Net cash provided by
(used for) investing
activities (10,739,486) 7,558,662 (5,844,078)
___________ __________ ___________
Years Ended August 31,
1998 1997 1996
___________ ___________ ___________
Cash flows from financing activities:
Proceeds of bank loans 31,573,868 18,749,000 17,316,000
Repayment of loans (21,191,000) (26,523,000) (12,741,000)
Dividends paid (4,216,696) (1,054,174) (2,459,739)
___________ ___________ ___________
Net cash provided by
(used for) financing
activities 6,166,172 (8,828,174) 2,115,261
___________ ___________ ___________
Net increase in cash
and cash investments (551,497) 31,706 279,326
Cash and Cash investments:
At beginning of year 1,459,765 1,428,059 1,148,733
___________ ___________ __________
At end of year $ 908,268 $ 1,459,765 $ 1,428,059
___________ ___________ ___________
___________ ___________ ___________
Supplemental disclosures of cash flow information:
Cash paid for interest,
net of amount capitalized $ 765,210 $ 396,988 $ 886,239
___________ ___________ ___________
___________ ___________ ___________
Cash paid for income taxes $ 3,800,198 $ 6,183,310 $ 3,186,861
___________ ___________ ___________
___________ ___________ ___________
See accompanying notes to consolidated financial statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended August 31, 1998, 1997 and 1996
(1) Summary of Significant Accounting Policies
__________________________________________
(a) Basis of Consolidated Financial Statement Presentation
______________________________________________________
The accompanying financial statements include the accounts of
Alico, Inc. (the Company) and its wholly owned subsidiary,
Saddlebag Lake Resorts, Inc. (Saddlebag), after elimination of
all significant intercompany balances and transactions.
(b) Revenue Recognition
___________________
Income from sales of citrus under marketing pool agreements is
recognized at the time the crop is harvested. The revenue is
based on the Company's estimates of the amounts to be received as
the sales of pooled products are completed. Fluctuation in the
market prices for citrus fruit has caused the Company to recognize
additional revenue from the prior year's crop totaling $2,656,629,
$1,007,211, and $1,087,921 during fiscal years 1998, 1997 and 1996,
respectively.
(c) Real Estate
___________
Real estate sales are recorded under the accrual method of
accounting. Retail land sales are not recognized until payments
received, including interest, aggregate 10 percent of the
contract sales price for residential real estate or 20 percent
for commercial real estate. Sales are discounted to yield the
market rate of interest where the stated rate is less than the
market rate. The recorded valuation discounts are realized as
the balances due are collected. In the event of early
liquidation, interest is recognized on the simple interest
method.
Tangible assets that are purchased during the period to aid in
the sale of the project as well as costs for services performed
to obtain regulatory approval of the sales are capitalized as
land and land improvements to the extent they are estimated to be
recoverable from the sale of the property. Land and land
improvement costs are allocated to individual parcels on a per
lot basis using the relative sales value method.
The Company has entered into an agreement with a real estate
consultant to assist in obtaining the necessary regulatory
approvals for the development and marketing of a tract of raw
land. The marketing costs under this agreement are being
expensed as incurred. The costs incurred to obtain the necessary
regulatory approvals are capitalized into land costs when paid.
These costs will be expensed as cost of sales when the underlying
real estate is sold.
(d) Marketable Securities Available for Sale
________________________________________
Marketable securities available for sale are carried at the
estimate fair value of the portfolio. Net unrealized investment
gains and losses are recorded net of related deferred taxes in a
separate component of stockholders' equity until realized.
Fair value for debt and equity investments is based on quoted
market prices at the reporting date for those or similar
investments. The cost of all marketable securities available for
sale are determined on the specific identification method.
(e) Inventories
___________
Beef cattle inventories are stated at the lower of cost or
market. The cost of the beef cattle inventory is based on the
accumulated cost of developing such animals for sale.
Unharvested crops are stated at the lower of cost or market. The
cost for unharvested crops is based on accumulated production
costs incurred during the eight month period from January 1
through August 31.
(f) Property, Buildings and Equipment
_________________________________
Property, buildings and equipment are stated at cost. Properties
acquired from the Company's predecessor corporation in exchange
for common stock issued in 1960, at the inception of the Company,
are stated on the basis of cost to the predecessor corporation.
Property acquired as part of a land exchange trust is valued at
the carrying value of the property transferred to the trust.
The breeding herd consists of purchased animals and animals
raised on the ranch. Purchased animals are stated at cost. The
cost of animals raised on the ranch is based on the accumulated
cost of developing such animals for productive use.
Depreciation for financial reporting purposes is computed on
straight-line and accelerated methods over the estimated useful
lives of the various classes of depreciable assets.
(g) Income Taxes
____________
The Company accounts for income taxes under the asset and
liability method. Under this method, deferred tax assets and
liabilities are recognized for the future tax consequences
attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their
respective tax bases. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are
expected to be recovered or settled. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in
income in the period that includes the enactment date.
(h) Basic Earnings Per Share
________________________
Earnings per share has been computed by dividing net income by
the weighted average number of common shares outstanding during
the year. The Company has no diluting securities.
(i) Cash Flows
__________
For purposes of the cash flows, cash and cash investments include
cash on hand and amounts due from financial institutions with an
original maturity of less than three months.
(j) Reclassifications
_________________
Certain amounts from 1997 and 1996 have been reclassified to
conform to the 1998 presentation.
(k) Use of Estimates
________________
In preparing the consolidated financial statements, management is
required to make estimates and assumptions that effect the
reported amounts of assets and liabilities. Actual results could
differ significantly from those estimates. Although some
variability is inherent in these estimates, management believes
that the amounts provided are adequate.
(l) Financial Instruments and Accruals
__________________________________
The carrying amounts in the consolidated balance sheets for
accounts receivable, accounts payable and accrued expenses
approximate fair value, because of the immediate or short term
maturity of these items. The carrying amounts reported for the
Company's long-term debts approximate fair value, because the
instrument is a variable rate note which reprices frequently.
(2) Marketable Securities Available for Sale
________________________________________
The Company has classified 100% of its investments in marketable
securities as available-for-sale and, as such, the securities are
carried at estimated fair value. Any unrealized gains and losses,
net of related deferred taxes, are recorded as a net amount in a
separate component of stockholders' equity until realized.
The cost and estimated fair values of marketable securities available
for sale at August 31, 1998 and 1997 (in thousands) were as follows:
1998 1997
_____________________________ _____________________________
Gross Estimated Gross Estimated
Unrealized Fair Unrealized Fair
Cost Gains Losses Value Cost Gains Losses Value
_______ ____ ____ _______ ______ ______ ___ ________
Equity
securities $ 9,498 $444 $307 $ 9,635 $7,793 $1,450 $48 $ 9,195
Debt
securities 2,623 111 77 2,657 2,155 76 13 2,218
_______ ____ ____ _______ ______ ______ ___ _______
Marketable
securities
available
for sale $12,121 $555 $384 $12,292 $9,948 $1,526 $61 $11,413
_______ ____ ____ _______ ______ ______ ___ _______
_______ ____ ____ _______ ______ ______ ___ _______
At August 31, 1998, debt instruments (net of mutual funds of $1,708,757) are
collectible as follows: $17,964 within one year, $264,108 between one and
five years, $141,519 between five and ten years, and $490,107 thereafter.
(3) Inventories
___________
A summary of the Company's inventories (in thousands) at August 31,
1998 and 1997 is shown below:
1998 1997
_______ _______
Unharvested fruit crop on trees $ 7,466 $ 6,909
Unharvested sugarcane 2,358 2,322
Beef cattle 7,535 6,993
Sod 267 163
_______ _______
Total inventories $17,626 $16,387
_______ _______
_______ _______
Subject to prevailing market conditions, the Company may hedge a portion of its
beef inventory by entering into cattle futures contracts to reduce exposure
to changes in market prices. Any gains or losses anticipated under these
agreements will be deferred, with the cost of the related cattle being
adjusted when the contracts are settled.
(4) Property, Buildings and Equipment
_________________________________
A summary of the Company's property, buildings and equipment (in
thousands) at August 31, 1998 and 1997 is shown below:
Estimated
1998 1997 Useful Lives
_______ _______ ____________
Breeding herd $12,588 $12,127 5-7 years
Buildings 3,012 2,973 5-40 years
Citrus trees 20,321 19,820 22-40 years
Sugarcane 3,196 2,768 4-15 years
Equipment and other facilities 24,668 24,477 3-40 years
_______ _______
Total depreciable properties 63,785 62,165
Less accumulated depreciation 29,182 26,763
_______ _______
Net depreciable properties 34,603 35,402
Land and land improvements 43,279 34,544
_______ _______
Net property, buildings
and equipment $77,882 $69,946
_______ _______
_______ _______
The Company's citrus trees, fruit crop, unharvested sugarcane and
cattle are partially uninsured.
(5) Indebtedness
____________
The Company has unsecured financing agreements with commercial banks that
permit the Company to borrow up to $3,000,000 which is due on demand and up
to $27,000,000 which is due in 2000. Under these agreements, there was no
current debt as of August 31, 1998 and 1997. The total amount of long-term
debt under this agreement at August 31, 1998 and 1997 was $22,850,000 and
$12,856,000, respectively.
Interest cost expensed and capitalized (in thousands) during the three years
ended August 31, 1998, 1997 and 1996 was as follows:
1998 1997 1996
______ ______ ______
Interest expense $1,117 $ 444 $ 990
Interest capitalized 345 618 703
______ ______ ______
Total interest cost $1,462 $1,062 $1,693
______ ______ ______
______ ______ ______
(6) Employee Benefit Plans
______________________
The Company has a profit sharing plan covering substantially all employees.
The plan was established under Internal Revenue Code Section 401(k).
Contributions made to the profit sharing plan were $296,368, $230,545 and
$223,152 for the years ended August 31, 1998, 1997 and 1996, respectively.
Certain officers and employees also have employment contracts for additional
retirement benefits, the cost of which is accruable on a present value basis
over the remaining term of the employment agreements. The lives of such
officers and employees have been insured as a means of funding such
additional benefits. The accrued pension liability for these additional
retirement benefits at August 31, 1998 and 1997 was $3,320 and $3,133,
respectively.
Additionally, the Company implemented a nonqualified defined benefit
retirement plan covering the officers and other key management personnel of
the Company. The plan is being funded by the purchase of insurance
contracts. The accrued pension liability for the nonqualified defined
benefit retirement plan at August 31, 1998 and 1997 was ($14,950) and
$10,126, respectively.
Pension expenses for the additional retirement benefits were approximately
$345,000, $217,000 and $191,000 for the years ended August 31, 1998, 1997
and 1996, respectively.
(7) Income Taxes
____________
The provision for income taxes (in thousands) for the years ended August 31,
1998, 1997 and 1996 is summarized as follows:
1998 1997 1996
______ ______ ______
Current:
Federal income tax $3,012 $5,919 $1,974
State income tax 521 1,000 353
______ ______ ______
3,533 6,919 2,327
______ ______ ______
Deferred:
Federal income tax 611 (207) 48
State income tax 105 (35) 5
______ ______ ______
716 (242) 53
______ ______ ______
Total provision for
income taxes $4,249 $6,677 $2,380
______ ______ ______
______ ______ ______
Following is a reconciliation of the expected income tax expense computed
at the U.S. Federal statutory rate of 34% and the actual income tax
provision (in thousands) for the years ended August 31, 1998, 1997 and 1996:
1998 1997 1996
______ ______ ______
Expected income tax $3,748 $6,069 $2,319
Increase (decrease)
resulting from:
State income taxes, net
of federal benefit 400 648 248
Nontaxable interest
and dividends (92) (120) (174)
Other reconciling
items, net 193 80 (13)
______ ______ ______
Total provision for
income taxes $4,249 $6,677 $2,380
______ ______ ______
______ ______ ______
Some items of revenue and expense included in the statement of operations
may not be currently taxable or deductible on the income tax returns.
Therefore, income tax assets and liabilities are divided into a current
portion, which is the amount attributable to the current year's tax return,
and a deferred portion, which is the amount attributable to another year's
tax return. The revenue and expense items not currently taxable or
deductible are called temporary differences.
At August 31, 1998 the Company had an unused charitable contribution
carryover totaling $7,551,488. Management estimates that $303,000 will
be used to reduce taxable income over the next two years. As a result,
the estimated unusable portion of the carryover has been set up as the
valuation amount in the deferred tax asset schedule below. The contri-
bution carryover expires in 2000.
The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities are
presented below (in thousands):
1998 1997
_______ _______
Deferred Tax Assets:
Contribution carryover $(2,841) $(3,103)
Less valuation allowance 2,727 2,727
_______ _______
Net contribution carryover (114) (376)
Beef cattle inventory - (131)
Pension (284) (84)
Prepaid sales commissions (604) (489)
Other (289) (133)
_______ _______
Total gross deferred
tax assets (1,291) (1,213)
_______ _______
Deferred Tax Liabilities:
Revenue recognized from
citrus and sugarcane 1,174 432
Deferred revenues - 3,011
Property and equipment
(principally due to
depreciation and soil
and water deductions) 12,619 9,265
Mortgage notes receivable 29 348
Other 153 740
Unrealized gains on securities 64 -
_______ _______
Total gross deferred
tax liabilities 14,039 13,796
_______ _______
Net deferred income
tax liabilities $12,748 $12,583
_______ _______
_______ _______
The Company is currently under examination by the Internal Revenue Service
for the years ended August 31, 1991, 1992, 1993, 1994, 1995 and 1996. When
the examinations are resolved, any income taxes due will become currently
payable. However, the majority of the proposed adjustments relate to, among
other things, the Company's computation of the deferral of citrus revenue,
timing of deductions for certain expenses, and the determination of the
amounts of certain charitable contributions, all of which have been provided
for in the Company's deferred tax liability account. The Company plans to
continue to defend the positions taken in its amended tax returns. No
adjustments have yet been proposed for the years ended August 31, 1995 and
1996.
(8) Related Party Transactions
__________________________
Citrus
______
Citrus revenues of $24,018,251, $20,065,303 and $20,386,090 were recognized
for a portion of citrus crops sold under a marketing agreement with Ben
Hill Griffin, Inc. (Griffin) for the years ended August 31, 1998, 1997 and
1996, respectively. Griffin and its subsidiaries is the owner of 49.71
percent of the Company's common stock. Accounts receivable, resulting from
citrus sales, include amounts due from Griffin totaling $8,332,514 and
$5,549,080 at August 31, 1998 and 1997, respectively. These amounts
represent estimated revenues to be received periodically under pooling
agreements as the sale of pooled products is completed.
Harvesting, marketing, and processing costs, related to the citrus sales
noted above, totaled $7,610,639, $7,335,825, and $6,099,481 for the years
ended August 31, 1998, 1997 and 1996, respectively. In addition, Griffin
provided the harvesting services for citrus sold to an unrelated processor.
The aggregate cost of these services was $758,370, $779,715 and $767,144
for the years ended August 31, 1998, 1997 and 1996, respectively. The
accompanying consolidated balance sheets include accounts payable to Griffin
for citrus production, harvesting and processing costs in the amount of
$423,321 and $383,614 at August 31, 1998 and 1997, respectively.
Other Transactions
__________________
The Company purchased fertilizer and other miscellaneous supplies,
services, and operating equipment from Griffin, on a competitive bid basis,
for use in its cattle, sugarcane, sod and citrus operations. Such
purchases totaled $4,650,867, $4,451,224 and $5,535,086 during the years
ended August 31, 1998, 1997 and 1996, respectively.
(9) Accounting pronouncements
_________________________
For fiscal years beginning after December 31, 1997, the Financial Accounting
Standards Board (FASB) has released two new standards which the Company will
adopt in the fiscal year ending August 31, 1999.
Statement 130
_____________
Statement 130 requires that an enterprise compute and display comprehensive
income and its components in a full set of general-purpose financial
statements. Comprehensive income is defined as the change in equity of a
business enterprise during a period from transactions and other events and
circumstances from nonowner sources. It includes both net income and other
comprehensive income which caused the equity change.
Items included in other comprehensive income shall be classified based on
their nature. For example, it would include unrealized holding gains and
losses relating to securities transactions, and changes in market values of
futures contracts which qualifies as a hedge among other items. The total
of other comprehensive income for a period will be transferred to an equity
account and displayed as "accumulated other comprehensive income."
Statement 131
_____________
Statement 131 requires that public business enterprises report financial and
descriptive information about its reportable operating segments, including
the types of products and services from which each reportable segment
derives it revenues, measurement of segment profit or loss and segment
assets and the factors management used to identify the enterprise's
reportable segments. Management believes that information disclosed in
footnote 10 provides a substantial portion of the disclosures required by
this statement.
(10) Business Segment Information
____________________________
The Company is primarily engaged in agricultural operations, which are subject
to risk, including market prices, weather conditions and environmental
concerns. The Company is also engaged in retail land sales and, from time to
time, sells real estate considered surplus to its operating needs.
Information about the Company's operations (in thousands) for the years ended
August 31, 1998, 1997 and 1996 is summarized as follows:
1998 1997 1996
________ ________ ________
Revenues:
Agriculture:
Citrus $ 26,622 $ 22,287 $ 22,966
Sugarcane 6,123 4,967 5,851
Ranch 6,882 4,876 3,796
________ ________ ________
Total agriculture 39,627 32,130 32,613
Real estate 1,327 11,753 551
General corporate 3,725 3,550 2,925
________ ________ ________
Consolidated total $ 44,679 $ 47,433 $ 36,089
________ ________ ________
________ ________ ________
Operating income (loss):
Agriculture:
Citrus $ 8,677 $ 4,850 $ 7,584
Sugarcane 1,608 831 1,704
Ranch 615 765 (1,633)
________ ________ ________
Total agriculture 10,900 6,446 7,655
Real estate 875 11,271 56
General corporate 3,725 3,550 2,925
________ ________ ________
Total operating income 15,500 21,267 10,636
Interest expense (1,116) (444) (990)
General corporate expenses (3,359) (2,973) (2,826)
________ ________ ________
Income before
income taxes $ 11,025 $ 17,850 $ 6,820
________ ________ ________
________ ________ ________
1998 1997 1996
________ ________ ________
Capital expenditures:
Agriculture:
Citrus $ 1,071 $ 1,829 $ 2,734
Sugarcane 8,846 1,890 967
Ranch 1,864 1,159 2,786
Sod 7 39 54
Farm lands 177 340 365
Heavy equipment 177 91 89
________ ________ ________
Total agriculture 12,142 5,348 6,995
General corporate 45 404 147
________ ________ ________
Consolidated total $ 12,187 $ 5,752 $ 7,142
________ ________ ________
________ ________ ________
Depreciation, depletion and amortization:
Agriculture:
Citrus $ 1,944 $ 1,818 $ 1,706
Sugarcane 1,010 909 925
Ranch 1,346 1,101 1,040
Sod 17 17 49
Farm lands 37 19 11
Heavy equipment 293 306 311
________ ________ ________
Total agriculture 4,647 4,170 4,042
General corporate 70 70 94
________ ________ ________
Consolidated total $ 4,717 $ 4,240 $ 4,136
________ ________ ________
________ ________ ________
Identifiable assets:
Agriculture:
Citrus $ 48,052 $ 45,361 $ 47,874
Sugarcane 31,889 23,746 22,846
Ranch 17,295 16,355 13,710
Sod 473 379 247
Farm lands 1,702 1,561 1,240
Heavy equipment 1,214 1,246 1,461
________ ________ ________
Total agriculture 100,625 88,648 87,378
Real estate 9,452 9,835 10,177
General corporate 20,477 19,240 16,949
________ ________ ________
Consolidated total $130,554 $117,723 $114,504
________ ________ ________
________ ________ ________
Identifiable assets represents assets on hand at year-end which are
allocable to a particular segment either by their direct use or by
allocation when used jointly by two or more segments. General corporate
assets consist principally of cash, temporary investments, mortgage notes
receivable and property and equipment used in general corporate business.
SELECTED QUARTERLY FINANCIAL DATA
(UNAUDITED)
Summarized quarterly financial data (in thousands except for per share
amounts) for the years ended August 31, 1998 and August 31, 1997, is as
follows:
Quarters Ended
November 30, Feb. 28, May 31, August 31,
1997 1996 1998 1997 1998 1997 1998 1997
_______ _______ _______ _______ _______ _______ _______ ______
Revenue:
Citrus $ 3,815 $ 2,093 $ 8,373 $ 9,826 $ 7,693 $ 8,527 $ 6,741 $1,841
Sugarcane 1,700 1,078 2,797 3,518 1,530 153 96 218
Ranch 3,100 838 1,144 1,661 1,898 1,741 740 636
Property
sales 628 24 6 11,384 449 15 244 330
Interest 296 244 325 351 556 353 557 189
Other
revenues 529 535 432 494 543 661 487 723
_______ _______ _______ _______ _______ _______ _______ ______
Total
revenue 10,068 4,812 13,077 27,234 12,669 11,450 8,865 3,937
_______ _______ _______ _______ _______ _______ _______ ______
Costs and expenses:
Citrus 3,443 1,789 6,558 8,596 6,070 5,916 1,874 1,136
Sugarcane 1,475 828 2,240 3,263 824 - (25) 45
Ranch 2,818 566 1,015 1,344 1,686 1,642 748 559
Interest 170 249 208 60 256 73 483 62
Other 692 816 781 744 757 673 1,581 1,222
______ ______ ______ ______ ______ _____ _____ _____
Total costs
and ex-
penses 8,598 4,248 10,802 14,007 9,593 8,304 4,661 3,024
______ ______ ______ ______ ______ _____ _____ _____
Income be-
fore income
taxes 1,470 564 2,275 13,227 3,076 3,146 4,204 913
Provision for
income
taxes 523 182 825 4,970 1,174 1,154 1,727 371
______ ______ ______ ______ ______ ______ ______ _____
Net income $ 947 $ 382 $1,450 $8,257 $1,902 $1,992 $2,477 $ 542
______ ______ ______ ______ ______ ______ ______ _____
______ ______ ______ ______ ______ ______ ______ _____
Basic earnings
per share $ .13 $ .06 $ .21 $ 1.17 $ .27 $ .28 $ .35 $ .08
______ ______ ______ ______ ______ ______ ______ _____
______ ______ ______ ______ ______ ______ ______ _____
The weighted average number of shares outstanding totaled 7,027,827 shares
during each of the periods presented above.
Item 9. Disagreements on Accounting and Financial Disclosure.
_______________________________________________________________________
There were no disagreements on accounting and financial disclosures.
PART III
________
Item 10. Directors and Executive Officers of the Registrant.
_____________________________________________________________________
For information with respect to the executive officers of the
registrant, see "Executive Officers of the Registrant" at the end of Part I
of this report.
The information called for regarding directors is incorporated by
reference to Proxy Statement dated November 9, 1998.
Item 11. Executive Compensation.
_________________________________________
Item 12. Security Ownership of Certain Beneficial Owners and
_____________________________________________________________________
Management.
___________
Item 13. Certain Relationships and Related Transactions.
_________________________________________________________________
Information called for by Items 11, 12 and 13 is incorporated by
reference to Proxy Statement dated November 9, 1998.
PART IV
_______
Item 14. Exhibits, Financial Statement Schedules and Reports
_____________________________________________________________________
on Form 8-K.
____________
(a)1. Financial Statements:
____________________
Included in Part II, Item 8 of this Report
Report of Independent Certified Public Accountants
Consolidated Balance Sheets - August 31, 1998 and 1997
Consolidated Statements of Operations - For the Years Ended
August 31, 1998, 1997 and 1996
Consolidated Statements of Stockholders' Equity - For the
Years Ended August 31, 1998, 1997 and 1996
Consolidated Statements of Cash Flows - For the Years Ended
August 31, 1998, 1997 and 1996
(a)2. Financial Statement Schedules:
_____________________________
Selected Quarterly Financial Data - For the Years Ended
August 31, 1998 and 1997 - Included in Part II, Item 8
Schedule I - Marketable Securities and Other Investments -
For Year Ended August 31, 1998
Schedule V - Property, Plant and Equipment - For the Years
Ended August 31, 1998, 1997 and 1996
Schedule VI - Reserves for Depreciation, Depletion and
Amortization of Property, Plant and Equipment - For the
Years Ended August 31, 1998, 1997 and 1996
Schedule IX - Supplementary Income Statement Information -
For the Years Ended August 31, 1998, 1997 and 1996
All other schedules not listed above are not submitted because they are not
applicable or not required or because the required information is included
in the financial statements or notes thereto.
(a)3. Exhibits:
________
(3) Articles of Incorporation: *
Schedule I - Restated Certificate of Incorporation,
Dated February 17, 1972
Schedule II - Certificate of Amendment to Certificate
of Incorporation, Dated January 14, 1974
Schedule III - Amendment to Articles of Incorporation,
Dated January 14, 1987
Schedule IV - Amendment to Articles of Incorporation,
Dated December 27, 1988
Schedule V - By-Laws of Alico, Inc.,
Amended to September 13, 1994
(4) Instruments Defining the Rights of Security Holders,
Including Indentures - Not Applicable
(9) Voting Trust Agreement - Not Applicable
(10) Material Contracts - Citrus Processing and Marketing
Agreement with Ben Hill Griffin, Inc., dated November 2,
1983, a Continuing Contract. *
(11) Statement - Computation of Per Share Earnings
(12) Statement - Computation of Ratios
(18) Change in Accounting Principal - Not Applicable
(19) Annual Report to Security Holders - By Reference
(21) Subsidiaries of the Registrant - Not Applicable
(22) Published Report Regarding Matters Submitted to Vote of
Security Holders - Not Applicable
(23) Consents of Experts and Counsel - Not Applicable
(24) Power of Attorney - Not Applicable
(28) Information From Reports Furnished to State Insurance
Regulatory Authorities - Not Applicable
(99) Additional Exhibits - None
(b)3. Reports on Form 8-K:
___________________
Form 8-K dated December 2, 1997 regarding re-election of
Directors and election of Officers.
* Material has been filed with Securities and Exchange Commission
and NASDAQ and may be obtained upon request.
ALICO, INC.
SCHEDULE I
Marketable Securities and Other Investments
August 31, 1998
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
________ ________ ________ ________ ________
Amount of Which
Each Portfolio
of Equity Secu-
Number of Market rity Issues and
Shares or Value of Each Other Se-
Name of Issuer Units-Principal Cost of Each Issue curity Issue
and Title of Amounts of Bonds Each at Balance Carried in the
Each Issue and Notes Issue Sheet Date Balance Sheet
______________ _______________ ___________ ____________ ___________
Municipal Bonds $ 641,512 $ 641,512 $ 697,094 $ 697,094
Mutual Funds $6,141,508 6,141,508 6,186,615 6,186,615
Preferred Stocks 111,500 2,827,340 2,899,890 2,899,890
Common Stocks 44,784 1,592,173 1,649,813 1,649,813
Other
Investments $ 918,889 918,889 858,355 858,355
___________ ___________ ___________
Total: $12,121,422 $12,291,767 $12,291,767
___________ ___________ ___________
___________ ___________ ___________
ALICO, INC.
SCHEDULE V
PROPERTY, PLANT AND EQUIPMENT
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
________ _________ _________ ________ ________ ________
Other Changes
Balance Retire- Debit and/or Balance
Beginning Additions ments Credit- at Close
Description of Period at Cost or Sales Describe of Period
___________ _________ _________ _________ ___________ __________
For Year Ended August 31, 1998
______________________________
Land $14,368,962 $8,562,616 $ 92,516 $28,586* $ 22,867,648
Roads 953,181 4,645 957,826
Agricultural Land
Preparation 9,906 9,906
Forest Improvements 100,026 100,026
Pasture
Improvements 2,956,773 31,696 2,988,469
Buildings 2,973,486 122,727 102,213 2,994,000
Feeding and Watering
Facilities for
Cattle Herd 34,167 3,850 30,317
Water Control
Facilities 5,337 5,337
Fences 292,197 32,631 26,817 298,011
Cattle Pens 134,955 134,955
Citrus Groves,
Including Irrigation
Systems 38,422,614 800,602 199,257 39,023,959
Equipment 7,280,577 531,520 523,843 7,288,254
Breeding Herd 12,126,689 1,653,306 1,191,571 12,588,424
Sugarcane-Land Prep-
aration, Etc. 15,277,301 888,486 342,937 15,822,850
Sod Land-Prep-
aration, Etc. 180,938 3,978 184,916
Farm Land Prep-
aration 1,592,330 177,523 1,769,853
___________ ___________ __________ _______ ____________
$96,709,439 $12,809,730 $2,483,004 $28,586 $107,064,751
___________ ___________ __________ _______ ____________
___________ ___________ __________ _______ ____________
* Reclassification from other assets.
ALICO, INC.
SCHEDULE V
PROPERTY, PLANT AND EQUIPMENT
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
________ _________ _________ ________ ________ ________
Other Changes
Balance Retire- Debit and/or Balance
Beginning Additions ments Credit- at Close
Description of Period at Cost or Sales Describe of Period
___________ _________ _________ _________ ___________ __________
For Year Ended August 31, 1997
______________________________
Land $14,504,916 $ 334,165 $ 470,119 $ $14,368,962
Roads 745,525 207,656 953,181
Agricultural Land
Preparation 9,906 9,906
Forest Improvements 100,026 100,026
Pasture
Improvements 2,801,321 155,453 2,956,774
Buildings 3,037,575 6,007 70,096 2,973,486
Feeding and Watering
Facilities for
Cattle Herd 36,067 1,900 34,167
Water Control
Facilities 871,337 866,000 5,337
Fences 270,133 34,484 12,420 292,197
Cattle Pens 134,955 134,955
Citrus Groves,
Including Irrigation
Systems 38,634,654 1,532,126 1,744,166 38,422,614
Equipment 6,999,963 563,979 283,365 7,280,577
Breeding Herd 13,184,291 935,625 1,993,227 12,126,689
Sugarcane-Land Prep-
aration, Etc. 14,304,486 1,603,607 630,792 15,277,301
Sod-Land Prep-
aration, Etc. 141,922 39,016 180,938
Farm Land Prep-
aration 1,252,376 339,954 1,592,330
___________ __________ __________ ______ ___________
$97,029,453 $5,752,072 $6,072,085 $ 0 $96,709,440
___________ __________ __________ ______ ___________
___________ __________ __________ ______ ___________
ALICO, INC.
SCHEDULE V
PROPERTY, PLANT AND EQUIPMENT
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
________ _________ _________ ________ ________ ________
Other Changes
Balance Retire- Debit and/or Balance
Beginning Additions ments Credit- at Close
Description of Period at Cost or Sales Describe of Period
___________ _________ _________ _________ ___________ __________
For the Year Ended August 31, 1996
__________________________________
Land $14,409,797 $ 133,396 $ 38,277 $ $14,504,916
Roads 489,213 256,312 745,525
Agricultural Land
Preparation 9,906 9,906
Forest Improvements 100,026 100,026
Pasture Improve-
ments 2,363,419 434,194 3,708* 2,801,321
Buildings 3,034,835 82,938 80,198 3,037,575
Feeding and Watering
Facilities for
Cattle Herd 36,486 419 36,067
Water Control
Facilities 871,337 871,337
Fences 228,811 47,066 5,744 270,133
Cattle Pens 155,219 20,264 134,955
Citrus Groves,
Including Irri-
gation Systems 36,176,961 2,573,697 116,004 38,634,654
Equipment 6,815,062 328,372 143,471 6,999,963
Breeding Herd 12,094,179 2,165,878 1,075,766 13,184,291
Sugarcane-Land
Prep.,Etc. 12,907,640 715,188 681,658* 14,304,486
Sod-Land Prep-
aration,Etc. 1,118,258 44,615 335,585 (685,366)* 141,922
Farm Land Prep-
aration 892,218 360,158 1,252,376
___________ __________ __________ _________ ___________
$91,703,367 $7,141,814 $1,815,728 $ 0 $97,029,453
___________ __________ __________ _________ ___________
___________ __________ __________ _________ ___________
* Reclassification
(/TABLE>
ALICO, INC.
SCHEDULE VI
Reserves for Depreciation, Depletion and Amortization
of Property, Plant and Equipment
_____________________________________________________
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
________ __________ __________ __________ ________ ________
Additions Other
Balance Charged To Changes Balance
Beginning Profit & Loss Retire- Add(Deduct) at
Description of Period of Income ments Desccribe Close Of
___________ _________ ____________ __________ _________ ________
For Year Ended August 31, 1998
______________________________
Buildings $ 1,221,902 $ 135,690 $ 88,948 $ $ 1,268,644
Feeding and Watering
Facilities for
Cattle Herd 24,059 797 3,850 21,006
Water Control
Facilities 0 0 0 0
Fences 124,017 25,650 26,817 122,850
Cattle Pens 57,313 13,951 71,264
Citrus Groves,
Including Irriga-
tion Systems 9,894,285 1,604,182 199,256 11,299,211
Equipment 4,646,481 747,006 511,742 4,881,745
Breeding Herd 6,861,549 1,202,626 1,125,043 6,939,132
Roads 32,097 39,803 71,900
Sugarcane Lane Prep-
aration, Etc. 3,860,569 907,431 342,937 4,425,063
Sod Land Prepara-
tion, Etc. 3,957 3,542 7,499
Farm Land Preparation 37,561 36,541 74,102
___________ __________ __________ ____ ___________
$26,763,790 $4,717,219 $2,298,593 $ 0 $29,182,416
___________ __________ __________ ____ ___________
___________ __________ __________ ____ ___________
ALICO, INC.
SCHEDULE VI
Reserves for Depreciation, Depletion and Amortization
Property, Plant and Equipment
_____________________________________________________
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
________ __________ __________ __________ ________ ________
Additions Other
Balance Charged To Changes Balance
Beginning Profit & Loss Retire- Add(Deduct) at
Description of Period of Income ments Desccribe Close Of
___________ _________ ____________ __________ _________ ________
For Year Ended August 31, 1997
______________________________
Buildings $ 1,152,448 $ 139,550 $ 70,096 $ $ 1,221,902
Feeding and Watering
Facilities for
Cattle Herd 24,044 1,915 1,900 24,059
Water Control
Facilities 866,000 866,000 0
Fences 112,016 24,421 12,420 124,017
Cattle Pens 43,362 13,951 57,313
Citrus Groves,
Including Irriga-
tion Systems 10,189,551 1,448,900 1,744,166 9,894,285
Equipment 4,106,878 822,968 283,365 4,646,481
Breeding Herd 7,518,756 939,309 1,596,516 6,861,549
Roads 10,731 21,366 32,097
Sugarcane-Land Prep-
aration, Etc. 3,683,734 807,626 630,791 3,860,569
Sod-Land Prepara-
tion, Etc. 2,054 1,903 3,957
Farm Land Preparation 19,353 18,208 37,561
___________ __________ __________ ____ ___________
$27,728,927 $4,240,117 $5,205,254 $ 0 $26,763,790
___________ __________ __________ ____ ___________
___________ __________ __________ ____ ___________
ALICO, INC.
SCHEDULE VI
Reserves for Depreciation, Depletion and Amortization
Property, Plant and Equipment
_____________________________________________________
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
________ __________ __________ __________ ________ ________
Additions Other
Balance Charged To Changes Balance
Beginning Profit & Loss Retire- Add(Deduct) at
Description of Period of Income ments Desccribe Close Of
___________ _________ ____________ __________ _________ ________
For the Year Ended August 31, 1996
__________________________________
Buildings $ 1,092,981 $ 139,665 $ 80,198 $ $ 1,152,448
Feeding and Watering
Facilities for
Cattle Herd 21,741 2,722 419 24,044
Water Control
Facilities 866,000 866,000
Fences 96,330 21,430 5,744 112,016
Cattle Pens 49,676 13,951 20,265 43,362
Citrus Groves,
Including Irrigation
Systems 9,002,178 1,303,376 116,003 10,189,551
Equipment 3,329,601 904,448 127,171 4,106,878
Breeding Herd 7,559,946 867,887 909,077 7,518,756
Roads 0 10,731 10,731
Sugarcane-Land
Prep.,Etc. 2,752,281 827,397 104,056* 3,683,734
Sod-Land Prep-
aration, Etc. 174,201 33,524 101,615 (104,056)* 2,054
Farm Land
Preparation 8,151 11,202 19,353
___________ __________ __________ _______ ___________
$24,953,086 $4,136,333 $1,360,492 $ 0 $27,728,927
___________ __________ __________ _______ ___________
___________ __________ __________ _______ ___________
* Reclassification
ALICO, INC.
SCHEDULE IX
____________
SUPPLEMENTARY INCOME STATEMENT INFORMATION
__________________________________________
_____________________________________________________________________________
COLUMN A COLUMN B
_____________________________________________________________________________
Charged to Costs and Expenses
_____________________________
Years Ended August 31,
______________________
Item 1998 1997 1996
____ ____ ____ ____
1. Maintenance and repairs $1,025,739 $ 990,184 $ 858,253
2. Taxes, other than payroll
and income taxes 1,805,322 1,755,168 1,476,159
EXHIBIT 11
ALICO, INC.
Computation of Weighted Average Shares Outstanding as of August 31, 1998:
Number of shares outstanding at August 31, 1997 7,027,827
_________
_________
Number of shares outstanding at August 31, 1998 7,027,827
_________
_________
Weighted Average 9/1/97 - 8/31/98 7,027,827
_________
_________
EXHIBIT 12
ALICO, INC.
Computation of Ratios:
1997 Current Assets $37,887,320
Current Liabilities 4,988,115
37,887,320 divided by 4,988,115 = 7.59:1
1998 Current Assets $42,354,043
Current Liabilities 5,649,482
42,354,043 divided by 5,649,482 = 7.50:1
Pursuant to the requirements of Section 13 of the Securities Exchange Act
of 1934, as amended, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
ALICO, INC.
(Registrant)
November 17, 1998 Ben Hill Griffin, III
Date Chairman, Chief Executive
Officer and Director
(Signature)
November 17, 1998 W. Bernard Lester
Date President, Chief Operating
Officer and Director
(Signature)
November 17, 1998 L. Craig Simmons
Date Vice President and
Chief Financial Officer
(Signature)
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the date indicated:
Richard C. Ackert Ben Hill Griffin, IV
Director Director
(Signature) (Signature)
J. C. Barrow, Jr. K. E. Hartsaw
Director Director
(Signature) (Signature)
William L. Barton Thomas E. Oakley
Director Director
(Signature) (Signature)
Walker E. Blount, Jr.
Director
(Signature)
November 17, 1998
Date