Q4 2023 Alico Inc Earnings Call

Okay.

Speaker 1: Good morning. Welcome to OLECO's fourth quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode. As a reminder, today's conference is being recorded.

Good morning, welcome to <unk> fourth quarter 2023 earnings conference call. At this time all participants are in a listen only mode. As a reminder, today's conference is being recorded.

Speaker 1: Last night, the company issued a press release announcing its results for the fourth quarter and full year ended September 30, 2023. If you have not had a chance to view the release, it is available on the Investor Relations portion of the company's website at alicoinc.com. This call is being webcast and a replay will be available on Alico's website as well.

Last night the company issued a press release announcing its results for the fourth quarter and full year ended September 30th 2023. If you had not have not had a chance to view this.

The release is available on the Investor Relations portion of the company's website at illegal Inc. Dot Com. This call is being webcast and a replay will be available on the league goes website as well.

Speaker 1: Before we begin, I would like to remind everyone that the prepared remarks today contain forward-looking statements. Such statements are subject to risks, uncertainties, and other factors that may cause actual results to differ materially from those expressed or implied in these statements.

Before we begin I would like to remind everyone that the prepared remarks today contain forward looking statements such statements are subject to risks uncertainties and other factors that may cause actual results to differ materially from those expressed or implied in these statements.

Speaker 1: Important factors that could cause or contribute to such differences include risk details in the company's quarterly reports on Form 10Q, annual reports on Form 10K, and the contracts on Form 10K.

Important factors that could cause or contribute to such differences include risk details in the company's quarterly reports on Form 10-Q annual reports on Form 10-K.

Speaker 1: current reports on Form 8K and any amended statements thereto filed with the SEC and those mentioned in the earnings release. The company undertakes no obligation to subsequently update or revise the forward-looking statements made on today's call except as required by law.

Current reports on form 8-K, and any amendments statements that you filed with the SEC and those mentioned in the earnings release. The company undertakes no obligation to subsequently update or revise the forward looking statements made on today's call except as required by law.

Speaker 1: During this call, the company will also discuss non-GAAP financial measures including EBITDA and adjusted EBITDA.

During this call. The company will also discuss non-GAAP financial measures, including EBITDA and adjusted EBITDA.

Speaker 1: For more details on these measures, please refer to the company's press release issued earlier today.

For more details on these measures please refer to the company's press release issued earlier today.

Speaker 1: With that, I will turn the call over to the company's President and CEO , Mr. John Kiernan. Please go ahead, sir.

With that I will turn the call over to the company's President and CEO Mr. John <unk>. Please go ahead Sir.

Speaker 2: Thank you, Melissa. Thank you everyone for joining us for a week. Those fourth quarter 2020 three earnings call this morning.

Thank you Melissa and thank you everyone for joining us for a week goes fourth quarter 2023 earnings call. This morning.

Speaker 2: During 2023, Alico was recovering from the aftermath of Hurricane Ian that occurred in September of 2022, which damaged half of our crops intended for the 2023 harvest season, and our financial results were disappointing as expected.

During 2023, a week ago was recovering from the aftermath of hurricane in that occurred in September of 2022.

With Savage half of our crops intended for the 2023 harvest season.

<unk> results were disappointing as expected.

Speaker 2: The overall decrease in box production for Alico was 51.5% for the 2022-2023 harvest season versus the prior year.

The overall decrease in box production for a week out was 51, 5% for the 2022 2023 harvest season versus the prior year.

Speaker 2: The USDA reported a 61.7% decrease in box production for the overall Florida orange crop as compared to the same period in the prior year.

U S D. A reported a 61, 7% decrease in box production for the overall, Florida Orange crop as compared to the same period in the prior year.

Speaker 2: with the approximately 28.2 million of insurance proceeds that we received during the fiscal year, were used to help maintain our Grove caretaking programs for our approximately 49,000 citrus acres located across seven counties in Florida so that Alico will be ready to harvest a healthy citrus crop in 2023, 2024.

Approximately $28 2 million of insurance proceeds that we received during the fiscal year, we used to help maintain our growth caretaking programs for our approximately 49000 and citrus acres located across seven counties in Florida. So.

So that we'd go will be ready to harvest healthy citrus crop in 2023 2024.

Speaker 2: We continue to hope to receive federal disaster relief funds from the Consolidated Appropriations Act that was passed into law in December of 2022, although we cannot determine the amount of relief we may be eligible for or the timing of any possible relief fund payments.

We continue to hope to receive federal disaster relief funds from the consolidated Appropriations Act that was passed into law in December of 2022.

Although we cannot determine the amount of every week, we may be eligible for or the timing of any possible refund payments.

Speaker 2: To that end, OECO continues to support Florida Citrus Mutual, our industry trade group, as well as government officials and agencies as they work to finalize federal relief programs for this 2022 storm.

To that end, we co continues to support Florida, Citrus mutual our industry trade group as well as government officials and agencies as they work to finalize federal relief programs for this 2022 store.

Speaker 2: Although our 2023-2024 harvesting activities are just beginning now, we are confident that Aleco's crop recovery this season will be significant because of our exceptional caretaking practices and the maturity of over 2 million trees planted by the company since 2017.

Although our 2023 2020 for harvesting activities are just beginning now we're confident that a weaker crop recovery. This season will be significant because of our exceptional caretaking practices and the maturity of over 2 million trees planted by the company since 2017.

Speaker 2: In addition, over 35% of our trees have now been treated with an oxytetracycline injection since January 2023 to combat citrus greening with the goal to improve fruit quality and decrease the rate of fruit drop.

In addition over 35% of our trees have now been treated with an oxy tetracycline injections since January 2023, the combat citrus screening with the goal to improve fruit quality and decrease the rate of fruit drop.

Speaker 2: Full extent of the benefits of that treatment will not be measurable until after the 2023-2024 harvest.

The full extent of the benefits of that treatment will not be measurable until after the 2023 2020 for harvest.

Speaker 2: Aweco is proud to share that in fiscal 2024, it has already partnered with another large citrus grower to manage approximately 3,300 acres of their citrus groves, with all expenses reimbursed and a management fee paid to us for our services. We believe that our

A week always proud to share that in fiscal 2024. It is already partnered with another large citrus growers to manage approximately 3300 acres of their citrus groves with all expenses reimbursed in a management fee paid management fees paid to us for our services.

We believe that our balance sheet is one of our greatest strengths.

Speaker 2: Our working capital line of credit allowed us the financial flexibility to work through an extremely challenging year with significantly reduced revenues while ensuring that we could continue to operate and invest in our business.

Our working capital line of credit.

Loud us the financial flexibility to work through an extremely challenging year with significantly reduced revenues, while ensuring that we could continue to operate and invest in our business.

Speaker 2: While our debt levels have increased, approximately $18 million during the year ended September 30, 2023.

While our debt levels have increased approximately $18 million during the year ended September 32023.

Speaker 2: We continue to have $70 million available of undrawn credit, which is comprised of approximately $45 million on our working capital line of credit, which matures in November of 2025.

We continue to have $70 million available of Undrawn credit, which is comprised of approximately 45 million on our working capital line of credit, which matures in November of 2025.

Speaker 2: as well as a $25 million of undrawn credit on the revolving line of credit, which matures in November of 2029.

As well as a $25 million of Undrawn credit on our.

Our revolving line of credit, which matures in 2000 and November of 2029.

Speaker 2: We believe that these credit facilities provide ALECO with ample liquidity while the company continues to recover from the impact of recent weather events.

We believe that these credit facilities provide a week out with ample liquidity, while the company continues to recover from the impact of recent weather events.

Speaker 2: During the year ended September 30, 2023, we sold approximately 2,255 acres of ranch land for approximately $12 million.

During the year ended September 32023, we sold approximately 2255 acres of ranch land for approximately $12 million.

Speaker 2: Also, in the current fiscal year, we closed on two very small citrus grove purchases that are contiguous with one of our groves.

Also in the current fiscal year, we closed on two very small citrus grow purchases that are contiguous with one of our growth.

Speaker 2: On September 18th, 2023, Alico signed a contract with the state of Florida to sell the remaining 17,229 acres of the Alico Ranch for approximately $77.6 million.

On September 18th 2023, a week signed a contract with the state of Florida to sell the remaining 17229 acres of the Leeco ranch for approximately $77.6 million.

Speaker 2: The deal is anticipated to close by February 2024.

The deal was anticipated to close by February 2024.

Speaker 2: Once closed, we will have sold a total of approximately 69,000 acres of the Orico Ranch for approximately $226 million to more than 25 buyers since 2018.

Once closed we will have sold a total of approximately 69000 acres of the weaker ranch for approximately $226 million to more than 25 buyers since 2018.

Speaker 2: Plans for the use of proceeds are being finalized with reducing balances on our working capital credit line incurred during Hurricane Ian as a priority.

Plans for the use of proceeds are being finalized with reducing balances on our working capital credit might incur during hurricane Ian as a priority.

Speaker 2: as well as repayment of variable rate debt balances without penalty and for general corporate purposes.

As well as repayment of variable rate debt balances without penalty and for general corporate purposes.

Speaker 2: possible that net operating losses incurred over the past two years will shield a significant amount of the expected gain on the pending ranch sale and it is also possible that if the proceeds are used to repay variable debt balances

It is possible that net operating losses incurred over the past two years will shield a significant amount of the expected gain on the pending ranch sale and it is.

It's also possible that if the proceeds are used to repay variable debt balances the company's net debt balances could range between $75 million and $80 million at the end of fiscal 2024, which is a substantial decrease from the $127 6 million net debt balance.

Speaker 2: The company's net debt balances could range between $75 million and $80 million at the end of fiscal 2024, which is a substantial decrease from the $127.6 million net debt balance at September 30, 2023.

At September 32023.

Yeah.

Speaker 2: Outside of our citrus operations, Aweco recently concluded its work with land use planning professionals in Florida, evaluating the long-term potential highest and best use for our real estate assets.

Outside of our citrus operations a week a recently concluded its work with land use planning professionals in Florida evaluating the long term potential highest and best use for our real estate assets.

Speaker 2: be clear. Alico will continue to conduct our regular citrus operations at all of our groves for years to come.

To be clear a vehicle will continue to conduct our regular citrus operations at all of our growth for years to come.

Speaker 2: But the work of those land planning professionals led to a decision by ELECO to commence the multi-year entitlement process for a 4,500-acre grove near Fort Myers here in Collier County.

But the work of those land planning professionals led to a decision by a week ago to commence the multiyear entitlement process for a 4500 acre Grove near Fort Myers hearing Collier County.

Speaker 2: Finally, all OECO shareholder litigation related to the balance sheet restatement last year, last December , has been voluntarily dismissed without prejudice by all the plaintiffs.

Finally.

A week ago shareholder litigation related to the balance sheet restatement last year last December has been voluntarily dismissed without prejudice by all the plaintiffs.

Speaker 2: With that, I will turn the call over to Brad, who will discuss in more detail our financial results.

With that I'll turn the call over to Brad who will discuss in more detail our financial results.

Speaker 3: Thank you, John , and good morning, everyone. As our fourth quarter is not indicative of our full year results due to the seasonal nature of our business, I will focus primarily on our full year 2023 results today. As a reminder, the majority of our citrus crop is harvested in the second and third quarters of the fiscal year. And as such, the majority of our profit and cash flows are also recognized in the second and third quarter.

Thank you John and good morning, everyone as our fourth quarter is not indicative of our full year results due to the seasonal nature of our business I will focus primarily on our full year 2023 results today as a reminder, the majority of our citrus crop is harvested in the second and third quarters of the fiscal year and as such the majority of our profit and cash flows are also recognized in the second and third.

Orders.

Speaker 3: For the fiscal year-ended September 30, 2023, total operating revenue was $39.8 million compared to $91.9 million for the fiscal year-ended September 30, 2022. Citrus revenue was $38.1 million and $89.7 million for the fiscal year-ended September 30, 2023 and 2022, respectively.

For the fiscal year ended September 32023, total operating revenue was $39 8 million compared to 91 9 million for the fiscal year ended September 32022, Citrus revenue was $38 1 million an $89.7 million for the fiscal year ended.

September 32023, and 2022, respectively.

Speaker 3: The decrease in revenue for the fiscal year ended September 30, 2023, compared to September 30, 2022, was driven by a decrease in the amount of food harvested as a result of the food drop caused by Hurricane Ian, a decrease in pound solids per box, and a 10.7 million decrease in our growth management services revenue as a result of the termination of a property management agreement in June , 2022.

The decrease in revenue for the fiscal year ended September 32023, compared to September 32022 was driven by a decrease in the amount of food harvested as a result of the food drop caused by hurricane in a decrease in pound solids per box and a $10 7 million decrease in our gross management services revenue as a result of the termination of a property match.

Men agreement in June 2022.

While the impact to our fiscal year 2023 crop of substantial there does not appear to be long term measurable damage to our citrus trees.

Speaker 3: While the impact to our fiscal year 2023 crop was substantial, there does not appear to be long-term measurable damage to our citrus trees.

Speaker 3: The decrease in pound solids per box was mainly due to the internal quality of our fruit not being as strong as it was in the prior year. In addition, we accelerated the harvesting of both the early and mid-season and Valencia crop to minimize the fruit drop as a result of the impact of Hurricane Ian with the intent to maximize our box production and as such, we realized a lower pound solids per box.

The decrease in pound sales per box was mainly due to the internal quality of our fruit not being as strong as it was in the prior year. In addition, we accelerated the harvesting of policy early and mid season in Valencia crop to minimize food drop as a result of the impact of hurricane Ian with the intent to maximize our box production and as such we realized a lower.

Pound solids per box.

Speaker 3: Partially offsetting the decrease in processed box production and pound solids per box was an increase in the price per pound solids. The 2.6% improvement in our average realized price per pound solids for the year ended September 30, 2023, as compared to the prior year, was due to the overall lower production of citrus.

Partially offsetting the decrease in process box production and pound sales per box was an increase in the price per pound solids that two 6% improvement in our average realized price per pound solids for the year ended September 32023, as compared to the prior year was due to the overall lower production of citrus fruit.

Speaker 3: Total operating expenses were $33.4 million for the year ended September 30, 2023, as compared to $106.7 million in the same period in the prior year.

Total operating expenses were $33 4 million for the year ended September 32023, as compared to $106 7 million in the same period in the prior year.

Speaker 3: The decrease in operating expenses primarily relates to the $28.2 million of insurance proceeds received during the year-end of September 30, 2023, inventory adjustments recorded in fiscal year 2022's ending inventory balance as a result of the impact of Hurricane Ian, which effectively lowered the inventory to be expensed in fiscal year 2023, a reduction in harvest and haul expenses as a result of the lower box production, and a decrease in growth management services expense.

The decrease in operating expenses, primarily relates to the $28 2 million of insurance proceeds received during the year ended September 32023 inventory adjustments recorded in fiscal year, 2020, two's ending inventory balance as a result of the impact of hurricane Dorian, which effectively lowered the inventory to be expensed in fiscal year 2023.

A reduction in harvest and haul expenses as a result of the lower box production and a decrease in Grove management services expense the.

Speaker 3: The company realized an overall decrease in its harvest and hauling expenses. However, the harvesting cost per box increased for the year ended September 30, 2023 as compared to the prior year. Due to an increase in the harvesting labor costs, as well as the increased time spent by the harvesters to fill the boxes as a result of the increased fruit drop.

The company realized an overall decrease since harvesting hauling expenses. However, the harvesting cost per box increase for the year ended September 32023, as compared to the prior year due to an increase in the harvesting labor costs as well as the increased time spent by the harvesters to fill the boxes as a result of the increased food traffic.

Speaker 3: These decreases were partially offset by additional costs incurred in relation.

These decreases were partially offset by additional costs incurred in relation.

Speaker 3: to clean up the repairs as a result of Hurricane Ida.

To clean up your repairs as a result of Hurricane Maria.

Speaker 3: The decrease in grove management services expense is directly related to the termination of the property management services by the grove owners in June .

The decrease in gross management services expenses directly related to the termination of the property management service.

Services by the girl of honors in June 2022.

Speaker 3: The decision by the grove owners to exit the citrus business eliminated the need for the caretaking management services for the grove owners. As a result, caretaking expenses decreased significantly during the year end of September 30, 2023 compared to the prior year.

The decision by the girl hunters to exit the citrus business eliminated the need for the care taking management services for the Grove owners as a result of care taking expenses decreased significantly during the year ended September 32023 compared to the prior year.

Speaker 3: General administrative expenses for the year ended September 30, 2023 were $10.6 million compared to $10.1 million for the year ended September 30, 2022.

General and administrative expenses for the year ended September 32023 were $10 6 million compared to $10 1 million for the year ended September 32022.

Speaker 3: The increase was probably due to an increase in legal and professional fees as compared to the same period in the prior year.

The increase was primary due to an increase in legal and professional fees as compared to the same period in the prior year.

Speaker 3: Other income net for the year ended September 30, 2023 and 2022 was $6.7 million and $37.8 million respectively.

Other income net for the year ended September 32023, and 2022 was $6 7 million and $37 $8 million respectively. The decrease in other income that is probably due to fewer land sales closing during the year, which resulted in lower gains from the sale of property equipment during.

Speaker 3: The decrease in other income net is probably due to fewer land sales closing during the year, which resulted in lower gains in the sale of property equipment. During the year end of September 30, 2023, the company sold approximately 2,255 acres of Alico Ranch and recognized a gain of approximately $11.4 million. By comparison, for the year end of September 30, 2022, the company recognized gains of $41.1 million related to the sale of property and equipment.

During the year end September 32023, the company sold approximately 2255 acres of all Eco ranch and recognized a gain of approximately $11 4 million by comparison for the year ended September 32022, the company recognized gains of $41 1 million related to the sale of property and equipment.

Speaker 3: In addition, the company recognized an increase in interest expense of $1.6 million for the year ended September 30, 2023, as compared to the prior year, as a result of higher balance on the working capital line of credit and an increase in the overall interest rates on its variable rate term debt and the working capital line of credit.

In addition, the company recognized an increase in interest expense of $1 6 million for the year ended September 32023, as compared to the prior year as a result of higher balance on the working capital line of credit and an increase in the overall interest rates on its variable rate term debt and the working capital line of credit.

Speaker 3: For the fiscal year ended September 30, 2023 and 2022, we reported net income attributable to legal common stockholders of $1.8 million and $12.5 million, respectively. Our adjusted EBITDA was a loss of $16.1 million for the year ended September 30, 2023, as compared to income of $13.4 million for the prior fiscal year.

For the fiscal year ended September 32023, and 2022, we reported net income attributable to illegal common stockholders of $1 8 million and $12 5 million respectively. Our adjusted EBITDA was a loss of $16 1 million for the year ended September 30, 'twenty two 'twenty three as compared to income of $13 four.

<unk> for the prior fiscal year.

Leeco continues to maintain a strong balance sheet, our working capital was approximately $43 7 million as of September 32023, representing a $3 nine to one ratio and we continue to maintain a solid debt to equity ratio of <unk> 301, and 0.27 to one at September 32023, and 2022 respects.

Speaker 3: LECO continues to maintain a strong balance sheet. Our working capital was approximately $43.7 million at September 30, 2023, representing a 3.9 to 1 ratio, and we continue to maintain a solid debt-to-equity ratio of 0.3 to 1 and 0.27 to 1 at September 30, 2023 and 2022, respectively. I will now pass the call back to...

Ali.

I will now pass the call back to John.

Thanks, Brad.

Speaker 2: Although we've experienced a difficult harvest season, WECO has never lost our focus on caretaking for the fiscal year 2024 harvest.

Although we've experienced a difficult harvest season weaker was never lost our focus on care, taking for the fiscal year 2020 for harvest.

Rico continues to invest in its grows we've applied the OTC therapy to over 35% of our trees and since 2017, we planted over 2 million trees.

These investments along with our tested oil and best in class team members and exceptional caretaking practices.

Should support a significant increase in fruit harvested during the next season.

Speaker 2: WECO has over 125 years of experience as a leader in Florida agriculture and land management.

We go has over 125 years of experience as a leader in Florida, Agriculture, and land management, we will continue evaluating all of our properties to determine their highest and best use to create long term value for our shareholders.

Speaker 2: We will continue evaluating all of our properties to determine their highest and best use to create long term value for our shareholders.

Speaker 2: AWECO strives to provide our investors with the benefits and stability of conventional agricultural investments with the enhanced optionality that comes through active land management.

We strive to provide our investors with the benefits and stability of conventional agricultural investments with the enhanced optionality that comes through active land management.

Speaker 2: And with that, we will now open the line up to questions from industry analysts. Melissa.

And with that we'll now open the line up to questions from industry analysts.

Uh huh.

Speaker 1: Thank you. If you'd like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star 2.

Thank you if you'd like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question. Kim You May press star two if you'd like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star keys.

Speaker 1: Our first question comes from the line of Jerry Sweeney with Roth MKM. Please proceed with your question.

Our first question comes from the line of Gerry Sweeney with Roth M. Kam. Please proceed with your question.

Speaker 4: Hey, good morning, guys. Thanks for taking my call. Morning, Jerry. Just wanted to start with the Citrus side and then maybe go to the potential real estate side, but obviously we're coming into a new season.

Hey, good morning, guys. Thanks for taking my call.

Morning, Jerry.

Just wanted to start with the citrus side and then maybe go to the potential real estate side, but obviously, we're coming into a new season I just want to see.

When you would have some clarity on maybe the size quality and maybe the overall recovery aspect of the trees after our.

Last year's Hurricane Ian.

Speaker 2: So the simplest answer most likely would be in another couple of months we will have been able to evaluate our early mid-season and we'll be able to evaluate really the impact of kind of the OTC treatment on that season. And that will hopefully give us some sort of indication of what we might be able to expect for the Valencia crop that's going to be harvested during the remaining part of the season.

So the simplest answer most likelihood be in another couple of months, we will have been able to evaluate our early mid season, and we'll be able to evaluate really the impact of of kind of the OTC treatment on that season.

And that will hopefully give us some sort of indication of what we might be able to expect for the Valencia crop that's going to be harvested during the remaining part of the season.

Speaker 4: Just speaking, and OTC was my next question, it was, I'm going to wrap up a couple questions and one comment.

Just speaking in OTC was my next question it was.

And to wrap up a couple of questions and one comment so I apologize, but obviously O T C b.

Big deal with the the citrus.

Industry in Florida.

Speaker 4: We've heard varying commentary, you know, on the efficacy, all very positive, all from very positive.

Third varying commentary you know on the efficacy all very positive all from very positive extremely positive, but would you be able to see some of the impacts with you early amidst I mean, I believe it should help reduce.

Speaker 4: But would you be able to see some of the impacts with your early and mids? I mean, I believe it should help reduce some fruit drop, et cetera, just make the tree stronger.

Some fruit drop et cetera, just make the tree stronger and.

Some benefits along those lines. So one can you see.

Some benefit today as you're going into the early to mid season and to you know.

Do you have any commentary around maybe the efficacy of the treatment.

Speaker 2: I can't really speak to the efficacy at this point. We'd like to evaluate that at the end of a complete season. But visually, you can see a noticeable difference between trees that have been treated with the OTC this past season and those that haven't. The ones that haven't looked...

Can't really speak to the to the efficacy at this point, we'd like to evaluate that at the end of a complete season.

But visually you can see a noticeable difference between trees that have been treated with the OTC. This past season and those that haven't.

The ones that haven't booked.

Speaker 2: good and the trees that have been treated with the OTC look better is the simplest way. And when we have you come down to Florida, you can see for yourself. The real test is how much of additional time the OTC treatment will allow that fruit to mature and stay on the tree longer by reducing the rate of the fruit drop. And hopefully it's going to improve the fruit quality enough that you get a little bit of extra juice out of that, which clearly is what we're looking for here. Got it.

Good and the trees that have been treated with the OTC look better as is the simplest way and when we have it come down to 40, you can see for yourself.

The real test is how much of additional time, the OTC treatment will allow that fruit to mature and stay on the tree longer by reducing the rate of the fruit drop.

And hopefully it's going to improve their fruit quality enough that you get a little bit of extra juice out of that which clearly is what we're looking for here.

Got it.

And then finally.

Can you give us just an update on your contracts I think in your.

Speaker 4: Give us just an update on your contracts. I think in your press release you stated that you thought price per pound solids would be up year over year.

Your press release, you stated that you thought I think price per pound solids would be up year over year.

I believe some of that has to deal with the structure of your contracts and then secondarily.

When do some of them when do the nearest contracts expire or do you go into any contract negotiations.

Anytime.

The near future.

Yeah.

Speaker 3: Hey, Jerry, this is Brad. So yeah, on the contracts, we renewed our mo to a contract just over the summer. So that was renewed at a higher price point. So we expect to see some pickup there as far as what the what we will realize from that contract. That contract runs until the 2425 citrus here.

Hey, Jerry this is Brad so yeah on the contracts, we renewed our M O to O contract.

Just over the summer so that was renewed at a higher price point. So we expect to see some pick up there as far as what the what we will realize from under that contract that contract runs until the 'twenty four 'twenty five citrus here.

Speaker 3: then we are in the final year of the other contracts with Tropicana and those run until the end of this harvest season. So those contract negotiations will begin soon. Across the board with all the process.

And we are in the final year of the other contracts with Tropicana and those run until the end of this harvest season. So those contract negotiations will begin soon.

Across the board with all of the processes here in the states.

Speaker 4: Uh, gotcha. Now, I'm going to ask a question. Probably can't answer it. I mean, I know Brazil's tough, global, orange, I think, uh, production is down.

Oh.

Gotcha now I'm going to ask a question probably can't answer it I mean, I know, Brazil is tough global Orange I think.

<unk> is down.

I would imagine that puts you in good position for some of these contract negotiations coming up.

No comment.

Yeah.

Speaker 2: We've been working together a long time, Jerry, we're not going to no comment you on a call like this, but I will say that the supply of oranges in Florida is expected to rebound, but it's at a slower rate than I'm sure the processors would hope for. So clearly the need for imports is going to continue in the near term, foreseeable future.

We've been working together a long time Jerry.

We're not going to no comment you on a call like this but I will say that the supply of Orange is in Florida is expected to rebound, but its at a slower rate than I'm sure. The processors would would hope for.

So clearly the need for imports is going to continue in the near term foreseeable future.

Speaker 2: We feel good at Aleco here that our ability to supply is going to grow as we planted more trees and those trees are reaching maturity as well as hopefully the benefits of the OTC treatment on those trees and the caretaking practices that we spent a lot of money and time and resources to kind of improve year over year over year. So we hopefully are going to continue to be a very strong, consistent supplier.

We feel good at a week go here that our ability to supply is going to grow as we planted more trees and those trees are reaching maturity as well as hopefully the benefits of the OTC treatment on those trees and the caretaking practices that we spent a lot of money and time and resources.

To kind of improve year over year over year.

So we hopefully are going to continue to be a very strong consistent supplier.

Speaker 2: As the global supply maybe shrinks and our supply basically increases, hopefully we're going to be able to take advantage of that on behalf of our shareholders to increase our revenues, which hopefully is going to go straight to the bottom line and hopefully improve our profitability in the next set of contract terms. Got it.

As the global supply, maybe shrinks and our supply basically increases hopefully we're going to be able to take advantage of that on behalf of our shareholders to increase our revenues, which hopefully is going to go straight to the bottom line.

Hopefully and improve our profitability and in the next set of contract terms.

Got it.

Two more quick questions. Obviously, you know the real estate's a land use planning commentary I think it's important you know best use of land and I think.

Speaker 4: You're regarding a particular orchard near Fort Myers. What are the next steps? What should we watch for as you go through that process?

Regarding a particular orchard near Fort Myers.

What are sort of the next steps what should we watch for is that as you go through that process.

And or are there any timelines on next steps or sort of key gates that are going to be part of the decision making process that we should be aware of.

Speaker 2: Yeah, in the very near term, all of that work is going to be done internally with our retained consultants and contractors and professionals because it's at the early planning stages. We haven't done anything externally with any of the county officials or any of the organizations that have strong interest in a project like this.

Yeah in the very near term all of that work is going to be done internally with our.

Retained consultants and contractors and professionals because it's at the early planning stages, and we havent done anything externally.

With any of the county officials or any of the organizations that have strong interest in a project like this because we're really still on the drawing board, but we publicly acknowledged that it is on the drawing board and it's something that we're looking towards but we are going to continue to run our citrus operations on that growth for the foreseeable future as business.

Speaker 4: Because we're really still on the drawing board, but we publicly acknowledge that it is on the drawing board and it's something that we're looking towards, but we are going to continue to run our citrus operations on that grove for the foreseeable future as business as usual. Obviously, you haven't 100% committed to the project on the drawing board, but no.

As usual.

Got it.

<unk>.

Obviously, you haven't 100% committed to the.

Project on the drawing board, but.

Knowing Florida the growth in Florida, I would say.

Yeah.

At some point.

Being the location near Fort Myers, just looks like it at some point this is going to move to our real estate operation at least for that Orchard.

Is that right.

Strong probability of moving to a real estate.

Project.

Speaker 4: I think there is a very good probability of that in kind of the mid-term, near-term, long-term, yes. Okay.

I think there is a very good probability of that and kind of the midterm your near term long term gas okay. Yeah alright.

Speaker 4: And then finally, Grover Management, great to see that you picked up a new client. What is the opportunity there? I mean, I know that's sort of been, I don't want to say in the background, but you had a client and I think he ended up closing down his Grover.

Alright.

And then finally Grove management, great to see that you picked up a new client.

What is the opportunity there I mean, I know that's sort of been I don't want to say in the background, but you had a client.

Q.

I think ended up closing down this drove eventually but as being the one of the.

Yeah.

One of the operators with the best balance sheet.

Most leveraged around her most available equipment or or expertise.

And this grow a little bit more how do we look at the growth management side.

Speaker 2: We do see selectively that there are potential other customers for this third-party caretaking business that we've demonstrated some expertise with. We're just, again, selective on basically the opportunities that we're willing to take on board. You know, we have to get a competitive management fee, and there has to be, you know...

We do see selectively that there are potential other customers for this third party peer taking business that we've demonstrated some expertise with we're just against selective on.

Basically the opportunities that we're willing to take on board.

We have to get a competitive management fee and there has to be you know.

Speaker 2: An operation that's either large enough that it can be self-contained or it has to be near to some of our existing growth so we can move manpower and resources back and forth easily.

And operation, it's either large enough that it can be self contained or it has to be near or to some of our existing growth. So we can move manpower and resources back and forth easily.

Speaker 4: And this continues to demonstrate ALECO's long-term commitment to the citrus industry because not only are we focusing on kind of the planted acres that we take care of, but we just are going above and beyond to hopefully take care of another 3,300 citrus acres. And we think that's a very good thing on behalf of the industry overall. Is that 3,200, is that self-contained or is that close to some of your operations?

And this continues to demonstrate a week goes long term commitment to the cintas citrus industry, because not only are we focusing on kind of the planted acres that we take care of but we just are going above and beyond to hopefully take care of another 3300 citrus acres and.

We think thats a very good thing on behalf of the industry overall.

Is that 3200 is that self contained or is that close to some of your operations.

That one is actually self contained.

Got it okay.

I appreciate it that's it for me.

Always good to talk Jerry Thank you. Thanks.

Speaker 1: Thank you. That concludes our question and answer session. I'll turn the floor back to Mr. Kiernan for any final comments.

Thank you that concludes our question and answer session I will turn the floor back to Mr. Keenan for any final comments.

Okay.

Speaker 2: Thank you, Melissa. At this point, we would just like to thank everyone for your continued support of OECO. We wish everybody a Merry Christmas and Happy Holidays, and we look forward to speaking with you all about our first quarter results in February .

Thank you Melissa.

At this point, we would just like to thank everyone for your continued support of a week ago.

We wish everybody, a Merry Christmas and happy holidays, and we look forward to speaking with you all about our first quarter results in February.

Speaker 1: Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.

Thank you. This concludes today's conference call you may disconnect. Your lines at this time. Thank you for your participation.