FORT MYERS, Fla., June 14, 2021 (GLOBE NEWSWIRE) -- Alico, Inc. (“Alico” or the “Company”) (Nasdaq: ALCO) today announces significant activities that will continue to support its business strategy and generate greater returns for our shareholders.
The Alico Board of Directors approved an increase in the quarterly dividend from $0.18 per common share to $0.50 per common share, which represents an approximate 178% increase, effective the third quarter of fiscal year 2021. Our current common dividend yield based on Friday’s, June 11, 2021 closing stock price was 2.26%, at the same share price, the increased annual common dividend yield would exceed 6%.
In our press release dated May 5, 2021 describing “Strategic Actions to Increase Long-term Shareholder Returns,” we disclosed that we were under contract to sell, or in final negotiations to sell, approximately 15,000 additional acres of the Alico Ranch. Since that announcement, we have sold approximately 12,500 acres. In early June 2021, the Company sold approximately 11,700 acres, which were encumbered by an easement, to a third-party for approximately $12.2 million. In 2013, these acres were enrolled in the Wetlands Reserve Program (“WRP”), which calls for the restoration and maintenance of the property for the duration of the WRP easement. As part of that enrollment in 2013, Alico received approximately $1,800 per acre. In addition, in early June 2021, we also sold 763 acres to two independent third parties for approximately $3.5 million.
With respect to our previously announced Environmental, Social and Governance (ESG) initiative, Alico has made substantial progress, including:
A new board-level Sustainability and Corporate Responsibility Committee has been established by the Alico Board
A full-time executive has been named Director of Sustainability to lead our ESG program
Management has formed a broad Sustainability Task Force across our business units
Alico has engaged consultants to produce an annual Sustainability Report by year end
Alico Sustainability Polices and a Vendor Code of Conduct have been formulated
Our initial Carbon Footprint and Climate Risk evaluation has been prioritized
Plans are underway to revitalize and increase Alico’s Social media presence, to better highlight our policies relating to ESG
John Kiernan, Alico’s President and Chief Executive Officer, commented, “The Board of Directors decision to substantially increase our common dividend to a $2 annual level reflects their continued confidence that our business strategy supports a higher level of return of capital to our shareholders. We are also pleased with the continued buyer interest in our Ranch land, which has allowed us to close sales transactions at premium prices. As reported last month, Alico will use these asset sale proceeds to continue to retire portions of our remaining $39 million of variable rate term loans, which will further improve subsequent annual cash flow as future debt service is eliminated.
Alico, Inc. primarily operates two divisions: Alico Citrus, one of the nation’s largest citrus producers, and Land Management and Other Operations, which include environmental services, land leasing and related support operations. Learn more about Alico (Nasdaq: “ALCO”) at www.alicoinc.com.
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are based on Alico’s current expectations about future events and can be identified by terms such as “plans,” “expect,” “may,” “anticipate,” “intend,” “should be,” “will be,” “is likely to,” “believes,” and similar expressions referring to future periods.
Alico believes the expectations reflected in the forward-looking statements are reasonable but cannot guarantee future results, level of activity, performance, or achievements. Actual results may differ materially from those expressed or implied in the forward-looking statements. Therefore, Alico cautions you against relying on any of these forward-looking statements. Factors which may cause future outcomes to differ materially from those foreseen in forward-looking statements include, but are not limited to: changes in laws, regulation and rules, including tax laws and tax rates; weather conditions that affect production, transportation, storage, demand, import and export of fresh product and their by-products; increased pressure from diseases including citrus greening and citrus canker, as well as insects and other pests; disruption of water supplies or changes in water allocations; market pricing of citrus; pricing and supply of raw materials and products; market responses to industry volume pressures; pricing and supply of energy; changes in interest rates; availability of refinancing; availability of financing for land development activities and other growth and corporate opportunities; onetime events; acquisitions and divestitures ability to make strategic acquisitions or divestitures; ability to redeploy proceeds from divestitures; ability to consummate selected land acquisitions; ability to take advantage of tax deferral options; seasonality; labor disruptions; inability to pay debt obligations; inability to engage in certain transactions due to restrictive covenants in debt instruments; government restrictions on land use; changes in agricultural land values; impact of the COVID-19 outbreak and coronavirus pandemic on our agriculture operations, including without limitation demand for product, supply chain, health and availability of our labor force, the labor force of contractors we engage, and the labor force of our competitors; other risks related to the duration and severity of the COVID-19 outbreak and coronavirus pandemic and its impact on Alico’s business; the impact of the COVID-19 outbreak and coronavirus pandemic on the U.S. and global economies and financial markets; access to governmental loans and incentives; any reduction in the public float resulting from repurchases of common stock by Alico; changes in equity awards to employees; whether the Company's dividend policy, including its recent increased dividend amounts, is continued; whether the Company’s cash flow can support and sustain the Company’s dividend policy, including any future increases in dividend amounts; expressed desire of certain of our shareholders to liquidate their shareholdings by virtue of past market sales of common stock, by sales of common stock or by way of future transactions; political changes and economic crises; ability to implement ESG initiatives; competitive actions by other companies; increased competition from international companies; changes in environmental regulations and their impact on farming practices; the land ownership policies of governments; changes in government farm programs and policies and international reaction to such programs; changes in pricing calculations with our customers; fluctuations in the value of the U.S. dollar, interest rates, inflation and deflation rates; length of terms of contracts with customers; impact of concentration of sales to one customer; impact of concentration of sales to one customer; changes in and effects of crop insurance programs, global trade agreements, trade restrictions and tariffs; soil conditions, harvest yields, prices for commodities, and crop production expenses. Other risks and uncertainties include those that are described in Alico’s SEC filings, which are available on the SEC’s website at http://www.sec.gov. Alico undertakes no obligation to subsequently update or revise the forward-looking statements made in this press release, except as required by law.
This press release also contains financial projections that are necessarily based upon a variety of estimates and assumptions which may not be realized and are inherently subject, in addition to the risks identified in the forward-looking statement disclaimer, to business, economic, competitive, industry, regulatory, market and financial uncertainties, many of which are beyond the Company’s control. There can be no assurance that the assumptions made in preparing the financial projections will prove accurate. Accordingly, actual results may differ materially from the financial projections.
Senior Vice President and Chief Financial Officer