November 16, 2017 / 1:32 PM / a year ago

BRIEF-Alico announces restructuring program

Nov 16 (Reuters) - Alico Inc:

* Announces restructuring program which has been transforming it into a more competitive company

* Alico has eliminated costs “that it believes will not negatively affect citrus production”​

* Alico Citrus estimates that production will be down 40-45 percent from prior season that was completed in June of 2017​

* When Alico 2.0 is fully implemented over next 2 yrs, Alico Citrus expects to generate net income of $17.9 million, earnings per share of $2.00-$2.40

* Alico Citrus lost a small percentage of trees, force and duration of storm impacted majority of groves​

* Alico Citrus expect it will take at least two seasons for groves to recover to pre-hurricane production levels​

* Alico Citrus sees production of 4-4.4mm boxes in 2018, production increase in 2019, return to pre-hurricane production levels by FY2020​

* Believes restructuring efforts and cost efficiencies that were began in early 2017 will mitigate financial impact to Alico of Hurricane Irma​

* Believes that Alico 2.0 restructuring, cost efficiencies that began in early 2017 will mitigate financial impact to Alico of Hurricane Irma​

* Company expects to be EBITDA breakeven in FY2018​

* A comprehensive review of Alico’s assets identified approximately $175mm of properties that generate no or low returns​

* Alico Citrus is reducing total expenses per acre from $3,314/acre in FY16 to $2,164/acre when Alico 2.0 is fully implemented​

* Overall, Alico 2.0 modernization​ program should reduce co’s cost to produce a pound solid from $2.14 to $1.56

* Over next 2-yrs, expects a substantial number of assets that generate no/low returns to be sold, proceeds to be redeployed/returned to shareholders​

* Danny Sutton has been promoted to president and general manager of Alico Citrus, taking over for Steve Ryan, who has resigned‍​

* To grove cost savings, Alico Citrus’ general and administrative expenses projected to decline by more than 25 percent over next 2 years​

* This quarter, Alico will cease its direct cattle operations at Alico Ranch​

* Believe that Alico has approximately $175 million of assets which may be divested without materially affecting earnings​ Source text for Eikon: Further company coverage:

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