Welcome to Alico's Fourth Quarter and Full-Year 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. As a reminder, today's conference is being recorded. Earlier today, the Company issued a press release announcing its results for the fourth quarter and full-year ended September 30, 2022. 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. Before we begin, we 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. Important factors that could cause or contribute to such differences include the risk factors detailed in the Company's annual report on Form 10-K as well as its future quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments 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 the law. During this call, the Company will also discuss non-GAAP financial measures including EBITDA and adjusted EBITDA. For more details on these measures, please refer to the Company's press release issued earlier today. With that, I would like to turn the call over to the Company's President and CEO, Mr. John Kiernan.

Thank you, Doug. Thank you, everyone, for joining us for Alico's fourth quarter and fiscal year ended September 30, 2022 earnings call this afternoon. Fiscal year 2022 was a challenging year for Alico. Two weather events had a meaningful impact on our company and the Florida citrus industry. As previously discussed, in January, the freeze increased fruit drop for our Valencia crop at the beginning of our harvesting season, and we made the decision to accelerate the harvest of the remaining fruit and that did not have time to mature to optimal quality standards. At the end of September, Hurricane Ian struck Southwestern Florida with 150-mile an hour winds. The slow-moving storm moved across the state, causing substantial fruit drop at the majority of our groves. Fortunately, tree damage was largely limited to only one property. This lost fruit impacted our fiscal year 2022 financial results through an aggregate of approximately $23 million of one-time items for casualty losses and inventory adjustments. Fiscal year 2023 will see lower levels of revenue because we have less fruit available for sale. Based upon our prior experience with storms of this nature, we anticipate it may take up to two seasons or more for our groves to recover to pre-hurricane production levels. I would point out, however, that after Hurricane Irma struck in 2017, our groves recovered the following harvest season. We maintain crop insurance and we are currently working closely with our insurers and adjusters to evaluate and determine the amount of insurance recovery we maybe entitled to, if any. For the fiscal year ended September 30, 2022, the company reported net income attributable to Alico common stockholders of approximately $12.5 million compared to net income attributable to Alico common stockholders of approximately $34.9 million for the fiscal year ended September 30,…

Thank you, John, and good afternoon, 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 the full-year fiscal 2022 results today. As a reminder, the majority of our citrus crop is harvested in the second and third quarters of the fiscal year, with the majority of our profit and cash flows also recognized in the second and third quarters. For the fiscal year ended September 30, 2022, total operating revenue was $91.9 million compared to $108.6 million for the fiscal year ended September 30, 2021. Citrus revenue was $89.7 million and $105.8 million for the fiscal years ended September 30, 2022 and 2021, respectively. The decrease in revenue for the fiscal year ended September 30, 2022, compared to the fiscal year ended September 30, 2021, was primarily due to a decrease in the revenue from lower box production particularly our Valencia fruit and a reduction in our Grove Management Services. The decrease in early and mid and Valencia fruit harvested was primarily driven by a decrease in process box production and a decrease in pound solids per box. As previously discussed, this was primarily due to the January 2022 freeze event, which increased fruit drop at the beginning of our Valencia harvesting season, and we made the decision to accelerate the harvest of the remaining fruit which did not have time to mature to optimal quality standards. Our average blended price per pound solid increased from $2.45 in the prior fiscal year to $2.63 for the current fiscal year. This was primarily due to tighter supplies of citrus fruit, which in turn led to reduced inventory levels at the juice processors. Largely offsetting this increase in pricing was the number of fewer Valencia boxes…

Thanks, Perry. As we have discussed, although it was a challenging year for our company and the Florida citrus industry, we were able to strengthen our balance sheet for reductions in our debt levels and returned approximately $15.1 million in dividends back to our shareholders. Alico has paid common dividends to shareholders consistently since it became publicly held more than six decades ago. Rate of increased dividend payments since 2019 has been a source of pride as ranch sales proceeds and operations enabled significant amounts of capital to be returned to shareholders. However, taking into account the impact of the recent storm, Alico's Board of Directors unanimously voted to reduce its next quarterly common dividend to $0.05 per share. We believe the investments that Alico has made over the past several years have created what we believe to be the most productive citrus groves in Florida. We will continue to blend a conventional agriculture investment with the ability to optimize the returns on our real assets. We are continuing to work with land-use planning professionals to develop and implement this strategy over the next several years, which we expect to help generate greater returns for our shareholders through active land management. And with that, we will now open the line up to questions from industry analysts. Doug?

Thank you. Ladies and gentlemen, at this time, we will be conducting a question-and-answer session. [Operator Instructions] Our first question comes from the line of Gerry Sweeney with ROTH Capital. Please proceed with your question.

Hey, John and Perry. Thanks for taking the call.

Hi, Gerry.

Curious if you could give us a little bit of insight maybe on the crop insurance status sort of process that you have to go through in timing when you fully understand what the availability of insurance, if any, is on – and then, yes, sorry...

No, we'll take them in order. We have crop insurance on all of our acres. It's primarily catastrophic. So it's going to measure a very, very significant crop damage. And we don't think that is going to be affecting a majority of our groves. It certainly is going to affect quite a few of them, but not all of them. And we really can't measure at this point until the end of the crop season until the actual harvest itself. We do estimates right now, but we're actually going to have to measure the actual results. So it's going to be a few more months.

Got it. I got to switch gears a little bit and kind of step back to. But when do you sort of get – when do you get some visibility on the quality of the harvest? And Again, just to be clear, the harvest, the fruit that came off the tree during Ian was for this season coming up. So we won't really even know for probably a good solid year as to what like a big rebound or what kind of rebound we're going to have. Is that correct?

Yes, similar to what we saw in Hurricane Irma back in 2017. So we'll take those in order. So yes, we actually started harvesting our early and mid-season varieties about a week or so ago. And that crop was probably the most affected. And again, you have to take this with a grain of salt because we still have a lot of evaluation to do because it was just more mature and larger hanging on the tree when the hurricane and all those force winds came through in September. It's too early for us to really tell what that size crop. So unfortunately, we can't give guidance right now or eventually what the ultimate quality standard and kind of juice quantity is going to be. The Valencia season, most likely is going to start in kind of mid-February, we're anticipating certainly affected by the storm, but not as affected by the storm. So there's some reason for some small semblance of optimism there. It's just a timing issue for us with these disclosures because we don't really know all that much today, certainly no more than we did in September. But in another few weeks, we should have much better ideas relative to kind of the early mid crop and its quality standards.

Got it. With visibility as it relates to, we'll say, fiscal 2024 early in mid, when would you sort of get a visibility on that harvest, right? So next year harvest. Would that sort of be August, September of this year coming up?

Yes. So traditionally, we do kind of our first crop forecast internally in kind of the late summer months. So it would be kind of August going into early September that is traditional. And that will give us our first visibility into the first glimpse of what the crop or next season looks like. And again, it would be a waiting game to make sure that the fruit stays on the tree and matures. As we saw in Irma, there was a very quick rebound. We don't want to go out on a limb and actually say that we expect that, that's going to happen. We will keep our fingers crossed, obviously. But prior to Irma, it would have taken two-plus years to kind of rebound to preproduction levels. So it's unfortunately just going to be another waiting game to get to next summer for the first glimpse and then fingers crossed as we start the next harvest season next November, December.

Got it. Going back to the insurance part. Federal relief, any updates on that? I know that's going to be a process, but if anything has moved in the last week or two, a couple of weeks?

Yes. Unfortunately, and this is starting to sound like a theme, but unfortunately, we don't have a lot of good visibility that's come out of Washington. Most likely is not going to be a state-driven program. It's almost entirely going to be dependent on kind of federal funding. And we are in kind of wait mode. We're working very closely with Citrus Mutual, our industry trade group. That's kind of the point on this initiative on behalf of all the citrus growers in the state of Florida.

Got you. And on federal relief and again, I apologize for the questions here. But since I assume some of this – there was thought of declared a state of an emergency or I think probably at the state and federal level. Does that automatically – I don't want to say automatically, but does that open the door for federal funding? Or is that a whole – this federal sort of relief funding a whole separate process?

Yes. We think it's a whole separate process similar to what it was in the past. This isn't like a theme disaster emergency. It's really going to be specific earmark funds for kind of industry-type relief I think back in very early October, Senator Rubio and sponsored some sort of legislation and outlined a program that was very, very large and hopefully, that initiative or something similar to that will continue because those funds really, really can go a long way, both for Alico and our friends and peers to keep the citrus industry alive and growing for generations to come here in Florida.

Okay. One more on the real estate side. Just curious if – how the market looks backlog, sort of tone tenor in terms of how properties, demand or activity on the property sales front?

Sure. We saw them get into a really big statistics or information that we have [indiscernible] in the press release. We have closed a few small transactions in this quarter. As we said in the press release, it is at prices that we consider to be attractive. So there is continued demand. We've got several other buyers that are negotiating or in a contract stage at this point. So we are still active on the real estate front relative to the Alico Ranch.

Got you. Okay. That's it for me.

Thank you, Gerry. Thanks for your support.

That concludes our question-and-answer session. I'd like to hand it back to Mr. Kiernan for closing remarks.

Thank you, everyone, for joining our call today and also for your support of Alico. On behalf of Perry and myself and the rest of the Alico team based down here in Fort Myers, Florida, we look forward to speaking with you about our first quarter results coming up in February. Thanks very much.

Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation. You may disconnect your lines at this time, and have a wonderful day.