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Long-Term Debt and Lines of Credit | 6 Months Ended
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Mar. 31, 2018
Debt Disclosure [Abstract] |
Long-Term Debt and Lines of Credit | Long-Term Debt and Lines of Credit Credit Facilities The Company's credit facilities initially consisted of $125,000,000 in fixed interest rate term loans (“Met Fixed-Rate Term Loans”), $57,500,000 in variable interest rate term loans (“Met Variable-Rate Term Loans”), and a $25,000,000 revolving line of credit (“RLOC”) with Metropolitan Life Insurance Company and New England Life Insurance Company (collectively “Met”), and a $70,000,000 working capital line of credit (“WCLC”) with Rabo Agrifinance, Inc. (“Rabo”). The term loans and RLOC are secured by real property. The security for the term loans and RLOC consists of approximately 38,200 gross acres of citrus groves and 5,762 gross acres of ranch land. The WCLC is collateralized by the Company’s current assets and certain other personal property owned by the Company. The term loans, collectively, are subject to quarterly principal payments of $2,281,250, and mature November 1, 2029. The Met Fixed-Rate Term Loans bear interest at 4.15% per annum, and the Met Variable-Rate Term Loans bear interest at a rate equal to 90 day LIBOR plus 150 basis points (the “LIBOR spread”). The LIBOR spread was adjusted by the lender on May 1, 2017 and is subject to further adjustment by the lender on May 1, 2019 and every two years thereafter until maturity. Interest on the term loans is payable quarterly. The interest rates on the Met Variable-Rate Term Loans were 3.42% per annum and 2.96% per annum as of March 31, 2018 and September 30, 2017, respectively. The Company may prepay up to $8,750,000 of the Met Fixed-Rate Term Loan principal annually without penalty, and any such prepayments may be applied to reduce subsequent mandatory principal payments. The maximum annual prepayment was made for calendar year 2015. During the first and second quarter of fiscal 2018, the Company elected not to make its principal payment and utilized its prepayment to satisfy its principal payment requirements for such quarters. At March 31, 2018, the Company had $5,625,000 remaining available to reduce future mandatory principal payments should the Company elect to do so. The Met Variable-Rate Term Loans may be prepaid without penalty. The RLOC bears interest at a floating rate equal to 90 day LIBOR plus 150 basis points, payable quarterly. The LIBOR spread was adjusted by the lender on May 1, 2017 and is subject to further adjustment every two years thereafter. Outstanding principal, if any, is due at maturity on November 1, 2019. The RLOC is subject to an annual commitment fee of 25 basis points on the unused portion of the line of credit. The RLOC is available for funding general corporate needs. The variable interest rate was 3.42% and 2.96% per annum as of March 31, 2018 and September 30, 2017, respectively. Availability under the RLOC was $25,000,000 as of March 31, 2018. The WCLC is a revolving credit facility and is available for funding working capital and general corporate requirements. The interest rate on the WCLC is based on the one month LIBOR, plus a spread, which is adjusted quarterly, based on the Company's debt service coverage ratio for the preceding quarter and can vary from 175 to 250 basis points. The rate is currently at LIBOR plus 175 basis points. The variable interest rate was 3.41% per annum and 2.99% per annum as of March 31, 2018 and September 30, 2017, respectively. The WCLC agreement was amended on September 30, 2017, and the primary terms of the amendment were an extension of the maturity to November 1, 2019. There were no changes to the commitment amount or interest rate. Availability under the WCLC was approximately $59,700,000 as of March 31, 2018 and September 30, 2017, respectively. The WCLC is subject to a quarterly commitment fee on the daily unused availability under the line computed as the commitment amount less the aggregate of the outstanding loans and outstanding letters of credit. The commitment fee is adjusted quarterly based on Alico's debt service coverage ratio for the preceding quarter and can vary from a minimum of 20 basis points to a maximum of 30 basis points. Commitment fees to date have been charged at 20 basis points. The outstanding balance on the WCLC was $0 at March 31, 2018. The WCLC agreement provides for Rabo to issue up to $20,000,000 in letters of credit on the Company’s behalf. As of March 31, 2018, there was approximately $10,300,000 in outstanding letters of credit, which correspondingly reduced the Company's availability under the line of credit. These credit facilities noted above are subject to various covenants including the following financial covenants: (i) minimum debt service coverage ratio of 1.10 to 1.00, (ii) tangible net worth of at least $160,000,000 increased annually by 10% of consolidated net income for the preceding year, or approximately $162,300,000 for the year ended September 30, 2017, (iii) minimum current ratio of 1.50 to 1.00, (iv) debt to total assets ratio not greater than .625 to 1.00, and, solely in the case of the WCLC, (v) a limit on capital expenditures of $30,000,000 per fiscal year. As of March 31, 2018, the Company was in compliance with all of the financial covenants. The credit facilities also include a Met Life term loan collateralized by real estate owned by Citree (“Met Citree Loan”). This is a $5,000,000 credit facility that bears interest at a fixed rate of 5.28% per annum. An initial advance of $500,000 was made at closing on March 4, 2014. The loan agreement was amended to provide for an interim advance of $2,000,000 on September 17, 2015, and the interest rate was adjusted to 5.30% per annum at the time of the interim advance. The final $2,500,000 advance was funded on April 27, 2016 and the interest rate was adjusted to 5.28%. Principal payments on this term loan commenced on February 1, 2018 and are payable quarterly thereafter. The loan matures in February 2029. Silver Nip Citrus Debt There are two fixed-rate term loans, with an original combined balance of $27,550,000, bearing interest at 5.35% per annum (“Pru Loans A & B”). Principal of $290,000 is payable quarterly, together with accrued interest. On February 15, 2015, Silver Nip Citrus made a prepayment of $750,000. In addition, the Company made prepayments of approximately $4,453,000 in the second fiscal quarter of 2018 with the sale of certain properties which were collateralized under these loans. The Company may prepay up to $5,000,000 of principal without penalty. As such, the Company exceeded the allowed $5,000,000 prepayment by approximately $203,000 and was required to make a premium payment of approximately $22,000. The loans are collateralized by real estate in Collier, Hardee, Highlands, Martin, Osceola and Polk Counties, Florida and mature in June 2029 and June 1, 2033. Silver Nip Citrus entered into two additional fixed-rate term loans with Prudential to finance the acquisition of a 1,500 acre citrus grove on September 4, 2014. Each loan was in the original amount of $5,500,000. Principal of $55,000 per loan is payable quarterly, together with accrued interest. One loan bears interest at 3.85% per annum (“Pru Loan E”), while the other bears interest at 3.45% per annum (“Pru Loan F”). The interest rate on Pru Loan E is subject to adjustment on September 1, 2019 and every year thereafter until maturity. Both loans are collateralized by real estate in Charlotte County, Florida. Pru Note E matures September 1, 2021, and Pru Note F matures September 1, 2039. The Silver Nip Citrus credit agreements were amended on December 1, 2016. The primary terms of the amendments were (1) the Company provided a limited $8,000,000 guaranty of the Silver Nip debt, (2) the limited personal guarantees provided by George Brokaw, Remy Trafelet and Clayton Wilson prior to the Company’s merger with Silver Nip Citrus, and also totaling $8,000,000, were released and (3) the consolidated current ratio covenant requirement was reduced from 1.50 to 1.00 to 1.00 to 1:00. Silver Nip Citrus was in compliance with the current ratio covenant as of March 31, 2018, the most recent measurement date. Other Modifications of Rabo and Prudential Credit Agreements In February 2015, Rabo agreed, subject to certain conditions, that the Company may loan Silver Nip Citrus up to $7,000,000 on a revolving basis for cash management purposes. These advances would be funded from either cash on hand or draws on the Company’s WCLC. Silver Nip Citrus has provided a $7,000,000 limited guaranty and security agreement granting Rabo a security interest in crops, accounts receivable, inventory and certain other assets. This modification required the amendment of various Prudential and Rabo loan documents and mortgages. The following table summarizes long-term debt and related deferred financing costs net of accumulated amortization at March 31, 2018 and September 30, 2017:
| March 31, 2018 |  | September 30, 2017
| Principal |  | Deferred Financing Costs, Net |  | Principal |  | Deferred Financing Costs, Net
| (in thousands)
Long-term debt, net of current portion: |  |  |  |  |  |  |
Met Fixed-Rate Term Loans | $ | 99,062 |  |  | $ | 895 |  |  | $ | 99,062 |  |  | $ | 954 |
Met Variable-Rate Term Loans | 48,157 |  |  | 411 |  |  | 49,594 |  |  | 439 |
Met Citree Term Loan | 4,975 |  |  | 47 |  |  | 5,000 |  |  | 49 |
Pru Loans A & B | 17,997 |  |  | 249 |  |  | 23,030 |  |  | 258 |
Pru Loan E | 4,785 |  |  | 21 |  |  | 4,895 |  |  | 25 |
Pru Loan F | 4,785 |  |  | 41 |  |  | 4,895 |  |  | 42 |
| 179,761 |  |  | 1,664 |  |  | 186,476 |  |  | 1,767 |
Less current portion | 5,225 |  |  | — |  |  | 4,550 |  |  | — |
Long-term debt | $ | 174,536 |  |  | $ | 1,664 |  |  | $ | 181,926 |  |  | $ | 1,767 |
The following table summarizes lines of credit and related deferred financing costs net of accumulated amortization at March 31, 2018 and September 30, 2017:
| March 31, 2018 |  | September 30, 2017
| Principal |  | Deferred Financing Costs, Net |  | Principal |  | Deferred Financing Costs, Net
| (in thousands)
Lines of Credit: |  |  |  |  |  |  |
RLOC | $ | — |  |  | $ | 84 |  |  | $ | — |  |  | $ | 109 |
WCLC | — |  |  | 54 |  |  | — |  |  | 153 |
Lines of Credit | $ | — |  |  | $ | 138 |  |  | $ | — |  |  | $ | 262 |
Future maturities of long-term debt and lines of credit as of March 31, 2018 are as follows:
(in thousands) |
Due within one year | $ | 5,225 |
Due between one and two years | 10,938 |
Due between two and three years | 10,975 |
Due between three and four years | 14,880 |
Due between four and five years | 10,755 |
Due beyond five years | 126,988 |
Total future maturities | $ | 179,761 |
Interest costs expensed and capitalized were as follows:
(in thousands) |  |  |  |  |  |  |
| Three Months Ended March 31, |  | Six Months Ended March 31,
| 2018 |  | 2017 |  | 2018 |  | 2017
Interest expense | $ | 2,239 |  |  | $ | 2,374 |  |  | $ | 4,494 |  |  | $ | 4,701 |
Interest capitalized | 147 |  |  | 64 |  |  | 281 |  |  | 127 |
Total | $ | 2,386 |  |  | $ | 2,438 |  |  | $ | 4,775 |  |  | $ | 4,828 |

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- Definition The entire disclosure for long-term debt. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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