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Summary of Significant Accounting Policies | 6 Months Ended
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Mar. 31, 2024
Accounting Policies [Abstract] |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies The Company’s significant accounting policies are fully described in Note 2 – Summary of Significant Accounting Policies in our 2023 Annual Report on Form 10-K. Revenue Recognition The Company recognizes revenue under Financial Accounting Standards Board – Accounting Standards Codification (“ASC”) 606. The core principle of the revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle: •Step 1: Identify the contract with the customer •Step 2: Identify the performance obligations in the contract •Step 3: Determine the transaction price •Step 4: Allocate the transaction price to the performance obligations in the contract •Step 5: Recognize revenue when the company satisfies a performance obligation Revenues are derived from the sale of processed fruit, fresh fruit, other citrus revenue, revenues from grove management services, leasing revenue and other resource revenues. Most of the revenue is generated from the sale of citrus fruit to processing facilities, fresh fruit sales and grove management services. For fruit sales, the Company recognizes revenue in the amount it expects to be entitled to be paid, determined when control of the products or services is transferred to its customers, which occurs upon delivery of and acceptance of the fruit by the customer and when the Company has a right to payment. For the sale of fruit, the Company has identified one performance obligation, which is the delivery of fruit to the processing facility of the customer (or harvesting of the citrus in the case of fresh fruit) for each separate variety of fruit identified in the respective contract with the respective customer. The Company initially recognizes revenue in an amount which is estimated based on contractual and market prices, if such market price falls within the range (known as “floor” and “ceiling” prices) identified in the specific respective contracts. Additionally, the Company also has a contractual agreement whereby revenue is determined based on applying a cost-plus structure methodology. As such, since all these contracts contain elements of variable consideration, the Company recognizes this variable consideration by using the expected value method. On a quarterly basis, management reviews the reasonableness of the revenues accrued based on buyers’ and processors’ advances to growers, cash and futures markets and experience in the industry. Adjustments are made throughout the year to these estimates as more current relevant industry information becomes available. Differences between the estimates and the final realization of revenues at the close of the harvesting season can result in either an increase or decrease to reported revenues.
(in thousands) | Three Months Ended March 31, |  | Six Months Ended March 31,
| 2024 |  | 2023 |  | 2024 |  | 2023
Revenue recognized at a point-in-time | $ | 16,974 |  |  | $ | 20,575 |  |  | $ | 29,959 |  |  | $ | 30,654 |
Revenue recognized over time | 1,139 |  |  | 719 |  |  | 2,139 |  |  | 1,228 |
Total | $ | 18,113 |  |  | $ | 21,294 |  |  | $ | 32,098 |  |  | $ | 31,882 |
Receivables under contracts, whereby pricing is based on contractual and market prices, are primarily paid at the floor amount and are collected within seven days after the harvest week. Any adjustments to pricing as a result of changes in market prices are generally collected or paid thirty to sixty days after final market pricing is published. Receivables under those contracts where pricing is based off a cost-plus structure methodology are paid at the final prior year rate. Any adjustments to pricing because of the cost-plus calculation are collected or paid upon finalization of the calculation and agreement by both parties. As of March 31, 2024, and September 30, 2023, the Company had total receivables relating to sales of citrus of $8,604 and $394, respectively, recorded in Accounts Receivable, net, in the Condensed Consolidated Balance Sheets. For grove management services, the Company has identified one performance obligation, which is the management of the third party’s groves. Grove management services include caretaking of the citrus groves, harvesting and hauling of citrus, management and coordination of citrus sales and other related activities. The Company is reimbursed for expenses incurred in the execution of its management duties and the Company receives a per acre management fee. The Company recognizes operating revenue, including a management fee, and corresponding operating expenses when such services are rendered and consumed. The Company recorded $1,395 and $551 of operating revenue relating to these grove management services, including the management fee, in the six months ended March 31, 2024 and 2023, respectively, for this group of third-party grove owners noted above. The Company recorded $890 and $307 of operating expenses relating to these grove management services in the six months ended March 31, 2024 and 2023, respectively, for this group of third-party grove owners noted above. Disaggregated Revenue Revenues disaggregated by significant products and services for the three and six months ended March 31, 2024 and 2023 are as follows:
(in thousands) | Three Months Ended March 31, |  | Six Months Ended March 31,
| 2024 |  | 2023 |  | 2024 |  | 2023
Alico Citrus |  |  |  |  |  |  |
Early and Mid-Season | $ | 2,139 |  |  | $ | 2,368 |  |  | $ | 14,534 |  |  | $ | 11,954 |
Valencias | 14,732 |  |  | 17,930 |  |  | 14,732 |  |  | 17,930 |
Fresh Fruit and Other | 103 |  |  | 277 |  |  | 693 |  |  | 770 |
Grove Management Services | 788 |  |  | 362 |  |  | 1,395 |  |  | 551 |
Total | $ | 17,762 |  |  | $ | 20,937 |  |  | $ | 31,354 |  |  | $ | 31,205 |
Land Management and Other Operations |  |  |  |  |  |  |
Land and Other Leasing | $ | 278 |  |  | $ | 273 |  |  | $ | 592 |  |  | $ | 554 |
Other | 73 |  |  | 84 |  |  | 152 |  |  | 123 |
Total | $ | 351 |  |  | $ | 357 |  |  | $ | 744 |  |  | $ | 677 |
Total Revenues | $ | 18,113 |  |  | $ | 21,294 |  |  | $ | 32,098 |  |  | $ | 31,882 |
Cash and Cash Equivalents The Company considers cash in banks and highly liquid instruments with an original maturity to the Company of three months or less to be cash and cash equivalents. At various times throughout the year ended September 30, and as of September 30, 2023, some accounts held at financial institutions were in excess of the federally insured limit of $250. The Company held U.S. Treasury Bills with an amortized cost of $2,522 at March 31, 2024. These Treasury Bills are classified as Held to Maturity based on the Company's intent and ability to hold these securities to maturity. The Company has not experienced any losses on these accounts and believes credit risk to be minimal. Fair Value Measurements The Company categorizes its financial instruments measured at fair value into a fair value hierarchy that prioritizes the inputs used in pricing the asset or liability into a three tier fair value hierarchy which prioritizes the inputs used in measuring fair value as follows: •Level 1 – Observable inputs such as quoted market prices for identical assets and liabilities in active markets; •Level 2 – Inputs, other than the quoted prices for identical assets and liabilities in active markets, for which significant other observable market inputs are readily available; and •Level 3 – Unobservable inputs in which there is little or no market data, such as internally developed valuation models which require the reporting entity to develop its own assumptions. The carrying amounts of the Company’s financial instruments, including cash, restricted cash, accounts receivable, accounts payable and accrued liabilities approximate their fair values due to the short term and immediate nature of these financial instruments. The carrying amounts and estimated fair values (Level 2) of debt instruments are as follows:
(in thousands) | March 31, 2024 |  | September 30, 2023
Carrying Amount |  | Estimated Fair Value |  | Carrying Amount |  | Estimated Fair Value
Corporate debt |  |  |  |  |  |  |
Current portion of long-term debt | $ | 1,410 |  |  | $ | 1,367 |  |  | $ | 2,566 |  |  | $ | 2,325 |
Long-term debt | $ | 83,452 |  |  | $ | 75,934 |  |  | $ | 126,753 |  |  | $ | 115,851 |
As of March 31, 2024 and September 30, 2023 the Company did not have any assets held for sale that had been measured at fair value on a non-recurring basis. Accounting for government grants The Company recognizes government grants when there is reasonable assurance that: (1) the grant will be received and (2) all conditions will be met. For income-based grants, the Company recognizes the income on a systemic basis over the periods in which it recognizes as expense the related costs for which the grant was intended to compensate. In the six months ended March 31, 2024, the Company recognized $1,805 of grant money from the Citrus Research and Field Trial Foundation’s (“CRAFT”) program to assist citrus growers in the State of Florida using Oxytetracycline (“OTC”) and other approved therapies to combat the effect of “greening” of their citrus trees. These funds were recognized as a component of Inventories ($235 at March 31, 2024) on the Company’s Condensed Consolidated Balance Sheet and will be recognized as a reduction of Operating expenses ($1,570 during the six months ended March 31, 2024) on its Condensed Consolidated Statement of Operations as its fruit is sold, in order to align it to the period over which the expense related to the OTC treatments is recognized. These grant monies were received in exchange for providing certain historical data to the CRAFT Foundation about the Company’s citrus groves. The Company may continue, but is not obligated, to participate in future CRAFT programs on the effects of the use of OTC on its Citrus Trees. In January 2024, the Company collected these grant monies from CRAFT. Concentrations Accounts receivable from the Company’s major customer as of March 31, 2024 and September 30, 2023, and revenue from such customer for the six months ended March 31, 2024 and 2023, are as follows:
(in thousands) | Accounts Receivable |  | Revenue |  | % of Total Revenue
March 31, |  | September 30, |  | March 31, |  | March 31,
| 2024 |  | 2023 |  | 2024 |  | 2023 |  | 2024 |  | 2023
Tropicana | $ | 8,106 |  |  | $ | — |  |  | $ | 28,857 |  |  | $ | 28,065 |  |  | 89.9 | % |  | 88.0 | %
The citrus industry is subject to various factors over which growers have limited or no control, including weather conditions, disease, pestilence, water supply and market price fluctuations. Market prices are highly sensitive to aggregate domestic and foreign crop sizes, as well as factors including, but not limited to, weather and competition from foreign countries. The overall decrease in Tropicana revenue, as a percentage of sales, was primarily due to an increase in processed fruit sales during the current quarter. Segments Operating segments are defined in the criteria established under ASC Topic 280 as components of public entities that engage in business activities from which they may earn revenues and incur expenses for which separate financial information is available and which is evaluated regularly by the Company’s chief operating decision maker (“CODM”) in deciding how to assess performance and allocate resources. The Company’s CODM assesses performance and allocates resources based on two operating segments: (i) Alico Citrus and (ii) Land Management and Other Operations. Principles of Consolidation The Financial Statements include the accounts of Alico and the accounts of all the subsidiaries in which a controlling interest is held by the Company. Under U.S. GAAP, consolidation is generally required for investments of more than 50% of the outstanding voting stock of an investee, except when control is not held by the majority owner. The Company’s subsidiaries include: Alico Land Development, Inc., Alico-Agri, Ltd., Alico Plant World, LLC, Alico Fruit Company, LLC, Alico Citrus Nursery, LLC, Alico Chemical Sales, LLC, Alico Ranch, LLC, Alico Natural Resources, LLC, 734 Citrus Holdings 1, LLC and subsidiaries (“Silver Nip”), Alico Skink Mitigation, LLC and Citree Holdings 1, LLC (“Citree”). The Company considers the criteria established under FASB ASC Topic 810, “Consolidations” in its consolidation process. All significant intercompany balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities as of the date of the accompanying Financial Statements, the disclosure of contingent assets and liabilities in the Financial Statements and the accompanying Notes, and the reported amounts of revenues and expenses and cash flows during the periods presented. Actual results could differ from those estimates. The Company evaluates estimates on an ongoing basis. The estimates are based on current and expected economic conditions, historical experience, the experience and judgment of the Company’s management and various other specific assumptions that the Company believes to be reasonable. Noncontrolling Interest in Consolidated Subsidiary The Financial Statements include all assets and liabilities of the less-than-100%-owned subsidiary the Company controls, Citree. Accordingly, the Company has recorded a noncontrolling interest in the equity of such entity. Citree had net losses of $427 and $703 for the three months ended March 31, 2024 and 2023, respectively, and net losses of $1,466 and $776 for the six months ended March 31, 2024 and 2023, respectively, of which 51% is attributable to the Company. Recent Accounting Pronouncements In November 2023, the FASB issued ASU 2023-07, “Improvements to Reportable Segment Disclosures,” which amends Topic 280 primarily through enhanced disclosures about significant segment expenses. The amendments are effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. ASU 2023-07 will become effective for us on October 1, 2024. We are currently evaluating the impact of the adoption of this accounting pronouncement on our Consolidated Financial Statements. In December 2023, the FASB issued ASU 2023-09, “Improvements to Income Tax Disclosures,” which amends Topic 740 primarily through enhanced disclosures about an entity’s tax risks and tax planning. The amendments are effective for public business entities in annual periods beginning after December 15, 2024, with early adoption permitted on a prospective or retrospective basis. ASU 2023-09 will become effective for us on October 1, 2025. We are currently evaluating the impact of the adoption of this accounting pronouncement on our Consolidated Financial Statements. Recently Adopted Accounting Pronouncements None this period.

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