Greetings, and welcome to Alico's First Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. As a reminder, today's conference is being recorded. On the call today are John Kiernan, President and Chief Executive Officer; and Rich Rallo, Chief Financial Officer. Earlier today, the Company issued a press release announcing its results for the first quarter ended December 31, 2020. If you have not had a chance to review the release, it is available on Investor Relations portion of the Company's website at www.alicoinc.com. This call is being webcast, and a replay will be available on Alico's website as well. Before we begin, the Company 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 risk details in the Company's quarterly reports on Form 10-Q, annual reports on Form 10-K, current reports on Form 8-K and any amendments thereto filed with the SEC and those mentioned in 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 and 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. Please proceed, sir.

Thank you, Latonya, and thank you, everyone, for joining us for Alico's First Quarter 2021 Earnings Call this morning. As we begin our fiscal year 2021, we are encouraged by higher citrus fruit market prices per pound solid and that the downward pressure on citrus pricing experienced by the industry last year has subsided. Pricing for the early and mid-season fruit is above $2 per pound solid, compared to a year ago, our market pricing was in the low $1 range. The increase in price is being driven by both an increase in consumption of not-from-concentrate orange juice by retail consumers as well as tighter supplies of citrus fruit from Florida, Brazil and Mexico. These factors have led to decreased inventory supply levels at the citrus juice processors. Robust consumption of not-from-concentrate orange juice by retail consumers continues to remain strong. Since March 2020, there has been double-digit growth in consumption demand, and the latest published Nielsen data shows the double-digit year-over-year increase in not-from-concentrate orange juice consumption is continuing to hold steady. We are confident that all of these factors will support higher Valencia market pricing for this season, which will begin to be harvested in the next couple of weeks. With respect to the 2021 harvest, which commenced in December of 2020, we have seen, along with the entire Florida citrus industry, a decrease in processed box production of the early and mid-season crop as compared to the same period last year. At the beginning of January, the USDA released its citrus crop forecast for the 2020/'21 harvest season and indicated its expectation that the Florida orange crop will decrease by approximately 19.8% this year as compared to the prior year, with much of this discrete -- with much of this decrease relating to the early and mid-season…

Thank you, John, and good morning, everyone. As this is our second earnings call, I would again like to remind everyone of the seasonality of our business. The majority of our citrus crop is harvested in the second and third quarters of the fiscal year, and the majority of our profit and cash flows are typically recognized in the second and third quarters as well. As such, the quarterly results for the first quarter are not indicative of our full year results. For the quarter ended December 31, 2020, total operating revenue was $13.7 million compared to $11 million in the same period of the previous fiscal year. Citrus revenue was $12.9 million and $10.2 million, respectively, for the quarters ended December 31, 2020 and 2019. The increase in revenue for the quarter ended December 31, 2020, compared to the same period in the prior year was primarily due to us generating greater revenue from our third-party grove management services. As John discussed earlier in the call, we entered into an agreement last year with an affiliated group of third parties to provide citrus grove caretaking and harvest and home management services for approximately 7,000 acres owned by these third parties. Under the terms of this agreement, we are reimbursed by third parties for our cost incurred related to providing these services, and we also receive a management fee based on acres covered under this agreement. We record both revenues and expenses when we provide these growth caretaking management services. For the first quarter ended December 31, 2020, we recorded approximately $2.9 million of operating revenue, including the management fee. During the quarter ended December 31, 2020, we saw a significant increase in the market price per pound solids for our early and mid-season fruit. The increase in the price…

Thanks, Rich. Alico is the leading high-quality, low-cost producer of citrus in Florida, and one of the largest citrus growers in the United States. We will continue to focus on controlling and managing costs and unlocking additional value for our shareholders to ensure that the legacy of Alico thrives for decades to come. After carefully considering the impact of lower production but higher prices this season, we are affirming our previously announced guidance for the fiscal year 2021. Our confidence is the result of a combination of our insight into the factors supporting increased market prices as well as our track record for continued stringent management of our operating and general and administrative expenses. We continue to project net income of $7.5 million to $10 million, adjusted net income of $4.5 million to $6.9 million, EBITDA between $29 million and $33 million and adjusted EBITDA between $25 million and $28.8 million. And with that, we will now open the line up to questions from industry analysts. Latonya?

[Operator Instructions] Our first question comes from Gerry Sweeney with ROTH Capital.

I want to start out with just the harvest. Obviously, you talked a little bit about the early, mids and the size of the harvest. If we -- and some of the harvest in this first quarter was -- I think you harvested more acres in this quarter versus last quarter -- or last year, in the first quarter. If we just combined the early and mids production from last year and sort of reduce that by the range that you provided, would that be sort of a good guidepost to potential production in the early and mids this year?

Rich?

Yes. So Gerry, I would say that would be -- the early, mid would be a fair assessment.

Got it. And then pricing, obviously, pricing looks very good. And as we move forward into the Valencia, which I think we start to see some in the 2Q and then obviously, in the third quarter, how does -- the early, mid had a substantial step-up in pricing. How do we look at pricing for Valencia? And how does that compare to early and mids? I'm sure there's some nuances there, so I was just curious as to how that potentially may play out or some things we can keep an eye out for?

Yes. So Gerry, as we've seen and mentioned, the consumption of not-from-concentrate orange juice continues to be strong. So while we don't have specifics, we anticipate that this trend for the Valencia, with respect to market pricing, will be similar, if not a little bit stronger than what we've seen in the early, mid size. So I think, as we look forward, there's nothing here that says that trend would be anything different.

Got it.

Again, the harvest season hasn't started yet, but every indication is that the Valencia prices will be higher than what the market prices for early and mids were this season, which would be a substantial increase over last year.

Yes. And then what gives you confidence that, obviously, early and mids were lower, more fruit drop, et cetera. When you look at your acreage, it sounds like you have some confidence that as well as the Florida state, the Valencia should be less impacted or not have as nearly as much decline in the harvest. Can you go through what provides that confidence? Or the difference why early and mid felt more declined versus potentially on the Valencia side?

I'll take that, Rich. The -- I guess the facts to support that claim is really we're monitoring and working all of our groves every day, so it's under constant inspection. We saw the drop actually taper off in our early mids, and we believe that, that trend hopefully will continue as we go into the Valencia season. So at these lower drop levels extrapolating out, that gives us great confidence as we forecasted our financial results for this current season.

Got it. And then one more for me, and I'll jump back in line. Grove management, are you -- how is that moving -- in potential new customers, how is that moving along? Are you in discussions with other groves? Any sort of qualitative, quantitative view you can provide on that?

Sure. It's all going to be qualitative. We don't have any quantitative we can at this point. We've discussed previously that we're very selective on the grove management services we would provide to potential customers. They have to meet a pretty stringent set of criteria. So it's less than a dozen potential targets, and we've been in discussions with several of them. I don't have anything to report at this time on either the likelihood that we'll close in this current fiscal year. But when we do, it will be at profitable levels. But there are active discussions that we are having.

At this time, there are no more questions in the queue. I would like to turn the call back over to Mr. John Kiernan for closing comments.

I just want to thank everyone for joining our call today and for your support of Alico. In addition, I want to send a special thank you to our dedicated employees and the rest of our management team for their continued efforts to make Alico the best it can be. Our annual meeting will be held on Thursday, February 25 in Tampa. And we're strongly encouraging shareholders this year to mail in their proxy vote. We look forward to hosting another earnings call for our second quarter results in May. We hope everybody stays safe. Thank you.

Thank you, ladies and gentlemen. This concludes today's conference. You may disconnect your lines at this time, and thank you for your participation.