Welcome to Alico's Third Quarter 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 third quarter ended June 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, and 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 includes risk details in the company's quarterly reports on Form 10-Q, annual report on Form 10-K, current reports on Form 8-K and any amendments there too 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 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 now like to turn the call over to the company's President and CEO, Mr. John Kiernan.

Thank you, Anna and thank you everyone for joining us for Alico's third quarter 2022 earnings call this afternoon. During this past harvest season, which is now complete, we along with the entire Florida citrus industry experienced several significant challenges, which resulted in disappointing financial results. We experienced a greater rate of fruit drop than in previous years. In late January 2022, we were hit with a freeze event, which was at an intensity which we believe had not occurred in Florida for almost 20 years. That freeze event contributed to lower production for our Valencia crop. The freeze also contributed to fruit failing to mature to its fullest levels, as normally occurs throughout the season, resulting in lower than anticipated pound solids. Because of these challenges, we have revised our fiscal year 2022 financial guidance to reflect the disappointing harvest season. Although this past harvest was a difficult one, we are optimistic for the 2022-23 harvest season. Nearly all of our trees showed no indication of any long-term damage from the freeze event. And with the aggressive planting strategy we undertook in the beginning of 2018, we expect to have more citrus trees producing fruit in the 2022-'23 harvest season. The USDA in its July 12 2022 citrus crop forecast for the '21-'22 harvest season indicated the overall Florida orange crop decreased from approximately 53 million boxes for the '20-'21 crop year to approximately 41 million boxes for the '21-'22 crop year, a decrease of approximately 22.7%. A portion of this decline was directly related to the freeze event. By comparison, the company experienced a decline in total box production for this current harvest season of only 12.9%. We believe this lower rate of decline as compared to the Rest of the Florida citrus industry is due to a…

Thank you. Your question today come from the line of Gerry Sweeney with ROTH Capital. Your line is now open.

Hey, good afternoon, John. Thanks for taking my call.

Hi, Gerry.

Wanted to started sort of top income statement? You have I think you mentioned the 2018 planting program. How many trees or acres do you think it's going to hit into maturity next year?

300,000, 400,000 potentially.

So these are acres?

Are trees.

Trees. Okay. Okay. Got it. And then this is sort of related also, but the third-party caretaking the 2,100 acres? I know there's no average in ag, right. But do you know what sort of production box production that has done in the past?

We haven't come in with that level of granularity.

Okay.

We really haven't commented to you on any of kind of our individual growth. So we don't want to start yet. But it's attractive enough that we're deciding to lease it.

Got it. I mean, this is the track that mean $200,000 is there appears to be a very cheap price. So I would imagine there's some good opportunity there for at least for next year?

We believe so.

Got it. And then just talking about contracts, obviously inflation's on the tip of everybody's tongue. Do you have any -- what are the status of contracts for off take agreements for the oranges and what our if any some inflation escalators embedded in the in the contracts?

Sure. The other fruit is currently still under long-term contracts. And about 25% of it is going to be coming up for a new contract at the end of next season, which will obviously be renewing into a higher inflationary environment. The remaining 75% it goes out for a season after that. So two more years, and that actually has some inflation escalators built into pricing.

Got it. And how does that work with dealing with costs being. I assume, hopefully inflation moderate by that point, obviously. But with the higher costs, if embedded maybe in the future? How does that operate in terms of the contract? Is that just a negotiation process? Or just curious how you work that into the contract?

Well, one of the contracts we have the one that's renewing next season is actually a cost plus that takes into account kind of all of our growth management costs. So inflation would be a direct impact to -- if we had a new contract under that structure.

Okay, and then CFO search?

Has been ongoing since very early June. It's been illuminating and productive. We've met with several very qualified candidates and that search process is still ongoing. So hopefully, we'll have an announcement in the near future, but no decisions have been made at this point.

Got it. And that's it for me. So I appreciate you taking my call.

Thank you, Gerry.

We have reached the end of today's question-and-answer session. I would like to turn the call back over to Mr. Kiernan for closing remarks.

We look forward to speaking with you about our full-year results in December.

This conclude today's conference. You may disconnect your lines at this time. Thank you for your participation and have a great day.