Amended 10q 11/30/03
                 UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C.  20549
                                     FORM 10-Q/A


__X__  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES     
       EXCHANGE ACT OF 1934

For quarterly period ended November 30, 2003.      

                                         OR

_____  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
       EXCHANGE ACT OF 1934   

For the transition period from _____________________ to ____________________.


                           Commission file number 0-261.


                                    ALICO, INC.
              (Exact name of registrant as specified in its charter)


           Florida                                         59-0906081
(State or other jurisdiction of                         (I.R.S. Employer
 incorporation of organization)                        Identification No.) 
                                      
      P. O. Box 338, La Belle, FL                             33975
(Address of principal executive offices)                   (Zip Code)     

Registrant's telephone number, including area code     863/675-2966



Indicate by check mark whether the registrant (1) has filed all reports 
required to be filed by Section 13 or 15(d) of the Securities Exchange Act 
of 1934 during the preceding 12 months (or for such shorter period that the 
registrant was required to file such reports), and (2) has been subject to 
such filing requirements for the past 90 days.



                           Yes  X          No



There were 7,159,104 shares of common stock, par value $1.00 per share, 
outstanding at January 13, 2004.
                                                                      
Explanatory note:
This Amendment on Form 10-Q/A amends the Quarterly Report on Form 10-Q
for the quarter ended November 30, 2003 which was previously filed with 
the Securities and Exchange Commission (the "SEC") on January 13, 2004.
The footnotes to the financial statments and disclosures set forth in 
Management's Discussion and Analysis are amended herein.
 
This Amendment amends the footnotes to the financial statements and 
Management's discussion and analysis portions of the Quarterly Report as
specified above and does not reflect events occurring after the original
filing date of the Quarterly Report on January 13, 2004.
 
 

 
    1

 


                             PART I.  FINANCIAL INFORMATION                    
Item 1.  Financial Statements

                               ALICO, INC. AND SUBSIDIARIES
                    CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS 
                         (in thousands, except per share data)    
                      (Unaudited - See Accountants' Review Report)

                                               Three Months Ended November 30,
                                                    2003             2002     
                                              _______________________________

Revenue:
     Citrus                                      $     1,354      $     1,621
     Sugarcane                                         2,591            2,748
     Ranch                                             3,344            2,118
     Rock products and sand                              765              517  
     Oil lease and land rentals                          289              246
     Forest products                                      82               50
     Retail land sales                                    14               84
                                                 ___________      ___________  

          Total operating revenue                      8,439            7,384  
                                                 ___________      ___________  
Cost of sales     
     Citrus production, harvesting and 
       marketing                                       2,254            1,580  
     Sugarcane production and harvesting               2,107            2,224
     Ranch                                             2,620            2,214
     Retail land sales                                    16               69 
                                                ____________      ___________  

        Total costs of sales                           6,997            6,087
                                                ____________      ___________  
          
          Gross Profit                                 1,442            1,297   
General and administration expenses                    1,409            1,278 
                                                ____________      ___________

     Income from operations                               33               19
                         

Other income (expenses):                                                       
     (loss) profit on sales of real estate                 -              451
     Interest and investment income                      450              276 
     Interest expense                                   (488)            (541)
     Other                                                79              144
                                                ____________      ___________

        Total other income, net                           41              330
                                                ____________      ___________

Income before income taxes                                74              349
Provision for income taxes                                25               91
                                                ____________      ___________

Net income                                                49              258
                                                ____________      ___________
                                                ____________      ___________

Weighted average number of shares outstanding          7,140            7,097
                                                ____________      ___________
                                                ____________      ___________

Per share amounts:        
     Basic                                      $       .01      $        .04
     Fully diluted                              $       .01      $        .04 
     Dividends                                  $       .60      $        .35

See accompanying Notes to Condensed Consolidated Financial Statements.
 

 
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                          ALICO, INC. AND SUBSIDIARIES
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                (in thousands)
                       (See Accountants' Review Report)


                                           November 30, 2003   August 31, 2003
                                              (unaudited) 
                                           _________________   _______________
          ASSETS

Current assets:
     Cash and cash investments                 $      7,244       $     16,352
     Marketable securities                           44,720             38,820
     Accounts receivable                              5,933              9,680
     Mortgage and notes receivable                    2,514              2,534
     Inventories                                     21,160             21,845
     Other current assets                             1,084                973
                                               ____________       ____________

          Total current assets                       82,655             90,204

Notes receivable, non-current                           221                234
Land held for development and sale                   16,714             16,587
Investments                                             856                886
Property, buildings and equipment                   147,034            144,578
Less:  Accumulated depreciation                     (41,022)           (39,741)
                                               ____________       ____________

          Total assets                         $    206,458       $    212,748 
                                               ____________       ____________
                                               ____________       ____________
 

 
    3

 

                                 ALICO, INC. AND SUBSIDIARIES
                             CONDENSED CONSOLIDATED BALANCE SHEETS
                                         (in thousands)
                                (See Accountants' Review Report)
                                           (Continued)
                                           
                                         November 30, 2003     August 31, 2003
                                            (unaudited)  
        LIABILITIES                      _________________    ________________
                                                                      
Current liabilities:
     Accounts payable                       $        908          $      2,110 
     Accrued ad valorem taxes                          -                 1,519
     Current portion of notes payable              3,321                 3,321
     Accrued expenses                                978                   988
     Deferred income taxes                         1,638                 1,680
     Due to profit sharing                             -                   350
     Other current liabilities                       863                   754 
                                            ____________          ____________

          Total current liabilities                7,708                10,722

Deferred revenue                                      10                    91
Notes payable                                     53,276                54,127
Deferred income taxes                              9,574                 9,668
Deferred retirement benefits                         511                   120
Other non-current liability                        9,609                 9,609
Donation payable                                   2,228                 2,229
                                            ____________          ____________

          Total liabilities                       82,916                86,566
                                            ____________          ____________

       STOCKHOLDERS' EQUITY

Common stock                                $      7,152          $      7,116
Additional paid in capital                         3,810                 3,074
Accumulated other comprehensive income             1,784                   961
Retained earnings                                110,796               115,031
                                            ____________          ____________

     Total stockholders' equity                  123,542               126,182
                                            ____________          ____________
     Total liabilities and 
       stockholders' equity                 $    206,458          $    212,748
                                            ____________          ____________
                                            ____________          ____________

See accompanying Notes to Condensed Consolidated Financial Statements.
 

 
    4

 

ALICO, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited - See Accountants' Review Report)
 
                                              Three Months Ended November 30, 
                                                     2003             2002
                                                ____________    _____________
Cash flows from operating activities:
                                                                            
            Net cash provided from                      
             operating activities                  $   2,448        $   2,367  
                                                  __________       __________
Cash flows used for investing activities:

    Purchases of property and equipment               (2,343)          (2,270)
    Proceeds from sales of real estate                     -              541
    Proceeds from sales of property and equipment        143              157 
    Purchases of marketable securities                (5,690)            (814)
    Proceeds from sales of marketable securities         999            2,195  
    Other                                                (95)               4  
                                                  __________       __________
            Net cash used for  
             investing activities                     (6,986)            (187)
                                                  __________       __________
Cash flows used for financing activities:

    Repayment of bank loan                            (8,561)          (6,684)
    Proceeds from bank loan                            7,710            9,127
    Proceeds from exercising stock options               566              383
    Dividends paid                                    (4,285)          (2,482)
                                                  __________       __________
            Net cash (used for) provided from 
             financing activities                     (4,570)             344
                                                  __________       __________
            Net (decrease)increase in cash
             and cash investments                 $   (9,108)      $    2,524

Cash and cash investments

    At the beginning of year                          16,352           10,140
                                                  __________       __________

    At end of period                                   7,244           12,664
                                                  __________       __________
                                                  __________       __________ 

See accompanying Notes to Condensed Consolidated Financial Statements.
 

 
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                              ALICO, INC. AND SUBSIDIARIES
                 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                           (See Accountants' Review Report)
                       (in thousands except for per share data)

1.  Basis of financial statement presentation:

The accompanying condensed consolidated financial statements include the 
accounts of Alico, Inc. and its wholly owned subsidiaries, Saddlebag Lake 
Resorts, Inc. (Saddlebag),Agri-Insurance Company, Ltd. (Agri), and
Alico-Agri, LLC after elimination of all significant intercompany balances 
and transactions.

The accompanying unaudited condensed consolidated financial statements have 
been prepared on a basis consistent with the accounting principles and policies 
reflected in the Company's annual report for the year ended August 31, 2003.  
In the opinion of Management, the accompanying unaudited condensed consolidated
financial statements contain all adjustments necessary for a fair presentation
of its consolidated financial position at November 30, 2003 and the
consolidated results of operations and cash flows for the three months ended
November 30, 2003 and 2002.

The basic business of the Company is agriculture which is of a seasonal nature 
and subject to the influence of natural phenomena and wide price fluctuations.  
Fluctuation in the market prices for citrus fruit has caused the Company to 
recognize additional revenue from the prior year's crop totaling $174 in 
2003 and $193 in 2002.  Due to current market conditions for citrus, the 
Company recorded a valuation allowance of ($722) for its unharvested
fruit crop on trees at November 30, 2003. 

The results of operations for the stated periods are not necessarily
indicative of results to be expected for the full year.  Certain items from
2002 have been reclassified to conform to the 2003 presentation.

2.  Real Estate:

Real estate sales are recorded under the accrual method of accounting.  
Under this method, a sale is not recognized until payment is received, 
including interest, aggregating 10% of the contract sales price for 
residential properties and 20% for commercial properties.

3.  Mortgage and notes receivable:

Mortgage and notes receivable arose from real estate sales.  The balances 
at November 30, 2003 and August 31, 2003 are as follows:
 

 
    6

 

 
                                         November 30,         August 31,
                                               2003               2003
                                         (Unaudited)
                                         ____________         __________

    Mortgage notes receivable            
       on retail land sales              $        235         $      235
    Mortgage notes receivable 
       on bulk land sales                       2,410              2,420
    Other notes receivable                         90                113
                                         ____________         __________

    Total mortgage notes receivable      $      2,735         $    2,768
    Less current portion                        2,514              2,534
                                         ____________         __________

       Non-current portion               $        221         $      234
                                         ____________         __________
                                         ____________         __________
  


4. Inventories:

A summary of the Company's inventories is shown below:

                                         November 30,         August 31,
                                             2003                2003
                                         (Unaudited)
                                         ____________        ___________

    Unharvested fruit crop on trees      $      8,692        $     8,135
    Unharvested sugarcane                       4,829              5,159
    Beef cattle                                 6,943              7,892
    Sod                                           696                659
                                         ____________        ___________

         Total inventories               $     21,160        $    21,845
                                         ____________        ___________
                                         ____________        ___________

Subject to prevailing market conditions, the Company may hedge a portion of
its beef inventory by entering into cattle futures contracts to reduce
exposure to changes in market prices.  Any gains or losses anticipated under
these agreements were deferred, with the cost of the related cattle being
adjusted when the contracts are settled.  At November 30, 2003, the Company
had no open positions.
 

 
    7

 

5.  Income taxes:                        

The provision for income taxes for the quarters ended November 30, 2003 
and 2002 is summarized as follows:
        
                                           Three Months Ended November 30,
                                                2003                 2002
                                          (Unaudited)          (Unaudited)   
                                          _______________________________
                                                                  
    Current:
          Federal income tax              $      281           $       55
          State income tax                        30                    9
                                          __________           __________       
                                                               
                                                 311                   64
                                          __________           __________    
     
     Deferred:
          Federal income tax                    (258)                  23 
          State income tax                       (28)                   4 
                                          __________           __________ 

                                                (286)                  27 
                                          __________           __________ 
             Total provision for 
               income taxes               $       25           $       91 
                                          __________           __________
                                          __________           __________

The Internal Revenue Service has begun its examination of
the Company tax returns for the years ended August 31, 2000, 2001 and 2002,
and Agri tax returns for calendar years 2000, 2001 and 2002.  Any adjustments 
resulting from the examination will be currently due and payable.  No 
adjustments have been proposed to date.

6.  Indebtedness:

The Company has financing agreements with commercial banks that permit the 
Company to borrow up to $54.0 million.  Financing agreements allowing the  
Company to borrow up to $41.0 million are due in 2005, and up to $3.0 million
which is due on demand.  In December 2001, the Company entered into an
additional financing agreement to borrow $10 million to be paid in
equal principal installments over five years with interest to be paid     
quarterly.  The outstanding debt under these agreements was $43.3 million
and $41.0 million at November 30 and August 31, 2003 respectively.  
In March 1999, the Company mortgaged 7,680 acres for $19 million in 
connection with a $22.5 million acquisition of producing citrus and 
sugarcane operations.  The total long-term portion of debt at November 30,
2003 and August 31, 2003 was $53.3 million and $54.1 million respectively.
 

 
    8

 

Maturities of the indebtedness of the Company over the next five years are as 
follows : 2004- $3,321; 2005- $36,260; 2006- $3,312; 
2007- $3,315; 2008- $1,318; and $9,071 thereafter.

Interest cost expensed and capitalized during the three months ended 
November 30, 2003 and 2002 was as follows:

                                      2003                2002
                                    ________            ________

          Interest expensed         $    488            $    541
          Interest capitalized            66                  60         
                                    ________            ________

              Total interest cost   $    554            $    601
                                    ________            ________
                                    ________            ________

7.  Other non-current liability:


Alico formed a wholly owned insurance subsidiary, Agri Insurance
Company, Ltd. (Bermuda) ("Agri") in June of 2000. Agri was formed in
response to the lack of insurance availability, both in the traditional
commercial insurance markets and governmental sponsored insurance
programs, suitable to provide coverages for the increasing number and
potential severity of agricultural related events. Such events include
citrus canker, crop diseases, livestock related maladies and weather.
Alico's goal included not only prefunding its potential exposures
related to the aforementioned events, but also to attempt to attract
new underwriting capital if it is successful in profitably
underwriting its own potential risks as well as similar risks of its
historic business partners. Alico primarily utilized its inventory of
land and additional contributed capital to bolster the underwriting
capacity of Agri.

Alico capitalized Agri by contributing real estate located in Lee County
Florida. The real estate was transferred at its historical cost basis.
Agri received a determination letter from the Internal Revenue Service (IRS)
stating that Agri was exempt from taxation provided that net premium levels,
consisting only of premiums with third parties, were below an annual stated
level ($350 thousand). Third party premiums have remained below the stated
annual level. As the Lee county real estate was sold, substantial gains were
generated in Agri, creating permanent book/tax differences.

Since receiving the favorable IRS determination letter, certain transactions,
entered into by other taxpayers under the same IRS Code Section came under
scrutiny and criticism by the news media. In reaction, Management has
recorded a contingent liability of $9.6 million for income taxes in the event
of an IRS challenge. Management’s decision has been influenced by perceived
changes in the regulatory environment. The Company believes that it can
successfully defend any such challenge, however, because it is probable that
a challenge will be made and possible that it may be successful, Management
has provided for the contingency.

The Internal Revenue Service has begun its examination of the Company tax
returns for the years ended August 31, 2000, 2001 and 2002, and Agri tax
returns for calendar years 2000, 2001 and 2002. Any adjustments resulting
from the examination will be currently due and payable. No adjustments have
been proposed to date.
8. Dividends: On October 7, 2003 the Company declared a dividend of $.60 per share, which was paid on October 31, 2003.
 

9. Disclosures about reportable segments: Alico, Inc. has three reportable segments: citrus, sugarcane, and ranching. The commodities produced by these segments are sold to wholesalers and processors who prepare the products for consumption. The Company's operations are located in Florida. The accounting policies of the segments are the same as those described in the summary of significant accounting policies. Alico, Inc. evaluates performance based on profit or loss from operations before income taxes. Alico, Inc.'s reportable segments are strategic business units that offer different products. They are managed separately because each segment requires different management techniques, knowledge and skills. The following table presents information for each of the Company's operating segments as of and for the three months ended November 30, 2003: ____________________________________________________________ Consolidated Citrus Sugarcane Ranch Other* Total ____________________________________________________________ Revenue $ 1,354 2,591 3,344 1,630 8,919 Costs and expenses 2,254 2,107 2,620 1,864 8,845 Depreciation and amortization 603 535 356 81 1,575 Segment profit (loss) (900) 484 724 (234) 74 Segment assets 52,972 50,164 23,630 79,692 206,458 The following table presents information for each of the Company's operating segments as of and for the three months ended November 30, 2002: ____________________________________________________________ Consolidated Citrus Sugarcane Ranch Other* Total ____________________________________________________________ Revenue $ 1,621 2,748 2,118 1,768 8,255 Costs and expenses 1,580 2,224 2,214 1,888 7,906 Depreciation and amortization 593 592 364 136 1,685 Segment profit 41 524 (96) (120) 349 Segment assets 53,388 50,461 24,169 64,494 192,512 *Consists of rents, investments, real estate activities and other such items of a general corporate nature.
 

 
  9

10. Stock Option Plan
On November 3, 1998, the Company adopted the Alico, Inc., Incentive Equity Plan (The Plan) pursuant to which the Board of Directors of the Company may grant options, stock appreciation rights, and/or restricted stock to certain directors and employees. The Plan authorizes grants of shares or options to purchase up to 650,000 shares of authorized but unissued common stock. Stock options granted have a strike price and vesting schedules which are at the discretion of the Board of Directors and determined on the effective date of the grant. The strike price cannot be less than 55% of the market price. On November 30, 2003, there were 113,883 shares exercisable and 347,225 shares available for grant. Weighted Weighted average average remaining exercise contractual Options price Life (in years) _______ _________ _______________ Balance outstanding, August 31, 2002 117,847 15.20 7 _______________ Granted 67,280 15.68 _______________ Exercised 35,726 15.53 _______ _________ Balance outstanding, August 31, 2003 149,401 15.34 9 _______________ Granted 65,081 15.34 _______________ Exercised 35,518 15.57 _______ _________ Balance outstanding, November 30, 2003 178,964 15.38 _______ _________ _______ _________ Had the Company determined compensation cost based on the fair value at the grant date for its stock options under SFAS 123, the Company's net income would have changed to the proforma amounts indicated below (in thousands): Three months ended November 30, 2003 2002 _______ _______ Net income as reported $ 49 $ 258 Proforma net income $ 63 $ 256 Basic earnings per share reported $ .01 $ .04 Proforma basic earnings per share $ .01 $ .04
 

 
    10

 

 
11. Future Application of Accounting Standards

In January 2003, the Financial Accounting Standards Board (FASB) issued    
Interpretation No. 46, "Consolidation of Variable Interest Entities."  
Interpretation No. 46 requires unconsolidated variable interest entities to be
consolidated by their primary beneficiaries if the entities do not effectively
disperse the risks and rewards of ownership among their owners and other
parties involved.  The provisions of interpretation No. 46 are applicable
immediately to all variable interest entities created after January 31, 2003
and variable interest entities in which an enterprise obtains an interest
after that date, and for variable interest entities created before that date,
the provisions are effective for reporting periods beginning after
December 31, 2003.  The adoption of Interpretation No. 46 is not expected to
have a material effect on the financial condition, results of operations, or
liquidity of the Company.
 

 
    11

 

ITEM 2.  Management's Discussion and Analysis of Financial Condition and  
Results of Operations.

LIQUIDITY AND CAPITAL RESOURCES:

Working capital decreased to $74.9 million at November 30, 2003, down from     
$79.5 million at August 31, 2003.  As of November 30, 2003, the Company had 
cash and cash investments of $7.2 million compared to $16.4 million at 
August 31, 2003. Marketable securities increased to $44.7 million from $38.8 
million during the same period.  The ratio of current assets to current 
liabilities increased to 10.72 to 1 at November 30, 2003 up from 8.41 to 1 at 
August 31, 2003. Total assets decreased by $6.2 million to $206.5 million at 
November 30, 2003, compared to $212.7 million at August 31, 2003.  

 
Management expects several real estate transactions to close in
fiscal 2004. Additionally, Management expects continued profitability from
its agricultural operations in fiscal 2004. The outlook is for
gross profits from citrus operations to decline due to a large
crop forecast for the industry as a whole and substantial carryover
inventories for the industry. Management also expects gross profits from
sugarcane to decline as the Company's current crop is expected
to be smaller in fiscal 2004 than in fiscal 2003.
 
Management believes that the Company will be able to meet its working capital requirements for the foreseeable future with internally generated funds. In addition, the Company has credit commitments which provide for revolving credit of up to $54.0 million, of which $10.7 million was available for the Company's general use at November 30, 2003 (see Note 6 to condensed consolidated financial statements). RESULTS OF OPERATIONS: The basic business of the Company is agriculture, which is of a seasonal nature and is subject to the influence of natural phenomena and wide price fluctuations. The results of operations for the stated periods are not necessarily indicative of results to be expected for the full year. Net income for the three months ending November 30, 2003 decreased by $209 thousand when compared to the first quarter of the prior year. This was primarily due to a decrease in profit from bulk real estate sales for the quarter ended November 30, 2003 when compared to the quarter ended November 30, 2002. No bulk real estate sales occurred in the first quarter of fiscal 2004, while a profit of $451 thousand was earned from bulk real estate sales during the first quarter of fiscal 2003. Income from operations increased to $33 thousand for the first quarter of fiscal 2004 from $19 thousand for the first quarter of fiscal 2003. The increase was primarily due to an increase in income from rock and sand product sales. Income from agricultural operations decreased when compared to the first quarter of fiscal 2003 ($308 thousand vs. $469 thousand for the first three months of fiscal 2004 and 2003, respectively). For a detailed discussion
of agricultural operating results please see below.
Citrus ______ The Citrus division recorded a loss of $900 thousand for the first quarter of fiscal 2004, compared to $41 thousand profit during the first quarter of fiscal 2003. Recognition of revenue from the prior year's crop totaled $174 thousand in fiscal 2003 vs. $193 thousand in the first quarter of fiscal 2003 (see Note 1 to Condensed Consolidated Financial Statements). The current year Florida orange crop has been forecasted to be the largest on record. Accordingly, citrus prices have declined ($4.28 vs. $4.91 average price per
box at November 30, 2003 and 2002, respectively). In light of this, the Company recorded a valuation allowance of $722 thousand for its unharvested fruit crop on trees at November 30, 2003.
 
 


 
    12

 

Sugarcane
_________

Sugarcane earnings were $484 thousand for the first quarter of fiscal 2004,
compared to $524 thousand during the first quarter of fiscal 2003.  Less acres 
were harvested during the first quarter of fiscal 2004 than the first quarter
of fiscal 2003 (2,904 vs. 3,263 acres harvested for the first quarter of fiscal
2004 and 2003, respectively), and was the primary reason for the decline. Ranching ________ Ranch earnings increased during the first quarter of 2004 when compared to the same period a year ago ($724 thousand vs. ($96 thousand) for the three months ended November 30, 2003 and 2002, respectively). The number of cattle sold increased by 28% during the first quarter of fiscal 2004 compared to the same period in 2003 (3,395 vs. 2,658 for the first quarter of fiscal 2004 and
2003, respectively). More animals of the age and size required by meat packers
were available for sale in fiscal 2004 than in 2003 because of the timing of
placements into western feedlots.Additionally, cattle prices increased 34% when
compared to the same period a year ago ($.91 vs. $.68 per pound in fiscal 2004 and
2003, respectively). During December 2003, a cow in Washington State tested positive for bovine spongiform encephalopathy (BSE a/k/a "mad cow disease"). This has caused some foreign countries to ban beef imports from the United States. Although there have been price declines since the BSE discovery, the incident appears to be isolated and beef prices are still currently at prior year levels. The Company has no reason to believe its beef herd is subject to any risk from this disease. General Corporate _________________ The Company is continuing its marketing and permitting activities for its land which surrounds Florida Gulf Coast University in Lee County, Florida. There are sales contracts in place for all this property, totaling $171.8 million. The agreements are at various stages in the due diligence process with closing dates expected over the next three years. The Company formed Agri-Insurance Company, Ltd. (Agri) a wholly owned subsidiary, during July of 2000. The insurance company was initially capitalized by transferring cash and approximately 3,000 acres of the Lee County property. Through Agri, the Company has been able to under- write previously uninsurable risk related to catastrophic crop and other losses. The coverages currently underwritten by Agri will indemnify insureds for the loss of the revenue stream resulting from a catastrophic event that would cause a grove to be replanted. To expedite the creation of the capital liquidity necessary to underwrite the Company's exposure to catastrophic losses, another 5,600 acres were transferred during fiscal 2001. Agri under- wrote a limited amount of coverage for Ben Hill Griffin, Inc. during fiscal years 2001 - 2004, and in August 2002, Agri began insuring the Alico, Inc., citrus groves. As Agri gains underwriting experience and increases its liquidity, it will be able to increase its insurance programs. Due to Agri's limited operating history, it would be difficult, if not impossible, to speculate about the impact that Agri could have on the Company's financial position, results of operations and liquidity in future periods. Since the coverages that have been written, as liquidity has been generated, are
 

 
  13

 

primarily for the benefit of Alico, the financial substance of this venture is to insure risk that is inherent in the Company's existing operations. During the third quarter of fiscal 2003, the Company entered into a limited partnership with Agri to manage Agri's real estate holdings. Agri transferred all of the Lee County property and associated sales contracts to the limited partnership, Alico-Agri, Ltd (Alico-Agri) in return for a 99% partnership interest. Alico, Inc. transferred $1.2 million cash for a 1% interest. The creation of the partnership allows Agri to concentrate solely on insurance matters while utilizing Alico's knowledge of real estate management. The partnership will pay Alico a management fee for real estate management and administrative services. During the second quarter of fiscal 2003, Agri contracted to sell an additional 53 acres in Lee County, Florida to the Ginn Company. The contract price is $10.6 million. Agri also announced an addition to the original Ginn Company contract, adding 555 acres for a price of $13.3 million. This amendment brought the total acreage of the contract to 5,060. In the fourth quarter of fiscal 2003, the Company, through Alico-Agri, completed the sale of 313 acres in Lee County, Florida to Airport Interstate Associates, LLC. The sales price was $9.7 million and resulted in a gain of $8.7 million. Additionally, Alico-Agri completed the sale of 40 acres in Lee County, Florida to University Club Apartments/Gulf Coast, LLC. The sales price of the property was $5.5 million and generated a gain of $4.7 million. During the fourth quarter of fiscal 2003, the Company sold 358 acres in Hendry County, Florida for $669 thousand. The sale generated a gain of $335 thousand. Additionally, the Company sold 266 acres in Polk County, Florida for $617 thousand, generating a gain of $612 thousand. During the second quarter of fiscal 2004, the Company, through Alico-Agri, completed the sale of 244 acres in Lee County, Florida. The sales price was $30.9 million and will result in a gain of $18.2 million, of which $2.1 million will be recorded in the second quarter of fiscal 2004, while the remainder is expected to be recognized by August 31, 2004. Off Balance Sheet arrangements ______________________________ The Company has no off balance sheet arrangements that have, or are reasonably likely to have any material impact on the Company's current or future financial condition, revenues, or results of operations. Disclosure of Contractual Obligations _____________________________________ Contractual obligations of the Company are outlined below:
November 30, 2003 (in thousands) Less than 1-3 3-5 5+ Contractual obligations Total 1 year years years years Long-term debt $56,597 $3,321 $39,572 $4,633 $9,071 Leases (Operating & capital) - - - - - Purchase obligations (donation) 3,012 784 1,458 770 - Other long-term liabilities 19,704 - 9,931 180 9,593 August 31, 2003 (in thousands) Less than 1-3 3-5 5+ Contractual obligations Total 1 year years years years Long-term debt $57,448 $3,321 $39,576 $4,633 $9,918 Leases (Operating & capital) - - - - - Purchase obligations (donation) 2,983 754 1,459 770 - Other long-term liabilities 19,488 - 9,820 180 9,488 Critical Accounting Policies and Estimates __________________________________________ The preparation of the Company's financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and judgments that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. On an on-going basis, management evaluates the estimates and assumptions based upon historical experience and various other factors and circumstances. Management believes that the estimates and assumptions are reasonable in the circumstances; however, actual results may vary from these estimates and assumptions under different future circumstances. The following critical accounting policies that affect the more significant judgments and estimates used in the preparation of our consolidated financial statements are discussed below. Alico records inventory at the lower of cost or market. Management regularly assesses estimated inventory valuations based on current and forecasted usage of the related commodity and any other relevant factors that affect the net realizable value. Based on fruit buyers' and processors' advances to growers, stated cash and futures markets combined experience in the industry, management reviews the reasonableness of the citrus revenue accrual. Adjustments are made throughout the year to these estimates as relevant information regarding the citrus market becomes available. Fluctuation in the market prices for citrus fruit has caused the Company to recognize additional revenue from the prior year's crop totaling $174 thousand during fiscal 2004 and $193 thousand in fiscal 2003.
In accordance with Statement of Position 85-3 "Accounting by Agricultural Producers and Agricultural Cooperatives", the cost of growing crops (citrus and sugarcane) are capitalized into inventory until the time of harvest. Once a given crop is harvested, the related inventoried costs are recognized as cost of sales to provide an appropriate matching of costs incurred with the related revenue earned. The inventoried cost of each crop is then compared with the estimated net realizable value (NRV) of the crop and any costs in excess of the NRV are immediately recognized as cost of sales. Cautionary Statement ____________________ Readers should note, in particular, that this Form 10-Q contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), that involve substantial risks and uncertainties. When used in this document, or in the documents incorporated by reference herein, the words "anticipate", "believe", "estimate", "may", "intend" and other words of similar meaning, are likely to address the Company's growth strategy, financial results and/or product development programs. Actual results, performance or achievements could differ materially from those contemplated, expressed or implied by the forward looking statements contained herein. The considerations listed herein represent certain important factors the Company believes could cause such results to differ. These considerations are not intended to represent a complete list of the general or specific risks that may effect the Company. It should be recognized that other risks, including general economic factors and expansion strategies, may be significant, presently or in the future, and the risks set forth herein may affect the Company to a greater extent than indicated. ITEM 3. Quantitative and Qualitative Disclosures about Market Risk No changes ITEM 4. Controls and Procedures Evaluation of disclosure controls and procedures The Company maintains controls and procedures designed to ensure that information required to be disclosed in the reports that the Company files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission. Based upon their evaluation of those controls and procedures performed within 90 days of the filing date of this report, the Chief Executive and Chief Financial officers of the Company concluded that the Company's disclosure controls and procedures were adequate. Changes in internal controls The Company made no significant changes in its internal controls or in other factors that could significantly affect these controls subsequent to the date of the evaluation of those controls by the Chief Executive and Chief Financial officers.
FORM 10-Q PART II. OTHER INFORMATION ITEMS 1-5 have been omitted as there are no items to report during this interim period. ITEM 6. Exhibits and reports on Form 8-K. (a) Exhibits: Exhibit 11. Computation of Weighted Average Shares Outstanding at November 30, 2003. Exhibit 31.1 Rule 13a-14(a) certification.
 
Exhibit 31.2 Rule 13a-14(a) certification.
 
Exhibit 32.1 Section 1350 certification.
Exhibit 32.2 Section 1350 certification.
Exhibit 99. Accountant's Review Report. (b) Reports on Form 8-K. January 8, 2004 announcing real estate sale by Alico-Agri
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. ALICO, INC. (Registrant) January 3, 2005 W. Bernard Lester Date President Chief Executive Officer (Signature) January 3, 2005 L. Craig Simmons Date Vice President Chief Financial Officer (Signature) January 3, 2005 Patrick W. Murphy Date Controller (Signature)