Alico Q2 2025 Earnings Report

Alico EPS Results

• Actual EPS: -$10.98
• Consensus EPS: -$0.36
• Beat/Miss: Missed by -$10.62
• One Year Ago EPS: N/A

Alico Revenue Results

• Actual Revenue: $17.98 million
• Expected Revenue: $22.20 million
• Beat/Miss: Missed by -$4.22 million
• YoY Revenue Growth: N/A

Alico Announcement Details

• Quarter: Q2 2025
• Date: 5/13/2025
• Time: After Market Closes
• Conference Call Date: Wednesday, May 14, 2025
• Conference Call Time: 8:30AM ET

Alico (NASDAQ:ALCO), together with its subsidiaries, operates as an agribusiness and land management company in the United States. The company operates in two segments, Alico Citrus, and Land Management and Other Operations. The Alico Citrus segment engages in planting, owning, cultivating, and/or managing citrus groves to produce fruit for sale to fresh and processed citrus markets, including activities related to the purchase and resale of fruit and value-added services, which include contracting for the harvesting, marketing, and hauling of citrus. The Land Management and Other Operations segment is involved in the activities related to native plant sales, grazing and hunting leasing, management, and/or conservation of unimproved native pastureland; and activities related to rock mining royalties and other insignificant lines of business, as well as in the activities related to owning and/or leasing improved farmland. The company was incorporated in 1960 and is based in Fort Myers, Florida.

Alico Q2 2025 Earnings Call Transcript

Key Takeaways

• Having completed the final major citrus harvest and reducing its workforce from 200 to 25, Alico is reshaping itself into a diversified land company that focuses on real estate development and alternative agricultural leasing.
• Alico sold 2,100 acres in Q2 and has raised its fiscal year 2025 land sales guidance from $20 million to a potential $50 million+, which is expected to substantially increase adjusted EBITDA and strengthen its balance sheet.
• The company filed a development application for the Corkscrew Grove Villages in Collier County—a planned 3,000-acre mixed-use project with up to 9,000 homes, 280,000 sq ft of commercial space, and 70,000 sq ft of civic amenities, targeting construction in 2028–29.
• Q2 revenue was $18 million, down 1% year-over-year, and the company reported a net loss of $111.4 million driven by $119 million of accelerated depreciation and impairments, offset by a positive adjusted EBITDA of $12.7 million.
• For fiscal 2025, Alico expects a year-end cash balance of ~$25 million, net debt of ~$60 million, and approximately $20 million of adjusted EBITDA, while valuing its land holdings at $650–750 million in present value.

Presentation

[Operator]

Morning, and welcome to Aleco's Second Quarter twenty twenty five Earnings Call. Currently, all participants are in a listen only mode. As a reminder, today's conference is being recorded. I would now like to turn the call over to your host, John Mills, Managing Partner at ICR.

[John Mills, Managing Partner at ICR]

Good morning, everyone, and thank you for joining us for Aleco's second quarter fiscal year twenty twenty five conference call. On the call today are John Kiernan, President and Chief Executive Officer, and Brad Heine, Chief Financial Officer. By now everyone should have access to the second quarter fiscal year twenty twenty five earnings release, which went out yesterday at approximately 5PM Eastern Time. If you've not had a chance to view the release, it's 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.

[John Mills, Managing Partner at ICR]

Before we begin, we'd like to remind everyone that the prepared remarks contain forward looking statements. Such statements are subject to risks, uncertainties and other factors that may cause the actual results to differ materially from those expressed or implied in these statements. Important factors that could cause or contribute to such differences include risks detailed in the company's quarterly report on Form 10 Q, annual reports on Form 10 ks, current reports on Form eight ks, and any amendments thereto 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 may also discuss non GAAP financial measures, including EBITDA, adjusted EBITDA and net debt.

[John Mills, Managing Partner at ICR]

For more details on these measures, please refer to the company's press release issued yesterday. And with that, it is my pleasure to turn the call over to the company's President and CEO, Mr. John Kiernan.

[John Kiernan, President and Chief Executive Officer at Alico]

Thank you, John. Good morning, everyone, and thank you for joining us for ELECO's second quarter fiscal year twenty twenty five earnings call. I'd like to update you on the progress we've made in executing our strategic transformation since our announcement in January. At the April, we completed our fiscal year twenty twenty five harvest, effectively concluding the majority of our capital investment in citrus operations. We will conduct a final harvest on the majority of the remaining 3,783 acres of operational citrus groves in fiscal year twenty twenty six.

[John Kiernan, President and Chief Executive Officer at Alico]

With this transition, we've reduced our workforce from approximately 200 to 25 employees, aligning our organizational structure with our transformed business model and significantly lowering operating expenses. On the land monetization front, we've completed the sale of 2,100 acres this year as part of our strategy to unlock the value of our substantial real estate portfolio. We previously announced our expectation to realize approximately $20,000,000 in land sales this fiscal year based upon transactions that are under option agreements or have been negotiated and are expected to close this year. We are now raising our outlook to potentially have an additional $30,000,000 of land sales or more this fiscal year, which would be a 150% increase from our prior guidance for fiscal year twenty twenty five expected land sales. This acceleration in land sales could dramatically improve our annual adjusted EBITDA and strengthen our ability to return capital to shareholders.

[John Kiernan, President and Chief Executive Officer at Alico]

We've also been actively engaged with agricultural operators throughout Florida to diversify our remaining agricultural activities. These discussions have focused on potential sod production, expanding sand mining activities, and leases to grow seasonal crops such as corn, sugarcane, and a variety of fruits and vegetables. We have negotiated agreements to lease approximately 5,250 acres of different growths to third party citrus growers next season. We are also in discussions or under contract with other vegetable and fruit growers who are clearing as many as 1,000 acres for us this season in lieu of lease payments. Our entitlement work for our identified near term development properties is progressing under the guidance of Mitch Hutchcraft, our Executive Vice President of Land Management.

[John Kiernan, President and Chief Executive Officer at Alico]

Mitch brings nearly four decades of experience in entitlement work throughout Florida. His deep expertise in navigating the complex rezoning and land use approval processes in Florida is invaluable as we work to unlock the development potential of our properties. The Corkscrew Grove Villages development application we filed in March represents a significant milestone in our transformation. This property located in Northwest Collier County at the strategic intersection of Collier, Lea and Henry Counties is being planned for two mixed use master plan communities consisting of approximately 1,500 acres each. As envisioned, the project will not only provide future residents with ample opportunities to live, work, and play in a growing part of Collier County, but will also enhance public infrastructure, permanently protect thousands of acres of sensitive land, and enhance wetlands and water resources.

[John Kiernan, President and Chief Executive Officer at Alico]

The villages will provide significant economic benefit to the region, and improvements will come at no additional cost to Collier County taxpayers. We expect the East And West Villages will each accommodate approximately 4,500 homes, 280,000 square feet of commercial space, and approximately 70,000 square feet of civic amenities, including village greens, trails, lakes, and preserves. We are thoughtfully integrating residential, commercial, and civic spaces to create a place where people can live and work, all while enhancing convenience and providing shopping alternatives for residents of Eastern Lea County, Northern Collier, and Southern Henry. Our development application was submitted to Collier County for local approval for the first two villages. While the long term vision for Quartzgruber Grove Villages includes two villages, our current application with Collier County only seeks approval for the East Village as the first step of a multi phased project.

[John Kiernan, President and Chief Executive Officer at Alico]

This current process is anticipated to take approximately one year, with the final decision expected in 2026. Additionally, we have also submitted applications to the South Florida Water Management District and the US Army Corps of Engineers for the entire Corker Village property. Construction on East Villages could begin in 2028 or 2029 if all approvals are granted. As part of the company's long term planning efforts, we took the proactive step in January 2025 to seek legislative approval from the Florida legislature to establish the Corkscrew Grove Stewardship District. Upon approval, the Corkscrew Grove Stewardship District will assist the LECO in its efforts to effectively finance infrastructure, help restore and manage natural areas, and oversee the administration of the plaster plant communities and lands within the district.

[John Kiernan, President and Chief Executive Officer at Alico]

Importantly, our development approach incorporates strategies proposed by the Florida Wildlife Corridor and the Collier Rural Land Stewardship Area Program, with plans to enhance and preserve over 6,000 acres for wildlife corridors and regional connected habitat. This commitment to environmental stewardship reflects our longstanding role as responsible land managers. We are also advancing entitlement work for our Bonnet Lake, Saddlebag Grove, and Plant World properties, which collectively represent additional development opportunities across different Florida counties. While the entitlement process involves many variables and stakeholders that can affect timing, we're taking a methodical approach to navigate these complexities. Collectively, these four near term development properties totaling approximately 5,500 acres are estimated to be worth between $335,000,000 and $380,000,000 in present value dollars and could be realized within the next five years.

[John Kiernan, President and Chief Executive Officer at Alico]

This represents significant value for our shareholders from just 10% of our land holdings. To support our evolving business model, we recently amended our credit agreement effective 03/31/2025. This amendment adjusts certain financial covenants and reduces crop and tree insurance coverage requirements, which is expected to result in cost savings while providing us with the flexibility needed to execute our transformation. We've also expanded our capital allocation strategy with the announcement of a $50,000,000 share repurchase program. As our cash balance increases through land sales and the establishment of diversified agricultural operations, we plan to maintain a balanced approach to capital deployment, including our quarterly dividend, opportunistic share repurchases, and strategic debt reduction.

[John Kiernan, President and Chief Executive Officer at Alico]

With these strategic initiatives well underway, I'm pleased with the progress we've made in positioning Alico for sustainable long term growth. To provide more detail on our financial performance and the impact of these transformative steps on our balance sheet, I will now turn it over to our CFO, Brad Heine.

[Brad Heine, CFO at Alico]

Thank

[Brad Heine, CFO at Alico]

you, John, and good morning, everyone. The second fiscal quarter ended 03/31/2025, revenue decreased 1% to $18,000,000 compared to $18,100,000 for the prior year period. For the six months ended 03/31/2025, revenue decreased 9% to $34,900,000 compared to $32,100,000 for the prior year period. For the three and six months ended 03/31/2025, Alico citrus harvested approximately four point seven million and eight point seven million pound solids of fruit, respectively, compared to five point eight million and ten point four million pound solids of fruit in the same periods of the prior fiscal year. As expected, harvest volumes in 2025 were lower compared to 2024, driven by the impact of Hurricane Milton, which hit Florida in October of twenty twenty four.

[Brad Heine, CFO at Alico]

ALECO's blended price per pound solids for the three and six months ended 03/31/2025 increased $0.70 and $0.85 respectively, as compared to the same period in the prior year as a result of more favorable pricing in one of our contracts with Tropicana. As John said, we completed our last major citrus harvest in April and have thus concluded the majority of our capital investment in our citrus operations. Land management and other operations revenue for the three and six months ended 03/31/2025 increased 10774% respectively as compared to the same periods in the prior year. The increase was primarily the result of an increase in rock and sand royalty income and sod sales, partially offset by lower farming, grazing and hunting lease revenues due to the sale of the Alico Ranch. Total operating expenses for the three and six months ended 03/31/2025 were $167,700,000 and $192,800,000 respectively, as compared to $36,300,000 and $64,500,000 in the same periods in the prior year.

[Brad Heine, CFO at Alico]

The increase in operating expenses was driven approximately $118,000,000 of non cash accelerated depreciation as a result of our strategic transformation and the decision to wind down our citrus operations as well as the impairment of our young trees, which were not yet being depreciated, and certain other assets at one of our gross of $25,000,000 General and administrative expenses for the three and six months ended 03/31/2025 increased $1,100,000 and $400,000 respectively, as compared to the same periods in the prior year. The increase was primarily due to the accelerated depreciation on certain administrative assets and higher legal fees related to the strategic transformation. Other income expense net for the three months ended 03/31/2025, increased $15,300,000 compared to the prior year period, driven by the sale of approximately 2,100 acres of land in the second quarter of twenty twenty five. Other income expense net for the six months ended 03/31/2025, was a gain of $14,200,000 compared to $75,000,000 in the prior year period, driven by the sale of the ELECO Ranch to the state of Florida in the prior year. For the three months ended March 2024, the company reported a net loss attributable to Alico common shareholders of $111,400,000 and $15,800,000 respectively.

[Brad Heine, CFO at Alico]

The increase in our net loss was principally the result of approximately $119,000,000 of accelerated depreciation, principally on citrus trees due to the strategic transformation and the decision to wind down our citrus operations, as well as the impairment of our young trees, which were not yet being depreciated and the long lived assets at one of our groves of 25,000,000 Partially offsetting this, land and equipment sales resulted in a gain of $15,800,000 in the current quarter. This was partially offset by a tax benefit of $26,900,000 for the three months ended 03/31/2025. For the three months ended 03/31/2025, the company had a loss of $14.58 per diluted common share compared to a loss of $2.07 per diluted common share for the three months ended 03/31/2024. For the three months ended 03/31/2025, EBITDA was a loss of $14,700,000 compared to a loss of $16,500,000 for the three months ended 03/31/2024, and adjusted EBITDA was a gain of $12,700,000 compared to a loss of $16,500,000 for the three months ended 03/31/2024. Turning now to our balance sheet and liquidity.

[Brad Heine, CFO at Alico]

Cash and cash equivalents were $14,700,000 as of 03/31/2025, compared to $3,200,000 at the end of fiscal year twenty twenty four. Net cash used in operating activities was 600,000 for the six months ended 03/31/2025, compared to $19,700,000 for the six months ending 03/31/2024. At quarter end, we had approximately $88,500,000 of remaining availability on our line of credit, and there were no significant debt maturities until 2029. Total debt was 89,600,000.0 and net debt was 74,900,000.0 as of 03/31/2025, compared to 92,100,000.0 and 89,000,000 respectively, at the end of fiscal year twenty twenty four. Now I'd like to turn the call back to John to discuss our fiscal year twenty twenty five outlook.

[John Kiernan, President and Chief Executive Officer at Alico]

Thank you, Brad. Now let me share our guidance for fiscal year twenty twenty five and some concluding thoughts on our strategic direction. Our strategic transformation to become a diversified land company has already exceeded our fiscal twenty twenty five year goals. At this time, we are forecasting that our cash balance at the end of this fiscal year will be approximately $25,000,000 and our net debt will be approximately $60,000,000 with only the required $2,500,000 balance outstanding under our revolving line of credit. We expect to generate approximately $20,000,000 in adjusted EBITDA for fiscal year twenty twenty five.

[John Kiernan, President and Chief Executive Officer at Alico]

These projections are supported by the previously announced estimate of $20,000,000 of land sales and cash generated by the twenty twenty four-twenty twenty five citrus harvest. We are currently projecting that land sales could potentially exceed $50,000,000 this year, which would increase our adjusted EBITDA and cash and decrease our net debt projections, but we recognize that each pending transaction has its own challenges, just as all previous sales OEKO has transacted over the past decade have experienced, and there is no certainty regarding timing until sales are closed. Looking ahead to the remainder of fiscal year 2025, we'll focus on completing the sale of our remaining identified lands, continuing entitlement work on our development properties, finalizing agreements with agricultural operators for our diversified farming operations, and further strengthening our balance sheet to support long term value creation. When considering the full scope of our transformation, we believe present value of our current land holdings could be worth approximately $650,000,000 to $750,000,000 with roughly 75% valued for agricultural use and assuming about 10% entitled for development within the next five years. I'm confident that our strategic transformation positions OEKO to deliver enhanced long term returns for our shareholders.

[John Kiernan, President and Chief Executive Officer at Alico]

By balancing the development of select high value properties with diversified agricultural operations, we're creating a business model that leverages our core strengths, while adapting to market opportunities. And with that, we'll now open the line to questions from industry analysts. Margo?

[Operator]

Thank you. We'll take our question from Gary Sweeney with ROTH Capital. Please go ahead.

[Brandon Rogers, Equity Research Associate at Roth Capital Partners, LLC]

Hello, this is Brandon Rogers on for Sweeney. Thanks for taking my question.

[John Kiernan, President and Chief Executive Officer at Alico]

Our pleasure. How are doing, Brandon?

[Brandon Rogers, Equity Research Associate at Roth Capital Partners, LLC]

Good, good. I just had a question on the 15.8 landfill in the quarter. Could you just provide any additional color there? You said it was two how many I don't know exactly how many acres you said, but

[Brad Heine, CFO at Alico]

The 1,000 acres you're talking about?

[John Kiernan, President and Chief Executive Officer at Alico]

Land sales for the quarter.

[Brad Heine, CFO at Alico]

Yeah, land sales.

[Brandon Rogers, Equity Research Associate at Roth Capital Partners, LLC]

The 15.8.

[Brandon Rogers, Equity Research Associate at Roth Capital Partners, LLC]

Yeah.

[Brad Heine, CFO at Alico]

Was 2,100 acres.

[Brandon Rogers, Equity Research Associate at Roth Capital Partners, LLC]

All right. And then what county was that located in?

[Brad Heine, CFO at Alico]

Off the top of my head, I Henry. Henry County.

[Brandon Rogers, Equity Research Associate at Roth Capital Partners, LLC]

Henry. All right. Thank you. And then so for the total $50,000,000 in land sales for the current year, are you in current discussions with any other land sales? And then what gives you confidence in potentially achieving the $50,000,000 aspiring target for the year?

[John Kiernan, President and Chief Executive Officer at Alico]

We've negotiated an agreement to sell some acres. It's still going through a process, so it's going to go through diligence right now, and that's underway. So the timing is a bit uncertain as the diligent process proceeds. And the second part of your question is, we're talking to several other parties about potential land sales, but nothing that's solid enough for us to report at this time.

[Brandon Rogers, Equity Research Associate at Roth Capital Partners, LLC]

Okay, thank you. And then turning to Corkscrew, you said construction of the village could begin in 2028 or 'twenty nine if all approvals are granted. What are some potential milestones we can watch for between now and the potential entitlement approvals?

[John Kiernan, President and Chief Executive Officer at Alico]

I think the entitlement approvals themselves are kind of what the milestones would be. There'll be

[John Kiernan, President and Chief Executive Officer at Alico]

a lot of

[John Kiernan, President and Chief Executive Officer at Alico]

individual meetings and revisions and resubmittals as we go. But I think as you see the approvals at the local, state, and federal levels come through, you'll know where the milestones stand.

[Brandon Rogers, Equity Research Associate at Roth Capital Partners, LLC]

Awesome. Thank you for taking my questions.

[John Kiernan, President and Chief Executive Officer at Alico]

Thanks, Brandon.

[Operator]

Thank you.

[Operator]

At this time, we have no further questions. I'd like to turn the call back over to our speakers for final remarks.

[John Kiernan, President and Chief Executive Officer at Alico]

Thank you, Margo, and thank you to everyone for joining us today. We appreciate your continued support as we navigate this exciting strategic transformation, and we look forward to updating you on our further progress in the coming quarters. We'll see you in August.

[Operator]

Thank you. And this does conclude today's program. We thank you for your participation. You may disconnect at any time.

Participants

Executives

• John Kiernan, President and Chief Executive Officer
• Brad Heine, CFO

Analysts

• John Mills, Managing Partner at ICR
• Brandon Rogers, Equity Research Associate at Roth Capital Partners, LLC