Alico, Inc. Q3 FY2025 earnings call

• Successfully completed the final major citrus harvest, concluding capital-intensive citrus production and allowing focus on land development and diversified usage strategy.
• Land monetization and asset optimization efforts accelerated, with $9.3 million from combined land and equipment sales in Q3, year-to-date land sales at $23.5 million exceeding guidance.
• Received $16 million in crop insurance proceeds, resulting in a $42.1 million cash position and strong liquidity.
• Achieved a major regulatory milestone with Florida legislature approval of House Bill 4041 to create the Corkscrew Grove stewardship district, appointed a 5-member Board of Supervisors, and received first round of comments on development applications.
• Diversified agricultural operations progressed, with agreements to lease approximately 5,250 acres to third-party citrus growers and discussions with vegetable and fruit growers.
• Near-term real estate development projects like Corkscrew Grove Villages continue advancing, with four properties totaling ~5,500 acres having an estimated present value between $335 million and $380 million.

In the third quarter, Alico completed the final major citrus harvest, marking the end of capital-intensive citrus production. Land monetization and asset optimization efforts accelerated, generating $9.3 million from combined land and equipment sales in the third quarter. The land component included approximately 694 acres, with year-to-date land sales reaching $23.5 million from approximately 2,794 acres sold, exceeding the original $20 million guidance for fiscal 2025. They also received $16 million in crop insurance proceeds. For revenue breakdown: Revenue for the third quarter ended June 30, 2025, decreased 38% to $8.4 million compared to $13.6 million in the prior year period. Land management and other operations revenue increased 57% and 68% for the 3 and 9 months ended June 30, 2025, respectively, primarily from rock and sand royalty income and sat sales, partially offset by lower farming, grazing, and hunting lease revenues due to the sale of the Alico Ranch. Operating expenses increased due to winding down citrus operations and impairment of young trees. Other income expense for the 3 months ended June 30, 2025, increased due to land and equipment sales, while net other income expense for the 9 months ended June 30, 2025, decreased due to fewer land sales compared to the prior year when the Alico Ranch was sold to the state of Florida.

• Expect approximately $20 million in adjusted EBITDA for fiscal 2025.
• Land sales have reached $23.5 million year-to-date with potential for an additional $25 million before year-end.
• Positioned to end fiscal year with at least $25 million in cash and sufficient liquidity to fund operations through fiscal year 2027.
• Diversified agricultural partnerships are developing alongside the development pipeline, generating revenue while maintaining productive use of land during transition.

Forward-looking statements are subject to risks, uncertainties, and other factors that may cause actual results to differ materially from those expressed or implied. Important factors include risks detailed in the company's quarterly reports on Form 10-Q, annual reports on Form 10-K, current reports on Form 10-K, and any amendments thereto filed with the SEC, as mentioned in the earnings release.

Q: You announced the $23.5 million in land sales so far with the potential for $25 million in additional land sales. Are you currently in discussions for those other land sales? And then what is the likelihood you can achieve the $45-plus million in land sales for the year?

A: We're basically in a transaction. It has a life and a timetable of its own. There's a diligence and inspection period that's continuing to go on. Right now, it's possible that it could close at the end of fiscal 2025. It's also possible that could roll into fiscal 2026. But we think it's a good transaction. We think it's at a fair value. And the timing just is a little bit hazy right now.

Q: Turning to Corkscrew. Construction on the first village to be in 2028, 2029, if all approvals are granted. What are some potential milestones we can watch for between now and the potential entitlement approvals? And then you have -- what's the likelihood of the final decision by the Collier Board of County Commissioners by 2026? And then is there anything that could delay that?

A: In all of these entitlement projects, there are multiple external variables that the company cannot control. There's all sorts of government reviews. There's additional questioning. We've got some public meetings that will take place. And all of them have to be scheduled, timed, held, sometimes there's follow-ups. So the current timetable that we've articulated in our earnings release, we believe with good confidence, based on what we've achieved so far, as well as the visibility into going forward that, yes, we would be on track for the potential securing of the permits, particularly at our Corkscrew property on the time frame that you had described. But some of those are just out of our control. We've done a very good job of basically turning around quickly of filing efficiently and accurately. We've tried to be very, very transparent with all constituents as we've gone through these entitlement processes, but some of that is just simply out of our control.

Q: In addition to Corkscrew Grove Stewardship, have you decided that Alico will partner with other groups on development? And then if so, can you give us any additional color on the strategy around bringing the project to permitting, building into market?

A: So the permitting process is the entitlement process that we're going through right now. And right now, we're handling that as a solo effort with many, many engineers, consultants, contractors, attorneys. Traffic experts and so on that are really experienced in Collier County, working on projects of this size and scale. We've spoken previously, publicly, about our strategy to maintain some optionality. At this point, we don't have a need for a partner at this early entitlement stage. We've got substantial resources to kind of navigate that process without requiring additional capital. The Stewardship District that was recently approved also gives us an avenue to raise capital should we need to build infrastructure prior to basically transferring the property over to builders, or partnering with builders, once the entitlement process is complete. So we've spoken previously that we've had conversations with state and national homebuilders, and they certainly are very much aware of the Corkscrew property itself, as well as our expertise, and kind of what the entitlement process is expected to deliver and what we're looking to do. Because we've got a website up. We've got a lot of the information on that website as far as the Corkscrew Grove Villages project. But right now, there is nothing to basically share with you or the rest of the investor community on any of those other discussions because they're way, way premature and from the optionality perspective, we haven't made a decision whether we want to go down a path, or whether we want to entitle the process and sell the land? Whether we want to entitle the process and basically partner with builders? Or whether we want to entitle the property and basically build ourselves? At this point, we haven't made a final decision about any of that.