Alico, Inc. Q2 FY2026 earnings call

Strategic and Operational Milestones

• Closed a $26.9 million land sale of 2,950 acres in January 2026, generating a $19.8 million gain and bringing year-to-date land sales to $34.6 million, demonstrating strong demand for Florida properties and validating the company's land monetization strategy.
• Received unanimous local approval from the Collier County Board of Commissioners for the Corkscrew Grove East Village development project, a major regulatory milestone. The approved project covers 1,446 acres with authorization for 4,502 total dwelling units (including 362 affordable housing units for essential workers) and 238,000 square feet of neighborhood retail and office space. As part of the project, Alico will place nearly 5,000 acres into permanent public conservation at no cost to taxpayers, aligned with county sustainable development goals. The company remains on schedule to seek state approval by early 2027 and federal approval by the end of 2028, targeting construction start in 2028 or 2029.
• Deployed $10 million through the 10b5-1 share repurchase program, acquiring 245,399 shares through April 2026, reflecting management's confidence in the company's embedded portfolio value and balanced capital allocation strategy.
• Added Eric Spiron, a real estate and finance industry veteran with experience at First Foundation and J.P. Morgan, to the board of directors to support advancing the company's development pipeline.

Portfolio and Balance Sheet Strength

• The company holds 46,000 acres of remaining Florida land, with an overall management-estimated net present value of $650 million to $750 million. The active development pipeline covers 5,500 acres (just 10% of total holdings) with an estimated present value of $335 million to $380 million expected to be realized over the next five years.
• Ended the quarter with $52.9 million in cash and $92.5 million in available credit line borrowing capacity, for total available liquidity that extends the company's financial runway through fiscal 2028, eliminating pressure to advance projects due to liquidity constraints. Net debt at quarter end was $32.6 million, with a current ratio of 9.63:1 demonstrating a very strong balance sheet.
• 97% of farmable acres generate revenue via diversified agricultural partnerships with citrus growers, cattle ranchers, mining operations, sugar cane producers and sod farmers, reducing operational complexity while maintaining steady land revenue. Exiting the citrus business removed exposure to current headwinds of rising fuel and fertilizer costs, dramatically improving operating cash flow.

2026 Fiscal Priorities

• Optimize agricultural operations by maximizing revenue from diversified leasing while maintaining strict cost controls.
• Advance development projects through the entitlement and permitting process, with a core focus on securing remaining approvals for Corkscrew Grove Villages.
• Balance required development investments with shareholder returns (via share repurchases and potential dividends) while preserving financial flexibility.
• Pursue operational excellence by leveraging the company's experienced local management team and long-standing regional relationships.

Alico operates two primary business segments for the second quarter of fiscal 2026 ended March 31, 2026:

1. Citrus Segment: Alico completed the wind-down of citrus operations that began in 2025, with the last major citrus harvest finished in April 2025. Revenue decreased significantly year-over-year as expected, with corresponding declines in cost of sales. Only residual activity remains during the wind-down period, marking the successful exit from capital-intensive citrus production. In the prior year quarter, total company revenue was $18 million, driven largely by legacy citrus operations.
2. Land Management and Other Operations: For the quarter, segment revenue increased 113% year-over-year, driven by growth in farm lease revenue and sod revenue as Alico shifts focus to diversified land usage. For the first six months of fiscal 2026, segment revenue increased 97% year-over-year, with growth coming from farm leases, rock and sand royalties, and sod revenue. This segment is the core ongoing revenue driver for the company: 97% of Alico's 32,500 farmable acres (representing 89% of the company's total 46,000 acres) are now utilized by these diversified programs, generating consistent cash flow for the business.

• Management maintained full-year fiscal 2026 adjusted EBITDA guidance at approximately $14 million.
• Updated full-year end cash guidance to approximately $40 million, reflecting the completed $10 million share repurchase program executed through April 2026.
• Updated full-year end net debt guidance to approximately $45 million, also adjusted to account for the share repurchase program.
• The company expects to end the fiscal year with only the required minimum $2.5 million balance drawn on its revolving credit line.

Forward-looking statements, including project permitting timelines, development value projections, and expected cash generation, are subject to material risks that could cause actual results to differ materially from stated expectations. Key risks outlined include: uncertainty around the timing and outcome of state and federal environmental and development permitting for the Corkscrew Grove project; changes in Florida real estate and land market conditions that could impact land sale values, development profitability, and demand for property; potential changes in agricultural input costs that could impact partner leasing demand and revenue; and regulatory and policy changes that could impact land use and development timelines. Additional risks are detailed in the company's periodic SEC filings, including 10-Q, 10-K, and 8-K reports.

Q: Now that Corkscrew Grove East Village has local approval, has management decided on a development approach, such as solo development, partnering with a homebuilder, or selling the entitled land? / A: Management retains optionality across all three paths: selling the fully entitled land directly to national or local homebuilders, partnering with a developer to share costs and returns over the project lifecycle, or developing the project in-house leveraging the existing team. No final decision has been made, and management will commit to a path within the next 1-2 years, with the final choice dependent on permitting timeline progress and prevailing real estate market conditions. Management noted the company is not expert in construction, but the prime location and thoughtful planning make the project highly marketable, with no decision to announce at this time.

Q: The recent January land sale priced at roughly $9,100 per acre, well above prior average valuation assumptions. How does this impact the valuation of the remaining 46,000 acres, and how much additional land could be sold? / A: Management reaffirmed the current overall portfolio NPV estimate of $650 million to $750 million, which was originally based on a $4,000 to $5,000 per acre average agricultural land valuation. The recent higher sales price supports that the portfolio may have upside to this range, though management notes not all land is equal and the entire portfolio cannot be valued at the recent $9,100 per acre transaction price. A more detailed breakdown of land value buckets will be presented at an upcoming investor conference the following week, so management deferred a more specific answer until that time.

Q: Outside of state and federal permitting and the development strategy decision for Corkscrew Grove, are there other major milestones investors should watch for over the next two years? / A: Management confirmed the next key milestones are exactly the three already outlined: securing state permit approval, securing federal permit approval, and making a final decision on the development/monetization strategy for Corkscrew Grove East Village. There are no other major material milestones for the core project that investors need to track beyond these steps.