Alico, Inc. Q3 FY2026 earnings call

• Balance Sheet and Liquidity Improvements

  • Ended Q3 2026 with $55.6 million in cash and cash equivalents, a $17.5 million increase from fiscal year-end, marking the company's strongest balance sheet position since the 2025 strategic transformation began
  • Net debt stood at $29.8 million at quarter-end, a $17.6 million reduction from fiscal year-end, with total debt of $85.4 million (essentially unchanged from year-end) and $92.5 million in available undrawn borrowing capacity under the company's credit facility
  • Working capital was $50.6 million, with a current ratio of 7.96 to 1, providing significant operational and strategic flexibility

• Strategic Land Transactions

  • Entered into an agricultural lease agreement for 3,280 acres in Hendry County, including an option for the counterparty to purchase the property for $29.5 million ($9,000 per acre) through June 2029, with annual price escalations after that date; the transaction provides recurring contracted lease income and validates the company's land valuation, supporting management's view that its 47,300-acre Florida portfolio carries substantially more value than its current market capitalization
  • Acquired the remaining 49% interest in the Citri joint venture for $2 million in cash, assuming full responsibility for the JV's $3.3 million outstanding debt; the transaction gives Alico 100% ownership of 1,200 acres in Joshua Grove, simplifies corporate structure, and allows full control over future property reuse

• Real Estate Development Progress

  • Corkscrew Grove East Village has advanced to state and federal permitting after receiving local entitlement approval in April 2026; the permitting process is progressing as planned, with potential construction commencement targeted for 2028 or 2029, pending required approvals from the South Florida Water Management District, U.S. Army Corps of Engineers, and U.S. Fish and Wildlife Service
  • The project includes a commitment to preserve over 6,000 acres of land, aligned with the company's focus on responsible land stewardship

• Operational and Capital Allocation Updates

  • 98% of the company's farmable acreage remains leased, and all diversified land management programs (agricultural leases, sod, rock and sand royalty arrangements) continue to perform well
  • Management is executing ongoing overhead reduction initiatives, including a new office lease expected to deliver additional cost savings starting in the second quarter of fiscal 2027
  • Completed the full $10 million authorized share repurchase program through Q3 2026, repurchasing a total of 245,399 shares; the company continues to return capital to shareholders via share repurchases and regular common dividends while strengthening its cash position

• Core Strategic Priorities

  • Maximize revenue from diversified land leasing programs while maintaining strict cost controls
  • Advance real estate development projects through the entitlement process, with priority on the Corkscrew Grove villages
  • Balance entitlement-related investments with shareholder returns while preserving financial flexibility
  • Pursue operational excellence via the company's experienced team and local market relationships

Following the substantial completion of Alico's citrus wind down, the firm now reports as a single consolidated reportable segment, though it still discloses revenue by activity for historical comparability. For the third quarter ended June 30, 2026, total revenue was $9.0 million, a 7.7% increase from $8.4 million in the prior-year third quarter. Net income attributable to common stockholders was $2.1 million ($0.29 per diluted share), compared to a net loss of $18.3 million ($2.39 per diluted share) in Q3 2025. Reported EBITDA for Q3 2026 was $4.6 million, and adjusted EBITDA was also $4.6 million, down from $19.2 million and $19.3 million respectively in the prior-year period, primarily due to lower crop insurance proceeds and smaller gains on property sales, not weaker core operational performance. For the nine months ended June 30, 2026, total revenue was $16.3 million (down from $43.3 million in the prior-year nine months, driven by the citrus wind down), EBITDA was $23.7 million (compared to a $2.2 million EBITDA loss year-over-year), and adjusted EBITDA was $24.2 million (down from $25.3 million year-over-year).

• Management raised fiscal year 2026 adjusted EBITDA guidance to approximately $15 million, up from the prior guidance of approximately $14 million
• The company now expects to end fiscal 2026 with approximately $48 million in cash and net debt of approximately $37 million, with only the $2.5 million minimum required balance remaining on the revolving credit facility
• Management confirmed that the company's current projected liquidity is sufficient to support all operations and planned entitlement investments for at least three additional fiscal years through 2029, with no requirement for additional asset sales to fund activities

• Forward-looking statements related to development timelines, permitting outcomes, liquidity, and future performance are subject to inherent risks and uncertainties that could cause actual results to differ materially from projections, as detailed in the company's periodic SEC filings (Form 10-Q, Form 10-K, Form 8-K)
• Permitting for the Corkscrew Grove East Village project is contingent on approval from multiple state and federal regulatory agencies, creating uncertainty around the timing and potential outcome of the development
• The value of the company's land portfolio is dependent on current and future real estate market conditions, which may fluctuate

Q: The company reported $24.2 million in adjusted EBITDA through the first nine months of fiscal 2026, but set full-year adjusted EBITDA guidance at only $15 million. Analysts asked management to explain this discrepancy and clarify whether the expected fourth quarter decline comes from non-recurring or recurring expenses. / A: Management explained that most of the full-year revenue, including proceeds from the final citrus harvest and beneficial third quarter lease income, has already been recognized through nine months. The fourth quarter will have a much lower revenue run rate, while recurring annual expenses (including property taxes and G&A) continue at a steady pace throughout the year, resulting in a net EBITDA decline for the final quarter. Management noted most of these fourth quarter expenses are recurring, with no material one-time items to call out.