ALICO, INC. (ALCO)·Q3 2025 Earnings Summary

Executive Summary

• ALCO reported Q3 2025 revenue of $8.39M and diluted EPS of -$2.39; revenue declined 38% YoY on hurricane-driven volume pressure and the citrus wind-down, while non-cash accelerated depreciation widened GAAP losses .
• Versus S&P Global consensus, revenue slightly missed ($8.90M* est. vs $8.39M actual), EPS missed (-$1.09* est. vs -$2.39 actual), but EBITDA materially beat (-$5.8M* est. vs $19.2M actual) as non-cash D&A and $16M crop insurance proceeds boosted EBITDA .
• Transformation milestones: final major citrus harvest completed; Florida enacted the Corkscrew Grove Stewardship District enabling infrastructure financing; $9.3M in Q3 land/equipment sales; year-to-date land sales $23.5M, exceeding the $20M FY25 target .
• Guidance reaffirmed: FY25 Adjusted EBITDA ≈$20M; FY25 year-end cash ≈$25M; net debt ≈$60M; liquidity runway through FY27; CEO sees potential for an additional ~$25M of land sales before year-end (timing may slip to FY26) .

What Went Well and What Went Wrong

• What Went Well

  • Strategic pivot execution: “We successfully completed our final major citrus harvest… marking a significant milestone in our strategic transformation to become a diversified land company” (CEO) .
  • Regulatory catalyst: Florida created the Corkscrew Grove Stewardship District, unanimously supported across legislative bodies and county commission, enabling infrastructure financing for Corkscrew Grove Villages .
  • Liquidity strengthened: $16M crop insurance and $9.3M land/equipment proceeds lifted cash to $42.1M; net debt dropped to $43.2M from $89.0M at FYE24 .

• What Went Wrong

  • Revenue contraction: Q3 revenue fell 38% YoY to $8.39M on lower harvest volumes from Hurricane Milton and the citrus wind-down .
  • GAAP losses widened: accelerated depreciation (~$40.7M) tied to tree assets and transformation drove a -$18.3M net loss and -$2.39 diluted EPS in Q3 .
  • Citrus KPIs deteriorated: Valencia boxes -50% YoY; total pound solids -50% YoY in Q3; higher pricing only partially offset volume declines .

Financial Results

Segment Operating Revenue

Key Citrus KPIs

Versus S&P Global Consensus (Q3 2025)

Values marked with * retrieved from S&P Global.

Context and drivers:

• Revenue miss reflects lower harvest volumes post-Hurricane Milton and citrus wind-down; EBITDA beat driven by non-cash D&A add-backs and $16M crop insurance recovery, despite lower revenue .
• Adjusted EBITDA methodology changed in FY25 to add back impairments/restructuring and no longer adjust for inventory NRV or gains on sales; prior periods recast for comparability .

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “We successfully completed our final major citrus harvest during the third quarter, marking a significant milestone in our strategic transformation to become a diversified land company… We generated over $9 million from combined land and equipment sales… received $16 million in crop insurance proceeds” — John Kiernan, CEO .
• “The [Corkscrew Grove] Stewardship District… represents a crucial milestone… [and] will assist Alico in effectively financing infrastructure…” — John Kiernan, CEO .
• “The increase in our net loss… was principally the result of approximately $40.7 million of accelerated depreciation… as a result of the… decision to wind down our Citrus Operations, as well as lower revenues due to the impact of Hurricane Milton… partially offset by crop insurance proceeds of $16.0 million and a $7.8 million tax benefit” — Management discussion .

Q&A Highlights

• Land sales pipeline and timing: Management is in diligence on a transaction that could close by FY-end or slip to FY26; they view pricing as fair but timing is uncertain .
• Corkscrew milestones and partnering: Entitlement remains on track; currently proceeding without a partner at this stage; optionality remains to sell entitled land, partner with builders, or self-develop post-entitlements; Stewardship District provides an avenue to finance infrastructure if needed .

Estimates Context

• Consensus sample size was thin (1 estimate for Q3 revenue/EPS), but relative to S&P Global numbers ALCO slightly missed revenue ($8.90M* est. vs $8.39M actual) and EPS (-$1.09* est. vs -$2.39), while sharply beating EBITDA (-$5.8M* est. vs $19.2M), reflecting non-cash D&A and $16M crop insurance recovery during the transformation .
• FY25 consensus implies EPS of -$18.65* and revenue ≈$43.9M*; company reiterated Adjusted EBITDA ≈$20M and cash ≈$25M at FY-end, with liquidity through FY27 .

Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

• Transformation is the core thesis: ALCO is executing a pivot from citrus to a diversified land company, with regulatory progress (Stewardship District) and entitlement timelines intact for Corkscrew Grove Villages .
• Liquidity improved markedly: cash $42.1M, revolver availability ~$92.5M, net debt $43.2M; FY-end targets maintained (cash ≈$25M; net debt ≈$60M) .
• Earnings optics will remain noisy: non-cash accelerated depreciation and hurricane impacts pressure GAAP margins, while EBITDA can diverge materially due to add-backs and insurance recoveries; monitor revised Adj. EBITDA framework .
• Near-term catalysts: additional land sales closings (potential ~$25M cited), entitlement milestones (agency feedback, public meetings, 2026 BOCC decision), and monetization steps at Bonnet Lake/Saddlebag Grove/Plant World .
• Risk balance: entitlement timing and outcomes are partly outside ALCO’s control; sales timing can shift across fiscal periods; citrus wind-down reduces volume variability but removes a legacy revenue stream .
• Dividend continuity maintained ($0.05 paid in Q3), signaling confidence in liquidity during the transition .

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Additional Data Exhibits

Seasonal/Operational Commentary:

• Q3 revenue seasonality historically tied to harvest; strategic wind-down expected to reduce legacy seasonal patterns over time .

Balance Sheet Snapshot:

• Working capital $50.0M; current ratio 9.37x; available borrowings ≈$92.5M; Minimum Liquidity Requirement $7.4M (6/30/25) .

Real Estate/Conservation:

• Corkscrew Grove Villages concept: two 1,500-acre villages, ~9,000 homes and ~560k sq ft commercial across villages; >6,000 acres permanent conservation; entitlement applications submitted; potential construction start 2028–2029 if approved .
• Long history of conservation transactions, including Devil’s Garden sale to Florida Forever; additional acreage slated for permanent conservation as part of Corkscrew plan .