Alico signals $20M adjusted EBITDA outlook and advances Corkscrew Grove district amid land sales gains

Earnings Call Insights: Alico, Inc. (ALCO) Q3 2025

MANAGEMENT VIEW

* John E. Kiernan, President and CEO, opened by highlighting "another quarter of significant progress in executing our strategic transformation to become a diversified land company." The company completed its final major citrus harvest, marking the end of its capital-intensive citrus operations and enabling a full pivot to land development and diversified usage.
* Kiernan emphasized, "Our land monetization and asset optimization efforts accelerated in the third quarter, generating $9.3 million from combined land and equipment sales." Year-to-date land sales totaled $23.5 million from approximately 2,794 acres, exceeding the original $20 million guidance for fiscal 2025.
* The company received $16 million in crop insurance proceeds, strengthening its liquidity, which Kiernan noted "has resulted in a robust $42.1 million cash position, and a strong liquidity profile to execute our strategic transformation strategy."
* Alico achieved a major milestone with the approval of House Bill 4041 to create the Corkscrew Grove stewardship district. Kiernan described this as "a crucial step forward in our Corkscrew Grove Villages development project."
* The company appointed a 5-member Board of Supervisors for the new district and received the first round of regulatory comments, keeping the entitlement process on track with a final decision still anticipated in 2026.
* Kiernan reported ongoing progress in agricultural leasing: "We successfully negotiated agreements to lease approximately 5,250 acres to third-party citrus growers for next season."
* Key development projects—Corkscrew Grove Villages, Bonnet Lake, Saddlebag Grove, and Plant World—remain valued at between $335 million and $380 million across 5,500 acres, with potential realization within 5 years.
* CFO Bradley Heine stated, "For the third fiscal quarter ended June 30, 2025, revenue decreased 38% to $8.4 million, compared to $13.6 million for the prior year period." He noted the impact of Hurricane Milton on harvest volumes, coupled with higher pricing due to favorable Tropicana contracts. Heine also said, "Land management and other operations revenue... increased 57%... primarily the result of an increase in rock and sand royalty income and sat sales."

OUTLOOK

* Kiernan reiterated guidance: "We continue to expect approximately $20 million in adjusted EBITDA for fiscal 2025."
* The company has already achieved $23.5 million in land sales year-to-date, above its original $20 million guidance, with the potential for another $25 million before year end.
* Kiernan projected a year-end cash position of "at least $25 million, and [sufficient] liquidity to fund operations through fiscal year 2027."
* The company maintains its timeline for regulatory approvals, stating, "Everything is progressing as expected, and we remain on track with our previously announced time lines."

FINANCIAL RESULTS

* Revenue for the quarter was $8.4 million, down from $13.6 million in the prior year period.
* Land and equipment sales generated $9.3 million in the quarter, with year-to-date land sales of $23.5 million from 2,794 acres, already surpassing annual guidance.
* Operating expenses rose to $36.4 million for the quarter, attributed to the wind-down of citrus operations and impairment of young trees.
* The company reported a net loss attributable to common stockholders of $18.3 million for the quarter, compared to $2 million for the same period last year, driven by accelerated depreciation and lower revenue post-hurricane.
* Loss per diluted share was $2.39 for the quarter, compared to $0.27 last year.
* EBITDA increased to $19.2 million and adjusted EBITDA to $19.3 million for the quarter, both up from $1.3 million in the prior year period.
* Cash and cash equivalents stood at $42.1 million as of June 30, 2025, with net cash provided by operating activities at $22.8 million for the nine months ended June 30, 2025.
* Total debt was $85.2 million with net debt at $43.2 million, down from $89 million at fiscal year-end 2024.

Q&A

* Brandon B. Rogers, ROTH Capital Partners: Asked about the likelihood of achieving $45-plus million in land sales for the year. Kiernan responded, "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."
* Rogers inquired about Corkscrew Grove entitlement milestones and possible delays. Kiernan answered, "In all of these entitlement projects, there are multiple external variables that the company cannot control.... So the current timetable... we believe with good confidence... yes, we would be on track for the potential securing of the permits... But some of those are just out of our control."
* Rogers asked about partnering with other groups on development. Kiernan stated, "At this point, we don't have a need for a partner at this early entitlement stage... once the entitlement process is complete... we haven't made a final decision about any of that."

SENTIMENT ANALYSIS

* Analysts focused on transaction timing and regulatory progress, with a neutral and fact-finding tone, seeking clarity on land sales and entitlement milestones.
* Management maintained a confident tone in prepared remarks, emphasizing liquidity, strategic milestones, and guidance, while acknowledging timing uncertainties in Q&A with phrases such as "the timing just is a little bit hazy right now" and "some of those are just simply out of our control."
* Compared to the previous quarter, analyst and management sentiment remained steady, with continued emphasis on transformation progress and uncertainty around transaction closure timing.

QUARTER-OVER-QUARTER COMPARISON

* The current quarter saw the completion of the final major citrus harvest and a full pivot to land monetization and development, while the previous quarter signaled the transition was underway.
* Land sales guidance was raised last quarter, and the company has now exceeded its original target with potential for further upside.
* Guidance remains at $20 million in adjusted EBITDA for the year, as in the prior quarter.
* Management tone continues to highlight confidence in transformation and liquidity, while acknowledging the unpredictability of transaction and entitlement timelines.
* Analyst focus remains on execution risks and timing of land sales and entitlement approvals.

RISKS AND CONCERNS

* Management cited the unpredictability of land sale closures and entitlement approvals, describing timing as "a little bit hazy right now" and acknowledging that "there are multiple external variables that the company cannot control."
* The company continues to face risks from regulatory review processes and external events, such as hurricanes, as seen with Hurricane Milton impacting harvest volumes.
* Analysts raised concerns about land sale transaction timing and milestones for Corkscrew Grove development.

FINAL TAKEAWAY

Alico has completed its transformation away from citrus production, surpassing its original land sales targets and maintaining confidence in its $20 million adjusted EBITDA outlook for fiscal 2025. The company cites a strengthened cash position and progress on key regulatory milestones—most notably, the Corkscrew Grove stewardship district—which underpin its strategy to unlock value through land monetization and real estate development. While management remains optimistic about the timing of future land sales and entitlement approvals, they note that external factors and regulatory processes could affect the pace of progress.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/alco/earnings/transcripts]

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