The following discussion and analysis should be read in conjunction with the accompanying Condensed Consolidated Financial Statements and related Notes thereto and other information included elsewhere in this Quarterly Report, our 2025 Annual Report on Form 10-K, and in our other filings with the SEC. Our actual results of operations may differ materially from those discussed in forward-looking statements as a result of various factors, including, but not limited to, those included our 2025 Annual Report on Form 10-K and other portions of this Quarterly Report. Additionally, our historical results are not necessarily indicative of the results that may be expected for any period in the future. In the following discussion and analysis, dollars are in thousands, except per share and per acre amounts.
Business Overview
Business Description
Alico, Inc., together with its subsidiaries (collectively, “Alico”, the “Company”, “we”, “us” or “our”) currently generates operating revenues primarily from the sale of our citrus products, and through leases of citrus groves, as well as farming, grazing and hunting leases, activities related to rock and sand mining royalties, sod sales, leases of oil extraction rights to third parties, and other miscellaneous operations generating income. Prior to the third quarter of fiscal year 2026, we operated as two business segments: Alico Citrus and Land Management and Other Operations. Alico Citrus, which held the Company’s citrus production operations, has substantially wound down operations after the 2024/2025 harvest due to environmental and financial challenges. Beginning with the third quarter of fiscal year 2026 and after the substantial completion of the Company’s Strategic Transformation and final citrus harvest, we now operate as one reportable segment and all of our operating revenues are generated in the United States. Alico remains committed to Florida’s agriculture industry, and will focus on its long-term diversified land usage and real estate development strategy.
For the three months ended June 30, 2026 and 2025, we generated operating revenue of $9,040 and $8,390, respectively, income (loss) from operations of $1,886 and $(25,370), respectively, and net income (loss) attributable to common stockholders of $2,125 and $(18,289), respectively. Net cash provided by operating activities was $2,332 and $22,841 for the nine months ended June 30, 2026 and 2025, respectively.
Business Segments
Operating segments are defined in the criteria established under FASB ASC Topic 280 as components of public entities that engage in business activities from which they may earn revenues and incur expenses for which separate financial information is available and which is evaluated regularly by our CODM in deciding how to assess performance and allocate resources. Our CODM assesses performance and allocates resources based on one reportable segment (see Note 10. Segment Information to the accompanying Condensed Consolidated Financial Statements).
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Recent Developments
Lease and Grove Purchase Option
On June 18, 2026, we entered into an Agricultural Lease Agreement for approximately 3,280 acres of real property located in Hendry County, Florida. The initial term of the lease commences on July 1, 2026 and expires on June 30, 2027, subject to the lessee’s right to extend the lease for an additional ten-year term in accordance with the terms of the agreement. The agreement also grants the lessee an option to purchase the leased premises during the option period, subject to certain terms and conditions. If the option is exercised on or before June 30, 2029, the purchase price for the property is $29,520, based on approximately 3,280 acres at $9,000 per acre, subject to an annual increase and certain per acre adjustments. If the lease is extended for the renewal term, the option period will be extended through June 30, 2031.
Citree Purchase
On June 23, 2026 (the “Closing Date”), we acquired the 49% of Citree that we did not own for $2,007 plus additional consideration in the event that, on or before the twenty-four (24) month anniversary of the Closing Date, we sell or enter into an agreement to sell, in exchange for cash to a third party any or all of the Company’s currently owned acreage (whether through a merger, equity sale, restructuring, sale of assets, or otherwise) and the purchase price per acre is greater than $12,000 per acre, in which case we would pay a pro rata portion of the amount of 50% of the difference between $12,000 and such purchase price per acre.
Purchases of Common Stock
During the three months ended June 30, 2026, the Company repurchased 38,059 shares of stock, at a weighted average price per share of $42.87, for $1,631, bringing our Fiscal Year 2026 repurchases to 245,399 shares at a weighted average price of $40.76, for $10,003.
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Condensed Consolidated Results of Operations
The following discussion provides an analysis of our results of operations for the three and nine months ended June 30, 2026, as compared to 2025:
Three Months Ended June 30, Change Nine Months Ended June 30, Change
($ in thousands) 2026 2025 $ % 2026 2025 $ %
Revenues
Alico Citrus $ 1,123 $ 7,805 $ (6,682) (85.6) % $ 5,797 $ 41,384 $ (35,587) (86.0) %
Land Management and Other Operations 7,917 585 7,332 NM 10,470 1,880 8,590 456.9 %
Total operating revenues 9,040 8,390 650 7.7 % 16,267 43,264 (26,997) (62.4) %
Expenses
Operating expenses 4,994 36,446 (31,452) (86.3) % 22,363 229,255 (206,892) (90.2) %
General and administrative expenses 2,258 2,867 (609) (21.2) % 8,492 8,841 (349) (3.9) %
Gain on sale of property and equipment 98 5,553 (5,455) (98.2) % 24,767 21,400 3,367 15.7 %
Income (loss) from operations $ 1,886 $ (25,370) $ 27,256 (107.4) % $ 10,179 $ (173,432) $ 183,611 (105.9) %
Other expense, net:
Interest income 515 153 362 236.6 % 1,454 259 1,195 461.4 %
Interest expense (951) (907) (44) 4.9 % (2,875) (2,964) 89 (3.0) %
Other income, net 24 — 24 NM 20 255 (235) (92.2) %
Total other expense, net (412) (754) 342 (45.4) % (1,401) (2,450) 1,049 (42.8) %
Income (loss) before income taxes 1,474 (26,124) 27,598 (105.6) % 8,778 (175,882) 184,660 (105.0) %
Income tax benefit (93) (7,800) 7,707 (98.8) % (476) (36,874) 36,398 (98.7) %
Net income (loss) 1,567 (18,324) 19,891 (108.6) % 9,254 (139,008) 148,262 (106.7) %
Net loss attributable to noncontrolling interests 558 35 523 NM 771 167 604 361.7 %
Net income (loss) attributable to Alico, Inc. common stockholders $ 2,125 $ (18,289) $ 20,414 (111.6) % $ 10,025 $ (138,841) $ 148,866 (107.2) %
NM = Not Meaningful
Operating Revenue
The 7.7% increase in revenue for the three months ended June 30, 2026, compared to the three months ended June 30, 2025 was driven by approximately $6.6 million of contingent lease payments received from a lessee for crop insurance payments as a result of weather events, partially offset by lower Citrus revenue as we completed the wind down of our Citrus operations.
The 62.4% decrease in revenue for the nine months ended June 30, 2026, as compared to the nine months ended June 30, 2025 was driven by our Strategic Transformation and decision to wind down our Citrus operations to focus on a long-term diversified land usage and real estate development strategy, partially offset by an increase in lease revenue driven by contingent lease payments.
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Operating Expenses
The 86.3% decrease in operating expenses for the three months ended June 30, 2026, as compared to the three months ended June 30, 2025, is principally due to a $42,251 decrease in depreciation expense due to the acceleration of depreciation at the majority of our groves as part of the Strategic Transformation and lower costs of sales and harvest and haul costs related to our Valencia harvest, as we completed the wind down of our Citrus operations during the three months ended June 30, 2026, partially offset by $15,970 of crop insurance proceeds received in connection with Hurricane Milton, during the three months ended June 30, 2025.
The 90.2% decrease in operating expenses for the nine months ended June 30, 2026, as compared to the nine months ended June 30, 2025, is principally due to a $157,398 decrease in depreciation expense due to the acceleration of depreciation at the majority of our groves as part of the Strategic Transformation and lower costs of sales and harvest and haul costs, as we completed the wind down of our Citrus operations after Fiscal Year 2025, partially offset by $20,010 of crop insurance proceeds received in connection with Hurricane Milton, during the nine months ended June 30, 2025.
General and Administrative Expense
General and administrative expense decreased 21.2% for the three months ended June 30, 2026, compared to the three months ended June 30, 2025 due to lower employee expenses and insurance premiums.
General and administrative expense decreased 3.9% for the nine months ended June 30, 2026, compared to the nine months ended June 30, 2025 due to lower depreciation expense, partially offset by an increase in contract labor costs and a provision for credit losses on certain citrus receivables.
Gain on Sale of Property and Equipment
Gain on sale of property and equipment for the three months ended June 30, 2026 decreased $5,455 compared to the three months ended June 30, 2025, as there were no land sales during the three months ended June 30, 2026, as compared to the sale of approximately 694 acres of land and the sale of equipment and vehicles resulting in a gain of approximately $1,275 during the quarter ended June 30, 2025.
Gain on sale of property and equipment for the nine months ended June 30, 2026 increased $3,367, compared to the nine months ended June 30, 2025, principally as a result of the sale of approximately 3,546 acres of land for $34,611 ($9,761 per acre) in gross proceeds, as compared to the sale of approximately 2,790 acres of land for $24,119 ($8,645 per acre) in gross proceeds during the nine months ended June 30, 2025.
Other Expense, net
Other expense, net for the three months ended June 30, 2026 decreased $342 compared to the three months ended June 30, 2025, principally due to an increase in interest income related to an increase in cash and cash equivalents.
Other expense, net for the nine months ended June 30, 2026 decreased $1,049, compared to the nine months ended June 30, 2025, principally due to an increase in interest income related to an increase in cash and cash equivalents, partially offset by a decrease in other income due to a life insurance payout during the nine months ended June 30, 2025.
Income Taxes
The income tax benefit of $93 for the three months ended June 30, 2026, as compared to the three months ended June 30, 2025, of $7,800 was principally due to the effects of permanent tax adjustments as well as changes in the valuation allowance as a result of movement in temporary tax items. Based upon both positive and negative evidence, management determined that it was not "more likely than not" that a portion of deferred tax assets will be realized. This conclusion is based upon an analysis of the Company's cumulative three-year loss position as of June 30, 2026.
The income tax benefit of $476 for the nine months ended June 30, 2026, as compared to the nine months ended June 30, 2025, of $36,874 was principally due to the pre-tax gain, as opposed to a pre-tax loss in the prior period, and a change in the valuation allowance. Based upon both positive and negative evidence, management determined that it was not "more likely than not" that a portion of deferred tax assets will be realized. This conclusion is based upon an analysis of the Company's deferred tax assets and liabilities due to the cumulative three-year loss position at June 30, 2026.
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Seasonality
We have historically been primarily engaged in the production of fruit for sale to citrus markets, which is of a seasonal nature, and subject to the influence of natural phenomena and wide price fluctuations. The first and second quarters of Alico’s year produce most of our annual revenue. Working capital requirements are typically greater in the third and fourth quarters of the year, coinciding with harvesting cycles. Because of the seasonality of the business, results for any quarter are not necessarily indicative of the results that may be achieved for the full year ended September 30. As a result of the Strategic Transformation, we expect these seasonal patterns to diminish as we continue to wind down our Citrus operations.
Liquidity and Capital Resources
A comparative balance sheet summary is presented in the following table:
(in thousands) June 30, 2026 September 30, 2025 Change
Cash and cash equivalents $ 55,584 $ 38,128 $ 17,456
Total current assets $ 57,863 $ 54,919 $ 2,944
Total current liabilities $ 7,271 $ 5,743 $ 1,528
Working capital $ 50,592 $ 49,176 $ 1,416
Total assets $ 198,663 $ 201,527 $ (2,864)
Principal amount of term loans and lines of credit (a) $ 85,763 $ 85,950 $ (187)
Current ratio 7.96 to 1 9.56 to 1
Minimum Liquidity Requirement $ 5,818 $ 5,858 $ (40)
(a) - Excludes deferred financing costs
Sources and Uses of Liquidity and Capital
Our business has historically generated full fiscal year positive net cash flows from operating activities, although the net cash flow in the first quarter of each fiscal year has been negative because of seasonality and the associated need to expend cash in advance of generating revenues from the harvesting season. In January 2025, we announced a Strategic Transformation in our business focus, to wind down our Alico Citrus division, which holds our citrus production operations, to focus on a long-term diversified land usage and real estate development strategy. In May 2025, we entered into a Mutual Contract Termination Agreement with Tropicana, terminating our agreement with them in its entirety following the fulfillment of all obligations under that agreement concerning the 2024/2025 Crop Year and all outstanding amounts had been settled by June 30, 2025. Sources of cash primarily include cash flows from operations, strategic sales of land and other assets, amounts available under our RLOC, and access to capital markets. Access to additional borrowings under our RLOC is subject to the satisfaction of customary borrowing conditions. As a public company, we may have access to other sources of capital. However, access to, and availability of, financing on acceptable terms in the future will be affected by many factors, including (i) financial condition, prospects, and credit rating; (ii) liquidity of the overall capital markets; and (iii) the state of the economy. There can be no assurance that we will continue to have access to the capital markets on acceptable terms, or at all.
The principal uses of cash that affect our liquidity position have historically included the following: operating expenses including employee costs, the cost of maintaining the citrus groves, harvesting and hauling of citrus products, capital expenditures, property taxes, stock repurchases, dividends, debt service costs including interest and principal payments on term loans and other credit facilities and acquisitions. Our expected principal uses of cash that affect our liquidity position, in light of the Strategic Transformation and the fiscal year 2025 workforce reduction, are expected to include lower employee costs, lower costs of maintaining citrus groves and lower capital expenditures. In addition, on March 25, 2025, our Board approved a stock repurchase program authorizing us to repurchase up to $50.0 million shares of Common Stock, with the amount and timing of repurchases depending on market conditions and corporate needs. During the nine months ended June 30, 2026, the Company repurchased 245,399 shares of stock, at a weighted average price per share of $40.76, for $10,003.
During the three and nine months ended June 30, 2025, we recorded an additional valuation allowance against our deferred tax assets, which is recorded in the annual effective tax rate. We are required to assess the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of the existing deferred tax
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assets. A significant piece of objective negative evidence evaluated was the cumulative loss expected to be incurred over a three-year period during the year ending September 30, 2025. Such objective evidence limits the ability to consider other subjective evidence, such as our projections for future growth. The amount of the deferred tax asset considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are increased or if objective negative evidence in the form of cumulative losses is no longer present and additional weight is given to subjective evidence such as our projections for growth.
Management believes that a combination of cash-on-hand, cash generated from operations, asset sales and availability under our RLOC will provide sufficient liquidity to service the principal and interest payments on our indebtedness and will satisfy working capital requirements and capital expenditures for at least the next twelve months and over the long term. However, this is subject, to a certain extent, to general economic, financial, competitive, regulatory and other factors that are beyond our control.
Borrowing Facilities and Long-term Debt
We have a $95,000 RLOC, of which $92,500 was available for general use as of June 30, 2026 (see Note 8. Long-Term Debt and Lines of Credit to the accompanying Condensed Consolidated Financial Statements).
Our credit facilities are subject to a Minimum Liquidity Requirement of $5,818 and an LTV Cap of 50.0%. As of June 30, 2026, we were in compliance with all of the financial covenants and were able to draw the entire amount of the RLOC, less current borrowings, and remain under the LTV Cap.
The term loans and RLOC are secured by real property. The security for the term loans and RLOC as of the most recent amendment, consists of approximately 40,258 gross acres of land.
On May 13, 2026, the Company entered into the Ninth Amendment to First Amended and Restated Credit Agreement (the (“Amended Credit Agreement”) which removed the requirement to maintain crop and tree insurance on the Company’s citrus trees and Valencia oranges, as well as other crop maintenance requirements.
On July 24, 2026 the Company entered into the Second Amendment to Loan Agreement (the “Second Amendment”) which removed the requirement to provide financial information for Citree on a stand-alone basis, as well as the requirement to maintain crop and tree insurance and certain other crop maintenance requirements.
We may utilize available cash and proceeds from asset sales to pay down indebtedness, repurchase stock and for other corporate purposes, subject to market conditions and Board discretion. Any decision regarding share repurchases or dividends will depend on our cash flows, liquidity, credit facility covenants, and other factors, and there can be no assurance that additional financing will be available on acceptable terms, or at all.
The level of debt could have important consequences on our business, including, but not limited to, increasing our vulnerability to general adverse economic and industry conditions, limiting the availability of cash flow to fund future investments, capital expenditures, working capital, business activities and other general corporate requirements, and limiting flexibility in planning for, or reacting to, changes in our business and industry.
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Cash Flows
The components of our cash flows are discussed below.
(in thousands) Nine Months Ended June 30, Change
2026 2025
Net cash provided by operating activities $ 2,332 $ 22,841 $ (20,509)
Net cash provided by investing activities 28,187 24,693 3,494
Net cash used in financing activities (13,063) (8,097) (4,966)
Net increase in cash and cash equivalents and restricted cash $ 17,456 $ 39,437 $ (21,981)
Net Cash Provided By Operating Activities
The $20,509 decrease in Net cash provided by operating activities was driven by crop insurance proceeds of $20,010, received during the nine months ended June 30, 2025, which were significantly higher than crop insurance proceeds received in the nine months ended June 30, 2026.
Net Cash Provided By Investing Activities
The $3,494 increase in Net cash provided by investing activities for the nine months ended June 30, 2026, compared to the nine months ended June 30, 2025, was principally the result of greater land sales in the nine months ended June 30, 2026, partially offset by an advance of $5,071 to fund a wildlife-crossing planned as part of the Corkscrew Villages Project.
Net Cash Used In Financing Activities
The $4,966 increase in Net cash used in financing activities for the nine months ended June 30, 2026, as compared to the nine months ended June 30, 2025, was primarily the result of common stock repurchases of $10,003 and $2,007 to acquire the 49% of Citree that we did not own (see Note 2. Summary of Significant Accounting Policies to the Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report for details), partially offset by lower debt repayments in the nine months ended June 30, 2026.
Contractual Obligations
Our material cash requirements from known contractual and other obligations are described in the accompanying notes to the financial statements within Part I, Item 1 of this Quarterly Report. These include principal and interest payments on long-term debt as described in Note 8. Long-Term Debt and Lines of Credit and operating leases as described in Note 11. Leases to the Condensed Consolidated Financial Statements included in this Quarterly Report.
Critical Accounting Policies and Estimates
The discussion and analysis of the Company’s financial condition and results of operations is based upon its unaudited condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires the Company to make certain estimates and judgments that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. We base these estimates on historical experience, available current market information and on various other assumptions that management believes are reasonable under the circumstances. Additionally, the Company evaluates the results of these estimates on an on-going basis. Management’s estimates form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
See Note 2. Summary of Significant Accounting Policies to the Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report for a detailed description of recent accounting pronouncements. There have been no material changes to the Company’s Critical Accounting Policies and Estimates from those reflected in the Company’s 2025 Annual Report on Form 10-K.
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