Alico, Inc.ALCONASDAQ
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Operator: Good morning, and welcome to the Alico Fourth Quarter and Fiscal Year Ended 2025 Earnings Call. [Operator Instructions]. As a reminder, today's conference is being recorded. I would now like to turn the call over to your host, John Mills, Managing Partner at ICR. Please go ahead.
John Mills: Thank you. Good morning, everyone, and thank you for joining us for Alico's Fourth Quarter and Fiscal Year 2025 Conference Call. On the call today are John Kiernan, President and Chief Executive Officer; and Brad Heine, Chief Financial Officer. By now, everyone should have access to the fourth quarter and fiscal year 2025 earnings release, which went out yesterday at approximately 4:15 p.m. Eastern Time. If you've not had a chance to view the release, it's available on the Investor Relations portion of the company's website at alicoinc.com. This call is being webcast, and a replay will be available on Alico's website as well. Before we begin, we'd like to remind everyone that the prepared remarks contain forward-looking statements. Such statements are subject to risks, uncertainties and other factors that may cause actual results to differ materially from those expressed or implied in these statements. Important factors that could cause or contribute to such differences include risks detailed in the company's quarterly reports on Form 10-Q, annual reports on Form 10-K, current reports on Form 8-K and any amendments thereto filed with the SEC and those mentioned in the earnings release. The company undertakes no obligation to subsequently update or revise the forward-looking statements made on today's call, except as required by law. During this call, the company may also discuss non-GAAP financial measures, including EBITDA, adjusted EBITDA and net debt. For more details on these measures, please refer to the company's press release issued yesterday. And with that, it is my pleasure to turn the call over to the company's President and CEO, Mr. John Kiernan.
John Kiernan: Thank you, John. Good morning, everyone, and thank you for joining us for Alico's Fourth Quarter and Fiscal Year 2025 Earnings Call. This has been a truly transformational year for Alico. We successfully executed on our strategic pivot from a traditional citrus producer to a diversified land company, positioning ourselves for sustainable long-term value creation while maintaining our deep commitment to conservation and responsible stewardship. Fiscal year 2025 will be remembered as a milestone year in Alico's 125-plus year history. We delivered on the commitments we made to you, our shareholders, and demonstrated the disciplined execution that defines our approach to this transformation. Let me highlight our key accomplishments. First, we successfully completed our final major citrus harvest, officially concluding our capital-intensive citrus production operations. This achievement represents the culmination of a carefully planned 12-month transition that we executed while maintaining day-to-day agricultural operations. Second, we exceeded our financial guidance across key metrics. We achieved $22.5 million in adjusted EBITDA surpassing our $20 million target. Our land sales of $23.8 million also exceeded a $20 million guidance, demonstrating strong demand for our strategically located properties. Third, we strengthened our balance sheet significantly. We ended the year with $38.1 million in cash and reduced our net debt to $47.4 million providing us with the financial flexibility to fund operations through fiscal year 2027, while advancing our high-value development projects. The takeaway accomplishment for 2025 is that we have essentially lowered the financial risk for the company by reducing the volatility of weather-dependent and disease-affected citrus agricultural operations by leasing land to other agricultural crop growers while maintaining the stability of diversified land usage. Our development pipeline continues to advance on schedule with Corkscrew Grove Villages leading the way as the crown jewel of our portfolio. The establishment of the Corkscrew Grove Stewardship District represents a significant regulatory milestone that validates our development strategy and provides the framework for sustainable community focused growth. The Stewardship District approved unanimously by the Florida legislature positions us to effectively finance infrastructure, restore and manage natural areas and oversee the administration of our master planned communities. I'm particularly excited about our strategic partnership with the Florida Department of Transportation to design and construct a wildlife underpass as part of the State Road 82 expansion. This $5 million investment demonstrates our commitment to the Florida Wildlife Corridor and showcases the innovative conservation approach that sets Alico apart in the development community. We remain on track for the final decision from Collier County in 2026 with potential construction for Corkscrew beginning as early as 2028. The entitlement process -- I'm sorry, the entitlement progress with our Bonnett Lake property is also progressing well with our application moving through the review process as expected. Collectively, our 4 near-term real estate development projects Corkscrew Villages, Bonnett Lake, Saddlebag Grove and Plant World, totaling approximately 5,500 acres maintain their estimated present value of between $335 million and $380 million to be realized within the next 5 years. This represents significant value creation potential from just 10% of our land holdings, demonstrating the substantial embedded value within our diversified portfolio. Our conservation legacy continues to be a cornerstone of our strategy. Over the past 40 years, we've transferred lands that have become part of major conservation areas, including the CREW, Tiger Creek Preserve, and the Okaloacoochee Slough Wildlife Management Area. The Corkscrew Grove Villages project will continue that legacy by placing no less than 6,000 acres into permanent conservation, supporting the implementation of the Florida Wildlife Corridor and Collier Rural land stewardship program. We believe in responsible development that balances growth with conservation and believe it enhances the value and marketability of our development projects. Our approach creates the best of both worlds. With approximately 25% of our land identified for strategic development and 75% remaining for diversified agriculture, we've built a balanced platform for both near-term returns and long-term growth. We've successfully negotiated lease agreements for approximately 5,250 acres with third-party citrus growers and we're seeing strong interest from cattle operators, sugarcane growers and [ soy ] producers. This diversified approach generates revenue during our transition and also maintains productive use of our agricultural lands while preserving optionality for future development or continued agricultural use. Brad will provide detailed financial results in a moment. I want to emphasize our strong cash generation and disciplined capital allocation. The $20.4 million in crop insurance proceeds we received following Hurricane Milton, combined with our land sales, has created a robust liquidity position. We remain committed to returning capital to shareholders. We paid our fourth quarter dividend in October, maintaining our track record of consistent dividend payments. Since 2015, we've returned more than $190 million of capital through dividends, share repurchases and debt reduction. Management's comprehensive NPV analysis of our approximately 49,000 acres indicates a market value of assets between $650 million and $750 million. With our current market capitalization of approximately $240 million and net debt of $47.4 million, we believe Alico represents compelling value for investors seeking exposure to Florida's continued growth story. What differentiates Alico is our unique combination of strategic landholdings across 8 Florida counties, more than 125-plus years of local relationships and conservation credibility, a proven management team with deep expertise in both agriculture and real estate development and a balanced portfolio approach with 75% of our land remaining in agriculture. Looking ahead into fiscal 2026, we've already demonstrated continued execution of our land monetization strategy. Earlier this month, we completed the sale of 579 acres of citrus land for approximately $6.1 million and sold our office and shop in Frostproof, for approximately $1.7 million, further optimizing our real estate portfolio while generating additional cash flow. Our priorities for fiscal year 2026. To continue our transformation momentum, our first, to optimize our agricultural operations by maximizing revenue from our diversified leasing programs while maintaining rigorous cost controls across all properties. Second, to remain committed to advancing our residential and commercial development projects by continuing to progress through the entitlement process for our 4 priority projects with particular focus on securing final approvals for Corkscrew Grove Villages. Third, our capital allocation approach will balance required entitlement investments with shareholder returns while maintaining the financial flexibility necessary to execute our long-term strategy. And finally, to pursue operational excellence by leveraging our experienced management team and strong local relationships to execute efficiently across all of these initiatives. In closing, fiscal year 2025 was a year of successful transformation that positions Alico for sustainable long-term growth. We've derisked our business model, strengthened our balance sheet and created a clear path to unlock the significant value embedded in our land portfolio. Our approach of balancing specific high-value development projects with the diversified agricultural operations creates a business model that leverages our core strengths while adapting to market opportunities. We're well-capitalized, strategically focused and positioned to deliver sustainable value creation. The foundation is in place, and we're excited about the opportunities ahead. With that, I'll turn it over to Brad to walk through our detailed financial results, and then we'll be happy to take a few questions.
Bradley Heine: Thank you, John, and good morning, everyone. I'll walk you through our fourth quarter and full fiscal year 2025 financial results, which demonstrate the successful completion of our strategic transformation. For the fourth quarter ended September 30, 2025, revenue was $802,000 compared to $935,000 in the prior year quarter, reflecting the substantial conclusion of our citrus operations. We reported a net loss attributable to legal common stockholders of $8.5 million or $1.11 per diluted share compared to a net loss of $18.1 million or $2.38 per diluted share in the prior year quarter. This improvement was driven by the completion of our transformation activities and reduced operational complexity. For the full fiscal year, revenue was $44.1 million compared to $46.6 million in fiscal 2024. While we reported a net loss of $147.3 million or $19.29 per diluted share, this was primarily due to noncash charges related to our strategic transformation including $162.7 million in accelerated depreciation and $25 million in asset impairments as we exited citrus operations. Importantly, our adjusted EBITDA for fiscal 2025 was $22.5 million, exceeding our $20 million guidance target. This demonstrates the underlying operational strength of our transformed business model. Our balance sheet transformation has been remarkable. We ended fiscal year 2025 with $38.1 million in cash and cash equivalents compared to just $3.2 million at the end of fiscal 2024. Our net debt decreased significantly to $47.4 million from $89 million, representing a $41.6 million improvement year-over-year. This strong liquidity position, combined with our $92.5 million available under our line of credit provides us with sufficient resources to fund operations through fiscal 2027, while advancing our development projects. Our working capital ratio improved to 9.56:1 demonstrating exceptional financial flexibility. We exceeded our land sales guidance, generating $23.8 million in proceeds from 96 acres sold during fiscal 2025, surpassing our $20 million target. These sales, combined with our operational improvements have created the financial foundation for our next phase of growth. Looking ahead, our financial position is strong, and we're well balanced to execute on our development pipeline while maintaining operational efficiency. Now I'd like to turn the call back to John for his closing remarks.
John Kiernan: Thank you, Brad. Fiscal 2025 was truly transformational for Alico. We delivered on our commitments. We completed our final major citrus harvest, exceeded our financial guidance across key metrics and now have a balance sheet that provides the company with years of operational runway. Most importantly, we've eliminated citrus agricultural volatility while unlocking the value in our approximately 49,000 acre Florida portfolio. Our path forward has been set, and we believe it is compelling. We're optimizing agricultural leasing across our entire portfolio, advancing our high-value development projects through local, state and federal entitlement processes and maintaining our disciplined approach to capital allocation. With Corkscrew Grove Villages approaching the first set of approvals in 2026 and our other development projects advancing as well, we have multiple catalysts for value creation. The numbers tell the story. Our NPV analysis values our land portfolio between $650 million and $750 million, yet we trade at just $240 million today. We believe this represents a significant valuation disconnect that we expect will close as we execute. We remain committed to shareholder returns through our 50-year dividend legacy and multiple capital deployment options, including our authorized $50 million buyback program. As land sales accelerate, we have increasing flexibility to return more capital. Alico today is fundamentally transformed, well-capitalized, strategically focused and spread across Southwest Florida with more than 125 years of Florida heritage, proven conservation leadership, and a clear real estate development pipeline, we're very well positioned to deliver sustainable value creation. Mickey, we'll now open up the call for questions.
Operator: [Operator Instructions] And we'll take our first question from [ George ] with [ Freedom Broadcast ].
Unknown Analyst: My only question, what is the expected current of the land sales in the next 12 months? Should we anticipate larger transactions similar to prior year disposals of more measured pace?
John Kiernan: I'm sorry, are you asking if we're giving any sort of guidance or forecast on revenues for fiscal 2026?
Unknown Analyst: Yes, if you have some guidance on land sales.
John Kiernan: Right. So we have not provided any guidance on additional land sales at this time for fiscal year 2026.
Operator: [Operator Instructions]. And we show no further questions in queue. At this time, I will turn the call back to John Kiernan for closing remarks.
John Kiernan: Thank you. I want to thank all of our employees for their dedication during this transition. I'd like to thank our Board for their continued support of our strategic vision. And I'd like to thank you, our shareholders, for your patience and confidence as we execute this transformation. We look forward to updating you on our further progress in the new fiscal year. I wish everyone a happy holiday. Thank you.
Operator: Thank you. This brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.