ALICO, INC. (ALCO)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

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:

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

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with Part I, Item 1, “Business”, Item 1A, “Risk Factors” and the accompanying Consolidated Financial Statements and related Notes thereto included in this Annual Report commencing on page 44. 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 in Part I, Item 1A, “Risk Factors” and other portions of this Annual Report. 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. We operate as two business segments, and all of our operating revenues are generated in the United States. While Alico Citrus, which holds the Company’s citrus production operations, has substantially wound down operations after the 2024/2025 harvest due to environmental and financial challenges, 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 years ended September 30, 2025 and 2024 we generated operating revenues of $44,066 and $46,643, respectively, a loss from operations of $203,901 and $67,454, respectively, and net (loss) income attributable to common stockholders of $(147,334) and $6,973, respectively. Net cash provided by (used in) operating activities was $20,126 and $(30,497), respectively, for the years ended September 30, 2025 and 2024, respectively. See Part I, Item 1, Business, included in this Annual Report for a discussion of our year highlights and our evolving business strategy.

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 its reportable segments.

Our two segments are as follows:

•Alico Citrus includes activities related to planting, owning, cultivating and/or managing citrus groves to produce fruit for sale to fresh and processed citrus markets, including activities related to the purchase and resale of fruit and value-added services, which include contracting for the harvesting, marketing and hauling of citrus; and

•Land Management and Other Operations includes activities related to the leasing of citrus groves, farming, grazing and hunting leasing, management and/or conservation of unimproved native pastureland and activities related to rock mining royalties and other insignificant lines of business. Also included are activities related to owning and/or leasing improved farmland. Improved farmland is acreage that has been converted, or is permitted to be converted, from native pasture and which may have various improvements including irrigation, drainage and roads.

Revenues from Alico Citrus operations were 93.8% and 96.6%, of our total operating revenues for the years ended September 30, 2025 and 2024, respectively. Revenues from Land Management and Other Operations were 6.2% and 3.4% of total operating revenues for the years ended September 30, 2025 and 2024, respectively. This shift reflects our migration away from growing our own citrus and toward a land management-focused model as part of the Strategic Transformation.

Recent Developments

Amended Credit Agreement with Metropolitan Life Insurance Company

On September 29, 2025, we entered into an Eighth Amendment (the “Eighth Amendment”) to our Amended and Restated Credit Agreement dated as of December 1, 2014, as amended to date, by and among the Company, Alico Land

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Development Inc., Alico Fruit Company, LLC and Met (as amended, restated, supplemented or otherwise modified from time to time, the “MetLife Credit Agreement”), which, among other things: provided for a new $10,000 fixed-rate term loan ("Met Fixed-Rate Term Loan II"), with a maturity date of May 1, 2034; amended certain mortgages to add additional real property as collateral; added parties as mortgagors; and modified the loan-to-value ratio covenant to require that the LTV Ratio (as defined in the MetLife Credit Agreement) be at all times less than 50%. The proceeds from the Met Fixed‑Rate Term Loan II were used to repay all outstanding borrowings under our Loan Agreement with Prudential Mortgage Capital Company, LLC, dated December 31, 2012 (as amended to date, the “Prudential Credit Agreement”). As a result of such repayment, the Prudential Credit Agreement was terminated in accordance with its terms.

Corkscrew Grove Villages Wildlife Underpass

In advance of future development of Corkscrew Grove Villages, Alico Inc. is coordinating with the Florida Department of Transportation to design and construct a wildlife underpass as part of FDOT’s ongoing widening of State Road 82 in Collier County. This collaboration reflects Alico’s commitment to environmental stewardship and conservation by creating a critical regional link that supports wildlife movement throughout Southwest Florida.

After informal consultation with Florida Fish and Wildlife Conservation Commission and the US Fish and Wildlife Service, Alico is taking initial steps to implement a 1,295-acre wildlife corridor planned as part of the Corkscrew Grove Villages project in eastern Collier County. The wildlife underpass proposed as part of this corridor will help advance the panther recovery plan by providing a permanent regional connection to the Caloosahatchee dispersal zone at no additional cost to taxpayers.

On October 27, 2025, the Corkscrew Grove Stewardship District (the “CGSD”), a special district formed to facilitate financing and development of community infrastructure within its boundaries, entered into a Locally Funded Agreement (the “CGSD Funding Agreement”) with FDOT. The CGSD was established in June 2025 and it will assist the Company in its efforts to effectively finance infrastructure, help restore and manage natural areas, and oversee the administration of master planned communities and lands. Our Chief Executive Officer, John Kiernan, is the Board Chairman of the CGSD. Through the CGSD Funding Agreement, we will provide funding to FDOT to support the construction of a wildlife‑crossing planned as part of the Corkscrew Villages project and on November 14, 2025, we deposited $5,071 with FDOT to fund the project. The payment to the CGSD is reimbursable to the Company under the CGSD Funding Agreement.

Subject to final permitting and approval, this underpass may commence construction within the next six months.

Sale of Lily Grove

On November 4, 2025, we sold 579 acres of citrus land for $6,077.

Sale of Office and Shop in Frostproof

On November 19, 2025, sold our office and shop in Frostproof for $1,675.

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Consolidated Results of Operations

The following discussion provides an analysis of our results of operations for the year ended September 30, 2025, as compared to the year ended September 30, 2024.

NM - Not Meaningful

The following table presents our operating revenues, by segment, as a percentage of total operating revenues for the years ended September 30, 2025 and 2024:

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The following discussion provides an analysis of our reportable segments:

Alico Citrus

Components of Results of Operations for Ali

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