ALICO, INC.

Previous wording

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.

Current wording

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.

Previous wording

For the three months ended March 31, 2026 and 2025, we generated operating revenue of $5,340 and $17,980, respectively, net income (loss) from operations of $7,821 and $(153,085), respectively, and net income (loss) attributable to common stockholders of $11,381 and $(111,385), respectively. Net cash used in operating activities was $4,809 and $571 for the six months ended March 31, 2026 and 2025, respectively.

Current wording

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.

Previous wording

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.

Current wording

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).

Previous wording

During the three months ended March 31, 2026, the Company repurchased 207,340 shares of stock, at a weighted average price per share of $40.38, for $8,372. In April 2026, the Company repurchased 38,059 shares of stock at a weighted average price of $42.87 for $1,631, bringing its Fiscal Year 2026 repurchases to 245,399 shares at a weighted average price of $40.76, for $10,003.

Current wording

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.

Previous wording

The following discussion provides an analysis of our results of operations for the three and six months ended March 31, 2026, as compared to 2025:

Current wording

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:

Previous wording

The 70.3% and 79.3% decrease in revenue for the three and six months ended March 31, 2026, respectively, as compared to the three and six months ended March 31, 2025, was primarily due to our Strategic Transformation and decision to wind down our Citrus division to focus on a long-term diversified land usage and real estate development strategy, partially offset by an increase in farming lease and sod revenue.

Current wording

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.

Previous wording

General and administrative expense increased $260 for the six months ended March 31, 2026, compared to the six months ended March 31, 2025 due to an increase in contract labor costs and the provision for credit losses on certain citrus receivables, partially offset by lower depreciation expense.

Current wording

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.

Previous wording

Other income (expense), net for the six months ended March 31, 2026 increased $9,529, compared to the six months ended March 31, 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 2,100 acres of land for $17,872 ($8,526 per acre) in gross proceeds during the six months ended March 31, 2025.

Current wording

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.

Previous wording

The change in the income tax provision of $27,109 for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, 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 March 31, 2026.

Current wording

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.

Previous wording

The decrease in the income tax benefit for the six months ended March 31, 2026, as compared to the six months ended March 31, 2025, of $28,691 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 March 31, 2026.

Current wording

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.

Previous wording

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 three months ended March 31, 2026, the Company repurchased 207,340 shares of stock, at a weighted average price per share of $40.38, for $8,372 (see Note 15. Subsequent Events to the accompanying Condensed Consolidated Financial Statements).

Current wording

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.

Previous wording

During the three and six months ended March 31, 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 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.

Current wording

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 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.

Previous wording

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, on general economic, financial, competitive, regulatory and other factors that are beyond our control.

Current wording

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.

Previous wording

Our credit facilities are subject to a Minimum Liquidity Requirement of $5,824 and an LTV Cap of 50.0%. As of March 31, 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.

Current wording

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.

Previous wording

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 40,263 gross acres of land.

Current wording

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.

Previous wording

The $12,588 increase in Net cash provided by investing activities for the six months ended March 31, 2026, compared to the six months ended March 31, 2025, was principally the result of greater land sales in the six months ended March 31, 2026, partially offset by an advance of $5,071 to fund a wildlife-crossing planned as part of the Corkscrew Villages Project (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).

Current wording

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.

Previous wording

The $5,622 increase in Net cash used in financing activities for the six months ended March 31, 2026, as compared to the six months ended March 31, 2025, was primarily the result of common stock repurchases of $8,372, partially offset by lower debt repayments in the six months ended March 31, 2026.

Current wording

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.

Previous wording

See Note 1. Description of Business and Basis of Presentation 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.

Current wording

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.