ALICO, INC. (ALCO) Business

Item 1. Business

Overview

Alico was incorporated under the laws of the State of Florida in 1960. Alico is an agribusiness and land management company with a legacy of achievement and innovation in citrus and conservation. We focus on strategic land development opportunities and diversified agricultural operations. At September 30, 2025, we owned approximately 49,537 acres of land in eight Florida counties (Charlotte, Collier, DeSoto, Glades, Hardee, Hendry, Highlands and Polk), and approximately 44,700 acres of oil, gas and mineral rights throughout Florida. We hold these oil, gas and mineral rights on substantially all our owned acres, with additional mineral rights on other leased acres. Our principal lines of business are land management and citrus groves. See Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, Recent Developments included in this Annual Report for a discussion of recent land sales activity.

We manage our land based upon its primary usage and review its performance based upon two primary classifications - Alico Citrus and Land Management and Other Operations. The Alico Citrus division 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. However, the Alico Citrus division has substantially wound down operations after the 2024-2025 harvest due to environmental and financial challenges, as discussed further below. Land Management and Other Operations includes activities related to grazing and hunting leasing, management and/or conservation of unimproved native pastureland, activities related to rock mining royalties and other insignificant lines of business, and activities related to owning and/or leasing improved farmland. We present our financial results and the related discussion based upon our two business segments: (i) Alico Citrus and (ii) Land Management and Other Operations.

On January 6, 2025, we announced a Strategic Transformation (the “Strategic Transformation”) in our business focus, to wind down our Alico Citrus division, to focus on a long-term diversified land usage and real estate development strategy. Due to increasing financial challenges from citrus greening disease and environmental factors for many seasons, we decided to not spend further material capital on our citrus operations and to wind down substantially all of our Citrus’ primary operations after completion of the 2024-2025 harvest in April 2025. In connection with this Strategic Transformation, on January 3, 2025, our Board of Directors (the “Board”) approved a reduction in our workforce by up to 172 employees, which occurred between January 6, 2025 and May 30, 2025. The Board’s decision is part of cost-reduction initiatives aimed at providing investors with a greater return on capital that includes the benefits and stability of a conventional agriculture investment, with the optionality that comes with active land management.

In May 2025, we entered into a Mutual Contract Termination Agreement with Tropicana (the "Mutual Contract Termination Agreement"), terminating our agreement with them in its entirety following the fulfillment of all obligations under that agreement concerning the 2024/2025 Crop Year. All outstanding amounts were settled by June 30, 2025.

The Land We Manage

We regularly review our land-holdings to determine the best use of each parcel based upon our management expertise. Our total return profile is a combination of operating income potential and long-term appreciation. Land holdings that do not meet our total return criteria are considered surplus to our operations and efforts are being made ready to sell, develop, lease or exchange such land holdings for land considered to be more compatible with our business objectives and total return profile.

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The operating activities on our land holdings and in which we engage as of September 30, 2025, are categorized in the following table:

Alico Citrus

We own and manage citrus land in DeSoto, Polk, Collier, Hendry, Charlotte, Highlands, and Hardee Counties in the state of Florida and cultivate citrus trees to produce citrus for delivery to the fresh and processed citrus markets. Alico citrus groves total 39,297 gross acres or 79.3% of our land holdings, of which there are approximately 3,780 net tree acres dedicated to growing Citrus for the 2025-2026 harvest.

Sales to the processed market represented 96.0% and 92.0%, of Alico Citrus revenues for the years ended September 30, 2025 and 2024, respectively. The overall increase in the sales to the processed market as a percentage of citrus revenues is due to the termination of a grove management agreement, discussed below. Our sales to the fresh citrus market constituted 1.3% and 1.2% of our Alico Citrus revenues for the years ended September 30, 2025 and 2024, respectively.

The average pound solids per box was 4.82 and 4.83, for the years ended September 30, 2025 and 2024, respectively. We historically used multi-year contracts with citrus processors that may include pricing structures based on a floor and ceiling price. Therefore, if pricing in the market is favorable, relative to our floor price, we would benefit from the incremental difference between the floor and the final market price to the extent it does not exceed the ceiling price. However, the vast majority of our contracts for the 2024-2025 harvest season were fixed price contracts.

We supplied Tropicana, previously our largest customer, with citrus fruit under agreements entered into beginning in May 2020. The most recent agreements included: (1) an agreement effective August 31, 2023 through August 31, 2025 with fixed prices per pound solid and escalation provisions; and (2) a three‑year Orange Purchase Agreement effective June 5, 2024 through July 31, 2027, priced approximately 33%–50% above the prior year’s average price for all citrus sold to Tropicana (together, the “Tropicana Agreements”). The Tropicana Agreements were terminated pursuant to the Mutual Contract Termination Agreement in May 2025, as described above.

On October 30, 2023, we entered into a grove management agreement (the "Grove Management Agreement") with unaffiliated third parties to provide citrus grove caretaking services for approximately 3,300 acres. Under the Grove Management Agreement, we were reimbursed for all costs and received a management fee based on acres covered. The Grove Management Agreement was terminated as of December 31, 2024 and as of September 30, 2025, we had no significant third-party grove management agreements. Revenues from our grove management services represented 2.2% and 6.3% of our total citrus revenues for the years ended September 30, 2025 and 2024, respectively.

During the year ended September 30, 2025, we sold approximately 2,796 acres of citrus and ranch land for approximately $23,807 and recognized a gain of $20,319. During the year ended September 30, 2024, we sold approximately 18,354 acres of ranch and citrus land for $86,217 and recognized a gain of $81,416.

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.

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Land Management and Other Operations

We own and manage land in Hendry, Polk, Collier, DeSoto, Glades, Hardee and Highlands Counties and lease land for farming, hunting and grazing purposes, conservation, and mining activities. Our Land Management and Other Operations land holdings total 10,240 gross acres, or 20.7% of our total acreage.

Our estimated Land Management and Other Operations acreage is detailed in the following table as of September 30, 2025:

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.

Our Strategy

Our core business strategy is to focus on strategic land development opportunities and diversified agricultural operations, leveraging our extensive land portfolio to create long-term shareholder value while maintaining our focus on responsible land stewardship and conservation.

Our objective is to maximize shareholder value by identifying the highest and best use for all of our land. We are evolving our agriculture portfolio, transitioning from traditional citrus operations to positioning ~25% of our land holdings for strategic development opportunities, balancing near-term and long-term growth potential, while ~75% of our land holdings remain for diversified agricultural ventures.

We endeavor to manage our land to maximize value creation and to evaluate the effect of changing land uses while considering new opportunities. We believe that our focus on environmental stewardship is fundamental to our core beliefs.

Intellectual Property

While we consider our various intellectual property to be valued assets, we do not believe that our competitive position or our operations are dependent upon or would be materially impacted by any single piece of intellectual property or group of related intellectual property registrations or rights.

Seasonal Nature of Business

As with any agribusiness enterprise, our agribusiness operations and revenues are predominantly seasonal in nature. The following table illustrates the typical seasonality of our citrus-related agribusiness revenues during the past two fiscal years.

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Significant Customer

Revenue from Tropicana represented 87.2% and 86.8%, of our consolidated revenue for the years ended September 30, 2025 and 2024, respectively. Revenue in both periods was generated primarily under two contracts with Tropicana and consisted of sales of citrus to the processed market. No other single customer provided more than 10% of our consolidated revenue in the years ended September 30, 2025 or 2024.

The increase in Tropicana revenue, as a percentage of sales for the year ended September 30, 2025, was primarily due to a decrease in Grove Management Services revenue and an increase in price per pound solids, partially offset by lower total pound solids produced during the year ended September 30, 2025, as a result of Hurricane Milton, which negatively impacted our harvest during the year ended September 30, 2025.

Competition

The markets in which we operate are highly competitive. The orange and specialty citrus markets are intensely competitive, but no single producer has any significant market power over any market segments, as is consistent with the production of most agricultural commodities. Citrus is grown domestically in several states including Florida, California, Arizona, and Texas, as well as foreign countries, most notably Brazil and Mexico. Competition is impacted by several factors including quality, production, demand, brand recognition, market prices, weather, disease, export/import restrictions and foreign currency exchange rates.

We also face significant competition in our land development and diversified agricultural operations. As we shift our focus toward land development activities, we may face increased competition with regional and national developers, landowners, private equity and infrastructure investors, and other agricultural operators for projects, partners, joint ventures and leases. Competitive outcomes are influenced by access to capital, inventories of entitled or improved land, relationships with municipalities and utilities, and sales, brokerage and marketing channels, as well as permitting and infrastructure delivery capabilities. Demand and pricing are further affected by macroeconomic conditions, including mortgage rates and buyer financing, and we also compete for tenants and counterparties on grazing, farming, hunting and mining leases based on rent, terms, access, water availability and property improvements.

Environmental, Social and Governance (“ESG”)

We are an agricultural company which, based upon its rich heritage and traditions, seeks to maximize value for its customers and stockholders in the long term, which we believe includes employing sustainable practices in our operations including stewardship of both its natural and human resources. We recognize the increased and evolving emphasis by stockholders, business partners and other key constituents in recent years on ESG programs that are embedded into day-to-day business policies and practices. We are proud of our focus on the impacts of our business on our communities, the environment, and employees.

Governmental Regulations

Our operations are subject to various federal, state and local laws regulating the discharge of certain chemicals, substances or materials into the environment. Management believes we are in material compliance with all such rules including permitting and reporting requirements. Historically, compliance with environmental regulations has not had a material impact on our financial position, results of operations or cash flows.

Management monitors environmental legislation and requirements and makes every reasonable effort to remain in compliance with such regulations. In addition, we require in our leases that lessees of our property comply with environmental regulations as a condition of leasing.

We are also subject to other non-environmental laws of the United States and the rules and regulations of various governing bodies within the United States, which may differ among jurisdictions. Compliance with these laws, rules and regulations has not had, and is not expected to have, a material effect on our capital expenditures, results of operations and competitive position as compared to prior periods.

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Human Capital Management

Purpose and Company Values

Supporting our people is a fundamental value for Alico. We believe our success depends on our ability to attract, develop and retain key personnel. The skills, experience and industry knowledge of our employees and the employees of our independent contractors significantly benefit our operations and performance. Our management oversees various employee initiatives and also monitors the effectiveness of the personnel provided by independent contractors with which we contract for certain harvesting and hauling services.

Employees

We believe in a culture of belonging and inclusion. We are also focused on advancing safe and respectful work environments where our employees are invited to bring their talents, backgrounds and expertise to bear on the success of our business and where every person has the opportunity to thrive personally and professionally.

Hiring, Development and Retention

Employee levels are managed to align with the pace of business and consider the services that are provided for us by our independent contractors. We rely on our independent contractors to manage their respective employee levels so that the harvesting and hauling services they are obligated to perform for us are consistent with their contractual obligations and enable us to satisfy our harvesting and hauling needs. Management believes that through our own employees, coupled with the human capital supplied by our independent contractors, we have sufficient human capital to operate our business successfully. Management believes that our employee relations are favorable, that our relations with our independent contractors are favorable, and that the relations that we and the independent contractors have with the employees of the independent contractors are favorable.

Employee Safety and Well-Being

Adhering to the laws that require us to protect the health and safety in the workplace for our employees and personnel provided by independent contractors with which we contract is a priority for us. Hazards in the workplace are actively identified and management tracks incidents so remedial actions can be taken to improve workplace safety. In order to support and enhance health and safety practices, we routinely conduct training with employees to emphasize safety when conducting grove caretaking, general employee health, proper equipment operating techniques, office ergonomics and other important safety topics.

Inclusion

People are critical to our efforts to drive growth and deliver value for stockholders. One of the ways we have put people at the center is by continuing to work toward a more inclusive workplace where each person feels respected, valued and seen and can be the best version of themselves. Employees, management and directors with a range of experience and backgrounds, ultimately help us to better operate the business.

Based on our Human Capital Management strategy, we seek to promote a greater sense of inclusion through a variety of initiatives, which includes career advancement, training, comradery, and empowerment for all employees.

Compensation and Benefits

Our compensation and benefits are designed to support the financial, mental, and physical well-being of our employees. We are committed to equal pay for equal work. We believe our base wages and salaries, which we review annually, are fair and competitive with the external labor markets in which our employees work. We also regularly review our compensation practices to promote fair and equitable pay. We also offer competitive benefit programs, in line with local practices and with the flexibility to accommodate the needs of a diverse workforce. The benefit programs include, among others, paid holidays, family leave, disability insurance, life insurance, healthcare, and a 401(k) plan with a company match. As of September 30, 2025, we had 20 full-time employees and no part-time employees. We do not include our independent contractors in our number of employees because they are not employees.

None of our employees are subject to a collective bargaining agreement. We believe that our relations with our employees are good.

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Our employees work in the following roles:

Our Operations employees support both our Alico Citrus and Land Management and Other Operations segments and their time is allocated to these segments based on management's best estimates.

Raw Materials

Raw materials needed to cultivate the various crops grown by us consist primarily of fertilizers, herbicides, insecticides and fuel and are readily available from local suppliers. These raw materials are purchased on an order basis without long-term commitments. Our key suppliers for fertilizer, herbicides and insecticides include Howard Fertilizer, Wedgeworth’s, Nutrien AG Solutions and Helena Agri-Enterprises.

Societal Well-Being

We remain committed to a healthy and equitable society to ensure our collective well-being for future generations. In the past year, we provided cash grants and supporting donations to support communities in which we operate and promote health, safety and education.

Available Information

Our reports filed with or furnished to the SEC pursuant to Sections 13(a) and 15(d) of the Exchange Act, are available, free of charge, on our investor relations website at ir.alicoinc.com as soon as reasonably practicable after we electronically file or furnish such information with the Securities and Exchange Commission (the “SEC”). Any information posted on, or that can be accessed through our website, is not incorporated by reference in this Annual Report. The SEC also maintains a website at http://www.sec.gov, which contains annual, quarterly and current reports, proxy and information statements and other information regarding issuers that file electronically with the SEC.