Alico, Inc. Reports Revenue Increase but Significant Net Loss in Latest Quarter

Alico, Inc. reported a significant decline in its financial performance for the three months ended December 31, 2024, compared to the same period in 2023. The company generated total operating revenues of $16.9 million, a 20.8% increase from $14.0 million in the prior year. However, net loss attributable to common stockholders was $9.2 million, a stark contrast to the net income of $42.9 million reported in the previous year. This shift was primarily driven by a lack of significant land sales, which had previously bolstered revenues, and a substantial decrease in the company's citrus production due to adverse weather conditions and ongoing challenges from citrus greening disease.

In terms of operational metrics, Alico's citrus segment saw a 20.1% increase in revenue, reaching $16.3 million, largely due to a 38.7% rise in the price per pound solid. However, the volume of pound solids produced decreased by 13.3%, reflecting the impact of Hurricane Milton on the harvest. The Land Management and Other Operations segment also experienced growth, with revenues increasing by 44.5% to $568,000, attributed to higher rock and sand royalty income. The company’s total assets decreased slightly to $397.6 million from $398.7 million at the end of September 2024.

Strategically, Alico announced a major transformation plan on January 6, 2025, aimed at winding down its citrus production operations to focus on diversified land usage and real estate development. This decision comes in response to the financial pressures faced by the citrus segment and is expected to result in a workforce reduction of up to 172 employees. The company anticipates incurring charges of approximately $1.5 million to $2 million related to this workforce reduction, primarily for severance and related costs. Alico also plans to sell vehicles and equipment used in its citrus operations, although it has not yet estimated the proceeds from these sales.

The company’s cash position improved, with cash and cash equivalents rising to $4.4 million from $3.2 million at the end of September 2024. Alico's current liabilities decreased significantly, leading to a current ratio of 4.84, indicating strong liquidity. However, the company remains cautious about its future cash flows, particularly as it transitions away from citrus production. Alico's management has expressed confidence that its diversified land usage and real estate development strategy will provide a more stable revenue stream moving forward.

Looking ahead, Alico's management has indicated that the strategic transformation is expected to reshape the company's revenue sources significantly. The company aims to leverage its land holdings for real estate development while continuing to manage a portion of its citrus operations through third-party caretakers. However, the success of this transition will depend on various factors, including regulatory approvals for land development projects and the ability to attract skilled personnel for new business initiatives.