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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
þQuarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the Quarterly Period Ended March 31, 2024
or
oTransition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period
from____________________ to _________________________
Commission File Number: 0-261
ALICO, INC.
(Exact name of registrant as specified in its charter)
Florida59-0906081
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer Identification No.)
10070 Daniels Interstate Court
Suite 200
Fort Myers
FL
33913
(Address of principal executive offices)(Zip Code)
(239) 226-2000
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common StockALCO
Nasdaq Global Select Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. þYes o No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). þYes o No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:
Large Accelerated FileroAccelerated Filerþ
Non-accelerated fileroSmaller Reporting Companyþ
Emerging Growth Companyo
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ
There were 7,624,185 shares of common stock outstanding at May 2, 2024.


ALICO, INC.
FORM 10-Q
For the three and six months ended March 31, 2024 and 2023
Table of Contents
PART I
Item 1. Condensed Consolidated Financial Statements
Index to Condensed Consolidated Financial Statements


Cautionary Note Regarding Forward-Looking Information
This Quarterly Report on Form 10-Q (the “Quarterly Report”) contains certain forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical fact contained in this Quarterly Report are forward-looking statements, including without limitation, statements regarding future actions, business plans and prospects, prospective products, trends, future performance or results of current and anticipated products, sales efforts, expenses, interest rates, the outcome of contingencies, plans relating to dividends, government regulations, the adequacy of our liquidity to meet our needs for the foreseeable future, our expectations regarding the continued impact of Hurricane Ian, and our expectations regarding market conditions. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.
In some cases, you can identify forward-looking statements by terms such as such as “may,” “will,” “could,” “should,” “would,” “believes,” “expects,” “anticipates”, “estimates”, “projects,” “intends,” “plans” or the negative of these terms or other similar expressions. The forward-looking statements in this Quarterly Report are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. These forward-looking statements speak only as of the date of this Quarterly Report and are subject to a number of important factors that could cause actual results to differ materially from those in the forward-looking statements, including, but not limited to: adverse weather conditions, natural disasters and other natural conditions, including the effects of climate change and hurricanes and tropical storms, particularly because our citrus groves are geographically concentrated in Florida; damage and loss from disease including, but not limited to, citrus greening and citrus canker; any adverse event affecting our citrus business; our ability to effectively perform grove management services, or to effectively manage an expanded portfolio of groves; our dependency on our relationship with Tropicana and Tropicana’s relationship with certain third parties for a significant portion of our business; our ability to execute our strategic growth initiatives and whether they adequately address the challenges or opportunities we face; product contamination and product liability claims; water use regulations restricting our access to water; changes in immigration laws; harm to our reputation; tax risks associated with a Section 1031 Exchange; risks associated with the undertaking of one or more significant corporate transactions; the seasonality of our citrus business; fluctuations in our earnings due to market supply and prices and demand for our products; climate change, or legal, regulatory, or market measures to address climate change; Environmental, Social and Governance (“ESG”) issues, including those related to climate change and sustainability; increases in labor, personnel and benefits costs; increases in commodity or raw product costs, such as fuel and chemical costs; transportation risks; any change or the classification or valuation methods employed by county property appraisers related to our real estate taxes; liability for the use of fertilizers, pesticides, herbicides and other potentially hazardous substances; compliance with applicable environmental laws; loss of key employees; material weaknesses and other control deficiencies relating to our internal control over financial reporting; macroeconomic conditions, such as rising inflation, the deadly conflicts in Ukraine and Israel; system security risks, data protection breaches, cyber-attacks and systems integration issues; our indebtedness and ability to generate sufficient cash flow to service our debt obligations; higher interest expenses as a result of variable rates of interest for our debt; our ability to continue to pay cash dividends; and the other factors described under the sections “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended September 30, 2023 filed with the Securities and Exchange Commission (the “SEC”) on December 6, 2023 (the “2023 Annual Report on Form 10-K”). Except as required by law, we do not undertake an obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments, or otherwise.
As used in this Quarterly Report, unless otherwise specified or the context otherwise requires, references to “we,” “us,” “our,” the “Company” and “Alico” refer to the operations of Alico, Inc. and its consolidated subsidiaries.


ALICO, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)
March 31,
2024
September 30,
2023
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents$5,966 $1,062 
Accounts receivable, net9,373 712 
Inventories29,719 52,481 
Income tax receivable 1,200 
Assets held for sale4,891 1,632 
Prepaid expenses and other current assets1,634 1,718 
Total current assets51,583 58,805 
Restricted cash 2,630 
Property and equipment, net360,209 361,849 
Goodwill2,246 2,246 
Other non-current assets2,735 2,823 
Total assets$416,773 $428,353 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$6,886 $6,311 
Accrued liabilities3,381 5,363 
Current portion of long-term debt1,410 2,566 
Income tax payable8,021  
Other current liabilities515 825 
Total current liabilities20,213 15,065 
Long-term debt, net82,970 101,410 
Lines of credit 24,722 
Deferred income tax liabilities, net36,880 36,410 
Other liabilities304 369 
Total liabilities140,367 177,976 
Commitments and Contingencies (Note 12)
Stockholders’ equity:
Preferred stock, no par value, 1,000,000 shares authorized; none issued
  
Common stock, $1.00 par value, 15,000,000 shares authorized; 8,416,145 shares issued and 7,620,130 and 7,610,551 shares outstanding at March 31, 2024 and September 30, 2023, respectively
8,416 8,416 
Additional paid in capital20,109 20,045 
Treasury stock, at cost, 796,015 and 806,341 shares held at March 31, 2024 and September 30, 2023, respectively
(26,969)(27,274)
Retained earnings270,182 243,804 
Total Alico stockholders’ equity271,738 244,991 
Noncontrolling interest4,668 5,386 
Total stockholders’ equity276,406 250,377 
Total liabilities and stockholders’ equity$416,773 $428,353 
    
See accompanying notes to the unaudited condensed consolidated financial statements.
1

ALICO, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in thousands, except per share amounts)
Three Months Ended
March 31,
Six Months Ended
March 31,
2024202320242023
Operating revenues:
Alico Citrus$17,762 $20,937 $31,354 $31,205 
Land Management and Other Operations351 357 744 677 
Total operating revenues18,113 21,294 32,098 31,882 
Operating expenses:
Alico Citrus36,142 27,520 64,249 41,815 
Land Management and Other Operations129 102 262 196 
Total operating expenses36,271 27,622 64,511 42,011 
Gross profit(18,158)(6,328)(32,413)(10,129)
General and administrative expenses2,321 2,667 5,593 5,176 
Loss from operations(20,479)(8,995)(38,006)(15,305)
Other income (expense), net:
Interest income155  250  
Interest expense(663)(1,274)(2,268)(2,422)
Gain on property and equipment4 1,574 77,029 4,763 
Other income, net 30  30 
Total other income (expense), net(504)330 75,011 2,371 
(Loss) income before income taxes(20,983)(8,665)37,005 (12,934)
Income tax (benefit) provision(4,970)(534)10,582 (1,617)
Net (loss) income (16,013)(8,131)26,423 (11,317)
Net loss attributable to noncontrolling interests209 344 718 380 
Net (loss) income attributable to Alico, Inc. common stockholders$(15,804)$(7,787)$27,141 $(10,937)
Per share information attributable to Alico, Inc. common stockholders:
(Loss) earnings per common share:
Basic$(2.07)$(1.02)$3.56 $(1.44)
Diluted$(2.07)$(1.02)$3.56 $(1.44)
Weighted-average number of common shares outstanding:
Basic7,6207,5997,6187,596
Diluted7,6207,5997,6187,596
Cash dividends declared per common share$0.05 $0.05 $0.10 $0.10 

See accompanying notes to the unaudited condensed consolidated financial statements.
2

ALICO, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED)
(in thousands)
For the Three Months Ended March 31, 2024
Common stockAdditional
Paid In
Capital
Treasury
Stock
Retained
Earnings
Total
Alico, Inc.
Equity
Non-
controlling
Interest
Total
Equity
SharesAmountSharesAmount
Balance at December 31, 20238,416$8,416 $20,064 800$(27,099)$286,368 $287,749 $4,877 $292,626 
Net loss— — — — (15,804)(15,804)(209)(16,013)
Dividends ($0.05/share)
— — — — (382)(382)— (382)
Stock-based compensation— 45 (4)130 — 175 — 175 
Balance at March 31, 20248,416$8,416 $20,109 796$(26,969)$270,182 $271,738 $4,668 $276,406 
For the Six Months Ended March 31, 2024
Common stockAdditional
Paid In
Capital
Treasury
Stock
Retained
Earnings
Total
Alico, Inc.
Equity
Non-
controlling
Interest
Total
Equity
SharesAmountSharesAmount
Balance at September 30, 20238,416$8,416 $20,045 806$(27,274)$243,804 $244,991 $5,386 $250,377 
Net income (loss)— — — — 27,141 27,141 (718)26,423 
Dividends ($0.10/share)
— — — — (763)(763)— (763)
Stock-based compensation— 64 (10)305 — 369 — 369 
Balance at March 31, 20248,416$8,416 $20,109 796$(26,969)$270,182 $271,738 $4,668 $276,406 
    
3

For the Three Months Ended March 31, 2023
Common stockAdditional
Paid In
Capital
Treasury
Stock
Retained
Earnings
Total
Alico, Inc.
Equity
Non-
controlling
Interest
Total
Equity
SharesAmountSharesAmount
Balance at December 31, 20228,416$8,416 $19,943 823$(27,802)$239,960 $240,517 $5,087 $245,604 
Net loss— — — — (7,787)(7,787)(344)(8,131)
Dividends ($0.05/share)
— — — — (380)(380)— (380)
Stock-based compensation— 42 (6)186 — 228 — 228 
Balance at March 31, 20238,416$8,416 $19,985 817$(27,616)$231,793 $232,578 $4,743 $237,321 
For the Six Months Ended March 31, 2023
Common stock
Additional Paid In
Capital
Treasury
Stock
Retained
Earnings
Total
Alico, Inc.
Equity
Non-
controlling
Interest
Total
Equity
SharesAmountSharesAmount
Balance at September 30, 20228,416$8,416 $19,784 829$(27,948)$243,490 $243,742 $5,123 $248,865 
Net loss— — (10,937)(10,937)(380)(11,317)
Dividends ($0.10/share)
— — (760)(760)— (760)
Stock-based compensation— 201 (12)332— 533 — 533 
Balance at March 31, 20238,416$8,416 $19,985 817$(27,616)$231,793 $232,578 $4,743 $237,321 

See accompanying notes to the unaudited condensed     consolidated financial statements.
4

ALICO, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in thousands)
Six Months Ended
March 31,
20242023
Net cash used in operating activities:
Net income (loss)$26,423 $(11,317)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation, depletion and amortization7,602 7,847 
Amortization of debt issue costs149 71 
Gain on sale of property and equipment(77,029)(4,763)
Loss on disposal of long-lived assets938 4,032 
Inventory net realizable value adjustment28,549 1,616 
Deferred income tax provision470 52 
Stock-based compensation expense369 533 
Other68 18 
Changes in operating assets and liabilities:
Accounts receivable(8,661)(8,646)
Inventories(5,912)2,659 
Prepaid expenses(13)(10)
Income tax receivable1,200 (1,739)
Other assets99 211 
Accounts payable and accrued liabilities(1,647)2,681 
Income taxes payable8,021  
Other liabilities(367)(355)
Net cash used in operating activities(19,741)(7,110)
Cash flows from investing activities:
Purchases of property and equipment(11,520)(8,445)
Acquisition of citrus groves (29)
Net proceeds from sale of property and equipment 79,132 4,927 
Notes receivable (570)
Change in deposits on purchase of citrus trees(375)6 
Net cash provided by (used in) investing activities67,237 (4,111)
Cash flows from financing activities:
Repayments on revolving lines of credit(44,032)(24,995)
Borrowings on revolving lines of credit19,310 41,189 
Principal payments on term loans(19,737)(1,517)
Dividends paid(763)(4,173)
Net cash (used in) provided by financing activities(45,222)10,504 
Net increase (decrease) in cash and restricted cash2,274 (717)
Cash and cash equivalents and restricted cash at beginning of the period3,692 865 
Cash and cash equivalents and restricted cash at end of the period$5,966 $148 
Non-cash investing activities:
Assets received in exchange for services$85 $ 
Trees delivered in exchange for prior tree deposits$282 $ 
See accompanying notes to the unaudited condensed consolidated financial statements.
5

ALICO, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Dollars in thousands, except per share and per acre amounts)
Note 1. Description of Business and Basis of Presentation
Description of Business
Alico, Inc., together with its subsidiaries (collectively, “Alico”, the “Company”, “we”, “us” or “our”), is a Florida agribusiness and land management company owning approximately 54,500 acres of land and mineral rights throughout Florida. Alico holds these mineral rights on substantially all its owned acres, with additional mineral rights on other acres. The Company manages its land based upon its primary usage, and reviews its performance based upon two primary classifications: (i) Alico Citrus and (ii) Land Management and Other Operations. Financial results are presented based upon these two business segments.
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements, which are referred to herein as the “Financial Statements”, of Alico have been prepared pursuant to the rules and regulations for reporting on Form 10-Q. Accordingly, these Financial Statements do not include all of the disclosures required for complete annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). As such, these Financial Statements should be read in conjunction with the Company’s audited Consolidated Financial Statements and Notes thereto included in the Company’s Annual Report on Form 10-K for the year ended September 30, 2023, as filed with the SEC on December 6, 2023 (the “2023 Annual Report on Form 10-K”).
Operating results for the interim periods presented are not necessarily indicative of the results that may be expected for the full year. However, in the opinion of management, such Financial Statements include all adjustments, consisting solely of normal recurring adjustments, necessary to present fairly the financial position, results of operations and cash flows for the periods presented in conformity with U.S. GAAP applicable to interim periods. Certain reclassifications have been made to prior year amounts to conform to the current year presentation.
Seasonality
The Company is primarily engaged in the production of fruit for sale to citrus markets, which is of a seasonal nature, and subject to the influence of natural phenomena and wide price fluctuations. Historically, the second and third quarters of Alico’s fiscal year produce most of the Company’s annual revenue. Working capital requirements are typically greater in the first and fourth quarters of the fiscal year, coinciding with harvesting cycles. Because of the seasonality of the business, results for any quarter are not necessarily indicative of the results that may be achieved for the full fiscal year.
Note 2. Summary of Significant Accounting Policies
The Company’s significant accounting policies are fully described in Note 2 – Summary of Significant Accounting Policies in our 2023 Annual Report on Form 10-K.
Revenue Recognition
The Company recognizes revenue under Financial Accounting Standards Board – Accounting Standards Codification (“ASC”) 606. The core principle of the revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle:

Step 1: Identify the contract with the customer
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligations in the contract
Step 5: Recognize revenue when the company satisfies a performance obligation
6

Revenues are derived from the sale of processed fruit, fresh fruit, other citrus revenue, revenues from grove management services, leasing revenue and other resource revenues. Most of the revenue is generated from the sale of citrus fruit to processing facilities, fresh fruit sales and grove management services.
For fruit sales, the Company recognizes revenue in the amount it expects to be entitled to be paid, determined when control of the products or services is transferred to its customers, which occurs upon delivery of and acceptance of the fruit by the customer and when the Company has a right to payment.
For the sale of fruit, the Company has identified one performance obligation, which is the delivery of fruit to the processing facility of the customer (or harvesting of the citrus in the case of fresh fruit) for each separate variety of fruit identified in the respective contract with the respective customer. The Company initially recognizes revenue in an amount which is estimated based on contractual and market prices, if such market price falls within the range (known as “floor” and “ceiling” prices) identified in the specific respective contracts. Additionally, the Company also has a contractual agreement whereby revenue is determined based on applying a cost-plus structure methodology. As such, since all these contracts contain elements of variable consideration, the Company recognizes this variable consideration by using the expected value method. On a quarterly basis, management reviews the reasonableness of the revenues accrued based on buyers’ and processors’ advances to growers, cash and futures markets and experience in the industry. Adjustments are made throughout the year to these estimates as more current relevant industry information becomes available. Differences between the estimates and the final realization of revenues at the close of the harvesting season can result in either an increase or decrease to reported revenues.
(in thousands)Three Months Ended
March 31,
Six Months Ended
March 31,
2024202320242023
Revenue recognized at a point-in-time $16,974 $20,575 $29,959 $30,654 
Revenue recognized over time1,139 719 2,139 1,228 
Total$18,113 $21,294 $32,098 $31,882 
Receivables under contracts, whereby pricing is based on contractual and market prices, are primarily paid at the floor amount and are collected within seven days after the harvest week. Any adjustments to pricing as a result of changes in market prices are generally collected or paid thirty to sixty days after final market pricing is published. Receivables under those contracts where pricing is based off a cost-plus structure methodology are paid at the final prior year rate. Any adjustments to pricing because of the cost-plus calculation are collected or paid upon finalization of the calculation and agreement by both parties. As of March 31, 2024, and September 30, 2023, the Company had total receivables relating to sales of citrus of $8,604 and $394, respectively, recorded in Accounts Receivable, net, in the Condensed Consolidated Balance Sheets.
For grove management services, the Company has identified one performance obligation, which is the management of the third party’s groves. Grove management services include caretaking of the citrus groves, harvesting and hauling of citrus, management and coordination of citrus sales and other related activities. The Company is reimbursed for expenses incurred in the execution of its management duties and the Company receives a per acre management fee. The Company recognizes operating revenue, including a management fee, and corresponding operating expenses when such services are rendered and consumed.
The Company recorded $1,395 and $551 of operating revenue relating to these grove management services, including the management fee, in the six months ended March 31, 2024 and 2023, respectively, for this group of third-party grove owners noted above. The Company recorded $890 and $307 of operating expenses relating to these grove management services in the six months ended March 31, 2024 and 2023, respectively, for this group of third-party grove owners noted above.
Disaggregated Revenue
Revenues disaggregated by significant products and services for the three and six months ended March 31, 2024 and 2023 are as follows:
7

(in thousands)Three Months Ended
March 31,
Six Months Ended
March 31,
2024202320242023
Alico Citrus
Early and Mid-Season$2,139 $2,368 $14,534 $11,954 
Valencias14,732 17,930 14,732 17,930 
Fresh Fruit and Other103 277 693 770 
Grove Management Services788 362 1,395 551 
Total$17,762 $20,937 $31,354 $31,205 
Land Management and Other Operations
Land and Other Leasing$278 $273 $592 $554 
Other73 84 152 123 
Total$351 $357 $744 $677 
Total Revenues$18,113 $21,294 $32,098 $31,882 
Cash and Cash Equivalents
The Company considers cash in banks and highly liquid instruments with an original maturity to the Company of three months or less to be cash and cash equivalents. At various times throughout the year ended September 30, and as of September 30, 2023, some accounts held at financial institutions were in excess of the federally insured limit of $250. The Company held U.S. Treasury Bills with an amortized cost of $2,522 at March 31, 2024. These Treasury Bills are classified as Held to Maturity based on the Company's intent and ability to hold these securities to maturity. The Company has not experienced any losses on these accounts and believes credit risk to be minimal.
Fair Value Measurements
The Company categorizes its financial instruments measured at fair value into a fair value hierarchy that prioritizes the inputs used in pricing the asset or liability into a three tier fair value hierarchy which prioritizes the inputs used in measuring fair value as follows:
Level 1 – Observable inputs such as quoted market prices for identical assets and liabilities in active markets;
Level 2 – Inputs, other than the quoted prices for identical assets and liabilities in active markets, for which significant other observable market inputs are readily available; and
Level 3 – Unobservable inputs in which there is little or no market data, such as internally developed valuation models which require the reporting entity to develop its own assumptions.
The carrying amounts of the Company’s financial instruments, including cash, restricted cash, accounts receivable, accounts payable and accrued liabilities approximate their fair values due to the short term and immediate nature of these financial instruments. The carrying amounts and estimated fair values (Level 2) of debt instruments are as follows:
8

(in thousands)March 31, 2024September 30, 2023
Carrying AmountEstimated Fair ValueCarrying AmountEstimated Fair Value
Corporate debt
Current portion of long-term debt$1,410 $1,367 $2,566 $2,325 
Long-term debt$83,452 $75,934 $126,753 $115,851 
As of March 31, 2024 and September 30, 2023 the Company did not have any assets held for sale that had been measured at fair value on a non-recurring basis.
Accounting for government grants
The Company recognizes government grants when there is reasonable assurance that: (1) the grant will be received and (2) all conditions will be met. For income-based grants, the Company recognizes the income on a systemic basis over the periods in which it recognizes as expense the related costs for which the grant was intended to compensate.
In the six months ended March 31, 2024, the Company recognized $1,805 of grant money from the Citrus Research and Field Trial Foundation’s (“CRAFT”) program to assist citrus growers in the State of Florida using Oxytetracycline (“OTC”) and other approved therapies to combat the effect of “greening” of their citrus trees. These funds were recognized as a component of Inventories ($235 at March 31, 2024) on the Company’s Condensed Consolidated Balance Sheet and will be recognized as a reduction of Operating expenses ($1,570 during the six months ended March 31, 2024) on its Condensed Consolidated Statement of Operations as its fruit is sold, in order to align it to the period over which the expense related to the OTC treatments is recognized. These grant monies were received in exchange for providing certain historical data to the CRAFT Foundation about the Company’s citrus groves. The Company may continue, but is not obligated, to participate in future CRAFT programs on the effects of the use of OTC on its Citrus Trees. In January 2024, the Company collected these grant monies from CRAFT.

Concentrations
Accounts receivable from the Company’s major customer as of March 31, 2024 and September 30, 2023, and revenue from such customer for the six months ended March 31, 2024 and 2023, are as follows:

(in thousands)Accounts ReceivableRevenue% of Total Revenue
March 31,September 30,March 31,March 31,
202420232024202320242023
Tropicana$8,106 $ $28,857 $28,065 89.9 %88.0 %
The citrus industry is subject to various factors over which growers have limited or no control, including weather conditions, disease, pestilence, water supply and market price fluctuations. Market prices are highly sensitive to aggregate domestic and foreign crop sizes, as well as factors including, but not limited to, weather and competition from foreign countries.
The overall decrease in Tropicana revenue, as a percentage of sales, was primarily due to an increase in processed fruit sales during the current quarter.
Segments
Operating segments are defined in the criteria established under 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 the Company’s chief operating decision maker (“CODM”) in deciding how to assess performance and allocate resources. The Company’s CODM assesses performance and allocates resources based on two operating segments: (i) Alico Citrus and (ii) Land Management and Other Operations.
9

Principles of Consolidation
The Financial Statements include the accounts of Alico and the accounts of all the subsidiaries in which a controlling interest is held by the Company. Under U.S. GAAP, consolidation is generally required for investments of more than 50% of the outstanding voting stock of an investee, except when control is not held by the majority owner. The Company’s subsidiaries include: Alico Land Development, Inc., Alico-Agri, Ltd., Alico Plant World, LLC, Alico Fruit Company, LLC, Alico Citrus Nursery, LLC, Alico Chemical Sales, LLC, Alico Ranch, LLC, Alico Natural Resources, LLC, 734 Citrus Holdings 1, LLC and subsidiaries (“Silver Nip”), Alico Skink Mitigation, LLC and Citree Holdings 1, LLC (“Citree”). The Company considers the criteria established under FASB ASC Topic 810, “Consolidations” in its consolidation process. All significant intercompany balances and transactions have been eliminated in consolidation.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities as of the date of the accompanying Financial Statements, the disclosure of contingent assets and liabilities in the Financial Statements and the accompanying Notes, and the reported amounts of revenues and expenses and cash flows during the periods presented. Actual results could differ from those estimates. The Company evaluates estimates on an ongoing basis. The estimates are based on current and expected economic conditions, historical experience, the experience and judgment of the Company’s management and various other specific assumptions that the Company believes to be reasonable.
Noncontrolling Interest in Consolidated Subsidiary
The Financial Statements include all assets and liabilities of the less-than-100%-owned subsidiary the Company controls, Citree. Accordingly, the Company has recorded a noncontrolling interest in the equity of such entity. Citree had net losses of $427 and $703 for the three months ended March 31, 2024 and 2023, respectively, and net losses of $1,466 and $776 for the six months ended March 31, 2024 and 2023, respectively, of which 51% is attributable to the Company.
Recent Accounting Pronouncements
In November 2023, the FASB issued ASU 2023-07, “Improvements to Reportable Segment Disclosures,” which amends Topic 280 primarily through enhanced disclosures about significant segment expenses. The amendments are effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. ASU 2023-07 will become effective for us on October 1, 2024. We are currently evaluating the impact of the adoption of this accounting pronouncement on our Consolidated Financial Statements.
In December 2023, the FASB issued ASU 2023-09, “Improvements to Income Tax Disclosures,” which amends Topic 740 primarily through enhanced disclosures about an entity’s tax risks and tax planning. The amendments are effective for public business entities in annual periods beginning after December 15, 2024, with early adoption permitted on a prospective or retrospective basis. ASU 2023-09 will become effective for us on October 1, 2025. We are currently evaluating the impact of the adoption of this accounting pronouncement on our Consolidated Financial Statements.
Recently Adopted Accounting Pronouncements
None this period.
Note 3. Inventories
Inventories consist of the following at March 31, 2024 and September 30, 2023:
(in thousands)March 31,
2024
September 30,
2023
Unharvested fruit crop on the trees$27,352 $50,699 
Other2,367 1,782 
Total inventories$29,719 $52,481 
The Company records its inventory at the lower of cost or net realizable value.
10

For the six months ended March 31, 2024 and March 31, 2023, the Company recorded $28,549 and $1,616, respectively, for adjustments to reduce inventory to net realizable value. The adjustment for the six months ended March 31, 2024 was due to significantly lower than anticipated harvests of the Early and Mid-Season and Valencia crops, as a result of the continued recovery from the impacts of Hurricane Ian.
The Company received no insurance proceeds relating to Hurricane Ian during the three and six months ended March 31, 2024. In the three and six months ended March 31, 2023, the Company received insurance proceeds relating to Hurricane Ian of approximately $4,759 for crop claims, which have been recorded in operating expenses.
In the six months ended March 31, 2024 and March 31, 2023, the Company received $0 and approximately $1,266 under the Florida Citrus Recovery Block Grant (“CRBG”) program. These federal relief proceeds are included as a reduction to operating expenses in the Condensed Consolidated Statements of Operations.
In December 2022, the Consolidated Appropriations Act was signed into law by the federal government; however, the details of the mechanism and funding of any Hurricane Ian relief still remains unclear and, if available, the extent to which the Company will be eligible. The Company intends to take advantage of any such available programs as and when they become available. The Company is currently working with Florida Citrus Mutual, the industry trade group, and government agencies on the federal relief programs available as part of the Consolidated Appropriations Act.
Note 4. Assets Held for Sale
In accordance with its strategy to dispose of non-core and under-performing assets, the following assets have been classified as assets held for sale at March 31, 2024 and September 30, 2023:
(in thousands)Carrying Value
March 31,
2024
September 30,
2023
Ranch$69 $1,632 
Alico Citrus4,822  
Total assets held for sale$4,891 $1,632 

During the six months ended March 31, 2024, the Company consummated the sale of approximately 17,556 acres of land for $79,090 and recognized a gain of $77,025, including 17,229 acres of the Alico Ranch to the State of Florida for $77,631 in gross proceeds. A portion of the proceeds from these sales was used to repay the outstanding balance on the Company’s working capital line of credit (“WCLC”) with Rabo Agrifinance, Inc. (“Rabo”) and the $19,094 Met Life Variable-Rate Term Loans, plus accrued interest. In addition, the Company's entered into an agreement to sell one of its underperforming groves. See Note 14. “Subsequent Events”.
During the six months ended March 31, 2023, the Company sold approximately 888 acres to various third parties for $4,883 and recognized a gain of $4,689 (including approximately 85 acres to Mr. John E. Kiernan, the Company’s President and CEO, on October 20, 2022, for $439 ($5,161 per acre). See Note 13. “Related Party Transactions” for further information.
Unless otherwise noted above, during the three and six months ended March 31, 2024 and March 31, 2023, the proceeds from the sale of land were used for general corporate purposes.
11

Note 5. Property and Equipment, Net
Property and equipment, net consists of the following at March 31, 2024 and September 30, 2023:
(in thousands)March 31,
2024
September 30,
2023
Citrus trees$325,427 $328,421 
Equipment and other facilities57,464 57,779 
Buildings and improvements6,515 7,081 
Total depreciable properties389,406 393,281 
Less: accumulated depreciation and depletion(143,238)(144,150)
Net depreciable properties246,168 249,131 
Land and land improvements114,041 112,718 
Property and equipment, net$360,209 $361,849 

Note 6. Accrued Liabilities
Accrued liabilities consist of the following at March 31, 2024 and September 30, 2023:
(in thousands)March 31,
2024
September 30,
2023
Accrued employee wages and benefits$1,267 $1,007 
Accrued interest566 1,102 
Accrued insurance 345 
Professional fees253 307 
Accrued dividends381 381 
Other accrued liabilities274 87 
Ad valorem taxes640 2,134 
Total accrued liabilities$3,381 $5,363 
Note 7. Long-Term Debt and Lines of Credit
The following table summarizes long-term debt and related deferred financing costs, net of accumulated amortization at March 31, 2024 and September 30, 2023:
(in thousands)March 31, 2024September 30, 2023
Long-term debt, net of current portion:
Met Fixed-Rate Term Loans$70,000 $70,000 
Met Variable-Rate Term Loans 19,094 
Met Citree Term Loan3,825 3,888 
Pru Loans A & B11,037 11,615 
Deferred financing fees(482)(621)
84,380 103,976 
Less current portion1,410 2,566 
Long-term debt$82,970 $101,410 
12

The following table summarizes lines of credit and related deferred financing costs, net of accumulated amortization at March 31, 2024 and September 30, 2023:
(in thousands)March 31, 2024September 30, 2023
Lines of Credit:
RLOC$ $ 
WCLC 24,722 
Deferred financing fees(87)(95)
Lines of Credit$(87)$24,627 
Interest costs expensed and capitalized were as follows:
(in thousands)Three Months Ended
March 31,
Six Months Ended
March 31,
2024202320242023
Interest expense$663 $1,274 $2,268 $2,422 
Interest capitalized292 333 595 614 
Total$955 $1,607 $2,863 $3,036 
Debt
The Company’s credit facilities consist of fixed interest rate term loans originally in the amount of $125,000 (“Met Fixed-Rate Term Loans”) variable interest rate term loans originally in the amount of $57,500 (“Met Variable-Rate Term Loans”), a $25,000 revolving line of credit (“RLOC”) with Metropolitan Life Insurance Company and New England Life Insurance Company (collectively “Met”), and a $70,000 WCLC with Rabo. At March 31, 2024 and September 30, 2023, $25,000 and $25,000 were available under the RLOC, respectively, and $69,752 and $45,030 was available under the WCLC, respectively.
The term loans and RLOC are secured by real property. The security for the term loans and RLOC consists of approximately 38,200 gross acres of citrus groves. The WCLC is collateralized by the Company’s current assets and certain other personal property owned by the Company.
The Met Fixed-Rate Term Loans, which bear interest at 3.85%, are interest-only with a balloon payment at maturity on November 1, 2029.
The Met Variable-Rate Term Loans are subject to quarterly principal payments of $406 and bear interest at the One Month Term Secured Overnight Financing Rate ("SOFR") plus 175 basis points (the “SOFR spread”) with a maturity date of November 1, 2029. The SOFR spread was subject to adjustment by Met every 2 years beginning May 1, 2023, until maturity. As of November 1, 2023, the interest rate on the Met Variable-Rate Term Loans was 7.56% per annum, payable quarterly, until December 26, 2023, when Company repaid the outstanding balance of $19,094, plus accrued interest, on these loans. The interest rate on the Met Variable-Rate Term Loans was 7.52% per annum, payable quarterly, as of September 30, 2023. Effective February 17, 2023, the Company had agreed to defer the next three quarterly principal payments which were previously due May 2023, August 2023 and November 2023 to the maturity date of the loan.
With respect to the RLOC, for the fiscal year ended September 30, 2023, the SOFR-based spread was SOFR plus 220 basis points and was subject to adjustment by the lender every 2 years beginning May 1, 2023, until maturity on November 1, 2029. The RLOC is subject to an annual commitment fee of 25 basis points on the unused portion of the line of credit and is available for funding general corporate purposes. The variable interest rate was 7.56% per annum and 7.52% per annum as of March 31, 2024 and September 30, 2023, respectively.
The WCLC is a revolving credit facility and is available for funding working capital and general corporate requirements. The WCLC agreement was amended on October 27, 2022, and the primary terms of the amendment were an extension of the maturity to November 1, 2025, and the conversion of the interest rate from LIBOR plus a spread to SOFR plus a spread, which spread is adjusted quarterly, based on the Company’s debt service coverage ratio for the preceding quarter and can vary from 175 to 250 basis points. There were no changes to the commitment amount. The rate at September 30, 2023 was SOFR plus 175 basis points, or 7.08% and 7.07% per annum, respectively, as of March 31, 2024 and
13

September 30, 2023. The WCLC agreement provides for Rabo to issue up to $2,000 in letters of credit on the Company’s behalf, of which $248 and $248 were issued as of March 31, 2024 and September 30, 2023, respectively.
The WCLC is subject to a quarterly commitment fee on the daily unused availability under the line computed as the commitment amount less the aggregate of the outstanding loans and outstanding letters of credit. The commitment fee is adjusted quarterly based on The Company's debt service coverage ratio for the preceding quarter and can vary from a minimum of 20 basis points to a maximum of 30 basis points. Commitment fees were charged at 20 basis points; except from May 18, 2023 through August 8, 2023, when they were charged at 30 basis points.
These credit facilities noted above are subject to various covenants including the following financial covenants: (i) minimum debt service coverage ratio of 1.10 to 1.00; (ii) tangible net worth of at least $160,000 increased annually by 10% of consolidated net income for the preceding years, or $174,628 for the year ended September 30, 2023; (iii) minimum current ratio of 1.50 to 1.00; (iv) debt to total assets ratio not greater than .625 to 1.00, and; (v) solely in the case of the WCLC, a limit on capital expenditures of $30,000 per fiscal year. As of March 31, 2024, the Company was in compliance with all of the financial covenants.
Credit facilities also include a Met Life term loan collateralized by 1,200 gross acres of citrus grove owned by Citree (“Met Citree Loan”). This is a $5,000 credit facility that bears interest at a fixed rate of 5.28% per annum. Principal and interest payments are made on a quarterly basis. Effective February 17, 2023, the Company agreed to defer the next three quarterly principal payments which were previously due May 2023, August 2023 and November 2023 to the maturity date of the loan. The loan matures in February 2029.
Silver Nip Citrus Debt
There are two fixed-rate term loans, with an original combined balance of $27,550, which bear interest at 5.35% per annum (“Pru Loans A & B”). Principal of $290 is payable quarterly, together with accrued interest. The loans are collateralized by 5,700 acres of citrus groves in Collier, Hardee, Highlands and Polk Counties, Florida and mature on June 1, 2029 and June 1, 2033, respectively.
The Pru Loans A & B are subject to an annual financial covenant whereby the consolidated current ratio requirement is 1.00 to 1.00. Silver Nip Citrus was in compliance with the current ratio covenant as of March 31, 2024.
Deferred Financing Costs
Costs incurred to obtain financing are deferred and amortized to “Interest expense” in the condensed consolidated statement of operations over the related financing period using the effective interest method. The Company records debt issuance costs as a direct reduction of the carrying value of the related debt. Financing costs related to the undrawn RLOC are included in "Other non-current assets" in the condensed consolidated balance sheets.
Note 8. Income Taxes
Our effective tax rate for the six months ended March 31, 2024 was a provision of 28.6%. Such rate differed from the Federal Statutory rate of 21.0% primarily due to state income taxes and a change in the valuation allowance for the charitable contribution carryover.
Our effective tax rate for the six months ended March 31, 2023 was a provision of 12.5%. Such rate differed from the Federal Statutory rate of 21.0% primarily due to the valuation allowance booked for the charitable contribution carryover.
Note 9. Segment Information
Segments
Total revenues represent sales to unaffiliated customers, as reported in the Condensed Consolidated Statements of Operations. Goods and services produced by these segments are sold to wholesalers and processors in the United States, who prepare the products for consumption. The Company evaluates the segments’ performance based on direct margins (gross profit) from operations before general and administrative expenses, interest expense, other income (expense) and income taxes, not including nonrecurring gains and losses.
14

Information by operating segment is as follows:
(in thousands)Three Months Ended
March 31,
Six Months Ended
March 31,
2024202320242023
Revenues:
Alico Citrus$17,762 $20,937 $31,354 $31,205 
Land Management and Other Operations351 357 744 677 
Total revenues18,113 21,294 32,098 31,882 
Operating expenses:
Alico Citrus36,142 27,520 64,249 41,815 
Land Management and Other Operations129 102 262 196 
Total operating expenses36,271 27,622 64,511 42,011 
Gross profit:
Alico Citrus(18,380)(6,583)(32,895)(10,610)
Land Management and Other Operations222 255 482 481 
Total gross profit$(18,158)$(6,328)$(32,413)$(10,129)
Depreciation, depletion and amortization:
Alico Citrus$3,724 $3,777 $7,451 $7,604 
Land Management and Other Operations17 9 37 18 
Other Depreciation, Depletion and Amortization57 111 114 225 
Total depreciation, depletion and amortization$3,798 $3,897 $7,602 $7,847 
(in thousands)March 31,
2024
September 30,
2023
Assets:
Alico Citrus$402,546 $415,030 
Land Management and Other Operations12,811 11,722 
Other Corporate Assets1,416 1,601 
Total Assets$416,773 $428,353 

15

The reconciliations of segment gross profit (loss) to consolidated income (loss) before income taxes are as follows:
Three Months Ended
March 31,
Six Months Ended
March 31,
2024202320242023
Alico Citrus$(18,380)$(6,583)$(32,895)$(10,610)
Land Management and Other Operations222 255 482 481 
Segment gross loss (18,158)(6,328)(32,413)(10,129)
General and administrative expenses2,321 2,667 5,593 5,176 
Loss from operations(20,479)(8,995)(38,006)(15,305)
Other income (expense), net:
Interest income155  250  
Interest expense(663)(1,274)(2,268)(2,422)
Gain on property and equipment4 1,574 77,029 4,763 
Other income, net 30  30 
Total other income (expense), net(504)330 75,011 2,371 
(Loss) income before income taxes$(20,983)$(8,665)$37,005 $(12,934)
Note 10. Leases
The Company determines whether an arrangement is a lease at inception. The Company’s leases consist of operating lease arrangements for certain office space, tractor leases and IT facilities. When these lease arrangements include lease and non-lease components, the Company accounts for lease components and non-lease components (e.g., common area maintenance) separately based on their relative standalone prices.
Any lease arrangements with an initial term of one year or less are not recorded on the Company’s Condensed Consolidated Balance Sheets, and it recognizes lease cost for these lease arrangements on a straight-line basis over the applicable lease term. Many lease arrangements provide the options to exercise one or more renewal terms or to terminate the lease arrangement. The Company includes these options when it will be reasonably certain to exercise them in the lease term used to establish the right-of-use assets and lease liabilities. Generally, lease agreements do not include an option to purchase the leased asset, residual value guarantees or material restrictive covenants.
As most of our lease arrangements do not provide an implicit interest rate, the Company applies an incremental borrowing rate based on the information available at the commencement date of the lease arrangement to determine the present value of lease payments.
No lease costs associated with finance leases and sale-leaseback transactions occurred and our lease income associated with lessor and sublease arrangements are not material to our Condensed Consolidated Financial Statements.
Our operating leases cost components are reported in our Condensed Consolidated Statements of Operations as follows:
(in thousands)Three Months Ended March 31,Six Months Ended March 31,
Operating lease components2024202320242023
Operating leases costs recorded in general and administrative expenses$37 $31 $74 $61 
The weighted-average remaining lease term and weighted-average discount rate for our operating leases are as follows:
March 31, 2024
Weighted-average remaining lease term2.4 years
Weighted-average discount rate5.52 %
16

Note 11. Stock-based Compensation
Effective January 27, 2015, the Company’s Board of Directors adopted the 2015 Stock Incentive Plan (the “2015 Plan”) which provides for up to 1,250 common shares available for issuance to provide a long-term incentive plan for officers, employees, directors and/or consultants to directly link incentives to stockholder value. The 2015 Plan was approved by the Company’s stockholders in February 2015. The Company’s 2015 Plan provides for grants to eligible participants in various forms including restricted shares of the Company’s common stock and stock options. Awards are discretionary and are determined by the Compensation Committee of the Board of Directors. Awards vest based upon service conditions. Non-vested restricted shares generally vest over requisite service periods of one to six years from the date of grant.
The Company recognizes stock-based compensation expense for (i) Board of Directors fees (generally paid in treasury stock), and (ii) other awards under the 2015 Plan (paid in restricted stock and stock options). Stock-based compensation expense is recognized in general and administrative expenses in the Condensed Consolidated Statements of Operations.
Stock Compensation – Board of Directors
The Board of Directors can either elect to receive stock compensation or cash for their fees for services provided. Stock-based compensation expense relating to the Board of Directors fees was $119 and $257 for the three and six months ended March 31, 2024, respectively, and $156 and $313 for the three and six months ended March 31, 2023.
Restricted Stock
Stock compensation expense related to the Restricted Stock was $56 and $112 for the three and six months ended March 31, 2024, respectively, and $61 and $191 for the three and six months ended March 31, 2023, respectively. There was $264 and $376 of total unrecognized stock compensation costs related to unvested stock compensation for the Restricted Stock grants at March 31, 2024 and September 30, 2023, respectively.
Restricted Stock Awards
Restricted Stock AwardsSharesWeighted-
Average
Grant Date
Fair Value
Outstanding at September 30, 2023 17,540$37.82 
Vested (35)32.30 
Forfeited (5)32.30 
Outstanding at March 31, 2024 (a)
17,500$37.82 
a.The weighted average remaining contractual term is 1.3 years and the aggregate intrinsic value of RSAs expected to vest is $512.

Stock Option Grants
Number of
Options
Weighted
Average
Exercise
Price
Weighted
Average
Remaining
Contractual
Term
(years)
Aggregate
Intrinsic
Value
Vested and outstanding – March 31, 202438,000$33.75 2.8
Stock compensation expense related to the options of $0 and $0 was recognized for the three and six months ended March 31, 2024, respectively, and $0 and $18 for the three and six months ended March 31, 2023, respectively. At March 31, 2024 and September 30, 2023, there were no unrecognized stock compensation costs related to unvested share-based compensation for the option grants.
Forfeitures of RSAs and stock options were recognized as incurred.
17

Total stock-based compensation expense for the three and six months ended March 31, 2024, which was recognized in general and administrative expense, was $175 and $369, respectively, and $228 and $533 for the three and six months ended March 31, 2023, respectively.
Note 12. Commitments and Contingencies
Purchase Commitments
The Company enters into contracts for the purchase of citrus trees during the normal course of its business. As of March 31, 2024, the Company had $3,569 relating to outstanding commitments for these purchases that will be paid upon delivery of the remaining citrus trees.
Letters of Credit
The Company had outstanding standby letters of credit in the total amount of $248 and $248 at March 31, 2024 and September 30, 2023, respectively, to secure its various contractual obligations.
Legal Proceedings
From time to time, Alico may be involved in litigation relating to claims arising out of its operations in the normal course of business. There are no current legal proceedings to which the Company is a party or of which any of its property is subject that it believes will have a material adverse effect on its financial condition.
Note 13. Related Party Transactions
Lease Agreement
On January 1, 2022, Mr. Kiernan, the Company’s President and CEO, entered into a Hunting Lease Agreement and Real Estate Purchase and Sale Option Agreement, with the Company (the “Kiernan Lease Agreement”). Under the Kiernan Lease Agreement, the Company leased approximately 93 acres of Company owned, largely unimproved land (the “Land”) to Mr. Kiernan for a three-year term commencing on January 1, 2022, and ending on January 1, 2025, with a yearly rent of $1,860 (in whole dollars). Additionally, under the terms of the Kiernan Lease Agreement, the Company granted to Mr. Kiernan an option to purchase the Land from the Company, exercisable only during the one-year period January 1, 2022, through January 1, 2023, and at a price of $480 ($5,161 per acre), which price is based on an independent appraisal obtained by the Company. On August 26, 2022, Mr. Kiernan exercised his option to purchase the land. Pursuant to the exercise of the option, the Company sold 85 acres to Mr. Kiernan on October 20, 2022 for $439 ($5,161 per acre).
Note 14. Subsequent Events
On April 19, 2024, the Company entered into an agreement to sell approximately 780 acres of underperforming citrus land for approximately $7,000 ($9,000 per acre), that includes an option to purchase an additional 680 acres within 10 months of the closing date of the sale, at the same price per acre. The transaction is expected to close at the end of July 2024.



18

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 2023 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 2023 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”) generates operating revenues primarily from the sale of our citrus products, providing management services to citrus groves owned by third parties, and grazing and hunting leasing. We operate as two business segments, and all of our operating revenues are generated in the United States. For the three months ended March 31, 2024 and March 31, 2023, we generated operating revenues of $18,113 and $21,294, respectively, loss from operations of $20,479 and $8,995, respectively, and net loss attributable to common stockholders of $15,804 and $7,787, respectively. Net cash used in operating activities was $19,741 for the six months ended March 31, 2024.
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 operating 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 native plant sales, 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.
For the three months ended March 31, 2024 and 2023, the Alico Citrus segment generated 98.1% and 98.3%, respectively, of our consolidated revenues and the Land Management and Other Operations segment generated 1.9% and 1.7%, respectively, of our consolidated revenues.
For the six months ended March 31, 2024 and 2023, the Alico Citrus segment generated 97.7% and 97.9%, respectively, of our consolidated revenues and the Land Management and Other Operations segment generated 2.3% and 2.1%, respectively, of our consolidated revenues.
19

Recent Developments
Citrus Research and Field Trial Foundation
In January 2024, we received $1,790 from CRAFT of grower’s support payments in connection with our use of OTC, to combat the effect of “greening” in our citrus trees.
Land Sale
On April 19, 2024, the Company entered into an agreement to sell approximately 780 acres of underperforming citrus land for approximately $7,000 ($9,000 per acre), that includes an option to purchase an additional 680 acres within 10 months of the closing date of the sale, at the same price per acre. The transaction is expected to close at the end of July 2024.


20


Condensed Consolidated Results of Operations
The following discussion provides an analysis of our results of operations for the three and six months ended March 31, 2024, as compared to 2023:
(in thousands)
Three Months Ended
March 31,
Change
Six Months Ended
March 31,
Change
20242023
$
%
20242023
$
%
Operating revenues:
Alico Citrus$17,762 $20,937 $(3,175)(15.2)%$31,354 $31,205 $149 0.5 %
Land Management and Other Operations351 357 (6)(1.7)%744 677 67 9.9 %
Total operating revenues18,113 21,294 (3,181)(14.9)%32,098 31,882 216 0.7 %
Gross profit:
Alico Citrus(18,380)(6,583)(11,797)179.2 %(32,895)(10,610)(22,285)210.0 %
Land Management and Other Operations222 255 (33)(12.9)%482 481 0.2 %
Total gross profit(18,158)(6,328)(11,830)186.9 %(32,413)(10,129)(22,284)220.0 %
General and administrative expenses2,321 2,667 (346)(13.0)%5,593 5,176 417 8.1 %
Loss from operations(20,479)(8,995)(11,484)127.7 %(38,006)(15,305)(22,701)148.3 %
Total other income (expense), net(504)330 (834)(252.7)%75,011 2,371 72,640 NM
(Loss) income before income taxes(20,983)(8,665)(12,318)142.2 %37,005 (12,934)49,939 (386.1)%
Income tax provision (benefit)(4,970)(534)(4,436)NM10,582 (1,617)12,199 NM
Net (loss) income(16,013)(8,131)(7,882)96.9 %26,423 (11,317)37,740 (333.5)%
Net loss attributable to noncontrolling interests209 344 (135)(39.2)%718 380 338 88.9 %
Net (loss) income attributable to Alico, Inc. common stockholders$(15,804)$(7,787)$(8,017)103.0 %$27,141 $(10,937)$38,078 (348.2)%
NM = Not meaningful

Operating Revenue
The 14.9% decrease in revenue for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023, was primarily due to a combination of the timing of the Valencia harvest, which started later than in the prior year to allow the fruit more time to mature, and an acceleration of the harvest in the prior year as a result of Hurricane Ian to try to mitigate the fruit drop, which are discussed in further detail below, partially offset by an increase in Grove Management Services revenue as a result of the Citrus Grove Management Agreement we entered into on October 30, 2023 (the “Grove Owners Agreement”) with an unaffiliated group of third parties (the “Grove Owners”) to provide citrus grove caretaking services for approximately 3,300 acres owned by such third parties.
The 0.7% increase in revenue for the six months ended March 31, 2024, as compared to the six months ended March 31, 2023, was primarily due to an increase in the price per pound solids for both the Early and Mid-season and Valencia crops,
21

as a result of more favorable pricing in one of our contracts with Tropicana, which is discussed in further detail below and an increase in Grove Management Services revenue as a result of the Grove Owners Agreement, partially offset by a decrease in pound solids for the six months ended March 31, 2024, as compared to the six months ended March 31, 2023.
Operating Expenses
The increase in operating expenses for the three and six months ended March 31, 2024, as compared to the three and six months ended March 31, 2023, was primarily driven by insurance proceeds of $4,759 for crop claims received during the three months ended March 31, 2023 (the “Crop Insurance Proceeds”) which were recorded as a reduction of operating expenses and a combination of the inventory adjustments recorded at September 30, 2022 on the ending inventory balance, as a result of the impact of Hurricane Ian, which effectively lowered the inventory to be expensed in fiscal year 2023 and the Crop Insurance Proceeds, respectively. See Note 3. “Inventories” to the Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report.
General and Administrative Expense
General and administrative expense decreased $346 for the three months ended March 31, 2024, compared to the three months ended March 31, 2023. The decrease was primarily due to the capitalization of costs that had previously not met the threshold for capitalization.
General and administrative expense increased $417 for the six months ended March 31, 2024, compared to the six months ended March 31, 2023, primarily due to increased employee costs.
Other Income (expense), net
Other income (expense), net for the three months ended March 31, 2024 decreased $834 compared to the three months ended March 31, 2023, driven by gains of $1,596 on the sale of 279 acres of the Alico Ranch during the quarter ended March 31, 2023, which did not recur in the three months ended March 31, 2024, partially offset by lower interest expense in the current period.

Other income (expense), net for the six months ended March 31, 2024 increased $72,640 compared to the six months ended March 31, 2023, primarily due to the sale of 17,229 acres of the Alico Ranch to the State of Florida during the six months ended March 31, 2024. By comparison, for the six months ended March 31, 2023 we recognized gains on sale property and equipment of approximately $4,763 relating to the sale of 888 acres, in the aggregate, from the Alico Ranch to several third parties.
Income Taxes
The increase in the income tax (benefit) provision of $4,436 for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023, was driven by a larger decrease in earnings in the current year.
The increase in the income tax (benefit) provision of $12,199 for the six months ended March 31, 2024, as compared to the six months ended March 31, 2023, was principally due to the sale of 17,229 acres of the Alico Ranch to the State of Florida in the current year, while the income tax (benefit) for the six months ended March 31, 2023 was driven by the pre-tax loss generated for the period.


22

The following discussion provides an analysis of our operating segments:
Alico Citrus
(in thousands, except per box and per pound solids data)
Three Months Ended
March 31,
Change
Six Months Ended
March 31,
Change
20242023
Unit
%
20242023
Unit
%
Operating Revenues:
Early and Mid-Season$2,139 $2,368 $(229)(9.7)%$14,534 $11,954 $2,580 21.6 %
Valencias14,732 17,930 (3,198)(17.8)%14,732 17,930 (3,198)(17.8)%
Fresh Fruit and Other103 277 (174)(62.8)%693 770 (77)(10.0)%
Grove Management Services788 362 426 117.7 %1,395 551 844 153.2 %
Total$17,762 $20,937 $(3,175)(15.2)%$31,354 $31,205 $149 0.5 %
Boxes Harvested:
Early and Mid-Season147 174 (27)(15.5)%1,194 979 215 22.0 %
Valencias1,012 1,254 (242)(19.3)%1,012 1,254 (242)(19.3)%
Total Processed1,159 1,428 (269)(18.8)%2,206 2,233 (27)(1.2)%
Fresh Fruit— — %35 40 (5)(12.5)%
Total1,163 1,432 (269)(18.8)%2,241 2,273 (32)(