Everybody to SIDOTI's June conference. My name is Daniel Harriman, and I'm an analyst here at SIDOTI. This afternoon, we're going to get to hear from Alico Incorporated, that's ticker ALCO. We're welcoming back the company's CEO, John Kiernan, who's now with us, I think, for at least the third time in the past year. We're going to give John about 20 minutes to go through the presentation, after which time I'm going to open it up for Q&A. If you do have any questions at any time during the presentation, please feel free to type those into the Q&A box. Time permitting, John and I will get to as many as we can. Thank you for joining us, and on behalf of SIDOTI and those in attendance, John, thank you so much, and we'll hand it over to you.
Daniel, thank you. Thank you, SIDOTI, for having us come back for this conference. It's always a treat to talk to all the companies that come to these SIDOTI conferences. We feel most welcome and are grateful for this opportunity. As Daniel had mentioned, Alico is a public company. We trade on the NASDAQ with the ticker ALCO. We actually don't have direct research with SIDOTI, but we are covered by Roth through Jerry Sweeney. We have a market cap around $240 million. We put up a little bit of cautionary tales here for the lawyers in the crowd. If you're unfamiliar with the story, in the simplest terms, Alico is a land company. We've been around for more than 125 years. We own land all within the state of Florida.
have got a long history of conducting agribusinesses and land management businesses all within the state of Florida. We have got very, very strong roots within the conservation legacy, where we protect our natural resources while also being tied to the communities that we serve. We do that because it is part of our DNA. That is very important as we are migrating the company beyond just pure agribusiness into more commercial and residential real estate for portions of our land because it demonstrates that we have ties to the community and have been for more than a century, as opposed to just investors coming to town to kind of slash and burn and put up some towers.
Our portfolio has always been agriculture-related, but we've transitioned our business beyond what was traditionally citrus operations to where we've determined about 25% of our land holdings are probably better suited for something more in the strategic commercial or residential development. We've done that really to balance the near-term and long-term potential on the land, where we can get cash on some of the agricultural operations in the near term. In the long term, if we develop them, we'll be in a much better position to return larger sums of capital back to shareholders. That's really why we're here. We're here to really provide investors with the benefits and stability of the conventional agricultural investment with the optionality that comes from that active land management. Here's what the land looks like. Everybody's familiar that the state of Florida is a peninsula.
You see that nearly all of the land holdings that Alico has are in the center of the state. We are not along the coastline. I think the closest we have is down in our Collier properties, and that's probably about 10-15 miles in. We are in 31 different locations across eight different counties. We own today about 51,000 acres of land, slightly more than that, but about 51,000 acres going from 15 acres in one spot to we've got one parcel that's about 20,500 acres. All shapes and sizes. Until January this year, it was all basically active citrus. Going forward, we're going to shrink our citrus operations about 90% for one more season. We'll run about 3,000 acres of citrus, and we'll lease out another, I think, 5,000-plus acres to third parties who are going to run some citrus on that.
For the most part, we've kind of wound down our citrus. We talked briefly about our connections with the community, and it's not a cliché for us. It's not something that we're just saying is something for anybody. We've been around for more than 100 years. You'll see from the slide that we have up here, we've got very, very strong roots to all the different counties to which we operate today. We've invested in a leadership team. I've been with the company now for a little more than 10 years. I joined in June of 2015. I spent four years as the CFO, definitely one of the ropes. Did some COO-type work of integrating and restructuring some of the business lines. We jettisoned a lot of expenses back then and really got some very strong operational efficiencies.
We have migrated the business to really encapsulate a lot of the long-term real estate potential. A little more than a year and a half ago, we recruited Mitch Hutchcraft, who joined as our Executive Vice President, who has about four decades of experience all basically located in the state of Florida doing entitlement work. If you have not heard this before, I will let you in on a secret. Entitlement is secret Florida code for rezoning. In Florida, you need to have the zoning rights. Everything that we own today is basically zoned for agricultural purposes. To change beyond agriculture, you need permissions from the federal government in some cases, the state government in some cases, the local government in some cases, to basically get their permission to entitle it to have another purpose. That is Mitch Hutchcraft's specialty.
We think he's the best in the world at what he does at that. We've been extremely pleased with the progress that he's made on our projects over the last year. More to come about Mitch in a minute. It goes without saying that we can't function as a public company without very, very strong back-office support. Brad Heine has been with us for a few years now, and we're very, very pleased. Not only does he bring experience, but he's very hands-on, is really keeping us on the straight and narrow. We're very delighted that Brad is a member of our finance staff leading it as our CFO. In January of this past year, six months ago, on January 6th, we announced that we were going to wind down our citrus business. Again, we were the leading citrus company in the United States.
This was kind of a very large decision for us to make. We did that for purely tactical and financial reasons to transform Alico into a diversified land company. We looked at every single inch of every property that we had. We spent about a year and a half prior to this doing analysis with third parties, appraisers, consultants, contractors who really helped us determine as part of a master plan what every inch of our property was best suited for, what would be the highest and best use for the acres of land that we own. That allowed us to really create a blueprint to determine which acres had the potential for something in commercial, which acres had the potential for something in residential, and which acres really, in a third bucket, would be best suited in the long-term purely for agricultural purposes.
Once we completed that, we were able to actually execute a strategy because economically, for the last several seasons, Alico was losing money due to environmental and disease-related impacts to the citrus industry in Florida. Basically, we had the most trees, and they were declining due to the disease called greening. Also, the impacts of hurricanes that came through in 2022 and 2024, unfortunately, limited our ability to produce meaningful amounts of fruit, which was not sufficient to cover our overhead and basically the caretaking costs throughout the year. We were losing money. This was not an arbitrary kind of capitalist-type decision that we thought we could make an extra dollar doing real estate versus agriculture. It was quite the opposite.
Allowing us to go in the real estate path for a small portion of the land that we owned allows us to really focus some of our resources to keep the 75% of the acres we think are better suited for agriculture in agriculture for another couple of generations. That is kind of where we came out today. We have given guidance at the close of the harvest season, which concluded in April. We now project that we will have about $20 million of EBITDA for the fiscal year that ends this September. We should wind up with about $25 million of cash on our books. We will have reduced our net debt balance to somewhere around $60 million. Those are three very positive milestones for us. That is based on only $20 million of previously announced land sales, which are going to close in 2025.
We did flag that there is the potential that we can have an additional $30 million that could close as well. We talked about basically launching a buyback program that if we had disposable cash flow or discretionary cash flow, what would we do with that cash to return to shareholders? The buyback program is a pretty good indication that's probably a path for something in those sums. The takeaway on this page should be that the land sales and the harvest, so the cash balance that we have, $25 million, will be more than sufficient to fund our operations. Assuming we do not sell another acre of land, it should be sufficient to fund our operations for two additional fiscal years. That gets us through 2027.
As we looked at our real estate portfolio, and again, this is the total of the 51,000 acres that we own today, we determined that the present value of these acres is somewhere between $650 million and $750 million. Remember, we said we're trading for about $240 million today on an equity value, and we're probably going to have $60 million of net debt at the end of this fiscal year. It's not too difficult to see that we're probably, according to these numbers, trading for a discount to what we think the market value potentially could be if we realize highest and best use for these assets. We've identified really three buckets for our land.
We calculated with the outsiders and the appraisers to build this master plan that about 5,500 acres, which represents about four projects, could be realized within five years to the tune of somewhere between $335 million and $380 million in present value dollars today. That's discounted somewhere between 10% and 15%. We've never actually given the exact hurdle rate, but somewhere between 10% and 15% present value dollars today, $335 million to $380 million. Additionally, there's another 7,000-plus acres that we think are worth between $140 million and $170 million in present value dollars, but that's outside of five years. It is between five and twenty. Everything else we think remains related to agriculture. From an agricultural perspective, we use basically simple ag prices. Those 40,700 acres are somewhere between $175 million and $200 million.
We have been able to achieve higher prices than that for some ag sales, but we're not forecasting that through this analysis as something that we expect that we can deliver year in and year out for the foreseeable future. Right now, we're just going to say it's somewhere between $175 and $200. Add all that up, $650-$750 million for a company that's trading for probably about $300 million today. Again, very methodical. Prior to 2025, we went through this set of analysis to develop a plan for every acre. We really prioritized where the maximum value could be created. We show you where the acres are county by county. I really want to reiterate that we did this in a painstaking objective fashion. We did this a long time before we got to kind of our January decision.
This has been going on for at least a year and a half, close to two years now. The four projects in the first bucket, between $335 million and $380 million. One is in Collier County. That's basically the crown jewel today, which is our Corkscrew Grove Village project. That comprises about 4,600 acres. Collier County is down where Naples, Florida is, if you want to kind of follow along. We have three other projects that are in the entitlement process as well. One is Bonnet Lake, which is a little further north. That's about 600 acres. We've got another one in the northern county. That's Polk County. That's about 240 acres. Finally, closer to Collier, but a little more rural outside of the town of LaBelle, we've got a grove we call right now Plant World.
Actually, we're running some cattle on it for agricultural purposes, but that's about 80 acres. Let's talk about each of those because they're the four that are currently being entitled and probably the most important for driving some of this value. The Corkscrew Grove, we're very, very pleased, is launched as far as the entitlement work goes. It's going to be two mixed-use villages. We applied locally for the first village, but we've apprised the state and the federal of kind of what the plans are going to be for both together. We'll present all the information, but we're really only going to approve the East Village first. That'll have a lot of commercial.
It's got some good road frontage, but it's got a 1,500-acre environmentally friendly panther corridor, which we think is critical to kind of preserve some of the environmental importance of what's going on in kind of this sensitive area related to the endangered species, the Florida panther that is in Collier County. We hopefully are going to be able to protect them by granting this 1,500-acre corridor that just increases the safety for the panther overall, but is also going to give the residents of these towns hopefully a more panther-free environment. To be as explicitly transparent as we can be, we developed our own standalone website for the Corkscrew Grove Village projects. All of the information, all the filings, maps, studies, all of that kind of information, we're using that as really a portal.
We have a QR code in the back of this presentation that's also located online. It's connected on our website at weekly.com. I encourage you, if you want to get as granular as you want to get real-time up-to-date information, please see that website, and we can have follow-up conversations offline if you want to dig even further. Again, very, very strong strategy. I talked about the panther corridor for 1,500 acres, but we in total are going to have probably 4,500 acres on top of that in Collier County. All told, for 3,000 acres of development, we'll probably have somewhere around 6,000 acres tied to kind of conservation-restricted areas. We think that is extremely important for the environment. This is what the maps would look like. Again, we've got this on our website, but we're going to do the East Village first.
You see on the far right-hand side, the hatched is going to show you kind of where that panther habitat corridor is going to be. It is going to connect in two kind of wildlife areas. Again, very, very, very key part of this design. Moving further north, since we're pressed for time in this presentation, we'll talk a little bit about Bonnet Lake, probably lower price points, fewer issues. We're not going to have any environmental issues, we don't think, certainly not related to the Florida panther. Potentially this could get reviewed and approved quicker. It is a smaller property. It's not going to have commercial. It's probably going to have some lower price points. We did start this entitlement process by launching our permits back in December.
All the permits for what we had just talked about for the Corkscrew Groves were submitted in February, March, and April of this year. At the local, state, and federal levels, Corkscrew is out there in the permitting process and we're moving through. Same thing for Bonnet Lake up in Highlands County. Saddle Bag up in Polk County is also going to be a residential development. It's got about 240 acres, master plan community, not a whole bunch of commercial, but it's in very, very good locations. You can see some lake action, some lake frontage here. We have not submitted permits for that just yet. We do not have very specific that we can kind of spell out, but these are kind of broad, broad strokes of what we're intending. Lastly, the Plant World project near the town of LaBelle is about 80-plus acres.
It's probably about 250 homes. Again, we're going to have some neighbors that are working through some residential development project at the same time. This should fit in nicely with kind of what's going on in that vicinity. If you're unfamiliar with the story of Alico, we have a long track record of returning capital to shareholders. I've been with the company for 10 years, so we're only going to talk about the 10 years since that's the account I started with. In those 10 years, we have returned more than $190 million of capital both by voluntarily prepaying some debt as well as putting it back in shareholders' pockets. How have we done that? We've paid common dividends almost consecutively since 1960. We say since 1974 because we skipped two quarters in 1974 when people were very excited about an oil embargo.
Since 2015, in the last 10 years, we've paid more than $40 million worth of common dividends out. We've done close to a $10 million 10B5 share buyback program several years ago. We have a new $50 million shareholder buyback program that's been approved by our board a few months. As we get discretionary cash flow, that probably is where we will use that as a mechanism to return capital. We have voluntarily prepaid and paid mandatory the tune of about $114 million worth of principal payments against our debt. When I got here, we had more than $200 million worth of debt that came through a couple of acquisitions in 2013 and 2014. As I mentioned, by the end of this fiscal year, we believe we should be down to about $60 million of net debt. Significant delivery.
Again, from a tender offer perspective, we did about $25.6 million, I think, back in 2018. Add that up and you get about $191 million. We respect shareholders and debt holders, and we intend to return capital as we get capital coming into the company. Why? We have a strategic vision. Obviously, we were fully committed to this real estate strategy by shutting down our citrus operations. It is not as simple as basically shutting everything down because we are still actively managing 75% of our land for agricultural purposes. We are primarily doing that as a land leaseholder. We are leasing out our land to other agricultural operators, people that are doing sod and vegetables like green beans and fruits like berries and watermelons and things like that, some cattle guys. It is still being tied to agricultural purposes.
The other 25%, we're aggressively moving quickly down a path of what is the best, most efficient way that we can basically get it re-entitled. We're working through that process. We've got a very strong foundation with our management team. We talked a little bit about that. As we've given you guidance, we've improved our cash flow position. We have more than ample liquidity. I did not mention that on top of the cash we have and relatively low burn rate as far as operations go and overhead. We've got $95 million of untapped credit through a working capital line of credit with MetLife. By the end of this fiscal year, they'll probably have $2.5 million on that, which is kind of the minimum. That gives us substantial untapped liquidity should we need it. Liquidity and Alico are not at risk.
From a financial perspective, we talked about the $191 million. We have got a buyback program that has been approved. We think we are trading at a discount to some of our peers, but certainly from a replacement or fair market value, we think we are significantly undervalued there. Nobody asked, but we had a question of, how did you return so much capital? One of the assets that Alico had when I joined the company was we had a 69,000-acre cattle ranch that was non-strategic to us. We were actually losing some money on cattle operations. That was one of the first exercises we had in our ability to kind of refocus the business. We calmly and strategically sold the cattle.
We actually sold it to somebody who wound up buying a chunk of the ranch and then opportunistically sold remaining parcels of the ranch over five or six years. We did that in 26 different transactions. We wound up realizing close to $226 million between 2017 and 2024. The first price to the last price to private buyers tripled in those six years. We have got a track record of basically being disciplined and being prudent. We know how to sell real estate strategically. That is the process that we are going to go through as we are looking at kind of our citrus holdings that we are not in a rush. We certainly have the liquidity that we are going to be around for quite a while. Opportunistically, we will look at offers and monitor what potentially could be sold, but we will do it at attractive prices.
Again, patience will be rewarded. We talked about our guidance, EBITDA, $20 million. That's based on some previously announced land sales and the results of the latest citrus harvest, as well as some insurance from citrus damage. We should be cash flow positive going forward. From a land sales perspective, we have $20 million announced, potentially another $30 million potentially could be realized in 2025. We are not counting on it because lots of things can go sideways or get dragged out with real estate sales in Florida. We certainly have ample liquidity as we move through here. That's seen on $25 million of cash on the books. That should be sufficient to basically carry us through 2027. We set our net debt at somewhere around $60 million.
We'll have maybe two and a half included in that number on $95 million of credit lines. This is the QR code. It's going to be up on the website if you've got any specific questions. Down below, you'll see that we are eager to talk to investors at any time. We try to be as transparent as possible. By all means, Daniel, do you have anything anybody wants to ask?
Sure. Thank you so much, John. As a reminder, we do have a couple of minutes. If you have any questions, please feel free to type them into the box. John, we've had a few come in so far. You may have touched on this in the presentation and also in prior conversations with investors.
An interesting one came in about your decision to change the business model, if the company would ever consider expanding beyond Florida.
That's a very good question. I guess I need to clarify that. Are you asking, would we consider doing citrus outside of Florida? Or are you asking, would we expand into additional real estate acquisitions to buy more land outside of Florida?
With the wind down of citrus, it would be land acquisitions outside of Florida.
Sure. We haven't committed to very specific use of proceeds on land sales simply because we try to be as fair and opportunistic once land sales have been realized to make an immediate judgment on, is there a reinvestment opportunity that will benefit shareholders in the long term? If not, we return that capital.
Whether it's a buyback program, increasing the common dividend, or doing some sort of special dividend, we're open to all those mechanisms. Historically, we've done tender offers and common, and obviously prepaid a bunch of debt. Prepaying debt is probably not in the cards. We've got some non-amortizing debt at this point. It would have to be at attractive prices, and it would have to really represent an opportunity that our shareholders themselves couldn't directly participate in. Otherwise, we probably lean more towards returning capital.
Perfect. Thank you so much. Another one, this one just came in, and this may be incorrect data. I'm not exactly sure, but an investor is asking that a few years ago, he recalls that your land was estimated to be worth around $450 million or so. They're curious, what's led to the increase over the short term?
Absolutely I think it was somewhere between—he's right—$350 million-$450 million we had talked about for five or six years. As we were running our citrus operations, we as management gave that as an estimate of what the agricultural land value would be. If we sold our assets to other citrus operators, what was the fair market value of those citrus assets? What we have done subsequent to January is said, okay, what is the agricultural value for the land that's going to remain tied to agriculture, which is about 40,000 acres? The remainder is, what is the fair value in present value today of what the extra 25% of the land, which is about 12,000 acres, is worth if it is residential or commercial developed and then discounted back to present value today. That is how we got $650 million-$750 million as opposed to the $450 million.
A portion is still agricultural today where previously all that was valued for agriculture.
Perfect. One question came in regarding the development projects, specifically the Corkscrew Grove Villages. Just when do you expect to submit the application for West Village? And when would it be reasonable to expect to have construction start there?
On the West Village? West Village is probably decade plus. What we're intending is to get the East Village basically constructed and basically learn where the market is and what worked really, really well on the East Village and complement that with any changes that are necessary to the plans that we develop for the West Village before we submit them. The East Village has to go up first, which is probably in the next five years. After that, probably five years plus for the East Village to be absorbed into the market.
I'm guessing 10 plus years out before the West Village potentially could be constructed.
Perfect. We've got just—we're running up on time here. I'll ask one more, John, if that's okay. I'll leave it to you to kind of close. You've been here a few times now. Obviously, this is very exciting, development-wise, what you guys have been going on. Where do you think the disconnect is right now between the market capitalization and the fair value of the land, the assets, and the citrus that you own?
We are a Florida-based company, but I think there's a little bit of a Missouri bias here where you have to show me. We've been operating citrus for, I don't know, pick, pick a year, say 100 years.
Now all of a sudden, we've got some crazy story that's hitting the market for the first time where we're going to be in the real estate game. As I explained, we've been active in land management for 125 years. This really isn't a new story for us. You've got a lot of potential investment opportunities to choose from in the microcap market today. I'm sure anybody can stand up and say, "My stock is undervalued, and I'm worth two to three times more." I'm not doing that. What we're going to do is we're laying out a roadmap and a strategic strategy. Strategic strategy is an oxymoron. We are a strategic roadmap for you. We're executing on that strategy. We're very transparent. We've laid breadcrumbs since I joined the firm 10 years ago every quarter.
We have told you what we are going to do. What we have been unsuccessful at is we have not been able to kind of control the impact of disease of greening on citrus. We have been unsuccessful to kind of mitigate damage from really devastating hurricanes. We have paid that price in our citrus operations. We are sorry that it has led to this. We really have not made other mistakes like that. From this sense going forward, we have spelled out exactly what our intentions are. Every quarter, we are coming back and telling you what we have achieved. We are not going to zigzag too much for now and decide we are going to do some other line of business. This is how we are going to deliver value for our shareholders. As I said, we are very, very pleased to keep coming back to SIDOTI.
One big reason is we get to tell your companies and your investors, "Hey, remember what we said at our conference in January and February? This is what we've done. We have $25 million. We've reduced the debt. We've stabilized basically our agricultural operations. And we're making great progress on our real estate. Now I'm going to continue to prove that out." We think the value gap gets shrunk as we've basically delivered on all those kind of milestones. You've seen major, major, major trading days when we have good news in the stock. As we have good news to report, people tend to jump in. I would hope that they would jump in a little sooner, and they can basically ride it up. It is up to them. I think we're close to $31.50 today. We weren't $31.50 in January.
We look forward to basically delivering on the promises, continue to meet with your good investors, and basically returning capital to shareholders.
That's excellent. John, again, thank you so much for being here and sharing Alico's story and y'all's strategy and vision for the future. For those of you who attended the presentation, thank you for being here. Thank you for your questions. John, on behalf of SIDOTI and the audience, just thank you again for your willingness to present today.
My pleasure. Hope everybody has a great day.
Bye everyone. Thank you.