Hi, I'm Jean Marie Young with Three Part Advisors. Thank you all for coming. Delighted to welcome John Kiernan with Alico. Thanks, John.
Thanks, Jean Marie. Good afternoon, everybody. My name's John Kiernan. I'm the CEO of Alico. Alico is publicly traded. We're on the Nasdaq, have been since 1972. We've been public since 1960. Went public in the pink sheets, if anybody remembers that. Market cap today is about $300 million. We own a whole bunch of land down in Florida, and historically, for the past 130 years, we've been running railroads, timber, a lot of citrus, some diversified real estate, and over the last year and a half, we've focused ourselves really on the real estate side. We'll talk a little bit about our strategy and how we've been executing in most recent times. Again, Florida-based company, long history. Historically was a family business until they went public in the 1960s. The company itself actually changed hands again, in 2013.
An investor group came together and actually bought out majority control. That group disbanded in 2019, the float actually went up. I'm here today to talk a little bit about where we are. Alico as a company seeks to provide investors with the benefits and stability of a traditional agricultural investment, combined with the optionality that comes with active land management. That's cashflow coming in from basically growing crops. In this case now, people are paying us rent to grow crops on our property, as well as the optionality that comes from potentially selling the land at opportunistic prices. Our footprint in Florida, some will got very excited. The shaded areas are the counties that we're in. It's not all of our land holdings, but the orange parts within are. We have about 46,000 acres in about 27 different locations across seven different counties.
That's relevant because each county has its own local rules and regulations on how you would rezone it or what we say is entitle it for different purposes. Every acre this minute that we own is basically zoned for agricultural purposes. It has for the last century. We're in the process in select places, in select counties, to have it actually re-entitled into something in residential and commercial. The good part is we've got a very long track record of being good stewards of the land, and have earned over the past century plus a great reputation for being conservation-oriented. We're not carpetbaggers that come to town to basically just look to loot and pillage. Instead, we are part of the Florida community and have been for a long time. We just gave you 40 years of basically track record.
Most recently, with the Florida Department of Transportation, we funded for $5 million a wildlife underpass across one of the major roads in the vicinity of where we are hoping to actually be able to get final approval to build a community. We don't have any permits. It's all on spec. The construction's going ahead of schedule. That's us as a company putting our money where our mouth is, to basically do what's right for the conservation movement. In this case, taking care of the Florida panther, which is an endangered species. Everyone's wondering why I don't have a beard anymore. That's a different story, but I have been with the company for a little more than 11 years. My 11th anniversary was last week.
I was brought in in 2015 to be the CFO of those companies when they basically changed hands, with the institutional money that came on board. Probably the greatest hire I ever made over the last 40 years of my career has been Mitch Hutchcraft, joined the company two years ago. Mitch is an entitlement specialist. He literally is a magician. He's been working in the Florida entitlement process for probably four decades. All of the work that we're doing requires a very delicate touch with a very strict sense of discipline, and Mitch truly is the best that's ever been for doing the entitlement work. He is a key part of our team, and he is a great factor in the success that we have going forward. There, Bradley Heine has been with us for about three and a half years right now.
He's our CFO. He's really helping us as we've downsized the business and focused on all the accounting issues related to the transition, which started in January of 2025. We were the largest citrus producer for juice in the United States. until January 6th, 2005. We were growing 20%-25% of the oranges that were grown for the juice market, but we were losing money on every basically truckload that we shipped for two seasons. Beginning in the 2024-2025 season, we made the tactical decision that we would no longer serve as operators. Orange growing for Alico was no longer economically viable. There still is a disease called greening, which affects citrus trees and only citrus trees' ability to absorb carbohydrates, so the trees basically starve to death. It's a terminal disease, and it made the trees weak.
We had very significant once in 100 year storms that just happened to hit all of our crops in 2017, 2022, and 2024. By the October 2024 storm, our trees pretty much had had enough, and the production that they were able to deliver for us and the cost that were associated with even getting that small amount of production made this no longer economically viable for us as a business. We made the strategic transition to wind it down. We are now officially no longer operating as a citrus company. Instead, we're leasing out all of the land that we just showed you, the 46,000 acres, to third parties who are using it for cattle or for sod or sugar or vegetables. Some are trying to do citrus and other fruits. They're paying us rent.
We've gone from basically a cash flow negative operation to we now have cash flow coming in on a fee basis. It's a lot more stable than operating. That still basically reserves all the upside for the value of the land, which is what we'll talk about in a minute. What we did is we evaluated the highest and best use for every acre that we had on every inch of our property to determine what it would be suited for in the near, mid, and long term. The reason that was important is we were still doing citrus at this time. This was all behind the scenes in a back room working with outside consultants, contractors, appraisers, real estate experts, other third parties to really come up with a strategic vision for every inch of our property.
That led us to basically create three different buckets, which we publicly announced in January of 2025, and we just refreshed about a month ago during our earnings call to say that we thought there were about four properties that could be developed for something other than agriculture in the next five years. That totaled about 5,500 acres. We'll get to what the specific ones were. Within a five-year window, we thought they could be monetized, sold, at attractive pricing. Keep in mind, I just told you that our market cap today is $300 million. We think, and this is management's estimates, by building a discounted cash flow and discounting it back somewhere between 10%-15% to get to present value dollars today, we think the value of those properties for those 5,500 acres is about $335 million-$380 million. Not too shabby.
There's a second tranche of potential development that we think is worth another $140 million-$170 million. That could be as much as 7,000 acres, but that's past five years. Again, we discounted it back to present value, so everything's starting on the same spot. The infrastructure's not in place, and we don't think the demographics are there for near-term development, but we definitely think it's developable. It just isn't something on the immediate radar. That's basically second derivative. Everything else, and we get into this with investors a lot, everything else potentially could be developed, but not in the near or midterm. I mean, 20 years from now, 25 years from now, perhaps. In the near midterm, we think it's going to stay as agriculture.
We don't think anybody's going to be able to do anything to change its current use, and if they do, they're probably not going to be able to realize the attractive pricing for residential or commercial. We put it in the agricultural bucket. Right now, that's about 33,400 acres. Over the past year, we have sold about 7,000 of those acres. Originally, it was 40,000 acres last year. About 7,000 of those acres we have sold to third parties who want to continue to do agriculture. They just want to do it on their dime. They don't want to pay us rent. Typically, they're neighbors. They're people that have been adjacent to us for generations, and they basically want to take it to expand their own operations.
If you put a price tag, we think it is somewhere between $175 million - $200 million additional, which when you add it all up, is somewhere between $650 million- $750 million. Someone asked, is that pre or post? That is pre-tax. Tax rate for capital gains would be somewhere in the 20%-25% range. That is great, except about a third of the acres are legacy that go back with the parent company that has been around for 100+ years. Definitely going to hit a pretty high tax. Most of the other acres, though, have been acquired somewhere in 2013 or 2014, and they were acquired for citrus dollars. Depending of eventually what it could be monetized for, you may be paying a lot of gain, some gain, or no gain.
It is really case by case from a tax leakage perspective, and we have not done any forecasting or giving any additional information. From a back of the envelope, certainly if you sell the entire portfolio, it would be taxed, but I cannot tell you dollar for dollar what it would be. The plan itself is actually our plan for every acre is probably the most historic milestone that we have had from an administrative perspective over the last 20 years. We did a lot of great work to expand the citrus crop. We were industry leaders. We did fantastic, but we think the plan of every acre is what is going to determine the value for our company for the next meaningful few decades. We looked county by county, as we had talked about before.
The reason for that, as we had said at the top of the hour, is each county has kind of its own local rules, regulations, and sometimes culture of how things get done. Rather than come in and just have one A team and they just monetize, I am sorry, they replicate the operations here, there, and everywhere.
We have to form individual unique teams that are specifically experts in whatever county we are working in. We are running parallel processes for some of these approvals, but what we are not doing is we are not double-dipping by using the same team over and over again. We have to hire different teams, and we are outsourcing almost all of this work under the leadership of Mitch Hutchcraft. If you look at the map, again, this is highlighting counties. Everything that is shaded is not what we own. We have got little orange pockets here.
In Collier County, which is where Naples is, down in Florida, Fort Myers is adjacent to that. It is in a slightly different county called Lee County. We are looking at basically 4,660 acres, and that is called our Corkscrew Grove. It is on two major thoroughfares. One is State Route 82, the other is Corkscrew Road.
Along Corkscrew Road, going from the shore eastward, you are seeing a lot of development that is already been in process for years. We are on a development corridor. Now, because of the level of the intersections, we think we are the last big puzzle piece for the development that this is in this area, and we certainly think this is a marketable transaction. We are going to spend a lot of time talking about this. Further north, the next one up is in Highlands County. That is another grove called Bonnet Lake Grove.
It's got a little bit of lakefront access, but it's about 610 acres, and when all is said and done, we think potentially 2,000 homes will be built there. We're seeking approval for that this summer. A little further north at the tippy top, in Polk County, we'll show you a map. There's a Saddlebag Grove, which is right on a lake. It's got great lake views. We think those 240 acres potentially are going to have some houses on them sooner or later. The one that's probably quickest is the last one, which is down in Hendry County, which is in the middle. You're going to see a small 80-acre parcel, that right now only has cattle on it, which is right outside the city of LaBelle.
That is probably the furthest along as far as approvals go, and it's got some residential development that's already going on from a national home builder surrounding it. We feel pretty good that that's probably going to work. The Corkscrew Grove is our crown jewel. Again, it's in an environmentally sensitive area related to the Florida panther, so it's going to get federal review from the Army Corps of Engineers. That probably is not going to get completed before the end of 2027 or the beginning of 2028. That is the long tent pole in this approval process. We have remaining approvals for this project that have to go through the state of Florida's Southwest Florida Water Management District to validate that the water usage is not going to compromise anything. Rule of thumb right now is agriculture in Florida is extremely intensive for water use.
Houses, not so much. Think of how often you water your lawn. Now picture I'm watering trees once a day, and they take three or four hours, and I got millions of trees. We think the state water is not going to be an issue. We ultimately think that we've done some mitigation actions that will really help the approval process with the Army Corps of Engineers, but they're a federal agency right now that's really backed up. They certainly don't have a lot of adequate resources to move quickly. They're doing the best they can. It's just going to take as long as it's going to take. We filed everything a year ago April, so they've had paperwork since then. We're looking at this as basically two villages side by side. Two adjacent villages that are going to share some services.
The fact that it's villages is actually administrative benefit to us that we were able to do that. I think 1,500 was the magic number on size to qualify as village. There's requirements if you were going to go to more of a town, if we chose to go down that path, it would have more stringent requirements for a greater amount of commercial space. We're complying with everything. The first section is on the east side. It's going to be over on this side if you're looking that way. We're immediately putting up about 1,500 acres for conservation purposes. That'll be reserved purely as open space that will go to basically mitigate the potential risks of the Florida panther ever being injured. We're very, very proud of that.
There's additional space, an additional 5,500 acres about two or three miles down the road, that are also being pledged for conservation and open space. All told, there's about 7,000 acres that's basically being reserved for conservation purposes while we're looking to basically develop about 3,000 acres. Those 3,000 acres ultimately could have as much as 9,000 homes and potentially up to half a million square feet of commercial. The steps that we're going to get there are kind of intense. It all comes down to Florida in this particular area to conservation, and we've been very, very transparent and very forthcoming. The most significant example of that is we put up $5 million of corporate funds to fund a wildlife underpass that I mentioned a few minutes ago.
Ultimately, that would be something that some of our peers would wait three or four years down the road to make sure that they had certainty before they would spend a dime. We went the other way, and we'd rather shorten the approval cycle by a few years by being as forthcoming as we can and as constructive as we can, and we're very, very proud to do that. We think it's the right thing to do. It certainly mitigates damage to these vulnerable animals. Also, I think it bought us a lot of goodwill, and certainly at the local level, where your friends and neighbors can come up and talk about how they feel about basically people building in their backyards. We received unanimous approval for this project by Collier County on the 28th of April.
It was a 5-0 vote by the planning and then 5-0 vote by the county commissioners, and a lot of that had to do with how we've been communicating and also how we've been treating our friends and neighbors. We're very proud of that. The villages themselves, as I said, first part, the part in the blue is going to be east side. That'll come to about 1,500 acres. Again, that cost us 7,000 acres of additional conservation down the road. We hopefully will have the entire project blessed at the state and federal, because once that happens, we have the ability to go back to the county with more detailed plans for the orange, and we'll know what's going to be selling at that point.
We have the ability to tweak the designs of how we lay out the orange part on the west village a few years down the road, as opposed to trying to get all the paperwork in a vacuum approved up front, and then be stuck if we ever want to make any changes. We think this gives us greater flexibility. The Bonnet Lake is a facility we talked about up top in Highlands County. It's the one over here in the little purple area. You're looking at potentially 2,000 homes, not a lot of commercial. It's going to be some civic space, a lot of open space. We expect that we'll probably get local approval, at least the first county appearance is probably be by the end of this summer.
We've done a lot of planning, and worked with a lot of the agencies over the last year and a half, and we're optimistic that hopefully this might be resolved by the end of 2026. That's moving along quite nicely. Saddlebag is the one that I had talked about. You see the rectangles, you see that nice blue shaded area, which is the lake. That is a great recreational facility. Obviously, it's scenic and beautiful. We think those 240 acres could potentially have up to 440 homes on them as well. We have not filed any plans publicly. We're working behind the scenes, but until then, this one is still on the drawing board, but it clearly is in our path. Plant World was the smaller facility that we had chatted about. It's about 80 acres.
All around us, we've got some other development that's been in the works from a national home builder. I think they're actually talking tomorrow night, and we'll see how all the approvals go. Again, we think this is a 2026 approval. What happens when these guys all get approved? Once the land is entitled, the value is unlocked, and it is much more attractive to local, regional, and then national home builders who will come in with a sum certain of knowing exactly what they're allowed to do without any execution risk from any of the regulators. We've seen that with our peers, where we've seen entitled land immediately change hands, and some sort of prenegotiated or pre-contracted arrangement. That certainly is a scenario that we would entertain. We talk to all the national and regional home builders on a regular basis.
As we get closer to the finish line, particularly on Corkscrew, conversations will probably intensify and get a lot more specific. Option number one is the land as entitled could be sold outright, and the value that I showed you at the beginning of what we thought the entire value of the company with that present value analysis, that's the scenario that we contemplated. I'm a treasurer by trade. I was an investment banker for a long time. I remember how spreadsheets work. We would look at two other alternatives, and we'd basically match the IRRs and see which one generated a greater return for our shareholders. The second alternative would be we would partner, not sell, but we would partner with those same parties and basically extract value as homes were sold. That could take decades. You've got some execution risk on marketing.
Again, we'd have to factor all that in as we revise the DCF and see from an IRR perspective which one basically is preferred. Last but not least is we can bring in-house capabilities to basically create our own development company and either clear the land, improve the lots, and build pads. It's even more of a finished product before the home builders would come in. We could build it ourselves. Again, this all comes down to cost, timing, risk, and we'd have to measure the IRRs against all three of those scenarios to determine which path our board would recommend. Those conversations have been going on. They'll probably intensify, and within the next year and a half, we should come to some sort of decision on each of these properties that we've talked about so far.
What do you do with the money after you sell it? That's a really good question. I'll give you a hint. Over the last 10 years, we've returned $210 million to the shareholders in prepaid debt. That's our track record. We haven't done any crazy acquisitions. I have bought land. I've done it at very attractive pricing. What does that mean? I'm selling it for more than I bought it for in the last five or six years. We've always been a dividend payer, consecutively, we've paid dividends since 1974. They paid dividends consecutively for the 14 years behind that as well, so they missed two quarters. Otherwise, they can come out and say that for 67 years, they've been paying dividends. From a repayment perspective, I think our debt structure's pretty well set at this point.
We, when I got to the company, had about $200+ million of acquisition debt from merging two or three entities together. We're down to about $80 million today, and we've built up a substantial cash balance or a net debt. We'll get to it in a second. It's forecast by the end of this year, our net debt should only be about $45 million, which is a long way from where we started. We most recently completed a $10 million 10b5-1 open market share repurchase that went through March and April. Average price was a little less than $41, and we took out 3% of the shares. Again, we think the price is cheap, but that was a very tax-efficient way for us to basically return capital. We've done tender offers in the past if you get really, really crazy.
We did a $26 million tender offer way back in 2018, and all options are on the table as we have significant land sales and higher levels of disposable cash flow. Why are we here today? Well, we've wound down our citrus operations, which means we're out of the seasonal weather risk of conducting agriculture. The assets are still here. We still own all the land. Nothing's really changed on that. Now that we've diversified our operations and the core assets are still the same, we think that there is value to be had. We are open to all opportunistic inquiries as people come to us. Assuming that we like the price, we'll make a trade. I think in the last year, we sold about $50 million worth of that agricultural land. Again, not for a sneeze or a song.
We've got about 72% of our land still tied into that agricultural bucket that's not dependent on waiting for entitlement, regulators, bureaucrats, or anything like that to sign off on it. If we get an attractive price in those 33,500 acres that are in the agricultural bucket, we can sell it relatively quickly. It just has to be at an attractive price. Management team is highly incented every single day to deliver the best value for the shareholders, and we've been here long enough that we kind of have seen through the ups and downs. We're very satisfied that we have a future, because we've got more than $50 million in the bank right now. If we don't do anything, we think we've got enough cash that we can sustain until the end of our fiscal 2028 year not doing anything.
No one has the intention of not doing anything. We're still monetizing, we're still moving, we're still looking at sales, we're still working through all those leasing activities, but we have ample liquidity in the bank. On top of that, we've got $95 million of untapped credit that we can hit for MetLife anytime for any reason. We can be around as long as we need to be around to stay at the table to monetize these assets on behalf of you, the shareholders. We talked a little bit about our return of capital, the $210 million. Talked about this buyback program. We talked about dividends. We talked about all that. If we wanted to play a trivia contest, we can ask who you think a comparable company is for us. Historically, Limoneira was a name that always came up, but certainly our business has changed. They grow lemons.
We grew oranges. We're not really growing oranges anymore. Maybe it's not as comparable as it used to be. There are real estate companies. There are REITs. We are not a REIT. We own the land, and basically are not dependent on long-term cash flow streams coming as lease payments. The lease basically is holding our place in line until we can liquidate some of those assets. That's our business. There's not a lot of really good, pure comps out there, but every company, since I started, graduated college, went to Wall Street, every company is unique. Well, that's true, but you still have to pick comparables. From a trivia contest, we can have a conversation outside, but we're kind of tough to comp against.
We believe based on the net asset value that we've shared for the last year and a half, we're still trading at half of what we think NAV is. Remember, that present value is today's dollars. We're trading $0.50 on the dollar if you look at it that way. Last but not least, with the management team in place, with our conservation DNA, we're going to continue to do the right thing as stewards of the land while recognizing we have an obligation to you, the shareholder. That has not changed, and it won't change as long as I'm here. From a year-to-date perspective, we announced earnings on early May, and this is where we came out. Positive EBITDA for the year. Cash is strong. Net debt, as I mentioned, is coming down.
You're looking at basically the land sales that we've been able to accomplish this fiscal year compared to what we did last year. We've given you some guidance as well, both on EBITDA for 14 for the end of this fiscal. Talked about our cash balance basically probably leveling out around $40 million. Our net debt, when you add all that together, it should be about $45 million with a little tiny slice that's on a letter of credit that we have to keep open because of the revolving credit line. With that, I'll stop talking. We've got a few minutes to answer any questions. What can I tell you? Sir.
Was there any liability to Tropicana?
There was not.
You were a partner and a supplier to them for decades, and suddenly you just said, "Okay, we're not doing it." They said, "Okay, that's it?
It sounds like a gross oversimplification. The way the contractual language was is acre by acre, no one that works with Tropicana had an obligation to perform if it was uneconomically viable. The fact that we lost money for the two previous years, despite getting the highest pricing in the industry from Tropicana, was something that they were able to basically excuse. Follow it all the way through, what happened to Tropicana the next year? They no longer bought fruit. They exited the market. They're a bottler now. They bring in fruit from Brazil.
Well, Florida's Natural is still buying fruit. Cutrale is still buying some fruit, which basically is owned by Coca-Cola. Those are primarily the two big guys, and their quantities that they acquired this year are very, very small. The citrus industry itself, we got out a little bit ahead of schedule, but it was necessary.
For those 32,500 agricultural use, you expect the majority of those is not going to go into juice. They're going to be alternative?
Everything right now is alternative. Everything we own is being used for alternative. The 33,500 acres that I said is in the agricultural bucket, I don't think that turns into houses or commercial. The entire portfolio, which is about 46,000 acres, we now have leased out for cattle, sugar, sod. Everything else is basically being monetized with lease payments.
The last question I had is there any value to any sort of mineral rights that you might have, and have you contemplated anything about that?
We have. We actually spent a year going through all of the tax records in every single town where we have any property, and have for the last 100 years. Mineral rights are a little screwy because you don't really ever own them 100%. You own fractional shares that have been sold off over generations and generations. We own, I'm going to get this wrong, probably 50,000 acres of mineral rights. Nearly all of it is on property we have, but some that we've retained mineral rights on. It's great to have. It's very, very difficult right now to get approval to extract. If you're looking to basically extract phosphate in a phosphate mine, you're going to have to get state and local approval, and they're not really very accommodating for a lot of new mining activity. However, sand, you need sand for construction, you need sand for concrete.
Sand is not an aggregate. Sand basically is an agricultural product because you're basically taking what's off the surface. We have three sand mines going right now. We didn't need special approvals. If we get them modified for bigger volume, we need some approvals, but we have three legacy sand mines that are operating very nicely right now.
I explained this to someone. Florida is different than a lot of other places in the United States. where water is not an asset. Water is a right, and that is basically calibrated and measured according to usage. As agricultural operators for the last 100 years, our usage is at the max because we use water every day, and it's kind of use it or lose it. If you stop using it, your permitted amount that you're allowed to have going forward is going to go down. Another reason to basically have all those agricultural operators in there is so that our permitted use basically continues to stay current. It's not an asset where I can take those water rights and sell them to somebody else. They're not something you can monetize. Okay.
Same, right? Some of our properties are 20 miles from Everglades National Park. We can drill all day long, except you can't drill. There's a couple of legacy gas mines, and oil wells that are going. There's not going to be a lot of new stuff anytime soon. Not in the current environmental environment. Okay, we've got time for maybe one more question. Great. I think there's cookies outside. I thank you all for your attention. We'll see you soon