Property and Equipment, Net |
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| Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property and Equipment, Net |
Note 5. Property and Equipment, Net
Property and equipment, net consists of the following at March 31, 2026 and September 30, 2025:
During the six months ended March 31, 2026 and 2025, the Company recorded a loss on the disposal of long-lived assets of zero and $780, respectively, which has been recognized within Operating expenses.
In fiscal year 2026, the Company entered into leases of certain of its previously retained groves in Polk County and the Citree grove through May 31, 2026, with the intent to enter a further extension of these leases. The decision to lease these
groves constituted an impairment indicator and the Company performed an impairment analysis of its long-lived assets in these groves at December 15, 2025. The Company determined that the asset group for testing impairment is the grove level and includes the Citrus trees, Land, certain Equipment (principally irrigation related) and the Buildings and improvements within its citrus groves. This grouping is required as the cash flows from the sales of fruit cannot be specifically attributed to any of the individual components and the caretaking of the groves is interdependent on the existence of all assets in the asset group. This analysis was based on consideration of comparable land sales and recent appraisals which considered comparable land sales, as well as any cash flows expected to be received from, or related to its operations (such as the fruit harvest) through the harvest season. Based on the Company’s analysis, there was no indication of impairment.
As a result of these leases, the estimated useful life of the Company’s citrus trees has been impacted and their lives were changed to approximately 3.50 years, which is the anticipated end of the non-cancelable term of the lease extension the Company is negotiating. The change in lives resulted in a net reduction in the Company’s depreciation on its trees and certain irrigation assets of approximately $1,270 and $1,475 for the three and six months ended March 31, 2026, respectively, and the impact of the change in depreciable lives on net income for the three and six months ended March 31, 2026 was an increase of $1,246 and $1,398, respectively. The impact on Basic earnings per share for the three and six months ended March 31, 2026 was an increase of $0.16 and $0.18, respectively, and on Diluted earnings per share for the three and six months ended March 31, 2026 was an increase of $0.16 and $0.18, respectively.
In January 2025, the Company evaluated the recoverability of the fixed assets in its Citrus Segment, as a result of the announcement of its Strategic Transformation. The decision to wind down the Company’s citrus groves constituted an impairment indicator and it performed an impairment analysis of its property and equipment at January 6, 2025. The Company determined that the asset group for testing impairment is the grove level and includes the Citrus trees, Land, certain Equipment (principally irrigation related) and the Buildings and improvements within its citrus groves. This grouping is required as the cash flows from the sales of fruit cannot be specifically attributed to any of the individual components and the caretaking of the groves is interdependent on the existence of all assets in the asset group.
As a result of this analysis, the Company determined that there was an impairment of its young trees, which were not yet being depreciated and its long lived assets at one of its groves of $24,966, which has recorded within Operating expenses in its Alico Citrus Segment. This analysis was based on consideration of comparable land sales and recent appraisals which considered comparable land sales, as well as any cash flows expected to be received from, or related to its operations (such as the fruit harvest and crop insurance proceeds) through the third quarter ended June 30, 2025.
Furthermore, the estimated useful life of the Company’s citrus trees had been impacted and their lives were changed to a range of to sixteen months depending upon whether the trees will be abandoned at the end of the Fiscal Year 2025 harvest season or if they are either being retained or leased for another year, which is expected to conclude in April 2026, respectively. The Company recognized accelerated depreciation on its trees and certain of its other fixed assets of approximately $119,266. Citree was not impacted by the Strategic Transformation and as such no change in estimated useful life was deemed necessary. The impact of the accelerated depreciation on the net loss for both the three and six months ended March 31, 2025 was $96,128 and the impact on both Basic and Diluted earnings per share for both the three and six months ended March 31, 2025 was a loss of $12.59.
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