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What changed in ALICO, INC.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of ALICO, INC.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+280 added−433 removedSource: 10-K (2023-12-06) vs 10-K (2022-12-13)

Top changes in ALICO, INC.'s 2023 10-K

280 paragraphs added · 433 removed · 212 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

56 edited+18 added−57 removed15 unchanged
Biggest changeOur citrus acreage is further detailed in the following table: Net Plantable Producing Developing Fallow Total Net Plantable Support & Other Gross DeSoto County 16,232 115 522 16,869 4,623 21,492 Polk County 4,870 — — 4,870 2,237 7,107 Collier County 4,261 — — 4,261 2,905 7,166 Hendry County 5,735 57 175 5,967 2,799 8,766 Charlotte County 1,724 — 138 1,862 676 2,538 Highlands County 1,063 — — 1,063 161 1,224 Hardee County 403 — — 403 171 574 Total 34,288 172 835 35,295 13,572 48,867 Of the 48,867 gross acres of citrus land we own and manage, 13,572 acres are classified as support and other acreage.
Biggest changeThis lease expands our current citrus production acreage by approximately 3%, over our owned land production, to approximately 36,000 net citrus acres. 5 Table of Contents Our citrus acreage is further detailed in the following table: Net Plantable Producing Developing Fallow Total Net Plantable Support & Other Gross DeSoto County 17,569 — — 17,569 4,043 21,612 Polk County 4,907 — — 4,907 2,147 7,054 Collier County 3,869 — — 3,869 3,187 7,056 Hendry County 5,758 — 311 6,069 2,831 8,900 Charlotte County 976 — 136 1,112 1,409 2,521 Highlands County 1,049 — — 1,049 175 1,224 Hardee County 410 — — 410 172 582 Total 34,538 — 447 34,985 13,964 48,949 Of the 48,949 gross acres of citrus land we own and manage, 13,964 acres are classified as support and other acreage.
Compliance with these laws, rules and regulations has not had, and is not expected to have, a material effect on our capital expenditures, results of operations and competitive position as compared to prior periods. 10 Human Capital Management Purpose and Company Values Supporting our people is a fundamental value for Alico.
Compliance with these laws, rules and regulations has not had, and is not expected to have, a material effect on our capital expenditures, results of operations and competitive position as compared to prior periods. Human Capital Management Purpose and Company Values Supporting our people is a fundamental value for Alico.
Typically, citrus trees become fruit bearing approximately four to five years after planting and peak around seven to eight years after planting. Our Alico Citrus business segment cultivates citrus trees to produce citrus for delivery to the processed and fresh citrus markets.
Typically, citrus trees become fruit-bearing four to five years after planting and peak around seven to eight years after planting. Our Alico Citrus business segment cultivates citrus trees to produce citrus for delivery to the processed and fresh citrus markets.
Under this agreement, if the market price was below the floor prices or exceeded the ceiling prices, then 50% of the shortfall or excess was 7 deducted from the floor price or added to the ceiling price.
Under this agreement, if the market price was below the floor prices or exceeded the ceiling prices, then 50% of the shortfall or excess was deducted from the floor price or added to the ceiling price.
Employee Safety and Well-Being Health and safety in the workplace for our employees and personnel provided by independent contractors with which we contract is one of the Company’s core values. Hazards in the workplace are actively identified and management tracks incidents so remedial actions can be taken to improve workplace safety.
Employee Safety and Well-Being Protecting the health and safety in the workplace for our employees and personnel provided by independent contractors with which we contract is one of our core values. Hazards in the workplace are actively identified and management tracks incidents so remedial actions can be taken to improve workplace safety.
The Company's management oversees various employee initiatives and also monitors the effectiveness of the personnel provided by independent contractors with which we contract for certain harvesting and hauling services. Employees We believe in a culture of equity, diversity and inclusion.
Our management oversees various employee initiatives and also monitors the effectiveness of the personnel provided by independent contractors with which we contract for certain harvesting and hauling services. Employees We believe in a culture of equity, diversity and inclusion.
Intellectual Property While we consider our various intellectual property to be valued assets, we do not believe that our competitive position or our operations are dependent upon or would be materially impacted by any single piece of intellectual property or group of related intellectual property registrations or rights. 9 Seasonal Nature of Business As with any agribusiness enterprise, our agribusiness operations and revenues are predominantly seasonal in nature.
Intellectual Property While we consider our various intellectual property to be valued assets, we do not believe that our competitive position or our operations are dependent upon or would be materially impacted by any single piece of intellectual property or group of related intellectual property registrations or rights. 7 Table of Contents Seasonal Nature of Business As with any agribusiness enterprise, our agribusiness operations and revenues are predominantly seasonal in nature.
Based on our Inclusion and Diversity strategy, the Company promotes a greater sense of inclusion through a variety of initiatives, which includes a Company-wide women’s group to promote mentoring, career advancement, training, comradery, and empowerment. 11 Compensation and Benefits Our compensation and benefits are designed to support the financial, mental, and physical well-being of our employees.
Based on our Inclusion and Diversity strategy, we seek to promote a greater sense of inclusion through a variety of initiatives, which includes a Company-wide women’s group to promote mentoring, career advancement, training, comradery, and empowerment. Compensation and Benefits Our compensation and benefits are designed to support the financial, mental, and physical well-being of our employees.
The 35,295 remaining acres are classified as net plantable acres. Net plantable acres are those that are capable of directly producing fruit. These include acres that are currently producing, acres that are developing (i.e., acres that are planted with trees too young to commercially produce fruit) and acres that are fallow.
The 34,985 remaining acres are classified as net plantable acres. Net plantable acres are those that are capable of directly producing fruit. These include acres that are currently producing, acres that are developing (i.e., acres that are planted with trees too young to commercially produce fruit) and acres that are fallow.
The following table illustrates the seasonality of our agribusiness revenues: Fiscal Year Q1 Q2 Q3 Q4 Ending 12/31 Ending 3/31 Ending 6/30 Ending 9/30 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept Harvest Fresh and Early/Mid Varieties of Oranges X X X X Harvest Valencia Oranges X X X X Significant Customers Revenue from Tropicana represented approximately 79.7%, 77.5%, and 86.9% of our consolidated revenue for the fiscal years ended September 30, 2022, 2021 and 2020, respectively.
The following table illustrates the seasonality of our agribusiness revenues: Year Ended September 30 Q1 Q2 Q3 Q4 Ending 12/31 Ending 3/31 Ending 6/30 Ending 9/30 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept Harvest Fresh and Early/Mid Varieties of Oranges X X X X Harvest Valencia Oranges X X X X Significant Customer Revenue from Tropicana represented 81.3%, 79.7%, and 77.5% of our consolidated revenue for the years ended September 30, 2023, 2022 and 2021, respectively.
We also offer competitive benefit programs, in line with local practices and with the flexibility to accommodate the needs of a diverse workforce. The benefit programs include, among others, paid holidays, family leave, disability insurance, life insurance, healthcare, and a 401(k) plan with a company match. As of September 30, 2022, we had 206 full-time employees.
We also offer competitive benefit programs, in line with local practices and with the flexibility to accommodate the needs of a diverse workforce. The benefit programs include, among others, paid holidays, family leave, disability insurance, life insurance, healthcare, and a 401(k) plan with a company match. As of September 30, 2023, we had 194 full-time employees and no part-time employees.
In an effort to increase the density of our citrus groves, Alico has planted approximately 1,900,000 new trees since 2017. This level of planting has been substantially higher than the normal level of tree attrition. We will continue to evaluate the density throughout our groves and determine the appropriate tree plantings moving forward.
In an effort to increase the density of our citrus groves, we have planted approximately 2,200,000 new trees since 2017. This level of planting has been substantially higher than the normal level of tree attrition. We will continue to evaluate the density throughout our groves and determine the appropriate tree plantings moving forward.
We believe the Company’s success depends on its ability to attract, develop and retain key personnel. The skills, experience and industry knowledge of our employees and the employees of our independent contractors significantly benefit our operations and performance.
We believe our success depends on our ability to attract, develop and retain key personnel. The skills, experience and industry knowledge of our employees and the employees of our 8 Table of Contents independent contractors significantly benefit our operations and performance.
The Company manages its land based upon its primary usage and reviews its performance based upon two primary classifications - Alico Citrus and Land Management and Other Operations. The Alico Citrus division includes the production, cultivation and sale of citrus on its owned lands and as a manager of citrus groves for third parties.
We manage our land based upon its primary usage and review its performance based upon two primary classifications - Alico Citrus and Land Management and Other Operations. The Alico Citrus division includes the production, cultivation and sale of citrus on our owned lands and as a manager of citrus groves for third parties.
Our land holdings and the operating activities in which we engage are categorized in the following table: Gross Acreage Operating Activities Alico Citrus Citrus Groves 48,845 Citrus Cultivation Citrus Nursery 22 Citrus Tree Development 48,867 Land Management and Other Operations Ranch 24,161 Leasing and Conservation Other Land 526 Mining Lease and Office 24,687 Total 73,554 Alico Citrus We own and manage citrus land in DeSoto, Polk, Collier, Hendry, Charlotte, Highlands, and Hardee Counties in the State of Florida and engage in the cultivation of citrus trees to produce citrus for delivery to the fresh and processed citrus markets.
Our land holdings and the operating activities in which we engage are categorized in the following table: Gross Acreage Operating Activities Alico Citrus Citrus Groves 48,927 Citrus Cultivation Citrus Nursery 22 Citrus Tree Development 48,949 Land Management and Other Operations Ranch 22,328 Leasing and Conservation Other Land 526 Mining Lease and Office 22,854 Total 71,803 Alico Citrus We own and manage citrus land in DeSoto, Polk, Collier, Hendry, Charlotte, Highlands, and Hardee Counties in the state of Florida and engage in the cultivation of citrus trees to produce citrus for delivery to the fresh and processed citrus markets.
As a result, all services relating to this caretaking management initiative and the accompanying management fee and reimbursed costs associated with performing caretaking management services ceased on June 10, 2022. The management fee was paid through June 30, 2022.
As a result, all grove management services relating to the Property Management Agreement and the accompanying management fee and reimbursed costs associated with performing grove management services ceased on June 10, 2022. The management fee was paid through June 30, 2022.
Our sales to the processed market were approximately 84.5%, 82.7%, and 91.0% of Alico Citrus revenues for the fiscal years ended September 30, 2022, 2021 and 2020, respectively.
Our sales to the processed market were 94.0%, 84.5%, and 82.7% of Alico Citrus revenues for the years ended September 30, 2023, 2022 and 2021, respectively.
The revenue in fiscal year 2022 from Tropicana was generated primarily from two separate contracts. This revenue was generated from the sale of our citrus product in the processed market. No other single customer provided more than 10% of our consolidated revenue in fiscal years 2022, 2021 or 2020.
Revenue in the years ended September 30, 2023 and 2022, from Tropicana, was generated primarily from two separate contracts. This revenue was generated from the sale of our citrus product in the processed market. No other single customer provided more than 10% of our consolidated revenue in the years ended September 30, 2023, 2022 or 2021.
Any information posted on or linked from our website is not incorporated by reference in this Annual Report on Form 10-K. The SEC also maintains a website at http://www.sec.gov , which contains annual, quarterly and current reports, proxy and information statements and other information regarding issuers that file electronically with the SEC. 12
Any information posted on, or that can be accessed through our website, is not incorporated by reference in this Annual Report. The SEC also maintains a website at http://www.sec.gov , which contains annual, quarterly and current reports, proxy and information statements and other information regarding issuers that file electronically with the SEC.
On October 30, 2020, the Company purchased approximately 3,280 gross acres located in Hendry County for a purchase price of $18,230,000. This acquisition allows the Company to add additional scale to its then approximately 46,000 gross acres of citrus properties.
On October 30, 2020, we purchased approximately 3,280 gross acres located in Hendry County for a purchase price of $18,230 thousand. This acquisition allowed us to add additional scale to our then approximately 46,000 gross acres of citrus properties.
Strategically, with these acquired groves neighboring existing Alico groves, Alico believes that this acquisition will help Alico with its operation designed to be a low-cost, high-producing citrus grower. Revenues from our Alico Citrus operations were approximately 97.5%, 97.5%, and 96.6% of our total operating revenues for the fiscal years ended September 30, 2022, 2021 and 2020, respectively.
Strategically, with these acquired groves neighboring existing Alico groves, we believe that this acquisition will help us with our operation designed to be a low-cost, high-producing citrus grower. Revenues from our Alico Citrus operations were 95.7%, 97.5%, and 97.5% of our total operating revenues for the years ended September 30, 2023, 2022 and 2021, respectively.
Management believes that through its own employees, coupled with the human capital supplied by its independent contractors, it has sufficient human capital to operate its business successfully.
Management believes that through our own employees, coupled with the human capital supplied by our independent contractors, we have sufficient human capital to operate our business successfully.
Under our next largest agreement, our citrus produced is subject to a minimum floor price and maximum ceiling price and is based on a cost-plus structure. On each of May 18, 2020 and May 20, 2020, the Company entered into two new agreements to supply Tropicana, its largest customer, with citrus fruit.
Under our next largest agreement, our citrus produced is subject to a minimum floor price and maximum ceiling price and is based on a cost-plus structure. In May, 2020, we entered into two agreements to supply Tropicana, our largest customer, with citrus fruit.
Management believes that the Company's employee relations are favorable, that its relations with its independent contractors is favorable, and that the relations that the independent contractors and the Company have with the employees of the independent contractors is favorable.
Management believes that our employee relations are favorable, that our relations with our independent contractors is favorable, and that the relations that the independent contractors and we have with the employees of the independent contractors is favorable.
Our strategy is based on best-management practices of our agricultural operations and the environmental and conservation stewardship of our land and natural resources. We try to manage our land in a sustainable manner and evaluate the effect of changing land uses while considering new opportunities. Our commitment to environmental stewardship is fundamental to the Company’s core beliefs.
Our strategy is based on what we believe are best-management practices of our agricultural operations and the environmental and conservation stewardship of our land and natural resources. We try to manage our land in a sustainable manner to maximize value creation and to evaluate the effect of changing land uses while considering new opportunities.
The slight increase in the Tropicana revenue, as a percentage of sales, for the fiscal year ended September 30, 2022 is primarily due to the Grove Owners in June 2022 terminating the management relationship under the Property Management Agreement with the Company.
The slight increase in Tropicana revenue, as a percentage of sales, for the years ended September 30, 2023 and 2022 is primarily due to the Grove Owners terminating the Property Management Agreement in June 2022.
We believe that our relations with our employees are good. Workforce Housing We own and maintain 37 residential housing units located in various counties in Florida that we lease to employees and former employees. Our residential units provide affordable housing to many of our employees, including our agribusiness employees.
None of our employees are subject to a collective bargaining agreement. We believe that our relations with our employees are good. Workforce Housing We own and maintain 38 residential housing units located in various counties in Florida that we offer to employees. Our residential units provide affordable housing to many of our employees, including our agribusiness employees.
Land Management and Other Operations We own and manage land in Collier, Glades, and Hendry Counties and are engaged in land leasing for recreational and grazing purposes, conservation, and mining activities. Our Land Management and Other Operations land holdings total 24,687 gross acres, or 33.6% of our total acreage.
Land Management and Other Operations We own and manage land in Collier, Glades, and Hendry Counties and lease land for recreational and grazing purposes, conservation, and mining activities. Our Land Management and Other Operations land holdings total 22,854 gross acres, or 31.8% of our total acreage.
Alico is one of the largest citrus producers in the United States of America. Alico, Inc. operates two divisions: Alico Citrus, a citrus producer on its own land and as a manager of citrus groves for third parties, and Land Management and Other Operations, which includes land conservation, encompassing environmental services, land leasing and related support operations.
We operate two divisions: Alico Citrus, a citrus producer on its own land and as a manager of citrus groves for third parties, and Land Management and Other Operations, which includes land conservation, encompassing environmental services, land leasing and related support operations.
Our citrus produced for the processed citrus market in fiscal year 2022 under our largest agreement was subject to floor prices and ceiling prices.
Our citrus produced for the processed citrus market during the year ended September 30, 2023, under our largest agreement, was subject to floor prices and ceiling prices.
Environmental, Social and Governance (“ESG”) Alico is an agricultural company which, based upon its rich heritage and traditions, seeks not only to maximize value for its customers and stockholders, but also to enhance its legacy by employing sustainable practices in all aspects of operations including stewardship of both its natural and human resources.
Environmental, Social and Governance (“ESG”) We are an agricultural company which, based upon its rich heritage and traditions, seeks to maximize value for its customers and stockholders in the long term, which we believe includes employing sustainable practices in all aspects of operations including stewardship of both its natural and human resources.
The Company recognizes the increased emphasis by stockholders, business partners and other key constituents in recent years on ESG programs that are embedded into day-to-day business policies and practices. The Company is proud of its commitment to doing the right thing for communities, the environment, and its employees.
We recognize the increased emphasis by stockholders, business partners and other key constituents in recent years on ESG programs that are embedded into day-to-day business policies and practices. We are proud of our focus on the impacts of our business on our communities, the environment, and employees.
Termination of the Citrus Grove Management Agreement In June 2022, the Company was notified by a primary group of third-party grove owners, who are affiliated with each other (collectively, the “Grove Owners”) and for which the Company was managing groves that the Grove Owners were terminating the management relationship under a certain property management agreement dated as of July 16, 2020 (the “Property Management Agreement”) with the Company as the Grove Owners decided to exit the citrus business.
In June 2022, a group of third-party grove owners, who are affiliated with each other (collectively, the “Grove Owners”), for which we were managing groves under a Property Management Agreement executed on July 16, 2020 with the Grove Owners, under which we performed grove management services, terminated the management relationship under the Property Management Agreement with us as the Grove Owners decided to exit the citrus business.
We generally use multi-year contracts with citrus processors that include pricing structures based on a floor and ceiling price. Therefore, if pricing in the market is favorable relative to our floor price, we benefit from the incremental difference between the floor and the final market price to the extent it does not exceed the ceiling price.
Therefore, if pricing in the market is favorable, relative to our floor price, we benefit from the incremental difference between the floor and the final market price to the extent it does not exceed the ceiling price.
These new agreements were effective October 1, 2020, expire on July 31, 2024, and succeeded our existing largest agreement with this customer which expired at the end of September 2020.
These new agreements were effective October 1, 2020, expire on July 31, 2024, and succeeded our existing largest agreement with this customer which expired at the end of September 2020. On June 26, 2023 we renewed another agreement to supply Tropicana with citrus fruit, which expired after the fiscal year 2023 harvest season.
The Company, prior to this agreement, was already providing grove management services to several small third-party grove-owners on acres within the Company’s groves and continues to provide such services. Revenues generated from our grove management services were approximately 13.3%, 16.1%, and 5.1% of our total citrus revenues for the fiscal years ended September 30, 2022, 2021 and 2020, respectively.
We continue to provide grove management services to several small third-party grove- 6 Table of Contents owners on acres within our groves. Revenues generated from our grove management services were 3.2%, 13.3%, and 16.1% of our total citrus revenues for the years ended September 30, 2023, 2022 and 2021, respectively.
Based upon prior experience with serious storms of this nature, we expect it will take up to two full seasons or more for the groves to recover to pre-hurricane production levels. We maintain crop insurance and are working closely with our insurers and adjusters to evaluate and determine the amount of insurance recovery we may be entitled to, if any.
Based upon prior experience with serious storms of this nature, we expect it may take up to two full seasons or more for the groves to recover to pre-hurricane production levels.
Citrus Land Lease 6 The Company signed three agreements to lease approximately 2,100 of these citrus acres from the Grove Owners and thus have the rights to citrus production on such leased acreage for a one-year term at a cost of approximately $157,000.
Alico citrus groves total 48,949 gross acres or 68.2% of our land holdings. Citrus Land Lease On June 29, 2022, we signed three agreements to lease approximately 2,100 citrus acres from the grove owners and thus had the rights to citrus production on such leased acreage for a one-year term at a cost of $157 thousand.
The implementation of our disaster programs, our dedicated workforce, and experienced management appear to have limited the damage to our properties. Our approximately 48,900 gross acres of citrus groves, which are in Charlotte, Collier, DeSoto, Hardee, Hendry, Highlands and Polk Counties, sustained hurricane, or tropical storm force winds for varying durations of time.
Approximately 48,900 gross acres of our citrus groves, which are in Charlotte, Collier, DeSoto, Hardee, Hendry, Highlands and Polk Counties, sustained hurricane or tropical storm force winds for varying durations of time. While we lost a small percentage of trees, the force and duration of the storm impacted the majority of the groves.
In order to support and enhance health and safety practices, the Company routinely conducts safety training with employees to emphasize safety when conducting grove caretaking, general employee health, proper equipment operating techniques, office ergonomics and other important safety topics.
In order to support and enhance health and safety practices, we routinely conduct safety training with employees to emphasize safety when conducting grove caretaking, general employee health, proper equipment operating techniques, office ergonomics and other important safety topics. The COVID-19 pandemic underscored for us the importance of keeping our employees and the personnel provided by independent contractors safe and healthy.
Additionally, our reports, amendments thereto, proxy statements and other information are also made available, free of charge, on our investor relations website at ir.alicoinc.com as soon as reasonably practicable after we electronically file or furnish such information with the SEC.
Available Information Our reports filed with or furnished to the SEC pursuant to Sections 13(a) and 15(d) of the Exchange Act, are available, free of charge, on our investor relations website at ir.alicoinc.com as soon as reasonably practicable after we electronically file or furnish such information with the Securities and Exchange Commission (the “SEC”).
Our employees work in the following divisions: Alico Citrus 180 Land Management and Other Operations (1) 0 Corporate, General, Administrative and Other 26 Total employees 206 (1) There is one employee who is included in Corporate, General, Administrative and Other who oversees the Land Management and Other Operations. None of our employees are subject to a collective bargaining agreement.
We do not include our independent contractors in our number of employees because they are not employees. 9 Table of Contents Our employees work in the following divisions: Alico Citrus 168 Land Management and Other Operations (1) 0 Corporate, General, Administrative and Other 26 Total employees 194 (1) There is one employee who is included in Corporate, General, Administrative and Other who oversees the Land Management and Other Operations.
Revenues from Land Management and Other Operations were approximately 2.5%, 2.5%, and 3.4% of total operating revenues for the fiscal years ended September 30, 2022, 2021 and 2020, respectively.
Assets Held for Sale to the Consolidated Financial Statements included in this Annual Report for further information on ranch land sales. Revenues from Land Management and Other Operations were 4.3%, 2.5%, and 2.5% of total operating revenues for the years ended September 30, 2023, 2022 and 2021, respectively.
Employees live close to their work, which reduces traffic and commuting times. This unique employment benefit helps us maintain a dependable, long-term employee base.
Employees live close to their work, which reduces traffic and commuting times. This unique employment benefit helps us maintain a dependable, long-term employee base. Raw Materials Raw materials needed to cultivate the various crops grown by us consist primarily of fertilizers, herbicides, insecticides and fuel and are readily available from local suppliers.
Our sales to the fresh citrus market constituted approximately 1.4%, 0.6%, and 2.6% of our Alico Citrus revenues for the fiscal years ended September 30, 2022, 2021 and 2020, respectively. We produce numerous varieties for the fresh fruit market including grapefruit, navel and other fresh varieties.
This new agreement was effective August 31, 2023 and expires on August 31, 2025. Our sales to the fresh citrus market constituted 1.5%, 1.4%, and 0.6% of our Alico Citrus revenues for the years ended September 30, 2023, 2022 and 2021, respectively.
With employees, management and directors representing the diversity around the world, the Company can access stronger insights into different cultures and backgrounds, which ultimately helps the Company to better operate the business. As of September 30, 2022, ethnically diverse employees represent 73% of the Company’s Citrus operations, 32% of Corporate, General, Administrative and Other.
With employees, management and directors from diverse backgrounds, we can access stronger insights into different cultures and backgrounds, which ultimately helps us to better operate the business.
The COVID-19 pandemic has underscored for us the importance of keeping our employees and the personnel provided by independent contractors safe and healthy. In response to the pandemic, the Company has taken actions aligned with the Centers for Disease Control and Prevention to protect its workforce so that its workforce can more safely and effectively perform their work.
In response to the pandemic, we have taken actions aligned with the Centers for Disease Control and Prevention to protect our workforce so that our workforce can more safely and effectively perform their work. Inclusion and Diversity People are critical to our efforts to drive growth and deliver value for stockholders.
The overall decrease in sales to processed markets as a percentage of citrus revenues during the fiscal years ended September 30, 2022 and September 30, 2021 as compared to such percentage for the fiscal year ended September 30, 2020, was due to revenues generated under an agreement entered into on July 16, 2020 with a group of third-party grove owners (“Grove Owners”), who are affiliated with each other, to provide citrus grove caretaking and harvest and haul management services (“Grove Management Services”) for approximately 7,000 acres owned by the Grove Owners.
The overall increase in the sales to the processed markets as a percentage of citrus revenues during the year ended September 30, 2023, as compared to the years ended September 30, 2022 and 2021, is due to the termination of an agreement to provide grove management services to third-party grove owners, discussed further below.
The Company owns approximately 74,000 acres of land in eight Florida counties (Charlotte, Collier, DeSoto, Glades, Hardee, Hendry, Highlands and Polk), and approximately 90,000 acres of mineral rights throughout Florida. Alico holds these mineral rights on substantially all its owned acres, with additional mineral rights on other acres. Our principal lines of business are citrus groves and land management.
We hold these mineral rights on substantially all our owned acres, with additional mineral rights on other leased acres. Our principal lines of business are citrus groves and land management. We are one of the largest citrus producers in the United States of America.
Our Land Management and Other Operations acreage is detailed in the following table as of September 30, 2022: Acreage Hendry County 20,139 Glades County 526 Collier County 4,022 Total 24,687 On May 31, 2022, the Company sold approximately 400 acres of Alico Ranch to a third party for approximately $1,900,000 and recognized a gain of $1,700,000.
Our Land Management and Other Operations acreage is detailed in the following table as of September 30, 2023: Acreage Hendry County 18,722 Collier County 3,606 Glades County 526 Total 22,854 During the year ended September 30, 2023, we sold approximately 2,255 acres for $12,000 thousand and recognized a gain of $11,432 thousand (including approximately 85 acres for $439 thousand to Mr.
Alico presents its financial results and the related discussion based upon its two business segments: (i) Alico Citrus and (ii) Land Management and Other Operations. Recent Developments Hurricane Ian On September 28, 2022, Hurricane Ian made landfall on the southwest coast of Florida and a majority of the Company’s groves were impacted by the storm.
We present our financial results and the related discussion based upon our two business segments: (i) Alico Citrus and (ii) Land Management and Other Operations.
The Company is currently working with Florida Citrus Mutual, the industry trade group, and government agencies on federal relief programs. Federal Relief Program – Hurricane Irma The Company was eligible for Hurricane Irma federal relief programs for block grants that were being administered through the State of Florida.
Federal Relief Program – Hurricane Irma We were eligible for Hurricane Irma federal relief programs for block grants that were being administered through the State of Florida. We have received a total of $26,963 thousand in Hurricane Irma federal relief through the year ended September 30, 2023.
Societal Well-Being The Company remains committed to a healthy and equitable society to ensure our collective well-being for future generations. In the past year, we provided cash grants and supporting donations to support our communities and promote health and safety, education, and justice. Available Information We will provide electronic copies of our SEC filings free of charge upon request.
In the past year, we provided cash grants and supporting donations to support our communities and promote health, safety and education.
Additionally, on the same terms and conditions, the Company has the right to extend two of these leases representing approximately 1,600 acres for two one-year periods and has the right to extend the third lease with a one-year option. These leases expand the Company’s citrus production acreage by approximately 6% to approximately 36,000 net citrus acres.
On June 26, 2023, we extended the lease representing approximately 1,115 acres for one-year through June 30, 2024. Additionally, on the same terms and conditions, we have the right to extend this lease representing 1,115 acres for two one-year periods.
Federal Relief Program – Hurricane Ian It remains unclear whether there may be Hurricane Ian federal relief programs 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.
Federal Relief Program – Hurricane Ian 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 we will be eligible.
These federal relief proceeds are included as a reduction to operating expenses in the Consolidated Statements of Operations. The Land We Manage We regularly review our land-holdings to determine the best use of each parcel based upon our management expertise. Our total return profile is a combination of operating income potential and long-term appreciation.
During the years ended September 30, 2023, 2022 and 2021 we received Hurricane Irma federal relief proceeds of $1,315 thousand, $1,123 thousand and $4,299 thousand, respectively. The Land We Manage We regularly review our land-holdings to determine the best use of each parcel based upon our management expertise.
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Item 1. B usiness Alico, Inc. (“Alico”) was incorporated under the laws of the state of Florida in 1960. Collectively with its subsidiaries (the “Company”, “we”, “us” or “our”), our business and operations are described below.
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Item 1. Business Overview Alico was incorporated under the laws of the State of Florida in 1960. Alico is an agribusiness with a legacy of achievement and innovation in citrus and conservation. We own approximately 72,000 acres of land in eight Florida counties (Charlotte, Collier, DeSoto, Glades, Hardee, Hendry, Highlands and Polk), and also mineral rights throughout Florida.
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For detailed financial information with respect to our business and our operations, see Management’s Discussion and Analysis of Financial Condition and Results of Operations which is included in Item 7 in this Annual Report on Form 10-K, and the accompanying Consolidated Financial Statements and the related Notes, which are included in Item 8.
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Recent Developments Florida Forever Program Land Sale On September 18, 2023, we signed an Option Agreement for Sale and Purchase (“Option Agreement”) with the Board of Trustees of the Internal Improvement Trust Fund of the State of Florida for the sale of 17,229 acres of the Alico Ranch.
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In addition, general information concerning our Company can be found on our website, the internet address of which is http://www.alicoinc.com . All of our filings with the U.S.
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On September 21, 2023, Florida Governor Ron DeSantis and the Florida Cabinet approved the purchase of this land from Alico, under the Florida Forever Program, for approximately $77,600 thousand.
Removed
Securities and Exchange Commission (the “SEC”) including, but not limited to, the Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any amendments thereto, are available free of charge on our website as soon as reasonably practicable after such material is electronically filed or furnished with the SEC.
Added
The sale is expected to close between December 2023 and February 2024, and we intend to use the proceeds from this sale to repay variable rate debt and for general corporate purposes. Hurricane Ian On September 28, 2022, Hurricane Ian made landfall on the southwest coast of Florida and a majority of our groves were adversely impacted by the storm.
Removed
Our recent press releases and information regarding corporate governance, including the charters of our audit, compensation, nominating and governance, and sustainability and corporate responsibility committees, as well as our code of business conduct and ethics are also available to be viewed or downloaded electronically at http://www.alicoinc.com .
Added
The impact of Hurricane Ian has affected our year ended September 30, 2023 fruit production as we accelerated the harvest to maximize box production for both our Early and Mid-Season and Valencia harvest, which was completed earlier than the prior year harvest.
Removed
Unless explicitly stated herein, the information on our website is not incorporated by reference into this Annual Report on Form 10-K and the Company disclaims any such incorporation by reference. Overview Alico is an agribusiness with a legacy of achievement and innovation in citrus and conservation.
Added
We maintain crop insurance and property and casualty insurance and have received, as of September 30, 2023, $27,389 thousand in proceeds for crop claims and $839 thousand relating to property and casualty damage claims. These insurance proceeds are included as a reduction to operating expenses in the Consolidated Statements of Operations.
Removed
The full impact of Hurricane Ian on Alico’s operations is still being assessed at this time, but we believe the lessons learned over the past 124 years, especially since Hurricane Irma in 2017, allowed us to be better prepared prior to landfall and to begin recovery more rapidly after impact.
Added
We intend to take advantage of any such available programs as and when they become available. We are 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.
Removed
Based upon ongoing field assessment, the Company has identified significant fruit drop since the impact of the storm. While we lost a small percentage of trees, the force and duration of the storm impacted the majority of the groves.
Added
Citrus Greening Treatment In 2022, we began testing a new application of the citrus greening therapy Oxytetracycline (“OTC”), which is used in citrus and other crops.
Removed
We are also working with Florida Citrus Mutual, the industry trade group, and government agencies on securing potential federal relief programs. 4 Departure and Appointment of Chief Financial Officer On May 17, 2022, Richard Rallo notified the Company of his decision to resign from his role as the Company’s Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) effective as of May 31, 2022.
Added
Although not a cure for citrus greening, this OTC application is expected to mitigate some of the impacts of citrus greening and is expected to decrease the rate of fruit drop and improve fruit quality. After a review of the new application method by the U.S.
Removed
Mr. Rallo’s decision to resign was for personal reasons to eliminate extensive travel and/or avoid relocation to Florida and was not related to any disagreement with the Company or its independent registered public accountants on any matter relating to the Company’s financial or accounting operations, policies, or practices. Mr.
Added
Environmental Protection Agency, the Florida Department of Agriculture and Consumer Services (“FDACS”) granted a special local-need registration (24c) on October 28, 2022. We began treating our trees on 4 Table of Contents January 16, 2023, as the product and application devices became available, and as of September 30, 2023, had treated over 35% of our trees.
Removed
Rallo has agreed to provide consulting services to the Company through December 31, 2022 and has been providing such services. On September 6, 2022, the Company announced the appointment of Perry G. Del Vecchio, age 55, as the Chief Financial Officer (Principal Financial and Accounting Officer) of the Company, effective as of September 6, 2022. Mr.
Added
The extent of any benefit of the OTC application will not be measurable until the completion of the harvest for the year ended September 30, 2024. Sales of Land During the year ended September 30, 2023, we sold approximately 2,255 acres to third parties for approximately $12,000 thousand and recognized a gain of $11,432 thousand.
Removed
Del Vecchio is responsible for all corporate finance, treasury and accounting functions of the Company and reports directly to John Kiernan, the Company's President and Chief Executive Officer. Employment and Bonus Agreement On April 1, 2022, the Company entered into an amended and restated employment agreement with John E. Kiernan (the “Employment Agreement”).
Added
As of September 30, 2023, we have received all funds due under the Florida Citrus Recovery Block Grant (“CRBG”) program. These federal relief proceeds are included as a reduction to operating expenses in the Consolidated Statements of Operations.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

80 edited+21 added−28 removed90 unchanged
Biggest changePotential negative impacts of the pandemic could include, but are not limited to, the following: • Reduction in customer demand for citrus products and decreased consumer spending levels, which could materially and adversely affect our results of operations; • Potential disruption of services and deliveries of equipment and supplies on which we rely to produce and deliver our harvested citrus to producers and fulfilling deliveries to production plants, any of which could materially and adversely affect our business or reputation; • We may be unable to obtain financing in the current economic environment on terms that are favorable or acceptable to us, or at all, which could impair our cash flows and restrict our ability to execute on our strategic initiatives and react to changes in our business or the environment; • There could be increased volatility in our stock price related to the pandemic, which could result in the loss of some or all of the value of an investment in the Company; • Our ability to maintain our workforce during these uncertain times, which could materially and adversely affect our results of operations; • Increase in employee absenteeism of employees of the Company and of our independent contractor service providers (such as contracted field workers) due to fear of infection, which could materially and adversely affect our results of operations; • Increase in possible lawsuits or regulatory actions due to COVID-19 spread in the workplace which could materially and adversely affect our results of operations; 21 • Spread of COVID-19 in our workplace, which could materially and adversely affect our business and reputation; • Increase in the possibility of cybersecurity-related events such as COVID-19 themed phishing attacks and other security challenges, particularly as attributable to a substantial number of our employees and suppliers working remotely, which could materially and adversely affect our business and reputation; and • Adverse impact on the productivity of management and our employees that are working remotely, including an impact on our ability to maintain our financial reporting processes and related controls and our ability to manage complex accounting issues presented by the COVID-19 pandemic which could materially and adversely affect our business and reputation.
Biggest changePotential negative impacts of these uncertain conditions could include, but are not limited to, the following: • Reduction in customer demand for citrus products and decreased consumer spending levels, which could materially and adversely affect our results of operations; • Potential disruption of services and deliveries of equipment and supplies on which we rely to produce and deliver our harvested citrus to producers and fulfilling deliveries to production plants, any of which could materially and adversely affect our business or reputation; • We may be unable to obtain financing in the current economic environment on terms that are favorable or acceptable to us, or at all, which could impair our cash flows and restrict our ability to execute on our strategic initiatives and react to changes in our business or the environment; • There could be increased volatility in our stock price, which could result in the loss of some or all of the value of an investment in the Company; and • Our ability to maintain our workforce during these uncertain times, which could materially and adversely affect our results of operations.
Our citrus business is seasonal. Our citrus groves produce the majority of our annual operating revenues and the citrus business is seasonal because it is tied to the growing and picking seasons.
Our citrus groves produce the majority of our annual operating revenues and the citrus business is seasonal because it is tied to the growing and picking seasons.
Our citrus division is one of the largest citrus producers in the United States and because of the significance of the revenues derived from this business, we are more vulnerable to adverse events or market conditions affecting our citrus business, in particular, or the citrus business, generally, which could have a significant adversely impact on our overall results of operations, financial condition and cash flows.
Our citrus division is one of the largest citrus producers in the United States, and because of the significance of the revenues derived from this business, we are vulnerable to adverse events or market conditions affecting our citrus business, in particular, or the citrus business, generally, which could have a significant adversely impact on our overall results of operations, financial condition and cash flows.
In addition, we cannot assure investors 22 that we would be able to take any of these actions on terms acceptable to us, or at all, or that these actions would enable us to continue to satisfy our capital requirements or that these actions would be permitted under the terms of our various debt agreements.
In addition, we cannot assure investors that we would be able to take any of these actions on terms acceptable to us, or at all, or that these actions would enable us to continue to satisfy our capital requirements, or that these actions would be permitted under the terms of our various debt agreements.
Historically, the second and third quarters of our fiscal year generally produce the majority of our annual revenues, and our working capital requirements are typically greater in the first and fourth quarters of our fiscal year coinciding with our planting cycles.
Historically, the second and third quarters of our year generally produce the majority of our annual revenues, and our working capital requirements are typically greater in the first and fourth quarters of our year, coinciding with our planting cycles.
Agricultural operations traditionally provide almost all of our operating revenues with citrus being the largest portion and are subject to supply and demand pricing.
Agricultural operations traditionally provide almost all of our operating revenues, with citrus being the largest portion and subject to supply and demand pricing.
With the sale of a majority ownership of Tropicana by PepsiCo to a French private equity firm (the “Firm”), there is some heightened risk and uncertainty in our current relationship with Tropicana, which potentially could result in a significant reduction in revenues and cash flows if that relationship were to be changed as a result.
In addition, with the sale of a majority ownership of Tropicana by PepsiCo to a French private equity firm (the “Firm”), there is some heightened risk and uncertainty in our current relationship with Tropicana, which potentially could result in a significant reduction in revenues and cash flows if that relationship were to be changed.
If we fail to maintain the adequacy of our internal controls, including any failure to implement required new or improved controls, or if we experience difficulties in their implementation, our business and operating results could be harmed, and we could fail to meet our financial reporting obligations, which in turn could affect the market price of our securities.
In future periods, if we fail to maintain the adequacy of our internal controls, including any failure to implement required new or improved controls, or if we experience difficulties in their implementation, our business and operating results could be harmed, and we could fail to meet our financial reporting obligations, which in turn could affect the market price of our securities.
Inflation can have a major adverse impact on our citrus operations and there has been significant recent inflationary developments in the United States. It is uncertain as to whether these recent inflationary pressures will continue, will increase or will be brought under control. Our citrus operations are most affected by escalating costs and unpredictable revenues and high irrigation water costs.
Inflation can have a major adverse impact on our citrus operations and there have been significant ongoing inflationary developments in the United States. It is uncertain as to whether these ongoing inflationary pressures will continue, will increase or will be brought under control. Our citrus operations are most affected by escalating costs and unpredictable revenues and high irrigation water costs.
Harm to the Company’s reputation could have an adverse effect on the business, financial condition and results of operations. Maintaining a strong reputation with fruit processors and third-party partners is critical to the success of the Company’s business.
Harm to our reputation could have an adverse effect on our business, financial condition and results of operations. Maintaining a strong reputation with fruit processors and third-party partners is critical to the success of our business.
If the Firm caused Tropicana to reduce the volume of oranges purchased from us and/or purchased from owners of groves that we manage, we would need to find, and/or the owners of groves that we manage would need to find or work with us to find, replacement buyers to purchase any remaining crop of our and/or of the owners of the groves we manage, which could take time and expense and may result in less favorable terms of sale.
If Tropicana were to reduce the volume of oranges purchased from us and/or purchased from owners of groves that we manage, we would need to find, and/or the owners of groves that we manage would need to find or work with us to find, replacement buyers to purchase any remaining crop of our and/or of the owners of the groves we manage, which could take time and expense and may result in less favorable terms of sale.
Despite these efforts, the Company may not be successful in achieving its goals, might provide materially inaccurate information, or might receive negative publicity about the Company, including relating to product safety, quality, efficacy, ESG or similar issues, whether real or perceived, and reputational damage could occur.
Despite these efforts, we may not be successful in achieving our goals, might provide materially inaccurate information, or might receive negative publicity about the Company, including relating to product safety, quality, efficacy, ESG or similar issues, whether real or perceived, and reputational damage could occur.
In addition, perceptions of us among customers, lenders, investors, securities analysts and others could also be adversely affected. Current material weakness or any weaknesses or deficiencies identified in the future could also hurt confidence in our business and the accuracy and completeness of our financial statements, and adversely affect our ability to do business with these groups.
In addition, perceptions of us among customers, lenders, investors, securities analysts and others could also be adversely affected. Any weaknesses or deficiencies identified in the future could also hurt confidence in our business and the accuracy and completeness of our financial statements, and adversely affect our ability to do business with these groups.
Our ability to perform the grove management services will be affected by various factors, including, among other things, our ability to maintain sufficient personnel and retain key personnel, the ability of the independent contractors whom we engage to assist in providing these services to maintain sufficient personnel and retain key personnel, and the number of acres and groves that we will manage.
Our ability to perform the grove management services has in the past and will continue to be affected by various factors, including, among other things, our ability to maintain sufficient personnel and retain key personnel, the ability of the independent contractors whom we engage to assist in providing these services to maintain sufficient personnel and retain key personnel, and the number of acres and groves that we will manage.
Risks Related to our Common Stock We may not be able to continue to pay or maintain our cash dividends on our common stock and the failure to do so may negatively affect our share price.
We may not be able to continue to pay or maintain our cash dividends on our common stock and the failure to do so may negatively affect our share price.
Item 1A. Ri sk Factors Our business and results of operations are subject to numerous risks and uncertainties, many of which are beyond our control. The following is a description of key known factors that we believe may materially affect our business, financial condition, results of operations or cash flows.
Item 1A. Risk Factors Our business and results of operations are subject to numerous risks and uncertainties, many of which are beyond our control. The following is a description of key known factors that we believe may materially affect our business, financial condition, results of operations or cash flows.
Our failure to effectively perform grove management functions or to effectively manage an expanded portfolio of groves could materially and adversely affect our business, financial condition, and results of operations.
Our failure to effectively perform grove management services, or to effectively manage an expanded portfolio of groves, could materially and adversely affect our business, financial condition, and results of operations.
In extreme cases, entire harvests may be lost in some geographic areas. Citrus groves are subject to damage from frost and freezes, and this has happened periodically in the recent past, including most recently the impact from the freeze in the last week of January 2022.
In extreme cases, entire harvests may be lost in some geographic areas. Citrus groves are subject to damage from frost and freezes, and this has happened periodically in the recent past, including the freeze in the last week of January 2022.
These laws, rules and regulations may increase our legal and financial compliance costs, which could adversely affect the trading price of our common stock.
These laws, rules and regulations may continue to increase our legal and financial compliance costs, which could adversely affect the trading price of our common stock.
In addition, environmental laws that apply to a given site can vary greatly according to the site’s location, its present and former uses, and other factors such as the presence of wetlands or endangered species on the site. Management monitors environmental legislation and requirements and makes every effort to remain in compliance with such regulations.
In addition, environmental laws that apply to a given site can vary greatly according to the site’s location, its present and former uses, and other factors such as the presence of wetlands or endangered species on the site. Management monitors environmental legislation and requirements and work to remain in compliance with such regulations.
High fixed water costs related to our citrus lands will continue to adversely affect earnings. Prices received for many of our products are dependent upon prevailing market conditions and commodity prices.
High fixed water costs related to our citrus lands will continue to adversely affect 17 Table of Contents earnings. Prices received for many of our products are dependent upon prevailing market conditions and commodity prices.
No assurance can be made that we will continue to be successful in attracting and retaining skilled personnel or in integrating any new personnel into our organization or that the independent contractors whom we engage to assist in providing these services will continue to be successful in attracting and retaining skilled personnel or in integrating any new personnel into their respective organizations.
No assurance can be made that we will continue to be successful in attracting and retaining skilled personnel or in integrating any new personnel into our organization or that the independent contractors whom we engage to assist in providing these services will continue to be 11 Table of Contents successful in attracting and retaining skilled personnel or in integrating any new personnel into their respective organizations.
For example, (i) in fiscal year 2015, we acquired three Florida citrus properties, including Orange-Co and Silver Nip Citrus, which resulted in our citrus division being one of the largest citrus producers in the United States, and (ii) in October 2020 we acquired another Florida citrus property.
For example, (i) in the year ended September 30, 2015, we acquired three Florida citrus properties, including Orange-Co and Silver Nip Citrus, which resulted in our citrus division being one of the largest citrus producers in the United States; and (ii) in October 2020 we acquired another Florida citrus property.
Most recently, we sold certain ranch acres to the State of Florida and because these acres would have been critically important for carrying out the Company’s planned dispersed water storage project, the Company is no longer pursuing permit approval relating to this dispersed water storage project.
Most recently, we sold certain ranch acres to the State of Florida, and because these acres would have been critically important for carrying out our planned dispersed water storage project, we are no longer pursuing permit approval relating to this dispersed water storage project.
In addition, the Company’s products could face withdrawal, recall or other quality issues, which could lead to decreased demand for the Company’s products or services and reputational damage. 16 Widespread use of social media and networking sites by consumers has greatly increased the accessibility and speed of dissemination of information.
In addition, our products could face withdrawal, recall or other quality issues, which could lead to decreased demand for our products or services and reputational damage. 13 Table of Contents Widespread use of social media and networking sites by consumers has greatly increased the accessibility and speed of dissemination of information.
If the Company does not adapt to or comply with new regulations or fails to meet its ESG goals or meet the evolving investor, industry or stakeholder expectations and standards, or if the Company is perceived to have not responded appropriately to the growing concern for ESG issues, fruit processors and consumers may choose to stop purchasing our products or purchase products from another company or a competitor, and the Company’s reputation, business, financial condition, results of operations and cash flows may be adversely affected.
If we do not adapt to or comply with new regulations or fail to meet our ESG goals, or meet the evolving investor, industry or stakeholder expectations and standards, or if we are perceived to have not responded appropriately to the growing concern for ESG issues, fruit processors and consumers may choose to stop purchasing our products or purchase products from another company or a competitor, and our reputation, business, financial condition, results of operations and cash flows may be adversely affected.
It remains unclear how the U.S. administration and U.S. Congress will approach immigration reform and enforcement. However, if new immigration legislation is enacted in the U.S. and/or if enforcement actions are taken against available personnel, such legislation and/or enforcement activities may contain provisions that could significantly reduce the number and availability of workers.
Congress will approach immigration reform and enforcement. If new immigration legislation is enacted in the U.S. and/or if enforcement actions are taken against available personnel, such legislation and/or enforcement activities may contain provisions that could significantly reduce the number and availability of workers.
The availability and number of such workers is subject to decrease if there are changes in the U.S. immigration laws. Immigration reform and enforcement has been attracting significant attention from the U.S. Government (particularly in the current U.S. administration and U.S. Congress), with enforcement operations taking place across the country, resulting in arrests and detentions of unauthorized workers.
The availability and number of such workers is subject to decrease if there are changes in the U.S. immigration laws. Immigration reform and enforcement has been attracting significant attention from the U.S. Government, with enforcement operations taking place across the country, resulting in arrests and detentions of unauthorized workers. It remains unclear how the U.S. administration and U.S.
An extended interruption in our ability to harvest and haul our products could have a material adverse effect on our business, financial condition and results of operations.
An extended interruption in our ability to harvest and haul our products could have a material adverse effect on our business, financial condition and results of operations. Similarly, any extended disruption in the distribution of our products could have a material adverse effect on our business, financial condition and results of operations.
Any disruption in these relationships could harm our revenue. Additionally, if certain criteria are not met under one of our contracts with Tropicana, we could experience a significant reduction in revenues and cash flows. The Company's contracts with Tropicana accounted for 79.7%, 77.5%, and 86.9% of the Company's revenues in fiscal years 2022, 2021 and 2020, respectively.
Any disruption in these relationships could harm our revenue. Additionally, if certain criteria are not met under one of our contracts with Tropicana, we could experience a significant reduction in revenues and cash flows. Our contracts with Tropicana accounted for 81.3%, 79.7%, and 77.5% of our revenues in the years ended September 30, 2023, 2022 and 2021, respectively.
While such dispositions increase the amount of cash available to us, it could also (i) result in a potential loss of significant operating revenues and income streams that we might not be able to replace, (ii) make our business less diversified and (iii) could ultimately have a negative impact on our results of operations, financial condition and cash flows.
Such dispositions could (i) result in a potential loss of significant operating revenues and income streams that we might not be able to replace, (ii) make our business less diversified, and (iii) ultimately have a negative impact on our results of operations, financial condition and cash flows. Our citrus business is seasonal.
The Company devotes significant time and resources to training programs, relating to, among other things, ethics, compliance and product safety and quality, as well as sustainability goals, and has published ESG goals (i.e., environmental, sustainability and governance), including relating to environmental impact and sustainability and inclusion and diversity, as part of its ESG Strategy.
We devote significant time and resources to training programs, relating to, among other things, ethics, compliance and product safety and quality, as well as sustainability goals, and have published ESG goals (i.e., environmental, social and governance), including relating to environmental impact and sustainability and inclusion and diversity, as part of our ESG strategy.
These taxes were based upon the agricultural use (“Green Belt”) values determined by the county property appraisers in which counties we own land, of approximately $85,159,000, $82,790,000, and $87,976,000 for the fiscal years ended September 30, 2022, 2021 and 2020, respectively, which differs significantly from the fair values determined by the county property appraisers of approximately $391,049,000, $467,948,000, and $463,799,000, respectively.
These taxes were based upon the agricultural use (“Green Belt”) values determined by the county property appraisers in which counties we own land, of $90,481 thousand, $85,159 thousand, and $82,790 thousand for the years ended September 30, 2023, 2022 and 2021, respectively, which differs significantly from the fair values determined by the county property appraisers of $419,915 thousand, $391,049 thousand, and $467,948 thousand, respectively.
While we are subject to governmental inspection and regulations and believe our facilities comply in all material respects with all applicable laws and regulations, we cannot be sure that our agricultural products will not cause a health-related illness in the future or that we will not be subject to claims or lawsuits relating to such matters.
We are subject to governmental inspection and regulations and we cannot be sure that our agricultural products will not cause a health-related illness in the future or that we will not be subject to claims or lawsuits relating to such matters.
As a result, if market conditions and commodity prices do not enable us to pass along such cost increases, these recent and future inflationary pressures would likely negatively affect our results of operations, cash flows and/or financial position. Rising inflation and the deadly conflict in Ukraine could adversely affect the Company’s business, financial condition, results of operations and cash flows.
As a result, if market conditions and commodity prices do not enable us to pass along such cost increases, these recent and future inflationary pressures would likely negatively affect our results of operations, cash flows and/or financial position.
We may be unable to successfully realize the financial, operational, and other benefits we anticipate from our acquisitions and our failure to do so could adversely affect our business, results of operations, financial condition and cash flows. Dispositions of our assets may adversely affect our future results of operations.
We may be unable to successfully realize the financial, operational, and other benefits we anticipate from our acquisitions and our failure to do so could adversely affect our business, results of operations, financial condition and cash flows. We also routinely evaluate the benefits of disposing of certain of our assets, which could include the exit from lines of business.
A significant reduction in available citrus from our citrus groves could decrease our operating revenues and materially adversely affect our business, financial condition, results of operations and cash flows.
A significant reduction in available citrus from our citrus groves could decrease our operating revenues and materially adversely affect our business, financial condition, results of operations and cash flows. A significant portion of our revenues are derived from our citrus business and any adverse event affecting such business could disproportionately harm our business.
The Company currently has citrus supply contracts with Tropicana that expire in both 2023 and 2024, with the majority expiring in 2024.
We currently have citrus supply contracts with Tropicana that expire in both 2024 and 2025, with the majority expiring in 2024.
For the fiscal years ended September 30, 2022, 2021 and 2020, we paid approximately $2,679,000, $2,570,000, and $2,714,000 in real estate taxes, respectively.
For the years ended September 30, 2023, 2022 and 2021, we paid $2,786 thousand, $2,679 thousand, and $2,570 thousand in real estate taxes, respectively.
We have historically paid regular quarterly dividends to the holders of our common stock and in June 2021 announced an increase in our quarterly dividend to $0.50 per common share, from $0.18 per common share.
We have historically paid regular quarterly dividends to the holders of our common stock and in December 2022 announced a reduction in our quarterly dividend to $0.05 per common share, from $0.50 per common share.
As a result, climate change could negatively affect our financial condition and results of operations. ESG issues, including those related to climate change and sustainability, may have an adverse effect on our business, financial condition, results of operations, and cash flows and damage our reputation. Companies across all industries are facing increasing scrutiny relating to their ESG policies.
ESG issues, including those related to climate change and sustainability, may have an adverse effect on our business, financial condition, results of operations, and cash flows and damage our reputation. Companies across all industries are facing increasing and evolving scrutiny relating to their ESG policies, initiatives and disclosures from governments, regulators, investors, consumers, employees and other stakeholders.
We expect that we will depend primarily upon our citrus operations to provide funds to pay our corporate and general expenses and to pay any amounts that may become due under any credit facilities and any other indebtedness we may incur. In addition, there are factors beyond our control that could negatively affect our citrus business revenue stream.
We expect that we will depend primarily upon our citrus operations to provide funds to pay our corporate and general expenses and to pay any amounts that may become due under any credit facilities and any other indebtedness we may incur.
We also routinely evaluate the benefits of disposing of certain of our assets which could include the exit from lines of business. For example, in November of 2014, we sold significant sugarcane assets and we are no longer involved in the sugarcane business and, in January of 2018, we sold our breeding herd and no longer engage in cattle operations.
For example, in November of 2014, we sold significant sugarcane assets and we are no longer involved in the sugarcane business and, in January of 2018, we sold our breeding herd and no longer engage in cattle operations.
We cannot assure that we will be able to successfully identify suitable acquisition opportunities, negotiate appropriate acquisition terms, or obtain any financing that may be needed to consummate such acquisitions or complete proposed acquisitions.
We may fail to realize all of the anticipated benefits of these acquisitions, which could reduce our anticipated results. We cannot assure that we will be able to successfully identify suitable acquisition opportunities, negotiate appropriate acquisition terms, or obtain any financing that may be needed to consummate such acquisitions or complete proposed acquisitions.
The restatements and any resulting investigations, legal or administrative proceedings could result in fines, injunctions, orders, and penalties which could materially adversely affect our business, financial condition, results of operations, and liquidity. The restatements, and any investigations, legal or administrative proceedings that could result therefrom, may divert our management’s time and attention and cause us to incur substantial costs.
Any restatements and resulting investigations, legal or administrative proceedings could result in fines, injunctions, orders, and penalties which could materially adversely affect our business, financial condition, results of operations, and liquidity.
As of September 30, 2022, we had approximately $106,696,000 in principal amount of indebtedness outstanding under our secured credit facilities and an additional availability of approximately $89,762,000 is available under our working capital and revolving lines of credit.
As of September 30, 2023, we had $129,319 thousand in principal amount of indebtedness outstanding under our secured credit facilities, and an additional availability of $70,030 thousand is available under our working capital and revolving lines of credit.
Risks Related to Our Indebtedness We maintain a significant amount of indebtedness which could adversely affect our financial condition, results of operations or cash flows and may limit our operational and financing flexibility and negatively impact our business.
Such disruptions could adversely impact our ability to track sales and could interrupt other operational or financial processes, which in turn could adversely affect our financial results, stock price and reputation. 18 Table of Contents Risks Related to Our Indebtedness We maintain a significant amount of indebtedness, which could adversely affect our financial condition, results of operations or cash flows, and may limit our operational and financing flexibility and negatively impact our business.
Changes in state law or county policy regarding the granting of agricultural classification or calculation of "Green Belt" values or average millage rates could significantly and adversely impact our results of operations, cash flows and/or financial position.
Changes in state law or county policy regarding the granting of agricultural classification or calculation of “Green Belt” values or average millage rates could significantly and adversely impact our results of operations, cash flows and/or financial position. Liability for the use of fertilizers, pesticides, herbicides and other potentially hazardous substances could increase our costs.
Our Board of Directors may, in its discretion, decrease the level of cash dividends or entirely discontinue the payment of cash dividends. The reduction or elimination of cash dividends may negatively affect the market price of our common stock. There can be no assurance that we will resume the repurchase of shares of our common stock.
Our Board of Directors may, at its discretion, decrease the level of cash dividends, or entirely discontinue the payment of cash dividends. The reduction or elimination of cash dividends may negatively affect the market price of our common stock.
Many of the items involved in our business, such as oranges, must be sold more quickly than other produce our competitors may produce, such as lemons.
Fresh produce is highly perishable and generally must be brought to market and sold soon after harvest. Many of the items involved in our business, such as oranges, must be sold more quickly than other produce our competitors may produce, such as lemons.
In addition, even if we are successful in strengthening our controls and procedures, those controls and procedures may not be adequate to prevent or identify irregularities or ensure the fair and accurate presentation of our financial statements included in our periodic reports filed with the SEC.
We can give no assurances that our controls and procedures will be adequate to prevent or identify irregularities or ensure the fair and accurate presentation of our financial statements included in our periodic reports filed with the SEC.
Moreover, claims or liabilities of this sort might not be covered or fully covered by our insurance or by any rights of indemnity or contribution that we may have against others.
Moreover, claims or liabilities of this sort might not be covered or fully covered by our insurance or by any rights of indemnity or contribution that we may have against others. We cannot be sure that we will not incur claims or liabilities for which we are not insured or that exceed the amount of our product liability insurance coverage.
Our acquisition of additional agricultural assets and other businesses could pose risks. We seek to opportunistically acquire new agricultural assets from time to time that we believe would complement our business.
We seek to opportunistically acquire new agricultural assets from time to time that we believe would complement our business.
The availability of water is regulated by the state of Florida through water management districts which have jurisdiction over various geographic regions in which our lands are located. Currently, 15 we have permits in place for the next 15 to 20 years for the use of underground and surface water which are believed to be adequate for our agricultural needs.
Currently, we have permits in place for the next 15 to 20 years for the use of underground and surface water which are believed to be adequate for our agricultural needs.
Our citrus groves are geographically concentrated in Florida and the effects of adverse weather conditions including hurricanes and tropical storms could adversely affect our results of operations, financial position and cash flows. Our citrus operations are concentrated in central and south Florida with our groves located in parcels in DeSoto, Polk, Collier, Hendry, Charlotte, Highlands, and Hardee Counties.
Our citrus operations are concentrated in central and south Florida, with our groves located in parcels in DeSoto, Polk, Collier, Hendry, Charlotte, Highlands, and Hardee Counties. Because our groves are located in close proximity to each other, the impact of adverse weather conditions may be material to our results of operations, financial position and cash flows.
Depending on where any particular hurricane or tropical storm makes landfall, our properties could experience significant, if not catastrophic damage. Hurricanes and tropical storms have the potential to destroy crops and impact citrus production through the loss of fruit and destruction of trees and/or plants either as a result of high winds or through the spread of windblown disease.
Hurricanes and tropical storms have the potential to destroy crops and impact citrus production through the loss of fruit and destruction of trees and/or plants either as a result of high winds or through the spread of windblown disease.
In some cases, the fruit is damaged or ruined; in the case of extended periods of cold, the trees can also be damaged or killed. These factors can increase costs, decrease revenues and lead to additional charges to earnings, which may have a material adverse effect on our business, results of operations, financial condition and cash flows.
These factors can 10 Table of Contents increase costs, decrease revenues and lead to additional charges to earnings, which may have a material adverse effect on our business, results of operations, financial condition and cash flows.
In addition, we may incur higher than expected or unanticipated costs in implementing our strategic initiatives, attempting to attract revenue opportunities or changing our strategies.
Transition and changes in our strategic initiatives may also create uncertainty in our employees, customers and partners that could adversely affect our business and revenues. In addition, we may incur higher than expected or unanticipated costs in implementing our strategic initiatives, attempting to attract revenue opportunities or changing our strategies.
Such investigations can also lead to fines or injunctions or orders with respect to future activities. At this point, we are unable to predict whether the SEC or any other regulatory agencies will commence any investigations or commence legal action.
At this point, we are unable to predict whether the SEC or any other regulatory agencies will commence any investigations or commence legal action in connection with the restatements discussed above.
Accordingly, a reduction in the government’s orange juice tariff could adversely impact our results of operations. Our earnings are sensitive to fluctuations in market supply and prices and demand for our products. Excess supplies often cause severe price competition in our industry.
The competition we face from certain foreign suppliers of orange juice is mitigated by a governmentally-imposed tariff on orange imports. Accordingly, a reduction in the government’s orange juice tariff could adversely impact our results of operations. Our earnings are sensitive to fluctuations in market supply and prices and demand for our products.
There have also been changing consumer preferences for natural or organic products and ingredients and increased consumer concerns or perceptions (whether accurate or inaccurate) regarding the effects of substances present in certain consumer products.
In particular, certain customers, investors and other stakeholders are increasingly focusing on environmental issues, including climate change, water use, deforestation, plastic waste, and other sustainability concerns. There have also been changing consumer preferences for natural or organic products and ingredients and increased consumer concerns or perceptions (whether accurate or inaccurate) regarding the effects of substances present in certain consumer products.
Growing conditions in various parts of the world, particularly weather conditions such as windstorms, floods, droughts and freezes, as well as diseases and pests, are primary factors affecting market prices because of their influence on the supply and quality of product. 17 Fresh produce is highly perishable and generally must be brought to market and sold soon after harvest.
Excess supplies often cause severe price competition in our industry. Growing conditions in various parts of the world, particularly weather conditions such as windstorms, floods, droughts and freezes, as well as diseases and pests, are primary factors affecting market prices because of their influence on the supply and quality of product.
A number of external factors, including the deadly conflict in Ukraine, the COVID-19 pandemic, adverse weather conditions, supply chain disruptions (including raw material shortages) and labor shortages, have impacted and may continue to impact 20 transportation and commodity costs.
A number of external factors, including the deadly conflicts in Ukraine and Israel, as well as responses to such events including sanctions or other restrictive actions, by the United States and/or other countries, the COVID-19 pandemic, adverse weather conditions, increases in fuel prices, supply chain disruptions (including raw material shortages) and labor shortages have impacted, and may continue to impact, transportation and commodity costs and create significant macroeconomic uncertainty.
When prices increase, we may or may not pass on such increases to our customers without suffering reduced volume, revenue, margins and operating results. We incur increased costs as a result of being a publicly traded company. As a company with publicly traded securities, we have incurred, and will continue to incur, significant legal, accounting and other expenses.
We incur increased costs as a result of being a publicly traded company. As a company with publicly traded securities, we have incurred, and will continue to incur, significant legal, accounting and other expenses.
Risks Related to our Business Adverse weather conditions, natural disasters and other natural conditions, including the effects of climate change, could impose significant costs and losses on our business.
Risks Related to our Business 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, could impose significant costs and losses on our business and adversely affect our results of operations, financial position and cash flows.
Because of the seasonality of our business, results for any quarter are not necessarily indicative of the results that may be achieved for the full fiscal year or in future quarters. If our operating revenues in the second and third quarters are lower than expected, it would have a disproportionately large adverse impact on our annual operating results.
Because of the seasonality of our business, results for any quarter are not necessarily indicative of the results that may be achieved for the full year or in future quarters.
These strategic initiatives may not be successful in generating revenues or improving operating profit and, if they are, it may take longer than anticipated. As a result, and depending on evolving conditions and opportunities, we may need to adjust our strategic initiatives and such changes could be substantial, including modifying or terminating one or more of such initiatives.
As a result, and depending on evolving conditions and opportunities, we may need to adjust our strategic initiatives and such changes could be substantial, including modifying or terminating one or more of such initiatives. Termination of such initiatives may require us to write down or write off the value of our investments in them.
In such cases, if we are required to pay significant costs or damages, it could materially adversely affect our business, results of operations, financial condition and cash flows. Compliance with applicable environmental laws may substantially increase our costs of doing business which could reduce our profits.
Our insurance may not be adequate to cover such costs or damages, or may not continue to be available at a price or under terms that are satisfactory to us. In such cases, if we are required to pay significant costs or damages, it could materially adversely affect our business, results of operations, financial condition and cash flows.
We are subject to various laws and regulations relating to the operation of our properties, which are administered by numerous federal, state and local governmental agencies. We face a potential for environmental liability by virtue of our ownership of real estate property.
Compliance with applicable environmental laws may substantially increase our costs of doing business, which could reduce our profits. We are subject to various laws and regulations relating to the operation of our properties, which are administered by numerous federal, state and local governmental agencies.
The loss of Tropicana as a customer or significant reduction in business with Tropicana may cause a material adverse impact to our financial position, results of operations and cash flows. 14 With the sale of a majority of ownership of Tropicana to a French private equity firm, there is some heightened risk and uncertainty in our current relationship with Tropicana, which potentially could result in a significant reduction in revenues and cash flows if that relationship were to be changed as a result.
The loss of Tropicana as a customer or significant reduction in business with Tropicana may cause a material adverse impact to our financial position, results of operations and cash flows.
Similarly, any extended disruption in the distribution of our products could have a material adverse effect on our business, financial condition and results of operations. 18 While we believe we are adequately insured and would attempt to transport our products by alternative means if we were to experience an interruption due to strike, natural disasters or otherwise, we cannot be sure that we would be able to do so or be successful in doing so in a timely and cost-effective manner.
If we were to experience an interruption due to strike, natural disasters or otherwise, we cannot be sure that our insurance would adequately cover all claims and that any efforts to transport our products by alternative means would be successful and done in a timely and cost-effective manner.
We may be deemed liable and have to pay for the costs or damages associated with the improper application, accidental release or the use or misuse of such substances. Our insurance may not be adequate to cover such costs or damages, or may not continue to be available at a price or under terms that are satisfactory to us.
Our agricultural business involves the use of herbicides, fertilizers and pesticides, some of which may be considered hazardous or toxic substances. We may be deemed liable and have to pay for the costs or damages associated with the improper application, accidental release or the use or misuse of such substances.
Because foreign growers have greater flexibility as to when they enter the U.S. market, we cannot always predict the impact these competitors will have on our business and results of operations. The competition we face from certain foreign suppliers of orange juice is mitigated by a governmentally imposed tariff on orange imports.
Foreign growers generally have an equal or lower cost of production, less environmental regulation, and, in some instances, greater resources and market flexibility than us. Because foreign growers have greater flexibility as to when they enter the U.S. market, we cannot always predict the impact these competitors will have on our business and results of operations.
Such damage could materially 13 affect our citrus operations and could result in a loss of operating revenues from those products for a multi-year period.
Such damage could materially affect our citrus operations and could result in a loss of operating revenues from those products for a multi-year period. For instance, recent Hurricane Ian had a material adverse effect on the fruit production from our trees for the 2023 harvest season and, potentially to a lesser extent, the next season and future seasons.
Increased focus and activism related to ESG may hinder the Company’s access to capital, as investors may reconsider their capital investment as a result of their assessment of the Company’s ESG practices. In particular, customers, investors and other stakeholders are increasingly focusing on environmental issues, including climate change, water use, deforestation, plastic waste, and other sustainability concerns.
Increased and varied focus and activism related to ESG may hinder our access to capital, as investors may reconsider their capital investment as a result of their assessment of our ESG practices, or due to our focus on ESG practices at all.
During the fiscal year ended September 30, 2022, we continued to experience inflationary pressure on transportation and commodity costs, which we expect to continue through 2023.
Macroeconomic conditions, such as rising inflation, the deadly conflicts in Ukraine and Israel, and the COVID-19 pandemic could adversely affect our business, financial condition, results of operations and cash flows. During the year ended September 30, 2023, we continued to experience inflationary pressure on transportation and commodity costs, which we expect to continue through 2024.
A significant portion of our revenues are derived from our citrus business and any adverse event affecting such business could disproportionately harm our business. Our revenues from our citrus business were approximately 97.5%, 97.5%, and 96.6% of our operating revenues in fiscal years 2022, 2021 and 2020, respectively.
Our revenues from our citrus business were 95.7%, 97.5%, and 97.5% of our operating revenues in the years ended September 30, 2023, 2022 and 2021, respectively.
For instance, recent Hurricane Ian is expected to have a material adverse effect on the fruit production from our trees for this current harvest season and, potentially to a lesser extent, the next season and future seasons. We seek to minimize hurricane risk by the purchase of insurance contracts, but the majority of our crops remain uninsured.
We seek to minimize hurricane risk by the purchase of insurance contracts, but a significant portion of our crops remain uninsured.
We face significant competition in our agricultural operations. We face significant competition in our agricultural operations both from domestic and foreign producers and do not have any branded products. Foreign growers generally have an equal or lower cost of production, less environmental regulation and in some instances, greater resources and market flexibility than us.
If our operating revenues in 14 Table of Contents the second and third quarters are lower than expected, it would have a disproportionately large adverse impact on our annual operating results. We face significant competition in our agricultural operations. We face significant competition in our agricultural operations both from domestic and foreign producers and do not have any branded products.
We maintain product liability insurance; however, we cannot be sure that we will not incur claims or liabilities for which we are not insured or that exceed the amount of our insurance coverage. Our agricultural operations are subject to water use regulations restricting our access to water. Our operations are dependent upon the availability of adequate surface and underground water.
Our agricultural operations are subject to water use regulations restricting our access to water. Our operations are dependent upon the availability of adequate surface and underground water. The availability of water is regulated by the state of Florida through water management districts which have jurisdiction over various geographic regions in which our lands are located.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeAcreage in each county and the primary classification with respect to the present use of these properties is shown in the following table: Total Hendry Polk Collier DeSoto Glades Charlotte Hardee Highlands Alico Citrus: Citrus Groves 48,845 8,766 7,107 7,166 21,470 — 2,538 574 1,224 Citrus Nursery 22 — — — 22 — — — — Total Citrus Groves 48,867 8,766 7,107 7,166 21,492 — 2,538 574 1,224 Land Management and Other Operations 24,161 20,139 — 4,022 — — — — — Mining 526 — — — — 526 — — — Total 73,554 28,905 7,107 11,188 21,492 526 2,538 574 1,224 Approximately 54,600 acres of the properties listed are encumbered by credit agreements totaling approximately $216,500,000, of which there was approximately $106,696,000 outstanding at September 30, 2022.
Biggest changeAcreage in each county and the primary classification with respect to the present use of these properties is shown in the following table: Total Hendry Polk Collier DeSoto Glades Charlotte Hardee Highlands Alico Citrus: Citrus Groves 48,927 8,900 7,054 7,056 21,590 — 2,521 582 1,224 Citrus Nursery 22 — — — 22 — — — — Total Citrus Groves 48,949 8,900 7,054 7,056 21,612 — 2,521 582 1,224 Land Management and Other Operations 22,328 18,722 — 3,606 — — — — — Mining 526 — — — — 526 — — — Total 71,803 27,622 7,054 10,662 21,612 526 2,521 582 1,224 Approximately 48,949 acres of the properties listed are encumbered by credit agreements totaling $216,500 thousand, of which there was $104,597 thousand outstanding at September 30, 2023.
For a more detailed description of the credit agreements and collateral please see Note 6. “Long-Term Debt and Lines of Credit” to the Company’s fiscal year 2022 consolidated financial statements.
For a more detailed description of the credit agreements and collateral please see Note 6. Long-Term Debt and Lines of Credit to the Consolidated Financial Statements included in this Annual Report.
Although the Company has mineral rights on approximately 90,000 acres, the Company currently collects mining royalties on only approximately 526 acres of the land included in the table above located in Glades County, Florida and on none of the non-owned lands with respect to which it holds mineral rights.
Although we have mineral rights on substantially all our owned acres, with additional mineral rights on other leased acres, we currently collect mining royalties on only approximately 526 acres of the land included in the table above located in Glades County, Florida and on none of the non-owned lands with respect to which we hold mineral rights.
Item 2. P roperties As of September 30, 2022, Alico owned approximately 74,000 acres of land located in eight counties in Florida.
Item 2. Properties As of September 30, 2023, we owned approximately 72,000 acres of land located in eight counties in Florida.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeThere 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 position, results of operations or cash flows. Item 4. Mine Saf ety Disclosures Not Applicable. 24 PART II
Biggest changeThere are no current legal proceedings to which we are a party or of which any of our property is subject that we believe will have a material adverse effect on our financial position, results of operations or cash flows. See Note 14. Commitments and Contingencies to the Consolidated Financial Statements included in this Annual Report for further information.
Item 3. 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.
Item 3. Legal Proceedings From time to time, we have been, and may in the future be involved in, litigation relating to claims arising out of our operations in the normal course of business.
Added
Item 4. Mine Safety Disclosures Not Applicable. 21 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeDividend Policy The declaration and amount of any actual cash dividend are in the sole discretion of our Board of Directors and are subject to numerous factors that ordinarily affect dividend policy, including the results of our operations and financial position, as well as general economic and business conditions. • The Board of Directors approved a dividend of $0.05 per common share for our first quarter fiscal year 2023 in December 2022. • The Board of Directors approved the increase of our annual dividend to $2.00 per common share in June 2021. • The Board of Directors approved the increase of our annual dividend to $0.72 per common share in December 2020. • The Board of Directors approved the increase of our annual dividend to $0.36 per common share in December 2019. 25 Stock Performance Graph The graph below represents our common stock performance, comparing the value of $100 invested on September 30, 2017 in our common stock, the S&P 500 Index, the S&P Agricultural Products Index and a Company-constructed peer group, which includes Forestar Group, Inc., Limoneira Company, The St.
Biggest changeDividend Policy The declaration and amount of any actual cash dividend are in the sole discretion of our Board of Directors and are subject to numerous factors that ordinarily affect dividend policy, including the results of our operations and financial position, as well as general economic and business conditions. • The Board of Directors approved a dividend of $0.05 per common share for our fourth quarter fiscal year 2023 in September 2023. • The Board of Directors approved the reduction of our annual dividend to $0.20 per common share in December 2022. • The Board of Directors approved the increase of our annual dividend to $2.00 per common share in June 2021.
A greater number of holders of our common stock are “street name” or beneficial holders, whose shares are held by banks, brokers and other financial institutions.
A greater number of holders of our common stock are “street name,” or beneficial holders, whose shares are held by banks, brokers and other financial institutions.
Item 5. Market for Registrant’s Common Equity, Related Sto ckholder Matters and Issuer Purchases of Equity Securities Common Stock Our common stock is traded on the Nasdaq Global Select Market under the symbol ALCO. Holders On December 2, 2022, our stock transfer records indicated there were 7,592,937 holders of record of our common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Common Stock Our common stock is traded on the Nasdaq Global Select Market under the symbol ALCO. Holders On December 4, 2023, our stock transfer records indicated there were 394 holders of record of our common stock.
Removed
Joe Company, Tejon Ranch Co. and Texas Pacific Land Trust.
Added
Recent Sales of Unregistered Securities None Item 6. [Reserved] 22 Table of Contents
Removed
INDEXED RETURNS Base Period Years Ending Company Name / Index Sept 17 Sept 18 Sept 19 Sept 20 Sept 21 Sept 22 Alico, Inc. 100 99.75 101.21 86.15 107.35 93.70 S&P 500 Index 100 117.91 122.93 141.55 184.02 155.55 S&P Agricultural Products Index 100 112.67 95.30 113.30 160.33 193.24 Peer Group 100 163.18 129.83 106.17 235.39 297.94 (Includes reinvestment of dividends) Recent Sale of Unregistered Securities None.
Removed
Issuer Repurchases of Equity Securities We adopted Rule 10b5-1 share repurchase plan under the Securities Exchange Act of 1934 (the “Plan”) in connection with share repurchase authorizations. The Plan allows us to repurchase our shares of common stock at times when it otherwise might be prevented from doing so under insider trading laws or because of self-imposed trading blackout periods.
Removed
Because repurchases under the Plan are subject to certain pricing parameters, there is no guarantee as to the exact number of common shares that will be repurchased under the Plan or that there will be any repurchases pursuant to the Plan. We did not repurchase any of our common stock under our Plan during the year ended September 30, 2022.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThese federal relief proceeds are included as a reduction to operating expenses in the Consolidated Statements of Operations. 30 Consolidated Results of Operations The following discussion provides an analysis of Alico's results of operations and should be read in conjunction with the accompanying Consolidated Statements of Operations for the fiscal years ended September 30, 2022, 2021 and 2020: (in thousands) Fiscal Year Ended Fiscal Year Ended September 30, Change September 30, Change 2022 2021 $ % 2021 2020 $ % Operating revenues: Alico Citrus $ 89,681 $ 105,796 $ (16,115 ) (15.2 )% $ 105,796 $ 89,369 $ 16,427 18.4 % Land Management and Other Operations 2,266 2,768 (502 ) (18.1 )% 2,768 3,138 (370 ) (11.8 )% Total operating revenues 91,947 108,564 (16,617 ) (15.3 )% 108,564 92,507 16,057 17.4 % Gross (loss) profit: Alico Citrus (16,511 ) 21,903 (38,414 ) NM 21,903 17,088 4,815 28.2 % Land Management and Other Operations 1,746 1,990 (244 ) (12.3 )% 1,990 831 1,159 139.5 % Total gross (loss) profit (14,765 ) 23,893 (38,658 ) NM 23,893 17,919 5,974 33.3 % General and administrative expenses 10,079 9,453 626 6.6 % 9,453 10,998 (1,545 ) (14.0 )% (Loss) income from operations (24,844 ) 14,440 (39,284 ) NM 14,440 6,921 7,519 108.6 % Total other income, net 37,799 31,947 5,852 18.3 % 31,947 24,456 7,491 30.6 % Income before income taxes 12,955 46,387 (33,432 ) (72.1 )% 46,387 31,377 15,010 47.8 % Income tax provision 1,069 11,567 (10,498 ) (90.8 )% 11,567 7,663 3,904 50.9 % Net income 11,886 34,820 (22,934 ) (65.9 )% 34,820 23,714 11,106 46.8 % Net loss (income) attributable to noncontrolling interests 573 39 534 NM 39 (52 ) 91 NM Net income attributable to Alico, Inc. common stockholders $ 12,459 $ 34,859 $ (22,400 ) (64.3 )% $ 34,859 $ 23,662 $ 11,197 47.3 % NM - Not Meaningful The following table presents our operating revenues, by segment, as a percentage of total operating revenues for the fiscal years ended September 30, 2022, 2021 and 2020: Fiscal Year Ended September 30, 2022 2021 2020 Operating revenues: Alico Citrus 97.5 % 97.5 % 96.6 % Land Management and Other Operations 2.5 % 2.5 % 3.4 % Total operating revenues 100.0 % 100.0 % 100.0 % 31 The following discussion provides an analysis of the Company's operating segments: Alico Citrus (in thousands, except per box and per pound solids data) Fiscal Year Ended Fiscal Year Ended September 30, Change September 30, Change 2022 2021 Unit % 2021 2020 Unit % Operating Revenues: Early and Mid-Season $ 28,287 $ 31,525 $ (3,238 ) (10.3 )% $ 31,525 $ 31,303 $ 222 0.7 % Valencias 47,529 55,918 (8,389 ) (15.0 )% 55,918 50,060 5,858 11.7 % Fresh Fruit 1,256 608 648 106.6 % 608 2,321 (1,713 ) (73.8 )% Grove Management Services 11,928 16,983 (5,055 ) (29.8 )% 16,983 4,599 12,384 NM Purchase and Resale of Fruit 574 623 (49 ) (7.9 )% 623 850 (227 ) (26.7 )% Other 107 139 (32 ) (23.0 )% 139 236 (97 ) (41.1 )% Total $ 89,681 $ 105,796 $ (16,115 ) (15.2 )% $ 105,796 $ 89,369 $ 16,427 18.4 % Boxes Harvested: Early and Mid-Season 2,175 2,519 (344 ) (13.7 )% 2,519 3,146 (627 ) (19.9 )% Valencias 3,274 3,779 (505 ) (13.4 )% 3,779 4,165 (386 ) (9.3 )% Total Processed 5,449 6,298 (849 ) (13.5 )% 6,298 7,311 (1,013 ) (13.9 )% Fresh Fruit 91 61 30 49.2 % 61 267 (206 ) (77.2 )% Total 5,540 6,359 (819 ) (12.9 )% 6,359 7,578 (1,219 ) (16.1 )% Pound Solids Produced: Early and Mid- Season 11,034 13,598 (2,564 ) (18.9 )% 13,598 17,947 (4,349 ) (24.2 )% Valencias 17,756 22,042 (4,286 ) (19.4 )% 22,042 25,631 (3,589 ) (14.0 )% Total 28,790 35,640 (6,850 ) (19.2 )% 35,640 43,578 (7,938 ) (18.2 )% Pound Solids per Box: Early and Mid-Season 5.07 5.40 (0.33 ) (6.1 )% 5.40 5.70 (0.30 ) (5.3 )% Valencias 5.42 5.83 (0.41 ) (7.0 )% 5.83 6.15 (0.32 ) (5.2 )% Price per Pound Solids: Early and Mid-Season $ 2.56 $ 2.32 $ 0.24 10.3 % $ 2.32 $ 1.74 $ 0.58 33.3 % Valencias $ 2.68 $ 2.54 $ 0.14 5.5 % $ 2.54 $ 1.95 $ 0.59 30.3 % Price per Box: Fresh Fruit $ 13.80 $ 9.97 $ 3.83 38.4 % $ 9.97 $ 8.69 $ 1.28 14.7 % Operating Expenses: Cost of Sales $ 81,944 $ 55,660 $ 26,284 47.2 % $ 55,660 $ 52,492 $ 3,168 6.0 % Harvesting and Hauling 15,965 16,922 (957 ) (5.7 )% 16,922 19,897 (2,975 ) (15.0 )% Grove Management Services 10,547 15,084 (4,537 ) (30.1 )% 15,084 3,817 11,267 NM Purchase and Resale of Fruit 449 526 (77 ) (14.6 )% 526 704 (178 ) (25.3 )% Other (2,713 ) (4,299 ) 1,586 (36.9 )% (4,299 ) (4,629 ) 330 (7.1 )% Total $ 106,192 $ 83,893 $ 22,299 26.6 % $ 83,893 $ 72,281 $ 11,612 16.1 % Gross (Loss) Profit $ (16,511 ) $ 21,903 $ (38,414 ) NM $ 21,903 $ 17,088 $ 4,815 28.2 % NM - Not Meaningful Our citrus groves produce the majority of our annual operating revenues and the citrus grove business is seasonal because it is tied to the growing and harvest season.
Biggest changeConsolidated Results of Operations The following discussion presented below provides an analysis of our results of operations for the year ended September 30, 2023, as compared to 2022, and the year ended September 30, 2022, as compared to 2021. 23 Table of Contents (in thousands) Years Ended September 30, Change Years Ended September 30, Change 2023 2022 $ % 2022 2021 $ % Operating revenues: Alico Citrus $ 38,145 $ 89,681 $ (51,536) (57.5) % $ 89,681 $ 105,796 $ (16,115) (15.2) % Land Management and Other Operations 1,701 2,266 (565) (24.9) % 2,266 2,768 (502) (18.1) % Total operating revenues 39,846 91,947 (52,101) (56.7) % 91,947 108,564 (16,617) (15.3) % Gross profit (loss): Alico Citrus 5,186 (16,511) 21,697 (131.4) % (16,511) 21,903 (38,414) NM Land Management and Other Operations 1,260 1,746 (486) (27.8) % 1,746 1,990 (244) (12.3) % Total gross profit (loss) 6,446 (14,765) 21,211 (143.7) % (14,765) 23,893 (38,658) NM General and administrative expenses 10,643 10,079 564 5.6 % 10,079 9,453 626 6.6 % (Loss) income from operations (4,197) (24,844) 20,647 (83.1) % (24,844) 14,440 (39,284) NM Total other income, net 6,656 37,799 (31,143) (82.4) % 37,799 31,947 5,852 18.3 % Income before income taxes 2,459 12,955 (10,496) (81.0) % 12,955 46,387 (33,432) (72.1) % Income tax provision 801 1,069 (268) (25.1) % 1,069 11,567 (10,498) (90.8) % Net income 1,658 11,886 (10,228) (86.1) % 11,886 34,820 (22,934) (65.9) % Net loss attributable to noncontrolling interests 177 573 (396) (69.1) % 573 39 534 NM Net income attributable to Alico, Inc. common stockholders $ 1,835 $ 12,459 $ (10,624) (85.3) % $ 12,459 $ 34,859 $ (22,400) (64.3) % NM - Not Meaningful The following table presents our operating revenues, by segment, as a percentage of total operating revenues for the years ended September 30, 2023, 2022 and 2021: Years Ended September 30, 2023 2022 2021 Operating revenues: Alico Citrus 95.7 % 97.5 % 97.5 % Land Management and Other Operations 4.3 % 2.5 % 2.5 % Total operating revenues 100.0 % 100.0 % 100.0 % 24 Table of Contents The following discussion provides an analysis of our operating segments: Alico Citrus (in thousands, except per box and per pound solids data) Years Ended September 30, Change Years Ended September 30, Change 2023 2022 Unit % 2022 2021 Unit % Operating Revenues: Early and Mid-Season $ 11,954 $ 28,287 $ (16,333) (57.7) % $ 28,287 $ 31,525 $ (3,238) (10.3)% Valencias 23,906 47,529 (23,623) (49.7) % 47,529 55,918 (8,389) (15.0) % Fresh Fruit and other 1,051 1,937 (886) (45.7) % 1,937 1,370 567 41.4 % Grove Management Services 1,234 11,928 (10,694) (89.7) % 11,928 16,983 (5,055) (29.8) % Total $ 38,145 $ 89,681 $ (51,536) (57.5) % $ 89,681 $ 105,796 $ (16,115) (15.2) % Boxes Harvested: Early and Mid-Season 979 2,175 (1,196) (55.0) % 2,175 2,519 (344) (13.7) % Valencias 1,669 3,274 (1,605) (49.0) % 3,274 3,779 (505) (13.4) % Total Processed 2,648 5,449 (2,801) (51.4) % 5,449 6,298 (849) (13.5) % Fresh Fruit 41 91 (50) (54.9) % 91 61 30 49.2 % Total 2,689 5,540 (2,851) (51.5) % 5,540 6,359 (819) (12.9) % Pound Solids Produced: Early and Mid-Season 4,586 11,034 (6,448) (58.4) % 11,034 13,598 (2,564) (18.9) % Valencias 8,702 17,756 (9,054) (51.0) % 17,756 22,042 (4,286) (19.4) % Total 13,288 28,790 (15,502) (53.8) % 28,790 35,640 (6,850) (19.2) % Pound Solids per Box: Early and Mid-Season 4.68 5.07 (0.39) (7.7) % 5.07 5.40 (0.33) (6.1) % Valencias 5.21 5.42 (0.21) (3.9) % 5.42 5.83 (0.41) (7.0) % Price per Pound Solids: Early and Mid-Season $ 2.61 $ 2.56 $ 0.05 2.0 % $ 2.56 $ 2.32 $ 0.24 10.3 % Valencias $ 2.75 $ 2.68 $ 0.07 2.6 % $ 2.68 $ 2.54 $ 0.14 5.5 % Price per Box: Fresh Fruit $ 14.02 $ 13.80 $ 0.22 1.6 % $ 13.80 $ 9.97 $ 3.83 38.5 % Operating Expenses: Cost of Sales $ 50,961 $ 81,944 $ (30,983) (37.8) % $ 81,944 $ 55,660 $ 26,284 47.2 % Harvesting and Hauling 10,573 15,965 (5,392) (33.8) % 15,965 16,922 (957) (5.7) % Fresh Fruit and other (29,326) (2,264) (27,062) NM (2,264) (3,773) 1,509 (40.0) % Grove Management Services 751 10,547 (9,796) (92.9) % 10,547 15,084 (4,537) (30.1) % Total $ 32,959 $ 106,192 $ (73,233) (69.0) % $ 106,192 $ 83,893 $ 22,299 26.6 % NM - Not Meaningful Components of Results of Operations for Alico Citrus Segment Our citrus groves produce the majority of our annual operating revenues and the citrus grove business is seasonal because it is tied to the growing and harvest season.
GAAP, which requires management to make estimates, judgments and assumptions that affect the amounts reported in those financial statements and accompanying notes. Management considers an accounting policy to be critical if it is important to the Company's financial condition and results of operations and if it requires significant judgment and estimates on the part of management in its application.
GAAP, which requires management to make estimates, judgments and assumptions that affect the amounts reported in those financial statements and accompanying notes. Management considers an accounting policy to be critical if it is important to our financial condition and results of operations and if it requires significant judgment and estimates on the part of management in its application.
The principal uses of cash that affect Alico's liquidity position include the following: operating expenses including employee costs, the cost of maintaining the citrus groves, harvesting and hauling of citrus products, capital expenditures, stock repurchases, dividends, debt service costs including interest and principal payments on term loans and other credit facilities and acquisitions.
The principal uses of cash that affect our liquidity position include the following: operating expenses including employee costs, the cost of maintaining the citrus groves, harvesting and hauling of citrus products, capital expenditures, stock repurchases, dividends, debt service costs including interest and principal payments on term loans and other credit facilities and acquisitions.
As a result of this process, the Company would estimate the amount of casualty loss, if any, to reduce the carrying value of unharvested fruit crop on trees inventory. Property and Equipment Property and equipment are stated at cost, net of accumulated depreciation and amortization.
As a result of this process, we would estimate the amount of casualty loss, if any, to reduce the carrying value of unharvested fruit crop on trees inventory. Property and Equipment Property and equipment are stated at cost, net of accumulated depreciation and amortization.
Subsequent Events The working capital line of credit 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 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, effective October 1, 2022.
The working capital line of credit 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 is adjusted quarterly, based on our debt service coverage ratio for the preceding quarter and can vary from 175 to 250 basis points, effective October 1, 2022.
Management considers an accounting estimate to be critical if it is made in accordance with generally accepted accounting principles, involves a significant level of estimation uncertainty, and has had or is reasonably likely to have a material impact on the Company’s financial condition or results of operations.
Management considers an accounting estimate to be critical if it is made in accordance with generally accepted accounting principles, involves a significant level of estimation uncertainty, and has had, or is reasonably likely to have, a material impact on our financial condition or results of operations.
In calculating impairments and the estimated cash flows, the Company assigns its asset groups by determining the lowest level for which there are identifiable cash flows that are largely independent of the cash flows of the other Company assets. The net carrying values of assets or asset groups not recoverable are reduced to their fair values.
In calculating impairments and the estimated cash flows, we assign its asset groups by determining the lowest level for which there are identifiable cash flows that are largely independent of the cash flows of the other Company assets. The net carrying values of assets or asset groups not recoverable are reduced to their fair values.
The Company records impairment losses on long-lived assets used in operations, other than goodwill, when events and circumstances indicate that the asset or asset group might be impaired and the estimated cash flows (undiscounted and without interest charges) to be generated by those assets or asset group over the remaining lives of the assets are less than the carrying amounts of those assets.
We record impairment losses on long-lived assets used in operations, other than goodwill, when events and circumstances indicate that the asset or asset group might be impaired and the estimated cash flows (undiscounted and without interest charges) to be generated by those assets or asset group over the remaining lives of the assets are less than the carrying amounts of those assets.
Sources of cash primarily include cash flows from operations, sales of under-performing land and other assets, amounts available under the Company's credit facilities and access to capital markets. Access to additional borrowings under revolving lines of credit is subject to the satisfaction of customary borrowing conditions. As a public company, Alico may have access to other sources of capital.
Sources of cash primarily include cash flows from operations, sales of under-performing land and other assets, amounts available under our credit facilities and access to capital markets. Access to additional borrowings under revolving lines of credit is subject to the satisfaction of customary borrowing conditions. As a public company, we may have access to other sources of capital.
There can be no assurance that the Company will continue to have access to the capital markets on acceptable terms, or at all.
There can be no assurance that we will continue to have access to the capital markets on acceptable terms, or at all.
For grove management services, the Company recognizes operating revenue, including a management fee, when services are rendered and consumed. Management reviews the reasonableness of the revenue accruals quarterly based on buyers’ and processors’ advances to growers, cash and futures markets and experience in the industry.
For grove management services, we recognize operating revenue, including a management fee, when services are rendered and consumed. Management reviews the reasonableness of the revenue accruals quarterly based on buyers’ and processors’ advances to growers, cash and futures markets and experience in the industry.
There were no changes to the commitment amount. 43
There were no changes to the commitment amount.
The level of debt could have important consequences on Alico's business, including, but not limited to, increasing its vulnerability to general adverse economic and industry conditions, limiting the availability of cash flow to fund future investments, capital expenditures, working capital, business activities and other general corporate requirements, and limiting flexibility in planning for, or reacting to, changes in its business and industry.
The level of debt could have important consequences on our business, including, but not limited to, increasing our vulnerability to general adverse economic and industry conditions, limiting the availability of cash flow to fund future 28 Table of Contents investments, capital expenditures, working capital, business activities and other general corporate requirements, and limiting flexibility in planning for, or reacting to, changes in our business and industry.
Income Taxes The Company uses the asset and liability method of accounting for deferred income taxes. The provision for income taxes includes income taxes currently payable and those deferred as a result of temporary differences between the financial statements and the income tax basis of assets and liabilities.
Income Taxes We use the asset and liability method of accounting for deferred income taxes. The provision for income taxes includes income taxes currently payable and those deferred as a result of temporary differences between the financial statements and the income tax basis of assets and liabilities.
The process includes a number of factors, including touring all of the citrus groves by operational personnel, to assess the estimated fruit drop by grove and estimate the amount of fruit the Company expects to produce for the respective harvest 41 season.
The process includes a number of factors, including touring all of the citrus groves by operational personnel, to assess the estimated fruit drop by grove and estimate the amount of fruit we expect to produce for the respective harvest season.
The aggregate decrease in pound solids per box of 6.6% during the fiscal year ended September 30, 2022, as compared to the prior fiscal year ended September 30, 2021, was mainly due to the internal quality of the fruit not being as strong as it had been in the previous year.
The aggregate decrease in pound solids per box of 5.8% during the year ended September 30, 2023, as compared to the prior year ended September 30, 2022, was mainly due to the internal quality of the fruit not being as strong as it had been in the previous year.
The Company believes this lower rate of decline, as compared to the state forecast, is due to the efficiencies of the Company’s comprehensive grove management program, as well as certain precautionary measures the Company took to minimize the impact of the freeze event on its groves and production.
We believe this lower rate of decline, as compared to the state forecast, is due to the efficiencies of our comprehensive grove management program, as well as certain precautionary measures we took to minimize the impact of the freeze event on its groves and production.
Alico’s credit facilities are subject to various debt 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 $160,000,000 increased annually by 10% of consolidated net income for the preceding years, or approximately $173,216,000 applicable for the year ended September 30, 2022; (iii) minimum current ratio of 1.50 to 1.00; (iv) debt to 37 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 $30,000,000 per fiscal year.
Our credit facilities are subject to various debt 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 thousand increased annually by 10% of consolidated net income for the preceding years, or $174,628 thousand applicable 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 0.625 to 1.00; and (v) solely in the case of the WCLC (as defined below), a limit on capital expenditures of $30,000 thousand per year.
The processed box production for the fiscal year ended September 30, 2022 decreased by 13.5%, as compared to the same period in the prior fiscal year, primarily due to greater fruit drop, attributed to disease and weather conditions.
The processed box production for the year ended September 30, 2023 decreased by 51.4%, as compared to the same period in the prior year, primarily due to greater fruit drop attributed to disease and weather conditions.
Alico considers policies and estimates relating to the following matters to be critical accounting policies: Revenue Recognition The Company recognizes revenue at 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 the Company has a right to payment.
We consider policies and estimates relating to the following matters to be critical accounting policies: 29 Table of Contents Revenue Recognition We recognize revenue at the amount we expect to be entitled to be paid, determined when control of the products or services is transferred to our customers, which occurs upon delivery of and acceptance of the fruit by the customer and we have a right to payment.
Adjustments are made throughout the fiscal year to these estimates as more current relevant industry information becomes available. Differences between the estimates and the final realization of revenues can be significant and can be either positive or negative.
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 can be significant and can be either positive or negative. During the periods presented in this Annual Report, no material adjustments were made to the reported revenues from our crops.
The USDA, in its October 12, 2022 Citrus Crop Forecast for the 2021-22 harvest season, indicated the overall Florida orange crop decreased from approximately 52,950,000 boxes for the 2020-21 crop year to approximately 41,050,000 boxes for the 2021-22 crop year, a decrease of approximately 22.5%.
The USDA, in its October 12, 2023 Citrus Crop Forecast Report for the 2023-24 harvest season, indicated the overall Florida orange crop decreased from approximately 41,200,000 boxes for the 2021-22 crop year to approximately 15,800,000 boxes for the 2022-23 crop year, a decrease of 61.7%.
Harvesting and 32 hauling costs represent the costs of bringing citrus product to processors and varies based upon the number of boxes produced. Grove management services include those costs associated with citrus grove caretaking and harvest and haul management services provided to third parties. Other expenses include the period costs of reselling third-party fruit.
Grove management services include those costs associated with citrus grove caretaking and harvest and haul management services provided to third parties. Other expenses include the period costs of reselling third-party fruit.
Management believes that a combination of cash-on-hand, cash generated from operations, asset sales and availability under the Company's lines of credit will provide sufficient liquidity to service the principal and interest payments on its indebtedness and will satisfy working capital requirements and capital expenditures for at least the next twelve months and over the long term.
Business for further details) and availability under our lines of credit will provide sufficient liquidity to service the principal and interest payments on our indebtedness and will satisfy working capital requirements and capital expenditures for at least the next twelve months and over the long term.
The Company experienced a decline in total box production in the 2021-2022 harvest season crop of 12.9%.
We experienced a decline in total box production in the 2022-2023 harvest season crop of 51.5%.
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 its citrus products, caretaking management services, and grazing and hunting leasing. The Company operates as two business segments, and all of its operating revenues are generated in the United States.
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.
The Company records interest related to unrecognized tax benefits in income tax expense. Impairment of Long-Lived Assets The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable.
Impairment of Long-Lived Assets We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable.
Our cash flow estimates are based on historical results adjusted to reflect our best estimates of future market conditions and operating conditions. As of September 30, 2022 and 2021, long-lived assets were comprised of property and equipment.
Our cash flow estimates are based on historical results adjusted to reflect our best estimates of future market conditions and operating conditions.
Any increase or decrease in a valuation allowance could have a material adverse or beneficial impact on the Company’s income tax provision and net income or loss in the period the determination is made.
Any increase or decrease in a valuation allowance could have a material adverse or beneficial impact on our income tax provision and net income or loss in the period the determination is made. For the years ended September 30, 2023 and September 30, 2022, we recorded a valuation allowance of $4,170 thousand and $4,309 thousand, respectively.
Item 7. Management’s Discussion and Analysis o f Financial Condition and Results of Operations The following discussion and analysis should be read in conjunction with the accompanying Consolidated Financial Statements and related Notes thereto.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis should be read in conjunction with Part I, Item 1, “Business”, Item 1A, “Risk Factors” and the accompanying Consolidated Financial Statements and related Notes thereto included in this Annual Report commencing on page 42 .
Alico's operating expenses consist primarily of cost of sales, harvesting and hauling costs and grove management service costs. Cost of sales represents the cost of maintaining the citrus groves for the preceding calendar year and does not vary in relation to production.
Cost of sales represents the cost of maintaining the citrus groves for the preceding calendar year and does not vary in relation to production. Harvesting and hauling costs represent the costs of bringing citrus product to processors and vary, based upon the number of boxes produced.
The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which a change in judgment occurs.
We recognize interest and/or penalties related to income tax matters in income tax expense. We recognize the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized.
Borrowing Facilities and Long-term Debt Alico has a $70,000,000 working capital line of credit, which maturity was just extended to November 2025 on October 27, 2022, of which approximately $64,762,000 is available for general use as of September 30, 2022, and a $25,000,000 revolving line of credit, all of which is available for general use as of September 30, 2022 (see Note 6.
Borrowing Facilities and Long-term Debt We have a $70,000 thousand working capital line of credit, of which $45,030 thousand is available for general use as of September 30, 2023, and a $25,000 thousand revolving line of credit, all of which is available for general use as of September 30, 2023 (see Note 6.
Historically, the second and third quarters of Alico's fiscal year produce the majority of the annual revenues and working capital requirements are typically greater in the first and fourth quarters of the fiscal year, coinciding with the growing cycles.
Historically, the second and third quarters of our year produce the majority of the annual revenues and working capital requirements are typically greater in the first and fourth quarters of our year, coinciding with the growing cycles. We sell our Early and Mid-Season and Valencia oranges to processors that convert the majority of the citrus crop into orange juice.
The cost for unharvested citrus crops is based on accumulated production costs incurred during the period from January 1 through the balance sheet date. In the event that there is a casualty loss due to severe weather or other significant incident which negatively impacts inventory, the company will undertake a process to estimate the amount of casualty loss.
In the event that there is a casualty loss due to severe weather or other significant incident which negatively impacts inventory, we will undertake a process to estimate the amount of casualty loss.
During the fiscal year ended September 30, 2022, the Company sold 1,638 acres of land to the state of Florida at a price below market value, which resulted in a charitable contribution and a charitable deduction for tax purposes. The charitable contribution generated a tax benefit of $6,300,000 of which approximately $500,000 was utilized in the current fiscal year.
The effective tax rate for the year ended September 30, 2022 was lower than the statutory tax rate due to the bargain sale of 1,638 acres of land to the state of Florida at a price below market value, which resulted in a charitable contribution carryover for tax purposes.
Partially offsetting the decrease in processed box production and pound solids per box for the fiscal year ended September 30, 2022, compared to the fiscal year ended September 30, 2021, was an increase in the price per pound solid of 7.2%, the increase in large part was due to production being down in Florida as well as in Brazil and due to the continued strong consumption of Not from Concentrate Orange Juice (“NFC”), both of which have led to continued low inventory levels.
The increase, in large part, was due to production being down in Florida, as well as in Brazil, and due to the continued strong consumption of Not from Concentrate Orange Juice (“NFC”), both of which have led to continued low inventory levels. We also recorded a decrease in revenue from sales of Fresh Fruit.
The credit amounts shown in “Other” in operating expenses above, for the most part, represent federal relief proceeds received under the CRBG program for the fiscal years ended September 30, 2022, 2021, and 2020. 34 Land Management and Other Operations The table below presents key operating measures for the fiscal years ended September 30, 2022, 2021 and 2020: (in thousands) Fiscal Year Ended Fiscal Year Ended September 30, Change September 30, Change 2022 2021 $ % 2021 2020 $ % Revenue From: Land and other leasing $ 1,655 $ 2,404 $ (749 ) (31.2 )% $ 2,404 $ 2,683 $ (279 ) (10.4 )% Other 611 364 247 67.9 % 364 455 (91 ) (20.0 )% Total $ 2,266 $ 2,768 $ (502 ) (18.1 )% $ 2,768 $ 3,138 $ (370 ) (11.8 )% Operating Expenses: Land and other leasing $ 516 $ 762 $ (246 ) (32.3 )% $ 762 $ 955 $ (193 ) (20.2 )% Water conservation — — — — % — 1,346 (1,346 ) (100.0 )% Other 4 16 (12 ) (75.0 )% 16 6 10 166.7 % Total $ 520 $ 778 $ (258 ) (33.2 )% $ 778 $ 2,307 $ (1,529 ) (66.3 )% Gross Profit $ 1,746 $ 1,990 $ (244 ) (12.3 )% $ 1,990 $ 831 $ 1,159 139.5 % Land and other leasing include lease income from leases for grazing rights, hunting leases, a farm lease, a lease to a third party of an aggregate mine, leases of oil extraction rights to third parties, and other miscellaneous income.
Land Management and Other Operations The table below presents key operating measures for the years ended September 30, 2023, 2022 and 2021: (in thousands) Years Ended September 30, Change Years Ended September 30, Change 2023 2022 $ % 2022 2021 $ % Revenue From: Land and Other Leasing $ 1,327 $ 1,655 $ (328) (19.8) % $ 1,655 $ 2,404 $ (749) (31.2) % Other 374 611 (237) (38.8) % 611 364 247 67.9 % Total $ 1,701 $ 2,266 $ (565) (24.9) % $ 2,266 $ 2,768 $ (502) (18.1) % Operating Expenses: Land and Other Leasing $ 436 $ 516 $ (80) (15.5) % $ 516 $ 762 $ (246) (32.3) % Other 5 4 1 25.0 % 4 16 (12) (75.0) % Total $ 441 $ 520 $ (79) (15.2) % $ 520 $ 778 $ (258) (33.2) % Components of Results of Operations for Land Management and Other Operations Segment Land and other leasing include lease income from leases for grazing rights, hunting leases, a farm lease, a lease to a third party of an aggregate mine, leases of oil extraction rights to third parties, and other miscellaneous income.
The Company sells its Early and Mid-Season and Valencia oranges to processors that convert the majority of the citrus crop into orange juice. The processors generally buy the citrus crop on a pound solids basis, which is the measure of the soluble solids (sugars and acids) contained in one box of fruit.
The processors generally buy the citrus crop on a pound solids basis, which is the measure of the soluble solids (sugars and acids) contained in one box of fruit. Our fresh fruit is generally sold to packing houses that purchase 25 Table of Contents citrus on a per box basis.
"Financial Statements and Supplementary Data" - Note 1. "Description of Business and Basis of Presentation" for additional information about the impact of accounting pronouncements.
Impact of Accounting Pronouncements See Item 8. “Financial Statements and Supplementary Data” – Note 1. Description of Business and Basis of Presentation to our Consolidated Financial Statements included in this Annual Report for additional information about the impact of accounting pronouncements. 31 Table of Contents
The decrease in revenues from Land Management and Other Operations for the fiscal year ended September 30, 2022, compared to the fiscal year ended September 30, 2021, was primarily due to a reduction in the leased acreage relating to grazing and hunting leases.
Comparison of the year ended September 30, 2023 and 2022 for the Land Management and Other Operations Segment The decrease in revenues from Land Management and Other Operations for the year ended September 30, 2023, as compared to the prior year, was primarily due to a decrease in grazing and hunting lease revenue due to the sales of portions of the Alico Ranch, which resulted in the reduction of land covered under our grazing and hunting lease contracts.
The Company’s fresh fruit is generally sold to packing houses that purchase the citrus on a per box basis. The Company also provides citrus grove caretaking and harvest and haul management services to third parties from which revenues are generated, including a management fee. Other revenues consist of the purchase and reselling of fruit.
We also provide citrus grove caretaking and harvest and haul management services to third parties from which revenues are generated, including a management fee. Other revenues consist of the purchase and reselling of fruit. Our operating expenses consist primarily of cost of sales, harvesting and hauling costs and grove management service costs.
Partially offsetting the increase was a reduction in expenses related to the grove management services as a result of the Grove Owners termination of the Property Management Agreement in June 2022.
The decrease in Grove Management Services expense is directly related to the termination of the Property Management Agreement by the Grove Owners in June 2022.
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. 36 Liquidity and Capital Resources A comparative balance sheet summary is presented in the following table: (in thousands) September 30, 2022 2021 Change Cash and cash equivalents $ 865 $ 886 $ (21 ) Total current assets $ 31,616 $ 54,913 $ (23,297 ) Total current liabilities $ 16,525 $ 22,306 $ (5,781 ) Working capital $ 15,091 $ 32,607 $ (17,516 ) Total assets $ 409,255 $ 433,217 $ (23,962 ) Principal amount of term loans and lines of credit $ 111,624 $ 126,294 $ (14,670 ) Current ratio 1.91 to 1 2.46 to 1 Sources and Uses of Liquidity and Capital Alico's business has historically generated positive net cash flows from operating activities.
Liquidity and Capital Resources A comparative balance sheet summary is presented in the following table: (in thousands) September 30, 2023 September 30, 2022 Change Cash and cash equivalents $ 1,062 $ 865 $ 197 Total current assets $ 58,805 $ 31,616 $ 27,189 Total current liabilities $ 15,065 $ 16,525 $ (1,460) Working capital $ 43,740 $ 15,091 $ 28,649 Total assets $ 428,353 $ 409,255 $ 19,098 Principal amount of term loans and lines of credit $ 129,319 $ 111,624 $ 17,695 Current ratio 3.90 to 1 1.91 to 1 Debt ratio 0.30 to 1 0.27 to 1 Sources and Uses of Liquidity and Capital Our business has historically generated positive net cash flows from operating activities.
This decrease in pound solids per box was also due in part to an acceleration of the harvesting of the Valencia crop in the fiscal year ended September 30, 2022, which acceleration was implemented in an effort to maximize the box production and avoid less damage due to the freeze event, but as a result led to the realization of lower pound solids per box.
This decrease in pound solids per box was also due in part to an acceleration of the harvesting of the Early and Mid-Season and Valencia crops to maximize the box production and avoid additional fruit drop as a result of the impact of Hurricane Ian.
The decrease in Early and Mid-Season and Valencia fruit harvested was primarily driven by a decrease in processed box production and a decrease in pound solids per box.
We recorded approximately $751 thousand and $10,547 thousand of operating expenses relating to grove management services for the Grove Owners for the years ended September 30, 2023 and 2022, respectively. The decrease in Early and Mid-Season and Valencia fruit harvested was primarily driven by a decrease in processed box production and a decrease in pound solids per box.
The decrease in revenue for the fiscal year ended September 30, 2022, compared to the fiscal year ended September 30, 2021 was primarily due to a decrease in both the Early and Mid-Season and Valencia fruit harvested and a decrease in grove management services revenue.
Comparison of the year ended September 30, 2023 and 2022 for the Alico Citrus Segment The decrease in revenue for the year ended September 30, 2023, compared to the year ended September 30, 2022, was primarily due to an increase in fruit drop caused by the impact of Hurricane Ian, which in turn reduced our harvest of both the Early and Mid-Season and Valencia fruit.
Such costs are expensed as cost of sales when the crops are harvested and are recorded as operating expenses in the Consolidated Statements of Operations. Inventories are stated at the lower of cost or net realizable value.
Inventories The costs of growing crops, including, but not limited to, labor, fertilization, fuel, crop nutrition and irrigation, are capitalized into inventory throughout the respective crop year. Such costs are expensed as cost of sales when the crops are harvested and are recorded as operating expenses in the Consolidated Statements of Operations.
The Company does not anticipate it will be able to recognize the entire charitable deduction carryover before it expires in 2027. A valuation allowance of $4,300,000 was recorded to partially offset the charitable contribution carryover deferred tax asset, resulting in a net benefit of $1,500,000.
The bargain sale generated a tax benefit of $6,300 thousand, of which $500 thousand was utilized in the prior year, none of which was used in the current year. We do not anticipate that we will be able to recognize the entire charitable deduction carryover before it expires in 2027.
Largely offsetting this increase in pricing was the effect of fewer Valencia boxes harvested and lower pound solids per box for the fiscal year ended September 30, 2021, compared to the fiscal year ended September 30, 2020.
Partially offsetting the decrease in processed box production and pound solids per box for the year ended September 30, 2023, compared to the year ended September 30, 2022, was an increase in the price per pound solid of 2.6%.
The decrease in revenues from Land Management and Other Operations for the fiscal year ended September 30, 2021, compared to the fiscal year ended September 30, 2020, was primarily due to a reduction in the leased acreage relating to grazing and hunting leases.
The decrease in operating expenses from Land Management and Other Operations for the year ended September 30, 2023, as compared to the prior year, was primarily due to the reduction of the ad valorem tax expense as a result of us owning fewer ranch acres due to the sale of ranch land.
The WCLC line of credit agreement provides for Rabo Agrifinance, Inc. to issue up to $2,000,000 in letters of credit on the Company’s behalf.
(“Rabo”), and lower repayments of term loans. The WCLC agreement provides for Rabo to issue up to $2,000 thousand in letters of credit on our behalf. As of September 30, 2023, there was $248 thousand in outstanding letters of credit, which correspondingly reduced our availability under the line of credit.
Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in the forward-looking statements due to numerous factors, including those Risks Factors included in Part I, Item 1A and elsewhere in this Annual Report on Form 10-K.
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 in Part I, Item 1A, “Risk Factors” and other portions of this Annual Report.
The increase in operating expenses for the fiscal year ended September 30, 2022, as compared to the fiscal year ended September 30, 2021, primarily relates to the Company recording adjustments to inventory as a result of Hurricane Ian.
The decrease in operating expenses for the year ended September 30, 2023, as compared to the year ended September 30, 2022, primarily relates to 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 the year ended September 30, 2023, as well as the receipt of approximately $27,389 thousand in crop insurance and $839 thousand in property and casualty reimbursements for Hurricane Ian.
General and Administrative General and administrative expenses for the fiscal year ended September 30, 2022 were approximately $10,079,000, compared to approximately $9,453,000 for the fiscal year ended September 30, 2021.
The following discussion provides an analysis of our results of operation, as a whole: General and Administrative General and administrative expenses for the year ended September 30, 2023 was $10,643 thousand, compared to $10,079 thousand for the year ended September 30, 2022.
These adjustments did not impact any of the items in our results of operations or our liquidity discussed in this section or in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section in each of our Annual Report on Form 10-K for the year ended September 30, 2021 or our Quarterly Reports on Form 10-Q for each of the quarters ended June 30, 2022, March 31, 2022, December 31, 2021, June 30, 2021, March 31, 2021, and December 31, 2020.
A discussion regarding our financial condition and results of operations for the year ended September 30, 2022, as compared to 2021, has been reported previously and may be found under Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended September 30, 2022, filed with the SEC on December 13, 2022.
The increase in net cash provided by operating activities for the fiscal year ended September 30, 2021, as compared to the fiscal year ended September 30, 2020, was primarily due to an increase in net income and an increase in working capital which was primarily driven by an increase in accounts payable and timing of income tax payments.
Net Cash Provided By (Used In) Financing Activities The shift to net cash provided by financing activities for the year ended September 30, 2023, from net cash used in financing activities for the year ended September 30, 2022, was primarily due to a net increase in borrowing under the working capital line of credit (“WCLC”) with Rabo Agrifinance, Inc.
Fair Value Measurements The carrying amounts in the balance sheets for operating accounts receivable, accounts payable and accrued liabilities approximate fair value because of the immediate or short-term maturity of these items.
The carrying amounts of our financial instruments, including cash and cash equivalents, 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. See Note 2.
As of September 30, 2022, the Company was in compliance with all of the financial covenants. Cash Management Impacts Cash and cash equivalents decreased from approximately $886,000 as of September 30, 2021 to approximately $865,000 as of September 30, 2022.
As of September 30, 2023, we were in compliance with all of the financial covenants.
Partially offsetting this decrease was the Company’s incurring of approximately $200,000 in corporate advisory fees in the fiscal year ended September 30, 2021. Other Income, net Other income, net, for the fiscal years ended September 30, 2022 and 2021 was approximately $37,799,000 and approximately $31,947,000, respectively.
The increase was principally attributable to an increase in legal and professional fees, as compared to the same period last year. Other Income, net Other income, net, for the years ended September 30, 2023 and 2022 was $6,656 thousand and $37,799 thousand, respectively.
Removed
Cautionary Statement Regarding Forward-Looking Information We provide forward-looking information in this Annual Report on Form 10-K, particularly in this Management’s Discussion and Analysis of Financial Condition and Results of Operations, pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, 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”).
Added
We operate as two business segments, and all of our operating revenues are generated in the United States. For the year ended September 30, 2023, we generated operating revenues of $39,846 thousand, loss from operations of $4,197 thousand, and net income attributable to common stockholders of $1,835 thousand.
Removed
Any statements in this Annual Report on Form 10-K that are not historical facts are forward-looking statements. Forward-looking statements include, but are not limited to, statements that express our intentions, beliefs, expectations, strategies, predictions or any other statements relating to our future activities or other future events or conditions.
Added
Net cash used in operating activities was $6,254 thousand for the year ended September 30, 2023. See Part I, Item 1, Business , included in this Annual Report for a discussion of our year highlights.
Removed
These statements are based on our current expectations, estimates and projections about our business based, in part, on assumptions made by our management and can be identified by terms such as “plans,” “expect,” “may,” "anticipate,” “intend,” “should be,” “will be” “is likely to,” “believes,” and similar expressions referring to future periods.
Added
Business Segments The Company has two segments 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.
Removed
Alico believes the expectations reflected in the forward-looking statements are reasonable but cannot guarantee future results, level of activity, performance or achievements. Actual results may differ materially from those expressed or implied in the forward-looking statements. Therefore, Alico cautions you against relying on any of these forward-looking statements.
Added
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.
Removed
Factors which may cause future outcomes to differ materially from those foreseen in forward-looking statements include, but are not limited to: changes in laws, regulation and rules, including tax laws and tax rates; climate change; weather conditions that affect production, transportation, storage, demand, import and export of fresh product and their by-products, and that may result in impairment expense such as the freeze in the last week of January 2022 or Hurricane Ian in the last week of September 2022; increased pressure from diseases including citrus greening and citrus canker, as well as insects and other pests; disruption of water supplies or changes in water allocations; market pricing of citrus; pricing and supply of raw materials and products; market responses to industry volume pressures; pricing and supply of energy, including, but not limited to, changes due in part to the deadly conflict in Ukraine; changes in interest rates; availability of refinancing; availability of financing for land development activities and other growth and corporate opportunities; onetime events; acquisitions and divestitures; ability to make strategic acquisitions or divestitures; our ability to maintain effective internal control over financial reporting; the impact of, and costs related to, any investigations, legal or administrative actions that may result from the restatements described in this Annual Report on Form 10-K; ability to redeploy proceeds from divestitures; ability to consummate selected land acquisitions; ability to take advantage of tax deferral options; ability to retain executive officers and to replace departed executive officers; ability to replace the Company’s primary third party grove management customer and even further expand the third party grove management program; ability to complete and implement land use planning activities, including adding to entitlements applicable to owned real estate; seasonality; labor disruptions; inability to pay debt obligations; inability to engage in certain transactions due to restrictive covenants in debt instruments; government restrictions on land use; changes in land values, agricultural or otherwise; the extent to which real estate value appreciates; impact of the COVID-19 outbreak and coronavirus pandemic on our agriculture operations, including without limitation demand for product, supply chain, health and availability of our labor force, the labor force of contractors we engage, and the labor force of our competitors; other risks related to the duration and severity of the COVID-19 outbreak and coronavirus pandemic and its impact on Alico’s business; the impact of the COVID-19 outbreak and coronavirus pandemic on the U.S. and global economies and financial markets, including without limitation related legislative and regulatory initiatives; access to governmental loans and incentives; access to governmental relief programs; settlement of insurance claims; any reduction in the public float resulting from repurchases of common stock by Alico; changes in equity awards to employees; whether the Company's dividend policy, including its recent increased dividend amounts, is continued; expressed desire of certain of our stockholders to liquidate their shareholdings by virtue of past market sales of common stock, by sales of common stock or by way of future transactions designed to consummate such expressed desire; political changes and economic crises; ability to implement ESG initiatives; competitive actions by other companies; increased competition from international companies; changes in environmental regulations and their impact on farming practices; the land ownership policies of governments; changes in government farm programs and policies and international reaction to such programs; changes in pricing calculations with our customers; fluctuations in the value of the U.S. dollar, interest rates, inflation and deflation rates; length of terms of contracts with customers; impact of concentration of sales to one customer; and changes in and effects of crop insurance programs, global trade agreements, trade restrictions and tariffs; and soil conditions, harvest yields, prices for commodities, and crop production expenses.
Added
For the year ended September 30, 2023, the Alico Citrus segment generated 95.7% of our consolidated revenues and the Land Management and Other Operations segment generated 4.3% of our consolidated revenues.
Removed
These forward-looking statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict.
Added
In addition, we had a decrease in Grove Management Services revenues, from $11,928 thousand for the year ended September 30, 2022, to $1,234 thousand for the year ended September 30, 2023, due to the termination of the Property Management Agreement (see “The Land We Manage” in Item 1. Business for further details).
Removed
Restatement of Previously Issued Consolidated Financial Statements As described in the Explanatory Note above, Note 2, “Restatement of Previously Issued Consolidated Financial Statements” of the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K, and Exhibit 99.1, Select Balance Sheet Data (Restated) for each of the eight quarterly periods in fiscal 2022 and 2021 filed herewith, we have restated our audited consolidated balance sheet, statements of changes in equity and related disclosures as of September 30, 2021 to reflect adjustments in the amounts of previously reported deferred tax liabilities and retained earnings.
Added
The decrease in sales of Fresh Fruit was primarily due to a decrease in both boxes sold and pricing per box.
Removed
The restatement also impacted the same line items in the audited consolidated balance sheet, statements of 27 changes in equity and related disclosures as of September 30, 2022 included in this Annual Report on Form 10-K.
Added
We experienced significant cost increases in fertilizer, herbicide, labor and fuel in maintaining our groves.
Removed
In addition, as reflected in Exhibit 99.1 to this Annual Report on Form 10-K, we have restated our unaudited consolidated balance sheet, statements of changes in equity and related disclosures as of the end of each quarterly period ended June 30, 2022, March 31, 2022, December 31, 2021, September 30, 2021, June 30, 2021, March 31, 2021, and December 30, 2020, in each case, to reflect adjustments in the amounts of previously reported deferred tax liabilities and retained earnings.
Added
These cost increases, coupled with the timing of the harvest, and the lower box production for both our Early and Mid-Season and Valencia harvest, resulted in a higher cost of sales per box for the year ended September 30, 2023, as compared to the same period in the prior year.
Removed
Introduction Alico, Inc. (“Alico”), together with its subsidiaries (collectively, the “Company", "we", "us" or "our”), is a holding company with assets and related operations in agriculture, land management and natural resources. We are a Florida agribusiness and land management company with a legacy of achievement and innovation in citrus, cattle and resource conservation.
Added
In addition, we incurred additional costs related to the clean-up and repairs as a result of Hurricane Ian.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeInterest Rate Risk - The Company is subject to interest rate risk from the utilization of financial instruments such as term loan debt and other borrowings. The Company’s primary long-term obligations are fixed rate debts subject to fair value risk due to interest rate fluctuations.
Biggest changeInterest Rate Risk – We are subject to interest rate risk from the utilization of financial instruments such as term loan debt and other borrowings. Our primary long-term obligations are fixed rate debts subject to fair value risk due to interest rate fluctuations. We are also subject to interest rate risk on our variable rate debt.
Item 7A. Quantitative and Qualita tive Disclosures about Market Risk Market Risk - Market risk represents the potential loss resulting from adverse changes in the value of financial instruments, either derivative or non-derivative, caused by fluctuations in interest rates, foreign exchange rates, commodity prices, and equity security prices.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk Market Risk – Market risk represents the potential loss resulting from adverse changes in the value of financial instruments, either derivative or non-derivative, caused by fluctuations in interest rates, foreign exchange rates, commodity prices, and equity security prices.
A one-percentage-point increase in prevailing interest rates would have increased interest expense on our variable rate debt obligations by approximately $300,000 for the fiscal year ended September 30, 2022. Foreign-Exchange Rate Risk - The Company currently has no exposure to foreign-exchange rate risk because all of its financial transactions are denominated in U.S. dollars.
A one-percentage-point increase in prevailing interest rates would have increased interest expense on our variable rate debt obligations by approximately $438 thousand for the year ended September 30, 2023. Foreign-Exchange Rate Risk – We currently have no exposure to foreign-exchange rate risk because all of our financial transactions are denominated in U.S. dollars.
The Company held various financial instruments as of September 30, 2022 and 2021, consisting of financial assets and liabilities reported in the Company’s Consolidated Balance Sheets and off-balance sheet exposures resulting from letters of credit issued for the benefit of Alico.
We held various financial instruments as of September 30, 2023 and 2022, consisting of financial assets and liabilities reported in our Consolidated Balance Sheets and off-balance sheet exposures resulting from letters of credit issued for our benefit.
The Company does consider, on occasion, the need to enter into financial instruments to manage and reduce the impact of changes in interest rates; however, the Company entered into no such instruments during the three-year period ended September 30, 2022.
We do consider, on occasion, the need to enter into financial instruments to manage and reduce the impact of changes in interest rates; however, we entered into no such instruments during the fiscal year ended September 30, 2023.
Commodity Price Risk - The Company has no financial instruments subject to commodity price risk. Equity Security Price Risk - None of the Company’s financial instruments have potential exposure to equity security price risk.
Commodity Price Risk – We have no financial instruments subject to commodity price risk. Equity Security Price Risk – None of our financial instruments have potential exposure to equity security price risk.
The Company handles market risks in accordance with its established policies; however, Alico does not enter into derivatives or other financial instruments for trading or speculative purposes.
We handle market risks in accordance with our established policies; however, we do not enter into derivatives or other financial instruments for trading or speculative purposes.
Removed
The Company believes that the carrying value of our long-term debt approximates fair value given the stability of market interest rates. The Company is also subject to interest rate risk on its variable rate debt.

Other ALCO 10-K year-over-year comparisons