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What changed in ALICO, INC.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of ALICO, INC.'s 2023 and 2024 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 2024 report.

+243 added−242 removedSource: 10-K (2024-12-02) vs 10-K (2023-12-06)

Top changes in ALICO, INC.'s 2024 10-K

243 paragraphs added · 242 removed · 166 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

41 edited+25 added−23 removed25 unchanged
Biggest changeCompetition The orange and specialty citrus markets are intensely competitive, but no single producer has any significant market power over any market segments, as is consistent with the production of most agricultural commodities. Citrus is grown domestically in several states including Florida, California, Arizona, and Texas, as well as foreign countries, most notably Brazil and Mexico.
Biggest changeThe increase in Tropicana revenue, as a percentage of sales, was primarily due to an increase in pound solids produced during the year ended September 30, 2024, as we began to recover from Hurricane Ian, which negatively impacted our harvest during the year ended September 30, 2023. 8 Table of Content s Competition The orange and specialty citrus markets are intensely competitive, but no single producer has any significant market power over any market segments, as is consistent with the production of most agricultural commodities.
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.
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 endeavor 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.
We rely on our independent contractors to manage their respective employee levels so that the harvesting and hauling services they are obligated to perform for us are consistent with the contractual obligations of these independent contractors and enable us to satisfy our harvesting and hauling needs.
We rely on our independent contractors to manage their respective employee levels so that the harvesting and hauling services they are obligated to perform for us are consistent with their contractual obligations and enable us to satisfy our harvesting and hauling needs.
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.
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, 2024, we had 199 full-time employees and no part-time employees.
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.
Our citrus produced for the processed citrus market during the year ended September 30, 2024, under our largest agreement, was subject to floor prices and ceiling prices.
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.
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 independent contractors significantly benefit our operations and performance.
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.
Revenue in the years ended September 30, 2024 and 2023, was generated primarily from two separate contracts with Tropicana. 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, 2024 or 2023.
We are subject to other laws of the United States and the rules and regulations of various governing bodies within the United States, which may differ among jurisdictions.
We are also subject to other non-environmental laws of the United States and the rules and regulations of various governing bodies within the United States, which may differ among jurisdictions.
The average pound solids per box was 5.02, 5.28, and 5.66 for the years ended September 30, 2023, 2022 and 2021, respectively. We generally use multi-year contracts with citrus processors that include pricing structures based on a floor and ceiling price.
The average pound solids per box was 4.83 and 5.02, for the years ended September 30, 2024 and 2023, respectively. We generally use multi-year contracts with citrus processors that include pricing structures based on a floor and ceiling price.
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.
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 5,120 gross acres, or 9.6% of our total acreage.
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.
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. These new agreements were effective on October 1, 2020, and expired on July 31, 2024.
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.
Management believes that our employee relations are favorable, that our relations with our independent 9 Table of Content s contractors are favorable, and that the relations that we and the independent contractors have with the employees of the independent contractors are favorable.
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.
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 Significant Customer Revenue from Tropicana represented 86.8% and 81.3%, of our consolidated revenue for the years ended September 30, 2024 and 2023, respectively.
Land holdings not meeting our total return criteria are considered surplus to our operations and efforts are being made to sell such land holdings or to exchange such land holdings for land considered to be more compatible with our business objectives and total return profile, or to lease such land holdings.
Land holdings that do not meet our total return criteria are considered surplus to our operations and efforts are being made to sell such land holdings 5 Table of Content s or to exchange such land holdings for land considered to be more compatible with our business objectives and total return profile, or to lease such land holdings.
Our objectives are to produce the highest quality agricultural products, create innovative land uses, opportunistically acquire and convert undervalued assets, sell under-productive land and other assets not meeting our total return profile, generate recurring and sustainable profit with the appropriate balance of risk and reward, and exceed the expectations of stockholder, customers, clients and partners.
Our objectives are to produce the highest quality agricultural products, create innovative land uses, opportunistically sell land and other assets not meeting our total return profile, and generate recurring and sustainable profit with the appropriate balance of risk and reward.
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.
On October 30, 2023, we entered into the Grove Management Agreement and we continue to provide grove management services to several small third-party grove-owners on acres within our groves. Revenues generated from our grove management services were 6.3% and 3.2% of our total citrus revenues for the years ended September 30, 2024 and 2023, respectively.
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.
The operating activities on our land holdings and in which we engage as of September 30, 2024, are categorized in the following table: Gross Acreage (estimated) Operating Activities Alico Citrus Citrus Groves 48,229 Citrus Cultivation Citrus Nursery 22 Citrus Tree Development 48,251 Land Management and Other Operations Ranch 4,594 Leasing and Conservation Other Land 526 Mining Lease and Office 5,120 Total 53,371 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 Strategy Our core business strategy is to maximize stockholder value through continuously improving the return on our invested capital, either by holding and managing our existing land through skilled agricultural production, leasing, or other opportunistic means of monetization, disposing of under productive land or business units and acquiring new land or operations with appreciation potential.
Our Strategy Our core business strategy is to maximize stockholder value through continuously improving the return on our invested capital and pursuing opportunistic means of monetization, including holding and managing our existing land through skilled agricultural production and disposing of or leasing land or business units.
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.
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.
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.
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. These raw materials are purchased on an order basis without long-term commitments.
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.
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. Employees live close to their work, which reduces traffic and commuting times.
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.
This new agreement was effective August 31, 2023 and expires on August 31, 2025 and is also based on fixed prices per pound solid with escalation clauses over the term of the agreement. Our sales to the fresh citrus market constituted 1.2% and 1.5% of our Alico Citrus revenues for the years ended September 30, 2024 and 2023, respectively.
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 principal lines of business are citrus groves and land management. We are one of the largest citrus producers in the United States of America.
Competition is impacted by several factors including quality, production, demand, brand recognition, market prices, weather, disease, export/import restrictions and foreign currency exchange rates.
Citrus is grown domestically in several states including Florida, California, Arizona, and Texas, as well as foreign countries, most notably Brazil and Mexico. Competition is impacted by several factors including quality, production, demand, brand recognition, market prices, weather, disease, export/import restrictions and foreign currency exchange rates.
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 overall decrease in the sales to the processed markets as a percentage of citrus revenues during the year ended September 30, 2024, as compared to the year ended September 30, 2023, is due to the signing of the Grove Management Agreement discussed above.
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.
Our Alico Citrus business segment cultivates citrus trees to produce citrus for delivery to the processed and fresh citrus markets. Our sales to the processed market were 92.0% and 94.0%, of Alico Citrus revenues for the years ended September 30, 2024 and 2023, respectively.
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.
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.
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.
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. Typically, citrus trees become fruit-bearing four to five years after planting and peak around seven to eight years after planting.
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.
Alico citrus groves total 48,251 gross acres or 90.4% of our land holdings. Citrus Land Lease Effective July 1, 2024, we extended a lease representing approximately 637 acres for one-year through June 30, 2025. We have the right, on the same terms and conditions, to extend this lease for two one-year periods.
These raw materials are purchased on an order basis without long-term commitments. Our key suppliers for fertilizer, herbicides and insecticides include Howard Fertilizer, Wedgeworth’s, Nutrien AG Solutions and Helena Agri-Enterprises. Societal Well-Being We remain committed to a healthy and equitable society to ensure our collective well-being for future generations.
Our key suppliers for fertilizer, herbicides and insecticides include Howard Fertilizer, Wedgeworth’s, Nutrien AG Solutions and Helena Agri-Enterprises. Societal Well-Being We remain 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, safety and education.
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.
Our estimated Land Management and Other Operations acreage is detailed in the following table as of September 30, 2024: Acreage Hendry County 1,319 Collier County 3,275 Glades County 526 Total 5,120 7 Table of Content s During the year ended September 30, 2024, we sold approximately 17,556 acres of the Alico Ranch (including 17,229 to the State of Florida) for approximately $78,930 and recognized a gain of $77,025.
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.
We do not include our independent contractors in our number of employees because they are not employees. 10 Table of Content s Our employees work in the following divisions: Alico Citrus 175 Corporate, General, Administrative and Other 24 Total employees 199 None of our employees are subject to a collective bargaining agreement.
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 34,060 remaining acres are classified as net plantable acres. Net plantable acres are those that are capable of directly producing fruit.
Our total return profile is a combination of operating income potential and long-term appreciation.
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.
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.
On June 26, 2023, we renewed another agreement to supply Tropicana with citrus fruit, which replaced a prior agreement that had expired after the fiscal year 2023 harvest season.
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.
During the year ended September 30, 2023, we sold approximately 2,225 acres for $12,000 and recognized a gain of $11,432. Revenues from Land Management and Other Operations were 3.4% and 4.3% of total operating revenues for the years ended September 30, 2024 and 2023, respectively.
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.
Although not a cure for citrus greening, this OTC application has been found to mitigate some of the impacts of citrus greening and to decrease the rate of fruit drop and improve fruit quality. During the year ended September 30, 2024, we treated substantially all our producing trees (approximately 4.5 million) with OTC.
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.
Inclusion and Diversity People are critical to our efforts to drive growth and deliver value for stockholders.
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.
The Tropicana Agreement is effective June 5, 2024 through July 31, 2027, subject to its terms and conditions, and succeeds existing agreements with Tropicana that expired at the end of July 2024. Citrus Greening Treatment In 2022, we began testing a new application of Oxytetracycline Hydrochloride (“OTC”), which is registered with the U.S.
This 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.
Our estimated citrus acreage is further detailed in the following table: Net Plantable Producing Developing Fallow Total Net Plantable Support & Other Gross DeSoto County 15,894 — 854 16,748 4,867 21,615 Polk County 4,806 — 95 4,901 1,845 6,746 Collier County 3,689 — 469 4,158 2,899 7,057 Hendry County 4,958 — 310 5,268 3,229 8,497 Charlotte County 853 — 637 1,490 1,040 2,530 Highlands County 1,093 — — 1,093 130 1,223 Hardee County 402 — — 402 181 583 Total 31,695 — 2,365 34,060 14,191 48,251 Of the 48,251 gross acres of citrus land we own and manage, 14,191 acres are classified as support and other acreage.
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.
During the year ended September 30, 2024, we sold approximately 798 acres of citrus land for approximately $7,183 and recognized a gain of $4,391. Revenues from our Alico Citrus operations were 96.6% and 95.7%, of our total operating revenues for the years ended September 30, 2024 and 2023, respectively.
Removed
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.
Added
We own approximately 53,371 acres of land in eight Florida counties (Charlotte, Collier, DeSoto, Glades, Hardee, Hendry, Highlands and Polk), and approximately 48,700 acres of oil, gas and mineral rights throughout Florida. We hold these oil, gas and mineral rights on substantially all our owned acres, with additional mineral rights on other leased acres.
Removed
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.
Added
Recent Developments Florida Citrus Commission Development On November 21, 2024, the Florida Citrus Commission passed an emergency rule, based on requests from the Florida Citrus Processors Association and Florida Citrus Mutual, to reduce the minimum Brix value (a measurement of sugar content) for oranges harvested for the period beginning on November 21, 2024 and ending on May 23, 2025 from 8.5 to 7.0 and to eliminate the minimum ratio of total soluble solids to anhydrous citric acid (a measure of maturity).
Removed
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.
Added
While it is not possible for us to estimate the potential impact of this ruling, it may increase the amount of the Company's fruit that would be acceptable at the processors. Hurricane Milton On October 9, 2024, Hurricane Milton hit Florida and the Company's citrus groves sustained hurricane or tropical storm force winds for varying durations of time.
Removed
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.
Added
Based on observations to date, the Company sustained minimal tree damage; however, there was measurable fruit drop from trees in our northern groves, particularly in Polk and Hardee County. We will continue to evaluate the impact of Hurricane Milton on our anticipated harvest in assessing any incremental impairment to be recognized at December 31, 2024.
Removed
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.
Added
However, an estimate of the amount of any incremental write-down to inventory cannot be made at this time. Inventory Net Realizable Value Adjustment On September 30, 2024, we recognized an adjustment of $19,549, to reduce inventory to its net realizable value.
Removed
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.
Added
The inventory adjustment is the result of expectations for a significantly lower than anticipated harvest of the Early and Mid-Season and Valencia crops for the 2024-2025 season due to the ongoing challenges posed by Hurricane Ian.
Removed
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.
Added
More than half of our crops dropped before harvesting in fiscal year 2023 and fiscal year 2024 fruit production did not return to pre-Ian levels.
Removed
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.
Added
These lower levels of production remain a concern to management as we begin to harvest the 2024-2025 crops, and the Company is evaluating our performance daily. 4 Table of Content s Amended Credit Agreement with Metropolitan Life Insurance Company On September 16, 2024, we amended our Credit Agreement (the “Amendment”) with Metropolitan Life Insurance Company, which, among other things (i) increases the borrowing capacity under the revolving line of credit (the “RLOC”) from $25,000 to $95,000 and (ii) now extends the maturity date of the RLOC to May 1, 2034.
Removed
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.
Added
This Amendment replaces the Company’s $70,000 working capital line of credit with Rabo Agrifinance, Inc., which was due to mature on November 1, 2025.
Removed
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.
Added
Tropicana Orange Purchase Agreement On June 5, 2024, we entered a new three-year Orange Purchase Agreement (the “Tropicana Agreement”) to sell oranges to Tropicana at prices that are approximately 33% to 50% higher, over the life of the contract, than the average price for all the citrus fruit sold to Tropicana last season.
Removed
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.
Added
Environmental Protection Agency (“EPA”) under the Federal Insecticide, Fungicide and Rodenticide Act (“FIFRA”) as an active ingredient in pesticide products for the control of certain bacterial diseases in non-food bearing trees; this new application involves use of OTC-containing products as a therapy to address citrus greening.
Removed
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.
Added
On October 28, 2022, after a review of the new application method by the EPA and the Florida Department of Agriculture and Consumer Services (“FDACS”) pursuant to Section 24(c) of FIFRA, FDACS granted a special local-need registration through December 4, 2025, and EPA did not disapprove of FDACS’s grant of this registration.
Removed
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.
Added
This represents a second round of injections for approximately 35% of our producing trees, which were treated in fiscal year 2023.
Removed
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.
Added
We received $1,805 of grant money from the Florida Citrus Research and Field Trial Foundation (the "CRAFT Foundation") in January 2024 that covered substantially all of the costs of the 2023-24 harvest season OTC applications, $1,157 was received in third and fourth quarters of 2024 and $35 received in October 2024, that will cover approximately 35% of the 2024-25 harvest season OTC applications.
Removed
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.
Added
In July 2024 the FDACS approved a label change for the OTC product to remove the restriction that the product cannot be applied more than two years in a row. This change will enable us to apply the OTC treatment in calendar year 2025 to the trees that we started treating in 2023.
Removed
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.
Added
In addition, the CRAFT Foundation has approved a third round of grant monies, for which we can apply, that would further mitigate our OTC costs for the year ended September 30, 2024 and future costs for the years ended September 30, 2025 and 2026.
Removed
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.
Added
However, it is not yet possible to provide a reliable estimate of any such grant monies at this time.
Removed
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.
Added
Extension of Grove Management Agreement On October 30, 2023, the Company entered into a Citrus Grove Management Agreement (the "Grove Management Agreement") with an unaffiliated group of third parties to provide citrus grove caretaking services for approximately 3,300 acres owned by such third parties.
Removed
John E. Kiernan, our President and CEO). During the year ended September 30, 2022, we sold approximately 9,414 acres for $41,421 thousand and recognized a gain of $39,124 thousand.
Added
Under the terms of the Grove Management Agreement, the Company is reimbursed by the third parties for all its costs incurred related to providing these services and receives a management fee based on acres covered under this agreement.
Removed
During the year ended September 30, 2021, we sold approximately 17,434 acres for $26,664 thousand and recognized a gain of $25,272 thousand (including approximately 7,372 acres for $20,120 thousand to the State of Florida, under the Florida Forever program, for a gain of $5,570 thousand). See Note 4.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

73 edited+34 added−30 removed88 unchanged
Biggest changeThese transactions may present significant risks such as insufficient assets to offset liabilities assumed, potential loss of significant operating revenues and income streams, increased or unexpected expenses, inadequate return of capital, regulatory or compliance issues, the triggering of certain financial covenants in our debt instruments (including accelerated repayment) and unidentified issues not discovered in due diligence.
Biggest changeWe continuously evaluate the disposition of operating businesses and assets and may in the future undertake one or more significant transactions, which could be material to our business and could take any number of forms, including asset sales, mergers, or the sale of equity interests. 15 Table of Content s These transactions may present significant risks such as potential loss of significant operating revenues and income streams, inadequate return of capital, regulatory or compliance issues, the triggering of certain financial covenants in our debt instruments (including accelerated repayment) and unidentified issues not discovered in due diligence.
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.
ESG issues, including those related to climate change, our workforce 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.
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.
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 evolving concern for, or perception of 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.
The following factors, in addition to other factors described in this ”Risk Factors” section and included elsewhere in this document may have a significant impact on the market price of our common stock: 19 Table of Contents • the occurrence of severe weather conditions and other catastrophes; • our operating and financial performance, quarterly or annual earnings relative to similar companies; • publication of research reports or news stories about us, our competitors or our industry, or positive or negative recommendations or withdrawal of research coverage by securities analysts; • the public’s reaction to our press releases, our other public announcements and our filings with the SEC; • announcements by us or our competitors of acquisitions, business plans or commercial relationships; • any major change in our board of directors or senior management; • additional sales of our common stock by us, our directors, executive officers, or principal shareholders; • adverse market reaction to any indebtedness we may incur or securities we may issue in the future; • short sales, hedging and other derivative transactions in our common stock; • exposure to capital market risks related to changes in interest rates, realized investment losses, credit spreads, equity prices, foreign exchange rates and performance of insurance- linked investments; • our creditworthiness, financial condition, performance, and prospects; • our dividend policy and whether dividends on our common stock have been, and are likely to be, declared and paid from time to time; • any repurchases by us of any of our outstanding shares of common stock under our share repurchase plan; • perceptions of the investment opportunity associated with our common stock relative to other investment alternatives; • regulatory or legal developments; • changes in general market, economic, and political conditions; • terrorism and/or instability, unrest and wars, such as the conflicts involving Ukraine and Russia or Israel and its surrounding regions, and other international conflicts; • conditions or trends in our industry, geographies or customers; • changes in accounting standards, policies, guidance, interpretations or principles; and • threatened or actual litigation or government investigations.
The following factors, in addition to other factors described in this “ Risk Factors” section and included elsewhere in this document may have a significant impact on the market price of our common stock: • the occurrence of severe weather conditions and other catastrophes; • our operating and financial performance, quarterly or annual earnings relative to similar companies; • publication of research reports or news stories about us, our competitors or our industry, or positive or negative recommendations or withdrawal of research coverage by securities analysts; • the public’s reaction to our press releases, our other public announcements and our filings with the SEC; • announcements by us or our competitors of acquisitions, business plans or commercial relationships; • any major change in our board of directors or senior management; • additional sales of our common stock by us, our directors, executive officers, or principal stockholders; • adverse market reaction to any indebtedness we may incur or securities we may issue in the future; • short sales, hedging and other derivative transactions in our common stock; • exposure to capital market risks related to changes in interest rates, realized investment losses, credit spreads, equity prices, foreign exchange rates and performance of insurance- linked investments; • our creditworthiness, financial condition, performance, and prospects; • our dividend policy and whether dividends on our common stock have been, and are likely to be, declared and paid from time to time; • any repurchases by us of any of our outstanding shares of common stock under our share repurchase plan; • perceptions of the investment opportunity associated with our common stock relative to other investment alternatives; • regulatory or legal developments; • changes in general market, economic, and political conditions; • terrorism and/or instability, unrest and wars, such as the conflicts involving Ukraine and Russia or Israel and its surrounding regions, and other international conflicts; • conditions or trends in our industry, geographies or customers; • changes in accounting standards, policies, guidance, interpretations or principles; and • threatened or actual litigation or government investigations.
Such disclosures may also be at least partially reliant on third-party information that we have not independently verified or cannot be independently verified.
Such disclosures may also be at least partially reliant on third-party information that we have not independently verified or cannot currently be independently verified.
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.
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 works to remain in compliance with such regulations.
Moreover, while we may create and publish voluntary disclosures regarding ESG matters from time to time, many of the statements in those voluntary disclosures are based on hypothetical expectations and assumptions that may or may not be 15 Table of Contents representative of current or actual risks or events or forecasts of expected risks or events, including the costs associated therewith.
Moreover, while we may create and publish voluntary disclosures regarding ESG matters from time to time, many of the statements in those voluntary disclosures are based on hypothetical expectations and assumptions that may or may not be representative of current or actual risks or events or forecasts of expected risks or events, including the costs associated therewith.
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.
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. Widespread use of social media and networking sites by consumers has greatly increased the accessibility and speed of dissemination of information.
Fresh produce is vulnerable to adverse weather conditions, including windstorms, floods, drought and temperature extremes, which are quite common and may occur with higher frequency or be less predictable in the future due to the effects of climate change. Unfavorable growing conditions can reduce both crop size and crop quality.
Fresh produce is vulnerable to adverse weather conditions, including windstorms, floods, drought and temperature extremes, which are quite common and may occur with higher frequency or be less predictable in the future due to the 11 Table of Content s effects of climate change. Unfavorable growing conditions can reduce both crop size and crop quality.
Furthermore, we require lessees of our properties to comply with environmental regulations as a condition of leasing. We also purchase insurance for environmental liability when it is available; however, these insurance contracts may not be adequate to cover such costs or damages or may not continue to be available at prices and terms that would be satisfactory.
Furthermore, we require lessees of our properties to comply with environmental regulations as a condition of leasing. We also purchase insurance for environmental liabilities when it is available; however, these insurance policies may not be adequate to cover such costs or damages or may not continue to be available at prices and terms that would be satisfactory.
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.
Despite these efforts, we may not be successful in achieving our goals, may modify or terminate any of these 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, current or future federal or state healthcare legislation and regulation, including the Affordable Care Act, may increase our medical costs or the medical costs of our labor contractors that could be passed on to us. Increases in commodity or raw product costs, such as fuel and chemical costs, could adversely affect our operating results.
In addition, current or future federal or state healthcare legislation and regulation, may increase our medical costs or the medical costs of our labor contractors that could be passed on to us. Increases in commodity or raw product costs, such as fuel and chemical costs, could adversely affect our operating results.
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.
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.
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.
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, pandemics or health crises, 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.
System security risks, data protection breaches, cyber-attacks and systems integration issues could disrupt our internal operations or services provided to customers, and any such disruption could reduce our expected revenues, increase our expenses, damage our reputation and adversely affect our stock price.
System security risks, data protection breaches, cybersecurity incidents and systems integration issues could disrupt our internal operations or services provided to customers, and any such disruption could reduce our expected revenues, increase our expenses, damage our reputation and adversely affect our stock price.
In addition, sophisticated hardware and operating system software and applications that we develop internally or procure from third parties may contain defects in design or manufacture, including “bugs” and other problems that could unexpectedly interfere with the operation of the system.
In addition, sophisticated hardware and operating system 20 Table of Content s software and applications that we develop internally or procure from third parties may contain defects in design or manufacture, including “bugs” and other problems that could unexpectedly interfere with the operation of the system.
Many factors may affect the cost and supply of citrus, including external conditions, commodity market fluctuations, changes in governmental laws and regulations, tariffs, agricultural programs, severe and prolonged weather conditions and natural disasters.
Many factors may affect the cost and supply of citrus, including external conditions, commodity market fluctuations, changes in governmental laws and regulations, tariffs, agricultural programs, severe and prolonged weather conditions and 17 Table of Content s natural disasters.
The increasing concern over climate change also may result in more regional, federal, and/or global legal and regulatory requirements to reduce or mitigate the effects of greenhouse gases or climate change.
The increasing concern over climate change also may result in more 16 Table of Content s regional, federal, and/or global legal and regulatory requirements to reduce or mitigate the effects of greenhouse gases or climate change.
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.
High fixed water costs related to our citrus lands will continue to adversely affect 19 Table of Content s earnings. Prices received for many of our products are dependent upon prevailing market conditions and commodity prices.
There can be no assurance that we will generate sufficient cash from continuing operations in the future or have sufficient cash surplus or net profits to pay dividends on our common stock.
There can be no assurance that we will generate sufficient cash from continuing operations in the future or have sufficient cash surplus or net profits to pay dividends on our common 23 Table of Content s stock.
Our business may be adversely affected if we lose key employees. We depend to a large extent on the services of certain key management personnel. These individuals have extensive experience and expertise in the business lines and segments in which they work. The loss of any of these individuals could have a material adverse effect on our businesses.
Our business may be adversely affected if we lose key employees. We depend to a large extent on the services of certain key management personnel. These individuals have extensive experience and expertise in the business lines and segments in which they work.
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.
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 86.8% and 81.3%, of our revenues in the years ended September 30, 2024 and 2023, respectively.
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.
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. Item 1B. Unresolved Staff Comments None.
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.
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. We face a potential for environmental liability by virtue of our ownership of real property.
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.
Macroeconomic conditions, such as rising inflation, the deadly conflicts in Ukraine and Israel, and pandemics or health crises could adversely affect our business, financial condition, results of operations and cash flows. During the year ended September 30, 2024, we continued to experience inflationary pressure on labor costs, which we expect to continue through 2025.
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. We have historically paid regular quarterly dividends to the holders of our common stock.
Any such investigations may result in us being subject to criminal and civil penalties and other remedial measures, which could have an adverse impact on our business, results of operations, financial condition and liquidity. Inflation can have a significant adverse effect on our operations.
Such investigations can also lead to fines or injunctions or orders with respect to future activities, and may result in us being subject to criminal and civil penalties and other remedial measures, which could have an adverse impact on our business, results of operations, financial condition and liquidity. Inflation can have a significant adverse effect on our operations.
We may undertake one or more significant corporate transactions that may not achieve their intended results, may adversely affect our financial condition and our results of operations, or result in unforeseeable risks to our business. We continuously evaluate the acquisition or disposition of operating businesses and assets and may in the future undertake one or more significant transactions.
We may undertake one or more significant corporate transactions that may not achieve their intended results, may adversely affect our financial condition and our results of operations, or result in unforeseeable risks to our business.
Some of our debt is based on variable rates of interest, which could result in higher interest expenses in the event of an increase in the interest rates. Our credit facility and certain of our term loans that we have currently bear interest at variable rates, which will generally change as interest rates change.
Some of our debt is based on variable rates of interest, which could result in higher interest expenses in the event of an increase in the interest rates. Our credit facility currently bears interest at variable rates, which will generally change as interest rates change.
In addition, the increased emphasis on ESG matters has resulted in, and may continue to result in, the adoption of laws and regulations, including reporting requirements, which increased regulation will likely lead to increased compliance costs, as well as increased scrutiny regarding our ESG activities and disclosures, which may lead to increased litigation risks.
In addition, the increased emphasis by some stakeholders on ESG matters has resulted in, and may continue to result in, the adoption of laws and regulations, including reporting requirements, which may not always be uniform across jurisdictions, and which could lead to increased compliance costs, as well as increased scrutiny regarding our ESG activities and disclosures, which may lead to increased litigation risks.
If our cash flow and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay capital expenditures, sell material assets or operations, obtain additional capital or restructure our debt.
If our cash flow and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay capital expenditures, sell material assets or operations, obtain additional capital or restructure our debt. In evaluating these options, we may need to consider strategic shifts to enhance our financial stability and cash flow.
We benefit from reduced real estate taxes due to the agricultural classification of a majority of our land. Changes in the classification or valuation methods employed by county property appraisers could cause significant changes in our real estate property tax liabilities.
We benefit from reduced real estate taxes due to the agricultural classification of a majority of our land. Changes in the classification or valuation methods employed by county property appraisers could cause significant changes in our real estate property tax liabilities. For the years ended September 30, 2024 and 2023, we paid $2,659 and $2,786, in real estate taxes, respectively.
If adopted, these rules would impose increased compliance costs and could lead to increased litigation risks related to disclosures made pursuant to the rules, either of which could materially and adversely affect our financial performance.
These rules, to the extent they survive legal challenge (in whole or in part), would impose increased compliance costs and could lead to increased litigation risks related to disclosures made pursuant to the rules, either of which could materially and adversely affect our financial performance.
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.
These taxes were based upon the agricultural use (“Green Belt”) values determined by the county property appraisers in which counties we own land, of $81,628 and $90,481 for the years ended September 30, 2024 and 2023, respectively, which differs significantly from the fair values determined by the county property appraisers of $352,379 and $419,915, respectively.
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.
As of September 30, 2024, we had $92,551 in principal amount of indebtedness outstanding under our secured credit facilities, and an additional availability of $86,606 is available under our working capital and revolving lines of credit.
Each of these diseases is widespread in Florida and exists in our citrus groves and in the areas where our citrus groves are located. The success of our citrus business is directly related to the viability and health of our citrus groves. Citrus greening is one of the most serious citrus plant diseases in the world.
Our citrus groves are subject to damage and loss from diseases such as citrus greening and citrus canker. Each of these diseases is widespread in Florida and exists in our citrus groves and in the areas where our citrus groves are located. The success of our citrus business is directly related to the viability and health of our citrus groves.
Our ability to generate cash, make scheduled payments or refinance our obligations depends on our successful financial and operating performance. Our financial and operating performance, cash flow and capital resources depend upon prevailing economic conditions and various financial, business, and other factors, many of which are beyond our control.
Our financial and operating performance, cash flow and capital resources depend upon prevailing economic conditions and various financial, business, and other factors, many of which are beyond our control.
We bear the risk that the rates we are charged by our lenders will increase faster than the earnings and cash flow of our business, which could reduce profitability, adversely affect our ability to service our debt, cause us to breach covenants contained in our credit facility and term loans, any of which could materially adversely affect our business, financial condition, results of operations and cash flows.
We bear the risk that the rates we are charged by our lenders will increase faster than the earnings and cash flow of our business, which could reduce profitability, adversely affect our ability to service our debt, cause us to breach covenants contained in our credit facility and term loans, any of which could materially adversely affect our business, financial condition, results of operations and cash flows. 22 Table of Content s Risks Related to our Common Stock The market price of our common stock may be volatile or decline, and you may not be able to resell your shares at or above the price you initially paid for our common stock.
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.
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.
These 12 Table of Contents strategic initiatives may not be successful in generating revenues or improving operating profit and, if they are, it may take longer than anticipated.
This and other strategic initiatives may relate to the management and utilization of our land and may not be successful in generating revenues or improving operating profit and, if they are, it may take longer than anticipated.
If we are unable to successfully develop and execute our strategic growth initiatives, or if they do not adequately address the challenges or opportunities we face, our business, financial condition and prospects may be adversely affected.
Limited supply of certain agricultural commodities due to world and domestic market conditions can cause commodity prices to rise in certain situations. If we are unable to successfully develop and execute our strategic growth initiatives, or if they do not adequately address the challenges or opportunities we face, our business, financial condition and prospects may be adversely affected.
Our citrus groves are subject to damage and loss from disease including, but not limited to, citrus greening and citrus canker, which could negatively impact our business, financial condition, results of operations and cash flows. Our citrus groves are subject to damage and loss from diseases such as citrus greening and citrus canker.
Given the significant impact of these conditions, we may evaluate strategic options for the management and utilization of our land. Our citrus groves are subject to damage and loss from disease including, but not limited to, citrus greening and citrus canker, which could negatively impact our business, financial condition, results of operations and cash flows.
Florida is particularly susceptible to the occurrence of hurricanes and tropical storms. Depending on where any particular hurricane or tropical storm makes landfall, our properties could experience significant, if not catastrophic damage.
Depending on where any particular hurricane or tropical storm makes landfall, our properties have in the past and could in the future experience significant, if not catastrophic damage.
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.
Such event could materially harm our business, results of operations, and financial condition. 21 Table of Content s 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.
Once a tree is infected, its productivity generally decreases. While the disease poses no threat to humans or animals, it has devastated citrus crops throughout the United States and abroad. Named for its green, misshapen fruit, citrus greening disease has now killed millions of citrus plants in the southeastern United States and has spread across the entire country.
Citrus greening is one of the most serious citrus plant diseases in the world. Once a tree is infected, its productivity generally decreases. While the disease poses no threat to humans or animals, it has devastated citrus crops throughout the United States and abroad.
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.
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. 13 Table of Content s We currently have citrus supply contracts with Tropicana that expire in both 2025 and 2027, with the majority expiring in 2027.
This restatement and any future 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. Such investigations can also lead to fines or injunctions or orders with respect to future activities.
In addition, any future material weaknesses, restatements, investigations, and legal or administrative proceedings that could result therefrom, may divert our management’s time and attention and cause us to incur substantial costs.
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.
Our citrus groves produce the significant majority of our annual operating revenues. A significant reduction in available citrus from our citrus groves has in the past and could in the future decrease our operating revenues and materially adversely affect our business, financial condition, results of operations and cash flows.
Agricultural operations traditionally provide almost all of our operating revenues, with citrus being the largest portion and 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. Although our processed citrus is subject to minimum pricing, we are unable to predict with certainty the final price we will receive for our products.
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.
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.
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.
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. Fresh produce is highly perishable and generally must be brought to market and sold soon after harvest.
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.
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 past. 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.
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.
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.
Our ability to make these payments depends on our future performance, which will be affected by various financial, business, macroeconomic and other factors, many of which we cannot control . We may be unable to generate sufficient cash flow to service our debt obligations. To service our debt, we require a significant amount of cash.
We may be unable to generate sufficient cash flow to service our debt obligations. To service our debt, we require a significant amount of cash. Our ability to generate cash, make scheduled payments or refinance our obligations depends on our successful financial and operating performance.
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.
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. 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.
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. Florida is particularly susceptible to the occurrence of hurricanes and tropical storms.
Primarily, as a result of citrus greening, orange production in the state of Florida has continued to drop. Citrus canker is a disease affecting citrus species and is caused by a bacterium which is spread by contact with infected trees or by windblown transmission.
Citrus canker is a disease affecting citrus species and is caused by a bacterium which is spread by contact with infected trees or by windblown transmission.
As a result, climate change could negatively affect our financial condition and results of operations. In addition, the SEC’s proposed climate-related disclosure rules, if adopted, would require new climate-related disclosures in SEC filings, including certain climate-related metrics and greenhouse gas emissions data, information about climate-related targets and goals, transition plans, if any, and attestation requirements.
In addition, the SEC’s climate-related disclosure rules would require new climate-related disclosures in SEC filings, including certain climate-related metrics and greenhouse gas emissions data, information about climate-related targets and goals, transition plans, if any, and attestation requirements; although the SEC has issued an order to stay the rules pending the outcome of litigation challenging the rules.
Surface water in Hendry County, where much of our agricultural land is located, comes from Lake Okeechobee via the Caloosahatchee River and a system of canals used to irrigate such land.
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. 14 Table of Content s Surface water in Hendry County, where much of our agricultural land is located, comes from Lake Okeechobee via the Caloosahatchee River and a system of canals used to irrigate such land.
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.
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. 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.
Risks Related to our Common Stock The market price of our common stock may be volatile or decline, and you may not be able to resell your shares at or above the price you initially paid for our common stock. The trading price of our common stock could be volatile, and you could lose all or part of your investment.
The trading price of our common stock could be volatile, and you could lose all or part of your investment.
These diseases can significantly increase our costs, which could materially adversely affect our business, financial condition, results of operations and cash flows. Our citrus groves produce the significant majority of our annual operating revenues.
Both of these diseases pose a significant threat to the Florida citrus industry and to our citrus groves. There can be no assurance that our mitigation efforts will be successful. These diseases can significantly increase our costs, which could materially adversely affect our business, financial condition, results of operations and cash flows.
The costs to us to eliminate or alleviate cyber or other security problems, bugs, viruses, worms, malicious software programs and security vulnerabilities could be significant, and our efforts to address these problems may not be successful and could result in interruptions, delays, cessation of service and loss of existing or potential customers that may impede our sales, distribution or other critical functions.
Our implementation of various procedures and controls to monitor and mitigate security threats and to increase security for our information, facilities and infrastructure may result in increased capital and operating costs, and our efforts to address these problems may not be successful and could result in interruptions, delays, cessation of service and loss of existing or potential customers that may impede our sales, distribution or other critical functions.
Management’s assessment of our internal control over financial reporting as of September 30, 2022 concluded that our internal control over financial reporting was not effective and that a material weakness existed.
Management’s assessment of our internal control over financial reporting as of September 30, 2024 concluded that our internal control over financial reporting was not effective and that a material weakness existed related to controls around the completeness and accuracy of its spreadsheet controls used in the preparation of our inventory net realizable value calculations.
Although our processed citrus is subject to minimum pricing, we are unable to predict with certainty the final price we will receive for our products. In some instances, the harvest and growth cycle will dictate when such products must be marketed which may or may not be advantageous in obtaining the best price.
In some instances, the harvest and growth cycle will dictate when such products must be marketed which may or may not be advantageous in obtaining the best price. Excessive supplies tend to cause severe price competition and lower prices for the commodity affected.
Portions of our information technology infrastructure also may experience interruptions, delays or cessations of service or produce errors in connection with systems integration or migration work that takes place from time to time. We may not be successful in implementing new systems and transitioning data, which could cause business disruptions and be more expensive, time consuming, disruptive and resource intensive.
We are dependent on our information systems and computer-based programs and those of third parties, including our agricultural operations information, electronic data processing, and accounting data. Portions of our information technology infrastructure also may experience interruptions, delays or cessations of service or produce errors in connection with systems integration or migration work that takes place from time to time.
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.
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.
Infected trees produce fruits that are green, misshapen and bitter, unsuitable for sale as fresh fruit or for juice. Infected trees can die within a few years. At the present time, there is no known cure for citrus greening once trees have become infected.
Named for its green, misshapen fruit, citrus greening disease has now killed millions of citrus plants in the southeastern United States and has spread across the entire country. Infected trees produce fruits that are green, misshapen and bitter, unsuitable for sale as fresh fruit or for juice. Infected trees can die within a few years.
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.
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 96.6% and 95.7%, of our operating revenues in the years ended September 30, 2024 and 2023, respectively.
Land available for sale in the future to raise additional funds consists primarily of productive land, the disposition of which may negatively affect our citrus business revenue stream. In addition, there are factors beyond our control that could negatively affect our citrus business revenue stream.
We have used proceeds from land sales to repay variable rate debt in the past and expect to use future proceeds from land sales to repay variable rate debt. Land available for sale in the future to raise additional funds includes productive land, the disposition of which may negatively affect our citrus business revenue stream.
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.
We also routinely evaluate the benefits of disposing of certain of our assets, which could include the exit from lines of business.
We do not maintain key-man life insurance with respect to any of our employees. Our success will be dependent on our ability to continue to attract, employ and retain skilled personnel in our business lines and segments.
Our success will be dependent on our ability to continue to attract, employ and retain skilled personnel in our business lines and segments. Management identified a material weakness in connection with the audit of our consolidated financial statements for the year ended September 30, 2024.
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 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, are subject to less environmental regulation, and, in some instances, have greater resources and market flexibility than us.
Removed
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.
Added
Furthermore, recent and future hurricanes and tropical storms may lead to inventory impairment charges. For the fiscal year ended September 30, 2024, we recognized an inventory impairment charge of $19,549 in the fourth quarter of the year ended September 30, 2024 related to our 2024-2025 estimated harvest.
Removed
Both of these diseases pose a significant threat to the Florida citrus industry and to our citrus groves. While we try to use best management practices to attempt to control diseases and their spread, there can be no assurance that our mitigation efforts will be successful.
Added
At the present time, there is no known cure for citrus greening once trees have become infected. Primarily, as a result of citrus greening, orange production in the state of Florida has continued to drop.
Removed
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.
Added
Additionally, OTC Hydrochloride treatment for these diseases appears effective in the short term at mitigating impacts of citrus greening, but it is not a cure and whether its mitigation benefits would continue in the longer term remains uncertain.
Removed
We currently have citrus supply contracts with Tropicana that expire in both 2024 and 2025, with the majority expiring in 2024.

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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 48,927 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.
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 48,229 8,497 6,746 7,057 21,593 — 2,530 583 1,223 Citrus Nursery 22 — — — 22 — — — — Total Citrus Groves 48,251 8,497 6,746 7,057 21,615 — 2,530 583 1,223 Land Management and Other Operations 4,594 1,319 — 3,275 — — — — — Mining 526 — — — — 526 — — — Total 53,371 9,816 6,746 10,332 21,615 526 2,530 583 1,223 Approximately 36,800 acres of the properties listed are encumbered by credit agreements totaling $220,000, of which there was $92,551 outstanding at September 30, 2024.
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.
For a more detailed description of the credit agreements and collateral please see Note 7. Long-Term Debt and Lines of Credit to the Consolidated Financial Statements included in this Annual Report.
Item 2. Properties As of September 30, 2023, we owned approximately 72,000 acres of land located in eight counties in Florida.
Item 2. Properties As of September 30, 2024, we owned approximately 53,371 acres of land located in eight counties in Florida.
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.
Although we have mineral rights on substantially all our owned acres, with additional mineral rights on other leased acres, we currently collect commercial mining royalties on 526 acres within Land Management and Other and agricultural mining royalties on approximately 158 acres within our Citrus operations. We do not collect mining royalties on any non-owned lands.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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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.
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.
Removed
Item 4. Mine Safety Disclosures Not Applicable. 21 Table of Contents PART II
Added
Commitments and Contingencies to the Consolidated Financial Statements included in this Annual Report for further information. 25 Table of Content s

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 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.
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 2024 in September 2024.
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.
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 November 26, 2024, our stock transfer records indicated there were 376 holders of record of our common stock.
Recent Sales of Unregistered Securities None Item 6. [Reserved] 22 Table of Contents
Recent Sales of Unregistered Securities None. Recent Purchases of Equity Securities by the Issuer and Affiliated Purchasers None Item 6. [Reserved] 27 Table of Content s

Item 7. Management's Discussion & Analysis

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

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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.
Biggest changeConsolidated Results of Operations The following discussion provides an analysis of our results of operations for the year ended September 30, 2024, as compared to the year ended September 30, 2023. 28 Table of Content s (in thousands) September 30, Change 2024 2023 $ % Operating revenues: Alico Citrus $ 45,059 $ 38,145 $ 6,914 18.1 % Land Management and Other Operations 1,584 1,701 (117) (6.9) % Total operating revenues 46,643 39,846 6,797 17.1 % Gross profit (loss): Alico Citrus (57,569) 5,186 (62,755) NM Land Management and Other Operations 1,186 1,260 (74) (5.9) % Total gross (loss) profit (56,383) 6,446 (62,829) NM General and administrative expenses 11,071 10,643 428 4.0 % Loss from operations (67,454) (4,197) (63,257) NM Total other income, net 78,406 6,656 71,750 NM Income before income taxes 10,952 2,459 8,493 345.4 % Income tax provision 4,597 801 3,796 473.9 % Net income 6,355 1,658 4,697 283.3 % Net loss attributable to noncontrolling interests 618 177 441 249.2 % Net income attributable to Alico, Inc. common stockholders $ 6,973 $ 1,835 $ 5,138 280.0 % 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, 2024 and 2023: September 30, 2024 2023 Operating revenues: Alico Citrus 96.6 % 95.7 % Land Management and Other Operations 3.4 % 4.3 % Total operating revenues 100.0 % 100.0 % 29 Table of Content s The following discussion provides an analysis of our reportable segments: Alico Citrus (in thousands, except per box and per pound solids data) September 30, Change 2024 2023 Unit % Operating Revenues: Early and Mid-Season $ 14,534 $ 11,954 $ 2,580 21.6 % Valencias 26,925 23,906 3,019 12.6 % Fresh Fruit and other 774 1,051 (277) (26.4) % Grove Management Services 2,826 1,234 1,592 129.0 % Total $ 45,059 $ 38,145 $ 6,914 18.1 % Boxes Harvested: Early and Mid-Season 1,194 979 215 22.0 % Valencias 1,855 1,669 186 11.1 % Total Processed 3,049 2,648 401 15.1 % Fresh Fruit 35 41 (6) (14.6) % Total 3,084 2,689 395 14.7 % Pound Solids Produced: Early and Mid-Season 5,364 4,586 778 17.0 % Valencias 9,365 8,702 663 7.6 % Total 14,729 13,288 1,441 10.8 % Pound Solids per Box: Early and Mid-Season 4.49 4.68 (0.19) (4.0) % Valencias 5.05 5.21 (0.16) (3.1) % Price per Pound Solids: Early and Mid-Season $ 2.71 $ 2.61 $ 0.10 3.8 % Valencias $ 2.88 $ 2.75 $ 0.13 4.7 % Price per Box: Fresh Fruit $ 15.89 $ 14.02 $ 1.87 13.3 % Operating Expenses: Cost of Sales $ 89,420 $ 50,961 $ 38,459 75.5 % Harvesting and Hauling 11,843 10,573 1,270 12.0 % Fresh Fruit and other (229) (29,326) 29,097 (99.2) % Grove Management Services 1,593 751 842 112.1 % Total $ 102,627 $ 32,959 $ 69,668 211.4 % 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.
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.
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 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.
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.
Comparison of the year ended September 30, 2024 and 2023 for the Land Management and Other Operations Segment The decrease in revenues from Land Management and Other Operations for the year ended September 30, 2024, as compared to the prior year, was primarily due to a decrease in hunting and grazing lease revenue due to the sales of portions of the Alico Ranch, which resulted in the reduction of land covered under our hunting and grazing lease contracts.
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 .
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 47 .
The effective tax rate for the year ended September 30, 2023 is higher than the statutory tax rate due to the deferred rate change and return-to-provision adjustments, which was partially offset by a reduction in the valuation allowance.
The effective tax rate for the year ended September 30, 2023 is higher than the statutory tax rate due to the deferred rate change and return-to-provision adjustments, which were partially offset by a reduction in the valuation allowance.
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.
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 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.
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.
We consider policies and estimates relating to the following matters to be critical accounting policies: 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.
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 decrease in operating expenses from Land Management and Other Operations for the year ended September 30, 2024, 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 the Alico Ranch.
As of September 30, 2023, we were in compliance with all of the financial covenants.
As of September 30, 2024, we were in compliance with all of the financial covenants.
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.
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, 2024 and September 30, 2023, we recorded a valuation allowance of $5,757 and $4,170, respectively.
As of September 30, 2023 and 2022, long-lived assets were comprised of property and equipment. 30 Table of Contents Fair Value Measurements We categorize our financial instruments measured at fair value into a fair value hierarchy that prioritizes the inputs used in pricing the asset or liability into a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value as follows: • Level 1 – Observable inputs such as quoted market prices for identical assets and liabilities in active markets; • Level 2 – Inputs, other than the quoted prices for identical assets and liabilities in active markets, for which significant other observable market inputs are readily available; and • Level 3 – Unobservable inputs in which there is little or no market data, such as internally developed valuation models which require the reporting entity to develop its own assumptions.
Fair Value Measurements We categorize our financial instruments measured at fair value into a fair value hierarchy that prioritizes the inputs used in pricing the asset or liability into a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value as follows: • Level 1 – Observable inputs such as quoted market prices for identical assets and liabilities in active markets; • Level 2 – Inputs, other than the quoted prices for identical assets and liabilities in active markets, for which significant other observable market inputs are readily available; and • Level 3 – Unobservable inputs in which there is little or no market data, such as internally developed valuation models which require the reporting entity to develop its own assumptions.
Deferred income tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.
Deferred income tax assets and liabilities are measured using enacted income 35 Table of Content s tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.
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.
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, 2024 was $11,071, compared to $10,643 for the year ended September 30, 2023.
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 aggregate decrease in pound solids per box of 3.6% during the year ended September 30, 2024, as compared to the year ended September 30, 2023, was mainly due to the internal quality of the fruit not being as strong as it had been in the previous year.
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.
This decrease in pound solids per box was also due in part to a further acceleration of the harvesting of the Early and Mid-Season and Valencia crops to maximize the box production and avoid additional fruit drop.
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.
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 revenue is derived from sales to packing houses that purchase the citrus on a per box basis.
Land and Other Leasing operating expenses include real estate, property taxes, and general and administrative expenses, including salaries, benefits and legal and professional fees.
Land and Other Leasing operating expenses includes real estate, property taxes, and general and administrative expenses, including legal and professional fees.
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.
Net cash used in operating activities was $30,497 and $6,254, respectively, for the years ended September 30, 2024 and 2023, respectively. See Part I, Item 1, Business , included in this Annual Report for a discussion of our year highlights and our evolving business strategy.
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
“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. 36 Table of Content s Item 7A.
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.
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 increased annually by 10% of consolidated net income for the preceding years, or $174,628 applicable for the year ended September 30, 2024; (iii) minimum current ratio of 1.50 to 1.00; and (iv) debt to total assets ratio not greater than 0.625 to 1.00.
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.
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. In the following discussion and analysis, dollars are in thousands, except, per share and per acre amounts.
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.
We operate as two business segments, and all of our operating revenues are generated in the United States. For the years ended September 30, 2024 and 2023 we generated operating revenues of $46,643 and $39,846, respectively, a loss from operations of $67,454 and $4,197, respectively, and net income attributable to common stockholders of $6,973 and $1,835, respectively.
S u mmary of S i gnificant Accounting Policies to our Consolidated Financial Statements included in this Annual Report for additional information about the fair value of our debt. As of September 30, 2023 and 2022, we did not have any assets held for sale that had been measured at fair value on a non-recurring basis.
Summary of Significant Accounting Policies to our Consolidated Financial Statements included in this Annual Report for additional information about the fair value of our debt. As of September 30, 2024 and 2023, we did not have any assets held for sale that had been measured at fair value on a non-recurring basis. Impact of Accounting Pronouncements See Item 8.
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.
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.
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.
Harvesting and Hauling costs represent the costs of bringing citrus product to processors and vary, 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 third-party grove caretaking and the purchase and reselling third-party 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.
We also 30 Table of Content s provide citrus grove caretaking and harvest and haul management services to third parties from which revenues recorded as Grove management Services are generated, including a management fee. Other revenues principally consist of the purchase and reselling of fruit.
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.
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.
Our cash flow estimates are based on historical results adjusted to reflect our best estimates of future market conditions and operating conditions.
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, 2024 and 2023, long-lived assets were comprised of property and equipment.
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.
The increase in Operating expenses for the year ended September 30, 2024, as compared to the year ended September 30, 2023, 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, $27,389 in crop insurance proceeds and $839 in property and casualty insurance reimbursements for Hurricane Ian and $1,315 in proceeds from federal relief proceeds received under the Florida Citrus Recovery Block Grant (“CRBG”) program in the year ended September 30, 2023, all of which were recognized within Operating expenses under Fresh Fruit and other.
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.
Liquidity and Capital Resources A comparative balance sheet summary is presented in the following table: (in thousands) September 30, 2024 2023 Change Cash and cash equivalents $ 3,150 $ 1,062 $ 2,088 Total current assets $ 40,627 $ 58,805 $ (18,178) Total current liabilities $ 10,651 $ 15,065 $ (4,414) Working capital $ 29,976 $ 43,740 $ (13,764) Total assets $ 398,719 $ 428,353 $ (29,634) Principal amount of term loans and lines of credit $ 92,551 $ 129,319 $ (36,768) Current ratio 3.81 to 1 3.90 to 1 Debt to total assets ratio 0.23 to 1 0.30 to 1 Debt to equity ratio 0.37 to 1 0.53 to 1 Sources and Uses of Liquidity and Capital Our business has historically generated positive net cash flows from operating activities.
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.
During the year ended September 30, 2022, a bargain sale of land to the State of Florida, at a price below market value, resulted in a charitable contribution carryover for tax purposes and generated a tax benefit of $6,300, of which $500 was utilized immediately, $8 was recognized during the year ended September 30, 2024 and nothing was recognized in 2023.
Long-Term Debt and Lines of Credit , operating leases as described in Note 1 1 . Leases and purchase commitments as described in Note 14. Commitments and Contingencies to our Consolidated Financial Statements included in this Annual Report. Critical Accounting Policies and Estimates Our Consolidated Financial Statements are prepared in accordance with U.S.
Financial Statements and Supplementary Data . These include principal and interest payments on long-term debt as described in Note 7. Long-Term Debt and Lines of Credit, operating leases as described in Note 11. Leases and purchase commitments as described in Note 14. Commitments and Contingencies to our Consolidated Financial Statements included in this Annual Report.
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.
Operating expenses for our Alico Citrus segment consist primarily of Cost of Sales, Harvesting and Hauling costs and Grove Management Services 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.
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%.
The USDA, in its October 11, 2024 Citrus Crop Forecast for the 2023-24 harvest season, indicated the overall Florida orange crop increased from approximately 15,820 boxes for the 2022-23 crop year to approximately 17,960 boxes for the 2023-24 crop year, an increase of 13.5%.
Net Cash (Used In) Provided By Investing Activities The shift to net cash used in investing activities for the year ended September 30, 2023, from net cash provided by investing activities for the year ended September 30, 2022, was driven by lower proceeds from ranch land sales.
Net Cash Provided By (Used In) Investing Activities The shift to net cash provided by investing activities for the year ended September 30, 2024, from net cash used in investing activities for the year ended September 30, 2023, was driven by the sale of 18,354 acres of land for approximately $86,217 for the year ended September 30, 2024 as compared to the sale of 2,225 acres of ranch land for $12,000 in the prior year period.
We experienced a decline in total box production in the 2022-2023 harvest season crop of 51.5%.
We experienced an increase in total box production in the 2023-2024 harvest season crop of 14.7% compared to the 2022-23 crop year.
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.
Furthermore, our Harvesting and Hauling expenses increased 12.0% driven by an increase in the total number of boxes harvested in the year ended September 30, 2024, when compared to the prior year and a $842 increase in operating expenses relating to the Grove Management Agreement. 31 Table of Content s Land Management and Other Operations The table below presents key operating measures for the years ended September 30, 2024 and 2023 for the Land Management and Other Operations segment: (in thousands) September 30, Change 2024 2023 $ % Revenue From: Land and Other Leasing $ 1,284 $ 1,327 $ (43) (3.2) % Other 300 374 (74) (19.8) % Total $ 1,584 $ 1,701 $ (117) (6.9) % Operating Expenses: Land and Other Leasing $ 393 $ 436 $ (43) (9.9) % Other 5 5 — — % Total $ 398 $ 441 $ (43) (9.8) % 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, farm leases, a lease to a third party of an aggregate mine, leases of oil extraction rights to third parties, and other miscellaneous income.
Consolidated Statements of Cash Flows The following table details the items contributing to the changes in cash and cash equivalents and restricted cash for the years ended September 30, 2023, 2022 and 2021: (in thousands) Years Ended September 30, 2023 2022 2021 Net cash (used in) provided by operating activities $ (6,254) $ 6,523 $ 16,504 Net cash (used in) provided by investing activities (4,123) 22,468 (3,268) Net cash provided by (used in) financing activities 13,204 (29,012) (32,037) Net increase (decrease) in cash and cash equivalents and restricted cash $ 2,827 $ (21) $ (18,801) Net Cash (Used In) Provided By Operating Activities The decrease in net cash used in operating activities for the year ended September 30, 2023, as compared to the year ended September 30, 2022, was primarily due to lower revenues as a result of the fruit drop caused by Hurricane Ian.
Consolidated Statements of Cash Flows The following table details the items contributing to the changes in cash and cash equivalents and restricted cash for the years ended September 30, 2024 and 2023: (in thousands) September 30, 2024 2023 Net cash (used in) operating activities $ (30,497) $ (6,254) Net cash provided by (used in) investing activities $ 68,178 (4,123) Net cash (used in) provided by financing activities $ (37,975) 13,204 Net (decrease) increase in cash and cash equivalents and restricted cash $ (294) $ 2,827 Net Cash (Used In) Operating Activities The increase in net cash used in operating activities for the year ended September 30, 2024, as compared to the year ended September 30, 2023, was primarily due to $27,389 in crop insurance proceeds and $839 in property and casualty insurance reimbursements for Hurricane Ian and $1,315 in proceeds under the CRBG program in the year ended September 30, 2023, partially offset by a decrease in accounts payable at September 30, 2024 driven by timing of spending.
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).
We recognized an increase in Grove Management Services revenues for the year ended September 30, 2024, as compared to the year ended September 30, 2023 of $1,592, which was due to the signing of the Grove Management Agreement in the current year (see “Recent Developments” in Item 1. Business for further details).
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.
Comparison of the year ended September 30, 2024 and 2023 for the Alico Citrus Segment The increase in revenue for the year ended September 30, 2024, as compared to the year ended September 30, 2023, was primarily due to a 10.8% increase in pound solids produced as the trees continue to recover from the effects of Hurricane Ian and an increase in the blended price per pound solids of 4.2% for the Early and Mid-season and Valencia crops as a result of more favorable pricing in one of our contracts with Tropicana.
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.
Management believes that a combination of cash-on-hand, cash generated from operations, asset sales and availability under our line 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. 33 Table of Content s Borrowing Facilities and Long-term Debt We have a $95,000 revolving line of credit ("RLOC"), of which $86,606 is available for general corporate purposes as of September 30, 2024 (see Note 7.
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.
Other Income, net Other income, net, for the years ended September 30, 2024 and 2023 was $78,406 and $6,656, respectively.
The decrease in other income, net was primarily due to less ranch land sales, which resulted in lower gains on sales of $11,509 thousand during the year ended September 30, 2023, compared to $41,102 thousand for the prior year period. 27 Table of Contents Income Taxes For the years ended September 30, 2023 and 2022, the provision for income taxes was $801 thousand and $1,069 thousand, respectively, and the related effective income tax rates were 32.6% and 8.3%, respectively.
These gains on land sales are partially offset by interest expense during the years ended September 30, 2024 and 2023. 32 Table of Content s Income Taxes For the years ended September 30, 2024 and 2023, the provision for income taxes was $4,597 and $801, respectively, and the related effective income tax rates were 42.0% and 32.6%, respectively.
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.
We do not anticipate that we will be able to recognize any of the charitable deduction carryover before it expires in 2027. As of September 30, 2024 and 2023, the valuation allowance was $5,757 and $4,170, respectively, resulting in a provision (benefit) of $1,588 and $(139), respectively.
Removed
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.
Added
Business Segments Operating segments are defined in the criteria established under FASB ASC Topic 280 as components of public entities that engage in business activities from which they may earn revenues and incur expenses for which separate financial information is available and which is evaluated regularly by our CODM in deciding how to assess performance and allocate resources.
Removed
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.
Added
Our CODM assesses performance and allocates resources based on its reportable segments.
Removed
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.
Added
For the year ended September 30, 2024, the Alico Citrus segment generated 96.6% of our consolidated revenues and the Land Management and Other Operations segment generated 3.4% of our consolidated revenues.
Removed
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%.
Added
However, due to the timing of the harvest for the year ended September 30, 2024, more of the citrus crop was harvested in the first and second quarters of that fiscal year. We sell our Early and Mid-Season and Valencia oranges to orange juice processors.
Removed
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.
Added
We also recorded a decrease in revenue from sales of Fresh Fruit and other. This decrease, compared to the same period in the prior year, was principally due to a decrease in the amount of fruit that was resold on behalf of grove owners.
Removed
The decrease in sales of Fresh Fruit was primarily due to a decrease in both boxes sold and pricing per box.
Added
By comparison, we only recognized $299 in crop insurance proceeds during the year ended September 30, 2024. No further insurance of federal relief program proceeds are expected to be received. In addition, we recognized an inventory impairment charge of $19,549 in the fourth quarter of the year ended September 30, 2024 related to our 2024-2025 estimated harvest (see Note 3.
Removed
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.
Added
Inventories to the Consolidated Financial Statements included in this Annual Report for further information).
Removed
We experienced significant cost increases in fertilizer, herbicide, labor and fuel in maintaining our groves.
Added
The increase was principally attributable to an increase in personnel costs, partially offset by lower depreciation, lower legal and professional fees due to the dismissal of the stockholder litigation in 2023 and lower insurance costs, as compared to the same period last year.
Removed
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.
Added
The increase in other income, net was primarily due to the sale of 18,354 acres of land for approximately $86,217 which resulted in a gain of $81,416 (including 17,229 acres of the Alico Ranch to the State of Florida for approximately $77,631 in gross proceeds).
Removed
In addition, we incurred additional costs related to the clean-up and repairs as a result of Hurricane Ian.
Added
During the year ended September 30, 2023 we sold approximately 2,225 acres of ranch land for $12,000 and recognized a gain of $11,432.
Removed
We also recorded an increase in our Harvesting and Hauling expense per box, which is directly related to an increase in the harvesting labor costs, as well as the increased time spent by the harvesters to fill the boxes as a result of the increased fruit drop caused by Hurricane Ian for the year ended September 30, 2023, when compared to the prior year.
Added
The effective tax rate for the year ended September 30, 2024 is higher than the statutory tax rate principally due to an increase in the valuation allowance on our charitable deduction carryforward and state income taxes.
Removed
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.
Added
In light of recent hurricanes, costs of maintaining the citrus groves and harvesting and hauling of citrus products continue to increase, and we continue to evaluate the short and long-term use of our land.
Removed
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. 26 Table of Contents The credit amounts shown in “Fresh Fruit and other” in operating expenses above primarily represent insurance proceeds of approximately $27,389 thousand in crop insurance and $839 thousand in property and casualty reimbursements for Hurricane Ian received in the year ended September 30, 2023, and federal relief proceeds received under the CRBG program in the years ended September 30, 2023 and 2022 of approximately $1,315 thousand and $1,123 thousand, respectively.
Added
The RLOC was amended on September 17, 2024, and the primary terms of the amendment were an extension of the maturity date to May 1, 2034, an increase in the amount available under the RLOC from $25,000 to $95,000 and securing the RLOC by real property, consisting of approximately 36,800 gross acres of citrus land.
Removed
Additionally, the modification to the grazing leases resulted in a reduction in the ad valorem taxes due from the lessees, as we revised the grazing lease agreements due to the sale of certain of the ranch acres previously covered under the agreement.
Added
We also repaid current borrowings under the $70,000 working capital line of credit ("WCLC") with Rabo Agrifinance, Inc., (“Rabo”) and there were no available borrowings under this facility at September 30, 2024, which was cancelled in October 2024.
Removed
A valuation allowance of $4,309 thousand was recorded on September 30, 2022, resulting in a net benefit of $1,468 thousand. As of September 30, 2023 the valuation allowance was reduced to $4,170 thousand, resulting in a benefit of $139 thousand.
Added
Net Cash (Used In) Provided By Financing Activities The shift to net cash used in financing activities for the year ended September 30, 2024, from net cash provided by financing activities for the year ended September 30, 2023, was primarily due to the repayment of borrowings under the WCLC and the $19,094 in outstanding borrowings under the Met Life Variable-Rate Term Loan with the proceeds from the sale of the Alico Ranch, as compared to net borrowings under the under the WCLC for the year ended September 30, 2023. 34 Table of Content s Contractual Obligations Our material cash requirements from known contractual and other obligations are described in the accompanying notes to the financial statements within Item 8.
Removed
Management believes that a combination of cash-on-hand, cash generated from operations, asset sales (see “Recent Developments” in Item 1.
Added
Critical Accounting Policies and Estimates Our Consolidated Financial Statements are prepared in accordance with U.S. GAAP, which requires management to make estimates, judgments and assumptions that affect the amounts reported in those financial statements and accompanying notes.
Removed
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.
Added
Quantitative and Qualitative Disclosures about Market Risk We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.
Removed
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.
Removed
There were no changes to the commitment amount.

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Other ALCO 10-K year-over-year comparisons