ALCO

MKT CAP $274.6MP/E 168.2DIV YIELD 0.54%FCF YIELD -1.29%REV TTM $17.1M −61.4%NET INCOME $1.5MNET DEBT $27.5M52W 31.35 – 44.46SEC XBRL · TTM TO Invalid Date

How ALCO rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

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149

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words, now 9,942

New in FY2025

Risks Related to our Business 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.
These strategic initiatives have included, for example, beginning in 2023 a multi-year entitlement process for our approximately 4,600-acre grove near Fort Myers, in Collier County, which has included, but is not limited to, the completion of environmental assessments, the development of conservation strategies, the preparation of market assessments to facilitate planning and beginning to conduct selective stakeholder outreach efforts.
In addition, on January 6, 2025, we announced a Strategic Transformation in the Company’s business focus, to wind down our Alico Citrus division, which holds our citrus production operations, to focus on our long-term diversified land usage and real estate development strategy (the “Strategic Transformation”).
Due to increasing financial challenges from citrus greening disease and environmental factors for many seasons, we have decided to not spend further material capital on our citrus operations and plan to substantially wind down Alico Citrus’ primary operations after completion of the 2024-2025 harvest in April 2025, including reducing most of our citrus production workforce.
Moreover, in May 2025, we entered into a Mutual Contract Termination Agreement with Tropicana, terminating our agreement with Tropicana in its entirety following the fulfillment of all obligations under that agreement concerning the 2024/2025 Crop Year and all outstanding amounts had been settled by June 30, 2025.
We expect to maintain our commitment to the Florida agriculture industry through diversified farming operations on nearly all our land holdings following this citrus production transition.
We also expect to entitle certain parcels of our land for commercial and residential development.
Successfully executing our diversified land usage and real estate development strategy will depend on many factors, including our ability to: • secure necessary regulatory approvals and permits for land development projects; • effectively manage and allocate resources to new business initiatives; • attract and retain skilled personnel with expertise in diversified land usage and real estate development; • navigate potential market fluctuations and economic conditions; • manage our commercial relationships and comply with our obligations under agreements with our commercial counterparties, as well as real estate acquirers and developers; maintain strong relationships with lenders and continue to satisfy covenants and conditions under current loan agreements; and • address potential environmental and zoning matters, and other challenges inherent in real estate development.
The Strategic Transformation and other strategic initiatives that may relate to the management and utilization of our land may not be successful in generating revenues or improving operating profit and, if they are, it may take longer than anticipated.
There can be no assurance that the implementation of the Strategic Transformation or any other strategic growth initiative will be successful, and we may not realize anticipated benefits at levels we project or at all, which would adversely affect our business, financial condition and prospects.
Our workforce reduction may not result in our intended outcomes and may yield unintended consequences and additional costs.
In connection with the Strategic Transformation, on January 3, 2025, the Board approved a reduction in the Company’s workforce by up to 172 employees, effective between January 6, 2025 and April 1, 2025 (the “Workforce Reduction”).
The Company has incurred aggregate charges of $2,638 in connection with the Workforce Reduction, primarily consisting of severance payments, employee benefits and related costs.
The Company may incur additional expenses not currently contemplated due to events associated with the Workforce Reduction.
The charges that the Company expects to incur in connection with the Workforce Reduction are estimates and subject to a number of assumptions, and actual results may differ materially.
The Workforce Reduction may result in unintended consequences and costs, such as the loss of institutional knowledge and expertise, attrition beyond the intended number of employees, decreased morale among our remaining employees, and the risk that we may not achieve the anticipated benefits of the Workforce Reduction.
In addition, while positions have been eliminated, certain functions necessary to our operations remain, and we may be unsuccessful in distributing the duties and obligations of departed employees among our remaining employees.
The Workforce Reduction could also make it difficult for us to pursue, or prevent us from pursuing, new opportunities and initiatives due to insufficient personnel, or require us to incur additional and unanticipated costs to hire new personnel to pursue such opportunities or initiatives.
The Workforce Reduction could also harm our reputation, making our ability to recruit skilled personnel difficult.
If we are unable to realize the anticipated benefits from the Workforce Reduction, or if we experience significant adverse consequences from the Workforce Reduction, our business, financial condition, and results of operations may be materially adversely affected.
Adverse weather conditions, natural disasters and other natural conditions, including the effects of climate change and weather events, particularly because our properties are geographically concentrated in Florida, have in the past and could in the future impose significant costs and losses on our business and adversely affect our results of operations, financial position and cash flows.
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.
These factors have in the past and could in the future 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 properties 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 properties are located in close proximity to each other, the impact of adverse weather conditions has been and may continue to be material to our results of operations, financial position and cash flows.
Florida is particularly susceptible to the occurrence of hurricanes, tropical storms, floods, unusually heavy or prolonged rain, droughts and heat waves, among other weather events.
Depending on where any particular weather event makes landfall, our properties have in the past and could in the future experience significant, if not catastrophic, damage.
Such damage could materially affect our operations, could result in a loss of operating revenues from those products for a multi-year period, and have in the past and may lead to inventory impairment charges.
For instance, recent Hurricane Milton had a material adverse effect on the fruit production from our trees for the 2024-2025 harvest season and, potentially to a lesser extent, the next season and future seasons.
We seek to minimize risk by the purchase of insurance contracts, but a significant portion of our crops remain uninsured.
Given the significant impact of these conditions, we have evaluated and may continue to evaluate strategic options for the management and utilization of our land.
In January 2025, we announced the Strategic Transformation, under which we plan to wind down our Alico Citrus division and in May 2025, we entered into a Mutual Contract Termination Agreement with Tropicana, terminating our agreement with them in its entirety.
As we transition our strategy toward land development, adverse weather and climate-related events can also affect the timing, feasibility and economics of our land initiatives.
Flooding, storm surge, and extreme precipitation can damage or delay infrastructure (e.g., roads, drainage, utilities), increase carrying and remediation costs, and necessitate design changes, additional mitigation or re‑permitting.
Property and flood insurance availability and pricing, as well as buyer financing conditions and market absorption, may tighten following major storms, which can delay or reduce expected sale proceeds or lead to terminated contracts.
Any of these developments could increase costs, defer revenues, or negatively affect valuations and project returns.
Accordingly, adverse weather conditions may affect our results of operations and financial position in both our remaining citrus activities but also in connection with our long‑term land sales and development strategy.
A significant portion of our revenues are historically derived from our citrus business and our Strategic Transformation involves expected significant revenue shift to real estate development and diversified farming operations and any adverse event affecting these areas could disproportionately harm our business.
Our revenues from our citrus business were 96.0% and 92.0%, of our operating revenues in the years ended September 30, 2025 and 2024, respectively.
Our citrus division has historically been one of the largest citrus producers in the United States, and because of the significance of the revenues derived from this business, we are vulnerable to adverse events or market conditions affecting our citrus business, or the citrus industry, generally, which could have a significant adversely impact on our overall results of operations, financial condition and cash flows.

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Gone since FY2024

Risks Related to our Business Adverse weather conditions, natural disasters and other natural conditions, including the effects of climate change and hurricanes and tropical storms, particularly because our citrus groves are geographically concentrated in Florida, could impose significant costs and losses on our business and adversely affect our results of operations, financial position and cash flows.
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 Table of Content s effects of climate change.
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.
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.
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.
Hurricanes and tropical storms have the potential to destroy crops and impact citrus production through the loss of fruit and destruction of trees and/or plants either as a result of high winds or through the spread of windblown disease.
Such damage could materially affect our citrus operations and could result in a loss of operating revenues from those products for a multi-year period.
For instance, recent Hurricane Ian had a material adverse effect on the fruit production from our trees for the 2023 harvest season and, potentially to a lesser extent, the next season and future seasons.
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.
We seek to minimize hurricane risk by the purchase of insurance contracts, but a significant portion of our crops remain uninsured.
In addition to hurricanes and tropical storms, the occurrence of other natural disasters and climate conditions in Florida, such as tornadoes, floods, freezes (such as the freeze in the last week of January 2022), unusually heavy or prolonged rain, droughts and heat waves, could have a material adverse effect on our operations and our ability to realize income from our crops or properties.
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.
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.
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.
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.
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.
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.
There is no known cure for citrus canker at present, although some management practices, including the use of copper-based bactericides, can mitigate its spread and lessen its effect on infected trees; however, there is no assurance that currently available technologies will control such disease effectively.
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.
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.
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.
Moreover, there are risks associated with the approval being time limited at the moment to December 4, 2025 and to being a state special-local need approval under FIFRA Section 24(c) as opposed to being part of the full FIFRA registration with EPA for OTC-containing products.
If OTC treatments do not prove effective in the longer term or are not approved for use Table of Content s after December 4, 2025, our ability to manage these diseases could be further compromised, exacerbating the potential negative impacts on our business.
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.
Our citrus division is one of the largest citrus producers in the United States, and because of the significance of the revenues derived from this business, we are vulnerable to adverse events or market conditions affecting our citrus business, in particular, or the citrus business, generally, which could have a significant adversely impact on our overall results of operations, financial condition and cash flows.

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Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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