Alico (ALCO) risk factors, FY2024 10-K

Risks Related to our Business

1. 01Our 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
2. 02A significant portion of our revenues are derived from our citrus business and any adverse event affecting such business could disproportionately harm our business
3. 03Our failure to effectively perform grove management services, or to effectively manage an expanded portfolio of groves, could materially and adversely affect our business, financial condition, and results of operations
4. 04Many companies compete in our different businesses and offer products that are similar to our products or are direct competitors to our products. We face strong competition from these and other companies engaged in the agricultural product business
5. 05There can be no assurance that we will continue to compete effectively with our present and future competitors, and our ability to compete could be materially adversely affected by our debt levels and debt service requirements
6. 06Our agricultural products are subject to supply and demand pricing which is not predictable
7. 07If 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
8. 08We are subject to the risk of product contamination and product liability claims
9. 09Our agricultural operations are subject to water use regulations restricting our access to water
10. 10Changes in immigration laws could impact our ability to harvest our crops
11. 11Harm to our reputation could have an adverse effect on our business, financial condition and results of operations
12. 12If a transaction intended to qualify as a Section 1031 Exchange is later determined to be taxable, we may face adverse consequences, and if the laws applicable to such transactions are amended or repealed, we may not be able to dispose of properties in the future on a tax deferred basis
13. 13We 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
14. 14Our citrus business is seasonal
15. 15We face significant competition in our agricultural operations
16. 16Our earnings are sensitive to fluctuations in market supply and prices and demand for our products
17. 17Climate change, or legal, regulatory, or market measures to address climate change, may negatively affect our business and operations
18. 18ESG 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
19. 19Increases in labor, personnel and benefits costs could adversely affect our operating results
20. 20Increases in commodity or raw product costs, such as fuel and chemical costs, could adversely affect our operating results
21. 21We are subject to transportation risks
22. 22We 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
23. 23Liability for the use of fertilizers, pesticides, herbicides and other potentially hazardous substances could increase our costs
24. 24Compliance with applicable environmental laws may substantially increase our costs of doing business, which could reduce our profits
25. 25Our business may be adversely affected if we lose key employees
26. 26life 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
27. 27Inflation can have a significant adverse effect on our operations
28. 28Macroeconomic 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
29. 29We incur increased costs as a result of being a publicly traded company
30. 30System 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
31. 31software 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
32. 32Our business is subject to complex and evolving laws and regulations regarding privacy and data protection

Risks Related to Our Indebtedness

1. 33We 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
2. 34We may be unable to generate sufficient cash flow to service our debt obligations
3. 35Some 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

Risks Related to our Common Stock

1. 36The 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
2. 37We 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