Alico (ALCO)

Risks

• Our business operations could be significantly harmed by natural disasters or global epidemics.
• Adverse weather conditions, natural disasters and other natural conditions, including the effects of climate change, could impose significant costs and losses on our business.
• Our citrus groves are geographically concentrated in Florida and the effects of adverse weather conditions including hurricanes and tropical storms could adversely affect our results of operations, financial position and cash flows.
• 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 failure to effectively perform grove management functions or to effectively manage an expanded portfolio of groves could materially and adversely affect our business, financial condition, and results of operations.
• Our business is highly competitive and we cannot assure you that we will maintain our current market share.
• We depend on our relationship with Tropicana and Tropicana’s relationship with certain third parties for a significant portion of our business. 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.
• With the sale of a majority of ownership of Tropicana to a French private equity firm, there is some heightened risk and uncertainty in our current relationship with Tropicana, which potentially could result in a significant reduction in revenues and cash flows if that relationship were to be changed as a result.
• Our agricultural products are subject to supply and demand pricing which is not predictable.
• We are subject to the risk of product contamination and product liability claims.
• Our agricultural operations are subject to water use regulations restricting our access to water.
• Changes in immigration laws could impact our ability to harvest our crops.
• If 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to be taxable, we may face adverse consequences, and if the laws applicable to such transactions are amended or repealed, we may not be able to dispose of properties in the future on a tax deferred basis.
• 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.
• Our citrus business is seasonal.
• We face significant competition in our agricultural operations.
• Our earnings are sensitive to fluctuations in market supply and prices and demand for our products.
• Climate change, or legal, regulatory, or market measures to address climate change, may negatively affect our business and operations.
• Increases in labor, personnel and benefits costs could adversely affect our operating results.
• Increases in commodity or raw product costs, such as fuel and chemical costs, could adversely affect our operating results.
• We are subject to transportation risks.
• 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.
• Liability for the use of fertilizers, pesticides, herbicides and other potentially hazardous substances could increase our costs.
• Our business may be adversely affected if we lose key employees.
• If our internal controls are ineffective, our operating results could be adversely affected.
• Inflation can have a significant adverse effect on our operations.
• We incur increased costs as a result of being a publicly traded company.
• 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.
• 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.
• We may be unable to generate sufficient cash flow to service our debt obligations.
• 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.
• 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.
• There can be no assurance that we will resume the repurchase of shares of our common stock.