What changed in this filing

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Item 1. Business

2021-12-07 compared with 2020-12-08 · 189 added, 100 removed, 397 unchanged (42% of the section changed)

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Securities and Exchange Commission (the "SEC") including, but not limited to, the Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any amendments thereto, are available free of charge on our website as soon as reasonably practicable after such material is electronically filed or furnished with the SEC.

Our recent press releases and information regarding corporate governance, including the charters of our audit, compensation, executive and nominating governance committees, as well as our code of business conduct and ethics are also available to be viewed or downloaded electronically at http://www.alicoinc.com .

Our recent press releases and information regarding corporate governance, including the charters of our audit, compensation, nominating and governance, and sustainability and corporate responsibility committees, as well as our code of business conduct and ethics are also available to be viewed or downloaded electronically at http://www.alicoinc.com .

Unless explicitly stated herein, the information on our website is not incorporated by reference into this Annual Report on Form 10-K and the Company disclaims any such incorporation by reference.

Alico is an agribusiness with a legacy of achievement and innovation in citrus and conservation.

The Company owns approximately 100,000 acres of land in eight Florida counties (Charlotte, Collier, DeSoto, Glades, Hardee, Hendry, Highlands and Polk), holding mineral rights on approximately 90,000 acres of those owned acres.

The Company owns approximately 83,000 acres of land in eight Florida counties (Charlotte, Collier, DeSoto, Glades, Hardee, Hendry, Highlands and Polk), and approximately 90,000 acres of mineral rights throughout Florida.

Alico holds these mineral rights on substantially all its owned acres, with additional mineral rights on other acres.

Our principal lines of business are citrus groves and conservation.

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operates two divisions:

Alico Citrus, a citrus producer, and Land Management and Other Operations, which includes land conservation, encompassing environmental services, land leasing and related support operations.

Alico Citrus, a citrus producer on its own land and as a manager of citrus groves for third parties, and Land Management and Other Operations, which includes land conservation, encompassing environmental services, land leasing and related support operations.

The Company manages its land based upon its primary usage and reviews its performance based upon two primary classifications - Alico Citrus and Land Management and Other Operations.

The Alico Citrus division includes the production, cultivation and sale of citrus on its owned lands and as a manager of citrus groves for third parties.

Land Management and Other Operations include 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 operations generating income.

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These measures have had a significant adverse impact upon many sectors of the economy, including certain agriculture businesses.

During March 2020, as a precautionary measure to ensure financial flexibility and maintain maximum liquidity in response to the COVID-19 pandemic, the Company implemented several measures that we believed would ensure sufficient liquidity for the next several months, including drawing down an aggregate of $70,000,000 on its revolving credit facilities.

This decision was made to safeguard the Company’s liquidity and to increase available cash on hand in the event that a more protracted COVID-19 outbreak were to put a significant strain on the financial institutions and their ability to loan funds.

As of September 30, 2020, the Company, believing that, despite the protracted COVID-19 outbreak, the financial institution industry was experiencing less negative impact from the outbreak than originally expected, proceeded to pay down the majority of the amounts drawn under its revolving credit facilities.

Additionally, for the protection of our employees in accordance with the Centers For Disease Control and Prevention (CDC) guidelines, the Company arranged to have the majority of office personnel work remotely, has taken steps to allow and encourage greater separation for our employed and contracted field workers and has worked with its harvesters, haulers and suppliers to minimize interactions.

The Company continues to assess the situation on a routine basis.

On November 4, 2021, the Occupational Safety and Health Administration (“OSHA”) posted an Emergency Temporary Standard (“ETS”) on mandating that all private employers with 100 or more employees ensure their employees are COVID-19 fully vaccinated before entering the employer’s worksite or, at the employer’s option, require employees who remain unvaccinated and want to come to the worksite to wear an approved face covering and produce a negative COVID-19 test at least weekly.

Pursuant to the ETS, employers must offer up to four hours of additional paid time off, including travel time, per vaccine dose to allow employees to be vaccinated and reasonable time and paid sick leave to recover from side effects experienced after each vaccine dose.

Pursuant to the ETS, the ETS remains in effect for a maximum of six months.

This ETS implements President Biden’s COVID-19 Action Plan, which aims to accelerate the pace of COVID-19 vaccinations in the United States.

Pursuant to the ETS, the ETS is effective immediately upon its publication in the Federal Register.

Pursuant to the ETS, employers must comply with most requirements within 30 days of publication (December 5th) and with optional testing requirements within 60 days of publication (January 4th).

Employees who have completed their vaccination by that date do not have to be tested, even if they have not yet completed the 2-week waiting period.

On November 6, 2021, the Fifth Circuit Court of Appeals granted an emergency motion to stay enforcement of the ETS, subject to the resolution of ongoing litigation challenging the constitutionality of the ETS.

The order enjoins the federal government from taking any action to enforce the ETS while it is in effect.

On November 12, 2021, the Fifth Circuit Court of Appeals reaffirmed its suspension of the ETS and, on November 16, 2021, OSHA announced it suspended its activities related to the implementation and enforcement of the ETS pending future developments in the litigation.

It is unknown how long the Fifth Circuit’s stay will remain in place.

The Sixth Circuit Court of Appeals was selected through the lottery system on November 16, 2021, to hear a consolidated action concerning multiple challenges to the ETS and is authorized to uphold or lift the Fifth Circuit Court of Appeals order.

Also, a number of state governments have considered legislation related to employer vaccine mandates during the pandemic.

OSHA maintains that its ETS preempts these laws, but states such as the State of Florida disagree.

On November 17, 2021, the Florida legislature passed legislation, which was signed into law on November 18, 2021 and codified at section 381.00317, Florida Statutes, prohibiting private-sector employers from implementing a COVID-19 vaccination mandate for full-time, part-time, or contract employees without providing at least five individual exemptions, including, but not limited to, pregnancy or anticipated pregnancy;

religious reasons;

COVID-19 immunity;

periodic testing;

and the use of employer-provided personal protective equipment.

If an employer fails to comply with the new law and terminates an employee based on a COVID-19 vaccination mandate, then the employer will be subject to a fine of up to $50,000 per violation.

The Company plans to monitor conflicting guidance from the State of Florida and the federal government and adjust its policies in accordance with the resolution of the ongoing litigation in the federal courts.

Since the commencement of COVID-19 in March 2020, the Company took steps to allow and encourage greater separation for our employed and contracted field workers and has worked with its harvesters, haulers and suppliers to minimize interactions.

For the continued protection of our employees and in accordance with the OSHA mandate, the Company intends to comply with all requirements as outlined in the ETS that was published on November 4, 2021, to the extent consistent with applicable law.

To date, the Company has experienced no material adverse impacts from this pandemic.

Sale and Purchase of Land

On September 11, 2020, the Company sold approximately 10,700 acres on the western part of Alico Ranch to the State of Florida for $28,500,000.

A portion of these proceeds were used to purchase approximately 3,280 gross citrus acres for $16,450,000 on October 30, 2020.

The purchase of these gross citrus acres was structured to allow the Company to defer income taxes of approximately $4,000,000 from the gain on sale of the approximate 10,700 acres sold to the State of Florida.

Citrus Grove Management Agreement

On July 16, 2020, the Company executed an agreement with an affiliated group of third parties to provide citrus grove caretaking and harvest and haul management services for approximately 7,000 acres owned by such third parties.

Pursuant to this agreement, the Company is to be reimbursed by the third parties for all of its costs incurred related to providing these services and also receives a management fee based on acres covered under this agreement.

Agreements with Tropicana

On each of May 18, 2020 and May 20, 2020, the Company entered into a new agreement to supply Tropicana, its largest customer, with citrus fruit.

These new agreements are effective October 1, 2020, conclude on July 31, 2024, and succeed an existing agreement that expired at the end of September 2020.

Prepayment and Restructure of Fixed-Rate Term Loans

In April 2021, the Company made a prepayment of $10,312,500 on the Met Fixed-Rate Term Loans and, effective May 1, 2021, the Company modified its Met Fixed-Rate Term Loans, which in the aggregate, after the prepayment, had a balance of $70,000,000 to be interest only with a balloon payment to be paid at maturity, which is November 1, 2029.

As part of this modification, the interest rate on these Met Fixed-Rate Term Loans, which were bearing interest at 4.15%, has been adjusted to 3.85% and the Company no longer has the prepayment option previously allowed under the arrangement.

Sales and Purchase of Land

On December 3, 2021, the State of Florida purchased, under the Florida Forever program, approximately 1,638 acres of the Alico Ranch for approximately $5,675,000 pursuant to an option agreement entered into on September 21, 2021 between the State of Florida and the Company.

On June 3, 2021, the Company sold approximately 11,700 acres, which were encumbered by an easement, to a third-party for approximately $12,219,000.

In 2013, these acres were enrolled in the Wetlands Reserve Program (“WRP”), which calls for the restoration and maintenance of the property for the duration of the WRP easement.

As part of that enrollment in 2013, Alico received approximately $1,800 per acre.

On April 15, 2021, the State of Florida purchased, under the Florida Forever program, approximately 5,734 acres of Alico Ranch for approximately $14,445,000, pursuant to an option agreement between the State of Florida and Alico dated December 15, 2020.

This is the third sales transaction we have completed with the State of Florida within the last three years, aggregating over 22,000 acres.

Alico used most of the net sales proceeds to prepay a portion of its fixed-rate term debt.

On October 30, 2020, the Company purchased approximately 3,280 gross acres located in Hendry County for a purchase price of $18,230,000.

This acquisition allows the Company to add additional scale to its existing 46,000 gross acres of citrus properties.

Strategically, with these acquired groves neighboring existing Alico groves, Alico has continued to realize economy of scale which has allowed Alico to continue to operate as a low-cost, high producing citrus grower.

Federal Relief Program

The Company has been eligible for Hurricane Irma federal relief programs for block grants that are being administered through the State of Florida.

The Company was eligible for Hurricane Irma federal relief programs for block grants that were being administered through the State of Florida.

During the fiscal years ended September 30, 2020 and 2019, the Company received approximately $4,629,000 and $15,597,000, respectively, under the Florida Citrus Recovery Block Grant (“CRBG”) program.

This represents the Part 1 and Part 2 reimbursement under a three-part program.

The timing and amount to be received under Part 3 of the program, if any, has not been finalized.

Distribution of Shares by 734 Investors

On November 14, 2019, 734 Investors filed a Form 4 and an amendment to Schedule 13D with the SEC disclosing that on November 12, 2019, it distributed all of its shares of Company common stock previously held by it, consisting of 3,173,405 shares, on a pro rata basis, to its members.

Prior to such distribution, 734 Investors was the Company’s largest shareholder.

Employee and Board of Directors Matters

On August 6, 2020, the Board of Directors (the “Board”) of the Company increased the number of its directors by two and appointed Mr.

Adam Putnam and Ms.

Kate English as directors, each to serve until the 2021 annual meeting of the Company’s shareholders or until his or her earlier death, resignation, or removal in accordance with the Amended and Restated Bylaws of the Company.

In December 2019, Mr.

Brokaw, the then Executive Vice Chairman, informed the Board of Directors that he would voluntarily step down as Executive Vice Chairman effective December 31, 2019 and that change has taken effect.

After the effectiveness of this change, Mr.

Brokaw has remained a member of the Board of Directors.

Effective February 27, 2020 (which was immediately after the 2020 Annual Meeting of Shareholders), by way of action that has been taken by and at the direction of the Board of Directors, Benjamin D.

Fishman, the non-employee Executive Chairman, became the Chairman of the Board.

Fishman has remained a non-employee director.

These federal relief proceeds represented Part 1 and Part 2 reimbursement under the program.

In the fiscal year ended September 30, 2021, the Company received approximately $4,299,000, representing reimbursement under Part 3 of the program.

The remaining portion of the funds that are due to Alico under the Florida CRBG program relates to certain crop insurance expenses incurred by the Company, which is estimated to be approximately $2,000,000.

In October 2021, the Company received its first portion of this crop insurance expense reimbursement in an amount equal to $1,000,000 and expects to receive the remaining portion in fiscal year 2023.

The Land We Manage

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Our total return profile is a combination of operating income potential and long-term appreciation.

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.

Our land holdings and the operating activities in which we engage are categorized in the following table:

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Alico citrus groves total approximately 48,852 gross acres or 58.7% of our land holdings.

The Company also manages approximately 7,200 acres of citrus land on behalf of third-party grove owners in addition to the 45,507 gross acres owned by Alico.

The Company manages approximately 7,400 acres of citrus land on behalf of third-party grove owners in addition to the 48,852 gross acres owned by Alico.

Our citrus acreage is further detailed in the following table:

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Hardee County

Of the 45,507 gross acres of citrus land we own and manage, approximately 12,507 acres are classified as support and other acreage.

Of the 48,852 gross acres of citrus land we own and manage 13,599 acres are classified as support and other acreage.

Support and other acreage include acres used for roads, barns, water detention, water retention and drainage ditches integral to the cultivation of citrus trees, but which are not capable of directly producing fruit.

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The 35,253 remaining acres are classified as net plantable acres.

Net plantable acres are those that are capable of directly producing fruit.

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.

In an effort to replace trees lost in Hurricane Irma and increase the density of our citrus groves, Alico has planted more than 1.3 million new trees over the past four years.

In an effort to replace trees lost in Hurricane Irma and increase the density of our citrus groves, Alico has planted approximately 1,500,000 new trees over the past four years.

This level of planting has been substantially higher than the normal level of tree attrition.

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Our sales to the processed market were approximately 82.7%, 91.0%, and 95.0% of Alico Citrus revenues for the fiscal years ended September 30, 2021, 2020 and 2019, respectively.

We produce Early and Mid-Season varieties, primarily Hamlin oranges, as well as a Valencia variety for the processed market.

We deliver our fruit to the processors in boxes which each contains approximately 90 pounds of oranges.

Because the processors convert the majority of the citrus crop into orange juice, they generally do not buy their citrus on a per box basis, but rather on a pound solids basis, which is the measure of the soluble solids (sugars and acids) contained in one box of citrus fruit.

We produced approximately 43,578,000, 46,727,000, and 26,513,000 pound solids for the fiscal years ended September 30, 2020, 2019 and 2018, respectively, from boxes delivered to processing plants of approximately 7,311,000, 7,904,000, and 4,702,000, respectively.

As previously indicated, the falloff in fiscal year 2018 was mostly attributable to the impact of Hurricane Irma.

The overall decrease in sales to processed markets as a percentage of citrus revenues was due to an agreement entered into on July 16, 2020 with an affiliated group of third parties to provide citrus grove caretaking and harvest and haul management services (“Grove Management Services”) for approximately 7,000 acres owned by such third parties.

Under the terms of this agreement, the Company is reimbursed by the third parties for all its costs incurred related to providing these Grove Management Services and receives a management fee based on acres covered under this agreement.

The Company records both an increase in revenues and expenses as and when the Company provides these Grove Management Services.

For the fiscal year ended September 30, 2021, under this agreement, the Company recorded approximately $15,752,000 of operating revenue relating to these Grove Management Services, including the management fee.

Excluding these revenues for these citrus grove caretaking and harvest and haul management services, revenue to processed markets represents approximately 97.1% of total citrus revenues.

The average pound solids per box was 5.66, 5.96, and 5.91, for the fiscal years ended September 30, 2021, 2020 and 2019, respectively.

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Under this agreement, if the market price was below the floor prices or exceeded the ceiling prices, then 50% of the shortfall or excess was deducted from the floor price or added to the ceiling price.

Under our next largest agreement, our citrus produced is subject to a minimum floor price and maximum ceiling price and is a based on a cost-plus structure.

Under our next largest agreement, our citrus produced is subject to a minimum floor price and maximum ceiling price and is based on a cost-plus structure.

On each of May 18, 2020 and May 20, 2020, the Company entered into two new agreements to supply Tropicana, its largest customer, with citrus fruit.

These new agreements are effective October 1, 2020, conclude on July 31, 2024, and succeeded our existing largest agreement with this customer which expired at the end of September 2020.

These new agreements were effective October 1, 2020, expire on July 31, 2024, and succeeded our existing largest agreement with this customer which expired at the end of September 2020.

Although we believe other markets and customers are available for our citrus products, we also believe that new arrangements in these other markets or with other customers may be less favorable than our current contracts.

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Under the terms of the agreement, the Company is reimbursed by the third parties for all of its costs incurred related to providing these services and also is to receive a management fee based on acres covered under this agreement.

In August 2021, the third party purchased approximately 900 acres, which will be in addition to the acres currently receiving Grove Management Services.

The Company, prior to this agreement, was already providing Grove Management Services to several small third-party grove owners on acres within the Company’s groves and continues to provide such services.

Revenues generated from our Grove Management Services were approximately 5.1%, 1.1% and 2.3% of our total operating revenues for the fiscal years ended September 30, 2020, 2019 and 2018, respectively.

Revenues generated from our Grove Management Services were approximately 16.1%, 5.1%, and 1.1% of our total citrus revenues for the fiscal years ended September 30, 2021, 2020 and 2019, respectively.

On October 30, 2020, the Company purchased approximately 3,280 gross acres located in Hendry County for a purchase price of $18,230,000.

This acquisition allows the Company to add additional scale to its existing 46,000 gross acres of citrus properties.

Strategically, with these acquired groves neighboring existing Alico groves, Alico believes that this acquisition will help Alico with its operation designed to be a low-cost, high producing citrus grower.

Revenues from our Alico Citrus operations were approximately 97.5 %, 96.6%, and 97.4% of our total operating revenues for the fiscal years ended September 30, 20 21 , 20 20 and 201 9 , respectively.

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Collier County

On June 3, 2021, the Company sold approximately 11,700 acres, which were encumbered by an easement, to a third-party for approximately $12,219,000.

In 2013, these acres were enrolled in the Wetlands Reserve Program (“WRP”), which calls for the restoration and maintenance of the property for the duration of the WRP easement.

As part of that enrollment in 2013, Alico received approximately $1,800 per acre.

This is the third sales transaction we have completed with the State of Florida within the last three years, aggregating over 22,000 acres, including the September 2020 sale described below.

Alico used most of the net sales proceeds to prepay a portion of its fixed-rate term debt.

On September 10, 2020, the Company sold approximately 10,700 acres on the western part of Alico Ranch to the State of Florida.

Because the acres involved in the sale would have been critical to our planned dispersed water storage project, the Company has decided to no longer pursue permit approval activities for this project.

As a result of this decision to no longer pursue permit approval activities for this project, the Company has renamed this segment Land Management and Other Operations to better reflect the components of this segment.

The Company did not generate any revenue from the dispersed water storage project and incurred expenses of $1,346,000, $1,206,000 and $1,619,000 for the fiscal years ended September 30, 2020, 2019 and 2018, respectively.

In January 2018, the Company sold its breeding herd and leased grazing rights on the Ranch to a third - party operator.

The Company continues to own the property and conduct its long-term dispersed water program and wildlife management programs.

As part of the sales transaction, the Company expensed all cattle inventory costs that were accumulated at the date of sale.

The Company did not ever get to the point where it was generating any revenue from the dispersed water storage project and incurred expenses of $0, $1,346,000, and $1,206,000 for the fiscal years ended September 30, 2021, 2020 and 2019, respectively.

On March 27, 2020, the Company sold certain sections at the East Ranch for approximately $2,980,000 and realized a gain of approximately $2,748,000.

The Company subsequently used substantially all of the net cash proceeds to purchase a like-kind asset in May 2020, which has allowed the Company to defer substantially all of the tax impact of the gain on sale of this ranch land.

Revenues from Land Management and Other Operations were approximately 2.5%, 3.4%, and 2.6% of total operating revenues for the fiscal years ended September 30, 2021, 2020 and 2019, respectively.

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 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 shareholders, customers, clients and partners.

Our strategy is based on best management practices of our agricultural operations and the environmental and conservation stewardship of our land and natural resources.

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No other single customer provided more than 10% of our consolidated revenue in fiscal years 2021, 2020 or 2019.

The overall decrease in Tropicana revenue as a percentage of sales was expected, attributable to an increase in overall sales generated from an agreement entered into in July 2020 with an affiliated group of third parties to provide citrus grove caretaking and harvest and haul management services for approximately 7,000 acres owned by such third parties.

Under the terms of this 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.

The Company records both an increase in sales revenue and an increase in expenses as and when the Company provides these citrus grove caretaking management services.

Revenue from Tropicana represents approximately 90.1% of total revenues for the fiscal year ended September 30, 2021.

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.

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Competition is impacted by several factors including quality, production, demand, brand recognition, market prices, weather, disease, export/import restrictions and foreign currency exchange rates.

Environmental, Social and Governance (“ESG”)

Alico is an agricultural company which, based upon its rich heritage and traditions, seeks not only to maximize value for its customers and stockholders, but also to enhance its legacy by employing sustainable practices in all aspects of operations including stewardship of both its natural and human resources.

The Company recognizes the increased emphasis by stockholders, business partners and other key constituents in recent years on ESG programs that are embedded into day-to-day business policies and practices.

The Company is proud of its commitment to doing the right thing for communities, the environment, and its employees.

Governmental Regulations

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Compliance with these laws, rules and regulation has not had, and is not expected to have, a material effect on our capital expenditures, results of operations and competitive position as compared to prior periods.

Human Capital

Human Capital Management

Purpose and Company Values

Supporting our people is a fundamental value for Alico.

We believe the Company’s success depends on its ability to attract, develop and retain key personnel.

The skills, experience and industry knowledge of our employees and the employees of our independent contractors, particularly our key employees, significantly benefit our operations and performance.

The skills, experience and industry knowledge of our employees and the employees of our independent contractors significantly benefit our operations and performance.

The Company's management oversees various employee initiatives and also monitors the effectiveness of the personnel provided by independent contractors with which we contract for certain harvesting and hauling services.

We believe in a culture of equity, diversity and inclusion.

We are also committed to advancing safe and respectful work environments where our employees are invited to bring their talents, backgrounds and expertise to bear on the success of our business and where every person has the opportunity to thrive personally and professionally.

Hiring, Development and Retention

Employee levels are managed to align with the pace of business and takes into account the services that are performed for us by our independent contractors.

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.

Management believes that through its own employees, coupled with the human capital supplied by its independent contractors, it has sufficient human capital to operate its business successfully.

Management believes that the Company's employee relations are favorable, that its relations with its independent contractors is favorable, and that the relations that the independent contractors and the Company have with the employees of the independent contractors is favorable.

Employee Safety and Well-Being

Health and safety in the workplace for our employees and personnel provided by independent contractors with which we contract is one of the Company’s core values.

Hazards in the workplace are actively identified and management tracks incidents so remedial actions can be taken to improve workplace safety.

In order to support and enhance health and safety practices, the Company routinely conducts safety training with employees to emphasize safety when conducting grove caretaking, general employee health, proper equipment operating techniques, office ergonomics and other important safety topics.

The COVID-19 pandemic has underscored for us the importance of keeping our employees and the personnel provided by independent contractors safe and healthy.

In response to the pandemic, the Company has taken actions aligned with the Centers for Disease Control and Prevention to protect its workforce so that its workforce can more safely and effectively perform their work.

Employee levels are managed to align with the pace of business and takes into account the services that are performed for us by our independent contractors.

Management believes that through its own employees, coupled with the human capital supplied by its independent contractors, it has sufficient human capital to operate its business successfully.

Management believes that the Company's employee relations are favorable, that its relations with its independent contractors is favorable and that the relations that the independent contractors and the Company has with the employees of the independent contractors is favorable.

We believe in a culture of equity, diversity and inclusion.

Inclusion and Diversity

People are critical to our efforts to drive growth and deliver value for stockholders.

One of the ways we have put people at the center is by continuing to work toward a more inclusive and diverse workplace where each person feels respected, valued and seen and can be the best version of themselves – from women and ethnic employees to veterans, among others.

With employees, management and directors representing the diversity around the world, the Company can access stronger insights into different cultures and backgrounds, which ultimately helps the Company to better operate the business.

As of September 30, 2021, ethnically diverse employees represent 69% of the Company’s Citrus operations, 27% of Corporate, General, Administrative and Other.

Women made up 50% of the Company’s Corporate, General, Administrative and Other and 16% of the Company’s Citrus operations.

On August 6, 2020, the Board of Directors of the Company increased the size of the Board to nine and appointed Ms.

Katherine English as a director to serve on (i) the Compensation Committee and (ii) the Nominating and Governance Committee.

English’s appointment is part of the Company’s commitment to promote diversity and inclusion.

Based on our Inclusion and Diversity strategy, the Company promotes a greater sense of inclusion through a variety of initiatives, which includes a Company-wide women’s group to promote mentoring, career advancement, training, comradery, and empowerment.

Compensation and Benefits

Our compensation and benefits are designed to support the financial, mental, and physical well-being of our employees.

We are committed to equal pay for equal work, regardless of gender, race, ethnicity, or other personal characteristics.

We believe our base wages and salaries, which we review annually, are fair and competitive with the external labor markets in which our employees work.

We also regularly review our compensation practices to promote fair and equitable pay.

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, 2021, we had 222 full-time employees.

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We believe that our relations with our employees are good.

Workforce Housing

We own and maintain 37 residential housing units located in various counties in Florida that we lease to employees and former employees.

Our residential units provide affordable housing to many of our employees, including our agribusiness employees.

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.

Capital Resources and Raw Materials

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Raw materials needed to cultivate the various crops grown by the Company consist primarily of fertilizers, herbicides, insecticides and fuel and are readily available from local suppliers.

Societal Well-Being

The Company remains committed to a healthy and equitable society to ensure our collective well-being for future generations.

In the past year, we provided cash grants and supporting donations to support our communities and promote health and safety, education, and justice.

Available Information

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Risks Related to our Business

The COVID-19 pandemic has caused significant economic instability and uncertainty and may have an adverse effect on our business, results of operations and financial condition.

The COVID-19 pandemic has caused economic instability and uncertainty globally and may have a material adverse impact, on our business.

The currently evolving situation related to the COVID-19 pandemic could adversely affect the Company’s business, financial condition, results of operations and cash flows.

The ongoing COVID-19 pandemic, including the emergence of variants for which vaccines may not be effective, may negatively affect our business by causing or contributing to, among other things:

Potential negative impacts of the pandemic include, but are not limited to, the following:

Reduction in customer demand for citrus products and decreased consumer spending levels, which could materially and adversely affect our results of operations;

Potential disruption of services on which we rely to deliver our harvested citrus to producers and fulfilling deliveries to production plants, any of which could materially and adversely affect our business or reputation;

Potential disruption of services and deliveries of equipment and supplies on which we rely to produce and deliver our harvested citrus to producers and fulfilling deliveries to production plants, any of which could materially and adversely affect our business or reputation;

We may be unable to obtain financing in the current economic environment on terms that are favorable or acceptable to us, or at all, which could impair our cash flows and restrict our ability to execute on our strategic initiatives and react to changes in our business or the environment;

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Our ability to maintain our workforce during these uncertain times, which could materially and adversely affect our results of operations;

Increase in employee absenteeism due to fear of infection, which could materially and adversely affect our results of operations;

Increase in employee absenteeism of employees of the Company and of our independent contractor service providers (such as contracted field workers) due to fear of infection, which could materially and adversely affect our results of operations;

Increase in possible lawsuits or regulatory actions due to COVID-19 spread in the workplace which could materially and adversely affect our results of operations;

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Adverse impact on the productivity of management and our employees that are working remotely, including an impact on our ability to maintain our financial reporting processes and related controls and our ability to manage complex accounting issues presented by the COVID-19 pandemic which could materially and adversely affect our business and reputation.

Our business operations could be affected by government mandates, including the Emergency Temporary Standard (“ETS”) posted by the Occupational Safety and Health Administration (“OSHA”) on November 4, 2021.

The ETS requires employers such as the Company to offer up to four hours of additional paid time off, including travel time, per vaccine dose to allow employees to be vaccinated and reasonable time and paid sick leave to recover from side effects experienced after each vaccine dose.

As noted above, the Fifth Circuit Court of Appeals granted an emergency motion to stay the enforcement of the ETS, subject to the resolution of ongoing litigation challenging the constitutionality of the ETS, and, shortly thereafter, OSHA announced it suspended its activities related to the implementation and enforcement of the ETS pending future developments in the litigation.

Also, Florida, and other states have passed laws that may conflict with the ETS.

For instance, section 381.00317, Florida Statutes, (i) prohibits private-sector employers from implementing a COVID-19 vaccination mandate without providing certain exemptions and (ii) fines employers who improperly discharge employees up to $50,000 per violation.

As a company with more than 100 employees, the vaccination and testing requirements will likely be applicable to us and our workforce, and we will be forced to navigate between any conflicts between state and federal law.

These requirements could result in increased costs and legal fees.

Additionally, our efforts to comply with these mandates, including requiring that some or all of our employees be fully vaccinated against COVID-19, could result in increased labor attrition and disruption, as well as difficulty securing future labor needs.

Similarly, the efforts of our independent contractor service providers to comply with these mandates, including requiring that some or all of their employees be fully vaccinated against COVID-19, could result in them experiencing increased labor attrition and disruption, as well as difficulty securing future labor needs.

If we or our independent contractor service providers were to lose employees (such as contracted field workers in the case of our independent contractor service providers) and not be able to replace them, it could adversely affect our business operations.

The legality and effects of the ETS and any future mandates by state and federal governmental authorities related to COVID-19 are currently uncertain, and we cannot predict the extent to which it could adversely affect our results of operations, financial condition or prospects.

Our business operations could be significantly harmed by natural disasters or global epidemics.

Our business could be adversely affected by natural disasters such as epidemics, outbreaks or other health crisis.

Our business could be adversely affected by natural disasters such as pandemics, epidemics, outbreaks or other health crisis.

An outbreak of avian flu or H1N1 flu in the human population, or another similar health crisis, such as the current COVID-19 pandemic referred to above, could adversely affect economies and financial markets, particularly those in the United States.

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Our revenues from our citrus business were approximately 97.5%, 96.6%, and 97.4% of our operating revenues in fiscal years 2021, 2020 and 2019, 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 more vulnerable to adverse events or market conditions affecting our citrus business which could have a significant impact on our overall results of operations, financial condition and cash flows.

Our citrus division is one of the largest citrus producers in the United States and because of the significance of the revenues derived from this business, we are more vulnerable to adverse events or market conditions affecting our citrus business, in particular, or the citrus business, generally, which could have a significant adversely impact on our overall results of operations, financial condition and cash flows.

Our 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.

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If we are unable to effectively perform grove management services for both our own groves and the groves owned by third parties at the level and/or the cost that we expect, or if we were to fail to allocate sufficient resources to meet the grove management of our own groves and the groves owned by these third parties, it could adversely affect our performance and reputation.

Increases in the number of acres and groves we are managing have required us to hire a greater number of additional qualified personnel.

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.

Our ability to perform the grove management services will be affected by various factors, including, among other things, our ability to maintain sufficient personnel and retain key personnel, the ability of the independent contractors whom we engage to assist in providing these services to maintain sufficient personnel and retain key personnel, and the number of acres and groves that we will manage.

Increases in the number of acres and groves we are managing have required us to hire a greater number of additional qualified personnel and have required the independent contractors whom we engage to assist in providing these services to maintain a greater number of additional qualified personnel to provide those services.

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.

Our business is highly competitive and we cannot assure you that we will maintain our current market share.

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There 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.

We depend on our relationship with Tropicana for a significant portion of our business.

Any disruption in this relationship could harm our sales.

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.

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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.

Additionally, the affiliated group of third parties for whom the Company provides grove caretaking and harvest and haul management services sells a significant portion of its crop to Tropicana.

If there was a change in that group’s relationship with Tropicana, whereby Tropicana did not buy their oranges, then that group would need to find replacement buyers of its citrus, and, if that group was unable to find replacement buyers, then the group might be challenged in satisfying its obligations to the Company, which might have a material adverse impact on our financial position, results of operations 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.

With the sale of a majority ownership of Tropicana by PepsiCo to a French private equity firm (the “Firm”), there is some heightened risk and uncertainty in our current relationship with Tropicana, which potentially could result in a significant reduction in revenues and cash flows if that relationship were to be changed as a result.

The Company currently has citrus supply contracts with Tropicana that expire in both 2023 and 2024, with the majority expiring in 2024.

If the Firm caused Tropicana to reduce the volume of oranges purchased from us and/or purchased from owners of groves that we manage, we would need to find, and/or the owners of groves that we manage would need to find or work with us to find, replacement buyers to purchase any remaining crop of our and/or of the owners of the groves we manage, which could take time and expense and may result in less favorable terms of sale.

The loss of Tropicana as a customer or significant reduction in business with Tropicana for us and/or for the owners of the groves we manage may cause a material adverse impact to our financial position, results of operations and cash flows.

Our agricultural products are subject to supply and demand pricing which is not predictable.

Agricultural operations traditionally provide almost all of our operating revenues with citrus being the largest portion and are subject to supply and demand pricing.

Prior to this current fiscal year, according to Nielsen data, consumer demand for orange juice had decreased significantly to its lowest level in almost a decade;

Prior to the COVID-19 pandemic, according to Nielsen data, consumer demand for orange juice had decreased significantly to its lowest level in almost a decade;

however, we have been able to offset the impact of such decline with higher prices based on a lower supply of available oranges.

Although the demand for orange juice has increased in this latest year, it is uncertain as to whether such increased demand can be maintained, whether we will see a return to a decline in the future and whether, if there were to be such a decline, the impact could be again offset by higher prices.

Although the demand for orange juice has increased during the COVID-19 pandemic, it is uncertain as to whether such increased demand can be maintained, whether we will see a return to a decline in the future and whether, if there were to be such a decline, the impact could be again offset by higher prices.

In particular, 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.

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For example, in November of 2014, we sold significant sugarcane assets and we are no longer involved in the sugarcane business and, in January of 2018, we sold our breeding herd and no longer engage in cattle operations.

Most recently, we sold certain ranch acres to the State of Florida because these acres would have been critically important for carrying out the Company’s planned dispersed water storage project, the Company is no longer are pursuing permit approval relating to this dispersed water storage project.

While such dispositions increase the amount of cash available to us, it could also result in a potential loss of significant operating revenues and income streams that we might not be able to replace, makes our business less diversified and could ultimately have a negative impact on our results of operations, financial condition and cash flows.

Most recently, we sold certain ranch acres to the State of Florida and because these acres would have been critically important for carrying out the Company’s planned dispersed water storage project, the Company is no longer pursuing permit approval relating to this dispersed water storage project.

While such dispositions increase the amount of cash available to us, it could also (i) result in a potential loss of significant operating revenues and income streams that we might not be able to replace, (ii) make our business less diversified and (iii) could ultimately have a negative impact on our results of operations, financial condition and cash flows.

Harm to the Company’s reputation could have an adverse effect on the business, financial condition and results of operations.

Maintaining a strong reputation with fruit processors and third-party partners is critical to the success of the Company’s business.

The Company devotes significant time and resources to training programs, relating to, among other things, ethics, compliance and product safety and quality, as well as sustainability goals, and has published ESG goals (i.e., environmental, sustainability and governance), including relating to environmental impact and sustainability and inclusion and diversity, as part of its ESG Strategy.

Despite these efforts, the Company may not be successful in achieving its goals, might provide materially inaccurate information, or might receive negative publicity about the Company, including relating to product safety, quality, efficacy, ESG or similar issues, whether real or perceived, and reputational damage could occur.

In addition, the Company’s products could face withdrawal, recall or other quality issues, which could lead to decreased demand for the Company’s products or services and reputational damage.

Widespread use of social media and networking sites by consumers has greatly increased the accessibility and speed of dissemination of information.

Negative publicity, posts or comments about the Company, whether accurate or inaccurate, or disclosure of non-public sensitive information about the Company, could be widely disseminated through the use of social media or in other formats.

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.

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Historically, the second and third quarters of our fiscal year generally produce the majority of our annual revenues, and our working capital requirements are typically greater in the first and fourth quarters of our fiscal year coinciding with our planting cycles.

Because of the seasonality of our business, results for any quarter are not necessarily indicative of the results that may be achieved for the full fiscal year or in

future quarters.

Because of the seasonality of our business, results for any quarter are not necessarily indicative of the results that may be achieved for the full fiscal year or in future quarters.

If our operating revenues in the second and third quarters are lower than expected, it would have a disproportionately large adverse impact on our annual operating results.

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In the event that such climate change has a negative effect on the productivity of our citrus groves, it could have an adverse impact on our business and results of operations.

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.

In the event that such regulation is enacted, we may experience significant increases in our costs of operations.

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.

In the event that such regulation is enacted, we may experience significant increases in our costs of operations, including but not limited to increased energy, environmental, and other costs and capital expenditures.

In particular, increasing regulation of fuel emissions could substantially increase the distribution and supply chain costs associated with our products.

As a result, climate change could negatively affect our business and operations.

As a result, climate change could negatively affect our financial condition and results of operations.

ESG issues, including those related to climate change and sustainability, may have an adverse effect on our business, financial condition , results of operations , and cash flows and damage our reputation.

Companies across all industries are facing increasing scrutiny relating to their ESG policies.

Increased focus and activism related to ESG may hinder the Company’s access to capital, as investors may reconsider their capital investment as a result of their assessment of the Company’s ESG practices.

In particular, customers, investors and other stakeholders are increasingly focusing on environmental issues, including climate change, water use, deforestation, plastic waste, and other sustainability concerns.

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.

Responding to and complying with these preferences, concerns and demands could cause us to incur additional costs or to make changes to our operations that could negatively affect our business, financial condition and results of operations.

If the Company does not adapt to or comply with new regulations or fails to meet its ESG goals or meet the evolving investor, industry or stakeholder expectations and standards, or if the Company is perceived to have not responded appropriately to the growing concern for ESG issues, fruit processors and consumers may choose to stop purchasing our products or purchase products from another company or a competitor, and the Company’s reputation, business, financial condition, results of operations and cash flows may be adversely affected.

Increases in labor, personnel and benefits costs could adversely affect our operating results.

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Changes in the classification or valuation methods employed by county property appraisers could cause significant changes in our real estate property tax liabilities.

In the fiscal years ended September 30, 2020, 2019 and 2018 we paid approximately $2,714,000, $2,755,000, and $3,089,000 in real estate taxes, respectively.

For the fiscal years ended September 30, 2021, 2020 and 2019, we paid approximately $2,570,000, $2,714,000, and $2,755,000 in real estate taxes, 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 approximately $82,790,000, $87,976,000, and $91,312,000 for the fiscal years ended September 30, 2021, 2020 and 2019, respectively, which differs significantly from the fair values determined by the county property appraisers of approximately $467,948,000, $463,799,000, and $514,330,000, respectively.

Changes in state law or county policy regarding the granting of agricultural classification or calculation of "Green Belt" values or average millage rates could significantly impact our results of operations, cash flows and/or financial position.

Changes in state law or county policy regarding the granting of agricultural classification or calculation of "Green Belt" values or average millage rates could significantly and adversely impact our results of operations, cash flows and/or financial position.

Liability for the use of fertilizers, pesticides, herbicides and other potentially hazardous substances could increase our costs.

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Our success will be dependent on our ability to continue to attract, employ and retain skilled personnel in our business lines and segments.

If our internal controls are ineffective, our operating results could be adversely affected.

Our internal controls over financial reporting may not prevent or detect misstatements because of its inherent limitations, including the possibility of human error, the circumvention or overriding of controls or fraud.

Even effective internal controls can provide only reasonable assurance with respect to the preparation and fair presentation of financial statements.

If we fail to maintain the adequacy of our internal controls, including any failure to implement required new or improved controls, or if we experience difficulties in their implementation, our business and operating results could be harmed, and we could fail to meet our financial reporting obligations.

Inflation can have a significant adverse effect on our operations.

Inflation can have a major impact on our citrus operations.

The citrus operations are most affected by escalating costs and unpredictable revenues and very high irrigation water costs.

Inflation can have a major adverse impact on our citrus operations and there has been significant recent inflationary developments in the United States.

It is uncertain as to whether these recent inflationary pressures will continue, will increase or will be brought under control.

Our citrus operations are most affected by escalating costs and unpredictable revenues and high irrigation water costs.

High fixed water costs related to our citrus lands will continue to adversely affect earnings.

Prices received for many of our products are dependent upon prevailing market conditions and commodity prices.

Therefore, it is difficult for us to accurately predict revenue, just as we cannot pass on cost increases caused by general inflation, except to the extent reflected in market conditions and commodity prices.

Therefore, in addition to making it difficult to accurately predict revenue, we are unable to pass on cost increases caused by general inflation, except to the extent reflected in market conditions and commodity prices.

As a result, if market conditions and commodity prices do not enable us to pass along such costs increases, these recent and future inflationary pressures would likely negatively affect our results of operations, cash flows and/or financial position.

We incur increased costs as a result of being a publicly traded company.

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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.

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.

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.

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.

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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.

As of September 30, 2020, we had approximately $151,000,000 in principal amount of indebtedness outstanding under our secured credit facilities and line of credit and an additional availability of approximately $91,659,000 is available under our revolving lines of credit.

As of September 30, 2021, we had approximately $126,294,000 in principal amount of indebtedness outstanding under our secured credit facilities and an additional availability of approximately $94,664,000 is available under our working capital and revolving lines of credit.

Our loan agreements, as well as other debt instruments we may enter into in the future, may have negative consequences to us and could limit our business because we will use a substantial portion of our cash flows from operations to pay debt service costs which will reduce the funds available to us for corporate and general expenses and it may make us more vulnerable to economic downturns and adverse developments in our business.

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Risks Related to our Common Stock

Our common stock has low trading volume and the distribution of all of the shares of our common stock owned by 734 Investors to its members has the effect of increasing the Company’s public float and such increase may have a material adverse effect on the market price of our common stock.

Although our common stock trades on the Nasdaq Global Select Market, it is thinly traded and our average daily trading volume is low compared to the number of shares of common stock we have outstanding.

The low trading volume of our common stock can cause our stock price to fluctuate significantly as well as make it difficult for a shareholder to sell their common shares quickly.

As a result of our stock being thinly traded and/or our low stock price, institutional investors might not be interested in owning our common stock, which in turn could have a material adverse effect on our ability to obtain future funding, if needed, as well as create a potential market overhang.

On November 12, 2019, 734 Investors effected a distribution of all of the shares of our common stock owned by 734 Investors to its members.

The distribution of Alico shares of common stock by 734 Investors to its members has the effect of increasing the Company’s public float and such increase, although it may increase the trading volume and thus reduce some of the trading volume risk described above, may at the same time over the short term have a material adverse effect on the market price of the common stock if too many members of 734 Investors seek to liquidate their shares over a short period.

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.

We have historically paid regular quarterly dividends to the holders of our common stock and in June 2021 announced an increase in our quarterly dividend to $0.50 per common share, from $0.18 per common share.

Our ability to pay cash dividends depends on, among other things, our cash flows from operations, our cash requirements, our financial condition, the degree to which we are/or become leveraged, contractual restrictions binding on us, provisions of applicable law and other factors that our Board of Directors may deem relevant.

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There can be no assurance that we will resume the repurchase of shares of our common stock.

In fiscal year 2017, our Board of Directors authorized the repurchase of up to $7,000,000 of the Company’s common stock in two separate authorizations.

In March 2017, our Board of Directors authorized the repurchase of up to $5,000,000 of the Company’s common stock beginning March 9, 2017 and continued through March 9, 2019.

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While we have no plans to conduct another tender offer at this time, we may conduct another tender offer or engage in the repurchase of our shares in the future.

Shareholders could be adversely affected by a reduction in our “public float,” that is, the number of shares owned by outside shareholders and available for trading in the securities markets, if the Company makes future tender offers or private or open market repurchases of its shares.

Stockholders could be adversely affected by a reduction in our “public float,” that is, the number of shares owned by outside stockholders and available for trading in the securities markets, if the Company makes future tender offers or private or open market repurchases of its shares.

Although the Company is not currently pursuing a tender offer or repurchase program, there are no assurances that our Board of Directors will not authorize the Company to do so in the future.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business