AVALON HOLDINGS CORP Annual Report - How They Did This Year

Thinking about AVALON HOLDINGS CORP? Let's explore what they did this past year. This report covers the fiscal year ending December 31, 2025. It will help you understand the company better.

1. What does this company do and how did they perform this year? Avalon Holdings Corp. (AWX) runs two main businesses:

   • Waste Management Services: This business helps industrial and commercial clients manage their waste. They help companies handle and get rid of hazardous and non-hazardous industrial waste. They also run special landfills for clients. Plus, they operate salt water injection wells for oil and gas wastewater.
   • Golf and Related Operations: This broader business covers leisure, hospitality, and wellness. It includes four golf courses and country clubs (Avalon Lakes, Avalon Squaw Creek, Avalon at Buhl Park, and Avalon at Sharon). They also run The Grand Resort in Howland, Ohio, athletic centers, a medical spa (Avalon Med Spa), and a dermatology center (Avalon Dermatology, LLC). The company started in 1998. It spun off from American Waste Services.

   In both 2025 and 2024, their income split was consistent. About 55% came from waste management. The other 45% came from golf and related operations. This shows a balanced business. Their golf, hospitality, and wellness side provides a stable, significant part of their income.

2. Financial performance - income, profit, growth metrics The income split was steady in 2025 and 2024. 55% came from waste management. 45% came from golf operations. This shows a stable contribution from each business.

   Investors should note customer concentration: In 2025, one customer brought in 10% of Avalon's total income. This customer also provided 18% of their waste management income. This is a big change from 2024, when no single customer provided over 10% of total income. Relying on one customer is risky. Losing them, or a big drop in their business, could hurt Avalon's finances. It would especially impact waste management income.

   Avalon is a "Smaller reporting company." This means its public shares are worth less than $250 million, or it has less than $100 million in yearly income and no public shares. Publicly traded Class A Common Stock not held by insiders was worth about $8.0 million on March 9, 2026. This small amount of public shares can mean less trading. It could also lead to bigger swings in stock price.

3. Major wins and challenges this year Wins:

   • New Business and Diversification: In March 2024, Avalon launched Avalon Dermatology, LLC. This expanded their medical services. This new business adds to their Avalon Med Spa. It helps them grow their golf operations into healthcare and wellness. This could bring in more customers and higher profits. It also reduces reliance on traditional leisure.

   Challenges:

   • Regulatory Impact and Operations Halt: Two salt water injection wells, run by AWMS Rt. 169, LLC, are now suspended. The Chief of Oil and Gas Resources Management ordered this suspension. This directly hurts their waste management business. They immediately lost income from these wells. They may also face costs for compliance, legal issues, or cleanup. How long this lasts, and its financial impact, are big concerns.
   • Increased Customer Risk: One big customer now provides 10% of total company income. This is 18% of waste management income in 2025. This is up from 2024, when no customer exceeded 10%. This creates a higher risk. Any problems with this customer, or if they leave, could severely hurt Avalon's finances. This would especially impact their biggest business.
   • Membership Challenges: Their golf and country clubs struggle to keep and attract members. This is key for a business that makes up 45% of the company's income. They are trying new marketing. But a long-term drop in members would hurt their steady income. It would also impact overall finances. They need good plans to boost member value and get new members.

4. Financial health - cash, debt, liquidity Avalon is a "Smaller reporting company." Its public Class A stock is worth only about $8.0 million. This suggests a smaller company. Smaller companies can struggle more to get funding and might find it harder to handle unexpected financial problems.

5. Key risks that could hurt the stock price

   • Regulatory Impact and Compliance: A direct risk is the suspension of two salt water injection wells. This happened due to a regulatory decision. This shows the company faces environmental and operational rules. This is especially true in waste management. Future rules, law changes, or stricter enforcement could hurt operations. This might mean fines or costly compliance. These would directly affect profits and stock price.
   • Customer Dependence: Relying heavily on one customer creates a big risk. This customer provides 10% of total income and 18% of waste management income. Any problem with this customer could hurt Avalon's income. This includes financial trouble, changing waste needs, or switching providers. It would especially impact their biggest business.
   • Membership Decline and Competition: If Avalon can't keep or attract golf and country club members, it hurts 45% of its business. The leisure industry is very competitive. A long-term drop in members means less steady income. It also means less use of facilities and lower profits for this business.
   • Economic Sensitivity: Both waste management and leisure businesses are sensitive to bad economies. Industrial waste often drops when the economy slows. People also spend less on golf, resorts, and spas. This risks both income sources.
   • Limited Trading and Price Swings: As a "Smaller reporting company," its public shares are only $8.0 million. This can mean less trading and bigger price swings. The stock is less liquid for investors. It's more open to large price changes from small trades.

6. Competitive positioning Avalon's golf and country clubs face strong competition. Many public courses and clubs operate nearby. Other leisure options also compete. Avalon stands out by offering many amenities across its sites. This includes special access to The Grand Resort. It offers a luxury hotel, dining, and spa. This combined approach aims to give members and guests unique value. They use various marketing, like local TV ads and promotions. This helps them attract and keep customers in a tough market. Their recent move into medical spa and dermatology services aims to diversify. It could also capture a different, possibly higher-profit, part of the wellness market.

7. Leadership or strategy changes Avalon keeps expanding its golf operations. They add new services, like Avalon Dermatology, LLC, launched in March 2024. This shows a clear plan to diversify into healthcare and wellness. They use their current hospitality setup to do this. The company also uses private offerings for some subsidiaries. These go to accredited investors. Examples include AWMS Holdings, LLC (for salt water wells) and Avalon Med Spa, LLC. This helps Avalon raise money for new projects and upgrades. It avoids the many rules and costs of public offerings. This gives them flexible funding for their plans.

8. Future outlook Avalon Dermatology's launch in March 2024 suggests a push into medical and wellness. This aims to diversify income and could capture higher-profit business. However, golf club membership issues and suspended wells are big challenges. Management will need to focus on these areas and develop plans to improve performance. Investors should watch how the company handles these risks and drives growth. Avalon's future depends on solving regulatory issues, managing customer risk, and attracting and keeping members in their leisure businesses.

9. Market trends or regulatory changes affecting them A major regulatory change hit Avalon this year. The Chief of Oil and Gas Resources Management suspended two salt water injection wells. This shows how much environmental and operational rules affect Avalon's waste management. Beyond this, environmental checks are growing. Rules for industrial waste, especially oil and gas byproducts, are changing. This creates ongoing market and regulatory risk. For golf and hospitality, market trends include changing leisure tastes. Competition from other entertainment is rising. Demand for wellness and medical spa services is also growing. Avalon is trying to use its new dermatology business to benefit from this.

This overview should help you weigh the opportunities and risks with Avalon Holdings Corp.