AVD American Vanguard Corporation

Substantially Reduced Operating Expenses

Materially Decreased Net Working Capital Consumption

Industry In the Early Innings of a Recovery

American Vanguard® Corporation (NYSE: AVD), a diversified specialty and agricultural products company that develops, manufactures, and markets solutions for crop protection and nutrition, turf and ornamental management and commercial pest control, today reported financial results for the first quarter ended March 31, 2025.

Financial and Operational Highlights – First Quarter 2025 versus First Quarter 2024:

• Net sales of $115.8 million v. $135.1 million;
• Adjusted EBITDA1 of $3.0 million v. $15.5 million;
• EPS of $(0.30) v. $0.06

Other Operational Highlights:

• Reduced net working capital by $85M year-over-year
• While operating expenses decreased by 5% on a GAAP basis, as compared to the year ago period, they decreased by 14% excluding transformation expenses and a non-recurring item

CEO Douglas A. Kaye III stated, “The first quarter of 2025 presented a challenging environment for suppliers to the global agricultural sector, continuing trends that we have experienced over the past 18-24 months. Against a backdrop of global economic uncertainty and generally high interest rates, customers focused on managing working capital by reducing inventory and limiting procurement to a just-in-time basis. In the face of these conditions, our results for the quarter declined, as compared to last year. While I am pleased with the progress we have made, if market conditions do not improve, we will enact further cost reduction initiatives over the coming quarters. We have made meaningful improvement to our cost structure, but much of that progress is currently being overshadowed in our financial results so far this year by the continued weakness in the agricultural environment.”

Mr. Kaye continued, “The environment is beginning to improve in the second quarter, and, like most industry participants in the agricultural chemical industry, we expect the second half of 2025 to be both seasonally stronger and to benefit from improving customer order rates. We expect to realize the benefit of commercial and operational improvements that are either completed or are well underway. As we continue to transform and simplify this business, future margins will improve, and further margin enhancement in 2026 and beyond is the target.”

David T. Johnson, Vice President, CFO and Treasurer, stated “While the industry recovers from its cyclical downturn, the team has made meaningful improvement to the cost structure. We are pleased with the results from our initial efforts to contain costs and will continue to keep a tight rein on non-essential costs for the foreseeable future. In addition to minimizing operating expenses, we have made significant improvements to our balance sheet. We ended the quarter with total debt of $167 million, which was down from $187 million the prior year. Net working capital decreased to $153 million versus $238 million a year ago. We will continue to focus on strengthening our balance sheet and positioning American Vanguard for a return to growth.”

Mr. Kaye concluded, “I believe that simplifying many of the things we do will allow us to better understand what is important and to deliver against high priority tasks. My message across the organization in this regard is straightforward – SIMPLIFY, PRIORITIZE and DELIVER. If we embrace this mantra, I believe that we can reaffirm American Vanguard’s position as a trusted provider of proven agricultural and environmental solutions.”

1

Adjusted earnings before interest, taxes, depreciation, and amortization. Adjusted EBITDA is not a financial measure calculated and presented in accordance with U.S. generally accepted accounting principles (GAAP) and should not be considered as an alternative to net income (loss), operating income (loss) or any other financial measure so calculated and presented, nor as an alternative to cash flow from operating activities as a measure of liquidity. The items excluded from adjusted EBITDA are detailed in the reconciliation attached to this news release. Other companies (including the Company’s competitors) may define adjusted EBITDA differently.

Earnings Conference Call The company will be hosting an earnings conference call at 9 am Eastern Time on June 6, 2025. The conference call can be accessed through the following link: https://www.webcaster4.com/Webcast/Page/3070/52413. A replay can also be accessed through the website. In addition, the company plans to post on the Investor Relations section of the company’s website a presentation that should be read in connection with this earnings release.

About American Vanguard American Vanguard Corporation is a diversified specialty and agriculture products company that develops and markets products for crop protection and management, turf and ornamentals management, and public and animal health. Over the past 20 years, through product and business acquisitions, the Company has significantly expanded its operations and now has more than 1,000 product registrations worldwide. To learn more about the Company, please reference www.american-vanguard.com.

The Company, from time to time, may discuss forward-looking information. Except for the historical information contained in this release the matters set forth in this press release include forward-looking statements. These statements can be identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements often use words such as “believe,” “expect,” “anticipate,” “intend,” “estimate,” “project,” “outlook,” “forecast,” “target,” “trend,” “plan,” “goal,” or other words of comparable meaning or future-tense or conditional verbs such as “may,” “will,” “should,” “would,” or “could.” These forward-looking statements are based on the current expectations and estimates by the Company’s management and are subject to various risks and uncertainties that may cause results to differ from management’s current expectations. Such factors include risks detailed from time-to-time in the Company’s SEC reports and filings. All forward-looking statements, if any, in this release represent the Company’s judgment as of the date of this release. The company disclaims any intent or obligation to update these forward-looking statements.

AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share data) (Unaudited)

 

ASSETS

 

March 31, 2025

 

 

December 31, 2024

 

Current assets:

 

 

 

 

 

 

Cash

 

$

11,805

 

 

$

12,514

 

Receivables:

 

 

 

 

 

 

Trade, net of allowance for credit losses of $10,321 and $9,190, respectively

 

 

159,559

 

 

 

169,743

 

Other

 

 

8,155

 

 

 

4,699

 

Total receivables, net

 

 

167,714

 

 

 

174,442

 

Inventories

 

 

184,596

 

 

 

179,292

 

Prepaid expenses

 

 

8,507

 

 

 

7,615

 

Income taxes receivable

 

 

5,226

 

 

 

5,030

 

Total current assets

 

 

377,848

 

 

 

378,893

 

Property, plant and equipment, net

 

 

57,016

 

 

 

58,169

 

Operating lease right-of-use assets, net

 

 

18,430

 

 

 

19,735

 

Intangible assets, net

 

 

147,668

 

 

 

150,497

 

Goodwill

 

 

20,291

 

 

 

19,701

 

Deferred income tax assets

 

 

1,331

 

 

 

1,242

 

Other assets

 

 

9,004

 

 

 

8,484

 

Total assets

 

$

631,588

 

 

$

636,721

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

93,920

 

 

$

69,159

 

Customer prepayments

 

 

24,460

 

 

 

52,675

 

Accrued program costs

 

 

70,319

 

 

 

69,449

 

Accrued expenses and other payables

 

 

17,119

 

 

 

31,989

 

Operating lease liabilities, current

 

 

5,986

 

 

 

6,136

 

Income taxes payable

 

 

1,261

 

 

 

2,942

 

Total current liabilities

 

 

213,065

 

 

 

232,350

 

Long-term debt

 

 

167,498

 

 

 

147,332

 

Operating lease liabilities, long-term

 

 

13,074

 

 

 

14,339

 

Deferred income tax liabilities

 

 

8,924

 

 

 

7,989

 

Other liabilities

 

 

1,673

 

 

 

1,601

 

Total liabilities

 

 

404,234

 

 

 

403,611

 

Commitments and contingent liabilities (Note 13)

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

Preferred stock, $0.10 par value per share; authorized 400,000 shares; none issued

 

 

—

 

 

 

—

 

Common stock, $0.10 par value per share; authorized 40,000,000 shares; issued 34,850,030 shares at March 31, 2025 and 34,794,548 shares at December 31, 2024

 

 

3,485

 

 

 

3,479

 

Additional paid-in capital

 

 

115,554

 

 

 

114,679

 

Accumulated other comprehensive loss

 

 

(16,904

)

 

 

(18,729

)

Retained earnings

 

 

196,420

 

 

 

204,882

 

 

 

 

298,555

 

 

 

304,311

 

Less treasury stock at cost, 5,915,182 shares at March 31, 2025 and December 31, 2024

 

 

(71,201

)

 

 

(71,201

)

Total stockholders’ equity

 

 

227,354

 

 

 

233,110

 

Total liabilities and stockholders’ equity

 

$

631,588

 

 

$

636,721

 

AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (Unaudited)

 

 

 

For the three months ended March 31

 

 

 

2025

 

 

2024

 

Net sales

 

$

115,800

 

 

$

135,143

 

Cost of sales

 

 

(85,609

)

 

 

(92,725

)

Gross profit

 

 

30,191

 

 

 

42,418

 

Operating expenses

 

 

 

 

 

 

Selling, general and administrative

 

 

(26,566

)

 

 

(29,469

)

Research, product development and regulatory

 

 

(5,682

)

 

 

(5,706

)

Transformation

 

 

(2,253

)

 

 

(1,152

)

Operating (loss) income

 

 

(4,310

)

 

 

6,091

 

Change in fair value of an equity investment

 

 

—

 

 

 

638

 

Interest expense, net

 

 

(3,765

)

 

 

(3,693

)

(Loss) income before provision for income taxes

 

 

(8,075

)

 

 

3,036

 

Income tax expense

 

 

(387

)

 

 

(1,484

)

Net (loss) income

 

$

(8,462

)

 

$

1,552

 

Net (loss) income per common share—basic

 

$

(0.30

)

 

$

0.06

 

Net (loss) income per common share—assuming dilution

 

$

(0.30

)

 

$

0.06

 

Weighted average shares outstanding—basic

 

 

28,271

 

 

 

27,844

 

Weighted average shares outstanding—assuming dilution

 

 

28,271

 

 

 

28,128

 

AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES ANALYSIS OF SALES (In thousands), (Unaudited)

 

 

 

For the three months ended March 31,

 

 

 

 

 

 

 

 

 

2025

 

 

2024

 

 

Change

 

 

% Change

 

Net sales:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. crop

 

$

57,176

 

 

$

67,257

 

 

$

(10,081

)

 

 

-15

%

U.S. non-crop

 

 

15,601

 

 

 

17,768

 

 

 

(2,167

)

 

 

-12

%

Total U.S.

 

 

72,777

 

 

 

85,025

 

 

 

(12,248

)

 

 

-14

%

International

 

 

43,023

 

 

 

50,118

 

 

 

(7,095

)

 

 

-14

%

Total net sales

 

$

115,800

 

 

$

135,143

 

 

$

(19,343

)

 

 

-14

%

Total cost of sales

 

$

(85,609

)

 

$

(92,725

)

 

$

7,116

 

 

 

-8

%

Total gross profit

 

$

30,191

 

 

$

42,418

 

 

$

(12,227

)

 

 

-29

%

Total gross margin

 

 

26

%

 

 

31

%

 

 

 

 

 

 

AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited)

 

 

 

For the three months ended March 31

 

 

 

2025

 

 

2024

 

Cash flows from operating activities:

 

 

 

 

 

 

Net (loss) income

 

$

(8,462

)

 

$

1,552

 

Adjustments to reconcile net (loss) income to net cash used in operating activities:

 

 

 

 

 

 

Depreciation and amortization of property, plant and equipment and intangible assets

 

 

4,744

 

 

 

5,441

 

Amortization of other long-term assets

 

 

5

 

 

 

189

 

Provision for bad debts

 

 

1,056

 

 

 

700

 

Stock-based compensation

 

 

559

 

 

 

2,005

 

Change in deferred income taxes

 

 

1,348

 

 

 

(1,025

)

Change in liabilities for uncertain tax positions or unrecognized tax benefits

 

 

90

 

 

 

35

 

Change in equity investment fair value

 

 

—

 

 

 

(638

)

Other

 

 

126

 

 

 

(5

)

Foreign currency transaction gains

 

 

(99

)

 

 

(373

)

Changes in assets and liabilities associated with operations:

 

 

 

 

 

 

Decrease (increase) in net receivables

 

 

6,892

 

 

 

(5,579

)

Increase in inventories

 

 

(4,721

)

 

 

(9,353

)

Increase in prepaid expenses and other assets

 

 

(856

)

 

 

(1,466

)

Change in income tax receivable and payable, net

 

 

(1,885

)

 

 

1,014

 

Increase in accounts payable

 

 

22,966

 

 

 

2,366

 

Decrease in customer prepayments

 

 

(28,215

)

 

 

(37,037

)

Increase in accrued program costs

 

 

837

 

 

 

6,399

 

Decrease in other payables and accrued expenses

 

 

(14,961

)

 

 

(332

)

Net cash used in operating activities

 

 

(20,576

)

 

 

(36,107

)

Cash flows from investing activities:

 

 

 

 

 

 

Capital expenditures

 

 

(431

)

 

 

(3,565

)

Proceeds from disposal of property, plant and equipment

 

 

12

 

 

 

23

 

Intangible assets

 

 

(27

)

 

 

(25

)

Net cash used in investing activities

 

 

(446

)

 

 

(3,567

)

Cash flows from financing activities:

 

 

 

 

 

 

Payments under line of credit agreement

 

 

(89,098

)

 

 

(35,346

)

Borrowings under line of credit agreement

 

 

109,265

 

 

 

77,146

 

Payment of deferred loan fees

 

 

(687

)

 

 

—

 

Net receipt from the issuance of common stock under ESPP

 

 

332

 

 

 

430

 

Net payment from common stock purchased for tax withholding

 

 

(11

)

 

 

(14

)

Payment of cash dividends

 

 

—

 

 

 

(834

)

Net cash provided by financing activities

 

 

19,801

 

 

 

41,382

 

Net (decrease) increase in cash

 

 

(1,221

)

 

 

1,708

 

Effect of exchange rate changes on cash and cash equivalents

 

 

512

 

 

 

585

 

Cash at beginning of period

 

 

12,514

 

 

 

11,416

 

Cash at end of period

 

$

11,805

 

 

$

13,709

 

AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA (Unaudited)

 

Reconciliation of Net Income to EBITDA

 

March 31, 2025

 

 

March 31, 2024

 

Net income, as reported

 

$

(8,462

)

 

$

1,552

 

Provision for income taxes

 

 

387

 

 

 

1,484

 

Interest expense, net

 

 

3,765

 

 

 

3,693

 

Depreciation and amortization

 

 

4,749

 

 

 

5,630

 

Stock compensation

 

 

559

 

 

 

2,005

 

Dacthal returns

 

 

(216

)

 

 

—

 

Transformation costs

 

 

2,191

 

 

 

1,152

 

Adjusted EBITDA2

 

$

2,973

 

 

$

15,516

 

2

Adjusted earnings before interest, taxes, depreciation, and amortization. Adjusted EBITDA is not a financial measure calculated and presented in accordance with U.S. generally accepted accounting principles (GAAP) and should not be considered as an alternative to net income (loss), operating income (loss) or any other financial measure so calculated and presented, nor as an alternative to cash flow from operating activities as a measure of liquidity. The items excluded from adjusted EBITDA are detailed in the above reconciliation. Other companies (including the Company’s competitors) may define adjusted EBITDA differently.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20250606463941/en/

Company Contact American Vanguard Corporation Anthony Young, Director of Investor Relations anthonyy@amvac.com (949) 221-6119 Investor Representative Alpha IR Group Robert Winters Robert.winters@alpha-ir.com (929) 266-6315