Substantially Reduced Operating Expenses
Materially Decreased Net Working Capital Consumption
Industry In the Early Innings of a Recovery
NEWPORT BEACH, Calif.–(BUSINESS WIRE)–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.
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AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES |
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ASSETS |
|
March 31, |
|
|
December 31, |
|
||
|
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 |
||||||||
|
|
|
For the three months |
|
|||||
|
|
|
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 |
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|
|
|
For the three months ended |
|
|
|
|
|
|
|
|||||||
|
|
|
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 |
||||||||
|
|
|
For the three months |
|
|||||
|
|
|
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 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. |
Contacts
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
