Quarterly Adjusted EBITDA of $11 million vs. $6 million in 2Q last year
Gross Profit Margin improved to 31% as compared to 29% in 2Q last year
Reiterates 2025 revenue and EBITDA guidance
American Vanguard® Corporation, 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 second quarter ended June 30, 2025.
Financial and Operational Highlights Second Quarter 2025– versus Second Quarter 2024:
- Net sales of $129 million v. $128 million;
- Adjusted EBITDA1 of $11 million v. $6 million;
- Maintains full-year 2025 EBITDA guidance of $40 million to $44 million;
- GAAP EPS of $(0.03) v. ($0.42);
- Debt outstanding of $189 million which is $22 million less than last year;
- Inventory of $191 million which is $53 million less than last year.
Dak Kaye, CEO of American Vanguard, stated, "We are pleased to see the progress that occurred, as part of our business transformation. Operational improvements in the business led to a substantial improvement in adjusted EBITDA, which increased by more than 80% as compared to last year. In addition to our self-help efforts, the agriculture economy appears to be in the early stages of a recovery. Customer destocking is beginning to subside. Against this backdrop, we were able to increase revenue by approximately 1%, as compared to last year."
Mr. Kaye continued, "We substantially increased our gross profit margin and simultaneously decreased our operating expenses as we executed our business transformation. The increase in our gross profit margin to 31%, compared to 29% last year, was driven by improvements in manufacturing and our procurement processes. We will continue to keep a tight rein on expenses and believe that our improved organization will allow us to elevate our gross profit margin over the coming years."
Chief Financial Officer David Johnson stated, "The company is operating more efficiently, as exhibited by decreased inventory and debt levels. Debt outstanding at the end of the quarter was approximately $189 million, a decrease of $22 million, as compared to last year. During the remainder of the year, we expect to allocate our free cash flow towards debt paydown. Further, our improved sales, inventory and operations planning process (SIOP), has allowed the company to operate with less inventory than in the past. Inventory was $191 million at the end of the quarter, a $53 million decrease, as compared to last year. Finally, we continue to operate the business with lower costs than the prior year. Our operating costs were down $5 million in the second quarter and $8 million year-to-date, excluding transformation expenses, which declined dramatically in both the three- and six-month periods. We expect to continue to control our expenses and drive down inventory over the coming quarters as we look to wring more capital out of the business, in an effort to maximize investor returns."
Mr. Kaye concluded, "I want to reiterate our full year 2025 revenue ($535 million - $545 million) and adjusted EBITDA ($40 - $44 million) targets. This quarter we demonstrated real progress in improving operating leverage while maintaining a strong balance sheet. We continue to believe there is room for further improvement, and I am confident that the investments we have been making, and continue to make, in transforming our business will generate accelerated improvements, particularly in a rising market."
Earnings Conference Call
The company will be hosting an earnings conference call at 5 pm ET on July 31, 2025. The conference call can be accessed through the following link: https://www.webcaster4.com/Webcast/Page/3070/52784
A replay can also be accessed through the company website.
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 |
|
June 30,
|
|
|
December 31,
|
|
||
Current assets: |
|
|
|
|
|
|
||
Cash |
|
$ |
14,482 |
|
|
$ |
12,514 |
|
Receivables: |
|
|
|
|
|
|
||
Trade, net of allowance for credit losses of $11,378 and $9,190, respectively |
|
|
169,482 |
|
|
|
169,743 |
|
Other |
|
|
9,470 |
|
|
|
4,699 |
|
Total receivables, net |
|
|
178,952 |
|
|
|
174,442 |
|
Inventories |
|
|
191,497 |
|
|
|
179,292 |
|
Prepaid expenses |
|
|
9,391 |
|
|
|
7,615 |
|
Income taxes receivable |
|
|
5,004 |
|
|
|
5,030 |
|
Total current assets |
|
|
399,326 |
|
|
|
378,893 |
|
Property, plant and equipment, net |
|
|
56,104 |
|
|
|
58,169 |
|
Operating lease right-of-use assets, net |
|
|
18,390 |
|
|
|
19,735 |
|
Intangible assets, net of amortization |
|
|
146,168 |
|
|
|
150,497 |
|
Goodwill |
|
|
20,805 |
|
|
|
19,701 |
|
Deferred income tax assets |
|
|
3,429 |
|
|
|
1,242 |
|
Other assets |
|
|
7,756 |
|
|
|
8,484 |
|
Total assets |
|
$ |
651,978 |
|
|
$ |
636,721 |
|
|
|
|
|
|
|
|
||
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
||
Current liabilities: |
|
|
|
|
|
|
||
Accounts payable |
|
$ |
96,778 |
|
|
$ |
69,159 |
|
Customer prepayments |
|
|
6,490 |
|
|
|
52,675 |
|
Accrued program costs |
|
|
79,868 |
|
|
|
69,449 |
|
Accrued expenses and other payables |
|
|
17,312 |
|
|
|
31,989 |
|
Operating lease liabilities, current |
|
|
6,302 |
|
|
|
6,136 |
|
Income taxes payable |
|
|
1,994 |
|
|
|
2,942 |
|
Total current liabilities |
|
|
208,744 |
|
|
|
232,350 |
|
Long-term debt |
|
|
189,500 |
|
|
|
147,332 |
|
Operating lease liabilities, long term |
|
|
12,728 |
|
|
|
14,339 |
|
Deferred income tax liabilities |
|
|
9,217 |
|
|
|
7,989 |
|
Other liabilities |
|
|
967 |
|
|
|
1,601 |
|
Total liabilities |
|
|
421,156 |
|
|
|
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 34,778,423 shares at June 30, 2025 and 34,794,548 shares at December 31, 2024 |
|
|
3,478 |
|
|
|
3,479 |
|
Additional paid-in capital |
|
|
115,853 |
|
|
|
114,679 |
|
Accumulated other comprehensive loss |
|
|
(12,879 |
) |
|
|
(18,729 |
) |
Retained earnings |
|
|
195,571 |
|
|
|
204,882 |
|
|
|
|
302,023 |
|
|
|
304,311 |
|
Less treasury stock at cost, 5,915,182 shares at June 30, 2025 and December 31, 2024 |
|
|
(71,201 |
) |
|
|
(71,201 |
) |
Total stockholders' equity |
|
|
230,822 |
|
|
|
233,110 |
|
Total liabilities and stockholders' equity |
|
$ |
651,978 |
|
|
$ |
636,721 |
|
AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES |
||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||||||||||||
(In thousands, except per share data) |
||||||||||||||||
(Unaudited) |
||||||||||||||||
|
|
For the Three Months
|
|
|
For the Six Months
|
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Net sales |
|
$ |
129,313 |
|
|
$ |
128,209 |
|
|
$ |
245,113 |
|
|
$ |
263,352 |
|
Cost of sales |
|
|
(88,766 |
) |
|
|
(90,446 |
) |
|
|
(174,375 |
) |
|
|
(183,171 |
) |
Gross profit |
|
|
40,547 |
|
|
|
37,763 |
|
|
|
70,738 |
|
|
|
80,181 |
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Selling, general and administrative |
|
|
(28,757 |
) |
|
|
(31,051 |
) |
|
|
(55,385 |
) |
|
|
(60,520 |
) |
Research, product development and regulatory |
|
|
(5,803 |
) |
|
|
(8,599 |
) |
|
|
(11,485 |
) |
|
|
(14,305 |
) |
Transformation |
|
|
(1,621 |
) |
|
|
(7,345 |
) |
|
|
(3,812 |
) |
|
|
(8,497 |
) |
Operating income (loss) |
|
|
4,366 |
|
|
|
(9,232 |
) |
|
|
56 |
|
|
|
(3,141 |
) |
Change in fair value of equity investment |
|
|
— |
|
|
|
(125 |
) |
|
|
— |
|
|
|
513 |
|
Interest expense, net |
|
|
(4,450 |
) |
|
|
(3,917 |
) |
|
|
(8,215 |
) |
|
|
(7,610 |
) |
Loss before provision for income taxes |
|
|
(84 |
) |
|
|
(13,274 |
) |
|
|
(8,159 |
) |
|
|
(10,238 |
) |
Income tax (expense) benefit |
|
|
(765 |
) |
|
|
1,553 |
|
|
|
(1,152 |
) |
|
|
69 |
|
Net loss |
|
$ |
(849 |
) |
|
$ |
(11,721 |
) |
|
$ |
(9,311 |
) |
|
$ |
(10,169 |
) |
Net loss per common share—basic |
|
$ |
(0.03 |
) |
|
$ |
(0.42 |
) |
|
$ |
(0.33 |
) |
|
$ |
(0.36 |
) |
Net loss per common share—assuming dilution |
|
$ |
(0.03 |
) |
|
$ |
(0.42 |
) |
|
$ |
(0.33 |
) |
|
$ |
(0.36 |
) |
Weighted average shares outstanding—basic |
|
|
28,345 |
|
|
|
28,024 |
|
|
|
28,308 |
|
|
|
27,934 |
|
Weighted average shares outstanding—assuming dilution |
|
|
28,345 |
|
|
|
28,024 |
|
|
|
28,308 |
|
|
|
27,934 |
|
AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES
ANALYSIS OF SALES
(In thousands)
(Unaudited)
For the three months ended June 30:
|
|
2025 |
|
|
2024 |
|
|
Change |
|
|
% Change |
|
||||
Net sales: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. crop |
|
$ |
52,674 |
|
|
$ |
52,289 |
|
|
$ |
385 |
|
|
|
1 |
% |
U.S. non-crop |
|
|
19,585 |
|
|
|
19,011 |
|
|
|
574 |
|
|
|
3 |
% |
Total U.S. |
|
|
72,259 |
|
|
|
71,300 |
|
|
|
959 |
|
|
|
1 |
% |
International |
|
|
57,054 |
|
|
|
56,909 |
|
|
|
145 |
|
|
|
0 |
% |
Total net sales |
|
$ |
129,313 |
|
|
$ |
128,209 |
|
|
$ |
1,104 |
|
|
|
1 |
% |
Total cost of sales |
|
|
(88,766 |
) |
|
|
(90,446 |
) |
|
|
1,680 |
|
|
|
-2 |
% |
Total gross profit |
|
$ |
40,547 |
|
|
$ |
37,763 |
|
|
$ |
2,784 |
|
|
|
7 |
% |
Total gross margin |
|
|
31 |
% |
|
|
29 |
% |
|
|
|
|
|
|
||
For the six months ended June 30:
|
|
2025 |
|
|
2024 |
|
|
Change |
|
|
% Change |
|
||||
Net sales: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. crop |
|
$ |
110,201 |
|
|
$ |
119,542 |
|
|
$ |
(9,341 |
) |
|
|
-8 |
% |
U.S. non-crop |
|
|
34,834 |
|
|
|
36,787 |
|
|
|
(1,953 |
) |
|
|
-5 |
% |
Total U.S. |
|
|
145,035 |
|
|
|
156,329 |
|
|
|
(11,294 |
) |
|
|
-7 |
% |
International |
|
|
100,078 |
|
|
|
107,023 |
|
|
|
(6,945 |
) |
|
|
-6 |
% |
Total net sales |
|
$ |
245,113 |
|
|
$ |
263,352 |
|
|
$ |
(18,239 |
) |
|
|
-7 |
% |
Total cost of sales |
|
$ |
(174,375 |
) |
|
$ |
(183,171 |
) |
|
$ |
8,796 |
|
|
|
-5 |
% |
Total gross profit |
|
$ |
70,738 |
|
|
$ |
80,181 |
|
|
$ |
(9,443 |
) |
|
|
-12 |
% |
Total gross margin |
|
|
29 |
% |
|
|
30 |
% |
|
|
|
|
|
|
||
AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES |
||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||
(In thousands) |
||||||||
(Unaudited) |
||||||||
|
|
For the Six Months Ended June 30, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Cash flows from operating activities: |
|
|
|
|
|
|
||
Net loss |
|
$ |
(9,311 |
) |
|
$ |
(10,169 |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
||
Depreciation of property, plant and equipment and amortization of intangible assets |
|
|
9,447 |
|
|
|
10,904 |
|
Amortization of other long-term assets |
|
|
11 |
|
|
|
194 |
|
Amortization and accretion of deferred loan fees and discounted liabilities |
|
|
569 |
|
|
|
213 |
|
Gain on disposal of property, plant and equipment |
|
|
(40 |
) |
|
|
— |
|
Impairment of assets |
|
|
134 |
|
|
|
— |
|
Provision for estimated credit losses |
|
|
1,999 |
|
|
|
883 |
|
Stock-based compensation |
|
|
981 |
|
|
|
2,752 |
|
Change in deferred income taxes |
|
|
(200 |
) |
|
|
(276 |
) |
Changes in liabilities for uncertain tax positions or unrecognized tax benefits |
|
|
(60 |
) |
|
|
71 |
|
Change in equity investment fair value |
|
|
— |
|
|
|
(513 |
) |
Unrealized foreign currency transaction gains |
|
|
(855 |
) |
|
|
(127 |
) |
Changes in assets and liabilities associated with operations: |
|
|
|
|
|
|
||
Increase in net receivables |
|
|
(3,293 |
) |
|
|
(11,962 |
) |
Increase in inventories |
|
|
(9,785 |
) |
|
|
(27,770 |
) |
Increase in prepaid expenses and other assets |
|
|
(1,863 |
) |
|
|
(3,730 |
) |
Change in income tax receivable/payable, net |
|
|
(1,024 |
) |
|
|
(7,129 |
) |
Decrease in net operating lease liability |
|
|
(100 |
) |
|
|
(66 |
) |
Increase in accounts payable |
|
|
24,547 |
|
|
|
34,292 |
|
Decrease in customer prepayments |
|
|
(46,187 |
) |
|
|
(53,468 |
) |
Increase in accrued program costs |
|
|
10,267 |
|
|
|
18,209 |
|
Decrease in other payables and accrued expenses |
|
|
(15,073 |
) |
|
|
(1,665 |
) |
Net cash used in operating activities |
|
|
(39,836 |
) |
|
|
(49,357 |
) |
Cash flows from investing activities: |
|
|
|
|
|
|
||
Capital expenditures |
|
|
(1,020 |
) |
|
|
(4,944 |
) |
Proceeds from disposal of property, plant and equipment |
|
|
51 |
|
|
|
75 |
|
Intangible assets |
|
|
(88 |
) |
|
|
(1,529 |
) |
Net cash used in investing activities |
|
|
(1,057 |
) |
|
|
(6,398 |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
||
Payments under line of credit agreement |
|
|
(128,665 |
) |
|
|
(110,076 |
) |
Borrowings under line of credit agreement |
|
|
170,834 |
|
|
|
175,335 |
|
Payment of deferred loan fees |
|
|
(881 |
) |
|
|
— |
|
Net receipt from the issuance of common stock under ESPP |
|
|
333 |
|
|
|
430 |
|
Net payment for tax withholding on stock-based compensation awards |
|
|
(142 |
) |
|
|
(829 |
) |
Payment of cash dividends |
|
|
— |
|
|
|
(1,670 |
) |
Net cash provided by financing activities |
|
|
41,479 |
|
|
|
63,190 |
|
Net increase in cash and cash equivalents |
|
|
586 |
|
|
|
7,435 |
|
Effect of exchange rate changes on cash and cash equivalents |
|
|
1,382 |
|
|
|
(902 |
) |
Cash and cash equivalents at beginning of period |
|
|
12,514 |
|
|
|
11,416 |
|
Cash and cash equivalents at end of period |
|
$ |
14,482 |
|
|
$ |
17,949 |
|
AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES |
||||||||||||||||
RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA |
||||||||||||||||
(Unaudited) |
||||||||||||||||
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Net (loss) income |
|
$ |
(849 |
) |
|
$ |
(11,721 |
) |
|
$ |
(9,311 |
) |
|
$ |
(10,169 |
) |
Income tax (benefit) expense |
|
|
765 |
|
|
|
(1,553 |
) |
|
|
1,152 |
|
|
|
(69 |
) |
Interest expense, net |
|
|
4,450 |
|
|
|
3,917 |
|
|
|
8,215 |
|
|
|
7,610 |
|
Depreciation and amortization |
|
|
4,709 |
|
|
|
5,463 |
|
|
|
9,458 |
|
|
|
11,093 |
|
Stock compensation |
|
|
422 |
|
|
|
748 |
|
|
|
981 |
|
|
|
2,752 |
|
Dacthal returns |
|
|
(213 |
) |
|
|
— |
|
|
|
(429 |
) |
|
|
— |
|
Asset impairment |
|
|
134 |
|
|
|
— |
|
|
|
134 |
|
|
|
— |
|
Transformation costs & legal reserves |
|
|
1,621 |
|
|
|
9,310 |
|
|
|
3,812 |
|
|
|
10,462 |
|
Adjusted EBITDA2 |
|
$ |
11,039 |
|
|
$ |
6,164 |
|
|
$ |
14,012 |
|
|
$ |
21,679 |
|
|
|
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. |
|
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 reconciliation attached to this news release. Other companies (including the Company's competitors) may define adjusted EBITDA differently. |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20250731931127/en/
Company Contact
American Vanguard Corporation
Anthony Young, Director of Investor Relations
[email protected]
(949) 221-6119
Investor Representative
Alpha IR Group
Robert Winters
[email protected]
(929) 266-6315