American Vanguard Q3 2026 loss widens to $17.7M
First-lien leverage covenant compliance depends on generating significant adjusted EBITDA in Q4 2026.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
American Vanguard Corporation (AVD) reported third-quarter 2026 net sales of $108.4 million, down from $119.3 million a year earlier, and a net loss of $17.7 million versus $12.4 million. Gross profit was $26.3 million versus $34.2 million, and gross margin was 24% versus 29%. International sales declined 17%; U.S. Crop and U.S. Specialty sales each declined 2%.
For the first nine months, net sales were $348.7 million versus $364.4 million, and net loss was $31.7 million versus $21.7 million. Operating cash used was $12.3 million, compared with $27.1 million. Cash at September 30, 2026, was $83.9 million. Higher borrowing and the new term-loan structure contributed to increased net interest expense.
AMVAC Chemical Corporation, a subsidiary, entered into first- and second-lien term loans with aggregate principal amounts of $225 million and $60 million, both maturing March 13, 2031; the agreements prohibit cash dividends. A September 30, 2026, asset acquisition covered four U.S. product lines, with $5 million paid and $4.5 million due on the first anniversary. American Vanguard reported covenant compliance at September 30, 2026, while saying first-lien leverage compliance depends on generating significant adjusted EBITDA in Q4 2026.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Hollow bars mark forward-looking points. How the balance works
Positive
- Moderate pointNine-month operating cash used was $12.3 million, versus $27.1 million.
Negative
- Moderate pointQuarterly sales fell 9%; gross profit fell 23% year over year.
- Moderate pointQuarterly net loss rose to $17.7 million from $12.4 million.
- Moderate point. Forward-looking: it has not happened yet and may not happen.First-lien covenant compliance depends on significant Q4 2026 adjusted EBITDA generation.
Filing Explained
The active first-lien loan requires AMVAC and its guarantors to maintain minimum unrestricted cash of
Key Figures
Key Terms
variable consideration financial
SOFR financial
leverage covenant financial
asset acquisition financial
valuation allowances financial
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
How much revenue did AVD report in Q3 2026?
What are the interest terms on AVD's term loans?
What minimum cash levels must AVD maintain under its first-lien loan?
AI-generated analysis. How Rhea-AI works. Not financial advice.
n
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
FOR THE QUARTERLY PERIOD ENDED
FOR THE TRANSITION PERIOD FROM TO
Commission file number
(State or other jurisdiction of Incorporation or organization) |
(I.R.S. Employer Identification Number) |
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(Address of principal executive offices) |
(Zip Code) |
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(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
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Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer |
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Non-Accelerated Filer |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. Common Stock, $0.10 Par Value—
AMERICAN VANGUARD CORPORATION
INDEX
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Part I. Financial Information |
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Item 1. |
Financial Statements (unaudited) |
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Condensed Consolidated Statements of Operations |
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Condensed Consolidated Statements of Comprehensive Loss |
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Condensed Consolidated Balance Sheets |
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Condensed Consolidated Statements of Stockholders’ Equity |
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Condensed Consolidated Statements of Cash Flows |
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Notes to Condensed Consolidated Financial Statements |
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Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 3. |
Quantitative and Qualitative Disclosures About Market Risk |
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Item 4. |
Controls and Procedures |
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27 |
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Part II. Other Information |
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Item 1. |
Legal Proceedings |
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Item 1A. |
Risk Factors |
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Item 2. |
Purchases of Equity Securities by the Issuer |
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28 |
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Item 6. |
Exhibits |
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29 |
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Signatures |
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30 |
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2
Part I. Financial Information
Item 1. Financial Statements
AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
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For the Three Months Ended September 30, |
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For the Nine Months Ended September 30, |
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2026 |
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2025 |
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2026 |
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2025 |
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Net sales |
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Cost of sales |
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Gross profit |
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Operating expenses |
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Selling, general and administrative |
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Research, product development and regulatory |
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Product liability claims |
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CFO transition costs |
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— |
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Transformation |
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Asset impairments |
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(Loss) gain from sale of assets |
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Operating loss |
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Change in fair value of an equity investment |
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Interest expense, net |
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( |
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Loss before provision for income taxes |
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Income tax expense |
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( |
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Net loss |
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$ |
( |
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$ |
( |
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$ |
( |
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$ |
( |
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Net loss per common share—basic |
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$ |
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$ |
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$ |
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$ |
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Net loss per common share—assuming dilution |
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$ |
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$ |
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$ |
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$ |
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Weighted average shares outstanding—basic |
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Weighted average shares outstanding—assuming dilution |
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See accompanying notes to the condensed consolidated financial statements.
3
AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(In thousands)
(Unaudited)
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For the Three Months Ended September 30, |
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For the Nine Months Ended September 30, |
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2026 |
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2025 |
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2026 |
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2025 |
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Net loss |
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$ |
( |
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$ |
( |
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$ |
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$ |
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Other comprehensive (loss) income: |
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Foreign currency translation adjustment, net of tax effects |
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Comprehensive loss |
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$ |
( |
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$ |
( |
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$ |
( |
) |
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$ |
( |
) |
See accompanying notes to the condensed consolidated financial statements.
4
AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
ASSETS |
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September 30, 2026 |
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December 31, 2025 |
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Current assets: |
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Cash |
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$ |
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$ |
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Receivables: |
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Trade, net of allowance for credit losses of $ |
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Other |
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Total receivables, net |
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Inventories |
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Prepaid expenses |
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Income taxes receivable |
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Total current assets |
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Property, plant and equipment, net |
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Operating lease right-of-use assets, net |
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Intangible assets, net |
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Deferred income tax assets |
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Other assets |
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Total assets |
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$ |
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$ |
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Liabilities and Stockholders’ Equity |
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Current liabilities: |
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Accounts payable |
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$ |
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$ |
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Customer prepayments |
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Accrued program costs |
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Accrued expenses and other payables |
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Current portion of long-term debt |
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Operating lease liabilities, current |
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Income taxes payable |
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Total current liabilities |
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Long-term debt, net of current portion |
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Operating lease liabilities, long-term |
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Deferred income tax liabilities |
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Other liabilities |
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Total liabilities |
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Commitments and contingent liabilities (Note 12) |
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Stockholders’ equity: |
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Preferred stock, $ |
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Common stock, $ |
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Additional paid-in capital |
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Accumulated other comprehensive loss |
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( |
) |
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( |
) |
Retained earnings |
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Less treasury stock at cost, |
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( |
) |
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( |
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Total stockholders’ equity |
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||
Total liabilities and stockholders’ equity |
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$ |
|
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$ |
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||
See accompanying notes to the condensed consolidated financial statements.
5
AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
For the Three and Nine Months Ended September 30, 2026
(In thousands, except share data)
(Unaudited)
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Common Stock |
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Additional |
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Accumulated Other |
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Treasury Stock |
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Shares |
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Amount |
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Paid-in |
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Comprehensive |
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Retained |
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Shares |
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Amount |
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Total |
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||||||||
Balance, January 1, 2026 |
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$ |
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$ |
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$ |
( |
) |
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$ |
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$ |
( |
) |
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$ |
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||||||
Stocks issued under ESPP |
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— |
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— |
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— |
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— |
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||||
Foreign currency translation adjustment, net |
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— |
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— |
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— |
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— |
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— |
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— |
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Stock-based compensation |
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— |
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— |
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— |
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— |
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— |
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— |
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Stock options exercised; grants, |
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( |
) |
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( |
) |
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( |
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— |
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— |
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— |
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— |
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( |
) |
Net loss |
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— |
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— |
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— |
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— |
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( |
) |
|
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— |
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( |
) |
|
Balance, March 31, 2026 |
|
|
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$ |
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$ |
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$ |
( |
) |
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$ |
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$ |
( |
) |
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$ |
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||||||
Foreign currency translation adjustment, net |
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— |
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— |
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— |
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|
|
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|
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— |
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|
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— |
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— |
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||
Stock-based compensation |
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— |
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— |
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— |
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— |
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— |
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— |
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||
Stock options exercised; grants, |
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( |
) |
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( |
) |
|
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( |
) |
|
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— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
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( |
) |
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
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|
|
— |
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|
|
( |
) |
|
|
— |
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|
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— |
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( |
) |
Balance, June 30, 2026 |
|
|
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$ |
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$ |
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$ |
( |
) |
|
$ |
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$ |
( |
) |
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$ |
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||||||
Foreign currency translation adjustment, net |
|
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— |
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— |
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— |
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( |
) |
|
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— |
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— |
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— |
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( |
) |
Stocks issued under ESPP |
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— |
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— |
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— |
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— |
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||||
Stock-based compensation |
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— |
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— |
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— |
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— |
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— |
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— |
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||
Stock options exercised; grants, |
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|
|
|
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|
( |
) |
|
|
— |
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|
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— |
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|
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— |
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— |
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( |
) |
||
Net loss |
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— |
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— |
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— |
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— |
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( |
) |
|
|
— |
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|
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— |
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( |
) |
Balance, September 30, 2026 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
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|
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$ |
( |
) |
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$ |
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||||||
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||||||||
See accompanying notes to the condensed consolidated financial statements.
6
AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
For the Three and Nine Months Ended September 30, 2025
(In thousands, except share data)
(Unaudited)
|
|
Common Stock |
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Additional |
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Accumulated Other |
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Treasury Stock |
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||||||||||||||
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Shares |
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Amount |
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Paid-in |
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Comprehensive |
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Retained |
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Shares |
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Amount |
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Total |
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||||||||
Balance, January 1, 2025 |
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$ |
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$ |
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$ |
( |
) |
|
$ |
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$ |
( |
) |
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$ |
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||||||
Stocks issued under ESPP |
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— |
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— |
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— |
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— |
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||||
Foreign currency translation adjustment, net |
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— |
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— |
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— |
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— |
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— |
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— |
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||
Stock-based compensation |
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— |
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— |
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— |
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— |
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— |
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— |
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|
|
||
Stock options exercised; grants, |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Balance, March 31, 2025 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
|
|
|
$ |
( |
) |
|
$ |
|
||||||
Foreign currency translation adjustment, net |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Stock-based compensation |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Stock options exercised; grants, |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Balance, June 30, 2025 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
|
|
|
$ |
( |
) |
|
$ |
|
||||||
Stocks issued under ESPP |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||||
Foreign currency translation adjustment, net |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Stock-based compensation |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Stock options exercised; grants, termination |
|
|
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
||
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Balance, September 30, 2025 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
|
|
|
$ |
( |
) |
|
$ |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
See accompanying notes to the condensed consolidated financial statements.
7
AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
|
|
For the Nine Months Ended September 30, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Cash flows from operating activities: |
|
|
|
|
|
|
||
Net loss |
|
$ |
( |
) |
|
$ |
( |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
||
Depreciation and amortization of property, plant and equipment and intangible assets |
|
|
|
|
|
|
||
Amortization of other long-term assets |
|
|
|
|
|
|
||
Loss (gain) on disposal of property, plant and equipment |
|
|
|
|
|
( |
) |
|
Provision for estimated credit losses |
|
|
|
|
|
|
||
Stock-based compensation |
|
|
|
|
|
|
||
Deferred income taxes |
|
|
( |
) |
|
|
( |
) |
Change in liabilities for uncertain tax positions or unrecognized tax benefits |
|
|
( |
) |
|
|
( |
) |
Change in equity investment fair value |
|
|
|
|
|
|
||
Impairment of assets |
|
|
|
|
|
|
||
Payment-in-kind debt leverage fee |
|
|
|
|
|
|
||
Amortization of deferred loan fees |
|
|
|
|
|
|
||
Lease obligations and non-cash lease expense, net |
|
|
( |
) |
|
|
( |
) |
Unrealized foreign currency transaction losses (gains) |
|
|
|
|
|
( |
) |
|
Changes in assets and liabilities associated with operations: |
|
|
|
|
|
|
||
Decrease in net receivables |
|
|
|
|
|
|
||
Increase in inventories |
|
|
( |
) |
|
|
( |
) |
Increase in prepaid expenses and other assets |
|
|
( |
) |
|
|
( |
) |
Change in income tax receivable and payable, net |
|
|
|
|
|
( |
) |
|
(Decrease) increase in accounts payable |
|
|
( |
) |
|
|
|
|
Increase (decrease) in customer prepayments |
|
|
|
|
|
( |
) |
|
(Decrease) increase in accrued program costs |
|
|
( |
) |
|
|
|
|
Decrease in other payables and accrued expenses |
|
|
( |
) |
|
|
( |
) |
Net cash used in operating activities |
|
|
( |
) |
|
|
( |
) |
Cash flows from investing activities: |
|
|
|
|
|
|
||
Capital expenditures |
|
|
( |
) |
|
|
( |
) |
Proceeds from disposal of property, plant and equipment |
|
|
|
|
|
|
||
Intangible assets |
|
|
( |
) |
|
|
( |
) |
Net cash used in investing activities |
|
|
( |
) |
|
|
( |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
||
Payments under line of credit agreement |
|
|
( |
) |
|
|
( |
) |
Borrowings under line of credit agreement |
|
|
|
|
|
|
||
Borrowings under term loans |
|
|
|
|
|
|
||
Repayments of term loans |
|
|
( |
) |
|
|
|
|
Payment of deferred loan fees |
|
|
( |
) |
|
|
( |
) |
Net receipt from the issuance of common stock under ESPP |
|
|
|
|
|
|
||
Net payment from common stock purchased for tax withholding |
|
|
( |
) |
|
|
( |
) |
Net cash provided by financing activities |
|
|
|
|
|
|
||
Net increase in cash |
|
|
|
|
|
|
||
Effect of exchange rate changes on cash and cash equivalents |
|
|
( |
) |
|
|
|
|
Cash at beginning of period |
|
|
|
|
|
|
||
Cash at end of period |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
See accompanying notes to the condensed consolidated financial statements.
8
AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(In thousands, except share data)
(Unaudited)
1. Summary of Significant Accounting Policies
The accompanying unaudited condensed consolidated financial statements of American Vanguard Corporation and its subsidiaries (“AVD” or “the Company”) have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, all adjustments (consisting of consolidating adjustments, eliminations, and normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2026, are not necessarily indicative of the results that may be expected for the year ending December 31, 2026. The condensed consolidated financial statements and related notes do not include all information and footnotes required by US GAAP for annual reports. This quarterly report should be read in conjunction with the consolidated financial statements included in the Company’s annual report on Form 10-K for the year ended December 31, 2025.
CFO Transition Costs — The Chief Financial Officer (“CFO”) transition costs include severance costs payable to the outgoing CFO and executive search costs for the new CFO.
Transformation — Transformation expenses on the condensed consolidated statements of operations relate to three initiatives: digital transformation, structural transformation and manufacturing optimization. The digital transformation is intended to give business process owners access to current and complete data generated through standardized systems and processes. The structural transformation is intended to improve operating leverage by applying business analytics to the Company’s operations, structures, products and services to identify process and structural improvements, as well as pricing and go-to-market strategies. The manufacturing optimization is focused on the Company’s U.S. manufacturing footprint. It reduces activities at the Los Angeles facility, including discontinuing synthesis processes at that site, and builds upon the capabilities of the Axis manufacturing site. Transformation expenses consist primarily of consulting fees, costs of staffing and executing the transformation initiatives, and costs of the Los Angeles plant reorganization. Transformation expenses were $
The Los Angeles plant reorganization is expected to be completed by December 31, 2026. Reorganization costs, which are included in transformation expenses, were $
Recently Adopted Accounting Guidance — In July 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2025-05, “Financial Instruments - Credit Losses,” which simplifies the application of the current expected credit loss model by providing a practical expedient and accounting policy election permitting entities to assume that conditions as of the balance sheet date remain unchanged over the life of the asset when measuring credit losses on current accounts receivable and current contract assets. The Company's adoption of this standard on January 1, 2026, had no impact on its disclosures and no material impact on its results of operations, cash flows or financial condition.
Recently Issued Accounting Guidance — In November 2024, the FASB issued ASU No. 2024-03, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses", and in January 2025, the FASB issued ASU No. 2025-01, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date". ASU 2024-03 requires public companies to disclose, in interim and reporting periods, additional information about certain expenses in the financial statements. For public business entities, ASU 2024-03, as clarified by ASU 2025-01, is effective for the first annual reporting period beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption of ASU 2024-03 is permitted. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements.
The Company reviewed all other recently issued accounting pronouncements and concluded that they were either not applicable to, or not expected to have a significant impact upon, its condensed consolidated financial statements.
9
AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements – (Continued)
(In thousands, except share data)
(Unaudited)
Reclassification — Certain amounts in the accompanying condensed consolidated statements of operations and cash flows have been reclassified to conform to the current period financial statements. These reclassifications have not changed the results of operations or cash flows of the prior period.
2. Revenue Recognition
The Company recognizes revenue from the sale of its products, which include Crop and Specialty products. The Company sells its products to customers, which include distributors, retailers, and growers. Substantially all revenue is recognized at a point in time. The Company has one reportable segment.
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Net sales: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. Crop |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
U.S. Specialty |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total U.S. |
|
|
|
|
|
|
|
|
|
|
|
|
||||
International |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total net sales: |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net sales are reported within the country of the selling entity. As of October 1, 2025, the Company implemented a new organizational structure, as part of its business transformation actions, and now sells and recognizes direct business-to-business sales to certain foreign customers in its U.S. Crop business. The associated sales are reported as U.S. Crop net sales for the three and nine months ended September 30, 2026. For the three and nine months ended September 30, 2025, these sales were included in International net sales and amounted to $
The Company sometimes receives payments from its customers in advance of goods and services being provided in return for early cash incentive programs. These payments are included in customer prepayments on the condensed consolidated balance sheets. Revenue recognized for the three and nine months ended September 30, 2026, that was included in customer prepayments at the beginning of 2026, was $
The Company has contract assets that relate to royalties earned on certain functional licenses granted for the use of the Company’s intellectual property. At September 30, 2026 and December 31, 2025, the contract assets amounted to $
3. Accrued Program Costs
The Company offers various discounts to customers based on the volume purchased within a defined period, other pricing adjustments, some grower volume incentives or other key performance indicator driven payments made to distributors, retailers or growers, usually at the end of a growing season. The Company describes these payments as “Programs.” Programs are a critical part of doing business in both the U.S. Crop and Specialty chemicals marketplaces. These discount Programs represent variable consideration. Revenues from sales are recorded at the net sales price, which is the transaction price, less an estimate of variable consideration. Variable consideration includes amounts expected to be paid to its customers using the expected value method. Each quarter management compares individual sale transactions with Programs to determine what, if any, Program liabilities have been incurred. Once this initial calculation is made for the specific quarter, sales and marketing management, along with executive and financial management, review the accumulated Program balance and, for volume driven payments, make assessments of whether or not customers are tracking in a manner that indicates that they will meet the requirements set out in agreed upon terms and conditions attached to each Program. Following this assessment, management adjusts the accumulated accrual to properly reflect the liability at the balance sheet date. Programs are paid out predominantly on an annual basis, usually in the final quarter of the financial year or the first quarter of the following year.
10
AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements – (Continued)
(In thousands, except share data)
(Unaudited)
4
Income tax expense was $
5
The components of basic and diluted earnings per share were as follows:
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Numerator: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net loss |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Denominator: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average shares outstanding-basic and diluted |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Due to net losses for the three and nine months ended September 30, 2026 and 2025, stock options and other grants were excluded from the computation of diluted net loss per share, as they would be antidilutive.
6
Total comprehensive loss includes, in addition to net losses, changes in equity that are excluded from the condensed consolidated statements of operations and are recorded directly into a separate section of stockholders’ equity on the condensed consolidated balance sheets. For the three and nine months ended September 30, 2026 and 2025, total comprehensive loss consisted of net losses and foreign currency translation adjustments.
7
Inventory is stated at the lower of cost or net realizable value.
|
|
September 30, 2026 |
|
|
December 31, 2025 |
|
||
Finished products |
|
$ |
|
|
$ |
|
||
Raw materials |
|
|
|
|
|
|
||
Inventories |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Finished products consist of products that are sold to customers in their current form as well as intermediate products that require further formulation to be saleable to customers.
11
AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements – (Continued)
(In thousands, except share data)
(Unaudited)
8
Property, plant and equipment at September 30, 2026, and December 31, 2025, consist of the following:
|
|
September 30, 2026 |
|
|
December 31, 2025 |
|
||
Land |
|
$ |
|
|
$ |
|
||
Buildings and improvements |
|
|
|
|
|
|
||
Machinery and equipment |
|
|
|
|
|
|
||
Office furniture, fixtures and equipment |
|
|
|
|
|
|
||
Automotive equipment |
|
|
|
|
|
|
||
Construction in progress |
|
|
|
|
|
|
||
Total |
|
|
|
|
|
|
||
Less accumulated depreciation |
|
|
( |
) |
|
|
( |
) |
Property, plant and equipment, net |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
The Company recognized depreciation expenses related to property and equipment of $
Substantially all of the Company’s assets are pledged as collateral with its lender banks.
9. Leases
The Company has operating leases for certain of its warehouses, manufacturing facilities, offices, cars, railcars and certain equipment. The lease term under such leases includes the non-cancellable period of the lease plus any additional periods covered by either an option to extend (or not terminate) that the Company is reasonably certain to exercise. The Company has leases with a lease term ranging from
The operating lease expense for the three months ended September 30, 2026 and 2025 was $
Other information related to operating leases were as follows:
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Cash paid for amounts included in the measurement of lease liabilities |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Right-of-use assets obtained in exchange for new liabilities |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Weighted-average remaining lease term (in years) |
|
|
|
|
Weighted-average discount rate |
|
|
% |
12
AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements – (Continued)
(In thousands, except share data)
(Unaudited)
Future minimum lease payments under non-cancellable operating leases as of September 30, 2026, were as follows:
2026 |
|
|
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
2029 |
|
|
|
|
2030 |
|
|
|
|
Thereafter |
|
|
|
|
Total lease payments |
|
$ |
|
|
Less: imputed interest |
|
|
( |
) |
Total |
|
$ |
|
|
Amounts recognized in the condensed consolidated balance sheet: |
|
|
|
|
Operating lease liabilities, current |
|
$ |
|
|
Operating lease liabilities, long-term |
|
$ |
|
|
10. Intangibles
The following schedule represents the gross carrying amount and accumulated amortization of intangible assets as of September 30, 2026, and December 31, 2025. Product rights and trademarks are amortized over the lesser of the useful life ranging from
|
|
September 30, 2026 |
|
|
December 31, 2025 |
|
||||||||||||||||||
|
|
Gross |
|
|
Accumulated |
|
|
Net Book |
|
|
Gross |
|
|
Accumulated |
|
|
Net Book |
|
||||||
Product rights, trademarks and patents |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Customer lists |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total intangibles assets |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Domestic intangible assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
International intangible assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total intangibles assets - domestic and international |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
The following schedule represents intangible assets activity for the nine months ended September 30, 2026:
|
|
Amount |
|
|
Intangible assets at January 1, 2026 |
|
$ |
|
|
Additions during Q1 2026 |
|
|
|
|
Impact of movement in exchange rates |
|
|
|
|
Amortization expense |
|
|
( |
) |
Intangible assets at March 31, 2026 |
|
$ |
|
|
Additions during Q2 2026 |
|
|
|
|
Impact of movement in exchange rates |
|
|
|
|
Amortization expense |
|
|
( |
) |
Intangible assets at June 30, 2026 |
|
$ |
|
|
Additions during Q3 2026 |
|
|
|
|
Impact of movement in exchange rates |
|
|
|
|
Amortization expense |
|
|
( |
) |
Intangible assets at September 30, 2026 |
|
$ |
|
|
|
|
|
|
|
13
AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements – (Continued)
(In thousands, except share data)
(Unaudited)
The following schedule represents future amortization charges related to intangible assets:
Year ending December 31, |
|
Amount |
|
|
2026 |
|
$ |
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
2029 |
|
|
|
|
2030 |
|
|
|
|
Thereafter |
|
|
|
|
|
|
$ |
|
|
During the three months ended September 30, 2026 and 2025, amortization expense was $
On September 30, 2026, the Company acquired assets relating to four product lines within the U.S. market and paid $
11. Debt
The Company had two term loans outstanding at September 30, 2026. At December 31, 2025, the Company had a revolving line of credit.
Long-term indebtedness ($000's) |
|
September 30, 2026 |
|
|
December 31, 2025 |
|
||
Current portion of long-term debt |
|
$ |
|
|
$ |
|
||
Long-term debt, net of current portion |
|
|
|
|
|
|
||
Unamortized debt discount and debt issuance costs |
|
|
( |
) |
|
|
( |
) |
Total indebtedness, net of unamortized debt discount and debt issuance costs |
|
$ |
|
|
$ |
|
||
At September 30, 2026, long-term debt is related to two term loans that were put in place on March 13, 2026, and the balance is presented net of unamortized debt discount and debt issuance costs on the condensed consolidated balance sheets. At December 31, 2025, the Company had a revolving line of credit and the related unamortized debt issuance costs are included in prepaid expenses on the condensed consolidated balance sheets.
On March 13, 2026, AMVAC Chemical Corporation (“AMVAC”), a subsidiary of the Company, as borrower, and certain affiliates of the Company (including the Company), as guarantors, entered into (i) a Credit and Guaranty Agreement (the “First Lien Term Loan”) with a group of commercial lenders led by Centerbridge Partners, L.P., and Wilmington Trust, National Association as administrative agent; (ii) a Credit and Guaranty Agreement (the “Second Lien Term Loan” and, together with the First Lien Term Loan, the “Term Loans”) with a group of commercial lenders led by BMO Bank N.A., as sole lead arranger and book runner, and BMO Bank N.A. as administrative agent; and (iii) an Intercreditor Agreement by and among Wilmington Trust, National Association, as first lien agent, BMO Bank N.A., as second lien agent, and the secured creditors from time to time party thereto. The proceeds of the Term Loans, were used, among other things, to refinance in full and retire existing indebtedness under the Third Amended and Restated Credit Agreement, dated as of August 5, 2021, to pay related fees and expenses, and will also be used for other general corporate and working capital purposes permitted under the Term Loans.
First Lien Term Loan
The First Lien Term Loan is a senior secured term loan facility with a five year term for an aggregate principal amount of $
14
AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements – (Continued)
(In thousands, except share data)
(Unaudited)
original principal amount. The unpaid principal amount shall be due and payable in full on the maturity date. AMVAC is required to make mandatory prepayments of the First Lien Term Loan in certain circumstances (e.g. the disposition of certain collateralized assets) and is permitted to make voluntary prepayments subject to payment of an applicable prepayment premium during the first 48 months following closing, in each case, in accordance with the terms of the First Lien Term Loan. Interest is based on a specified benchmark rate (including, as applicable, a Secured Overnight Financing Rate (“SOFR”)-based rate) plus an applicable margin initially equal to
The Company is also subject to a consolidated total leverage ratio at the end of each quarterly period, with calculation terms defined under the First Lien Term Loan, of the funded indebtedness of the consolidated group to consolidated EBITDA for the trailing twelve months that shall not be greater than
Second Lien Term Loan
The Second Lien Term Loan is a secured term loan facility with a five-year term for an aggregate principal amount of $
Pursuant to the terms of the First Lien Term Loan and Second Lien Term Loan, the Company is prevented from paying cash dividends to shareholders.
The weighted average interest rate for the three and nine months ended September 30, 2026 was
As of September 30, 2026, the Company is in compliance with its financial covenants.
15
AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(In thousands, except share data)
(Unaudited)
12. Commitments and Contingencies
The Company records a liability on its condensed consolidated financial statements for loss contingencies when a loss is known or considered probable, and the amount can be reasonably estimated. When determining the estimated loss or range of loss, significant judgment is required to estimate the amount and timing of a loss to be recorded. The Company recognizes legal expenses in connection with loss contingencies as incurred. Except as otherwise described below, there have been no material changes in previously reported litigation matters since the filing of the Company's Form 10-K for the period ended December 31, 2025, or the filings of the Company’s Form 10-Q for the periods ended March 31, 2026 and June 30, 2026:
Chavez & Marquinez. Two cases were filed independently in 2012 in Louisiana and Delaware involving claims on behalf of banana workers for personal injury allegedly arising from exposure to DBCP in the late 1970’s. Through several years of law and motion practice, the number of plaintiffs in the actions has been reduced from about
13. Accumulated Other Comprehensive Loss
The following table lists the beginning balance, activity and ending balance of foreign currency translation adjustment included as a component of accumulated other comprehensive loss:
|
|
Total |
|
|
Balance, January 1, 2026 |
|
$ |
( |
) |
Foreign currency translation adjustment, net of tax effects of ($ |
|
|
|
|
Balance, March 31, 2026 |
|
$ |
( |
) |
Foreign currency translation adjustment, net of tax effects of ($ |
|
|
|
|
Balance, June 30, 2026 |
|
$ |
( |
) |
Foreign currency translation adjustment, net of tax effects of ($ |
|
|
( |
) |
Balance, September 30, 2026 |
|
$ |
( |
) |
|
|
|
|
|
|
|
|
|
|
Balance, January 1, 2025 |
|
$ |
( |
) |
Foreign currency translation adjustment, net of tax effects of ($ |
|
|
|
|
Balance, March 31, 2025 |
|
$ |
( |
) |
Foreign currency translation adjustment, net of tax effects of ($ |
|
|
|
|
Balance, June 30, 2025 |
|
$ |
( |
) |
Foreign currency translation adjustment, net of tax effects of ($ |
|
|
|
|
Balance, September 30, 2025 |
|
$ |
( |
) |
|
|
|
|
|
16
AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(In thousands, except share data)
(Unaudited)
14. Fair Value of Financial Instruments
The accounting standard for fair value measurements provides a framework for measuring fair value and requires expanded disclosures regarding fair value measurements. Fair value is defined as the price that would be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. This accounting standard establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs, where available. The following summarizes the three levels of inputs required:
15.
|
|
For the Nine Months Ended September 30, |
|
|||||
Cash paid during the period: |
|
2026 |
|
|
2025 |
|
||
Interest |
|
$ |
|
|
$ |
|
||
Income taxes, net of refunds |
|
$ |
( |
) |
|
$ |
|
|
Non-cash transactions: |
|
|
|
|
|
|
||
Debt refinancing |
|
$ |
|
|
$ |
|
||
Acquisition of product lines and inventory |
|
$ |
|
|
$ |
|
||
Additions to debt issuance costs |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
|
|
As of September 30, |
|
|||||
Reconciliation of unrestricted cash and restricted cash reported in the condensed consolidated balance sheets |
|
2026 |
|
|
2025 |
|
||
Unrestricted cash |
|
$ |
|
|
$ |
|
||
Restricted cash |
|
|
|
|
|
|
||
Total cash |
|
$ |
|
|
$ |
|
||
The Company maintains cash balances that exceed federally insured limits with a number of financial institutions. Cash includes legally restricted deposits held as compensating balances against the credit limit of one of the Company’s credit cards.
17
AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(In thousands, except share data)
(Unaudited)
16. Segment Reporting
The Company operates as a single operating segment, which is the business of developing, manufacturing and distributing chemical, biological and biorational products for agricultural, commercial and consumer uses. The Company synthesizes and formulates chemicals and ferments and extracts microbial products for crops, turf, ornamental plants, and human and animal health protection.
The Company’s Chief Operating Decision Maker (“CODM”) is the Chief Executive Officer, who manages the Company’s operations based on consolidated financial information for purposes of evaluating financial performance and allocating resources. The financial information reviewed by the CODM includes revenue by product line and region, and key expense categories that are regularly provided for the consolidated company. The accounting policies of the Company’s single operating segment are the same as those described in the summary of significant accounting policies. Although there are other measures of operating performance used by the CODM, the Company concluded that consolidated operating (loss) income is the measure required to be disclosed as the segment measure of profit or loss. Operating (loss) income is utilized to evaluate to monitor budget versus actual results in order to gain more depth and understanding of the factors driving the business.
|
|
For the Three Months Ended September 30, |
|
|
For the Nine Months Ended September 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Net sales |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Cost of sales |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Material and other costs |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Warehousing, handling, and outbound freight |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Total cost of sales |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Gross profit |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Selling, general and administrative |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Research, product development and regulatory |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Product liability claims |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
CFO transition costs |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
Transformation |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Asset impairments |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
(Loss) gain from sale of assets |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
Operating loss |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Change in fair value of an equity investment |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Interest expense, net |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Loss before provision for income taxes |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Income tax expense |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Net loss |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
18
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Numbers in thousands)
Forward-Looking Statements/Risk Factors:
The Company, from time-to-time, may discuss forward-looking statements including assumptions concerning the Company’s operations, future results and prospects. Generally, “may,” “could,” “will,” “would,” “expect,” “believe,” “estimate,” “anticipate,” “intend,” “continue” and similar words identify forward-looking statements. Forward-looking statements appearing in this report are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on our current expectations and are subject to risks and uncertainties that can cause actual results and events to differ materially from those set forth in or implied by the forward-looking statements and related assumptions contained in the entire report. Such factors include, but are not limited to: product demand and market acceptance risks; the effect of economic conditions; weather conditions; military activity and other geopolitical activity; fuel and freight cost increases arising from geopolitical turmoil; the imposition and removal of tariffs; changes in regulatory policy; the impact of competitive products and pricing; changes in foreign exchange rates; product development and commercialization difficulties; capacity and supply constraints or difficulties; availability of capital resources given that interest rate and inflation affect the debt market; and general business regulations, including taxes and other risks as detailed from time-to-time in the Company’s reports and filings filed with the U.S. Securities and Exchange Commission (“SEC”). It is not possible to foresee or identify all such factors. We urge you to consider these factors carefully in evaluating the forward-looking statements contained in this report. You should evaluate all forward-looking statements made in this Form 10-Q in the context of the risks and uncertainties disclosed in Part II, Item 1A of this Form 10-Q under the heading "Risk Factors," in Part I, Item 2 "Management's Discussion and Analysis of Financial Condition and Results of Operations," and in Item 3 "Quantitative and Qualitative Disclosures About Market Risk."
The forward-looking statements included in this Form 10-Q are made only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law. If we do update one or more forward-looking statements, no inference should be made that we will make additional updates with respect to those or other forward-looking statements.
Three Months Ended September 30, 2026 and 2025:
Overview of the Company’s Performance
Even with modest increases in row crop commodity prices, farm income was down due to significant increases in diesel fuel and fertilizer expenses. Further, U.S. government payments to growers as a percentage of income rose from about 25% to over 40%. With increasing cost of capital and uncertainty on international demand (e.g., from China), U.S. growers and the distribution channel have continued to follow conservative procurement practices, buying goods closer to time-of-need and minimizing carrying costs The non-crop, Specialty products markets (e.g., big box stores, professional applicators) have followed a similar procurement pattern. Meanwhile, the Company’s international markets have softened due to weather conditions occasioned by El Niño. As a consequence, on a consolidated basis, the Company’s financial performance declined with respect to both net sales and profitability in the period. The fourth quarter has historically been an important period for the Company’s annual results. Based upon the magnitude of customer prepayments received in the aggregate in 2026 and recent sales-planning discussions with certain key customers, the Company anticipates that fourth quarter results may represent a meaningful portion of full-year performance. However, the timing and volume of customer purchases, pricing, weather conditions, and freight and raw material costs remain uncertain.
Overall net sales during the quarter declined by 9% over the comparable period last year. This performance included decreases in net sales of both U.S. Crop and U.S. Specialty (both down 2%) and International business (down 17%). With lower sales, gross profit decreased 23% quarter-over-quarter. Further, with increased freight costs, due primarily to an 80% increase in diesel cost, and higher raw material prices also driven by oil prices, partially offset by strong manufacturing performance, gross margin percentages ended at 24% for the third quarter of 2026, as compared to 29% in the same quarter of the prior year.
The Company reduced its operating expenses by 16% compared to the same quarter of the prior year, operating expenses as a percentage of net sales improved to 32% from 34% compared to the same quarter of the prior year. Research, product development and regulatory expenses declined by 6%, and general and administrative expenses declined by 12%, which was partially offset by an increase in selling expenses by 8%.
Interest expense, net, increased by $4,226 due to increased borrowing under the new debt structure and the comparatively higher effective interest rate (consisting of the First Lien Term Loan and Second Lien Term Loan), that was put into place on March 13, 2026.
19
Results of Operations
|
|
For the Three Months Ended September 30, |
|
|
|
|
|
|
|
|||||||
|
|
2026 |
|
|
2025 |
|
|
Change |
|
|
% Change |
|
||||
Net sales: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. Crop |
|
$ |
42,316 |
|
|
$ |
43,310 |
|
|
$ |
(994 |
) |
|
|
-2 |
% |
U.S. Specialty |
|
|
18,872 |
|
|
|
19,233 |
|
|
|
(361 |
) |
|
|
-2 |
% |
Total U.S. |
|
|
61,188 |
|
|
|
62,543 |
|
|
|
(1,355 |
) |
|
|
-2 |
% |
International |
|
|
47,188 |
|
|
|
56,770 |
|
|
|
(9,582 |
) |
|
|
-17 |
% |
Total net sales |
|
$ |
108,376 |
|
|
$ |
119,313 |
|
|
$ |
(10,937 |
) |
|
|
-9 |
% |
Total cost of sales |
|
$ |
(82,124 |
) |
|
$ |
(85,099 |
) |
|
$ |
2,975 |
|
|
|
-3 |
% |
Total gross profit |
|
$ |
26,252 |
|
|
$ |
34,214 |
|
|
$ |
(7,962 |
) |
|
|
-23 |
% |
Total gross margin |
|
|
24 |
% |
|
|
29 |
% |
|
|
|
|
|
|
||
Our domestic Crop business recorded net sales during the third quarter of 2026 that were 2% lower than those of the third quarter of 2025. Performance across the portfolio was mixed. The decrease was driven largely by reduced demand for soil fumigants, the nematicide, Aztec® and the cotton insecticide, Bidrin®. These decreases were partially offset by stronger sales of our granular soil insecticide, Thimet®, our cotton defoliant, Folex®, and direct business-to-business sales from the U.S. Crop business to certain foreign customers (as part of our organization restructuring)
Our domestic Specialty business experienced a 2% decline in net sales over the third quarter. Overall, lower sales were driven primarily by a shift in inventory stocking dynamics affecting our turf and ornamental portfolio as well as reduced demand for insect growth regulators. These decreases were partially offset by stronger sales of our turf fungicide product and our mosquito adulticide, Naled®.
Net sales of our international businesses decreased by 17% during the period. This decline arose primarily from poor weather conditions in Mexico and Central American due to El Niño effect. In addition, certain direct business-to-business sales are now managed by the US crop business as part of our drive for improved operational efficiency. These decreases were partially offset by increased sales of soil fumigants and expansion of our business in Ecuador, where commercial operations are expanding.
On a consolidated basis, gross profit for the third quarter of 2026 decreased by 23% as compared to the third quarter of 2025, due largely to decreased sales volume, increased freight costs and raw material costs, partially offset by better manufacturing performance.
While operating expenses decreased on both an absolute level, $34,217 for the third quarter of 2026, compared to $40,719 for the third quarter of 2025; and as a percentage of net sales, 32% for the third quarter of 2026, compared to 34% for the third quarter of 2025, with lower gross profit, the Company recorded an operating loss of $7,965 for the third quarter of 2026, compared to $6,505 for the third quarter of 2025. Significantly higher net interest expense of $9,146 for the third quarter of 2026, compared to $4,920 for the third quarter of 2025, resulted in a net loss of $17,668 for the third quarter of 2026, compared to $12,358 for the third quarter of 2025.
20
The change in operating expenses by department is as follows:
|
|
For the Three Months Ended September 30, |
|
|
|
|
|
|
|
|||||||
|
|
2026 |
|
|
2025 |
|
|
Change |
|
|
% Change |
|
||||
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Selling |
|
$ |
12,023 |
|
|
$ |
11,142 |
|
|
$ |
881 |
|
|
|
8 |
% |
General and administrative |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other |
|
|
10,742 |
|
|
|
12,540 |
|
|
|
(1,798 |
) |
|
|
-14 |
% |
Amortization |
|
|
3,032 |
|
|
|
3,065 |
|
|
|
(33 |
) |
|
|
-1 |
% |
Research, product development and regulatory |
|
|
5,342 |
|
|
|
5,654 |
|
|
|
(312 |
) |
|
|
-6 |
% |
Product liability claims |
|
|
22 |
|
|
|
7,029 |
|
|
|
(7,007 |
) |
|
|
-100 |
% |
CFO transition costs |
|
|
1,316 |
|
|
|
— |
|
|
|
1,316 |
|
|
|
100 |
% |
Transformation |
|
|
1,665 |
|
|
|
1,442 |
|
|
|
223 |
|
|
|
15 |
% |
Asset impairments |
|
|
— |
|
|
|
93 |
|
|
|
(93 |
) |
|
|
-100 |
% |
Loss (gain) on sale of assets |
|
|
75 |
|
|
|
(246 |
) |
|
|
321 |
|
|
|
-130 |
% |
Total |
|
$ |
34,217 |
|
|
$ |
40,719 |
|
|
$ |
(6,502 |
) |
|
|
-16 |
% |
|
|
For the Three Months Ended September 30, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Consulting and strategic advisory services |
|
$ |
715 |
|
|
$ |
673 |
|
Other termination and retention costs |
|
|
204 |
|
|
|
451 |
|
IT implementations |
|
|
52 |
|
|
|
318 |
|
Plant reorganization costs |
|
|
226 |
|
|
|
— |
|
Other |
|
|
468 |
|
|
|
— |
|
Total |
|
$ |
1,665 |
|
|
$ |
1,442 |
|
|
|
|
|
|
|
|
||
Transformation costs related to the Company’s digital and structural transformation project and manufacturing footprint optimization increased for the three months ended September 30, 2026, as compared to the same period of the prior year.
21
Average Indebtedness and Interest expense
Interest costs are summarized in the following table:
|
|
For the Three Months Ended September 30, 2026 |
|
|
For the Three Months Ended September 30, 2025 |
|
||||||||||||||||||
|
|
Average |
|
|
Interest |
|
|
Interest |
|
|
Average |
|
|
Interest |
|
|
Interest |
|
||||||
Average indebtedness |
|
$ |
285,119 |
|
|
$ |
8,353 |
|
|
|
11.7 |
% |
|
$ |
209,575 |
|
|
$ |
4,315 |
|
|
|
8.2 |
% |
Amortization of deferred loan fees |
|
|
— |
|
|
|
1,120 |
|
|
|
— |
|
|
|
— |
|
|
|
597 |
|
|
|
— |
|
Other interest income |
|
|
— |
|
|
|
(271 |
) |
|
|
— |
|
|
|
— |
|
|
|
24 |
|
|
|
— |
|
Subtotal |
|
$ |
285,119 |
|
|
$ |
9,202 |
|
|
|
12.9 |
% |
|
$ |
209,575 |
|
|
$ |
4,936 |
|
|
|
9.4 |
% |
Capitalized interest |
|
|
— |
|
|
|
(56 |
) |
|
|
— |
|
|
|
— |
|
|
|
(16 |
) |
|
|
— |
|
Total |
|
$ |
285,119 |
|
|
$ |
9,146 |
|
|
|
12.8 |
% |
|
$ |
209,575 |
|
|
$ |
4,920 |
|
|
|
9.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
The Company's borrowings in the three months ended September 30, 2026, were higher compared to the same period of the prior year, mainly as a result of the new debt structure put into place on March 13, 2026. The Company refinanced its revolving credit line with a term loan structure that resulted in an increase in the effective interest rate.
Income tax expense was $536 for the three months ended September 30, 2026, as compared to $422 for the three months ended September 30, 2025. The effective income tax rate for the three months ended September 30, 2026, was computed based on the estimated effective tax rate for the full year which is approximately 17%, excluding discrete items and entities subject to full valuation allowances against related net deferred tax assets. The Company continues to maintain valuation allowances established against the net deferred tax assets of the U.S. and certain international entities, primarily in Brazil, for the three months ended September 30, 2026. During the three months ended September 30, 2026, several of the Company’s international businesses outside of Brazil were profitable, resulting in an income tax expense.
Our overall net loss for the three months ended September 30, 2026 was $17,668 or ($0.61) per basic and diluted share, as compared to net loss of $12,358 or ($0.43) per basic and diluted share in the same quarter of 2025.
Nine Months Ended September 30, 2026 and 2025:
Overview of the Company’s Performance
The domestic crop protection market for the nine months ended September 30, 2026, was stable; channel inventories were low, and demand was generally consistent with seasonal need. First half performance of the Company’s Crop business was more resilient than that of the third quarter, as the farm economy continued to endure the more prolonged effects of higher fuel and fertilizer cost, cost of capital and market uncertainty. Similarly, the domestic Specialty market was strong through the first half of 2026 and declined slightly during the third quarter. By contrast, in the face of adverse weather and increased raw materials prices, the International markets were not as strong. On a consolidated basis, the Company’s net sales performance for the nine months ended September 30, 2026 was down modestly as compared to the same period during the prior year. The fourth quarter has historically been an important period for the Company’s annual results. Based upon the magnitude of customer prepayments received in the aggregate in 2026 and recent sales-planning discussions with certain key customers, the Company anticipates that fourth quarter results may represent a meaningful portion of full-year performance. However, the timing and volume of customer purchases, pricing, weather conditions, and freight and raw material costs remain uncertain.
The Company’s consolidated net sales for the nine months ended September 30, 2026 declined by 4%, as compared to the same period of the prior year. This performance included U.S. Crop sales that were up 3%, U.S. Specialty net sales up 6%, and International net sales down 14%. Gross profit declined by 5% and the gross margin percentage ended at 29% for both the nine months ended September 30, 2026 and the same period of the prior year.
The Company reduced its operating expenses by approximately 5% and, when expressed as a percentage of net sales, improved to 30% compared to 31% during the same period a year ago. Within operating expenses, selling expenses increased by 1%, general and administrative expenses decreased by approximately 4%, and research, product development and regulatory expenses were flat.
Interest expense, net, increased $10,931 due to increased borrowing and the comparatively higher effective interest rate under the new debt structure (consisting of the First Lien Term Loan and Second Lien Term Loan), that was put into place on March 13, 2026.
22
Results of Operations
|
|
For the Nine Months Ended September 30, |
|
|
|
|
|
|
|
|||||||
|
|
2026 |
|
|
2025 |
|
|
Change |
|
|
% Change |
|
||||
Net sales: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. Crop |
|
$ |
157,510 |
|
|
$ |
153,511 |
|
|
$ |
3,999 |
|
|
|
3 |
% |
U.S. Specialty |
|
|
57,045 |
|
|
|
54,067 |
|
|
|
2,978 |
|
|
|
6 |
% |
Total U.S. |
|
|
214,555 |
|
|
|
207,578 |
|
|
|
6,977 |
|
|
|
3 |
% |
International |
|
|
134,143 |
|
|
|
156,848 |
|
|
|
(22,705 |
) |
|
|
-14 |
% |
Total net sales |
|
$ |
348,698 |
|
|
$ |
364,426 |
|
|
$ |
(15,728 |
) |
|
|
-4 |
% |
Total cost of sales |
|
$ |
(249,316 |
) |
|
$ |
(259,474 |
) |
|
$ |
10,158 |
|
|
|
-4 |
% |
Total gross profit |
|
$ |
99,382 |
|
|
$ |
104,952 |
|
|
$ |
(5,570 |
) |
|
|
-5 |
% |
Total gross margin |
|
|
29 |
% |
|
|
29 |
% |
|
|
|
|
|
|
||
Our domestic crop business recorded net sales during the nine months ended September 30, 2026 that were 3% higher than those of the comparable period of 2025, due to improved industry demand for the Company’s Impact herbicide, soil insecticides Thimet and Mocap and, to a lesser extent, the Company’s biologicals portfolio. These increases were partially offset by declines in sales of our Bidrin cotton insecticide, Counter nematicide, Aztec corn soil insecticide, and soil fumigants and as the result of certain direct business-to-business sales that are now managed by the U.S. Crop business as part of our drive for improved operational efficiency.
Our domestic Specialty business posted a 6% increase in net sales in the nine months ended September 30, 2026, as compared to the same period of 2025, driven by continued strong demand for our Naled mosquito adulticide and other Specialty products.
Net sales of our international businesses decreased by 14% during the nine months ended September 30, 2026, as compared to the same period of 2025. Poor weather conditions in Central America slowed sales in the nine-month period. In addition, certain direct business-to-business sales are now managed by the U.S. crop business as part of our drive for improved operational efficiency. These decreases were partially offset by improved sales in Ecuador, arising from the Company’s launch of Mocap for use on bananas, as well as in Australia, with the registration of our fungicide on cereals. In addition, certain direct business-to-business sales are now managed by the US crop business as part of our drive for improved operational efficiency.
On a consolidated basis, gross profit for the nine months ended September 30, 2026 declined by 5%, as compared to the same period of the prior year. Gross margin for the nine months ended September 30, 2026 was flat at 29%, as compared to the same period of the prior year.
23
The change in operating expenses by department is as follows:
|
|
For the Nine Months Ended September 30, |
|
|
|
|
|
|
|
|||||||
|
|
2026 |
|
|
2025 |
|
|
Change |
|
|
% Change |
|
||||
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Selling |
|
$ |
33,711 |
|
|
$ |
33,498 |
|
|
$ |
213 |
|
|
|
1 |
% |
General and administrative |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other |
|
|
37,236 |
|
|
|
39,320 |
|
|
|
(2,084 |
) |
|
|
-5 |
% |
Amortization |
|
|
9,094 |
|
|
|
9,180 |
|
|
|
(86 |
) |
|
|
-1 |
% |
Legal reserves |
|
|
92 |
|
|
|
— |
|
|
|
92 |
|
|
|
100 |
% |
Research, product development and regulatory |
|
|
17,097 |
|
|
|
17,139 |
|
|
|
(42 |
) |
|
|
- |
% |
Product liability claims |
|
|
223 |
|
|
|
7,029 |
|
|
|
(6,806 |
) |
|
|
-97 |
% |
CFO transition costs |
|
|
1,316 |
|
|
|
— |
|
|
|
1,316 |
|
|
|
100 |
% |
Transformation |
|
|
5,975 |
|
|
|
5,254 |
|
|
|
721 |
|
|
|
14 |
% |
Asset impairments |
|
|
943 |
|
|
|
227 |
|
|
|
716 |
|
|
|
315 |
% |
Loss (gain) on sale of assets |
|
|
75 |
|
|
|
(246 |
) |
|
|
321 |
|
|
|
-130 |
% |
Total |
|
$ |
105,762 |
|
|
$ |
111,401 |
|
|
$ |
(5,639 |
) |
|
|
-5 |
% |
|
|
For the Nine Months Ended September 30, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Consulting and strategic advisory services |
|
$ |
802 |
|
|
$ |
1,822 |
|
Other termination and retention costs |
|
|
1,081 |
|
|
|
1,618 |
|
Transformation related employee costs |
|
|
63 |
|
|
|
— |
|
IT implementations |
|
|
60 |
|
|
|
1,011 |
|
Plant reorganization costs |
|
|
3,341 |
|
|
|
— |
|
Legal and regulatory expense |
|
|
— |
|
|
|
711 |
|
Other |
|
|
628 |
|
|
|
92 |
|
Total |
|
$ |
5,975 |
|
|
$ |
5,254 |
|
Transformation costs related to the Company’s digital and structural transformation project and manufacturing footprint optimization increased during the nine months ended September 30, 2026, as compared to the same period of the prior year. The Company expects that these costs will decrease over time.
24
Average Indebtedness and Interest expense
Interest costs are summarized in the following table:
|
|
For the Nine Months Ended September 30, 2026 |
|
|
For the Nine Months Ended September 30, 2025 |
|
||||||||||||||||||
|
|
Average |
|
|
Interest |
|
|
Interest |
|
|
Average |
|
|
Interest |
|
|
Interest |
|
||||||
Average indebtedness |
|
$ |
261,293 |
|
|
$ |
21,737 |
|
|
|
11.1 |
% |
|
$ |
197,097 |
|
|
$ |
11,974 |
|
|
|
8.1 |
% |
Amortization of deferred loan fees |
|
|
— |
|
|
|
2,899 |
|
|
|
— |
|
|
|
— |
|
|
|
1,167 |
|
|
|
— |
|
Other interest income |
|
|
— |
|
|
|
(427 |
) |
|
|
— |
|
|
|
— |
|
|
|
39 |
|
|
|
— |
|
Subtotal |
|
$ |
261,293 |
|
|
$ |
24,209 |
|
|
|
12.4 |
% |
|
$ |
197,097 |
|
|
$ |
13,180 |
|
|
|
8.9 |
% |
Capitalized interest |
|
|
— |
|
|
|
(143 |
) |
|
|
— |
|
|
|
— |
|
|
|
(45 |
) |
|
|
— |
|
Total |
|
$ |
261,293 |
|
|
$ |
24,066 |
|
|
|
12.3 |
% |
|
$ |
197,097 |
|
|
$ |
13,135 |
|
|
|
8.9 |
% |
The Company’s borrowings during the nine months ended September 30, 2026 were higher when compared to the same period of the prior year, mainly as a result of the new debt structure put into place on March 13, 2026. The Company refinanced its revolving credit line with a term loan structure that resulted in an increase in the effective interest rate.
Income tax expense was $1,043 for the nine months ended September 30, 2026, as compared to $1,574 for the nine months ended September 30, 2025. The effective income tax rate for the nine months ended September 30, 2026 was computed based on the estimated effective tax rate for the full year which is approximately 17%, excluding discrete items and entities subject to full valuation allowances against related net deferred tax assets. The Company continues to maintain valuation allowances established against the net deferred tax assets of the U.S. and certain international entities, primarily in Brazil, for the nine months ended September 30, 2026. During the nine months ended September 30, 2026, several of the Company’s international businesses outside of Brazil were profitable, resulting in an income tax expense.
Our overall net loss for the nine months ended September 30, 2026 was $31,682 or ($1.10) per basic and diluted share, as compared to net loss of $21,669 or ($0.76) per basic and diluted share in the nine months ended September 30, 2025.
Liquidity and Capital Resources
The following table presents selected data from our condensed consolidated statements of cash flows for the periods presented:
|
|
For the Nine Months Ended September 30, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Net cash used in operating activities |
|
$ |
(12,346 |
) |
|
$ |
(27,144 |
) |
Net cash used in investing activities |
|
|
(9,815 |
) |
|
|
(2,042 |
) |
Net cash provided by financing activities |
|
|
93,669 |
|
|
|
32,062 |
|
Net increase in cash |
|
|
71,508 |
|
|
|
2,876 |
|
Effect of exchange rate changes on cash and cash equivalents |
|
|
(24 |
) |
|
|
1,405 |
|
Cash at beginning of period |
|
|
12,425 |
|
|
|
12,514 |
|
Cash at end of period |
|
$ |
83,909 |
|
|
$ |
16,795 |
|
|
|
|
|
|
|
|
||
The Company used cash of $12,346 in operating activities during the nine months ended September 30, 2026, as compared to $27,144 during the nine months ended September 30, 2025. Included in the $12,346 are net loss of $31,682, plus non-cash depreciation, amortization of intangibles and other assets in the amount of $13,447, provision for bad debts in the amount of $2,469, stock compensation in the amount of $901 and amortization of deferred loan fees in the amount of $2,899. Also included are a net change in deferred income taxes of $1,073, and change in liabilities for uncertain tax positions or unrecognized tax benefits of $127 and changes in lease obligations and non-cash lease expense in the amount of $120. These together resulted in a cash outflow of $10,571, as compared to an outflow of $4,031 for the same period of 2025.
During the nine months ended September 30, 2026, the Company increased net working capital by $60,093, as compared to an increase of $29,758 during the same period of the prior year. The biggest driver of the increase was the restructuring of the Company’s debt which resulted in a cash inflow of $68,419 which is included in the change in working capital. In addition, accounts receivable decreased by $14,812, as compared to a decrease by $935 in the same period of 2025. This change was mainly driven by lower sales and a shift to net pricing in 2026 compared to 2025. Inventories increased by $16,007, as compared to an increase of $16,513 during
25
the same period of 2025. Customer prepayments increased by $11,527, as compared to a decrease of $21,453 in the same period of 2025, driven by customers’ decisions regarding the amount of prepayments they made in 2026 compared to the same period of 2025. Accrued program costs decreased by $5,454, as compared to an increase of $12,285 in the prior year, as a result of timing of customers purchases, program simplification, and the mix of sales. Our accounts payable balances decreased by $960, as compared to an increase of $11,859 in the same period of 2025. Prepaid expenses and other assets increased by $1,039, as compared to an increase of $965 in the same period of 2025. Income tax receivable and payable, net changed by $3,526 as compared to $1,083 in the prior year. Finally, other payables and accrued expenses decreased by $8,180, as compared to a decrease of $8,178 in the prior year.
With regard to our program accrual, the increase primarily reflects our initiatives to simplify customer programs, and as a result of the level and mix of sales and customers in the nine months ended September 30, 2026, as compared to the prior year. The Company accrues programs in line with the growing season upon which specific products are targeted. Typically crop products have a growing season that ends on September 30th of each year. During the nine months ended September 30, 2026, the Company made accruals for programs in the amount of $27,742 and made payments in the amount of $32,644. During the comparable period of the prior year, the Company made accruals in the amount of $52,852 and payments in the amount of $40,567.
Cash used for investing activities was $9,815 for the nine months ended September 30, 2026, as compared to $2,042 for the nine months ended September 30, 2025. The Company spent $4,676 on fixed assets purchases primarily focused on its manufacturing infrastructure.
During the nine months ended September 30, 2026, financing activities provided $93,669, as compared to $32,062 during the same period of the prior year. Net borrowings under the Company's debt structure amounted to $109,875 during the nine months ended September 30, 2026, as compared to $34,919 during the same period of the prior year. As previously noted, this was driven by the retirement of the pre-existing revolving line of credit and replacement by two term loans. The Company made payments in the amount of $16,581 relating to loan fees. Lastly, in exchange for shares of common stock returned by employees, we paid $99 and $147 for tax withholdings on stock-based compensation awards during the nine months ended September 30, 2026 and 2025, respectively.
As of September 30, 2026 our debt structure includes two term loans. As of December 31, 2025, our debt structure included a senior credit facility. The debt structure is summarized in the following table:
Long-term indebtedness |
|
September 30, 2026 |
|
|
December 31, 2025 |
|
||
Current portion of long-term debt |
|
$ |
3,750 |
|
|
$ |
— |
|
Long-term debt, net of current portion |
|
|
281,288 |
|
|
|
174,000 |
|
Unamortized debt discount and debt issuance costs |
|
|
(17,351 |
) |
|
|
(3,015 |
) |
Total indebtedness |
|
$ |
267,687 |
|
|
$ |
170,985 |
|
As of September 30, 2026, the Company was in compliance with its financial covenants.
We believe that anticipated cash flow from operations and existing cash balances will be sufficient to provide us with liquidity necessary to fund our working capital and cash requirements for the next twelve months. The Company’s ability to remain in compliance with the leverage covenant under its First Lien Term Loan depends on generating significant adjusted EBITDA during the fourth quarter of 2026.
Recently Issued Accounting Guidance
Please refer to Note 1 in the accompanying Notes to the Condensed Consolidated Financial Statements for recently issued and adopted accounting standards.
Critical Accounting Policies and Estimates
The Company continually re-assesses the critical accounting policies used in preparing its financial statements. In the Company’s Form 10-K filed with the SEC for the year ended December 31, 2025, the Company provided a comprehensive statement of critical accounting policies. These policies have been reviewed in detail as part of the preparation work for this Form 10-Q. After our review of these matters, we have determined that, during the subject reporting period there has been no material change to the critical accounting policies that are listed in the Company’s Form 10-K for the year ended December 31, 2025.
26
Item 3. Quantitative and Qualitative Disclosures About Market Risk
The Company is primarily exposed to changes in interest rates related to its borrowing activities. The Company’s indebtedness to its primary lenders is evidenced by two term loans with variable rates of interest, which fluctuate with changes in the lenders' reference rate (SOFR). An increase or decrease in interest rates by 25 bps would impact the Company’s net loss by approximately $712 based on the Company’s currently outstanding principal balance of approximately $285,000.
The Company faces market risk to the extent that changes in foreign currency exchange rates affect our non-U.S. dollar functional currency as to foreign subsidiaries’ revenues, expenses, assets and liabilities. The Company currently does not engage in hedging activities with respect to such exchange rate risks.
Assets and liabilities outside the U.S. are located in regions where the Company has subsidiaries or joint ventures: Central America, South America, North America, Europe, Asia, and Australia. The Company’s investments in foreign subsidiaries and joint ventures with a functional currency other than the U.S. dollar are generally considered long-term. Accordingly, the Company does not hedge these net investments.
For more information, please refer to the applicable disclosures in the Company’s Form 10-K filed with the SEC for the year ended December 31, 2025.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
As of September 30, 2026, the Company has a comprehensive set of disclosure controls and procedures designed to ensure that all information required to be disclosed in our filings under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures. As of September 30, 2026, the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, has concluded, based on their evaluation, that the Company’s disclosure controls and procedures are effective to provide reasonable assurance of the achievement of the objectives described above. There were no changes in the Company’s internal controls over financial reporting that occurred during the most recent quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.
27
Part II. Other Information
The Company was not required to report any matters or changes for any items of Part II except as disclosed below.
Item 1. Legal Proceedings
Please refer to Note 12 in the accompanying Notes to the Condensed Consolidated Financial Statements for legal updates.
Item 1A. Risk Factors
The Company continually re-assesses the business risks, and as part of that process detailed a range of risk factors in the disclosures in American Vanguard’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed on March 16, 2026. There have been no material changes in our risk factors as of September 30, 2026, except as follows:
Continued military activity in the Middle East has significantly increased fuel and freight costs domestically. The interruption of shipping lanes and the attendant interference with the supply of oil from the Middle East arising from regional military activity has significantly increased fuel prices and, consequentially, freight costs for the Company particularly with respect to liquid products that are shipped in bulk. These increases have eroded the Company’s profit margin in a number of products. There is no guarantee that the geopolitical situation giving rise to these increased costs will end any time soon. Nor is there any guarantee that the Company, through price increases or other measures, will be able to return to higher profit margins for these products. In short, it is possible that, if these conditions persist, the Company’s earnings could continue to be adversely affected.
The development of Agentic AI tools may overtake the efficacy of available cybersecurity defense tools and, as such, could put the Company’s computing systems at risk. Fueled by enormous investment and activity from competing global developers, agentic AI solutions are evolving at a rapid pace and becoming increasingly powerful. By contrast, cybersecurity defense tools are evolving at a slower rate and are largely configured to defend against traditional, pre-agentic AI threats. Thus, it is possible that the strength of existing defense tools will soon be exceeded by that of new, agentic AI tools. While the Company is taking extensive measures to ensure that its computing systems are well-defended, there is no guarantee that agentic AI tools, whether on their own or in the hands of threat actors, will not breach these systems, which, in turn, could have a material adverse effect upon the Company’s operations or financial performance.
The Company’s primary synthesis factories are dependent upon the continued provision of shared services from competitors. The Company’s manufacturing facilities in both Hannibal, Missouri and Axis, Alabama depend upon the provision of essential services (e.g., utilities, waste treatment) from competitors that are co-located with the Company on those sites. Further, while it owns the machinery and equipment at those sites, the Company is a tenant, and the competitors are landlords, as per the terms of ground leases. There is no guarantee that the landlords of either site will continue to be able to supply some or all shared services to the Company without interruption. Nor does the Company have any control over the disposition of the fee interest of the sites on which its operations are situated. Cessation of some or all shared services by the landlords without sufficient lead time could have a material adverse effect upon the Company’s ability to produce various high-margin products.
The Company’s ability to remain in compliance with the leverage covenant under its 1L Term Loan depends on generating significant adjusted EBITDA during the fourth quarter of 2026. Historically, the fourth quarter has been an important period for the Company’s annual results. In light of the Company’s financial performance through the first nine months of 2026, remaining in compliance with this covenant will require the Company to generate significant adjusted EBITDA during the fourth quarter. There can be no assurance that the Company will generate adjusted EBITDA sufficient to remain in compliance with this covenant. Further, any noncompliance under the 1L Term Loan could have a material adverse effect on the Company’s liquidity, financial condition and results of operations.
If we fail to satisfy the continued listing standards of the New York Stock Exchange, our Common Stock could be delisted. Our Common Stock is listed on the New York Stock Exchange under the symbol “AVD.” To maintain that listing, we must satisfy the NYSE’s continued listing standards, which include, among other things, a minimum average closing share price. The market price of our Common Stock may be affected by, among other things, our recent net losses, significant leverage and weakness in the agricultural economy. If we fail to satisfy any of the listing standards, the NYSE could begin suspension and delisting procedures. A delisting could reduce the liquidity and market price of our Common Stock, impair our ability to raise equity capital and adversely affect our reputation with customers, suppliers and employees. Any of these could adversely affect our business and the value of our Common Stock.
Item 2. Purchases of Equity Securities by the Issuer
Under the First Lien Term Loan, the Company is restricted in its ability to make stock repurchases.
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Item 6. Exhibits
Exhibits required to be filed by Item 601 of Regulation S-K:
Exhibit No. |
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Description |
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10.1*† |
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Offer Letter from American Vanguard Corporation to Matthew Horwath, dated as of September 21, 2026. |
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10.2*† |
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Transition Agreement by and between American Vanguard Corporation and David T. Johnson, dated as of October 1, 2026. |
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31.1 |
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Certification of Chief Executive Officer Pursuant to Section 302 of The Sarbanes-Oxley Act of 2002. |
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31.2 |
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Certification of Chief Financial Officer Pursuant to Section 302 of The Sarbanes-Oxley Act of 2002. |
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32.1 |
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Certification Pursuant to Section 906 of The Sarbanes-Oxley Act of 2002. |
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101 |
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The following materials from American Vanguard Corp’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2026, formatted in iXBRL (Inline Extensible Business Reporting Language): (i) Condensed Consolidated Statements of Operations; (ii) Condensed Consolidated Statements of Comprehensive Income; (iii) Condensed Consolidated Balance Sheets; (iv) Condensed Consolidated Statement of Stockholders’ Equity; (v) Condensed Consolidated Statements of Cash Flows; and (vi) Notes to Condensed Consolidated Financial Statements, tagged as blocks of text. |
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104 |
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The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2026, has been formatted in Inline XBRL. |
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* |
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Filed herewith. |
† |
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Indicates a management contract or compensatory plan. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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american vanguard corporation |
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Dated: November 9, 2026 |
By: |
/s/ DOUGLAS A. KAYE III |
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Douglas A. Kaye III |
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Chief Executive Officer |
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Dated: November 9, 2026 |
By: |
/s/ MATTHEW HORWATH |
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Matthew Horwath |
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Chief Financial Officer (Principal Financial Officer) |
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Dated: November 9, 2026 |
By: |
/s/ DAVID T. JOHNSON |
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David T. Johnson |
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Chief Accounting Officer (Principal Accounting Officer) |
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