American Vanguard cuts 2026 revenue outlook to $500M–$530M
American Vanguard says its goal is 50 new product launches driving $100 million in annualized revenue by 2030.
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.
Rhea-AI Filing Summary
American Vanguard reported third-quarter and nine-month 2026 results. Third-quarter net sales were $108.376 million, down 9% year over year, and net loss was $17.668 million, compared with $12.358 million. Adjusted EBITDA was a $24,000 loss versus $8.210 million a year earlier; gross margin was 24.2%, compared with 28.7%.
Nine-month sales were $348.698 million, down 4%; operating cash used was $12.346 million versus $27.144 million. The company lowered full-year revenue guidance to $500 million–$530 million and adjusted EBITDA guidance to $36 million–$40 million, from $530 million–$550 million and $44 million–$48 million, respectively. For Q4, it projects approximately $166 million in sales and $21 million in adjusted EBITDA.
Management cited lower international sales and higher freight and raw material costs, and said pricing actions did not keep pace with continuing cost inflation. The company completed the acquisition of four U.S. brands and registrations from Syngenta and a distribution agreement with Sipcam Agro; the additions are projected to contribute $15 million–$20 million in annualized revenue over the next 12 months.
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 use was $12.346 million, versus $27.144 million.
- Moderate point. Forward-looking: it has not happened yet and may not happen.Fourth-quarter sales projected at approximately $166 million, up 10% year over year.
- Moderate point. Forward-looking: it has not happened yet and may not happen.Fourth-quarter adjusted EBITDA projected at $21 million, up roughly 25%.
Negative
- Major point. Forward-looking: it has not happened yet and may not happen.Full-year revenue guidance was cut to $500 million–$530 million.
- Moderate pointThird-quarter net sales fell 9% to $108.376 million.
- Moderate pointAdjusted EBITDA was a $24,000 loss, versus $8.210 million.
- Minor point. Forward-looking: it has not happened yet and may not happen.Full-year adjusted EBITDA guidance was cut to $36 million–$40 million.
Filing Explained
At September 30, American Vanguard reported $267.7 million in total debt and 6.5x gross leverage against a 6.7x covenant maximum.
The call specifies that the Syngenta product acquisition was completed;
At
8-K Event Classification
Key Figures
Key Terms
Adjusted EBITDA financial
gross leverage ratio financial
net trade working capital financial
fixed cost absorption financial
purchase accounting intangible amortization financial
Earnings Snapshot
Full-year 2026 revenue of $500 million to $530 million and Adjusted EBITDA of $36 million to $40 million; fourth-quarter projected net sales of approximately $166 million and Adjusted EBITDA of $21 million.
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
How did AVD perform in Q3 2026?
What is AVD's updated 2026 guidance?
What does AVD project for Q4 2026?
Why did AVD lower its 2026 outlook?
How many new products has AVD launched in 2026?
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported):
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) |
Commission File Number |
(I.R.S. Employer Identification No.) |
(Address of principal executive offices)
Registrant’s telephone number:
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class |
Trading |
Exchanges on which registered | ||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b02 of the Securities Exchange Act of 1934 (§240.12b02 of this chapter).
Emerging Growth Company
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. ☐
| Item 2.02 | Results of Operations and Financial Condition |
On November 9, 2026, American Vanguard Corporation (“Registrant” or the “Company”) issued a press release announcing its unaudited financial results for the three- and nine-month periods ended September 30, 2026. The full text of the press release is linked hereto as Exhibit 99.1 and is incorporated herein by reference.
| Item 7.01 | Regulation FD Disclosure. |
On November 9, 2026, the Company held its previously announced earnings call regarding its unaudited financial results for the three- and nine-month periods ended September 30, 2026. A transcript of the earnings call is attached hereto as Exhibit 99.2 and is incorporated herein by reference.
The information furnished under Items 2.02, 7.01 and 9.01 of this Current Report on Form 8-K, including Exhibits 99.1 and 99.2 to this Current Report on Form 8-K, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to liabilities under that Section, nor shall it be deemed incorporated by reference in any registration statement or other filings of the Company under the Securities Act of 1933, as amended, or into another filing under the Exchange Act, except as shall be set forth by specific reference in such filing.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
| Exhibit 99.1 | Press release dated November 9, 2026, of Registrant regarding financial results for the three- and nine-month periods ended September 30, 2026. | |
| Exhibit 99.2 | Transcript of earnings call held November 9, 2026. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, American Vanguard Corporation has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| AMERICAN VANGUARD CORPORATION | ||||||
| Date: November 10, 2026 | ||||||
| By: | /s/ Timothy J. Donnelly | |||||
| Timothy J. Donnelly | ||||||
| Chief Legal Officer, General Counsel & Secretary | ||||||
Exhibit 99.1
|
FOR IMMEDIATE RELEASE |
American Vanguard Reports Third Quarter 2026 Results
Strategic Deals in Quarter Expand U.S. Product Portfolio
Consolidation Driving Manufacturing Efficiency Gains
El Nino and Geopolitics Pressure Global Agricultural Markets
Irvine, CA | November 9, 2026 — American Vanguard Corporation, a diversified specialty and agricultural products company that develops, manufactures, and markets solutions for crop protection and nutrition, turf and ornamental management and commercial pest control, today reported financial results for the third quarter and nine-months ended September 30, 2026.
Third Quarter 2026 Financial and Operational Highlights – versus Third Quarter 2025
| • | Net sales of $108 million as compared to $119 million; |
| • | Gross profit margin of 24%, as compared to 29%; |
| • | Operating loss of $8.0 million, as compared to operating loss of $6.5 million; |
| • | Net loss of $17.7 million, as compared to $12.4 million; |
| • | Breakeven Adjusted EBITDA1 as compared to $8.3 million; |
| • | EPS of ($0.61), as compared to ($0.43) |
| • | Revise Full-Year Outlook; Adjusted EBITDA $36 million to $40 million on Sales of $500 million to $530 million |
Dak Kaye, CEO of American Vanguard, stated, “Our actions are taking hold, and the progress we are making across American Vanguard continues to build, even as market conditions remain difficult, particularly outside the U.S., where El Niño is materially impacting our business this year. In the U.S., our largest and most important market, we continue to outperform our peers in a challenging environment. The cost actions we took in the first half, including the rationalization of our Los Angeles facility and the relocation of our headquarters are beginning to deliver operational savings. In the near term, however, those savings have been more than offset by a sharp rise in diesel and other transportation costs arising from instability in the Middle East. We are working to recover gross margins through commercial actions.”
Mr. Kaye continued, “Importantly, we are building a new product engine that we believe will drive growth over the next several years. At the end of the third quarter, we acquired four U.S. brands and registrations from Syngenta® and entered into a distribution agreement with Sipcam Agro, which together meaningfully expand our portfolio. Combined with our pipeline of new product launches, these additions support our goal of driving $100 million in annualized revenue from new products by 2030. I am also pleased that we have further strengthened our leadership team in the quarter with the additions of Matt Horwath as Chief Financial Officer, and Hermann Castro, Senior Vice President of Marketing and Business Development, to drive new product development and Mark Helt as President of U.S. Crop. Our focus is the same in every market: stay close to our customers, provide service and solutions, and control what we can control.”
| 1 | Adjusted earnings before interest, taxes, depreciation, and amortization (Adjusted EBITDA) is not a financial measure calculated and presented in accordance with U.S. generally accepted accounting principles (GAAP) and should not be considered as an alternative to net (loss) income, operating (loss) income or any other financial measure so calculated and presented, nor as an alternative to cash flow from operating activities as a measure of liquidity. The items excluded from adjusted EBITDA are detailed in the reconciliation attached to this news release. Other companies (including the Company’s competitors) may define adjusted EBITDA differently. |
1
Matt Horwath, Chief Financial Officer, stated, “We began to see progress this quarter in terms of lower operating costs and improved manufacturing efficiencies as a result of actions taken earlier this year. However, this progress was more than offset in the quarter by the effects of negative operating leverage, driven by lower international sales and higher raw material and transportation costs. Net trade working capital improved by $22 million, or 14%, versus the prior year period. Higher pre-payments in the quarter, which increase by 44% year-over-year, demonstrate customer confidence and bode well for revenue in the 2027 planting season.”
Earnings Conference Call
The company will be hosting an earnings conference call on November 9, 2026 at 5:00 pm Eastern Time/2:00 pm Pacific Time.
The conference call will be webcast on the Company’s website at https://www.investors-american vanguard.com/ or by going to the following link: https://www.webcaster5.com/Webcast/Page/3070/54771
If you are unable to listen live, the conference call will be archived for one year and may be accessed using the company’s website: https://www.investors-american-vanguard.com/
About American Vanguard
American Vanguard Corporation is a diversified specialty and agriculture products company that develops and markets products for crop protection and management, turf and ornamentals management, and public health. Over the past 20 years, through product and business acquisitions, the Company has significantly expanded its operations and now has more than 1,000 product registrations worldwide. To learn more about the Company, please reference www.american-vanguard.com.
The Company, from time to time, may discuss forward-looking information. Except for the historical information contained in this release the matters set forth in this press release include forward-looking statements. These statements can be identified by the fact that they do not relate strictly to historical or current facts. Forward looking statements often use words such as “believe,” “expect,” “anticipate,” “intend,” “estimate,” “project,” “outlook,” “forecast,” “target,” “trend,” “plan,” “goal,” or other words of comparable meaning or future-tense or conditional verbs such as “may,” “will,” “should,” “would,” or “could.” These forward-looking statements are based on the current expectations and estimates by the Company’s management and are subject to various risks and uncertainties that may cause results to differ from management’s current expectations. Such factors include risks detailed from time-to-time in the Company’s SEC reports and filings. All forward-looking statements, if any, in this release represent the Company’s judgment as of the date of this release. The company disclaims any intent or obligation to update these forward-looking statements.
2
Non-GAAP Financial Measures
In addition to providing results that are determined in accordance with accounting principles generally accepted in the United States of America (GAAP), we present Adjusted EBITDA and Adjusted operating expenses, which are non-GAAP financial measures. These measures should not be considered in isolation or as an alternative to GAAP measures such as net income, or diluted earnings per share, as applicable, or other financial statement data presented in our financial statements as an indicator of our financial performance or liquidity.
We define EBITDA as net (loss) income, adjusted for depreciation and amortization, provision for income taxes and interest expense. We define Adjusted EBITDA as EBITDA as further adjusted for stock compensation expense and for certain items management believe are not reflective of the underlying operations of our business, including but not limited to the exclusion of charges that are considered by management to be unusual and not representative of the Company’s underlying performance and future prospects. In 2026 and 2025 that included non-recurring expenses. The resulting Adjusted EBITDA measure is aligned with the Company’s metric for its credit facility agreement in the applicable periods.
We define Adjusted operating expense as operating expenses as further adjusted for stock compensation expense and for certain items management believe are not reflective of the underlying operations of our business, including but not limited to the exclusion of charges that are considered by management to be unusual and not representative of the Company’s underlying performance and future prospects as well as the amortization expense for intangibles assets related to acquired product lines.
We use Adjusted EBITDA and Adjusted operating expenses to assess the operating results and effectiveness and efficiency of our business. We present this non-GAAP financial measure because we believe that investors consider Adjusted EBITDA and Adjusted operating expenses to be an important supplemental measure of performance, and we believe that this measure is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. As the Company continues to work through its transformation efforts, management believes that presenting Adjusted EBITDA and Adjusted operating expenses provides an effective comparison between the Company and its industry peers. Non-GAAP financial measures as reported by us may not be comparable to similarly titled metrics reported by other companies and may not be calculated in the same manner. These measures have limitations as analytical tools, and you should not consider them in isolation or as substitutes for analysis of our results as reported under GAAP.
The Company is not able to provide a reconciliation without unreasonable efforts of its forward-looking guidance related to Adjusted EBITDA and Adjusted operating expenses to the most directly comparable GAAP financial measure due to the inherent difficulty in predicting with reasonable certainty the timing and amount of certain items that are excluded from Adjusted EBITDA and Adjusted operating expenses, such as share-based compensation, acquisition-related expenses, and foreign exchange gains or losses, which could be material to the Company’s results computed in accordance with GAAP.
Investor Representative
Alpha IR Group
Robert Winters
Robert.winters@alpha-ir.com
(917) 821-6305
3
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data) (Unaudited)
| September 30, 2026 | December 31, 2025 | |||||||
| ASSETS | ||||||||
| Current assets: |
||||||||
| Cash |
$ | 83,909 | $ | 12,425 | ||||
| Receivables: |
||||||||
| Trade, net of allowance for credit losses of $14,336 and $11,733, respectively |
142,677 | 160,511 | ||||||
| Other |
7,522 | 7,278 | ||||||
|
|
|
|
|
|||||
| Total receivables, net |
150,199 | 167,789 | ||||||
|
|
|
|
|
|||||
| Inventories |
194,079 | 176,034 | ||||||
| Prepaid expenses |
8,464 | 9,668 | ||||||
| Income taxes receivable |
1,750 | 4,606 | ||||||
|
|
|
|
|
|||||
| Total current assets |
438,401 | 370,522 | ||||||
| Property, plant and equipment, net |
51,956 | 53,036 | ||||||
| Operating lease right-of-use assets, net |
16,407 | 16,793 | ||||||
| Intangible assets, net |
139,809 | 138,746 | ||||||
| Deferred income tax assets |
2,963 | 2,637 | ||||||
| Other assets |
13,874 | 14,803 | ||||||
|
|
|
|
|
|||||
| Total assets |
$ | 663,410 | $ | 596,537 | ||||
|
|
|
|
|
|||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ | 86,325 | $ | 87,505 | ||||
| Customer prepayments |
44,621 | 33,094 | ||||||
| Accrued program costs |
46,825 | 52,227 | ||||||
| Accrued expenses and other payables |
26,704 | 28,261 | ||||||
| Current portion of long-term debt |
3,750 | — | ||||||
| Operating lease liabilities, current |
5,637 | 5,765 | ||||||
| Income taxes payable |
3,370 | 2,594 | ||||||
|
|
|
|
|
|||||
| Total current liabilities |
217,232 | 209,446 | ||||||
| Long-term debt, net of current portion |
263,937 | 174,000 | ||||||
| Operating lease liabilities, long-term |
11,243 | 11,621 | ||||||
| Deferred income tax liabilities |
7,115 | 8,150 | ||||||
| Other liabilities |
760 | 923 | ||||||
|
|
|
|
|
|||||
| Total liabilities |
500,287 | 404,140 | ||||||
|
|
|
|
|
|||||
| Commitments and contingent liabilities |
||||||||
| Stockholders’ equity: |
||||||||
| Preferred stock, $0.10 par value per share; authorized 400,000 shares; none issued |
— | — | ||||||
| Common stock, $0.10 par value per share; authorized 40,000,000 shares; issued 34,957,296 shares at September 30, 2026 and 34,923,562 shares at December 31, 2025 |
3,496 | 3,492 | ||||||
| Additional paid-in capital |
118,378 | 117,106 | ||||||
| Accumulated other comprehensive loss |
(10,869 | ) | (12,000 | ) | ||||
| Retained earnings |
123,319 | 155,000 | ||||||
|
|
|
|
|
|||||
| 234,324 | 263,598 | |||||||
| Less treasury stock at cost, 5,915,182 shares at September 30, 2026 and December 31, 2025 |
(71,201 | ) | (71,201 | ) | ||||
|
|
|
|
|
|||||
| Total stockholders’ equity |
163,123 | 192,397 | ||||||
|
|
|
|
|
|||||
| Total liabilities and stockholders’ equity |
$ | 663,410 | $ | 596,537 | ||||
|
|
|
|
|
|||||
4
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
| For the Three Months Ended September 30, |
For the Nine Months Ended September 30, |
|||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Net sales |
$ | 108,376 | $ | 119,313 | $ | 348,698 | $ | 364,426 | ||||||||
| Cost of sales |
(82,124 | ) | (85,099 | ) | (249,316 | ) | (259,474 | |||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Gross profit |
26,252 | 34,214 | 99,382 | 104,952 | ||||||||||||
| Operating expenses |
||||||||||||||||
| Selling, general and administrative |
(25,797 | ) | (26,747 | ) | (80,133 | ) | (81,998 | |||||||||
| Research, product development and regulatory |
(5,342 | ) | (5,654 | ) | (17,097 | ) | (17,139 | |||||||||
| Product liability claims |
(22 | ) | (7,029 | ) | (223 | ) | (7,029 | |||||||||
| CFO transition costs |
(1,316 | ) | — | (1,316 | ) | — | ||||||||||
| Transformation |
(1,665 | ) | (1,442 | ) | (5,975 | ) | (5,254 | |||||||||
| Asset impairments |
— | (93 | ) | (943 | ) | (227 | ||||||||||
| (Loss) gain from sale of assets |
(75 | ) | 246 | (75 | ) | 246 | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Operating loss |
(7,965 | ) | (6,505 | ) | (6,380 | ) | (6,449 | |||||||||
| Change in fair value of an equity investment |
(21 | ) | (511 | ) | (193 | ) | (511 | |||||||||
| Interest expense, net |
(9,146 | ) | (4,920 | ) | (24,066 | ) | (13,135 | |||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Loss before provision for income taxes |
(17,132 | ) | (11,936 | ) | (30,639 | ) | (20,095 | |||||||||
| Income tax expense |
(536 | ) | (422 | ) | (1,043 | ) | (1,574 | |||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net loss |
$ | (17,668 | ) | $ | (12,358 | ) | $ | (31,682 | ) | $ | (21,669 | |||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net loss per common share—basic |
$ | (0.61 | ) | $ | (0.43 | ) | $ | (1.10 | ) | $ | (0.76 | |||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net loss per common share—assuming dilution |
$ | (0.61 | ) | $ | (0.43 | ) | $ | (1.10 | ) | $ | (0.76 | |||||
|
|
|
|
|
|
|
|
|
|||||||||
| Weighted average shares outstanding—basic |
28,775 | 28,511 | 28,691 | 28,377 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Weighted average shares outstanding—assuming dilution |
28,775 | 28,511 | 28,691 | 28,377 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
5
AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES
ANALYSIS OF SALES
(In thousands)
(Unaudited)
| 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 | % | ||||||||||||
| 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 | % | ||||||||||||
6
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 |
$ | (31,682 | ) | $ | (21,669 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
| Depreciation and amortization of property, plant and equipment and intangible assets |
13,442 | 14,007 | ||||||
| Amortization of other long-term assets |
5 | 16 | ||||||
| Loss (gain) on disposal of property, plant and equipment |
75 | (246 | ) | |||||
| Provision for estimated credit losses |
2,469 | 1,944 | ||||||
| Stock-based compensation |
901 | 1,741 | ||||||
| Deferred income taxes |
(1,073 | ) | (353 | ) | ||||
| Change in liabilities for uncertain tax positions or unrecognized tax benefits |
(127 | ) | (522 | ) | ||||
| Change in equity investment fair value |
193 | 511 | ||||||
| Impairment of assets |
943 | 227 | ||||||
| Payment-in-kind debt leverage fee |
1,261 | — | ||||||
| Amortization of deferred loan fees |
2,899 | 1,167 | ||||||
| Lease obligations and non-cash lease expense, net |
(120 | ) | (150 | ) | ||||
| Unrealized foreign currency transaction losses (gains) |
243 | (704 | ) | |||||
| Changes in assets and liabilities associated with operations: |
||||||||
| Decrease in net receivables |
14,812 | 935 | ||||||
| Increase in inventories |
(16,007 | ) | (16,513 | ) | ||||
| Increase in prepaid expenses and other assets |
(1,039 | ) | (965 | ) | ||||
| Change in income tax receivable and payable, net |
3,526 | (1,083 | ) | |||||
| (Decrease) increase in accounts payable |
(960 | ) | 11,859 | |||||
| Increase (decrease) in customer prepayments |
11,527 | (21,453 | ) | |||||
| (Decrease) increase in accrued program costs |
(5,454 | ) | 12,285 | |||||
| Decrease in other payables and accrued expenses |
(8,180 | ) | (8,178 | ) | ||||
|
|
|
|
|
|||||
| Net cash used in operating activities |
(12,346 | ) | (27,144 | ) | ||||
|
|
|
|
|
|||||
| Cash flows from investing activities: |
||||||||
| Capital expenditures |
(4,676 | ) | (2,398 | ) | ||||
| Proceeds from disposal of property, plant and equipment |
10 | 492 | ||||||
| Intangible assets |
(5,149 | ) | (136 | ) | ||||
|
|
|
|
|
|||||
| Net cash used in investing activities |
(9,815 | ) | (2,042 | ) | ||||
|
|
|
|
|
|||||
| Cash flows from financing activities: |
||||||||
| Payments under line of credit agreement |
(140,000 | ) | (179,415 | ) | ||||
| Borrowings under line of credit agreement |
26,000 | 214,334 | ||||||
| Borrowings under term loans |
225,000 | — | ||||||
| Repayments of term loans |
(1,125 | ) | — | |||||
| Payment of deferred loan fees |
(16,581 | ) | (3,339 | ) | ||||
| Net receipt from the issuance of common stock under ESPP |
474 | 629 | ||||||
| Net payment from common stock purchased for tax withholding |
(99 | ) | (147 | ) | ||||
|
|
|
|
|
|||||
| 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 | ||||
|
|
|
|
|
|||||
7
AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES
RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA
(In thousands)
(Unaudited)
| For the Three Months Ended September 30, |
For the Nine Months Ended September 30, |
|||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Net loss |
$ | (17,668 | ) | $ | (12,358 | ) | $ | (31,682 | ) | $ | (21,669 | ) | ||||
| Provision for income taxes |
536 | 422 | 1,043 | 1,574 | ||||||||||||
| Interest expense, net |
9,146 | 4,920 | 24,066 | 13,135 | ||||||||||||
| Depreciation and amortization |
4,620 | 4,565 | 13,861 | 14,023 | ||||||||||||
| Stock compensation expense |
327 | 760 | 901 | 1,741 | ||||||||||||
| CFO transition costs |
1,316 | — | 1,316 | — | ||||||||||||
| Transformation costs |
1,665 | 1,442 | 5,975 | 5,254 | ||||||||||||
| Product liability claims & related expenses |
22 | 7,610 | 223 | 7,610 | ||||||||||||
| Asset impairments |
— | 801 | 943 | 935 | ||||||||||||
| Other |
12 | 48 | 203 | (381 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Adjusted EBITDA(1) |
$ | (24 | ) | $ | 8,210 | $ | 16,849 | $ | 22,222 | |||||||
|
|
|
|
|
|
|
|
|
|||||||||
| 1 | Adjusted earnings before interest, taxes, depreciation, and amortization (Adjusted EBITDA) is not a financial measure calculated and presented in accordance with U.S. generally accepted accounting principles (GAAP) and should not be considered as an alternative to net (loss) income, operating (loss) income or any other financial measure so calculated and presented, nor as an alternative to cash flow from operating activities as a measure of liquidity. The items excluded from adjusted EBITDA are detailed in the reconciliation attached to this news release. Other companies (including the Company’s competitors) may define adjusted EBITDA differently. |
8
AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP TO ADJUSTED OPERATING EXPENSES
(In thousands)
(Unaudited)
| For the Three Months Ended September 30, |
||||||||
| 2026 | 2025 | |||||||
| Operating expenses, as reported |
$ | 34,217 | $ | 40,719 | ||||
| Stock-based compensation(1) |
(327 | ) | (760 | ) | ||||
| Purchase accounting intangible amortization |
(3,032 | ) | (3,065 | ) | ||||
| Transformation costs(2) |
(1,665 | ) | (1,442 | ) | ||||
| Executive transition costs |
(1,316 | ) | — | |||||
| Asset impairments |
— | (93 | ) | |||||
| Product liability claims(3) |
(22 | ) | (7,029 | ) | ||||
| (Loss) gain on sale of assets |
(75 | ) | 246 | |||||
|
|
|
|
|
|||||
| Non-GAAP adjustments to operating expenses |
(6,437 | ) | (12,143 | ) | ||||
|
|
|
|
|
|||||
| Adjusted operating expenses(4) |
$ | 27,780 | $ | 28,576 | ||||
|
|
|
|
|
|||||
| 1 | We exclude stock-based compensation, which is non-cash, from the non-GAAP financial measures because the Company believes that such exclusion provides a better comparison of results of ongoing operations for current and future periods with such results from past periods. |
| 2 | Represents incremental consulting, severance, facility-rationalization, and systems-implementation costs under the Company’s Transformation program, which management excludes as not indicative of ongoing operating performance. |
| 3 | Represents charges for specific product liability matters, net of expected insurance recoveries, which management excludes as not indicative of ongoing operating performance. |
| 4 | Adjusted operating expenses is not a financial measure calculated and presented in accordance with U.S. generally accepted accounting principles (GAAP) and should not be considered as an alternative to operating expenses or any other financial measure so calculated and presented, nor as an alternative to cash flow from operating activities as a measure of liquidity. The items excluded from Adjusted operating expenses are detailed in the reconciliation attached to this news release. Other companies (including the Company’s competitors) may define Adjusted operating expenses differently. |
9
Exhibit 99.2
Transcript of
American Vanguard Corporation
American Vanguard Third Quarter 2026 Earnings Conference Call
November 9, 2026
Participants
Robert Winters - Investor Relations, Alpha IR Group
Douglas Kaye III - Chief Executive Officer, American Vanguard Corporation
Matt Horwath - Chief Financial Officer, American Vanguard Corporation
Analysts
Jeff Bronchick - CSC Investment Management
Presentation
Operator
Welcome to the American Vanguard Earnings Conference Call. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note, this conference is being recorded. I’d like to turn the conference over to Robert Winters, Investor Relations. Thank you. You may begin.
Robert Winters - Investor Relations, Alpha IR Group
Thank you, operator. Good afternoon, and welcome to American Vanguard’s third quarter 2026 earnings review conference call. Our prepared remarks will be led by Dak Kaye, Chief Executive Officer, and Matt Horwath, Chief Financial Officer. After their prepared remarks, we will open the call for questions. A copy of today’s press release, along with supplemental slides, are available on our website. A replay of the webcast and a transcript from this event will be made available on our website shortly after the call.
Before we begin our presentation, we would like to remind everyone that today’s press release and certain comments on the call include non-GAAP figures and forward-looking statements, and actual results may differ materially from these forecasts. Please refer to the cautionary language included in our press release and slides, and to the risk factors described in our SEC filings, all of which are available on our website.
It’s now my pleasure to turn the call over to CEO, Dak Kaye.
Transcript Provided by
1
Douglas Kaye III - Chief Executive Officer, American Vanguard Corporation
Thank you, Bobby, and welcome everyone to the American Vanguard third quarter 2026 earnings conference call. On our last call, I said the second half of the year would be very important to a successful 2026, and I also discussed the challenging and dynamic cross-currents affecting global agricultural markets and our customers. I indicated that we are making good progress on lowering our cost structure and driving commercial improvement regardless of the environment.
I’m pleased to report that our actions are taking hold and that progress being made continues to grow and accelerate at American Vanguard. The increase in prepayments we saw this quarter, up 44% over the prior year quarter, shows the strength of our portfolio and commitment from our customers. Unfortunately, current market conditions are doing us no favors, especially outside of the U.S., where El Nino is materially impacting our business.
Against a backdrop of generally difficult macro conditions for agricultural markets around the world, distributors and retailers are still buying on an as-needed basis and carrying lean inventories, and this is true across all of the geographies in which we operate. I want to repeat the same three points that I made last quarter, because they remain the right way to measure our progress. First, our commercial execution in the U.S. continues to outperform.
Second, the cost actions we took in the first half are delivering on an absolute basis. Third, we are building a new product engine that will drive growth over the next several years. Before I review our results for the quarter at a high level, let me briefly cover market conditions. Overall business conditions have generally worsened in global agricultural markets as the effects of the conflict in the Middle East, higher interest rates, and particularly in the case of our international markets, adverse weather conditions from the Super El Nino, which in some areas has caused drought-like conditions, and in others, flooding.
Our focus and efforts continue to be to increase customer engagement by driving service and attention to our customers, while at the same time accelerating new product development and introduction, always striving to be a solutions provider for our customers wherever we meet them.
Turning to our home country, the crop protection market in the U.S. continued to be difficult in the third quarter due to ongoing pressure on the farm economy coming from multiple directions, including the sustained high cost of capital, coupled with increased fuel and fertilizer costs arising from the ongoing conflict in the Middle East. More specifically, in the U.S., higher transportation costs in the form of surging diesel prices, climbing over 40% in the third quarter alone and up over 80% year-to-date in 2026, are having a negative impact not only on customer behavior, but also on our gross margins as the industry struggles to catch up with and move our pricing up to capture this incrementally rapid rising cost.
Transcript Provided by
2
Savings that we anticipated from the closure of our L.A. manufacturing operation and consolidation of the production at our Alabama facility have been achieved at the operational level, but these savings have been more than offset by the significant increase in transportation costs. Longer term, we still expect the savings to be realized when diesel prices settle at a more normalized level, but for now, we are implementing price increases where we can to offset the increase in fuel costs. In this environment of rising input and transportation costs, farmers are also dealing with commodity prices that remain at relatively low historical values on an inflation-adjusted basis. It’s also important to note that the U.S. government aid this year is expected to count for over 40% of the total net farm income, as compared to 25% last year.
To give some longer-term perspective on this. Over the past 30 years, U.S. government aid to farmers averaged closer to 18% to 19% of total net farm income. Collectively, these factors have created a significant degree of uncertainty and continued conservatism in procurement among growers in the distribution channel.
Turning to our results for the quarter, net sales for the quarter were $108 million, down 9% versus the year-ago period, and adjusted EBITDA was essentially break-even, down $8.3 million compared to the prior year period. In the quarter, U.S. crop sales were down 2%. As we discussed in August, a portion of our cotton portfolio sales shifted from the second quarter into the third as customers bought closer to time of use, and we saw the shift come through as Folex sales were double compared to the prior year quarter.
Herbicide and granular soil insecticide sales were down primarily due to timing versus the prior year. Sales in our specialty business, which includes turf, ornamental, home lawn and garden, and public health, were also down 2% in the quarter, due primarily to lower sales by OHP, our ornamental and greenhouse business. This appears to be another timing issue as the orders are strong Q4 to date.
As I mentioned early in my comments, conditions and our international markets have remained difficult. With the environment worsening across the third quarter, El Niño continues to have a negative impact on our Central America business, with a drought on the Pacific side and excessive rains on the Atlantic side. In addition, Mexico was negatively impacted by low crop prices and intense competition from generic products, putting significant pressure on sales and margins.
Further, Brazil was impacted by political uncertainty, elevated copper prices increasing the price of our fungicide, and delayed purchasing decisions by growers, resulting in weaker-than-expected sales. By contrast, Australia’s fungicide product, Flute, has added cereals to the label and is performing very well. Our focus is the same in every market, stay close to our customers, provide service and solutions, and control what we can control.
Turning to the subject of controlling what we can control, we completed the two footprint actions we announced in March. First, the rationalization of our Los Angeles facility is complete. With synthesis production now running at our Axis, Alabama site, we expect that move to save at least $4 million a year, and the third quarter was our first full quarter of those savings. We saw excellent manufacturing performance in the third quarter.
Transcript Provided by
3
Second, our headquarters relocation to Irvine is complete, saving approximately a half a million dollars a year. At the end of the third quarter, we acquired four U.S. brands and registrations from Syngenta. We also entered into a distribution agreement with Sipcam Agro. Both portfolio additions are projected to add a total of $15 million to $20 million in annualized revenue over the next 12 months and will help drive future revenue growth alongside our organic new product launches.
Speaking of new products, I am pleased to report that we have launched 10 new products year-to-date, mostly smaller third-party distribution products in our international markets. But more importantly, we will be launching Duro LQ, a liquid-based corn insecticide, in the U.S. in Q4. We have high expectations for this product. As a reminder, our goal remains 50 new product launches, driving $100 million in annualized revenue by 2030.
New products drive revenue growth, and this is why investing resources here is one of the most important things we can do. In the quarter, we had several new additions to management. Hermann Castro, who we mentioned in last quarter’s call, has joined us to drive new product development. Also, Mark Helt has joined us as a new U.S. Crop President.
Mark is an industry veteran who I’ve worked with in the past. And most recently, Matt Horwath has joined us, taking over the CFO position. Before I turn the call over to Matt, I want to briefly take a moment to welcome him to American Vanguard. He’s been in the seat already for a month now and has certainly hit the ground running, which is exactly what I expected.
His experience, energy, fresh eyes, and leadership will be important in driving the execution of multiple initiatives we have, as well as focusing on simplifying, prioritizing, and delivering across the company. There’s a lot of work to be done here, and I’m excited that Matt is with us. With that, I’ll turn the call over to Matt to review the financials in more detail. After his review, I’ll come back with our 2026 full-year outlook and our progress towards our 2028 targets. Matt.
Matt Horwath - Chief Financial Officer, American Vanguard Corporation
Thank you, Dak and good afternoon to everyone. Before I review the financial results for the quarter, I’d like to say a few words about joining American Vanguard. This is an important time for the company, and I’m excited to be here and grateful for the warm welcome from Dak, the board, and the leadership team. Throughout my career, I’ve worked as a strategic finance partner to the businesses I’ve supported, focused on operational excellence, financial discipline, and generating free cash flow to create long-term value for shareholders.
Transcript Provided by
4
What drew me to American Vanguard is a clear path to sustainable financial growth built on a foundation that has a high correlation to opportunities that I’ve been a part of in my career. American Vanguard serves attractive, durable end markets with a niche, differentiated product portfolio.
That portfolio is protected by significant barriers to entry, including deep customer access channels, well-established positions in the key geographies we serve, and a capable sales organization with both strong commercial reach and technical expertise. And it’s renewed by a differentiated R&D capability that lets us develop and launch products others can’t easily match.
On top of that foundation, I see significant multi-year opportunities to expand margins and productivity. Gross margin expansion over the longer term comes from improving manufacturing efficiency and utilization, launching new products and scaling them, and disciplined pricing management. Below the gross margin line, we have a real opportunity to modernize the back office and raise fixed cost productivity. None of this requires us to be something outside of our core capabilities. It’s about executing the business we already have, driving operational efficiency, instilling financial rigor across the organization, and strengthening free cash flow generation.
The strategy is in front of us, and the leadership team is motivated to deliver it. Execution is the key, and I’m confident it will yield meaningfully better operating performance over time, which in turn will give us the flexibility to build a repeatable, disciplined capital allocation framework. The industry is challenging at the moment, but I’m confident in our ability, over time, to grow revenue faster than the markets we serve, grow EBITDA faster than revenue, and grow unlevered free cash flow faster than earnings. That is how we intend to create durable value for our shareholders, and I look forward to sharing our progress with you. Turning to our financial performance for the third quarter of 2026, the company generated sales of $108 million compared with $119 million in the same period of 2025, a decrease of 9%.
For the first nine months, sales were $349 million, down 4% compared with $364 million a year ago. U.S. crop sales decreased 2% in the quarter as increases in our growth regulators, Folex and Citrus Fix, Thimet, a granular soil insecticide, and fungicide portfolios were more than offset by lower sales of soil fumigants and herbicides.
On a nine-month basis, U.S. crop sales were up 3%. U.S. specialty sales decreased 2% in the quarter as growth in our turf fungicide and our mosquito adulticide, Naled, were more than offset by lower sales of our ornamental portfolio and insect growth regulators, mostly due to inventory stocking patterns. On a nine-month basis, U.S. specialty sales were up 6%. International sales were down 17% in the quarter and down 14% for the first nine months.
Transcript Provided by
5
The decline in the quarter and year-to-date have been primarily driven by poor weather conditions in Latin America related to El Nino. The sales decreases were partially offset by higher sales of soil fumigants and the continued growth in Ecuador, where we are expanding our commercial operations. Gross margin in the quarter was 24.2% compared with 28.7% in the third quarter of 2025. Manufacturing performance improved versus the prior year, but was more than offset by increased freight costs, which impacted gross margin by approximately 250 basis points, higher raw material costs, and lower fixed cost leverage in Q3. The pricing actions taken during the year only mitigated the first half of the year inflationary increases, but not the ongoing inflation we saw in the third quarter. For the first nine months, gross margin was flat from a year ago.
GAAP operating expenses were $34.2 million and included $3 million in acquisition-related intangible amortization, $3 million of transformation and executive transition costs, and $300,000 of stock-based compensation expense. Non-GAAP operating expense of $27.8 million was down $800,000 from Q3 last year, as we continue to realize productivity improvements from our transformation efforts and make targeted investments to execute on our new product introduction roadmap while offsetting continued inflationary pressure.
Transformation costs were $1.7 million in the quarter, down $300,000 versus Q3 the prior year. Adjusted EBITDA in the quarter was approximately break-even, a decrease of $8.3 million from the third quarter of 2025. The decline was driven by a lower gross profit, especially from our international sales, where El Nino weather conditions significantly affected demand, and by significantly higher freight costs. These factors more than offset the benefit of lower operating expenses.
Our cash balance at the end of the quarter was $84 million, up $40 million sequentially, driven by strong customer prepayments in the quarter. Additionally, we continued to execute our working capital initiatives, including a $4.9 million reduction to inventory year-over-year that reflects the team’s tighter production planning and our improved sales, inventory, and operating planning process. We continue to work towards our longer-term goal of two inventory turns.
Total debt at the end of the quarter was $267.7 million, and net debt was approximately $183.8 million, down $40 million sequentially, driven by the aforementioned cash performance in the quarter. For debt covenant purposes, under our First Lien Term Loan, our gross leverage ratio was 6.5x at the end of the quarter, against a covenant maximum of 6.7x.
Based on our fourth quarter guidance and the associated cash generation, we expect to reduce leverage from this level as we close out the year. Looking ahead, the fourth quarter is typically when we collect a significant portion of customer prepayments. In the fourth quarter of 2025, prepayment and early pay collections were approximately $55 million. As Dak mentioned, we saw an acceleration of prepayments in the third quarter of 2026, and we currently anticipate fourth quarter prepayment and early pay collections of $45 million. We expect net working capital for the fourth quarter to be a positive contributor to liquidity.
Transcript Provided by
6
I would now like to turn the call back over to Dak for some additional comments before we open the call to Q&A. Dak?
Douglas Kaye III - Chief Executive Officer, American Vanguard Corporation
Thank you, Matt. Before we open the call for questions, I want to cover our outlook for the rest of 2026 and how that translates into 2027 from where we stand right now. I also want to talk about our longer term, reminding everyone of the goals we have set for ourselves.
Let’s turn now to the outlook for the remainder of 2026. Because of the more challenging environment in the U.S. and international markets, and the weaker-than-expected results we saw in the third quarter, we are lowering our guidance for revenue and adjusted EBITDA for the full year. We now expect full-year revenue to be in the range of $500 million to $530 million, down from our prior range of $530 million to $550 million.
For adjusted EBITDA, we now expect this to come in the $36 million to $40 million range, down from our prior forecast of $44 million to $48 million. As I discussed in my earlier remarks, the primary drivers of this change are weaker results from our international business relative to prior expectations and the inability to pass along price increases fast enough to keep up with the rising fuel costs and increases in underlying raw materials. I also want to take a moment to briefly review our outlook for the fourth quarter of 2026 in relation to our performance in the 2025 fourth quarter from a top-line and adjusted EBITDA perspective. Last year’s fourth quarter was negatively impacted by a number of unique factors, both internal and external, that will not be repeated this year.
The poor results in last year’s fourth quarter reflected these factors, but performance was mitigated by the upfront royalty income that increased sales and adjusted EBITDA accordingly by over $11 million. Nonetheless, we expect to exceed last year’s fourth quarter adjusted EBITDA performance, as well as top-line performance, with projected net sales of approximately $166 million, up 10% versus the year-ago period, and projected adjusted EBITDA of $21 million, up roughly 25% versus last year’s fourth quarter. As a reminder, the fourth quarter is historically our best quarter for sales and EBITDA performance.
Our expectations for improved performance in the fourth quarter of this year are driven by three factors. Here, I’m going to focus on the items shown in the adjusted EBITDA bridge slide, shown on slide eight in the Q3 presentation. The first and most important is that we expect to benefit from higher volumes and a better mix, driven by higher U.S. crop and specialty sales and relatively better performance internationally. This is primarily driven by new energized and focused commercial teams with a defined plan to increase sales, specifically U.S. crop herbicide volumes, granular soil insecticides, and specialty sales in the ornamental market.
Transcript Provided by
7
Annual increases in customer contracted volumes will drive the increase in year-over-year sales in LATAM, as well as the label extension of Flute in Australia. New product sales from the recent additions and Duro LQ will be incremental compared to the year-ago fourth quarter. To be clear, it’s not that we see much better environment year-over-year in these markets. The improvement we forecast is more about controlling what we can control and executing at a higher level regardless of the environment.
In addition, there were specific mix and timing issues that affected results in the year-ago fourth quarter in both the U.S. and international markets that we do not expect to repeat this year. Secondly, the improved sales are expected to drive improved manufacturing fixed cost absorption year-over-year. Third, we also expect to see cost savings from our L.A. plant closure and further gains in efforts to continue to lower operating expenses on an ongoing basis.
Partially offsetting these, we expect higher transportation costs in the form of mainly higher diesel prices to continue to negatively impact performance on a year-over-year basis. Let me finish by reminding everyone about where we are headed. As I’ve said many times, accountability is about results, and as a public company, those results come back to the numbers.
We are focused on driving revenue growth, higher manufacturing utilization, greater operating cost efficiency, and lower overhead costs. Together, these lead to higher gross margins, higher operating margins, and sustainably higher EBITDA. In the near term, our top priority remains moving our EBITDA margin into double-digits as soon as possible. On the top line, we expect to reach an annualized run rate of more than $600 million in sales by the back half of 2028, approximately 20% above our 2025 goal.
Doing better than that timeline will depend largely on how U.S. and global agricultural markets perform over the next two years. That growth, combined with lower net working capital, should generate solid free cash flow that we will use to reduce net debt over the next two years. That puts us in a position to refinance our debt on attractive terms.
In summary, our business continues to outperform our peers in a difficult market. The cost initiatives we took earlier this year are now delivering operating leverage, and we are building a pipeline of new products that will drive growth into 2028 and beyond. We have more work to do, and we will continue to assume that the external environment will do us no favors. We will keep controlling what we can control and executing our plan for growth, efficiency, and greater profitability. With that, operator, you can open the call for questions.
Transcript Provided by
8
Operator
Certainly, and thank you. Ladies and gentlemen, the floor is now open for questions. [Operator Instructions] We have a question from Jeff Bronchick from CSC Investment Management. Jeff, your line is live. Please go ahead.
Q: Good afternoon. Dak, could you talk a little bit more about the, it looks like the $5 million acquisition and exactly what that brings as far as both product, and then you mentioned a revenue number that I think was. Maybe just re-mention the revenue number and attendant profitability, and how does that fit, and how and why does that make sense today?
Douglas Kaye III - Chief Executive Officer, American Vanguard Corporation
Thanks, Jeff. Thanks for the question, and a great question. This is a question I love to answer. I mean, this is going back to product acquisitions is the DNA of the company going back from a long time, and it’s important that we get back to the ability to do these kind of product acquisitions. The acquisition itself was fairly small in relation to what we’ve done historically, but it shows that we’re laying the groundwork to get back to where we were.
Specifically, the portfolio of four products, primarily in specialty crops, niche crops, but they have higher margin products. They’re branded, which is what we’ve been successful in the past on taking on, which is buying branded portfolios from the basic manufacturers and extending the life of the products out. These registrations are based in the U.S. They’re U.S. registrations.
We also got some technical registrations with them as well, which allows us to expand on these acquisitions in addition to the branded products we acquired. We can do mixtures and formulations as well. So the value, we paid $5 million upfront, and we have a $4.5 million payment that is due in another year. So the total value of the acquisition was $9.5 million. We delayed the purchase price, and it has got a nice net present value, I would say, on the return of our investment. The addition to the number that we communicated in the earnings call here is 15% to 20%, and that considers also the distribution agreement that we signed with Sipcam Agro at the end of the quarter in the specialty business. I have known Sipcam for many, many years and done business with them.
They have got some nice products that we are very familiar with that we are excited about launching as we speak into the fourth quarter specialty market. So we are really excited about getting back to doing things that we were good at as a company, which is extending the life of these branded products, higher margin products, and then also doing distribution into the specialty business. Thank you, Jeff.
Q: These numbers are part of your confidence for the fourth quarter, that these are hitting now, or are these 2027 numbers?
Transcript Provided by
9
Douglas Kaye III - Chief Executive Officer, American Vanguard Corporation
They are hitting now. They are hitting now in addition to the Duro LQ that we are launching as well, and the other new products we have organically developed, the smaller ones. But in addition to those, the Syngenta portfolio and the portfolio of four products, I should make that clear, in addition to Sipcam Agro products into the specialty market as well. Those are baked into the new product numbers on the slide for 2026, for the fourth quarter of 2026.
Q: No, I got it. So it is whatever, November 9th, you are still in the ag business. When you are talking about fourth quarter guidance, like in things about prepays and cash flow, what percentage of your life is baked for the fourth quarter by this point versus, well, it is subject to?
Douglas Kaye III - Chief Executive Officer, American Vanguard Corporation
I wish I could say it was baked. That is not the way that it works. There is a lot of work to be done in the fourth quarter. We have got a refocused and energized commercial organization, starting at the very top, bringing Mike DiPaola over in the function of Chief Commercial Officer earlier this year, and giving on the reins to all of the markets, and brought in Mark Helt, who I worked with before, to run U.S. Crop. And then we have got some additions also in the specialty business as well. So we brought in new people, a new energized team with a clear plan to execute for the fourth quarter. I cannot say that it is all baked in. It is just not the way the business runs, the industry runs, especially here in the U.S.
Operator
Okay. Thank you. [Operator Instructions] And there are no further questions in queue at this time. I would now like to turn the floor back to Dak Kaye for closing remarks.
Douglas Kaye III - Chief Executive Officer, American Vanguard Corporation
Thank you, operator. I would like to close by again summarizing where we are today and where we are headed. Our business continues to outperform our peers in a very difficult market. Importantly, the cost initiatives we took earlier this year are now delivering operating leverage, and we are building a pipeline of new products that will drive growth into 2028 and beyond.
We have added several additional products to this growing pipeline through distribution agreements and brand acquisitions completed this quarter, and we will continue to look for opportunities like these in the future to further supplement our growth initiatives. We have more work to do, and we will continue to assume that the external environment will do us no favors. We will keep controlling what we can control and executing our plan for growth, efficiency, and greater profitability.
Transcript Provided by
10
As a reminder, our top priority in the near term remains moving our EBITDA margin into double-digits as soon as possible. Despite the challenging environment today, we feel good about it. On the top line, we expect to reach an annualized run rate of more than $600 million in sales by the back half of 2028, approximately 20% above our 2025 level. Thank you everyone for joining us today. We appreciate your continued support and we look forward to updating you on our full year 2026 results when we report our fourth quarter and full-year results for 2026 in early 2027. Thank you.
Operator
Thank you. This does conclude today’s conference call. You may disconnect at this time, and have a wonderful day. Thank you once again for your participation.
Transcript Provided by
11