American Vanguard (NYSE: AVD) Q2 sales fall 10% as it holds 2026 EBITDA guidance
Rhea-AI Filing Summary
American Vanguard Corporation reported weaker second-quarter 2026 results but stronger first-half profitability and reaffirmed its full-year outlook. Net sales in the quarter were $116.8 million, down 10% year over year, driven mainly by an 18% decline in international revenue, while U.S. sales fell 3%. The company posted a Q2 net loss of $9.9 million versus a $0.8 million loss a year earlier, pressured by higher interest expense and freight costs.
For the first half, net sales were $240.3 million, down 2%, but gross margin improved from 29% to 30%, and Adjusted EBITDA rose to $16.9 million from $14.0 million, reflecting cost reductions and transformation efforts. Operating cash flow was negative $60.5 million, and net debt was about $224.7 million at June 30, 2026. Management highlights ongoing benefits from the L.A. plant rationalization, expected to save at least $4 million annually, and continued R&D investment. The company reaffirmed 2026 guidance for Adjusted EBITDA of $44–48 million on sales of $530–550 million and outlined a goal of reaching an annualized revenue run rate above $600 million by the back half of 2028 with double-digit EBITDA margins.
Positive
- Adjusted EBITDA increased by more than 20% year to date to $16.9 million from $14.0 million, despite slightly lower first-half sales.
- Gross margin improved 100 basis points in the first half of 2026 to 30% from 29%, indicating better mix and cost control.
- Management reaffirmed full-year 2026 guidance of Adjusted EBITDA $44–48 million on sales of $530–550 million, signaling confidence in the second-half outlook.
- The L.A. production facility rationalization is expected to save at least $4 million annually, supporting future margin expansion.
- Inventories were $181 million, down about $10 million year over year, showing improved production planning and working capital discipline.
Negative
- Second-quarter net sales declined 10% to $116.8 million, with international revenue down 18% versus Q2 2025.
- The company reported a Q2 2026 net loss of $9.9 million, significantly wider than the $0.8 million loss in Q2 2025.
- Year-to-date net cash used in operating activities was $60.5 million, compared with $39.8 million in the prior-year period.
- Quarterly interest expense rose to $9.1 million from $4.5 million, and net debt was about $224.7 million at June 30, 2026, reflecting a higher leverage burden.
- International markets remain weak, with first-half international sales down 13%, pressured by weather, labor issues, and input-cost-driven pricing.
Filing Explained
Cash fell from 70.9 million dollars at March 31 to 43.9 million at June 30, while net debt rose from 194.7 million to 224.7 million.
This filing updates American Vanguard’s balance-sheet position as of
Form 8-Ks report specified material events, and this one furnishes unaudited results and an earnings-call transcript. The filing states that the Items 2.02, 7.01 and 9.01 information and exhibits are not treated as filed under Section 18 or incorporated into other filings unless specifically referenced.
Cash was
Management attributed the sequential net-debt increase to normalized accounts payable, changes in certain customer early-pay strategies that increased receivables, and peak second-quarter working-capital needs.
The specific near-term items to track are the cotton shipments shifted from the second quarter into the third quarter and the pricing actions introduced in July to recover higher freight costs, against the company’s reaffirmed 2026 outlook.
8-K Event Classification
Key Figures
Key Terms
Adjusted EBITDA financial
Net debt financial
transformation costs financial
El Niño technical
GLP-1 drug usage medical
credit facility agreement financial
Earnings Snapshot
Company expects 2026 Adjusted EBITDA of $44–48 million on sales of $530–550 million.
AI-generated analysis. How Rhea-AI works. Not financial advice.
FAQ
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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) |
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(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 August 10, 2026, American Vanguard Corporation (“Registrant” or the “Company”) issued a press release announcing its unaudited financial results for the three- and six-month periods ended June 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 August 10, 2026, the Company held its previously announced earnings call regarding its unaudited financial results for the three- and six-month periods ended June 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 August 10, 2026, of Registrant regarding financial results for the three- and six-month periods ended June 30, 2026. | |
| Exhibit 99.2 | Transcript of earnings call held August 10, 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: August 11, 2026 | ||||||
| By | /s/ Timothy J. Donnelly | |||||
| Timothy J. Donnelly | ||||||
| Chief Legal Officer, General Counsel & Secretary | ||||||
Exhibit 99.1
|
FOR IMMEDIATE RELEASE |
American Vanguard Reports Second Quarter 2026 Results
First-Half Gross Profit Increased 3%, and EBITDA Increased 21% on Mostly Flat Sales
Reaffirm Full-Year Outlook; Adjusted EBITDA $44 million to $48 million on Sales of $530 million to $550 million
Irvine, CA | August 10, 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 second quarter and six-months ended June 30, 2026.
Second Quarter 2026 Financial and Operational Highlights – versus Second Quarter 2025
| • | Net sales of $117 million as compared to $129 million; |
| • | Gross profit margin of 30%, as compared to 31%; |
| • | Operating loss of $0.30 million, as compared to operating income of $4.4 million; |
| • | Net loss of $9.9 million, as compared to $849 thousand; |
| • | Adjusted EBITDA1 of $6.6 million, as compared to $11.0 million; |
| • | EPS of ($0.34), as compared to ($0.03) |
First Half 2026 Financial and Operational Highlights – versus First Half 2025
| • | Net sales of $240 million, as compared to $245 million |
| • | Gross profit margin of 30%, as compared to 29% |
| • | Operating profit of $1.6 million, as compared to operating profit of $0.06 million; |
| • | Net loss of $14 million, as compared to $9.3 million; |
| • | Adjusted EBITDA of $16.9 million, as compared to $14 million; |
| • | EPS of ($0.49), as compared to ($0.33) |
Dak Kaye, CEO of American Vanguard, stated “Results for the second quarter and the first half of this year demonstrate the steady progress we are making on lowering costs and inventories, as well as driving commercial improvement, in spite of ongoing and dynamic crosscurrents affecting our agricultural markets and customers around the world. Our collective efforts to manage working capital, factory efficiency and controllable expenses while investing in the future have set the foundation for the opportunities that we believe lie ahead of us. Importantly, we are beginning to outperform our competition in our most important market, the U.S., and I’m excited about the opportunity to build on this going forward and spread this across the rest of our businesses.”
Mr. Kaye continued, “In our efforts to reorganize, refocus and invigorate the commercial effort across the Company, we are making good progress so far. Distributors, retailers and growers remain conservative in their buying practices, ordering on an as needed basis and deferring purchases month to month where they can. This, in turn, has shifted order patterns across our businesses, both domestically and internationally. In this environment, we must be agile, and our focus and efforts right now
| 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
are to increase customer engagement and drive customer service 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. With the first half behind us and our cost and commercial initiatives executing to our plan, we are reaffirming our full-year outlook.”
David Johnson, Chief Financial Officer stated, “Second quarter gross margin reflected lower sales and the timing of customer shipments, but first half margin still improved 100 basis points on slightly lower sales, a direct result of our business improvement plan efforts. We reduced operating expenses by 3% year-over-year for the quarter, as we continued to drive efficiency across the organization, while continuing to invest for future growth including a 12% increase in R&D investment. Importantly, a number of actions taken in the first half of 2026, including the L.A. plant optimization and headquarter relocation will translate into lower costs in the second half of this year. As a reminder, we expect the rationalization of the L.A. production facility to save us at least $4 million on an annualized basis going forward. Inventories decreased by $10 million year-over-year, reflecting tighter production planning and working capital discipline.”
Earnings Conference Call
The company will be hosting an earnings conference call on August 10, 2026 at 4:30 pm Eastern Time/1:30 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/3070/54326
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 Net Debt, 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 Net Debt as outstanding indebtedness less cash and 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 use Adjusted EBITDA 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 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 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 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, 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)
| June 30, 2026 | December 31, 2025 | |||||||
| ASSETS | ||||||||
| Current assets: |
||||||||
| Cash |
$ | 43,901 | $ | 12,425 | ||||
| Receivables: |
||||||||
| Trade, net of allowance for credit losses of $13,219 and $11,733, respectively |
174,608 | 160,511 | ||||||
| Other |
8,852 | 7,278 | ||||||
|
|
|
|
|
|||||
| Total receivables, net |
183,460 | 167,789 | ||||||
|
|
|
|
|
|||||
| Inventories |
181,382 | 176,034 | ||||||
| Prepaid expenses |
7,388 | 9,668 | ||||||
| Income taxes receivable |
1,620 | 4,606 | ||||||
|
|
|
|
|
|||||
| Total current assets |
417,751 | 370,522 | ||||||
| Property, plant and equipment, net |
51,178 | 53,036 | ||||||
| Operating lease right-of-use assets, net |
16,052 | 16,793 | ||||||
| Intangible assets, net |
133,185 | 138,746 | ||||||
| Deferred income tax assets |
3,020 | 2,637 | ||||||
| Other assets |
14,157 | 14,803 | ||||||
|
|
|
|
|
|||||
| Total assets |
$ | 635,343 | $ | 596,537 | ||||
|
|
|
|
|
|||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current liabilities: |
||||||||
| Current portion of long-term debt |
$ | 2,250 | $ | — | ||||
| Accounts payable |
87,295 | 87,505 | ||||||
| Customer prepayments |
741 | 33,094 | ||||||
| Accrued program costs |
48,306 | 52,227 | ||||||
| Accrued expenses and other payables |
22,800 | 28,261 | ||||||
| Operating lease liabilities, current |
5,289 | 5,765 | ||||||
| Income taxes payable |
2,115 | 2,594 | ||||||
|
|
|
|
|
|||||
| Total current liabilities |
168,796 | 209,446 | ||||||
| Long-term debt, net of current portion |
265,369 | 174,000 | ||||||
| Operating lease liabilities, long-term |
11,216 | 11,621 | ||||||
| Deferred income tax liabilities |
7,675 | 8,150 | ||||||
| Other liabilities |
900 | 923 | ||||||
|
|
|
|
|
|||||
| Total liabilities |
453,956 | 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 34,850,939 shares at June 30, 2026 and 34,923,562 shares at December 31, 2025 |
3,485 | 3,492 | ||||||
| Additional paid-in capital |
117,855 | 117,106 | ||||||
| Accumulated other comprehensive loss |
(9,739 | ) | (12,000 | ) | ||||
| Retained earnings |
140,987 | 155,000 | ||||||
|
|
|
|
|
|||||
| 252,588 | 263,598 | |||||||
| Less treasury stock at cost, 5,915,182 shares at June 30, 2026 and December 31, 2025 |
(71,201 | ) | (71,201 | ) | ||||
|
|
|
|
|
|||||
| Total stockholders’ equity |
181,387 | 192,397 | ||||||
|
|
|
|
|
|||||
| Total liabilities and stockholders’ equity |
$ | 635,343 | $ | 596,537 | ||||
|
|
|
|
|
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4
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Net sales |
$ | 116,754 | $ | 129,313 | $ | 240,322 | $ | 245,113 | ||||||||
| Cost of sales |
(82,041 | ) | (88,766 | ) | (167,192 | ) | (174,375 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Gross profit |
34,713 | 40,547 | 73,130 | 70,738 | ||||||||||||
| Operating expenses |
||||||||||||||||
| Selling, general and administrative |
(26,623 | ) | (28,623 | ) | (54,336 | ) | (55,251 | ) | ||||||||
| Research, product development and regulatory |
(6,484 | ) | (5,803 | ) | (11,755 | ) | (11,485 | ) | ||||||||
| Product liability claims |
(119 | ) | — | (201 | ) | — | ||||||||||
| Transformation |
(1,506 | ) | (1,621 | ) | (4,310 | ) | (3,812 | ) | ||||||||
| Asset impairments |
(284 | ) | (134 | ) | (943 | ) | (134 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Operating (loss) income |
(303 | ) | 4,366 | 1,585 | 56 | |||||||||||
| Change in fair value of an equity investment |
(52 | ) | — | (172 | ) | — | ||||||||||
| Interest expense, net |
(9,130 | ) | (4,450 | ) | (14,920 | ) | (8,215 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Loss before provision for income taxes |
(9,485 | ) | (84 | ) | (13,507 | ) | (8,159 | ) | ||||||||
| Income tax expense |
(383 | ) | (765 | ) | (507 | ) | (1,152 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net loss |
$ | (9,868 | ) | $ | (849 | ) | $ | (14,014 | ) | $ | (9,311 | ) | ||||
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|
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|
|
|
|
|||||||||
| Net loss per common share—basic |
$ | (0.34 | ) | $ | (0.03 | ) | $ | (0.49 | ) | $ | (0.33 | ) | ||||
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|
|
|
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|
|||||||||
| Net loss per common share—assuming dilution |
$ | (0.34 | ) | $ | (0.03 | ) | $ | (0.49 | ) | $ | (0.33 | ) | ||||
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|
|
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|
|
|||||||||
| Weighted average shares outstanding—basic |
28,649 | 28,345 | 28,649 | 28,308 | ||||||||||||
|
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|
|
|
|
|
|
|
|||||||||
| Weighted average shares outstanding—assuming dilution |
28,649 | 28,345 | 28,649 | 28,308 | ||||||||||||
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5
AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES
ANALYSIS OF SALES
(In thousands)
(Unaudited)
| For the Three Months Ended June 30, | ||||||||||||||||
| 2026 | 2025 | Change | % Change | |||||||||||||
| Net sales: |
||||||||||||||||
| U.S. crop |
$ | 48,033 | $ | 52,674 | $ | (4,641 | ) | -9 | % | |||||||
| U.S. Specialty |
21,804 | 19,585 | 2,219 | 11 | % | |||||||||||
|
|
|
|
|
|
|
|||||||||||
| Total U.S. |
69,837 | 72,259 | (2,422 | ) | -3 | % | ||||||||||
| International |
46,917 | 57,054 | (10,137 | ) | -18 | % | ||||||||||
|
|
|
|
|
|
|
|||||||||||
| Total net sales |
$ | 116,754 | $ | 129,313 | $ | (12,559 | ) | -10 | % | |||||||
| Total cost of sales |
$ | (82,041 | ) | $ | (88,766 | ) | $ | 6,725 | -8 | % | ||||||
|
|
|
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|
|
|
|||||||||||
| Total gross profit |
$ | 34,713 | $ | 40,547 | $ | (5,834 | ) | -14 | % | |||||||
|
|
|
|
|
|
|
|||||||||||
| Total gross margin |
30 | % | 31 | % | ||||||||||||
| For the Six Months Ended June 30, | ||||||||||||||||
| 2026 | 2025 | Change | % Change | |||||||||||||
| Net sales: |
||||||||||||||||
| U.S. crop |
$ | 115,193 | $ | 110,201 | $ | 4,992 | 5 | % | ||||||||
| U.S. Specialty |
38,174 | 34,834 | 3,340 | 10 | % | |||||||||||
|
|
|
|
|
|
|
|||||||||||
| Total U.S. |
153,367 | 145,035 | 8,332 | 6 | % | |||||||||||
| International |
86,955 | 100,078 | (13,123 | ) | -13 | % | ||||||||||
|
|
|
|
|
|
|
|||||||||||
| Total net sales |
$ | 240,322 | $ | 245,113 | $ | (4,791 | ) | -2 | % | |||||||
| Total cost of sales |
$ | (167,192 | ) | $ | (174,375 | ) | $ | 7,183 | -4 | % | ||||||
|
|
|
|
|
|
|
|||||||||||
| Total gross profit |
$ | 73,130 | $ | 70,738 | $ | 2,392 | 3 | % | ||||||||
|
|
|
|
|
|
|
|||||||||||
| Total gross margin |
30 | % | 29 | % | ||||||||||||
6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
| For the Six Months Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Cash flows from operating activities: |
||||||||
| Net loss |
$ | (14,014 | ) | $ | (9,311 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
| Depreciation and amortization of property, plant and equipment and intangible assets |
9,026 | 9,447 | ||||||
| Amortization of other long-term assets |
— | 11 | ||||||
| Loss (gain) on disposal of property, plant and equipment |
55 | (40 | ) | |||||
| Provision for estimated credit losses |
1,327 | 1,999 | ||||||
| Stock-based compensation |
574 | 981 | ||||||
| Deferred income taxes |
(690 | ) | (200 | ) | ||||
| Change in liabilities for uncertain tax positions or unrecognized tax benefits |
(50 | ) | (60 | ) | ||||
| Change in equity investment fair value |
172 | — | ||||||
| Impairment of assets |
943 | 134 | ||||||
| Payment-in-kind debt leverage fee |
676 | — | ||||||
| Amortization of deferred loan fees |
1,786 | 569 | ||||||
| Lease obligations and non-cash lease expense, net |
(140 | ) | (100 | ) | ||||
| Unrealized foreign currency transaction losses (gains) |
603 | (855 | ) | |||||
| Changes in assets and liabilities associated with operations: |
||||||||
| Increase in net receivables |
(16,225 | ) | (3,293 | ) | ||||
| Increase in inventories |
(4,280 | ) | (9,785 | ) | ||||
| Increase in prepaid expenses and other assets |
(339 | ) | (1,863 | ) | ||||
| Change in income tax receivable and payable, net |
2,506 | (1,024 | ) | |||||
| (Decrease) increase in accounts payable |
(459 | ) | 24,547 | |||||
| Decrease in customer prepayments |
(32,353 | ) | (46,187 | ) | ||||
| (Decrease) increase in accrued program costs |
(3,967 | ) | 10,267 | |||||
| Decrease in other payables and accrued expenses |
(5,611 | ) | (15,073 | ) | ||||
|
|
|
|
|
|||||
| Net cash used in operating activities |
(60,460 | ) | (39,836 | ) | ||||
|
|
|
|
|
|||||
| Cash flows from investing activities: |
||||||||
| Capital expenditures |
(2,322 | ) | (1,020 | ) | ||||
| Proceeds from disposal of property, plant and equipment |
12 | 51 | ||||||
| Intangible assets |
(109 | ) | (88 | ) | ||||
|
|
|
|
|
|||||
| Net cash used in investing activities |
(2,419 | ) | (1,057 | ) | ||||
|
|
|
|
|
|||||
| Cash flows from financing activities: |
||||||||
| Payments under line of credit agreement |
(140,000 | ) | (128,665 | ) | ||||
| Borrowings under line of credit agreement |
26,000 | 170,834 | ||||||
| Borrowings under term loans |
225,000 | — | ||||||
| Repayments of term loans |
(563 | ) | — | |||||
| Payment of deferred loan fees |
(16,234 | ) | (881 | ) | ||||
| Net receipt from the issuance of common stock under ESPP |
263 | 333 | ||||||
| Net payment from common stock purchased for tax withholding |
(95 | ) | (142 | ) | ||||
|
|
|
|
|
|||||
| Net cash provided by financing activities |
94,371 | 41,479 | ||||||
|
|
|
|
|
|||||
| Net increase in cash |
31,492 | 586 | ||||||
| Effect of exchange rate changes on cash and cash equivalents |
(16 | ) | 1,382 | |||||
| Cash at beginning of period |
12,425 | 12,514 | ||||||
|
|
|
|
|
|||||
| Cash at end of period |
$ | 43,901 | $ | 14,482 | ||||
|
|
|
|
|
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7
AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES
RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA
(In thousands)
(Unaudited)
| For the Three Months Ended June 30, |
For the Six Months Ended June 30, |
|||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Net loss |
$ | (9,868 | ) | $ | (849 | ) | $ | (14,014 | ) | $ | (9,311 | ) | ||||
| Provision for income taxes |
383 | 765 | 507 | 1,152 | ||||||||||||
| Interest expense, net |
9,130 | 4,450 | 14,920 | 8,215 | ||||||||||||
| Depreciation and amortization |
4,618 | 4,709 | 9,241 | 9,458 | ||||||||||||
| Stock compensation expense |
388 | 422 | 574 | 981 | ||||||||||||
| Transformation costs |
1,506 | 1,621 | 4,310 | 3,812 | ||||||||||||
| Asset impairments |
284 | 134 | 943 | 134 | ||||||||||||
| Other |
173 | (213 | ) | 392 | (429 | ) | ||||||||||
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|
|
|
|
|
|
|
|
|||||||||
| Adjusted EBITDA(1) |
$ | 6,614 | $ | 11,039 | $ | 16,873 | $ | 14,012 | ||||||||
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| 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
Exhibit 99.2
Transcript of
American Vanguard Corporation
American Vanguard Second Quarter 2026 Earnings Conference Call
August 10, 2026
Participants
Robert Winters - Director of Investor Relations, Alpha IR Group
Douglas Kaye III - Chief Executive Officer, American Vanguard Corporation
David Johnson - Vice President & Chief Financial Officer, American Vanguard Corporation
Analysts
Wayne Pinsent - Gabelli
Presentation
Operator
Greetings. Welcome to the American Vanguard’s Second Quarter 2026 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 will now turn the conference over to your host, Bobby Winters, Director of Investor Relations. You may begin.
Robert Winters - Director of Investor Relations, Alpha IR Group
Thank you, operator. Good afternoon, and welcome to American Vanguard’s second quarter 2026 earnings review conference call. Our prepared remarks will be led by Dak Kaye, Chief Executive Officer, and David Johnson, Chief Financial Officer. After their prepared remarks, we will open up 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 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
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Douglas Kaye III - Chief Executive Officer, American Vanguard Corporation
Thank you, Bobby, and welcome everyone to our second quarter 2026 earnings conference call. Results for the quarter and the first half of this year reflect ongoing and dynamic crosscurrents affecting our agricultural markets and customers around the world, but more importantly, the progress we are making on lowering cost and driving commercial improvement regardless of the environment.
I want to make three major points today. First, despite these difficult market conditions, we are outperforming our peers in the U.S. markets. Second, with the implementation of our business improvement plans, we are gaining greater operating leverage. Third, our investment in new product development is paving the way for future growth and profitability. In our initiative to reorganize, refocus, and invigorate the commercial effort across the company, we are making good progress so far. The results for the first half of 2026 have laid the foundation for opportunities that we believe are both ahead of us and in our control.
Before covering our performance, let’s turn to market conditions. The crop protection market in the U.S. continued to be difficult in the second quarter due to continued 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.
Distributors, retailers, and growers have continued to be conservative in their buying practices, ordering on an as-needed basis and even then deferring purchases from month to month when they can, which is shifting order patterns somewhat across our businesses, both domestically and internationally.
I think it’s also worth noting that some underlying structural and behavioral shifts in consumption patterns are impacting agricultural markets, including the multiyear decline in overall alcohol consumption, as well as the rapid uptake of GLP-1 drug usage and the effect this is having on consumer eating habits.
Outside of the U.S., across our international markets, it’s been a much more challenging environment due to adverse weather conditions, in particular, a super El Niño, plus inflationary pressure and higher raw material prices. As with our U.S. markets and customers, our focus and efforts right now are to increase customer engagement and drive 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.
Now let’s turn to our first major point, that we are outperforming our peers in our combined U.S. markets. While quarterly net sales declined approximately 10% versus the year ago period, this was primarily driven by weaker international sales, which were down 18% for the quarter. We did see a decline in U.S. crop sales for the quarter, but this was more than offset by continued strength and growth in our specialty businesses, where sales were up 11% for the quarter on a year-over-year basis.
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For the quarter, U.S. crop sales were impacted by timing of product sales within our cotton product portfolio, with some sales shifting to the third quarter of this year. Herbicide sales were strong in both the first and second quarters, primarily due to our brands Impact and Envoke.
As we continue to test the elasticity of our portfolio to drive gross profit dollars and increase manufacturing efficiencies. In short, we continue to see consistent demand for our domestic products, which constitute our highest margin offerings. For the first half of 2026, revenue was mostly flat on a year-over-year basis, but U.S. sales were up 6%, with U.S. crop up 5% year-over-year and specialty sales up 10%. The strength and outperformance we’ve been able to drive so far in 2026 was mostly offset by the weaker global environment, with international sales down 13% for the first half of 2026.
Turning now to our second major point, improved operating leverage. While gross profit margins were down year-over-year for the quarter due to the lower volumes and the timing of customer shipments, gross profit margins improved by 100 basis points in the first half of 2026, from 29% to 30% on modestly lower revenue.
Notably higher freight costs were a significant cost headwind for the quarter and year-to-date, as we estimate that this held back margins by $2.2 million, or 90 basis points in the first half of 2026. We have taken pricing actions in the market to recover these higher costs and expect to see these initiatives begin to flow through our results in the second half of 2026.
Operating expenses, excluding transformation costs, improved by 3% year-over-year for the quarter as we continue to drive efficiency across the organization. Importantly, a number of actions taken in the first half of 2026, including the L.A. plant rationalization and headquarter relocation, will translate into lower costs in the second half of this year.
We also expect transformation costs to be further reduced. As a reminder, we expect the rationalization of the L.A. production facility to save us at least $4 million on an annualized basis going forward. In short, we are keeping expenses in check and managing those things that are within our control, notwithstanding changes in market conditions.
Let’s turn now to our third point, paving the way for improved growth and profitability through new product development. I was very pleased to be able to further strengthen our leadership team and commercial efforts here early in the third quarter with the addition of Hermann Castro, who joined us early in July as Senior Vice President of Marketing and Business Development. Hermann is a proven leader and performer in our industry, particularly when it comes to new product development and innovation.
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Additionally, we continue to invest in future growth as R&D investment was up 12% year-over-year. As I have mentioned before, we have set a goal going forward of having 50 new product launches over the next five years, driving $100 million in annualized revenue by 2030. Hermann will play an important role in driving the success of this initiative.
At this point, I will pause in my remarks and turn the call over to our CFO, David Johnson, who will review our financial results for the quarter in greater detail. After his review, I will return with our thoughts on the outlook for 2026 and our growth trajectory over the next two years. David?
David Johnson - Vice President & Chief Financial Officer, American Vanguard Corporation
Thanks, Dak. Good afternoon, everyone. Turning to our financial performance for the second quarter of 2026, the company generated sales of $117 million in the period as compared to $129 million in the same period of 2025.
For the first half, sales of $240 million were down about 2% as compared to the $245 million we reported a year ago. U.S. crop sales decreased 9% in the quarter. The decline was driven largely by the timing of sales within our cotton portfolio being shifted into the third quarter as customers are buying closer to the time of use. Insecticide sales also declined, reflecting low bug pressure and more cautious grower spending across key crop markets. These declines were partially offset by continued momentum of herbicides, while soil fumigants remained stable.
U.S. crop sales were up 5% on a first half basis, with herbicide strength across the period and granular soil insecticides and cotton insecticide demand concentrated in the first quarter. Our specialty business grew 11% in the quarter and 10% for the first half, with improvements across multiple market segments.
OHP led demand for biological solutions, and turf performed ahead of forecast. International sales were down 18% in the quarter and 13% for the first half. Dry conditions associated with El Niño delayed and reduced use across Central America. Shipments to certain customers were paused in light of local labor activity.
In Mexico, herbicide sales were impacted by the reduced acres of agave. In Brazil, demand softened due to higher pricing driven by raw material cost increases of our copper fungicide. Gross margin in the quarter was 30%, as compared to 31% in the same quarter of 2025, including significant freight cost increases of roughly $2 million impact in the quarter, and weaker overall factory absorption.
In spite of this Q2 performance, the first half gross margin improved by 100 basis points and ended at 30%, as compared to 29% a year ago. Adjusted EBITDA in the quarter was $6.6 million, a decrease of $4.4 million from $11 million in the second quarter of 2025, driven by lower sales, much higher freight, and weaker manufacturing efficiencies, partially offset by higher variable cost margins and lower operating expenses. On a year-to-date basis, however, adjusted EBITDA increased by more than 20% to $17 million as compared to $14 million in the first half of 2025.
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Adjusted operating expenses, which exclude items such as transformation cost and asset impairment cost, were $33.5 million or 28.5% of sales this quarter, compared to $34.6 million or 26.7% of sales in the year ago period. On a GAAP basis, expenses were down $1.2 million, with SG&A down approximately $2.1 million or 7%, partially offset by a 12% increase in research, product development, and regulatory spending, reflecting the company’s focus on new product development.
Turning to the balance sheet, we ended the quarter with $43.9 million in cash as compared to $70.9 million at the end of the first quarter. Cash on hand at the end of July increased as compared to June as a number of receivables were received in July. We continue to be laser-focused on cash management as the second quarter is typically our seasonal peak for working capital needs.
Total debt was approximately $267.6 million at quarter-end, as compared to $267 million at the end of the first quarter. Net debt was approximately $224.7 million at quarter end, compared to $194.7 million at the end of the first quarter. The sequential increase in net debt is due to normalization of our accounts payable, change in early pay strategies from certain key customers driving up accounts receivable, and generally peak working capital needs in the second quarter. Inventories were $181 million as compared to $191 million in the second quarter of last year, a $10 million improvement reflecting tighter production planning and working capital discipline.
I will turn the call back to Dak for some final comments.
Douglas Kaye III - Chief Executive Officer, American Vanguard Corporation
Thank you, David. Before I open the call up for questions, I want to briefly review and remind investors and all our stakeholders of our key strategic areas of focus and goals going forward. As I’ve said many times, but will continue to reiterate, accountability is about results, and as a public company, those results come back to numbers. We are focused on driving revenue growth, improved or higher manufacturing utilization, greater operating cost efficiency, and lower overhead costs, which will lead to higher gross profit margins, higher operating margins, and sustainable higher EBITDA.
In the short term, we need to move our EBITDA margins into the double-digit area as soon as possible, and that is top priority. As I’ve indicated in recent calls, while we wait for an improvement in the agricultural economy, we are focused on the things we can control and executing our strategic business improvement plan, which we expect to enable us to deliver improved adjusted EBITDA as compared to 2025. We continue to expect to generate adjusted EBITDA of $44 million-$48 million in 2026 on sales of $530 million to $550 million.
Transcript Provided by
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From a revenue or top-line perspective, we expect to be north of $600 million in annualized run rate revenue by the back half of 2028, which is approximately 20% above our 2025 level. We will, of course, strive to beat this target, but improving on that timing will most likely depend on the U.S. and global agricultural markets performance over the next two years. Our growth needs to be matched by even greater focus and improvement in our productivity, efficiency, and overall cost structure, driving margins significantly higher.
Together, these should help us to generate solid free cash flow, which, along with lower net working capital, will enable us to drive net debt down over the next two years. This will position us well to refinance our debt. In summary, we are outperforming our peers in many ways in spite of difficult market conditions. Our operating leverage continues to improve, and we are setting the foundation for future growth through investment in new products, including additional dedicated staffing.
We acknowledge that there’s still a lot of work for us to do, and the second half of 2026 is very important to a successful 2026. We will continue to assume that in the short term, the external environment will do us no favors. Consequently, we need to control what we can control and at the same time, continue to execute on our plans for efficiency, growth, and greater profitability.
With that, operator, you can open up the call for questions.
Operator
Thank you. At this time, we will be conducting a question-and-answer session. [Operator Instructions]. The first question is from Wayne Pinsent with Gabelli. Please proceed.
Q: Hi, Dak. Thanks for taking my question and hope all is well. Just to start off, you touched on pricing in Mexico and I believe in Latin America, some of your competitors have been talking about increased pricing pressure there. Just wanted to get more color on what you’re seeing with your portfolio.
Douglas Kaye III - Chief Executive Officer, American Vanguard Corporation
Yeah. Thanks, Wayne, for the question, first off. Go ahead and start that up, didn’t mean to jump into there. But thanks for the question. As far as pricing, it’s not a decrease in pricing that we’re seeing. We’re seeing an increase in pricing, specifically, we mentioned the Brazilian market, with one of our big products there being a copper fungicide. It’s directly related to copper LME pricing. That underlying raw material cost of the product down in Brazil has gone up. And it’s a fairly elastic product, so as that cost position has gone up on the copper fungicide, the demand has gone down relative there. We are seeing increase in pricing around the globe in relation to freight.
Transcript Provided by
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Our costs, as we mentioned, has gone up quite a bit on freight in the last several months. We are passing that along in new pricing here in July. We are seeing price increases, and they seem to be taking hold at the moment.
Q: Okay, that’s great. Thanks for the clarification. Then, you touched on seeing farmer order patterns and them buying more in line. Just with some of those delayed orders and the maintaining guide for the year, what’s the level of confidence in orders? How’s the order book tracking and visibility for the rest of the year?
Douglas Kaye III - Chief Executive Officer, American Vanguard Corporation
Yeah. We still feel comfortable with our forecast, and we still feel that that is very achievable. What we saw in the second quarter is that we had some shipment delays in Q2 that rolled over into Q3. So the order book was actually pretty nice coming into Q3, in relation to what we probably saw last year. Yeah, so we feel good about Q3, and feel good about the rest of the year as well.
Q: Okay, great. Then just, I don’t know if it’s the first time you put it out, but the 2028 financial targets and priorities, that double digit EBITDA growth, is that in 2027 and 2028? So annualized, is that with some help from the market or is that just on what you feel you can control?
Douglas Kaye III - Chief Executive Officer, American Vanguard Corporation
Good question. It’s an annualized run rate, by the end, by the back half of 2028. Those are the expected targets. We do expect that we see the correctness in the agricultural market. If it doesn’t, we’ll make the appropriate changes to make sure that we continue on our path of progressing forward. It’s been a prolonged ag cycle down or trough. We do feel by 2027, 2028, we should see some remediation in that cycle and come out of it. But if it’s not there, we’ll continue to do the things we can do and control our own destiny.
Q: Okay, thanks. Just to clarify, because you said, in the back half run rate, is that lower in 2027, ramping up to a double digit growth in the back half of 2028, or is it double digit annualized?
Douglas Kaye III - Chief Executive Officer, American Vanguard Corporation
By the second half of 2028, we expect to be on an annualized rate of $600 million in sales.
Q: Okay. But you expect double the Oh, sorry, double digit EBITDA margin. Okay.
Douglas Kaye III - Chief Executive Officer, American Vanguard Corporation
Right. Double digit EBITDA. Yes. Double digit.
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Q: Got it. Okay. Thank you.
Operator
Okay. [Operator Instructions] Okay, we currently have no questions in the queue. I would like to turn the floor back to management for any closing remarks.
Douglas Kaye III - Chief Executive Officer, American Vanguard Corporation
Thank you everyone for taking the time today. We continue to value your support and look forward to a successful 2026.
Operator
This concludes today’s conference and you may disconnect your lines at this time. Thank you for your participation.
Transcript Provided by
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