American Vanguard (NYSE: AVD) trims 2025 loss, guides higher EBITDA on cost cuts
Rhea-AI Filing Summary
American Vanguard Corporation reported a challenging but improving 2025, with net sales of $515.1 million, down 6%, and a net loss of $49.9 million, substantially narrower than the prior year’s loss. Gross margin improved to 29% from 22% as cost controls and manufacturing efficiencies took hold.
The company generated Adjusted EBITDA of $39.2 million, roughly flat with 2024, and is targeting Adjusted EBITDA of $44–$48 million on 2026 sales of $530–$550 million. Management is rationalizing its Los Angeles manufacturing facility, expecting at least $4 million of annual savings, and relocating its headquarters from Newport Beach to Irvine for about $0.5 million in yearly savings.
American Vanguard replaced its revolving credit facility with two term loans, which it says extend maturities and strengthen liquidity, though at a higher average interest cost. The company also fully remediated all material weaknesses identified in the 2024 audit and continues to emphasize new product launches and digital initiatives to drive medium-term growth.
Positive
- None.
Negative
- None.
Insights
Losses narrowed and margins improved, but growth remains modest with continued execution risk.
American Vanguard reduced its net loss to $49.9 million in 2025 from $126.3 million in 2024, despite a 6% sales decline to $515.1 million. Gross margin rose to 29%, helped by lower costs, better manufacturing performance and a stronger specialty segment.
Adjusted EBITDA was essentially flat at $39.2 million, but management guides to $44–$48 million on 2026 sales of $530–$550 million. That outlook depends on cost savings from rationalizing the Los Angeles facility, headquarters relocation, higher utilization at Axis, Alabama and supply-chain improvements.
The switch from a revolving credit facility to term loans increases average interest expense but provides longer-dated funding for a $174 million debt load as of year-end 2025. Full remediation of prior material weaknesses and a pipeline that targets at least $100 million in medium-term new-product revenue support the turnaround narrative, but actual results will hinge on agricultural market recovery and successful product launches through 2031.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
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Item 2.02 Results of Operations and Financial Condition.
On March 16, 2026, American Vanguard Corporation (the “Company”) issued a press release announcing its financial results for the three- and twelve-month periods ended December 31, 2025. The full text of the press release is linked hereto as Exhibit 99.1 and is incorporated herein by reference.
Also on March 16, 2026, the Company held its previously announced earnings call regarding its financial results for the three- and twelve-month periods ended December 31, 2025. A transcript of the earnings call is attached hereto as Exhibit 99.2 and is incorporated herein by reference.
The information furnished under Item 2.02 and Item 9.01 of this Current Report on Form 8-K, including Exhibit 99.1 and 99.2 to this Current Report on Form 8-K, shall not be deemed “filed” for purposes 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.
| Exhibit No. |
Description | |
| 99.1 | Press Release dated March 16, 2026 of Registrant regarding financial results for the three and twelve-month periods ended December 31, 2025 | |
| 99.2 | Transcript of earnings call held March 16, 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, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| AMERICAN VANGUARD CORPORATION | ||||||
| Date: March 18, 2026 | By: | /s/ Timothy J. Donnelly | ||||
| Timothy J. Donnelly | ||||||
| Chief Information Officer, General Counsel & Secretary | ||||||
Exhibit 99.1
|
FOR IMMEDIATE RELEASE |
American Vanguard Reports Full Year 2025 Results
Company Extends and Expands Its Credit Capacity Through the Establishment of Two Term Loans
Forecasts Adjusted EBITDA in a range of $44 - $48 million in 2026
Announces the Company will be rationalizing its Los Angeles manufacturing facility
Newport Beach, CA | March 16, 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 financial year ended December 31, 2025.
Financial and Operational Highlights for 2025 – versus 20241:
| • | Net sales of $515 million vs. $547 million; |
| • | GAAP net loss of $50 million vs $126 million; |
| • | Adjusted EBITDA2 of $39.2 million vs. $39.1 million; |
| • | The Company has entered in two new term loans agreements totaling $285 million |
Dak Kaye, CEO of American Vanguard, stated “2025 was a pivotal year for American Vanguard as we continue to make progress on the execution of our business improvement plans. Initiatives that we implemented early last year have resulted in increased margins, in an agricultural economy that is just beginning to recover. While we have accomplished much in 2025, we expect even better results in 2026. We have made the difficult decision to significantly reduce activities at the Company’s Los Angeles manufacturing facility. This is the Company’s oldest facility, and in today’s environment, is no longer competitive. We would like to thank our dedicated team members at this location. We will be assisting the affected employees as they transition to new opportunities. Further, savings will also be realized from the Company’s previously announced move of the corporate headquarters from Newport Beach, California, scheduled for mid-2026.”
Mr. Kaye continued, “We also have replaced our revolving credit facility with term loans from lenders led by Centerbridge Partners and BMO. This transaction meaningfully strengthens American Vanguard’s capital structure and liquidity position. This financing extends our maturities, enhances balance-sheet flexibility, and positions the Company to remain focused on executing its strategic and operational priorities. We now intend to position American Vanguard for growth, with a portfolio of new products that will begin launching this year.”
Mr. Kaye concluded, “The Company has also made personnel changes to the management of our commercial team, which I believe will reenergize this group. With new products and a renewed customer centric focus, there is an opportunity to meaningfully increase volumes, that will lead to improved efficiency in our factory operations, higher margins, and ultimately to higher future profitability. I expect the Company to generate adjusted EBITDA in a range of $44 - $48 million in 2026.”
| 1 | 2024 GAAP figures include adjustments related to a product recall. |
| 2 | Adjusted earnings before interest, taxes, depreciation, and amortization (Adjusted EBITDA) is not a financial measure calculated and presented in accordance with U.S. generally accepted accounting principles (GAAP) and should not be considered as an alternative to net (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
David Johnson, Chief Financial Officer stated, “I am pleased to see our business improvement plans begin to yield tangible results. Our 2025 gross profit margin and operating costs both improved as compared to 2024. These results are important given the backdrop of a continued weak overall agricultural market. As planned, we continued to wind down spending on our business improvement action plans. In 2026, we will continue to invest in business improvements including rationalization of some activity at the LA facility, which will result in short term cash and non-cash expenses followed by longer term factory operating efficiencies. Finally, I am particularly pleased to be able to report that the Company has fully remediated all of the material weaknesses identified in connection with the 2024 audit. I want to thank the entire global finance team and many other non-finance employees who have all worked together to achieve this result”.
Mr. Johnson continued, “As we look forward to 2026, I feel that a lot of work has been done to improve the Company’s organization, approach to new product introductions, operations and capital structure. Further, we will continue to focus on using technology to improve our business by completing the global implementation of our standard ERP platform. These actions will allow the Company to grow as the global Ag Chem market continues to improve.”
Earnings Conference Call
The Company will be hosting an earnings conference call at March 16, 2026 at 4:30 pm Eastern Time/1:30 pm Pacific Time.
The conference call can be accessed through the following link: https://www.webcaster5.com/Webcast/Page/3070/53740
A replay of this event can be accessed through the Company website.
The Company plans to post on the Investor Relations section of the Company’s website a supplemental presentation that should be read in connection with this earnings release.
About American Vanguard
American Vanguard Corporation is a diversified specialty and agriculture products company that develops and markets products for crop protection and management, turf and ornamentals management, and public and animal health. Over the past 20 years, through product and business acquisitions, the Company has significantly expanded its operations and now has more than 1,000 product registrations worldwide. To learn more about the Company, please reference www.american-vanguard.com.
The Company, from time to time, may discuss forward-looking information. Except for the historical information contained in this release the matters set forth in this press release include forward-looking statements. These statements can be identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements often use words such as “believe,” “expect,” “anticipate,” “intend,” “estimate,” “project,” “outlook,” “forecast,” “target,” “trend,” “plan,” “goal,” or other words of comparable meaning or future-tense or conditional verbs such as “may,” “will,” “should,” “would,” or “could.” These forward-looking statements are based on the current expectations and estimates by the Company’s management and are subject to various risks and uncertainties that may cause results to differ from management’s current expectations. Such factors include risks detailed from time-to-time in the Company’s SEC reports and filings. All forward-looking statements, if any, in this release represent the Company’s judgment as of the date of this release. The Company disclaims any intent or obligation to update these forward-looking statements.
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, which is a non-GAAP financial measure. This measure 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 income or net income attributable to the Company, adjusted for non-controlling interests, depreciation and amortization, provision for income taxes and interest expense. We define Adjusted EBITDA as EBITDA as further adjusted for certain items management believes 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 2025 and 2024 that included non-recurring expenses and the profit on sale of an asset that was not held for sale. 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.
3
Investor Representative
Alpha IR Group
Robert Winters
Robert.winters@alpha-ir.com
(929) 266-6315
4
CONSOLIDATED BALANCE SHEETS
December 31, 2025 and 2024
(In thousands, except share data)
| 2025 | 2024 | |||||||
| Assets |
||||||||
| Current assets: |
||||||||
| Cash |
$ | 12,425 | $ | 12,514 | ||||
| Receivables: |
||||||||
| Trade, net of allowance for credit losses of $11,733 and $9,190 respectively |
160,511 | 169,743 | ||||||
| Other |
7,278 | 4,699 | ||||||
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|
|
|
|||||
| Total receivables, net |
167,789 | 174,442 | ||||||
|
|
|
|
|
|||||
| Inventories |
176,034 | 179,292 | ||||||
| Prepaid expenses and other assets |
9,668 | 7,615 | ||||||
| Income taxes receivable |
4,606 | 5,030 | ||||||
|
|
|
|
|
|||||
| Total current assets |
370,522 | 378,893 | ||||||
| Property, plant and equipment, net |
53,036 | 58,169 | ||||||
| Operating lease right-of-use assets, net |
16,793 | 19,735 | ||||||
| Intangible assets, net |
138,746 | 150,497 | ||||||
| Goodwill |
— | 19,701 | ||||||
| Deferred income tax assets |
2,637 | 1,242 | ||||||
| Other assets |
14,803 | 8,484 | ||||||
|
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|
|
|
|||||
| Total assets |
$ | 596,537 | $ | 636,721 | ||||
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| Liabilities and Stockholders’ Equity |
||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ | 87,505 | $ | 69,159 | ||||
| Customer prepayments |
33,094 | 52,675 | ||||||
| Accrued program costs |
52,227 | 69,449 | ||||||
| Accrued expenses and other payables |
28,261 | 31,989 | ||||||
| Operating lease liabilities, current |
5,765 | 6,136 | ||||||
| Income taxes payable |
2,594 | 2,942 | ||||||
|
|
|
|
|
|||||
| Total current liabilities |
209,446 | 232,350 | ||||||
| Long-term debt |
174,000 | 147,332 | ||||||
| Operating lease liabilities, long-term |
11,621 | 14,339 | ||||||
| Deferred income tax liabilities |
8,150 | 7,989 | ||||||
| Other liabilities |
923 | 1,601 | ||||||
|
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|
|
|||||
| Total liabilities |
404,140 | 403,611 | ||||||
|
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|
|||||
| Commitments and contingent liabilities (Notes 5 and 10) |
||||||||
| 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 34,923,562 shares in 2025 and 34,794,548 shares in 2024 |
3,492 | 3,479 | ||||||
| Additional paid-in capital |
117,106 | 114,679 | ||||||
| Accumulated other comprehensive loss |
(12,000 | ) | (18,729 | ) | ||||
| Retained earnings |
155,000 | 204,882 | ||||||
|
|
|
|
|
|||||
| 263,598 | 304,311 | |||||||
| Less treasury stock at cost, 5,915,182 shares in 2025 and 5,915,182 in 2024 |
(71,201 | ) | (71,201 | ) | ||||
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|
|
|
|||||
| Total stockholders’ equity |
192,397 | 233,110 | ||||||
|
|
|
|
|
|||||
| Total liabilities and stockholders’ equity |
$ | 596,537 | $ | 636,721 | ||||
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|
|
|
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5
CONSOLIDATED STATEMENTS OF OPERATIONS
Years ended December 31, 2025, 2024 and 2023
(In thousands, except per share data)
| 2025 | 2024 | 2023 | ||||||||||
| Net sales |
$ | 515,114 | $ | 547,306 | $ | 579,371 | ||||||
| Cost of sales |
(367,553 | ) | (426,989 | ) | (400,207 | ) | ||||||
|
|
|
|
|
|
|
|||||||
| Gross profit |
147,561 | 120,317 | 179,164 | |||||||||
| Operating expenses |
||||||||||||
| Selling, general and administrative |
(110,633 | ) | (119,634 | ) | (116,887 | ) | ||||||
| Research, product development and regulatory |
(23,161 | ) | (32,662 | ) | (38,025 | ) | ||||||
| Product liability claims |
(9,730 | ) | — | — | ||||||||
| Transformation |
(7,187 | ) | (20,162 | ) | (957 | ) | ||||||
| Asset impairments |
(25,395 | ) | (50,414 | ) | — | |||||||
| Gain from sale of assets |
249 | 1,000 | — | |||||||||
|
|
|
|
|
|
|
|||||||
| Operating (loss) income |
(28,296 | ) | (101,555 | ) | 23,295 | |||||||
| Change in fair value of equity investments, net |
(437 | ) | (2,356 | ) | (359 | ) | ||||||
| Interest and other expenses, net |
(18,470 | ) | (16,547 | ) | (12,639 | ) | ||||||
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|
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|
|||||||
| (Loss) income before provision for income taxes |
(47,203 | ) | (120,458 | ) | 10,297 | |||||||
| Provision for income taxes |
(2,679 | ) | (5,882 | ) | (2,778 | ) | ||||||
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|||||||
| Net (loss) income |
$ | (49,882 | ) | $ | (126,340 | ) | $ | 7,519 | ||||
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| (Losses) earnings per common share—basic |
$ | (1.75 | ) | $ | (4.50 | ) | $ | 0.27 | ||||
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| (Losses) earnings per common share—assuming dilution |
$ | (1.75 | ) | $ | (4.50 | ) | $ | 0.26 | ||||
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|||||||
| Weighted average shares outstanding—basic |
28,426 | 28,059 | 28,128 | |||||||||
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|||||||
| Weighted average shares outstanding—assuming dilution |
28,426 | 28,059 | 28,533 | |||||||||
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6
AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES
ANALYSIS OF SALES
(In thousands)
| 2025 | 2024 | $ Change | % Change | |||||||||||||
| Net sales: |
||||||||||||||||
| U.S. crop |
$ | 221,391 | $ | 228,327 | $ | (6,936 | ) | -3 | % | |||||||
| U.S. non-crop |
90,290 | 82,400 | 7,890 | 10 | % | |||||||||||
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|
|||||||||||
| Total U.S. |
311,681 | 310,727 | 954 | 0 | % | |||||||||||
| International |
203,433 | 236,579 | (33,146 | ) | -14 | % | ||||||||||
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| Total net sales |
$ | 515,114 | $ | 547,306 | $ | (32,192 | ) | -6 | % | |||||||
| Total cost of sales |
$ | (367,553 | ) | $ | (426,989 | ) | $ | 59,436 | -14 | % | ||||||
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| Total gross profit |
$ | 147,561 | $ | 120,317 | $ | 27,244 | 23 | % | ||||||||
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| Total gross margin |
29 | % | 22 | % | ||||||||||||
7
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years ended December 31, 2025, 2024 and 2023
(In thousands)
| 2025 | 2024 | 2023 | ||||||||||
| Cash flows from operating activities: |
||||||||||||
| Net (loss) income |
$ | (49,882 | ) | $ | (126,340 | ) | $ | 7,519 | ||||
| Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: |
||||||||||||
| Depreciation and amortization of property, plant and equipment and intangible assets |
18,742 | 22,322 | 21,780 | |||||||||
| Amortization of other long-term assets |
21 | 226 | 1,754 | |||||||||
| Amortization of deferred loan fees |
1,906 | 536 | 254 | |||||||||
| Gain on disposal of property, plant and equipment |
(75 | ) | (1,000 | ) | — | |||||||
| Impairment of assets |
25,395 | 50,414 | — | |||||||||
| Provision for estimated credit losses |
2,360 | 2,319 | 1,935 | |||||||||
| Stock-based compensation |
2,016 | 4,412 | 6,138 | |||||||||
| Deferred income taxes |
(1,351 | ) | 1,452 | (9,710 | ) | |||||||
| Changes in liabilities for uncertain tax positions or unrecognized tax benefits |
(201 | ) | (1,547 | ) | (508 | ) | ||||||
| Change in equity investment fair value |
437 | 2,356 | 359 | |||||||||
| Lease obligations and non-cash lease expense, net |
(147 | ) | (37 | ) | 256 | |||||||
| Unrealized foreign currency transaction (gains) losses |
(193 | ) | 804 | (581 | ) | |||||||
| Changes in assets and liabilities associated with operations, net of business combinations: |
||||||||||||
| Decrease (increase) in receivables |
7,697 | 7,481 | (20,278 | ) | ||||||||
| Decrease (increase) in inventories |
6,287 | 35,178 | (27,315 | ) | ||||||||
| Decrease (increase) in income tax receivable/payable |
(9 | ) | (3,775 | ) | 3,568 | |||||||
| (Increase) decrease in prepaid expenses and other assets |
(8,638 | ) | (687 | ) | 1,269 | |||||||
| Increase (decrease) in accounts payable |
15,434 | 3,714 | (2,287 | ) | ||||||||
| Decrease in customer prepayments |
(19,582 | ) | (12,882 | ) | (45,079 | ) | ||||||
| (Decrease) increase in accrued program costs |
(17,384 | ) | 1,775 | 7,244 | ||||||||
| (Decrease) increase in accrued expenses and other payables |
(4,024 | ) | 17,202 | (5,066 | ) | |||||||
|
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|||||||
| Net cash (used in) provided by operating activities |
(21,191 | ) | 3,923 | (58,748 | ) | |||||||
|
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|
|
|
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|
|||||||
| Cash flows from investing activities: |
||||||||||||
| Capital expenditures |
(3,919 | ) | (7,279 | ) | (11,878 | ) | ||||||
| Proceeds from disposal of property, plant and equipment |
477 | 1,065 | 242 | |||||||||
| Acquisitions of business and product line, net of cash acquired |
— | — | (5,195 | ) | ||||||||
| Intangible assets |
(165 | ) | (409 | ) | (186 | ) | ||||||
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|||||||
| Net cash used in investing activities |
(3,607 | ) | (6,623 | ) | (17,017 | ) | ||||||
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| Cash flows from financing activities: |
||||||||||||
| Payments under line of credit agreement |
(223,465 | ) | (294,356 | ) | (172,500 | ) | ||||||
| Borrowings under line of credit agreement |
250,134 | 302,787 | 259,100 | |||||||||
| Payment of deferred loan fees |
(3,389 | ) | (850 | ) | — | |||||||
| Net receipt from the issuance of common stock under ESPP |
629 | 901 | 981 | |||||||||
| Net (payment) receipt from the exercise of stock options |
(205 | ) | — | 46 | ||||||||
| Payment from common stock purchased for tax withholding |
— | (1,432 | ) | (1,967 | ) | |||||||
| Repurchase of common stock |
— | — | (15,539 | ) | ||||||||
| Payment of cash dividends |
— | (2,510 | ) | (3,384 | ) | |||||||
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| Net cash provided by financing activities |
23,704 | 4,540 | 66,737 | |||||||||
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|||||||
| Net increase (decrease) in cash |
(1,094 | ) | 1,840 | (9,028 | ) | |||||||
| Effect of exchange rate changes on cash |
1,005 | (742 | ) | 116 | ||||||||
| Cash at beginning of year |
12,514 | 11,416 | 20,328 | |||||||||
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| Cash at end of year |
$ | 12,425 | $ | 12,514 | $ | 11,416 | ||||||
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8
AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES
RECONCILIATION OF NET INCOME TO EBITDA
For the years ended December 31, 2025 and 2024
| For the years ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Net income |
$ | (49,882 | ) | $ | (126,340 | ) | ||
| Provision for income taxes |
2,679 | 5,882 | ||||||
| Interest expense, net |
18,470 | 16,243 | ||||||
| Depreciation and amortization |
18,763 | 22,548 | ||||||
| Stock compensation expense |
2,016 | 4,412 | ||||||
| Gain on sale of fixed assets |
(249 | ) | (1,000 | ) | ||||
| Transformation costs |
7,187 | 20,162 | ||||||
| Other one-time charges |
3,907 | 60,799 | ||||||
| Goodwill and intangibles asset impairments |
25,300 | 36,395 | ||||||
| Product liability claims |
10,485 | — | ||||||
| Other adjustments |
531 | — | ||||||
|
|
|
|
|
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| Adjusted EBITDA3 |
$ | 39,207 | $ | 39,101 | ||||
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| 3 | 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. |
9
Exhibit 99.2
Transcript of
American Vanguard Corporation
Fourth Quarter 2025 Earnings Conference Call
March 16, 2026
Participants
Anthony Young - Director of Investor Relations, American Vanguard Corporation
Douglas Kaye III - Chief Executive Officer, American Vanguard Corporation
David Johnson - Chief Financial Officer, American Vanguard Corporation
Analysts
Michael Harrison - Seaport Research Partners
Rosemarie Morbelli - Gabelli Funds
Presentation
Operator
Greetings. Welcome to the American Vanguard Fourth Quarter 2025 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, Anthony Young, Director of Investor Relations. You may begin.
Anthony Young - Director of Investor Relations, American Vanguard Corporation
Thank you, operator. Good afternoon and welcome to American Vanguard’s full year 2025 earnings review. Our prepared remarks will be led by Dak Kaye, Chief Executive Officer; and David Johnson, Chief Financial Officer. After the 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 the 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 is 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, Anthony, and welcome, everyone, to our fourth quarter 2025 earnings conference call. While 2025 was a challenging year for the agricultural sector, I am pleased with the progress that has been made at American Vanguard. We have executed on our business, operational, digital, and organizational initiatives. We have hired quality, experienced colleagues. We have improved our safety metrics across the board. We have focused our team on developing new products while reducing manufacturing and operating costs. These improvements have positively impacted 2025’s results, but more importantly, we are positioning the company for long-term success.
Additionally, for over a year now, the team has been focused on finding a capital structure that will allow us to pay down our expiring credit facility, while providing the maximum amount of financial flexibility for future growth. We believe that we have found the right solution through two term loans, one from Centerbridge Partners and one from the existing BMO-led syndicate. The full details of these term loans can be found in our SEC filing.
While we are paying a higher interest rate on average than our previous revolving credit facility, we now have a significant runway to further improve our operations and show the investment community that the higher earnings power that I believe are possible. Furthermore, the team is now solely focused on running the business and delivering the sales and margins we expect.
As we look to position the company for the future, we have made the decision to rationalize the Los Angeles manufacturing facility. The LA plant is the company’s oldest facility and is no longer competitive in the current environment. We thank the American Vanguard team members at this location for their outstanding service and dedication to running a safe facility over the years of operation. We plan to help many of them pursue the next steps in their careers, but in order for the broader company to remain competitive, it was necessary to take this very difficult step. This rationalization will save the company at least $4 million annually. As we move additional volumes through our Axis, Alabama site, we expect to improve utilization there, which will also improve our cost absorption and ultimately our profitability.
As we have previously announced, the company will be moving its global headquarters from Newport Beach to a smaller, more cost effective space in Irvine, California. We estimate this move will save the company approximately $0.5 million annually and will allow our corporate team to be in a more collaborative, modern office environment. We expect the rationalization of the LA facility and the headquarters relocation to both be complete by the end of the second quarter of this year. These are two significant milestones for us, but not the last, as we will continually work to improve the cost structure of the company.
Turning to the 2025 results, the company generated $39.2 million of adjusted EBITDA, which was slightly better than we generated in the previous year. Sluggish sales in the fourth quarter prevented the company from achieving our adjusted EBITDA target of $40 million to $44 million. That said, we were successful in cutting more costs than we initially estimated and completed a joint development agreement that partially offset the lower sales.
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The supply chain and logistics team that we hired last year continues to find ways to decrease our material cost and also has improved our warehousing and freight expenses. We attained these improvements even before the implementation of our new software systems that are expected to be fully rolled out later this year, which should allow us to further decrease our inventory and raw material cost. I expect our inventory turns to increase in 2026 and thereafter as we work to get inventory turns to a goal of 2.25. Not only will this have a positive impact on our gross profit, but I also expect that it will decrease the amount of working capital required to operate the business.
Cost containment has been a top priority, but it’s also important to highlight that there is a growth story at American Vanguard. As I’ve stated in previous conference calls, I was surprised where the development portfolio was when I joined the company. We have subsequently taken steps to improve in this area while at the same time keeping a watchful eye on our R&D expenses. We have a chart included in our presentation that reflects the new focus on product development. We have already launched one new product in 2026, Duro LQ, and we expect to launch five new products in North America in total this year.
We have a slate of new registrations internationally as well. As we expand the registration footprint and extend the lifetime of our products in multiple jurisdictions, we expect to register at least 25 new products in North America by 2031. New products typically have a higher margin contribution than the existing portfolio, so bringing these new products to market will have a positive impact on revenue and our margin profile.
Bottom line, we estimate that we can generate at least an additional $100 million of annual revenue globally over the medium-term from new products that are under various stages of development. In addition to new products, we also plan to be even more responsive to our customers’ needs. I believe we can drive more volume through our factories by doing a better job of listening to our customers. This was part of the reason why we appointed a new Chief Commercial Officer, Mike DiPaola. Mike brings 30 years of ag experience, enthusiasm, and aggressiveness to our commercial operation that has been missing. As we increase our factory utilization, we can spread our fixed costs over more units, improving our profitability.
I will now address what we have been observing in the broader agricultural economy. The industry has yet to recover from a downturn that started in 2023. While agricultural commodities are recovering from the low levels that were experienced during the summer of 2025, they remain well below industry observers consider to be historically normal levels. The worst of the industry destocking does appear to be in the past, but distributors have shown no inclination to restock their inventories. Farmer liquidity is a concern after several years of depressed commodity prices. Both cotton and corn acreage are forecasted to be slightly down, while soybean acreage is forecasted to increase. All in all, industry observers are forecasting a relatively stable year with respect to planted acreage.
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We would note that growers are making more last-minute crop decisions than ever before, and geopolitical issues are weighing heavily on those decisions. There are some green shoots as the farmer support payments seem to be rolling out. Higher oil prices tend to drive up demand for biofuels that utilize both corn and soybean. Further, higher oil prices increase synthetic fabric costs, leading to greater demand for cotton.
Before I provide our 2026 targets, I would like to highlight an issue that impacted our company’s financial performance. Typically, American Vanguard collects a significant amount of cash in the fourth quarter from our customers. We have historically referred to this industry dynamic as prepay. This is an industry-wide strategy that most of our customers and our competitors utilize. Due to the financial strain that one of our competitors was under, the channel pulled back from prepay programs across the market. This has led to an increase in our nominal debt levels year-over-year, as we typically allocate this capital to paying down debt at year end. David will have more on this in his prepared remarks.
As we wait for an improvement in the agricultural economy, our business improvement plan should allow us to improve adjusted EBITDA as compared to 2025. We expect to generate adjusted EBITDA of $44 million to $48 million in 2026 on sales of $530 million to $550 million. We are excited about the prospect of better performance in the coming years, as we continually launch new products. We believe future earnings power is substantially higher and will allow the company to pay down its debt and make investments in areas which will lead to long-term growth.
I’ll now turn the call over to our CFO, David Johnson. David?
David Johnson - Chief Financial Officer, American Vanguard Corporation
Thanks, Dak. Good afternoon, everyone. I would like to start by thanking the team for all the hard work that went into completing the debt refinancing. After looking at numerous structures and holding conversations with a broad cross-section of the financing sector, we selected a term loan structure that includes no equity dilution, provides stability in difficult industry conditions, and gives us the option to lower our debt as our results improve.
On another positive note, I’m also very pleased to report that we have remediated all the material weaknesses that were identified at the time of the 2024 audit, a Herculean feat in light of the refinancing work as well as the normal audit work. This is a huge accomplishment in a very short timeframe. We are pleased to report that our Form 10-K for 2025 will be filed today.
Now, turning to our financial performance for 2025, the company generated sales of $515 million for 2025 compared to $547 million in the prior year, a decrease of 6%. This was slightly below our target range of $520 million to $535 million. Sales in our international operations were down 14% due to elevated channel inventories in Mexico and a persistent drought in Australia, while sales in our U.S. crop business were similar to sales in the year-ago period.
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On a positive note for the U.S. crop business, it seems that destocking has substantially abated and products on the ground are now approximately equal to our sales, indicating a low level of channel inventory in the domestic market. However, customers have not yet shown an inclination to buy inventory and continue buying on a just-in-time basis. Our specialty sales improved by 10% driven by securing a joint development agreement, our business-to-business sales, along with growth for our mosquito vector solutions.
Our gross profit margin is trending in the right direction, with this metric increasing to 29% in 2025. At the same time, our OpEx as a percentage of sales slightly decreased to 27%. Given some of the initiatives that we are working on, we expect further improvements in 2026 and beyond for both metrics. For the full year 2025, we generated $39.2 million of adjusted EBITDA, as compared to $39.1 million in the prior year. Our cost containment efforts were partially offset by a softer sales environment, but we helped ourselves by improving our manufacturing performance.
Now, turning to our balance sheet, our single largest headwind at the end of 2025 was the difference in prepay as compared to 2024. The company collected approximately $50 million less in prepay in 2025, which resulted in slightly increased debt at year-end. We plan to further decrease our net working capital this year and continue work on this area going forward. I believe that we can operate this company more efficiently in the future, as a result of the experienced supply chain leaders we have put in place in 2025, as well as through modern management techniques and software packages we’re implementing that will allow us to react more quickly to industry conditions.
With respect to capital spending, we spent approximately $4 million in 2025. We will likely spend more than that in 2026, but will remain in the $5 million to $10 million range.
With that, I’ll turn the call back to Dak.
Douglas Kaye III - Chief Executive Officer, American Vanguard Corporation
Thank you, David. Before opening the call to questions, I would like to take a moment to reflect on what has been a challenging but transformational year for American Vanguard. As most of you know, 2025 was my first full year at the company. The last slide of the presentation, titled Plan 2030, shows where American Vanguard was and where it is going. As we achieve these goals, I believe we will generate higher revenue, better EBITDA, and more cash flow.
In closing, I would like to thank the team for all the hard work that was accomplished in 2025. But I would also like to challenge everyone to do even more in 2026, as I believe we continue to have a bright future in front of us.
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With that, I’ll open the call to questions. Operator?
Operator
Thank you. At this time, we will be conducting a question-and-answer session. [Operator Instructions] The first question comes from Mike Harrison with Seaport Research Partners. Please proceed.
Q: Hi, good afternoon.
Douglas Kaye III - Chief Executive Officer, American Vanguard Corporation
Good afternoon.
Q: Was hoping that maybe we could start just with Q4 and kind of coming in below expectations on the revenue line as well as the EBITDA line. It sounds like most of that was on the international side, but I was hoping you could just give a little bit more color on what dragged on revenue, and in terms of the margin performance, was that in line with expectations, and it was just a revenue shortfall that led to the EBITDA shortfall, or were there some issues on the cost side as well?
Douglas Kaye III - Chief Executive Officer, American Vanguard Corporation
Okay. Thanks, Mike, for the question. Yes, I mean, it was both international and domestic. I would say that the domestic was primarily due to the U.S. crop related to Metam sales from lower potato acres and demand for those products, specifically Metam, so insecticides were also down in the U.S. But we did have some positive improvements in our herbicide sales with the ZALO, so that was a big positive as well as impact in the fourth quarter.
Internationally, as David mentioned, is primarily related to the drought that we saw in Australia as well as channel inventory in Mexico. They have not gone through the destocking process to the extent that the U.S. has. From a cost containment standpoint, I think we did a really good job in Q4, and our manufacturing expenses were also in good shape in Q4 as well. We continued to do improvement there, and I think that is controlling the things that we can control and controlling them well. So we did see improvement in the cost controls and manufacturing efficiencies in the fourth quarter.
Q: All right. And in terms of your long-term transformation plans, those have been in place for a while. I’m just kind of curious on how the LA closure and the headquarter relocation fit in. Were those kind of contemplated when you initially came out with this 15% EBITDA margin target, or should we think of these as maybe accelerating the process of achieving that 15% target?
Douglas Kaye III - Chief Executive Officer, American Vanguard Corporation
Good question. Yeah, when I first came on, those two were not directly part of the transformational plan. As we transitioned the transformational plan into our business improvement plan or business improvement initiatives, the LA facility rationalization became more apparent as we started to analyze our capacity utilization across the board and started drawing up plans to move production from the LA site to the access site. So that was not initially part of the initial transformation plan, nor was the moving of the office, the headquarters. So those have been initiatives that we’ve undertaken subsequent to the transformational plan.
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The initial transformational plan did have some very good aspects around the digital transformation, commercialization, rationalization of product portfolio, and rationalization of changes in our go-to-market structure in different areas around the world, specifically in Brazil and some in Central America, as well as our growth strategy for our specialty, our non-crop business. Those are still ongoing, along with various other initiatives that came out of that.
Does that answer the question, Mike?
Q: Yeah, that’s perfect. And then I had kind of two questions related to cash flow and to the debt structure going forward. It is great to see that you guys have the new term loans in place. But I’m curious, are there any cash proceeds associated with the closure of the Los Angeles facility or the headquarter migration?
Douglas Kaye III - Chief Executive Officer, American Vanguard Corporation
Proceeds, you mean from the sale of it or from the...
Q: Yeah. Are there assets or land or anything that you’ll be able to sell?
Douglas Kaye III - Chief Executive Officer, American Vanguard Corporation
No. We’ll actually continue to operate the LA facility as a formulation and warehousing site going forward. So it’ll continue at a much, much lower scale of operations. There’ll be no sale, at least initially. There may be some sales of equipment long-term as we get to that point, but at the moment, we’re not planning to sell any equipment there. We could down the road. As far as the office space, it was a leased space, high rent, not very conducive to running a business, quite honestly, spread out. And so, I’m really looking forward to moving in the new headquarters, which is more collaborative, modern work environment for the team. So it’s down the road in Irvine and looking forward to that. But there’s no pickup in proceeds around that except for the headquarters is a $0.5 million a year savings from the lease. And then the savings on LA netted out is about $4 million annually going forward.
Q: Right. Understood. Okay. And then just in terms of cash flow, I understand the prepayments were unusually low in Q4 and that kind of dragged down what cash flow looked like in 2025. But I’m curious, with the software that you’re planning to roll out and your expectations around working capital for 2026, I’m just curious, is it possible that we get to free cash flow positive in 2026, given your expectations for CapEx in the $5 million to $10 million range?
Douglas Kaye III - Chief Executive Officer, American Vanguard Corporation
I believe so, Mike. I believe so, yes. I think when you look at our adjusted EBITDA projections, less our interest in CapEx, we should be in a favorable cash flow position for 2026.
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Q: All right. Well, that’s great to hear. I will turn it back. Thanks very much.
Operator
The next question comes from Rosemarie Morbelli with Gabelli Funds. Please proceed.
Q: Thank you. Good afternoon, everyone.
Douglas Kaye III - Chief Executive Officer, American Vanguard Corporation
Good afternoon, Rosemarie.
Q: I was just wondering, Dak, when you talk about the $100 million of the mid-term coming in from new products, when I look at your slides at the moment, you are only showing one example as the bullhorn insecticide. Can you give us a little more detail as to what you expect? I mean, is that going, are your new products also coming from fungicide, from herbicide? And then, what is your definition of mid-term?
Douglas Kaye III - Chief Executive Officer, American Vanguard Corporation
Great questions, Rosemarie. There’s more products coming, of course, as I mentioned that, but they’re coming from insecticides and herbicides primarily. Those are the main focus based upon the historical nature of the company as we’re taking the assets that we have in hand and utilizing them going forward with new formulations and new products. And that’s where the new products are coming from. New products are classified or defined as less than 5 years from launch. That’s how we’re going to define them.
The second half of your question was?
Q: Well, I was just wondering $100 million compared to your current revenues expectations of $540 million at the midpoint for next year, that is a big increase. And so, I was wondering, first of all, how comfortable you are with that $100 million? And then, what is the timing? You say mid-term. Can you quantify mid-term?
Douglas Kaye III - Chief Executive Officer, American Vanguard Corporation
Yeah, I am confident on the $100 million. That has been sensitized somewhat based upon experiences that I have with products, bringing products to launch. So, I am comfortable with the $100 million. Medium-term is defined from around 2030 to 2031 is what we’re talking about from that standpoint. So, not around the corner. As I’ve expressed in previous calls, we got ourselves in a hole to launch or bring a new product to launch. Generally speaking, takes around 3 years minimum to go through the regulatory process to get it to a registered product that we can market and sell. So, that’s 3 years from idea creation to registration.
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We’ve got in a hole due to the focus that we had of an organization on the SIMPAS technology. So, we really only launched one product in 2025 in the U.S. otherwise, it’s been pretty bare. And that’s the reason we’re seeing an uptick in the new product sales starting in 2027, 2028, mostly in 2028 as we put these products into the portfolio for launching.
Q: Okay. Thank you. That is very helpful. And you talked about the high future earning powers of the company. So, currently, based on the midpoint of 2026 expectations, your EBITDA margin is about 8.5%. So, how high can it get and what type of top-line growth do you need to get there in addition to all of the steps you are taking lowering cost?
Douglas Kaye III - Chief Executive Officer, American Vanguard Corporation
Good question. We’ve had a stated goal of getting to 15% over the long-term, and that’s still a goal. We have a lot of things that have to come into fruition to make that happen, not only driving sales up around 4% to 6% – Dave, would you say we have in our plan 4% to 6%?
David Johnson - Chief Financial Officer, American Vanguard Corporation
Yeah.
Douglas Kaye III - Chief Executive Officer, American Vanguard Corporation
Our compounded annual growth rate and as well as reducing our cost structure or maintaining our cost structure, I still think that 27% is considerably high or relatively high, especially for our organization and where we sit in the model of the crop protection industry. So, we need to work on reducing that either as a combination of increasing sales or reducing our cost. I think manufacturing efficiencies, we have an ability there, and we will continue to show improvement there just by the sheer focus of the team, from Nolteanous’ team in the Manufacturing and Jared’s team in Operations focusing on controlling costs, better planning. Those going together will increase our profitability at the gross profit level.
Q: Okay. Thank you very much.
Douglas Kaye III - Chief Executive Officer, American Vanguard Corporation
Thank you, Rosemarie.
Operator
[Operator Instructions] Okay. We have no further questions in queue. I would like to turn the floor back to management for closing remarks.
Douglas Kaye III - Chief Executive Officer, American Vanguard Corporation
Yes, I would like to finalize by saying, by taking the necessary steps to rationalize our manufacturing footprint, focusing on new product development, creating demand for our products by listening to our customers, and continually being mindful of our costs, we will generate greater sales, more profitability, and cash flow, creating a long-term value for our shareholders.
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With that, I’ll thank you for your time today. Have a good day.
Operator
Thank you. This concludes today’s conference, and you may disconnect your lines at this time. Thank you for your participation.
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FAQ
How did American Vanguard (AVD) perform financially in 2025?
What guidance did American Vanguard (AVD) give for 2026 sales and EBITDA?
What restructuring actions is American Vanguard (AVD) taking with its facilities?
How did American Vanguard (AVD) change its capital structure in 2025?
What is American Vanguard’s (AVD) medium-term growth plan for new products?
Did American Vanguard (AVD) address prior internal control weaknesses?
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