AVD

MKT CAP $31.3MP/E —DIV YIELD —FCF YIELD -150.42%REV TTM $510.3M −3.5%NET INCOME −$54.6MNET DEBT $33M52W 1.05 – 5.41SEC XBRL · TTM TO Invalid Date

How AVD rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

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ITEM 8 Description Page No Financial Statements: Report of Independent Registered Public Accounting Firm Deloitte & Touche LLP ; Costa Mesa, California, PCAOB ID# 34 Consolidated Balance Sheets as of December 31, 2025 and 2024 Consolidated Statements of Operations for the Years Ended December 31, 2025, 2024 and 2023 Consolidated Statements of Comprehensive (Loss) Income for the Years Ended December 31, 2025, 2024 and 2023 Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2025, 2024 and 2023 Consolidated Statements of Cash Flows for the Years Ended December 31, 2025, 2024 and 2023 Notes to Consolidated Financial Statements REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and the Board of Directors of American Vanguard Corporation Newport Beach, California Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of American Vanguard Corporation and subsidiaries (the "Company") as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive (loss) income, stockholders' equity and cash flows, for each of the two years in the period ended December 31, 2025, and the related notes and the schedules listed in the Index at Item 15 (collectively referred to as the "financial statements").
In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 16, 2026, expressed an unqualified opinion on the Company's internal control over financial reporting.
Accrued Program Costs — Refer to Note 1 to the financial statements Critical Audit Matter Description The Company offers incentives and discounts to its customers based on various programs (“programs”).
As of December 31, 2025, accrued program costs were $54.6 million.
These programs represent variable consideration.
Depending on the nature of the program, the Company uses either the expected value or most likely amount method for determining the estimated variable consideration.
The Company compares individual sale transactions with programs to determine what, if any, program liabilities have been incurred and makes adjustments to accrued program costs.
Given the nature of the data utilized to analyze certain accrued program costs, and the volume of programs data required to estimate total variable consideration, auditing the accrued program costs required extensive audit effort when performing audit procedures and evaluating the results of those procedures.
How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to accrued program costs included the following, among others: • We assessed the reasonableness of management’s program accrual rates used by performing a fluctuation analysis of accrual rates per selected product line at December 31, 2025, compared to the prior period accrual rates. • We evaluated the accuracy of the accrued program costs by comparing the accrued program costs calculation inputs and adjustments to supporting documentation, including approved program offers, and tested the mathematical accuracy of management’s calculation. • We performed inquiries of appropriate individuals outside of the finance organization to corroborate the completeness and accuracy of the inputs into the calculation. • We evaluated management’s ability to accurately record accrued program costs by testing a selection of actual program related payments made in 2025, and comparing the payments to management’s historical accrued program costs.
Goodwill – International Reporting Unit — Refer to Notes 1 and 9 to the financial statements Critical Audit Matter Description The Company annually tests goodwill for impairment on October 1, or earlier if triggering events occur.
The determination of a reporting unit’s fair value includes the Company’s use of a discounted cash flow model and a market approach.
Based on the results of the quantitative test, the Company recorded a goodwill impairment in the amount of $21.0 million for the international reporting unit in 2025.
Given the significant judgments made by management to estimate the fair value of the international reporting unit, performing audit procedures to evaluate the reasonableness of management’s estimates and assumptions related to the future net sales growth, and the selection of EBITDA multiples and discount rate required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists.
How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to future net sales growth, and the selection of EBITDA multiples and discount rate, to estimate the fair value of the international reporting unit included the following procedures: • We tested management’s controls over the goodwill impairment evaluation, including over the determination of the fair value of the reporting unit, such as the control related to the forecasted future net sales growth, selection of EBITDA multiples, and selection of the discount rate. • We evaluated the reasonableness of management’s forecasted future net sales growth by comparing forecasted future net sales growth to (1) historical results of the Company, (2) information obtained from inquiries with senior management personnel, (3) internal communications to management and the board of directors, and (4) industry reports of the Company and comparable companies. • We evaluated management’s ability to accurately forecast future net sales growth by comparing actual results to management’s historical forecasts. • With the assistance of our fair value specialists, we evaluated the discount rate, including testing the source information underlying the determination of the discount rate, testing the mathematical accuracy of the calculations, and developing a range of independent estimates and comparing those to the discount rates selected by management. • With the assistance of our fair value specialists, we evaluated the selection of EBITDA multiples from comparable companies, including testing the underlying source information and mathematical accuracy of the calculations, and evaluated the appropriateness of the Company’s selection of companies in its peer public company group. /s/ Deloitte & Touche LLP Costa Mesa, California March 16, 2026 We have served as the Company's auditor since 2023.
CONSOLIDATED B ALANCE 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 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 Total assets $ 596,537 $ 636,721 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 1,601 Total liabilities 404,140 403,611 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 ) Total stockholders’ equity 192,397 233,110 Total liabilities and stockholders’ equity $ 596,537 $ 636,721 See summary of significant accounting policies and notes to consolidated financial statements.
CONSOLIDATED STATEM ENTS 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 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 ) (Loss) income before provision for income taxes ( 47,203 ) ( 120,458 ) 10,297 Provision for income taxes ( 2,679 ) ( 5,882 ) ( 2,778 ) Net (loss) income $ ( 49,882 ) $ ( 126,340 ) $ 7,519 (Losses) earnings per common share—basic $ ( 1.75 ) $ ( 4.50 ) $ 0.27 (Losses) earnings per common share—assuming dilution $ ( 1.75 ) $ ( 4.50 ) $ 0.26 Weighted average shares outstanding—basic 28,426 28,059 28,128 Weighted average shares outstanding—assuming dilution 28,426 28,059 28,533 See summary of significant accounting policies and notes to consolidated financial statements.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME Years ended December 31, 2025, 2024 and 2023 (In thousands) 2025 2024 2023 Net (loss) income $ ( 49,882 ) $ ( 126,340 ) $ 7,519 Other comprehensive gain (loss) Foreign currency translation adjustment, net of tax effects 6,729 ( 12,766 ) 6,219 Comprehensive (loss) income $ ( 43,153 ) $ ( 139,106 ) $ 13,738 See summary of significant accounting policies and notes to consolidated financial statements.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY Years ended December 31, 2025, 2024 and 2023 (In thousands, except share data) Accumulated Additional Other Common Stock Paid-in Comprehensive Retained Treasury Stock AVD Shares Amount Capital loss Earnings Shares Amount Total Balance, January 1, 2023 34,446,194 $ 3,444 $ 105,634 $ ( 12,182 ) $ 328,745 5,029,892 $ ( 55,662 ) $ 369,979 Stocks issued under ESPP 50,025 — — — — Cash dividends declared on common stock ($ 0.12 per share) — — — — ( 3,367 ) — — ( 3,367 ) Foreign currency translation adjustment, net — — — 6,219 — — — 6,219 Stock based compensation — — 6,138 — — — — 6,138 Stock options exercised, grants, termination, and vesting of restricted stock units (net of shares in lieu of taxes) 180,568 ( 1,938 ) — — — — ( 1,920 ) Shares repurchased — — — — — 885,290 ( 15,539 ) ( 15,539 ) Net income — — — — 7,519 — — 7,519 Balance, December 31, 2023 34,676,787 3,467 110,810 ( 5,963 ) 332,897 5,915,182 ( 71,201 ) 370,010 Stocks issued under ESPP 92,767 — — — — Cash dividends declared on common stock ($ 0.06 — — — — ( 1,675 ) — — ( 1,675 ) Foreign currency translation adjustment, net — — — ( 12,766 ) — — — ( 12,766 ) Stock based compensation — — 4,412 — — — — 4,412 Stock options exercised, grants, termination, and vesting of restricted stock units (net of shares in lieu of taxes) 24,994 ( 1,434 ) — — — — ( 1,432 ) Net loss — — — — ( 126,340 ) — — ( 126,340 ) Balance, December 31, 2024 34,794,548 3,479 114,679 ( 18,729 ) 204,882 5,915,182 ( 71,201 ) 233,110 Stocks issued under ESPP 148,197 Foreign currency translation adjustment, net 6,729 6,729 Stock based compensation 2,016 2,016 Stock options exercised, grants, termination, and vesting of restricted stock units (net of shares in lieu of taxes) ( 19,183 ) ( 2 ) ( 203 ) ( 205 ) Net loss ( 49,882 ) ( 49,882 ) Balance, December 31, 2025 34,923,562 $ 3,492 $ 117,106 $ ( 12,000 ) $ 155,000 5,915,182 $ ( 71,201 ) $ 192,397 See summary of significant accounting policies and notes to consolidated financial statements.
CONSOLIDATED STATE MENTS 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 1,754 Amortization of deferred loan fees 1,906 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 2,356 Lease obligations and non-cash lease expense, net ( 147 ) ( 37 ) Unrealized foreign currency transaction (gains) losses ( 193 ) ( 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 ) Net cash (used in) provided by operating activities ( 21,191 ) 3,923 ( 58,748 ) Cash flows from investing activities: Capital expenditures ( 3,919 ) ( 7,279 ) ( 11,878 ) Proceeds from disposal of property, plant and equipment 1,065 Acquisitions of business and product line, net of cash acquired — — ( 5,195 ) Intangible assets ( 165 ) ( 409 ) ( 186 ) Net cash used in investing activities ( 3,607 ) ( 6,623 ) ( 17,017 ) 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 Net (payment) receipt from the exercise of stock options ( 205 ) — 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 ) Net cash provided by financing activities 23,704 4,540 66,737 Net increase (decrease) in cash ( 1,094 ) 1,840 ( 9,028 ) Effect of exchange rate changes on cash 1,005 ( 742 ) Cash at beginning of year 12,514 11,416 20,328 Cash at end of year $ 12,425 $ 12,514 $ 11,416 See summary of significant accounting policies and notes to the consolidated financial statements.
AMERICAN VANGUARD CORPORATION SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Years Ended December 31, 2025, 2024 and 2023 (Dollars in thousands, except per share data) (1) Description of Business and Summary of Significant Accounting Policies American Vanguard Corporation (the “Company” or “AVD”) is primarily a specialty solutions manufacturer that develops and markets safe synthetic, biological and biorational products for agricultural, commercial and consumer uses.
Transformation – Transformation expenses on the consolidated statements of operations include costs related to the Company’s digital and structural transformation project.
The structural transformation effort is intended to improve operating leverage by applying business analytics to current operations, structures, products and services and identifying process improvements, as well as pricing and go-to-market strategies.
Transformation expenses primarily include costs for consulting services, severance costs relating to the Company’s former CEO, and costs incurred in connection with the staffing and execution of the Company’s transformation initiatives.
In addition, the Company has incurred costs associated with write-offs and write downs of certain assets.
Depreciation and amortization expense included in cost of sales amounted to $ 5,255 , $ 5,157 , and $ 6,599 f or the years ended December 31, 2025, 2024, and 2023, respectively.
Advertising expenses are recognized as selling expenses in the consolidated statements of operations and were $ 2,698 , $ 4,111 and $ 5,736 i n 2025, 2024 and 2023, respectively.
Research and Development Expense— Research and development expenses, which are included in research, product development and regulatory, in the consolidated statements of operations were $ 8,889 , $ 10,933 and $ 12,347 for the years ended December 31, 2025, 2024 and 2023, respectively Cash— The Company maintains cash balances that exceed federally insured limits with a number of financial institutions.
Cash includes legally restricted deposits held as compensating balances against the credit limit of one of the Company's credit cards.
Restricted cash amounted to $ 500 and $ 0 at December 31, 2025 and 2024, respectively.
The components of inventories, consist of the following: 2025 2024 Finished products $ 148,961 $ 154,628 Raw materials 27,073 24,664 Total inventories $ 176,034 $ 179,292 Finished products consist of products that are sold to customers in their current form as well as intermediate products that require further formulation to be saleable to customers.
The related expense was immaterial during the years ended December 31, 2025, 2024, and 2023.
There were no lease transactions with related parties during 2025, 2024 and 2023.
The operating lease expense for the years ended December 31, 2025, 2024 and 2023 was $ 7,433 , $ 7,687 and $ 7,579 , respectively.
Additional information related to operating leases are as follows: Year Ended December 31, 2025 Year Ended December 31, 2024 Year Ended December 31, 2023 Cash paid for amounts included in the measurement of lease liabilities $ 7,577 $ 7,718 $ 7,333 ROU assets obtained in exchange for new lease liabilities $ 3,505 $ 4,628 $ 4,466 The weighted-average remaining lease term and discount rate related to the operating leases as of December 31, 2025 and 2024 were as follows: December 31, 2025 December 31, 2024 Weighted-average remaining lease term (in years) 3.93 4.49 Weighted-average discount rate 5.16 % 4.88 % Future minimum lease payments under non-cancellable operating leases as of December 31, 2025 were as follows: 2026 $ 6,382 2027 4,549 2028 3,118 2029 2,223 2030 1,459 Thereafter 1,437 Total lease payments $ 19,168 Less: imputed interest ( 1,782 ) Total $ 17,386 Amounts recognized in the consolidated balance sheets: Operating lease liabilities, current $ 5,765 Operating lease liabilities, long term $ 11,621 Revenue Recognition — The Company recognizes revenue when control of the ordered goods or services are transferred to its customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.
These license agreements typically include non-refundable up-front fees and minimum guaranteed royalty payments.
These fees are allocated to the performance obligations and recognized as revenue as the performance obligations are met.
These performance obligations are typically met at a point in time.
Sales-based royalties are not recognized as revenue until the underlying sales have occurred.
Selective enterprise information of sales disaggregated by category and geographic region is as follows: 2025 2024 2023 Net sales: U.S. crop $ 221,391 $ 228,327 $ 269,229 U.S. non-crop 90,290 82,400 75,287 Total U.S. 311,681 310,727 344,516 International 203,433 236,579 234,855 Total net sales $ 515,114 $ 547,306 $ 579,371 Beginning January 1, 2025, the Company implemented a new organization structure, as part of its business transformation actions, and began servicing Canadian customers as part of its U.S.

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ITEM 8 Description Page No Financial Statements: Report of Independent Registered Public Accounting Firm Deloitte & Touche LLP; Costa Mesa, California, PCAOB ID# 34 Report of Independent Registered Public Accounting Firm BDO USA, P.C.; Costa Mesa, California, PCAOB ID#243 Consolidated Balance Sheets as of December 31, 2024 and 2023 Consolidated Statements of Operations for the Years Ended December 31, 2024, 2023 and 2022 Consolidated Statements of Comprehensive (Loss) Income for the Years Ended December 31, 2024, 2023 and 2022 Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2024, 2023 and 2022 Consolidated Statements of Cash Flows for the Years Ended December 31, 2024, 2023 and 2022 Notes to Consolidated Financial Statements REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and the Board of Directors of American Vanguard Corporation Newport Beach, California Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of American Vanguard Corporation and subsidiaries (the "Company") as of December 31, 2024 and December 31, 2023, the related consolidated statements of operations, comprehensive (loss) income, stockholders' equity and cash flows, for each of the two years in the period ended December 31, 2024, and the related notes and the schedules listed in the Index at Item 15 (collectively referred to as the "financial statements").
In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and December 31, 2023, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated May 28, 2025, expressed an adverse opinion on the Company's internal control over financial reporting because of a material weakness.
Accrued Program Costs — Refer to Note 1 to the financial statements Critical Audit Matter Description The Company offers discounts to its customers based on various programs (“programs”), which are primarily volume-based incentives.
As of December 31, 2024, accrued program costs were $69.4 million.
The Company uses the expected value method for determining the estimated variable consideration, which includes amounts expected to be paid to customers.
Quarterly, the Company compares individual sale transactions with programs to determine what, if any, program liabilities have been incurred.
Once the quarterly calculation is made, the Company makes an assessment of whether customers are tracking in a manner that indicates they will meet the requirements of the agreed upon terms and conditions of the applicable programs, making adjustments to the accumulated accrual based on the liability at the balance sheet date.
Given the nature of the data utilized to analyze the program accruals, and the volume of programs data required to estimate total variable consideration, auditing the program accrual required extensive audit effort when performing audit procedures and evaluating the results of those procedures.
How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to accrued program costs included the following, among others: • We assessed the reasonableness of management’s program accrual rates used by performing a fluctuation analysis of accrual rates per product line at December 31, 2024, as compared to the prior period accrual rates. • We evaluated the accuracy of the accrued program costs by comparing the accrued program costs calculation inputs and adjustments to supporting documentation, and testing the mathematical accuracy of management’s calculation. • We performed inquiries of appropriate individuals outside of the finance organization to corroborate the completeness and accuracy of the inputs into the calculation. • We performed confirmation procedures with the Company's customers regarding prepayment terms related to the program accrual balance and compared responses to management’s records and program accrual, and we inspected other relevant correspondence between customers and the Company. • We evaluated management’s ability to accurately record accrued program costs by testing actual program related payments made in 2024, and comparing the payments to management’s historical accrual.
Goodwill — International Reporting Unit — Refer to Notes 1 and 9 to the financial statements Critical Audit Matter Description The Company annually tests goodwill for impairment at the beginning of the fourth quarter, or earlier if triggering events occur.
The determination of a reporting units’ fair value includes the Company’s use of a discounted cash flow model and a market approach.
Based on the results of the quantitative test, the Company recorded a goodwill impairment in the amount of $17.9 million for the international reporting unit in 2024.
Given the significant judgments made by management to estimate the fair value of the international reporting unit, performing audit procedures to evaluate the reasonableness of management’s estimates and assumptions related to the future net sales growth and expenses, and the selection of EBITDA multiples and discount rates required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists.
How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to future net sales growth and expenses, and the selection of EBITDA multiples (“forecasts”) and discount rates, to estimate the fair value of the international reporting unit included the following procedures: • We evaluated the reasonableness of management’s forecasted future net sales growth and expenses by comparing forecasted future net sales growth and expenses to (1) historical results of the Company, (2) information obtained from inquiries with senior management personnel, (3) internal communications to management and the board of directors, (4) industry reports of the Company and comparable companies, and (5) evidence obtained in other areas of the audit. • We evaluated management’s ability to accurately forecast by comparing actual results to management’s historical forecasts. • With the assistance of our fair value specialists, we evaluated discount rates, including testing the source information underlying the determination of discount rates, testing the mathematical accuracy of the calculations, and developing a range of independent estimates and comparing those to the discount rates selected by management. • With the assistance of our fair value specialists, we evaluated the selection of EBITDA multiples from comparable companies, including testing the underlying source information and mathematical accuracy of the calculations, and evaluated the appropriateness of the Company’s selection of companies in its peer public company group. /s/ Deloitte & Touche LLP Costa Mesa, California May 28, 2025 We have served as the Company's auditor since 2023.
Report of Independent Registered Public Accounting Firm Shareholders and Board of Directors American Vanguard Corporation Newport Beach, California Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows of American Vanguard Corporation (the “Company”) for the year ended December 31, 2022, and the related notes and schedule (collectively referred to as the “consolidated financial statements”).
In our opinion, the consolidated financial statements present fairly, in all material respects, the results of operations and cash flows of the Company for the year ended December 31, 2022 , in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management.
Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit.
We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.
Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.
Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that our audit provides a reasonable basis for our opinion. /s/ BDO USA, P.C.
We have served as the Company's auditor from 1991 to 2022.
Costa Mesa, California March 16, 2023 CONSOLIDATED B ALANCE SHEETS December 31, 2024 and 2023 (In thousands, except share data) 2024 2023 Assets Current assets: Cash $ 12,514 $ 11,416 Receivables: Trade, net of allowance for credit losses of $ 9,190 and $ 7,107 , respectively 169,743 182,613 Other 4,699 8,356 Total receivables, net 174,442 190,969 Inventories 179,292 219,551 Prepaid expenses 7,615 6,261 Income taxes receivable 5,030 3,824 Total current assets 378,893 432,021 Property, plant and equipment, net 58,169 74,560 Operating lease right-of-use assets, net 19,735 22,417 Intangible assets, net 150,497 172,508 Goodwill 19,701 51,199 Deferred income tax assets 1,242 2,849 Other assets 8,484 11,994 Total assets $ 636,721 $ 767,548 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 69,159 $ 68,833 Customer prepayments 52,675 65,560 Accrued program costs 69,449 68,076 Accrued expenses and other payables 31,989 16,354 Operating lease liabilities, current 6,136 6,081 Income taxes payable 2,942 5,591 Total current liabilities 232,350 230,495 Long-term debt 147,332 138,900 Operating lease liabilities, long-term 14,339 17,113 Deferred income tax liabilities 7,989 7,892 Other liabilities 1,601 3,138 Total liabilities 403,611 397,538 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 34,794,548 shares in 2024 and 34,676,787 shares in 2023 3,479 3,467 Additional paid-in capital 114,679 110,810 Accumulated other comprehensive loss ( 18,729 ) ( 5,963 ) Retained earnings 204,882 332,897 304,311 441,211 Less treasury stock at cost, 5,915,182 shares in 2024 and 5,915,182 in 2023 ( 71,201 ) ( 71,201 ) Total stockholders’ equity 233,110 370,010 Total liabilities and stockholders’ equity $ 636,721 $ 767,548 See summary of significant accounting policies and notes to consolidated financial statements.
CONSOLIDATED STATEM ENTS OF OPERATIONS Years ended December 31, 2024, 2023 and 2022 (In thousands, except per share data) 2024 2023 2022 Net sales $ 547,306 $ 579,371 $ 609,615 Cost of sales ( 426,989 ) ( 400,207 ) ( 417,227 ) Gross profit 120,317 179,164 192,388 Operating expenses Selling, general and administrative ( 119,634 ) ( 116,887 ) ( 119,921 ) Research, product development and regulatory ( 32,662 ) ( 38,025 ) ( 31,816 ) Transformation ( 20,162 ) ( 957 ) — Asset impairment charges ( 50,414 ) — — Gain from sale of assets 1,000 — — Operating (loss) income ( 101,555 ) 23,295 40,651 Change in fair value of equity investments, net ( 2,356 ) ( 359 ) ( 732 ) Interest and other expenses, net ( 16,547 ) ( 12,639 ) ( 3,954 ) (Loss) income before provision for income taxes ( 120,458 ) 10,297 35,965 Provision for income taxes ( 5,882 ) ( 2,778 ) ( 8,561 ) Net (loss) income $ ( 126,340 ) $ 7,519 $ 27,404 Earnings per common share—basic $ ( 4.50 ) $ 0.27 $ 0.94 Earnings per common share—assuming dilution $ ( 4.50 ) $ 0.26 $ 0.92 Weighted average shares outstanding—basic 28,059 28,128 29,234 Weighted average shares outstanding—assuming dilution 28,059 28,533 29,872 See summary of significant accounting policies and notes to consolidated financial statements.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME Years ended December 31, 2024, 2023 and 2022 (In thousands) 2024 2023 2022 Net (loss) income $ ( 126,340 ) $ 7,519 $ 27,404 Other comprehensive (loss) gain Foreign currency translation adjustment, net of tax effects ( 12,766 ) 6,219 1,602 Comprehensive (loss) income $ ( 139,106 ) $ 13,738 $ 29,006 See summary of significant accounting policies and notes to consolidated financial statements.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY Years ended December 31, 2024, 2023 and 2022 (In thousands, except share data) Accumulated Additional Other Common Stock Paid-in Comprehensive Retained Treasury Stock AVD Shares Amount Capital loss Earnings Shares Amount Total Balance, January 1, 2022 34,248,218 $ 3,426 $ 101,450 $ ( 13,784 ) $ 304,385 3,361,040 $ ( 22,739 ) $ 372,738 Stocks issued under ESPP 51,240 — — — — Cash dividends declared on common stock ($ 0.10 per share) — — — — ( 3,044 ) — — ( 3,044 ) Foreign currency translation adjustment, net — — — 1,602 — — — 1,602 Stock based compensation — — 5,684 — — — — 5,684 Stock options exercised, grants, termination, and vesting of restricted stock units (net of shares in lieu of taxes) 146,736 ( 1,254 ) — — — — ( 1,240 ) Shares repurchased — — ( 1,079 ) — — 1,668,852 ( 32,923 ) ( 34,002 ) Net income — — — — 27,404 — — 27,404 Balance, December 31, 2022 34,446,194 3,444 105,634 ( 12,182 ) 328,745 5,029,892 ( 55,662 ) 369,979 Stocks issued under ESPP 50,025 — — — — Cash dividends declared on common stock ($ 0.12 per share) — — — — ( 3,367 ) — — ( 3,367 ) Foreign currency translation adjustment, net — — — 6,219 — — — 6,219 Stock based compensation — — 6,138 — — — — 6,138 Stock options exercised, grants, termination, and vesting of restricted stock units (net of shares in lieu of taxes) 180,568 ( 1,938 ) — — — — ( 1,920 ) Shares repurchased — — — — — 885,290 ( 15,539 ) ( 15,539 ) Net income — — — — 7,519 — — 7,519 Balance, December 31, 2023 34,676,787 3,467 110,810 ( 5,963 ) 332,897 5,915,182 ( 71,201 ) 370,010 Stocks issued under ESPP 92,767 — — — — Cash dividends declared on common stock ($ 0.06 — — — — ( 1,675 ) — — ( 1,675 ) Foreign currency translation adjustment, net — — — ( 12,766 ) — — — ( 12,766 ) Stock based compensation — — 4,412 — — — — 4,412 Stock options exercised, grants, termination, and vesting of restricted stock units (net of shares in lieu of taxes) 24,994 ( 1,434 ) — — — — ( 1,432 ) Net loss — — — — ( 126,340 ) — — ( 126,340 ) Balance, December 31, 2024 34,794,548 $ 3,479 $ 114,679 $ ( 18,729 ) $ 204,882 5,915,182 $ ( 71,201 ) $ 233,110 See summary of significant accounting policies and notes to consolidated financial statements.
CONSOLIDATED STATE MENTS OF CASH FLOWS Years ended December 31, 2024, 2023 and 2022 (In thousands) 2024 2023 2022 Cash flows from operating activities: Net (loss) income $ ( 126,340 ) $ 7,519 $ 27,404 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 22,322 21,780 22,138 Amortization of other long-term assets 1,754 3,573 Amortization and accretion of deferred loan fees and discounted liabilities (Gain) loss on disposal of property, plant and equipment ( 1,000 ) — Impairment of assets 50,414 — — Provision for estimated credit losses 2,319 1,935 1,171 Fair value adjustment of contingent consideration — — Stock-based compensation 4,412 6,138 5,684 Deferred income taxes 1,452 ( 9,710 ) ( 5,278 ) Changes in liabilities for uncertain tax positions or unrecognized tax benefits ( 1,547 ) ( 508 ) ( 1,441 ) Change in equity investment fair value 2,356 Leases ( 37 ) Unrealized foreign currency transaction gains ( 581 ) ( 29 ) Changes in assets and liabilities associated with operations, net of business combinations: Decrease (increase) in receivables 7,481 ( 20,278 ) ( 6,447 ) Decrease (increase) in inventories 35,178 ( 27,315 ) ( 29,220 ) (Increase) decrease in income tax receivable ( 3,775 ) 3,568 ( 4,910 ) (Increase) decrease in prepaid expenses and other assets ( 687 ) 1,269 ( 3,082 ) (Decrease) increase in accounts payable 3,714 ( 2,287 ) 1,704 Increase (decrease) in customer prepayments ( 12,882 ) ( 45,079 ) 47,551 Increase (decrease) in accrued program costs 1,775 7,244 ( 2,449 ) Increase (decrease) in accrued expenses and other payables 17,202 ( 5,066 ) Decrease in contingent consideration — — ( 1,321 ) Net cash provided by (used in) operating activities 3,923 ( 58,748 ) 57,105 Cash flows from investing activities: Capital expenditures ( 7,279 ) ( 11,878 ) ( 13,261 ) Proceeds from disposal of property, plant and equipment 1,065 Acquisitions of business and product line, net of cash acquired — ( 5,195 ) — Intangible assets ( 409 ) ( 186 ) ( 1,293 ) Net cash used in investing activities ( 6,623 ) ( 17,017 ) ( 14,470 ) Cash flows from financing activities: Payments under line of credit agreement ( 294,356 ) ( 172,500 ) ( 254,000 ) Borrowings under line of credit agreement 302,787 259,100 253,000 (Increase) in deferred loan fees ( 850 ) — — Payment of contingent consideration — — ( 68 ) Net receipt from the issuance of common stock under ESPP Net receipt from the exercise of stock options — Payment from common stock purchased for tax withholding ( 1,432 ) ( 1,967 ) ( 2,067 ) Repurchase of common stock — ( 15,539 ) ( 34,002 ) Payment of cash dividends ( 2,510 ) ( 3,384 ) ( 2,787 ) Net cash provided by (used in) financing activities 4,540 66,737 ( 38,260 ) Net increase (decrease) in cash 1,840 ( 9,028 ) 4,375 Effect of exchange rate changes on cash ( 742 ) ( 332 ) Cash at beginning of year 11,416 20,328 16,285 Cash at end of year $ 12,514 $ 11,416 $ 20,328 See summary of significant accounting policies and notes to the consolidated financial statements.
AMERICAN VANGUARD CORPORATION SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Years Ended December 31, 2024, 2023 and 2022 (Dollars in thousands, except per share data) (1) Description of Business and Summary of Significant Accounting Policies American Vanguard Corporation (the “Company” or “AVD”) is primarily a specialty solutions manufacturer that develops and markets safe synthetic, biological and biorational products for agricultural, commercial and consumer uses.
Transformation – Transformation expenses on the consolidated statement of operations include costs related to the Company’s digital and structural transformation projects.
The structural transformation effort is intended to improve operating leverage by applying business analytics to current operations, structures, new product development and services, and is focused on identifying process improvements.
Transformation expenses include costs for consulting services, severance costs, retention payments and other costs incurred in connection with staffing and execution of the Company’s various transformation initiatives.
Depreciation and amortization expense included in cost of sales amounted to $ 5,157 , $ 6,599 , and $ 8,906 f or the years ended December 31, 2024, 2023, and 2022, respectively.
Advertising expenses are recognized as selling expenses in the consolidated statements of operations and were $ 4,111 , $ 5,736 and $ 5,836 i n 2024, 2023 and 2022, respectively.
Research and Development Expense— Research and development expenses, which are included in research, product development and regulatory, in the consolidated statements of operations were $ 10,933 , $ 12,347 and $ 10,829 for the years ended December 31, 2024, 2023 and 2022, respectively.
Cash— The Company maintains cash balances that exceed federally insured limits with a number of financial institutions.
The components of inventories, consist of the following: 2024 2023 Finished products $ 154,628 $ 198,935 Raw materials 24,664 20,616 Total inventories $ 179,292 $ 219,551 Finished products consist of products that are sold to customers in their current form as well as intermediate products that require further formulation to be saleable to customers.

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