hi
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
FOR THE QUARTERLY PERIOD ENDED
FOR THE TRANSITION PERIOD FROM TO
Commission file number
(State or other jurisdiction of Incorporation or organization) |
(I.R.S. Employer Identification Number) |
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(Address of principal executive offices) |
(Zip Code) |
(
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
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Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer |
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☒ |
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Non-Accelerated Filer |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. Common Stock, $.10 Par Value —
AMERICAN VANGUARD CORPORATION
INDEX
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Page Number |
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3 |
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Condensed Consolidated Statements of Comprehensive (Loss) Income |
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4 |
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5 |
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6 |
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8 |
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9 |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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18 |
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27 |
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27 |
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28 |
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28 |
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28 |
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28 |
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29 |
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30 |
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2
PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
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For the Three Months |
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For the Nine Months |
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2024 |
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2023 |
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2024 |
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2023 |
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Net sales |
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$ |
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$ |
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$ |
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$ |
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Cost of sales |
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( |
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( |
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( |
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( |
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Gross profit |
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Operating expenses |
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Selling, general and administrative |
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( |
) |
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( |
) |
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( |
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( |
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Research, product development and regulatory |
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( |
) |
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( |
) |
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( |
) |
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( |
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Transformation |
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( |
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( |
) |
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Operating (loss) income |
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( |
) |
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( |
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Change in fair value of equity investment |
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( |
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( |
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Interest expense, net |
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( |
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( |
) |
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( |
) |
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( |
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(Loss) income before income tax benefit (expense) |
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( |
) |
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( |
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Income tax benefit (expense) |
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( |
) |
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( |
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Net (loss) income |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
) |
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$ |
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Net (loss) income per common share—basic |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
) |
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$ |
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Net (loss) income per common share—assuming dilution |
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$ |
( |
) |
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$ |
( |
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$ |
( |
) |
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$ |
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Weighted average shares outstanding—basic |
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Weighted average shares outstanding—assuming dilution |
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See notes to the Condensed Consolidated Financial Statements.
3
AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
(In thousands)
(Unaudited)
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For the Three Months |
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For the Nine Months |
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2024 |
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2023 |
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2024 |
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2023 |
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Net (loss) income |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
) |
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$ |
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Other comprehensive (loss) income: |
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Foreign currency translation adjustment, net of tax effects |
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( |
) |
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( |
) |
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( |
) |
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Comprehensive (loss) income |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
) |
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$ |
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See notes to the Condensed Consolidated Financial Statements.
4
AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
ASSETS |
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September 30, |
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December 31, |
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Current assets: |
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Cash |
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$ |
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$ |
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Receivables: |
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Trade, net of allowance for credit losses of $ |
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Other |
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Total receivables, net |
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Inventories |
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Prepaid expenses |
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Income taxes receivable |
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Total current assets |
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Property, plant and equipment, net |
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Operating lease right-of-use assets, net |
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Intangible assets, net of amortization |
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Goodwill |
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Deferred income tax assets |
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Other assets |
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Total assets |
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$ |
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$ |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current liabilities: |
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Accounts payable |
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$ |
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$ |
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Customer prepayments |
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Accrued program costs |
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Accrued expenses and other payables |
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Operating lease liabilities, current |
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Income taxes payable |
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Total current liabilities |
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Long-term debt |
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Operating lease liabilities, long term |
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Deferred income tax liabilities |
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Other liabilities |
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Total liabilities |
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Stockholders' equity: |
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Preferred stock, $ |
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Common stock, $ |
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Additional paid-in capital |
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Accumulated other comprehensive loss |
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( |
) |
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( |
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Retained earnings |
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Less treasury stock at cost, |
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( |
) |
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( |
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Total stockholders’ equity |
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Total liabilities and stockholders’ equity |
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$ |
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$ |
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See notes to the Condensed Consolidated Financial Statements.
5
AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
For The Three and Nine Months Ended September 30, 2024
(In thousands, except share data)
(Unaudited)
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Common Stock |
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Additional |
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Accumulated |
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Treasury Stock |
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Shares |
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Amount |
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Paid-in |
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Comprehensive |
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Retained |
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Shares |
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Amount |
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Total |
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Balance, January 1, 2024 |
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$ |
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$ |
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$ |
( |
) |
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$ |
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$ |
( |
) |
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$ |
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Stocks issued under ESPP |
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— |
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— |
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— |
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— |
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Cash dividends on common stock declared |
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— |
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— |
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— |
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— |
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( |
) |
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— |
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— |
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( |
) |
Foreign currency translation adjustment, net |
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— |
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— |
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— |
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( |
) |
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— |
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— |
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— |
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( |
) |
Stock-based compensation |
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— |
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— |
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— |
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— |
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— |
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— |
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Stock options exercised; grants, |
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( |
) |
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— |
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— |
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— |
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— |
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( |
) |
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Net income |
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— |
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— |
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— |
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— |
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— |
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— |
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Balance, March 31, 2024 |
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( |
) |
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( |
) |
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Cash dividends on common stock declared |
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— |
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— |
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— |
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— |
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( |
) |
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— |
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— |
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( |
) |
Foreign currency translation adjustment, net |
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— |
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— |
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— |
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( |
) |
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— |
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— |
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— |
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( |
) |
Stock-based compensation |
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— |
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— |
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— |
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— |
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— |
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— |
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Stock options exercised; grants, termination |
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( |
) |
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( |
) |
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( |
) |
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— |
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— |
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— |
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— |
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( |
) |
Net loss |
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— |
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— |
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— |
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( |
) |
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— |
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— |
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( |
) |
|
Balance, June 30, 2024 |
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( |
) |
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( |
) |
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Stocks issued under ESPP |
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Foreign currency translation adjustment, net |
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— |
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— |
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— |
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( |
) |
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— |
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— |
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— |
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( |
) |
Stock-based compensation |
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— |
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— |
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— |
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— |
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— |
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— |
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Stock options exercised; grants, termination |
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( |
) |
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( |
) |
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( |
) |
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— |
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— |
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— |
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( |
) |
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Net loss |
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— |
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— |
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— |
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— |
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( |
) |
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— |
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— |
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( |
) |
Balance, September 30, 2024 |
|
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$ |
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$ |
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$ |
( |
) |
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$ |
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$ |
( |
) |
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$ |
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||||||
See notes to the Condensed Consolidated Financial Statements.
6
AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
For The Three and Nine Months Ended September 30, 2023
(In thousands, except share data)
(Unaudited)
|
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Common Stock |
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Additional |
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Accumulated |
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Treasury Stock |
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Shares |
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Amount |
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Paid-in |
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Comprehensive |
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Retained |
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Shares |
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Amount |
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AVD |
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Balance, January 1, 2023 |
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$ |
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$ |
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$ |
( |
) |
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$ |
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$ |
( |
) |
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$ |
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||||||
Stocks issued under ESPP |
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— |
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— |
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— |
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— |
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||||
Cash dividends on common stock declared |
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— |
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— |
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— |
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— |
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( |
) |
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— |
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— |
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( |
) |
Foreign currency translation adjustment, net |
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— |
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— |
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— |
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— |
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— |
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— |
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||
Stock-based compensation |
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— |
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— |
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— |
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— |
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— |
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— |
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||
Stock options exercised; grants, termination |
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( |
) |
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— |
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— |
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— |
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— |
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— |
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||
Shares repurchased |
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— |
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— |
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— |
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— |
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— |
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Net income |
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— |
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— |
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— |
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— |
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— |
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— |
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||
Balance, March 31, 2023 |
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( |
) |
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( |
) |
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||||||
Cash dividends on common stock declared |
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— |
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|
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— |
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|
|
— |
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|
|
— |
|
|
|
( |
) |
|
|
— |
|
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|
— |
|
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|
( |
) |
Foreign currency translation adjustment, net |
|
|
— |
|
|
|
— |
|
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— |
|
|
|
|
|
|
— |
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— |
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— |
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||
Stock-based compensation |
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— |
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— |
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— |
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— |
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— |
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— |
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||
Stock options exercised; grants, termination |
|
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|
|
|
|
|
|
( |
) |
|
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— |
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|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
||
Shares repurchased |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
— |
|
|
|
( |
) |
|
Balance, June 30, 2023 |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
||||||
Stocks issued under ESPP |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||||
Cash dividends on common stock declared |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Foreign currency translation adjustment, net |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Stock-based compensation |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Stock options exercised; grants, termination |
|
|
( |
) |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Shares repurchased |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Balance, September 30, 2023 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
|
|
|
$ |
( |
) |
|
$ |
|
||||||
See notes to the Condensed Consolidated Financial Statements.
7
AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
|
|
For the Nine Months Ended September 30, |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Cash flows from operating activities: |
|
|
|
|
|
|
||
Net (loss) income |
|
$ |
( |
) |
|
$ |
|
|
Adjustments to reconcile net (loss) income to net cash used in operating |
|
|
|
|
|
|
||
Depreciation of property, plant and equipment |
|
|
|
|
|
|
||
Amortization of intangibles assets |
|
|
|
|
|
|
||
Amortization of other long-term assets |
|
|
|
|
|
|
||
Amortization of deferred loan fees |
|
|
|
|
|
|
||
Provision for bad debts |
|
|
|
|
|
|
||
Stock-based compensation |
|
|
|
|
|
|
||
Change in deferred income taxes |
|
|
( |
) |
|
|
( |
) |
Changes in liabilities for uncertain tax positions or unrecognized tax benefits |
|
|
|
|
|
|
||
Change in equity investment fair value |
|
|
( |
) |
|
|
|
|
Other |
|
|
|
|
|
|
||
Foreign currency transaction losses |
|
|
|
|
|
|
||
Changes in assets and liabilities associated with operations: |
|
|
|
|
|
|
||
Decrease (increase) in net receivables |
|
|
|
|
|
( |
) |
|
Increase in inventories |
|
|
( |
) |
|
|
( |
) |
Increase in prepaid expenses and other assets |
|
|
( |
) |
|
|
( |
) |
Change in income tax receivable/payable, net |
|
|
( |
) |
|
|
( |
) |
Increase (decrease) in net operating lease liability |
|
|
( |
) |
|
|
|
|
Increase in accounts payable |
|
|
|
|
|
|
||
Decrease in customer prepayments |
|
|
( |
) |
|
|
( |
) |
Increase in accrued program costs |
|
|
|
|
|
|
||
Increase (decrease) in other payables and accrued expenses |
|
|
|
|
|
( |
) |
|
Net cash used in operating activities |
|
|
( |
) |
|
|
( |
) |
Cash flows from investing activities: |
|
|
|
|
|
|
||
Capital expenditures |
|
|
( |
) |
|
|
( |
) |
Proceeds from disposal of property, plant and equipment |
|
|
|
|
|
|
||
Intangible assets |
|
|
( |
) |
|
|
( |
) |
Net cash used in investing activities |
|
|
( |
) |
|
|
( |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
||
Payments under line of credit agreement |
|
|
( |
) |
|
|
( |
) |
Borrowings under line of credit agreement |
|
|
|
|
|
|
||
Receipt from the issuance of common stock under ESPP |
|
|
|
|
|
|
||
Net receipt from the exercise of stock options |
|
|
|
|
|
|
||
Net payment for tax withholding on stock-based compensation awards |
|
|
( |
) |
|
|
( |
) |
Repurchase of common stock |
|
|
|
|
|
( |
) |
|
Payment of cash dividends |
|
|
( |
) |
|
|
( |
) |
Net cash provided by financing activities |
|
|
|
|
|
|
||
Net increase (decrease) in cash and cash equivalents |
|
|
|
|
|
( |
) |
|
Effect of exchange rate changes on cash and cash equivalents |
|
|
( |
) |
|
|
( |
) |
Cash and cash equivalents at beginning of period |
|
|
|
|
|
|
||
Cash and cash equivalents at end of period |
|
$ |
|
|
$ |
|
||
See notes to the Condensed Consolidated Financial Statements.
8
AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(In thousands, except share data)
(Unaudited)
1. Summary of Significant Accounting Policies — The accompanying unaudited condensed consolidated financial statements of American Vanguard Corporation and Subsidiaries (“AVD” or “the Company”) have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, all adjustments (consisting of consolidating adjustments, eliminations and normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024. The condensed consolidated financial statements and related notes do not include all information and footnotes required by US GAAP for annual reports. This quarterly report should be read in conjunction with the consolidated financial statements included in the Company’s annual report on Form 10-K for the year ended December 31, 2023.
All significant accounting policies used in the preparation of these condensed consolidated financial statements are consistent with those disclosed in the Company's Annual Report on Form 10-K except for the following:
Transformation
2. Leases — The Company has operating leases for warehouses, manufacturing facilities, offices, cars, railcars and certain equipment. The lease term includes the non-cancellable period of the lease plus any additional periods covered by either an option to extend (or not terminate) that the Company is reasonably certain to exercise. The Company has leases with a lease term ranging from
The operating lease expense for the three months ended September 30, 2024 and 2023, was $
|
|
Three Months Ended September 30, |
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Cash paid for amounts included in the |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|||||