Group 1 - American Vanguard Corporation (NYSE: AVD) reported 2Q25 results indicating modest operational changes anticipated since coverage began in late July [1] Group 2 - The investment approach focuses on long-only strategies, emphasizing operational evaluations and long-term earnings potential rather than market-driven dynamics [2] - The articles aim to provide insights for future investors while maintaining a skeptical view in a generally bullish market [2] Group 3 - The analyst holds a beneficial long position in AVD shares, indicating personal investment interest [3] - There is no compensation received for the article, ensuring an independent opinion [3] Group 4 - Seeking Alpha clarifies that past performance does not guarantee future results and that no specific investment recommendations are provided [4] - The platform's analysts include both professional and individual investors, who may not be licensed or certified [4]

Core Insights - American Vanguard reported a GAAP EPS loss of $(0.03) for Q2 2025, better than the analyst estimate of $(0.11) and a significant improvement from $(0.42) in Q2 2024 [1][2][5] - Revenue for the quarter was $129.3 million, exceeding forecasts of $125.0 million and slightly up from $128.2 million in Q2 2024, indicating a 1% year-over-year growth [1][2][5] - Adjusted EBITDA increased by 77% year-over-year to $11.0 million, reflecting improved operational performance [2][5][6] - Gross profit margin expanded to 31% from 29% in Q2 2024, driven by lower costs and improved manufacturing processes [1][2][5][6] Financial Performance - The company narrowed its quarterly net loss to $0.85 million from $11.7 million in the prior-year quarter, indicating a recovery in profitability [5][6] - U.S. crop sales rose 1% to $52.7 million, suggesting a reversal of previous declines and a subsiding customer destocking cycle [5][6] - Selling, general, and administrative expenses decreased to $28.8 million from $31.1 million, contributing to improved operating income [6] Balance Sheet and Cash Flow - Inventory at the end of Q2 2025 was $191 million, down $53 million from the previous year, indicating effective working capital management [7] - Outstanding debt fell by $22 million to $189 million, with plans to use free cash flow primarily for debt reduction [7] Product Portfolio and Market Dynamics - Metam sodium and Thimet were highlighted as strong products, while challenges in international markets persisted but did not worsen [8] - The company is focusing on differentiated and sustainable solutions, although no new product launches were announced for the quarter [8] Guidance and Future Outlook - Management reaffirmed full-year guidance for FY2025, expecting revenue between $535 million and $545 million and adjusted EBITDA of $40 million to $44 million [10] - Leadership emphasized ongoing cost control, inventory reduction, and margin improvement, with a cautious outlook on agricultural recovery [11]

[Executive Summary & Business Update](index=1&type=section&id=Executive%20Summary%20%26%20Business%20Update) [Second Quarter 2025 Financial and Operational Highlights](index=1&type=section&id=Second%20Quarter%202025%20Financial%20and%20Operational%20Highlights) Q2 2025 saw significantly improved financial results, with adjusted EBITDA up over 80% and reduced debt and inventory levels Q2 2025 Financial Highlights (YoY) | Metric | Q2 2025 | Q2 2024 | Change | % Change | | :-------------------- | :------ | :------ | :----- | :------- | | Net sales | $129M | $128M | +$1M | +1% | | Adjusted EBITDA | $11M | $6M | +$5M | +83% | | GAAP EPS | $(0.03) | $(0.42) | +$0.39 | N/A | | Gross Profit Margin | 31% | 29% | +2% | N/A | - Debt outstanding at June 30, 2025 was **$189 million**, a decrease of **$22 million** compared to last year[4](index=4&type=chunk)[5](index=5&type=chunk) - Inventory at June 30, 2025 was **$191 million**, a decrease of **$53 million** compared to last year[4](index=4&type=chunk)[5](index=5&type=chunk) [Management Commentary and Outlook](index=1&type=section&id=Management%20Commentary%20and%20Outlook) Management attributed improved performance to transformation efforts and operational efficiencies while reiterating full-year 2025 guidance - CEO noted that operational improvements led to a substantial improvement in adjusted EBITDA, increasing by **more than 80%** year-over-year[3](index=3&type=chunk) - Gross profit margin increased to **31% from 29%** due to improvements in manufacturing and procurement processes[3](index=3&type=chunk) - CFO stated that operating costs were down **$5 million in Q2** and **$8 million year-to-date**, excluding transformation expenses[5](index=5&type=chunk) 2025 Full-Year Guidance | Metric | Guidance Range | | :------------- | :------------- | | Revenue | $535M – $545M | | Adjusted EBITDA | $40M – $44M | [Company Overview and Forward-Looking Statements](index=2&type=section&id=Company%20Overview%20and%20Forward-Looking%20Statements) The company operates as a diversified specialty and agricultural products provider with extensive global product registrations - American Vanguard develops and markets products for crop protection and management, turf and ornamentals management, and public and animal health[7](index=7&type=chunk) - The company has significantly expanded its operations over the past 20 years, holding **more than 1,000 product registrations** worldwide[7](index=7&type=chunk) - Forward-looking statements in the release are based on current expectations and estimates, subject to risks and uncertainties detailed in SEC reports[8](index=8&type=chunk) [Condensed Consolidated Financial Statements](index=4&type=section&id=Condensed%20Consolidated%20Financial%20Statements) [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets and liabilities increased as of June 30, 2025, compared to year-end 2024, while stockholders' equity slightly decreased Condensed Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Total Assets | $651,978 | $636,721 | | Total Current Assets | $399,326 | $378,893 | | Inventories | $191,497 | $179,292 | | Total Liabilities | $421,156 | $403,611 | | Long-term debt | $189,500 | $147,332 | | Total Stockholders' Equity | $230,822 | $233,110 | - Management highlighted a year-over-year decrease in inventory (**$191 million**, down $53 million) and debt (**$189 million**, down $22 million) despite increases from year-end 2024[4](index=4&type=chunk)[5](index=5&type=chunk)[11](index=11&type=chunk) [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q2 2025 saw a significant improvement in operating income and a reduced net loss compared to the prior year Q2 2025 vs. Q2 2024 Operating Results (in thousands) | Metric | Q2 2025 | Q2 2024 | Change | | :-------------------------------- | :------ | :------ | :----- | | Net sales | $129,313 | $128,209 | +$1,104 | | Gross profit | $40,547 | $37,763 | +$2,784 | | Operating income (loss) | $4,366 | $(9,232) | +$13,598 | | Net loss | $(849) | $(11,721) | +$10,872 | | Net loss per common share—basic | $(0.03) | $(0.42) | +$0.39 | Six Months 2025 vs. Six Months 2024 Operating Results (in thousands) | Metric | 6M 2025 | 6M 2024 | Change | | :-------------------------------- | :------ | :------ | :----- | | Net sales | $245,113 | $263,352 | $(18,239) | | Gross profit | $70,738 | $80,181 | $(9,443) | | Operating income (loss) | $56 | $(3,141) | +$3,197 | | Net loss | $(9,311) | $(10,169) | +$858 | | Net loss per common share—basic | $(0.33) | $(0.36) | +$0.03 | [Analysis of Sales by Segment](index=6&type=section&id=Analysis%20of%20Sales%20by%20Segment) Q2 2025 net sales grew 1% year-over-year with an improved gross margin, while six-month sales saw a decline Q2 2025 Sales Performance by Segment (in thousands) | Segment | 2025 Sales | 2024 Sales | Change | % Change | | :---------- | :--------- | :--------- | :----- | :------- | | U.S. crop | $52,674 | $52,289 | +$385 | +1% | | U.S. non-crop | $19,585 | $19,011 | +$574 | +3% | | International | $57,054 | $56,909 | +$145 | 0% | | Total net sales | $129,313 | $128,209 | +$1,104 | +1% | | Total gross margin | 31% | 29% | +2% | N/A | Six Months 2025 Sales Performance by Segment (in thousands) | Segment | 2025 Sales | 2024 Sales | Change | % Change | | :---------- | :--------- | :--------- | :----- | :------- | | U.S. crop | $110,201 | $119,542 | $(9,341) | -8% | | U.S. non-crop | $34,834 | $36,787 | $(1,953) | -5% | | International | $100,078 | $107,023 | $(6,945) | -6% | | Total net sales | $245,113 | $263,352 | $(18,239) | -7% | | Total gross margin | 29% | 30% | -1% | N/A | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities for the first six months of 2025 decreased compared to the prior year period Six Months 2025 vs. Six Months 2024 Cash Flow Highlights (in thousands) | Metric | 6M 2025 | 6M 2024 | Change | | :-------------------------------- | :------ | :------ | :----- | | Net cash used in operating activities | $(39,836) | $(49,357) | +$9,521 | | Net cash used in investing activities | $(1,057) | $(6,398) | +$5,341 | | Net cash provided by financing activities | $41,479 | $63,190 | $(21,711) | | Net increase in cash and cash equivalents | $586 | $7,435 | $(6,849) | | Cash and cash equivalents at end of period | $14,482 | $17,949 | $(3,467) | - Operating cash flow improvement was driven by a smaller increase in inventories and a decrease in customer prepayments[17](index=17&type=chunk) [Reconciliation of Net Income (Loss) to Adjusted EBITDA](index=8&type=section&id=Reconciliation%20of%20Net%20Income%20(Loss)%20to%20Adjusted%20EBITDA) Adjusted EBITDA for Q2 2025 improved by 79% year-over-year, though the six-month figure declined from the prior year Adjusted EBITDA (in thousands) | Metric | Q2 2025 | Q2 2024 | Change | % Change | | :---------------- | :------ | :------ | :----- | :------- | | Adjusted EBITDA | $11,039 | $6,164 | +$4,875 | +79.1% | | | | | | | | Metric | 6M 2025 | 6M 2024 | Change | % Change | | :---------------- | :------ | :------ | :----- | :------- | | Adjusted EBITDA | $14,012 | $21,679 | $(7,667) | -35.4% | - Transformation costs decreased significantly, from **$7.35 million in Q2 2024 to $1.62 million in Q2 2025**, and from **$8.50 million in 6M 2024 to $3.81 million in 6M 2025**[13](index=13&type=chunk)[19](index=19&type=chunk) - Adjusted EBITDA is a non-GAAP financial measure and should not be considered an alternative to net income or cash flow from operating activities[19](index=19&type=chunk) [Supplemental Information](index=2&type=section&id=Supplemental%20Information) [Earnings Conference Call Details](index=2&type=section&id=Earnings%20Conference%20Call%20Details) The company hosted an earnings call on July 31, 2025, with replay and presentation materials available online - The earnings conference call was held on **July 31, 2025**, at 5 pm ET[6](index=6&type=chunk) - A replay of the conference call and an investor presentation are accessible through the company's Investor Relations website[6](index=6&type=chunk) [Company Contact Information](index=3&type=section&id=Company%20Contact%20Information) Contact details for investor relations representatives were provided for inquiries - Company Contact: Anthony Young, Director of Investor Relations, American Vanguard Corporation (anthonyy@amvac.com, (949) 221-6119)[9](index=9&type=chunk) - Investor Representative: Robert Winters, AlphaIR Group (Robert.winters@alpha-ir.com, (929) 266-6315)[9](index=9&type=chunk)

American Vanguard Corp (AVD) Q2 2025 Earnings Call July 31, 2025 05:00 PM ET Speaker0Greetings. Welcome to the American Vanguard Second Quarter twenty twenty five Earnings Conference Call. Please note this conference is being recorded. I will now turn the conference over to your host, Anthony Young, Director of Investor Investor Relations. Anthony, you may begin.Speaker1Thank you, Tom. Good afternoon, and welcome to American Vanguard's Second Quarter twenty twenty five Earnings Review. Our prepared remarks ...

EARNINGS PRESENTATION July 31, 2025 CAUTIONARY STATEMENT Safe Harbor Statement Gross profit margin is at its highest level in five quarters. Industry destocking was a slight headwind during the quarter, but this trend appears to largely have run its course. The Company, from time to time, may discuss forward-looking information. Except for the historical information contained in this presentation the matters set forth in this presentation include forward-looking statements. These statements can be identifie ...

PART I—FINANCIAL INFORMATION [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) The company reported a net loss of $0.8 million for Q2 2025, an improvement from $11.7 million in Q2 2024, with increased assets and liabilities [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q2 2025 saw a slight increase in net sales to $129.3 million and a significant turnaround to operating income of $4.4 million Consolidated Statements of Operations Highlights (In thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | **Net sales** | $129,313 | $128,209 | $245,113 | $263,352 | | **Gross profit** | $40,547 | $37,763 | $70,738 | $80,181 | | **Operating income (loss)** | $4,366 | $(9,232) | $56 | $(3,141) | | **Net loss** | $(849) | $(11,721) | $(9,311) | $(10,169) | | **Net loss per share—basic** | $(0.03) | $(0.42) | $(0.33) | $(0.36) | [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) Comprehensive income of $3.2 million for Q2 2025, driven by a positive foreign currency translation adjustment Comprehensive Income (Loss) Summary (In thousands) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | **Net loss** | $(849) | $(11,721) | $(9,311) | $(10,169) | | **Foreign currency translation adjustment** | $4,025 | $(5,729) | $5,850 | $(7,293) | | **Comprehensive income (loss)** | $3,176 | $(17,450) | $(3,461) | $(17,462) | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to $652.0 million, total liabilities to $421.2 million, and stockholders' equity slightly decreased Balance Sheet Highlights (In thousands) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | **Total current assets** | $399,326 | $378,893 | | Inventories | $191,497 | $179,292 | | **Total assets** | $651,978 | $636,721 | | **Total current liabilities** | $208,744 | $232,350 | | Long-term debt | $189,500 | $147,332 | | **Total liabilities** | $421,156 | $403,611 | | **Total stockholders' equity** | $230,822 | $233,110 | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities improved to $39.8 million for H1 2025, with financing activities providing $41.5 million Cash Flow Summary (In thousands) | Cash Flow Activity | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | | **Net cash used in operating activities** | $(39,836) | $(49,357) | | **Net cash used in investing activities** | $(1,057) | $(6,398) | | **Net cash provided by financing activities** | $41,479 | $63,190 | | **Net increase in cash** | $586 | $7,435 | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Key notes detail accounting policies, revenue recognition, amended debt agreements, and a new unestimable legal contingency - Total net sales for the six months ended June 30, 2025, were **$245.1 million**, with U.S. sales contributing **$145.0 million** and international sales contributing **$100.1 million**[32](index=32&type=chunk) - The company's credit agreement was amended on May 27, 2025, which **waived covenant defaults**, **reduced total revolver commitment**, and **suspended or adjusted** the Total Leverage Ratio and Fixed Charge Coverage Ratio covenants for various periods in 2025[52](index=52&type=chunk) - A loss is considered **probable** from customer complaints about an ornamental insecticide containing herbicide residues. The company has issued a stop sale notice and is aggregating claims, but a range of loss cannot yet be **estimated**[58](index=58&type=chunk) - The company did not declare or pay any cash dividends during the six months ended June 30, 2025, as it is **currently prevented** from doing so by its loan agreement[59](index=59&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Q2 2025 net sales grew 1% with improved gross margin and operating profit, supported by credit facility liquidity [Results of Operations](index=23&type=section&id=Results%20of%20Operations) Q2 2025 net sales increased 1% to $129.3 million, gross margin improved to 31%, and operating expenses decreased 23% Q2 2025 vs Q2 2024 Performance (In thousands) | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | **Total net sales** | $129,313 | $128,209 | 1% | | **Total gross profit** | $40,547 | $37,763 | 7% | | **Total gross margin** | 31% | 29% | - | | **Operating expenses** | $36,181 | $46,995 | -23% | YTD 2025 vs YTD 2024 Performance (In thousands) | Metric | YTD 2025 | YTD 2024 | % Change | | :--- | :--- | :--- | :--- | | **Total net sales** | $245,113 | $263,352 | -7% | | **Total gross profit** | $70,738 | $80,181 | -12% | | **Total gross margin** | 29% | 30% | - | | **Operating expenses** | $70,682 | $83,322 | -15% | - Q2 2025 operating expenses declined by **23%** YoY, primarily due to a **$5.7 million (78%) reduction** in transformation costs and a **$2.8 million (33%) decrease** in R&D expenses[70](index=70&type=chunk)[76](index=76&type=chunk) [Liquidity and Capital Resources](index=29&type=section&id=Liquidity%20and%20Capital%20Resources) Net cash used in operations improved to $39.8 million for H1 2025, with $31.8 million available borrowing capacity - Net cash used in operating activities was **$39.8 million** for the first six months of 2025, compared to **$49.4 million** for the same period in 2024[95](index=95&type=chunk) - Net borrowings under the credit agreement amounted to **$42.2 million** during the first half of 2025, compared to **$65.3 million** in the same period of 2024[100](index=100&type=chunk) - As of June 30, 2025, the company had the capacity to increase its borrowings by up to **$31.8 million** and believes it has **sufficient liquidity** for the next twelve months[102](index=102&type=chunk)[103](index=103&type=chunk) [Critical Accounting Policies and Estimates](index=31&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) No material changes to critical accounting policies from the 2024 Form 10-K were identified during the period - There have been **no material changes** to the critical accounting policies as listed in the Company's Form 10-K for the year ended December 31, 2024[105](index=105&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=31&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market risks from interest rate changes and foreign currency fluctuations, without hedging activities - The company's primary market risks are related to **interest rate changes** on its variable-rate debt and **foreign currency exchange rate fluctuations**[106](index=106&type=chunk)[107](index=107&type=chunk) - The company does not currently use **hedging instruments** to mitigate interest rate or foreign currency exchange risks[107](index=107&type=chunk)[108](index=108&type=chunk) [Item 4. Controls and Procedures](index=32&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls were ineffective due to material weaknesses in internal control, with remediation efforts underway - The CEO and CFO concluded that as of June 30, 2025, the company's disclosure controls and procedures were **not effective**[109](index=109&type=chunk) - The ineffectiveness is due to **material weaknesses** identified in the 2024 Form 10-K related to control environment, control activities, risk assessment, and a specific deficiency in reviewing customer agreements for program costs and prepayments[109](index=109&type=chunk)[110](index=110&type=chunk)[112](index=112&type=chunk) - Remediation efforts are underway, including **enhancing oversight**, **adding resources**, **improving training**, and **strengthening review processes** for customer agreements[111](index=111&type=chunk)[112](index=112&type=chunk) PART II—OTHER INFORMATION [Item 1. Legal Proceedings](index=35&type=section&id=Item%201.%20Legal%20Proceedings) A new legal matter involves customer claims for an ornamental insecticide, with a probable but unestimable loss - A loss is **probable** from customer complaints alleging injury to ornamental plants from a granular insecticide sold by subsidiary OHP Inc. The product was contaminated with herbicide residues by a third-party formulator[58](index=58&type=chunk) - The company has issued a stop sale notice and is recalling unused product, but the potential range of loss cannot yet be **estimated** and could be **material** to financial performance[58](index=58&type=chunk) [Item 1A. Risk Factors](index=35&type=section&id=Item%201A.%20Risk%20Factors) New risks include potential inability to extend credit agreement and regulatory limitations on pesticide use - A new risk factor is the **potential inability to extend or replace the credit agreement** expiring in August 2026. Failure to do so by Q3 2025 reporting would require reclassifying the debt as current, which could raise **going concern issues**[119](index=119&type=chunk) - The 'Make America Healthy Again' (MAHA) Commission and related movements pose a risk of new federal or state **limitations on pesticide use** in food production, which could **adversely affect** the company's sales[120](index=120&type=chunk) [Item 2. Purchases of Equity Securities by the Issuer](index=35&type=section&id=Item%202.%20Purchases%20of%20Equity%20Securities%20by%20the%20Issuer) The company is currently prohibited from making stock repurchases under its existing loan agreement - The Company is **currently prevented** from making stock repurchases pursuant to its loan agreement[121](index=121&type=chunk) [Item 6. Exhibits](index=36&type=section&id=Item%206.%20Exhibits) Filed exhibits include the 2022 Stock Incentive Plan, SOX certifications, and iXBRL financial data files - Filed exhibits include the **2022 Stock Incentive Plan**, **Sarbanes-Oxley Act certifications** (Sections 302 and 906), and **iXBRL data files**[122](index=122&type=chunk)

Group 1 - The focus is on producing objective, data-driven research primarily about small- to mid-cap companies, which are often overlooked by many investors [1] - Occasionally, large-cap companies are analyzed to provide a broader perspective on the equity markets [1]

Financial Data and Key Metrics Changes - The company generated net sales of $116 million in Q1 2025, a decrease of 14% compared to $135 million in Q1 2024 [6][18] - Adjusted EBITDA for Q1 2025 was $3 million, down from $15.5 million in the same period last year [6][18] - Operating expenses decreased by $5 million year-over-year, and net trade working capital was reduced by $86 million [5][11] Business Line Data and Key Metrics Changes - Metem sales increased by 14% year-over-year, while Diamond sales rose by 17% due to increased peanut acreage [9][10] - The absence of a previously canceled herbicide product negatively impacted sales, alongside weakness in the Mexican agave market and drought conditions in Australia [9][18] Market Data and Key Metrics Changes - Inventory levels at distributors are down nearly 23% compared to the previous year, indicating a prolonged destocking period [25] - Corn plantings are at historically high levels, which is expected to positively impact demand for crop protection products [25] Company Strategy and Development Direction - The company is focused on cost containment and improving net working capital, with a goal of achieving a 15% adjusted EBITDA margin over the cycle [11][27] - A transformation plan is in place to streamline operations and improve financial results, with expectations of a cyclical recovery in the agricultural market [24][27] Management's Comments on Operating Environment and Future Outlook - Management noted that while the first quarter was weaker than anticipated, there are signs of recovery as customer activity levels are beginning to pick up [24][62] - The company has adjusted its full-year adjusted EBITDA target range to $40 million to $44 million, down from $45 million to $52 million, reflecting a cautious outlook [13][23] Other Important Information - The company faced delays in filing its 10-K and 10-Q due to internal control matters and the need for a detailed review of major assets [14][16] - The current credit agreement matures in Q3 2026, and the company is exploring options for a longer-term capital structure [21][22] Q&A Session Summary Question: Can you elaborate on the year-over-year top line performance? - Management indicated that the destocking period continued into Q1 2025, affecting sales, but positive trends were observed in May and June [30][34] Question: What were the EBITDA and revenue contributions from Dactol? - Dactol contributed $6 million to top line sales with a gross margin of 13.5% [36][37] Question: What are the expectations for cash taxes this year? - Cash taxes are expected to be in the range of $4 million to $5 million due to international obligations [44] Question: How does the company view the competitive pricing environment? - Management noted unusual competitive activity in Q1, leading to discounting, but expects improvements in pricing as demand increases [58][59]

Financial Data and Key Metrics Changes - The company generated net sales of $116 million in Q1 2025, a decrease of 14% compared to $135 million in Q1 2024 [6][16] - Adjusted EBITDA for Q1 2025 was $3 million, down from $15.5 million in the same period last year [6][16] - Operating expenses decreased by $5 million year-over-year [5][10] - Gross profit margin declined to 26% in Q1 2025 from 31% in the previous year [18] Business Line Data and Key Metrics Changes - Metem sales increased by 14% year-over-year, while Diamond sales rose by 17% due to increased peanut acreage [8][9] - The absence of a previously canceled herbicide product negatively impacted sales [16] - The company faced challenges in the Mexican agave market and drought conditions in Australia, affecting overall performance [8][16] Market Data and Key Metrics Changes - Inventory levels at distributors are down nearly 23% compared to the previous year, indicating a prolonged destocking period [24] - Corn plantings are at historically high levels, which may positively impact demand for the company's products [24] - The company noted a competitive pricing environment, particularly in the fungicide and herbicide categories [56][58] Company Strategy and Development Direction - The company is focused on cost containment and improving net working capital, with a goal of achieving a 15% adjusted EBITDA margin over the long term [10][48] - A transformation plan is in place to streamline operations and improve financial results [26] - The company is exploring options for a longer-term capital structure to replace its current credit agreement [21] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about a recovery in demand as inventory levels are at historic lows [23][62] - The company has adjusted its full-year adjusted EBITDA target range to $40 million to $44 million, down from $45 million to $52 million [12] - Management highlighted the importance of executing the transformation plan to position the company for a cyclical upturn [22][26] Other Important Information - The company faced delays in filing its 10-K and 10-Q due to internal control matters and the need for a detailed review of major assets [13][15] - The company is working on a remediation plan to address identified material weaknesses in internal controls [15] Q&A Session Summary Question: Can you elaborate on the year-over-year top line performance? - Management noted that the removal of the Dactyl product significantly impacted top line sales, along with challenges in the agave market and drought in Australia [31][32] Question: What are the expectations for cash taxes this year? - The company expects cash taxes to be in the range of $4 million to $5 million due to international obligations [43] Question: Can you provide details on pricing pressures and competitive environment? - Management indicated that competitive pricing was influenced by inventory levels and not necessarily by specific product competition, with expectations for improvement in the future [56][58]

Financial Performance - Total net revenue decreased by 14% year-over-year, from $135.1 million in Q1 2024 to $115.8 million in Q1 2025 [11, 33] - U S Crop sales declined by 18% year-over-year [12, 33] - International sales decreased by 14% year-over-year, from $50.1 million to $43.0 million [11, 33] - Adjusted EBITDA decreased significantly from $15.5 million in Q1 2024 to $3.0 million in Q1 2025 [14] - Adjusted EBITDA margin declined from 11.3% in Q1 2024 to 2.6% in Q1 2025 [14] - The company is adjusting its full year adjusted EBITDA target to $40 - $44 million and its full year Revenue target to $535 million - $545 million [6, 29] Cost Management and Working Capital - Operating expenses decreased by $5 million, a 14% decline compared to the prior year [6, 18, 23] - R&D expenses declined by $2.1 million [6, 18, 23] - SG&A expenses declined by $700,000 [6, 18, 23] - Net working capital was reduced by $85 million year-over-year [6, 20]