American Vanguard Corporation (NYSE:AVD) Q3 2023 Earnings Conference Call November 8, 2023 5:00 PM ET Company Participants William Kuser - VP, IR Eric Wintemute - Chairman and CEO David Johnson - CFO Conference Call Participants Brandon Rogers - ROTH Capital Partners Chris Kapsch - Loop Capital Markets Wayne Pinsent - Gabelli Funds Operator …Earnings Conference Call. At this time all participants are in a listen only mode. A brief question-and-answer session will follow the formal presentation [Operator Ins ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, $.10 par value AVD New York Stock Exchange FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2023 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission file number 001-1 ...

Financial Data and Key Metrics Changes - In Q2 2023, overall net sales decreased by 10% compared to the same period in 2022, amounting to a decline of approximately $15 million [14] - The company adjusted its full-year 2023 performance targets, projecting net sales between $615 million and $625 million, adjusted EBITDA between $70 million and $75 million, and net income between $20 million and $24 million [5][23] - Gross margin percentage for Q2 2023 was 32%, down from 33% in 2022, primarily due to increased international sales and generic price competition [14] Business Line Data and Key Metrics Changes - U.S. crop business net sales were down 11%, impacted by the unavailability of a high-margin herbicide [6] - Non-crop business net sales decreased by about 20% due to retailers reducing inventory levels [8] - International sales dropped by 6%, with strong performance in Mexico and Australia not enough to offset competition from low-priced generic products in Central America and Brazil [8] Market Data and Key Metrics Changes - The global agricultural chemical industry experienced an average sales drop of approximately 20%, while the company’s sales decline was only 10% [6] - Channel inventory of corn soil insecticides is at historic lows, with only 12% of the amount applied last year, indicating potential for increased demand [20] Company Strategy and Development Direction - The company is focusing on managing expenses to improve operating leverage and is optimistic about a recovery in the second half of the year [4][5] - The Green Solutions portfolio continues to grow, with a 21% increase in sales compared to Q2 2022, indicating a shift towards more sustainable products [10] - The company is advancing its SIMPAS precision application system in Brazil, which is expected to enhance market presence and revenue opportunities [12][13] Management's Comments on Operating Environment and Future Outlook - Management noted that the farm economy remains strong with stable commodity prices, which should support demand in the second half of the year [20] - The company anticipates that domestic sales will be approximately flat compared to last year, while international business is expected to grow by 3% to 5% [22] - Management emphasized the importance of financial discipline and operating efficiency in the current market conditions [25] Other Important Information - The company has initiated a stock repurchase plan, reflecting confidence in its equity value [10] - A one-time tax expense in Brazil impacted overall performance, marking only the second loss recorded in the last 55 quarters [16] Q&A Session Summary Question: Impact of inventory destocking on market share - Management acknowledged the pressure from glyphosate pricing but noted that their products remain complementary and have maintained market share [28] Question: Changes in competitive landscape due to destocking - Management confirmed that pricing pressure has increased across all markets, but they are focusing on products with stronger margins [31] Question: Confidence in inventory normalization - Management explained their inventory tracking system and expressed confidence in the accuracy of their inventory levels [36] Question: Updates on SIMPAS solution in Brazil - Management indicated that they are monitoring the adoption of SIMPAS and will provide updates in future calls [42] Question: Cost reduction initiatives - Management highlighted efforts to improve inventory management and factory efficiencies as part of their cost reduction strategy [45]

Financial Performance - Q2 2023 net sales decreased by $15 million, from $148 million to $133 million[5, 11] - The company's Q2 2023 net loss for AVD was $1053 thousand, compared to a net income of $6830 thousand in 2022[19] - H1 2023 net sales decreased by $40123 thousand, from $297797 thousand to $257674 thousand[23] - H1 2023 net income for AVD was $865 thousand, compared to $16765 thousand in 2022[23] - The company restated full year net sales targets to $615 million - $625 million, EBITDA to $70 million - $75 million, and net income to $20 million - $24 million[5] Market Dynamics - The industry experienced in-channel destocking[5] - Industry peers' average sales were down approximately 20%, while AVD's sales were down 10%[6] - International sales accounted for 45% of total sales in Q2 2023, compared to 43% in Q2 2022[11] Strategic Initiatives - Green solutions sales increased by 21%[7] - The company authorized a $15 million share repurchase in Q2 and an additional $75 million in Q3[7] - The company is targeting operating expenses as a percentage of net sales to be 25-27%[28]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, $.10 par value AVD New York Stock Exchange FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED June 30, 2023 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission file number 001-13795 ...

American Vanguard Corporation (NYSE:AVD) Q1 2023 Results Conference Call May 9, 2023 5:00 PM ET Company Participants Bill Kuser - Director of IR & Corporate Communications Eric Wintemute - Chairman & CEO Scott Hendrix - SVP of Crop Sales for U.S. & Canada David Johnson - VP, CFO & Treasurer James Thompson - Director of Business Development Ulrich Trogele - COO & Executive VP Conference Call Participants Chris Kapsch - Loop Capital Gerry Sweeney - ROTH Capital Wayne Pinsent - Gabelli Operator Welcome to the ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, $0.10 par value AVD New York Stock Exchange FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2023 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission file number 001-1379 ...

Financial Performance - In 2022, net sales increased by 9% to $609,615 compared to $557,676 in 2021, while net income rose approximately 43% to $26,618 from $18,587[131]. - Operating income for 2022 was up 31% to $40,651 from $30,946 in 2021[131]. - Gross profit for 2022 was approximately 13% higher than in 2021, amounting to $241,352 compared to $214,047[131]. - The gross profit margin improved to 40% in 2022, up from 38% in the previous year[131]. - Operating expenses increased by 10% to $200,701 in 2022, remaining flat at 33% of net sales[131]. - Long-term debt decreased to $51,477 as of December 31, 2022, from $52,240 as of December 31, 2021[134]. - The company's liquidity position improved to $200,372 as of December 31, 2022, compared to $178,705 as of December 31, 2021[134]. - The effective tax rate decreased to 23.8% in 2022 from 30.1% in 2021[132]. - The international business saw a 13% increase in net sales and a 9% increase in gross profit[131]. - Total net sales increased by 9% in 2022, reaching $609,615 compared to $557,676 in 2021[135]. - U.S. crop business net sales rose by 9% to $288,624, driven by strong demand for crop protection products despite a 20% drop in sales of a leading corn soil insecticide[135][136]. - International net sales grew by 13% to $244,282, with significant contributions from soil fumigants and a record $100 million in net sales from the LATAM region[140]. - Net income for 2022 was $27,404, or $0.94 per basic share, compared to $18,587, or $0.62 per basic share in 2021[147]. Regulatory and Compliance - The company’s products are subject to registration by the U.S. Environmental Protection Agency, with most requiring periodic re-registration[36]. - The regulatory environment remains challenging, with increased scrutiny on product registrations, particularly in the EU, which may lead to cancellations of products if safer alternatives are available[67]. - Several organophosphate products are under review by the USEPA, with potential revocation of tolerances that could limit or cancel registrations, adversely affecting financial performance[69]. - The USEPA has proposed to cancel the fungicide PCNB, which could have a material negative impact on operating results if the registration is lost[70]. - The Company is facing a notice of intention to suspend the registration of DCPA, which is critical for high-value vegetable crops, with a ruling expected from an administrative law judge[71]. Research and Development - The company has invested in research and development of its green solutions portfolio, starting basic molecular research in 2021[21]. - The company’s total product development expenses were $6,050 thousand in 2022, up from $5,956 thousand in 2021 and $4,699 thousand in 2020[41]. - Research, product development, and regulatory expenses increased by 10% to $31,816, reflecting higher international regulatory activities[141][144]. Supply Chain and Operations - The company has a significant backlog of orders at the end of 2022 due to supply chain challenges, which is atypical for its business model[28]. - The Company experienced supply chain disruptions due to the COVID-19 pandemic, leading to significant price increases and lower-than-expected net sales and profit margins in Q4 2022[66]. - The Company relies on sole source suppliers for key raw materials, and supply chain disruptions could adversely affect sales[90]. - The Company is monitoring the impact of the COVID-19 pandemic on its operations, with uncertainties regarding future financial conditions and cash flows[80]. Environmental and Sustainability Initiatives - The company continues to develop eco-friendly products, offering over 100 solutions aimed at enhancing soil health and promoting carbon sequestration[49]. - The company is focused on sustainable agriculture, aiming to ensure food security, availability, and affordability through innovative agricultural solutions[52]. - The company has a long-term environmental protection program aimed at reducing emissions of hazardous materials and remediating existing environmental concerns[44]. - The company has committed significant resources to precision application technology, such as SIMPAS and Ultimus, to optimize resource use and minimize environmental impact[51]. Workforce and Diversity - The company employed 822 employees as of December 31, 2022, an increase from 804 employees in 2021[54]. - The company has expanded its Diversity, Equity, and Inclusion (DEI) program, with 33% of its board members being female and 22% from underrepresented groups[46]. - The company has implemented across-the-board wage increases in certain manufacturing facilities to retain skilled personnel during the "Great Resignation"[48]. Risks and Challenges - Climate change is creating unpredictable weather conditions that may reduce the demand for the Company's products, complicating sales forecasts[81]. - Demand for the Company's products is influenced by weather conditions and commodity prices, which may vary significantly, impacting revenues and profitability[82]. - The Company faces risks related to the Russian invasion of Ukraine, which could adversely affect supply chains and financial performance[83]. - Competition from generic competitors may pressure pricing and market share, impacting profitability[91]. - A significant portion of sales comes from a limited number of key customers, making the Company vulnerable to their financial health[95]. - The Company is subject to tax risks across multiple jurisdictions, which could adversely impact financial condition and cash flows[100]. Financial Management and Investments - The Company generated $57,105 in cash from operating activities for the year ended December 31, 2022, a decrease of 33.8% from $86,361 in the prior year[149]. - Working capital increased by $3,027 to $121,966 as of December 31, 2022, compared to $118,939 in the prior year[150]. - Cash used for investing activities was $14,470 in 2022, down from $20,042 in 2021, with $13,261 allocated to capital expenditures[153]. - Financing activities used $38,260 in 2022, a significant decrease from $65,871 in 2021, including $2,787 in dividends paid to stockholders[154]. - The Company believes cash flows from future operations and current cash on hand will be sufficient to meet working capital and capital expenditure requirements for at least the next 12 months[162]. Internal Control and Governance - The independent auditor confirmed that the Company maintained effective internal control over financial reporting as of December 31, 2022[198]. - The Company’s management is responsible for maintaining effective internal control over financial reporting, which is evaluated periodically[193]. - The audit of internal control over financial reporting was conducted in accordance with PCAOB standards, ensuring reasonable assurance of effective internal control[201]. - Internal control over financial reporting is designed to provide reasonable assurance that financial statements are prepared in accordance with generally accepted accounting principles[202].

Financial Data and Key Metrics Changes - The company reported a net sales growth of 9% for the full year 2022, with net income increasing by 47% compared to 2021 [5][12] - Gross profit margin improved to 40%, up from 38% in 2021, while operating expenses remained at 33% of sales [12][13] - Adjusted EBITDA increased by 15% year-over-year, reaching $73 million, with an EBITDA margin improvement to 12% [14][15] Business Line Data and Key Metrics Changes - The U.S. crop business grew by 9% to $289 million, while the international business saw a 13% increase to $244 million [12][14] - The non-crop business remained stable despite a 30% drop in the domestic consumer product market, with a rebound in the commercial non-crop segment [8][12] - The Green Solutions business experienced a revenue growth of 32%, increasing from $37 million in 2021 to $49 million in 2022 [24] Market Data and Key Metrics Changes - The company's international business recorded its highest sales increase, driven by strong demand for green solutions and soil fumigants in Mexico and Australia [8][9] - The Latin American business achieved a record milestone of $100 million in sales [9] Company Strategy and Development Direction - The company is focused on expanding its core business, green solutions, and precision application technologies, with a target of $694 million in revenues by 2025 [22] - The SIMPAS technology platform is being restructured into a dedicated business unit to enhance focus and drive adoption [35][70] - The company plans to continue investing in acquisitions and partnerships to grow its green solutions portfolio [19][25] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the 2023 outlook, expecting net sales to grow between 8% and 12% due to high demand for corn and soybean products [36] - The company anticipates improved supply chain conditions and low inventory levels, which should support sales growth [44][60] Other Important Information - The company has authorized a stock repurchase program of up to $15 million for 2023 [21] - A change in accounting treatment for outbound freight costs is planned, which will affect financial ratios but not net income [16] Q&A Session Summary Question: Market conditions and pricing actions - Management indicated that they have successfully implemented price increases to offset inflationary costs, with a strong position to maintain margins despite competitive pressures [41][42] Question: Supply chain issues and sales recovery - Management confirmed that supply chain disruptions affecting the Aztec product have improved, with production resuming and alternative products being offered [43][44] Question: Growth platforms and visibility through 2025 - Management reiterated confidence in achieving growth targets for green solutions and discussed ongoing M&A activity as a key driver for growth [49][51] Question: Channel inventories and visibility - Management noted that channel inventories are at low levels, which positions the company well for the upcoming season [56][59] Question: Metrics for evaluating early technologies in M&A - The company uses a 10-year P&L forecast and a hurdle rate of 10% to 15% for evaluating acquisitions, aiming for accretive deals from day one [62][64] Question: Gross margin improvement sustainability - Management expressed confidence in maintaining gross margin improvements through effective pricing strategies [65][66] Question: Resources for SIMPAS adoption - Management confirmed that dedicated resources are being allocated to drive SIMPAS adoption in both the U.S. and Brazil [68][70]