American Vanguard (US:AVD)2025-11-10 13:54Sales Performance - Overall sales for Q3 2025 increased by 1% compared to Q3 2024, with domestic sales up 8% and international sales down 6%[73] - U.S. crop net sales increased by 22% to $43,310, while U.S. non-crop sales decreased by 14% to $19,233[78][80] - International net sales decreased by 6% to $56,770, impacted by droughts and strategic changes in Brazil[81] - Overall net sales decreased by 5% to $364,426 in 2025 from $381,659 in 2024, with domestic sales down 3% and international sales down 6%[90] - International net sales decreased by 6% to $156,848 in 2025, impacted by ongoing droughts in Australia and Mexico[98] - Total net sales for the third quarter of 2025 increased by 1% to $119,313, with domestic sales up 8% to $62,543, while international sales decreased by 6% to $56,770[78] Profitability - Cost of goods sold decreased by 15%, leading to an improvement in gross margins to 28% of net sales, up from 15% in the same period of 2024[74] - Gross profit for Q3 2025 increased by 98% to $34,214, compared to $17,293 in Q3 2024[82] - Gross profit increased by 8% to $104,952 in 2025 compared to $97,474 in 2024, resulting in a gross margin improvement from 26% to 29%[90][99] - The company recorded an operating loss of $6,449 for the first nine months of 2025, an improvement from an operating loss of $31,529 in the same period of 2024[92] - Net loss for Q3 2025 was $12,358, or $(0.43) per share, compared to a net loss of $25,742, or $(0.91) per share, in the prior year quarter[77][88] - Net loss for the period was $21,669, or ($0.76) per share, compared to a net loss of $35,911, or ($1.28) per share in 2024[94][104] Operating Expenses - Operating expenses declined by 11%, resulting in an operating loss of $6,505 for Q3 2025, compared to a loss of $28,388 in Q3 2024[75] - Operating expenses declined by 14% to $111,401 in 2025, representing 30.6% of net sales, down from 33.8% in 2024[100][101] - Operating expenses decreased by $4,962 to $40,719 for the three-month period ended September 30, 2025, compared to $45,681 in the same period of 2024, representing an 11% reduction[83] - Operating expenses as a percentage of net sales improved to 34.1% in Q3 2025 from 38.6% in Q3 2024, with adjusted expenses (excluding transformation and product liability claims) at 27.0%[84] - Operating expenses for the first nine months of 2025 declined by 14%, with operating expenses as a percentage of sales decreasing to 31% from 34% in the prior year[91] Interest and Tax Expenses - Interest expense slightly increased, resulting in a net loss before taxes of $11,936 for Q3 2025, compared to a net loss of $32,766 in Q3 2024[76][88] - Interest costs net of capitalized interest increased to $4,920 in Q3 2025 from $4,378 in Q3 2024, with average debt remaining flat at approximately $209,575[86] - The company incurred an income tax expense of $1,574 in 2025, compared to an income tax benefit of $7,093 in 2024[103] - The company incurred an income tax expense of $422 in Q3 2025, compared to an income tax benefit of $7,024 in Q3 2024, reflecting changes in profitability and valuation allowances[87] - Interest expense increased to $13,135 in 2025 from $11,988 in 2024, with average debt decreasing to $197,097[102] Cash Flow and Financing - Cash used for investing activities decreased to $2,042 in the nine-month period ended September 30, 2025, from $6,381 in the same period of 2024[110] - Net borrowings under the Credit Agreement amounted to $34,919 during the nine-month period ended September 30, 2025, compared to $31,478 in the same period of the prior year[111] - The Company did not declare and pay dividends for the first nine months of 2025, compared to $2,510 paid during the same period in 2024[111] - As of September 30, 2025, the Company had the capacity to increase borrowings by up to $46,862, compared to $28,623 as of December 31, 2024[113] - Financing activities provided $32,659 in 2025, an increase from $28,453 in 2024, with net borrowings under the Credit Agreement amounting to $34,919[111] Research and Development - The company recorded a charge of $7,029 related to product liability claims in 2025, with significant reductions in research and development expenses[91][100] - Research, product development, and regulatory expenses decreased by $5,523, or 49%, due to improved resource management and cost controls[85] - Research, product development, and regulatory expenses decreased by $8,343 to $17,139, a 33% reduction, driven by the decision to stop investment in the SIMPAS delivery system[100]