101 added · 104 removed between the two most recent 10-Ks. The risks a company starts — or stops — disclosing are often the story.
Newly disclosed
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: 30 • 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. 31 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 923 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. 32 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 249 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. 33 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. 34 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 5 976 — — — — 981 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 18 ( 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 10 891 — — — — 901 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 2 ( 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 15 614 629 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. 35 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 21 226 1,754 Amortization of deferred loan fees 1,906 536 254 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 437 2,356 359 Lease obligations and non-cash lease expense, net ( 147 ) ( 37 ) 256 Unrealized foreign currency transaction (gains) losses ( 193 ) 804 ( 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 477 1,065 242 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 629 901 981 Net (payment) receipt from the exercise of stock options ( 205 ) — 46 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 ) 116 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. 36 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.
The Company determines the grant-date fair value of option grants using the Black-Scholes option-pricing model and the Monte Carlo simulation valuation model for stock options subject to a market vesting/exercisability conditions. 43 Recently Adopted Accounting Guidance— In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” The ASU includes amendments requiring enhanced income tax disclosures, primarily related to standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction.
For the year ended December 31, 2025, the Company recorded impairment charges related to specific fixed assets that support its PCNB product line manufacturing in the amount of $ 2,552 , and in 2024, the Company recorded impairment charges relating to its investment in its SIMPAS assets in the amount of $ 14,020 .
Federal income tax rate of 21.0 % to income before income tax expense, as a result of the following: 2025 Amount Percentage Computed tax expense at statutory federal rates ( 9,912 ) 21.0 % Increase (decrease) in taxes resulting from: State taxes, net of federal income tax benefit (1) 115 - 0.2 % Foreign tax effects: Panama Other ( 518 ) 1.1 % Nicaragua Change in Valuation Allowance 845 - 1.8 % Other 181 - 0.4 % Brazil Foreign Rate Differential ( 1,139 ) 2.4 % Goodwill Impairment 2,882 - 6.1 % Other 142 - 0.3 % Australia Goodwill Impairment 700 - 1.5 % Other ( 59 ) 0.1 % Costa Rica Foreign Rate Differential ( 858 ) 1.8 % Goodwill Impairment 2,809 - 6.0 % Other 88 - 0.2 % Other foreign jurisdictions 512 - 1.1 % Effect of cross-border tax laws: Subpart F Income 648 - 1.4 % Tax credits Research and development ("R&D") credits ( 171 ) 0.4 % Changes in valuation allowance 5,463 - 11.6 % Nontaxable or nondeductible items: Equity compensation 573 - 1.2 % Other 362 - 0.8 % Changes in unrecognized tax benefits ( 115 ) 0.2 % Other adjustments: Return to provision ( 159 ) 0.3 % Other 290 - 0.6 % Total 2,679 - 5.9 % (1) State taxes in Illinois, Alabama, Florida, Minnesota, Pennsylvania, Louisiana, California, and North Carolina made up the majority (greater than 50%) of the tax effect in this category. 47 As previously disclosed for the years ended December 31, 2024 and 2023, prior to the adoption of ASU 2023-09, the total income tax expense differed from the amounts computed by applying the U.S.
Federal income tax rate of 21.0 % to income before income tax expense, as a result of the following: 2024 2023 Computed tax expense at statutory federal rates $ ( 25,296 ) $ 2,162 Increase (decrease) in taxes resulting from: State taxes, net of federal income tax benefit ( 3,117 ) 756 Unrecognized tax benefits ( 191 ) ( 585 ) Income tax credits ( 288 ) ( 720 ) Foreign tax rate differential ( 2,599 ) 1,025 Stock based compensation 685 219 Global intangible low-taxed income — 685 Change in valuation allowance 29,730 1,376 Return to provision ( 1,189 ) 158 Nondeductible expenses / (tax deductions) 2,161 ( 327 ) Gross receipts taxes 398 425 Goodwill impairment 6,471 IP migration — ( 2,455 ) Other ( 883 ) 59 Total $ 5,882 $ 2,778 (Loss) income before provision for income taxes is as follows: 2025 2024 2023 Domestic $ ( 36,290 ) $ ( 103,918 ) $ 6,672 International ( 10,913 ) ( 16,540 ) 3,625 Total $ ( 47,203 ) $ ( 120,458 ) $ 10,297 48 Temporary differences between the consolidated financial statements’ carrying amounts and tax bases of assets and liabilities that give rise to significant portions of the net deferred tax liability at December 31, 2025 and 2024 relate to the following: 2025 2024 Deferred tax assets Inventories $ 6,083 $ 9,322 Program accrual 8,790 10,486 Vacation pay accrual 685 682 Accrued bonuses and severance 860 882 Bad debt expense 3,323 2,550 Stock compensation 620 1,047 Domestic NOL carryforward 9,319 4,604 Foreign NOL carryforward 7,180 6,297 Tax credits 1,892 1,794 Lease liability 3,578 5,078 Accrued expenses 527 678 Accrued product liability 1,858 — Unrealized foreign exchange loss 1,152 2,521 Capitalized R&D costs 5,384 7,587 Disallowed interest expense 7,964 3,670 Other 1,298 — Deferred tax assets 60,513 57,198 Less valuation allowance ( 41,386 ) ( 33,855 ) Deferred tax assets, net $ 19,127 $ 23,343 Deferred tax liabilities Plant and equipment $ ( 19,346 ) $ ( 22,686 ) Lease assets ( 3,414 ) ( 4,895 ) Prepaid expenses ( 1,881 ) ( 1,809 ) Other — ( 700 ) Deferred tax liabilities $ ( 24,641 ) $ ( 30,090 ) Total net deferred tax liabilities $ ( 5,514 ) $ ( 6,747 ) Certain 2024 balances were reclassified to conform with the 2025 presentation.
The acquisition was accounted for as a business combination and the purchase consideration was allocated as follows: Preliminary Allocation at December 31, 2023 Measurement Period Adjustments Final Allocation Trade receivables $ 1,883 $ — $ 1,883 Inventory and other current assets 1,330 — 1,330 Property, plant, and equipment 45 90 135 Customer relationships — 1,300 1,300 Product registrations and product rights 104 396 500 Goodwill 2,949 ( 1,339 ) 1,610 Liabilities assumed ( 1,819 ) ( 447 ) ( 2,266 ) Total $ 4,492 $ — $ 4,492 Liabilities assumed include liabilities of $ 447 related to income tax matters.
Pro-forma financial information is not included herein as the pro-forma impact of the acquisition is not material. 53 (9) Intangible Assets and Goodwill The following schedule represents intangible assets recognized in connection with product acquisitions (See Note 1 for the Company’s accounting policy regarding intangible assets): Amount Intangible assets at January 1, 2023 $ 184,664 Additions during fiscal 2023 941 Impact of movement in exchange rates 177 Amortization expense ( 13,274 ) Intangible assets at December 31, 2023 172,508 Measurement period adjustment 1,696 Additions during fiscal 2024 418 Impact of movement in exchange rates ( 1,441 ) Amortization expense ( 13,339 ) Asset impairment ( 9,345 ) Intangible assets at December 31, 2024 150,497 Additions during fiscal 2025 1,280 Impact of movement in exchange rates 894 Amortization expense ( 12,123 ) Asset impairment ( 1,802 ) Intangible assets at December 31, 2025 $ 138,746 Goodwill at January 1, 2023 $ 47,010 Additions during fiscal 2023 2,949 Impact of movement in exchange rates 1,240 Goodwill at December 31, 2023 51,199 Measurement period adjustment ( 1,339 ) Impact
As of October 1, 2025, the Company conducted its most recent annual impairment test by quantitatively testing its goodwill which relates entirely to its international reporting unit.
The Company recorded impairment charges of the carrying value of long-lived assets of $ 4,354 and $ 23,365 for t he years ended December 31, 2025 and 2024, respectively.
As a result, the Company recorded a full impairment charge of its remaining goodwill balance in the amount of $ 21,040 during the year ended December 31, 2025.
Consequently, the Company has filed an action against TCS and its private equity sponsor in the Court of Common Pleas, County of Medina, Ohio seeking damages for, among other things, breach of contract and negligent misrepresentation.
On October 5, 2023, the Company completed the acquisition of all outstanding stock of Punto Verde S.A.
No longer disclosed
Costa Mesa, California March 16, 2023 36 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. 37 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. 38 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. 39 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 4 833 — — — — 837 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 14 ( 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 5 976 — — — — 981 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 18 ( 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 10 891 — — — — 901 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 2 ( 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. 40 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 226 1,754 3,573 Amortization and accretion of deferred loan fees and discounted liabilities 536 254 289 (Gain) loss on disposal of property, plant and equipment ( 1,000 ) — 268 Impairment of assets 50,414 — — Provision for estimated credit losses 2,319 1,935 1,171 Fair value adjustment of contingent consideration — — 610 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 2,356 359 732 Leases ( 37 ) 256 68 Unrealized foreign currency transaction gains 804 ( 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 ) 90 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 1,065 242 84 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 901 981 837 Net receipt from the exercise of stock options — 46 827 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 ) 116 ( 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. 41 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.
Recently Adopted Accounting Guidance— In November 2023, the FASB issued ASU No. 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosure.” The ASU updates reportable segment disclosure requirements, primarily through requiring enhanced disclosures about significant segment expenses and information used to assess segment performance.
Refer to "Note 17 - Segment Reporting" for additional information. 48 Recently Issued Accounting Guidance— In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” The ASU includes amendments requiring enhanced income tax disclosures, primarily related to standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction.
On May 27, 2025, the Company and the lenders entered into Amendment Number Eleven to the Third Amended Loan and Security Agreement, under which events of default arising from the failure of Borrowers to be in compliance with both the Total Leverage Ratio and the Fixed Charge Coverage Ratio as of March 31, 2025, were waived.
As of October 1, 2024, the Company conducted its most recent annual impairment test by quantitatively testing goodwill assigned to its domestic and international reporting units.
The guidance is effective for fiscal years beginning after December 15, 2024, with early adoption permitted, and should be applied either prospectively or retrospectively.
For the year ended December 31, 2024, the Company recorded an impairment relating to its investment in its SIMPAS assets in the amount of $ 14,020 .
Changes in the estimated fair value of the contingent earn-out liabilities are reported in operating results. 45 Asset Acquisitions — If an acquisition of an asset or group of assets does not meet the definition of a business, the transaction is accounted for as an asset acquisition rather than a business combination.
As a result, the Company recorded impairment charges of $ 23,365 , including an impairment of fixed assets in the amount of $ 14,020 , and intangible assets of $ 9,345 .
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 34 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. 35 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”).
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.
Selective enterprise information of sales disaggregated by category and geographic region is as follows: 2024 2023 2022 Net sales: U.S. crop $ 228,327 $ 269,229 $ 288,624 U.S. non-crop 82,400 75,287 76,709 Total U.S. 310,727 344,516 365,333 International 236,579 234,855 244,282 Total net sales $ 547,306 $ 579,371 $ 609,615 Accrued Program Costs — The Company offers various discounts to customers based on the volume purchased within a defined period, other pricing adjustments, some grower volume incentives or other key performance indicator driven payments made to distributors, retailers or growers, usually at the end of a growing season.