AVD American Vanguard Corp - 10-K
0001193125-26-108593Year-over-year tone shift - average net-tone change across Risk Factors and MD&A vs the prior 10-K.
Why YoY instead of absolute: the LM lexicon has ~6.6× more negative words than positive (legal/risk-disclosure language is heavy on hedging), so every 10-K reads bearish on raw tone. Year-over-year change strips that bias and surfaces the actual shift in management's framing.
Sentence-level sentiment highlighting with category and subcategory filters is coming once the snippet-scoring pipeline lands. For now, dig into the actual section text on the Sections tab.
MD&A (Item 7)
22,381 words
ITEM 7 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FORWARD-LOOKING STATEMENTS/RISK FACTORS:
The Company, from time-to-time, may discuss forward-looking statements including assumptions concerning the Company’s operations, future results and prospects. Generally, “may,” “could,” “will,” “would,” “expect,” “believe,” “estimate,” “anticipate,” “intend,” “continue” and similar words identify forward-looking statements. Forward-looking statements appearing in this Report are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on our current expectations and are subject to risks and uncertainties that can cause actual results and events to differ materially from those set forth in or implied by the forward-looking statements and related assumptions contained in the entire Report, including those set forth in Part I, Item 1A, “Risk Factors” of this Annual Report on Form 10-K. The information contained in this section should also be read in conjunction with our consolidated financial statements and related notes and the information contained elsewhere in this Annual Report on Form 10-K. See also “Forward-Looking Statements” immediately prior to Part I, Item 1, “Business” in this Annual Report on Form 10-K.
The discussion and analysis of our financial condition and results of operations for 2025, as compared to 2024, appears below.
For the discussion and analysis of our financial condition and results of operations, as well as cash flows, for 2024, as compared to 2023, please see “Item 7-Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s annual report on Form 10-K for the year ended December 31, 2024, which was filed with the U.S. Securities and Exchange Commission on May 29, 2025.
MANAGEMENT OVERVIEW
Despite a challenging economic backdrop, we believe, American Vanguard has improved in the areas that are under management’s direct control. The Company is improving its procurement process through the implementation of advanced software systems and the recruitment of industry leading executives. This has led to higher gross profit margins, as compared to 2024, which are expected to further improve over the medium term, as additional refinements to our systems and processes take place. Management has also made substantial improvements to its operating cost structure and through initiatives that have already been announced, such as its decision to streamline our corporate structure by removing the international BV from our management structure, rationalizing and enhancing its IT systems and by making the decision to move its corporate headquarters. These and a number of other initiatives are expected to see further costs taken out of this category over the coming quarters.
While the management team has made meaningful progress implementing its business improvement initiatives, the agriculture economy is still in the midst of a cyclical downturn. Agricultural commodity prices remain near historically low levels as uncertainty remains around forecasted agricultural commodity inventory levels and crop acreage. Customer inventories now appear to be at low levels and during the second half of 2025 material that was being consumed in the field appeared to match purchasing patterns. Thus, it is likely that destocking has substantially run its course. Given the current economic uncertainty, it is unlikely that we will see a strong push to rebuild inventory, but an end to destocking would be a positive for the industry and the first step in an eventual cyclical upturn.
Turning to financial performance, the Company’s 2025 net sales declined, while gross profit margin and net loss improved, as compared to 2024, due, in part, to the management team’s business improvement plan. Net sales declined by approximately 6% during 2025, with domestic net sales remaining flat, while international net sales declining by 14%. Weakness in the international segment can be attributed to a prolonged severe drought in key markets in Australia and lower granular soil insecticide sales in Mexico, significantly impacted by excessive channel inventory.
Initiatives undertaken as part of the Company's business improvement plan resulted in reduced cost of sales in 2025 (71% of net sales) vs. 2024 (78% of net sales). The improvements are the result of lower reserves for slow moving and obsolete inventory in 2025 vs. 2024, and a significant improvement in our approach to strategic procurement driving lower raw material costs. In 2025, we recorded approximately $3,802 in inventory reserves as compared to $21,417 in 2024.
Operating expenses decreased by 21% in 2025, as compared to 2024. The Company spent significantly less on transformation and incurred lower asset impairment charges during 2025, as compared to 2024. In addition, Management continued its focus on containing selling, general and administrative expenses and decreased its research, product development and regulatory expense. The benefits from these efforts were partially offset by expenses related to product liability claims.
With continued comparative lower net sales and higher inventory level, the Company’s average indebtedness remained flat with the prior year at $194,669 as compared to $195,160, during 2024. Interest expenses was up slightly as a result of increased in effective interest rates and additional loan amendment origination fees .
On a full-year basis, the Company generated a net loss of $49,882 (or $1.75 per share) in 2025, as compared to a net loss of $126,340 (or $4.50 per share) during 2024. Details of our financial performance are set forth below.
Results of Operations
2025 Compared with 2024:
$ Change
% Change
Net sales:
U.S. crop
U.S. non-crop
Total U.S.
International
Total net sales
Total cost of sales
Total gross profit
Total gross margin
Net sales of our U.S. crop business were 3% lower than those of the prior year. The primary areas of weakness were soil fumigants and granular soil insecticides. Fumigants were negatively impacted by weakness in the potato market, where farmers are planting fewer acres in response to a weak demand and pricing environment. This weakness was partially offset by strength in the herbicide segment where the company benefited from a full year of sales of a recently introduced product, Zalo, and strong demand for our Impact product line, the company’s broad-based herbicide used on corn crops.
Net sales of our U.S. non-crop business were 10% higher than the previous year. This improvement was driven by revenue recognized from a business-to-business technology licensing agreement in the amount of $11,250, partially offset by a decline in our nursery and ornamental business.
Net sales of our International businesses were 14% lower than the previous year. International sales were impacted by drought conditions in Australia, which led to low molluscicide sales. Our Mexican business saw weakness in net sales due to slower demand, as a result of channel inventory. On the other hand, biological net sales were an area of strength in our international business.
Overall costs of sales decreased by 14% across our U.S. crop, U.S. non-crop and International. The decreases resulted from improved strategic actions to manage raw material and manufacturing costs. Furthermore, in 2025 the Company identified certain items of slow moving or potentially obsolete inventories and took reserves in the amount of $3,802 to reduce those inventory items to net realizable value. In comparison, in 2024, the Company recorded reserves of $21,417.
Operating expenses decreased by $46,015 in 2025 to $175,857, as compared to $221,872 in 2024. The differences in operating expenses by department are as follows:
Change
% Change
Operating expenses
Selling
General and administrative
Other
Amortization
Legal reserves
Research, product development and regulatory
Product liability claims
Transformation
Asset impairment
Gain from sale of asset
Total
Selling expenses decreased by $3,304 for the year ended December 31, 2025, as compared with the prior year. This was mainly associated with actions implemented to streamline our global commercial team and to improve effectiveness, including tight controls on advertising and promotions and other short term controllable costs.
Other general and administrative expenses decreased by $3,296, primarily associated with reduced headcount across the global business as we streamlined the organization.
Amortization declined as compared to prior year, as the result of assets that were retired during 2025 or were fully impaired at the end of 2024.
In 2024, the Company recorded a reserve for a legal settlement. There was no similar legal matter in 2025.
Research, product development and regulatory expenses decreased by $9,501 for the year ended December 31, 2025, as compared to 2024. This is the result of improved resource management and cost controls focused on regulatory and product development studies, and by the decision to not further invest in the SIMPAS delivery system.
In 2025, the Company recorded a charge of $9,730 related to product liability claims primarily associated with its non-crop business. There was no similar matter in the prior year.
Transformation costs related to the Company’s digital and structural transformation project reduced dramatically, as expected, and ended at $7,187, as compared to $20,162 in the prior year. The Company expects that these costs will continue to decline in 2026.
Asset impairments of $25,395 include the impairment of the remaining goodwill of our international business in the amount of $21,040 as a result of changes in discount rate assumptions that were essentially general economic adjustments rather than changes in the expected future performance of the international businesses, PCNB related intangible assets in the amount of $1,668 and PCNB related manufacturing equipment in the amount of $2,459. During 2024, the Company took impairment charges in the amount of $50,414 primarily associated with impairment charges associated with goodwill, the determination that its investment in SIMPAS technology was impaired and with other intangible assets.
AVD undertook a strategic initiative to transform its entire enterprise into a platform for stronger growth and profitability. The Company engaged third party consultants to initiate a business transformation on multiple fronts (including supply chain cost, optimizing manufacturing, establishing strategic go-to-market approaches and a structural reorganization). We believe these transformation efforts will yield substantial benefits by 2026. The Company also initiated a Company-wide digital transformation across all of our geographies including a uniform ERP platform with standardized processes. Third, the Company recruited and hired a new CEO tasked with leading the transformation project. The following table shows the different components of the transformation expense for the years ended December 31, 2025 and 2024:
Consulting and strategic advisory services
CEO termination costs
CEO recruitment fees
Other termination and retention costs
Transformation related employee costs
IT implementations
Total
On April 1, 2020, the Company made a strategic investment in Clean Seed Inc. (Clean Seed) in the amount of $1,190. The investment is carried at fair value and is included in other assets on the Company’s consolidated balance sheets. At December 31, 2025, the fair value of the investment amounted to $501. The Company recorded a loss related to Clean Seed’s change in fair value in the amount of $437 during 2025, as compared to a gain of $513 in 2024. These fair value adjustments are included in change in fair value of equity investments on the Company’s consolidated statements of operations.
Net interest expense was $18,470 in 2025, as compared to $16,243 in 2024. Interest costs are summarized in the following table:
Average Indebtedness and Interest expense
Average
Debt
Interest
Expense, net
Effective Interest
Rate
Average
Debt
Interest
Expense, net
Effective Interest
Rate
Senior credit facility
Interest Income, net
Amortization of deferred loan fees
Other interest
Subtotal
Capitalized interest
Total
The Company’s average debt for the year ended December 31, 2025, was $194,669, as compared to $195,160 for the year ended December 31, 2024. The continuing comparatively high average borrowings can be in large part attributed to the global agriculture market continuing to focus on channel inventory levels and lower levels of prepay in the U.S.. This effective destocking of the channel is a global agricultural market reaction to high interest rates and the drive by distribution to push working capital back to manufacturers. Our effective interest rate on our senior credit facility increased from 8.0% in 2024 to 8.5% in 2025.
Our provision for income taxes for 2025 was $2,679, as compared to $5,882 for 2024. The effective income tax rate for 2025 was negative 5.7%, as compared to negative 4.9% in 2024. The decrease of the effective tax rate in 2025, as compared to 2024, was primarily due to the decrease in the loss before provision for income taxes for entities that maintained a full valuation allowance during 2025.
The Company is subject to U.S. federal income tax as well as to income tax in multiple state jurisdictions. Federal income tax returns of the Company are subject to Internal Revenue Service (“IRS”) examination for the 2022 through 2024 tax years. State income tax returns are subject to examination for the 2021 through 2024 tax years. The Company has other foreign income tax returns subject to examination.
Net loss was $49,882 or $1.75 per basic share and diluted share in 2025, as compared to $126,340 or $4.50 per basic and diluted share in 2024.
Comprehensive loss was $43,153 in 2025, as compared to $139,106 in 2024. In addition to net loss, foreign currency translation adjustment, net of tax, is included in comprehensive loss. The foreign currency translation adjustment, net of tax, was positive $6,729 in 2025, as compared to a negative $12,766 in 2024. The negative adjustment in 2024 was driven by the US Dollar getting stronger compared to the local currencies of the Company's international operations in Mexico, Brazil, and Australia, which use the respective local currencies as their functional currency.
Liquidity and Capital Resources
Cash used in operating activities amounted to $21,191 during the year ended December 31, 2025, as compared to cash provided in operating activities of $3,923 in the prior year. Included in the $21,191 are net loss of $49,882, plus non-cash depreciation, amortization of intangibles and other long-term assets in the amount of $18,763, amortization of deferred loan fees and discounted liabilities of $1,906, impairment of assets including fixed assets, intangible assets and goodwill of $25,395, and provision for bad debts in the amount of $2,360, stock-based compensation of $2,016, change in fair value of investments of $437. These adjustments were offset by deductions related to a gain on sale of fixed assets of $75, reductions in value of deferred income taxes of 1,351, reductions in value for uncertain tax positions or unrecognized tax benefits of $201, non-cash lease expense of $147, and net foreign currency adjustment of $193. This resulted in net cash used in operating activities (prior to changes in assets and liabilities associated with operations, net of business combinations) of $972, as compared to net cash provided by operating activities of $44,083 for the same period of 2024.
The Company’s working capital increased by $14,533 at December 31, 2025. Included in this change, accounts receivable decreased by $7,697 as a result of timing of orders, mix of customers, products and jurisdictions, inventories decreased by $6,287 as a result of a hard drive to reduce inventories and the result of recording certain inventory write downs, tax receivable decreased by $9 driven by losses recorded 2025, and prepaid expenses increased by $8,638. The liability for customer prepayments at the end of 2025, decreased by $19,582, as a result of return to pre-Covid levels of normal working capital by customers. Our accounts payable balances increased by $15,434 primarily as a result of management focus on controlling net trade working capital and the drive by the Company to reduce inventory in the final quarter of the year. Program accruals decreased by $17,384, and other payables and accrued expenses decreased by $4,024.
With regard to our program accrual, the year-over-year change is primarily driven by the mix of product line sales volumes, and customers in 2025, as compared to the prior year. The Company accrues programs in line with the growing season upon which specific products are targeted. Most of our programs relate to domestic sales. Typically, domestic crops have a growing season that ends on August 31 st of each year. During 2025, the Company made accruals in the amount of $69,307 and payments in the amount of $86,529. During 2024, the Company made accruals in the amount of $93,301 and payments in the amount of $92,188.
Cash used for investing activities amounted to $3,608 for the year ended December 31, 2025, as compared to $6,623 in 2024. In 2025, the Company spent $3,793 on capital expenditures primarily on continuing to invest in manufacturing infrastructure focused on safety and improvement of production efficiency and capabilities. Furthermore, the Company spent $165 on registrations and patents and received $477 in disposal of fixed assets. In 2024, the Company spent $409 on registrations and patents and received $1,065 in disposal of fixed assets.
During the year ended December 31, 2025, financing activities provided $23,704 as compared to $4,540 provided during the prior year. This included increasing net borrowings by $26,669, as compared to an increase of $8,431 in 2024. The Company paid $3,389 in deferred loan fees during the year ended December 31, 2025, as compared to $850 in the prior year. During 2024, the Company paid dividends to stockholders amounting to $2,510, no dividend payment was made in 2025.
The Company has long-term debt as of December 31, 2025 and 2024 relating to a senior credit facility as summarized in the following table:
Indebtedness
Senior credit facility
Deferred loan fees
Total indebtedness
The deferred loan fees as of December 31, 2025 and 2024 are included in other assets on the consolidated balance sheets.
The Company and certain of its affiliates were parties to a senior credit facility agreement entitled the “Third Amended and Restated Loan and Security Agreement” dated as of August 5, 2021 (the “Credit Agreement”), which is a senior secured lending facility among AMVAC, the Company’s principal operating subsidiary, as Agent (including the Company and AMVAC BV), as "Borrowers", on the one hand, and a group of commercial lenders led by BMO Bank, N.A. (formerly Bank of the West) as administrative agent, documentation agent, syndication agent, collateral agent and sole lead arranger, on the other hand. The Credit Agreement initially consisted of a line of credit of up to $275,000, an accordion feature of up to $150,000, a letter of credit and swingline sub-facility (each having limits of $25,000) and had a maturity date of August 5, 2026. The Credit Agreement has underwent twelve amendments since 2021.
Under the Credit Agreement, revolving loans bore interest at a variable rate based, at borrower’s election with proper notice, on either (i) SOFR plus 0.1% per annum and the “Applicable Margin” or (ii) the greater of (x) the Prime Rate, (y) the Federal Funds Rate plus 0.5%, and (z) the Daily One-Month SOFR Rate plus 1.10%, plus, in the case of (x), (y) or (z), the Applicable Margin (“Adjusted Base Rate Revolver Loan”). Interest payments for SOFR Revolver Loans were payable on the last day of each interest period (either one-, three- or nine- months, as selected by the Company) and the maturity date, while interest payments for Adjusted Base Rate Revolver Loans are payable on the last business day of each month and the maturity date.
On August 18, 2025, AMVAC, as borrower, and affiliates (including Registrant), as guarantors and/or borrowers, entered into Amendment Number Twelve (the “Amendment”) to the Credit Agreement. The Amendment extended the maturity date of the Credit Agreement from August 5, 2026, to December 31, 2026, and amended the borrowing capacity under the revolving credit facility to $245,000 through November 29, 2025, then $225,000 until December 30, 2025, then $200,000 until March 31, 2026 and then $180,000 through December 31, 2026. The Amendment also included additional changes to the Credit Agreement, including: (i) amending the applicable margins for the applicable interest rates and unused line fee and letter of credit fee; (ii) adding a year-to-date Consolidated EBIDTA requirement of $4,500 as of June 30, 2025, $9,500 as of September 30, 2025 and $35,000 as of December 31, 2025 and a TTM Consolidated EBITDA requirement of not less than $37,500 as of March 31, 2026; (iii) requiring the Company to make prepayments on the loans once the Company’s cash balance exceeds a threshold; and (iv) suspending the Total Leverage Ratio covenant until June 30, 2026 and then applying a fiscal quarter end ratio of 4.00:1.00.
On March 13, 2026, AMVAC, as borrower, and affiliates (including the Company), as guarantors, entered into two loan agreements that, in effect, entirely refinanced the previously existing Credit Agreement. The first is a Credit and Guaranty Agreement with Wilmington Trust, National Association, as administrative agent, and a group of lenders led by Centerbridge Partners, L.P., under the terms of which lenders provide a senior, secured term loan in the aggregate principal amount of $225,000 (the "First Priority Term Loan"). The First Priority Term Loan includes a five-year term, initial interest at SOFR (minimum of 3.0%) + 8.25 (with three potential stepdowns of 50bps each upon achievement of 1X, 1.5X and 2.0X inside closing net leverage ratio), amortization of 1.0% per annum, a no-call provision in year one (with potential for full repayment thereafter with additional exit fees), and two financial covenants - namely, a) a first lien debt-to-EBITDA ratio starting at 6.7X and stepping down to 4.0X in the fourth quarter of 2028, and b) a minimum liquidity requirement ranging from $20,000 to $45,000 on a monthly schedule through the fourth quarter of 2027 and increasing to $50,000 in January of 2028 and thereafter. Borrower may repay up to $35,000 per annum without incurring premium interest.
The second is a Credit and Guaranty Agreement with BMO Bank, N.A., as agent, and other lenders, under the terms of which lenders provide a second priority term loan in the aggregate principal amount of $60,000 (the "Second Priority Term Loan"). The Second Priority Term Loan is subordinate to the First Priority Term Loan, includes a five-year term, initial interest at SOFR + 2.0, amortization of 10% per annum starting in Q3 2027, no prepayment penalty and no financial covenants.
The Company believes that the combination of its cash flows from future operations, current cash on hand and the availability under the Company’s credit facilities will be sufficient to meet its working capital and capital expenditure requirements and will provide the Company with adequate liquidity to meet its anticipated operating needs for at least the next 12 months from the issuance of these consolidated financial statements. Although operating activities are expected to provide cash, to the extent of growth in the future, its operating and investing activities will use cash and, consequently, this growth may require the Company to access some or all of the availability under the credit facility.
Recently Issued Accounting Guidance
Please refer to Note 1 of the Notes to the consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K for recently issued and adopted accounting standards.
CRITICAL ACCOUNTING ESTIMATES
The preparation of our consolidated financial statements requires us to make estimates that affect the reported amounts of assets, liabilities, sales and expenses, and related disclosure of contingent assets and liabilities. We base our estimates and judgments on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may differ from these estimates. Resolution of such uncertainties in a manner inconsistent with our estimates could have a material effect on our financial condition and operating results.
The Company’s critical accounting estimates include:
Current Expected Credit Losses — The Company maintains an allowance to cover its Current Expected Credit Losses ("CECL") on its trade receivables, other receivables and contract assets arising from the failure of customers to make contractual payments. The Company estimates credit losses expected over the life of its trade receivables, other receivables and contract assets based on historical information combined with current conditions that may affect a customer’s ability to pay and reasonable and supportable forecasts. In most instances, the Company’s policy is to write-off trade receivables when they are deemed uncollectible. The vast majority of the Company's trade receivables, other receivables and contract assets are due in less than 365 days. Under the CECL impairment model, the Company develops and documents its allowance for credit losses on its trade receivables based on multiple portfolios. The determination of portfolios is based primarily on geographical location, type of customer and receivables aging.
Inventories — The Company values its inventories at lower of cost or net realizable value. Cost is determined by the first-in, first-out (“FIFO”) or average cost method, including, as appropriate, raw materials, labor, factory overhead and subcontracting services. The Company writes down its inventory to the net realizable value following assessments of slow-moving and obsolete inventory and other annual adjustments to ensure that our standard costs continue to closely reflect actual manufacturing cost. During the years ended December 31, 2025 and 2024, the Company recorded inventory adjustments of $3,802 and $21,417, respectively.
Intangible Assets Other Than Goodwill — The primary identifiable intangible assets of the Company relate to assets associated with its product and business acquisitions. All of the Company’s intangible assets have finite lives and are amortized. The estimated useful life of an identifiable intangible asset is based upon a number of factors including the effects of demand, competition, and expected changes in the marketability of the Company’s products. During the year ended December 31, 2025, the Company recorded intangible asset impairment charges in the amount of $1,802, as compared to $9,345 in 2024. The Company evaluated and determined its intangible assets corresponding to the Company’s operations in countries for which the Company has recorded a full deferred tax asset valuation allowance was not material.
Business Combinations — The Company uses its best estimates and assumptions to assign fair value to the tangible and intangible assets acquired and liabilities assumed at the acquisition date. The Company’s estimates are inherently uncertain and subject to refinement. During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the fair value of these tangible and intangible assets acquired and liabilities assumed, with the corresponding offset to goodwill or an adjustment to the gain from a bargain purchase. In addition, uncertain tax positions and tax-related valuation allowances are initially recorded in connection with a business combination as of the acquisition date. The Company continues to collect information and re-evaluates these estimates and assumptions quarterly and records any adjustments to the Company’s preliminary estimates to goodwill provided that the Company is within the measurement period. Upon the conclusion of the measurement period or final determination of the fair value of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded in the Company’s consolidated statement of operations.
From time to time, certain of our acquisition agreements include contingent earn-out arrangements, which are generally based on the achievement of future income thresholds. The fair values of these earn-out arrangements are included as part of the purchase price of the acquired companies on their respective acquisition dates. For each transaction, we estimate the fair value of contingent earn-out payments as part of the initial purchase price and record the estimated fair value of contingent consideration as a liability on the consolidated balance sheets.
The Company reviews and re-assesses the estimated fair value of contingent consideration on a quarterly basis until the contingent period ends, and the updated fair value could be materially different from the initial estimates or prior quarterly amounts. Changes in the estimated fair value of our contingent earn-out liabilities are reported in operating results.
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. An asset acquisition does not result in the recognition of goodwill and transaction costs are capitalized as part of the cost of the asset or group of assets acquired. The Company uses its best estimates and assumptions to assign fair value to the tangible and intangible assets acquired and liabilities assumed at the acquisition date. In most cases, the Company engages third party valuation specialists to assist the Company in its assessment. The acquisitions costs are allocated to the assets acquired on a relative fair value basis. From time to time, certain of our acquisition agreements include contingent earn-out arrangements, which are recognized only when the contingency is resolved, and the consideration is paid or becomes payable.
Goodwill — The Company reviews goodwill for impairment triggers utilizing either a qualitative or quantitative assessment. If the Company decides that it is appropriate to perform a qualitative assessment and concludes that the fair value of a reporting unit more likely than not exceeds its carrying value, no further evaluation is necessary. If the Company performs a quantitative assessment, the Company compares the fair value of a reporting unit with its carrying value and recognizes an impairment charge for the amount that the carrying amount exceeds the reporting unit’s fair value. The Company annually tests goodwill for impairment at the beginning of the fourth quarter, or earlier if triggering events occur. Fair value determinations require considerable judgment and are sensitive to inherent uncertainties and changes in estimates and assumptions regarding revenue growth rates, gross margins, expenses, capital expenditures, working capital requirements, tax rates, terminal growth rates, discount rates, and synergies available to market participants. As of October 1, 2025, the Company conducted its most recent annual impairment test by quantitatively testing goodwill assigned to its international reporting units. Based on the results of the quantitative test, the carrying value of the international reporting unit exceeded its respective fair value by $23,816. As a result, the Company concluded that goodwill related to its international reporting unit in the amount of $21,040 was fully impaired and recorded a corresponding impairment charge during the year ended December 31, 2025.
Impairment —The carrying values of long-lived assets other than goodwill are reviewed for impairment annually and/or whenever events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. The Company evaluates recoverability of an asset group by comparing the carrying value to the future undiscounted cash flows that it expects to generate from the asset group. If the comparison indicates that the carrying value of an asset group is not recoverable, measurement of the impairment loss is based on the fair value of the asset. In 2025, the Company made the decision that it will stop manufacturing PCNB. During 2026 and 2027, the Company plans to sell its remaining global inventory but will not produce anymore PCNB. Accordingly, the Company reviewed its fixed assets associated with the manufacturing equipment supporting the PCNB product line and decided to write off the net book value of clearly identifiable assets. In 2024, the Company determined that the carrying value related to some of its packaging equipment was impaired, primarily associated with its investments in the SIMPAS technology platform. As a result, the Company recorded impairment charges of $4,354 for the year ended December 31, 2025 and $23,365 for the year ended December 31, 2024.
Income taxes — Income tax expense, deferred tax assets and liabilities, and liabilities for unrecognized tax benefits reflect the Company’s best estimate of current and future taxes to be paid. The Company is subject to income taxes in the U.S. and several foreign jurisdictions. The Company assessed the ability to realize deferred tax assets and determined that based on the available evidence, including a history of taxable income and estimates of future taxable income, it is more likely than not that the net deferred tax assets relating to the Company’s operations in the United States, Brazil, Spain, Dominican Republic, Honduras, Nicaragua, Hong Kong, and Ukraine will not be realized and a full valuation allowance has been recorded in those jurisdictions. Significant judgment is required in determining the provision for income taxes and deferred tax assets and liabilities. In the event that actual results differ from these estimates, we will adjust these estimates in future periods, which may result in a change in the effective tax rate in a future period. Accounting for income taxes involves uncertainty and judgment on how to interpret and apply tax laws and regulations within the Company’s annual tax filings. Such uncertainties from time to time may result in a tax position that may be challenged and overturned by a tax authority in the future, which could result in additional tax liability, interest charges and possibly penalties. The Company classifies interest and penalties as a component of income tax expense.
Off-Balance Sheet Arrangements
As of December 31, 2025, we did not have any off-balance sheet arrangement.
ITEM 7A QUANTITATIVE AND QUALITAT IVE DISCLOSURES ABOUT MARKET RISK
The Company is exposed to market risk related to changes in interest rates, foreign exchange rates, and inflation.
Interest rate risk —The Company is primarily exposed to changes in interest rates related to its borrowing activities. The Company’s indebtedness to its primary group of lenders is evidenced by a line of credit with a variable rate of interest, which fluctuates with changes in the lender’s reference rate (SOFR). An increase or decrease in interest rates by 25 bps would impact the Company’s net loss by approximately $487 based on the Company’s historical average borrowing in 2025. The Company may use derivative financial instruments to hedge its exposure to interest rate fluctuations. No such financial instruments were used by the Company in 2024.
Foreign exchange rate risk —The Company conducts business in various foreign currencies, primarily when doing business in Mexico, Central and South America, Australia, New Zealand and Europe. Therefore, changes in the value of the currencies of such countries or regions affect the Company’s financial position and cash flows when translated into U.S. Dollars. The Company has mitigated, and will continue to mitigate, a portion of its currency exchange exposure through natural hedges based on the operation of decentralized foreign operating companies in which the majority of all costs are local-currency-based. The remaining currency exchange exposure mainly pertains to intercompany trade accounts and loans granted to wholly owned international entities which have their local currency as their functional currency. A positive or negative change of 10% between the US Dollar and the respective local currencies of these entities would amount to a positive or negative change of approximately $6,000. The Company may use derivative financial instruments for trading purposes to protect trading performance from exchange rate fluctuations on material contracts, though there are no such instruments in place during any periods presented in this Annual Report on Form 10-K.
Inflation— The Company is working diligently with its critical raw material suppliers to control inflationary pressures, conducting contract negotiations with focus on the following: reducing or delaying price increases due to higher environmental costs from suppliers mainly in China and India, managing the tariff impacts by sourcing and leveraging alternate geographies where possible, and lastly, monitoring strengths of the U.S. dollar vs other currencies in order to secure benefits and balance tariff effects. The Company recognizes there is long-term pressure on demand for raw materials in the developing world and is utilizing its expertise to minimize inflationary pressure. The Company has been able to push back on many of the proposed price increases for actives and intermediates that are shipped to our U.S. factories, to either avoid, minimize or forestall them. In response to inflation and other factors that have increased the cost of goods and services, the Company has successfully implemented price increases on its products. However, inflation has resulted in persistently high interest rates. As a result, customers in many regions implemented destocking directives in order to limit their carrying costs of inventory. This, in turn, led to an overall drop in demand in late 2022 through the end of 2025. There can be no assurance that inflation will not have a material adverse effect on the Company’s financial performance in future periods.
As part of an on-going process of assessing business risk, management has identified risk factors which are disclosed in Item 1A. Risk Factors of this Annual Report on Form 10-K.
ITEM 8
Description
Page No
Financial Statements:
Report of Independent Registered Public Accounting Firm Deloitte & Touche LLP ; Costa Mesa, California, PCAOB ID# 34
Consolidated Balance Sheets as of December 31, 2025 and 2024
Consolidated Statements of Operations for the Years Ended December 31, 2025, 2024 and 2023
Consolidated Statements of Comprehensive (Loss) Income for the Years Ended December 31, 2025, 2024 and 2023
Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2025, 2024 and 2023
Consolidated Statements of Cash Flows for the Years Ended December 31, 2025, 2024 and 2023
Notes to Consolidated Financial Statements
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and the Board of Directors of
American Vanguard Corporation
Newport Beach, California
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of American Vanguard Corporation and subsidiaries (the "Company") as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive (loss) income, stockholders' equity and cash flows, for each of the two years in the period ended December 31, 2025, and the related notes and the schedules listed in the Index at Item 15 (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 16, 2026, expressed an unqualified opinion on the Company's internal control over financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Accrued Program Costs — Refer to Note 1 to the financial statements
Critical Audit Matter Description
The Company offers incentives and discounts to its customers based on various programs (“programs”). As of December 31, 2025, accrued program costs were $54.6 million. These programs represent variable consideration. Revenues from sales are recorded at the net sales price, which is the transaction price, less an estimate of variable consideration. Depending on the nature of the program, the Company uses either the expected value or most likely amount method for determining the estimated variable consideration. The Company compares individual sale transactions with programs to determine what, if any, program liabilities have been incurred and makes adjustments to accrued program costs.
Given the nature of the data utilized to analyze certain accrued program costs, and the volume of programs data required to estimate total variable consideration, auditing the accrued program costs required extensive audit effort when performing audit procedures and evaluating the results of those procedures.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to accrued program costs included the following, among others:
We assessed the reasonableness of management’s program accrual rates used by performing a fluctuation analysis of accrual rates per selected product line at December 31, 2025, compared to the prior period accrual rates.
We evaluated the accuracy of the accrued program costs by comparing the accrued program costs calculation inputs and adjustments to supporting documentation, including approved program offers, and tested the mathematical accuracy of management’s calculation.
We performed inquiries of appropriate individuals outside of the finance organization to corroborate the completeness and accuracy of the inputs into the calculation.
We evaluated management’s ability to accurately record accrued program costs by testing a selection of actual program related payments made in 2025, and comparing the payments to management’s historical accrued program costs.
Goodwill – International Reporting Unit — Refer to Notes 1 and 9 to the financial statements
Critical Audit Matter Description
The Company annually tests goodwill for impairment on October 1, or earlier if triggering events occur. If the Company performs a quantitative assessment, the Company compares the fair value of a reporting unit with its carrying value and recognizes an impairment charge for the amount the carrying value exceeds the reporting unit’s fair value. The determination of a reporting unit’s fair value includes the Company’s use of a discounted cash flow model and a market approach. Key assumptions in the discounted cash flow include, but are not limited to, discount rates, future net sales growth, gross margins, expenses, capital expenditures, and terminal growth rates. The market approach key assumption relates to the earnings before interest, taxes, depreciation, and amortization (EBITDA) multiples. Based on the results of the quantitative test, the Company recorded a goodwill impairment in the amount of $21.0 million for the international reporting unit in 2025.
Given the significant judgments made by management to estimate the fair value of the international reporting unit, performing audit procedures to evaluate the reasonableness of management’s estimates and assumptions related to the future net sales growth, and the selection of EBITDA multiples and discount rate required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists.
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:
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.
CONSOLIDATED B ALANCE SHEETS
December 31, 2025 and 2024
(In thousands, except share data)
Assets
Current assets:
Cash
Receivables:
Trade, net of allowance for credit losses of $ 11,733 and $ 9,190 respectively
Other
Total receivables, net
Inventories
Prepaid expenses and other assets
Income taxes receivable
Total current assets
Property, plant and equipment, net
Operating lease right-of-use assets, net
Intangible assets, net
Goodwill
Deferred income tax assets
Other assets
Total assets
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable
Customer prepayments
Accrued program costs
Accrued expenses and other payables
Operating lease liabilities, current
Income taxes payable
Total current liabilities
Long-term debt
Operating lease liabilities, long-term
Deferred income tax liabilities
Other liabilities
Total liabilities
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
Additional paid-in capital
Accumulated other comprehensive loss
Retained earnings
Less treasury stock at cost, 5,915,182 shares in 2025 and 5,915,182 in 2024
Total stockholders’ equity
Total liabilities and stockholders’ equity
See summary of significant accounting policies and notes to consolidated financial statements.
CONSOLIDATED STATEM ENTS OF OPERATIONS
Years ended December 31, 2025, 2024 and 2023
(In thousands, except per share data)
Net sales
Cost of sales
Gross profit
Operating expenses
Selling, general and administrative
Research, product development and regulatory
Product liability claims
Transformation
Asset impairments
Gain from sale of assets
Operating (loss) income
Change in fair value of equity investments, net
Interest and other expenses, net
(Loss) income before provision for income taxes
Provision for income taxes
Net (loss) income
(Losses) earnings per common share—basic
(Losses) earnings per common share—assuming dilution
Weighted average shares outstanding—basic
Weighted average shares outstanding—assuming dilution
See summary of significant accounting policies and notes to consolidated financial statements.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
Years ended December 31, 2025, 2024 and 2023
(In thousands)
Net (loss) income
Other comprehensive gain (loss)
Foreign currency translation adjustment, net of tax effects
Comprehensive (loss) income
See summary of significant accounting policies and notes to consolidated financial statements.
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
Stocks issued under ESPP
Cash dividends declared on common stock ($ 0.12
per share)
Foreign currency translation adjustment, net
Stock based compensation
Stock options exercised, grants, termination,
and vesting of restricted stock units (net of
shares in lieu of taxes)
Shares repurchased
Net income
Balance, December 31, 2023
Stocks issued under ESPP
Cash dividends declared on common stock ($ 0.06
Foreign currency translation adjustment, net
Stock based compensation
Stock options exercised, grants, termination,
and vesting of restricted stock units (net of
shares in lieu of taxes)
Net loss
Balance, December 31, 2024
Stocks issued under ESPP
Foreign currency translation adjustment, net
Stock based compensation
Stock options exercised, grants, termination,
and vesting of restricted stock units (net of
shares in lieu of taxes)
Net loss
Balance, December 31, 2025
See summary of significant accounting policies and notes to consolidated financial statements.
CONSOLIDATED STATE MENTS OF CASH FLOWS
Years ended December 31, 2025, 2024 and 2023
(In thousands)
Cash flows from operating activities:
Net (loss) income
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
Amortization of other long-term assets
Amortization of deferred loan fees
Gain on disposal of property, plant and equipment
Impairment of assets
Provision for estimated credit losses
Stock-based compensation
Deferred income taxes
Changes in liabilities for uncertain tax positions or unrecognized tax benefits
Change in equity investment fair value
Lease obligations and non-cash lease expense, net
Unrealized foreign currency transaction (gains) losses
Changes in assets and liabilities associated with operations, net of business combinations:
Decrease (increase) in receivables
Decrease (increase) in inventories
Decrease (increase) in income tax receivable/payable
(Increase) decrease in prepaid expenses and other assets
Increase (decrease) in accounts payable
Decrease in customer prepayments
(Decrease) increase in accrued program costs
(Decrease) increase in accrued expenses and other payables
Net cash (used in) provided by operating activities
Cash flows from investing activities:
Capital expenditures
Proceeds from disposal of property, plant and equipment
Acquisitions of business and product line, net of cash acquired
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
Payment of deferred loan fees
Net receipt from the issuance of common stock under ESPP
Net (payment) receipt from the exercise of stock options
Payment from common stock purchased for tax withholding
Repurchase of common stock
Payment of cash dividends
Net cash provided by financing activities
Net increase (decrease) in cash
Effect of exchange rate changes on cash
Cash at beginning of year
Cash at end of year
See summary of significant accounting policies and notes to the consolidated financial statements.
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)
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 consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. The Company’s Chief Executive Officer is the Chief Operating Decision Maker (CODM), and the Company operates within a single operating and reportable segment. The Company’s CODM makes strategic decisions based on the Company’s consolidated financial statements, and market opportunities and synergies across the entire organization. Therefore, the Company’s CODM allocates resources and assesses financial performance on a consolidated basis.
All U.S. Dollar amounts reflected in the notes to the consolidated financial statements are presented in thousands, except per share data.
Transformation – Transformation expenses on the consolidated statements of operations include costs related to the Company’s digital and structural transformation project. The digital transformation effort is intended to ensure that business process owners have access to current and complete data that has been generated through standardized systems and processes. The structural transformation effort is intended to improve operating leverage by applying business analytics to current operations, structures, products and services and identifying process improvements, as well as pricing and go-to-market strategies. Transformation expenses primarily include costs for consulting services, severance costs relating to the Company’s former CEO, and costs incurred in connection with the staffing and execution of the Company’s transformation initiatives. In addition, the Company has incurred costs associated with write-offs and write downs of certain assets.
Cost of Sales— Cost of sales primarily includes inventory procurement, production, warehousing, handling, and outbound freight. These costs include direct labor, materials, and manufacturing overhead. Depreciation and amortization expense included in cost of sales amounted to $ 5,255 , $ 5,157 , and $ 6,599 f or the years ended December 31, 2025, 2024, and 2023, respectively.
Advertising Expense— The Company expenses advertising costs in the period incurred. Advertising expenses are recognized as selling expenses in the consolidated statements of operations and were $ 2,698 , $ 4,111 and $ 5,736 i n 2025, 2024 and 2023, respectively.
Research and Development Expense— Research and development expenses, which are included in research, product development and regulatory, in the consolidated statements of operations were $ 8,889 , $ 10,933 and $ 12,347 for the years ended December 31, 2025, 2024 and 2023, respectively
Cash— The Company maintains cash balances that exceed federally insured limits with a number of financial institutions. Cash includes legally restricted deposits held as compensating balances against the credit limit of one of the Company's credit cards. Restricted cash amounted to $ 500 and $ 0 at December 31, 2025 and 2024, respectively.
Inventories— Inventory is stated at the lower of cost or net realizable value. Cost is determined by the average cost method, and includes material, labor, factory overhead and subcontracting services.
The components of inventories, consist of the following:
Finished products
Raw materials
Total inventories
Finished products consist of products that are sold to customers in their current form as well as intermediate products that require further formulation to be saleable to customers.
Leases — The Company has operating leases for warehouses, manufacturing facilities, offices, cars, railcars and certain equipment for which operating lease right-of-use (“ROU”) assets and corresponding lease liabilities are recorded. The Company measures ROU assets throughout the lease term at the carrying amount of the lease liability, plus initial direct costs, plus any prepaid lease payments, less the unamortized balance of lease incentives received. The lease liabilities are measured at the present value of the unpaid lease payments at the lease commencement date. Leases that include both lease and non-lease components are accounted for as a single lease component for each asset class, except for real estate leases.
The minimum payments under operating leases are recognized on a straight-line basis over the lease term in the consolidated statements of operations. Operating lease expenses related to variable lease payments are recognized in cost of sales or as operating expenses in a manner consistent with the nature of the underlying lease and as the events, activities, or circumstances in the lease agreement occur. Leases with a term of less than 12 months are not recognized on the consolidated balance sheets, and the related lease expenses are recognized in the consolidated statements of operations on a straight-line basis over the lease term. The related expense was immaterial during the years ended December 31, 2025, 2024, and 2023.
Accounting for leases requires the Company to exercise judgment and make estimates in determining the applicable discount rate, lease term and payments due under a lease. Most of our leases do not provide an implicit interest rate, nor is it available to us from our lessors. As an alternative, the Company uses our estimated incremental borrowing rate, which is derived from information available at the lease commencement date, including publicly available data, in determining the present value of lease payments. The Company also estimated the fair value of the lease and non-lease components for some of our warehouse leases based on market data and cost data.
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 1 year to 20 years.
The operating leases of the Company do not contain major restrictions or covenants such as those relating to dividends or additional financial obligations. Finance leases are immaterial to the consolidated financial statements. There were no lease transactions with related parties during 2025, 2024 and 2023.
The operating lease expense for the years ended December 31, 2025, 2024 and 2023 was $ 7,433 , $ 7,687 and $ 7,579 , respectively. Lease expenses related to variable lease payments and short-term leases were immaterial. Additional information related to operating leases are as follows:
Year Ended
December 31, 2025
Year Ended
December 31, 2024
Year Ended
December 31, 2023
Cash paid for amounts included in the measurement of lease liabilities
ROU assets obtained in exchange for new lease liabilities
The weighted-average remaining lease term and discount rate related to the operating leases as of December 31, 2025 and 2024 were as follows:
December 31, 2025
December 31, 2024
Weighted-average remaining lease term (in years)
Weighted-average discount rate
Future minimum lease payments under non-cancellable operating leases as of December 31, 2025 were as follows:
Thereafter
Total lease payments
Less: imputed interest
Total
Amounts recognized in the consolidated balance sheets:
Operating lease liabilities, current
Operating lease liabilities, long term
Revenue Recognition — The Company recognizes revenue when control of the ordered goods or services are transferred to its customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. Amounts billed for shipping and handling activities after the transfer of control to the customer are considered fulfillment activities and are recognized as revenue. The costs are accrued when the related revenue is recognized. Taxes collected from customers relating to product sales and remitted to governmental authorities are excluded from revenues. The Company sells its products mainly to distributors and retailers. In addition, the Company also sells its products direct to end users internationally. The products include insecticides, herbicides, soil fumigants, fungicides and biologicals. In addition, the Company recognizes royalty income related to licensing arrangements which qualify as functional licenses rather than symbolic licenses. These license agreements typically include non-refundable up-front fees and minimum guaranteed royalty payments. These fees are allocated to the performance obligations and recognized as revenue as the performance obligations are met. These performance obligations are typically met at a point in time. Sales-based royalties are not recognized as revenue until the underlying sales have occurred. Selective enterprise information of sales disaggregated by category and geographic region is as follows:
Net sales:
U.S. crop
U.S. non-crop
Total U.S.
International
Total net sales
Beginning January 1, 2025, the Company implemented a new organization structure, as part of its business transformation actions, and began servicing Canadian customers as part of its U.S. Crop business. The associated sales are now reported as U.S. Crop net sales. Canadian sales were reported within international net sales and amounted to $ 6,300 and $ 12,268 for the years ended December 31, 2024 and 2023, respectively.
Contract Assets — Contract assets relate to royalties earned on certain functional licenses granted for the use of the Company’s intellectual property. At December 31, 2025, the contract assets amounted to $ 8,250 and are included in other assets on the consolidated balance sheets. The Company did no t have any contract assets as of December 31, 2024.
Accrued Program Costs — The Company offers various discounts to customers based on purchases within a defined period, other pricing adjustments, some grower volume incentives or other key performance indicator driven incentives to distributors, retailers or growers, usually at the end of a growing season. The Company describes these payments made to customers as a result of these incentives and discounts as “Programs.” Programs are a critical part of doing business in both the U.S. crop and non-crop chemicals marketplaces. These discount Programs represent variable consideration. Revenues from sales are recorded at the net sales price, which is the transaction price, less an estimate of variable consideration which the Company expects to pay to its customers. Depending on the nature of the program, the Company uses either the expected value or most likely amount method for determining the estimated variable consideration. Each quarter the Company compares individual sale transactions with Programs to determine what, if any, Program liabilities have been incurred. Once this initial calculation is made for the specific quarter, sales and marketing management, along with executive and financial management, review the accumulated Program balance and, for volume driven payments, make assessments of whether or not customers are tracking in a manner that indicates that they will meet the requirements set out in agreed upon terms and conditions attached to each Program. Following this assessment, the Company adjusts the accumulated accrual to properly reflect the liability at the balance sheet date. Programs are paid out predominantly on an annual basis, usually in the final quarter of the financial year or the first quarter of the following year.
Customer Prepayments —From time to time, the Company receives prepayments from customers which are recorded as customer prepayments on the Company’s consolidated balance sheets. The Company does not recognize revenue on any such payments until the customer places binding purchase orders, the goods are shipped, and control is transferred to the customer. Revenue recognized for the years ended December 31, 2025, 2024, and 2023 that were included in the customer prepayments balance at the beginning of 2025, 2024, and 2023 was $ 52,675 , $ 64,947 , and $ 88,097 , respectively. The Company made refunds in the amount of $ 0 and $ 613 to customers for the year ended December 31, 2025 and 2024, respectively.
Current Expected Credit Losses— The Company maintains an allowance to cover its Current Expected Credit Losses ("CECL") on its trade receivables, other receivables and contract assets arising from the possible failure of customers to make contractual payments. The Company estimates credit losses expected over the life of its trade receivables, other receivables and contract assets based on historical information combined with current conditions that may affect a customer’s ability to pay and reasonable and supportable forecasts. In most instances, the Company’s policy is to write off trade receivables when they are deemed uncollectible regarding likely future payments. The vast majority of the Company's trade receivables, other receivables and contract assets are due in less than 365 days. Under the CECL impairment model, the Company develops and documents its allowance for credit losses on its trade receivables based on multiple portfolios. The determination of portfolios is based primarily on geographical location, type of customer and accounts receivables aging. A roll-forward of the allowances for current expected credit losses is presented in supplemental information.
Deferred Loan Fees — These fees in connection with the Company’s senior credit facility are capitalized and amortized on a straight-line basis over the life of the borrowing and included in interest expense, net.
Property, Plant and Equipment and Depreciation— Property, plant and equipment includes the cost of land, buildings, machinery and equipment, office furniture and fixtures, automobiles, construction projects and improvements to existing plant and equipment. Interest costs related to construction projects are capitalized at the Company’s current weighted average effective interest rate. Expenditures for minor repairs and maintenance are expensed as incurred. When property or equipment is sold or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts and the gain or loss realized on disposition is reflected in operations. All plant and equipment are depreciated using the straight-line method, utilizing the estimated useful lives.
Business Combinations — The Company uses its best estimates and assumptions to assign fair value to the tangible and intangible assets acquired and liabilities assumed at the acquisition date. The Company’s estimates are inherently uncertain and subject to refinement. During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the fair value of these tangible and intangible assets acquired and liabilities assumed, with the corresponding offset to goodwill or an adjustment to the gain from a bargain purchase. In addition, when appropriate uncertain tax positions and tax-related valuation allowances are initially recorded in connection with a business combination as of the acquisition date. The Company continues to collect information and re-evaluates these estimates and assumptions quarterly and records any adjustments to the Company’s preliminary estimates to goodwill or an adjustment to the gain from a bargain purchase, provided that the Company is within the measurement period. Upon the conclusion of the measurement period or final determination of the fair value of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the Company’s consolidated statement of operations.
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. An asset acquisition does not result in the recognition of goodwill and transaction costs are capitalized as part of the cost of the asset or group of assets acquired. The Company uses its best estimates and assumptions to assign fair value to the tangible and intangible assets acquired and liabilities assumed at the acquisition date. The acquisitions costs are allocated to the assets acquired on a relative fair value basis.
Intangible Assets — The primary identifiable intangible assets of the Company relate to assets associated with its product and business acquisitions. All the Company’s intangible assets are amortizing assets with finite lives. The estimated useful life of an identifiable intangible asset is based upon several factors including the effects of demand, competition, and expected changes in the marketability of the Company’s products.
Impairment — The carrying values of long-lived assets other than goodwill are reviewed for impairment annually and/or whenever events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. The Company evaluates recoverability of an asset group by comparing the carrying value to the future undiscounted cash flows that it expects to generate from the asset group. If the comparison indicates that the carrying value of an asset group is not recoverable, measurement of the impairment loss is based on the fair value of the asset.
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. No such impairment charge was recorded for the year ended December 31, 2023.
The Company annually tests goodwill for impairment on October 1, or earlier if triggering events occur. If the Company decides that it is appropriate to perform a qualitative assessment and concludes that the fair value of a reporting unit more likely than not exceeds its carrying value, no further evaluation is necessary. If the Company performs a quantitative assessment, the Company compares the fair value of a reporting unit with its carrying value and recognizes an impairment charge for the amount that the carrying value exceeds the reporting unit’s fair value. The determination of a reporting units’ fair value includes the Company’s use of a discounted cash flows model and a market approach. Key assumptions in the discounted cash flow include, but are not limited to, discount rates, future net sales growth, gross margins, expenses, capital expenditures, and terminal growth rates. The market approach key assumption relates to the earnings before interest, taxes, depreciation, and amortization (EBITDA) multiples.
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. Based on the results of the quantitative test, the carrying value of the international reporting unit exceeded its respective fair value by $ 23,816 . 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.
In 2024, the Company conducted its annual goodwill impairment test on October 1, 2024. Based on the results of the quantitative test, the Company concluded that goodwill related to its domestic reporting unit in the amount of $ 9,131 was fully impaired. The carrying value of the international reporting unit exceed its respective fair value by $ 17,918 . Based on the results of the quantitative test, the Company recorded goodwill impairments in the amount of $ 9,131 and $ 17,918 for the domestic and international reporting units during the year ended December 31, 2024, respectively. No impairment loss was recorded in 2023.
Fair Value of Financial Instruments— The accounting standard for fair value measurements provides a framework for measuring fair value and requires expanded disclosures regarding fair value measurements. Fair value is defined as the price that would be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. This accounting standard established a fair value hierarchy, which requires an entity to maximize the use of observable inputs, where available. The following summarizes the three levels of inputs required:
Level 1 – Quoted prices in active markets for identical assets or liabilities.
Level 2 – Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3 – Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability.
The Company did not have any significant Level 1 investments as of December 31, 2025. The Company's equity investment in Clean Seed Capital Group Ltd. was a Level 1 investment as of December 31, 2024 (see Note 13 – Equity Investments).
The carrying amount of the Company’s financial instruments, which principally include cash, accounts receivable, accounts payable and accrued expenses, approximates fair value because of the relatively short maturity of such instruments. The carrying amount of the Company’s borrowings, approximates fair value as they bear interest at a variable rate that represents current market rates.
Foreign Currency Translation— Certain international operations use the respective local currencies as their functional currency, while other international operations use the U.S. Dollar as their functional currency. The Company considers the U.S. Dollar as its reporting currency. Translation adjustments for subsidiaries where the functional currency is its local currency are included in other comprehensive (loss) income. Foreign currency transaction gains (losses) resulting from exchange rate fluctuation on transactions denominated in a currency other than the functional currency are reported in earnings. Assets and liabilities of the foreign operations denominated in local currencies are translated at the rate of exchange at the balance sheet date. Revenues and expenses are translated at the weighted average rate of exchange during the period. Translations of intercompany loans of a long-term investment nature are included as a component of translation adjustment in other comprehensive income (loss).
Income Taxes— The Company utilizes the asset and liability method of accounting for income taxes as set forth in ASC 740. Under the liability method, deferred taxes are determined based on the temporary differences between the financial statement and tax basis of assets and liabilities using tax rates expected to be in effect during the years in which the basis differences reverse. A valuation allowance is recorded when it is more likely than not that some of the deferred tax assets will not be realized. In determining the need for valuation allowances, the Company considers projected future taxable income and the availability of tax planning strategies. If in the future the Company determines that it will not be able to realize its recorded deferred tax assets, an increase in the valuation allowance would be recorded, decreasing earnings in the period in which such determination is made.
The Company assesses its income tax positions and records tax benefits for all years subject to examination based upon the Company’s evaluation of the facts, circumstances, and information available at the reporting date. For those tax positions where there is greater than 50% likelihood that a tax benefit will be sustained, the Company has recorded the largest amount of tax benefit that may potentially be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where there is less than 50% likelihood that a tax benefit will be sustained, no tax benefit has been recognized in the consolidated financial statements.
Per Share Information— Basic earnings per share (“EPS”) is computed as net income divided by the weighted average number of shares of common stock outstanding during the period. Diluted EPS reflects potential dilution to EPS that could occur if securities or other contracts, which, for the Company, consists of restricted stock grants and options to purchase shares of the Company’s common stock, are exercised as calculated using the treasury stock method.
The components of basic and diluted earnings per share were as follows:
Numerator:
Net (loss) income
Denominator:
Weighted average shares outstanding—basic
Dilutive effect of stock options and grants
Weighted average shares outstanding—diluted
Due to net losses for the years ended December 31, 2025 and 2024, stock options and other grants were excluded from the computation of diluted net loss per share as they would be anti-dilutive. For the year ended December 31, 2023, no stock options or grants were excluded from the computation of diluted net income because none were anti-dilutive. Unvested shares that are considered legally issued are excluded from the computation.
Use of Estimates— The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires the Company to make estimates and assumptions that affect the reported amounts of assets, liabilities, and revenues, at the date that the consolidated financial statements are prepared. Significant estimates relate to the allowance for expected credit losses, inventory valuation, impairment of long-lived assets, investments and goodwill, assets acquired, and liabilities assumed in connections with business combinations and asset acquisitions, accrued program costs, stock-based compensation and income taxes. Actual results could materially differ from those estimates.
Total comprehensive (loss) income— In addition to net (loss) income, total comprehensive (loss) income includes changes in equity that are excluded from the consolidated statements of operations and are recorded directly into a separate section of stockholders’ equity on the consolidated balance sheets. For the years ended December 31, 2025, 2024 and 2023, total comprehensive (loss) income consisted of net loss and foreign currency translation adjustments.
Stock-Based Compensation— The Company estimates the fair value of share-based payment awards on the date of grant. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods in the Company’s consolidated statements of operations. Compensation expense on awards subject to performance conditions is based on the quantity of awards that is probable of vesting.
Stock-based compensation expense recognized is reduced for estimated forfeitures. Estimated forfeitures recognized in the Company’s consolidated statements of operations reduced compensation expense by $ 41 , $ 67 , and $ 322 for the years ended December 31, 2025, 2024, and 2023, respectively. The Company estimates that 20.6 % of restricted stock grants and performance-based restricted shares and 13.7 % of stock option grants that are currently subject to vesting will be forfeited. These estimates are reviewed quarterly and revised as necessary.
The Company values restricted stock grants using the Company’s traded stock price at closing on the date of grant. For issuances of performance stock units subject to market vesting conditions, the Company calculates the fair value of the award using a Monte Carlo simulation valuation model on the grant date. 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.
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. The Company adopted this ASU on a prospective basis effective January 1, 2025. Refer to Note 4.
Recently Issued Accounting Guidance— In November 2024, the FASB issued ASU No. 2024-03, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses", and in January 2025, the FASB issued ASU No. 2025-01, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date". ASU 2024-03 requires public companies to disclose, in interim and reporting periods, additional information about certain expenses in the financial statements. For public business entities, ASU 2024-03, as clarified by ASU 2025-01, is effective for the first annual reporting period beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption of ASU 2024-03 is permitted. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements.
In July 2025, the FASB issued ASU No. 2025-05, "Financial Instruments - Credit Losses (Topic 326)". This update introduces a practical expedient for all entities and an accounting policy election other than public business entities related to applying Subtopic 326-20 to current accounts receivable and current contract assets arising from transactions accounted for under Topic 606. It is effective for fiscal years beginning after December 15, 2025 and interim periods within those annual reporting periods. Early adoption is permitted. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements.
The Company reviewed all other recently issued accounting pronouncements and concluded that they were either not applicable or not expected to have a significant impact on its consolidated financial statements.
(2) Property, Pla nt and Equipment
Property, plant and equipment at December 31, 2025 and 2024 consist of the following:
Estimated
useful lives
Land
Buildings and improvements
10 to 40 years
Machinery and equipment
3 to 25 years
Office furniture, fixtures and equipment
3 to 10 years
Automotive equipment
5 to 20 years
Construction in progress
Total gross value
Less accumulated depreciation
Total net value
Domestic
International
Total net value
For the years ended December 31, 2025, 2024 and 2023, the Company’s aggregate depreciation expense related to property, plant and equipment was $ 6,692 , $ 8,983 and $ 8,352 , respectively. For the years ended December 31, 2025, 2024 and 2023, the Company disposed fully depreciated assets in the amount of $ 1,134 , $ 876 , and $ 4,056 , respectively. 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 . Interest capitalized amounted to $ 85 , $ 396 and $ 567 for the years ended December 31, 2025, 2024 and 2023, respectively.
(3) Long-Term Debt
Long-term debt of the Company at December 31, 2025 and 2024 is summarized as follows:
Senior credit facility
Less deferred loan fees
The Company and certain of its affiliates were parties to a senior credit facility agreement entitled the “Third Amended and Restated Loan and Security Agreement” dated as of August 5, 2021 (the “Credit Agreement”), which is a senior secured lending facility among AMVAC, the Company’s principal operating subsidiary, as Agent (including the Company and AMVAC BV), as "Borrowers", on the one hand, and a group of commercial lenders led by BMO Bank, N.A. (formerly Bank of the West) as administrative agent, documentation agent, syndication agent, collateral agent and sole lead arranger, on the other hand. The Credit Agreement initially consisted of a line of credit of up to $ 275,000 , an accordion feature of up to $ 150,000 , a letter of credit and swingline sub-facility (each having limits of $ 25,000 ) and had a maturity date of August 5, 2026 . The Credit Agreement has underwent twelve amendments since 2021.
Under the Credit Agreement, revolving loans bore interest at a variable rate based, at borrower’s election with proper notice, on either (i) SOFR plus 0.1% per annum and the “Applicable Margin” or (ii) the greater of (x) the Prime Rate, (y) the Federal Funds Rate plus 0.5%, and (z) the Daily One-Month SOFR Rate plus 1.10%, plus, in the case of (x), (y) or (z), the Applicable Margin (“Adjusted Base Rate Revolver Loan”). Interest payments for SOFR Revolver Loans were payable on the last day of each interest period (either one-, three- or nine- months, as selected by the Company) and the maturity date, while interest payments for Adjusted Base Rate Revolver Loans were payable on the last business day of each month and the maturity date.
On August 18, 2025, AMVAC, as borrower, and affiliates (including Registrant), as guarantors and/or borrowers, entered into Amendment Number Twelve (the “Amendment”) to the Credit Agreement. The Amendment extended the maturity date of the Credit Agreement from August 5, 2026, to December 31, 2026, and amended the borrowing capacity under the revolving credit facility to $ 245,000 through November 29, 2025, then $ 225,000 until December 30, 2025, then $ 200,000 until March 31, 2026 and then $ 180,000 through December 31, 2026. The Amendment also included additional changes to the Credit Agreement, including: (i) amending the applicable margins for the applicable interest rates and unused line fee and letter of credit fee; (ii) adding a year-to-date Consolidated EBIDTA requirement of $ 4,500 as of June 30, 2025, $ 9,500 as of September 30, 2025 and $ 35,000 as of December 31, 2025 and a TTM Consolidated EBITDA requirement of not less than $ 37,500 as of March 31, 2026; (iii) requiring the Company to make prepayments on the loans once the Company’s cash balance exceeds a threshold; and (iv) suspending the Total Leverage Ratio covenant until June 30, 2026 and then applying a fiscal quarter end ratio of 4.00 : 1.00 .
On March 13, 2026, A MVAC, as borrower, and affiliates (including Registrant), as guarantors, entered into two loan agreements that, in effect, entirely refinanced the previously existing Credit Agreement. The first is a Credit and Guaranty Agreement with Wilmington Trust, National Association, as administrative agent, and a group of lenders led by Centerbridge Partners, L.P., under the terms of which lenders provide a senior, secured term loan in the aggregate principal amount of $ 225,000 (the "First Priority Term Loan"). The First Priority Term Loan includes a five-year term, initial interest at SOFR (minimum of 3.0 %) + 8.25 (with three potential stepdowns of 50bps each upon achievement of 1X, 1.5X and 2.0X inside closing net leverage ratio), amortization of 1.0% per annum, a no-call provision in year one (with potential for full repayment thereafter with additional exit fees), and two financial covenants - namely, a) a first lien debt-to-EBITDA ratio starting at 6.7X and stepping down to 4.0X by the fourth quarter of 2028, and b) a minimum liquidity requirement ranging from $ 20,000 to $ 45,000 on a monthly schedule through the fourth quarter of 2027, and increasing to $ 50,000 in January of 2028 and thereafter. Borrower may repay up to $ 35,000 per annum without incurring premium interest.
The second is a Credit and Guaranty Agreement with BMO Bank, N.A., as agent, and other lenders, under the terms of which lenders provide a second priority term loan in the aggregate principal amount of $ 60,000 (the "Second Priority Term Loan"). The Second Priority Term Loan is subordinate to the First Priority Term Loan, includes a five-year term, initial interest at SOFR + 2.0 , amortization of 10% per annum starting in the third quarter of 2027, no prepayment penalty and no financial covenants.
The interest rate on December 31, 2025, was 9.11 %. Interest incurred, including amortization of deferred loan fees, was $ 18,452 , $ 16,054 , and $ 12,391 for the years ended December 31, 2025, 2024 and 2023, respectively.
Substantially all the Company’s assets are pledged as collateral under the Credit and Guaranty Agreement. T he Company is also prevented from paying cash dividends to shareholders or making repurchases of its capital stock.
(4) Income Taxes
The provision for income taxes are:
Current:
Federal
State
Foreign
Deferred:
Federal
State
Foreign
Total
The table below provides the updated requirements of ASU 2023-09 for 2025. 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:
Amount
Percentage
Computed tax expense at statutory federal rates
Increase (decrease) in taxes resulting from:
State taxes, net of federal income tax benefit (1)
Foreign tax effects:
Panama
Other
Nicaragua
Change in Valuation Allowance
Other
Brazil
Foreign Rate Differential
Goodwill Impairment
Other
Australia
Goodwill Impairment
Other
Costa Rica
Foreign Rate Differential
Goodwill Impairment
Other
Other foreign jurisdictions
Effect of cross-border tax laws:
Subpart F Income
Tax credits
Research and development ("R&D") credits
Changes in valuation allowance
Nontaxable or nondeductible items:
Equity compensation
Other
Changes in unrecognized tax benefits
Other adjustments:
Return to provision
Other
Total
(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.
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:
Computed tax expense at statutory federal rates
Increase (decrease) in taxes resulting from:
State taxes, net of federal income tax benefit
Unrecognized tax benefits
Income tax credits
Foreign tax rate differential
Stock based compensation
Global intangible low-taxed income
Change in valuation allowance
Return to provision
Nondeductible expenses / (tax deductions)
Gross receipts taxes
Goodwill impairment
IP migration
Other
Total
(Loss) income before provision for income taxes is as follows:
Domestic
International
Total
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:
Deferred tax assets
Inventories
Program accrual
Vacation pay accrual
Accrued bonuses and severance
Bad debt expense
Stock compensation
Domestic NOL carryforward
Foreign NOL carryforward
Tax credits
Lease liability
Accrued expenses
Accrued product liability
Unrealized foreign exchange loss
Capitalized R&D costs
Disallowed interest expense
Other
Deferred tax assets
Less valuation allowance
Deferred tax assets, net
Deferred tax liabilities
Plant and equipment
Lease assets
Prepaid expenses
Other
Deferred tax liabilities
Total net deferred tax liabilities
Certain 2024 balances were reclassified to conform with the 2025 presentation.
As of December 31, 2025, the Company maintained a full valuation allowance against its net deferred income tax assets related to the Company’s operations in the United States, Brazil, Dominican Republic, Honduras, Nicaragua, Hong Kong, Spain, and Ukraine totaling $ 41,386 . The valuation allowance increased by $ 7,531 for the year ended December 31, 2025, of which $ 308 relates to unrealized foreign exchange gains and foreign currency translation included in other comprehensive (loss) income for 2025, and $ 7,839 included in the provision for income taxes for 2025. As of December 31, 2024, the Company maintained a full valuation allowance against the net deferred income tax assets related to the Company’s operations in the United States, Brazil, Dominican Republic, Honduras, Hong Kong, Spain, and Ukraine totaling $ 33,855 .
Gross foreign NOLs related to the Company's foreign operations were $ 22,231 and $ 19,577 , for the years ended December 31, 2025 and 2024, respectively. Substantially all of the Company’s foreign NOLs can be carried forward indefinitely.
Gross domestic federal and state NOLs available across all jurisdictions in which we operate were $ 76,166 and $ 30,062 as of December 31, 2025 and 2024, respectively. The Company’s federal NOL can be carried forward indefinitely and is subject to annual limitations in accordance with IRC Section 382. The Company’s state NOLs expire over varying intervals in the future and are subject to annual limitations in accordance with IRC Section 382.
The following is a roll-forward of the Company’s total gross unrecognized tax benefits, not including interest and penalties, for the years ended December 31, 2025 and 2024 included in other liabilities on the Company’s consolidated balance sheets:
Balance at beginning of year
Additions for tax positions related to the current year
Additions for tax positions related to the prior years
Reduction for tax positions related to the prior years
Effect of exchange rate changes
Balance at end of year
The Company recognizes accrued interest and penalties related to unrecognized tax benefits in the provision for income taxes in the Company’s consolidated financial statements. As of December 31, 2025 and 2024, the Company incurred $ 138 in both years in interest and penalties related to unrecognized tax benefits on its consolidated balance sheets.
The Company believes it is more likely than not that the deferred assets detailed in the table above, exclusive of those in the United States, Brazil, Dominican Republic, Honduras, Nicaragua, Hong Kong, Spain, and Ukraine with the previously mentioned full valuation allowances, will be realized in the normal course of business. It is the intent of the Company that undistributed earnings of foreign subsidiaries that amounted to $ 102,873 at December 31, 2025, are permanently reinvested. Determination of the unrecognized deferred tax liability is not practical due to the complexities of a hypothetical calculation.
The Company is subject to U.S. federal income tax as well as to income tax in multiple state jurisdictions. Federal income tax returns of the Company are subject to Internal Revenue Service (“IRS”) examination for the 2022 through 2024 tax years. State income tax returns are subject to examination for the 2021 through 2024 tax years. The Company has foreign income tax returns subject to examination.
On July 4, 2025, new U.S. tax legislation was signed into law (known as the "One Big Beautiful Bill Act" or "OBBBA") which makes permanent many of the tax provisions enacted in 2017 as part of the Tax Cuts and Jobs Act that were set to expire at the end of 2025. The Company has accounted for the impact of the new legislation during the year ended December 31, 2025 and the impact is not material to the results of operations.
Beginning in 2022, The Tax Cuts and Jobs Act of 2017 ("TCJA"), requires taxpayers to capitalize and amortize research and development expenditures pursuant to Internal Revenue Code, or IRC, Section 174. The enactment of the OBBBA repealed IRC Section 174 for tax years beginning after December 31, 2024. As of December 31, 2024, IRC Section 174 resulted in increases in the Company’s deferred tax asset balance of $ 7,587 . There was an increase in cash tax payments in the amount of $ 1,431 for the year ended December 31, 2024.
(5) Litigation and Environmental
The Company records a liability on its consolidated financial statements for loss contingencies when a loss is known or considered probable, and the amount can be reasonably estimated. When determining the estimated loss or range of loss, significant judgment is required to estimate the amount and timing of a loss to be recorded. The Company recognizes legal expenses in connection with loss contingencies as incurred.
Department of Justice and Environmental Protection Agency Investigation . On October 25, 2024, the U.S. District Court for the Southern District of Alabama approved, and entered a plea agreement pursuant to which the Company had entered a plea of guilty to one count of transporting hazardous waste without a waste manifest. This matter arose from the reimportation of used, substantially empty containers in 2014. Under the terms of the plea agreement, the Company paid a fine and entered into a three-year probation during which it will be subject to an environmental compliance plan, the form of which is currently before the court for its approval.
DBCP Cases
Over the course of the past 30 years, AMVAC and/or the Company have been named or otherwise implicated in a number of lawsuits concerning injuries allegedly arising from either contamination of water supplies or personal exposure to 1, 2-dibromo-3-chloropropane (“DBCP®”). DBCP was manufactured by several chemical companies, including Dow Chemical Company, Shell Oil Company and AMVAC (which ceased manufacture in about 1980) and was approved by the USEPA to control nematodes. DBCP was also applied on banana farms in Latin America. The USEPA suspended registrations of DBCP in October 1979, except for use on pineapples in Hawaii. That suspension was partially based on 1977 studies by other manufacturers that indicated a possible link between male fertility and exposure to DBCP among their factory production workers involved with producing the product.
Delaware DBCP Cases
Chavez & Marquinez . Two cases were filed independently in 2012 by the same law firm (HendlerLaw, P.C.) in Louisiana and Delaware involving claims on behalf of banana workers for personal injury allegedly arising from exposure to DBCP. Through several years of law and motion practice, the number of plaintiffs in the actions has been reduced from about 2,750 to 290 banana workers from Costa Rica, Ecuador, Guatemala and Panama, and both cases have been consolidated before the United States District Court for the District of Delaware (USDC DE No. 1:12-CV-00695 & 00697). Discovery commenced in 2018 and has consisted largely of seeking medical examinations from the remaining plaintiffs. In December 2022, defendants in this matter filed a motion for summary judgment against the Ecuadorian plaintiffs under the theory that the statute of limitations for negligence barred the action. In January 2024, the court denied defendants’ motion for summary judgment on the basis of “the most analogous case” doctrine. After further dismissals by plaintiffs’ counsel, about 40 claimants remain in the action. Trial dates have been tentatively scheduled for the first half of 2026 in groups of ten. On December 21, 2025, defendants, including AMVAC, brought motions for summary judgment against all claimants for various reasons, including, in the case of AMVAC, that no claimant had been able to testify under oath that he had ever heard of AMVAC or had been exposed to the Company’s product. At this stage in the proceedings, the Company does not believe that a loss is probable or reasonably estimable and has not recorded a loss contingency for these matters.
Other Matters
Pitre etc. v. Agrocentre Ladauniere et al. On February 11, 2022, a strawberry grower named Les Enterprises Pitre, Inc. filed a complaint in the Superior Court, District of Labelle, Province of Quebec, Canada, entitled Pitre, etc. v. Agrocentre Ladauniere, Inc. etal, including Amvac Chemical Corporation , seeking damages in the amount of approximately $ 5,000 arising from stunted growth of, and reduced yield from, its strawberry crop allegedly from the application of Amvac’s soil fumigant, Vapam, in spring of 2021. Examinations of plaintiff were held in mid-August 2022, during which plaintiff in effect confirmed that he had planted his seedlings before expiration of the full time interval following product application (as per the product label), that he had failed to follow the practice of planting a few test seedlings before planting an entire farm, and that he had placed his blind trust in his application adviser on all manner of timing and rate. An examination of the Company’s most knowledgeable witness took place in April 2024. Follow-up undertakings (discovery requests) continued thereafter. A trial date has been set to take place in about three years. The Company believes that the claims have no merit and intends to defend the matter. At this stage in the proceedings, there is not sufficient information to form a judgment as to either the probability or amount of loss; thus, the company has not set aside a reserve in connection with this matter.
Marathon Product Recall Matter . Beginning early in the second quarter of 2025, the Company received customer complaints alleging injury to ornamental plants from the application of up to four lots (having a value of about $ 350 ) of granular insecticide sold by Company subsidiary OHP Inc. for use on potted plants and hanging baskets. As acknowledged by the third-party formulator, Turf Care Supply (“TCS”), the lots in question, or a subset thereof, were out of specification and (although not known to the Company at time of sale or use) contained trace amounts of herbicide residues from a contaminated production line at that formulator’s facility. After having issued a stop sale and stop use notice for the subject lots to the distribution channel, the Company began a process of aggregating and validating customer claims and recalling unused products. At this stage, 272 parties have submitted claims, totaling $ 9,063 in estimated damages. To date, the Company has validated 57 claims amounting to approximately $ 2,050 , starting with those for which the most complete support had been provided by claimants. The Company made payments in the amount of approximately $ 1,414 as of December 31, 2025. Based upon the adequacy of documentation for claims validated to date, we believe that the remaining unvalidated claims are likely to be validated and that a loss related to these claims is probable and can be reasonably estimated. As a result, the Company recorded a liability in the amount of $ 7,649 at December 31, 2025 related to unpaid claims received.
Both the Company and the third-party formulator have notified their insurance carriers of the claim. The Company’s product liability policy includes a $ 5,000 deductible, while the formulator’s policy has a $ 0 deductible. It is not yet clear to the Company which types of claims will be compensable by the insurance carriers or the extent to which either or both carriers might respond to these claims. The parties met in a mediation that was held on January 7, 2026, which did not lead to a resolution. 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.
Region 9, Notice of Violation re: FPAS. On November 25, 2024, EPA Region IX issued to American Vanguard Chemical Corporation a letter requesting that AMVAC show cause why a civil penalty should not be assessed with respect to allegations that, from 2020 through 2023, AMVAC violated Section 12(a)(2)(N) of FIFRA by exporting 18 unregistered pesticides to foreign purchasers in 14 countries without submitting a Foreign Purchaser Acknowledgement Statement (“FPAS”) from each foreign purchaser to EPA, as required by 40 C.F.R. § 168.75(c). The Company continues to discuss this matter with EPA and has entered into a tolling agreement with the agency to extend the time for resolution through March 2026. At this stage, the Company believes that a loss is probable and has set a reserve in an amount that is not material to its financial statements.
(6) U.S. Employee Deferred Compensation and Stock Purchase Plans
The Company maintains a deferred compensation plan (“the Plan”) for all eligible employees. The Plan calls for each eligible employee, at the employee’s election, to participate in an income deferral arrangement under Internal Revenue Code Section 401(k). The plan allows eligible employees to make contributions, which cannot exceed 100 % of compensation, or the annual dollar limit set by the Internal Revenue Code. The Company matches the first 5 % of employee contributions. The Company’s contributions to the Plan amounted t o $ 2,210 , $ 2,525 and $ 2,507 in 2025, 2024 and 2023, respectively.
During 2001, the Company’s Board of Directors adopted the AVD Employee Stock Purchase Plan (the “ESPP Plan”). The Plan allows eligible employees to purchase shares of common stock through payroll deductions at a discounted price. An original aggregate number of approximately 1,000,000 shares of the Company’s Common Stock, par value $ 0.10 per share (subject to adjustment for any stock dividend, stock split or other relevant changes in the Company’s capitalization) were allowed to be sold pursuant to the Plan, which is intended to qualify under Section 423 of the Internal Revenue Code. The Plan allows for purchases in a series of offering periods, each six months in duration, with new offering periods (other than the initial offering period) commencing on January 1 and July 1 of each year . The initial offering period commenced on July 1, 2001. Pursuant to action taken by the Company’s Board of Directors on December 10, 2010, the expiration of the Plan was extended to December 31, 2013. The Plan was amended and restated on June 30, 2011, following stockholders’ ratification of the extended expiration date. The Plan was amended as of June 6, 2018, following stockholders’ ratification of a ten-year extension to the expiration date (which now stands at December 31, 2028 ). Under the Plan, as amended as of June 6, 2018, 995,000 shares of the Company’s common stock were authorized. As of December 31, 2025 and 2024, 200,951 and 349,148 shares, respectively, remained available under the plan. The expense recognized under the Plan was immaterial during the years ended December 31, 2025, 2024 and 2023, respectively.
Shares of common stock purchased through the Plan in 2025, 2024 and 2023 were 148,197 , 92,767 and 50,025 , respectively.
(7) Major Customers
In 2025, there were three customers that accounted for 13 %, 12 % and 12 %, of the Company’s consolidated sales. In 2024, there were three customers that accounted for 14 %, 13 % and 11 %, of the Company’s consolidated sales. In 2023, there were three customers that accounted for 15 %, 14 % and 8 %, of the Company’s consolidated sales.
The Company primarily sells its products to distributors, buying cooperatives, other co-operative groups and, in certain territories, end users, and extends credit based on an evaluation of the customer’s financial condition. The Company had three significant customers who each accounted for approximately 8 %, 5 % and 4 % of the Company’s receivables as of December 31, 2025. The Company had three significant customers who each accounted for approximately 5 %, 3 % and 3 % of the Company’s receivables as of December 31, 2024. The Company has long-standing relationships with its customers and considers its credit risk associated with its domestic business for accounts receivable to be insignificant.
The Company’s receivables, excluding allowances for expected credit losses, by geography as of December 31, 2025 and 2024 are summarized as follows:
Domestic receivables
International receivables
Total receivables
International sales by territory based on customer location for 2025, 2024 and 2023 were as follows:
South and Central America
Mexico
Asia
Australia & New Zealand
Canada
Africa
Europe
Middle East
Total international net sales
(8) Product and Business Acquisitions
The Company did no t complete any product and business acquisitions during the years ended December 31, 2025 and 2024.
On October 5, 2023, the Company completed the acquisition of all outstanding stock of Punto Verde S.A. Punversa (Punto Verde), a well-established distributor in Guayaquil, Ecuador, to strengthen its product portfolio and market access in the Latin American region. The Company paid cash consideration of $ 4,492 , which was net of cash acquired of $ 233 . 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
Inventory and other current assets
Property, plant, and equipment
Customer relationships
Product registrations and product rights
Goodwill
Liabilities assumed
Total
Liabilities assumed include liabilities of $ 447 related to income tax matters. Goodwill is not expected to be deductible for income tax purposes. The operating results of Punto Verde have been included in the Company's consolidated statements of operations from the date of acquisition. Pro-forma financial information is not included herein as the pro-forma impact of the acquisition is not material.
(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
Additions during fiscal 2023
Impact of movement in exchange rates
Amortization expense
Intangible assets at December 31, 2023
Measurement period adjustment
Additions during fiscal 2024
Impact of movement in exchange rates
Amortization expense
Asset impairment
Intangible assets at December 31, 2024
Additions during fiscal 2025
Impact of movement in exchange rates
Amortization expense
Asset impairment
Intangible assets at December 31, 2025
Goodwill at January 1, 2023
Additions during fiscal 2023
Impact of movement in exchange rates
Goodwill at December 31, 2023
Measurement period adjustment
Impact of movement in exchange rates
Goodwill impairment
Goodwill at December 31, 2024
Impact of movement in exchange rates
Goodwill impairment
Goodwill at December 31, 2025
The Company recorded intangible asset impairment charges related to its Diflubenzuron and PCNB products in the amount of $ 1,802 during the year ended December 31, 2025. During the year ended December 31, 2024, the Company recorded impairment charges related to its SIMPAS precision application technology platform, two of its herbicide products and one of its fungicide products in the amount of $ 9,345 .
The Company recorded $ 21,040 and $ 27,049 in goodwill impairment charges for the year ended December 31, 2025 and 2024, respectively.
The following schedule represents the gross carrying amount and accumulated amortization of intangible assets as of December 31, 2025 and 2024. Product rights and trademarks are amortized over the lesser of the useful life ranging from 10 to 28 years, or the patent life. Customer lists are amortized over their expected useful lives of nine to ten years . The amortization expense is included in operating expenses on the consolidated statements of operations.
Gross
Accumulated
Amortization
Net Book
Value
Gross
Accumulated
Amortization
Net Book
Value
Product rights and patents
Trademarks
Customer lists
Total intangibles assets
Domestic intangible assets
International intangible assets
Total intangibles assets - domestic and international
The following schedule represents future amortization charges related to intangible assets:
Year ending December 31,
Amount
Thereafter
The following schedule represents the balance of goodwill at December 31, 2025 and 2024:
Domestic
International
Total goodwill, domestic and international
(10) Commitments
Our minimum commitments under our take-or-pay purchase obligations associated with the sourcing of materials total approximately $7,800 as of December 31, 2025. Since the majority of our minimum obligations under these contracts are over the length of the contract on a year-by-year basis, the Company is unable to determine the periods in which these obligations could be payable under these contracts. However, the Company intends to fulfill the obligations associated with these contracts through its purchases during the normal course of business.
(11) Equity Plan Awards
Under the Company’s Equity Incentive Plan of 1993, as amended (“the Plan”), all employees are eligible to receive non-assignable and non-transferable restricted stock, options to purchase common stock, and other forms of equity. As of December 31, 2025, the number of securities remaining available for future issuance under the Plan is 1,331,761 .
The below tables illustrate the Company’s stock-based compensation, unamortized stock-based compensation, and remaining weighted average period for the years ended December 31, 2025, 2024 and 2023. This projected expense will change if any stock options and restricted stock are granted or cancelled prior to the respective reporting periods, or if there are any changes required to be made for estimated forfeitures.
Stock-Based
Compensation
Unamortized
Stock-Based
Compensation
Remaining
Weighted
Average
Period (years)
December 31, 2025
Options
Restricted Stock
Unrestricted Stock
Performance-Based Restricted Stock
Total
December 31, 2024
Options
Restricted Stock
Unrestricted Stock
Performance-Based Restricted Stock
Total
December 31, 2023
Restricted Stock
Unrestricted Stock
Performance-Based Restricted Stock
Total
Restricted and Unrestricted Stock
A summary of nonvested restricted and unrestricted stock is presented below:
Number
of Shares
Weighted
Average
Grant
Date Fair
Value
Number
of Shares
Weighted
Average
Grant
Date Fair
Value
Number
of Shares
Weighted
Average
Grant
Date Fair
Value
Nonvested shares at January 1 st
Granted
Vested
Forfeited
Nonvested shares at December 31 st
The total grant-date fair value of stocks vested during the years ended December 31, 2025, 2024, and 2023 were $ 3,823 , $ 6,158 , and $ 4,763 , respectively.
Performance-Based Restricted Stock
A summary of nonvested performance-based stock is presented below:
December 31, 2025
December 31, 2024
December 31, 2023
Number
of Shares
Weighted
Average
Grant
Date Fair
Value
Number
of Shares
Weighted
Average
Grant
Date Fair
Value
Number
of Shares
Weighted
Average
Grant
Date Fair
Value
Nonvested shares at January 1 st
Granted
Change based on performance achievement
Vested
Forfeited
Nonvested shares at December 31 st
The total grant-date fair value of stocks vested during the years ended December 31, 2025, 2024, and 2023 were $ 21 , $ 1,733 , and $ 1,206 , respectively.
Performance Based Restricted Stock Granted in 2025 — There were no performance based shares issued during the year ended December 31, 2025.
Performance Based Restricted Stock Granted in 2024 — During the year ended December 31, 2024, the Company issued a total of 177,010 performance based restricted stock subject to market vesting conditions to its CEO. The shares granted have an average fair value of $ 2.13 . The fair value was determined by using the Monte Carlo valuation method. The fair value of these shares will be expensed over the requisite service period. 118,007 of the shares have a five-year performance period beginning on December 9, 2024 and ending on December 9, 2029. These shares are based upon the relative growth of the fair market value of the Company's stock price over the course of the performance period as compared to the Company's stock price at December 9, 2024. For 59,003 of the shares, the performance period is one-, three-, and five-year periods beginning on December 9, 2024, and ending on December 9, 2025, December 9, 2027, and December 9, 2029. These shares are based upon the relative growth of the fair market value of the Company's stock price over the course of the performance period compared to the Russell 2000 Index as measured at the end of each performance period.
Performance Based Restricted Stock Granted in 2023 — During the year ended December 31, 2023, the Company issued a total of 94,028 performance-based shares to employees. The shares granted during 2023 have an average fair value of $ 21.51 . The fair value was determined by using the publicly traded share price as of the market close on the date of grant or the Monte Carlo valuation method for shares subject to market vesting conditions. The Company will recognize as expense the value of the performance-based shares over the required service period from grant date. The shares will cliff vest on April 20, 2026 , with a measurement period commencing January 1, 2023, and ending December 31, 2025. Eighty percent of these performance-based shares are based upon the financial performance of the Company, specifically, earnings before interest and tax (“EBIT”) goal weighted at 50 % and a net sales goal weighted at 30 %. The remaining 20 % of performance-based shares are based upon AVD stock price appreciation over the same performance measurement period. The EBIT and net sales goals measure the relative growth of the Company’s EBIT and net sales for the performance measurement period, as compared to the median growth of EBIT and net sales for an identified peer group. The stockholder return goal measures the relative growth of the fair market value of the Company’s stock price over the performance measurement period, as compared to that of the Russell 2000 Index and the median fair market value of the common stock of the comparator companies, identified in the Company’s 2022 Proxy Statement. All parts of these awards vest in three years but are subject to reduction to a minimum (or even zero) for recording less than the targeted performance and to increase to a maximum of 200 % for achieving in excess of the targeted performance.
Performance Based Restricted Stock Granted in 2022 — During 2025, the Company concluded that none of the performance based restricted stock granted in 2022 vested as the underlying performance measures were not met.
Stock Options
Under the terms of the Company’s ISOP, under which options to purchase common stock can be issued, all employees are eligible to receive non-assignable and non-transferable options to purchase shares. The exercise price of any option may not be less than the fair market value of the shares on the date of grant; provided, however, that the exercise price of any option granted to an eligible employee owning more than 10 % of the outstanding common stock may not be less than 110 % of the fair market value of the shares underlying such option on the date of grant. No options granted may be exercisable more than ten years after the date of grant.
In 2024, the Company granted incentive stock options to employees and recorded an expense of $ 314 . In 2025, the Company recorded an expe nse of $ 229 related to the incentive stock options granted in 2024. As of December 31, 2025, there were 70,778 outstanding s tock options that are vested and exercisable. In 2023, no stock options were granted.
Incentive Stock Option Plans
Activity of the incentive stock option plans:
Number of
Shares
Weighted Average
Exercise Price Per
Share
Balance outstanding, January 1, 2023
Options exercised
Balance outstanding, December 31, 2023
Options granted
Options exercised
Options expired
Balance outstanding, December 31, 2024
Options granted
Options exercised
Options expired
Balance outstanding, December 31, 2025
All the incentive stock options outstanding as of December 31, 2025 have an exercise price per share of $ 10.28 and a remaining life of 58 months.
Performance Incentive Stock Option Plan
Activity of the performance incentive stock option plan:
Number of
Shares
Weighted
Average Exercise
Price Per
Share
Balance outstanding, January 1, 2023
Options granted
Options expired
Options forfeited
Balance outstanding, December 31, 2024
Options granted
Options expired
Options forfeited
Balance outstanding, December 31, 2025
All the performance incentive stock options outstanding as of December 31, 2025 have an exercise price per share of $ 10.28 and a remaining life of 58 months.
The total intrinsic value of options exercised during 2025, 2024, and 2023 was $ 0 , $ 0 , and $ 35 , respectively. Cash received from stock options exercised during 2025, 2024, and 2023 was $ 0 , $ 0 , and $ 46 , respectively. Of the outstanding options, 94,794 are v ested and the intrinsic value amounted to $ 0 as of December 31, 2025.
(12) Accumulated Other Comprehensive Loss
The following table lists the beginning balance, annual activity and ending balance of foreign currency translation adjustment included as a component of accumulated other comprehensive loss:
Balance, January 1, 2023
Foreign currency translation adjustment, net of tax effects of ($ 277 )
Balance, December 31, 2023
Foreign currency translation adjustment, net of tax effects of $ 198
Balance, December 31, 2024
Foreign currency translation adjustment, net of tax effects of ($ 53 )
Balance, December 31, 2025
(13) Equity Investments
In February 2016, AMVAC BV made an equity investment of $ 3,283 in Biological Products for Agriculture (“Bi-PA”). Bi-PA develops biological plant protection products that can be used for the control of pests and disease of agricultural crops. As of December 31, 2025, 2024 and 2023, the Company’s ownership position in Bi-PA was 15 %. Since this investment does not have readily determinable fair value, the Company has elected to measure the investment at cost less impairment, if any, and to record an increase or decrease for changes resulting from observable price changes in orderly transactions for the identical or a similar investment of Bi-PA. The Company periodically reviews the investment for possible impairment and concluded in the fourth quarter of 2024 that its investment in Bi-PA is fully impaired. As a result, the Company recorded an impairment charge in the amount of $ 2,884 during the year ended December 31, 2024. Total cumulative impairment charges amounted to $ 0 , $ 3,283 , and $ 399 as of December 31, 2025, 2024, and 2023.
On April 1, 2020, AMVAC purchased 6,250,000 shares, an ownership of approximately 8 %, of common stock of Clean Seed Capital Group Ltd. The shares are publicly traded, have a readily determinable fair value, and are considered a Level 1 investment. The fair value of the stock amounted to $ 501 and $ 938 as of December 31, 2025 and 2024, respectively. The Company recorded a loss of $ 437 for the year ended December 31, 2025, a gain of $ 513 for the year ended December 31, 2024, and a loss of $ 359 for the year ended December 31, 2023 . The investment is included within other assets on the consolidated balance sheets. The Company initially invested $ 1,190 to purchase its stock in Clean Seed Capital Group Ltd. Since that time, the Company has recorded net losses in the amount of $ 689 .
(14) Share Repurchase Programs
The Company periodically repurchases shares of its common stock under a board-authorized repurchase program through a combination of open market transactions and accelerated share repurchase ("ASR") arrangements.
On May 25, 2023, pursuant to a Board of Directors resolution, the Company announced its intention to repurchase up to $ 15,000 of its common stock under a 10b5-1 plan, par value $ 0.10 per share, in the open market over the succeeding one year, subject to limitations and restrictions under applicable securities laws. During the year ended December 31, 2023, the Company repurchased 857,455 shares of its common stock for a total of $ 14,982 at an average price of $ 17.55 per share under this plan.
The shares and respective amount are recorded as treasury shares on the Company’s consolidated balance sheets. The table below summarized the number of shares of the Company's common stock that were repurchased during the years ended December 31, 2025. No shares were repurchased in 2025 or 2024.
Year ended
Total number of
shares purchased
Average price paid
per share
Total amount paid
December 31, 2025
December 31, 2024
December 31, 2023
Pursuant to Amendments Number Six, Seven, and Eight to the Third Amended Loan and Security Agreement, the Company is currently prevented from making stock repurchases, effective November 7, 2023 .
(15) Supplemental Cash Flows Information
Supplemental cash flow information:
Cash paid during the year for:
Interest
Income taxes, net
Non-cash transactions:
Cash dividends declared and included in accrued expenses
Reconciliation of unrestricted cash and restricted cash reported in the consolidated balance sheets
Unrestricted cash
Restricted cash
Total cash
The following tables present cash paid for income taxes, net of refunds received, by jurisdiction:
Amount
Percentage
Worldwide
Federal
State
Foreign
Total
State
Amount
Percentage
Other
Total State
Foreign
Amount
Percentage
Netherlands
Mexico
Nicaragua
Australia
India
Other
Total Foreign
(16) Segment Information
The Company operates as a single operating segment, which is the business of developing, manufacturing and distributing chemical, biological and biorational products for agricultural, commercial and consumer uses. The Company synthesizes and formulates chemicals and ferments and extracts microbial products for crops, turf, ornamental plants, and human and animal health protection.
The Company’s CODM is the Chief Executive Officer, who manages the Company’s operations based on consolidated financial information for purposes of evaluating financial performance and allocating resources. The financial information reviewed by the CODM includes revenue by product line and region, and key expense categories that are regularly provided for the consolidated company.
The accounting policies of the Company’s single operating segment are the same as those described in the summary of significant accounting policies. Although there are other measures of operating performance used by the CODM, the Company concluded that consolidated operating (loss) income is the measure required to be disclosed as the segment measure of profit or loss. Operating (loss) income is utilized to evaluate to monitor budget versus actual results in order to gain more depth and understanding of the factors driving the business. When evaluating the Company’s financial performance, the following table sets forth significant expense categories regularly provided to the CODM:
Net sales
Cost of sales:
Material and other costs
Warehousing, handling, and outbound freight
Total cost of sales
Gross profit
Operating expenses
Selling, general and administrative
Research, product development and regulatory
Product liability claims
Transformation
Asset impairment charges
Gain from sale of assets
Operating (loss) income
Change in fair value of equity investments, net
Interest and other expenses, net
(Loss) income before provision for income taxes
Provision for income taxes
Net (loss) income
Assets provided to the CODM are consistent with those reported on the consolidated balance sheets.
(17) Subsequent event
On March 13, 2026, Management approved a plan to substantially reduce the production activities at its manufacturing facility in Los Angeles and transfer these production activities to its Axis or Marsing facilities as part of its broader transformation plan to reduce production overcapacities and related operating costs. This transfer is expected to be completed by the second quarter of 2026. The Company estimates that in connection with the plant reduction, it will incur one-time pre-tax charges of approximately $ 8,000 to $ 10,000 , which includes approximately $ 4,000 in non-cash asset impairments, $ 2,000 in waste disposal costs, and $ 2,000 to $ 4,000 in other costs.
- Exhibit 4.2avd-ex4_2.htm · 20.5 KB
- Exhibit 19avd-ex19.htm · 43.6 KB
- Exhibit 23.1: Consent of Independent Auditorsavd-ex23_1.htm · 5.3 KB
- Exhibit 31.1: Rule 13a-14(a) Certification (CEO)avd-ex31_1.htm · 14.7 KB
- Exhibit 31.2: Rule 13a-14(a) Certification (CFO)avd-ex31_2.htm · 14.7 KB
- Exhibit 32.1: Section 1350 Certification (CEO)avd-ex32_1.htm · 9.1 KB
- 0001193125-26-108593-index-headers.html0001193125-26-108593-index-headers.html
- Ticker
- AVD
- CIK
0000005981- Form Type
- 10-K
- Accession Number
0001193125-26-108593- Filed
- Mar 16, 2026
- Period
- Dec 31, 2025 (Q4 25)
- Industry
- Agricultural Chemicals
External resources
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