American Vanguard : First Quarter 2025 Presentation

Published: 2025-06-09 13:30:07 ET AVD

Published on 06/09/2025 at 13:30

Ǫ1 2025 Earnings

June 2025

Underlying demand for our products has remained well supported. This has not translated into better sales performance due to customer destocking.

AVD continues to realize the benefits of its commercial and operational improvements.

Decreased operating expenses by $5 million, including a $2 million decline in RCD coupled with a $3 million decline in SGCA, compared to the prior year, excluding non-recurring charges.

The Company is adjusting its full year adjusted EBITDA target to $40 - $44 million and its full year Revenue target to $535 million - $545 million

The company expects to spend $8 - $9 million on capex, thus 2025 should be a strong free cash flow year.

Reduced net working capital by $85 million year-over-year

Executive Summary - Key Messages

Industry data indicates that American Vanguard products continue to be applied in the field, yet customers destocking led to sales being down year over year.

Customer destocking accounts for a large portion of the weakness in the first quarter of 2025.

Inventories have been depleted to critical levels, and while restocking may not be eminent, buying patterns matching up with in-field applications should lead to a stronger second half of the year.

Why do we expect a strong 2H? Customer Inventories have been drawn down

The reduction in revenue was driven by weakness in the Mexican agave market and first quarter 2024 results including a non-recurring item

U.S. Crop sales down 18% year-over-year -

The decline was driven by the absence of an herbicide product that was voluntarily canceled last year

The company had to provide some incentives to our customers in order to match discounts that were offered by our competitors.

In $M

Ǫ1 2025

Ǫ1 2024

U.S. Crop

$57.2

$6G.8

U.S. Non-Crop

$15.6

$17.8

Total U.S.

$72.7

$87.5

International

$43.0

$50.1

Total Net Revenue

$115.8

$135.1

Ǫ1 2025 Revenue Results

Declines in revenue were impacted by weakness in Mexico, customer destocking and the cancellation of a herbicide product.

Adj. EBITDA was negatively effected by the 14% decline in revenue, as well as the impact of the implementation of incentive programs, which were created to compete with similar programs used by competitors

In $M

Ǫ1 2025

Ǫ1 2024

Revenue

$115.8

$135.1

Adjusted EBITDA

$3.0

$15.5

Adjusted EBITDA Margin

2.6%

11.3%

Ǫ1 2025 Financial Results

The Company continues to be focused on cost-cutting initiatives. On an non-GAAP, or like-for-like basis, total operating expenses declined by $5.0 million or 14% this quarter compared to the year ago period.

In the quarter, the company extracted $2.2 million of selling and marketing expenses and $2.1 million of research and development costs. We also decreased GCA expense by $700,000. This is a strong start to the transformation plan and the Company expects to further decrease costs out of the business.

$38M

$33M

Ǫ1 2024 Ǫ1 2025

Ǫ1'25 Operating Expenses

Implementing a SIOP (sales, inventory and operations planning) process - to better utilize data to anticipate and better manage around customer buying patterns

Hiring a dedicated purchasing and procurement team - focusing, among other things, on managing and optimizing inventory levels and extending DPO days

$238M

$153M

Ǫ1 2024 Ǫ1 2025

*Adjusted results exclude recalled items, transformation costs, and asset impairment charges

Ǫ1'25 Net Working Capital

Operating Expenses declined $5 million as the Company cut $2.2 million of selling and marketing expenses and $2.1 million of RCD expenses. GCA costs declined $700,000 in the quarter as the Company continues to extract additional costs out of the business.

The Company continues to expect Free Cash Flow improvements, and we plan on allocating the excess Free Cash Flow towards debt reduction.

With the transformation, the Company expects future margin improvement and a return to margin expansion in 2026 and beyond.

Transformation Initiatives (Update)

AVD's Top 10 Products (2024)

Extensive product offering coupled with numerous applications…

Metam Sodium

Phorate / Thimet

Aztec

Counter

Naled

Bromacil

Mocap

Bidrin

Impact

Smartchoice

Applications

Suppression

Management

Protection

Beverage

Emergence

% of 2024

Net Sales

~15%

~C%

~C%

~C%

~4%

~3%

~3%

~3%

~3%

~3%

Weed Control

Nematode Control

Soilborne Disease Management

Soil Treatment

Plant Health

Resistance Management

Pest Control

Pest Control

Soil Application

Pest

Resistance Management

Pest Control

Nematicide Activity

Soil Application

Mosquito Control

Pest

Poultry

Public Health

Long-Term Weed Control

Industrial

Perennial Crops

Nematode Control

Insect Pest Management

Food &

Insect Pest Control

Cotton

Tree Nut & Pecan Protection

Weed Control

Crop

Crop Safety

Crop Safety

Pest Control

Plant Yields

Peer A

Peer B

Peer C

Peer D

Peer E

Peer F

Peer G

Peer H

Peer I

7%

Median: (6%)

(2%)

(3%)

(5%)

(6%)

(6%)

(9%)

(11%)

(12%)

(14%)

…enabling market leading resilience through unprecedented market downturns

Branded, Diversified Products Support Market Resilience

Demand for the remainder of the year is expected to remain strong, as the headwinds of customer pull through in Ǫ4 2024 have subsided.

EBITDA is expected to benefit from the continued realization of commercial and operational improvements.

Declines in operating expenses should more than offset gross margin declines.

Metric

Target

Adjusted EBITDA

$40 - $44 million

Revenue

$535 - $545 Million

FY 2025 Guidance

$69.8

$56.8

$50.1

$43.0

$17.8

$15.6

International

U.S. Non-Crop

U.S. Crop

Ǫ1 2025 Revenue

($000's)

Ǫ1 2025

Ǫ1 2024

Change**

U.S Crop

$57.2

$6G.8

(18%)

U.S. Non-Crop

$15.6

$17.8

(12%)

Total U.S.

$72.7

$87.5

(17%)

International

$43.0

$50.1

(14%)

Total Net Revenue

$115.8

$135.1

(14%)

Total Cost of Sales

($85.6)

($G2.7)

(8%)

Total Gross Profit

$30.2

$42.4

(2G%)

Total Gross Margin

26%

31%

(500 bps)

*Adjusted results exclude recalled items

**Change metrics are adjusted 2025 vs 2024 results

Ǫ1 2025 Gross Profit

Disclaimer

American Vanguard Corporation published this content on June 09, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on June 09, 2025 at 17:29 UTC.