American Vanguard Corporation Reports 14% Decline in Net Sales for Q1 2025

American Vanguard Corporation reported a significant decline in financial performance for the first quarter of 2025, with net sales totaling $115.8 million, a decrease of 14% from $135.1 million in the same period of 2024. The company's gross profit also fell sharply to $30.2 million, down 29% from $42.4 million year-over-year, resulting in a gross margin of 26%, compared to 31% in the prior year. The company recorded a net loss of $8.5 million, or $0.30 per share, contrasting with a net income of $1.6 million, or $0.06 per share, in the first quarter of 2024.

The decline in revenue was attributed primarily to the voluntary discontinuation of a high-margin herbicide product in late 2024, which significantly impacted sales in both the U.S. and international markets, each down 14%. The U.S. crop segment saw a 15% drop in sales, while the non-crop segment decreased by 12%. Despite these challenges, certain product lines, such as soil fumigants and granular soil insecticides, performed better than in the previous year. The company also noted a decrease in costs of goods sold by 8%, driven by lower sales volume.

Operationally, American Vanguard's total operating expenses decreased by 5% to $34.5 million, with selling expenses down significantly due to reduced headcount and marketing costs. However, transformation costs related to the company's digital and structural initiatives increased to $2.2 million, up from $1.2 million in the prior year. The company’s interest expense remained relatively stable at $3.8 million, reflecting increased borrowings offset by a lower effective interest rate.

In terms of liquidity, American Vanguard used $20.6 million in cash for operating activities during the quarter, an improvement from $36.1 million in the same period last year. The company reported a decrease in customer prepayments and an increase in accounts payable, indicating a shift in working capital management. As of March 31, 2025, total assets stood at $631.6 million, with total liabilities at $404.2 million, resulting in stockholders' equity of $227.4 million.

Looking ahead, American Vanguard anticipates continued challenges in the agricultural market, including fluctuating demand and pricing pressures. The company is focused on improving its product mix and operational efficiencies while managing its transformation initiatives. Despite the current losses, management believes that cash flow from operations, existing cash balances, and available borrowings will provide sufficient liquidity to meet working capital needs over the next twelve months.