American Vanguard Corporation Q1 FY2025 earnings call

• Operating expenses dropped by $5 million in Q1 2025 compared to the year-ago period. - Net trade working capital was reduced by $86 million. - Channel inventories in the U.S. are at historic lows, and customers are starting to replenish stocks. - Metam sales up 14% and Thimet sales up 17% were bright spots. - Focus on cost containment with OpEx down $5 million in Q1, and improvement in net working capital accounts with inventory up only 3% since year-end 2024 and debt down $20 million or 14% from last year.

In the first quarter of 2025, American Vanguard generated net sales of $116 million, a 14% decrease compared to the first quarter of 2024. The primary product segments saw specific performances: Metam sales were up 14% during the quarter, being the largest single product and well-respected in the market. Thimet sales were up 17% due to increased peanut acreage. The company had net sales of $116 million in Q1 2025 vs $135 million in Q1 2024, with adjusted EBITDA of $3 million vs $15.5 million in the year-ago period.

• Decreased full-year adjusted EBITDA target range to $40 million to $44 million from $45 million to $52 million. - Adjusted revenue estimate to $535 million to $545 million. - Impact of tariffs on cost of goods sold is nominal; U.S.-based footprint may create opportunities from long-term tariffs.

• Weather conditions affecting sales in certain regions like Australia drought. - Changes in regulatory policy. - Continued destocking trend in the market longer than anticipated. - Weakness in the Mexican agave market. - Competitive pricing pressures leading to margin decline.

Q: Ben Klieve asked about year-over-year top line performance cadence, implications of Dacthal, Bromacil, and corn vs soy acreage impact.

A: Dak Kaye responded that Dacthal was a sizable year-over-year sales drop, agave/Bromacil in Mexico and Australia drought were other factors, metam and Thimet were positives; corn acreage shift benefits corn soil insecticide sales.

Q: Wayne Pinsent inquired about the cadence of reaching 15% margin target.

A: Dak Kaye stated the goal of 15% EBITDA margin over the long term remains, with sales variance related to destocking, and positive signs from transformation in Brazil.

Q: Rosemarie Morbelli asked about pricing due to competitive environment and categories affected.

A: Dak Kaye mentioned unusual Q1 competition around inventory headroom and discounting, with Folex facing generic pressure but U.S.-based production expected to improve long term.