American Vanguard Corporation Q1 FY2026 earnings call

• In 2025, important actions were taken on commercial, operational fronts, made technology and system investments, and key personnel changes. - Streamlined manufacturing footprint, transferring production from LA facility to Alabama operation, expecting annualized savings of at least $4 million. - Enhanced management team, added experienced talent and promoted rising stars. - Relocating headquarters this month. - New capital structure put in place, term loans replaced existing revolver, aligning with strategic plans. - Focus on sales growth, operating efficiency, and improvement in net trade working capital. - Goal of 50 new product launches over next five years to drive $100 million in annualized revenue by 2030. - Plan to have north of $600 million in annualized revenue by end of 2028, aiming for higher EBITDA margins and lower net working capital.

Net sales for the quarter were 124 million, an increase of approximately 7% vs year - ago. Domestic crop business saw sales increase by 17% due to strong demand for herbicide and insecticide products, and specialty business had a 6% growth driven by OHP horticultural products. International businesses had a 7% revenue decline, with Brazil, India affected by timing, but Central America had improved sales. Adjusted EBITDA increased by 245% year - over - year to 10.3 million. Adjusted operating expenses were 26.7% of sales this quarter vs 27.9% in year - ago period. Cash on hand at end of quarter was $71 million vs $12 million prior year. Total debt was $267 million vs $166 million in first quarter of 2025. Net debt was approximately $196 million vs $154 million a year ago. Inventories were $175 million vs $185 million in Q1 last year, a $10 million improvement.

• Continue to expect to generate adjusted EBITDA of $44 million to $48 million in 2026 on sales of $530 million to $550 million. - Expect to be north of $600 million in annualized revenue by end of 2028, with focus on productivity, efficiency, and cost structure to drive higher margins. - Plan to drive net debt down over next two years and ultimately refinance debt when market conditions are favorable.

• Continued challenging market conditions in agricultural sector. - Global geopolitical developments adding uncertainty. - Higher oil, natural gas, and fertilizer prices due to recent events in Middle East, which may impact next year's crop decisions. - Impact of generics on pricing in U.S. market.

Q: Could you separate the price and the volume for the top line growth of 7%?

A: From U.S. crop standpoint, volume was the main driver for the U.S. increase in sales.

Q: Can you bring us up to date on the generic impact and particular crops that triggered 17% increase in U.S.?

A: Generics are prevalent, majority of products have brand reputation, spotty generic pressure on Folex not yet impacting 2026 sales. Impact and Aztec were large products showing increases, hard to tell if due to 2025 performance or market timing.

Q: Corteva is expecting ag market to grow low single digit in 2026. Do you agree?

A: Think ag industry will grow single digits, not negative this year, but geopolitical, commodity prices, weather, pests are factors