Company: AVD
Filing Date: 2025-07-31
Form Type: 10-Q
Source: 0000950170-25-100730
Chunk: 6

Company: AMERICAN VANGUARD CORP
Filing Date: 2025-07-31
Form: 10-Q
Item: Part I, Item 2
Chunk 6
---
The agricultural economy appears to be in the early stages of a recovery. While commodity prices remain at low levels, a combination of factors, including lower inflation, anticipation of lower interest rates, and legislation supportive of growers, has improved sentiment and strengthened demand for crop protection products. Channel inventory levels remain lower than this time last year, but we are seeing dealer inventories move  higher with increasing confidence in market conditions. While uncertainty around tariffs continues to cloud the outlook, global trading partners are forging ahead with their own arrangements, and short- to mid-term demand appears to be stabilizing.   

Against this backdrop, overall sales for the second quarter of 2025 improved 1% compared to the second quarter of 2024. From a regional perspective, our domestic sales increased by 1%, while our international sales were largely unchanged. Our herbicide business was an area of strength with net sales increasing by 48%, as compared to the same period in the prior year, while growth regulator sales were down 37%. Other areas of the business were relatively stable, as compared to the year ago period.  

Efforts by management to operate our factories more efficiently led to lower cost of goods sold, which were down 2%, as compared to the same quarter of 2024. These, together with some raw material cost improvements, led to an improvement of average gross margins to 31% of net sales, as compared to 29% in the same period of 2024. 

Operating expenses declined by 23% as management continued to manage expenses closely and reduced to 28% of net sales in the quarter from 37% in the comparable period of 2024. With a sharp reduction in transformation expenses, operating profit rose to $4,366 for the second quarter of 2025, as compared to a loss of $9,232 for the same period of 2024.

Interest expense slightly increased, as compared to the same quarter of the prior year, yielding a net loss before taxes of $84, as compared to a net loss of $13,274 in the second quarter of 2024. 

The Company recorded an income tax expense of $765, as compared to an income tax benefit of $1,553 in the same period of last year.