With regard to our financial performance for the three months ended September 30th, 2020, the Company's net sales decreased by 6% to $117 million as compared to sales of $125 million this time last year.
Within that overall decline, our US sales were down about $7.5 million and our international sales were flat.
International sales accounted for 43% of net -- of total net sales as compared to 41% of net sales this time last year.
In our US crop market, sales were affected by reduced cotton acres, which according to USDA statistics, are down about 11% or 1.5 million acres in 2020.
As a result of these various dynamics, gross margin performance in the quarter reduced from 38% to 37% and for the nine-month period from 39% to 38%.
Generally speaking, over the long term our net factory costs amount to about 2.5% of net sales, reflecting some latent capacity in our plants should the need arise.
In the third quarter our factories cost approximately 2.4% of sales as compared to 2% this time last year.
For the first nine months, the net factory costs amounted to 1.6% as compared to 2.4% of net sales for the same period of 2019.
On the other hand, we did record a benefit of approximately $1 million during the third quarter because we completed an update to our environmental risk assessment related to the Brazilian business we acquired at the start of 2019 which led to a decrease in our liability in this regard.
The reported reduction actually understates the real improvement because in 2019 we benefited from adjustments to earn out liabilities related to past acquisitions in the amount of $3.5 million that did not recur this year.
As a result, our underlying costs are down approximately $5.5 million or 5% for the nine months.
If we had used the 2019 exchange rates for both the three and nine-month periods of 2020, our reported net sales would have increased for the three months by $3 million and for the nine months by $7 million.
When looking at gross margin, we would have recorded additional gross margin of $700,000 in the three-month period and $1.7 million year-to-date.
In the three-month period, we earned $0.10 per share as compared to $0.11 per share in the same period of the prior year.
For the nine-month period, we earned $0.25 per diluted share as compared to $0.34 per share last year.
At the end of September 2020, our inventories were at $176 million as compared to $186 million this time last year.
The underlying period-over-period improvement in our base inventory before the impact of recent acquisitions amounted to approximately $14 million or 7.5%.
In previous conference calls, we expected to end in the region of $145 million.
In addition, the new acquisitions that Eric will mention in a moment are expected to add approximately $15 million at December 31st, 2020.
Accordingly, our latest forecast is to end the year at approximately $160 million to $165 million, effectively flat with 2019, but including the addition of inventory from recent acquisitions.
During the period of the year when we typically expand working capital, we have contained the increase to only $5 million as compared to adding $49 million in the same period of 2019.
In the first nine months of 2020 we have generated $19 million from operations as compared to using $21 million in the first nine months of 2019.
Comparatively that amounts to a positive change of $40 million period-over-period.
At September 30th, 2020 net indebtedness ended at $149 million as compared to $165 million this time last year.
During the last year, in addition to paying down $16 million in debt, we have funded more than $27 million in investments, including fixed assets, product acquisitions and technology investments from the cash generated from operations.
With regard to liquidity at the end of the third quarter, availability under our credit line was $45 million, which compares to $30 million at the same point in 2019.
Using 2019 numbers as a reference, let's build a model using a baseline of annual sales of $468 million.
If we were to grow at a rate of only 2% per year, we should be at $507 million by year three and $527 million by year five in organic growth.
As these new products get traction and we continue adding new introductions, we expect that we will add another $37 million by year three and $109 million by year five.
The core business plus new pipeline products puts us at $544 million by year three and $636 million by year five.
If out of conservatism, we cut that number in half to $20 million per year and extrapolate it forward, we find that our incremental acquisition growth that put us at $60 million by year three and $100 million by year five.
The core business plus new product pipeline acquisitions puts us at a three-year top line target of $604 million and a five-year target of $736 million.
Through the end of the third quarter of 2020, we had already been on track to sell approximately $22 million in green products this year, including biologicals, bio-nutritional products through both our domestic and international businesses and essential oil products through Envance which are the active ingredients in Procter & Gamble's Zevo line of consumer products.
We expect that with the addition of Agrinos, the growth of our other biologicals and the expansion of Envance/TyraTech we should see incremental revenues in year three of $48 million and in year five of $118 million.
That would take us to about $70 million in year three and $140 million in year five.
Using conservative estimates of market penetration and domestic markets only, we are targeting top line contribution on the order of $35 million in year three and $131 million in year five.
If we add Core plus Green plus SIMPAS we are in the neighborhood of $687 million in year three and $985 million in year five at the top line which is roughly double where we are today.

Summary:
With regard to our financial performance for the three months ended September 30th, 2020, the Company's net sales decreased by 6% to $117 million as compared to sales of $125 million this time last year.
In the three-month period, we earned $0.10 per share as compared to $0.11 per share in the same period of the prior year.