AMERICAN VANGUARD CORP
For the period ended Mar 31, 2025. Filed Jun 6, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed Jun 6, 2025
AVD$0.96+1.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-12.
0000950170-24-125626
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-06-06.
0000950170-25-082654
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 81 previous paragraphs and 42 current paragraphs.
9 unchanged; 17 reworded; 16 added; 54 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 9 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (16)
Current report
The forward-looking statements included in this Form 10-Q are made only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law. If we do update one or more forward-looking statements, no inference should be made that we will make additional updates with respect to those or other forward-looking statements.
Current report
A combination of changing, unpredictable and often opposing factors has put the global agricultural market in a static state. While shifting tariffs have created uncertainty as to the strength of export markets, a weak United States dollar and lower corn inventories have relieved pressure and spurred interest in increasing the amount of corn acreage to be planted in 2025. Amidst these conditions, market participants have shown a limited interest in increasing inventories for crop protection products, despite dramatically decreasing inventory levels over the past 24 to 30 months. While distributors will eventually need to increase on-hand inventories to supply their customers’ needs, they are currently adopting conservative working capital practices.
Current report
Within this context, the Company’s overall financial performance during the quarter was weaker than the comparable period last year with net sales down 14% during the quarter. Regionally, domestic and international sales were both down 14%. Much of the variance was due to the voluntarily discontinuance of one of the Company’s high margin herbicide products in the second half of 2024. Soil fumigants in the U.S., and Granular Soil Insecticides in the U.S. and Latin America, as well as non-Crop Insecticides performed better than the comparable period last year.
Current report
Costs of goods sold decreased 8% as compared to the same quarter of 2024. Volume decline was the primary driver behind the decrease of cost of goods sold. Gross margins declined to 26%, as compared to 33% in the same period of the prior year due to a shift in product offering and increased costs per unit as the result of lower volumes.
Current report
Operating expenses were down 5% versus the first quarter of 2024, with selling expenses down significantly, partially offset by increased transformation costs. Expenses for research, product development costs and regulatory expenses declined as a direct result of the decision to terminate the SIMPAS project at the end of 2024. Given the decreased level of sales, operating expenses increased as a percentage of sales to 30%, as compared to 27% in the same period of the prior year.
Current report
Interest expense remained approximately flat, based upon increased average borrowings, offset by a reduction in the effective interest rate.
Current report
Quarter Ended March 31:
Current report
Ourdomestic crop business recorded net sales during the first quarter of 2025 that were 15% lower than those of the first quarter of 2024 ($57,176 vs. $67,257 in the prior year). As previously mentioned, virtually all of the weakness in the U.S. Crop business can be attributed to our herbicide business, which was negatively impacted by the absence from the market of one of our herbicide products that the Company voluntarily cancelled last year. On the other hand, despite the overall weakness in agriculture during the first quarter, our portfolio of biological product sales remained flat, as compared to the same period of the prior year. Finally, included in this result, peanut acreage was up year to date, positively impacting Thimet sales, which rose approximately 17% as compared to last year. As a result of demand and commodity pricing, growers are shifting acreage away from cotton this year and towards peanuts.
Current report
Ourdomestic non-crop business posted a 12% decrease in net sales in the first quarter of 2025, as compared to the same period in the prior year ($15,601 vs. $17,768 in the prior year). In the quarter, while net sales of our fungicides were lower, net sales of biological solutions and granular herbicides improved.
Current report
Net sales of ourinternational businesses decreased by 14% during the period ($43,023 vs. $50,118 in the prior year). The weakness is primarily due to lower herbicide sales in Mexico on lower agave prices, and in our Australian business. The Company is focused on selling more profitable products across our international distribution businesses and is willing to forgo sales of lower margin products in order to maximize margins in the international business. Consequently, average pricing improved in nearly all categories.
Current report
On aconsolidated basis, gross profit for the first quarter of 2025 decreased by 29% ($30,191 vs. $42,418 in the prior year). Decreased sales volume, elevated inventory costs, and competitive pricing all contributed to the decline. Gross margin for the quarter decreased to 26%, as compared to 31% for the same period ended March 31, 2024.
Current report
Other general and administrative expenses slightly decreased by $469 for the three months ended March 31, 2025, as compared to the same period of the prior year. The main driver was a reduction in stock compensation expense reflecting the Company’s current financial performance, partially offset by expenses for extended year-end audit activities.
Current report
Transformation costs related to the Company’s digital and structural transformation project amounted to $2,191, as compared to $1,152 in the prior period. The Company expects that business transformation costs will decline over the balance of 2025, as the Company is in the midst of implementing the plans that had been generated with the help of its management consultant last year.
Current report
During the first three months of 2025, the Company increased net working capital by $18,240, as compared to an increase of $49,996 during the same period of the prior year. Included in this change: inventories increased by $4,721, as compared to an increase of $9,353 for the first quarter of 2024. Customer prepayments decreased by $28,215, as compared to a decrease of $37,037 in the same period of 2024, driven by customer decisions regarding demand, payment timing and our cash incentive programs. Our accounts payable balances increased by $22,966, as compared to an increase of $2,366 in the same period of 2024. Accounts receivable decreased by $6,892, as compared to an increase of $5,579 in the same period of 2024. Prepaid expenses and other assets increased by $856, as compared to an increase of $1,466 in the same period of 2024. Income tax receivable/payable, net increased by $1,885, as compared to a decrease of $1,014 in the prior year. Accrued program costs increased by $837, as compared to an increase of $6,399 in the prior year, as a result of both lower sales and the mix of those sales including products with higher program elements incorporated in pricing. Finally, other payables and accrued expenses decreased by $14,961, as compared to a decrease of $332 in the prior year.
Current report
The Company has long-term debt as of March 31, 2025 and December 31, 2024 relating to a senior credit facility as summarized in the following table:
Current report
It is useful to note that, while classified as long-term debt, funds borrowed by the Company under the Credit Agreement are used for working capital needs on an ongoing basis. The Company has in place a cash sweep mechanism for the domestic business and follows strict controls on repaying outstanding balances promptly in order to minimize the carrying cost of borrowed funds.
Removed paragraphs (54)
Previous report
Persistently low commodity prices and high input cost remain a challenge for the agricultural economy, however the supply chain has started to normalize and the recent decrease in interest rates should help to improve demand. Some pockets of strength have emerged, in areas such as biofertilizers, biostimulants and biochemicals, from which the Company has benefited. Notwithstanding these encouraging indicators, significant inventories of agricultural commodities remain in the supply chain that will need to be worked through before commodity prices can improve, thus a gradual recovery over several quarters is the most likely outcome for the agricultural economy.
Previous report
Against this backdrop, overall sales for the third quarter of 2024 declined 21%, as compared to the third quarter of 2023. Domestic sales were down 33%, while international sales decreased by 4%. Our reported sales performance was negatively impacted by the voluntary product recall of our Dacthal product line, and lower sales of both granular soil insecticide and growth regulator products used on cotton accounted for the bulk of the sales decline. Other insecticide products and green solutions sales were relatively strong compared to the third quarter of 2023, but these areas of strength were not enough to overcome weakness in the previously mentioned categories.
Previous report
The Company recorded a gross profit amounting to 15% of net sales, as compared to 29% in the same period of the prior year. The decline was driven primarily by the effect of the Dacthal recall (which amounted to a total value of $16,191) and generic price pressure on certain products - one key defoliant product in the U.S. crop market and a herbicide in Mexico. Further, the Company recorded additional inventory valuation reserves primarily associated with Dacthal inventories on hand.
Previous report
Operating expenses, increased by 17%, as compared to the third quarter of 2023. Operating costs in the three months ended September 30, 2024 included non-recurring charges in the amount of $8,139, related to the on-going transformation activities.
Previous report
Interest expense increased to $4,378 from $3,384 in the same period of the prior year, due almost entirely to higher interest rates as average debt was approximately flat with the same period last year. The increased interest rate was impacted by the terms of our credit facility agreement, by our overall financial performance and by costs associated with the recent modification.
Previous report
The Company recorded an income tax benefit of $7,024, as compared to an income tax expense of $885 in the same period of last year.
Previous report
These factors yielded a net loss of $25,742, or $(0.91) per share, compared to a loss of $325, or $(0.01) per share, in the prior year. Further details of our financial performance are set forth below.
Previous report
Quarter Ended September 30, 2024 and 2023:
Previous report
Our domestic crop business recorded net sales during the third quarter of 2024 that were 48% lower than those of the third quarter of 2023 ($35,533 as compared to $67,749). The reduction in sales compared to the same quarter of the prior year is driven primarily by the reversal of sales associated with the voluntary product recall of Dacthal, which amounted to $11,783. In addition, in comparison to the same quarter of the prior year, we recorded lower sales of our granular soil insecticide Aztec. That product had not been available in the marketplace in the periods prior to the third quarter of 2023, and industry participants used availability in the third quarter of 2023 to rebuild inventory. In 2024, buying patterns have now normalized. Furthermore, sales or our granular soil insecticide Thimet were down as compared to the year ago period, as demand for this product emerged earlier than normal this year. .
Previous report
Our domestic non-crop business posted a 17% increase in net sales in the third quarter of 2024, as compared to the same period in the prior year ($22,454 as compared to $19,250). Non-crop insecticides and OHP distribution sales were particularly strong during the quarter. OHP benefited from addition of sales from a new distribution agreement, including biologicals products.
Previous report
Net sales in ourinternational business declined by 4% during the period ($60,320 in 2024, as compared to $62,517 in 2023). Our granular soil insecticide business was supply constrained in Asia, where demand exceeded our supply and Brazilian sales were negatively impacted by a weakening currency.
Previous report
On aconsolidated basis, gross profit for the third quarter of 2024 decreased by 60% ($17,293 in the three months ended September 30, 2024, as compared to $43,084 in 2023). During the three months ended September 30, 2024, the Company commenced a product recall arising from our voluntary cancellation of Dacthal registrations. The Company recorded charges associated with the product recall from distribution, retail and growers and has recorded a liability in the amount of $16,191. The overall gross margin percentage ended at 15%, including the impact of the product recall, as compared to 29% in the second quarter of the prior year.
Previous report
Operating expenses, including transformation costs, increased by 17% to $45,681, as compared to $38,893 in the same period of the prior year. Including in this increase, the Company incurred expenses in the amount of $8,139 related to on-going transformation activities. There were no comparable costs in the same period of the prior year. The changes in operating expenses by department are as follows:
Previous report
Other general and administrative expenses decreased by $849 for the three months ended September 30, 2024, as compared to the same period of 2023, primarily driven by reductions in costs associated with stock compensation.
Previous report
Legal reserves are contingencies related to certain labor and employment matters. This matter was settled during the third quarter and the adjustment of $780 is to adjust the reserve amount to the agreed settlement.
Previous report
Transformation costs related to the Company’s digital and structural transformation project amounted to $8,139. The digital transformation effort is intended to ensure that business process owners have access to current and complete data that has been generated through standardized systems and processes. The structural transformation effort is intended to improve operating leverage by applying business analytics to current operations, structures, products and services and identifying process improvements. The Company has engaged a third-party consulting firm to assist it in navigating the project to gain the maximum benefit at the earliest possible time. Severance costs relating to the Company’s former CEO, which were incurred in connection with the staffing and execution of the Company’s transformation initiatives, are included in the transformation costs.
Previous report
On April 1, 2020, the Company made a strategic investment in Clean Seed Inc., in the amount of $1,190. The Company did not record a fair value adjustment for the three-month period ended September 30, 20204. During the same period of the prior year, the Company and recorded negative fair value adjustments in the amount of $247 during the three months ended September 30, 2023.
Previous report
The Company’s average overall debt for the three-month period ended September 30, 2024 was $209,840, as compared to $200,247 for the same period of the prior year. Our borrowings increased primarily as a result of higher inventory levels. As can be seen from the table, the effective bank interest rate on our revolving line of credit was 8.1% and 7.1% for the three-month periods ended September 30, 2024 and 2023, respectively.
Previous report
We generated a loss before provision for income taxes of $32,766 and income $560 for the three months ended September 30, 2024 and 2023, respectively. Our net loss (after income taxes) for the three-month period ended September 30, 2024, was $25,742 or ($0.91) per basic and diluted share, as compared to $325 or ($.01) per basic and diluted share in the same quarter of 2023.
Previous report
RESULTS OF OPERATIONS
Previous report
Nine Months Ended September 30, 2024 and 2023:
Previous report
Overview of the Company’s Performance
Previous report
Agricultural commodity prices steadily trended lower in the first nine months of 2024. The pace of the downtrend slowed during the third quarter, leaving prices near a two-year low. Corn and soybean prices have been particularly weak, with corn prices down more than 10% and soybean prices down more than 20% year to date, wheat prices have fared somewhat better but are still down approximately 5% year to date. These factors have led to procurement practices remaining conservative, despite a recent easing in interest rates.
Previous report
On a consolidated basis, sales were down 6% over the first nine months of the year, compared to the first nine months of 2023. Domestic sales were down 9%, while international sales were down 2%. Our reported sales performance was impacted by the voluntary product recall of our Dacthal product line, and by granular soil insecticides and plant growth regulators in the U.S. and by a herbicide in Mexico.
Previous report
The Company generated a gross profit margin of 26% in the first nine months of the year, as compared to 31% during the same period of last year. Included in this performance, during the first nine months of 2024, the Company voluntarily recalled all Dacthal product globally, and recorded $16,191 in liabilities as a result.
Previous report
Operating expenses increased by 14%, as compared to the same period of 2023. Operating costs in the three months ended September 30, 2024 included non-recurring charges in the amount of $16,636, related to the on-going transformation activities.
Previous report
Interest expense increased to $11,988 as compared to $8,282 in the first nine months of 2023, due to higher interest rates.
Previous report
The Company's income tax benefit during the nine months ended September 30, 2024 was $7,093, as compared to an expense of $2,066 during the similar period of 2023.
Previous report
Nine months ended September 30, 2024, and 2023
Previous report
Our domestic crop business experienced a 17% decrease in net sales for the first nine months of the year (to $155,075 versus $185,823). This included the impact of the voluntary recall of our Dacthal product, and lower granular soil insecticides including our Aztec product which experienced higher sales in the first nine months of 2023, as the market restocked after a period of supply difficulties.
Previous report
Ourdomestic non-crop business recorded a 18% increase in net sales for the first nine months of the year (to $59,241 from $50,041). OHP recorded sales up 30% as a result of newly implemented distribution agreement, and a surge in demand for biological products. In addition, our non-crop segment performed well as a result of weather and pest pressure in the south-east following storm activity in the south-eastern U.S.
Previous report
Net sales of ourinternational businesses were slightly weaker than the first nine months of 2023 down 2% ($167,343 versus $171,327 in 2023). Two products, Mocap, a granular soil insecticide, and Assure II, a herbicide, account for virtually all of the weakness in international business. Weakness in Mocap can be attributed to a lack of inventory to service customer demand, while Assure II sales were pressured by generic competition.
Previous report
On a consolidated basis, gross profit for the nine months of 2024 ended at $97,474, as compared to $124,529 for the same period of 2023. During the period, the Company assessed the liability associated with the global voluntary cancellation of the Dacthal registrations and has recorded a liability in the amount of $16,191. In addition, as noted above, the Company recorded lower sales in both the domestic and international crop businesses.
Previous report
Gross margin performance in 2024 decreased to 26%, as compared to 31% during the same period of the prior year.
Previous report
Selling expenses decreased by $2,266 to end at $39,022 for the nine-month period ended September 30, 2024, as compared to the same period of 2023. The main drivers were decreased employee and associated travel costs and reduced advertising and marketing spending.
Previous report
Other general and administrative expenses increased by $2,545 to end at $36,660 for the nine-month period ended September 30, 2024, as compared to the same period of 2023. The main drivers were additional audit and tax advisory services, increased other outside services, increased potential credit losses and changes in transactional foreign exchange gains/losses.
Previous report
During the nine-months ended September 30, 2023, the Company spent $541 in fees associated with Proxy activities. There were no similar expenses during the same nine-month period this year.
Previous report
Amortization increased slightly during the nine months ended September 30, 2024, as compared to the same period of the prior year, resulting from the addition of intangible assets in connection with the Punto Verde acquisition, largely offset by completely amortized assets.
Previous report
Legal reserves represent the expected settlement related to certain labor and employment matters.
Previous report
Transformation costs related to the Company’s digital and structural transformation project amounted to $16,636. The digital transformation effort is intended to ensure that business process owners have access to current and complete data that has been generated through standardized systems and processes. The structural transformation effort is intended to improve operating leverage by applying business analytics to current operations, structures, products and services and identifying process improvements. The Company has engaged a third-party consulting firm to assist it in navigating the project to gain the maximum benefit at the earliest possible time. Severance costs relating to the Company’s former CEO, which were incurred in connection with the staffing and execution of the Company’s transformation initiatives, are included in the transformation costs.
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Reworded paragraphs (17)
Previous wording
The Company, from time-to-time, may discuss forward-looking statements including assumptions concerning the Company’s operations, future results and prospects. These forward-looking statements are based on current expectations and are subject to a number of risks, uncertainties and other factors. In connection with the Private Securities Litigation Reform Act of 1995, the Company provides the following cautionary statements identifying important factors which, among other things, could cause the actual results and events to differ materially from those set forth in or implied by the forward-looking statements and related assumptions contained in the entire Annual Report. Such factors include, but are not limited to: product demand and market acceptance risks; the effect of economic conditions; weather conditions; changes in regulatory policy; the impact of competitive products and pricing; changes in foreign exchange rates; product development and commercialization difficulties; capacity and supply constraints or difficulties; transformation initiatives and related expenses; availability of capital resources; general business regulations, including taxes and other risks as detailed from time-to-time in the Company’s reports and filings filed with the U.S. Securities and Exchange Commission (the “SEC”). It is not possible to foresee or identify all such factors. For more detailed information, refer to Item 3, Quantitative and Qualitative Disclosures about Market Risk, and Part II, Item 1A., Risk Factors, in this Quarterly Report on Form 10-Q.
Current wording
The Company, from time-to-time, may discuss forward-looking statements including assumptions concerning the Company’s operations, future results and prospects. Generally, “may,” “could,” “will,” “would,” “expect,” “believe,” “estimate,” “anticipate,” “intend,” “continue” and similar words identify forward-looking statements. Forward-looking statements appearing in this report are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on our current expectations and are subject to risks and uncertainties that can cause actual results and events to differ materially from those set forth in or implied by the forward-looking statements and related assumptions contained in the entire report. Such factors include, but are not limited to: product demand and market acceptance risks; the effect of economic conditions; weather conditions; changes in regulatory policy; the impact of competitive products and pricing; changes in foreign exchange rates; product development and commercialization difficulties; capacity and supply constraints or difficulties; availability of capital resources given that interest rate and inflation affect the debt market; the impact of, and our ability to, remediate the identified material weaknesses in our internal controls over financial reporting; and general business regulations, including taxes and other risks as detailed from time-to-time in the Company’s reports and filings filed with the U.S. Security and Exchange Commission (“SEC”). It is not possible to foresee or identify all such factors. We urge you to consider these factors carefully in evaluating the forward-looking statements contained in this report. You should evaluate all forward-looking statements made in this Form 10-Q in the context of the risks and uncertainties disclosed in Part II, Item 1A of this Form 10-Q under the heading "Risk Factors," in Part I, Item 2 "Management's Discussion and Analysis of Financial Condition and Results of Operations," and in Item 3 "Quantitative and Qualitative Disclosures About Market Risk."
Previous wording
Three Months Ended September 30, 2024 and 2023:
Current wording
The Company recorded an income tax expense of $387 compared to $1,484 in the same period of last year. The decrease in the income tax expense compared to the same period last year is primarily attributed to losses incurred in the U.S. for the three months ended March 31, 2025, which did not result in a benefit for income tax. The U.S. entities maintain a valuation allowance against their net deferred tax assets which was established during the fourth quarter ended December 31, 2024. The Company generated a net loss of $8,462 (or ($0.30) per share) compared to net income of $1,552 (or $0.06 per share) in the prior year.
Previous wording
Operating expenses increased by $15,686 to $129,003 for the nine-month period ended September 30, 2024, as compared to the same period in 2023. The changes in operating expenses by department are as follows:
Current wording
Operating expenses decreased by 5% to $34,501 for the three months ended March 31, 2025, as compared to the same period in 2024. The change in operating expenses by department are as follows:
Previous wording
Selling expenses decreased by $1,977 for the three months ended September 30, 2024, as compared with the same period of the prior year. This included decreased costs associated with employee wages and travel and reduced advertising and marketing spending.
Current wording
Selling expenses decreased by $2,158 for the three months ended March 31, 2025, as compared with the same period of the prior year. This included reductions in domestic wages and salaries following actions taken in 2024 to reduce headcount across the global business, associated reductions in travel expenses and lower advertising and marketing costs as certain promotional activities have been pushed to later in the year.
Previous wording
Amortization increased slightly during the three months ended September 30, 2024, as compared to the same period of the prior year, resulting from the addition of intangible assets in connection with the acquisition of Punto Verde.
Current wording
Amortization declined slightly during the first three months of 2025, as compared to the same period of the prior year as a result of a lower book value of intangible assets.
Previous wording
Research, product development costs and regulatory expenses increased by $2,097 for the three months ended September 30, 2024, as compared to the same period of 2023. The main drivers were increase in costs associated with regulatory and product development studies.
Current wording
Research, product development costs and regulatory expenses remained flat for the three months ended March 31, 2025, as compared to the same period of the prior year.
Previous wording
Interest costs net of capitalized interest were $11,988 in the first nine-month period of 2024, as compared to $8,282 in the same period of 2023. Interest costs are summarized in the following table:
Current wording
Interest costs net of capitalized interest were $3,765 in the first three months of 2025, as compared to $3,693 in the same period of 2024. Interest costs are summarized in the following table:
Previous wording
The Company’s average overall debt for the nine-month period ended September 30, 2024, was $200,187, as compared to $149,009 for the same period of the prior year. Our borrowings increased as a result of higher inventory levels. As can be seen from the table above, our effective bank interest rate on our revolving line of credit was 8.0% for the nine months ended September 30, 2024, as compared to 7.0% in 2023.
Current wording
The Company’s average overall debt for the three months ended March 31, 2025 was $183,918, as compared to $176,344 for the three months ended March 31, 2024. Our borrowings in the three months ended March 31, 2025 were higher when compared to the same period of the prior year, mainly as a result of expenses incurred during the balance of 2024 pertaining to transformation and other initiatives. As can be seen from the table above, while our borrowings were higher than this time last year, our effective bank interest rate on our revolving line of credit reduced to 7.7% for the three months ended March 31, 2025, as compared to 8.3% in 2024. This resulted in interest expense that was essentially flat period over period.
Previous wording
Income tax benefit was $7,023 for the three months ended September 30, 2024, as compared to an income tax expense of $885 for the three months ended September 30, 2023. The effective income tax rate for the three months ended September 30, 2024, was computed based on the actual effective tax rate for the year-to-date period ended September 30, 2024 which is approximately 4.3%, excluding discrete items and entities subject to full valuation allowances against related net deferred tax assets. The Company’s subsidiaries in Brazil incurred losses during the period. These losses did not result in any tax benefits as the Brazilian subsidiaries maintain full valuation allowances against their net deferred tax assets. With the inclusion of discrete items and entities subject to full valuation allowances against related net deferred tax assets, the Company’s overall effective tax rate for the third quarter was 21.4%. During the three months ended September 30, 2024, the Company gained a tax benefit from transformation costs incurred as part of evaluating the current business structure, which resulted in a decrease in the effective tax rate. Additionally, refer to the table below for details comprising the income tax benefit of $7,024 and the overall effective tax rate of 21.4% for the three months ended September 30, 2024.
Current wording
Income tax expense was $387 for the three months ended March 31, 2025, as compared to $1,484 for the three-months ended March 31, 2024. The effective income tax rate for the three months ended March 31, 2025 was computed based on the estimated effective tax rate for the full year which is approximately 26.6%, excluding discrete items and entities subject to full valuation allowances against related net deferred tax assets. During the fourth quarter ended December 31, 2024, the Company established a valuation allowance against the U.S. entities net deferred tax assets. The company continues to maintain valuation allowances established against the net deferred tax assets of certain international entities, primarily in Brazil, for the three months ended March 31, 2025. During the first three months ended March 31, 2025, many of the Company’s international businesses outside of Brazil were profitable. For the three months ended March 31, 2025 the Company recorded an income tax expense mainly attributed to a loss before provision for income taxes incurred in the U.S. which did not result in a benefit for income tax. The U.S. entities maintain a valuation allowance against their net deferred tax assets which was established during the fourth quarter ended December 31, 2024.
Previous wording
The Company recorded a net loss of $35,911 or ($1.28) per basic and diluted share, as compared to net income of $540 or $0.02 per basic and diluted share in the first nine months of the prior year.
Current wording
Our overall net loss for the first three months of 2025 was $8,462 or $0.30 per basic and diluted share, as compared to net income of $1,552 or $0.06 per basic and diluted share in the first quarter of 2024.
Previous wording
The Company’s operating activities utilized net cash of $29,402 during the nine-month period ended September 30, 2024, as compared to $145,854 during the nine months ended September 30, 2023. Included in the $29,402 are a net loss of $35,911, plus non-cash depreciation, amortization of intangibles and other assets and discounted future liabilities, in the amount of $17,143, and provision for bad debts in the amount of $1,278, change in deferred income taxes of $9,110 and changes in liabilities for uncertain tax positions or unrecognized tax benefits of $106. Also included are stock-based compensation of $3,887, change in fair value of an equity investment of $513, and net foreign currency adjustments of $121. These together provided net cash outflows of $22,889, as compared to a net cash inflows $23,793 for the same period of 2023.
Current wording
The Company used cash of $20,576 in operating activities during the three months ended March 31, 2025, as compared to $36,107 during the three months ended March 31, 2024. Included in the $20,576 are net loss of $8,462, plus non-cash depreciation, amortization of intangibles and other assets in the amount of $4,749, provision for bad debts in the amount of $1,056 and other in the amount of $126. Also included are stock-based compensation of $559, a net change in deferred income taxes of $1,348, and net change in foreign currency adjustment of $99. These together provided net cash outflows of $633, as compared to an inflows of $7,881 for the same period of 2024.
Previous wording
Accrued program costs are recorded in line with the growing season upon which specific products are targeted. Typically crop products have a growing season that ends on September 30 thof each year. During the first nine months of 2024, the Company made accruals for programs in the amount of $55,455 and payments in the amount of $37,866, resulting in a net increase in accrued program costs of $17,721. During the first nine months of the prior year, the Company made accruals in the amount of $62,248 and made payments in the amount of $32,469, resulting in a net increase of accrued program costs of $29,779.
Current wording
With regard to our program accrual, the increase (as noted above) primarily reflects our level and mix of sales and customers in the first quarter of 2025, as compared to the prior year. The Company accrues programs in line with the growing season upon which specific products are targeted. Typically crop products have a growing season that ends on September 30 thof each year. During the first quarter of 2025, the Company made accruals for programs in the amount of $20,091 and made payments in the amount of $19,221. During the first quarter of the prior year, the Company made accruals in the amount of $25,266 and made payments in the amount of $18,999.
Previous wording
Cash used for investing activities for the nine-month period ended September 30, 2024, and 2023 was $6,828 and $9,148, respectively. In 2024, the Company spent $6,106 on purchases of fixed assets primarily focused on continuing to invest in manufacturing infrastructure, as compared to $8,589 for the same period of prior year. The Company made a payment of $788 for a product acquisition for the nine-month period ended September 30, 2024, as compared to $759 for the same period in prior year. In addition, the Company received proceeds from disposal of property, plant and equipment in the amount of $66, as compared to $200 in the prior year.
Current wording
Cash used for investing activities was $446 for the three months ended March 31, 2025, as compared to $3,567 for the three months ended March 31, 2024. The Company spent $431 on fixed assets acquisitions primarily focused on continuing to invest in manufacturing infrastructure.
Previous wording
During the nine months ended September 30, 2024, financing activities provided $36,824, as compared to $146,680 during the same period of the prior year. Net borrowings under the Credit Agreement amounted to $39,849 during the nine-month period ended September 30, 2023, as compared to $165,700 in the same period of the prior year. The Company paid dividends to stockholders amounting to $2,510 during the nine months ended September 30, 2024, as compared to $2,550 in the same period of 2023. During the nine-month period ended September 30, 2023, the Company paid $15,539 for the repurchase of 885,290 shares of its common stock. The Company did not repurchase shares during the nine-month period ending September 30, 2024. The Company received $901 for the issuance of ESPP shares and exercise of stock options for the nine months ended September 30, 2024, as compared to $980 for the same period in prior year. Lastly, in exchange for shares of common stock returned by employees, the Company paid $1,416 and $1,957 for tax withholding on stock-based compensation awards during the nine months ended September 30, 2024 and 2023, respectively.
Current wording
During the three months ended March 31, 2025, financing activities provided $19,801, as compared to $41,382 during the same period of the prior year. Net borrowings under the Credit Agreement amounted to $20,167 in the first quarter of 2025, as compared to $41,800 in the same period of the prior year. Lastly, in exchange for shares of common stock returned by employees, we paid $11 and $14 for tax withholding on stock-based compensation awards during the three months ended March 31, 2025 and 2024, respectively.
Previous wording
At September 30, 2024, according to the terms of the Credit Agreement, as amended, and based on our performance against the most restrictive covenant listed above, the Company had the capacity to increase its borrowings by up to $44,716, compared to
Current wording
As of March 31, 2025, the Company was deemed to be in compliance with its financial covenants. Based on its performance against the most restrictive covenant of the Credit Agreement with its lenders, the Company had the capacity to increase its borrowings by up to $53,717. This compares to an available borrowing capacity of $28,623 as of December 31, 2024.
Previous wording
Please refer to Note 13 in the accompanying notes to the condensed consolidated financial statements for recently issued accounting standards.
Current wording
Please refer to Note 1 in the accompanying Notes to the Condensed Consolidated Financial Statements for recently issued and adopted accounting standards.
Previous wording
The Company continually re-assesses the critical accounting policies used in preparing its financial statements. In the Company’s Form 10-K filed with the SEC for the year ended December 31, 2023, the Company provided a comprehensive statement of critical accounting policies. These policies have been reviewed in detail as part of the preparation work for this Form 10-Q. After our review of these matters, we have determined that, during the subject reporting period, except to the extent stated below, there has been no material change to the critical accounting policies that are listed in the Company’s Form 10-K for the year ended December 31, 2023.
Current wording
The Company continually re-assesses the critical accounting policies used in preparing its financial statements. In the Company’s Form 10-K filed with the SEC for the year ended December 31, 2024, the Company provided a comprehensive statement of critical accounting policies. These policies have been reviewed in detail as part of the preparation work for this Form 10-Q. After our review of these matters, we have determined that, during the subject reporting period there has been no material change to the critical accounting policies that are listed in the Company’s Form 10-K for the year ended December 31, 2024.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Interest costs net of capitalized interest were $4,378 and $3,384 during the three-month period ended September 30, 2024 and 2023, respectively. Interest costs are summarized in the following table: