AMERICAN VANGUARD CORP
For the period ended Jun 30, 2025. Filed Jul 31, 2025.
View on SEC.govAbout this filing
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.
Jun 30, 2025 · Filed Jul 31, 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 2025-03-31; filed 2025-06-06.
0000950170-25-082654
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-07-31.
0000950170-25-100730
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 42 previous paragraphs and 71 current paragraphs.
12 unchanged; 14 reworded; 41 added; 16 removed; 0 previous and 4 current paragraphs rearranged.
Tables are not compared: 4 previous and 7 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 (41)
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
These factors yielded a net loss of $849, or $(0.03) per share, as compared to $11,721, or $(0.42) per share, in the prior year quarter.
Current report
Ourdomestic crop business recorded net sales during the second quarter of 2025 that were 1% higher than those of the second quarter of 2024 ($52,674, as compared to $52,289). Herbicide sales were driven by increased corn acres and the launch of a new product, which is capturing share from generic competitors. Soil fumigant sales were also an area of strength, up approximately 50%. Partially, offsetting these gains, sales of our growth regulators declined due to generic competition.
Current report
Ourdomestic non-crop business posted a 3% increase in net sales in the second quarter of 2025, as compared to the same period in the prior year ($19,585 in 2025 v. $19,011 in 2024). Delayed weed pressure negatively impacted non-crop herbicide products, but overall this business continues to grow faster than the overall portfolio.
Current report
Net sales of ourinternational businesses were slightly higher ($57,054 in 2025, as compared to $56,909 in 2024). This increase was led by sales in our Central American business, which rose by 7%, driven by strength in our banana products. Partially offsetting these gains, sales in Australia (a much smaller business) were down approximately 40% due to drought conditions.
Current report
On aconsolidated basis, gross profit for the second quarter of 2025 increased by 7% ($40,547 in 2025, as compared to $37,763 in 2024). The overall gross margin percentage ended at 31% in the second quarter of 2025, as compared to 29% in the second quarter of the prior year.
Current report
Selling expenses decreased by $1,768 for the three months ended June 30, 2025, as compared with the same period of the prior year. This was mainly associated with reduced headcount across our global sales and marketing teams, as we implement new organization structures intended to drive a more customer focused team. We also experienced reduced marketing expenses.
Current report
Other general and administrative expenses increased by 12%, primarily associated with incentive compensation as a result of improved financial performance, offset by reduced headcount costs.
Current report
In the three months ended June 30, 2025, the Company reserved an immaterial amount for a minor product complaint. In the comparable period of the prior year, the Company recorded a larger legal contingency related to certain labor and employment matters. The two matters are unrelated.
Current report
As part of the Company’s actions to focus on key products, the Company made the decision to discontinue selling one small volume product and wrote off the remaining intangible asset book value in the amount of $134 as of June 30, 2025.
Current report
Transformation costs related to the Company’s digital and structural transformation project reduced dramatically, as expected and ended at $1,621, as compared to $7,345 in the same period of the prior year. The Company expects that these costs will continue at lower levels than recorded last year.
Current report
Six Months Ended June 30, 2025 and 2024:
Current report
Overview of the Company’s Performance
Current report
Distributor destocking negatively impacted first-half 2025 results, as compared to the year ago period. This phenomenon was particularly strong during the first quarter but trailed off as the second quarter progressed. Nevertheless, the early first-half conditions negatively impacted sales and gross profit for the six-month period taken as a whole. Agricultural commodities trended higher during the first few months of the year but were unable to maintain their gains as the first half year progressed. Corn prices finished the first six months slightly lower than at the start of the year, while soybean prices were flat.
Current report
On a consolidated basis, domestic sales were down 7% and international sales were down 6%, as compared to the same period of last year Overall net sales decreased by 7% ($245,113 in 2025, as compared to $263,352 in 2024) largely driven by channel destocking. Cost of goods sold decreased by 5% on an absolute basis due to lower volumes. In spite of improved factory performance, these factors, taken together, yielded a gross profit that was lower than the same period of 2024 ($71,106, as compared to $80,181) and the average gross margin percentage declined slightly to 29% from 30% in the first half of 2024.
Current report
During the first half of 2025, operating expenses declined by about 18% as compared to the first half of 2024, and operating expenses as a percent of sales decreased to 28%, as compared to 32% for the same period prior year. Transformation costs for the period dropped significantly.
Current report
Overall, the business recorded an operating income of $56 for the first half of the year, as compared to an operating loss of $3,141 during the first half of 2024.
Current report
The Company incurred an income tax expense of $1,152 during the six-month period, as compared to an income tax benefit of $69 during the first half of 2024, yielded a net loss for the period of $9,311, as compared to $10,169 for the same period of the prior year, and a loss per share of $0.33, as compared to $0.36, as compared to the first half of last year.
Current report
RESULTS OF OPERATIONS
Current report
Ourdomestic crop business recorded net sales that were 8% lower than those of first half of 2024 ($110,201 as compared to $119,542 in 2024). Weakness in the first half sales, as compared to the year ago period, can be attributed to not having revenue from a product that was previously recalled; further cotton acreage was down substantially leading to weakness in products with exposure to this crop. Broadly, channel destocking in the early portion of 2025 continued to negatively impacted overall results.
Current report
Ourdomestic non-crop business recorded a 5% decrease in net sales for the first half of the year (to $34,834 from $36,787). Fungicide and pest strip sales were weak during the first half of 2024. Also, a delayed weed season led to weakness, as compared to the first half of 2024.
Current report
Net sales of ourinternational businesses were down 6% as compared to the first half of 2024 ($100,078 versus $107,023 in 2024). Australian sales were weaker due to the ongoing drought, which were partially offset by strength in granular soil insecticides. Herbicide sales were off nearly 20% in the first half of the year, due to a weak agave season and a change in product mix.
Current report
On a consolidated basis, gross profit for the six months of 2025 decreased ending at $70,738, as compared to $80,181 last year. Gross margin performance in 2025 decreased to 29% from 30% compared to the first half of 2025.
Current report
Selling expenses decreased by $3,925 to end at $22,356 for the six-month period ended June 30, 2025, as compared to the same period of 2024. The main drivers were reduced global headcount following our organizational redesign and tighter control of marketing and other third-party services.
Current report
Other general and administrative expenses increased by $1,049 to end at $26,764 for the six-month period ended June 30, 2025, as compared to the same period of 2024. The main driver was primarily associated with incentive compensation as a result of improved financial performance, offset by reduced headcount costs.
Current report
Amortization declined slightly during the six months ended June 30, 2025, as compared to the same period of the prior year, as the result of impaired and fully amortized assets.
Current report
In the six months ended June 30, 2025, the Company reserved an immaterial amount for a minor product complaint. In the comparable period of the prior year, the Company recorded a larger legal contingency related to certain labor and employment matters. The two matters are unrelated.
Current report
As part of the Company’s actions to focus on key products, the Company made the decision to discontinue selling one small volume product and wrote off the remaining intangible asset book value in the amount of $134 as of June 30, 2025.
Current report
Research, product development costs and regulatory expenses decreased by $2,820 to end at $11,485 for the six-month period ended June 30, 2025, as compared to the same period of 2024. The cost reduction was primarily driven by lower spending associated with the decision to stop our investment in the SIMPAS delivery system.
Current report
Transformation costs related to the Company’s digital and structural transformation project amounted to $3,812 for the first six months of 2025, as compared to $8,497 for the prior year. 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 expects significantly lower such costs over the balance of 2025.
Current report
Average Indebtedness and Interest expense
Current report
The Company’s average overall debt for the six-month period ended June 30, 2025, was $179,710, as compared to $195,375 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 8.5% for the six months ended June 30, 2025, as compared to 7.9% in 2024.
Current report
We incurred a loss before provision before income taxes of $8,159 for the six months ended June 30, 2025, as compared to a loss before taxes of $10,238 for the six months ended June 30, 2024. Our net loss, after income taxes, for the six-month period ended June 30, 2025 was $9,311 or $0.33 per basic and diluted share, as compared to $10,169 or $0.036 per basic and per diluted share in the same period of 2024.
Current report
During the six-month period of 2025, the Company increased working capital by $21,381, as compared to an increase of $49,375 during the same period of the prior year. Included in this change: inventories increased by $9,785, as compared to $27,770 for the same period of 2024. While increases in inventories are normal for the Company’s annual cycle, the Company has seen distinct changes in buying patterns across its global markets as customers are pushing back purchase close to time of use as they manage working capital and interest expense. In response the Company has focused on holding inventory levels down including holding down manufacturing output.
Current report
Customer prepayments decreased by $46,187, as compared to $53,468 in the same period of 2024, driven by customer decisions regarding the amount of prepayments they made during the final quarter of 2024, and by purchase orders received from those customers during the first two quarters and the product mix and payment terms on those purchase orders. Our accounts payable balances increased by $24,547, as compared to $34,292 in the same period of 2024, reflecting both the timing and terms of the related purchase orders. Accounts receivables increased by $3,293, as compared to a decrease of $11,962 in the same period of 2024. Prepaid expenses increased by $1,863, as compared to $3,730 in the same period of 2024. Income tax receivable changed by $1,024 as compared to $7,129 in the prior year. Accrued programs increased by $10,267, as compared to $18,209 in the prior year, driven by changes in mix of sales (products attract different program arrangements) and lower sales in our US Crop business (which is the main driver from programs). Finally, other payables and accrued expenses decreased by $15,073, as compared to an increase of $1,665 in the prior year.
Showing the first 40 of 41 passages. Open the source sections for the rest.
Removed paragraphs (16)
Previous 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.
Previous 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.
Previous 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.
Previous 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.
Previous report
Interest expense remained approximately flat, based upon increased average borrowings, offset by a reduction in the effective interest rate.
Previous report
Quarter Ended March 31:
Previous 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.
Previous 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.
Previous 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.
Previous 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.
Previous report
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 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.
Previous 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.
Previous 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.
Previous 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:
Previous 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.
Reworded paragraphs (14)
Previous 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.
Current wording
Three Months Ended June 30, 2025 and 2024:
Previous 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:
Current wording
Operating expenses decreased by $10,814 to $36,181 for the three-month period ended June 30, 2025, as compared to the same period in 2024. The changes in operating expenses by department are as follows:
Previous 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.
Current wording
Amortization declined slightly during the three months ended June 30, 2025, as compared to the same period of the prior year, as the result of impaired and fully amortized assets.
Previous 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.
Current wording
Research, product development costs and regulatory expenses decreased by $2,795 for the three months ended June 30, 2025, as compared to the same period of 2024. This is primarily driven by the decision to stop investing in the SIMPAS delivery system.
Previous 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.
Current wording
The Company’s average overall debt for the three-month period ended June 30, 2025 was $196,703, as compared to $214,107 for the same period of the prior year. Our borrowings are higher as the result of expenses incurred during the balance of 2024, pertaining to one-time expenses. As can be seen from the table, the effective bank interest rate on our revolving line of credit was 8.4% and 7.5% for the three-month periods ended June 30, 2025 and 2024, respectively.
Previous 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.
Current wording
Income tax expense was $765 for the three months ended June 30, 2025, as compared to an income tax benefit of $1,553 for the three months ended June 30, 2024. The effective income tax rate for the three months ended June 30, 2025, was computed based on the estimated effective tax rate for the full year which is approximately 28%, 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 the U.S. and certain international entities, primarily in Brail, for the three months ended June 30, 2025. During the three months ended June 30, 2025, several of the Company's international business outside of Brazil were profitable resulting in an income tax expense.
Previous 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.
Current wording
We generated losses before provision for income taxes of $84 and $13,274 for the three months ended June 30, 2025 and 2024, respectively. Our net loss, after income taxes, for the three-month period ended June 30, 2025, was $849 or ($0.03) per basic and diluted share, as compared to $11,721 or ($0.42) per basic and diluted share in the same quarter of 2024.
Previous 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:
Current wording
Interest costs net of capitalized interest were $8,215 in the first six-month period of 2025, as compared to $7,610 in the same period of 2024. Interest costs are summarized in the following table:
Previous 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.
Current wording
The Company’s operating activities utilized net cash of $39,836 during the six-month period ended June 30, 2025, as compared to $49,357 during the six months ended June 30, 2024. Included in the $39,836 are net loss of $9,311, plus non-cash depreciation, amortization of intangibles and other assets and discounted future liabilities, in the amount of $10,027, and provision for bad debts in the amount of $1,999, change in deferred income taxes of $200 and changes in liabilities for uncertain tax positions or unrecognized tax benefits of $60. Also included are stock-based compensation of $981, asset impairment of $134, and net foreign currency adjustments of $855.
Previous 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.
Current 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 six months of 2025, the Company made accruals for programs in the amount of $41,451 and payments in the amount of $31,032, resulting in a net increase in accrued program costs of $10,267. During the first six months of the prior year, the Company made accruals in the amount of $44,633 and made payments in the amount of $26,615, resulting in a net increase of accrued program costs of $18,018.
Previous 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.
Current wording
Cash used for investing activities for the six-month period ended June 30, 2025, and 2024 was $1,085 and $6,398, respectively. In 2025, the Company spent $1,020 on purchases of fixed assets primarily focused on continuing to invest in manufacturing infrastructure, as compared to $4,944 for the same period of prior year. The Company made a payment of $88 for a product acquisition.
Previous 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.
Current wording
During the six months ended June 30, 2025, financing activities provided $41,479, as compared to $63,190 during the same period of the prior year. Net borrowings under the Credit Agreement amounted to $42,169 during the six-month period ended June 30, 2025, as compared to $65,259 in the same period of the prior year. The Company did not declare and pay dividends for the first six months of 2025, as compared to paying $1,670 during the six months ended June 30, 2024. The Company received $333 for the issuance of shares under our Employee Stock Purchase Program ("ESPP") and exercise of stock options for the six months ended June 30, 2025, as compared to $430 for the same period in prior year. Lastly, in exchange for shares of common stock returned by employees, the Company paid $142 and $829 for tax withholding on stock-based compensation awards during the six months ended June 30, 2025 and 2024, respectively.
Previous 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.
Current wording
At June 30, 2025, 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 $31,836, compared to $28,623 as of December 31, 2024.
Previous wording
Please refer to Note 1 in the accompanying Notes to the Condensed Consolidated Financial Statements for recently issued and adopted accounting standards.
Current wording
Please refer to Note 1 in the accompanying notes to the condensed consolidated financial statements for recently issued accounting standards.
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
Interest costs net of capitalized interest were $4,450 and $3,917 during the three-month period ended June 30, 2025 and 2024, respectively. Interest costs are summarized in the following table:
Current report — wording carried from elsewhere
Operating expenses decreased by $12,640 to $70,682 for the six-month period ended June 30, 2025, as compared to the same period in 2024. The changes in operating expenses by department are as follows:
Current report — wording carried from elsewhere
Income tax expense was $1,152 for the six months ended June 30, 2025, as compared to an income tax benefit of $69 for the three months ended June 30, 2024. The effective income tax rate for the six months ended June 30, 2025, was computed based on the estimated effective tax rate for the full year which is approximately 28%, 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 the U.S. and certain international entities, primarily in Brazil, for the six months ended June 30, 2025. During the six months ended June 30, 2025, several of the Company's international business outside of Brazil were profitable resulting in an income tax expense.
Current report — wording carried from elsewhere
As of June 30, 2025, the Company is deemed to be in compliance with its financial covenants.