AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

(Unaudited)

ASSETS

September 30,

2021

December 31,

2020

Current assets:

Cash and cash equivalents

$

16,718

$

15,923

Receivables:

Trade, net of allowance for doubtful accounts of $4,381 and $3,297, respectively

167,731

130,029

Other

11,384

8,444

Total receivables, net

179,115

138,473

Inventories, net

166,973

163,784

Prepaid expenses

12,491

10,499

Income taxes receivable

1,036

3,046

Total current assets

376,333

331,725

Property, plant and equipment, net

66,501

65,382

Operating lease right-of-use assets

26,080

12,198

Intangible assets, net of amortization

201,078

197,514

Goodwill

46,616

52,108

Other assets

15,595

18,602

Deferred income tax assets, net

3,669

2,764

Total assets

$

735,872

$

680,293

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Current installments of other liabilities

$

1,633

$

2,647

Accounts payable

66,082

59,253

Deferred revenue

5,510

43,611

Accrued program costs

79,355

45,441

Accrued expenses and other payables

20,726

16,184

Operating lease liabilities, current

5,015

4,188

Total current liabilities

178,321

171,324

Long-term debt, net of deferred loan fees

136,328

107,442

Operating lease liabilities, long-term

21,415

8,177

Other liabilities, excluding current installments

7,213

9,054

Deferred income tax liabilities, net

24,254

23,560

Total liabilities

367,531

319,557

Commitments and contingent liabilities

Stockholders' equity:

Preferred stock, $.10 par value per share; authorized 400,000 shares; none issued

—

—

Common stock, $.10 par value per share; authorized 40,000,000 shares; issued 34,272,665 shares at September 30, 2021 and 33,922,433 shares at December 31, 2020

3,428

3,394

Additional paid-in capital

99,917

96,642

Accumulated other comprehensive loss

(12,370

)

(9,322

)

Retained earnings

300,105

288,182

391,080

378,896

Less treasury stock at cost, 3,361,040 shares at September 30, 2021 and

3,061,040 shares at December 31, 2020

(22,739

)

(18,160

)

Total stockholders’ equity

368,341

360,736

Total liabilities and stockholders' equity

$

735,872

$

680,293

AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

For the Three Months

Ended September 30,

For the Nine Months

Ended September 30,

2021

2020

2021

2020

Net sales

$

147,298

$

117,439

$

398,063

$

317,956

Cost of sales

(90,234

)

(74,174

)

(243,729

)

(196,004

)

Gross profit

57,064

43,265

154,334

121,952

Operating expenses

(48,410

)

(39,039

)

(132,934

)

(109,163

)

Adjustment to bargain purchase gain on business acquisition

292

—

171

—

Operating income

8,946

4,226

21,571

12,789

Change in value of equity investments, net

(668

)

257

103

281

Other income

—

—

672

—

Interest expense, net

(962

)

(1,022

)

(2,921

)

(3,804

)

Income before provision for income taxes and loss on equity method investment

7,316

3,461

19,425

9,266

Income tax expense

(1,517

)

(492

)

(5,324

)

(1,852

)

Income before loss on equity method investment

5,799

2,969

14,101

7,414

Loss from equity method investment

(301

)

(42

)

(388

)

(80

)

Net income

$

5,498

$

2,927

$

13,713

$

7,334

Earnings per common share—basic

$

.18

$

.10

$

.46

$

.25

Earnings per common share—assuming dilution

$

.18

$

.10

$

.45

$

.25

Weighted average shares outstanding—basic

29,892

29,501

29,854

29,401

Weighted average shares outstanding—assuming dilution

30,390

29,973

30,470

29,926

AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES

ANALYSIS OF SALES

(In thousands)

(Unaudited)

For the Three Months Ended September 30,

2021

2020

Change

% Change

Net sales:

U.S. crop

$

66,722

$

48,361

$

18,361

38

%

U.S. non-crop

21,622

18,251

3,371

18

%

U.S. total

88,344

66,612

21,732

33

%

International

58,954

50,827

8,127

16

%

Net sales:

$

147,298

$

117,439

$

29,859

25

%

Gross profit:

U.S. crop

$

30,237

$

20,146

$

10,091

50

%

U.S. non-crop

8,882

8,758

124

1

%

U.S. total

39,119

28,904

10,215

35

%

International

17,945

14,361

3,584

25

%

Total gross profit:

$

57,064

$

43,265

$

13,799

32

%

For the Nine Months Ended September 30,

2021

2020

Change

% Change

Net sales:

U.S. crop

$

184,052

$

148,630

$

35,422

24

%

U.S. non-crop

60,563

37,881

22,682

60

%

U.S. total

244,615

186,511

58,104

31

%

International

153,448

131,445

22,003

17

%

Net sales:

$

398,063

$

317,956

$

80,107

25

%

Gross profit:

U.S. crop

$

78,313

$

68,119

$

10,194

15

%

U.S. non-crop

28,047

18,535

9,512

51

%

U.S. total

106,360

86,654

19,706

23

%

International

47,974

35,298

12,676

36

%

Total gross profit:

$

154,334

$

121,952

$

32,382

27

%

AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands, unaudited)

For the Nine Months Ended

September 30,

2021

2020

Cash flows from operating activities:

Net income

$

13,713

$

7,334

Adjustments to reconcile net income to net cash (used in) provided by operating activities:

Depreciation and amortization of property, plant and equipment and intangible assets

17,045

14,584

Amortization of other long-term assets

2,981

2,966

Accretion of discounted liabilities

(10

)

9

Amortization of deferred loan fees

294

219

Provision for bad debts

1,202

777

Loan principal and interest forgiveness

(672

)

—

Adjustment to contingent consideration

520

—

Stock-based compensation

5,309

3,776

Decrease in deferred income taxes

(560

)

(1,757

)

Change in value of equity investments, net

(103

)

(281

)

Net foreign currency adjustments

(330

)

(711

)

Loss from equity method investment

388

80

Adjustment to bargain purchase gain on business acquisition

(171

)

—

Changes in assets and liabilities associated with operations:

Increase in net receivables

(42,979

)

(5,089

)

Increase in inventories

(4,325

)

(16,941

)

Increase in prepaid expenses and other assets

(2,194

)

(532

)

Decrease in income tax receivable

2,031

873

Increase in net operating lease liability

183

14

Increase (decrease) in accounts payable

7,769

(1,759

)

Decrease in deferred revenue

(38,272

)

(1,079

)

Increase in accrued program costs

33,982

20,058

Increase (decrease) in other payables and accrued expenses

4,025

(2,117

)

Net cash (used in) provided by operating activities

(174

)

20,424

Cash flows from investing activities:

Capital expenditures

(7,963

)

(8,988

)

Acquisition of product line

(10,000

)

—

Intangible assets

(285

)

(3,942

)

Investments

(183

)

(1,190

)

Net cash used in investing activities

(18,431

)

(14,120

)

Cash flows from financing activities:

Net borrowings under line of credit agreement

28,592

377

Payment of contingent consideration

(250

)

(1,227

)

Net payments from the issuance of common stock (sale of stock under ESPP,

exercise of stock options, and shares purchased for tax withholding)

(2,000

)

(1,064

)

Repurchase of common stock

(4,579

)

—

Payment of cash dividends

(1,789

)

(1,168

)

Net cash provided by (used in) financing activities

19,974

(3,082

)

Net increase in cash and cash equivalents

1,369

3,222

Effect of exchange rate changes on cash and cash equivalents

(574

)

(222

)

Cash and cash equivalents at beginning of period

15,923

6,581

Cash and cash equivalents at end of period

$

16,718

$

9,581

Supplemental cash flow information:

Cash paid during the period for:

Interest

$

2,839

$

3,960

Income taxes, net

$

3,836

$

2,868

Non-cash transactions:

ROU assets exchanged for lease liabilities

$

17,872

$

4,895

Cash dividends declared and included in accrued expenses

$

594

$

—

UNAUDITED RECONCILIATION OF NET INCOME TO EBITDA

For the three- and nine-months September 30, 2021 and 2020

(Unaudited)

Three Months Ended September 30,

Nine Months Ended September 30,

2021

2020

2021

2020

Net income attributable to American Vanguard, as reported

$

5,498

$

2,927

$

13,713

$

7,334

Provision for income taxes

1,517

492

5,324

1,852

Interest expense, net

962

1,022

2,921

3,804

Depreciation and amortization

7,285

5,920

20,026

17,550

EBITDA2

$

15,262

$

10,361

$

41,984

$

30,540

1 Earnings before interest, taxes, depreciation, and amortization. EBITDA is not a financial measure calculated and presented in accordance with U.S. generally accepted accounting principles (GAAP) and should not be considered as an alternative to net income, operating income or any other financial measure so calculated and presented, nor as an alternative to cash flow from operating activities as a measure of liquidity. The items excluded from EBITDA are detailed in the reconciliation attached to this news release. Other companies (including the Company’s competitors) may define EBITDA differently.

2 Earnings before interest, taxes, depreciation and amortization. EBITDA is not a financial measure calculated and presented in accordance with U.S. generally accepted accounting principles (GAAP) and should not be considered as an alternative to net income, operating income or any other financial measures so calculated and presented, nor as an alternative to cash flow from operating activities as a measure of liquidity. The items excluded from EBITDA are detailed in the reconciliation attached to this news release. Other companies (including the Company’s competitors) may define EBITDA differently.