American Vanguard Corporation reported significant declines in financial performance for the third quarter and the first nine months of 2024 compared to the same periods in 2023. For the three months ended September 30, 2024, net sales were $118.3 million, a decrease of 21% from $149.5 million in the prior year. For the nine months, net sales totaled $381.7 million, down 6% from $407.2 million in 2023. The decline was primarily attributed to a voluntary product recall of the Dacthal product line, which significantly impacted U.S. crop sales, which fell 48% to $35.5 million in Q3 2024.

Gross profit for Q3 2024 was $17.3 million, a 60% decrease from $43.1 million in Q3 2023, resulting in a gross margin of 15%, down from 29%. The nine-month gross profit also declined to $97.5 million from $124.5 million, with a gross margin of 26%, down from 31%. The operating loss for Q3 2024 was $(28.4) million, compared to an operating income of $4.2 million in Q3 2023. For the nine months, the operating loss was $(31.5) million, compared to an operating income of $11.2 million in the previous year.

The company reported a net loss of $(25.7) million for Q3 2024, or $(0.91) per share, compared to a net loss of $(0.3) million, or $(0.01) per share, in Q3 2023. For the nine months, the net loss was $(35.9) million, compared to net income of $0.5 million in the same period last year. The losses were exacerbated by increased operating expenses, which rose 17% to $45.7 million in Q3 2024, driven by transformation costs related to ongoing activities.

American Vanguard's financial position showed increased long-term debt, rising to $178.7 million as of September 30, 2024, from $138.9 million at the end of 2023. The company also faced challenges with cash flow, reporting net cash used in operating activities of $(29.8) million for the nine months, although this was an improvement from $(145.9) million in 2023.

Strategically, the company has been involved in legal proceedings related to environmental violations and product recalls. In January 2024, American Vanguard reached a plea agreement with the Department of Justice regarding environmental violations, and in August 2024, the USEPA issued an emergency order suspending all registrations of DCPA products, leading to a voluntary cancellation of these registrations. The company has also been restricted from repurchasing shares due to amendments in its loan agreements.