(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated ~~filer.~~filer, smaller reporting company, or an emerging growth company. See ~~definition~~the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and ~~large accelerated filer”~~“emerging growth company” in Rule 12b-2 of the Exchange Act. ~~(Check one):~~

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Common Stock, $.10 Par Value—~~29,360,039~~29,783,029 shares as of ~~October~~April 25, ~~2016.~~2017.

	For the three months ended September 30						For the nine months ended September 30						For the three months ended March 31
	2016			2015			2016			2015			2017		2016
Net sales	$	82,447		$	72,486		$	224,645		$	205,574		$	70,673	$	69,474
Cost of sales		49,461			41,053			132,761			124,370			40,589		41,971
Gross profit		32,986			31,433			91,884			81,204			30,084		27,503
Operating expenses		28,255			26,059			77,429			74,325			24,951		22,873
Operating income		4,731			5,374			14,455			6,879			5,133		4,630
Interest expense		301			638			1,304			1,941
Income before provision for income taxes and loss on equity investment		4,430			4,736			13,151			4,938
Income tax expense		1,409			1,643			3,672			958
Income before loss on equity investment		3,021			3,093			9,479			3,980
Net loss from equity investment		(180	)		(389	)		(309	)		(580	)
Interest expense, net														298		541
Income before provision for income taxes and loss on equity method investment														4,835		4,089
Income taxes expense														1,380		1,060
Income before loss on equity method investment														3,455		3,029
Loss from equity method investment														42		82
Net income		2,841			2,704			9,170			3,400			3,413		2,947
Add back net loss (income) attributable to non-controlling interest		36			68			(253	)		204
Loss (income) attributable to non-controlling interest														39		(153	)
Net income attributable to American Vanguard	$	2,877		$	2,772		$	8,917		$	3,604			3,452		2,794
Earnings per common share—basic	$	0.10		$	0.10		$	0.31		$	0.13		$	.12	$	.10
Earnings per common share—assuming dilution	$	0.10		$	0.09		$	0.30		$	0.12		$	.12	$	.10
Weighted average shares outstanding—basic		28,957			28,753			28,886			28,653			28,947		28,808
Weighted average shares outstanding—assuming dilution		29,496			29,289			29,385			29,208			29,654		29,307

		Sept. 30, 2016			Dec. 31, 2015				Mar. 31, 2017			Dec. 31, 2016
Current assets:
Cash and cash equivalents		$	6,594		$	5,524			$	10,792		$	7,869
Receivables:
Trade, net of allowance for doubtful accounts of $159 and $423, respectively			91,091			72,835
Trade, net of allowance for doubtful accounts of $112 and $42, respectively										72,758			83,777
Other			3,500			2,554				3,314			3,429
Total receivables			94,591			75,389
Total receivables, net										76,072			87,206
Inventories			141,678			136,477				122,279			120,576
Prepaid expenses			12,270			11,172				12,461			11,424
Income taxes receivable			—			168
Deferred income tax assets			8,101			8,101
Total current assets			263,234			236,831				221,604			227,075
Property, plant and equipment, net			47,760			47,972				51,425			50,295
Intangible assets, net of applicable amortization			123,420			129,160				119,757			121,433
Other assets			28,695			29,576				29,819			31,153
Total assets		$	463,109		$	443,539
									$	422,605		$	429,956

LIABILITIES AND STOCKHOLDERS’ EQUITY	LIABILITIES AND STOCKHOLDERS’ EQUITY							LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current installments of other notes payable		$	-		$	55
Current installments of other liabilities			74			514			$	33		$	26
Accounts payable			23,268			15,343				21,333			24,358
Deferred revenue			41			8,888				3,454			3,848
Accrued program costs			74,907			44,371				49,542			42,930
Accrued expenses and other payables			10,209			7,111				6,586			12,072
Income taxes payable			1,269			—
Income tax payable										14,633			13,840
Total current liabilities			109,768			76,282				95,581			97,074
Long-term debt and other notes payable, excluding current installments			44,488			68,321
Long-term debt, net										29,993			40,951
Other liabilities, excluding current installments			3,036			3,054				2,842			2,868
Deferred income tax liabilities			27,556			27,556				6,714			6,706
Total liabilities			184,848			175,213				135,130			147,599
Commitments and contingent liabilities
Stockholders' Equity:
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 31,807,223 shares at September 30, 2016 and 31,638,225 shares at December 31, 2015			3,182			3,164
Common stock, $.10 par value per share; authorized 40,000,000 shares; issued 32,213,960 shares at March 31, 2017 and 31,819,695 shares at December 31, 2016										3,222			3,183
Additional paid-in capital			70,458			68,534				73,043			71,699
Accumulated other comprehensive loss			(4,429	)		(3,541	)			(4,094	)		(4,851	)
Retained earnings			217,135			208,507				223,445			220,428
			286,346			276,664				295,616			290,459
Less treasury stock, at cost, 2,450,634 shares at September 30, 2016 and December 31, 2015			(8,269	)		(8,269	)
Less treasury stock at cost, 2,450,634 shares at March 31, 2017 and December 31, 2016										(8,269	)		(8,269	)
American Vanguard Corporation stockholders’ equity			278,077			268,395				287,347			282,190
Non-controlling interest			184			(69	)			128			167
Total stockholders’ equity			278,261			268,326				287,475			282,357
Total liabilities and stockholders' equity		$	463,109		$	443,539
									$	422,605		$	429,956

For The Three Months Ended March 31, ~~2016, June 30, 2016, and September 30, 2016~~2017

Common Stock

Treasury Stock

Shares

Amount

Additional
Paid-in
Capital

Accumulated
Other
Comprehensive
Loss

Retained
Earnings

Shares

Amount

AVD
Total

Non-
Controlling
Interest

Total

Balance, December 31, 2015

31,638,225

$
3,164

$
68,534

$
(3,541
)

$
208,507

2,450,634

$
(8,269
)

$
268,395

$
(69
)

$
268,326

Stocks issued under ESPP

19,627

2

269

—

—

—

—

271

—

271

Foreign currency translation adjustment, net

—

—

—

85

—

—

—

85

—

85

Stock based compensation

—

—

456

—

—

—

—

456

—

456

Stock options exercised and grants, vesting and
   forfeited restricted stock units

(61,550
)

(6
)

(580
)

—

—

—

—

(586
)

—

(586
)
Excess tax benefits from share based
   payment arrangements

—

—

35

—

—

—

—

35

—

35

Net income

—

—

—

—

2,794

—

—

2,794

153

2,947

Balance, March 31, 2016

31,596,302

$
3,160

$
68,714

$
(3,456
)

$
211,301

2,450,634

$
(8,269
)

$
271,450

$
84

$
271,534

Cash dividends on common stock ($0.01
   per share)

—

—

—

—

(289
)

—

—

(289
)

—

(289
)
Foreign currency translation adjustment, net

—

—

—

(537
)

—

—

—

(537
)

—

(537
)
Stock based compensation

—

—

612

—

—

—

—

612

—

612

Stock options exercised and grants, vesting and
   forfeited restricted stock units

192,342

20

100

—

—

—

—

120

—

120

Excess tax benefits from share based
   payment arrangements

—

—

12

—

—

—

—

12

—

12

Net income

—

—

—

—

3,246

—

—

3,246

136

3,382

Balance, June 30, 2016

31,788,644

$
3,180

$
69,438

$
(3,993
)

$
214,258

2,450,634

$
(8,269
)

$
274,614

$
220

$
274,834

Stocks issued under ESPP

23,103

2

289

—

—

—

—

291

—

291

Foreign currency translation adjustment, net

—

—

—

(436
)

—

—

—

(436
)

—

(436
)
Stock based compensation

—

—

588

—

—

—

—

588

—

588

Stock options exercised and grants, vesting and
   forfeited restricted stock units

(4,524
)

—

108

—

—

—

—

108

—

108

Excess tax benefits from share based
   payment arrangements

—

—

35

—

—

—

—

35

—

35

Net income (loss)

—

—

—

—

2,877

—

—

2,877

(36
)

2,841

Balance, September 30, 2016

31,807,223

$
3,182

$
70,458

$
(4,429
)

$
217,135

2,450,634

$
(8,269
)

$
278,077

$
184

$
278,261

	Common Stock												Treasury Stock
	Shares		Amount		Additional Paid-in Capital		Accumulated Other Comprehensive Loss			Retained Earnings			Shares		Amount			AVD Total			Non- Controlling Interest			Total
Balance, December 31, 2016		31,819,695	$	3,183	$	71,699	$	(4,851	)	$	220,428			2,450,634	$	(8,269	)	$	282,190		$	167		$	282,357
Stocks issued under ESPP		16,349		2		248		—			—			—		—			250			—			250
Cash dividends on common stock ($0.015 per share)		—		—		—		—			(435	)		—		—			(435	)		—			(435	)
Foreign currency translation adjustment, net		—		—		—		757			—			—		—			757			—			757
Stock based compensation		—		—		1,080		—			—			—		—			1,080			—			1,080
Stock options exercised; grants and vesting of restricted stock units		377,916		37		16		—			—			—		—			53			—			53
Net income		—		—		—		—			3,452			—		—			3,452			(39	)		3,413
Balance, March 31, 2017		32,213,960	$	3,222	$	73,043	$	(4,094	)	$	223,445			2,450,634	$	(8,269	)	$	287,347		$	128		$	287,475

Increase (decrease) in cash	2016			2015
							For the three months ended March 31
							2017			2016
Cash flows from operating activities:
Net income	$	9,170		$	3,400		$	3,413		$	2,947
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of fixed and intangible assets		12,367			12,190			3,939			4,315
Amortization of other long term assets		3,935			3,992			1,423			1,092
Amortization of discounted liabilities		28			118			6			9
Stock-based compensation		1,656			2,943			1,080			456
Tax benefit from exercise of stock options		(82	)		(8	)
Excess tax benefit from exercise of stock options								—			(35	)
Increase in deferred income taxes								8			—
Operating loss from equity method investment		309			580			42			82
Changes in assets and liabilities associated with operations:
Increase in net receivables		(19,202	)		(6,172	)
(Increase) decrease in inventories		(5,201	)		4,135
(Increase) decrease in prepaid expenses and other assets		(1,011	)		1,143
Decrease (increase) in net receivables								11,422			(10,202	)
Increase in inventories								(1,366	)		(7,938	)
Increase in prepaid expenses and other assets								(1,126	)		(1,036	)
Decrease in income tax receivable/payable, net		1,519			4,739			793			1,205
Increase in accounts payable		7,925			3,010
(Decrease) increase in accounts payable								(3,025	)		13,031
Decrease in deferred revenue		(8,847	)		(860	)		(394	)		(1,848	)
Increase in program payables		30,536			20,982
Increase in other payables and accrued expenses		3,098			1,615			955			7,512
Net cash provided by operating activities		36,200			51,807			17,170			9,590
Cash flows from investing activities:
Capital expenditures		(6,122	)		(5,196	)		(3,080	)		(715	)
Investments		(3,283	)		(125	)
Acquisitions of product lines and other intangible assets		(224	)		(36,435	)
Investment								(300	)		(3,283	)
Net cash used in investing activities		(9,629	)		(41,756	)		(3,380	)		(3,998	)
Cash flows from financing activities:
Net payments under line of credit agreement		(24,000	)		(16,120	)
Increase in other notes payable		—			10,000
Payments under line of credit agreement								(27,000	)		(14,600	)
Borrowings under line of credit agreement								16,000			12,000
Payments on other long-term liabilities		(541	)		(1,252	)		—			(373	)
Tax benefit from exercise of stock options		82			8			—			35
Net payments from the issuance of common stock (sale of stock under ESPP, exercise of stock options, and shares purchased for tax withholding)								303			(315	)
Payment of cash dividends		(289	)		(1,141	)		(289	)		—
Net proceeds from the issuance of common stock (sale of stock under ESPP and exercise of stock options)		204			254
Net cash used in financing activities		(24,544	)		(8,251	)
Net cash used in by financing activities								(10,986	)		(3,253	)
Net increase in cash and cash equivalents		2,027			1,800			2,804			2,339
Cash and cash equivalents at beginning of period		5,524			4,885			7,869			5,524
Effect of exchange rate changes on cash and cash equivalents		(957	)		(1,256	)		119			53
Cash and cash equivalents at end of period	$	6,594		$	5,429		$	10,792		$	7,916

1. The accompanying unaudited condensed consolidated financial statements of American Vanguard Corporation and Subsidiaries (“AVD” ~~or “Company”~~) have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and ~~footnotes~~notes required by ~~generally accepted accounting principles in the United States of America~~US GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation, have been included. Operating results for the three ~~and nine~~ months ended ~~September 30, 2016~~March 31, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2016.~~2017. For further information, refer to the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2015.~~2016.

2. Property, plant and equipment at ~~September 30, 2016~~March 31, 2017 and December 31, ~~2015~~2016 consists of the following:

~~For the three months and nine months periods ended September 30, 2016, the~~The Company recognized depreciation expense related to property ~~plant~~ and equipment of ~~$2,021~~$1,950 and ~~$6,334,~~$2,254 for the three months ended March 31, 2017 and 2016, respectively. During the ~~nine~~three months ended ~~September 30,~~March 31, 2017 and 2016, ~~and 2015,~~ the Company eliminated from assets and accumulated depreciation ~~$410~~$1,175 and ~~$388~~$127, respectively, of fully depreciated assets, respectively. The Company recognized depreciation expense related to property, plant and equipment of $2,231 and $6,762 for the three months and nine months periods ended September 30, 2015, respectively. assets.

Substantially all of the Company’s assets are pledged as collateral with its banks.

3. Inventories are stated at the lower of cost or market. Cost is determined using the first-in, first-out method. The components of inventories consist of the following:

As of March 31, 2017, we believe our inventories are valued at lower of cost or market.

In July 2015, FASB issued ASU 2015-11, Inventory (Topic 330). Topic 330 currently requires an entity to measure inventory at the lower of cost or market, where market could be replacement cost, net realizable value, or net realizable value less an approximately normal profit margin. This ASU limits the scope to inventory that is measured using first-in, first-out (FIFO) or average cost and requires inventory be measured at the lower of costs or net realizable value. The new standard is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The Company adopted this new standard effective January 1, 2017. There was no impact on this adoption.

4. Based on similar economic and operational characteristics, the Company’s business is aggregated into one reportable segment. Selective enterprise information is as follows:

5. Accrued Program Costs—In accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 605, the Company classifies certain payments to its customers as a reduction of sales revenues. The Company describes these payments as “Programs.” Programs are a critical part of doing business in the US agricultural chemicals business market place. For accounting purposes, ~~Programs~~programs are recorded as a reduction in gross sales and include market pricing adjustments, volume take up or other key performance indicator driven payments made to distributors, retailers or growers, at the end of a growing season. Each quarter management compares individual sale transactions with published programs to determine what program liability has been incurred. Once this initial calculation is made for the specific quarter, sales and marketing management, along with executive and financial management, review the accumulated program balance and make assessments of whether or not customers are tracking in a manner that indicates that they will meet the requirements set out in the terms and conditions attached to each Program. If management believes that customers are falling short of or exceeding their annual goals, then periodic adjustments will be made to the accumulated accrual to properly reflect the Company’s best estimate of the liability at the balance sheet date. The majority of adjustments are made at the end of the crop season, at which time customer performance can be more fully assessed. Programs are paid out predominantly on an annual basis, usually in the final quarter of the financial year or the first quarter of the following year. ~~During~~No significant changes in estimates were made during the three ~~and nine~~ months ended ~~September 30,~~March 31, 2017 and 2016, ~~and 2015, no significant change in estimates was recorded.~~

6. The Company has declared and paid the following cash dividends in the ~~period~~periods covered by this Form 10-Q:

7. ASC 260 Earnings Per Share (“EPS”) requires dual presentation of basic EPS and diluted EPS on the face of ~~our~~the condensed consolidated statements of operations. Basic EPS is computed as net income divided by the weighted average number of shares of common stock outstanding during the period. Diluted EPS reflects potential dilution that could occur if securities or other contracts, which, for the Company, ~~consist~~consists of options to purchase shares of the Company’s common stock, are exercised.

The components of basic and diluted earnings per share were as ~~follows (in thousands):~~follows:

For the three months ended March 31, 2017 and ~~nine months ended September 30,~~ 2016, ~~and 2015,~~ no stock options were excluded from the computation of diluted earnings per share.

8. The Company has a revolving line of credit ~~and two other notes payable~~ that ~~together constitute the short-term and~~is shown as long-term ~~loan balances shown~~debt in the condensed consolidated balance sheets at ~~September 30, 2016~~March 31, 2017 and December 31, ~~2015. During 2015 the~~2016. The Company ~~adopted ASU 2015-03,~~ ~~Interest – Imputation~~has no short term debt as of ~~Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs~~.March 31, 2017 and December 31, 2016. These are summarized in the following table:

AMVAC Chemical Corporation (“AMVAC”), the Company’s principal operating subsidiary, as borrower, and affiliates (including the Company), as guarantors and/or borrowers, are parties to a credit agreement, dated as of ~~July 11, 2014~~June 17, 2013 (the “Credit Agreement”), with a group of commercial lenders led by Bank of the West (AMVAC’s primary bank) as agent, swing line lender and ~~Letter of Credit (“LC”)~~L/C issuer. The Credit Agreement is a senior secured lending facility with a five year term and consisting of a revolving line of credit of $200 million and an accordion feature for up to $100 million. The Credit Agreement includes both AMVAC CV ~~(“AMVAC CV”)~~ and AMVAC ~~Netherlands~~ BV ~~(“AMVAC BV”)~~ as borrowers. Under the Credit Agreement, revolving loans bear interest at a variable rate based, at borrower’s election with proper notice, on either (i) LIBOR plus the “Applicable Rate” which is based upon the Consolidated Funded Debt Ratio (“Eurocurrency Rate Loan”) or (ii) the greater of (x) the Prime Rate, (y) the Federal Funds Rate plus 0.5%, and (z) the Daily One-Month LIBOR Rate plus 1.00%, plus, in the case of (x), (y) or (z) the Applicable Rate (“Alternate Base Rate Loan”). Interest payments for Eurocurrency Rate Loans are payable on the last day of each interest period (either one, two, three or six months, as selected by the borrower) and the maturity date, while interest payments for Alternate Base Rate Loans are payable on the last business day of each month and the maturity date. The senior secured revolving line of credit matures on June 17, 2018.

Under the Credit Agreement, the Company has three key covenants (with which it was in compliance throughout the ~~nine~~three months ended ~~September 30, 2016)~~March 31, 2017). The covenants are as follows: (1) the Company must maintain its borrowings below a certain consolidated funded debt ratio, (2) the Company has a limitation on its annual spending on the acquisition of fixed asset capital additions, and (3) the Company must maintain a certain consolidated fixed charge coverage ratio.

On April 14, 2015, AMVAC, as borrower, and affiliates (including the Company), as guarantors and/or borrowers, entered into an amendment to the Credit Agreement under which, the Consolidated Funded Debt Ratio was increased for the second, third and fourth quarters of 2015 (to 3.5-to-1 from 3.25-to-1) and a fixed charge covenant, requiring, in effect, that the ratio of consolidated current assets to consolidated current liabilities exceed 1.2-to-1 for the duration of the term of the credit facility, was added.

At ~~September 30, 2016,~~March 31, 2017, based on its performance against the most restrictive covenants listed above, the Company had the capacity to increase its borrowings by up to ~~$95,985,~~$119,994, according to the terms of the Credit Agreement. This compares to an available borrowing capacity of ~~$40,189~~$65,373 as of ~~September 30, 2015.~~March 31, 2016. The level of borrowing capacity ~~was~~is driven by three factors: (1) our financial performance, as measured in ~~Earnings Before Interest, Tax, Depreciation and Amortization (“EBITDA”)~~EBITDA for ~~the~~ trailing twelve month period, which has improved, (2) ~~the level of~~net borrowings, ~~during the third quarter of 2015 was higher than normal due to the then recent completion of two product line acquisitions,~~which have decreased and (3) the leverage covenant (being the number of times EBITDA the Company may borrow under its credit facility agreement) ~~was lower when compared with the earlier period.~~.

9. Reclassification—Certain items may have been reclassified in the prior period condensed consolidated financial statements to conform with the ~~September 30, 2016~~March 31, 2017 presentation.

10. Total comprehensive income includes, in addition to net income, changes in equity that are excluded from the condensed consolidated statements of operations and are recorded directly into a separate section of stockholders’ equity on the condensed consolidated balance sheets. For the three month ~~and nine month periods~~period ended ~~September 30, 2016 and 2015,~~March 31, 2017, total comprehensive income consisted of net income attributable to American Vanguard and foreign currency translation adjustments.

11. Stock Based Compensation—The Company accounts for stock-based awards to employees and directors in accordance with FASB ASC 718, “Share-Based Payment,” which requires the measurement and recognition of compensation for all share-based payment awards made to employees and directors including shares of common stock granted for services, employee stock options, and employee stock purchases related to the Employee Stock Purchase Plan (“employee stock purchases”) based on estimated fair values.

The ~~below~~following tables illustrate the Company’s stock based compensation, unamortized stock-based compensation, and remaining weighted average period for the three months ended March 31, 2017 and ~~nine months ended September 30, 2016 and 2015.~~2016.

	Stock-Based Compensation for the Three months ended		Stock-Based Compensation for the Nine months ended		Unamortized Stock-Based Compensation		Remaining Weighted Average Period (years)		Stock-Based Compensation for the Three months ended		Unamortized Stock-Based Compensation		Remaining Weighted Average Period (years)
September 30, 2016
March 31, 2017
Incentive Stock Options	$	71	$	252	$	497		1.2	$	84	$	293		0.8
Restricted Stock		406		1,100		2,545		1.8		656		5,438		2.5
Performance Based Restricted Stock		100		240		857		1.4		300		2,385		2.5
Performance Based Options		11		64		173		1.2		40		128		0.8
Total	$	588	$	1,656	$	4,072			$	1,080	$	8,244

September 30, 2015
March 31, 2016
Incentive Stock Options	$	94	$	325	$	1,009		2.3	$	89	$	746		1.7
Restricted Stock		334		2,296		2,751		1.5		326		1,462		1.4
Performance Based Restricted Stock		18		222		686		1.8		33		441		1.3
Performance Based Options		12		100		373		2.2		8		263		1.7
Total	$	458	$	2,943	$	4,819			$	456	$	2,912

Stock Options—During the ~~nine~~three months ended ~~September 30, 2016,~~March 31, 2017, the Company did not grant any employees options to acquire shares of common stock.

Information relating to stock options at ~~September 30, 2016~~March 31, 2017, summarized by exercise price is as follows:

The weighted average exercise prices for options granted, and exercisable, and the weighted average remaining contractual life for options outstanding as of ~~September 30, 2016 was~~March 31, 2017, were as follows:

During the three months ended ~~September 30,~~March 31, 2017 and 2016, ~~and 2015,~~ the Company recognized stock-based compensation related to stock options of ~~$71~~$84 and ~~$94, respectively. During the nine months ended September 30, 2016 and 2015, the Company recognized stock-based compensation related to stock options of $252 and $325,~~$89, respectively.

As of ~~September 30,~~March 31, 2017 and 2016, the Company had approximately ~~$497~~$293 and $746, of unamortized stock-based compensation related to unvested stock options outstanding. This amount will be recognized over the weighted-average period of ~~1.2~~0.8 and 1.7 years. This projected expense will change if any stock options are granted or cancelled prior to the respective reporting periods or if there are any changes required to be made for estimated forfeitures.

~~Restricted Shares~~Common stock grants —A ~~status~~ summary of non-vested shares as of and for the ~~nine~~three months ended ~~September 30,~~March 31, 2017 and 2016 ~~and 2015~~ is presented below:

	Nine Months Ended September 30, 2016					Nine Months Ended September 30, 2015					Three Months Ended March 31, 2017					Three Months Ended March 31, 2016
	Number of Shares			Weighted Average Grant Date Fair Value		Number of Shares			Weighted Average Grant Date Fair Value		Number of Shares			Weighted Average Grant Date Fair Value		Number of Shares			Weighted Average Grant Date Fair Value
Nonvested shares at January 1^st		362,841		$	20.43		560,842		$	21.44
Nonvested shares at December 31^st												324,756		$	14.75		362,841		$	20.43
Granted		—			—		30,000			11.42		251,475			16.10		—			—
Vested		(127,274	)		31.29		(192,266	)		20.47		(10,100	)		12.95		(127,274	)		31.29
Forfeited		(16,008	)		23.67		(422	)		14.92		(6,544	)		15.26		(16,008	)		23.67
Nonvested shares at March 31^st		219,559		$	14.59		398,154		$	21.17		559,587		$	15.38		219,559		$	14.59
Granted		140,541			15.08		21,005			14.28
Vested		(22,639	)		15.63		(28,505	)		13.53
Forfeited		(6,457	)		14.98		(1,201	)		14.92
Nonvested shares at June 30^th		331,004		$	14.72		389,453		$	21.37
Granted		1,668			16.75		13,196			12.88
Vested		(2,566	)		19.18		(19,000	)		27.93
Forfeited		(12,822	)		14.98		(26,723	)		22.64
Nonvested shares at September 30^th		317,284		$	14.69		356,926		$	20.62

~~Restricted shares~~Common stock grants — During the ~~nine~~three months ended ~~September 30,~~March 31, 2017, the Company issued a total of 251,475 shares of restricted common stock to employees. The shares will cliff vest after three years of service. The shares granted in 2017 were average fair valued at $16.10 per share. The fair value was determined by using the publicly traded share price as of the date of grant. The Company will recognize as expense the value of restricted shares over the required service period.

During the three months ended March 31, 2016, the Company ~~granted~~issued a total of ~~142,209~~119,402 shares of restricted common ~~stock. Of these, 21,139~~stock to employees. The shares ~~vest immediately and the remaining 121,070~~ will cliff vest after three years of service. The shares granted in 2016 were average fair valued at $15.10 per share. The fair value was determined by using the publicly traded share price as of the date ~~of grant.~~the grant was approved. The Company ~~is recognizing~~will recognize as expense the value of restricted shares over the required service period. As the shares were subject to stockholder approval at the time the shares were issued, they were excluded from the table above.

During the nine months ended September 30, 2015, the Company granted a total of 64,201 shares of common stock. Of these, 21,005 shares vest immediately, 7,500 shares will vest after 90 days from date of grant, 3,196 shares will vest one-third each year on the anniversaries of the employee’s employment date and the balance will cliff vest after three years of service. The shares granted in 2015 were average fair valued at $12.66 per share. The fair value was determined by using the publicly traded share price as of the date of grant. The Company is recognizing as expense the value of restricted shares over the required service period.

During the three months ended ~~September 30,~~March 31, 2017 and 2016, ~~and 2015,~~ the Company recognized stock-based compensation related to restricted shares of ~~$406~~$656 and ~~$334,~~$326, respectively. ~~During the nine months ended September 30, 2016 and 2015, the Company recognized stock-based compensation related to restricted shares of $1,100 and $2,296, respectively.~~

As of ~~September 30,~~March 31, 2017 and 2016, the Company had approximately ~~$2,545~~$5,438 and $1,462, respectively, of unamortized stock-based compensation related to unvested restricted shares. This amount will be recognized over the weighted-average period of ~~1.8~~2.5 and 1.4 years. This projected expense will change if any restricted shares are granted or cancelled prior to the respective reporting periods or if there are any changes required to be made for estimated forfeitures.

Performance Based ~~Restricted~~ Shares—A summary of non-vested performance based shares as of and for the ~~nine~~three months ended ~~September 30,~~March 31, 2017 and 2016, ~~and 2015~~respectively is presented below:

Performance Based ~~Restricted~~ Shares — During the ~~nine~~three months ended ~~September 30,~~March 31, 2017, the Company issued a total of 121,194 performance based shares to employees. The shares granted during the first quarter of 2017 have an average fair value of $15.40. The fair value was determined by using the publicly traded share price as of the date of grant. The Company will recognize as expense the value of the performance based shares over the required service period from grant date. The shares will cliff vest on February 8, 2020 with a measurement period commencing January 1, 2017 and ending December 31, 2019. Eighty percent of these performance based shares are based upon the financial performance of the Company, specifically, an earnings before income tax (“EBIT”) goal weighted at 50% and a net sales goal weighted at 30%. The remaining 20% of performance based shares are based upon AVD stock price appreciation over the same performance measurement period. The EBIT and net sales goals measure the relative growth of the Company’s EBIT and net sales for the performance measurement period, as compared to the median growth of EBIT and net sales for an identified peer group. The stockholder return goal measures the relative growth of the fair market value of the Company’s stock price over the performance measurement period, as compared to that of the Russell 2000 Index and the median fair market value of the common stock of the comparator companies, identified in the Company’s 2016 Proxy Statement. All parts of these awards vest in three years, but are subject to reduction to a minimum (or even zero) for recording less than the targeted performance and to increase to a maximum of 200% for achieving in excess of the targeted performance.

During the three months ended March 31, 2016, the Company conditionally granted a total of 52,170 performance based shares that will cliff vest on January 6, 2019 ~~provided that the recipients are individually continuously employed by the Company during the vesting period. These shares have~~with a measurement period commencing January 1, 2016 and ending December 31, 2018. The shares granted to management during the first quarter of 2016, were subject to stockholder approval to extend the term of the Company’s stock incentive plan. That approval was received at the stockholder meeting on June 8, 2016. At that point the shares were given a fair value of $14.39. The fair value was determined by using publically traded share price on the date that the shareholders approved the grant. Eighty percent of these performance based shares are based upon the financial performance of the Company, specifically, an earnings before income tax (“EBIT”) goal weighted at 50% and a net sales goal weighted at 30%. The remaining 20% of performance based shares are based upon AVD stock price appreciation over the same performance measurement period. The EBIT and net sales goals measure the relative growth of the Company’s EBIT and net sales for the performance measurement period, as compared to the median growth of EBIT and net sales for an identified peer group. The stockholder return goal measures the relative growth of the fair market value of the Company’s stock price over the performance measurement period, as compared to that of the Russell 2000 Index and the median fair market value of the common stock of the comparator companies, identified in the Company’s 2015 Proxy Statement. All parts of these awards vest in three years, but are subject to reduction to a minimum (or even zero) for ~~meeting~~recording less than the targeted performance and to increase to a maximum of 200% for ~~meeting~~achieving in ~~excess~~ of the targeted performance. As the shares were subject to stockholder approval at the time the shares were issued to management, no expense was recorded during the first quarter of 2016 and the shares were consequently excluded from the table above.

~~During the nine months ended September 30, 2015, the Company granted a total~~As of ~~10,696 performance based shares. Of these, 7,500 shares will cliff vest on January 5, 2018 with a measurement period commencing January 1, 2015 and ending December~~March 31, 2017, and 3,196 shares will cliff vest on August 1, 2018 with a measurement period commencing July 1, 2015 and ending June 30, 2018, provided that the recipient is continuously employed by the Company during the vesting period. Eighty percent of these performance based shares ~~are based upon financial performance of the Company, specifically, an~~related to earnings before income tax (“EBIT”) goal weighted at 50% and a net sales goal weighted at 30%. The remaining 20% of performance based shares are based upon AVD stock price appreciation over the same performance measurement period. The EBIT and net sales goals measure the relative growth of the Company’s EBIT and net sales for the performance measurement period, as compared to the median growth of EBIT and net sales for an identified peer group. The stockholder return goal measures the relative growth of the fair market value of the Company’s stock price over the performance measurement period, as compared to that of the Russell 2000 Index and the median fair market value of the common stock of the comparator companies, identified in the Company’s 2014 Proxy Statement. All parts of these awards vest in three years, but are subject to reduction to a minimum (or even zero) for meeting less than the targeted performance and to increase to a maximum of 200% for meeting in excess of the targeted performance.

~~As of September 30, 2016, performance based shares related to net income~~ and net sales have an average fair value of ~~$15.08~~$16.10 per share. The fair value was determined by using the publicly traded share price as of the date of grant. The performance based shares

related to the Company’s stock price have an average fair value of ~~$11.63~~$12.60 per share. The fair value was determined by using the Monte Carlo valuation method. For awards with performance conditions, the Company recognizes share-based compensation cost on a straight-line basis for each performance criteria over the implied service period.

During the three months ended ~~September 30,~~March 31, 2017 and 2016, ~~and 2015,~~ the Company recognized stock-based compensation related to performance based shares of ~~$100~~$300 and ~~$18,~~$33, respectively. ~~During the nine months ended September 30, 2016 and 2015, the Company recognized stock-based compensation related to performance based shares of $240 and $222, respectively.~~

As of ~~September 30,~~March 31, 2017 and 2016, the Company had approximately ~~$857~~$2,385 and $441, respectively, of unamortized stock-based compensation expense related to unvested performance based shares. This amount will be recognized over the weighted-average period of ~~1.4~~2.5 and 1.3 years. This projected expense will change if any performance based shares are granted or cancelled prior to the respective reporting periods or if there are any changes required to be made for estimated forfeitures.

Performance ~~Based~~Incentive Stock Options—During the ~~nine~~three months ended ~~September 30,~~March 31, 2017 and 2016, ~~and 2015,~~ the Company did not grant any employees performance incentive stock options to acquire shares of common stock.

Information relating to ~~outstanding performance incentive~~ stock options at ~~September 30, 2016~~March 31, 2017 summarized by exercise price is as follows:

The weighted average exercise prices for options granted and exercisable and the weighted average remaining contractual life for options outstanding as of ~~September 30, 2016~~March 31, 2017 are as follows:

During the three months ended ~~September 30,~~March 31, 2017 and 2016, ~~and 2015,~~ the Company recognized stock-based compensation related to performance stock options of ~~$11~~$40 and ~~$12, respectively. During the nine months ended September 30, 2016 and 2015, the Company recognized stock-based compensation related to performance stock options of $64 and $100,~~$8, respectively.

As of ~~September 30,~~March 31, 2017 and 2016, the Company had approximately ~~$173~~$128 and $263, respectively, of unamortized stock-based compensation expenses related to unvested performance incentive stock options outstanding. This amount will be recognized over the weighted-average period of ~~1.2~~0.8 and 1.7 years. This projected expense will change if any performance incentive stock options are granted or cancelled prior to the respective reporting periods or if there are any changes required to be made for estimated forfeitures.

12. Legal Proceedings—During the reporting period, there have been no material developments in the legal proceedings that were reported in the Company’s Form 10-K for the period ended December 31, 2015 other than as discussed below:

Over the course of the past 30 years, AMVAC and/or the Company have been named or otherwise implicated in a number of lawsuits concerning injuries allegedly arising from either contamination of water supplies or personal exposure to 1, 2-dibromo-3-chloropropane (“DBCP^®”). DBCP was manufactured by several chemical companies, including Dow Chemical Company, Shell Oil Company and AMVAC and was approved by the United States Environmental Protection Agency (“USEPA”) to control nematodes. DBCP was also applied on banana farms in Latin America. The USEPA suspended registrations of DBCP in October 1979, except for use on pineapples in Hawaii. The USEPA suspension was partially based on 1977 studies by other manufacturers that indicated a possible link between male fertility and exposure to DBCP among their factory production workers involved with producing the product.

In October 2012, the federal district court in Louisiana granted defendants’ motion for summary judgment and dismissed the Hendler-Louisiana Cases for plaintiffs’ failure to bring the action within the applicable statute of limitations. Plaintiffs appealed the dismissal of the Hendler-Louisiana cases and, on September 19, 2013, the Fifth Circuit Court of Appeal upheld the lower court’s decision, finding no reason to reverse the dismissal.

On October 16, 2013, plaintiffs filed a notice of appeal in the Hendler-Delaware case. Oral argument was heard before the Third Circuit Court of Appeal on June 24, 2014 in connection with that appeal, and, on August 11, 2015, the Third Circuit upheld the lower court’s dismissal of the Hendler-Delaware case. However, plaintiffs petitioned for rehearing en banc, arguing that, despite the fact that the same plaintiffs had made the same claims before another court (namely, the Louisiana court in the Hendler-Louisiana Cases), because the Louisiana court had not decided the case on the merits (but, rather, on the basis of the statute of limitations), the Delaware trial court lacked the power to dismiss the Hendler-Delaware case with prejudice. On September 22, 2015, the Third Circuit vacated its previous ruling (to uphold the lower court dismissal) and reheard the matter ~~en banc~~ ~~on February 17, 2016.~~

On September 2, 2016, the Third Circuit Court reversed the District Court decision, finding that it was not proper for the trial court to have dismissed these cases with prejudice even though the Louisiana courts had dismissed the same claims for expiration of the statute of limitations. In reaching its decision, the Third Circuit reasoned that no court had yet addressed the merits of the matter, that Delaware’s statute of limitations may differ from that of Louisiana, and that it would have been proper for the Delaware trial court to have dismissed the matter without prejudice (that is, with the right to amend and refile). Accordingly, the matter has been remanded to the U.S. District Court in Delaware. The Company believes the Hendler-Delaware case has no merit and, further, that a loss is neither probable nor reasonably estimable; accordingly, it has not recorded a loss contingency.

~~U.S. EPA RCRA/FIFRA Matter~~ On or about March 24, 2015, Region 4 of the USEPA issued to registrant’s principal operating subsidiary, AMVAC, an Opportunity to Show Cause (“OSC”) why USEPA should not take formal action under Section 3008(a) of the Resource Conservation and Recovery Act (RCRA) for supposed noncompliance arising from AMVAC’s importation, transportation and storage of used, depleted Lock ‘N Load containers having residual amounts of its product Thimet. The scope of these discussions subsequently expanded to involve USEPA Region 5 and to include the importation of depleted Lock ‘N Load containers from Australia in October 2015 and full Lock ‘N Load containers from Canada in January 2016. On or about March 25, 2016, USEPA Region 5 issued a Stop Sale, Use or Removal Order (“SSURO”) ordering AMVAC to cease the distribution or sale of US Thimet 20G, Canadian Thimet 15G and Australian Thimet 200G on the grounds that the importation of both depleted and full containers of Thimet and the subsequent use of their contents was allegedly inconsistent with FIFRA. After hosting a plant inspection by Regions 4 and 5 and providing documentation to the agency, AMVAC requested and received relief from the SSURO in the form of eight amendments. As a consequence of this relief, the Company had adequate inventory to meet customers’ needs for the 2016 season.

In the course of its investigation, the agency has also pointed out alleged anomalies relating to the Company’s confidential statements of formula relating to the use of certain inert materials in formulation. USEPA’s Region 5 has expressed its intention to bring an enforcement action relating to its overall findings. AMVAC believes that it has lawfully imported Thimet from Canada and Australia for the purpose of potentially refilling, reprocessing or properly disposing of them. Further, the Company believes that it has carried out its Thimet business in good faith, maintained a focus on product stewardship and, in the process, did not pose any increased risk of harm to human health or the environment. On October 11, 2016, the Company met with USEPA’s Office of Enforcement and Compliance (as well as with Regions 4 and 5) to clarify a path forward to ensure future compliance. However, the Company has not yet received a final position from USEPA with regard to past acts, and, at this stage, it is too early to tell whether a loss arising from either the OSC or SSURO is probable or reasonably estimable. Accordingly, the Company has not recorded a loss contingency on this matter.

~~Galvan v. AMVAC~~ ~~In an action entitled~~ ~~Graciela Galvan v. AMVAC Chemical Corp.~~ filed on April 7, 2014 with the Superior Court for the State of California for the County of Orange (No. 00716103CXC) plaintiff, a former employee, alleges several violations of wages and hours requirements under the California Labor Code. The Company completed the deposition of plaintiff and participated in mediation on the matter. In February 2016, the court granted plaintiff’s motion for class certification with respect to only one of the seven original claims (namely, that discretionary bonus payments made to class members during the subject period allegedly should have been taken into account when calculating overtime). The Company believes that such bonus payments were discretionary and, as such, were properly excluded from overtime calculations. The Company has been in settlement discussions with plaintiff’s counsel, but has been unable to reach a mutually agreeable position. Thus, the Company intends to continue to defend the matter. We believe that a loss is possible and reasonably estimable and have recorded a loss contingency for the matter in an amount that is not material to our financial statements.

~~DeChene Farms~~ The Company is investigating a potential claim by a Minnesota-based grower who is alleging that the in-furrow use of the Company’s insecticide, Mocap, resulted in delayed germination and subsequently diminished size of approximately 300 acres of red Norland potatoes. Such a result could mean that the subject potatoes could be graded lower than normal and could command a lower premium at market. The Company has retained two independent investigators and conducted its own investigation of the matter as to causation, but does not yet have any information regarding market conditions and crop valuation (the harvest just having been completed). Based upon our current understanding of the matter, we believe that a loss is possible and reasonably estimable and have recorded a loss contingency for the matter in an amount that is not material to our financial statements.

~~13. Recently Issued Accounting Guidance—In August 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-15,~~ ~~Statement of Cash Flows (Topic 230)~~. The new standard addresses eight specific classification issues within the current practice regarding the manner in which certain cash receipts and cash payments are presented. The new standard is effective for fiscal years beginning after December 15, 2017, with early adoption permitted. The Company is currently evaluating the impact of our pending adoption of the new standard on our consolidated statements of cash flows.

In March 2016, FASB issued ASU 2016-09, Compensation—Stock Compensation (Topic 718). The new standard changes the accounting for certain aspects of share-based payments to employees. The standard requires the recognition of the income tax effects of awards in the income statement when the awards vest or are settled, thus eliminating additional paid in capital (“(��APIC”) pools. The standard also allows for the employer to repurchase more of an employee’s shares for tax withholding purposes without triggering liability accounting. Cash paid by an employer when directly withholding shares for tax-withholding purposes should be classified as a financing activity in the statement of cash flows. In addition, the standard allows for a policy election to account for forfeitures as they occur rather than on an estimated basis. The new standard is effective for fiscal years beginning after December 15, 2016 with early adoption permitted. The Company ~~is currently evaluating~~assessed the impact of ~~our pending~~the adoption of ~~the~~this new standard and determined there was no material impact on ~~our~~the 2016 consolidated financial statements. The Company has considered the different options for treatment of forfeitures in accounting for stock compensation and has elected to continue to account for such adjustments on the estimated basis. The Company adopted this new standard prospectively in the current period. The impact of this adoption was not material.

12. Legal Proceedings— During the reporting period, there have been no material developments in legal proceedings that were reported in the Company’s Form 10-K for the period ended December 31, 2016, except as described below.

Harold Reed v. AMVAC et al During January 2017, the Company was served with two Statements of Claim that had been filed on March 29, 2016 with the Court of Queen’s Bench of Alberta, Canada (as case numbers 160600211 and 160600237) in which plaintiffs Harold Reed (“Reed,”), an applicator, and 819596 Alberta Ltd. dba Jem Holdings (“Jem”), an application equipment rental company, allege physical injury and damage to equipment, respectively, arising from a fire that occurred during an application of the Company’s potato sprout inhibitor, SmartBlock, at a potato storage facility in Coaldale, Alberta, on April 2, 2014. Plaintiffs allege, among other things, that Amvac was negligent and failed to warn them of the risks of such application. Reed seeks damages of $250 for pain and suffering, while Jem seeks $60 in lost equipment; both plaintiffs also seek unspecified damages as well. Also during January 2017, counsel for Reed requested that counsel for the Company accept service of four related actions relating to the same incident and pending with the same court: (i) Van Giessen Growers, Inc. v Harold Reed et al (No. 160303906)(in which grower seeks $400 for loss of potatoes); (ii) James Houweling et al. v. Harold Reed et al. (No. 160104421)(in which equipment owner seeks damages for lost equipment); (iii) Chin Coulee Farms, etc. v. Harold Reed et al. (No. 150600545)(in which owner of potatoes and truck seeks $530 for loss thereof); and (iv) Houweling Farms v. Harold Reed et al. (No. 15060881)(in which owner of several Quonset huts seeks damages for lost improvements, equipment and business income equal to $4,300). The Company was subsequently served with complaints in these four actions during the first quarter of 2017. The Company was not named in the original complaints in these four actions but has since been added in cross-claims by defendant

Reed. In ~~March~~his cross claims, Reed also alleges that other cross-defendants were negligent for using highly flammable insulation and failing to maintain electrical fixtures in the storage units affected by the fire. The Company believes that plaintiffs’ and cross-plaintiffs’ claims against it are without merit and intends to defend these matters vigorously. At this stage in the proceedings, however, it is too early to determine whether a loss is probable or reasonably estimable; accordingly, the Company has not recorded a loss contingency.

Walker v. AMVAC On or about April 10, 2017, the Company was served with a summons and complaint that had been filed with the United State District Court for the Eastern District of Tennessee under the caption Larry L. Walker v. Amvac Chemical Corporation (as No. 4:17-cv-00017). Plaintiff seeks contract damages, correction of inventorship, accounting and injunctive relief arising from for the Company’s alleged misuse of his confidential information to support a patent application (which was subsequently issued) for a post-harvest corn herbicide that the Company has not commercialized. Plaintiff claims further that he, not the Company, should be identified as the inventor in such application. The Company believes that these claims are without merit and intends to defend vigorously. At this stage in the proceedings, it is too early to determine whether a loss is probable or reasonably estimable; accordingly, the Company has not recorded a loss contingency.

13. Recently Issued Accounting Guidance— In November 2016, FASB issued ASU ~~2016-07,~~2016-18, ~~Investments—Equity Method and Joint Ventures~~Statement of Cash Flows (Topic 230).. The new standard eliminates the requirement that an investor retrospectively apply equity method accounting when an investment that it had accounted for by another method initially qualifies for the equity method. The guidance requires that ~~an equity method investor add~~a statement of cash flows explain the ~~cost of acquiring~~change during the ~~additional interest~~period in the ~~investee to~~total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the ~~current basis~~beginning-of-period and end-of-period total amounts shown on the statement of ~~the investor’s previously held interest and adopt the equity method of accounting as of the date the investment becomes qualified for equity method accounting.~~cash flows. The new standard is effective for fiscal years beginning after December 15, 2017. Based on the composition of the Company’s cash and cash equivalent, adoption of the new standard is not expected to have a material impact on our consolidated cash flows statements. We expect to adopt the standard for the financial year beginning January 1, 2018.

In October 2016 FASB issued ASU 2016-16, Income Taxes (Topic 740). Current US GAAP prohibits the recognition of current and deferred income taxes for an intra-entity asset transfer until the asset has been sold to an outside party. Under the new standard, an entity is to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The new standard does not include new disclosure requirements; however, existing disclosure requirements might be applicable when accounting for the current and deferred income taxes for an intra-entity transfer of an asset other than inventory. The new standard is effective for annual periods beginning after December 15, 2017, including interim reporting periods within those annual periods. The Company has considered its activities with regard to such intra-entity transfers, does not expect the adoption of ASU 2016-16 to have a material impact on our consolidated financial statements and will adopt the standard for the financial year beginning January 1, 2018.

In August 2016, FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230). The new standard addresses eight specific classification issues within the current practice regarding the manner in which certain cash receipts and cash payments are presented. The new standard is effective for fiscal years beginning after December 15, 2017, with early adoption permitted. The Company has reviewed the eight specific issues addressed and does not believe that the adoption of ASU 2016-15 will have a material impact on its statement of cash flows. Further, the Company is currently ~~evaluating~~considering the ~~impact of our pending adoption of~~possible option for early adoption. At the ~~new~~latest the Company will adopt the revised standard ~~on our consolidated~~for the financial ~~statements.~~year beginning January 1, 2018.

beginning of the earliest comparative period presented in the consolidated financial statements, with certain practical expedients available. ~~The Company is currently evaluating~~We will evaluate our operating lease arrangements to determine the impact of this amendment on the consolidated financial statements. The evaluation will include an extensive review of our ~~pending adoption of~~leases, which are primarily related to our manufacturing sites, regional sales offices, lease vehicles, and office equipment. The ultimate impact will depend on the Company’s lease portfolio at the time the new standard is adopted. The Company expects to adopt ASU 2016-02 for the financial year beginning on ~~our consolidated financial statements.~~January 1, 2019.

In ~~January~~May 2014, FASB issued ASU 2014-09, Revenue from Contracts with Customers. ASU 2014-09 outlines a new, single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. This new revenue recognition model provides a five-step analysis in determining when and how revenue is recognized. The new model will require revenue recognition to depict the transfer of promised goods or services to customers in an amount that reflects the consideration a company expects to receive in exchange for those goods or services. In March 2016, FASB issued an amendment to the standard, ASU ~~2016-01,~~ ~~Recognition and Measurement~~2016-08, to clarify the implementation guidance on principal versus agent considerations. Under the amendment, an entity is required to determine whether the nature of ~~Financial Assets and Financial Liabilities. The update provides~~its promise is to provide the specified good or service itself (that is, the entity is a principal) or to arrange for that equity investments with readily determinable values be measured at fair value and changes in the fair value flow through net income. These changes historically have run through other comprehensive income. Equity investments without readily determinable fair values have the optiongood or service to be ~~measured at fair value or at cost adjusted~~

provided by the other party (that is, the entity is an agent). In April 2016, FASB issued another amendment to the standard, ASU 2016-10, to clarify identifying performance obligations and the licensing implementation guidance, which retaining the related principles for ~~changes in observable prices minus impairment. Changes in either method are also recognized in net income.~~those areas. The standard ~~requires a qualitative assessment of impairment indicators at each reporting period. For financial liabilities, entities that elect~~and the fair value option must recognize the change in fair value attributable to instrument-specific credit risk in other comprehensive income rather than net income. Lastly, regarding deferred tax assets, the need for a valuation allowance on a deferred tax asset will need to be assessed related to available-for-sale debt securities. ASU 2016-01 isamendments are effective for ~~fiscal years~~annual periods beginning after December 15, 2017, and interim periods ~~within those fiscal years. Earlier~~therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). This standard also requires enhanced disclosures regarding the nature, amount, timing, and uncertainty of revenue and cash flows. The adoption methods available ASU 2014-09 are being evaluated by the Company, and at this point, the adoption is ~~permitted.~~not expected to have significant impact on the Company’s consolidated financial statements. The Company ~~is currently evaluating~~expects to adopt the ~~impact~~new revenue recognition standard for the financial year beginning January 1, 2018.

14. Fair Value of ~~our pending adoption~~Financial Instruments—The carrying values of cash, receivables and accounts payable approximate their fair values because of the ~~new standard~~short maturity of these instruments. The fair value of the Company’s long-term debt payable to the bank is estimated based on ~~our consolidated financial statements.~~the quoted market prices for the same or similar issues or on the current rates offered to the Company for debt of the same remaining maturities. Such fair value approximates the respective carrying values of the Company’s long-term debt payable to bank.

15. Accumulated Other Comprehensive Income (“AOCI”)~~Balance Sheet Classification~~—The following table lists the beginning balance, annual activity and ending balance of ~~Deferred Taxes~~accumulated other comprehensive loss, which consists of foreign currency translation adjustments:

16. TyraTech Inc. (“TyraTech”) is a Delaware corporation that specializes in developing, marketing and selling pesticide products containing natural oils. As of March 31, 2017, the Company’s ownership position in TyraTech was approximately 15.11%. The ~~standard requires all~~Company utilizes the equity method of accounting with respect to this investment. As a result, our net income includes losses from equity method investments, which represents our proportionate share of TyraTech’s estimated net losses for the current accounting period. For the three months ended March 31, 2017, the Company recognized a loss of $42 as a result of the Company’s ownership position in TyraTech.

The Company’s investment in TyraTech is included in other assets on the condensed consolidated balance sheets. At March 31, 2017, the carrying value of the Company’s investment in TyraTech was $2,142 and the quoted market value of its shareholding was $1,127 based on the London Stock Exchange, Alternative Investment Market (“AIM”). At March 31, 2017, the Company performed an impairment review of its investment in TyraTech and concluded that the implied decrease in value was not other than temporary and no impairment charge was required.

17. In February 2016, the Company made an equity investment in Biological Products for Agriculture (“Bi-PA”) through its Netherlands wholly-owned subsidiary. Bi-PA develops biological plant protection products that can be used for the control of pests and disease of agricultural crops. As of March 31, 2017, the Company’s ownership position in Bi-PA was 15%. The Company utilizes the cost method of accounting with respect to this investment and will periodically review the investment for possible impairment. There was no impairment on the investment as of March 31, 2017. The investment is recorded within other assets on the condensed consolidated balance sheets.

18. Income Taxes – Income tax expense was $1,380 for the three months ended March 31, 2017, as compared to $1,060 for the three months ended March 31, 2016. The effective tax rate for the three months ended March 31, 2017 and 2016 was 28.5% and 25.9%, respectively. The effective tax rate is based on the projected income for the full year and is subject to ongoing review and adjustment by management.

The Company currently is undergoing an examination by the Internal Revenue Service (“IRS”) for the tax years ended December 31, 2013 and 2014. While the audit is ongoing, the Company has agreed to a proposed adjustment. As a result, the Company increased deferred tax assets and ~~liabilities, as well as any related valuation allowance,~~income taxes payable at December 31, 2016 by $12,598. Furthermore, the Federal tax return for the 2015 tax year is subject to ~~be classified as non-current on~~IRS examination. The Company’s state income tax returns are subject to examination for the ~~balance sheet. ASU 2015-17 is effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years and earlier adoption is permitted.~~ 2012 through 2015 tax years. On April 3, 2017, the Company paid the IRS $11,580.

The Company, ~~is currently evaluating~~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 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; 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 1A., Risk factors and Item 7A., Quantitative and Qualitative Disclosures about Market Risk, in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.

Overall financial performance for the Company improved for the quarter ended March 31, 2017. Our net sales for the period increased 2% to $70,673, as compared to $69,474 for the first quarter of 2016. Our gross profit performance ended at $30,084 or 43% of sales, as compared to $27,053 or 40% of sales for the comparable quarter last year. Operating costs in the quarter increased from 33% of sales in 2016 to 35% of sales this year, including increased marketing spend, as the 2017 growing season progresses, higher accruals for long-term incentive compensation and further investment in developing our ~~pending adoption~~SIMPAS delivery system. At the same time our net income increased by 24% to $3,452 for the first three months of 2017, as compared to $2,794 in the comparable period of prior year.

Net sales for our crop business were up less than 1%, while net sales for our non-crop products were up 11%. A more detailed discussion of general market conditions and sales performance by category of products appears below. Overall net income was up at $0.12 per share as compared to $0.10 per share this time last year.

When considering the balance sheet, net debt reduced by $10,958 to $29,993 in the three month ended March 31, 2017. This compares with $40,951 at December 31, 2016 and $65,763 at the same time last year. Inventory ended the quarter at $122,279, which is in line with our sales and inventory planning for the 2017. In comparison, inventory at this time last year was $144,415.

	2017			2016			Change			% Change
Net sales:
Insecticides	$	37,942		$	33,106		$	4,836			15	%
Herbicides/soil fumigants/fungicides		20,021			24,685			(4,664	)		-19	%
Other, including plant growth regulators		3,392			3,277			115			4	%
Total crop		61,355			61,068			287			0	%
Non-crop		9,318			8,406			912			11	%
	$	70,673		$	69,474		$	1,199			2	%
Cost of sales:
Insecticides	$	23,545		$	22,199		$	1,346			6	%
Herbicides/soil fumigants/fungicides		10,324			13,861			(3,537	)		-26	%
Other, including plant growth regulators		1,850			1,330			520			39	%
Total crop		35,719			37,390			(1,671	)		-4	%
Non-crop		4,870			4,581			289			6	%
	$	40,589		$	41,971		$	(1,382	)		-3	%
Gross profit:
Insecticides	$	14,397		$	10,907		$	3,490			32	%
Herbicides/soil fumigants/fungicides		9,697			10,824			(1,127	)		-10	%
Other, including plant growth regulators		1,542			1,947			(405	)		-21	%
Gross profit crop		25,636			23,678			1,958			8	%
Gross profit non-crop		4,448			3,825			623			16	%
	$	30,084		$	27,503		$	2,581			9	%
Gross margin crop		42	%		39	%
Gross margin non-crop		48	%		46	%
Total gross margin		43	%		40	%

Generally speaking, the improved quarterly sales performance was driven by three factors. First, our cotton products generated strong sales arising from increased cotton acres (which USDA estimates will be up about 21% in the 2017 growing season) and higher anticipated pest pressure. Second, we experienced increased sales in products used on peanuts (for which USDA forecasts a 9% increase in planted acres) sugar beets, sugar cane and fruits and vegetables. Third, our non-crop products, particularly commercial pest control products and our mosquito adulticide, recorded higher sales for the period. Partially offsetting these increases were lower sales of our corn herbicide into the Midwest market, slower sales of soil fumigants due to wet weather in the Western US, and a decline in international sales.

Across our crop business, net sales of our insecticides group were up approximately 15% to end at $37,942, as compared to $33,106 during the first quarter of 2016. Within this segment, net sales of our non-granular insecticides used in crop applications increased significantly, as compared to the same period of the prior year. Our cotton insecticide Bidrin^® posted significantly increased sales due to an expected increase in 2017 cotton acres, as noted above, and an anticipated increase in foliar pest pressure, as compared to extremely low infestation levels of 2016. Further, net sales of our granular soil insecticides were up approximately 2%. This increase was due to the strong performance of our non-corn insecticides, including Mocap^® and Nemacur^®, which are used primarily outside the U.S. market, Thimet^®, which is used primarily in peanuts and sugar cane and Counter®, which is largely used for nematode control in corn and sugar beets.

Within the group of herbicides/fungicides/fumigants used in crop applications, net sales for the first quarter of 2017 declined by approximately 19% to $20,021 from $24,685 in the comparable period of 2016. Net sales of our herbicide products declined 23%, due to reduced sales of our corn herbicide, Impact® in light of competitive market conditions and rain-delayed planting in the Midwest

market. Further, sales of our Scepter® soybean product, sold in the U.S. market, and our products Hyvar® and Krovar®, which are sold primarily in international markets, were down. Offsetting these declines we saw sales of Dacthal^® increase nearly 40% during the first quarter for use on a wide variety of high value vegetable crops. However, our soil fumigants business declined by approximately 11% from the prior year’s first quarter due to excessively wet weather in the Western and Southeast regions which inhibits or delays the application of these liquid products.

Within the group of other products (which includes plant growth regulators, molluscicides and tolling activity), net sales were up about 4%, as compared to the first quarter of 2016. Lower quarterly sales of our growth regulator product NAA were more than offset by increased sales of our Metaldehyde granules and SmartBlock potato sprout inhibitor. There was a small decline in toll manufacturing revenue during this year’s first quarter.

Our non-crop sales ended the first quarter of 2017 up 11% at $9,318, as compared to $8,406 for the same period of the prior year. Contributing factors were higher sales of our insecticide products for commercial pest control and a year-over-year increase in our aerial-applied mosquito adulticide Dibrom.^.These positive factors offset lower quarterly sales of our pharmaceutical products.

Our international sales ended at $18,429, as compared to $19,619 for the first quarter of the prior year, driven by lighter sales of our Hyvar and Krovar herbicides, somewhat offset by the continuing strong performance of our mainstay Mocap and Nemacur insecticide brands.

Our cost of sales for the first quarter of 2017 ended at $40,589 or 57% of net sales. This compares to $41,971 or 60% of net sales in the same period of 2016. The decrease in cost of sales as a percentage of net sales in 2017 was primarily the result of three drivers: first, our purchasing team has achieved raw material price reductions of about 0.8% in the period; second, our manufacturing performance improved; and third, the Company made more sales with higher margins in 2017 primarily driven by strong market performance in some of our key markets.

Gross profit for the first quarter of 2017 improved by $2,581, or 9%, to end at $30,084, as compared to $27,503 for the first quarter of 2016. Gross margin percentage ended at 43% in the first quarter of 2017, as compared to 40% in the first quarter of the prior year. This strong performance was primarily driven by strong raw material purchasing, methodical inventory management and solid sales mix performance.

Operating expenses increased by $2,078 to $24,951 for the three months ended March 31, 2017, as compared to the same period in 2016. The differences in operating expenses by department are as follows:

Interest costs net of capitalized interest, were $298 in the first three months of 2017, as compared to $541 in the same period of 2016. Interest costs are summarized in the following table:

The Company’s average overall debt for the three months ended March 31, 2017 was $44,217, as compared to $76,271 for the three months ended March 31, 2016. During the quarter, we continued to focus on managing our working capital and controlling our usage of revolving debt. As can be seen from the table above, our effective bank interest rate on our ~~consolidated~~revolving line of credit was 2.3% for the three months ended March 31, 2017, as compared to 2.5% in 2016.

Income tax expense increased by $320 to end at an expense of $1,380 for the three months ended March 31, 2017, as compared to $1,060 for the comparable period in 2016. The effective tax rate for the quarter was 28.5%, as compared to 25.9% in the same period of the prior year. The change in effective tax rate is primarily driven by improved year on year financial ~~statements.~~performance in jurisdictions with higher tax rates. Furthermore, the effective tax rate for all interim periods is based on the projected income for the full year and is subject to ongoing review and adjustment by management.

During the three months ended March 31, 2017 we recognized a loss of $42 on our investment in TyraTech. This compared to a loss of $82 recognized in the comparable period of 2016. This reflected the latest information regarding the forecast for their financial performance for 2016.

Non-controlling interest amounted to a gain of $39 in the three months ended March 31, 2017, as compared to a loss of $153 in the same period of the prior year. Non-controlling interest represents the share of net income or loss that is attributable to the minority stockholder of our majority owned subsidiary, Envance.

Our overall net income for the first three months of 2017 was $3,452 or 0.12 per basic and diluted share, as compared to $2,794 or $0.10 per basic and diluted share in the same quarter of 2016.

The Company generated $17,170 of cash from operating activities in the first three months of 2017, as compared to $9,590 in the same period of the prior year. This arose from the following: first, net income of $3,413, as compared to $2,947; second, non-cash depreciation, amortization of intangibles and other long term assets and discounted future liabilities generated $5,368, as compared to $5,416 in the prior year; third, stock based compensation of $1,080 as compared to $421 in the same quarter of 2016; and fourth, other non-cash adjustments including loss from equity method investment provided net cash inflow of $9,911, as compared to $8,866 in the same period of 2016.

As of March 31, 2017, our working capital reduced to $126,023, as compared to $130,001 at December 31, 2016. This change was mainly driven by reductions in accounts receivable which was caused by two factors: first, customer decisions regarding the take up or otherwise of market driven early payment incentives; and second, the specific mix of sales, customers and terms agreed upon for sales in the prior three to six months. This time last year our working capital amounted to $154,629.

During the three months ended March 31, 2017, net sales ended up 2% at $70,673, as compared to the same period of 2016. At March 31, 2017 accounts receivable decreased by 13%, as compared to the balance as of March 31, 2016. During the first quarter of 2017 the level of accounts receivable decreased by $11,422, as compared to December 31, 2016. This change is driven by customer decisions related to timing of early pay and by the mix of sales of products, customers and regions in the three to six months prior to March 31, 2017.

Our deferred revenues decreased by $394 as some customers utilized their advance payments for purchases made during the quarter ended March 31, 2017. In ~~July 2015, FASB issued ASU 2015-11,~~ ~~Inventory (Topic 330)~~the same period of the prior year deferred revenues decreased by $1,848.~~. Topic 330 currently requires~~

Inventories ended at $122,279, which was an ~~entity~~increase of $1,366 in comparison to ~~measure~~December 31, 2016. This increase was somewhat lower than we reported for the same period of the prior year. It is normal at this point in the agricultural season to see our inventories increase as we work to supply grower demand in a timely manner. This year we continued to hold back inventory build to focus on managing our working capital levels. Furthermore, in the first three months of 2017, we purchased less inventory than in the comparable period of the prior year. It should be noted that the Company purchases and holds raw material, intermediate or finished goods inventory from time to time based on a single annual purchase from a single source or supplier, potentially resulting in peaks in the carrying value of the inventory. In comparison, inventories at March 31, 2016 were $22,136 higher at $144,415. As of March 31, 2017, we believe our inventories are valued at the lower of cost or ~~market, where market could~~market.

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^th each year. During the three months ended March 31, 2017, the Company made accruals in the amount of $13,543. Programs are primarily paid out to customers either in the final quarter of the fiscal year or the first quarter of the next fiscal year. During the first three months of 2017, the Company made payments in the amount of $6,931. Payments are not generally significant in the second and third quarters of each fiscal year. During the three months ended March 31, 2016, the Company accrued $13,369 and made payments in the amount of $5,738.

Timing of payments made on prepaid expenses and other assets caused an increase of $1,126, which is normal at this time in the year and compares to $1,036, this time last year. In 2017, our accounts payables went down by $3,025 as compared to an increase of $13,031 in the same period of 2016. This year, we held down manufacturing and purchased less inventory than we had during the comparable period of the prior year.

The Company utilized $3,380 for investing activities during the three months ended March 31, 2017, as compared to $3,998 during the same period of 2016. The Company made investments in capital expenditures in the current year, primarily focused on expanding plant capabilities. Furthermore, the Company made a small product line acquisition in the first quarter of 2017. During the same period of the prior year the Company made an investment in a Belgian company that develops biological plant protection products that can be ~~replacement cost,~~used for the control of pests and disease of agricultural crops and a small level of spending on the manufacturing plant.

Financing activities utilized $10,986 principally by paying down on the line of credit during the three months ended March 31, 2017, as compared to $3,253 for the same purpose this time last year. This included a net ~~realizable value, or net realizable value less an approximately normal profit margin. This ASU limits~~repayment of $11,000 against our senior credit facility, as compared to $2,600 for the ~~scope~~same period last year. Further, the Company received $53 upon vesting of shares and exercise of stock options and received $250 from the sale of common stock under its Employee Stock Purchase Plan, as compared to ~~inventory~~$315 for the same period of last year.

The Company has a revolving line of credit that is shown as long-term debt in the condensed consolidated balance sheets at March 31, 2017 and December 31, 2016. The Company has no short-term debt at March 31, 2017 and December 31, 2016. These are summarized in the following table:

The Company has three key covenants to its senior, secured credit facility with its banking syndicate. The covenants are as follows: (1) the Company must maintain its borrowings below a certain consolidated funded debt ratio (taking into account the Company’s twelve month trailing EBITDA), (2) the Company has a limitation on its annual spending on the acquisition of fixed asset capital additions, and (3) the Company must maintain a certain consolidated fixed charge coverage ratio. As of March 31, 2017 the Company met all covenants in that credit facility.

At March 31, 2017, based on its performance against the most restrictive covenants listed above, the Company had the capacity to increase its borrowings by up to $119,994 under the credit facility agreement. This compares to an available borrowing capacity of $65,373 as of March 31, 2016. This improvement in available borrowing capacity arises from improved financial performance (as measured ~~using first-in, first-out (FIFO)~~by EBITDA) for the trailing twelve month period and the reduction in borrowings achieved since the end of the first quarter of 2016.

We believe that anticipated cash flow from operations, existing cash balances and available borrowings under our senior credit facility will be sufficient to provide us with liquidity necessary to fund our working capital and cash requirements for the next twelve months.

In November 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-18, Statement of Cash Flows (Topic 230). The new standard requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or ~~average cost~~restricted cash equivalents. Therefore, amounts generally described as restricted cash and ~~requires inventory~~restricted cash equivalents should be ~~measured at~~included with cash and cash equivalents when reconciling the ~~lower~~beginning-of-period and end-of-period total amounts shown on the statement of ~~costs or net realizable value.~~cash flows. The new standard is effective for fiscal years beginning after December 15, 2017. Based on the composition of the Company’s cash and cash equivalent, adoption of the new standard is not expected to have a material impact on our consolidated cash flows statements. We expect to adopt the standard for the financial year beginning January 1, 2018.

In August 2016, FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230). The new standard addresses eight specific classification issues within the current practice regarding the manner in which certain cash receipts and cash payments are presented. The new standard is effective for fiscal years beginning after December 15, 2017, with early adoption permitted. The Company has reviewed the eight specific issues addressed and does not believe that the adoption of ASU 2016-15 will have a material impact on its statement of cash flows. Further, the Company is currently considering the possible option for early adoption. At the latest the Company will adopt the revised standard for the financial year beginning January 1, 2018.

In February 2016, FASB issued ASU 2016-02, Leases. The new standard establishes a right-of-use (ROU) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. ~~The Company~~A modified retrospective transition approach is ~~currently evaluating~~required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the consolidated financial statements, with certain practical expedients available. We will evaluate our operating lease arrangements to determine the impact of this amendment on the consolidated financial statements. The evaluation will include an extensive review of our ~~pending adoption of~~leases, which are primarily related to our manufacturing sites, regional sales offices, lease vehicles, and office equipment. The ultimate impact will depend on the Company’s lease portfolio at the time the new standard ~~on our consolidated financial statements.~~

~~In August 2014, FASB issued~~is adopted. The Company expects to adopt ASU ~~2014-15,~~ ~~Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. This ASU requires that management of an entity assesses whether there is substantial doubt about the ability of the entity to continue as a going concern and~~2016-02 for making the appropriate disclosures. The assessment must be performed at each annual and interim reporting period, and there is substantial doubt about an entity’s ability to continue as a going concern if it is probable that the entity will be unable to meet its obligations as they become due within 12 months of the date the financial statements are issued. In the assessment, management must consider the information available at the date of issuance of the financial statements, as well as mitigating factors and plans to alleviate the substantial doubt. ASU 2014-15 is effective for annual periods ending after December 15, 2016 and interim periods thereafter. Early application is permitted. Upon adoption, the Company will follow the guidance in this ASU when assessing going concern.year beginning on January 1, 2019.

In May 2014, FASB issued ASU 2014-09, Revenue from Contracts with Customers. ASU 2014-09 outlines a new, single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. This new revenue recognition model provides a five-step analysis in determining when and how revenue is recognized. The new model will require revenue recognition to depict the transfer of promised goods or services to customers in an amount that reflects the consideration a company expects to receive in exchange for those goods or services. In March 2016, FASB issued an amendment to the standard, ASU 2016-08, to clarify the implementation guidance on principal versus agent considerations. Under the amendment, an entity is required to determine whether the nature of its promise is to provide the specified good or service itself (that is, the entity is a principal) or to arrange for that good or service to be provided by the other party (that is, the entity is an agent). In April 2016, FASB issued another amendment to the standard, ASU 2016-10, to clarify identifying performance obligations and the licensing implementation guidance, which retaining the related principles for those areas. The standard and the amendments are effective for annual periods beginning after December 15, 2017, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). This standard also requires enhanced disclosures regarding the nature, amount, timing, and uncertainty of revenue and cash flows. The ~~Company is currently evaluating the impact of its pending~~ adoption ofmethods available ASU 2014-09 onare being evaluated by the ~~consolidated financial statements~~Company, and ~~has~~at this point, the adoption is not ~~yet determined the method by which it will adopt the standard in 2018 or its~~

expected to have significant impact on the Company’s consolidated financial statements.

14. Fair Value of Financial Instruments—The carrying values of cash, receivables and accounts payable approximate their fair values because of the short maturity of these instruments. The fair value of the Company’s long-term debt and note payable to bank is

estimated based on the quoted market prices for the same or similar issues or on the current rates offered to the Company for debt of the same remaining maturities. Such fair value approximates the respective carrying values of the Company’s long-term debt and note payable to bank.

~~15. Accumulated Other Comprehensive Income (“AOCI”)~~—~~The following table lists the beginning balance, annual activity and ending balance of accumulated other comprehensive loss, which consists of foreign currency translation adjustments:~~

~~16.~~ The Company ~~utilizes the equity method of accounting with respect~~expects to its investment in TyraTech Inc. (“TyraTech”), a Delaware corporation that specializes in developing, marketing and selling pesticide products containing natural oils. As of September 30, 2016, the Company’s ownership position in TyraTech was approximately 15.11%. As a result, our net income includes losses from this equity method investment, which represent our proportionate share of TyraTech’s estimated net losses for the current accounting period. For the three and nine months ended September 30, 2016, the Company recognized a loss of $180 and $309, respectively. For the three and nine months ended September 30, 2015, the Company recognized a loss of $389 and $580, respectively.

At September 30, 2016, the carrying value of the Company’s investment in TyraTech was $2,228 and the quoted market value based on TyraTech’s share price (Level 1 input) was $1,450. At September 30, 2016, the Company performed an impairment review of its investment in TyraTech and concluded that the current condition was temporary and consequently determined that no impairment change was appropriate. TyraTech’s shares trade on the AIM market of the London Stock Exchange under the trading symbol ‘TYR’. The Company’s equity investment is included in Other Assets on the consolidated balance sheets.

On August 2, 2016, the Company’s Netherlands-based subsidiary, AMVAC Netherlands BV, entered into a joint venture with China-based Huifeng Agrochemical Company, Ltd. The new entity, named Huifeng/AMVAC Innovation Co., Ltd., is based in Hong Kong and is intended to focus on activities such as market access and technology transfer between the two members. AMVAC Netherlands BV is a 50% owner ofadopt the new ~~entity. The Company has concluded that it will account~~revenue recognition standard for ~~the joint venture under the equity method. There has been no funding made to this joint venture as of September 30, 2016.~~

17. In February 2016, the Company made an equity investment in Biological Products for Agriculture (“Bi-PA”) through its Netherlands wholly-owned subsidiary. Bi-PA develops biological plant protection products that can be used for the control of pests and disease of agricultural crops. As of September 30, 2016, the Company’s ownership position in Bi-PA was 15%. The Company utilizes the cost method of accounting with respect to this investment and will periodically review the investment for possible impairment. There was no impairment on the investment as of September 30, 2016. The investment is recorded within other assets on the condensed consolidated balance sheets.

18. Income Taxes—For the three months ended September 30, 2016 and 2015, income tax expense was $1,409 and $1,643, respectively. For the nine months ended September 30, 2016 and 2015, income tax expense was $3,672 and $958, respectively and the effective tax rate was 27.9% in 2016 and 19.4% in 2015. These amounts are based upon management’s estimates for the full fiscal year, which are subject to review and revision.

The Company’s Federal income tax returns for the years December 31, 2012 through December 31, 2014 are under examination by the Internal Revenue Service (“IRS”). The results of the audit are not determinable.

~~19. Subsequent Event— On October 11, 2016, the Company declared a $.01 per share cash dividend to stockholders as of October 28, 2016. The cash dividend is to be paid on November 11, 2016.~~

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 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; 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 on risk factors arising during the reporting period, refer to Item 1A., Risk Factors. For more detailed information on risk factors affecting the Company generally, refer to Item 1A., Risk factors and Item 7A., Quantitative and Qualitative Disclosures about Market Risk, in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015.

Overall financial performance for the quarter ended September 30, 2016 included sales of $82,447 which were up approximately 14%, as compared to sales of $72,486 for the third quarter of 2015. Our gross profit performance ended at $32,986 or 40% of sales, as compared to $31,433 or 43% of sales for the comparable quarter last year. Gross margin was impacted by a shift in timing to Q3 2016, of some international toll manufacturing which occurred earlier in the season in 2015, and a short term cost increase for a key raw material for one of our international products. Operating costs in the quarter improved from 36% of sales in 2015 to 34.3% of sales this year; notwithstanding this improvement, costs did increase as we continue to develop our international footprint and invest in future business and product development. Overall net income was up at $0.10 per share as compared to $0.09 per share this time last year.

Financial performance for the nine month period ended September 30, 2016 included improved sales and net income, as compared to the same period in 2015. Sales for the period were up approximately 9% to $224,645, as compared to $205,574 for the first nine months of 2015. Under absorption of factory costs for the nine month period reduced from 5% of sales to 4% of sales. Our gross profit performance ended at $91,884 or 41% of sales, as compared to $81,204 or 40% of sales for the comparable prior period. Operating expenses reduced from 36% of net sales to 34% and net income improved by 147% to $0.30 per share, as compared to $0.12 per share.

When considering the balance sheet, net debt reduced by $5,088 in the three month ended September 30, 2016 to $44,488. This compares with $68,321 at December 31, 2015 and $92,731 at the same time last year. Inventory ended the quarter at $141,678, which is in line with our sales and inventory planning for the 2016. In comparison, inventory at this time last year was $161,496. We remain on track for our forecast at December 31, 2016.

2016

2015

Change

% Change

Net sales:

Insecticides

$
25,478

$
23,539

$
1,939

8.2
%
Herbicides/soil fumigants/fungicides

34,242

32,682

1,560

4.8
%
Other, including plant growth regulators

13,328

7,420

5,908

79.6
%
Total crop

73,048

63,641

9,407

14.8
%
Non-crop

9,399

8,845

554

6.3
%
Total net sales

$
82,447

$
72,486

$
9,961

13.7
%
Cost of sales:

Insecticides

$
17,029

$
14,240

$
2,789

19.6
%
Herbicides/soil fumigants/fungicides

18,146

17,953

193

1.1
%
Other, including plant growth regulators

9,609

4,005

5,604

139.9
%
Total crop

44,784

36,198

8,586

23.7
%
Non-crop

4,677

4,855

(178
)

-3.7
%
Total cost of sales

$
49,461

$
41,053

$
8,408

20.5
%
Gross profit:

Insecticides

$
8,449

$
9,299

$
(850
)

-9.1
%
Herbicides/soil fumigants/fungicides

16,096

14,729

1,367

9.3
%
Other, including plant growth regulators

3,719

3,415

304

8.9
%
Gross profit crop

28,264

27,443

821

3.0
%
Gross profit non-crop

4,722

3,990

732

18.3
%
Total gross profit

$
32,986

$
31,433

$
1,553

4.9
%
Gross margin crop

39
%

43
%

Gross margin non-crop

50
%

45
%

Total gross margin

40
%

43
%

For the three months ended September 30, 2016, sales for our Crop business were up approximately 15% at $73,048, as compared to $63,641 for the same period of the prior year, while sales for non-crop products were up 6% at $9,399, as compared to $8,845 last year. A more detailed discussion of general market conditions and sales performance by category of products appears below.

Third quarter 2016 financial performance was influenced by some key factors. First, we recorded strong quarterly sales of several of our cotton products due to increased cotton acres this season, up approximately 17% overall and over 50% in the MidSouth region, which is one of our key Folex markets. Second, we enjoyed increased sales of our market leading soil fumigant products primarily used in the late summer and fall periods. Third, our tolling business sales were strong in the third quarter of this year, whereas in the prior year these sales occurred in an earlier period.

Sales of our Insecticide group for crop applications were up 8%, to $25,478, as compared to $23,539 for the third quarter of 2015. The increase was led by sales of Mocap and Nemacur which were up 22% compared to the prior year, offset by Thimet sales that suffered from unfavorable weather conditions in the Southeast U.S.

Within the group of Herbicides/Fungicides/Fumigants, sales for the third quarter of 2016 increased by approximately 5% to $34,242, as compared to $32,682 in the same period of 2015. The main driver was sales of our soil fumigants which rose in the third quarter as post-harvest, on-ground applications in the Southeast and Northwest sections of the U.S. caught up from a slow start last quarter.

Within the group of Other products (which includes plant growth regulators, molluscicides and tolling activity), our sales increased about 80% to $13,328, as compared to $7,420 in the third quarter of 2015. There were two main drivers for this performance. First, toll manufacturing activity increased significantly in the third quarter as compared to 2015 as a result of production scheduling (these annual tolling sales were recorded in the second quarter in 2015). Second, we experienced an increase in purchases of our Folex^® ~~cotton defoliant during the quarter, as cotton growers shifted their procurement of this harvest aid closer to time of use in the September/October harvest.~~

Our Non-crop sales ended the third quarter of 2016 at $9,399, which was 6% above sales of $8,845 for the same period of the prior year. This sales increase was primarily driven by improved sales of our Metaldehyde granules.

On a regional basis, our domestic US sales improved by 13% to end at $60,033 for the three months of 2016, as compared to $53,167 in the same period of 2015. As detailed above, the growth in domestic sales quarter over quarter was largely driven by growth in sales of our Metam fumigants, our Folex cotton defoiliant and our Dacthal herbicide. During the same period, our international sales were up 16% to end at $22,414, as compared to $19,319 for the prior year. International sales increased because of tolling revenues, that occurred in an earlier period in 2015, and increased Nemacur sales, offset by lower sales of Dacthal where we had a schedule delay in formulating a specific item resulting in sales probably moving to later in the year.

Our cost of sales for the third quarter of 2016 was $49,461 or 60% of sales, as compared to $41,053 or 57% of sales for the same period of 2015. There were a number of factors driving the increase. First, our tolling revenues occurred in the second quarter of 2015, whereas this year they occurred in the third quarter. This mix change impacts our overall cost of sales by 1.4%. Second, during the quarter we experienced a temporary price increase for a raw material that is used in an international product line. That increase impacted our overall cost of sales by 1.6%. We expect that we will work through the higher priced raw material and return to more normal margins for this product by the end of the second quarter of 2017. Our labor and burden costs increased as we expanded manufacturing output in the three months ended September 30, 2016, as compared to the same period of the prior year. Partly offsetting these factors, we have enjoyed cost reduction on a number of key raw materials.

Gross margin ended the quarter at 40% for the three months ended September 30, 2016, as compared to 43% in the same period of the prior year. The change in margin percentage was expected primarily because of the shift in international tolling revenues and is detailed above in the cost of sales discussion.

~~It should be noted that, when making comparisons with other companies’ financial statements, the Company reports distribution costs in operating expenses and not as part of cost of sales.~~

Operating expenses increased by $2,196 to $28,255 for the three months ended September 30, 2016, as compared to the same period in 2015. The differences in operating expenses by department are as follows:

~~Interest costs, net of capitalized interest were $301 in the three months to September 30, 2016 as compared to $638 in the same period of 2015. Interest costs are summarized in the following table:~~

The Company’s average overall debt for the three months ended September 30, 2016 was $44,626, as compared to $98,907 for the three months ended September 30, 2015. Included in interest expense of $301 during the three months ended September 30, 2016, are non-cash costs related to amortization of discounting for deferred payments and other interest expense, net of capitalized interest, in the amount of $22 as compared to $62 for the same period of the prior year. The effective rate on our bank borrowings was flat at 2.2% for the period to September 30, 2016 and the same period of the prior year. Our overall effective interest rate was 2.7% for the three months ended September 30, 2016, as compared to 2.6% at September 30, 2015.

For the three months ended September 30, 2016, income tax expense totaled $1,409 and the effective tax rate for the quarter was 31.8%. These amounts are based upon management’s estimates for the full fiscal year, which are subject to review and revision. For the three months ended September 30, 2015, income tax expense totaled $1,643 and the effective tax rate for the quarter was 34.7%.

~~Our overall net income for the three months ended September 30, 2016 totaled $2,877 or $0.10 per diluted share as compared to $2,772 or $0.09 per diluted share in the same quarter of 2015.~~

2016

2015

Change

% Change

Net sales:

Insecticides

$
89,496

$
85,484

$
4,012

4.7
%
Herbicides/soil fumigants/fungicides

80,009

71,973

8,036

11.2
%
Other, including plant growth regulators

23,148

23,497

(349
)

-1.5
%
Total crop

192,653

180,954

11,699

6.5
%
Non-crop

31,992

24,620

7,372

29.9
%
Total net sales

$
224,645

$
205,574

$
19,071

9.3
%
Cost of sales:

Insecticides

$
59,244

$
55,244

$
4,000

7.2
%
Herbicides/soil fumigants/fungicides

42,907

41,139

1,768

4.3
%
Other, including plant growth regulators

15,184

14,372

812

5.6
%
Total crop

117,335

110,755

6,580

5.9
%
Non-crop

15,426

13,615

1,811

13.3
%
Total cost of sales

$
132,761

$
124,370

$
8,391

6.7
%
Gross profit:

Insecticides

$
30,252

$
30,240

$
12

0.0
%
Herbicides/soil fumigants/fungicides

37,102

30,834

6,268

20.3
%
Other, including plant growth regulators

7,964

9,125

(1,161
)

-12.7
%
Gross profit crop

75,318

70,199

5,119

7.3
%
Gross profit non-crop

16,566

11,005

5,561

50.5
%
Total gross profit

$
91,884

$
81,204

$
10,680

13.2
%
Gross margin crop

39
%

39
%

Gross margin non-crop

52
%

45
%

Total gross margin

41
%

40
%

For the nine months ended September 30, 2016, sales for our Crop business were $192,653, up approximately 7% from $180,954 in 2015, while sales for Non-crop products were $31,992, up by about 30% from $24,620 in the comparable period of the prior year. A more detailed discussion of general market conditions and sales performance by category of products appears below.

~~During the period, the Company experienced an 18% increase in sales of its corn products (including our Impact~~^® herbicide and our granular corn insecticides). In addition, during the 2015-16 growing season which ended on September 30, 2016, channel inventories of the same products have reduced by approximately 20%. The Company has also seen significant growth in sales associated with the Bromacil and European Nemacur acquisitions, concluded early in 2015, the Scepter license, signed in the late fall of 2015 and in revenues from a third party for the exclusive right for licenses to certain of our natural oil products.

Net sales of our Insecticides used in crop applications for the nine months ended September 30, 2016 were about 5% higher at $89,496, as compared to $85,484 during the same period of 2015. Within this category, sales of our granular soil insecticides (“GSIs”) were up approximately 3% as compared to the same period in 2015, primarily driven by increased sales of Nemacur. Sales of our non-GSI insecticides for crop applications were led by higher year-to-date sales of Bidrin and Bifenthrin, our primary cotton insecticides.

Within the group of Herbicides/Fungicides/Fumigants for crop applications, sales for the first nine months of 2016 were $80,009, approximately 11% higher than the $71,973 recorded in the first nine months of 2015. While sales of our soil fumigant products declined slightly as a result of some weather-related wet field application difficulties, sales of herbicides increased significantly driven by strong Impact sales in U.S. corn, the addition of Scepter the portfolio, and stronger sales of Bromacil as that product line was more fully integrated into our international business.

Within the group of Other products (which includes plant growth regulators, molluscicides and tolling activity), we recorded net sales of $23,148, as compared to $23,497 in the first three quarters of 2015. Sales in all of the above categories were relatively flat compared with the prior year nine month performance.

Our Non-crop sales for the first nine months of 2016 were $31,992, up 30% from $24,620 for the same period of the prior year. This performance was driven by our pest strip, pharmaceutical and Envance sales that were all considerably higher in the first nine months of 2016, as compared to the similar period in 2015. Pest strips sales were up because one of our major customers made the decision to purchase a multiyear order in December 2014 in order to secure a price point. That customer inventory cleared out in early 2016. Normal replenishment is now on-going. Pharmaceutical sales improved because of forecast product supply interruption in 2017 related to a specific raw material supplier in the Czech Republic that has decided to exit the market. New suppliers have been found but the approval process will take time and as a result there will be a gap in supply. Customers are making decisions this year to insulate themselves during that possible gap period by increasing their order size. Envance revenues are being driven by proceeds from licensed rights to our natural oil products, in certain markets; this license arrangement was not in place in 2015.

On a regional basis, our domestic US sales improved by 11% to end at $161,661 for the first three quarters of 2016, as compared to $146,231 in the same period of 2015. The drivers are performance in the corn market, the revenues from license rights to our natural oil products, strong domestic sales of Dacthal and revenues related to the Scepter license. During the same period, our international sales were up 6% to end at $62,984, as compared to $59,343 for the prior year. The main drivers were increased revenues from Bromacil and European sales of Nemacur acquired early in 2015, offset (to a degree) by lower international sales of Dacthal as a result of a short term formulating capacity issue that should resolve during the final quarter of the year.

Our cost of sales for the nine months of 2016 was $132,761 or 59% of net sales. This compared to $124,370 or 60% of net sales for the same period of 2015. The main drivers for the change were improvements generated by revenues for license rights to our natural oil products offset by the short term issue, primarily affecting the third quarter, related to raw material costs for an international product line.

~~Our labor and burden costs~~ ~~were 1% lower~~ in the nine months ended September 30, 2016, as compared to the same period of the prior year. Further, as our channel inventories have reduced, we have been slowly ramping up production of some products resulting in improved factory cost recovery, as compared to the first nine months of 2015. These improvements resulted in reduced net factory costs which amounted to 4% (of sales) in the nine months of 2016, as compared to 5% ~~in the same period of 2015 and added $1,662 to~~ ~~our gross profit performance in the nine months of 2016, as compared to this time last year.~~

~~It should be noted that, when making comparisons with other companies’ financial statements, the Company reports distribution costs in operating expenses and not as part of cost of sales.~~

Operating expenses increased by $3,104 to $77,429 for the nine months ended September 30, 2016, as compared to the same period of 2015. The differences in operating expenses by department are as follows:

~~Interest costs net of capitalized interest, were $1,304 in the nine months of 2016, as compared to $1,941 in the same period of 2015. Interest costs are summarized in the following table:~~

The Company’s average overall debt for the nine months ended September 30, 2016 was $63,976 as compared to $106,126 for the same period of 2015. During the nine months ended September 30, 2016, the Company remained focused on driving down the revolving debt following the 2015 product acquisitions. Included in interest expense of $1,304 during the nine months ended September 30, 2016, are non-cash costs related to amortization of discounting of deferred payments and other interest expense in the amount of $206, as compared to $400 for the same period of the prior year. The effective rate on our bank borrowings was 2.3% for the period to September 30, 2016, as compared to 2.0% for the same period of the prior year. Our overall effective interest rate was 2.7% for the nine months ended September 30, 2016, as compared to 2.4% in the same period of 2015.

For the nine months ended September 30, 2016, income tax expense increased by $2,714 to end at $3,672 and the effective tax rate was 27.9%. The amount is based upon management’s estimates for the full fiscal year, which are subject to review and revision. For the nine months ended September 30, 2015, income tax expense totaled $958 and the effective tax rate was 19.4%. The change in effective tax rate is primarily driven by improved year on year earnings in jurisdictions with higher income tax rates.

~~Our overall net income attributable to American Vanguard for the nine months of 2016 was $8,917 or $0.30 per diluted share, as compared to $3,604 or $0.12 per diluted share in the same period of 2015.~~

The Company generated $36,200 of cash in operating activities during the nine months ended September 30, 2016. This compares to generating $51,807 in the same period of last year. Net income of $9,170, non-cash depreciation and amortization of fixed and intangible assets, other assets and discounted future liabilities in the amount of $16,330, stock based compensation expense of $1,656 plus a non cash loss recorded on our equity investment and tax benefit from exercise of stock options provided a net cash inflow of $27,383 as compared to $23,215 for the same period last year.

During the nine months ended September 30, 2016, the Company increased trade receivables by $19,202. This compares with an increase in trade receivables of $6,172 during the same period of 2015. The movement in receivables is primarily driven by strong domestic sales in the later part of the period to September 30, 2016.

~~At the end of September 2016, our inventories were at $141,678, which was down from $161,496 at this time last year. In comparison to the start of~~ the financial year our inventories have increased by $5,201 in the nine month period of 2016, as compared to decreasing by $4,135 during the same period of the prior year. This 2016 performance reflects the improving condition of channel inventory levels of the Company’s products which is allowing us to start slowly increasing the manufacturing level for some products as we look forward to the 2016-2017 season. As of September 30, 2016, we believe our inventories are valued at lower of cost or market.

During the nine months ended September 30, 2016, deferred revenues decreased by $8,847, as compared to a decrease of $860 for the same period of the prior year. The decrease in deferred revenues reflects customers utilizing their prepayments made in prior periods.

~~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~~^th each year. During the nine months ended September 30, 2016, the Company made accruals in the amount of $45,456. Programs are primarily paid out to customers either in the final quarter of the fiscal year or the first quarter of the next fiscal year. However, there are some programs that are paid more frequently or that have different settlement dates that reflect particular growing seasons. During the first nine months of 2016, the Company made payments in the amount of $14,920. Payments are not generally significant in the second and third quarters of each financial year. During the nine months ended September 30, 2015, the Company accrued $38,102 and made payments in the amount of $17,120.

Finally, prepaid and other assets increased by $1,011, tax payable increased by $1,519, accounts payable increased by $7,925, and other payables and accruals increased by $3,098. In aggregate, this amounted to a $11,531 inflow. During the same period of 2015, these items amounted to a $10,507 inflow.

The Company is working to manage its capital spending closely and utilized $6,122 during the nine months ended September 30, 2016, compared to utilizing $5,196 during the same period of 2015. This is primarily driven by an increase in capital spending in our factories including the capital cost of putting in place a dedicated manufacturing cell at one of the toll manufacturing locations. During the first nine months of 2016, the Company made an equity investment in Biological Products for Agriculture (“Bi-PA”) through its Netherlands wholly-owned subsidiary. Bi-PA develops biological plant protection products that can be used for the control of pests and disease of agricultural crops. As of September 30, 2016, the Company’s ownership position in Bi-PA was 15%. During the comparable period in 2015, the Company increased its ownership share of its Envance subsidiary by paying $125 to its joint venture partner, TyraTech and, in addition, making a capital contribution to the joint venture in the amount of $1,263. Finally, during the first nine months of 2015, the Company completed two acquisitions of product lines and spent a total of $36,435 on those transactions. During the first nine months of 2016, the Company made final payments associated with the 2015 product acquisitions in the amount of $224.

The Company has a revolving line of credit and a note payable that together constitute the short-term and long-term loan balances shown in the balance sheets at September 30, 2016 and December 31, 2015. These are summarized in the following table:

Under the Credit Agreement, the Company has three key covenants (with which it was in compliance throughout the nine months ended September 30, 2016). The covenants are as follows: (1) the Company must maintain its borrowings below a certain consolidated funded debt ratio, (2) the Company has a limitation on its annual spending on the acquisition of fixed asset capital additions, and (3) the Company must maintain a certain consolidated fixed charge coverage ratio.

At September 30, 2016, based on its performance against the most restrictive covenants listed above, the Company had the capacity to increase its borrowings by up to $95,985 under the credit facility agreement. This compares to an available borrowing capacity of $40,189 as of September 30, 2015. The level of borrowing capacity was driven by three factors: (1) our financial performance, as measured in EBITDA for the trailing twelve month period, has improved, (2) the level of borrowings during the third quarter of 2015 was higher than normal due to the then recent completion of two product line acquisitions, and (3) the leverage covenant (being the number of times EBITDA the Company may borrow under its credit facility agreement) was lower when compared with the earlier period.

The Company believes that anticipated cash flow from operations, existing cash balances and available borrowings under our senior credit facility will be sufficient to provide us with liquidity necessary to fund our working capital and cash requirements for the next twelve months.

~~Recently Issued Accounting Guidance—In August 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-15,~~ ~~Statement of Cash Flows (Topic 230)~~. The new standard addresses eight specific classification issues within the current practice regarding the manner in which certain cash receipts and cash payments are presented. The new standard is effective for fiscal years beginning ~~after December 15, 2017, with early adoption permitted. The Company is currently evaluating the impact of our pending adoption of the new standard on our consolidated statements of cash flows.~~

~~In March 2016, FASB issued ASU 2016-09,~~ ~~Compensation—Stock Compensation (Topic 718)~~. The new standard changes the accounting for certain aspects of share-based payments to employees. The standard requires the recognition of the income tax effects of awards in the income statement when the awards vest or are settled, thus eliminating additional paid in capital (“APIC”) pools. The standard also allows for the employer to repurchase more of an employee’s shares for tax withholding purposes without triggering liability accounting. Cash paid by an employer when directly withholding shares for tax-withholding purposes should be classified as a financing activity in the statement of cash flows. In addition, the standard allows for a policy election to account for forfeitures as they occur rather than on an estimated basis. The new standard is effective for fiscal years beginning after December 15, 2016 with early adoption permitted. The Company is currently evaluating the impact of our pending adoption of the new standard on our consolidated financial statements.

~~In March 2016, FASB issued ASU 2016-07,~~ ~~Investments—Equity Method and Joint Ventures.~~ The new standard eliminates the requirement that an investor retrospectively apply equity method accounting when an investment that it had accounted for by another method initially qualifies for the equity method. The guidance requires that an equity method investor add the cost of acquiring the additional interest in the investee to the current basis of the investor’s previously held interest and adopt the equity method of accounting as of the date the investment becomes qualified for equity method accounting. The new standard is effective for fiscal years beginning after December 15, 2016 with early adoption permitted. The Company is currently evaluating the impact of our pending adoption of the new standard on our consolidated financial statements.

~~In February 2016, FASB issued ASU 2016-02,~~ ~~Leases.~~ The new standard establishes a right-of-use (ROU) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company is currently evaluating the impact of our pending adoption of the new standard on our consolidated financial statements.

In January ~~2016, FASB issued ASU 2016-01,~~ ~~Recognition and Measurement of Financial Assets and Financial Liabilities.~~ The update provides that equity investments with readily determinable values be measured at fair value and changes in the fair value flow through net income. These changes historically have run through other comprehensive income. Equity investments without readily determinable fair values have the option to be measured at fair value or at cost adjusted for changes in observable prices minus impairment. Changes in either method are also recognized in net income. The standard requires a qualitative assessment of impairment indicators at each reporting period. For financial liabilities, entities that elect the fair value option must recognize the change in fair value attributable to instrument-specific credit risk in other comprehensive income rather than net income. Lastly, regarding deferred tax assets, the need for a valuation allowance on a deferred tax asset will need to be assessed related to available-for-sale debt securities. ASU 2016-01 is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Earlier adoption is permitted. The Company is currently evaluating the impact of our pending adoption of the new standard on our consolidated financial statements.

~~In November 2015, FASB issued ASU 2015-17,~~ ~~Balance Sheet Classification of Deferred Taxes~~. The standard requires all deferred tax assets and liabilities, as well as any related valuation allowance, to be classified as non-current on the balance sheet. ASU 2015-17 is effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years and earlier adoption is permitted. The Company is currently evaluating the impact of our pending adoption of the new standard on our consolidated financial statements.

~~In July 2015, FASB issued ASU 2015-11,~~ ~~Inventory (Topic 330).~~ Topic 330 currently requires an entity to measure inventory at the lower of cost or market, where market could be replacement cost, net realizable value, or net realizable value less an approximately normal profit margin. This ASU limits the scope to inventory that is measured using first-in, first-out (FIFO) or average cost and requires inventory be measured at the lower of costs or net realizable value. The new standard is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The Company is currently evaluating the impact of our pending adoption of the new standard on our consolidated financial statements.

~~In August 2014, FASB issued ASU 2014-15,~~ ~~Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern~~. This ASU requires that management of an entity assesses whether there is substantial doubt about the ability of the entity to continue as a going concern and for making the appropriate disclosures. The assessment must be performed at each annual and interim reporting period, and there is substantial doubt about an entity’s ability to continue as a going concern if it is probable that the entity will be unable to meet its obligations as they become due within 12 months of the date the financial statements are issued. In the assessment, management must consider the information available at the date of issuance of the financial statements, as well as mitigating factors and plans to alleviate the substantial doubt. ASU 2014-15 is effective for annual periods ending after December 15, 2016 and interim periods thereafter. Early application is permitted. Upon adoption, the Company will follow the guidance in this ASU when assessing going concern.

~~In May 2014, FASB issued ASU 2014-09,~~ ~~Revenue from Contracts with Customers~~. ASU 2014-09 outlines a new, single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. This new revenue recognition model provides a five-step analysis in determining when and how revenue is recognized. The new model will require revenue recognition to depict the transfer of promised goods or services to customers in an amount that reflects the consideration a company expects to receive in exchange for those goods or services. In March 2016, FASB issued an amendment to the standard, ASU 2016-08, to clarify the implementation guidance on principal versus agent considerations. Under the amendment, an entity is required to determine whether the nature of its promise is to provide the specified good or service itself (that is, the entity is a principal) or to arrange for that good or service to be provided by the other party (that is, the entity is an agent). In April 2016, FASB issued another amendment to the standard, ASU 2016-10, to clarify identifying performance obligations and the licensing implementation guidance, which retaining the related principles for those areas. The standard and the amendments are effective for annual periods beginning after December 15, 2017, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). The Company is currently evaluating the impact of its pending adoption of ASU 2014-09 on the consolidated financial statements and has not yet determined the method by which it will adopt the standard in 2018 or its impact on the consolidated financial statements.1, 2018.

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, ~~2015,~~2016, 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, ~~2015.~~2016.

The Company is exposed to market risk related to changes in interest rates, primarily from its borrowing activities. The Company’s indebtedness to its primary lender is evidenced by a line of credit with a variable rate of interest, which fluctuates with changes in the lender’s reference rate. For more information, please refer to the applicable disclosures in the Company’s Form 10-K filed with the SEC for the year ended December 31, ~~2015.~~2016.

The Company conducts business in various foreign currencies, primarily in Europe, Mexico, Central and South America. Therefore changes in the value of the currencies of such countries or regions affect the Company’s financial position and cash flows when translated into U.S. Dollars. The Company has mitigated and will continue to mitigate a portion of its currency exchange exposure through natural hedges based on the operation of decentralized foreign operating companies in which the majority of all costs are local-currency based. Furthermore, the Company has established a procedure for covering forward exchange rates on specific purchase orders when appropriate. A 10% change in the value of all foreign currencies would have an immaterial effect on the Company’s financial position and cash flows.

~~The~~As of March 31, 2017, the Company has ~~established~~ a comprehensive set of disclosure controls and procedures designed to ensure that all information required to be disclosed in our filings under the Securities Exchange Act (1934) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. As of ~~September 30, 2016,~~March 31, 2017, the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer has concluded, based on their evaluation, that the Company’s disclosure controls and procedures are effective to provide reasonable assurance of the achievement of the objectives described above.

There were no changes in the Company’s internal controls over financial reporting that occurred during the most recent quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.

The Company was not required to report any matters or changes for any items of Part II except as disclosed below.

During the reporting period, there have been no material developments in ~~the~~ legal proceedings that were reported in the Company’s Form 10-K for the period ended December 31, ~~2015, other than~~2016, except as ~~discussed below:~~described below.

~~Over the course of the past 30 years,~~Harold Reed v. AMVAC ~~and/or~~et al During January 2017, the Company ~~have been named or otherwise implicated in a number~~was served with two Statements of ~~lawsuits concerning injuries allegedly arising from either contamination of water supplies or personal exposure to 1, 2-dibromo-3-chloropropane (“DBCP~~^®”). DBCP was manufactured by several chemical companies, including Dow Chemical Company, Shell Oil Company and AMVAC and was approved by the USEPA to control nematodes. DBCP was also applied on banana farms in Latin America. The USEPA suspended registrations of DBCP in October 1979, except for use on pineapples in Hawaii. The USEPA suspension was partially based on 1977 studies by other manufacturers that indicated a possible link between male fertility and exposure to DBCP among their factory production workers involved with producing the product.

Several cases involving 235 banana workers from Costa Rica, Ecuador and Panama had been separately filed in U.S. District Court in Delaware in 2012 and subsequently consolidated into one matter (the “Hendler-Delaware Case”). These matters involved the same claimants and claimsClaim that had been filed on March 29, 2016 with the Court of Queen’s Bench of Alberta, Canada (as case numbers 160600211 and 160600237) in ~~U.S. District Court~~which plaintiffs Harold Reed (“Reed,”), an applicator, and 819596 Alberta Ltd. dba Jem Holdings (“Jem”), an application equipment rental company, allege physical injury and damage to equipment, respectively, arising from a fire that occurred during an application of the Company’s potato sprout inhibitor, SmartBlock, at a potato storage facility in ~~Louisiana within~~Coaldale, Alberta, on April 2, 2014. Plaintiffs allege, among other things, that Amvac was negligent and failed to warn them of the ~~prior year (and~~risks of such application. Reed seeks damages of $250 for pain and suffering, while Jem seeks $60 in lost equipment; both plaintiffs also seek unspecified damages as well. Also during January 2017, counsel for Reed requested that counsel for the Company accept service of four related actions relating to the same incident and pending with the same court: (i) Van Giessen Growers, Inc. v Harold Reed et al (No. 160303906)(in which ~~we refer~~grower seeks $400 for loss of potatoes); (ii) James Houweling et al. v. Harold Reed et al. (No. 160104421)(in which equipment owner seeks damages for lost equipment); (iii) Chin Coulee Farms, etc. v. Harold Reed et al. (No. 150600545)(in which owner of potatoes and

truck seeks $530 for loss thereof); and (iv) Houweling Farms v. Harold Reed et al. (No. 15060881)(in which owner of several Quonset huts seeks damages for lost improvements, equipment and business income equal to ~~as the Hendler-Louisiana Cases)~~$4,300). ~~On August 21, 2012, the U.S. District Court~~The Company was subsequently served with complaints in these four actions during first quarter of 2017. The Company was not named in the ~~Hendler-Delaware case granted defendants’ motion~~original complaints in these four actions but has since been added in cross-claims by defendant Reed. In his cross claims, Reed also alleges that other cross-defendants were negligent for using highly flammable insulation and failing to ~~dismiss the actions with prejudice, finding that the same claimants and claims had been pending~~maintain sparking electrical fixtures in the ~~Hendler-Louisiana cases where they had been first filed.~~

~~In October 2012,~~storage units affected by the federal district court in Louisiana granted defendants’ motion for summary judgment and dismissed the Hendler-Louisiana Cases for plaintiffs’ failure to bring the action within the applicable statute of limitations. Plaintiffs appealed the dismissal of the Hendler-Louisiana cases and, on September 19, 2013, the Fifth Circuit Court of Appeal upheld the lower court’s decision, finding no reason to reverse the dismissal.

On September 2, 2016, the Third Circuit Court reversed the District Court decision, finding that it was not proper for the trial court to have dismissed these cases with prejudice even though the Louisiana courts had dismissed the same claims for expiration of the statute of limitations. In reaching its decision, the Third Circuit reasoned that no court had yet addressed the merits of the matter, that Delaware’s statute of limitations may differ from that of Louisiana, and that it would have been proper for the Delaware trial court to have dismissed the matter without prejudice (that is, with the right to amend and refile). Accordingly, the matter has been remanded to the U.S. District Court in Delaware.fire. The Company believes ~~the Hendler-Delaware case has no~~that plaintiffs’ and cross-plaintiffs’ claims against it are without merit and ~~further, that~~intends to defend these matters vigorously. At this stage in the proceedings, however, it is too early to determine whether a loss is ~~neither~~ probable ~~nor~~or reasonably estimable; accordingly, itthe Company has not recorded a loss contingency.

~~U.S. EPA RCRA/FIFRA Matter~~Walker v. AMVAC On or about ~~March 24, 2015, Region 4~~April 10, 2017, the Company was served with a summons and complaint that had been filed with the United State District Court for the Eastern District of Tennessee under the ~~USEPA issued to registrant’s principal operating subsidiary, AMVAC, an Opportunity to Show Cause (“OSC”) why USEPA should not take formal action under Section 3008(a)~~caption Larry L. Walker v. Amvac Chemical Corporation (as No. 4:17-cv-00017). Plaintiff seeks contract damages, correction of ~~the Resource Conservation~~inventorship, accounting and ~~Recovery Act (RCRA) for supposed noncompliance~~injunctive relief arising from AMVAC’s importation, transportation and storage of used, depleted Lock ‘N Load containers having residual amounts of its product Thimet. The scope of these discussions subsequently expanded to involve USEPA Region 5 and to include the importation of depleted Lock ‘N Load containers from Australia in October 2015 and full Lock ‘N Load containers from Canada in January 2016. On or about March 25, 2016, USEPA Region 5 issued a Stop Sale, Use or Removal Order (“SSURO”) ordering AMVAC to cease the distribution or sale of US Thimet 20G, Canadian Thimet 15G and Australian Thimet 200G on the grounds that the importation of both depleted and full containers of Thimet and the subsequent use of their contents was allegedly inconsistent with FIFRA. After hosting a plant inspection by Regions 4 and 5 and providing documentation to the agency, AMVAC requested and received relief from the SSURO in the form of eight amendments. As a consequence of this relief, the Company had adequate inventory to meet customers’ needs for the ~~2016 season.~~

~~In the course~~Company’s alleged misuse of ~~its investigation, the agency has also pointed out alleged anomalies relating~~his confidential information to the Company’s confidential statements of formula relating to the use of certain inert materials in formulation. USEPA’s Region 5 has expressed its intention to bring an enforcement action relating to its overall findings. AMVAC believessupport a patent application (which was subsequently issued) for a post-harvest corn herbicide that it has lawfully imported Thimet from Canada and Australia for the purpose of potentially refilling, reprocessing or properly disposing of them. Further, the Company believes that it has carried out its Thimet business in good faith, maintained a focus on product stewardship and, in the process, did not pose any increased risk of harm to human health or the environment. On October 11, 2016, the Company met with USEPA’s Office of Enforcement and Compliance (as well as with Regions 4 and 5) to clarify a path forward to ensure future compliance. However, the Company has not ~~yet received a final position from USEPA with regard~~commercialized. Plaintiff claims further that he, not the Company, should be identified as the inventor in such application. The Company believes that these claims are without merit and intends to ~~past acts, and, at~~defend vigorously. At this stage in the proceedings, it is too early to ~~tell~~determine whether a loss ~~arising from either the OSC or SSURO~~ is probable or reasonably ~~estimable. Accordingly,~~estimable; accordingly, the Company has not recorded a loss ~~contingency on this matter.~~

The Company continually re-assesses the business risks, and as part of that process detailed a range of risk factors in the disclosures in American Vanguard’s Report on Form 10-K for the fiscal year ended December 31, ~~2015,~~2016, filed on March ~~2, 2016.~~7, 2017. In preparing this document, we have reviewed all the risk factors included in that document and ~~believe~~find that there are no material changes to those risk factors.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Delaware	95-2588080
(State or other jurisdiction of Incorporation or organization)	(I.R.S. Employer Identification Number)

4695 MacArthur Court, Newport Beach, California	92660
(Address of principal executive offices)	(Zip Code)

Large Accelerated Filer	☐		Accelerated Filer	☒
Non-Accelerated Filer	☐	(Do not check if a small reporting company)	Smaller reporting company	☐
Emerging growth company	☐

		Page Number
PART I—FINANCIAL INFORMATION

Item 1.	Financial Statements (unaudited)

	Condensed Consolidated Statements of Operations for the three months ended March 31, 2017 and ~~nine months ended September 30,~~ 2016 ~~and 2015~~	3

	~~Condensed Consolidated Balance Sheets as of September 30, 2016 and December 31, 2015~~	4

	~~Condensed Consolidated Statements of Stockholders’ Equity for the three months ended March 31, 2016, June 30, 2016, and September 30, 2016~~	5

	Condensed Consolidated Statements of Comprehensive Income for the three months ended March 31, 2017 and ~~nine~~2016	4

	Condensed Consolidated Balance Sheets as of March 31, 2017 and December 31, 2016	5

	Condensed Consolidated Statement of Stockholders’ Equity for the three months ended ~~September 30, 2016 and 2015~~March 31, 2017	6

	Condensed Consolidated Statements of Cash Flows for the ~~nine~~three months ended ~~September 30,~~March 31, 2017 and 2016 ~~and 2015~~	7

	Notes to Condensed Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2017

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2923

Item 4.	Controls and Procedures	2923

PART II—OTHER INFORMATION		3023

Item 1.	Legal Proceedings	3023

Item 6.	Exhibits	3124

SIGNATURES		3225

	September 30, 2016			December 31, 2015			March 31, 2017			December 31, 2016
Land	$	2,458		$	2,458		$	2,458		$	2,458
Buildings and improvements		15,067			14,726			16,451			15,515
Machinery and equipment		117,140			113,506			105,018			102,146
Office furniture, fixtures and equipment		4,857			4,997			5,233			5,016
Automotive equipment		383			491			442			387
Construction in progress		5,398			3,413			5,872			8,047
		145,303			139,591
Total gross value								135,474			133,569
Less accumulated depreciation		(97,543	)		(91,619	)		(84,049	)		(83,274	)
	$	47,760		$	47,972
Total net value							$	51,425		$	50,295

	September 30, 2016		December 31, 2015		March 31, 2017		December 31, 2016
Finished products	$	123,311	$	120,456	$	103,440	$	103,832
Raw materials		18,367		16,021		18,839		16,744
	$	141,678	$	136,477	$	122,279	$	120,576

	Three Months Ended September 30				Nine Months Ended September 30				Three Months Ended March 31
	2016		2015		2016		2015		2017		2016
Net sales:
Insecticides	$	25,478	$	23,539	$	89,496	$	85,484	$	37,942	$	33,106
Herbicides/soil fumigants/fungicides		34,242		32,682		80,009		71,973		20,021		24,685
Other, including plant growth regulators		13,328		7,420		23,148		23,497		3,392		3,277
Crop		73,048		63,641		192,653		180,954
Net sales:										61,355		61,068
Non-crop		9,399		8,845		31,992		24,620		9,318		8,406
Total net sales	$	82,447	$	72,486	$	224,645	$	205,574
Total net sales:									$	70,673	$	69,474
Net sales:
US	$	60,033	$	53,167	$	161,661	$	146,231	$	52,244	$	49,855
International		22,414		19,319		62,984		59,343		18,429		19,619
Total net sales	$	82,447	$	72,486	$	224,645	$	205,574
Total net sales:									$	70,673	$	69,474

Declaration Date	Record Date	Distribution Date	Dividend Per Share		Total Paid
June 13, 2016	June 30, 2016	July 12, 2016	$	0.01	$	289
March 16, 2015	April 3, 2015	April 17, 2015	$	0.02	$	572
December 11, 2014	December 26, 2014	January 9, 2015	$	0.02	$	569

	Three Months Ended September 30				Nine Months Ended September 30				Three Months Ended March 31,
	2016		2015		2016		2015		2017		2016
Numerator:
Net income attributable to AVD	$	2,877	$	2,772	$	8,917	$	3,604	$	3,452	$	2,794
Denominator:
Weighted average shares outstanding-basic		28,957		28,753		28,886		28,653
Denominator (in thousands):
Weighted averages shares outstanding-basic										28,947		28,808
Dilutive effect of stock options and grants		539		536		499		555		707		499
		29,496		29,289		29,385		29,208		29,654		29,307

Indebtedness	September 30, 2016								December 31, 2015
$000’s	Long- term			Short- term		Total			Long- term			Short- term		Total
Long-term indebtedness ($000's)																	March 31, 2017			December 31, 2016
Revolving line of credit	$	45,000		$	—	$	45,000		$	69,000		$	—	$	69,000		$	30,400		$	41,400
Deferred loan fees		(512	)		—		(512	)		(679	)		—		(679	)		(407	)		(449	)
Notes payable		—			—		—			—			55		55
Total indebtedness	$	44,488		$	—	$	44,488		$	68,321		$	55	$	68,376		$	29,993		$	40,951

	Incentive Stock Option Plans			Weighted Average Price Per Share		Exercisable Weighted Average Price Per Share		Incentive Stock Option Plans			Weighted Average Price Per Share		Exercisable Weighted Average Price Per Share
Balance outstanding, December 31, 2015		626,845		$	9.25	$	7.73
Balance outstanding, December 31, 2016									541,905		$	9.33	$	7.97
Options exercised		(25,500	)		7.50				(15,000	)		7.50		—
Options forfeited		(9,813	)		11.49				(3,919	)		11.49		—
Balance outstanding, March 31, 2016		591,532		$	9.29	$	7.84
Options exercised		(12,900	)		7.50
Options forfeited		(5,000	)		11.49
Balance outstanding, June 30, 2016		573,632		$	9.31	$	7.85
Options exercised		(15,500	)		7.50
Options forfeited		(11,118	)		11.49
Balance outstanding, September 30, 2016		547,014		$	9.31	$	7.87
Balance outstanding, March 31, 2017									522,986		$	9.37	$	7.99

	Outstanding Weighted Average						Exercisable Weighted Average				Outstanding Weighted Average						Exercisable Weighted Average
Exercise Price Per Share	Shares		Remaining Life (Months)		Exercise Price		Shares		Exercise Price		Shares		Remaining Life (Months)		Exercise Price		Shares		Exercise Price
Incentive Stock Option Plan:
$7.50		303,350		50	$	7.50		303,350	$	7.50		283,350		44	$	7.5		283,350	$	7.50
$11.32—$11.49		243,664		95	$	11.57		25,507	$	12.28
$11.32—$14.49												239,636		89	$	11.57		34,334	$	12.07
		547,014			$	9.31		328,857	$	7.87		522,986			$	9.37		317,684	$	7.99

	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Months)		Intrinsic Value (thousands)
As of September 30, 2016:
Incentive Stock Option Plans:
As of March 31, 2017									Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Months)		Intrinsic Value (thousands)
Incentive Stock Option Plan:
Outstanding		547,014	$	9.31		70	$	3,690		522,986	$	9.37		65	$	3,783
Expected to Vest		540,064	$	9.29		70	$	3,658		518,897	$	9.35		65	$	3,762
Exercisable		328,857	$	7.87		51	$	2,693		317,684	$	7.99		47	$	2,734

	Total
Balance, December 31, 2015	$	(3,541	)
FX translation		(1,310	)
Balance, December 31, 2016		(4,851	)
FX translation		757
Balance, March 31, 2017	$	(4,094	)

	Q1 2017								Q1 2016
	Average Debt		Interest Expense			Interest Rate			Average Debt		Interest Expense			Interest Rate
Revolving line of credit (average)	$	44,217	$	258			2.3	%	$	76,227	$	482			2.5	%
Notes payable		—		—			—			44		—			—
Amortization of deferred loan fees		—		62			—			—		63			—
Amortization of other deferred liabilities		—		9			—			—		10			—
Other interest expense		—		7			—			—		—			—
Subtotal	$	44,217	$	336			3.0	%	$	76,271	$	555			2.9	%
Capitalized interest		—		(38	)		—			—		(14	)		—
Total	$	44,217	$	298			2.7	%	$	76,271	$	541			2.8	%

For the Nine Months Ended September 30, 2015
Balance, December 31, 2014	$	(1,970	)
Other comprehensive loss		(248	)
Balance, March 31, 2015	$	(2,218	)
Other comprehensive loss		(323	)
Balance, June 30, 2015	$	(2,541	)
Other comprehensive loss		(897	)
Balance, September 30, 2015	$	(3,438	)

	2017		2016		Change			% Change
Selling	$	6,706	$	6,241	$	465			7	%
General and administrative		7,704		7,328		376			5	%
Research, product development and regulatory		5,697		4,457		1,240			28	%
Freight, delivery and warehousing		4,844		4,847		(3	)		0	%
	$	24,951	$	22,873	$	2,078			9	%

	Q3 2016								Q3 2015
	Average Debt		Interest Expense			Interest Rate			Average Debt		Interest Expense			Interest Rate
Average revolving line of credit	$	44,617	$	241			2.2	%	$	88,826	$	498			2.2	%
Notes payable		9		—			—			10,081		101			—
Amortization of deferred loan fees		—		62			—			—		62			—
Amortization of other deferred liabilities		—		9			—			—		29			—
Other interest expense		—		11			—			—		10			—
Subtotal	$	44,626	$	323			2.9	%	$	98,907	$	700			2.8	%
Capitalized interest		—		(22	)		—			—		(62	)		—
Total	$	44,626	$	301			2.7	%	$	98,907	$	638			2.6	%

	Nine months ended September 30, 2016								Nine months ended September 30, 2015
	Average Debt		Interest Expense			Interest Rate			Average Debt		Interest Expense			Interest Rate
Average revolving line of credit	$	63,949	$	1,098			2.3	%	$	100,292	$	1,541			2.0	%
Notes payable		27		1			—			5,834		170			—
Interest Income		—		(1	)		—			—		(1	)		—
Amortization of deferred loan fees		—		187			—			—		228			—
Amortization of other deferred liabilities		—		28			—			—		114			—
Other interest expense		—		36			—			—		38			—
Subtotal	$	63,976	$	1,349			2.8	%	$	106,126	$	2,090			2.6	%
Capitalized interest		—		(45	)		—			—		(149	)		—
Total	$	63,976	$	1,304			2.7	%	$	106,126	$	1,941			2.4	%

Exhibit No.		Description

31.1		Certification of Chief Executive Officer Pursuant to Section 302 of The Sarbanes-Oxley Act of 2002.

31.2		Certification of Chief Financial Officer Pursuant to Section 302 of The Sarbanes-Oxley Act of 2002.

32.1		Certification Pursuant to Section 906 of The Sarbanes-Oxley Act of 2002.

101		The following materials from American Vanguard Corp’s Quarterly Report on Form 10-Q for the quarter ended ~~September 30, 2016,~~March 31, 2017, formatted in XBRL (Extensible Business Reporting Language): (i) Condensed ~~Consolidated~~consolidated Statements of Operations; (ii) Condensed ~~Consolidated~~consolidated Statements of Comprehensive Income; (iii) Condensed consolidated Balance Sheets; ~~(iii)~~(iv) Condensed ~~Consolidated~~consolidated Statements of Stockholders’ Equity; ~~(iv) Condensed Consolidated Statements of Comprehensive Income;~~ (v) Condensed ~~Consolidated~~consolidated Statements of Cash Flows; and (vi) Notes to Condensed ~~Consolidated~~consolidated Financial Statements, tagged as blocks of text.

	american vanguard corporation

Dated: ~~November 2, 2016~~May 4, 2017	~~BY:~~By:	/s/ eric g. wintemute
		Eric G. Wintemute
		Chief Executive Officer and Chairman of the Board

Dated: ~~November 2, 2016~~May 4, 2017	~~BY:~~By:	/s/ david t. johnson
		David T. Johnson
		Chief Financial Officer & Principal Accounting Officer