~~(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, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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—~~29,794,607~~30,163,787 shares as of ~~October 26, 2017.~~

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,						For the three months ended March 31
	2017		2016		2017			2016			2020			2019
Net sales	$	89,975	$	82,447	$	238,553		$	224,645		$	95,962		$	99,676
Cost of sales		51,943		49,461		136,102			132,761			57,581			57,974
Gross profit		38,032		32,986		102,451			91,884			38,381			41,702
Operating expenses		31,570		28,286		84,175			77,429			36,545			34,800
Operating income		6,462		4,700		18,276			14,455			1,836			6,902
Interest expense, net		375		301		1,073			1,304			1,508			1,612
Income before provision for income taxes and loss on equity method investments		6,087		4,399		17,203			13,151
Income tax expense		1,954		1,378		5,015			3,672
Income before loss on equity method investments		4,133		3,021		12,188			9,479
Loss from equity method investments		115		180		226			309
Income before provision for income taxes (benefit) and loss on equity method investment												328			5,290
Income tax (benefit) expense												(205	)		1,360
Income before loss on equity method investment												533			3,930
Loss from equity method investment												13			24
Net income		4,018		2,841		11,962			9,170		$	520		$	3,906
Income (loss) attributable to non-controlling interest		71		36		(117	)		(253	)
Net income attributable to American Vanguard	$	4,089	$	2,877	$	11,845		$	8,917
Earnings per common share—basic	$	.14	$	.10	$	.41		$	.31		$	0.02		$	0.13
Earnings per common share—assuming dilution	$	.14	$	.10	$	.40		$	.30		$	0.02		$	0.13
Weighted average shares outstanding—basic		29,193		28,957		29,064			28,886			29,288			28,977
Weighted average shares outstanding—assuming dilution		29,783		29,496		29,648			29,385			29,948			29,579

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,						For the three months ended March 31
	2017			2016			2017			2016			2020			2019
Net income	$	4,018		$	2,841		$	11,962		$	9,170		$	520		$	3,906
Comprehensive income:
Foreign currency translation adjustment		(67	)		(436	)		970			(888	)		(9,063	)		(1,769	)
Comprehensive income		3,951			2,405			12,932			8,282
Income (loss) attributable to non-controlling interest		71			36			(117	)		(253	)
Comprehensive income attributable to American Vanguard	$	4,022		$	2,441		$	12,815		$	8,029
Comprehensive income (loss)													$	(8,543	)	$	2,137

		September 30, 2017			December 31, 2016				March 31, 2020			December 31, 2019
Current assets:
Cash and cash equivalents		$	9,045		$	7,869			$	5,544		$	6,581
Receivables:
Trade, net of allowance for doubtful accounts of $45 and $42, respectively			100,043			83,777
Trade, net of allowance for doubtful accounts of $2,606 and $2,297, respectively										141,509			136,075
Other			3,630			3,429				13,134			16,949
Total receivables, net			103,673			87,206				154,643			153,024
Inventories			123,315			120,576				175,861			163,313
Prepaid expenses			13,543			11,424				11,149			10,457
Income taxes receivable										3,406			2,824
Total current assets			249,576			227,075				350,603			336,199
Property, plant and equipment, net			49,495			50,295				57,599			56,521
Operating lease right-of-use assets										10,731			11,258
Intangible assets, net of applicable amortization			141,127			121,433				193,823			198,377
Goodwill										41,974			46,557
Other assets			28,917			31,153				19,511			21,186
		$	469,115		$	429,956
Total assets									$	674,241		$	670,098

LIABILITIES AND STOCKHOLDERS’ EQUITY	LIABILITIES AND STOCKHOLDERS’ EQUITY							LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current installments of other liabilities		$	99		$	26			$	227		$	1,513
Accounts payable			29,355			24,358				64,333			64,881
Deferred revenue			—			3,848				4,448			6,826
Accrued program costs			65,650			42,930				53,696			47,699
Accrued expenses and other payables			8,704			12,072				11,720			12,815
Income taxes payable			1,684			13,840
Operating lease liabilities, current										4,883			4,904
Total current liabilities			105,492			97,074				139,307			138,638
Long-term debt, net of deferred loan fees			57,379			40,951
Long-term debt, net										168,225			148,766
Operating lease liabilities, long term										5,996			6,503
Other liabilities, excluding current installments			2,789			2,868				10,963			12,890
Deferred income tax liabilities			6,712			6,706				15,543			19,145
Total liabilities			172,372			147,599				340,034			325,942
Commitments and contingent liabilities
Stockholders' equity:
Preferred stock, $.10 par value per share; authorized 400,000 shares; none issued			—			—				—			—
Common stock, $.10 par value per share; authorized 40,000,000 shares; issued 32,236,629 shares at September 30, 2017 and 31,819,695 shares at December 31, 2016			3,224			3,183
Common stock, $.10 par value per share; authorized 40,000,000 shares; issued 33,188,421 shares at March 31, 2020 and 33,233,614 shares at December 31, 2019										3,319			3,324
Additional paid-in capital			74,423			71,699				89,757			90,572
Accumulated other comprehensive loss			(3,881	)		(4,851	)			(14,761	)		(5,698	)
Retained earnings			230,962			220,428				274,052			274,118
			304,728			290,459
Less treasury stock at cost, 2,450,634 shares at September 30, 2017 and December 31, 2016			(8,269	)		(8,269	)
American Vanguard Corporation stockholders’ equity			296,459			282,190
Non-controlling interest			284			167
Less treasury stock at cost, 3,061,040 shares at March 31, 2020 and December 31, 2019										(18,160	)		(18,160	)
Total stockholders’ equity			296,743			282,357				334,207			344,156
		$	469,115		$	429,956
Total liabilities and stockholders' equity									$	674,241		$	670,098

For The Three ~~and Nine~~ Months Ended ~~September 30, 2017~~March 31, 2020 and March 31, 2019

	Common Stock					Additional			Accumulated Other						Treasury Stock								Non-						Common Stock															Treasury Stock
	Shares			Amount		Paid-in Capital			Comprehensive Loss			Retained Earnings			Shares		Amount			AVD Total			Controlling Interest			Total			Shares			Amount			Additional Paid-in Capital			Accumulated Other Comprehensive Loss			Retained Earnings			Shares		Amount			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
Balance, December 31, 2019																														33,233,614		$	3,324		$	90,572		$	(5,698	)	$	274,118			3,061,040	$	(18,160	)	$	344,156
Stocks issued under ESPP		16,349			2		248			—			—			—		—			250			—			250			22,776			2			350			—			—			—		—			352
Cash dividends on common stock ($0.015 per share)		—			—		—			—			(435	)		—		—			(435	)		—			(435	)
Cash dividends on common stock ($0.02 per share)																														—			—			—			—			(586	)		—		—			(586	)
Foreign currency translation adjustment, net		—			—		—			757			—			—		—			757			—			757			—			—			—			(9,063	)		—			—		—			(9,063	)
Stock based compensation		—			—		1,080			—			—			—		—			1,080			—			1,080			—			—			1,357			—			—			—		—			1,357
Stock options exercised; grants, termination and vesting of restricted stock units (net of shares in lieu of taxes)		377,916			37		16			—			—			—		—			53			—			53			(67,969	)		(7	)		(2,522	)		—			—			—		—			(2,529	)
Net income		—			—		—			—			3,452			—		—			3,452			(39	)		3,413			—			—			—			—			520			—		—			520
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
Cash dividends on common stock ($0.015 per share)		—			—		—			—			(437	)		—		—			(437	)		—			(437	)
Balance, March 31, 2020																														33,188,421		$	3,319		$	89,757		$	(14,761	)	$	274,052			3,061,040	$	(18,160	)	$	334,207

Balance, December 31, 2018																														32,752,827		$	3,276		$	83,177		$	(4,507	)	$	262,840			2,902,992	$	(15,556	)	$	329,230
Stocks issued under ESPP																														22,441			2			336			—			—			—		—			338
Cash dividends on common stock ($0.02 per share)																														—			—			—			—			(580	)		—		—			(580	)
Foreign currency translation adjustment, net		—			—		—			280			—			—		—			280			—			280			—			—			—			(1,769	)		—			—		—			(1,769	)
Stock based compensation		—			—		1,242			—						—		—			1,242			—			1,242			—			—			1,485			—			—			—		—			1,485
Stock options exercised; grants, termination and vesting of restricted stock units (net of shares in lieu of taxes)		(1,836	)		—		(1,517	)		—			—			—		—			(1,517	)		—			(1,517	)		419,295			42			(930	)		—			—			—		—			(888	)
Shares repurchased																														—			—			—			—			—			158,048		(2,604	)		(2,604	)
Net income		—			—		—			—			4,304			—		—			4,304			227			4,531			—			—			—			—			3,906			—		—			3,906
Balance, June 30, 2017		32,212,124			3,222		72,768			(3,814	)		227,312			2,450,634		(8,269	)		291,219			355			291,574
Stocks issued under ESPP		17,667			2		303			—			—			—		—			305			—			305
Cash dividends on common stock ($0.015 per share)		—			—		—			—			(439	)		—		—			(439	)		—			(439	)
Foreign currency translation adjustment, net		—			—		—			(67	)		—			—		—			(67	)		—			(67	)
Stock based compensation		—			—		1,263			—			—			—		—			1,263			—			1,263
Stock options exercised; grants, termination and vesting of restricted stock units (net of shares in lieu of taxes)		6,838			—		89			—			—			—		—			89			—			89
Net income		—			—		—			—			4,089			—		—			4,089			(71	)		4,018
Balance, September 30, 2017		32,236,629		$	3,224	$	74,423		$	(3,881	)	$	230,962			2,450,634	$	(8,269	)	$	296,459		$	284		$	296,743
Balance, March 31, 2019																														33,194,563		$	3,320		$	84,068		$	(6,276	)	$	266,166			3,061,040	$	(18,160	)	$	329,118

	For the Nine Months Ended September 30,						For the three months ended March 31
	2017			2016			2020			2019
Cash flows from operating activities:
Net income	$	11,962		$	9,170		$	520		$	3,906
Adjustments to reconcile net income to net cash provided by operating activities:
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization of fixed and intangible assets		12,358			12,367			4,762			4,609
Amortization of other long term assets		3,995			3,935
Amortization of other long-term assets and debt issuance costs								1,026			1,082
Amortization of discounted liabilities		20			28			4			—
Provision for bad debts								359			1,034
Revision of deferred compensation								—			(1,543	)
Stock-based compensation		3,585			1,656			1,357			1,485
Excess tax benefit from exercise of stock options		—			(82	)
Increase in deferred income taxes		6			—
Decrease in deferred income taxes								(910	)		(742	)
Loss from equity method investment		226			309			13			24
Net foreign currency adjustment								823			172
Changes in assets and liabilities associated with operations:
Increase in net receivables		(15,746	)		(19,202	)
Decrease (increase) in net receivables								(5,472	)		6,812
Increase in inventories		(2,213	)		(5,201	)		(16,446	)		(23,763	)
Increase in prepaid expenses and other assets		(3,678	)		(1,011	)		(776	)		(2,724	)
(Decrease) increase in income tax receivable/payable, net		(12,137	)		1,519
Increase in accounts payable		4,556			7,925
Decrease (increase) in income tax receivable/payable, net								(597	)		750
(Decrease) increase in accounts payable								(189	)		4,788
Decrease in deferred revenue		(3,848	)		(8,847	)		(2,342	)		(16,036	)
Increase in accrued program costs		22,720			30,536			6,016			2,391
(Decrease) increase in other payables and accrued expenses		(3,562	)		3,098
Net cash provided by operating activities		18,244			36,200
Decrease in other payables and accrued expenses								(2,094	)		(2,508	)
Net cash used in by operating activities								(13,946	)		(20,263	)
Cash flows from investing activities:
Capital expenditures		(5,333	)		(6,122	)		(2,980	)		(3,369	)
Investment		(950	)		(3,283	)
Acquisition of product lines and other intangible assets		(25,904	)		(224	)
Acquisitions of businesses, product lines and intangible assets								—			(24,246	)
Net cash used in investing activities		(32,187	)		(9,629	)		(2,980	)		(27,615	)
Cash flows from financing activities:
Payments under line of credit agreement		(59,025	)		(24,000	)
Borrowings under line of credit agreement		76,000			—
Payments on other long-term liabilities		(26	)		(541	)
Tax benefit from exercise of stock options		—			82
Net payments from the issuance of common stock (sale of stock under ESPP, exercise of stock options, and shares purchased for tax withholding)		(820	)		204
Net borrowings under line of credit agreement								19,400			52,600
Net payments from the issuance of common stock (sale of stock under ESPP, exercise of stock options, and shares purchased for tax withholdings)								(2,177	)		(550	)
Repurchase of common stock								—			(2,604	)
Payment of cash dividends		(1,161	)		(289	)		(582	)		(581	)
Net cash provided by (used in) financing activities		14,968			(24,544	)
Net increase in cash and cash equivalents		1,025			2,027
Net cash provided by financing activities								16,641			48,865
Net (decrease) increase in cash and cash equivalents								(285	)		987
Effect of exchange rate changes on cash and cash equivalents		151			(957	)		(752	)		(498	)
Cash and cash equivalents at beginning of period		7,869			5,524			6,581			6,168
Cash and cash equivalents at end of period	$	9,045		$	6,594		$	5,544		$	6,657
Non-cash investing activities:
Deferred consideration in connection with business acquisitions:							$	—		$	2,645

1. The accompanying unaudited condensed consolidated financial statements of American Vanguard Corporation and Subsidiaries (“AVD” or “the 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 notes required by 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 ~~nine~~three months ended ~~September 30, 2017~~March 31, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2017. For further~~2020. The financial statements and related notes do not include all information ~~refer to~~and footnotes required by US GAAP for annual reports. This quarterly report should be read in conjunction with the consolidated financial statements ~~and notes thereto~~ included in the Company’s ~~Annual Report~~annual report on Form 10-K for the year ended December 31, ~~2016.~~2019.

The Company is closely monitoring the impact of the novel coronavirus (COVID-19) pandemic on all aspects of its business, including how the pandemic will impact its customers, business partners, and employees. The Company is considered an essential business by most governments in the jurisdictions and territories in which the Company operates and, as a result, did not incur significant disruptions from the COVID-19 pandemic during the three months ended March 31, 2020. However, the Company is unable to predict the impact that the pandemic may have on its future financial condition, results of operations and cash flows due to numerous uncertainties. The extent to which the COVID-19 pandemic impacts the Company’s operations and those of its customers in the near term will depend on future developments, which are highly uncertain and cannot be predicted with confidence. The Company continues to monitor its business for adverse impacts of the pandemic, including volatility in the foreign exchange markets, demand, supply-chain disruptions in certain markets, and increased costs of employee safety, among others.

On January 1, 2020, the Company adopted Accounting Standards Update (“ASU”) 2016-13, “Financial Instruments – Credit Losses (Topic 326)”, along with related clarifications and improvements. As a result, we updated our significant accounting policies for the measurement of credit losses below. Refer to Note 15 “Recent Accounting Standards” for further information related to the Company's adoption of this standard.

Allowance for Credit Losses – The Company maintains an allowance for credit losses to cover its Current Expected Credit Losses ("CECL") on its trade receivables, other receivables and contract assets arising from the failure of customers to make contractual payments. The Company estimates credit losses expected over the life of its trade receivables and contract assets based on historical information combined with current conditions that may affect a customer’s ability to pay and reasonable and supportable forecasts. In most instances, the Company’s policy is to write-off trade receivables when they are deemed uncollectible. The vast majority of the Company's trade receivables are less than 365 days.

Under the CECL impairment model, the Company develops and documents its allowance for credit losses on its trade receivables based on multiple portfolios. The determination of portfolios are based primarily on geographical location, type of customer and aging.

2. Leases— The Company has operating leases for warehouses, manufacturing facilities, offices, cars, railcars and certain equipment. The lease term includes the non-cancellable period of the lease plus any additional periods covered by either an option to extend (or not terminate) that the Company is reasonably certain to exercise. The Company has leases with a lease term ranging from 1 year to 20 years.

Finance leases are immaterial to the condensed consolidated financial statements. There were no lease transactions with related parties as of March 31, 2020.

The operating lease expense for the three months ended March 31, 2020 and 2019 was $1,395 and $1,227, respectively. Lease expenses related to variable lease payments and short-term leases were immaterial. Other information related to operating leases follows:

Future minimum lease payments under non-cancellable operating leases as of March 31, 2020 were as follows:

3. Revenue Recognition—The Company recognizes revenue from the sale of its products, which include crop and non-crop products. The Company sells its products to customers, which include distributors, retailers, and growers. In addition, the Company recognizes royalty income from licensing agreements. Based on similar economic and operational characteristics, the Company’s business is aggregated into one reportable segment. Selective enterprise information of sales disaggregated by category and geographic region is as follows:

Performance Obligations—A performance obligation is a promise in a contract or sales order to transfer a distinct good or service to the customer and is the unit of account in ASC 606. A transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. Certain of the Company’s sales orders have multiple performance obligations, as the promise to transfer individual goods or services is separately identifiable from other promises in the sales orders. For sales orders with multiple performance obligations, the Company allocates the sales order’s transaction price to each performance obligation based on its relative stand-alone selling price. The stand-alone selling prices are determined based on the prices at which the Company separately sells these products. The Company’s performance obligations are satisfied either at a point in time or over time as work progresses.

Contract Balances—The timing of revenue recognition, billings and cash collections may result in deferred revenue. The Company sometimes receives payments from its customers in advance of goods and services being provided in return for early cash incentive programs, resulting in deferred revenues. These liabilities are reported on the condensed consolidated balance sheet at the end of each reporting period. The contract assets in the table below are related to royalties earned on certain licenses granted for the use of the Company’s intellectual property, which are recognized at a point in time and remain outstanding as well as customized products without an alternative use.

Revenue recognized for the three months ended March 31, 2020, that was included in the deferred revenue balance at the beginning of 2020 was $2,378. The Company expects to recognize all its remaining deferred revenue in fiscal 2020.

4. Property, plant and equipment at ~~September 30, 2017~~March 31, 2020 and December 31, ~~2016~~2019 consists of the following:

	September 30, 2017			December 31, 2016			March 31, 2020			December 31, 2019
Land	$	2,458		$	2,458		$	2,706		$	2,706
Buildings and improvements		16,610			15,515			18,293			18,640
Machinery and equipment		106,641			102,146			116,915			116,757
Office furniture, fixtures and equipment		4,701			5,016			6,331			6,228
Automotive equipment		398			387			1,565			1,762
Construction in progress		2,220			8,047			8,028			5,263
Total gross value		133,028			133,569
Total								153,838			151,356
Less accumulated depreciation		(83,533	)		(83,274	)		(96,239	)		(94,835	)
Total net value	$	49,495		$	50,295
Property, plant and equipment, net							$	57,599		$	56,521

The Company recognized depreciation expense related to property ~~plant~~ and equipment of ~~$2,033~~$1,517 and ~~$2,021~~$1,648 for the three months ended ~~September 30, 2017~~March 31, 2020 and ~~2016,~~2019, respectively. During the three months ended ~~September 30, 2017~~March 31, 2020 and ~~2016,~~2019, the Company eliminated from assets and accumulated depreciation ~~$1,126~~$113 and ~~$285, respectively, of fully depreciated assets.~~

The Company recognized depreciation expense related to property, plant and equipment of $6,112 and $6,334 for the nine months ended September 30, 2017 and 2016, respectively. During the nine months ended September 30, 2017 and 2016, the Company eliminated from assets and accumulated depreciation $5,884 and $410,$710, respectively, of fully depreciated assets.

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

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

	September 30, 2017		December 31, 2016		March 31, 2020		December 31, 2019
Finished products	$	107,966	$	103,832	$	161,788	$	151,917
Raw materials		15,349		16,744		14,073		11,396
	$	123,315	$	120,576
Inventories					$	175,861	$	163,313

~~As of September 30, 2017, we believe our inventories are valued at lower of cost or market.~~

In July 2015, Financial Accounting Standards Board (“FASB”) issued Accounting Standards Codification (“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.

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

	Three Months Ended September 30,				Nine Months Ended September 30,				For the three Months Ended March 31
	2017		2016		2017		2016		2020			2019			Change			% Change
Net sales:
Insecticides	$	24,866	$	25,478	$	102,249	$	89,496
Herbicides/soil fumigants/fungicides		32,717		34,242		68,783		80,009
Other, including plant growth regulators		17,191		13,328		30,680		23,148
Net sales:		74,774		73,048		201,712		192,653
Non-crop		15,201		9,399		36,841		31,992
Total net sales:	$	89,975	$	82,447	$	238,553	$	224,645
Net sales:
US	$	65,842	$	60,033	$	173,877	$	161,661
US crop									$	50,362		$	50,270		$	92			0	%
US non-crop										10,993			11,267			(274	)		-2	%
Total US										61,355			61,537			(182	)		0	%
International		24,133		22,414		64,676		62,984		34,607			38,139			(3,532	)		-9	%
Total net sales:	$	89,975	$	82,447	$	238,553	$	224,645	$	95,962		$	99,676		$	(3,714	)		-4	%
Gross profit:
US crop									$	24,245		$	23,822		$	423			2	%
US non-crop										4,719			5,846			(1,127	)		-19	%
Total US										28,964			29,668			(704	)		-2	%
International										9,417			12,034			(2,617	)		-22	%
Total gross profit:									$	38,381		$	41,702		$	(3,321	)		-8	%
Gross margin:
US crop										48	%		47	%
US non-crop										43	%		52	%
Total US										47	%		48	%
International										27	%		32	%
Gross margin:										40	%		42	%

5.7. Accrued Program Costs—~~In accordance with FASB ASC 605, the Company classifies amounts expected to be paid to its customers as a reduction of sales revenues.~~ The Company ~~describes these payments as “Programs.” Programs are~~offers various discounts to customers based on the volume purchased within a critical part of doing business in both the US agricultural and non-crop chemicals market places. For accounting purposes, programs are recorded as a reduction in gross sales and include market discounts from gross sales,defined time period, other pricing adjustments, some grower volume incentives or other key performance indicator driven payments made to distributors, retailers or growers, at the end of a growing season. The Company describes these payments as “Programs.” Programs are a critical part of doing business in both the US crop and US non-crop chemicals market. These discount Programs represent variable consideration. In accordance with ASC 606, revenues from sales are recorded at the net sales price, which is the transaction price net of the impact of Programs and includes estimates of variable consideration. Variable consideration includes amounts expected to be paid to its customers estimated using the expected value method. Each quarter management compares individual sale transactions with ~~programs~~Programs to determine what, if any, ~~program liability has~~estimated Program liabilities have 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~~Program balance and, for volume driven payments, make assessments of whether or not customers are tracking in a manner that indicates that they will meet the requirements set out in agreed upon terms and conditions attached to each Program. Following this assessment, management ~~will make~~makes adjustments 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, or close to, 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. No significant changes in estimates were made during the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2020 and ~~2016,~~2019, respectively.

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

7.9. ASC 260 Earnings Per Share (“EPS”) requires dual presentation of basic EPS and diluted EPS on the face of 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, ~~consists~~consist of options to purchase shares of the Company’s common stock, are exercised.

	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended March 31,
	2017		2016		2017		2016		2020		2019
Numerator:
Net income attributable to AVD	$	4,089	$	2,877	$	11,845	$	8,917
Denominator: (in thousands)
Net income									$	520	$	3,906
Denominator:
Weighted average shares outstanding-basic		29,193		28,957		29,064		28,886		29,288		28,977
Dilutive effect of stock options and grants		590		539		584		499		660		602
		29,783		29,496		29,648		29,385
Weighted average shares outstanding-diluted										29,948		29,579

For the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2020 and ~~2016,~~2019, no stock options were excluded from the computation of diluted earnings per share.

8.10. The Company has a revolving line of credit that is shown as long-term debt in the condensed consolidated balance sheets at ~~September 30, 2017~~March 31, 2020 and December 31, ~~2016.~~2019. The Company has no ~~short term~~short-term debt as of ~~September 30, 2017~~March 31, 2020 and December 31, ~~2016. These are~~2019. The debt is summarized in the following table:

Long-term indebtedness ($000's)	September 30, 2017			December 31, 2016			March 31, 2020			December 31, 2019
Revolving line of credit	$	58,375		$	41,400		$	168,700		$	149,300
Deferred loan fees		(996	)		(449	)		(475	)		(534	)
Net long-term debt	$	57,379		$	40,951
Total indebtedness							$	168,225		$	148,766

As of June 30, 2017, AMVAC Chemical Corporation (“AMVAC”), the Company’s principal operating subsidiary, as borrower, and affiliates (including the Company, AMVAC CV and AMVAC BV), as guarantors and/or borrowers, entered into a Third Amendment to Second Amended and Restated Credit Agreement ~~(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 ~~(“L/C”)~~ issuer. The ~~Credit Agreement~~agreement is a senior secured lending facility, consisting of a line of credit of up to ~~$250 million,~~$250,000, an accordion feature of up to ~~$100 million~~$100,000 and a maturity date of June 30, 2022. The ~~Credit Agreement~~agreement contains two key financial covenants; namely, borrowers are required to maintain a Consolidated Funded Debt Ratio (the “CFD Ratio”) of no more than 3.25-to-1 and a Consolidated Fixed Charge Covenant Ratio of at least 1.25-to-1. The Company’s borrowing capacity varies with its financial performance, measured in terms of EBITDA as defined in the Credit Agreement, for the trailing ~~twelve month~~twelve-month period. Under the ~~Credit Agreement,~~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.

~~At September 30, 2017, according~~As of November 27, 2019, AMVAC, as borrower, and certain affiliates entered into a Fourth Amendment to Second Amended and Restated Credit Agreement with its senior lenders under the terms of which the maximum limits for both Permitted Acquisitions and Investments in Foreign Subsidiaries were increased and new language was added with respect to Eurocurrency Rates, LIBOR Rates and ERISA. As of April 22, 2020, AMVAC, as borrower, and certain affiliates entered into a Fifth Amendment to the Second Amended and Restated Credit Agreement with its senior lenders (the “Credit Agreement”), having the same term and ~~based~~loan commitments, but under which the maximum permitted CFD Ratio has been increased from 3.25-to-1 to the following schedule: 4.00-to-1 through September 30, 2020, stepping down to 3.75-to-1 through December 31, 2020, 3.5-to-1 through March 31, 2021 and 3.25-to-1 thereafter. In addition, to the extent that it completes acquisitions totaling $15 million or more in any 90-day period, AMVAC may step-up the CFD Ratio by 0.5-to-1, not to exceed 4.25-to-1, for the next three full consecutive quarters. Finally, to the extent that a proposed acquisition is at least $30 million but less than $50 million, the consent of the Lead Agent is required. Larger acquisitions continue to require the consent of a majority of the Lenders.

At March 31, 2020, the Company is compliant with all covenants to its Senior Credit Facility. Based on its performance against the most restrictive covenants ~~listed above,~~in the Credit Agreement, the Company had the capacity to increase its borrowings by up to ~~$124,724.~~$39,552, according to the terms thereof. This compares to an available borrowing capacity of ~~$95,985~~$56,707 as of ~~September 30, 2016.~~March 31, 2019. The level of borrowing capacity is driven by three factors: (1) our financial performance, as measured in EBITDA for both the trailing twelve month period ~~which has improved,~~and proforma basis arising from acquisitions, (2) net borrowings, ~~which have decreased~~ and (3) the leverage covenant ~~(being the number of times EBITDA the Company may borrow under its credit facility agreement)~~(the Consolidated Funded Debt Ratio).

~~9. Reclassification—~~11. Reclassifications—Certain items ~~may~~ have been reclassified in the prior period condensed consolidated financial statements to conform with the ~~September 30, 2017~~March 31, 2020 presentation.

~~10.~~12. Total comprehensive ~~income~~loss 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 ~~and nine~~ month periods ended ~~September 30, 2017~~March 31, 2020 and ~~2016,~~2019, total comprehensive income (loss) consisted of net income attributable to American Vanguard and foreign currency translation adjustments.

~~11. Stock Based~~13. 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”)~~options based on estimated fair values.

The following tables illustrate the Company’s ~~stock based~~stock-based compensation, unamortized stock-based compensation, and remaining weighted average period for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2020 and ~~2016.~~2019.

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)

September 30, 2017

Incentive Stock Options

$
80

$
250

$
94

0.3

Restricted Stock

635

2,068

4,475

1.2

Performance Based Restricted Stock

299

920

1,901

2.0

Performance Based Options

249

347

69

0.3

Total

$
1,263

$
3,585

$
6,539

September 30, 2016

Incentive Stock Options

$
71

$
252

$
497

1.2

Restricted Stock

406

1,100

2,545

1.8

Performance Based Restricted Stock

100

240

857

1.4

Performance Based Options

11

64

173

1.2

Total

$
588

$
1,656

$
4,072

	Stock-Based Compensation for the Three months ended		Unamortized Stock-Based Compensation		Remaining Weighted Average Period (years)
March 31, 2020
Restricted Stock	$	776	$	4,555		1.5
Unrestricted Stock		123		82		0.2
Performance-Based Restricted Stock		458		2,288		1.7
Total	$	1,357	$	6,925

March 31, 2019
Restricted Stock	$	688	$	9,238		2.4
Unrestricted Stock		96		64		0.2
Performance-Based Restricted Stock		701		4,524		2.4
Total	$	1,485	$	13,826

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

Information relating to stock options at ~~September 30, 2017,~~March 31, 2020, summarized by exercise price is as follows:

	Outstanding Weighted Average						Exercisable Weighted Average				Outstanding Weighted Average
Exercise Price Per Share	Shares		Remaining Life (Months)		Exercise Price		Shares		Exercise Price		Shares		Remaining Life (Months)		Exercise Price
Incentive Stock Option Plan:
$7.50		250,050		38	$	7.5		250,050	$	7.50		185,150		8	$	7.5
$11.32—$14.75		232,168		83		11.58		34,334		12.07
$11.32—$14.49												131,837		55	$	11.48
		482,218			$	9.46		284,384	$	8.05		316,987			$	9.16

The weighted average exercise prices for options granted, and exercisable, and the weighted average remaining contractual life for options outstanding as of ~~September 30, 2017,~~March 31, 2020, were as follows:

As of September 30, 2017	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Months)		Intrinsic Value (thousands)
As of March 31, 2020									Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Months)		Intrinsic Value (thousands)
Incentive Stock Option Plan:
Outstanding		482,218	$	9.46		60	$	6,480		316,987	$	9.16		28	$	1,681
Expected to Vest		480,800	$	9.46		60	$	6,464		316,987	$	9.16		28	$	1,681
Exercisable		284,384	$	8.05		41	$	4,222		316,987	$	9.16		28	$	1,681

During the three months ended September 30, 2017 and 2016, the Company recognized stock-based compensation related to stock options of $80 and $71, respectively. During the nine months ended September 30, 2017 and 2016, the Company recognized stock-based compensation related to stock options of $250 and $252, respectively.

As of September 30, 2017, the Company had approximately $94 of unamortized stock-based compensation related to unvested stock options outstanding. This amount will be recognized over the weighted-average period of 0.3 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.

Common stock grants — A summary of non-vested shares as of and for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2020 and ~~2016~~2019 is presented below:

	Nine Months Ended September 30, 2017					Nine Months Ended September 30, 2016					Three Months Ended March 31, 2020					Three Months Ended March 31, 2019
	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 December 31^st		324,756		$	14.75		362,841		$	20.43		719,845		$	17.67		587,210		$	17.59
Granted		251,475			16.10		—			—		4,185			18.63		290,679			17.34
Vested		(10,100	)		12.95		(127,274	)		31.29		(213,781	)		16.18		(105,582	)		15.21
Forfeited		(6,544	)		15.26		(16,008	)		23.67		(14,715	)		18.08		(6,589	)		17.69
Nonvested shares at March 31^st		559,587			15.38		219,559			14.59		495,534		$	18.31		765,718		$	17.77
Granted		38,502			17.08		140,541			15.08
Vested		(188,400	)		15.22		(22,639	)		15.63
Forfeited		(6,593	)		15.55		(6,457	)		14.98
Nonvested shares at June 30th		403,096			15.61		331,004			14.72
Granted		1,000			19.90		1,668			16.75
Vested		(1,065	)		12.88		(2,566	)		19.18
Forfeited		(5,209	)		15.80		(12,822	)		14.98
Nonvested shares at September 30th		397,822		$	15.63		317,284		$	14.69

Common stock grants — During the ~~nine~~three months ended ~~September 30, 2017,~~March 31, 2020, the Company issued a total of ~~290,977~~4,185 shares of restricted common stock to ~~employees and directors. 24,312 shares vested immediately, 3,900~~employees. 2,000 shares will vest in ~~three~~ equal tranches on the ~~employee’s anniversary,~~first, second, and third anniversaries of grant date, 1,000 shares will cliff vest ~~after one year~~on the first anniversary of ~~service, 2,500~~employee’s hire date, 685 shares will cliff vest ~~after two years~~on the third anniversary of ~~service,~~employee’s hire date, and the remaining 500 shares will cliff vest on the six month anniversary of the employee’s hire date. The shares granted in 2020 were average fair valued at $18.63 per share. The fair value was determined by using the publicly traded share price at market close as of the date of grant. The Company will recognize as expense the value of restricted shares over the respective required service period.

During the three months ended March 31, 2019, the Company issued a total of 290,679 shares of restricted common stock to employees. The shares will cliff vest after three years of service. The shares granted in ~~2017~~2019 were average fair valued at ~~$16.24~~$17.34 per share. The fair value was determined by using the publicly traded share price at market close as of the date of grant. The Company will recognize as expense the value of restricted shares over the required service period.

During the nine months ended September 30, 2016, the Company issued a total of 142,209 shares of restricted common stock to employees. Of these, 21,139 shares vested immediately and the remaining 121,070 shares 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 the grant was approved. The Company will recognize as expense the value of restricted shares over the required service period.

During the three months ended September 30, 2017 and 2016, the Company recognized stock-based compensation related to restricted shares of $635 and $406, respectively. During the nine months ended September 30, 2017 and 2016, the Company recognized stock-based compensation related to restricted shares of $2,068 and $1,100, respectively.

As of ~~September 30, 2017,~~March 31, 2020, the Company had approximately ~~$4,475~~$4,555 of unamortized stock-based compensation related to unvested restricted shares. This amount will be recognized over the weighted-average period of ~~1.2~~1.5 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~~Performance-Based Shares—A summary of non-vested ~~performance based~~performance-based shares as of and for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2020 and ~~2016,~~2019, respectively is presented below:

	Nine Months Ended September 30, 2017					Nine Months Ended September 30, 2016					Three Months Ended March 31, 2020					Three Months Ended March 31, 2019
	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 December 31^st		119,022		$	14.18		104,403		$	17.05		345,432		$	16.92		287,077		$	16.87
Granted		121,194			15.40		—			—		—			—		137,557			16.47
Additional granted based on performance achievement												76,445			16.56		41,568			12.88
Vested												(184,785	)		15.87		(90,872	)		14.73
Forfeited		—			—		(9,395	)		17.65		(3,759	)		17.23		(3,543	)		15.98
Nonvested shares at March 31^st		240,216			14.80		95,008			16.99		233,333		$	17.63		371,787		$	16.81
Granted		7,400			15.88		52,170			14.39
Vested		(48,046	)		14.92		—			—
Forfeited		(12,560	)		12.92		(19,612	)		28.25
Nonvested shares at June 30th		187,010			14.93		127,566			14.20
Forfeited		(953	)		15.21		(8,544	)		14.39
Nonvested shares at September 30th		186,057		$	14.93		119,022		$	14.18

~~Performance Based~~Performance-Based Shares — During the ~~nine~~three months ended ~~September 30,~~March 31, 2020, the Company did not issue performance-based shares to employees.

As of March 31, 2020, the Company has concluded that the performance measure based on EBIT and net sales for the performance based shares granted in February and April of 2017, when compared to the peer group, were met at 200% of targeted performance and all related additional expenses were recorded as of March 31, 2020. The performance shares based on market price were met at 50% and 125% for February and April 2017, respectively, however, the market condition is reflected in the grant date fair value valuation and no additional expenses were recognized as of March 31, 2020. As a result, 76,445 additional shares were earned since the Company achieved performance targets when compared to the peer group.

During the three months ended March 31, 2019, the Company issued a total of ~~128,594 performance based~~137,557 performance-based shares to employees. The shares granted during the ~~nine months~~first quarter of ~~2017~~2019 have an average fair value of ~~$15.43.~~$16.47. The fair value was determined by using the publicly traded share price at market close as of the date of ~~grant.~~grant and Monte Carlo valuation method. The Company will recognize as expense the value of the ~~performance based~~performance-based shares over the required service period from grant date. The shares will cliff vest on ~~February 8, 2020~~March 28, 2022 with a measurement period commencing January 1, ~~2017~~2019 and ending December 31, ~~2019.~~2021. Eighty percent of these ~~performance based~~performance-based shares are based upon the financial performance of the Company, specifically, an earnings before income ~~taxes~~tax (“EBIT”) goal weighted at 50% and a net sales goal weighted at 30%. The remaining 20% of ~~performance based~~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~~2018 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 nine months ended September 30, 2016, the Company granted a total of 52,170 performance based shares that will cliff vest on January 6, 2019 with a measurement period commencing January 1, 2016 and ending December 31, 2018. Eighty percent of these performance based shares are based upon the financial performance of the Company, specifically, 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 recording less than the targeted performance and to increase to a maximum of 200% for achieving in excess of the targeted performance.

As of ~~September 30, 2017, performance based~~March 31, 2019, performance-based shares related to EBIT and net sales have an average fair value of ~~$16.10~~$17.34 per share. The fair value was determined by using the publicly traded share price at market close as of the date of grant. The ~~performance based~~performance-based shares related to the Company’s stock price have an average fair value of ~~$12.60~~$13.01 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, 2017 and 2016, the Company recognized stock-based compensation related to performance based shares of $299 and $100, respectively. During the nine months ended September 30, 2017 and 2016, the Company recognized stock-based compensation related to performance based shares of $920 and $240, respectively.

As of ~~September 30, 2017,~~March 31, 2020, the Company had approximately ~~$1,901~~$2,288 of unamortized stock-based compensation expense related to unvested ~~performance based~~performance-based shares. This amount will be recognized over the weighted-average period of ~~2.0~~1.7 years. This projected expense will change if any ~~performance based~~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 Incentive Stock Options—During the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2020 and ~~2016,~~2019, the Company did not grant any employees performance incentive stock options to acquire shares of common stock.

Information relating to stock options ~~at September 30, 2017~~as of March 31, 2020 summarized by exercise price is as follows:

Outstanding Weighted

Average

Exercisable Weighted

Average

Outstanding Weighted

Average

Exercisable Weighted

Average

Exercise Price Per Share

Remaining

Life

(Months)

Exercise

Price

Exercise

Price

Remaining

Life

(Months)

Exercise

Price

Exercise

Price

Performance Incentive Stock Option Plan:

81,666

11.49

—

117,747

11.49

117,747

11.49

The weighted average exercise prices ~~for~~of options granted and exercisable and the weighted average remaining contractual life for options outstanding as of ~~September 30, 2017~~March 31, 2020 are as follows:

As of September 30, 2017	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Months)		Intrinsic Value (thousands)
As of March 31, 2020									Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Months)		Intrinsic Value (thousands)
Performance Incentive Stock Option Plan:
Outstanding		81,666	$	11.49		3	$	932		117,747	$	11.49		57	$	350
Expected to Vest		79,814	$	11.49		3	$	911		117,747	$	11.49		57	$	350
Exercisable		—	$	—		—	$	—		117,747	$	11.49		57	$	350

During the three months ended September 30, 2017 and 2016, the Company recognized stock-based compensation related to performance stock options of $249 and $11, respectively. During the nine months ended September 30, 2017 and 2016, the Company recognized stock-based compensation related to performance stock options of $347 and $64, respectively. As of September 30, 2017, the Company assessed the likelihood of achieving the performance measures based on peer group information currently available for the performance based options granted in 2014. Based on the performance thus far, the Company has concluded that it is likely that the performance measure based on EBIT and net sales will be met at 200% of targeted performance and have considered the related additional expense as of September 30, 2017. The performance options based on market price will also be met at 200%, however, the market condition is reflected in the grant date fair value valuation and no additional expenses were recognized as of September 30, 2017.

As of September 30, 2017, the Company had approximately $69 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 0.3 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.

~~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 assessed the impact of the adoption of this new standard and determined there was no material impact on 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 as of January 1, 2017 on a prospective basis. The impact of this adoption was not material.

~~12.~~14. Legal Proceedings— During the reporting period, there have been no material developments in legal proceedings that ~~are pending or threatened against~~were reported in the ~~Company,~~Company’s Form 10-K for the year ended December 31, 2019, except as described below.

EPA FIFRA/RCRA Matter. On November 10, 2016, the Company was served with a grand jury subpoena out of the U.S. District Court for the Southern District of Alabama in which the U.S. Department of Justice (“DoJ”) sought production of documents relating to the Company’s reimportation of depleted Thimet containers from Canada and Australia. The Company ~~has~~ retained defense counsel to assist in responding to the subpoena and ~~during 2017 year to date has substantially completed~~otherwise defending the ~~production. During~~Company’s interests. Over the ~~third quarter,~~course of the ~~Company received a request from DoJ to interview~~past three years, government attorneys have interviewed several individuals who may be knowledgeable of the ~~matter. Those interviews are likely to take place during~~matter and have sought and received documents from the ~~fourth quarter.~~Company. At this stage, DoJ has not made clear its intentions with regard to either its theory of the case or potential criminal enforcement. Thus, it is too early to tell whether a loss is probable or reasonably estimable. Accordingly, the Company has not recorded a loss contingency on this matter.

~~Harold Reed v. AMVAC et al.~~ ~~During January 2017,~~In a matter arising from similar facts, the United States Environmental Protection Agency (“USEPA”) Region 5 contacted the Company’s legal representatives in November 2019 to commence discussions on the resolution of potential civil enforcement claims that could be brought against 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 (an applicator) and 819596 Alberta Ltd. dba Jem Holdings (an application equipment rental company) allege physical injury and damage to equipment, respectively, arising from ~~a fire that occurred during an application~~its reimportation of depleted Thimet containers and the disposition 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 riskscontents of such ~~application. Reed seeks damages of $250 for alleged pain and suffering, while Jem Holdings seeks $60~~containers in ~~alleged lost equipment; both plaintiffs also seek unspecified damages as well. Also during January 2017,~~2015. After negotiation, the Company ~~received notice~~and USEPA entered into a consent agreement and final order (“CAFO”), including payment of a civil penalty in an amount that ~~four related actions relating~~is not material to the ~~same incident were~~Company’s financial performance. The CAFO was finalized and filed with the ~~same court: (i)~~ ~~Van Giessen Growers, Inc. v Harold Reed et al~~ ~~(No. 160303906)(in which grower seeks $400 for alleged loss~~Regional Hearing Clerk of ~~potatoes); (ii)~~ ~~James Houweling et al. v. Harold Reed et al.~~ ~~(No. 160104421)(in which equipment owner seeks damages for alleged lost equipment); (iii)~~ ~~Chin Coulee Farms, etc. v. Harold Reed et al.~~ ~~(No. 150600545)(in which owner of potatoes and truck seeks $530 for alleged loss thereof); and (iv)~~ ~~Houweling Farms v. Harold Reed et al.~~ (No. 15060881)(in which owner of several Quonset huts seeks damages for alleged lost improvements, equipment and business income equal to $4,300). The Company was subsequently named as cross-defendant in those actions by Reed. During the third quarter, counsel for the Company filed a Statement of Defence (the Canadian equivalent of an answer), alleging that Reed was negligent in his application of the product and that the other cross-defendants were negligent for using highly flammable insulation and failing to maintain sparking electrical fixtures in the storage units affected by the fire. The Company believes that the claims against it in these matters are without merit and intends to defend them 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.

In June 2016, the ~~reporting period, there has been~~FASB issued ASU 2016-13 "Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss model, which requires the use of forward-looking information to calculate credit loss estimates. It also eliminates the concept of other-than-temporary impairment and requires credit losses related to available-for-sale debt securities to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. These changes will result in earlier recognition of credit losses. The Company adopted ASU 2016-13 effective January 1, 2020. The adoption of this standard did not result in any material adjustments to the Company’s condensed consolidated financial statements.

In August 2018, the FASB issued ASU 2018-13 “Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement”, which modifies the disclosure requirements on fair value measurements, including the consideration of costs and benefits. The Company adopted ASU 2018-13 effective January 1, 2020. The adoption of this standard did not result in any material adjustments to the Company’s condensed consolidated financial statements.

In August 2018, the FASB issued ASU 2018-15 “Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract”. ASU 2018-15 requires that issuers follow the internal-use software guidance in Accounting Standards Codification (ASC) 350-40 to determine which costs to capitalize as assets or expense as incurred. The ASC 350-40 guidance requires that certain costs incurred during the application development stage be capitalized and other costs incurred during the preliminary project and post-implementation stages be expensed as they are incurred. The Company adopted ASU 2018-15 effective January 1, 2020. The adoption of this standard did not result in ~~respect~~any material adjustments to the Company’s condensed consolidated financial statements.

In December 2019, the FASB issued ASU no. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes,” (“ASU No. 2019-12”). The amendment removes certain exceptions to the general income tax accounting methodology including an exception for the recognition of a ~~pending environmental matter as follows:~~

~~Environmental Site Characterization. As reported~~deferred tax liability when a foreign subsidiary becomes an equity method investment and an exception for interim periods showing operating losses in ~~greater detail~~excess of anticipated operating losses for the year. The amendment also reduces the complexity surrounding franchise tax recognition; the step up in the ~~Company’s Form 10-K for the period ended December 31, 2016, soil and groundwater characterization commenced at our Los Angeles manufacturing facility in December 2002~~tax basis of goodwill in conjunction with ~~a Site Investigation Plan that was approved by~~business combinations; and the ~~Department~~accounting for the effect of ~~Toxic Substances Control (“DTSC”). Site investigation (including extensive soil, soil gas, groundwater and air testing) continued through 2014, at~~changes in tax laws enacted during interim periods. The amendments in this update are effective for the ~~conclusion of which the~~ Company submitted a remedial action plan (“RAP”) to DTSC. Under the provisions of the RAP, the Company proposed not to disturb sub-surface contaminants, but to continue monitoring, maintain the cover above affected soil, enter into restrictive covenants regarding the potential use of the property in the future, and provide financial assurances relating to the requirements of the RAP. In January 2017, the RAP was circulated for public comment. DTSC responded to those comments and, on September 29, 2017, approved the RAP as submitted by the Company. The Company intends to prepare an operation and maintenance plan, to record covenants on certain affected parcels and to obtain further clarification on financial assurance obligations relating to the RAP. At this stage, the Company does not believe that costs to be incurred in connection with the RAP will be material and has not recorded a loss contingency for these activities.

~~14. Recently Issued Accounting Guidance— In November 2016, FASB issued 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 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 beginning-of-period and end-of-period total amounts shown on the statement of 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. The Company expects 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. The Company expects to adopt the revised 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 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, 2018,2020, 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 consolidated financial statements,years 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 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. early adoption permitted. The Company ~~expects to adopt ASU 2016-02 for the financial year beginning on January 1, 2019.~~

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). These amendments will be effective upon adoption of Topic 606. This standard also requires enhanced disclosures regarding the nature, amount, timing, and uncertainty of revenue and cash flows.

~~We have completed an initial scoping analysis of~~evaluating the effect of ~~the standards to identify the revenue streams that may be affected by~~adopting this ~~ASU. The Company is currently completing detailed contract reviews to evaluate whether the~~new accounting guidance but does not expect adoption could result in a change in the timing or amount of revenue recognition. For certain products that are deemed to have no alternative use accompanied by an enforceable right to payment, recognition will change from point in time, to over time. The Company is also evaluating the impact on timing and amounts of revenue recognition on certain licenses granted for the use of its intellectual property, as well as other revenue transactions. The Company is in the process of determining what changes are needed to existing accounting policies and controls, as well as disclosures. As of November 2, 2017, the Company has not yet determined whether the impact of adoption of Topic 606 will have a material impact on the ~~Company’s~~consolidated financial ~~condition, results of operations or cash flows. The Company anticipates utilizing the modified retrospective method adoption for the financial year beginning January 1, 2018.~~ statements.

~~15.~~16. Fair Value of Financial Instruments—The accounting standard for fair value measurements provides a framework for measuring fair value and requires expanded disclosures regarding fair value measurements. Fair value is defined as the price that would be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. This accounting standard established a fair value hierarchy, which requires an entity to maximize the use of observable inputs, where available. The following summarizes the three levels of inputs required:

The carrying ~~values~~amount of the Company’s financial instruments, which principally include cash ~~receivables~~ and cash equivalents, short-term investments, accounts receivable, long-term investments, accounts payable ~~approximate their~~and accrued expenses approximates fair ~~values~~value because of the relatively short maturity of ~~these~~such instruments. The ~~fair value~~carrying amount of the Company’s short-term and long-term ~~debt payable to the bank is estimated~~borrowings, which are considered Level 2 liabilities, approximates fair value based ~~on the quoted market prices for the same or similar issues or on the~~upon current rates ~~offered~~and terms available to the Company for ~~debt~~similar debt.

We measure our contingent earn-out liabilities in connection with business acquisitions at fair value on a recurring basis using significant unobservable inputs classified within Level 3 of the ~~same remaining maturities. Such~~ fair value ~~approximates~~hierarchy. We may use various valuation techniques depending on the ~~respective carrying values~~terms and conditions of the contingent consideration including a Monte-Carlo simulation. This simulation uses probability distribution for each significant input to produce hundreds or thousands of possible outcomes and the results are analyzed to determine probabilities of different outcomes occurring. The following table illustrates the Company’s ~~long-term debt payable~~contingent consideration movements related to ~~bank.~~its business acquisitions:

~~16.~~17. Accumulated Other Comprehensive ~~Income (“AOCI”)~~Loss—The following table lists the beginning balance, annual activity and ending balance of accumulated other comprehensive loss, which consists of foreign currency translation adjustments:

~~17.~~18. Equity Method ~~Investments~~Investment—TyraTech Inc. (“TyraTech”) is a Delaware corporation that specializes in developing, marketing and selling pesticide products containing natural oils. As of September 30, 2017, the Company’s ownership position in TyraTech was approximately 15.11%. The 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 and nine months ended September 30, 2017, the Company recognized losses of $29 and $140, respectively, as a result of the Company’s ownership position in TyraTech. The Company recognized losses of $180 and $309, respectively, for the three and nine months ended September 30, 2016.

The Company’s investment in TyraTech is included in other assets on the condensed consolidated balance sheets. At September 30, 2017, the carrying value of the Company’s investment in TyraTech was $2,044 and the quoted market value of its shareholding was $1,210 based on the London Stock Exchange, Alternative Investment Market (“AIM”). At September 30, 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.

On June 27, 2017, both Amvac Netherlands BV and Huifeng Agrochemical Company, Ltd (“Huifeng”) made individual capital contributions of $950 to the Huifeng Amvac Innovation Co. Ltd (“Hong Kong Joint Venture”). As of ~~September 30, 2017,~~March 31, 2020, the Company’s ownership position in the Hong Kong Joint Venture was 50%. The Company utilizes the equity method of accounting with respect to this investment. On July 7, 2017, the Hong Kong Joint Venture purchased the shares of Profeng Australia, Pty Ltd.(“Profeng”), for a total consideration of $1,900. The purchase consists of Profeng Australia, Pty Ltd Trustee and Profeng Australia Unit Trust. Both Trust and Trustee were previously owned by Huifeng via its wholly owned subsidiary Shanghai Biological Focus center. For the three ~~and nine~~ months ended ~~September 30, 2017,~~March 31, 2020 and 2019, the Company recognized losses of ~~$86~~$13 and ~~$86,~~$24, respectively, as a result of the Company’s ownership position in the Hong Kong Joint Venture. ~~There were no similar losses recognized~~The Company’s investment in ~~the prior year comparative period.~~this joint venture amounted to $500 and $698, respectively at March 31, 2020 and 2019.

~~18. Cost Method Investment–~~In February 2016, ~~the Company~~AMVAC Netherlands BV 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, 2017,~~March 31, 2020, the Company’s ownership position in Bi-PA iswas 15%. ~~At September 30, 2017,~~The Company adopted the ~~carrying~~provisions of ASU 2016-01 on January 1, 2018 and has elected to measure its cost method investment without a readily determinable fair value at its cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the ~~Company’s investment~~same issuer. There were no observable price changes in ~~Bi-PA is $3,283. The Company utilizes~~ the ~~cost method of accounting with respect to this investment~~quarters ended March 31, 2020 and ~~periodically review the investment for possible impairment.~~2019. There was no impairment on the investment as of ~~September 30, 2017.~~March 31, 2020 and 2019. The investment is not material and is recorded within other assets on the condensed consolidated balance sheets.

19. Income Taxes – —Income tax ~~expense increased by $576 to end at an expense of $1,954~~benefit was $205 for the three months ended ~~September 30, 2017,~~March 31, 2020, as compared to ~~$1,378~~income tax expense of $1,360 for the ~~comparable period in 2016.~~three months ended March 31, 2019. The annual effective tax rate for the ~~quarter~~three months ended March 31, 2020 was ~~32.1%, as~~31.0%. That rate is the Company’s estimated rate for 2020 based on the rates in the territories that the Company operates. The rate has increased compared to ~~31.3%~~prior years reflecting global changes in ~~the same period of the prior year. Income~~ tax expense was $5,015 for the nine months ended September 30, 2017, as compared to $3,672 for the nine months ended September 30, 2016. The effective tax rate for the nine months ended September 30, 2017 and 2016 was 29.2% and 27.9%, respectively.laws. The effective tax rate is based on the projected income for the full year and is subject to ongoing review and adjustment by management.

~~During~~For the ~~first quarter of 2017,~~three months ended March 31, 2020, the Company ~~adopted ASU 2016-09, “Improvement~~benefited from two discrete income tax benefits. First, the Company assessed its income tax positions to ~~Employee Share-Based Payment Accounting,”~~account for the Coronavirus Aid Relief and Economic Security Act (“CARES Act”) which ~~simplifies several aspects~~was signed into law on March 27, 2020. A provision of the ~~accounting for share-based payments, including treatment~~act modified the amount of ~~excess~~interest deduction allowed and therefore reduced the Company’s 2019 Global Intangible Low Tax Income (“GILTI”) inclusion. Second, the Company benefited from the tax ~~benefits and forfeitures, as well as consideration~~impact of ~~minimum statutory tax withholding requirements. Under~~ the ~~new standard, all excess tax benefits and tax deficiencies will be recognized as income tax expense or benefit in the income statement as discrete items in the reporting period in which they occur.~~ vesting of certain stock grants.

For the ~~nine~~three months ended ~~September 30, 2017, a~~March 31, 2019 the effective rate was 25.7%. In 2019 the Company gained from the discrete ~~tax~~ benefit of ~~$333 was recognized as part~~the vesting of ~~the income tax expense.~~

The Company has ~~effectively settled~~been notified by the Florida Department of Revenue of its ~~examination with~~intent to examine the ~~Internal Revenue Service (“IRS”)~~Company’s state income tax returns for the ~~tax~~ years ended December 31, 2012 ~~and 2014. As a result, the Company increased deferred tax assets and income taxes payable at~~through December 31, ~~2016~~2013 and December 31, 2015 through December 31, 2018. The Company has also been notified by ~~$12,598. The Company’s 2015 federal income tax return is still subject~~the Mississippi Department of Revenue of its intent to ~~IRS examination. The~~examine the Company’s state income tax returns ~~are subject to examination~~ for the ~~2012~~years ended December 31, 2015 through ~~2015 tax years.~~ December 31, 2017. Currently the results of these audits are not determinable since the audits are presently in the initial phases.

20. Share Repurchase Program—On ~~April 3, 2017,~~November 5, 2018, pursuant to a Board of Directors resolution, the Company announced its intention to repurchase an aggregate amount of shares with a total purchase price not to exceed $20,000 of its common stock, par value $0.10 per share, in the open market, depending upon market conditions over the short to mid-term. The Shares Repurchase Program expired on March 8, 2019. During January 2019, the Company purchased 158,048 shares for a total of $2,604 at an average price of $16.48 per share. There were no such purchases during the three months ended March 31, 2020.

21. Business Acquisitions – Product and Business Acquisitions – The Company did not complete any acquisitions during the three months ended March 31, 2020.

During the year ended December 31, 2019, the Company completed three acquisitions in exchange for a total cash consideration at closing of $37,972, net of cash acquired of $981 and deferred consideration of $3,051. In addition, the Company assumed liabilities of $19,867 and capitalized costs of $14 incurred in the asset acquisition process. The total asset value of $60,904 was allocated as follows: product rights $13,279, trade names $5,452, customer relationships $5,705, goodwill $22,652, working capital and fixed assets $10,432, and indemnification assets $3,384.

On January 10, 2019, the Company completed the acquisition of all of the outstanding shares of stock of two affiliated businesses, Defensive and Agrovant, which are located in Jaboticabal in the state of Sao Paul, Brazil. At closing the Company paid ~~the IRS $11,580.~~

~~20. Acquisitions – During the first nine months of 2017, the Company completed two acquisitions with a combined purchase~~cash consideration of ~~$25,100.~~$20,679, which was net of cash acquired of $981, deferred consideration of $3,051 including contingent consideration dependent on certain financial results for 2019, and liabilities assumed of $18,160, including liabilities of $9,111 related to income tax matters. These companies were founded in 2000 and are suppliers of crop protection products and micronutrients with focus on the fruit and vegetable markets The ~~preliminary allocation~~acquisition was accounted for as a business combination and the total asset value of ~~the purchase price~~$41,890 was ~~$22,000 to product rights, $1,900 to trademarks,~~allocated as follows: trade name $1,010, customer relationships $5,705, goodwill $22,652, working capital and ~~$1,200 to customer lists.~~

fixed assets $9,139 and indemnification assets $3,384. The operating results of ~~these acquisitions~~the acquired businesses are ~~immaterial~~included in our consolidated statement of operations from the date of acquisition. The goodwill recognized is expected to be deductible for income tax purposes, subject to merging AMVAC do Brasil with Defensive and Agrovant.

On July 1, 2019, the ~~accompanying~~Company completed a product acquisition for cash consideration in the amount of $7,293 and the assumption of a liability in the amount of $300. The acquisition was accounted for as an asset acquisition and the acquired assets consist of product rights $5,108, trade names $1,200, and inventory $1,293. Costs of $8 incurred in the asset acquisition process were capitalized.

On December 20, 2019, the Company completed a product acquisition for cash consideration in the amount of $10,000 and the assumption of a liability in the amount of $1,407. The acquisition was accounted for as an asset acquisition and the acquired assets consist of product rights $8,171 and trade names $3,242. Costs of $6 incurred in the asset acquisition process were capitalized.

22. Foreign Currency – The Company incurred net foreign currency transaction losses in the amount of $837 and $259 during the three months ended March 31, 2020 and 2019, respectively, included in operating expenses on the condensed consolidated financial ~~statements individually and in~~statements.

23. Subsequent Event – On April 1, 2020, the ~~aggregate. Therefore, pro forma financial data is not presented.~~

~~On June 6, 2017,~~Company entered into a Subscription Agreement pursuant to which it purchased 6.25 million shares, an ownership of approximately 8%, of common stock of Clean Seed Capital Group Ltd. (TSX Venture Exchange: “CSX”) for $2,500. As of the ~~Company’s principal operating subsidiary, Amvac Chemical Corporation, completed an acquisition~~same date, AMVAC entered into a License Agreement with Clean Seed Agricultural Technologies Ltd., pursuant to which the latter granted the Company a worldwide, royalty-bearing, non-exclusive license to a suite of ~~certain assets~~patents relating to ~~the abamectin, chlorothalonil~~a system for variable-ratio blending of multiple agricultural products, including an up-front royalty payment of $2,500 and ~~paraquat product lines from a group~~an ongoing royalty based upon net sales of ~~companies, including Adama Agricultural Solutions, Ltd. The consideration for the acquired assets was paid in cash~~SIMPAS systems commencing January 1, 2021. Clean Seed develops, markets and ~~has initially been allocated to inventory~~sells planters featuring row-by-row variable rate technology that utilizes sophisticated electronic metering and ~~intangible assets.~~ ~~The acquired products were included in the Company’s results of operations from June 6, 2017 (the date of acquisition).~~ intuitive software control.

On August 22, 2017, the Company’s Netherlands-based subsidiary, AMVAC Netherlands BV, completed the acquisition of certain selective herbicides and contact fungicides including chlorothanonil, ametryn, and isopyrazam, sold in the Mexican agricultural market. The assets were purchased from Syngenta AG. The consideration for the acquired assets was paid in cash and has initially been allocated to inventory and intangible assets. T~~he acquired products were included in the Company’s results of operations from August 22, 2017 (the date of acquisition).~~

21. Subsequent Events – On October 2, 2017, the Company’s subsidiary, AMVAC Chemical, completed its acquisition of OHP, Inc., a US-based distribution company specializing in the greenhouse and nursery production markets throughout the United States and Puerto Rico. OHP will continue to operate in its horticultural markets using OHP brands.

~~On October 27, 2017, the Company’s wholly-owned subsidiary, AMVAC Netherlands BV, completed its acquisition of Grupo Agricenter, a distribution company based in Central America.~~

The combined cash consideration was approximately $41,750, plus inventory and other deferred performance driven payments. These acquisitions were funded from the borrowings on our credit facility agreement.

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, 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.~~2019.

~~Overall financial performance~~The Company’s Operations in the Context of the COVID-19 Pandemic

In March 2020, the World Health Organization categorized the novel coronavirus (COVID-19) as a pandemic, and it continues to spread across the world. To limit the spread of the contagion, governments have taken various actions to slow and otherwise control the spread of the pandemic, including the issuance of stay-at-home orders, social distancing guidelines and border restrictions. At its outset, the Company took swift action to understand, contain and mitigate the risks posed by this pandemic. Specifically, we formed the Pandemic Work Group with a mission to ensure the health and safety of the workforce while ensuring continuity of the business. In the workplace, we have designed and implemented protocols for social distancing, made provisions for the ~~quarter~~workforce to work remotely where possible, and established quarantine policies for those who present COVID-like symptom or may have been in touch with those who have. Further, the group keeps current with local, state, federal and international laws and restrictions that could affect the business; provides real-time information to the workforce; and draws from political commentary and news statements concrete directions on how best to continue operations. We have also prepared contingency plans to permit the continued operation of our factories, in the event that there are critical staffing issues due to attrition. In addition, in April 2020, we amended our credit facility to support future working capital needs (see note 10). Further, we continuously monitor supply chain, transport, logistics and border closures and have reached out to third parties to make clear that we are continuing to operate, that we have our own policies relating to health (e.g., no third party visitors, no face-to-face meetings) and are committed to compliance with COVID-19 policies of our business partners. Our CEO and the leader of the Pandemic Work Group is holding weekly “state of the company” calls with the functional heads of our businesses across the globe to ensure that our information is shared in a timely manner and that our direction is clear.

It is important to understand that under applicable federal guidelines (at https://www.cisa.gov), the Company is part of the nation’s “critical infrastructure” and falls within three of the 16 sectors that are specially permitted to operate: “Food and Agriculture” sector (engaged in “the production of chemicals and other substances used by the food and agriculture industry, including pesticides, herbicides etc.”), the “Chemical” sector (supporting the operation . . . of facilities (particularly those with high risk chemicals . . . whose work cannot be done remotely and requires the presence of highly trained personnel to ensure safe operations”) and the “Public Works and Infrastructure Support Services” sector (in support of exterminators, landscapers and others who provide services to residences and businesses). In issuing guidance on Coronavirus, President Trump said, “If you work in a critical infrastructure industry, as defined by the Department of Homeland Security, such as healthcare services and pharmaceutical and food supply, you have a special responsibility to maintain your normal work schedule [emphasis added].” We have found that state COVID-19 orders and, indeed, even those of countries in which the outbreak has been most pronounced (e.g., Italy), have consistently excepted food supply as an area essential to the survival of its populations and, as such, had given special permission to companies, such as ours, to continue to operate during the pandemic.

In keeping with our charge to operate as an essential business and by virtue of our efforts to contain and mitigate the risks posed by the pandemic, we have been able to manage our business with minimal impact during the reporting period.

The Company’s overall operating results for the first three months of 2020 declined as compared with those of the same period of 2019. Net sales were down about 4% ($95,962 compared to $99,676) and gross profit was down 8% ($38,381 v. $41,702). Gross margin declined to 40% from 42% of net sales, and operating expenses rose by approximately 5% ($36,545 v. $34,800). Net income ended ~~September 30, 2017 included sales of $89,975, which were up approximately 9%,~~at $520, as compared to $3,906 for the same period of 2019.

On a consolidated basis, with domestic sales at or near flat and international sales down by about 9%, overall net sales were down by about 4% (or $3,714). While cost of sales were flat on an absolute basis, as a percent of net sales, they rose from 58% to 60%. These factors, taken together, yielded a decline in gross profit of about $3,321. In the first quarter of 2020 operating expenses increased by about $1,746, due largely to unfavorable foreign currency transaction effects (mainly from Brazil and partially offset by Mexico), and the fact that the Company was able to record a gain from accounting for deferred purchase price consideration in first quarter of 2019 that was not repeated in 2020. Consequently, operating income for the period decreased by approximately $5,000. After slightly lower interest rates and a higher; overall effective tax rate (offset by beneficial discrete items), net income for the period declined to $520. Details on our financial performance are set forth below.

	For the three months ended March 31,
	2020			2019			Change			% Change
Net sales:
US crop	$	50,362		$	50,270		$	92			0	%
US non-crop		10,993			11,267			(274	)		-2	%
Total US		61,355			61,537			(182	)		0	%
International		34,607			38,139			(3,532	)		-9	%
Total net sales:	$	95,962		$	99,676		$	(3,714	)		-4	%
Cost of sales:
US crop	$	26,117		$	26,448		$	(331	)		-1	%
US non-crop		6,274			5,421			853			16	%
Total US		32,391			31,869			522			2	%
International		25,190			26,105			(915	)		-4	%
Total cost of sales:	$	57,581		$	57,974		$	(393	)		-1	%
Gross profit:
US crop	$	24,245		$	23,822		$	423			2	%
US non-crop		4,719			5,846			(1,127	)		-19	%
Total US		28,964			29,668			(704	)		-2	%
International		9,417			12,034			(2,617	)		-22	%
Total gross profit:	$	38,381		$	41,702		$	(3,321	)		-8	%
Gross margin:
US crop		48	%		47	%
US non-crop		43	%		52	%
Total US		47	%		48	%
International		27	%		32	%
Gross margin:		40	%		42	%

Our domestic crop business recorded net sales that were about equivalent to those of first quarter 2019 ($50,362 v. $50,270). When viewed by type of product and crop, sales were mixed. Further, in general, during the first quarter, we saw a very careful procurement pattern in the domestic market, as low crop commodity prices and concerns about near-term demand from Asia caused growers and retailers to purchase crop protection inputs at a very cautious and deliberate pace. Soil fumigants posted a strong performance as drier weather conditions in California and the Pacific Northwest facilitated more widespread product application than had been the case in the first quarter of 2019. With respect to our corn products, net sales of ~~$82,447 for~~our corn soil insecticides, including Aztec®, SmartChoice® and Force®, were flat during the ~~third~~ quarter, ~~of 2016. Our gross profit performance ended at $38,032 or 42% of sales,~~while our Impact® herbicide, which continues to exhibit strong brand value, generated increased sales. Soybean products, such as Scepter® and our recently acquired post-emergent products (e.g., Hornet® and Python®), added a strong upside, as compared to ~~$32,986 or 40%~~the same quarter in 2019. By contrast, with a 10 percent drop in planted cotton acres (relating to lower commodity prices), we experienced a drop in net sales of Bidrin® and bifenthrin products. We also saw a decrease in sales of our NAA plant growth regulator which is used primarily on tree nuts and pome fruits; this decrease arose in large part from timing of orders by certain of our larger customers.

Cost of sales within the domestic crop business were flat as compared to the first quarter of 2019, while gross profit rose by about 1% (from $23,822 to $24,245). This improvement rose from increased sales of higher margin products, such as soil fumigants and soybean herbicides.

Our domestic non-crop business showed decreased net sales (down about 2% to $10,993 from $11,267) quarter-over-quarter. In this category, our Dibrom® mosquito adulticide sales declined, influenced by timing shifts in customer procurement. In addition, license fees for our Envance essential oil technology were reduced as compared to first quarter of last year; we expect to recognize additional royalties during the later quarters of 2020. Offsetting these declines, we recorded sales under a new cost recovery tolling contract and improved net sales from our nursery and ornamental business, as demand for homeowner garden and landscape products in big box stores remained strong in spite of stay-at-home restrictions at retail locations.

Cost of sales within the domestic non-crop business rose by about 16% (from $5,421 to $6,274) quarter-over-quarter. This increase was entirely due to a supply agreement with a third party for certain newly acquired products that we are planning to produce internally in the future. Gross profit for domestic non-crop decreased by 19% (from $5,846 in 2019 to $4,719 in 2020) due primarily to lower license fees in our natural oil business.

Net sales of our international businesses were down by about 9% during the period ($34,607 in 2020 v. $38,139 in 2019). Several factors contributed to this result. In Europe, sales of our Mocap® insecticide dropped sharply in connection with the phase-out of that product following the cancellation of its registration in the EU. Sales performance was flat in Central America with stronger results from a rotation in the use of our nematicides in pineapple plantations, offset by consolidation by certain suppliers in that region and logistical difficulties arising from the pandemic in both Honduras and Panama. Mexico posted strongly improved sales with increased demand for granular insecticides and bromacil herbicides, coupled with higher soil fumigant sales for use on high-value vegetable crops. In Brazil, net sales declined by about 20% due to lower disease pressure in soybeans (thus reducing demand for our fungicide products), portfolio streamlining (to optimize our sales resources) and delays in procurement arising from economic uncertainty. The performances of our Brazilian and Mexican businesses were further affected by a devaluation in the Brazilian Real and the Mexican Peso. The average exchange rate of the Brazilian Real and the Mexican Peso decreased by approximately 15% and 3% for the ~~comparable~~period ended March 31, 2020 compared to the same period in the prior year.

Cost of sales in our international business decreased by 4% (from $26,105 in 2019 to $25,190 in 2020) primarily driven by mix and currency changes. Gross profit for the international businesses dropped by about 22% (from $12,034 in 2019 to $9,417 in 2020). This decrease arose from several factors. Sales of certain high margin products, including Mocap (as mentioned above), Impact and pest strips, decreased. In addition, while sales of our Assure II® products into Canada increased, the cost of goods rose significantly. Further, we experienced higher sales of low-margin products from our business in Australia.

On a consolidated basis, gross profit for the first quarter ~~last~~of 2020 decreased by 8% (from $41,702 in 2019 to $38,381 in 2020). The change in mix described above had the impact of reducing gross margin percentage by approximately 2% and included a balanced factory performance quarter-over-quarter. Overall gross margin percentage ended at 40% in the first quarter of 2020, as compared to 42% in the first quarter of the prior year.

Operating ~~costs~~expenses increased by $1,745 or 5% to ~~35% of sales~~$36,545 for the three months ended September 30, 2017 as compared to 34% for the same period in prior year. Overall net income increased by $1,212 or 42% at $0.14 per basic and diluted share as compared to $0.10 per basic and diluted share this time last year.

~~Overall financial performance for the nine month period ended September 30, 2017 included improved sales and net income,~~March 31, 2020, as compared to the same period in 2016. Sales for the period were up approximately 6% to $238,553, as compared to $224,645 for the first nine months of 2016. Under absorption of factory costs for the nine month period reduced from 4% of sales to 3% of sales. Our gross profit performance ended at $102,451 or 43% of sales, as compared to $91,884 or 41% of sales for the comparable prior period. Operating expenses remained flat at 35% of net sales and net income improved by $2,928 or 33% to $0.41 per basic share and $0.40 per diluted share, as compared to $0.31 per basic and $0.30 per diluted share.

Net sales for our crop business were up 2% in the quarter and 5% year to date, as compared to the same periods of the prior year. This included a benefit of approximately $7,150 in sales of products from acquisitions concluded earlier in 2017, partially offset by a reduction in the price of Impact in the form of a $2,100 program accruals against inventory in the channel Our non-crop business was up 62% in the three month period ended September 30, 2017 and 15% in the nine month period, as compared to this time last year due primarily to strong sales of our mosquito control insecticide Dibrom® in the aftermath of domestic hurricanes. Our international sales were up 8% for the three months ended September 30, 2017 and were up 3% for the nine months ended September 30, 2017. A more detailed discussion of general market conditions and sales performance by category of products appears below.

When considering the condensed consolidated balance sheet, as of September 30, 2017, net debt was increased by $12,891 and $16,428, as compared to September 30, 2016 and December 31, 2016, respectively. This increase is partly the result of funding product line acquisitions announced during the third quarter of 2017. Debt, net of deferred loan fees, at September 30, 2017 and at December 31, 2016 were $57,379 and $40,951, respectively. Inventory ended the quarter at $123,315 including the impact of newly acquired products and was $120,576 as of December 31, 2016. This compared to $141,678 as of September 30, 2016.

2017

2016

Change

% Change

Net sales:

Insecticides

$
24,866

$
25,478

$
(612
)

-2
%
Herbicides/soil fumigants/fungicides

32,717

34,242

(1,525
)

-4
%
Other, including plant growth regulators

17,191

13,328

3,863

29
%
Total crop

74,774

73,048

1,726

2
%
Non-crop

15,201

9,399

5,802

62
%

$
89,975

$
82,447

$
7,528

9
%
Cost of sales:

Insecticides

$
16,141

$
17,029

$
(888
)

-5
%
Herbicides/soil fumigants/fungicides

19,551

18,146

1,405

8
%
Other, including plant growth regulators

10,230

9,609

621

6
%
Total crop

45,922

44,784

1,138

3
%
Non-crop

6,021

4,677

1,344

29
%

$
51,943

$
49,461

$
2,482

5
%
Gross profit:

Insecticides

$
8,725

$
8,449

$
276

3
%
Herbicides/soil fumigants/fungicides

13,166

16,096

(2,930
)

-18
%
Other, including plant growth regulators

6,961

3,719

3,242

87
%
Gross profit crop

28,852

28,264

588

2
%
Gross profit non-crop

9,180

4,722

4,458

94
%

$
38,032

$
32,986

$
5,046

15
%
Gross margin crop

39
%

39
%

Gross margin non-crop

60
%

50
%

Total gross margin

42
%

40
%

The improved quarterly sales performance was driven by three primary factors. First, we experienced increased demand of our mosquito control product Dibrom® in the Gulf states following Hurricane Harvey and Hurricane Irma. Second, our cotton harvest defoliant Folex® generated strong sales arising from an increase in U.S. cotton acres planted (which were up about 20% over the prior year). Third, we posted incremental quarterly revenues as a result of three products acquired from Adama during the second quarter. Partially offsetting these year-over-year increases were lower sales of our corn herbicide in the Midwest market, slower sales of soil fumigants due primarily to weather-related factors, and a decline in one of our insecticides sold in international markets.

Across our crop business, net sales of our insecticides group were down approximately 2% to end at $24,866, as compared to $25,478 during the third quarter of 2016. Within this category, net sales of our granular insecticides were up approximately 4%, as compared to prior year, with some gains in Aztec, Counter and Thimet products, offset by timing declines in our Mocap and Nemacur products sold primarily in International markets. Net sales of our non-granular crop insecticides were down marginally, although this category did benefit from sales of the newly acquired Abamectin insecticide product, Abba Ultra®.

Within the group of herbicides/fungicides/fumigants used in crop applications, net sales for the third quarter of 2017 declined by approximately 4% to $32,717 from $34,242 in the comparable period of 2016. Net sales of our herbicide products increased approximately 20%, with the introduction of our newest paraquat herbicide, Parazone®, more than offsetting reduced sales of our post emergent corn herbicide, Impact®, which resulted from highly competitive market conditions this year in the Midwest region. During the three months ended September 30, 2017, we announced reduced Impact selling prices and accrued an appropriate rebate for channel inventory in response to anticipated competition in the post emergent herbicide market for the new growing season. This resulted in a charge to income (as a reduction in net sales) in the amount of approximately $2,100 during the period.

Sales of Dacthal® for use on a wide variety of high-valued vegetable crops held steady with the prior year and we enjoyed increased sales of our international herbicide products Hyvar® and Krovar®, up almost 100% compared to the same quarter of 2016. Our soil fumigants business declined from the prior year’s third quarter due to an application rate reduction by one of our customers, and significant disruptions in post-harvest applications caused in the Southeast U.S. by Hurricane Irma. In fungicides, we had steady sales of our PCNB product and posted additional sales of the newly acquired chlorothalonil fungicide, Equus.

Within the group of other products (which includes plant growth regulators, molluscicides and tolling activity), net sales were up 29%, as compared to the third quarter of 2016. Significant quarterly sales of our Folex® cotton defoliant along with our growth regulator product NAA drove this positive performance. Offsetting these strong factors were somewhat lower sales of our Metaldehyde granules, our SmartBlock potato sprout inhibitor, and our toll manufacturing revenue which will be recognized in the fourth quarter of 2017.

Our non-crop sales ended the third quarter of 2017 at $15,201 up 62%, as compared to $9,399 for the same period of the prior year. The main driver of this gain was the year-over-year increase in our aerial-applied mosquito adulticide Dibrom® due to the increased demand for insect control following the Hurricanes Harvey and Irma that struck Texas, Florida and other Southeastern states. We experienced slightly lower quarterly sales of our insecticide products for commercial pest control and our pharmaceutical products.

Our international sales increased 8% ending at $24,133, as compared to $22,414 for the third quarter of the prior year. This performance was driven by strong sales of our Hyvar® and Krovar® herbicide brands, offset by lower Mocap and Nemacur insecticides.

Our cost of sales for the third quarter of 2017 was $51,943 or 58% of sales. This compared to $49,461 or 60% of sales for the same period of 2016. The Company aggregates a number of key variable, semi-variable and fixed cost components within reported cost of sales. The raw materials element of our cost of sales remained approximately flat as compared to this time last year. The third quarter was a strong manufacturing quarter with high output, as the Company prepares for the new US growing season which, commences on October 1. Factory performance in the third quarter of 2017 was slightly stronger than the prior year. As a result, the unrecovered element of factory costs decreased to 2% of sales as compared to a cost of 3% of sales in the same period of the prior year. Finally, 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 third quarter of 2017 improved by $5,046, or 15%, to end at $38,032, as compared to $32,986 for the third quarter of 2016. Gross margin percentage ended at 42% in the three months ended September 30, 2017, as compared to 40% in the same period of the prior year. This strong performance was primarily driven by sales of higher margin products, production planning, and a $1,000 improvement in factory under absorption costs in light of strong factory utilization rates and inventory cost adjustments based upon capacity use studies.

As discussed below in detail by department, operating expenses increased by $3,284 to $31,570 for the three months ended September 30, 2017, as compared to the same period in 2016. That increase arose as the Company incurred one-time costs (of approximately $800) related to multiple acquisitions. In addition, we incurred higher regulatory costs relating to re-registration requirements for several of our organophosphate active ingredients, which constitute an important part of the Company’s portfolio, and heightened investment in product development to help fill our pipeline with new products (of approximately $1,440). Further, we invested more heavily in SIMPAS (an increase of approximately $400), particularly in connection with the GPS integration effort, in order to bring that technology closer to commercialization. These expenditures should serve to generate a long term return on investment.

	2017		2016		Change			% Change			2020		2019		Change			% Change
Selling	$	6,671	$	7,096	$	(425	)		-6	%	$	10,474	$	11,038	$	(564	)		-5	%
General and administrative		9,227		7,546		1,681			22	%		12,504		11,180		1,324			12	%
Research, product development and regulatory		7,324		5,200		2,124			41	%		6,154		5,683		471			8	%
Freight, delivery and warehousing	��	8,348		8,444		(96	)		-1	%		7,413		6,899		514			7	%
	$	31,570	$	28,286	$	3,284			12	%	$	36,545	$	34,800	$	1,745			5	%

Interest costs net of capitalized interest were ~~$375~~$1,508 in the first three months ~~ended September 30, 2017,~~of 2020, as compared to ~~$301~~$1,612 in the same period of ~~2016.~~2019. Interest costs are summarized in the following table:

	Three months ended September 30, 2017								Three months ended September 30, 2016								Q1 2020								Q1 2019
	Average Debt		Interest Expense			Interest Rate			Average Debt		Interest Expense			Interest Rate			Average Debt		Interest Expense			Interest Rate			Average Debt		Interest Expense			Interest Rate
Revolving line of credit (average)	$	44,897	$	320			2.9	%	$	44,617	$	241			2.2	%	$	165,076	$	1,496			3.6	%	$	143,144	$	1,576			4.4	%
Amortization of deferred loan fees		—		57			—			—		62			—			—		59			—			—		50			—
Subtotal		44,897		377			3.4	%		44,617		303			2.7	%
Notes payable		—		—			—			9		—			—
Amortization of other deferred liabilities		—		7			—			—		9			—			—		3			—			—		—			—
Other interest expense		—		7			—			—		11			—
Other interest (income) expense																		—		30			—			—		13			—
Subtotal		44,897		391			3.5	%		44,626		323			2.9	%	$	165,076	$	1,588			3.8	%	$	143,144	$	1,639			4.6	%
Capitalized interest		—		(16	)		—			—		(22	)		—			—		(80	)		—			—		(27	)		—
Total	$	44,897	$	375			3.3	%	$	44,626	$	301			2.7	%	$	165,076	$	1,508			3.7	%	$	143,144	$	1,612			4.5	%

The Company’s average overall debt for the three months ended ~~September 30, 2017~~March 31, 2020 was ~~approximately flat at $44,897,~~$165,076, as compared to ~~$44,626~~$143,144 for the three months ended ~~September 30, 2016. During~~March 31, 2019. Our borrowings in the ~~quarter, we continued to focus on managing our~~three months ended March 31, 2020 were higher than the same period of the prior year primarily driven by the acquisition activity over the last 12 months and the associated investment in expanded working ~~capital and controlling our usage of revolving debt. Furthermore, we continued to follow our strategy in making product line acquisitions that fit our portfolio.~~capital. As can be seen from the table above, our effective bank interest rate on our revolving line of credit was ~~3.4%~~3.6% for the three months ended ~~September 30, 2017,~~March 31, 2020, as compared to ~~2.7%~~4.4% in ~~2016.~~2019.

Income tax expense ~~increased~~decreased by ~~$576~~$1,565 to end at ~~an expense~~a benefit of ~~$1,954~~$205 for the three months ended ~~September 30, 2017,~~March 31, 2020, as compared to ~~$1,378~~income tax expense of $1,360 for the comparable period in ~~2016.~~2019. The underlying effective tax rate for the three months ended March 31, 2020 was 31.0%. In addition, during the quarter, the Company benefited from two discrete income tax benefits. First, the Company assessed its income tax positions to account for the Coronavirus Aid Relief and Economic Security Act (“CARES Act”) which was ~~32.1%, as compared to 31.3% in the same period~~signed into law on March 27, 2020. A provision of the ~~prior year. Our~~act modified the amount of interest deduction allowed and therefore reduced the Company’s 2019 Global Intangible Low Tax Income (“GILTI”) inclusion. Second, the Company benefited from the tax impact of the vesting of certain stock grants. During the three months ended March 31, 2019, the Company effective tax rate increased due to a relatively stronger performance for our domestic business, which is in a higher tax rate jurisdiction, offset by an increase in excess tax benefits related to stock options. Furthermore, thewas 25.7%. 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 ~~September 30, 2017 the Company~~March 31, 2020 and 2019 we recognized a loss of ~~$29~~$13 and $24, respectively, on our investment in TyraTech based upon its forecasted financial performance for 2017. This compared to a loss of $180 recognized in the comparable period of 2016. The Company’s investment in TyraTech is included in other assets on the condensed consolidated balance sheets.

During the three months ended September 30, 2017, the Company recognized a loss of $86 through its Hong Kong Joint Venture on our investment in Profeng. No comparable loss was recognized in 2016. The Company’s investment in the Hong Kong ~~Joint Venture~~joint venture which is ~~included in other assets on the condensed consolidated balance sheets.~~

~~Non-controlling interest amounted to~~ a loss of $71 in the three months ended September 30, 2017, as compared to $36 in the same period of the prior year. Non-controlling interest represents the share of net income that is attributable to the minority stockholder of our majority50% owned ~~subsidiary, Envance.~~equity investment.

Our overall net income for the first three months ~~ended September 30, 2017~~of 2020 was ~~$4,089~~$520 or ~~$0.14~~$0.02 per basic and diluted share, as compared to ~~$2,877~~$3,906 or ~~$0.10~~$0.13 per basic and diluted share in the same ~~period~~quarter of ~~2016.~~2019.

2017

2016

Change

% Change

Net sales:

Insecticides

$
102,249

$
89,496

$
12,753

14
%
Herbicides/soil fumigants/fungicides

68,783

80,009

(11,226
)

-14
%
Other, including plant growth regulators

30,680

23,148

7,532

33
%
Total crop

201,712

192,653

9,059

5
%
Non-crop

36,841

31,992

4,849

15
%
Total net sales

$
238,553

$
224,645

$
13,908

6
%
Cost of sales:

Insecticides

$
64,495

$
59,244

$
5,251

9
%
Herbicides/soil fumigants/fungicides

38,221

42,907

(4,686
)

-11
%
Other, including plant growth regulators

17,418

15,184

2,234

15
%
Total crop

120,134

117,335

2,799

2
%
Non-crop

15,968

15,426

542

4
%
Total cost of sales

$
136,102

$
132,761

$
3,341

3
%
Gross profit:

Insecticides

$
37,754

$
30,252

$
7,502

25
%
Herbicides/soil fumigants/fungicides

30,562

37,102

(6,540
)

-18
%
Other, including plant growth regulators
��

13,262

7,964

5,298

67
%
Gross profit crop

81,578

75,318

6,260

8
%
Gross profit non-crop

20,873

16,566

4,307

26
%
Total gross profit

$
102,451

$
91,884

$
10,567

12
%
Gross margin crop

40
%

39
%

Gross margin non-crop

57
%

52
%

Total gross margin

43
%

41
%

~~Sales for~~The Company used cash of $13,946 in operating activities during the ~~nine~~three months ended ~~September 30, 2017 improved by nearly 6% to end at $238,553,~~March 31, 2020, as compared to ~~$224,645, this time last year. This year-over-year improvement was driven by~~$20,263 during the three ~~major factors: first, our cotton products generated strong sales arising~~months ended March 31, 2019. Included in the $13,946 are net income of $520, plus non-cash depreciation, amortization of intangibles and other assets and discounted future liabilities, in the amount of $5,792, and provision for bad debts in the amount of $359. Also included are stock-based compensation of $1,357, losses from ~~an increase~~equity method investment of $13, decrease in U.S. cotton acres planted; second, we experienced incremental sales attributable to the acquisition of three new products; and third, increased post-hurricane demand for our mosquito adulticide. Partially offsetting these year-over-year increases were lower sales of our corn herbicide into the Midwest market and slower sales of soil fumigants primarily due to several weather-related application interruptions.

~~Across our crop business,~~deferred income taxes of $910and net ~~sales~~foreign currency adjustment of ~~our insecticides group were up approximately 14% to end at $102,249,~~$823. These together provided net cash inflows of $7,954, as compared to ~~$89,496 during~~$10,027 for the ~~nine~~same period of 2019.

During the first three months ~~ended September 30, 2016. Within this category, net sales~~ of ~~our non-granular insecticides~~2020, the Company increased working capital by ~~38% driven by our cotton insecticide Bidrin~~^® ~~which posted significantly increased sales due to the increase in 2017 U.S. cotton acres and an increase in foliar pest pressure,~~$14,161, as compared to extremely low infestation levels of 2016. Further, net sales of our granular soil insecticides were up 9%. This increase was due to the strong performance of our granular products including corn insecticides Aztec® and SmartChoice; Thimet^® (used primarily in peanuts and sugar cane) and Counter®, which is largely used for nematode control in corn and sugar beets. We also recorded additional sales with our newly acquired insecticide Abba Ultra®. Offsetting these increases, in our International business, sales of Mocap were relatively flat, and we experienced softer sales of our Nemacur® brand.

Within the group of herbicides/fungicides/fumigants used in crop applications, net sales for the nine months ended September 30, 2017 declined by approximately 14% to $68,783 from $80,009 in the comparable period of 2016. During the period, we saw significantly weaker sales of our corn herbicide, Impact® in the Midwest region caused by wide-spread generic price reductions on competitive post-emergent herbicide products. Further, as mentioned above, our soil fumigants business declined by approximately 14% from the prior year due to excessively wet weather in several regions of the United States which inhibited the application of these liquid products. We experienced a modest decline in sales of our Scepter® soybean herbicide, sold in the U.S. market, and our Hyvar® and Krovar® herbicides, which are sold in international markets. Offsetting these declines were a slight increase in sales of Dacthal®, for use on a wide variety of high valued vegetable crops, and incremental sales of the newly acquired chlorothalonil fungicide, Equus® and paraquat herbicide, Parazone®.

Within the group of other products (which includes plant growth regulators, molluscicides and tolling activity), net sales were up about 33%, as compared to the first half of 2016. This improvement was driven by both significantly higher sales of our Folex® cotton defoliant, due to increased harvested cotton acres in 2017, and stronger sales of our growth regulator product NAA. Offsetting these upside performances, our tolling revenues were lower as a result of timing and will catch up in the final quarter of the year.

~~Our year-to-date non-crop sales ended up about 15% at $36,841, as compared to $31,992 for~~$28,358 during the same period of the prior year. This category benefitted from much higher sales of our aerial-applied mosquito adulticide Dibrom® resulting from hurricane Harvey (Texas) and Hurricane Irma (Florida & Georgia). These positive factors were partially offsetIncluded in this change: inventories increased by ~~lower sales of our pharmaceutical products and a lower royalty payment received on our Envance consumer pest control products.~~

~~Our international sales ended up 3%~~$16,446 (normal at ~~$64,676,~~this point in the season), as compared to ~~$62,984~~$23,763 for the first ~~nine month~~quarter of ~~the prior year. This was a result of increase in sales in our Counter and Aztec products that is somewhat offset~~2019. Deferred revenue decreased by ~~reduced sales of our Hyvar® and Krovar® herbicides, our Nemacur insecticide, and relatively flat sales of our Mocap insecticide and a variety of other products.~~

~~Our cost of sales for the nine months ended at $136,102 or 57% of net sales. This compares~~$2,342, as compared to ~~$132,761 or 59% of net sales~~$16,036 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 contained raw material prices; second, our manufacturing performance has improved including some minor inflation in manufacturing costs more than offset by better manufacturing output as we have continued to manage inventory and output levels in our plants; and third, the Company made more sales with higher margins in 2017 primarily2019, driven by ~~strong market performance in some of~~customer decisions regarding demand, payment timing and our ~~key markets.~~

~~Gross profit for the nine months ended September 30, 2017 improved~~cash incentive programs. Our accounts payable balances decreased by ~~$10,567, or 12%, to end at $102,451,~~$189, as compared to ~~$91,884 for the nine months of 2016. Gross margin percentage ended at 43% in the first nine months of 2017, as compared to 41%~~$4,788 in the same period of ~~the prior year. This strong performance was primarily driven by containing raw material pricing, effective~~2019, reflecting slower production ~~planning and favorable sales mix performance.~~

~~As discussed below~~activity this year in ~~detail by department, operating expenses~~efforts to control inventory level. Accounts receivables increased by ~~$6,746 to $84,175 for the nine months ended September 30, 2017,~~$5,472, as compared to ~~the same period in 2016. That increase arose from one-time charges for outside services related to acquisition diligence activities (of approximately $936), legal defense~~a decreased of the criminal investigation related to the importation of Thimet containers (of approximately $1,900), regulatory costs for re-registration of several organophosphate patents and field trials for development uses and products (of approximately $1,600), and further investment in business development personnel, SIMPAS technology and support for Smartbox systems in the field (of approximately $1,200).

~~Interest costs net of capitalized interest were $1,073 in the first nine months of 2017, as compared to $1,304~~$6,812 in the same period of ~~2016. Interest costs are summarized~~2019. This is primarily driven by territorial mix of sales and some slight delays caused by COVID-19 disruption in ~~the following table:~~

~~The Company’s average overall debt for the nine months ended September 30, 2017 was $44,706,~~Central America. Prepaid expenses increased by $776, as compared to $63,976 for the nine months ended September 30, 2016. During the period, 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 revolving line of credit was 3.1% for the nine months ended September 30, 2017, as compared to 2.7% in 2016.

Income tax expense increased by $1,343 to end at an expense of $5,015 for the nine months ended September 30, 2017, as compared to $3,672 for the comparable period in 2016. The effective tax rate for the nine months ended September 30, 2017 was 29.2%, as compared to 27.9%$2,724 in the same period of 2019. Income tax receivable increased by $597, as compared to decreasing by $750 in the prior year. ~~Our effective tax rate~~Accrued programs increased ~~due to a relatively stronger performance for our domestic business, which is in a higher tax rate jurisdiction, offset~~ by an increase in excess tax benefits related to stock options. 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 nine months ended September 30, 2017 we recognized a loss of $140 on our investment in TyraTech. This compared to a loss of $309 recognized in the comparable period of 2016. This reflected their forecast financial performance for 2017 and a true up of their 2016 performance, which improved in comparison to 2015. The Company’s investment in TyraTech is included in other assets on the condensed consolidated balance sheets.

During the nine months ended September 30, 2017, the Company recognized a loss of $86 through our Hong Kong Joint Venture on its investment in Profeng. No comparable loss was recognized in 2016. The Company’s investment in the Hong Kong Joint Venture is included in other assets on the condensed consolidated balance sheets.

~~Non-controlling interest amounted to an income of $117 in the nine months ended September 30, 2017,~~$6,016, as compared to ~~$253~~$2,391 in ~~the same period of~~ the prior year. ~~Non-controlling interest represents the share of net income that is attributable to the minority stockholder of our majority owned subsidiary, Envance.~~

~~Our overall net income for the nine months ended September 30, 2017 was $11,845 or $.41 per basic~~The change reflected some changes in product mix and ~~$0.40 per diluted share,~~program strategies in US Agriculture market. Finally, other payables and accrued expenses decreased by $2,094, as compared to ~~$8,917 or $0.31 per basic and $0.30 per diluted share~~$2,508 in the ~~same period~~prior year as a result of ~~2016.~~the reduced incentive compensation accrual.

~~Although~~With regard to our ~~net income for~~program accrual, the ~~nine months ended September 30, 2017 increased by $2,792~~increase (as noted above) primarily reflects our mix of sales and customers in the first quarter of 2020, as compared to the same period in 2016, cash generated by operating activities decreased by $17,956. This was principally due to a tax payment to the IRS for back taxes of $11,580 and a net decrease of $557 to other tax liability activities. Other items that changed cash generated by operating activities are as described: non-cash depreciation, amortization of intangibles and other long term assets and discounted future liabilities generated $16,373, as compared to $16,330 in the prior year; stock based compensation of $3,585 as compared to $1,656 for the nine months ended September 30, 2016; and other non-cash adjustments including loss from equity method investment provided a net cash inflow of $32,152, as compared to $27,383 in the same period of 2016.

As of September 30, 2017, our working capital increased to $144,084, as compared to $130,001 at December 31, 2016. This change was mainly driven by the increase in accounts receivable. This time last year our working capital amounted to $153,466. The cash generated as a result of this reduction as of September 30, 2017 has been used to make product line acquisitions and to pay down debt.

During the nine months ended September 30, 2017, net sales ended up 6% at $238,553, as compared to the same period of 2016. At September 30, 2017 accounts receivable increased by 9%, as compared to the balance as of September 30, 2016. During the nine months ended September 30, 2017 the level of accounts receivable increased by $15,746, as compared to December 31, 2016. This change is driven by timing and by the mix of sales of products, customers and regions in the period to September 30, 2017.

Inventories at September 30, 2017 ended at $123,315 ($141,678 at September 30, 2016), which was an increase of $2,213 as compared to December 31, 2016. 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 control inventory levels to focus on managing our working capital levels. As of September 30, 2017, we believe our inventories are valued at the lower of cost or market.

year. The Company accrues ~~product specific~~ programs ~~based on agreements~~in line with customers and calculated as a percentage of sales. Program accruals at any balance sheet date depend on the mix of customers and products sold in the previous period. The level of the accrual at any point is also affected by the growing season ~~that is the focus of the product and the agreed periodicity of payments.~~upon which specific products are targeted. Typically crop products have a growing season that ends on September 30^thof each year. During the ~~nine months ended September 30, 2017,~~first quarter of 2020, the Company made accruals for programs in the amount of $17,189 and made payments in the amount of $11,192. During the first quarter of the prior year, the Company made accruals in the amount of $37,738. 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, some programs for some products and markets are paid either more frequently or at different times in the calendar year. During the first nine months of 2017, the Company made payments in the amount of $15,018. Payments are not generally significant in the second and third quarters of each fiscal year. During the nine months ended September 30, 2016, the Company accrued $45,456$14,902 and made payments in the amount of ~~$14,920.~~$11,701.

~~Prepaid expenses at September 30, 2017 amounted to $13,543 ($12,270 at September 30, 2016),~~Cash used for investing activities was $2,980 for the three months ended March 31, 2020, as compared to $ 11,424 at December 31, 2016. As of September 30, 2017, accounts payable amounted to $29,355 ($23,268 at September 30, 2016), as compared to $24,358 at December 31, 2016. In 2017, we have continued to focus on improving our demand forecasting, planning for production and management of inventories. The increase in accounts payables as of September 30, 2017, as compared to September 30, 2016 and December 31, 2016, is primarily due to demand driven higher raw material purchases towards the end of the third quarter and planning$27,615 for the ~~start of the final quarter of the year.~~

three months ended March 31, 2019. The Company utilized $32,187 for investing activities during the nine months ended September 30, 2017, as compared to $9,629 during the same period of 2016. The Company made investments in capital expenditures in the current year,spent $2,980 on fixed assets acquisitions primarily focused on expanding plant capabilities. Furthermore, during the nine month period, the Company paid a total of $25,904 to complete four product line acquisitions and, furthermore, made a $950 capital contribution to the Hong Kong Joint Venture. That capital contribution was then usedcontinuing to invest in Profeng, a business in Australia. During the same period of the prior year the Company made a $3,283 investment in a Belgian Company that develops biological plant protection products that can be used for the control of pests and disease of agricultural crops and a small level of capital spending on our the manufacturing ~~plants.~~infrastructure.

During the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2020, financing activities provided ~~$14,966,~~$16,641, principally from the borrowings on the Company’s senior credit facility, as compared to utilizing $24,544 for the nine months ended September 30, 2016. This included a net borrowing of $16,975 against our facility, as compared to a net repayment of $24,000 for the same period last year. This overall performance for 2017 year to date was driven by generating cash from operations, managing our working capital while spending on fixed assets to ensure our manufacturing facilities are well maintained and fit for purpose. Further, the Company received $820 from the sale of common stock under its Employee Stock Purchase Plan and issuance of stock options, as compared to providing $204 for the same period of last year. Finally, during the nine months to September 30, 2017 we paid dividends to investors in the amount of $1,161 as compared to $289$48,865 for the same period of the prior year. In the first quarter of 2020, we paid dividends to stockholders amounting to $582, as compared to $581 in the same period of 2019.

The Company has a revolving line of credit ~~that is~~ shown as long-term debt in the condensed consolidated balance sheets at ~~September 30, 2017~~March 31, 2020 and December 31, ~~2016. These are~~2019. The debt is summarized in the following table:

Long-term indebtedness ($000's)	September 30, 2017						December 31, 2016
	Long-term			Total			Long-term			Total
Long-term indebtedness													March 31, 2020			December 31, 2019
Revolving line of credit	$	58,375		$	58,375		$	41,400		$	41,400		$	168,700		$	149,300
Deferred loan fees		(996	)		(996	)		(449	)		(449	)		(475	)		(534	)
Net long-term debt	$	57,379		$	57,379		$	40,951		$	40,951
Total indebtedness													$	168,225		$	148,766

~~As of June 30, 2017, AMVAC Chemical Corporation (“AMVAC”), the Company’s principal operating subsidiary, as borrower, and affiliates (including~~At March 31, 2020, the Company ~~AMVAC CV and AMVAC BV), as guarantors and/or borrowers, entered into a Third Amendment~~is compliant with all covenants to ~~Second Amended and Restated~~its Senior Credit Agreement (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 (“L/C”) issuer. The Credit Agreement is a senior secured lending facility, consisting of a line of credit of up to $250 million, an accordion feature of up to $100 million and a maturity date of June 30, 2022. The Credit Agreement contains two key financial covenants; namely, borrowers are required to maintain a Consolidated Funded Debt Ratio of no more than 3.25-to-1 and a Consolidated Fixed Charge Covenant Ratio of at least 1.25-to-1. The Company’s borrowing capacity varies with its financial performance, measured in terms of EBITDA, for the trailing twelve month period. 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.

~~At September 30, 2017, according to the terms of the Credit Agreement and based~~Facility. Based on its performance against the most restrictive covenants ~~listed above,~~in the Credit Agreement (see, supra Note 10), the Company had the capacity to increase its borrowings by up to ~~$124,724.~~$39,552, according to the terms thereof. This compares to an available borrowing capacity of ~~$95,985~~$56,707 as of ~~September 30, 2016.~~March 31, 2019. The level of borrowing capacity is driven by three factors: (1) our financial performance, as measured in EBITDA for both the trailing twelve month period ~~which has improved,~~and proforma basis arising from acquisitions, (2) net borrowings, ~~which have decreased and~~ (3) the leverage covenant ~~(being the number of times EBITDA the Company may borrow under its credit facility agreement)~~(the Consolidated Funded Debt Ratio).

We believe that anticipated cash flow from operations, existing cash balances and available borrowings under our amended 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~~Please refer to Note 15 in the 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 beginning-of-period and end-of-period total amounts shown on the statement of 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. The Company expects 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 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 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 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 January 1, 2019.

~~In May 2014, FASB issued ASU 2014-09,~~ ~~Revenue from Contracts with Customers~~ (Topic 606). 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 amendmentaccompanying Notes 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 arrangeCondensed Consolidated Financial Statements for ~~that good or service to be provided by the other party (that is, the entity is an agent). In April 2016, FASB~~recently 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). These amendments will be effective upon adoption of Topic 606. This standard also requires enhanced disclosures regarding the nature, amount, timing, and uncertainty of revenue and cash flows.

We have completed an initial scoping analysis of the effect of the standards to identify the revenue streams that may be affected by this ASU. The Company is currently completing detailed contract reviews to evaluate whether the adoption could result in a change in the timing or amount of revenue recognition. For certain products that are deemed to have no alternative use accompanied by an enforceable right to payment, recognition will change from point in time, to over time. The Company is also evaluating the impact on timing and amounts of revenue recognition on certain licenses granted for the use of its intellectual property, as well as other revenue transactions. The Company is in the process of determining what changes are needed to existingadopted accounting policies and controls, as well as disclosures. As of November 2, 2017, the Company has not yet determined whether the impact of adoption of Topic 606 will have a material impact on the Company’s financial condition, results of operations or cash flows. The Company anticipates utilizing the modified retrospective method adoption for the financial year beginning January 1, 2018. standards.

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, ~~2016,~~2019, 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, ~~2016.~~2019.

Certain of the Company’s policies require the application of judgment by management in selecting the appropriate assumptions for calculating financial estimates. These judgments are based on historical experience, terms of existing contracts, commonly accepted industry practices and other assumptions that the Company believes are reasonable under the circumstances. These estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the condensed consolidated financial statements in the period that revisions are determined to be necessary. Actual results may differ from these estimates under different outcomes or conditions.

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, ~~2016 and the Company’s Form 8-K filed with the SEC on or about July 6, 2017.~~2019.

The Company ~~conducts business in various foreign currencies, primarily in Europe, Mexico, Central and South America. Therefore~~faces market risk to the extent that changes in ~~the value of the currencies of such countries or regions~~foreign currency exchange rates affect ~~the Company’s financial position~~our non-U.S. dollar functional currency as to foreign subsidiaries’ revenues, expenses, assets and ~~cash flows when translated into U.S. Dollars.~~liabilities. The Company ~~has mitigated~~currently does not engage in hedging activities with respect to such exchange rate risks.

Assets and ~~will continue to mitigate a portion of its currency exchange exposure through natural hedges based on~~liabilities outside the ~~operation of decentralized foreign operating companies~~U.S. are located in ~~which the majority of all costs are local-currency based. Furthermore,~~regions where the Company has ~~established~~subsidiaries or joint ventures: Central America, South America, North America, Europe Asia, and Australia. The Company’s investments in foreign subsidiaries and joint ventures with a ~~procedure for covering forward exchange rates on specific purchase orders when appropriate. A 10% change in~~functional currency other than the ~~value of all foreign currencies would have an immaterial effect on~~U.S. dollar are generally considered long-term. Accordingly, the ~~Company’s financial position and cash flows.~~Company does not hedge these net investments.

As of ~~September 30, 2017,~~March 31, 2020, the Company has 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, 2017,~~March 31, 2020, 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~~Please refer to Note 14 in the ~~reporting period, there have been no material developments in legal proceedings that are pending or threatened against the Company, except as described below.~~

~~EPA FIFRA/RCRA Matter.~~ On November 10, 2016, the Company was served with a grand jury subpoena out of the U.S. District Court for the Southern District of Alabama in which the U.S. Department of Justice (“DoJ”) sought production of documents relatingaccompanying Notes to the Company’s reimportation of depleted Thimet containers from Canada and Australia. The Company has retained defense counsel and during 2017 year to date has substantially completed the production. During the third quarter, the Company received a request from DoJ to interview several individuals who may be knowledgeable of the matter. Those interviews are likely to take place during the fourth quarter. At this stage, DoJ has not made clear its intentions with regard to either its theory of the case or potential criminal enforcement. Thus, it is too early to tell whether a loss is probable or reasonably estimable. Accordingly, the Company has not recorded a loss contingency on this matter.

~~Harold Reed v. AMVAC et al.~~ ~~During January 2017, the Company was served with two~~Condensed Consolidated Financial 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 (an applicator) and 819596 Alberta Ltd. dba Jem Holdings (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 alleged pain and suffering, while Jem Holdings seeks $60 in alleged lost equipment; both plaintiffs also seek unspecified damages as well. Also during January 2017, the Company received notice that four related actions relating to the same incident were filed with the same court: (i) ~~Van Giessen Growers, Inc. v Harold Reed et al~~ ~~(No. 160303906)(in which grower seeks $400 for alleged loss of potatoes); (ii)~~ ~~James Houweling et al. v. Harold Reed et al.~~ ~~(No. 160104421)(in which equipment owner seeks damages for alleged lost equipment); (iii)~~ ~~Chin Coulee Farms, etc. v. Harold Reed et al.~~ ~~(No. 150600545)(in which owner of potatoes and truck seeks $530 for alleged loss thereof); and (iv)~~ ~~Houweling Farms v. Harold Reed et al.~~ (No. 15060881)(in which owner of several Quonset huts seeks damages for alleged lost improvements, equipment and business income equal to $4,300). The Company was subsequently named as cross-defendant in those actions by Reed. During the third quarter, counsel for the Company filed a Statement of Defence (the Canadian equivalent of an answer), alleging that Reed was negligent in his application of the product and that the other cross-defendants were negligent for using highly flammable insulation and failing to maintain sparking electrical fixtures in the storage units affected by the fire. The Company believes that the claims against it in these matters are without merit and intends to defend them 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.

~~13. Environmental— During the reporting period, there has been a material development in respect of a pending environmental matter as follows:~~

~~Environmental Site Characterization~~. As reported in greater detail in the Company’s Form 10-K for the period ended December 31, 2016, soil and groundwater characterization commenced at our Los Angeles manufacturing facility in December 2002 in conjunction with a Site Investigation Plan that was approved by the Department of Toxic Substances Control (“DTSC”). Site investigation (including extensive soil, soil gas, groundwater and air testing) continued through 2014, at the conclusion of which the Company submitted a remedial action plan (“RAP”) to DTSC. Under the provisions of the RAP, the Company proposed not to disturb sub-surface contaminants, but to continue monitoring, maintain the cover above affected soil, enter into restrictive covenants regarding the potential use of the property in the future, and provide financial assurances relating to the requirements of the RAP. In January 2017, the RAP was circulated for public comment. DTSC responded to those comments and, on September 29, 2017, approved the RAP as submitted by the Company. The Company intends to prepare an operation and maintenance plan, to record covenants on certain affected parcels and to obtain further clarification on financial assurance obligations relating to the RAP. At this stage, the Company does not believe that costs to be incurred in connection with the RAP will be material and has not recorded a loss contingency for these activities.

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, ~~2016,~~2019, filed on March ~~7, 2017.~~10, 2020. In preparing this document, we have reviewed all the risk factors included in that document and find that there are no material changes to those risk ~~factors.~~factors, except for the following:

The Covid-19 pandemic is creating risk, uncertainty and adverse conditions in many industries both here and abroad. The Company is closely monitoring the impact of the COVID-19 pandemic on all aspects of its business, including how the pandemic will impact its customers, business partners, and employees. While the Company did not incur significant disruptions from the COVID-19 pandemic during the three months ended March 31, 2020, the Company is unable to predict the impact that the pandemic will have on its financial condition, results of operations and cash flows due to numerous uncertainties. The extent to which the COVID-19 pandemic impacts the Company’s operations and those of its customers will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact, and the direct and indirect economic effects of the pandemic and containment measures, among others. There is no guarantee that the Company will be able to operate without material disruption for the duration of the pandemic or that its financial conditions and results of operations will not be materially adversely affected by the pandemic in future quarters.

The table below summarizes the number of shares of our common stock that were repurchased during the three months ended March 31, 2019 under the share repurchase program. The shares and respective amount are recorded as treasury shares on the Company’s condensed consolidated balance sheet. There were no similar purchases during the three months ended March 31, 2020.

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		3

Item 1.	Financial Statements (unaudited)	3

	Condensed Consolidated Statements of Operations for the three months ended March 31, 2020 and ~~nine months ended September 30, 2017 and 2016~~2019	3

	Condensed Consolidated Statements of Comprehensive Income (Loss) for the three months ended March 31, 2020 and ~~nine months ended September 30, 2017 and 2016~~2019	4

	Condensed Consolidated Balance Sheets as of ~~September 30, 2017~~March 31, 2020 and December 31, ~~2016~~2019	5

	Condensed Consolidated ~~Statement~~Statements of Stockholders’ Equity for the three months ended March 31, 2020 and ~~nine months ended September 30, 2017~~2019	6

	Condensed Consolidated Statements of Cash Flows for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2020 and ~~2016~~2019	7

	Notes to Condensed Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1921

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2926

Item 4.	Controls and Procedures	2926

PART II—OTHER INFORMATION		3027

Item 1.	Legal Proceedings	3027

Item 1A.	Risks Factors	27

Item 2.	Purchases of Equity Securities by Issuer	27

Item 6.	Exhibits	3228

SIGNATURES		3329

	Three months ended March 31, 2020			Three months ended March 31, 2019
Cash paid for amounts included in the measurement of lease liabilities	$	1,396		$	1,206
ROU assets obtained in exchange for new liabilities	$	825		$	371

Weighted-average remaining lease term (in years)		3.15			3.25
Weighted-average discount rate		3.67	%		3.69	%

	March 31, 2020
2020 (excluding three months ended March 31, 2020)	$	3,959
2021		3,552
2022		1,952
2023		871
2024		389
Thereafter		870
Total lease payments	$	11,593
Less: imputed interest		714
Total	$	10,879

Amounts recognized in the condensed consolidated balance sheet:
Operating lease liabilities, current	$	4,883
Operating lease liabilities, long term	$	5,996

Declaration Date	Record Date	Distribution Date	Dividend Per Share		Total Paid
September 18, 2017	October 5, 2017	October 19, 2017	$	0.015	$	439
June 8, 2017	June 30, 2017	July 14, 2017	$	0.015	$	437
March 7, 2017	March 31, 2017	April 14, 2017	$	0.015	$	435
December 18, 2016	December 23, 2016	January 6, 2017	$	0.010	$	289

	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)
September 30, 2017
Incentive Stock Options	$	80	$	250	$	94		0.3
Restricted Stock		635		2,068		4,475		1.2
Performance Based Restricted Stock		299		920		1,901		2.0
Performance Based Options		249		347		69		0.3
Total	$	1,263	$	3,585	$	6,539
September 30, 2016
Incentive Stock Options	$	71	$	252	$	497		1.2
Restricted Stock		406		1,100		2,545		1.8
Performance Based Restricted Stock		100		240		857		1.4
Performance Based Options		11		64		173		1.2
Total	$	588	$	1,656	$	4,072

	Incentive Stock Option Plans			Weighted Average Price Per Share		Exercisable Weighted Average Price Per Share
Balance outstanding, December 31, 2016		541,905		$	9.33	$	7.97
Options exercised		(15,000	)		7.50		—
Options forfeited		(3,919	)		11.49		—
Balance outstanding, March 31, 2017		522,986			9.37		7.99
Options exercised		(21,300	)		7.50		—
Options forfeited		(3,183	)		11.49		—
Balance outstanding, June 30, 2017		498,503			9.43		8.03
Options exercised		(12,000	)		7.50		—
Options forfeited		(4,285	)		11.49		—
Balance outstanding, September 30, 2017		482,218		$	9.46	$	8.05

	Incentive Stock Option Plans			Weighted Average Price Per Share
Balance outstanding, December 31, 2019		332,823		$	9.14
Options exercised		(15,836	)		8.83
Balance outstanding, March 31, 2020		316,987		$	9.16

	Incentive Stock Option Plans			Weighted Average Price Per Share		Exercisable Weighted Average Price Per Share
Balance outstanding, December 31, 2019		120,782		$	11.49	$	11.49
Options exercised		(3,035	)		11.49		11.49
Balance outstanding, March 31, 2020		117,747		$	11.49	$	11.49

	Three months ended March 31, 2020
Balance, December 31, 2019	$	1,243
Payments		(1,227	)
Foreign exchange effect		(16	)
Balance, March 31, 2020	$	—

	Nine months ended September 30, 2017								Nine months ended September 30, 2016
	Average Debt		Interest Expense			Interest Rate			Average Debt		Interest Expense			Interest Rate
Revolving line of credit (average)	$	44,706	$	870			2.6	%	$	63,949	$	1,098			2.3	%
Amortization of deferred loan fees		—		182			—			—		187			—
Subtotal		44,706		1,052			3.1	%		63,949		1,285			2.7	%
Notes payable		—		—			—			27		1			—
Amortization of other deferred liabilities		—		23			—			—		28			—
Other interest expense		—		63			—			—		35			—
Subtotal		44,706		1,138			3.4	%		63,976		1,349			2.8	%
Capitalized interest		—		(65	)		—			—		(45	)		—
Total	$	44,706	$	1,073			3.2	%	$	63,976	$	1,304			2.7	%

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, 2017,~~March 31, 2020, formatted in XBRL (Extensible Business Reporting Language): (i) Condensed ~~consolidated~~Consolidated Statements of Operations; (ii) Condensed ~~consolidated~~Consolidated Statements of Comprehensive ~~Income;~~Income (Loss); (iii) Condensed ~~consolidated~~Consolidated Balance Sheets; (iv) Condensed ~~consolidated Statements~~Consolidated Statement of Stockholders’ Equity; (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, 2017~~May 11, 2020	By:	/s/ eric g. wintemute
		Eric G. Wintemute
		Chief Executive Officer and Chairman of the Board

Dated: ~~November 2, 2017~~May 11, 2020	By:	/s/ david t. johnson
		David T. Johnson
		Chief Financial Officer & Principal Accounting Officer