~~(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~~30,869,520 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 June 30,						For the Six Months Ended June 30,
	2017		2016		2017			2016			2022			2021			2022			2021
Net sales	$	89,975	$	82,447	$	238,553		$	224,645		$	148,084		$	134,610		$	297,519		$	250,765
Cost of sales		51,943		49,461		136,102			132,761			(88,305	)		(82,471	)		(176,547	)		(153,495	)
Gross profit		38,032		32,986		102,451			91,884			59,779			52,139			120,972			97,270
Operating expenses		31,570		28,286		84,175			77,429			(48,966	)		(43,080	)		(95,410	)		(84,524	)
Adjustment to bargain purchase gain on business acquisition												—			(88	)		—			(121	)
Operating income		6,462		4,700		18,276			14,455			10,813			8,971			25,562			12,625
Change in fair value of an equity investment												(486	)		(295	)		(403	)		771
Other income												—			—			—			672
Interest expense, net		375		301		1,073			1,304			(772	)		(1,013	)		(1,170	)		(1,959	)
Income before provision for income taxes and loss on equity method investments		6,087		4,399		17,203			13,151
Income before provision for income taxes and loss on equity method investment												9,555			7,663			23,989			12,109
Income tax expense		1,954		1,378		5,015			3,672			(2,725	)		(2,445	)		(7,224	)		(3,807	)
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 loss on equity method investment												6,830			5,218			16,765			8,302
Loss on equity method investment												—			(74	)		—			(87	)
Net income		4,018		2,841		11,962			9,170		$	6,830		$	5,144		$	16,765		$	8,215
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		$	.23		$	.17		$	.57		$	.28
Earnings per common share—assuming dilution	$	.14	$	.10	$	.40		$	.30		$	.23		$	.17		$	.55		$	.27
Weighted average shares outstanding—basic		29,193		28,957		29,064			28,886			29,602			29,930			29,639			29,834
Weighted average shares outstanding—assuming dilution		29,783		29,496		29,648			29,385			30,225			30,499			30,289			30,511

See notes to the ~~condensed consolidated financial statements.~~Condensed Consolidated Financial Statements.

For the Three Months
Ended September 30,

For the Nine Months
Ended September 30,

2017

2016

2017

2016

Net income

$
4,018

$
2,841

$
11,962

$
9,170

Comprehensive income:

Foreign currency translation adjustment

(67
)

(436
)

970

(888
)
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

	For the Three Months Ended June 30,					For the Six Months Ended June 30,
	2022			2021		2022		2021
Net income	$	6,830		$	5,144	$	16,765	$	8,215
Other comprehensive income (loss):
Foreign currency translation adjustment, net of tax effects		(6,064	)		2,914		1,016		411
Comprehensive income	$	766		$	8,058	$	17,781	$	8,626

		September 30, 2017			December 31, 2016				June 30, 2022			December 31, 2021
Current assets:
Cash and cash equivalents		$	9,045		$	7,869			$	22,057		$	16,285
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 $4,411 and $3,938, respectively										165,711			149,326
Other			3,630			3,429				13,208			9,595
Total receivables, net			103,673			87,206				178,919			158,921
Inventories			123,315			120,576				182,203			154,306
Prepaid expenses			13,543			11,424				16,368			12,488
Income taxes receivable										523			—
Total current assets			249,576			227,075				400,070			342,000
Property, plant and equipment, net			49,495			50,295				67,453			66,111
Intangible assets, net of applicable amortization			141,127			121,433
Operating lease right-of-use assets										24,449			25,386
Intangible assets, net										191,560			197,841
Goodwill										46,997			46,260
Other assets			28,917			31,153				13,099			16,292
		$	469,115		$	429,956
Deferred income tax assets, net										16			270
Total assets									$	743,644		$	694,160

LIABILITIES AND STOCKHOLDERS’ EQUITY	LIABILITIES AND STOCKHOLDERS’ EQUITY							LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current installments of other liabilities		$	99		$	26			$	1,367		$	802
Accounts payable			29,355			24,358				86,944			67,140
Deferred revenue			—			3,848
Customer prepayments										272			63,064
Accrued program costs			65,650			42,930				99,152			63,245
Accrued expenses and other payables			8,704			12,072				20,180			20,745
Income taxes payable			1,684			13,840				—			3,006
Current operating lease liabilities										5,029			5,059
Total current liabilities			105,492			97,074				212,944			223,061
Long-term debt, net of deferred loan fees			57,379			40,951
Other liabilities, excluding current installments			2,789			2,868
Deferred income tax liabilities			6,712			6,706
Long-term debt, net										100,779			52,240
Long-term operating lease liabilities										19,852			20,780
Other liabilities, net of current installments										5,584			5,335
Deferred income tax liabilities, net										19,651			20,006
Total liabilities			172,372			147,599				358,810			321,422
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
Preferred stock, $.10 par value per share; authorized 400,000 shares; NaN issued										—			—
Common stock, $.10 par value per share; authorized 40,000,000 shares; issued 34,443,234 shares at June 30, 2022 and 34,248,218 shares at December 31, 2021										3,445			3,426
Additional paid-in capital			74,423			71,699				103,456			101,450
Accumulated other comprehensive loss			(3,881	)		(4,851	)			(12,768	)		(13,784	)
Retained earnings			230,962			220,428				319,672			304,385
			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, 3,694,050 shares at June 30, 2022 and 3,361,040 shares at December 31, 2021										(28,971	)		(22,739	)
Total stockholders’ equity			296,743			282,357				384,834			372,738
		$	469,115		$	429,956
Total liabilities and stockholders' equity									$	743,644		$	694,160

See notes to the ~~condensed consolidated financial statements.~~Condensed Consolidated Financial Statements.

	Common Stock						Additional			Accumulated Other						Treasury Stock
	Shares			Amount			Paid-in Capital			Comprehensive Loss			Retained Earnings			Shares		Amount			Total
Balance, December 31, 2021		34,248,218		$	3,426		$	101,450		$	(13,784	)	$	304,385			3,361,040	$	(22,739	)	$	372,738
Common stock issued under ESPP		26,751			2			434			—			—			—		—			436
Cash dividends on common stock ($0.025 per share)		—			—			—			—			(736	)		—		—			(736	)
Foreign currency translation adjustment, net		—			—			—			7,080			—			—		—			7,080
Stock-based compensation		—			—			1,563			—			—			—		—			1,563
Stock options exercised; grants, termination and vesting of restricted stock units (net of shares in lieu of taxes)		(183,093	)		(18	)		(2,156	)		—			—			—		—			(2,174	)
Shares repurchased																	332,404		(6,219	)		(6,219	)
Net income		—			—			—			—			9,935			—		—			9,935
Balance, March 31, 2022		34,091,876			3,410			101,291			(6,704	)		313,584			3,693,444		(28,958	)		382,623
Cash dividends on common stock ($0.025 per share)		—			—			—			—			(742	)		—		—			(742	)
Foreign currency translation adjustment, net		—			—			—			(6,064	)		—			—		—			(6,064	)
Stock-based compensation		—			—			1,273			—			—			—		—			1,273
Stock options exercised; grants, termination and vesting of restricted stock units (net of shares in lieu of taxes)		351,358			35			892			—			—			—		—			927
Shares repurchased																	606		(13	)		(13	)
Net income		—			—			—			—			6,830			—		—			6,830
Balance, June 30, 2022		34,443,234		$	3,445		$	103,456		$	(12,768	)	$	319,672			3,694,050	$	(28,971	)	$	384,834

	Common Stock						Additional			Accumulated Other						Treasury Stock
	Shares			Amount			Paid-in Capital			Comprehensive Loss			Retained Earnings			Shares		Amount			AVD Total
Balance, December 31, 2020		33,922,433		$	3,394		$	96,642		$	(9,322	)	$	288,182			3,061,040	$	(18,160	)	$	360,736
Common stock issued under ESPP		25,120			2			338			—			—			—		—			340
Cash dividends on common stock ($0.02 per share)		—			—			—			—			(596	)		—		—			(596	)
Foreign currency translation adjustment, net		—			—			—			(2,503	)		—			—		—			(2,503	)
Stock-based compensation		—			—			1,792			—			—			—		—			1,792
Stock options exercised; grants, termination and vesting of restricted stock units (net of shares in lieu of taxes)		(73,231	)		(7	)		(2,787	)		—			—			—		—			(2,794	)
Net income		—			—			—			—			3,071			—		—			3,071
Balance, March 31, 2021		33,874,322			3,389			95,985			(11,825	)		290,657			3,061,040		(18,160	)		360,046
Cash dividends on common stock ($0.02 per share)		—			—			—			—			(600	)		—		—			(600	)
Foreign currency translation adjustment, net		—			—			—			2,914			—			—		—			2,914
Stock-based compensation		—			—			1,806			—			—			—		—			1,806
Stock options exercised; grants, termination and vesting of restricted stock units (net of shares in lieu of taxes)		387,329			39			22			—			—			—		—			61
Net income		—			—			—			—			5,144			—		—			5,144
Balance, June 30, 2021		34,261,651		$	3,428		$	97,813		$	(8,911	)	$	295,201			3,061,040	$	(18,160	)	$	369,371

Common Stock

Additional

Accumulated
Other

Treasury Stock

Non-

Shares

Amount

Paid-in
Capital

Comprehensive
Loss

Retained
Earnings

Shares

Amount

AVD
Total

Controlling Interest

Total

Balance, December 31, 2016

31,819,695

$
3,183

$
71,699

$
(4,851
)

$
220,428

2,450,634

$
(8,269
)

$
282,190

$
167

$
282,357

Stocks issued under ESPP

16,349

2

248

—

—

—

—

250

—

250

Cash dividends on common stock ($0.015
   per share)

—

—

—

—

(435
)

—

—

(435
)

—

(435
)
Foreign currency translation adjustment, net

—

—

—

757

—

—

—

757

—

757

Stock based compensation

—

—

1,080

—

—

—

—

1,080

—

1,080

Stock options exercised; grants, termination
   and vesting of restricted stock units (net
   of shares in lieu of taxes)

377,916

37

16

—

—

—

—

53

—

53

Net income

—

—

—

—

3,452

—

—

3,452

(39
)

3,413

Balance, March 31, 2017

32,213,960

3,222

73,043

(4,094
)

223,445

2,450,634

(8,269
)

287,347

128

287,475

Cash dividends on common stock ($0.015
   per share)

—

—

—

—

(437
)

—

—

(437
)

—

(437
)
Foreign currency translation adjustment, net

—

—

—

280

—

—

—

280

—

280

Stock based compensation

—

—

1,242

—

—

—

1,242

—

1,242

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
)
Net income

—

—

—

—

4,304

—

—

4,304

227

4,531

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

	For the Nine Months Ended September 30,						For the Six Months Ended June 30,
	2017			2016			2022			2021
Cash flows from operating activities:
Net income	$	11,962		$	9,170		$	16,765		$	8,215
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of fixed and intangible assets		12,358			12,367
Amortization of other long term assets		3,995			3,935
Amortization of discounted liabilities		20			28
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization of property, plant and equipment and intangible assets								11,004			10,697
Amortization of other long-term assets								1,739			2,044
Loss on disposal of property, plant and equipment								256			—
Accretion of discounted liabilities								17			(11	)
Amortization of deferred loan fees								139			162
Provision for bad debts								470			945
Loan principal and interest forgiveness								—			(672	)
Fair value adjustment to contingent consideration								635			1,013
Stock-based compensation		3,585			1,656			2,836			3,598
Excess tax benefit from exercise of stock options		—			(82	)
Increase in deferred income taxes		6			—
Loss from equity method investment		226			309
Change in deferred income taxes								109			(353	)
Change in fair value of an equity investment								403			(771	)
Loss on equity method investment								—			87
Adjustment to bargain purchase gain on business acquisition								—			121
Net foreign currency adjustments								(20	)		(145	)
Changes in assets and liabilities associated with operations:
Increase in net receivables		(15,746	)		(19,202	)		(18,645	)		(25,317	)
Increase in inventories		(2,213	)		(5,201	)		(27,774	)		(11,464	)
Increase in prepaid expenses and other assets		(3,678	)		(1,011	)		(3,652	)		(3,696	)
(Decrease) increase in income tax receivable/payable, net		(12,137	)		1,519
(Increase) decrease in income tax receivable/payable, net								(3,526	)		1,374
(Decrease) in net operating lease liability								(21	)		(120	)
Increase in accounts payable		4,556			7,925			19,439			6,190
Decrease in deferred revenue		(3,848	)		(8,847	)
Decrease in customer prepayments								(62,789	)		(30,407	)
Increase in accrued program costs		22,720			30,536			35,987			19,098
(Decrease) increase in other payables and accrued expenses		(3,562	)		3,098			(602	)		507
Net cash provided by operating activities		18,244			36,200
Net cash used in operating activities								(27,230	)		(18,905	)
Cash flows from investing activities:
Capital expenditures		(5,333	)		(6,122	)		(5,654	)		(5,075	)
Investment		(950	)		(3,283	)
Acquisition of product lines and other intangible assets		(25,904	)		(224	)
Proceeds from disposal of property, plant and equipment								27			—
Acquisition of product line								—			(10,000	)
Intangible assets								(1,044	)		(241	)
Investments								—			(184	)
Net cash used in investing activities		(32,187	)		(9,629	)		(6,671	)		(15,500	)
Cash flows from financing activities:
Payments under line of credit agreement		(59,025	)		(24,000	)		(56,600	)		(24,226	)
Borrowings under line of credit agreement		76,000			—			105,000			66,000
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
Payment of contingent consideration								—			(250	)
Net receipt from the issuance of common stock under ESPP								436			340
Net receipt from the exercise of stock options								765			167
Payment for tax withholding on stock-based compensation awards								(2,012	)		(2,900	)
Repurchase of common stock								(6,232	)		—
Payment of cash dividends		(1,161	)		(289	)		(1,330	)		(1,188	)
Net cash provided by (used in) financing activities		14,968			(24,544	)
Net cash provided by financing activities								40,027			37,943
Net increase in cash and cash equivalents		1,025			2,027			6,126			3,538
Effect of exchange rate changes on cash and cash equivalents		151			(957	)		(354	)		98
Cash and cash equivalents at beginning of period		7,869			5,524			16,285			15,923
Cash and cash equivalents at end of period	$	9,045		$	6,594		$	22,057		$	19,559

See notes to the ~~condensed consolidated financial statements.~~Condensed Consolidated Financial Statements.

1. Summary of Significant Accounting Policies —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 consolidating adjustments, eliminations and normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the ~~nine months~~three- and six-month periods ended ~~September~~June 30, ~~2017~~2022 are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2017. For further~~2022. 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.~~2021.

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- and six-month periods ended June 30, 2022 and 2021. During the three- and six-month periods ended June 30, 2022, the Company experienced strong demand for its domestic crop and international products, and generally more normal business activities including face-to-face meetings with customers and suppliers etc. The Company established a pandemic working group at the start of the COVID-19 pandemic.

Looking forward, 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, beyond extrapolating our experience since the start of the pandemic, cannot be predicted with confidence. The Company continues to monitor its business for adverse impacts of the pandemic, including some continuing volatility in foreign exchange markets, supply-chain disruptions in certain markets, and increased costs of employee safety, among others.

2. ~~Property, plant~~Leases — The Company has operating leases for warehouses, manufacturing facilities, offices, cars, railcars and ~~equipment at September 30, 2017 and December 31, 2016 consists~~certain equipment. The lease term includes the non-cancellable period of the ~~following:~~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 accompanying Condensed Consolidated Financial Statements. There were no lease transactions with related parties as of and for the three- and six-month periods presented in the table below.

The operating lease expense for the three-month period ended June 30, 2022, and 2021, was $1,619 and $1,442, respectively, and $3,223 and $2,896 for the six-month period ended June 30, 2022 and 2021, respectively. Lease expenses related to variable lease payments and short-term leases were immaterial. Additional information related to operating leases are as follows:

The ~~Company recognized depreciation expense~~weighted-average remaining lease term and discount rate related to ~~property, plant and equipment~~the operating leases as of ~~$2,033 and $2,021 for the three months ended September~~June 30, 2017 and 2016, respectively. During the three months ended September 30, 2017 and 2016, the Company eliminated from assets and accumulated depreciation $1,126 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, respectively, of fully depreciated assets.

~~Substantially all of the Company’s assets are pledged~~2022 were as ~~collateral with its banks.~~

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

~~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.

Weighted-average remaining lease term (in years)			6.33
Weighted-average discount rate			4.02	%

Future minimum lease payments under non-cancellable operating leases as of June 30, 2022 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~~1 reportable segment. Selective enterprise information of sales disaggregated by category and geographic region is as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Net sales:
U.S. crop	$	63,195	$	62,575	$	151,388	$	117,330
U.S. non-crop		21,316		21,488		34,712		38,941
Total U.S.		84,511		84,063		186,100		156,271
International		63,573		50,547		111,419		94,494
Total net sales:	$	148,084	$	134,610	$	297,519	$	250,765
Timing of revenue recognition:
Goods and services transferred at a point in time	$	148,047	$	134,493	$	297,376	$	250,464
Goods and services transferred over time		37		117		143		301
Total net sales:	$	148,084	$	134,610	$	297,519	$	250,765

Contract assets relate to royalties earned on certain functional licenses granted for the use of the Company’s intellectual property and amounted to $3,000 and $3,900 at June 30, 2022 and December 31, 2021, respectively. The short-term and long-term contract assets of $1,850 and $1,150 are included in other receivables and other assets, respectively, on the condensed consolidated balance sheets as of June 30, 2022. The short-term and long-term assets of $1,825 and $2,075 are included in other receivables and other assets, respectively, on the condensed consolidated balance sheets as of December 31, 2021.

The Company sometimes receives payments from its customers in advance of goods and services being provided in return for early cash incentive programs. These payments are included in Customer prepayments on the condensed consolidated balance sheets. Revenue recognized for the three- and six-month periods ended June 30, 2022, that was included in customer prepayments at the beginning of 2022, was $18,264 and $62,792, respectively. The Company expects to recognize all its remaining customer prepayments as revenue in fiscal 2022.

4. Property, Plant and Equipment — Property, plant and equipment at June 30, 2022 and December 31, 2021 consists of the following:

The Company recognized depreciation expense related to property and equipment of $1,974 and $1,673 for the three-month period ended June 30, 2022 and 2021, respectively. The Company recognized depreciation expense related to property and equipment of $4,077 and $3,844 for the six-month period ended June 30, 2022 and 2021, respectively.

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

5. Inventories — Inventories are stated at the lower of cost or net realizable value. Cost is determined using the first-in, first-out (“FIFO”) or average cost method. The components of inventories consist of the following:

6. Segment Reporting — Based on similar economic and operational characteristics, the Company’s business is aggregated into 1 reportable segment. Selective enterprise information is as follows:

Three Months Ended September 30,

Nine Months Ended September 30,

2017

2016

2017

2016

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

International

24,133

22,414

64,676

62,984

Total net sales:

$
89,975

$
82,447

$
238,553

$
224,645

	For the three months ended June 30,								��
	2022		2021		Change			% Change
Net sales:
U.S. crop	$	63,195	$	62,575	$	620			1	%
U.S. non-crop		21,316		21,488		(172	)		-1	%
U.S. total		84,511		84,063		448			1	%
International		63,573		50,547		13,026			26	%
Net sales:	$	148,084	$	134,610	$	13,474			10	%
Gross profit:
U.S. crop	$	29,753	$	26,805	$	2,948			11	%
U.S. non-crop		10,049		9,782		267			3	%
U.S. total		39,802		36,587		3,215			9	%
International		19,977		15,552		4,425			28	%
Total gross profit:	$	59,779	$	52,139	$	7,640			15	%

	For the six months ended June 30,
	2022		2021		Change			% Change
Net sales:
U.S. crop	$	151,388	$	117,330	$	34,058			29	%
U.S. non-crop		34,712		38,941		(4,229	)		-11	%
U.S. total		186,100		156,271		29,829			19	%
International		111,419		94,494		16,925			18	%
Net sales:	$	297,519	$	250,765	$	46,754			19	%
Gross profit:
U.S. crop	$	70,098	$	48,076	$	22,022			46	%
U.S. non-crop		16,014		19,165		(3,151	)		-16	%
U.S. total		86,112		67,241		18,871			28	%
International		34,860		30,029		4,831			16	%
Total gross profit:	$	120,972	$	97,270	$	23,702			24	%

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, which are usually made ~~to distributors, retailers or growers,~~ at the end of a growing ~~season.~~season, to distributors, retailers or growers. The Company describes these payments as “Programs”. Programs are a critical part of doing business in both the U.S. crop and non-crop chemicals marketplaces. These discount Programs represent variable consideration. 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~~reviews individual sale transactions with ~~programs~~Programs to determine what, if any, estimated program ~~liability has~~liabilities have been incurred. Once this initial calculation is made for the specific quarter, sales and marketing management, along with ~~executive and~~support from financial ~~management, review~~analysts, reviews 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~~Programs are ~~made at, or close to, the end of the crop season, at which time customer performance can be more fully assessed.~~then reviewed with executive management for final approval. 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~~three- and ~~nine months~~six-month periods ended ~~September~~June 30, ~~2017~~2022, and ~~2016, respectively.~~ 2021.

8. Cash Dividends on Common Stock —The Company has declared ~~and/or~~and paid the following cash dividends in the periods covered by this Form 10-Q:

~~7. ASC 260~~ 9. 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 of options to purchase shares of the Company’s common stock, are exercised.

For the ~~three~~three- and ~~nine months~~six-month periods ended ~~September~~June 30, ~~2017~~2022, and ~~2016, no~~2021, respectively, 0 stock options were excluded from the computation of diluted earnings per share.

8.10. Debt — The Company has a revolving line of credit that is shown as long-term debt in the condensed consolidated balance sheets at ~~September~~June 30, ~~2017~~2022 and December 31, ~~2016.~~2021. The Company has ~~no short term~~0 short-term debt as of ~~September~~June 30, ~~2017~~2022 and December 31, ~~2016. These are~~2021. The debt is summarized in the following table:

AsThe Company’s main bank is Bank of ~~June 30, 2017,~~the West, a wholly-owned subsidiary of the French bank, BNP Paribas. Bank of the West has been the Company’s bank for more than 40 years and is the syndication manager for the Company’s loans.

The Company and certain of its affiliates are parties to a revolving line of credit agreement entitled the “Third Amended and Restated Loan and Security Agreement” dated as of August 5, 2021 (the “Credit Agreement”), which is a senior secured lending facility among AMVAC, ~~Chemical Corporation (“AMVAC”),~~ the Company’s principal operating subsidiary, as ~~borrower,~~Borrower Agent, and ~~affiliates~~ (including the Company ~~AMVAC CV~~ and AMVAC BV), as ~~guarantors and/or borrowers, entered into a Third Amendment to Second Amended~~Borrowers, on the one hand, and ~~Restated Credit Agreement (the “Credit Agreement”) with~~ a group of commercial lenders led by Bank of the West ~~(AMVAC’s primary bank)~~ as administrative agent, ~~swing line lender~~documentation agent, syndication agent, collateral agent, sole lead arranger and ~~Letter of Credit (“L/C”) issuer.~~book runner, on the other hand. The Credit Agreement, ~~is a senior secured lending facility, consisting~~consists of a line of credit of up to ~~$250 million,~~$275,000, an accordion feature of up to ~~$100 million~~$150,000, a letter of credit and swingline sub-facility (each having limits of $25,000) and a maturity date of August 5, 2026. The Credit Agreement amends and restates the previous credit facility, which had a maturity date of June 30, 2022. ~~The~~With respect to key financial covenants, the Credit Agreement contains ~~two key financial covenants;~~two; namely, borrowers are required to maintain a ~~Consolidated Funded Debt~~Total Leverage (“TL”) Ratio of no more than 3.5-to-1, during the first three years, stepping down to 3.25-to-1 as of September 30, 2024, and a ~~Consolidated~~ Fixed Charge ~~Covenant~~Coverage Ratio of at least 1.25-to-1. In addition, to the extent that it completes acquisitions totaling $15 million or more in any 90-day period, AMVAC may step-up the TL Ratio by 0.5-to-1, not to exceed 4.00-to-1, for the next three full consecutive quarters. Acquisitions below $50 million do not require Agent consent. Distributions to the Company’s shareholders are limited to net income for the four fiscal quarter period ending on the fiscal quarter immediately prior to the fiscal quarter in which the current distribution was declared.

The Company’s borrowing capacity varies with its financial performance, measured in terms of Consolidated EBITDA as defined in the Credit Agreement, for the trailing ~~twelve month~~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”~~Margin” which is based upon the ~~Consolidated Funded Debt~~Total Leverage (“TL”) Ratio (“~~Eurocurrency Rate~~LIBOR Revolver 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~~Margin (“~~Alternate~~Adjusted Base Rate Revolver Loan”). Interest payments for ~~Eurocurrency Rate~~LIBOR Revolver 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~~Adjusted Base Rate Revolver Loans are payable on the last business day of each ~~month~~calendar quarter and the maturity date. The interest rate as of June 30, 2022 was 2.99%.

At ~~September~~June 30, ~~2017, according~~2022, the Company was compliant with all covenants to its current credit agreement. Also, at June 30, 2022, the ~~terms~~Company’s total Funded Debt amounted to $101,700. At that date the Company’s rolling four quarter Consolidated EBITDA (as defined in the Credit Agreement) amounted to $75,512, which results in a leverage ratio of 1.35, as compared to a maximum leverage ratio permitted under the Credit Agreement ~~and based on its performance against the most restrictive covenants listed above,~~of 3.5. At June 30, 2022, the Company ~~had~~has the capacity to increase its borrowings by up to ~~$124,724.~~$162,592, according to the terms thereof. This compares to an available borrowing capacity of ~~$95,985~~$56,906 as of ~~September~~June 30, ~~2016.~~2021. At December 31, 2021, the Company had borrowing capacity of $178,705. The level of borrowing capacity is driven by three factors: (1) our financial performance, as measured in EBITDA for both the trailing ~~twelve month~~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 TL Ratio).

As of the ~~number of times EBITDA~~date it was acquired by the Company ~~may borrow under its credit facility agreement).~~in October 2020, Agrinos had an existing Paycheck Protection Program (PPP) loan in the amount of $705. This PPP loan was granted on April 27, 2020. On January 7, 2021, the Small Business Administration forgave $667 in principal and $5 in interest of this PPP loan. As a result, the PPP loan was extinguished on January 7, 2021 and the total amount forgiven of $672 was recorded as other income in the Company’s condensed consolidated statements of operations and represents a non-cash financing activity on the condensed consolidated statement of cash flows for the six months ended June 30, 2021.

~~9. Reclassification—~~11. Reclassifications — Certain items may have been reclassified in the prior period condensed consolidated financial statements to conform with the ~~September~~June 30, ~~2017~~2022, presentation.

~~10.~~ 12. Comprehensive Income —Total comprehensive income includes, in addition to net income, changes in equity that are excluded from the ~~condensed~~condensed consolidated ~~statements~~statement of operations and are recorded directly into a separate section of stockholders’ equity on the condensed consolidated balance sheets. For the ~~three~~three- and ~~nine month~~six-month periods ended ~~September~~June 30, ~~2017~~2022, and ~~2016,~~2021, total comprehensive income consisted of net income attributable to American Vanguard and foreign currency translation adjustments.

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

13. Stock-Based Compensation — 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 and 2016.~~amortization period.

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		Stock-Based Compensation for the Six months ended		Unamortized Stock-Based Compensation		Remaining Weighted Average Period (years)
June 30, 2022
Restricted Stock	$	1,079	$	2,072	$	9,277		2.2
Unrestricted Stock		122		239		476		0.9
Performance-Based Restricted Stock		72		525		3,781		2.1
Total	$	1,273	$	2,836	$	13,534

June 30, 2021
Restricted Stock	$	1,167	$	2,223	$	9,734		2.2
Unrestricted Stock		107		217		367		0.9
Performance-Based Restricted Stock		532		1,158		4,186		2.1
Total	$	1,806	$	3,598	$	14,287

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

~~Information relating to~~also granted stock options ~~at September 30, 2017, summarized by exercise price is as follows:~~

~~The weighted average exercise prices for~~in past periods. All outstanding stock options ~~granted,~~are fully vested and exercisable and no expense was recorded during the ~~weighted average remaining contractual life for options outstanding as of September~~three- and six-month periods ended June 30, ~~2017, were as follows:~~2022, and 2021.

~~During the three months ended September 30, 2017~~Restricted 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~~ Unrestricted Stock — A summary of non-vested shares as of, and for, the ~~nine months~~three- and six-month periods ended ~~September~~June 30, ~~2017~~2022, and ~~2016~~2021 is presented below:

	Nine Months Ended September 30, 2017					Nine Months Ended September 30, 2016					Three and Six Months Ended June 30, 2022					Three and Six Months Ended June 30, 2021
	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		817,290		$	17.04		820,624		$	16.64
Granted		251,475			16.10		—			—
Vested		(10,100	)		12.95		(127,274	)		31.29		(230,080	)		17.31		(197,615	)		19.91
Forfeited		(6,544	)		15.26		(16,008	)		23.67		(24,109	)		17.10		(11,580	)		16.95
Nonvested shares at March 31^st		559,587			15.38		219,559			14.59		563,101			16.93		611,429			15.57
Granted		38,502			17.08		140,541			15.08		242,067			23.79		289,757			20.10
Vested		(188,400	)		15.22		(22,639	)		15.63		(27,482	)		22.35		(30,112	)		16.72
Forfeited		(6,593	)		15.55		(6,457	)		14.98		(14,070	)		18.53		(11,231	)		16.60
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
Nonvested shares at June 30^th												763,616		$	18.88		859,843		$	17.04

Common stock grants — During the nine months ended September 30, 2017, the Company issued a total of 290,977 shares of common stock to employees and directors. 24,312 shares vested immediately, 3,900 shares will vest in three equal tranches on the employee’s anniversary, 1,000 shares will cliff vest after one year of service, 2,500 shares will cliff vest after two years of service, and the remaining shares will cliff vest after three years of service. The shares granted in 2017 were average fair valued at $16.24 per share. The fair value was determined by using the publicly traded share price as of the date of grant. The Company will recognize as expense the value of restricted shares over the required service period.

During the 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, the Company had approximately $4,475 of unamortized stock-based compensation related to unvested restricted shares. This amount will be recognized over the weighted-average period of 1.2 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 Shares~~Performance-Based Restricted Stock —A summary of non-vested ~~performance based~~performance-based shares as of, and for, the ~~nine months~~three- and six-month periods ended ~~September~~June 30, ~~2017~~2022, and ~~2016,~~2021, respectively is presented below:

	Nine Months Ended September 30, 2017					Nine Months Ended September 30, 2016					Three and Six Months Ended June 30, 2022					Three and Six Months Ended June 30, 2021
	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		379,061		$	16.43		391,771		$	16.26
Granted		121,194			15.40		—			—
Additional granted (forfeited) based on performance achievement												(41,088	)		16.56		71,180			20.53
Vested												(78,704	)		17.18		(175,087	)		19.78
Forfeited		—			—		(9,395	)		17.65		(7,074	)		16.77		(505	)		19.26
Nonvested shares at March 31^st		240,216			14.80		95,008			16.99		252,195			16.17		287,359			15.16
Granted		7,400			15.88		52,170			14.39		83,190			23.63		102,043			20.03
Vested		(48,046	)		14.92		—			—
Forfeited		(12,560	)		12.92		(19,612	)		28.25		(7,829	)		17.50		—			—
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
Nonvested shares at June 30^th												327,556		$	16.58		389,402		$	16.44

~~Performance Based Shares~~Stock Options — ~~During the nine months ended September 30, 2017, the Company issued a total of 128,594 performance based shares to employees.~~ ~~The shares granted during the nine months of 2017 have an average fair value of $15.43. The fair value was determined by using the publicly traded share price as of the date of grant.~~ The Company ~~will recognize as expense the value of the performance based shares over the required service period from grant date.~~ ~~The shares will cliff vest on February 8, 2020 with a measurement period commencing January 1, 2017~~has stock options outstanding under its incentive stock option plans and ending December 31, 2019. Eighty percent of these performance based shares are based upon the financial performance of the Company, specifically, an earnings before income taxes (“EBIT”) goal weighted at 50% and a net sales goal weighted at 30%. The remaining 20% of performance based shares are based upon AVD stock price appreciation over the same performance measurement period. The EBIT and net sales goals measure the relative growth of the Company’s EBIT and net sales for the performance measurement period, as compared to the median growth of EBIT and net sales for an identified peer group. The stockholder return goal measures the relative growth of the fair market value of the Company’s stock price over the performance measurement period, as compared to that of the Russell 2000 Index and the median fair market value of the common stock of the comparator companies, identified in the Company’s 2016 Proxy Statement. All parts of these awards vest in three years, but are subject to reduction to a minimum (or even zero) for recording less than the targeted performance and to increase to a maximum of 200% for achieving in excess of the targeted performance.

During the 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 shares related to EBIT and net sales have an average fair value of $16.10 per share. The fair value was determined by using the publicly traded share price as of the date of grant. The performance based shares related to the Company’s stock price have an average fair value of $12.60 per share. The fair value was determined by using the Monte Carlo valuation method. For awards with performance conditions, the Company recognizes share-based compensation cost on a straight-line basis for each performance criteria over the implied service period.

During the three months ended September 30, 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, the Company had approximately $1,901 of unamortized stock-based compensation expense related to unvested performance based shares. This amount will be recognized over the weighted-average period of 2.0 years. This projected expense will change if any performance based shares are granted or cancelled prior to the respective reporting periods or if there are any changes required to be made for estimated forfeitures.

~~Performance Incentive Stock Options—During the nine months ended September 30, 2017 and 2016, the Company did not grant any employees~~ performance incentive stock option plan. All outstanding stock options ~~to acquire shares~~are vested and exercisable. The following tables present details for each type of ~~common stock.~~plan:

All the incentive stock ~~options at September 30, 2017 summarized by exercise price is as follows:~~

~~The weighted average exercise prices for options granted and exercisable and the weighted average remaining contractual life for~~ options outstanding as of ~~September~~June 30, ~~2017 are as follows:~~2022, have an exercise price per share of $11.49 and a remaining life of 30 months.

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

Activity for the ~~performance based options granted in 2014. Based on~~three- and six-month periods ended June 30, 2021:

All 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 standardoutstanding as of ~~January 1, 2017 on~~June 30, 2022, have an exercise price per share of $11.49 and a ~~prospective basis. The impact~~remaining life of ~~this adoption was not material.~~30 months.

~~12.~~ 14. Legal ~~Proceedings—~~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, 2021, except as described below.

EPA FIFRA/RCRA Matter. On November 10, 2016, the Company was served with a grand jury subpoena ~~out of~~from the ~~U.S. District Court~~United States Attorney’s Office for the Southern District of Alabama, seeking documents regarding the importation, transportation, and management of a specific pesticide. The Company retained defense counsel to assist in ~~which~~responding to the ~~U.S.~~subpoena and otherwise defending the Company’s interests. AMVAC is cooperating in the investigation.

Since April 2018, the Department of Justice (“~~DoJ”~~DOJ”) ~~sought production~~has conducted several interviews of ~~documents relating to~~AMVAC employees and issued supplemental document requests in connection with the ~~Company’s reimportation of depleted Thimet containers from Canada~~investigation. In November 2020, DOJ issued a second grand jury subpoena seeking records 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 intentionsrelated communications with regard to ~~either~~a submission made by the Company to the Environmental Protection Agency (“EPA”) in connection with a request to amend a pesticide’s registration. Soon thereafter, DOJ also identified the Company and one of its ~~theory~~non-executive employees as targets of the ~~case or potential criminal enforcement. Thus,~~government’s investigation. In January 2021, DOJ and EPA informed the Company that it is ~~too early~~investigating violations of two environmental statutes, the Federal Insecticide, Fungicide, and Rodenticide Act (“FIFRA”) and the Resource Conservation and Recovery Act (“RCRA”), as well as obstruction of an agency proceeding and false statement statutes. DOJ also identified evidence that it contends supports alleged violations with respect to ~~tell whether a loss is probable or reasonably estimable. Accordingly,~~both the Company ~~has~~and the individual target. As part of discussions regarding possible resolution, in October 2021, the Company presented its evaluation of the legal and factual issues raised by the government (which do not include any allegations of harm to human health or the environment) to both DOJ and USEPA. Further, three corporate witnesses were interviewed by the grand jury in Mobile, Alabama in February 2022. Following that interview, the individual target entered into a plea agreement which was entered by the court having jurisdiction in this matter in May 2022. The Company expects that talks regarding potential resolution will resume in the near future.

The governmental agencies involved in this investigation have a range of civil and criminal penalties they may seek to impose against corporations and individuals for violations of FIFRA, RCRA and other federal statutes including, but not limited to, injunctive relief, fines, penalties and modifications to business practices and compliance programs, including the appointment of a monitor. If violations are established, the amount of any fines or monetary penalties which could be assessed and the scope of possible non-monetary relief would depend on, among other factors, findings regarding the amount, timing, nature and scope of the violations, and the level of cooperation provided to the governmental authorities during the investigation. As a result, the Company cannot yet anticipate the timing or predict the ultimate resolution of this investigation, financial or otherwise, which could have a material adverse effect on our business prospects, operations, financial condition and cash flow. Accordingly, we have not recorded a loss contingency onfor this matter.

Harold Reed v. AMVAC et ~~al.~~al. During January 2017, the Company was served with two Statements of Claim that had been filed on March 29, 2016 with the Court of Queen’s Bench of Alberta, Canada (as case numbers 160600211 and 160600237) in which plaintiffs, Harold Reed (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~~Four other ~~things, that Amvac was negligent~~related matters were subsequently consolidated into this case (alleging loss of potatoes, damage to equipment, damage to Quonset huts and ~~failed to warn them~~loss of business income). The parties have exchanged written discovery, and depositions of persons most knowledgeable took place during the first quarter of 2019. Citing the length of the ~~risks~~cases’ pendency and the expense, in December 2019, plaintiff Reed voluntarily dismissed two actions (160600211 and 160600237) for no consideration. Over the course of ~~such application. Reed seeks damages~~2020, discovery was completed, and the parties held a mediation on March 11, 2021; however, no settlement was reached. The parties have set a second mediation to occur in August 2022. The Company continues to believe that it is not primarily at risk but that a loss is probable and reasonably estimable and, to that end, has recorded a loss contingency in an amount that is not material to its financial performance or operations cash flows.

Catalano v. AMVAC Chemical Corp. On June 6, 2022, AMVAC was served with a summons and complaint for a matter entitled Andrew Catalano and Ruth Catalano v. AMVAC in the Superior Court 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)(~~State of California, County of Orange (30-2022-01263987-CU-PL-CXC) in which ~~grower seeks $400 for alleged loss~~plaintiff, who worked as a professional applicator of ~~potatoes); (ii)~~ ~~James Houweling et al. v. Harold Reed et al.~~ ~~(No. 160104421)(in~~pesticides, including Orthene (for which ~~equipment owner~~AMVAC is registrant) seeks damages for ~~alleged lost equipment); (iii)~~ ~~Chin Coulee Farms, etc. v. Harold Reed et al.~~ ~~(No. 150600545)(in which owner~~an injury (specifically, cardiomyopathy) allegedly arising from his exposure to this product. AMVAC is unaware of ~~potatoes~~any link between cardiovascular disease and ~~truck seeks $530~~Orthene (which has been commercially available for ~~alleged loss thereof);~~over 30 years) 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~~this case has no merit and intends to defend ~~them~~it vigorously. The Company retained counsel and filed an answer in early July 2022, including multiple affirmative defenses. At this stage, inthere is not sufficient information to form a judgment as to either the ~~proceedings, however, it is too early to determine whether a loss is probable~~probability or ~~reasonably estimable; accordingly,~~amount of any loss; thus, the Company has not ~~recorded~~set aside 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 incurredreserve in connection with ~~the RAP will be material and has not recorded a loss contingency for these activities.~~this matter.

In November ~~2016, FASB~~2021, the Financial Accounting Standards Board (the “FASB”) issued ASU ~~2016-18,~~ ~~Statement~~No. 2021-10, “Disclosures by Business Entities about Government Assistance.” This ASU codifies new requirements to disclose information about the nature of ~~Cash Flows (Topic 230).~~ ~~The new standard requires that a statement of cash flows explain~~certain government assistance received, the ~~change during~~accounting policy used to account for the ~~period~~transactions, the location in the ~~total of cash, cash equivalents,~~financial statements where such transactions were recorded and ~~amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash~~significant terms and ~~restricted cash equivalents should be included~~conditions associated with ~~cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows.~~such transactions. 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 standardguidance is effective for annual periods beginning after December 15, ~~2017, including interim reporting periods within those annual periods. The~~2021. Effective January 1, 2022, the Company ~~has considered its activities with regard to such intra-entity transfers, does not expect the~~adopted ASU No. 2021-10 on a prospective basis. The adoption of ~~ASU 2016-16~~this standard was not material to ~~have a material impact on our~~the Company’s condensed consolidated financial ~~statements and will adopt the standard for the financial year beginning January 1, 2018.~~statements.

In ~~February 2016,~~October 2021, the FASB issued ASU ~~2016-02,~~ ~~Leases~~.2021-08, “Business Combinations (Topic 805): Accounting for Contract Assets and Liabilities from Contracts with Customers.” This ASU requires an acquiring entity to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 606. 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 standardASU is effective for fiscal years ~~beginning after December 15, 2018, including~~and 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 amendment to the standard, ASU 2016-08, to clarify the implementation guidance on principal versus agent considerations. Under the amendment, an entity is required to determine whether the nature of its promise is to provide the specified good or service itself (that is, the entity is a principal) or to arrange for that good or service to be

provided by the other party (that is, the entity is an agent). In April 2016, FASB issued another amendment to the standard, ASU 2016-10, to clarify identifying performance obligations and the licensing implementation guidance, which retaining the related principles for those areas. The standard and the amendments are effective for annual periods beginning after December 15, ~~2017, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period~~2022, 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~~early 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.~~permitted. 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.~~ adopting this ASU.

The Company ~~is in the process of determining what changes are needed~~reviewed all other recently issued accounting pronouncements and concluded that they were either not applicable or not expected 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~~significant impact ~~on the Company’s~~to its condensed 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—~~Instruments — The accounting standard for fair value measurements provides a framework for measuring fair value and requires certain 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.

The Company measures its 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. The Company may use various valuation techniques depending on the ~~respective carrying values~~terms and conditions of the ~~Company’s long-term debt payable~~contingent consideration including a Monte-Carlo simulation. This simulation uses probability distribution for each significant input to ~~bank.~~produce hundreds or thousands of possible outcomes and the results are analyzed to determine probabilities of different outcomes occurring.

~~16.~~ The following table illustrates the Company’s contingent consideration movements related to its business acquisitions:

The current portion of the contingent consideration in the amount of $1,367 and $1,501 is included in current installments of other liabilities and the long-term portion in the amount of $0 and $615 is included in other liabilities on the condensed consolidated balance sheets as of June 30, 2022 and 2021, respectively.

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

~~17. Equity Method Investments~~—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, 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, the Company recognized losses of $86 and $86, respectively, as a result of the Company’s ownership position in the Hong Kong Joint Venture. There were no similar losses recognized in the prior year comparative period.

18. ~~Cost Method Investment–~~Equity Investments—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~~June 30, ~~2017,~~2022 and 2021, the Company’s ownership position in Bi-PA iswas 15%. ~~At September 30, 2017,~~Since this investment does not have readily determinable fair value, the ~~carrying value~~Company has elected to measure the investment at cost less impairment, if any, and also records an increase or decrease for changes resulting from observable price changes in orderly transactions for the identical or a similar investment of ~~the Company’s investment in Bi-PA is $3,283.~~Bi-PA. The Company ~~utilizes the cost method of accounting with respect to this investment and~~ periodically ~~review~~reviews the investment for possible impairment. There was no0 impairment or observable price changes on the investment ~~as of September~~during the three- and six-month periods ended June 30, ~~2017.~~2022 and 2021. The investment is recorded within other assets on the condensed consolidated balance ~~sheets.~~sheets and amounted to $2,884 as of June 30, 2022 and December 31, 2021.

On April 1, 2020, AMVAC purchased 6.25 million shares, an ownership of approximately 8%, of common stock of Clean Seed Capital Group Ltd. (TSX Venture Exchange: “CSX”) for $1,190. The shares are publicly traded, have a readily determinable fair value, and are considered a Level 1 investment. The fair value of the stock amounted to $1,113 and $1,516 as of June 30, 2022 and December 31, 2021, respectively. The Company recorded a loss of $486 and $295 for the three-month period ended June 30, 2022 and 2021, respectively. The Company recorded a loss of $403 and a gain of $771 for the six months ended June 30, 2022 and 2021, respectively The investment is recorded within other assets on the condensed consolidated balance sheets.

19. Product and Business Acquisitions— The Company did not complete any acquisitions during the three- and six-month periods ended June 30, 2022, and 2021. However, the Company made a payment in the amount of $10,000 in June 2021 for the acquisition of a product line. The Company obtained control over the product line on July 1, 2021 and the acquisition was accounted for as an asset acquisition in Q3 2021.

20. Income Taxes – —Income tax expense ~~increased by $576 to end at an expense of $1,954~~was $2,725 and $2,445 for the ~~three months~~three-month period ended ~~September~~June 30, ~~2017, as compared to $1,378 for the comparable period in 2016.~~2022, and 2021, respectively. The effective tax rate for the quarter was ~~32.1%, as compared to 31.3% in~~28.5% and 31.9% for the ~~same~~three-month period ~~of the prior year.~~ ended June 30, 2022 and 2021, respectively. Income tax expense was ~~$5,015~~$7,224 and $3,807 for the ~~nine~~six months ended ~~September~~June 30, ~~2017, as compared to $3,672 for the nine months ended September 30, 2016.~~2022, and 2021, respectively. The effective tax rate for the ~~nine months~~six-month period ended ~~September~~June 30, ~~2017~~2022 and ~~2016~~2021, was ~~29.2%~~30.1% and ~~27.9%~~31.4%, respectively.For the three- and six-month periods ended June 30, 2022, the rate decreased compared to the same periods of 2021 reflecting the mix of income in different jurisdictions and an increase in tax benefit from the vesting of certain stock grants. For tax years beginning after December 31, 2021, the Tax Cuts and Jobs Act (“TCJA”) of 2017 amends Internal Revenue Code Section 174 Costs wherein research and development expenditures will no longer be deducted in the tax year that such costs are incurred but must now be capitalized and amortized over either a five- or fifteen-year period, depending on the location of the activities performed. 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 the first quarter of 2017, the Company adopted ASU 2016-09, “Improvement to Employee Share-Based Payment Accounting,” which simplifies several aspects of the accounting for share-based payments, including treatment of excess tax benefits and forfeitures, as well as consideration 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. For the nine months ended September 30, 2017, a discrete tax benefit of $333 was recognized as part of the income tax expense.

The Company has effectively settled its examination with the Internal Revenue Service (“IRS”) for the tax years ended December 31, 2012 and 2014. As a result, the Company increased deferred tax assets and income taxes payable at December 31, 2016 by $12,598. The Company’s 2015 federal income tax return is still subject to IRS examination. The Company’s state income tax returns are subject to examination for the 2012 through 2015 tax years. On April 3, 2017, 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 consideration of $25,100. The preliminary allocation of the purchase price was $22,000 to product rights, $1,900 to trademarks, and $1,200 to customer lists.

The operating results of these acquisitions are immaterial to the accompanying condensed consolidated financial statements individually and in the aggregate. Therefore, pro forma financial data is not presented.

On June 6, 2017, the Company’s principal operating subsidiary, Amvac Chemical Corporation, completed an acquisition of certain assets relating to the abamectin, chlorothalonil and paraquat product lines from a group of companies, including Adama Agricultural Solutions, Ltd. The consideration for the acquired assets was paid in cash and has initially been allocated to inventory and intangible assets. ~~The acquired products were included in the Company’s results of operations from June 6, 2017 (the date of acquisition).~~

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 –~~Stock Re-purchase Program— On ~~October 2, 2017,~~March 8, 2022, pursuant to a Board of Directors resolution, the Company announced its intention to repurchase an aggregate number of up to 1,000,000 shares of its common stock, par value $0.10 per share, in the open market over the succeeding one year at a price not to exceed $20 per share, subject to limitations and restrictions under applicable securities laws.

The table below summarizes the number of shares of the Company’s ~~subsidiary, AMVAC Chemical, completed its acquisition of OHP, Inc., a US-based distribution company specializing in~~common stock that were repurchased during the ~~greenhouse~~three- and ~~nursery production markets throughout~~six-month periods ended June 30, 2022. There were no such purchases during the ~~United States~~three- and ~~Puerto Rico. OHP will continue to operate in its horticultural markets using OHP brands.~~six-month periods ended June 30, 2021.

~~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.22. Supplemental Cash Flow Information

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 Annual 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.~~3., Quantitative and Qualitative Disclosures about Market Risk, and Part II, Item 1A., Risk Factors, in ~~the Company’s Annual~~this Quarterly Report on Form ~~10-K for the year ended December 31, 2016.~~10-Q.

During the second quarter of 2022, the agriculture industry proceeded further into the second year of an upcycle, following a multi-year downcycle. While subject to intra-day fluctuations, commodity prices for row crops, which are largely driven by global conditions, were consistently strong. Consequently, the domestic farm economy showed continued resiliency. Geopolitical conditions, particularly the prolonged invasion of Ukraine, provided further price support for corn (and, consequently, soybeans), wheat and sunflower oil, as well as fertilizers. With improved supply chain conditions and a stronger U.S. dollar, domestic companies experienced enhanced buying power. Despite the advent of the BA5 variant, in the face of higher vaccination rates, the COVID-19 pandemic has shifted into an endemic in most regions. Amidst these factors and following on the heels of an extremely strong first quarter, the Company’s overall operating results for the second quarter ~~ended September 30, 2017 included~~of 2022 improved in most respects, as compared with those of the same period of 2021. Led by the strong sales growth of ~~$89,975, which~~our international business, consolidated net sales increased by 10% (to end at $148,084 as compared to $134,610) and net income increased by 33% (to $6,830 from $5,144).

On a consolidated basis, domestic sales rose 1% and international sales increased 26%, resulting in an overall net sales improvement of 10%. In comparison, cost of sales increased by 7% or $5,834. This lower comparative increase was a result of higher selling prices and a favorable mix of higher-margin products in the second quarter of 2022, as compared to the same period of the prior year. Cost of sales were ~~up approximately 9%~~60% of sales in the second quarter of 2022, as compared to 61% for the same period of 2021. These factors, taken together, yielded a 15% increase in gross profit (to $59,779 from $52,139 in the comparable quarter of 2021), while overall gross margin percent improved to 40% from 39% quarter-over-quarter.

Operating expenses increased to 33% of net sales (or $48,966), as compared to ~~sales~~32% (or $43,080) in the same period of ~~$82,447~~the prior year primarily due to legal and other expenses amounting to $1,785 relating to proxy defense activity in the reporting period. Absent those expenses, our operating expenses would have been at 32%, in line with the same period of the prior year.

Operating income for the ~~third~~period increased by 21% (to $10,813 from $8,971), driven by the overall sales increase, higher selling prices and improved factory utilization. Interest expense was 24% lower than the same period of 2021, driven by lower average levels of debt, which was aided by a second consecutive year of strong customer participation in early pay programs. These factors yielded net income for the period of $6,830, a 33% increase over compared to $5,144 in the second quarter of ~~2016.~~ 2021. Details on our financial performance are set forth below.

	2022			2021			Change			% Change
Net sales:
U.S. crop	$	63,195		$	62,575		$	620			1	%
U.S. non-crop		21,316			21,488			(172	)		-1	%
Total U.S.		84,511			84,063			448			1	%
International		63,573			50,547			13,026			26	%
Total net sales:	$	148,084		$	134,610		$	13,474			10	%
Cost of sales:
U.S. crop	$	33,442		$	35,770		$	(2,328	)		-7	%
U.S. non-crop		11,267			11,706			(439	)		-4	%
Total U.S.		44,709			47,476			(2,767	)		-6	%
International		43,596			34,995			8,601			25	%
Total cost of sales:	$	88,305		$	82,471		$	5,834			7	%
Gross profit:
U.S. crop	$	29,753		$	26,805		$	2,948			11	%
U.S. non-crop		10,049			9,782			267			3	%
Total U.S.		39,802			36,587			3,215			9	%
International		19,977			15,552			4,425			28	%
Total gross profit	$	59,779		$	52,139		$	7,640			15	%
Gross margin:
U.S. crop		47	%		43	%
U.S. non-crop		47	%		46	%
Total U.S.		47	%		44	%
International		31	%		31	%
Total gross margin		40	%		39	%

Our ~~gross profit performance ended at $38,032 or 42%~~domestic crop business recorded net sales that were 1% higher than those of ~~sales,~~the second quarter of 2021 ($63,195, as compared to ~~$32,986 or 40%~~$62,575). Led by Dacthal, Impact, Assure II and Envoke, offset to a degree by lower sales of our Classic and Python brands. The herbicide brands showed strong growth across all markets, as weed management planning has become instrumental in controlling resistant weeds in cotton, sugarcane, soybeans, corn and high value crops. Our lead brands in cotton generated positive growth during the quarter due, in the case of Bidrin, to increased early season pest pressure, and, in the case of Folex, to an anticipated early harvest season as hot dry weather pushes cotton maturity ahead of seasonal norms. Partially offsetting these gains, sales of Thimet, Aztec and Counter were down in the quarter following unusually high demand in the first quarter. Further, lingering drought conditions in our Western and Southwestern markets adversely impacted our soil fumigant sales, as water allocations have limited annual crop production in those regions. Drier conditions also suppressed sales of Dibrom during the period.

Cost of sales ~~for~~within the ~~comparable~~domestic crop business decreased by 7% (from $35,770 in 2021 to $33,442 in 2022) primarily as a result of selling more, higher-margin products. As the result of better pricing and favorable factory performance, domestic crop generated an 11% increase in gross profit (from $26,805 in the first quarter ~~last year. Operating costs increased~~of 2021 to ~~35%~~$29,753 this year) on a 1% increase in sales.

Our domestic non-crop business posted nearly flat net sales in the second quarter of sales 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,~~2022, as compared to the same period in ~~2016. Sales~~the prior year (down 1% to $21,316 from $21,488 in 2021). In the quarter, relief from pandemic restrictions – primarily return to in-person school and work – has had a two-pronged effect on our non-crop business. On the one hand, the demand for nursery, ornamental and consumer products for the ~~period were up approximately 6%~~home declined, as people spent less time in their homes. On the other hand, we saw an uptick in demand for goods that we supply to ~~$238,553,~~professional applicators and landscapers, as ~~compared~~homeowners shifted from do-it-yourself 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 strongusing professional services. In addition, we enjoyed higher sales of our ~~mosquito control insecticide Dibrom®~~pharmaceutical products from GemChem, while seeing an offsetting softness in the ~~aftermath~~turf supply market, as golfing activity declined.

Cost of sales within the domestic ~~hurricanes. Our international sales were up 8% for~~non-crop business declined by 4% in 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 thirdsecond 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,~~2022, as compared to the same period in ~~2016. That increase arose as~~ the ~~Company incurred one-time costs (of approximately $800) related~~prior year (from $11,706 in 2021 to ~~multiple acquisitions. In addition, we incurred higher regulatory costs relating~~$11,267 in 2022), primarily resulting from improved factory performance and associated overhead cost recovery. Gross profit for domestic non-crop increased by 3% (from $9,782 in 2021 to ~~re-registration requirements for several of our organophosphate active ingredients, which constitute an important part of the Company’s portfolio, and heightened investment~~$10,049 in ~~product development to help fill our pipeline with new products (of approximately $1,440)~~2022). 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.

Net sales of our international businesses rose by 26% during the period ($63,573 in 2022 vs. $50,547 in 2021) and constituted 43% of our consolidated sales. These businesses benefited from sales increases in soil fumigants, foliar insecticides, soil insecticides and fungicides across many regions. Our Central American business enjoyed increased demand in the pineapple, banana and citrus markets, including stronger sales of our Greenplants micronutrient solutions. In Mexico, despite drought conditions in the north, our Mexico business experienced good performance from at-plant fumigants and herbicides on high-value crops. Our Brazilian business benefited from increased sales of Counter on corn, while our Australian operations posted stronger sales in light of increased rainfall, heavy demand for molluscicides as well as insecticide products for use on canola, winter wheat and pulse.

Cost of sales in our international business increased by 25% (from $34,995 in 2021 to $43,596 in 2022), on sales that increased by 26% and was impacted by cost increases (including logistics and freight) of the third-party products that we distribute. Gross profit for the international businesses increased by 28% (to $19,977 in 2022 from $15,552 in 2021).

On a consolidated basis, gross profit for the second quarter of 2022 increased by 15% (from $52,139 in 2021 to $59,779 in 2022). Overall gross margin percentage ended at 40% in the second quarter of 2022, as compared to 39% in the second quarter of the prior year. The primary driver for this increase was higher selling prices coupled with improved factory performance, partially offset by inflation on raw materials and logistics and, for our international businesses, higher purchases costs related to increases in the US Dollar.

Operating expenses increased by $5,886 to $48,966 for the three-month period ended June 30, 2022, as compared to the same period in 2021. The differences in operating expenses by department are as follows:

~~Selling expenses decreased by $425 to end at $6,671~~On April 1, 2020, the Company made a strategic investment in Clean Seed Inc., in the amount of $1,190. The Company recorded negative fair value adjustments in the amount of $486 and $296 for the three months ended ~~September~~June 30, ~~2017, as compared to the same period of 2016. The main driver for the decrease is related to lower costs associated with quality claims.~~

Interest costs net of capitalized interest were ~~$375~~$772 in the ~~three months~~three-month period ended ~~September~~June 30, ~~2017,~~2022, as compared to ~~$301~~$1,013 in the same period of ~~2016.~~2021. Interest costs are summarized in the following table:

	Three months ended September 30, 2017								Three months ended September 30, 2016								Three months ended June 30, 2022								Three months ended June 30, 2021
	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	%	$	124,184	$	745			2.4	%	$	163,140	$	984			2.4	%
Amortization of deferred loan fees		—		57			—			—		62			—			—		69			—			—		80			—
Subtotal		44,897		377			3.4	%		44,617		303			2.7	%
Notes payable		—		—			—			9		—			—
Amortization of other deferred liabilities		—		7			—			—		9			—			—		11			—			—		(25	)		—
Other interest expense		—		7			—			—		11			—			—		12			—			—		39			—
Subtotal		44,897		391			3.5	%		44,626		323			2.9	%		124,184		837			2.7	%		163,140		1,078			2.6	%
Capitalized interest		—		(16	)		—			—		(22	)		—			—		(65	)		—			—		(65	)		—
Total	$	44,897	$	375			3.3	%	$	44,626	$	301			2.7	%	$	124,184	$	772			2.5	%	$	163,140	$	1,013			2.5	%

The Company’s average overall debt for the ~~three months~~three-month period ended ~~September~~June 30, ~~2017~~2022 was ~~approximately flat at $44,897,~~$124,184, as compared to ~~$44,626~~$163,140 for the ~~three~~three-month period ended June 30, 2021. Our borrowings in the three-month period ended June 30, 2022, were lower mainly due to cash generated over the last 12 months used to pay down debt, partially offset by the acquisition activity over the same period and growth in working capital in support of business growth. As can be seen from the table above, the effective bank interest rate on our revolving line of credit was 2.4% at each of the three-month period ended June 30, 2022 and 2021.

Income tax expense increased by $280 to $2,725 for the three-month period ended June 30, 2022, as compared to $2,445 for the comparable period in 2021. The effective tax rates for the three-month period ended June 30, 2022, and 2021, were 28.5% and 31.9%, respectively. 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. The decrease in effective tax rate was primarily driven by the mix of our domestic and international income and benefit from the tax impact of the vesting of certain stock grants.

Our net income for the three-month period ended June 30, 2022, was $6,830 or $0.23 per basic and diluted share, as compared to $5,144 or $0.17 per basic and diluted share in the same quarter of 2021.

Within the global agricultural industry, the first six months of 2022 were a prolongation of the upcycle that began in 2021. Commodity prices remained high, driven in part by the Russian invasion of Ukraine, which has served to reduce exports from both Russia and Ukraine, of corn, wheat, sunflower oil and fertilizer inputs into the global market, and a stronger farm economy in the U.S. Following extraordinary activity in the first quarter, domestic distribution within our industry slowed procurement modestly during the second quarter. Our international businesses, for the most part, enjoyed strong market conditions in nearly all regions during the first half of the year. All told, the Company’s overall operating results for the first six months of 2022 improved considerably over those of the same period of 2021.

On a consolidated basis, with domestic sales up 19% and international sales up by 18%, overall net sales increased by 19% (to $297,519 from $250,765). Cost of sales were up 15% on an absolute basis but decreased as a percent of net sales to 59% from 61%. Factory performance improved during the first half of 2022, as compared to that of 2021. These factors, taken together, yielded an increase in gross profit, which was up $23,702 or 24% (to $120,972 from $97,270) and improved to 41% of net sales, up from 39% during the first half of 2021. In the first half of 2022, while operating expenses rose on an absolute basis by 13%, these costs declined as a percent of net sales to 32% from 34% for the same period of the prior year.

Interest expense declined by 40%, while income tax expense increased primarily as a result of stronger financial performance partially offset by a decrease in effective tax rate compared to the first half of the prior year (at 30.1% in 2022 and 31.4% in the prior year). Overall, the Company’s net income for the period increased by a factor of two, ending at $16,765, as compared to $8,215 during the first half of the prior year. Details on our financial performance are set forth below.

	2022			2021			Change			% Change
Net sales:
U.S. crop	$	151,388		$	117,330		$	34,058			29	%
U.S. non-crop		34,712			38,941			(4,229	)		-11	%
Total U.S.		186,100			156,271			29,829			19	%
International		111,419			94,494			16,925			18	%
Total net sales:	$	297,519		$	250,765		$	46,754			19	%
Cost of sales:
U.S. crop	$	81,290		$	69,254		$	12,036			17	%
U.S. non-crop		18,698			19,776			(1,078	)		-5	%
Total U.S.		99,988			89,030			10,958			12	%
International		76,559			64,465			12,094			19	%
Total cost of sales:	$	176,547		$	153,495		$	23,052			15	%
Gross profit:
U.S. crop	$	70,098		$	48,076		$	22,022			46	%
U.S. non-crop		16,014			19,165			(3,151	)		-16	%
Total U.S.		86,112			67,241			18,871			28	%
International		34,860			30,029			4,831			16	%
Total gross profit	$	120,972		$	97,270		$	23,702			24	%
Gross margin:
U.S. crop		46	%		41	%
U.S. non-crop		46	%		49	%
Total U.S.		46	%		43	%
International		31	%		32	%
Total gross margin		41	%		39	%

Our domestic crop business recorded net sales that were 29% above those of first half of 2021 (to $151,388 from $117,330) Assisted by consistently high commodity prices and a strong domestic farm economy, the Company experienced strong demand across all product categories. Further, with our domestic production capacity, we were able to meet demand in spite of international supply constraints. Our herbicide portfolio for use on corn, soybeans, cotton and sugar cane, and our granular soil insecticides both grew by approximately 60%. Foliar insecticides grew by 20% in the first half versus 2021. The only area of reduced demand was for soil fumigants, which experienced lower sales due to drought conditions in Western and Southwestern states where water allocation has been implemented. During the first half of 2022, customer procurement activity was exceptionally high in the first quarter and then stepped down to a more normalized level in the second quarter.

Cost of sales within the domestic crop business increased 17%, as compared to the first six months of 2021, driven by sales that increased by 29% including increased sales of higher margin products (many of which we manufacture in our domestic facilities) and benefitting from improved factory performance. Gross profit rose by 46% to $70,212 from $48,076.

Our domestic non-crop business recorded an 11% decrease in net sales for the first half of the year (to $34,712 from $38,941). This decrease was largely due to a one-time license fee from P&G relating to Envance technology that had been received in the first half of 2021 and was recorded as revenue. Under the terms of that license, depending upon the achievement of commercialization milestones by the licensee, the Company will receive royalties in future reporting periods. Furthermore, in this category, sales of our Dibrom® mosquito adulticide remained flat as did demand for commercial pest control products (pest strips, bifenthrin). Sales of our OHP nursery and ornamental business were comparable to the same period of the prior year, with reduced demand for homeowner garden and landscape products resulting from continually reducing pandemic restrictions, offset by increased demand from professional landscape service providers.

Cost of sales within the domestic non-crop business decreased by 5%, (to $18,698 in 2022 from $19,776 in 2021). Gross profit for domestic non-crop decreased by 16% to $16,014 in 2022 from $19,165 in 2021, due largely to the non-recurrence of a one-time, upfront license fee as described above.

Net sales of our international businesses increased by 18% during the first half of 2022 (to $111,419 in 2022 from $94,494 in 2021). Central America experienced double-digit growth in all but one of its six countries. Mexico generated strong results with continuing demand for soil fumigants (on high-value crops), herbicides and granular insecticides. Similarly, Australia enjoyed improved sales driven by improved rainfall and the extended footprint arising from the integration of the AgNova business. Brazil is now on an upward trend, due to a rebound in the agricultural sector and further market penetration of our granular insecticides.

Cost of sales in our international business increased by 19% (to $76,559 in 2022 from $64,465 in 2021) primarily driven by volume growth and impacted by increased prices from the strengthening US Dollar, and general inflation on materials and associated logistics costs. Gross profit for the international businesses increased by 16% to $34,860 in 2022 from $30,029 in 2021.

On a consolidated basis, gross profit for the six months of 2022 increased by 24% (to $120,972 in 2022 from $97,270 in 2021). This is the same rate of growth that we had seen last year, when we compared the first half of 2021 with that of 2020. Our gross profit in the first six months of 2022 increased in part as a result of improved sales volumes and pricing in part due to improved factory performance. Gross margin performance, when expressed as a percentage of sales, rose to 41% from 39% year-over-year.

Operating expenses increased by $10,886 to $95,410 for the six-month period ended June 30, 2022, as compared to the same period in 2021. The differences in operating expenses by department are as follows:

During the six-month period ended June 30, 2022, the Company recorded a decrease in the fair value of our equity investment in Clean Seed in the amount of $403 and recorded an increase in the amount of $771 during the six months ended June 30, 2021. These changes in fair value of our investment directly reflect changes in the stock’s quoted market price.

During the six-month period ended June 30, 2021, a Paycheck Protection Program loan assumed on the acquisition of Agrinos in the fourth quarter of 2020 was fully extinguished with the majority of the balance forgiven and recorded as other income in the Company’s condensed consolidated statements of operations in the amount of $672.

Interest costs net of capitalized interest were $1,170 in the first six-month period of 2022, as compared to $1,959 in the same period of 2021. Interest costs are summarized in the following table:

	Six months ended June 30, 2022								Six months ended June 30, 2021
	Average Debt		Interest Expense			Interest Rate			Average Debt		Interest Expense			Interest Rate
Revolving line of credit (average)	$	105,076	$	1,146			2.2	%	$	144,324	$	1,843			2.6	%
Amortization of deferred loan fees		—		138			—			—		161			—
Amortization of other deferred liabilities		—		17			—			—		(9	)		—
Other interest (income) expense		—		21			—			—		89			—
Subtotal		105,076		1,322			2.5	%		144,324		2,084			2.9	%
Capitalized interest		—		(152	)		—			—		(125	)		—
Total	$	105,076	$	1,170			2.2	%	$	144,324	$	1,959			2.7	%

The Company’s average overall debt for the six-month period ended June 30, 2022, was $105,076, as compared to $144,324 for the six months ended June 30, 2021. During the period, we continued to focus on ~~managing~~ our use of revolving debt, while funding 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.~~for the growing business. As can be seen from the table above, our effective bank interest rate on our revolving line of credit was ~~3.4%~~2.2% for the ~~three~~six months ended ~~September~~June 30, ~~2017,~~2022, as compared to ~~2.7%~~2.6% in ~~2016.~~2021.

Income tax expense increased by ~~$576~~$3,417 to end at ~~an expense of $1,954~~$7,224 for the ~~three months~~six-month period ended ~~September~~June 30, ~~2017,~~2022, as compared to ~~$1,378~~income tax expense of $3,807 for the comparable period in ~~2016.~~2021. The effective tax rate for the ~~quarter~~six months ended June 30, 2022, was ~~32.1%,~~30.1% as compared to ~~31.3%~~31.4% for same period last year. The rate has decreased compared to prior year reflecting a mix of income in different jurisdictions and an increased benefit from the vesting of certain stock grants. For tax years beginning after December 31, 2021, the Tax Cuts and Jobs Act (“TCJA”) of 2017 amends Internal Revenue Code Section 174 costs wherein research and development expenditures will no longer be deducted in the ~~same~~tax year that such costs are incurred but must now be capitalized and amortized over either a five- or fifteen-year period, depending on the location of the prior year. Our 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, theactivities performed.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 recognized a loss of $29 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 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 majority owned subsidiary, Envance.

Our ~~overall~~ net income for the ~~three months~~six-month period ended ~~September~~June 30, ~~2017~~2022 was ~~$4,089~~$16,765 or ~~$0.14~~$0.57 per basic and ~~diluted share, as compared to $2,877 or $0.10 per basic and diluted share in the same period of 2016.~~

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 nine months ended September 30, 2017 improved by nearly 6% to end at $238,553, as compared to $224,645, this time last year. This year-over-year improvement was driven by three major factors: first, our cotton products generated strong sales arising from an increase 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, net sales of our insecticides group were up approximately 14% to end at $102,249, as compared to $89,496 during the nine months ended September 30, 2016. Within this category, net sales of our non-granular insecticides increased 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, 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 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 offset 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% at $64,676, as compared to $62,984 for the first nine month of the prior year. This was a result of increase in sales in our Counter and Aztec products that is somewhat offset 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 to $132,761 or 59% of net sales in the same period of 2016. The decrease in cost of sales as a percentage of net sales in 2017 was primarily the result of three drivers: first, our purchasing team has 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 primarily driven by strong market performance in some of our key markets.

Gross profit for the nine months ended September 30, 2017 improved by $10,567, or 12%, to end at $102,451, 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% in the same period of the prior year. This strong performance was primarily driven by containing raw material pricing, effective production planning and favorable sales mix performance.

As discussed below in detail by department, operating expenses increased by $6,746 to $84,175 for the nine months ended September 30, 2017, 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 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 in the same period of 2016. Interest costs are summarized in the following table:~~

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
%

The Company’s average overall debt for the nine months ended September 30, 2017 was $44,706, 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% in the same period of the prior year. Our 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, 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, as compared to $253 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 and $0.40~~$0.55 per diluted share, as compared to ~~$8,917~~$8,215 or ~~$0.31~~$0.28 per basic and ~~$0.30~~$0.27 per diluted share in the same period of ~~2016.~~2021.

~~Although our~~The Company’s operating activities utilized net ~~income for~~cash of $27,230 during the ~~nine months~~six-month period ended ~~September~~June 30, ~~2017 increased by $2,792~~2022, as compared to $18,905 during the ~~same period~~six months ended June 30, 2021. Included 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~~$27,230 are net income 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:~~$16,765, plus non-cash depreciation, amortization of intangibles and other ~~long term~~ assets and discounted future liabilities, ~~generated $16,373,~~in the amount of $12,760, loss on disposal of property, plant and equipment of $256, amortization of deferred loan fees of $139 and provision for bad debts in the amount of $470. Also included are stock-based compensation of $2,836, adjustment to contingent consideration in the amount of $635, increase in deferred income taxes of $109, change in fair value of an equity investment of $403, and net foreign currency adjustments of $20. These together provided net cash inflows of $34,353, as compared to ~~$16,330 in~~$24,930 for the ~~prior year; stock based compensation~~same period of ~~$3,585~~2021.

During the six-month period of 2022, the Company increased working capital by $68,187, as compared to ~~$1,656 for~~an increase of $43,715 during the ~~nine months ended September 30, 2016; and other non-cash adjustments including loss from equity method investment provided a net cash inflow~~same period of ~~$32,152,~~the prior year. Included in this change: inventories increased by $27,774, as compared to ~~$27,383~~$11,464 for the same period of 2021. While increases in inventory are normal for the Company’s annual cycle, this year, the Company has made decisions to bring in raw materials earlier than in prior seasons in order to secure our needs of key materials for the balance of the year and the start of the next growing season.

Customer prepayments decreased by $62,789, as compared to $30,407 in the same period of ~~2016.~~

~~As of September 30, 2017,~~2021, driven by customer decisions regarding demand, payment timing and our ~~working capital~~cash incentive programs. Our accounts payable balances increased ~~to $144,084,~~by $19,439, as compared to ~~$130,001 at December 31, 2016. This change was mainly driven by the~~an 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~~$6,190 in the same period of ~~2016. At September 30, 2017 accounts~~2021, driven by increased factory activity levels. Accounts receivables increased by $18,645, as compared to an increase of $25,317 in the same period of 2021. This is primarily driven by increased group sales and strong international growth. Prepaid expenses increased by $3,652, as compared to $3,696 in the same period of 2021. Income tax receivable increased by ~~9%,~~$3,526, as compared to a decrease of $1,374 in the ~~balance as of September 30, 2016. During the nine months ended September 30, 2017 the level of accounts receivable~~prior year. Accrued programs increased by ~~$15,746,~~$35,987, as compared to ~~December 31, 2016. This change is driven by timing and by the mix of sales of products, customers and regions~~$19,098 in the ~~period to September 30, 2017.~~

~~Inventories at September 30, 2017 ended at $123,315 ($141,678 at September 30, 2016),~~prior year, which ~~was an increase of $2,213 as compared to December 31, 2016. It~~ is normal at this point in the ~~agricultural season~~growing season. Finally, other payables and accrued expenses decreased by $602, as compared to ~~see~~an increase of $507 in the prior year.

With regard to our ~~inventories~~program accrual, the increase (as noted above) primarily reflects our volume and mix of sales (certain products are marketed with higher levels of program accruals), and customers in the first six months of 2022, as ~~we work~~compared 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.~~

prior 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~~first six months ~~ended September 30, 2017,~~of 2022, the Company made accruals for programs in the amount of $67,274 and payments in the amount of $31,367. During the first six months 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$39,235 and made payments in the amount of ~~$14,920.~~

Prepaid expenses at September 30, 2017 amounted to $13,543 ($12,270 at September 30, 2016), 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.$20,142. The increase in ~~accounts payables as~~accruals for programs in the first six months of ~~September 30, 2017, as~~2022, compared to ~~September 30, 2016 and December 31, 2016,~~the same period in 2021, is ~~primarily due to demand driven higher raw material purchases towards the end~~a direct result of ~~the third quarter and planning for the start~~an increase in sales of ~~the final quarter of the year.~~ qualifying products.

~~The Company utilized $32,187~~Cash used for investing activities ~~during~~for the ~~nine months~~six-month period ended ~~September~~June 30, ~~2017, as compared to $9,629 during~~2022, and 2021 was $6,671 and $15,500, respectively. The $15,500 in 2021 includes a product acquisition in the ~~same period~~amount of ~~2016. The Company made investments in capital expenditures~~$10,000. No such acquisition took place in the current ~~year,~~year. In 2022, the Company spent $5,654 on purchases of fixed assets 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~~manufacturing infrastructure. In addition, the Company made a ~~$3,283 investment in~~payment of $1,000 to Clean Seed to amend a ~~Belgian Company that develops biological plant protection products that can be used~~license agreement under which royalty-bearing license rights were converted to fully paid-up, royalty-free, perpetual license rights, and spent $44 on patents for the ~~control of pests and disease of agricultural crops and a small level of capital spending on our the manufacturing plants.~~Envance technology business.

During the ~~nine months~~six-month period ended ~~September~~June 30, ~~2017~~2022, financing activities provided ~~$14,966, principally from the borrowings on the Company’s senior credit facility,~~$40,027, 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,$37,943 during ~~the nine months to September 30, 2017 we paid dividends to investors in the amount of $1,161 as compared to $289 for~~ the same period of the prior year. Net borrowings under the Credit Agreement amounted to $48,400 during the six-month period ended June 30, 2022, as compared to $41,774 in the same period of the prior year. The Company paid dividends to stockholders amounting to $1,330 during the six months ended June 30, 2022, as compared to $1,188 in the same period of 2021. The Company paid $6,232 for the repurchase of 333,010 shares of its common stock during the six-month period ended June 30, 2022. There were no such purchases during the six-month period ended June 30, 2021. Lastly, in exchange for shares of common stock returned by employees, the Company paid $2,012 and $2,900 for tax withholding on stock-based compensation awards during the six months ended June 30, 2022 and 2021, respectively.

The Company has a revolving line of credit that is shown as long-term debt in the condensed consolidated balance sheets at ~~September~~June 30, ~~2017~~2022 and December 31, ~~2016.~~2021. These are summarized in the following table:

~~As of~~At June 30, ~~2017, AMVAC Chemical Corporation (“AMVAC”),~~2022, the Company was compliant with all covenants to its credit agreement. Also, at June 30, 2022, 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 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 Consolidatedtotal Funded Debt ~~Ratio of no more than 3.25-to-1 and a~~amounted to $101,700. At that date the Company’s rolling four quarter Consolidated ~~Fixed Charge Covenant Ratio of at least 1.25-to-1. The Company’s borrowing capacity varies with its financial performance, measured~~EBITDA (as defined in ~~terms of EBITDA, for the trailing twelve month period. Under~~ the Credit Agreement, ~~revolving loans bear interest at~~see Note 10) amounted to $75,512, which results in 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 greaterleverage ratio 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,1.35, 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~~compared to ~~the terms of~~a maximum leverage ratio permitted under the Credit Agreement ~~and based on its performance against the most restrictive covenants listed above,~~of 3.5. At June 30, 2022, the Company ~~had~~has the capacity to increase its borrowings by up to ~~$124,724.~~$162,592, according to the terms thereof. This compares to an available borrowing capacity of ~~$95,985~~$56,906 as of ~~September~~June 30, ~~2016.~~2021. At December 31, 2021, the Company had borrowing capacity of $178,705. The level of borrowing capacity is driven by three factors: (1) our financial performance, as measured in EBITDA for both the trailing ~~twelve month~~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 TL 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 reconcilingaccompanying Notes to 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 ourcondensed consolidated financial statements ~~and will adopt the standard~~ for ~~the financial year beginning January 1, 2018.~~

~~In February 2016, FASB~~recently 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 amendment to the standard, ASU 2016-08, to clarify the implementation guidance on principal versus agent considerations. Under the amendment, an entity is required to determine whether the nature of its promise is to provide the specified good or service itself (that is, the entity is a principal) or to arrange for that good or service to be provided by the other party (that is, the entity is an agent). In April 2016, FASB issued another amendment to the standard, ASU 2016-10, to clarify identifying performance obligations and the licensing implementation guidance, which retaining the related principles for those areas. The standard and the amendments are effective for annual periods beginning after December 15, 2017, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). 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 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 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,~~2021, 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.~~2021.

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. Our estimates did not change materially during the three- and six-months ended June 30, 2022.

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~~2021 and note 10 to the ~~Company’s Form 8-K filed with the SEC on or about July 6, 2017.~~condensed consolidated financial statements.

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~~June 30, ~~2017,~~2022, 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~~June 30, ~~2017,~~2022, 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 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 $250condensed consolidated financial statements 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:~~legal updates.

~~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 Annual Report on Form 10-K for the fiscal year ended December 31, ~~2016,~~2021, filed on March ~~7, 2017. In preparing this document, we have reviewed all the~~14, 2022. The following disclosure amends and supplements those risk factors ~~included in that document~~ and, ~~find that~~except to the extent restated below, there are no material changes to the risk factors as so stated.

An NGO petition to revoke tolerances a family of chemistries (namely, organophosphate) could jeopardize several of the Company’s products. On November 18, 2021, a group of non-governmental organizations led by Pesticide Action Network North America filed a petition with the USEPA to revoke the food tolerances for eight of the Company’s registered active ingredients, all of which are in the family of organophosphates. In July 2022, USEPA published in the Federal Register an invitation for public comment on the petition, giving commenters 30 days’ within which to submit their comments. In light of the large number of active ingredients implicated by the petition, the Company and multiple other stakeholders (including grower groups and trade organizations) are seeking an extension of time for submitting such comments. While the Company does not believe that there is a valid basis for revoking tolerances under applicable law (as the petition is largely based upon unsound studies solely involving chlorypyrifos), there is no guarantee that USEPA will grant an extension or, for that matter, will deny the remedy being sought by the petition. It is possible that USEPA could find a basis upon which to revoke tolerances and therefore cancel one or all active ingredients which, in turn, could have a material adverse effect upon the Company’s financial performance. Further, this matter is unprecedented insofar as it, in effect, targets an entire class of chemistry (as opposed to one active ingredient); thus, it is possible that, if granted, this petition will establish an adverse precedent by which NGOs can seek to cancel other families of chemistries within the broader industry.

USEPA’s notice of intention to suspend the DCPA registration could have a broader impact on the Company’s portfolio and the industry in general. In May 2022, the USEPA issued a notice of intention to suspend DCPA, the active ingredient of an herbicidal product marketed by the Company under the name Dacthal on the basis that the Company acted allegedly inappropriately in providing data studies that had been requested by the agency. In fact, the agency had requested 89 data studies and, over the course of several years, the Company had supplied 69 such studies and had been working constructively on mutually acceptable timetables either to complete, or to obtain waivers for, the balance of the studies. The Company petitioned an administrative law judge (“ALJ”) to appeal the NOITS. In response to USEPA’s motion, the ALJ granted an accelerated decision to uphold the NOITS. The Company, in turn, has appealed the ALJ’s decision to the Environmental Appeals Board, on the ground that the basis was erroneous, both with respect to statutory construction and factual inferences being improperly made in the agency’s favor. While the Company believes that there is no merit to the agency’s position, there is no guarantee that the Company will prevail in defending against the attempted suspension. Further, if this suspension is granted, it is possible that the agency will seek to invalidate registrations summarily, including both the Company’s and those ~~risk factors.~~of its peers. This, in turn, could have a material adverse effect upon the Company’s financial performance.

The Catalano product liability case could set an adverse precedent for the active ingredient acephate, as well as for organophosphates more generally. As more fully described in Part 14, Item II herein, plaintiffs in Catalano seek damages for cardiovascular injury allegedly arising from making applications of Orthene, a systemic insecticide marketed by the Company, having acephate as its active ingredient. While the Company believes that the claim has not merit and that there have been no data studies linking acephate to cardiovascular disease, it is possible that a court could reach a judgment that is adverse to the Company and, in so doing, set an adverse precedent with respect not only to commercial acephate products, but also to consumer acephate products and organophosphate products more generally. Such adverse judgment and/or precedent could have a materially adverse effect upon the Company’s financial performance.

On March 8, 2022, pursuant to a Board of Directors resolution, the Company announced its intention to repurchase an aggregate number of up to 1,000,000 shares of its common stock, par value $0.10 per share, in the open market over the succeeding one year at a price not to exceed $20 per share, subject to limitations and restrictions under applicable securities laws.

The table below summarizes the number of shares of our common stock that were repurchased during the three- and six-month periods ended June 30, 2022. There were no such purchases during the three- and six-month periods ended June 30, 2021. The shares and respective amount are recorded as treasury shares on the Company’s condensed consolidated balance sheet.

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

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

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

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

		Page Number
PART I—FINANCIAL INFORMATION

Item 1.	Financial Statements (unaudited)

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

	Condensed Consolidated Statements of Comprehensive Income ~~for the three months and nine months ended September 30, 2017 and 2016~~	4

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

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

	Condensed Consolidated Statements of Cash Flows ~~for the nine months ended September 30, 2017 and 2016~~	78

	Notes to Condensed Consolidated Financial Statements	89

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1920

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	28

Item 4.	Controls and Procedures	28

PART II—OTHER INFORMATION		29

Item 4.1.	~~Controls and Procedures~~Legal Proceedings	29

~~PART II—OTHER INFORMATION~~Item 1A.	Risks Factors	29
Item 2.	Purchases of Equity Securities by the Issuer	30
Item 6.	Exhibits
~~Item 1.~~	~~Legal Proceedings~~	30

~~Item 6.~~	~~Exhibits~~	3231

SIGNATURES		3332

	September 30, 2017			December 31, 2016
Land	$	2,458		$	2,458
Buildings and improvements		16,610			15,515
Machinery and equipment		106,641			102,146
Office furniture, fixtures and equipment		4,701			5,016
Automotive equipment		398			387
Construction in progress		2,220			8,047
Total gross value		133,028			133,569
Less accumulated depreciation		(83,533	)		(83,274	)
Total net value	$	49,495		$	50,295

	September 30, 2017		December 31, 2016
Finished products	$	107,966	$	103,832
Raw materials		15,349		16,744
	$	123,315	$	120,576

2022 (excluding six months ended June 30, 2022)	$	3,041
2023		5,378
2024		4,578
2025		4,067
2026		3,050
Thereafter		8,290
Total lease payments		28,404
Less: imputed interest		3,523
Total	$	24,881
Amounts recognized in the Condensed Consolidated Balance Sheets:
Operating lease liabilities, current	$	5,029
Operating lease liabilities, long-term	$	19,852

	June 30, 2022		December 31, 2021
Finished products	$	154,742	$	138,159
Raw materials		27,461		16,147
	$	182,203	$	154,306

	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016
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
International		24,133		22,414		64,676		62,984
Total net sales:	$	89,975	$	82,447	$	238,553	$	224,645

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

	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended June 30,				Six Months Ended June 30,
	2017		2016		2017		2016		2022		2021		2022		2021
Numerator:
Net income attributable to AVD	$	4,089	$	2,877	$	11,845	$	8,917	$	6,830	$	5,144	$	16,765	$	8,215
Denominator: (in thousands)
Weighted average shares outstanding-basic		29,193		28,957		29,064		28,886		29,602		29,930		29,639		29,834
Dilutive effect of stock options and grants		590		539		584		499		623		569		650		677
		29,783		29,496		29,648		29,385		30,225		30,499		30,289		30,511

Long-term indebtedness ($000's)	September 30, 2017			December 31, 2016			June 30, 2022			December 31, 2021
Revolving line of credit	$	58,375		$	41,400		$	101,700		$	53,300
Deferred loan fees		(996	)		(449	)		(921	)		(1,060	)
Net long-term debt	$	57,379		$	40,951		$	100,779		$	52,240

	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

	Outstanding Weighted Average						Exercisable Weighted Average
Exercise Price Per Share	Shares		Remaining Life (Months)		Exercise Price		Shares		Exercise Price
Incentive Stock Option Plan:
$7.50		250,050		38	$	7.5		250,050	$	7.50
$11.32—$14.75		232,168		83		11.58		34,334		12.07
		482,218			$	9.46		284,384	$	8.05

As of September 30, 2017	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
Expected to Vest		480,800	$	9.46		60	$	6,464
Exercisable		284,384	$	8.05		41	$	4,222

	Number of Shares			Weighted Average Price Per Share
Balance outstanding, December 31, 2021 and March 31, 2022		108,036			11.49
Options exercised		(33,745	)		11.49
Balance outstanding, June 30, 2022		74,291		$	11.49

	Number of Shares			Weighted Average Price Per Share
Balance outstanding, December 31, 2020		123,087		$	11.48
Options exercised		(5,838	)		11.49
Balance outstanding, March 31, 2021		117,249			11.48
Options exercised		(8,826	)		11.35
Balance outstanding, June 30, 2021		108,423		$	11.49

	Three months ended June 30, 2022			Three months ended June 30, 2021
Balance, March 31	$	1,437		$	2,205
Purchase price adjustment		—			(955	)
Fair value adjustment		36			1,013
Accretion of discounted liabilities		11			(27	)
Foreign exchange effect		(117	)		(120	)
Balance, June 30	$	1,367		$	2,116

	Six months ended June 30, 2022			Six months ended June 30, 2021
Balance, December 31	$	786		$	2,468
Purchase price adjustment		—			(955	)
Fair value adjustment		635			1,013
Payments on existing obligations		—			(250	)
Accretion of discounted liabilities		17			(11	)
Foreign exchange effect		(71	)		(149	)
Balance, June 30	$	1,367		$	2,116

	Total
Balance, December 31, 2016	$	(4,851	)
FX translation		757
Balance, March 31, 2017		(4,094	)
FX translation		280
Balance, June 30, 2017		(3,814	)
FX translation		(67	)
Balance, September 30, 2017	$	(3,881	)

Month ended	Total number of shares purchased		Average price paid per share		Total amount paid		Maximum number of shares that may yet be purchased under the plan
March 31, 2022		332,404	$	18.71	$	6,219		667,596
April 30, 2022		100	$	19.99	$	2		667,496
May 31, 2022		506	$	19.99	$	11		666,990
Total number of shares repurchased		333,010	$	18.71	$	6,232		666,990

	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	%

Long-term indebtedness ($000's)	September 30, 2017						December 31, 2016						June 30, 2022			December 31, 2021
	Long-term			Total			Long-term			Total
Revolving line of credit	$	58,375		$	58,375		$	41,400		$	41,400		$	101,700		$	53,300
Deferred loan fees		(996	)		(996	)		(449	)		(449	)		(921	)		(1,060	)
Net long-term debt	$	57,379		$	57,379		$	40,951		$	40,951		$	100,779		$	52,240

Month ended	Total number of shares purchased		Average price paid per share		Total amount paid		Maximum number of shares that may yet be purchased under the plan
March 31, 2022		332,404	$	18.71	$	6,219		667,596
April 30, 2022		100	$	19.99	$	2		667,496
May 31, 2022		506	$	19.99	$	11		666,990
Total number of shares repurchased		333,010	$	18.71	$	6,232		666,990

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~~June 30, ~~2017,~~2021, formatted in ~~XBRL (Extensible~~iXBRL (Inline Extensible Business Reporting Language): (i) Condensed ~~consolidated~~Consolidated Statements of Operations; (ii) Condensed ~~consolidated~~Consolidated Statements of Comprehensive Income; (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.

104		The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2022, has been formatted in Inline XBRL.

	americanvanguardcorporation

Dated: ~~November 2, 2017~~August 8, 2022	By:	/s/ ericg. wintemute
		Eric G. Wintemute
		Chief Executive Officer and Chairman of the Board

Dated: ~~November 2, 2017~~August 8, 2022	By:	/s/ davidt. johnson
		David T. Johnson
		Chief Financial Officer & Principal Accounting Officer