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 every Interactive Data File required to be submitted 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 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—30,933,517~~Value — 29,581,627 shares as of November ~~1, 2021.~~2, 2022.

For The ~~Three-~~Three and ~~Nine-Months~~Nine Months Ended September 30, ~~2021~~2022

	Common Stock						Additional			Accumulated Other						Treasury Stock
	Shares			Amount			Paid-in Capital			Comprehensive Loss			Retained Earnings			Shares		Amount			Total			Common Stock						Additional			Accumulated Other						Treasury Stock
Balance, December 31, 2020		33,922,433		$	3,394		$	96,642		$	(9,322	)	$	288,182			3,061,040	$	(18,160	)	$	360,736
																								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		25,120			2			338			—			—			—		—			340			26,751			2			434			—			—			—		—			436
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 issued under ESPP		25,662			2			401			—			—			—		—			403
Cash dividends on common stock ($0.02 per share)		—			—			—			—			(594	)		—		—			(594	)
Cash dividends on common stock ($0.025 per share)																									—			—			—			—			(736	)		—		—			(736	)
Foreign currency translation adjustment, net		—			—			—			(3,459	)		—			—		—			(3,459	)		—			—			—			7,080			—			—		—			7,080
Stock-based compensation		—			—			1,711			—			—			—		—			1,711			—			—			1,563			—			—			—		—			1,563
Stock options exercised; grants, termination and vesting of restricted stock units (net of shares in lieu of taxes)		(14,648	)		(2	)		(8	)		—			—			—		—			(10	)		(183,093	)		(18	)		(2,156	)		—			—			—		—			(2,174	)
Shares repurchased		—			—			—			—			—			300,000		(4,579	)		(4,579	)																	332,404		(6,219	)		(6,219	)
Net income		—			—			—			—			5,498			—		—			5,498			—			—			—			—			9,935			—		—			9,935
Balance, September 30, 2021		34,272,665		$	3,428		$	99,917		$	(12,370	)	$	300,105			3,361,040	$	(22,739	)	$	368,341
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 issued under ESPP																									24,489			2			399			—			—			—		—			401
Cash dividends on common stock ($0.025 per share)																									—			—			—			—			(715	)		—		—			(715	)
Foreign currency translation adjustment, net																									—			—			—			(2,764	)		—			—		—			(2,764	)
Stock-based compensation																									—			—			1,560			—			—			—		—			1,560
Stock options exercised; grants, termination and vesting of restricted stock units (net of shares in lieu of taxes)																									(3,776	)		(1	)		11			—			—			—		—			10
Shares repurchased																									—			—			—			—			—			387,340		(7,499	)		(7,499	)
Accelerated share repurchase pending final settlement																									—			—			(4,000	)		—			—			802,810		(16,000	)		(20,000	)
Net income																									—			—			—			—			6,741			—		—			6,741
Balance, September 30, 2022																									34,463,947		$	3,446		$	101,426		$	(15,532	)	$	325,698			4,884,200	$	(52,470	)	$	362,568

For The ~~Three-~~Three and ~~Nine-Months~~Nine Months Ended September 30, ~~2020~~2021

	Common Stock						Additional			Accumulated Other						Treasury Stock
	Shares			Amount			Paid-in Capital			Comprehensive Loss			Retained Earnings			Shares		Amount			AVD Total			Common Stock						Additional			Accumulated Other						Treasury Stock
Balance, December 31, 2019		33,233,614		$	3,324		$	90,572		$	(5,698	)	$	274,118			3,061,040	$	(18,160	)	$	344,156
																								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		22,776			2			350			—			—			—		—			352			25,120			2			338			—			—			—		—			340
Cash dividends on common stock ($0.02 per share)		—			—			—			—			(586	)		—		—			(586	)
Cash dividends on common stock ($0.02 per share)																									—			—			—			—			(596	)		—		—			(596	)
Foreign currency translation adjustment, net		—			—			—			(9,063	)		—			—		—			(9,063	)		—			—			—			(2,503	)		—			—		—			(2,503	)
Stock-based compensation		—			—			1,357			—			—			—		—			1,357			—			—			1,792			—			—			—		—			1,792
Stock options exercised; grants, termination and vesting of restricted stock units (net of shares in lieu of taxes)		(67,969	)		(7	)		(2,522	)		—			—			—		—			(2,529	)		(73,231	)		(7	)		(2,787	)		—			—			—		—			(2,794	)
Net income		—			—			—			—			520			—		—			520			—			—			—			—			3,071			—		—			3,071
Balance, March 31, 2020		33,188,421			3,319			89,757			(14,761	)		274,052			3,061,040		(18,160	)		334,207
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		—			—			—			324			—			—		—			324			—			—			—			2,914			—			—		—			2,914
Stock-based compensation		—			—			1,188			—			—			—		—			1,188			—			—			1,806			—			—			—		—			1,806
Stock options exercised; grants, termination and vesting of restricted stock units (net of shares in lieu of taxes)		40,657			5			49			—			—			—		—			54			387,329			39			22			—			—			—		—			61
Net income		—			—			—			—			3,887			—		—			3,887			—			—			—			—			5,144			—		—			5,144
Balance, June 30, 2020		33,229,078			3,324			90,994			(14,437	)		277,939			3,061,040		(18,160	)		339,660
Balance, June 30, 2021																									34,261,651			3,428			97,813			(8,911	)		295,201			3,061,040		(18,160	)		369,371
Common stock issued under ESPP		26,892			3			366														369			25,662			2			401														403
Cash dividends on common stock ($0.02 per share)																									—			—			—			—			(594	)		—		—			(594	)
Foreign currency translation adjustment, net		—			—			—			(83	)		—			—		—			(83	)		—			—			—			(3,459	)		—			—		—			(3,459	)
Stock-based compensation		—			—			1,231			—			—			—		—			1,231			—			—			1,711			—			—			—		—			1,711
Stock options exercised; grants, termination and vesting of restricted stock units (net of shares in lieu of taxes)		81,105			8			682			—			—			—		—			690			(14,648	)		(2	)		(8	)		—			—			—		—			(10	)
Shares repurchased																									—			—			—			—			—			300,000		(4,579	)		(4,579	)
Net income		—			—			—			—			2,927			—		—			2,927			—			—			—			—			5,498			—		—			5,498
Balance, September 30, 2020		33,337,075		$	3,335		$	93,273		$	(14,520	)	$	280,866			3,061,040	$	(18,160	)	$	344,794
Balance, September 30, 2021																									34,272,665		$	3,428		$	99,917		$	(12,370	)	$	300,105			3,361,040	$	(22,739	)	$	368,341

4. Property, Plant and Equipment ~~net~~ — Property, plant and equipment as at September 30, ~~2021~~2022 and December 31, ~~2020~~2021 consists of the following:

The Company recognized depreciation expense related to property ~~plant~~ and equipment of ~~$2,833~~$2,091 and ~~$1,878~~$2,496 for the ~~three months~~three-month periods ended September 30, 2022 and 2021, ~~and 2020,~~ respectively. ~~During the three months ended September 30, 2021 and 2020, the Company eliminated $476 and 205, respectively, from such assets and accumulated depreciation of fully depreciated assets.~~

The Company recognized depreciation expense related to property ~~plant~~ and equipment of ~~$6,677~~$6,207 and ~~$5,235~~$6,341 for the ~~nine months~~nine-month periods ended September 30, 2022 and 2021, ~~and 2020,~~ respectively. ~~During the nine months ended September 30, 2021 and 2020, the Company eliminated $787 and $601, respectively, from such assets and accumulated depreciation of fully depreciated assets.~~

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

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


	For the three months ended September 30,
	2022		2021		Change			% Change
Net sales:
U.S. crop	$	69,115	$	66,722	$	2,393			4	%
U.S. non-crop		18,936		21,622		(2,686	)		-12	%
U.S. total		88,051		88,344		(293	)		0	%
International		64,066		58,954		5,112			9	%
Net sales:	$	152,117	$	147,298	$	4,819			3	%
Gross profit:
U.S. crop	$	34,502	$	30,237	$	4,265			14	%
U.S. non-crop		8,811		8,882		(71	)		-1	%
U.S. total		43,313		39,119		4,194			11	%
International		18,071		17,945		126			1	%
Total gross profit:	$	61,384	$	57,064	$	4,320			8	%

For the Three Months Ended September 30,

2021

2020

Change

% Change

Net sales:

U.S. crop

$
66,722

$
48,361

$
18,361

38
%
U.S. non-crop

21,622

18,251

3,371

18
%
U.S. total

88,344

66,612

21,732

33
%
International

58,954

50,827

8,127

16
%
Net sales:

$
147,298

$
117,439

$
29,859

25
%
Gross profit:

U.S. crop

$
30,237

$
20,146

$
10,091

50
%
U.S. non-crop

8,882

8,758

124

1
%
U.S. total

39,119

28,904

10,215

35
%
International

17,945

14,361

3,584

25
%
Total gross profit:

$
57,064

$
43,265

$
13,799

32
%


	For the nine months ended September 30,
	2022		2021		Change			% Change
Net sales:
U.S. crop	$	220,503	$	184,052	$	36,451			20	%
U.S. non-crop		53,648		60,563		(6,915	)		-11	%
U.S. total		274,151		244,615		29,536			12	%
International		175,485		153,448		22,037			14	%
Net sales:	$	449,636	$	398,063	$	51,573			13	%
Gross profit:
U.S. crop	$	104,599	$	78,313	$	26,286			34	%
U.S. non-crop		24,826		28,047		(3,221	)		-11	%
U.S. total		129,425		106,360		23,065			22	%
International		52,931		47,974		4,957			10	%
Total gross profit:	$	182,356	$	154,334	$	28,022			18	%

For the Nine Months Ended September 30,

2021

2020

Change

% Change

Net sales:

U.S. crop

$
184,052

$
148,630

$
35,422

24
%
U.S. non-crop

60,563

37,881

22,682

60
%
U.S. total

244,615

186,511

58,104

31
%
International

153,448

131,445

22,003

17
%
Net sales:

$
398,063

$
317,956

$
80,107

25
%
Gross profit:

U.S. crop

$
78,313

$
68,119

$
10,194

15
%
U.S. non-crop

28,047

18,535

9,512

51
%
U.S. total

106,360

86,654

19,706

23
%
International

47,974

35,298

12,676

36
%
Total gross profit:

$
154,334

$
121,952

$
32,382

27
%

7. Accrued Program Costs — The Company offers various discounts to customers based on the volume purchased within a defined time period, other pricing adjustments, some grower volume incentives or other key performance indicator driven payments, which are usually made at the end of a growing season, to distributors, retailers or growers. The Company describes these payments as ~~“Programs.”~~“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 reviews individual sale transactions with Programs to determine what, if any, estimated program liabilities have been incurred. Once this initial calculation is made for the specific quarter, sales and marketing management, along with support from financial analysts, reviews the accumulated 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 makes adjustments to the accumulated accrual to properly reflect the Company’s best estimate of the liability at the balance sheet date. Programs are 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- and ~~nine-months~~nine-month periods ended September 30, ~~2021~~2022, and ~~2020, respectively.~~2021.

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

Declaration Date

Record Date

Distribution Date

Dividend
Per Share

Total
Paid

September 13, 2021

October 1, 2021

October 15, 2021

$
0.020

$
594

June 8, 2021

June 24, 2021

July 8, 2021

$
0.020

$
600

March 10, 2021

March 15, 2021

April 15, 2021

$
0.020

$
596

December 7, 2020

December 23, 2020

January 6, 2021

$
0.020

$
593

March 9, 2020

March 26, 2020

April 16, 2020

$
0.020

$
586

December 9, 2019

December 26, 2019

January 9, 2020

$
0.020

$
582


Declaration Date	Record Date	Distribution Date	Dividend Per Share		Total Paid
September 12, 2022	September 23, 2022	October 7, 2022	$	0.025	$	715
June 6, 2022	June 24, 2022	July 8, 2022	$	0.025	$	742
March 14, 2022	March 25, 2022	April 15, 2022	$	0.025	$	736
December 13, 2021	December 27, 2021	January 10, 2022	$	0.020	$	594
September 13, 2021	October 1, 2021	October 15, 2021	$	0.020	$	594
June 8, 2021	June 24, 2021	July 8, 2021	$	0.020	$	600
March 10, 2021	March 15, 2021	April 15, 2021	$	0.020	$	596
December 7, 2020	December 23, 2022	January 6, 2021	$	0.020	$	592

9. Earnings Per Share —The components of basic and diluted earnings per share were as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020		2022		2021		2022		2021
Numerator:
Net income attributable to AVD	$	5,498	$	2,927	$	13,713	$	7,334	$	6,741	$	5,498	$	23,506	$	13,713
Denominator: (in thousands)
Weighted average shares outstanding-basic		29,892		29,501		29,854		29,401		29,214		29,892		29,496		29,854
Dilutive effect of stock options and grants		498		472		616		525		591		498		632		616
		30,390		29,973		30,470		29,926
Weighted average shares outstanding-diluted										29,805		30,390		30,128		30,470

For the three- and ~~nine-months~~nine-month periods ended September 30, 2022, and 2021, ~~and 2020,~~ respectively, 0no stock options were excluded from the computation of diluted earnings per share.

13. Stock-Based Compensation — The following tables illustrate the Company’s stock-based compensation, unamortized stock-based compensation, and remaining weighted average 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, 2022
Restricted Stock	$	1,184	$	3,257	$	8,010		2.0
Unrestricted Stock		130		369		347		0.7
Performance-Based Restricted Stock		246		770		3,093		1.9
Total	$	1,560	$	4,396	$	11,450

September 30, 2021
Restricted Stock	$	1,246	$	3,469	$	8,277		2.0
Unrestricted Stock		100		317		267		0.7
Performance-Based Restricted Stock		365		1,523		3,522		2.0
Total	$	1,711	$	5,309	$	12,066

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, 2021

Restricted Stock

$
1,246

$
3,469

$
8,277

2.0

Unrestricted Stock

100

317

267

0.7

Performance-Based Restricted Stock

365

1,523

3,522

2.0

Total

$
1,711

$
5,309

$
12,066

September 30, 2020

Restricted Stock

$
695

$
2,173

$
3,030

1.3

Unrestricted Stock

110

351

293

0.7

Performance-Based Restricted Stock

426

1,252

1,494

1.3

Total

$
1,231

$
3,776

$
4,817

The Company also granted stock options in past periods. All outstanding stock options are fully vested and exercisable and no expense was recorded during the three- and ~~nine-months~~nine-month periods ended September 30, ~~2021~~2022, and ~~2020.~~2021.

Time-Based Restricted and Unrestricted Stock — A summary of non-vested shares as of, and for, the three- and ~~nine-months~~nine-month periods ended September 30, ~~2021~~2022, and ~~2020,~~2021 is presented below:


	Three and Nine Months Ended September 30, 2022					Three and Nine Months Ended September 30, 2021
	Number of Shares			Weighted Average Grant Date Fair Value		Number of Shares			Weighted Average Grant Date Fair Value
Nonvested shares at December 31st		817,290		$	17.04		820,624		$	16.64
Vested		(230,080	)		17.31		(197,615	)		19.91
Forfeited		(24,109	)		17.10		(11,580	)		16.95
Nonvested shares at March 31st		563,101			16.93		611,429			15.57
Granted		242,067			23.79		289,757			20.10
Vested		(27,482	)		22.35		(30,112	)		16.72
Forfeited		(14,070	)		18.53		(11,231	)		16.60
Nonvested shares at June 30th		763,616			18.88		859,843			17.04
Granted		13,600		$	18.94		3,400			15.17
Vested		(1,262	)		19.39		(5,962	)		15.36
Forfeited		(15,945	)		20.09		(13,841	)		17.21
Nonvested shares at September 30th		760,009		$	18.86		843,440		$	17.04

Nine Months Ended
September 30, 2021

Nine Months Ended
September 30, 2020

Number
of Shares

Weighted
Average
Grant
Date Fair
Value

Number
of Shares

Weighted
Average
Grant
Date Fair
Value

Nonvested shares at December 31^st

820,624

$
16.64

719,845

$
17.67

Granted

—

—

4,185

18.63

Vested

(197,615
)

19.91

(213,781
)

16.18

Forfeited

(11,580
)

16.95

(14,715
)

18.08

Nonvested shares at March 31^st

611,429

15.57

495,534

18.31

Granted

289,757

20.10

43,168

13.45

Vested

(30,112
)

16.72

(37,958
)

13.88

Forfeited

(11,231
)

16.60

(8,221
)

18.64

Nonvested shares at June 30^th

859,843

17.04

492,523

18.22

Granted

3,400

15.17

—

—

Vested

(5,962
)

15.36

—

—

Forfeited

(13,841
)

17.21

(8,430
)

18.54

Nonvested shares at September 30^th

843,440

$
17.04

484,093

$
18.22

Performance-Based Restricted Stock — A summary of non-vested performance-based shares as of, and for, the three- and ~~nine-months~~nine-month periods ended September 30, ~~2021~~2022, and ~~2020,~~2021, respectively is presented below:


	Nine Months Ended September 30, 2021					Nine Months Ended September 30, 2020					Three and Nine Months Ended September 30, 2022					Three and Nine Months Ended September 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		391,771		$	16.26		345,432		$	16.92		379,061		$	16.43		391,771		$	16.26
Additional granted based on performance achievement		71,180			20.53		76,445			16.56
Additional granted (forfeited) based on performance achievement												(41,088	)		16.56		71,180			20.53
Vested		(175,087	)		19.78		(184,785	)		15.87		(78,704	)		17.18		(175,087	)		19.78
Forfeited		(505	)		19.26		(3,759	)		17.23		(7,074	)		16.77		(505	)		19.26
Nonvested shares at March 31^st		287,359			15.16		233,333			17.63		252,195			16.17		287,359			15.16
Granted		102,043			20.03		—			—		83,190			23.63		102,043			20.03
Forfeited		—			—		(2,268	)		18.00		(7,829	)		17.50		—			—
Nonvested shares at June 30^th		389,402			16.44		231,065			17.63		327,556			16.58		389,402			16.44
Forfeited		(3,733	)		17.04		—			—		(2,577	)		17.80		(3,733	)		17.04
Nonvested shares at September 30^th		385,669		$	16.43		231,065		$	17.63		324,979		$	16.57		385,669		$	16.43

Stock Options — The Company has stock options outstanding under its incentive stock option plans and performance incentive stock option plan. All outstanding stock options are vested and exercisable. The following tables present details for each type of plan:

Activity for the three- and ~~nine-months~~nine-month periods ended September 30, ~~2021:~~2022:

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

Options exercised

(387
)

11.49

Balance outstanding, September 30, 2021

108,036

$
11.49


	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
Options exercised		(1,541	)		11.49
Balance outstanding, September 30, 2022		72,750		$	11.49

All the incentive stock options outstanding as of September 30, ~~2021~~2022, have an exercise price per share of ~~$11.49~~$11.49, total intrinsic value of $525, and a remaining life of 3927 months.

Activity for the three- and ~~nine-months~~nine-month periods ended September 30, ~~2020:~~2021:

Number of
Shares

Weighted
Average Price
Per Share

Balance outstanding, December 31, 2019

332,823

$
9.14

Options exercised

(15,836
)

8.83

Balance outstanding, March 31, 2020

316,987

9.16

Options exercised

(9,291
)

8.27

Balance outstanding, June 30, 2020

307,696

9.16

Options exercised

(86,446
)

7.58

Balance outstanding, September 30, 2020

221,250

$
9.81


	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
Options exercised		(387	)		11.49
Balance outstanding, September 30, 2021		108,036		$	11.49

Performance Incentive Stock Option Plan

Activity for the three- and ~~nine-months~~nine-month periods ended September 30, ~~2021:~~2022:

Number of
Shares

Weighted
Average Price
Per Share

Balance outstanding, December 31, 2020

114,658

$
11.49

Options exercised

—

—

Balance outstanding, March 31, June 30, and September 30, 2021

114,658

$
11.49


	Number of Shares			Weighted Average Price Per Share
Balance outstanding, December 31, 2021 and March 31, 2022		114,658		$	11.49
Options exercised		(32,850	)		11.49
Balance outstanding, June 30 and September 30, 2022		81,808		$	11.49

Activity for the three- and ~~nine-months~~nine-month periods ended September 30, ~~2020:~~2021:

Number of
Shares

Weighted
Average Price
Per Share

Balance outstanding, December 31, 2019

120,782

$
11.49

Options exercised

(3,035
)

11.49

Balance outstanding, March 31, 2020 and June 30, 2020

117,747

11.49

Options exercised

(3,089
)

11.49

Balance outstanding, September 30, 2020

114,658

$
11.49


	Number of Shares		Weighted Average Price Per Share
Balance outstanding, December 31, 2020		114,658	$	11.49
Options exercised		—		—
Balance outstanding, September 30, 2021		114,658	$	11.49

All the performance incentive stock options outstanding as of September 30, ~~2021~~2022, have an exercise price per share of ~~$11.49~~$11.49, total intrinsic value of $590, and a remaining life of 3927 months.

14. Legal Proceedings — During the reporting period, there have been no material developments in legal proceedings that were reported in the Company’s Form 10-K for the year ended December 31, ~~2020,~~2021, except as described below.

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

Since April 2018, the Department of Justice (“DOJ”) has conducted several interviews of AMVAC employees and issued supplemental document requests in connection with the investigation. In November 2020, DOJ issued a second grand jury subpoena seeking records and related communications with regard to 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 non-executive employees as targets of the government’s investigation. In January 2021, DOJ and EPA informed the Company that it is 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 ~~for the Company, as well as for the individual target,~~ evidence that it contends supports alleged violations with respect to both the Company 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. In July 2022, the DOJ outlined its current view of the investigation and indicated an interest in reaching resolution of the matter. Further discussions on that subject are imminent. 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 for this matter.

~~Risk Management Plan – Axis, Alabama~~16

Harold Reed v. AMVAC et al. ~~On July 30, 2018, inspectors~~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 ~~USEPA conducted~~ a ~~Risk Management Plan (“RMP”) audit~~fire that occurred during an application of the Company’s potato sprout inhibitor, SmartBlock, at a potato storage facility in ~~Axis, Alabama~~Coaldale, Alberta on April 2, 2014. Four other related matters were subsequently consolidated into this case (alleging loss of potatoes, damage to equipment, damage to Quonset huts and ~~in January 2019, issued an order to show cause (“OSC”) why~~loss of business income). The parties have exchanged written discovery, and depositions of persons most knowledgeable took place during the ~~Company should not be cited for nine potential infractions~~first quarter of 2019. Citing the length of the Clean Air Act, including failure to conduct inspection and testing on certain process equipment, inadequate training and documentation of such inspections and inadequate management of changes for process chemicals, equipmentcases’ pendency and the ~~like. The Company sought~~expense, in December 2019, plaintiff Reed voluntarily dismissed two actions (160600211 and 160600237) for no consideration. Over the course of 2020, discovery was completed, and the parties held a ~~hearing date to contest the alleged violations and,~~mediation on March ~~26, 2019, provided Region 4 of USEPA with~~11, 2021; however, no settlement was reached. The parties participated in a ~~plan for effecting compliance relating~~second mediation in August 2022, during which plaintiffs significantly lowered their collective demands, and all parties were able to mechanical integrity inspections within 24 months. The Company met with USEPA officials in early January 2021 and outlined progress to date and its plans to complete, and to define the scope of, mechanical integrity inspections. After evaluation, USEPA proposedreach a settlement. On February 3, 2021, Company representatives met with USEPA, who, in light of the quality of the remediation plan, eliminated a number of alleged violations and reduced the penalty. On September 23, 2021, the Company entered into a consent agreement and final ordersettlement under the terms of which ~~all alleged infractions were resolved~~three co-defendants (including the Company) are equally sharing in ~~consideration~~a cash contribution. The Company’s contribution toward settlement was largely covered by pre-existing reserves and, in any event, is not material to its financial performance or operations. The court has entered an order of ~~payment~~dismissal with prejudice pursuant to the settlement agreement; thus, this matter is resolved.

DCPA Suspension Proceedings. 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 ~~amount~~administrative law judge (“ALJ”) to appeal the notice of intention to suspend ("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 (“EAB”), 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. In October 2022, the EAB reversed the ALJ’s order, finding that that court had used a statutorily improper standard (namely, whether the Company had submitted all requested data as opposed to the proper standard of whether the Company acted appropriately in responding to the data call-ins). The matter has been remanded to the ALJ, which has set a hearing date of January 24, 2023. At the same time, USEPA has expressed an interest in settlement of the matter; thus, the Company, USEPA and the Office of General Counsel are engaged in settlement discussions in parallel with the proceedings at the ALJ. At this stage, the Company is unable to predict the probable outcome of the matter and, accordingly, has not recorded a loss contingency with respect thereto.

15.Recent Issued Accounting Guidance

Accounting Standards Adopted

In November 2021, the Financial Accounting Standards Board (the “FASB”) issued ASU No. 2021-10, “Disclosures by Business Entities about Government Assistance.” This ASU codifies new requirements to disclose information about the nature of certain government assistance received, the accounting policy used to account for the transactions, the location in the financial statements where such transactions were recorded, and significant terms and conditions associated with such transactions. The guidance is effective for annual periods beginning after December 15, 2021. Effective January 1, 2022, the Company adopted ASU No. 2021-10 on a prospective basis. The adoption of this standard was not material to the Company’s ~~Condensed Consolidated Financial Statements.~~condensed consolidated financial statements.

~~15.~~ ~~Recent~~ Accounting Standards Not Yet Adopted —

In ~~December 2019,~~October 2021, the FASB issued ASU ~~no. 2019-12, “Income Taxes~~2021-08, “Business Combinations (Topic ~~740)~~805): ~~Simplifying the~~ Accounting for ~~Income Taxes,~~Contract Assets and Liabilities from Contracts with Customers.” (“This ASU ~~No. 2019-12”).~~requires an acquiring entity to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 606. The amendment removes certain exceptions to the general income tax accounting methodology including an exception for the recognition of a deferred tax liability when a foreign subsidiary becomes an equity method investment and an exception for interim periods showing operating losses in excess of anticipated operating losses for the year. The amendment also reduces the complexity surrounding franchise tax recognition; the step up in the tax basis of goodwill in conjunction with business combinations; and the accounting for the effect of changes in tax laws enacted during interim periods. The amendments in this update areASU is effective ~~for the Company~~ for fiscal years and interim periods beginning after December 15, ~~2020, including interim periods within those years~~2022, with early adoption permitted. The Company is evaluating the impact of adopting this ASU and does not expect a material impact on its condensed consolidated financial statements.

The Company ~~adopted ASU No. 2019-12 effective January 1, 2021.The adoption of this standard did~~reviewed all other recently issued accounting pronouncements and concluded that they were either not ~~result in any material adjustments~~applicable or not expected to ~~the Company’s Condensed Consolidated Financial Statements.~~have a significant impact to its condensed consolidated financial statements.

16. Fair Value of Financial 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:

•

Level 1 – Quoted prices in active markets for identical assets or liabilities.

•

Level 2 – Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

•

Level 3 – Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability.

•

~~Level 1 – Quoted prices in active markets for identical assets or liabilities.~~

•

~~Level 3 – Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability.~~

The carrying amount of the Company’s financial instruments, which principally include cash and cash equivalents, short-term investments, accounts receivable, long-term investments, accounts payable and accrued expenses, approximates fair value because of the relatively short maturity of such instruments. The carrying amount of the Company’s short-term and long-term borrowings, which are considered Level 2 liabilities, approximates fair value based upon current rates and terms available to the Company for 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 fair value hierarchy. The Company may use various valuation techniques depending on the terms and conditions of the contingent consideration including a Monte-Carlo simulation. This simulation uses probability distribution for each significant input to produce hundreds or thousands of possible outcomes and the results are analyzed to determine probabilities of different outcomes occurring.

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


	Three months ended September 30, 2021			Three months ended September 30, 2020			Three months ended September 30, 2022			Three months ended September 30, 2021
Balance, June 30	$	2,116		$	—		$	1,367		$	2,116
Fair value adjustment		(493	)		—			—			(493	)
Payments on existing obligations								(1,292	)		—
Accretion of discounted liabilities		(1	)		—			10			(1	)
Foreign exchange effect		(57	)		—			(85	)		(57	)
Balance, September 30	$	1,565		$	—		$	—		$	1,565

	Nine months ended September 30, 2021			Nine months ended September 30, 2020			Nine months ended September 30, 2022			Nine months ended September 30, 2021
Balance, December 31	$	2,468		$	1,243		$	786		$	2,468
Purchase price adjustment		(955	)		—			—			(955	)
Fair value adjustment		520			—			635			520
Payments on existing obligations		(250	)		(1,227	)		(1,292	)		(250	)
Accretion of discounted liabilities		(10	)		—			28			(10	)
Foreign exchange effect		(208	)		(16	)		(157	)		(208	)
Balance, September 30	$	1,565		$	—		$	—		$	1,565

The ~~purchase price adjustment is the result of a measurement-period adjustment and represents a non-cash investing activity~~contingent consideration in the ~~Condensed Consolidated Statements~~amount of ~~Operations. The fair value adjustment~~$786 is included in ~~operating expenses and the accretion~~current installments of ~~discounted~~other liabilities ~~is included in interest expense, net,~~ on the ~~Condensed Consolidated Statements~~condensed consolidated balance sheets as of ~~Operations. The foreign exchange effect is included in foreign currency translation adjustment on the Condensed Consolidated Statements of Comprehensive Income (Loss).~~December 31, 2021.

17. Accumulated Other Comprehensive Loss (“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:

Total

Balance, December 31, 2020

$
(9,322
)
FX translation

(2,503
)
Balance, March 31, 2021

(11,825
)
FX translation

2,914

Balance, June 30, 2021

(8,911
)
FX translation

(3,459
)
Balance, September 30, 2021

$
(12,370
)

Balance, December 31, 2019

$
(5,698
)
FX translation

(9,063
)
Balance, March 31, 2020

(14,761
)
FX translation

324

Balance, June 30, 2020

(14,437
)
FX translation

(83
)
Balance, September 30, 2020

$
(14,520
)


	Total
Balance, December 31, 2021	$	(13,784	)
Foreign currency translation adjustment, net of tax effects of ($48)		7,080
Balance, March 31, 2022		(6,704	)
Foreign currency translation adjustment, net of tax effects of $109		(6,064	)
Balance, June 30, 2022		(12,768	)
Foreign currency translation adjustment, net of tax effects of $81		(2,764	)
Balance, September 30, 2022	$	(15,532	)

Balance, December 31, 2020	$	(9,322	)
Foreign currency translation adjustment, net of tax effects of $1,179		(2,503	)
Balance, March 31, 2021		(11,825	)
Foreign currency translation adjustment, net of tax effects of ($1,731)		2,914
Balance, June 30, 2021		(8,911	)
Foreign currency translation adjustment, net of tax effects of $1,359		(3,459	)
Balance, September 30, 2021	$	(12,370	)

18. ~~Equity Method Investment~~ —On August 2, 2016, AMVAC BV entered into a joint venture with Huifeng (Hong Kong) Ltd, which is a wholly owned subsidiary of the Huifeng Group. The resulting entity, Hong Kong JV, focused on activities such as market access and technology transfer between the two members. AMVAC BV is a 50% owner of the entity. No material contributions were made subsequent to the initial investment. On June 27, 2017, both AMVAC BV and Huifeng (Hong Kong) Ltd. made individual capital contributions of $950 to the Hong Kong JV. The Company utilizes the equity method of accounting with respect to this investment. On July 7, 2017, the Hong Kong JV 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 Huifeng (Hong Kong) Ltd).

For the three- and nine-months ended September 30, 2021, the Company recognized losses of $13 and $100, respectively, as a result of the Company’s ownership position in the Hong Kong Joint Venture. For the three- and nine-months ended September 30, 2020, the Company recognized losses of $42 and $80, respectively. As of September 30, 2021, the Company determined that the investment was fully impaired and recorded an impairment charge in the amount of $288 to reduce the investment value to $0 as of September 30, 2021.

~~19.~~ Equity Investments— In February 2016, AMVAC Netherlands BV made an investment in Biological Products for Agriculture (“Bi-PA”) ~~in the amount of $3,283.~~. Bi-PA develops biological plant protection products that can be used for the control of pests and disease of agricultural crops. As of September 30, 2022 and December 31, 2021, the Company’s ownership position in Bi-PA was ~~15%~~15%. Since this investment does not have a readily determinable fair value, the 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 Bi-PA. The Company periodically reviews the investment for possible impairment. ~~The Company recorded an impairment in the amount of $399 during the three and nine months ended September 30, 2021.~~ There was 0no impairment or observable price changes on the investment during the three- ~~or nine-months~~and nine-month periods ended September 30, ~~2020.~~2022. The Company recorded an impairment in the amount of $399 during the three- and nine-month periods ended September 30, 2021.The investment is recorded within other assets on the condensed consolidated balance sheets and amounted to $2,884 as of September 30, 2022 and December 31, 2021.

On April 1, 2020, AMVAC purchased 6.25 million shares, an ownership of approximately 8%8%, of common stock of Clean Seed Capital Group Ltd. (TSX Venture Exchange: “CSX”) for ~~$1,190.~~$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 ~~$2,409~~$659 and $1,516 as of September 30, ~~2021. For the three months ended September 30,~~2022 and December 31, 2021, ~~the~~respectively. The Company recorded a loss inof $454 and $269 for the ~~amount of $269. For the nine months~~three-month periods ended September 30, 2022 and 2021, ~~the~~respectively. The Company recorded a loss of $857 and a gain inof $502 for the ~~amount of $502.~~nine-month periods ended September 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 ~~recorded gains in the amounts of $257 and $281, respectively, for~~did not complete any acquisitions during the three- and ~~nine months~~nine-month periods ended September 30, ~~2020.~~2022. The Company completed one product acquisition during the three- and nine-months ended September 30, 2021. The acquisition was completed on July 1, 2021, for $10,000 in cash consideration. The acquisition was accounted for as an asset acquisition and the $10,000 in consideration was allocated as follows: product registrations and product rights $8,225, trade names and trademarks $1,650, and prepaid asset $125.

20. Income Taxes —Income tax expense was ~~$1,517~~$2,963 and ~~$492~~$1,517 for the ~~three months~~three-month period ended September 30, ~~2021~~2022, and ~~2020,~~2021, respectively. The effective tax rate was ~~20.7%~~30.5% and ~~14.2%~~20.7% for the ~~three months~~three-month periods ended September 30, 2022 and 2021, ~~and 2020,~~ respectively. Income tax expense was ~~$5,324~~$10,187 and ~~$1,852~~$5,324 for the nine months ended September 30, ~~2021~~2022, and ~~2020,~~2021, respectively. The effective tax rate for the ~~nine months~~nine-month periods ended September 30, 2022 and 2021, was 30.2% and ~~2020 was 27.4% and 20.0%~~27.4%, respectively. ~~The~~For the three- and nine-month periods ended September 30, 2022, the rate ~~has~~ increased compared to ~~prior years~~the same periods of 2021 reflecting the mix of income in different jurisdictions. ~~Furthermore,~~For tax years beginning after December 31, 2021, the ~~effective rate for both~~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 ~~three-~~tax year that such costs are incurred but must now be capitalized and ~~nine-months ended September 30, 2021 increased in comparison to~~amortized over either a five- or fifteen-year period, depending on the ~~same periods~~location of the prior year, as a result of the mix of territories in which we derived income. In both years our effective rate benefited by the tax impact of the vesting of certain stock grants. For the three- and nine-months ended September 30, 2021, the Company recorded income tax benefits resulting from return to provision adjustments from Hong Kong off-shore activities ~~income exclusion and non-taxable income as a result of reinstatement of an indemnification asset from our international subsidiaries.~~ In the three- and nine-months ended September 30, 2020, the Company benefited from a discrete income tax benefit as the Company assessed its income tax positions to account for the Coronavirus Aid Relief and Economic Security Act (“CARES Act”) which was signed into law on March 27, 2020. A provision of the act modified the amount of interest deduction allowed and therefore reduced the Company’s 2019 Global Intangible Low Tax Income (“GILTI”) inclusion. While the discrete items totaled to about the same amount for both years, the benefit was more significant in 2020 due to a lower pre-tax income for the nine months ended September 30, 2020.

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.

21. Stock Re-purchase Programs — The ~~Florida Department~~Company periodically repurchases shares of ~~Revenue has completed~~ its ~~audit~~common stock under a board-authorized repurchase program through a combination of ~~the Company’s state income tax returns for the years ended December 31, 2012, through December 31, 2013,~~open market transactions and ~~December 31, 2015, through December 31, 2018. No adjustments have been proposed for these returns.~~accelerated share repurchase (ASR) arrangements.

On October 22, 2021, the Mississippi Department of Revenue provided the Company with a preliminary assessment of its examination of the Company’s state income tax returns for the years ended December 31, 2016, through December 31, 2018. The Company is currently reviewing the preliminary assessment and believes the impact on its Condensed Consolidated Financial Statements is immaterial.

~~21.~~ ~~Product and Business Acquisitions~~— The Company completed 1 product acquisition during the three- and nine-months ended September 30, 2021. The acquisition was completed on July 1, 2021, for $10,000 in cash consideration. The acquisition was accounted for as an asset acquisition and the $10,000 in consideration was allocated as follows: ~~product registrations and product rights $8,225, trade names and trademarks $1,650, and prepaid asset $125.~~

During the year ended December 31, 2020, the Company completed 2 acquisitions in exchange for a total cash consideration at closing of $19,342, which was net of cash acquired of $1,970, and contingent consideration of $1,052, and the settlement of a net asset adjustment of $623. In addition, the Company assumed liabilities of $11,538 and recognized a bargain purchase gain in the amount of $4,829. The total asset value of $37,384 was allocated as follows: product rights $8,377, trade names $351, distribution agreements $3,584, customer relationships and customer list $386, goodwill $4,618, working capital and fixed assets $20,068. During the three- and nine-months ended September 30, 2021, the Company recorded an adjustment to increase the bargain purchase gain by the amount of $292 and $171, respectively. Further, the Company recorded the following allocation adjustments during the nine months ended September 30, 2021: decrease in contingent consideration $955, increase in product registrations and product rights $1,732, increase in distribution agreements $3,584, decrease in trade name and trademarks $843, decrease in customer relationships and customer lists $246, decrease in goodwill $4,054, an increase in working capital and property, plant and equipment of $295, and an increase in assumed liabilities of $1,250.

On October 2, 2020, the Company completed the acquisition of all outstanding stock of the Agrinos Group Companies (Agrinos), except for Agrinos AS. Agrinos has operating entities in the U.S., Mexico, India, Brazil, China, Ukraine, and Spain. Agrinos is a fully integrated biological input supplier with proprietary technology, internal manufacturing, and global distribution capabilities. At closing, the Company paid cash consideration of $3,125, which was net of cash acquired of $1,813, and liabilities assumed of $4,885, including liabilities of $407 related to income tax matters. The acquisition was accounted for as a business combination and resulted in a bargain purchase gain of $4,829 (including an increase of $292 and $171 recorded during the three- and nine- months ended September 30, 2021, respectively). The total asset value of $12,839 was allocated as follows: working capital $7,648 (including trade receivables of $2,277), property, plant and equipment of $5,141, and product registrations and product rights of $50. Agrinos was acquired out of bankruptcy. This provided the Company with an opportunity to acquire Agrinos at an advantageous purchase price which was below the fair value of Agrinos’ net assets acquired, resulting in the above-mentioned bargain purchase gain.

~~On October~~March 8, 2020, the Company completed the acquisition of all outstanding stock of AgNova Technologies Pty Ltd (“AgNova”). AgNova is an Australian entity that sources, develops, and distributes specialty crop protection and production solutions for agricultural and horticultural producers, and for selected non-crop users. At closing, the Company paid cash consideration of $16,217, which was net of cash acquired of $157, contingent consideration dependent on certain financial results of $1,052, the settlement of a net asset adjustment of $623, and liabilities assumed of $6,653, including liabilities of $3,857 related to income tax matters. The fair value of the contingent consideration of $1,052 was estimated using a Monte Carlo Simulation. The acquisition was accounted for as a business combination and the total asset value of $24,545 was allocated as follows: product registrations and product rights $8,327, distribution agreements $3,584, trade names and trademarks $351, customer relationships and customer lists $386, goodwill $4,618, which is non-deductible for tax purposes, working capital $7,206, including trade receivables of $1,508, and equipment $73. The allocation includes the following adjustments recorded during the nine months ended September 30, 2021, that were made based on a valuation report: decrease in contingent consideration $955, increase in product registrations and product rights $1,932, increase in distribution agreements $3,584, decrease in trade name and trademarks $843, decrease in customer relationships and customer lists $246, decrease in goodwill $4,054, and an increase in income tax liabilities $1,328. NaN adjustments were recorded during the three months ended September 30, 2021.

~~22.~~ ~~Foreign Currency~~— The Company recorded net foreign currency transaction gains in the amount of $665 and losses of $303 during the three months ended September 30, 2021 and 2020, respectively, which are included in operating expenses on the Condensed Consolidated Statement of Operations. The Company recorded net foreign currency transaction losses in the amount of $1,130 and $1,431 during the nine months ended September 30, 2021 and 2020, respectively, which are included in operating expenses on the Condensed Consolidated Statement of Operations.

~~23.~~ ~~Share Repurchase Program~~— ~~On August 30, 2021,~~2022, pursuant to a Board of Directors resolution, the Company announced its intention to repurchase an aggregate number of ~~300,000~~up to 1,000,000 shares of its common stock, par value ~~$0.10~~$0.10 per share, in the open market over the succeeding ~~six months. During~~one year, subject to limitations and restrictions under applicable securities laws.

The table below summarizes the ~~three months~~number of shares of the Company’s common stock that were repurchased during the three- and nine-month periods ended September 30, ~~2021,~~2022. There were no such purchases during the three- and nine-month periods ended September 30, 2021.


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
Balance at March 31, 2022		332,404			$	6,219		667,596

April 30, 2022		100	$	19.99	$	2		667,496
May 31, 2022		506	$	19.99	$	11		666,990
Balance at June 30, 2022		606	$	19.99	$	13		666,990

August 31, 2022		165,039	$	19.59	$	3,234		501,951
September 30, 2022		222,301	$	19.19	$	4,265		279,650
Balance at September 30, 2022		387,340	$	19.36	$	7,499		279,650

Total number of shares repurchased		720,350	$	19.06	$	13,731		279,650

On August 22, 2022, pursuant to a Board of Directors resolution, the Company ~~purchased 300,000 shares~~entered into an accelerated share repurchase arrangement to repurchase $20,000 of its common stock. Under the agreement, the Company paid $20,000 and immediately received an initial delivery of 802,810 shares in the amount of $16,000, which the Company recorded as treasury shares. The Company recorded the remaining $4,000 as a reduction to additional paid-in capital pending final settlement in the fourth quarter of 2022. The final number of shares that the Company ultimately receives under the agreement will be determined based on the average of the Rule 10b-18 volume-weighted average prices of the Company’s common stock ~~for~~during the term of the agreement, less and agreed discount, and subject to adjustments pursuant to the terms of the agreement.

The table below summarizes the number of shares of the Company’s common stock that were received under the accelerated share repurchase arrangement during the three- and nine-month periods ended September 30, 2022. There were no such transactions during the three- and nine-month periods ended September 30, 2021.


Month ended	Total number of shares received		Average price paid per share		Total amount paid
August 31, 2022		802,810	$	19.93	$	16,000

In summary, the Company added a total of ~~$4,579 at an average price~~1,190,150 and 1,523,160 of ~~$15.26 per share. The repurchased~~treasury shares ~~are recorded at cost in treasury~~of the Company’s common stock ~~as a deduction to stockholders’ equity on~~during the ~~Condensed Consolidated Balance Sheets.~~three- and nine-month periods ended September 30, 2022.

22. Supplemental Cash Flow Information


	For the Nine Months Ended September 30,
	2022		2021
Supplemental cash flow information:
Cash paid during the period for:
Interest	$	2,073	$	2,839
Income taxes, net	$	15,530	$	3,836
Non-cash transactions:
ROU assets exchanged for lease liabilities	$	4,202	$	17,872
Cash dividends declared and included in accrued expenses	$	715	$	594

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Numbers in thousands)

~~Item 2.~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Numbers in thousands, excluding per share amounts)~~

FORWARD-LOOKING STATEMENTS/RISK FACTORS:

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, 2020.~~10-Q.

MANAGEMENT OVERVIEW

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

Since the start of the coronavirus pandemic early in 2020, the company has made sustained efforts to maintain the health and safety of the workforce while ensuring continuity of the business, which, under applicable federal guidelines (~~https://ww.cisa.gov~~) is part of the nation’s critical infrastructure (as part of the “Food and Agriculture,” “Chemical” and “Public Works and Infrastructure Support Services” sectors). In the workplace, we have designed and implemented protocols for social distancing, made provisions for the workforce to work remotely where possible, and established quarantine policies for those who present COVID-like symptoms or may have been in contact with those who have. Further, we keep current with local, state, federal and international laws and restrictions that could affect the business and provide real-time information to the workforce. We have also prepared contingency plans to permit the continued operation of our factories, in the event that there are critical staffing issues. Further, we continuously monitor supply chain, transportation, logistics and border closures and have reached out to third parties to make clear that we are continuing to operate, that we have our own policies relating to health and that we are committed to compliance with COVID-19 policies of our business partners.

As has been the case with many other employers, since the start of 2021, we have encouraged our workforce to receive vaccinations against COVID-19 through various means, including incentive programs. However, new variants, particularly the Delta variant, have engendered a resurgence of the virus in many regions particularly among the unvaccinated. In-the-midst of changing conditions, we have nevertheless been able to manage our business with minimal impact during the reporting period.

Looking forward, the Company is unable to predict the ultimate 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 certainty. The Company continues to monitor its business for adverse impacts of the pandemic, including volatility in the foreign exchange markets, demand, supply-chain disruptions in certain markets, and increased costs of employee safety, among others.

~~Three Months Ended September 30, 2021 and 2020:~~

Overview of the Company’s Performance

The third quarter of 2021 provided further evidence of a sustained, post-pandemic recovery within the agricultural industry. Led by soybeans and corn, commodity prices rose sharply, thereby strengthening the domestic farm economy and spurring additional procurement and investment activity by growers. By contrast,During the third quarter of ~~2020 was marked~~2022, the agriculture industry continued to demonstrate resiliency. Driven by ~~an industry-wide malaise brought on~~geopolitical conditions, corn and soybean commodity prices for row crops remained high. Further, supply chain conditions continued to improve across many industries. Further, thus far, the industry has been able to compensate for the effects of inflation through price increases. The Company responded to these conditions by increasing prices, where possible, and deployed its factory assets to continue meeting demand. Consequently, the ~~pandemic. Following comparatively strong first and second quarters of 2021, the Company has continued that trend into~~Company’s overall operating results for the third quarter of ~~2021, during which~~2022 improved modestly in terms of net sales and more significantly in terms of profitability, as compared with those of the same period of 2021. Led by increased sales within our international business, consolidated net sales increased by ~~25 % ($147,298,~~3% (to end at $152,117 as compared to ~~$117,439 in third quarter of 2020)~~$147,298) and net income increased by ~~88% ($5,498, as compared to $2,927 in the comparable period of 2020)~~23% (to $6,741 from $5,498).

On a consolidated basis, domestic sales ~~rose 33%~~were flat, and international sales increased ~~16%~~9%, resulting in an overall net sales improvement of ~~25%~~3%. ~~Cost~~By contrast, cost of sales ~~increased by 22%, which~~ was ~~less than the relative~~virtually flat, quarter-over-quarter. This lower comparative increase in ~~net sales for the period. Cost~~cost of sales ~~were 61%~~was a result of ~~net sales during the period as compared to 63%~~higher selling prices and a favorable mix of higher-margin products in the comparable period of 2020. These factors, taken together, yielded a 32% increase in gross profit (to $57,064 from $43,265 in the comparable quarter of 2020). Included in this improvement, we experienced stronger factory performance during the period, driven by increased synthesis and formulation activity in our Axis facility. Average gross margin percent for the third quarter of ~~2021 improved to 39% from 37% during the same period in 2020.~~

Operating expenses on an absolute basis increased by about 24%, as compared to the comparable quarter (to $48,410 from $39,039); and remained flat as a percent of net sales at 33% for the 3-month period ended September 30, 2021, as compared to the same period of 2020.

During the three months ended September 30, 2021, we finalized the purchase price allocation of the Agrinos business that was acquired out of bankruptcy and benefitted from the recognition of bargain purchase gain adjustment in the amount of $292 as a result. The Company acquired Agrinos at an advantageous purchase price, which was below the fair value of the net assets acquired.

Operating income for the period rose 112% (to $8,946 from $4,226), driven by significantly higher sales, improved profit margin and greater factory efficiency. During the quarter, interest expense decreased by 6%. However, income taxes increased by $1,025, as a result of both higher pre-tax income and a higher effective tax rate as a result of the mix of income in different jurisdictions and fewer deductions for tax purposes in jurisdictions with higher statutory tax rates. These factors yielded net income for the period of $5,498, which was 88% higher than that of the same quarter in 2020. Details on our financial performance are set forth below.

~~RESULTS OF OPERATIONS~~

~~Quarter Ended September 30, 2021 and 2020:~~

2021

2020

Change

% Change

Net sales:

U.S. crop

$
66,722

$
48,361

$
18,361

38
%
U.S. non-crop

21,622

18,251

3,371

18
%
Total U.S.

88,344

66,612

21,732

33
%
International

58,954

50,827

8,127

16
%
Total net sales:

$
147,298

$
117,439

$
29,859

25
%
Cost of sales:

U.S. crop

$
36,485

$
28,215

$
8,270

29
%
U.S. non-crop

12,740

9,493

3,247

34
%
Total U.S.

49,225

37,708

11,517

31
%
International

41,009

36,466

4,543

12
%
Total cost of sales:

$
90,234

$
74,174

$
16,060

22
%
Gross profit:

U.S. crop

$
30,237

$
20,146

$
10,091

50
%
U.S. non-crop

8,882

8,758

124

1
%
Total U.S.

39,119

28,904

10,215

35
%
International

17,945

14,361

3,584

25
%
Total gross profit

$
57,064

$
43,265

$
13,799

32
%
Gross margin:

U.S. crop

45
%

42
%

U.S. non-crop

41
%

48
%

Total U.S.

44
%

43
%

International

30
%

28
%

Total gross margin

39
%

37
%

~~Net sales within our~~ ~~domestic crop business~~ were 38% higher than those of the third quarter 2020 ($66,722 as compared to $48,361). Strong crop commodity prices, particularly corn and soybeans, fueled grower profitability and increased demand for the purchase of yield-enhancing crop protection inputs. In corn, our leading soil insecticide Aztec® and our Impact® post emergent herbicide brands generated significant sales increases during the period. Similarly, among other granular soil insecticides, sales of Thimet®, used in peanuts and sugar cane, rose by 16%, as compared to the prior year, while sales of our soybean products increased by approximately 64%, as compared to the same period of 2020. With respect to cotton products, quarterly sales of our Bidrin® insecticide increased sharply (driven by higher pest pressure from multiple foliar insects in all areas of the Southeast region) as did those of our Folex® harvest defoliant (driven by higher cotton prices, increased harvestable acreage in Texas and an extended autumn harvest season that fueled demand for defoliants). In general, most of our products sold into the U.S. crop sector equaled or exceeded their sales performance of the third quarter of 2020. Slightly offsetting these increases, sales of our soil fumigants declined due to domestic logistics challenges that will likely push application of these products into the fourth quarter of 2021 and the first quarter of 2022.

Cost of sales within the domestic crop business increased by 29%, as compared to the prior year period, which was below the related increase in net sales of 38%. During the period, the Company sold a greater volume of higher margin products within the domestic crop business. Cost of sales was further aided by improved factory performance. These factors translated into an increase of 50% in gross profit.

~~Within our~~ ~~domestic non-crop business, net sales for the three months ended September 30, 2021 increased by 18% (to $21,622 from $18,251),~~2022, as compared to the same period of the prior year. ~~Leading~~Cost of sales were 60% of sales in the third quarter of 2022, as compared to 61% for the same period of 2021. These factors, taken together, yielded a 8% increase in gross profit, while overall gross margin percent improved to 40% from 39% quarter-over-quarter, as a result of selling more higher margin products, increased prices, and better factory performance.

Operating expenses remained flat at 33% of net sales, notwithstanding significant inflationary pressure. Operating income for the period increased by 26% (to $11,244 from $8,946), driven by the overall sales increase, higher selling prices and improved factory utilization. Interest expense was flat as compared with the same period of 2021, while tax expense rose by 95% (from $1,517 in the third quarter of 2021 to $2,963 in the same period of 2022) due to an increase in taxable income and higher effective tax rate. These factors yielded net income for the period of $6,741, a 23% increase over compared to $5,498 in the third quarter of 2021. Details on our financial performance are set forth below.

RESULTS OF OPERATIONS

Quarter Ended September 30, 2022 and 2021:


	2022			2021			Change			% Change
Net sales:
U.S. crop	$	69,115		$	66,722		$	2,393			4	%
U.S. non-crop		18,936			21,622			(2,686	)		-12	%
Total U.S.		88,051			88,344			(293	)		0	%
International		64,066			58,954			5,112			9	%
Total net sales:	$	152,117		$	147,298		$	4,819			3	%
Cost of sales:
U.S. crop	$	34,613		$	36,485		$	(1,872	)		-5	%
U.S. non-crop		10,125			12,740			(2,615	)		-21	%
Total U.S.		44,738			49,225			(4,487	)		-9	%
International		45,995			41,009			4,986			12	%
Total cost of sales:	$	90,733		$	90,234		$	499			1	%
Gross profit:
U.S. crop	$	34,502		$	30,237		$	4,265			14	%
U.S. non-crop		8,811			8,882			(71	)		-1	%
Total U.S.		43,313			39,119			4,194			11	%
International		18,071			17,945			126			1	%
Total gross profit	$	61,384		$	57,064		$	4,320			8	%
Gross margin:
U.S. crop		50	%		45	%
U.S. non-crop		47	%		41	%
Total U.S.		49	%		44	%
International		28	%		30	%
Total gross margin		40	%		39	%

Our domestic crop business recorded net sales that were 4% higher than those of the third quarter of 2021 ($69,115 as compared to $66,722). Year-over-year gains were posted by Dacthal (a leading weed control solution for a variety of high value vegetable crops including onions), Folex (which benefited from favorable harvest weather conditions and the increase in 2022 cotton acres in the Mississippi Delta region), and Bidrin (our cotton foliar insecticide which benefitted from increased early-season pest pressure). These gains were partially offset by lower sales of corn soil insecticide Aztec, due to a shift in customer purchasing patterns, and temporarily delayed sales of Thimet for sugarcane applications which were curtailed at the end of the quarter due to the impact of Hurricane Ian on logistics in Florida. Further, while drought conditions in our Western and Southwestern markets adversely impacted the physical volume of our soil fumigants products, we achieved improved net sales through appropriate price adjustments.

Cost of sales within the domestic crop business decreased by 5% (from $36,485 in 2021 to $34,613 in 2022) primarily as a result of selling more higher-margin products, and improved factory performance. As a result of these factors and increased pricing, domestic crop generated an 14% increase in gross profit (from $30,237 in the third quarter of 2021 to $34,502 this ~~improvement, we recorded more than~~year) on a ~~17% year-over-year improvement~~4% increase in sales.

Our domestic non-crop business posted a decline in net sales in the third quarter of 2022, as compared to the same period in the prior year (down 12% to $18,936 from $21,622 in 2021). In the quarter, demand for our OHP nursery and ornamental ~~business~~products declined, as consumer spending paused on concerns over a possible economic recession. Conversely, we saw an uptick in demand for ~~residential landscaping~~goods that we supply to professional pest control applicators and ~~decorative plants remained strong across~~landscapers. Mosquito control product sales were below the ~~U.S. Our foliar insecticides (Orthene and bifenthrin) used on turf, tree and ornamentals performed very strongly, as did our niche pharmaceutical business. Partially offsetting these gains, sales~~prior year third quarter, but in the aftermath of Hurricane Ian channel inventories of our ~~Dibrom® mosquito~~Dibrom adulticide ~~declined relative~~are being depleted and is expected to be replenished in the prior year’s third quarter, despite a strong season of tropical storms/hurricanes this year. This year-over-year purchasing pattern was influenced by heavy customer procurement during the third quarter of 2020 in response to 2021 storm season forecasts.next two quarters.

Cost of sales within the domestic non-crop business ~~grew~~declined by ~~34%,~~21% in the third quarter of 2022, as compared to the ~~prior quarter. This increase exceeded the 18% increase in net sales during the period. The timing of high margin royalties from Envance technology during the~~same period ~~coupled with reduced sales~~ in the ~~Dibrom adulticide contributed~~prior year (from $12,740 in 2021 to ~~the relative increase~~$10,125 in 2022), primarily resulting from lower sales offset by price increases and improved factory performance and associated overhead cost ~~of sales.~~recovery. Gross profit for domestic non-crop ~~remained approximately flat.~~ decreased by 1% (from $8,882 in 2021 to $8,811 in 2022).

Net sales of our international businesses rose by ~~about 16%~~9% during the period ~~(to~~($64,066 in 2022 vs. $58,954 in ~~2021~~2021) and constituted 42% of our consolidated quarterly sales. These results were achieved despite the challenges posed by the strong US Dollar and various production, supply, and transportation difficulties. The business benefited from ~~$50,827~~sales increases in ~~2020). Newly acquired businesses contributed significantly to this result. With more favorable weather~~soil fumigants, Mocap and Nemacur soil insecticides and an especially strong performance in Brazil, where our Counter nematicide sales are accelerating. Our Central American business experienced increased demand in the pineapple, banana, and citrus markets, along with continuing expansion of our Greenplants micronutrient solutions. In Mexico, despite drought conditions, our business experienced good performance by penetrating previously untapped regions of the country with at-plant fumigants and ~~the acquisition of AgNova, we tripled sales in~~herbicides on high-value crops. Despite sufficient rainfall and heavy demand for molluscicides and other insecticide products for use on canola, winter wheat and pulse, our Australian ~~business. The addition~~operations posted lower sales as a result of ~~the Agrinos biological products business also contributed incrementally with sales in China, India~~supply constraints and Ukraine. The International business posted improved sales of granular soil insecticides, bromacil herbicides, Folex cotton defoliant and soil fumigants for use in high value vegetable crops in a number of countries. Net sales in Brazil increased approximately 11% over the prior year period with the recovery of the agricultural sector and increasing demand for our nematicide Counter. Partially offsetting these gains, our businesses in Central America reported a 12% sales decline, driven largely by supply chain and regional logisticaltransportation-related difficulties.

~~The cost~~Cost of sales in our international business ~~was up~~increased by 12% (from $41,009 in 2021 to $45,995 in 2022), on sales that increased ~~18%,~~by 9% and ~~gross~~was impacted by cost increases (including logistics and freight) of the third-party products that we distribute. Gross profit ~~rose~~for the international businesses increased by ~~25%~~1% (to $18,071 in 2022 from $17,945 in 2021).

On a consolidated basis, gross profit for the third quarter of ~~2021~~2022 increased by ~~32% (to~~8% (from $57,064 ~~from $43,265~~ in ~~2020)~~2021 to $61,384 in 2022). ~~As mentioned above, with improved factory activity,~~Overall gross ~~margins rose to 39% from 37%~~margin percentage ended at 40% in the third quarter of ~~2021,~~2022, as compared to 39% in the ~~same period~~third 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 ~~$9,371~~$1,730 to ~~$48,410~~$50,140 for the ~~three months~~three-month period ended September 30, ~~2021,~~2022, as compared to the same period in ~~2020.~~2021. The ~~differences~~changes in operating expenses by department are as follows:


	2022		2021		Change			% Change
Selling	$	14,162	$	12,462	$	1,700			14	%
General and administrative		15,570		15,727		(157	)		-1	%
Research, product development and regulatory		8,513		7,674		839			11	%
Freight, delivery and warehousing		11,895		12,547		(652	)		-5	%
Subtotal	$	50,140	$	48,410	$	1,730			4	%

2021

2020

Change

% Change

Selling

$
12,462

$
10,824

$
1,638

15
%
General and administrative

15,727

10,629

5,098

48
%
Research, product development and regulatory

7,674

6,639

1,035

16
%
Freight, delivery and warehousing

12,547

10,947

1,600

15
%

$
48,410

$
39,039

$
9,371

24
%
•

Selling expenses increased by $1,700 to end at $14,162 for the three-month period ended September 30, 2022, as compared with the same period of the prior year. This included increased costs associated with travel expenses (as the business resumed in-person interaction with customers), inflation related increased wages, increased spending on advertising and promoting the Company’s products, and the cost of commissions associated with sales growth in Brazil. These increased costs were somewhat offset by exchange movement in key currencies.

•

General and administrative expenses decreased by $157 to end at $15,570 for the three-month period ended September 30, 2022, as compared to the same period of 2021. The main drivers were the positive impacts on the foreign currency exchange rates, offset by increased wages, travel expenses, legal and other administrative costs in support of our growing business.

•

Research, product development costs and regulatory expenses increased by $839 to end at $8,513 for the three-month period ended September 30, 2022, as compared to the same period of 2021. The main drivers were increased international regulatory and registration costs as we invest in our strongly growing business.

•

Freight, delivery and warehousing costs for the three-month period ended September 30, 2022, were $11,895 or 7.8% of sales as compared to $12,547 or 8.5% of sales for the same period in 2021. The decrease can mainly be attributed to improved supply chain conditions and variations in delivery destinations.

•

Selling expenses increased by $1,638 to end at $12,462 for the three months ended September 30, 2021, as compared to the same period of 2020. The main drivers were the costs associated with the activities from the businesses acquired in the last quarter of 2020, increased marketing costs, increased labor costs related to inflation and some key staff additions and, finally, increases in travel costs as our global markets are getting back to business as usual.

•

General and administrative expenses increased by $5,098 to end at $15,727 for the three months ended September 30, 2021, as compared to the same period of 2020. The main drivers were the costs in the amount of $700 associated with the addition of the entities acquired in the final quarter of 2020, the increase in short-term and long-term incentive compensation of $1,644, reflecting improved financial performance, additional legal expenses of $658 largely arising from the Department of Justice investigation, and adverse foreign exchange adjustments primarily associated with the activities of our businesses in Central and South America which were impacted by the strengthening of the US Dollar. Finally, we recorded income of $493 related to the adjustment to the fair value of contingent consideration associated with an acquisition made in the final quarter of 2020.

•

Research, product development costs and regulatory expenses increased by $1,035 to $7,674 for the three months ended September 30, 2021, as compared to the same period of 2020. The main drivers were increased spending on our Product Development activities, including the commercialization of our SIMPAS delivery systems. In addition, we incurred expenses associated with newly acquired entities and increased registration costs for our expanded international businesses.

•

Freight, delivery and warehousing costs for the three months ended September 30, 2021 were $12,547 or 8.5% of sales as compared to $10,947 or 9.3% of sales for the same period in 2020. This change included some significant increases in freight changes, partially offset by the mix of product shipped and associated delivery charges.

On April 1, 2020, the Company made a strategic investment in Clean Seed Inc., in the amount of $1,190. ~~During~~The Company recorded negative fair value adjustments in the amount of $454 and $269 for the three months ended September 30, 2022 and 2021, the Company recorded a decrease in fair value in the amount of $269 as compared to recording an increase in fair value of $257 during the same three months of the prior year. These changes in fair value of our investment directly reflect changes in the stock’s quoted market price. Further, the Company recorded an impairment on its equity investment in Biological Products for Agriculture (“Bi-PA”) in the amount of $399 during the three months ended September 30, 2021. There was no such impairment recorded during the same period of the prior year.respectively.

Interest costs net of capitalized interest were ~~$962~~$1,086 in the ~~three months~~three-month period ended September 30, ~~2021,~~2022, as compared to ~~$1,022~~$962 in the same period of ~~2020.~~2021. Interest costs are summarized in the following table:

Average Indebtedness and Interest expense


	Three months ended September 30, 2021								Three months ended September 30, 2020								Three months ended September 30, 2022								Three months ended September 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)	$	147,171	$	889			2.4	%	$	162,734	$	1,007			2.5	%	$	125,441	$	1,104			3.5	%	$	147,171	$	889			2.4	%
Amortization of deferred loan fees		—		70			—			—		80			—			—		61			—			—		70			—
Amortization of other deferred liabilities		—		2			—			—		2			—			—		10			—			—		2			—
Other interest expense		—		52			—			—		7			—			—		(1	)		—			—		52			—
Subtotal		147,171		1,013			2.8	%		162,734		1,096			2.7	%		125,441		1,174			3.7	%		147,171		1,013			2.8	%
Capitalized interest		—		(51	)		—			—		(74	)		—			—		(88	)		—			—		(51	)		—
Total	$	147,171	$	962			2.6	%	$	162,734	$	1,022			2.5	%	$	125,441	$	1,086			3.5	%	$	147,171	$	962			2.6	%

The Company’s average overall debt for the ~~three months~~three-month period ended September 30, ~~2021,~~2022 was ~~$147,171,~~$125,441, as compared to ~~$162,734~~$147,171 for the ~~three months~~three-month period ended September 30, ~~2020.~~2021. Our borrowings in the ~~three months~~three-month period ended September 30, ~~2021~~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 ~~the associated investment~~increases in ~~expanded~~ working ~~capital.~~capital in support of business growth. As can be seen from the table above, ~~our~~the effective bank interest rate on our revolving line of credit was ~~2.6% for~~3.5% and 2.4% at each of the ~~three months~~three-month period ended September 30, 2022 and 2021, ~~as compared to 2.5% in 2020.~~respectively.

Income tax expense increased by ~~$1,025~~$1,446 to ~~$1,517~~$2,963 for the ~~three months~~three-month period ended September 30, ~~2021,~~2022, as compared to ~~$492~~$1,517 for the comparable period in ~~2020.~~2021. The effective tax ~~rate~~rates for the ~~three months~~three-month period ended September 30, 2022, and 2021, were 30.5% and ~~2020, was~~ 20.7% ~~and 14.2%~~, 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 increase in effective tax rate iswas primarily driven by the mix of our domestic and international ~~income and higher~~ ~~benefit on discrete items in 2020 due to a lower pre-tax income for the three months ended September 30, 2020.~~income.

Our net income for the ~~three months~~three-month period ended September 30, ~~2021~~2022, was ~~$5,498~~$6,741 or ~~$0.18~~$0.23 per basic and diluted share, as compared to ~~$2,927~~$5,498 or ~~$0.10~~$0.18 per basic and diluted share in the same quarter of ~~2020.~~2021.

Nine Months Ended September 30, ~~2021~~2022 and ~~2020:~~2021:

Overview of the Company’s Performance

~~Within the global agricultural industry,~~

During the first nine months of ~~2021 were characterized~~2022, the global agricultural industry maintained the upcycle that began in 2021. Commodity prices remained high, driven in part by ~~greater confidence (having just emerged~~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 ~~worst~~global market, and a stronger farm economy in the U.S. Inflation in multiple countries has led to higher costs of goods and transportation; however, the strength of the ~~pandemic) and stronger commodity pricing for row crops. Domestic markets~~farm economy was able to absorb these effects during the subject period. Following extraordinary activity in the first quarter, domestic distribution within our industry ~~gained strength~~slowed procurement modestly during the ~~first~~second and ~~second quarters and continued that trend into the third. Our international businesses, for the most part, enjoyed similar market trends. In summary,~~third quarters. All told, the Company’s overall operating results for the first nine months of ~~2021~~2022 improved ~~considerably~~in most all respects over those of the same period of ~~2020.~~2021.

On a consolidated basis, with domestic sales up ~~31%~~12% and international sales up by ~~17%~~14%, overall net sales increased by ~~25%~~13% (to ~~$398,063~~$449,636 from ~~$317,956)~~$398,063). Cost of sales were up ~~24%,~~10% on an absolute basis but decreased as a percent of net sales to 59% from 61%. Factory performance improved during the first nine months of 2022, as compared to that of 2021. These factors, taken together, yielded an increase in gross profit, which was up $28,022 or 18% period-over-period and improved to 41% of net sales, up from 39% during the first nine months of 2021. Operating expenses rose on an absolute basis by 10% but declined as a percent of net sales to ~~61% from 62%~~32% as compared to 33% of net sales for the same period of the prior year. Included in cost of sales, our overall factory performance was weaker, with under-recovery amounting to 2.5% of sales, as compared to 1.6% of sales in the first nine months of 2020. These factors, taken together, yielded a 27% increase in gross profit (to $154,334 from $121,952) and, as a percent of net sales,

Interest expense declined slightly, while income tax expense increased to ~~39%~~$10,187 from ~~38%, as compared to~~$5,324 during the comparable period ~~in 2020. Year to date in 2021, operating expenses rose on an absolute basis by 22% and improved as a percentage of sales to 33%, as compared to 34% for the same period of the prior year.~~

Operating income for the nine months ended September 30, 2021 rose 69% (to $21,571 from $12,789) as a result of the Company’s strong sales performance. Interest expense declined by 23% as a result of cash generated (from increased sales and early pay programs), which was used to pay down debt. Income tax expense increasedlast year, primarily as a result of stronger financial performance ~~plus an increase in~~and higher effective tax ~~rate (up to 27.7% from 20.0% in 2020).~~rate. Overall, the ~~Company generated~~Company’s net income for the period ~~of $13,713,~~increased by 71%, ending at $23,506, as compared to ~~$7,334~~$13,713 during the first nine months of ~~2020; this constitutes an 87% increase.~~the prior year. Details on our financial performance are set forth below.

RESULTS OF OPERATIONS

Nine months ended September 30, ~~2021~~2022, and ~~2020~~2021


	2021			2020			Change		% Change			2022			2021			Change			% Change
Net sales:
U.S. crop	$	184,052		$	148,630		$	35,422		24	%	$	220,503		$	184,052		$	36,451			20	%
U.S. non-crop		60,563			37,881			22,682		60	%		53,648			60,563			(6,915	)		-11	%
Total U.S.		244,615			186,511			58,104		31	%		274,151			244,615			29,536			12	%
International		153,448			131,445			22,003		17	%		175,485			153,448			22,037			14	%
Total net sales:	$	398,063		$	317,956		$	80,107		25	%	$	449,636		$	398,063		$	51,573			13	%
Cost of sales:
U.S. crop	$	105,739		$	80,511		$	25,228		31	%	$	115,904		$	105,739		$	10,165			10	%
U.S. non-crop		32,516			19,346			13,170		68	%		28,822			32,516			(3,694	)		-11	%
Total U.S.		138,255			99,857			38,398		38	%		144,726			138,255			6,471			5	%
International		105,474			96,147			9,327		10	%		122,554			105,474			17,080			16	%
Total cost of sales:	$	243,729		$	196,004		$	47,725		24	%	$	267,280		$	243,729		$	23,551			10	%
Gross profit:
U.S. crop	$	78,313		$	68,119		$	10,194		15	%	$	104,599		$	78,313		$	26,286			34	%
U.S. non-crop		28,047			18,535			9,512		51	%		24,826			28,047			(3,221	)		-11	%
Total U.S.		106,360			86,654			19,706		23	%		129,425			106,360			23,065			22	%
International		47,974			35,298			12,676		36	%		52,931			47,974			4,957			10	%
Total gross profit	$	154,334		$	121,952		$	32,382		27	%	$	182,356		$	154,334		$	28,022			18	%
Gross margin:
U.S. crop		43	%		46	%							47	%		43	%
U.S. non-crop		46	%		49	%							46	%		46	%
Total U.S.		43	%		46	%							47	%		43	%
International		31	%		27	%							30	%		31	%
Total gross margin		39	%		38	%							41	%		39	%

Our domestic crop business recorded net sales that were ~~24%~~20% above those of first nine months of ~~2020 (to $184,052 from $148,630). Strong~~2021. Assisted by consistently high crop commodity prices and ~~gradual economic recovery have facilitated steady procurement patterns~~a strong domestic farm economy, the Company experienced strong demand across all product categories and was able to implement appropriate pricing actions to cover escalating material and transportation costs. Our Midwest corn business was exceptional, with Aztec soil insecticide and Impact herbicide brands increasing 70% over the prior year nine-month period. Our domestic cotton business led by Bidrin foliar insecticide and Folex harvest defoliant grew by over 40% in the ~~domestic agricultural distribution channel. In Midwest corn,~~first three quarter of 2022, as compared to the same period of 2021. Domestic Crop also benefited from very strong sales increases in Dacthal for high valued vegetable crops, Assure II which is expanding sales significantly in the US and Envoke, a newly introduced herbicide used to address glyphosate resistant weeds. The only area of demand softness was in soil fumigants, which experienced lower unit volumes due to drought conditions in Western and Southwestern states where water allocation has been implemented. However, we ~~recorded higher sales of our Impact post-emergent herbicide brands as customers invested~~were able to ~~protect their 2021 in-season corn from challenging weeds~~make pricing adjustment to cover inflationary material and transportation costs in order to ~~maximize yield. We also recorded increased sales~~retain our traditional profit margins. During the first nine months of ~~our industry leading soil insecticide products, as persistent rootworm~~2022, customer procurement activity was exceptionally high in the first quarter and nematode pressure along with concerns about supply chain disruption drove demand for these products. Sales of our cotton products increased significantly, due primarily to a healthy commodity price, intensifying foliar pest pressure,assumed more normalized levels in the second and favorable (cool) autumn weather for our Folex harvest defoliant. Soil fumigant sales remained relatively flat compared to the prior year, as renewed potato and vegetable demand resulting from economic reopening was partially offset by domestic logistical challenges getting these liquid bulk products to end use applicators. Overall, we saw increased sales in virtually every category, including soil insecticides, foliar insecticides, specialty herbicides and growth regulators. third quarters.

Cost of sales within the domestic crop business increased ~~31%~~10%, ~~as compared to the increase in net sales of 24%. This was driven by strong sales performance, partially offset by reduced factory activity,~~ as compared to the first nine months of ~~2020.~~2021, driven by sales that increased by 20% including increased sales of higher margin products (many of which we manufacture in our domestic facilities) and benefitting from improved factory performance. Gross profit for domestic crop rose by ~~15%.~~34% during the nine-month period to $104,599 from $78,313.

Our domestic non-crop business recorded ~~a 60% year-over-year increase~~an 11% decrease in net sales for the first nine months of the year (to ~~$60,563~~$53,648 from ~~$37,881)~~$60,563). ~~In this category, sales~~Revenue for our Envance technologies decreased when compared to the same period in 2021, due primarily to a one-time license fee received in 2021, and the timing of recognizing revenue for recurring royalties. Additionally, we experienced a fall-off in consumer demand for our OHP nursery and ornamental products, which we attribute to a pause in consumer spending caused by concerns over possible economic recession. Sales of our Dibrom® mosquito adulticide ~~sales grew significantly, influenced by distribution channel inventory restocking and a steady progression of tropical storm activity throughout 2021. Demand~~remained nearly flat as did demand for commercial pest control products improved considerably from 2020 pandemic levels. Revenues for our Envance technologies increased significantly when compared to the first nine months of last year, due primarily to additional license fees(pest strips and royalties during the first quarter of 2021. Our OHP nursery and ornamental business continued to grow sales, as demand for homeowner garden and landscape products remained strong throughout the first three quarters. Our GemChem pharmaceutical supply business also grew by approximately 50%, benefitting from the rebounding economy.bifenthrin).

Cost of sales within the domestic non-crop business ~~increased~~decreased by ~~68%~~11%, (to $28,822 in 2022 from $32,516 in 2021) on ~~a 60% increase in~~ net ~~sales.~~sales that were down by 11%. Gross profit for domestic non-crop ~~increased~~decreased by ~~51%.~~11% (to $24,826 in 2022 from $28,047 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 ~~nearly 17%~~14% during the first ~~nine months~~three quarters of ~~2021~~2022 (to $175,485 in 2022 from $153,448 in ~~2021 from $131,445 in 2020)~~2021). ~~Strong results in~~Central America and Mexico both delivered double-digit growth by satisfying continuing strong demand for soil fumigants (on high-value crops), herbicides and granular insecticides. Brazil continued an upward trend (grew over 35%) fueled by further market penetration of our Counter granular insecticide/nematicide. Australia ~~contributed significantly to this success. Mexico~~matched prior year sales ~~have been~~ driven by ~~continuing demand for granular insecticides, bromacil herbicides and soil fumigants for use on high value vegetable crops. In Australia,~~our expanded market footprint following the integration of ~~recently~~the acquired AgNova ~~with our existing~~ business, ~~in that territory drove~~partially offset by supply and logistics challenges. Significant product sales ~~to more than three-times previous levels. Sales performance was down slightly in Central America due to continued COVID-19 limitations on in-person sales~~improvements included Mocap and ~~marketing efforts,~~Nemacur insecticides (together growing over 40%) and ~~some unfavorable weather in the region earlier this year. In Canada, we have experienced reduced sales of~~ Assure II ~~due to intense price competition. In Brazil, net sales increased during the first nine months, due to a rebound in the agricultural sector following the height of the pandemic.~~herbicide growing approximately 250%.

Cost of sales in our international business increased by ~~10%~~16% (to $122,544 in 2022 from $105,474 in 2021) primarily driven ~~largely~~ by volume growth and impacted by increased prices from the ~~17% increase in net sales.~~strengthening US Dollar, and general inflation on materials and associated logistics costs. Gross profit for the international businesses increased by ~~36%~~10% to $52,931 during the ~~period compared to~~first nine months of 2022 from $47,974 during the same period in ~~the prior year.~~2021.

On a consolidated basis, ~~gross profit~~net sales for the first nine months of ~~2021~~2022 increased 13%, and gross profit increased by ~~27% (to $154,334 from $121,952),~~18%. Our gross profit in the first nine months of 2022 increased in part as a result of improved sales volumes ~~detailed above. Included in this improvement,~~and pricing, and improved factory ~~cost recovery performance declined during the first nine months of 2021, as compared to the same period of 2020. Nevertheless, gross~~performance. Gross margin performance, when expressed as a percentage of sales, rose to 41% from 39% ~~from 38%, for the comparable period in 2020.~~year-over-year.

Operating expenses increased by ~~$23,771~~$12,616 to ~~$132,934~~$145,550 for the ~~nine months~~nine-month period ended September 30, ~~2021,~~2022, as compared to the same period in ~~2020.~~2021. The ~~differences~~changes in operating expenses by department are as follows:


	2021		2020		Change		% Change			2022		2021		Change		% Change
Selling	$	35,184	$	31,329	$	3,855		12	%	$	37,844	$	35,184	$	2,660		8	%
General and administrative		46,859		33,649		13,210		39	%
General and administrative:
Other											50,262		46,859		3,403		7	%
Proxy contest activities											1,785		—		1,785		100	%
Research, product development and regulatory		21,221		18,896		2,325		12	%		23,241		21,221		2,020		10	%
Freight, delivery and warehousing		29,670		25,289		4,381		17	%		32,418		29,670		2,748		9	%
	$	132,934	$	109,163	$	23,771		22	%	$	145,550	$	132,934	$	12,616		9	%

•

~~Selling expenses increased by $3,855 to end at $35,184 for the nine months ended September 30, 2021, as compared to the same~~•

Selling expenses increased by $2,660 to end at $37,844 for the nine-month period of 2020. The main drivers were the costs associated with the activities from the businesses acquired in the last quarter of 2020, increased labor costs related to inflation and some key staff additions and, increases in travel and entertainment expenses. These increased expenses were somewhat offset by the reduction in advertising and promotion costs.

•

General and administrative expenses increased by $13,210 to end at $46,859 for the nine months ended September 30, 2021, as compared to the same period of 2020. The main drivers were the costs in the amount of $2,557 associated with the addition of the entities acquired in the final quarter of 2020, the increase in short-term and long-term incentive compensation of $5,087, additional legal expenses of $2,524 largely arising from the Department of Justice investigation, increased bad debt expenses of $338 for our businesses in Central America, and adverse foreign exchange costs associated with our businesses in Central and South America. Finally, the Australian business we acquired in the final quarter of 2020 has performed above expectations and as a result we recorded an expense of $520 related to the increase to the fair value of the associated contingent consideration.

•

Research, product development costs and regulatory expenses increased by $2,325 to end at $21,221 for the nine months ended September 30, 2021, as compared to the same period of 2020. The main drivers were increases in our domestic product development activities including activities in support of our SIMPAS delivery systems, the activities of our newly acquired businesses and expanded registration expenses for our international businesses.

•

Freight, delivery, and warehousing costs for the nine months ended September 30, 2021 were $29,670 or 7.5% of sales as compared to $25,289 or 8.0% of sales for the same period in 2020. This change reflects increased overall sales offset by a change in the mix of product shipped and associated delivery charges, which are up over 500% in some instances during the period.

~~During the nine months~~ ended September 30, ~~2021~~2022, as compared to the same period of 2021. The main drivers were increased costs associated with commissions in Brazil, travel expenses (as the business resumed in-person interaction with customers), inflation related increased wages and product complaints as a result of sales growth in Mid-west offset by positive movements in some key exchange rates.

During the nine-month period ended September 30, 2022, the Company recorded ~~an increase~~a decrease in the fair value of our equity investment in Clean Seed in the amount of ~~$502~~$857 and ~~$281, respectively.~~recorded an increase in the amount of $103 during the nine months ended September 30, 2021. These changes in fair value of our investment directly reflect changes in the stock’s quoted market price. ~~Further, the Company recorded an impairment on its equity~~

~~investment in Bi-PA in the amount of $399 during the three months ended September 30, 2021. There was no such impairment recorded during the same period of the prior year.~~

During the ~~nine months~~nine-month period ended September 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~~condensed consolidated statements of ~~Operations~~operations in the amount of $672.

Interest costs net of capitalized interest were ~~$2,921~~$2,256 in the first ~~nine months~~nine-month period of ~~2021,~~2022, as compared to ~~$3,804~~$2,921 in the same period of ~~2020.~~2021. Interest costs are summarized in the following table:

The Company’s average overall debt for the ~~nine months~~nine-month period ended September 30, ~~2021~~2022, was ~~$144,405,~~$111,939, as compared to ~~$171,203~~$144,405 for the nine months ended September 30, ~~2020.~~2021. During the period, we continued to focus on our ~~usage~~use of revolving debt, while funding working capital for the ~~newly acquired products and businesses.~~growing business. As can be seen from the table above, our effective bank interest rate on our revolving line of credit was 2.7% for the nine months ended September 30, ~~2021,~~2022, as compared to ~~3.0% in 2020.~~2.5% for the same period of 2021.

Income tax expense increased by ~~$3,472~~$4,863 to end at ~~$5,324~~$10,187 for the ~~nine months~~nine-month period ended September 30, ~~2021,~~2022, as compared to income tax expense of ~~$1,852~~$5,324 for the comparable period in ~~2020.~~2021. The effective tax rate for the nine months ended September 30, ~~2021~~2022, was ~~27.4%~~30.2% as compared to ~~20.0%~~27.4% for same period last year. The rate has increased compared to prior year reflecting a mix of income in different jurisdictions. For ~~the nine months ended September 30,~~tax years beginning after December 31, 2021, the ~~Company benefited from~~Tax Cuts and Jobs Act (“TCJA”) of 2017 amends Internal Revenue Code Section 174 wherein research and development expenditures will no longer be deducted in the tax ~~impact~~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 ~~vesting of certain stock grants and discrete income tax benefit resulting from return to provision adjustments from Hong Kong off-shore~~ activities ~~income exclusion and non-taxable income as a result of reinstatement of an indemnification asset from our international subsidiaries.~~

~~The effective tax rate for the nine months ended September 30, 2020, included~~ two discrete income tax benefits. First, the Company assessed its income tax positions to account for the Coronavirus Aid Relief and Economic Security Act (“CARES Act”) which was signed into law on March 27, 2020. A provision of the act modified the amount of interest deduction allowed and therefore reduced the Company’s 2019 Global Intangible Low Tax Income (“GILTI”) inclusion. Second, the Company benefited from the tax impact of the vesting of certain stock grants activities.

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.

Our net income for the ~~nine months~~nine-month period ended September 30, ~~2021~~2022 was $23,506 or $0.80 per basic and $0.78 per diluted share, as compared to $13,713 or $0.46 per basic and $0.45 per diluted share ~~as compared to $7,334 or $0.25 per basic and diluted share~~ in the same period of ~~2020.~~2021.

The Company’s operating activities ~~used~~utilized net cash of $45,678 during the nine-month period ended September 30, 2022, as compared to $174 during the nine months ended September 30, ~~2021, as compared to providing net cash of $20,424 during the same period of the prior year.~~2021. Included in the ~~$174~~$45,678 are net income of ~~$13,713,~~$23,506, plus non-cash depreciation, amortization of intangibles and other assets and discounted future liabilities, in the amount of ~~$20,016,~~$19,305, loss on disposal of property, plant and equipment of $265, amortization of deferred loan fees of ~~$294~~$174 and provision for bad debts in the amount of ~~$1,202.~~$597. Also included are stock-based compensation of ~~$5,309,~~$4,396, adjustment to contingent consideration in the amount of ~~$520, loss from equity method investment of $388, decrease~~$621, increase in deferred income taxes of ~~$560,~~$64, change in fair value of an equity ~~investments~~investment of ~~$103, loan principal~~$857, and ~~interest forgiveness of $672,~~ net foreign currency adjustments of ~~$330 and adjustment to bargain purchase gain on business acquisition of $171.~~$218. These together provided net cash inflows of ~~$39,606,~~$49,903, as compared to ~~$26,996~~$39,606 for the same period of ~~2020.~~2021.

During the ~~nine months~~nine-month period of ~~2021,~~2022, the Company increased working capital by ~~$37,611,~~$97,986, as compared to an increase of ~~$4,950~~$37,611 during the same period of the prior year. Included in this change: inventories increased by ~~$4,352,~~$38,987, as compared to ~~$16,941~~$4,325 for the same period of ~~2020. Deferred revenue~~2021. While increases in inventory are normal for the Company’s annual cycle, the Company decided this year 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 ~~$38,272,~~$62,831, as compared to ~~$1,079~~$38,272 in the same period of ~~2020,~~2021, driven by customer decisions regarding demand, payment timing and our cash incentive programs. Our accounts payable balances increased by ~~$7,769,~~$14,418, as compared to ~~decreasing by $1,759~~an increase of $7,769 in the same period of ~~2020.~~2021, driven by increased factory activity levels. Accounts receivables increased by ~~$42,979,~~$46,289, as compared to ~~$5,089~~an increase of $42,979 in the same period of ~~2020.~~2021. This is primarily driven by increased ~~consolidated~~group sales ~~particularly during the three months ended September 30, 2021, which included the impact of the new businesses acquired in the last year.~~and strong international growth. Prepaid expenses increased by ~~$2,194,~~$4,272, as compared to ~~$532~~$2,194 in the same period of ~~2020.~~2021. Income tax receivable ~~decreased~~increased by ~~$2,031,~~$5,201, as compared to ~~$873~~a decrease of $2,031 in the prior year. Accrued programs increased by ~~$33,982, as~~$45,016, (as compared to ~~$20,058~~$33,982 in the prior ~~year.~~year), which is normal at this point in the growing season. Finally, other payables and accrued expenses increased by ~~$4,025,~~$2,555, as compared to ~~decreasing by $2,117~~$4,025 in the prior year.

With regard to our 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 mix of customers in the first nine months of ~~2021,~~2022, as compared to the prior year. The Company accrues programs in line with the growing season upon which specific products are targeted. Typically crop products have a growing season that ends on September 30th of each year. During the first nine months of ~~2021,~~2022, the Company made accruals for programs in the amount of ~~$59,267~~$78,640 and payments in the amount of ~~$25,353.~~$33,869. During the first nine months of the prior year, the Company made accruals in the amount of ~~$42,254~~$59,267 and made payments in the amount of ~~$22,208.~~$25,353. The increase in accruals for programs in the first nine months of 2022, compared to the same period in 2021, is a direct result of an increase in sales of qualifying products.

Cash used for investing activities for the ~~nine months~~nine-month period ended September 30, 2022 and 2021 was $9,978 and ~~2020 was~~ $18,431, ~~and $14,120,~~ respectively. The $18,431 in 2021 includes a product acquisition in the amount of $10,000. No such acquisition took place in the current year. In 2022, the Company spent ~~$7,963~~$8,946 on purchases of fixed assets ~~acquisitions~~ primarily focused on continuing to invest in manufacturing ~~infrastructure,~~infrastructure. In addition, the Company made a ~~product line acquisition~~payment of ~~$10,000, intangible assets of $285,~~$1,000 to Clean Seed to amend a license agreement under which royalty-bearing license rights were converted to fully paid-up, royalty-free, perpetual license rights, and ~~an investment of $183,~~spent $78 on patents for the Envance technology business.

During the nine-month period ended September 30, 2022, financing activities provided $59,797, as compared to $19,974 during ~~the first nine months of 2021. During~~ the same period of the prior ~~year,~~year. Net borrowings under the ~~Company spent $8,988 on fixed assets acquisitions, intangible assets of $3,942, and $1,190 in an equity investment.~~

~~During~~Credit Agreement amounted to $96,000 during the ~~nine months~~nine-month period ended September 30, ~~2021, financing activities provided $19,974,~~2022, as compared to ~~using $3,082~~$28,592 in the same period of the prior year. ~~This is principally from the increased borrowings on the Company’s senior credit facility. In the first nine months of 2021, the~~The Company paid dividends to stockholders amounting to ~~$1,789,~~$2,072 during the nine months ended September 30, 2022, as compared to ~~$1,168~~$1,789 in the same period of ~~2020. In addition,~~2021. The Company paid $13,731 for the repurchase of 720,350 shares of its common stock during the nine-month period ended September 30, 2022 and $20,000 in connection with an accelerated share repurchase program. There were no such purchases during the nine-month period ended September 30, 2021. The Company ~~made payments on contingent consideration in~~received $837 for the ~~amount~~issuance of ~~$250,~~shares under ESPP during the nine-month period ended September 30, 2022, as compared to ~~$1,227 in~~$743 for the same period last year. The Company also received $783 from the exercise of ~~2020.~~ stock options during the nine-month period ended September 30, 2022, as compared to $172 in the prior period. Lastly, in exchange for shares of common stock returned by employees, the Company paid $2,020 and $2,915 for tax withholding on stock-based compensation awards during the nine-months ended September 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~~condensed consolidated balance sheets at September 30, ~~2021~~2022 and December 31, ~~2020.~~2021. These are summarized in the following table:

~~As of~~At September 30, ~~2021,~~2022, the Company was compliant with all covenants to its credit agreement. Also, ~~as of~~at September 30, ~~2021,~~2022, the Company’s total Funded Debt amounted to ~~$137,300.~~$149,300. At that date the Company’s rolling four quarter Consolidated EBITDA (as defined in the Credit ~~Agreement)~~Agreement, see Note 10) amounted to ~~$66,364,~~$77,167, which results in a leverage ratio of ~~2.07,~~1.93, as compared to a maximum leverage ratio permitted under the Credit Agreement of 3.5. ~~As of~~At September 30, ~~2021,~~2022, the Company ~~had~~has the capacity to increase its borrowings by up to ~~$94,973,~~$120,783, according to the terms thereof. This compares to an available borrowing capacity of ~~$44,500~~$94,973 as of September 30, ~~2020. As of~~2021. At December 31, ~~2020,~~2021, the Company had borrowing capacity of ~~$86,736.~~$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 and proforma basis arising from acquisitions, (2) net borrowings, and (3) the leverage covenant (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.

Please refer to Note 15 in the accompanying Notes to the ~~Condensed Consolidated Financial Statements~~condensed consolidated financial statements for recently issued accounting 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, ~~2020,~~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, ~~2020.~~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~~updates to estimates and assumptions are reflected in the ~~Condensed Consolidated Financial Statements~~condensed consolidated financial statements in the period that ~~revisions~~these updates 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 nine-months ended September 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, ~~2020,~~2021 and note 10 to the ~~Condensed Consolidated Financial Statements.~~condensed consolidated financial statements.

The Company faces market risk to the extent that changes in foreign currency exchange rates affect our non-U.S. dollar functional currency as to foreign subsidiaries’ revenues, expenses, assets and liabilities. The Company currently does not engage in hedging activities with respect to such exchange rate risks.

Assets and liabilities outside the U.S. are located in regions where the Company has 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 functional currency other than the U.S. dollar are generally considered long-term. Accordingly, the Company does not hedge these net investments.

As of September 30, ~~2021,~~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 30, ~~2021,~~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.

Please refer to Note 14 in the accompanying Notes to the ~~Condensed Consolidated Financial Statements~~condensed consolidated financial statements for legal updates.

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, ~~2020,~~2021, filed on March ~~31, 2021. In preparing this document, we have reviewed all the risk factors included in that document and find that there~~14, 2022. There are no material changes to ~~those~~the risk factors ~~except for~~as so stated.

Domestic and regional inflation trends, increased interest rates and other factors could lead to the ~~following:~~

erosion of economies and adversely impact the Company. Both the US and many other countries are experiencing inflation, which, in turn, is leading to increase costs in multiple industry segments, including agriculture and related industries. The ~~COVID-19 pandemic is creating risk, uncertainties and adverse conditions in many industries both here and abroad.~~ ~~The Company is closely monitoring the impact~~persistence of the COVID-19 pandemic on all aspects of its business, including how the pandemic will impact its customers, business partners, and employees. While the Company did not incur significant disruptions from the COVID-19 pandemic during the nine months ended September 30, 2021, the Company is unableinflation has led central bankers to predict the impact that the pandemic will have on its financial condition, results of operations and cash flows due to numerous uncertainties. The extent to which the COVID-19 pandemic impacts the Company’s operations and those of its customers will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact, and the direct and indirect economic effects of the pandemic and containment measures, among others.increase interest rates within their regions. There is no guarantee that these measures will arrest the inflationary trend. Further, these factors, taken together with reduced productivity and constraints on the labor supply could lead to recessionary periods in the regions in which the Company ~~will be able~~does business. While the Company takes measures within its control to ~~operate without material disruption for~~manage the ~~duration~~effects of inflation, higher interest rates and other factors, ultimately, they are outside of the ~~pandemic~~ Company’s control. Further, the persistence and/or ~~that its~~severity of one or more of them could adversely affect the financial ~~conditions and results~~performance and/or operations of ~~operations will not be materially adversely affected~~the Company.

Item 2. Purchases of Equity Securities by the ~~pandemic in future quarters.~~Issuer

The Company periodically repurchases shares of its common stock under a board-authorized repurchase program through a combination of open market transactions, and ~~adverse conditions for our industry, including significant price increases especially with regard to ocean bound shipments~~. With the prolongation of the coronavirus pandemic, the global supply chain has been under increased stress stemming from container shortages, a lack of domestic truck drivers and a shift in consumer buying habits. Consequently, ocean cargo both inbound to, and, in some cases, outbound from, the US has experienced significant delays, while domestic ports and regional warehouses have been filled beyond capacity. At this stage, it is estimated that about 15% of the world’s ocean cargo is being held up in vessels waiting for port clearance or in storage sites en route to its destination. To date, the Company has been able to source and route products in a manner that has enabled it to avoid material disruption in the supply of raw materials, intermediates, finished goods and packaging. However, there is no guarantee that the supply chain condition will improve any time soon or that the company will continue to avoid material disruption. Such disruption could have a material adverse effect on the company’s operations or financial condition.accelerated share repurchase (ASR) arrangements.

On ~~August 30, 2021,~~March 8, 2022, pursuant to a Board of Directors resolution, the Company announced its intention to repurchase an aggregate ~~amount~~number of ~~300,000~~up to 1,000,000 shares of its common stock, par value $0.10 per share, in the open market over the succeeding six months. Share repurchases may be executed through various means, including, without limitation, open market transactions, privately negotiated transactions or pursuant to any trading plan that may be adopted in accordance with Rule 10b-18 of the Securities and Exchange Act of 1934, as amended,one year, subject to ~~market conditions,~~limitations and restrictions under applicable ~~legal requirements, and other relevant factors. The Shares Repurchase Program may be suspended or discontinued at any time.~~securities laws.

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

On August 22, 2022, pursuant to a Board of Directors resolution, the Company entered into an accelerated share repurchase arrangement to repurchase $20,000 of its common stock. Under the agreement, the Company paid $20,000 and immediately received an initial delivery of 802,810 shares in the amount of $16,000, which the Company recorded as treasury shares. The Company recorded the remaining $4,000 as a reduction to additional paid-in capital pending final settlement in the fourth quarter of 2022. The final number of shares that the Company ultimately receives under the agreement will be determined based on the average of the Rule 10b-18 volume-weighted average prices of the Company’s common stock during the term of the agreement, less and agreed discount, and subject to adjustments pursuant to the terms of the agreement.

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)


		Page Number
PART I—FINANCIAL INFORMATION

Item 1.	Financial Statements (unaudited)

	Condensed Consolidated Statements of Operations	3

	Condensed Consolidated Statements of Comprehensive Income ~~(Loss)~~	4

	Condensed Consolidated Balance Sheets	5

	Condensed Consolidated ~~Statement~~Statements of Stockholders’ Equity	6

	Condensed Consolidated Statements of Cash Flows	8

	Notes to Condensed Consolidated Financial Statements	9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3230

Item 4.	Controls and Procedures	3230

PART II—OTHER INFORMATION		3331

Item 1.	Legal Proceedings	3331

Item 1A.	Risks Factors	3331

Item 2.	~~Purchase~~Purchases of Equity Securities by the Issuer	3331

Item 6.	Exhibits	3433

SIGNATURES		35	34

	September 30, 2021			December 31, 2020
Current assets:
Cash and cash equivalents	$	16,718		$	15,923
Receivables:
Trade, net of allowance for doubtful accounts of $4,381 and $3,297, respectively		167,731			130,029
Other		11,384			8,444
Total receivables, net		179,115			138,473
Inventories, net		166,973			163,784
Prepaid expenses		12,491			10,499
Income taxes receivable		1,036			3,046
Total current assets		376,333			331,725
Property, plant and equipment, net		66,501			65,382
Operating lease right-of-use assets		26,080			12,198
Intangible assets, net of amortization		201,078			197,514
Goodwill		46,616			52,108
Other assets		15,595			18,602
Deferred income tax assets, net		3,669			2,764
Total assets	$	735,872		$	680,293

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current installments of other liabilities	$	1,633		$	2,647
Accounts payable		66,082			59,253
Deferred revenue		5,510			43,611
Accrued program costs		79,355			45,441
Accrued expenses and other payables		20,726			16,184
Operating lease liabilities, current		5,015			4,188
Total current liabilities		178,321			171,324
Long-term debt, net of deferred loan fees		136,328			107,442
Operating lease liabilities, long-term		21,415			8,177
Other liabilities, excluding current installments		7,213			9,054
Deferred income tax liabilities, net		24,254			23,560
Total liabilities		367,531			319,557
Commitments and contingent liabilities
Stockholders' equity:
Preferred stock, $.10 par value per share; authorized 400,000 shares; NaN issued		—			—
Common stock, $.10 par value per share; authorized 40,000,000 shares; issued 34,272,665 shares at September 30, 2021 and 33,922,433 shares at December 31, 2020		3,428			3,394
Additional paid-in capital		99,917			96,642
Accumulated other comprehensive loss		(12,370	)		(9,322	)
Retained earnings		300,105			288,182
		391,080			378,896
Less treasury stock at cost, 3,361,040 shares at September 30, 2021 and 3,061,040 shares at December 31, 2020		(22,739	)		(18,160	)
Total stockholders’ equity		368,341			360,736
Total liabilities and stockholders' equity	$	735,872		$	680,293


	September 30, 2022			December 31, 2021
Current assets:
Cash and cash equivalents	$	20,808		$	16,285
Receivables:
Trade, net of allowance for doubtful accounts of $4,535 and $3,938, respectively		194,515			149,326
Other		10,022			9,595
Total receivables, net		204,537			158,921
Inventories		192,309			154,306
Prepaid expenses		16,967			12,488
Income taxes receivable		2,180			—
Total current assets		436,801			342,000
Property, plant and equipment, net		68,598			66,111
Operating lease right-of-use assets		25,402			25,386
Intangible assets, net		187,207			197,841
Goodwill		46,215			46,260
Other assets		11,936			16,292
Deferred income tax assets, net		16			270
Total assets	$	776,175		$	694,160

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current installments of other liabilities	$	—		$	802
Accounts payable		81,919			67,140
Customer prepayments		222			63,064
Accrued program costs		108,016			63,245
Accrued expenses and other payables		24,390			20,745
Income taxes payable		—			3,006
Current operating lease liabilities		5,329			5,059
Total current liabilities		219,876			223,061
Long-term debt, net		148,414			52,240
Long-term operating lease liabilities		20,536			20,780
Other liabilities, net of current installments		5,457			5,335
Deferred income tax liabilities, net		19,324			20,006
Total liabilities		413,607			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 34,463,947 shares at September 30, 2022 and 34,248,218 shares at December 31, 2021		3,446			3,426
Additional paid-in capital		101,426			101,450
Accumulated other comprehensive loss		(15,532	)		(13,784	)
Retained earnings		325,698			304,385
Less treasury stock at cost, 4,884,200 shares at September 30, 2022 and 3,361,040 shares at December 31, 2021		(52,470	)		(22,739	)
Total stockholders’ equity		362,568			372,738
Total liabilities and stockholders' equity	$	776,175		$	694,160


	For the Nine Months Ended September 30,						For the Nine Months Ended September 30,
	2021			2020			2022			2021
Cash flows from operating activities:
Net income	$	13,713		$	7,334		$	23,506		$	13,713
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization of property, plant and equipment and intangible assets		17,045			14,584			16,649			17,045
Amortization of other long-term assets		2,981			2,966			2,656			2,981
Loss on disposal of property, plant and equipment								265			—
Accretion of discounted liabilities		(10	)		9			28			(10	)
Amortization of deferred loan fees		294			219			174			294
Provision for bad debts		1,202			777			597			1,202
Loan principal and interest forgiveness		(672	)		—			—			(672	)
Adjustment to contingent consideration		520			—
Fair value adjustment to contingent consideration								621			520
Stock-based compensation		5,309			3,776			4,396			5,309
Decrease in deferred income taxes		(560	)		(1,757	)
Change in value of equity investments, net		(103	)		(281	)
Change in deferred income taxes								(64	)		(560	)
Change in fair value of equity investments								857			(103	)
Loss on equity method investment								—			388
Adjustment to bargain purchase gain on business acquisition								—			(171	)
Net foreign currency adjustments		(330	)		(711	)		218			(330	)
Loss from equity method investment		388			80
Adjustment to bargain purchase gain on business acquisition		(171	)		—
Changes in assets and liabilities associated with operations:
Increase in net receivables		(42,979	)		(5,089	)		(46,289	)		(42,979	)
Increase in inventories		(4,325	)		(16,941	)		(38,987	)		(4,325	)
Increase in prepaid expenses and other assets		(2,194	)		(532	)		(4,272	)		(2,194	)
Decrease in income tax receivable		2,031			873
(Increase) decrease in income tax receivable/payable, net								(5,201	)		2,031
Increase in net operating lease liability		183			14			10			183
Increase (decrease) in accounts payable		7,769			(1,759	)
Decrease in deferred revenue		(38,272	)		(1,079	)
Increase in accounts payable								14,418			7,769
Decrease in customer prepayments								(62,831	)		(38,272	)
Increase in accrued program costs		33,982			20,058			45,016			33,982
Increase (decrease) in other payables and accrued expenses		4,025			(2,117	)
Net cash (used in) provided by operating activities		(174	)		20,424
Increase in other payables and accrued expenses								2,555			4,025
Net cash used in operating activities								(45,678	)		(174	)
Cash flows from investing activities:
Capital expenditures		(7,963	)		(8,988	)		(8,946	)		(7,963	)
Proceeds from disposal of property, plant and equipment								46			—
Acquisition of product line		(10,000	)		—			—			(10,000	)
Intangible assets		(285	)		(3,942	)		(1,078	)		(285	)
Investments		(183	)		(1,190	)		—			(183	)
Net cash used in investing activities		(18,431	)		(14,120	)		(9,978	)		(18,431	)
Cash flows from financing activities:
Net borrowings under line of credit agreement		28,592			377
Payments under line of credit agreement								(64,000	)		(57,408	)
Borrowings under line of credit agreement								160,000			86,000
Payment of contingent consideration		(250	)		(1,227	)		—			(250	)
Net payments from the issuance of common stock (sale of stock under ESPP, exercise of stock options, and shares purchased for tax withholding)		(2,000	)		(1,064	)
Net receipt from the issuance of common stock under ESPP								837			743
Net receipt from the exercise of stock options								783			172
Payment for tax withholding on stock-based compensation awards								(2,020	)		(2,915	)
Repurchase of common stock		(4,579	)		—			(33,731	)		(4,579	)
Payment of cash dividends		(1,789	)		(1,168	)		(2,072	)		(1,789	)
Net cash provided by (used in) financing activities		19,974			(3,082	)
Net cash provided by financing activities								59,797			19,974
Net increase in cash and cash equivalents		1,369			3,222			4,141			1,369
Effect of exchange rate changes on cash and cash equivalents		(574	)		(222	)		382			(574	)
Cash and cash equivalents at beginning of period		15,923			6,581			16,285			15,923
Cash and cash equivalents at end of period	$	16,718		$	9,581		$	20,808		$	16,718
Supplemental cash flow information:
Cash paid during the period for:
Interest	$	2,839		$	3,960
Income taxes, net	$	3,836		$	2,868
Non-cash transactions:
ROU assets exchanged for lease liabilities	$	17,872		$	4,895
Cash dividends declared and included in accrued expenses	$	594		$	—


Large Accelerated Filer	☐	Accelerated Filer	☒
Non-Accelerated Filer	☐	Smaller reporting company	☐
Emerging growth company	☐


	Three months ended September 30, 2022		Three months ended September 30, 2021		Nine months ended September 30, 2022		Nine months ended September 30, 2021
Cash paid for amounts included in the measurement of lease liabilities	$	1,613	$	1,260	$	4,846	$	4,271
ROU assets obtained in exchange for new liabilities	$	2,378	$	5,805	$	4,202	$	17,872


Weighted-average remaining lease term (in years)	~~6.90~~		6.08
Weighted-average discount rate	~~4.02~~4.00	%

2021 (excluding nine months ended September 30, 2021)	$	1,465
2022		5,696

2022 (excluding nine-months ended September 30, 2022)			$	1,603
2023		4,734		5,977
2024		3,973		5,132
2025		3,601		4,610
2026				3,439
Thereafter		11,061		8,580
Total lease payments		30,530		29,341
Less: imputed interest		4,100		(3,476	)
Total	$	26,430	$	25,865
Amounts recognized in the Condensed Consolidated Balance Sheets:
Amounts recognized in the condensed consolidated balance sheets:
Operating lease liabilities, current	$	5,015	$	5,329
Operating lease liabilities, long-term	$	21,415	$	20,536


	September 30, 2022			December 31, 2021
Land	$	2,755		$	2,756
Buildings and improvements		19,909			19,844
Machinery and equipment		140,309			132,159
Office furniture, fixtures and equipment		10,419			10,094
Automotive equipment		1,595			1,832
Construction in progress		7,898			8,199
Total gross value		182,885			174,884
Less accumulated depreciation		(114,287	)		(108,773	)
Total net value	$	68,598		$	66,111

	September 30, 2021		December 31, 2020
Finished products	$	151,375	$	149,415
Raw materials		15,598		14,369
	$	166,973	$	163,784


	September 30, 2022		December 31, 2021
Finished products	$	163,359	$	138,159
Raw materials		28,950		16,147
	$	192,309	$	154,306


Long-term indebtedness ($000's)	September 30, 2022			December 31, 2021
Revolving line of credit	$	149,300		$	53,300
Deferred loan fees		(886	)		(1,060	)
Net long-term debt	$	148,414		$	52,240

	Number of Shares			Weighted Average Price Per Share
Balance outstanding, December 31, 2019		332,823		$	9.14
Options exercised		(15,836	)		8.83
Balance outstanding, March 31, 2020		316,987			9.16
Options exercised		(9,291	)		8.27
Balance outstanding, June 30, 2020		307,696			9.16
Options exercised		(86,446	)		7.58
Balance outstanding, September 30, 2020		221,250		$	9.81


	Nine months ended September 30, 2021								Nine months ended September 30, 2020								Nine months ended September 30, 2022								Nine months ended September 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)	$	144,405	$	2,733			2.5	%	$	171,203	$	3,751			2.9	%	$	111,939	$	2,250			2.7	%	$	144,405	$	2,733			2.5	%
Amortization of deferred loan fees		—		230			—			—		219			—			—		199			—			—		230			—
Amortization of other deferred liabilities		—		(6	)		—			—		8			—			—		27			—			—		(6	)		—
Other interest (income) expense		—		140			—			—		64			—
Other interest expense																		—		20			—			—		140			—
Subtotal		144,405		3,097			2.9	%		171,203		4,042			3.1	%		111,939		2,496			3.0	%		144,405		3,097			2.9	%
Capitalized interest		—		(176	)		—			—		(238	)		—			—		(240	)		—			—		(176	)		—
Total	$	144,405	$	2,921			2.7	%	$	171,203	$	3,804			3.0	%	$	111,939	$	2,256			2.7	%	$	144,405	$	2,921			2.7	%


Month ended	Total number of shares purchased		Average price paid per share		Total amount paid		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
August 31, 2021		78,300	$	15.37	$	1,203
September 30, 2021		221,700	$	15.23	$	3,376
March 31, 2022								332,404	$	18.71	$	6,219		667,596
Balance at March 31, 2022								332,404			$	6,219		667,596

April 30, 2022								100	$	19.99	$	2		667,496
May 31, 2022								506	$	19.99	$	11		666,990
Balance at June 30, 2022								606	$	19.99	$	13		666,990

August 31, 2022								165,039	$	19.59	$	3,234		501,951
September 30, 2022								222,301	$	19.19	$	4,265		279,650
Balance at September 30, 2022								387,340	$	19.36	$	7,499		279,650

Total number of shares repurchased		300,000	$	15.26	$	4,579		720,350	$	19.06	$	13,731		279,650


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.

~~99.1~~101		~~Form of Change-in-Control Agreement dated as of September 21, 2021 between American Vanguard and certain officers, including Named Executive Officers.~~

~~101~~		The following materials from American Vanguard Corp’s Quarterly Report on Form 10-Q for the quarter ended September 30, ~~2021,~~2022, formatted in iXBRL (Inline Extensible Business Reporting Language): (i) Condensed Consolidated Statements of Operations; (ii) Condensed Consolidated Statements of Comprehensive ~~Income (Loss);~~Income; (iii) Condensed Consolidated Balance Sheets; (iv) Condensed Consolidated Statement of Stockholders’ Equity; (v) Condensed Consolidated Statements of Cash Flows; and (vi) Notes to Condensed 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 September 30, ~~2021,~~2022, has been formatted in Inline XBRL.


	american vanguard corporation

Dated: November 8, ~~2021~~2022	By:	/s/ ericg. wintemute
		Eric G. Wintemute
		Chief Executive Officer and Chairman of the Board

Dated: November 8, ~~2021~~2022	By:	/s/ davidt. johnson
		David T. Johnson
		Chief Financial Officer & Principal Accounting Officer