10-Q

s

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED September 30, 2020

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM                      TO                      

Commission file number 001-13795

AMERICAN VANGUARD CORPORATION

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)

(949) 260-1200

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $.10 par value	AVD	New York Stock Exchange

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.

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

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—30,287,577 shares as of October 29, 2020.

AMERICAN VANGUARD CORPORATION

INDEX

		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 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	23
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31
Item 4.	Controls and Procedures	31
PART II—OTHER INFORMATION		32
Item 1.	Legal Proceedings	32
Item 1A.	Risk Factors	32
Item 2.	Purchase of Equity Securities by the Issuer	32
Item 6.	Exhibits	33
SIGNATURES		34

2

PART I. FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

	For the Three-Months Ended September 30,				For the Nine-Months Ended September 30,
	2020		2019		2020		2019
Net sales	$	117,439	$	124,884	$	317,956	$	337,664
Cost of sales		74,174		77,421		196,004		206,846
Gross profit		43,265		47,463		121,952		130,818
Operating expenses		38,782		40,677		108,882		110,839
Operating income		4,483		6,786		13,070		19,979
Interest expense, net		1,022		2,070		3,804		5,606
Income before provision for income taxes and loss on equity method    investment		3,461		4,716		9,266		14,373
Income tax expense		492		1,474		1,852		4,059
Income before loss on equity method investment		2,969		3,242		7,414		10,314
Loss from equity method investment		42		89		80		149
Net income attributable to American Vanguard	$	2,927	$	3,153	$	7,334	$	10,165
Earnings per common share—basic	$	.10	$	.11	$	.25	$	.35
Earnings per common share—assuming dilution	$	.10	$	.11	$	.25	$	.34
Weighted average shares outstanding—basic		29,501		29,057		29,401		29,013
Weighted average shares outstanding—assuming dilution		29,973		29,650		29,926		29,591

See notes to the Condensed Consolidated Financial Statements.

3

AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands)

(Unaudited)

	For the Three-Months Ended September 30,						For the Nine-Months Ended September 30,
	2020			2019			2020			2019
Net income	$	2,927		$	3,153		$	7,334		$	10,165
Comprehensive income:
Foreign currency translation adjustment		(83	)		(1,080	)		(8,822	)		(2,192	)
Comprehensive income (loss)	$	2,844		$	2,073		$	(1,488	)	$	7,973

See notes to the Condensed Consolidated Financial Statements.

4

AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

(Unaudited)

ASSETS

	September 30, 2020			December 31, 2019
Current assets:
Cash and cash equivalents	$	9,581		$	6,581
Receivables:
Trade, net of allowance for doubtful accounts of $3,046 and $2,300, respectively		145,374			136,075
Other		9,064			16,949
Total receivables, net		154,438			153,024
Inventories, net		176,287			163,313
Prepaid expenses		10,738			10,457
Income taxes receivable		1,972			2,824
Total current assets		353,016			336,199
Property, plant and equipment, net		59,801			56,521
Operating lease right-of-use assets		12,128			11,258
Intangible assets, net of amortization		191,133			198,377
Goodwill		40,737			46,557
Other assets		18,926			21,186
Total assets	$	675,741		$	670,098
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current installments of other liabilities	$	210		$	1,513
Accounts payable		61,283			64,881
Deferred revenue		5,689			6,826
Accrued program costs		67,745			47,699
Accrued expenses and other payables		11,266			12,815
Operating lease liabilities, current		4,312			4,904
Total current liabilities		150,505			138,638
Long-term debt, net of deferred loan fees		149,362			148,766
Operating lease liabilities, long-term		7,979			6,503
Other liabilities, excluding current installments		9,087			12,890
Deferred income tax liabilities		14,014			19,145
Total liabilities		330,947			325,942
Commitments and contingent liabilities
Stockholders' equity:
Preferred stock, $.10 par value per share; authorized 400,000 shares; none issued		—			—
Common stock, $.10 par value per share; authorized 40,000,000 shares;    issued 33,337,075 shares at September 30, 2020 and 33,233,614 shares    at December 31, 2019		3,335			3,324
Additional paid-in capital		93,273			90,572
Accumulated other comprehensive loss		(14,520	)		(5,698	)
Retained earnings		280,866			274,118
		362,954			362,316
Less treasury stock at cost, 3,061,040 shares at September 30, 2020 and    December 31, 2019		(18,160	)		(18,160	)
Total stockholders’ equity		344,794			344,156
Total liabilities and stockholders' equity	$	675,741		$	670,098

See notes to the Condensed Consolidated Financial Statements.

5

AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands, except share data)

(Unaudited)

	Common Stock						Additional			Accumulated Other						Treasury Stock
	Shares			Amount			Paid-in Capital			Comprehensive Loss			Retained Earnings			Shares		Amount			Total
Balance, December 31, 2019		33,233,614		$	3,324		$	90,572		$	(5,698	)	$	274,118			3,061,040	$	(18,160	)	$	344,156
Common stock issued under ESPP		22,776			2			350			—			—			—		—			352
Cash dividends on common stock ($0.02 per share)		—			—			—			—			(586	)		—		—			(586	)
Foreign currency translation adjustment, net		—			—			—			(9,063	)		—			—		—			(9,063	)
Stock-based compensation		—			—			1,357			—			—			—		—			1,357
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	)
Net income		—			—			—			—			520			—		—			520
Balance, March 31, 2020		33,188,421			3,319			89,757			(14,761	)		274,052			3,061,040		(18,160	)		334,207
Foreign currency translation adjustment, net		—			—			—			324			—			—		—			324
Stock-based compensation		—			—			1,188			—			—			—		—			1,188
Stock options exercised; grants, termination    and vesting of restricted stock units    (net of shares in lieu of taxes)		40,657			5			49			—			—			—		—			54
Net income		—			—			—			—			3,887			—		—			3,887
Balance, June 30, 2020		33,229,078			3,324			90,994			(14,437	)		277,939			3,061,040		(18,160	)		339,660
Common stock issued under ESPP		26,892			3			366			—			—			—		—			369
Foreign currency translation adjustment, net		—			—			—			(83	)		—			—		—			(83	)
Stock-based compensation		—			—			1,231			—			—			—		—			1,231
Stock options exercised; grants, termination    and vesting of restricted stock units    (net of shares in lieu of taxes)		81,105			8			682			—			—			—		—			690
Net income		—			—			—			—			2,927			—		—			2,927
Balance, September 30, 2020		33,337,075		$	3,335		$	93,273		$	(14,520	)	$	280,866			3,061,040	$	(18,160	)	$	344,794

See notes to the Condensed Consolidated Financial Statements.

6

AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands, except share data)

(Unaudited)

	Common Stock				Additional			Accumulated Other						Treasury Stock
	Shares		Amount		Paid-in Capital			Comprehensive Loss			Retained Earnings			Shares		Amount			AVD Total
Balance, December 31, 2018		32,752,827	$	3,276	$	83,177		$	(4,507	)	$	262,840			2,902,992	$	(15,556	)	$	329,230
Common stock issued under ESPP		22,441		2		336			—			—			—		—			338
Cash dividends on common stock ($0.02 per share)		—		—		—			—			(580	)		—		—			(580	)
Foreign currency translation adjustment, net		—		—		—			(1,769	)		—			—		—			(1,769	)
Stock-based compensation		—		—		1,485			—			—			—		—			1,485
Stock options exercised; grants, termination    and vesting of restricted stock units    (net of shares in lieu of taxes)		419,295		42		(930	)		—			—			—		—			(888	)
Shares repurchased															158,048		(2,604	)		(2,604	)
Net income		—		—		—			—			3,906			—		—			3,906
Balance, March 31, 2019		33,194,563		3,320		84,068			(6,276	)		266,166			3,061,040		(18,160	)		329,118
Cash dividends on common stock ($0.02 per share)		—		—		—			—			(580	)		—		—			(580	)
Foreign currency translation adjustment, net		—		—		—			657			—			—		—			657
Stock-based compensation		—		—		1,510			—			—			—		—			1,510
Stock options exercised; grants, termination    and vesting of restricted stock units    (net of shares in lieu of taxes)		9,628		1		36			—			—			—		—			37
Net income		—		—		—			—			3,106			—		—			3,106
Balance, June 30, 2019		33,204,191		3,321		85,614			(5,619	)		268,692			3,061,040		(18,160	)		333,848
Common stock issued under ESPP		24,788		3		375														378
Cash dividends on common stock ($0.02 per share)												(582	)							(582	)
Foreign currency translation adjustment, net		—		—		—			(1,080	)		—			—		—			(1,080	)
Stock-based compensation		—		—		2,164			—			—			—		—			2,164
Stock options exercised; grants, termination    and vesting of restricted stock units    (net of shares in lieu of taxes)		6,959		1		104			—			—			—		—			105
Net income		—		—		—			—			3,153			—		—			3,153
Balance, September 30, 2019		33,235,938	$	3,325	$	88,257		$	(6,699	)	$	271,263			3,061,040	$	(18,160	)	$	337,986

See notes to the Condensed Consolidated Financial Statements.

7

AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	For the Nine-Months Ended September 30,
	2020			2019
Cash flows from operating activities:
Net income	$	7,334		$	10,165
Adjustments to reconcile net income to net cash provided by (used in) operating    activities:
Depreciation and amortization of property, plant and equipment and intangible assets		14,584			13,892
Amortization of other long-term assets and deferred loan fees		3,185			3,174
Amortization of discounted liabilities		9			41
Provision for bad debts		777			728
Revision of deferred consideration		—			(3,539	)
Stock-based compensation		3,776			5,159
Change in deferred income taxes		(1,757	)		(459	)
Change in investment fair value		(281	)		—
Loss from equity method investment		80			149
Net foreign currency adjustment		(711	)		550
Changes in assets and liabilities associated with operations:
Increase in net receivables		(5,089	)		(15,839	)
Increase in inventories		(16,941	)		(19,713	)
Increase in prepaid expenses and other assets		(532	)		(849	)
Decrease (increase) in income tax receivable		873			(4,477	)
Increase in net operating lease liability		14			117
Decrease in accounts payable		(1,759	)		(5,548	)
Decrease in deferred revenue		(1,079	)		(19,800	)
Increase in accrued program costs		20,058			20,163
Decrease in other payables and accrued expenses		(3,344	)		(4,967	)
Net cash provided by  (used in) operating activities		19,197			(21,053	)
Cash flows from investing activities:
Capital expenditures		(8,988	)		(10,546	)
Acquisition of business, product lines, and intangible assets		(3,942	)		(31,836	)
Investment		(1,190	)		—
Net cash used in investing activities		(14,120	)		(42,382	)
Cash flows from financing activities:
Net borrowings under line of credit agreement		377			68,200
Net payments from the issuance of common stock (sale of stock under ESPP,    exercise of stock options, and shares purchased for tax withholding)		(1,064	)		(30	)
Repurchase of common stock		—			(2,604	)
Payment of cash dividends		(1,168	)		(1,741	)
Net cash (used in) provided by financing activities		(1,855	)		63,825
Net increase (decrease)  in cash and cash equivalents		3,222			390
Effect of exchange rate changes on cash and cash equivalents		(222	)		(671	)
Cash and cash equivalents at beginning of period		6,581			6,168
Cash and cash equivalents at end of period	$	9,581		$	5,887
Supplemental cash flow information:
Cash paid during the period for:
Interest	$	3,960		$	5,524
Income taxes, net	$	2,868		$	8,066

See notes to the Condensed Consolidated Financial Statements.

8

AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(In thousands, except share data)

(Unaudited)

1. The accompanying unaudited Condensed Consolidated Financial Statements of American Vanguard Corporation and Subsidiaries (“AVD” or “the Company”) have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three- and nine-months ended September 30, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020. The financial statements and related notes do not include all information and footnotes required by US GAAP for annual reports. This quarterly report should be read in conjunction with the consolidated financial statements included in the Company’s annual report on Form 10-K for the year ended December 31, 2019.

The Company is closely monitoring the impact of the novel coronavirus (COVID-19) pandemic on all aspects of its business, including how the pandemic has impacted, and will likely impact, its customers, business partners, and employees. The Company is considered an essential business by most governments in the jurisdictions and territories in which the Company operates and, as a result, did not incur significant disruptions from the COVID-19 pandemic during the three- and nine-months ended September 30, 2020. At this point in the year, however, the Company can identify a number of effects on its overall performance as a result of the coronavirus. While none of them alone is material, taken together, they would constitute several million dollars in lost sales opportunities and an indeterminate level of profitability. First, while the Company has recorded strong sales of new products, particularly soybean and rice herbicides, the Company believes that those sales would likely have been higher but for the fact that the Company was constrained from holding in-person meetings with existing and potential new customers to promote those products. Second, demand for certain commodities – specifically, corn, potatoes and fruits and vegetables – have experienced a drop from restaurants that have been closed (in whole or in part) due to the coronavirus. This, in turn, has softened demand for some of the Company’s products that are used on those crops and could affect future contracts. Third, local currencies in Brazil, Mexico and Australia suffered a significant decline in value versus the US dollar during the first quarter of the year, which, in turn, has affected both sales and to a lesser extent profitability of our international business. These key currencies (from the Company’s perspective) have somewhat stabilized at new lower levels during the second and third quarter of the year. We do not know what movements in key rates to expect for the balance of 2020 and beyond. Further, while it is not possible to identify all of the reasons for the fluctuation in exchange rates with certainty, it is not unreasonable to include the pandemic among its causes.

Looking forward, the Company is unable to predict the impact that the pandemic may have on its future financial condition, results of operations and cash flows due to numerous uncertainties. The extent to which the COVID-19 pandemic impacts the Company’s operations and those of its customers in the near term will depend on future developments, which are highly uncertain and, beyond extrapolating our experience over the past nine-months, cannot be predicted with confidence. The Company continues to monitor its business for adverse impacts of the pandemic, including volatility in the foreign exchange markets, demand, supply-chain disruptions in certain markets, and increased costs of employee safety, among others.

Update to Significant Accounting Policies:

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

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

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

9

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

Finance leases are immaterial to the Condensed Consolidated Financial Statements. There were no lease transactions with related parties as of September 30, 2020.

The operating lease expense for the three-months ended September 30, 2020 and 2019 was $1,396 and $1,387, respectively, and $4,188 and $4,145 for the nine-months ended September 30, 2020 and 2019, respectively. Lease expenses related to variable lease payments and short-term leases were immaterial. Additional information related to operating leases are as follows:

	For the Three- months ended September 30, 2020		For the Three- months ended September 30, 2019		For the Nine- months ended September 30, 2020		For the Nine- months ended September 30, 2019
Cash paid for amounts included in the    measurement of lease liabilities	$	1,399	$	1,343	$	4,177	$	4,029
ROU assets obtained in exchange for new    liabilities	$	3,393	$	1,066	$	4,895	$	3,119

The weighted-average remaining lease term and discount rate related to the operating leases as of September 30, 2020 were as follows:

Weighted-average remaining lease term (in years)	4.62
Weighted-average discount rate	3.81	%

Future minimum lease payments under non-cancellable operating leases as of September 30, 2020, were as follows:

2020 (excluding nine-months ended September 30, 2020)	$	1,364
2021		4,003
2022		2,464
2023		1,677
2024		1,065
Thereafter		2,925
Total lease payments		13,498
Less: imputed interest		1,207
Total	$	12,291
Amounts recognized in the Condensed Consolidated Balance Sheets:
Operating lease liabilities, current	$	4,312
Operating lease liabilities, long-term	$	7,979

10

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

	For the Three-Months Ended September 30,				For the Nine-Months Ended September 30,
	2020		2019		2020		2019
Net sales:
US crop	$	48,361	$	55,072	$	148,630	$	158,068
US non-crop		18,251		18,995		37,881		42,068
Total US		66,612		74,067		186,511		200,136
International		50,827		50,817		131,445		137,528
Total net sales	$	117,439	$	124,884	$	317,956	$	337,664
Timing of revenue recognition:
Goods and services transferred at a point    in time	$	116,333	$	124,884	$	315,954	$	337,285
Goods and services transferred over time		1,106		—		2,002		379
Total net sales	$	117,439	$	124,884	$	317,956	$	337,664

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

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

	September 30, 2020		December 31, 2019
Contract assets	$	3,200	$	6,091
Deferred revenue	$	5,689	$	6,826

Revenue recognized for the three- and nine-months ended September 30, 2020, that was included in deferred revenue at the beginning of 2020 was $94 and $2,573, respectively.

11

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

	September 30, 2020			December 31, 2019
Land	$	2,706		$	2,706
Buildings and improvements		18,629			18,640
Machinery and equipment		119,920			116,757
Office furniture, fixtures and equipment		6,954			6,228
Automotive equipment		1,656			1,762
Construction in progress		9,316			5,263
Total gross value		159,181			151,356
Less accumulated depreciation		(99,380	)		(94,835	)
Total net value	$	59,801		$	56,521

The Company recognized depreciation expense related to property, plant and equipment of $1,878 and $1,571 for the three- months ended September 30, 2020 and 2019, respectively. During the three-months ended September 30, 2020, the Company eliminated $205 from such assets and accumulated depreciation of fully depreciated assets. During the three-months ended September 30, 2019, the Company eliminated $8 from assets and accumulated depreciation of fully depreciated assets.

The Company recognized depreciation expense related to property, plant and equipment of $5,235 and $4,796 for the nine-months ended September 30, 2020 and 2019, respectively. During the nine-months ended September 30, 2020 and 2019, the Company eliminated from such assets and accumulated depreciation $601 and $718, respectively, of fully depreciated assets.

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

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

	September 30, 2020		December 31, 2019
Finished products	$	163,356	$	151,917
Raw materials		12,931		11,396
	$	176,287	$	163,313

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

	For the three-months ended September 30,
	2020		2019		Change			% Change
Net sales:
US crop	$	48,361	$	55,072	$	(6,711	)		-12	%
US non-crop		18,251		18,995		(744	)		-4	%
US total		66,612		74,067		(7,455	)		-10	%
International		50,827		50,817		10			0	%
Net sales	$	117,439	$	124,884	$	(7,445	)		-6	%
Gross profit:
US crop	$	20,146	$	23,710	$	(3,564	)		-15	%
US non-crop		8,758		9,860		(1,102	)		-11	%
US total		28,904		33,570		(4,666	)		-14	%
International		14,361		13,893		468			3	%
Total gross profit	$	43,265	$	47,463	$	(4,198	)		-9	%

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	For the nine-months ended September 30,
	2020		2019		Change			% Change
Net sales:
US crop	$	148,630	$	158,068	$	(9,438	)		-6	%
US non-crop		37,881		42,068		(4,187	)		-10	%
US total		186,511		200,136		(13,625	)		-7	%
International		131,445		137,528		(6,083	)		-4	%
Net sales	$	317,956	$	337,664	$	(19,708	)		-6	%
Gross profit:
US crop	$	68,119	$	69,059	$	(940	)		-1	%
US non-crop		18,535		21,444		(2,909	)		-14	%
US total		86,654		90,503		(3,849	)		-4	%
International		35,298		40,315		(5,017	)		-12	%
Total gross profit	$	121,952	$	130,818	$	(8,866	)		-7	%

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 made to distributors, retailers or growers, at the end of a growing season. The Company describes these payments as “Programs.” Programs are a critical part of doing business in both the US crop and US non-crop chemicals market. These discount Programs represent variable consideration. In accordance with ASC 606, revenues from sales are recorded at the net sales price, which is the transaction price net of the impact of Programs and includes estimates of variable consideration. Variable consideration includes amounts expected to be paid to its customers estimated using the expected value method. Each quarter-end, management compares 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 executive and financial management, review 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 paid out predominantly on an annual basis, usually in the final quarter of the financial year or the first quarter of the following year. No significant changes in estimates were made during the three- and nine-months ended September 30, 2020 and 2019, respectively.   

8. 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
March 9, 2020	March 26, 2020	April 16, 2020	$	0.020	$	586
December 9, 2019	December 26, 2019	January 9, 2020	$	0.020	$	582
September 16, 2019	October 3, 2019	October 17, 2019	$	0.020	$	582
June 10, 2019	June 28, 2019	July 12, 2019	$	0.020	$	580
March 6, 2019	March 27, 2019	April 10, 2019	$	0.020	$	580
December 10, 2018	December 27, 2018	January 10, 2019	$	0.020	$	581

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

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The components of basic and diluted earnings per share were as follows:

	For the Three-Months Ended September 30,				For the Nine-Months Ended September 30,
	2020		2019		2020		2019
Numerator:
Net income attributable to AVD	$	2,927	$	3,153	$	7,334	$	10,165
Denominator: (in thousands)
Weighted average shares outstanding-basic		29,501		29,057		29,401		29,013
Dilutive effect of stock options and grants		472		593		525		578
		29,973		29,650		29,926		29,591

For the three- and nine-months ended September 30, 2020 and 2019, respectively, no stock options were excluded from the computation of diluted earnings per share.

10. The Company has a revolving line of credit that is shown as long-term debt on the Condensed Consolidated Balance Sheets at September 30, 2020 and December 31, 2019. The Company has no short-term debt as of September 30, 2020 and December 31, 2019.  Debt is summarized in the following table:

Long-term indebtedness ($000's)	September 30, 2020			December 31, 2019
Revolving line of credit	$	149,900		$	149,300
Deferred loan fees		(538	)		(534	)
Net long-term debt	$	149,362		$	148,766

As of June 30, 2017, AMVAC Chemical Corporation (“AMVAC”), the Company’s principal operating subsidiary, as borrower, and affiliates (including the Company, AMVAC CV and AMVAC BV), as guarantors and/or borrowers, entered into a Third Amendment to Second Amended and Restated Credit Agreement with a group of commercial lenders led by Bank of the West as agent, swing line lender and letter of credit issuer. The agreement is a senior secured lending facility, consisting of a line of credit of up to $250,000, an accordion feature of up to $100,000 and a maturity date of June 30, 2022. The agreement contains two key financial covenants; namely, borrowers are required to maintain a Consolidated Funded Debt Ratio (the “CFD Ratio”) of no more than 3.25-to-1 and a Consolidated Fixed Charge Covenant Ratio of at least 1.25-to-1. The Company’s borrowing capacity varies with its financial performance, measured in terms of EBITDA as defined in the Credit Agreement, for the trailing twelve-month period. Under the agreement, revolving loans bear interest at a variable rate based, at borrower’s election with proper notice, on either (i) LIBOR plus the “Applicable Rate” which is based upon the Consolidated Funded Debt Ratio (“Eurocurrency Rate Loan”) or (ii) the greater of (x) the Prime Rate, (y) the Federal Funds Rate plus 0.5%, and (z) the Daily One-Month LIBOR Rate plus 1.00%, plus, in the case of (x), (y) or (z) the Applicable Rate (“Alternate Base Rate Loan”). Interest payments for Eurocurrency Rate Loans are payable on the last day of each interest period (either one, two, three or nine-months, as selected by the borrower) and the maturity date, while interest payments for Alternate Base Rate Loans are payable on the last business day of each month and the maturity date.

As of November 27, 2019, AMVAC, as borrower, and certain affiliates entered into a Fourth Amendment to Second Amended and Restated Credit Agreement with its senior lenders under the terms of which the maximum limits for both Permitted Acquisitions and Investments in Foreign Subsidiaries were increased and new language was added with respect to Eurocurrency Rates, LIBOR Rates and ERISA.

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

At September 30, 2020, the Company is compliant with all covenants to its senior credit facility. Based on its performance against the most restrictive covenants in the credit agreement, the Company had the capacity to increase its borrowings by up to $44,500. This compares to an available borrowing capacity of $30,435, as of September 30, 2019 and $26,977 at December 31, 2019. The level of borrowing capacity is driven by three factors: (1) our financial performance, as measured in EBITDA including both the trailing twelve-month period and on a proforma basis arising from acquisitions, (2) net borrowings, and (3) the leverage covenant (the Consolidated Funded Debt ratio).

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11. Reclassification—Certain items may have been reclassified in the prior period Condensed Consolidated Financial Statements to conform with the September 30, 2020 presentation.

12. Total comprehensive income (loss) includes, in addition to net income, changes in equity that are excluded from the Condensed Consolidated Statements of Operations and are recorded directly into a separate section of stockholders’ equity on the Condensed Consolidated Balance Sheets. For the three- and nine-month periods ended September 30, 2020 and 2019, total comprehensive income (loss) consisted of net income attributable to American Vanguard and foreign currency translation adjustments.

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

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, 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
September 30, 2019
Restricted Stock	$	1,082	$	2,751	$	6,849		2.2
Unrestricted Stock		105		300		280		0.7
Performance-Based Restricted Stock		977		2,108		3,320		2.0
Total	$	2,164	$	5,159	$	10,449

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 ended September 30, 2020 and 2019.

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Restricted and Unrestricted Stock — A summary of nonvested restricted and unrestricted stock is presented below:

	For the Nine-Months Ended September 30, 2020					For the Nine-Months Ended September 30, 2019
	Number of Shares			Weighted Average Grant Date Fair Value		Number of Shares			Weighted Average Grant Date Fair Value
Nonvested shares at December 31st		719,845		$	17.67		587,210		$	17.59
Granted		4,185			18.63		297,679			17.34
Vested		(213,781	)		16.18		(105,582	)		15.21
Forfeited		(14,715	)		18.08		(6,589	)		17.69
Nonvested shares at March 31st		495,534			18.31		772,718			17.77
Granted		43,168			13.45		40,522			13.34
Vested		(37,958	)		13.88		(32,771	)		13.35
Forfeited		(8,221	)		18.64		(21,184	)		17.77
Nonvested shares at June 30th		492,523			18.22		759,285			17.72
Granted		—			—		—			—
Vested		—			—		(3,685	)		17.84
Forfeited		(8,430	)		18.54		(8,595	)		17.89
Nonvested shares at September 30th		484,093		$	18.22		747,005		$	17.72

Performance-Based Restricted Stock — A summary of nonvested performance-based stock is presented below:

	For the Nine-Months Ended September 30, 2020					For the Nine-Months Ended September 30, 2019
	Number of Shares			Weighted Average Grant Date Fair Value		Number of Shares			Weighted Average Grant Date Fair Value
Nonvested shares at December 31st		345,432		$	16.92		287,077		$	16.87
Granted		—			—		137,557			16.96
Additional granted based on performance achievement		76,445			16.56		41,568			12.88
Vested		(184,785	)		15.87		(90,872	)		14.73
Forfeited		(3,759	)		17.23		(3,543	)		15.98
Nonvested shares at March 31st		233,333			17.63		371,787			16.99
Forfeited		(2,268	)		18.00		(14,022	)		17.11
Nonvested shares at June 30th		231,065			17.63		357,765			16.99
Additional granted based on performance achievement		—			—		800			17.50
Vested		—			—		(1,700	)		17.28
Forfeited		—			—		(100	)		13.70
Nonvested shares at September 30th		231,065		$	17.63		356,765		$	16.99

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:

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Incentive Stock Option Plans

Activity of the incentive stock option plans:

	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

Outstanding at September 30, 2020, summarized by exercise price:

	Outstanding Weighted Average
Exercise Price Per Share	Number of Shares		Remaining Life (Months)		Exercise Price
$7.50		92,888		2	$	7.5
$11.32—$14.49		128,362		49		11.48
		221,250			$	9.81

Performance Incentive Stock Option Plan

Activity of the performance incentive stock option plan:

	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

All the performance incentive stock options outstanding as of September 30, 2020 have an exercise price per share of $11.49 and a remaining life of 51 months.

14. Legal Proceedings — During the reporting period, the only material developments in legal proceedings that had been reported in the Company’s Form 10-K for the year ended December 31, 2019 were as follows:

EPA FIFRA/RCRA Matter.  On November 10, 2016, the Company was served with a grand jury subpoena out of the U.S. District Court for the Southern District of Alabama in which the U.S. Department of Justice (“DoJ”) sought production of documents relating to the Company’s reimportation of depleted Thimet containers from Canada and Australia. The Company retained defense counsel and completed production of documents. Since the fourth quarter of 2018, government attorneys have interviewed several individuals (both current and former employees) who may be knowledgeable of the matter. Three more such interviews are scheduled to occur in November 2020. At this stage, however, DoJ has not made clear its intentions with regard to either its theory of the case or potential criminal enforcement. Thus, it is too early to tell whether a loss is probable or reasonably estimable. Accordingly, the Company has not recorded a loss contingency on this matter.

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Harold Reed v. AMVAC et al.  During January 2017, the Company was served with two Statements of Claim that had been filed on March 29, 2016 with the Court of Queen’s Bench of Alberta, Canada (as case numbers 160600211 and 160600237) in which plaintiffs Harold Reed (an applicator) and 819596 Alberta Ltd. dba Jem Holdings (an application equipment rental company) allege physical injury and damage to equipment, respectively, arising from a fire that occurred during an application of the Company’s potato sprout inhibitor, SmartBlock, at a potato storage facility in Coaldale, Alberta on April 2, 2014. The parties have exchanged written discovery, and depositions of persons most knowledgeable took place during the first quarter of 2019. Citing the length of the cases’ pendency and the expense, in December 2019, plaintiff Reed voluntarily dismissed two actions (160600211 and 160600237) for no consideration. With respect to the remaining action, additional depositions took place during the first quarter of 2020. The parties have scheduled a voluntary mediation for December 14-15, 2020. The Company believes that the claims against it in the remaining matters are without merit and intends to defend them vigorously. At this stage in the proceedings, however, it is too early to determine whether a loss is probable or reasonably estimable; accordingly, the Company has not recorded a loss contingency.

15. Recent Accounting Standards:  

Recent Accounting Standards Adopted:

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

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

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

Accounting standards not yet adopted:

In December 2019, the FASB issued ASU no. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes,” (“ASU No. 2019-12”). The amendment removes certain exceptions to the general income tax accounting methodology including an exception for the recognition of a 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 are effective for the Company for fiscal years beginning after December 15, 2020, including interim periods within those years with early adoption permitted. The Company is evaluating the effect of adopting this new accounting guidance but does not expect adoption will have a material impact on the Condensed Consolidated Financial Statements.

In March 2020, the FASB issued ASU 2020-04 “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting,” (“ASU No. 2020-04”), which provides practical expedients for contract modifications and certain hedging relationships associated with the transition from reference rates that are expected to be discontinued. This guidance is applicable for our borrowing instruments, which use LIBOR as a reference rate, and is effective immediately, but is only available through December 31, 2022. The Company is currently evaluating the impact of ASU 2020-04; however, at the current time the Company does not expect that the adoption of this ASU will have a material impact on its Condensed Consolidated Financial Statements.

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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.

The carrying amount of the Company’s financial instruments, which principally include cash and cash equivalents, short-term investments, accounts receivable, accounts payable and accrued expenses approximates fair value because of the relatively short maturity of such instruments. The carrying amount of the Company’s 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 has one equity investment classified within Level 1 of the fair value hierarchy. Please refer to Note 18 for further details regarding this investment.

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:

	For the Nine-months ended September 30, 2020
Balance, December 31, 2019	$	1,243
Payments		(1,227	)
Foreign exchange effect		(16	)
Balance, September 30, 2020	$	—

There was no activity for the three-months ended September 30, 2020.

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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, 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	)
Balance, December 31, 2018	$	(4,507	)
FX translation		(1,769	)
Balance, March 31, 2019		(6,276	)
FX translation		657
Balance, June 30, 2019		(5,619	)
FX translation		(1,080	)
Balance, September 30, 2019	$	(6,699	)

18. Equity Investments — The Company has the following equity investments:

Equity Method Investment

On June 27, 2017, both Amvac Netherlands BV and Huifeng Agrochemical Company, Ltd (“Huifeng”) made individual capital contributions of $950 to the Huifeng Amvac Innovation Co. Ltd (“Hong Kong Joint Venture”). As of September 30, 2020, the Company’s ownership position in the Hong Kong Joint Venture was 50%. The Company utilizes the equity method of accounting with respect to this investment. On July 7, 2017, the Hong Kong Joint Venture purchased the shares of Profeng Australia, Pty Ltd.(“Profeng”), for a total consideration of $1,900. The purchase consists of Profeng Australia, Pty Ltd Trustee and Profeng Australia Unit Trust. Both Trust and Trustee were previously owned by Huifeng via its wholly owned subsidiary Shanghai Biological Focus Center. For the three- and nine-months ended September 30, 2020, the Company recognized losses of $42 and $80, 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, 2019, the Company recognized losses of $89 and $149, respectively. The Company’s investment in this joint venture amounted to $433 and $573, respectively at September 30, 2020 and 2019.

Other Equity Investments

In February 2016, AMVAC Netherlands BV made an investment in Biological Products for Agriculture (“Bi-PA”). 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, 2020, the Company’s ownership position in Bi-PA was 15%. The equity securities are without a readily determinable fair value because these securities are privately held, not traded on any public exchanges and not an investment in a mutual fund or similar investment. As a result, the Company has elected to alternatively measure this investment at its cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. There were no observable price changes in the three- and nine-months ended September 30, 2020 and 2019. There was no impairment on the investment as of September 30, 2020 and 2019. The investment is not material and is recorded within other assets on the Condensed Consolidated Balance Sheets.

On April 1, 2020, the Company purchased 6.25 million shares, an ownership of approximately 8%, of common stock of Clean Seed Capital Group Ltd. (TSX Venture Exchange: “CSX”) for $1,190. The shares are publicly traded, have a readily determinable fair value, and are considered a Level 1 investment. The fair value of the stock amounted to $1,471 as of September 30, 2020, and the Company recorded a gain in the amount of $257 and $281 for the three- and nine-months ended September 30, 2020, included as a reduction to operating expenses on the Condensed Consolidated Financial Statements.

19. Income Taxes — Income tax expense was $492 for the three months ended September 30, 2020, as compared to $1,474 for the comparable period in 2019. The effective tax rate for the quarter was 14.2%, as compared to 31.3% in the same period of the prior year.  Income tax expense was $1,852 for the nine-months ended September 30, 2020, as compared to $4,059 for the nine- months ended September 30, 2019. The effective tax rate for the nine-months ended September 30, 2020 and 2019 was 20.0% and 28.2%, respectively. The effective tax rate is based on the projected income for the full year and is subject to ongoing review and adjustment by management.

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For the three-months ended September 30, 2020, the Company’s income tax expense was reduced by the discrete benefit of the vesting of stock grants and the release of an uncertain tax position. For the nine-months ended September 30, 2020, the Company benefited from three 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. Third, the Company benefited from a release of an uncertain tax position.

The Florida Department of Revenue has completed its audit of the Company’s state income tax returns for the years ended December 31, 2012 through December 31, 2013 and December 31, 2015 through December 31, 2018. No adjustments have been proposed for these periods. The Company has also been notified by the Mississippi Department of Revenue of its intent to examine the Company’s state income tax returns for the years ended December 31, 2016 through December 31, 2018. The result of Mississippi’s audit is not determinable since the audit is presently in its initial phase.

20. Share Repurchase Program — On November 5, 2018, pursuant to a Board of Directors resolution, the Company announced its intention to repurchase an aggregate amount of shares with a total purchase price not to exceed $20,000 of its common stock, par value $0.10 per share, in the open market, depending upon market conditions over the short to mid-term. The Shares Repurchase Program expired on March 8, 2019. During January 2019, the Company purchased 158,048 shares for a total of $2,604 at an average price of $16.48 per share. There were no such purchases during the three- and nine-months ended September 30, 2020.  

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

On January 10, 2019, the Company completed the acquisition of all of the outstanding shares of stock of two affiliated businesses, Defensive and Agrovant, which are located in Jaboticabal in the state of Sao Paul, Brazil. At closing the Company paid cash consideration of $20,679, which was net of cash acquired of $981, deferred consideration of $3,051 including contingent consideration dependent on certain financial results for 2019, and liabilities assumed of $18,160, including liabilities of $9,111 related to income tax matters. These companies were founded in 2000 and are suppliers of crop protection products and micronutrients with focus on the fruit and vegetable markets The acquisition was accounted for as a business combination and the total asset value of $41,890 was allocated as follows: trade name $1,010, customer relationships $5,705, goodwill $22,652, working capital and fixed assets $9,139 and indemnification assets $3,384. The operating results of the acquired businesses are included in our consolidated statements of operations from the date of acquisition. The goodwill recognized is expected to be deductible for income tax purposes, subject to merging AMVAC do Brasil with Defensive and Agrovant.

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

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

Proforma operating results have not been presented because the effects of the acquisitions were not material to the Company’s Condensed Consolidated Financial Statements.

22. Foreign Currency – The Company incurred net foreign currency transaction losses in the amount of $303 and $817 during the three-months ended September 30, 2020 and 2019, respectively. The Company incurred net foreign currency transaction losses in the amount of $1,431 and $903 during the nine-months ended September 30, 2020 and 2019, respectively. These foreign currency transaction effects are included in operating expenses on the Condensed Consolidated Financial Statements.

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23. Subsequent Events – The Company completed the acquisition of the Agrinos group of companies on October 2, 2020, and, separately, the acquisition of Agnova, located in Melbourne, Australia, on October 8, 2020. Both acquisitions will be accounted for as business combinations in the Company’s consolidated financial statements. The total consideration for the two acquisitions amounts to approximately $22,000, plus potential future earn-out consideration and net assets adjustments. The accounting for the two business combinations is in its early stage. Agrinos is a fully integrated biological input supplier with proprietary technology, internal manufacturing and global distribution capabilities. Agrinos’ high yield technology product platform works in conjunction with other nutritional crop inputs to increase crop yield, improve soil health and reduce the environmental footprint of traditional agricultural practices. AgNova is focused on serving customers primarily in the value-added fruit and vegetables segment of the Australian market.

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

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 Report. Such factors include, but are not limited to: product demand and market acceptance risks; the effect of economic conditions; weather conditions; changes in regulatory policy; the impact of competitive products and pricing; changes in foreign exchange rates; product development and commercialization difficulties; capacity and supply constraints or difficulties; availability of capital resources; general business regulations, including taxes and other risks as detailed from time-to-time in the Company’s reports and filings filed with the U.S. Securities and Exchange Commission (the “SEC”). It is not possible to foresee or identify all such factors. For more detailed information, refer to Item 1A., Risk factors and Item 7A., Quantitative and Qualitative Disclosures about Market Risk, in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.

MANAGEMENT OVERVIEW

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

In March 2020, the World Health Organization categorized the novel coronavirus (COVID-19) as a pandemic, and it continues to spread across the world. To limit the spread of the contagion, governments have taken various actions to slow and otherwise control the spread of the pandemic, including the issuance of stay-at-home orders, social distancing guidelines and border restrictions. At its outset, the Company took swift action to understand, contain and mitigate the risks posed by this pandemic. Specifically, we formed the Pandemic Work Group with a mission to ensure the health and safety of the workforce while ensuring continuity of the business. In the workplace, we have designed and implemented protocols for social distancing, made provisions for the workforce to work remotely where possible, and established quarantine policies for those who present COVID-like symptom or may have been in touch with those who have. Further, the group keeps current with local, state, federal and international laws and restrictions that could affect the business; provides real-time information to the workforce; and draws from political commentary and news statements concrete directions on how best to continue operations. We have also prepared contingency plans to permit the continued operation of our factories, in the event that there are critical staffing issues due to attrition. In addition, in April 2020, we amended our credit facility to support future working capital needs. Further, we continuously monitor supply chain, transport, logistics and border closures and have reached out to third parties to make clear that we are continuing to operate, that we have our own policies relating to health and are committed to compliance with COVID-19 policies of our business partners. Our Chief Executive Officer and the Pandemic Work Group are holding regular “state of the company” calls with the functional heads of our businesses across the globe to ensure that our information is shared in a timely manner and that our direction is clear.

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

In keeping with our charge to operate as an essential business and by virtue of our efforts to contain and mitigate the risks posed by the pandemic, we have been able to manage our business with minimal disruption during the reporting period. As mentioned earlier (see Note 1 to the Condensed Consolidated Financial Statements), the coronavirus has affected our overall performance to a degree. Lost opportunities for certain new product launches, inability to meet potential new customers face-to-face, reduced demand for commodity crops sold to restaurants, and foreign exchange effects in Brazil, Mexico and Australia, have likely limited the Company’s top-line growth by up to several million dollars and the associated profitability, to an indeterminate degree, since the inception of the pandemic.  

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Overview of the Company’s Third Quarter 2020 Performance ended September 30, 2020

The Company’s quarterly performance was, on the whole, about even with that of the comparable quarter in 2019. While sales declined by about 6% (to $117,439 in 2020 from $124,884 in 2019), net income was about even ($2,927 in 2020 v. $3,153 in 2019). As described in more detail below, domestic sales declined by about 10% due in part to severe weather conditions, commodity prices and conservative procurement practices amidst the pandemic. By contrast, international sales were flat quarter-over-quarter. Within that performance, Mexico, Central America and Australia all grew sales compared to the prior year. Overall cost of sales were slightly higher as a percentage of net sales, including a factory performance that was approximately flat compared to the same three-months period of 2019, and gross profit declined by 9% ($43,265 v. $47,463). Consequently, gross margin percentage decreased to 37% from 38% of net sales. Operating expenses decreased by about 5% (to $38,782 in 2020 from $40,677 in 2019), but remained flat at about 33% of net sales. With a lower base interest rate and more aggressive repayment of debt, our interest expense decreased by about 50%. Also, due to a higher mix of business in lower-tax jurisdictions coupled with two favorable adjustments, we benefitted from a lower effective tax rate. This yielded net income for the quarter in line with the same quarter of 2019. In short, the Company was able to maintain profitability on an absolute basis, despite a reduced top line in the midst of a global pandemic.

Details on our financial performance are set forth below.

RESULTS OF OPERATIONS

Quarter Ended September 30, 2020 and 2019:

	2020			2019			Change			% Change
Net sales:
US crop	$	48,361		$	55,072		$	(6,711	)		-12	%
US non-crop		18,251			18,995			(744	)		-4	%
Total US		66,612			74,067			(7,455	)		-10	%
International		50,827			50,817			10			0	%
Total net sales	$	117,439		$	124,884		$	(7,445	)		-6	%
Cost of sales:
US crop	$	28,215		$	31,362		$	(3,147	)		-10	%
US non-crop		9,493			9,135			358			4	%
Total US		37,708			40,497			(2,789	)		-7	%
International		36,466			36,924			(458	)		-1	%
Total cost of sales	$	74,174		$	77,421		$	(3,247	)		-4	%
Gross profit:
US crop	$	20,146		$	23,710		$	(3,564	)		-15	%
US non-crop		8,758			9,860			(1,102	)		-11	%
Total US		28,904			33,570			(4,666	)		-14	%
International		14,361			13,893			468			3	%
Total gross profit	$	43,265		$	47,463		$	(4,198	)		-9	%
Gross margin:
US crop		42	%		43	%
US non-crop		48	%		52	%
Total US		43	%		45	%
International		28	%		27	%
Total gross margin		37	%		38	%

Our domestic crop business recorded net sales that were about 12% lower than those of the prior year period ($48,361 v. $55,072). During the third quarter of 2020, the distribution channel continued conservative procurement practices due, among other things, to reduced ethanol demand, commodity pricing, a strained farm economy and the COVID-19 pandemic. This procurement pattern was particularly evident in Midwest corn and soybean markets. In cotton, net sales of our foliar insecticide Bidrin were lower this year due to multiple factors. First, low cotton commodity prices caused an 11% decline in planted cotton acres (down 1.5 million acres to 12.2 million). Second, unfavorable weather conditions, specifically extensive drought in West Texas and three successive hurricanes in the Southeast region, reduced product application. Similarly, our cotton harvest defoliant Folex generated lower third quarter sales following multiple hurricanes that struck the region late in the season, thereby destroying some harvestable acreage and otherwise delaying some harvesting applications to the fourth quarter. Offsetting some of these negative factors, we saw a strong performance in our soil fumigant business driven by a rebound in usage by potato growers as pandemic impacted restaurants and schools began to reopen.

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Cost of sales within the domestic crop business was 10% lower than the third quarter of 2019 (down to $28,215 from $31,362) and gross margin decreased to 42% of sales during the third quarter as compared to 43% for the comparable period last year.

Sales of our domestic non-crop business were down about 4% ($18,251 from $18,995) quarter-over-quarter. Our Dibrom® mosquito adulticide sales, which constitute a significant portion of overall non-crop sales, were approximately flat as compared to the third quarter of the prior year, as the mosquito control distributors continued to work down channel inventory during a succession of tropical storms and hurricanes this season. Net sales of Pest Strip were down as a result of reduced demand from restaurants and other similar establishments, which were subject to pandemic restrictions. Net sales from our OHP nursery and ornamental business were slightly higher than last year, as demand for homeowner garden and landscape products remained stable at retail locations around the country. We continue to maintain a steady level of business with our other commercial pest control products.

Cost of sales within the domestic non-crop business increased by about 4% (from $9,135 to $9,493) quarter-over-quarter. Gross profit for domestic non-crop decreased by 11% (from $9,860 in 2019 to $8,758 in 2020); and gross margin percentage for the non-crop business declined to 48% for the quarter as compared to 52% during the third quarter of 2019.

Net sales of our international businesses were flat during the period ($50,827 in 2020 v. $50,817 in 2019). Several factors contributed to this result. Sales performance rose about 4% in Mexico and Central America on strong product demand for granular insecticides, bromacil herbicides and soil fumigants. In Brazil, net sales declined primarily as a result of the devaluation of the Brazilian Real in comparison to last year, which impacted sales when translated to US Dollars for inclusion in the financial statements. In addition, the business was impacted by limited customer access (in light of coronavirus protocols), competitive market conditions and the exchange rate impact when sales were translated from a local currency. In Europe, sales of our Mocap® insecticide declined due to the regulatory phase-out of that product, offset somewhat by increased demand in other countries. Overall our sales of Nemacur soil insecticide rose nearly 50% in the quarter, including lower sales in Europe primarily associated with timing on orders from our Italian commission agent that was more than offset by a threefold increase in sales to various other countries. The Nemacur performance more than offset the decline in Mocap. In Australia, third quarter sales doubled versus the prior year.

Cost of sales in our international business decreased slightly (about 1%) from $36,924 in 2019 to $36,466 in 2020. Gross profit for International rose by approximately 3% from $13,893 in 2019 to $14,361 in 2020, and gross margin improved from 27% in the third quarter of 2019 to 28% for the same period this year.

On a consolidated basis, gross profit for the quarter decreased by 9% (from $47,463 in 2019 to $43,265 in 2020). Gross margin percentage declined to 37% in the quarter, as compared to 38% in the same quarter of the prior year.        

Operating expenses decreased by $1,895 to $38,782 for the three-months ended September 30, 2020, as compared to the same period in 2019. The differences in operating expenses by department are as follows:

	2020		2019		Change			% Change
Selling	$	10,824	$	11,961	$	(1,137	)		-10	%
General and administrative		10,372		13,406		(3,034	)		-23	%
Research, product development and regulatory		6,639		5,417		1,222			23	%
Freight, delivery and warehousing		10,947		9,893		1,054			11	%
	$	38,782	$	40,677	$	(1,895	)		-5	%

• Selling expenses decreased by $1,137 to end at $10,824 for the three-months ended September 30, 2020, as compared to the same period of the prior year. The main drivers were the reduction in advertising and promotion costs, the favorable impact of lower foreign currency exchange rates (as they relate to operating expenses of certain foreign subsidiaries) and decreased travel and entertainment expenses across all of our global operating subsidiaries, as a result of restrictions imposed in response to the COVID-19 pandemic.  

• General and administrative expenses decreased by $3,034 to end at $10,372 for the three-months ended September 30, 2020, as compared to the same period of 2019. The main drivers were the reduction in travel and entertainment expenses, legal expense and long-term incentive compensation. Further, we reduced our reserves for potential environmental expenses in the amount of $1,050, following the finalization of an updated environmental risk assessment related to the Brazilian businesses acquired in early 2019.

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• Research, product development costs and regulatory expenses increased by $1,222 to end at $6,639 for the three-months ended September 30, 2020, as compared to the same period of 2019. The main drivers were increases in our product defense and development activities and business development associated with our SIMPAS proprietary packaging. These costs were partially offset by general delays of activities with third party service providers caused by pandemic-related disruption.

• Freight, delivery and warehousing costs for the three-months ended September 30, 2020 were $10,947 or 9.3% of sales as compared to $9,893 or 7.8% of sales for the same period in 2019. This change in cost was primarily driven by the overall mix of product sales recorded in 2020, as compared to the same period of the prior year.

Interest costs net of capitalized interest were $1,022 during the three-months ended September 30, 2020, as compared to $2,070 in the same period of 2019. Interest costs are summarized in the following table:

Average Indebtedness and Interest expense

	Three-months ended September 30, 2020								Three-months ended September 30, 2019
	Average Debt		Interest Expense			Interest Rate			Average Debt		Interest Expense			Interest Rate
Revolving line of credit (average)	$	162,734	$	1,007			2.5	%	$	178,886	$	2,045			4.6	%
Amortization of deferred loan fees		—		80			—			—		58			—
Amortization of other deferred liabilities		—		2			—			—		41			—
Other interest expense		—		7			—			—		32			—
Subtotal		162,734		1,096			2.7	%		178,886		2,176			4.9	%
Capitalized interest		—		(74	)		—			—		(106	)		—
Total	$	162,734	$	1,022			2.5	%	$	178,886	$	2,070			4.6	%

The Company’s average overall debt for the three-months ended September 30, 2020 was $162,734, as compared to $178,886 for the three-months ended September 30, 2019. During the quarter, we continued to focus on managing our working capital for our expanded business and controlling our usage of revolving debt. As can be seen from the table above, our effective bank interest rate on our revolving line of credit was 2.5% for the three-months ended September 30, 2020, as compared to 4.6% in 2019. The lower interest cost was substantially due to lower interest rates on borrowings in the US, which was part of Federal Government efforts to stimulate the overall economy.

Income tax expense was $492 for the three-months ended September 30, 2020, as compared to $1,474 for the comparable period in 2019. The effective tax rate for the quarter was 14.2%, as compared to 31.3% in the same period of the prior year. The effective tax rate for all interim periods is based on the projected income for the full year and is subject to ongoing review and adjustment by management. The decrease in effective tax rate is primarily driven by the mix of our domestic and international income and the discrete benefit of the vesting of stock grants and the release of an uncertain tax position.

During the three-months ended September 30, 2020 and 2019, we recognized losses of $42 and $89, respectively, on our investment in the Hong Kong joint venture, which is a 50% owned equity investment.

Our overall net income for the three-months ended September 30, 2020 was $2,927 or $0.10 per basic and diluted share, as compared to $3,153 or $0.11 per basic and diluted share in the same period of 2019.

Overview of the Company’s Nine-Months Performance ended September 30, 2020

With the advent of the global pandemic early in the year, the Company’s performance during the first nine months of 2020 declined in most respects as compared to the same period in 2019. Our domestic non-crop sales were hampered by severe weather, commodity pricing, conservative procurement within the distribution channel and reduced acres of certain crops, such as cotton. By contrast, soil fumigants and new product introductions were strong. Similarly, non-crop sales declined due largely to lower sales of Dibrom as distribution worked down inventory levels; this decline was partially offset by higher royalties from our Envance essential oil products. On the international side, we experienced a modest overall decrease in sales, largely due to the phase-out of Mocap in the European Union (“EU”), market conditions in Brazil and pandemic restrictions in Central America. This was partially offset by strong performance in Mexico.

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On a consolidated basis, with domestic sales down 7% and international sales down by about 4%, overall net sales were down by about 6% ($317,956 v. $337,664). Cost of sales were down 5% on an absolute basis, while, in part driven by a strong factory performance, which improved during the first nine months of 2020 as compared to that of 2019. These factors, taken together, yielded a decline in gross profit of 7% ($8,866). In the first three quarters of 2020 operating expenses reduced by about 2% on an absolute basis, with considerably lower sales and marketing expenditures due largely to reduced travel and entertainment activities and customer visit limitations caused by restrictions in place related to the pandemic. However, operating expenses as a percent of net sales rose from 33% to 34% for the period. After both significantly lower interest and tax expense in the 2020 reporting period, net income declined to $7,334 (or $0.25 per diluted share from $10,165 or $0.34 per diluted share) during the first three quarters of the prior year. Details on our financial performance are set forth below.

RESULTS OF OPERATIONS

Nine-months ended September 30, 2020 and 2019

	2020			2019			Change			% Change
Net sales:
US crop	$	148,630		$	158,068		$	(9,438	)		-6	%
US non-crop		37,881			42,068			(4,187	)		-10	%
Total US		186,511			200,136			(13,625	)		-7	%
International		131,445			137,528			(6,083	)		-4	%
Total net sales	$	317,956		$	337,664		$	(19,708	)		-6	%
Cost of sales:
US crop	$	80,511		$	89,009		$	(8,498	)		-10	%
US non-crop		19,346			20,624			(1,278	)		-6	%
Total US		99,857			109,633			(9,776	)		-9	%
International		96,147			97,213			(1,066	)		-1	%
Total cost of sales	$	196,004		$	206,846		$	(10,842	)		-5	%
Gross profit:
US crop	$	68,119		$	69,059		$	(940	)		-1	%
US non-crop		18,535			21,444			(2,909	)		-14	%
Total US		86,654			90,503			(3,849	)		-4	%
International		35,298			40,315			(5,017	)		-12	%
Total gross profit	$	121,952		$	130,818		$	(8,866	)		-7	%
Gross margin:
US crop		46	%		44	%
US non-crop		49	%		51	%
Total US		46	%		45	%
International		27	%		29	%
Total gross margin		38	%		39	%

Our domestic crop business recorded net sales that were about 6% below those of first three quarters of 2019 ($148,630 v. $158,068). When viewed by type of product and crop, sales were mixed. During the first nine months, we have seen careful procurement patterns in the domestic market, as low crop commodity prices and concerns about near-term demand from Asia caused growers and retailers to purchase crop protection inputs at a cautious and deliberate pace. With respect to our corn products, net sales of corn soil insecticides, including Aztec®, SmartChoice® and Counter®, and our Impact® post-emergent herbicide were lower as a result of this conservative approach to procurement. Also, a significant decline in planted cotton acres (relating to lower commodity prices) and unfavorable weather contributed to a drop in net sales of both our Bidrin® foliar insecticide product and our Folex® growth regulator. Partially offsetting these declines, soil fumigants had a strong performance during the first nine months of 2020 due to drier weather conditions in California and the Pacific Northwest, which facilitated more widespread product application largely on potato crops. Recently acquired products, including our rice herbicide Arroz®, our soybean herbicides (FirstRate, Classic and Python) and our miticide Stifle, provided a strong incremental upside during the first three quarters of 2020.  

Cost of sales within the domestic crop business declined 9%, as compared to the first nine-months of 2019, and gross profit declined by 1% ($68,119 in 2020 versus $69,059 in 2019).

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Our domestic non-crop business recorded a decrease in net sales (down about 10% to $37,881 from $42,068) versus the first three quarters of 2019. In this category, our Dibrom® mosquito adulticide sales declined significantly, as relatively full channel inventories were used to address the aftermath of a series of tropical storms and hurricanes in 2020. Royalty fees for our Envance essential oil technology were higher than the first nine months of last year; and we expect to recognize additional license fees and royalties during the balance of 2020. Net sales of Pest Strip were down as a result of reduced demand from restaurants and other similar establishments, which were subject to pandemic restrictions. Our OHP nursery and ornamental business posted an 8% sales increase, as demand for homeowner garden and landscape products continued unabated as consumers took increasingly to home improvement and gardening in light of pandemic restrictions.

Cost of sales within the domestic non-crop business decreased by about 6% (to $19,346 from $20,624) during the first nine-months of 2020 versus the comparable period in 2019. Gross profit for domestic non-crop decreased by 14% (to $18,535 in 2020 from $21,444 in 2019) due primarily to lower sales of our Dibrom mosquito adulticide.

Net sales of our international businesses were down by about 4% during the period ($131,445 in 2020 v. $137,528 in 2019). Several factors contributed to this result. In Europe, sales of our Mocap® insecticide continue to decline during the phase-out of that product following the cancellation of its registration in the EU. In Canada, we experienced a sharp decline in Assure II sales as a result of intense third quarter price competition; the Company elected to maintain brand value rather than match the downward price trend.  Mexico posted improved sales with continuing demand for granular insecticides, bromacil herbicides, and soil fumigants for use on high-value vegetable crops. In Brazil, net sales declined due to lower disease pressure in soybeans (reducing demand for our fungicide products), portfolio streamlining and delays in procurement arising from uncertainty relating to the economy. The performances of our Brazilian and Mexican businesses were further affected by a devaluation in the Brazilian real and the Mexican peso. The average exchange rate of the Brazilian real and the Mexican peso decreased by approximately 23% and 11% for the nine-month period ended September 30, 2020 compared to the same period in the prior year.  

Cost of sales in our international business decreased by 1% (from $97,213 in 2019 to $96,147 in 2020) primarily driven by mix and currency changes. Gross profit for the international businesses dropped by about 12% (from $40,315 in 2019 to $35,298 in 2020). This resulted from reduced sales of certain high margin products, including Mocap insecticide and Assure II herbicide. In addition, we experienced higher sales of lower-margin products from our business in Australia.

On a consolidated basis, gross profit for the nine-months of 2020 decreased by 7% (from $130,818 in 2019 to $121,952 in 2020), as a result of reduced sales volumes detailed above. Factory performance was significantly better in the first nine-months of 2020, as compared to the same period of 2019. Gross margin performance, when expressed as a percentage of sales, declined slightly to 38% from 39% in the comparable period of 2019.

Operating expenses decreased by $1,957 to $108,882 for the nine-months ended September 30, 2020, but were 34% of net sales, as compared with 33% of net sales during the same period in 2019. The differences in operating expenses by department are as follows:

	2020		2019		Change			% Change
Selling	$	31,329	$	34,646	$	(3,317	)		-10	%
General and administrative		33,368		33,890		(522	)		-2	%
Research, product development and regulatory		18,896		17,956		940			5	%
Freight, delivery and warehousing		25,289		24,347		942			4	%
	$	108,882	$	110,839	$	(1,957	)		-2	%

• Selling expenses decreased by $3,317 to end at $31,329 for the nine-months ended September 30, 2020, as compared to the same period of 2019. The main drivers were the reduction in advertising and promotion costs, the favorable impact of lower foreign currency exchange rates (as they relate to the translation of operating expenses of certain foreign subsidiaries) and decreased travel and entertainment activities across our global operating subsidiaries, as a result of restrictions imposed in response to the COVID-19 pandemic.

• General and administrative expenses decreased by $522 to end at $33,368 for the nine-months ended September 30, 2020, as compared to the same period of 2019. The main drivers for the decrease were associated with the reduction in travel and entertainment expenses in response to the COVID-19 pandemic, a reduction in environmental reserves associated with our Brazilian business, lower legal expenses and incentive compensation. These categories of expenses were comparatively higher in the same period of 2019; however, due to two adjustments amounting to $3,539 in 2019 (an adjustment made to the fair value of the acquisition related to the deferred consideration liabilities and a break-up fee arising from an  unconsummated acquisition) the overall expense for the comparative periods was nearly flat.

28

• Research, product development costs and regulatory expenses increased by $940 to end at $18,896 for the nine-months ended September 30, 2020, as compared to the same period of 2019. The main drivers were increases in our product defense and product development costs, primarily resulting from increase activities in our newly acquired businesses in 2019, partially offset by the general delays in activities with third party service providers caused by pandemic related disruption.

• Freight, delivery and warehousing costs for the nine-months ended September 30, 2020 were $25,289 or 8.0% of sales as compared to $24,347 or 7.2% of sales for the same period in 2019. This change in cost was primarily driven by the overall mix of product sales recorded in 2020, as compared to the same period of the prior year.  

Interest costs net of capitalized interest were $3,804 in the first nine-months of 2020, as compared to $5,606 in the same period of 2019. Interest costs are summarized in the following table:

Average Indebtedness and Interest expense

	Nine-months ended September 30, 2020								Nine-months ended September 30, 2019
	Average Debt		Interest Expense			Interest Rate			Average Debt		Interest Expense			Interest Rate
Revolving line of credit (average)	$	171,203	$	3,751			2.9	%	$	166,877	$	5,530			4.4	%
Amortization of deferred loan fees		—		219			—			—		161			—
Amortization of other deferred liabilities		—		8			—			—		41			—
Other interest expense		—		64			—			—		102			—
Subtotal		171,203		4,042			3.1	%		166,877		5,834			4.7	%
Capitalized interest		—		(238	)		—			—		(228	)		—
Total	$	171,203	$	3,804			3.0	%	$	166,877	$	5,606			4.5	%

The Company’s average overall debt for the nine-months ended September 30, 2020 was $171,203, as compared to $166,877 for the nine-months ended September 30, 2019. During the period, we continued to focus on our usage of revolving debt, while funding working capital for the newly acquired products and businesses. As can be seen from the table above, our effective bank interest rate on our revolving line of credit was 2.9% for the nine-months ended September 30, 2020, as compared to 4.4% in 2019.

Income tax expense decreased by $2,207 to end at $1,852 for the nine-months ended September 30, 2020, as compared to income tax expense of $4,059 for the comparable period in 2019. The effective tax rate for the nine-months ended September 30, 2020 was 20.0%, which included three discrete income tax benefits during the nine-months ended September 30, 2020. 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. Third, the Company benefited from the release of an uncertain tax position. During the nine-months ended September 30, 2019, the Company’s effective tax rate was 28.2%. The effective tax rate for all interim periods is based on the projected income for the full year and is subject to ongoing review and adjustment by management.

During the nine-months ended September 30, 2020 and 2019, the Company recognized losses of $80 and $149, respectively, on its investment in the Hong Kong joint venture which is a 50% owned equity investment.

Our overall net income for the nine-months ended September 30, 2020 was $7,334 or $0.25 per basic and diluted share, as compared to $10,165 or $0.35 per basic and $0.34 per diluted share in the same period of 2019.

LIQUIDITY AND CAPITAL RESOURCES

The Company’s operating activities provided net cash of $19,197 during the nine-months ended September 30, 2020, as compared to utilizing $21,053 during the nine-months ended September 30, 2019. Included in the $19,197 are net income of $7,334, plus non-cash depreciation, amortization of intangibles and other assets and discounted future liabilities, in the amount of $14,584, the amortization of other assets of $3,185 and provision for bad debts in the amount of $777. Also included are stock-based compensation of $3,776, change in investment fair value of $281, loss from equity method investment of $80, decrease in deferred income taxes of $1,757 and net foreign currency adjustment of $711. These together provided net cash inflows of $26,996, as compared to $29,860 for the same period of 2019.

29

During the nine-months of 2020, the Company increased working capital by $4,950, as compared to an increase of $49,160 during the same period of the prior year. Included in this change: inventories increased by $16,941, as compared to $19,713 for the nine-months of 2019. Deferred revenue decreased by $1,079, as compared to $19,800 in the same period of 2019, driven by customer decisions regarding demand, payment timing and our cash incentive programs. Our accounts payable balances decreased by $1,759, as compared to $5,548 in the same period of 2019. Accounts receivables increased by $5,089, as compared to $15,839 in the same period of 2019. Prepaid expenses increased by $532, as compared to $849 in the same period of 2019. Income tax receivable net decreased by $873, as compared to an increase by $4,477 in the prior year. Accrued programs increased by $20,058, as compared to $20,163 in the prior year. The change reflected some changes in product mix and domestic programs. Finally, other payables and accrued expenses decreased by $3,344, as compared to $4,967 in the prior year as a result of the reduced incentive compensation accrual.

With regard to our program accrual, the increase (as noted above) primarily reflects our mix of sales and customers in the first nine-months of 2020, 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 30^th of each year. During the first nine-months of 2020, the Company made accruals for programs in the amount of $42,254 and made payments in the amount of $22,208. During the first nine-months of the prior year, the Company made accruals in the amount of $37,903 and made payments in the amount of $17,740.

Cash used for investing activities was $14,120 for the nine-months ended September 30, 2020, as compared to $42,382 for the nine-months ended September 30, 2019. The Company spent $8,988 on fixed assets acquisitions, primarily focused on continuing to invest in manufacturing infrastructure, and $5,132 on investments and intangible assets.

During the nine-months ended September 30, 2020, financing activities used $1,855, as compared to provide $63,825 for the same period of the prior year. This is principally from the reduced borrowings on the Company’s senior credit facility. In the first nine-months of 2020, the Company paid dividends to stockholders amounting to $1,168, as compared to $1,741 in the same period of 2019.  

The Company has a revolving line of credit that is shown as long-term debt in the Condensed Consolidated Balance Sheets at September 30, 2020 and December 31, 2019. These are summarized in the following table:

Long-term indebtedness ($000's)	September 30, 2020			December 31, 2019
Revolving line of credit	$	149,900		$	149,300
Deferred loan fees		(538	)		(534	)
Net long-term debt	$	149,362		$	148,766

At September 30, 2020, the Company is compliant with all covenants to its Senior Credit Facility. Based on its performance against the most restrictive covenants in the Credit Agreement (see, supra Note 10), the Company had the capacity to increase its borrowings by up to $44,500, according to the terms thereof. This compares to an available borrowing capacity of $30,435 as of September 30, 2019 and $26,977 at December 31, 2019. The level of borrowing capacity is driven by three factors: (1) our financial performance, as measured in EBITDA for both the trailing twelve month period and on a proforma basis arising from acquisitions, (2) net borrowings, (3) the leverage covenant (the Consolidated Funded Debt Ratio).

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

RECENTLY ISSUED ACCOUNTING GUIDANCE

Please refer to Note 15 in the accompanying Notes to the Condensed Consolidated Financial Statements for recently issued accounting standards.  

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

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, 2019, the Company provided a comprehensive statement of critical accounting policies. These policies have been reviewed in detail as part of the preparation work for this Form 10-Q. After our review of these matters, we have determined that, during the subject reporting period, there has been no material change to the critical accounting policies that are listed in the Company’s Form 10-K for the year ended December 31, 2019, except for the adoption of Accounting Standards Update (“ASU”) 2016-13, “Financial Instruments – Credit Losses (Topic 326)”, along with related clarifications and improvements.

30

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

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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, 2019.

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.

Item 4. CONTROLS AND PROCEDURES

As of September 30, 2020, the Company has a comprehensive set of disclosure controls and procedures designed to ensure that all information required to be disclosed in our filings under the Securities Exchange Act (1934) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. As of September 30, 2020, the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, has concluded, based on their evaluation, that the Company’s disclosure controls and procedures are effective to provide reasonable assurance of the achievement of the objectives described above.

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

31

PART II. OTHER INFORMATION

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

Item 1. Legal Proceedings

Please refer to Note 14 in the accompanying Notes to the Condensed Consolidated Financial Statements for legal updates.

Item 1A. Risk Factors

The Company continually re-assesses the business risks, and as part of that process detailed a range of risk factors in the disclosures in American Vanguard’s Report on Form 10-K for the fiscal year ended December 31, 2019, filed on March 10, 2020. In preparing this document, we have reviewed all the risk factors included in that document and find that there are no material changes to those risk factors, except for the following:

The Covid-19 pandemic is creating risk, uncertainty and adverse conditions in many industries both here and abroad.  The Company is closely monitoring the impact of the COVID-19 pandemic on all aspects of its business, including how the pandemic has impacted and may, in the future, impact its customers, business partners, and employees. While the Company did not incur significant disruptions from the COVID-19 pandemic during the three- and nine-months ended September 30, 2020, the coronavirus did have the effect of limiting sales on new product launches, limiting interactions with potential new customers, reducing demand for products used on crops that are purchased by restaurants, and negatively impacting foreign currency exchange rates in Brazil, Mexico and Australia. The Company is unable to predict the impact that the pandemic will have on its financial condition, results of operations and cash flows in future reporting due to numerous uncertainties. The extent to which the COVID-19 pandemic impacts the Company’s operations and those of its customers will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact, and the direct and indirect economic effects of the pandemic and containment measures, among others. There is no guarantee that the Company will be able to operate without material disruption for the duration of the pandemic or that its financial conditions and results of operations will not be materially adversely affected by the pandemic in future quarters.

Item 2. Purchases of Equity Securities by the Issuer

The table below summarizes the number of shares of our common stock that were repurchased during the nine-months ended September 30, 2019 under the share repurchase program. The shares and respective amount are recorded as treasury shares on the Company’s Condensed Consolidated Balance Sheets.  

Month ended	Total number of shares purchased		Average price paid per share		Total amount paid
January 31, 2019		158,048	$	16.48	$	2,605
Total number of shares repurchased		158,048	$	16.48	$	2,605

32

Item 6. Exhibits

Exhibits required to be filed by Item 601 of Regulation S-K:

Exhibit No.	Description
31.1	Certification of Chief Executive Officer Pursuant to Section 302 of The Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer Pursuant to Section 302 of The Sarbanes-Oxley Act of 2002.
32.1	Certification Pursuant to Section 906 of The Sarbanes-Oxley Act of 2002.
101	The following materials from American Vanguard Corp’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, formatted in iXBRL (Inline Extensible Business Reporting Language): (i) Condensed Consolidated Statements of Operations; (ii) Condensed Consolidated Statements of Comprehensive Income (Loss); (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 for the Company’s Quarterly Report on Form 10-Q has been formatted in Inline XBRL and contained in Exhibit 101.

33

SIGNATURES

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.

	american vanguard corporation
Dated: November 9, 2020	By:	/s/    eric g. wintemute
		Eric G. Wintemute
		Chief Executive Officer and Chairman of the Board
Dated: November 9, 2020	By:	/s/    david t. johnson
		David T. Johnson
		Chief Financial Officer & Principal Accounting Officer

34

EX-31.1

Exhibit 31.1

AMERICAN VANGUARD CORPORATION

CHIEF EXECUTIVE OFFICER CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Eric G. Wintemute, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of American Vanguard Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(e) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in according with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures, and presented in this report our conclusions about the effectiveness of the disclosures controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

(a) all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: November 9, 2020	/S/    ERIC G. WINTEMUTE
	Eric G. Wintemute
	Chief Executive Officer and Chairman of the Board

EX-31.2

Exhibit 31.2

AMERICAN VANGUARD CORPORATION

CHIEF FINANCIAL OFFICER CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, David T. Johnson, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of American Vanguard Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(e) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in according with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures, and presented in this report our conclusions about the effectiveness of the disclosures controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

(a) all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: November 9, 2020	/S/    DAVID T. JOHNSON
	David T. Johnson
	Chief Financial Officer & Principal Accounting Officer

EX-32.1

Exhibit 32.1

AMERICAN VANGUARD CORPORATION

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of American Vanguard Corporation (the “Company”) on Form 10-Q for the period ended September 30, 2020 as filed with the U.S. Securities and Exchange Commission on the date hereof (the “Report”), the undersigned Chief Executive Officer and Chief Financial Officer of the Company hereby certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to 906 of the Sarbanes-Oxley Act of 2002 that based on their knowledge (1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and (2) the information contained in the Report fairly represents, in all material respects, the financial condition and results of operations of the Company as of and for the periods covered in the Report.

/S/    ERIC G. WINTEMUTE

Eric G. Wintemute

Chief Executive Officer and Chairman of the Board

/S/    DAVID T. JOHNSON

David T. Johnson

Chief Financial Officer & Principal Accounting Officer

November 9, 2020

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to American Vanguard Corporation and will be retained by American Vanguard Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

The foregoing certification is being furnished to the Securities and Exchange Commission as an exhibit to the Form 10-Q and shall not be considered filed as part of the Form 10-Q.

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2020	Oct. 29, 2020
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2020
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q3
Trading Symbol	AVD
Entity Registrant Name	AMERICAN VANGUARD CORPORATION
Entity Central Index Key	0000005981
Entity Current Reporting Status	Yes
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		30,287,577
Entity Shell Company	false
Entity Small Business	false
Entity Emerging Growth Company	false
Entity File Number	001-13795
Entity Tax Identification Number	95-2588080
Entity Address, Address Line One	4695 MacArthur Court
Entity Address, City or Town	Newport Beach
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	92660
City Area Code	949
Local Phone Number	260-1200
Entity Interactive Data Current	Yes
Title of 12(b) Security	Common Stock, $.10 par value
Security Exchange Name	NYSE
Document Quarterly Report	true
Document Transition Report	false
Entity Incorporation, State or Country Code	DE

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Income Statement [Abstract]
Net sales	$ 117,439	$ 124,884	$ 317,956	$ 337,664
Cost of sales	74,174	77,421	196,004	206,846
Gross profit	43,265	47,463	121,952	130,818
Operating expenses	38,782	40,677	108,882	110,839
Operating income	4,483	6,786	13,070	19,979
Interest expense, net	1,022	2,070	3,804	5,606
Income before provision for income taxes and loss on equity method investment	3,461	4,716	9,266	14,373
Income tax expense	492	1,474	1,852	4,059
Income before loss on equity method investment	2,969	3,242	7,414	10,314
Loss from equity method investment	42	89	80	149
Net income attributable to American Vanguard	$ 2,927	$ 3,153	$ 7,334	$ 10,165
Earnings per common share—basic	$ 0.10	$ 0.11	$ 0.25	$ 0.35
Earnings per common share—assuming dilution	$ 0.10	$ 0.11	$ 0.25	$ 0.34
Weighted average shares outstanding—basic	29,501	29,057	29,401	29,013
Weighted average shares outstanding—assuming dilution	29,973	29,650	29,926	29,591

XML

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Statement Of Income And Comprehensive Income [Abstract]
Net income	$ 2,927	$ 3,153	$ 7,334	$ 10,165
Comprehensive income:
Foreign currency translation adjustment	(83)	(1,080)	(8,822)	(2,192)
Comprehensive income (loss)	$ 2,844	$ 2,073	$ (1,488)	$ 7,973

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 9,581	$ 6,581
Receivables:
Trade, net of allowance for doubtful accounts of $3,046 and $2,300, respectively	145,374	136,075
Other	9,064	16,949
Total receivables, net	154,438	153,024
Inventories, net	176,287	163,313
Prepaid expenses	10,738	10,457
Income taxes receivable	1,972	2,824
Total current assets	353,016	336,199
Property, plant and equipment, net	59,801	56,521
Operating lease right-of-use assets	12,128	11,258
Intangible assets, net of amortization	191,133	198,377
Goodwill	40,737	46,557
Other assets	18,926	21,186
Total assets	675,741	670,098
Current liabilities:
Current installments of other liabilities	210	1,513
Accounts payable	61,283	64,881
Deferred revenue	5,689	6,826
Accrued program costs	67,745	47,699
Accrued expenses and other payables	11,266	12,815
Operating lease liabilities, current	4,312	4,904
Total current liabilities	150,505	138,638
Long-term debt, net of deferred loan fees	149,362	148,766
Operating lease liabilities, long-term	7,979	6,503
Other liabilities, excluding current installments	9,087	12,890
Deferred income tax liabilities	14,014	19,145
Total liabilities	330,947	325,942
Commitments and contingent liabilities
Stockholders' equity:
Preferred stock, $.10 par value per share; authorized 400,000 shares; none issued
Common stock, $.10 par value per share; authorized 40,000,000 shares; issued 33,337,075 shares at September 30, 2020 and 33,233,614 shares at December 31, 2019	3,335	3,324
Additional paid-in capital	93,273	90,572
Accumulated other comprehensive loss	(14,520)	(5,698)
Retained earnings	280,866	274,118
Total stockholders' equity including treasury stock	362,954	362,316
Less treasury stock at cost, 3,061,040 shares at September 30, 2020 and December 31, 2019	(18,160)	(18,160)
Total stockholders’ equity	344,794	344,156
Total liabilities and stockholders' equity	$ 675,741	$ 670,098

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Statement Of Financial Position [Abstract]
Allowance for doubtful accounts	$ 3,046	$ 2,300
Preferred stock, par value per share	$ 0.10	$ 0.10
Preferred stock, shares authorized	400,000	400,000
Preferred stock, shares issued	0	0
Common stock, par value per share	$ 0.10	$ 0.10
Common stock, shares authorized	40,000,000	40,000,000
Common stock, shares issued	33,337,075	33,233,614
Treasury stock, shares	3,061,040	3,061,040

XML

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Loss	Retained Earnings	Treasury Stock	AVD Total
Balance at Dec. 31, 2018		$ 3,276	$ 83,177	$ (4,507)	$ 262,840	$ (15,556)	$ 329,230
Balance (in shares) at Dec. 31, 2018		32,752,827				2,902,992
Common stock issued under ESPP		$ 2	336				338
Common stock issued under ESPP, (in Shares)		22,441
Cash dividends on common stock ($0.02 per share)					(580)		(580)
Foreign currency translation adjustment, net				(1,769)			(1,769)
Stock-based compensation			1,485				1,485
Stock options exercised; grants, termination and vesting of restricted stock units (net of shares in lieu of taxes)		$ 42	(930)				(888)
Stock options exercised; grants, termination and vesting of restricted stock units (net of shares in lieu of taxes), Shares		419,295
Shares repurchased						$ (2,604)	(2,604)
Shares repurchased (In Shares)						158,048
Net income					3,906		3,906
Balance at Mar. 31, 2019		$ 3,320	84,068	(6,276)	266,166	$ (18,160)	329,118
Balance (in shares) at Mar. 31, 2019		33,194,563				3,061,040
Balance at Dec. 31, 2018		$ 3,276	83,177	(4,507)	262,840	$ (15,556)	329,230
Balance (in shares) at Dec. 31, 2018		32,752,827				2,902,992
Foreign currency translation adjustment, net	$ (2,192)
Net income	10,165
Balance at Sep. 30, 2019		$ 3,325	88,257	(6,699)	271,263	$ (18,160)	337,986
Balance (in shares) at Sep. 30, 2019		33,235,938				3,061,040
Balance at Mar. 31, 2019		$ 3,320	84,068	(6,276)	266,166	$ (18,160)	329,118
Balance (in shares) at Mar. 31, 2019		33,194,563				3,061,040
Cash dividends on common stock ($0.02 per share)					(580)		(580)
Foreign currency translation adjustment, net				657			657
Stock-based compensation			1,510				1,510
Stock options exercised; grants, termination and vesting of restricted stock units (net of shares in lieu of taxes)		$ 1	36				37
Stock options exercised; grants, termination and vesting of restricted stock units (net of shares in lieu of taxes), Shares		9,628
Net income					3,106		3,106
Balance at Jun. 30, 2019		$ 3,321	85,614	(5,619)	268,692	$ (18,160)	333,848
Balance (in shares) at Jun. 30, 2019		33,204,191				3,061,040
Common stock issued under ESPP		$ 3	375				378
Common stock issued under ESPP, (in Shares)		24,788
Cash dividends on common stock ($0.02 per share)					(582)		(582)
Foreign currency translation adjustment, net	(1,080)			(1,080)			(1,080)
Stock-based compensation			2,164				2,164
Stock options exercised; grants, termination and vesting of restricted stock units (net of shares in lieu of taxes)		$ 1	104				105
Stock options exercised; grants, termination and vesting of restricted stock units (net of shares in lieu of taxes), Shares		6,959
Net income	3,153				3,153		3,153
Balance at Sep. 30, 2019		$ 3,325	88,257	(6,699)	271,263	$ (18,160)	$ 337,986
Balance (in shares) at Sep. 30, 2019		33,235,938				3,061,040
Balance at Dec. 31, 2019	$ 344,156	$ 3,324	90,572	(5,698)	274,118	$ (18,160)
Balance (in shares) at Dec. 31, 2019	33,233,614	33,233,614				3,061,040
Common stock issued under ESPP	$ 352	$ 2	350
Common stock issued under ESPP, (in Shares)		22,776
Cash dividends on common stock ($0.02 per share)	(586)				(586)
Foreign currency translation adjustment, net	(9,063)			9,063
Stock-based compensation	1,357		1,357
Stock options exercised; grants, termination and vesting of restricted stock units (net of shares in lieu of taxes)	(2,529)	$ (7)	(2,522)
Stock options exercised; grants, termination and vesting of restricted stock units (net of shares in lieu of taxes), Shares		(67,969)
Net income	520				520
Balance at Mar. 31, 2020	334,207	$ 3,319	89,757	(14,761)	274,052	$ (18,160)
Balance (in shares) at Mar. 31, 2020		33,188,421				3,061,040
Balance at Dec. 31, 2019	$ 344,156	$ 3,324	90,572	(5,698)	274,118	$ (18,160)
Balance (in shares) at Dec. 31, 2019	33,233,614	33,233,614				3,061,040
Foreign currency translation adjustment, net	$ (8,822)
Net income	7,334
Balance at Sep. 30, 2020	$ 344,794	$ 3,335	93,273	(14,520)	280,866	$ (18,160)
Balance (in shares) at Sep. 30, 2020	33,337,075	33,337,075				3,061,040
Balance at Mar. 31, 2020	$ 334,207	$ 3,319	89,757	(14,761)	274,052	$ (18,160)
Balance (in shares) at Mar. 31, 2020		33,188,421				3,061,040
Foreign currency translation adjustment, net	324			324
Stock-based compensation	1,188		1,188
Stock options exercised; grants, termination and vesting of restricted stock units (net of shares in lieu of taxes)	54	$ 5	49
Stock options exercised; grants, termination and vesting of restricted stock units (net of shares in lieu of taxes), Shares		40,657
Net income	3,887				3,887
Balance at Jun. 30, 2020	339,660	$ 3,324	90,994	(14,437)	277,939	$ (18,160)
Balance (in shares) at Jun. 30, 2020		33,229,078				3,061,040
Common stock issued under ESPP	369	$ 3	366
Common stock issued under ESPP, (in Shares)		26,892
Foreign currency translation adjustment, net	(83)			(83)
Stock-based compensation	1,231		1,231
Stock options exercised; grants, termination and vesting of restricted stock units (net of shares in lieu of taxes)	690	$ 8	682
Stock options exercised; grants, termination and vesting of restricted stock units (net of shares in lieu of taxes), Shares		81,105
Net income	2,927				2,927
Balance at Sep. 30, 2020	$ 344,794	$ 3,335	$ 93,273	$ (14,520)	$ 280,866	$ (18,160)
Balance (in shares) at Sep. 30, 2020	33,337,075	33,337,075				3,061,040

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CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares	3 Months Ended
	Mar. 31, 2020	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019
Statement Of Stockholders Equity [Abstract]
Cash dividends on common stock, per share	$ 0.02	$ 0.02	$ 0.02	$ 0.02

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Cash flows from operating activities:
Net income	$ 7,334	$ 10,165
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization of property, plant and equipment and intangible assets	14,584	13,892
Amortization of other long-term assets and deferred loan fees	3,185	3,174
Amortization of discounted liabilities	9	41
Provision for bad debts	777	728
Revision of deferred consideration		(3,539)
Stock-based compensation	3,776	5,159
Change in deferred income taxes	(1,757)	(459)
Change in investment fair value	(281)
Loss from equity method investment	80	149
Net foreign currency adjustment	(711)	550
Changes in assets and liabilities associated with operations:
Increase in net receivables	(5,089)	(15,839)
Increase in inventories	(16,941)	(19,713)
Increase in prepaid expenses and other assets	(532)	(849)
Decrease (increase) in income tax receivable	873	(4,477)
Increase in net operating lease liability	14	117
Decrease in accounts payable	(1,759)	(5,548)
Decrease in deferred revenue	(1,079)	(19,800)
Increase in accrued program costs	20,058	20,163
Decrease in other payables and accrued expenses	(3,344)	(4,967)
Net cash provided by (used in) operating activities	19,197	(21,053)
Cash flows from investing activities:
Capital expenditures	(8,988)	(10,546)
Acquisition of business, product lines, and intangible assets	(3,942)	(31,836)
Investment	(1,190)
Net cash used in investing activities	(14,120)	(42,382)
Cash flows from financing activities:
Net borrowings under line of credit agreement	377	68,200
Net payments from the issuance of common stock (sale of stock under ESPP, exercise of stock options, and shares purchased for tax withholding)	(1,064)	(30)
Repurchase of common stock		(2,604)
Payment of cash dividends	(1,168)	(1,741)
Net cash (used in) provided by financing activities	(1,855)	63,825
Net increase (decrease) in cash and cash equivalents	3,222	390
Effect of exchange rate changes on cash and cash equivalents	(222)	(671)
Cash and cash equivalents at beginning of period	6,581	6,168
Cash and cash equivalents at end of period	9,581	5,887
Cash paid during the period for:
Interest	3,960	5,524
Income taxes, net	$ 2,868	$ 8,066

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Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2020

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

1. The accompanying unaudited Condensed Consolidated Financial Statements of American Vanguard Corporation and Subsidiaries (“AVD” or “the Company”) have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three- and nine-months ended September 30, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020. The financial statements and related notes do not include all information and footnotes required by US GAAP for annual reports. This quarterly report should be read in conjunction with the consolidated financial statements included in the Company’s annual report on Form 10-K for the year ended December 31, 2019.

The Company is closely monitoring the impact of the novel coronavirus (COVID-19) pandemic on all aspects of its business, including how the pandemic has impacted, and will likely impact, its customers, business partners, and employees. The Company is considered an essential business by most governments in the jurisdictions and territories in which the Company operates and, as a result, did not incur significant disruptions from the COVID-19 pandemic during the three- and nine-months ended September 30, 2020. At this point in the year, however, the Company can identify a number of effects on its overall performance as a result of the coronavirus. While none of them alone is material, taken together, they would constitute several million dollars in lost sales opportunities and an indeterminate level of profitability. First, while the Company has recorded strong sales of new products, particularly soybean and rice herbicides, the Company believes that those sales would likely have been higher but for the fact that the Company was constrained from holding in-person meetings with existing and potential new customers to promote those products. Second, demand for certain commodities – specifically, corn, potatoes and fruits and vegetables – have experienced a drop from restaurants that have been closed (in whole or in part) due to the coronavirus. This, in turn, has softened demand for some of the Company’s products that are used on those crops and could affect future contracts. Third, local currencies in Brazil, Mexico and Australia suffered a significant decline in value versus the US dollar during the first quarter of the year, which, in turn, has affected both sales and to a lesser extent profitability of our international business. These key currencies (from the Company’s perspective) have somewhat stabilized at new lower levels during the second and third quarter of the year. We do not know what movements in key rates to expect for the balance of 2020 and beyond. Further, while it is not possible to identify all of the reasons for the fluctuation in exchange rates with certainty, it is not unreasonable to include the pandemic among its causes.

Looking forward, the Company is unable to predict the impact that the pandemic may have on its future financial condition, results of operations and cash flows due to numerous uncertainties. The extent to which the COVID-19 pandemic impacts the Company’s operations and those of its customers in the near term will depend on future developments, which are highly uncertain and, beyond extrapolating our experience over the past nine-months, cannot be predicted with confidence. The Company continues to monitor its business for adverse impacts of the pandemic, including volatility in the foreign exchange markets, demand, supply-chain disruptions in certain markets, and increased costs of employee safety, among others.

Update to Significant Accounting Policies:

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

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

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

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Leases

9 Months Ended

Sep. 30, 2020

Leases [Abstract]

Leases

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

Finance leases are immaterial to the Condensed Consolidated Financial Statements. There were no lease transactions with related parties as of September 30, 2020.

The operating lease expense for the three-months ended September 30, 2020 and 2019 was $1,396 and $1,387, respectively, and $4,188 and $4,145 for the nine-months ended September 30, 2020 and 2019, respectively. Lease expenses related to variable lease payments and short-term leases were immaterial. Additional information related to operating leases are as follows:

	For the Three- months ended September 30, 2020		For the Three- months ended September 30, 2019		For the Nine- months ended September 30, 2020		For the Nine- months ended September 30, 2019
Cash paid for amounts included in the    measurement of lease liabilities	$	1,399	$	1,343	$	4,177	$	4,029
ROU assets obtained in exchange for new    liabilities	$	3,393	$	1,066	$	4,895	$	3,119

The weighted-average remaining lease term and discount rate related to the operating leases as of September 30, 2020 were as follows:

Weighted-average remaining lease term (in years)	4.62
Weighted-average discount rate	3.81	%

Future minimum lease payments under non-cancellable operating leases as of September 30, 2020, were as follows:

2020 (excluding nine-months ended September 30, 2020)	$	1,364
2021		4,003
2022		2,464
2023		1,677
2024		1,065
Thereafter		2,925
Total lease payments		13,498
Less: imputed interest		1,207
Total	$	12,291
Amounts recognized in the Condensed Consolidated Balance Sheets:
Operating lease liabilities, current	$	4,312
Operating lease liabilities, long-term	$	7,979

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Revenue Recognition

9 Months Ended

Sep. 30, 2020

Revenue From Contract With Customer [Abstract]

Revenue Recognition

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

	For the Three-Months Ended September 30,				For the Nine-Months Ended September 30,
	2020		2019		2020		2019
Net sales:
US crop	$	48,361	$	55,072	$	148,630	$	158,068
US non-crop		18,251		18,995		37,881		42,068
Total US		66,612		74,067		186,511		200,136
International		50,827		50,817		131,445		137,528
Total net sales	$	117,439	$	124,884	$	317,956	$	337,664
Timing of revenue recognition:
Goods and services transferred at a point    in time	$	116,333	$	124,884	$	315,954	$	337,285
Goods and services transferred over time		1,106		—		2,002		379
Total net sales	$	117,439	$	124,884	$	317,956	$	337,664

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

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

	September 30, 2020		December 31, 2019
Contract assets	$	3,200	$	6,091
Deferred revenue	$	5,689	$	6,826

Revenue recognized for the three- and nine-months ended September 30, 2020, that was included in deferred revenue at the beginning of 2020 was $94 and $2,573, respectively.

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Property, Plant and Equipment

9 Months Ended

Sep. 30, 2020

Property Plant And Equipment [Abstract]

Property, Plant and Equipment

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

	September 30, 2020			December 31, 2019
Land	$	2,706		$	2,706
Buildings and improvements		18,629			18,640
Machinery and equipment		119,920			116,757
Office furniture, fixtures and equipment		6,954			6,228
Automotive equipment		1,656			1,762
Construction in progress		9,316			5,263
Total gross value		159,181			151,356
Less accumulated depreciation		(99,380	)		(94,835	)
Total net value	$	59,801		$	56,521

The Company recognized depreciation expense related to property, plant and equipment of $1,878 and $1,571 for the three- months ended September 30, 2020 and 2019, respectively. During the three-months ended September 30, 2020, the Company eliminated $205 from such assets and accumulated depreciation of fully depreciated assets. During the three-months ended September 30, 2019, the Company eliminated $8 from assets and accumulated depreciation of fully depreciated assets.

The Company recognized depreciation expense related to property, plant and equipment of $5,235 and $4,796 for the nine-months ended September 30, 2020 and 2019, respectively. During the nine-months ended September 30, 2020 and 2019, the Company eliminated from such assets and accumulated depreciation $601 and $718, respectively, of fully depreciated assets.

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

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Inventories

9 Months Ended

Sep. 30, 2020

Inventory Disclosure [Abstract]

Inventories

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

	September 30, 2020		December 31, 2019
Finished products	$	163,356	$	151,917
Raw materials		12,931		11,396
	$	176,287	$	163,313

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Segment Reporting

9 Months Ended

Sep. 30, 2020

Segment Reporting [Abstract]

Segment Reporting

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

	For the three-months ended September 30,
	2020		2019		Change			% Change
Net sales:
US crop	$	48,361	$	55,072	$	(6,711	)		-12	%
US non-crop		18,251		18,995		(744	)		-4	%
US total		66,612		74,067		(7,455	)		-10	%
International		50,827		50,817		10			0	%
Net sales	$	117,439	$	124,884	$	(7,445	)		-6	%
Gross profit:
US crop	$	20,146	$	23,710	$	(3,564	)		-15	%
US non-crop		8,758		9,860		(1,102	)		-11	%
US total		28,904		33,570		(4,666	)		-14	%
International		14,361		13,893		468			3	%
Total gross profit	$	43,265	$	47,463	$	(4,198	)		-9	%

	For the nine-months ended September 30,
	2020		2019		Change			% Change
Net sales:
US crop	$	148,630	$	158,068	$	(9,438	)		-6	%
US non-crop		37,881		42,068		(4,187	)		-10	%
US total		186,511		200,136		(13,625	)		-7	%
International		131,445		137,528		(6,083	)		-4	%
Net sales	$	317,956	$	337,664	$	(19,708	)		-6	%
Gross profit:
US crop	$	68,119	$	69,059	$	(940	)		-1	%
US non-crop		18,535		21,444		(2,909	)		-14	%
US total		86,654		90,503		(3,849	)		-4	%
International		35,298		40,315		(5,017	)		-12	%
Total gross profit	$	121,952	$	130,818	$	(8,866	)		-7	%

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Accrued Program Costs

9 Months Ended

Sep. 30, 2020

Payables And Accruals [Abstract]

Accrued Program Costs

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 made to distributors, retailers or growers, at the end of a growing season. The Company describes these payments as “Programs.” Programs are a critical part of doing business in both the US crop and US non-crop chemicals market. These discount Programs represent variable consideration. In accordance with ASC 606, revenues from sales are recorded at the net sales price, which is the transaction price net of the impact of Programs and includes estimates of variable consideration. Variable consideration includes amounts expected to be paid to its customers estimated using the expected value method. Each quarter-end, management compares 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 executive and financial management, review 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 paid out predominantly on an annual basis, usually in the final quarter of the financial year or the first quarter of the following year. No significant changes in estimates were made during the three- and nine-months ended September 30, 2020 and 2019, respectively.   

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Cash Dividend

9 Months Ended

Sep. 30, 2020

Cash Dividends [Abstract]

Cash Dividend

8. 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
March 9, 2020	March 26, 2020	April 16, 2020	$	0.020	$	586
December 9, 2019	December 26, 2019	January 9, 2020	$	0.020	$	582
September 16, 2019	October 3, 2019	October 17, 2019	$	0.020	$	582
June 10, 2019	June 28, 2019	July 12, 2019	$	0.020	$	580
March 6, 2019	March 27, 2019	April 10, 2019	$	0.020	$	580
December 10, 2018	December 27, 2018	January 10, 2019	$	0.020	$	581

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Earnings Per Share

9 Months Ended

Sep. 30, 2020

Earnings Per Share [Abstract]

Earnings Per Share

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

The components of basic and diluted earnings per share were as follows:

	For the Three-Months Ended September 30,				For the Nine-Months Ended September 30,
	2020		2019		2020		2019
Numerator:
Net income attributable to AVD	$	2,927	$	3,153	$	7,334	$	10,165
Denominator: (in thousands)
Weighted average shares outstanding-basic		29,501		29,057		29,401		29,013
Dilutive effect of stock options and grants		472		593		525		578
		29,973		29,650		29,926		29,591

For the three- and nine-months ended September 30, 2020 and 2019, respectively, no stock options were excluded from the computation of diluted earnings per share.

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Indebtedness

9 Months Ended

Sep. 30, 2020

Debt Disclosure [Abstract]

Indebtedness

10. The Company has a revolving line of credit that is shown as long-term debt on the Condensed Consolidated Balance Sheets at September 30, 2020 and December 31, 2019. The Company has no short-term debt as of September 30, 2020 and December 31, 2019.  Debt is summarized in the following table:

Long-term indebtedness ($000's)	September 30, 2020			December 31, 2019
Revolving line of credit	$	149,900		$	149,300
Deferred loan fees		(538	)		(534	)
Net long-term debt	$	149,362		$	148,766

As of June 30, 2017, AMVAC Chemical Corporation (“AMVAC”), the Company’s principal operating subsidiary, as borrower, and affiliates (including the Company, AMVAC CV and AMVAC BV), as guarantors and/or borrowers, entered into a Third Amendment to Second Amended and Restated Credit Agreement with a group of commercial lenders led by Bank of the West as agent, swing line lender and letter of credit issuer. The agreement is a senior secured lending facility, consisting of a line of credit of up to $250,000, an accordion feature of up to $100,000 and a maturity date of June 30, 2022. The agreement contains two key financial covenants; namely, borrowers are required to maintain a Consolidated Funded Debt Ratio (the “CFD Ratio”) of no more than 3.25-to-1 and a Consolidated Fixed Charge Covenant Ratio of at least 1.25-to-1. The Company’s borrowing capacity varies with its financial performance, measured in terms of EBITDA as defined in the Credit Agreement, for the trailing twelve-month period. Under the agreement, revolving loans bear interest at a variable rate based, at borrower’s election with proper notice, on either (i) LIBOR plus the “Applicable Rate” which is based upon the Consolidated Funded Debt Ratio (“Eurocurrency Rate Loan”) or (ii) the greater of (x) the Prime Rate, (y) the Federal Funds Rate plus 0.5%, and (z) the Daily One-Month LIBOR Rate plus 1.00%, plus, in the case of (x), (y) or (z) the Applicable Rate (“Alternate Base Rate Loan”). Interest payments for Eurocurrency Rate Loans are payable on the last day of each interest period (either one, two, three or nine-months, as selected by the borrower) and the maturity date, while interest payments for Alternate Base Rate Loans are payable on the last business day of each month and the maturity date.

As of November 27, 2019, AMVAC, as borrower, and certain affiliates entered into a Fourth Amendment to Second Amended and Restated Credit Agreement with its senior lenders under the terms of which the maximum limits for both Permitted Acquisitions and Investments in Foreign Subsidiaries were increased and new language was added with respect to Eurocurrency Rates, LIBOR Rates and ERISA.

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

At September 30, 2020, the Company is compliant with all covenants to its senior credit facility. Based on its performance against the most restrictive covenants in the credit agreement, the Company had the capacity to increase its borrowings by up to $44,500. This compares to an available borrowing capacity of $30,435, as of September 30, 2019 and $26,977 at December 31, 2019. The level of borrowing capacity is driven by three factors: (1) our financial performance, as measured in EBITDA including both the trailing twelve-month period and on a proforma basis arising from acquisitions, (2) net borrowings, and (3) the leverage covenant (the Consolidated Funded Debt ratio).

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Reclassification

9 Months Ended

Sep. 30, 2020

Text Block [Abstract]

Reclassification

11. Reclassification—Certain items may have been reclassified in the prior period Condensed Consolidated Financial Statements to conform with the September 30, 2020 presentation.

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Comprehensive Income

9 Months Ended

Sep. 30, 2020

Equity [Abstract]

Comprehensive Income

12. Total comprehensive income (loss) includes, in addition to net income, changes in equity that are excluded from the Condensed Consolidated Statements of Operations and are recorded directly into a separate section of stockholders’ equity on the Condensed Consolidated Balance Sheets. For the three- and nine-month periods ended September 30, 2020 and 2019, total comprehensive income (loss) consisted of net income attributable to American Vanguard and foreign currency translation adjustments.

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Stock Based Compensation

9 Months Ended

Sep. 30, 2020

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock Based Compensation

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

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, 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
September 30, 2019
Restricted Stock	$	1,082	$	2,751	$	6,849		2.2
Unrestricted Stock		105		300		280		0.7
Performance-Based Restricted Stock		977		2,108		3,320		2.0
Total	$	2,164	$	5,159	$	10,449

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 ended September 30, 2020 and 2019.

Restricted and Unrestricted Stock — A summary of nonvested restricted and unrestricted stock is presented below:

	For the Nine-Months Ended September 30, 2020					For the Nine-Months Ended September 30, 2019
	Number of Shares			Weighted Average Grant Date Fair Value		Number of Shares			Weighted Average Grant Date Fair Value
Nonvested shares at December 31st		719,845		$	17.67		587,210		$	17.59
Granted		4,185			18.63		297,679			17.34
Vested		(213,781	)		16.18		(105,582	)		15.21
Forfeited		(14,715	)		18.08		(6,589	)		17.69
Nonvested shares at March 31st		495,534			18.31		772,718			17.77
Granted		43,168			13.45		40,522			13.34
Vested		(37,958	)		13.88		(32,771	)		13.35
Forfeited		(8,221	)		18.64		(21,184	)		17.77
Nonvested shares at June 30th		492,523			18.22		759,285			17.72
Granted		—			—		—			—
Vested		—			—		(3,685	)		17.84
Forfeited		(8,430	)		18.54		(8,595	)		17.89
Nonvested shares at September 30th		484,093		$	18.22		747,005		$	17.72

Performance-Based Restricted Stock — A summary of nonvested performance-based stock is presented below:

	For the Nine-Months Ended September 30, 2020					For the Nine-Months Ended September 30, 2019
	Number of Shares			Weighted Average Grant Date Fair Value		Number of Shares			Weighted Average Grant Date Fair Value
Nonvested shares at December 31st		345,432		$	16.92		287,077		$	16.87
Granted		—			—		137,557			16.96
Additional granted based on performance achievement		76,445			16.56		41,568			12.88
Vested		(184,785	)		15.87		(90,872	)		14.73
Forfeited		(3,759	)		17.23		(3,543	)		15.98
Nonvested shares at March 31st		233,333			17.63		371,787			16.99
Forfeited		(2,268	)		18.00		(14,022	)		17.11
Nonvested shares at June 30th		231,065			17.63		357,765			16.99
Additional granted based on performance achievement		—			—		800			17.50
Vested		—			—		(1,700	)		17.28
Forfeited		—			—		(100	)		13.70
Nonvested shares at September 30th		231,065		$	17.63		356,765		$	16.99

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:

Incentive Stock Option Plans

Activity of the incentive stock option plans:

	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

Outstanding at September 30, 2020, summarized by exercise price:

	Outstanding Weighted Average
Exercise Price Per Share	Number of Shares		Remaining Life (Months)		Exercise Price
$7.50		92,888		2	$	7.5
$11.32—$14.49		128,362		49		11.48
		221,250			$	9.81

Performance Incentive Stock Option Plan

Activity of the performance incentive stock option plan:

	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

All the performance incentive stock options outstanding as of September 30, 2020 have an exercise price per share of $11.49 and a remaining life of 51 months.

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Legal Proceedings

9 Months Ended

Sep. 30, 2020

Commitments And Contingencies Disclosure [Abstract]

Legal Proceedings

14. Legal Proceedings — During the reporting period, the only material developments in legal proceedings that had been reported in the Company’s Form 10-K for the year ended December 31, 2019 were as follows:

EPA FIFRA/RCRA Matter.  On November 10, 2016, the Company was served with a grand jury subpoena out of the U.S. District Court for the Southern District of Alabama in which the U.S. Department of Justice (“DoJ”) sought production of documents relating to the Company’s reimportation of depleted Thimet containers from Canada and Australia. The Company retained defense counsel and completed production of documents. Since the fourth quarter of 2018, government attorneys have interviewed several individuals (both current and former employees) who may be knowledgeable of the matter. Three more such interviews are scheduled to occur in November 2020. At this stage, however, DoJ has not made clear its intentions with regard to either its theory of the case or potential criminal enforcement. Thus, it is too early to tell whether a loss is probable or reasonably estimable. Accordingly, the Company has not recorded a loss contingency on this matter.

Harold Reed v. AMVAC et al.  During January 2017, the Company was served with two Statements of Claim that had been filed on March 29, 2016 with the Court of Queen’s Bench of Alberta, Canada (as case numbers 160600211 and 160600237) in which plaintiffs Harold Reed (an applicator) and 819596 Alberta Ltd. dba Jem Holdings (an application equipment rental company) allege physical injury and damage to equipment, respectively, arising from a fire that occurred during an application of the Company’s potato sprout inhibitor, SmartBlock, at a potato storage facility in Coaldale, Alberta on April 2, 2014. The parties have exchanged written discovery, and depositions of persons most knowledgeable took place during the first quarter of 2019. Citing the length of the cases’ pendency and the expense, in December 2019, plaintiff Reed voluntarily dismissed two actions (160600211 and 160600237) for no consideration. With respect to the remaining action, additional depositions took place during the first quarter of 2020. The parties have scheduled a voluntary mediation for December 14-15, 2020. The Company believes that the claims against it in the remaining matters are without merit and intends to defend them vigorously. At this stage in the proceedings, however, it is too early to determine whether a loss is probable or reasonably estimable; accordingly, the Company has not recorded a loss contingency.

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Recent Accounting Standards

9 Months Ended

Sep. 30, 2020

Accounting Policies [Abstract]

Recent Accounting Standards

15. Recent Accounting Standards:  

Recent Accounting Standards Adopted:

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

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

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

Accounting standards not yet adopted:

In December 2019, the FASB issued ASU no. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes,” (“ASU No. 2019-12”). The amendment removes certain exceptions to the general income tax accounting methodology including an exception for the recognition of a 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 are effective for the Company for fiscal years beginning after December 15, 2020, including interim periods within those years with early adoption permitted. The Company is evaluating the effect of adopting this new accounting guidance but does not expect adoption will have a material impact on the Condensed Consolidated Financial Statements.

In March 2020, the FASB issued ASU 2020-04 “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting,” (“ASU No. 2020-04”), which provides practical expedients for contract modifications and certain hedging relationships associated with the transition from reference rates that are expected to be discontinued. This guidance is applicable for our borrowing instruments, which use LIBOR as a reference rate, and is effective immediately, but is only available through December 31, 2022. The Company is currently evaluating the impact of ASU 2020-04; however, at the current time the Company does not expect that the adoption of this ASU will have a material impact on its Condensed Consolidated Financial Statements.

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Fair Value of Financial Instruments

9 Months Ended

Sep. 30, 2020

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

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.

The carrying amount of the Company’s financial instruments, which principally include cash and cash equivalents, short-term investments, accounts receivable, accounts payable and accrued expenses approximates fair value because of the relatively short maturity of such instruments. The carrying amount of the Company’s 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 has one equity investment classified within Level 1 of the fair value hierarchy. Please refer to Note 18 for further details regarding this investment.

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:

	For the Nine-months ended September 30, 2020
Balance, December 31, 2019	$	1,243
Payments		(1,227	)
Foreign exchange effect		(16	)
Balance, September 30, 2020	$	—

There was no activity for the three-months ended September 30, 2020.

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Accumulated Other Comprehensive Loss ("AOCL")

9 Months Ended

Sep. 30, 2020

Equity [Abstract]

Accumulated Other Comprehensive Loss ("AOCL")

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, 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	)
Balance, December 31, 2018	$	(4,507	)
FX translation		(1,769	)
Balance, March 31, 2019		(6,276	)
FX translation		657
Balance, June 30, 2019		(5,619	)
FX translation		(1,080	)
Balance, September 30, 2019	$	(6,699	)

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Equity Investments

9 Months Ended

Sep. 30, 2020

Equity Method Investments And Joint Ventures [Abstract]

Equity Investments

18. Equity Investments — The Company has the following equity investments:

Equity Method Investment

On June 27, 2017, both Amvac Netherlands BV and Huifeng Agrochemical Company, Ltd (“Huifeng”) made individual capital contributions of $950 to the Huifeng Amvac Innovation Co. Ltd (“Hong Kong Joint Venture”). As of September 30, 2020, the Company’s ownership position in the Hong Kong Joint Venture was 50%. The Company utilizes the equity method of accounting with respect to this investment. On July 7, 2017, the Hong Kong Joint Venture purchased the shares of Profeng Australia, Pty Ltd.(“Profeng”), for a total consideration of $1,900. The purchase consists of Profeng Australia, Pty Ltd Trustee and Profeng Australia Unit Trust. Both Trust and Trustee were previously owned by Huifeng via its wholly owned subsidiary Shanghai Biological Focus Center. For the three- and nine-months ended September 30, 2020, the Company recognized losses of $42 and $80, 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, 2019, the Company recognized losses of $89 and $149, respectively. The Company’s investment in this joint venture amounted to $433 and $573, respectively at September 30, 2020 and 2019.

Other Equity Investments

In February 2016, AMVAC Netherlands BV made an investment in Biological Products for Agriculture (“Bi-PA”). 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, 2020, the Company’s ownership position in Bi-PA was 15%. The equity securities are without a readily determinable fair value because these securities are privately held, not traded on any public exchanges and not an investment in a mutual fund or similar investment. As a result, the Company has elected to alternatively measure this investment at its cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. There were no observable price changes in the three- and nine-months ended September 30, 2020 and 2019. There was no impairment on the investment as of September 30, 2020 and 2019. The investment is not material and is recorded within other assets on the Condensed Consolidated Balance Sheets.

On April 1, 2020, the Company purchased 6.25 million shares, an ownership of approximately 8%, of common stock of Clean Seed Capital Group Ltd. (TSX Venture Exchange: “CSX”) for $1,190. The shares are publicly traded, have a readily determinable fair value, and are considered a Level 1 investment. The fair value of the stock amounted to $1,471 as of September 30, 2020, and the Company recorded a gain in the amount of $257 and $281 for the three- and nine-months ended September 30, 2020, included as a reduction to operating expenses on the Condensed Consolidated Financial Statements.

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Income Taxes

9 Months Ended

Sep. 30, 2020

Income Tax Disclosure [Abstract]

Income Taxes

19. Income Taxes — Income tax expense was $492 for the three months ended September 30, 2020, as compared to $1,474 for the comparable period in 2019. The effective tax rate for the quarter was 14.2%, as compared to 31.3% in the same period of the prior year.  Income tax expense was $1,852 for the nine-months ended September 30, 2020, as compared to $4,059 for the nine- months ended September 30, 2019. The effective tax rate for the nine-months ended September 30, 2020 and 2019 was 20.0% and 28.2%, respectively. The effective tax rate is based on the projected income for the full year and is subject to ongoing review and adjustment by management.

For the three-months ended September 30, 2020, the Company’s income tax expense was reduced by the discrete benefit of the vesting of stock grants and the release of an uncertain tax position. For the nine-months ended September 30, 2020, the Company benefited from three 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. Third, the Company benefited from a release of an uncertain tax position.

The Florida Department of Revenue has completed its audit of the Company’s state income tax returns for the years ended December 31, 2012 through December 31, 2013 and December 31, 2015 through December 31, 2018. No adjustments have been proposed for these periods. The Company has also been notified by the Mississippi Department of Revenue of its intent to examine the Company’s state income tax returns for the years ended December 31, 2016 through December 31, 2018. The result of Mississippi’s audit is not determinable since the audit is presently in its initial phase.

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Share Repurchase Program

9 Months Ended

Sep. 30, 2020

Equity [Abstract]

Share Repurchase Program

20. Share Repurchase Program — On November 5, 2018, pursuant to a Board of Directors resolution, the Company announced its intention to repurchase an aggregate amount of shares with a total purchase price not to exceed $20,000 of its common stock, par value $0.10 per share, in the open market, depending upon market conditions over the short to mid-term. The Shares Repurchase Program expired on March 8, 2019. During January 2019, the Company purchased 158,048 shares for a total of $2,604 at an average price of $16.48 per share. There were no such purchases during the three- and nine-months ended September 30, 2020.  

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Product and Business Acquisitions

9 Months Ended

Sep. 30, 2020

Business Combinations [Abstract]

Product and Business Acquisitions

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

On January 10, 2019, the Company completed the acquisition of all of the outstanding shares of stock of two affiliated businesses, Defensive and Agrovant, which are located in Jaboticabal in the state of Sao Paul, Brazil. At closing the Company paid cash consideration of $20,679, which was net of cash acquired of $981, deferred consideration of $3,051 including contingent consideration dependent on certain financial results for 2019, and liabilities assumed of $18,160, including liabilities of $9,111 related to income tax matters. These companies were founded in 2000 and are suppliers of crop protection products and micronutrients with focus on the fruit and vegetable markets The acquisition was accounted for as a business combination and the total asset value of $41,890 was allocated as follows: trade name $1,010, customer relationships $5,705, goodwill $22,652, working capital and fixed assets $9,139 and indemnification assets $3,384. The operating results of the acquired businesses are included in our consolidated statements of operations from the date of acquisition. The goodwill recognized is expected to be deductible for income tax purposes, subject to merging AMVAC do Brasil with Defensive and Agrovant.

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

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

Proforma operating results have not been presented because the effects of the acquisitions were not material to the Company’s Condensed Consolidated Financial Statements.

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Foreign Currency

9 Months Ended

Sep. 30, 2020

Foreign Currency [Abstract]

Foreign Currency

22. Foreign Currency – The Company incurred net foreign currency transaction losses in the amount of $303 and $817 during the three-months ended September 30, 2020 and 2019, respectively. The Company incurred net foreign currency transaction losses in the amount of $1,431 and $903 during the nine-months ended September 30, 2020 and 2019, respectively. These foreign currency transaction effects are included in operating expenses on the Condensed Consolidated Financial Statements.

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Subsequent Events

9 Months Ended

Sep. 30, 2020

Subsequent Events [Abstract]

Subsequent Events

23. Subsequent Events – The Company completed the acquisition of the Agrinos group of companies on October 2, 2020, and, separately, the acquisition of Agnova, located in Melbourne, Australia, on October 8, 2020. Both acquisitions will be accounted for as business combinations in the Company’s consolidated financial statements. The total consideration for the two acquisitions amounts to approximately $22,000, plus potential future earn-out consideration and net assets adjustments. The accounting for the two business combinations is in its early stage. Agrinos is a fully integrated biological input supplier with proprietary technology, internal manufacturing and global distribution capabilities. Agrinos’ high yield technology product platform works in conjunction with other nutritional crop inputs to increase crop yield, improve soil health and reduce the environmental footprint of traditional agricultural practices. AgNova is focused on serving customers primarily in the value-added fruit and vegetables segment of the Australian market.

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Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2020

Accounting Policies [Abstract]

Allowance for Credit Losses

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

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

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Leases (Tables)

9 Months Ended

Sep. 30, 2020

Leases [Abstract]

Schedule of Additional Information of Operating Leases

	For the Three- months ended September 30, 2020		For the Three- months ended September 30, 2019		For the Nine- months ended September 30, 2020		For the Nine- months ended September 30, 2019
Cash paid for amounts included in the    measurement of lease liabilities	$	1,399	$	1,343	$	4,177	$	4,029
ROU assets obtained in exchange for new    liabilities	$	3,393	$	1,066	$	4,895	$	3,119

Schedule of Weighted-Average Remaining Lease Term and Discount Rate Related to Operating Leases

The weighted-average remaining lease term and discount rate related to the operating leases as of September 30, 2020 were as follows:

Weighted-average remaining lease term (in years)	4.62
Weighted-average discount rate	3.81	%

Schedule of Future Minimum Lease Payments Under Non-Cancellable Operating Leases

Future minimum lease payments under non-cancellable operating leases as of September 30, 2020, were as follows:

2020 (excluding nine-months ended September 30, 2020)	$	1,364
2021		4,003
2022		2,464
2023		1,677
2024		1,065
Thereafter		2,925
Total lease payments		13,498
Less: imputed interest		1,207
Total	$	12,291
Amounts recognized in the Condensed Consolidated Balance Sheets:
Operating lease liabilities, current	$	4,312
Operating lease liabilities, long-term	$	7,979

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Revenue Recognition (Tables)

9 Months Ended

Sep. 30, 2020

Revenue From Contract With Customer [Abstract]

Summary of Selective Enterprise Information of Sales Disaggregated By Category and Geographic Region

Selective enterprise information of sales disaggregated by category and geographic region is as follows:

	For the Three-Months Ended September 30,				For the Nine-Months Ended September 30,
	2020		2019		2020		2019
Net sales:
US crop	$	48,361	$	55,072	$	148,630	$	158,068
US non-crop		18,251		18,995		37,881		42,068
Total US		66,612		74,067		186,511		200,136
International		50,827		50,817		131,445		137,528
Total net sales	$	117,439	$	124,884	$	317,956	$	337,664
Timing of revenue recognition:
Goods and services transferred at a point    in time	$	116,333	$	124,884	$	315,954	$	337,285
Goods and services transferred over time		1,106		—		2,002		379
Total net sales	$	117,439	$	124,884	$	317,956	$	337,664

Summary of Contract Balances

	September 30, 2020		December 31, 2019
Contract assets	$	3,200	$	6,091
Deferred revenue	$	5,689	$	6,826

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Property, Plant and Equipment (Tables)

9 Months Ended

Sep. 30, 2020

Property Plant And Equipment [Abstract]

Summary of Property, Plant and Equipment

Property, plant and equipment at September 30, 2020 and December 31, 2019 consists of the following:

	September 30, 2020			December 31, 2019
Land	$	2,706		$	2,706
Buildings and improvements		18,629			18,640
Machinery and equipment		119,920			116,757
Office furniture, fixtures and equipment		6,954			6,228
Automotive equipment		1,656			1,762
Construction in progress		9,316			5,263
Total gross value		159,181			151,356
Less accumulated depreciation		(99,380	)		(94,835	)
Total net value	$	59,801		$	56,521

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Inventories (Tables)

9 Months Ended

Sep. 30, 2020

Inventory Disclosure [Abstract]

Components of Inventories

The components of inventories consist of the following:

	September 30, 2020		December 31, 2019
Finished products	$	163,356	$	151,917
Raw materials		12,931		11,396
	$	176,287	$	163,313

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Segment Reporting (Tables)

9 Months Ended

Sep. 30, 2020

Segment Reporting [Abstract]

Summary of Business Sales Segmentation

Selective enterprise information is as follows:

	For the three-months ended September 30,
	2020		2019		Change			% Change
Net sales:
US crop	$	48,361	$	55,072	$	(6,711	)		-12	%
US non-crop		18,251		18,995		(744	)		-4	%
US total		66,612		74,067		(7,455	)		-10	%
International		50,827		50,817		10			0	%
Net sales	$	117,439	$	124,884	$	(7,445	)		-6	%
Gross profit:
US crop	$	20,146	$	23,710	$	(3,564	)		-15	%
US non-crop		8,758		9,860		(1,102	)		-11	%
US total		28,904		33,570		(4,666	)		-14	%
International		14,361		13,893		468			3	%
Total gross profit	$	43,265	$	47,463	$	(4,198	)		-9	%

	For the nine-months ended September 30,
	2020		2019		Change			% Change
Net sales:
US crop	$	148,630	$	158,068	$	(9,438	)		-6	%
US non-crop		37,881		42,068		(4,187	)		-10	%
US total		186,511		200,136		(13,625	)		-7	%
International		131,445		137,528		(6,083	)		-4	%
Net sales	$	317,956	$	337,664	$	(19,708	)		-6	%
Gross profit:
US crop	$	68,119	$	69,059	$	(940	)		-1	%
US non-crop		18,535		21,444		(2,909	)		-14	%
US total		86,654		90,503		(3,849	)		-4	%
International		35,298		40,315		(5,017	)		-12	%
Total gross profit	$	121,952	$	130,818	$	(8,866	)		-7	%

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Cash Dividend (Tables)

9 Months Ended

Sep. 30, 2020

Cash Dividends [Abstract]

Cash Dividend

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
March 9, 2020	March 26, 2020	April 16, 2020	$	0.020	$	586
December 9, 2019	December 26, 2019	January 9, 2020	$	0.020	$	582
September 16, 2019	October 3, 2019	October 17, 2019	$	0.020	$	582
June 10, 2019	June 28, 2019	July 12, 2019	$	0.020	$	580
March 6, 2019	March 27, 2019	April 10, 2019	$	0.020	$	580
December 10, 2018	December 27, 2018	January 10, 2019	$	0.020	$	581

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Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2020

Earnings Per Share [Abstract]

Components of Basic and Diluted Earnings Per Share

The components of basic and diluted earnings per share were as follows:

	For the Three-Months Ended September 30,				For the Nine-Months Ended September 30,
	2020		2019		2020		2019
Numerator:
Net income attributable to AVD	$	2,927	$	3,153	$	7,334	$	10,165
Denominator: (in thousands)
Weighted average shares outstanding-basic		29,501		29,057		29,401		29,013
Dilutive effect of stock options and grants		472		593		525		578
		29,973		29,650		29,926		29,591

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Indebtedness (Tables)

9 Months Ended

Sep. 30, 2020

Debt Disclosure [Abstract]

Summary of Revolving Line of Credit

The Company has a revolving line of credit that is shown as long-term debt on the Condensed Consolidated Balance Sheets at September 30, 2020 and December 31, 2019. The Company has no short-term debt as of September 30, 2020 and December 31, 2019.  Debt is summarized in the following table:

Long-term indebtedness ($000's)	September 30, 2020			December 31, 2019
Revolving line of credit	$	149,900		$	149,300
Deferred loan fees		(538	)		(534	)
Net long-term debt	$	149,362		$	148,766

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Stock Based Compensation (Tables)

9 Months Ended

Sep. 30, 2020

Stock Based Compensation, Unamortized Stock-Based Compensation and Remaining Weighted Average Period

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, 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
September 30, 2019
Restricted Stock	$	1,082	$	2,751	$	6,849		2.2
Unrestricted Stock		105		300		280		0.7
Performance-Based Restricted Stock		977		2,108		3,320		2.0
Total	$	2,164	$	5,159	$	10,449

Incentive Stock Option Plans

Incentive Stock Option Plans

Activity of the incentive stock option plans:

	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

Summarized By Exercise Price

Outstanding at September 30, 2020, summarized by exercise price:

	Outstanding Weighted Average
Exercise Price Per Share	Number of Shares		Remaining Life (Months)		Exercise Price
$7.50		92,888		2	$	7.5
$11.32—$14.49		128,362		49		11.48
		221,250			$	9.81

Performance Based Stock Options

Incentive Stock Option Plans

Activity of the performance incentive stock option plan:

	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

Restricted and Unrestricted Stock

Summary of Nonvested Shares

Restricted and Unrestricted Stock — A summary of nonvested restricted and unrestricted stock is presented below:

	For the Nine-Months Ended September 30, 2020					For the Nine-Months Ended September 30, 2019
	Number of Shares			Weighted Average Grant Date Fair Value		Number of Shares			Weighted Average Grant Date Fair Value
Nonvested shares at December 31st		719,845		$	17.67		587,210		$	17.59
Granted		4,185			18.63		297,679			17.34
Vested		(213,781	)		16.18		(105,582	)		15.21
Forfeited		(14,715	)		18.08		(6,589	)		17.69
Nonvested shares at March 31st		495,534			18.31		772,718			17.77
Granted		43,168			13.45		40,522			13.34
Vested		(37,958	)		13.88		(32,771	)		13.35
Forfeited		(8,221	)		18.64		(21,184	)		17.77
Nonvested shares at June 30th		492,523			18.22		759,285			17.72
Granted		—			—		—			—
Vested		—			—		(3,685	)		17.84
Forfeited		(8,430	)		18.54		(8,595	)		17.89
Nonvested shares at September 30th		484,093		$	18.22		747,005		$	17.72

Performance Based Restricted Stock

Summary of Nonvested Shares

Performance-Based Restricted Stock — A summary of nonvested performance-based stock is presented below:

	For the Nine-Months Ended September 30, 2020					For the Nine-Months Ended September 30, 2019
	Number of Shares			Weighted Average Grant Date Fair Value		Number of Shares			Weighted Average Grant Date Fair Value
Nonvested shares at December 31st		345,432		$	16.92		287,077		$	16.87
Granted		—			—		137,557			16.96
Additional granted based on performance achievement		76,445			16.56		41,568			12.88
Vested		(184,785	)		15.87		(90,872	)		14.73
Forfeited		(3,759	)		17.23		(3,543	)		15.98
Nonvested shares at March 31st		233,333			17.63		371,787			16.99
Forfeited		(2,268	)		18.00		(14,022	)		17.11
Nonvested shares at June 30th		231,065			17.63		357,765			16.99
Additional granted based on performance achievement		—			—		800			17.50
Vested		—			—		(1,700	)		17.28
Forfeited		—			—		(100	)		13.70
Nonvested shares at September 30th		231,065		$	17.63		356,765		$	16.99

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Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2020

Fair Value Disclosures [Abstract]

Summary of Fair Value Measuring on Recurring Basis of Contingent Consideration

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

	For the Nine-months ended September 30, 2020
Balance, December 31, 2019	$	1,243
Payments		(1,227	)
Foreign exchange effect		(16	)
Balance, September 30, 2020	$	—

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Accumulated Other Comprehensive Loss ("AOCL") (Tables)

9 Months Ended

Sep. 30, 2020

Equity [Abstract]

Beginning Balance, Annual Activity and Ending Balance of Accumulated Other Comprehensive Loss

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, 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	)
Balance, December 31, 2018	$	(4,507	)
FX translation		(1,769	)
Balance, March 31, 2019		(6,276	)
FX translation		657
Balance, June 30, 2019		(5,619	)
FX translation		(1,080	)
Balance, September 30, 2019	$	(6,699	)

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Leases - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Leases [Line Items]
Operating lease expenses	$ 1,396	$ 1,387	$ 4,188	$ 4,145
Minimum
Leases [Line Items]
Operating lease term	1 year		1 year
Maximum
Leases [Line Items]
Operating lease term	20 years		20 years

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Leases - Schedule of Additional Information of Operating Leases (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Leases [Abstract]
Cash paid for amounts included in the measurement of lease liabilities	$ 1,399	$ 1,343	$ 4,177	$ 4,029
ROU assets obtained in exchange for new liabilities	$ 3,393	$ 1,066	$ 4,895	$ 3,119

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Leases - Schedule of Weighted-Average Remaining Lease Term and Discount Rate Related to Operating Leases (Detail)	Sep. 30, 2020
Leases [Abstract]
Weighted-average remaining lease term (in years)	4 years 7 months 13 days
Weighted-average discount rate	3.81%

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Leases - Schedule of Future Minimum Lease Payments Under Non-Cancellable Operating Leases (Detail) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Leases [Abstract]
2020 (excluding nine-months ended September 30, 2020)	$ 1,364
2021	4,003
2022	2,464
2023	1,677
2024	1,065
Thereafter	2,925
Total lease payments	13,498
Less: imputed interest	1,207
Total	12,291
Amounts recognized in the Condensed Consolidated Balance Sheets:
Operating lease liabilities, current	4,312	$ 4,904
Operating lease liabilities, long-term	$ 7,979	$ 6,503

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Revenue Recognition - Additional Information (Detail) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2020 USD ($)	Sep. 30, 2020 USD ($) Segment
Revenue From Contract With Customer [Abstract]
Number of reportable business segments | Segment		1
Revenue recognized | $	$ 94	$ 2,573

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Revenue Recognition - Summary of Selective Enterprise Information of Sales Disaggregated By Category and Geographic Region (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Disaggregation Of Revenue [Line Items]
Net sales	$ 117,439	$ 124,884	$ 317,956	$ 337,664
US
Disaggregation Of Revenue [Line Items]
Net sales	66,612	74,067	186,511	200,136
US | Crop
Disaggregation Of Revenue [Line Items]
Net sales	48,361	55,072	148,630	158,068
US | Non-Crop
Disaggregation Of Revenue [Line Items]
Net sales	18,251	18,995	37,881	42,068
International
Disaggregation Of Revenue [Line Items]
Net sales	50,827	50,817	131,445	137,528
Goods and Services Transferred at a Point in Time
Disaggregation Of Revenue [Line Items]
Net sales	116,333		315,954
Goods and Services Transferred Over Time
Disaggregation Of Revenue [Line Items]
Net sales	$ 1,106		$ 2,002
Balances without adoption of ASC 606
Disaggregation Of Revenue [Line Items]
Net sales		124,884		337,664
Balances without adoption of ASC 606 | US
Disaggregation Of Revenue [Line Items]
Net sales		74,067		200,136
Balances without adoption of ASC 606 | US | Crop
Disaggregation Of Revenue [Line Items]
Net sales		55,072		158,068
Balances without adoption of ASC 606 | US | Non-Crop
Disaggregation Of Revenue [Line Items]
Net sales		18,995		42,068
Balances without adoption of ASC 606 | International
Disaggregation Of Revenue [Line Items]
Net sales		50,817		137,528
Balances without adoption of ASC 606 | Goods and Services Transferred at a Point in Time
Disaggregation Of Revenue [Line Items]
Net sales		$ 124,884		337,285
Balances without adoption of ASC 606 | Goods and Services Transferred Over Time
Disaggregation Of Revenue [Line Items]
Net sales				$ 379

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Revenue Recognition - Summary of Contract Balances (Detail) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Revenue From Contract With Customer [Abstract]
Contract assets	$ 3,200	$ 6,091
Deferred revenue	$ 5,689	$ 6,826

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Summary of Property, Plant and Equipment (Detail) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Property, Plant and Equipment [Line Items]
Total gross value	$ 159,181	$ 151,356
Less accumulated depreciation	(99,380)	(94,835)
Total net value	59,801	56,521
Land
Property, Plant and Equipment [Line Items]
Total gross value	2,706	2,706
Buildings and improvements
Property, Plant and Equipment [Line Items]
Total gross value	18,629	18,640
Machinery and equipment
Property, Plant and Equipment [Line Items]
Total gross value	119,920	116,757
Office furniture, fixtures and equipment
Property, Plant and Equipment [Line Items]
Total gross value	6,954	6,228
Automotive equipment
Property, Plant and Equipment [Line Items]
Total gross value	1,656	1,762
Construction in progress
Property, Plant and Equipment [Line Items]
Total gross value	$ 9,316	$ 5,263

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Property, Plant And Equipment - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Property Plant And Equipment [Abstract]
Depreciation expense related to property, plant and equipment	$ 1,878	$ 1,571	$ 5,235	$ 4,796
Elimination of Assets and Accumulated depreciation	$ 205	$ 8	$ 601	$ 718

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Components of Inventories (Detail) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Inventory Disclosure [Abstract]
Finished products	$ 163,356	$ 151,917
Raw materials	12,931	11,396
Inventories	$ 176,287	$ 163,313

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Segment Reporting - Additional Information (Detail)	9 Months Ended
	Sep. 30, 2020 Segment
Segment Reporting [Abstract]
Number of reportable business segments	1

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Summary of Business Sales by Product and Geographic Location (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Net sales
Net sales	$ 117,439	$ 124,884	$ 317,956	$ 337,664
Change in net sales	117,439	$ (7,445)	317,956	$ (19,708)
Percentage change in net sales		(6.00%)		(6.00%)
Gross profit:
Gross profit	43,265	$ 47,463	121,952	$ 130,818
Change in gross profit	43,265	$ (4,198)	121,952	$ (8,866)
Percentage change in gross profit		(9.00%)		(7.00%)
US
Net sales
Net sales	66,612	$ 74,067	186,511	$ 200,136
Change in net sales	66,612	$ (7,455)	186,511	$ (13,625)
Percentage change in net sales		(10.00%)		(7.00%)
Gross profit:
Gross profit	28,904	$ 33,570	86,654	$ 90,503
Change in gross profit	28,904	$ (4,666)	86,654	$ (3,849)
Percentage change in gross profit		(14.00%)		(4.00%)
US | Crop
Net sales
Net sales	48,361	$ 55,072	148,630	$ 158,068
Change in net sales	48,361	$ (6,711)	148,630	$ (9,438)
Percentage change in net sales		(12.00%)		(6.00%)
Gross profit:
Gross profit	20,146	$ 23,710	68,119	$ 69,059
Change in gross profit	20,146	$ (3,564)	68,119	$ (940)
Percentage change in gross profit		(15.00%)		(1.00%)
US | Non-Crop
Net sales
Net sales	18,251	$ 18,995	37,881	$ 42,068
Change in net sales	18,251	$ (744)	37,881	$ (4,187)
Percentage change in net sales		(4.00%)		(10.00%)
Gross profit:
Gross profit	8,758	$ 9,860	18,535	$ 21,444
Change in gross profit	8,758	$ (1,102)	18,535	$ (2,909)
Percentage change in gross profit		(11.00%)		(14.00%)
International
Net sales
Net sales	50,827	$ 50,817	131,445	$ 137,528
Change in net sales	50,827	$ 10	131,445	$ (6,083)
Percentage change in net sales		0.00%		(4.00%)
Gross profit:
Gross profit	14,361	$ 13,893	35,298	$ 40,315
Change in gross profit	$ 14,361	$ 468	$ 35,298	$ (5,017)
Percentage change in gross profit		3.00%		(12.00%)

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Cash Dividend (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended	9 Months Ended	12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Jun. 30, 2019	Sep. 30, 2019	Dec. 31, 2019	Dec. 31, 2018
Supplemental Cash Flow Elements [Abstract]
Cash dividend declaration date	Mar. 09, 2020	Mar. 06, 2019	Jun. 10, 2019	Sep. 16, 2019	Dec. 09, 2019	Dec. 10, 2018
Cash dividend record date	Mar. 26, 2020	Mar. 27, 2019	Jun. 28, 2019	Oct. 03, 2019	Dec. 26, 2019	Dec. 27, 2018
Cash dividend distributed date	Apr. 16, 2020	Apr. 10, 2019	Jul. 12, 2019	Oct. 17, 2019	Jan. 09, 2020	Jan. 10, 2019
Cash dividend per share	$ 0.020	$ 0.020	$ 0.020	$ 0.020	$ 0.020	$ 0.020
Cash dividend paid	$ 586	$ 580	$ 580	$ 582	$ 582	$ 581

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Components of Basic and Diluted Earnings Per Share (Detail) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Numerator:
Net income attributable to AVD	$ 2,927	$ 3,153	$ 7,334	$ 10,165
Denominator:
Weighted average shares outstanding-basic	29,501	29,057	29,401	29,013
Dilutive effect of stock options and grants	472	593	525	578
Weighted average shares outstanding-diluted	29,973	29,650	29,926	29,591

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Earnings Per Share - Additional Information (Detail) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Earnings Per Share [Abstract]
Stock options excluded from computation of diluted earning per share	0	0	0	0

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Indebtedness - Additional Information (Detail) - USD ($)			3 Months Ended		6 Months Ended	9 Months Ended	12 Months Ended
	Apr. 22, 2020	Jun. 30, 2017	Mar. 31, 2021	Dec. 31, 2020	Jun. 30, 2017	Sep. 30, 2020	Dec. 31, 2019	Sep. 30, 2019
Debt Instrument [Line Items]
Short term debt						$ 0	$ 0
Proposed acquisition of consideration							60,904,000
Senior Secured Revolving Line of Credit
Debt Instrument [Line Items]
Senior secured credit facility, maturity date					Jun. 30, 2022
Credit agreement, covenant description						The agreement contains two key financial covenants; namely, borrowers are required to maintain a Consolidated Funded Debt Ratio (the “CFD Ratio”) of no more than 3.25-to-1 and a Consolidated Fixed Charge Covenant Ratio of at least 1.25-to-1.
Credit agreement, variable rate description						Under the agreement, revolving loans bear interest at a variable rate based, at borrower’s election with proper notice, on either (i) LIBOR plus the “Applicable Rate” which is based upon the Consolidated Funded Debt Ratio (“Eurocurrency Rate Loan”) or (ii) the greater of (x) the Prime Rate, (y) the Federal Funds Rate plus 0.5%, and (z) the Daily One-Month LIBOR Rate plus 1.00%, plus, in the case of (x), (y) or (z) the Applicable Rate (“Alternate Base Rate Loan”)
Federal Funds Rate | Senior Secured Revolving Line of Credit
Debt Instrument [Line Items]
Credit agreement, variable rate basis		0.50%
One-Month LIBOR Rate | Senior Secured Revolving Line of Credit
Debt Instrument [Line Items]
Credit agreement, variable rate basis		1.00%
Eurocurrency Rate | Senior Secured Revolving Line of Credit
Debt Instrument [Line Items]
Credit agreement, interest payment period, description						last day of each interest period (either one, two, three or nine-months, as selected by the borrower)
Alternate Base Rate | Senior Secured Revolving Line of Credit
Debt Instrument [Line Items]
Credit agreement, interest payment period, description						last business day of each month
Credit Agreement | Senior Secured Revolving Line of Credit
Debt Instrument [Line Items]
Available borrowings capacity under credit agreement							$ 26,977,000	$ 30,435,000
Consolidated funded debt ratio	325.00%					400.00%
Consolidated funded debt thereafter ratio	325.00%
Proposed acquisition of consideration	$ 15,000,000
Business combination consideration term	90 days
Credit Agreement | Senior Secured Revolving Line of Credit | Forecast
Debt Instrument [Line Items]
Consolidated funded debt ratio			350.00%	375.00%
Maximum | Senior Secured Revolving Line of Credit
Debt Instrument [Line Items]
Available borrowings capacity under credit agreement		$ 250,000,000			$ 250,000,000
Consolidated funded debt ratio		325.00%
Maximum | Term Loan
Debt Instrument [Line Items]
Accordion feature		$ 100,000,000			$ 100,000,000
Maximum | Credit Agreement | Senior Secured Revolving Line of Credit
Debt Instrument [Line Items]
Consolidated funded debt ratio	425.00%
Proposed acquisition of consideration	$ 50,000,000
Capacity to increase borrowings under credit agreement						$ 44,500,000
Minimum
Debt Instrument [Line Items]
Consolidated fixed charge covenant ratio		125.00%
Minimum | Credit Agreement | Senior Secured Revolving Line of Credit
Debt Instrument [Line Items]
Consolidated funded debt ratio	50.00%
Proposed acquisition of consideration	$ 30,000,000

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Summary of Revolving Line of Credit (Detail) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Debt Disclosure [Abstract]
Revolving line of credit	$ 149,900	$ 149,300
Deferred loan fees	(538)	(534)
Net long-term debt	$ 149,362	$ 148,766

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Unamortized Stock-Based Compensation Expenses (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-Based Compensation	$ 1,231	$ 2,164	$ 3,776	$ 5,159
Unamortized Stock-Based Compensation	4,817	10,449	4,817	10,449
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-Based Compensation	695	1,082	$ 2,173	$ 2,751
Remaining Weighted Average Period (years)			1 year 3 months 18 days	2 years 2 months 12 days
Unamortized Stock-Based Compensation	3,030	6,849	$ 3,030	$ 6,849
Unrestricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-Based Compensation	110	105	$ 351	$ 300
Remaining Weighted Average Period (years)			8 months 12 days	8 months 12 days
Unamortized Stock-Based Compensation	293	280	$ 293	$ 280
Performance Based Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-Based Compensation	426	977	$ 1,252	$ 2,108
Remaining Weighted Average Period (years)			1 year 3 months 18 days	2 years
Unamortized Stock-Based Compensation	$ 1,494	$ 3,320	$ 1,494	$ 3,320

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Summary of Nonvested Shares (Detail) - Restricted and Unrestricted Stock - $ / shares	3 Months Ended
	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Shares, Beginning balance	492,523	495,534	719,845	759,285	772,718	587,210
Number of Shares, Granted		43,168	4,185		40,522	297,679
Number of Shares, Vested		(37,958)	(213,781)	(3,685)	(32,771)	(105,582)
Number of Shares, Forfeited	(8,430)	(8,221)	(14,715)	(8,595)	(21,184)	(6,589)
Number of Shares, Ending Balance	484,093	492,523	495,534	747,005	759,285	772,718
Weighted Average Grant-Date Fair Value, Beginning balance	$ 18.22	$ 18.31	$ 17.67	$ 17.72	$ 17.77	$ 17.59
Weighted Average Grant-Date Fair Value, Granted		13.45	18.63		13.34	17.34
Weighted Average Grant-Date Fair Value, Vested		13.88	16.18	17.84	13.35	15.21
Weighted Average Grant-Date Fair Value, Forfeited	18.54	18.64	18.08	17.89	17.77	17.69
Weighted Average Grant-Date Fair Value, Ending balance	$ 18.22	$ 18.22	$ 18.31	$ 17.72	$ 17.72	$ 17.77

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Status Summary of Nonvested Shares (Detail) - Performance Based Restricted Stock - $ / shares	3 Months Ended
	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Shares, Beginning balance	231,065	233,333	345,432	357,765	371,787	287,077
Number of Shares, Granted						137,557
Number of Share, Additional granted based on performance			76,445	800		41,568
Number of Shares, Vested			(184,785)	(1,700)		(90,872)
Number of Shares, Forfeited		(2,268)	(3,759)	(100)	(14,022)	(3,543)
Number of Shares, Ending Balance	231,065	231,065	233,333	356,765	357,765	371,787
Weighted Average Grant-Date Fair Value, Beginning balance	$ 17.63	$ 17.63	$ 16.92	$ 16.99	$ 16.99	$ 16.87
Weighted Average Grant-Date Fair Value, Granted						16.96
Weighted Average Grant-Date Fair Value, Additional granted based on performance			16.56	17.50		12.88
Weighted Average Grant-Date Fair Value, Vested			15.87	17.28		14.73
Weighted Average Grant-Date Fair Value, Forfeited		18.00	17.23	13.70	17.11	15.98
Weighted Average Grant-Date Fair Value, Ending balance	$ 17.63	$ 17.63	$ 17.63	$ 16.99	$ 16.99	$ 16.99

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Summary of Option Activity (Detail) - Incentive Stock Options - $ / shares	3 Months Ended			6 Months Ended
	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Sep. 30, 2020	Jun. 30, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Incentive Stock Option Plans, Beginning balance	307,696	316,987	332,823	316,987	332,823
Incentive Stock Option Plans, Option exercised	(86,446)	(9,291)	(15,836)
Incentive Stock Option Plans, Ending balance	221,250	307,696	316,987	221,250	307,696
Weighted Average Price Per Share, Beginning balance	$ 9.16	$ 9.16	$ 9.14	$ 9.16	$ 9.14
Weighted Average Price Per Share, Option exercised	7.58	8.27	8.83
Weighted Average Price Per Share, Ending balance	$ 9.81	$ 9.16	$ 9.16	$ 9.81	$ 9.16

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Performance Options Summarized by Exercise Price (Detail) - Performance Incentive Stock Option	9 Months Ended
	Sep. 30, 2020 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding Weighted Average, Shares | shares	221,250
Outstanding Weighted Average, Exercise Price	$ 9.81
Range One
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise Price Per Share, Lower Range	$ 7.50
Outstanding Weighted Average, Shares | shares	92,888
Outstanding Weighted Average, Remaining Life (Months)	2 months
Outstanding Weighted Average, Exercise Price	$ 7.5
Range Two
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise Price Per Share, Lower Range	11.32
Exercise Price Per Share, Upper Range	$ 14.49
Outstanding Weighted Average, Shares | shares	128,362
Outstanding Weighted Average, Remaining Life (Months)	49 months
Outstanding Weighted Average, Exercise Price	$ 11.48

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Summary of Performance option activity (Detail) - Performance Based Stock Options - $ / shares	3 Months Ended			6 Months Ended
	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Sep. 30, 2020	Jun. 30, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted Average Price Per Share, Beginning balance	$ 11.49	$ 11.49	$ 11.49	$ 11.49	$ 11.49
Weighted Average Price Per Share, Options exercised	11.49		11.49	11.49	11.49
Weighted Average Price Per Share, Ending balance	$ 11.49	$ 11.49	$ 11.49	$ 11.49	$ 11.49
Incentive Stock Option Plans, Beginning balance	117,747	117,747	120,782	117,747	120,782
Incentive Stock Option Plans, Options exercised	(3,089)		(3,035)	(3,089)	(3,035)
Incentive Stock Option Plans, Ending balance	114,658	117,747	117,747	114,658	117,747

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Fair Value of Financial Instruments - Summary of Fair Value Measuring on Recurring Basis of Contingent Consideration (Detail) $ in Thousands	9 Months Ended
	Sep. 30, 2020 USD ($)
Fair Value Disclosures [Abstract]
Balance, December 31, 2019	$ 1,243
Payments	(1,227)
Foreign exchange effect	$ (16)

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Beginning Balance, Annual Activity and Ending Balance of Foreign Currency Translation Adjustment Included as Component of Accumulated Other Comprehensive Loss (Detail) - USD ($) $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Sep. 30, 2020	Sep. 30, 2019
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance	$ 339,660	$ 334,207	$ 344,156				$ 344,156
FX translation	(83)	324	(9,063)	$ (1,080)			(8,822)	$ (2,192)
Balance	344,794	339,660	334,207				344,794
Foreign Currency Translation Adjustments
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance	(14,437)	(14,761)	(5,698)	(5,619)	$ (6,276)	$ (4,507)	(5,698)	(4,507)
FX translation	(83)	324	(9,063)	(1,080)	657	(1,769)
Balance	$ (14,520)	$ (14,437)	$ (14,761)	$ (6,699)	$ (5,619)	$ (6,276)	$ (14,520)	$ (6,699)

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Equity Investments - Additional Information (Detail) - USD ($) shares in Thousands, $ in Thousands				3 Months Ended		9 Months Ended		12 Months Ended
	Apr. 01, 2020	Jul. 07, 2017	Jun. 27, 2017	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Schedule Of Equity Method Investments [Line Items]
Investment			$ 950			$ 1,190
Joint venture, consideration								$ 60,904
Losses from equity method investment						$ (80)	$ (149)
Bi-PA
Schedule Of Equity Method Investments [Line Items]
Equity investment ownership position				15.00%		15.00%
Impairment on the investment						$ 0	0
Hong Kong JV
Schedule Of Equity Method Investments [Line Items]
Equity investment ownership position				50.00%		50.00%
Losses from equity method investment				$ 42	$ 89	$ 80	149
Investment in joint venture				433	$ 573	433	$ 573
Clean Seed Capital Group Ltd
Schedule Of Equity Method Investments [Line Items]
Joint venture, consideration	$ 1,190
Equity investment ownership position	8.00%
Losses from equity method investment				257		281
Equity Method Investment, Shares Purchased	6,250
Fair value of stock				$ 1,471		$ 1,471
Profeng Australia, Pty Ltd
Schedule Of Equity Method Investments [Line Items]
Joint venture, consideration		$ 1,900

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Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Income Tax Disclosure [Abstract]
Income tax expense	$ 492	$ 1,474	$ 1,852	$ 4,059
Federal income tax rate	14.20%	31.30%	20.00%	28.20%

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Share Repurchase Program - Additional Information (Detail) - USD ($)		1 Months Ended	3 Months Ended	9 Months Ended
	Nov. 05, 2018	Jan. 31, 2019	Sep. 30, 2020	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Equity Class Of Treasury Stock [Line Items]
Common stock, par value	$ 0.10		$ 0.10	$ 0.10		$ 0.10
Amount paid for common shares purchase		$ 2,604,000			$ 2,604,000
Common Stock
Equity Class Of Treasury Stock [Line Items]
Shares repurchase program, expiration date	Mar. 08, 2019
Number of shares purchased		158,048	0	0
Average price paid per share		$ 16.48
Common Stock | Maximum
Equity Class Of Treasury Stock [Line Items]
Number of shares intended to repurchase under repurchase program	$ 20,000

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Product and Business Acquisitions - Additional Information (Detail) $ in Thousands				12 Months Ended
	Dec. 20, 2019 USD ($)	Jul. 01, 2019 USD ($)	Jan. 10, 2019 USD ($) Business	Dec. 31, 2019 USD ($) Business	Sep. 30, 2020 USD ($)
Business Acquisition [Line Items]
Business combination, number of businesses acquired | Business				3
Business combination, cash consideration	$ 10,000			$ 37,972
Business combination, cash acquired				981
Business combination, deferred consideration paid				3,051
Business combination, liabilities assumed	1,407			19,867
Business combination, capitalized cost in asset acquisition	6			14
Business combination, total consideration				60,904
Business combination, allocation of purchase price, goodwill				46,557	$ 40,737
Business combination, allocation of purchase price, working capital and fixed assets				10,432
Business combination, allocation purchase price, indemnification assets				3,384
Product Acquisition
Business Acquisition [Line Items]
Business combination, cash consideration		$ 7,293
Business combination, liabilities assumed		300
Business combination, capitalized cost in asset acquisition		8
Business combination, allocation of purchase price, inventory		1,293
Defensive and Agrovant
Business Acquisition [Line Items]
Business combination, number of businesses acquired | Business			2
Business combination, cash consideration			$ 20,679
Business combination, cash acquired			981
Business combination, deferred consideration paid			3,051
Business combination, liabilities assumed			18,160
Business combination, total consideration			41,890
Business combination, allocation of purchase price, goodwill			22,652	22,652
Business combination, allocation of purchase price, working capital and fixed assets			9,139
Business combination, allocation purchase price, indemnification assets			3,384
Business combination, liabilities assumed, tax			9,111
Product Registrations and Product Rights
Business Acquisition [Line Items]
Business combination, allocation purchase price of intangible assets	8,171			13,279
Product Registrations and Product Rights | Product Acquisition
Business Acquisition [Line Items]
Business combination, allocation purchase price of intangible assets		5,108
Trade Names
Business Acquisition [Line Items]
Business combination, allocation purchase price of intangible assets	$ 3,242			5,452
Trade Names | Product Acquisition
Business Acquisition [Line Items]
Business combination, allocation purchase price of intangible assets		$ 1,200
Trade Names | Defensive and Agrovant
Business Acquisition [Line Items]
Business combination, allocation purchase price of intangible assets			1,010
Customer Relationships
Business Acquisition [Line Items]
Business combination, allocation purchase price of intangible assets				$ 5,705
Customer Relationships | Defensive and Agrovant
Business Acquisition [Line Items]
Business combination, allocation purchase price of intangible assets			$ 5,705

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Foreign Currency - Additional Information (Detail) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Foreign Currency [Line Items]
Net foreign currency transaction losses			$ 711,000	$ (550,000)
Operating Expenses
Foreign Currency [Line Items]
Net foreign currency transaction losses	$ 303	$ 817	$ 1,431	$ 903

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Subsequent Events - Additional Information (Detail) $ in Thousands		12 Months Ended
	Nov. 09, 2020 USD ($) Business	Dec. 31, 2019 USD ($) Business
Subsequent Event [Line Items]
Business combination, number of businesses acquired | Business		3
Business combination, total consideration | $		$ 60,904
Agrinos and Agnova | Subsequent Event
Subsequent Event [Line Items]
Business combination, number of businesses acquired | Business	2
Business combination, total consideration | $	$ 22,000