UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For The Year Ended December 31, 2022
OR
☐ 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 (I.R.S. Employer
Incorporation or organization) 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:
Trading
Title of each class Symbol(s) Name of each exchange on which registered
Common Stock, $0.10 par value AVD New York Stock Exchange

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

NONE

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
Indicate by check mark whether the registrant is not required to file reports pursuant to Section 13 or Section 15 (d) of the Act. Yes ☐ No ☒
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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over
financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing
reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any
of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).

☐Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒
 The aggregate market value of the voting stock of the registrant held by non-affiliates is $662.2 million. This figure is estimated as of June 30, 2022 at which date
the closing price of the registrant’s Common Stock on the New York Stock Exchange was $22.35 per share. For purposes of this calculation, shares owned by executive
officers, directors, and 5% stockholders known to the registrant have been deemed to be owned by affiliates. The number of shares of $0.10 par value Common Stock
outstanding as of June 30, 2022, was 30,749,184. The number of shares of $.10 par value Common Stock outstanding as of March 6, 2023 was 29,476,112.
 AMERICAN VANGUARD CORPORATION

ANNUAL REPORT ON FORM 10-K

December 31, 2022

Page No.
PART I

Item 1. Business 2

Item 1A. Risk Factors 10

Item 1B. Unresolved Staff Comments 17

Item 2. Properties 17

Item 3. Legal Proceedings 18

Item 4. Mine Safety Disclosures 18

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities 19

Item 6. Reserved 21

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 22

Item 7A. Quantitative and Qualitative Disclosures About Market Risk 31

Item 8. Financial Statements and Supplementary Data 32

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 32

Item 9A. Controls and Procedures 32

Item 9B. Other Information 34

Item 9C. Disclosure Regarding Foreign Jurisdictions That Prevent Inspections 34

PART III

Item 10. Directors, Executive Officers and Corporate Governance 35

Item 11. Executive Compensation 35

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 35

Item 13. Certain Relationships and Related Transactions, and Director Independence 35

Item 14. Principal Accountant Fees and Services 35

PART IV

Item 15. Exhibits and Financial Statement Schedule 41

Item 16. Form 10-K Summary 39

SIGNATURES AND CERTIFICATIONS 40

1
 AMERICAN VANGUARD CORPORATION

(Dollars in thousands, except per share data)

PART I

Unless otherwise indicated or the context otherwise requires, the terms “Company,” “we,” “us,” and “our” refer to American
Vanguard Corporation and its consolidated subsidiaries (“AVD”).

Forward-looking statements in this report, including without limitation, statements relating to the Company’s plans, strategies,
objectives, expectations, intentions, and adequacy of resources, are made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties.
(Refer to Part I, Item 1A, Risk Factors and Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results
of Operation, included in this Annual Report.)

All dollar amounts reflected in the consolidated financial statements are expressed in thousands, except per share data.

ITEM 1 BUSINESS
American Vanguard Corporation (“AVD”) was incorporated under the laws of the State of Delaware in January 1969 and
operates as a holding company. Unless the context otherwise requires, references to the “Company” or the “Registrant,” in this Annual
Report refer to AVD. The Company conducts its business through its principle operating subsidiaries, including AMVAC Chemical
Corporation (“AMVAC”) for its domestic business and AMVAC Netherlands BV (“AMVAC BV”) for its international business.

The operating subsidiaries in the U.S. include: AMVAC, GemChem, Inc. (“GemChem”), Envance Technologies, LLC
(“Envance”), TyraTech Inc. (“TyraTech”) and OHP Inc. (“OHP”).

Internationally, the Company operates its business through the following subsidiaries: AMVAC BV, AMVAC Hong Kong
Limited (“AMVAC Hong Kong”), AMVAC Mexico Sociedad de Responsabilidad Limitada (“AMVAC M”), AMVAC de Costa Rica
Sociedad de Responsabilidad Limitada (“AMVAC CR Srl”), AMVAC Singapore Pte, Ltd (“AMVAC Sgpr”), Grupo AgriCenter
(including the parent AgriCenter S.A. and its subsidiaries) (“AgriCenter”), AMVAC do Brasil Representácoes Ltda (“AMVAC do
Brasil”), AMVAC do Brazil 3p LTDA (“AMVAC 3p”), American Vanguard Australia PTY Ltd (“AVD Australia”), AgNova
Technologies PTY Ltd (“AgNova”), and the Agrinos group (“Agrinos”).

Based on similar economic and operational characteristics, the Company’s business is aggregated into one reportable segment.
Refer to Part II, Item 7 for selective enterprise information.

AMVAC is a California corporation that traces its history from 1945 and is a manufacturer of chemical, biological and
biorational products that develops and markets solutions for agricultural, commercial and consumer uses. It synthesizes and formulates
chemicals and ferments and extracts microbial products for crops, turf and ornamental plants, and human and animal health protection.
These products, which include insecticides, fungicides, herbicides, soil health, plant nutrition, molluscicides, growth regulators, and
soil fumigants, are marketed in liquid, powder, and granular forms. AMVAC primarily synthesizes, formulates, and distributes its own
proprietary products or custom manufactures, formulates or distributes for others. In addition, the Company has carved out a leadership
position in closed delivery systems, currently offers certain of its products in SmartBox, Lock ‘n Load and EZ Load systems, and its
most recent commercial high technology packaging system known as SIMPAS (see “Intellectual Property” below) which permits the
delivery of multiple products (from AMVAC and/or other companies) at variable rates in a single pass. AMVAC has historically
expanded its business through both the acquisition of established chemistries, the development and commercialization of new
formulations or compounds through licensing arrangements, the expansion of its global distribution network to gain broader market
access, and self-funded research and development of precision application technology. Beginning in 2021, we have commenced basic
molecular research and development of intellectual property related to our green solutions portfolio.

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 AMVAC BV is a Netherlands Corporation that was established in 2012 and is based in the Netherlands. AMVAC BV sells
product both directly and through its network of subsidiaries in various international territories.

Below is a description of the Company’s acquisition/licensing activity over the past three years.

On July 1, 2021, the Company completed the purchase of certain assets from Syngenta Crop Protection related to the herbicide
trifloxysulfuron ("Envoke"), including end-use registrations, data compensation claims, trademarks, formulation know-how, and books
and records.

On October 8, 2020, the Company’s Australian subsidiary, AVD Australia, completed the purchase of all the outstanding shares
of AgNova, an Australian company that sources, develops, and distributes specialty crop protection and production solutions for
agricultural and horticultural producers and for selected non-crop users. AgNova has an established reputation for cost-effective
product development from original concept through evaluation, registration, marketing, and sales, with new technologies flowing from
its development pipeline. AgNova is committed to the provision of innovative, value-adding solutions for agriculture and related
industries. The acquired assets included product registration, trade names and trademarks, customer lists, workforce, fixed assets, and
existing working capital.

On October 2, 2020, the Company’s principal operating subsidiary, AMVAC, completed the purchase of all the outstanding
shares of Agrinos from Agrinos AS, a Norwegian holding company, from a liquidation proceeding of that entity before a Norwegian
bankruptcy court in Oslo, Norway. In addition to the shares of Agrinos, AMVAC acquired a bank of microbial and micronutrients, as
well as about 150 pending or issued patents. Agrinos is a fully integrated biological input supplier with proprietary technology,
manufacturing facilities, and global distribution capabilities. Its 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. The acquired assets included product registration, trade names and trademarks, customer lists, workforce, fixed
assets, two factories and existing working capital.

On April 1, 2020, the Company’s principal operating subsidiary, AMVAC, acquired 6,250,000 common shares of Clean Seed
Capital Group Ltd. (Clean Seed), representing an ownership of approximately 8%. In addition, AMVAC licensed from Clean Seed
certain intellectual property rights related to Clean Seed’s SMART planting technologies.

Seasonality
The agricultural chemical industry, in general, is cyclical in nature. The demand for AVD’s products tends to be seasonal.
Seasonal usage, however, does not necessarily follow calendar dates, but more closely follows growing patterns, weather conditions,
geography, weather related pressure from pests and customer marketing programs. Further, growing seasons vary by geographical
region; thus, there is no single seasonal cycle affecting our sales. Rather, multiple seasons transpire over the course of the calendar
year.

Backlog
AVD primarily sells its products based on purchase orders. The purchase orders are typically fulfilled within a short time frame.
As a result, backlog is not considered a significant factor of, or a valid metric for, AVD’s business. The 2022 year, however, did end
with a significantly larger than normal backlog of orders, primarily resulting from supply chain challenges on one specific product line
in the last three months of 2022.

Customers
The Company’s largest three customers accounted for 18%, 13% and 8% of the Company’s sales in 2022; 17%, 14% and 8% in
2021; and 17%, 12% and 10% in 2020.

Distribution
In the U.S. AMVAC predominantly distributes its products through national distribution companies and buying groups or co-
operatives, which purchase AMVAC’s goods on a purchase order basis and, in turn, sell them to retailers/growers/end-users.

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 Internationally, AMVAC BV has sales offices or wholly owned distributors in Central America, Mexico, Brazil, Australia, and
India, and sales force executives or sales agents in several other territories. The Company’s domestic and international distributors,
agents and customers typically have long-established relationships with retailers/end-users, far-reaching logistics and transportation
capabilities, and/or customer service expertise. The markets for AVD’s products vary by region, target crop, use and type of distribution
channel. AVD’s customers are experts at addressing these various markets.

Competition
In its many marketplaces, AVD faces competition from both domestic and foreign manufacturers. Many of our competitors are
larger and have substantially greater financial and technical resources than AVD. AVD’s capacity to compete depends on its ability to
develop additional applications (including delivery systems and precision application technologies) for its current products and/or
expand its product lines and customer base. AVD competes principally based on quality, product efficacy, price, technical service and
customer support. In some cases, AVD has positioned itself in smaller niche markets, which are no longer addressed by larger
companies. In other cases, for example in the Midwest corn and soybean markets, the Company competes directly against larger
competitors.

Manufacturing
Through its six manufacturing facilities (see Item 2, Properties), AVD synthesizes many of the technical grade active ingredients
that are in its end-use products. Further, the Company formulates and packages its end-use products at four of its own facilities or at the
facilities of third-party formulators in the U.S. and at various international locations. Two of the Company’s manufacturing facilities
are biological fermentation sites, one site in the U.S., and one in Mexico, and, in addition, has a product manufacturing arrangement at
a third-party facility in India.

Raw Materials
AVD utilizes numerous companies to supply the various raw materials and components used in manufacturing its products.
Many of these materials are readily available from domestic sources. In instances where there is a single source of supply, AVD seeks
to secure its supply by either long-term (multi-year) arrangements or purchasing on long lead times from its suppliers. Further, where
the availability or cost of certain raw materials may be subject to the effect of tariffs and/or supply chain disruption, the Company may
order goods at times or in volumes out of the ordinary course to optimize pricing and to ensure supply.

Intellectual Property
AVD’s proprietary product formulations are protected, to the extent possible, as trade secrets and, to a lesser extent, by patents.
Certain of the Company’s closed delivery systems are patented, and the Company has both pending and issued patents relating to its
equipment portfolio, particularly with respect to its SIMPAS and ULTIMUS technology. In addition, the Company owns multiple
issued patents relating to both its low-impact Envance solutions as well as its Agrinos biological and microbial solutions. Further,
AVD’s trademarks bring value to its products in both domestic and foreign markets. AVD considers that, in the aggregate, its product
registrations, trademarks, licenses, customer lists and patents constitute valuable assets. While it does not regard its current business as
being materially dependent upon any single product registration, trademark, license, or patent, it believes that patents will play an
increasingly important role in its precision application technologies and green solutions portfolio.

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EPA Registrations
In the U.S., AVD’s products also receive protection afforded by the terms of the Federal Insecticide, Fungicide and Rodenticide
Act (“FIFRA”), pursuant to which it is unlawful to sell any pesticide in the U.S., unless such pesticide has first been registered by the
U.S. Environmental Protection Agency (“USEPA”). Most of the Company’s products that are sold in the U.S. are subject to USEPA
registration and periodic re-registration requirements and are registered in accordance with FIFRA. This registration by USEPA is
based, among other things, on data demonstrating that the product will not cause unreasonable adverse effects on human health or the
environment, when used according to approved label directions. In addition, each state requires a specific registration before any of
AVD’s products can be marketed or used in that state. State registrations are predominantly renewed annually with a smaller number of
registrations that are renewed on a multiple year basis. Foreign jurisdictions typically have similar registration requirements by statute.

In addition, certain of the Company’s biological products are labeled organic under the Organic Materials Review Institute
(“OMRI”), Washington State Department of Agriculture (“WSDA”) and/or California Department of Food and Agriculture (“CDFA”)
and, as such, are subject to the requirements of those certification standards, including with respect to raw materials and processes. As
is the case with synthetic products, these biological products are also subject to specific labeling requirements that may vary from state
to state.

The USEPA, state, and foreign agencies have required, and may require in the future, that certain scientific data requirements be
performed on registered products sold by AVD. AVD, on its own behalf and in joint efforts with other registrants, has furnished, and is
currently furnishing, required data relative to specific products. Under FIFRA, the federal government requires registrants to submit a
wide range of scientific data to support U.S. registrations, including in the case of adding labeled uses. This requirement results in
operating expenses in such areas as regulatory compliance, with USEPA and other such bodies in the markets in which the Company
sells its products. In addition, at times, the Company is required to generate new formulations of existing products and/or to produce
new products in order to remain compliant. The Company expensed $18,168, $16,568 and $15,613, during 2022, 2021 and 2020,
respectively, on these activities.

2022 2021 2020

Registration $ 12,118 $ 10,612 $ 10,914
Product development 6,050 5,956 4,699
Total $ 18,168 $ 16,568 $ 15,613

Environmental
During 2022, AMVAC continued activities to address environmental issues associated with its facility in Commerce, CA. (the
“Facility”). An outline of the history of those activities follows.

In 1995, the California Department of Toxic Substances Control (“DTSC”) conducted a Resource Conservation and Recovery
Act (“RCRA”) Facility Assessment (“RFA”) of those facilities having hazardous waste storage permits. In March 1997, the RFA
culminated in DTSC accepting the Facility into its Expedited Remedial Action Program. Under this program, the Facility was required
to conduct an environmental investigation and health risk assessment. This activity then took two paths: first, the RCRA permit closure
and second, the larger site characterization.

With respect to the RCRA permit closure, in 1998, AMVAC began the formal process to close its hazardous waste permit at the
Facility (which had allowed AMVAC to store hazardous waste longer than 90 days) as required by federal regulations. Formal
regulatory closure actions began in 2005 and were completed in 2008, as evidenced by DTSC’s October 1, 2008, acknowledgement of
AMVAC’s Closure Certification Report.

5
 With respect to the larger site characterization, soil and groundwater characterization activities began in December 2002 in
accordance with the Site Investigation Plan that was approved by DTSC. Additional activities were conducted from 2003 to 2014, with
oversight provided by DTSC. In 2014, the Company submitted a remedial action plan (“RAP”) to DTSC, under the provisions of
which, the Company proposed not to disturb sub-surface contaminants, but to continue monitoring, maintain the cover above affected
soil, enter into restrictive covenants regarding the potential use of the property in the future, and provide financial assurances relating
to the requirements of the RAP. In January 2017, the RAP was circulated for public comment. DTSC responded to those comments
and, on September 29, 2017, approved the RAP as submitted by the Company. The Company continues to conduct groundwater
monitoring and maintain the cover above affected soil. In 2022, the Company recorded land use covenants on certain affected parcels
and continues to work with DTSC to prepare a Remedial Action Completion Report and to obtain further clarification on financial
assurance obligations relating to the RAP. At this stage, the Company does not believe that costs to be incurred in connection with the
RAP will be material and has not recorded a loss contingency for these activities.

AMVAC is subject to numerous federal and state laws and governmental regulations concerning environmental matters and
employee health and safety at its six manufacturing facilities. The Company continually adapts its manufacturing process to the latest
environmental control standards of the various regulatory agencies. The USEPA and other federal and state agencies have the authority
to promulgate regulations that could have an impact on the Company’s operations.

AMVAC expends substantial effort to minimize the risk of discharge of materials in the environment and to comply with the
governmental regulations relating to protection of the environment. Wherever feasible, AMVAC recovers and recycles raw materials
and increases product yield in order to partially offset increasing pollution abatement costs.

The Company is committed to a long-term environmental protection program that reduces emissions of hazardous materials into
the environment, as well as to the remediation of identified existing environmental concerns.

Human Capital Resources

We believe that, beyond being essential to our operations, our people have inestimable worth independent of our business. As
outlined in our Human Rights Policy (see, www.american-vanguard.com under ESG tab), we believe that it is fundamental to our
corporate responsibility and, indeed, to our humanity, that we recognize, respect and nurture the freedom and dignity of all persons.
Accordingly, we have insinuated that belief throughout the fabric of our operations in our approach toward our employees. Indeed, the
first two core values underlying our commitment to sustainability (see, Update to Corporate Sustainability Report, www.american-
vanguard.com under ESG tab) are “Safety First” – which is a culture that begins with highly-regulated manufacturing plants, continues
into the design of science-backed products and extends into market-leading delivery systems – and “Making a Difference” – under
which, by rewarding achievement and giving our employees a voice, we attract diverse employees who want to make a difference in
their careers, in the company and in the communities that we serve.

Our Human Capital program consists of the following elements:

• Board Oversight – through our Nominating and Corporate Governance Committee (“N&CG”), our board of directors oversees
human capital-related risks and opportunities. At least annually, the N&CG Committee requires that management update
succession planning for key executives, including with respect to planning for the future with a commitment toward diversity,
equity and inclusion.
• Strategy and Development – the Company’s human capital strategy has two primary elements: giving our employees a voice and
providing them with competitive benefits (including an outstanding health benefits plan and awards of common stock to the
entire workforce). As we have covered in our Update to Corporate Sustainability Report, our Company is a destination for highly
qualified employees who are drawn to a workplace where they can make a difference. Our managerial approach is that our
functions work in a collaborative manner – cutting across departmental lines to arrive at better solutions with a high level of
efficiency. This strategy has enabled the Company to maximize retention, even in an increasingly competitive employment
market.

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• Compensation – as mentioned in our Strategy above, compensation is an essential element of our human capital approach.
During the pandemic in the midst of the so-called “Great Resignation” that affected many industries, we took measures to
incentivize our workforce to remain with us, including across-the-board wage increases in certain of our manufacturing facilities.
To the extent that our highly skilled personnel are being recruited by other companies, we endeavor to keep an open conversation
on their needs and, where appropriate, have increased their total compensation (through a combination of wage, stock and/or
vacation) to retain them.
• Voice – our management style is to solicit good ideas from employees, involve them in implementation and give them
recognition for ideas that succeed. For example, personnel from virtually any department (be it sales, technology, product
development or otherwise) can submit ideas to our Innovation Review Committee (“IRC”) for consideration and potential
funding. The IRC continues to be a source of new product ideas that has enabled us to launch several new formulations and other
solutions on an annual basis. Similarly, our Beekeeper platform is a company-only social media channel on which employees
anywhere in the world can report on their accomplishments, commendations of others and local developments.
• Diversity, Equity and Inclusion (“DEI”) – the Company continues to expand its DEI program. And we believe that this
commitment starts at the top. Three of nine members (33%) of our board of directors are female and two of nine (22%) are from
underrepresented groups (LGBTQ and Latinx). Based upon the Company’s most current EEO-1 (“Equal Employment
Opportunity”) Report, representation of African Americans in our domestic workforce exceeds the prevalence of that group in
the national population, while representation of Hispanic personnel is slightly below the national average.
• ESG at American Vanguard - at the center of our Environmental, Social Responsibility and Governance commitment is the
principle of Sustainable Agriculture, which, we believe, is broad enough to encompass a comprehensive ESG program, but clear
enough to give us direction in our outlook and purpose in our activities.

Sustainable Agriculture: We are committed to doing our best toward building a stable, affordable food supply both now and into
the future. That commitment rests upon a foundation of social responsibility and equity. In that vein, we believe that sustainable
agriculture must include these three principles:

Climate Equity – as outlined in our Climate Change Commitment, we are committed to making enterprise-wide, progressive and
measurable efforts toward helping to arrest the trend of climate change. In making decisions, taking actions and conducting our
operations we are mindful of climate equity, which holds that climate change has three primary effects – generational, regional
and individual. To that end, we believe that reducing our carbon impact and, through our products and services, enabling others
to do so will advance climate equity consistent with the 2-degree warmer world as per the Paris Agreement. We advance this
commitment on multiple fronts. We offer over 100 eco-friendly products – such as natural oils from Envance (used in Proctor &
Gamble’s Zevo product line), microbial High Yield solutions from Agrinos (that enhance soil health and promote carbon
sequestration) and tailored bionutritional products from Greenplants. In addition, our patented SIMPAS® precision application
system, which enables a grower to dispense multiple crop inputs at variable rates as per an agronomist’s prescription (“only what
is needed, precisely where it is needed”) serves to maximize yield while minimizing the environmental footprint. Further, our
Ultimus® technology enables us to measure, record and verify (“MRV”) crop input activity anywhere on the field. When linked
to a permanent ledger, such as Blockchain, Ultimus can generate an immutable record of a grower’s activity and, particularly
when used with our green solution products and SIMPAS, provides the ideal solution for the fast-growing carbon credit market.
Through these means we are endeavoring to make the planet a better place than we found it.

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 Environmental Equity – we recognize that our planet has limited resources and that what we do with them has an effect on the
habitat for both humans and other species, both for today and tomorrow. We also recognize that our activities can affect the
environment generationally, regionally and individually. We are, therefore, committed to environmental equity in our operations.
Specifically, and as more fully outlined in our sustainability reports (click on “ESG” on American-vanguard.com), we seek to
conserve finite resources such as water, land and energy while protecting the environment and enhancing biodiversity, so that
these resources are available in amounts and quality to support our neighbors and future generations. In addition, we have
committed significant resources toward supporting growers with precision application technology – like SIMPAS and Ultimus –
that enable growers to manage, optimize and trace the use of crop and soil inputs, and to use only what is needed, precisely
where it is needed. And we are mindful of those who might be disproportionately affected by what we do, such as loaders and
applicators of our products. To that end, we have been at the forefront of user-friendly, returnable, reusable closed delivery
systems (from Lock ‘n Load to SMARTBox to SIMPAS/SmartCartridges) to minimize exposure and maximize safety for those
on-the-ground.

Food Equity – Implicit in our commitment to sustainable agriculture is the principle of food equity, which has three aspects, once
again, generational, regional and individual. First, food security – we believe it is essential to ensure the long-term sustainability
and competitiveness of the Ag industry. We contribute toward food security by investing in both eco-friendly solutions that
promote long-term soil and precision application and MRV technology, like SIMPAS and Ultimus, that give growers the best
tools possible to ensure that their operations are viable, both today and tomorrow. Second, food availability – ensuring that food
gets from field-to-table. As we saw in the pandemic, the supply chain for food can be broken, and those who suffer most are
often those farthest from the fields. To that end, we support field-to-table efforts and programs to reduce food waste. Third, food
affordability – ensuring that food prices can be maintained for all, including the impoverished. We do this by giving farmers
effective tools, including precision application equipment, that optimize their costs, boost their yield, and enable them to produce
and market food at reasonable costs.

Social Responsibility – our discussion of Sustainable Agriculture would not be complete without specific mention of our
commitment to social responsibility. This concept is inherent in all forms of equity, be they climate, environmental or food
related. However, social responsibility gives us pause to consider factors of a more fundamental nature, such as human rights.
Our Human Rights Policy details our essential belief that we respect and support human rights, both within and article of our
operations. We believe that it is fundamental to our corporate responsibility and, indeed, to our humanity, that we recognize,
respect and nurture the freedom and dignity of all persons.

Under the umbrella of Sustainable Agriculture, we are committed to operating our business with a sense of mindfulness – toward
the climate, toward the environment and toward the good of humans and other species. We consider ourselves to be part of a
broader mission – one of ensuring that people can rely upon a stable, affordable food supply both now and in the future. It is a
privilege to be part of that mission. With that privilege comes responsibility, and we take that responsibility seriously.

The Company employed 822 employees as of December 31, 2022, and 804 employees as of December 31, 2021. From time to
time, due to the seasonality of its business, AVD uses temporary contract personnel to perform certain duties primarily related to
packaging of its products. None of the Company’s employees are subject to a collective bargaining agreement. The Company believes
it maintains positive relations with its employees.

Domestic operations
AMVAC is a California corporation that was incorporated under the name of Durham Chemical in August 1945. The name of the
corporation was subsequently changed to AMVAC in January 1971. As the Company’s main operating subsidiary, AMVAC owns
and/or operates the Company’s domestic manufacturing facilities. AMVAC manufactures, formulates, packages and sells its products in
the U.S. and is a wholly owned subsidiary of AVD.

GemChem is a California corporation that was incorporated in 1991 and was subsequently purchased by the Company in 1994.
GemChem sells into the pharmaceutical, cosmetic and nutritional markets and, in addition, purchases key raw materials for the
Company. GemChem is a wholly owned subsidiary of AVD.

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 2110 Davie Corporation ("DAVIE") owns real estate for corporate use only. The site is the home to the Company’s research
center and provides accommodation for the Company’s production control team. DAVIE is a wholly owned subsidiary of AVD.

On October 2, 2017, AMVAC purchased substantially all the assets of OHP, a domestic distribution company specializing in
products for the turf and ornamental market. OHP markets and sells end use products for third parties, either under third-party brands
or else as its own label products.

Envance is a Delaware Limited Liability Company that was formed in 2012 by AMVAC and joint venture partner TyraTech.
Envance and TyraTech became wholly owned subsidiaries of the Company on November 9, 2018. Envance has the rights to develop
and commercialize pesticide products and technologies based on TyraTech’s intellectual property. Products are made from natural oils
in global consumer, commercial, professional, crop protection and seed treatment markets. Envance is taking products to market
primarily by licensing its intellectual property to third parties.

International operations
AMVAC BV is a registered Dutch private limited liability company that was formed in July 2012 to manage foreign sales on
behalf of the Company. AMVAC BV is located in the Netherlands and is a wholly owned subsidiary of AMVAC Hong Kong. AMVAC
Hong Kong is a wholly owned subsidiary of AMVAC. During 2022, the international business sold the Company’s products in 45
countries, as compared to 54 countries in 2021.

AMVAC M is a wholly owned subsidiary of AMVAC BV and was originally formed in 1998 (as Quimica Amvac de Mexico
S.A. de C.V and subsequently changed to AMVAC Mexico Sociedad de Responsabilidad Limitada “AMVAC M”) to conduct the
Company’s business in Mexico.

AMVAC Sgpr is a wholly owned subsidiary of AMVAC BV and was formed on April 12, 2016. This new entity was formed to
conduct the Company’s business in the Asia Pacific and China region.

On October 27, 2017, AMVAC BV purchased 100% of the stock of AgriCenter, which owned shares in subsidiaries located in
Costa Rica, Panama, Nicaragua, Honduras, the Dominican Republic, Mexico, Guatemala, and El Salvador. These affiliated entities,
collectively known as AgriCenter, market, sell and distribute end-use chemicals, including the Company’s own products, and biological
products throughout Central America primarily for crop applications.

On January 10, 2019, AMVAC BV acquired 100% of the stock of Agrovant and Defensive, two distribution companies based in
Brazil. Agrovant and Defensive marketed and distributed crop protection products and micronutrients with focus on the fruit and
vegetable market segments throughout Brazil. On December 31, 2020, Agrovant and Defensive merged and the Company renamed the
resulting entity AMVAC 3p.

On October 8, 2020, American Vanguard Australia Pty Ltd acquired 100% of the stock of AgNova, an Australian company that
sources, develops, and distributes specialty crop protection and production solutions for agricultural and horticultural producers, and
for selected non-crop users.

On October 2, 2020, the Company’s principal operating subsidiary, AMVAC, completed the purchase of all outstanding shares of
Agrinos and certain intellectual property rights. Agrinos is a fully integrated biological input supplier with proprietary technology,
manufacturing, and global distribution capabilities and has operating entities in the U.S., Mexico, India, Brazil, China, Ukraine, and
Spain.

The Company classifies as international sales all products bearing foreign labeling shipped to a foreign destination.

2022 2021 2020

International sales $ 244,282 $ 215,439 $ 186,980
Percentage of net sales 40.1 % 38.6 % 40.8 %

9
Risk Management
The Company’s Environmental, Social and Corporate Governance (“ESG”) strategy is fully described on our website
(www.american-vanguard.com); just click on the “ESG” tab. The reader will also find the Company’s updated Corporate Sustainability
Report under the same tab.

Available Information
The Company makes available free of charge (through its website, www.american-vanguard.com), its Annual Report on Form
10-K, Quarterly Reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports as soon as reasonably
practicable after such material is electronically filed with the Securities and Exchange Commission (“SEC”). All reports filed with the
SEC are available free of charge on the SEC website, www.sec.gov. Also available free of charge on the Company’s website are the
Company’s Audit Committee, Compensation Committee, Finance Committee and Nominating and Corporate Governance Committee
Charters, the Company’s Corporate Governance Guidelines, the Company’s Code of Conduct and Ethics, and the Company’s
Employee Complaint Procedures for Accounting and Auditing Matters. Beneath the ESG tab at that site, you will also find links to the
Company’s Corporate Sustainability Reports, Climate Change Commitment and Human Rights Policy. The Company’s Internet
website and the information contained therein or incorporated therein are not intended to be incorporated into this Annual Report on
Form 10-K.

ITEM 1A. RISK FACTORS

Supply Chain/Regulatory/Geopolitical/Tax Risks
Disruption in the global supply chain is creating delays, unavailability and adverse conditions for our industry, including
significant price increases especially with regard to ocean bound shipments. Since the inception of the coronavirus pandemic, the
global supply chain has been under increased stress stemming from container shortages, a lack of domestic truck drivers and a shift in
consumer buying habits. While shipping channels normalized in 2022, freight costs rose to peak levels. Further, the lockdown practices
arising from China’s zero-COVID policy, followed by a lifting of those practices and widespread infection have resulted in factory
capacity constraints and temporary closures in that country. This disruption interrupted the supply of a certain key intermediate
ingredient for the Company’s leading corn soil insecticide during the fourth quarter of 2022, which contributed to lower-than-expected
net sales and profit margin of the Company on a consolidated basis during that reporting period. While that supplier has resumed full
operations, there is no guarantee that continued supply of raw materials and intermediates will not be impacted by further
developments relating to the pandemic in that region. Such disruption could have a material adverse effect on the Company’s
operations, financial condition or cash flows.

The regulatory climate remains challenging to the Company’s interests both domestically and internationally. Various
agencies within the U.S. (both federal and state) and foreign governments continue to exercise increased scrutiny in permitting
continued uses (or the expansion of such uses) of many chemistries, including several of the Company’s products and, in some cases,
have initiated or entertained challenges to these uses. The challenge of the regulatory climate is more pronounced in certain
geographical regions (outside the U.S.) where the Company faces resistance to the continued use of certain of its products. For
example, the European Union (“EU”) employs a hazard-based analysis when considering whether product registrations can be
maintained; under this approach, EU regulatory authorities typically do not weigh benefit against risk in their assessments and
routinely cancel products for which a safer alternative is available, notwithstanding the benefit of the cancelled product. There is no
guarantee that this regulatory climate will change in the near term or that the Company will be able to maintain or expand the uses of
many of its products in the face of such regulatory challenges.

10
 Several of the Company’s organophosphates are subject to a petition to revoke tolerances under the FFDCA which, if
granted, could result in the limitation and/or cancellation of one or more registrations for such products. Presently, several of the
Company’s organophosphate products are under registration review before the USEPA and, at the same time, subject to a petition to
revoke tolerances under the Federal Food, Drug, and Cosmetic Act ("FFDCA"). The Company continues to provide data and other
analysis to USEPA in support of its registrations and in response to that agency’s requests for clarification. However, in the recent past,
USEPA revoked tolerances for chlorpyrifos (an OP not sold by the Company) finding that food residues from that product could not be
deemed with reasonable certainty to cause no harm Consequently, the agency cancelled the registrations for chlorpyrifos. There is no
guarantee that USEPA will not make a similar finding with respect to one or more of the Company’s OPs, and that some or all uses of
the Company’s OP products could be limited or cancelled. Accordingly, the Company intends to take all action necessary to defend its
registrations. Such limitations and/or cancellations could have a material adverse effect upon the Company’s financial performance in
future reporting periods.

USEPA has issued a proposed final decision ("PFD") to cancel PCNB. In mid-2022, the USEPA issued a “proposed final
decision” (a variety of agency action heretofore unknown to registrants) to cancel the fungicide PCNB, which is registered by the
company for use on golf courses and potatoes, among other things. The basis for its PFD was the agency’s initial contention that the
product is persistent, bioaccumulative and toxic (“PBT”). The Company disagrees with the agency’s contention and believes that its
scientific support for those findings is flawed. In reaching a conclusion that a registered product is a PBT, the agency tends to focus far
less on product benefit and far more on product risk. Further, by issuing a PFD, USEPA is, in effect, skipping two steps in the
registration review process (namely, the preliminary interim decision and interim decision) during which the Company would
otherwise have more time to answer the agency’s concerns and otherwise provide data necessary to support continued registration. In
effect, then, the Company must meet a truncated schedule for defending this product, all of which is posted on a public docket, and is
doing so under a more stringent standard of review (namely, that of a deemed PBT). Since making its initial determination, the agency
has suggested that PCNB may merely have some characteristics of a PBT. There is no guarantee that the Company will succeed in
persuading USEPA not to cancel the PCNB registration. AMVAC is the sole registrant of PCNB which it manufactures at its own
facility. Loss of this product could have a material adverse negative effect on our operating results.

USEPA has issued a notice of intention to suspend DCPA, the technical ingredient of an important herbicide registered by the
company for use on high-value vegetable crops. In April 2022, USEPA issued a notice of intention to suspend ("NOITS") the
registration for DCPA based upon the company’s alleged failure to take appropriate steps in responding to an extensive data call in for
nearly 90 data studies. The NOITS came as a surprise to AMVAC, as it had been working in good faith to provide dozens of studies
over several years, some of which were so complex that it required a review process extending to five years just to define the study
protocols. The NOITS is currently pending before an administrative law judge ("ALJ"), who conducted a hearing on the matter in
January 2023 and is likely to issue an order within 90-120 days. There is no guarantee that the ALJ will rule in AMVAC’s favor and
deny the requested suspension. If AMVAC does not succeed at the NOITS hearing, there is no guarantee that USEPA will not seek to
suspend the registration of most any product for which a data call-in is pending, including one or more of AMVAC’s other products.
Further, a suspension of DCPA and/or other products could have a material, adverse effect upon the Company’s business operations and
financial performance.

Product liability judgments on glyphosate and cases involving other pesticides by domestic courts present a litigation risk to
companies in this industry. Multiple judgments have been rendered by domestic courts in product liability cases against
Bayer/Monsanto in connection with injuries allegedly arising from exposure to the herbicide product, glyphosate. The basis was
purported carcinogenicity based largely upon the findings of a certain international organization, despite significant scientific evidence
to the contrary. While the Company does not sell glyphosate, the theory of these results could put one or more of the Company’s
products at risk. There is no guarantee that one or more product liability actions would not be brought against the Company on a
similar basis, and it is possible that adverse rulings in any such actions could have a material adverse effect upon the Company’s
financial performance in future reporting periods.

The trend of passing pesticide “ban-bills” in various states could put one or more of the Company’s products at risk—In
certain states, including Maryland and New York, state and/or local legislatures have passed legislation banning the use of specific
pesticides, such as chlorpyrifos, or pesticide in general, in spite of valid registrations at USEPA and/or the equivalent state agency.
While the Company does not sell chlorpyrifos products, there is no guarantee that one or more of its registered products would not be
targeted in state or local legislation of this nature. Further, such legislation could have a material adverse effect upon the Company’s
financial performance in future reporting periods.

11
 Use of the Company’s products is subject to continuing challenges from activist groups. Use of agrochemical products,
including the Company’s products, is regularly challenged by activist groups in many jurisdictions under a multitude of federal, state
and foreign statutes, including FIFRA, the Food Quality Protection Act, Endangered Species Act (“ESA”) and the Clean Water Act, to
name a few. These challenges typically take the form of lawsuits or administrative proceedings against the USEPA and/or other federal,
state or foreign agencies, the filing of amicus briefs in pending actions, the introduction of legislation that is inimical to the Company’s
interests, and/or adverse comments made in response to public comment invited by regulatory agencies in the course of registration, re-
registration or label expansion. The most prominent of these actions include a line of cases under which environmental groups have
sought to suspend, cancel or otherwise restrict the use of pesticides that have been approved by USEPA on the ground that that agency
failed to confer with the National Marine Fishery Service and/or the Fish and Wildlife Service under the ESA with respect to biological
opinions relating to the use of such products. While industry has been active in defending registrations and proposing administrative
and legislative approaches to address serious resource issues at the affected agencies, these cases continue to be brought. It is possible
that one or more of these challenges could succeed, resulting in a material adverse effect upon one or more of the Company’s products
and consolidated financial statements.

The distribution and sale of the Company’s products are subject to governmental approvals and thereafter ongoing
governmental regulation. The Company’s products are subject to laws administered by federal, state and foreign governments,
including regulations requiring registration, approval and labeling of its products. The labeling requirements restrict the use of, and
type of, application for our products. More stringent restrictions could make our products less available, which would adversely affect
our revenues and profitability and cash flows. Substantially all the Company’s products are subject to the USEPA (and/or similar
agencies in the various territories or jurisdictions in which we do business) registration and re-registration requirements and are
registered in accordance with FIFRA or similar laws. Such registration requirements are based, among other things, on data
demonstrating that the product will not cause unreasonable adverse effects on human health or the environment when used according to
approved label directions. All states, where any of the Company’s products are used, also require registration before products, such as
the Company sells, can be marketed or used in that state. Governmental regulatory authorities have required, and may require in the
future, that certain scientific data requirements be fulfilled on the Company’s products. The Company, on its behalf and also in joint
efforts with other registrants, has furnished, and is currently furnishing certain required data relative to its products. There can be no
assurance, however, that the USEPA or similar agencies will not request that certain tests or studies be repeated, or that more stringent
legislation or requirements will not be imposed in the future. The Company can provide no assurance that any testing approvals or
registrations will be granted on a timely basis, if at all, or that its resources will be adequate to meet the costs of regulatory compliance.

The manufacturing of the Company’s products is subject to governmental regulations. The Company currently owns and
operates six manufacturing facilities which are located in Los Angeles, California; Axis, Alabama; Hannibal, Missouri; Marsing, Idaho;
Clackamas, Oregon; and Etchojoa, Mexico (the “Facilities”). The Facilities operate under the laws and regulations imposed by relevant
country, state and local authorities. The manufacturing of key ingredients for certain of the Company’s products occurs at the Facilities.
An inability to renew or maintain a license or permit, or a significant increase in the fees for such licenses or permits, could impede the
Company’s manufacture of one or more of its products and/or increase the cost of production; this, in turn, would materially and
adversely affect the Company’s ability to provide customers with its products in a timely and affordable manner.

A change in tax laws, treaties or regulations, or their interpretation or application, could have a negative impact on our
business and results of operations. We operate in many different countries and in many states within the United States, and we are
subject to changes in applicable tax laws, treaties or regulations in the jurisdictions in which we operate. A material change in these tax
laws, treaties or regulations, or their interpretation or application, could have a negative impact on our business and results of
operations. On August 16, 2022, the Inflation Reduction Act of 2022 (the "IRA") was signed into law. The IRA contains several
revisions to the Internal Revenue Code, including a 15% corporate minimum income tax for corporations with average annual adjusted
financial statement income over a three-tax-year period in excess of $1 billion and is effective for the tax years beginning after
December 31, 2022, a 1% excise tax on stock repurchases made by publicly traded U.S. corporations after December 31, 2022, and
business tax credits and incentives for the development of clean energy projects and the production of clean energy. At this time, we do
not expect the IRA will have a material impact on our consolidated financial statements. However, any future stock repurchase of our
common stock will be subject to the new excise tax law.

12
 Pandemic/Climate/Geopolitical Risks
The COVID-19 pandemic is creating risk, uncertainties and adverse conditions in many industries both here and abroad. The
Company is closely monitoring the impact of the COVID-19 pandemic on all aspects of its business, including how the pandemic is
impacting its customers, business partners, and employees. While the Company did not incur significant disruptions from the COVID-
19 pandemic during the years ended December 31, 2022, 2021, and 2020 the Company is unable to predict the impact that the
pandemic will 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 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 and cash flows will not be materially adversely
affected by the pandemic in future periods.

Climate Change may adversely affect the Company’s business. Over the course of the past several years, global climate
conditions have become increasingly inconsistent, volatile and unpredictable. Many of the regions in which the Company does
business have experienced excessive moisture, cold, drought and/or heat of an unprecedented nature at various times of the year. In
some cases, these conditions have either reduced or obviated the need for the Company’s products, whether pre-plant, at-plant, post-
emergent or at harvest. Further, the random nature of climactic change has made it increasingly difficult to forecast market demand
and, consequently, financial performance, from year-to-year. There is no guarantee that climate change will abate in the near future,
and it is possible that such change will continue to hinder the Company’s ability to forecast its sales performance with accuracy and
otherwise adversely affect the Company’s financial performance.

The Company’s business may be adversely affected by weather effects and commodity prices. Demand for many of the
Company’s products tends to vary with weather conditions and weather-related pressure from pests. Adverse weather conditions, then,
may reduce the Company’s revenues and profitability. In light of the possibility of adverse seasonal effects, there can be no assurance
that the Company will maintain sales performance at historical levels in any particular region. Similarly, demand for the Company’s
products used in row crops tends to vary with the commodity prices of those crops, for instance, corn, soybeans and cotton. These
prices may be driven in part by weather, pest pressure, the domestic farm economy and international markets (e.g., yield and pricing
from similar crops grown in Brazil). There is no guarantee that the farm economy and row crop commodity prices will maintain
sufficient strength and stability to support the Company’s products at or above historical levels.

The Russian invasion of Ukraine may expand into a broader international conflict that could adversely affect multiple
channels of commerce and markets. While business operations relating to Ukraine constitute an immaterial part of the Company’s
overall business, there is no guarantee that the current conflict will not draw military intervention from other countries or retaliation
from Russia, which, in turn, could lead to a much larger conflict. If such escalation should occur, supply chain, trade routes and
markets currently served by the Company could be adversely affected, which, in turn, could materially, adversely affect the Company’s
business operations and financial performance.

The Company may be subject to environmental liabilities. The Company is fully committed toward minimizing the risk of
discharge of materials into the environment and to complying with governmental regulations relating to protection of the environment,
its neighbors and its workforce. Nevertheless, federal and state authorities may seek fines and penalties for any violation of the various
laws and governmental regulations. In addition, while the Company continually adapts its manufacturing processes to the latest
environmental control standards of regulatory authorities, it cannot entirely eliminate the risk of accidental contamination or injury
from hazardous or regulated materials. In short, the Company may be held liable for significant damages or fines relating to any
environmental contamination, injury, or compliance violation which could have a material adverse effect on the Company’s
consolidated financial condition, statements of operations and cash flows.

13
 Acquisition/Investment Risks
Newly acquired businesses or product lines may not generate forecasted results. While the Company conducts due diligence
using a combination of internal and third-party resources and applies what it believes to be appropriate criteria for each transaction
before making acquisitions, there is no guarantee that a business or product line acquired by the Company will generate results that
meet or exceed results that were forecasted by the Company when evaluating the acquisition. There are many factors that could affect
the performance of a newly acquired business or product line. While the Company uses assumptions that are based upon due diligence
and other market information in valuing a business or product line prior to concluding an acquisition, actual results generated post-
closing could vary widely from the Company’s forecast and, as such, could have a material effect upon the Company’s overall financial
performance.

The Company’s investment in foreign businesses may pose additional risks. With the expansion of its footprint internationally,
the Company now carries on business at a material level in some jurisdictions that have a history of political, economic or currency-
related instability and customers with a potentially higher risk profile regarding accounts receivable collectability, as compared to the
Company’s legacy business. While such instability may not be present at the current time, there is no guarantee that conditions will not
change in one or more jurisdictions quickly and without notice, nor is there any guarantee that the Company would be able to recoup
its investment in such territories in light of such changes and potential losses due to political factors, economic factors, devaluation of
local currencies, or the collectability risk from customers. Adverse changes of this nature could have a material effect upon the
Company’s overall financial performance.

The Company’s investment in technology may not generate forecasted returns. The Company has had a history of investing in
technological innovation, including with respect to precision application technologies (such as SIMPAS and Ultimus), natural oil
technology and biologicals, as one of its core strategies. These investments are based upon the premise that new technology will allow
for safer handling or lower overall toxicity profile of the Company’s product portfolio, appeal to regulatory agencies and the market we
serve, gain commercial acceptance, and command a return that is sufficiently in excess of the investment. However, there is no
guarantee that a new technology will be successfully commercialized, generate a material return or maintain market appeal. Further,
many types of development costs must be expensed in the period in which they are incurred. This, in turn, tends to put downward
pressure on period profitability. There can be no assurance that these expenses will be recovered through successful long-term
commercialization of a new technology.

The Company’s growth has been fueled in part by acquisitions. Over the past few decades, the Company’s growth has been
driven by acquisitions and licensing of both established and developmental products from third parties. There is no guarantee that
acquisition targets or licensing opportunities meeting the Company’s investment criteria will remain available or will be affordable. If
such opportunities do not present themselves, then the Company may be unable to duplicate historical growth rates in future years.

The Company is dependent upon sole source suppliers for certain of its raw materials and active ingredients. There are a
limited number of suppliers of certain important raw materials used by the Company in a number of its products. Certain of these raw
materials are available solely from single sources either domestically or overseas. In connection with supply chain disruptions in 2021,
phosphorus and related compounds were increasingly difficult to source for our entire industry; ensuring a continuous supply required
extraordinary efforts both with respect to sourcing and production planning. In the last quarter of 2022, there was a temporary supply
chain shortage of one key raw material of the Company’s largest corn soil insecticide, Aztec. That said, there is no guarantee that any
of our suppliers will be willing or able to supply these products to the Company reliably, continuously and at the levels anticipated by
the Company or required by the market. If these sources prove to be unreliable and the Company is not able to supplant or otherwise
second source these products, it is possible that the Company will not achieve its projected sales which, in turn, could adversely affect
the Company's consolidated financial statements.

The Company faces competition from generic competitors that source product from countries having lower cost structures.
The Company continues to face competition from competitors around the globe that may enter the market through either offers to pay
data compensation, or similar means in foreign jurisdictions, and then subsequently source material from countries having lower cost
structures (typically India and China). These competitors typically tend to operate at thinner gross margins and, with low costs of
goods, tend to drive pricing and profitability of subject product lines downward. There is no guarantee that the Company will maintain
market share and pricing when facing such generic competitors, or that such competitors will not offer generic versions of the
Company’s products in the future.

14
 The Company’s key customers typically carry competing product lines and may be influenced by the Company’s larger
competitors. A significant portion of the Company’s products are sold to national distributors in the U.S., which also carry product
lines of competitors that are much larger than the Company. Typically, revenues from the sales of these competitor product lines and
related program incentives constitute a greater part of our distributors’ income than do revenues from sales and program incentives
arising from the Company’s product lines. With the recent consolidation among domestic distribution companies, these considerations
have become more pronounced. In light of these facts, there is no assurance that such customers will continue to market our products
aggressively or successfully, or that the Company will be able to influence such customers to continue to purchase our products instead
of those of our competitors.

Industry consolidation may threaten the Company’s position in various markets. The global agricultural chemical industry
continues to undergo significant consolidation. Many of the Company’s competitors have grown or are expected to grow through
mergers and acquisitions. As a result, these competitors will tend to be in position to realize greater economies of scale, offer more
diverse portfolios and thereby exert greater influence throughout the distribution channels. Consequently, the Company may find it
more difficult to compete in various markets. While such merger activity may generate acquisition opportunities for the Company,
there is no guarantee that the Company will benefit from such opportunities. Further, there is a risk that the Company’s future
performance may be hindered by the growth of its competitors through consolidation.

The Company is dependent on a limited number of customers, which makes it vulnerable to the continued relationship with
and financial health of those customers. Our top three customers accounted for 39% of the Company’s sales in 2022, 2021 and 2020.
The Company’s future prospects may depend on the continued business of such customers and on our continued status as a qualified
supplier to such customers. The Company cannot guarantee that these key customers will continue to buy products from us at current
levels. The loss of a key customer could have a material adverse effect on the Company’s consolidated financial statements.

General Risks
The carrying value of certain assets on the Company’s consolidated balance sheets may be subject to impairment depending
upon market trends and other factors—The Company regularly reviews the carrying value of certain assets, including long-lived
assets, inventory, fixed assets and intangibles. Depending upon the class of assets in question, the Company takes into account various
factors including, among others, sales, trends, market conditions, cash flows, profit margins and the like. Based upon this analysis,
where circumstances warrant, the Company may leave such carrying values unchanged or adjust them as appropriate. There is no
guarantee that these carrying values can be maintained indefinitely, and it is possible that one or more such assets could be subject to
impairment which, in turn, could have an adverse impact upon the Company’s consolidated financial statements.

The Company’s computing systems are subject to cyber security risks. In the course of its operations the Company relies on its
computing systems, including access to the internet, the use of third-party applications and the storage and transmission of data through
such systems. While the Company has implemented security measures to protect these systems, there is no guarantee that a third-party
will not penetrate these defenses through hacking, phishing or otherwise and either compromise, corrupt or shut down these systems.
Further, in the event of such incursion it is possible that confidential business information and private personal data could be taken.
Such an event could adversely affect both the Company’s ability to operate, its reputation with key stakeholders and its overall
financial performance.

15
 Reduced financial performance may limit the Company’s ability to borrow under its credit facility. The Company has
historically grown net sales and net income through the expansion of current product lines, the acquisition of product lines from third
parties and the acquisition of both domestic and international distributors with strong niche market positions. In order to finance such
acquisitions, the Company has drawn upon its senior credit facility. However, the Company’s borrowing capacity under the senior
credit facility depends, in part, upon its satisfaction of a negative covenant that sets a maximum ratio of borrowed debt to earnings (as
measured over the trailing 12-month period). There is no guarantee that the Company will continue to generate earnings necessary to
ensure that it has sufficient borrowing capacity to support future acquisitions or that, when necessary, the lender group will amend the
senior credit facility to provide for such borrowing capacity. Further, despite the Company’s long-standing relationship with its lenders,
in light of the uncertainties in global financial markets, there is no guarantee that the Company’s lenders will be either willing or able
to continue lending to the Company at such rates and in such amounts as may be necessary to meet the Company’s working capital
needs.

The Company is subject to taxation related risks in multiple jurisdiction. The Company is a U.S. based multinational company
subject to tax in multiple U.S. and foreign tax jurisdictions. Significant judgment is required in determining our global provision for
income taxes, deferred tax assets or liabilities and in evaluating our tax positions on a worldwide basis. While we believe our tax
positions are consistent with the tax laws in the jurisdictions in which we conduct our business, it is possible that these positions may
be contested or overturned by jurisdictional tax authorities, which may have a significant impact on our global provision for income
taxes. Tax laws are dynamic and subject to change as new laws are passed and new interpretations of the law are issued or applied. In
2017, the U.S. enacted significant tax reform, and in the long-term certain provisions of the new law may adversely affect us. In
addition, governmental tax authorities are increasingly scrutinizing the tax positions of companies. Many countries in the EU, as well
as a number of other countries and organizations such as the Organization for Economic Cooperation and Development, are actively
considering changes to existing tax laws that, if enacted, could increase our tax obligations in countries where we do business. If U.S.
or other foreign tax authorities change applicable tax laws, our overall taxes could increase, and our business, financial condition,
results of operations, or cash flows may be adversely impacted.

To the extent that capacity utilization is not fully realized at its manufacturing facilities, the Company may experience lower
profitability. While the Company endeavors continuously to maximize utilization of its manufacturing facilities, our success in these
endeavors is dependent upon many factors, including fluctuating market conditions, product life cycles, weather conditions in our key
markets, availability of raw materials, manufacturing equipment performance, retention of the workforce and regulatory constraints,
among other things. There can be no assurance that the Company will be able to maximize the utilization of its manufacturing
facilities. Underutilization of such manufacturing resources could have a material adverse effect upon the Company’s financial
performance.

The Company’s continued success depends, in part, upon a limited number of key employees. Within certain functions, the
Company relies heavily on a small number of key employees to manage ongoing operations and to perform strategic planning. In some
cases, there are no internal candidates who are qualified to succeed these key personnel in the short term. In the event that the
Company were to lose one or more key employees, there is no guarantee that Company could replace them with people having
comparable skills. Further, the loss of key personnel could adversely affect the operation of our business.

Domestic and regional inflation trends, increased interest rates and other factors could lead to the erosion of economies and
adversely impact the Company. Both the US and many other countries are experiencing inflation, which, in turn, is leading to
increased costs in multiple industry segments, including agriculture and related industries. The persistence of inflation has led central
bankers to increase interest rates within their regions. There is no guarantee that these measures will arrest the inflationary trend.
Further, these factors, taken together with reduced productivity and constraints on the labor supply could lead to recessionary periods in
the regions in which the Company does business. While the Company takes measures within its control to manage the effects of
inflation, higher interest rates and other factors, ultimately, they are outside of the Company’s control. Further, the persistence and/or
severity of one or more of them could adversely affect the financial performance and/or operations of the Company.

16
ITEM 1B. UNRESOLVED STAFF COMMENTS
None

ITEM 2 PROPERTIES
AMVAC owns in fee the Facility constituting approximately 152,000 square feet of improved land in Commerce, California
(“Commerce”) on which its West Coast manufacturing, some of its warehouse facilities and some of its manufacturing administrative
offices are located.

DAVIE owns in fee approximately 72,000 square feet of warehouse, office and laboratory space on approximately 118,000
square feet of land in Commerce, California, which is leased to AMVAC. In 2013, the Company made a significant investment in the
Glenn A. Wintemute Research Center, which houses the Company’s primary research laboratory supporting synthesis, formulation and
other new product endeavors.

In 2001, AMVAC completed the acquisition of a manufacturing facility (the “Axis Facility”) from E.I. DuPont de Nemours and
Company (“DuPont”). The Axis Facility was one of three such units located on DuPont’s 510-acre complex in Axis, Alabama. The
acquisition consisted of a long-term ground lease of 25 acres and the purchase of all improvements thereon. The facility is a multi-
purpose plant designed for synthesis of active ingredients and formulation and packaging of finished products. In 2018, FMC
Corporation acquired from DuPont a business unit, which held, among other things, the Axis Facility. Prior to expiration of the lease,
AMVAC and FMC negotiated the terms of a new lease, which has a term of 15 years and the option to renew for two, 5-year periods.

On December 28, 2007, AMVAC purchased certain manufacturing assets relating to the production of Thimet and Counter and
located at BASF’s multi-plant facility situated in Hannibal, Missouri (the “Hannibal Site”). Subject to the terms and conditions of the
Agreement, AMVAC purchased certain buildings, manufacturing equipment, office equipment, fixtures, supplies, records, raw
materials, intermediates and packaging constituting the “T/C Unit” of the Hannibal Site. The parties entered into a ground lease and a
manufacturing and shared services agreement, under which BASF continues to supply various shared services to AMVAC for the
Hannibal Site.

On March 7, 2008, AMVAC acquired from Bayer CropScience Limited Partnership, (“BCS LP”), a U.S. business of Bayer
CropScience GmbH, a facility (the “Marsing Facility”) located in Marsing, Idaho, which consists of approximately 17 acres of
improved real property. The Marsing Facility is engaged in the blending of liquid and powder raw materials and the packaging of some
of the Company’s finished goods inventory in liquid, powder and pelletized formulations which are sold both in the U.S. and
internationally. In addition, during 2019, the Company purchased approximately three acres of unimproved real estate immediately
adjacent to the Marsing Facility for potential storage and operational use in the future.

On October 2, 2020, AMVAC completed the purchase of all outstanding shares of Agrinos which is a fully integrated biological
input supplier with proprietary technology, internal manufacturing, and global distribution capabilities. Its 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. Agrinos has two primary biological production facilities, a state-of-the-art
microbial fermentation facility based in Clackamas, Oregon, and a facility in Sonora, Mexico. The Clackamas and Sonora facilities are
used as both manufacturing sites, and operational centers for global supply chain and logistics.

17
 AVD regularly adds chemical processing equipment to enhance or expand its production capabilities. The Company believes its
facilities are in good operating condition, are suitable and adequate for current needs and have flexibility to change products. Facilities
and equipment are insured against losses from fire as well as other usual business risks. The Company knows of no material defects in
title to, or encumbrances on, any of its properties except that substantially all of the Company’s assets are pledged as collateral under
the Company’s credit facility agreements with its primary lender group. For further information, refer to Note 3 of the Notes to the
Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K.

AVD owns approximately 42 acres of unimproved land in Texas for possible future expansion.

The Company leases approximately 19,953 square feet of office space located at 4695 MacArthur Court in Newport Beach,
California. In 2020, the lease was amended and was extended to expire on June 30, 2026. The premises have served as the Company’s
corporate headquarters since 1995.

The facilities occupied by GemChem, OHP, Envance and TyraTech (Envance and TyraTech are co-located), AMVAC BV,
AMVAC M, AMVAC CR Srl, AMVAC Sgpr, AgNova, Agrinos, AMVAC 3p and AgriCenter, consist of administration, development
centers (in the case of Envance and TyraTech) and/or sales offices which are leased. In addition, AMVAC 3p leases warehouse space in
Jaboticabal, Brazil.

ITEM 3 LEGAL PROCEEDINGS

Please refer to Note 5 of the Notes to the Consolidated Financial Statements in Part II, item 8 of this Annual Report on Form 10-
K.

ITEM 4 MINE SAFETY DISCLOSURES

Not Applicable.

18
 PART II

ITEM 5 MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
PURCHASES OF EQUITY SECURITIES
Market Information
Effective March 7, 2006, the Company listed its $0.10 par value common stock (“Common Stock”) on the New York Stock
Exchange under the ticker symbol AVD. From January 1998 through March 6, 2006, the Common Stock was listed on the American
Stock Exchange under the ticker symbol AVD. The Company’s Common Stock traded on The NASDAQ Stock Market under the
symbol AMGD from March 1987 through January 1998.

Holders
As of March 6, 2023, the number of stockholders of the Company’s Common Stock was approximately 12,533, which includes
beneficial owners with shares held in brokerage accounts under street name and nominees.

Dividends
The Company has issued a cash dividend in each of the last twenty-four years dating back to 1996. Cash dividends declared
during the past three years are summarized in the table below.

Dividend Total
Declaration Date Record Date Distribution Date Per Share Paid
December 12, 2022 December 28, 2022 January 11, 2023 $ 0.030 $ 851
September 12, 2022 September 23, 2022 October 7, 2022 0.025 715
June 6, 2022 June 24, 2022 July 8, 2022 0.025 742
March 14, 2022 March 25, 2022 April 15, 2022 0.025 736
Total 2022 $ 0.105 $ 3,044
December 13, 2021 December 27, 2021 January 10, 2022 $ 0.020 $ 594
September 13, 2021 October 1, 2021 October 15, 2021 0.020 594
June 8, 2021 June 24, 2021 July 8, 2021 0.020 600
March 10, 2021 March 15, 2021 April 15, 2021 0.020 596
Total 2021 $ 0.080 $ 2,384
December 7, 2020 December 23, 2020 January 6, 2021 $ 0.020 $ 592
March 9, 2020 March 26, 2020 April 16, 2020 0.020 586
Total 2020 $ 0.040 $ 1,178

Share Repurchase Programs

The Company periodically repurchases shares of its common stock under board-authorized repurchase programs through a
combination of open market transactions and accelerated share repurchase (“ASR”) arrangements.

On August 22, 2022, pursuant to a Board of Directors resolution, the Company entered into an ASR to repurchase $20,000 of its
common stock. Under the ASR agreement, the Company paid $20,000 and immediately received an initial delivery of 802,810 shares
in the amount of $16,000, based on a price of $19.93 per share, which represented 80% of the notional amount of the ASR based on the
closing price of the Company’s common stock on the New York Stock Exchange ("NYSE") on August 22, 2022. On December 14,
2022, the ASR was completed, and pursuant to the settlement terms of the ASR, the Company received an additional 131,892 shares of
its common stock. The average price paid for all of the shares delivered under the ASR was $21.40 per share.

On March 8, 2022, pursuant to a Board of Directors resolution, the Company announced its intention to repurchase an aggregate
number of up to 1,000,000 shares of its common stock under a 10b5-1 plan, par value $0.10 per share, in the open market over the
succeeding one year, subject to limitations and restrictions under applicable securities laws. During 2022, the Company purchased
734,150 shares of its common stock for a total of $14,002 at an average price of $19.07 per share.

19
 On August 30, 2021, pursuant to a Board of Directors resolution, the Company announced its intention to repurchase an
aggregate number of 300,000 shares of its common stock under a 10b5-1 plan, par value $0.10 per share, in the open market over the
succeeding six months. During 2021, the Company purchased 300,000 shares of its common stock for a total of $4,579 at an average
price of $15.26 per share.

The table below summarized the number of shares of our common stock that were repurchased during the years ended December
31, 2022 and 2021. The Company did not repurchase any of its common stock in 2020.

Total number of Average price paid

Year ended shares purchased per share Total amount paid
December 31, 2022 1,668,852 $ 20.37 $ 34,002
December 31, 2021 300,000 $ 15.26 $ 4,579

Securities Authorized for Issuance under Equity Compensation Plans

Number of securities
Number of securities to Weighted average remaining available for
be issued upon exercise exercise price of future issuance under
of outstanding options, outstanding options, equity compensation
Plan Category warrants, and rights warrants, rights plans
Equity compensation plans
approved by security holders 150,704 $ 11.49 1,524,567
Total 150,704 $ 11.49 1,524,567

Stock Performance Graph

The following graph presents a comparison of the cumulative, five-year total return for the Company, the Russell 2000 Stock
Index, and a peer group (S&P 400 Specialty Chemical Industry). The graph assumes that the beginning values of the investments in the
Company, the Russell 2000 Stock Index, and the S&P 400 Specialty Chemical Index (a peer group of companies) each was $100 on
December 31, 2017. All calculations assume reinvestment of dividends. Returns over the indicated period should not be considered
indicative of future returns.

20
ITEM 6 RESERVED

Not applicable

21
ITEM 7 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
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. Generally, “may,” “could,” “will,” “would,” “expect,” “believe,” “estimate,” “anticipate,”
“intend,” “continue” and similar words identify forward-looking statements. Forward-looking statements appearing in this Report are
made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are
based on our current expectations and are subject to risks and uncertainties that can cause 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. Security and Exchange Commission (“SEC”). It is not possible to foresee or identify all such factors. We urge you to
consider these factors carefully in evaluating the forward-looking statements contained in this Report.

The discussion and analysis of our financial condition and results of operations for 2022, as compared to 2021 appears below. As
permitted by SEC rules, we have omitted the discussion and analysis of our financial condition and results of operations for 2021
compared to 2020. See Item 7, “Management’s Discussions and Analysis of Financial Condition and Results of Operations”, in our
Annual Report on Form 10-K for the year ended December 31, 2021, for this discussion.

MANAGEMENT OVERVIEW

The Company’s performance in 2022 was stronger in most all respects as compared to the prior year. The domestic agricultural
economy continued its second upcycle year following a multi-year downcycle that concluded at the end of 2020. With that trend,
commodity prices for many crops, including corn, soybeans and cotton, rose and remained strong. Further, with greater confidence in
the post-pandemic agricultural and chemical market and improved availability within the shipping industry, growers and distribution
relaxed their procurement patterns from a mode of ordering months in advance of the planting season (in 2021) to more of a just-in-
time approach (in 2022). While the Company had enjoyed a strong growth trajectory for the first three quarters of 2022, that curve
flattened during the fourth quarter, as temporary supply chain disruptions (described below) prevented the production and sale of the
Company’s leading corn soil insecticide during that period. It is also worth noting that, while shipping services had become more
readily available during 2022, the cost of freight rose to its highest point since the start of the pandemic. We expect that those costs will
recede to more normalized levels in 2023.

In summary, net sales for 2022 rose 9%, as compared to 2021 (to $609,615 from $557,676), and net income was up about 43%
(to $26,618 from $18,587). Operating income rose 31% (to $40,651 in 2022 from $30,946 in 2021). With respect to our businesses, net
sales of our U.S. Crop rose by 9%, while gross profit rose 22%. In the U.S., non-Crop net sales declined by 2%, while gross profit
dropped by 6%. Our international business increased net sales by 13% and gross profit by 9%.

As a result of the sales dynamics just described, gross profit during 2022 was approximately 13% above that of 2021 ($241,352
vs. $214,047). Further, gross profit when expressed as a percentage of sales was 40%, as compared to 38% in the prior year. Operating
expenses increased by 10% ending at $200,701 as compared to $183,272 in 2021. Further, operating expenses (which include outbound
freight) as a percent of net sales remained flat at 33%, as compared to 2021.

Despite numerous increases in the interest rate by the Federal Open Market Committee over the course of the year, our interest
expense remained approximately even with that of the prior year ($3,954 in 2022 vs. $3,687 in 2021). This performance was due to
timing of our borrowings, continued strong cash generated from increased sales, continued focus on working capital management and a
high level of participation by customers in our prepayment programs. For 2022, our effective tax rate decreased (at 23.8% in 2022 vs.
30.1% in 2021). Our net income was $27,404 in 2022, as compared to $18,587 in 2021, which represents an increase of about 47%.

22
 When considering the consolidated balance sheets, long-term debt decreased to $51,477 as of December 31, 2022, from $52,240
as of December 31, 2021. The decreased level of debt was driven by the Company’s strong cash management during 2022, including a
continued strong response from the Company’s largest customers to our early-pay programs, offset by the decision to repurchase
$34,002 of the Company's stock. The Company’s liquidity position improved to $200,372 as of December 31, 2022, as compared to
$178,705 as of December 31, 2021.

Results of Operations
2022 Compared with 2021:

2022 2021 $ Change % Change

Net sales:
U.S. crop $ 288,624 $ 263,632 $ 24,992 9%
U.S. non-crop 76,709 78,605 (1,896 ) -2%
Total U.S. 365,333 342,237 23,096 7%
International 244,282 215,439 28,843 13%
Total net sales $ 609,615 $ 557,676 $ 51,939 9%
Cost of sales:
U.S. crop $ 156,115 $ 154,064 $ 2,051 1%
U.S. non-crop 41,452 41,162 290 1%
Total U.S. 197,567 195,226 2,341 1%
International 170,696 148,403 22,293 15%
Total cost of sales $ 368,263 $ 343,629 $ 24,634 7%
Gross profit:
U.S. crop $ 132,509 $ 109,568 $ 22,941 21%
U.S. non-crop 35,257 37,443 (2,186 ) -6%
Total U.S. 167,766 147,011 20,755 14%
International 73,586 67,036 6,550 10%
Total gross profit $ 241,352 $ 214,047 $ 27,305 13%
Gross margin:
U.S. crop 46% 42%
U.S. non-crop 46% 48%
Total U.S. 46% 43%
International 30% 31%
Total gross margin 40% 38%

Net sales of our U.S. crop business were about 9% higher than those of the prior year ($288,624 vs. $263,632). With the second
full year of high commodity prices and a strong farm economy, the Company experienced strong demand for its crop protection
products. The pacing of procurement practices in the distribution channel, however, relaxed from advance purchasing in 2021 (for the
2021-2022 season) to more of a just-in-time approach in 2022 (for the 2022-2023 season). The Company experienced strong sales of
its corn products, particularly soil insecticides and post-emergent herbicides (Impact, Impact Core, Sinate, and Impact Z)
notwithstanding a 20% drop in sales of our leading corn soil insecticide, Aztec, which we were unable to make and sell in the fourth
quarter of 2022, due to unavailability of a key intermediate from both a domestic supplier (which experienced capacity constraints) and
a China-based supplier (which experienced widespread COVID infection followed by a temporary shutdown). With respect to our
cotton products, strong commodity prices stimulated demand for our Bidrin foliar insecticides and Folex harvest defoliant, which
together generated sales that were up 33%, as compared to those of 2021. We also recorded stronger sales of our soil fumigants (for use
on a wide range of fruit and vegetables), Thimet (for use of peanuts and sugar beets), our herbicide, Dacthal (for use on high-value
crops, including onions) and our soybean herbicide products.

Cost of sales within the domestic crop business was flat compared to 2021, on sales that increased 9%, gross profit improved by
21% ($132,509 in 2022 vs. $109,568 in 2021), and gross margin was 46% of sales as compared to 42% last year.

23
 Net sales of our U.S. non-crop business were down about 2% ($76,709 in 2022 vs. $78,605 in 2021). This decline was driven
primarily by the nationwide consumer pest-control market, which dropped by 30% year-over-year, due to US workers returning to the
workplace post-COVID. Net sales from our OHP nursery and ornamental business were about even with those of 2021, as US
consumer demand for plant materials remained level. During 2022, we posted relatively flat Dibrom® mosquito adulticide sales. By
contrast, sales of insecticides for commercial applications rose during the year, as the professional pest-control market began to regain
its footing. Finally, TyraTech/Envance extended the scope of a license agreement in 2021 and benefited from a one-time non-
refundable up-front fee.

Cost of sales in our U.S. non-crop business remained flat with the prior year and gross profit decreased by 6% (to $35,257 in
2022 from $37,443 in 2021), and gross margin percentage decreased to 46% in 2022, as compared to 48% in 2021.

Net sales of our international businesses increased by 13% in 2022 ($244,282 vs. $215,439 in 2021). During 2022, our
international group continued to successfully integrate two important new businesses, AgNova in Australia, and Agrinos biological
products in more than a half dozen countries worldwide. We enjoyed strong demand for our soil fumigants, particularly in Mexico and
Australia, and experienced increased sales of our Counter nematicide in Brazil. Further, we experienced higher sales in our AgriCenter
Central American distribution business and achieved a record $100 million in net sales from our LATAM region. Expansion of our
Green Solutions product portfolio has significantly enhanced our penetration of international markets and drawn us much closer to
many key customers.

Cost of sales in our international business increased by 15% (to $170,696 in 2022 from $148,403 in 2021) on sales that increased
13%, gross profit rose 10% from the prior year (to $73,586 in 2022 from $67,036 in 2021), and gross margin percentage ended at 30%
in 2022, as compared to 31% in 2021.

Operating expenses (which include outbound freight costs) increased by $17,429 in 2022, to $200,701 or 33% of net sales, as
compared to $183,272 or 33% in 2021. The differences in operating expenses by department are as follows:

2022 2021 Change % Change

Selling $ 52,512 $ 49,409 $ 3,103 6%
General and administrative:
Other 51,671 47,971 3,700 8%
Proxy contest activities 1,785 — 1,785 100 %
Amortization 13,953 13,713 240 2%
Research, product development and regulatory 31,816 28,855 2,961 10 %
Freight, delivery and warehousing 48,964 43,324 5,640 13 %
Total Operating Expenses $ 200,701 $ 183,272 $ 17,429 10 %

• Selling expenses increased by 6% to $52,512 for the year ended December 31, 2022, as compared to $49,409 in 2021. This
included increased costs associated with travel expenses (as the in-person business interactions with customers continue to
increase), inflation related increased wages, increased spending on advertising and promoting the Company’s products, and the
cost of commissions associated with sales growth in Brazil. These increased costs were somewhat offset by beneficial exchange
rate movement in key currencies.
• General and administrative expenses increased by 8% to $51,671 for the year ended December 31, 2022, as compared to $47,971
in 2021. The main drivers were the net increase in short-term and long-term incentive compensation, as a result of improved
financial performance and increased bad debt expenses related to our businesses in Central America. In addition, wages, travel
expense and other administrative costs increased in support of our growing business.
• The Company spent $1,785 in fees associated with our Proxy defense activities; there were no such fees in the comparative
period of the prior year.
• Research, product development and regulatory expenses increased by 10% to $31,816 in 2022, as compared to $28,855 in 2021.
The main drivers were increases in our product development costs, primarily resulting from increased international regulatory
activities and work in support of our SIMPAS/ULTIMUS technology platform. In addition, wages and travel expenses increased
in support of our growing business.

24
• Freight, delivery and warehousing costs for the year ended December 31, 2022, increased by 13% (on sales up 9%) to $48,964,
as compared to $43,324 in 2021. This is mainly due to increases in freight rates, and changes in volume, product mix and
customer destinations. When expressed as a percentage of sales, freight costs remained essentially flat at 8% of net sales.

In July 2020, the Company made a strategic investment in Clean Seed Inc. (Clean Seed) in the amount of $1,190. The investment
is carried at fair value on the Company’s consolidated balance sheets. The Company recorded losses to Clean Seed’s fair value in the
amount of $732 and $391 in 2022 and 2021, respectively.

In February 2016, AMVAC BV made an equity investment of $3,283 in Biological Products for Agriculture (“Bi-PA”). The
Company has elected to measure the investment at cost less impairment, if any, and to record an increase or decrease for changes
resulting from observable price changes in orderly transactions for the identical or a similar investment of Bi-PA. The Company
recorded an impairment in the amount of $399 during the year ended December 31, 2021. No impairment was recorded for the year
ended December 31, 2022.

Net interest expense was $3,954 in 2022, as compared to $3,687 in 2021. Interest costs are summarized in the following table:

2022 2021
Average Interest Interest Average Interest Interest
Average Indebtedness and Interest expense Debt Expense Rate Debt Expense Rate
Working capital revolver $ 134,158 $ 3,921 2.9 %$ 142,238 $ 3,414 2.4 %
Interest income — (167 ) — — (65 ) —
Amortization of deferred loan fees — 261 — — 367 —
Amortization of other deferred
liabilities — 28 — — (4 ) —
Other interest expense — 228 — — 218 —
Subtotal 134,158 4,271 3.2 % 142,238 3,930 2.8 %
Capitalized interest — (317 ) — — (243 ) —
Total $ 134,158 $ 3,954 2.9 %$ 142,238 $ 3,687 2.6 %

The Company’s average debt for the year ended December 31, 2022, was $134,158, as compared to $142,238 for the year ended
December 31, 2021. The decrease in average debt can be attributed to improved cash management, partially offset by the Company
repurchasing $34,002 of its common stock. On a gross basis, after adjustments related to capitalized interest and expenses related to the
amortization of deferred liabilities, our effective interest rate on our working capital revolver increased to 2.9%, as compared to 2.4%
in 2021 due to increases in the LIBOR rate driven by U.S. fiscal policy.

Our provision for income taxes for 2022 was $8,561, as compared to $8,166 for 2021. The effective tax rate for 2022 was 23.8%,
as compared to 30.1% in 2021. The decrease of the effective tax rate in 2022, as compared to 2021, was primarily due to a non-cash
charge related to a valuation allowance associated with a deferred tax asset in Brazil established in 2021.

The Company is subject to U.S. federal income tax as well as to income tax in multiple state jurisdictions. Federal income tax
returns of the Company are subject to Internal Revenue Service (“IRS”) examination for the 2019 through 2021 tax years. State income
tax returns are subject to examination for the 2018 through 2021 tax years. The Company has other foreign income tax returns subject
to examination.

Net income was $27,404 or $0.94 per basic share and $0.92 per diluted share in 2022, as compared to $18,587 or $0.62 per basic
share and $0.61 per diluted share in 2021.

25
Liquidity and Capital Resources
The Company generated $57,105 of cash from operating activities during the year ended December 31, 2022, as compared to
$86,361 in the prior year. Included in the $57,105 are net income of $27,404, plus non-cash depreciation, amortization of intangibles
and other long-term assets in the amount of $25,711, loss on disposal of property, plant and equipment of $268, amortization of
deferred loan fees and discounted liabilities of $289, provision for bad debts in the amount of $1,171, provision for inventory
obsolescence in the amount of $340, and revisions of contingent consideration of $610. In addition, stock-based compensation of
$5,684, change in fair value of investments of $732, change in value of deferred income taxes of $5,278, change in liabilities for
certain tax positions or unrecognized tax benefits of $1,441, non-cash lease expense of $68 and net foreign currency adjustment of $29,
resulted in net cash provided by operating activities (prior to changes in assets and liabilities associated with operations, net of business
combinations) of $55,529 as compared to $50,989 for the same period of 2021.

The Company’s working capital increased by $3,027 at December 31, 2022, as comparted to the prior year ($121,966 compared
to $118,939). Accounts receivables increased by $6,447, inventories increased by $29,560, tax receivable, net increased by $4,910, and
prepaid expenses increased by $3,082. Deferred revenue increased by $47,551, driven by customer decisions to make early payments
in return for early cash incentive programs. Our accounts payable balances increased by $1,704, program accruals decreased by $2,449
and other payables and accrued expenses increased by $90. The Company also paid $1,321 in contingent consideration (in addition to
$68 included in cash used in financing activities).

With regard to our program accrual, the year-over-year change is primarily driven by the mix of product line sales and customers
in 2022, as compared to the prior year. The Company accrues programs in line with the growing season upon which specific products
are targeted. Most of our programs relate to domestic sales. Typically, domestic crops have a growing season that ends on August 31st
of each year. During 2022, the Company made accruals in the amount of $111,649 and made payments in the amount of $114,151.
During 2021, the Company made accruals in the amount of $99,482 and made payments in the amount of $81,678.

Because the estimate for the program accrual is a material component of the Company’s overall financial performance, the
Company believes that the process it uses is critical in setting the accrual at the appropriate level. The Company’s process for
developing the estimate involves a detailed review of each related transaction and includes the input of a significant number of senior
employees to enable the Company to set the accrual using consistently applied judgements, subject to the particular circumstances of
any individual transaction.

Cash used for investing activities amounted to $14,470 for the year ended December 31, 2022, as compared to $20,042 in 2021.
In 2022, the Company spent $13,261 on capital expenditures primarily focused on continuing to invest in manufacturing infrastructure
to expand production efficiency and capabilities. In addition, the Company made a payment of $1,000 to Clean Seed to amend a license
agreement under which royalty-bearing license rights were converted to fully paid-up, royalty-free, perpetual license rights, and spent
$293 on registrations and patents. In 2021, the Company spent $10,524 in business and product acquisitions including intangible
assets, goodwill, working capital and fixed assets as well as patent application costs, and $9,518 on capital expenditures primarily
focused on our manufacturing facilities.

During the year ended December 31, 2022, financing activities used $38,260, as compared to $65,871 during the prior year. This
included making repayments of $254,000 and borrowings of $253,000 on the Company’s senior credit facility during the year ended
December 31, 2022. During 2021, the Company made repayments in the amount of $186,569 and borrowings of $131,000. During
2022, the Company paid dividends to stockholders amounting to $2,787, as compared to $2,382 in 2021. Furthermore, the Company
paid contingent consideration in the amount of $68 (in addition to the $1,321 included in cash provided by operating activities) and
$1,301 for the years ended December 31, 2022 and 2021, respectively. Finally, the Company used $34,002 to repurchase common
stock in 2022, as compared to $4,579 in 2021.

The Company has long-term debt as of December 31, 2022 and 2021 relating to a revolving line of credit as summarized in the
following table:

Indebtedness 2022 2021

Revolving line of credit $ 52,300 $ 53,300
Debt issuance costs (823 ) (1,060 )
Total indebtedness $ 51,477 $ 52,240

26
 The Company’s main bank is Bank of the West, a wholly owned subsidiary of BMO Financial Group. Bank of the West has been
the Company’s bank for more than 30 years and is the syndication manager for the Company’s loans.

The Company and certain of its affiliates are parties to a revolving line of credit agreement entitled the “Third Amended and
Restated Loan and Security Agreement” dated as of August 5, 2021 (the “Credit Agreement”), which is a senior secured lending
facility among AMVAC, the Company’s principal operating subsidiary, as Borrower Agent (including the Company and AMVAC BV),
as Borrowers, on the one hand, and a group of commercial lenders led by Bank of the West as administrative agent, documentation
agent, syndication agent, collateral agent and sole lead arranger, on the other hand. The Credit Agreement consists of a line of credit of
up to $275,000, an accordion feature of up to $150,000, a letter of credit and swingline sub-facility (each having limits of $25,000) and
has a maturity date of August 5, 2026. The Credit Agreement amends and restates the previous credit facility, which had a maturity date
of June 30, 2022. With respect to key financial covenants, the Credit Agreement contains two: namely, borrowers are required to
maintain a Total Leverage (“TL”) Ratio of no more than 3.5-to-1, during the first three years, stepping down to 3.25-to-1 as of
September 30, 2024, and a Fixed Charge Coverage Ratio of at least 1.25-to-1. In addition, to the extent that it completes acquisitions
totaling $15 million or more in any 90-day period, AMVAC may step-up the TL Ratio by 0.5-to-1, not to exceed 4.00-to-1, for the next
three full consecutive quarters. Acquisitions below $50 million do not require Agent consent.

The Company’s borrowing capacity varies with its financial performance, measured in terms of Consolidated EBITDA as
defined in the Credit Agreement, for the trailing twelve-month period. Under the Credit Agreement, revolving loans bear interest at a
variable rate based, at borrower’s election with proper notice, on either (i) LIBOR plus the “Applicable Margin” which is based upon
the Total Leverage (“TL”) Ratio (“LIBOR Revolver Loan”) or (ii) the greater of (x) the Prime Rate, (y) the Federal Funds Rate plus
0.5%, and (z) the Daily One-Month LIBOR Rate plus 1.00%, plus, in the case of (x), (y) or (z) the Applicable Margin (“Adjusted Base
Rate Revolver Loan”). Interest payments for LIBOR Revolver Loans are payable on the last day of each interest period (either one-,
three- or six- months, as selected by the borrower) and the maturity date, while interest payments for Adjusted Base Rate Revolver
Loans are payable on the last business day of each month and the maturity date. The interest rate on December 31, 2022, was 5.67%.

At December 31, 2022, according to the terms of the Credit Agreement, as amended, and based on our performance against the
most restrictive covenant listed above, the Company had the capacity to increase its borrowings by up to $200,372. This compares to
an available borrowing capacity of $178,705 as of December 31, 2021. The level of borrowing capacity is driven by three factors: (1)
our financial performance, as measured in EBITDA for trailing twelve-month period, (2) the inclusion of proforma EBITDA related to
acquisitions completed during the preceding twelve months and (3) the leverage covenant (being the number of times EBITDA the
Company may borrow under its credit facility agreement).

The Company and the Lenders entered into an amendment to the Credit Agreement (“Amendment”), effective March 9, 2023,
whereby LIBOR was replaced by SOFR with a credit spread adjustment of 10.0 bps for all SOFR periods. The revolving loans now
bear interest at a variable rate based at borrower’s election with proper notice, on either (i) SOFR plus 0.1% per annum and the
“Applicable Margin” or (ii) the greater of (x) the Prime Rate, (y) the Federal Funds Rate plus 0.5%, and (z) the Daily One-Month
SOFR Rate plus 1.10%, plus, in the case of (x), (y) or (z) the Applicable Margin (“Adjusted Base Rate Revolver Loan”). In addition,
the Amendment waived the minimum fixed charge coverage ratio (“FCCR”) requirement for the year ended December 31, 2022, and
adjusted the terms of the FCCR for the periods ending March 31, 2023 and June 30, 2023. The Company was in compliance with all
other debt covenants as of December 31, 2022.

We believe that the combination of our cash flows from future operations, current cash on hand and the availability under the
Company’s credit facility will be sufficient to meet our working capital and capital expenditure requirements and will provide us with
adequate liquidity to meet our anticipated operating needs for at least the next 12 months from the issuance of the Annual Report.
Although operating activities are expected to provide cash, to the extent of growth in the future, our operating and investing activities
will use cash and, consequently, this growth may require us to access some or all of the availability under the credit facility. It is also
possible that additional sources of finance may be necessary to support additional growth.

Substantially all the Company’s assets are pledged as collateral under the Credit Agreement, as amended.

27
Recently Issued Accounting Guidance
Please refer to Note 3 of the Notes to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report for recently
issued and adopted accounting standards.

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

Assets and liabilities outside the U.S. are located in regions where we have subsidiaries or joint ventures: Central America, South
America, North America, Europe, Asia, and Australia. Our investments in foreign subsidiaries and joint ventures with a functional
currency other than the U.S. dollar are generally considered long-term. Accordingly, we do not hedge these net investments.

Inflation
Management believes inflation has had minimal impact on the Company's operations during the past two years. The Company is
working diligently with its critical raw material suppliers to control inflationary pressures, conducting contract negotiations with focus
on the following: reducing or delaying price increases due to higher environmental costs from suppliers mainly in China and India,
managing the tariff impacts by sourcing and leveraging alternate geographies where possible, and lastly, monitoring strengths of the
U.S. dollar vs other currencies in order to secure benefits and balance tariff effects. The Company recognizes there is long-term
pressure on demand for raw materials in the developing world and is utilizing its expertise to minimize inflationary pressure. The
Company has been able to push back on many of the proposed price increases for actives and intermediates that are shipped to our U.S.
factories, to either avoid, minimize or forestall them. In response to inflation and other factors that have increased the cost of goods and
services, the Company has successfully implemented price increases on its products.

CRITICAL ACCOUNTING ESTIMATES

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 consolidated financial statements in the period
that revisions are determined to be necessary. Actual results may differ from these estimates under different outcomes or conditions.

The Company’s critical accounting policies and estimates include:

Revenue Recognition — Revenues from sales are recognized at the time control is transferred to the customer. This is typically
the case when the customer has made the fixed commitment to purchase the goods, the products are shipped per the customer’s
instructions, the sales price can be identified, and collection is probable. The Company has adopted procedures to ensure that revenues
are recognized when earned. The procedures are subject to management’s review and from time-to-time certain revenues are excluded
until it is clear that the title has passed and there is no further recourse to the Company. We also have some arrangements whereby
revenues are recognized over time for certain products that are deemed to have no alternative use accompanied by an enforceable right
to payment for performance completed to date. From time-to-time, the Company may offer a program to eligible customers, in good
standing, that provides extended payment terms on a portion of the sales on selected products. The Company analyzes these extended
payment programs in connection with its revenue recognition policy to ensure all revenue recognition criteria are satisfied at the time
of sale. The Company also earns royalty income from its licensing arrangements which qualify as functional licenses rather than
symbolic licenses. Upon signing a new licensing agreement, we typically receive up-front fees, which are generally characterized as
non-refundable royalties. These fees are recognized as revenue upon the execution of the license agreements. Minimum royalty fees are
recognized once the Company has an enforceable right for payment. Sales-based royalty fees are typically

28
recognized when the sales occur. We calculate and accrue estimated royalties based on the agreement terms and correspondence with
the licensees regarding actual sales.

Accrued Program Costs— The Company offers various discounts to customers based on the volume purchased within a defined
period, other pricing adjustments, some grower volume incentives or other key performance indicator driven payments made to
distributors, retailers or growers, usually 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 U.S. crop and non-crop chemicals marketplaces. These discount Programs
represent variable consideration. Revenues from sales are recorded at the net sales price, which is the transaction price, less an estimate
of variable consideration. Variable consideration includes amounts expected to be paid to its customers using the expected value
method. Each quarter 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 will adjust 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.

Allowance for Doubtful Accounts or Current Expected 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, other
receivables and contract assets based on historical information combined with current conditions that may affect a customer’s ability to
pay and reasonable and supportable forecasts. In most instances, the Company’s policy is to write-off trade receivables when they are
deemed uncollectible. The vast majority of the Company's trade receivables, other receivables and contract assets 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 is based primarily on geographical location, type of customer and aging.

Inventories — The Company values its inventories at lower of cost or net realizable value. Cost is determined by the first-in,
first-out (“FIFO”) or average cost method, including, as appropriate, raw materials, labor, factory overhead and subcontracting
services. The Company writes down its inventory to the net realizable value following assessments of slow moving and obsolete
inventory and other annual adjustments to ensure that our standard costs continue to closely reflect actual manufacturing cost.

Leases —The Company has operating leases for warehouses, manufacturing facilities, offices, cars, railcars and certain
equipment. The Company recognizes operating lease right-of-use (ROU) assets and lease liabilities for all leases. The Company
measures ROU assets throughout the lease term at the carrying amount of the lease liability, plus initial direct costs, plus (minus) any
prepaid (accrued) lease payments, less the unamortized balance of lease incentives received. The lease liabilities are measured at the
present value of the unpaid lease payments at the lease commencement date. Leases that include both lease and non-lease components
are accounted for as a single lease component for each asset class, except for warehouses. The minimum payments under operating
leases are recognized on a straight-line basis over the lease term in the consolidated statements of operations. Operating lease expenses
related to variable lease payments are recognized in cost of sales or as operating expenses in a manner consistent with the nature of the
underlying lease and as the events, activities, or circumstances in the lease agreement occur. Leases with a term of less than 12 months
are not recognized on the consolidated balance sheets, and the related lease expenses are recognized in the consolidated statements of
operations on a straight-line basis over the lease term. The accounting for leases requires management to exercise judgment and make
estimates in determining the applicable discount rate, effective lease term and payments due under a lease. Most of our leases do not
provide an implicit interest rate, nor is it available to us from our lessors. As an alternative, we use our estimated incremental
borrowing rate, which is derived from information available at the lease commencement date, including publicly available data, in
determining the present value of lease payments. We also estimated the fair value of the lease and non-lease components for some of
our warehouse leases based on market data and cost data. 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. The operating leases of the Company do not contain major
restrictions or covenants such as those relating to dividends or additional financial obligations. Finance leases are immaterial to the
consolidated financial statements.

29
 Intangible Assets—The primary identifiable intangible assets of the Company relate to assets associated with its product and
business acquisitions. All of the Company’s intangible assets have finite lives and are amortized. The estimated useful life of an
identifiable intangible asset is based upon a number of factors including the effects of demand, competition, and expected changes in
the marketability of the Company’s products.

Business Combinations—The Company uses its best estimates and assumptions to assign fair value to the tangible and
intangible assets acquired and liabilities assumed at the acquisition date. The Company’s estimates are inherently uncertain and subject
to refinement. During the measurement period, which may be up to one year from the acquisition date, the Company may record
adjustments to the fair value of these tangible and intangible assets acquired and liabilities assumed, with the corresponding offset to
goodwill or an adjustment to the gain from a bargain purchase. In addition, uncertain tax positions and tax-related valuation allowances
are initially recorded in connection with a business combination as of the acquisition date. The Company continues to collect
information and reevaluates these estimates and assumptions quarterly and records any adjustments to the Company’s preliminary
estimates to goodwill provided that the Company is within the measurement period. Upon the conclusion of the measurement period or
final determination of the fair value of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are
recorded to the Company’s consolidated statement of operations.

From time to time, certain of our acquisition agreements include contingent earn-out arrangements, which are generally based on
the achievement of future income thresholds. The fair values of these earn-out arrangements are included as part of the purchase price
of the acquired companies on their respective acquisition dates. For each transaction, we estimate the fair value of contingent earn-out
payments as part of the initial purchase price and record the estimated fair value of contingent consideration as a liability on the
consolidated balance sheets.

We review and re-assess the estimated fair value of contingent consideration on a quarterly basis until the contingent period ends,
and the updated fair value could be materially different from the initial estimates or prior quarterly amounts. Changes in the estimated
fair value of our contingent earn-out liabilities are reported in operating results.

Asset Acquisitions—If an acquisition of an asset or group of assets does not meet the definition of a business, the transaction is
accounted for as an asset acquisition rather than a business combination. An asset acquisition does not result in the recognition of
goodwill and transaction costs are capitalized as part of the cost of the asset or group of assets acquired. The Company uses its best
estimates and assumptions to assign fair value to the tangible and intangible assets acquired and liabilities assumed at the acquisition
date. The acquisitions costs are allocated to the assets acquired on a relative fair value basis. From time to time, certain of our
acquisition agreements include contingent earn-out arrangements, which are recognized only when the contingency is resolved, and the
consideration is paid or becomes payable.

Impairment—The carrying values of long-lived assets other than goodwill are reviewed for impairment annually and/or
whenever events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. In such
circumstances, the Company evaluates recoverability of an asset group by comparing the carrying value to the future undiscounted
cash flows that it expects to generate from the asset group. If the comparison indicates that the carrying value of an asset group is not
recoverable, measurement of the impairment loss is based on the fair value of the asset.

The Company reviews goodwill for impairment utilizing either a qualitative or quantitative assessment. If the Company decides
that it is appropriate to perform a qualitative assessment and concludes that the fair value of a reporting unit more likely than not
exceeds its carrying value, no further evaluation is necessary. If the Company performs a quantitative assessment, the Company
compares the fair value of a reporting unit with its carrying values and recognizes an impairment charge for the amount that the
carrying amount exceeds the reporting unit’s fair value. The Company annually tests goodwill for impairment at the beginning of the
fourth quarter, or earlier if triggering events occur.

30
 Fair Value of Financial Instruments—The accounting standard for fair value measurements provides a framework for
measuring fair value and requires expanded disclosures regarding fair value measurements. Fair value is defined as the price that would
be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous market in an
orderly transaction between market participants on the measurement date. This accounting standard established a fair value hierarchy,
which requires an entity to maximize the use of observable inputs, where available. The following summarizes the three levels of
inputs required:
• 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, long-term investments, accounts payable and accrued expenses approximate fair value because of the
relatively short maturity of such instruments. The carrying amount of the Company’s short-term and long-term borrowings, which are
considered Level 2 liabilities, approximates fair value based upon current rates and terms available to the Company for similar debt.

We measure our contingent earn-out liabilities in connection with acquisitions at fair value on a recurring basis using significant
unobservable inputs classified within Level 3 of the fair value hierarchy. We 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.

Income taxes—Income tax expense, deferred tax assets and liabilities, and liabilities for unrecognized tax benefits reflect
management’s best estimate of current and future taxes to be paid. The Company is subject to income taxes in the U.S. and several
foreign jurisdictions. The Company assessed the ability to realize deferred tax assets and determined that based on the available
evidence, including a history of taxable income and estimates of future taxable income, it is more likely than not that the net deferred
tax assets relating to the Company’s operations in Brazil, Spain, and Ukraine will not be realized and a full valuation allowance was
recorded in those jurisdictions. Significant management judgment is required in determining the provision for income taxes and
deferred tax assets and liabilities. In the event that actual results differ from these estimates, we will adjust these estimates in future
periods, which may result in a change in the effective tax rate in a future period. Accounting for income taxes involves uncertainty and
judgment on how to interpret and apply tax laws and regulations within the Company’s annual tax filings. Such uncertainties from time
to time may result in a tax position that may be challenged and overturned by a tax authority in the future, which could result in
additional tax liability, interest charges and possibly penalties. The Company classifies interest and penalties as a component of income
tax expense.

ITEM 7A 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 group of lenders is evidenced by a line of credit with a variable rate of interest, which fluctuates
with changes in the lender’s reference rate (SOFR). An increase or decrease in interest rates by 25 bps would impact the Company’s net
income by approximately $350 based on the Company’s historical average borrowing in 2022 and 2021. The Company may use
derivative financial instruments for trading purposes to protect trading performance from exchange rate fluctuations on material
contracts, though there are no such instruments in place during any periods presented in this Annual Report.

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

31
 As part of an on-going process of assessing business risk, management has identified risk factors which are disclosed in Item 1A.
Risk Factors of this Report on Form 10-K.

ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The Financial Statements and Supplementary Data required by this item are listed at Part IV, Item 15, Exhibits, and Financial
Statement Schedule.

ITEM 9 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL

DISCLOSURE
None.

ITEM 9A CONTROLS AND PROCEDURES

Disclosure Controls and Procedures
Management, under the supervision of the Company’s Chief Executive Officer and Chief Financial Officer, periodically evaluate
the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)). Based upon this evaluation, as of December 31, 2022, the Chief Executive Officer and the Chief Financial
Officer have concluded that these disclosure controls and procedures are effective in ensuring that the information required to be
disclosed in reports filed under the Securities Exchange Act of 1934 is (i) recorded, processed, summarized and reported on a timely
basis, and (ii) accumulated and communicated to the Company’s management, including the Chief Executive Officer and Chief
Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Management’s Report on Internal Control over Financial Reporting

Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting as
defined in Rules 13a-15(f) and 15d-15(f) of the Securities Exchange Act of 1934 for the Company. The Company’s internal control
system over financial reporting is designed to provide reasonable assurance to management and the Board of Directors as to the fair,
reliable and timely preparation and presentation of consolidated financial statements in accordance with accounting principles
generally accepted in the United States of America filed with the SEC.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore,
even processes determined to be effective can provide only reasonable assurance with respect to the financial statement preparation and
presentation.

Management conducted an evaluation of the Company’s internal controls over financial reporting based on a framework set forth
by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control—Integrated Framework (2013). This
evaluation included review of the documentation of controls, evaluation of the design effectiveness of controls, testing of the
effectiveness of controls and a conclusion on the evaluation. Based on this evaluation, management believes that as of December 31,
2022, the Company’s internal control over financial reporting is effective.

BDO USA, LLP, the independent registered public accounting firm that audited the consolidated financial statements included in
the Annual Report on Form 10-K, was engaged to attest to and report on the effectiveness of AVD’s internal control over financial
reporting as of December 31, 2022. Their report is included herein.

Changes in Internal Control over Financial Reporting

There were no changes in internal control over financial reporting during the fourth quarter of the year ended December 31,
2022, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial
reporting.

32
Report of Independent Registered Public Accounting Firm

Stockholders and Board of Directors

American Vanguard Corporation
Newport Beach, California

Opinion on Internal Control over Financial Reporting

We have audited American Vanguard Corporation’s (the “Company’s”) internal control over financial reporting as of December 31,
2022, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations
of the Treadway Commission (the “COSO criteria”). In our opinion, the Company maintained, in all material respects, effective internal
control over financial reporting as of December 31, 2022, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(“PCAOB”), the consolidated balance sheets of the Company as of December 31, 2022 and 2021, the related consolidated statements of
operations and comprehensive income, stockholders’ equity, and cash flows for each of the three years in the period ended December 31,
2022, and the related notes and financial statement schedule listed in the accompanying index and our report dated March 16, 2023 expressed
an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of
the effectiveness of internal control over financial reporting, included in the accompanying Item 9A, Management’s Report on Internal Control
over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our
audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in
accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the
PCAOB.

We conducted our audit of internal control over financial reporting in accordance with the standards of the PCAOB. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was
maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the
risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed
risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit
provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of
records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide
reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally
accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of
management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections
of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ BDO USA, LLP

Costa Mesa, California

March 16, 2023

33
 AMERICAN VANGUARD CORPORATION

ITEM 9B OTHER INFORMATION

None.

ITEM 9C DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not applicable.

34
 AMERICAN VANGUARD CORPORATION

PART III

ITEM 10 DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information set forth under the captions “Executive Officers of the Company,” “Election of Directors,” “Information about
the Board of Directors and Committees of the Board” and “Transactions with Management and Others—Section 16(a) Beneficial
Ownership Reporting Compliance” in our definitive proxy statement (the “Proxy Statement”) for our Annual Meeting of Stockholders
to be held on June 7, 2023, which will be filed with the SEC within 120 days of the end of our fiscal year ended December 31, 2022, is
incorporated herein by reference.

ITEM 11 EXECUTIVE COMPENSATION

Except as specifically provided, the information set forth under the captions “Compensation of Executive Officers” and
“Information about the Board of Directors and Committees of the Board—Compensation of Directors” in the Proxy Statement is
incorporated herein by reference.

ITEM 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS
The disclosure contained in Part II, Item 5 under “Equity Compensation Plan Information” is incorporated herein by reference.
Information regarding security ownership of certain beneficial owners and management is incorporated by reference to the information
set forth under the caption “Security Ownership of Certain Beneficial Owners and Management” in the Proxy Statement.

ITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information set forth under the captions “Transactions with Management and Others” and “Information about the Board of
Directors and Committees of the Board” in the Proxy Statement is incorporated herein by reference.

ITEM 14 PRINCIPAL ACCOUNTANT FEES AND SERVICES

Information regarding principal accountant fees and services is incorporated herein by reference to the information set forth
under the caption “Ratification of the Selection of Independent Registered Public Accounting Firm—Relationship of the Company
with Independent Registered Public Accounting Firm” in the Proxy Statement.

35
 AMERICAN VANGUARD CORPORATION

EXHIBIT INDEX

ITEM 15

Exhibit
Number Description of Exhibit

3.1 Amended and Restated Certificate of Incorporation of American Vanguard Corporation (filed as Exhibit 3.1 to the
Company’s Form 10-K for the year ended December 31, 2003, which was filed on March 30, 2004, with the Securities
Exchange Commission and incorporated herein by reference).

3.2 Certificate of Amendment of Amended and Restated Certificate of Incorporation of American Vanguard Corporation
(filed as Exhibit 3.2 to the Company’s Form 10-Q/A for the period ended June 30, 2004, which was filed with the
Securities Exchange Commission on February 23, 2005, and incorporated herein by reference).

3.3 Amended and Restated Bylaws of American Vanguard Corporation dated as of June 5, 2014 (filed as Exhibit 99.1 to the
Company’s Form 8-K, which was filed with the Securities Exchange Commission on June 7, 2014, and incorporated
herein by reference.)

4 Form of Indenture (filed as Exhibit 4.4 to the Company’s Registration Statement on Form S-3 (File No. 333-122981)
and incorporated herein by reference).

10.1 American Vanguard Corporation Employee Stock Purchase Plan (filed as Appendix A to the Company’s Proxy
Statement filed with the Securities and Exchange Commission on April 23, 2018, and incorporated herein by reference).

10.2 American Vanguard Corporation Amended and Restated Stock Incentive Plan as of June 8, 2016 (filed as Appendix A to
the Company’s Proxy Statement filed with the Securities and Exchange Commission on April 25, 2016, and incorporated
herein by reference).

10.3 Form of Incentive Stock Option Agreement under the American Vanguard Corporation Fourth Amended and Restated
Stock Incentive Plan, (filed as Exhibit 10.3 with the Company’s Annual Report on Form 10-K for the period ended
December 31, 2004, which was filed with the Securities and Exchange Commission on March 16, 2005, and
incorporated herein by reference).

10.4 Form of Non-Qualified Stock Option Agreement under the American Vanguard Corporation Fourth Amended and
Restated Stock Incentive Plan, (filed as Exhibit 10.4 with the Company’s Annual Report on Form 10-K for the period
ended December 31, 2004, which was filed with the Securities and Exchange Commission on March 16, 2005, and
incorporated herein by reference).

10.5 Employment Agreement between American Vanguard Corporation and Eric G. Wintemute dated January 15, 2008 (filed
as Exhibit 10.5 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2007, which was filed
with the Securities Exchange Commission on March 17, 2008, and incorporated herein by reference).

10.8 Form of Change of Control Severance Agreement, dated effective as of January 1, 2004, between American Vanguard
Corporation and its executive and senior officers (filed as Exhibit 10.2 to the Company’s Form 10-Q for the period
ended March 31, 2004, which was filed with the Securities Exchange Commission on May 17, 2004, and incorporated
herein by reference.)

10.9 Form of Amendment of Change of Control Severance Agreement, dated effective as of July 11, 2008, between American
Vanguard Corporation and named executive officers and senior officers (filed as Exhibit 99.1 to the Company’s Form 8-
K, which was filed on July 11, 2008, with the Securities and Exchange Commission and incorporated herein by
reference).

10.10 Form of Indemnification Agreement between American Vanguard Corporation and its Directors (as filed as Exhibit 10.7
to the Company’s Annual Report on Form 10-K for the period ended December 31, 2004, which was filed with the
Securities and Exchange Commission on March 16, 2005, and incorporated herein by reference).

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 AMERICAN VANGUARD CORPORATION

Exhibit
Number Description of Exhibit

10.11 Description of Compensatory Arrangements Applicable to Non-Employee Directors (as set forth on page 34 of the
Company’s Proxy Statement which was filed with the Securities and Exchange Commission on April 22, 2019, and
incorporated herein by reference).

10.12 Form of Restricted Stock Agreement between American Vanguard Corporation and named executive officers dated as of
November 13, 2020. Filed as exhibit 10.12 to the Company’s Form 10-K for the period ended December 31, 2020.

10.14 Form of Performance-Based Restricted Stock Units Award Agreement between American Vanguard Corporation and
named executive officer dated as of November 13, 2020. Filed as exhibit 10.14 to the Company’s Form 10-K for the
period ended December 31, 2020.

10.15 Form of American Vanguard Corporation Amended and Restated Stock Incentive Plan TSR-Based Restricted Stock
Units Award Agreement dated June 6, 2013 (filed as Exhibit 10.15 to the Company’s 10-K, which was filed with the
Securities Exchange Commission on February 28, 2014, and incorporated herein by reference).

10.16 Form of American Vanguard Corporation Amended and Restated Stock Incentive Plan Performance-Based Restricted
Stock Units Award Agreement dated June 6, 2013 (filed as Exhibit 10.16 to the Company’s 10-K, which was filed with
the Securities Exchange Commission on February 28, 2014, and incorporated herein by reference).

10.17 Third Amendment to Second Amended and Restated Credit Agreement dated as of June 30, 2017 among AMVAC and
certain affiliates on the other hand, and a group of commercial lenders led by Bank of the West as agent, swing line
lender, and letter of credit issuer, on the other hand (filed as Exhibit 10.1 to the Company’s Form 8-K, which was filed
with the Securities Exchange Commission on July 6, 2017 and is incorporated herein by reference).

10.18 Fourth Amendment to Second Amended and Restated Credit Agreement dated as of November 27, 2019, among
AMVAC and certain affiliates, on the one hand, and a group of commercial lenders led by Bank of the West as agent,
swing line lender, and letter of credit issuer, on the other hand (filed with the Company’s Form 10-K for the period
ended December 31, 2019). Third Amended and Restated Loan and Security Agreement dated August 5, 2021 by and
among American Vanguard Corporation et al. and Bank of the West et al. a form of which was filed with the SEC as an
exhibit to the Company’s Form 8-K on or about August 10, 2021.

21 List of Subsidiaries of the Company.*

23 Consent of BDO USA, LLP, Independent Registered Public Accounting Firm.*

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 Certifications Pursuant to 18 U.S.C. Section 1350 as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.*

101 The following materials from American Vanguard Corp’s Annual Report on Form 10-K for the year ended December 31,
2022, formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Balance Sheets; (ii) Consolidated
Statements of Operations; (iii) Consolidated Statements of Stockholders’ Equity; (iv) Consolidated Statements of
Comprehensive Income; (v) Consolidated Statements of Cash Flows; and (vi) Notes to Consolidated Financial
Statements, tagged as blocks of text.*

101.INS Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL
tags are embedded within the Inline XBRL document.

101.SCH Inline XBRL Taxonomy Extension Schema Document

101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document

37
 AMERICAN VANGUARD CORPORATION

Exhibit
Number Description of Exhibit

101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document

104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

* Filed herewith.

(c) Valuation and Qualifying Accounts:

38
 AMERICAN VANGUARD CORPORATION

Schedule II-A—Valuation and Qualifying Accounts

Allowance for Doubtful Accounts Receivable (in thousands)

Additions
Balance at Charged to Foreign Balance at
Beginning of Costs and exchange End of
Fiscal Year Ended Period Expenses impact Period
December 31, 2022 $ 3,938 1,171 27 $ 5,136
December 31, 2021 $ 3,297 649 (8 ) $ 3,938
December 31, 2020 $ 2,300 1,002 (5 ) $ 3,297

Inventory Reserve (in thousands)

Balance at Balance at
Beginning of End of
Fiscal Year Ended Period Additions Deductions Period
December 31, 2022 $ 2,675 1,230 (890 ) $ 3,015
December 31, 2021 $ 2,868 948 (1,141 ) $ 2,675
December 31, 2020 $ 2,130 1,120 (382 ) $ 2,868

Deferred Tax Assets Valuation Allowance (in thousands)

Additions
Balance at Charged to Balance at
Other
Comprehensi
Beginning of Costs and ve (Gain) End of
Fiscal Year Ended Period Expenses Loss Deductions Period
December 31, 2022 $ 4,262 $ 628 $ (788 ) $ (249 ) $ 3,853
December 31, 2021 $ — $ 3,304 $ 958 $ — $ 4,262

See accompanying report of independent registered public accounting firm on page 42 of this annual report.

ITEM 16 FORM 10-K SUMMARY

None.

39
 AMERICAN VANGUARD CORPORATION

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, American Vanguard Corporation has
duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

AMERICAN VANGUARD CORPORATION

(Registrant)

By: /s/ ERIC G. WINTEMUTE By: /s/ DAVID T. JOHNSON

Eric G. Wintemute David T. Johnson
Chief Executive Officer Chief Financial Officer
and Chairman of the Board and Principal Accounting Officer

March 16, 2023 March 16, 2023

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons
on behalf of the Registrant and in the capacities indicated.

By: /s/ ERIC G. WINTEMUTE By: /s/ DAVID T. JOHNSON

Eric G. Wintemute David T. Johnson
Principal Executive Officer Principal Financial Officer
and Chairman of the Board and Principal Accounting Officer

March 16, 2023 March 16, 2023

By: /s/ DEBRA EDWARDS By: /s/ MORTON D. ERLICH

Debra Edwards Morton D. Erlich
Director Director

March 16, 2023 March 16, 2023

By: /s/ MARISOL ANGELINI By: /s/ SCOTT D. BASKIN

Marisol Angelini Scott D. Baskin
Director Director

March 16, 2023 March 16, 2023

By: /s/ ÉMER GUNTER By: /s/ PATRICK E. GOTTSCHALK

Émer Gunter Patrick E. Gottschalk
Director Director

March 16, 2023 March 16, 2023

By: /s/ MARK R. BASSETT By: /s/ KEITH M. ROSENBLOOM

Mark R. Bassett Keith M. Rosenbloom
Director Director

March 16, 2023 March 16, 2023

40
 AMERICAN VANGUARD CORPORATION

PART IV

ITEM 15 EXHIBITS AND FINANCIAL STATEMENT SCHEDULE

(a) The following documents are filed as part of this report:

Index to Consolidated Financial Statements and Supplementary Data:

Description Page No

Financial Statement Schedule:

Schedule II—A Valuation and Qualifying Accounts 39

Financial Statements:
Report of Independent Registered Public Accounting Firm BDO USA, LLP; Costa Mesa, California, PCAOB
ID#243 42
Consolidated Balance Sheets as of December 31, 2022 and 2021 44
Consolidated Statements of Operations for the Years Ended December 31, 2022, 2021 and 2020 45
Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2022, 2021 and 2020 46
Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2022, 2021 and 2020 47
Consolidated Statements of Cash Flows for the Years Ended December 31, 2022, 2021 and 2020 48
Notes to Consolidated Financial Statements 49
(b) Exhibits Index

41
 AMERICAN VANGUARD CORPORATION

Report of Independent Registered Public Accounting Firm

Stockholders and Board of Directors

American Vanguard Corporation
Newport Beach, California

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of American Vanguard Corporation (the “Company”) as of
December 31, 2022 and 2021, the related consolidated statements of operations, comprehensive income, stockholders’ equity, and cash
flows for each of the three years in the period ended December 31, 2022, and the related notes and financial statement schedule listed
in the accompanying index (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated
financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2022 and 2021, and
the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, in conformity with
accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(“PCAOB”), the Company's internal control over financial reporting as of December 31, 2022, based on criteria established in Internal
Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission
(“COSO”) and our report dated March 16, 2023 expressed an unqualified opinion thereon.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an
opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the
PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the
applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due
to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements,
whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test
basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the
accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the
consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial
statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or
disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or
complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial
statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the
critical audit matter or on the accounts or disclosures to which it relates.

Accrued Program Costs

As discussed in note 1 to the 2022 consolidated financial statements, the Company offers discounts to its customers based on
various programs. As of December 31, 2022, the Company had accrued program costs of $60.7

42
 AMERICAN VANGUARD CORPORATION

million and program costs recorded as a reduction of gross sales totaled $111.6 million in 2022. These discounts represent variable
consideration. Revenues from sales are recorded at the net sales price, which is the transaction price, and includes estimates of variable
consideration. Variable consideration includes amounts expected to be paid to customers using the expected value method. Each
quarter management compares individual sale transactions with programs to determine what, if any, estimated program liabilities have
been incurred.

We identified variable consideration related to program costs as a critical audit matter. The principal considerations were the
recording of accrued program costs at the individual sale transaction level and the assessment that customers will meet the
requirements set out in agreed upon terms and conditions attached to each program. Auditing these elements involved especially
challenging auditor judgment due to the nature and extent of audit effort required to address this matter.

The primary procedures we performed to address the critical audit matter included:

• Testing the design and operating effectiveness of certain internal controls related to management’s accounting for accrued
program costs, specifically including controls over: (i) the calculation of significant components of the accrued program
costs, and (ii) the completeness and accuracy of accrued program costs.

• Assessing the completeness and reasonableness of the recorded accrued program costs at the individual sale transaction
level through (i) comparing current year accrued program costs for certain product lines against historical program cost
payments, and (ii) evaluating management’s ability to accurately accrue program costs by comparing the accruals made in
prior periods to actual payment activity.

• Testing the computation of the accrued program costs by (i) independently calculating portions of the accrued program
costs at the individual sale transaction level, and (ii) validating management’s assessment that customers will meet the
program requirements by comparing a sample of accrued program costs payments made to customers to the approved
program rates and relevant source documents.

/s/ BDO USA, LLP

We have served as the Company's auditor since 1991.

Costa Mesa, California

March 16, 2023

43
 AMERICAN VANGUARD CORPORATION

CONSOLIDATED BALANCE SHEETS

December 31, 2022 and 2021
(In thousands, except share data)

2022 2021
Assets
Current assets:
Cash and cash equivalents $ 20,328 $ 16,285
Receivables:
Trade, net of allowance for doubtful accounts of $5,136 and $3,938,
respectively 156,492 149,326
Other 9,816 9,595
Total receivables, net 166,308 158,921
Inventories, net 184,190 154,306
Prepaid expenses 15,850 12,488
Income taxes receivable 1,891 —
Total current assets 388,567 342,000
Property, plant and equipment, net 70,912 66,111
Operating lease right-of-use assets 24,250 25,386
Intangible assets, net of amortization 184,664 197,841
Goodwill 47,010 46,260
Other assets 10,769 16,292
Deferred income tax assets, net 141 270
Total assets $ 726,313 $ 694,160
Liabilities and Stockholders’ Equity
Current liabilities:
Current installments of other liabilities $ — $ 802
Accounts payable 69,000 67,140
Customer prepayments 110,597 63,064
Accrued program costs 60,743 63,245
Accrued expenses and other payables 20,982 20,745
Income taxes payable — 3,006
Operating lease liabilities, current 5,279 5,059
Total current liabilities 266,601 223,061
Long-term debt, net of deferred loan fees 51,477 52,240
Other liabilities, excluding current installments 4,167 5,335
Operating lease liabilities, long-term 19,492 20,780
Deferred income tax liabilities, net 14,597 20,006
Total liabilities 356,334 321,422
Commitments and contingent liabilities (Notes 5 and 11)
Stockholders’ equity:
Preferred stock, $0.10 par value per share; authorized 400,000 shares; none issued — —
Common stock, $0.10 par value per share; authorized 40,000,000 shares; issued
34,446,194 shares in 2022 and 34,248,218 shares in 2021 3,444 3,426
Additional paid-in capital 105,634 101,450
Accumulated other comprehensive loss (12,182 ) (13,784 )
Retained earnings 328,745 304,385
425,641 395,477
Less treasury stock at cost, 5,029,892 shares in 2022 and 3,361,040 in 2021 (55,662 ) (22,739 )
Total stockholders’ equity 369,979 372,738
Total liabilities and stockholders’ equity $ 726,313 $ 694,160
See summary of significant accounting policies and notes to consolidated financial statements.

44
 AMERICAN VANGUARD CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

Years ended December 31, 2022, 2021 and 2020
(In thousands, except per share data)

2022 2021 2020

Net sales $ 609,615 $ 557,676 $ 458,704
Cost of sales (368,263 ) (343,629 ) (286,114 )
Gross profit 241,352 214,047 172,590
Operating expenses (200,701 ) (183,272 ) (154,339 )
Bargain purchase gain on business acquisition — 171 4,657
Operating income 40,651 30,946 22,908
Change in fair value of equity investments, net (732 ) (790 ) 717
Other income — 672 —
Interest expense, net (3,954 ) (3,687 ) (5,178 )
Income before provision for income taxes and loss on equity method
investment 35,965 27,141 18,447
Provision for income taxes (8,561 ) (8,166 ) (3,080 )
Income before loss on equity method investment 27,404 18,975 15,367
Loss from equity method investment — (388 ) (125 )
Net income $ 27,404 $ 18,587 $ 15,242
Earnings per common share—basic $ 0.94 $ 0.62 $ 0.52
Earnings per common share—assuming dilution $ 0.92 $ 0.61 $ 0.51
Weighted average shares outstanding—basic 29,234 29,811 29,450
Weighted average shares outstanding—assuming dilution 29,872 30,410 29,993

See summary of significant accounting policies and notes to consolidated financial statements.

45
 AMERICAN VANGUARD CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Years ended December 31, 2022, 2021 and 2020
(In thousands)

2022 2021 2020

Net income $ 27,404 $ 18,587 $ 15,242
Other comprehensive gain (loss)
Foreign currency translation adjustment, net of tax effects 1,602 (4,462 ) (3,624 )
Comprehensive income $ 29,006 $ 14,125 $ 11,618

See summary of significant accounting policies and notes to consolidated financial statements.

46
 AMERICAN VANGUARD CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Years ended December 31, 2022, 2021 and 2020
(In thousands, except share data)

Accumulate
d
Additional Other
Comprehen
Common Stock Paid-in sive Retained Treasury Stock AVD
Shares Amount Capital loss 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
Stocks issued under ESPP 49,668 5 716 — — — — 721
Cash dividends on common
stock ($0.04
per share) — — — — (1,178 ) — — (1,178 )
Foreign currency translation
adjustment, net — — (3,624 ) (3,624 )
Stock based compensation — — 6,561 — — — — 6,561
Stock options exercised,
grants, termination,
and vesting of restricted
stock units (net of
shares in lieu of taxes) 639,151 65 (1,207 ) — — — — (1,142 )
Net income — — — — 15,242 — — 15,242
Balance, December 31, 2020 33,922,433 3,394 96,642 (9,322 ) 288,182 3,061,040 (18,160 ) 360,736
Stocks issued under ESPP 50,782 4 739 — — — — 743
Cash dividends on common
stock ($0.08
per share) — — — — (2,384 ) — — (2,384 )
Foreign currency translation
adjustment, net — — — (4,462 ) (4,462 )
Stock based compensation — — 6,880 — — — — 6,880
Stock options exercised,
grants, termination,
and vesting of restricted
stock units (net of
shares in lieu of taxes) 275,003 28 (2,811 ) — — — — (2,783 )
Shares repurchased — — — — — 300,000 (4,579 ) (4,579 )
Net income — — — — 18,587 — — 18,587
Balance, December 31, 2021 34,248,218 3,426 101,450 (13,784 ) 304,385 3,361,040 (22,739 ) 372,738
Stocks issued under ESPP 51,240 4 833 — — — — 837
Cash dividends on common
stock ($0.10
per share) — — — — (3,044 ) — — (3,044 )
Foreign currency translation
adjustment, net — — — 1,602 — — — 1,602
Stock based compensation — — 5,684 — — — — 5,684
Stock options exercised,
grants, termination,
and vesting of restricted
stock units (net of
shares in lieu of taxes) 146,736 14 (1,254 ) — — — — (1,240 )
Shares repurchased — — (1,079 ) — — 1,668,852 (32,923 ) (34,002 )
Net income — — — — 27,404 — — 27,404
Balance, December 31, 2022 34,446,194 $ 3,444 $ 105,634 $ (12,182 ) $ 328,745 5,029,892 $ (55,662 ) $ 369,979

See summary of significant accounting policies and notes to consolidated financial statements.

47
 AMERICAN VANGUARD CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

Years ended December 31, 2022, 2021 and 2020
(In thousands)
2022 2021 2020

Cash flows from operating activities:

Net income $ 27,404 $ 18,587 $ 15,242
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of property, plant and equipment and intangible assets 22,138 22,229 19,902
Loss on disposal of property, plant and equipment 268 194 119
Amortization of other long-term assets 3,573 3,943 3,947
Amortization and accretion of deferred loan fees and discounted liabilities 289 359 309
Provision for bad debts 1,171 649 1,002
Provision for inventory obsolescence 340 1,034 738
Loan principal and interest forgiveness — (672 ) —
Fair value adjustment of contingent consideration 610 758 250
Decrease in environmental liability — (167 ) (1,155 )
Stock-based compensation 5,684 6,880 6,561
Deferred income taxes (5,278 ) (2,090 ) 969
Changes in liabilities for uncertain tax positions or unrecognized tax benefits (1,441 ) (1,783 ) (2,092 )
Change in equity investment fair value 732 790 (717 )
Loss from equity method investment — 388 125
Bargain purchase gain — (171 ) (4,657 )
Non-cash lease expense 68 286 18
Foreign currency transaction (gains) losses (29 ) (225 ) 126
Changes in assets and liabilities associated with operations, net of business combinations:
(Increase) decrease in net receivables (6,447 ) (24,347 ) 15,407
(Increase) decrease in inventories (29,560 ) 8,323 6,683
(Increase) decrease in income tax receivable, net (4,910 ) 6,051 (287 )
(Increase) decrease in prepaid expenses and other assets (3,082 ) (4,581 ) 140
Increase (decrease) in accounts payable 1,704 8,783 (8,199 )
Increase in deferred revenue 47,551 19,280 36,803
(Decrease) increase in accrued program costs (2,449 ) 17,877 (2,517 )
Increase in other payables and accrued expenses 90 3,986 1,607
Payment of contingent consideration (1,321 ) — —
Net cash provided by operating activities 57,105 86,361 90,324
Cash flows from investing activities:
Capital expenditures (13,261 ) (9,518 ) (11,249 )
Proceeds from disposal of property, plant and equipment 84 — —
Acquisitions of businesses and product lines — (10,000 ) (19,342 )
Intangible assets (1,293 ) (524 ) (4,014 )
Investment — — (1,190 )
Net cash used in investing activities (14,470 ) (20,042 ) (35,795 )
Cash flows from financing activities:
Payments under line of credit agreement (254,000 ) (186,569 ) (168,400 )
Borrowings under line of credit agreement 253,000 131,000 126,776
Payment of contingent consideration (68 ) (1,301 ) (1,227 )
Net receipt from the issuance of common stock under ESPP 837 743 721
Net receipt from the exercise of stock options 827 172 1,603
Net payment from common stock purchased for tax withholding (2,067 ) (2,955 ) (2,745 )
Repurchase of common stock (34,002 ) (4,579 ) —
Payment of cash dividends (2,787 ) (2,382 ) (1,168 )
Net cash used in financing activities (38,260 ) (65,871 ) (44,440 )
Net increase in cash and cash equivalents 4,375 448 10,089
Effect of exchange rate changes on cash and cash equivalents (332 ) (86 ) (747 )
Cash and cash equivalents at beginning of year 16,285 15,923 6,581
Cash and cash equivalents at end of year $ 20,328 $ 16,285 $ 15,923
See summary of significant accounting policies and notes to the consolidated financial statements.

48
 AMERICAN VANGUARD CORPORATION

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2022, 2021 and 2020
(Dollars in thousands, except share data)

(1) Description of Business and Summary of Significant Accounting Policies

American Vanguard Corporation (the “Company” or “AVD”) is primarily a specialty chemical manufacturer that develops and
markets safe and effective products for agricultural, commercial and consumer uses. The Company manufactures and formulates
chemicals for crops, human and animal protection. The consolidated financial statements include the accounts of the Company and its
subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. The Company operates
within a single operating segment.

All U.S. Dollar amounts reflected in the notes to the consolidated financial statements are presented in thousands, except per
share data.

The Company believes that the combination of its cash flows from future operations, current cash on hand and the availability
under the Company’s credit facility will be sufficient to meet its working capital and capital expenditure requirements and will provide
the Company with adequate liquidity to meet its anticipated operating needs for at least the next 12 months from the issuance of these
consolidated financial statements. Although operating activities are expected to provide cash, to the extent of growth in the future, its
operating and investing activities will use cash and, consequently, this growth may require the Company to access some or all of the
availability under the credit facility. It is also possible that additional sources of finance may be necessary to support additional growth.

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

2022 2021 2020

Net sales:
U.S. crop $ 288,624 $ 263,632 $ 211,357
U.S. non-crop 76,709 78,605 60,367
Total U.S. 365,333 342,237 271,724
International 244,282 215,439 186,980
Total net sales $ 609,615 $ 557,676 $ 458,704
Gross profit:
U.S. crop $ 132,509 $ 109,568 $ 92,723
U.S. non-crop 35,257 37,443 27,842
Total U.S. 167,766 147,011 120,565
International 73,586 67,036 52,025
Total gross profit $ 241,352 $ 214,047 $ 172,590

Due to elements inherent to the Company’s business, such as differing and unpredictable weather patterns, crop growing cycles,
changes in product mix of sales and ordering patterns that may vary in timing, measuring the Company’s performance on a quarterly
basis (for example, gross profit margins on a quarterly basis may vary significantly) even when such comparisons are favorable, is not
as good an indicator as full-year comparisons.

Out-of-period adjustment to 2021 consolidated statements of operations—In Australia, the Company sells its products to
distribution companies as well as directly to growers via third-party agents. The Company identified errors related to the classification
of third-party agent’s commission amounts. The Company evaluated these errors and the impact to previously issued financial statements
and concluded that the adjustments and impact of this classification error is not material to any previously issued quarterly or annual financial
statements. However, to improve the consistency and comparability of the financial statements, management has recorded an out-of-period
adjustment to previously reported financial statement line items and related disclosures in this report. The third-party agents’ commission in
the amount of $804 was reclassified from net sales to operating expenses. The impact was an increase in net sales and gross profit in
the amount of $804 and an offsetting increase in operating expenses in the same amount. This adjustment to the 2021 consolidated
statements of operations did not have any impact on operating income, net income, and earnings per common share.

49
 Reclassifications—Certain prior years’ amounts have been reclassified to conform to the current year’s presentation.

Cost of Sales— Cost of sales is the Company’s capitalized cost of inventory procurement and production that is sold in the
respective periods. These costs include direct labor, materials, and manufacturing overhead, Additionally the Company also includes
such cost centers as Health and Safety, Environmental, Maintenance and Quality Control in cost of sales.

Operating Expenses—Operating expenses include cost centers for Selling, General and Administrative, Research, Product
Development, and Regulatory, and outbound Freight, Delivery and Warehousing.

2022 2021 2020

Selling $ 52,512 $ 49,409 $ 42,389
General and administrative:
Other 51,671 47,971 36,084
Proxy contest activities 1,785 — —
Amortization 13,953 13,713 12,744
Research, product development and regulatory 31,816 28,855 26,310
Freight, delivery and warehousing 48,964 43,324 36,812
Total operating expenses $ 200,701 $ 183,272 $ 154,339

Advertising Expense—The Company expenses advertising costs in the period incurred. Advertising expenses, which include
promotional costs, are recognized as selling expenses in the consolidated statements of operations and were $5,836, $5,201 and $4,833
in 2022, 2021 and 2020, respectively.

Cash and Cash Equivalents—Cash and cash equivalents include short-term investments, which are highly liquid investments
with maturities of three months or less when purchased. The Company maintains cash and cash equivalent balances that exceed
federally insured limits with a number of financial institutions. When evaluating cash and cash equivalents for current expected credit
losses, the Company reviews factors such as historical experience with defaults, losses, credit ratings, term and macroeconomic trends,
including current conditions and forecasts to the extent they are reasonable and supportable.

Inventories—The Company values its inventories at lower of cost or net realizable value. Cost is determined by the first-in, first-
out (“FIFO”) or average cost method, including material, labor, factory overhead and subcontracting services. The Company writes
down its inventory carrying values as a result of net realizable value assessments of slow moving and obsolete inventory and other
annual adjustments to ensure that its standard costs continue to closely reflect actual cost. The Company recorded an inventory reserve
allowance of $3,015 and $2,675 at December 31, 2022 and 2021, respectively.

The components of inventories, net of reserve allowance, consist of the following:

2022 2021
Finished products $ 155,128 $ 138,159
Raw materials 29,062 16,147
Total inventories, net $ 184,190 $ 154,306

Leases— The Company has operating leases for warehouses, manufacturing facilities, offices, cars, railcars and certain
equipment for which operating lease right-of-use (“ROU”) assets and corresponding lease liabilities are recorded. The Company
measures ROU assets throughout the lease term at the carrying amount of the lease liability, plus initial direct costs, plus (minus) any
prepaid (accrued) lease payments, less the unamortized balance of lease incentives received. The lease liabilities are measured at the
present value of the unpaid lease payments at the lease commencement date. Leases that include both lease and non-lease components
are accounted for as a single lease component for each asset class, except for warehouse leases.

50
 The minimum payments under operating leases are recognized on a straight-line basis over the lease term in the consolidated
statements of operations. Operating lease expenses related to variable lease payments are recognized in cost of sales or as operating
expenses in a manner consistent with the nature of the underlying lease and as the events, activities, or circumstances in the lease
agreement occur. Leases with a term of less than 12 months are not recognized on the consolidated balance sheets, and the related lease
expenses are recognized in the consolidated statements of operations on a straight-line basis over the lease term.

The accounting for leases requires management to exercise judgment and make estimates in determining the applicable discount
rate, lease term and payments due under a lease. Most of our leases do not provide an implicit interest rate, nor is it available to us from
our lessors. As an alternative, the Company uses our estimated incremental borrowing rate, which is derived from information available
at the lease commencement date, including publicly available data, in determining the present value of lease payments. The Company
also estimated the fair value of the lease and non-lease components for some of our warehouse leases based on market data and cost
data.

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.

The operating leases of the Company do not contain major restrictions or covenants such as those relating to dividends or
additional financial obligations. Finance leases are immaterial to the consolidated financial statements. There were no lease
transactions with related parties during 2022, 2021 and 2020.

The operating lease expense for the years ended December 31, 2022, 2021 and 2020 was $6,531, $6,053 and $5,662,
respectively. Lease expenses related to variable lease payments and short-term leases were immaterial. Additional information related
to operating leases are as follows:

Year Ended Year Ended Year Ended

December 31, December 31, December 31,
2022 2021 2020
Cash paid for amounts included in the
measurement of lease liabilities $ 6,450 $ 5,750 $ 5,657
ROU assets obtained in exchange for new
liabilities $ 4,468 $ 18,521 $ 6,309

The weighted-average remaining lease term and discount rate related to the operating leases as of December 31, 2022 and 2021
were as follows:

December 31, 2022 December 31, 2021

Weighted-average remaining lease term (in years) 5.93 6.72
Weighted-average discount rate 4.00 % 4.02 %

Future minimum lease payments under non-cancellable operating leases as of December 31, 2022 were as follows:

2023 $ 6,073
2024 5,204
2025 4,688
2026 3,464
2027 2,387
Thereafter 6,194
Total lease payments $ 28,010
Less: imputed interest (3,239 )
Total $ 24,771

Amounts recognized in the consolidated balance sheets:

Operating lease liabilities, current $ 5,279
Operating lease liabilities, long term $ 19,492
51
 Revenue Recognition— The Company recognizes revenue when control of the ordered goods or services are transferred to its
customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.
The Company sells its products mainly to distributors and retailers. The products include insecticides, herbicides, soil fumigants,
fungicides and biologicals. In addition, the Company recognizes royalty income related to licensing arrangements which qualify as
functional licenses rather than symbolic licenses. Upon signing a new licensing agreement, the Company typically receives up-front
fees, which are generally characterized as non-refundable royalties. These fees are recognized as revenue upon the execution of the
license agreements. Minimum royalty fees are recognized once the Company has an enforceable right for payment. Sales-based royalty
fees are typically recognized when the sales occur. The Company calculates and accrues estimated royalties based on the contractual
terms and correspondence with the licensees regarding actual sales. 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:

2022 2021 2020

Net sales:
U.S. crop $ 288,624 $ 263,632 $ 211,357
U.S. non-crop 76,709 78,605 60,367
Total U.S. 365,333 342,237 271,724
International 244,282 215,439 186,980
Total net sales $ 609,615 $ 557,676 $ 458,704
Timing of revenue recognition:
Goods and services transferred at a point in time $ 609,409 $ 557,176 $ 455,726
Goods and services transferred over time 206 500 2,978
Total net sales $ 609,615 $ 557,676 $ 458,704

Contract Assets— Contract assets relate to royalties earned on certain functional licenses granted for the use of the Company’s
intellectual property and amounted to $3,100 and $3,900 at December 31, 2022 and 2021, respectively. The short-term and long-term
contract assets of $2,098 and $1,002 are included in other receivables and other assets, respectively, on the consolidated balance sheets
as of December 31, 2022. As of December 31, 2021, the short-term and long-term assets amounted to $1,825 and $2,075, respectively.

Accrued Program Costs— The Company offers various discounts to customers based on the volume purchased within a defined
period, other pricing adjustments, some grower volume incentives or other key performance indicator driven payments, which are
usually made at the end of a growing season, to distributors, retailers or growers. The Company describes these payments as
“Programs.” Programs are a critical part of doing business in both the U.S. crop and non-crop chemicals marketplaces. These discount
Programs represent variable consideration. Revenues from sales are recorded at the net sales price, which is the transaction price net of
the impact of Programs and includes estimates of variable consideration. Variable consideration includes amounts expected to be paid
to its customers, estimated using the expected value method. Each quarter management compares 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 will make 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.

Customer Prepayments— From time to time, the Company receives prepayments from customers which are recorded as
customer prepayments on the Company’s consolidated balance sheets. The Company does not recognize revenue on any such payments
unless and until the customer places binding purchase orders, the goods are shipped, and control is transferred to the customer.
Revenue recognized for the years ended December 31, 2022, 2021, and 2020 that were included in the customer prepayments balance
at the beginning of 2022, 2021, and 2020 was $63,064, $37,779, and $5,652, respectively.

52
 Allowance for Doubtful Accounts or Current Expected 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 possible
failure of customers to make contractual payments. The Company estimates credit losses expected over the life of its trade receivables,
other receivables and contract assets based on historical information combined with current conditions that may affect a customer’s
ability to pay and reasonable and supportable forecasts. In most instances, the Company’s policy is to write-off trade receivables when
they are deemed uncollectible. The vast majority of the Company's trade receivables, other receivables and contract assets 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 is based primarily on geographical location, type of customer
and aging.

Debt Issuance Costs— The Company capitalizes costs incurred with borrowing and records debt issuance costs as a reduction to
the debt amount. These costs in connection with the Company’s revolving line of credit are amortized on a straight-line basis over the
life of the borrowing and included in interest expense.

Property, Plant and Equipment and Depreciation— Property, plant and equipment includes the cost of land, buildings,
machinery and equipment, office furniture and fixtures, automobiles, construction projects and significant improvements to existing
plant and equipment. Interest costs related to significant construction projects are capitalized at the Company’s current weighted
average effective interest rate. Expenditures for minor repairs and maintenance are expensed as incurred. When property or equipment
is sold or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts and the gain
or loss realized on disposition is reflected in operations. All plant and equipment are depreciated using the straight-line method,
utilizing the estimated useful property lives.

Intangible Assets— The primary identifiable intangible assets of the Company relate to assets associated with its product and
business acquisitions. All the Company’s intangible assets are amortizing assets with finite lives. The estimated useful life of an
identifiable intangible asset is based upon several factors including the effects of demand, competition, and expected changes in the
marketability of the Company’s products.

Business Combinations— The Company uses its best estimates and assumptions to assign fair value to the tangible and
intangible assets acquired and liabilities assumed at the acquisition date. The Company’s estimates are inherently uncertain and subject
to refinement. During the measurement period, which may be up to one year from the acquisition date, the Company may record
adjustments to the fair value of these tangible and intangible assets acquired and liabilities assumed, with the corresponding offset to
goodwill or an adjustment to the gain from a bargain purchase. In addition, when appropriate uncertain tax positions and tax-related
valuation allowances are initially recorded in connection with a business combination as of the acquisition date. The Company
continues to collect information and reevaluates these estimates and assumptions quarterly and records any adjustments to the
Company’s preliminary estimates to goodwill or an adjustment to the gain from a bargain purchase, provided that the Company is
within the measurement period. Upon the conclusion of the measurement period or final determination of the fair value of assets
acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the Company’s consolidated
statement of operations.
From time to time, certain of our acquisition agreements include contingent earn-out arrangements, which are generally based on
the achievement of future income thresholds. The fair values of these earn-out arrangements are included as part of the purchase price
of the acquired companies on their respective acquisition dates. For each transaction, the Company engages third-party valuation
specialists to assist it in making estimates of the fair value of contingent earn-out payments, both as part of the initial purchase price
and at each subsequent financial statement date until the end of the related performance period. The Company records the estimated
fair value of contingent consideration as a liability on the consolidated balance sheets.

We review and re-assess the estimated fair value of contingent consideration on a quarterly basis, and the updated fair value
could be materially different from the initial estimates or prior quarterly amounts. Changes in the estimated fair value of our contingent
earn-out liabilities are reported in operating results.

Asset Acquisitions— If an acquisition of an asset or group of assets does not meet the definition of a business, the transaction is
accounted for as an asset acquisition rather than a business combination. An asset acquisition does not result in the recognition of
goodwill and transaction costs are capitalized as part of the cost of the asset or group of assets acquired. The Company uses its best
estimates and assumptions to assign fair value to the tangible and intangible assets acquired and liabilities assumed at the acquisition
date. The acquisitions costs are allocated to the assets acquired on a relative fair value basis.

53
 Impairment— The carrying values of long-lived assets other than goodwill are reviewed for impairment annually and/or
whenever events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. The Company
evaluates recoverability of an asset group by comparing the carrying value to the future undiscounted cash flows that it expects to
generate from the asset group. If the comparison indicates that the carrying value of an asset group is not recoverable, measurement of
the impairment loss is based on the fair value of the asset. There were no circumstances that would indicate any impairment of the
carrying value of these long-lived assets and no material impairment losses were recorded in 2022, 2021, or 2020.

The Company reviews goodwill for impairment utilizing either a qualitative or quantitative assessment. If the Company decides
that it is appropriate to perform a qualitative assessment and concludes that the fair value of a reporting unit more likely than not
exceeds its carrying value, no further evaluation is necessary. If the Company performs a quantitative assessment, the Company
compares the fair value of a reporting unit with its carrying amounts and recognizes an impairment charge for the amount that the
carrying amount exceeds the reporting unit’s fair value. The Company annually tests goodwill for impairment in the beginning of the
fourth quarter, or earlier if triggering events occur. The Company did not record any impairment losses in 2022, 2021, or 2020.

Fair Value of Financial Instruments— The accounting standard for fair value measurements provides a framework for
measuring fair value and requires expanded disclosures regarding fair value measurements. Fair value is defined as the price that would
be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous market in an
orderly transaction between market participants on the measurement date. This accounting standard established a fair value hierarchy,
which requires an entity to maximize the use of observable inputs, where available. The following summarizes the three levels of
inputs required:
• 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 Company did not have any significant Level 1 investments as of December 31, 2022 and 2021, except for its equity
investment in Clean Seed Capital Group Ltd. (see Note 16 – Equity Investments).

The carrying amount of receivables, payables and other amounts arising out of the normal course of business approximates fair
value because of the relatively short maturity of such instruments. The carrying amount of the Company’s short-term and long-term
borrowings, which are considered Level 2 liabilities, approximates fair value based on current rates and terms available to the
Company for similar debt.

The Company's contingent earn-out liabilities in connection with its acquisitions are measured at fair value on a recurring basis
using significant unobservable inputs classified within Level 3. 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. Refer to Note 10 for a reconciliation of the Company’s contingent consideration.

Foreign Currency Translation— Certain international operations use the respective local currencies as their functional currency,
while other international operations use the U.S. Dollar as their functional currency. The Company considers the U.S. Dollar as its
reporting currency. Translation adjustments for subsidiaries where the functional currency is its local currency are included in other
comprehensive gain (loss). Foreign currency transaction gains (losses) resulting from exchange rate fluctuation on transactions
denominated in a currency other than the functional currency are reported in earnings. Assets and liabilities of the foreign operations
denominated in local currencies are translated at the rate of exchange at the balance sheet date. Revenues and expenses are translated at
the weighted average rate of exchange during the period. Translations of intercompany loans of a long-term investment nature are
included as a component of translation adjustment in other comprehensive gain (loss).

54
 Income Taxes—The Company utilizes the liability method of accounting for income taxes as set forth in ASC 740. Under the
liability method, deferred taxes are determined based on the temporary differences between the financial statement and tax basis of
assets and liabilities using tax rates expected to be in effect during the years in which the basis differences reverse. A valuation
allowance is recorded when it is more likely than not that some of the deferred tax assets will not be realized. In determining the need
for valuation allowances, the Company considers projected future taxable income and the availability of tax planning strategies. If in
the future the Company determines that it would not be able to realize its recorded deferred tax assets, an increase in the valuation
allowance would be recorded, decreasing earnings in the period in which such determination is made.

The Company assesses its income tax positions and records tax benefits for all years subject to examination based upon the
Company’s evaluation of the facts, circumstances, and information available at the reporting date. For those tax positions where there
is greater than 50% likelihood that a tax benefit will be sustained, the Company has recorded the largest amount of tax benefit that may
potentially be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those
income tax positions where there is less than 50% likelihood that a tax benefit will be sustained, no tax benefit has been recognized in
the consolidated financial statements.

Per Share Information—Basic earnings per share (“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 to EPS that could occur if securities or
other contracts, which, for the Company, consists of restricted stock grants and options to purchase shares of the Company’s common
stock, are exercised as calculated using the treasury stock method.

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

2022 2021 2020

Numerator:
Net income $ 27,404 $ 18,587 $ 15,242
Denominator:
Weighted average shares outstanding—basic 29,234 29,811 29,450
Dilutive effect of stock options and grants 638 599 543
Weighted average shares outstanding—diluted 29,872 30,410 29,993

For the years ended December 31, 2022, 2021, and 2020, no options or grants were excluded from the computation.

Use of Estimates—The preparation of consolidated financial statements in conformity with accounting principles generally
accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the
reported amounts of assets, liabilities (including those related to litigation), and revenues, at the date that the consolidated financial
statements are prepared. Significant estimates relate to the allowance for doubtful accounts, inventory reserves, impairment of long-
lived assets, investments and goodwill, assets acquired, and liabilities assumed in connections with business combinations and asset
acquisitions, accrued program costs, stock-based compensation and income taxes. Actual results could materially differ from those
estimates.

Total comprehensive income—In addition to net income, total comprehensive income includes changes in equity that are
excluded from the consolidated statements of operations and are recorded directly into a separate section of stockholders’ equity on the
consolidated balance sheets. For the years ended December 31, 2022, 2021, and 2020, total comprehensive income consisted of net
income and foreign currency translation adjustments.

Stock-Based Compensation—The Company estimates the fair value of share-based payment awards on the date of grant. The
value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods in the
Company’s consolidated statements of operations.

55
 Stock-based compensation expense recognized during the period is based on the fair value of the portion of share-based payment
awards that is ultimately expected to vest during the period. Stock-based compensation expense recognized is reduced for estimated
forfeitures. Estimated forfeitures recognized in the Company’s consolidated statements of operations reduced compensation expense by
$370, $320, and $222 for the years ended December 31, 2022, 2021, and 2020, respectively. The Company estimates that 18% of both
restricted stock grants and performance-based restricted shares that are currently subject to vesting will be forfeited. These estimates
are reviewed quarterly and revised as necessary.

The Company uses the Black-Scholes option-pricing model (“Black-Scholes model”) to value option grants using the following
weighted average assumptions (i.e. risk-free interest rate, dividend yield, volatility and average lives). There were no stock options
granted during 2022, 2021 or 2020.

The expected volatility and expected life assumptions are complex and use subjective variables. The variables take into
consideration, among other things, actual and projected employee stock option exercise behavior. The Company estimates the expected
term or vesting period using the “safe harbor” provisions of Staff Accounting Bulletin (“SAB”) 107 and SAB 110. The Company used
historical volatility as a proxy for estimating expected volatility.

The Company values restricted stock grants using the Company’s traded stock price at closing on the date of grant. The weighted
average grant-date fair values of restricted stock grants during 2022, 2021, and 2020 were $23.53, $20.00, and $14.39, respectively.

Recently Issued Accounting Guidance:

Accounting Standards Adopted

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

Accounting Standards Not Yet Adopted

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, as amended and supplemented by subsequent ASUs (collectively, “ASU 2020-04” and “ASU 2022-
06”), 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 borrowing instruments, which use LIBOR as
a reference rate, and is available through December 31, 2024. The Company has evaluated this ASU and does not expect its adoption to
have a material impact on its consolidated financial statements.

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(2) Property, Plant and Equipment
Property, plant and equipment at December 31, 2022 and 2021 consist of the following:

Estimated
2022 2021 useful lives
Land $ 2,757 $ 2,756
Buildings and improvements 20,794 19,844 10 to 30 years
Machinery and equipment 142,980 132,159 3 to 15 years
Office furniture, fixtures and equipment 13,231 10,094 3 to 10 years
Automotive equipment 1,584 1,832 3 to 6 years
Construction in progress 5,897 8,199
Total gross value 187,243 174,884
Less accumulated depreciation (116,331 ) (108,773 )
Total net value $ 70,912 $ 66,111

Domestic 66,268 61,533

International 4,644 4,578
Total net value $ 70,912 $ 66,111

For the years ended December 31, 2022, 2021, and 2020, the Company’s aggregate depreciation expense related to property,
plant and equipment was $7,974, $8,530, and $7,466, respectively. For the years ended December 31, 2022, 2021, and 2020, the
Company eliminated from assets and accumulated depreciation $416, $658 and $1,400 of fully depreciated assets, respectively.

(3) Long-Term Debt

Long-term debt of the Company at December 31, 2022 and 2021 is summarized as follows:

2022 2021
Revolving line of credit $ 52,300 $ 53,300
Less debt issuance costs (823 ) (1,060 )
$ 51,477 $ 52,240

Principal payments on long-term debt at December 31, 2022 of $52,300 are due in August 2026.

The Company’s main bank is Bank of the West, a wholly owned subsidiary of BMO Financial Group. Bank of the West has been
the Company’s bank for more than 30 years and is the syndication manager for the Company’s loans.

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

57
 The Company’s borrowing capacity varies with its financial performance, measured in terms of Consolidated EBITDA as
defined in the Credit Agreement, for the trailing twelve-month period. Under the Credit Agreement, revolving loans bear interest at a
variable rate based, at borrower’s election with proper notice, on either (i) LIBOR plus the “Applicable Margin” which is based upon
the Total Leverage (“TL”) Ratio (“LIBOR Revolver Loan”) or (ii) the greater of (x) the Prime Rate, (y) the Federal Funds Rate plus
0.5%, and (z) the Daily One-Month LIBOR Rate plus 1.00%, plus, in the case of (x), (y) or (z) the Applicable Margin (“Adjusted Base
Rate Revolver Loan”). Interest payments for LIBOR Revolver Loans are payable on the last day of each interest period (either one-,
three- or six- months, as selected by the borrower) and the maturity date, while interest payments for Adjusted Base Rate Revolver
Loans are payable on the last business day of each month and the maturity date. The interest rate on December 31, 2022, was 5.67%.

At December 31, 2022, according to the terms of the Credit Agreement, as amended, and based on our performance against the
most restrictive covenant listed above, the Company had the availability to increase its borrowings by up to $200,372. This compares
to an available borrowing availability of $178,705 as of December 31, 2021. The level of borrowing capacity is driven by three factors:
(1) our financial performance, as measured in EBITDA for trailing twelve-month period, (2) the inclusion of proforma EBITDA related
to acquisitions completed during the preceding twelve months and (3) the leverage covenant (being the number of times EBITDA the
Company may borrow under its credit facility agreement).

The Company and the Lenders entered into an amendment to the Credit Agreement (“Amendment”), effective March 9, 2023,
whereby LIBOR was replaced by SOFR with a credit spread adjustment of 10.0 bps for all SOFR periods. The revolving loans now
bear interest at a variable rate based at borrower’s election with proper notice, on either (i) SOFR plus 0.1% per annum and the
“Applicable Margin” or (ii) the greater of (x) the Prime Rate, (y) the Federal Funds Rate plus 0.5%, and (z) the Daily One-Month
SOFR Rate plus 1.10%, plus, in the case of (x), (y) or (z) the Applicable Margin (“Adjusted Base Rate Revolver Loan”). In addition,
the Amendment waived the minimum fixed charge coverage ratio (“FCCR”) requirement for the year ended December 31, 2022, and
adjusted the terms of the FCCR for the periods ending March 31, 2023 and June 30, 2023. The Company was in compliance with all
other debt covenants as of December 31, 2022.

Substantially all the Company’s assets are pledged as collateral under the Credit Agreement, as amended.
(4) Income Taxes
The provisions for income taxes are:

2022 2021 2020

Current:
Federal $ 7,439 $ 6,684 $ (1,197 )
State 2,173 2,149 (3 )
Foreign 3,943 1,106 2,831
Deferred:
Federal (2,763 ) (2,369 ) 2,177
State (1,243 ) (1,039 ) 403
Foreign (988 ) 1,635 (1,131 )
Total $ 8,561 $ 8,166 $ 3,080

58
 Total income tax expense differed from the amounts computed by applying the U.S. Federal income tax rate of 21.0% to income
before income tax expense, as a result of the following:

2022 2021 2020

Computed tax expense at statutory federal rates $ 7,553 $ 5,619 $ 3,874
Increase (decrease) in taxes resulting from:
State taxes, net of federal income tax benefit 1,493 1,485 559
Unrecognized tax benefits (1,441 ) (1,783 ) (2,092 )
Bargain purchase gain on business acquisition — (35 ) (978 )
Income tax credits (1,342 ) (1,206 ) (812 )
Foreign tax rate differential 785 262 2,145
Stock based compensation 55 208 377
Global intangible low-taxed income — 162 —
Change in valuation allowance 379 3,304 —
Return to provision (693 ) (651 ) 71
Nondeductible / (deductible) expenses 989 (103 ) (111 )
Gross receipts taxes 602 567 —
Other 181 337 48
Total $ 8,561 $ 8,166 $ 3,080

Income before provision for income taxes and losses on equity investments are:

2022 2021 2020

Domestic $ 28,739 $ 21,212 $ 11,858
International 7,226 5,929 6,589
Total $ 35,965 $ 27,141 $ 18,447

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 Temporary differences between the consolidated financial statements’ carrying amounts and tax bases of assets and liabilities that
give rise to significant portions of the net deferred tax liability at December 31, 2022 and 2021 relate to the following:

2022 2021
Deferred tax assets
Inventories $ 2,401 $ 1,777
Program accrual 8,277 9,098
Vacation pay accrual 772 792
Accrued bonuses 1,707 1,250
Bad debt expense 1,450 1,361
Stock compensation 1,414 1,532
Domestic NOL carryforward 609 675
Foreign NOL carryforward 2,554 1,718
Tax credits 842 807
Lease liability 6,209 6,718
Accrued expenses 570 723
Unrealized foreign exchange loss 3,220 3,847
Section 174 capitalized costs 4,600 —
Other — 744
Deferred tax assets $ 34,625 $ 31,042
Less valuation allowance (3,853 ) (4,262 )
Deferred tax assets, net $ 30,772 $ 26,780
Deferred tax liabilities
Plant and equipment, principally due to differences in
depreciation and capitalized interest $ 36,158 $ 37,113
Lease assets 6,079 6,600
Prepaid expenses 1,685 1,666
Deferred revenue 777 1,014
Other 529 123
Deferred tax liabilities $ 45,228 $ 46,516

Total net deferred tax liabilities $ 14,456 $ 19,736

As of December 31, 2022, the Company maintained a full valuation allowance against its net deferred income tax assets related
to the Company’s operations in Brazil, Spain, and Ukraine totaling $3,853. The valuation allowance decreased by $409 for the year
ended December 31, 2022, of which $788 relates to unrealized foreign exchange losses and foreign currency translation included in
other comprehensive income for 2022, partially offset by $379 included in the provision for income taxes for 2022. As of December
31, 2021, the Company recorded a full valuation allowance against the net deferred income tax assets related to the Company’s
operations in Brazil totaling $4,262, of which $3,304 is included in the provision for income taxes for 2021 and $958 related to
unrealized foreign exchange losses included in other comprehensive income for 2021.

Gross foreign NOLs related to the Company's foreign operations were $8,342 and $5,491 for the years ended December 31,
2022 and 2021, respectively. Substantially all of the Company’s foreign NOLs can be carried forward indefinitely.

Gross domestic federal and state NOLs available across all jurisdictions in which we operate were $3,622 and $3,733 as of
December 31, 2022 and 2021, respectively. The Company’s federal and state NOLs expire over varying intervals in the future and are
subject to annual limitation in accordance with IRC Section 382.

60
 The following is a roll-forward of the Company’s total gross unrecognized tax benefits, not including interest and penalties, for
the years ended December 31, 2022 and 2021 included in other liabilities, excluding current installments on the Company’s
consolidated balance sheets:

2022 2021
Balance at beginning of year $ 2,426 $ 3,222
Additions for tax positions related to the current year 225 223
Additions for tax positions related to the prior years 5 56
Reduction for tax positions related to the prior years (745 ) (971 )
Effect of exchange rate changes 95 (104 )
Balance at end of year $ 2,006 $ 2,426

The Company recognizes accrued interest and penalties related to unrecognized tax benefits in the provision for income taxes in
the Company’s consolidated financial statements. As of December 31, 2022, 2021, and 2020 the Company had $2,161, $2,909, and
$4,195, respectively in interest and penalties related to unrecognized tax benefits on its consolidated balance sheets.

It is expected that the amount of unrecognized tax benefits will change and $1,680 of unrecognized tax benefits is expected to be
released within the next twelve months due to expiration of the statute of limitations.

The Company believes it is more likely than not that the deferred tax assets detailed in the table above, exclusive of those in
Brazil, Spain and Ukraine with the previously mentioned full valuation allowances, will be realized in the normal course of business. It
is the intent of the Company that undistributed earnings of foreign subsidiaries are permanently reinvested. The amount of
undistributed earnings was $17,012 as of December 31, 2022. Upon distribution of earnings in the form of dividends or otherwise, the
Company may still be subject to state income taxes and withholding taxes payable to the various foreign countries. Determination of
the unrecognized deferred tax liability is not practical due to the complexities of a hypothetical calculation.

The Company is subject to U.S. federal income tax as well as to income tax in multiple state jurisdictions. Federal income tax
returns of the Company are subject to Internal Revenue Service (“IRS”) examination for the 2019 through 2021 tax years. State
income tax returns are subject to examination for the 2018 through 2021 tax years. The Company has foreign income tax returns
subject to examination.

Beginning in 2022, The Tax Cuts and Jobs Act of 2017 ("TCJA"), requires taxpayers to capitalize and amortize research and
development expenditures pursuant to Internal Revenue Code, or IRC, Section 174, which resulted in increases in the Company’s
deferred tax asset balance and cash tax payments in the amount of $4,600 and $6,180 for the year ended December 31, 2022,
respectively.

(5) Litigation and Environmental

The Company records a liability on its consolidated financial statements for loss contingencies when a loss is known or
considered probable, and the amount can be reasonably estimated. When determining the estimated loss or range of loss, significant
judgment is required to estimate the amount and timing of a loss to be recorded. The Company recognizes legal expense in connection
with loss contingencies as incurred.

DBCP Cases

Over the course of the past 30 years, AMVAC and/or the Company have been named or otherwise implicated in a number of
lawsuits concerning injuries allegedly arising from either contamination of water supplies or personal exposure to 1, 2-dibromo-3-
chloropropane (“DBCP”). DBCP was manufactured by several chemical companies, including Dow Chemical Company, Shell Oil
Company and AMVAC (which ceased manufacture in about 1980) and was approved by the USEPA to control nematodes. DBCP was
also applied on banana farms in Latin America. The USEPA suspended registrations of DBCP in October 1979, except for use on
pineapples in Hawaii. That suspension was partially based on 1977 studies by other manufacturers that indicated a possible link
between male fertility and exposure to DBCP among their factory production workers involved with producing the product.

61
Nicaraguan DBCP Matters

According to court filings in Chinandega, Nicaragua, 85 suits alleging personal injury allegedly due to exposure to DBCP and
involving approximately 3,592 plaintiffs have been filed against AMVAC and other parties. Of these cases, only two – Flavio Apolinar
Castillo et al. v. AMVAC et al., No. 535/04 and Luis Cristobal Martinez Suazo et al. v. AMVAC et al., No. 679/04 (which were filed in
2004 and involve 15 banana workers) – have been served on AMVAC. The company objected to personal jurisdiction and due process
in those matters and demanded that the claims be litigated in the United States. The local court denied these objections in 2007,
AMVAC appealed the denial, and, to the company’s knowledge, there has been no activity in these matters since that time. To date,
plaintiffs have not had success in enforcing Nicaraguan judgments against domestic companies before U.S. courts. Nevertheless,
AMVAC intends to defend these claims vigorously. Furthermore, the Company does not believe that a loss is either probable or
reasonably estimable and has not recorded a loss contingency for these matters.

Delaware DBCP Cases

Chavez & Marquinez. Two cases were filed independently in 2012 by the same law firm (HendlerLaw, P.C.) in Louisiana and
Delaware involving claims on behalf of banana workers for personal injury allegedly arising from exposure to DBCP. Through several
years of law and motion practice, the number of plaintiffs in the actions has been reduced from about 2,750 to 290 banana workers
from Costa Rica, Ecuador, Guatemala and Panama, and both cases have been consolidated before the United States District Court for
the District of Delaware (USDC DE No. 1:12-CV-00695 & 00697). Discovery commenced in 2018 and has consisted largely of
seeking medical examinations from the remaining plaintiffs. In December 2022, defendants in this matter filed a motion for summary
judgment against the Ecuadorian plaintiffs under the theory that the statute of limitations for negligence barred the action. Briefing on
the motion is set to conclude in March 2023. At this stage in the proceedings, the Company does not believe that a loss is probable or
reasonably estimable and has not recorded a loss contingency for these matters.

Hawaiian DBCP Matters

Patrickson, et. al. v. Dole Food Company, et al. In October 1997, AMVAC was served with two complaints in which it was
named as a defendant, filed in the Circuit Court, First Circuit, State of Hawai’i and in the Circuit Court of the Second Circuit, State of
Hawai’i (two identical suits) entitled Patrickson, et. al. v. Dole Food Company, et. al (“Patrickson Case”) alleging damages sustained
from injuries (including sterility) to banana workers caused by plaintiffs’ exposure to DBCP while applying the product in their native
countries. Other named defendants include: Dole Food Company, Shell Oil Company and Dow Chemical Company. After several years
of law and motion activity the parties stipulated that, because it was not named as a defendant in an earlier class action matter that gave
rise to the tolling of the statute of limitations, AMVAC should be dismissed from this matter. Thus, we expect that the Company will be
dismissed with prejudice from this action as soon as the court issues an order. There has been no activity in this matter since November
2018. Further, the Company does not believe that a loss is probable or reasonably estimable and has not recorded a loss contingency for
this matter.

Adams v. Dole Food Company et al. On approximately November 23, 2007, AMVAC was served with a suit filed by two former
Hawaiian pineapple workers (and their spouses), alleging cancer due to DBCP exposure; the action is captioned Adams v. Dole Food
Company et al in the First Circuit for the State of Hawaii. Plaintiff alleges that they were exposed to DBCP between 1971 and 1975.
AMVAC denies that any of its product could have been used at the times and locations alleged by these plaintiffs. Following the
dismissal of Dole Food Company on the basis of the exclusive remedy of worker’s compensation benefits, plaintiffs appealed the
dismissal. The court of appeals subsequently remanded the matter to the lower court in February 2014, effectively permitting plaintiffs
to amend their complaint to circumvent the workers’ compensation bar. There has been no activity in the case since that time, and there
is no estimated date of determination. The Company does not believe that a loss is either probable or reasonably estimable and has not
recorded a loss contingency for this matter.

62
Other Matters

Department of Justice ("DOJ") and Environmental Protection Agency Investigation. On November 10, 2016, AMVAC was
served with a grand jury subpoena from the United States Attorney’s Office for the Southern District of Alabama, seeking documents
regarding the importation, transportation, and management of a specific pesticide. The Company retained defense counsel to assist in
responding to the subpoena and otherwise in defending the Company’s interests. AMVAC is cooperating in the investigation. After
interviewing multiple witnesses (including three employees before a grand jury in February 2022) and making multiple document
requests, the DOJ identified the Company and a manager-level employee as targets of the government’s investigation. DOJ’s
investigation focused on potential violations of two environmental statutes, the Federal Insecticide, Fungicide, and Rodenticide Act
(“FIFRA”) and the Resource Conservation and Recovery Act (“RCRA”), as well as obstruction of an agency proceeding and false
statement statutes. In March 2022, the individual target entered into a plea agreement relating to provision of false information in a
government proceeding. In July 2022, the DOJ sent correspondence to the Company’s counsel to the effect that it was focusing on
potential RCRA violations relating to the reimportation of Australian containers in 2015. Our defense counsel spoke with DOJ on the
subject in early October, and the DOJ, which expressed an interest in resolving the matter, stated that it would get back to the Company
with its position.

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

Pitre etc. v. Agrocentre Ladauniere et al. On February 11, 2022, a strawberry grower named Les Enterprises Pitre, Inc. filed a
complaint in the Superior Court, District of Labelle, Province of Quebec, Canada, entitled Pitre, etc. v. Agrocentre Ladauniere, Inc.
etal, including Amvac Chemical Corporation, seeking damages in the amount of approximately $5 million arising from stunted growth
of, and reduced yield from, its strawberry crop allegedly from the application of Amvac’s soil fumigant, Vapam, in spring of 2021.
Examinations of plaintiff were held in mid-August 2022, during which plaintiff in effect confirmed that he had planted his seedlings
before expiration of the full time interval following product application (as per the product label), that he had failed to follow the
practice of planting a few test seedlings before planting an entire farm, and that he had placed his blind trust in his application adviser
on all manner of timing and rate. The company believes that the claims have no merit and intends to defend the matter. At this stage in
the proceedings, there is not sufficient information to form a judgment as to either the probability or amount of loss; thus, the company
has not set aside a reserve in connection with this matter.

Catalano v. AMVAC Chemical Corp. On June 6, 2022, AMVAC was served with a summons and complaint for a matter entitled
Andrew Catalano and Ruth Catalano v. AMVAC in the Superior Court of the State of California, County of Orange (30-2022-
01263987-CU-PL-CXC) in which plaintiff, who worked as a professional applicator of pesticides, including Orthene (for which
AMVAC is registrant) seeks damages for an injury (specifically, cardiomyopathy) allegedly arising from his exposure to this product.
AMVAC is unaware of any link between cardiovascular disease and Orthene (which has been commercially available for over 30
years) and believes that this case has no merit and intends to defend it vigorously. The Company filed an answer in early July, including
multiple affirmative defenses. Further, the parties are exchanging document requests, and plaintiffs have been unable to supply any
data establishing a causal link between use of this product and the heart condition that plaintiff alleges. At this stage, there is not
sufficient information to form a judgment as to either the probability or amount of any loss; thus, the company has not set aside a
reserve in connection with this matter.

63
 Notice of Intention to Suspend DCPA. On April 28, 2022, the USEPA published a notice of intent to suspend (“NOITS”) DCPA,
the active ingredient of an herbicide marketed by the Company under the name Dacthal. The agency cited as the basis for the
suspension that the Company did not take appropriate steps to provide data studies requested in support of the registration review. In
fact, over the course of several years, the Company cooperated in performing the vast majority of the nearly 90 studies requested by
USEPA and had been working in good faith to meet the agency’s schedule. After an appeals court (the Environmental Appeals Board)
clarified the proper standard for use at the hearing (namely, whether registrant took appropriate steps to respond to the data call-in), a
hearing was held in January 2023 before the ALJ, by which time USEPA had narrowed the scope of its claim to nine outstanding
studies, all of which have been started by the Company and none of which are necessary for USEPA to commence its risk assessment.
The parties are now preparing post-hearing briefs, after the submission of which the ALJ will render a decision. During the course of
these proceedings, AMVAC has been free to make, sell and distribute both the technical grade material and end-use product and may
continue to do so unless and until there is an adverse ruling at both the trial and appellate level (if any). The Company believes that a
loss is neither probable nor estimable and, consequently, has not set aside a reserve in connection with this matter.

(6) Employee Deferred Compensation Plan and Employee Stock Purchase Plan

The Company maintains a deferred compensation plan (“the Plan”) for all eligible employees. The Plan calls for each eligible
employee, at the employee’s election, to participate in an income deferral arrangement under Internal Revenue Code Section 401(k).
The plan allows eligible employees to make contributions, which cannot exceed 100% of compensation, or the annual dollar limit set
by the Internal Revenue Code. The Company matches the first 5% of employee contributions. The Company’s contributions to the Plan
amounted to $2,409, $2,273 and $2,172 in 2022, 2021 and 2020, respectively.

During 2001, the Company’s Board of Directors adopted the AVD Employee Stock Purchase Plan (the “ESPP Plan”). The Plan
allows eligible employees to purchase shares of common stock through payroll deductions at a discounted price. An original aggregate
number of approximately 1,000,000 shares of the Company’s Common Stock, par value $0.10 per share (subject to adjustment for any
stock dividend, stock split or other relevant changes in the Company’s capitalization) were allowed to be sold pursuant to the Plan,
which is intended to qualify under Section 423 of the Internal Revenue Code. The Plan allows for purchases in a series of offering
periods, each six months in duration, with new offering periods (other than the initial offering period) commencing on January 1 and
July 1 of each year. The initial offering period commenced on July 1, 2001. Pursuant to action taken by the Company’s Board of
Directors on December 10, 2010, the expiration of the Plan was extended to December 31, 2013. The Plan was amended and restated
on June 30, 2011, following stockholders’ ratification of the extended expiration date. The Plan was amended as of June 6, 2018,
following stockholders’ ratification of a ten-year extension to the expiration date (which now stands at December 31, 2028). Under the
Plan, as amended as of June 6, 2018, 995,000 shares of the Company’s common stock were authorized. As of December 31, 2022,
2021, and 2020, 491,940, 543,180, and 593,962 shares, respectively, remained available under the plan. The expense recognized under
the Plan was immaterial during the years ended December 31, 2022, 2021 and 2020, respectively.

Shares of common stock purchased through the Plan in 2022, 2021 and 2020 were 51,240, 50,782 and 49,668, respectively.

(7) Major Customers and International Sales

In 2022, there were three domestic customers that accounted for 18%, 13% and 8%, respectively, of the Company’s consolidated
sales. In 2021, there were three domestic customers that accounted for 17%, 14%, and 8% of the Company’s consolidated sales. In
2020, there were three domestic customers that accounted for 17%, 12% and 10% of the Company’s consolidated sales.

The Company primarily sells its products to distributors, buying cooperatives, other co-operative groups and, in certain
territories, end users, and extends credit based on an evaluation of the customer’s financial condition. The Company had three
significant domestic customers who each accounted for approximately 15%, 3% and 3% of the Company’s receivables as of December
31, 2022. The Company had three significant domestic customers who each accounted for approximately 11%, 4% and 4% of the
Company’s receivables as of December 31, 2021. The Company has long-standing relationships with its customers and the Company
considers its overall credit risk for accounts receivables to be minimal.

64
 The Company’s receivables, excluding allowances for doubtful accounts, by geography as of December 31, 2022 and 2021 are
summarized as follows:

2022 2021
Domestic receivables $ 65,825 $ 66,987
International receivables 105,619 95,872
Total receivables $ 171,444 $ 162,859

International sales for 2022, 2021 and 2020 were as follows:

2022 2021 2020

South and Central America $ 124,525 $ 108,975 $ 102,281
Mexico 45,995 40,724 33,517
Asia 26,588 26,234 19,290
Australia 19,674 21,061 9,902
Canada 14,860 10,377 10,572
Africa 8,840 3,468 6,072
Middle East 1,836 2,357 3,054
Europe 1,964 2,243 2,292
Total international net sales $ 244,282 $ 215,439 $ 186,980

(8) Product and Business Acquisitions

During the year ended December 31, 2022, the Company did not complete any acquisitions.
The Company completed one product acquisition during the year ended December 31, 2021. The acquisition was completed on
July 1, 2021, for $10,000 in cash consideration. The acquisition was accounted for as an asset acquisition and the $10,000 in
consideration was allocated as follows: product registrations and product rights $8,225, trade names and trademarks $1,650, and
prepaid assets $125.
During the year ended December 31, 2020, the Company completed two acquisitions:
On October 2, 2020, the Company completed the acquisition of all outstanding stock of the Agrinos Group Companies
("Agrinos"), except for Agrinos AS. Agrinos has operating entities in the U.S., Mexico, India, Brazil, China, Ukraine, and Spain.
Agrinos is a fully integrated biological input supplier with proprietary technology, manufacturing capacity, and global distribution
capabilities. At closing, the Company paid cash consideration of $3,125, which was net of cash acquired of $1,813. The acquisition was
accounted for as a business combination and resulted in a bargain gain. The purchase consideration was allocated as follows:

Trade receivables $ 2,277

Inventory and other current assets 5,371
Property, plant, and equipment 5,141
Product registrations and product rights 50
Liabilities assumed (4,886 )
Bargain (4,828 )
Total $ 3,125

Agrinos was acquired out of bankruptcy. This provided the Company with an opportunity to acquire Agrinos at an advantageous
purchase price which was below the fair value of Agrinos’ net assets acquired, resulting in the bargain purchase gain. The liabilities
assumed include liabilities of $407 related to income tax matters.

65
 On October 8, 2020, the Company completed the acquisition of all outstanding stock of AgNova Technologies Pty Ltd
(“AgNova”). AgNova is an Australian entity that sources, develops, and distributes specialty crop protection and production solutions
for agricultural and horticultural producers, and for selected non-crop users. The purchase price consideration was as follows:

Cash $ 16,997
Less cash acquired (157 )
Contingent consideration 1,052
Total consideration $ 17,892

The fair value of the contingent consideration was estimated using a Monte Carlo Simulation. The acquisition was accounted for
as a business combination and the purchase consideration was allocated as follows:

Trade receivables $ 1,508

Inventory and other current assets 5,698
Property, plant, and equipment 73
Product registrations and product rights 8,327
Trade names and trademarks 351
Distribution agreements 3,584
Customer relationships and customer lists 386
Goodwill 4,618
Liabilities assumed (6,653 )
Total consideration $ 17,892

The liabilities assumed include liabilities of $3,857 related to income tax matters.

Cash paid at closing for the asset acquisitions and business combinations was funded through our revolving line of credit. Pro-
forma financial information is not included herein as the pro-forma impact of the acquisitions is not material.

66
(9) Intangible Assets and Goodwill
The following schedule represents intangible assets recognized in connection with product acquisitions (See Note 1 for the
Company’s accounting policy regarding intangible assets):

Amount
Intangible assets at December 31, 2019 $ 198,261
Additions during fiscal 2020 12,675
Write offs (41 )
Impact of movement in exchange rates (637 )
Amortization expense (12,744 )
Intangible assets at December 31, 2020 197,514
Additions during fiscal 2021 10,524
Measurement period adjustment 4,226
Impact of movement in exchange rates (710 )
Amortization expense (13,713 )
Intangible assets at December 31, 2021 197,841
Additions during fiscal 2022 1,292
Impact of movement in exchange rates (516 )
Amortization expense (13,953 )
Intangible assets at December 31, 2022 $ 184,664

Goodwill at December 31, 2019 $ 46,673

Additions during fiscal 2020 8,830
Other 617
Impact of movement in exchange rates (4,012 )
Goodwill at December 31, 2020 52,108
Measurement period adjustment (4,054 )
Impact of movement in exchange rates (1,794 )
Goodwill at December 31, 2021 46,260
Impact of movement in exchange rates 750
Goodwill at December 31, 2022 $ 47,010

Intangible assets and goodwill at December 31, 2022 $ 231,674

The following schedule represents the gross carrying amount and accumulated amortization of intangible assets and goodwill.
Product rights and trademarks are amortized over their expected useful lives of 25 years. Customer lists are amortized over their
expected useful lives of nine to ten years. The amortization expense is included in operating expenses on the consolidated statements of
operations.

2022 2021
Accumulated Net Book Accumulated Net Book
Gross Amortization Value Gross Amortization Value
Product Rights $ 272,339 $ 121,209 $ 151,130 $ 271,632 $ 110,090 $ 161,542
Trademarks 40,459 11,615 28,844 40,578 9,870 30,708
Customer Lists 11,204 6,514 4,690 10,966 5,375 5,591
Total intangibles assets 324,002 139,338 184,664 323,176 125,335 197,841
Goodwill 47,010 — 47,010 46,260 — 46,260
Total intangibles and goodwill $ 371,012 $ 139,338 $ 231,674 $ 369,436 $ 125,335 $ 244,101

Domestic 194,395 92,352 102,043 193,091 84,477 108,614

International 176,617 46,986 129,631 176,345 40,858 135,487
Total intangibles and goodwill $ 371,012 $ 139,338 $ 231,674 $ 369,436 $ 125,335 $ 244,101
67
 The following schedule represents future amortization charges related to intangible assets:

Year ending December 31, Amount

2023 $ 13,299
2024 13,001
2025 12,819
2026 12,713
2027 12,476
Thereafter 120,356
$ 184,664

(10) Contingent Consideration

The following schedule represents the Company’s contingent consideration liability under acquisitions agreements:

Amount
Obligations under acquisition agreements at December 31, 2019 $ 1,244
Additional obligations acquired 2,044
Fair value adjustment 250
Accretion of discounted liabilities 16
Payments on existing obligations (1,227 )
Foreign exchange effect 141
Obligations under acquisition agreements at December 31, 2020 2,468
Purchase price adjustment (955 )
Fair value adjustment 758
Accretion of discounted liabilities (8 )
Payments on existing obligations (1,301 )
Foreign exchange effect (176 )
Obligations under acquisition agreements at December 31, 2021 786
Fair value adjustment 610
Accretion of discounted liabilities 27
Payments on existing obligations (1,389 )
Foreign exchange effect (34 )
Obligations under acquisition agreements at December 31, 2022 $ —

(11) Commitments
We enter into various obligations in the ordinary course of business, generally of a short-term nature. They primarily relate to
purchase commitments for inventory and orders submitted for equipment for our production plants as well as service agreements.

(12) Research and Development

Research and development expenses which are included in operating expenses were $10,829, $10,354 and $8,757 for the years
ended December 31, 2022, 2021 and 2020, respectively.

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(13) Equity Plan Awards
Under the Company’s Equity Incentive Plan of 1993, as amended (“the Plan”), all employees are eligible to receive non-
assignable and non-transferable restricted stock, options to purchase common stock, and other forms of equity. As of December 31,
2022, the number of securities remaining available for future issuance under the Plan is 1,524,567.

The below tables illustrate the Company’s stock-based compensation, unamortized stock-based compensation, and remaining
weighted average period for the years ended December 31, 2022, 2021 and 2020. This projected expense will change if any stock
options and restricted stock are granted or cancelled prior to the respective reporting periods, or if there are any changes required to be
made for estimated forfeitures.

Remaining
Weighted
Unamortized Average
Stock-Based Stock-Based Period
Compensation Compensation (years)
December 31, 2022
Restricted Stock $ 4,407 $ 6,585 1.8
Unrestricted Stock 499 217 0.4
Performance-Based Restricted Stock 778 2,441 1.8
Total $ 5,684 $ 9,243
December 31, 2021
Restricted Stock $ 5,682 $ 6,804 1.8
Unrestricted Stock 421 187 0.4
Performance-Based Restricted Stock 777 2,888 1.8
Total $ 6,880 $ 9,879
December 31, 2020
Restricted Stock $ 3,166 $ 6,954 1.9
Unrestricted Stock 461 183 0.4
Performance-Based Restricted Stock 2,934 3,352 1.9
Total $ 6,561 $ 10,489

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 years ended December 31, 2022, 2021 and 2020.

Restricted and Unrestricted Stock

A summary of nonvested restricted and unrestricted stock is presented below:

December 31, 2022 December 31, 2021

Weighted Weighted
Average Average
Grant Grant
Number Date Fair Number Date Fair
of Shares Value of Shares Value
st
Nonvested shares at January 1 817,290 $ 17.04 820,624 $ 16.64
Granted 256,417 23.53 295,619 20.00
Vested (262,521 ) 17.84 (244,651 ) 19.23
Forfeited (69,136 ) 18.58 (54,302 ) 17.11
st
Nonvested shares at December 31 742,050 $ 18.86 817,290 $ 17.04

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

December 31, 2022 December 31, 2021

Weighted Weighted
Average Average
Grant Grant
Number Date Fair Number Date Fair
of Shares Value of Shares Value
Nonvested shares at January 1st 379,061 $ 16.43 391,771 $ 16.26
Granted 83,190 23.63 102,043 20.03
Additional granted based on performance achievement (68,484 ) 16.87 71,180 20.53
Vested (51,308 ) 17.09 (175,087 ) 19.78
Forfeited (23,760 ) 17.21 (10,846 ) 16.89
Nonvested shares at December 31st 318,699 $ 18.05 379,061 $ 16.43

Performance Based Restricted Stock Granted in 2022— During the year ended December 31, 2022, the Company issued a total
of 83,190 performance-based shares to employees. The shares granted during 2022 have an average fair value of $23.63. The fair value
was determined by using the publicly traded share price as of the market close on the date of grant and Monte Carlo valuation method.
The Company will recognize as expense the value of the performance-based shares over the required service period from grant date.
The shares will cliff vest on April 20, 2025, with a measurement period commencing January 1, 2022, and ending December 31, 2024.
Eighty percent of these performance-based shares are based upon the financial performance of the Company, specifically, an earnings
before interest and tax (“EBIT”) goal weighted at 50% and a net sales goal weighted at 30%. The remaining 20% of performance-based
shares are based upon AVD stock price appreciation over the same performance measurement period. The EBIT and net sales goals
measure the relative growth of the Company’s EBIT and net sales for the performance measurement period, as compared to the median
growth of EBIT and net sales for an identified peer group. The stockholder return goal measures the relative growth of the fair market
value of the Company’s stock price over the performance measurement period, as compared to that of the Russell 2000 Index and the
median fair market value of the common stock of the comparator companies, identified in the Company’s 2021 Proxy Statement. All
parts of these awards vest in three years but are subject to reduction to a minimum (or even zero) for recording less than the targeted
performance and to increase to a maximum of 200% for achieving in excess of the targeted performance.

Performance Based Restricted Stock Granted in 2021— During the year ended December 31, 2021, the Company issued a total
of 102,043 performance-based shares to employees. The shares granted during 2021 have an average fair value of $20.03. The fair
value was determined by using the publicly traded share price as of the market close on the date of grant and Monte Carlo valuation
method. The Company will recognize as expense the value of the performance-based shares over the required service period from grant
date. The shares will cliff vest on April 16, 2024, with a measurement period commencing January 1, 2021, and ending December 31,
2023. Eighty percent of these performance-based shares are based upon the financial performance of the Company, specifically, an
EBIT goal weighted at 50% and a net sales goal weighted at 30%. The remaining 20% of performance-based shares are based upon
AVD stock price appreciation over the same performance measurement period. The EBIT and net sales goals measure the relative
growth of the Company’s EBIT and net sales for the performance measurement period, as compared to the median growth of EBIT and
net sales for an identified peer group. The stockholder return goal measures the relative growth of the fair market value of the
Company’s stock price over the performance measurement period, as compared to that of the Russell 2000 Index and the median fair
market value of the common stock of the comparator companies, identified in the Company’s 2020 Proxy Statement. All parts of these
awards vest in three years but are subject to reduction to a minimum (or even zero) for recording less than the targeted performance
and to increase to a maximum of 200% for achieving in excess of the targeted performance.

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 Performance Based Restricted Stock Granted in 2020— During the year ended December 31, 2020, the Company issued a total
of 160,706 performance-based shares to employees. The shares granted during 2020 have an average fair value of $14.29. The fair
value was determined by using the publicly traded share price as of the market close on the date of grant and Monte Carlo valuation
method. The Company will recognize as expense the value of the performance-based shares over the required service period from grant
date. The shares will cliff vest on May 13, 2023, with a measurement period commencing October 1, 2020, and ending March 31,
2023. Eighty percent of these performance-based shares are based upon the financial performance of the Company, specifically, an
EBIT goal weighted at 50% and a net sales goal weighted at 30%. The remaining 20% of performance-based shares are based upon
AVD stock price appreciation over the same performance measurement period. The EBIT and net sales goals measure the relative
growth of the Company’s EBIT and net sales for the performance measurement period, as compared to the median growth of EBIT and
net sales for an identified peer group. The stockholder return goal measures the relative growth of the fair market value of the
Company’s stock price over the performance measurement period, as compared to that of the Russell 2000 Index and the median fair
market value of the common stock of the comparator companies, identified in the Company’s 2020 Proxy Statement. All parts of these
awards vest in three years but are subject to reduction to a minimum (or even zero) for recording less than the targeted performance
and to increase to a maximum of 200% for achieving in excess of the targeted performance.

In 2022, the Company assessed the likelihood of achieving the performance measures based on peer group information currently
available for the performance-based shares granted in 2020. Based on the performance thus far, the Company has concluded that it is
likely that the performance measure based on EBIT will not be met and net sales will be met at 150% of targeted performance and have
recorded the related additional expense in 2022. The performance shares based on market price are expected to be met at 166% of
targeted performance. The effect of market conditions for performance shares based on market are included in the grant date fair value
valuation and no additional expenses were recognized in 2022.

During 2022, the Company concluded that the performance measure based on EBIT and net sales for the performance-based
shares granted in 2019, when compared to the peer group, was met at 0% for EBIT and 123.8% for net sales of targeted performance
and all related additional expenses were recorded as of December 31, 2022. The 2019 performance shares based on market price was
met at 28.5%; however, the market condition is reflected in the grant date fair value valuation and no additional expenses were
recognized. As a result, 68,484 shares were forfeited since the Company did not achieve performance targets when compared to the
peer group.

Stock Options
Under the terms of the Company’s ISOP, under which options to purchase common stock can be issued, all employees are
eligible to receive non-assignable and non-transferable options to purchase shares. The exercise price of any option may not be less
than the fair market value of the shares on the date of grant; provided, however, that the exercise price of any option granted to an
eligible employee owning more than 10% of the outstanding common stock may not be less than 110% of the fair market value of the
shares underlying such option on the date of grant. No options granted may be exercisable more than ten years after the date of grant.

In 2022, 2021 and 2020, no options were granted.

Incentive Stock Option Plans

Activity of the incentive stock option plans:

Weighted
Average
Number of Price Per
Shares Share
Balance outstanding, December 31, 2019 332,823 $ 9.14
Options exercised (196,736 ) 7.79
Options forfeited (13,000 ) 7.50
Balance outstanding, December 31, 2020 123,087 11.48
Options exercised (15,051 ) 11.41
Balance outstanding, December 31, 2021 108,036 11.49
Options exercised (39,140 ) 11.49
Balance outstanding, December 31, 2022 68,896 $ 11.49

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 Outstanding stock options at December 31, 2022, summarized by exercise price:

Outstanding Weighted Average

Remaining
Number of Life Exercise
Exercise Price Per Share Shares (Months) Price
Outstanding stock options, December 31, 2022 68,896 24 $ 11.49

Performance Incentive Stock Option Plan

Activity of the performance incentive stock option plan:

Weighted
Average
Number of Price Per
Shares Share
Balance outstanding, December 31, 2019 120,782 $ 11.49
Options exercised (6,124 ) 11.49
Balance outstanding, December 31, 2021 and 2020 114,658 $ 11.49
Options exercised (32,850 ) 11.49
Balance outstanding, December 31, 2022 81,808 $ 11.49

All the performance incentive stock options outstanding as of December 31, 2022, have an exercise price per share of $11.49 and
a remaining life of 24 months.

The total intrinsic value of options exercised during 2022, 2021, and 2020 was $877, $119, and $1,393, respectively. Cash
received from stock options exercised during 2022, 2021, and 2020 was $827, $172, and $1,533, respectively. All outstanding options
are fully vested and the intrinsic value amounted to $1,540 as of December 31, 2022.

(14) Accumulated Other Comprehensive Loss

The following table lists the beginning balance, annual activity and ending balance of foreign currency translation adjustment
included as a component of accumulated other comprehensive loss:

Balance, December 31, 2019 $ (5,698 )

Foreign currency translation adjustment, net of tax effects of $2,521 (3,624 )
Balance, December 31, 2020 (9,322 )
Foreign currency translation adjustment, net of tax effects of $76 (4,462 )
Balance, December 31, 2021 (13,784 )
Foreign currency translation adjustment, net of tax effects of ($245) 1,602
Balance, December 31, 2022 $ (12,182 )

(15) Equity Method Investment

On August 2, 2016, AMVAC BV entered into a joint venture with Huifeng (Hong Kong) Ltd, which is a wholly owned
subsidiary of the Huifeng Group. The resulting entity, Hong Kong JV, was intended to focus on activities such as market access and
technology transfer between the two members. AMVAC BV is a 50% owner of the entity.

On June 27, 2017, both AMVAC BV and Huifeng (Hong Kong) Ltd. made individual capital contributions of $950 to the Hong
Kong JV. As of December 31, 2021, 2020 and 2019, the Company’s ownership position in the Hong Kong JV was 50%. The Company
utilizes the equity method of accounting with respect to this investment.

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 On July 7, 2017, the Hong Kong JV purchased the shares of Profeng Australia, Pty Ltd. (“Profeng”), for a total consideration of
$1,900. The purchase consists of Profeng Australia, Pty Ltd Trustee and Profeng Australia Unit Trust. Both Trust and Trustee were
previously owned by Huifeng (via its wholly owned subsidiary Huifeng (Hong Kong) Ltd). For the years ended December 31, 2022,
2021, and 2020, the Company recognized losses of $0, $388 (including a full impairment charge of $288 of the Company’s remaining
book value of its Hong Kong JV investment) and $125, respectively, as a result of the Company’s ownership position in the Hong
Kong JV. The Hong Kong JV is an inactive entity.

(16) Equity Investments

In February 2016, AMVAC BV made an equity investment of $3,283 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 December
31, 2022, 2021 and 2020, the Company’s ownership position in Bi-PA was 15%. Since this investment does not have readily
determinable fair value, the Company has elected to measure the investment at cost less impairment, if any, and to record an increase or
decrease for changes resulting from observable price changes in orderly transactions for the identical or a similar investment of Bi-PA.
The Company periodically reviews the investment for possible impairment. The Company recorded an impairment charge in the
amount of $399 during the year ended December 31, 2021. There were no impairment or observable price changes on the investment
during the years ended December 31, 2022 and 2020. The investment is recorded within other assets on the consolidated balance sheets
and amounted to $2,884 as of December 31, 2022 and 2021.

On April 1, 2020, AMVAC purchased 6.25 million shares, an ownership of approximately 8%, of common stock of Clean Seed
Capital Group Ltd. (TSX Venture Exchange: “CSX”) for $1,190. The shares are publicly traded, have a readily determinable fair value,
and are considered a Level 1 investment. The fair value of the stock amounted to $784 and $1,516 as of December 31, 2022 and 2021,
respectively, and the Company recorded losses of $732 and $391 and a gain of $717 for the years ended December 31, 2022, 2021 and
2020, respectively. The investment is recorded within other assets on the consolidated balance sheets and amounted to $784 and $1,516
as of December 31, 2022 and 2021, respectively.

(17) Share Repurchase Programs

The Company periodically repurchases shares of its common stock under a board-authorized repurchase program through a
combination of open market transactions and accelerated share repurchase ("ASR") arrangements.

On August 22, 2022, pursuant to a Board of Directors resolution, the Company entered into an ASR to repurchase $20,000 of its
common stock. Under the ASR agreement, the Company paid $20,000 and immediately received an initial delivery of 802,810 shares
in the amount of $16,000, based on a price of $19.93 per share, which represented 80% of the notional amount of the ASR based on the
closing price of the Company’s common stock on the New York Stock Exchange ("NYSE") on August 22, 2022. On December 14,
2022, the ASR was completed, and pursuant to the settlement terms of the ASR, the Company received an additional 131,892 shares of
its common stock. The average price paid for all of the shares delivered under the ASR was $21.40 per share.

On March 8, 2022, pursuant to a Board of Directors resolution, the Company announced its intention to repurchase an aggregate
number of up to 1,000,000 shares of its common stock, par value $0.10 per share, in the open market over the succeeding one year,
subject to limitations and restrictions under applicable securities laws. During 2022, the Company purchased 734,150 shares of its
common stock for a total of $14,002 at an average price of $19.07 per share.

On August 30, 2021, pursuant to a Board of Directors resolution, the Company announced its intention to repurchase an
aggregate number of 300,000 shares of its common stock, par value $0.10 per share, in the open market over the succeeding six
months. During 2021, the Company purchased 300,000 shares of its common stock for a total of $4,579 at an average price of $15.26
per share.

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 The shares and respective amount are recorded as treasury shares on the Company’s consolidated balance sheets. The table
below summarized the number of shares of the Company's common stock that were repurchased during the years ended December 31,
2022 and 2021. The Company did not repurchase any of its common stock in 2020.

Total number of Average price paid

Year ended shares purchased per share Total amount paid
December 31, 2022 1,668,852 $ 20.37 $ 34,002
December 31, 2021 300,000 $ 15.26 $ 4,579

(18) Supplemental Cash Flows Information

2022 2021 2020

Supplemental cash flow information:
Cash paid during the year for:
Interest $ 3,834 $ 3,520 $ 5,313
Income taxes, net $ 19,960 $ 5,796 $ 3,881
Non-cash transactions:
ROU assets in exchange for lease liabilities $ 4,468 $ 18,521 $ 6,309
Deferred consideration in connection with business and asset
acquisitions $ 610 $ 758 $ 2,630
Cash dividends declared and included in accrued expenses $ 851 $ 594 $ 592

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