AMERICAN VANGUARD CORP Segments Disclosure
(16) Segment Information
The Company operates as a operating segment, which is the business of developing, manufacturing and distributing chemical, biological and biorational products for agricultural, commercial and consumer uses. The Company synthesizes and formulates chemicals and ferments and extracts microbial products for crops, turf, ornamental plants, and human and animal health protection.
The Company’s CODM is the Chief Executive Officer, who manages the Company’s operations based on consolidated financial information for purposes of evaluating financial performance and allocating resources. The financial information reviewed by the CODM includes revenue by product line and region, and key expense categories that are regularly provided for the consolidated company.
The accounting policies of the Company’s single operating segment are the same as those described in the summary of significant accounting policies. Although there are other measures of operating performance used by the CODM, the Company concluded that consolidated operating (loss) income is the measure required to be disclosed as the segment measure of profit or loss. Operating (loss) income is utilized to evaluate to monitor budget versus actual results in order to gain more depth and understanding of the factors driving the business. When evaluating the Company’s financial performance, the following table sets forth significant expense categories regularly provided to the CODM:
|
|
2024 |
|
|
2023 |
|
|
2022 |
|
|||
Net sales |
|
$ |
547,306 |
|
|
$ |
579,371 |
|
|
$ |
609,615 |
|
Cost of sales: |
|
|
|
|
|
|
|
|
|
|||
Material and other costs |
|
|
(381,784 |
) |
|
|
(354,580 |
) |
|
|
(368,263 |
) |
Warehousing, handling, and outbound freight |
|
|
(45,205 |
) |
|
|
(45,627 |
) |
|
|
(48,964 |
) |
Total cost of sales |
|
|
(426,989 |
) |
|
|
(400,207 |
) |
|
|
(417,227 |
) |
Gross profit |
|
|
120,317 |
|
|
|
179,164 |
|
|
|
192,388 |
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|||
Selling, general and administrative |
|
|
(119,634 |
) |
|
|
(116,887 |
) |
|
|
(119,921 |
) |
Research, product development and regulatory |
|
|
(32,662 |
) |
|
|
(38,025 |
) |
|
|
(31,816 |
) |
Transformation |
|
|
(20,162 |
) |
|
|
(957 |
) |
|
|
— |
|
Asset impairment charges |
|
|
(50,414 |
) |
|
|
— |
|
|
|
— |
|
Gain from sale of assets |
|
|
1,000 |
|
|
|
— |
|
|
|
— |
|
Operating (loss) income |
|
|
(101,555 |
) |
|
|
23,295 |
|
|
|
40,651 |
|
Change in fair value of equity investments, net |
|
|
(2,356 |
) |
|
|
(359 |
) |
|
|
(732 |
) |
Interest and other expenses, net |
|
|
(16,547 |
) |
|
|
(12,639 |
) |
|
|
(3,954 |
) |
(Loss) income before provision for income taxes |
|
|
(120,458 |
) |
|
|
10,297 |
|
|
|
35,965 |
|
Provision for income taxes |
|
|
(5,882 |
) |
|
|
(2,778 |
) |
|
|
(8,561 |
) |
Net (loss) income |
|
$ |
(126,340 |
) |
|
$ |
7,519 |
|
|
$ |
27,404 |
|
Assets provided to the CODM are consistent with those reported on the consolidated balance sheet.
About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.