American Vanguard Corp (AVD) 2024 Q2 法說會逐字稿

Greetings and welcome to the American Vanguard Q2 2024 conference call and webcast. (Operator Instructions) As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Anthony Young, Director of Investor Relations. Thank you, Anthony. You may begin

歡迎參加美國先鋒集團 2024 年第二季電話會議和網路廣播。（操作員指示）謹此提醒，本次會議正在錄製中。現在我很高興向您介紹主持人，投資者關係總監安東尼楊（Anthony Young）。謝謝你，安東尼。你可以開始

Thank you, Alicia. Good afternoon, and welcome to American Vanguard's second quarter 2024 earnings review. Our prepared remarks will be led by Tim Donnelly, acting Chief Executive Officer; Mark Bassett, Board Member and Architect of our Business Transformation Strategy; and David Johnson, Chief Financial Officer; Mason Bennett, Vice President of North American Crop is also in attendance and available to answer agricultural economy related questions.

謝謝你，艾莉西亞。下午好，歡迎來到美國先鋒集團 2024 年第二季獲利回顧。我們準備好的演講將由代理首席執行官蒂姆·唐納利 (Tim Donnelly) 主持； Mark Ba​​nkett，董事會成員兼業務轉型策略架構師；財務長戴維‧約翰遜 (David Johnson)；北美作物副總裁 Mason Bennett 也出席並回答農業經濟相關議題。

Before beginning the presentation, let's take a moment for cautionary reminder. During this call, we may discuss forward-looking information. All forward-looking statements are estimates by the company's management and are subject to various risks and uncertainties that may cause actual results to differ. Such factors include weather conditions, changes in regulatory policy, transformation, organization and liquidity initiatives and other risks. As detailed in the company's SEC reports and filings. All forward looking statements represent the company's judgment as of the date of this release, and such information will not necessarily be updated by the company.

在開始演示之前，讓我們花點時間進行警告提醒。在這次電話會議中，我們可能會討論前瞻性資訊。所有前瞻性陳述均為公司管理階層的估計，並受到各種風險和不確定性的影響，可能導致實際結果有所不同。這些因素包括天氣條件、監管政策的變化、轉型、組織和流動性舉措以及其他風險。正如該公司向 SEC 報告和文件中詳細介紹的那樣。所有前瞻性陳述均代表本公司截至本新聞稿發布之日的判斷，本公司不一定會更新此類資訊。

It's now my pleasure to turn the call over to Tim.

現在我很高興將電話轉給提姆。

Thanks, Anthony. Hello, everyone, and thank you for joining American Vanguard's second quarter 2024 earnings call. Before we discuss the second quarter and first half. I would like to comment on the current management team and then cover the company's direction to expedite change. In light of industry conditions and our recent financial performance, the Board of Directors has taken bold and decisive action to guide the company on a new course.

謝謝，安東尼。大家好，感謝您參加美國先鋒集團 2024 年第二季財報電話會議。在我們討論第二季和上半年之前。我想對目前的管理團隊發表評論，然後談談公司加快變革的方向。根據行業情況和近期的財務表現，董事會採取了大膽而果斷的行動，引導公司走上新的道路。

Following the departure of the previous CEO in July 12, the company formed an office of the CEO to accelerate both short-term initiatives such as margin improvements, cash management, capital allocation and cost savings, as well as business transformation during the pendency of the search for a new CEO. The Board and management team are committed to moving forward with a sense of urgency and making necessary changes immediately while we look to fill the top position.

繼前任執行長於 7 月 12 日離職後，該公司成立了執行長辦公室，以加快利潤率提高、現金管理、資本配置和成本節約等短期舉措，以及公司未決期間的業務轉型。新的首席執行官。董事會和管理團隊致力於以緊迫感向前推進，並在我們尋求填補最高職位的同時立即做出必要的改變。

As you will see on slide 5, the OCEO is comprised of four senior executives who bring all the skills and experience necessary both to manage day-to-day operations and to accelerate our transformation. They are David Johnson, CFO with 17 years at the company; Senior Vice President of Human Resources, Shirin Khosravi, with more than 25 years in HR Management and Design; Board member, Mark Bassett, Ph. D., who has run multiple large global businesses and is the architect of our Transformation Plan; and myself, Tim Donnelly, acting CEO, with 19 years at the company.

正如您將在幻燈片 5 中看到的，OCEO 由四名高級管理人員組成，他們擁有管理日常營運和加速轉型所需的所有技能和經驗。他們是 David Johnson，在公司工作了 17 年的財務長；人力資源資深副總裁 Shirin Khosravi，擁有超過 25 年的人力資源管理與設計經驗；董事會成員馬克‧巴塞特博士D.，曾經營多家大型全球企業，是我們轉型計畫的架構師；我本人，蒂姆·唐納利 (Tim Donnelly)，代理首席執行官，在公司工作了 19 年。

Ensured the office of the CEO has a clear mandate to improve short term financial performance and to accelerate the transformation process, which will turn American Vanguard into the business that our investors, customers and employees deserve and we all know it can be. We will use the following framework for our discussion during this call as per slide 6.

確保執行長辦公室擁有改善短期財務表現和加速轉型進程的明確授權，這將使美國先鋒集團成為我們的投資者、客戶和員工應得的企業，而且我們都知道它可以成為這樣的企業。在本次電話會議期間，我們將依照投影片 6 使用以下框架進行討論。

I will provide a high-level overview of the second quarter and first half 2024 financial performance and make mention of a recent development with EPA on our product, Dacthal. Then Mark will provide an update on the progress we have made with our liquidity initiatives and business transformation. Then David will report on our amended credit agreement and provide a detailed review of the just completed quarter's financial performance. Finally, I will return to provide an update on our full year financial projections and to discuss our research for a new CEO.

我將簡要概述 2024 年第二季和上半年的財務業績，並提及 ​​EPA 在我們的產品 Dacthal 上的最新進展。然後馬克將提供我們在流動性計劃和業務轉型方面所取得的最新進展。然後大衛將報告我們修訂後的信貸協議，並對剛完成的季度的財務業績進行詳細審查。最後，我將回來提供我們全年財務預測的最新信息，並討論我們對新任首席執行官的研究。

American Vanguard has a resilient business and we think this is highlighted by the company's sales in spite of weakness in the farm economy, which is due to persistently low commodity prices, the cost of crop inputs and elevated interest rates, which have culminated in a just-in-time procurement approach within our distribution channel. I hasten to add that most of our competitors have been similarly impacted.

美國先鋒集團的業務具有彈性，我們認為，儘管農業經濟疲軟，但該公司的銷售突顯了這一點，這是由於大宗商品價格持續走低、農作物投入成本和利率上升造成的，這些因素最終導致了農業經濟的疲軟。我趕緊補充說，我們的大多數競爭對手都受到了類似的影響。

Turning to slide 8. During the second quarter, net sales decreased slightly to $128.2 million compared to $132.8 million in the year-ago period. And our adjusted EBITDA margin declined to 4.8% during the quarter well below that, which we would view as our long-term potential and lower than the 8.2% adjusted EBITDA margin in the year ago period. This decrease in adjusted EBITDA margin comes largely from reduced sales of higher margin product with US crop sales down along with a comparative increase in sales of lower-margin non-crop products. During the quarter, we did record double-digit increases in both non-crop and green solutions products.

轉到投影片 8。第二季淨銷售額小幅下降至 1.282 億美元，去年同期為 1.328 億美元。本季我們調整後的 EBITDA 利潤率降至 4.8%，遠低於我們認為的長期潛力，也低於去年同期 8.2% 的調整後 EBITDA 利潤率。調整後 EBITDA 利潤率的下降主要是由於美國農作物銷售下降，利潤率較高的產品銷售減少，而利潤率較低的非農作物產品銷售相對增加。在本季度，我們的非作物和綠色解決方案產品確實實現了兩位數的成長。

Net sales for the first half of 2024 were up on a consolidated basis by 2% with both non-crop up 20% and domestic total sales up 5%, outperforming the first half of 2023. In addition, we recorded double-digit sales increases within our green solutions portfolio, led by strong demand in Central America further. And as David will report, while down in the second quarter, gross profit for the first half of the year was about equal with that of 2023.

2024 年上半年的綜合淨銷售額成長 2%，其中非農作物銷售額成長 20%，國內總銷售額成長 5%，優於 2023 年上半年。此外，在中美洲的強勁需求進一步推動下，我們的綠色解決方案組合銷售額實現了兩位數的成長。正如 David 將報告的那樣，雖然第二季度有所下降，但今年上半年的毛利與 2023 年大致持平。

That said, the current management team and the Board view our overall results as unacceptable. In our years of experience with the company, we believe that the primary impediment of this business has not been in generating sales, but rather has been in managing our cost structure. Thus, it is incumbent upon us to take decisive action to reduce costs, improve liquidity and accelerate our business transformation.

也就是說，目前的管理團隊和董事會認為我們的整體結果是不可接受的。根據我們多年來與該公司合作的經驗，我們認為該業務的主要障礙不是產生銷售，而是管理我們的成本結構。因此，我們有責任採取果斷行動，降低成本，改善流動性，並加速業務轉型。

Before turning to mark on our multiple initiatives to effect this change, let me first touch upon the subject of Dacthal. As you may have read in the press earlier this week, the EPA just issued an emergency suspension of that product, which prevents its sale distribution and use. As you may recall, we voluntarily suspended sales of Dacthal last April and had submitted a much reduced label and effort to meet the agency's concerns. In addition, at that time, we had removed Dacthal sales from our 2024 forecast assumption. We are, of course, working in good faith with both EPA and our stakeholders to ensure compliance with the suspension.

在談到我們為實現這項變革而採取的多項舉措之前，讓我先談談 Dacthal 的主題。正如您可能在本週早些時候在媒體上讀到的那樣，美國環保署剛剛緊急暫停該產品，從而阻止其銷售、分發和使用。您可能還記得，我們​​去年四月自願暫停了 Dacthal 的銷售，並提交了大幅減少的標籤和努力來滿足該機構的擔憂。此外，當時我們已將 Dacthal 銷售額從 2024 年預測假設中剔除。當然，我們正在與 EPA 和我們的利益相關者真誠合作，以確保遵守暫停規定。

With that, let me turn to Marc Bassett on our multiple initiatives to improve operating leverage and efficiency both in the short term and permanently. Mark?

接下來，讓我談談馬克·巴塞特（Marc Bassett）關於我們旨在短期和永久提高營運槓桿和效率的多項舉措。標記？

Thanks, Tim. Before I get into the details, I'd like to quickly introduce myself as per slide 11. First, I'm a shareholder of American Vanguard. I invested in the company before I joined the board a little more than two years ago. Prior to that, I spent almost six years as Chairman and CEO of Hemlock Semiconductor. During that time, we were able to significantly increase the valuation of the company by reducing the total cost by about 30% while creating a substantial new revenue stream to drive rapid growth.

謝謝，蒂姆。在詳細介紹之前，我想先按照投影片 11 快速介紹一下自己。首先，我是美國先鋒集團的股東。兩年多前，我在加入董事會之前就投資了這家公司。在此之前，我在 Hemlock Semiconductor 擔任董事長兼執行長近六年。在此期間，我們將總成本降低了約30%，從而顯著提高了公司的估值，同時創造了大量新的收入來源以推動快速成長。

Prior to that, I ran several large global businesses at Dow, and early in my career, I worked in finance and technology. I invested in American Vanguard because I believed in the company's potential, and I still do. After joining the Board, I spent 2.5 months inside the company last year, developing the foundation of what became the transformation that currently is helping us implement.

在此之前，我在陶氏化學公司經營過幾家大型全球業務，在職業生涯早期，我從事金融和技術工作。我投資美國先鋒集團是因為我相信該公司的潛力，現在仍然如此。加入董事會後，我去年在公司工作了 2.5 個月，為目前正在幫助我們實施的轉型奠定了基礎。

And I've spent the last two months in the company focused on accelerating the transformation and helping improve liquidity in the second half. After my time here, there is no doubt in my mind that this is a solid company capable of delivering a 15% EBITDA margin performance.

過去兩個月我在公司的工作重點是加速轉型，幫助改善下半年的流動性。在我任職之後，我毫無疑問地認為這是一家能夠實現 15% EBITDA 利潤率業績的可靠公司。

So with that as a preference practice, let's turn to slide 12 and then get into some of the details of what we've recently accomplished. First, we felt it was critical to get alignment throughout the company and how we want to work and the priorities for the remainder of the year. Our mantra is teamwork, focus, performance and urgency. This mantra may sound simple, but it's a key driver for success. I can tell you that there is a lot of excitement throughout the company, and leadership is committed to realizing company's full potential.

因此，以此作為首選實踐，讓我們轉向投影片 12，然後詳細了解我們最近完成的工作。首先，我們認為讓整個公司保持一致、我們希望如何工作以及今年剩餘時間的優先事項至關重要。我們的口號是團隊合作、專注、績效和緊迫感。這句話聽起來很簡單，但卻是成功的關鍵驅動力。我可以告訴你，整個公司充滿了興奮，領導階層致力於實現公司的全部潛力。

For the remainder of the year, there are four key priorities. One, cultivate our people. Two, improve liquidity. Three, accelerate the transformation. And four, operate the company across all functions, excellently day-in and day-out. To that end, we've created a one-page blueprint with all key initiatives and key performance indicators with clear targets that we are tracking, acting on, and communicating globally to, so we know how we're doing.

今年剩餘時間裡，有四個關鍵優先事項。一、培養人才。二是提高流動性。三是加快轉型。第四，日復一日地出色地經營公司的所有職能部門。為此，我們創建了一頁藍圖，其中包含所有關鍵舉措和關鍵績效指標，以及我們在全球範圍內追蹤、採取行動和溝通的明確目標，以便我們知道自己的進展。

This was recently rolled out to the entire company and we've instituted a monthly run the business meeting to drive a more urgent and proactive response to changing conditions. We believe this clarity and focus will allow us to better meet our commitments. The objective of these initiatives is to increase cash flow and create a consistently higher operating margin.

最近，這項措施已在整個公司範圍內推廣，我們每月召開一次業務會議，以推動對不斷變化的情況做出更緊急、更主動的反應。我們相信，這種明確性和重點將使我們能夠更好地履行我們的承諾。這些措施的目標是增加現金流並創造持續更高的營業利潤率。

Turning to liquidity and inventory management on slide 13. First, we'd like to discuss SIMPAS. The company has spent many years developing this groundbreaking technology. At this point, we believe that we've proven the concept of a multiproduct prescribed applications. However, at this stage of commercialization, we believe that the most prudent course with SIMPAS is to maintain the benefits of the technology internally and to find a partner within the precision application space to help advance product commercialization and market acceptance. This would enable us to significantly curtail spending on the technology and could lead to savings of approximately $6 million a year.

轉向幻燈片 13 上的流動性和庫存管理。首先，我們想討論一下 SIMPAS。該公司花費多年時間開發這項突破性技術。至此，我們相信我們已經證明了多產品指定應用程式的概念。然而，在商業化的現階段，我們認為與SIMPAS合作最謹慎的做法是在內部保持該技術的優勢，並在精密應用領域尋找合作夥伴，以幫助推進產品商業化和市場接受度。這將使我們能夠大幅削減技術支出，每年可節省約 600 萬美元。

In addition, we've taken deliberate actions to reduce inventory. To that end, we've recently updated our forecasting methodology and have implemented a new standard S&OP process involving a cross-functional team from the supply chain, manufacturing and commercial organizations. This initiative will allow us to better serve our customers and lower our working capital. Lastly, we've implemented stricter cost controls. These include limiting spending with outside vendors, reducing travel and entertainment and limiting the use of contractors.

此外，我們還採取了有意識的行動來減少庫存。為此，我們最近更新了預測方法，並實施了新的標準 S&OP 流程，涉及來自供應鏈、製造和商業組織的跨職能團隊。這項措施將使我們能夠更好地服務客戶並降低我們的營運資本。最後，我們實施了更嚴格的成本控制。其中包括限制與外部供應商的支出、減少旅行和娛樂以及限制承包商的使用。

In addition to our liquidity improvement targets, we've been working diligently to accelerate our business transformation as per slide 14. After conducting a thorough analysis, we've decided to implement a new, simpler customer-centric organization. We will have two global businesses, crop and non-crop, with centralized functions that are leveraged into the businesses, allowing them to be run with multifunctional business teams.

除了我們的流動性改善目標之外，我們也一直在努力加速我們的業務轉型（如幻燈片 14 所示）。經過徹底的分析後，我們決定實施一個新的、更簡單的以客戶為中心的組織。我們將擁有作物和非作物兩個全球業務，並利用這些業務的集中職能，使它們能夠與多功能業務團隊一起運作。

We expect to have this new structure in place early in 2025. We believe this will allow us to have clearer and more consistent strategies across the world, enabling us to more effectively deploy our resources and drive growth and improved profitability. Working on this new organizational design has already enabled us to identify redundant roles allowing us to trim about 4% of our global workforce. This will yield annualized savings of approximately $3 million.

我們預計這一新結構將於 2025 年初到位。我們相信，這將使我們能夠在全球範圍內制定更清晰、更一致的策略，從而更有效地部署資源、推動成長並提高獲利能力。致力於這項新的組織設計已經使我們能夠識別出冗餘的角色，從而使我們能夠削減約 4% 的全球員工隊伍。這將每年節省約 300 萬美元。

As part of this effort, we are also taking the opportunity to clearly define roles and responsibilities as well as moving decision authority through the organization to empower our employees to operate the company with greater agility and a greater sense of urgency.

作為這項努力的一部分，我們也藉此機會明確定義角色和職責，並在組織中轉移決策權，使我們的員工能夠以更大的敏捷性和更大的緊迫感來經營公司。

Secondly, we finished or wrapping up several cost savings initiatives that cut across raw material and logistics purchasing, manufacturing efficiency and skew rationalization. We believe that those efforts will yield annualized savings in excess of $5 million.

其次，我們完成或結束了多項成本節約舉措，涉及原材料和物流採購、製造效率和傾斜合理化。我們相信，這些努力每年將節省超過 500 萬美元。

Thirdly, we have several commercial initiatives involving pricing and customer strategy that are being implemented as we speak. The American Vanguard team has a high degree of confidence that these will yield annualized earnings improvement of over $5 million.

第三，我們有幾項涉及定價和客戶策略的商業計劃正在實施中。American Vanguard 團隊對這些措施將帶來超過 500 萬美元的年化收益成長充滿信心。

Lastly, we have also done a deep dive into our international strategy. As a result of that effort, we've identified numerous opportunities to improve performance that we believe will lead to over $2 million a year in improved earnings.

最後，我們也深入研究了我們的國際戰略。透過這項努力，我們發現了許多提高績效的機會，我們相信這些機會每年將帶來超過 200 萬美元的收入改善。

In summary, I'm proud to say that our team has come together very quickly. We're working collaboratively, the team is energized and we've accomplished quite a bit in a very short period of time. We've taken numerous actions to reduce spending to lower working capital, and we're dramatically accelerating our transformation, which touches all aspects of the company and will allow us to reach our full potential.

總而言之，我很自豪地說我們的團隊很快就團結起來了。我們通力合作，團隊充滿活力，我們在很短的時間內取得了巨大的成就。我們已經採取了許多措施來減少支出，以降低營運資本，我們正在大幅加快轉型，這涉及公司的各個方面，並使我們能夠充分發揮潛力。

I will now turn the call over to our Chief Financial Officer, David Johnson.

我現在將把電話轉給我們的財務長戴維·約翰遜。

Thank you, Mark. I will begin my comments with a summary of the terms of our amended credit agreement, followed by a recap of our performance for the second quarter and first half of 2024 and we'll close with comments on working capital and current liquidity.

謝謝你，馬克。我將首先概述我們修訂後的信貸協議的條款，然後回顧我們 2024 年第二季和上半年的業績，最後我們將對營運資本和當前流動性發表評論。

In order to ensure that we have ample working capital to operate the business within current conditions, we have reached agreement with our lenders to modify our senior credit facility as summarized on slide 16. The amendment includes first a reset of our total leverage covenant, which, as you may recall, ties borrowing capacity to trailing four-quarter adjusted EBITDA, allowing us to work through this challenging time for the global eye care market.

為了確保我們有充足的營運資金在當前條件下運營業務，我們已與貸方達成協議，修改我們的高級信貸安排，如幻燈片 16 所示。該修正案首先包括重置我們的總槓桿契約，您可能還記得，該契約將借貸能力與過去四個季度調整後的EBITDA 聯繫起來，使我們能夠度過全球眼保健市場這一充滿挑戰的時期。

And second, a higher basket for nonrecurring charges to allow us to follow through on our transformation projects without impacting borrowing capacity. This continued support from the lender comes with some restrictions. First, our interest rate will increase by 25 basis points when the leverage ratio exceeds four times. And for the present, we have prevented from repurchasing any shares, paying any dividends or making any acquisitions without lender's consent. The lenders have agreed that notwithstanding the term of the amendment. Once we can show sustained improvements in our performance, we can request it approval to reinstate one or more of these important capital allocation levers.

其次，更高的一次性費用籃子使我們能夠在不影響借貸能力的情況下完成轉型專案。貸款人的持續支持也有一些限制。首先，當槓桿率超過四倍時，我們的利率將增加25個基點。目前，未經貸方同意，我們不會回購任何股票、支付任何股利或進行任何收購。儘管有修訂條款，貸款人仍同意這一點。一旦我們能夠表現出業績的持續改善，我們就可以要求批准恢復這些重要的資本配置槓桿中的一個或多個。

Turning now to our financial performance, let's focus on sales, as you will see from slide 17, overall revenue from the quarter was down about $4.5 million or 3%, as compared to the same period of 2023. Our US crop business was challenged by just-in-time ordering and pressure from generics and recorded net sales that were down 7% as compared to the second quarter of 2023.

現在轉向我們的財務業績，讓我們專注於銷售，正如您從投影片 17 中看到的那樣，與 2023 年同期相比，本季的總體收入下降了約 450 萬美元，即 3%。我們的美國作物業務受到即時訂單和仿製藥壓力的挑戰，淨銷售額較 2023 年第二季下降 7%。

On the other hand, during the quarter, our US non-crop business was a bright spot, with sales growing 13% compared to last year. Finally, net sales of our international business declined by 2% as compared to the comparable period of the prior year.

另一方面，本季我們的美國非農作物業務是一個亮點，銷售額比去年增長了13%。最後，我們的國際業務淨銷售額較上年同期下降了2%。

Turning to the first half of 2024 on slide 18, overall revenue was up about 3% compared to the comparable period of 2023, while net sales of our US crop and our international businesses were essentially flat with the prior year. US non-crop sales rose by 20% during the same period.

轉向幻燈片 18 上的 2024 年上半年，整體收入與 2023 年同期相比增長約 3%，而我們美國作物和國際業務的淨銷售額與上一年基本持平。同期美國非農作物銷售額成長了 20%。

Turning to slide 19, with the decline in second quarter net sales and some product mix changes, gross profit for the quarter decreased by about 12 -- by approximately 12%. This decline primarily arose from lower net sales of our US crop products, which generally carry higher average margins. In addition, we recorded lower factory overhead costs recovery as we work to control inventory and working capital. Overall, gross margins reduced to 29% from 32% of sales. On the plus side, our inventories ended marginally lower than our internal target for this end of the second quarter, which was encouraging.

轉向投影片 19，由於第二季淨銷售額的下降和一些產品組合的變化，該季度的毛利下降了約 12，即約 12%。這一下降主要是由於我們美國農作物產品的淨銷售額下降，而這些產品的平均利潤率通常較高。此外，由於我們努力控制庫存和營運資金，我們的工廠管理費用回收率較低。總體而言，毛利率從銷售額的 32% 降至 29%。從好的方面來看，我們的庫存最終略低於第二季末的內部目標，這是令人鼓舞的。

With respect to the first six months of 2024, net sales were up 2% and gross profit was flat with the comparable period of 2023, and gross profit margin declined slightly to 31% from 32% of sales. As you will see from slide 21, operating expenses for the second quarter of 2024 increased by approximately 20% over the comparable period in 2023. The primary driver for this increase were nonrecurring expenses arising from activities to transform both our business structure and process and our digital platform.

2024年前六個月，淨銷售額成長2%，毛利與2023年同期持平，毛利率從銷售額的32%小幅下降至31%。正如您從投影片 21 中看到的那樣，2024 年第二季的營運費用比 2023 年同期成長了約 20%。這一成長的主要驅動力是我們的業務結構和流程以及數位平台轉型活動所產生的非經常性費用。

These transformation costs include third party consulting costs in support of the change initiatives just discussed and severance costs for the former CEO. We also incurred some other one-time costs. Without these out of the ordinary costs, operating expenses would have declined by 5% for the quarter as compared to last year. Similarly, for the first half of 2024 operating expenses rose by 12%, including approximately $10.5 million from transformation, severance and other onetime type costs.

這些轉型成本包括支持剛才討論的變革措施的第三方諮詢成本以及前執行長的遣散費。我們也產生了一些其他一次性成本。如果沒有這些異常成本，本季的營運費用將比去年下降 5%。同樣，2024 年上半年的營運費用成長了 12%，其中包括約 1,050 萬美元的轉型、遣散費和其他一次性成本。

Turning now to inventory on slide 23, you will see our inventory trends on a quarterly basis since the start of 2023. We are moving quickly to reduce inventory levels by monitoring factory activity, building only to demand, scaling back procurement of third-party products and selling out of smaller nonstrategic inventory positions. Through these efforts, we are focused on driving down inventory levels to reach our target of 34% of net sales by year end.

現在轉向幻燈片 23 上的庫存，您將看到自 2023 年初以來我們的季度庫存趨勢。我們正在迅速採取行動，透過監控工廠活動、僅根據需求生產、減少第三方產品採購以及出售較小的非策略性庫存部位來降低庫存水準。透過這些努力，我們致力於降低庫存水平，以達到年底前佔淨銷售額 34% 的目標。

Inventory drives our working capital levels, which in turn drives our debt. Debt ended at $211 million on June 30, 2024. That was slightly lower than our internal target. So that was a pleasing result following a lot of focus across the entire company. Furthermore, it is interesting to note that in the first two weeks of July, we collected more than $40 million from our US customers and additional funds through our international subsidiaries. Accordingly, we were able to drive debt down at the start of Q3 before starting to borrow again as the annual cycle continues.

庫存推動我們的營運資本水平，進而推動我們的債務。截至 2024 年 6 月 30 日，債務金額為 2.11 億美元。這略低於我們的內部目標。因此，經過整個公司的高度關注，這是一個令人高興的結果。此外，值得注意的是，在 7 月的前兩週，我們從美國客戶籌集了超過 4000 萬美元，並透過我們的國際子公司籌集了額外資金。因此，我們能夠在第三季初降低債務，然後隨著年度週期的繼續再次開始借款。

That sums up my detailed comments. And with that, I'll turn the call back to Tim.

這總結了我的詳細評論。然後，我會將電話轉回給蒂姆。

Thank you, David. Our last topic is our full year financial outlook. Year to date, our sales are actually higher than they were last year. Nevertheless, as I had mentioned earlier, weakness in the agricultural economy has had an impact on both year to date sales and profit performance. Like a number of our competitors, we foresee stable demand within the crop segment over the second half of 2024. At the same time, we are cognizant of the many factors that could affect the ag market. Commodity prices, interest rates, geopolitical activity, channel inventory and the like further, as David mentioned, controlling working capital will also require us to optimize factory activity while working through our inventory.

謝謝你，大衛。我們的最後一個主題是我們的全年財務展望。今年迄今為止，我們的銷售額實際上高於去年。然而，正如我之前提到的，農業經濟的疲軟對年初至今的銷售和利潤表現都產生了影響。與我們的許多競爭對手一樣，我們預計 2024 年下半年農作物領域的需求將保持穩定。同時，我們認識到可能影響農業市場的許多因素。正如大衛所提到的，大宗商品價格、利率、地緣政治活動、通路庫存等，控制營運資本也要求我們在處理庫存的同時優化工廠活動。

In light of these considerations, like a number of our competitors, we are decreasing our full year 2024 targets. And in this case, we are targeting adjusted EBITDA to be between $40 million and $50 million, down from $60 million to $70 million. We are also decreasing our sales target, which we now expect to be in the range of $565 million to $580 million. This results down 2% to flat versus our prior targeting of sales, up 6% to 9%.

考慮到這些因素，與我們的許多競爭對手一樣，我們正在降低 2024 年全年目標。在這種情況下，我們的調整後 EBITDA 目標從 6,000 萬美元到 7,000 萬美元下調至 4,000 萬美元到 5,000 萬美元之間。我們也降低了銷售目標，目前預計在 5.65 億美元至 5.8 億美元之間。與我們先前的銷售目標（成長 6% 至 9%）相比，這一結果下降了 2% 至持平。

As we mentioned earlier, we are conducting a CEO search and have retained the well respected ag tech search firm of Kincannon & Reed in that effort. You will note the attributes of the ideal candidate are some of them on slide 27. And as this search progresses, we will provide updates to the market as appropriate.

正如我們之前提到的，我們正在尋找首席執行官，並保留了備受推崇的農業科技獵人頭公司 Kincannon & Reed。您會注意到投影片 27 中列出了理想候選人的一些特質。隨著搜尋的進展，我們將酌情向市場提供最新資訊。

So let's review what we have done in the last four weeks as summed up on slide 29. First, we have formed the OCEO to unleash the company's earnings potential endowing it with a full complement of executive skills, both to manage day-to-day operations and to steer the enterprise, while we search for a CEO. Second, we have acted quickly to reset our credit agreement and to ensure greater flexibility of working capital.

讓我們回顧一下過去四個星期我們所做的事情，如幻燈片 29 所總結的那樣。首先，我們成立了 OCEO，以釋放公司的獲利潛力，賦予其全套的執行技能，既可以管理日常運營，又可以指導企業，同時我們也在尋找執行長。其次，我們迅速採取行動重新調整信貸協議，確保營運資金有更大的彈性。

Third, we have redoubled our efforts to reduce expenses and maximize liquidity in the short to midterm, including workforce reduction. And fourth, we are driving transformation, both digital and business related with a goal of achieving a 15% EBITDA margin in 2026 and beyond.

第三，我們在中短期內加倍努力減少開支並最大限度地提高流動性，包括減少勞動力。第四，我們正在推動數位化和業務轉型，目標是在 2026 年及以後實現 15% 的 EBITDA 利潤率。

In closing, our focus is to provide our shareholders with the highest possible return. We are all shareholders and we know that the long-term future of this company depends upon our efforts to return the company to greater profitability while transforming it into a leaner engine for growth. And let me put a finer point on it. We at the OCEO have been given a mandate to change the company for the better. We are the agents of that change and the time for that change is now.

最後，我們的重點是為股東提供盡可能高的回報。我們都是股東，我們知道，公司的長遠未來取決於我們為公司恢復更大盈利能力、同時將其轉變為更精簡的成長引擎所做的努力。讓我進一步闡述這一點。我們 OCEO 的使命是讓公司變得更好。我們是這項變革的推動者，現在正是改變的時機。

With that, I'll open up the call for questions. Alicia?

接下來，我將開始提問。艾麗西亞？

Thank you. (Operator Instructions)

謝謝。（操作員說明）

Scott Fortune, ROTH Capital.

史考特‧福瓊，羅斯資本。

Good afternoon and thanks for stepping through all the color and changes going on board here. You mentioned, kind of the transformation and accelerating that. Just kind of step us through, you see $50 million in cost synergies and savings, kind of expectation of that, and kind of what are the steps to kind of really accelerate these costs, and kind of timing to see these cost savings, kind of flow through to the P&L and the financials for the company? Just kind of a sense of that acceleration moving forward here.

下午好，感謝您逐步了解船上的所有顏色和變化。你提到了一種轉變並加速了這種轉變。請讓我們逐步了解一下，您會看到 5000 萬美元的成本協同效應和節省，對此的期望，以及真正加速這些成本的步驟是什麼，以及看到這些成本節省的時機，流向公司的損益表和財務狀況？只是一種在這裡加速前進的感覺。

Sure. This is Mark Bassett. I'll take a stab at answering that. I think again, there's multiple tracks. So starting with the others, a procurement track. And the logistics savings we should start seeing sometime in the third quarter I believe, and should realize those full savings through the end of 2025. The raw material -- there's a raw material track as well, which we're in the middle of the bid process for that, and should begin to see those later this year, but won't see the full benefit until probably the end of next year, because it takes time for those savings to roll through our income statement.

當然。這是馬克·巴塞特。我會嘗試回答這個問題。我又想，有多個軌道。因此，從其他方面開始，採購軌道。我相信，我們應該在第三季的某個時候開始看到物流節省，並且應該在 2025 年底之前實現全部節省。原材料——還有一個原材料賽道，我們正處於投標過程中，應該會在今年晚些時候開始看到這些，但可能要到年底才能看到全部效益。轉入我們的損益表。

Then you've got a number of commercial initiatives which again will begin probably late this year or early next year. And so -- but by the end of 2025, we expect to see the full $15 million beginning to hit our -- in total hitting our earnings by the beginning of 2026. It will ramp up beginning late this year and get to full $15 million by the end of next year.

然後，您將有許多商業計劃，這些計劃可能會在今年年底或明年初再次開始。因此，到 2025 年底，我們預計到 2026 年初，我們的總收入將達到 1,500 萬美元。該資金將從今年年底開始增加，到明年年底將達到 1500 萬美元。

Got it. I appreciate that detail. And just trying to dig into the guidance here a little bit, and more the current North American ag market and the international side. But just wanted to get a sense, obviously, you brought down numbers pretty significantly. What has changed so significantly, we saw, kind of, a weaker ag market for that standpoint.

知道了。我很欣賞這個細節。只是想深入了解這裡的指導，以及當前的北美農業市場和國際方面。但只是想了解一下，顯然，你顯著地降低了數字。從這個角度來看，發生瞭如此顯著的變化，我們看到了農業市場的疲軟。

And just provide a little more color on the visibility around fourth quarter, that's your big quarter, and kind of your sense that the confidence level of the fourth quarter being kind of the strong quarter as normal, or we going to see push outs potentially for 2025 (inaudible)?

只需提供更多關於第四季度左右的可見性的信息，這是您的大季度，並且您感覺第四季度的信心水平是正常的強勁季度，否則我們將看到潛在的推出2025 年（聽不清）？

Yeah, maybe, Mason Bennett is on the line with us. And he runs our US crop business. Mason, your thoughts on the US crop sector, looking at the 2025 season, and its relative stability.

是的，也許梅森·貝內特正在和我們通話。他經營我們的美國農作物業務。梅森，您對 2025 年作物季節及其相對穩定性的看法。

Yes. Scott, thank you for the question. Mason Bennett here. Just to comment a little bit on your Q4 inquiry, and then, moving into 2025. Yes, we did look to lower a little bit in Q4. We understand what's happening in the ag industry. We know that the ag economy, that the challenges we're having. A lot of this comes back to customers trying to manage again, manage down their channel inventory, which had a little bit of favorable outcome.

是的。斯科特，謝謝你的提問。梅森·貝內特在這裡。只是對您的第四季度調查發表一點評論，然後進入 2025 年。是的，我們確實希望在第四季有所下降。我們了解農業產業正在發生的事情。我們知道農業經濟，也知道我們面臨的挑戰。這很大程度取決於客戶試圖再次管理、管理通路庫存，這取得了一些有利的結果。

But what we're seeing now, Scott, is these customers are beginning to manage their cash flow, and look at just-intime purchases. So we believe that although we see a steady purchase through Q4, we will see customers actually probably moving to more just in time in Q1 of 2025 to begin to bring purchases in for the grower. So that's really what's driven a lot of that. We don't think that it's down really share. It's more of a phasing of the business.

但史考特，我們現在看到的是，這些客戶開始管理他們的現金流，並考慮及時購買。因此，我們認為，儘管我們看到第四季度的採購量穩定，但我們實際上會看到客戶可能會在 2025 年第一季及時轉向，開始為種植者帶來採購。所以這確實是很多事情的推動因素。我們認為份額並沒有真正下降。這更多的是業務的階段性。

And a real quick follow up on that. The farmers health and economics still remains very positive and strong. Are we starting to see Praxair, obviously with commodity prices down, just kind of your sense of the farmer's health overall?

並對此進行了真正的快速跟進。農民的健康和經濟仍然非常積極和強勁。我們是否開始看到普萊克斯，顯然隨著大宗商品價格的下降，您對農民整體健康狀況的看法？

Yeah. That's a very good question. We're seeing a lot of movement around the ag economy and pricing. So unfortunately, we've seen commodity prices slide. Corn and soybeans have dropped pretty significantly over the last several months. We are beginning to see reports that net farm incomes dropping somewhere near 25% versus last year, Scott.

是的。這是一個非常好的問題。我們看到農業經濟和定價方面發生了很多變化。不幸的是，我們看到大宗商品價格下滑。過去幾個月，玉米和大豆價格大幅下跌。我們開始看到有報道稱農場淨收入比去年下降了近 25%，Scott。

So that puts a lot of pressure on timing to buy for these customers. We don't think that it's going to reduce the amount that they necessarily purchase especially around some of our portfolio, it just comes back more to timing.

因此，這給這些客戶的購買時機帶來了極大的壓力。我們認為這不會減少他們必須購買的數量，特別是圍繞我們的某些投資組合，這只是更多地回歸到時機。

But the farm economy and the health is not good. It was referenced by Tim earlier, at many of our competitors, you can see what their outlook is. And we're seeing other parts of the industry of equipment, and other segments in the ag economy taking some pretty drastic moves as well around OpEx and expenses. So that's all a reflection of the ag economy, and the drop that we've seen here over the last several months.

但農場經濟和衛生狀況不佳。蒂姆早些時候提到過，在我們的許多競爭對手中，你可以看到他們的前景是什麼。我們看到設備產業的其他部分以及農業經濟的其他領域也在營運支出和費用方面採取了一些相當大的措施。所以這都是農業經濟的反映，也是我們在過去幾個月看到的下降的結果。

Really appreciate the color. And then --

真的很欣賞這個顏色。進而--

Scott, this is Tim. Yeah, I know, it sounds like we're ganging up on you. Yeah they were growers had recently been before Congress seeking to have additional consideration in connection with the Farm Bill, looking at the profitability of that growers are experiencing and there's a decrement in it. That being said, you're looking at some other factors here. Yes, commodity prices have been a bit of a malaise. Interest though -- interest rates look like, I mean, ask me tomorrow, but somewhat more encouraging. So the cost of money is a thing that is on their minds as well.

斯科特，這是蒂姆。是的，我知道，聽起來我們正在聯合起來對付你。是的，他們是種植者，最近在國會尋求與農業法案相關的額外考慮，看看種植者正在經歷的盈利能力，其中是否有下降。話雖如此，您在這裡還要考慮一些其他因素。是的，大宗商品價格有些低迷。不過，利息——我的意思是，明天問我，利率看起來像是這樣，但更令人鼓舞。因此，金錢成本也是他們關心的問題。

And then, finally, I mean, I think Mason would agree with this. Growers will still be growing and they'll still be requiring inputs, but I think we can expect them to move -- to continue this, sort of fiscal rectitude in their procurement practices, in light of the last trailing several quarters, and particularly with respect to cost of money as it relates to commodity pricing.

最後，我的意思是，我認為梅森會同意這一點。種植者仍將成長，他們仍將需要投入，但我認為我們可以預期他們會採取行動——鑑於過去幾個季度的情況，特別是在採購實踐中繼續這種財政廉潔的做法。的貨幣成本。

That's really helpful. I appreciate that. And if I could get one more, and just, kind of, touch base on Dacthal and the recent EPA news. Your sense of any litigation, or any issues with that, kind of moving forward, kind of the risk there. And just want to get a sense for, do you have potential object products that can replace that Dacthal, just kind of what's in the pipeline from your product side, and the Green Solutions side which you put a lot more focus on to drive growth here?

這真的很有幫助。我很欣賞這一點。如果我能再得到一個，只是，有點，基於 Dacthal 和最近的 EPA 新聞。你對任何訴訟或與之相關的任何問題的感覺，都在向前推進，那裡存在風險。只是想了解一下，您是否有可以替代 Dacthal 的潛在目標產品，就像您的產品方面和綠色解決方案方面正在醞釀的產品一樣，您更加關注綠色解決方案方面，以推動這裡的增長？

Yeah. I think, maybe answering it from back to front. Yeah, we will be placing an emphasis on expanding other product lines. I mean, the Green Solutions products have a different effect than our biorationals -- I'm sorry, Dacthal does than our biorationals and Green Solutions products. Yes, to invest in and continue to expand Green Solutions is certainly an important initiative that we have, and we continue to drive it.

是的。我想，也許可以從後到前回答。是的，我們將專注於擴大其他產品線。我的意思是，綠色解決方案產品與我們的生物理性產品具有不同的效果 - 抱歉，Dacthal 的效果與我們的生物理性產品和綠色解決方案產品不同。是的，投資並繼續擴展綠色解決方案無疑是我們的一項重要舉措，我們將繼續推動它。

With respect to other issues that Dacthal raises, and we are a very highly regulated industry, and we continue to work, I think constructively, and in good faith through it all with EPA, we have like our competitors, many products are always under registration review. But let me go back to the earliest. And the question is really one of risk and litigation and the like, we're not aware of any at present. Obviously, the public relations environment is adverse to this compound presently.

關於 Dacthal 提出的其他問題，我們是一個監管非常嚴格的行業，我認為我們將繼續與 EPA 建設性地、真誠地合作，就像我們的競爭對手一樣，許多產品始終處於註冊狀態審查。但讓我回到最早的時候。問題其實是風險和訴訟等問題，我們目前還不知道。顯然，目前的公關環境對該院不利。

I will maybe take a minute if you got a minute, Scott, to give a sort of a sense of the context. I don't think the -- maybe the regulatory context or the where the press gone with this necessarily is giving fair coverage to how it works in the world of registration. So let me just frame it up little bit. It might help to give a little context to it.

斯科特，如果你有時間的話，我可能會花一點時間來介紹一下背景。我認為，也許監管環境或媒體對此的報道不一定公平地報道它在註冊領域的運作方式。所以讓我稍微概括一下。提供一些背景資訊可能會有所幫助。

I think, maybe about 15 years ago, EPA started focusing on endocrine functions in the body, and they established things like the Endocrine Disruptor Screening Program, EDSP, which they were requiring any number of AIs, active ingredients that is registered products to undergo. That moved forward, and it culminated some more refined testing, the likes of which are at the basis of what happened with Dacthal.

我想，也許大約15 年前，EPA 開始關注體內的內分泌功能，他們建立了諸如內分泌幹擾物篩選計劃(EDSP) 之類的東西，他們要求任何數量的AI、註冊產品的活性成分都要經過測試。這個過程不斷向前推進，並最終完成了一些更精細的測試，這些測試是 Dacthal 發生的情況的基礎。

And that test was a -- it's a comparative thyroid assay. And it was really the agencies looking at that test were, they were testing laboratory rats. There was prenatal fetal rats, neonates, and mothers looking to see if there was any effect that Dacthal might have on those rodents. And they found an effect.

此測試是一種比較性甲狀腺檢測。事實上，負責該測試的機構正在測試實驗室老鼠。研究人員對產前胎鼠、新生兒和母親進行了研究，看看 Dacthal 是否對這些囓齒類動物有任何影響。他們發現了效果。

And by the way, that was a study they had requested that we do and we did that study. And in looking at it, the agency would do what their scientists typically do. There's no human testing that's done these days, right. That's not legal. It's not humane. So all of this is done with laboratory animals.

順便說一句，這是他們要求我們做的一項研究，我們也做了這項研究。在研究這個問題時，該機構會做他們的科學家通常會做的事情。現在還沒有進行人體測試，對吧。那是不合法的。這不人道。所以這一切都是用實驗動物完成的。

And what happened in this case, as they usually do, is they take what they perceive as an effect and here it was only on the fetal rodents. And they extrapolate that, and they do, kind of, an interspecies translation, and they say, well, there could be a risk of harm for human fetuses.

在這種情況下，正如他們通常所做的那樣，他們將他們所感知的視為一種影響，而這裡這種影響只發生在囓齒動物胎兒身上。他們推斷，他們確實做了一種跨物種的翻譯，他們說，嗯，可能存在對人類胎兒造成傷害的風險。

And in that vein, then they would say, either help us out with trying to figure a way to mitigate that, which is why we ended up submitting a reduced label. And -- or is there other data that could give us enough information to, let's say, alleviate our uncertainty. And ultimately, after many months, we were not able to do so.

本著這種精神，他們會說，要么幫助我們找到一種方法來緩解這種情況，這就是為什麼我們最終提交了一個簡化的標籤。或者是否有其他數據可以為我們提供足夠的資訊來減輕我們的不確定性。最終，幾個月後，我們沒能做到這一點。

So my point, Scott, here really is that, what we're looking at here is, is the agency doing -- making a preventative move. It's a prophylactic, kind of a thing to say, let's stop the train on this product, because the data that we have says that we believe that there could be this effect. We don't -- looking at it from the company's point of view, and from a registrant's, we don't have more data. It would take probably years to develop data from the other end of things to say, I found a person with a certain condition, and I can trace it all the way back to an exposure in utero.

所以我的觀點是，史考特，我們在這裡看到的是，該機構正在採取預防措施。這是一種預防措施，可以說是讓我們停止使用該產品，因為我們掌握的數據表明我們相信可能會產生這種影響。我們沒有－從公司的角度來看，從註冊人的角度來看，我們沒有更多的數據。從事情的另一端開發數據可能需要數年時間才能說，我找到了一個患有某種病症的人，我可以將其追溯到子宮內的暴露。

my point being that we're not looking here at, there's been no report of actual injury to anyone, there's been no report of actual harm. It's the EPA taking measures that they believe are important to ensuring that there's safety in a preventive way. So that's kind of the context. I just -- I'm not sure that's coming out in many of the things that I have read. But if that's of any use to you then I thought maybe I would at least volunteer there.

我的觀點是，我們不是在看這裡，沒有任何人受到實際傷害的報告，也沒有任何實際傷害的報告。美國環保署正在採取他們認為對於以預防性方式確保安全非常重要的措施。這就是背景。我只是——我不確定我讀過的許多東西是否都體現了這一點。但如果這對你有任何用處，那麼我想也許我至少會在那裡做志工。

No. That's very helpful. It's a great context. And appreciate how you framed it. And that's very helpful. I will jump -- that's it for me. And I'll jump back in queue. Thanks.

不。這非常有幫助。這是一個很好的背景。並欣賞你如何建構它。這非常有幫助。我會跳——對我來說就是這樣。我會插回隊列。謝謝。

Thank you.

謝謝。

Ben Klieve, Lake Street Capital Markets.

Ben Klieve，湖街資本市場。

All right. Thanks for taking my questions. My first one is regarding the 2024 guidance and the outlook for 2026 once all your initiatives have been implemented. Your current guidance implies the EBITDA margin midpoint in the high 7% range, really ratcheted down from where you were before. But your 2026 EBITDA margin target of 15% remains unchanged from a few months ago.

好的。感謝您回答我的問題。我的第一個目標是關於 2024 年指引以及所有措施實施後 2026 年的展望。您目前的指導意味著 EBITDA 利潤率中點在 7% 的高位範圍內，實際上比之前的水平有所下降。但 2026 年 EBITDA 利潤率目標為 15%，與幾個月前相比保持不變。

I'm wondering if you can help us square that. The -- clearly conditions today are tough, but the transformation targets that you have from an expense perspective would help, but not get anywhere close to 15% EBITDA margin 24 months from now. So can you help us understand why you feel comfortable still having 15% EBITDA margins two years from now as your target given all of the dynamics underway right now?

我想知道你是否能幫我們解決這個問題。顯然，今天的情況很艱難，但從費用角度來看，轉型目標會有所幫助，但 24 個月後的 EBITDA 利潤率不會接近 15%。那麼，您能否幫助我們理解，鑑於目前的所有動態，您為何仍願意將兩年後 15% 的 EBITDA 利潤率作為您的目標？

Yeah. I can certainly at the – this is Tim, at the top end, and let Mark fill in. So the factors that would be contributing to an improvement in an EBITDA margin wouldn't just be efficiency. It would also be recovery vis-a-vis consistency and sales of higher margin products over a period of time. I think we're looking right now at depressed sales over the 12 month trailing period, and we would expect that 2025 is not going to be necessarily subject to the same vagaries that we have currently undergone.

是的。我當然可以──這是提姆，在最頂端，讓馬克填補。因此，有助於提高 EBITDA 利潤率的因素不僅僅是效率。它還將在一段時間內恢復較高利潤產品的一致性和銷售。我認為我們現在正在關注過去 12 個月的銷售低迷，並且我們預計 2025 年不一定會遇到我們目前所經歷的同樣的變幻莫測的情況。

So if we take an improved top line performance, and conjoin it with an improved number of efficiencies that we can bring to bear, as Mark has described, those things taken together should conspire to produce an EBITDA margin that is in that 15% range as we're seeking.

因此，如果我們提高營收績效，並將其與我們可以提高的效率相結合，正如馬克所描述的那樣，這些因素加在一起應該會產生 15% 範圍內的 EBITDA 利潤率，如下所示：我們正在尋找。

Admittedly, what you're looking at now does not appear to be representative of what could be done in the future. But the whole purpose of the transformation was -- if you look at what has been more of the historical norm on an EBITDA margin, surely it is feasible that with a more efficient enterprise given with stable sales of well margined products, we could arrive at that 15% at a full year basis in 2026.

誠然，您現在所看到的似乎並不代表未來可以做的事情。但轉型的全部目的是——如果你看看 EBITDA 利潤率的歷史標準，你會發現，如果企業效率更高，利潤豐厚的產品能夠穩定銷售，那麼我們可以得出以下結論： 2026 年全年成長15%。

I would just add to that, that on top of improving conditions, I think these are what I would say, we're very comfortable with these numbers, and we feel like there's upside to all of the numbers that we've talked about. And I think there's a lot of benefits sometimes that are hard to quantify. For example, with a much simpler, more focused organization, and better allocation of resources. There's a lot of potential value there that you can unleash. It's hard to quantify at this stage of the transformation.

我想補充一點，除了改善條件之外，我想這些就是我要說的，我們對這些數字非常滿意，而且我們覺得我們討論過的所有數字都有好處。我認為有時有很多難以量化的好處。例如，擁有更簡單、更集中的組織以及更好的資源分配。那裡有很多可以釋放的潛在價值。在轉型的現階段很難量化。

So, I personally believe $15 million is a number I'm very comfortable with, but I think there's a lot of upside to that number as well, as we get into this and continue to build on it, and to develop it. I think also, we talked about some initiatives in the liquidity section there are also recurring benefits. So we do continue down the path of ramping down spending on SIMPAS, that's quite a bit of money as well that we've been spending every year, that if we do slow that down, we'll drop to the bottom line as well.

所以，我個人認為 1500 萬美元是一個我非常滿意的數字，但我認為這個數字也有很多好處，因為我們進入這個領域並繼續在此基礎上繼續發展並發展它。我還認為，我們討論了流動性部分的一些舉措也有經常性的好處。因此，我們確實繼續走在 SIMPAS 上減少支出的道路，這也是我們每年花費的一大筆錢，如果我們確實放慢速度，我們也會下降到底線。

Again, the S&OP I think will unleash, we've had a number of lost sales over the last handful of years because of a process that was not as far advanced as it could be. And so I think there's a lot of secondary and tertiary benefits that we haven't captured, that we will capture as this transformation continues.

再說一遍，我認為 S&OP 將會釋放出我們在過去幾年中由於流程不夠先進而造成的一些銷售損失。因此，我認為我們還沒有獲得許多第二和第三級的好處，隨著這種轉變的繼續，我們將獲得這些好處。

Yeah. And it's also -- this is a very -- I mean, as you can appreciate, and I know that when calculating return on investment, we all would like to be as definitive as possible. What we are doing effectively now is, this is a living and breathing business organism, we're kind of -- we're working this thing up, kind of, like T.S. Eliot might in many senses, it's the background, it's the foreground. And the impact of those things will be revealing a picture that is better than it was, that has greater clarity, it has greater strength, I think going forward.

是的。我的意思是，正如你所理解的，我知道在計算投資回報時，我們都希望盡可能明確。我們現在正在有效地做的是，這是一個活生生的商業有機體，我們正在努力解決這個問題，有點像 T.S.艾略特可能在很多意義上，它是背景，它是前景。我認為，這些事情的影響將揭示出比以前更好、更清晰、更有力量的圖像。

Got it. That's helpful. You are more well-read than me. I'll look up what that T.S. Eliot reference was (laughter). And all that makes sense. And I certainly understand, kind of how dynamic the environment is right now, and how many moving pieces you guys are, kind of, working through at the same time. So appreciate the context there.

知道了。這很有幫助。你比我讀書多。我會查一下那個 T.S.艾略特的參考文獻是（笑聲）。這一切都是有道理的。我當然理解，現在的環境是多麼充滿活力，你們同時工作著多少動人的部分。所以欣賞那裡的背景。

One question I have on your legacy portfolio and Green Solutions. It sounds like from all the comments you've made today that you all remain quite enthusiastic about that opportunity. Can you talk about, kind of, what transformations specifically would take place within Green Solutions, yeah, in any material way or is that business going to, kind of, continue on as it has?

我有一個關於您的遺留產品組合和綠色解決方案的問題。從你們今天發表的所有評論來看，你們都對這個機會仍然充滿熱情。您能否談談綠色解決方案中具體會發生哪些轉變，是的，以任何實質方式，或者該業務是否會繼續像現在這樣？

Yeah. I'll take a stab at it. I think the company has had a lot of success in Green Solutions. I think one of --this is one of those areas where again, the transformation, I think has an opportunity to allow us to be even more successful.

是的。我會嘗試一下。我認為該公司在綠色解決方案方面取得了巨大的成功。我認為，這是那些領域之一，我認為轉型有機會讓我們取得更大的成功。

With us aligning into two global businesses, the crop and non-crop business, I think we'll be able to develop very business, customer centric strategies to figure out ways to have a more coherent growth strategy than we have historically. Very targeted allocation of resources, very targeted allocation of capital, people, R&D strategies that will allow us to accelerate the growth of that portfolio even more so than we've had thus far. So I think that's another area where the transformation can really help us focus our resources and drive growth faster than we have in the past.

隨著我們致力於作物和非作物業務這兩個全球業務，我認為我們將能夠制定非常商業化、以客戶為中心的策略，以找到比我們歷史上更連貫的成長策略的方法。非常有針對性的資源分配，非常有針對性的資本、人員和研發策略分配，這將使我們能夠比迄今為止更快地加速該投資組合的成長。因此，我認為這是轉型真正可以幫助我們集中資源並比過去更快地推動成長的另一個領域。

And then I think, one other point is, with respect to some of our like bacteria based fermented products, we are in the midst of working on state registrations so that we can expand the breadth of the market that we are serving with that -- these products would be for plant health purposes primarily. These are also things that would improve soil health insofar as the microbiome is concerned by the root mass.

然後我認為，另一點是，對於我們的一些類似的基於細菌的發酵產品，我們正在進行國家註冊，以便我們可以擴大我們所服務的市場廣度——這些產品主要用於植物健康目的。就微生物組與根群的關係而言，這些也能改善土壤健康。

And one of the reasons for our level of enthusiasm with the portfolio is that there is this continued evolving emphasis probably being led by the EU in digital farming and regenerative ag. These were -- the focus is on how to enhance the value of your most prized asset as a grower, that is to say, your soil how to sustain it. Even in some places like Germany they are the authorities are requiring growers to test the level of nitrogen in the soil before applying any kind of synthetic nitrogen fertilizer. And the products that we have would be helping with phosphorus, nitrogen, potassium uptake, for example. And so this fits well – this product line fits well into, let's say, a green sort of direction that agriculture is taking globally.

我們對這項投資組合充滿熱情的原因之一是，歐盟在數位農業和再生農業方面可能正在引領不斷發展的重點。這些重點是如何提高作為種植者最珍貴資產的價值，也就是說，你的土壤如何維持它。即使在德國等一些地方，當局也要求種植者在施用任何合成氮肥之前測試土壤中的氮含量。例如，我們擁有的產品將有助於磷、氮、鉀的吸收。因此，這非常適合——可以說，該產品線非常適合全球農業正在採取的綠色方向。

If I may comment on North America as well, Ben, just specifically what we've done with our sales organization in the US, and we're evolving in Canada as well is, our Green Solutions is one of our key pillars of strategy within our sales organization. There's a big focus there because it's one of our fastest growing segments. The profits and margins are good in this space for us. We're working with external partners that previously had been announced by folks like New Leaf and we're building a franchise around seed inclusion products. But we're also looking internally at development projects and what we can bring to the table to continue to grow our portfolio.

如果我也可以評論北美，Ben，具體來說我們在美國的銷售組織所做的事情，以及我們在加拿大的發展，我們的綠色解決方案是我們內部策略的關鍵支柱之一我們的銷售組織。這是我們關注的重點，因為它是我們成長最快的細分市場之一。對我們來說，這個領域的利潤和利潤率都很好。我們正在與 New Leaf 等公司先前宣布的外部合作夥伴合作，我們正在圍繞種子包含產品建立特許經營權。但我們也在內部研究開發專案以及我們可以採取哪些措施來繼續擴大我們的產品組合。

And I just want to note, I think it may have been mentioned before, but AMVAV was named a top 10 supplier of biologicals in the US by CropLife. So we're proud of what we have done to this point. But we're going to focus. We're going to put in the energy and effort. We're going to specialize in areas to ensure that we continue to build on the growth that we have up to this point. So that goes back to what Mark referenced as accelerating our transformation and focusing on specific product strategies. So that's what we're doing in that space.

我想指出的是，我想之前可能已經提到過，AMVAV 被 CropLife 評為美國十大生物製品供應商。因此，我們對迄今為止所做的事情感到自豪。但我們要集中精力。我們將投入精力和努力。我們將專注於某些領域，以確保我們繼續在迄今為止的成長基礎上繼續發展。這又回到了馬克所說的加速我們的轉型並專注於特定的產品策略。這就是我們在這個領域所做的事情。

Got it. All helpful comments. One last one for me, and I'll get back in queue. You commented on your target for inventory to fall from 42% at the end of this quarter, or at the end of the second quarter, excuse me, down to 34% ending the year. On a high level working capital in general, I'm wondering if you can kind of lay out any expectations for working capital that you're going to be able to rip out of the balance sheet here from the levels ending second quarter through the end of this calendar year?

知道了。所有有用的評論。給我最後一張，我會重新排隊。您表示庫存目標將從本季末或第二季末的 42% 降至年底的 34%。總體而言，就高水準的營運資本而言，我想知道您是否可以對營運資本提出任何預期，從第二季末到年底，您將能夠從資產負債表中剔除這些預期今年的？

Yeah. I think it's typical of the company's annual cycle that we see working capital expand during the first two or three quarters of the year. The expansion usually slows in the third quarter, and then comes down in the fourth. So we are expecting to see working capital come down $70 million to $80 million over the next -- over the balance of the year.

是的。我認為這是公司年度週期的典型特徵，我們看到營運資本在今年的前兩到三個季度有所擴張。擴張通常在第三季放緩，然後在第四季度下降。因此，我們預計明年剩餘時間的營運資金將減少 7,000 萬至 8,000 萬美元。

All right. That's helpful. Thanks for taking my questions. Best of luck with all of these ongoing initiatives here over the next couple months. And I'll get back in the queue.

好的。這很有幫助。感謝您回答我的問題。祝您在接下來的幾個月裡所有這些正在進行的舉措好運。我會回到隊列中。

Thank you.

謝謝。

Thank you.

謝謝。

Wayne Pinsent, Gabelli Funds.

韋恩·平森特，Gabelli 基金。

Hi. Thanks for taking my question. Yeah, Wayne Pinsent with Gabelli Funds. I just wanted to ask on the on the Dacthal. Do you know if there's product still in the channel and risk of that product getting put back to you? And is that any component of the significantly lowered guide?

你好。感謝您提出我的問題。是的，Gabelli 基金的 Wayne Pinsent。我只是想問 Dacthal 上的問題。您知道通路中是否還有產品以及該產品被退回給您的風險嗎？這是顯著降低的指南的任何組成部分嗎？

There is there is product in the channel. There's not much. And one of the reasons for that was we had -- I mean, we're not sure how much, but there -- I think, the fact is we were only in the market for a short time. It was unavailable, then it was, and then, we suspended the sales subsequently. So is that included in our numbers going forward. To the extent, I think, from an accounting point of view, there was any recall or take back of material, that's a thing that would be a commercial subject, and would typically be accounted for in the period in which it occurred. Is that how it works, David?

通路裡有產品。沒有太多。原因之一是我們 - 我的意思是，我們不確定有多少，但我認為，事實是我們只在市場上待了很短的時間。沒有了，然後就沒有了，然後，我們就暫停了銷售。這也包含在我們未來的數字中嗎？在某種程度上，我認為，從會計的角度來看，任何材料的召回或收回，都屬於商業主題，通常會在其發生的時期進行會計處理。大衛，事情就是這樣嗎？

There's no decision at this point. So that would be accounted whenever.

目前還沒有決定。這樣無論什麼時候都會被計算在內。

Yeah. So it's a little indeterminate at this point.

是的。所以目前還有些不確定。

Okay. Thanks. And then you mentioned on the timing of those Q4 sales, and the drop in guide with farmers going to just in time. What's the confidence level that those are just moving into 2025 and not lost sales?

好的。謝謝。然後您提到了第四季度銷售的時間，以及農民的指導下降及時發生。這些產品剛進入 2025 年且銷量並未下降，對此的信心程度如何？

Mason, do you want to handle that?

梅森，你願意處理嗎？

Yeah. I sure will. So first of all, the distributors are the customers that will be purchasing. So I first want to say there's a normal purchase pattern that our distributor customers will make around our portfolio. So that's going to happen. We just don't see that these distributor customers are going to pull in excess product, especially after they got into the overstocking that we've seen the last couple two years or three years. So they're going to be very, very conservative in their approach and what they bring in. And so we see normal in that space.

是的。我一定會的。因此，首先，經銷商是將要購買的客戶。因此，我首先想說的是，我們的經銷商客戶將圍繞我們的產品組合製定正常的購買模式。所以這將會發生。我們只是不認為這些經銷商客戶會購買多餘的產品，特別是在他們陷入過去兩年或三年我們看到的庫存過剩之後。因此，他們的方法和引入的內容將非常非常保守。所以我們在那個空間裡看到了正常的狀況。

As far as the farmers and what they do, they're still – their purchase timing from a confidence standpoint, it's going to happen. There may be consolidation, it may look different, but growers still have to grow a crop, and they have to protect their crops with crop input. So we see that depending on what the offers are, and the opportunities, growers will continue to purchase.

就農民及其所做的事情而言，他們仍然是他們的購買時機，從信心的角度來看，這將會發生。可能會出現整合，可能看起來會有所不同，但種植者仍然必須種植作物，並且他們必須透過作物投入來保護作物。因此，我們看到，根據報價和機會，種植者將繼續購買。

It just means they may not be flush with cash as they have in the past due to net farm income being down. But they will have to grow a crop, and that farm acre will be farmed. So there will be a need for the products, and many of our products that we utilize to get the crop started. So yes, we're confident that that will take place.

這只是意味著，由於農場淨收入下降，他們可能不會像過去那樣擁有充足的現金。但他們必須種植莊稼，而那塊農田將被耕種。因此，我們需要這些產品，以及我們用來啟動作物的許多產品。所以，是的，我們有信心這將會發生。

Okay. Thanks. And then just finally, it appears that the press release hasn't gone out yet. Just wondering when we'll see full financials, because it was a little unusual.

好的。謝謝。最後，新聞稿似乎還沒有發布。只是想知道我們什麼時候能看到完整的財務數據，因為這有點不尋常。

We are trying to get to a point of filing today. It may actually sit until tomorrow, but the financials are pretty much ready to go.

我們今天正努力進入歸檔階段。實際上可能要等到明天，但財務狀況已經準備就緒。

Yeah. I think he's talking about the press release --

是的。我認為他正在談論新聞稿--

The press release was released, but I guess it may arrive on the wire very shortly.

新聞稿已經發布，但我猜它可能很快就會發布。

Okay. Thank you very much.

好的。非常感謝。

You're welcome.

不客氣。

Paul Berliner, Levite Capital.

Paul Berliner，利維資本。

A clarification with regard to the press release not being out yet, it's not on the website either. So you mentioned in the slide show that the lenders have put some sort of restriction on dividends and buybacks. Does that affect the current $0.12 annual dividend?

關於新聞稿尚未發布的澄清，網站上也沒有。所以你在幻燈片中提到貸方對股息和回購施加了某種限制。這會影響目前 0.12 美元的年度股息嗎？

Yes. It will impact going forward. Right. So the --

是的。會對以後的發展產生影響。正確的。所以--

It's just $3 million annually, $0.12.

每年只需 300 萬美元，即 0.12 美元。

It's true. And also what we would be doing in conjunction with the quarterly consideration is, is clearing the notion of making a dividend at the time with our lenders, which was something we didn't have to do before, but we will have to do that going forward. Yes, it's part of the overall package. But yeah, the sizing is correct, yes.

這是真的。此外，我們結合季度考慮要做的是，與我們的貸方明確當時發放股息的概念，這是我們以前不必做的事情，但我們必須繼續這樣做。是的，它是整個包的一部分。但是，尺寸是正確的，是的。

Thank you.

謝謝。

You're welcome.

不客氣。

(Operator Instructions)

（操作員說明）

Andrew Lester, private investor.

安德魯萊斯特，私人投資者。

Hi. Thank you for taking the question. I want to start off by sort of thanking and applauding the board for taking necessary steps to change the direction of the company, hoping to get things under control. I'm not an attorney, and I don't understand Dacthal all that well, but I did do some Google searches, and I just want to make sure I understand. The company started producing this in 2001, is that correct?

你好。感謝您提出問題。首先，我想感謝並讚揚董事會採取必要措施來改變公司的方向，希望事情能得到控制。我不是律師，我不太了解 Dacthal，但我確實做了一些谷歌搜索，我只是想確保我理解。該公司於 2001 年開始生產此產品，對嗎？

That sounds right. Yeah. Well, selling it -- (multiple speakers)

聽起來不錯。是的。嗯，賣了——（多位發言者）

And in 2007, it was supposedly a private settlement, but the company paid $300,000 to Dole Food, which again, there's no greater disclosure when I tried to search for it, but I assumed that there was sort of an awareness of a potential issue with this product and necessitates a settlement, it was sort of -- (multiple speakers)

2007 年，這應該是一項私人和解，但該公司向都樂食品支付了 30 萬美元，當我試圖搜索時，沒有更多的披露，但我認為人們已經意識到了潛在的問題這個產品需要和解，有點像——（多位發言者）

That was a different product, that was DVCP. And DVCP was in banana plantations in various places, including in Hawaii, and its use was discontinued in the early 1980s. But yeah, that relates.

那是一個不同的產品，那就是 DVCP。DVCP 曾在包括夏威夷在內的許多地方的香蕉種植園中使用，並於 20 世紀 80 年代初停止使用。但是，是的，這有關係。

Okay. So there was no -- there's no although the government -- I mean the wording of the government statement seems somewhat severe, but there was no specific issues or problems before, separate and distinct from their studies of this. Is that correct?

好的。所以沒有——雖然沒有政府——我的意思是政府聲明的措辭似乎有些嚴厲，但之前沒有任何具體的問題或問題，與他們對此的研究分開和不同。這是正確的嗎？

That's correct. This is a move by the agency to take -- and sort of an interdiction following scientific studies. It's not in response to harm that has been identified to persons or property.

這是正確的。這是該機構採取的舉措，有點像科學研究後的禁令。它不是針對已確定的人員或財產損害所做出的反應。

Okay. That's comforting. Thank you for that. Also when you follow the track of the company's announcements for the last couple of years, and I've been a shareholder for the last couple of years. I mean, there's sort of an uninterrupted series of earnings and EBITDA reductions and revisions. And I'm pretty familiar with investing in commodities, and I understand the nature of the cycles, the nature of what happens in the marketplace. But separate and distinct from the marketplace, we had like downward revisions, and never upward revisions.

好的。這很令人欣慰。謝謝你。另外，當你關注公司過去幾年的公告時，我在過去幾年一直是股東。我的意思是，有一系列不間斷的收益和 EBITDA 削減和修正。我對商品投資非常熟悉，我了解週期的本質，市場上發生的事情的本質。但與市場不同的是，我們只進行向下修正，而不是向上修正。

So at this point addressing the industry in its current state, do these numbers incorporate a base case going forward? Or is this -- because I can only assume there was optimism in the past, and there was nothing in the prior quarter that would lead somebody to believe that a revision of this order of magnitude could potentially happen.

那麼，在目前的產業狀況下，這些數字是否包含了未來的基本情況？或者是這樣——因為我只能假設過去存在樂觀情緒，而上一季沒有任何事情會讓人們相信這種數量級的修正可能會發生。

I think we have been very punctilious about making -- giving targets in the future based upon what we believe to be the then current conditions. And I know you've been a shareholder for some time, and you're aware that there have been exigencies that have arisen subsequent to the establishment of our targets that have affected them.

我認為我們一直非常謹慎地根據我們認為當前的情況來制定未來的目標。我知道您成為股東已有一段時間了，並且您知道在我們設定目標後出現的緊急情況對他們產生了影響。

But I also can tell you that the targets we have posited today are targets that are, we believe, achievable, conservative, and that do take stock of not only conditions as we see them now, but conditions for the remainder of the year. And also take into account what we understand to be the actual demand from our people who are in the trenches, selling the products, whether they be crop, non-crop, or international. So that's the rubric that we're following in setting targets.

但我也可以告訴你們，我們今天提出的目標是我們認為可以實現的保守目標，並且不僅考慮了我們現在看到的條件，而且考慮了今年剩餘時間的條件。也要考慮到我們所理解的那些在一線銷售產品的人們的實際需求，無論是農作物、非農作物或國際產品。這就是我們在設定目標時所遵循的準則。

And to the extent that we find in the future that our targets have been set at a at a level that's far too low based upon things that we're fairly certain are going to happen, we would enjoy raising up estimates. Yes.

如果我們發現未來我們的目標根據我們相當確定將會發生的事情設定的水平太低，我們會很樂意提高估計。是的。

Okay. And in the past previous statements regarding company's assumption of debt or use of it would really been sort of dislocations in the marketplace whereby the company used debt to sort of smooth the manufacturing of product, and expected everything to return to normal. And as they would sell that product, they would repeat the debt and essentially go back to the status as either very low debt or debt free type of company.

好的。在過去，有關公司承擔債務或使用債務的聲明實際上會造成市場混亂，公司利用債務來平滑產品的製造，並期望一切恢復正常。當他們出售該產品時，他們會重複債務，基本上回到債務非常低或無債務類型公司的狀態。

So it seems that something might have changed between the relationship with the lenders for them to require, I guess, preapproval before the announcement or payment of a dividend. Is that -- does that circumstance exist until all that debt is repaid, or is there something more significant that's changed?

因此，我認為與貸款人的關係可能​​發生了一些變化，他們需要在宣布或支付股息之前獲得預先批准。在償還所有債務之前，這種情況是否存在，或者是否有更重要的事情發生了變化？

It's not -- the terms of the amended agreement are not based upon some sort of a concern that, or a requirement that we repay the debt in its fullness over some specific period of time. That is our ability to use the funds, the revolvers, the credit, the letters of credit and the like are unchanged.

事實並非如此——修訂後的協議條款並非基於某種擔憂，或要求我們在某個特定時期內全額償還債務。也就是說我們使用資金、左輪手槍、信用狀、信用狀等的能力是不變的。

It's – from our point of view, it's what you would expect from a lender is if you seek to have relief in conjunction with financial covenants. And specifically, those relate to ratios and the ratio – our maximum leverage ratios become tighter, the risk for the lender is higher. And what they will tend to do then is to cover the additional risk that they're incurring by increasing the interest matrix to a degree at 4x and above.

這是—從我們的角度來看，如果您尋求與財務契約相關的救濟，這就是您對貸方的期望。具體來說，這些與比率和比率有關——我們的最大槓桿比率變得更嚴格，貸方的風險更高。然後他們會傾向於透過將利息矩陣增加到 4 倍及以上來彌補所產生的額外風險。

And also in return for their let's say obeisance in allowing us to take the -- put more into the non-recurring basket to allow for transformation charges, that's a use of cash. Cash being our greatest security, if you will, in this case. And finally, with respect to that, then they would say, let's look at then your business, at your financial performance on an ongoing basis before we allocate funds to other things that are sort of outside the purview of direct investments in the company. And I think that's where those three elements would arise otherwise; the dividend, the share repurchase, and the acquisitions.

而且，為了回報他們允許我們將更多資金放入非經常性籃子中以支付轉型費用，這就是現金的使用。在這種情況下，如果你願意的話，現金是我們最大的安全保障。最後，關於這一點，他們會說，在我們將資金分配到不屬於公司直接投資範圍的其他事情之前，讓我們看看您的業務、持續的財務表現。我認為這就是這三個要素會出現的地方；股利、股票回購和收購。

Thank you for explaining that.

謝謝你的解釋。

You're welcome.

不客氣。

Thank you. There are further questions at this time. I'd like to turn the floor back over Tim for closing comments.

謝謝。目前還有更多問題。我想請提姆發言結束評論。

Thank you, everyone, for joining the call today. Thank you also for your interest and support in American Vanguard Corporation. Again, we are committed to maximizing investor value in the company and we look forward to continuing to do so. We thank you for the privilege of being able to do so. And look forward to speaking with you all very soon. Take care.

謝謝大家今天加入電話會議。也感謝您對美國先鋒公司的關注與支持。再次，我們致力於最大化公司投資者的價值，並期待繼續這樣做。我們感謝您有幸能夠這樣做。並期待很快與大家交談。小心。

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for disappear.

今天的電話會議到此結束。此時您可以斷開線路。謝謝你的消失。