American Vanguard Corp (NYSE:AVD) has reached an agreement with its former CEO and current Chairman, Eric Wintemute, which will see him cease efforts to nominate himself for election to the board at the upcoming 2025 Annual Meeting of Stockholders. This development follows a series of negotiations culminating in a Cooperation Agreement signed on Monday. The agreement comes at a challenging time for the company, whose stock has declined over 65% in the past year, though InvestingPro analysis suggests the shares are currently undervalued.
According to the agreement, Wintemute, who transitioned from CEO to Chairman, will not be a candidate for re-election after his term ends at the 2025 Annual Meeting. The Board has indicated it will not endorse his nomination for a new term. In response, Wintemute withdrew his stockholder nomination and agreed to vote his shares in line with the Board’s recommendations at the 2025 Annual Meeting. Despite recent challenges, the company has maintained its dividend payments for 29 consecutive years, demonstrating long-term financial stability. InvestingPro subscribers can access detailed analysis of the company’s financial health, which currently rates as ’Fair’ with a score of 2.44 out of 5.
Furthermore, Wintemute has consented to abide by standstill provisions until the Termination Date, defined in the Cooperation Agreement. He also agreed not to oppose the Board’s recommendations at future stockholder meetings, subject to certain conditions. The agreement includes mutual non-disparagement clauses and provisions for Wintemute to be reimbursed for related expenses up to $325,000.
This agreement aims to ensure a smooth transition of leadership and maintain stability within the company’s governance structure. Investors and stakeholders may view this as a positive step towards aligning the interests of the board and stockholders. With the company’s next earnings report due on May 1, 2025, and analysts projecting a return to profitability this year, InvestingPro subscribers can access comprehensive analysis and additional insights through the exclusive Pro Research Report, available for over 1,400 US stocks.
The details of the Cooperation Agreement, which governs the terms of this arrangement, were filed with the SEC and are available for public reference. This press release statement serves as the basis for the facts reported.
In other recent news, American Vanguard Corporation reported fourth-quarter revenue of $169 million, which fell slightly short of analyst expectations of $169.55 million. The company also provided a revenue forecast for fiscal year 2025, projecting between $565-585 million, which is below the analyst projections of $585 million. In addition, American Vanguard set an adjusted EBITDA target range of $45-52 million for 2025. The company faced unforeseen delays in completing its year-end reporting process and failed to submit its Annual Report on Form 10-K for the fiscal year ended December 31, 2024, within the required timeframe, leading to non-compliance with the NYSE’s filing requirements. American Vanguard anticipates regaining compliance by completing the Form 10-K filing soon and has renegotiated its credit facility terms, extending the deadline for providing audited financial statements. The company took approximately $118 million in non-recurring charges in 2024 while reducing total debt to $156 million by year-end. Looking forward, American Vanguard expects capital expenditures of about $10 million in 2025 and plans to use improved free cash flow for debt reduction. CEO Douglas Kaye III expressed confidence in achieving double-digit EBITDA growth over the next few years.
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