8-K - AVD - Equibles

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (date of earliest event reported): November 7, 2023

AMERICAN VANGUARD CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	001-13795	95-2588080
(State or other jurisdiction<br> <br>of incorporation)	Commission<br> <br>File Number	(I.R.S. Employer<br> <br>Identification No.)

4695 MacArthur Court

Newport Beach, California 92660

(Address of principal executive offices)

Registrant’s telephone number: (949) 260-1200

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading<br> <br>Symbol	Exchanges<br> <br>on which registered
Common Stock, $.10 par value	AVD	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b02 of the Securities Exchange Act of 1934 (§240.12b02 of this chapter).

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. ☐

Item 1.01.	Entry into a Material Definitive Agreement

On November 7, 2023, AMVAC Chemical Corporation (“AMVAC”), principal operating subsidiary of American Vanguard Corporation (“Registrant”), as borrower, and affiliates (including Registrant), as guarantors and/or borrowers, entered into Amendment Number Six to the Third Amended and Restated Loan and Security Agreement (the “Amendment”) with a group of commercial lenders led by BMO Bank NA (successor to the Bank of the West), as Lead Arranger and Book Runner. Under the terms of the Amendment, the two financial covenants (the Maximum Total Leverage Ratio or “MTLR” and Fixed Charge Covenant Ratio or “FCCR”) were modified. Specifically, with respect to the MTLR, the existing ratio (which had been 3.5-to-1 through September 30, 2024, and 3.25-to-1 through December 31, 2024, and thereafter), was changed to 5.5-to-1 through September 30, 2023, 4.5-to-1 for the periods ending December 31, 2023 and March 31, 2024, 4.0-to-1 for the period ending June 30, 2024, 3.5-to-1 through September 30, 2024 and returning to 3.25-to-1 from December 31, 2024, and thereafter. In addition, the FCCR (which had been 1.25) was changed to 1.0 for the periods ending September 30, 2023, December 31, 2023, and March 31, 2024, and returning to 1.25 for the period ending June 30, 2024, and thereafter. Further, after the delivery of financial statements and a covenant compliance certificate for the period ending December 31, 2023 (or thereafter), assuming MTLR is less than 2.75, then Borrowers may terminate the covenant modification period (“CMP”) and revert to the terms of the existing Credit Agreement. Further, for the duration of the CMP, the Company is restricted from making share repurchases. Finally, the Applicable Margin (SOFR and Adjusted Base Rate) and Letter of Credit fees increase by 0.50 basis points for each tier of interest during the CMP.

The Amendment is linked hereto as Exhibit 10.1 and incorporated by reference herein.

Item 2.02	Results of Operations and Financial Condition

On November 8, 2023, American Vanguard Corporation (“Registrant”) issued a press release announcing both (a) its preliminary, unaudited financial results for the three- and nine-month periods ended September 30, 2023, and (b) its transformation plans. The full text of the press release is linked hereto as Exhibit 99.1 and is incorporated herein by reference.

Item 9.01	Financial Statements and Exhibits.

(d) Exhibits

Exhibit 10.1	Amendment Number Six to the Third Amended and Restated Loan and Security Agreement dated as of November 7, 2023, by and among Registrant and its senior lending group.
Exhibit 99.1	Press release dated November 8, 2023, of Registrant regarding financial results for the three- and nine-month periods ended September 30, 2023.
104	Cover Page Interactive Data File (embedded within the Inline XBRL Document).

SIGNATURES

Pursuant to the requirements 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
Date: November 9, 2023	By:	/s/ Timothy J. Donnelly
		Timothy J. Donnelly
		Chief Administrative Officer, General Counsel & Secretary

EX-10.1

Exhibit 10.1

Execution Version

AMENDMENT NUMBER SIX TO

THIRD AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

This AMENDMENT NUMBER SIX TO THIRD AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (this “Amendment”) is dated as of November 7, 2023, and is entered into by and among AMERICAN VANGUARD CORPORATION, a Delaware corporation (“Holdco”), AMVAC CHEMICAL CORPORATION, a California corporation (the “Borrower Agent”), AMVAC NETHERLANDS B.V., a besloten vennootschap met beperkte aansprakelijkheid, organized under the law of the Netherlands (“AMVAC B.V.”, and together with the Borrower Agent, each a “Borrower” and, collectively, “Borrowers”), the financial institutions party to this Agreement from time to time as lenders (collectively, “Lenders”), BMO BANK, N.A., as successor in interest to BANK OF THE WEST(“BMO”), as administrative agent, documentation agent, syndication agent and collateral agent for the Lenders (in such capacity, together with its successors and assigns in such capacity, “Agent”), BANK OFMONTREAL, CHICAGO BRANCH and COMPEER FINANCIAL, PCA, as co-documentation agents (collectively, and in such capacities, “Co-Documentation Agents”) and BMO, as sole lead arranger and book runner (in such capacity, together with its successors and assigns in such capacity, the “Lead Arranger and Book Runner”).

RECITALS

WHEREAS, Holdco, Borrowers, Lenders, and Agent are parties to that certain Third Amended and Restated Loan and Security Agreement, dated as of August 5, 2021 (the “Loan Agreement”).

WHEREAS, Agent and the Required Lenders have agreed to Borrower’s request pursuant to the terms of this Amendment.

NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, the parties agree as follows:

DEFINITIONS. All terms which are defined in the Loan Agreement shall have the same definition when used herein unless a different definition is ascribed to such term under this Amendment, in which case, the definition contained herein shall govern.

AMENDMENT. The Loan Agreement is amended in the following respects:

2.1 Add Definitions of “AmendmentNo. 4 Closing Date” and “Covenant Modification Period”. Section 1.1 of the Loan Agreement is hereby amended by adding the defined terms “Amendment No. 4 Closing Date” and “Covenant Modification Period” in the appropriate alphabetical order.

Amendment No. 6 Closing Date: November 7, 2023.

Covenant Modification Period: the fiscal quarters commencing with the fiscal quarter ended September 30, 2023, and continuing up to and including the fiscal quarter ending June 30, 2024.

Early Termination of the Covenant Modification Period: shall have the meaning set forth in Section 10.3.1.

2.2 Increase in the Applicable Margin during Covenant Modification Period. Commencing on the Amendment No. 6 Closing Date and continuing until the next determination pursuant to the procedures set forth in the definition of Applicable Margin, the margins shall be determined as if Level I were applicable. In addition, the Applicable Margins for SOFR, Adjusted Base Rate and Letter of Credit Fee shall be increased by 0.50% commencing on the Amendment No. 6 Closing Date and continuing for the remainder of the Covenant Modification Period. For the avoidance of doubt, the 0.50% increase in the Applicable Margins for SOFR, Adjusted Base Rate and Letter of Credit Fee shall terminate if Borrower Agent elects to exercise the Early Termination of the Covenant.

2.3 Restriction of Distributions to Repurchase Equity Interests during Covenant Modification Period. Notwithstanding the provisions of Section 10.2.4(d) of the Loan Agreement to the contrary, at all times during the Covenant Modification Period Holdco shall not, and shall cause each Subsidiary not to, make any Distributions in order to repurchase their Equity Interests.

2.4 Change in the Total Leverage Ratio Covenant and Fixed Charge Coverage Ratio Covenant. Sections 10.3.1 and 10.3.2 of the Loan Agreement are deleted and are replaced with the following::

10.3.1 Maximum Total Leverage Ratio Commencing on September 30, 2023, maintain a Total Leverage Ratio, measured on a Fiscal Quarter-end basis, of not greater than the applicable ratio set forth in the following table for the applicable date set forth opposite thereto; provided, however, that the maximum Total Leverage Ratio may be increased by 0.50:1.00 for a period of four consecutive Fiscal Quarters (the “Adjusted Covenant Period”) in connection with any one or more Permitted Acquisitions during any period of ninety (90) consecutive days for an aggregate consideration of more than $15,000,000, if the Borrowers have provided notice in writing to the Agent requesting an Adjusted Covenant Period during the Fiscal Quarter in which such Permitted Acquisition is consummated; provided, further, that, (x) an Adjusted Covenant Period cannot commence during the Covenant Modification Period, (y) Borrowers may not request more than three (3) Adjusted Covenant Periods during the term of this Agreement, and (z) at least two (2) Fiscal Quarters have been completed following the end of the previously requested Adjusted Covenant Period:

Fiscal Quarter Ending	MaximumTotal LeverageRatio
September 30, 2023		5.50:1.00
December 31, 2023, and March 31,<br>2024^*^		4.50:1.00
June 30, 2024^*^		4.00:1.00
September 30, 2024		3.50:1.00
December 31, 2024 and each Fiscal Quarter thereafter		3.25:1.00
^*^	In the event Borrower Agent (x) delivers to Agent the consolidated financial statements for Holdco and its<br>Subsidiaries for the Fiscal Quarter ended December 31, 2023 or the Fiscal Quarter ended March 31, 2024, which are required pursuant to Section 10.1.2(b), (y) delivers to Agent the Compliance Certificate for the Fiscal Quarter ended<br>December 31, 2023, or for the Fiscal Quarter ended March 31, 2024, which is required pursuant to Section 10.1.2(c), and (z) the Total Leverage Ratio as of December 31, 2023, or as of March 31, 2024, is less than<br>2.75:1.00 and the Fixed Charge Coverage Ratio is more than 1.25:1.00, Borrower Agent shall have the right to terminate the Covenant Modification Period (an “Early Termination of the Covenant Modification Period”). If Borrower Agent<br>elects to exercise the Early Termination of the Covenant, the maximum Total Leverage Ratio for the Fiscal Quarters commencing on March 31, 2024, and June 30, 2024, shall not exceed 3.50:1.00.
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2.	10.3.2 Minimum Fixed Charge Coverage Ratio. Commencing on September 30, 2023, maintain a Fixed<br>Charge Coverage Ratio of not greater than the applicable ratio set forth in the following table for the applicable date set forth opposite thereto:
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Fiscal Quarter Ending	MinimumFixed ChargeCoverageRatio
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September 30, 2023, and December 31, 2023		1.00:1.00
March 31, 2024^*^		1.00:1.00
June 30, 2024 and each Fiscal Quarter thereafter		1.25:1.00
^*^	If Borrower Agent elects to exercise the Early Termination of the Covenant, the Fixed Charge Coverage Ratio for<br>the Fiscal Quarter ending on March 31, 2024, shall not be less than 1.25:1.00.
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CONDITIONS PRECEDENT TO EFFECTIVENESS OF AMENDMENT.

3.1 This Amendment shall become effective only upon satisfaction in full of the following conditions precedent:

A. Agent shall have received counterparts to this Amendment, duly executed by the Agent, the Borrowers, and the Lenders, as applicable.

B. Agent shall have received reimbursement, in immediately available funds, of all costs and expenses incurred by Agent in connection with this Amendment, including legal fees and expenses of Agent’s counsel.

REPRESENTATIONS AND WARRANTIES. Holdco and each of the Borrowers hereby affirm to Agent and the Lenders:

4.1 All of Holdco and Borrowers’ representations and warranties set forth in the Loan Agreement are true and correct in all material respects (or all respects if already qualified by materiality) as of the date hereof (except for any representations and warranties that expressly relate to an earlier date).

4.2 No event has occurred and is continuing or would result from the consummation of the transactions contemplated hereby that would constitute a Default or an Event of Default.

LIMITED EFFECT. Except for the specific amendments contained in this Amendment, the Loan Agreement shall remain unchanged and in full force and effect.
RELEASE BY BORROWERS AND GUARANTOR. Borrowers and Guarantors (collectively, the “Obligors”), for themselves, and for their respective agents, servants, officers, directors, shareholders, members, employees, heirs, executors, administrators, agents, successors and assigns forever release and discharge Agent and Lenders and their agents, servants, employees, accountants, attorneys, shareholders, subsidiaries, officers, directors, heirs, executors, administrators, successors and assigns from any and all claims, demands, liabilities, accounts, obligations, costs, expenses, liens, actions, causes of action, rights to indemnity (legal or equitable), rights to subrogation, rights to contribution and remedies of any nature whatsoever, known or unknown, which Obligors have, now have, or have acquired, individually or jointly, at any time prior to the date of the execution of this Amendment, including specifically, but not exclusively, and without limiting the generality of the foregoing, any and all of the claims, damages, demands and causes of action, known or unknown, suspected or unsuspected by Obligors which:

6.1 Arise out of the Loan Documents;

6.2 Arise by reason of any matter or thing alleged or referred to in, directly or indirectly, or in any way connected with, the Loan Documents; or

6.3 Arise out of or in any way are connected with any loss, damage, or injury, whatsoever, known or unknown, suspected or unsuspected, resulting from any act or omission by or on the part of Agent or any Lender or any party acting on behalf of Agent or any Lender committed or omitted prior to the date of this Amendment.

GOVERNING LAW. This Amendment shall be governed by the laws of the State of New York.
COUNTERPARTS. This Amendment may be executed in any number of counterparts and by different parties on separate counterparts, each of which when so executed and delivered shall be deemed to be an original. All such counterparts, taken together, shall constitute but one and the same Amendment.

[Signatures are on the following pages]

IN WITNESS WHEREOF, this Amendment has been executed and delivered as of the date set forth above.

HOLDCO:
AMERICAN VANGUARD CORPORATION,a Delaware corporation
By:	/s/ David T. Johnson
Name:	David T. Johnson
Title:	V.P., Chief Financial Officer and Treasurer
BORROWERS:
AMVAC CHEMICAL CORPORATION,
a California corporation
By:	/s/ Timothy J. Donnelly
Name:	Timothy J. Donnelly
Title:	V.P., Chief Administrative Officer, General Counsel and Secretary
AMVAC NETHERLANDS B.V.
a besloten vennootschap met beperkte aansprakelijkheid, organized under the laws of the Netherlands
By:	/s/ Peter Eilers
Name:	Peter Eilers
Title:	Managing Director