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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

FORM 10-Q

AMERICAN VANGUARD CORPORATION

(949) 260-1200
(Registrant’s telephone number, including area code)

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   þ     No o

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes   o     No o

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Common Stock, $.10 Par Value — 3,867,451 shares outstanding as of August 9, 2002.

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AMERICAN VANGUARD CORPORATION

INDEX

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

AMERICAN VANGUARD CORPORATION
AND SUBSIDIARIES

Consolidated Statements of Operations
(Unaudited)

See notes to consolidated financial statements.

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AMERICAN VANGUARD CORPORATION
AND SUBSIDIARIES

Consolidated Balance Sheets

ASSETS (note 7)

(Continued)

See notes to consolidated financial statements.

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AMERICAN VANGUARD CORPORATION
AND SUBSIDIARIES

Consolidated Balance Sheets

LIABILITIES AND STOCKHOLDERS’ EQUITY

Note: The balance sheet at December 31, 2001 has been derived from the audited financial statements at that date.

See notes to consolidated financial statements.

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AMERICAN VANGUARD CORPORATION
AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For The Six Months Ended June 30, 2002 and 2001
(Unaudited)

(Continued)

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AMERICAN VANGUARD CORPORATION
AND SUBSIDIARIES

Consolidated Statements of Cash Flows, Continued

or The Six Months Ended June 30, 2002 and 2001

(Unaudited)

See notes to consolidated financial statements.

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AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(Unaudited)

1.		The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation, have been included. Operating results for the three and six-month periods ended June 30, 2002 are not necessarily indicative of the results that may be expected for the year ending December 31, 2002. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2001.
2.		Inventories — The components of inventories consist of the following:

3.

Property, plant and equipment at June 30, 2002 and December 31, 2001 consists of the following:

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AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

4.		On March 18, 2002, the Company announced that the Board of Directors declared a cash dividend of $.14 per share as well as a 4-for-3 stock split. Both dividends were distributed on April 12, 2002 to stockholders of record at the close of business on March 29, 2002. The cash dividend was paid on the number of shares outstanding prior to the 4-for-3 stock split. Stockholders entitled to fractional shares resulting from the stock split received cash in lieu of such fractional shares based on the closing price of the Company’s stock on March 29, 2002. Accordingly, all weighted average share and per share amounts have been restated to reflect the stock split.
5.		In May 2002, the Company entered into a new $45,000,000 fully-secured long-term credit agreement. The Company’s primary bank (the “Bank”) acted as sole administrative agent arranger and syndication agent. The Bank syndicated the new credit facility with another bank. The $45,000,000 credit facility consists of a senior secured revolving line of credit of $35,000,000 and a $10,000,000 senior secured term loan. The borrowings under the credit agreement bear interest at the prime rate (“Referenced Loans”), or at the Company’s option, at a fixed rate of interest offered by the Bank (“Fixed Loans”) for terms of one, two, three, six, nine or twelve months. Interest on the Referenced Loans are payable quarterly, in arrears, on the last day of each March, June, September, and December, and on the maturity date of such loan in the amount of interest then accrued but unpaid. Interest on the Fixed Loans are payable on the last day of the interest period, provided that, with an interest period longer than three months, interest is payable on the last day of each three-month period after the commencement of such interest period. The senior secured revolving line of credit matures on May 31, 2005. The term loan matures on May 31, 2007. The principal payments of the term loan are payable in equal quarterly installments of $625,000 each, on or before the last business day of each February, May, August and November, commencing May 31, 2003 and in one final installment in the amount necessary to repay the remaining outstanding principal balance of the term loan in full on the maturity date.
6.		Statement of Financial Accounting Standards (“SFAS”) No. 128, Earnings Per Share (“EPS”) requires dual presentation of basic EPS and diluted EPS on the face of all income statements. Basic 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 that could occur if securities or other contracts, which, for the Company, consists of options to purchase shares of the Company’s common stock are exercised.

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

7.		Substantially all of the Company’s assets not otherwise specifically pledged as collateral on existing loans and capital leases, are pledged as collateral under the Company’s credit agreement with a bank. As referenced in note 1, for further information, refer to the consolidated financial statements and footnotes thereto (specifically note 3) included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2001.
8.		Reclassification — Certain items have been reclassified in the prior period consolidated financial statements to conform with the June 30, 2002 presentation.
9.		Recent Accounting Pronouncements — In June 2001, the Financial Accounting Standards Board (“FASB”) finalized FASB Statements No. 141, Business Combinations (SFAS 141), and No. 142, Goodwill and Other Intangible Assets (SFAS 142). SFAS 141 requires the use of the purchase method of accounting and prohibits the use of the pooling-of-interests method of accounting for business combinations initiated after June 30, 2001. SFAS 141 also requires that the Company recognize acquired intangible assets apart from goodwill if the acquired intangible assets meet certain criteria. SFAS 141 applies to all business combinations initiated after June 30, 2001 and for purchase business combinations completed on or after July 1, 2001.

	SFAS 142 requires, among other things, that companies no longer amortize goodwill, but instead test goodwill for impairment at least annually. In addition, SFAS 142 requires that the Company identify reporting units for the purposes of assessing potential future impairments of goodwill, reassess the useful lives of other existing recognized intangible assets, and cease amortization of intangible assets with an indefinite useful life. SFAS 142 is required to be applied in fiscal years beginning after December 15, 2001 to all goodwill and other intangible assets recognized at that date. SFAS 142 requires the Company to complete a transitional goodwill impairment test six months from the date of adoption.
	The Company’s previous business combinations were accounted for using the purchase method. The net carrying amount of goodwill and other intangible assets was $10,049,500 and $11,384,900 as of December 31, 2001 and June 30, 2002, respectively. SFAS 141 and SFAS 142 were adopted on the

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effective dates, and did not result in any material effects on the Company’s financial statements.

SFAS 143, Accounting for Asset Retirement Obligations, was issued in June 2001 and is effective for fiscal years beginning after June 15, 2002. SFAS 143 requires that any legal obligation related to the retirement of long-lived assets be quantified and recorded as a liability with the associated asset retirement cost capitalized on the balance sheet in the period it is incurred when a reasonable estimate of the fair value of the liability can be made. SFAS 143 will be adopted on the effective date, and adoption is not expected to result in any material effects on the Company’s financial statements.

SFAS 144, Accounting for the Impairment of Disposal of Long-lived Assets, was issued in August 2001 and is effective for fiscal years beginning after December 15, 2001. SFAS 144 provides a single, comprehensive accounting model for impairment and disposal of long-lived assets and discontinued operations. SFAS 144 was adopted on the effective date, and did not result in any material effects on the Company’s financial statements.

In April 2002, the FASB issued SFAS Statement No. 145, Rescission of FASB Statements 4, 44,and 64, Amendment of FASB Statement No. 13, and Technical Corrections (SFAS 145). This statement eliminates the current requirement that gains and losses on debt extinguishment must be classified as extraordinary items in the income statement. Instead, such gains and losses will be classified as extraordinary items only if they are deemed to be unusual and infrequent, in accordance with the current GAAP criteria for extraordinary classification. In addition, SFAS 145 eliminates an inconsistency in lease accounting by requiring that modifications of capital leases that result in reclassification as operating leases be accounted for consistent with sale-leaseback accounting rules. The statement also contains other nonsubstantive corrections to authoritative accounting literature. The changes related to debt extinguishment will be effective for fiscal years beginning after May 15, 2002, and the changes related to lease accounting will be effective for transactions occurring after May 15, 2002. Adoption of this standard will not have any immediate effect on the Company’s consolidated financial statements.

In June 2002, the FASB issued SFAS Statement No. 146, Accounting for Costs Associated with Exit or Disposal Activities (SFAS 146), which addresses accounting for restructuring and similar costs. SFAS 146 supersedes previous accounting guidance, principally Emerging Issues Task Force (EITF) Issue No. 94-3. The Company will adopt the provisions of SFAS 146 for restructuring activities initiated after December 31, 2002. SFAS 146 requires that the liability for costs associated with an exit or disposal activity be recognized when the liability is incurred. Under EITF No. 94-3, a liability for an exit cost was recognized at the date of a company’s commitment to an exit plan. SFAS 146 also establishes that the liability should initially be measured and recorded at fair value. Accordingly, SFAS 146 may affect the timing of recognizing future restructuring costs as well as the amount recognized.

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Item 2.  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. These forward-looking statements are based on current expectations and are subject to a number of risks, uncertainties and other factors. In connection with the Private Securities Litigation Reform Act of 1995, the Company provides the following cautionary statements identifying important factors which, among other things, could cause the 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. Securities and Exchange Commission. It is not possible to foresee or identify all such factors. The Company makes no commitment to update any forward-looking statement or to disclose any facts, events, or circumstances after the date hereof that may affect the accuracy of any forward-looking statement. For more detailed information, refer to Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operation, Risk Factors, in the Company’s Annual Report on Form 10-K for the year ended December 31, 2001.

RESULTS OF OPERATIONS

Quarter Ended June 30:

The Company reported net income of $1,125,000 or $.28 per diluted share in the second quarter ended June 30, 2002 as compared to $818,900 or $.21 per diluted share for the same period in 2001.

Net sales increased by 9% or $1,710,000 to $21,618,900 for the quarter ended June 30, 2002 from $19,908,900 for the same period in 2001. The increase in sales was a result of higher sales of the Company’s insecticide and herbicide products. The Company’s corn soil insecticide product, Fortress, which was acquired in 2000, saw especially strong growth.

The gross profit margin for the quarter ended June 30, 2002 increased to 49% from 47% for the same period in 2001, due primarily to a change in product mix.

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Operating expenses, which are net of other income, increased to $8,754,400 for the quarter ended June 30, 2002 as compared to $7,481,100 for the same period in 2001. The differences in operating expenses by specific departmental costs are as follows:

•		Selling expenses increased by $102,800 to $3,924,800 for the quarter ended June 30, 2002 from $3,822,000 for the same period in 2001. The increase was due to increased variable selling expenses that relate to the sales mix of the Company’s products as well as an increase in payroll and payroll related items.
•		General and administrative expenses increased by $874,300 to $2,237,900 for the quarter ended June 30, 2002 as compared to $1,363,600 for the same period in 2001. The increase was due to increases in outside professional fees (primarily legal), payroll and payroll related costs coupled with the fact that the same period in 2001 realized the benefit of certain costs that were capitalized in commissioning of the Company’s Axis, Alabama facility.
•		Research and product development costs and regulatory registration expenses increased by $183,500 to $1,166,800 for the quarter ended June 30, 2002 as compared to $983,300 for the same period in 2001. The increase was due to increased costs incurred to generate scientific data related to the registration and possible new uses of the Company’s products.
•		Freight, delivery, storage and warehousing increased by $112,700 to $1,424,900 for the quarter ended June 30, 2002 as compared to $1,312,200 for the same period in 2001. The increase was a result of the product mix of sales.

Interest costs before capitalized interest and interest income were $271,300 during the quarter ended June 30, 2002 as compared to $492,500 for same period in 2001. The Company’s average overall debt for the quarter ended June 30, 2002 was $23,045,600 as compared to $27,869,400 for the same period in 2001. Lower overall debt levels coupled with lower effective interest rates resulted in the decline in gross interest costs. The Company capitalized $243,600 of interest costs related to the re-commissioning of the Company’s Axis, Alabama facility during the quarter ended June 30, 2002.

The Company settled a dispute over data compensation which resulted in a net gain before taxes of $88,100 for the three months ended June 30, 2001.

Weather patterns can have an impact on the Company’s operations. Weather conditions influence pest population by impacting gestation cycles for particular pests and the effectiveness of some of the Company’s products, among other factors. The end user of some of the Company’s products may, because of weather patterns, delay or

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intermittently disrupt field work during the planting season which may result in a reduction of the use of some of the Company’s products.

Because of elements inherent to the Company’s business, such as differing and unpredictable weather patterns, crop growing cycles, changes in product mix of sales, ordering patterns that may vary in timing, and promotional/early order programs, measuring the Company’s performance on a quarterly basis, (gross profit margins on a quarterly basis may vary significantly) even when such comparisons are favorable, is not as meaningful an indicator as full-year comparisons. The primary reason is that the use cycles do not necessarily coincide with financial reporting cycles. Because of the Company’s cost structure, the combination of variable revenue streams, and changing product mixes, results in varying quarterly levels of profitability.

Six Months Ended June 30:

The Company reported net income of $1,924,300 or $.48 per diluted share in the six months ended June 30, 2002 as compared to $1,416,600 or $.36 per diluted share for the same period in 2001.

Net sales increased by 18% or $6,155,700 to $40,927,900 for the six months ended June 30, 2002 from $34,772,200 for the same period in 2001. The increase in sales was a result of higher sales of the Company’s soil and public health insecticides and there was a stronger demand for the Company’s soil fumigant product line.

The gross profit margin for the six months ended June 30, 2002 increased to 45% from 43% for the same period in 2001, due primarily to a change in product mix.

Operating expenses, which are net of other income, increased to $15,275,000 for the six months ended June 30, 2002 as compared to $12,492,400 for the same period in 2001. The differences in operating expenses by specific departmental costs are as follows:

•		Selling expenses increased by $1,263,500 to $6,724,000 for the six months ended June 30, 2002 from $5,460,500 for the same period in 2001. The increase was due to increased variable selling expenses that relate to the sales mix of the Company’s products.
•		General and administrative expenses increased by $1,108,800 to $3,935,700 for the six months ended June 30, 2002 as compared to $2,826,900 for the same period in 2001. The increase was to increases in outside professional fees (primarily legal), payroll and payroll related costs coupled with the fact that the same period in 2001 realized the benefit of certain costs that were capitalized in commissioning of the Company’s Axis, Alabama facility.
•		Research and product development costs and regulatory Registration expenses increased by $282,900 to $2,150,600 for the six months

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ended June 30, 2002 as compared to $1,867,700 for the same period in 2001. The increase was due to increased costs incurred to generate scientific data related to the registration and possible new uses of the Company’s products.

•

Freight, delivery, storage and warehousing increased by $127,400 to $2,464,700 for the six months ended June 30, 2002 as compared to $2,337,300 for the same period in 2001. While the Company’s sales increased 18%, these expenses did not increase at the same rate because of the product mix of sales.

Interest costs before capitalized interest and interest income were $475,100 during the six months ended June 30, 2002 as compared to $962,000 for same period in 2001. The Company’s average overall debt for the six months ended June 30, 2002 was $20,842,000 as compared to $26,709,400 for the same period in 2001. Lower overall debt levels coupled with lower effective interest rates resulted in the decline in gross interest costs. The Company capitalized $243,600 of interest costs related to the re-commissioning of the Company’s Axis, Alabama facility during the six months ended June 30, 2002.

In 1986, the Company constructed an incinerator to destroy a waste gas that had been previously discharged to the atmosphere pursuant to an air permit. By reducing this emission, the Company was entitled to transfer a portion of its emission credits to others. The Company recognized in the six months ended June 30, 2001, a net gain before taxes of $465,500 as a result of the sale of a portion of its credits.

The Company settled negotiations with an insurance carrier related to the recovery of certain costs pertaining to the completed remediation work of a railroad siding which resulted in a net gain before taxes of $208,300 for the six months ended June 30, 2001. The Company also settled a dispute over data compensation which resulted in a net gain before taxes of $88,100 for the six months ended June 30, 2001.

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LIQUIDITY AND CAPITAL RESOURCES

The Company used $367,200 in operating activities for the six months ended June 30, 2002. Net income of $1,924,300, non-cash depreciation and amortization of $1,137,400 and an decrease in receivables of $4,483,100 provided $7,544,800 of cash for operations. This was more that offset by increases in inventories and prepaid expenses of $2,743,800 and $177,500, respectively; and a decrease of $4,990,700 in payables and accrued expenses.

The Company used $6,815,700 in investing activities during the six months ended June 30, 2002. It invested $4,891,900 in capital expenditures primarily related to the re-commissioning of its facility located in Axis, Alabama. The Company also increased intangible assets by $1,773,600 related to business acquisitions while other noncurrent assets increased by $150,200.

Financing activities provided $7,198,600 for the first six months of 2002. The Company’s received proceeds from long-term debt of $10,000,000. The Company made payments of its long-term debt of $2,397,700, of which, $2,200,000 were payments on its fully-secured line of credit agreement. The Company also paid $403,500 in cash dividends, purchased treasury stock for $18,800 and received $18,600 from the issuance of common stock.

In May 2001, the Company announced that Amvac Chemical Corporation, a wholly-owned subsidiary of the Company, completed the acquisition of a manufacturing facility from E.I. Du Pont de Nemours and Company (“DuPont”). The facility, termed Amvac Axis, Alabama (“AAA”) is one of three such units located on DuPont’s five hundred and ten acre complex in Axis, Alabama. The acquisition of AAA consisted of a long-term ground lease of twenty-five acres and the purchase of all improvements thereon. AAA is a multipurpose plant designed primarily to manufacture pyrethroids and organophosphates, including Fortress®, a corn soil insecticide that the Company purchased from DuPont in 2000. The acquisition of AAA significantly increased the Company’s capacity while also providing flexibility and geographic diversity. Management believes, as the Company looks to acquire additional product lines, AAA will allow the Company to produce compounds that could not be manufactured at the Company’s Los Angeles (Commerce, California) facility and will further complement the Company’s toll manufacturing capabilities. The Company began the commissioning phase of AAA during the third quarter of 2001 and it is anticipated that this phase will be completed sometime during the third quarter of 2002. The Company intends to focus its efforts, in addition to acquiring new product lines and expanding the use of its current products, on discussions with companies that in this time of consolidation in the Company’s industry, may be interested in utilizing the Company’s toll manufacturing capabilities of AAA.

In May 2002, the Company entered into a new $45,000,000 fully-secured long-term credit agreement. The Company’s primary bank (the “Bank”)

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acted as sole administrative agent arranger and syndication agent. The Bank syndicated the new credit facility with another bank. The $45,000,000 credit facility consists of a senior secured revolving line of credit of $35,000,000 and a $10,000,000 senior secured term loan. The borrowings under the credit agreement bear interest at the prime rate (“Referenced Loans”), or at the Company’s option, at a fixed rate of interest offered by the Bank (“Fixed Loans”) for terms of one, two, three, six, nine or twelve months. Interest on the Referenced Loans are payable quarterly, in arrears, on the last day of each March, June, September, and December, and on the maturity date of such loan in the amount of interest then accrued but unpaid. Interest on the Fixed Loans are payable on the last day of the interest period, provided that, with an interest period longer than three months, interest is payable on the last day of each three-month period after the commencement of such interest period. The senior secured revolving line of credit matures on May 31, 2005. The term loan matures on May 31, 2007. The principal payments of the term loan are payable in equal quarterly installments of $625,000 each, on or before the last business day of each February, May, August and November, commencing May 31, 2003 and in one final installment in the amount necessary to repay the remaining outstanding principal balance of the term loan in full on the maturity date.

Management continues to believe, to finance its planned manufacturing capacity (AAA), to continue to improve its working capital position, and maintain flexibility in financing interim needs, it is prudent to explore alternate sources of financing.

RECENT ACCOUNTING PRONOUNCEMENTS

In June 2001, the Financial Accounting Standards Board (FASB) finalized FASB Statements No. 141, Business Combinations (SFAS 141), and No. 142, Goodwill and Other Intangible Assets (SFAS 142). SFAS 141 requires the use of the purchase method of accounting and prohibits the use of the pooling-of-interests method of accounting for business combinations initiated after June 30, 2001. SFAS 141 also requires that the Company recognize acquired intangible assets apart from goodwill if the acquired intangible assets meet certain criteria. SFAS 141 applies to all business combinations initiated after June 30, 2001 and for purchase business combinations completed on or after July 1, 2001.

SFAS 142 requires, among other things, that companies no longer amortize goodwill, but instead test goodwill for impairment at least annually. In addition, SFAS 142 requires that the Company identify reporting units for the purposes of assessing potential future impairments of goodwill, reassess the useful lives of other existing recognized intangible assets, and cease amortization of intangible assets with an indefinite useful life. SFAS 142 is required to be applied in fiscal years beginning after December 15, 2001 to all goodwill and other intangible assets recognized at that date. SFAS 142 requires the Company to complete a transitional goodwill impairment test six months from the date of adoption.

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The Company’s previous business combinations were accounted for using the purchase method. The net carrying amount of goodwill and other intangible assets was $10,049,500 and $11,384,900 as of December 31, 2001 and June 30, 2002, respectively. SFAS 141 and SFAS 142 were adopted on the effective dates, and did not result in any material effects on the Company’s financial statements.

SFAS 143, Accounting for Asset Retirement Obligations, was issued in June 2001 and is effective for fiscal years beginning after June 15, 2002. SFAS 143 requires that any legal obligation related to the retirement of long-lived assets be quantified and recorded as a liability with the associated asset retirement cost capitalized on the balance sheet in the period it is incurred when a reasonable estimate of the fair value of the liability can be made. SFAS 143 will be adopted on the effective date, and adoption is not expected to result in any material effects on the Company’s financial statements.

SFAS 144, Accounting for the Impairment of Disposal of Long-lived Assets, was issued in August 2001 and is effective for fiscal years beginning after December 15, 2001. SFAS 144 provides a single, comprehensive accounting model for impairment and disposal of long-lived assets and discontinued operations. SFAS 144 was adopted on the effective date, and did not result in any material effects on the Company’s financial statements.

In April 2002, the FASB issued SFAS Statement No. 145, Rescission of FASB Statements 4, 44,and 64, Amendment of FASB Statement No. 13, and Technical Corrections (SFAS 145). This statement eliminates the current requirement that gains and losses on debt extinguishment must be classified as extraordinary items in the income statement. Instead, such gains and losses will be classified as extraordinary items only if they are deemed to be unusual and infrequent, in accordance with the current GAAP criteria for extraordinary classification. In addition, SFAS 145 eliminates an inconsistency in lease accounting by requiring that modifications of capital leases that result in reclassification as operating leases be accounted for consistent with sale-leaseback accounting rules. The statement also contains other nonsubstantive corrections to authoritative accounting literature. The changes related to debt extinguishment will be effective for fiscal years beginning after May 15, 2002, and the changes related to lease accounting will be effective for transactions occurring after May 15, 2002. Adoption of this standard will not have any immediate effect on the Company’s consolidated financial statements.

In June 2002, the FASB issued SFAS Statement No. 146, Accounting for Costs Associated with Exit or Disposal Activities (SFAS 146), which addresses accounting for restructuring and similar costs. SFAS 146 supersedes previous accounting guidance, principally Emerging Issues Task Force (EITF) Issue No. 94-3. The Company will adopt the provisions of SFAS 146 for restructuring activities initiated after December 31, 2002. SFAS 146 requires that the liability for costs associated with an exit or disposal activity be recognized when the liability is incurred. Under

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EITF No. 94-3, a liability for an exit cost was recognized at the date of a company’s commitment to an exit plan. SFAS 146 also establishes that the liability should initially be measured and recorded at fair value. Accordingly, SFAS 146 may affect the timing of recognizing future restructuring costs as well as the amount recognized.

CRITICAL ACCOUNTING POLICIES

General

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses at the date that the financial statements are prepared. Actual results could differ from those estimates.

Revenue Recognition

Sales are recognized upon shipment of products or transfer of title to the customer.

Fair Value of Financial Instruments

The carrying values of cash, receivables and accounts payable approximate their fair values because of the short maturity of these instruments.

The fair value of the Company’s long-term debt and note payable to bank is estimated based on the quoted market prices for the same or similar issues or on the current rates offered to the Company for debt of the same remaining maturities. Such fair value approximates the respective carrying values of the Company’s long-term debt and note payable to bank.

Inventories

Inventories are stated at the lower of cost or market. Cost is determined using the first-in, first-out method.

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Depreciation

Depreciation of property, plant and equipment is calculated on the straight-line method over the estimated useful lives of the assets.

Income Taxes

Income taxes have been provided using the asset and liability method in accordance with Financial Accounting Standard No. 109, “Accounting for Income Taxes”.

The asset and liability method requires the recognition of deferred tax assets and liabilities for future tax consequences of temporary differences between the financial statement bases and tax bases of assets and liabilities at the date of the financial statements using the provisions of the tax laws then in effect.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

There are no material changes from the disclosures in the Company’s Form 10-K filed with the U.S. Securities and Exchange Commission for the year ended December 31, 2001.

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PART II. OTHER INFORMATION

The Company was not required to report any matters or changes for any items of Part II except as disclosed below.

Item 4. Submission of Matters to a Vote of Security Holders

The Annual Meeting of Stockholders was held on June 21, 2002 and there were two matters voted on at the meeting.

1.

Elections of directors: The seven nominees listed below were elected to serve on the Board of Directors for the ensuing year. The vote tabulation with respect to each nominee follows:

2.

A proposal by management relating to approval of the amended American Vanguard Corporation 1994 Stock Incentive Plan was submitted to a vote of stockholders. The Board recommended a vote for the proposal. A total of 2,816,716 votes were cast in favor of this proposal, a total of 548,313 votes were cast against it and 52,859 votes were counted as abstentions.

Item 6. Exhibits and Reports on Form 8-K

(a)		Exhibits
		Exhibit 99.1 - Certification Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(b)		Reports on Form 8-K

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

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EXHIBIT INDEX

		Exhibit		Description
		Exhibit 99.1		Certification Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002