FMC cuts distributor prices, swings to third-quarter EBITDA loss, heads to banks

FMC sells chemicals that farmers spray on crops, in part through channel customers such as distributors, and it expects "increased direct sales to growers in Brazil."¹ Insecticides were 45% of its 2025 revenue.² Revenue in 2025 was $3,467.4 million, about 18 percent lower than the year before, including about $422 million of revenue charges from one-time commercial actions in India; excluding those, revenue fell 8 percent.³ Adjusted EBITDA was $842.7 million.⁴ FMC says Northern Hemisphere seasonality generally results in significant earnings in the first and second quarters, and Latin America was its largest region at 39% of 2025 revenue.⁵

The industry has a few big research-driven players and a growing crowd of copycats. Six innovation companies hold approximately 76 percent of global crop-protection sales, but generic makers keep gaining as patents and data protections expire.¹ FMC says generic producers, particularly in China, have had a significant impact on its results. The composition patents on its Rynaxypyr and Cyazypyr insecticide ingredients have expired in all major markets.²

The past year was hard. FMC wrote off its remaining $1,356.2 million of goodwill in late 2025, and its long-term credit ratings had been cut below investment grade, the tier for safer borrowers.¹ The quarterly dividend was cut to $0.08 a share in October 2025. In February 2026 the board began exploring strategic options, and a law-firm notice says the stock fell 19.54% to $13.67 on February 5.²

FMC then raised money and sold assets. In June it sold $1.2 billion of 8.000% secured notes and used part of the cash to redeem $500.0 million of notes due in October 2026.¹ Corteva paid $200.0 million in advance for a new FMC herbicide.² FMC also agreed to sell its India business for $252 million, signed a framework agreement, which may not result in a transaction, to sell its Newark, Delaware property for about $114 million, and plans to put all India proceeds toward debt.³

On July 29 FMC reported a second-quarter net loss of $186.6 million on revenue of $867.1 million, with Adjusted EBITDA of $152.6 million.¹ It cut its full-year targets to $3.50 billion to $3.70 billion of revenue excluding India and $620 million to $680 million of Adjusted EBITDA. For the third quarter it guided to $840 million to $900 million of revenue excluding India and $120 million to $140 million of Adjusted EBITDA.² It said North American distributors were shifting orders from the third quarter to the fourth, and that it expected growth to return in the fourth quarter.³

The board said in July that it had concluded the strategic review. On September 23 the Belgian industrial group Tessenderlo closed its purchase of 30,319,166 new FMC shares at $13.30 each, paying $403,244,907.80 and reaching about 20.0% of the company.¹ It now holds 31,109,166 of the 155,552,366 shares outstanding, and its chief executive, Luc Tack, was nominated to FMC's board.² Tessenderlo cannot sell through September 23, 2029, must vote with the board on most matters other than a change of control, and says it intends to use its top-up right to buy more shares to hold 20.0%.³

On October 15 FMC issued a release updating its guidance for the three months that ended September 30. It now expects revenue of $65 million to $125 million and Adjusted EBITDA of negative $565 million to negative $510 million.¹ Those estimates include an estimated $625 million to $675 million impact from what FMC calls commercial actions. The revenue figure covers both reported revenue and revenue excluding India.²

There are two actions. First, FMC is lowering the price of select products already held by channel customers, such as distributors, in Brazil, Argentina, the United States and Canada.¹ Second, in the United States it intends to significantly reduce the gap between gross and net pricing. Gross price is the list price; net price is what a buyer pays after rebates, and FMC had $632.4 million of accrued customer rebates on its books at June 30, up from $417.4 million at the end of 2025.²

FMC's explanation is that third-quarter demand was weaker than expected, driven by challenging market conditions and elevated levels of higher-priced FMC products held in inventory by certain channel customers.¹ It says rapid market price declines, driven in part by increased generic competition, widened the gap between what that stock cost and what it is worth today. Distributors are also seeking to run the lowest inventory levels FMC has experienced.² Chief executive Pierre Brondeau said the company had addressed the problem incrementally over several quarters but decided more comprehensive actions were necessary.³

The size is easiest to see against the July guidance. The revenue midpoint fell from $870 million to $95 million, a cut of $775 million.¹ The Adjusted EBITDA midpoint moved from positive $130 million to negative $537.5 million. If the charge midpoint of $650 million is added back, the quarter would have been roughly $110 million, still below the July midpoint, so the price reset explains most but not all of the miss.²

Against the company, the charge is large. At the $8.095 close on October 14 and 155,552,366 shares, FMC was worth about $1.26 billion, so the charge equals about 50% to 54% of that market value, or about $4.18 a share at the midpoint.¹ It is also about 19% of 2025 revenue and about 77% of 2025 Adjusted EBITDA.²

Earnings quality needs care here. Adjusted EBITDA is a non-GAAP measure, meaning FMC's own profit yardstick rather than one set by standard accounting rules.¹ FMC says it cannot yet estimate complete results under standard accounting rules. It has found a triggering event to test its intangible assets for impairment as of September 30 and may record a material non-cash impairment charge.² Those intangible assets, such as brands and product rights, were $2,361.8 million at the end of 2025, while FMC's stockholders' equity was $1,636.8 million at June 30. A write-down uses no cash but would shrink that equity.³

The bigger cash question is how the price cuts get paid. FMC had $2,070.5 million of trade receivables at June 30, much of it owed by the channel customers now getting price cuts, so the markdowns could come as credits against those bills, as cash, or both.¹ Cash flow was already thin: free cash flow was negative $165.3 million in 2025, and negative $270.7 million in the seasonally cash-hungry first half of 2026 (against negative $556.0 million a year earlier), helped by the $200.0 million Corteva payment; in July FMC guided full-year free cash flow to $75 million to $225 million, a figure these markdowns now put at risk.²

For liquidity, FMC had $476.6 million of cash at June 30, of which $460.0 million sat in foreign subsidiaries. It also had $1,560.9 million of unused room on its revolving credit line, a bank line it can draw and repay, which runs to 2028.¹ Short-term debt and current maturities were $326.3 million. The October 2026 notes were already redeemed, and its remaining senior notes come due from 2029 to 2053.² Since then Tessenderlo has paid in $403,244,907.80, which FMC intends to use to pay down debt, and the India and Newark sales could add more later in 2026.³

Leverage is where the reset bites. Total debt was $4,280.6 million at June 30, or about $3.80 billion net of cash. That was about 5.1 times Adjusted EBITDA over the year to June 30, which comes to about $741 million.¹ That trailing figure starts from full-year 2025's $842.7 million. It then swaps out the first half of 2025, at $326.2 million, for the first half of 2026, at $224.7 million.² If all of Tessenderlo's money went to debt, net debt would be about $3.4 billion before third-quarter cash flows. But add up the past year on the new guidance: $280 million in the fourth quarter of 2025, $224.7 million in the first half of 2026 and the new third-quarter range gives about negative $60 million to negative $5 million of Adjusted EBITDA.³

FMC's bank covenants are the tests that decide whether lenders can call the loan. Its maximum leverage ratio was not tested in the first three quarters of 2026 and then rises to 6.75 through 2027, and its minimum interest coverage, profit divided by interest, is 2.00 through June 30, 2027.¹ At June 30 its interest coverage was 2.78 and its secured leverage was 1.66 against a 3.50 cap, and it was in compliance with all covenants.² FMC says it expects to comply at September 30 but intends to discuss further covenant changes with its bank group over the next year. The first leverage test at 6.75 falls at December 31, and how the bank measure treats these charges is not public.³

Who gets paid first matters when cushions are thin. The $1.2 billion of 8.000% secured notes have first-priority liens on substantially all of FMC's assets and those of its guarantor subsidiaries.¹ Behind them sit $1,998.7 million of senior notes at 3.5% to 6.4% and $750.0 million of 8.45% subordinated notes due 2055, and common shareholders come last.² There are 155,552,366 shares outstanding, and 5.0 million potential shares were excluded from second-quarter diluted earnings per share. FMC has agreed not to buy back stock, except under its equity pay plans, until December 31, 2028, and the $0.08 quarterly dividend costs about $12 million a quarter.³

Look at both sides of the money. FMC is giving distributors an estimated $625 million to $675 million in lower prices and giving up a pricing model built on large rebates.¹ In return it says the reset positions it to operate at full potential in 2027, 2028 and the long term. That benefit is FMC's goal, not a promise.² Tessenderlo's side has already turned sour. It paid $13.30 a share three weeks ago, and at $5.355 its 31,109,166 shares are worth about $167 million, about 60% below its price, while FMC kept the $403,244,907.80 for debt reduction.³

The market's verdict was harsh. FMC moved down 33.8% since the filing, from its last close before it of $8.095 on October 14 to $5.355 at 14:44 ET on October 15, while the S&P 500 fund was roughly flat, $769.65 to $769.9.¹ At that price FMC's shares are worth about $833 million, a thin slice on top of about $3.80 billion of net debt.² Two plaintiffs' law firms, Holzer & Holzer and Block, Leviton, announced investigations of FMC the same day.³ This is not new ground: securities class actions pending in the Eastern District of Pennsylvania cover a class period from November 16, 2023 to October 29, 2025, and the second amended complaint filed January 12, 2026 covers channel inventory and sales practices.⁴

The bull case is that this is a one-time clean-out: once the higher-priced stock distributors hold is repriced to market, FMC's new sales no longer compete with its own older, pricier product, and before the charges the quarter's Adjusted EBITDA would have been roughly $110 million, below July's $120 million to $140 million guide.¹ The catch is that certain channel customers still hold elevated levels of higher-priced FMC products and distributors are seeking to operate with the lowest inventory levels FMC has experienced, so the timing of any restocking is not known.² FMC targets $200 million of yearly savings from its Project Foundation cost plan by the end of 2027. It has no note maturities before 2029, an anchor holder that is locked up until 2029, and pending asset sales whose proceeds it plans to use against debt.³

The bear case, ranked. First, FMC needs its banks: it plans to seek further covenant changes over the next year, and banks that grant relief usually ask for something in return.¹ Second, the markdowns reduce cash FMC expected to collect, at a time when free cash flow was already negative. Third, prices are falling partly because of generic rivals, which FMC expects to keep growing, and the company says the incremental steps it took over several quarters were not enough under current market conditions.² Fourth, an impairment would cut stockholders' equity, which was $1,636.8 million at June 30, before Tessenderlo's $403,244,907.80 came in on September 23 and before the third-quarter loss. If FMC ever needed new equity, it would come at a far lower price than the $13.30 Tessenderlo paid.³

FMC's own forward case is a set of goals. It says the actions position it to operate at full potential in 2027, 2028 and the long term, and it will share preliminary 2027 and 2028 expectations on October 30.¹ In July it expected Adjusted EBITDA of $275 million to $315 million in the fourth quarter; the new release updates only the third quarter, and FMC says it will give its 2026 outlook when it reports on October 29.²

What would prove the bear case wrong, and when we will know: on October 29 FMC reports full third-quarter results, which should show cash and debt at September 30, the size of any impairment and how the price cuts were booked.¹ On October 30 it gives 2027 and 2028 expectations. Then comes any bank amendment, the first 6.75 leverage test at December 31, and the India and Newark closings expected in 2026.²

The release gives the $625 million to $675 million cost but not whether it will be settled in cash, as credits against what distributors owe, or both, which decides how much cash leaves FMC.

FMC expects to comply at September 30 and plans to talk to its banks, but the filings we have do not show whether the covenant earnings measure adds back these commercial charges.

FMC says it may record a material non-cash impairment charge for the quarter but gives no amount.

FMC says it cannot yet issue complete quarterly results, so its cash, borrowing and debt at September 30, and how much of Tessenderlo's money has already gone to debt, are not known.

The release updates only the third quarter; FMC says it will give its 2026 outlook when it reports on October 29, so whether July's $620 million to $680 million full-year Adjusted EBITDA target survives is unknown until then.