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 (the "SEC"). It is not possible to foresee or identify all such factors. 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, 2008.

RESULTS OF OPERATIONS

Quarter Ended September 30:



                                      2009       2008      Change
                    Net sales:
                    Crop            $ 56,628   $ 52,326   $  4,302
                    Non-crop           9,743     15,310     (5,567 )

                                    $ 66,371   $ 67,636   $ (1,265 )

                    Gross profit:
                    Crop            $ 18,131   $ 20,671   $ (2,540 )
                    Non-crop           3,233      8,115     (4,882 )

                                    $ 21,364   $ 28,786   $ (7,422 )

Our overall sales performance has improved compared to the second quarter of the year. However, overall financial performance (including net sales and net income) for the quarter ended September 30, 2009 is down compared to the same period of the prior year. Our net sales for the period are down 2% to $66,371 compared to the same period of 2008. Net sales for our crop business are up 9%, while net sales of our non-crop segment are down 37% as compared to the same period of last year.

While net sales in the aggregate were basically flat for the quarter as compared to the same period last year, the sales performance of our product lines varied. Our granular soil insecticides continued to perform well compared to last year. However, sales of insecticide products were down sharply due to reduced demand for our (Dibrom) mosquito adulticide, sales of which were down by approximately 70% compared to the same period of 2008, due to low insect pressure and a lack of precipitation in the South and Southwest. By comparison, the third quarter of 2008 presented ideal conditions for use of our adulticide, and we enjoyed record sales during that period. Sales of our cotton insecticide, Bidrin and Bidrin XP, were up as compared to the same period in 2008; however, cotton acres continue at the low levels present last year, confirming market recognition that we have a superior product offering.

Net sales of our Orthene (acephate) and Discipline (bifenthrin) products tended to be down in the face of heavy competition and large inventory in the distribution channel. Further, as discussed below, the gross margins of our insecticide product lines declined over the comparable quarter in 2008 due in part to the fact that we were

focused on selling higher cost inventory items as part of our inventory reduction initiative. Our herbicides, including our post-emergent corn herbicide, Impact, sold well in the quarter, despite a challenging market in corn, including late planting due to rain and a just-in-time buying pattern among customers. Herbicide sales gained some ground on sales not realized earlier in the year. Our plant growth regulators had another good quarter with sales continuing strongly ahead of the comparable quarter last year; however, some of that performance appears to be timing; during 2008, sales of this product line occurred primarily in the second quarter, while in 2009, they occurred in the third quarter.

Sales by our foreign subsidiaries continue to grow strongly in comparison to the prior year, with particularly strong growth in Costa Rica. However, our overall international sales were down 20% compared to the same period of 2008. This mainly relates to a drop in global sales of approximately 35% of our fungicide, PCNB; this decline arose from the fact that distribution in one international region had purchased a two year supply of that product in the third quarter of 2008 and did not purchase any product in the same quarter of 2009. Similarly, we had a relatively large one time transaction in Africa in 2008 which did not repeat this year. As noted above, our key Central American markets performed well despite continued tight control on credit affecting some demand.

Cost of sales for the quarter ended September 30, 2009, ended at $45,007 or 68% of sales compared to $38,850 or 57% of sales for the same period of 2008. When looking solely at our selling activities, the sales mix of our products generated a gross profit percentage performance below the level achieved in the same period of 2008. There were a few significant factors driving this result. As part of our initiative to reduce inventory and in the face of intense, short-term competitive pressure, we have sold certain products internationally at lower prices in order to retain our market share. Furthermore, in order to drive down inventory we have made decisions to hold back on manufacturing output, accepting the short-term burden of under-absorbed overheads. Furthermore, we continue to make intense efforts to focus on selling certain line items in inventory. These actions together have yielded a significant drop in inventory value but have also had a negative impact on margins. As a result, gross profit ended the period at $21,364 or 32% of sales for the period ended September 30, 2009, as compared to $28,786 or 43% of sales for the same period of 2008.

It should be noted that, when making comparisons with other companies' financial statements, the Company reports distribution costs in operating expenses and not as part of cost of sales.

Operating expenses are down 4% at $17,470 for the three months ending September 30, 2009 as compared to last year's expense of $18,111. The differences in operating expenses by department are as follows:

                                                      2009       2008      Change
     Selling                                        $  5,751   $  5,049   $    702
     General and administrative                        4,175      4,393       (218 )
     Research, product development and regulatory      2,928      2,504        424
     Freight, delivery and warehousing                 4,616      6,165     (1,549 )

                                                    $ 17,470   $ 18,111   $   (641 )

• Selling expenses increased by $702 to $5,751 for the three months ended September 30, 2009 as compared to the same period of last year. There are several drivers for this increase in cost. Costs associated with running our operations in Mexico, Costa Rica and to a lesser extent, Brazil increased by $260 as we invest in the growth and development of our presence in those regions. In addition, we incurred $70 higher costs, mainly related to timing, supporting our proprietary row systems in the field. We have made the decision to increase our presence in certain markets and incurred $154 additional labor costs as a result. Other increases related to commissions, programs and insurance.

• General and administrative expenses reduced by $218 to $4,175 as compared to $4,393 for the same period of 2008. The main drivers are investment in additional management resources up $124, increased legal costs compared to the same quarter of 2008, during which period we reported a one time credit in the amount of $390. Furthermore, we have again reduced the accrual for bonuses reflecting continued weak financial performance.

• Freight, delivery and warehousing costs for the three month period ended September 30, 2009 were $4,616 or 7% of sales, representing a reduction of $1,549 as compared to the same period in 2008, during which such costs were $6,165 or 9% of sales. The driver for this change is the product mix and the intense efforts being made to focus on and improve our control of these logistics costs. Finally, we reported earlier that our sales mix in the quarter included reduced levels of our mosquito products which, as reported last year, drive high freight costs.

Interest costs, net of capitalized interest, were $813 in the three months ended September 30, 2009 as compared to $1,035 in the same period of 2008. Interest costs are summarized in the following table:

Average Indebtedness and Interest expense

                                                Q3 2009                                      Q3 2008
                                 Average      Interest         Interest       Average      Interest         Interest
                                   Debt        Expense           Rate           Debt        Expense           Rate
Term Loan                        $ 49,989     $     564             4.5 %     $ 53,989     $     747             5.5 %
Real Estate                         2,119            31             5.7 %        2,226            32             5.7 %
Working Capital Revolver           41,087           230             2.2 %       21,174           319             6.0 %

Average                            93,195           825             3.5 %       77,389         1,098             5.6 %

Other notes payable                 3,200            -               -           3,750            -               -
Capitalized Interest                   -            (12 )            -              -            (63 )            -

Adjusted Average indebtedness    $ 96,395     $     813             3.3 %     $ 81,139     $   1,035             5.1 %

The Company's average overall debt for the three months ended September 30, 2009 was $96,395 as compared to $81,139 for the same period in 2008. The Company made $1,027 in scheduled payments of its term debt in both periods. Revolver debt reduced by $14,500 during the three months to September 2009 as compared to a reduction of $5,000 during the same period of 2008. Our cash position in the quarter included the benefit from an early pay option as part of our distributor programs. Our overall performance continues to be favorably impacted by movement in the LIBOR rate during the period to September 30, 2009 as compared to the same period of 2008. As can be seen from the table above, our effective interest rate during the period was 3.3% as compared to 5.1% for 2008.

The Company's income tax expense was $984 as compared to $3,611 for the same period of 2008. The Company's effective tax rate was decreased to 32% mainly due to its financial performance year to date and the recent submission of amended returns to claim additional state tax credits. As previously reported, we are currently undergoing an audit with the IRS for the 2007 tax year, however, no adjustments have been made to date. Furthermore, based on its analysis, the Company determined that FASB ASC 740 [FIN 48] does not have a material impact on its financial position as of September 30, 2009. Accordingly, there were no adjustments to the balance sheet during this period. The Company does not anticipate any material changes to its recognized tax benefits over the next 12 months as a result of applying ASC 740.

The Company reported net income of $2,097 or $0.08 per diluted share for the three months ended September 30, 2009. This compared to net income of $6,029 or $0.22 per diluted share for the comparable period of 2008. This decline is driven by several factors: the significant reduction in sales in the quarter of our Dibrom mosquito products and PCNB fungicide products, the drive to reduce inventory reflecting change in demand pattern from our key customers driving factory cost under-absorption and decisions made to sell internationally at low margins in response to specific competitive situations.

Nine Months Ended September 30



                                     2009        2008       Change
                   Net sales:
                   Crop            $ 130,133   $ 133,016   $  (2,883 )
                   Non-crop           28,360      33,462      (5,102 )

                                   $ 158,493   $ 166,478   $  (7,985 )

                   Gross profit:
                   Crop            $  45,508   $  55,295   $  (9,787 )
                   Non-crop           10,831      14,839      (4,008 )

                                   $  56,339   $  70,134   $ (13,795 )

For the nine month period ended September 30, 2009, the Company reported sales of $158,493; these net sales were down 5% as compared to the same period of 2008. Our granular soil insecticides started the year strongly following delayed sales from the last quarter of the prior year and have kept on track during the nine months to date. Our fumigants have continued in line with last year. Our plant growth regulators are doing well. Our herbicides and insecticides began the year at or above targeted sales levels. However, the Company experienced a challenging business environment in the second quarter, during which sales of our herbicide product declined significantly as customers reduced their inventory and adopted a "buy-as-needed" approach to procurement, and weather conditions in the Midwest delayed the corn planting season and affected the use of post-emergent herbicides. In that same quarter, sales of our leading insecticides were also down due to reduced acres in cotton and peanuts and a decrease in pest pressure on cotton and other crops. As explained more fully above, net sales in the third quarter have returned to historical levels; however, reduced sales in our mosquito adulticide, due to a lack of precipitation and pest pressure in our primary markets, negatively impacted both top and bottom line performance. Net sales were further eroded in the third quarter by reduced international demand for our fungicide product line. Reasonably strong sales of our herbicides in the third quarter were partly offset by reduced sales of insecticides in the face of generic pressure and high inventory levels in the channel. Despite solid performances out of our two main foreign subsidiaries, our international sales continue to perform below the levels achieved in the same period of 2008. International sales are down 12% overall. This includes some impact from tight regional credit control and some large transactions in 2008 that have not repeated in the current year.

As can be seen from the table above, our crop sales are tracking 3% below last year for the nine months to September 30, 2009. Our non-crop segment sales are 16% below year to date.

Cost of sales ended at $102,154 or 64% of net sales compared to $96,344 or 58% of net sales for the same period of 2008. This result has arisen from a number of factors. First, we experienced increased factory costs relating to waste handling on the start-up of a new product in the first quarter. Second, gross profit as a percentage of sales was reduced by tolling activities which benefited plant utilization but served to lower low gross profit levels. Third, we have experienced some price erosion on international sales made in order to maintain our market share in the face of heavy competitive pressure. Fourth, as part of our initiative to reduce inventory, we have reduced factory throughput, thereby incurring fixed cost absorption from reduced operating rates.

Gross profit for the nine months ended September 30, 2009 were down at $56,339 or 36% of net sales as compared to $70,134 or 42% of net sales in the same period of 2008. This decline is predominantly due to the mix of sales in the third quarter (as described above in our review of the three month period), including reduced sales of high-margin products and a proportionately higher volume of sales of high-cost inventory as part of our inventory reduction initiative.

Operating expenses for the nine months ended September 30, 2009, increased by $2,077 to end at $49,570 compared to $47,493 for the comparable period of last year. The differences in operating expenses by department are as follows:

                                                      2009       2008      Change
     Selling                                        $ 16,303   $ 14,765   $  1,538
     General and administrative                       14,498     12,661      1,837
     Research, product development and regulatory      8,045      6,338      1,707
     Freight, delivery and warehousing                10,724     13,729     (3,005 )

                                                    $ 49,570   $ 47,493   $  2,077

• Selling expenses for the period ended September 30, 2009 increased by $1,538 to $16,303 as compared to $14,765 for the same period of 2008. Included in this change, advertising and promotional spending in support of our key product lines were up $169, program related expenses were up $380, and our field stewardship costs were up $670. As an offset, expenses related to our proprietary delivery systems were down $250 related to one time costs incurred last year.

• General and administrative expenses increased by $1,837 to end at $14,498 for the nine month period ended September 30, 2009. This includes spending, reported in the first quarter of 2009, related to a major potential acquisition. This cost was offset by reduced bonus accruals reflecting the financial performance for the nine-months ended September 30, 2009. Finally, we reported in the third quarter of 2008, a one time credit related to legal costs in the amount of $390; there was no similar credit in the nine months ended of September 30, 2009.

• Research, product development costs and regulatory registration expenses increased by $1,707 to $8,045 for the nine months ended September 30, 2009, as compared to $6,338 for the same period of 2008. The main drivers were increased product defense costs related to both recently acquired product lines and established product lines.

• Freight, delivery and warehousing costs for the first nine months of 2009 decreased by $3,005 to $10,724 or 7% of sales as compared to $13,729 or 8% of sales for the same period of 2008. This reduction as a percentage of sales, reflects continued effort to control these expenses by careful distribution in the supply chain and savings related to urgent shipments. Specifically, in the three months ended September 30, 2009, lower sales of our mosquito products drove significantly lower freight costs.

Interest costs net of capitalized interest, were $2,584 in the nine month period ended September 30, 2009 compared to $3,099 in the same period in 2008. The Company's average overall debt for the nine months ended September 30, 2009 was $101,521 and the effective interest rate was 3.4%. This compares to $85,743 and an effective interest rate of 4.8% for the same period in 2008. The reduced effective interest rate is driven by movements in LIBOR in the two periods.

Average Indebtedness and Interest expense

                                     Nine Months ended September 30, 2009             Nine months ended September 30, 2008
                                    Average         Interest         Interest        Average         Interest         Interest
                                      Debt          Expense            Rate            Debt          Expense            Rate
Term Loan                         $     50,982    $      1,765            4.6 %    $     54,985    $      2,300            5.6 %
Real Estate                              2,128              92            5.8 %           2,235              95            5.7 %
Working Capital Revolver                44,960             765            2.3 %          25,880             950            4.9 %

Average                                 98,070           2,622            3.5 %          83,100           3,345            5.4 %

Other notes payable                      3,451              -              -              2,643              -              -
Interest Income                             -               -              -                 -              (75 )           -
Capitalized Interest                        -              (38 )           -                 -             (171 )           -

Adjusted Average indebtedness     $    101,521    $      2,584            3.4 %    $     85,743    $      3,099            4.8 %

During the nine month period, scheduled payments were made on the term loan, the real estate loan and, in line with our normal seasonal cycle, our revolver debt increased through the first four months and then started to reduce. Our results have been favorably impacted by movement in the LIBOR rate in comparison to the rate during the same period of 2008. As noted above, we have also seen the benefit of take up of options in our distributor programs for early cash discounts. As can be seen from the table above, our effective interest rate during the period was 3.4% as compared to 4.8% for 2008.

The Company's income tax expense was $1,393 and $7,438 for the nine months ended September 30, 2009 and 2008, respectively. The Company's effective rate has decreased to 33% mainly due to its financial performance year to date and the recent submission of amended returns to claim additional state tax credits. As noted above, the Company is undergoing an audit with the IRS for the 2007 tax year, however, no adjustments have been made to date. Also as noted above, the Company has determined that FASB ASC 740 does not have a material impact on its financial position as of September 30, 2009. Accordingly, there were no adjustments to the balance sheet during this period. The Company does not anticipate any material changes to its recognized tax benefits over the next 12 months as a result of applying ASC 740.

The Company reported net income of $2,792 or $0.10 per diluted share for the nine months ended September 30, 2009. This compares to $12,204 or $0.44 per diluted share for the comparable period in 2008. This decline arose primarily from a decrease in net sales, a drop in gross margin, and reduced manufacturing activity.

LIQUIDITY AND CAPITAL RESOURCES

The Company generated $4,350 of cash in operating activities during the nine months ended September 30, 2009. This compared to utilizing $2,192 in the same period of last year. Net income of $2,792, non-cash depreciation and amortization of $10,124 and stock based compensation expense of $895 provided a net cash inflow $13,811 compared to $21,369 for the same period last year.

The main driver for the improvement in cash generated from operational activities is intense activity that has been ongoing for the last six months focused on driving down inventory levels. This has resulted in bringing inventory down to $99,475 as at September 30, 2009, $112,434 at the end of June 2009. This has been achieved despite the clear industry-wide dynamic of taking up a "buy-only-as-needed" methodology.

During the early part of the year we established goals aimed at reducing inventory for the financial year to below the level achieved in December 2008. During the quarter ended September 30, 2009, we have reduced inventory by $12,959. This has been achieved as a result of limiting manufacturing output reflecting short-term demand and focusing on international opportunities even at low margin. We intend to continue to manage our inventory positions very tightly going forward.

The Company continues to focus on tightly controlling capital spending and has used $3,746 in investing activities during the nine months ended September 30, 2009. The business is focused on achieving a lower level of capital spending this year after making some heavy investments last year. Despite considering possible product line acquisitions during the nine months ended September 30, 2009, we have not identified suitable potential additions that meet our investment criteria. During the nine months ended September 30, 2008, the Company used $16,993 in investing activities.

Financing activities used $953 during the nine months ended September 30, 2009, as compared to providing $19,518 in the same period of the prior year. Net borrowings under the Company's secured revolving line of credit has increased by $3,000 during the nine month period to September 30, 2009, as compared to an increase of $23,000 in the same period of 2008. During the three months ended September 30, 2009, the Company has decreased borrowings against the revolving line of credit by $14,500 as compared to a reduction of $5,000 during the same period of 2008. The Company received $468 from the sale of common stock under its ESPP plan. Furthermore, the Company made scheduled payments amounting to $3,080 on its term loans and $1,341 in dividend payments.

The Company has various loans in place that together constitute the short-term and long-term loan balances shown in the balance sheet as at September 30, 2009 and December 31, 2008. These are summarized in the following table:-

Indebtedness                             September 30, 2009                       December 31, 2008
$000's                           Long-term     Short-term     Total      Long-term     Short-term     Total
Term Loan                       $    42,000   $      7,000   $ 49,000   $    48,000   $      4,000   $ 52,000
Real estate                           1,968            106      2,074         2,048            106      2,154
Working Capital Revolver             27,500             -      27,500        24,500             -      24,500
Other Notes Payable                     800          2,400      3,200         1,200          2,550      3,750

Total Indebtedness              $    72,268   $      9,506   $ 81,774   $    75,748   $      6,656   $ 82,404

The Company has four key covenants to its credit facility with its banking syndicate. The covenants are as follows: (1) the Company must maintain its borrowings below a certain consolidated funded debt ratio, (2) the Company has a . . .