Market Overview

American Vanguard Reports 2012 Third Quarter & Nine Month Results

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NEWPORT BEACH, Calif.--(BUSINESS WIRE)--

American Vanguard Corporation (NYSE: AVD), today announced financial results for the third quarter and nine month period ended September 30, 2012.

Fiscal 2012 Third Quarter Financial Highlights – versus Fiscal 2011 Third Quarter:

  • Net sales improved to $90.8 million from $73.8 million, an increase of 23%
  • Net income improved to $8.1 million from $4.6 million, an increase of 75%
  • Earnings per diluted share were $0.28 versus $0.16 in the prior year

Fiscal 2012 First Nine Month Financial Highlights – versus Fiscal 2011 First Nine Month:

  • Net sales improved to $262.8 million from $219.9 million, an increase of 20%
  • Net income improved to $25.6 million from $15.6 million, an increase of 63%
  • Earnings per diluted share were $0.89 versus $0.56 in the prior year

Note: Complete details are available in the financial schedules attached to this press release

Eric Wintemute, Chairman and CEO of American Vanguard, stated: “We are pleased to report record net sales and net income performance for the third quarter and the first nine months of 2012 reflecting continued strong demand for our products and excellent profitability of our business. This quarter's results were driven by our participation in cotton and seasonal sales of our soil fumigants for post-harvest applications. Our sales also included initial shipments of granular soil insecticides in response to grower demand ahead of the 2013 planting season.”

Mr. Wintemute continued: “In our current results, we see the continuing trend of profitability improvement, as a higher-valued product mix, selective price increases and solid manufacturing performance all contribute to higher gross profit margins. Our finished goods inventory and accounts receivable levels have both risen, in response to the production associated with the pre-season sales build-up for the upcoming corn planting season. Notwithstanding the current strong growth the Company is experiencing, we continue to have sufficient cash and credit available for capital expenditures and/or potential product acquisitions that we may undertake in the coming quarters.”

Mr. Wintemute concluded: “Our business segments continue to perform well. Looking forward, we believe that much of our growth will be driven by the continuing adoption of our Best-of-Both-Worlds approach for soil insect control and by the success of our Impact® herbicide co-marketing program with Monsanto's Roundup brands. Our marketing programs will be emphasizing AMVAC's Yield Enhancement Solutions (YES®) not only for U.S. corn growers but for all of our customers in all of the crop markets that we serve. As critical components of advanced Integrated Pest Management (IPM) systems, our proven crop protection portfolio should support American Vanguard's continued top-line growth, its strong profitability and the sustainable use of our products in keeping with modern agricultural practices.”

Conference Call

Eric Wintemute, Chairman & CEO and David Johnson, VP & CFO, will conduct a conference call focusing on the financial results at 12:00 pm EDT / 9:00 am PDT on Thursday, November 1, 2012. Interested parties may participate in the call by dialing (201) 493-6744. Please call in 10 minutes before the call is scheduled to begin, and ask for the American Vanguard call. The conference call will also be webcast live via the News and Media section of the Company's web site at www.american-vanguard.com. To listen to the live webcast, go to the web site at least 15 minutes early to register, download and install any necessary audio software. If you are unable to listen live, the conference call will be archived on the Company's web site.

About American Vanguard

American Vanguard Corporation is a diversified specialty and agricultural products company that develops and markets products for crop protection and management, turf and ornamentals management and public and animal health. American Vanguard is included on the Russell 2000® and Russell 3000® Indexes as well as the S&P Small Cap 600 Index. To learn more about American Vanguard, please reference the Company's web site at www.amvac-chemical.com.

The Company, from time to time, may discuss forward-looking information. Except for the historical information contained in the conference call referenced in this release, all forward-looking statements are estimates by the Company's management and are subject to various risks and uncertainties that may cause results to differ from management's current expectations. Such factors include weather conditions, changes in regulatory policy and other risks as detailed from time-to-time in the Company's SEC reports and filings. All forward-looking statements, if any, in this release represent the Company's judgment as of the date of this release.

       

AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES

 
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(In thousands, except per share data)
(Unaudited)
 

 For the three months 

 For the nine months 

 ended September 30 

 ended September 30 

2012 2011 2012 2011
Net sales $ 90,756 $ 73,783 $ 262,848 $ 219,878
Cost of sales   51,131     43,219     147,499     130,722  
Gross profit 39,625 30,564 115,349 89,156
Operating expenses   26,460     22,396     73,540     61,118  
Operating income 13,165 8,168 41,809 28,038
Interest expense 701 899 2,157 2,684
Interest capitalized (165 ) (18 ) (313 ) (92 )
Extinguishment of debt               546  
Income before income tax 12,629 7,287 39,965 24,900
Income tax expense   4,553     2,669     14,411     9,263  
Net income 8,076 4,618 25,554 15,637
Change in fair value of interest rate swaps 41 (601 ) 87 (1,547 )
Foreign currency translation adjustment   306     (988 )   428     (554 )
Comprehensive income $ 8,423   $ 3,029   $ 26,069   $ 13,536  
Earnings per common share—basic $ 0.29   $ .17   $ 0.92   $ .57  
Earnings per common share—assuming dilution $ 0.28   $ .16   $ 0.89   $ .56  
Weighted average shares outstanding—basic   27,970     27,575     27,818     27,551  
Weighted average shares outstanding—assuming dilution   28,878     27,993     28,673     27,842  
 

The income statements for 2012 include the reclassification from operating expenses of $4.1 million of sales and $4.3 million of cost of goods sold related to our Smartbox® systems.

   
AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES
 
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
ASSETS
 
 
Sept 30, Dec. 31,
2012 2011
(Unaudited) (Note)
Current assets:
Cash $ 23,624 $ 35,085
Receivables:
Trade, net of allowance for doubtful accounts of $669 and $340, respectively 104,859 68,611
Other   1,454     1,187  
  106,313     69,798  
Inventories 92,815 71,068
Prepaid expenses and other short-term assets 7,949 4,167
Income taxes receivable   52     203  
Total current assets 230,753 180,321
Property, plant and equipment, net 45,180 35,537
Intangible assets 111,570 116,189
Other assets   10,113     7,094  
$ 397,616   $ 339,141  
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current installments of long-term debt $ 15,615 $ 14,460
Current installments of other liabilities 1,221 1,038
Accounts payable 31,871 23,214
Deferred revenue 1,301 7,571
Accrued program costs 63,268 25,910
Accrued expenses and other payables   9,927     6,832  

Total current liabilities

123,203 79,025
Long-term debt, excluding current installments 38,500 51,917
Other liabilities, excluding current installments 5,318 5,955
Deferred income taxes   15,172     15,172  
Total liabilities   182,193     152,069  
Commitments and contingent liabilities
Stockholders' equity:
Preferred stock, $.10 par value per share; authorized 400,000 shares; none issued
Common stock, $.10 par value per share; authorized 40,000,000 shares; issued 30,316,794 shares at September 30, 2012 and 29,845,047 shares at December 31, 2011 3,032 2,985
Additional paid-in capital 51,528 45,966
Accumulated other comprehensive loss (1,735 ) (2,250 )
Retained earnings   165,751     143,524  
218,576 190,225
 
Less treasury stock, at cost, 2,260,996 shares at September 30, 2012 and at December 31, 2011   (3,153 )   (3,153 )
Total stockholders' equity   215,423     187,072  
$ 397,616   $ 339,141  
 

The balance sheet at December 31, 2011 has been derived from the audited financial statements at that date.

Consistent with the note to the income statement, certain reclassifications have been made to the balances at 12/31/11 associated with our Smartbox systems and other related assets.

   
AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES
 
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
For The Nine Months Ended September 30, 2012 and 2011
(Unaudited)
 
 
Increase (decrease) in cash 2012 2011
Cash flows from operating activities:
Net income $ 25,554 $ 15,637
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of fixed and intangible assets 9,915 10,366
Amortization of other long term assets 2,061 2,018
Amortization of discounted liabilities 592 636
Stock-based compensation 1,856 1,486
Tax benefit from exercise of stock options (493 )
Changes in assets and liabilities associated with operations:
Increase in net receivables (36,515 ) (62,895 )
Increase in inventories (21,747 ) (6,765 )
Increase in prepaid expenses and other assets (8,862 ) (885 )
Decrease in income tax receivable/payable, net 644 9,146
Increase in accounts payable 8,743 7,942
Decrease in deferred revenue (6,270 ) (5,557 )
Increase in other liabilities   37,623     30,976  
Net cash provided by operating activities   13,101     2,105  
Cash flows from investing activities:
Capital expenditures   (14,908 )   (4,466 )
Net cash used in investing activities   (14,908 )   (4,466 )
Cash flows from financing activities:
Net repayments under line of credit agreement (7,300 )
Principal payments on long-term debt (6,000 ) (6,829 )
Tax benefit from exercise of stock options 493
Borrowings on long-term debt 20,063
Decrease in other notes payable (6,460 )
Payment of cash dividends (1,380 ) (826 )
Proceeds from the issuance of common stock (sale of stock under ESPP and exercise of stock options)   3,260     574  
Net cash (used in) provided by financing activities   (10,087 )   5,682  
Net (decrease) increase in cash (11,894 ) 3,321
Cash and cash equivalents at beginning of year 35,085 1,158
Effect of exchange rate changes on cash   433     (647 )
Cash and cash equivalents as of September 30 $ 23,624   $ 3,832  

American Vanguard Corporation
William A. Kuser, Director of Investor Relations
949-260-1200
williamk@amvac-chemical.com
or
AVD'S INVESTOR RELATIONS FIRM
The Equity Group Inc.
Lena Cati
Lcati@equityny.com
www.theequitygroup.com

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