Market Overview

American Vanguard Reports Third Quarter and Nine-Month 2019 Results

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American Vanguard Corporation (NYSE:AVD), today announced financial results for the three- and nine-month periods ended September 30, 2019.

Financial Highlights Fiscal 2019 Third Quarter – versus Fiscal 2018 Third Quarter

  • Net sales of $125 million in 2019, compared with $112 million in 2018
  • Net income of $3.2 million in 2019, compared with $6.5 million in 2018
  • Earnings per diluted share of $0.11 in 2019, compared with $0.22 in 2018
  • EBITDA1 of $12 million in 2019, compared with $17 million in 2018

Financial Highlights Fiscal 2019 First Nine Months – versus Fiscal 2018 First Nine Months

  • Net sales of $338 million in 2019, compared with $323 million in 2018
  • Net income of $10.2 million in 2019, compared with $16.8 million in 2018
  • Earnings per diluted share of $0.34 in 2019, compared with $0.56 in 2018
  • EBITDA of $37 million in 2019, compared to $45 million in 2018

Eric Wintemute, Chairman and CEO of American Vanguard commented, "As we noted in our pre-announcement, driven largely by our international business, consolidated net sales for the quarter grew by 12%. At the same time, net income declined for the period, with earnings per share at $0.11 for the quarter. This was due to lower factory activity, higher operating expenses and a comparatively higher benefit in the comparable quarter of 2018 relating to the reassessment of deferred purchase price consideration."

Mr. Wintemute continued, "Our overall performance was mixed. On the one hand, our international business grew by 27% during the quarter. With further integration of relatively early-stage business operations, we experienced expansion in Central America, Brazil, Mexico and Canada. On the other hand, the domestic business was held to only 3% growth in the quarter due to extreme weather conditions that have set back the entire industry. Persistent rains and cold during the first half of 2019 delayed plantings, pushed harvest times back and reduced demand for post-harvest fumigants. This was followed by record-setting heat in the Southern region during the third quarter that reduced demand for defoliants, fungicides and insecticides. Notwithstanding these weather challenges, our domestic Ag sales increased by 1% in the third quarter and we recorded a 10% increase in our domestic non-crop sales, led by our mosquito adulticide and pest strip product lines."

Mr. Wintemute continued, "Focusing on full year 2019 results, we expect consolidated sales to increase by about 5% year-over-year with mixed performance among our major markets. International sales should increase by about 25% for the full year. However, our domestic sales will likely decrease by about 5% on a per annum basis, which we believe is consistent with industry-wide forecasts that show domestic markets receding by 6% to 12% for the year. With these considerations in mind, we are expecting full year 2019 net sales of approximately $475 million, gross profit margins around 38%, operating expenses of approximately $155 million and a full corporate tax rate of approximately 29%."

Mr. Wintemute concluded, "During our earnings conference call, we will cover current and near-term market conditions, provide our preliminary outlook for 2020 and outline continued efforts to improve our balance sheet. We will also update listeners on technology development with a focus on biological products and SIMPAS."

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 and the Standard & Poor's Small Cap 600 Index. To learn more about American Vanguard, please reference the Company's web site at www.american-vanguard.com.

The Company, from time to time, may discuss forward-looking information. Except for the historical information contained 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

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

(Unaudited)

 

ASSETS

 

 

September 30,

2019

 

 

December 31,

2018

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

5,887

 

 

$

6,168

 

Receivables:

 

 

 

 

 

 

 

 

Trade, net of allowance for doubtful accounts of $1,988 and $1,263, respectively

 

 

140,220

 

 

 

123,320

 

Other

 

 

13,783

 

 

 

10,709

 

Total receivables, net

 

 

154,003

 

 

 

134,029

 

Inventories, net

 

 

186,285

 

 

 

159,895

 

Prepaid expenses

 

 

10,731

 

 

 

10,096

 

Income tax receivable

 

 

88

 

 

 

 

Total current assets

 

 

356,994

 

 

 

310,188

 

Property, plant and equipment, net

 

 

55,330

 

 

 

49,252

 

Operating lease right-of-use assets

 

 

12,186

 

 

 

 

Intangible assets, net of amortization

 

 

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