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American Vanguard Reports 2012 Third Quarter & Nine Month Results



  American Vanguard Reports 2012 Third Quarter & Nine Month Results

 Record Third Quarter and Nine Month Net Sales and Net Income Performance - -
           as the Company Gears Up Production for 2013 Corn Season

Business Wire

NEWPORT BEACH, Calif. -- November 01, 2012

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      41           (601   )     87            (1,547  )
interest rate swaps
Foreign currency             306          (988   )     428           (554    )
translation adjustment
Comprehensive income       $ 8,423      $ 3,029      $ 26,069      $ 13,536   
Earnings per common        $ 0.29       $ .17        $ 0.92        $ .57      
share—basic
Earnings per common        $ 0.28       $ .16        $ 0.89        $ .56      
share—assuming dilution
Weighted average shares      27,970       27,575       27,818        27,551   
outstanding—basic
Weighted average shares
outstanding—assuming         28,878       27,993       28,673        27,842   
dilution
                                                                              

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       104,859       68,611
$669 and $340, respectively
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         3,032         2,985
September 30, 2012 and 29,845,047 shares at
December 31, 2011
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      (3,153  )     (3,153  )
September 30, 2012 and at December 31, 2011
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             9,915         10,366
intangible assets
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       3,260         574      
of stock under ESPP and exercise of stock options)
Net cash (used in) provided by financing               (10,087 )     5,682    
activities
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    

Contact:

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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