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 December31, 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 email@example.com or AVD’S INVESTOR RELATIONS FIRM The Equity Group Inc. Lena Cati Lcati@equityny.com www.theequitygroup.com
American Vanguard Reports 2012 Third Quarter & Nine Month Results
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