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American Vanguard Reports Fourth Quarter & Full Year 2012 Results



  American Vanguard Reports Fourth Quarter & Full Year 2012 Results

Full-Year Revenue up 22% - - Full-Year Net Income up 67% - - Continuing Record
                                 Performance

Business Wire

NEWPORT BEACH, Calif. -- February 28, 2013

American Vanguard Corporation (NYSE: AVD), today announced financial results
for the fourth quarter and full year ended December 31, 2012.

Fiscal 2012 Financial Highlights – versus Fiscal 2011:

  * Net sales were $366.2 million compared to $301.1 million.
  * Net income was $36.8 million compared to $22.1 million.
  * Earnings per diluted share were $1.28 versus $0.79.

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

  * Net sales were $104.3 million compared to $81.8 million.
  * Net income was $11.3 million compared to $6.4 million.
  * Earnings per diluted share were $0.39 versus $0.23.

Eric Wintemute, Chairman and CEO of American Vanguard, stated: “Our
record-setting performance in 2012, capped by our first $100+ million revenue
quarter, was driven by  strong end-use demand and consistent business
execution by our organization. Compared to the prior full-year period, 2012
sales  grew by 22%, gross profit margins  improved from 41% to 44%, and
operating expenses remained steady as a percentage of sales at 28%. This
operating performance allowed us to grow our net income  by 67%  and increase
our fully diluted  earnings per share  to $1.28. Our year-end cash position 
remained very strong; stockholders equity rose for the year by 20%; and we
were able to return additional value to shareholders with a special
$0.10/share dividend during December.”

Mr. Wintemute continued: “Strong global demand for food, feed, fiber and
bio-fuels continues to encourage growers to support the Yield Enhancing
Solutions - YES™ that American Vanguard provides. The practice of  Integrated
Pest Management  has stimulated demand for our comprehensive offering of  corn
soil insecticides and proprietary closed delivery systems. In 2012, we
invested in significant capital improvements at our Axis, Alabama facility to
support both our growing granular soil insecticide franchise and our strong
cotton defoliant business. We also established an international subsidiary in
the Netherlands to focus resources on the important long-range objective of
global expansion. At year-end, in a bold new initiative, we formed a
majority-owned subsidiary with TyraTech, an innovative developer of natural
products that will allow us to participate in the growing demand for “green
technology” in commercial, consumer and agricultural pest control markets.”-

Mr. Wintemute concluded: “In 2013, we are well-positioned to satisfy the
continuing strong demand for our many crop protection products. Attractive
crop commodity prices continue to give growers the financial health and
incentive to invest in our proven technologies for maximizing their harvest
output. We are prepared to satisfy the increasing demand for soil insecticides
in corn and other crops by maintaining full production of our market-leading
products & proprietary equipment systems. We expect to meet the increased
demand for our corn herbicide Impact® which has been stimulated by our
co-marketing agreement with Monsanto’s Roundup® brands. We believe that 2013
will be very promising for American Vanguard and look forward to providing
additional information about those prospects during our earnings conference
call.”

Conference Call

Eric Wintemute, Chairman & CEO and David T. Johnson, VP & CFO, will conduct a
conference call focusing on the financial results at 12:00 pm ET / 9:00 am PT
on Thursday, February 28, 2013. 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
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
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
 
Years ended December 31, 2012, 2011 and 2010
(Dollars in thousands, except per share data)
                                                                  
                                       2012          2011          2010
Net sales                              $ 366,190     $ 301,080     $ 226,859
Cost of sales                            205,065       178,012       140,538  
                                                                    
Gross profit                             161,125       123,068       86,321
Operating expenses                       101,802       83,842        67,130   
                                                                    
Operating income                         59,323        39,226        19,191
Interest expense                         2,872         3,569         3,171
Interest income                          (1      )     (3      )     —
Interest capitalized                     (400    )     (109    )     (154    )
Extinguishment of debt                   —             546           —        
                                                                    
Income before provision for income       56,852        35,223        16,174
taxes
Income taxes expense                     20,026        13,155        5,190    
                                                                    
Net income                               36,826        22,068        10,984
Net loss attributable to                 41            —             —        
non-controlling interest
                                                                    
Net income attributable to American    $ 36,867      $ 22,068      $ 10,984   
Vanguard
                                                                    
Change in fair value of interest         158           (869    )     1,094
rate swaps
Foreign currency translation             330           (933    )     201      
adjustment
                                                                    
Comprehensive income                   $ 37,355      $ 20,266      $ 12,279   
                                                                    
Earnings per common share—basic        $ 1.32        $ 0.80        $ 0.40     
                                                                    
Earnings per common share—assuming     $ 1.28        $ 0.79        $ 0.40     
dilution
                                                                    
Weighted average shares                  27,914        27,559        27,385   
outstanding—basic
                                                                    
Weighted average shares                  28,756        27,875        27,652   
outstanding—assuming dilution
                                                                              
                                                                              

AMERICAN VANGUARD CORPORATION
AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
 
December 31, 2012 and 2011
(Dollars in thousands, except per share data)
                                                                  
                                                                    
                                                     2012          2011
Assets
Current assets:
Cash                                                 $ 38,476      $ 35,085
Receivables:
Trade, net of allowance for doubtful accounts of       76,073        68,611
$623 and $340, respectively
Other                                                  1,230         1,187    
                                                                    
                                                       77,303        69,798   
                                                                    
Inventories                                            87,951        71,068
Prepaid expenses                                       13,710        4,167
Income taxes receivable                                —             203
Deferred income tax assets                             4,877         3,417    
                                                                    
Total current assets                                   222,317       183,738
Property, plant and equipment, net                     45,701        35,537
Intangible assets, net                                 113,521       116,189
Other assets                                           18,351        7,094    
                                                                    
                                                     $ 399,890     $ 342,558  
                                                                    
Liabilities and Stockholders’ Equity
Current liabilities:
Current installments of long-term debt               $ 16,247      $ 14,460
Current installments of other liabilities              1,839         1,038
Accounts payable                                       32,838        23,214
Deferred revenue                                       20,427        7,571
Accrued program costs                                  32,335        25,910
Tax payable                                            1,313         —
Accrued expenses and other payables                    8,671         6,832    
                                                                    
Total current liabilities                              113,670       79,025
Long-term debt, excluding current installments         36,196        51,917
Other liabilities, excluding current installments      5,425         5,955
Deferred income tax liabilities                        19,163        18,589   
                                                                    
Total liabilities                                      174,454       155,486  
                                                                    
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 30,766,730 shares in         3,077         2,985
2012 and 29,845,047 shares in 2011
Additional paid-in capital                             54,323        45,966
Accumulated other comprehensive loss                   (1,762  )     (2,250  )
Retained earnings                                      174,243       143,524  
                                                                    
                                                       229,881       190,225
Less treasury stock at cost, 2,310,634 shares in       (4,804  )     (3,153  )
2012 and 2,260,996 shares in 2011
                                                                    
American Vanguard stockholders’ equity                 225,077       187,072
Non-controlling interest                               359           —        
                                                                    
Total stockholders’ equity                             225,436       187,072  
                                                                    
                                                     $ 399,890     $ 342,558  
                                                                              
                                                                              

AMERICAN VANGUARD CORPORATION
AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS
 
Years ended December 31, 2012, 2011 and 2010
(Dollars in thousands, except per share data)
                                                                  
                                                                    
                                       2012          2011          2010
Increase in cash
Cash flows from operating
activities:
Net income                             $ 36,826      $ 22,068      $ 10,984
Adjustments to reconcile net income
to net cash provided by
operating activities:
Depreciation and amortization of         13,487        13,546        11,123
fixed and intangible assets
Amortization of other long term          2,925         1,983         3,258
assets
Amortization of discounted               818           1,371         —
liabilities
Stock-based compensation                 2,950         1,994         1,122
Tax benefit from exercise of stock       (621    )     —             —
options
(Decrease) increase in deferred          (886    )     4,711         5,342
income taxes
Changes in assets and liabilities
associated with operations:
(Increase) decrease in net               (7,505  )     (35,021 )     6,967
receivables
(Increase) decrease in inventories       (16,883 )     2,986         (1,542  )
Decrease (increase) in income tax        2,137         6,512         (2,583  )
receivable/payable, net
Increase in prepaid expenses and         (23,725 )     (1,823  )     (2,235  )
other assets
Increase in accounts payable             9,781         8,384         3,095
Increase in deferred revenue             12,856        2,003         5,568
Increase (decrease) in other             8,264         10,552        (7,909  )
payables and accrued expenses
                                                                    
Net cash provided by operating           40,424        39,266        33,190   
activities
                                                                    
Cash flows from investing
activities:
Capital expenditures                     (17,628 )     (6,261  )     (8,004  )
Acquisitions of intangible assets        (3,473  )     (316    )     (32,677 )
                                                                    
Net cash used in investing               (21,101 )     (6,577  )     (40,681 )
activities
                                                                    
Cash flows from financing
activities:
Net (repayments) borrowings under        —             (7,300  )     4,700
line of credit agreement
Payments on long-term debt               (8,443  )     (8,429  )     (8,107  )
Payment on other long-term               (6,035  )     (401    )     —
liabilities
Tax benefit from exercise of stock       621           —             —
options
Increase in other notes payable          (51     )     20,063        11,586
Proceeds from the issuance of common
stock (sale of stock under ESPP and      3,227         580           768
exercise of stock options)
Non-controlling interest                 400           —             —
contribution
Payment of cash dividends                (6,148  )     (2,205  )     (819    )
                                                                    
Net cash (used in) provided by           (16,429 )     2,308         8,128    
financing activities
                                                                    
Net increase in cash                     2,894         34,997        637
Effect of exchange rate changes on       497           (1,070  )     138
cash
Cash at beginning of year                35,085        1,158         383      
                                                                    
Cash at end of year                    $ 38,476      $ 35,085      $ 1,158    
                                                                    
Supplemental cash flow information:
Cash paid during the year for:
Interest                               $ 1,891       $ 2,055       $ 3,661    
                                                                    
Income taxes                           $ 18,048      $ 6,359       $ 2,205    
                                                                              
                                                                              

Contact:

American Vanguard Corporation
William A. Kuser, Director of Investor Relations
(949) 260-1200
williamk@amvac-chemical.com
or
Investor Representative
The Equity Group Inc.
Lena Cati, (212) 836-9611
Lcati@equityny.com
www.theequitygroup.com
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