American Vanguard Reports First Quarter 2013 Results Record performance driven by strong demand for corn herbicide and insecticide products Business Wire NEWPORT BEACH, Calif. -- May 02, 2013 American Vanguard Corporation (NYSE:AVD), today announced financial results for the first quarter ended March 31, 2013. Fiscal 2013 First Quarter Financial Highlights – versus Fiscal 2012 First Quarter • Net sales of $121.5 million, compared with $87.3 million, an increase of 39%. • Net income of $16.9 million, compared with $8.7 million, an increase of 94%. • Earnings per diluted share of $0.59, compared with $0.31, an increase of 90%. Eric Wintemute, Chairman and CEO of American Vanguard, stated: “This record 2013 first quarter result demonstrates the continuing performance that we have been delivering over the last three years. Our net sales increase of 39% was driven largely by the strong demand for both our granular soil insecticides and our Impact® herbicide in the U.S. corn market. Gross profit margins rose to 44% on a profitable product mix, improved pricing and continued progress on factory utilization. Operating expenses as a percentage of net sales declined to 23%, despite higher selling and administrative expenses associated with our dynamic growth. Stronger sales, improved gross margins and operating expense management enabled us to improve our net income by 94%...to a very strong 14% of net sales.” Mr. Wintemute continued, “First quarter sales of granular soil insecticides for corn continued their strong fourth quarter 2012 trend. This is driven by U.S. corn growers who continue to support our proven crop protection products in conjunction with genetically modified seeds, as part of an integrated pest management system. This provides the most comprehensive defense against root damaging soil insects. American Vanguard has the largest offering of these yield enhancing insecticides along with the most advanced, closed delivery equipment for safely and efficiently dispensing these products. We also are benefitting from our co-marketing program with Monsanto, which rewards corn growers for using AMVAC’s Impact® post-emergent herbicide with Monsanto’s widely used Roundup® glyphosate herbicide brands.” Mr. Wintemute concluded, “We continue to expand our business with a number of exciting new developments. During the quarter we announced the registration of our SmartBlock® potato sprout inhibitor, our investment in the natural products technology of TyraTech, Inc. and the continued staffing of our international subsidiary in the Netherlands. We look forward to giving additional details during our first quarter earnings call.” Conference Call Eric Wintemute, Chairman & CEO and David T. Johnson, VP & CFO, will conduct a conference call focusing on the financial results at 4:30 pm ET / 1:30 pm PT on Thursday, May 2, 2013. Interested parties may participate in the call by dialing (201) 493-6744 – please dial 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 (In thousands, except per share data) (Unaudited) For the three months ended March 31, 2013 2012 Net sales $ 121,537 $ 87,255 Cost of sales 67,756 49,877 Gross profit 53,781 37,378 Operating expenses 27,628 22,976 Operating income 26,153 14,402 Interest expense 547 735 Interest capitalized (194 ) (36 ) Income before provision for income taxes 25,800 13,703 Income tax expense 8,981 4,969 Net income 16,819 8,734 Net loss attributable to non-controlling interest 96 — Net income attributable to American Vanguard 16,915 8,734 Change in fair value of interest rate swaps 178 22 Foreign currency translation adjustment 407 542 Comprehensive income $ 17,500 $ 9,298 Earnings per common share—basic $ .60 $ .32 Earnings per common share—assuming dilution $ .59 $ .31 Weighted average shares outstanding—basic 28,269 27,624 Weighted average shares outstanding—assuming 28,879 28,299 dilution AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands, except per share data) ASSETS Mar. 31, Dec. 31, 2013 2012 (Unaudited) (Note) Current assets: Cash $ 9,995 $ 38,476 Receivables: Trade, net of allowance for doubtful accounts of 146,917 76,073 $623 and $623, respectively Other 1,294 1,230 148,211 77,303 Inventories 109,489 87,951 Prepaid expenses 13,909 13,710 Deferred income tax assets 4,877 4,877 Total current assets 286,481 222,317 Property, plant and equipment, net 48,001 45,701 Intangible assets 111,933 113,521 Other assets 28,030 18,351 $ 474,445 $ 399,890 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Current installments of long-term debt $ 10,070 $ 16,247 Current installments of other liabilities 1,703 1,839 Accounts payable 63,909 32,838 Deferred revenue 2,279 20,427 Accrued program costs 73,696 32,335 Accrued expenses and other payables 9,564 8,671 Income taxes payable 7,364 1,313 Total current liabilities 168,585 113,670 Long-term debt, excluding current installments 39,878 36,196 Other liabilities, excluding current installments 4,783 5,425 Deferred income taxes 19,163 19,163 Total liabilities 232,409 174,454 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 30,923,543 3,094 3,077 shares at March 31, 2013 and 30,766,730 shares at December 31, 2012 Additional paid-in capital 55,478 54,323 Accumulated other comprehensive loss (1,177) (1,762 ) Retained earnings 189,182 174,243 246,577 229,881 Less treasury stock, at cost, 2,310,634 shares at (4,804) (4,804 ) both March 31, 2013 and December 31, 2012 American Vanguard stockholders’ equity 241,773 225,077 Non-controlling interest 263 359 Total stockholders’ equity 242,036 225,436 $ 474,445 $ 399,890 Note: The balance sheet at December31, 2012 has been derived from the audited financial statements at that date. See notes to consolidated financial statements. AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) For The Three Months Ended March 31, 2013 and 2012 (Unaudited) Increase (decrease) in cash 2013 2012 Cash flows from operating activities: Net income $ 16,819 $ 8,734 Adjustments to reconcile net income to net cash used in operating activities: Depreciation and amortization of fixed and 3,699 3,469 intangible assets Amortization of other long term assets 836 682 Amortization of discounted liabilities 42 198 Stock-based compensation 688 422 Tax benefit from exercise of stock options (57 ) (43 ) Changes in assets and liabilities associated with operations: Increase in net receivables (70,908 ) (30,300 ) Increase in inventories (21,538 ) (3,599 ) Increase in prepaid expenses and other assets (7,027 ) (1,568 ) Increase in income tax receivable/payable, net 6,108 3,725 Increase in accounts payable 31,250 1,188 Decrease in deferred revenue (18,148 ) (7,571 ) Increase in other payables and accrued expenses 40,100 17,065 Net cash used in operating activities (18,136 ) (7,598 ) Cash flows from investing activities: Capital expenditures (4,396 ) (5,718 ) Investment (3,687 ) — Net cash used in investing activities (8,083 ) (5,718 ) Cash flows from financing activities: Net borrowings under line of credit agreement 6,200 — Payments on long-term debt (2,500 ) (2,000 ) Payments on other long-term liabilities (682 ) — Tax benefit from exercise of stock options 57 43 Decrease in other notes payable (6,154 ) (6,035 ) Proceeds from the issuance of common stock (sale of stock under ESPP and exercise of stock 427 417 option) Net cash used in financing activities (2,652 ) (7,575 ) Net decrease in cash (28,871 ) (20,891 ) Cash and cash equivalents at beginning of period 38,476 35,085 Effect of exchange rate changes on cash 390 538 Cash and cash equivalents as of March 31 $ 9,995 $ 14,732 Contact: American Vanguard Corporation William A. Kuser, Director of Investor Relations 949-260-1200 email@example.com or Investor Representative The Equity Group Inc. Lena Cati, 212-836-9611 Lcati@equityny.com www.theequitygroup.com
American Vanguard Reports First Quarter 2013 Results
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