American Vanguard Reports First Quarter 2013 Results

  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
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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