American Vanguard Reports Second Quarter & Mid-Year 2013 Results Strong First Half Performance - Despite Weather Dampened Spring Quarter Business Wire NEWPORT BEACH, Calif. -- August 5, 2013 American Vanguard Corporation (NYSE:AVD), today announced financial results for the second quarter and six month period ended June 30, 2013. Fiscal 2013 First Half Financial Highlights – versus Fiscal 2012 First Half • Net sales improved from $172.1 million to $208.3 million, an increase of 21% • Net income improved from $17.5 million to $25.3 million, an increase of 45% • Earnings per diluted share improved from $0.61 to $0.88, an increase of 44% Fiscal 2013 Second Quarter Financial Highlights – versus Fiscal 2012 Second Quarter: • Net sales improved from $84.8 million to $86.8 million, an increase of 2% • Net income declined slightly from $8.7 million to $8.4 million, a decrease of 4% • Earnings per diluted share declined from $0.30 to $0.29, a decrease of 3% Note: Further 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 strong first half performance despite unfavorable U.S. weather conditions throughout the Midwest and South. During the 2013 corn planting season, we continued to see strong demand for our corn soil insecticides and post emergent herbicide. While adverse weather conditions kept us from achieving stronger sales during the second quarter, nevertheless we recorded slightly higher revenues overall as compared to second quarter of 2012, which had set the previous Company record for second quarter sales. As we previously reported, during the second quarter, persistent rainfall delayed and compressed normal planting practices, causing some growers to make fewer crop protection applications at the time of planting or to switch from corn and cotton to plant soybeans, which require a shorter growing period. Strong sales of our corn products were offset by a drop in sales of both our cotton and peanut products, resulting primarily from a decline in planted acres of those crops. Further, we did see more conservative purchasing patterns towards the end of the second quarter, as distribution reacted to increasing inventory levels.” Mr. Wintemute continued: “Despite this late spring slowdown in grower demand, we continued to demonstrate strong gross margin performance, achieving 46% in the first half of 2013 compared to 44% in 2012. Our second quarter performance was better with gross margin of 48% as compared to 45% last year. During the second quarter, we extended our agreement with Monsanto to co-market our Impact® herbicide with their market leading Roundup brands. We continued to carefully manage our balance sheet including putting in place an expanded credit facility with our lender group, providing the Company with the capacity to pursue its domestic and international strategy. In keeping with our dedication to strategic growth, we have strengthened our organization to exploit promising opportunities in product development, international expansion and non-agricultural pest control markets.” Mr. Wintemute concluded: “In the second half of 2013, we continue to see solid demand for our diversified product lines across the many crops and geographies that they serve. Factors affecting both the third and fourth quarters performance include the successful promotion and sales of our market leading post-harvest Metam soil fumigants, the normal late-summer pest pressure to support our Bidrin® foliar cotton insecticide, favorable autumn weather conditions to support of our Folex® cotton harvest defoliant, and wet weather in regions where our Dibrom® mosquito adulticide is used. At the end of the fourth quarter we will look for early 2014 season demand for both our granular corn soil insecticides and our Impact herbicide, which are both typically placed into the distribution chain at the end of the calendar year in readiness for the new season. Even with some working capital controls influencing distribution channel purchasing patterns, we believe, as do our customers, that our yield enhancing products are an essential part of integrated pest management, and that American Vanguard’s important role in modern agriculture will continue to serve as the foundation of our enduring business model.” Conference Call Eric Wintemute, Chairman & CEO and David Johnson, VP & CFO, will conduct a conference call focusing on the financial results at 4:30 pm ET / 1:30 pm PT on Monday, August 5, 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 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 six months ended June 30 ended June 30 2013 2012 2013 2012 Net sales $ 86,761 $ 84,837 $ 208,298 $ 172,092 Cost of sales 44,695 46,491 112,451 96,368 Gross profit 42,066 38,346 95,847 75,724 Operating expenses 29,169 24,104 56,798 47,080 Operating income 12,897 14,242 39,049 28,644 Interest expense 701 721 1,248 1,456 Interest capitalized (31 ) (112 ) (225 ) (148 ) Income before provision for income 12,227 13,633 38,026 27,336 taxes Income tax expense 3,961 4,889 12,941 9,858 Net income 8,266 8,744 25,085 17,478 Net loss attributable to 120 — 216 — non-controlling interest Net income attributable to 8,386 8,744 25,301 17,478 American Vanguard Change in fair value of interest rate 174 24 352 46 swap Foreign currency translation (476 ) (420 ) (69 ) 122 adjustment Comprehensive income $ 8,084 $ 8,348 $ 25,584 $ 17,646 Earnings per common $ .29 $ .31 $ .89 $ .63 share—basic Earnings per common share—assuming $ .29 $ .30 $ .88 $ .61 dilution Weighted average shares 28,295 27,858 28,280 27,740 outstanding—basic Weighted average shares 28,886 28,737 28,884 28,544 outstanding—assuming dilution AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands, except per share data) June, 30, Dec. 31, 2013 2012 ASSETS (Unaudited) (Note) Current assets: Cash $ 32,414 $ 38,476 Receivables: Trade, net of allowance for doubtful accounts 67,376 76,073 of $557 and $623, respectively Income taxes receivable 148 — Other 1,414 1,230 68,938 77,303 Inventories 127,150 87,951 Prepaid expenses 13,411 13,710 Deferred income tax assets 4,877 4,877 Total current assets 246,790 222,317 Property, plant and equipment, net 49,828 45,701 Intangible assets 110,247 113,521 Other assets 30,372 18,351 $ 437,237 $ 399,890 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Current installments of long-term debt $ 70 $ 16,247 Current installments of other liabilities 1,524 1,839 Accounts payable 23,953 32,838 Deferred revenue 278 20,427 Accrued program costs 88,508 32,335 Accrued expenses and other payables 8,793 8,671 Income taxes payable — 1,313 Total current liabilities 123,126 113,670 Long-term debt, excluding current installments 40,911 36,196 Other liabilities, excluding current 4,291 5,425 installments Deferred income taxes 19,163 19,163 Total liabilities 187,491 174,454 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 30,972,048 shares at June 30, 2013 and 3,099 3,077 30,766,730 shares at December 31, 2012 Additional paid-in capital 56,632 54,323 Accumulated other comprehensive loss (1,479 ) (1,762 ) Retained earnings 196,155 174,243 254,407 229,881 Less treasury stock, at cost, 2,310,634 shares (4,804 ) (4,804 ) at both June 30, 2013 and December 31, 2012 American Vanguard stockholders’ equity 249,603 225,077 Non-controlling interest 143 359 Total stockholders’ equity 249,746 225,436 $ 437,237 $ 399,890 AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) For The Six Months Ended June 30, 2013 and 2012 (Unaudited) Increase (decrease) in cash 2013 2012 Cash flows from operating activities: Net income $ 25,085 $ 17,478 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization of fixed and 7,461 7,046 intangible assets Amortization of other long term assets 1,802 1,574 Amortization of discounted liabilities 86 396 Stock-based compensation 1,747 1,031 Tax benefit from exercise of stock options (57 ) (160 ) Changes in assets and liabilities associated with operations: Decrease (increase) in net receivables 8,513 (3,862 ) Increase in inventories (39,199 ) (8,854 ) Increase in prepaid expenses and other assets (9,837 ) (2,555 ) (Decrease) increase in income tax (1,404 ) 393 receivable/payable, net (Decrease) increase in accounts payable (8,532 ) 668 Decrease in deferred revenue (20,149 ) (7,370 ) Increase in other payables and accrued 54,529 30,883 expenses Net cash provided by operating activities 20,045 36,668 Cash flows from investing activities: Capital expenditures (8,360 ) (13,061 ) Investment (3,687 ) — Net cash used in investing activities (12,047 ) (13,061 ) Cash flows from financing activities: Net borrowings under line of credit agreement 40,750 — Payments on long-term debt (46,000 ) (4,000 ) Payments on other long-term liabilities (1,238 ) — Tax benefit from exercise of stock options 57 160 Decrease in other notes payable (6,154 ) (6,827 ) Payment of cash dividends (1,976 ) (1,380 ) Proceeds from the issuance of common stock (sale of stock under ESPP and exercise of 527 1,285 stock option) Net cash used in by financing activities (14,034 ) (10,762 ) Net (decrease) increase in cash (6,036 ) 12,845 Cash and cash equivalents at beginning of year 38,476 35,085 Effect of exchange rate changes on cash (26 ) 118 Cash and cash equivalents as of June 30 $ 32,414 $ 48,048 Contact: Company Contact: American Vanguard Corporation William A. Kuser, 949-260-1200 Director of Investor Relations email@example.com or Investor Representative The Equity Group Inc. Lena Cati, 212-836-9611 Lcati@equityny.com www.theequitygroup.com
American Vanguard Reports Second Quarter & Mid-Year 2013 Results
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