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American Vanguard Reports Third Quarter & Nine-Month 2013 Results



  American Vanguard Reports Third Quarter & Nine-Month 2013 Results

         Continued Strong Demand Fuels Excellent Business Performance

Business Wire

NEWPORT BEACH, Calif. -- October 31, 2013

American Vanguard Corporation (NYSE:AVD) today announced financial results for
the third quarter and nine-month period ended September 30, 2013.

Fiscal 2013 Nine Month Financial Highlights – versus Fiscal 2012 Nine Month
Results

  * Net sales improved from $261.9 million to $305.5 million, an increase of
    17%
  * Net income improved from $25.6 million to $34.2 million, an increase of
    34%
  * Earnings per diluted share improved from $0.89 to $1.18, an increase of
    33%

Fiscal 2013 Third Quarter Financial Highlights – versus Fiscal 2012 Third
Quarter Results

  * Net sales improved from $89.8 million to $97.2 million, an increase of 8%
  * Net income improved from $8.1 million to $8.9 million, an increase of 10%
  * Earnings per diluted share improved from $0.28 to $0.31, an increase of
    11%

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 record third quarter and year-to-date revenue and earnings growth.
Our quarterly results benefited from strong sales of Bidrin®, Thimet® and our
Force® corn soil insecticide in Smartbox. In the face of challenging market
dynamics, we have reported our best ever Company performance. Looking forward,
as the industry ramps up for the 2014 planting season and prepares to cope
with the reported intensification of weed and insect pressure, we are ready to
supply growers with the best selection of proven crop protection tools
available.”

Mr. Wintemute continued: “We continue to achieve strong gross margin levels,
posting 46% in the first nine months of 2013 and 44% in the third quarter. Our
2013 sales have been enhanced by the extended agreement with Monsanto to
co-market our Impact® herbicide with their market leading Roundup glyphosate
brands. Demand for our wide range of granular soil insecticides continues to
grow, as expanding insect resistance encourages the use of our products in
conjunction with genetically modified trait seed. Further, we continue to
manage our balance sheet for long-term growth and have strengthened our
organization to capitalize on promising opportunities in product development,
international expansion and non-agricultural pest control markets.”

Mr. Wintemute concluded: “Over the next several quarters, we expect to see
strong demand for our diversified product lines across the many crops and
geographies that we serve. Furthermore, for the 2014 planting season, we are
planning to introduce a liquid, fertilizer-ready corn soil insecticide, which
will complement our industry-leading portfolio of granular SmartBox products.
AMVAC’s proven, yield-enhancing products are an essential part of integrated
pest management, and solidify American Vanguard’s important role in the future
of modern agriculture worldwide.”

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 Thursday, October 31, 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 nine months
                           ended September 30        ended September 30
                           2013         2012         2013          2012
Net sales                  $ 97,201     $ 89,836     $ 305,499     $ 261,928
Cost of sales                54,042       50,211       166,493       146,579  
Gross profit                 43,159       39,625       139,006       115,349
Operating expenses           28,025       26,460       84,823        73,540   
Operating income             15,134       13,165       54,183        41,809
Interest expense             464          701          1,712         2,157
Interest capitalized         (20    )     (165   )     (245    )     (313    )
Income before provision      14,690       12,629       52,716        39,965
for income tax
Income tax expense           5,559        4,553        18,500        14,411   
Income before loss on        9,131        8,076        34,216        25,554
equity investment
Loss from equity method      386          —            386           —        
investment
Net income                   8,745        8,076        33,830        25,554
Net loss attributable to     125          —            341           —        
non-controlling interest
Net income attributable      8,870        8,076        34,171        25,554
to American Vanguard
Change in fair value of      133          41           485           87
interest rate swaps
Foreign currency             (126   )     306          (195    )     428      
translation adjustment
Comprehensive income       $ 8,877      $ 8,423      $ 34,461      $ 26,069   
Earnings per common        $ 0.31       $ 0.29       $ 1.21        $ 0.92     
share—basic
Earnings per common        $ 0.31       $ 0.28       $ 1.18        $ 0.89     
share—assuming dilution
Weighted average shares      28,322       27,970       28,295        27,818   
outstanding—basic
Weighted average shares
outstanding—assuming         28,889       28,878       28,890        28,673   
dilution
 

AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
 
ASSETS                                                            
                                                     Sept. 30,     Dec. 31,
                                                     2013          2012
                                                     (Unaudited)   (Note)
Current assets:
Cash                                                 $ 12,325      $ 38,476
Receivables:
Trade, net of allowance for doubtful accounts of       109,318       76,073
$543 and $623, respectively
Other                                                  2,489         1,230    
                                                       111,807       77,303   
Inventories                                            127,172       87,951
Prepaid expenses and other short-term assets           12,381        13,710
Deferred income tax assets                             4,877         4,877    
Total current assets                                   268,562       222,317
Property, plant and equipment, net                     51,642        45,701
Intangible assets, net of applicable amortization      108,641       113,521
Other assets                                           34,569        18,351   
                                                     $ 463,414     $ 399,890  
                                                                    
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current installments of long-term debt               $ 71          $ 16,247
Current installments of other liabilities              1,635         1,839
Accounts payable                                       32,764        32,838
Deferred revenue                                       393           20,427
Accrued program costs                                  95,722        32,335
Accrued expenses and other payables                    11,271        8,671
Income taxes payable                                   736           1,313    
Total current liabilities                              142,592       113,670
Long-term debt, excluding current installments         38,894        36,196
Other liabilities, excluding current installments      3,932         5,425
Deferred income taxes                                  19,163        19,163   
Total liabilities                                      204,581       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 30,997,686 shares at         3,100         3,077
September 30, 2013 and 30,766,730 shares at
December 31, 2012
Additional paid-in capital                             58,181        54,323
Accumulated other comprehensive loss                   (1,472  )     (1,762  )
Retained earnings                                      203,610       174,243  
                                                       263,419       229,881
Less treasury stock, at cost, 2,310,634 shares at      (4,804  )     (4,804  )
September 30, 2013 and at December 31, 2012
American Vanguard stockholders’ equity                 258,615       225,077
Non-controlling interest                               218           359      
Total stockholders’ equity                             258,833       225,436  
                                                     $ 463,414     $ 399,890  
 
Note: The balance sheet at December 31, 2012 has been derived from the audited
financial statements at that date.
 

AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
For The Nine Months Ended September 30, 2013 and 2012
(Unaudited)
 
Increase (decrease) in cash                          2013          2012
Cash flows from operating activities:
Net income                                           $ 33,830      $ 25,554
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization of fixed and             11,183        9,915
intangible assets
Amortization of other long term assets                 2,976         2,061
Amortization of discounted liabilities                 130           592
Stock-based compensation                               2,895         1,856
Tax benefit from exercise of stock options             (57     )     (493    )
Loss from equity method investment                     386           —
Changes in assets and liabilities associated with
operations:
Increase in net receivables                            (34,304 )     (36,515 )
Increase in inventories                                (39,221 )     (21,747 )
Increase in prepaid expenses and other assets          (14,564 )     (8,862  )
(Increase) decrease in income tax                      (520    )     644
receivable/payable, net
Increase in accounts payable                           412           8,743
Decrease in deferred revenue                           (20,034 )     (6,270  )
Increase in other liabilities                          64,088        37,623   
Net cash provided by operating activities              7,200         13,101   
                                                                    
Cash flows from investing activities:
Capital expenditures                                   (12,290 )     (14,908 )
Investment                                             (3,687  )     —        
Net cash used in investing activities                  (15,977 )     (14,908 )
                                                                    
Cash flows from financing activities:
Net borrowings under line of credit agreement          38,750        —
Payments on long-term debt                             (46,000 )     (6,000  )
Payments on other long-term liabilities                (1,415  )     —
Tax benefit from exercise of stock options             57            493
Decrease in other notes payable                        (6,154  )     (6,460  )
Payment of cash dividends                              (3,390  )     (1,380  )
Proceeds from the issuance of common stock (sale       929           3,260    
of stock under ESPP and exercise of stock options)
Net cash used in financing activities                  (17,223 )     (10,087 )
                                                                    
Net decrease in cash                                   (26,000 )     (11,894 )
Cash and cash equivalents at beginning of year         38,476        35,085
Effect of exchange rate changes on cash                (151    )     433      
Cash and cash equivalents as of September 30         $ 12,325      $ 23,624   

Contact:

Company:
American Vanguard Corporation
William A. Kuser, 949-260-1200
Director of Investor Relations
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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