American Vanguard Reports Second Quarter & Mid-Year 2014 Results

  American Vanguard Reports Second Quarter & Mid-Year 2014 Results     Performance Reflects Reduced Channel Restocking and Lower Manufacturing                                  Utilization  Business Wire  NEWPORT BEACH, Calif. -- July 31, 2014  American Vanguard Corporation (NYSE:AVD) announced financial results for the second quarter and six month period ended June 30, 2014.  Fiscal 2014 Second Quarter Financial Highlights – versus Fiscal 2013 Second Quarter:    *Net sales of $68.3 million, compared with $86.8 million   *Net income of $0.1 million, compared with $8.4 million   *Earnings per diluted share were $0.01, compared with $0.29  Fiscal 2014 First Half Financial Highlights – versus Fiscal 2013 First Half    *Net sales of $149.4 million, compared with $208.3 million   *Net income of $2.3 million, compared with $25.3 million   *Earnings per diluted share were $0.08, compared with $0.88  Note: Complete details are available in the financial schedules attached to this press release  Eric Wintemute, Chairman and CEO of American Vanguard, stated: “As we previously reported, surplus inventory of corn products in the agriculture distribution channel resulted in significantly lower re-stocking procurement from manufacturers this season. Additionally, as we indicated, reduced production of these products in our manufacturing facilities has resulted in increased unabsorbed fixed factory costs which have negatively impacted profitability for the quarter and year to date.”  Mr. Wintemute concluded: “We believe that channel inventories have been reduced significantly this spring and that more normal purchasing patterns are likely to resume for the 2015 season which should start later this year and into the pre-planting months of 2015. We are undertaking cost reduction programs to right-size our manufacturing function with the product demand that we are forecasting. We have trimmed our operating expenses and will remain disciplined in our capital expenditures. We look forward to providing additional color on business and financial conditions in our earnings call later today.”  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, July 31, 2014. 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  CONDENSED 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                              2014         2013           2014          2013 Net sales                    $ 68,313       $ 86,761       $ 149,408       $ 208,298 Cost of sales                 42,253       44,695       94,443        112,451  Gross profit                   26,060         42,066         54,965          95,847 Operating expenses            25,337       29,169       50,280        56,798   Operating income               723            12,897         4,685           39,049 Interest expense               857            701            1,488           1,248 Less interest                 (13    )      (31    )      (31     )      (225    ) capitalized (Loss) income before income taxes and               (121   )       12,227         3,228           38,026 loss on equity investment Income taxes                  (160   )      3,961        856           12,941   (benefit) expense Income before loss             39             8,266          2,372           25,085 on equity investment Deduct net loss from equity method                 (68    )      —            (396    )      —        investment Net (loss) income              (29    )       8,266          1,976           25,085 Add back net loss attributable to               174          120          328           216      non-controlling interest Net income attributable to               145          8,386        2,304         25,301   American Vanguard Corporation Change in fair value of interest rate               145            174            281             352 swaps Foreign currency translation                   92           (476   )      143           (69     ) adjustment Comprehensive income         $ 382         $ 8,084       $ 2,728        $ 25,584   Earnings per common          $ .01         $ .29         $ .08          $ .89      share—basic Earnings per common share—assuming               $ .01         $ .29         $ .08          $ .88      dilution Weighted average shares                        28,408       28,295       28,404        28,280   outstanding—basic Weighted average shares                        28,795       28,886       28,877        28,884   outstanding—assuming dilution    AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES  CONDENSED CONSOLIDATED BALANCE SHEETS  (In thousands, except share data)  (Unaudited)    ASSETS                                                     June 30,        Dec. 31,                                                                                                                 2014            2013 Current assets: Cash and cash equivalents                          $ 4,189         $ 6,680 Receivables: Trade, net of allowance for doubtful                 73,239          74,060 accounts of $414 and $392, respectively Other                                               2,738         892      Total receivables                                    75,977          74,952 Inventories                                          175,240         139,830 Prepaid expenses                                     14,049          11,435 Income taxes receivable                              10,230          10,088 Deferred income tax assets                          6,521         6,521    Total current assets                                 286,206         249,506 Property, plant and equipment, net                   51,621          52,468 Intangible assets, net of applicable                 103,865         107,007 amortization Other assets                                        37,750        38,462                                                      $ 479,442      $ 447,443   LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Current installments of long-term debt             $ 70            $ 69 Current installments of other liabilities            1,440           2,132 Accounts payable                                     23,900          40,702 Deferred revenue                                     1,512           3,788 Accrued program costs                                74,359          53,630 Accrued expenses and other payables                 5,996         10,178   Total current liabilities                            107,277         110,499 Long-term debt, excluding current                    86,091          51,676 installments Other liabilities, excluding current                 3,981           4,143 installments Deferred income tax liabilities                     23,002        23,330   Total liabilities                                   220,351       189,648  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                                                      3,153           3,109 31,528,400 shares at June 30, 2014 and 31,092,782 shares at December 31, 2013 Additional paid-in capital                           63,380          60,160 Accumulated other comprehensive loss                 (624    )       (1,048  ) Retained earnings                                   201,937       202,470                                                       267,846         264,691 Less treasury stock, at cost, 2,450,634 shares at June 30, 2014 and 2,380,634 shares at                                           (8,269  )      (6,738  )  December 31, 2013 American Vanguard Corporation                        259,577         257,953 stockholders’ equity Non-controlling interest                            (486    )      (158    ) Total stockholders’ equity                          259,091       257,795                                                                                                                         $ 479,442      $ 447,443     AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES  CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  (In thousands)  For The Six Months Ended June30, 2014 and 2013  (Unaudited)  Increase (decrease) in cash                    2014          2013 Cash flows from operating activities: Net income                                         $ 1,976         $ 25,085 Adjustments to reconcile net income to net cash (used in) provided by operating activities: Depreciation and amortization of fixed and           7,996           7,461 intangible assets Amortization of other long term assets               3,027           1,802 Amortization of discounted liabilities               175             86 Stock-based compensation                             1,806           1,747 Tax benefit from exercise of stock options           (262    )       (57     ) Loss from equity method investment                   396             — Gain on dilution of equity method                    (256    )       — investment Changes in assets and liabilities associated with operations: (Increase) decrease in net receivables               (1,025  )       8,513 Increase in inventories                              (35,410 )       (39,199 ) Increase in prepaid expenses and other               (5,069  )       (9,837  ) assets Decrease (increase) in income tax                    120             (1,404  ) receivable Decrease in accounts payable                         (16,521 )       (8,532  ) Decrease in deferred revenue                         (2,276  )       (20,149 ) Increase in other payables and accrued              16,264        54,529   expenses Net cash (used in) provided by operating            (29,059 )      20,045   activities Cash flows from investing activities: Capital expenditures                                 (3,954  )       (8,360  ) Investment                                          —             (3,687  ) Net cash used in investing activities               (3,954  )      (12,047 ) Cash flows from financing activities: Net borrowings under line of credit                  34,450          40,750 agreement Payments on long-term debt                           —               (46,000 ) Payments on other long-term liabilities              (1,109  )       (1,238  ) Tax benefit from exercise of stock options           262             57 Decrease in other notes payable                      —               (6,154  ) Repurchases of common stock                          (1,531  )       — Payment of cash dividends                            (2,836  )       (1,976  ) Proceeds from the issuance of common stock (sale of stock under ESPP and exercise of stock                                               1,196         527       options) Net cash provided by (used in) financing            30,432        (14,034 ) activities Net decrease in cash and cash equivalents            (2,581  )       (6,036  ) Cash and cash equivalents at beginning of            6,680           38,476 period Effect of exchange rate changes on cash             90            (26     ) Cash and cash equivalents as of the end of         $ 4,189        $ 32,414   the period   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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