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| 8-K - FORM 8-K - AMERICAN VANGUARD CORP | d8k.htm |
Exhibit 99.1
FOR IMMEDIATE RELEASE
AMERICAN VANGUARD REPORTS SECOND QUARTER & MID-YEAR 2011 RESULTS
Quarterly & First Half Performance Reflects Strong Market Demand and Successful Strategy Execution
Newport Beach, CA – August 4, 2011 – American Vanguard Corporation (NYSE:AVD), today announced financial results for the second quarter and six month period ended June 30, 2011.
Fiscal 2011 Second Quarter Financial Highlights – versus Fiscal 2010 Second Quarter:
| • | Net sales improved from $52.2m to $80.4m, an increase of 54% |
| • | Net income for the period improved from $1.6m to $6.0 million, an increase of 265% |
| • | Earnings per diluted share were $0.22 versus $0.06 in the prior year quarter |
Fiscal 2011 First Half Financial Highlights – versus Fiscal 2010 First Half
| • | Net sales improved from $98.9m to $147.8m, an increased of 49% |
| • | Net income improved from $3.5m to $11.0 million, an increase of 217% |
| • | Earnings per diluted share were $0.40 versus $0.13 in the prior year’s first half |
Note: Complete 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 performance for the second quarter and the first half of 2011 that reflects the successful execution of our corporate strategy for product portfolio extension, geographic expansion and consistent financial discipline. Strong crop commodity prices have stimulated U.S. agricultural demand in corn, cotton, and a wide variety of other crops, fueling increased purchases of our well-positioned productivity and yield enhancing products. Additionally, we have expanded our international sales penetration driven by the Mocap® and Nemacur® product acquisitions that we completed in December 2010.”
Mr. Wintemute continued: “In keeping with our promise to strengthen and maintain a healthy balance sheet, we have continued to control our inventory levels and carefully maintain our receivable collections performance. In fact, our management of working capital and continuing cash generation provides us with the opportunity to use our positive cash balance for possible debt reduction, dividend payments, product acquisitions or other corporate purposes in the months ahead. Also, during the quarter we were pleased to announce a significant agreement with Monsanto for the co-marketing of our post-emergent corn herbicide Impact® in conjunction with their Roundup® glyphosate brands. The weed management benefits of this combination of two market leading brands will be promoted by both companies and should expand the sales of Impact over the next several years.”
Mr. Wintemute concluded: “We have maintained focus on our gross profit margins by consistently emphasizing profitability in our sales and marketing efforts resulting in an improvement from 37% to 40%. This year our overall manufacturing operations have experienced higher utilization rates resulting in improved coverage of facility fixed costs. We continue to seek the acquisition of appropriately-priced, branded products, similar to our 2010 purchases, as we expand our product offering in key crops. In our product development program, we expect our new potato sprout inhibitor SmartBlock® to become commercial during the first half of 2012. By adding high-value/high-margin products to our portfolio, focusing our sales and marketing priorities, achieving greater manufacturing efficiencies and diligently maintaining financial discipline, we expect to continue profitably expanding our global business.”
Conference Call
Eric Wintemute, Chairman & CEO and David Johnson, VP & CFO, will conduct a conference call focusing on the financial results at 12:00 pm EDT / 9:00 am PDT on Thursday, August 4, 2011. 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. 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.
| CONTACT: | -OR- | AVD’S INVESTOR RELATIONS FIRM | ||||||
| American Vanguard Corporation | The Equity Group Inc. | |||||||
| William A. Kuser, Director of Investor Relations | www.theequitygroup.com | |||||||
| (949) 260-1200 | Lena Cati | |||||||
| williamk@amvac-chemical.com | Lcati@equityny.com | |||||||
| (212) 836-9611 |
AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Number in thousands except per share data)
(Unaudited)
| For the three months ended June 30 |
For the six months ended June 30 |
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| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Net sales |
$ | 80,374 | $ | 52,172 | $ | 147,770 | $ | 98,884 | ||||||||
| Cost of sales |
48,381 | 32,939 | 87,504 | 60,727 | ||||||||||||
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| Gross profit |
31,993 | 19,233 | 60,266 | 38,157 | ||||||||||||
| Operating expenses |
21,310 | 15,683 | 40,396 | 30,712 | ||||||||||||
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| Operating income |
10,683 | 3,550 | 19,870 | 7,445 | ||||||||||||
| Interest expense |
978 | 906 | 1,785 | 1,806 | ||||||||||||
| Interest capitalized |
(16 | ) | (39 | ) | (74 | ) | (49 | ) | ||||||||
| Extinguishment of debt |
— | — | 546 | — | ||||||||||||
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| Income before income tax |
9,721 | 2,683 | 17,613 | 5,688 | ||||||||||||
| Income tax expense |
3,714 | 1,040 | 6,594 | 2,218 | ||||||||||||
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| Net income |
$ | 6,007 | $ | 1,643 | $ | 11,019 | $ | 3,470 | ||||||||
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| Earnings per common share—basic |
$ | .22 | $ | .06 | $ | .40 | $ | .13 | ||||||||
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| Earnings per common share—assuming dilution |
$ | .22 | $ | .06 | $ | .40 | $ | .13 | ||||||||
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| Weighted average shares outstanding—basic |
27,548 | 27,343 | 27,538 | 27,344 | ||||||||||||
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| Weighted average shares outstanding—assuming dilution |
27,838 | 27,650 | 27,813 | 27,633 | ||||||||||||
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AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Number in thousands, except per share data)
| June. 30, 2011 |
Dec. 31, 2010 |
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| (Unaudited) | (Note) | |||||||
| ASSETS | ||||||||
| Current assets: |
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| Cash |
$ | 9,958 | $ | 1,158 | ||||
| Receivables: |
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| Trade, net of allowance for doubtful accounts of $460 and $447, respectively |
74,953 | 33,833 | ||||||
| Other |
162 | 263 | ||||||
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| 75,115 | 34,096 | |||||||
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| Inventories |
80,620 | 74,054 | ||||||
| Prepaid expenses |
3,289 | 2,591 | ||||||
| Income taxes receivable |
— | 6,715 | ||||||
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| Total current assets |
168,982 | 118,614 | ||||||
| Property, plant and equipment, net |
39,170 | 40,541 | ||||||
| Intangible assets |
119,104 | 115,249 | ||||||
| Other assets |
4,934 | 5,775 | ||||||
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| $ | 332,190 | $ | 280,179 | |||||
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| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: |
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| Current installments of long-term debt |
$ | 14,827 | $ | 8,429 | ||||
| Current installments of other liabilities |
2,073 | — | ||||||
| Accounts payable |
23,996 | 13,961 | ||||||
| Deferred revenue |
94 | 5,568 | ||||||
| Accrued program costs |
34,519 | 16,976 | ||||||
| Accrued expenses and other payables |
5,354 | 4,634 | ||||||
| Income taxes payable |
167 | — | ||||||
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| Total current liabilities |
81,030 | 49,568 | ||||||
| Long-term debt, excluding current installments |
56,213 | 53,710 | ||||||
| Other liabilities, excluding current installments |
6,787 | 3 | ||||||
| Deferred income taxes |
10,461 | 10,461 | ||||||
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| Total liabilities |
154,491 | 113,742 | ||||||
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| Commitments and contingent liabilities |
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| Stockholders’ equity: |
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| 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 29,827,874 shares at June 30, 2011 and 29,735,928 shares at December 31, 2010 |
2,983 | 2,974 | ||||||
| Additional paid-in capital |
44,975 | 43,403 | ||||||
| Accumulated other comprehensive loss |
(960 | ) | (448 | ) | ||||
| Retained earnings |
133,854 | 123,661 | ||||||
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| 180,852 | 169,590 | |||||||
| Less treasury stock, at cost, 2,260,996 shares at June 30, 2011 and at December 31, 2010 |
(3,153 | ) | (3,153 | ) | ||||
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| Total stockholders’ equity |
177,699 | 166,437 | ||||||
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| $ | 332,190 | $ | 280,179 | |||||
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Note: The balance sheet at December 31, 2010 has been derived from the audited financial statements at that date.
AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Numbers in thousands, except share data)
For The Six Months Ended June 30, 2011 and 2010
(Unaudited)
| Increase (decrease) in cash |
2011 | 2010 | ||||||
| Cash flows from operating activities: |
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| Net income |
$ | 11,019 | $ | 3,470 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: |
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| Depreciation and amortization of fixed and intangible assets |
6,733 | 5,444 | ||||||
| Amortization of other long term assets |
1,934 | 1,566 | ||||||
| Amortization of discounted liabilities |
988 | — | ||||||
| Stock-based compensation |
1,031 | 504 | ||||||
| Changes in assets and liabilities associated with operations: |
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| Increase in net receivables |
(41,019 | ) | (2,540 | ) | ||||
| Increase in inventories |
(6,566 | ) | (2,027 | ) | ||||
| Increase in prepaid expenses and other assets |
(1,791 | ) | (785 | ) | ||||
| Decrease in income tax receivable/payable, net |
8,133 | — | ||||||
| Increase in accounts payable |
9,089 | 4,581 | ||||||
| Decrease in deferred revenue |
(5,474 | ) | — | |||||
| Increase (decrease) in other liabilities |
18,220 | (1,786 | ) | |||||
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| Net cash provided by operating activities |
2,297 | 8,427 | ||||||
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| Cash flows from investing activities: |
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| Capital expenditures |
(2,322 | ) | (4,613 | ) | ||||
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| Net cash used in investing activities |
(2,322 | ) | (4,613 | ) | ||||
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| Cash flows from financing activities: |
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| Net (repayments) borrowings under line of credit agreement |
(7,300 | ) | 600 | |||||
| Principal payments on long-term debt |
(4,004 | ) | (4,053 | ) | ||||
| Borrowings on long-term debt |
20,063 | — | ||||||
| Proceeds from the issuance of common stock (sale of stock under ESPP and exercise of stock option) |
550 | 277 | ||||||
| Payment of cash dividends |
(826 | ) | (271 | ) | ||||
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| Net cash provided by (used in) financing activities |
8,483 | (3,447 | ) | |||||
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| Net increase in cash |
8,458 | 367 | ||||||
| Cash and cash equivalents at beginning of year |
1,158 | 383 | ||||||
| Effect of exchange rate changes on cash |
342 | 179 | ||||||
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| Cash and cash equivalents as of June 30 |
$ | 9,958 | $ | 929 | ||||
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