Attached files
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| 8-K - FORM 8-K - AMERICAN VANGUARD CORP | d253795d8k.htm |
Exhibit 99.1
FOR IMMEDIATE RELEASE
AMERICAN VANGUARD REPORTS THIRD QUARTER & 9-MONTH 2011 RESULTS
Strong Demand for Insecticides Drives Continued Business Growth
Newport Beach, CA – November 4, 2011 – American Vanguard Corporation (NYSE:AVD), today announced financial results for the third quarter and nine month period ended September 30, 2011.
Fiscal 2011 Third Quarter Financial Highlights – versus Fiscal 2010 Third Quarter Performance
| • | Net sales improved from $68.3 million to $73.8 million, an increase of 8% |
| • | Net income improved from $3.6 million to $4.6 million, an increase of 28% |
| • | Earnings per diluted share increased from $0.13 to $0.16 |
Fiscal 2011 Nine Month Financial Highlights – versus Fiscal 2010 Nine Month Performance
| • | Net sales improved from $167.1 million to $221.6 million, an increase of 33% |
| • | Net income improved from $7.1 million to $15.6 million, an increase of 120% |
| • | Earnings per diluted increased from $0.26 to $0.56 |
Note: 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 another strong performance for the third quarter that reflects the excellent positioning of our product portfolio, especially our broad range of insecticides. In granular soil insecticides, we continue to expand our international sales penetration with Mocap® and Nemacur®, and we have successfully captured additional business with Thimet® in peanuts and sugarcane replacing a competing product that has been withdrawn from the U.S. market.”
Mr. Wintemute continued: “Recently, we have been seeing considerable interest in our many products for the domestic corn market. In June we announced a significant agreement with Monsanto for the co-marketing of our post-emergent corn herbicide Impact® in conjunction with their Roundup® Ready glyphosate program. We are also seeing corn growers show greater interest in the yield enhancement benefits of corn soil insecticides for protection of their crops in areas where pest pressure is not adequately handled by the use of genetic defenses alone. As the supplier with the most complete line of soil insecticide products as well as the closed delivery systems best equipped to dispense them, we are poised to satisfy this growing demand.”
Mr. Wintemute concluded: “Our focus on profitability can be seen in the improvement of our third quarter gross profit margins, from 37% in 2010 to 42% in 2011. Overall our manufacturing operations have experienced higher utilization rates this year resulting in improved coverage of facility fixed costs. We continue to explore the acquisition of appropriately-priced, branded products and our new potato sprout inhibitor SmartBlock® is
scheduled to be commercialized during the next 90 days. We are gearing up to take full advantage of the abundant opportunities emerging in domestic corn as well as in other crop markets that favor our extensive offering of granular soil insecticides. Despite the need to overcome some supply constraints in Mocap, and some regulatory constraints with our PCNB fungicide, we are confident that American Vanguard will finish 2011 with a strong financial performance.”
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 Friday, November 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 this release or 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: | 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 (212) 836-9611 | |
| williamk@amvac-chemical.com | Lcati@equityny.com |
AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
| For the three months ended September 30 |
For the nine months ended September 30 |
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| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Net sales |
$ | 73,840 | $ | 68,256 | $ | 221,610 | $ | 167,140 | ||||||||
| Cost of sales |
43,089 | 42,880 | 130,593 | 103,607 | ||||||||||||
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| Gross profit |
30,751 | 25,376 | 91,017 | 63,533 | ||||||||||||
| Operating expenses |
22,583 | 18,865 | 62,979 | 49,577 | ||||||||||||
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| Operating income |
8,168 | 6,511 | 28,038 | 13,956 | ||||||||||||
| Interest expense |
899 | 877 | 2,684 | 2,683 | ||||||||||||
| Interest capitalized |
(18 | ) | (49 | ) | (92 | ) | (98 | ) | ||||||||
| Extinguishment of debt |
— | — | 546 | — | ||||||||||||
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| Income before income tax |
7,287 | 5,683 | 24,900 | 11,371 | ||||||||||||
| Income tax expense |
2,669 | 2,072 | 9,263 | 4,290 | ||||||||||||
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| Net income |
$ | 4,618 | $ | 3,611 | $ | 15,637 | $ | 7,081 | ||||||||
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| Earnings per common share—basic |
$ | .17 | $ | .13 | $ | .57 | $ | .26 | ||||||||
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| Earnings per common share—assuming dilution |
$ | .16 | $ | .13 | $ | .56 | $ | .26 | ||||||||
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| Weighted average shares outstanding—basic |
27,575 | 27,398 | 27,551 | 27,362 | ||||||||||||
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| Weighted average shares outstanding—assuming dilution |
27,993 | 27,663 | 27,842 | 27,643 | ||||||||||||
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AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
| Sep 30, 2011 |
Dec. 31, 2010 |
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| (Unaudited) | (Note) | |||||||
| ASSETS | ||||||||
| Current assets: |
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| Cash |
$ | 3,832 | $ | 1,158 | ||||
| Receivables: |
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| Trade, net of allowance for doubtful accounts of $423 and $475, respectively |
96,785 | 33,833 | ||||||
| Other |
206 | 263 | ||||||
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| 96,991 | 34,096 | |||||||
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| Inventories |
80,819 | 74,054 | ||||||
| Prepaid expenses |
2,668 | 2,591 | ||||||
| Income taxes receivable |
— | 6,715 | ||||||
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| Total current assets |
184,310 | 118,614 | ||||||
| Property, plant and equipment, net |
39,378 | 40,541 | ||||||
| Intangible assets |
117,407 | 115,249 | ||||||
| Other assets |
4,565 | 5,775 | ||||||
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| $ | 345,660 | $ | 280,179 | |||||
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| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: |
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| Current installments of long-term debt |
$ | 14,533 | $ | 8,429 | ||||
| Current installments of other liabilities |
1,705 | — | ||||||
| Accounts payable |
23,451 | 13,961 | ||||||
| Deferred revenue |
11 | 5,568 | ||||||
| Accrued program costs |
43,822 | 16,976 | ||||||
| Accrued expenses and other payables |
7,934 | 4,634 | ||||||
| Income taxes payable |
2,431 | — | ||||||
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| Total current liabilities |
93,887 | 49,568 | ||||||
| Long-term debt, excluding current installments |
53,906 | 53,710 | ||||||
| Other liabilities, excluding current installments |
7,578 | 3 | ||||||
| Deferred income taxes |
10,461 | 10,461 | ||||||
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| Total liabilities |
165,832 | 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 29,841,156 shares at September 30, 2011 and 29,735,928 shares at December 31, 2010 |
2,984 | 2,974 | ||||||
| Additional paid-in capital |
45,453 | 43,403 | ||||||
| Accumulated other comprehensive loss |
(2,549 | ) | (448 | ) | ||||
| Retained earnings |
137,093 | 123,661 | ||||||
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| 182,981 | 169,590 | |||||||
| Less treasury stock, at cost, 2,260,996 shares at September 30, 2011 and at December 31, 2010 |
(3,153 | ) | (3,153 | ) | ||||
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| Total stockholders’ equity |
179,828 | 166,437 | ||||||
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| $ | 345,660 | $ | 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
(In thousands)
For The Nine Months Ended September 30, 2011 and 2010
(Unaudited)
| Increase (decrease) in cash |
2011 | 2010 | ||||||
| Cash flows from operating activities: |
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| Net income |
$ | 15,637 | $ | 7,081 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: |
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| Depreciation and amortization of fixed and intangible assets |
10,366 | 8,208 | ||||||
| Amortization of other long term assets |
2,018 | 2,418 | ||||||
| Amortization of discounted liabilities |
636 | — | ||||||
| Stock-based compensation |
1,486 | 832 | ||||||
| Changes in assets and liabilities associated with operations: |
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| Increase in net receivables |
(62,895 | ) | (22,853 | ) | ||||
| Increase in inventories |
(6,765 | ) | (6,443 | ) | ||||
| Increase in prepaid expenses and other assets |
(885 | ) | (691 | ) | ||||
| Decrease in income tax receivable/payable, net |
9,146 | — | ||||||
| Increase in accounts payable |
7,942 | 14,559 | ||||||
| Decrease in deferred revenue |
(5,557 | ) | — | |||||
| Increase in other liabilities |
30,976 | 5,796 | ||||||
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| Net cash provided by operating activities |
2,105 | 8,907 | ||||||
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| Cash flows from investing activities: |
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| Capital expenditures |
(4,466 | ) | (6,256 | ) | ||||
| Intangible expenditures |
— | (3,000 | ) | |||||
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| Net cash used in investing activities |
(4,466 | ) | (9,256 | ) | ||||
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| Cash flows from financing activities: |
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| Net (repayments) borrowings under line of credit agreement |
(7,300 | ) | 7,200 | |||||
| Principal payments on long-term debt |
(6,829 | ) | (6,522 | ) | ||||
| Borrowings on long-term debt |
20,063 | — | ||||||
| Proceeds from the issuance of common stock (sale of stock under ESPP and exercise of stock options) |
574 | 486 | ||||||
| Payment of cash dividends |
(826 | ) | (271 | ) | ||||
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| Net cash provided by financing activities |
5,682 | 893 | ||||||
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| Net increase in cash |
3,321 | 544 | ||||||
| Cash and cash equivalents at beginning of year |
1,158 | 383 | ||||||
| Effect of exchange rate changes on cash |
(647 | ) | 117 | |||||
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| Cash and cash equivalents as of September 30 |
$ | 3,832 | $ | 1,044 | ||||
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