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| 8-K - FORM 8-K - AMERICAN VANGUARD CORP | d432364d8k.htm |
Exhibit 99.1
FOR IMMEDIATE RELEASE
AMERICAN VANGUARD REPORTS 2012 THIRD QUARTER & NINE MONTH RESULTS
Record Third Quarter and Nine Month Net Sales and Net Income Performance — as the Company Gears Up Production for 2013 Corn Season
Newport Beach, CA – November 1, 2012 – American Vanguard Corporation (NYSE:AVD), today announced financial results for the third quarter and nine month period ended September 30, 2012.
Fiscal 2012 Third Quarter Financial Highlights – versus Fiscal 2011 Third Quarter:
| • | Net sales improved to $90.8 million from $73.8 million, an increase of 23% |
| • | Net income improved to $8.1 million from $4.6 million, an increase of 75% |
| • | Earnings per diluted share were $0.28 versus $0.16 in the prior year |
Fiscal 2012 First Nine Month Financial Highlights – versus Fiscal 2011 First Nine Month:
| • | Net sales improved to $262.8 million from $219.9 million, an increase of 20% |
| • | Net income improved to $25.6 million from $15.6 million, an increase of 63% |
| • | Earnings per diluted share were $0.89 versus $0.56 in the prior year |
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 record net sales and net income performance for the third quarter and the first nine months of 2012 reflecting continued strong demand for our products and excellent profitability of our business. This quarter’s results were driven by our participation in cotton and seasonal sales of our soil fumigants for post-harvest applications. Our sales also included initial shipments of granular soil insecticides in response to grower demand ahead of the 2013 planting season.”
Mr. Wintemute continued: “In our current results, we see the continuing trend of profitability improvement, as a higher-valued product mix, selective price increases and solid manufacturing performance all contribute to higher gross profit margins. Our finished goods inventory and accounts receivable levels have both risen, in response to the production associated with the pre-season sales build-up for the upcoming corn planting season. Notwithstanding the current strong growth the Company is experiencing, we continue to have sufficient cash and credit available for capital expenditures and/or potential product acquisitions that we may undertake in the coming quarters.”
Mr. Wintemute concluded: “Our business segments continue to perform well. Looking forward, we believe that much of our growth will be driven by the continuing adoption of our Best-of-Both-Worlds approach for soil insect control and by the success of our Impact® herbicide co-marketing program with Monsanto’s Roundup brands. Our marketing programs will be emphasizing AMVAC’s Yield Enhancement Solutions (YES®) not only for U.S. corn growers but for all of our customers in all of the crop markets that we serve. As critical components of advanced Integrated Pest Management (IPM) systems, our proven crop protection portfolio should support American Vanguard’s continued top-line growth, its strong profitability and the sustainable use of our products in keeping with modern agricultural practices.”
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, November 1, 2012. 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.
| 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 |
AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(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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| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| Net sales |
$ | 90,756 | $ | 73,783 | $ | 262,848 | $ | 219,878 | ||||||||
| Cost of sales |
51,131 | 43,219 | 147,499 | 130,722 | ||||||||||||
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| Gross profit |
39,625 | 30,564 | 115,349 | 89,156 | ||||||||||||
| Operating expenses |
26,460 | 22,396 | 73,540 | 61,118 | ||||||||||||
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| Operating income |
13,165 | 8,168 | 41,809 | 28,038 | ||||||||||||
| Interest expense |
701 | 899 | 2,157 | 2,684 | ||||||||||||
| Interest capitalized |
(165 | ) | (18 | ) | (313 | ) | (92 | ) | ||||||||
| Extinguishment of debt |
— | — | — | 546 | ||||||||||||
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| Income before income tax |
12,629 | 7,287 | 39,965 | 24,900 | ||||||||||||
| Income tax expense |
4,553 | 2,669 | 14,411 | 9,263 | ||||||||||||
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| Net income |
8,076 | 4,618 | 25,554 | 15,637 | ||||||||||||
| Change in fair value of interest rate swaps |
41 | (601 | ) | 87 | (1,547 | ) | ||||||||||
| Foreign currency translation adjustment |
306 | (988 | ) | 428 | (554 | ) | ||||||||||
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| Comprehensive income |
$ | 8,423 | $ | 3,029 | $ | 26,069 | $ | 13,536 | ||||||||
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| Earnings per common share—basic |
$ | 0.29 | $ | .17 | $ | 0.92 | $ | .57 | ||||||||
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| Earnings per common share—assuming dilution |
$ | 0.28 | $ | .16 | $ | 0.89 | $ | .56 | ||||||||
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| Weighted average shares outstanding—basic |
27,970 | 27,575 | 27,818 | 27,551 | ||||||||||||
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| Weighted average shares outstanding—assuming dilution |
28,878 | 27,993 | 28,673 | 27,842 | ||||||||||||
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The income statements for 2012 include the reclassification from operating expenses of $4.1million of sales and $4.3 million of cost of goods sold related to our Smartbox® systems.
AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
ASSETS
| Sept. 30, 2012 |
Dec. 31, 2011 |
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| (Unaudited) | (Note) | |||||||
| Current assets: |
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| Cash |
$ | 23,624 | $ | 35,085 | ||||
| Receivables: |
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| Trade, net of allowance for doubtful accounts of $669 and $340, respectively |
104,859 | 68,611 | ||||||
| Other |
1,454 | 1,187 | ||||||
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| 106,313 | 69,798 | |||||||
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| Inventories |
92,815 | 71,068 | ||||||
| Prepaid expenses and other short-term assets |
7,949 | 4,167 | ||||||
| Income taxes receivable |
52 | 203 | ||||||
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| Total current assets |
230,753 | 180,321 | ||||||
| Property, plant and equipment, net |
45,180 | 35,537 | ||||||
| Intangible assets |
111,570 | 116,189 | ||||||
| Other assets |
10,113 | 7,094 | ||||||
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| $ | 397,616 | $ | 339,141 | |||||
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| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: |
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| Current installments of long-term debt |
$ | 15,615 | $ | 14,460 | ||||
| Current installments of other liabilities |
1,221 | 1,038 | ||||||
| Accounts payable |
31,871 | 23,214 | ||||||
| Deferred revenue |
1,301 | 7,571 | ||||||
| Accrued program costs |
63,268 | 25,910 | ||||||
| Accrued expenses and other payables |
9,927 | 6,832 | ||||||
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| Total current liabilities |
123,203 | 79,025 | ||||||
| Long-term debt, excluding current installments |
38,500 | 51,917 | ||||||
| Other liabilities, excluding current installments |
5,318 | 5,955 | ||||||
| Deferred income taxes |
15,172 | 15,172 | ||||||
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| Total liabilities |
182,193 | 152,069 | ||||||
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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 30,316,794 shares at September 30, 2012 and 29,845,047 shares at December 31, 2011 |
3,032 | 2,985 | ||||||
| Additional paid-in capital |
51,528 | 45,966 | ||||||
| Accumulated other comprehensive loss |
(1,735 | ) | (2,250 | ) | ||||
| Retained earnings |
165,751 | 143,524 | ||||||
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| 218,576 | 190,225 | |||||||
| Less treasury stock, at cost, 2,260,996 shares at September 30, 2012 and at December 31, 2011 |
(3,153 | ) | (3,153 | ) | ||||
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| Total stockholders’ equity |
215,423 | 187,072 | ||||||
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| $ | 397,616 | $ | 339,141 | |||||
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The balance sheet at December 31, 2011 has been derived from the audited financial statements at that date.
Consistent with the note to the income statement, certain reclassifications have been made to the balances at 12/31/11 associated with our Smartbox systems and other related assets.
AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
For The Nine Months Ended September 30, 2012 and 2011
(Unaudited)
| Increase (decrease) in cash |
2012 | 2011 | ||||||
| Cash flows from operating activities: |
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| Net income |
$ | 25,554 | $ | 15,637 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: |
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| Depreciation and amortization of fixed and intangible assets |
9,915 | 10,366 | ||||||
| Amortization of other long term assets |
2,061 | 2,018 | ||||||
| Amortization of discounted liabilities |
592 | 636 | ||||||
| Stock-based compensation |
1,856 | 1,486 | ||||||
| Tax benefit from exercise of stock options |
(493 | ) | — | |||||
| Changes in assets and liabilities associated with operations: |
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| Increase in net receivables |
(36,515 | ) | (62,895 | ) | ||||
| Increase in inventories |
(21,747 | ) | (6,765 | ) | ||||
| Increase in prepaid expenses and other assets |
(8,862 | ) | (885 | ) | ||||
| Decrease in income tax receivable/payable, net |
644 | 9,146 | ||||||
| Increase in accounts payable |
8,743 | 7,942 | ||||||
| Decrease in deferred revenue |
(6,270 | ) | (5,557 | ) | ||||
| Increase in other liabilities |
37,623 | 30,976 | ||||||
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| Net cash provided by operating activities |
13,101 | 2,105 | ||||||
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| Cash flows from investing activities: |
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| Capital expenditures |
(14,908 | ) | (4,466 | ) | ||||
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| Net cash used in investing activities |
(14,908 | ) | (4,466 | ) | ||||
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| Cash flows from financing activities: |
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| Net repayments under line of credit agreement |
— | (7,300 | ) | |||||
| Principal payments on long-term debt |
(6,000 | ) | (6,829 | ) | ||||
| Tax benefit from exercise of stock options |
493 | — | ||||||
| Borrowings on long-term debt |
— | 20,063 | ||||||
| Decrease in other notes payable |
(6,460 | ) | — | |||||
| Payment of cash dividends |
(1,380 | ) | (826 | ) | ||||
| Proceeds from the issuance of common stock (sale of stock under ESPP and exercise of stock options) |
3,260 | 574 | ||||||
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| Net cash (used in) provided by financing activities |
(10,087 | ) | 5,682 | |||||
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| Net (decrease) increase in cash |
(11,894 | ) | 3,321 | |||||
| Cash and cash equivalents at beginning of year |
35,085 | 1,158 | ||||||
| Effect of exchange rate changes on cash |
433 | (647 | ) | |||||
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| Cash and cash equivalents as of September 30 |
$ | 23,624 | $ | 3,832 | ||||
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