American Vanguard Reports Third Quarter & 9-Month 2011 Results

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captured additional business with Thimet® in peanuts and sugarcane replacing a competing product that has been withdrawn from the U.S. market.”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.
 

AMERICAN VANGUARD CORPORATION AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS(In thousands, except per share data)(Unaudited)
           

For the three monthsended September 30
For the nine monthsended September 30
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  
Gross profit 30,751 25,376 91,017 63,533
Operating expenses   22,583     18,865     62,979     49,577  
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      
Income before income tax 7,287 5,683 24,900 11,371
Income tax expense   2,669     2,072     9,263     4,290  
Net income $ 4,618   $ 3,611   $ 15,637   $ 7,081  
Earnings per common share—basic $ .17   $ .13   $ .57   $ .26  
Earnings per common share—assuming dilution $ .16   $ .13   $ .56   $ .26  
Weighted average shares outstanding—basic   27,575     27,398     27,551     27,362  
Weighted average shares outstanding—assuming dilution   27,993     27,663     27,842     27,643  
 
         

AMERICAN VANGUARD CORPORATION AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(In thousands, except per share data)
 

ASSETS
Sep 30,2011 Dec. 31,2010
(Unaudited) (Note)
Current assets:
Cash $ 3,832 $ 1,158
Receivables:
Trade, net of allowance for doubtful accounts of $423 and $475, respectively 96,785 33,833
Other   206     263  
  96,991     34,096  
 
Inventories 80,819 74,054
Prepaid expenses 2,668 2,591
Income taxes receivable       6,715  
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  
$ 345,660   $ 280,179  
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
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      
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  
 
Total liabilities   165,832     113,742  
 
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 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  
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 )
Total stockholders’ equity   179,828     166,437  
$ 345,660   $ 280,179  
 

Note: The balance sheet at December 31, 2010 has been derived from the audited financial statements at that date.
 

         

AMERICAN VANGUARD CORPORATION AND SUBSIDIARIESCONSOLIDATED 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:
Net income $ 15,637 $ 7,081
Adjustments to reconcile net income to net cash provided by operating activities:
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:
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  
Net cash provided by operating activities   2,105     8,907  
Cash flows from investing activities:
Capital expenditures (4,466 ) (6,256 )
Intangible expenditures       (3,000 )
Net cash used in investing activities   (4,466 )   (9,256 )
Cash flows from financing activities:
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 )
Net cash provided by financing activities   5,682     893  
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  
Cash and cash equivalents as of September 30 $ 3,832   $ 1,044  

Copyright Business Wire 2010

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