American Vanguard Reports Fourth Quarter & Full Year 2011 Results

American Vanguard Corporation (NYSE:AVD), today announced financial results for the fourth quarter and full year ended December 31, 2011.

Fiscal 2011 Fourth Quarter– versus Fiscal 2010 Fourth Quarter:
  • Net sales were $84.7 million compared to $62.4 million, an increase of 36%.
  • Net income was $6.4 million compared to $3.9 million, an increase of 64%.
  • Earnings per diluted share were $0.23 versus $0.14.

Fiscal Full Year 2011– versus Fiscal Full Year 2010:
  • Net sales were $304.4 million compared to $226.9 million, an increase of 34%.
  • Net income was $22.1 million compared to $11.0 million, an increase of 101%.
  • Earnings per diluted share were $0.79 versus $0.40.

Eric Wintemute, Chairman and CEO of American Vanguard, stated: “Our record-setting performance in 2011 resulted from strong domestic and international demand for our existing product portfolio, the successful integration of several product lines acquired in late 2010 and the continued outstanding business execution by our entire organization. Compared to the prior full-year period, sales grew by 34%, gross profit margin improved to 40%, operating expenses as a percentage of sales declined to 28%; allowing us to double our net income. We posted this record financial performance despite lost sales and profit opportunities caused by the year-long sales interruption of our PCNB product line, a supply shortage for one of our recently acquired products and a persistent drought that negatively affected our U.S. cotton insecticide business.”

Mr. Wintemute continued: “In 2012, we see many encouraging prospects. Ever-increasing global demand for food, feed, fiber and bio-fuels strengthens agricultural commodity prices and is expected to encourage growers to expand acreage and purchase the crop protection inputs that American Vanguard sells. Our Impact herbicide for glyphosate tolerant weeds, our industry leading granular soil insecticides and proprietary closed delivery systems will continue to provide a superior yield enhancing solution for our customers.”

Mr. Wintemute concluded: “American Vanguard is well positioned to capitalize on these trends. We anticipate steady growth in most of our domestic crop markets; we expect to expand our footprint in international markets and continue our penetration of the non-crop pest control segment. Our strong balance sheet will allow us to invest in these growth initiatives and increasing cash generation should allow us to provide enhanced near-term returns to shareholders and also consider available growth opportunities that will strengthen the long-term enterprise value of American Vanguard.”

Conference Call

Eric Wintemute, Chairman & CEO and David T. Johnson, VP & CFO, will conduct a conference call focusing on the financial results at 12:00 pm ET / 9:00 am PT on Tuesday, March 6, 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 and the Standard & Poor’s Small Cap 600 Index. To learn more about American Vanguard, please reference the Company’s web site at www.american-vanguard.com.

The Company, from time to time, may discuss forward-looking information. Except for the historical information contained 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.

CONSOLIDATED STATEMENTS OF OPERATIONS

Three months and twelve months ended December 31, 2011 and 2010

(Dollars in thousands, except per share data)
     
For the three monthsended December 31 For the twelve monthsended December 31
  2011     2010     2011     2010  
Net sales $ 84,680 $ 62,413 $ 304,429 $ 226,859
Cost of sales   50,768     36,931     181,361     140,538  
 
Gross profit 33,912 25,482 123,068 86,321
Operating expenses   22,724     20,044     83,842     67,130  
 
Operating income 11,188 5,438 39,226 19,191
Interest expense 882 691 3,569 3,171
Interest income (3 )
Interest capitalized (17 ) (56 ) (109 ) (154 )
Extinguishment of debt           546      
 
Income before income tax 10,323 4,803 35,223 16,174
Income tax expense   3,892     900     13,155     5,190  
 
Net income $ 6,431   $ 3,903   $ 22,068   $ 10,984  
 
Earnings per common share—basic $ .23   $ .14   $ .80   $ .40  
 
Earnings per common share—assuming dilution $ .23   $ .14   $ .79   $ .40  
 
Weighted average shares outstanding—basic   27,583     27,452     27,559     27,385  
 
Weighted average shares outstanding—assuming dilution   28,026     27,682     27,875     27,652  

CONSOLIDATED BALANCE SHEETS

December 31, 2011 and 2010

(Dollars in thousands, except per share data)
 
2011 2010
Assets
Current assets:
Cash $ 35,085 $ 1,158
Receivables:
Trade, net of allowance for doubtful accounts of $340 and $447, respectively 68,611 33,833
Other   1,187     263  
 
  69,798     34,096  
 
Inventories 71,068 74,054
Prepaid expenses 2,311 2,591
Income taxes receivable   203     6,715  
 
Total current assets 178,465 118,614
Property, plant and equipment, net 39,273 40,541
Intangible assets, net 116,189 115,249
Other assets   5,214     5,775  
 
$ 339,141   $ 280,179  
 
Liabilities and Stockholders’ Equity
Current liabilities:
Current installments of long-term debt $ 14,460 $ 8,429
Current installments of other liabilities 1,038
Accounts payable 23,214 13,961
Deferred revenue 7,571 5,568
Accrued program costs 25,910 16,976
Accrued expenses and other payables   6,832     4,634  
 
Total current liabilities 79,025 49,568
Long-term debt, excluding current installments 51,917 53,710
Other liabilities, excluding current installments 5,955 3
Deferred income taxes   15,172     10,461  
 
Total liabilities   152,069     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 29,845,047 shares in 2011 and 29,735,928 shares in 2010 2,985 2,974
Additional paid-in capital 45,966 43,403
Accumulated other comprehensive loss (2,250 ) (448 )
Retained earnings   143,524     123,661  
 
190,225 169,590
Less treasury stock at cost, 2,260,996 shares in both 2011 and 2010   (3,153 )   (3,153 )
 
Total stockholders’ equity   187,072     166,437  
 
$ 339,141   $ 280,179  

See summary of significant accounting policies and notes to consolidated financial statements.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Years ended December 31, 2011, 2010 and 2009

(Dollars in thousands, except per share data)
     
2011 2010 2009
Increase (decrease) in cash
Cash flows from operating activities:
Net income (loss) $ 22,068 $ 10,984 $ (5,789 )
Adjustments to reconcile net income (loss) to net cash provided byoperating activities:
Depreciation and amortization of fixed and intangible assets 13,546 11,123 10,804
Amortization of other long term assets 1,983 3,258 2,683
Amortization of discounted liabilities 1,371
Stock-based compensation 1,994 1,122 1,223
Increase(decrease) in deferred income taxes 4,711 5,342 (778 )
Changes in assets and liabilities associated with operations:
(Increase) decrease in net receivables (35,021 ) 6,967 10,905
Decrease (increase) in inventories 2,986 (1,542 ) 18,114
Decrease (increase) in income tax receivable 6,512 (2,583 ) (4,132 )
(Increase) in prepaid expenses and other assets (1,823 ) (2,235 ) (2,898 )
Increase (decrease) in accounts payable 8,383 3,095 (2,828 )
Increase in deferred revenue 2,003 5,568
Increase (decrease) in other payables and accrued expenses   10,553     (7,909 )   4,647  
 
Net cash provided by operating activities   39,266     33,190     31,951  
 
Cash flows from investing activities:
Capital expenditures (6,261 ) (8,004 ) (4,322 )
Acquisitions of intangible assets   (316 )   (32,677 )    
 
Net cash used in investing activities   (6,577 )   (40,681 )   (4,322 )
 
Cash flows from financing activities:
Net (repayments) borrowings under line of credit agreement (7,300 ) 4,700 (21,900 )
Payments on long-term debt (8,429 ) (8,107 ) (4,106 )
Payment on other long-term liabilities (401 )
Increase (decrease) in other notes payable 20,063 11,586 (2,438 )
Proceeds from the issuance of common stock 580 768 1,470
Payment of cash dividends   (2,205 )   (819 )   (1,611 )
 
Net cash provided (used in) by financing activities   2,308     8,128     (28,585 )
 
Net increase (decrease) in cash 34,997 637 (956 )
Effect of exchange rate changes on cash (1,070 ) 138 110
Cash at beginning of year   1,158     383     1,229  
 
Cash at end of year $ 35,085   $ 1,158   $ 383  
 
Supplemental cash flow information:
Cash paid during the year for:
Interest $ 2,055   $ 3,661   $ 3,279  
 
Income taxes $ 6,359   $ 2,205   $ 3,361  

Copyright Business Wire 2010

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