Revenues and Earnings Continue to
Increase
American Vanguard Corporation (NYSE:AVD) today announced
financial results for the third quarter and nine months ended
September 30, 2017.
Third Quarter 2017 Financial Highlights – versus
2016:
- Net sales were $90.0 million in Q3 2017
compared to $82.4 million in Q3 2016.
- Net income was $4.1 million in Q3 2017
compared to $2.9 million in Q3 2016.
- Earnings per diluted share were $0.14
in Q3 2017 compared to $0.10 in Q3 2016.
Nine Months 2017 Financial Highlights – versus 2016:
- Net sales were $238.6 million in 2017
compared to $224.6 million in 2016.
- Net income was $11.8 million in 2017
compared to $8.9 million in 2016.
- Earnings per diluted share were $0.40
in 2017 compared to $0.30 in 2016.
Eric Wintemute, Chairman and CEO of American Vanguard, stated:
“We are pleased to report revenue increases of 9% for the third
quarter and 6% for the first nine months of 2017. Our top line
performance was driven by three positive factors: strong demand for
our cotton products, extraordinary demand for our mosquito
adulticide in the aftermath of domestic hurricanes, and incremental
sales of new products acquired in June. These gains were partially
offset by weather events in the soil fumigant market and
competitive pressure in the Midwest herbicide market.”
Mr. Wintemute continued, “With respect to profitability, a
diversified product mix and efficient manufacturing performance
allowed us to record improved gross profit margins for both the
third quarter (42% versus 40% in the prior year) and year-to-date
(43% versus 41% in the prior year). Further, we achieved a
significant increase in net income, despite higher operating
expenses in both the three and nine month periods. These expenses
relate largely to maintaining, acquiring and developing product
lines and commercializing technology. While we remain committed to
exercising financial discipline, we believe that part of this
discipline involves planning for the future. Consequently, during
the third quarter, we incurred legal and due diligence costs in
connection with acquisitions, funded increased regulatory costs for
the re-registration of several important organophosphate products,
expanded field trials for our product pipeline, and invested in
further development of SIMPAS. We believe that these near-term
expenses for portfolio extension, geographic expansion and
technology innovation provide significant growth potential for
American Vanguard.”
Mr. Wintemute concluded: “Our outlook for the final quarter of
2017 remains positive, as we integrate recent acquisitions and
position our business for the upcoming spring planting season.
During 2018, we expect that, with the addition of the AgriCenter
companies, our International business will double. Further, our
non-crop business should increase by about 50% with the addition of
OHP’s horticulture business. This is an exciting time for American
Vanguard, and we look forward to giving further comments during our
earnings conference call.”
Conference Call
Eric Wintemute, Chairman & CEO, Bob Trogele, EVP & COO
and David T. Johnson, VP & CFO, will conduct a conference call
focusing on the financial results and strategic themes at 4:30pm
Eastern / 1:30pm Pacific on Thursday, November 2, 2017. 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.
AMERICAN VANGUARD CORPORATION AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands, except share
data)
(Unaudited)
ASSETS
September 30, December 31, 2017 2016
Current assets: Cash and cash equivalents $ 9,045 $ 7,869
Receivables: Trade, net of allowance for doubtful accounts of $45
and $42, respectively 100,043 83,777 Other 3,630
3,429 Total receivables, net 103,673 87,206 Inventories 123,315
120,576 Prepaid expenses 13,543 11,424 Total current
assets 249,576 227,075 Property, plant and equipment, net 49,495
50,295 Intangible assets, net of applicable amortization 141,127
121,433 Other assets 28,917 31,153 $ 469,115 $
429,956
LIABILITIES AND STOCKHOLDERS’ EQUITY Current
liabilities: Current installments of other liabilities $ 99 $ 26
Accounts payable 29,355 24,358 Deferred revenue — 3,848 Accrued
program costs 65,650 42,930 Accrued expenses and other payables
8,704 12,072 Income taxes payable 1,684 13,840 Total
current liabilities 105,492 97,074 Long-term debt, net of deferred
loan fees 57,379 40,951 Other liabilities, excluding current
installments 2,789 2,868 Deferred income tax liabilities
6,712 6,706 Total liabilities 172,372 147,599
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 32,236,629 shares at September
30, 2017 and 31,819,695 shares at December 31, 2016
3,224 3,183 Additional paid-in capital 74,423 71,699 Accumulated
other comprehensive loss (3,881 ) (4,851 ) Retained earnings
230,962 220,428 304,728 290,459
Less treasury stock at cost, 2,450,634
shares at September 30, 2017 and December 31, 2016
(8,269 ) (8,269 ) American Vanguard Corporation
stockholders’ equity 296,459 282,190 Non-controlling interest
284 167 Total stockholders’ equity 296,743
282,357 $ 469,115 $ 429,956
AMERICAN VANGUARD CORPORATION AND
SUBSIDIARIES
CONDENSED 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,
2017 2016 2017
2016 Net sales $ 89,975 $ 82,447 $ 238,553 $ 224,645 Cost of
sales 51,943 49,461 136,102 132,761
Gross profit 38,032 32,986 102,451 91,884 Operating expenses
31,570 28,286 84,175 77,429 Operating income
6,462 4,700 18,276 14,455 Interest expense, net 375
301 1,073 1,304 Income before provision for income
taxes and loss on equity method investments 6,087 4,399 17,203
13,151 Income tax expense 1,954 1,378 5,015
3,672 Income before loss on equity method investments 4,133
3,021 12,188 9,479 Loss from equity method investments 115
180 226 309 Net income 4,018 2,841 11,962
9,170 Income (loss) attributable to non-controlling interest
71 36 (117 ) (253 ) Net income attributable to
American Vanguard $ 4,089 $ 2,877 $ 11,845 $ 8,917 Earnings per
common share—basic $ .14 $ .10 $ .41 $ .31 Earnings per common
share—assuming dilution $ .14 $ .10 $ .40 $ .30 Weighted average
shares outstanding—basic 29,193 28,957 29,064
28,886 Weighted average shares outstanding—assuming dilution
29,783 29,496 29,648 29,385
ANALYSIS OF SALES
For the Three and Nine Months Ended
September 30, 2017
(In thousands)
Three Months Ended September
30,
Nine Months Ended September
30,
2017 2016 2017
2016 Net sales: Insecticides $ 24,866 $ 25,478 $ 102,249 $
89,496 Herbicides/soil fumigants/fungicides 32,717 34,242 68,783
80,009 Other, including plant growth regulators 17,191
13,328 30,680 23,148 Net sales: 74,774 73,048
201,712 192,653 Non-crop 15,201 9,399 36,841
31,992 Total net sales: $ 89,975 $ 82,447 $ 238,553 $
224,645 Net sales: US $ 65,842 $ 60,033 $ 173,877 $ 161,661
International 24,133 22,414 64,676
62,984 Total net sales: $ 89,975 $ 82,447 $ 238,553 $ 224,645
AMERICAN VANGUARD CORPORATION AND
SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS
(In thousands)
(Unaudited)
For the Nine Months Ended
September 30,
2017 2016 Cash flows from operating
activities: Net income $ 11,962 $ 9,170
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization of fixed and intangible assets 12,358
12,367 Amortization of other long term assets 3,995 3,935
Amortization of discounted liabilities 20 28 Stock-based
compensation 3,585 1,656 Excess tax benefit from exercise of stock
options — (82 ) Increase in deferred income taxes 6 — Loss from
equity method investment 226 309 Changes in assets and liabilities
associated with operations: Increase in net receivables (15,746 )
(19,202 ) Increase in inventories (2,213 ) (5,201 ) Increase in
prepaid expenses and other assets (3,678 ) (1,011 ) (Decrease)
increase in income tax receivable/payable, net (12,137 ) 1,519
Increase in accounts payable 4,556 7,925 Decrease in deferred
revenue (3,848 ) (8,847 ) Increase in accrued program costs 22,720
30,536 (Decrease) increase in other payables and accrued expenses
(3,562 ) 3,098 Net cash provided by operating
activities 18,244 36,200 Cash flows from investing
activities: Capital expenditures (5,333 ) (6,122 ) Investment (950
) (3,283 ) Acquisition of product lines and other intangible assets
(25,904 ) (224 ) Net cash used in investing
activities (32,187 ) (9,629 ) Cash flows from
financing activities: Payments under line of credit agreement
(59,025 ) (24,000 ) Borrowings under line of credit agreement
76,000 — Payments on other long-term liabilities (26 ) (541 ) Tax
benefit from exercise of stock options — 82
Net payments from the issuance of common
stock (sale of stock under ESPP, exercise of stock options, and
shares purchased for tax withholding)
(820 ) 204 Payment of cash dividends (1,161 ) (289 )
Net cash provided by (used in) financing activities 14,968
(24,544 ) Net increase in cash and cash equivalents 1,025
2,027 Effect of exchange rate changes on cash and cash equivalents
151 (957 ) Cash and cash equivalents at beginning of period
7,869 5,524 Cash and cash equivalents at end of period $
9,045 $ 6,594
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version on businesswire.com: http://www.businesswire.com/news/home/20171102006517/en/
Company Contact:American Vanguard CorporationWilliam A. Kuser,
949-260-1200Director of Investor
Relationswilliamk@amvac-chemical.comorInvestor Representative:The
Equity Group Inc.Lena Cati,
212-836-9611Lcati@equityny.comwww.theequitygroup.com
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