Recent Acquisitions and Traditional Business
Drive Growth
American Vanguard Corporation (NYSE:AVD) today announced
financial results for the quarter ended March 31, 2018.
Financial Highlights Fiscal 2018 First Quarter – versus
Fiscal 2017 First Quarter
- Net sales of $104.1 million in 2018,
compared to $70.7 million in 2017
- Net income of $4.66 million in 2018,
compared to $3.45 million in 2017
- EBITDA1 of $13.3 million in 2018,
compared to $10.5 million in 2017
- Earnings per diluted share of $0.16 in
2018, compared to $0.12 in 2017
Eric Wintemute, Chairman and CEO of American Vanguard commented,
“Our overall financial performance for this year’s first quarter
improved significantly, aided by our 2017 product and company
acquisitions as well as our diversified participation in many
markets. Net sales rose 47%, driven by a 41% increase attributable
to acquisitions and a 6% gain in AMVAC’s traditional base business.
Our domestic sales experienced solid performance from granular soil
insecticides, herbicides, and soil fumigants. Further, our
international business grew significantly with the inclusion of
AgriCenter’s Central American franchise.”
Mr. Wintemute continued, “Gross profit increased as a result of
improved factory performance, organic growth in the Company’s sales
and the addition of products and businesses acquired during 2017.
As we anticipated in our last conference call, gross margins
decreased slightly due to a product mix influenced by the
AgriCenter distribution business. Our operating expenses declined
as a percentage of sales, but rose on an absolute basis, as we
integrated acquired businesses, made new product introductions,
funded regulatory defense of important products, incurred bulk
freight costs to meet strong soil fumigant demand and advanced the
development of our SIMPAS precision application technology. With
modest interest expenses and a reduced tax rate, we posted a 35%
year-over-year increase in net income and a 27% increase in
EBITDA,2 as compared to the first quarter of 2017.”
Mr. Wintemute concluded, “During the balance of 2018, we expect
continued growth in our herbicide products, our Central American
region and our non-crop business. We also anticipate strong demand
for our products in cotton, fruit and vegetables, strong sales of
our Dibrom® mosquito adulticide in light of predicted Gulf Coast
hurricane activity and stable demand for our corn products in spite
of weather-related delays in Midwest planting. In addition, we are
scheduled to introduce several new products from our development
pipeline. We look forward to providing further detail on our
financial performance, market outlook and future initiatives during
our upcoming 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 at 4:30 pm ET / 1:30 pm PT on
Tuesday, May 8, 2018. Interested parties may participate in the
call by dialing (201) 493-6744 – please dial 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.
____________
1 Earnings before interest, taxes, depreciation and amortization.
EBITDA is not a financial measure calculated and presented in
accordance with U.S. generally accepted accounting principles
(GAAP) and should not be considered as an alternative to net income
(loss), operating income (loss) or any other financial measures so
calculated and presented, nor as an alternative to cash flow from
operating activities as a measure of liquidity. The items excluded
from EBITDA are detailed in the reconciliation attached to this
news release. Other companies (including the Company’s competitors)
may define EBITDA differently. 2 The Company believes that use of
EBITDA is useful to investors in that it is one of the primary
bases upon which borrowing capacity is calculated under the
Company’s senior credit facility, it gives investors a sense of the
Company’s financial condition and results of operations without
giving effect to the cost of increased acquisition activity in 2017
and it is commonly used by investors and others as a basis for
supporting overall business valuations. Nevertheless, investors
should not consider EBITDA in isolation or as a substitute for
analysis of the Company’s results as reported in accordance with
GAAP.
AMERICAN VANGUARD CORPORATION AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands, except share
data)
(Unaudited)
ASSETS
March
31,
December 31, 2018 2017 Current assets: Cash
and cash equivalents $ 13,018 $ 11,337 Receivables: Trade, net of
allowance for doubtful accounts of $298 and $46, respectively
111,638 102,534 Other 10,765 7,071 Total receivables,
net 122,403 109,605 Inventories 143,231 123,124 Prepaid expenses
11,390 10,817 Total current assets 290,042 254,883
Property, plant and equipment, net 48,579 49,321 Intangible assets,
net of applicable amortization 178,283 180,950 Goodwill 22,983
22,184 Other assets 26,906 28,254 Total assets $
566,793 $ 535,592
LIABILITIES AND STOCKHOLDERS’
EQUITY Current liabilities: Current installments of other
liabilities $ 5,475 $ 5,395 Accounts payable 63,820 53,748 Deferred
revenue 11,858 14,574 Accrued program costs 43,688 39,054 Accrued
expenses and other payables 9,011 12,061 Income taxes payable
880 1,370 Total current liabilities 134,732 126,202
Long-term debt, net 90,325 77,486 Other liabilities, excluding
current installments 10,328 10,306 Deferred income tax liabilities
17,250 16,284 Total liabilities 252,635
230,278 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 32,668,923 shares at
March 31, 2018 and 32,241,866 shares at December 31, 2017 3,267
3,225 Additional paid-in capital 77,735 75,658 Accumulated other
comprehensive loss (3,835 ) (4,507 ) Retained earnings 245,056
238,953 Less treasury stock at cost, 2,450,634 shares at March 31,
2018 and
December 31, 2017
(8,269 ) (8,269 ) American Vanguard Corporation
stockholders’ equity 313,954 305,060 Non-controlling interest
204 254 Total stockholders’ equity 314,158
305,314 Total liabilities and stockholders' equity $ 566,793
$ 535,592
AMERICAN VANGUARD CORPORATION AND
SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(In thousands, except per share
data)
(Unaudited)
For the three months
ended March 31
2018 2017 Net sales $ 104,108 $ 70,673
Cost of sales 63,057 40,589 Gross profit 41,051
30,084 Operating expenses 33,700 24,951 Operating
income 7,351 5,133 Interest expense, net 837 298
Income before provision for income taxes and loss on equity method
investments 6,514 4,835 Income tax expense 1,692
1,380 Income before loss on equity method investments 4,822 3,455
Loss from equity method investments 217 42 Net income
4,605 3,413 Loss attributable to non-controlling interest 50
39 Net income attributable to American Vanguard $ 4,655 $
3,452 Earnings per common share—basic $ 0.16 $ 0.12 Earnings per
common share—assuming dilution $ 0.16 $ 0.12 Weighted average
shares outstanding—basic 29,282 28,947 Weighted
average shares outstanding—assuming dilution 29,972
29,654
ANALYSIS OF SALES
For the three months ended March 31,
2018 and 2017
(In thousands)
(Unaudited)
Three Months Ended
March 31
2018 2017 Net sales: Crop: Insecticides
$ 41,293 $ 37,942 Herbicides/soil fumigants/fungicides 32,185
20,021 Other, including plant growth regulators and distribution
17,840 3,392 91,318 61,355 Non-crop, including
distribution 12,790 9,318 Total net sales: $ 104,108
$ 70,673 Net sales: US $ 69,815 $ 52,244 International
34,293 18,429 Total net sales: $ 104,108 $ 70,673
AMERICAN VANGUARD CORPORATION AND
SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS
(In thousands)
(Unaudited)
For the three months
ended March 31
2018 2017 Cash flows from operating
activities: Net income $ 4,605 $ 3,413 Adjustments to reconcile net
income to net cash provided by (used in) operating
activities:
Depreciation and amortization of fixed and intangible assets 4,983
3,939 Amortization of other long term assets 1,163 1,423
Amortization of discounted liabilities 102 6 Stock-based
compensation 1,309 1,080 Increase in deferred income taxes — 8
Operating loss from equity method investment 217 42 Changes in
assets and liabilities associated with operations: (Increase)
decrease in net receivables (9,303 ) 11,422 Increase in inventories
(19,558 ) (1,366 ) Increase in prepaid expenses and other assets
(562 ) (1,126 ) (Increase) decrease in income tax
receivable/payable, net (497 ) 793 Increase (decrease) in accounts
payable 9,613 (3,025 ) Decrease in deferred revenue (2,740 ) (394 )
Increase in accrued program costs 4,634 6,612 Decrease in other
payables and accrued expenses (3,201 ) (5,657 ) Net
cash (used in) provided by operating activities (9,235 )
17,170 Cash flows from investing activities: Capital
expenditures (1,553 ) (3,080 ) Acquisitions of businesses and
intangible assets (815 ) (300 ) Net cash used in
investing activities (2,368 ) (3,380 ) Cash flows
from financing activities: Payments under line of credit agreement
(23,000 ) (27,000 ) Borrowings under line of credit agreement
35,800 16,000 Net payments from the issuance of common stock (sale
of stock under ESPP,
exercise of stock options, and shares
purchased for tax withholdings)
810 303 Payment of cash dividends (438 ) (289 ) Net
cash provided by (used in) financing activities 13,172
(10,986 ) Net increase in cash and cash equivalents 1,569
2,804 Cash and cash equivalents at beginning of period 11,337 7,869
Effect of exchange rate changes on cash and cash equivalents
112 119 Cash and cash equivalents at end of period $ 13,018
$ 10,792
Unaudited Reconciliation of Net Income
to EBITDA
For the three months ended March 31,
2018 and March 31, 2017
(Unaudited)
March 31, 2018 March 31, 2017
Net income attributable to American Vanguard, as reported $ 4,655 $
3,452 Provision for income taxes 1,692 1,380 Interest expense, net
837 298 Depreciation and amortization 6,146 5,362
EBITDA3
$ 13,330 $ 10,492
____________
3 Earnings before interest, taxes, depreciation and amortization.
EBITDA is not a financial measure calculated and presented in
accordance with U.S. generally accepted accounting principles
(GAAP) and should not be considered as an alternative to net income
(loss), operating income (loss) or any other financial measures so
calculated and presented, nor as an alternative to cash flow from
operating activities as a measure of liquidity. The items excluded
from EBITDA are detailed in the reconciliation attached to this
news release. Other companies (including the Company’s competitors)
may define EBITDA differently.
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version on businesswire.com: https://www.businesswire.com/news/home/20180508006561/en/
Company: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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