American Vanguard Reports Fourth Quarter & Full Year 2012 Results

American Vanguard Reports Fourth Quarter & Full Year 2012 Results

Full-Year Revenue up 22% - - Full-Year Net Income up 67% - - Continuing Record Performance

NEWPORT BEACH, Calif.--(BUSINESS WIRE)-- American Vanguard Corporation (NYS: AVD) , today announced financial results for the fourth quarter and full year ended December 31, 2012.


Fiscal 2012 Financial Highlights - versus Fiscal 2011:

  • Net sales were $366.2 million compared to $301.1 million.

  • Net income was $36.8 million compared to $22.1 million.

  • Earnings per diluted share were $1.28 versus $0.79.

Fiscal 2012 Fourth Quarter Financial Highlights - versus Fiscal 2011 Fourth Quarter:

  • Net sales were $104.3 million compared to $81.8 million.

  • Net income was $11.3 million compared to $6.4 million.

  • Earnings per diluted share were $0.39 versus $0.23.

Eric Wintemute, Chairman and CEO of American Vanguard, stated: "Our record-setting performance in 2012, capped by our first $100+ million revenue quarter, was driven bystrong end-use demand and consistent business execution by our organization. Compared to the prior full-year period, 2012 salesgrew by 22%, gross profit marginsimproved from 41% to 44%, and operating expenses remained steady as a percentage of sales at 28%. This operating performance allowed us to grow our net incomeby 67%and increase our fully dilutedearnings per shareto $1.28. Our year-end cash positionremained very strong; stockholders equity rose for the year by 20%; and we were able to return additional value to shareholders with a special $0.10/share dividend during December."

Mr. Wintemute continued: "Strong global demand for food, feed, fiber and bio-fuels continues to encourage growers to support the Yield Enhancing Solutions - YES™ that American Vanguard provides. The practice ofIntegrated Pest Managementhas stimulated demand for our comprehensive offering ofcorn soil insecticides and proprietary closed delivery systems. In 2012, we invested in significant capital improvements at our Axis, Alabama facility to support both our growing granular soil insecticide franchise and our strong cotton defoliant business. We also established an international subsidiary in the Netherlands to focus resources on the important long-range objective of global expansion. At year-end, in a bold new initiative, we formed a majority-owned subsidiary with TyraTech, an innovative developer of natural products that will allow us to participate in the growing demand for "green technology" in commercial, consumer and agricultural pest control markets."-

Mr. Wintemute concluded: "In 2013, we are well-positioned to satisfy the continuing strong demand for our many crop protection products. Attractive crop commodity prices continue to give growers the financial health and incentive to invest in our proven technologies for maximizing their harvest output. We are prepared to satisfy the increasing demand for soil insecticides in corn and other crops by maintaining full production of our market-leading products & proprietary equipment systems. We expect to meet the increased demand for our corn herbicide Impact® which has been stimulated by our co-marketing agreement with Monsanto's Roundup® brands. We believe that 2013 will be very promising for American Vanguard and look forward to providing additional information about those prospects during our earnings conference call."

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 Thursday, February 28, 2013. 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

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

Years ended December 31, 2012, 2011 and 2010

(Dollars in thousands, except per share data)

2012

2011

2010

Net sales

$

366,190

$

301,080

$

226,859

Cost of sales

205,065

178,012

140,538

Gross profit

161,125

123,068

86,321

Operating expenses

101,802

83,842

67,130

Operating income

59,323

39,226

19,191

Interest expense

2,872

3,569

3,171

Interest income

(1

)

(3

)

Interest capitalized

(400

)

(109

)

(154

)

Extinguishment of debt

546

Income before provision for income taxes

56,852

35,223

16,174

Income taxes expense

20,026

13,155

5,190

Net income

36,826

22,068

10,984

Net loss attributable to non-controlling interest

41

Net income attributable to American Vanguard

$

36,867

$

22,068

$

10,984

Change in fair value of interest rate swaps

158

(869

)

1,094

Foreign currency translation adjustment

330

(933

)

201

Comprehensive income

$

37,355

$

20,266

$

12,279

Earnings per common share—basic

$

1.32

$

0.80

$

0.40

Earnings per common share—assuming dilution

$

1.28

$

0.79

$

0.40

Weighted average shares outstanding—basic

27,914

27,559

27,385

Weighted average shares outstanding—assuming dilution

28,756

27,875

27,652

AMERICAN VANGUARD CORPORATION

AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

December 31, 2012 and 2011

(Dollars in thousands, except per share data)

2012

2011

Assets

Current assets:

Cash

$

38,476

$

35,085

Receivables:

Trade, net of allowance for doubtful accounts of $623 and $340, respectively

76,073

68,611

Other

1,230

1,187

77,303

69,798

Inventories

87,951

71,068

Prepaid expenses

13,710

4,167

Income taxes receivable

203

Deferred income tax assets

4,877

3,417

Total current assets

222,317

183,738

Property, plant and equipment, net

45,701

35,537

Intangible assets, net

113,521

116,189

Other assets

18,351

7,094

$

399,890

$

342,558

Liabilities and Stockholders' Equity

Current liabilities:

Current installments of long-term debt

$

16,247

$

14,460

Current installments of other liabilities

1,839

1,038

Accounts payable

32,838

23,214

Deferred revenue

20,427

7,571

Accrued program costs

32,335

25,910

Tax payable

1,313

Accrued expenses and other payables

8,671

6,832

Total current liabilities

113,670

79,025

Long-term debt, excluding current installments

36,196

51,917

Other liabilities, excluding current installments

5,425

5,955

Deferred income tax liabilities

19,163

18,589

Total liabilities

174,454

155,486

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 30,766,730 shares in 2012 and 29,845,047 shares in 2011

3,077

2,985

Additional paid-in capital

54,323

45,966

Accumulated other comprehensive loss

(1,762

)

(2,250

)

Retained earnings

174,243

143,524

229,881

190,225

Less treasury stock at cost, 2,310,634 shares in 2012 and 2,260,996 shares in 2011

(4,804

)

(3,153

)

American Vanguard stockholders' equity

225,077

187,072

Non-controlling interest

359

Total stockholders' equity

225,436

187,072

$

399,890

$

342,558

AMERICAN VANGUARD CORPORATION

AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

Years ended December 31, 2012, 2011 and 2010

(Dollars in thousands, except per share data)

2012

2011

2010

Increase in cash

Cash flows from operating activities:

Net income

$

36,826

$

22,068

$

10,984

Adjustments to reconcile net income to net cash provided by
operating activities:

Depreciation and amortization of fixed and intangible assets

13,487

13,546

11,123

Amortization of other long term assets

2,925

1,983

3,258

Amortization of discounted liabilities

818

1,371

Stock-based compensation

2,950

1,994

1,122

Tax benefit from exercise of stock options

(621

)

(Decrease) increase in deferred income taxes

(886

)

4,711

5,342

Changes in assets and liabilities associated with operations:

(Increase) decrease in net receivables

(7,505

)

(35,021

)

6,967

(Increase) decrease in inventories

(16,883

)

2,986

(1,542

)

Decrease (increase) in income tax receivable/payable, net

2,137

6,512

(2,583

)

Increase in prepaid expenses and other assets

(23,725

)

(1,823

)

(2,235

)

Increase in accounts payable

9,781

8,384

3,095

Increase in deferred revenue

12,856

2,003

5,568

Increase (decrease) in other payables and accrued expenses

8,264

10,552

(7,909

)

Net cash provided by operating activities

40,424

39,266

33,190

Cash flows from investing activities:

Capital expenditures

(17,628

)

(6,261

)

(8,004

)

Acquisitions of intangible assets

(3,473

)

(