American Vanguard Reports First Quarter 2013 Results

American Vanguard Reports First Quarter 2013 Results

Record performance driven by strong demand for corn herbicide and insecticide products

NEWPORT BEACH, Calif.--(BUSINESS WIRE)-- American Vanguard Corporation (NYS: AVD) , today announced financial results for the first quarter ended March 31, 2013.


Fiscal 2013 First Quarter Financial Highlights - versus Fiscal 2012 First Quarter

• Net sales of $121.5 million, compared with $87.3 million, an increase of 39%.

• Net income of $16.9 million, compared with $8.7 million, an increase of 94%.

• Earnings per diluted share of $0.59, compared with $0.31, an increase of 90%.

Eric Wintemute, Chairman and CEO of American Vanguard, stated: "This record 2013 first quarter result demonstrates the continuing performance that we have been delivering over the last three years. Our net sales increase of 39% was driven largely by the strong demand for both our granular soil insecticides and our Impact® herbicide in the U.S. corn market. Gross profit margins rose to 44% on a profitable product mix, improved pricing and continued progress on factory utilization. Operating expenses as a percentage of net sales declined to 23%, despite higher selling and administrative expenses associated with our dynamic growth. Stronger sales, improved gross margins and operating expense management enabled us to improve our net income by 94%...to a very strong 14% of net sales."

Mr. Wintemute continued, "First quarter sales of granular soil insecticides for corn continued their strong fourth quarter 2012 trend. This is driven by U.S. corn growers who continue to support our proven crop protection products in conjunction with genetically modified seeds, as part of an integrated pest management system. This provides the most comprehensive defense against root damaging soil insects. American Vanguard has the largest offering of these yield enhancing insecticides along with the most advanced, closed delivery equipment for safely and efficiently dispensing these products. We also are benefitting from our co-marketing program with Monsanto, which rewards corn growers for using AMVAC's Impact® post-emergent herbicide with Monsanto's widely used Roundup® glyphosate herbicide brands."

Mr. Wintemute concluded, "We continue to expand our business with a number of exciting new developments. During the quarter we announced the registration of our SmartBlock® potato sprout inhibitor, our investment in the natural products technology of TyraTech, Inc. and the continued staffing of our international subsidiary in the Netherlands. We look forward to giving additional details during our first quarter earnings call."

Conference Call

Eric Wintemute, Chairman & CEO 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 Thursday, May 2, 2013. 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.

AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(In thousands, except per share data)


(Unaudited)

For the three months
ended March 31,

2013

2012

Net sales

$

121,537

$

87,255

Cost of sales

67,756

49,877

Gross profit

53,781

37,378

Operating expenses

27,628

22,976

Operating income

26,153

14,402

Interest expense

547

735

Interest capitalized

(194

)

(36

)

Income before provision for income taxes

25,800

13,703

Income tax expense

8,981

4,969

Net income

16,819

8,734

Net loss attributable to non-controlling interest

96

Net income attributable to American Vanguard

16,915

8,734

Change in fair value of interest rate swaps

178

22

Foreign currency translation adjustment

407

542

Comprehensive income

$

17,500

$

9,298

Earnings per common share—basic

$

.60

$

.32

Earnings per common share—assuming dilution

$

.59

$

.31

Weighted average shares outstanding—basic

28,269

27,624

Weighted average shares outstanding—assuming dilution

28,879

28,299

AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except per share data)

ASSETS

Mar. 31,

2013

Dec. 31,

2012

(Unaudited)

(Note)

Current assets:

Cash

$

9,995

$

38,476

Receivables:

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

146,917

76,073

Other

1,294

1,230

148,211

77,303

Inventories

109,489

87,951

Prepaid expenses

13,909

13,710

Deferred income tax assets

4,877

4,877

Total current assets

286,481

222,317

Property, plant and equipment, net

48,001

45,701

Intangible assets

111,933

113,521

Other assets

28,030

18,351

$

474,445

$

399,890

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Current installments of long-term debt

$

10,070

$

16,247

Current installments of other liabilities

1,703

1,839

Accounts payable

63,909

32,838

Deferred revenue

2,279

20,427

Accrued program costs

73,696

32,335

Accrued expenses and other payables

9,564

8,671

Income taxes payable

7,364

1,313

Total current liabilities

168,585

113,670

Long-term debt, excluding current installments

39,878

36,196

Other liabilities, excluding current installments

4,783

5,425

Deferred income taxes

19,163

19,163

Total liabilities

232,409

174,454

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 30,923,543
shares at March 31, 2013 and 30,766,730 shares at December 31, 2012

3,094

3,077

Additional paid-in capital

55,478

54,323

Accumulated other comprehensive loss

(1,177)

(1,762 )

Retained earnings

189,182

174,243

246,577

229,881

Less treasury stock, at cost, 2,310,634 shares at both March 31, 2013 and December 31, 2012

(4,804)

(4,804 )

American Vanguard stockholders' equity

241,773

225,077

Non-controlling interest

263

359

Total stockholders' equity

242,036

225,436

$

474,445

$

399,890

Note: The balance sheet at December 31, 2012 has been derived from the audited financial statements at that date.

See notes to consolidated financial statements.

AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

For The Three Months Ended March 31, 2013 and 2012

(Unaudited)

Increase (decrease) in cash

2013

2012

Cash flows from operating activities:

Net income

$

16,819

$

8,734

Adjustments to reconcile net income to net cash used in operating activities:

Depreciation and amortization of fixed and intangible assets

3,699

3,469

Amortization of other long term assets

836

682

Amortization of discounted liabilities

42

198

Stock-based compensation

688

422

Tax benefit from exercise of stock options

(57

)

(43

)

Changes in assets and liabilities associated with operations:

Increase in net receivables

(70,908

)

(30,300

)

Increase in inventories

(21,538

)

(3,599

)

Increase in prepaid expenses and other assets

(7,027

)

(1,568

)

Increase in income tax receivable/payable, net

6,108

3,725

Increase in accounts payable

31,250

1,188

Decrease in deferred revenue

(18,148

)

(7,571

)

Increase in other payables and accrued expenses

40,100

17,065

Net cash used in operating activities

(18,136

)

(7,598

)

Cash flows from investing activities:

Capital expenditures

(4,396

)

(5,718

)

Investment

(3,687

)

Net cash used in investing activities

(8,083

)

(5,718

)

Cash flows from financing activities:

Net borrowings under line of credit agreement

6,200

Payments on long-term debt

(2,500

)

(2,000

)

Payments on other long-term liabilities

(682

)

Tax benefit from exercise of stock options

57

43

Decrease in other notes payable

(6,154

)

(6,035

)

Proceeds from the issuance of common stock (sale of stock under ESPP and exercise of stock
option)

427

417

Net cash used in financing activities

(2,652

)

(7,575

)

Net decrease in cash

(28,871

)

(20,891

)

Cash and cash equivalents at beginning of period

38,476

35,085

Effect of exchange rate changes on cash

390

538

Cash and cash equivalents as of March 31

$

9,995

$

14,732



American Vanguard Corporation
William A. Kuser, Director of Investor Relations
949-260-1200
williamk@amvac-chemical.com
or
Investor Representative
The Equity Group Inc.
Lena Cati, 212-836-9611
Lcati@equityny.com
www.theequitygroup.com

KEYWORDS: United States North America California

INDUSTRY KEYWORDS:

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