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 | ||||||||
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 | 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 | 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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