Attached files
| file | filename |
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| 8-K - FORM 8-K - AMERICAN VANGUARD CORP | d8k.htm |
Exhibit 99.1
FOR IMMEDIATE RELEASE
AMERICAN VANGUARD REPORTS FIRST QUARTER 2011 RESULTS
Performance reflects strong domestic crop demand and incremental business resulting
from recently acquired product lines
Newport Beach, CA – May 5, 2011 – American Vanguard Corporation (NYSE:AVD), today announced financial results for the first quarter ended March 31, 2011.
Fiscal 2011 First Quarter Financial Highlights – versus Fiscal 2010 First Quarter
| • | Net sales of $67.4 million, an increase of 44%. |
| • | Net income of $5.0 million, compared to $1.8 million generated in 1Q2010. |
| • | Earnings per diluted share were $0.18, compared with $0.07 in the prior year period. |
Eric Wintemute, President and CEO of American Vanguard, stated: “Our first quarter year-over-year sales growth reflects improved conditions in the U.S. agricultural sector with organic growth accounting for approximately 30% of the increase and incremental business resulting from our recent acquisition of several significant product lines, specifically, Mocap, Nemacur and the Aztec bag business accounting for the balance. Gross profit margins rose to 42% as a result of our sales focus on higher margin products and improved factory utilization rates in certain plants. Operating expenses as a percentage of sales declined to 28% as compared to 32% last year, despite the rising freight costs and regulatory expenses that we had predicted in earlier business reviews.”
Mr. Wintemute continued, “The ongoing resurgence in domestic cotton acreage represents a very positive development for us and contributed to excellent quarterly sales of our premier cotton insecticide Bidrin. Pre-planting positioning of our corn soil insecticides Aztec and SmartChoice were also very strong in the quarter. As mentioned in our last conference call, demand for secondary insect & nematicidal control is steadily increasing both domestically and internationally which benefits our strong portfolio of such products as Counter, Mocap and Nemacur.”
Mr. Wintemute concluded, “In 2011, we see more favorable conditions that should serve to enhance our performance. Increased demand for food and feed, fiber and fuel (ethanol as an additive) play to our strength in cotton, corn and a broad range of fruit & vegetable crops. Rising sales should lead to greater factory throughput, more efficient manufacturing operating rates, and a lower level of unabsorbed fixed costs. These factors, combined with improved organizational capabilities and judicious financial control, should allow American Vanguard to achieve better operating and financial performance in 2011.”
Conference Call
Eric Wintemute, President & CEO and David Johnson, CFO, will conduct a conference call focusing on the financial results at 12:00 pm ET / 9:00 am PT on Thursday, May 5, 2011. Interested parties may participate in the call by dialing (201) 689-8349 – 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 the control of public and animal health pests. American Vanguard is included on the Russell 2000® & 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 the conference call referenced 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.
| CONTACT: | ||
| American Vanguard Corporation | The Equity Group Inc. | |
| William A. Kuser, Director of Investor Relations | www.theequitygroup.com | |
| (949) 260-1200 | Lena Cati (212) 836-9611 | |
| williamk@amvac-chemical.com | Lcati@equityny.com |
AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except per share amounts)
(Unaudited)
| For the three months ended March 31 |
||||||||
| 2011 | 2010 | |||||||
| Net sales |
$ | 67,396 | $ | 46,712 | ||||
| Cost of sales |
39,123 | 27,788 | ||||||
| Gross profit |
28,273 | 18,924 | ||||||
| Operating expenses |
19,086 | 15,122 | ||||||
| Operating income |
9,187 | 3,802 | ||||||
| Interest expense |
806 | 807 | ||||||
| Interest capitalized |
(58 | ) | (10 | ) | ||||
| Extinguishment of debt |
546 | — | ||||||
| Income before income tax |
7,893 | 3,005 | ||||||
| Income tax expense |
2,881 | 1,178 | ||||||
| Net income |
$ | 5,012 | $ | 1,827 | ||||
| Earnings per common share—basic |
$ | .18 | $ | .07 | ||||
| Earnings per common share—assuming dilution |
$ | .18 | $ | .07 | ||||
| Weighted average shares outstanding—basic |
27,596 | 27,346 | ||||||
| Weighted average shares outstanding—assuming dilution |
27,851 | 27,623 | ||||||
AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands – except share amounts)
| Assets | Mar. 31, 2011 |
Dec. 31, 2010 |
||||||
| (Unaudited) | (Note) | |||||||
| Current assets: |
||||||||
| Cash |
$ | 1,274 | $ | 1,158 | ||||
| Receivables: |
||||||||
| Trade, net of allowance for doubtful accounts of $456 and $447, respectively |
63,671 | 33,833 | ||||||
| Other |
325 | 263 | ||||||
| 63,996 | 34,096 | |||||||
| Inventories |
77,297 | 74,054 | ||||||
| Prepaid expenses |
3,371 | 2,591 | ||||||
| Income taxes receivable |
— | 6,715 | ||||||
| Total current assets |
145,938 | 118,614 | ||||||
| Property, plant and equipment, net |
39,706 | 40,541 | ||||||
| Intangible assets |
120,560 | 115,249 | ||||||
| Other assets |
5,731 | 5,775 | ||||||
| $ | 311,935 | $ | 280,179 | |||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current liabilities: |
||||||||
| Current installments of long-term debt |
$ | 14,636 | $ | 8,429 | ||||
| Current installment of other liabilities |
2,040 | — | ||||||
| Accounts payable |
21,910 | 13,961 | ||||||
| Deferred Revenue |
35 | 5,568 | ||||||
| Accrued program costs |
20,621 | 16,976 | ||||||
| Accrued expenses and other payables |
4,826 | 4,634 | ||||||
| Income taxes payable |
1,418 | — | ||||||
| Total current liabilities |
65,486 | 49,568 | ||||||
| Long-term debt, excluding current installments |
58,428 | 53,710 | ||||||
| Other Long-term Liabilities |
5,895 | 3 | ||||||
| Deferred income taxes |
10,461 | 10,461 | ||||||
| Total liabilities |
140,270 | 113,742 | ||||||
| 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 29,803,127 shares at March 31, 2011 and 29,735,928 shares at December 31, 2010 |
2,980 | 2,974 | ||||||
| Additional paid-in capital |
44,470 | 43,403 | ||||||
| Accumulated other comprehensive loss |
(457 | ) | (448 | ) | ||||
| Retained earnings |
127,825 | 123,661 | ||||||
| 174,818 | 169,590 | |||||||
| Less treasury stock, at cost, 2,260,996 shares at March 31, 2011 and at December 31, 2010 |
(3,153 | ) | (3,153 | ) | ||||
| Total stockholders’ equity |
171,665 | 166,437 | ||||||
| $ | 311,935 | $ | 280,179 | |||||
Note: The balance sheet at December 31, 2010 has been derived from the audited financial statements at that date.
AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
For The Three Months Ended March 31, 2011 and 2010
(Unaudited)
| Increase (decrease) in cash |
2011 | 2010 | ||||||
| Cash flows from operating activities: |
||||||||
| Net income |
$ | 5,012 | $ | 1,827 | ||||
| Adjustments to reconcile net income to net cash used in operating activities: |
||||||||
| Depreciation and amortization of fixed and intangible assets |
3,251 | 2,738 | ||||||
| Amortization of long term assets |
1,253 | 788 | ||||||
| Amortization of discounted liabilities |
388 | — | ||||||
| Stock-based compensation |
523 | 202 | ||||||
| Changes in assets and liabilities associated with operations: |
||||||||
| Increase in net receivables |
(29,900 | ) | (12,454 | ) | ||||
| Increase in inventories |
(3,243 | ) | (1,827 | ) | ||||
| Increase in prepaid expenses and other assets |
(1,988 | ) | (1,622 | ) | ||||
| Decrease in income tax receivable/payable, net |
8,133 | 61 | ||||||
| Increase in accounts payable |
7,703 | 6,556 | ||||||
| Decrease in deferred revenues |
(5,533 | ) | — | |||||
| Increase (decrease) in other current liabilities |
3,896 | (10,696 | ) | |||||
| Net cash used in operating activities |
(10,505 | ) | (14,427 | ) | ||||
| Cash flows from investing activities: |
||||||||
| Capital expenditures |
(910 | ) | (1,868 | ) | ||||
| Net cash used in investing activities |
(910 | ) | (1,868 | ) | ||||
| Cash flows from financing activities: |
||||||||
| Net (repayments) borrowings under line of credit agreement |
(7,300 | ) | 18,900 | |||||
| Principal payments on long-term debt |
(2,004 | ) | (2,027 | ) | ||||
| Borrowings on long term debt |
20,063 | — | ||||||
| Decrease in other notes payable |
— | (21 | ) | |||||
| Proceeds from the issuance of common stock (sale of stock under ESPP and exercise of stock options) |
550 | 277 | ||||||
| Net cash provided by financing activities |
11,309 | 17,129 | ||||||
| Net (decrease) increase in cash |
(106 | ) | 834 | |||||
| Cash and cash equivalents at beginning of year |
1,158 | 383 | ||||||
| Effect of exchange rate changes on cash |
222 | 303 | ||||||
| Cash and cash equivalents as of March 31 |
$ | 1,274 | $ | 1,520 | ||||