Attached files
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| 8-K - 8-K - AMERICAN VANGUARD CORP | d26146d8k.htm |
Exhibit 99.1
FOR IMMEDIATE RELEASE
AMERICAN VANGUARD REPORTS SECOND QUARTER & MID-YEAR 2015 RESULTS
Newport Beach, CA – July 30, 2015 – American Vanguard Corporation (NYSE:AVD), today announced financial results for the second quarter and six-month period ended June 30, 2015.
Fiscal 2015 Second Quarter Financial Highlights – versus Fiscal 2014 Second Quarter Results
| • | Net sales declined from $68.3 million to $66.5 million |
| • | Net income increased from $0.1 million to $0.8 million |
| • | Earnings per diluted share increased from $0.01 to $0.03 |
Fiscal 2015 Six Month Financial Highlights – versus Fiscal 2014 Six Month Results
| • | Net sales declined from $149.4 million to $133.1 million |
| • | Net income declined from $2.3 million to $0.8 million |
| • | Earnings per diluted share declined from $0.08 to $0.03 |
Note: Further details are available in the financial schedules attached to this press release
Eric Wintemute, Chairman and CEO of American Vanguard, stated: “Our quarterly performance was mixed, with lower sales but higher net income than the comparable period last year. While sales of our insecticides declined, we saw year-over-year quarterly revenue gains in AMVAC’s herbicides, fumigants, growth regulators, toll manufacturing and International business. Further, increased manufacturing utilization, improved cost efficiency and lower operating expenses enabled us to improve our profitability.”
Mr. Wintemute continued: “I am pleased to report that during the second quarter, we acquired two product lines - Nemacur and Hyvar/Krovar - that will enhance our international business and did so without significantly increasing our debt position. We were able to accomplish this through closely managing working capital to optimize cash generation. We intend to continue this kind of fiscal control.”
Mr. Wintemute concluded: “During the second half of the year, our focus will be on multiple markets, both domestic and international, including potatoes, sugar beets, fruits and vegetables and vector control. With respect to corn, in the upcoming 2016 planting season, we look forward to commercializing our new high-concentration granular soil insecticides, further strengthening our industry-leading portfolio of granular products for prescription planting.”
Conference Call
Eric Wintemute, Chairman & CEO, David Johnson, VP & CFO, and Bob Trogele, EVP & COO of AMVAC Chemical will conduct a conference call focusing on the financial results at 4:30 pm ET / 1:30 pm PT on Thursday, July 30, 2015. 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 as well as the S&P Small Cap 600 Index. To learn more about American Vanguard, please reference the Company’s web site at www.amvac-chemical.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.
| Company Contact: | Investor Representative | |
| American Vanguard Corporation | The Equity Group Inc. | |
| William A. Kuser, Director of Investor Relations | www.theequitygroup.com | |
| (949) 260-1200 | Lena Cati | |
| williamk@amvac-chemical.com |
Lcati@equityny.com (212) 836-9611 |
AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(In thousands, except per share data)
(Unaudited)
| For the three months ended June 30 |
For the six months ended June 30 |
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| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| Net sales |
$ | 66,523 | $ | 68,313 | $ | 133,088 | $ | 149,408 | ||||||||
| Cost of sales |
41,402 | 42,253 | 83,317 | 94,443 | ||||||||||||
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| Gross profit |
25,121 | 26,060 | 49,771 | 54,965 | ||||||||||||
| Operating expenses |
23,922 | 25,337 | 48,266 | 50,536 | ||||||||||||
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| Operating income |
1,199 | 723 | 1,505 | 4,429 | ||||||||||||
| Interest expense |
710 | 857 | 1,390 | 1,488 | ||||||||||||
| Interest capitalized |
(48 | ) | (13 | ) | (87 | ) | (31 | ) | ||||||||
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| Income (loss) before provision for income taxes and loss on equity investment |
537 | (121 | ) | 202 | 2,972 | |||||||||||
| Income taxes (benefit) expense |
(393 | ) | (160 | ) | (685 | ) | 856 | |||||||||
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| Income before loss on equity investment |
930 | 39 | 887 | 2,116 | ||||||||||||
| Less net loss from equity method investment |
(191 | ) | (68 | ) | (191 | ) | (140 | ) | ||||||||
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| Net income (loss) |
739 | (29 | ) | 696 | 1,976 | |||||||||||
| Add back net loss attributable to non-controlling interest |
42 | 174 | 136 | 328 | ||||||||||||
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| Net income attributable to American Vanguard |
781 | 145 | 832 | 2,304 | ||||||||||||
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| Change in fair value of interest rate swaps |
— | 145 | — | 281 | ||||||||||||
| Foreign currency translation adjustment |
(323 | ) | 92 | (571 | ) | 143 | ||||||||||
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| Comprehensive income |
$ | 458 | $ | 382 | $ | 261 | $ | 2,728 | ||||||||
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| Earnings per common share—basic |
$ | .03 | $ | .01 | $ | .03 | $ | .08 | ||||||||
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| Earnings per common share—assuming dilution |
$ | .03 | $ | .01 | $ | .03 | $ | .08 | ||||||||
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| Weighted average shares outstanding—basic |
28,676 | 28,408 | 28,602 | 28,404 | ||||||||||||
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| Weighted average shares outstanding—assuming dilution |
29,202 | 28,795 | 29,103 | 28,877 | ||||||||||||
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AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
(Unaudited)
ASSETS
| June 30, 2015 |
Dec. 31, 2014 |
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| Current assets: |
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| Cash and cash equivalents |
$ | 5,089 | $ | 4,885 | ||||
| Receivables: |
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| Trade, net of allowance for doubtful accounts of $123 and $166, respectively |
74,698 | 86,027 | ||||||
| Other |
4,750 | 2,396 | ||||||
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| Total receivables |
79,448 | 88,423 | ||||||
| Inventories |
165,234 | 165,631 | ||||||
| Prepaid expenses |
13,133 | 13,415 | ||||||
| Income taxes receivable |
6,849 | 5,964 | ||||||
| Deferred income tax assets |
8,731 | 8,731 | ||||||
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| Total current assets |
278,484 | 287,049 | ||||||
| Property, plant and equipment, net |
48,975 | 50,026 | ||||||
| Intangible assets, net of applicable amortization |
133,129 | 100,211 | ||||||
| Other assets |
32,415 | 35,035 | ||||||
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| $ | 493,003 | $ | 472,321 | |||||
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| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: |
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| Current installments of other notes payable |
$ | 10,072 | $ | 71 | ||||
| Current installments of other liabilities |
2,098 | 1,357 | ||||||
| Accounts payable |
20,019 | 20,411 | ||||||
| Deferred revenue |
4,509 | 898 | ||||||
| Accrued program costs |
69,603 | 52,546 | ||||||
| Accrued expenses and other payables |
5,052 | 5,962 | ||||||
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| Total current liabilities |
111,353 | 81,245 | ||||||
| Long-term debt and other notes payable, excluding current installments |
87,614 | 98,605 | ||||||
| Other liabilities, excluding current installments |
2,994 | 3,309 | ||||||
| Deferred income tax liabilities |
28,159 | 28,159 | ||||||
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| Total liabilities |
230,120 | 211,318 | ||||||
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| Commitments and contingent liabilities |
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| Stockholders’ equity: |
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| 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 31,617,282 shares at June 30, 2015 and 31,550,477 shares at December 31, 2014 |
3,162 | 3,156 | ||||||
| Additional paid-in capital |
67,714 | 66,232 | ||||||
| Accumulated other comprehensive loss |
(2,541 | ) | (1,970 | ) | ||||
| Retained earnings |
202,748 | 202,488 | ||||||
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| 271,083 | 269,906 | |||||||
| Less treasury stock, at cost, 2,450,634 shares at June 30, 2015 and December 31, 2014 |
(8,269 | ) | (8,269 | ) | ||||
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| American Vanguard Corporation stockholders’ equity |
262,814 | 261,637 | ||||||
| Non-controlling interest |
69 | (634 | ) | |||||
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| Total stockholders’ equity |
262,883 | 261,003 | ||||||
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| $ | 493,003 | $ | 472,321 | |||||
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AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
For The Six Months Ended June 30, 2015 and 2014
(Unaudited)
| Increase (decrease) in cash |
2015 | 2014 | ||||||
| Cash flows from operating activities: |
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| Net income |
$ | 696 | $ | 1,976 | ||||
| Adjustments to reconcile net income to net cash provided by (used in) operating activities: |
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| Depreciation and amortization of fixed and intangible assets |
7,864 | 7,996 | ||||||
| Amortization of other long term assets |
2,734 | 3,027 | ||||||
| Amortization of discounted liabilities |
154 | 175 | ||||||
| Stock-based compensation |
2,485 | 1,806 | ||||||
| Tax benefit from exercise of stock options |
(7 | ) | (262 | ) | ||||
| Operating loss from equity method investment |
191 | 396 | ||||||
| Gain from dilution of equity method investment |
— | (256 | ) | |||||
| Changes in assets and liabilities associated with operations: |
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| Decrease (increase) in net receivables |
8,975 | (1,025 | ) | |||||
| Decrease (increase) in inventories |
397 | (35,410 | ) | |||||
| Decrease (increase) in prepaid expenses and other assets |
143 | (5,049 | ) | |||||
| (Increase) decrease in income tax receivable/payable, net |
(878 | ) | 120 | |||||
| Decrease in accounts payable |
(392 | ) | (16,521 | ) | ||||
| Increase (decrease) in deferred revenue |
3,611 | (2,276 | ) | |||||
| Increase in other payables and accrued expenses |
17,851 | 16,264 | ||||||
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| Net cash provided by (used in) operating activities |
43,824 | (29,039 | ) | |||||
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| Cash flows from investing activities: |
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| Capital expenditures |
(3,480 | ) | (3,954 | ) | ||||
| Investment |
(125 | ) | — | |||||
| Acquisitions of product lines and other intangibles assets |
(36,435 | ) | — | |||||
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| Net cash used in investing activities |
(40,040 | ) | (3,954 | ) | ||||
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| Cash flows from financing activities: |
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| Net (payments) borrowings under line of credit agreement |
(11,120 | ) | 34,430 | |||||
| Increase in other notes payable |
10,000 | — | ||||||
| Payments on other long-term liabilities |
(899 | ) | (1,109 | ) | ||||
| Tax benefit from exercise of stock options |
7 | 262 | ||||||
| Repurchases of common stock |
— | (1,531 | ) | |||||
| Payment of cash dividends |
(1,141 | ) | (2,836 | ) | ||||
| Net (payments) proceeds from the issuance of common stock (sale of stock under ESPP and exercise of stock options) |
(40 | ) | 1,196 | |||||
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| Net cash (used in) provided by financing activities |
(3,193 | ) | 30,412 | |||||
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| Net increase (decrease) in cash and cash equivalents |
591 | (2,581 | ) | |||||
| Cash and cash equivalents at beginning of period |
4,885 | 6,680 | ||||||
| Effect of exchange rate changes on cash |
(387 | ) | 90 | |||||
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| Cash and cash equivalents at end of period |
$ | 5,089 | $ | 4,189 | ||||
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