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EX-31.1 - EX-31.1 - AMERICAN VANGUARD CORPavd-ex311_7.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2017

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM                      TO                      

Commission file number 001-13795

 

AMERICAN VANGUARD CORPORATION

 

 

Delaware

95-2588080

(State or other jurisdiction of

Incorporation or organization)

(I.R.S. Employer

Identification Number)

 

 

4695 MacArthur Court, Newport Beach, California

92660

(Address of principal executive offices)

(Zip Code)

(949) 260-1200

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

 

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes      No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large Accelerated Filer

 

Accelerated Filer

Non-Accelerated Filer

(Do not check if a small reporting company)

Smaller reporting company

Emerging growth company

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Common Stock, $.10 Par Value—29,783,825 shares as of July 25, 2017.

 

 

 

 

 


 

AMERICAN VANGUARD CORPORATION

INDEX

 

 

 

 

Page Number

PART I—FINANCIAL INFORMATION

 

 

 

 

 

 

Item 1.

Financial Statements (unaudited)

 

 

 

 

 

 

 

Condensed Consolidated Statements of Operations for the three months and six months ended June 30, 2017 and 2016

 

3

 

 

 

 

 

Condensed Consolidated Statements of Comprehensive Income for the three months and six months ended June 30, 2017 and 2016

 

4

 

 

 

 

 

Condensed Consolidated Balance Sheets as of June 30, 2017 and December 31, 2016

 

5

 

 

 

 

 

Condensed Consolidated Statement of Stockholders’ Equity for the three months and six months ended June 30, 2017

 

6

 

 

 

 

 

Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2017 and 2016

 

7

 

 

 

 

 

Notes to Condensed Consolidated Financial Statements

 

8

 

 

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

19

 

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

 

28

 

 

 

 

Item 4.

Controls and Procedures

 

28

 

 

 

PART II—OTHER INFORMATION

 

28

 

 

 

 

Item 1.

Legal Proceedings

 

29

 

 

 

 

Item 6.

Exhibits

 

30

 

 

 

SIGNATURES

 

31

 

 

2


 

PART I. FINANCIAL INFORMATION

Item 1.

FINANCIAL STATEMENTS

 

AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

 

 

 

For the Three Months

Ended June 30,

 

 

For the Six Months Ended June 30,

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

Net sales

 

$

77,905

 

 

$

72,724

 

 

$

148,578

 

 

$

142,198

 

Cost of sales

 

 

43,570

 

 

 

41,329

 

 

 

84,159

 

 

 

83,300

 

Gross profit

 

 

34,335

 

 

 

31,395

 

 

 

64,419

 

 

 

58,898

 

Operating expenses

 

 

27,654

 

 

 

26,270

 

 

 

52,605

 

 

 

49,143

 

Operating income

 

 

6,681

 

 

 

5,125

 

 

 

11,814

 

 

 

9,755

 

Interest expense, net

 

 

400

 

 

 

462

 

 

 

698

 

 

 

1,003

 

Income before provision for income taxes and loss on equity method investment

 

 

6,281

 

 

 

4,663

 

 

 

11,116

 

 

 

8,752

 

Income tax expense

 

 

1,681

 

 

 

1,234

 

 

 

3,061

 

 

 

2,294

 

Income before loss on equity method investment

 

 

4,600

 

 

 

3,429

 

 

 

8,055

 

 

 

6,458

 

Loss from equity method investment

 

 

69

 

 

 

47

 

 

 

111

 

 

 

129

 

Net income

 

 

4,531

 

 

 

3,382

 

 

 

7,944

 

 

 

6,329

 

Income attributable to non-controlling interest

 

 

(227

)

 

 

(136

)

 

 

(188

)

 

 

(289

)

Net income attributable to American Vanguard

 

$

4,304

 

 

$

3,246

 

 

$

7,756

 

 

$

6,040

 

Earnings per common share—basic

 

$

.15

 

 

$

.11

 

 

$

.27

 

 

$

.21

 

Earnings per common share—assuming dilution

 

$

.15

 

 

$

.11

 

 

$

.26

 

 

$

.21

 

Weighted average shares outstanding—basic

 

 

29,050

 

 

 

28,893

 

 

 

28,999

 

 

 

28,851

 

Weighted average shares outstanding—assuming dilution

 

 

29,605

 

 

 

29,377

 

 

 

29,561

 

 

 

29,342

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See notes to the condensed consolidated financial statements.

 

3


 

AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(Unaudited)

 

 

 

For the Three Months

Ended June 30,

 

 

For the Six Months Ended June 30,

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

Net income

 

$

4,531

 

 

$

3,382

 

 

$

7,944

 

 

$

6,329

 

Comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustment

 

 

280

 

 

 

(537

)

 

 

1,037

 

 

 

(452

)

Comprehensive income

 

 

4,811

 

 

 

2,845

 

 

 

8,981

 

 

 

5,877

 

Income attributable to non-controlling interest

 

 

(227

)

 

 

(136

)

 

 

(188

)

 

 

(289

)

Comprehensive income attributable to American Vanguard

 

$

4,584

 

 

$

2,709

 

 

$

8,793

 

 

$

5,588

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See notes to the condensed consolidated financial statements.

 

 

 

4


 

AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

(Unaudited)

 

ASSETS

 

 

 

June 30,

2017

 

 

Dec. 31,

2016

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

7,597

 

 

$

7,869

 

Receivables:

 

 

 

 

 

 

 

 

Trade, net of allowance for doubtful accounts of $41 and $42, respectively

 

 

63,291

 

 

 

83,777

 

Other

 

 

3,912

 

 

 

3,429

 

Total receivables, net

 

 

67,203

 

 

 

87,206

 

Inventories

 

 

126,865

 

 

 

120,576

 

Prepaid expenses

 

 

12,609

 

 

 

11,424

 

Total current assets

 

 

214,274

 

 

 

227,075

 

Property, plant and equipment, net

 

 

50,383

 

 

 

50,295

 

Intangible assets, net of applicable amortization

 

 

130,806

 

 

 

121,433

 

Other assets

 

 

30,135

 

 

 

31,153

 

 

 

$

425,598

 

 

$

429,956

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

Current liabilities:

 

 

 

 

 

 

 

 

Current installments of other liabilities

 

$

66

 

 

$

26

 

Accounts payable

 

 

25,560

 

 

 

24,358

 

Deferred revenue

 

 

1,722

 

 

 

3,848

 

Accrued program costs

 

 

61,749

 

 

 

42,930

 

Accrued expenses and other payables

 

 

7,988

 

 

 

12,072

 

Income taxes payable

 

 

1,063

 

 

 

13,840

 

Total current liabilities

 

 

98,148

 

 

 

97,074

 

Long-term debt, net of deferred loan fees

 

 

26,348

 

 

 

40,951

 

Other liabilities, excluding current installments

 

 

2,815

 

 

 

2,868

 

Deferred income tax liabilities

 

 

6,713

 

 

 

6,706

 

Total liabilities

 

 

134,024

 

 

 

147,599

 

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

   32,212,124 shares at June 30, 2017 and 31,819,695 shares at December 31, 2016

 

 

3,222

 

 

 

3,183

 

Additional paid-in capital

 

 

72,768

 

 

 

71,699

 

Accumulated other comprehensive loss

 

 

(3,814

)

 

 

(4,851

)

Retained earnings

 

 

227,312

 

 

 

220,428

 

 

 

 

299,488

 

 

 

290,459

 

Less treasury stock at cost, 2,450,634 shares at June 30, 2017 and

   December 31, 2016

 

 

(8,269

)

 

 

(8,269

)

American Vanguard Corporation stockholders’ equity

 

 

291,219

 

 

 

282,190

 

Non-controlling interest

 

 

355

 

 

 

167

 

Total stockholders’ equity

 

 

291,574

 

 

 

282,357

 

 

 

$

425,598

 

 

$

429,956

 

 

See notes to the condensed consolidated financial statements.

 

 

 

 

 

5


 

 

AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

For The Three and Six Months Ended June 30, 2017

(In thousands, except share data)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

Additional

 

 

Accumulated Other

 

 

 

 

 

 

Treasury Stock

 

 

 

 

 

 

Non-

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Paid-in

Capital

 

 

Comprehensive

Loss

 

 

Retained

Earnings

 

 

Shares

 

 

Amount

 

 

AVD

Total

 

 

Controlling Interest

 

 

Total

 

Balance, December 31, 2016

 

 

31,819,695

 

 

$

3,183

 

 

$

71,699

 

 

$

(4,851

)

 

$

220,428

 

 

 

2,450,634

 

 

$

(8,269

)

 

$

282,190

 

 

$

167

 

 

$

282,357

 

Stocks issued under ESPP

 

 

16,349

 

 

 

2

 

 

 

248

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

250

 

 

 

 

 

 

250

 

Cash dividends on common stock ($0.015

   per share)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(435

)

 

 

 

 

 

 

 

 

(435

)

 

 

 

 

 

(435

)

Foreign currency translation adjustment, net

 

 

 

 

 

 

 

 

 

 

 

757

 

 

 

 

 

 

 

 

 

 

 

 

757

 

 

 

 

 

 

757

 

Stock based compensation

 

 

 

 

 

 

 

 

1,080

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,080

 

 

 

 

 

 

1,080

 

Stock options exercised; grants and vesting

   of restricted stock units

 

 

377,916

 

 

 

37

 

 

 

16

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

53

 

 

 

 

 

 

53

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,452

 

 

 

 

 

 

 

 

 

3,452

 

 

 

(39

)

 

 

3,413

 

Balance, March 31, 2017

 

 

32,213,960

 

 

 

3,222

 

 

 

73,043

 

 

 

(4,094

)

 

 

223,445

 

 

 

2,450,634

 

 

 

(8,269

)

 

 

287,347

 

 

 

128

 

 

 

287,475

 

Cash dividends on common stock ($0.015

   per share)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(437

)

 

 

 

 

 

 

 

 

(437

)

 

 

 

 

 

(437

)

Foreign currency translation adjustment, net

 

 

 

 

 

 

 

 

 

 

 

280

 

 

 

 

 

 

 

 

 

 

 

 

280

 

 

 

 

 

 

280

 

Stock based compensation

 

 

 

 

 

 

 

 

1,242

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,242

 

 

 

 

 

 

1,242

 

Stock options exercised; grants and vesting

   of restricted stock units

 

 

(1,836

)

 

 

 

 

 

(1,517

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,517

)

 

 

 

 

 

(1,517

)

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4,304

 

 

 

 

 

 

 

 

 

4,304

 

 

 

227

 

 

 

4,531

 

Balance, June 30, 2017

 

 

32,212,124

 

 

$

3,222

 

 

$

72,768

 

 

$

(3,814

)

 

$

227,312

 

 

 

2,450,634

 

 

$

(8,269

)

 

$

291,219

 

 

$

355

 

 

$

291,574

 

 

 

 

 

 

 

 

 

 

 

 

 

See notes to the condensed consolidated financial statements.

 

 

 

 

6


 

AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

 

 

For the Six Months Ended June 30,

 

 

 

2017

 

 

2016

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income

 

$

7,944

 

 

$

6,329

 

Adjustments to reconcile net income to net cash provided by operating

   activities:

 

 

 

 

 

 

 

 

Depreciation and amortization of fixed and intangible assets

 

 

8,094

 

 

 

8,359

 

Amortization of other long term assets

 

 

2,777

 

 

 

2,358

 

Amortization of discounted liabilities

 

 

13

 

 

 

19

 

Stock-based compensation

 

 

2,322

 

 

 

1,068

 

Excess tax benefit from exercise of stock options

 

 

 

 

 

(47

)

Increase in deferred income taxes

 

 

7

 

 

 

 

Loss from equity method investment

 

 

111

 

 

 

129

 

Changes in assets and liabilities associated with operations:

 

 

 

 

 

 

 

 

Decrease (increase) in net receivables

 

 

20,749

 

 

 

(4,156

)

Increase in inventories

 

 

(5,506

)

 

 

(14,625

)

Increase in prepaid expenses and other assets

 

 

(2,658

)

 

 

(2,661

)

(Increase) decrease in income tax receivable/payable, net

 

 

(12,752

)

 

 

1,244

 

Increase in accounts payable

 

 

579

 

 

 

9,837

 

Decrease in deferred revenue

 

 

(2,126

)

 

 

(1,932

)

Increase in program payables

 

 

18,819

 

 

 

17,956

 

(Decrease) increase in other payables and accrued expenses

 

 

(4,256

)

 

 

1,612

 

Net cash provided by operating activities

 

 

34,117

 

 

 

25,490

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Capital expenditures

 

 

(4,155

)

 

 

(1,729

)

Investment

 

 

(950

)

 

 

(3,283

)

Acquisition of product lines and other intangible assets

 

 

(13,400

)

 

 

(224

)

Net cash used in investing activities

 

 

(18,505

)

 

 

(5,236

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Payments under line of credit agreement

 

 

(59,025

)

 

 

(45,850

)

Borrowings under line of credit agreement

 

 

45,000

 

 

 

27,000

 

Payments on other long-term liabilities

 

 

(26

)

 

 

(457

)

Tax benefit from exercise of stock options

 

 

 

 

 

47

 

Net payments from the issuance of common stock (sale of stock under ESPP,

   exercise of stock options, and shares purchased for tax withholding)

 

 

(1,214

)

 

 

(195

)

Payment of cash dividends

 

 

(724

)

 

 

 

Net cash used in by financing activities

 

 

(15,989

)

 

 

(19,455

)

Net (decrease) increase in cash and cash equivalents

 

 

(377

)

 

 

799

 

Effect of exchange rate changes on cash and cash equivalents

 

 

105

 

 

 

(524

)

Cash and cash equivalents at beginning of period

 

 

7,869

 

 

 

5,524

 

Cash and cash equivalents at end of period

 

$

7,597

 

 

$

5,799

 

 

 

 

 

See notes to the condensed consolidated financial statements.

 

7


 

AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(In thousands, except share data)

(Unaudited)

 

1. The accompanying unaudited condensed consolidated financial statements of American Vanguard Corporation and Subsidiaries (“AVD”) have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by US GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation, have been included. Operating results for the six months ended June 30, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. For further information, refer to the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.

 

 

 

 

2. Property, plant and equipment at June 30, 2017 and December 31, 2016 consists of the following:

 

 

 

June 30,

2017

 

 

December 31,

2016

 

Land

 

$

2,458

 

 

$

2,458

 

Buildings and improvements

 

 

16,567

 

 

 

15,515

 

Machinery and equipment

 

 

107,278

 

 

 

102,146

 

Office furniture, fixtures and equipment

 

 

4,952

 

 

 

5,016

 

Automotive equipment

 

 

398

 

 

 

387

 

Construction in progress

 

 

1,324

 

 

 

8,047

 

Total gross value

 

 

132,977

 

 

 

133,569

 

Less accumulated depreciation

 

 

(82,594

)

 

 

(83,274

)

Total net value

 

$

50,383

 

 

$

50,295

 

 

The Company recognized depreciation expense related to property, plant and equipment of $2,129 and $2,059 for the three months ended June 30, 2017 and 2016, respectively.   During the three months ended June 30, 2017 and 2016, the Company eliminated from assets and accumulated depreciation $3,584 and $2, respectively, of fully depreciated assets.

 

The Company recognized depreciation expense related to property, plant and equipment of $4,079 and $4,313 for the six months ended June 30, 2017 and 2016, respectively.   During the six months ended June 30, 2017 and 2016, the Company eliminated from assets and accumulated depreciation $4,759 and $125, respectively, of fully depreciated assets.

Substantially all of the Company’s assets are pledged as collateral with its banks.

 

 

3. Inventories are stated at the lower of cost or market. Cost is determined using the first-in, first-out method. The components of inventories consist of the following:

 

 

 

June 30,

2017

 

 

December 31,

2016

 

Finished products

 

$

107,319

 

 

$

103,832

 

Raw materials

 

 

19,546

 

 

 

16,744

 

 

 

$

126,865

 

 

$

120,576

 

 

As of June 30, 2017, we believe our inventories are valued at lower of cost or market.

In July 2015, Financial Accounting Standards Board (“FASB”) issued Accounting Standards Codification (“ASU”) 2015-11, Inventory (Topic 330). Topic 330 currently requires an entity to measure inventory at the lower of cost or market, where market could be replacement cost, net realizable value, or net realizable value less an approximately normal profit margin. This ASU limits the scope to inventory that is measured using first-in, first-out (FIFO) or average cost and requires inventory be measured at the lower of costs or net realizable value. The new standard is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The Company adopted this new standard effective January 1, 2017.  There was no impact on this adoption.

 

 

 

8


 

4. Based on similar economic and operational characteristics, the Company’s business is aggregated into one reportable segment. Selective enterprise information is as follows:

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

Net sales:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Insecticides

 

$

39,442

 

 

$

30,912

 

 

$

77,384

 

 

$

64,018

 

Herbicides/soil fumigants/fungicides

 

 

16,045

 

 

 

21,093

 

 

 

36,066

 

 

 

45,767

 

Other, including plant growth regulators

 

 

10,096

 

 

 

6,331

 

 

 

13,488

 

 

 

9,820

 

Net sales:

 

 

65,583

 

 

 

58,336

 

 

 

126,938

 

 

 

119,605

 

Non-crop

 

 

12,322

 

 

 

14,388

 

 

 

21,640

 

 

 

22,593

 

Total net sales:

 

$

77,905

 

 

$

72,724

 

 

$

148,578

 

 

$

142,198

 

Net sales:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

US

 

$

55,760

 

 

$

51,773

 

 

$

108,004

 

 

$

101,628

 

International

 

 

22,145

 

 

 

20,951

 

 

 

40,574

 

 

 

40,570

 

Total net sales:

 

$

77,905

 

 

$

72,724

 

 

$

148,578

 

 

$

142,198

 

 

 

5. Accrued Program Costs—In accordance with FASB ASC 605, the Company classifies amounts expected to be paid to its customers as a reduction of sales revenues. The Company describes these payments as “Programs.” Programs are a critical part of doing business in the agricultural chemicals business market place. For accounting purposes, programs are recorded as a reduction in gross sales and include market pricing adjustments, volume take up or other key performance indicator driven payments made to distributors, retailers or growers, at the end of a growing season. Each quarter management compares individual sale transactions with published programs to determine what, if any, program liability has been incurred. Once this initial calculation is made for the specific quarter, sales and marketing management, along with executive and financial management, review the accumulated program balance and make assessments of whether or not customers are tracking in a manner that indicates that they will meet the requirements set out in the terms and conditions attached to each Program. If management believes that customers are falling short of or exceeding their annual goals, then periodic adjustments will be made to the accumulated accrual to properly reflect the Company’s best estimate of the liability at the balance sheet date. The majority of adjustments are made at the end of the crop season, at which time customer performance can be more fully assessed. Programs are paid out predominantly on an annual basis, usually in the final quarter of the financial year or the first quarter of the following year.  No significant changes in previous estimates were made during the three and six months ended June 30, 2017 and 2016, respectively.  

 

6. The Company has declared and paid the following cash dividends in the periods covered by this Form 10-Q:

 

Declaration Date

 

Record Date

 

Distribution Date

 

Dividend

Per Share

 

 

Total

Paid

 

June 8, 2017

 

June 30, 2017

 

July 14, 2017

 

$

0.015

 

 

$

437

 

March 7, 2017

 

March 31, 2017

 

April 14, 2017

 

$

0.015

 

 

$

435

 

December 18, 2016

 

December 23, 2016

 

January 6, 2017

 

$

0.010

 

 

$

289

 

 

 

7. ASC 260 Earnings Per Share (“EPS”) requires dual presentation of basic EPS and diluted EPS on the face of the condensed consolidated statements of operations. Basic EPS is computed as net income divided by the weighted average number of shares of common stock outstanding during the period. Diluted EPS reflects potential dilution that could occur if securities or other contracts, which, for the Company, consists of options to purchase shares of the Company’s common stock, are exercised.

The components of basic and diluted earnings per share were as follows:

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

Numerator:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to AVD

 

$

4,304

 

 

$

3,246

 

 

$

7,756

 

 

$

6,040

 

Denominator: (in thousands)