American Vanguard Corporation (NYSE:AVD) today announced financial results for the fourth quarter and full year ended December 31, 2014.
Fiscal 2014 Fourth Quarter Financial Highlights – versus Fiscal 2013 Fourth Quarter:
- Net sales were $77.6 million in Q4 2014 compared to $75.5 million in Q4 2013.
- Net income was $1.8 million in Q4 2014 compared to $0.3 million in Q4 2013.
- Earnings per diluted share were $0.06 in Q4 2014 versus $0.01 in Q4 2013.
Fiscal 2014 Financial Highlights – versus Fiscal 2013:
- Net sales were $298.6 million in FY 2014 compared to $381.0 million in FY 2013.
- Net income was $4.8 million in FY 2014 compared to $34.4 million in FY 2013.
- Earnings per diluted share were $0.17 in FY 2014 versus $1.19 in FY 2013.
Eric Wintemute, Chairman and CEO of American Vanguard, stated: “Our performance in 2014 was significantly influenced by reduced procurement of our corn products by the Midwest distribution channel. Persistent rainfall during the spring of 2013 led to substantial unplanted acres, significant amounts of unapplied crop protection inputs and a build-up of unused inventories stockpiled at distributors, retailers and growers. Understandably, these large carryover inventories prompted a sharp reduction in restocking orders during 2014, as excess supplies were worked down. Reduced sales of our corn products were the primary drivers of our 2014 revenue decline, offsetting the stability and modest growth of our sales in other crop segments.”
Mr. Wintemute continued: “The prospects for 2015 planting inputs remain uncertain, as lower corn commodity prices and lower corn grower profitability may lead to cautious purchasing in the Midwest. However, the level of inventory of our corn products in the distribution channel has substantially normalized and as a result, more typical procurement patterns may resume in 2015. While such a recovery could be impacted by near-term commodity prices and crop rotation decisions on the farm, we expect demand for our yield enhancing corn products to continue to grow in the long term.”
Mr. Wintemute concluded: “During recent years of outstanding earnings and revenue growth, American Vanguard expanded its infrastructure. In light of current market conditions, however, management has taken significant steps to streamline manufacturing costs and reduce operating expenses through workforce reductions, compensation adjustments and vendor contract renegotiations. These measures will enable us to attain greater operating efficiency while continuing to make progress on product innovation, equipment systems development and international expansion. Also, we continue to strengthen our balance sheet through tightened working capital control, particularly with regard to inventory.”
Conference Call
Eric Wintemute, Chairman & CEO, Bob Trogele, EVP & COO, 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, February 26, 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 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 | ||||||||||||
Years ended December 31, 2014, 2013 and 2012 | ||||||||||||
(In thousands, except per share data) | ||||||||||||
| 2014 | 2013 | 2012 | ||||||||||
| Net sales | $ | 298,634 | $ | 381,021 | $ | 366,190 | ||||||
| Cost of sales | 184,138 | 209,674 | 205,065 | |||||||||
| Gross profit | 114,496 | 171,347 | 161,125 | |||||||||
| Operating expenses | 107,786 | 115,612 | 101,802 | |||||||||
| Operating income | 6,710 | 55,735 | 59,323 | |||||||||
| Interest expense | 3,172 | 2,176 | 2,872 | |||||||||
| Interest income | (19 | ) | (1 | ) | (1 | ) | ||||||
| Interest capitalized | (87 | ) | (274 | ) | (400 | ) | ||||||
| Income before provision for income taxes and loss on equity investment | 3,644 | 53,834 | 56,852 | |||||||||
| Income taxes (benefit) expense | (451 | ) | 18,916 | 20,026 | ||||||||
| Income before loss on equity investment | 4,095 | 34,918 | 36,826 | |||||||||
| Less net loss from equity method investment | (29 | ) | (986 | ) | — | |||||||
| Net income | 4,066 | 33,932 | 36,826 | |||||||||
| Add back net loss attributable to non-controlling interest | 775 | 517 | 41 | |||||||||
| Net income attributable to American Vanguard | $ | 4,841 | $ | 34,449 | $ | 36,867 | ||||||
| Change in fair value of interest rate swaps | 340 | 388 | 158 | |||||||||
| Foreign currency translation adjustment | (1,262 | ) | 326 | 330 | ||||||||
| Comprehensive income | $ | 3,919 | $ | 35,163 | $ | 37,355 | ||||||
| Earnings per common share—basic | $ | .17 | $ | 1.22 | $ | 1.32 | ||||||
| Earnings per common share—assuming dilution | $ | .17 | $ | 1.19 | $ | 1.28 | ||||||
| Weighted average shares outstanding—basic | 28,436 | 28,301 | 27,914 | |||||||||
| Weighted average shares outstanding—assuming dilution | 28,912 | 28,899 | 28,756 | |||||||||
AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES | ||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
December 31, 2014 and 2013 | ||||||||
(In thousands, except share data) | ||||||||
| 2014 | 2013 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 4,885 | $ | 6,680 | ||||
| Receivables: | ||||||||
| Trade, net of allowance for doubtful accounts of $166 and $392, respectively | 86,027 | 74,060 | ||||||
| Other | 2,396 | 892 | ||||||
| 88,423 | 74,952 | |||||||
| Inventories | 165,631 | 139,830 | ||||||
| Prepaid expenses | 13,415 | 11,435 | ||||||
| Income taxes receivable | 5,964 | 10,088 | ||||||
| Deferred income tax assets | 8,731 | 6,521 | ||||||
| Total current assets | 287,049 | 249,506 | ||||||
| Property, plant and equipment, net | 50,026 | 52,468 | ||||||
| Intangible assets, net of applicable amortization | 100,211 | 107,007 | ||||||
| Other assets | 35,885 | 38,462 | ||||||
| $ | 473,171 | $ | 447,443 | |||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current liabilities: | ||||||||
| Current installments of other notes payable | $ | 71 | $ | 69 | ||||
| Current installments of other liabilities | 1,357 | 2,132 | ||||||
| Accounts payable | 20,411 | 40,702 | ||||||
| Deferred revenue | 898 | 3,788 | ||||||
| Accrued program costs | 52,546 | 53,630 | ||||||
| Accrued expenses and other payables | 5,962 | 10,178 | ||||||
| Total current liabilities | 81,245 | 110,499 | ||||||
| Long-term debt and other notes payable, excluding current installments | 99,455 | 51,676 | ||||||
| Other liabilities, excluding current installments | 3,309 | 4,143 | ||||||
| Deferred income tax liabilities | 28,159 | 23,330 | ||||||
| Total liabilities | 212,168 | 189,648 | ||||||
| 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 31,550,477 | 3,156 | 3,109 | ||||||
| Additional paid-in capital | 66,232 | 60,160 | ||||||
| Accumulated other comprehensive loss | (1,970 | ) | (1,048 | ) | ||||
| Retained earnings | 202,488 | 202,470 | ||||||
| 269,906 | 264,691 | |||||||
| Less treasury stock at cost, 2,450,634 shares in 2014 and 2,380,634 shares in 2013 | (8,269 | ) | (6,738 | ) | ||||
| American Vanguard Corporation stockholders’ equity | 261,637 | 257,953 | ||||||
| Non-controlling interest | (634 | ) | (158 | ) | ||||
| Total stockholders’ equity | 261,003 | 257,795 | ||||||
| $ | 473,171 | $ | 447,443 | |||||
AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES | ||||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||
Years ended December 31, 2014, 2013 and 2012 | ||||||||||||
(In thousands) | ||||||||||||
| 2014 | 2013 | 2012 | ||||||||||
| Increase cash | ||||||||||||
| Cash flows from operating activities: | ||||||||||||
| Net income | $ | 4,066 | $ | 33,932 | $ | 36,826 | ||||||
Adjustments to reconcile net income to net cash (used in) provided
by | ||||||||||||
| Depreciation and amortization of fixed and intangible assets | 16,332 | 14,845 | 13,487 | |||||||||
| Amortization of other long term assets | 5,811 | 4,598 | 2,925 | |||||||||
| Amortization of discounted liabilities | 324 | 174 | 818 | |||||||||
| Stock-based compensation | 4,153 | 3,819 | 2,950 | |||||||||
| Tax benefit from exercise of stock options | (300 | ) | (440 | ) | (621 | ) | ||||||
| Increase (decrease) in deferred income taxes | 2,619 | 2,523 | (886 | ) | ||||||||
| Operating loss from equity method investment | 983 | 986 | — | |||||||||
| Gain from dilution of equity method investment | (954 | ) | — | — | ||||||||
| Changes in assets and liabilities associated with operations: | ||||||||||||
| (Increase) decrease in net receivables | (13,471 | ) | 2,351 | (7,505 | ) | |||||||
| Increase in inventories | (25,801 | ) | (51,879 | ) | (16,883 | ) | ||||||
| Decrease (increase) in income tax receivable/payable, net | 4,424 | (10,961 | ) | 2,137 | ||||||||
| Increase in prepaid expenses and other assets | (4,743 | ) | (19,733 | ) | (23,725 | ) | ||||||
| (Decrease) increase in accounts payable | (19,951 | ) | 8,252 | 9,781 | ||||||||
| (Decrease) increase in deferred revenue | (2,890 | ) | (16,639 | ) | 12,856 | |||||||
| (Decrease) increase in other payables and accrued expenses | (4,697 | ) | 21,958 | 8,264 | ||||||||
| Net cash (used in) provided by operating activities | (34,095 | ) | (6,214 | ) | 40,424 | |||||||
| Cash flows from investing activities: | ||||||||||||
| Capital expenditures | (7,180 | ) | (15,260 | ) | (17,628 | ) | ||||||
| Investment | (500 | ) | (3,687 | ) | — | |||||||
| Acquisitions of intangible assets | — | — | (3,473 | ) | ||||||||
| Net cash used in investing activities | (7,680 | ) | (18,947 | ) | (21,101 | ) | ||||||
| Cash flows from financing activities: | ||||||||||||
| Net borrowings under line of credit agreement | 47,850 | 51,550 | — | |||||||||
| Payments on long-term debt | — | (46,000 | ) | (8,443 | ) | |||||||
| Payment on other long-term liabilities | (1,756 | ) | (1,831 | ) | (6,035 | ) | ||||||
| Tax benefit from exercise of stock options | 300 | 440 | 621 | |||||||||
| Decrease in other notes payable | — | (6,154 | ) | (51 | ) | |||||||
| Repurchases of common stock | (1,531 | ) | (1,934 | ) | — | |||||||
Proceeds from the issuance of common stock (sale of stock under
ESPP and | 1,666 | 1,610 | 3,227 | |||||||||
| Non-controlling interest contribution | 299 | — | 400 | |||||||||
| Payment of cash dividends | (5,672 | ) | (4,804 | ) | (6,148 | ) | ||||||
| Net cash provided by (used in) financing activities | 41,156 | (7,123 | ) | (16,429 | ) | |||||||
| Net (decrease) increase in cash | (619 | ) | (32,284 | ) | 2,894 | |||||||
| Effect of exchange rate changes on cash | (1,176 | ) | 488 | 497 | ||||||||
| Cash and cash equivalents at beginning of year | 6,680 | 38,476 | 35,085 | |||||||||
| Cash and cash equivalents at end of year | $ | 4,885 | $ | 6,680 | $ | 38,476 | ||||||
| Supplemental cash flow information: | ||||||||||||
| Cash paid (received) during the year for: | ||||||||||||
| Interest | $ | 2,298 | $ | 1,777 | $ | 1,891 | ||||||
| Income taxes | $ | (8,206 | ) | $ | 25,271 | $ | 18,048 | |||||
Contacts:
American Vanguard Corporation
William A. Kuser,
949-260-1200
Director of Investor Relations
williamk@amvac-chemical.com
or
Investor
Representative
The Equity Group Inc.
Lena Cati, 212-836-9611
Lcati@equityny.com
www.theequitygroup.com
