American Vanguard Corporation (NYSE:AVD), today announced financial results for the third quarter and nine-month period ended September 30, 2015.
Fiscal 2015 Third Quarter Financial Highlights – versus Fiscal 2014 Third Quarter Results
• Net sales increased from $71.6 million to $72.5 million
• Net income increased from $0.7 million to $2.8 million
• Earnings per diluted share improved from $0.03 to $0.09
Fiscal 2015 Nine Month Financial Highlights – versus Fiscal 2014 Nine Month
• Net sales declined from $221.0 million to $205.6 million
• Net income increased from $3.0 million to $3.6 million
• Earnings per diluted share improved from $0.11 to $0.12
Note: Further details are available in the financial schedules attached to this press release
Eric Wintemute, Chairman and CEO of American Vanguard, stated: “Our third quarter and nine month financial results reflect the financial benefits that have been achieved largely through management initiatives to improve profitability. While softened demand in the Ag sector continues to affect our entire industry, we have met these challenges by focusing our efforts on maintaining existing market share, growing our international business with new product acquisitions, reducing manufacturing costs and controlling operating expenses. As a result, we have succeeded in posting improved year-over-year earnings on a relatively flat revenue base.”
Mr. Wintemute concluded: “For the remainder of 2015, our top line performance will be driven largely by stable demand for our soil fumigants, market conditions in the Midwest Corn Belt, and continued integration of our 2015 international product line acquisitions. As we reduce our own inventory levels and perform annual plant maintenance, we do expect more limited manufacturing utilization during the fourth quarter. Looking forward to 2016, we should be well positioned for higher revenue and improved profitability through operational efficiency, market access and technology innovation.”
Conference Call
Eric Wintemute, Chairman & CEO and David Johnson, VP & CFO, will conduct a conference call focusing on the financial results at 4:30 pm ET / 1:30 pm PT on Monday, November 2, 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.
| 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 September 30 | For the nine months ended September 30 | |||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| Net sales | $ | 72,486 | $ | 71,635 | $ | 205,574 | $ | 221,043 | ||||||||
| Cost of sales | 41,053 | 43,342 | 124,370 | 137,785 | ||||||||||||
| Gross profit | 31,433 | 28,293 | 81,204 | 83,258 | ||||||||||||
| Operating expenses | 26,059 | 27,367 | 74,325 | 77,903 | ||||||||||||
| Operating income | 5,374 | 926 | 6,879 | 5,355 | ||||||||||||
| Interest expense | 700 | 804 | 2,090 | 2,292 | ||||||||||||
| Less interest capitalized | (62 | ) | (25 | ) | (149 | ) | (56 | ) | ||||||||
| Income before provision for income taxes and (loss) gain on equity investment | 4,736 | 147 | 4,938 | 3,119 | ||||||||||||
| Income tax expense | 1,643 | — | 958 | 856 | ||||||||||||
| Income before (loss) gain on equity investment | 3,093 | 147 | 3,980 | 2,263 | ||||||||||||
| Net (loss) gain from equity investment | (389 | ) | 461 | (580 | ) | 321 | ||||||||||
| Net income | 2,704 | 608 | 3,400 | 2,584 | ||||||||||||
| Add back net loss attributable to non-controlling interest | 68 | 124 | 204 | 452 | ||||||||||||
| Net income attributable to American Vanguard | 2,772 | 732 | 3,604 | 3,036 | ||||||||||||
| Change in fair value of interest rate swaps | — | 145 | — | 426 | ||||||||||||
| Foreign currency translation adjustment | (897 | ) | (491 | ) | (1,468 | ) | (348 | ) | ||||||||
| Comprehensive income | $ | 1,875 | $ | 386 | $ | 2,136 | $ | 3,114 | ||||||||
| Earnings per common share—basic | $ | 0.10 | $ | 0.03 | $ | 0.13 | $ | 0.11 | ||||||||
| Earnings per common share—assuming dilution | $ | 0.09 | $ | 0.03 | $ | 0.12 | $ | 0.11 | ||||||||
| Weighted average shares outstanding—basic | 28,753 | 28,466 | 28,653 | 28,422 | ||||||||||||
| Weighted average shares outstanding—assuming dilution | 29,289 | 28,797 | 29,208 | 28,888 | ||||||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
| (In thousands, except share data) | ||||||||
| (Unaudited) | ||||||||
| Sept. 30, 2015 | Dec. 31, 2014 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 5,429 | $ | 4,885 | ||||
| Receivables: | ||||||||
| Trade, net of allowance for doubtful accounts of $287 and $166, respectively | 89,723 | 86,027 | ||||||
| Other | 4,872 | 2,396 | ||||||
| Total receivables | 94,595 | 88,423 | ||||||
| Inventories | 161,496 | 165,631 | ||||||
| Prepaid expenses | 12,135 | 13,415 | ||||||
| Income taxes receivable | 1,233 | 5,964 | ||||||
| Deferred income tax assets | 8,731 | 8,731 | ||||||
| Total current assets | 283,619 | 287,049 | ||||||
| Property, plant and equipment, net | 48,460 | 50,026 | ||||||
| Intangible assets, net of applicable amortization | 131,006 | 100,211 | ||||||
| Other assets | 30,828 | 35,035 | ||||||
| $ | 493,913 | $ | 472,321 | |||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Current installments of long-term debt and other notes payable | $ | 10,073 | $ | 71 | ||||
| Current installments of other liabilities | 1,050 | 1,357 | ||||||
| Accounts payable | 23,421 | 20,411 | ||||||
| Deferred revenue | 38 | 898 | ||||||
| Accrued program costs | 73,528 | 52,546 | ||||||
| Accrued expenses and other payables | 6,540 | 5,962 | ||||||
| Total current liabilities | 114,650 | 81,245 | ||||||
| Long-term debt and other notes payable, excluding current installments | 82,658 | 98,605 | ||||||
| Other liabilities, excluding current installments | 3,003 | 3,309 | ||||||
| Deferred income tax liabilities | 28,159 | 28,159 | ||||||
| Total liabilities | 228,470 | 211,318 | ||||||
| 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; | 3,163 | 3,156 | ||||||
| Additional paid-in capital | 68,466 | 66,232 | ||||||
| Accumulated other comprehensive loss | (3,438 | ) | (1,970 | ) | ||||
| Retained earnings | 205,520 | 202,488 | ||||||
| 273,711 | 269,906 | |||||||
| Less treasury stock, at cost, 2,450,634 shares at September 30, 2015 and December 31, 2014 | (8,269 | ) | (8,269 | ) | ||||
| American Vanguard Corporation stockholders’ equity | 265,442 | 261,637 | ||||||
| Non-controlling interest | 1 | (634 | ) | |||||
| Total stockholders’ equity | 265,443 | 261,003 | ||||||
| $ | 493,913 | $ | 472,321 | |||||
| AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES | ||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| (In thousands) | ||||||||
| For The Nine Months Ended September 30, 2015 and 2014 | ||||||||
| (Unaudited) | ||||||||
Increase (decrease) in cash | 2015 | 2014 | ||||||
| Cash flows from operating activities: | ||||||||
| Net income | $ | 3,400 | $ | 2,584 | ||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||||||
| Depreciation and amortization of fixed and intangible assets | 12,190 | 11,996 | ||||||
| Amortization of other long term assets | 3,992 | 4,332 | ||||||
| Amortization of discounted liabilities | 118 | 249 | ||||||
| Stock-based compensation | 2,943 | 3,046 | ||||||
| Tax benefit from exercise of stock options | (8 | ) | (263 | ) | ||||
| Operating loss from equity method investment | 580 | 633 | ||||||
| Gain from dilution of equity method investment | — | (954 | ) | |||||
| Changes in assets and liabilities associated with operations: | ||||||||
| Increase in net receivables | (6,172 | ) | (16,995 | ) | ||||
| Decrease (increase) in inventories | 4,135 | (31,690 | ) | |||||
| Decrease (increase) in prepaid expenses and other assets | 1,143 | (5,237 | ) | |||||
| Decrease in income tax receivable/payable, net | 4,739 | 7,937 | ||||||
| Decrease in deferred tax | — | (328 | ) | |||||
| Increase (decrease) in accounts payable | 3,010 | (22,341 | ) | |||||
| Decrease in deferred revenue | (860 | ) | (2,769 | ) | ||||
| Increase in other payables and accrued expenses | 22,597 | 15,964 | ||||||
| Net cash provided by (used in) operating activities | 51,807 | (33,836 | ) | |||||
| Cash flows from investing activities: | ||||||||
| Capital expenditures | (5,196 | ) | (5,947 | ) | ||||
| Investments | (125 | ) | — | |||||
| Acquisitions of product lines and other intangible assets | (36,435 | ) | — | |||||
| Net cash used in investing activities | (41,756 | ) | (5,947 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Net (payments) borrowings under line of credit agreement | (16,120 | ) | 43,450 | |||||
| Increase in other notes payable | 10,000 | — | ||||||
| Payments on other long-term liabilities | (1,252 | ) | (1,371 | ) | ||||
| Tax benefit from exercise of stock options | 8 | 263 | ||||||
| Repurchases of common stock | — | (1,531 | ) | |||||
| Non-controlling interest contribution | — | 300 | ||||||
| Payment of cash dividends | (1,141 | ) | (4,251 | ) | ||||
| Net proceeds from the issuance of common stock (sale of stock under ESPP and exercise of stock options) | 254 | 1,616 | ||||||
| Net cash (used in) provided by financing activities | (8,251 | ) | 38,476 | |||||
| Net increase (decrease) in cash and cash equivalents | 1,800 | (1,307 | ) | |||||
| Cash and cash equivalents at beginning of period | 4,885 | 6,680 | ||||||
| Effect of exchange rate changes on cash and cash equivalents | (1,256 | ) | (328 | ) | ||||
| Cash and cash equivalents at end of period | $ | 5,429 | $ | 5,045 | ||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20151102006679/en/
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
