MRO Magazine

American Vanguard Reports Second Quarter & Mid-Year 2015 Results


July 30, 2015
By Business Wire News

NEWPORT BEACH, Calif.

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.

 

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

2015    20142015    2014
Net sales $ 66,523 $ 68,313 $ 133,088 $ 149,408
Cost of sales   41,402     42,253     83,317     94,443  
Gross profit 25,121 26,060 49,771 54,965
Operating expenses   23,922     25,337     48,266     50,536  
Operating income 1,199 723 1,505 4,429
Interest expense 710 857 1,390 1,488
Interest capitalized   (48 )   (13 )   (87 )   (31 )
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  
Income before loss on equity investment 930 39 887 2,116
Less net loss from equity method investment   (191 )   (68 )   (191 )   (140 )
Net income (loss) 739 (29 ) 696 1,976
Add back net loss attributable to non-controlling interest   42     174     136     328  
Net income attributable to American Vanguard   781     145     832     2,304  
Change in fair value of interest rate swaps 145 281
Foreign currency translation adjustment   (323 )   92     (571 )   143  
Comprehensive income $ 458   $ 382   $ 261   $ 2,728  
Earnings per common share—basic $ .03   $ .01   $ .03   $ .08  
Earnings per common share—assuming dilution $ .03   $ .01   $ .03   $ .08  
Weighted average shares outstanding—basic   28,676     28,408     28,602     28,404  
Weighted average shares outstanding—assuming dilution   29,202     28,795     29,103     28,877  
 
 

AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
(Unaudited)

 

ASSETS

 
   

June 30,
2015

 

Dec. 31,
2014

Current assets:
Cash and cash equivalents $ 5,089 $ 4,885
Receivables:
Trade, net of allowance for doubtful accounts of $123 and $166, respectively 74,698 86,027
Other   4,750     2,396  
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  
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  
$ 493,003   $ 472,321  
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
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  
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  
Total liabilities   230,120     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; 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  
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 )
American Vanguard Corporation stockholders’ equity 262,814 261,637
Non-controlling interest   69     (634 )
Total stockholders’ equity   262,883     261,003  
$ 493,003   $ 472,321  
 
 

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:
Net income $ 696 $ 1,976
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
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:
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  
Net cash provided by (used in) operating activities   43,824     (29,039 )
Cash flows from investing activities:
Capital expenditures (3,480 ) (3,954 )
Investment (125 )
Acquisitions of product lines and other intangibles assets   (36,435 )    
Net cash used in investing activities   (40,040 )   (3,954 )
Cash flows from financing activities:
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  
Net cash (used in) provided by financing activities   (3,193 )   30,412  
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  
Cash and cash equivalents at end of period $ 5,089   $ 4,189  
 

Company:
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