FOR IMMEDIATE RELEASE
AMERICAN VANGUARD REPORTS THIRD QUARTER 2008 RESULTS
Performance reflects continuing international expansion and specialty product strength
Newport Beach, CA – November 6, 2008 – American Vanguard Corporation (NYSE:AVD), today announced financial results for the third quarter and nine month period ended September 30, 2008.
Fiscal 2008 Third Quarter Financial Highlights – versus Fiscal 2007 Third Quarter
• Net sales of $67.6 million, an increase of 19%.
• Net income of $6.0 million represents an 11% improvement.
• Earnings per diluted share were $0.22, a 10% increase.
Fiscal 2008 Nine Month Financial Highlights – versus Fiscal 2007 Nine Month performance
• Net sales of $166.5 million, an increase of 13%.
• Net income of $12.1 million was 8% higher.
• Earnings per diluted share were $0.44, a 7% improvement.
Eric Wintemute, President and CEO of American Vanguard, stated: “Our third quarter performance reflects continuing strength in our international business and the excellent performance of our non-crop specialty products segment. Sales into most major agricultural end-uses met our internal expectations, and our initiatives to gain a larger position in key market segments and geographic regions are progressing as planned. In response to higher raw material costs, we are raising product prices where feasible to maintain appropriate profitability. In our manufacturing operations, we continue to focus on improving internal efficiencies and increasing capacity utilization by producing a larger share of our own requirements and selectively contract manufacturing products for other parties.”
Among the most important performance highlights:
• International sales continued to grow in the third quarter, again led by significant sales gains in Mexico. With the opening of a subsidiary operation in Costa Rica, we are pursuing additional opportunities that exist for our products in Central America.
• Metam soil fumigant products posted substantially larger sales, as market demand increased for pre-winter soil treatments and we expanded our position in the Southeast region, which will be served by our new production facility in Axis, Alabama.
• New AMVAC offerings, such as Terraclor® fungicides and Orthene® insecticides, contributed to our quarterly performance and helped to expand our participation in several key market segments.
• Non-crop specialty products business improvement was largely due to a significant increase in our mosquito adulticide Dibrom®, prompted by the strong hurricane activity that impacted the U.S. Gulf Coast states.
Mr. Wintemute concluded, “We are pleased that with our quarterly and nine-month results reflect a broadly-based, steady improvement in our overall business. Solid demand in most of our primary end-use crop markets, continued international expansion in existing and new markets, improved acceptance of our herbicide and insecticide offerings in corn, and additional new products in our non-crop segment should allow us to continue our growth in the coming years. We will remain diligent in cost control, conservative in our investment outlays and collaborative with other industry participants to facilitate expansion of our established market position. We strongly believe that the significant benefits that our products provide for enhancing agricultural productivity, improving crop quality, and impeding resistance development will continue to be in demand and fuel our growth potential.”
Conference Call
Eric Wintemute, President and CEO and David Johnson, CFO, will conduct a conference call focusing on the financial results at 12:00 pm ET / 9:00 am PT on Thursday, November 6, 2008. Interested parties may participate in the call by dialing 706-679-3155 – please call in 10 minutes before the call is scheduled to begin, and ask for the American Vanguard call (conference ID # 70391359). 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. 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 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.
CONTACT:
American Vanguard Corporation
William A. Kuser, Director of Investor Relations
(949) 260-1200
williamk@amvac-chemical.com <mailto:williamk@amvac-chemical.com>
OR- AVD’S INVESTOR RELATIONS FIRM
The Equity Group Inc.
Lena Cati
(212) 836-9611
www.theequitygroup.com <http://www.theequitygroup.com />
Lcati@equityny.com
Linda Latman (212) 836-9609
Llatman@equityny.com
AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except per share amounts)
(Unaudited)
|
|
For the three months
ended September 30
|
For the nine months
ended September 30
|
|
|
2008
|
2007
|
2008
|
2007
|
|
Net sales
|
$ 67,636
|
$ 56,641
|
$ 166,478
|
$ 147,575
|
|
Cost of sales
|
38,850
|
32,480
|
96,344
|
82,770
|
|
|
|
|
|
|
|
Gross profit
|
28,786
|
24,161
|
70,134
|
64,805
|
|
Operating expenses
|
18,111
|
14,145
|
47,493
|
41,621
|
|
|
|
|
|
|
|
Operating income
|
10,675
|
10,016
|
22,641
|
23,184
|
|
Interest expense
|
1,098
|
1,105
|
3,345
|
4,808
|
|
Interest income
|
-
|
(70)
|
(75)
|
(103)
|
|
Interest capitalized
|
(63)
|
-
|
(171)
|
(30)
|
|
|
|
|
|
|
|
Income before income taxes
|
9,640
|
8,981
|
19,542
|
18,509
|
|
Income tax expense
|
3,611
|
3,534
|
7,438
|
7,345
|
|
|
|
|
|
|
|
Net income
|
$ 6,029
|
$ 5,447
|
$ 12,104
|
$ 11,164
|
|
|
|
|
|
|
|
Earnings per common share—basic
|
$ .23
|
$ .21
|
$ .46
|
$ .42
|
|
|
|
|
|
|
|
Earnings per common share—assuming dilution
|
$ .22
|
$ .20
|
$ .44
|
$ .41
|
|
|
|
|
|
|
|
Weighted average shares outstanding—basic
|
26,788
|
26,382
|
26,596
|
26,273
|
|
|
|
|
|
|
|
Weighted average shares outstanding—assuming dilution
|
27,580
|
27,449
|
27,500
|
27,355
|
|
|
|
|
|
|
AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
ASSETS
|
|
|
|
|
|
September 30,
2008
|
Dec. 31,
2007
|
|
|
(Unaudited)
|
(Note)
|
|
Current assets:
|
|
|
|
Cash and cash equivalents
|
$ 3,154
|
$ 3,201
|
|
Receivables:
|
|
|
|
Trade
|
66,426
|
55,925
|
|
Other
|
605
|
645
|
|
|
|
|
|
|
67,031
|
56,570
|
|
|
|
|
|
Inventories
|
89,247
|
63,455
|
|
Prepaid expenses
|
1,617
|
2,214
|
|
|
|
|
|
Total current assets
|
161,049
|
125,440
|
|
Property, plant and equipment, net
|
41,545
|
36,330
|
|
Land held for development
|
211
|
211
|
|
Intangible assets
|
92,504
|
85,318
|
|
Other assets
|
1,212
|
1,282
|
|
|
|
|
|
|
$ 296,521
|
$ 248,581
|
|
|
|
|
AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
September 30,
2008
|
Dec. 31,
2007
|
|
|
(Unaudited)
|
(Note)
|
|
Current liabilities:
|
|
|
|
Current installments of long-term debt
|
$ 4,656
|
$ 4,106
|
|
Accounts payable
|
19,750
|
13,796
|
|
Accrued program costs
|
30,534
|
24,191
|
|
Accrued expenses and other payables
|
6,531
|
6,355
|
|
Income taxes payable
|
5,445
|
1,848
|
|
|
|
|
|
Total current liabilities
|
66,916
|
50,296
|
|
Long-term debt, excluding current installments
|
77,275
|
56,155
|
|
Deferred income taxes
|
3,165
|
2,391
|
|
|
|
|
|
Total liabilities
|
147,356
|
108,842
|
|
|
|
|
|
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
29,191,206 shares at September 30, 2008 and 28,650,829 shares at December 31, 2007
|
2,919
|
2,865
|
|
Additional paid-in capital
|
38,380
|
36,551
|
|
Accumulated other comprehensive income (loss)
|
(1,970)
|
64
|
|
Retained earnings
|
112,989
|
103,004
|
|
|
|
|
|
|
152,318
|
142,484
|
|
Less treasury stock, at cost, 2,260,996 shares at September 30, 2008 and
2,226,796 at December 31, 2007
|
(3,153 )
|
(2,745 )
|
|
|
|
|
|
Total stockholders’ equity
|
149,165
|
139,739
|
|
|
|
|
|
|
$ 296,521
|
$ 248,581
|
|
|
|
|
Note: The balance sheet at December 31, 2007 has been derived from the audited financial statements at that date.
AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
For The Nine Months Ended September 30, 2008 and 2007
(Unaudited)
|
Increase (decrease) in cash
|
2008
|
2007
|
|
Cash flows from operating activities:
|
|
|
|
Net income
|
$ 12,104
|
$ 11,164
|
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
Depreciation and amortization
|
8,711
|
7,327
|
|
|
Provision for bad debt expense
|
100
|
-
|
|
|
Deferred income tax
|
774
|
-
|
|
|
Stock-based compensation expense related to stock options and employee stock purchases
|
554
|
581
|
|
|
Changes in assets and liabilities associated with operations:
|
|
|
|
|
(Increase) decrease in receivables
|
(10,561)
|
14,344
|
|
|
(Increase) decrease in inventories
|
(25,792)
|
398
|
|
|
(Increase) decrease in prepaid expenses and other assets
|
542
|
(849 )
|
|
|
Increase (decrease) in accounts payable
|
4,317
|
(662 )
|
|
|
Increase in other current liabilities
|
9,303
|
13,256
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
52
|
45,559
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
Capital expenditures
|
(10,345)
|
(1,887 )
|
|
|
Acquisitions of intangible assets
|
(8,892)
|
(3,263 )
|
|
|
Net decrease in other non-current assets
|
-
|
120
|
|
|
|
|
|
|
|
Net cash used in investing activities
|
(19,237)
|
(5,030 )
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
Net borrowings (payments) under line of credit agreement
|
23,000
|
(35,500 )
|
|
|
Principal payments on long-term debt
|
(3,080)
|
(3,080 )
|
|
|
Proceeds from the issuance of common stock from exercise of stock options and sale of stock under ESPP
|
1,329
|
2,013
|
|
|
Acquisition of Treasury stock
|
(408)
|
-
|
|
|
Payment of cash dividends
|
(1,323)
|
(1,047 )
|
|
|
|
|
|
|
|
Net cash provided by (used in) financing activities
|
19,518
|
(37,614 )
|
|
|
|
|
|
|
|
Net increase in cash
|
333
|
2,915
|
|
|
Cash and cash equivalents at beginning of period
|
3,201
|
1,844
|
|
|
Effect of unrealized loss from foreign currency contracts
|
125
|
-
|
|
|
Effect of exchange rate changes on cash
|
(505)
|
237
|
|
|
|
|
|
|
|
Cash and cash equivalents as of September 30,
|
$ 3,154
|
$ 4,996
|
|
|
|
|
|