Background Color:
 
Background Pattern:
Reset
Search
August 6, 2009

FOR IMMEDIATE RELEASE

AMERICAN VANGUARD REPORTS SECOND QUARTER & MID-YEAR 2009 RESULTS

Quarterly Performance Reflects Soft Distributor Channel Demand and the Financial Impact of Reduced Manufacturing Output

Newport Beach, CA – August 6, 2009 – American Vanguard Corporation (NYSE:AVD), today announced financial results for the second quarter and six month period ended June 30, 2009.  

Fiscal 2009 Second Quarter Financial Highlights – versus Fiscal 2008 Second Quarter:

  • Net sales declined 18% to $47.5 million. 
  • Net income was breakeven compared to $4.3 million.
  • Earnings per diluted share were breakeven versus $0.16.

Fiscal 2009 First Half Financial Highlights – versus Fiscal 2008 First Half

  • Net sales declined 7% to $92.1 million
  • Net income was $0.7 million, compared to $6.1 million
  • Earnings per diluted share were $0.03 versus $0.23

Eric Wintemute, President and CEO of American Vanguard, stated: “As previously announced, our financial performance for the second quarter has been severely affected by a very challenging business environment this spring. Growers have delayed and reduced purchases as a result of poor Midwest weather, credit availability concerns, acreage reductions and reduced pest pressure. Such soft demand has led distributors and retailers to invoke strict inventory control procedures and this industry-wide, “buy-only-as-needed”, restocking reluctance has contributed to the performance declines of many suppliers of crop protection chemicals. The current shrinkage of the distribution inventory pipeline is the primary contributing factor to our year-over-year quarterly revenue decline and accounts for approximately 2/3 of our year-over-year quarterly decline in net earnings.”

“Operationally, we reacted to this reduction in market demand by scaling back our production output in order to refrain from building inventories. While we successfully accomplished our goal, we inevitably experienced the burden of fixed cost absorption associated with these reduced operating rates. This overhead absorption, along with some one-time waste disposal expenses, accounted for approximately 1/3 of our year-over-year quarterly decline in net earnings.”

Mr. Wintemute continued: “We feel that our performance this year is unacceptable and we have already begun to undertake corrective actions. These include:

  • In Sales & Marketing we are re-staffing key positions and analyzing better approaches to promote our product portfolio.
  • In our Manufacturing operations we are expanding capacity utilization with contract / toll manufacturing arrangements and trimming costs without sacrificing quality or safety standards.
  • In our Operating Expense category, we are maintaining tight control over all discretionary costs and have managed to reduce our general & administrative costs as well as our freight expense.”

Mr. Wintemute concluded: “Our organization is focusing its full attention on improving our performance for the balance of 2009 and into the 2010 North American spring planting season. During the second half of the year, we historically capitalize on our leadership strength in soil fumigants, foliar insecticides and mosquito control. We will also be positioning our herbicide and insecticide offerings in corn to gain market share in 2010 with additional university yield enhancement data and other focused promotional initiatives. We will continue our drive for international expansion and introduce additional products in our non-crop segment for professional pest management. We will implement process improvements to better exploit our North American manufacturing capability; we will maintain strict discipline over all spending; and we will continue our focus on strengthening American Vanguard’s balance sheet.”

Conference Call
Eric Wintemute, President & CEO, Trevor Thorley, EVP & COO and David T. Johnson, CFO, will conduct a conference call focusing on the financial results at 12:00 pm EDT / 9:00 am PDT on Thursday, August 6, 2009. 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 #22123273). 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 June 30
 
For the six months
ended June 30
 
 
2009
 
2008
 
2009
 
2008
 
Net sales (1)
$   47,485
$   57,908
$   92,122
$   98,842
Cost of sales
31,066
34,296
57,147
57,494
 
 
 
 
 
Gross profit
16,419
23,612
34,975
41,348
Operating expenses
15,537
15,436
32,100
29,382
 
 
 
 
 
Operating income
882
8,176
2,875
11,966
Interest expense
911
1,232
1,797
2,247
Interest income
-
(75)
-
(75)
Interest capitalized
               (5)
(58)
(26)
(108)
 
 
 
 
 
Income (loss) before income taxes
(24)
7,077
1,104
9,902
Income tax expense (benefit)
(20)
2,735
409
3,827
 
 
 
 
 
Net income (loss)
$      (4)
$    4,342
$     695
$    6,075
 
 
 
 
 
Earnings per common share—basic
$         -  
$      .16
$      .03
$      .23
 
 
 
 
 
Earnings per common share—     assuming dilution
$        - 
$      .16
$      .03
$      .22
 
 
 
 
 
Weighted average shares outstanding—basic
27,081
26,533
27,043
26,499
 
 
 
 
 
Weighted average shares outstanding—assuming dilution
27,081
27,474
27,701
27,470
 
 
 
 
 
 
(1) Net sales for the three and six month period ended June 30, 2009, includes $1,400 from the settlement of claims against follow-on registrants from whom the Company collected data compensation. The Company included a similar amount in net sales for the comparable period in 2008 arising from the settlement of non-FIFRA litigation.
 
 
AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands except per share amounts)
ASSETS 
 
 
 
 
June 30,
2009
 
Dec. 31,
2008
 
 
(Unaudited)
(Note)
Current assets:
 
 
Cash and cash equivalents
$     1,306
$    1,229
Receivables:
 
 
Trade, net of allowance for doubtful accounts of $462 and $472, respectively
40,496
51,405
Other
1,255
563
 
 
 
 
41,751
51,968
 
 
 
Inventories9
112,434
90,626
Prepaid expenses
1,725
1,688
 
 
 
Total current assets
157,216
145,511
Property, plant and equipment, net
40,285
41,241
Intangible assets
89,084
91,079
Other assets
9,887
9,106
 
 
 
 
$   296,472
$   286,937
`
 
 
 LIABILITIES AND STOCKHOLDERS’ EQUITY
 
Current liabilities:
 
 
Current installments of long-term debt
$     8,506
$     6,656
Accounts payable
12,114
16,196
Accrued program costs
18,931
16,204
Accrued expenses and other payables
4,298
6,767
Income taxes payable
181
3,332
 
 
 
Total current liabilities
44,030
49,155
Long-term debt, excluding current installments
88,795
75,748
Deferred income taxes
6,091
6,091
 
 
 
Total liabilities
138,916
130,994
 
 
 
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 29,365,541 shares at June 30, 2009 and 29,209,863 shares at December 31, 2008
2,935
2,920
Additional paid-in capital
39,676
38,873
Accumulated other comprehensive income (loss)
(2,152)
(3,593)
Retained earnings
120,250
120,896
 
 
 
 
160,709
159,096
Less treasury stock, at cost, 2,260,996 shares at June 30, 2009 and December 31, 2008
(3,153)
(3,153)
 
 
 
Total stockholders’ equity
157,556
155,943
 
 
 
 
$   296,472
$   286,937
 
 
 
Note: The balance sheet at December 31, 2008 has been derived from the audited financial statements at that date. See notes to consolidated financial statements.  


AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
 (In thousands)
For The Six Months Ended June 30, 2009 and 2008
(Unaudited)
 
 
 
 
Increase (decrease) in cash
 
2009
 
2008
 
Cash flows from operating activities:
 
 
Net income
$     695
$    6,075
Adjustments to reconcile net income to net cash used in
operating activities:
 
 
Depreciation and amortization
6,818
5,694
Stock-based compensation expense related to stock options and employee stock purchases
580
395
Changes in assets and liabilities associated with operations:
 
 
Decrease in receivables
10,217
3,798
Increase in inventories
(21,808)
(27,253)
Increase in prepaid expenses and other assets
(2,095)
(4,091)
(Decrease) Increase in accounts payable
(3,155)
2,364
(Decrease) Increase in other current liabilities
(3,443)
3,089
 
 
 
Net cash used in operating activities
(12,191)
(9,929)
 
 
 
Cash flows from investing activities:
 
 
Capital expenditures
(2,249)
(5,005)
Acquisitions of intangible assets
—  
(9,048)
 
 
 
Net cash used in investing activities
(2,249)
(14,053)
 
 
 
Cash flows from financing activities:
 
 
Net borrowings under line of credit agreement
17,500
28,000
Principal payments on long-term debt
(2,053)
(2,053)
Proceeds from the issuance of common stock (sale of stock under ESPP)
238
893
Payment of cash dividends
(1,341)
(1,323)
 
 
 
Net cash provided by financing activities
14,344
25,517
 
 
 
Net (decrease) increase in cash
(96)
1,535
Cash and cash equivalents at beginning of period
1,229
3,201
Effect of exchange rate changes on cash
173
5
 
 
 
Cash and cash equivalents as of June 30,
$    1,306
$    4,741
 
 
 
 

 

Code Psn Gratuit