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May 7, 2009

FOR IMMEDIATE RELEASE

AMERICAN VANGUARD REPORTS FIRST QUARTER 2009 RESULTS

Performance reflects quarterly revenue improvement and additional costs incurred in the evaluation of strategic opportunities

Newport Beach, CA – May 7, 2009 – American Vanguard Corporation (NYSE:AVD), today announced financial results for the first quarter ended March 31, 2009. 

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

  • Net sales of $44.6 million, an increase of 9%. 
  • Net income of $0.7 million, compared to $1.7 generated in 1Q08.
  • Earnings per diluted share were $0.03, compared with $0.06 in the prior year period.

Note: Reported earnings for the current period include additional costs incurred in the evaluation of strategic opportunities – having an unfavorable after-tax earnings impact of more than $0.03 per diluted share.

Eric Wintemute, President and CEO of American Vanguard, stated: “Our first quarter year-over-year sales growth reflects continuous expansion of our business. Despite the economic and credit uncertainties in U.S. and international markets, our sales and marketing initiatives have proven successful in increasing our revenue base. We anticipate continued growth in a number of areas and plan to adjust our inventory levels and manufacturing operations accordingly.”

“Another factor in this quarter’s results involves the costs of evaluating strategic opportunities. Product acquisition or licensing, international expansion, and various manufacturing & marketing collaborations are important ingredients to our continued success.  While we can not elaborate on these projects specifically, individually and/or collectively they could transform the scope and significance of American Vanguard in the crop protection industry. We have engaged in evaluating a number of these opportunities during the first quarter of 2009, and our financial statements reflect the cost of such activities.”

Mr. Wintemute concluded, “We will continue to seek products that can strengthen our portfolio. We will continue to explore and pursue international and non-crop expansion opportunities. We will exercise diligent cost control, remain conservative in our investment outlays, capitalize on our versatile domestic manufacturing capability and leverage both our intellectual property and our established market positions. We reiterate again, that the significant benefits we provide for enhancing agricultural productivity and improving crop quality will continue to be in demand and fuel our growth potential in 2009 and beyond.”

Conference Call
Eric Wintemute, President & CEO, Trevor Thorley, EVP & COO 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, May 7, 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 # 96508760). 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® & Russell 3000® Indexes and the Standard & Poors 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 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 March 31
 
 
2009
 
2008
 
Net sales
$ 44,637
$ 40,934
Cost of sales
26,081
23,198
 
 
 
Gross profit
18,556
17,736
Operating expenses
16,563
13,946
 
 
 
Operating income
1,993
3,790
Interest expense
886
1,015
Interest capitalized
(21)
(50)
 
 
 
Income before income tax
1,128
2,825
Income tax expense
429
1,092
 
 
 
Net income
$     699
$   1,733
 
 
 
Earnings per common share—basic
$      .03
$      .07
 
 
 
Earnings per common share—assuming dilution
$      .03
$      .06
 
 
 
Weighted average shares outstanding—basic
27,004
26,464
 
 
 
Weighted average shares outstanding—assuming dilution
27,663
27,466
 
 
 

 

AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands – except share amounts)
  
 
 
 
 
 
 
Assets
Mar. 31,
2009
 
Dec. 31,
2008
 
 
(Unaudited)
 
(Note)
 
Current assets:
 
 
Cash
$   1,447
$   1,229
Receivables:
 
 
Trade, net of allowance for doubtful accounts of $530 and $472, respectively
63,834
51,405
Other
293
563
 
 
 
 
64,127
51,968
 
 
 
Inventories
112,527
90,626
Prepaid expenses
1,717
1,688
 
 
 
Total current assets
179,818
145,511
Property, plant and equipment, net
40,554
41,241
Intangible assets
89,999
91,079
Other assets
10,258
9,106
 
 
 
 
$ 320,629
$ 286,937
 
 
 
Liabilities and Stockholders’ Equity
 
 
Current liabilities:
 
 
Current installments of long-term debt
$   7,506
$   6,656
Accounts payable
21,061
16,196
Accrued program costs
14,715
16,204
Accrued expenses and other payables
5,972
6,767
Income taxes payable
533
3,332
 
 
 
Total current liabilities
49,787
49,155
Long-term debt, excluding current installments
108,222
75,748
Deferred income taxes
6,091
6,091
 
 
 
Total liabilities
164,100
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 29,333,396 shares at March 31, 2009 and 29,209,863 shares at December 31, 2008
2,932
2,920
Additional paid-in capital
39,390
38,873
Accumulated other comprehensive income (loss)
(2,894)
(3,593)
Retained earnings
120,254
120,896
 
 
 
 
159,682
159,096
Less treasury stock, at cost, 2,260,996 shares at March 31, 2009 and at December 31, 2008
(3,153)
(3,153)
 
 
 
Total stockholders’ equity
156,529
155,943
 
 
 
 
$ 320,629
$ 286,937
 
 
 
Note: The balance sheet at December 31, 2008 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 Three Months Ended March 31, 2009 and 2008
(Unaudited)
 
 
 
 
Increase (decrease) in cash
 
2009
 
2008
 
Cash flows from operating activities:
 
 
Net income
$        699
$     1,733
Adjustments to reconcile net income to net cash used in operating activities:
 
 
Depreciation and amortization of fixed and intangible assets
2,712
2,252
Amortization of other long term assets
         663
        510
Stock-based compensation expense related to stock options and employee stock purchases
238
235
Changes in assets and liabilities associated with operations:
 
 
Increase in net receivables
(12,159)
(8,402)
Increase in inventories
(21,901)
(26,829)
Increase in prepaid expenses and other assets
(1,844)
(2,739)
Increase in accounts payable
5,559
6,859
Decrease in other current liabilities
(6,424)
(4,977)
 
 
 
Net cash used in operating activities
(32,457)
(31,358)
 
 
 
Cash flows from investing activities:
 
 
Capital expenditures
(945)
(2,375)
Acquisitions of intangible assets
—   
(8,209)
 
 
 
Net cash used in investing activities
(945)
(10,584)
 
 
 
Cash flows from financing activities:
 
 
Net borrowings under line of credit agreement
34,500
41,500
Principal payments on long-term debt
(1,176)
(1,027)
Proceeds from the issuance of common stock (exercise of stock options and sale of stock under ESPP)
291
513
 
 
 
Net cash provided by financing activities
33,615
40,986
 
 
 
Net increase (decrease) in cash
213
(956)
Cash and cash equivalents at beginning of year
1,229
3,201
Effect of exchange rate changes on cash
5
44
 
 
 
Cash and cash equivalents as of March 31
$     1,447
$     2,289