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November 4, 2009

FOR IMMEDIATE RELEASE
 
AMERICAN VANGUARD REPORTS THIRD QUARTER & NINE MONTH 2009 RESULTS

Newport Beach, CA – November 4, 2009 – American Vanguard Corporation (NYSE:AVD), today announced financial results for the three and nine month periods ended September 30, 2009.

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

  • Net sales were $66.4 million compared to $67.6 million.
  • Net income was $2.1 million compared to $6.0 million.
  • Earnings per diluted share were $0.08 versus $0.22.

Fiscal 2009 Nine Month Financial Highlights – versus Fiscal 2008 Nine Month Results:

  • Net sales were $158.5 million compared to $166.5 million.
  • Net income was $2.8 million compared to $12.1 million.
  • Earnings per diluted share were $0.10 versus $0.44.

Eric Wintemute, President and CEO of American Vanguard, stated: “Amidst challenging conditions in the Ag Chemical marketplace presently, we delivered quarterly sales revenues roughly equal to the same period last year. While some of our product portfolio outperformed the prior year period, we were negatively impacted by diminished sales of two very important seasonal contributors. Reduced demand for our Dibrom® mosquito adulticide resulted from less hurricane related precipitation in the Gulf Coast region. Relative to a very strong season in 2008, sales of this highly profitable mosquito eradicator were off by about 70% this year. Additionally, quarterly global sales of our leading fungicide product were about 35% below the prior year, as a result of reduced demand in international markets.

“As we previously reported, we have reacted to recent softness in domestic market demand by scaling back the production output of our manufacturing facilities in order to refrain from building excess inventories. Running factories at reduced operating rates has made it necessary to expense unabsorbed overheads resulting in lower gross profit margins. Indeed, the combination of lower sales of high margin products like Dibrom and the expensing of unabsorbed manufacturing costs has resulted in diminished profitability in the current quarter.”

Mr. Wintemute continued: “We have made significant progress toward the balance sheet objectives that we established in our last quarterly report to shareholders. During the current quarter, we reduced inventory levels by over 10%, maintained our diligence in receivables collection and generated sufficient cash to reduce the outstanding balance on our revolving credit line by over 35%.”

Mr. Wintemute concluded, “Our organization is focusing its full attention on improving our operating performance, achieving better financial results and strengthening our corporate 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 ET / 9:00 am PT on Wednesday, November 4, 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 # 33510653). 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
 
 
2009
 
2008
 
2009
 
2008
 
Net sales
$ 66,371
$ 67,636
$ 158,493
$ 166,478
Cost of sales
45,007
38,850
102,154
96,344
 
 
 
 
 
Gross profit
21,364
28,786
56,339
70,134
Operating expenses
17,470
18,111
49,570
47,493
 
 
 
 
 
Operating income
3,894
10,675
6,769
22,641
Interest expense
825
1,098
2,622
3,345
Interest income
         —               
        —  
          —  
           (75 )
Interest capitalized
 (12)
 (63)
 (38)
 (171)
 
 
 
 
 
Income before income taxes
3,081
9,640
4,185
19,542
Income tax expense
984
3,611
1,393
7,438
 
 
 
 
 
Net income
$ 2,097
$ 6,029
$ 2,792
$ 12,104
 
 
 
 
 
Earnings per common share—basic
$      .08
$      .23
$      .10
$      .46
 
 
 
 
 
Earnings per common share—assuming dilution
$      .08
$      .22
$      .10
$      .44
 
 
 
 
 
Weighted average shares outstanding—basic
27,124
26,788
27,071
26,596
 
 
 
 
 
Weighted average shares outstanding—assuming dilution
27,609
27,580
27,660
27,500
 
 
 
 
 
 
 
AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
ASSETS
 
 
 
 
September 30,
2009
 
Dec. 31,
2008
 
 
(Unaudited)
(Note)
Current assets:
 
 
Cash and cash equivalents
$    901
$   1,229
Receivables:
 
 
Trade, net of allowance for doubtful accounts of $330 and $472
56,355
51,405
Other
328
563
 
 
 
 
56,683
51,968
 
 
 
Inventories
99,475
90,626
Prepaid expenses
1,568
1,688
 
 
 
Total current assets
158,627
145,511
Property, plant and equipment, net
40,247
41,241
Intangible assets
88,083
91,079
Other assets
9,443
9,106
 
 
 
 
$ 296,400
$ 286,937
 
 
 
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
 
Sept. 30,
2009
 
Dec. 31,
2008
 
 
(Unaudited)
(Note)
Current liabilities:
 
 
Current installments of long-term debt
$   9,506
$   6,656
Accounts payable
17,390
16,196
Accrued program costs
24,989
16,204
Accrued expenses and other payables
5,283
6,767
Income taxes payable
954
3,332
 
 
 
Total current liabilities
58,122
49,155
Long-term debt, excluding current installments
72,268
75,748
Deferred income taxes
6,021
6,091
 
 
 
Total liabilities
136,411
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 29,412,015 shares at September 30, 2009 and 29,209,863 shares at December 31, 2008
2,941
2,920
Additional paid-in capital
40,215
38,873
Accumulated other comprehensive loss
(2,091)
(3,593)
Retained earnings
122,077
120,896
 
 
 
 
163,142
159,096
Less treasury stock, at cost, 2,260,996 shares at September 30, 2009 and December 31, 2008
(3,153)
(3,153)
 
 
 
Total stockholders’ equity
159,989
155,943
 
 
 
 
$ 296,400
$ 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 Nine Months Ended September 30, 2009 and 2008
(Unaudited)
 
 
 
 
Increase (decrease) in cash
 
2009
 
2008
 
Cash flows from operating activities:
 
 
Net income
$   2,792
$ 12,104
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
Depreciation and amortization
10,124
8,711
Deferred income tax
(70)
774
Stock-based compensation expense related to stock options and employee stock purchases
895
554
Changes in assets and liabilities associated with operations:
 
 
Increase in receivables
(4,715)
(10,461)
Increase in inventories
(8,849)
(25,792)
Increase in prepaid expenses and other assets
(2,281)
(1,702)
Increase in accounts payable
2,351
4,317
Increase in other current liabilities
4,103
9,303
 
 
 
Net cash provided (used in) operating activities
4,350
(2,192)
 
 
 
Cash flows from investing activities:
 
 
Capital expenditures
(3,746)
(8,101)
Acquisitions of intangible assets
—  
(8,892)
 
 
 
Net cash used in investing activities
(3,746)
(16,993)
 
 
 
Cash flows from financing activities:
 
 
Net borrowings under line of credit agreement
3,000
23,000
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
468
1,329
Acquisition of Treasury stock
          —  
(408)
Payment of cash dividends
(1,341)
(1,323)
 
 
 
Net cash (used in) provided by financing activities
(953)
19,518
 
 
 
Net (decrease) increase in cash
(349)
333
Cash and cash equivalents at beginning of period
1,229
3,201
Effect of exchange rate changes on cash
21
(380)
 
 
 
Cash and cash equivalents as of September 30,
$    901
$   3,154
 
 
 
 

 

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