Background Color:
 
Background Pattern:
Reset
Search
March 8, 2010.2

Newport Beach, CA – March 8, 2010 – American Vanguard Corporation (NYSE:AVD), today announced financial results for the fourth quarter and full year ended December 31, 2009.

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

  • Net sales were $50.8 million compared to $71.1 million.  
  • Net income was ($8.6) million* compared to $7.9 million.
  • Earnings per diluted share were ($0.32)* versus $0.29

Fiscal 2009 Financial Highlights – versus Fiscal 2008 Results:

  • Net sales were $209.3 million compared to $237.5 million.
  • Net income was ($5.8) million* compared to $20.0 million.
  • Earnings per diluted share were ($0.21)* versus $0.73

* Net Income and Earnings per share results for the Fourth Quarter and Full Year 2009 reflect the inclusion of a one-time, non-cash charge of $13.5 million taken to adjust the inventories of American Vanguard at December 31, 2009.

Eric Wintemute, President and CEO of American Vanguard, stated: “Challenging industry-wide conditions in the agricultural chemical marketplace during mid & late 2009 resulted in our revenue declines of 29% in the fourth quarter and 12% for the full year. Like many of our peers, we were negatively impacted in the quarter and the full year by unfavorable weather and by the continued reluctance of distributor channels to stock inventory for the upcoming 2010 spring planting season.”

“This drop in end-use demand and our determination not to over-accumulate our own inventories compelled us to run our factories at reduced operating rates, which invariably translated into higher unit costs and lower gross profit margins. The combination of sluggish sales demand and the impact of unabsorbed fixed manufacturing costs have resulted in financial performance well below our expectations. We have responded by intensifying our sales & marketing initiatives, reducing costs throughout the Company and accelerating our efforts to develop and introduce new products.”

“Additionally, during the year-end assessment of our inventory, we determined that it was appropriate to write down the value of certain items by way of a one time, non-cash charge of $13.5 million. This charge arises primarily from the effect of unabsorbed manufacturing overhead activity, net realizable value assessments of slow-moving and obsolete inventory, and finally, other annual adjustments to ensure that our standard costs continue to closely reflect actual manufacturing cost.”

Mr. Wintemute concluded: “Throughout this difficult period, we have made significant progress toward improving our balance sheet by reducing inventory levels, generating cash and paying down our bank revolver debt. In addition, we have secured an amendment to our senior credit facility which includes adjusted covenants that should serve to provide the necessary flexibility in meeting our working capital needs over the course of 2010. We are well positioned to benefit from improving market conditions and our organization is well-focused and highly motivated to improve our operating performance, achieve better financial results and maintain our corporate balance sheet strength.”

Conference Call
Eric Wintemute, President & CEO, Trevor Thorley, EVP & COO and David T. Johnson, VP & CFO, will conduct a conference call focusing on the financial results at 12:00 pm ET / 9:00 am PT on Monday, March 8, 2010. 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 # 55081944). 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 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

 

CONSOLIDATED BALANCE SHEETS
December 31, 2009 and 2008
(Dollars in thousands, except share and per share data)
(unaudited)
 
 
 
 
 
 
2009
 
2008
 
Assets
 
 
Current assets:
 
 
Cash.................................................................................
$      383
$   1,229
Receivables:
 
 
Trade, net of allowance for doubtful accounts of $636 and $472, respectively....................................................
   40,681
   51,405
Other.........................................................................
        382
        563
 
 
 
 
   41,063
   51,968
 
 
 
Inventories.........................................................................
   72,512
   90,626
Prepaid expenses.................................................................
     2,143
     1,688
Income taxes receivable………………………………………………………
     3,575
       —  
 
 
 
Total current assets......................................................
 119,676
 145,511
Property, plant and equipment, net.................................................
   39,196
   41,241
Intangible assets..........................................................................
   86,973
   91,079
Other assets................................................................................
     8,866
     9,106
 
 
 
 
$254,711
$ 286,937
 
 
 
Liabilities and Stockholders’ Equity
 
 
Current liabilities:
 
 
Current installments of long-term debt.....................................
$   8,528
$   6,656
Accounts payable.................................................................
   11,401
   16,195
Accrued program costs..........................................................
   27,188
   16,204
Accrued expenses and other payables.......................................
     3,762
     6,767
Income taxes payable............................................................
       —  
     3,332
 
 
 
Total current liabilities.................................................
   50,879
   49,154
Long-term debt, excluding current installments.................................
   45,432
   75,748
Other long-term liabilities
192
       —  
Deferred income taxes...................................................................
5,121
     6,091
 
 
 
Total liabilities...........................................................
101,624
 130,993
 
 
 
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 29,575,562 shares in 2009 and 29,209,863 shares in 2008.................................................................
     2,958
     2,921
Additional paid-in capital......................................................
   41,529
   38,873
Accumulated other comprehensive loss....................................
   (1,743)
   (3,593)
Retained earnings................................................................
 113,496
 120,896
 
 
 
 
 156,240
 159,097
Less treasury stock, at cost, 2,260,996 shares in both 2009 and 2008.............................................................................
   (3,153)
   (3,153)
 
 
 
Total stockholders’ equity............................................
 153,087
 155,944
 
 
 
 
$254,711
$ 286,937
 
 
 

 

CONSOLIDATED STATEMENTS OF OPERATIONS
Three months and twelve months ended December 31, 2009 and 2008
(Dollars in thousands, except per share data)
(unaudited)
 
 
 
 
 
 
 
 
 
For the three months ended December 31
For the twelve months ended December 31
 
2009
 
2008
 
2009
 
2008
 
Net sales..............................................
$ 50,836
$ 71,060
$ 209,329
$ 237,538
Cost of sales.........................................
   46,749
   40,063
 148,903
 136,407
 
 
 
 
 
Gross profit..................................
     4,087
   30,997
   60,426
 101,131
Operating expenses................................
   17,185
   17,494
   66,755
   64,987
 
 
 
 
 
Operating (loss) income..................
(13,098)
   13,503
   (6,329)
   36,144
Interest expense.....................................
        631
        955
     3,253
     4,300
Interest income......................................
       —  
       —  
       —  
       (75)
Interest capitalized.................................
         (6)
       (83)
       (44)
     (254)
 
 
 
 
 
(Loss) income before provision for income taxes.............................
(13,723)
   12,631
   (9,538)
   32,173
Income taxes (benefit) expense..................
   (5,142)
     4,716
   (3,749)
   12,154
 
 
 
 
 
Net (loss) income..........................
$ (8,581)
$   7,915
$ (5,789)
$ 20,019
 
 
 
 
 
(Loss) earnings per common share—basic..
$   (0.32)
$     0.30
$   (0.21)
$     0.75
 
 
 
 
 
(Loss) earnings per common share—assuming dilution..............................
$   (0.32)
$     0.29
$   (0.21)
$     0.73
 
 
 
 
 
Weighted average shares outstanding—basic......................................................
   27,241
   26,803
   27,120
   26,638
 
 
 
 
 
Weighted average shares outstanding—assuming dilution..............................
   27,241
   27,418
   27,120
   27,469
 
 
 
 
 
 
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years ended December 31, 2009 and 2008
(Dollars in thousands)
(unaudited)
 
 
 
 
 
 
2009
 
2008
 
Increase (decrease) in cash
 
 
Cash flows from operating activities:
 
 
Net (loss) income..................................................................
$ (5,789)
$ 20,019
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
 
 
Depreciation and amortization.................................................
    9,050
    7,271
Amortization of intangibles.....................................................
    4,437
    4,342
Loss from foreign currency contracts.........................................
        — 
      174
Stock-based compensation expense related to stock options, employee stock purchases and directors’ fees..........................
    1,223
      822
Deferred income taxes............................................................
     (778)
    3,700
Changes in assets and liabilities associated with operations:
 
 
Decrease in net receivables..............................................
   10,905
    4,602
(Increase) decrease in inventories......................................
18,114
(27,171)
Increase in Income Tax Receivable…………...……………...
 (3,575)
      —            
Increase in prepaid expenses and other assets……...................
 (2,898)
 (4,913)
Decrease in accounts payable...........................................
 (3,385)
 (1,871)
Increase (decrease) in other payables and accrued expenses.....
4,647
 (6,091)
 
 
 
Net cash provided by operating activities...................
31,951
      884
 
 
 
Cash flows from investing activities:
 
 
Capital expenditures..............................................................
 (4,322)
(14,444)
Acquisitions of intangible assets..............................................
         —
(10,439)
 
 
 
Net cash used in investing activities.........................
 (4,322)
(24,883)
 
 
 
Cash flows from financing activities:
 
 
Net (repayments) borrowings under line of credit agreement..........
(21,900)
 24,500
Payments on long-term debt
 (4,106)
 (4,106)
(Decrease) increase in other notes payable
 (2,438)
3,750
Proceeds from the issuance of common stock..............................
    1,470
    1,555
Acquisition of treasury stock...................................................
         —
    (408)
Payment of cash dividends......................................................
   (1,611 )
 (2,127)
 
 
 
Net cash (used in) provided by financing activities..........
(28,585)
 23,164
 
 
 
Net (decrease) increase in cash.........................................
     (956)
    (835)
Cash at beginning of year...............................................................
    1,229
    3,201
Effect of exchange rate changes on cash..............................................
110
 (1,137)
 
 
 
Cash at end of year........................................................................
$     383
$ 1,229
 
 
 
Supplemental cash flow information:
 
 
Cash paid during the year for:
 
 
Interest................................................................................
$   3,279
$ 4,135
 
 
 
Income taxes........................................................................
$   3,361
$ 6,785