AMERICAN VANGUARD REPORTS THIRD QUARTER & NINE-MONTH 2016 RESULTS
Continued Growth Amid Challenging Industry Conditions
Newport Beach, CA – November 2, 2016 – American Vanguard Corporation (NYSE:AVD), today announced financial results for the third quarter and nine-month period ended September 30, 2016.
Fiscal 2016 Third Quarter Financial Highlights – versus Fiscal 2015 Third Quarter Results
• Net sales increased from $72.5 million to $82.5 million
• Net income increased from $2.8 million to $2.9 million
• Earnings per diluted share improved from $0.09 to $0.10
Fiscal 2016 Nine Month Financial Highlights – versus Fiscal 2015 Nine Month Results
• Net sales increased from $205.6 million to $224.6 million
• Net income increased from $3.6 million to $8.9 million
• Earnings per diluted share improved from $0.12 to $0.30
Note: Further details are available in the financial schedules attached to this press release
Eric Wintemute, Chairman and CEO of American Vanguard stated: “Our third quarter and nine month financial results reflect management initiatives to expand our revenue base while maintaining strong operational control. In the face of a variety of Ag Industry headwinds during the quarter, we have remained focused on driving growth in our core products, expanding existing US market share positions and controlling our manufacturing costs while continuing to invest in the future of our business both domestically and internationally. In addition, during the nine month period we have focused on driving our newest products to market both in the US with Scepter, our first Soybean herbicide, and internationally with Nemacur and Bromacil, acquired in early 2015.”
Mr. Wintemute continued: “Third quarter revenues were driven by strong sales of our Metam® soil fumigants, Folex® cotton defoliant and Mocap® and Nemacur® granular insecticides. Quarterly net income improved compared to the prior year but included increased toll manufacturing, and a business mix that included some lower margin products. This had the impact of reducing gross margin compared to net sales, in comparison to the same period of 2015. Through the first nine months of 2016, we are pleased with the 9% revenue growth, the improvement in gross margins from 40% to 41%, and operating expenses which, as a percentage of sales, have decreased from 36% last year to 34.3% this year. Together these factors have generated a 147% increase in net income during the nine month period. Furthermore, we continue to reduce debt, which was $45 million at the end of Q3 2016, as compared to $93 million this time last year.”
Mr. Wintemute concluded: “As we finish calendar year 2016, we are anticipating improved product mix in the final quarter, lower manufacturing output as we manage inventory towards the goal of $125 million and operating expenses at a lower level relative to revenues, as compared to 2015. As we approach the 2017 planting season, we expect to see: modestly improved demand for our industry-leading portfolio of corn products due to reduced distribution channel inventories; incremental expansion of our international footprint; and gradual growth in our overall crop and non-crop businesses. We will continue to improve manufacturing efficiencies, control operating expenses, lower inventory levels and reduce debt. In the face of challenging conditions, American Vanguard continues to demonstrate its capacity to generate growth, sustain profitability, strengthen the balance sheet and enhance stockholder equity.”
Eric Wintemute, Chairman & CEO and David Johnson, VP & CFO, will conduct a conference call focusing on the financial results at 4:30 pm ET / 1:30 pm PT on Wednesday, November 2, 2016. Interested parties may participate in the call by dialing (201) 493-6744 - please call in 10 minutes before the call is scheduled to begin, and ask for the American Vanguard call. 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 as well as the S&P Small Cap 600 Index. To learn more about American Vanguard, please reference the Company’s web site at www.amvac-chemical.com.
The Company, from time to time, may discuss forward-looking information. Except for the historical information contained in press releases or 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 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.
William A. Kuser, Director of Investor Relations
The Equity Group Inc.