AMERICAN VANGUARD REPORTS FOURTH QUARTER & FULL YEAR 2017 RESULTS
Full-Year Revenues Increase 14% and Net Income Grows 59%
Newport Beach, CA – March 12, 2018 – American Vanguard Corporation (NYSE:AVD) today announced financial results for the fourth quarter and full year ended December 31, 2017.
- Fiscal 2017 Fourth Quarter Financial Highlights – versus Fiscal 2016 Fourth Quarter:
- Net sales were $116.5 million versus $87.5 million, an increase of 33%.
- Net income was $8.4 million versus $3.9 million, an increase of 115%.
- EPS was $0.28 (an increase of 115%), of which about $0.11 arose from a one-time tax benefit.
Fiscal 2017 Financial Highlights – versus Fiscal 2016:
- Net sales were $355.0 million versus $312.1 million, an increase of 14%.
- Net income was $20.3 million versus $12.8 million, an increase of 59%.
- EPS was $0.68 (an increase of 55%), of which about $0.11 arose from a one-time tax benefit.
Further details are available in the financial schedules attached to this press release
Note: Fourth Quarter and Full-Year Net Income and EPS reflect a one-time tax benefit gained by the Company upon the enactment of the Tax Cut and Jobs Act on December 22, 2017.
Eric Wintemute, Chairman and CEO of American Vanguard, stated: “Our improved revenue performance in 2017 was driven by solid growth (+$11.8 million) of our existing products and the acquisition of new products and businesses during the year (+$31.1 million). These acquisitions which broadened and diversified our product portfolio and expanded our geographic market access were procured at attractive investment values. This acquisition approach has been the generator of steady company growth over the last three decades, and with our strong balance sheet we expect to be able to take advantage of additional acquisition opportunities over the next several years.”
Mr. Wintemute continued: “We experienced dynamic market conditions in 2017; however, due to our balanced portfolio of products, were able to improve both the top and bottom lines. For example, strong contributions from our cotton products and mosquito adulticide more than offset weather-related impact on soil fumigant sales and competitive pricing in corn herbicides. Our full-year gross profit margins remained strong at 42%, aided by improved factory utilization and cost control which reduced our unabsorbed overhead expense by nearly $5 million. Improved sales, operating earnings and working capital management have enabled us to achieve a year-end debt level of $78 million and to increase our credit borrowing capacity to $140 million, despite having completed six acquisitions during the year. Further, we continued to reduce our inventory of existing products year-over-year and generated $59.0 million in cash from operating activities during 2017. Finally, net income rose significantly for both the fourth quarter and the year, aided in part by an estimated $3.4 million tax benefit recorded by the Company upon the enactment of the Tax Cut and Jobs Act on December 22, 2017.”
Mr. Wintemute concluded: “Our outlook for the current year is positive. Within our crop business, we expect that our leading position in the U.S. potato market will remain firm, while our high-margin fruit & vegetable segment is expected to constitute over 30% of our overall business in 2018. In addition, we expect relative stability in the Midwest corn markets which should drive sales of our corn soil insecticides and our expanded herbicide offerings. While U.S. cotton and peanut acreage may be flat-to-slightly down compared to 2017, we expect stable sales in both of these crops. Our non-crop business is expected to expand by nearly 50% with the incorporation of the new OHP horticultural acquisition for the full year in 2018. Internationally, we are poised for modest growth of our traditional product portfolio, boosted by full-year sales of our Latin American acquisition Grupo AgriCenter. While addressing these markets, we will continue to plan for the future by investing in technology innovation, new products and portfolio defense. Please join us on our earnings call, where we will give you more color on our business.”
Eric Wintemute, Chairman & CEO, Bob Trogele, EVP & COO and David T. Johnson, VP & CFO, will conduct a conference call focusing on the financial results and strategic themes at 4:30 pm ET on Monday, March 12, 2018. 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 and the Standard & Poor’s Small Cap 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 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.
William A. Kuser, Director of Investor Relations
The Equity Group Inc.