EX-99.1 2 dex991.htm PRESS RELEASE Press release

Exhibit 99.1

LOGO

FOR IMMEDIATE RELEASE

AMERICAN VANGUARD REPORTS FIRST QUARTER 2008 RESULTS

Performance reflects unfavorable weather, higher input costs and growth expenditures

Newport Beach, CA – May 8, 2008 – American Vanguard Corporation (NYSE:AVD), today announced financial results for the first quarter ended March 31, 2008.

2008 First Quarter Financial Highlights – versus – 2007 First Quarter

 

   

Net sales equaled the prior year period at $40.9 million.

 

   

Net income was $1.7 million as compared to $2.1 million.

 

   

Earnings per diluted share were $0.06, versus $0.08 in the comparable period of 2007.

Eric Wintemute, President and CEO of American Vanguard, stated: “As indicated in our business performance update issued on April 1st, our first quarter sales were affected by weather related delays in the planting of the 2008 Midwest corn crop. In addition, our earnings have been influenced by escalating raw material and fuel costs as well as expenditures related to several important growth initiatives. We are taking steps to address recent cost increases through pricing and efficiency improvements and are moving ahead with our growth-oriented programs. The benefits of these efforts should be increasingly evident later this year, in calendar 2009 and beyond.”

Important first quarter highlights:

 

 

 

First quarter sales of the Company’s extremely effective herbicide Impact® were nearly double the prior year’s first quarter result, which is an indication of the superior performance and increased grower recognition of this product. We expect Impact to continue gaining market share as a label-specified complement to the widespread use of Monsanto’s Roundup® (glyphosate) products.

 

   

Our corn soil insecticides, which are primarily applied at the time of seed planting, did not experience the previously expected growth in the first quarter, due to widespread weather-related delays in the planting of Midwest corn crops.

 

 

 

Business remains solid in many non-corn markets, such as potatoes, vegetables, fruits, and specialty turf & ornamental markets, niches in which we have particular expertise. Strong continuing sales of our traditional Metam fumigant products, substantial new sales gains in our Avenge® herbicide for use in wheat crops, and several new offerings, such as the recently acquired PCNB fungicide and Orthene® insecticide, should further extend our penetration of these high-value segments.

 

 

 

Sales of Bidrin®, our cotton insecticide, were equal to the prior year’s first quarter, although full-year sales expectations continue to be soft due to the continuing acreage shifts from cotton to other crops.

 

   

Our international sales continued to grow in the first quarter with substantial gains in Mexico. As we have previously indicated, the Central and South American regions offer considerable opportunities for us, and we will continue to dedicate effort and resources to capitalize on this expanding market.


Mr. Wintemute concluded, “Despite weather related delays in first quarter sales, we remain focused on maximizing American Vanguard’s financial performance for 2008. Over the next several quarters, increased sales of Impact herbicide, incremental business in PCNB fungicide and Orthene insecticide and our continued international expansion should all be positive contributors. We believe the significant benefits that our products provide for enhancing productivity, improving crop quality, and impeding resistance development bode well for the Company’s long-term performance.”

 

* Roundup is a registered trademark of Monsanto Corporation
* Orthene is a registered trademark of OMS Investments, Inc.
* Impact, Avenge, and Bidrin are registered trademarks of AMVAC Chemical Corporation

Conference Call

Eric Wintemute, President and CEO, and David Johnson, CFO, will conduct a conference call focusing on the financial results at 12:00pm EDT on Thursday, May 8, 2008. 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 # 46332166). 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, 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:    -OR-      AVD’S INVESTOR RELATIONS FIRM
American Vanguard Corporation         The Equity Group Inc.
William A. Kuser, Director of Investor Relations         www.theequitygroup.com
(949) 260-1200         Lena Cati
williamk@amvac-chemical.com         Lcati@equityny.com
        (212) 836-9611


AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands except per share amounts)

(Unaudited)

 

     For the three months
ended March 31
 
     2008     2007  

Net sales

   $ 40,934     $ 40,906  

Cost of sales

     23,198       22,489  
                

Gross profit

     17,736       18,417  

Operating expenses

     13,946       12,999  
                

Operating income

     3,790       5,418  

Interest expense

     1,015       1,895  

Interest income

     —         (5 )

Interest capitalized

     (50 )     (16 )
                

Income before income tax

     2,825       3,544  

Income tax expense

     1,092       1,418  
                

Net income

   $ 1,733     $ 2,126  
                

Earnings per common share—basic

   $ .07     $ .08  
                

Earnings per common share—assuming dilution

   $ .06     $ .08  
                

Weighted average shares outstanding—basic

     26,464       26,163  
                

Weighted average shares outstanding—assuming dilution

     27,466       27,330  
                


AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands)

ASSETS

 

     Mar. 31,
2008
   Dec. 31,
2007
     (Unaudited)    (Note*)

Current assets:

     

Cash and cash equivalents

   $ 2,289    $ 3,201

Receivables:

     

Trade

     64,342      55,925

Other

     630      645
             
     64,972      56,570
             

Inventories

     90,284      63,455

Prepaid expenses

     3,658      2,214
             

Total current assets

     161,203      125,440

Property, plant and equipment, net

     38,284      36,330

Land held for development

     211      211

Intangible assets

     92,470      85,318

Other assets

     1,293      1,282
             
   $ 293,461    $ 248,581
             

 

(Continued)


AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands)

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

     Mar. 31,
2008
    Dec. 31,
2007
 
     (Unaudited)     (Note*)  

Current liabilities:

    

Current installments of long-term debt

   $ 4,106     $ 4,106  

Accounts payable

     20,505       13,796  

Accrued program costs

     20,425       24,191  

Accrued expenses and other payables

     6,579       6,355  

Income taxes payable

     1,886       1,848  
                

Total current liabilities

     53,501       50,296  

Long-term debt, excluding current installments

     96,628       56,155  

Deferred income taxes

     2,391       2,391  
                

Total liabilities

     152,520       108,842  
                

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 28,706,248 shares at March 31, 2008 and 28,650,829 shares at December 31, 2007

     2,871       2,865  

Additional paid-in capital

     37,293       36,551  

Accumulated other comprehensive income

     108       64  

Retained earnings

     103,414       103,004  
                
     143,686       142,484  

Less treasury stock, at cost, 2,226,796 shares at March 31, 2008 and December 31, 2007

     (2,745 )     (2,745 )
                

Total stockholders’ equity

     140,941       139,739  
                
   $ 293,461     $ 248,581  
                

Note: The balance sheet at December 31, 2007 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, 2008 and 2007

(Unaudited)

 

Increase (decrease) in cash

   2008     2007  

Cash flows from operating activities:

    

Net income

   $ 1,733     $ 2,126  

Adjustments to reconcile net income to net cash used in operating activities:

    

Depreciation and amortization

     2,762       2,098  

Stock-based compensation expense related to stock options and employee stock purchases

     235       264  

Changes in assets and liabilities associated with operations:

    

Increase in receivables

     (8,185 )     (3,217 )

Decrease in provision for doubtful accounts

     (217 )     —    

Increase in inventories

     (26,829 )     (3,035 )

(Increase) Decrease in prepaid expenses and other assets

     (1,483 )     382  

Increase (Decrease) in accounts payable

     6,859       (3,543 )

Decrease in other current liabilities

     (4,977 )     (818 )
                

Net cash used in operating activities

     (30,102 )     (5,743 )
                

Cash flows from investing activities:

    

Capital expenditures

     (3,631 )     (680 )

Acquisitions of intangible assets

     (8,209 )     (1,576 )

Net decrease in other non-current assets

     —         25  
                

Net cash used in investing activities

     (11,840 )     (2,231 )
                

Cash flows from financing activities:

    

Net borrowings under line of credit agreement

     41,500       9,000  

Principal payments on long-term debt

     (1,027 )     (526 )

Proceeds from the issuance of common stock (exercise of stock options and sale of stock under ESPP)

     513       418  
                

Net cash provided by financing activities

     40,986       8,892  
                

Net (decrease) increase in cash

     (956 )     918  

Cash and cash equivalents at beginning of year

     3,201       1,844  

Effect of exchange rate changes on cash

     44       100  
                

Cash and cash equivalents

   $ 2,289     $ 2,862