EX-99.1 2 dex991.htm PRESS RELEASE Press release

Exhibit 99.1

LOGO

FOR IMMEDIATE RELEASE

AMERICAN VANGUARD REPORTS SECOND QUARTER 2008 RESULTS

Strong Quarterly Performance Reflects International Expansion, New Product Additions and Specialty

Product Strength

Newport Beach, CA – August 7, 2008 – American Vanguard Corporation (NYSE:AVD), today announced financial results for the second quarter and six month period ended June 30, 2008.

Fiscal 2008 Second Quarter Financial Highlights – versus Fiscal 2007 Second Quarter

 

   

Net sales increased 16% to $57.9 million.

 

   

Net income grew 21% to $4.3 million.

 

   

Earnings per diluted share increased 23% to $0.16.

Fiscal 2008 First Half Financial Highlights – versus Fiscal 2007 First Half

 

   

Net sales increased by 9% to $98.8 million.

 

   

Net income improved by 6% to $6.1 million.

 

   

Earnings per diluted share were $0.22, versus $0.21.

Eric Wintemute, President and CEO of American Vanguard, stated: “We are very pleased with the strong second quarter performance, which reflects strength in our international business, the benefits of recent product acquisitions and the expansion of our non-crop specialty products segment. Sales in most major agricultural end-uses met expected levels, and our initiatives to gain larger positions in some of our key markets are progressing. Results continue to be influenced by rising raw material costs, utility rates and fuel costs. We continue to address these cost increases by focusing on internal cost savings, efficiency improvements and where necessary, raising product prices to maintain appropriate profit margins.”

Among the most important performance highlights:

 

   

Solid continuing sales of our soil fumigant products, and a good performance of our recently acquired fungicides and insecticides, contributed to a strong quarterly sales performance for the Company.

 

   

Our international sales continued to grow in the second quarter with substantial sales gains in Mexico. Central and South America offer excellent opportunities for us, and we are establishing a physical presence in Costa Rica to support regional growth for the future.

 

   

Our non-crop specialty products sales grew strongly during the second quarter, due to the seasonal placement of our mosquito adulticide product line and further penetration of the turf and ornamental market segment.

 

   

Sales of our main cotton protection products exceeded the prior year’s sales, although full-year sales will likely remain soft due to reduced forecast cotton acreage.

 

 

 

After achieving higher than expected sales of our corn herbicide Impact® in the first quarter, demand fell short of our internal expectations in the second quarter. Nevertheless, we continue to witness superior in-field performance and increasing grower recognition of this product.

Mr. Wintemute concluded, “We remain optimistic about our prospects for the balance of 2008 and for the 2009 North American spring planting season. Over the next several quarters, we expect to further strengthen our international presence in existing markets and expand into new markets; achieve improved acceptance of our


herbicide and insecticide offerings in corn; experience solid demand in most of our primary end-use crop markets; and introduce new products in our non-crop segment for professional pest management. We will be taking initiatives to better exploit our North American manufacturing capability, producing products that are complex to manufacture and in which we have a demonstrated track record.”

Conference Call

Eric Wintemute, President and CEO and David T. Johnson, CFO, will conduct a conference call focusing on the financial results at 12:00 pm EDT / 9:00 am PDT on Thursday, August 7, 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 # 58383862). 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:    -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 June 30
    For the six months
ended June 30
 
     2008     2007     2008     2007  

Net sales

   $ 57,908     $ 50,028     $ 98,842     $ 90,934  

Cost of sales

     34,296       27,801       57,494       50,290  
                                

Gross profit

     23,612       22,227       41,348       40,644  

Operating expenses

     15,436       14,477       29,382       27,476  
                                

Operating income

     8,176       7,750       11,966       13,168  

Interest expense

     1,232       1,808       2,247       3,703  

Interest income

     (75 )     (28 )     (75 )     (33 )

Interest capitalized

     (58 )     (14 )     (108 )     (30 )
                                

Income before income taxes

     7,077       5,984       9,902       9,528  

Income tax expense

     2,735       2,393       3,827       3,811  
                                

Net income

   $ 4,342     $ 3,591     $ 6,075     $ 5,717  
                                

Earnings per common share—basic

   $ .16     $ .14     $ .23     $ .22  
                                

Earnings per common share—assuming dilution

   $ .16     $ .13     $ .22     $ .21  
                                

Weighted average shares outstanding—basic

     26,533       26,270       26,499       26,217  
                                

Weighted average shares outstanding—assuming dilution

     27,474       27,298       27,470       27,309  
                                


AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands)

ASSETS

 

     June 30,
2008
   Dec. 31,
2007
     (Unaudited)    (Note)

Current assets:

     

Cash and cash equivalents

   $ 4,741    $ 3,201

Receivables:

     

Trade

     51,801      55,925

Other

     971      645
             
     52,772      56,570
             

Inventories

     90,708      63,455

Prepaid expenses

     4,593      2,214
             

Total current assets

     152,814      125,440

Property, plant and equipment, net

     39,693      36,330

Land held for development

     211      211

Intangible assets

     93,781      85,318

Other assets

     1,653      1,282
             
   $ 288,152    $ 248,581
             


AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands)

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

     June 30,
2008
    Dec. 31,
2007
 
     (Unaudited)     (Note)  

Current liabilities:

    

Current installments of long-term debt

   $ 4,656     $ 4,106  

Accounts payable

     16,160       13,796  

Accrued program costs

     26,073       24,191  

Accrued expenses and other payables

     4,956       6,355  

Income taxes payable

     4,454       1,848  
                

Total current liabilities

     56,299       50,296  

Long-term debt, excluding current installments

     83,302       56,155  

Deferred income taxes

     2,391       2,391  
                

Total liabilities

     141,992       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 28,821,955 shares at June 30, 2008 and 28,650,829 shares at December 31, 2007

     2,882       2,865  

Additional paid-in capital

     37,822       36,551  

Accumulated other comprehensive income

     445       64  

Retained earnings

     107,756       103,004  
                
     148,905       142,484  

Less treasury stock, at cost, 2,226,796 shares at June 30, 2008 and December 31, 2007

     (2,745 )     (2,745 )
                

Total stockholders’ equity

     146,160       139,739  
                
   $ 288,152     $ 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 Six Months Ended June 30, 2008 and 2007

(Unaudited)

 

Increase (decrease) in cash

   2008     2007  

Cash flows from operating activities:

    

Net income

   $ 6,075     $ 5,717  

Adjustments to reconcile net income to net cash (used in) provided by operating activities:

    

Depreciation and amortization

     5,694       4,696  

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

     395       298  

Changes in assets and liabilities associated with operations:

    

Decrease in receivables

     3,798       28,113  

Increase in inventories

     (27,253 )     (2,430 )

Increase in prepaid expenses and other assets

     (2,451 )     (702 )

Increase (decrease) in accounts payable

     2,364       (3,576 )

Increase in other current liabilities

     3,089       5,812  
                

Net cash (used in) provided by operating activities

     (8,289 )     37,928  
                

Cash flows from investing activities:

    

Capital expenditures

     (6,645 )     (1,295 )

Acquisitions of intangible assets

     (9,048 )     (1,875 )

Net decrease in other non-current assets

       72  
                

Net cash used in investing activities

     (15,693 )     (3,098 )
                

Cash flows from financing activities:

    

Net borrowings under line of credit agreement

     28,000       (30,500 )

Principal payments on long-term debt

     (2,053 )     (2,053 )

Proceeds from the issuance of common stock (private equity placement, exercise of stock options and sale of stock under ESPP)

     893       1,249  

Payment of cash dividends

     (1,323 )     (1,047 )

Net cash provided by (used in) financing activities

     25,517       (32,351 )
                

Net increase in cash

     1,535       2,479  

Cash and cash equivalents at beginning of year

     3,201       1,844  

Effect of exchange rate changes on cash

     5       133  
                

Cash and cash equivalents as of June 30

   $ 4,741     $ 4,456  
                

Supplemental schedule of non-cash investing and financial activities:

On March 10, 2008, the Company announced that the Board of Directors declared a cash dividend of $0.05 per share. The dividend was distributed on April 15, 2008, to stockholders of record at the close of business on March 31, 2008. Cash dividends paid April 15, 2008 totaled approximately $1,323,000.

On March 13, 2007, the Board of Directors declared a cash dividend of $0.04 per share. The dividend was distributed on April 13, 2007 to stockholders of record at the close of business on March 30, 2007. Cash dividends paid April 13, 2007 totaled $1,047,000.

During the six months ended June 30, 2008, the Company completed the purchase of certain assets which totaled $2,350,000 of which $600,000 was paid in cash during the period. The balance of $1,750,000 is due at various times through May 2012.