EX-99.1 2 dex991.htm PRESS RELEASE Press Release

Exhibit 99.1

LOGO

FOR IMMEDIATE RELEASE

AMERICAN VANGUARD REPORTS SECOND QUARTER & MID-YEAR 2010 RESULTS

Quarterly & First Half Performance Reflects Improved Market Demand and Continued Balance Sheet Focus

Newport Beach, CA – August 5, 2010 – American Vanguard Corporation (NYSE:AVD), today announced financial results for the second quarter and six month period ended June 30, 2010.

Fiscal 2010 Second Quarter Financial Highlights – versus Fiscal 2009 Second Quarter:

 

   

Net sales increased 10% to $52.2 million

 

   

Net income for the period was $1.6 million

 

   

Earnings per diluted share were $0.06 versus breakeven in the prior year quarter

Fiscal 2010 First Half Financial Highlights – versus Fiscal 2009 First Half

 

   

Net sales increased 7% to $98.9 million

 

   

Net income increased to $3.5 million

 

   

Earnings per diluted share were $0.13 versus $0.03 in the prior year’s first half

Note: Complete details are available in the financial schedules attached to this press release

Eric Wintemute, President and CEO of American Vanguard, stated: “We are pleased to report performance for the second quarter and the first half of 2010 that reflects improved market conditions and our own focus on continued financial discipline. Better farm credit availability, more favorable weather during Midwest planting, increased cotton and peanut acres and the replenishment of depleted distributor inventories have fueled improved demand for our products. To satisfy this demand, we have increased output at our domestic production facilities, and the resulting higher utilization rates have allowed us to more fully absorb the fixed overhead costs of these sites during the second quarter. While increased manufacturing activity has had a positive effect on gross margins, this effect has been offset somewhat by heavy pricing pressure on our three generic product lines.”

Mr. Wintemute continued: “In keeping with our promise to strengthen and maintain a healthy balance sheet, we have controlled our inventories very judiciously—with only a slight $2 million expansion during the spring season when inventory increases are traditionally much more significant. Our management of working capital and continuing cash generation have allowed us to steadily pay down our debt. Additionally, during the quarter, we added Wells Fargo bank to our lending syndicate (led by Bank of the West) which continues to support and encourage the growth of our business.”


Mr. Wintemute concluded: “We will continue to pursue the acquisition of appropriately-priced, branded products, similar to our recent purchase of the cotton defoliant Def® from Bayer CropScience, as we assemble a broader product offering in key crops. In the first half of next year, we expect to commercialize a superior potato sprout inhibitor, called SmartBlock®, which will emerge from our new product development program. We believe that adding high-value/high-margin products to our portfolio, focusing our sales and marketing organization on customer needs, and maintaining financial discipline, will continue to be important elements of our success.”

Conference Call

Eric Wintemute, President & CEO and David T. Johnson, VP & CFO, will conduct a conference call focusing on the financial results at 12:00 pm EDT / 9:00 am PDT on Thursday, August 5, 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 # 91686704). 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:

American Vanguard Corporation

William A. Kuser, Director of Investor Relations

(949) 260-1200

williamk@amvac-chemical.com

   -OR-   

AVD’S INVESTOR RELATIONS FIRM

The Equity Group Inc.

www.theequitygroup.com

Lena Cati

Lcati@equityny.com

(212) 836-9611


AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Number in thousands except per share data)

(Unaudited)

 

     For the three months
ended June 30
    For the six months
ended June 30
 
     2010     2009     2010     2009  

Net sales

   $ 52,172      $ 47,485      $ 98,884      $ 92,122   

Cost of sales

     32,939        31,066        60,727        57,147   
                                

Gross profit

     19,233        16,419        38,157        34,975   

Operating expenses

     15,636        15,537        30,804        32,100   
                                

Operating income

     3,597        882        7,353        2,875   

Interest expense

     953        911        1,714        1,797   

Interest capitalized

     (39     (5     (49     (26
                                

Income (loss) before income taxes

     2,683        (24     5,688        1,104   

Income tax expense (benefit)

     1,040        (20     2,218        409   
                                

Net income (loss)

   $ 1,643      $ (4   $ 3,470      $ 695   
                                

Earnings per common share—basic

   $ .06      $ —        $ .13      $ .03   
                                

Earnings per common share—assuming dilution

   $ .06      $ —        $ .13      $ .03   
                                

Weighted average shares outstanding—basic

     27,343        27,081        27,344        27,043   
                                

Weighted average shares outstanding—assuming dilution

     27,650        27,081        27,633        27,701   
                                


AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Number in thousands, excerpt per share data)

 

     June 30,
2010
    Dec. 31,
2009
 
     (Unaudited)     (Note)  

Current assets:

    

Cash and cash equivalents

   $ 929      $ 383   

Receivables:

    

Trade, net of allowance for doubtful accounts of $640 and $635, respectively

     43,397        40,681   

Other

     206        382   
                
     43,603        41,063   
                

Inventories

     74,539        72,512   

Prepaid expenses

     2,105        2,143   

Income tax receivable

     3,105        3,575   
                

Total current assets

     124,281        119,676   

Property, plant and equipment, net

     40,594        39,196   

Intangible assets

     84,744        86,973   

Other assets

     8,593        8,866   
                
   $ 258,212      $ 254,711   
                
LIABILITIES AND STOCKHOLDERS’ EQUITY     

Current liabilities:

    

Current installments of long-term debt

   $ 8,528      $ 8,528   

Accounts payable

     15,578        11,401   

Accrued program costs

     24,509        27,188   

Accrued expenses and other payables

     5,076        3,762   
                

Total current liabilities

     53,691        50,879   

Long-term debt, excluding current installments

     41,558        45,432   

Other long-term liabilities

     192        192   

Deferred income taxes

     5,121        5,121   
                

Total liabilities

     100,562        101,624   
                

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 29,634,653 shares at June 30, 2010 and 29,575,562 shares at December 31, 2009

     2,963        2,958   

Additional paid-in capital

     42,305        41,529   

Accumulated other comprehensive income (loss)

     (1,160     (1,743

Retained earnings

     116,695        113,496   
                
     160,803        156,240   

Less treasury stock, at cost, 2,260,996 shares at June 30, 2010 and December 31, 2009

     (3,153     (3,153
                

Total stockholders’ equity

     157,650        153,087   
                
   $ 258,212      $ 254,711   
                

Note: The balance sheet at December 31, 2009 has been derived from the audited financial statements at that date.


AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Numbers in thousands, except share data)

For The Six Months Ended June 30, 2010 and 2009

(Unaudited)

 

Increase (decrease) in cash

   2010     2009  

Cash flows from operating activities:

    

Net income

   $ 3,470      $ 695   

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

    

Depreciation and amortization of fixed and intangible assets

     5,444        5,441   

Amortization of other long-term assets

     1,566        1,377   

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

     504        580   

Changes in assets and liabilities associated with operations:

    

(Increase) Decrease in receivables

     (2,540     10,217   

Increase in inventories

     (2,027     (21,808

Increase in prepaid expenses and other assets

     (785     (2,095

Increase (Decrease) in accounts payable

     4,581        (3,155

Decrease in other current liabilities

     (1,786     (3,443
                

Net cash provided by (used in) operating activities

     8,427        (12,191
                

Cash flows from investing activities:

    

Capital expenditures

     (4,613     (2,249
                

Net cash used in investing activities

     (4,613     (2,249
                

Cash flows from financing activities:

    

Net borrowings under line of credit agreement

     600        17,500   

Principal payments on long-term debt

     (4,053     (2,053

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

     277        238   

Payment of cash dividends

     (271     (1,341
                

Net cash (used) provided by financing activities

     (3,447     14,344   
                

Net increase (decrease) in cash

     367        (96

Cash and cash equivalents at beginning of period

     383        1,229   

Effect of exchange rate changes on cash

     179        173   
                

Cash and cash equivalents as of June 30,

   $ 929      $ 1,306