Exhibit 99.1
FOR IMMEDIATE RELEASE
AMERICAN VANGUARD REPORTS THIRD QUARTER & NINE MONTH 2010 RESULTS
Newport Beach, CA – November 3, 2010 – American Vanguard Corporation (NYSE:AVD), today announced financial results for the three and nine month periods ended September 30, 2010.
Fiscal 2010 Third Quarter Financial Highlights – versus Fiscal 2009 Third Quarter:
| • | Net sales were $68.3 million compared to $66.4 million. |
| • | Net income was $3.6 million compared to $2.1 million. |
| • | Earnings per diluted share were $0.13 versus $0.08. |
Fiscal 2010 Nine Month Financial Highlights – versus Fiscal 2009 Nine Month Results:
| • | Net sales were $167.1 million compared to $158.5 million. |
| • | Net income was $7.1 million compared to $2.8 million. |
| • | Earnings per diluted share were $0.26 versus $0.10. |
Eric Wintemute, President and CEO of American Vanguard, stated: “We are pleased to report continuing improvement in our 2010 performance as stronger end-use demand and rising commodity prices have created a more attractive market this year. American Vanguard has already benefited from increased acreage in domestic cotton, where our strong market position in insecticides and harvest defoliants, have contributed significantly to our third quarter results. Similarly, we are poised to take advantage of a bullish corn market with our many soil insecticides and Impact® herbicide over the next few quarters.”
Mr. Wintemute continued: “During the current period, we have continued our emphasis on operational and financial discipline by restraining inventory level and maintaining a strong focus on control of overall debt levels which are more than $27 million lower than the same time one year ago. More importantly, we recorded improved financial performance despite the stop sale order that has halted domestic sales of our leading fungicide PCNB. Obviously, we would have had even stronger results in the quarter had the stop sale order been removed. We continue to do everything in our power to obtain relief so that we can resume domestic sales of what we continue to believe is a safe, economical and effective specialty product.”
Mr. Wintemute concluded: “Our entire organization is focused on market penetration, product profitability, operating efficiency, cost/expense management and maintaining balance sheet strength. Following on the heals of our acquisition of the cotton defoliant Def® from Bayer CropScience and the distribution agreement that we secured for the soil fumigant Basamid®, our Business Development team continues to pursue several product acquisition opportunities that could add significantly to our portfolio offering in future periods. We believe that we are well positioned to capitalize on improving market conditions.”
Conference Call
Eric Wintemute, President & CEO and David T. Johnson, CFO, will conduct a conference call focusing on the financial results at 12:00 pm ET / 9:00 am PT on Wednesday, November 3, 2010. Interested parties may participate in the call by dialing (201) 689-8349 – 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 theNews and Media section of the Company’s web site atwww.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 atwww.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.
| Company Contact: | Investor Representative | |
| 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
(Number in thousands except per share data)
(Unaudited)
| For the three months ended September 30 | For the nine months ended September 30 | |||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
Net sales | $ | 68,256 | $ | 66,371 | $ | 167,140 | $ | 158,493 | ||||||||
Cost of sales | 42,880 | 45,007 | 103,607 | 102,154 | ||||||||||||
Gross profit | 25,376 | 21,364 | 63,533 | 56,339 | ||||||||||||
Operating expenses | 18,976 | 17,470 | 49,780 | 49,570 | ||||||||||||
Operating income | 6,400 | 3,894 | 13,753 | 6,769 | ||||||||||||
Interest expense | 766 | 825 | 2,480 | 2,622 | ||||||||||||
Interest capitalized | (49 | ) | (12 | ) | (98 | ) | (38 | ) | ||||||||
Income before income taxes | 5,683 | 3,081 | 11,371 | 4,185 | ||||||||||||
Income tax expense | 2,072 | 984 | 4,290 | 1,393 | ||||||||||||
Net income | $ | 3,611 | $ | 2,097 | $ | 7,081 | $ | 2,792 | ||||||||
Earnings per common share—basic | $ | .13 | $ | .08 | $ | .26 | $ | .10 | ||||||||
Earnings per common share—assuming dilution | $ | .13 | $ | .08 | $ | .26 | $ | .10 | ||||||||
Weighted average shares outstanding—basic | 27,398 | 27,124 | 27,362 | 27,071 | ||||||||||||
Weighted average shares outstanding—assuming dilution | 27,663 | 27,609 | 27,643 | 27,660 | ||||||||||||
AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Number in thousands, except per share data)
| September 30, 2010 | Dec. 31, 2009 | |||||||
| (Unaudited) | (Note) | |||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 1,044 | $ | 383 | ||||
Receivables: | ||||||||
Trade, net of allowance for doubtful accounts of $475 and $636, respectively | 63,321 | 40,681 | ||||||
Other | 595 | 382 | ||||||
| 63,916 | 41,063 | |||||||
Inventories | 78,955 | 72,512 | ||||||
Prepaid expenses | 1,936 | 2,143 | ||||||
Income tax receivable | 1,748 | 4,132 | ||||||
Total current assets | 147,599 | 120,233 | ||||||
Property, plant and equipment, net | 40,542 | 39,196 | ||||||
Intangible assets | 86,675 | 86,973 | ||||||
Other assets | 7,346 | 8,866 | ||||||
| $ | 282,162 | $ | 255,268 | |||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Current installments of long-term debt | $ | 8,528 | $ | 8,528 | ||||
Accounts payable | 25,870 | 11,958 | ||||||
Accrued program costs | 29,705 | 27,188 | ||||||
Accrued expenses and other payables | 5,338 | 3,762 | ||||||
Total current liabilities | 69,441 | 51,436 | ||||||
Long-term debt, excluding current installments | 46,110 | 45,432 | ||||||
Other long-term liabilities | 59 | 192 | ||||||
Deferred income taxes | 5,121 | 5,121 | ||||||
Total liabilities | 120,731 | 102,181 | ||||||
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 29,659,478 shares at September 30, 2010 and 29,575,562 shares at December 31, 2009 | 2,966 | 2,958 | ||||||
Additional paid-in capital | 42,839 | 41,529 | ||||||
Accumulated other comprehensive income (loss) | (979 | ) | (1,743 | ) | ||||
Retained earnings | 119,758 | 113,496 | ||||||
| 164,584 | 156,240 | |||||||
Less treasury stock, at cost, 2,260,996 shares at September 30, 2010 and December 31, 2009 | (3,153 | ) | (3,153 | ) | ||||
Total stockholders’ equity | 161,431 | 153,087 | ||||||
| $ | 282,162 | $ | 255,268 | |||||
AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Numbers in thousands, except share data)
For The Nine Months Ended September 30, 2010 and 2009
(Unaudited)
Increase (decrease) in cash | 2010 | 2009 | ||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 7,081 | $ | 2,792 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization of fixed and intangible assets | 8,208 | 8,060 | ||||||
Amortization of other long-term assets | 2,418 | 2,064 | ||||||
Stock-based compensation expense related to stock options and employee stock purchases | 832 | 895 | ||||||
Changes in assets and liabilities associated with operations: | ||||||||
Increase in receivables | (22,853 | ) | (4,715 | ) | ||||
Increase in inventories | (6,443 | ) | (8,849 | ) | ||||
Increase in prepaid expenses and other assets | (691 | ) | (2,281 | ) | ||||
Increase in accounts payable | 14,559 | 2,351 | ||||||
Increase in other current liabilities | 5,796 | 4,033 | ||||||
Net cash provided by operating activities | 8,907 | 4,350 | ||||||
Cash flows from investing activities: | ||||||||
Capital expenditures | (6,256 | ) | (3,746 | ) | ||||
Intangible expenditures | (3,000 | ) | — | |||||
Net cash used in investing activities | (9,256 | ) | (3,746 | ) | ||||
Cash flows from financing activities: | ||||||||
Net borrowings under line of credit agreement | 7,200 | 3,000 | ||||||
Principal payments on long-term debt | (6,522 | ) | (3,080 | ) | ||||
Proceeds from the issuance of common stock (sale of stock under ESPP) | 486 | 468 | ||||||
Payment of cash dividends | (271 | ) | (1,341 | ) | ||||
Net cash provided (used) by financing activities | 893 | (953 | ) | |||||
Net increase (decrease) in cash | 544 | (349 | ) | |||||
Cash and cash equivalents at beginning of period | 383 | 1,229 | ||||||
Effect of exchange rate changes on cash | 117 | 21 | ||||||
Cash and cash equivalents as of September 30, | $ | 1,044 | $ | 901 | ||||