|
09.11.2020 22:02:00
|
American Vanguard Reports Third Quarter and Nine-Month 2020 Results
American Vanguard Corporation (NYSE:AVD), today announced financial results for the third quarter and nine months ended September 30, 2020.
Financial Highlights Fiscal 2020 Third Quarter – versus Fiscal 2019 Third Quarter
- Net sales of $117 million in 2020, compared with $125 million in 2019
- Net income of $2.9 million in 2020, compared with $3.1 million in 2019
- Earnings per diluted share of $0.10 in 2020, compared with $0.11 in 2019
- EBITDA1 of $10.4 million in 2020, compared with $12.4 million in 2019
Financial Highlights Fiscal 2020 Nine Months – versus Fiscal 2019 Nine Months
- Net sales of $318 million in 2020, compared with $338 million in 2019
- Net income of $7.3 million in 2020, compared with $10.2 million in 2019
- Earnings per diluted share of $0.25 in 2020, compared with $0.34 in 2019
- EBITDA of $30.8 million in 2020, compared to $36.9 million in 2019
Eric Wintemute, Chairman and CEO of American Vanguard commented, "Our net income for the third quarter was nearly even with that of the comparable period in 2019, despite a modest decline in our top line due largely to conservative procurement in the distribution channel, lower commodity prices and a strained farm economy. During the quarter we continued to maintain tight control over operating expenses, closely manage working capital and optimize our manufacturing assets. We also benefited from lower interest and tax expenses. While the first nine months of 2020 trended below those of 2019, we have recorded sequential top-line improvement since the start of the year in spite of a global pandemic.”
Mr. Wintemute continued, "Looking forward into the fourth quarter, we are already seeing greater optimism in the Agriculture sector spurred, in part, by rising crop commodity prices for corn, soybeans, and cotton, which bodes well for improved grower profitability. In the Midwest, with less crop rotation and more continuous corn planting, we are also beginning to see a resurgence of soil insect pressure. In addition, demand for our industry-leading soil fumigation products continues to rise. Based upon these trends and current sales activity, barring unforeseen weather or pandemic factors, we are encouraged by our prospects for the fourth quarter and into the 2021 season.”
Mr. Wintemute concluded, "While endeavoring to maximize our financial performance, we continue to pursue strategic initiatives in technology development, portfolio expansion and market access. Please listen in to our upcoming earnings call during which I will be devoting my time to our three-to-five-year outlook with a particular focus on new product development, our growing portfolio of green products and our SIMPAS prescription application technology.”
Conference Call
Eric Wintemute, Chairman & CEO, Bob Trogele EVP & COO and David T. Johnson, VP & CFO, will conduct a conference call focusing on the financial results at 4:30 pm ET / 1:30 pm PT on Monday, November 9, 2020. Interested parties may participate in the call by dialing (800) 381 7839 or (212) 231-2900 – please dial 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 Company’s web site at www.american-vanguard.com. To listen to the live webcast, which this quarter will be accompanied by slides, go to the web site at least 15 minutes early to register, download and install any necessary audio software. Additionally, presentation slides will be available for download at http://www.american-vanguard.com. 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.
AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES |
||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
||||||||
(In thousands, except share data) |
||||||||
(Unaudited) |
||||||||
ASSETS |
||||||||
|
|
September 30,
|
|
December 31,
|
||||
Current assets: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
9,581 |
|
$ |
6,581 |
||
Receivables: |
|
|
|
|
|
|
|
|
Trade, net of allowance for doubtful accounts of $3,046 and $2,300, respectively |
|
|
145,374 |
|
|
136,075 |
||
Other |
|
|
9,064 |
|
|
|
16,949 |
|
Total receivables, net |
|
|
154,438 |
|
|
153,024 |
||
Inventories, net |
|
|
176,287 |
|
|
163,313 |
||
Prepaid expenses |
|
|
10,738 |
|
|
10,457 |
|
|
Income taxes receivable |
|
|
1,972 |
|
|
2,824 |
||
Total current assets |
|
|
353,016 |
|
|
336,199 |
||
Property, plant and equipment, net |
|
|
59,801 |
|
|
56,521 |
||
Operating lease right-of-use assets |
|
|
12,128 |
|
|
|
11,258 |
|
Intangible assets, net of amortization |
|
|
191,133 |
|
|
|
198,377 |
|
Goodwill |
|
|
40,737 |
|
|
|
46,557 |
|
Other assets |
|
|
18,926 |
|
|
|
21,186 |
|
Total assets |
|
$ |
675,741 |
|
|
$ |
670,098 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
Current liabilities: |
|
|
|
|
|
|
|
|
Current installments of other liabilities |
|
$ |
210 |
|
|
$ |
1,513 |
|
Accounts payable |
|
|
61,283 |
|
|
|
64,881 |
|
Deferred revenue |
|
|
5,689 |
|
|
|
6,826 |
|
Accrued program costs |
|
|
67,745 |
|
|
|
47,699 |
|
Accrued expenses and other payables |
|
|
11,266 |
|
|
|
12,815 |
|
Operating lease liabilities, current |
|
|
4,312 |
|
|
|
4,904 |
|
Total current liabilities |
|
|
150,505 |
|
|
|
138,638 |
|
Long-term debt, net of deferred loan fees |
|
|
149,362 |
|
|
|
148,766 |
|
Operating lease liabilities, long-term |
|
|
7,979 |
|
|
|
6,503 |
|
Other liabilities, excluding current installments |
|
|
9,087 |
|
|
|
12,890 |
|
Deferred income tax liabilities |
|
|
14,014 |
|
|
|
19,145 |
|
Total liabilities |
|
|
330,947 |
|
|
325,942 |
||
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 33,337,075 shares at September 30, 2020 and 33,233,614 shares at December 31, 2019 |
|
|
3,335 |
|
|
3,324 |
||
Additional paid-in capital |
|
|
93,273 |
|
|
90,572 |
|
|
Accumulated other comprehensive loss |
|
|
(14,520 |
) |
|
|
(5,698 |
) |
Retained earnings |
|
|
280,866 |
|
|
274,118 |
||
|
|
|
362,954 |
|
|
362,316 |
||
Less treasury stock at cost, 3,061,040 shares at September 30, 2020 and December 31, 2019 |
|
|
(18,160 |
) |
|
|
(18,160 |
) |
Total stockholders’ equity |
|
|
344,794 |
|
|
344,156 |
||
Total liabilities and stockholders' equity |
|
$ |
675,741 |
|
$ |
670,098 |
||
AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES |
||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||||||||||||
(In thousands, except per share data) |
||||||||||||||||
(Unaudited) |
||||||||||||||||
|
|
For the Three-Months
|
|
|
For the Nine-Months
|
|
||||||||||
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
||||
Net sales |
|
$ |
117,439 |
|
|
$ |
124,884 |
|
|
$ |
317,956 |
|
|
$ |
337,664 |
|
Cost of sales |
|
|
74,174 |
|
|
|
77,421 |
|
|
|
196,004 |
|
|
|
206,846 |
|
Gross profit |
|
|
43,265 |
|
|
|
47,463 |
|
|
|
121,952 |
|
|
|
130,818 |
|
Operating expenses |
|
|
38,782 |
|
|
|
40,677 |
|
|
|
108,882 |
|
|
|
110,839 |
|
Operating income |
|
|
4,483 |
|
|
|
6,786 |
|
|
|
13,070 |
|
|
|
19,979 |
|
Interest expense, net |
|
|
1,022 |
|
|
|
2,070 |
|
|
|
3,804 |
|
|
|
5,606 |
|
Income before provision for income taxes and loss on equity method investment |
|
|
3,461 |
|
|
|
4,716 |
|
|
|
9,266 |
|
|
|
14,373 |
|
Income tax expense |
|
|
492 |
|
|
|
1,474 |
|
|
|
1,852 |
|
|
|
4,059 |
|
Income before loss on equity method investment |
|
|
2,969 |
|
|
|
3,242 |
|
|
|
7,414 |
|
|
|
10,314 |
|
Loss from equity method investment |
|
|
42 |
|
|
|
89 |
|
|
|
80 |
|
|
|
149 |
|
Net income attributable to American Vanguard |
|
$ |
2,927 |
|
|
$ |
3,153 |
|
|
$ |
7,334 |
|
|
$ |
10,165 |
|
Earnings per common share—basic |
|
$ |
.10 |
|
|
$ |
.11 |
|
|
$ |
.25 |
|
|
$ |
.35 |
|
Earnings per common share—assuming dilution |
|
$ |
.10 |
|
|
$ |
.11 |
|
|
$ |
.25 |
|
|
$ |
.34 |
|
Weighted average shares outstanding—basic |
|
|
29,501 |
|
|
|
29,057 |
|
|
|
29,401 |
|
|
|
29,013 |
|
Weighted average shares outstanding—assuming dilution |
|
|
29,973 |
|
|
|
29,650 |
|
|
|
29,926 |
|
|
|
29,591 |
|
AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES |
||||||||||||||||
ANALYSIS OF SALES |
||||||||||||||||
For the three and nine months ended September 30, 2020 and 2019 |
||||||||||||||||
(In thousands) |
||||||||||||||||
(Unaudited) |
||||||||||||||||
|
|
For the three-months
|
|
|
|
|
|
|
|
|
|
|||||
|
|
2020 |
|
|
2019 |
|
|
Change |
|
% Change |
||||||
Net sales: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
US crop |
|
$ |
48,361 |
|
|
$ |
55,072 |
|
|
$ |
(6,711 |
) |
|
|
-12 |
% |
US non-crop |
|
|
18,251 |
|
|
|
18,995 |
|
|
|
(744 |
) |
|
|
-4 |
% |
US total |
|
|
66,612 |
|
|
|
74,067 |
|
|
|
(7,455 |
) |
|
|
-10 |
% |
International |
|
|
50,827 |
|
|
|
50,817 |
|
|
|
10 |
|
|
|
0 |
% |
Net sales |
|
$ |
117,439 |
|
|
$ |
124,884 |
|
|
$ |
(7,445 |
) |
|
|
-6 |
% |
Gross profit: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
US crop |
|
$ |
20,146 |
|
|
$ |
23,710 |
|
|
$ |
(3,564 |
) |
|
|
-15 |
% |
US non-crop |
|
|
8,758 |
|
|
|
9,860 |
|
|
|
(1,102 |
) |
|
|
-11 |
% |
US total |
|
|
28,904 |
|
|
|
33,570 |
|
|
|
(4,666 |
) |
|
|
-14 |
% |
International |
|
|
14,361 |
|
|
|
13,893 |
|
|
|
468 |
|
|
|
3 |
% |
Total gross profit |
|
$ |
43,265 |
|
|
$ |
47,463 |
|
|
$ |
(4,198 |
) |
|
|
-9 |
% |
|
|
For the nine-months
|
|
|
|
|
|
|
|
|
|
|||||
|
|
2020 |
|
|
2019 |
|
|
Change |
|
|
% Change |
|
||||
Net sales: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
US crop |
|
$ |
148,630 |
|
|
$ |
158,068 |
|
|
$ |
(9,438 |
) |
|
|
-6 |
% |
US non-crop |
|
|
37,881 |
|
|
|
42,068 |
|
|
|
(4,187 |
) |
|
|
-10 |
% |
US total |
|
|
186,511 |
|
|
|
200,136 |
|
|
|
(13,625 |
) |
|
|
-7 |
% |
International |
|
|
131,445 |
|
|
|
137,528 |
|
|
|
(6,083 |
) |
|
|
-4 |
% |
Net sales |
|
$ |
317,956 |
|
|
$ |
337,664 |
|
|
$ |
(19,708 |
) |
|
|
-6 |
% |
Gross profit: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
US crop |
|
$ |
68,119 |
|
|
$ |
69,059 |
|
|
$ |
(940 |
) |
|
|
-1 |
% |
US non-crop |
|
|
18,535 |
|
|
|
21,444 |
|
|
|
(2,909 |
) |
|
|
-14 |
% |
US total |
|
|
86,654 |
|
|
|
90,503 |
|
|
|
(3,849 |
) |
|
|
-4 |
% |
International |
|
|
35,298 |
|
|
|
40,315 |
|
|
|
(5,017 |
) |
|
|
-12 |
% |
Total gross profit |
|
$ |
121,952 |
|
|
$ |
130,818 |
|
|
$ |
(8,866 |
) |
|
|
-7 |
% |
AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES |
||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||
(In thousands) |
||||||||
(Unaudited) |
||||||||
|
|
For the Nine-Months Ended
|
|
|||||
|
|
2020 |
|
|
2019 |
|
||
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
Net income |
|
$ |
7,334 |
|
|
$ |
10,165 |
|
Adjustments to reconcile net income to net cash provided by (used in) operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization of property, plant and equipment and intangible assets |
|
|
14,584 |
|
|
|
13,892 |
|
Amortization of other long-term assets and deferred loan fees |
|
|
3,185 |
|
|
|
3,174 |
|
Amortization of discounted liabilities |
|
|
9 |
|
|
|
41 |
|
Provision for bad debts |
|
|
777 |
|
|
|
728 |
|
Revision of deferred consideration |
|
|
— |
|
|
|
(3,539 |
) |
Stock-based compensation |
|
|
3,776 |
|
|
|
5,159 |
|
Change in deferred income taxes |
|
|
(1,757 |
) |
|
|
(459 |
) |
Change in investment fair value |
|
|
(281 |
) |
|
|
— |
|
Loss from equity method investment |
|
|
80 |
|
|
|
149 |
|
Net foreign currency adjustment |
|
|
(711 |
) |
|
|
550 |
|
Changes in assets and liabilities associated with operations: |
|
|
|
|
|
|
|
|
Increase in net receivables |
|
|
(5,089 |
) |
|
|
(15,839 |
) |
Increase in inventories |
|
|
(16,941 |
) |
|
|
(19,713 |
) |
Increase in prepaid expenses and other assets |
|
|
(532 |
) |
|
|
(849 |
) |
Decrease (increase) in income tax receivable |
|
|
873 |
|
|
|
(4,477 |
) |
Increase in net operating lease liability |
|
|
14 |
|
|
|
117 |
|
Decrease in accounts payable |
|
|
(1,759 |
) |
|
|
(5,548 |
) |
Decrease in deferred revenue |
|
|
(1,079 |
) |
|
|
(19,800 |
) |
Increase in accrued program costs |
|
|
20,058 |
|
|
|
20,163 |
|
Decrease in other payables and accrued expenses |
|
|
(3,344 |
) |
|
|
(4,967 |
) |
Net cash provided by (used in) operating activities |
|
|
19,197 |
|
|
|
(21,053 |
) |
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
Capital expenditures |
|
|
(8,988 |
) |
|
|
(10,546 |
) |
Acquisition of business, product lines, and intangible assets |
|
|
(3,942 |
) |
|
|
(31,836 |
) |
Investment |
|
|
(1,190 |
) |
|
|
— |
|
Net cash used in investing activities |
|
|
(14,120 |
) |
|
|
(42,382 |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
Net borrowings under line of credit agreement |
|
|
377 |
|
|
|
68,200 |
|
Net payments from the issuance of common stock (sale of stock under ESPP, exercise of stock options, and shares purchased for tax withholding) |
|
|
(1,064 |
) |
|
|
(30 |
) |
Repurchase of common stock |
|
|
— |
|
|
|
(2,604 |
) |
Payment of cash dividends |
|
|
(1,168 |
) |
|
|
(1,741 |
) |
Net cash (used in) provided by financing activities |
|
|
(1,855 |
) |
|
|
63,825 |
|
Net increase (decrease) in cash and cash equivalents |
|
|
3,222 |
|
|
|
390 |
|
Effect of exchange rate changes on cash and cash equivalents |
|
|
(222 |
) |
|
|
(671 |
) |
Cash and cash equivalents at beginning of period |
|
|
6,581 |
|
|
|
6,168 |
|
Cash and cash equivalents at end of period |
|
$ |
9,581 |
|
|
$ |
5,887 |
|
Supplemental cash flow information: |
|
|
|
|
|
|
|
|
Cash paid during the period for: |
|
|
|
|
|
|
|
|
Interest |
|
$ |
3,960 |
|
|
$ |
5,524 |
|
Income taxes, net |
|
$ |
2,868 |
|
|
$ |
8,066 |
|
AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES |
||||||||||||||||
UNAUDITED RECONCILIATION OF NET INCOME TO EBITDA |
||||||||||||||||
For the three and nine months September 30, 2020 and 2019 |
||||||||||||||||
(Unaudited) |
||||||||||||||||
|
|
Three-Months Ended
|
|
|
Nine-Months Ended
|
|
||||||||||
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
||||
Net income attributable to American Vanguard, as reported |
|
$ |
2,927 |
|
|
$ |
3,153 |
|
|
$ |
7,334 |
|
|
$ |
10,165 |
|
Provision for income taxes |
|
|
492 |
|
|
|
1,474 |
|
|
|
1,852 |
|
|
|
4,059 |
|
Interest expense, net |
|
|
1,022 |
|
|
|
2,070 |
|
|
|
3,804 |
|
|
|
5,606 |
|
Depreciation and amortization |
|
|
6,000 |
|
|
|
5,688 |
|
|
|
17,769 |
|
|
|
17,066 |
|
EBITDA2 |
|
$ |
10,441 |
|
|
$ |
12,385 |
|
|
$ |
30,759 |
|
|
$ |
36,896 |
|
1 Earnings before interest, taxes, depreciation and amortization. EBITDA is not a financial measure calculated and presented in accordance with U.S. generally accepted accounting principles (GAAP) and should not be considered as an alternative to net income (loss), operating income (loss) or any other financial measure so calculated and presented, nor as an alternative to cash flow from operating activities as a measure of liquidity. The items excluded from EBITDA are detailed in the reconciliation attached to this news release. Other companies (including the Company’s competitors) may define EBITDA differently.
2 Earnings before interest, taxes, depreciation and amortization. EBITDA is not a financial measure calculated and presented in accordance with U.S. generally accepted accounting principles (GAAP) and should not be considered as an alternative to net income (loss), operating income (loss) or any other financial measures so calculated and presented, nor as an alternative to cash flow from operating activities as a measure of liquidity. The items excluded from EBITDA are detailed in the reconciliation attached to this news release. Other companies (including the Company’s competitors) may define EBITDA differently.
View source version on businesswire.com: https://www.businesswire.com/news/home/20201109006096/en/
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10.11.24 |
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