American Vanguard Corporation (NYSE:AVD) today announced
financial results for the third quarter and nine months ended
September 30, 2021.
Financial Highlights Fiscal 2021 Third Quarter – versus
Fiscal 2020 Third Quarter
- Net sales up 25% to $147 million in 2021, as compared with $117
million in 2020
- Net income up 88% to $5.5 million in 2021, as compared with
$2.9 million in 2020
- Earnings per diluted share of $0.18 in 2021, as compared with
$0.10 in 2020
- EBITDA1 up 47% to $15.3 million in 2021, as compared with $10.4
million in 2020
Financial Highlights Fiscal 2021 Nine Months – versus Fiscal
2020 Nine Months
- Net sales up 25% to $398 million in 2021, as compared with $318
million in 2020
- Net income up 87% to $13.7 million in 2021, as compared with
$7.3 million in 2020
- Earnings per diluted share of $0.45 in 2021, as compared with
$0.25 in 2020
- EBITDA up 37% to $42.0 million in 2021, as compared to $30.5
million in 2020
Eric Wintemute, Chairman and CEO of American Vanguard,
commented: “We achieved strong third quarter results and continued
performance improvement over the first three quarters of 2021.
Strong crop commodity prices, favorable weather and pest pressure
have fueled significant growth of our US crop sales, particularly
in the Midwest and the South. Mosquito mitigation driven by
tropical storm activity, commercial pest control, lawn and garden
demand and our consumer pest collaboration with Proctor &
Gamble’s Zevo® brand have grown this year’s US Non-Crop business.
Internationally, our success in Central America, Brazil, Australia
and elsewhere has resulted in expanded revenues and enhanced
profitability.”
Mr. Wintemute continued, “Our year-to-date performance exceeds
our prior guidance with net sales increasing at a 25% rate and a
more significant gain of 87% in net income and earnings per share.
We have achieved these results in spite of pandemic conditions and
delays in the global supply chain. Through the balance of the year,
we expect strong sales, efficient manufacturing performance and
earnings in excess of those posted last year. From a balance sheet
perspective, we are on track with both inventory management and
debt reduction as we head towards the end of the year.”
Mr. Wintemute concluded, “We continue to pursue strategic growth
initiatives in technology development, with particular emphasis on
Green Solutions and Precision Application technologies. We look
forward to providing details on our overall performance, industry
outlook and innovation initiatives in our upcoming quarterly
conference call.”
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 8, 2021. Interested parties may participate in the
call by dialing (201) 493-6744 – 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 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 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,
2021
December 31,
2020
Current assets:
Cash and cash equivalents
$
16,718
$
15,923
Receivables:
Trade, net of allowance for doubtful
accounts of $4,381 and $3,297, respectively
167,731
130,029
Other
11,384
8,444
Total receivables, net
179,115
138,473
Inventories, net
166,973
163,784
Prepaid expenses
12,491
10,499
Income taxes receivable
1,036
3,046
Total current assets
376,333
331,725
Property, plant and equipment, net
66,501
65,382
Operating lease right-of-use assets
26,080
12,198
Intangible assets, net of amortization
201,078
197,514
Goodwill
46,616
52,108
Other assets
15,595
18,602
Deferred income tax assets, net
3,669
2,764
Total assets
$
735,872
$
680,293
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Current installments of other
liabilities
$
1,633
$
2,647
Accounts payable
66,082
59,253
Deferred revenue
5,510
43,611
Accrued program costs
79,355
45,441
Accrued expenses and other payables
20,726
16,184
Operating lease liabilities, current
5,015
4,188
Total current liabilities
178,321
171,324
Long-term debt, net of deferred loan
fees
136,328
107,442
Operating lease liabilities, long-term
21,415
8,177
Other liabilities, excluding current
installments
7,213
9,054
Deferred income tax liabilities, net
24,254
23,560
Total liabilities
367,531
319,557
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 34,272,665 shares at September
30, 2021 and 33,922,433 shares at December 31, 2020
3,428
3,394
Additional paid-in capital
99,917
96,642
Accumulated other comprehensive loss
(12,370
)
(9,322
)
Retained earnings
300,105
288,182
391,080
378,896
Less treasury stock at cost, 3,361,040
shares at September 30, 2021 and
3,061,040 shares at December 31, 2020
(22,739
)
(18,160
)
Total stockholders’ equity
368,341
360,736
Total liabilities and stockholders'
equity
$
735,872
$
680,293
AMERICAN VANGUARD CORPORATION
AND SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(In thousands, except per
share data)
(Unaudited)
For the Three Months
Ended September 30,
For the Nine Months
Ended September 30,
2021
2020
2021
2020
Net sales
$
147,298
$
117,439
$
398,063
$
317,956
Cost of sales
(90,234
)
(74,174
)
(243,729
)
(196,004
)
Gross profit
57,064
43,265
154,334
121,952
Operating expenses
(48,410
)
(39,039
)
(132,934
)
(109,163
)
Adjustment to bargain purchase gain on
business acquisition
292
—
171
—
Operating income
8,946
4,226
21,571
12,789
Change in value of equity investments,
net
(668
)
257
103
281
Other income
—
—
672
—
Interest expense, net
(962
)
(1,022
)
(2,921
)
(3,804
)
Income before provision for income taxes
and loss on equity method investment
7,316
3,461
19,425
9,266
Income tax expense
(1,517
)
(492
)
(5,324
)
(1,852
)
Income before loss on equity method
investment
5,799
2,969
14,101
7,414
Loss from equity method investment
(301
)
(42
)
(388
)
(80
)
Net income
$
5,498
$
2,927
$
13,713
$
7,334
Earnings per common share—basic
$
.18
$
.10
$
.46
$
.25
Earnings per common share—assuming
dilution
$
.18
$
.10
$
.45
$
.25
Weighted average shares
outstanding—basic
29,892
29,501
29,854
29,401
Weighted average shares
outstanding—assuming dilution
30,390
29,973
30,470
29,926
AMERICAN VANGUARD CORPORATION
AND SUBSIDIARIES
ANALYSIS OF SALES
(In thousands)
(Unaudited)
For the Three Months Ended
September 30,
2021
2020
Change
% Change
Net sales:
U.S. crop
$
66,722
$
48,361
$
18,361
38
%
U.S. non-crop
21,622
18,251
3,371
18
%
U.S. total
88,344
66,612
21,732
33
%
International
58,954
50,827
8,127
16
%
Net sales:
$
147,298
$
117,439
$
29,859
25
%
Gross profit:
U.S. crop
$
30,237
$
20,146
$
10,091
50
%
U.S. non-crop
8,882
8,758
124
1
%
U.S. total
39,119
28,904
10,215
35
%
International
17,945
14,361
3,584
25
%
Total gross profit:
$
57,064
$
43,265
$
13,799
32
%
For the Nine Months Ended
September 30,
2021
2020
Change
% Change
Net sales:
U.S. crop
$
184,052
$
148,630
$
35,422
24
%
U.S. non-crop
60,563
37,881
22,682
60
%
U.S. total
244,615
186,511
58,104
31
%
International
153,448
131,445
22,003
17
%
Net sales:
$
398,063
$
317,956
$
80,107
25
%
Gross profit:
U.S. crop
$
78,313
$
68,119
$
10,194
15
%
U.S. non-crop
28,047
18,535
9,512
51
%
U.S. total
106,360
86,654
19,706
23
%
International
47,974
35,298
12,676
36
%
Total gross profit:
$
154,334
$
121,952
$
32,382
27
%
AMERICAN VANGUARD CORPORATION
AND SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In thousands,
unaudited)
For the Nine Months
Ended
September 30,
2021
2020
Cash flows from operating activities:
Net income
$
13,713
$
7,334
Adjustments to reconcile net income to net
cash (used in) provided by operating activities:
Depreciation and amortization of property,
plant and equipment and intangible assets
17,045
14,584
Amortization of other long-term assets
2,981
2,966
Accretion of discounted liabilities
(10
)
9
Amortization of deferred loan fees
294
219
Provision for bad debts
1,202
777
Loan principal and interest
forgiveness
(672
)
—
Adjustment to contingent consideration
520
—
Stock-based compensation
5,309
3,776
Decrease in deferred income taxes
(560
)
(1,757
)
Change in value of equity investments,
net
(103
)
(281
)
Net foreign currency adjustments
(330
)
(711
)
Loss from equity method investment
388
80
Adjustment to bargain purchase gain on
business acquisition
(171
)
—
Changes in assets and liabilities
associated with operations:
Increase in net receivables
(42,979
)
(5,089
)
Increase in inventories
(4,325
)
(16,941
)
Increase in prepaid expenses and other
assets
(2,194
)
(532
)
Decrease in income tax receivable
2,031
873
Increase in net operating lease
liability
183
14
Increase (decrease) in accounts
payable
7,769
(1,759
)
Decrease in deferred revenue
(38,272
)
(1,079
)
Increase in accrued program costs
33,982
20,058
Increase (decrease) in other payables and
accrued expenses
4,025
(2,117
)
Net cash (used in) provided by operating
activities
(174
)
20,424
Cash flows from investing activities:
Capital expenditures
(7,963
)
(8,988
)
Acquisition of product line
(10,000
)
—
Intangible assets
(285
)
(3,942
)
Investments
(183
)
(1,190
)
Net cash used in investing activities
(18,431
)
(14,120
)
Cash flows from financing activities:
Net borrowings under line of credit
agreement
28,592
377
Payment of contingent consideration
(250
)
(1,227
)
Net payments from the issuance of common
stock (sale of stock under ESPP,
exercise of stock options, and shares
purchased for tax withholding)
(2,000
)
(1,064
)
Repurchase of common stock
(4,579
)
—
Payment of cash dividends
(1,789
)
(1,168
)
Net cash provided by (used in) financing
activities
19,974
(3,082
)
Net increase in cash and cash
equivalents
1,369
3,222
Effect of exchange rate changes on cash
and cash equivalents
(574
)
(222
)
Cash and cash equivalents at beginning of
period
15,923
6,581
Cash and cash equivalents at end of
period
$
16,718
$
9,581
Supplemental cash flow
information:
Cash paid during the period for:
Interest
$
2,839
$
3,960
Income taxes, net
$
3,836
$
2,868
Non-cash transactions:
ROU assets exchanged for lease
liabilities
$
17,872
$
4,895
Cash dividends declared and included in
accrued expenses
$
594
$
—
UNAUDITED RECONCILIATION OF
NET INCOME TO EBITDA
For the three- and nine-months
September 30, 2021 and 2020
(Unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
2021
2020
2021
2020
Net income attributable to American
Vanguard, as reported
$
5,498
$
2,927
$
13,713
$
7,334
Provision for income taxes
1,517
492
5,324
1,852
Interest expense, net
962
1,022
2,921
3,804
Depreciation and amortization
7,285
5,920
20,026
17,550
EBITDA2
$
15,262
$
10,361
$
41,984
$
30,540
__________________________
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, operating income 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, operating income 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/20211108006047/en/
Company: American Vanguard Corporation William A. Kuser,
Director of Investor Relations (949) 260-1200
williamk@amvac-chemical.com
Investor Representative The Equity Group Inc.
www.theequitygroup.com Lena Cati (212) 836-9611
Lcati@equityny.com
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