American Vanguard Reports Improved Financial Results With Third Quarter Net Sales up 25% and Net Income Up 88%

NEWPORT BEACH, Calif.--()--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.

 

Contacts

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

Contacts

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