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American Vanguard Reports First Quarter 2021 Results

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American Vanguard Corporation (NYSE: AVD) today announced financial results for the first quarter ended March 31, 2021.

Fiscal 2021 First Quarter Financial Highlights versus Fiscal 2020 First Quarter:

  • Net sales were $116 million in 2021, compared to $96 million in 2020.

  • Net income was $3.07 million in 2021, compared to $0.52 million in 2020.

  • Earnings per diluted share of $0.10 in 2021, compared to $0.02 in 2020.

  • EBITDA1of $12.1 million in 2021, compared to $7.6 million in 2020.

Eric Wintemute, Chairman and CEO of American Vanguard stated: "We are pleased to report a much-improved start to 2021 both at the top and bottom lines, as compared to the prior year. Domestically, after several years of relatively stagnant crop prices, we are beginning to see higher commodity prices, which, in turn, has helped spur demand for both our soybean products and our corn herbicide portfolio. In non-crop uses, we experienced steady demand for mosquito control products, a recovery in the horticulture segment and higher royalties from our essential oil products for consumer use. Internationally, we enjoyed improved performance in Mexico and Brazil, while continuing to expand globally with the additions of Agrinos biological products and the integration of AgNova in Australia. Gross profit margins were just below those of the comparable quarter in 2020, while net income for the quarter was 6 times that of the prior year period."

He continued: "During the quarter, we kept a focus on balance sheet integrity and controlled inventory levels. We also exercised discipline with respect to operating expense (which declined as a percent of net sales) and debt management within the usual seasonal cycle for our business. Further, we produced profitable results while self-funding strategic growth initiatives, including our SIMPAS prescription application system with the Ultimus tracing/verification platform, which we are positioning as a comprehensive solution for the carbon credit market."

Mr. Wintemute concluded: "Over the course of 2021, we expect a low double-digit increase in net sales with stronger growth in net income. We look forward to giving you additional detail on market conditions, profitability, working capital considerations and our innovation initiatives during our upcoming earnings call."

Conference Call

Eric Wintemute, Chairman & CEO, Bob Trogele, COO and David T. Johnson, CFO, will conduct a conference call focusing on operating performance and financial results at 4:30 pm ET / 1:30 pm PT on Thursday, May 6, 2021. Interested parties may participate in the call by dialing 888-506-0062 or 973-528-0011 and enter code 481120 - please call in 10 minutes before the conference is scheduled to begin and ask for the American Vanguard conference.

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

March 31,

2021

December 31,

2020

Current assets:

Cash and cash equivalents

$

13,765

$

15,923

Receivables:

Trade, net of allowance for doubtful accounts of $3,979 and $3,297, respectively

156,010

130,029

Other

10,247

8,444

Total receivables, net

166,257

138,473

Inventories

172,234

163,784

Prepaid expenses

11,221

10,499

Income taxes receivable

2,409

3,046

Total current assets

365,886

331,725

Property, plant and equipment, net

65,945

65,382

Operating lease right-of-use assets

11,207

12,198

Intangible assets, net of applicable amortization

193,776

197,514

Goodwill

50,505

52,108

Other assets

18,492

18,602

Deferred income tax assets, net

4,213

2,764

Total assets

$

710,024

$

680,293

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Current installments of other liabilities

$

909

$

2,647

Accounts payable

60,946

59,253

Deferred revenue

32,316

43,611

Accrued program costs

53,196

45,441

Accrued expenses and other payables

15,865

16,184

Operating lease liabilities, current

3,664

4,188

Total current liabilities

166,896

171,324

Long-term debt, net

143,423

107,442

Operating lease liabilities, long term

7,692

8,177

Other liabilities, net of current installments

8,453

9,054

Deferred income tax liabilities, net

23,514

23,560

Total liabilities

349,978

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 33,874,322 shares at March 31, 2021 and 33,922,433 shares at December 31, 2020

3,389

3,394

Additional paid-in capital

95,985

96,642

Accumulated other comprehensive loss

(11,825

)

(9,322

)

Retained earnings

290,657

288,182

Less treasury stock at cost, 3,061,040 shares

(18,160

)

(18,160

)

Total stockholders’ equity

360,046

360,736

Total liabilities and stockholders' equity

$

710,024

$

680,293

AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

For the three months

ended March 31

2021

2020

Net sales

$

116,155

$

95,962

Cost of sales

(71,024

)

(57,581

)

Gross profit

45,131

38,381

Operating expenses

(41,444

)

(36,545

)

Adjustment to bargain purchase gain on business acquisition

(33

)

Operating income

3,654

1,836

Change in fair value of an equity investment

1,066

Other income

672

Interest expense, net

(946

)

(1,508

)

Income before provision for income taxes (benefit) and loss on equity method investment

4,446

328

Income tax (expense) benefit

(1,362

)

205

Income before loss from equity method investment

3,084

533

Loss from equity method investment

(13

)

(13

)

Net income

$

3,071

$

520

Earnings per common share—basic

$

0.10

$

0.02

Earnings per common share—assuming dilution

$

0.10

$

0.02

Weighted average shares outstanding—basic

29,737

29,288

Weighted average shares outstanding—assuming dilution

30,523

29,948

AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES

ANALYSIS OF SALES

(In thousands)

(Unaudited)

For the three Months Ended

March 31

2021

2020

Change

% Change

Net sales:

U.S. crop

$

54,755

$

50,362

$

4,393

9

%

U.S. non-crop

17,453

10,993

6,460

59

%

Total U.S.

72,208

61,355

10,853

18

%

International

43,947

34,607

9,340

27

%

Total net sales:

$

116,155

$

95,962

$

20,193

21

%

Gross profit:

U.S. crop

$

21,271

$

24,245

$

(2,974

)

-12

%

U.S. non-crop

9,383

4,719

4,664

99

%

Total U.S.

30,654

28,964

1,690

6

%

International

14,477

9,417

5,060

54

%

Total gross profit:

$

45,131

$

38,381

$

6,750

18

%

Gross margin:

U.S. crop

39

%

48

%

U.S. non-crop

54

%

43

%

Total U.S.

42

%

47

%

International

33

%

27

%

Gross margin:

39

%

40

%

AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

For the three months

ended March 31

2021

2020

Cash flows from operating activities:

Net income

$

3,071

$

520

Adjustments to reconcile net income to net cash used in operating

activities:

Depreciation and amortization of fixed and intangible assets

5,403

4,762

Amortization of other long-term assets

1,200

967

Accretion of discounted liabilities

18

4

Amortization of deferred loan fees

81

59

Provision for bad debts

682

359

Loan principal and interest forgiveness

(672

)

Stock-based compensation

1,792

1,357

Decrease in deferred income taxes

(269

)

(910

)

Change in fair value of an equity investment

(1,066

)

Loss from equity method investment

13

13

Adjustment to bargain purchase gain on business acquisition

33

Changes in assets and liabilities associated with operations:

Increase in net receivables

(30,422

)

(6,578

)

Increase in inventories

(9,615

)

(16,446

)

Increase in prepaid expenses and other assets

(1,052

)

(776

)

(Increase) decrease in income tax receivable/payable, net

638

(597

)

Decrease in net operating lease liability

(18

)

Increase in accounts payable

2,293

1,617

Decrease in deferred revenue

(11,293

)

(2,342

)

Increase in accrued program costs

7,770

6,016

Decrease in other payables and accrued expenses

(1,187

)

(2,094

)

Net cash used in operating activities

(32,600

)

(14,069

)

Cash flows from investing activities:

Capital expenditures

(2,904

)

(2,980

)

Intangible assets

(41

)

Net cash used in investing activities

(2,945

)

(2,980

)

Cash flows from financing activities:

Net borrowings under line of credit agreement

35,900

19,400

Net payments from the issuance of common stock (sale of stock under ESPP, exercise of stock options, and shares purchased for tax withholdings)

(2,454

)

(2,177

)

Payment of cash dividends

(593

)

(582

)

Net cash provided by financing activities

32,853

16,641

Net decrease in cash and cash equivalents

(2,692

)

(408

)

Effect of exchange rate changes on cash and cash equivalents

534

(629

)

Cash and cash equivalents at beginning of period

15,923

6,581

Cash and cash equivalents at end of period

$

13,765

$

5,544

AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES

UNAUDITED RECONCILIATION OF NET INCOME TO EBITDA

For the three months March 31, 2021 and 2020

(Unaudited)

March 31, 2021

March 31, 2020

Net income, as reported

$

3,071

$

520

Provision for income taxes

1,362

(205

)

Interest expense, net

946

1,508

Depreciation and amortization

6,684

5,788

EBITDA2

$

12,063

$

7,611

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/20210506006193/en/

Contacts

Company Contact:
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
Lcati@equityny.com