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American Vanguard Reports Second Quarter & First Half 2021 Results and Enters Into New Credit Agreement

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NEWPORT BEACH, Calif., August 09, 2021--(BUSINESS WIRE)--American Vanguard Corporation (NYSE:AVD) today announced financial results for the second quarter and six months ended June 30, 2021.

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

  • Net sales were up 29% to $135 million in 2021, compared to $105 million in 2020

  • Net income was up 32% to $5.1 million in 2021, compared to $3.9 million in 2020

  • Earnings per diluted share were up 31% to $0.17 in 2021, compared to $0.13 in 2020

  • EBITDA1 was up 17% to $14.7 million in 2021, compared to $12.6 million in 2020

  • On August 5th, 2021, the Company executed a new $275 million Credit Facility agreement

Fiscal 2021 Mid-Year Financial Highlights – versus Fiscal 2020 Mid-year:

  • Net sales were up 25% to $251 million in 2021, compared to $201 million in 2020

  • Net income was up 86% to $8.2 million in 2021, compared to $4.4 million in 2020

  • Earnings per diluted share were up 80% to $0.27 in 2021, compared to $0.15 in 2020

  • EBITDA was up 32% to $26.7 million in 2021, compared to $20.2 million in 2020

Eric Wintemute, Chairman and CEO of American Vanguard stated: "At the midpoint of 2021, we continue to see stronger market demand which has translated into improved growth and financial performance both domestically and abroad. Compared to our 2020 results, US Crop posted a 40% gain in net sales during the second quarter and 24% for the first half; US Non-Crop rose 54% in the quarter and 56% year-to-date; and International gained 10% quarterly and 17% through mid-year. Gross profit margins during the second quarter remained solid, at 44% for the US and a much improved 31% for our international business. The 29% improvement in overall net sales performance during the quarter was surpassed by a 32% increase in net income during that period."

Mr. Wintemute continued: "In addition to recording improved financial performance during the second quarter, we accomplished three important milestones. Organizationally, we successfully integrated our non-crop business into a single management entity branded AMGUARD. Further, we completed the integration of our newly acquired entity, AgNova, into our Australian business, which has tripled our sales in that country. In addition, we negotiated a new credit facility with our bank consortium (to replace our existing facility) that provides expanded funding (up to $275 million plus a $150 million accordion) and flexibility for continued growth through acquisition, expansion of our green solutions portfolio, and investment in precision application technology."

Mr. Wintemute concluded: "Looking forward, we believe that our Company is well positioned in both domestic and international markets. Assuming favorable market and pandemic trends, we maintain our previous outlook for 2021 with low double-digit revenue growth and comparatively stronger growth in both net income and EBITDA. These factors, coupled with well-managed operating expenses, should further strengthen our balance sheet. We look forward to giving you a more detailed presentation during our upcoming earnings 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 and strategic themes...at 4:30 pm ET on August 9, 2021. Interested parties may participate in the call by dialing (201) 493-6744. 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 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, the coronavirus pandemic, 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

June 30,
2021

December 31,
2020

Current assets:

Cash and cash equivalents

$

19,559

$

15,923

Receivables:

Trade, net of allowance for doubtful accounts of $4,138 and $3,297, respectively

152,031

130,029

Other

10,766

8,444

Total receivables, net

162,797

138,473

Inventories, net

175,151

163,784

Prepaid expenses

13,896

10,499

Income taxes receivable

1,679

3,046

Total current assets

373,082

331,725

Property, plant and equipment, net

66,533

65,382

Operating lease right-of-use assets

21,601

12,198

Intangible assets, net of amortization

195,655

197,514

Goodwill

48,154

52,108

Other assets

27,678

18,602

Deferred income tax assets, net

2,739

2,764

Total assets

$

735,442

$

680,293

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Current installments of other liabilities

$

1,629

$

2,647

Accounts payable

65,073

59,253

Deferred revenue

13,205

43,611

Accrued program costs

64,534

45,441

Accrued expenses and other payables

17,441

16,184

Operating lease liabilities, current

3,993

4,188

Total current liabilities

165,875

171,324

Long-term debt, net of deferred loan fees

149,378

107,442

Operating lease liabilities, long-term

17,655

8,177

Other liabilities, excluding current installments

8,209

9,054

Deferred income tax liabilities

24,954

23,560

Total liabilities

366,071

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 34,261,651 shares at June 30, 2021 and 33,922,433 shares at December 31, 2020

3,428

3,394

Additional paid-in capital

97,813

96,642

Accumulated other comprehensive loss

(8,911

)

(9,322

)

Retained earnings

295,201

288,182

387,531

378,896

Less treasury stock at cost, 3,061,040 shares at June 30, 2021 and December 31, 2020

(18,160

)

(18,160

)

Total stockholders’ equity

369,371

360,736

Total liabilities and stockholders' equity

$

735,442

$

680,293

AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

For the Three Months
Ended June 30,

For the Six Months
Ended June 30,

2021

2020

2021

2020

Net sales

$

134,610

$

104,555

$

250,765

$

200,517

Cost of sales

(82,471

)

(64,249

)

(153,495

)

(121,830

)

Gross profit

52,139

40,306

97,270

78,687

Operating expenses

(43,080

)

(33,579

)

(84,524

)

(70,124

)

Adjustment to bargain purchase gain on business acquisition

(88

)

(121

)

Operating income

8,971

6,727

12,625

8,563

Change in fair value of an equity investment

(295

)

24

771

24

Other income

672

Interest expense, net

(1,013

)

(1,274

)

(1,959

)

(2,782

)

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

7,663

5,477

12,109

5,805

Income tax expense

(2,445

)

(1,565

)

(3,807

)

(1,360

)

Income before loss on equity method investment

5,218

3,912

8,302

4,445

Loss from equity method investment

(74

)

(25

)

(87

)

(38

)

Net income

$

5,144

$

3,887

$

8,215

$

4,407

Earnings per common share—basic

$

.17

$

.13

$

.28

$

.15

Earnings per common share—assuming dilution

$

.17

$

.13

$

.27

$

.15

Weighted average shares outstanding—basic

29,930

29,413

29,834

29,350

Weighted average shares outstanding—assuming dilution

30,499

29,854

30,511

29,904

AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES

ANALYSIS OF SALES

(In thousands)

(Unaudited)

For the three months
ended June 30,

2021

2020

Change

% Change

Net sales:

U.S. crop

$

62,575

$

44,670

$

17,905

40

%

U.S. non-crop

21,488

13,872

7,616

55

%

U.S. total

84,063

58,542

25,521

44

%

International

50,547

46,013

4,534

10

%

Net sales:

$

134,610

$

104,555

$

30,055

29

%

Gross profit:

U.S. crop

$

26,805

$

21,758

$

5,047

23

%

U.S. non-crop

9,782

7,029

2,753

39

%

U.S. total

36,587

28,787

7,800

27

%

International

15,552

11,519

4,033

35

%

Total gross profit:

$

52,139

$

40,306

$

11,833

29

%

For the six months
ended June 30,

2021

2020

Change

% Change

Net sales:

U.S. crop

$

117,330

$

95,032

$

22,298

23

%

U.S. non-crop

38,941

24,865

14,076

57

%

U.S. total

156,271

119,897

36,374

30

%

International

94,494

80,620

13,874

17

%

Net sales:

$

250,765

$

200,517

$

50,248

25

%

Gross profit:

U.S. crop

$

48,076

$

46,003

$

2,073

5

%

U.S. non-crop

19,165

11,748

7,417

63

%

U.S. total

67,241

57,751

9,490

16

%

International

30,029

20,936

9,093

43

%

Total gross profit:

$

97,270

$

78,687

$

18,583

24

%

AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands), (Unaudited)

For the Six Months
Ended June 30,

2021

2020

Cash flows from operating activities:

Net income

$

8,215

$

4,407

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

10,697

9,665

Amortization of other long-term assets

2,044

1,965

Accretion of discounted liabilities

(9

)

7

Amortization of deferred loan fees

162

139

Provision for bad debts

945

392

Loan principal and interest forgiveness

(672

)

Adjustment to contingent consideration

1,014

Stock-based compensation

3,598

2,545

Change in deferred income taxes

(353

)

(1,562

)

Change in fair value of an equity investment

(771

)

Net foreign currency adjustments

(147

)

594

Loss from equity method investment

87

38

Adjustment to bargain purchase gain on business acquisition

121

Changes in assets and liabilities associated with operations:

(Increase) decrease in net receivables

(25,317

)

16,421

Increase in inventories

(11,464

)

(21,706

)

Increase in prepaid expenses and other assets

(3,696

)

(2,297

)

Decrease in income tax receivable

1,374

899

(Decrease) increase in net operating lease liability

(120

)

7

Increase (decrease) in accounts payable

6,190

(12,351

)

Decrease in deferred revenue

(30,407

)

(2,431

)

Increase in accrued program costs

19,098

12,577

Increase (decrease) in other payables and accrued expenses

507

(2,394

)

Net cash (used in) provided by operating activities

(18,904

)

6,915

Cash flows from investing activities:

Capital expenditures

(5,075

)

(6,386

)

Acquisition of product lines

(10,000

)

Intangible assets

(241

)

(3,889

)

Investments

(184

)

(1,190

)

Net cash used in investing activities

(15,500

)

(11,465

)

Cash flows from financing activities:

Net borrowings under line of credit agreement

41,774

10,502

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)

(2,393

)

(2,123

)

Payment of cash dividends

(1,189

)

(1,168

)

Net cash provided by financing activities

37,942

5,984

Net increase in cash and cash equivalents

3,538

1,434

Effect of exchange rate changes on cash and cash equivalents

98

585

Cash and cash equivalents at beginning of period

15,923

6,581

Cash and cash equivalents at end of period

$

19,559

$

8,600

Supplemental cash flow information:

Cash paid during the period for:

Interest

$

1,873

$

2,902

Income taxes, net

$

2,757

$

1,901

Non-cash transactions:

ROU assets exchanged for lease liabilities

$

12,067

$

1,502

AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES

UNAUDITED RECONCILIATION OF NET INCOME TO EBITDA

For the three and six months June 30, 2021 and 2020

(Unaudited)

Three Months Ended
June 30,

Six Months Ended
June 30,

2021

2020

2021

2020

Net income, as reported

$

5,144

$

3,887

$

8,215

$

4,407

Provision for income taxes

2,445

1,565

3,807

1,360

Interest expense, net

1,013

1,274

1,959

2,782

Depreciation and amortization

6,138

5,901

12,741

11,630

EBITDA2

$

14,740

$

12,627

$

26,722

$

20,179

___________________
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/20210809005765/en/

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
Lcati@equityny.com