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

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

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.

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

View source version on businesswire.com: https://www.businesswire.com/news/home/20210809005765/en/