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,
|
|
|
December 31,
|
|
||
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
|
|
|
For the Six Months
|
|
||||||||||
|
|
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
|
|
|
|
|
|||||||
|
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
|
|
|
|
|
|||||||
|
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
|
|
|||||
|
|
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
|
|
Six Months Ended
|
|||||||||
|
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
