American Vanguard Q3 net income up 28% to US$4.6M as net sales rise 8% to US$73.8M boosted by robust demand in domestic corn market

NEWPORT BEACH, California , November 7, 2011 (press release) – American Vanguard Corporation (NYSE:AVD - News), today announced financial results for the third quarter and nine month period ended September 30, 2011.

Fiscal 2011 Third Quarter Financial Highlights – versus Fiscal 2010 Third Quarter Performance

* Net sales improved from $68.3 million to $73.8 million, an increase of 8%
* Net income improved from $3.6 million to $4.6 million, an increase of 28%
* Earnings per diluted share increased from $0.13 to $0.16

Fiscal 2011 Nine Month Financial Highlights – versus Fiscal 2010 Nine Month Performance

* Net sales improved from $167.1 million to $221.6 million, an increase of 33%
* Net income improved from $7.1 million to $15.6 million, an increase of 120%
* Earnings per diluted increased from $0.26 to $0.56

Note: Details are available in the financial schedules attached to this press release

Eric Wintemute, Chairman and CEO of American Vanguard, stated: “We are pleased to report another strong performance for the third quarter that reflects the excellent positioning of our product portfolio, especially our broad range of insecticides. In granular soil insecticides, we continue to expand our international sales penetration with Mocap® and Nemacur®, and we have successfully captured additional business with Thimet® in peanuts and sugarcane replacing a competing product that has been withdrawn from the U.S. market.”

Mr. Wintemute continued: “Recently, we have been seeing considerable interest in our many products for the domestic corn market. In June we announced a significant agreement with Monsanto for the co-marketing of our post-emergent corn herbicide Impact® in conjunction with their Roundup® Ready glyphosate program. We are also seeing corn growers show greater interest in the yield enhancement benefits of corn soil insecticides for protection of their crops in areas where pest pressure is not adequately handled by the use of genetic defenses alone. As the supplier with the most complete line of soil insecticide products as well as the closed delivery systems best equipped to dispense them, we are poised to satisfy this growing demand.”

Mr. Wintemute concluded: “Our focus on profitability can be seen in the improvement of our third quarter gross profit margins, from 37% in 2010 to 42% in 2011. Overall our manufacturing operations have experienced higher utilization rates this year resulting in improved coverage of facility fixed costs. We continue to explore the acquisition of appropriately-priced, branded products and our new potato sprout inhibitor SmartBlock® is scheduled to be commercialized during the next 90 days. We are gearing up to take full advantage of the abundant opportunities emerging in domestic corn as well as in other crop markets that favor our extensive offering of granular soil insecticides. Despite the need to overcome some supply constraints in Mocap, and some regulatory constraints with our PCNB fungicide, we are confident that American Vanguard will finish 2011 with a strong financial performance.”

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. To learn more about American Vanguard, please reference the Company’s web site at www.amvac-chemical.com.

The Company, from time to time, may discuss forward-looking information. Except for the historical information contained in this release or in the conference call referenced 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
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
        2011   2010   2011   2010
Net sales       $ 73,840     $ 68,256     $ 221,610     $ 167,140  
Cost of sales         43,089       42,880       130,593       103,607  
Gross profit         30,751       25,376       91,017       63,533  
Operating expenses         22,583       18,865       62,979       49,577  
Operating income         8,168       6,511       28,038       13,956  
Interest expense         899       877       2,684       2,683  
Interest capitalized         (18 )     (49 )     (92 )     (98 )
Extinguishment of debt                     546        
Income before income tax         7,287       5,683       24,900       11,371  
Income tax expense         2,669       2,072       9,263       4,290  
Net income       $ 4,618     $ 3,611     $ 15,637     $ 7,081  
Earnings per common share—basic       $ .17     $ .13     $ .57     $ .26  
Earnings per common share—assuming dilution       $ .16     $ .13     $ .56     $ .26  
Weighted average shares outstanding—basic         27,575       27,398       27,551       27,362  
Weighted average shares outstanding—assuming dilution         27,993       27,663       27,842       27,643  
                                     

 

               
 

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