AVD American Vanguard

American Vanguard Reports Fourth Quarter & Full Year 2020 Results

American Vanguard Corporation (NYSE: AVD) today announced financial results for the fourth quarter and full year ended December 31, 2020.

Fiscal 2020 Fourth Quarter Financial Highlights versus Fiscal 2019 Fourth Quarter:

  • Net sales were $141 million in 2020, compared to $131 million in 2019
  • Net income was $7.9 million in 2020, compared to $3.4 million in 2019
  • Earnings per diluted share of $0.26 in 2020, compared to $0.12 in 2019
  • EBITDA1of $17.1 million in 2020, compared to $12.0 million in 2019

Fiscal 2020 Full Year Financial Highlights – versus Fiscal 2019 Full Year:

  • Net sales were $459 million in 2020, compared to $468 million in 2019
  • Net income was $15.2 million in 2020, compared to $13.6 million in 2019
  • Earnings per diluted share of $0.51 in 2020, compared to $0.46 in 2019
  • EBITDA1 of $47.6 million in 2020, compared to $48.9 million in 2019

Eric Wintemute, Chairman and CEO of American Vanguard, stated: “2020 proved to be a very challenging year as the world coped with the COVID-19 pandemic. Global implementation of restrictive public health protocols resulted in conservative distribution channel procurement behavior, significant sales and marketing customer access limitations, and dramatic adaptation to remote work processes in many operational and administrative functions. Throughout the year, we maintained very strict health and safety regimens and thankfully have been able to keep AMVAC manufacturing facilities fully functioning and our workforce largely free of serious illness.”

Mr. Wintemute continued: “Despite a difficult and somewhat depressed revenue global environment, our 2020 year-over-year bottom-line performance has increased significantly. This resulted from pandemic restrictions affecting travel activities, lower interest expenses primarily due to reduced federal base lending rate, the benefit of securing a biological technology acquisition at a favorable purchase price, and other non-operating income. Recent product acquisitions continue to broaden our traditional portfolio and company acquisitions have expanded the footprint of our international business. This diversification along with our financial discipline allowed us to achieve reasonable revenue, strong profitability and a de-levered balance sheet despite the difficult business circumstances of this past year.”

Mr. Wintemute concluded: “Looking forward, we believe that our Company is situated well in both domestic and international markets and are consequently optimistic about the prospects for low double-digit revenue growth in 2021. This optimism is driven by the belief that global economies are poised to start re-opening, higher commodity prices will encourage crop protection procurement, the expectation of larger corn acreage in the U.S., continued steady supply availability of key raw and intermediate materials, greater AMVAC product participation in the soybean segment, and the continued expansion of our international business. Looking forward, we expect gross profit margins to remain strong and operating expenses will be tightly managed as we return to more normal operations during the middle to later part of 2021. Further, we will continue to develop our innovative Envance, biological and SIMPAS technologies which collectively represent an integrated Environmental, Social and Governance (ESG) platform. 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 March 11, 2020. 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 . 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 .

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.

 

CONDENSED CONSOLIDATED BALANCE SHEETS

December 31, 2020 and 2019

(In thousands, except share data)

(Unaudited)

 

 

 

2020

 

 

2019

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

15,923

 

 

$

6,581

 

Receivables:

 

 

 

 

 

 

 

 

Trade, net of allowance for doubtful accounts of $3,297 and $2,300, respectively

 

 

119,071

 

 

 

136,075

 

Other

 

 

8,444

 

 

 

16,949

 

Total receivables, net

 

 

127,515

 

 

 

153,024

 

Inventories, net

 

 

163,784

 

 

 

163,313

 

Prepaid expenses

 

 

11,112

 

 

 

10,457

 

Income taxes receivable

 

 

3,046

 

 

 

2,824

 

Total current assets

 

 

321,380

 

 

 

336,199

 

Property, plant and equipment, net

 

 

65,382

 

 

 

56,521

 

Operating lease right-of-use assets

 

 

12,198

 

 

 

11,258

 

Intangible assets, net of amortization

 

 

197,514

 

 

 

198,261

 

Goodwill

 

 

52,108

 

 

 

46,673

 

Other assets

 

 

18,602

 

 

 

21,186

 

Total assets

 

$

667,184

 

 

$

670,098

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Current installments of other liabilities

 

$

2,647

 

 

$

1,513

 

Accounts payable

 

 

59,254

 

 

 

64,881

 

Deferred revenue

 

 

32,652

 

 

 

6,826

 

Accrued program costs

 

 

45,441

 

 

 

47,699

 

Accrued expenses and other payables

 

 

16,797

 

 

 

12,815

 

Operating lease liabilities, current

 

 

4,188

 

 

 

4,904

 

Total current liabilities

 

 

160,979

 

 

 

138,638

 

Long-term debt, net of deferred loan fees

 

 

107,442

 

 

 

148,766

 

Other liabilities, excluding current installments

 

 

9,054

 

 

 

12,890

 

Operating lease liabilities, long-term

 

 

8,177

 

 

 

6,503

 

Deferred income tax liabilities, net

 

 

20,796

 

 

 

19,145

 

Total liabilities

 

 

306,448

 

 

 

325,942

 

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

33,922,433 shares in 2020 and 33,233,614 shares in 2019

 

 

3,394

 

 

 

3,324

 

Additional paid-in capital

 

 

96,642

 

 

 

90,572

 

Accumulated other comprehensive loss

 

 

(9,322

)

 

 

(5,698

)

Retained earnings

 

 

288,182

 

 

 

274,118

 

 

 

 

378,896

 

 

 

362,316

 

Less treasury stock at cost, 3,061,040 shares in 2020 and 2019

 

 

(18,160

)

 

 

(18,160

)

Total stockholders’ equity

 

 

360,736

 

 

 

344,156

 

Total liabilities and stockholders’ equity

 

$

667,184

 

 

$

670,098

 

 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

For the years and quarters ended December 31, 2020 and 2019

(In thousands, except per share data)

(Unaudited)

 

 

For the quarters

ended December 31,

 

 

For the years ended

December 31,

 

 

2020

 

2019

 

 

2020

 

2019

 

Net sales

$

140,747

 

$

130,521

 

 

$

458,704

 

$

468,186

 

Cost of sales

 

90,109

 

 

83,985

 

 

 

286,114

 

 

290,832

 

Gross profit

 

50,638

 

 

46,536

 

 

 

172,590

 

 

177,354

 

Operating expenses

 

44,740

 

 

40,279

 

 

 

153,622

 

 

151,133

 

Bargain purchase gain on business acquisition

 

(4,657

)

 

 

 

 

(4,657

)

 

 

Operating income

 

10,555

 

 

6,257

 

 

 

23,625

 

 

26,221

 

Interest expense, net

 

1,374

 

 

1,605

 

 

 

5,178

 

 

7,209

 

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

 

9,181

 

 

4,652

 

 

 

18,447

 

 

19,012

 

Provision for income taxes

 

1,228

 

 

1,155

 

 

 

3,080

 

 

5,202

 

Income before loss on equity method investment

 

7,953

 

 

3,497

 

 

 

15,367

 

 

13,810

 

Less net loss from equity method investment

 

45

 

 

61

 

 

 

125

 

 

209

 

Net income

$

7,908

 

$

3,436

 

 

$

15,242

 

$

13,601

 

Earnings per common share—basic

$

0.27

 

$

0.12

 

 

$

0.52

 

$

0.47

 

Earnings per common share—assuming dilution

$

0.26

 

$

0.12

 

 

$

0.51

 

$

0.46

 

Weighted average shares outstanding—basic

 

29,598

 

 

29,081

 

 

 

29,450

 

 

29,030

 

Weighted average shares outstanding—assuming dilution

 

30,194

 

 

29,853

 

 

 

29,993

 

 

29,656

 

 

AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES

ANALYSIS OF SALES

For the years and quarters ended December 31, 2020 and 2019

(Unaudited)

 

 

For the quarters ended

December 31,

 

 

For the years ended

December 31,

 

 

2020

 

2019

 

 

2020

 

2019

 

Net sales:

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. crop

$

74,537

 

$

62,567

 

 

$

223,167

 

$

220,635

 

U.S. non-crop

 

10,675

 

 

19,521

 

 

 

48,557

 

 

61,590

 

Total U.S.

 

85,212

 

 

82,088

 

 

 

271,724

 

 

282,225

 

International

 

55,535

 

 

48,433

 

 

 

186,980

 

 

185,961

 

Total net sales

$

140,747

 

$

130,521

 

 

$

458,704

 

$

468,186

 

Gross profit:

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. crop

$

30,221

 

$

26,370

 

 

$

98,340

 

$

95,429

 

U.S. non-crop

 

3,690

 

 

8,269

 

 

 

22,225

 

 

29,713

 

Total U.S.

 

33,911

 

 

34,639

 

 

 

120,565

 

 

125,142

 

International

 

16,727

 

 

11,897

 

 

 

52,025

 

 

52,212

 

Total gross profit

$

50,638

 

$

46,536

 

 

$

172,590

 

$

177,354

 

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

Years ended December 31, 2020 and 2019

(In thousands)

(Unaudited)

 

 

 

2020

 

 

2019

 

Increase cash

 

 

 

 

 

 

 

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income

 

$

15,242

 

 

$

13,601

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization of property, plant and equipment and intangible assets

 

 

19,902

 

 

 

18,643

 

Loss on disposal of property, plant and equipment

 

 

119

 

 

 

 

Amortization of other long-term assets

 

 

4,246

 

 

 

4,207

 

Amortization of discounted liabilities

 

 

9

 

 

 

72

 

Provision for bad debts

 

 

1,002

 

 

 

1,035

 

Revision of contingent consideration

 

 

 

 

 

(4,120

)

Stock-based compensation

 

 

6,561

 

 

 

7,160

 

Increase (decrease) in deferred income taxes

 

 

969

 

 

 

2,616

 

Changes in liabilities for uncertain tax positions

 

 

(2,092

)

 

 

263

 

Change in investment fair value

 

 

(717

)

 

 

 

Loss from equity method investment

 

 

125

 

 

 

209

 

Bargain purchase gain

 

 

(4,657

)

 

 

 

Changes in assets and liabilities associated with operations, net of business combinations:

 

 

 

 

 

 

 

 

(Increase) decrease in net receivables

 

 

26,517

 

 

 

(11,383

)

(Increase) decrease in inventories

 

 

7,421

 

 

 

3,817

 

(Increase) decrease in income tax receivable, net

 

 

(287

)

 

 

(6,855

)

(Increase) decrease in prepaid expenses and other assets

 

 

(474

)

 

 

(876

)

Increase in net operating lease liability

 

 

18

 

 

 

149

 

Increase (decrease) in accounts payable

 

 

(8,124

)

 

 

(7,977

)

Increase (decrease) in deferred revenue

 

 

25,845

 

 

 

(13,355

)

Increase (decrease) in accrued program costs

 

 

(2,517

)

 

 

5,797

 

Increase (decrease) in other payables and accrued expenses

 

 

89

 

 

 

(3,434

)

Net cash provided by operating activities

 

 

89,197

 

 

 

9,569

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Capital expenditures

 

 

(11,249

)

 

 

(12,985

)

Investments

 

 

(1,190

)

 

 

 

Acquisitions of businesses and product lines, and intangible assets additions

 

 

(23,356

)

 

 

(41,852

)

Net cash used in investing activities

 

 

(35,795

)

 

 

(54,837

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Net (payments) borrowings under line of credit agreement

 

 

(41,623

)

 

 

51,900

 

Cash paid to acquire non-controlling interest

 

 

 

 

 

 

Payment on deferred consideration

 

 

 

 

 

(850

)

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

 

 

(421

)

 

 

283

 

Repurchase of common stock

 

 

 

 

 

(2,604

)

Payment of cash dividends

 

 

(1,168

)

 

 

(2,323

)

Net cash provided by (used in) financing activities

 

 

(43,212

)

 

 

46,406

 

Net increase (decrease) in cash and cash equivalents

 

 

10,190

 

 

 

1,138

 

Effect of exchange rate changes on cash and cash equivalents

 

 

(848

)

 

 

(725

)

Cash and cash equivalents at beginning of year

 

 

6,581

 

 

 

6,168

 

Cash and cash equivalents at end of year

 

$

15,923

 

 

$

6,581

 

Supplemental cash flow information:

 

 

 

 

 

 

 

 

Cash paid during the year for:

 

 

 

 

 

 

 

 

Interest

 

$

5,313

 

 

$

7,121

 

Income taxes, net

 

$

3,881

 

 

$

9,276

 

 

AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES

UNAUDITED RECONCILIATION OF NET INCOME TO EBITDA

Quarters ended December 31, 2020 and 2019

 

 

2020

 

 

2019

 

Net income attributable to American Vanguard

$

7,908

 

 

$

3,436

 

Provision for income taxes

 

1,396

 

 

 

1,143

 

Interest expense, net

 

1,374

 

 

 

1,603

 

Depreciation and amortization

 

6,418

 

 

 

5,726

 

EBITDA2

$

17,096

 

 

$

11,908

 

 

AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES

UNAUDITED RECONCILIATION OF NET INCOME TO EBITDA

Years ended December 31, 2020 and 2019

 

 

2020

 

 

2019

 

Net income attributable to American Vanguard

$

15,242

 

 

$

13,601

 

Provision for income taxes

 

3,080

 

 

 

5,202

 

Interest expense, net

 

5,178

 

 

 

7,209

 

Depreciation and amortization

 

23,968

 

 

 

22,626

 

EBITDA2

$

47,468

 

 

$

48,638

 


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 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.

EN
11/03/2021

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