American Vanguard Reports Second Quarter and Mid-Year 2018 Results
Net sales of $107.0 million in 2018, compared with $77.9 million in 2017
Net income of $5.6 million in 2018, compared with $4.3 million in 2017
EBITDA of $14.0 million in 2018, compared to $11.9 million in 2017
Earnings per diluted share of $0.19 in 2018, compared with $0.15 in 2017
2017 Product and Business Acquisitions Drive Growth
Newport Beach, CA – August 6, 2018 – American Vanguard Corporation (NYSE:AVD), today announced financial results for the second quarter and 6-month period that ended June 30, 2018.
Financial Highlights: 2018 Second Quarter – versus 2017 Second Quarter
Financial Highlights: First 6-Months of 2018 – versus First 6-Months of 2017
Net sales of $211.2 million in 2018, compared to $148.6 million in 2017
Net income of $10.3 million in 2018, compared to $7.8 million in 2017
EBITDA1 of $27.3 million in 2018, compared to $22.4 million in 2017
Earnings per diluted share of $0.34 in 2018, compared to $0.26 in 2017
Note: Further details are available in the financial schedules attached to this press release
Eric Wintemute, Chairman and CEO of American Vanguard commented, “Our overall financial performance for this year’s second quarter and first half improved at both the top and bottom lines. Quarterly net sales rose 37%, and first-half net sales rose 42% due, in both periods, to the addition of new product lines from acquisitions that we completed in 2017. Net sales of pre-existing product lines were mixed during both periods. For example, while we recorded stronger sales from soil fumigants, bromacil (for high value fruits), Folex (for cotton), Impact herbicide (for corn) and Dacthal herbicide (for fruits and vegetables), we saw decreases in net sales of Bidrin (in light of high channel inventory and reduced pest pressure), Aztec® corn soil insecticide and Thimet (in light of reduced peanut acres).”
Mr. Wintemute continued, “Our manufacturing performance during the quarter was one of the best in recent history with factory activity fully absorbing manufacturing costs and yielding a net benefit during the period. We achieved a gross margin percentage of 40% in both the second quarter and first half of 2018, due to higher volume sales of lower margin, newly-acquired products. Further, while our operating expenses rose on an absolute basis, they declined as a percentage of net sales, due in part to improved economies of scale across our businesses and in part to a G&A benefit from our quarterly revaluation of acquisition liabilities. Throughout the course of 2018, we have continued to integrate newly-acquired businesses, launch new products, maintain the regulatory defense of important products, and advance the development of our SIMPAS precision application technology. With modest interest expense and a reduced tax rate, our net income increased by 30% for the quarter and 32% for the first half. Also EBITDA increased during the quarter and half-year by 17% and 22%, respectively.”
Mr. Wintemute concluded, “During the balance of 2018, we anticipate strong performance from a number of key components of our business, including seasonally higher sales of soil fumigants and our cotton defoliant Folex. Also, our Central American region and non-crop business are both primed to deliver improved sales in next two quarters. Further, we anticipate continued demand for our products in fruit and vegetables, strong sales of our Dibrom® mosquito adulticide and stable demand for our corn products leading into the 2019 spring planting season. Taken together, these factors should enable us to generate annual net sales within the range of $450 – $470 million for 2018 with little or no change in gross margin. We will provide additional detail on our financial performance and business prospects during the earnings 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 at 4:30 pm ET / 1:30 pm PT on Monday, August 6, 2018. Interested parties may participate in the call by dialing (201) 493-6744 – please dial 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 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.
William A. Kuser, Director of Investor Relations
The Equity Group Inc.