Reaffirms Double-Digit Full-Year 2023 EBITDA
Growth Despite Lower-Than-Expected Q1 Performance
American Vanguard Corporation (NYSE: AVD) today announced
financial results for the quarter ended March 31, 2023.
Q1 2023 Financial Performance – versus Q1 2022 (see table
below):
Eric Wintemute, Chairman and CEO of American Vanguard, stated:
“During 2023, we expect to achieve higher adjusted EBITDA (between
$84MM - $86MM) than in 2022, despite a first quarter setback
arising from delays in restarting our supply chain, which is now
back at capacity. After experiencing multiple delays, our
China-based supplier was unable to deliver intermediates in
sufficient quantities for our leading corn soil insecticide,
Aztec®, until early 2023. As a result, we were only able to produce
and sell about one-third of seasonal demand for that product. This,
coupled with a glut of generic herbicides (not sold by the Company)
in the distribution channel, led to lower sales of domestic crop
products during the quarter. While our domestic non-crop and
international businesses recorded higher sales, the decrease in
sales of higher-margin US crop products led to lower overall
profitability.”
In thousands except for per share
data
March 31, 2023
March 31, 2022
Change
Net sales
$
124,885
$
149,593
$
(24,708
)
Net income
$
1,918
$
9,935
$
(8,017
)
EPS
$
0.07
$
0.33
$
(0.26
)
Adjusted EBITDA1
$
11,511
$
22,867
$
(11,356
)
Mr. Wintemute continued, “Even after taking into account a
lower-than-expected first quarter, we still expect full year 2023
will be stronger than 2022. With extremely low inventories of our
domestic crop products in the distribution channel, we anticipate
higher sales of US crop products in the second half of 2023.
Further, we expect to continue the positive trajectories of our
non-crop and international businesses. While below our original
targets, our revised 2023 targets nevertheless show better
year-over-year performance, as you can see from the table
below.”
Mr. Wintemute continued, “For the sake of clarity, starting with
this fiscal year, we have adopted an accounting change which is
more prevalent among public companies in our sector under which
outbound freight is classified as an element of cost of goods, as
opposed to an operating expense. For us, these costs have typically
been in the range of 7-8% of net sales. Thus, under this revised
approach, our gross margin percent would decrease by that amount,
and operating expenses as a percent of sales would decrease
commensurately. This change has no effect upon operating income,
adjusted EBITDA, net income or earnings per share.”
2023 Performance Targets
Metric
2023 Range
2022 Actual
% Change
Net sales
$640MM - $652MM
$610MM
5 to 7%
Gross margin %
33 to 35%
34%
Similar
Opex as % of sales
25 to 27%
25%
Similar
Adjusted EBITDA
$84MM - $86MM
$73MM
14 to 18%
Net income
$32MM - $34MM
$27.5MM
17 to 25%
Mr. Wintemute concluded: “We look forward to giving you a more
detailed presentation during our upcoming earnings call, including
with respect to our 2025 growth targets.”
Conference Call
Eric Wintemute, Chairman & CEO, Bob Trogele, COO, David T.
Johnson, CFO, Scott Hendrix, U.S. Crop SVP and Jim Thompson, Leader
of the Green Solutions Initiative, will conduct a conference call
focusing on the financial results and strategic themes at 5:00 pm
ET on May 9, 2023. Interested parties may participate in the call
by dialing 713-481-1320. Please call in 10 minutes before the
scheduled start time 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, manufactures, and
markets solutions for crop protection and nutrition, turf and
ornamentals management, commercial and consumer pest control.
American Vanguard is included on the Russell 2000® & Russell
3000® Indexes and the Standard & Poors 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.
AMERICAN VANGUARD CORPORATION
AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data) (Unaudited)
March 31, 2023
December 31, 2022
Current assets:
Cash and cash equivalents
$
19,568
$
20,328
Receivables:
Trade, net of allowance for doubtful
accounts of $5,692 and $5,136, respectively
166,120
156,492
Other
9,999
9,816
Total receivables, net
176,119
166,308
Inventories
219,080
184,190
Prepaid expenses
15,324
15,850
Income taxes receivable
4,879
1,891
Total current assets
434,970
388,567
Property, plant and equipment, net
71,538
70,912
Operating lease right-of-use assets
24,460
24,250
Intangible assets, net
181,909
184,664
Goodwill
47,366
47,010
Other assets
10,610
10,769
Deferred income tax assets, net
220
141
Total assets
$
771,073
$
726,313
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
74,887
$
69,000
Customer prepayments
70,338
110,597
Accrued program costs
71,379
60,743
Accrued expenses and other payables
38,038
20,982
Operating lease liabilities, current
5,367
5,279
Total current liabilities
260,009
266,601
Long-term debt, net
97,000
51,477
Operating lease liabilities, long term
19,614
19,492
Other liabilities, net of current
installments
4,648
4,167
Deferred income tax liabilities, net
14,808
14,597
Total liabilities
396,079
356,334
Commitments and contingent liabilities
Stockholders' equity:
Preferred stock, $0.10 par value per
share; authorized 400,000 shares; none issued
—
—
Common stock, $0.10 par value per share;
authorized 40,000,000 shares; issued 34,463,829 shares at March 31,
2023 and 34,446,194 shares at December 31, 2022
3,446
3,444
Additional paid-in capital
107,591
105,634
Accumulated other comprehensive loss
(9,636
)
(12,182
)
Retained earnings
329,812
328,745
Less treasury stock at cost, 5,057,727
shares at March 31, 2023 and 5,029,892 shares at December 31,
2022
(56,219
)
(55,662
)
Total stockholders’ equity
374,994
369,979
Total liabilities and stockholders'
equity
$
771,073
$
726,313
AMERICAN VANGUARD CORPORATION
AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (In thousands, except per share data)
(Unaudited)
For the three months
ended March 31
2023
2022
Net sales
$
124,885
$
149,593
Cost of sales
(86,348
)
(98,198
)
Gross profit
38,537
51,395
Operating expenses
(35,272
)
(36,646
)
Operating income
3,265
14,749
Change in fair value of an equity
investment
(22
)
83
Interest expense, net
(1,686
)
(398
)
Income before provision for income
taxes
1,557
14,434
Income tax benefit (expense)
361
(4,499
)
Net income
$
1,918
$
9,935
Earnings per common share—basic
$
0.07
$
0.33
Earnings per common share—assuming
dilution
$
0.07
$
0.33
Weighted average shares
outstanding—basic
28,367
29,677
Weighted average shares
outstanding—assuming dilution
29,073
30,349
AMERICAN VANGUARD CORPORATION
AND SUBSIDIARIES ANALYSIS OF SALES
(Unaudited)
For the three Months Ended
March 31
2023
2022
Change
% Change
Net sales:
U.S. crop
$
61,876
$
88,193
$
(26,317
)
-30
%
U.S. non-crop
13,899
13,396
503
4
%
Total U.S.
75,775
101,589
(25,814
)
-25
%
International
49,110
48,004
1,106
2
%
Total net sales:
$
124,885
$
149,593
$
(24,708
)
-17
%
Gross profit:
U.S. crop
$
20,622
$
33,993
$
(13,371
)
-39
%
U.S. non-crop
5,446
5,767
(321
)
-6
%
Total U.S.
26,068
39,760
(13,692
)
-34
%
International
12,469
11,635
834
7
%
Total gross profit:
$
38,537
$
51,395
$
(12,858
)
-25
%
Gross margin:
U.S. crop
33
%
39
%
U.S. non-crop
39
%
43
%
Total U.S.
34
%
39
%
International
25
%
24
%
Gross margin:
31
%
34
%
AMERICAN VANGUARD CORPORATION
AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS (In thousands) (Unaudited)
For the three months ended
March 31
2023
2022
Cash flows from operating activities:
Net income
$
1,918
$
9,935
Adjustments to reconcile net income to net
cash used in operating activities:
Depreciation and amortization of property,
plant and equipment and intangible assets
5,539
5,230
Amortization of other long-term assets
714
1,173
Provision for bad debts
581
494
Fair value adjustment of contingent
consideration
—
599
Stock-based compensation
1,474
1,563
Change in deferred income taxes
122
207
Change in liabilities for uncertain tax
positions or unrecognized tax benefits
371
—
Other
94
2
Foreign currency transaction gains
(446
)
(261
)
Changes in assets and liabilities
associated with operations:
Increase in net receivables
(8,779
)
(33,660
)
Increase in inventories
(33,731
)
(11,738
)
Decrease (increase) in prepaid expenses
and other assets
600
(800
)
Change in income tax receivable/payable,
net
(2,965
)
3,046
Increase in accounts payable
5,655
9,677
Decrease in customer prepayments
(22,759
)
(44,528
)
Increase in accrued program costs
10,660
24,601
(Decrease) increase in other payables and
accrued expenses
(500
)
2,145
Net cash used in operating activities
(41,452
)
(32,315
)
Cash flows from investing activities:
Capital expenditures
(2,590
)
(3,294
)
Proceeds from disposal of property, plant
and equipment
—
54
Acquisition of a product line
(703
)
—
Intangible assets
(15
)
(1,010
)
Net cash used in investing activities
(3,308
)
(4,250
)
Cash flows from financing activities:
Payments under line of credit
agreement
(27,300
)
(12,000
)
Borrowings under line of credit
agreement
72,000
58,000
Net receipt from the issuance of common
stock under ESPP
480
436
Net receipt from the exercise of stock
options
18
—
Receipt payment for tax withholding on
stock-based compensation awards
(13
)
(2,174
)
Repurchase of common stock
(557
)
(6,219
)
Payment of cash dividends
(851
)
(594
)
Net cash provided by financing
activities
43,777
37,449
Net (decrease) increase in cash and cash
equivalents
(983
)
884
Effect of exchange rate changes on cash
and cash equivalents
223
672
Cash and cash equivalents at beginning of
period
20,328
16,285
Cash and cash equivalents at end of
period
$
19,568
$
17,841
AMERICAN VANGUARD CORPORATION
AND SUBSIDIARIES RECONCILIATION OF NET INCOME TO EBITDA
(In thousands) (Unaudited)
Three Months Ended March
31,
Reconciliation of Net Income to
EBITDA
2023
2022
Net income, as reported
$
1,918
$
9,935
Provision for income taxes
(361
)
4,499
Interest expense, net
1,686
398
Proxy costs
541
—
Depreciation and amortization
6,253
6,472
Stock compensation
1,474
1,563
Adjusted EBITDA2
$
11,511
$
22,867
1 Earnings before interest, taxes, depreciation, amortization
and non-cash stock compensation. Adjusted 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. We provide these measures because we believe that they
provide helpful comparisons to other companies in our industry and
peer group. The items excluded from Adjusted EBITDA are detailed in
the reconciliation attached to this news release, and reflect an
elimination of taxes, interest, depreciation, amortization, the
effects of equity compensation, and the proxy contest costs. Other
companies (including the Company’s competitors) may define EBITDA
differently.
2 Earnings before interest, taxes, depreciation, amortization
and non-cash stock compensation. Adjusted 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. We provide these measures because we believe that they
provide helpful comparisons to other companies in our industry and
peer group. The items excluded from Adjusted EBITDA are detailed in
the reconciliation attached to this news release, and reflect an
elimination of taxes, interest, depreciation, amortization, the
effects of equity compensation, and the proxy contest costs. Other
companies (including the Company’s competitors) may define EBITDA
differently.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230509006219/en/
Company Contact: 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 / 212-836-9611
Lcati@equityny.com
American Vanguard (NYSE:AVD)
Gráfico Histórico do Ativo
De Abr 2024 até Mai 2024
American Vanguard (NYSE:AVD)
Gráfico Histórico do Ativo
De Mai 2023 até Mai 2024