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Share Name | Share Symbol | Market | Type |
---|---|---|---|
American Vanguard Corporation | NYSE:AVD | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-3.50 | -27.69% | 9.14 | 12.15 | 9.03 | 12.05 | 905,494 | 00:50:48 |
Sets $15MM Adjusted EBITDA Gain as Transformation Target
American Vanguard Corporation (NYSE: AVD) today announced financial results for the fourth quarter and full year ended December 31, 2023.
Fiscal 2023 Fourth Quarter Financial Highlights – versus Fiscal 2022 Fourth Quarter:
Fiscal 2023 Full Year Financial Highlights – versus Fiscal 2022 Full Year:
Eric Wintemute, Chairman and CEO of American Vanguard, stated: “We rebounded sharply in Q4 after having weathered the effect of global destocking within the distribution channel, the oversupply of Chinese generic products into multiple regions, and the unavailability of our most profitable products due to supply chain issues. Increased demand during Q4 provided evidence that destocking activity continues to subside and that, even while showing greater discipline, procurement within the distribution channel is following more normal patterns. During the quarter, we achieved predicted revenue growth, maintained solid manufacturing operations, sustained strong profit margins by bolstering brand value and strengthened our balance sheet.”
Mr. Wintemute concluded: “Looking forward, we believe that our company is situated well in both domestic and international markets and are targeting 8 to 12% revenue growth resulting in a full year adjusted EBITDA range of $70 to $80 million in 2024. We expect gross profit margins to remain strong, operating expenses to be tightly managed, and factory performance to be efficient. In addition, with the assistance of our consultant Kearney, through our business transformation initiative, we are targeting growth of adjusted EBITDA to 15% of net sales or an additional $15 million or more of adjusted EBITDA on a full year basis. The full benefit of the transformation will be realized by 2026 through a combination of operational, commercial, digital, and general and administrative sub-initiatives. We look forward to giving you a 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 5:00 pm ET on March 13, 2023. Interested parties may participate in the call by dialing 201-493-6744. 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 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.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.
CONSOLIDATED BALANCE SHEETS
December 31, 2023 and 2022
(In thousands, except share data)
(Unaudited)
2023
2022
Assets
Current assets:
Cash and cash equivalents
$
11,416
$
20,328
Receivables:
Trade, net of allowance for credit losses of $7,107 and $5,136, respectively
182,613
156,492
Other
8,356
9,816
Total receivables, net
190,969
166,308
Inventories
219,551
184,190
Prepaid expenses
6,261
15,850
Income taxes receivable
3,824
1,891
Total current assets
432,021
388,567
Property, plant and equipment, net
74,560
70,912
Operating lease right-of-use assets, net
22,417
24,250
Intangible assets, net of amortization
172,508
184,664
Goodwill
51,199
47,010
Deferred income tax assets
2,849
141
Other assets
11,994
10,769
Total assets
$
767,548
$
726,313
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable
$
68,833
$
69,000
Customer prepayments
65,560
110,597
Accrued program costs
68,076
60,743
Accrued expenses and other payables
16,354
20,982
Operating lease liabilities, current
6,081
5,279
Income taxes payable
5,591
—
Total current liabilities
230,495
266,601
Long-term debt
138,900
51,477
Operating lease liabilities, long-term
17,113
19,492
Deferred income tax liabilities
7,892
14,597
Other liabilities
3,138
4,167
Total liabilities
397,538
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 34,676,787 shares in 2023 and 34,446,194 shares in 2022
3,467
3,444
Additional paid-in capital
110,810
105,634
Accumulated other comprehensive loss
(5,963
)
(12,182
)
Retained earnings
332,897
328,745
441,211
425,641
Less treasury stock at cost, 5,915,182 shares in 2023 and 5,029,892 in 2022
(71,201
)
(55,662
)
Total stockholders’ equity
370,010
369,979
Total liabilities and stockholders’ equity
$
767,548
$
726,313
CONSOLIDATED STATEMENTS OF OPERATIONS
Years ended December 31, 2023, 2022 and 2021
(In thousands, except per share data)
(Unaudited)
2023
2022
2021
Net sales
$
579,371
$
609,615
$
557,676
Cost of sales
(400,207
)
(417,227
)
(386,953
)
Gross profit
179,164
192,388
170,723
Operating expenses
Selling, general and administrative
(117,844
)
(119,921
)
(111,093
)
Research, product and regulatory
(38,025
)
(31,816
)
(28,855
)
Total operating expenses
(155,869
)
(151,737
)
(139,948
)
Bargain purchase gain on business acquisition
—
—
171
Operating income
23,295
40,651
30,946
Change in fair value of equity investments, net
(359
)
(732
)
(790
)
Other income
—
—
672
Interest expense, net
(12,639
)
(3,954
)
(3,687
)
Income before provision for income taxes and loss on equity method investment
10,297
35,965
27,141
Provision for income taxes
(2,778
)
(8,561
)
(8,166
)
Income before loss on equity method investment
7,519
27,404
18,975
Loss from equity method investment
—
—
(388
)
Net income
$
7,519
$
27,404
$
18,587
Earnings per common share—basic
$
0.27
$
0.94
$
0.62
Earnings per common share—assuming dilution
$
0.26
$
0.92
$
0.61
Weighted average shares outstanding—basic
28,128
29,234
29,811
Weighted average shares outstanding—assuming dilution
28,533
29,872
30,410
AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES
ANALYSIS OF SALES
For the years and quarters ended December 31, 2023 and 2022
(Unaudited)
For the quarters ended December 31,
For the years ended December 31,
2023
2022
2023
2022
Net sales:
U.S. crop
$
83,406
$
68,231
$
269,229
$
288,624
U.S. non-crop
25,246
22,865
75,287
76,709
Total U.S.
108,652
91,096
344,516
365,333
International
63,528
68,366
234,855
244,282
Total net sales
$
172,180
$
159,462
$
579,371
$
609,615
Total cost of sales
$
(117,545
)
$
(117,529
)
$
(400,207
)
$
(417,227
)
Total gross profit
54,635
41,933
179,164
192,388
Total gross margin
32
%
26
%
31
%
32
%
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years ended December 31, 2023, 2022 and 2021
(In thousands)
(Unaudited)
2023
2022
2021
Cash flows from operating activities:
Net income
$
7,519
$
27,404
$
18,587
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
21,780
22,138
22,229
Amortization of other long-term assets
1,754
3,573
3,943
Amortization and accretion of deferred loan fees and discounted liabilities
254
289
359
Loss on disposal of property, plant and equipment
—
268
194
Provision for bad debts
1,935
1,171
649
Provision for inventory obsolescence
517
340
1,034
Loan principal and interest forgiveness
—
—
(672
)
Fair value adjustment of contingent consideration
—
610
758
Decrease in environmental liability
—
—
(167
)
Stock-based compensation
6,138
5,684
6,880
Deferred income taxes
(9,710
)
(5,278
)
(2,090
)
Changes in liabilities for uncertain tax positions or unrecognized tax benefits
(508
)
(1,441
)
(1,783
)
Change in equity investment fair value
359
732
790
Loss from equity method investment
—
—
388
Bargain purchase gain
—
—
(171
)
Non-cash lease expense
256
68
286
Foreign currency transaction gains
(581
)
(29
)
(225
)
Changes in assets and liabilities associated with operations, net of business combinations:
Increase in net receivables
(20,278
)
(6,447
)
(24,347
)
(Increase) decrease in inventories
(27,832
)
(29,560
)
8,323
(Increase) decrease in income tax receivable, net
3,568
(4,910
)
6,051
(Increase) decrease in prepaid expenses and other assets
1,269
(3,082
)
(4,581
)
Increase (decrease) in accounts payable
(2,287
)
1,704
8,783
(Decrease) Increase in deferred revenue
(45,079
)
47,551
19,280
Increase (decrease) in accrued program costs
7,244
(2,449
)
17,877
Increase (decrease) in other payables and accrued expenses
(5,066
)
90
3,986
Decrease in contingent consideration
—
(1,321
)
—
Net cash (used in) provided by operating activities
(58,748
)
57,105
86,361
Cash flows from investing activities:
Capital expenditures
(11,878
)
(13,261
)
(9,518
)
Proceeds from disposal of property, plant and equipment
242
84
—
Acquisitions of business and product line
(5,195
)
—
(10,000
)
Intangible assets
(186
)
(1,293
)
(524
)
Net cash used in investing activities
(17,017
)
(14,470
)
(20,042
)
Cash flows from financing activities:
Payments under line of credit agreement
(172,500
)
(254,000
)
(186,569
)
Borrowings under line of credit agreement
259,100
253,000
131,000
Payment of contingent consideration
—
(68
)
(1,301
)
Net receipt from the issuance of common stock under ESPP
981
837
743
Net receipt from the exercise of stock options
46
827
172
Net payment from common stock purchased for tax withholding
(1,967
)
(2,067
)
(2,955
)
Repurchase of common stock
(15,539
)
(34,002
)
(4,579
)
Payment of cash dividends
(3,384
)
(2,787
)
(2,382
)
Net cash provided by (used in) financing activities
66,737
(38,260
)
(65,871
)
Net (decrease) increase in cash and cash equivalents
(9,028
)
4,375
448
Effect of exchange rate changes on cash and cash equivalents
116
(332
)
(86
)
Cash and cash equivalents at beginning of year
20,328
16,285
15,923
Cash and cash equivalents at end of year
$
11,416
$
20,328
$
16,285
AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES
RECONCILIATION OF NET INCOME TO EBITDA
For the years and quarters ended December 31, 2023 and 2022
(Unaudited)
For the years ended December 31,
2023
2022
Net income
$
7,519
$
27,404
Provision for income taxes
2,778
8,561
Interest expense, net
12,639
3,954
Proxy costs
541
1,785
Depreciation and amortization
23,534
25,711
Stock compensation expense
6,138
5,684
Transformation costs
957
-
Adjusted EBITDA2
$
54,106
$
73,099
For the quarters ended December 31,
2023
2022
Net income
$
6,979
$
3,898
Provision (benefit) for income taxes
712
(1,626
)
Interest expense, net
4,357
1,698
Depreciation and amortization
5,684
6,406
Stock compensation expense
1,881
1,288
Transformation costs
957
—
Adjusted EBITDA2
$
20,570
$
11,664
______________________________ 1 Earnings before interest, taxes, depreciation, and amortization. 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. The items excluded from adjusted EBITDA are detailed in the reconciliation attached to this news release. Other companies (including the Company’s competitors) may define adjusted EBITDA differently. 2 Earnings before interest, taxes, depreciation, and amortization. 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. The items excluded from adjusted EBITDA are detailed in the reconciliation attached to this news release. Other companies (including the Company’s competitors) may define adjusted EBITDA differently.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240314306132/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 Lcati@equityny.com
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