Form 8-K AMERICAN VANGUARD CORP For: Apr 28

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (date of earliest event reported): April 28, 2015

 

 

AMERICAN VANGUARD CORPORATION

(Exact name of registrant as specified in its charter)

 

 

 

Delaware		001-13795		95-2588080
(State or other jurisdiction of incorporation)		Commission File Number		(I.R.S. Employer Identification No.)

4695 MacArthur Court

Newport Beach, California 92660

(Address of principal executive offices)

Registrant’s telephone number: (949) 260-1200

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

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Item 1.01.

Entry into a Material Definitive Agreement

As of April 28, 2015, AMVAC Chemical Corporation (“AMVAC”), our principal operating subsidiary, as borrower, and affiliates (including registrant), as guarantors and/or borrowers, entered into a Second Amendment and Waiver to Second Amended and Restated Credit Agreement (the “Second Amendment”) with a group of commercial lenders led by Bank of the West (AMVAC’s primary bank) as agent, swing line lender and L/C issuer. Under the Second Amendment, the Consolidated Funded Debt Ratio has been increased for the second, third and fourth quarters of 2015 (to 3.5-to-1 from 3.25-to-1) and a fixed charge covenant, requiring, in effect, that the ratio of consolidated current assets to consolidated current liabilities exceed 1.2-to-1 for the duration of the term of the credit facility, was added. The Form of the Second Amendment is attached hereto as Exhibit 10.1 and is incorporated by reference herein. In addition, the Second Amendment is reported in the press release attached hereto as Exhibit 99.1.

The information contained in this Current Report on Form 8-K, including the Exhibits attached hereto, is being furnished under Items 1.01, 2.02, 8.01 and 9.01 and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

 

Item 2.02.

Results of Operations and Financial Condition

On April 30, 2015 American Vanguard Corporation issued a press release announcing its financial performance for the three months ended March 31, 2015. The full text of that press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

 

Item 8.01

Other Items

On April 29, 2015, American Vanguard Corporation issued a press release announcing that its international subsidiary, AMVAC C.V., had completed the acquisition of the Bromacil product line in territories outside of the U.S. and Canada from E. I. Dupont de Nemours & Company. Financial terms of the transaction were not disclosed. The full text of that press release is attached hereto as Exhibit 99.2 and is incorporated herein by reference.

 

Item 9.01

Financial Statements and Exhibits.

(d) Exhibits

 

Exhibit 10.1		Form of Second Amendment to Second Amended and Restated Credit Agreement.
Exhibit 99.1		Press release dated April 30, 2015 of American Vanguard Corporation announcing both financial performance for the three months ended March 31, 2015 and entry into the Second Amendment.
Exhibit 99.2		Press release dated April 29, 2015 of American Vanguard Corporation announcing the acquisition of the Bromacil product line from E. I. Dupont de Nemours & Company.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, American Vanguard Corporation has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

				AMERICAN VANGUARD CORPORATION
Date: May 1, 2015
				By:		/s/ Timothy J. Donnelly
						Timothy J. Donnelly
						Chief Administrative Officer, General Counsel & Secretary

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INDEX TO EXHIBITS

 

Exhibit No.		Description
Exhibit 10.1		Form of Second Amendment to Second Amended and Restated Credit Agreement.
Exhibit 99.1		Press release dated April 30, 2015 of American Vanguard Corporation announcing financial performance for the three month period ended March 31, 2015 as well as entry into the Second Amendment.
Exhibit 99.2		Press release dated April 29, 2015 of American Vanguard Corporation announcing the acquisition of the Bromacil product line from E. I. Dupont de Nemours & Company.

Exhibit 10.1

EXECUTION VERSION

FORM OF SECOND AMENDMENT AND WAIVER TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT

THIS SECOND AMENDMENT AND WAIVER TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment”) is entered into as of April 14, 2015 among AMVAC CHEMICAL CORPORATION, a California corporation (the “Company”), AMVAC NETHERLANDS B.V., a besloten vennootschap met beperkte aansprakelijkheid, organized under the law of the Netherlands (“AMVAC Netherlands”), AMVAC C.V., a commanditaire vennootschap, organized under the law of the Netherlands (collectively, with AMVAC Netherlands, the “Designated Borrowers”), AMERICAN VANGUARD CORPORATION, a Delaware corporation (“American Vanguard”), GEMCHEM, INC., a California corporation (“GemChem”), 2110 DAVIE CORPORATION, a California corporation (“2110 Davie”), AVD INTERNATIONAL LLC, a Delaware limited liability company (collectively, with the Designated Borrowers, American Vanguard, GemChem and 2110 Davie, the “Guarantors”), the Lenders party hereto, and BANK OF THE WEST, as Agent.

RECITALS

A. Pursuant to a Second Amended and Restated Credit Agreement dated as of June 17, 2013 (as amended by a First Amendment dated as of July 11, 2014, the “Credit Agreement”) among the Company, the Guarantors, the Designated Borrowers, the Lenders party thereto and the Agent, the Lenders extended and agreed to extend credit to the Borrowers. Capitalized terms used herein which are not otherwise defined shall have the meanings given them in the Credit Agreement.

B. The Company has notified the Lenders that, pursuant to Asset Purchase and Sale Agreements dated as of April, 2015 (the “Bromacil APSAs”) by and between E. I. Du Pont De Nemours and Company (together with its applicable Affiliates, the “Seller”) and AMVAC Netherlands, AMVAC Netherlands (together with its applicable Affiliates, the “Buyer”) intends to acquire the Non-Singapore Purchased Assets and the Singapore Purchased Assets (as such terms are defined in the Bromacil APSAs) in a Permitted Acquisition (the “Bromacil Acquisition”).

C. To pay a portion of the consideration for the Bromacil Acquisition, the Company has notified the Lenders that the Buyer intends to issue evidence of unsecured Indebtedness in a principal amount of $10,000,000 due one year from the date of issuance bearing interest, payable quarterly, at a rate per annum equal to 4.00% (the “Seller Note”).

D. In connection with the Bromacil Acquisition , the Company has requested the Lenders to (i) waive, solely for the period from the date of this Amendment until one Business Day prior to the closing of the Bromacil Acquisition, the requirement that the Company deliver to Agent at least 15 days prior to such Acquisition a Compliance Certificate prepared on a Pro Forma Basis and projections evidencing compliance with the Credit Agreement as provided in clause (f) of the definition of “Permitted Acquisition” in Section 1.01 of the Credit Agreement (the “Specified Requirement”) and (ii) amend certain terms of the Credit Agreement as further provided in this Amendment.

NOW, THEREFORE, in consideration of the above Recitals and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto hereby agree as follows:

AGREEMENT

1. Waiver. Subject to the occurrence of the Amendment Effective Date, the Required Lenders hereby waive the Specified Requirement solely with respect to the Bromacil Acquisition; provided, that this waiver shall terminate unless the Company delivers to Agent on a date prior to the Bromacil Acquisition acceptable to Agent in its sole discretion a Compliance Certificate prepared on a Pro Forma Basis and projections, each in form and substance satisfactory to Agent, demonstrating that, after

 

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giving effect to such Acquisition and this Amendment, no Event of Default will have occurred or is reasonably expected to occur. Except for the specific waiver set forth in this Section, nothing contained herein shall be deemed to constitute a waiver of (a) any rights or remedies Agent or any Lender may have under the Credit Agreement or any other Loan Document or under any Law or (b) the Loan Parties’ obligation to comply fully with any duty, term, condition, obligation or covenant contained in the Credit Agreement and the other Loan Documents not specifically waived. The specific waiver set forth herein is effective only with respect to the Specified Requirement and shall not obligate the Lenders to waive any other term or condition in the Credit Agreement or any other Loan Document.

2. Amendments.

(i) New definitions of “Consolidated Current Assets,” “Consolidated Current Liabilities” and “Modified Consolidated Current Ratio” are added to Section 1.01 of the Credit Agreement in correct alphabetical order, each to read as follows:

“Consolidated Current Assets” means, as of any date, the aggregate amount of all assets of American Vanguard and its Subsidiaries, determined on a consolidated basis, which would be properly classified as current assets in accordance with GAAP.

“Consolidated Current Liabilities” means, as of any date, the aggregate amount of all liabilities of American Vanguard and its Subsidiaries, determined on a consolidated basis, which would be properly classified as current liabilities in accordance with GAAP.

“Modified Consolidated Current Ratio” means, as of any date of determination, the ratio of (a) Consolidated Current Assets as of such date to (b) Consolidated Current Liabilities as of such date plus, to the extent not included in Consolidated Current Liabilities, Total Outstandings under this Agreement.

(ii) Clause (e) of the definition of “Permitted Acquisition” in Section 1.01 of the Credit Agreement is amended and restated in its entirety to read as follows:

(e) The Consolidated Funded Debt Ratio, after giving effect to the Acquisition, will not exceed (i) solely for purposes of the Acquisitions contemplated by the Asset Purchase and Sale Agreements dated as of April, 2015 by and between E. I. Du Pont De Nemours and Company and AMVAC Netherlands, 3.25 to 1.00 and (ii) in all other cases 3.00 to 1.00, in each case determined on a Pro Forma Basis.

(iii) Section 8.08(a) of the Credit Agreement is amended and restated in its entirety and a new Section 8.08(c) is added immediately after Section 8.08(b), each to read as follows:

(a) Permit the Consolidated Funded Debt Ratio as of the end of any fiscal quarter, commencing March 31, 2015, to exceed the ratio set forth below opposite such fiscal quarter:

 

Fiscal quarter ending:		Maximum Consolidated Funded Debt Ratio
March 31, 2015 through December 31, 2015		3.50 to 1.00
March 31, 2016 and each fiscal quarter thereafter		3.25 to 1.00

(c) Permit the Modified Consolidated Current Ratio as of the end of any fiscal quarter, commencing March 31, 2015, to be less than 1.20 to 1.00.

(iv) The form of Compliance Certificate appearing as Exhibit D to the Credit Agreement is amended and restated in its entirety to read as set forth on Exhibit D to this Amendment.

 

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3. Conditions Precedent to Effectiveness. This Amendment shall be effective as of the date (the “Amendment Effective Date”) when the Agent determines that the following conditions have been satisfied:

(a) the Agent shall have executed and received executed counterparts of this Amendment from each of the Loan Parties and the Required Lenders, by original or electronic transmission (promptly followed by originals), each in form and substance satisfactory to the Agent;

(b) all acts and conditions required to be done and performed and to have happened precedent to the execution, delivery and performance of this Amendment and to constitute the same a legal, valid and binding obligation of the parties, enforceable in accordance with its terms shall have been done and performed and shall have happened in due and strict compliance with all applicable laws;

(c) all documentation shall be reasonably satisfactory in form and substance to the Agent and its counsel;

(d) any upfront and other fees or expenses, including, without limitation, fees and expenses of counsel, required to be paid on or before the Amendment Effective Date shall have been paid, and

(e) there shall not have occurred and be continuing a Default or Event of Default.

4. Miscellaneous Provisions.

(a) Representations and Warranties. Each Loan Party hereby represents and warrants to the Agent and each Lender that each of the representations and warranties of the Company and each other Loan Party contained in Article V of the Credit Agreement and in any other Loan Document shall be true and correct in all material respects on and as of the Amendment Effective Date and after giving effect to the Bromacil Acquisition, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct in all material respects as of such earlier date. The Company further represents, warrants and covenants for the benefit of the Agent and each Lender that the Recitals to this Amendment are true and correct in all material respects and that, without the prior written consent of the Required Lenders, no portion of the principal amount payable under the Seller Note shall be paid or payable prior to one year from the date of execution.

(b) Ratification. The Credit Agreement and each of the other Loan Documents, as amended hereby, is hereby ratified and remains in full force and effect.

(c) Entire Agreement. This Amendment embodies the entire agreement and understanding between the parties hereto and supersedes all prior agreements and understandings relating to the subject matter hereof and thereof.

(d) Governing Law. This Amendment shall be governed by and construed in accordance with the laws of the State of California, without giving effect to choice of law rules.

(e) Counterparts. This Amendment may be executed in any number of counterparts, all of which taken together shall constitute one and the same agreement and any of the parties hereto may execute this Amendment by signing any such counterpart.

[Remainder of page intentionally left blank.]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the day and year first above written.

 

 

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CERTIFICATE OF AUTHORIZED OFFICER

The undersigned hereby certifies to the Agent that (1) each of the Loan Parties has previously delivered to the Agent a true, correct and complete copy of its Organization Documents (collectively, the “Delivered Organization Documents”), (2) since such delivery, there has been no change in the Delivered Organization Documents except for those changes attached, and no such document has been repealed, revoked, rescinded or amended in any respect, and each remains in full force and effect, (3) each of the Loan Parties remains in good standing in the jurisdiction of its organization, (4) the resolutions (the “Delivered Resolutions”) previously delivered to the Agent by the Loan Parties authorize the execution, delivery and performance of the foregoing Amendment, (5) the Delivered Resolutions authorize the Person(s) holding the office(s) indicated above or, if none, the office(s) held by the Person(s) executing the foregoing (the “Authorized Executing Office”) to execute the foregoing on behalf of the respective Loan Parties, (6) each Person executing the foregoing Amendment on behalf of a Loan Party has been duly elected and now holds the Authorized Executing Office set forth below his(her) name, and the signature set forth above is his(her) true signature, (7) the undersigned is authorized to deliver this Certificate on behalf of each of the Loan Parties, and (8) the Agent may conclusively rely on this Certificate unless and until superseding documents shall be delivered to the Agent.

 

Certificate of Authorized Officer

 

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EXHIBIT D

FORM OF COMPLIANCE CERTIFICATE

Financial Statement Date:                                                              

 

To:	Bank of the West, as Agent

Ladies and Gentlemen:

Reference is made to that certain Second Amended and Restated Credit Agreement, dated as of June 17, 2013 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “Agreement”; the terms defined therein being used herein as therein defined), among AMVAC Chemical Corporation, a California corporation (the “Company”), the Designated Borrowers from time to time party thereto, the other Loan Parties and Lenders from time to time party thereto, and Bank of the West, as Agent, L/C Issuer and Swing Line Lender.

The undersigned Responsible Officer hereby certifies as of the date hereof that he/she is the                                                   of the Company, and that, as such, he/she is authorized to execute and deliver this Certificate to Agent on the behalf of the Company, and that:

[Use following paragraph 1 for fiscal year-end financial statements]

1. The Company has delivered the year-end audited financial statements required by Section 6.01(a) of the Agreement for the fiscal year of American Vanguard ended, as of the above date, together with the report and opinion of an independent certified public accountant required by such section.

[Use following paragraph 1 for fiscal quarter-end financial statements]

1. The Company has delivered the unaudited financial statements required by Section 6.01(b) of the Agreement for the fiscal quarter of the Company ended as of the above date. Such financial statements fairly present the financial condition, results of operations and cash flows of American Vanguard and its Subsidiaries in accordance with GAAP as at such date and for such period, subject only to normal year-end audit adjustments and the absence of footnotes.

2. The undersigned has reviewed and is familiar with the terms of the Agreement and has made, or has caused to be made under his/her supervision, a detailed review of the transactions and condition (financial or otherwise) of American Vanguard and its Subsidiaries during the accounting period covered by such financial statements.

3. A review of the activities of American Vanguard and its Subsidiaries during such fiscal period has been made under the supervision of the undersigned with a view to determining whether during such fiscal period each of the Borrowers performed and observed all its Obligations under the Loan Documents, and

[select one:]

[to the best knowledge of the undersigned during such fiscal period each of the Borrowers performed and observed each covenant and condition of the Loan Documents applicable to it, and no Default has occurred and is continuing.]

Form of Compliance Certificate

 

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—or—

[to the best knowledge of the undersigned, during such fiscal period the following covenants or conditions have not been performed or observed and the following is a list of each such Default and its nature and status:]

4. The representations and warranties of (i) the Loan Parties contained in Article VI of the Agreement and (ii) each Loan Party contained in each other Loan Documents or in any document furnished at any time under or in connection with the Loan Documents, are true and correct on and as of the date hereof, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct as of such earlier date, and except that for purposes of this Compliance Certificate, the representations and warranties contained in subsections (a) and (b) of Section 6.01 of the Agreement shall be deemed to refer to the most recent statements furnished pursuant to clauses (a) and (b), respectively, of Section 6.01 of the Agreement, including the statements in connection with which this Compliance Certificate is delivered.

5. The financial covenant analyses and information set forth on Schedules 1 and 2 attached hereto are true and accurate on and as of the date of this Certificate.

IN WITNESS WHEREOF, the undersigned has executed this Certificate as of             ,             .

 

Form of Compliance Certificate

 

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SCHEDULE 1

to the Compliance Certificate

[attach financial statements]

Schedule 1 to Form of Compliance Certificate

 

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SCHEDULE 2

to the Compliance Certificate

For the Quarter/Year ended                                                       (“Statement Date”)

 

								($ in 000’s)
I.		Section 8.08(a) — Consolidated Funded Debt Ratio
		A.		Consolidated Funded Indebtedness (incl. Letters of Credit, Capitalized Leases, Amounts Outstanding Under Product Acquisition Agreements, etc.)
				1.		Consolidated Funded Indebtedness:		$
		B.		Consolidated EBITDA for the four fiscal quarters just ended:
				1.		Consolidated Net Income:		$
				2.		Consolidated Interest Expense:		$
				3.		Provision for taxes:		$
				4.		Depreciation and amortization:		$
				5.		Nonrecurring non-cash charges and up to $5,000,000 in related cash charges subject to consent of Agent:		$
				6.		Losses (gains) on the sale of fixed assets:		$
				7.		Non-cash stock based compensation expenses:		$
				8.		Extraordinary losses (gains):		$
				9.		Losses (gains) from Dispositions of assets and discontinued operations outside of the ordinary course of business:		$
				10.		EBITDA subject to consent of Agent related to Acquisitions pursuant to Permitted Acquisitions under the Credit Agreement		$
				11.		Consolidated EBITDA (Sum of 1+2+3+4+5+/-6+7+/-8+/-9+10):		$
		C.		Consolidated Funded Debt Ratio (Ratio of 1.A.1 to 1.B.11):

Not to exceed				3.50 to 1.00 from March 31, 2015 through December 31, 2015
Not to exceed				3.25 to 1.00 from March 31, 2016 and thereafter

 

Applicable Rate
Pricing Level		Consolidated Funded Debt Ratio		Unused fee				Eurocurrency Rate +				Alternate Base Rate +
								Standby Letter of Credit Fees
								Daily One-Month LIBOR+
I		>3.00:1.00			0.35	%			2.50	%			1.50	%
II		<3.00:1.00 but >2.50:1.00			0.30	%			2.25	%			1.25	%
III		<2.50:1.00 but >2.00:1.00			0.25	%			2.00	%			1.00	%
IV		<2.00:1.00 but >1.50:1.00			0.20	%			1.75	%			0.75	%
V		<1.50:1.00			0.15	%			1.50	%			0.50	%

Schedule 2 to Form of Compliance Certificate

 

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Applicable Rate based on the most recently submitted Compliance Certificate:		Level
Applicable Rate based on current Compliance Certificate:		Level

 

II.		Section 8.08(b) — Consolidated Fixed Charge Coverage Ratio
		A.		Adjusted Consolidated EBITDA:
				1.		Consolidated EBITDA (I.B.11 above):		$__________
				2.		Unfinanced Capital Expenditures:		$__________
				3.		Taxes paid in Cash:		$__________
				4.		Distributions paid in cash:		$__________
				5.		Adjusted Consolidated EBITDA (Sum of 1-2-3-4):		$__________
		B.		Adjusted CPLTD:
				1.		Current Portion of Consolidated Funded Indebtedness:		$__________
				2.		Current Portion of Capital Lease Obligations:		$__________
				3.		Consolidated Interest Expenses:		$__________
				4.		Current Portion of Amounts Outstanding under Product Acquisition Agreements		$__________
				5.		Deferred Short-Term Earn Out Amounts:		$__________
				6.		Adjusted CPLTD (Sum of 1+2+3+4+5):		$__________
		C.		Ratio of II.A.5 to 11.B.6:
				Not to be less than 1.25 to 1.00.
III.		Section 8.08(c) — Modified Consolidated Current Ratio
		A.		Consolidated Current Assets:				$
		B.		Modified Current Liabilities:
				1.		Consolidated Current Liabilities:		$__________
				2.		Total Outstandings:		$__________
				3.		Modified Current Liabilities (Sum of 1+ 2):		$__________
		C.		Modified Consolidated Current Ratio:				__________
				Not to be less than 1.20 to 1.00.
IV.		Section 8.09 — Capital Expenditures
		A.		Capital Expenditures fiscal year to date:				$__________
Not to exceed $30,000,000 in any fiscal year plus not more than $10,000,000 carried over from the immediately preceding fiscal year.

 

Schedule 2 to Form of Compliance Certificate

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		B.		Carried Over Capital Expenditures from prior fiscal year:		$__________
V.		Section 7.14 — Material Subsidiaries
		A.		5% of consolidated net assets of American Vanguard:		$__________
		B.		Consolidated net assets of Subsidiaries who were not Guarantors or Material Subsidiaries as of the end of the immediately preceding fiscal quarter:		$__________
		C.		If B is greater than A, identity of Subsidiary (Subsidiaries) whose net assets increased (or which was acquired or created) and caused such excess:		__________
		D.		10% of consolidated gross revenues of American Vanguard for 4 fiscal quarters most recently ended:		$__________
		E.		Consolidated gross revenues of Subsidiaries who were not Guarantors for the 4 fiscal quarters most recently ended.		$__________
		F.		If D is greater than E, identity of Subsidiary (Subsidiaries) whose gross revenues increased (or which was acquired or created) and caused such excess.		__________
		G.		Subsidiary(ies) included in C and F that are not Guarantors:		__________
		H.		Identity of any Subsidiary acquiring Equity Interests in Designated Borrower or Material Subsidiary during most recent fiscal quarter:		__________
Domestic Subsidiaries included in Line G are Material Domestic Subsidiaries. Material Domestic Subsidiaries and Domestic Subsidiaries holding Equity Interests in Material Subsidiaries (Line H) are required to be Affiliate Domestic Guarantors.
Foreign Subsidiaries included in Line G are Material Foreign Subsidiaries. Material Foreign Subsidiaries and Foreign Subsidiaries holding Equity Interests in Material Subsidiaries (Line H) are required to be Affiliate Foreign Guarantors.
VI.		Section 8.05 – Investments
		A.		Consolidated outstanding Investments of American Vanguard in Foreign Wholly-Owned Subsidiaries:		$_________
When aggregated with $20 Million in Investments in Dutch Borrowers not to exceed $70 Million.
		B.		Consolidated outstanding Investments of American Vanguard in Joint Ventures and other Investments:		$__________
Such Investments made after Closing Date not to exceed $20 Million.
VII.		Section 8.16 – Distributions
		A.		Consolidated Net Income for 4 quarters ending with quarter prior to current quarter:		$__________

 

Schedule 2 to Form of Compliance Certificate

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		B.		If current quarter is the last quarter of 2014 or first quarter of 2015, cash dividends paid during third quarter of 2014:
		C.		Dividends declared in current quarter for payment in subsequent quarter (if such fiscal quarter is last quarter of 2014 or first quarter of 2015, not to exceed the greater of VII.B or amount permitted by VII.F):		$__________
		D.		Cash dividends paid in current fiscal quarter and in two prior fiscal quarters:		$__________
		E.		Sum of VII.C. plus VII.D. (not to exceed VII.A. unless current fiscal quarter is last quarter of 2014 or first quarter of 2015):		$__________
Cash dividends declared in any fiscal quarter and paid in subsequent fiscal quarter not to exceed, when aggregated with cash dividends paid or payable during the fiscal quarter in which such cash dividend is declared and cash dividends paid during the two fiscal quarters prior to the quarter in which such declaration is paid, Consolidated Net Income for the four fiscal quarters ending immediately prior to the fiscal quarter in which such cash dividends are declared; provided, however, that cash dividends declared in each of the fourth fiscal quarter of 2014 and the first fiscal quarter of 2015 (and payable in the first and second fiscal quarters of 2015, respectively) shall not exceed the greater of (i) the amount otherwise provided in this subsection (c) and (ii) the cash dividends paid in the fiscal quarter ending September 30, 2014.

 

Schedule 2 to Form of Compliance Certificate

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Exhibit 99.1

 

FOR IMMEDIATE RELEASE

AMERICAN VANGUARD REPORTS FIRST QUARTER 2015 RESULTS

Newport Beach, CA – April 30, 2015 – American Vanguard Corporation (NYSE: AVD), today announced financial results for the first quarter ended March 31, 2015.

Financial Highlights Fiscal 2015 First Quarter – versus Fiscal 2014 First Quarter

 

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Net sales of $66.6 million, compared with $81.1 million.

 

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Net income of $0.05 million, compared with $2.2 million.

 

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Earnings per diluted share of $0.00, compared with $0.07.

Eric Wintemute, Chairman & CEO of American Vanguard commented: “While net sales declined during the period, largely due to soft conditions in the corn market and lower international sales, we achieved a breakeven earnings result in the quarter through assertive management of our costs. With reduced inventory levels in the distribution channel and a just-in-time procurement approach by growers and retailers, we stand ready to meet our customers’ needs as the 2015 corn season continues to unfold.”

Mr. Wintemute continued: “In the near and mid-term, however, we are looking to other crops and regions for the bulk of our business. As reported yesterday, we have just completed the second of two acquisitions that will help to expand our international business – the Nemacur^® product line from Adama which we reported on April 6th and now the Bromacil^® product line from DuPont. We believe that these acquisitions will expand our annual international sales by over 25% and give us an increased presence in Europe, Asia and LATAM. Also, in connection with the Bromacil acquisition, we entered into an amendment to our senior credit facility with our senior lenders, led by Bank of the West, with whom we have maintained an excellent relationship for over 30 years. Further details on the amendment will be in our public filings.

“During the balance of this year, our performance will be defined by sales into not only corn, but also potatoes, cotton, peanuts, vegetables, and non-crop markets, such as public health. There are many factors affecting the strength of these non-corn markets, including, for example, pest pressure in crops and storm activity in the Southeast. However, on the whole, these markets have been relatively stable. While addressing markets both at home and abroad, we will continue to work at improving manufacturing efficiency, and, during 2015 we expect that our unabsorbed factory overhead costs will be up to 25% below those of 2014.”

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Mr. Wintemute concluded: “Looking forward, we are placing a renewed emphasis on innovative technology. We are presently collaborating on three separate fronts: to obtain new active ingredients; to expand market access of our natural oil product line; and to acquire license rights to biological and other crop protection products. These efforts should provide AMVAC with a pipeline of new products and enable us to diversify our portfolio further. We will be reporting on these initiatives over the next several quarters and look forward to giving you more detail regarding first quarter results in our upcoming conference 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 at 4:30 pm ET / 1:30 pm PT on Thursday, April 30, 2015. 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.

 

Company Contact:		Investor Representative
American Vanguard Corporation		The Equity Group Inc.
William A. Kuser, Director of Investor Relations		www.theequitygroup.com
(949) 260-1200		Lena Cati (212) 836-9611
[email protected]		[email protected]

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AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME

(In thousands, except per share data)

(Unaudited)

 

		For the three months ended March 31
		2015				2014
Net sales		$	66,565			$	81,095
Cost of sales			41,915				52,190
Gross profit			24,650				28,905
Operating expenses			24,344				25,199
Operating income			306				3,706
Interest expense			680				631
Interest capitalized			(39	)			(18	)
(Loss) income before provision for income taxes (benefit) and loss on equity investment			(335	)			3,093
Income taxes (benefit) expense			(292	)			1,016
(Loss) income before loss on equity investment			(43	)			2,077
Less net loss from equity method investment			—				(72	)
Net (loss) income			(43	)			2,005
Add back net loss attributable to non-controlling interest			94				154
Net income attributable to American Vanguard			51				2,159
Change in fair value of interest rate swaps			—				136
Foreign currency translation adjustment			(248	)			51
Comprehensive (loss) income		$	(197	)		$	2,346
Earnings per common share—basic		$	.00			$	.08
Earnings per common share—assuming dilution		$	.00			$	.07
Weighted average shares outstanding—basic			28,527				28,401
Weighted average shares outstanding—assuming dilution			28,839				28,888

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AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except per share data)

ASSETS

(Unaudited)

 

		Mar. 31, 2015				Dec. 31, 2014
Current assets:
Cash and cash equivalents		$	6,870			$	4,885
Receivables:
Trade, net of allowance for doubtful accounts of $117 and $166, respectively			82,028				86,027
Other			2,784				2,396
Total receivables			84,812				88,423
Inventories			166,981				165,631
Prepaid expenses			14,565				13,415
Income taxes receivable			6,343				5,964
Deferred income tax assets			8,731				8,731
Total current assets			288,302				287,049
Property, plant and equipment, net			49,187				50,026
Intangible assets, net of applicable amortization			98,621				100,211
Other assets			34,606				35,885
		$	470,716			$	473,171
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current installments of other notes payable		$	272			$	71
Current installments of other liabilities			1,360				1,357
Accounts payable			23,981				20,411
Deferred revenue			4,558				898
Accrued program costs			57,996				52,546
Accrued expenses and other payables			5,729				5,962
Total current liabilities			93,896				81,245
Long-term debt and other notes payable, excluding current installments			85,036				99,455
Other liabilities, excluding current installments			3,022				3,309
Deferred income tax liabilities			28,159				28,159
Total liabilities			210,113				212,168
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 31,562,678 shares at March 31, 2015 and 31,550,477 shares at December 31, 2014			3,157				3,156
Additional paid-in capital			66,694				66,232
Accumulated other comprehensive loss			(2,218	)			(1,970	)
Retained earnings			201,967				202,488
			269,600				269,906
Less treasury stock at cost, 2,450,634 shares at March 31, 2015 and December 31, 2014			(8,269	)			(8,269	)
American Vanguard Corporation stockholders’ equity			261,331				261,637
Non-controlling interest			(728	)			(634	)
Total stockholders’ equity			260,603				261,003
		$	470,716			$	473,171

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AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

For The Three Months Ended March 31, 2015 and 2014

(Unaudited)

 

Increase (decrease) in cash		2015				2014
Cash flows from operating activities:
Net (loss) income		$	(43	)		$	2,005
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:
Depreciation and amortization of fixed and intangible assets			3,954				3,733
Amortization of other long term assets			1,430				1,454
Amortization of discounted liabilities			49				69
Stock-based compensation			1,427				768
Tax benefit from exercise of stock options			(1	)			(235	)
Operating loss from equity method investment			—				328
Gain from dilution of equity method investment			—				(256	)
Changes in assets and liabilities associated with operations:
Decrease (increase) in net receivables			3,611				(30,940	)
Increase in inventories			(1,350	)			(18,629	)
Increase in prepaid expenses and other assets			(1,301	)			(3,242	)
(Increase) decrease in income tax receivable/payable, net			(378	)			695
Increase (decrease) increase in accounts payable			3,570				(381	)
Increase (decrease) in deferred revenue			3,660				(2,309	)
Increase in other payables and accrued expenses			5,214				5,050
Net cash provided by (used in) operating activities			19,842				(41,890	)
Cash flows from investing activities:
Capital expenditures			(1,522	)			(1,816	)
Net cash used in investing activities			(1,522	)			(1,816	)
Cash flows from financing activities:
Net (payments) borrowings under line of credit agreement			(14,400	)			47,450
Payments on other long-term liabilities			(351	)			(356	)
Tax benefit from exercise of stock options			1				235
Increase in other notes payable			200				—
Repurchases of common stock			—				(1,531	)
Net (payments) proceeds from the issuance of common stock (sale of stock under ESPP and exercise of stock options)			(965	)			1,018
Payment of cash dividends			(569	)			(1,418	)
Net cash (used in) provided by financing activities			(16,084	)			45,398
Net increase in cash and cash equivalents			2,236				1,692
Cash and cash equivalents at beginning of period			4,885				6,680
Effect of exchange rate changes on cash			(251	)			19
Cash and cash equivalents at end of period		$	6,870			$	8,391

Exhibit 99.2

News Release

 

Contacts:		American Vanguard Corporation				DuPont
		William Kuser				Gregg M. Schmidt
		949-221-6119				302-999-3330 office
		[email protected]				302-598-6286 cell
						[email protected]

AMVAC Acquires Global Bromacil Herbicide Business Assets from DuPont Crop Protection

NEWPORT BEACH, Calif., and WILMINGTON, Del., April 29, 2015 – American Vanguard Corporation and DuPont Crop Protection today announced that AMVAC C.V., the Netherlands-based international subsidiary of American Vanguard, has acquired the DuPont global Bromacil herbicide business assets. Financial terms of the agreement were not disclosed.

The assets divested include the Bromacil Hyvar^® and Krovar^® trademarks, product registrations, product registration data, customer information, access to certain know-how, technical registrations and associated registration data outside of North America.

Bromacil is a broad spectrum residual herbicide used on crops such as pineapples, citrus, agave and asparagus, and is marketed globally under the Hyvar^® and Krovar^® brands. Bromacil herbicides remain important weed control tools and are used in countries such as; Japan, Thailand, Mexico, Cost Rica and Brazil.

Eric Wintemute, chairman & CEO of American Vanguard commented: “This product line acquisition represents an important addition to our existing herbicide portfolio. These proven weed management products will strengthen our competitive position in serving many profitable niche crop markets. Along with other initiatives that we are pursuing, acquiring these Bromacil herbicide assets will significantly enhance our international expansion initiative. We have a history of excellent working relationships with DuPont and are delighted to be carrying this successful product forward.”

“This agreement is another step in the execution of our DuPont Crop Protection business growth strategy,” said Rik Miller, president, DuPont Crop Protection. “The agreement further enhances our focus on innovative new offerings that drive profitable growth both today and over the long term.”

American Vanguard Corporation (NYSE: AVD) 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^® & 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.

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DuPont (NYSE: DD) has been bringing world-class science and engineering to the global marketplace in the form of innovative products, materials, and services since 1802. The company believes that by collaborating with customers, governments, NGOs, and thought leaders we can help find solutions to such global challenges as providing enough healthy food for people everywhere, decreasing dependence on fossil fuels, and protecting life and the environment. For additional information about DuPont and its commitment to inclusive innovation, please visit www.dupont.com.

American Vanguard Forward-Looking Statements: In its public commentary, the Company 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 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 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.

DuPont Forward-Looking Statements: This news release contains forward-looking statements which may be identified by their use of words like “plans,” “expects,” “will,” “believes,” “intends,” “estimates,” “anticipates” or other words of similar meaning. All statements that address expectations or projections about the future, including statements about the company’s growth strategy, product development, regulatory approval, market position, anticipated benefits of acquisitions, timing of anticipated benefits from restructuring actions, outcome of contingencies, such as litigation and environmental matters, expenditures and financial results, are forward-looking statements. Forward-looking statements are not guarantees of future performance and are based on certain assumptions and expectations of future events which may not be realized. Forward-looking statements also involve risks and uncertainties, many of which are beyond the company’s control. Some of the important factors that could cause the company’s actual results to differ materially from those projected in any such forward-looking statements are: fluctuations in energy and raw material prices; failure to develop and market new products and optimally manage product life cycles; significant litigation and environmental matters; failure to appropriately manage process safety and product stewardship issues; changes in laws and regulations or political conditions; global economic and capital markets conditions, such as inflation, interest and currency exchange rates; business or supply disruptions; security threats, such as acts of sabotage, terrorism or war, weather events and natural disasters; ability to protect and enforce the company’s intellectual property rights; successful integration of acquired businesses and separation of underperforming or non-strategic assets or businesses and successful completion of the proposed spinoff of the Performance Chemicals segment including ability to fully realize the expected benefits of the proposed spinoff. The company undertakes no duty to update any forward-looking statements as a result of future developments or new information.

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