Form 8-K AMERICAN VANGUARD CORP For: Feb 26

 

 

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): February 26, 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 2.02 Results of Operations and Financial Condition

On February 26, 2015 American Vanguard Corporation issued a press release announcing its financial results for the fourth quarter and fiscal year ended December 31, 2014. The full text of that press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

The information contained in this Current Report on Form 8-K, including the Exhibits attached hereto, is being furnished under Items 2.02 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 9.01 Financial Statements and Exhibits.

(d) Exhibits

 

Exhibit 99.1		Press release dated February 26, 2015 of American Vanguard Corporation regarding financial results for fourth quarter and fiscal year ended December 31, 2014.

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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: March 2, 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 99.1		Press release of American Vanguard Corporation dated February 26, 2015 regarding financial results for the fourth quarter and fiscal year ended December 31, 2014.

Exhibit 99.1

 

FOR IMMEDIATE RELEASE

AMERICAN VANGUARD REPORTS FOURTH QUARTER & FULL YEAR 2014 RESULTS

Newport Beach, CA – February 26, 2015 – American Vanguard Corporation (NYSE: AVD) today announced financial results for the fourth quarter and full year ended December 31, 2014.

Fiscal 2014 Fourth Quarter Financial Highlights – versus Fiscal 2013 Fourth Quarter:

 

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Net sales were $77.6 million in Q4 2014 compared to $75.5 million in Q4 2013.

 

•

Net income was $1.8 million in Q4 2014 compared to $0.3 million in Q4 2013.

 

•

Earnings per diluted share were $0.06 in Q4 2014 versus $0.01 in Q4 2013.

Fiscal 2014 Financial Highlights – versus Fiscal 2013:

 

•

Net sales were $298.6 million in FY 2014 compared to $381.0 million in FY 2013.

 

•

Net income was $4.8 million in FY 2014 compared to $34.4 million in FY 2013.

 

•

Earnings per diluted share were $0.17 in FY 2014 versus $1.19 in FY 2013.

Eric Wintemute, Chairman and CEO of American Vanguard, stated: “Our performance in 2014 was significantly influenced by reduced procurement of our corn products by the Midwest distribution channel. Persistent rainfall during the spring of 2013 led to substantial unplanted acres, significant amounts of unapplied crop protection inputs and a build-up of unused inventories stockpiled at distributors, retailers and growers. Understandably, these large carryover inventories prompted a sharp reduction in restocking orders during 2014, as excess supplies were worked down. Reduced sales of our corn products were the primary drivers of our 2014 revenue decline, offsetting the stability and modest growth of our sales in other crop segments.”

Mr. Wintemute continued: “The prospects for 2015 planting inputs remain uncertain, as lower corn commodity prices and lower corn grower profitability may lead to cautious purchasing in the Midwest. However, the level of inventory of our corn products in the distribution channel has substantially normalized and as a result, more typical procurement patterns may resume in 2015. While such a recovery could be impacted by near-term commodity prices and crop rotation decisions on the farm, we expect demand for our yield enhancing corn products to continue to grow in the long term.”

Mr. Wintemute concluded: “During recent years of outstanding earnings and revenue growth, American Vanguard expanded its infrastructure. In light of current market conditions, however, management has taken significant steps to streamline manufacturing costs and reduce operating expenses through workforce reductions, compensation adjustments and vendor contract renegotiations. These measures will enable us to attain greater operating efficiency while continuing to make progress on product innovation, equipment systems development and international expansion. Also, we continue to strengthen our balance sheet through tightened working capital control, particularly with regard to inventory.”

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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, February 26, 2015. 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 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
[email protected]		[email protected]
		(212) 836-9611

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AMERICAN VANGUARD CORPORATION

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

Years ended December 31, 2014, 2013 and 2012

(In thousands, except per share data)

 

		2014				2013				2012
Net sales		$	298,634			$	381,021			$	366,190
Cost of sales			184,138				209,674				205,065
Gross profit			114,496				171,347				161,125
Operating expenses			107,786				115,612				101,802
Operating income			6,710				55,735				59,323
Interest expense			3,172				2,176				2,872
Interest income			(19	)			(1	)			(1	)
Interest capitalized			(87	)			(274	)			(400	)
Income before provision for income taxes and loss on equity investment			3,644				53,834				56,852
Income taxes (benefit) expense			(451	)			18,916				20,026
Income before loss on equity investment			4,095				34,918				36,826
Less net loss from equity method investment			(29	)			(986	)			—
Net income			4,066				33,932				36,826
Add back net loss attributable to non-controlling interest			775				517				41
Net income attributable to American Vanguard		$	4,841			$	34,449			$	36,867
Change in fair value of interest rate swaps			340				388				158
Foreign currency translation adjustment			(1,262	)			326				330
Comprehensive income		$	3,919			$	35,163			$	37,355
Earnings per common share—basic		$	.17			$	1.22			$	1.32
Earnings per common share—assuming dilution		$	.17			$	1.19			$	1.28
Weighted average shares outstanding—basic			28,436				28,301				27,914
Weighted average shares outstanding—assuming dilution			28,912				28,899				28,756

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AMERICAN VANGUARD CORPORATION

AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

December 31, 2014 and 2013

(In thousands, except share data)

 

		2014				2013
Assets
Current assets:
Cash and cash equivalents		$	4,885			$	6,680
Receivables:
Trade, net of allowance for doubtful accounts of $166 and $392, respectively			86,027				74,060
Other			2,396				892
			88,423				74,952
Inventories			165,631				139,830
Prepaid expenses			13,415				11,435
Income taxes receivable			5,964				10,088
Deferred income tax assets			8,731				6,521
Total current assets			287,049				249,506
Property, plant and equipment, net			50,026				52,468
Intangible assets, net of applicable amortization			100,211				107,007
Other assets			35,885				38,462
		$	473,171			$	447,443
Liabilities and Stockholders’ Equity
Current liabilities:
Current installments of other notes payable		$	71			$	69
Current installments of other liabilities			1,357				2,132
Accounts payable			20,411				40,702
Deferred revenue			898				3,788
Accrued program costs			52,546				53,630
Accrued expenses and other payables			5,962				10,178
Total current liabilities			81,245				110,499
Long-term debt and other notes payable, excluding current installments			99,455				51,676
Other liabilities, excluding current installments			3,309				4,143
Deferred income tax liabilities			28,159				23,330
Total liabilities			212,168				189,648
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 31,550,477 shares in 2014 and 31,092,782 shares in 2013			3,156				3,109
Additional paid-in capital			66,232				60,160
Accumulated other comprehensive loss			(1,970	)			(1,048	)
Retained earnings			202,488				202,470
			269,906				264,691
Less treasury stock at cost, 2,450,634 shares in 2014 and 2,380,634 shares in 2013			(8,269	)			(6,738	)
American Vanguard Corporation stockholders’ equity			261,637				257,953
Non-controlling interest			(634	)			(158	)
Total stockholders’ equity			261,003				257,795
		$	473,171			$	447,443

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AMERICAN VANGUARD CORPORATION

AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

Years ended December 31, 2014, 2013 and 2012

(In thousands)

 

		2014				2013				2012
Increase cash
Cash flows from operating activities:
Net income		$	4,066			$	33,932			$	36,826
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation and amortization of fixed and intangible assets			16,332				14,845				13,487
Amortization of other long term assets			5,811				4,598				2,925
Amortization of discounted liabilities			324				174				818
Stock-based compensation			4,153				3,819				2,950
Tax benefit from exercise of stock options			(300	)			(440	)			(621	)
Increase (decrease) in deferred income taxes			2,619				2,523				(886	)
Operating loss from equity method investment			983				986				—
Gain from dilution of equity method investment			(954	)			—				—
Changes in assets and liabilities associated with operations:
(Increase) decrease in net receivables			(13,471	)			2,351				(7,505	)
Increase in inventories			(25,801	)			(51,879	)			(16,883	)
Decrease (increase) in income tax receivable/payable, net			4,424				(10,961	)			2,137
Increase in prepaid expenses and other assets			(4,743	)			(19,733	)			(23,725	)
(Decrease) increase in accounts payable			(19,951	)			8,252				9,781
(Decrease) increase in deferred revenue			(2,890	)			(16,639	)			12,856
(Decrease) increase in other payables and accrued expenses			(4,697	)			21,958				8,264
Net cash (used in) provided by operating activities			(34,095	)			(6,214	)			40,424
Cash flows from investing activities:
Capital expenditures			(7,180	)			(15,260	)			(17,628	)
Investment			(500	)			(3,687	)			—
Acquisitions of intangible assets			—				—				(3,473	)
Net cash used in investing activities			(7,680	)			(18,947	)			(21,101	)
Cash flows from financing activities:
Net borrowings under line of credit agreement			47,850				51,550				—
Payments on long-term debt			—				(46,000	)			(8,443	)
Payment on other long-term liabilities			(1,756	)			(1,831	)			(6,035	)
Tax benefit from exercise of stock options			300				440				621
Decrease in other notes payable			—				(6,154	)			(51	)
Repurchases of common stock			(1,531	)			(1,934	)			—
Proceeds from the issuance of common stock (sale of stock under ESPP and exercise of stock options)			1,666				1,610				3,227
Non-controlling interest contribution			299				—				400
Payment of cash dividends			(5,672	)			(4,804	)			(6,148	)
Net cash provided by (used in) financing activities			41,156				(7,123	)			(16,429	)
Net (decrease) increase in cash			(619	)			(32,284	)			2,894
Effect of exchange rate changes on cash			(1,176	)			488				497
Cash and cash equivalents at beginning of year			6,680				38,476				35,085
Cash and cash equivalents at end of year		$	4,885			$	6,680			$	38,476
Supplemental cash flow information:
Cash paid (received) during the year for:
Interest		$	2,298			$	1,777			$	1,891
Income taxes		$	(8,206	)		$	25,271			$	18,048

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