Form 8-K AMERICAN VANGUARD CORP For: Nov 02
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): November 2, 2015
AMERICAN VANGUARD CORPORATION
(Exact name of registrant as specified in its charter)
Delaware | 001-13795 | 95-2588080 | ||
(State or other jurisdiction | Commission | (I.R.S. Employer | ||
of incorporation) | File Number | Identification No.) |
4695 MacArthur Court
Newport Beach, California 92660
(Address of principal executive offices)
Registrants 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)) |
Item 2.02. | Results of Operations and Financial Condition |
On November 2, 2015 American Vanguard Corporation issued a press release announcing its financial performance for the three and nine month periods ended September 30, 2015. 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, 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 8.01 | Other Events |
On November 2, 2015, American Vanguard Corporation issued a press release announcing that its wholly-owned subsidiary, AMVAC Chemical Corporation, had licensed the Scepter®-based herbicide product line from BASF Corporation for use in the United States and its territories. The full test 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 99.1 | Press release dated November 2, 2015 of American Vanguard Corporation announcing its financial performance for the three and nine month periods ended September 30, 2015. | |
Exhibit 99.2 | Press release dated November 2, 2015 of American Vanguard Corporation announcing AMVAC Chemical Corporations licensing of the Scepter-based product line from BASF Corporation. |
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: November 4, 2015
|
By: |
/s/ Timothy J. Donnelly | ||
Timothy J. Donnelly | ||||
Chief Administrative Officer, General Counsel & Secretary |
INDEX TO EXHIBITS
Exhibit No. |
Description | |
Exhibit 99.1 | Press release dated November 2, 2015 of American Vanguard Corporation announcing financial performance for the three and nine month periods ended September 30, 2015. | |
Exhibit 99.2 | Press release dated November 2, 2015 of American Vanguard Corporation announcing AMVAC Chemical Corporations licensing of the Scepter-based product line from BASF Corporation. |
Exhibit 99.1
FOR IMMEDIATE RELEASE
AMERICAN VANGUARD REPORTS THIRD QUARTER & NINE-MONTH 2015 RESULTS
Improvement in Profitability Despite Challenging Industry Conditions
Newport Beach, CA November 2, 2015 American Vanguard Corporation (NYSE: AVD), today announced financial results for the third quarter and nine-month period ended September 30, 2015.
Fiscal 2015 Third Quarter Financial Highlights versus Fiscal 2014 Third Quarter Results
| Net sales increased from $71.6 million to $72.5 million |
| Net income increased from $0.7 million to $2.8 million |
| Earnings per diluted share improved from $0.03 to $0.09 |
Fiscal 2015 Nine Month Financial Highlights versus Fiscal 2014 Nine Month
| Net sales declined from $221.0 million to $205.6 million |
| Net income increased from $3.0 million to $3.6 million |
| Earnings per diluted share improved from $0.11 to $0.12 |
Note: Further details are available in the financial schedules attached to this press release
Eric Wintemute, Chairman and CEO of American Vanguard, stated: Our third quarter and nine month financial results reflect the financial benefits that have been achieved largely through management initiatives to improve profitability. While softened demand in the Ag sector continues to affect our entire industry, we have met these challenges by focusing our efforts on maintaining existing market share, growing our international business with new product acquisitions, reducing manufacturing costs and controlling operating expenses. As a result, we have succeeded in posting improved year-over-year earnings on a relatively flat revenue base.
Mr. Wintemute concluded: For the remainder of 2015, our top line performance will be driven largely by stable demand for our soil fumigants, market conditions in the Midwest Corn Belt, and continued integration of our 2015 international product line acquisitions. As we reduce our own inventory levels and perform annual plant maintenance, we do expect more limited manufacturing utilization during the fourth quarter. Looking forward to 2016, we should be well positioned for higher revenue and improved profitability through operational efficiency, market access and technology innovation.
Conference Call
Eric Wintemute, Chairman & CEO and David Johnson, VP & CFO, will conduct a conference call focusing on the financial results at 4:30 pm ET / 1:30 pm PT on Monday, November 2, 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
Companys 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 Companys 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 as well as the S&P Small Cap 600 Index. To learn more about American Vanguard, please reference the Companys web site at www.amvac-chemical.com.
The Company, from time to time, may discuss forward-looking information. Except for the historical information contained in the conference call referenced in this release, all forward-looking statements are estimates by the Companys management and are subject to various risks and uncertainties that may cause results to differ from managements current expectations. Such factors include weather conditions, changes in regulatory policy and other risks as detailed from time-to-time in the Companys SEC reports and filings. All forward-looking statements, if any, in this release represent the Companys 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 |
AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(In thousands, except per share data)
(Unaudited)
For the three months ended September 30 |
For the nine months ended September 30 |
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2015 | 2014 | 2015 | 2014 | |||||||||||||
Net sales |
$ | 72,486 | $ | 71,635 | $ | 205,574 | $ | 221,043 | ||||||||
Cost of sales |
41,053 | 43,342 | 124,370 | 137,785 | ||||||||||||
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Gross profit |
31,433 | 28,293 | 81,204 | 83,258 | ||||||||||||
Operating expenses |
26,059 | 27,367 | 74,325 | 77,903 | ||||||||||||
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Operating income |
5,374 | 926 | 6,879 | 5,355 | ||||||||||||
Interest expense |
700 | 804 | 2,090 | 2,292 | ||||||||||||
Less interest capitalized |
(62 | ) | (25 | ) | (149 | ) | (56 | ) | ||||||||
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Income before provision for income taxes and (loss) gain on equity investment |
4,736 | 147 | 4,938 | 3,119 | ||||||||||||
Income tax expense |
1,643 | | 958 | 856 | ||||||||||||
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Income before (loss) gain on equity investment |
3,093 | 147 | 3,980 | 2,263 | ||||||||||||
Net (loss) gain from equity investment |
(389 | ) | 461 | (580 | ) | 321 | ||||||||||
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Net income |
2,704 | 608 | 3,400 | 2,584 | ||||||||||||
Add back net loss attributable to non-controlling interest |
68 | 124 | 204 | 452 | ||||||||||||
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Net income attributable to American Vanguard |
2,772 | 732 | 3,604 | 3,036 | ||||||||||||
Change in fair value of interest rate swaps |
| 145 | | 426 | ||||||||||||
Foreign currency translation adjustment |
(897 | ) | (491 | ) | (1,468 | ) | (348 | ) | ||||||||
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Comprehensive income |
$ | 1,875 | $ | 386 | $ | 2,136 | $ | 3,114 | ||||||||
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Earnings per common sharebasic |
$ | 0.10 | $ | 0.03 | $ | 0.13 | $ | 0.11 | ||||||||
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Earnings per common shareassuming dilution |
$ | 0.09 | $ | 0.03 | $ | 0.12 | $ | 0.11 | ||||||||
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Weighted average shares outstandingbasic |
28,753 | 28,466 | 28,653 | 28,422 | ||||||||||||
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Weighted average shares outstandingassuming dilution |
29,289 | 28,797 | 29,208 | 28,888 | ||||||||||||
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AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
Sept. 30, 2015 |
Dec. 31, 2014 |
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ASSETS | ||||||||
Current assets: |
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Cash and cash equivalents |
$ | 5,429 | $ | 4,885 | ||||
Receivables: |
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Trade, net of allowance for doubtful accounts of $287 and $166, respectively |
89,723 | 86,027 | ||||||
Other |
4,872 | 2,396 | ||||||
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Total receivables |
94,595 | 88,423 | ||||||
Inventories |
161,496 | 165,631 | ||||||
Prepaid expenses |
12,135 | 13,415 | ||||||
Income taxes receivable |
1,233 | 5,964 | ||||||
Deferred income tax assets |
8,731 | 8,731 | ||||||
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Total current assets |
283,619 | 287,049 | ||||||
Property, plant and equipment, net |
48,460 | 50,026 | ||||||
Intangible assets, net of applicable amortization |
131,006 | 100,211 | ||||||
Other assets |
30,828 | 35,035 | ||||||
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$ | 493,913 | $ | 472,321 | |||||
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LIABILITIES AND STOCKHOLDERS EQUITY | ||||||||
Current liabilities: |
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Current installments of long-term debt and other notes payable |
$ | 10,073 | $ | 71 | ||||
Current installments of other liabilities |
1,050 | 1,357 | ||||||
Accounts payable |
23,421 | 20,411 | ||||||
Deferred revenue |
38 | 898 | ||||||
Accrued program costs |
73,528 | 52,546 | ||||||
Accrued expenses and other payables |
6,540 | 5,962 | ||||||
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Total current liabilities |
114,650 | 81,245 | ||||||
Long-term debt and other notes payable, excluding current installments |
82,658 | 98,605 | ||||||
Other liabilities, excluding current installments |
3,003 | 3,309 | ||||||
Deferred income tax liabilities |
28,159 | 28,159 | ||||||
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Total liabilities |
228,470 | 211,318 | ||||||
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Commitments and contingent liabilities |
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Stockholders equity: |
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Preferred stock, $.10 par value per share; authorized 400,000 shares; none issued |
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Common stock, $.10 par value per share; authorized 40,000,000 shares; issued 31,623,810 shares at September 30, 2015 and 31,550,477 shares at December 31, 2014 |
3,163 | 3,156 | ||||||
Additional paid-in capital |
68,466 | 66,232 | ||||||
Accumulated other comprehensive loss |
(3,438 | ) | (1,970 | ) | ||||
Retained earnings |
205,520 | 202,488 | ||||||
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273,711 | 269,906 | |||||||
Less treasury stock, at cost, 2,450,634 shares at September 30, 2015 and December 31, 2014 |
(8,269 | ) | (8,269 | ) | ||||
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American Vanguard Corporation stockholders equity |
265,442 | 261,637 | ||||||
Non-controlling interest |
1 | (634 | ) | |||||
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Total stockholders equity |
265,443 | 261,003 | ||||||
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$ | 493,913 | $ | 472,321 | |||||
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AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
For The Nine Months Ended September 30, 2015 and 2014
(Unaudited)
Increase (decrease) in cash |
2015 | 2014 | ||||||
Cash flows from operating activities: |
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Net income |
$ | 3,400 | $ | 2,584 | ||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: |
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Depreciation and amortization of fixed and intangible assets |
12,190 | 11,996 | ||||||
Amortization of other long term assets |
3,992 | 4,332 | ||||||
Amortization of discounted liabilities |
118 | 249 | ||||||
Stock-based compensation |
2,943 | 3,046 | ||||||
Tax benefit from exercise of stock options |
(8 | ) | (263 | ) | ||||
Operating loss from equity method investment |
580 | 633 | ||||||
Gain from dilution of equity method investment |
| (954 | ) | |||||
Changes in assets and liabilities associated with operations: |
||||||||
Increase in net receivables |
(6,172 | ) | (16,995 | ) | ||||
Decrease (increase) in inventories |
4,135 | (31,690 | ) | |||||
Decrease (increase) in prepaid expenses and other assets |
1,143 | (5,237 | ) | |||||
Decrease in income tax receivable/payable, net |
4,739 | 7,937 | ||||||
Decrease in deferred tax |
| (328 | ) | |||||
Increase (decrease) in accounts payable |
3,010 | (22,341 | ) | |||||
Decrease in deferred revenue |
(860 | ) | (2,769 | ) | ||||
Increase in other payables and accrued expenses |
22,597 | 15,964 | ||||||
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Net cash provided by (used in) operating activities |
51,807 | (33,836 | ) | |||||
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Cash flows from investing activities: |
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Capital expenditures |
(5,196 | ) | (5,947 | ) | ||||
Investments |
(125 | ) | | |||||
Acquisitions of product lines and other intangible assets |
(36,435 | ) | | |||||
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Net cash used in investing activities |
(41,756 | ) | (5,947 | ) | ||||
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Cash flows from financing activities: |
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Net (payments) borrowings under line of credit agreement |
(16,120 | ) | 43,450 | |||||
Increase in other notes payable |
10,000 | | ||||||
Payments on other long-term liabilities |
(1,252 | ) | (1,371 | ) | ||||
Tax benefit from exercise of stock options |
8 | 263 | ||||||
Repurchases of common stock |
| (1,531 | ) | |||||
Non-controlling interest contribution |
| 300 | ||||||
Payment of cash dividends |
(1,141 | ) | (4,251 | ) | ||||
Net proceeds from the issuance of common stock (sale of stock under ESPP and exercise of stock options) |
254 | 1,616 | ||||||
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Net cash (used in) provided by financing activities |
(8,251 | ) | 38,476 | |||||
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Net increase (decrease) in cash and cash equivalents |
1,800 | (1,307 | ) | |||||
Cash and cash equivalents at beginning of period |
4,885 | 6,680 | ||||||
Effect of exchange rate changes on cash and cash equivalents |
(1,256 | ) | (328 | ) | ||||
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Cash and cash equivalents at end of period |
$ | 5,429 | $ | 5,045 | ||||
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Exhibit 99.2
FOR IMMEDIATE RELEASE
American Vanguard Announces Licensing of Scepter-based Herbicides for Weed
Control in Soybean and Turf Applications
Newport Beach, California November 2, 2015 American Vanguard Corporation (NYSE: AVD), today announced that its wholly-owned subsidiary, Amvac Chemical Corporation, has licensed Scepter-based herbicide products from BASF Corporation for use in the United States and its territories. Scepter, is a broad-spectrum herbicide that can be used for both pre-emergence and post-emergence control of broadleaf weeds in soybeans. Other Scepter-based formulations can be used as selective post-emergence herbicides that provide superior control of many hard-to-control weeds in turf applications.
The licensing agreement includes transfer of EPA end-use registrations & labels, purchase of technical product inventory, license to the Scepter trademark and formulation know-how. Other terms of the transaction were not released.
Eric Wintemute, Chairman and CEO of American Vanguard, stated: We are very pleased to add the Scepter-based product line to our existing portfolio. Scepter will broaden our row crop capabilities by allowing us to participate in the soybean market, which has been a strategic objective of ours in recent years. Other Scepter-based products will enhance our offerings for turf applications in the non-crop segment of our business. We see significant additional opportunities on the horizon to acquire, license or co-market similar proven, branded products and American Vanguard is positioned to capitalize on that potential.
Bob Trogele, Chief Operating Officer of Amvac Chemical commented: It is clear that with our recent focused product additions from DuPont, Adama and now BASF, Amvac is extending its market access in strategic crop segments and global geographic regions. We are confident that Amvac can increase the market penetration of these products by creating new added value formulations and by providing a broader herbicide offering that expands our current customer base. We continue to seek products, technologies and business alliances that can strengthen our Yield Enhancing Solutions umbrella brand for crop protection and complement our initiatives in precision planting equipment application systems.
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 the control of public and animal health pests. 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 Companys web site at www.american-vanguard.com.
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 Companys management subject to various risks and uncertainties that may cause results to differ from managements current expectations. Such factors include weather conditions, changes in regulatory policy and other risks as detailed in the Companys SEC reports and filings. All forward-looking statements, if any, in this release represent the Companys judgment as of the date of this release.
Contact: |
||
American Vanguard Corporation |
The Equity Group Inc. | |
William A. Kuser |
Lena Cati | |
Director of Investor Relations |
www.theequitygroup.com | |
(949) 260-1200 |
(212) 836-9611 | |
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