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)

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 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 Corporation’s licensing of the Scepter-based product line from BASF Corporation.

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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: November 4, 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 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 Corporation’s 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

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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 as well as the S&P Small Cap 600 Index. To learn more about American Vanguard, please reference the Company’s 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 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

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
		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
Gross profit			31,433				28,293				81,204				83,258
Operating expenses			26,059				27,367				74,325				77,903
Operating income			5,374				926				6,879				5,355
Interest expense			700				804				2,090				2,292
Less interest capitalized			(62	)			(25	)			(149	)			(56	)
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
Income before (loss) gain on equity investment			3,093				147				3,980				2,263
Net (loss) gain from equity investment			(389	)			461				(580	)			321
Net income			2,704				608				3,400				2,584
Add back net loss attributable to non-controlling interest			68				124				204				452
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	)
Comprehensive income		$	1,875			$	386			$	2,136			$	3,114
Earnings per common share—basic		$	0.10			$	0.03			$	0.13			$	0.11
Earnings per common share—assuming dilution		$	0.09			$	0.03			$	0.12			$	0.11
Weighted average shares outstanding—basic			28,753				28,466				28,653				28,422
Weighted average shares outstanding—assuming 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
ASSETS
Current assets:
Cash and cash equivalents		$	5,429			$	4,885
Receivables:
Trade, net of allowance for doubtful accounts of $287 and $166, respectively			89,723				86,027
Other			4,872				2,396
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
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
		$	493,913			$	472,321
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
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
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
Total liabilities			228,470				211,318
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 31,623,810 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
			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	)
American Vanguard Corporation stockholders’ equity			265,442				261,637
Non-controlling interest			1				(634	)
Total stockholders’ equity			265,443				261,003
		$	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:
Net income		$	3,400			$	2,584
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
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
Net cash provided by (used in) operating activities			51,807				(33,836	)
Cash flows from investing activities:
Capital expenditures			(5,196	)			(5,947	)
Investments			(125	)			—
Acquisitions of product lines and other intangible assets			(36,435	)			—
Net cash used in investing activities			(41,756	)			(5,947	)
Cash flows from financing activities:
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
Net cash (used in) provided by financing activities			(8,251	)			38,476
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	)
Cash and cash equivalents at end of period		$	5,429			$	5,045

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.”

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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 Company’s 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 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.

 

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
[email protected]		[email protected]

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