American Vanguard Posts 27th Consecutive Quarter of Comparable Period Growth with Fourth Quarter Sales up 35% and Net Income up 33%.NEWPORT BEACH Newport Beach, residential and resort city (1990 pop. 66,643), Orange co., S Calif., on Newport Bay and the Pacific Ocean; inc. 1906. It is a popular seaside resort and yachting center. Manufactures include electrical and medical equipment, computers, boats, and adhesives. , Calif. -- American Vanguard Corporation (NYSE NYSE See: New York Stock Exchange :AVD AvD Automobilclub von Deutschland (German automobile club) AVD Academy of Veterinary Dentistry AVD Audio Video Design (Melbourne, FL) AVD Audio Video Data AVD Association des Volontaires pour le Développement ) today announced financial results for the fourth quarter and year ended December 31, 2005. Fourth Quarter Highlights - versus fiscal 2004 fourth quarter --Net sales increased 35% to $61.5 million. --Operating income rose 33% to $13.2 million. --Net income grew 33% to $7.9 million. 2005 Highlights - versus 2004 --Net sales rose 26% to $189.8 million. --Operating income was up 29% to $32.3 million. --Net income grew 31% to $19.0 million. Eric Wintemute, President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of American Vanguard, stated, "2005 was a very successful year for American Vanguard on many accounts. We achieved strong growth in sales and earnings, added four products to our portfolio - two through acquisition and two through license - and set the stage for additional transactions, one of which closed in January." Mr. Wintemute continued, "During the fourth quarter, we began selling Thimet(R) (phorate phorate an organophosphorus compound used as an insecticide and capable of causing poisoning. ), the insecticide insecticide Any of a large group of substances used to kill insects. Such substances are mainly used to control pests that infest cultivated plants and crops or to eliminate disease-carrying insects in specific areas. product line we acquired from BASF BASF Bar Association of San Francisco (since 1872; San Francisco, California) BASF Badische Anilin und Soda Fabrik (German chemical products company) BASF Builders Association of South Florida in November. With sales of approximately EUR EUR In currencies, this is the abbreviation for the Euro. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 14 million in 2004, Thimet represents our largest acquisition to date. This product exceeded our sales expectations in the fourth quarter, and should be an important contributor to our 2006 results. Additionally, we have begun exploring further market opportunities for Thimet. The second acquisition we completed in 2005 was the Avenge a·venge tr.v. a·venged, a·veng·ing, a·veng·es 1. To inflict a punishment or penalty in return for; revenge: avenge a murder. 2. (R) cereal herbicide herbicide (hr`bəsīd'), chemical compound that kills plants or inhibits their normal growth. A herbicide in a particular formulation and application can be described as selective or nonselective. product line, which we also acquired from BASF. Avenge generated sales of approximately EUR 1.2 million in 2004, and is complementary to our herbicide portfolio. "With regard to our licensing agreements, during 2005 we licensed Impact(TM), a new corn herbicide, from BASF. We initiated sales of Impact in the first quarter of 2006, representing our first launch of a newly registered active ingredient An active ingredient, also active pharmaceutical ingredient (or API), is the substance in a drug that is pharmaceutically active. Some medications may contain more than one active ingredient. . 2006 will be a ramp-up year for Impact, but we are very optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op about its prospects, and expect it to become a significant sales driver in future years. We also entered into a licensing agreement with Washington State University Washington State University, at Pullman; land-grant and state supported; chartered 1890, opened 1892 as an agriculture college. From 1905 to 1959 it was the State College of Washington. Research Foundation that will enable American Vanguard to develop, register and commercialize a highly effective potato sprout inhibitor for post-harvest use in the US and Canada. We are hopeful to launch products under this agreement in late 2008." Recent Developments Mr. Wintemute continued, "In January, we entered into a licensing agreement with Dow AgroSciences Dow AgroSciences LLC is a wholly owned subsidiary of the Dow Chemical Company specializing in not only agricultural chemicals such as pesticides, but also seeds and biotechnology solutions. The company is based in Indianapolis, Indiana, in the United States. to market, sell and distribute Lorsban 15G insecticide through our SmartBox delivery system in the US. This represents the fifth product we are marketing through SmartBox, but the first we have licensed for use outside of corn and soybeans. This license is an important opportunity to further position SmartBox as the delivery system of choice for granular granular /gran·u·lar/ (gran´u-lar) made up of or marked by presence of granules or grains. gran·u·lar adj. 1. Composed or appearing to be composed of granules or grains. 2. insecticides insecticides, chemical, biological, or other agents used to destroy insect pests; the term commonly refers to chemical agents only. Chemical Insecticides . "Also in January, we established our Swiss subsidiary and accordingly opened an office in Basel, Switzerland. Vince Pascarelli, a 30-year industry veteran, joined our team to head the new operations, which enhance our international presence and improve our ability to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. growth opportunities in European and other international markets. "Today, the Company's shares will begin trading on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. . We were drawn to the NYSE because of the new hybrid platform currently being implemented. This platform will permit both electronic and specialist-assisted trading, which should appeal to a wide range of investors and dampen intraday Intraday Another way of saying "within the day." Notes: This term is often used for the new highs and lows of a security. For example, "a new intraday high" means a security reached a new all-time high throughout the trading day, but then fell by closing. price volatility. The NYSE listing is also reflective of the Company's growth and achievements, and should increase American Vanguard's exposure and trading liquidity," added Mr. Wintemute. Outlook Mr. Wintemute concluded, "Regarding our outlook, we are once again optimistic that the Company's diverse and growing portfolio of niche products, talented employees and effective operating structure will produce double-digit growth in sales and net income in 2006. As we have stated previously, we are not comfortable providing more specific financial guidance since our results are subject to unpredictable factors including pest pressure and weather conditions. "The environment for license and acquisition opportunities certainly remains attractive. Our recent $23.4 million private equity placement enabled us to reduce the debt incurred for our November acquisition of Thimet, and established greater financial flexibility for us to actively pursue more additions to our product portfolio. We look forward to reporting on American Vanguard's continued development." FAS 123R American Vanguard will begin expensing stock options in the first quarter of 2006, in accordance with Financial Accounting Standard (FAS) 123R. The expense is expected to total approximately $500,000 for fiscal year 2006. Conference Call Eric Wintemute, President and CEO, and James Barry James Barry may refer to:
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. The Company's basic strategy is to acquire brand name, niche product lines from larger companies that divest To deprive or take away. Divest is usually used in reference to the relinquishment of authority, power, property, or title. If, for example, an individual is disinherited, he or she is divested of the right to inherit money. mature products to focus on newly discovered molecules. During 2005, American Vanguard was recognized as one of BusinessWeek's Hot Growth Companies (#72), FORTUNE Small Business' America's 100 Fastest Growing Small Companies (#40) and Forbes' 200 Best Small Companies (#59). 2005 marks the third consecutive year American Vanguard has been included on these three lists - the only company to hold this honor. American Vanguard is included on the Russell 2000(R) and Russell(R) 3000 Indexes. To learn more about American Vanguard, please reference the Company's web site at www.american-vanguard.com. The Company, from time to time, may discuss forward-looking information. Except for the historical information contained in this release, all forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. 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.
American Vanguard Corporation and Subsidiaries
Consolidated Statements of Income
(Unaudited)
For the Three Months For the Year
ended December 31 ended December 31
--------------------------- ---------------------------
2005 2004 2005 2004
---- ---- ---- ----
Net sales $61,487,000 $45,520,000 $189,796,000 $150,855,000
Cost of sales 31,307,000 20,645,000 104,117,000 78,597,000
------------- ------------- ------------- -------------
Gross profit 30,180,000 24,875,000 85,679,000 72,258,000
Operating
expenses 16,979,000 14,966,000 53,412,000 47,300,000
------------- ------------- ------------- -------------
Operating
income 13,201,000 9,909,000 32,267,000 24,958,000
Interest
expense 562,000 297,000 1,720,000 1,310,000
Interest income (17,000) (8,000) (29,000) (13,000)
Interest
capitalized (111,000) (22,000) (363,000) (72,000)
------------- ------------- ------------- -------------
Income before
income tax 12,767,000 9,642,000 30,939,000 23,733,000
Income tax
expense 4,916,000 3,761,000 11,937,000 9,256,000
------------- ------------- ------------- -------------
Net income $7,851,000 $5,881,000 $19,002,000 $14,477,000
============= ============= ============= =============
Earnings per
common share
(1) $0.43 $0.33 $1.04 $0.81
============= ============= ============= =============
Earnings per
common share -
assuming
dilution (1) $0.40 $0.31 $0.98 $0.76
============= ============= ============= =============
Weighted
average shares
outstanding
(1) 18,287,031 18,021,846 18,258,134 17,963,396
============= ============= ============= =============
Weighted
average shares
outstanding -
assuming
dilution (1) 19,392,490 19,230,690 19,319,055 19,167,450
============= ============= ============= =============
(1) 2004 periods have been restated to reflect the effect of a 2-for-1
stock split distributed on April 15, 2005.
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