American Vanguard Reports Record Fiscal 2003 Results with Net Income up 46% on 24% Sales Increase; Company Posts 19th Consecutive Period of Comparable Quarter Growth.Business Editors 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.--(BUSINESS WIRE)--March 11, 2004 American Vanguard Vanguard Any of three unmanned U.S. experimental satellites. Vanguard I (1958), the second U.S. satellite placed in orbit around Earth (after Explorer 1), was a tiny 3.25-lb (1.47-kg) sphere with two radio transmitters. Corporation (AMEX AMEX See: American 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 record financial results for the fourth quarter and year ended December 31, 2003. Fourth Quarter Financial Highlights - versus fiscal 2002 fourth quarter -- Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight rose 23% to $38.6 million. -- Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. was up 31% to $7.4 million. -- Net income increased 34% to $4.5 million or $.72 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share. 2003 Financial Highlights - versus 2002 -- Net sales were up 24% to $124.9 million. -- Operating income increased 39% to $16.5 million. -- Net income grew 46% to $10.3 million or $1.65 per diluted share. 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, "2003 was another record year for American Vanguard and a milestone in terms of surpassing $10 million in net income. The key component to our solid financial results for the fourth quarter was our corn soil insecticides insecticides, chemical, biological, or other agents used to destroy insect pests; the term commonly refers to chemical agents only. Chemical Insecticides , which we sell in our state-of-the-art SmartBox(R) delivery system. We are more optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op than ever about this area of our business, and in this regard, in January we entered into an agreement with Syngenta to supply their corn soil 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. , Force(R) 3G, for use in our SmartBox system beginning in the 2004 season." Mr. Wintemute continued, "Additionally, in late 2003, we acquired certain assets related to an 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. from a business unit of Novartis. The product, used primarily for animal health, is an excellent fit with our existing portfolio. More recently, we obtained U.S. end use registrations for the pyrethroid py·re·throid n. Any of several synthetic compounds similar to pyrethrin, used as an insecticide. insecticide Bifenthrin and commenced sales in the first quarter." James Barry James Barry may refer to:
The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. , which caused our operating expenses to increase as a percentage of sales. Nonetheless, our operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: was 19.1%, up from 17.9% in the fourth quarter of last year. For the year as a whole, gross margin was 47.2%, up from 43.6% in 2002, and operating margin was 13.2%, up from 11.8% last year." Mr. Wintemute concluded, "Looking back over the past five years, sales and net income have grown at an average of annual rate of 14% and 37%, respectively. We are optimistic that this long-term growth trend will continue, based on the strength of our ever-expanding product line, our track record of successful acquisitions and distinct characteristics in manufacturing, registration and marketing. Regarding 2004, we feel confident that we will achieve double-digit sales and net income growth, but we are not comfortable making more specific financial projections since we are subject to unpredictable factors including pest pressure and weather conditions. In addition to internal growth, we continue to seek additional product acquisitions and licensing opportunities and look forward to updating you on our progress." Conference Call Eric G Eric G was a Miami Bass/Hip-Hop rapper, DJ, and producer, acting as the primary creative force behind Triple M DJ Crew, the Bass Station parties and night club, the rap group Worse 'em Crew, the Bass Station record label, and Never Stop Productions . Wintemute, President & CEO, and James A. Barry, Senior Vice President & CFO, will conduct a conference call focusing on the financial results at 11:30 a.m. ET on Thursday, March 11, 2004. Interested parties may participate in the call by dialing 973-317-5319 approximately 10 minutes before the call is scheduled to begin. The conference call will also be broadcast live over the Internet via the Investors section of the Company's web site at www.american-vanguard.com. To listen to the live call please go to the website at least 15 minutes early to register, download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. 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 diversified (di·verˑ·s specialty and agricultural products company that develops and markets products for crop protection and management, turf turf: see lawn. turf In horticulture, the surface layer of soil with its matted, dense vegetation, usually grasses grown for ornamental or recreational use. 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 2003, American Vanguard was recognized as one of BusinessWeek's Hot Growth Companies (#94), Fortune Small Business' America's 100 Fastest Growing Small Companies (#35) and Forbes' Hot Shots: 200 Up and Coming Companies (#23). 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)
Quarter Ended Year Ended
December 31, December 31, December 31, December 31,
2003 2002 2003 2002
------------ ----------- ------------- -------------
Net sales $ 38,629,000 $ 31,414,000 $ 124,863,000 $ 100,671,000
Cost of sales 17,933,000 16,560,000 65,989,000 56,796,000
------------ ------------ ------------- -------------
Gross profit 20,696,000 14,854,000 58,874,000 43,875,000
Operating
expenses 13,319,000 9,236,000 42,332,000 31,996,000
------------ ------------ ------------- -------------
Operating
Income 7,377,000 5,618,000 16,542,000 11,879,000
Interest expense 196,000 250,000 986,000 973,000
Interest
income(1) (1,000) (6,000) (303,000) (25,000)
Interest
capitalized (14,000) 0 (323,000) (347,000)
------------ ------------ ------------- -------------
Income before
income taxes 7,196,000 5,374,000 16,182,000 11,278,000
Income taxes(1) 2,698,000 2,015,000 5,919,000 4,229,000
------------ ------------ ------------- -------------
Net income $ 4,498,000 $ 3,359,000 $ 10,263,000 $ 7,049,000
============ ============ ============= =============
Earnings per
comon share(2) $ 0.76 $ 0.58 $ 1.75 $ 1.22
============ ============ ============= =============
Earnings per
common share -
assuming
dilution(2) $ 0.72 $ 0.55 $ 1.65 $ 1.16
============ ============ ============= =============
Weighted average
shares
outstanding(2) 5,959,577 5,817,201 5,874,202 5,780,201
============ ============ ============= =============
Weighted average
shares
outstanding -
assuming
dilution(2) 6,288,726 6,093,962 6,209,502 6,061,190
============ ============ ============= =============
(1) Interest income for the year ended December 31, 2003, primarily
relates to amended tax returns, which generated a refund from the
State of California. The refund also lowered the effective tax
rate.
(2) Retroactively restated to reflect a 3-for-2 stock split
distributed on April 11, 2003 to common stockholders of record as
of March 28, 2003.
2003 Summary Results of Operations
(Unaudited)
Three months Three months Three months Three months
ended ended ended ended Fiscal
March 31 June 30 Sept. 30 Dec. 31 2003
-------------------------------------------------------------
Net sales $27,342,000 $25,944,000 $32,948,000 $38,629,000 $124,863,000
Gross
profit 11,368,000 11,953,000 14,857,000 20,696,000 58,874,000
Operating
income 2,077,000 2,379,000 4,709,000 7,377,000 16,542,000
Net income $1,225,000 $1,725,000 2,815,000 $4,498,000 $10,263,000
EPS-basic $.21 $.30 $.48 $.76 $1.75
EPS-diluted $.20 $.28 $.45 $.72 $1.65
Weighted
average
shares
outstand-
ing 5,826,000 5,827,000 5,883,000 5,960,000 5,874,000
Weighted
average
shares
outstanding
assuming
dilution 6,090,000 6,164,000 6,232,000 6,289,000 6,210,000
2002 Summary Results of Operations
(Quarterly Data - Unaudited)
Three months Three months Three months Three months
ended ended ended ended Fiscal
March 31 June 30 Sept. 30 Dec. 31 2002
(Audited)
------------------------------------------------------------
Net sales $19,018,000 $20,397,000 $29,841,000 $31,414,000 $100,671,000
Gross
profit 7,706,000 9,355,000 11,960,000 14,854,000 43,875,000
Operating
income 1,476,000 1,822,000 2,963,000 5,618,000 11,879,000
Net income $799,000 $1,125,000 $1,765,000 $3,359,000 $7,049,000
EPS-basic $.14 $.20 $.31 $.58 $1.22
EPS-diluted $.13 $.19 $.30 $.55 $1.16
Weighted
average
shares
outstand-
ing 5,729,000 5,744,000 5,815,000 5,817,000 5,780,000
Weighted
average
shares
outstanding
assuming
dilution 5,995,000 6,060,000 6,073,000 6,094,000 6,061,000
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