American Vanguard Reports Second Quarter Results with Net Income up 21% on 14% Sales Increase.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 second quarter and six months ended June 30, 2006. For the second 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 increased 14% to $42.7 million as compared to the second quarter of 2005. 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. rose 31% to $6.2 million, despite higher freight, delivery and warehousing costs, which increased to $3.3 million from $2.3 million in the second quarter of 2005. The Company incurred greater interest expense due to increased debt levels coupled with higher interest rates. Net income grew 21% to $3.3 million and earnings per diluted share increased to $0.12 from $0.11 in the second quarter of 2005. For the first six months of 2006, net sales rose 11% to $87.5 million as compared to the first half of 2005. Operating income increased 7% to $10.9 million. Net income was $5.8 million compared to $5.9 million in the 2005 period, and earnings per diluted share were $0.21 versus $0.23 in the first half of 2005. Earnings were impacted by the aforementioned freight, delivery and warehousing costs and interest expense. For the six-month period, interest expense also included debt incurred to complete the November 2005 acquisition of the Thimet(R) (phorate phorate an organophosphorus compound used as an insecticide and capable of causing poisoning. ) 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. business 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 , the largest acquisition in American Vanguard's history; this debt was repaid in February 2006. 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, "We are pleased with the results for the quarter, during which we realized sales from some of our newer additions to our product line, including Thimet, which we acquired from BASF in the fourth quarter of 2005, 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), which we acquired from BASF in December 2005, Impact(TM), which we launched in the first quarter of this year, Bayleton(R), which we licensed from Bayer in April of this year, as well as an insecticide that we toll manufacture. We also achieved steady growth throughout much of our existing product line." Mr. Wintemute continued, "We are focused on achieving our goal of double-digit growth in sales and earnings for fiscal year 2006. There are four key variables that can influence this objective; two that may challenge our goal, and two that may enhance our results. 1) The acceptance of genetically modified genetically modified Adjective (of an organism) having DNA which has been altered for the purpose of improvement or correction of defects genetically modified genetic adj [food etc] → corn appears to be growing, and this will have a bearing on our traditional corn soil insecticide market. In order to counter this effect, we are positioning our SmartBox(R) insecticides insecticides, chemical, biological, or other agents used to destroy insect pests; the term commonly refers to chemical agents only. Chemical Insecticides as the products of choice for treating the 'refuge acres' (that portion of a corn field that is not allowed to be planted with a genetic variety). 2) Bidrin(R), our cotton insecticide, performed ahead of last year's pace in the early to mid-season, but in the late season, which occurs in the third quarter, insect pressure is running behind historic levels. "On the upside Upside The potential dollar amount by which the market or a stock could rise. Notes: This is basically an educated guess on how high a stock could go in the near future. See also: Bull, Downside : 1) Use of Dibrom(R), our crop protection insecticide and mosquito mosquito (məskē`tō), small, long-legged insect of the order Diptera, the true flies. The females of most species have piercing and sucking mouth parts and apparently they must feed at least once upon mammalian blood before their eggs can adulticide, is currently tracking ahead of last year's level, and if forecasts of rainfall in key areas come to fruition, Dibrom should achieve record volumes. 2) Impact(TM), our new corn 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. launched earlier this year, is exceeding our expectations in terms of its performance in the field. It is premature to ascertain what that performance will translate into for the upcoming selling season (Q4'06 and Q1'07), but our early estimates indicate that Impact could become one of our top five products in fiscal 2007." Mr. Wintemute concluded, "We are actively working on additional product acquisitions and licenses and look forward to providing additional information as it is appropriate." 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. 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 six months
ended June 30 ended June 30
------------------------- -------------------------
2006 2005 2006 2005
------------ ------------ ------------ ------------
Net sales $42,721,000 $37,325,000 $87,465,000 $78,555,000
Cost of sales 25,063,000 21,529,000 51,500,000 45,214,000
------------ ------------ ------------ ------------
Gross profit 17,658,000 15,796,000 35,965,000 33,341,000
Operating expenses 11,422,000 11,038,000 25,038,000 23,170,000
------------ ------------ ------------ ------------
Operating
income 6,236,000 4,758,000 10,927,000 10,171,000
Interest expense 910,000 380,000 1,630,000 719,000
Interest income (11,000) (9,000) (23,000) (11,000)
Interest
capitalized (188,000) (81,000) (330,000) (144,000)
------------ ------------ ------------ ------------
Income before
income taxes 5,525,000 4,468,000 9,650,000 9,607,000
Income tax expense 2,210,000 1,720,000 3,860,000 3,724,000
------------ ------------ ------------ ------------
Net income $3,315,000 $2,748,000 $5,790,000 $5,883,000
============ ============ ============ ============
Earnings per
common share -
basic (1) $.13 $.11 $.22 $.24
============ ============ ============ ============
Earnings per
common share -
assuming dilution
(1) $.12 $.11 $.21 $.23
============ ============ ============ ============
Weighted average
shares
outstanding -
basic (1) 26,019,000 24,321,000 25,764,000 24,308,000
============ ============ ============ ============
Weighted average
shares
outstanding -
assuming dilution
(1) 27,431,000 25,708,000 27,206,000 25,700,000
============ ============ ============ ============
(1) Retroactively restated to reflect a 4-for-3 stock split
distributed on April 17, 2006 to common stockholders of record as of
April 3, 2006.
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