American Vanguard Reports Fourth Quarter & Full Year 2023 Results
Sets $15MM Adjusted EBITDA Gain as Transformation Target
Fiscal 2023 Fourth Quarter Financial Highlights – versus Fiscal 2022 Fourth Quarter:
-
Net sales were
$172.2 million in 2023, compared to$159.5 million in 2022 -
Net income was
$7.0 million in 2023, compared to$3.9 million in 2022 -
Earnings per diluted share of
$0.25 in 2023, compared to$0.13 in 2022 -
Adjusted EBITDA1 of
$21 million in 2023, compared to$12 million in 2022
Fiscal 2023 Full Year Financial Highlights – versus Fiscal 2022 Full Year:
-
Net sales were
$579 million in 2023, compared to$610 million in 2022 -
Net income was
$7.5 million in 2023, compared to$27.4 million in 2022 -
Earnings per diluted share of
$0.26 in 2023, compared to$0.92 in 2022 -
Adjusted EBITDA1 of
$55 million in 2023, compared to$73 million in 2022
Conference Call
About
The Company, from time to time, 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 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
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data) (Unaudited) |
||||||||
|
|
2023 |
|
|
2022 |
|
||
Assets |
|
|
|
|
|
|
||
Current assets: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
11,416 |
|
|
$ |
20,328 |
|
Receivables: |
|
|
|
|
|
|
||
Trade, net of allowance for credit losses of |
|
|
182,613 |
|
|
|
156,492 |
|
Other |
|
|
8,356 |
|
|
|
9,816 |
|
Total receivables, net |
|
|
190,969 |
|
|
|
166,308 |
|
Inventories |
|
|
219,551 |
|
|
|
184,190 |
|
Prepaid expenses |
|
|
6,261 |
|
|
|
15,850 |
|
Income taxes receivable |
|
|
3,824 |
|
|
|
1,891 |
|
Total current assets |
|
|
432,021 |
|
|
|
388,567 |
|
Property, plant and equipment, net |
|
|
74,560 |
|
|
|
70,912 |
|
Operating lease right-of-use assets, net |
|
|
22,417 |
|
|
|
24,250 |
|
Intangible assets, net of amortization |
|
|
172,508 |
|
|
|
184,664 |
|
|
|
|
51,199 |
|
|
|
47,010 |
|
Deferred income tax assets |
|
|
2,849 |
|
|
|
141 |
|
Other assets |
|
|
11,994 |
|
|
|
10,769 |
|
Total assets |
|
$ |
767,548 |
|
|
$ |
726,313 |
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|
|
||
Current liabilities: |
|
|
|
|
|
|
||
Accounts payable |
|
$ |
68,833 |
|
|
$ |
69,000 |
|
Customer prepayments |
|
|
65,560 |
|
|
|
110,597 |
|
Accrued program costs |
|
|
68,076 |
|
|
|
60,743 |
|
Accrued expenses and other payables |
|
|
16,354 |
|
|
|
20,982 |
|
Operating lease liabilities, current |
|
|
6,081 |
|
|
|
5,279 |
|
Income taxes payable |
|
|
5,591 |
|
|
|
— |
|
Total current liabilities |
|
|
230,495 |
|
|
|
266,601 |
|
Long-term debt |
|
|
138,900 |
|
|
|
51,477 |
|
Operating lease liabilities, long-term |
|
|
17,113 |
|
|
|
19,492 |
|
Deferred income tax liabilities |
|
|
7,892 |
|
|
|
14,597 |
|
Other liabilities |
|
|
3,138 |
|
|
|
4,167 |
|
Total liabilities |
|
|
397,538 |
|
|
|
356,334 |
|
Commitments and contingent liabilities |
|
|
|
|
|
|
||
Stockholders’ equity: |
|
|
|
|
|
|
||
Preferred stock, |
|
|
— |
|
|
|
— |
|
Common stock, |
|
|
3,467 |
|
|
|
3,444 |
|
Additional paid-in capital |
|
|
110,810 |
|
|
|
105,634 |
|
Accumulated other comprehensive loss |
|
|
(5,963 |
) |
|
|
(12,182 |
) |
Retained earnings |
|
|
332,897 |
|
|
|
328,745 |
|
|
|
|
441,211 |
|
|
|
425,641 |
|
Less treasury stock at cost, 5,915,182 shares in 2023 and 5,029,892 in 2022 |
|
|
(71,201 |
) |
|
|
(55,662 |
) |
Total stockholders’ equity |
|
|
370,010 |
|
|
|
369,979 |
|
Total liabilities and stockholders’ equity |
|
$ |
767,548 |
|
|
$ |
726,313 |
|
CONSOLIDATED STATEMENTS OF OPERATIONS
Years ended (In thousands, except per share data) (Unaudited) |
||||||||||||
|
|
2023 |
|
|
2022 |
|
|
2021 |
|
|||
Net sales |
|
$ |
579,371 |
|
|
$ |
609,615 |
|
|
$ |
557,676 |
|
Cost of sales |
|
|
(400,207 |
) |
|
|
(417,227 |
) |
|
|
(386,953 |
) |
Gross profit |
|
|
179,164 |
|
|
|
192,388 |
|
|
|
170,723 |
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|||
Selling, general and administrative |
|
|
(117,844 |
) |
|
|
(119,921 |
) |
|
|
(111,093 |
) |
Research, product and regulatory |
|
|
(38,025 |
) |
|
|
(31,816 |
) |
|
|
(28,855 |
) |
Total operating expenses |
|
|
(155,869 |
) |
|
|
(151,737 |
) |
|
|
(139,948 |
) |
Bargain purchase gain on business acquisition |
|
|
— |
|
|
|
— |
|
|
|
171 |
|
Operating income |
|
|
23,295 |
|
|
|
40,651 |
|
|
|
30,946 |
|
Change in fair value of equity investments, net |
|
|
(359 |
) |
|
|
(732 |
) |
|
|
(790 |
) |
Other income |
|
|
— |
|
|
|
— |
|
|
|
672 |
|
Interest expense, net |
|
|
(12,639 |
) |
|
|
(3,954 |
) |
|
|
(3,687 |
) |
Income before provision for income taxes and loss on equity method investment |
|
|
10,297 |
|
|
|
35,965 |
|
|
|
27,141 |
|
Provision for income taxes |
|
|
(2,778 |
) |
|
|
(8,561 |
) |
|
|
(8,166 |
) |
Income before loss on equity method investment |
|
|
7,519 |
|
|
|
27,404 |
|
|
|
18,975 |
|
Loss from equity method investment |
|
|
— |
|
|
|
— |
|
|
|
(388 |
) |
Net income |
|
$ |
7,519 |
|
|
$ |
27,404 |
|
|
$ |
18,587 |
|
Earnings per common share—basic |
|
$ |
0.27 |
|
|
$ |
0.94 |
|
|
$ |
0.62 |
|
Earnings per common share—assuming dilution |
|
$ |
0.26 |
|
|
$ |
0.92 |
|
|
$ |
0.61 |
|
Weighted average shares outstanding—basic |
|
|
28,128 |
|
|
|
29,234 |
|
|
|
29,811 |
|
Weighted average shares outstanding—assuming dilution |
|
|
28,533 |
|
|
|
29,872 |
|
|
|
30,410 |
|
AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES ANALYSIS OF SALES
For the years and quarters ended (Unaudited) |
|||||||||||||||
|
For the quarters ended |
|
|
For the years ended |
|
||||||||||
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
Net sales: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
83,406 |
|
|
$ |
68,231 |
|
|
$ |
269,229 |
|
|
$ |
288,624 |
|
|
|
25,246 |
|
|
|
22,865 |
|
|
|
75,287 |
|
|
|
76,709 |
|
Total |
|
108,652 |
|
|
|
91,096 |
|
|
|
344,516 |
|
|
|
365,333 |
|
International |
|
63,528 |
|
|
|
68,366 |
|
|
|
234,855 |
|
|
|
244,282 |
|
Total net sales |
$ |
172,180 |
|
|
$ |
159,462 |
|
|
$ |
579,371 |
|
|
$ |
609,615 |
|
Total cost of sales |
$ |
(117,545 |
) |
|
$ |
(117,529 |
) |
|
$ |
(400,207 |
) |
|
$ |
(417,227 |
) |
Total gross profit |
|
54,635 |
|
|
|
41,933 |
|
|
|
179,164 |
|
|
|
192,388 |
|
Total gross margin |
|
32 |
% |
|
|
26 |
% |
|
|
31 |
% |
|
|
32 |
% |
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years ended (In thousands) (Unaudited) |
||||||||||||
|
|
2023 |
|
|
2022 |
|
|
2021 |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
|
|||
Net income |
|
$ |
7,519 |
|
|
$ |
27,404 |
|
|
$ |
18,587 |
|
Adjustments to reconcile net income to net cash (used in) provided by operating activities: |
|
|
|
|
|
|
|
|
|
|||
Depreciation and amortization of property, plant and equipment and intangible assets |
|
|
21,780 |
|
|
|
22,138 |
|
|
|
22,229 |
|
Amortization of other long-term assets |
|
|
1,754 |
|
|
|
3,573 |
|
|
|
3,943 |
|
Amortization and accretion of deferred loan fees and discounted liabilities |
|
|
254 |
|
|
|
289 |
|
|
|
359 |
|
Loss on disposal of property, plant and equipment |
|
|
— |
|
|
|
268 |
|
|
|
194 |
|
Provision for bad debts |
|
|
1,935 |
|
|
|
1,171 |
|
|
|
649 |
|
Provision for inventory obsolescence |
|
|
517 |
|
|
|
340 |
|
|
|
1,034 |
|
Loan principal and interest forgiveness |
|
|
— |
|
|
|
— |
|
|
|
(672 |
) |
Fair value adjustment of contingent consideration |
|
|
— |
|
|
|
610 |
|
|
|
758 |
|
Decrease in environmental liability |
|
|
— |
|
|
|
— |
|
|
|
(167 |
) |
Stock-based compensation |
|
|
6,138 |
|
|
|
5,684 |
|
|
|
6,880 |
|
Deferred income taxes |
|
|
(9,710 |
) |
|
|
(5,278 |
) |
|
|
(2,090 |
) |
Changes in liabilities for uncertain tax positions or unrecognized tax benefits |
|
|
(508 |
) |
|
|
(1,441 |
) |
|
|
(1,783 |
) |
Change in equity investment fair value |
|
|
359 |
|
|
|
732 |
|
|
|
790 |
|
Loss from equity method investment |
|
|
— |
|
|
|
— |
|
|
|
388 |
|
Bargain purchase gain |
|
|
— |
|
|
|
— |
|
|
|
(171 |
) |
Non-cash lease expense |
|
|
256 |
|
|
|
68 |
|
|
|
286 |
|
Foreign currency transaction gains |
|
|
(581 |
) |
|
|
(29 |
) |
|
|
(225 |
) |
Changes in assets and liabilities associated with operations, net of business combinations: |
|
|
|
|
|
|
|
|
|
|||
Increase in net receivables |
|
|
(20,278 |
) |
|
|
(6,447 |
) |
|
|
(24,347 |
) |
(Increase) decrease in inventories |
|
|
(27,832 |
) |
|
|
(29,560 |
) |
|
|
8,323 |
|
(Increase) decrease in income tax receivable, net |
|
|
3,568 |
|
|
|
(4,910 |
) |
|
|
6,051 |
|
(Increase) decrease in prepaid expenses and other assets |
|
|
1,269 |
|
|
|
(3,082 |
) |
|
|
(4,581 |
) |
Increase (decrease) in accounts payable |
|
|
(2,287 |
) |
|
|
1,704 |
|
|
|
8,783 |
|
(Decrease) Increase in deferred revenue |
|
|
(45,079 |
) |
|
|
47,551 |
|
|
|
19,280 |
|
Increase (decrease) in accrued program costs |
|
|
7,244 |
|
|
|
(2,449 |
) |
|
|
17,877 |
|
Increase (decrease) in other payables and accrued expenses |
|
|
(5,066 |
) |
|
|
90 |
|
|
|
3,986 |
|
Decrease in contingent consideration |
|
|
— |
|
|
|
(1,321 |
) |
|
|
— |
|
Net cash (used in) provided by operating activities |
|
|
(58,748 |
) |
|
|
57,105 |
|
|
|
86,361 |
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
|||
Capital expenditures |
|
|
(11,878 |
) |
|
|
(13,261 |
) |
|
|
(9,518 |
) |
Proceeds from disposal of property, plant and equipment |
|
|
242 |
|
|
|
84 |
|
|
|
— |
|
Acquisitions of business and product line |
|
|
(5,195 |
) |
|
|
— |
|
|
|
(10,000 |
) |
Intangible assets |
|
|
(186 |
) |
|
|
(1,293 |
) |
|
|
(524 |
) |
Net cash used in investing activities |
|
|
(17,017 |
) |
|
|
(14,470 |
) |
|
|
(20,042 |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
|||
Payments under line of credit agreement |
|
|
(172,500 |
) |
|
|
(254,000 |
) |
|
|
(186,569 |
) |
Borrowings under line of credit agreement |
|
|
259,100 |
|
|
|
253,000 |
|
|
|
131,000 |
|
Payment of contingent consideration |
|
|
— |
|
|
|
(68 |
) |
|
|
(1,301 |
) |
Net receipt from the issuance of common stock under ESPP |
|
|
981 |
|
|
|
837 |
|
|
|
743 |
|
Net receipt from the exercise of stock options |
|
|
46 |
|
|
|
827 |
|
|
|
172 |
|
Net payment from common stock purchased for tax withholding |
|
|
(1,967 |
) |
|
|
(2,067 |
) |
|
|
(2,955 |
) |
Repurchase of common stock |
|
|
(15,539 |
) |
|
|
(34,002 |
) |
|
|
(4,579 |
) |
Payment of cash dividends |
|
|
(3,384 |
) |
|
|
(2,787 |
) |
|
|
(2,382 |
) |
Net cash provided by (used in) financing activities |
|
|
66,737 |
|
|
|
(38,260 |
) |
|
|
(65,871 |
) |
Net (decrease) increase in cash and cash equivalents |
|
|
(9,028 |
) |
|
|
4,375 |
|
|
|
448 |
|
Effect of exchange rate changes on cash and cash equivalents |
|
|
116 |
|
|
|
(332 |
) |
|
|
(86 |
) |
Cash and cash equivalents at beginning of year |
|
|
20,328 |
|
|
|
16,285 |
|
|
|
15,923 |
|
Cash and cash equivalents at end of year |
|
$ |
11,416 |
|
|
$ |
20,328 |
|
|
$ |
16,285 |
|
AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES RECONCILIATION OF NET INCOME TO EBITDA
For the years and quarters ended (Unaudited) |
|||||||
|
For the years ended |
|
|||||
|
2023 |
|
|
2022 |
|
||
Net income |
$ |
7,519 |
|
|
$ |
27,404 |
|
Provision for income taxes |
|
2,778 |
|
|
|
8,561 |
|
Interest expense, net |
|
12,639 |
|
|
|
3,954 |
|
Proxy costs |
|
541 |
|
|
|
1,785 |
|
Depreciation and amortization |
|
23,534 |
|
|
|
25,711 |
|
Stock compensation expense |
|
6,138 |
|
|
|
5,684 |
|
Transformation costs |
|
957 |
|
|
|
- |
|
Adjusted EBITDA2 |
$ |
54,106 |
|
|
$ |
73,099 |
|
|
For the quarters ended |
|
|||||
|
2023 |
|
|
2022 |
|
||
Net income |
$ |
6,979 |
|
|
$ |
3,898 |
|
Provision (benefit) for income taxes |
|
712 |
|
|
|
(1,626 |
) |
Interest expense, net |
|
4,357 |
|
|
|
1,698 |
|
Depreciation and amortization |
|
5,684 |
|
|
|
6,406 |
|
Stock compensation expense |
|
1,881 |
|
|
|
1,288 |
|
Transformation costs |
|
957 |
|
|
|
— |
|
Adjusted EBITDA2 |
$ |
20,570 |
|
|
$ |
11,664 |
|
______________________________
1 Earnings before interest, taxes, depreciation, and amortization. Adjusted EBITDA is not a financial measure calculated and presented in accordance with
2 Earnings before interest, taxes, depreciation, and amortization. Adjusted EBITDA is not a financial measure calculated and presented in accordance with
View source version on businesswire.com: https://www.businesswire.com/news/home/20240314306132/en/
Company Contact:
(949) 260-1200
williamk@amvac-chemical.com
Investor Representative
the
www.theequitygroup.com
Lcati@equityny.com
Source: