American Vanguard Corporation (NYSE:AVD) today announced financial results for the first quarter ended March 31, 2021.

Fiscal 2021 First Quarter Financial Highlights – versus Fiscal 2020 First Quarter:

Net sales were $116 million in 2021, compared to $96 million in 2020.
Net income was $3.07 million in 2021, compared to $0.52 million in 2020.
Earnings per diluted share of $0.10 in 2021, compared to $0.02 in 2020.
EBITDA¹of $12.1 million in 2021, compared to $7.6 million in 2020.

Eric Wintemute, Chairman and CEO of American Vanguard stated: "We are pleased to report a much-improved start to 2021 both at the top and bottom lines, as compared to the prior year. Domestically, after several years of relatively stagnant crop prices, we are beginning to see higher commodity prices, which, in turn, has helped spur demand for both our soybean products and our corn herbicide portfolio. In non-crop uses, we experienced steady demand for mosquito control products, a recovery in the horticulture segment and higher royalties from our essential oil products for consumer use. Internationally, we enjoyed improved performance in Mexico and Brazil, while continuing to expand globally with the additions of Agrinos biological products and the integration of AgNova in Australia. Gross profit margins were just below those of the comparable quarter in 2020, while net income for the quarter was 6 times that of the prior year period."

He continued: "During the quarter, we kept a focus on balance sheet integrity and controlled inventory levels. We also exercised discipline with respect to operating expense (which declined as a percent of net sales) and debt management within the usual seasonal cycle for our business. Further, we produced profitable results while self-funding strategic growth initiatives, including our SIMPAS prescription application system with the Ultimus tracing/verification platform, which we are positioning as a comprehensive solution for the carbon credit market."

Mr. Wintemute concluded: "Over the course of 2021, we expect a low double-digit increase in net sales with stronger growth in net income. We look forward to giving you additional detail on market conditions, profitability, working capital considerations and our innovation initiatives during our upcoming earnings call."

Conference Call

Eric Wintemute, Chairman & CEO, Bob Trogele, COO and David T. Johnson, CFO, will conduct a conference call focusing on operating performance and financial results at 4:30 pm ET / 1:30 pm PT on Thursday, May 6, 2021. Interested parties may participate in the call by dialing 888-506-0062 or 973-528-0011 and enter code 481120 - please call in 10 minutes before the conference is scheduled to begin and ask for the American Vanguard conference.

The conference call will also be webcast live via the News and Media section of the 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 and the Standard & Poor's Small Cap 600 Index. 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 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 CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share data) (Unaudited)

ASSETS
	March 31, 2021			December 31, 2020
Current assets:
Cash and cash equivalents	$	13,765		$	15,923
Receivables:
Trade, net of allowance for doubtful accounts of $3,979 and $3,297, respectively		156,010			130,029
Other		10,247			8,444
Total receivables, net		166,257			138,473
Inventories		172,234			163,784
Prepaid expenses		11,221			10,499
Income taxes receivable		2,409			3,046
Total current assets		365,886			331,725
Property, plant and equipment, net		65,945			65,382
Operating lease right-of-use assets		11,207			12,198
Intangible assets, net of applicable amortization		193,776			197,514
Goodwill		50,505			52,108
Other assets		18,492			18,602
Deferred income tax assets, net		4,213			2,764
Total assets	$	710,024		$	680,293

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current installments of other liabilities	$	909		$	2,647
Accounts payable		60,946			59,253
Deferred revenue		32,316			43,611
Accrued program costs		53,196			45,441
Accrued expenses and other payables		15,865			16,184
Operating lease liabilities, current		3,664			4,188
Total current liabilities		166,896			171,324
Long-term debt, net		143,423			107,442
Operating lease liabilities, long term		7,692			8,177
Other liabilities, net of current installments		8,453			9,054
Deferred income tax liabilities, net		23,514			23,560
Total liabilities		349,978			319,557
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 33,874,322 shares at March 31, 2021 and 33,922,433 shares at December 31, 2020		3,389			3,394
Additional paid-in capital		95,985			96,642
Accumulated other comprehensive loss		(11,825	)		(9,322	)
Retained earnings		290,657			288,182
Less treasury stock at cost, 3,061,040 shares		(18,160	)		(18,160	)
Total stockholders' equity		360,046			360,736
Total liabilities and stockholders' equity	$	710,024		$	680,293


AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (Unaudited)

	For the three months ended March 31
	2021			2020
Net sales	$	116,155		$	95,962
Cost of sales		(71,024	)		(57,581	)
Gross profit		45,131			38,381
Operating expenses		(41,444	)		(36,545	)
Adjustment to bargain purchase gain on business acquisition		(33	)		—
Operating income		3,654			1,836
Change in fair value of an equity investment		1,066			—
Other income		672			—
Interest expense, net		(946	)		(1,508	)
Income before provision for income taxes (benefit) and loss on equity method investment		4,446			328
Income tax (expense) benefit		(1,362	)		205
Income before loss from equity method investment		3,084			533
Loss from equity method investment		(13	)		(13	)
Net income	$	3,071		$	520
Earnings per common share—basic	$	0.10		$	0.02
Earnings per common share—assuming dilution	$	0.10		$	0.02
Weighted average shares outstanding—basic		29,737			29,288
Weighted average shares outstanding—assuming dilution		30,523			29,948


AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES ANALYSIS OF SALES (In thousands) (Unaudited)

	For the three Months Ended March 31
	2021			2020			Change			% Change
Net sales:
U.S. crop	$	54,755		$	50,362		$	4,393			9	%
U.S. non-crop		17,453			10,993			6,460			59	%
Total U.S.		72,208			61,355			10,853			18	%
International		43,947			34,607			9,340			27	%
Total net sales:	$	116,155		$	95,962		$	20,193			21	%
Gross profit:
U.S. crop	$	21,271		$	24,245		$	(2,974	)		-12	%
U.S. non-crop		9,383			4,719			4,664			99	%
Total U.S.		30,654			28,964			1,690			6	%
International		14,477			9,417			5,060			54	%
Total gross profit:	$	45,131		$	38,381		$	6,750			18	%
Gross margin:
U.S. crop		39	%		48	%
U.S. non-crop		54	%		43	%
Total U.S.		42	%		47	%
International		33	%		27	%
Gross margin:		39	%		40	%


AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited)

	For the three months ended March 31
	2021			2020
Cash flows from operating activities:
Net income	$	3,071		$	520
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization of fixed and intangible assets		5,403			4,762
Amortization of other long-term assets		1,200			967
Accretion of discounted liabilities		18			4
Amortization of deferred loan fees		81			59
Provision for bad debts		682			359
Loan principal and interest forgiveness		(672	)		—
Stock-based compensation		1,792			1,357
Decrease in deferred income taxes		(269	)		(910	)
Change in fair value of an equity investment		(1,066	)		—
Loss from equity method investment		13			13
Adjustment to bargain purchase gain on business acquisition		33			—
Changes in assets and liabilities associated with operations:
Increase in net receivables		(30,422	)		(6,578	)
Increase in inventories		(9,615	)		(16,446	)
Increase in prepaid expenses and other assets		(1,052	)		(776	)
(Increase) decrease in income tax receivable/payable, net		638			(597	)
Decrease in net operating lease liability		(18	)		—
Increase in accounts payable		2,293			1,617
Decrease in deferred revenue		(11,293	)		(2,342	)
Increase in accrued program costs		7,770			6,016
Decrease in other payables and accrued expenses		(1,187	)		(2,094	)
Net cash used in operating activities		(32,600	)		(14,069	)
Cash flows from investing activities:
Capital expenditures		(2,904	)		(2,980	)
Intangible assets		(41	)		—
Net cash used in investing activities		(2,945	)		(2,980	)
Cash flows from financing activities:
Net borrowings under line of credit agreement		35,900			19,400
Net payments from the issuance of common stock (sale of stock under ESPP, exercise of stock options, and shares purchased for tax withholdings)		(2,454	)		(2,177	)
Payment of cash dividends		(593	)		(582	)
Net cash provided by financing activities		32,853			16,641
Net decrease in cash and cash equivalents		(2,692	)		(408	)
Effect of exchange rate changes on cash and cash equivalents		534			(629	)
Cash and cash equivalents at beginning of period		15,923			6,581
Cash and cash equivalents at end of period	$	13,765		$	5,544


AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES UNAUDITED RECONCILIATION OF NET INCOME TO EBITDA For the three months March 31, 2021 and 2020 (Unaudited)

	March 31, 2021		March 31, 2020
Net income, as reported	$	3,071	$	520
Provision for income taxes		1,362		(205	)
Interest expense, net		946		1,508
Depreciation and amortization		6,684		5,788
EBITDA²	$	12,063	$	7,611

¹ Earnings before interest, taxes, depreciation, and amortization. EBITDA is not a financial measure calculated and presented in accordance with U.S. generally accepted accounting principles (GAAP) and should not be considered as an alternative to net income (loss), operating income (loss) or any other financial measure so calculated and presented, nor as an alternative to cash flow from operating activities as a measure of liquidity. The items excluded from EBITDA are detailed in the reconciliation attached to this news release. Other companies (including the Company's competitors) may define EBITDA differently.

² Earnings before interest, taxes, depreciation and amortization. EBITDA is not a financial measure calculated and presented in accordance with U.S. generally accepted accounting principles (GAAP) and should not be considered as an alternative to net income (loss), operating income (loss) or any other financial measures so calculated and presented, nor as an alternative to cash flow from operating activities as a measure of liquidity. The items excluded from EBITDA are detailed in the reconciliation attached to this news release. Other companies (including the Company's competitors) may define EBITDA differently.

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