AMVAC's sales increased by 7% in Q2 2017
Aug. 2, 2017
For the first half year of 2017, American Vanguard's sales increased 4.5% to $148.6 million, and net income increased 30% to $7.8 million.
Eric Wintemute, Chairman and CEO of American Vanguard, stated, “We are pleased to report revenue increases of 7% for the second quarter and 4% for the first half of the year arising from a solid, diversified base business. Further, by maintaining our focus on manufacturing performance and overall cost control, we generated year-over-year earnings growth of 33% in the second quarter and 28% for the first half of 2017.”
Mr. Wintemute continued, “Our top line performance was driven in part by continued, strong demand for our cotton products in light of a 20% increase in planted acres this year and the anticipation of greater foliar pest pressure. In addition, we experienced solid international sales and growth in our granular soil insecticide products in the quarter and first half, driven by increased demand in domestic corn, peanuts and sugar crops. These gains were partially offset by weather-related declines in soil fumigant sales and competitive pricing pressure in corn herbicides. With respect to profitability, our gross profit margins increased in this year’s second quarter and half year, due primarily to product mix. Further, during the first six months of 2017, we generated $34 million in cash flow which we have used to make product line acquisitions, invest in growth initiatives, develop our international structure and reduce debt by $15 million. Our financial performance and debt reduction have, in turn, increased our borrowing capacity. This positions the Company for further acquisitions that are emerging from the current round of consolidation in the Agriculture Industry. We are looking at a number of these opportunities and will, of course, report to investors as these prospects come to fruition.”
Mr. Wintemute concluded: “Our outlook for the balance of 2017 remains positive, and the various acquisitions that we are pursuing will enable the Company to grow at an accelerated rate should they be consummated. The significant increase in U.S. cotton acreage should provide additional second half sales of our Bidrin® foliar insecticide and Folex® harvest defoliant. We expect modest international growth, our soil fumigant business should rebound this autumn, and in our non-crop business, we expect to see continued demand for our Dibrom® mosquito adulticide. Furthermore, we are pleased to have already recorded sales from the three products that we acquired from Adama in early June and expect that these sales will continue over the balance of 2017. Finally, we continue to manage working capital and operational costs while investing prudently in technology innovation, such as SIMPAS, for future growth. We look forward to giving further comment during our next earnings call.”