AMVAC's sales increased by 2% in Q1 2017

American Vanguard's sales increased by 1.7% to $70.7 million in the first quarter of 2017. Net income advanced by 23.7% to $3.45 million in this quarter.

Eric Wintemute, Chairman and CEO of American Vanguard commented, “Our overall financial performance for the quarter improved, as we continued to benefit from our participation in diverse crops and pest control applications. Net sales increased during the period, driven by our portfolio’s strong performance in cotton, peanuts, sugar crops, fruits and vegetables and in non-crop uses. Sales of our corn soil insecticides were flat, despite reduced corn acres and corn commodity pricing. Further, while we saw reduced demand for our corn herbicide due to delayed planting and competitive market conditions, we recorded significantly improved sales in the southern cotton market, driven by this year’s rise in cotton acreage and the expectation of higher pest pressure from foliar insects.”

Mr. Wintemute continued, “We also reported stronger net income and gross margins for the period, due to favorable raw material pricing, improved manufacturing efficiency and sales mix. Additionally, we reduced outstanding debt and substantially increased our borrowing capacity at quarter end. While we continue to manage operating expenses closely, we did experience a rise in these costs due in part to our R&D investment in SIMPAS.”

Mr. Wintemute concluded, “As we look forward to the rest of the year, we expect to have continued growth of our cotton and peanut products and stable performance of our soil fumigants. We also expect to benefit from stronger fruit & vegetable sales in the post-drought western U.S and additional Dibrom® mosquito adulticide sales in light of continued public health concerns. Delayed planting on many corn acres should lead to a stronger post-emergent herbicide market, which would benefit Impact sales during the second quarter. Also, we are seeing more divestment activity in the industry today than we have in the last two or three decades. In light of this, we are pursuing multiple acquisition opportunities that we expect to report upon over the balance of 2017. And, as you may recall, we recently announced our agreement to purchase three products from the Adama group, subject to the closing of the ChemChina/Syngenta merger, which is scheduled to take place in the second quarter. All in all, I am confident about our prospects for the balance of the year and look forward to giving additional color on our performance during the earnings call.”