AMVAC sales up 14% in 2017

American Vanguard's sales increased by 33% to $116.5 million in the fourth quarter of 2017 Y-O-Y, and net income greatly improved by 115% to $8.4 million.
 
For the full year of 2017, sales were up by 14% to $355 million Y-O-Y, and net income advanced by 59% to $20.3 million.

Eric Wintemute, Chairman and CEO of American Vanguard, stated: "Our improved revenue performance in 2017 was driven by solid growth (+$11.8 million) of our existing products and the acquisition of new products and businesses during the year (+$31.1 million).

These acquisitions which broadened and diversified our product portfolio and expanded our geographic market access were procured at attractive investment values. This acquisition approach has been the generator of steady company growth over the last three decades, and with our strong balance sheet we expect to be able to take advantage of additional acquisition opportunities over the next several years."

Mr. Wintemute continued: "We experienced dynamic market conditions in 2017; however, due to our balanced portfolio of products, were able to improve both the top and bottom lines. For example, strong contributions from our cotton products and mosquito adulticide more than offset weather-related impact on soil fumigant sales and competitive pricing in corn herbicides.

Our full-year gross profit margins remained strong at 42%, aided by improved factory utilization and cost control which reduced our unabsorbed overhead expense by nearly $5 million. Improved sales, operating earnings and working capital management have enabled us to achieve a year-end debt level of $78 million and to increase our credit borrowing capacity to $140 million, despite having completed six acquisitions during the year.

Further, we continued to reduce our inventory of existing products year-over-year and generated $59.0 million in cash from operating activities during 2017. Finally, net income rose significantly for both the fourth quarter and the year, aided in part by an estimated $3.4 million tax benefit recorded by the Company upon the enactment of the Tax Cut and Jobs Act on December 22, 2017."

Mr. Wintemute concluded: "Our outlook for the current year is positive. Within our crop business, we expect that our leading position in the U.S. potato market will remain firm, while our high-margin fruit & vegetable segment is expected to constitute over 30% of our overall business in 2018. In addition, we expect relative stability in the Midwest corn markets which should drive sales of our corn soil insecticides and our expanded herbicide offerings. While U.S. cotton and peanut acreage may be flat-to-slightly down compared to 2017, we expect stable sales in both of these crops.

Our non-crop business is expected to expand by nearly 50% with the incorporation of the new OHP horticultural acquisition for the full year in 2018. Internationally, we are poised for modest growth of our traditional product portfolio, boosted by full-year sales of our Latin American acquisition Grupo AgriCenter. While addressing these markets, we will continue to plan for the future by investing in technology innovation, new products and portfolio defense. Please join us on our earnings call, where we will give you more color on our business."