AgroPages-American Vanguard's sales up 5%, earnings down 39% in nine months 2019-Agricultural news

American Vanguard Corporation (NYSE:AVD), announced financial results for the three- and nine-month periods ended September 30, 2019.

Financial Highlights Fiscal 2019 Third Quarter – versus Fiscal 2018 Third Quarter

• Net sales of $125 million in 2019, compared with $112 million in 2018

• Net income of $3.2 million in 2019, compared with $6.5 million in 2018

• Earnings per diluted share of $0.11 in 2019, compared with $0.22 in 2018

• EBITDA1 of $12 million in 2019, compared with $17 million in 2018

Financial Highlights Fiscal 2019 First Nine Months – versus Fiscal 2018 First Nine Months

• Net sales of $338 million in 2019, compared with $323 million in 2018

• Net income of $10.2 million in 2019, compared with $16.8 million in 2018

• Earnings per diluted share of $0.34 in 2019, compared with $0.56 in 2018

• EBITDA of $37 million in 2019, compared to $45 million in 2018

Eric Wintemute, Chairman and CEO of American Vanguard commented, “As we noted in our pre-announcement, driven largely by our international business, consolidated net sales for the quarter grew by 12%. At the same time, net income declined for the period, with earnings per share at $0.11 for the quarter. This was due to lower factory activity, higher operating expenses and a comparatively higher benefit in the comparable quarter of 2018 relating to the reassessment of deferred purchase price consideration.”

Mr. Wintemute continued, “Our overall performance was mixed. On the one hand, our international business grew by 27% during the quarter. With further integration of relatively early-stage business operations, we experienced expansion in Central America, Brazil, Mexico and Canada. On the other hand, the domestic business was held to only 3% growth in the quarter due to extreme weather conditions that have set back the entire industry. Persistent rains and cold during the first half of 2019 delayed plantings, pushed harvest times back and reduced demand for post-harvest fumigants. This was followed by record-setting heat in the Southern region during the third quarter that reduced demand for defoliants, fungicides and insecticides. Notwithstanding these weather challenges, our domestic Ag sales increased by 1% in the third quarter and we recorded a 10% increase in our domestic non-crop sales, led by our mosquito adulticide and pest strip product lines.”

Mr. Wintemute continued, “Focusing on full year 2019 results, we expect consolidated sales to increase by about 5% year-over-year with mixed performance among our major markets. International sales should increase by about 25% for the full year. However, our domestic sales will likely decrease by about 5% on a per annum basis, which we believe is consistent with industry-wide forecasts that show domestic markets receding by 6% to 12% for the year. With these considerations in mind, we are expecting full year 2019 net sales of approximately $475 million, gross profit margins around 38%, operating expenses of approximately $155 million and a full corporate tax rate of approximately 29%.”

Mr. Wintemute concluded, “During our earnings conference call, we will cover current and near-term market conditions, provide our preliminary outlook for 2020 and outline continued efforts to improve our balance sheet. We will also update listeners on technology development with a focus on biological products and SIMPAS.”