American Vanguard (US:AVD)2022-11-07 16:00Financial Performance - Net sales for the three months ended September 30, 2022, were $152,117 thousand, an increase of 3.7% compared to $147,298 thousand for the same period in 2021[15]. - Gross profit for the nine months ended September 30, 2022, was $182,356 thousand, up 18.2% from $154,334 thousand in the prior year[15]. - Operating income for the three months ended September 30, 2022, increased to $11,244 thousand, representing a 25.7% rise from $8,946 thousand in the same quarter of 2021[15]. - Net income for the nine months ended September 30, 2022, was $23,506 thousand, a significant increase of 71.3% compared to $13,713 thousand for the same period in 2021[15]. - Earnings per share (basic) for the three months ended September 30, 2022, was $0.23, up from $0.18 in the same quarter of the previous year[15]. - Total net sales for the nine months ended September 30, 2022, were $449,636,000, up from $398,063,000 in 2021, reflecting a growth of 12.9%[40]. - U.S. crop sales for the nine months ended September 30, 2022, reached $220,503,000, compared to $184,052,000 in 2021, marking an increase of 19.7%[40]. - International sales for the nine months ended September 30, 2022, were $175,485,000, up from $153,448,000 in 2021, indicating a growth of 14.3%[40]. - Consolidated net sales increased by 3% to $152,117 in Q3 2022, compared to $147,298 in Q3 2021, driven by a 9% increase in international sales[106]. - Net income rose by 23% to $6,741 in Q3 2022, up from $5,498 in Q3 2021, reflecting improved profitability[106]. - Gross profit increased by 8% to $61,384 in Q3 2022, with gross margin improving to 40% from 39% year-over-year[107]. Assets and Liabilities - Total current assets as of September 30, 2022, were $436,801 thousand, an increase from $342,000 thousand as of December 31, 2021[21]. - Total liabilities increased to $413,607 thousand as of September 30, 2022, compared to $321,422 thousand at the end of 2021[21]. - Cash and cash equivalents rose to $20,808 thousand as of September 30, 2022, from $16,285 thousand at the end of the previous year[21]. - Total stockholders' equity decreased to $362,568 thousand as of September 30, 2022, from $372,738 thousand at the end of 2021[21]. - Long-term indebtedness from the revolving line of credit increased to $149,300 million as of September 30, 2022, from $53,300 million as of December 31, 2021[55]. - The Company's total Funded Debt was $149.3 million, with a Consolidated EBITDA of $77.2 million, resulting in a leverage ratio of 1.93, well below the maximum allowed ratio of 3.5[58]. - Long-term net debt increased to $148,414,000 as of September 30, 2022, compared to $52,240,000 on December 31, 2021[152]. Cash Flow and Investments - Net cash used in operating activities for the nine months ended September 30, 2022, was $(45,678,000), compared to $(174,000) in 2021[29]. - Cash used for investing activities decreased to $9,978 in 2022 from $18,431 in 2021, with no product acquisition in the current year[148]. - Financing activities provided $59,797, with net borrowings under the Credit Agreement amounting to $96,000 during the nine-month period ended September 30, 2022[149]. - The company has the capacity to increase its borrowings by up to $120.8 million, compared to $94.9 million available as of September 30, 2021[58]. Shareholder Activities - The company declared cash dividends of $0.025 per share for the quarter ending March 31, 2022, totaling $742,000[24]. - The company declared a cash dividend of $0.025 per share in September 2022, totaling $715 million paid out[51]. - The company announced a share repurchase program to buy back up to 1,000,000 shares of its common stock over the next year, with no repurchases made in the same periods of 2021[96]. - The company repurchased shares totaling 606,000 during the quarter ending June 30, 2022[24]. - The company repurchased a total of 720,350 shares of common stock during the three-month period ended September 30, 2022, at an average price of $19.06 per share, totaling $13,731,000[166]. - An accelerated share repurchase arrangement was executed on August 22, 2022, for $20,000,000, resulting in an initial delivery of 802,810 shares at an average price of $19.93[169]. Tax and Regulatory Matters - The Company reported an income tax expense of $2,963 for the three-month period ended September 30, 2022, compared to $1,517 for the same period in 2021, reflecting an effective tax rate increase from 20.7% to 30.5%[95]. - For the nine-month period ended September 30, 2022, the income tax expense was $10,187, up from $5,324 in 2021, with the effective tax rate increasing from 27.4% to 30.2%[95]. - The Company has been cooperating with an ongoing investigation by the DOJ and EPA regarding environmental statutes, with discussions for potential resolution expected to resume soon[76]. - The Company is engaged in settlement discussions with the USEPA regarding the suspension of DCPA, with a hearing date set for January 24, 2023[80]. Operational Insights - The company experienced strong demand for its domestic crop and international products during the nine-month period ended September 30, 2022[32]. - The company plans to continue meeting demand by adjusting prices and optimizing factory performance amid inflationary pressures[106]. - Operating expenses rose by $1,730 to $50,140 for the three-month period ended September 30, 2022, reflecting a 4% increase compared to the same period in 2021[117]. - Research, product development, and regulatory expenses increased by $2,020 to $23,241, driven by infield activities and international product defense[135]. Market Risks and Controls - The company has not engaged in hedging activities for foreign currency exchange rate risks, which may affect revenues and expenses from non-U.S. dollar functional currencies[157]. - The company is exposed to market risks related to interest rate fluctuations due to its variable rate line of credit[157]. - The company continues to assess business risks, including inflation and increased interest rates, which could adversely impact financial performance[164]. - As of September 30, 2022, the company's disclosure controls and procedures were deemed effective by management[159]. - There were no material changes to the critical accounting policies during the reporting period ending September 30, 2022[155].