Financial Performance - American Vanguard reported diluted earnings per share of -9 cents for Q2 2024, missing Wall Street's expectation of 12 cents per share and worse than the -4 cents per share reported in the same period last year [1][2] - The company's revenue for Q2 was $128.21 million, falling short of analysts' estimate of $133.6 million and down 3.5% year-over-year from $132.8 million [1][3] Management Commentary - Acting CEO Timothy Donnelly attributed the reduced profitability to non-recurring charges, including severance compensation for the former CEO and one-time costs related to business transformation activities, emphasizing that the results are not acceptable and the company is focused on urgent changes [2][3] Outlook and Market Reaction - American Vanguard has lowered its revenue outlook for 2024 to a range of $565 million to $580 million, which is below Wall Street's estimate of $596.75 million [3] - Following the earnings announcement and outlook cut, AVD stock experienced a decline of 28.1% [3]

Core Insights - American Vanguard (AVD) reported a quarterly loss of $0.09 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.01, marking an earnings surprise of -800% [1] - The company's revenues for the quarter ended June 2024 were $128.21 million, missing the Zacks Consensus Estimate by 4.46% and down from $132.79 million a year ago [1] - The stock has underperformed significantly, losing about 28.3% since the beginning of the year compared to the S&P 500's gain of 9% [2] Company Performance - Over the last four quarters, American Vanguard has surpassed consensus EPS estimates only once [1] - The current consensus EPS estimate for the upcoming quarter is $0.10 on revenues of $150 million, and for the current fiscal year, it is $0.32 on revenues of $605.5 million [4] - The estimate revisions trend for American Vanguard is currently unfavorable, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [4] Industry Context - The Chemical - Specialty industry, to which American Vanguard belongs, is currently in the top 43% of over 250 Zacks industries, suggesting a relatively strong industry performance [5] - The top 50% of Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1, indicating potential for better performance within the industry [5] - Another company in the same industry, Flexible Solutions International Inc. (FSI), is expected to report quarterly earnings of $0.07 per share, with revenues projected at $10.34 million, reflecting a slight increase from the previous year [5]

Core Viewpoint - American Vanguard (AVD) is anticipated to report a year-over-year increase in earnings due to higher revenues, with the consensus outlook indicating a quarterly loss of $0.01 per share, reflecting a 75% improvement compared to the previous year [1][2]. Revenue Expectations - Revenues for the upcoming quarter are projected to be $134.2 million, which represents a 1.1% increase from the same quarter last year [2]. Estimate Revisions Trend - The consensus EPS estimate has been revised down by 9.09% over the last 30 days, indicating a reassessment by analysts of their initial estimates [3]. Earnings Whisper and ESP - The Zacks Earnings ESP (Expected Surprise Prediction) model shows that the Most Accurate Estimate aligns with the Zacks Consensus Estimate, resulting in an Earnings ESP of 0% for American Vanguard [4][6][7]. Zacks Rank and Predictive Power - American Vanguard currently holds a Zacks Rank of 4, which complicates the prediction of an earnings beat, as stocks with a negative Earnings ESP and lower Zacks Rank are less likely to outperform [5][7]. Historical Performance - In the last reported quarter, American Vanguard exceeded the consensus EPS estimate by 12.50%, but has only beaten estimates once in the past four quarters [8]. Conclusion - While American Vanguard is not positioned as a strong candidate for an earnings beat, investors should consider other factors influencing stock performance ahead of the earnings release [9].

Core Insights - Vanguard's annual report indicates that while Americans are saving more for retirement, many still rely heavily on Social Security, highlighting a need for increased savings [1][10] Group 1: Savings and Participation Rates - The average total return rate for 401(k) participants in 2023 was 18.1%, marking the best year since 2019 [2] - Participation in 401(k) plans reached record highs, with 59% of plans offering automatic enrollment, leading to a 94% participation rate in those plans compared to 67% for voluntary enrollment [2][3] - The average participant deferred 7.4% of their savings, with total contributions averaging 11.7% when including employer contributions [3] Group 2: Investment Preferences - Participants showed a strong preference for equities, with 74% of contributions directed towards stocks, and 64% of contributions going into target-date funds [3] Group 3: Account Balances - The average account balance for Vanguard participants was $134,128, while the median balance was significantly lower at $35,286, indicating a disparity driven by a small group of high-balance investors [5] - For those aged 65 and older, the average account balance was $272,588, but the median balance was only $88,488, raising concerns about retirement preparedness [7] Group 4: Retirement Income Analysis - A typical annual drawdown of 4% from a median balance of $88,488 yields only $3,539 annually, combined with Social Security benefits of approximately $20,268, leading to a total of about $33,065 per year [8][9] - Only 57% of retirees have a tax-deferred retirement account, and 56% receive pension income, which significantly affects their financial well-being in retirement [9] Group 5: Recommendations for Improvement - To enhance retirement security, Americans need to save more, as only 14% of participants contribute the maximum allowed amount of $22,500 per year [10] - There is a need for increased investor education, especially among higher-income earners, as only 53% of those earning over $150,000 maxed out their contributions [10]

Core Insights - American Vanguard Corporation (AVD) reported earnings of 6 cents per share for Q1 2024, down from 7 cents a year ago, but adjusted earnings of 9 cents exceeded the Zacks Consensus Estimate of 8 cents [1] - Revenues for the quarter were $135.1 million, an 8% year-over-year increase, but fell short of the Zacks Consensus Estimate of $141.2 million [1] Sales by Regions - U.S. crop business revenues increased by 9% year over year to approximately $67.3 million, driven by strong sales of granular soil insecticides, herbicides, and cotton and peanut products [2] - U.S. non-crop business revenues rose around 28% year over year to about $17.8 million, significantly boosted by sales of mosquito adulticides, pest strips, and OHP products for nursery and ornamental uses [2] - International business revenues grew by 2% year over year to around $50.1 million, supported by sales in Mexico and the APAC region [2] Financials - The company ended the quarter with cash and cash equivalents of roughly $13.7 million, a 20% sequential increase [3] - Long-term debt rose to approximately $187 million, reflecting a 34% sequential increase [3] Outlook - AVD anticipates stable market conditions with a strong farm economy and a more relaxed procurement approach, projecting net sales growth of 6% to 9% year over year for 2024 [4] - The company expects full-year adjusted EBITDA to be in the range of $60 million to $70 million [4] Price Performance - AVD's shares have declined by 44.8% over the past year, compared to a 10.1% decline in the industry [5]

Financial Performance - The company recorded a 35% increase in adjusted EBITDA and an 87% rise in operating income, indicating effective cost control initiatives [5] - Overall sales increased by 8%, from $125 million to $135 million, with US crop sales up 9%, US non-crop sales up 28%, and international sales up 2% [8][10] - Gross margin improved from 30.8% to 31.4% of sales, driven by stronger sales of higher-margin products [9] Business Line Performance - In the US crop segment, granular soil insecticides and herbicides saw strong sales, particularly due to increased demand from corn growers and recovery from supply issues [6] - The US non-crop segment experienced a significant increase in mosquito adulticide sales and pest strips, reflecting recovery in consumer and technical markets [6] - International sales were slightly up, led by growth in Mexico and favorable weather conditions in Australia, while LATAM remained stable [7] Market Conditions - The US economy shows signs of improvement, with the Federal Reserve shifting focus from interest rate hikes to potential cuts, which may stabilize commodity prices [13] - The farm economy remains strong, with stable buying activity expected from distribution partners [13] Company Strategy and Industry Competition - The company is undergoing transformation initiatives aimed at improving operational efficiency and achieving $15 million in annualized adjusted EBITDA by 2026 [15] - A voluntary suspension of sales for the herbicide Dacthal due to EPA concerns has led to a revised sales outlook, with expected net sales growth adjusted to 6% - 9% for 2024 [14] Management Commentary on Operating Environment and Future Outlook - Management expressed cautious optimism regarding market conditions, noting that while the farm economy is strong, buying activity is more deliberate [13] - The company anticipates initial benefits from transformation efforts in 2024, with more significant improvements expected in 2025 [20] Other Important Information - Cash at the end of the quarter was $13.7 million, down from $19.6 million the previous year, reflecting efforts to reduce debt [9] - The company is managing inventory levels carefully, aiming for a year-end target of around 34% of net sales [12] Q&A Session Summary Question: Clarification on transformation strategy and cost savings - Management confirmed that while some benefits from transformation will be seen in 2024, costs will overshadow these benefits, with significant improvements expected in 2025 [20] Question: Impact of Dacthal on sales outlook - Dacthal is a $15 million product, and management has assumed no sales for the remainder of the year while awaiting EPA review [22] Question: Grower sentiment and demand trends - Growers in the Midwest are cautious, with some optimism due to recent price increases, but wet conditions have delayed planting [33] Question: Herbicide market dynamics - The herbicide market has improved compared to last year, but there are still challenges, particularly for larger peers [36]

Financial Performance - Net sales increased to $135 million, up 8% from $125 million in Q1 2023[1] - Adjusted EBITDA rose to $15.5 million, a 35% increase compared to $11.5 million in the same quarter last year[1] - Operating income improved to $6.1 million, up 87% from $3.3 million in Q1 2023[1] - Gross profit for the quarter was $42.4 million, a 10% increase from $38.5 million in the previous year[11] - Net income for the three months ended March 31, 2024, was $1,552 million, a decrease of 19.1% compared to $1,918 million for the same period in 2023[13] - Adjusted EBITDA for the three months ended March 31, 2024, was $15,516 million, an increase of 35.5% from $11,511 million in the same period last year[15] Sales Growth - The company expects annual net sales growth of 6% to 9% and adjusted EBITDA target of $60 million to $70 million[2] - U.S. crop sales reached $67.3 million, a 9% increase, while U.S. non-crop sales surged by 28% to $17.8 million[11] - International sales grew to $50.1 million, reflecting a 2% increase from $49.1 million in Q1 2023[11] Cash and Assets - Cash and cash equivalents increased to $13.7 million from $11.4 million at the end of 2023[8] - Total assets rose to $781.6 million, up from $767.5 million at the end of the previous year[8] - Cash at the end of the period on March 31, 2024, was $13,709 million, down from $19,568 million at the end of the same period in 2023[13] Operating Activities - Net cash used in operating activities for the three months ended March 31, 2024, was $(42,424) million, compared to $(41,452) million for the same period in 2023[13] - Capital expenditures for the three months ended March 31, 2024, were $(3,565) million, an increase from $(2,590) million in the same period last year[13] - Net cash provided by financing activities for the three months ended March 31, 2024, was $47,699 million, compared to $43,777 million for the same period in 2023[13] Expenses and Provisions - Stock-based compensation for the three months ended March 31, 2024, was $2,005 million, an increase of 36% from $1,474 million in the same period last year[15] - Provision for income taxes for the three months ended March 31, 2024, was $1,484 million, compared to a tax benefit of $(361) million for the same period in 2023[15] - Interest expense, net for the three months ended March 31, 2024, was $3,693 million, an increase from $1,686 million in the same period last year[15] Customer Prepayments - Decrease in customer prepayments for the three months ended March 31, 2024, was $(37,037) million, compared to $(22,759) million for the same period in 2023[13] Future Projections - The company anticipates an additional $15 million in adjusted EBITDA annually by 2026 from its transformation program[1]

Financial Performance - Net income for the three months ended March 31, 2024, was $1,552,000, a decrease of 19.1% compared to $1,918,000 for the same period in 2023[16] - Comprehensive loss income for the same period was $(12,000), significantly down from $4,464,000 in 2023, indicating a negative shift in overall financial performance[16] - Total net sales for the three months ended March 31, 2024, reached $135,143,000, representing an increase of 8.9% from $124,885,000 in the prior year[33] - U.S. crop sales increased to $67,257,000, up 8.1% from $61,876,000 in the same quarter of 2023[33] - U.S. non-crop sales rose to $17,768,000, a significant increase of 27.5% compared to $13,899,000 in the previous year[33] - The Company reported a net income of $1,552 (or $0.06 per share) for Q1 2024, down from $1,918 (or $0.07 per share) in Q1 2023[73] - Income tax expense for Q1 2024 was $1,484, compared to a tax benefit of $361 in Q1 2023, resulting in an effective tax rate of 48.9%[83] Assets and Liabilities - Total current assets increased to $446,945,000 as of March 31, 2024, up from $432,021,000 at the end of 2023, reflecting a growth of 3.4%[17] - Total assets rose to $781,625,000 as of March 31, 2024, compared to $767,548,000 at December 31, 2023, marking an increase of 1.8%[18] - Total liabilities increased to $410,042,000 as of March 31, 2024, up from $397,538,000 at the end of 2023, representing a rise of 3.8%[19] - Long-term debt increased to $187,017,000 as of March 31, 2024, compared to $138,900,000 at December 31, 2023, indicating a significant increase of 34.6%[19] - Total indebtedness, net of deferred loan fees, increased to $185,890,000 as of March 31, 2024, compared to $137,682,000 as of December 31, 2023[42] Cash Flow and Operating Activities - Net cash used in operating activities was $(42,424,000) for the three months ended March 31, 2024, compared to $(41,452,000) in the same period of 2023[25] - Cash and cash equivalents increased to $13,709,000 as of March 31, 2024, up from $11,416,000 at the end of 2023, reflecting a growth of 20.1%[17] - Financing activities provided $47,685 in Q1 2024, up from $43,777 in Q1 2023, with net borrowings under the Credit Agreement amounting to $48,117 compared to $44,700 in the prior year[90] Expenses and Costs - Operating expenses increased by 3% year-over-year, but decreased as a percentage of sales to 27% from 28%[72] - Interest expense rose due to increased average borrowings and higher working capital levels, impacting the Company's financial performance[73] - The company recognized depreciation expense of $2,170,000 for the three months ended March 31, 2024, slightly down from $2,179,000 in the previous year[35] - Stock-based compensation expense for the three months ended March 31, 2024, was $2,005,000, compared to $1,474,000 for the same period in 2023[48] Inventory and Sales - Inventories rose to $228,309,000 as of March 31, 2024, compared to $219,551,000 at December 31, 2023, an increase of 4.0%[17] - Gross profit increased by 10% to $42,418, maintaining a stable gross margin of 31%[76] - Cost of goods sold rose by 7% in line with sales growth, while gross margins remained constant at 31% compared to the same period in 2023[72] Compliance and Regulatory Matters - The Company is in compliance with the terms of the Credit Agreement as of March 31, 2024[46] - The Company voluntarily suspended sales of Dacthal pending review of a narrower label after concerns from USEPA regarding health effects[57] - The FASB issued ASU No. 2023-07 and ASU No. 2023-09, which will impact segment reporting and income tax disclosures, effective after December 15, 2023, and December 15, 2024, respectively[58][59] Shareholder Activities - The company declared cash dividends on common stock of $0.030 per share during the quarter[22] - The Company paid dividends of $834 in Q1 2024, slightly down from $851 in Q1 2023[90] - The Company repurchased 27,835 shares of common stock at an average price of $19.96 during Q1 2024, with a maximum of 557 shares remaining under the repurchase plan[67]

NEWPORT BEACH, Calif.--(BUSINESS WIRE)--American Vanguard Corporation (NYSE: AVD), today announced that it will report financial results for the first quarter ended March 31, 2024, on Thursday, May 9, 2024, after the close of the stock market.Eric Wintemute, Chairman & CEO, David T. Johnson, VP & CFO, and Bob Trogele, EVP & COO, will conduct a conference call focusing on operating performance and financial results at 4:15 pm ET / 1:15 pm PT on May 9, 2024. Interested parties may participate in the call by d ...

Core Insights - American Vanguard Corporation will report its financial results for Q1 2024 on May 9, 2024, after market close [1] - A conference call will be held at 4:15 pm ET / 1:15 pm PT on the same day to discuss operating performance and financial results [1] - The conference call will be accessible via phone and will also be webcast live on the company's website [2] Company Overview - American Vanguard is a diversified specialty and agricultural products company focused on crop protection, nutrition, turf management, and pest control [3] - The company has expanded its operations into 17 countries and holds over 1,000 product registrations in 56 nations [3] - Its growth strategy includes three initiatives: Core Business innovation, Green Solutions with over 130 biorational products, and Precision Agriculture innovation [3] - American Vanguard is listed on the Russell 2000® and Russell 3000® Indexes [3]