American Vanguard Tops in 4Q - Analyst Blog


Specialty chemicals maker American Vanguard Corp. ( AVD ) witnessed a healthy rise in its fourth-quarter 2012 profit on the back of continued strong market demand for its products.

The Newport Beach, Calif.-based company raked in earnings of 39 cents a share in the quarter, which beat the Zacks Consensus Estimate by 4 cents and exceeded the year-ago quarter's earnings of 23 cents.

Profit soared roughly 77% year over year to $11.3 million in the quarter, buoyed by healthy demand of American Vanguard's crop protection products. American Vanguard is leveraging the growing demand for soil insecticides as the U.S. corn growers contend with pest problems.

For full-year 2012, earnings climbed to $1.28 per share from 79 cents per share in 2011, also topping the Zacks Consensus Estimate of $1.22.

Revenues climbed 28% year over year to $104.3 million in the reported quarter, beating the Zacks Consensus Estimate of $101 million.

For the full year, revenues jumped 22% year over year to $366.2 million, backed by strong traction of American Vanguard's Yield Enhancing Solutions (YES). Sales beat the Zacks Consensus Estimate of $363 million.

Gross margin rose to 44% in 2012 from 41% a year ago. Operating expenses for the year climbed 22% year over year to $101.8 million. Operating margin rose to 16.2% in 2012 from 13% in 2011 as a healthy increase in revenues more than offset higher operating costs.

American Vanguard exited 2012 with cash of $38.5 million, up roughly 10% year over year. Total long-term debt increased 39% year over year to $130 million. Operating cash flow for the year rose roughly 3% year over year to $40.4 million.

American Vanguard is optimistic about 2013 and feels that it is well placed to meet the increasing demand for soil insecticides by maintaining full production of its products and proprietary equipment systems. The successful roll out of its herbicide co-marketing program with Monsanto ( MON ) is also expected to support its results.

American Vanguard makes specialty chemical products for agricultural and commercial applications. The company develops and markets an array of chemicals, including insecticides, fungicides and herbicides, for crops, human and animal health protection. American Vanguard has the largest assortment of corn soil insecticides coupled with the most advanced dispensing equipment.

American Vanguard currently carries a Zacks Rank #3 (Hold).

Other companies in the specialty chemicals industry with a favorable Zacks Rank are Novozymes A/S ( NVZMY ) and Penford Corporation ( PENX ). Both hold a Zacks Rank #1 (Strong Buy).

AMER VANGUARD (AVD): Free Stock Analysis Report

MONSANTO CO-NEW (MON): Free Stock Analysis Report

NOVOZYMES A/S (NVZMY): Get Free Report

PENFORD CORP (PENX): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: AVD , MON , NVZMY , PENX

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