American Vanguard thriving in a struggling economy

Paul Clinton

In a world of debt-laden technology companies slowly slouching toward

profitability, local agricultural products supplier American Vanguard

Corp. has again set itself on the other side of the ledger.

American Vanguard, which trades on the American Stock Exchange

under the symbol AVD, has announced robust earnings driven by a

string of acquisitions. The earnings release came Thursday.

The Newport Beach-based company grew sales 20% during its fourth

quarter and 21% during its fiscal year 2002, both of which ended Dec.

31.

“We are pleased with the results for the fourth quarter,

historically our strongest period, and the year as a whole,” said

Eric Wintermute, president and chief executive. “We more than met our

previously announced goals for 2002, which were to grow sales by at

least 10% and achieve a more rapid increase in earnings.”

American Vanguard, which produces and markets a range of

insecticides and other chemicals to protect crops and turf from bugs,

also said fourth-quarter sales jumped to $31.4 million, from $21

million during fourth quarter 2001.

Net income, after taxes, depreciation and other expenses, came in

at $3.4 million, or 83 cents per share, which was a 23% increase from

the previous quarter.

The company toasted another profitable year, logging $7.04 in

profit, or $1.74 per diluted share, in 2002. Profitability grew 25%,

from the $5.6 million in profit for 2001.

Wintermute attributed the strong quarter and year, in part, to the

company’s “basic growth strategy,” which involves purchasing

additional product lines.

In 2002, American Vanguard acquired Syngenta Crop Protection’s

Ambush 25WP, an insecticide, and cotton defoliant Folex from Aventis

CropScience.

In the first two months of this year, the company continued its

buying spree, purchasing Syngenta’s cranberry herbicide Evital 5G and

Pace International’s Pre-Harvest Crop Protection line.

American Vanguard closed out 2002 in a solid cash position,

holding $27.8 million in working capital. The company’s

debt-to-equity ratio, which is often used by Wall Street analysts to

gauge a company’s financial footing, came in at 85 cents in debt to

$1 in equity.

The good news sparked a buying rally in the stock, which rose 6.5%

on Thursday. It closed out Friday with another solid gain of 2.28%,

to finish the week at $22.45.