<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER
30, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO
-------- --------
COMMISSION FILE NUMBER 0-6354
AMERICAN VANGUARD CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 95-2588080
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification Number)
4695 MacArthur Court, Newport Beach, California 92660
- ----------------------------------------------- -----
(Address of principal executive offices) (Zip Code)
(714) 260-1200
--------------
(Registrant's telephone number, including area code)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
--- ---
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes No
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common Stock, $.10 Par Value -- 2,507,829 shares as of September 30, 1997.
<PAGE> 2
AMERICAN VANGUARD CORPORATION
INDEX
-----
<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION Page Number
-----------
<S> <C>
Item 1.
Financial Statements.
Consolidated Statements of Operations
for the three and nine months ended
September 30, 1997 and 1996 1
Consolidated Balance Sheets
as of September 30, 1997 and
December 31, 1996 2
Consolidated Statements of Cash Flows
for the nine months ended
September 30, 1997 and 1996 4
Notes to Consolidated Financial
Statements 6
Item 2.
Management's Discussion and Analysis of
Financial Condition and Results of
Operations 8
PART II - OTHER INFORMATION 15
SIGNATURE PAGE 16
</TABLE>
<PAGE> 3
PART I. FINANCIAL INFORMATION
- -----------------------------
ITEM 1. FINANCIAL STATEMENTS
AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
For the three months For the nine months
ended September 30 ended September 30
------------------------ ------------------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net sales $16,586,800 $ 9,094,300 $43,133,100 $29,407,400
Cost of sales 11,305,700 5,401,800 26,363,100 18,295,700
---------- ---------- ---------- ----------
Gross profit 5,281,100 3,692,500 16,770,000 11,111,700
Operating expenses 5,376,700 3,419,900 15,015,100 9,797,400
---------- ---------- ---------- ----------
Operating income (loss) (95,600) 272,600 1,754,900 1,314,300
Interest expense (444,500) (230,400) (1,230,900) (687,300)
Interest income 2,400 2,200 9,300 6,600
---------- ---------- ---------- ----------
Income (loss) before
income taxes (537,700) 44,400 533,300 633,600
Income taxes benefit
(expense) 215,100 (17,800) (223,900) (257,000)
---------- ---------- ---------- ----------
Net income (loss) $ (322,600) $ 26,600 $ 309,400 $ 376,600
========== ========== ========== ==========
Net income (loss) per
share $ (.13) $ .01 $ .12 $ .15
========== ========== ========== ==========
Weighted average number
of shares 2,507,829 2,521,862 2,507,829 2,522,006
========== ========== ========== ==========
</TABLE>
See notes to consolidated financial statements.
1
<PAGE> 4
AMERICAN VANGUARD CORPORATION
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, Dec. 31,
ASSETS (NOTE 6) 1997 1996
-------- ------
(Unaudited) (Note)
<S> <C> <C>
Current assets:
Cash $ 591,200 $ 632,400
Receivables:
Trade 20,766,900 16,529,900
Other 180,800 198,800
----------- -----------
20,947,700 16,728,700
----------- -----------
Inventories (note 2) 16,072,300 11,350,300
Prepaid expenses 1,027,000 653,600
----------- -----------
Total current assets 38,638,200 29,365,000
Property, plant and
equipment, net (note 3) 12,928,500 12,927,500
Land held for development 210,800 210,800
Cost in excess of assets
acquired, net 3,351,000 3,532,200
Deferred charges, net 1,569,600 1,660,100
Other assets 256,600 332,700
----------- -----------
$56,954,700 $48,028,300
=========== ===========
</TABLE>
(Continued)
See notes to consolidated financial statements.
2
<PAGE> 5
AMERICAN VANGUARD CORPORATION
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, Dec. 31,
LIABILITIES AND STOCKHOLDERS' EQUITY 1997 1996
------- ------
(Unaudited) (Note)
<S> <C> <C>
Current liabilities:
Current installments of
long-term debt $ 1,240,400 $ 1,160,500
Accounts payable 4,293,500 3,002,300
Accrued expenses 3,110,000 4,750,600
Accrued royalty obligation
current portion 1,600,000 1,600,000
Income taxes payable 152,800 946,200
Legal settlements payable 52,500 52,500
------------ ------------
Total current liabilities 10,449,200 11,512,100
Note payable to bank 18,000,000 7,000,000
Long-term debt, excluding
current installments 3,487,900 4,373,100
Accrued royalty obligation,
excluding current portion 2,777,500 3,062,000
Deferred income taxes 2,695,600 2,695,600
------------ ------------
Total liabilities 37,410,200 28,642,800
------------ ------------
Stockholders' Equity: (note 4)
Preferred stock, $.10
par value per share;
authorized 400,000
shares; none issued -- --
Common stock, $.10 par
value per share;
authorized 10,000,000
shares; 2,564,429
shares issued 256,400 256,400
Additional paid-in
capital 3,879,000 3,879,000
Retained earnings 15,768,000 15,609,000
------------ ------------
19,903,400 19,744,400
Treasury stock at cost
(56,600 shares) (358,900) (358,900)
------------ ------------
Total stockholders' equity 19,544,500 19,385,500
------------ ------------
$ 56,954,700 $ 48,028,300
============ ============
</TABLE>
Note: The balance sheet at December 31, 1996 has been derived from the audited
financial statements at that date (Note 1).
See notes to consolidated financial statements.
3
<PAGE> 6
AMERICAN VANGUARD CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(UNAUDITED)
<TABLE>
<CAPTION>
Increase (decrease) in cash 1997 1996
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income $ 309,400 $ 376,600
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities:
Depreciation and amortization 2,028,700 1,761,700
Changes in assets and liabilities
associated with operations:
Decrease (increase) in receivables (4,219,000) 6,669,600
Increase in inventories (4,722,000) (3,836,200)
Increase in prepaid expenses (373,400) (247,200)
Increase (decrease) in
accounts payable 1,291,200 (1,363,600)
Decrease in other payables
and accrued expenses (2,718,500) (2,837,100)
----------- -----------
Net cash provided by (used in)
operating activities (8,403,600) 523,800
----------- -----------
Cash flows from investing activities:
Capital expenditures (1,669,800) (951,600)
Increase in deferred charges (1,600) (12,000)
Net increase in other
noncurrent assets (10,500) (73,300)
----------- -----------
Net cash used in
investing activities (1,681,900) (1,036,900)
----------- -----------
</TABLE>
(Continued)
See notes to consolidated financial statements.
4
<PAGE> 7
AMERICAN VANGUARD CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS, CONTINUED
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(UNAUDITED)
<TABLE>
<CAPTION>
Increase (decrease) in cash 1997 1996
---- ----
<S> <C> <C>
Cash flows from financing activities:
Net borrowings under line of
credit agreement $ 11,000,000 $ 1,700,000
Increase in long-term debt 47,300 96,600
Principal payments on long-term debt (852,600) (1,024,900)
Acquisition of treasury stock -0- (35,000)
Payment of cash dividends (150,400) (138,000)
------------ ------------
Net cash provided by
financing activities 10,044,300 598,700
------------ ------------
Net increase (decrease)
in cash (41,200) 85,600
Cash at beginning of year 632,400 331,600
------------ ------------
Cash as of September 30 $ 591,200 $ 417,200
============ ============
</TABLE>
On March 15, 1996, the Company distributed 233,058 shares of Common Stock in
connection with a 10% Common Stock dividend to stockholders of record as of
February 29, 1996. As a result of the stock dividend, Common Stock was increased
by $23,300, additional paid-in capital was increased by $2,190,800, and retained
earnings was decreased by $2,214,100 (Note 4).
See notes to consolidated financial statements.
5
<PAGE> 8
AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. The accompanying unaudited consolidated financial statements have
been prepared in accordance with generally accepted accounting
principles for interim financial information and with the
instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for
complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation, have been included. Operating
results for the three and nine-month periods ended September 30,
1997 are not necessarily indicative of the results that may be
expected for the year ending December 31, 1997. For further
information, refer to the consolidated financial statements and
footnotes thereto included in the Company's Annual Report on Form
10-K for the year ended December 31, 1996.
2. Inventories - The components of inventories consist of the following:
<TABLE>
<CAPTION>
Sept. 30, 1997 December 31, 1996
-------------- -----------------
<S> <C> <C>
Finished products $12,634,600 $ 8,108,800
Raw materials 3,437,700 3,241,500
---------- ----------
$16,072,300 $11,350,300
========== ==========
</TABLE>
3. Property, plant and equipment at September 30, 1997 and December 31,
1996, consists of the following:
<TABLE>
<CAPTION>
Sept. 30, December 31,
1997 1996
---- ----
<S> <C> <C>
Land $ 2,382,600 $ 2,382,600
Buildings and improvements 3,822,900 3,812,300
Machinery and equipment 21,409,000 20,677,000
Office furniture and fixtures 1,112,700 1,031,400
Automotive equipment 105,000 105,000
Construction in progress 2,049,400 1,203,500
----------- -----------
30,881,600 29,211,800
Less accumulated depreciation 17,953,100 16,284,300
----------- -----------
$12,928,500 $12,927,500
=========== ===========
</TABLE>
6
<PAGE> 9
AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
4. On March 12, 1997, the Company announced that the Board of Directors
declared a cash dividend of $.06 per share. The dividend was paid on March
31, 1997 to stockholders of record as of March 20, 1997.
In February 1996, the Company announced that the Board of Directors declared
a cash dividend of $.06 per share as well as a 10% stock dividend. Both
dividends were distributed on March 15, 1996 to stockholders of record at
the close of business on February 29, 1996. The cash dividend was paid on
the number of shares outstanding prior to the 10% stock dividend.
5. Earnings Per Share - Earnings per share is computed by dividing net income
by the weighted average number of shares outstanding after giving effect to
the stock dividend described in Note 4 during the respective period.
6. Substantially all of the Company's assets not otherwise specifically pledged
as collateral on existing loans and capital leases, are pledged as
collateral under the Company's credit agreement with a bank. As referenced
in Note 1, for further information, refer to the consolidated financial
statements and footnotes thereto (specifically Note 4) included in the
Company's Annual Report on Form 10-K for the year ended December 31, 1996.
7. Reclassification - Certain items have been reclassified in the prior period
consolidated financial statements to conform with the September 30, 1997,
presentation.
7
<PAGE> 10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
- ---------------------
QUARTER ENDED SEPTEMBER 30:
- ---------------------------
Net sales increased $7,492,500 or 82% to $16,586,800 for the quarter ended
September 30, 1997 from $9,094,300 for the same period in 1996. The reason for
the significant increase in sales is due to the strong demand for certain of the
Company's product lines. Sales of Metam Sodium, PCNB and, to a lesser extent,
Naled and Mevinphos, drove the increase. The increase in Metam Sodium is
attributable to the acquisition of the Vapam(R) product line in December 1996.
PCNB sales increased as the result of the introduction of a new PCNB formula and
an increase in foreign sales (from depressed foreign sales levels the year
before). Sales of Naled were up in the third quarter because of heavy insect
pressure and a concentrated expanded foreign sales effort drove the increase in
Mevinphos sales. In spite of the significant increase in sales, the Company
reported a net loss of $322,600 or a $.13 loss per share for the third quarter
ended September 30, 1997 as compared to net income of $26,600 or $.01 earnings
per share for the same period in 1996. This was a function of a lower gross
profit margin and significant increases in operating expenses which are
discussed below.
Gross profits increased $1,588,600 to $5,281,100 for the three months ended
September 30, 1997 from $3,692,500 for the same period in 1996. In spite of the
increase in overall gross profits, the gross profit percentage declined to 32%
for the quarter ended September 30, 1997 from 41% for the quarter ended
September 30, 1996. The decrease in the gross profit percentage was primarily
attributable to the sales mix of the Company's products and an enhancement of
the Company's PCNB manufacturing facility. The Company invested in an octane
recovery system for the PCNB manufacturing facility which curtailed PCNB
manufacturing for approximately seventy-five days during the quarter ended
September 30, 1997. Based upon historical performance, PCNB manufacturing
operations would have absorbed in excess of one million dollars of manufacturing
costs.
8
<PAGE> 11
The octane recovery system will improve octane recovery and reduce hazardous
waste generation by an estimated $350,000 per year.
Operating expenses, which are net of other income, increased by $1,956,800 to
$5,376,700 for the quarter ended September 30, 1997 as compared to $3,419,900
for the same period in 1996.
The differences in operating expenses by specific departmental costs are as
follows:
o Selling and regulatory expenses increased by $610,100 in the third quarter
of 1997 as compared to the same quarter in the prior year. As noted in the
second quarter, the Company, in order to support and grow the
Vapam(R)product line, made investments in its technical, sales and marketing
infrastructure which included the hiring of additional technical and sales
individuals. These investments accounted for approximately $320,500 of the
increase in selling and regulatory expenses. Due to the significant increase
in sales in the third quarter, product liability insurance increased
$158,700 over the same quarter last year. The balance of the increase was
due primarily to increased variable selling expenses (primarily rebates and
royalties) that relate directly to the increase in sales levels for the
quarter ended September 30, 1997 as compared to the same period in 1996.
o General and administrative expenses increased $604,100 in the third quarter
of 1997 over the same quarter in 1996. The increase was primarily
attributable to an increase in legal fees of approximately $311,400.
Approximately half of this increase, $153,700, was incurred in legal actions
in which the Company is the plaintiff. General and administrative expenses
also increased in 1997 due to the amortization of goodwill purchased in
connection with the acquisition of the Vapam(R)product line in December 1996
in the amount of $78,800. The balance of the increase in general and
administrative expenses during the third quarter of 1997 resulted from the
hiring of an executive officer in the fourth quarter of 1996 and increases
in environmental related consulting expenses.
9
<PAGE> 12
o Research and development expenses increased $104,700 in the third quarter of
1997 primarily due to an increase in costs incurred to generate scientific
data related to registration of the Company's products. This increase is
primarily attributable to an increase in research and development costs in
connection with Mevinphos products of $69,500, Bidrin(R) products of $67,800
and Metam Sodium products of $69,900 offset by decreases in research costs
for NAA products of $100,400 and DDVP products of $10,300.
o Shipping and receiving costs increased by $670,200 in the third quarter of
1997 primarily due to the increased volume of Metam Sodium (Vapam(R)) sales
which resulted in increased shipping and storage costs.
Interest costs were $444,500 during the three months ended September 30, 1997 as
compared to $230,400 for the same period in 1996. The average level of borrowing
under the Company's line of credit agreement was $16,527,700 for the third
quarter of 1997 as compared to $4,687,000 for the same period in 1996. The
average level of long-term debt was $4,844,300 for the third quarter of 1997 as
compared to $6,069,000 for the same period in 1996. On a combined basis, the
Company's average debt for the third quarter of 1997 was $21,372,000 as compared
to $10,756,000 for the third quarter of 1996. With interest rates fairly stable
and comparative during the third quarter of 1997 as compared to the third
quarter of 1996, the significantly higher debt level in 1997, almost twice the
1996 level, resulted in the significant increase in interest expense in the
third quarter of 1997.
Weather patterns can have an impact on the Company's operations. Weather
conditions influence pest population by impacting gestation cycles for
particular pests and the effectiveness of some of the Company's products, among
other factors. The end user of some of the Company's products may, because of
weather patterns, delay or intermittently disrupt field work during the planting
season which may result in a reduction of the use of some of the Company's
products.
Because of elements inherent to the Company's business, such as differing and
unpredictable weather patterns, crop growing cycles, changes in product mix of
sales, ordering patterns that may vary in timing, and promotional/early order
programs, measuring the Company's performance on a quarterly basis, (gross
10
<PAGE> 13
profit margins on a quarterly basis may vary significantly) even when such
comparisons are favorable, is not as meaningful an indicator as full-year
comparisons. Because most of the Company's cost structure is fixed, at least in
the short-term, the combination of variable revenue streams, changing product
mixes, and a fixed cost structure results in varying quarterly levels of
profitability.
NINE MONTHS ENDED SEPTEMBER 30:
- -------------------------------
The Company reported net income of $309,400 or $.12 per share for the nine month
period ended September 30, 1997 as compared to net income of $376,600 or $.15
per share for the same period in 1996. Net sales increased $13,725,700 or 47% to
$43,133,100 for the nine months ended September 30, 1997 from $29,407,400 for
the same period in 1996. The increase, most of which occurred in the second and
third quarters, was due to the strong demand for certain of the Company's
product lines during these periods. Sales of Metam Sodium and to a lesser
extent, Bidrin(R), Mevinphos and Naled drove the increase. With the exception
Bidrin(R), which benefited from changing weather conditions and related insect
pressures in the Southern U.S., the factors that drove the product sales
increases were the same factors (previously disclosed) that drove the third
quarter ended September 30, 1997.
Gross profits increased $5,658,300 to $16,770,000 for the first nine months of
1997 from $11,111,700 for the same period in 1996. The gross profit margin for
the nine months ended September 30,1997 improved to 39% as compared to 38% for
the same period in 1996. Although certain factors caused a significant decline
in the gross profit percentage during the three months ended September 30, 1997
as described above, the significantly greater sales volume during the nine
months ended September 30, 1997 (as compared to the same period in 1996) had a
proportionately greater positive impact on gross profits as costs of sales did
not increase at the same level as a result of relatively constant fixed overhead
levels. Accordingly, in spite of the factors negatively impacting gross profit
in the third quarter of 1997, the increase in sales volume served to increase
the Company's gross profit percentage (an increase of 1%) for the nine months
ended September 30, 1997.
Operating expenses increased by $5,217,700 to $15,015,100 for the first nine
months of 1997 from $9,797,400 for the same period in 1996.
11
<PAGE> 14
The differences in operating expenses by specific departmental costs are as
follows:
o Selling and regulatory expenses increased by $2,126,600 during the nine
months ended September 30, 1997. The Company, in order to support and grow
the Vapam(R)product line, made investments in its technical, sales and
marketing infrastructure which included the hiring of additional technical
and sales individuals. These investments accounted for approximately
$754,500 of the increase in selling and regulatory expenses. Due to the
significant increase in sales during the nine months ended September 30,
1997, product liability insurance increased $273,400 over the same quarter
last year. The balance of the increase was due primarily to increased
variable selling expenses (primarily rebates and royalties) that relate
directly to the increase in sales levels for the nine months ended September
30, 1997 as compared to the same period in 1996.
o General and administrative expenses increased $1,755,000 in the first nine
months of 1997. The increase was primarily attributable to an increase in
legal fees of approximately $906,000. Most of this increase, approximately
$703,000, was incurred in legal actions in which the Company is the
plaintiff. General and administrative expenses also increased in 1997 due to
the amortization of goodwill purchased in connection with the acquisition of
the Vapam(R) product line in December 1996 in the amount of $238,900. The
balance of the increase in general and administrative expenses during the
nine months ended September 30, 1997 resulted from increases in
environmental related consulting expenses and the hiring of an executive
officer in the fourth quarter of 1996.
o Research and development expenses increased $418,100 in the first nine
months of 1997 primarily as a result of increased costs incurred to generate
scientific data related to the registration of the Company's products. This
increase is primarily attributable to an increase in research and
development costs in connection with DDVP products of $522,800, Mevinphos
products of $210,500 and Metam Sodium products of $91,200 offset by
decreases in research costs for NAA products of $336,200 and
Bidrin(R)products of $81,600.
12
<PAGE> 15
o Shipping and receiving costs increased by $939,600 during nine months ended
September 30, 1997 primarily due to the increased volume of Metam Sodium
(Vapam(R)) sales which resulted in increased shipping and storage costs.
Interest costs were $1,230,900 during the nine months ended September 30, 1997
as compared to $687,300 for the same period in 1996. The average level of
borrowing under the Company's line of credit agreement was $14,376,000 for the
first nine months of 1997 as compared to $4,159,000 for the same period in 1996.
The average level of long-term debt was $5,124,100 for the nine months ended
September 30, 1997 as compared to $6,334,000 for the same period in 1996. On a
combined basis, the Company's average debt for the nine months ended September
30, 1997 was $19,500,100 as compared to $10,493,000 for the first nine months of
1996. The significant increase in overall debt for the nine months ended
September 30, 1997 was the reason for the increase in interest costs.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
Working capital was $28,189,000 at September 30, 1997 reflecting an increase of
$10,336,100 over working capital of $17,852,900 at December 31, 1996. The
increase in working capital was primarily due to the build up of inventories
during the first nine months of 1997 and the increase in sales in the third
quarter of 1997 that resulted in a significant increase in receivables as of
September 30, 1997. The net increase in inventories during the nine months ended
September 30, 1997 was $4,219,000 and the net increase in receivables as of
September 30, 1997 was $4,722,000. Also contributing to the increase in working
capital was an increase in prepaid expenses of $373,400. The increase in working
capital was primarily funded by increased borrowings under the Company's
long-term line of credit in the amount of $11,000,000. Those funds, along with
cash flows of $309,400 generated by net income and $2,028,700 generated by
depreciation and amortization, not only funded the increase in working capital,
but also funded a reduction of accounts payable and accrued expenses of
$1,427,300 and other long-term debt and capital leases in the amount of $852,600
and payments for capital improvements of $1,669,800 and cash dividends of
$150,400.
The Company had $2,500,000 in availability under its fully-secured $20,500,000
long-term line of credit as of September 30, 1997,
13
<PAGE> 16
a decrease of $6,000,000 from the amount available as of December 31, 1996.
Through July 30, 1997, the Company also had available, under a separate
long-term acquisition line of credit, $5,000,000. Effective July 31, 1997 the
acquisition line of credit was eliminated and the existing long-term line of
credit was increased by $5,000,000 increasing the maximum amount available under
the Company's long-term line of credit to $20,500,000. On July 31, 1997, the
expiration date of the Company's line of credit agreement was extended to July
31, 1999.
Management continues to believe, to continue to improve its working capital
position and maintain flexibility in financing interim needs, it is prudent to
explore alternate sources of financing.
The Company, from time to time, may discuss forward-looking information. Except
for the historical information contained in this report, all forward-looking
statements are estimates by the Company's management and are subject to various
risks and uncertainties that may cause results to differ from management's
current expectations. Such factors include weather conditions, changes in
regulatory policy and other risks as detailed from time to time in the Company's
SEC reports and filings. All forward-looking statements, if any, in this report
represent the Company's judgment as of the date of this report. The Company
disclaims, however, any intent or obligation to update forward-looking
statements.
14
<PAGE> 17
PART II. OTHER INFORMATION
The Company was not required to report any matters or changes for any items of
Part II except as disclosed below.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
(a) Exhibits
Exhibit 27 - Financial Data Schedule
(b) The Company did not file any reports on Form 8-K during the three months
ended September 30, 1997
15
<PAGE> 18
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AMERICAN VANGUARD CORPORATION
Dated: November 13, 1997 By: /s/ E. G. Wintemute
-------------------------------
E. G. Wintemute
President
Chief Executive Officer,
and Director
Dated: November 13, 1997 By: /s/ J. A. Barry
-------------------------------
J. A. Barry
Vice President,
Chief Financial Officer,
Treasurer and Director
16
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 591,200
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<PP&E> 30,881,600
<DEPRECIATION> 17,953,100
<TOTAL-ASSETS> 56,954,700
<CURRENT-LIABILITIES> 10,449,200
<BONDS> 22,728,300
0
0
<COMMON> 256,400
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<TOTAL-LIABILITY-AND-EQUITY> 56,954,700
<SALES> 43,133,100
<TOTAL-REVENUES> 43,133,100
<CGS> 26,363,100
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<OTHER-EXPENSES> 15,015,100
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<INCOME-TAX> 223,900
<INCOME-CONTINUING> 309,400
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<NET-INCOME> 309,400
<EPS-PRIMARY> .12
<EPS-DILUTED> .12
</TABLE>
