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Jun 30, 2023
American Vanguard Q2 2023 Earnings Report
American Vanguard's financial performance declined in Q2 2023 due to industry-wide destocking and increased competition, but the company anticipates a rebound in the second half of the year.
Key Takeaways
American Vanguard reported a decrease in net sales and net income for Q2 2023, which they attribute to a sharp drop in procurement activity across the global agriculture industry as distributors destocked inventory due to high interest rates. They also faced increased competition in Central America and Brazil. The company expects demand to improve in the second half of the year as growers prepare for the 2024 planting season.
Net sales decreased to $132.79 million, compared to $148.203 million in Q2 2022.
The company experienced a net loss of $1.053 million, a significant decline from the $6.830 million net income in Q2 2022.
EPS was reported at -$0.04, down from $0.23 in the same quarter last year.
The company is initiating a share repurchase program, authorized to purchase up to $7.5 million of its common stock.
Revenue by Segment
Revenue by Geographic Location
Forward Guidance
American Vanguard anticipates improved demand in the second half of 2023 and has revised its full-year performance targets.
Positive Outlook
- Stable commodity prices
- Strong farm economy
- Low channel inventory of crop products
- Expected demand improvement as growers prepare for the 2024 planting season
- Share repurchase program authorized, demonstrating confidence in the company's prospects
Challenges Ahead
- Uncertainty regarding the complete cessation of destocking activity
- Revised 2023 performance targets reflect lower expectations
- Global Agriculture industry experienced a sharp, unexpected drop in procurement activity
- Businesses in Central America and Brazil faced a flood of low-priced, generic product from China-based suppliers
Historical Earnings Impact
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Avg. Return Before/After Earnings
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