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Sep 30, 2023
American Vanguard Q3 2023 Earnings Report
Reported flat quarterly sales despite global destocking, with a rebound expected in Q4 and a transformation plan underway.
Key Takeaways
American Vanguard reported Q3 2023 financial results, showing net sales of $149.5 million, which is in line with the prior year. However, the company experienced a net loss of $325 thousand, a significant decrease compared to the net income of $6.7 million in Q3 2022. The company is implementing a transformation plan to improve future growth, operational efficiency, and profitability.
Q3 sales were in line with the prior year despite global destocking by customers.
Strong sales were recorded for the premier corn soil insecticide Aztec and soil fumigants in the Pacific Northwest.
US non-crop business is seeing more normalized trends in nursery, ornamental, and professional products.
International businesses are still feeling the effects of low-priced generic products in certain regions, especially Central America, while Mexico and Australia remain strong.
Revenue by Segment
Revenue by Geographic Location
Forward Guidance
The company anticipates improved sales and profitability in the fourth quarter as compared to the first nine months of this fiscal year. They are targeting full year 2023 net sales of $580 million - $590 million, a gross margin of 30%-32%, and an adjusted EBITDA of $55 million - $59 million.
Positive Outlook
- Strong sales are being experienced, particularly within the US Crop business early in the fourth quarter.
- Customers are making commitments to qualify for program discounts, including early pay.
- There is stronger US crop demand.
- US non-crop demand is more normalized.
- Commodity prices remain relatively stable.
Challenges Ahead
- International pressure continues.
- The company identified approximately $15 million in operating profit and interest savings.
- Higher interest expense.
- The company is negotiating an expansion of their financial covenants.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
Analyze how earnings announcements historically affect stock price performance
Avg. Return Before/After Earnings
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