American Vanguard Corporation · NYSE:AVD
American Vanguard — Q2 2024 Earnings Presentation
30 slides from American Vanguard's earnings presentation, Aug 8, 2024
Slide 1: Q2 2024 Earnings Call
Q2 2024 Earnings Call August 8, 2024
Slide 2: Corporate Representatives in Attendance
Corporate Representatives in Attendance Tim Donnelly……………………………………….Acting Chief Executive Officer Mark Bassett …………………………………..……………………… Board Member David Johnson ……………………………...……………… Chief Financial Officer Mason Bennett…………………………..Vice President, North American Crop Anthony Young …………………………..…………
Slide 3: Safe Harbor Statement
Safe Harbor Statement During this presentation, the Company may discuss forward-looking information. Except for the historical information contained in this release, all forward-looking statements are estimates by the Company’s management and are subject to various risks and uncertainties that may c
Slide 4: Office of CEO (OCEO) Interim Responsibilities
Office of CEO (OCEO) Interim Responsibilities 4
Slide 5: OCEO Interim Responsibilities
OCEO Interim Responsibilities 5
Slide 6: Meeting Overview
Meeting Overview Q2 2024 Financial Outcome (Tim Donnelly) Q2 2024 Results Liquidity Initiatives and Transformation Acceleration (Mark Bassett) Mark Bassett Introduction Transformation Blueprint for 2H2024 Liquidity Initiatives Transformation Initiatives CFO Assessment of the Quarter
Slide 7: Q2 2024 Outcome
AMERICAN VANGUARD Q2 2024 Outcome
Slide 8: Q2 2024 Financial Results
Q2 2024 Financial Results 2Q24 2Q23 1H24 1H23 Revenue $128.2 M $132.8 M $263 M $258 M Adjusted EBITDA $6.2 M $10.7 M $21.7 M $22.2 M Adjusted EBITDA 4.8 % 8.1 % 8.2% 8.6% Margin 8
Slide 9: Q2 2024 Sales Results
Q2 2024 Sales Results 2Q24 2Q23 1H24 1H23 U. S. Crop $52.3 M $56.2 M $120 M $118 M U. S. Non-Crop $19.0 M $16.9 M $36.8 M $30.8 M Total U. S. $71.3 M $73.1 M $156 M $149 M International $56.9 M $59.7 M $107 M $109 M Total Net Sales $128 M $133 M $263 M $258 M Green Solutions* $15.6 M $13.6 M $30.7 M
Slide 10: Liquidity Initiatives and Transformation Acceleration
Liquidity Initiatives and Transformation Acceleration 10
Slide 11: Mark Bassett, Ph.D. Background
Mark Bassett, Ph.D. Background AVD Board Member for Two Years Consulted to Develop Transformation Plan in ’23 Board Liaison on Transformation 1H24 Working Full-Time on Special Assignment Since June to Accelerate Transformation and Work With Team to Improve Liquidity Six Years as Chairman &
Slide 12: Transformation Blueprint for 2H24
CASH GENERATION Transformation EBITDA IMPROVEMENT Blueprint for 2H24 Cultivate Our People Improve Liquidity Accelerate Transformation Drive Excellence Strengthen Communication Lower Year-End Inventory Identify Value Creation Opps Safety 1. Increase Engagement to Support 1. Improve Forecast Accuracy
Slide 13: Liquidity Initiatives
Liquidity Initiatives Action SIMPAS Partner Inventory Management (Reduction vs YE 2023) Spending Reduction 13
Slide 14: Transformation Initiatives
Transformation Initiatives Action Approximate Annualized Benefit Organizational Redesign $3 M Raw Materials and Logistics Procurement $3 M Manufacturing Efficiency $1 M SKU Rationalization $1 M Pricing and Customer-Centric Strategies $5 M International Improvement $2 M Total $15M 14
Slide 15: CFO Comments
AMERICAN VANGUARD CFO Comments
Slide 16: New Credit Agreement Features
New Credit Agreement Features Debt-to-EBITDA Covenant Relaxed Through Q3 2025 Expands Basket of Non-Recurring Charges from Adjusted EBITDA Increases Interest (25 bps) When Debt-to-EBITDA Covenant Rises Above 4.0X Requires Lender Consent for Share Repurchase, Dividends and Acquisitions 16
Slide 17: Q2 2024 Sales ($000's)
Q2 2024 Sales Overall sales Q2 2024 $128M vs $133M in 2023 (down -3.4%), International 45.0% of total in Q2 2023 vs 44.4% of total in 2024 $70,000 Net Sales, 3 months Ended Jun 30, 2024 & 2023 $59,700 $60,000 $56,212 $56,909 $52,290 $50,000 U.S. Crop Down -7% U.S. Non-Crop Up 13% $40,000 Internation
Slide 18: 1H 2024 Sales ($000's)
1H 2024 Sales Overall sales H1 2024 $263M vs $258M in 2024 (up 2.8%) International 42.2% of total in H1 2023 vs 41.0% of total in 2024 Net Sales, 6 months Ended Jun 30, 2024 & 2023 $140,000 $119,542 $118,105 $120,000 $107,023 $108,810 $100,000 U.S. Crop Up 1% $80,000 U.S. Non-Crop Up 20% Internation
Slide 19: Q2 2024 Gross Profit
Q2 2024 Gross Profit ($000’s) 2024 2023 Change U.S. Crop $ 52,289 $ 56,212 -7% U.S. Non-Crop $ 19,011 $ 16,878 13% U.S. $ 71,300 $ 73,090 -2% International $ 56,909 $ 59,700 -5% Total Net Sales $ 128,209 $ 132,790 -3% Total Cost of Sales $ (90,446) $ (89,881) 1% Total Gross Profit $ 37,763 $ 42,909
Slide 20: 1H 2024 Gross Profit
1H 2024 Gross Profit ($000’s) 2024 2023 Change U.S. Crop $ 119,542 $ 118,105 1% U.S. Non-Crop $ 36,787 $ 30,759 20% U.S. $ 156,329 $ 148,864 5% International $ 107,023 $ 108,810 -2% Total Net Sales $ 263,352 $ 257,674 2% Total Cost of Sales $ (183,171) $ (176,230) 4% Total Gross Profit $ 80,181 $ 81
Slide 21: Q2 2024 Operating Expenses
Q2 2024 Operating Expenses Operating Expenses are 36.6% of Sales in 2024 vs 29.5% in 2023 $45,000 $40,000 $39.2MM $37.6MM $35,000 $30,000 $25,000 $20,000 $15,000 $9.3MM $10,000 $5,000 $0 2024 2023 OPEX Transformation Cost 21
Slide 22: 1H 2024 Operating Expenses
1H 2024 Operating Expenses Operating Expenses are 31.6% of Sales in 2024 vs 28.9% in 2023 $80,000 $74.4MM $72.8MM $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 $10.5MM $10,000 $0 2024 2023 OPEX Transformation Cost 22
Slide 23: Inventory as a Percentage of Sales (TTM)
Inventory as a Percentage of Sales (TTM) 50% 45% 44% 42% 42% 40% 38% 39% 37% 35% 34% 30% 25% 20% 15% 10% 5% 0% Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 23
Slide 24: Financial Target Update
Yd AMERICAN 1 VANGUARD Financial Target Update
Slide 25: FY 2024 Target Update
FY 2024 Target Update Current Target Previous Target Adjusted EBITDA $40 – $50 M $60 – $70 M Revenue Down 2% to Flat Up 6 – 9 % 25
Slide 26: CEO Search Status
AMERICAN VANGUARD CEO Search Status
Slide 27: CEO Search Status
CEO Search Status Working with Kincannon & Reed, a Premier Executive Search Firm Board of Directors Search Team Reviewing Lists of Candidates Candidates Must be Equipped to Move Transformation Forward Must Advance a Culture of Teamwork, Transparency, Focus, and Performance Updates Forthcom
Slide 28: Closing Remarks
AMERICAN VANGUARD Closing Remarks
Slide 29: Moving with Urgency
Moving with Urgency Formed OCEO to Kickstart Liquidity and Transformation Initiatives Reset Credit Agreement to Ensure Ample Liquidity Implemented Cost Reduction/Cash Enhancement Efforts Driving Transformation to Get to 15% Adj EBITDA Margin by FY 2026 Searching for New CEO 29
Slide 30: Questions
Questions ® 3 0