After releasing its 2Q and mid-year financial results, the management of American Vanguard Corp. (NYSE:AVD) made some important comments. The CEO Eric Wintemute talked about how he sees the future and what he thinks AVD can achieve. Overall, the management has a bullish outlook for AVD.
How did AVD fare in 2Q?
American Vanguard Corp. (NYSE:AVD) generated $72.7 million in net sales in 2Q2016, which indicates an increase of 9% over the same period last year. EPS for the quarter was $0.11, a significant increase from $0.03 a year ago.
What about the mid-year period?
In the first six months of 2016, net sales generated by AVD totaled $142.2 million, a jump of 7% from a similar period last year. EPS in the half-year was $0.21, a remarkable improvement from $0.03 last year.
But the management of American Vanguard Corp. (NYSE:AVD) worked for the results as CEO Wintemute tried to explain in a statement. Wintemute said that disciplined internal controls and external sales initiatives support the gains posted in the two periods under review. The point that Wintemute sought to drive home was that his team managed to drive a 9% topline growth in the quarter despite the widespread headwinds in the agriculture industry.
American Vanguard Corp. (NYSE:AVD) reported higher sales across its product portfolio in the quarter.
As for the bottom-line, Wintemute said that improvement in manufacturing efficiency supported the favorable results as operating costs declined. The decline in costs lifted gross margins that in turn boosted earnings.
What does the future hold for American Vanguard Corp. (NYSE:AVD)?
Wintemute is confident that the future of American Vanguard Corp. (NYSE:AVD) is bright. He cited the prospects in cotton farming market, noting that acreage under cotton this year is 17% larger than the previous year. That should mean strong demand for AVD’s cotton products.
Besides, Wintemute said that American Vanguard Corp. (NYSE:AVD) has continued to strengthen its balance sheet and deepen internal efficiency to preserve cash and boost liquidity. With strong cash position, AVD is finding it easy to expand through acquisitions. The company recently formed a joint-venture that has seen it set up a technology facility in Hong Kong.