American Vanguard Corporation (AVD) has reported a 23.55 percent rise in profit for the quarter ended Mar. 31, 2017. The company has earned $3.45 million, or $0.12 a share in the quarter, compared with $2.79 million, or $0.10 a share for the same period last year.

Revenue during the quarter went up marginally by 1.73 percent to $70.67 million from $69.47 million in the previous year period. Gross margin for the quarter expanded 298 basis points over the previous year period to 42.57 percent. Total expenses were 92.74 percent of quarterly revenues, down from 93.34 percent for the same period last year. This has led to an improvement of 60 basis points in operating margin to 7.26 percent.

Operating income for the quarter was $5.13 million, compared with $4.63 million in the previous year period.

Eric Wintemute, chairman and chief executive officer of American Vanguard commented, "Our overall financial performance for the quarter improved, as we continued to benefit from our participation in diverse crops and pest control applications. Net sales increased during the period, driven by our portfolio's strong performance in cotton, peanuts, sugar crops, fruits and vegetables and in non-crop uses. Sales of our corn soil insecticides were flat, despite reduced corn acres and corn commodity pricing. Further, while we saw reduced demand for our corn herbicide due to delayed planting and competitive market conditions, we recorded significantly improved sales in the southern cotton market, driven by this year’s rise in cotton acreage and the expectation of higher pest pressure from foliar insects."

The company has spent $3.38 million cash to meet investing activities during the quarter as against cash outgo of $4 million in the last year period.

The company has spent $10.99 million cash to carry out financing activities during the quarter as against cash outgo of $3.25 million in the last year period.

Cash and cash equivalents stood at $10.79 million as on Mar. 31, 2017, up 36.33 percent or $2.88 million from $7.92 million on Mar. 31, 2016.

Working capital declines

American Vanguard Corporation has witnessed a decline in the working capital over the last year. It stood at $126.02 million as at Mar. 31, 2017, down 22.56 percent or $36.71 million from $162.73 million on Mar. 31, 2016. Current ratio was at 2.32 as on Mar. 31, 2017, down from 2.70 on Mar. 31, 2016.

Cash conversion cycle (CCC) has decreased to 191 days for the quarter from 363 days for the last year period. Days sales outstanding went down to 97 days for the quarter compared with 106 days for the same period last year.

Days inventory outstanding has decreased to 136 days for the quarter compared with 305 days for the previous year period. At the same time, days payable outstanding went down to 41 days for the quarter from 47 for the same period last year.