American Vanguard. Providing the Means to Safe, Efficient & Abundant Agriculture Worldwide

Transcription

1 American Vanguard Providing the Means to Safe, Efficient & Abundant Agriculture Worldwide August 2016

2 Safe Harbor Statement This presentation contains, in addition to historical information, forward-looking statements. Such statements are based on management s current expectations and are subject to a number of uncertainties and risks that could cause actual results to differ materially from those described in the forward-looking statements. Factors that may cause such a difference include, but are not limited to, those described in the Company s Annual Report, on Form 10-K, and in other SEC filings. 2

3 Global Demand Drivers: Population growth Disposable income growth Global Supply Drivers: Land Water resource availability Yield enhancement practices Weather Industry Overview Commodity Price consequences: Grower Profitability Input channel procurement patterns Technology Changes: Genetically modified crops Biological methods vs. chemical crop protection 3 3

4 Industry Overview Industry Participant Consolidation: Dow Dupont Syngenta ChemChina FMC Chemenova Monsanto Bayer or BASF? Platform Chemtura, Arysta Industry Peer Performance: 2015 Rev Down 12% AVD down 3% 1H2016 Rev Down 8% AVD up 7% 4 4

5 AMVAC Overview Founded in 1969; Traded on NYSE (350 employees) Fully integrated company operation, excluding basic R&D Business Model: Develop, manufacture and market a diverse group of specialty and agricultural products Mission: Enhance agricultural productivity and safeguard public health Growth Focus: Acquire/license branded niche products Reinvent core products by identifying new opportunities License new, active ingredients and product technologies Strengthen capabilities to develop, reformulate, market, sell & service products internationally and fully exploit our domestic manufacturing capabilities 5 5

6 Proven Acquisition Experience 6 Phosdrin Mevinphos (DuPont) 1989 Dibrom (ex-us) (Chevron) 1991 Bidrin Dicrotophos (DuPont) 1993 Vapam Metam Sodium (Zeneca) 1996 Dibrom Naled (US) (Valent) 1998 Dacthal DCPA (Zeneca) 2000 Ambush, Prelude Permethrin (Syngenta) 2006 Evital Norflurazon (Syngenta) 2003 Deadline Metaldehyde (Pace) 2003 Axis Plant (DuPont) 2001 Lock N Load System (BASF) 2006 Ambush 25WP Permethrin (Syngenta) 2002 Counter Terbufos (BASF) 2006 Orthene Acephate (Valent) 2008 Nuvan DDVP (Novartis AH) 2003 Avenge Difenzoquat (BASF) 2005 Impact Topramezone (BASF) 2005 Lorsban (Dow) 2006 Aztec (ATB) (Bayer) 2000 Folex Tribufos (Aventis) 2002 SmartBox System (Dupont) 2000 Hivol 2,4-D (Pace) 2003 E-Z Load System (UAP) 2007 Marsing Plant (Bayer) 2008 Terraclor PCNB (Chemtura) 2007 Hannibal Plant (BASF) 2007 Thimet Phorate (BASF) 2005 Fruitone NAA (Rhone Poulenc) 1991 Fortress Chorethoxyfos (DuPont) Tribufos International (Bayer) 2011 Mocap Nemacur Aztec (bag) (Bayer) 2010 Def (Bayer) 2010 Bti Briquets (Summit) 2012 TyraTech Venture (Envance Technologies) 2013 Nemacur (Adama) 2015 Hyvar (DuPont) 2015 Krovar (DuPont) Scepter (BASF) 2015

7 Diversified Crop Participation 6% 3% 4% 2015 $289 Million 26% 7% 11% 22% 21% Fruit & Vegetables Corn Potatoes Specialty Cotton Peanuts Sugar Crops Other 7 7

8 Major Opportunity U.S. Corn Strong Demand - 2 Major Challenges Glyphosate Resistant Weeds Root Nibbling Soil Insects AMVAC Solutions IMPACT Herbicide Monsanto Co-promotion Corn Soil Insecticide SmartBox Application RESULT: Yield Enhancement Solutions 8 8

9 The Problem Glyphosate Resistance WITH 9 9

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12 Granular Soil Insecticides AZTEC 2.1% Terbufos (AMVAC) Chlorethoxyfos + Bifenthrin (AMVAC) Tebupirimphos + cyfluthrin (Bayer) The Simple, Safe, Superior choices for granular products MOCAP Ethoprophos THIMET 20G NEMACUR Fenamiphos Tefluthrin (Syngenta) Phorate (AMVAC) 12 12

13 Amvac s Closed Delivery Systems SmartBox / Lock n Load / EZ-Load / Ultima The only patented computer-controlled returnable, refillable granular delivery system, with an electronic application meter, which accurately dispenses product at low rates. Additional conveniences include real-time tractor cab information & control, record-keeping and data download capabilities

14 Yield Advantage of Soil Applied Insecticides University and On-Farm Demo Trials NE, SD, IA, IL, IN, MN, WI, OH ( ) Bu/A Increase (5) (10) Overall Average Increase +8.2 Bu/A One Third Trials Average Increase +20 Bu/A Number of Comparisons 14 14

15 Quality Control All Season Long 15 15

16 AMVAC s Potato Portfolio Above Ground Application Seed Treatment - Rejuvenate Insecticides - Ecozin Plus - Ambush Slug & Snail - Deadline Fungicide - Blocker Insect Control in Buildings and Equipment - Nuvan Insect Shield Sprout Control - SmartBlock Soil Preparation Planting Growing Season Harvest Post Harvest Soil Fumigation - Vapam - K-Pam Insecticides - Thimet - Mocap Fungicides - Blocker Insecticides - Thimet Below Ground Application 16 16

17 Sugar Crops Sugarcane Sugar beets Controls wireworm in sugarcane to optimize stands and sugar yield. Controls sugar beet root maggot which is a key pest for sugar beets

18 High Strength Granular Products SmartBox / Lock N Load Systems 5G 15G 4.67G 9.34G Important Products for SIMPAS 18 18

19 What is SmartBox? The most advanced granule application system available Patented, closed-container transfer and application system for pesticides The sealed transfer-container is returnable and refillable. The on-planter base-container contains a locking valve system which enables contact-free product transfer The electronic meter replaces the conventional mechanical meter for accurate product dispensing All three components work together with a cab mounted computer to create the SmartBox System 19

20 TM Smart Integrated Multi-Product Precision Application System 20

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22 Precision Ag Market Segment is Growing Global Precision Ag Market Estimated Growth Market Size USD $2,761 Million 2015 USD $4,799 Million 2020 Source: Precision Farming Market Global Forecast to 2020, MarketsandMarkets, January, 2016 MarketsandMarkets is the second-largest market research firm worldwide in terms of premium market research reports published annually. Double-Digit Growth Forecast for Precision Farming, Prescriptive Application, & At-Plant/In-Furrow Application Segments

23 Proprietary Precision Technology 23

24 Innovation Path Eliminates Worker Exposure Insecticide Only Precision Application of Chemical Accurately delivers constant rate of one product along entire length of seed furrow Creates analog application record for Farmer Meets EPA Closed System Requirements Reduces Environmental Impact All types of Products: Fungicides, micronutrients, stimulants, inoculants, insecticides, biologicals Prescription Application & Data Recording Synchronized, variable-rate delivery of multiple products, precision-placed in close proximity with individual seeds. Works collaboratively with prescriptive ag recommendations to create electronic asapplied maps Exceeds Regulatory Requirements 24

25 USA Crop-Specific Unmet/Under-Satisfied Needs Corn Soybeans Cotton Potatoes Sugar Beets Peanuts Nematode Control Nematode Control Nematode Control Nematode Control Nematode Control Nematode Control Primary Opportunities Needs Seed & Seedling Disease Management Corn Rootworm & Unstacked (non-bt) Corn- Focused Solution Germination Aids (Absorbent Materials, etc.) Other Soil Pest Control Plant Health Stimulants Seed & Seedling Disease Management Early Season Insect Control Germination Aids (Absorbent Materials, etc.) Plant Health Stimulants Seed Inoculants Seed & Seedling Disease Management Early Season Insect Control Plant Health Stimulants Seed & Seedling Disease Management Early Season Insect Control Plant Health Stimulants Seed & Seedling Disease Management Early Season Insect Control Seed & Seedling Disease Management White Mold Early Season Insect Control Limb Rot Seed Inoculants Secondary/Micro Nutrients Secondary/Micro Nutrients Secondary/Micro Nutrients Secondary/Micro Nutrients Secondary/Micro Nutrients Secondary/Micro Nutrients Iron Zinc Manganese Sulfur Boron Iron Manganese Molybdenum Sulfur Zinc Boron Iron Manganese Molybdenum Sulfur Zinc Iron Boron Zinc Boron Iron Manganese Sulfur Boron Manganese Sulfur Source: Context Network Market Estimates & Analysis 25

26 Market Opportunities Crops All row crops Corn Sugarcane Peanuts Potatoes Sugar beets Soybeans Cotton etc. Geographies US Brazil/Argentina China Eastern Europe UK, EU Canada Australia Large farms, technology adaptors Heavily regulated Lack of Alternatives 26 26

27 Expansion Potential Today: SIMPAS Targeted Crops, USA-only Corn, Cotton, Soybeans Peanuts, Potatoes, Sugar Beets USA Opportunity & Only 6 Crops Intermediate Term: SIMPAS 2.0 Additional USA Crops & ex-usa Regions Brazil, Canada, China Australia, EU, India Global Opportunity & More Crops Tremendous potential other crops & regions, but initial commercialization limited to prescriptive at-plant opportunities in 6 USA crops. Source: Context Network Market Estimates & Analysis 27

28 Five Pillars of AMVAC s Growth Asia/Pacific Hong Kong Joint Venture Partnerships Brand Acquisitions Hyvar & Krovar Biologicals BiPA Strategic Alliances Key to our Growth Licensing Technology Organic Growth Scepter Precision Application Fruits & Vegetables SIMPAS 28

29 Growth Themes Integrated Pest Management - Genetic / Chemical / Biological Acquisition/Licensing/Development Model Pro-Active Innovative Liquid & High Concentration Treatments Prescription Planting Equipment Enabling Technology International Market Access - Global Penetration Consumer/Public Health - Eco-Friendly Pesticide Offerings 29 29

30 Made in America Los Angeles, CA Axis, AL Hannibal, MO 30 Marsing, ID 30

31 Innovation Platform 31

32 2015 & Rolling 12 Months to June 2016 Financial Performance Run Rate Manufacturing Cost Reduction $6M $3M OPEX Change $8M $1M Inventory Reduction $30M $14M Debt Reduction $30M $48M Acquisitions Funded $37M Cash Flow Improvement Y-O-Y $112M $60M 32 32

33 1H Results Change Revenue $142.2 $133.1 $+9.1MM Net Income $6.0 $0.8 $+5.2MM EPS $0.21 $0.03 $0.18 Inventory (6/16) $151MM (6/15) $165MM $-14.0MM Debt (6/16) $50MM (6/15) $98MM $-48.0MM Operating Expense (6/16) $49.2MM (6/15) $48.3MM $+0.9MM (approx 100MM Run-rate) 33 33

34 OPEX Reduction $120 $115 $118 Millions $110 $108 $105 $100 $100 $100 $105 - $100 $95 $ Target

35 Inventory Trend $180.0 $160.0 $140.0 $120.0 Millions $100.0 $80.0 $60.0 $40.0 $20.0 $ ACTUAL 2015 ACTUAL 2016 TARGET 35

36 Debt to Equity Ratio $300,000 $2.50 $250,000 $2.00 Shareholder's Equity ($K) $200,000 $150,000 $100,000 $50,000 $0.35 $0.37 $0.35 $0.23 $0.20 $0.38 $0.25 $0.18 $1.50 $1.00 $0.50 $ /30 Shareholder's Equity Debt 36 $0.00

37 Shareholder Equity Growth 80% Increase since 2009 Greater than 9% Annual Compounded Growth $300 $250 $200 Millions $150 $100 $50 $- 37

38 International Expansion will come from Future growth coming from building market access operations through alliances Canada Office AMVAC Chemical UK Ltd.* AMVAC Switzerland GmbH* France Office Quimica AMVAC de Mexico* AMVAC de Costa Rica* AMVAC do Brasil Representações LTDA* AMVAC Netherlands BV* *Subsidiaries 38

39 Asia / Pacific Initiative Objective: Facilitate technology access and market access Platform for Collaboration: Technology development Securing product registrations Co-marketing of each partner s crop protection products and equipment systems Funding product acquisition/licensing opportunities Potential co-manufacturing arrangements 39

40 International Millions $90.0 $80.0 $70.0 $60.0 $50.0 $40.0 $30.0 $20.0 $10.0 $ Established International Subsidiary AMVAC Netherlands BV Established Asia/Pacifc Joint Venture 40

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