May 08, 2018 • 04:30 pm ET



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Greetings and welcome to the American Vanguard Corporation First Quarter 2018 Conference Call and Webcast. At this time, all participants are in a listen-only mode. A question-and-answer will follow the formal presentation. (Operator Instructions) As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Bill Kuser, Director of Investor Relations. Thank you Mr. Kuser, you may begin.

Bill Kuser

Well, thank you very much, Doug. And welcome everyone to American Vanguard's first quarter 2018 earnings review. Our speakers today will be Mr. Eric Wintemute, the Chairman and CEO of the Company; Mr. David Johnson, the Company's Chief Financial Officer; and also assisting with our questions, our Chief Operating Officer, Mr. Bob Trogele. This afternoon's American Vanguard -- this afternoon I should say, American Vanguard has filed its Form 10-Q with the SEC providing additional detail of the results only discussed in this call.

Before beginning, let's take a moment for our usual cautionary reminder. In today's call, the Company may discuss forward-looking information. Such information and statements are based on estimates and assumptions by the Company's management and are subject to various risks and uncertainties that may cause actual results to differ from management's current expectations. Such factors can include weather conditions, changes in regulatory policy, competitive pressures and various other risks that are detailed in the Company's SEC reports and filings. All forward-looking statements represent the Company's best judgement as of the date of this call. Such information will not necessarily be updated by the Company.

With that said, we turn it over to Eric Wintemute.

Eric Wintemute

Thank you, Bill. Hello everyone and welcome to our first quarter earnings call. And as always, thank you for your continued interest in American Vanguard. We're off to a strong start in 2018. As you've read in our earnings release, first quarter sales were up $34 million or 47% over the first quarter of 2017 and net income was up 35% compared to the same period. $29 million of the increase in net sales arose from four significant acquisitions that we completed largely in the second half of 2017. This includes AgriCenter, OHP, three domestic products, Parazone, Equus and Abba that came to us via of FTC-mandated divestment and to a lesser extent, slighter products in Mexico that came to us through a government order divestment.

Given the significance of our newly acquired businesses to our quarterly financial performance, I believe it's important to make three points. First, we had forecast that these acquisitions would generate annual sales in excess of a $100 million. During the last seven months of 2017, when we were still completing the acquisitions, these assets generated $30 million in sales.

Now in our first quarter, we've nearly matched that amount. We are well on our way towards meeting or exceeding the annual target. I hasten to add that as we continue to integrate and grow businesses, we expect to obtain greater efficiencies and improved sales over the course of time. Second, we are able