AgroFresh Solutions Reports Results for Fourth Quarter and Full Year 2020
- Full year 2020 net sales were
$157.6 million, a decrease of 7.3% (6.2% on a constant currency basis) versus the prior year.
- Selling, general and administrative expense decreased 9.4% to
$53.9 millionfor the full year 2020 and decreased 1.8% when excluding nonrecurring items related to litigation, severance and M&A, versus the prior year.
- Net loss of
$53.0 millionfor the full year 2020, which included $43.7 millionof amortization of intangibles.
- Adjusted EBITDA1 was
$60.1 millionfor the full year 2020 and adjusted EBITDA margin was 38.1%.
Financial Highlights for the Fourth Quarter of 2020
Net sales for the fourth quarter of 2020 decreased 14.9% to
Gross profit for the fourth quarter was
Research and development costs were
Selling, general and administrative expenses increased 12.4% to
Fourth quarter 2020 net loss was
Adjusted EBITDA1 was
Financial Highlights for the Full Year of 2020
Net sales for the full year 2020 were
Gross margin was nearly unchanged at 73.2% compared to the prior year, despite a decrease in sales, due to the positive effects of supply chain cost optimization initiatives.
Research and development costs decreased
Selling, general and administrative expenses decreased 9.4% to
Net loss was
Adjusted EBITDA1 decreased to
1 Adjusted EBITDA is a non-GAAP financial measure. Please see the information under “Non-GAAP Financial Measures” below for a description of Adjusted EBITDA and the table at the end of this press release for a reconciliation of this Non-GAAP financial measure to GAAP results.
The Company will host a conference call and webcast where members of the executive management team will discuss these results with additional comments and details today,
A replay of the conference call will be archived on the Company's website and telephonic playback will be available from
Non-GAAP Financial Measures
This press release contains the non-GAAP financial measures EBITDA and Adjusted EBITDA. The Company believes these non-GAAP financial measures provide meaningful supplemental information as they are used by the Company's management to evaluate the Company's performance, including incentive bonuses and for bank covenant reporting. Management believes that these measures enhance a reader's understanding of the operating and financial performance of the Company and facilitate a better comparison between fiscal periods. EBITDA excludes income taxes, interest expense and depreciation and amortization, whereas Adjusted EBITDA further excludes items that are non-cash, infrequent, or non-recurring, such as share-based compensation, severance, litigation and M&A related costs, to provide further meaningful information for evaluation of the Company’s performance.
The Company does not intend for the non-GAAP financial measures contained in this release to be a substitute for any GAAP financial information. Readers of this press release should use these non-GAAP financial measures only in conjunction with the comparable GAAP financial measures. Reconciliations of the non-GAAP financial measures EBITDA and Adjusted EBITDA to the most comparable GAAP measure are provided in the table at the end of this press release.
In addition to historical information, this release may contain "forward-looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, included in this release that address activities, events or developments that the Company expects or anticipates will or may occur in the future are forward-looking statements and are identified with, but not limited to, words such as "anticipate", "believe", "expect", "estimate", "plan", "outlook", and "project" and other similar expressions (or the negative versions of such words or expressions). Forward-looking statements include, without limitation, information concerning the Company's possible or assumed future results of operations, including all statements regarding financial guidance, anticipated future growth, business strategies, competitive position, industry environment, potential growth opportunities and the effects of regulation. These statements are based on management's current expectations and beliefs, as well as a number of assumptions concerning future events. Such forward-looking statements are subject to known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside the Company's management's control that could cause actual results to differ materially from the results discussed in the forward-looking statements. These risks include, without limitation, the risk of increased competition; the ability of the business to grow and manage growth profitably; risks associated with the Company's substantial level of indebtedness; risks associated with acquisitions and investments; changes in applicable laws or regulations, and the possibility that the Company may be adversely affected by other economic, business, and/or competitive factors. Additional risks and uncertainties are identified and discussed in the Company's filings with the
AgroFresh Solutions, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
|Cash and cash equivalents||$||50,030||$||29,288|
|Accounts receivable, net of allowance for doubtful accounts of
|Other current assets||17,219||11,802|
|Total current assets||155,032||132,345|
|Property and equipment, net||12,432||13,177|
|Intangible assets, net||589,201||631,369|
|Deferred income tax assets||9,699||10,317|
|LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS’ EQUITY|
|Current portion of long-term debt||3,378||4,675|
|Income taxes payable||3,471||5,648|
|Accrued expenses and other current liabilities||25,976||24,350|
|Total current liabilities||52,459||49,778|
|Other noncurrent liabilities||6,432||7,246|
|Deferred income tax liabilities||37,834||9,217|
|Commitments and contingencies|
|Series B convertible preferred stock, par value
|Common stock, par value
|Preferred stock, par value
|Additional paid-in capital||552,776||560,890|
|Accumulated other comprehensive loss||(31,667||)||(31,060||)|
|Total AgroFresh Stockholders’ Equity||272,393||333,686|
|TOTAL LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS' EQUITY||$||785,783||$||805,692|
AgroFresh Solutions, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
|Three Months Ended
|Three Months Ended
|Cost of sales (excluding amortization, shown separately below)||13,725||13,533||42,217||45,049|
|Research and development expenses||3,968||4,392||12,357||14,112|
|Selling, general, and administrative expenses||13,935||12,402||53,860||59,446|
|Amortization of intangibles||10,865||45,983||43,731||81,119|
|Impairment of assets||—||10,432||—||11,424|
|Change in fair value of contingent consideration||—||(458||)||—||(330||)|
|Operating income (loss)||9,375||(25,314||)||8,452||(40,755||)|
|Other (loss) income||(105||)||132||1,491||13|
|Debt modification and extinguishment expenses||—||—||(5,028||)||—|
|Loss on foreign currency exchange||(5,302||)||(1,243||)||(2,836||)||(4,127||)|
|Interest expense, net||(5,268||)||(7,763||)||(23,669||)||(33,784||)|
|Loss before income taxes||(1,300||)||(34,188||)||(21,590||)||(78,653||)|
|Income taxes expense (benefit)||1,363||(11,970||)||31,376||(24,500||)|
|Net loss including non-controlling interests||$||(2,663||)||$||(22,218||)||$||(52,966||)||$||(54,153||)|
|Less: Net (income) loss attributable to non-controlling interests||(397||)||226||(745||)||562|
|Net loss attributable to
|Less: Dividends on convertible preferred stock||6,088||—||10,488||—|
|Net loss attributable to AgroFresh Solutions, Inc. common stockholders||(9,148||)||$||(21,992||)||$||(64,199||)||$||(53,591||)|
|Net loss per share:|
|Weighted average shares outstanding:|
The following table sets forth the non-GAAP financial measures of EBITDA and Adjusted EBITDA. The Company believes these non-GAAP financial measures provide meaningful supplemental information as they are used by the Company’s management to evaluate the Company’s performance (including incentive bonuses and for bank covenant reporting), are more indicative of operating performance of the Company, and facilitate a better comparison among fiscal periods. These non-GAAP results are presented for supplemental informational purposes only and should not be considered a substitute for the financial information presented in accordance with GAAP.
The following is a reconciliation between the non-GAAP financial measures of EBITDA and Adjusted EBITDA to their most directly comparable GAAP financial measure, net loss:
|(in thousands)||Three Months Ended
||Three Months Ended
|GAAP net loss including non-controlling interests||$||(2,663||)||$||(22,218||)||$||(52,966||)||$||(54,153||)|
|Provision (benefit) for income taxes||1,363||(11,970||)||31,376||(24,500||)|
|Interest expense (1)||5,268||7,763||23,669||33,784|
|Depreciation and amortization||12,195||46,764||46,970||83,456|
|Severance related costs (2)||455||50||885||1,086|
|Other non-recurring costs (3)||857||2,440||3,240||8,745|
|Loss on foreign currency exchange (4)||5,302||1,243||2,836||4,127|
|Debt modification and extinguishment costs||—||—||5,028||—|
|Contingent consideration adjustments, net (5)||—||(458||)||—||(330||)|
|Impairment of assets (6)||—||10,432||—||11,424|
|Non-GAAP Adjusted EBITDA||$||23,670||$||34,649||$||60,062||$||66,353|
(1) Interest on debt, accretion for debt discounts, debt issuance costs and contingent consideration.
(2) Severance costs related to ongoing cost optimization initiatives.
(3) Costs related to certain professional and other infrequent or non-recurring fees, including those associated with litigation and M&A related fees.
(4) Loss on foreign currency exchange relates to net losses and gains resulting from transactions denominated in a currency other than the Company's functional currency.
(5) Non-cash adjustment to the fair value of contingent consideration, including TRA and contingent payment related to the Tecnidex acquisition.
(6) Impairment of assets related to software and investments.
Source: AgroFresh Solutions, Inc.