AgroFresh Solutions, Inc. (“AgroFresh Solutions” or the
“Company”) (NASDAQ:AGFS, AGFSW) announced today financial results
for the AgroFresh Business (“AgroFresh”) for the three and six
months ended June 30, 2015. Full detail of the financial results as
well as Management’s Discussion and Analysis can be found in the
Company's Form 8-K filed with the SEC on August 17, 2015.
AgroFresh is a global industry leader in providing innovative
data-driven specialty solutions aimed at enabling growers and
packers of fresh produce to preserve and enhance the freshness,
quality and value of fresh produce and to maximize the percentage
of produce supplied to the market relative to the amount of produce
grown. Its flagship product is the SmartFresh™ Quality System
(“SmartFresh”), a freshness protection technology proven to
maintain firmness, texture and appearance of fruits during storage
and transport. SmartFresh is currently commercialized in 45
countries worldwide.
Highlights for the Three Months Ended June 30, 2015:
- Net Sales decreased 1.1%
year-over-year
- Adjusted Net Sales increased $0.9
million year-over-year*
- Adjusted EBITDA decreased $2.1 million
year-over-year*
- Income Before Income Taxes was a loss
of $9.0 million as compared to a loss of $6.8 million in the
comparable period in 2014
* Please see the tables at the end of this press release for a
reconciliation of GAAP results to non-GAAP financial measures.
Highlights for the Six Months Ended June 30, 2015:
- Net Sales increased 6.4%
year-over-year
- Adjusted Net Sales increased $5.2
million year-over-year*
- Adjusted EBITDA increased $2.4 million
year-over-year*
- Income Before Income Taxes of $0.6
million as compared to a loss of $2 million in the comparable
period in 2014
* Please see the tables at the end of this press release for a
reconciliation of GAAP results to non-GAAP financial measures.
Thomas Macphee, Chief Executive Officer of AgroFresh, said, “Our
business performed well in the first half of the year, which
primarily represents our southern hemisphere season, or
approximately one third of our revenues historically. Our high
touch, market leading solutions continue to gain traction in an
industry that has an exciting runway for growth ahead of it.
“As we look ahead, we are aggressively pursuing our strategic
plan, in which we expect to expand our core franchise, develop a
robust pipeline of high-value solutions, and deliver related,
accretive acquisitions.”
Net Sales
The Company believes that semi-annual results are a better
reflection of the Company’s financial performance than a comparison
of year-over-year quarterly results because the Company’s quarterly
sales are subject to fluctuation from year to year as a result of
factors such as weather patterns, which may affect the timing of
harvest and thus shift sales from one quarter to another within a
growing season.
Sales gains in the first half of 2015 were primarily driven by
increased penetration and larger apple crops in New Zealand and
South Africa, a larger apple crop in Australia, and increased
applications on plums and pears in Latin America, which were
partially offset by the smaller apple crops in Chile and
Brazil.
Adjusted EBITDA
Adjusted EBITDA in the first half of 2015 increased primarily
due to higher Net Sales from higher product penetration and larger
apple crops, offset by higher cost of sales related to the increase
in Net Sales and higher legal expenses.
Financial results for the period reflect operations prior to the
closing of the previously announced business combination (the
“Business Combination”) between Boulevard Acquisition Corp. and The
Dow Chemical Company (“TDCC”) which occurred on July 31, 2015. In
connection with the closing of the Business Combination, Boulevard
Acquisition Corp. changed its name to AgroFresh
Solutions, Inc. and acquired the AgroFresh business from TDCC,
resulting in AgroFresh Inc. becoming a wholly-owned,
indirect subsidiary of AgroFresh Solutions.
Forward-Looking Statements
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 estimates used to
calculate the adjusted financial information presented in this
press release), 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 that
the Business Combination disrupts current plans and operations; the
Company’s ability to recognize the anticipated benefits of the
Business Combination, which may be affected by, among other things,
competition and the ability of the combined business to grow and
manage growth profitably; costs related to the Business Combination
and/or related to operating AgroFresh as a stand-alone public
company; 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 SEC (available at www.sec.gov), including the
definitive proxy statement filed on July 16, 2015 with the SEC in
connection with the Business Combination and available at the SEC’s
website at www.sec.gov.
Reconciliation of Non-GAAP Financial
Measures for the Three and Six Months Ended June 30, 2015
($ in millions)
Three months ended June 30, Six
months ended June 30,
2014
2015
2014
2015
Net Sales (1) $ 17.9 $ 17.7 $ 47.5 $ 50.5 Less Adjustments
for deferred income(2) (0.5 ) (0.5 ) (1.0 ) (1.0 ) Foreign
currency adjustments(3) (1.2 )
(0.1 ) (2.5 ) (0.3 )
Adjusted Net
Sales(4) $ 16.2
$ 17.1 $ 44.0
$ 49.2 Net Income(1)
(14.7 ) (14.0 ) (12.7 ) (11.5 ) Provision for income taxes(1) 7.8
5.0 10.7 12.1 Depreciation and amortization(1) 7.6 7.4 15.3 14.9
Less Adjustments for deferred income(2) (0.5 ) (0.5 ) (1.0 ) (1.0 )
Foreign currency adjustments(3) - (0.1 ) (0.6 ) (0.3 ) R&D
expense(5) 1.3 1.6 2.7 2.7 Adjustment for stand-alone run
rate costs(6) (0.8 ) (0.8 )
(1.6 ) (1.6 )
Adjusted EBITDA(4)
$ 0.7 $ (1.4
) $ 12.9 $ 15.3
(1)
Per the unaudited US GAAP combined
statements of income and comprehensive income for the periods
presented.
(2)
Represents the elimination of deferred
income which is contractually excluded from the Business
Combination pursuant to the Stock Purchase Agreement entered into
in connection with the Business Combination.
(3)
Represents an estimate to adjust the
translation impact of the EURO and Australian Dollar to a constant
currency basis using assumed exchange rates of 1.10 EURO to USD and
.75 AUS to USD.
(4)
The Company has used the terms “Pro Forma
Net Sales” and “Pro Forma EBITDA” to refer to these non-GAAP
measures in certain materials previously filed in connection with
the Business Combination.
(5)
Represents the amount of projected “run
rate” cost savings and operating expense reductions to be realized
within R&D.
(6)
Reflects an adjustment to increase
administrative and operational costs for certain previously
estimated stand-alone run rate costs of $7.7 million per year after
the closing of the Business Combination.
About AgroFresh
AgroFresh Solutions is a global industry leader in providing
innovative data-driven specialty chemical solutions aimed at
enabling growers and packers of fresh produce to preserve and
enhance the freshness, quality and value of fresh produce and to
maximize the percentage of produce supplied to the market relative
to the amount of produce grown. Its flagship product is the
SmartFresh™ Quality System, a freshness protection technology
proven to maintain firmness, texture and appearance of fruits
during storage and transport. SmartFresh is currently
commercialized in 45 countries worldwide. For more information,
please visit http://www.agrofresh.com/home.
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version on businesswire.com: http://www.businesswire.com/news/home/20150818005513/en/
AgroFresh Solutions, Inc.Erica Bartsch, +1-212-446-1875Sloane
& Companyebartsch@sloanepr.com
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