Delaware (State or other jurisdiction of incorporation) | 001-36316 (Commission File Number) | 46-4007249 (I.R.S. Employer Identification Number) |
One Washington Square 510-530 Walnut Street, Suite 1350 Philadelphia, PA (Address of principal executive offices) | 19106 (Zip code) |
Exhibit Number | Exhibit | |
99.1 | Press Release issued by the Company on March 9, 2017. |
AGROFRESH SOLUTIONS, INC. By: /s/ Thomas Ermi Name: Thomas Ermi Title: Vice President and General Counsel | |
Exhibit Number | Exhibit | |
99.1 | Press Release issued by the Company on March 9, 2017. |
• | Full year 2016 Revenue of $160 million, net loss of $111.8 million and Adjusted EBITDA[1] of $77.5 million in line with guidance provided last quarter |
• | Cash generated by operations for full year 2016 of $30 million |
• | Ends year with cash of $77 million, up $20 million from year end 2015 |
• | Fourth quarter 2016 revenue up marginally from 2015 at $52 million |
• | New leadership and new organizational structure position AgroFresh to capitalize on growth opportunities across entire food supply chain through innovative new food preservation and waste reduction strategies |
Successor | ||||||
December 31, 2016 | December 31, 2015 | |||||
ASSETS | ||||||
Current Assets: | ||||||
Cash and cash equivalents | $ | 77,312 | $ | 57,765 | ||
Accounts receivable, net of allowance for doubtful accounts of $1,171 and $190, respectively | 63,746 | 66,418 | ||||
Inventories | 15,467 | 44,176 | ||||
Other current assets | 14,047 | 12,297 | ||||
Total current assets | 170,572 | 180,656 | ||||
Property and equipment, net | 8,048 | 4,606 | ||||
Goodwill | — | 56,006 | ||||
Intangible assets, net | 776,584 | 825,056 | ||||
Deferred income tax assets — noncurrent | 8,459 | 12,278 | ||||
Other assets | 2,346 | 4,072 | ||||
TOTAL ASSETS | $ | 966,009 | $ | 1,082,674 | ||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||
Current Liabilities: | ||||||
Accounts payable | $ | 12,504 | $ | 13,924 | ||
Current portion of long-term debt | 15,250 | 4,250 | ||||
Income taxes payable | 3,216 | 1,801 | ||||
Accrued expenses and other current liabilities | 66,271 | 47,595 | ||||
Total current liabilities | 97,241 | 67,570 | ||||
Long-term debt | 392,996 | 406,286 | ||||
Other noncurrent liabilities | 140,833 | 164,630 | ||||
Deferred income tax liabilities — noncurrent | — | 285 | ||||
Total liabilities | 631,070 | 638,771 | ||||
Commitments and Contingencies (Note 17) | ||||||
Stockholders’ equity: | ||||||
Common stock, par value $0.0001; 400,000,000 shares authorized, 50,692,928 and 49,940,548 shares issued and 50,031,547 and 49,528,214 shares outstanding at December 31, 2016 and December 31, 2015, respectively | 5 | 5 | ||||
Preferred stock; par value $0.0001, 1 share authorized and outstanding at December 31, 2016 and December 31, 2015 | — | — | ||||
Treasury stock; par value $0.0001, 661,381 and 412,334 shares at December 31, 2016 and December 31, 2015, respectively | (3,885 | ) | (2,397 | ) | ||
Additional paid-in capital | 475,598 | 472,494 | ||||
Accumulated deficit | (132,483 | ) | (20,640 | ) | ||
Accumulated other comprehensive loss | (4,296 | ) | (5,559 | ) | ||
Total stockholders' equity | 334,939 | 443,903 | ||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 966,009 | $ | 1,082,674 |
Successor | Successor | Predecessor | ||||||||||||||
Three Months Ended December 31, 2016 | Three Months Ended December 31, 2015 | Year Ended December 31, 2016 | August 1, 2015 Through December 31, 2015 | January 1, 2015 Through July 31, 2015 | ||||||||||||
Net sales | $ | 51,673 | $ | 51,431 | $ | 159,669 | $ | 111,081 | $ | 52,682 | ||||||
Cost of sales (excluding amortization, shown separately below) | 11,791 | 46,033 | 60,349 | 91,752 | 10,630 | |||||||||||
Gross profit | 39,882 | 5,398 | 99,320 | 19,329 | 42,052 | |||||||||||
Research and development expenses | 3,547 | 3,310 | 14,767 | 5,256 | 11,599 | |||||||||||
Selling, general, and administrative expenses | 12,418 | 18,573 | 61,803 | 31,317 | 16,774 | |||||||||||
Amortization of intangibles | 10,449 | 9,689 | 40,327 | 16,504 | 16,895 | |||||||||||
Impairment of long lived assets | 10,795 | — | 10,795 | — | — | |||||||||||
Goodwill impairment | 62,373 | — | 62,373 | — | — | |||||||||||
Change in fair value of contingent consideration | (48,639 | ) | (23,692 | ) | (53,608 | ) | (23,692 | ) | — | |||||||
Operating (loss) income | (11,061 | ) | (2,482 | ) | (37,137 | ) | (10,056 | ) | (3,216 | ) | ||||||
Other (expense) income | (189 | ) | 1,438 | (173 | ) | (24 | ) | 8 | ||||||||
Loss on foreign currency exchange | (3,956 | ) | (124 | ) | (3,274 | ) | (387 | ) | — | |||||||
Interest expense, net | (14,389 | ) | (13,889 | ) | (58,239 | ) | (23,202 | ) | — | |||||||
(Loss) income before income taxes | (29,595 | ) | (15,057 | ) | (98,823 | ) | (33,669 | ) | (3,208 | ) | ||||||
(Benefit) provision for income taxes | 39,259 | (14,641 | ) | 13,020 | (19,232 | ) | 10,849 | |||||||||
Net (loss) income | $ | (68,854 | ) | $ | (416 | ) | $ | (111,843 | ) | $ | (14,437 | ) | $ | (14,057 | ) | |
Loss per share: | ||||||||||||||||
Basic | $ | (1.40 | ) | $ | (0.01 | ) | $ | (2.26 | ) | $ | (0.29 | ) | $ | — | ||
Diluted | $ | (1.40 | ) | $ | (0.01 | ) | $ | (2.26 | ) | $ | (0.29 | ) | $ | — | ||
Weighted average shares outstanding: | ||||||||||||||||
Basic | 49,233,468 | 49,845,934 | 49,384,838 | 49,691,206 | — | |||||||||||
Diluted | 49,233,468 | 49,845,934 | 49,384,838 | 49,691,206 | — |
Successor | Predecessor | |||||||||||||
Year Ended December 31, 2016 | August 1, 2015 Through December 31, 2015 | January 1, 2015 Through July 31, 2015 | Year Ended December 31, 2014 | |||||||||||
Cash flows from operating activities: | ||||||||||||||
Net (loss) income | $ | (111,843 | ) | $ | (14,437 | ) | $ | (14,057 | ) | $ | 27,857 | |||
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities: | ||||||||||||||
Depreciation and amortization | 41,310 | 16,763 | 17,379 | 30,393 | ||||||||||
Provision for bad debts | 981 | 190 | — | — | ||||||||||
Stock based compensation | 3,250 | 1,124 | — | — | ||||||||||
Pension expense | 265 | 119 | — | — | ||||||||||
Amortization of inventory fair value adjustment | 30,377 | 73,054 | — | — | ||||||||||
Amortization of deferred financing cost | 2,275 | 911 | — | — | ||||||||||
Transaction costs | — | (4,487 | ) | — | — | |||||||||
Accretion of contingent consideration | 30,197 | 11,862 | — | — | ||||||||||
Decrease in fair value of contingent consideration | (53,608 | ) | (23,692 | ) | — | — | ||||||||
Deferred income taxes | 13,792 | (19,886 | ) | (4,218 | ) | (9,739 | ) | |||||||
Impairment of long-lived assets | 10,795 | — | — | — | ||||||||||
Goodwill impairment | 62,373 | — | — | — | ||||||||||
Loss on sales of property | (22 | ) | — | (12 | ) | — | ||||||||
Other | 32 | 2,556 | — | — | ||||||||||
Changes in operating assets and liabilities: | ||||||||||||||
Accounts receivable | (4,101 | ) | (42,703 | ) | 42,585 | (3,420 | ) | |||||||
Inventories | (764 | ) | 2,288 | (5,756 | ) | (3,719 | ) | |||||||
Prepaid expenses and other current assets | (6,262 | ) | (1,159 | ) | — | 365 | ||||||||
Accounts payable | 6,632 | 13,785 | (798 | ) | — | |||||||||
Accrued expenses and other liabilities | 2,342 | 2,492 | — | — | ||||||||||
Income taxes payable | (281 | ) | — | (36,070 | ) | — | ||||||||
Other assets and liabilities | 2,686 | — | (4,651 | ) | 14,074 | |||||||||
Net cash provided by (used in) operating activities | 30,426 | 18,780 | (5,598 | ) | 55,811 | |||||||||
Cash flows from investing activities: | ||||||||||||||
Cash paid for property and equipment | (5,946 | ) | (516 | ) | (676 | ) | (1,300 | ) | ||||||
Proceeds from sale of property | 76 | — | 63 | — | ||||||||||
Acquisition of business, net of cash acquired | — | (625,541 | ) | — | — | |||||||||
Restricted cash | — | 220,505 | — | — | ||||||||||
Other investments | (600 | ) | — | — | — | |||||||||
Net cash used in investing activities | (6,470 | ) | (405,552 | ) | (613 | ) | (1,300 | ) | ||||||
Cash flows from financing activities: | ||||||||||||||
Proceeds from long term debt | — | 425,000 | — | — | ||||||||||
Payment of debt issuance costs | — | (13,120 | ) | — | — | |||||||||
Payment of revolving credit facility fees | — | (1,266 | ) | — | — | |||||||||
Other financing costs | — | (7,776 | ) | — | — | |||||||||
Repayment of long term debt | (4,250 | ) | (2,125 | ) | — | — |
Proceeds from private placement | — | 50,000 | — | — | ||||||||||
Borrowings under revolving credit facility | — | 500 | — | — | ||||||||||
Repayments of revolving credit facility | — | (500 | ) | — | — | |||||||||
Insurance premium financing | — | 1,294 | — | — | ||||||||||
Repayment of notes payable | — | (380 | ) | — | — | |||||||||
Repurchase of stock for treasury | (1,488 | ) | (2,397 | ) | — | — | ||||||||
Payment of withholding taxes related to stock-based compensation to employees | (331 | ) | — | — | — | |||||||||
Repurchase of warrants | — | (2,524 | ) | — | — | |||||||||
Cash transfers to/from parent, net | — | — | 6,211 | (54,511 | ) | |||||||||
Net cash provided by (used in) financing activities | (6,069 | ) | 446,706 | 6,211 | (54,511 | ) | ||||||||
Effect of exchange rate changes on cash and cash equivalents | 1,660 | (2,253 | ) | — | — | |||||||||
Net (decrease) increase in cash and cash equivalents | 19,547 | 57,681 | — | — | ||||||||||
Cash and cash equivalents, beginning of period | 57,765 | 84 | — | — | ||||||||||
Cash and cash equivalents, end of period | $ | 77,312 | $ | 57,765 | $ | — | $ | — | ||||||
Supplemental disclosures of cash flow information: | ||||||||||||||
Cash paid for: | ||||||||||||||
Interest | $ | 24,560 | $ | 10,411 | $ | — | $ | — | ||||||
Income taxes | $ | 2,898 | $ | — | $ | — | $ | — | ||||||
Supplemental schedule of non-cash investing and financing activities: | ||||||||||||||
Accrued purchases of property and equipment | $ | 815 | $ | — | $ | — | $ | — | ||||||
Issuance of common stock as consideration for acquisition of business | $ | — | $ | 210,000 | $ | — | $ | — | ||||||
Acquisition-related contingent consideration | $ | — | $ | 190,150 | $ | — | $ | — |
Predecessor | Predecessor | Successor | Successor | ||||||||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended March 31, 2014 | Three Months Ended June 30, 2014 | Three Months Ended September 30, 2014 | Three Months Ended December 31, 2014 | Total 2014 | Three Months Ended March 31, 2015 | Three Months Ended June 30, 2015 | One Month Ended July 31, 2015 | Two Months Ended September 30, 2015 | Three Months Ended September 30, 2015 | Three Months Ended December 31, 2015 | Total 2015 | Three Months Ended March 31, 2016 | Three Months Ended June 30, 2016 | Three Months Ended September 30, 2016 | Three Months Ended December 31, 2016 | Total 2016 | |||||||||||||||||||||||||||||||||||||
Net Income (Loss) | $ | 4,864 | $ | (6,841 | ) | $ | 34,978 | $ | 36,255 | $ | 69,256 | $ | 2,480 | $ | (14,009 | ) | $ | (2,528 | ) | $ | (14,021 | ) | $ | (16,549 | ) | $ | (416 | ) | $ | (28,494 | ) | $ | (25,137 | ) | $ | (25,164 | ) | $ | 7,312 | $ | (68,854 | ) | $ | (111,843 | ) | ||||||||
Provision for income taxes | — | — | — | — | — | 7,096 | 4,985 | (1,232 | ) | (4,591 | ) | (5,823 | ) | (14,641 | ) | (8,383 | ) | (15,289 | ) | (15,626 | ) | 4,676 | 39,259 | 13,020 | |||||||||||||||||||||||||||||
Amortization of inventory step-up(1) | — | — | — | — | — | — | — | — | 38,702 | 38,702 | 34,352 | 73,054 | 18,505 | 11,872 | — | — | 30,377 | ||||||||||||||||||||||||||||||||||||
Interest expense(2) | — | — | — | — | — | — | — | — | 9,313 | 9,313 | 13,889 | 23,202 | 15,008 | 14,316 | 14,526 | 14,389 | 58,239 | ||||||||||||||||||||||||||||||||||||
Depreciation and amortization | 7,732 | 7,581 | 7,485 | 7,513 | 30,311 | 7,522 | 7,391 | 2,466 | 7,969 | 10,435 | 11,465 | 36,813 | 10,059 | 10,130 | 10,269 | 10,866 | 41,324 | ||||||||||||||||||||||||||||||||||||
Non-GAAP EBITDA | $ | 12,596 | $ | 740 | $ | 42,463 | $ | 43,768 | $ | 99,567 | $ | 17,098 | $ | (1,633 | ) | $ | (1,294 | ) | $ | 37,372 | $ | 36,078 | $ | 44,649 | $ | 96,192 | $ | 3,146 | $ | (4,472 | ) | $ | 36,783 | $ | (4,340 | ) | $ | 31,117 | |||||||||||||||
Transaction and acquisition related costs(3) | — | — | — | — | — | — | — | — | 1,918 | 1,918 | (105 | ) | 1,813 | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Share-based compensation | 144 | 144 | 144 | 125 | 557 | 206 | 129 | 46 | 673 | 719 | 407 | 1,461 | 460 | 836 | 563 | 476 | 2,335 | ||||||||||||||||||||||||||||||||||||
Share-based compensation related to severance(4) | — | — | — | — | — | — | — | — | — | — | — | — | 610 | — | 739 | — | 1,349 | ||||||||||||||||||||||||||||||||||||
Stand-alone costs(5) | — | — | — | — | — | — | — | 121 | 3,510 | 3,631 | (2,605 | ) | 1,026 | 144 | 96 | 137 | 71 | 448 | |||||||||||||||||||||||||||||||||||
Asset impairment including intangibles(6) | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | 10,795 | 10,795 | ||||||||||||||||||||||||||||||||||||
Goodwill impairment | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | 62,373 | 62,373 | ||||||||||||||||||||||||||||||||||||
Research & development cost synergies(7) | 1,415 | 1,389 | 1,594 | 1,404 | 5,802 | 1,622 | 1,177 | 450 | — | 450 | — | 3,249 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Severance related costs(4) | — | — | — | — | — | — | — | — | — | — | — | — | 1,759 | — | 1,218 | 142 | 3,119 | ||||||||||||||||||||||||||||||||||||
Other non-recurring costs(5) | — | — | — | 689 | 689 | — | 383 | — | 442 | 442 | 9,418 | 10,243 | 6,482 | 3,261 | 3,529 | 2,632 | 15,904 | ||||||||||||||||||||||||||||||||||||
Loss on foreign currency exchange(8) | — | — | — | — | — | — | — | — | 264 | 264 | 123 | 387 | (830 | ) | 1,072 | (924 | ) | 3,956 | 3,274 | ||||||||||||||||||||||||||||||||||
Mark-to-market adjustments, net(9) | — | — | — | — | — | — | — | — | 1,450 | 1,450 | (25,142 | ) | (23,692 | ) | (3,100 | ) | (300 | ) | (1,569 | ) | (48,640 | ) | (53,609 | ) | |||||||||||||||||||||||||||||
Pro forma deferred revenue(10) | (500 | ) | (500 | ) | (500 | ) | (500 | ) | (2,000 | ) | (500 | ) | (500 | ) | (167 | ) | — | (167 | ) | — | (1,167 | ) | — | — | — | — | — | ||||||||||||||||||||||||||
Franchise and state taxes | — | — | — | — | — | — | — | — | — | — | 371 | 371 | 319 | 176 | (230 | ) | 135 | 400 | |||||||||||||||||||||||||||||||||||
Non-GAAP Adjusted EBITDA | $ | 13,655 | $ | 1,773 | $ | 43,701 | $ | 45,486 | $ | 104,615 | $ | 18,426 | $ | (444 | ) | $ | (844 | ) | $ | 45,629 | $ | 44,785 | $ | 27,116 | $ | 89,883 | $ | 8,990 | $ | 669 | $ | 40,246 | $ | 27,600 | $ | 77,505 |
(1) | The amortization of inventory step-up related to the acquisition of AgroFresh was charged to income based on the pace of inventory usage |
(2) | Interest on the term loan, inclusive of accretion for debt discounts, debt issuance costs and contingent consideration |
(3) | Costs associated with the Business Combination incurred in the current period |
(4) | Severance costs related to our former Chief Executive Officer, Chief Financial Officer, former President and other former personnel, including the net share-based compensation cost due to acceleration of vesting on restricted stock, partly offset by forfeiture of stock options |
(5) | Certain administrative, professional fees and other non-recurring fees associated with becoming a stand-alone public company |
(6) | Impairment charge on AgroFresh and SmartFresh tradenames and a write-off of equipment |
(7) | R&D savings related to two projects (Invinsa and IDC) |
(8) | Loss (gain) on foreign currency exchange relates to net losses and gains resulting from the remeasurement of assets and liabilities denominated in foreign currencies |
(9) | Non-cash adjustment to the fair value of contingent consideration |
(10) | Deferred revenue associated with an agreement not included in the Business Combination |
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