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) | |||
(267) 317-9139 (Registrant’s telephone number, including area code) Not Applicable (Former name or former address, if changed since last report) |
Exhibit Number | Exhibit | |
Press Release issued by the Company on August 15, 2018. |
AGROFRESH SOLUTIONS, INC. By: /s/ Thomas Ermi Name: Thomas Ermi Title: Vice President and General Counsel |
Exhibit Number | Exhibit | |
Press Release issued by the Company on August 15, 2018. |
• | Net sales up 12% to $18 million for the quarter and up 16% to $57 million for first half of 2018 |
• | For the first half, 37% of revenue generated from crops other than apple, up from 22% for the first half of 2017 |
• | Signed collaboration agreement with Del Monte for RipeLock in retail, launched FreshCloud suite of storage and transportation screening and diagnostic solutions, and acquired Verigo which has strong IoT technology supporting FreshCloud Transit for the monitoring of perishables during transportation |
• | Net loss of $31 million in the first half of 2018 compared to a net loss of $9 million in the first half of 2017, with a majority of the change due to lower gain on currency of $6 million and $15 million in tax benefits recorded in the first half of 2017 |
• | First half EBITDA[1] of $8 million down from prior year primarily due to the difference in gain on currency |
• | Quarter end cash of $42 million |
June 30, 2018 | December 31, 2017 | |||||
ASSETS | ||||||
Current Assets: | ||||||
Cash and cash equivalents | $ | 41,776 | $ | 64,533 | ||
Accounts receivable, net of allowance for doubtful accounts of $1,575 and $1,550, respectively | 39,916 | 71,509 | ||||
Inventories | 27,278 | 24,109 | ||||
Other current assets | 25,017 | 18,684 | ||||
Total current assets | 133,987 | 178,835 | ||||
Property and equipment, net | 13,645 | 12,200 | ||||
Goodwill | 5,680 | 9,402 | ||||
Intangible assets, net | 736,940 | 757,882 | ||||
Deferred income tax assets | 7,605 | 8,198 | ||||
Other assets | 17,289 | 16,746 | ||||
TOTAL ASSETS | $ | 915,146 | $ | 983,263 | ||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||
Current Liabilities: | ||||||
Accounts payable | $ | 7,769 | $ | 15,014 | ||
Current portion of long-term debt | 6,995 | 7,926 | ||||
Income taxes payable | 4,715 | 5,931 | ||||
Accrued expenses and other current liabilities | 50,046 | 65,809 | ||||
Total current liabilities | 69,525 | 94,680 | ||||
Long-term debt | 401,469 | 402,868 | ||||
Other noncurrent liabilities | 37,644 | 38,505 | ||||
Deferred income tax liabilities | 30,031 | 31,130 | ||||
Total liabilities | 538,669 | 567,183 | ||||
Commitments and contingencies (see Note 17) | ||||||
Stockholders’ equity: | ||||||
Common stock, par value $0.0001; 400,000,000 shares authorized, 51,148,343 and 51,002,234 shares issued and 50,486,962 and 50,340,853 shares outstanding at June 30, 2018 and December 31, 2017, respectively | 5 | 5 | ||||
Preferred stock; par value $0.0001, 1 share authorized and outstanding at June 30, 2018 and December 31, 2017 | — | — | ||||
Treasury stock; par value $0.0001, 661,381 shares at June 30, 2018 and December 31, 2017 | (3,885 | ) | (3,885 | ) | ||
Additional paid-in capital | 534,755 | 533,015 | ||||
Accumulated deficit | (140,080 | ) | (108,729 | ) | ||
Accumulated other comprehensive loss | (22,834 | ) | (12,769 | ) | ||
Total AgroFresh stockholders’ equity | 367,961 | 407,637 | ||||
Non-controlling interest | 8,516 | 8,443 | ||||
Total stockholders' equity | 376,477 | 416,080 | ||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 915,146 | $ | 983,263 |
Three Months Ended June 30, 2018 | Three Months Ended June 30, 2017 | Six Months Ended June 30, 2018 | Six Months Ended June 30, 2017 | ||||||||||
Net sales | $ | 18,420 | $ | 16,389 | $ | 56,771 | $ | 49,119 | |||||
Cost of sales (excluding amortization, shown separately below) | 5,402 | 3,906 | 16,248 | 9,745 | |||||||||
Gross profit | 13,018 | 12,483 | 40,523 | 39,374 | |||||||||
Research and development expenses | 3,733 | 3,735 | 6,802 | 7,032 | |||||||||
Selling, general, and administrative expenses | 15,609 | 13,435 | 31,920 | 29,866 | |||||||||
Amortization of intangibles | 11,402 | 10,445 | 22,341 | 20,890 | |||||||||
Change in fair value of contingent consideration | 98 | (1,211 | ) | 236 | (996 | ) | |||||||
Operating loss | (17,824 | ) | (13,921 | ) | (20,776 | ) | (17,418 | ) | |||||
Other income | 538 | 215 | 608 | 255 | |||||||||
Gain on foreign currency exchange | 3,272 | 7,968 | 5,203 | 11,071 | |||||||||
Interest expense, net | (8,763 | ) | (8,564 | ) | (17,118 | ) | (18,857 | ) | |||||
Loss before income taxes | (22,777 | ) | (14,302 | ) | (32,083 | ) | (24,949 | ) | |||||
Benefit for income taxes | (4,375 | ) | (16,909 | ) | (805 | ) | (15,527 | ) | |||||
Net (loss) income including non-controlling interests | $ | (18,402 | ) | $ | 2,607 | $ | (31,278 | ) | $ | (9,422 | ) | ||
Less: Net (loss) income attributable to non-controlling interests | (18 | ) | — | 73 | — | ||||||||
Net (loss) income attributable to AgroFresh Solutions, Inc | $ | (18,384 | ) | $ | 2,607 | $ | (31,351 | ) | $ | (9,422 | ) | ||
Net (loss) income per share: | |||||||||||||
Basic | $ | (0.37 | ) | $ | 0.05 | $ | (0.63 | ) | $ | (0.19 | ) | ||
Diluted | $ | (0.37 | ) | $ | 0.05 | $ | (0.63 | ) | $ | (0.19 | ) | ||
Weighted average shares outstanding: | |||||||||||||
Basic | 49,864,822 | 49,670,621 | 49,814,744 | 49,941,993 | |||||||||
Diluted | 49,864,822 | 50,035,343 | 49,814,744 | 49,941,993 |
(in thousands) | Six Months Ended June 30, 2018 | Six Months Ended June 30, 2017 | ||||
Cash flows from operating activities: | ||||||
Net loss | $ | (31,278 | ) | $ | (9,422 | ) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||
Depreciation and amortization | 22,953 | 22,046 | ||||
Provision for bad debts | 182 | 789 | ||||
Stock-based compensation | 1,900 | 806 | ||||
Pension expense | 64 | 153 | ||||
Amortization of deferred financing costs | 1,214 | 1,166 | ||||
Accretion of contingent consideration | 2,043 | 5,515 | ||||
Increase (decrease) in fair value of contingent consideration | 236 | (996 | ) | |||
Deferred income taxes | (506 | ) | (19,726 | ) | ||
Loss on sales of property | — | 80 | ||||
Provision for inventory obsolescence | — | 89 | ||||
Other | 114 | 43 | ||||
Changes in operating assets and liabilities: | ||||||
Accounts receivable | 27,340 | 37,232 | ||||
Inventories | (5,083 | ) | (2,758 | ) | ||
Prepaid expenses and other current assets | (8,152 | ) | 198 | |||
Accounts payable | (7,300 | ) | (19,864 | ) | ||
Accrued expenses and other liabilities | (8,434 | ) | (1,987 | ) | ||
Income taxes payable | (1,216 | ) | 2,581 | |||
Other assets and liabilities | 2,098 | 205 | ||||
Net cash (used in) provided by operating activities | (3,825 | ) | 16,150 | |||
Cash flows from investing activities: | ||||||
Cash paid for property and equipment | (2,327 | ) | (2,835 | ) | ||
Proceeds from sale of property | — | 9 | ||||
Asset Acquisition | (1,587 | ) | — | |||
Other investments | — | (1,050 | ) | |||
Net cash used in investing activities | (3,914 | ) | (3,876 | ) | ||
Cash flows from financing activities: | ||||||
Payment of Dow liabilities settlement | (10,000 | ) | (10,000 | ) | ||
Repayment of long term debt | (3,330 | ) | (2,125 | ) | ||
Net cash used in financing activities | (13,330 | ) | (12,125 | ) | ||
Effect of exchange rate changes on cash and cash equivalents | (1,688 | ) | 1,131 | |||
Net (decrease) increase in cash and cash equivalents | (22,757 | ) | 1,280 | |||
Cash and cash equivalents, beginning of period | $ | 64,533 | 77,312 | |||
Cash and cash equivalents, end of period | $ | 41,776 | $ | 78,592 | ||
Supplemental disclosures of cash flow information: | ||||||
Cash paid for: | ||||||
Cash paid for interest | $ | 15,777 | $ | 12,309 | ||
Cash paid for income taxes | $ | 4,245 | $ | 1,291 | ||
Supplemental schedule of non-cash investing and financing activities: | ||||||
Accrued purchases of property and equipment | $ | — | $ | 254 | ||
Settlement of Dow liabilities not resulting from cash payment, net of deferred income taxes | $ | — | $ | 55,089 |
(in thousands) | Three Months Ended June 30, 2018 | Three Months Ended June 30, 2017 | Six Months Ended June 30, 2018 | Six Months Ended June 30, 2017 | |||||||||
GAAP net income (loss) | $ | (18,402 | ) | $ | 2,607 | $ | (31,278 | ) | $ | (9,422 | ) | ||
Provision (benefit) for income taxes | (4,375 | ) | (16,909 | ) | (805 | ) | (15,527 | ) | |||||
Interest expense(1) | 8,763 | 8,564 | 17,118 | 18,857 | |||||||||
Depreciation and amortization | 11,680 | 11,068 | 22,953 | 22,046 | |||||||||
Non-GAAP EBITDA | $ | (2,334 | ) | $ | 5,330 | $ | 7,988 | $ | 15,954 |
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