AgroFresh Solutions (AGFS) Misses Q2 EPS by 18c on Revenues of $18.84M

AgroFresh Solutions (NASDAQ: AGFS) reported Q2 EPS of ($0.44), $0.18 worse than the analyst estimate of ($0.26). Revenue for the quarter came in at $18.84 million.

• Net sales up 15% to $19 million for the quarter and up 16% to $57 million for first half of 2018
• For the first half, 36% 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 $35 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 $15 million in tax benefits and $12 million of gains on contingent consideration and currency recorded in the first half of 2017
• First half EBITDA[1] of $3 million down from prior year primarily due to the currency-related and contingent consideration gains recorded last year
• Quarter end cash of $43 million

Jordi Ferre, Chief Executive Officer, commented, "It’s been an exciting six months for AgroFresh with significant progress achieved along many of our strategic initiatives. The core business continues to perform well despite significantly lower apple crops in key Southern Hemisphere countries, with SmartFresh maintaining its pricing integrity while penetrating new markets, such as citrus, pears, flowers and plums. The benefits of our strategic acquisition program is also evident in our results. This was another quarter of significant contribution from Tecnidex, which continues to deliver value not only through its operations, but in synergistically enhancing the AgroFresh SmartFresh Quality System. Consequently, we recorded strong growth in both the quarter and the half. Margins reflect the ongoing evolution of our operations, primarily a shift in product mix, including Tecnidex, as well as the impact from adopting ASC 606. And, excluding Tecnidex, overhead during the first six months of this year was down compared to the first half of last year.

“From a long-term perspective, we’ve had an extremely productive first half advancing growth initiatives in new product development, innovation and partnerships. We signed an exciting agreement with Del Monte, a leader in the banana market, for our revolutionary RipeLock product, signaling further progress and inroads into the large and attractive retail segment. We also recently announced our FreshCloud initiative, including our first acquisition in the space, Verigo, which has an established Internet of Things (IoT) technology for monitoring freshness throughout the supply chain. This new technology is complementary to, and integrates with, the core of our FreshCloud strategy, our established AdvanStore capability and our genomic testing tools, which provide predictive screening of our customers’ produce. FreshCloud provides us access to large new markets where technology is quickly becoming an enabler of food preservation and waste reduction.

“Heading into the second half of the year, we are well prepared, with a strong product lineup backed by a strong balance sheet. Based on our performance in the first half, we feel positive going into the Northern Hemisphere season.”

For earnings history and earnings-related data on AgroFresh Solutions (AGFS) click here.

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