AGROFRESH SOLUTIONS, INC. MANAGEMENT REPORT AND ANALYSIS OF FINANCIAL POSITION AND OPERATING RESULTS (Form 10-Q)

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As used in this Management's Discussion and Analysis of Financial Condition and
Results of Operations ("MD&A"), the terms "Company," "AgroFresh," "we," "us" and
"our" refer to AgroFresh Solutions, Inc. and its consolidated subsidiaries,
unless the context otherwise requires or it is otherwise indicated.

The following discussion and analysis of the Company's financial condition and
results of operations should be read in conjunction with the unaudited condensed
consolidated financial statements and the notes thereto contained elsewhere in
this Report.

This MD&A contains the financial measures EBITDA and Adjusted EBITDA, which are
not presented in accordance with accounting principles generally accepted in the
United States of America ("GAAP"). These non-GAAP financial measures are being
presented because management believes that they provide readers with additional
insight into the Company's operational performance relative to earlier periods
and relative to its competitors and they are key measures used by the Company to
evaluate its performance. The Company does not intend for these non-GAAP
financial measures to be a substitute for any GAAP financial information.
Readers of this MD&A should use these non-GAAP financial measures only in
conjunction with the comparable GAAP financial measures. A reconciliation of
EBITDA and Adjusted EBITDA to the most comparable GAAP measure is provided in
this MD&A.

Note Regarding Forward-Looking Statements

All statements other than statements of historical fact included in this Report
including, without limitation, statements in this MD&A regarding the Company's
financial position, business strategy and the plans and objectives of management
for future operations, are forward looking statements. When used in this Report,
words such as "anticipate," "believe," "estimate," "expect," "intend" and
similar expressions, as they relate to the Company or its management, identify
forward looking statements. Such forward looking statements are based on the
beliefs of management, as well as assumptions made by, and information currently
available to, management. Actual results and/or the timing of events could
differ materially from those contemplated by these forward-looking statements
due to a number of factors, including those discussed under the heading "Risk
Factors" in Part I, Item 1A of our Annual Report on Form 10-K for the year ended
December 31, 2021 (the "2021 Form 10-K") as well as the update to those Risk
Factors disclosed in Part II, Item 1A of this Report. Any forward-looking
statements included in this Report are based only on information currently
available to the Company and speak only as of the date on which such statements
are made. The Company undertakes no obligation to publicly update any
forward-looking statement, whether written or oral, that may be made from time
to time, whether as a result of new information, future developments or
otherwise. All subsequent written or oral forward-looking statements
attributable to the Company or persons acting on behalf of the Company are
qualified in their entirety by this paragraph.

Company overview

AgroFresh is a global leader in delivering innovative food preservation and
waste reduction solutions for fresh produce. The Company is empowering the food
industry with a range of integrated solutions designed to help growers, packers
and retailers improve produce freshness and quality while reducing waste.
AgroFresh has key products registered in over 50 countries, and supports
customers by protecting approximately 25,000 storage rooms globally. AgroFresh's
solutions range from near-harvest with Harvista™ and LandSpring™ to its flagship
post-harvest SmartFresh™ Quality System. Additional post-harvest freshness
solutions include fungicides that can be applied to meet various customer
operational requirements, in either a foggable (ActiMist™) or liquid (ActiSeal™)
delivery form. To supplement our near- and post-harvest product solutions, our
FreshCloud™ digital technology platform includes analytical, diagnostic and
tracking services that provide a range of value-added capabilities to help
customers optimize the quality of their produce. Beyond apples, SmartFresh
technology can provide ready-to-eat freshness for other fruits and vegetables
including avocados, bananas, melons, tomatoes, broccoli and mangos.

In December 2017, AgroFresh acquired a controlling interest in AgroFresh Fruit
Protection (formerly known as Tecnidex). With this acquisition, AgroFresh
expanded its industry-leading post-harvest presence into additional crops and
increased its penetration of the produce market in southern Europe, Latin
America and Africa. For over 35 years, AgroFresh Fruit Protection has been
helping fruit and vegetable producers offer clean, safe and high-quality
products to customers in 18 countries. AgroFresh Fruit Protection offers a
portfolio of post-harvest fungicides, coatings and disinfectants, packinghouse
equipment and associated consulting and after-sale services to improves the
quality and value of customers' fruit and vegetables while respecting the
environment. AgroFresh Fruit Protection further diversified AgroFresh's revenue
by allowing the Company to provide solutions and service to the citrus industry.

Freshness is the most important driver of consumer satisfaction when it comes to products and at the same time food waste is a major issue in the industry. About a third of the total food produced in the world is lost or wasted each year. Almost 50% of all

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fresh fruits and vegetables are lost to spoilage. AgroFresh plays a key role in
the value chain by offering products and services that maintain produce
freshness and reduce waste.

AgroFresh's flagship SmartFresh Quality System regulates the post-harvest
ripening effects of ethylene, the naturally occurring plant hormone that
triggers ripening in certain fruits and vegetables. SmartFresh degrades
naturally, leaves no detectable residue and has been approved for use by many
domestic and global regulatory organizations. Harvista extends the Company's
proprietary technology into the field, including treatment of cherries early in
the growing season and near-harvest management of apples, pears and blueberries.
FreshCloud™ is our digital technology services platform, which continues to
expand. Launched in 2020, FreshCloud Quality Inspection is a proprietary
cloud-based mobile quality management service that digitizes what was formerly a
manual quality control process and captures, organizes and analyzes quality
metrics in real time. LandSpring™ is an innovative 1-MCP technology targeted to
transplanted vegetable seedlings. It is currently registered for use on
tomatoes, peppers and 14 other crops in the US. It reduces transplant shock,
resulting in less seedling mortality and faster crop establishment, which leads
to a healthier crop and improved yields.
AgroFresh's business is highly seasonal, driven by the timing of the apple and
pear harvests in the northern and southern hemispheres. The first half of the
year is when the southern hemisphere harvest occurs, and the second half of the
year is when the northern hemisphere harvest occurs. Since the northern
hemisphere harvest of apples and pears is typically larger, a significant
portion of our sales and profits are historically generated in the second half
of the year. In addition to this seasonality, factors such as weather patterns
may impact the timing of the harvest within the two halves of the year.

Factors Affecting the Company’s Results of Operations

The Company’s results of operations are affected by a number of external factors. Some of the most important factors are briefly discussed below.

Impact of COVID-19

In March 2020, the COVID-19 outbreak was declared a National Public Health
Emergency which continues to spread throughout the world and has adversely
impacted global activity and contributed to significant volatility in financial
markets. The outbreak could have a continued material adverse impact on economic
and market conditions and trigger a period of global economic slowdown. During
the three months ended March 31, 2022, the COVID-19 pandemic did not have a
significant adverse impact on our results of operations. However, there were
numerous obstacles presented and some localized financial impacts of the
pandemic, including fluctuations in foreign currency exchange rates and customer
demand and spending pattern changes. While the Company is following the
requirements of governmental authorities and taking additional preventative and
protective measures to ensure the safety of its workforce, including
implementing remote working arrangements and varying procedures for essential
workforce, we cannot be 100% certain that there will not be any incidents across
our global operations that may cause service interruptions. The rapid
development and fluidity of this situation precludes any prediction as to the
ultimate impact of the coronavirus outbreak, although the Company operates in an
industry that thus far has not been as severely impacted as others.
Nevertheless, the outbreak presents some uncertainty and risk with respect to
the Company and its performance and financial results.

Request for company offers

The Company sells to customers in approximately 50 countries and derives its
revenue by assisting growers and packers to optimize the value of their crops
primarily in the near and post-harvest periods. The Company's products and
services add value to customers by reducing food spoilage and extending the life
of perishable fruits. The Food and Agriculture Organization of the United
Nations has estimated that a growing global population will require a near
doubling of food production in developing countries by 2050 to meet the expected
demand of a worldwide population expected to reach 9 billion people.

This global trend, among others, is creating demand for the Company’s solutions. The Company’s offerings are currently protected by patent filings in 45 countries.

The global produce market is a function of both the size and the yield of the
crop harvested; variations in either will affect total production. Given the
nature of the agricultural industry, weather patterns may impact total
production and the Company's resulting commercial opportunities. The Company
supports a diverse customer base whose end markets vary due to the type of fruit
and quality of the product demanded in their respective markets. Such variation
across end markets also affects demand for the Company's services.


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Customer Pricing

The Company's offerings are priced based on the value they provide to the
Company's customers. From time to time, the Company adjusts the pricing of its
offerings to address market trends. The Company does not typically price its
products in relation to any underlying cost of materials or services; therefore,
its margins can fluctuate with changes in these costs. The Company's pricing may
include rebate arrangements with customers in exchange for mutually beneficial
long-term relationships and growth.

Integrated Direct Service Model

AgroFresh offers the Company's commercially available products, including
SmartFresh and Harvista, primarily through a direct service model. Sales and
sales support personnel maintain face-to-face relationships with customers year
round. Technical sales and support personnel work with customers to provide
value-added advisory services regarding the application of SmartFresh. The
actual application of SmartFresh is performed by service providers that are
typically third-party contractors. Harvista is applied through both ground and
aerial application, which are administered by third-party service providers or
made by our customers directly.

Most of the Company’s service providers operate under multi-year contracts. Management believes that the quality and experience of its service providers provide clear business advantages.

Seasonality

The Company's operations are subject to seasonal variation due to the timing of
the growing seasons around the world. For our core crops of apples and pears,
southern hemisphere growers harvest from late January to early May, and northern
hemisphere growers harvest from August through November. For citrus crops, there
are seasonal variations in this business due to the northern hemisphere citrus
harvest, which spans from October to March. Since the majority of the Company's
sales are in northern hemisphere countries, a proportionately greater share of
its revenue is realized during the second half of the year. There are also
variations in the seasonal demands from year to year depending on weather
patterns and crop size. This seasonality and variations in seasonal demand could
impact the ability to compare results between periods.

Foreign currency exchange rates

With a global customer base and geographic footprint, the Company generates
revenue and incurs costs in a number of different currencies, with the Euro
comprising the most significant non-U.S. currency. Fluctuations in the value of
these currencies relative to the U.S. dollar can increase or decrease the
Company's overall revenue and profitability as stated in U.S. dollars, which is
the Company's reporting currency. In certain instances, if sales in a given
geography have been adversely impacted on a long-term basis due to foreign
currency depreciation, the Company has been able to adjust its pricing so as to
mitigate the impact on profitability.

Domestic and foreign operations

The Company has both domestic and foreign operations. Fluctuations in foreign
exchange rates, regional growth-related spending in R&D and marketing expenses,
and changes in local selling prices, among other factors, may impact the
profitability of foreign operations in the future.

Significant Accounting Policies and Use of Estimates

Critical accounting policies are those accounting policies that can have a
significant impact on the presentation of our financial condition and results of
operations and that require the use of complex and subjective estimates based
upon management's judgment. Because of the uncertainty inherent in such
estimates, actual results may differ materially from these estimates. There have
been no material changes to our critical accounting policies and estimates
previously disclosed in the 2021 Form 10-K. For a description of our critical
accounting policies and estimates as well as a listing of our significant
accounting policies, see "Management's Discussion and Analysis of Financial
Condition and Results of Operations - Critical Accounting Policies and Use of
Estimates" and "Note 2 - Basis of Presentation and Summary of Significant
Accounting Policies" in the 2021 Form 10-K.

An accounting policy is deemed to be critical if it requires an accounting
estimate to be made based on assumptions about matters that are highly uncertain
at the time the estimate is made, and if different estimates that reasonably
could have been used, or changes in the accounting estimates that are reasonably
likely to occur periodically, could materially impact the financial statements.
Management believes these critical accounting policies reflect its most
significant estimates and assumptions used in the preparation of the financial
statements.

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Results of Operations

The following table summarizes the results of operations for the three months ended March 31, 2022 and March 31, 2021:

                                                                           Three Months Ended March 31,
(in thousands)                                                      2022                                   2021
Net sales                                                                  $39,889                                $38,992

Cost of sales (excluding depreciation, shown separately below)

                                                                      11,923                                 10,314
Gross profit                                                                27,966                                 28,678
Research and development expenses                                            3,051                                  3,298
Selling, general and administrative expenses                                11,892                                 13,551
Amortization of intangibles                                                 10,718                                 10,763

Operating income                                                             2,305                                  1,066
Other income                                                                   505                                 14,398

(Loss) gain on foreign currency exchange                                   (1,196)                                    433
Interest expense, net                                                      (4,947)                                (5,890)
(Loss) income before income taxes                                          (3,333)                                 10,007
Income taxes (benefit) expense                                               (164)                                  1,823
Net (loss) income including non-controlling interest                       (3,169)                                  8,184
Less: Net loss attributable to non-controlling interest                       (82)                                  (239)

Net income (loss) attributable to AgroFresh Solutions, Inc.

                                                                       (3,087)                                  8,423
Less: Dividends on convertible preferred stock                               6,436                                  6,005
Net (loss) income attributable to AgroFresh Solutions,
Inc. common stockholders                                                  ($9,523)                                 $2,418


Comparison of operating results for the three months ended March 31, 2022
compared to the three months ended March 31, 2021.

Net sales

Net sales were $39.9 million for the three months ended March 31, 2022, as
compared to net sales of $39.0 million for the three months ended March 31,
2021, an increase of 2.3%. The impact of the change in foreign currency exchange
rates compared to the first quarter of 2021 decreased revenue by $1.2 million.
Excluding this impact, revenue increased approximately 5.5%, primarily driven by
leveraging a portfolio of diverse solutions. Each of the Company's
diversification categories generated growth in the first quarter. Growth within
Fungicides & Disinfectants was driven by market penetration and product
expansion in the Middle East. The Other 1-MCP category was supported by
Harvista, which experienced strong growth in South Africa, supported by an early
harvest and larger crop size. This was partially offset by SmartFresh for Apple
declines in the Latin America region due to unfavorable weather events.

Cost of sales

Cost of sales was $11.9 million for the three months ended March 31, 2022, as
compared to $10.3 million for the three months ended March 31, 2021. Gross
profit margin was 70.1% for the three months ended March 31, 2022 versus 73.5%
for the three months ended March 31, 2021. The lower gross margin reflects the
Company's strategic transition to a more diversified product portfolio, as well
as higher materials costs associated with inflationary pressures.

Research and development costs

Research and development expenses were $3.1 million and $3.3 millionrespectively, for the three months ended March 31, 2022 and March 31, 2021. The decrease is mainly related to the timing of projects.

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Selling, General and Administrative Expenses

Selling, general and administrative expenses were $11.9 million for the three
months ended March 31, 2022, compared to $13.6 million for the three months
ended March 31, 2021, a decrease of 12.2%. Included in selling, general and
administrative expenses were $0.3 million in the current year and $0.8 million
in the prior year of costs associated with non-recurring items that include M&A
and litigation, along with severance. Excluding these items, selling general and
administrative expenses decreased approximately 9.0% in the first quarter versus
the prior year period, driven primarily by the timing of expenses.
Amortization of Intangibles

Amortization of intangible assets was $10.7 million for the three months ended
March 31, 2022, compared to $10.8 million for the three months ended March 31,
2021.

Other Income

Other income was $0.5 million for the three months ended March 31, 2022, as
compared to income of $14.4 million for the three months ended March 31, 2021.
Other income in 2021 was due to the receipt of proceeds from the settlement of a
litigation matter.

(Loss) Gain on foreign currency

Loss on foreign currency was $1.2 million for the three months ended March 31,
2022, as compared to a gain of $0.4 million for the three months ended March 31,
2021. During the first quarter of 2022, foreign currency losses were recognized
related to U.S. dollar intercompany receivables from the euro and Argentinian
peso, which grew weaker relative to the U.S. dollar.

Interest expense, net

Interest expense was $4.9 million for the three months ended March 31, 2022, as
compared to $5.9 million for the three months ended March 31, 2021. The decrease
was primarily due to higher interest income on investments of $0.3 million,
lower debt amortization of $0.3 million and to lower interest on the long-term
debt due to a lower principal balance of $0.2 million.

Income taxes

Income tax benefit was $0.2 million for the three months ended March 31, 2022,
compared to income tax expense of $1.8 million for the three months ended March
31, 2021. For the three months ended March 31, 2022, the quarter's largest
effective tax rate modification is related to foreign exchange currency gains
and losses and certain non-taxable items.




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Non-GAAP Measures

The following tables set forth the non-GAAP financial measures of EBITDA,
Adjusted EBITDA and non-GAAP constant currency net sales. 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 for incentive bonuses and bank covenant reporting), are more
indicative of future 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 of the non-GAAP financial measures of EBITDA and Adjusted EBITDA to their most directly comparable GAAP financial measure, net income (loss) including investments not giving control:

                                                                            Three Months Ended March 31,
(in thousands)                                                       2022                                  2021
GAAP net (loss) income including non-controlling interest                 ($3,169)                                 $8,184
Depreciation and amortization                                               11,444                                 11,423
Interest expense (1)                                                         4,947                                  5,890
Income taxes (benefit) expense                                               (164)                                  1,823
Non-GAAP EBITDA                                                             13,058                                 27,320
Share-based compensation                                                       988                                    891
Severance related costs (2)                                                     73                                      -
Other non-recurring costs (3)                                                  186                                    766
Loss (gain) on foreign currency exchange (4)                                 1,196                                  (433)

Other income (5)                                                             (515)                                      -
Litigation settlement                                                            -                               (14,392)
Total Adjustments                                                            1,928                               (13,168)
Non-GAAP Adjusted EBITDA                                                   $14,986                                $14,152



(1)  Interest on debt and accretion for debt discounts.
(2)  Severance costs related to restructuring and cost optimization initiatives.
(3)  Costs related to certain professional and other infrequent or non-recurring
fees, including those associated with restructuring, litigation and M&A related
fees.
(4)  Loss (gain) on foreign currency exchange relates to net gains and losses
resulting from transactions denominated in a currency other than the Company's
functional currency.
(5)   Other income relates to non-recurring data compensation income.

The following is a reconciliation of non-GAAP constant currency net sales to GAAP net sales:

                                                                         Three Months Ended March 31,
(in thousands)                                                   2022                                   2021
GAAP net sales                                                          $39,889                                $38,992
Impact from changes in foreign currency exchange rates                    1,231                                      -
Non-GAAP constant currency net sales (1)                                $41,120                                $38,992



(1)   The Company provides net sales on a constant currency basis to enhance
investors' understanding of underlying business trends and operating
performance, by removing the impact of foreign currency exchange rate
fluctuations. The impact from foreign currency, calculated on a constant
currency basis, is determined by applying prior period average exchange rates to
current year results.

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