AgroFresh Solutions Reports Results for Fourth Quarter and Full Year 2020

• Full year 2020 net sales were $157.6 million, a decrease of 7.3% (6.2% on a constant currency basis) versus the prior year.
• Selling, general and administrative expense decreased 9.4% to $53.9 million for the full year 2020 and decreased 1.8% when excluding nonrecurring items related to litigation, severance and M&A, versus the prior year.
• Net loss of $53.0 million for the full year 2020, which included $43.7 million of amortization of intangibles.
• Adjusted EBITDA¹ was $60.1 million for the full year 2020 and adjusted EBITDA margin was 38.1%.

PHILADELPHIA, March 10, 2021 (GLOBE NEWSWIRE) — AgroFresh Solutions, Inc. (“AgroFresh” or the “Company”) (Nasdaq: AGFS), a global leader in produce freshness solutions, today announced its financial results for the fourth quarter and full year ended December 31, 2020.

Jordi Ferre, Chief Executive Officer, commented, “2020 proved to be a challenging year on multiple fronts as we faced an unexpected smaller North American apple crop, which decreased approximately 11% creating lower storage volumes, COVID-19 related impacts that also caused delays in new diversification project rollouts, changes in customer short-term purchasing decisions, and currency fluctuations. However, our organization was well prepared to navigate these complexities, both in terms of operational adjustments, and because of our enhanced financial flexibility due to our recent comprehensive refinancing, and we continue to see progress with the cost optimization efforts that began in 2019. Our business remains sound and we continue to maintain a strong margin profile that demonstrates the value of the AgroFresh franchise in the marketplace today.”

Mr. Ferre continued, “Looking ahead to 2021, we are energized about our diversification pipeline and the innovative solutions that we are bringing to the marketplace to enhance freshness and drive value for our customers. Recently, we launched VitaFresh™ Botanicals, a line of plant-based, edible crop-specific coatings that can be applied in a flexible and operator-friendly format. We believe we are well positioned with growth platforms that include Harvista™ which is now available for sale this Southern Hemisphere season in Brazil and New Zealand, and FreshCloud™, our digital technology platform, which has seen customer adoption by large global operators. These examples are representative of our ongoing diversification initiatives, which we will continue to drive in the future, supported by our global registration platform.”

Financial Highlights for the Fourth Quarter of 2020

Net sales for the fourth quarter of 2020 decreased 14.9% to $51.9 million, compared to $61.0 million in the fourth quarter of 2019. Excluding foreign currency translation impacts, which increased revenue by $0.9 million compared to the fourth quarter of 2019, revenue decreased 16.3%, primarily driven by a smaller North American crop size resulting in lower storage volumes, a heightened competitive landscape, as well as difficult comparisons versus the prior year period in Europe as the industry experienced later than normal harvest seasonality which shifted sales from third to fourth quarter of 2019.

Gross profit for the fourth quarter was $38.1 million, compared to $47.4 million in the prior year period. Gross profit margin was 73.5% compared to 77.8% in the prior year period. The lower gross margin was primarily due to fixed costs on lower sales volume and product mix.

Research and development costs were $4.0 million in the fourth quarter of 2020, compared to $4.4 million in the prior year period, due primarily to the timing of projects.

Selling, general and administrative expenses increased 12.4% to $13.9 million in the fourth quarter of 2020, as compared to $12.4 million in the prior year period. The main drivers behind the increase were higher non-recurring expenses related to severance, as well as the phasing of some discrete expenses on a year over year basis.

Fourth…