Highlights
- 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
Net sales for the full year 2016 were $160 million, down 2.5 percent from $164 million in the prior year. Full year 2016 revenues reflect a 54 percent growth in Harvista sales offset primarily by a slight decrease in SmartFresh sales due mainly to increased competition in North America.
Cost of sales for the full year 2016 was $60.3 million, compared to $102.4 million for the full year 2015. Included in these costs were $30.4 million in 2016 and $73.1 million in 2015 of amortization of inventory step up. If the amortization of inventory step-up is excluded, gross profit margin was 81 percent in 2016, down slightly from 82 percent in 2015.
Research and development expenses for the full year 2016 were $14.8 million, down from $16.9 million in 2015 driven by the discontinuation of certain projects following the Company’s separation from The Dow Chemical Company (“Dow”) on July 31, 2015.
Net loss for the full year 2016 was $111.8 million compared with a net loss of $28.5 million for the full year 2015. The increase in net loss is attributable to impairments and other non cash charges, higher interest expense and SG&A associated with having debt and being a public company for the full year in 2016, partially offset by lower inventory step-up amortization and higher gains on contingent consideration.
EBITDA was $31.1 million for the full year 2016, down significantly versus $96.2 million of EBITDA in 2015 driven by impairments and other non-cash charges along with higher SG&A, partially offset by higher gains on contingent consideration.
Financial Highlights for the Fourth Quarter
Net sales for the fourth quarter of 2016 were $52 million, compared to $51 million in the fourth quarter of 2015. Cost of sales for the fourth quarter of 2016 was $11.8 million versus $46.0 million in the fourth quarter of 2015. Cost of sales in the prior year period included $34.4 million of amortization of inventory step up. If the amortization of inventory step-up is excluded, gross profit margin was 77 percent in the fourth quarter of 2016 versus 77 percent in the fourth quarter of 2015.
Research and development expenses for the fourth quarter of 2016 were $3.5 million versus $3.3 million in the fourth quarter of 2015.
Net loss for the fourth quarter of 2016 was $68.9 million compared to net loss of $0.4 million in the same quarter of 2015. The higher net loss is attributable to impairments and other non-cash charges, partially offset by lower inventory step-up amortization, higher gains on contingent consideration, and lower SG&A costs.
EBITDA was $(4.3) million for the fourth quarter of 2016 versus $44.6 million in the same quarter of 2015. The period-over-period change in EBITDA is mainly attributable to impairments and other non-cash charges, partially offset by higher gains on contingent consideration and lower SG&A costs.
The balance sheet as of December 31, 2016 reflects long-term debt of $393 million and short-term debt of $15.3 million associated with the financing of the transaction with Dow that resulted in AgroFresh becoming a stand-alone company on July 31, 2015 (the “Business Combination”) At December 31, 2016, the Company’s cash position was $77.3 million.
The Company generated $30.4 million of cash from operating activities in 2016, an increase of more than 100 percent from $13.2 million in 2015.
For more information:
Katherine Harper
AgroFresh Solutions
FAGFSIR@AgroFresh.com
www.sec.gov
www.agrofresh.com