AgroFresh Solutions, Inc. announced its financial results for the first quarter ended March 31, 2020.
Jordi Ferre, Chief Executive Officer commented, "We continue to look at our business in halves versus quarters, to capture the completion of both the southern and northern hemisphere seasons. Several of our key southern hemisphere markets in Latin America are experiencing adverse growing conditions this season, which is creating a delay in harvest timing and to a lesser extent impacting yields, which weighed on our year-over-year revenue performance. AgroFresh's local presence and service-oriented culture is the foundation of our resilient business, providing us the ability to navigate this challenging period. Despite the obstacles presented by the COVID-19 pandemic, we have continued to provide the necessary products and services to help growers maximize the value of their crops this season, and will maintain that commitment regardless of the circumstances we face."
Net sales for the first quarter of 2020 decreased 15.2%, to $33.0 million, compared to $38.9 million in the first quarter of 2019. Excluding the impact of foreign currency exchange, which reduced revenue by $2.1 million compared to the first quarter of 2019, revenue decreased 9.8%. The net sales decrease was primarily the result of adverse harvest conditions experienced in key Latin American markets, such as Brazil, Chile, Argentina and Australia which are impacting harvest timing, logistics and yields.
Gross profit for the first quarter was $24.5 million compared to $27.6 million in the prior year period. Gross profit margin increased 330 basis points to 74.2% versus 70.9% in the prior year period. The higher gross margin was primarily the result of supply chain efficiencies that were put in place at the end of 2019.
Selling, general and administrative expenses decreased 13.8%, to $13.7 million in the first quarter of 2020 as compared to $15.9 million in the prior year period. Included in selling, general and administrative expenses were $1.7 million in the current quarter and $3.2 million in the prior year quarter of costs associated with non-recurring items that included M&A and litigation. Excluding these items, selling general and administrative expenses decreased approximately 5.8% in the first quarter versus the prior year period, which reflects the Company's ongoing cost optimization initiatives.
First quarter 2020 net loss was $3.8 million, compared to net loss of $12.6 million in the prior year period.
Adjusted EBITDA was $11.2 million in the first quarter of 2020, compared to $12.5 million in the prior year period. Adjusted EBITDA margin improved 190 basis points to 33.9% versus the prior year.
As of March 31, 2020, cash and cash equivalents were $28.3 million.
To see the full financial results, click here.