AgroFresh Solutions, Inc., a global AgTech innovator providing a range of solutions, digital technologies and services to enhance the quality and extend the shelf life of fresh produce, today announced its financial results for the second quarter ended June 30, 2022.
Clint Lewis, Chief Executive Officer, commented, “I am proud of our team for their execution this quarter, which marks a strong finish to our Southern Hemisphere growing season. Our diversification strategy continues to drive results — diversification revenue increased 21.0% in the year-to-date period encompassing our Southern Hemisphere season, supported by double-digit growth in each of our diversification product solution categories."
Mr. Lewis added, “The advantages of diversification are clear. Beyond driving incremental revenue growth, diversification also serves as a risk mitigation hedge as it makes us less susceptible to adverse impacts in any one market, product, crop or customer. Coupled with an asset-light business model and smart resource allocation to enable growth, we have a platform that is more durable, defensible, and sustainable than ever. This is demonstrated in our ability to generate strong growth in revenue and Adjusted EBITDA through the first half of 2022, despite a host of geopolitical, macroeconomic and environmental challenges. At the same time, the post harvest industry for fresh fruit and produce continues to be supported by broad macro tailwinds that require innovation to ensure a consistent global supply of high quality fresh produce and the increasing importance of addressing food waste.”
1Adjusted EBITDA is a non-GAAP financial measure. Please see the information under “Non-GAAP Financial Measures” below for a description of Adjusted EBITDA and the table at the end of this press release for a reconciliation of this Non-GAAP financial measure to GAAP results.
Financial Highlights for the Second Quarter of 2022
Net sales for the second quarter of 2022 increased 17.5% to $25.8 million, compared to $21.9 million in the second quarter of 2021. Excluding foreign currency translation impacts, which reduced revenue by $1.4 million as compared to the second quarter of 2021, revenue increased 23.9%, primarily driven by leveraging a portfolio of diverse solutions. Each of the Company's diversification categories generated growth in the second quarter, led by Antimicrobials and Coatings expansion in EMEA. The Other 1-MCP category was driven by SmartFresh expansion in South Africa, Chile, and Australia and strong demand for Ethylbloc in North America amid the recovering flower industry. SmartFresh for Apple experienced growth in Latin America despite unfavorable weather events and benefited from harvest timing differences.
Gross profit for the second quarter of 2022 was $16.5 million, compared to $14.8 million in the prior year period. Gross profit margin was 63.9% as compared to 67.6% in the prior year period. The lower gross margin primarily reflects the Company’s strategic transition to a more diversified product portfolio and higher material costs associated with inflationary pressures, partially offset by price increases.
Research and development costs were $2.9 million in the second quarter of 2022, compared to $3.5 million in the prior year period, due primarily to the timing of projects.
For more information: agrofresh.com