AgroFresh Solutions, Inc. (NASDAQ:AGFS) Q2 2019 Earnings Conference Call Transcript

Aug 08, 2019 • 08:00 am ET

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AgroFresh Solutions, Inc. (NASDAQ:AGFS) Q2 2019 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good morning, and welcome to the AgroFresh Solutions' Second Quarter 2019 Conference Call. [Operator Instructions]. After today's presentation, there will be an opportunity to ask questions. Please also note, today's event is being recorded.

At this time, I'd like to turn the conference call over to Jeff Sonnek, Investor Relations at ISR [Phonetic]. Sir, please go ahead.

Executive
Jeff Sonnek

Thank you, and good morning. Today's presentation will be led by Jordi Ferre, Chief Executive Officer; and Graham Miao, Chief Financial Officer. The comments during today's call and the accompanying presentation contain forward-looking statements within the meaning of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995.

All statements other than statements of historical fact are considered forward-looking statement. These statements are based on management's current expectations and beliefs, as well as a number of assumptions concerning future events.

Such forward-looking statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from the results discussed in the forward-looking statements. Some of these risks and uncertainties are identified and discussed in the Company's filings with the SEC.

We'll also refer to certain non-GAAP financial measures. Please refer to the tables included in the slides that accompanying this presentation, as well as the press release, which can be found on the Investor Relations section of our website agrofresh.com, for reconciliations of non-GAAP financial measures to their most directly comparable GAAP measures.

I would now like to turn the call over to Jordi Ferre.

Executive
Jordi Ferre

Thank you, Jeff and good morning everyone. Please turn to Slide 3. I am pleased to report the completion of a strong first half of 2019. We were able to generate strong second quarter revenue growth of 15%, which supported first half revenue growth of 6% over the prior year periods.

Adjusted EBITDA grew 57% for the second quarter and 41% for the first half. The improved second quarter performance was expected, due to some harvest delays that we highlighted during our first quarter earnings call.

Organic product expansion and capitalizing on cross-selling opportunities across our global footprint are key elements of our diversification strategy. To this end, we continued to make progress this quarter by generating strong organic growth within our Harvista, Tecnidex and FreshCloud solutions.

Our core SmartFresh solution was flat for the first half of 2019 versus the prior year, which we view as very encouraging in spite of a 1% decrease in the overall Southern Hemisphere apple crop.

From a crop diversification perspective, revenues generated by apples in the second quarter were 65% versus 71% for the same period a year ago. For the trailing 12 months period ended June 30, 2019, we generated 68% of our revenues in the Northern Hemisphere, while the Southern Hemisphere represented 32%. Europe represents our largest region at 41% of our global revenue mix.

As we looked over the future, we continue to focus on driving sustainable growth through a broader and more diversified product portfolio and crop reach, while optimizing