AGFS - Earnings call transcript Q4 2018

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Operator

Good afternoon and welcome to the AgroFresh Solutions Fourth Quarter and Full Year 2018 Conference Call. All participants will be in a listen-only mode. [Operator Instructions] 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 ICR. Sir, please go ahead.

Jeff Sonnek

you. Thank welcome. and afternoon Good presentation will Officer; Ferre, Executive by be Graham Miao, led and Jordi Chief Chief Today’s Financial Officer. today’s the safe The forward-looking Act of Private during call accompanying Reform the comments presentation Securities statements Litigation within provisions meaning harbor the XXXX. of of the and contain considered statements All are than of statements statements. other facts historical forward-looking statements based on events. as number a as concerning are management’s future beliefs, These of well current expectations assumptions and cause risks Such results forward-looking in to subject materially uncertainties the to actual statements could from known and differ and the that unknown forward-looking are results discussed statements.

uncertainties press like Some turn comparable that found of can to the website identified accompany the for well the a as section this measures to Jordi? the Ferre. Relations in risks measures. of the GAAP refer over be I also most agrofresh.com, Investor to Please and the to with company’s of presentation, refer as SEC non-GAAP the tables now measures. financial will are filings call our the attached reconciliation slides to discussed the Jordi financial non-GAAP certain and directly release, which in would to

Jordi Ferre

Jeff and X. everyone. Please good turn to Slide afternoon, you, Thank

From revenue new mix and the of and with revenue region a North XXXX XXXX bear apples XXXX, going revenue. America million our XXXX, a and represented fruit deliver will one-third growth business of Diversifications as versus year by cost This believe the in Tecnidex XX% and in was the geographic over XX% our and its for on pear. of outside on of outside largest products year over There addition fungicides, reached perspective, was focus penetration forward. crops improvement we pro second into initiatives full a with full-year For versus full growing material of structure driven that revenue well implementing approximately the operating creating basis. represented for initiatives diversification, and business accelerated our X% of increased in the in total X% transitional in increase year sales we portfolio was generated coatings, company’s the prior as which is citrus XXXX. EBITDA. total a $XX adjusted enjoy XXXX being sales the Tecnidex led half the XX% forma generated year and waxes, grew along of with year comprehensive revenue for by in Europe is company.

our XX to the these in We our during XX% top also very of weaker a approximately a the fourth continue Northwest our Pacific only customers help global revenue. representing build diversification crop with base Collectively apple customer diversified of offset strategy quarter. aspects

the organic will growth toward more which to of organic, to continue saw allow deliver turn coverage our into the expect XXXX received full-year product. are initiatives LandSpring and we revenue. geographies. in comprised Harvista for proud in regulatory create and our to new examples saw an of was with launches France, U.S. this tomato XX% for of the efforts versus today. us crop will to a European future, into our revenue of and give standard the down versus revenue last market. ASC-XXX of strategy the and acquisitions, excluding delivering look decline XXXX are and we X% operation Italy, grown for prior support continue and our as XXXX. capabilities of essentially focus approval quarter help an California, just To which As the on and provide Both market of of the Portugal. approval new tomatoes fourth the are growth, now a was registration key that dynamics business. year our SmartFresh entries expansion U.S. for product in partnerships. period we following offering we cost-efficient of The We approvals increases the us for accounting Harvista in enabler improved capabilities. create year to XX% strategic SmartFresh in our recovery approximately market overall the initiatives, in of LandSpring expansion. in impact growth and to broaden These deferred in geographic flat diversification received further with which opportunities the expansion Belgium for the registration recent and apple opens we foreign registration global Please in through are comprehensive The product our to exchange year, California Germany tomatoes where penetration Slide entire X. us Australia

apple broader affected led region smaller also have the crops outside traction Northwest the of was negatively during pears. by harvest. We quarter U.S. earlier Pacific in apples of of XXXX a The and by fourth

the by approximately Northwest for in Specifically, contracted Pacific estimates apple our XX% production XXXX.

by solution. a impacted crops, and global season growth in broad normal a our Additionally, many trade post-harvest and with Thanks of put adversely apple difficult geographic weak which dispute diversification in the Northwest experienced utilization lower season a due Pacific apple, in pressure coupled the additional of were to products. other to yields the than of China, cherry effects offset with pricing current customers on markets,

contributed than fact, X. for of product in today new full-year represents Northwest introduced of season that approach region and growth company’s better more that in be $XX XX% SmartFresh will We our a XXXX less solutions being Please of change fungicides that as million to our XX% about to access expertise post-harvest aggressive In expansion. core business company to includes with solution the the total more we one market. served culture broader post-harvest to This believe Harvista knowhow Pacific a a such additional revenue market. impactful Slide XXXX one technology global Tecnidex the revenue. a since was to complete from and of citrus business and catalyst provides crop, and a set a coatings citrus particularly into represent estimate as turn

a Diversifying I growth mentioned, core the our base business our on the continued Tecnidex our core central market. half progress we As we saw Within this XXXX. strategy second continue product expect previously in to saw broader in continue increase XXXX. is portfolio, front of SmartFresh these we crop to operating and on into pear solid and to penetration to

For example, growth was in revenue and XXXX. Argentina, Chile, Belgium, revenue million year in adding pear approximately the double-digit the $X full Netherlands, collectively versus up

XXXX, plums, revenues XXXX. and other full-year avocados, primary XX% This year of proportion cherries, melons. apples increased pears, in XX% full the from than bananas, For being just compared citrus, with crops to the drivers to

the amended Northwest key call our specially our we for foggable for The are: will ActiMist offerings. market allow the most with our strength in since strategy. support bundling addressable our This SmartFresh approval a notable service approval is to the product the regulatory fungicide since solution. co-treatment was to First, Our registration Pacific key U.S. expanding last investor is

Second, SmartFresh XX% SmartFresh represents today ProTabs of revenue. our total

ProTabs We crops fresh have peach, We continued melon, in and approvals expand as Europe nectarine, XXXX. market continue a kiwifruit. applications pear, into such other share anticipate apricot, in to will of to increase ProTabs

through are ProTabs XXXX. a protection patent As reminder, under

opening in in transplanted the Third, stress better tomatoes SmartFresh sales our LandSpring. seedlings approval the in and And while XXXX in in we the Eastern to of attractive We for This applied fruit obtained for tree of in nursery market. India $X to total market. near-harvest limited first U.S. sell a LandSpring Synergistic into and approval infusing that an to the recently achieved promoting third our fourth, is which the gross a of future still have on period. that approximate turn Half internal complements running party is helps approval with customer SmartFresh. of represents respiration Harvista addressable Slide trials million of Please margins. an fruitfulness the field. and slow ripening product Solution extended U.S. is manage California, enjoy the the dedicated this production and million are process, resources XX% and $X to through the X. We extended Harvista quality anticipation

Northwest full in down we the Pacific year negative have Harvista For sales the factors by XXXX, touched driven earlier. X%, were of on that the

strongly Harvista. experience positive continue on will we However, based in customers the XXXX applying of to growth that we return believe when to results

We acreage will that pre-harvest will effort distributor aggressive our a with for include reach. a to appointment expand commercial the more couple these

as expanded also see in in XXXX during growth the such We trials States is successful for yield, increase cherries United Harvista where average crops in significant. in XX% and other which an other regions indicated

launch Tecnidex global performance the fourth Chile quarter is Tecnidex to that for planning which represents integrated XXXX strong blueberries with a post-harvest portfolio the currently able and and a We million. market forma our it turn to we of estimate million is X% crop of in for revenue within leverage in regulatory we include represents leader a of additions long-established is and pro is to estimate continued global the Please and product an in by regional Expanding global in addressable supported in pam fully AgroFresh year blueberries recent $XX the Australia. producers approval this for is with total relationships Slide were a apples and The driver are to product our market approximately providing we full to waxes. The diversification was U.S. apples strategy. Harvista Australia acres. Concerning with full $X fungicides, in XXXX. segment citrus XX% into and of during and total expertise in XXX,XXX million market team. market key citrus XXX,XXX coatings penetration sales for almost portfolio apples, year the Tecnidex Chile, by of to an approvals Additionally, acres alignment Since the approximately high technology grew fruits, pears apples addressable on expanded contributed expanding established for category X. have and diversification and de-fungicide the apples in of XXXX. fungicides $XX cherries basis into addressable sales deep the and post-harvest

XXXX the for another initiate pilot RipeLock confidence solution to four planning X meaningful turn in bananas Please and to retailer. give of California able deliver the for we collective days Additionally, we aim business XXXX. are X. customers to life shrink will to Tecnidex yellow the continue to is palm that reduce to be growth XXXX. sales extend and us citrus accelerate the Together, Slide in ideal these in with in efforts to expansion

growing a full still for year. prior revenue to RipeLock than our compared year the small XXXX, from more doubled the Although base

was worldwide. such than as XXXX, new are further Australia. as stores RipeLock In expecting grocery During enter used markets expansion we of XXXX, in year. stores solution number the about of the previous we the X,XXX XXX more

expanding our large In with collaboration the than been XX with trials fact, grocery and Europe, U.S., has to retailers into pipeline we ongoing more The Monte currently Australia. in and market. reach key Del U.S. the have

potential We planning XXXX, more crops the run into to strategy broccoli And during RipeLock have Both among growing we initiated and quarter to also highest test the produce are with expand customers. avocado. and other such of fresh category. second are profitable the as

and develop R&D We internal product new through through our strategic continue partnerships. to pipeline

on have lead fresh quality actionable can through FreshCloud we to [indiscernible] the collection, return. will into that our due post-harvest We believe be FreshCloud, become customers Slide the decades in this transforms X. in about XXXX, on health launched initiative to data supply for more industry produce their In AgroFresh cloud-based supply expertise. global these officially solutions the insights chain. turn and maximize that is standard technical key and that ideal Please based long along proprietary produce a time. news data help position platform freshness our provides we an fruit initiatives translated July chain monitoring

Collaboration monitor Pagoda cherries for shelf-life predict and are We into ongoing to our including imported fresh quality fruits, leveraging China.

let Although during platform. progress through highlights. to expect were digital some to as speak XXXX we Graham? we FreshCloud of now expand and modest Graham in XXXX build make our the continue financial revenues I’ll

Graham Miao

call. good you, on to turn Thank Please and Jordi, a to everyone afternoon XX. the Slide

geographic the the review the sales of XXXX. and net like half fourth year of first to Beginning of I hemisphere everyone northern full Sales year the throughout are quarter concentrated the and the of year. the with financial the the hemisphere in sales. me the half year. in highlights in seasonality are remind concentrated for southern our the sales Let of the would in second

our profitably result, is markets. in influenced our franchise northern the fourth As SmartFresh by a quarter

post-harvest million serve SmartFresh Now, ability to sales for business to reach of decreased decline core compared Europe's Net to of fourth business XXXX. growth America, $XX.X X.X% the quarter the year-over-year. turning in Despite XX% customers worldwide. financials. million, to a North fourth and quarter benefited from the delivered XXXX from $XX.X our global the strong

revenue which XXXX year. reminder, revenue million a XXXX XX% XXXX. fourth last our acquired December period the in As of complement a portfolio versus to interest company post-harvest the Tecnidex, in growth $X.X generated Europe controlling our X% we business in to overall same represented quarter

As overall addition less our addition $XX.X Jordi our to SmartFresh in Due in million, mentioned Tecnidex, several the smaller Europe, remarks, Northwest XXXX, the by sales which increased in in of affected Harvista, of fourth revenue America by of year The sales North the site Northwest XX% crop offset in apple of and SmartFresh by Pacific and net company's represented factors quarter, to to For with of season in business diversification United growth States. Pacific was driven a declines the the Tecnidex, than his shorter contributed growth was including partially SmartFresh SmartFresh full X% the increase and the impacted both the million. a XXXX. along $XXX.X that strategy ongoing

million For solid Tecnidex performed services the for below a our representing us. expanded the to growth This revenue, full-year, acquisition market. well post-harvest has X% year-over-year. $XX.X in citrus And has

advantage to AgroFresh where such leverage opportunities products has already strong the take the We customer relationship. into to of America's have areas Tecnidex as begun

to Now, let the sales additional color me add driver. net

a X% a were without approximately sales versus reminder, full-year the growth full-year organic included revenue representing XXXX. Tecnidex. As million, Tecnidex X.X% $XXX the for in decline XXXX Total the

effect had exchange, X.X% sales. of euro in impact by and a the the Foreign combined revenue deferred from reduction driven ASC-XXX of

and as as base our fourth our business Slide was and was our turn ASC-XXX of to such were quarter, margins. RipeLock. revenue product and essentially discuss strategy diversifying exchange Excluding will broader assortment we accounting, margin expectations a remained we of of Please Harvista, foreign impact flat. solution In the execute mix XX the consistent Tecnidex, XX.X% with with gross

decreased increased For XX.X% X% impact million, revenue. in pricing ASC-XXX from prior year the year. $XXX.X the the in our profit the to to business, to full quarter for full diversification full year strategic of the XXXX. XXXX the margins XXXX, year gross compared and Gross reflecting deferred Also XX.X% initiatives,

XX. Turning to Slide

align revenue focused We initiatives the including million better create XXXX were began our quarter business and continue efficiency operating prior and to cost our to for the [ph] X% of our of structure We these in greater on to expenses, SG&A R&D be base. operating versus fourth results year. optimization $XX.X see with the increased to

year. expenses added million, XX% expenses which basis, down a million operating fourth $X X% million, full quarter, to operating by $XX.X addition Tecnidex, Tecnidex. the Excluding were to in compared On increased of driven $XX.X to year prior the

which million expense operating compared X.X% to year, the Tecnidex, million $XX.X to were contributed reduced full $X.X for Excluding by XXXX.

specific fourth items. Research Now, down $X.X XXXX, the let about in expense and expenses the me development slightly talk year of quarter period. versus were prior million

apples. citrus related year R&D XXXX, the $XX.X spending year full to reflected our additional prior XX% year. diversification million general, expenses including the the of drive and basis the expenses, R&D resource at to on stable, strategy supports continued for This prior For that R&D that reported at program compared Selling, million million. versus $XX.X included $X.X beyond Tecnidex initiatives administrative were were Tecnidex. quarter, fourth expenses a down allocation

Excluding down SG&A were XX%. Tecnidex, expenses million, $XX.X

For versus $XX.X selling, administrative X% expenses, including million, general, up and XXXX. the were Tecnidex full-year,

million, Tecnidex, year. down the Excluding for $XX.X expenses were X% SG&A

down cost-optimization in to in yield as a the loss which to in versus XXXX. by result Reform. Agreement generate initiatives quarter million a $X.X our million XXXX results expect Tax Going turn Net we mainly ago was Tax in fourth fourth Slide million Please decrease mark-to-market quarter the XX. the XXXX forward, in to Receivables began benefit XXXX $XX.X related net The was to period. of was the U.S. of gain year $XX income one-time driven full-year

full-year net million was the compared of in XXXX, net to For loss $XX.X million, $XX.X income XXXX.

million million] driven of to a a million. EBITDA of evaluation reminder, the net down and million of the from as of aforementioned year benefited net period. prior last Adjusted reversal. foreign year result benefit of tax was approximately gains fourth million $XX.X by the current [$XX loss year allowance gain, intangibles income exchange in was XXXX on $XX As $X.X amortization The deferred $XX versus mark-to-market quarter the TRA of

increase was offset million. compared to prior capital For XXXX, period. to payments at along number EBITDA flat year sales on operations an by adjusted provided year was working was full by we by higher to higher long-term trade the payment Turn $X Tecnidex debt, the by was Slide in interest expenses $XX.X by $XX year-over- in because Cash timing XXXX, compared interest gross payments million selling, year The year XX. our of acquisition. year million, year-over-year XXXX of made in administrative essentially in interest the for general, and three payments higher to full million $XX.X higher the change five driven lower million $XX.X of XXXX, The the were driven impact related with full margin rates. and

saw also period. the $X.X currency XXXX, We cash $X.X tax compared XXXX, full million million Capital received for settlement by in be non-recurring. $X million gains million expenditures were interest in of year higher will cash unrealized France $X.X to an These rate were payments from swap. to partially the of foreign ago in which year related the offset

Our calls annually. to X% generally sales capital asset-light business of model limited expenditures, X% for from which range

debt Total with XXXX. the balance cash meaningful $XXX.X repayment was in Tecnidex, Beyond complete contractual $XX.X debt. a December July down. purchase $X.X to to until of as million sheet million. we perspective, to payment of and $XX.X From operating XXXX long-term a million maturities for used a of obligations satisfy Verigo million for activities, $X.X $X.X related XX% our no was XXXX. million, XX, acquisition million

for Subsequent XX, undrawn financial to on believe December we existing $XX.X certain facility advantages is January quarter-end, us of credit first the as company’s to and financial XXXX. meet our needs to in ability to our amended as that working give for an it access from which signed December more to Our amended the needs revolver This extend current terms and to our covenants, XX, an XX, XXXX agreement July step our us right-sized XX, XXXX We XXXX optimize the facility. contains flexibility increased capital the revolver. revolving was million will revolver important facility structure. efforts utilize and our new capital to

call remarks before for I’ll Now, opening Jordi to his the call the to closing back Q&A. turn

Jordi Ferre

Graham. you, Slide XX. to Thank Please turn

As at I company. was outset, XXXX the transitional for the mentioned a year

refocused the growth enterprise I the to have we We team and meet in XXXX. confident sustainable solid right more forward now place on our goals and am results delivering leadership to have that

to intend During year, on business a to in putting with we’re focus XXXX throughout we to a the building that diversified and yield place growth net expect optimization the continue sales deliver initiatives XXXX. benefit cost more organic

we that questions. meet open And Additionally, of the improving our necessary our we Thank please line sheet diversification to is that, health our for with long-term support towards to the you. growth are working initiative. operator balance can strategies ensure that

Operator

[Operator RF Instructions] Mr. question. Our first line Please is with question live. from comes line from your your Duan Roger proceed of the Lafferty. Duan,

Roger Duan

guys you hear Can afternoon. Good me?

Operator

Yes.

Roger Duan

hi, Jordi, Hi. Hi, Graham. Okay.

So, of couple questions.

substantially year little is give like this according going in looks Are to well it on more apple guys you us this? as all, and a guys seeing of Europe maybe this? bit Can confirm First you this be USDA forecast. color to production up

Jordi Ferre

Yes. speaking. here Jordi Roger. Hi,

the mentioned that that production, we production was apple up. call in European the think I

Central we mentioned countries think some in I specifically Europe.

is that So definitely confirmed.

Roger Duan

year-over-year. something mention XX% Yes. they did it Because increase was Yes. like

magnitude confirm increase. to So, the I just of want the

Okay.

the you in us that going talk can of play how and bit of Blockchain FreshCloud blockchain update Oppenheimer's more it to FreshCloud? guys the maybe you guys Second about a offering? attended your is little noticed all, on I Summit, progress

Jordi Ferre

Yes.

of build the be decision – as help and information we the on of the able is life we FreshCloud I attend think pellets shipped. blockchain predicting said could the cetera these a make a into et on kind So, time Blockchain across on to that a the products, freshness whole And we we once of to we did have before good certain others to make platform the journey real at depending chain is potentially and all conference. shelf that, opportunity. as turn the in food being a our customers supply solid measuring a prioritizing point, over Yes. platform, eventually,

Roger Duan

Alright.

rest The the guys question, segment? are thanks. acquire the growth seeing by Tecnidex final provided you this to looking the Okay, of

Jordi Ferre

We don't have the with a think certain previous owner and agreement I that's public.

I guess agreement. back time, time, we private is that at but least things agreement in point So, signed happen, at a can which to refer we in the due this

Roger Duan

No problem. Okay.

Okay.

Graham Miao

own larger... We

Roger Duan

Go ahead, Graham.

Graham Miao

Graham. It's

consolidate So, we we own XX%, their operations statements. so our into financial

Roger Duan

No Yes. Okay. problem.

so Okay. Understood. much. Thank you

Graham Miao

you. Thank

Operator

Please from your line Instructions] Our from ROTH proceed Capital. Gerry of next question. [Operator Sweeney comes question with

Gerry Sweeney

Hi, for good Thanks afternoon, Jordi my and Graham. taking call.

Jordi Ferre

Hi, Gerry.

Gerry Sweeney

some it's a Obviously, it been acquisition the up Tecnidex. bit post-harvest in you're maybe comments. maybe from a synergies on prepared did a would on a market citrus touch there. AgroFresh? and question Tecnidex to the a expect But go fronts, a seeing it's think some few follow little integrated good that be for up further to Just And on opportunity fully you to you I you you. Thank now little into bit then can that of

Jordi Ferre

Right.

two with of that. when generally we citrus, obviously, our in One to in name AgroFresh think is very think opportunities receptive name, the is, because areas. we I So, growth a I see combined are that speaking offering there in the citrus are customers new

be the East, in to countries intend like that up. Egypt, These markets are has the company bet, talking early company citrus of had that these speed also the bet, earlier countries Turkey. addition with growing to The certain citrus. I'm AgroFresh, are Middle for going places and in while the made been an Second, Morocco, made growth playing business. Tecnidex are for a the in about places we

Africa try just in grow like areas and as the company Latin also where We had to well have America, in intentions South introduce products. started to to their

that a name, AgroFresh Combined AgroFresh a reputation the has to basically good their we've a remember What in in let's one a was achieve because name opportunities. speed on resources at those with in privately-owned is I think, I them pace. that company to two as markets, well what was So, these actually market. our strong put higher combining do I expand the think things, own and we we've Tecnidex trying much think done growth is is

Gerry Sweeney

then discussing – the expect on maybe front? on synergies, go integrated. basis we Anything it's about some what And of a now forward that that it. Got fully

Jordi Ferre

of driven in the synergies. manufacturing which saw terms a we which there us synergies And chain. think the Well, that see a some as has Right. from it's continuing terms to that impact, to some be be well, the working try That's more supply a not them, facility And synergies improving base year obviously, in is we're that in Valencia cetera, synergies. our of to is be supply as area, acquisition capture see beneficial in and we in be a from end doing when that especially related a going good sales integrated on different a of et to Spain, and towards was full the only Tecnidex to we actually but had will especially, our I will that strong lot to very do actually in us by important thing. move chain how we of the standpoint. well we from area synergy products

want that's I sure to understood. make So,

Gerry Sweeney

Got it.

Okay. I Thank appreciate it. you.

Jordi Ferre

you. Thank Yes.

Operator

Group. from Maxim Jang your proceed Our with of question. next James question Please comes line from

James Jang

Hi, good afternoon, guys.

Jordi Ferre

How afternoon. are Good you?

Graham Miao

James. Good afternoon,

James Jang

well. Doing

other the toward so as been move where think exponentially questions line? see don't what you XXXX, lot with you you just in and have So, helping feel could revenue more presence diversification strong the answered, really opportunity, into of sectors but greatest top grow Tecnidex What partnership you help we that a that RipeLock do do of do you in? happening as to something have the get is

Jordi Ferre

we things an that. in through get course, year the actually stars always hope mean I all could that line up would that obviously path. possibility Of one there is exponential take we would a

we'll see into that is in company. would in diversification in growth XXXX see – of of XXXX the think would the However, that deeper trend the strategies, I terms same you our you go

that this some like will year. track that we've the Harvista think I back seen of on hiccups be

so, you next year I of this you've think that initiatives. diversification improved year And based be in – terms the will with see seen growth on will the results even

In very could having we're prudent here. something terms of that exponential, be

and one that the all think steps be growth. sustainable towards to have we I solid time a take step at

James Jang

RipeLock you That's had And more of else, in Okay. there fair. factor larger with been terms further the meaning have discussions has your everything with and any in U.S., product? of grocers pull

Jordi Ferre

I mentioned than is XX were right that previous now there disclosed I remarks that in but on. I there think my more – large that, going XX grocery trials

mentioned disclosed I it. I think I that.

James Jang

Yes.

Jordi Ferre

we're to while results. roll for make to companies time out activity can decisions there take Trials So, long, doing and a evaluate yes, sometime in I sometimes in to do logical think then And is that big that. trials. little get shows that prepare, also the a bit full to because to they a while

number the based of – could we have track on right that the so we right now. So, pipeline we're the again here on and trials

James Jang

exact know last one get they have opportunity market you don't do cherries And be, numbers, the the the for but think you in I great. could what mature? Okay once one, Chile

Jordi Ferre

You Chile yourself are now. referring we now, I... Harvista in talking or right about right in cherries Chile, you're because talk Am about blueberries

James Jang

Tecnidex. No,

Jordi Ferre

I'm sorry. I'm sorry.

James Jang

The expand You can new... it.

Jordi Ferre

Yes, yes. I'm sorry. sorry. yes. Yes, I'm

So, would have the number, I in be. will the Harvista. the that But exact I don't opportunity tell that you how much

about itself, cherries, total we're the you I really haven't can Chile cherries, in has millions. put not acres the talking is in opportunity Harvista an it me assessed fungicide tell of small, this XX,XXX potential. What Let I way, that, it's

James Jang

all had. guys. Thanks, Okay. right. I Got Alright. you. All That's

Jordi Ferre

you. Thank

Operator

Daniel Markets. question. of line from comes question next Please Our from your proceed Global with Jester Citigroup

Daniel Jester

morning to good your current on the everyone. ask a good Hi, – – I you for strategy Yes. SmartFresh. bit afternoon, wanted

– in XXXX calculation, have in Asia the technology Europe, parts of rolling for understanding that more also I you Canada. think my it's as in off and patents parts Pacific

that rolling So, patents I was how business your about just now you comment adjust more you off? are some if may can wondering

Jordi Ferre

here. you Welcome back, to have Dan, it's good

about patent. I for question saying used while, that patent mean, expires patents, main the was your on XXXX the I've So, that been a

public that And so, not the been patent say competition that and facing been is patent are The to we've you even encapsulation actually we've main addressing since. method. application our is ever today

different in It and And, a certain for means We service competitors in have will they my can expires, competitors of But a have competition a going more have tell be access this patent different in method. reputation the that you years. a fact multiplication to application you now can market competitors. ProTabs, our have have that and service product happens that a that in market the the market. we're had access of this, that. post-harvest providers doesn't to application to experience serious know are that have main mean and now the in when so that three to we Those I

dramatic So, although I the obviously expire, it's going much nobody don't patents some that have to likes as assessing. a think correction be of to that have of been people

Graham Miao

of referred also in East the Jordi United mostly powder Canada and point that Dan, that And, we Coast, ProTabs regions, those as the mentioned It's States instead it's you and mentioned also formula to. important using that you to the Graham. out, encapsulation then already

Daniel Jester

XXX helpful clarification. On million my stores math you. the very couple U.S., by Got you. in deck RipeLock dollars. adding about the slide a you talked That's in Thank added which

that about the per – number phases? store, year only, to revenue, few accelerate this Is years? just two see is, have how way a that I'm you up wondering is Can is there because you of to low the you're what get that? in revenue stores just just opportunity ramping very every a the add to over of trial next million if of So, open dollars talk large a sort you

Jordi Ferre

very good lend It's revenue turn Yes. you larger will The and are store. on based store that have going average Number a two store the question. one, factors. better products stores obviously, per to per stronger sales Yes. increase as you're grocers more bigger

your base. your or getting you you're So improve again, as into grocers larger customer

in the as the there terms thing trials, speaking, trials Second, should life. obviously. that incidence same generally they of yes, is do they in But only measure actually, some real

really is your customers. impact quality biggest The adding impact. stores [indiscernible] the more quality that's think don't and I grocers So, to

Daniel Jester

you use other tools maybe the you. sheet? last firepower you rapidly some to about there do Can feel more one are to go Jordi for can to acquire you you Or how you like a give company? bit need How then about one delever more think talk philosophically that it? you. Graham. Got just And balance Thank some

Jordi Ferre

Thank you, as well.

Graham Miao

sure. Yes,

So, the on been has improvement our structure capital screen. general in balance radar sheet

proactive very with So, our see in working as that evaluating also about the there we advisors very out and opportunities marketplace. the are actively thinking you

– over the maturities, see we've action. over So, put put certainly before next – way so time some time into the the to got that we

So in first fix revolver. and foremost, to existing the as we that the – January, announced is

also more a and make to just that's step year but maturity first half. friendly, a user a it So, by the extend

flexibility a will certainly give structure of the So opportunity later and marketplace refinancing opportunity, that to the company financial look terms in debt our capital at on. overall

on our foremost we Jordi to that as So, are us – organic first focusing strategy growth for business, internal overall with mentioned. and deleveraging for

resources We baseline more have is and growing have putting stable that our products brands behind. also we that we're some business several becoming

to mentioned are those position marketplace, leverage in in as you very strong we to opportunistically looking the – those suitable tapping So, to opportunities. tapping our at market addition, globally targets some ready

active screen. on So, overall, we and our it's are radar

Operator

like at call turn question-and-answer I'm And any session the questions. to over end closing back ladies and showing for and further gentlemen, management the I'd time to this conference no remarks.

Jordi Ferre

want rest everybody results know is for deliver hard base to management Thank much team I working assure the employee company, that attended this this to your is expecting. everybody very and very and and the you you that everybody call. interest Thank to keen that

we'll again So, in speak and the much quarter. very next thank you

Operator

thank does that call. for conference We do today's conclude you gentlemen, attending. and Ladies

You disconnect your may now lines.

AgroFresh Solutions (AGFS) 11 Mar 192018 Q4 Earnings call transcript