Hot Stock under Consideration: AgroFresh Solutions, Inc. (NASDAQ:AGFS)

Shares of AgroFresh Solutions, Inc. (NASDAQ:AGFS) closed the trading at a price of $2.3200 with the positive/negative change of -2.11%. In the past session approximately 123,591 shares were exchanged against the average daily trading volume of 121,056 shares. The stock touched to the maximum level of $2.4400, and it reached the lower level of $2.3100 in past session.

AgroFresh Solutions, Inc. (AGFS) recently reported its financial results for the fourth quarter and full year ended December 31, 2018.

Financial Highlights for the Fourth Quarter and Full Year of 2018

Net sales for the fourth quarter of 2018 reduced 1.5%, from $54.1M in the fourth quarter of 2017 to $53.3M in the fourth quarter of 2018, driven by softness in the Pacific Northwest Because of an earlier and smaller than normal apple harvest. This was partially offset by a full quarter of Tecnidex, which contributed $7.8M in the fourth quarter of 2018. Net sales for the full year 2018 raised 9% to $178.8M versus $164.0M in the previous year. The raise was driven by the addition of Tecnidex, which contributed growth of $18.1M, and SmartFresh growth in Europe, partially offset by SmartFresh declines in the Pacific Northwest region of the United States where the business was negatively influenced by a smaller than normal apple harvest. As we continue to implement our diversification strategy, and with the addition of Tecnidex, SmartFresh sales in the Pacific Northwest now represent less than 10% of the Company’s overall revenues.

In the fourth quarter of 2018, gross profit reduced 7% to $40.0M contrast to the previous year period. Gross margin was 75.0%, consistent with expectations as the Company executes its strategy of diversifying revenue mix with a broader assortment of product solutions such as Harvista™, RipeLock™ and the Tecnidex range of products. For the full year 2018, gross profit raised 1% to $132.5M contrast to the full year 2017. Gross margin for the full year 2018 was 74.1%, a decrease from 80.1% in the previous year,Because of the Company’s diversification initiatives, planned pricing in the Pacific Northwest and the impact of ASC-606 deferred revenue.

Research and development costs were $3.6M in the fourth quarter of 2018, down slightly versus the previous year period, and for the full year 2018 were $13.9M contrast to $13.8M in the previous year. Tecnidex added $1.2M of research and development cost for the full year. Not Including these costs, research and development costs were down versus the previous year period, reflecting more targeted research activities in 2018.

Selling, general and administrative expenses reduced 11% to $15.6M in the fourth quarter of 2018 as contrast to $17.5M in the previous year period. The decrease was primarily driven by cost optimization initiatives, partially offset by Tecnidex contributing a full quarter of expenses in 2018 versus one month in 2017. For the full year, selling, general and administrative expenses including Tecnidex were $65.8M, up 6% versus 2017. Not Including Tecnidex, selling, general and administrative expenses were $60.6M, down 1% for the year, reflecting the impact of cost optimization.

Fourth quarter 2018 net loss was $1.9M, contrast to net income of $23.4M in the previous year period, which included a $24M one-time benefit from tax related matters. For the full year 2018, net loss was $30.2M, contrast to net income of $23.5M in 2017, which included $26.9M of benefits associated with tax related matters and contingent consideration together with $13.3M of gains on foreign currency transactions.

Adjusted EBITDA was down $0.9M to $24.4M in the fourth quarter of 2018 as contrast to $25.3M in the previous year period. For the full year, adjusted EBITDA was essentially flat at $66.9M contrast to $67.2M in the previous year.

As of December 31, 2018, cash and cash equivalents were $34.9M.

AGFS plunged -15.94% in past week and declined -29.48% in one month. During the past three month period the stock dropped -39.90% and decreased -53.04% in past six month. During the twelve month it lost -66.71% and year to date performance of -38.79%.

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