Good afternoon, and welcome to the AgroFresh Solutions First Quarter 2021 Conference Call. All participants will be in a listen-only mode. 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 ICR. Sir, please go ahead.

Thank you, and good afternoon. Today's presentation will be led by Clint Lewis, Chief Executive Officer; and Graham Miao, Chief Financial Officer. 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 statements. 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 today. Please refer to the tables included in the slides that accompany this presentation as well as the press release, which can be found in the Investor Relations section of our website agrofresh.com for reconciliations of non-GAAP financial measures to their most directly comparable GAAP measures. I'd now like to turn the call over to Clint Lewis.

Thank you, Jeff. I'd like to extend a warm welcome to everyone on the call. I'd also like to thank our AgroFresh colleagues around the globe for their efforts, hard work and patience as I continue to work to get up to speed, and to our shareholders and the investment community for your continued support and interest in our company. This is an important time in the Company's journey and I'm thrilled to join this afternoon for my first earnings call as AgroFresh's new CEO. This is an opportunity that is especially exciting for me. The Company has an excellent foundation and our prospects for the future are bright. AgroFresh, a trusted brand in the post-harvest industry, known for our commitment to providing quality products and solutions. Our reputation is supported by our experienced sales and technical teams that deliver a high-touch service model that customers have come to rely on. We are an innovative organization that provides end-to-end solutions, not a provider of commodity products. This is visible in the diversity of our portfolio, our attractive margin profile and our geographic breadth. Our close proximity to our customers is the cornerstone of our market leadership in the post-harvest industry, which we aim to reinforce and grow in the quarters and years ahead. While it's still early in my onboarding process with just four weeks since my appointment, I want to be very clear, the Company's strategy to drive growth through diversification is sound and has my full support. My mandate is also very clear, to help this great organization identify and execute an operational plan that will provide consistent profitable topline growth for years to come. Like all businesses, we have our own unique set of challenges that I'll be working on overcoming, but let me be clear, there are many opportunities that I'll be focused on seizing. We have a global footprint with operations in over 50 countries that support a diverse base of more than 3,500 customers. This is a very attractive foundation that we will leverage and grow from in the future. Before I provide a brief summary review of our first quarter business drivers, I want to share some perspective on my background and what attracted me to this position. While I'm still coming up the curve in the post-harvest industry, I do bring a deep appreciation for agriculture, following 12 years of executive leadership experience in animal health with Pfizer and subsequently, Zoetis, the largest animal health company in the world and the market leader, following the carve-out of that business from Pfizer to the public markets in 2013. Over the course of my career, I've always come back to my early experience in sales and commercial leadership. I have a great deal of appreciation for the customer, their challenges and how they partner with companies to solve those challenges. This takes a solution-based philosophy, which the team here at AgroFresh has been building on for decades. Keep in mind, the animal health industry is more than just companion animal or pets like dogs and cats. In fact, over 50% of the global animal health industry is represented by animal agriculture or livestock. In many ways, that industry is similar to the post-harvest industry, where we are advancing technologies to support farmers and retailers that feed an ever-growing global population by effectively and sustainably enhancing food production, while reducing waste. In my experience, I've worked with farmers, ranchers and retailers, large and small, all over the world and I aim to leverage those experiences with our AgroFresh commercial team to build upon the great relationships we already have in place across the industry and to bolster our competitive talent as we pursue our diversification strategy. In the coming weeks and months, I will continue studying our business, engaging in deep reviews with our team and meeting with our customers to accelerate our action plan to ensure consistent profitable revenue growth. Naturally, there will be many questions from the investment community in this regard, and I look forward to discussing those with you in greater detail to help inform your understanding of the steps that we are going to take to achieve greater growth, diversification and value in the Company. With that, I'll transition to review the first quarter business drivers, before passing the call to Graham for his financial review. But before I begin, I'd like to bring to your attention that starting this quarter and moving forward, we are providing you with some additional disclosure on both a geographical and product solutions basis to further assist you in understanding our business, our strategy for growth and for monitoring our progress. Please continue to remember that it is best to measure our performance in halves versus quarters to align with the seasonal nature of our business and the regions we serve. You can expect this new presentation format going forward, the details of which can be found in our supplemental earnings deck on the Investor Relations website with the general idea that we'd like you to think about the categories of solutions we provide and how these fall together towards our broader goal of enhancing diversification. I'm pleased to begin by sharing that our Southern Hemisphere is off to a strong start. Net sales for the quarter of 2021 increased 18.1% versus the prior year to $39 million and adjusted EBITDA increased 26.3% to $14.2 million. From a geographical perspective, our largest region Latin America, performed well increasing 18% versus the first quarter of 2020 and contributing $3.2 million of growth with a return to normal crop size in Brazil and higher fungicide sales across the region. As you may recall, in last year's first quarter, we were met with a seasonal delay to the harvest in Latin America, while this year, we are back to a more normal seasonal cadence. So on a comparative basis, we have an advantageous comparison in the first quarter and expect a difficult comparison in the second quarter relative to the same quarter in 2020. The Asia Pacific region was also strong, our second largest contributor to growth, increasing 24% versus the prior year quarter, led by New Zealand, which was driven by the first year launch of Harvista, the timing of which was advantageous as the region experienced labor disruption due to the COVID-19 pandemic. We also experienced growth in our North American region, increasing 91% relative to the prior year period as a result of the recovery in EthylBloc, which I'll cover in a moment. Finally, we experienced some modest growth in our Europe, Middle East and Africa region with improved citrus production in Spain, following difficult season last year that was impacted by severe weather. From a product solutions perspective, our portfolio of other 1-MCP solutions, which primarily consists of SmartFresh diversification for crops other than apple, Harvista and EthylBloc, with our largest contributed growth versus the same quarter last year, increasing 37% or $3.1 million. As you may recall, last year, we gained access to the Brazilian market with our Harvista solution and after a year of seeding the market with customers, we grew Harvista sales by nearly 3/fold in the market. Additionally, as I mentioned, we had significant success with our first year launch of Harvista in New Zealand, following our registration there. These are both great examples of the power of our regulatory registration platform. We are also seeing a resurgence in our EthylBloc product, which is our solution for fresh-cut flowers. This was one area that was more directly exposed to the impact of the COVID-19 pandemic last year. While sales are still muted, we are in the recovery stage with the developed economies slowly finding normalcy. The global flower business is improving in kind and as a result, we are seeing improved demand for our freshness solutions. Our fungicides and disinfectant business increased 51% for the first quarter versus the prior year period, driven by volume of new and existing fungicides throughout the Latin America region. Notable improvements in fungicide penetration in Argentina with our ActiSeal product and the first-time sales of ActiMist in Chile drove results. Coatings grew 20% in the quarter relative to the first quarter of 2020 through increased penetration in Latin America, along with increased citrus production in Europe and the Middle East. The coatings business largely represents our Tecnidex franchise today, but is expanding through the recent launch of VitaFresh Botanicals, which is our plant-based edible coatings solution to preserve inner freshness, extend shelf life, reduce food loss and waste to result in superior eating experiences. We are very pleased to announce that Camposol is the first customer to adopt VitaFresh Botanicals for use in their avocado shipments in Europe. Camposol, headquartered in Peru, is the leading vertically-integrated produce grower, marketer and distributor of avocados, blueberries, grapes, mangoes and mandarins. This is a great start for VitaFresh Botanicals as we continue to promote adoption to other major fresh produce companies around the world. Finally, some commentary on our SmartFresh apple business. Our core SmartFresh apple business grew 6% during the first quarter and was driven by a return to normal crop size in both Brazil and Australia, which helped increase volume. However, as I mentioned earlier in my remarks, the shift in the harvest timing this year versus the 2020 Southern Hemisphere season is expected to create a more difficult comparison in the second quarter, which we'd expect to translate to a modest year-over-year decline in the sales of SmartFresh apple for the first half of 2021 Southern Hemisphere season. That said, we expect our total business to generate consolidated revenue growth for the first half of 2021 relative to the same period last year, thanks to the success of our ongoing diversification strategy. Naturally, SmartFresh is an important brand and business for us and has provided us incredibly deep understanding of the 1-MCP technology. This technology is proven and continues to permeate throughout the post-harvest industry. We want to make sure that we continue to lead the industry with value-added innovations that help our customers improve their crops. To that end, we will continue to invest in our R&D and regulatory capabilities to drive commercialization of novel solutions, but our vision extends beyond 1-MCP, include technological advancements within analytics, which we are commercializing with FreshCloud. We've had several key wins with marquee industry participant that we are excited about and validate our platform. These include Hortec, which is utilizing FreshCloud Harvest View with apple growers in South Africa. Montague in Australia, which is utilizing FreshCloud quality inspection across its network and our first U.S. customer contract signed in February with Blue Star Growers, a leading pear group in the Pacific Northwest. To summarize, I believe we're on the right path and we will be continually driving towards greater diversification to enhance our growth profile. If you look at our business, excluding SmartFresh apples, which captures all of the crop solutions and tech, now represent approximately 40% of total revenues on a trailing 12-month basis as of the first quarter of 2021, and generated growth of approximately 14% on a similar basis. This is the metric that we are orienting our organization around to drive future profitable growth, and I'm excited to be here at AgroFresh to help lead that charge. I'm very encouraged by all the activity we have going on, and look forward to updating you in the future on our progress. I'll now pass the call to Graham to view the rest of our financial highlights. Graham?

Thank you, Clint, and a good afternoon to everyone. The first quarter begins our Southern Hemisphere season. As we have noted on numerous occasions, we think it's most valuable to look at the business in halves versus quarters to consider seasonal fluctuations that can shift sales between the quarters of each half. Net sales for the first quarter of 2021 increased 18.1% to $39 million compared to $33 million in the first quarter of 2020. Excluding the impact of foreign currency exchange, revenue increased 17.6%. The net sales increase was the result of growth across all product solution categories, which include SmartFresh for apples, SmartFresh diversification for other crops, Harvista, EthylBloc, fungicides and disinfectants and coatings. Gross profit for the first quarter increased 17.1% to $28.7 million, while gross profit margin was relatively stable at 73.5% versus 74.2% in the prior year period. The slight decline in gross profit margin was driven by product mix. Research and development costs were $3.3 million in the first quarter of 2021 compared to $2.6 million in the prior year period. This increase was driven primarily by accelerated spend for products. R&D remains an important component of our strategy. Our R&D investments take the form of innovation and product development. Technical services to support our customers as well as a regulatory expertise to help us expand our registrations to new crops and the geographies. SG&A expenses were essentially flat versus the prior year at $13.6 million in the first quarter of 2021 as compared to $13.7 million in the prior year period. Cost optimization continues to be our focus for the Company. Over the past few years, we've improved our cost structure, enhancing the efficiency of our organization. As we look ahead, we are preparing for growth in support of our diversification initiatives, however, we continue to seek opportunities to drive further efficiency. First quarter 2021 net income was $8.2 million compared to net loss of $3.8 million in the prior year period. The $12 million improvement was driven by higher revenue and further supported by other income in the form of litigation settlement proceeds, offset by higher tax expense. Adjusted EBITDA increased to $2.9 million or 26.3% to $14.2 million in the first quarter of 2021 as compared to $11.2 million in the prior year period. Adjusted EBITDA margin increased 240 basis points to 36.3% in the first quarter of 2021 and demonstrate the powerful operating leverage that's inherent in our business model on a growing base of revenues. The strength of our operating cash flow continued in the first quarter as cash provided by operations was $23.3 million for the three-month period ended March 31, 2021. Adjusting for the one-time benefit of $14.4 million of litigation proceeds, normalized operating cash flow from operations was approximately $8.9 million as compared to $1.1 million of cash provided by operations in the prior year period. The increase in cash flow from operations was mainly driven by higher revenue, lower cash interest and working capital improvements. Capital expenditures were $0.4 million for the three months ended March 31, 2021, which matched the prior year spend. We continue to expect our annual capital expenditures to range from 2% to 5% of sales, consistent with our asset light business model. From a balance sheet perspective, cash as of March 31, 2021 was $52.9 million, total debt was $266.5 million and our $25 million revolver was undrawn as of March 31, 2021. Notably, during the first quarter, we reduced our Term Loan B by $9.8 million and redeemed $5.3 million of preferred equity with a legal settlement proceeds and our operating cash flows. These payments have the positive effect of reducing future interest expense and preferred dividend payments. This concludes our prepared remarks. Operator, please open the call for questions.

[Operator Instructions] Our first question is coming from the line of Joel Jackson, BMO Capital Markets.

Clint, Graham, I have a number of questions, I'm going to ask one by one. First, maybe a few housekeeping questions. Are you willing to share with us -- you're sort of showing now your revenue planned in different buckets than you had before, so splitting up, taking back some core. Are you willing to tell us here on 2020, what revenue was sort of full year in the five buckets or categories?

Joel, first of all, thanks very much for the question. And joining -- obviously, not just for this question but others, I'm going to probably lean on Graham a little bit more than I would otherwise moving forward, just given his deeper knowledge of the business and obviously, his involvement through the first quarter. I think specifically to your question, I do think, 1, we're trying to put forward kind of a different view and disclosure of the business to kind of help understand the nature of the business and the strategy that we're pursuing and we'll work to make sure at least we can compare that to the prior year. But let me ask Graham to comment further.

Yes, absolutely. So in our first quarter start, we did disclose last year's comparable comparison.

And then for the whole year, Graham. For the whole year.

Yes, yes. We will do so as well. As we said on today's call, we're going to adopt this new practice to be more -- to have more disclosure so to help investors gain additional visibility into our business, particularly as we drive diversification growth. So you will expect, in the second quarter, third quarter and for the full year, we'll consistently disclose in such a pattern.

Okay. You might consider wanting to release a full year 2020 like now, maybe helpful for investors to see how everything sort of comes out of the new categories, the new presentation like giving -- not waiting for the quarters to come?

Yes, we'll be happy...

Maybe you can talk about -- If I look at Q1 performance, so you used -- Clint you made clear in saying that you'll get back some of the revenue growth in Q2, but you should end up first half going ahead. Can you give a little more color? Like the six-month revenue growth in Q1, once you get half that back in Q2 or can you give little more color.

Yes, I think some of it, again as we noted, had something to do with the timing of the seasons and the Southern Hemisphere between quarter one and quarter two. Obviously as we commented, the census in the Southern Hemisphere, they're returning to more of a normal crop size and season. So just to make the comps a little bit different -- but again, we feel good about the growth prospects on a consolidated basis for the first half. And Graham, if you want to add any additional comment? Yes, yes. And again, I think, Joel, the only piece -- and again, for others, and this is one of the many similarities to my previous background in the animal health side and specifically, on the animal act, right? One of the things we spend a lot of time trying to educate and provide context to investors in the investment community is understanding that we've got to manage our business the way our customers do and they manage it across seasons. And again, that's either between hemispheres, countries, markets and/or crops. And so, yes, we have a nature of reporting on a quarterly basis, but we're also going to do as best as we can to help everyone understand the variations again based on that segmentation of what happened in first half, second half based on the season in the region.

One thing that's interesting in the first quarter, and like you said, it's a half way -- you look at the business in halves and maybe there's some timing and some weird comps last year, but you saw gross margin performance shrink percentage wise in Q1, but EBITDA percentage expand. Just talk about the drivers of that in Q1, is that more of a Q1 transient thing? Gross margin percentage down, the EBITDA percentage up or that's something that's going to persist through the year?

Maybe I'll pass it to Graham first to comment.

Yes. So the margin, a slight difference year-over-year, is primarily due to product mix as you see that -- as our product revenue continued to grow through diversity, particularly, not only on the 1-MCP after the management part of the business, but also antimicrobial fungicides business, which is growing particularly as we leverage our expertise in the prior acquisition of Tecnidex from the Spain, the Mediterranean region across to Latin America, that's where in the first quarter -- and Southern Hemisphere we see tremendous growth in our fungicide business and the coating as well, because of the cost of leveraging our expertise. And you will anticipate that overall, portfolio, gross margin and it will continue to evolve to reflect our product mix.

Just two more for me. Is that where should we -- should expect right now that you talked where you repaid some of the products, are you going to try and knock down that perhaps as much as you can or do you have some acquisitions in mind? You just didn't have any tax during Q1, how should we think about it?

Joel, maybe it was just me -- maybe I have to ask if you could repeat the question, I didn't catch most of that.

You said you redeemed close to 5 million of the preferred in Q1, is that right?

Yes, you're right.

Is that the goal going forward to try to knock down some of the perhaps over time or do you have some acquisitions you want to do? How should we able to...

Thank you for the question. So for the first quarter with the litigation, it's -- it was a unique situation. In our original investment agreement with PSP as well as the refinanced credit agreement, and then the -- there was a cost that with the pending litigation proceeds, the Company is required to use 100% proceeds to pay down the debt as well as the preferred securities, which is exactly what we did.

That's helpful. And so, my last question is, Clint, you've been on the job for not a long time, but a bit. And what -- now that you're on the inside here, what do you think, what sort of the things aren't really appreciated properly at AgroFresh and what do you see you can really add value to tackle low-hanging fruits? Look at the R&D spend, what do you think you've now appreciated some weaks in the job that you can maybe attack?

Yes, no, I appreciate that question and I would say in the four weeks, it's amazing. It's only four weeks, but a lot has happened over those four weeks and I appreciate also very much the -- both the patience and the openness across the organization and globally to help me understand where we've been, where we're at and obviously, make sure there is a sense of clarity in what we're going. One of the things that I also tried to stress in my opening remarks is that there are tremendous similarities between our business here on the post-harvest of crop agriculture side and how it compares to the decade-plus time that I spent on the animal ag and a number of those high-level comparisons, right. 1, we're just talking in weeks, we operate not on quarters, we operate on seasons and yet whether it's apples or cattle, they have an inherent season. And interestingly enough, both places the season is more weighted to the second half as opposed to the first half. The second is, which is also very similar, is the importance of the direct access that we have to the end customer. That is a powerful opportunity because each of those customers, regardless of the market or the crops that they're responsible for, make their own individual value-based discussions and they are in the best position to understand with our support where our products, our services, our technical expertise can be woven together in a value proposition that makes sense for their unique needs. What again, I am very pleased with is the long-standing history, the legacy that our customers place on this space. There will be competition, that's okay, but the reality is, what you cannot replace, is the trust, is the knowledge of the business and the willingness for our account managers, our field-based technical teams to roll up their sleeves and sit or stand shoulder to shoulder with these customers to help them win with their customers, tremendous similarities. And I think that's a powerful thing for us to be focused on. Secondly, the focus around R&D, again, this industry, just like the industry I came from, is a regulated industry and that is regulated in all of the major and secondary markets in the world and I'm very proud of the R&D regulatory prowess that this team has in terms of their understanding of the regulatory landscape in each of these markets, the respect that they have earned in terms of the quality by which they do their work, because one of the most important drivers of our growth and diversification growth is how quickly we can get our products registered in every major market that makes sense. And so, that's also a great piece of it. And we also need to make sure we're balancing the desire to meet the customer needs, but to do it in a way that not only can align with a technical and regulatory path, but also we need to focus on the big return opportunities. And so, I look forward to working with the team, and with the team providing visibility to our external stakeholders, including the investment community to understand those projects that we feel are really going to meet the customer needs that we can deliver on and are going to move the needle to drive continuous sustainable profitable revenue growth.

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

Listen, I appreciate very much the interest and support of this company. I also appreciate your understanding that this is the first earnings call for the team, for me, but I want to thank the team. And also, I look very much forward to engaging with as many in the investment community to help you understand the great opportunities that this company has. Thanks for your time. Stay well.

Ladies and gentlemen, this does conclude today's conference call. We do thank you for attending. You may now disconnect your lines.