Q4 2020 AgroFresh Solutions Inc Earnings Call
Good afternoon, and welcome to the Acura refresh solutions fourth quarter on full year 2020 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 reported at this time I'd like to turn the conference over to cash Sonic Investor Relations at ICR.
All the stuff.
Thank you and good afternoon.
Today's presentation will be led by Jordi Ferre, Chief Executive Officer, and Grand mile 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 facts are considered forward looking statements.
Payments are based on management's current expectations and beliefs as well of the number of assumptions concerning future events.
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 on the Investor Relations section of our website.
Fresh dot 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 Jordi Ferre.
Thank you, Jeff and good afternoon, everyone.
The last quarter of 2020 proved to be challenging with the smaller than expected North American Apple crop, which decreased approximately 11%, creating lowest storage volumes.
We also face difficult comparisons in the prior year period in Europe, where the industry experienced later than normal harvest seasonality, we shifted sales from the third to fourth quarter of 2019.
As a result net sales for the fourth quarter of 2020 decreased 14, 9% to $51 $9 million versus the prior year period.
Looking back at full 2020, we were met with heightened complexity due to the impact of COVID-19.
We experienced delays in new diversification project Rollouts unpredictable short term customer purchasing decisions and local currency fluctuations that impacted our global operations.
While we are obviously disappointed with the overall 2020 performance of business was better insulated from the pandemic effects given the hard work our team has been doing the drive efficiencies and optimize our cost structure over the past two years, which translated to <unk>.
Systems gross margin performance demonstrates the value of the agro of fresh service model.
Additionally, we were extremely pleased to execute on our July 2020 comprehensive refinancing and meet the disruption, which helps ensure that our business remains solid supported by our strong cash flow generation.
Looking ahead, we are energized about the opportunities in 2021.
We believe that our diversification pipeline and the innovative solutions that we are bringing to the marketplace in 2021, such us all on recently announced by the fresh Botanicals line of plant based coatings as well as our growth platforms, such as harvest and fresh growth appropriate.
Terry Digital technology platform will return the company to growth in 2021.
We believe that Agua fresh remains in a strong position as the preferred global provider of post harvest while at the solutions.
The fresh produce industry is consolidating creating the largest global participants I support the recent announcement of the merger with the Brazilian the learning Melons, Agricola, Formosa, and the largest producer and distributor of citrus and stone fruit in Europe.
The three and coal.
I grew of fresh has the distinct advantage for service large global enterprises, such as this with a proven track record of quality and innovation and our global reach.
Turning to slide four.
Smart fresh revenue decreased 10% in 2020 amid a challenging environment, especially in Latin America, and the U S, which both experienced suboptimal harvest.
According to the World Apple and Pear Association of Whopper the.
Southern Hemisphere, Apple crop size decreased four 3% in 2020 versus the prior year.
Further compounding these headwinds was the smaller U S Apple crop, which as I mentioned was 11% below 2019.
In Washington State gross so of crop decrease of 15%, which was nine points worse than the original projections in August 2020.
We also lost some market share in the U S debt, we had we gained in 2019.
This is the remediation of a trend we experienced in 2018, where after leaving Agua fresh some customers had mixed results from competing products and came back to us. The following the season due to our demonstrated quality and service capabilities.
Okay.
Sales of activities Fuckable fungicides increased by 56% in the Pacific northwest, capturing about 10% of that market.
We plan to continue adding new geographies in 2021.
This is an important development for some of my fresh as we see an evolution towards one coop location on the one quality of service platform.
We also see fresh cloud playing an important role in our vision of a cohesive platform and its integration with smart fresh is no exception.
In Europe Smart fresh Apple revenue was down 9% in 2020, driven by the smaller than average crop while revenue was up 11% for all of the crops, such as spares and Kiwis, which together represent 25 per cent of smart fresh sales in that region.
On the other hand of larger crop drove smart fresh revenues up 16% in Turkey, and 20% in Japan.
Turning to slide five.
In 2020 of revenue contribution associated with the Apple crop was <unk> 71 per cent compared to 72% in the prior year period.
The truth remains our second largest crop represented approximately 12% of total revenue.
While per his third with approximately 8% the.
The flower market was the casualty of the pandemic and resulted in lower ethylene block sales, which decreased 27% versus the prior year.
For my diversification standpoint, approximately 7% of 2020 of revenue is associated with crops the target could drive further growth.
The approach we are developing to drive diversification of its scrub specific we are developing comprehensive solutions. The gobi on smart fresh and combine a variety of our post harvest technologies, such as coatings application.
Application equipment for digital to deliver meaningful.
Roy to our customers.
With this in line, we have established local commercial on technical presence in non traditional upper markets, such as California, Mexico, and Peru to pursue opportunities in crops, such as avocados and Tomatoes in Tropicals.
In the U S of trials, we keep broccoli producers continued to progress despite the temporary delay associated with the pandemic, which include partnering the producers for presentations to retail.
We also recently announced the launch of a range of plant based coding products under the BARDA fresh botanicals spread.
One of the fresh Botanicals is a profit Terry plant based portfolio of solutions for a wide variety of crops from citrus do avocados Domingos.
Our coatings utilized anti thirst technology to boost the schemes natural protection, creating of doubled scheme of membrane. The reduces the hydration when patients weight and Lux, Inc product freshness throughout the supply chain.
The products consist of different coatings with technical performance adapt to each crop's unique geology, as well as allowing retailers to make attractive consumer claims.
Importantly, we expect our first meaningful cost of about adoption of white of fresh what kind of calls for use of avocados to be announced shortly.
Please turn to slide six.
Our VSAT technology slows the natural ripening process, allowing apples for quality time on the tree and can be applied up to three days before hearts.
Customers use our bested the develop better color on sizing their fruit expand the harvest window by up to 14 days manage Orchard labor forces at the time their harvest for optimum for maturity leading to improved quality.
In 2020, our Vista revenue, which grew by eight five per cent. Despite the disappointing year in the U S. While we did not meet our expectations.
In markets outside the U S harvest of the revenue doubled driven by recent approvals in Australia, and Brazil emergency use per image in Spain, Italy and Poland.
Further supported by double digit growth in Turkey, and South Africa.
In the U S market, we have to prepare for additional demand based on the early experience in Australia, where pandemic induced labor shortages generated demand for our Vista.
We saw the opportunity ahead of the U S season to promote the product and race by the visibility obviously replenishment benefits. However.
However, the widespread uncertainty among other customers lower their propensity to utilize quality enhancing solutions such as harvest it.
And was compounded by better than expected labor of element as the marketplace adjusted to new safety protocols.
On the regulatory front the expansion of approvals is an important tool the drive greater market access and harvest the remains a key element of our crop diversification strategy.
In November 2020, we receive approval to use hardly step for apples in New Zealand and expect to generate the revenue in this market during the 2021 season.
Additionally in February we were pleased to receive regulatory approval for blueberries in Argentina, which builds upon approvals in Chile, and the U S where we are in market. This is.
Turning to slide seven.
Definitely the ex provides outgrew of fresh with the crop and technology diversification via an established portfolio of for them. Besides coatings on watches as well as expertise in the citrus post harvest market.
During the fourth quarter of 2020 Cagny the extra revenue grew 21%, which was the recovery we anticipated due to a larger crop as well as new customer gains in Spain at the some of the headwinds we experienced during the first half of the year.
In 2020, Latin America grew revenue by 21 per cent overtaking the middle East as a second of large selling region behind Europe.
Growth in Latin America was offset by a decrease of sales in Egypt caused by accounts receivable issues that were resolved in December.
Sales in all three core markets of Spain, Portugal, and Morocco were flat for the year, but we are confident that the positive fourth quarter is that inflection point that will be sustained and continue into 2020 one.
Our domain expertise in coatings of technique, the ex what's central to our ability to develop and launch the vital fresh of what kind of calls like the.
The commercialization of the spell it also demonstrates the reach of our diversification initiatives across the dog refresh organization.
We plan to utilize our facility in Valencia, Spain for the partial manufacturer of the product.
Definitely the ex also provides the necessary equipment infrastructure and expertise to apply the coatings through our supply chain around the world.
In 2020, we migrated several key functions and capabilities to our site the balance sheet.
Right.
It is now shows us all of our European headquarters as well as the manufacturing location for us more fresh tablets and harvest the packaging.
During 'twenty 'twenty, one we will continue to leverage our expertise to offer similar theme balance yet to capture additional cost synergies.
Please turn to slide eight.
Fresh cloud is out of digital technology platform that provides real time data and insights about managing and maximizing the quality for orchard to the consumer.
These are powerful supply chain insights, enabling better and more informed decision, making the magically mice customer returns.
In 2020, we successfully rollout of new digital tool the fresh cloud harvest view, which automates optimizes and increases the speed of food mature the assessment.
Fresh cloud harvest view is the complement to harvest the applications equipping produce operators with data driven insights that are part of a deeper understanding of food mature at the end storage potential Brian to harvest.
In 2020, we brushes and measure starch in the total of 12000 Apple samples of the U S alone proving the stability of our software.
We are rolling out of the technology during the southern hemisphere season, and as of February we had processed the total of 2000 samples in those markets.
As an example, we have signed an agreement with Heartache, which is south Africa's leading food quality and maturity management service provider to use the lives Press club harvest view with Apple growers during the 20th of 'twenty, one season to optimize harvest management and help to enhance the quality and yield.
In 2020, one we are integrating fresh club harvest view into our price cloud quality inspection tool.
The press club while at the inspection is the appropriate Terry cloud base mobile wallets, the management service that digitalize, the quality control process by capturing organizing and analyzing while it's the metrics in real time.
The integration with harvest view will provide customers with an end to end quality and traceability tool.
In December we announced the Montague one of Australia's largest food growers will utilize the Prescott quality inspection to drive a comprehensive transformation of its entire quality system and decision, making brushes for the management of its fresh brothers.
Today, we are free to report that the system went live and is now operational.
Additionally, we are excited to announce the Bluestar growers basically of Washington State of sign a contract to use our fresh cloud quality inspection within their operations. This year. They are first U S customer adoption and have a reputation for innovation as the pioneer the installation and use of right.
<unk> technology for past more than 15 years ago, we look forward to enhancing the quality platform without digital technology capabilities, while several other ongoing trials with protests operators across the U S show promise and we anticipate additional customer adoptions in the near term.
We are very excited about the inroads, we are making with fresh flow customers are seeing the volume of our analytics and we are looking forward to leading the industry with our revolutionary platform with the goal of redefining called while at the food waste prevention and traceability is managed in the global fresh clubs industry on that.
I'll, let grant speak to some of the financial highlights ramp.
Thank you Jody and good afternoon, everyone.
As Judy discussed.
Plenty of 'twenty was a challenge of a year, where we were met with heightened complexity due to the impact of COVID-19.
Our organization demonstrated strong resolve and we enter 'twenty 'twenty, one with renewed excitement.
Round our growth opportunities.
With that that's the with you our financial performance.
Please turn to slide 10.
Net sales for the fourth quarter of 'twenty 'twenty decrease the 14 point of 9% to 51.9 getting dogs.
As compared to 61 meeting daughters in the fourth quarter of 2019.
Excluding the impact of foreign currency exchange, which increased the revenue by zero point of night meeting daughters, compared to the fourth quarter of 2019.
Revenue a decrease of 16, 3% for.
Primarily driven by a smaller north American crop size, resulting in lower storage volumes competition as well as difficult comparisons in the prior year period in Europe.
Where the industry experienced later than normal harvest of the seasonality, which shifted sales from the third quarter to the fourth of 2019.
These shifts in harvest timing on common in our industry.
And it's why we emphasize that investors should consider our business has versus quarters.
Net sales for for the full year 'twenty 'twenty decreased seven point of 3% to $157.6 million versus 170.1 meeting daughters in the prior year.
The impact of foreign currency exchange compared to 2019 reduce the revenue by one point of $9 million.
Excluding this FX impact.
Revenue decreased approximately six 2%.
The decrease in net sales was primarily due to lower body of smart fresh on the smaller harvest.
And the decrease in Apple Block sales Inc.
Two COVID-19 impacts.
Partially offset by growth in fungicides harvest time, and the diversification strategy.
Please turn to slide 11, where we'll discuss margins and operating expenses.
In the fourth quarter of 'twenty 'twenty.
Gross profit was 38.1 meeting daughters compared to 47 point for meeting dollars in the prior year period.
And of gross margin was $73 five per cent compared to 77.8 per cent in the prior year period.
The lower gross margin was primarily a function of negative.
Fixed cost of that bridge on lower sales volume and of product mix.
For the full year 'twenty 'twenty gross profit decreased to seven seven per cent to 115 quiet for meeting dollars compared to the for year 2019 related to the reduction in sales.
However, gross margin remained relatively stable at 73.2% despite of decreasing sales due to the positive effects of the supply chain cost optimization initiatives.
Selling general and administrative expenses increased $12 four per cent to $13 $9 million in the fourth quarter of 'twenty punchy.
As compared to the $12 for meeting dollar force in the prior year period.
The main drivers behind the increase was higher non recurring expenses related to fabrics as well as the phasing of some discrete expense on the year over year basis.
For the full year S.
SG&A expenses decreased nine 4% of $53 $9 million.
Driven by ongoing cost optimization initiatives and to a lesser extent reflect a decrease in travel and the other miscellaneous expenses as a result of the Covid pandemic.
Research and development costs decreased $400000 to for meeting dollars in the fourth quarter of 'twenty 'twenty.
Compared to the prior year period.
For the full year 'twenty 'twenty research and development of costs decreased of $1 eight meeting daughters to 12 point for knitting doors compared to the prior year period, driven primarily by the timing of projects.
R&D remains an important component of our strategy of dry.
<unk> continued diversification beyond apples.
Please turn to slide 12.
Fourth quarter planting 20, net loss was $2 $7 million compared towards the net loss of $22.2 million in the prior year period.
Net loss was $53 million of about a full year 'twenty 'twenty compared to net loss of $54.2 million in the prior year period.
Please note that our full year 'twenty 'twenty GAAP net income was burdened by 43 point of Saba meeting daughters of non cash amortization expenses associated with intangibles, along with an increased noncash tax valuation allowance of 20.
For some of them getting daughters recorded during 'twenty 'twenty.
Adjusted EBITDA was 23 point of 7 billion dollars' worth of in the fourth quarter of 'twenty 'twenty as compared to 34 point of $6 million in the prior year period.
For the full year 'twenty 'twenty adjusted EBITDA was $61 million compared to 66 point for meeting dollars in the prior year period.
Adjusted the EBITDA margin for the full year. It was of 38.1 of course that compared to 39% in the prior year period.
The decrease the adjusted EBITDA was primarily due to lower sales, partially offset by lower operating expenses compared to the prior year.
Please turn to slide 13.
We are establishing a broader monkey of theme with our cash flow generation.
Where we have been steadily improving our operating cash flow flow improved management of the business and developing a more efficient organization.
The results are more apparent.
You look back to 2018, where we generated $3 million of operating cash flow.
Which grew to 20 point of $1 million in 2019.
For 'twenty 'twenty, we continued to build upon this trend with a $6.6 million of increase to a total of 26 point of $7 million of cash flow from operations.
Capital expenditures decreased 1.8 meeting the autos to two point for meeting dollar or something for the full year 'twenty 'twenty.
Primarily as a result of timing and the project delays due to the paint downtick.
Absent. This anomaly, we continue to expect our annual capital expenditures to range from 2% to 4% of sales consistent with our asset light business model.
Probably the balance sheet the perspective.
Cash as of December 31st 'twenty, 'twenty was the $50 million per.
Total debt was $276 $5 million and of $25 million would be a ball for was undrawn as of December 31st 2020.
And so the binder as part of the comprehensive refinancing.
Schwartz partners invested 150 meeting daughters in convertible preferred stock.
Which reduced our net leverage ratio by approximately two turns which was the 3.8 times as of December 31st plenty of countries.
Given our continued strong operating cash flow and the Undrawn revolver, we believe we have ample financial flexibility to support our growth initiatives.
Now I'll turn the call back to Jordi for his closing remarks before opening the call for Q&A.
Thank you Brad Please turn to slide 14.
'twenty 'twenty was the difficult year for everyone and I grew up fresh was no exception.
While we did not accomplish the performance we were looking for we manage the financial and cash flow extremely well and we are.
The strong position to return to growth in 2020 one we.
We have continued to make progress on our key initiatives expanding approvals of harvest, the diversifying into fungicides and coatings as well as penetrating new crops.
New strategic initiatives such of fresh cloud quality inspection as well as the recent launch of vital fresh metallic ores are positioning us as the NASDAQ in Nevada in the post harvest space on.
The service oriented approach and proximity to our customers in core Apple regions as well as new crops.
The news to provide us with the competitive advantage to respond quickly to meet the changing needs of the fresh brothers the industry, which is quickly consolidated across crops and geographies and in need of a global end to end solutions provider.
We appreciate the support of all our stakeholders. During this period of business transformation as we build a more resilient global organization the provide sleeping food waste prevention and the quality enhancement solutions with that operator, please open the call for questions.
Thank you at this time, we will be conducting the question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad of confirmation tone will indicate your line is in the question queue. You May press star two if you'd like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star keys.
One moment, please while we poll for questions.
Okay.
Yeah.
Okay.
And our first question is from Joel Jackson with the BMO capital markets.
Hi, Good afternoon, Jordi Graham on I have a few questions. So I'll ask them one by one.
Thanks for the update this afternoon on when we look at the 2021 drivers talk about getting back to growth. This year can we break that down a bit more so is it reasonable to assume.
That you know smart fresh and sales of the contract a little bit based on.
On what happened in the market that would be offset by growth and harvest the.
And the other products Tech index for gross you get growth that way maybe on the margin side you'd end up with you know a little bit lower revenue the smart brush that that's the bad on the margin, but then you've done a lot of work on the costs. So here's the way to think about it that way on that.
Tech Index plus harvest the can.
Overcome more smart price contraction and then the different parts of the costing more.
The more margin.
So thank you and the.
Good afternoon, Joe So when you look into 2020, one and not necessarily what we saw of course of smart fresh will happen at the same I think a combination of things as I said it was really about the.
Uh huh.
Despite the year and if things go back to normal and you go into a five year average, which is really what we should expect I think just by debt you have some recovery in volumes.
So that is what we are seeing we also see inc.
The increased penetration in some of the diversification crops, which my fresh which is part of the you know the.
Suffocation efforts also include Smart fresh and then you know on the other hand, when you look on the other products you're absolutely right harvest continues to be our growth engine, we have more and more countries, where we have the approval, Brazil is going to be the first year in full approval.
And then you have New Zealand, that's just the approved now.
And we continue to see momentum of the number of markets on her visa so I think for Vista.
For the thing that it will continue its positive path taken it actually you're absolutely right. There is the point of inflection in the fourth quarter. We grew 21% part of it is growth but growth in the crop of doubt about it but we also saw gains in customers and I think it was becoming more and more strong in debt.
Business as we go into this we have also innovation within the <unk>.
Thank you for the ex that we'll be launching this year, we have not fully announced.
The fresh growth I think it's a very important part of our growth strategy I think you have gone through that.
Youre going to see customer adoption is coming and some of the customers options that are going to be coming out from our existing customer base, but are we also going to use the fresh go out the quality inspection for diversification.
So I think it's going to be a good development.
You will see the impact on revenue of fresh growth, but I think it's going to be a positive impact altogether because it just makes our our services more whole.
And finally, you just show our lunch of the Vida fresh Mechanicals, we repeat that through a few times you know her announcement.
There is.
Some growth is going to come on this first year as I said during my explanation.
The explanation, we expect pretty soon to make an important announcement.
On the adoption for the use of novel cutters, we feel that by the fresh what any coach is the co.
Loading has an important angle in terms of our retailers because I think the claims that you could make on products. So much of a positive.
So generally speaking this is the reason why we are.
Optimistic the 'twenty 'twenty, one will be a better year than 2020.
So following up on that maybe individually on.
The the fresh the Depression Press club.
So fresh cloud and be the fresh separately, you're going to be positive earnings drivers in 'twenty, one got the meaningful or would it more move the needle on 'twenty two and beyond.
I think that we have to be prudent right.
I think it's a little bit early to say, whether there's going to be significantly moving the needle I think it's fair to explain that the express that we expect of Goodyear for those businesses in terms of meaningful revenue impact probably you would see more of that starting in 2022.
But I think the as you will be very good for the funding for the for the foundation of this business is moving forward and just kind of position is completely in the different scale.
Okay and maybe my last question would be I know you've wanted to look at some bolt on acquisitions on to help diversify help drive better operating leverage what do you think of as your capacity to do some M&A in 'twenty, one and 'twenty two and.
How much of that would you want to and what's the urgency to do so.
That's the all of this is the ground.
We have the depending on the types of transactions.
We have the liquidity.
And also our internal resources to execute of certain bolt on acquisitions.
And we are a way of a few of those in the pipeline that we're working on it.
And Inc.
It depends on the transactions it depends on the the the scale.
The overall, we have the means to execute Ah ha in the in the number of areas now as we are set of before the acquisition, we're going to be very discipline and the focus.
And in those pockets in the.
Particularly from an external growth perspective, we.
We would like to add a two hour of portfolio that has a strategic fit and we can also see synergies in addition to allow.
Allow us to expand geographically.
On the scale.
Thank you very much.
Sure. Thank you.
And our next question is from Amit day out with H C. Wainwright.
Yeah.
Yeah.
I meant your your line maybe muted.
Sorry can you guys, even though on a bunch of those.
Can we get them.
Hey, good afternoon, I need a journey of how you've got Graham.
With respect to the competitive pressures on this topic came up on the third quarter earnings call as well and you'll get the mentioned this in the fourth quarter earnings call on.
What we essentially losing this market share too.
What kind of impact will this potentially have on the margins going forward.
So we mentioned it in Q3 and Q4, because obviously as part of the same season. This were upset and we see more of that impact, especially in North America and this is not something new we've been talking about this and there is a portion of customers the.
Net just speaking for what we observed they'd like to try.
New entrants and.
Generally speaking what we see is that there is always a certain.
The fluctuation, but so far we've seen that we can regain a part of that market share of steel will continue to have a good market share who is it low.
Look there's two or three different companies there here and there it's not just one competitor and the the.
They come with different I think that the the one thing I would like to say it of which there is no I haven't seen yet anything thats remarkable in terms of providing a new modus operandi or anything the touch more value.
And the reason why sometimes those are a little short term, it's because the only.
The Trump equaled the only.
The only advantage the can present on the only strategy that can present is trying to undercut on price right.
But we.
We continue to provide a very high ROI.
With our current offering our service has proven and we.
We provide a lot of confidence and trust to customers. So ultimately that's why the.
In spite of entrance of competition since 2000 for team we are still the dominant player in this market. So pricing can only goes for.
Understood.
Okay. Thank you for the and then with respect to buy the fish could you just talk about some of the sales process involved in bringing this to the market and what the pipeline for the it looks like it seems you have potentially one deal that moving on some on what else could transpire out of you on this.
We are working with different customers on this but what I meant to say, it's not the only one engagement we have what I meant to say in my in my script as debt.
There's one that is surely going to be announced.
The good one and I also mentioned that thats going to be indeed, avocado industry of the market.
So thats not one we're working on that's one we're about to announce so I just wouldnt be very clear because.
The debt that is something that it's going to come up very very soon we're going to be the other people and I think the buyer furnished with the Nichols brings a lot of things right. I mean, what it means is first is a very clear bet. The company is doing on the Botanicals, which is definitely a huge.
Trend now in consumers and especially.
PON base and especially in terms of edible food, it's very clear that that is a very big trend.
I think that the the one thing I.
I think that's important so what is it important for because I think there is an appeal with the retailers to the retailers get more implied into the application of that one is obviously a better performing fruit in terms of less waste, but also having a consumer.
Peel consume of claim that is appealing for our retailers.
Retailers to use so that's extremely important and the other thing also is I think it's a it's gonna be of key engine for us to continue driving diversification.
There is a lot of the categories that typically the not huge coatings today like avocados, the others and I think that provides a fantastic opportunity to provide better quality brothers and especially for products like avocados, the need to be shipped across the world.
And so that's the reason why this is so important it's not a on overlapping on what we already doing is completely incremental.
Thank you I.
I'll take my other questions off line, thank you sort of jewelry.
<unk>.
And 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 management for any closing remarks.
Well. Thank you very much everyone for the support over this time of period when it's specifically thank the employees of refresh works of art.
And we look forward to the next quarterly announcement. Thank you.
Ladies and gentlemen that does conclude today's conference call. We do thank you for attending you may disconnect your lines now.