Q3 2022 AgroFresh Solutions Inc Earnings Call
Greetings and welcome to the AG refresh solutions third quarter 2022 earnings call. At this time all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference.
Please press Star zero on your telephone keypad as a reminder, this conference is being recorded it is now my pleasure to introduce your host Jeff Sonic of ICR. 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.
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 1095.
All statements other than statements of historical facts 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 Companys 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 refresh dot com for reconciliations of non-GAAP financial measures to their most directly comparable GAAP measures with that I'd now like to turn the call over to Clint Lewis.
Thank you, Jeff and welcome to everyone on the call.
I'd like to begin by commenting on the 8-K that we released on October 27, disclosing that a special committee of the agro Fresh board of directors is in discussion with one of our existing stakeholders paint Schwartz partners to explore a potential transaction in which the company would be taken private.
$3 per share in cash.
Naturally there are surely many questions surrounding the potential outcomes from this discussion.
Aside from noting that we were working together on this project in the best interest of all shareholders and cautioning stockholders that no agreement will be created unless definitive documentation is executed and delivered well.
We will not be able to provide any additional information or speculate on potential path forward.
This development in no way impacts our day to day operations.
And as far as this team is concerned it's business as usual.
We'll continue to keep you updated on any material developments with regard to this proposal when we can.
Now.
Once in my remarks for our third quarter performance.
The third quarter marks the beginning of a northern hemisphere season.
We posted third quarter operational revenue growth of three 1%.
$47.8 million on a constant currency basis, despite weather related events in North America that impacted crop size and delayed the harvest season.
As has been noted by many numerous companies with international market exposure foreign currency has also become a significant headwind given the continued strengthening of the U S dollar versus other currencies.
Brag afresh, the impact of foreign exchange and material given that almost 80% of our business is transacted outside of the U S.
For example.
The EMEA region comprises approximately 50% of our annual revenues and this is particularly significant in the second half of the year given the alignment of growing regions to the northern hemisphere.
Despite the impacts of weather and foreign exchange, we continue to advance our diversification strategy.
I'd now like to review the business drivers for the quarter ended September 30th 'twenty, 'twenty, two which marks the beginning of our northern hemisphere season.
To further assist your understanding of our business and monitor the progress of our strategy to grow through diversification.
We are providing you with additional disclosures on both a geographical and product solutions basis.
Details can be found in our supplemental earnings deck.
Our Investor Relations website.
Beginning with diversification remember, we defined our diversification category as the components of our business, excluding smart fresh for Apple.
Which covers all other crops solutions and technologies.
What I reported basis.
For the 12 months ending September 30th 2022.
Diversification revenues grew 12, 7%.
On an operational or constant currency basis growth was 17%.
Diversification now represents 44.5% of consolidated reported revenues for the trailing 12 months ended September 30th 2022, compared to 41, 3% in the prior year period.
This marks our seventh consecutive quarter of double digit diversification category revenue growth.
From a geographical perspective looking at our performance for the third quarter.
The region generated 23.3% constant currency revenue growth or an increase of $6.2 million versus the prior year period, which was the largest contributor to growth for the quarter.
Growth was led by the early timing of smartphone sales in Europe .
On the registration front.
I'm pleased with the granting of emergency use permits again this year for harvest and <unk>.
Markets, such as Eastern Europe , Italy, and Portugal.
Additionally, we were granted registration for harvest in Ukraine as well.
Our Asia Pacific region, although relatively small from a revenue dollar perspective increased 35, 4% on a constant currency basis versus the prior year period, primarily driven by smartphone penetration.
Sales in the Latin America region increased one 3% on a constant currency basis versus the prior year third quarter.
North America region decreased 19% as I. Previously noted this was due to weather related events that impact of Apple crop size and delayed the harvest season, which was partially offset by strong demand for Ela block amid the recovering flower industry.
For our product solutions perspective, once again looking at the third quarter and first half of the northern Hemisphere season growth was once again driven by leveraging our portfolio of diverse solutions.
Our other one M C P category, which represents our continued focus on leveraging our smart fresh franchise beyond apples and into other crops and geographies and includes key solutions, such as our Vista and up a block grew six 6% on a constant currency basis and contribute.
$1.3 million of growth.
Spark fresh diversification growth was led by peers and mangoes in China, and Brazil, respectively.
Our ethical block solution was particularly notable with growth of approximately 80% on a constant currency basis fueled by the flower industry recovery.
Our coatings category grew 59, 3% in the third quarter, when a constant currency basis, and contributed zero point $5 million of growth.
On a smaller revenue base.
Our fungicides and disinfectants category was essentially flat on a constant currency basis in the third quarter versus the prior year period.
Performance was impacted by softness in fungicides with citrus in Brazil.
Partially offset by antimicrobial as growth in Turkey.
Rounding out our diversification categories is the other category, which includes our control Tec equipment solutions and our fresh cloud digital platform.
While the other category small on a relative basis it nearly doubled in the quarter and contributed zero point $2 billion of growth, mainly driven by control Tec.
Our smart fresh for Apple category increased five 6% on a constant currency basis in the third quarter versus the prior year period, driven primarily by growth in EMEA, and APAC, which was partially offset by the weather related and timing of sales impacts in North America.
In some <unk>.
<unk> significant foreign currency headwinds and weather related impacts in North America, we delivered solid growth for the quarter on a constant currency basis.
Our team remains focused on delivering solutions that ensure our customers can provide a consistent supply of high quality fresh probes.
This quarter has also been a busy one with respect to connecting with customers and other industry stakeholders. My leadership team and I participated in two of the largest global industry Tradeshows.
Traction in Madrid, Spain, and the international Fresh produce association meeting in Orlando, Florida the.
The key takeaways from both of these conventions is that the broader global fresh fruit and produce industry is vibrant vital and growing that.
The post harvest segments is equally important and vital to the industry's continued growth.
Agua fresh is well positioned and highly regarded as an industry leader.
It is also clear that new innovation will be required and Agra fresh is positioned well to expand our portfolio and range of solutions that we can bring to market to continue to support this vibrant and vital industry.
As we look to the balance of the northern hemisphere season.
We will continue to navigate the broader macro challenges, while we remain focused on delivering growth for the full year by continuing to advance our diversification strategy.
I'll now pass the call to grant to speak to some of the financial highlights grant.
Yeah.
Thank you Clint.
And good afternoon to everyone.
The third quarter starts our northern hemisphere season.
As a reminder, our business should be viewed in halves versus quarters to consider seasonal fluctuations that can shift sales between the quarters of each half of the year.
Net sales for the third quarter of 2022 decreased two 9% to $47 $8 million compared to $49 $2 million in the third quarter of 2021.
Excluding the impact of foreign currency exchange.
Revenue increased three 1%.
As Chris discussed the net sales increase was primarily driven by leveraging our product portfolio of diverse solutions.
They also were driven by the early timing of sales in EMEA.
And a strong demand for Apple Brock I admit that recovering flower industry.
Small fresh for Apple grew in EMEA, Latin America, and APAC, which was partially offset by North America.
For the nine months ended September 30th 2022.
Net sales were 113 point.
$4 million, an increase of 3% versus the prior year period.
The impacts of foreign currency decreased revenue by $5 $6 million for the first nine months of 2022.
Excluding this impact revenue increased approximately eight 1% driven by leveraging our portfolio of diverse solutions.
On a constant currency basis.
Each of the company's diversification categories generated growth in the nine months ended September 30th 2022.
Led by Antimicrobials in coatings market penetration and expansion in India.
Small fresh diversification and Ethel Brock contributed to growth in the other one MCP category.
This was partially offset by smart fresh for Apple declines in certain countries in Latin America, and in North America, due to unfavorable weather and a tiny events.
Gross profit for the third quarter was $32 $2 million compared to $34.1 million in the prior year period.
Excluding foreign currency impacts gross profit increased three 1%.
Reported gross profit margin was 67, 4% as compared to 69, 4% in the prior year period.
The lower gross margin primarily reflects the company's strategic transition to a more diversified product portfolio.
Unfavorable foreign currency translation.
And a higher material costs associated with inflationary pressure.
For the nine months ended September 30th 2022.
Gross profit was $76.6 million.
Representing gross profit margin of 67, 6%.
Excluding foreign currency impacts gross profit increased one 6%.
We're continuing to work hard on cost savings initiatives and a discrete price actions to help mitigate these headwinds.
And expect some relief.
For the full year as we generate sales on lower cost inventories.
While we always strive to maximize margin our primary focus is on generating gross profit dollar growth consistent with our growth through diversification strategy.
Research and development costs were $3 $2 million in the third quarter of 2022 compared to $3 $3 million in the prior year period.
For the nine months ended September 32022.
R&D decreased $1 million to $9 $1 million compared to the prior year period.
These decreases were primarily driven by the timing of projects.
Our investment in R&D provides for increased to support our product diversification activities to expand our registrations to new crops and geographies.
Valor, new proprietary solutions build out our coatings offerings and strengthen our technical services offerings in alignment with commercial growth objectives.
SG&A expenses increased 10.2.
Or sent to a $13.5 million in the third quarter of 2022.
As compared to $12 $3 million in the prior year period, driven primarily by commercial investment initiatives.
For the nine months ended September 30th 2022.
SG&A expenses decreased 0.8% to $39.8 million journal, primarily by the timing of expenses.
While cost discipline remains a focus for the business. We are also focused on resource allocation toward revenue generating investments to drive continued growth.
Third quarter 2022, net loss was $4 $6 million.
Compared to net income of $8 million in the prior year period.
For the nine months.
And at September 32022.
Net loss was $26 $2 million compared to net loss of $8 $3 million in the prior year period.
As a reminder, during the first quarter of 2021. The company recorded 14.1 meeting daughters of other income which related primarily to the receipt of proceeds from the settlement of a litigation matter.
Adjusted EBITDA decreased by $2 $5 million to $17.9 billion in the third quarter of 2022.
But the nine months ended September 30th 2022, adjusted EBIDTA decreased 0.7% to $35 $3 million compared to the prior year period.
The decrease in adjusted EBITDA was primarily due to lower gross profit, which was negatively impacted by changes in foreign currency and a product mix as compared to the prior year period.
Adjusted EBITDA for the trailing 12 months.
And at September 30th 2022 was $61.8 million representing margin of 36, 5%.
As a reminder, our adjusted EBITA margin performance should be viewed in total for the year to align with the respective southern and northern hemisphere seasons.
Where our higher second half sales volumes translate to correspondingly higher margins for the business.
Cash used by operations.
$2 $8 million for the nine months ended September 30th 2022 versus cash flow provided by operations of $26 million in a comparable prior year period.
Adjusting for the one time benefit of $14 $4 million of litigation proceeds in the prior year period normalized operating cash flow from operations was approximately 11.6 meeting dollars for the nine months ended September 30th 2021.
Reflecting strong working capital performance.
The decrease the normalized cash flow from operations in the first nine months of 2022 was mainly driven by incremental investment in inventory to procure materials in advance to mitigate supply chain concern.
Ours, as well as timing of receivables as compared to the prior year period.
For the nine months ended September 30th 2022 capital expenditures were $2 $6 million compared to $2 $9 million in the prior year period.
We continue to expect our annual capital expenditures to range from 3% to 5% of sales.
In systems, we had an asset light business model.
But my balance sheet perspective cash.
Cash as of September 30th 2022 was $35 $6 million.
Total debt was $261.3 million and our $25 million revolver was undrawn as of September 30th 2022.
This concludes our prepared remarks, operator, please open the call for questions.
Thank you we will now be conducting a question and answer session.
He would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May Press Star two if you would like to remove your question from the queue.
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Your first question comes from Amit Dayal with H C. Wainwright. Please go ahead.
Yes.
Hmm.
Really quickly on the.
The take private proposal I know couldn't you said you can't give too much color, but any granularity on the process and timeline for final, yes or no on this front.
Both of them.
Yeah, I mean listen first of all thank you for joining us for the question and as you can appreciate I really can't comment.
System, what was in the public filings, there's no specific date for the siding Thats something that both pain Schwartz and the special Committee of the board are working in earnest to do and once that is finalized we'll be able to to report at that time, but I really can't comment on any specific.
<unk> further on that.
Understood.
And then just moving onto the operations I mean, it looks like you know this foreign exchange pressure you know it's not.
Just impacting you guys have you seen it across other companies as well that we cover.
Is there a solution to this or do you just have to ride it out and you know this deal with those situations being out.
Yeah first of all I mean I appreciate the recognition you know listen.
<unk> listened to many earnings release, but again you do.
Read the papers you see the news clearly as companies are reporting during the third quarter, regardless of industry or business construct you see the kind of unprecedented level of impact from foreign exchange and trust. It's really notable on two fronts right. So again, 80% of our business.
Is transacted outside of the U S and call it 50% of that business is coming from the EMEA and I would say I can't tell.
And through my professional career, where you saw the euro at parity with the U S. Dollar and so you know I think like everybody, we need to continue to write and run the business responsibly.
You know we have to believe that we don't have the benefit of Crystal ball at some point.
The foreign exchange dynamic begins to temper.
But I think at the core is really kind of responsibly riding it out as we continue to manage the business manage the business for growth and then responsibly kind of manage where we can.
Okay. That's all I have for now.
I'll take my other questions offline. Thank you.
Hi, Jamie.
Next question comes from Joel Jackson with BMO capital markets. Please go ahead.
Yeah.
And gentlemen.
Hey, Joel.
I know, it's early looking 23, let's do it.
Can you think of you know some off that.
And 'twenty three that might help offset some of the foreign currency like me.
Maybe you could prioritize some of the biggest offsets you would see that might give you a chance with some growth in 'twenty three or how do you think about that.
Yeah, I mean, I'll, let me start and then maybe pass to Graham I think so again, none of us have a benefit of of where.
Foreign exchange is going to go you we'd have to assume in some responsible timeframe, whether it's 12 months 18 months that you start to see some relief and and and and and some GAAP returned back to the currency dynamic where what has been a headwind today becomes more of a positive all.
So recognizing the fact that we do transact in Europe also a number of the cost in terms of supporting the business in Europe are also denominated in that currency in some respects the currency does become a good guy in that context.
Clearly.
And these also inflationary times as we've discussed we're trying to see responsibly, where we can take price, but again I think I also want to remind our investors and analysts that we are really the only public company in our space alongside a host of small.
<unk>, often times regional and private companies and again, while we cant dictate their strategy. They continue to demonstrate what I would argue is a very undisciplined way in terms of how they're trying to.
Gain business bye.
[laughter] lowering price even at a time, where you could argue the cost of doing business for everybody is increasing and this is where we should responsibly trying to take price.
So again I think foreign exchange will work itself out because we operate again, 50% of our business as an example in Europe .
In Europe , and that's where the currency is impacting us. Most also the cost of doing business. There should also be an offset in time as well, but let me pause here and see if Graham wants to add anything else to that.
Yeah, that's exactly right Joel by the very nature of our global business because of our presence around the world are.
That intrinsically we do have a oh.
Natural hedge because of costs incurred locally so to that extent there are good guys in terms of our cost of goods and the other P&L line, which was operating expenses. So the so that's where we see the offset and then to the extent.
Ted FX continues to play a role and we think it's probably not going to be forever at some point, the thought or I will come back to to its normal a range and that's a well you know like every.
International business, so won't write it out yeah, Joel I think one tangible example, where we get some benefit it may be muted as it moves through the P&L was coming out of the the acute part of the pandemic that I think there was some smart.
Purchasing with respect to inventory of smart fresh and again based on the contract that we had.
Put us in a position, where we were able to benefit on a relative basis from a lower cost.
As opposed to kind of where a number of suppliers were being increased and obviously smart fresh being our largest product category.
Do get some benefit as you think about it on an annual kind of inventory revaluation, but that's one tangible example, where it has been a little bit of a benefit in terms of how we work to manage our inventory purchasing.
Yeah.
Thank you very much.
Thank you Joe.
Question that Cliff with Lake Street capital markets. Please go ahead.
Alright, Thanks for taking my questions the first clinical.
Follow up question for you and your answer to Joe's question, you're talking about competitors competing on price you know what the dynamic you you've discussed historically I'm curious if you can elaborate on if you see this dynamic happening more or less today than you did say you know I don't know earlier this year and also if you see that happening still more in the <unk>.
Fresh for Apple business, or if you're observing it increasingly throughout your portfolio.
Yeah, I think first of all there and thank you for the question.
I think clearly the dynamics of the businesses that we do have competition.
For smart fresh.
As you well know lost the patent.
A number of years ago, and I think would really speaks to the durability of the business the product and our business model is the relationships continue to be very sticky and we enjoy well in excess of 60% market share. If you think about it globally and therefore in some places even higher than that and so.
Listen the customers continue to grant us a premium.
In pricing even in the face of continued offers 2222 to try to get you know.
A knockoff product at a at a at a lower price, but I think for me.
What helps to understand the dynamics of this business as you know we're dealing with individual customers that have their own definition of value and for us between not just smart fresh but other products. So the breadth of the portfolio.
The extent of the services that we provide the quality of our people how we kind of put that together in a way that is relevant and resonates with each of these unique customers is really what makes and we will continue to make this business very durable and.
And sustainable for the long term.
Okay very helpful. Thanks Quint.
Another one for I'm not sure who this is better addressed to us around the harvest delays I'm wondering if you can help us kind of understand the magnitude of the delay at the degree to which delays are pushing product from the fresh market to you know the process market.
And you know kind of your early thoughts on seasonality in the second half outlook.
If you think it's going to be similar to last year or do you think theres going be more concentrated.
This would be more concentrated in the fourth quarter.
Yeah first of all great great questions, Let me try to unpack that in a number of different ways. So first again, it's a good reminder, I'm surprised [laughter], we're almost through the Q&A, we havent remind that you know we manage the business on seasons not not on quarters.
And as best as it kind of can translate you could call. It half right. So the first half of the year really is aligned to the southern hemisphere markets and the second half, which is bigger for US obviously is aligns to the northern hemisphere.
It is invariably the case as you get between quarters and we saw this last year I would remind the audience that last year. This time, we talked about a delay in Europe and as we finished or got towards the end of the fourth quarter. We did get again, a good surprise benefit as you had some <unk>.
Late varieties.
That were harvested and the customers brought those to value and they obviously needed the help of smart fresh and we benefited from that.
Conversely, youre seeing in our third quarter results year to date, we saw an early start to the season in Europe , that's benefiting and smart fresh, but Conversely, we're seeing a delay in the the harvest dynamics in Pacific Northwest.
Almost exclusively driven by weather if you remember last year Pacific Northwest was impacted by an unprecedented heatwave for a number of weeks that really stressed and challenged channeled the crop and the crop was already down last year, specifically to your question and we get this from.
The U S. Apple reports so this is outside of Agra fresh.
The the volume or the crop in Pacific Northwest roughly at this point is about 11% down compared to last year and the other way I would look at it is when we model.
Model on a five year average because that kind of takes out the noise of weather or other impact any one year. So we kind of look at that five year average and a lot of the external analysts that track. The crops also do the same so we get aspect of that five year average and oftentimes if you have it.
<unk> crop one year, there's a good chance you have a bumper crop. The next year doesn't always play that you can't forecast mother nature, but Pacific Northwest, specifically is down about 11% compared to last year and down 15% on the five year average and that and and being down 11% last year.
Already last year was challenged because of the impressive heatwave.
The crop hat.
Yeah.
Got it got it. Thank you yeah the mother Nature's.
Mr <unk> I understand.
One, but then if I can just depending on what if I could just sorry, I'm afraid if I could just interject I get it just yeah.
I'd be remiss if I didn't also use that to say this is yet another reason of the importance of our diversification strategy and the continued success that we're having a diversification diversification is not just a a means to drive incremental growth. It is also a.
Great risk mitigation hedge, especially in agriculture, where you're again, you can't predict mother nature. So as we continue to grow our revenue base through diversification.
Naturally we become less dependent on any one product to our portfolio any one crop any one geography, any one customer and we're well on our way to continue to drive that diversification sorry. My friend. If you can ask the next question.
No no you got an end point taken them now you guys have done an exceptional job of building that part of the business over the last 24 plus months out so and hear you loud and clear on one.
One more and then I'll get back in queue, a grandma I'm wondering if there were any.
Costs associated with the pending acquisition in the third quarter and if you expect any costs associated with this in the fourth quarter.
Yeah, the cost for the pending transaction will be treated consistently as we did in the past it will be a if you look at our adjusted EBITDA reconciliation table typically.
These costs would be.
Considered to adjust it right a nonrecurring infrequent in nature, so that would not be part of the adjusted EBIDTA.
And so I guess, a quick follow up I mean, you've got 525000 of other nonrecurring cost that I assume that would be lumped into I guess does that does that 525 is that entirely.
Those people that this is there a bunch of other stuff going on just trying to understand the magnitude.
Of any cost in the third quarter.
Even though they are backed out of the adjusted numbers.
Yeah. So we are right now obviously this is a transaction which is just a it was just announced so right now where we do not have visibility in terms of the total transaction costs at this moment.
Okay very good very good alright, well.
Thanks for taking my questions best of luck here rounding out the year and I'll get back in queue.
Thank you.
Our final question comes from Gerry Sweeney with Roth Capital. Please go ahead.
Good afternoon, Glenn Graham Thanks for taking my call.
Thank you Joe kind of question I'll go with but maybe from a different tact, obviously, you got registrations out there.
If if youre looking out to next year, where do you put allocate some of that money that marketing is the continued pushing on registrations sort of what the registration pipeline look like and.
I'll leave it there then.
I have a follow up.
Yeah I appreciate that you know again, we report on SG&A, but really where the attention should be as on the value generative investments on the sales the marketing and the R&D side too.
To your question the areas.
That will continue to be critically important to fuel our future growth is one the continued focus on the regulatory side to continue to secure the registered to generate the data and to secure the registrations for the use of our products across other crew.
<unk> in other geographies I will also remind.
That from an ROIC standpoint, the most effective and efficient.
Use of R&D dollars are in the ways that we focus it which is largely on the regulatory and on the development. So R&D can mean different things to different stakeholders. In this business. They are not early stage high risk speculative again theres an important.
<unk>, but the vast majority of our business is not in the early stage high risk research, it's more in the regulatory side, where the regulatory path is clear it's defined and therefore, we have what we call a high P. T. R. S probability of technical and regulatory success to bring those products to market the other.
<unk> the D again, unlike discovery, which is again high risk and again variable return ours is in development, where we take known actives known substrate and we generate the data on how it responds to given pathogens across different crops and.
Across different geographies, so again from an efficiency standpoint from an ROI standpoint, very very focused very effective. The other is on the sales and marketing side and I would prioritize that first is on the customer facing roles both for sales and customer facing for our technical.
Service.
And these are our local crop experts that work hand in hand, with our customers along with our sales account managers to really not only help position our products in the particular customers given their unique operation, but also help to troubleshoot and a number of.
Different ways and so as we look to expand diversification, there's the regulatory component, but also it's about putting appropriately responsibly more boots on the ground and we're not talking about armies, either onesies and twosies in key strategic markets I draw attention to markets like California markets like <unk>.
Mexico.
What we're doing in South Africa.
Exciting opportunities for growth in markets like Egypt.
These are areas, where we continue to see tremendous opportunities for not only growth, but diversification growth and then the marketing side is really about how do we equip.
Those teams with the right compelling data and support tools to give them a compelling reason to use our products.
It's the registration regulatory funnel.
Bigger this year than last year, just trying to understand.
How much of an opportunity is in that pipeline and obviously some are going to come to fruition at different points that you are looking at them, but just want to understand that.
Yeah, I think so one.
So the first part of your question.
The areas of strategic investment or R&D. So this is areas, where you should see smartly and increasing.
In our investment in R&D again in the areas that we've talked about and again the regulatory.
Passed in a number of these markets can range from 18 months two years, two and a half years, depending on the market or the substrate. This year through the third quarter. If you notice we you you see less.
Less spend in R&D than the same time last year, but that is really a function of timing of investments. Some of those may pick up in the fourth quarter, but some of that May also spill into the first half. So it's more timing, but again I would say from the standpoint of programs and projects I would say.
Actually in sequentially more.
Driven from the the prospects that we see from a diversification standpoint.
Got it got it I appreciate it. Thank you yep. Thank you.
I will now turn the floor over to management for closing remarks.
Okay.
But again he may have withdrew his question, but I believe that Ben <unk> was going to get back into queue. I don't know if he's still on well if he's still wanting to but I want to give them an opportunity. If you wanted to ask a question.
Yeah.
Okay.
Ben Your line your line is live now.
Oh, Thank you Glen I, maybe I misspoke I appreciate the opportunity, but I'm in good shape.
Okay didn't I didn't want to make sure we didn't pass your boss, but thank you.
Thank you I'll turn it back to myself then so what's the.
As has been said a number of companies not unique to Agra fresh are having to deal with the in some cases, the unprecedented level of impact in foreign exchange and for us largely given the the parity between the dollar and the Euro are these things will eventually subside. It does not change the structural nature of the business the focus that we're on.
And the progress quite frankly that we're having and that's why it was important for us not just to highlight the reported.
Our financial results, but also to equally show the operational or constant currency. So that you can see the continued not only focus on driving growth, but the continued results in driving growth and so I continue to feel good about the progress that we're making I continue to feel really good about the opportunities that.
Lie ahead of us to continue to bring that much more value to our customers along the post harvest space. So thank you for your questions. Thank you for your engagement and thank you for your support of AG refresh.
This concludes today's teleconference. You may disconnect your lines at this time and thank you for your participation.
Okay.
Yeah.
[music].