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Financial Data and Key Metrics Changes - Net revenue increased by 2.9% year over year to $307 million, up from $298.4 million in the prior year quarter [11] - Gross profit rose by 0.5% to $50.4 million, compared to $50.2 million in the prior year quarter [11] - Adjusted EBITDA surged by 41.5% year over year to $11.7 million, compared to $8.3 million in the prior year quarter [12] - Net loss improved to $0.9 million from a loss of $3.8 million in the third quarter of 2024 [12] - Adjusted net income increased to $4.3 million, compared to $2.2 million in the prior year period [13] Business Line Data and Key Metrics Changes - The increase in net revenue was primarily driven by volume increases and improved pricing in the meat, poultry, and seafood categories [11] - Gross profit margin remained relatively consistent at 16.4%, compared to 16.8% in the same period in 2024, due to a higher proportion of sales from lower-margin products, particularly seafood [12] Market Data and Key Metrics Changes - The company experienced lower foot traffic consistent with broader industry trends, but this was offset by strong volume in select markets and pricing actions taken [5] - Specific markets, such as Salt Lake City, showed effective product rationalization leading to better business performance [22] Company Strategy and Development Direction - The company is focused on diversifying its supplier base and exploring alternative sourcing strategies to ensure continuity and cost-effectiveness in its supply chain [5] - Strategic facility enhancements are underway, including the renovation of the Charlotte Distribution Center and the expansion of cold storage capacity in Atlanta, which is expected to double capacity in the region [8] - M&A remains a core pillar of the company's growth strategy, with a focus on expanding geographic footprint and capturing operational synergies [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth strategy despite ongoing macro challenges, including tariff pressures and shifts in consumer spending behaviors [4] - The company anticipates Q4 results to be similar to Q3, with a strong foundation built for future growth [5] - The digital transformation initiative is expected to enhance operational efficiency and customer service through a unified ERP platform [6] Other Important Information - The company announced the acquisition of a Chicago warehouse, which is expected to improve operational efficiency and reduce facility costs [8] - The strategic acquisition is part of the ongoing transformation plan to strengthen organic growth through cross-selling opportunities [8] Q&A Session Summary Question: Capacity increases for 2026 - Management indicated that the cold storage capacity in Atlanta will effectively double, moving from a 100,000 sq ft warehouse to approximately 190,000 sq ft [18] Question: Cost savings from restructuring the Salesforce - Management emphasized that the restructuring aims for efficiency while maintaining customer understanding and service quality, with normalization expected by mid-Q1 2026 [19][20] Question: Monthly cadence and government shutdown impact - Management noted that Q3 followed the trend of Q2, with some impact from tariffs and government shutdowns affecting specific markets like Virginia [21] Question: Maintenance CapEx and organic growth outlook - Management stated that typical maintenance CapEx fluctuates between $10-$15 million annually, with potential increases due to strategic acquisitions [27] - Organic growth is expected to ramp up in 2026, particularly in the frozen seafood segment in the Southeast market [29]

Financial Performance - Net revenue for the three months ended September 30, 2025, increased by $8.6 million, or 2.9%, compared to the same period in 2024, primarily due to volume increases and improved pricing in Meat & Poultry and Seafood [127]. - Gross profit was $50.4 million for the three months ended September 30, 2025, compared to $50.2 million in the same period in 2024, an increase of $0.2 million, or 0.5% [128]. - Net revenue for the nine months ended September 30, 2025, increased by $23.9 million, or 2.7%, compared to the same period in 2024, primarily due to volume growth and improved pricing in key categories [137]. - Gross profit for the nine months ended September 30, 2025, was $156.5 million, an increase of $3.5 million, or 2.3%, with a gross profit margin slightly decreasing to 17.0% from 17.1% in the same period in 2024 [138]. - Adjusted EBITDA for the nine months ended September 30, 2025, was $35.4 million, an increase of $7.8 million compared to $27.6 million for the same period in 2024 [115]. - Income from operations for the three months ended September 30, 2025, was $1.1 million, an increase of $0.6 million compared to $0.5 million in the same period in 2024 [124]. Expenses and Losses - Distribution, selling and administrative expenses decreased by $0.4 million, or 0.7%, to $49.3 million for the three months ended September 30, 2025, with expenses as a percentage of net revenue decreasing to 16.1% from 16.6% [129]. - Distribution, selling, and administrative expenses were $150.1 million for the nine months ended September 30, 2025, slightly increasing from $150.0 million in 2024, with expenses as a percentage of net revenue decreasing to 16.3% [139]. - Net loss attributable to HF Foods Group, Inc. was $1.1 million for the three months ended September 30, 2025, compared to a net loss of $3.9 million for the same period in 2024, reflecting an improvement driven by increased income from operations [132]. - Net loss attributable to HF Foods Group Inc. was $1.5 million for the nine months ended September 30, 2025, compared to a net loss of $4.6 million in the same period in 2024, an improvement of $3.1 million [142]. Cash Flow and Financing - As of September 30, 2025, the company had cash of approximately $12.3 million and access to $49.8 million in additional funds through its line of credit [145]. - Net cash provided by operating activities increased by $0.3 million to $4.5 million for the nine months ended September 30, 2025 [152]. - Net cash used in investing activities increased by $0.4 million primarily due to increased capital project spending [153]. - Net cash provided by financing activities increased by $1.8 million to $3.2 million during the nine months ended September 30, 2025, due to higher net proceeds from line of credit activity [154]. Operational Changes and Strategies - The company has initiated a comprehensive operational transformation plan focused on centralized purchasing, fleet and transportation improvements, digital transformation, and facility upgrades to drive growth and cost savings [114]. - The company acquired two frozen seafood suppliers in 2022, expanding its distribution network across several states, enhancing its market presence [112]. Goodwill and Fair Value - The company recorded a goodwill impairment charge of $46.3 million in Q4 2024 due to a decline in stock price, indicating impairment as of December 31, 2024 [156]. - The fair value assessment utilized a combination of discounted cash flow (DCF) and market approaches, with equal weighting, to estimate the reporting unit's fair value [157]. - A 100 basis point increase in the discount rate assumption could decrease the fair value of the reporting unit by approximately $11.6 million, indicating sensitivity to key assumptions [159]. - As of September 30, 2025, the company determined no events would likely reduce the fair value of the reporting unit below its carrying value, despite a decrease in share price attributed to market reactions [160]. Debt and Interest - Interest expense for the three months ended September 30, 2025, was $2.9 million, slightly up from $2.6 million in the same period in 2024 [130]. - Interest expense decreased by $0.2 million, or 2.7%, for the nine months ended September 30, 2025, primarily due to a decrease in the average daily mortgage-secured term loan balance [140]. - The company's aggregate floating rate debt outstanding as of September 30, 2025, was $69.3 million, representing 39.7% of total debt, with a potential $0.7 million change in interest expense for a 1% rate change [164]. Market Conditions - Average diesel fuel prices increased by 1.8% in Q3 2025 compared to Q3 2024, impacting operating costs and consumer spending behavior [165]. - The company does not actively hedge diesel fuel price fluctuations but aims to minimize risk through delivery route optimization and fleet utilization improvements [166].

Financial Performance - Net revenue for Q3 2025 increased by 2.9% to $307.0 million compared to $298.4 million in the prior year[4] - Gross profit was $50.4 million, slightly up from $50.2 million in the same period last year, with a gross profit margin of 16.4%[5][6] - Net loss decreased by 77.2% to $0.9 million for Q3 2025, compared to a net loss of $3.8 million in Q3 2024[8] - Adjusted EBITDA rose by 41.5% to $11.7 million, up from $8.3 million in the prior year[9] - For the nine months ended September 30, 2025, the net loss was $1,894,000, a decrease of 54.4% compared to a net loss of $4,161,000 in the same period of 2024[20] - EBITDA for the nine months ended September 30, 2025, was $26,535,000, an increase of 8.2% from $24,532,000 in 2024[26] - Adjusted EBITDA for the nine months ended September 30, 2025, was $35,366,000, reflecting a 28.3% increase from $27,568,000 in 2024[26] - Non-GAAP net income attributable to HF Foods Group Inc. for the nine months ended September 30, 2025, was $14,204,000, up 81.1% from $7,838,000 in 2024[27] - The company reported a non-GAAP diluted earnings per share of $0.27 for the nine months ended September 30, 2025, compared to $0.15 in 2024, representing an 80% increase[27] Cash Flow and Expenses - Cash provided by operating activities for the nine months ended September 30, 2025, was $4.5 million, compared to $4.2 million in the prior year[10] - The company reported a net cash provided by operating activities of $4,483,000 for the nine months ended September 30, 2025, compared to $4,225,000 in 2024[20] - Cash at the end of the period was $12,328,000, an increase from $11,445,000 at the end of September 2024[20] - Distribution, selling, and administrative expenses decreased by 0.7% to $49.3 million, representing 16.1% of net revenue[7] - Interest expense, net for the nine months ended September 30, 2025, was $8,331,000, a slight decrease from $8,597,000 in 2024[26] - The net cash used in investing activities for the nine months ended September 30, 2025, was $9,862,000, compared to $9,423,000 in 2024[20] - The company incurred business transformation costs of $2,458,000 for the nine months ended September 30, 2025, compared to $1,180,000 in 2024[27] Strategic Outlook - Management expressed confidence in long-term strategic plans, including evaluating M&A opportunities for geographical expansion[3] - The increase in net revenue was primarily driven by volume increases and improved pricing in Meat & Poultry and Seafood[4] - The company aims to leverage its market leadership in Asian specialty distribution to drive sustained growth and long-term value for shareholders[3] Liquidity - The company had cash of $12.3 million and access to approximately $49.8 million in additional funds through a line of credit as of September 30, 2025[10]

Core Insights - HF Foods Group Inc. reported a net revenue increase of 2.9% to $307.0 million for Q3 2025 compared to $298.4 million in the prior year, driven by volume increases and improved pricing in Meat & Poultry and Seafood [5][19] - The company achieved a significant reduction in net loss, decreasing by 77.2% to $0.9 million from $3.8 million in the same quarter last year, attributed to improved operational performance and changes in fair value of interest rate swap contracts [9][19] - Adjusted EBITDA rose by 41.5% to $11.7 million from $8.3 million in the prior year, reflecting the effectiveness of the company's transformation initiatives [10][19] Financial Performance - **Net Revenue**: Increased to $306.978 million for Q3 2025, up by $8.589 million from the previous year [3][19] - **Gross Profit**: Slightly increased to $50.409 million, with a gross profit margin of 16.4%, compared to 16.8% in Q3 2024 [6][19] - **Net Loss**: Decreased to $0.874 million from $3.837 million in the prior year, with a loss per share of $0.02 [9][19] - **Adjusted Net Income**: Increased to $4.345 million for Q3 2025, compared to $2.210 million in the same period last year [30][19] Operational Efficiency - **Distribution, Selling, and Administrative Expenses**: Decreased by $0.4 million, or 0.7%, as a percentage of net revenue fell from 16.6% to 16.1% [7][19] - **Cash Flow**: Cash provided by operating activities was $4.5 million for the nine months ended September 30, 2025, compared to $4.2 million in the prior year [11][19] Management Commentary - The CEO highlighted the company's solid financial performance and ongoing transformation initiatives, expressing confidence in long-term strategic plans, including potential M&A opportunities [4][19] Company Overview - HF Foods Group Inc. is a leading distributor of international foodservice solutions to Asian restaurants across the U.S., aiming to meet the growing demand for Asian cuisine [13][19]

Core Viewpoint - HF Foods Group Inc. is set to report its financial results for Q3 2025 on November 10, 2025, after market close, indicating a focus on transparency and communication with investors [1]. Company Overview - HF Foods Group Inc. is a prominent distributor of foodservice solutions, primarily targeting Asian restaurants and other businesses in the United States [3]. - The company specializes in fresh produce, frozen and dry food, and non-food products, aiming to meet the growing demand for Asian American cuisine [3]. - HF Foods operates a nationwide network of distribution centers and maintains strong relationships with growers and suppliers in both the US and Asia [3]. - The company is headquartered in Las Vegas, Nevada, and trades on Nasdaq under the symbol "HFFG" [3]. Upcoming Events - A conference call to discuss the financial results will take place on November 10, 2025, at 1:30 p.m. PT (4:30 p.m. ET) [2]. - The webcast of the conference call will be available on the company's Investor Relations website, and a replay will be archived for later access [2].

Core Insights - HF Foods Group Inc. has appointed Jeffery Taylor to its Board of Directors, bringing extensive finance leadership experience to the company [1][2][3] Company Overview - HF Foods is a leading distributor of international foodservice solutions, primarily serving Asian restaurants and other businesses across the United States [1][9] - The company aims to meet the growing demand for Asian American cuisine through its nationwide distribution network and strong relationships with suppliers [9] Leadership Changes - Jeffery Taylor has over 27 years of senior finance leadership experience, including roles as CFO at Franklin Electric, where he led significant revenue and operating income growth [2][3][4] - The company has announced a CFO transition, appointing Paul McGarry as Interim CFO, effective October 15, 2025, while searching for a permanent successor [6][7] - McGarry has extensive finance experience and knowledge of HF Foods' operations, ensuring continuity during the transition [6][7] Strategic Goals - Taylor's expertise in M&A execution and capital markets is expected to support HF Foods' operational transformation and growth initiatives [2][3] - The company is focused on enhancing shareholder value and operational excellence, aligning with Taylor's experience in driving profitable growth [3][5]

Core Viewpoint - HF Foods Group Inc. has entered into a binding purchase agreement for a distribution facility in Chicago, which is expected to enhance operational efficiency, reduce costs, and support long-term growth [1][2][3] Group 1: Acquisition Details - The acquisition allows HF Foods to exit an existing lease early, improve operating expenses, and invest in the facility to increase capacity and drive consolidation opportunities [2][3] - The facility has been a key part of HF Foods' Midwest distribution strategy, and the company plans to expand its presence in the region over the coming years [3] Group 2: Financial Strategy - HF Foods has established an At-the-Market (ATM) equity offering program to provide liquidity for capital expenditures, acquisitions, and business expansion [1][2] - The ATM program is expected to enhance financial flexibility, enabling the company to pursue similar acquisitions in the future [3] Group 3: Market Positioning - The acquisition is part of HF Foods' ongoing transformation plan aimed at improving operational efficiency and strengthening organic growth through cross-selling opportunities [2][3] - The company aims to deepen its commitment to the Chicago region, which is expected to yield long-term benefits for local restaurant customers by improving operational control and logistics [3] Group 4: Company Overview - HF Foods Group Inc. is a leading distributor of foodservice solutions primarily to Asian restaurants across the United States, leveraging a nationwide network of distribution centers [4]

Core Viewpoint - HF Foods Group Inc. has launched an At-The-Market (ATM) equity offering program to sell shares of its common stock for gross proceeds of up to $100 million [1][2]. Group 1: Equity Offering Details - The ATM program will allow HF Foods to sell shares through D.A. Davidson & Co. and Roth Capital Partners as sales agents [1]. - The proceeds from the ATM program will primarily be used for general corporate purposes, including working capital, capital expenditures, and potential acquisitions or business expansion [2]. Group 2: Company Overview - HF Foods Group Inc. is a prominent distributor of fresh produce, frozen and dry food, and non-food products, primarily serving Asian restaurants and foodservice customers across the United States [5]. - The company aims to meet the growing demand for Asian American cuisine by leveraging its distribution network and strong relationships with suppliers in the US, South America, and Asia [5].

Company Overview - HF Foods is the 1 specialty food distributor to Asian restaurants, covering 95% of the contiguous U S [14, 28] - The company has $465 million in asset value and $1 2 billion in net revenue [15] - HF Foods boasts a gross margin of 17 1% and an adjusted EBITDA of $42 0 million, with a 21 6% year-over-year increase in adjusted EBITDA [15] Market and Sourcing - The Asian foodservice total addressable market (TAM) is $50 billion with a 2 5% CAGR [15] - HF Foods sources from over 1,100 vendors, with 67% of sourcing from the United States [40, 42] - The company serves over 15,000 independent restaurant customers [15] Growth Strategy - HF Foods aims to grow revenues and expand margins through cross-selling opportunities, expansion in core markets, and an e-commerce platform for retail expansion [46] - The company has a clearly defined margin expansion strategy, including centralized purchase order management, network optimization, and technology upgrades [47] - HF Foods has a proven M&A platform for geographic expansion, increasing distribution capabilities, and adding new products [48, 49] Financial Outlook - The company projects organic revenue to reach $1 4 billion to $1 5 billion+ and adjusted EBITDA to reach $60 million to $75 million+ in 3-5 years [56] - HF Foods anticipates $120 million to $150 million in inorganic revenue opportunities [56]