Company Overview - HF Foods Group Inc. is a leading marketer and distributor of fresh produce, frozen and dry food, and non-food products primarily to Asian restaurants and other foodservice customers across the United States [2] - The company aims to meet the increasing demand for Asian American restaurant cuisine by leveraging its nationwide distribution network and strong relationships with growers and suppliers in the US, South America, and Asia [2] - HF Foods is headquartered in Las Vegas, Nevada, and trades on Nasdaq under the symbol "HFFG" [2] Investor Engagement - The company will participate in the 37th Annual Roth Conference in Dana Point, CA, on March 17-18, 2025, where the executive management team will host a fireside chat and meetings with investors [3] - The fireside chat is scheduled to begin at 8:00 a.m. PT on March 18, 2025, and will be webcast live, with an archived replay available [3] - On March 19, 2025, the executive management team will participate virtually in the Sidoti Small-Cap Conference, hosting virtual meetings with investors throughout the day [3]

Core Viewpoint - HF Foods Group Inc. has amended its Credit Agreement to enhance financial flexibility, supporting its growth strategy and strategic transformation plan [1][2]. Group 1: Financial Agreement Details - The amended agreement increases HF Foods' aggregate revolving commitment by $25 million, bringing the total to $125 million [1]. - Wells Fargo has been added as an additional lender alongside JPMorgan Chase Bank and Comerica Bank [1][2]. Group 2: Company Overview - HF Foods is a leading distributor of food products to Asian restaurants across the United States, focusing on fresh produce, frozen and dry food, and non-food products [3]. - The company aims to meet the growing demand for Asian American cuisine by leveraging its distribution network and strong relationships with suppliers [3].

Company Overview - HF Foods Group Inc. is a leading marketer and distributor of fresh produce, frozen and dry food, and non-food products primarily to Asian restaurants and other foodservice customers across the United States [2] - The company aims to meet the increasing demand for Asian American restaurant cuisine by leveraging its nationwide distribution network and strong relationships with growers and suppliers of high-quality specialty food products from the US, South America, and Asia [2] - HF Foods is headquartered in Las Vegas, Nevada, and trades on Nasdaq under the symbol "HFFG" [2] Upcoming Events - HF Foods will participate virtually in the Oppenheimer Emerging Growth Conference on February 25, 2025 [1] - The executive management team will host one-on-one meetings with investors throughout the day [1]

Group 1 - HF Foods Group Inc. will participate in the 2025 ICR Conference in Orlando, FL, hosting meetings with investors on January 13-14, 2025 [1] - The company is a leading distributor of food products to Asian restaurants across the United States, focusing on fresh produce, frozen and dry food, and non-food products [2] - HF Foods aims to meet the growing demand for Asian American cuisine by leveraging its distribution network and strong relationships with growers and suppliers [2] Group 2 - HF Foods is headquartered in Las Vegas, Nevada, and trades on Nasdaq under the symbol HFFG [2] - The company has a nationwide network of distribution centers and sources high-quality specialty food products from the US, South America, and Asia [2]

Core Viewpoint - HF Foods Group Inc. has appointed Felix Lin as the permanent CEO effective January 1, 2025, as part of its strategic transformation plan [1][2][3] Leadership Changes - Felix Lin has been with HF Foods for five years and will transition from COO to CEO, with his previous responsibilities being distributed among the senior management team [2] - Jason White has been appointed as Senior Vice President, People and Technology, to lead the digital transformation and new ERP program [3] - Paul Guan will take on the role of Vice President, Distribution Center Operations, bringing over 20 years of industry experience [3] Strategic Transformation Plan - The strategic transformation plan is ongoing, focusing on enhancing service quality and expanding the company's market position as a leading provider of Asian cuisine [2][3] - The company aims to leverage its nationwide distribution network and strong supplier relationships to meet the growing demand for Asian American restaurant cuisine [4]

Financial Performance - Net revenue for the three months ended September 30, 2024, was $298,389, an increase of $16,936 compared to $281,453 for the same period in 2023, representing a growth of approximately 6%[103] - Adjusted EBITDA for the three months ended September 30, 2024, was $8,305, a decrease of $1,792 from $10,097 in the same period of 2023[103] - The net loss for the three months ended September 30, 2024, was $(3,837), compared to a net income of $1,974 for the same period in 2023, reflecting a decline of $5,811[111] - Gross profit for the three months ended September 30, 2024, was $50,163, a slight decrease of $762 from $50,925 in the same period of 2023[111] - Net revenue for the nine months ended September 30, 2024 increased by $28.8 million, or 3.3%, compared to the same period in 2023[124] - Gross profit for the nine months ended September 30, 2024 was $153.0 million, an increase of $1.3 million, or 0.8%, with a gross profit margin of 17.1%[125] - Net loss attributable to HF Foods Group Inc. was $4.6 million for the nine months ended September 30, 2024, compared to a net loss of $4.9 million for the same period in 2023[129] Expenses and Costs - Distribution, selling, and administrative expenses increased to $49,652 for the three months ended September 30, 2024, up from $48,841 in the same period of 2023, an increase of $811[111] - Distribution, selling and administrative expenses increased by $0.8 million, or 1.7%, for the three months ended September 30, 2024, with expenses as a percentage of net revenue decreasing to 16.6%[116] - Distribution, selling and administrative expenses decreased to $150.0 million for the nine months ended September 30, 2024, from $154.0 million in the prior year[126] - Interest expense for the nine months ended September 30, 2024 increased by $0.2 million, or 2.0%, primarily due to an increase in the average daily line of credit balance[127] Operational Initiatives - The company has initiated a comprehensive operational transformation plan focused on centralized purchasing, fleet and transportation improvements, digital transformation, and facility upgrades[102] - The company aims to expand its distribution network, having acquired two frozen seafood suppliers in 2022, enhancing its reach in multiple states including Illinois and Texas[100] - The company is implementing a modern ERP solution across all distribution centers to enhance operational efficiency and data-driven decision-making[102] - The centralized purchasing program has yielded positive results in margin expansion for seafood products, with plans to expand to other categories[102] Cash Flow and Liquidity - The net cash used in operating activities for the nine months ended September 30, 2024, was $(3,299,000), a decrease of $23,923,000 compared to $20,624,000 for the same period in 2023[138] - The company’s liquidity is influenced by economic conditions and competitive pricing in the foodservice distribution industry, which may affect future cash flow[136] - The company’s net cash provided by financing activities was $8,935,000 for the nine months ended September 30, 2024, a decrease of $37,000,000 compared to $(28,018,000) for the same period in 2023[141] Risks and Challenges - The company is focused on addressing risks such as low margins in the foodservice distribution industry and potential disruptions in global supply chains[98] - The company performed a quantitative goodwill impairment assessment as of September 30, 2024, concluding that the estimated fair value exceeded carrying value by approximately 1% or $5 million[144] - The company has floating rate debt of $69.1 million, representing 39% of total debt, with a potential $0.7 million change in interest expense per year for a 1% change in applicable rates[156] - The company has no off-balance sheet arrangements that are likely to have a material effect on its financial position as of September 30, 2024[137] Fuel Costs - In Q3 2024, average diesel fuel prices decreased by 14.6% compared to Q3 2023[157] - The company currently has adequate supplies of diesel fuel, but future availability and pricing remain unpredictable[157] - Diesel fuel price fluctuations are influenced by external factors such as geopolitical developments and supply and demand dynamics[157] - Increased diesel fuel costs could raise the company's cost of goods sold and operating expenses[157] - The company does not actively hedge against diesel fuel price fluctuations[158] - Fuel cost risk is minimized through delivery route optimization and fleet utilization improvements[158]

Financial Performance - Net revenue for Q3 2024 increased by 6.0% to $298.4 million compared to $281.5 million in the prior year[2]. - Gross profit for Q3 2024 decreased by 1.5% to $50.2 million, with a gross profit margin decline to 16.8% from 18.1% in the prior year[2][6]. - The company reported a net loss of $3.8 million in Q3 2024, compared to a net income of $2.0 million in the prior year[2][8]. - Adjusted EBITDA for Q3 2024 decreased by 17.7% to $8.3 million compared to $10.1 million in the prior year[2][9]. - For the nine months ended September 30, 2024, net revenue increased by 3.3% to $896.4 million compared to $867.6 million in the prior year[3][10]. - Gross profit for the nine months increased by 0.8% to $153.0 million, with a gross profit margin decrease to 17.1% from 17.5% in the prior year[3][11]. - The net loss for the nine months improved to $4.2 million from a loss of $5.4 million in the prior year[3][13]. - Adjusted EBITDA for the nine months increased by 13.9% to $27.6 million compared to $24.2 million in the prior year[3][14]. - Net revenue for the three months ended September 30, 2024, was $298,389,000, a 6.9% increase from $281,453,000 in the same period of 2023[23]. - Gross profit for the three months ended September 30, 2024, was $50,163,000, slightly down from $50,925,000 in the prior year, resulting in a gross margin of 16.8%[23]. - The company reported a net loss of $3,837,000 for the three months ended September 30, 2024, compared to a net income of $1,974,000 in the same period of 2023[23]. - Net loss for 2024 was $4,161 thousand, an improvement from a loss of $5,383 thousand in 2023, reflecting a change of $1,222 thousand[26]. - The net loss attributable to HF Foods Group Inc. for the nine months ended September 30, 2024, was $4,617 thousand, an improvement from a loss of $4,899 thousand in 2023, reflecting a change of $282 thousand[28]. Cash Flow and Assets - Cash used in operating activities was $3.3 million for the nine months ended September 30, 2024, compared to cash provided of $20.6 million in the prior year[15]. - Cash at the end of the period was $11,445,000, a decrease from $15,232,000 at the beginning of the period, reflecting a net cash used in operating activities of $3,299,000[24]. - Total current assets increased to $192,919,000 as of September 30, 2024, up from $178,827,000 at the end of 2023, primarily driven by higher accounts receivable and inventories[22]. - The company had a cash balance of $11.4 million and access to approximately $27.3 million in additional funds through its $100.0 million line of credit[15]. Liabilities and Debt Management - Total liabilities rose to $327,140,000 as of September 30, 2024, compared to $308,537,000 at the end of 2023, reflecting an increase in current liabilities[22]. - The current portion of long-term debt remained stable at $5,410,000, compared to $5,450,000 at the end of 2023, showing effective debt management[22]. - The company reported a decrease in accumulated deficit to $(313,305,000) as of September 30, 2024, from $(308,688,000) at the end of 2023, indicating ongoing financial challenges[22]. Adjusted Metrics and Expenses - Adjusted EBITDA for the three months ended September 30, 2024, was $8,305,000, down from $10,097,000 in the same period of 2023, indicating a decrease of 17.8%[25]. - Adjusted EBITDA increased to $27,568 thousand in 2024 from $24,203 thousand in 2023, showing a growth of $3,365 thousand[26]. - Non-GAAP net income attributable to HF Foods Group Inc. for the three months ended September 30, 2024, was $2,210 thousand, down from $5,114 thousand in 2023, a decrease of $2,904 thousand[27]. - Stock-based compensation expense decreased to $1,961 thousand in 2024 from $2,605 thousand in 2023, a reduction of $644 thousand[28]. - Change in fair value of interest rate swaps improved to $959 thousand in 2024 from a loss of $2,094 thousand in 2023, a positive change of $3,053 thousand[28]. - Business transformation costs for 2024 were $1,180 thousand, an increase from $402 thousand in 2023, reflecting a change of $778 thousand[28]. - Other non-routine expenses decreased to $584 thousand in 2024 from $1,850 thousand in 2023, a reduction of $1,266 thousand[28]. - Amortization of intangibles remained relatively stable at $12,210 thousand in 2024 compared to $12,213 thousand in 2023[28]. - SEC settlement recognized in 2024 amounted to $3,900 thousand, with no prior year comparison available[28].

Financial Performance - Net revenue for the three months ended June 30, 2024, was $302,342, an increase of $10,030 compared to $292,312 in 2023, representing a growth of approximately 3.4%[81] - Net income for the three months ended June 30, 2024, was $235, a significant improvement of $1,795 compared to a loss of $1,560 in 2023[81] - Adjusted EBITDA for the three months ended June 30, 2024, was $10,561, up by $2,204 from $8,357 in 2023, reflecting a growth of approximately 26.4%[81] - Net revenue for the six months ended June 30, 2024 increased by $11.8 million, or 2.0%, compared to the same period in 2023, driven by product cost inflation and improved pricing[104] - Gross profit for the six months ended June 30, 2024 was $102.9 million, an increase of $2.1 million, or 2.0%, with a gross profit margin remaining flat at 17.2%[105] - Net loss attributable to HF Foods Group Inc. was $0.7 million for the six months ended June 30, 2024, an improvement of $6.1 million compared to a net loss of $6.8 million for the same period in 2023[109] - For the six months ended June 30, 2024, the company reported an EBITDA of $20,313,000, a significant increase of 114.4% compared to $9,470,000 for the same period in 2023[111] - Adjusted EBITDA for the same period was $19,263,000, up 36.5% from $14,106,000 in the prior year[111] Operational Efficiency - 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[80] - The centralized purchasing program has already yielded positive results in margin expansion for seafood products, with plans to expand to other categories[80] - The company aims to enhance operational efficiency through the implementation of a modern ERP solution across all distribution centers[80] - Distribution, selling, and administrative expenses decreased by $2,403 to $49,840 for the three months ended June 30, 2024, compared to $52,243 in 2023[89] - Distribution, selling and administrative expenses for the six months ended June 30, 2024 decreased to $100.3 million from $105.2 million, with expenses as a percentage of net revenue decreasing to 16.8%[106] Revenue and Cost Analysis - The cost of revenue increased by $8,231 to $249,877 for the three months ended June 30, 2024, compared to $241,646 in 2023[89] - Gross profit for the three months ended June 30, 2024 was $52.5 million, an increase of $1.8 million, or 3.6%, with a gross profit margin of 17.4%[94] - Distribution, selling and administrative expenses decreased by $2.4 million, or 4.6%, for the three months ended June 30, 2024, resulting in a decrease in expenses as a percentage of net revenue to 16.5%[95] Debt and Financial Obligations - Interest expense for the three months ended June 30, 2024 was $3.1 million, consistent with the previous year, while average daily line of credit balance increased by $19.2 million, or 51.7%[96] - Income tax expense for the three months ended June 30, 2024 was $1.6 million, compared to $0.2 million for the same period in 2023, primarily due to discrete tax items[97] - As of June 30, 2024, the company's floating rate debt was $68.6 million, representing 38.5% of total debt[124] - A 1% change in the applicable rate would result in an approximate $0.7 million change in annual interest expense on floating rate debt[124] Cash Flow and Investments - The net cash used in operating activities was $(17,000) for the six months ended June 30, 2024, a decrease of $8,749,000 compared to $8,732,000 provided in the same period in 2023[116] - The company had cash of approximately $14.0 million and access to an additional $29.9 million through a $100.0 million line of credit as of June 30, 2024[112] - Net cash used in investing activities increased by $4.8 million primarily due to increased capital project spending in the six months ended June 30, 2024[118] Market and Strategic Focus - The company acquired two frozen seafood suppliers in 2022, expanding its distribution network across multiple states including Illinois, Texas, and along the eastern seaboard[78] - The company is focused on serving the increasing demand for Asian American restaurant cuisine, leveraging its nationwide distribution network and strong supplier relationships[79] Regulatory and Risk Management - The company incurred a civil monetary penalty of $3.9 million as part of an SEC settlement, which was paid during the three months ended June 30, 2024[114] - Average diesel fuel prices decreased by 1.6% in the second quarter of 2024 compared to the same period in 2023, although future prices remain unpredictable[125] - The company does not actively hedge diesel fuel price fluctuations but seeks to minimize risks through delivery route optimization and fleet utilization improvements[126]

HF Foods Group Inc. (HFFG) reported breakeven earnings per share in the second quarter of 2024 against the year-ago period's loss of 2 cents. Revenues in Detail HF Foods registered revenues of $302.3 million in the second quarter, up 3.4% year over year. Per management, the uptick primarily resulted from product cost inflation, volume increases and improved pricing in certain categories, such as chicken and seafood. However, this was partially offset by deflation in commodities, such as cooking oils, and th ...

Core Viewpoint - HF Foods Group Inc. has appointed Maria Ross to its board of directors, replacing Dr. Hong Wang, which maintains the board's composition of four independent directors and the CEO, Peter Zhang [1][2]. Company Overview - HF Foods Group Inc. is a prominent food distributor catering primarily to Asian restaurants across the United States, providing fresh produce, frozen and dry food, and non-food products [4]. - The company aims to meet the growing demand for Asian American cuisine by leveraging its extensive distribution network and strong relationships with growers and suppliers in the US, South America, and China [4]. New Board Member Profile - Maria Ross brings over 30 years of experience in supply chain management, having held significant roles in companies such as Nike, The Fresh Market, BJ's Wholesale Club, Oldcastle, Inc., and The Home Depot [3]. - Her expertise in supply chain and logistics is expected to be a valuable asset to the company [4].