Core Viewpoint - HF Foods Group Inc. has resolved a formal investigation by the SEC regarding allegations of securities law violations by the company and its former executives, allowing the company to focus on future business expansion and ethical operations [1][4]. Group 1: SEC Investigation and Settlement - The SEC's investigation concluded with the acceptance of the company's Offer of Settlement, which was influenced by the company's prompt remedial actions and cooperation during the investigation [2]. - The SEC filed charges against two former executives on June 3, 2024, leading to their agreement to pay civil fines and disgorgement, as well as being subject to officer and director bars [2]. - The company neither admitted nor denied the SEC's findings but consented to an administrative civil cease-and-desist order regarding violations of multiple sections of the Securities Act and Securities Exchange Act, resulting from misleading disclosures and fraudulent conduct by former executives [3]. Group 2: Financial Implications - As part of the settlement, the company agreed to pay a civil monetary penalty of $3.9 million [3]. Group 3: Company Overview - HF Foods Group Inc. is a leading distributor of food products to Asian restaurants in the U.S., focusing on fresh produce, frozen and dry food, and non-food products [6]. - The company aims to meet the growing demand for Asian American cuisine by leveraging its distribution network and relationships with suppliers in the U.S., South America, and China [6].

Peter Zhang, Chief Executive Officer of HF Foods, said: "HF Foods is pleased to put this matter relating to the conduct of the Company's former executives behind us. We are now focused on expanding the business and operating the Company in a manner that is ethical and consistent with the principles and values that are so important to the Company's future success." Investor Relations Contact: HF Foods Group Inc. is a leading marketer and distributor of fresh produce, frozen and dry food, and non-food product ...

Zacks Investment Research has recently initiated coverage of HF Foods Group Inc. (HFFG) , assigning an "Outperform" recommendation to the company's shares. This bullish stance reflects the company's strategic transformation and robust positioning within the burgeoning Chinese takeout market in North America. HF Foods Group, headquartered in Las Vegas, NV, has carved a niche in the foodservice distribution for Asian restaurants across the United States. With a significant footprint that includes 18 distribut ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark one) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2024 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______________________ to _______________________. Commission File Number: 001-38180 __________________________________________________________________________ ...

Financial Data and Key Metrics Changes - Net revenue for the first quarter increased 0.6% to $295.7 million, compared to $293.9 million in the prior year quarter, driven by product cost inflation and improved pricing, partially offset by a $2.7 million loss from exiting chicken processing businesses [25] - Adjusted EBITDA increased approximately 51.4% to $8.7 million for the first quarter, compared to $5.7 million for the prior year quarter, primarily due to lower distribution, selling, and administrative expenses [4] - Net loss improved to $0.6 million for the first quarter, compared to a net loss of $5.8 million for the prior year quarter, driven by lower distribution, selling, and administrative costs, and higher gross profit [17] Business Line Data and Key Metrics Changes - Gross profit increased by 0.5% to $50.4 million for the quarter, compared to $50.2 million in the prior year quarter, with gross profit margins approximately flat at 17.1%, driven by improvements in the Seafood category due to a centralized purchasing plan [15] - Distribution, selling, and administrative expenses decreased approximately 4.6% to $50.5 million for the first quarter from $52.9 million for the first quarter of 2023, with expenses as a percentage of net revenue decreasing to 17.1% from 18% [26] Market Data and Key Metrics Changes - The company has completed a network and facility optimization study for its distribution network and has moved into phase one of facility upgrades, including two new state-of-the-art facilities in the Southeast region [6] Company Strategy and Development Direction - The company is focused on executing a comprehensive transformation plan aimed at enhancing operational efficiencies to deliver sustainable long-term growth, having established itself as an enterprise generating over $1.1 billion in annual net revenue [7] - The company is actively exploring M&A opportunities for geographic expansion, focusing on targets that will allow for meaningful synergies [20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the solid groundwork made on the transformation plan, indicating that all key focus areas are on track for significant growth or cost reduction for years to come [30] - The company is excited about its digital transformation, with a modern ERP solution implementation expected to be completed by the end of 2024, enhancing operational efficiency and adaptability [19] Other Important Information - The company launched a national fuel savings program in March 2024 to maximize efficiency and reduce fuel costs, with plans to replace roughly 25% of its existing fleet by the end of 2024 [29] - At the end of the first quarter, the company had available capacity of $40.9 million in additional funds through its line of credit, indicating a strong liquidity position [28] Q&A Session Summary - No specific questions and answers were provided in the content, thus this section is not applicable.

Financial Performance - Net revenue for Q1 2024 reached $295.7 million, a 0.6% increase from $293.9 million in the prior year[3] - Gross profit for Q1 2024 was $50.4 million, up 0.5% from $50.2 million in the prior year, with a gross profit margin remaining flat at 17.1%[4] - Net loss improved to $0.6 million in Q1 2024 compared to a net loss of $5.8 million in the prior year[6] - Adjusted EBITDA increased by 51.4% to $8.7 million in Q1 2024, up from $5.7 million in the prior year[7] - Net loss for Q1 2024 was $559,000, a significant improvement from a net loss of $5,797,000 in Q1 2023, representing a reduction of approximately 90.4%[24] - EBITDA for Q1 2024 increased to $8,770,000, compared to $1,534,000 in Q1 2023, reflecting a growth of 571.5%[24] - Adjusted EBITDA for Q1 2024 was $8,702,000, up from $5,749,000 in Q1 2023, indicating an increase of 51.3%[24] - Non-GAAP net income attributable to HF Foods Group Inc. for Q1 2024 was $2,328,000, a substantial rise from $41,000 in Q1 2023, marking an increase of 5,678.0%[26] Cash Flow and Liquidity - Cash flow from operating activities decreased to $7.1 million in Q1 2024, down from $12.6 million in the prior year[9] - As of March 31, 2024, the company had a cash balance of $18.2 million and access to approximately $40.9 million through its line of credit[9] - Cash provided by operating activities for Q1 2024 was $7,055,000, down from $12,570,000 in Q1 2023, a decrease of 43.8%[22] - Cash at the end of Q1 2024 was $18,215,000, compared to $17,477,000 at the end of Q1 2023, showing an increase of 4.2%[22] - The company reported a net cash used in financing activities of $1,487,000 in Q1 2024, a significant improvement from $18,753,000 in Q1 2023, reflecting a decrease of 92.1%[22] Expenses and Cost Management - Distribution, selling and administrative expenses decreased by $2.4 million to $50.5 million, with expenses as a percentage of net revenue decreasing to 17.1% from 18.0%[5] - The company incurred business transformation costs of $973,000 in Q1 2024, compared to $44,000 in Q1 2023, reflecting a significant increase in strategic project investments[24] - Interest expense for Q1 2024 was $2,834,000, slightly down from $2,868,000 in Q1 2023, a decrease of 1.2%[24] Operational Strategy - The company continues to focus on operational transformation, including centralized purchasing and digital transformation to enhance efficiency[2] - The exit from chicken processing businesses resulted in a $2.7 million loss in revenue, impacting overall growth[3] - The company aims to leverage its distribution network to meet the increasing demand for Asian American restaurant cuisine[11] Other Financial Metrics - The change in fair value of interest rate swaps resulted in a loss of $1,970,000 in Q1 2024, compared to a gain of $2,746,000 in Q1 2023, indicating a negative swing of $4,716,000[24]

Financial Performance - Net revenue for 2023 was $1,148.5 million, a decrease of $22.0 million or 1.9% compared to 2022, primarily due to deflationary pricing in frozen seafood and poultry [193]. - Gross profit for 2023 was $204.0 million, down $1.5 million or 0.7% from 2022, with a gross profit margin of 17.8%, an increase from 17.6% in the prior year [193][199]. - Net loss attributable to HF Foods Group Inc. was $2.2 million in 2023, compared to net income of $0.5 million in 2022, a decrease of $2.6 million [196][203]. - For the year ended December 31, 2023, the company reported an Adjusted EBITDA of $44.6 million, a 11.1% increase from $40.1 million in 2022, reflecting a change of $4.5 million [204]. Expenses and Costs - Distribution, selling and administrative expenses were $195.1 million in 2023, consistent with 2022, but as a percentage of net revenue, they increased to 17.0% from 16.7% [193][200]. - Interest expense rose by $4.0 million or 53.9% in 2023, primarily due to a higher interest-rate environment [201]. - Legal settlements received in 2023 totaled $10.0 million, which partially offset increases in payroll and insurance costs [193][200]. - The company recognized an impairment expense of $1.2 million for machinery used in operations during the year ended December 31, 2023 [231]. - An additional impairment expense of $0.4 million was recognized for acquired developed technology attributable to Syncglobal, Inc. in the year ended December 31, 2022 [231]. Cash Flow and Financing - The net cash provided by operating activities decreased by $15.5 million, or 49%, to $15.8 million for the year ended December 31, 2023, primarily due to the timing of working capital outlays [214]. - The net cash used in financing activities was $23.3 million for the year ended December 31, 2023, a decrease of $52.3 million compared to the previous year [216]. - As of December 31, 2023, the company had cash of approximately $15.2 million and access to an additional $37.6 million through a $100.0 million line of credit [206]. - Management believes that cash flow generated from operations is sufficient to meet normal working capital needs for at least the next twelve months [207]. Investments and Acquisitions - The company exited its low-margin chicken processing businesses in the second half of 2023 to refocus on its core business [196]. - The Sealand Acquisition contributed to increased seafood revenue, providing a full year of revenue in 2023 compared to a partial year in 2022 [198]. - The net cash used in investing activities significantly decreased by $49.3 million, or 97%, primarily due to reduced acquisition payments compared to 2022 [215]. Debt and Interest Rate Management - The company is party to an interest rate swap contract with a notional amount of $120.0 million, expiring in March 2028, to hedge floating rate loan exposure [208]. - As of December 31, 2023, the company's aggregate floating rate debt's outstanding principal balance was $60.8 million, representing 35.2% of total debt [234]. - A hypothetical 1% change in the applicable rate would result in an approximate $0.6 million change in annual interest expense on floating rate debt [234]. Operational Efficiency - The company operates 18 distribution centers covering approximately 95% of the contiguous United States, serving around 15,000 Asian restaurants [185]. - Average diesel fuel prices in 2023 decreased by 15.5% compared to 2022, positively impacting the company's cost structure [235]. - The company does not actively hedge diesel fuel price fluctuations but minimizes risk through delivery route optimization and fleet utilization improvement [236].

Financial Data and Key Metrics Changes - Net revenue for Q4 2023 decreased 3.8% to $280.9 million from $291.9 million in Q4 2022, primarily due to deflationary pressures and the exit from chicken processing businesses [6] - Gross profit margin increased 20 basis points to 17.8% from 17.6% in the prior year [9] - Net income for Q4 2023 increased to $2.7 million compared to a net loss in the prior year [16] - Adjusted EBITDA for Q4 2023 increased approximately 376% to $20.5 million compared to $4.3 million in the prior year [30] - For the full year 2023, net revenue decreased 1.9% to $1.15 billion from $1.17 billion in 2022 [16] - Total interest expense for the full year increased to $11.5 million from $7.5 million in the prior year [17] Business Line Data and Key Metrics Changes - Gross profit for the full year decreased 0.7% to $204.0 million compared to $205.5 million in the prior year, driven by declines in Meat and Poultry and Packaging categories [31] - Distribution, selling, and administrative expenses decreased approximately 24.3% to $41.0 million for Q4 2023 from $54.1 million in Q4 2022 [15] - The Seafood category showed improvement due to successful execution of a centralized purchasing plan [28] Market Data and Key Metrics Changes - The revenue decrease for the full year was partially offset by higher volume and Seafood revenue generated from the Sealand acquisition [16] - The company has established itself as a preferred acquirer for many Asian food distributors, exploring M&A opportunities to expand into new markets [23] Company Strategy and Development Direction - The company is focused on an operational transformation plan to achieve growth targets and improve efficiency [33] - A partnership with a national 3PL provider was announced to enhance operational efficiency and establish a unified transportation system [20] - The company is converting certain distribution centers to full broadline facilities to capitalize on cross-selling opportunities [21] - Digital transformation efforts include implementing a modern ERP solution across all sites [35] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the current liquidity position with available capacity of $37.6 million through the line of credit [33] - The company is committed to executing its transformation plan diligently to achieve sustainable long-term growth and deliver value to shareholders [37] - Management believes the financial metrics will reflect the success of their transformation in upcoming quarters [38] Other Important Information - The company divested its two poultry processing businesses to refocus on core operations [37] - The operational transformation plan is expected to expand into centralized purchasing initiatives in 2024 [34] Q&A Session Summary - No specific questions or answers were provided in the content regarding the Q&A session [40]

Pre-Recorded Earnings Call Webcast Available on Investor Relations Website Exhibit 99.1 HF Foods Reports Fourth Quarter and Full Year 2023 Financial Results Company Continues to Execute Comprehensive, Operational Transformation Plan to Drive Growth and Cost Savings Net revenue was $280.9 million for the fourth quarter of 2023 compared to $291.9 million in the prior year period, a decrease of $11.0 million, or 3.8%. The decline was primarily attributable to deflationary pricing in certain key commodities, an ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark one) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______________________ to _______________________. Commission File Number: 001-38180 _______________________________________________________________________ ...