Blue Star(US:BSFC)2020-08-12 17:35Revenue and Loss - Revenue for Q2 2020 decreased 62.0% to $2,865,103 compared to $7,532,474 in Q2 2019 due to COVID-19 impact and a reduction in average selling price [114]. - Net loss for Q2 2020 was $3,490,933, an increase from a net loss of $952,796 in Q2 2019, primarily due to a non-cash expense related to a forbearance fee [123]. - Revenue for the six months ended June 30, 2020 decreased 47.0% to $7,436,717 compared to $14,043,248 in the same period of 2019 [124]. - The company reported a net loss of $4,344,580 for the six months ended June 30, 2020, compared to a net loss of $2,192,093 for the same period in 2019, primarily due to a non-cash other expense of $2,655,292 [133]. Cost of Goods Sold - Cost of goods sold for Q2 2020 decreased to $2,882,541 from $6,421,144 in Q2 2019, reflecting the revenue decline [116]. - Cost of goods sold for the six months ended June 30, 2020 decreased to $7,030,939 from $12,022,058 in the same period of 2019 [125]. Operating Expenses - Commissions expense for Q2 2020 increased to $25,534 from $19,851 in Q2 2019, attributed to the acquisition of Coastal Pride [118]. - Salaries and wages expense decreased by $880,720, or 78.5%, in Q2 2020 compared to Q2 2019 due to reductions in stock-based compensation and strategic salary cuts [119]. - Other operating expenses decreased by 53.1% to $311,944 in Q2 2020 from $665,206 in Q2 2019, reflecting overhead reduction efforts [120]. - Salaries and wages expense decreased by $1,588,287, or 71.0%, for the six months ended June 30, 2020 compared to the same period in 2019 [129]. Other Expenses - Other expenses increased by $2,655,292 in Q2 2020 from $0 in Q2 2019, related to a one-time non-cash expense for a forbearance fee [121]. - Interest expense increased from $495,470 for the six months ended June 30, 2019 to $516,308 for the six months ended June 30, 2020, due to the average cost of borrowed funds rising from 9.48% to 10.40% [132]. Cash Flow and Financing - Cash provided by operating activities increased to $3,105,786 for the six months ended June 30, 2020, up from $1,309,740 for the same period in 2019, attributed to a reduction in inventory of $4,147,203 [145]. - The company had cash of $52,713 as of June 30, 2020, with $38,315 being restricted cash, and a working capital deficit of $4,116,466 [134]. - Cash utilized in financing activities was $3,225,404 for the six months ended June 30, 2020, compared to $1,460,874 for the same period in 2019, with a significant reduction in the revolving working capital line of credit [148]. - The company entered into a $14,000,000 revolving line of credit with ACF, which bears interest at a rate of 12.60% as of June 30, 2020 [137]. - The company issued an unsecured promissory note for $344,762 related to the CARES Act Payroll Protection Program, accruing interest at 1% per annum [143]. - The outstanding principal amount of the Kenar Note at June 30, 2020 was $872,500, with an interest rate of 18% per annum [141]. - Cash used for investing activities was $47,179 for the six months ended June 30, 2020, compared to $8,786 for the same period in 2019 [146]. COVID-19 Impact - The company is unable to estimate the full impact of the COVID-19 pandemic on its operations or financial condition in the next 12 months, but anticipates potential negative effects on financing and capital access [136].