HF Foods (US:HFFG)2025-05-12 20:14Financial Performance - Net revenue for the three months ended March 31, 2025, increased by $2.8 million, or 0.9%, compared to the same period in 2024, primarily due to volume increases and improved pricing in Commodity, Meat & Poultry, and Seafood [120]. - Gross profit was $51.0 million for the three months ended March 31, 2025, compared to $50.4 million in the same period in 2024, an increase of $0.5 million, or 1.1% [121]. - Adjusted EBITDA for the three months ended March 31, 2025, was $9.8 million, compared to $8.7 million in the same period in 2024, reflecting an increase of $1.1 million [109]. - For the three months ended March 31, 2025, the company reported an Adjusted EBITDA of $9,773,000, an increase of 12.3% from $8,702,000 in the same period of 2024 [126]. - The gross profit margin for the three months ended March 31, 2025, remained consistent at 17.1% compared to the same period in 2024 [121]. - Net loss was $1.5 million for the three months ended March 31, 2025, compared to a net loss of $0.6 million for the same period in 2024, primarily driven by changes related to the fair value of interest rate swap contracts [125]. - The company recorded a net loss of $1,530,000 for the three months ended March 31, 2025, compared to a net loss of $559,000 in 2024 [126]. Expenses and Cash Flow - Distribution, selling, and administrative expenses decreased by $0.7 million, or 1.4%, to $49.8 million for the three months ended March 31, 2025, primarily due to a decrease in professional fees [122]. - Interest expense for the three months ended March 31, 2025, was $2.6 million, a slight decrease from $2.8 million for the same period in 2024 [123]. - Net cash provided by operating activities decreased by $4,276,000 to $6,948,000 for the three months ended March 31, 2025, compared to $11,224,000 in 2024 [133]. - The company believes its cash flow from operations is sufficient to meet normal working capital needs for at least the next twelve months [129]. Investments and Debt - The company’s net cash used in investing activities increased by $979,000 to $3,564,000 for the three months ended March 31, 2025, primarily due to increased capital project spending [135]. - As of March 31, 2025, the company had cash of approximately $16.1 million and access to an additional $60.0 million through a $125.0 million line of credit [128]. - The average daily line of credit balance increased by $4.0 million, or 9.0%, to $48.7 million for the three months ended March 31, 2025 [123]. - As of March 31, 2025, the company’s aggregate floating rate debt's outstanding principal balance was $60.8 million, representing 36.6% of total debt [147]. - The company has an amortizing interest rate swap contract with JPMorgan Chase for an initial notional amount of $120.0 million, expiring in March 2028, to hedge floating rate loans exposure [130]. Operational Changes - The company has initiated a comprehensive operational transformation plan focused on centralized purchasing, fleet and transportation improvements, digital transformation, and facility upgrades [107]. - The company acquired two frozen seafood suppliers in 2022, expanding its distribution network across several states [105]. Market Conditions - The average price of diesel fuel decreased by 8.7% in the first quarter of 2025 compared to the same period in 2024, although future prices remain unpredictable [148]. - The company recorded a goodwill impairment charge of $46.3 million during the fourth quarter of the year ended December 31, 2024, due to a decline in stock price [138].