HF Foods (HFFG)2024-05-08 12:06Financial 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]