Barfresh(US:BRFH)2024-03-01 00:14Financial Data and Key Metrics Changes - The company generated its second-highest fiscal year revenue in 2023 with $8.1 million, despite a full year without its largest Twist & Go bottle manufacturer, which previously accounted for over 50% of purchases [19][37] - Gross margin for the full year of 2023 was 36%, compared to 16% for the same period in 2022, attributed to higher-margin carton sales and pricing actions [24] - Net loss for the fourth quarter of 2023 was $701,000, an improvement from a net loss of $1.9 million in the fourth quarter of 2022 [24][52] - Adjusted EBITDA loss for the fourth quarter of 2023 was approximately $427,000, nearly half of the loss in the same period of 2022 [53] Business Line Data and Key Metrics Changes - The company experienced a slight setback in production due to a national carton shortage that began in December and affected sales into early February [20][51] - Selling, marketing, and distribution expenses for the fourth quarter of 2023 were $624,000, nearly unchanged from $625,000 in the fourth quarter of 2022 [38] - The company expanded its product offerings with the relaunch of its 100% juice concentrates, which are USDA reimbursable and compliant for schools [21] Market Data and Key Metrics Changes - The company expects to have sales coverage across 49 out of 50 states by the end of the first quarter of 2024, enhancing its market presence [22] - The revenue for the fourth quarter of 2023 was $1.9 million, an increase from $1.4 million in the fourth quarter of 2022, driven by improved supply and increased capacity [51] Company Strategy and Development Direction - The company is focused on expanding both carton and bottle capacity, with engineering changes made to increase carton capacity to approximately 25 million to 30 million units per year [1] - The company plans to market its newly relaunched WHIRLZ 100% Juice Concentrates through sales brokers to the general food service market and education channel [22] - The company is also exploring options to expedite securing additional bottle capacity, expecting resolution before the new school year in August 2024 [2] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving record first-quarter revenue for 2024, having already achieved over $2 million in sales with a month remaining in the quarter [36] - The company believes there is significant growth potential in the education channel and is optimistic about future sales due to increased capacity and expanded sales networks [36][60] - Management noted that the carton supply issue has been fully resolved, allowing for a return to full production [56] Other Important Information - The company is in the final stages of signing with a new co-manufacturer to replace the loss of its largest one, which was unable to execute the contract due to internal issues [34] - The company is also working on a national agreement to provide coverage for all U.S. Military bases, which is expected to significantly boost sales [50] Q&A Session Summary Question: Impact of carton shortage on gross margins and future plans - Management indicated that the carton supply issue has been resolved and they are back to full production, although there may be some compression on margins in the first quarter due to higher SKU counts [55][56] Question: Update on bottle manufacturing capacity and other opportunities - Management confirmed they are exploring multiple options for bottle manufacturing and are confident in resolving capacity issues quickly, with several opportunities on the table [44][58] Question: Military channel and other opportunities outside of schools - Management highlighted ongoing efforts to establish a dedicated military channel team and emphasized the importance of high-volume accounts in recreation and amusement locations [45][50]