Barfresh(US:BRFH)2019-08-15 02:16Financial Data and Key Metrics Changes - The company generated net sales of $1.4 million in Q2 2019, a 27% increase compared to $1.1 million in Q2 2018 [8][15] - Gross margins improved to 62% in Q2 2019 from 50% in the same period last year, with expectations of around 58% for the second half of 2019 [8][15] - Adjusted EBITDA improved by $808,000 in Q2 2019, with a loss of $705,000 compared to a loss of $1.5 million in the previous year [9][19] - Cash burn reduced significantly from $625,000 per month in Q1 to $160,000 per month in Q2 [9][19] Business Line Data and Key Metrics Changes - The company expanded its school contracted locations to over 400 and military dining facilities to over 150, up from 200 and 45 respectively in the previous year [9][10] - New restaurant chains were signed for a total of 119 dining locations across the U.S., Canada, and Puerto Rico, with potential for further expansion [11][12] Market Data and Key Metrics Changes - The company is in the early stages of penetrating the school and military channels, with significant room for growth given the large number of schools and military bases in the U.S. [10][25] - The military channel has higher revenue potential due to high traffic and year-round sales [25] Company Strategy and Development Direction - The company is focused on execution and improving revenue and efficiencies per location, including personnel training and menu planning [10] - There is a strong emphasis on international expansion, with initial steps taken in Puerto Rico and plans for further growth in the Asia Pacific region [26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the cash position and expected continued improvement in sales and margins [31][50] - The company anticipates a significant increase in school locations and overall sales in the second half of the year [44][45] Other Important Information - The company announced the resignation of CFO Joe Tesoriero, who will continue to support the company in a consulting role [13] - The company has implemented cost reduction measures, resulting in a 20% reduction in general and administrative expenses [16] Q&A Session Summary Question: When does the company expect to raise more capital? - Management indicated that they do not expect to need to raise more money due to significant reductions in cash burn and improving metrics [31] Question: Are there any updates on national accounts? - Management acknowledged the lengthy process but emphasized ongoing testing and progress with major accounts, expecting rollouts soon [32][33] Question: What is the status of partnerships with large distributors? - Management confirmed that all partnerships are still active and they are working to improve performance and collaboration [52][54] Question: What are the expectations for the education and military installations? - Management expects a significant jump in new installations in the education sector as the school year resumes, with over 100 new installations already queued [44][45]