Barfresh(US:BRFH)2019-04-02 01:02Financial Data and Key Metrics Changes - In 2018, net sales increased by 112% to over $4.2 million, with gross margin expanding by 6% to 51% [10][21] - General and administrative expenses were reduced by 18% or $1.7 million, from $9.5 million in 2017 to $7.8 million in 2018 [23] - The operating loss was reduced by 31% or $2.7 million for the full year 2018 [23] - Fourth quarter net sales were up 141% to over $900,000 compared to $376,000 in Q4 2017 [11][24] Business Line Data and Key Metrics Changes - The Education Channel expanded to over 350 school locations, with significant growth expected as the new school year approaches [15][33] - The Military Channel saw a 36% increase, expanding to 100 U.S. Armed Forces Dining Facilities [16][35] - The company received approval for a national rollout to a QSR chain with over 2,500 locations, marking a major milestone [18][28] Market Data and Key Metrics Changes - The company is actively expanding in the school and military markets, which are seen as significant growth opportunities [13][20] - The Education Channel represents a large potential market with 98,000 schools in the U.S. [14][33] - The Military Channel serves 1.3 million active troops across 940 bases in the U.S. [17] Company Strategy and Development Direction - The company aims to achieve profitability and cash flow positivity while expanding its sales channels [12][20] - There is a focus on diversifying revenue streams through national accounts, education, and military channels [37] - The company plans to introduce new flavors and products to meet consumer demand in the school segment [35][56] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about entering 2019 from a strong operational and financial position, with expectations for a material ramp in sales [12][20] - The company sees a clear path to profitability and is ready to capitalize on growth opportunities [39] - Management highlighted the importance of maintaining strong relationships with customers and ensuring efficient supply chain management [61] Other Important Information - The company raised $4.3 million through equity and warrant exercises, strengthening its balance sheet [19][25] - Inventory at year-end was $1.2 million, about 13% lower than the previous year [27] Q&A Session Summary Question: Focus on national accounts and rollout timing - Management confirmed that there are multiple national accounts in advanced testing phases, estimating between two to five significant accounts [42] Question: General and administrative expenses run rate - Management indicated that the reduced G&A expense of $1.35 million in Q4 is a good run rate going forward [47] Question: Revenue impact from new school and military accounts - Management acknowledged that while school locations have increased, revenue may have been affected by seasonal factors and prior inventory loading [64]