Barfresh(US:BRFH)2023-04-29 20:09Financial Data and Key Metrics Changes - Revenue for Q1 2023 was $2.1 million, a 46% sequential increase from $1.4 million in Q4 2022, but a decline from $2.5 million in Q1 2022 due to the loss of the largest bottle manufacturer [3][23] - Gross margins improved to 41% in Q1 2023 from 30% in Q1 2022 and 36% in Q4 2022, attributed to product mix changes and pricing actions [5][21] - Adjusted EBITDA loss was approximately $544,000 in Q1 2023, slightly better than a loss of $546,000 in Q1 2022 and $833,000 in Q4 2022 [24] Business Line Data and Key Metrics Changes - The new smoothie carton format contributed to revenue growth, with increased orders noted since its rollout in Q4 2022 [23] - The company is working to replace lost bottle manufacturing capacity and is exploring partnerships to enhance production capabilities [4] Market Data and Key Metrics Changes - The company has expanded its national sales network by adding brokers specializing in the school market, which is expected to enhance customer acquisition in the education channel [34] Company Strategy and Development Direction - The company aims for record revenue in fiscal year 2023, driven by increased capacity and sales of the smoothie carton format [21][26] - There is a focus on securing a new bottle manufacturer to restore supply and expand the customer base [38][47] Management Comments on Operating Environment and Future Outlook - Management anticipates sequential improvements in adjusted EBITDA and gross margins throughout 2023, with expectations of softening raw material costs in the latter half of the year [6][12] - The company acknowledges challenges due to the loss of customers but is optimistic about regaining and surpassing previous customer levels with the new product formats [10][22] Other Important Information - G&A expenses increased to $994,000 in Q1 2023 from $823,000 in the same period last year, primarily due to personnel costs and stock-based compensation [24] - As of March 31, 2023, the company had approximately $1.8 million in cash and $1.1 million in inventory [37] Q&A Session Summary Question: Update on discussions with new potential bottle manufacturers - The company is close to finalizing a contract with a new bottle manufacturer and expects to have something solidified before the end of the year [40] Question: Impact of customer loss due to supply issues - Management indicated that many customers have replaced the product due to supply interruptions, but they are hopeful to regain some of these accounts in the future [41][28] Question: Expectations for margin improvement - Management confirmed expectations for continued margin improvement throughout the year, with gross margins expected to remain around the current level with slight improvements [42]