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HF Foods (HFFG) - 2024 Q1 - Earnings Call Transcript
HFFGHF Foods (HFFG)2024-05-10 17:16
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Financial Data and Key Metrics Changes - Net revenue for the first quarter increased 0.6% to 295.7million,comparedto295.7 million, compared to 293.9 million in the prior year quarter, driven by product cost inflation and improved pricing, partially offset by a 2.7millionlossfromexitingchickenprocessingbusinesses[25]−AdjustedEBITDAincreasedapproximately51.42.7 million loss from exiting chicken processing businesses [25] - Adjusted EBITDA increased approximately 51.4% to 8.7 million for the first quarter, compared to 5.7millionfortheprioryearquarter,primarilyduetolowerdistribution,selling,andadministrativeexpenses[4]−Netlossimprovedto5.7 million for the prior year quarter, primarily due to lower distribution, selling, and administrative expenses [4] - Net loss improved to 0.6 million for the first quarter, compared to a net loss of 5.8millionfortheprioryearquarter,drivenbylowerdistribution,selling,andadministrativecosts,andhighergrossprofit[17]BusinessLineDataandKeyMetricsChanges−Grossprofitincreasedby0.55.8 million for the prior year quarter, driven by lower distribution, selling, and administrative costs, and higher gross profit [17] Business Line Data and Key Metrics Changes - Gross profit increased by 0.5% to 50.4 million for the quarter, compared to 50.2millionintheprioryearquarter,withgrossprofitmarginsapproximatelyflatat17.150.2 million in the prior year quarter, with gross profit margins approximately flat at 17.1%, driven by improvements in the Seafood category due to a centralized purchasing plan [15] - Distribution, selling, and administrative expenses decreased approximately 4.6% to 50.5 million for the first quarter from 52.9millionforthefirstquarterof2023,withexpensesasapercentageofnetrevenuedecreasingto17.152.9 million for the first quarter of 2023, with expenses as a percentage of net revenue decreasing to 17.1% from 18% [26] Market Data and Key Metrics Changes - The company has completed a network and facility optimization study for its distribution network and has moved into phase one of facility upgrades, including two new state-of-the-art facilities in the Southeast region [6] Company Strategy and Development Direction - The company is focused on executing a comprehensive transformation plan aimed at enhancing operational efficiencies to deliver sustainable long-term growth, having established itself as an enterprise generating over 1.1 billion in annual net revenue [7] - The company is actively exploring M&A opportunities for geographic expansion, focusing on targets that will allow for meaningful synergies [20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the solid groundwork made on the transformation plan, indicating that all key focus areas are on track for significant growth or cost reduction for years to come [30] - The company is excited about its digital transformation, with a modern ERP solution implementation expected to be completed by the end of 2024, enhancing operational efficiency and adaptability [19] Other Important Information - The company launched a national fuel savings program in March 2024 to maximize efficiency and reduce fuel costs, with plans to replace roughly 25% of its existing fleet by the end of 2024 [29] - At the end of the first quarter, the company had available capacity of $40.9 million in additional funds through its line of credit, indicating a strong liquidity position [28] Q&A Session Summary - No specific questions and answers were provided in the content, thus this section is not applicable.