On May 8, 2024, HF Foods Group Inc (HFFG, Financial), a prominent distributor to Asian restaurants across the United States, announced its financial results for the first quarter ended March 31, 2024. The company disclosed these figures in its 8-K filing, highlighting a record net revenue for a first quarter at $295.7 million, a slight increase from the previous year's $293.9 million.
Company Overview
HF Foods Group Inc is integral to the supply chain of Asian-American cuisine, providing a vast array of products ranging from fresh produce to specialized restaurant supplies. Operating across the U.S., HF Foods caters predominantly to Asian restaurants, utilizing its extensive distribution network and strong supplier relationships in the U.S., South America, and China.
Financial Performance Insights
The first quarter of 2024 saw HF Foods achieve a marginal revenue growth of 0.6%, primarily driven by product cost inflation and strategic pricing adjustments, despite a $2.7 million revenue dip from exiting the chicken processing business last year. Gross profit saw a modest increase to $50.4 million, maintaining a gross margin of 17.1%. Notably, the company significantly reduced its net loss to $0.6 million from a previous $5.8 million, reflecting effective cost management and operational improvements.
Distribution, selling, and administrative expenses were reduced by $2.4 million, contributing to the improved bottom line. Adjusted EBITDA also saw a remarkable increase of 51.4% to $8.7 million, underscoring the efficiency gains from the company's ongoing operational transformation initiatives.
Operational and Strategic Developments
CEO Peter Zhang commented on the quarter's achievements, stating:
“We are pleased to report record first quarter revenue, showing progress in our core operations as we achieved growth despite exiting our chicken processing businesses in 2023. We continue to make progress on all key areas of our operational transformation plan, including centralized purchasing which will allow us to maximize synergies from our acquisitions, fleet and transportation improvements to enhance efficiency and reduce fuel costs, digital transformation which will improve our operations and strengthen our ability to adapt quickly to market dynamics, and facility upgrades to allow our distribution centers to serve as full broadline facilities that supply the products that are strongest in demand in a given area.”
Liquidity and Cash Flow
The company reported a decrease in cash flow from operations to $7.1 million, down from $12.6 million in the previous year, mainly due to timing differences in working capital adjustments. As of March 31, 2024, HF Foods held $18.2 million in cash and had access to approximately $40.9 million in additional funds through a $100 million line of credit.
Looking Forward
HF Foods remains committed to its strategic goals and operational improvements, aiming to enhance its service offerings and operational efficiency further. The company's focus on digital transformation and centralized purchasing is expected to continue driving growth and profitability in the competitive food distribution industry.
For more detailed information and to listen to the earnings call, investors and interested parties can visit the Investor Relations section of HF Foods' website.
Explore the complete 8-K earnings release (here) from HF Foods Group Inc for further details.
