Release Date: May 15, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Record quarterly revenue achieved, marking the highest in the company's history.
- Positive adjusted EBITDA reported for the first time, reflecting improved financial health.
- Gross margin reached the highest level since early 2021 due to operational excellence and cost discipline.
- Significant expansion in the education channel with over 2,600 new school locations added.
- Strategic partnership with the largest regional sales broker in the southeast to enhance sales reach and customer acquisition.
Negative Points
- Continued industry-wide shortage of four ounce and eight-ounce cartons impacting supply.
- Net loss reported for the quarter, although improved from the previous year.
- Dependence on finding a new high-capacity bottle manufacturer to sustain growth and customer acquisition.
- Seasonal fluctuations affecting revenue, particularly in the foodservice segment.
- Operational challenges from past product withdrawals and manufacturing relocations still being addressed.
Q & A Highlights
Q: For all these new school districts that you added, are any of these lost customers you reengaged with or a lot of these new school districts that -- are there -- is there any more potential to bring back any other school districts you lost when you had those manufacturing issues?
A: Riccardo Delle Coste, CEO & Founder of Barfresh Food Group, explained that most of the new accounts are indeed new, but they hope to reengage some previous customers once a new bottle manufacturer is finalized. He emphasized the significant potential for growth as they approach the new school year with a new bottle manufacturer.
Q: Talking about the new bottle manufacturer, how much of your current capacity would be -- would you be able to use to service the contracts for next year and how much excess capacity would the new manufacturers need?
A: Riccardo Delle Coste noted that they are currently maxed out with their existing bottle manufacturer, which accounts for about 30% of their revenue. The new bottle manufacturer will provide significant additional capacity, allowing them to recapture some lost customers and expand further.
Q: Do you have any update on the military or entertainment channels?
A: Riccardo Delle Coste shared updates on the entertainment and military channels, highlighting the renewal of a five-year contract with the Statue of Liberty & Ellis Island. He mentioned that foodservice locations like amusement parks and museums are rebounding, and they are actively reintegrating into menu planning for these venues.
Q: What are the financial highlights from this quarter?
A: Lisa Roger, CFO of Barfresh Food Group, reported a 35% increase in revenue to $2.8 million for Q1 2024, up from $2.1 million in Q1 2023. The gross margin also improved slightly to 41.4%. Notably, the company achieved its first positive adjusted EBITDA of $53,000, marking a significant milestone towards profitability.
Q: Can you discuss the impact of the new sales broker agreement in the Southeast?
A: Riccardo Delle Coste highlighted the new agreement with the largest regional sales broker in the Southeast, which adds 82 new salespeople to their team. This partnership is set to enhance their sales reach significantly, particularly in the education and foodservice channels across the region.
Q: What are the company's expectations for the upcoming quarters?
A: Riccardo Delle Coste expressed confidence in achieving record revenues and margins in 2024. He anticipates that Q3 will be the highest revenue quarter in the company's history, driven by new partnerships, operational enhancements, and expanded distribution.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
