Q1 2024 Hf Foods Group Inc Earnings Call Transcript
Key Points
- HF Foods Group Inc achieved its highest ever recorded net revenue during the first quarter of 2024.
- Gross profit increased by 0.5% to $50.4 million for the quarter compared to the prior year, with flat gross profit margins at 17.1%.
- Distribution, selling, and administrative expenses decreased by approximately 4.6%, contributing to a lower operating loss compared to the previous year.
- Net loss improved significantly to $0.6 million for the first quarter compared to a net loss of $5.8 million for the prior year quarter.
- Adjusted EBITDA increased by approximately 51.4% to $8.7 million for the first quarter, indicating strong operational efficiency.
- The company experienced a $2.7 million loss in revenue due to the exit from its chicken processing businesses.
- Despite the overall revenue growth, the increase was primarily driven by product cost inflation rather than volume growth.
- Operating income for the first quarter of 2024 was still a loss of $0.1 million, indicating ongoing challenges in achieving profitability.
- The improvement in net loss was partially offset by a $4.7 million change in the fair value of interest rate swaps, highlighting potential volatility in financial instruments.
- While distribution costs have decreased, the increase in headcount led to higher payroll and related labor costs, which could impact future profitability if not managed effectively.
Hello, everyone, and welcome to Adept Food Group First Quarter 2024 earnings conference call. Joining me on today's call are Peter Zeng, AGF Foods' Chief Executive Officer, and Felix Lynn, the Company's President and Chief Operating Officer. In a moment, we'll hear their prepared remarks. We are excited that Cindy, I joined HSAs as Chief Financial Officer on May first, and will be joining us for the next earnings call. By now, everyone should have access to the earnings release for the period ended March 31st, 2024, that went out Wednesday May eighth at approximately 8 A.M. Eastern time. The press release is accessible on the company's website at investors dot AGF foods group.com.
Before we begin, let me remind everyone that today's discussion contains forward-looking statements based on the environment as the company currently see that and as such does include risks and uncertainties, you refer to adjusted earnings release as well as the Company's most recent SEC filings, you see a discussion of factors that could cause the Company's actual results to differ materially as a result of these
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