Core Viewpoint - HF Foods Group Inc. reported quarterly earnings of $0.11 per share, exceeding the Zacks Consensus Estimate of $0.09 per share, but down from $0.24 per share a year ago, indicating a 22.22% earnings surprise [1]. Financial Performance - The company posted revenues of $305.28 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 6.05% and up from $280.87 million year-over-year [2]. - Over the last four quarters, HF Foods Group has surpassed consensus EPS estimates only once and topped consensus revenue estimates two times [2]. Stock Performance - HF Foods Group shares have declined approximately 45.8% since the beginning of the year, compared to a decline of 4.8% for the S&P 500 [3]. - The current consensus EPS estimate for the upcoming quarter is $0.11 on revenues of $303.87 million, and for the current fiscal year, it is $0.43 on revenues of $1.22 billion [7]. Industry Outlook - The Zacks Industry Rank for Food - Miscellaneous is currently in the bottom 42% of over 250 Zacks industries, indicating potential challenges for stock performance [8]. - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact HF Foods Group's stock performance [5]. Future Expectations - The company's earnings outlook will be influenced by management's commentary on the earnings call and the trends in earnings estimate revisions [4][6]. - General Mills, a competitor in the same industry, is expected to report a year-over-year earnings decline of 18.8% in its upcoming results [9].

Revenue - Net revenue for Q4 2024 was $305.3 million, an increase of 8.7% from $280.9 million in the prior year period[3] - Full year 2024 net revenue increased 4.6% to $1,201.7 million compared to $1,148.5 million in the prior year[9] - Net revenue for Q4 2024 was $305.3 million, a 8.7% increase from $280.9 million in Q4 2023[26] Gross Profit - Gross profit for Q4 2024 was $52.2 million, a slight decrease of 0.2% from $52.3 million in the prior year[4] - Full year 2024 gross profit increased 0.6% to $205.2 million compared to $204.0 million in the prior year[10] - Gross profit for the year ended December 31, 2024, was $205.2 million, slightly up from $204.0 million in 2023[26] Net Loss - The company reported a net loss of $43.9 million for Q4 2024, primarily due to a goodwill impairment of $46.3 million[7] - Full year 2024 net loss was $48.1 million, compared to a net loss of $2.7 million in the prior year[12] - The company reported a net loss of $48.1 million for the year 2024, compared to a net loss of $2.7 million in 2023[29] - For the three months ended December 31, 2024, HF Foods Group Inc. reported a net loss of $43.894 million, a decrease of $46.619 million compared to a net income of $2.725 million in the same period of 2023[32] - For the year ended December 31, 2024, the net loss attributable to HF Foods Group Inc. was $48.511 million, a decline of $46.337 million from a loss of $2.174 million in 2023[32] Adjusted EBITDA - Adjusted EBITDA for Q4 2024 increased 39.4% to $14.5 million compared to $10.4 million in the prior year[8] - Full year 2024 adjusted EBITDA increased 21.6% to $42.0 million compared to $34.6 million in the prior year[13] - Adjusted EBITDA for the year ended December 31, 2024, was $42.0 million, an increase of 21.5% from $34.6 million in 2023[29] Expenses - Distribution, selling and administrative expenses for Q4 2024 increased to $48.0 million, representing 15.7% of net revenue[6] - Distribution, selling, and administrative expenses rose to $198.0 million for the year 2024, compared to $195.1 million in 2023[26] Cash Flow - Cash provided by operating activities was $22.6 million for the year ended December 31, 2024, compared to cash used in operating activities of $1.6 million in the prior year[14] - Cash at the end of the period was $14.5 million, down from $15.2 million at the end of 2023[28] Assets and Liabilities - Total assets decreased to $550.0 million in 2024 from $596.5 million in 2023[24] - Total liabilities remained relatively stable at $308.7 million in 2024, compared to $308.5 million in 2023[24] - The company experienced a significant increase in accounts receivable, rising to $54.3 million in 2024 from $47.8 million in 2023[24] Non-GAAP Measures - Non-GAAP net income for the same period was $6.062 million, an increase of 109.5% from $2.894 million in 2023[32] - Non-GAAP net income for the year was $13.968 million, up 38.9% from $10.057 million in 2023[32] - Non-GAAP diluted earnings per share for the year increased to $0.26, up $0.07 from $0.19 in 2023[32] Goodwill Impairment - Goodwill impairment charges amounted to $46.3 million in Q4 2024, with no such charges reported in Q4 2023[26] - Goodwill impairment charges amounted to $46.303 million for both the three months and year ended December 31, 2024[32] Other Costs - The company incurred $2.929 million in executive transition and organizational redesign costs during the year[32] - The company recorded a legal settlement recovery of approximately $10.0 million, which was accounted for as a recovery of previously recorded expenses[33] Tax Rate - The effective tax rate used for adjustments was 24.0% for both the fourth quarter and year-to-date periods of 2024 and 2023[33]

Core Insights - HF Foods Group Inc. reported a net revenue increase of 8.7% for Q4 2024 and 4.6% for the full year 2024, driven by volume growth and improved pricing strategies [5][11] - The company experienced a net loss of $43.9 million in Q4 2024, primarily due to a goodwill impairment charge of $46.3 million [8][9] - Adjusted EBITDA for Q4 2024 increased by 39.4% to $14.5 million, reflecting operational improvements despite the net loss [10][8] Financial Performance - Q4 2024 net revenue reached $305.3 million, up from $280.9 million in the prior year, marking an increase of $24.4 million [5][8] - Full year 2024 net revenue was $1,201.7 million, compared to $1,148.5 million in 2023, an increase of $53.2 million [11] - Gross profit for Q4 2024 was $52.2 million, slightly down from $52.3 million in the previous year, with a gross profit margin decrease to 17.1% from 18.6% [6][8] Operational Insights - The company is expanding into high-growth channels such as specialty grocery and e-commerce to diversify revenue streams [4] - Distribution, selling, and administrative expenses increased by $7.0 million in Q4 2024, primarily due to higher professional fees and labor costs [7] - Cash provided by operating activities for the year ended December 31, 2024, was $22.6 million, a significant improvement from cash used in the prior year [16] Strategic Developments - HF Foods amended its Credit Agreement, increasing its revolver capacity by $25 million to $125 million, enhancing financial flexibility [17][18] - The company aims to leverage favorable market trends and demographics to capitalize on the growing demand for Asian food [18] Market Position - HF Foods is positioned as a leading distributor of food products to Asian restaurants across the U.S., with a strong network of distribution centers [21] - The company recognizes ongoing pressures in key customer segments but remains optimistic about long-term industry fundamentals [4]

Company Overview - HF Foods Group Inc. is a leading marketer and distributor of fresh produce, frozen and dry food, and non-food products primarily to Asian restaurants and other foodservice customers across the United States [2] - The company aims to meet the increasing demand for Asian American restaurant cuisine by leveraging its nationwide distribution network and strong relationships with growers and suppliers in the US, South America, and Asia [2] - HF Foods is headquartered in Las Vegas, Nevada, and trades on Nasdaq under the symbol "HFFG" [2] Investor Engagement - The company will participate in the 37th Annual Roth Conference in Dana Point, CA, on March 17-18, 2025, where the executive management team will host a fireside chat and meetings with investors [3] - The fireside chat is scheduled to begin at 8:00 a.m. PT on March 18, 2025, and will be webcast live, with an archived replay available [3] - On March 19, 2025, the executive management team will participate virtually in the Sidoti Small-Cap Conference, hosting virtual meetings with investors throughout the day [3]

Core Viewpoint - HF Foods Group Inc. has amended its Credit Agreement to enhance financial flexibility, supporting its growth strategy and strategic transformation plan [1][2]. Group 1: Financial Agreement Details - The amended agreement increases HF Foods' aggregate revolving commitment by $25 million, bringing the total to $125 million [1]. - Wells Fargo has been added as an additional lender alongside JPMorgan Chase Bank and Comerica Bank [1][2]. Group 2: Company Overview - HF Foods is a leading distributor of food products to Asian restaurants across the United States, focusing on fresh produce, frozen and dry food, and non-food products [3]. - The company aims to meet the growing demand for Asian American cuisine by leveraging its distribution network and strong relationships with suppliers [3].

Company Overview - HF Foods Group Inc. is a leading marketer and distributor of fresh produce, frozen and dry food, and non-food products primarily to Asian restaurants and other foodservice customers across the United States [2] - The company aims to meet the increasing demand for Asian American restaurant cuisine by leveraging its nationwide distribution network and strong relationships with growers and suppliers of high-quality specialty food products from the US, South America, and Asia [2] - HF Foods is headquartered in Las Vegas, Nevada, and trades on Nasdaq under the symbol "HFFG" [2] Upcoming Events - HF Foods will participate virtually in the Oppenheimer Emerging Growth Conference on February 25, 2025 [1] - The executive management team will host one-on-one meetings with investors throughout the day [1]

Group 1 - HF Foods Group Inc. will participate in the 2025 ICR Conference in Orlando, FL, hosting meetings with investors on January 13-14, 2025 [1] - The company is a leading distributor of food products to Asian restaurants across the United States, focusing on fresh produce, frozen and dry food, and non-food products [2] - HF Foods aims to meet the growing demand for Asian American cuisine by leveraging its distribution network and strong relationships with growers and suppliers [2] Group 2 - HF Foods is headquartered in Las Vegas, Nevada, and trades on Nasdaq under the symbol HFFG [2] - The company has a nationwide network of distribution centers and sources high-quality specialty food products from the US, South America, and Asia [2]

Core Viewpoint - HF Foods Group Inc. has appointed Felix Lin as the permanent CEO effective January 1, 2025, as part of its strategic transformation plan [1][2][3] Leadership Changes - Felix Lin has been with HF Foods for five years and will transition from COO to CEO, with his previous responsibilities being distributed among the senior management team [2] - Jason White has been appointed as Senior Vice President, People and Technology, to lead the digital transformation and new ERP program [3] - Paul Guan will take on the role of Vice President, Distribution Center Operations, bringing over 20 years of industry experience [3] Strategic Transformation Plan - The strategic transformation plan is ongoing, focusing on enhancing service quality and expanding the company's market position as a leading provider of Asian cuisine [2][3] - The company aims to leverage its nationwide distribution network and strong supplier relationships to meet the growing demand for Asian American restaurant cuisine [4]

Financial Performance - Net revenue for the three months ended September 30, 2024, was $298,389, an increase of $16,936 compared to $281,453 for the same period in 2023, representing a growth of approximately 6%[103] - Adjusted EBITDA for the three months ended September 30, 2024, was $8,305, a decrease of $1,792 from $10,097 in the same period of 2023[103] - The net loss for the three months ended September 30, 2024, was $(3,837), compared to a net income of $1,974 for the same period in 2023, reflecting a decline of $5,811[111] - Gross profit for the three months ended September 30, 2024, was $50,163, a slight decrease of $762 from $50,925 in the same period of 2023[111] - Net revenue for the nine months ended September 30, 2024 increased by $28.8 million, or 3.3%, compared to the same period in 2023[124] - Gross profit for the nine months ended September 30, 2024 was $153.0 million, an increase of $1.3 million, or 0.8%, with a gross profit margin of 17.1%[125] - Net loss attributable to HF Foods Group Inc. was $4.6 million for the nine months ended September 30, 2024, compared to a net loss of $4.9 million for the same period in 2023[129] Expenses and Costs - Distribution, selling, and administrative expenses increased to $49,652 for the three months ended September 30, 2024, up from $48,841 in the same period of 2023, an increase of $811[111] - Distribution, selling and administrative expenses increased by $0.8 million, or 1.7%, for the three months ended September 30, 2024, with expenses as a percentage of net revenue decreasing to 16.6%[116] - Distribution, selling and administrative expenses decreased to $150.0 million for the nine months ended September 30, 2024, from $154.0 million in the prior year[126] - Interest expense for the nine months ended September 30, 2024 increased by $0.2 million, or 2.0%, primarily due to an increase in the average daily line of credit balance[127] Operational Initiatives - The company has initiated a comprehensive operational transformation plan focused on centralized purchasing, fleet and transportation improvements, digital transformation, and facility upgrades[102] - The company aims to expand its distribution network, having acquired two frozen seafood suppliers in 2022, enhancing its reach in multiple states including Illinois and Texas[100] - The company is implementing a modern ERP solution across all distribution centers to enhance operational efficiency and data-driven decision-making[102] - The centralized purchasing program has yielded positive results in margin expansion for seafood products, with plans to expand to other categories[102] Cash Flow and Liquidity - The net cash used in operating activities for the nine months ended September 30, 2024, was $(3,299,000), a decrease of $23,923,000 compared to $20,624,000 for the same period in 2023[138] - The company’s liquidity is influenced by economic conditions and competitive pricing in the foodservice distribution industry, which may affect future cash flow[136] - The company’s net cash provided by financing activities was $8,935,000 for the nine months ended September 30, 2024, a decrease of $37,000,000 compared to $(28,018,000) for the same period in 2023[141] Risks and Challenges - The company is focused on addressing risks such as low margins in the foodservice distribution industry and potential disruptions in global supply chains[98] - The company performed a quantitative goodwill impairment assessment as of September 30, 2024, concluding that the estimated fair value exceeded carrying value by approximately 1% or $5 million[144] - The company has floating rate debt of $69.1 million, representing 39% of total debt, with a potential $0.7 million change in interest expense per year for a 1% change in applicable rates[156] - The company has no off-balance sheet arrangements that are likely to have a material effect on its financial position as of September 30, 2024[137] Fuel Costs - In Q3 2024, average diesel fuel prices decreased by 14.6% compared to Q3 2023[157] - The company currently has adequate supplies of diesel fuel, but future availability and pricing remain unpredictable[157] - Diesel fuel price fluctuations are influenced by external factors such as geopolitical developments and supply and demand dynamics[157] - Increased diesel fuel costs could raise the company's cost of goods sold and operating expenses[157] - The company does not actively hedge against diesel fuel price fluctuations[158] - Fuel cost risk is minimized through delivery route optimization and fleet utilization improvements[158]

Financial Performance - Net revenue for Q3 2024 increased by 6.0% to $298.4 million compared to $281.5 million in the prior year[2]. - Gross profit for Q3 2024 decreased by 1.5% to $50.2 million, with a gross profit margin decline to 16.8% from 18.1% in the prior year[2][6]. - The company reported a net loss of $3.8 million in Q3 2024, compared to a net income of $2.0 million in the prior year[2][8]. - Adjusted EBITDA for Q3 2024 decreased by 17.7% to $8.3 million compared to $10.1 million in the prior year[2][9]. - For the nine months ended September 30, 2024, net revenue increased by 3.3% to $896.4 million compared to $867.6 million in the prior year[3][10]. - Gross profit for the nine months increased by 0.8% to $153.0 million, with a gross profit margin decrease to 17.1% from 17.5% in the prior year[3][11]. - The net loss for the nine months improved to $4.2 million from a loss of $5.4 million in the prior year[3][13]. - Adjusted EBITDA for the nine months increased by 13.9% to $27.6 million compared to $24.2 million in the prior year[3][14]. - Net revenue for the three months ended September 30, 2024, was $298,389,000, a 6.9% increase from $281,453,000 in the same period of 2023[23]. - Gross profit for the three months ended September 30, 2024, was $50,163,000, slightly down from $50,925,000 in the prior year, resulting in a gross margin of 16.8%[23]. - The company reported a net loss of $3,837,000 for the three months ended September 30, 2024, compared to a net income of $1,974,000 in the same period of 2023[23]. - Net loss for 2024 was $4,161 thousand, an improvement from a loss of $5,383 thousand in 2023, reflecting a change of $1,222 thousand[26]. - The net loss attributable to HF Foods Group Inc. for the nine months ended September 30, 2024, was $4,617 thousand, an improvement from a loss of $4,899 thousand in 2023, reflecting a change of $282 thousand[28]. Cash Flow and Assets - Cash used in operating activities was $3.3 million for the nine months ended September 30, 2024, compared to cash provided of $20.6 million in the prior year[15]. - Cash at the end of the period was $11,445,000, a decrease from $15,232,000 at the beginning of the period, reflecting a net cash used in operating activities of $3,299,000[24]. - Total current assets increased to $192,919,000 as of September 30, 2024, up from $178,827,000 at the end of 2023, primarily driven by higher accounts receivable and inventories[22]. - The company had a cash balance of $11.4 million and access to approximately $27.3 million in additional funds through its $100.0 million line of credit[15]. Liabilities and Debt Management - Total liabilities rose to $327,140,000 as of September 30, 2024, compared to $308,537,000 at the end of 2023, reflecting an increase in current liabilities[22]. - The current portion of long-term debt remained stable at $5,410,000, compared to $5,450,000 at the end of 2023, showing effective debt management[22]. - The company reported a decrease in accumulated deficit to $(313,305,000) as of September 30, 2024, from $(308,688,000) at the end of 2023, indicating ongoing financial challenges[22]. Adjusted Metrics and Expenses - Adjusted EBITDA for the three months ended September 30, 2024, was $8,305,000, down from $10,097,000 in the same period of 2023, indicating a decrease of 17.8%[25]. - Adjusted EBITDA increased to $27,568 thousand in 2024 from $24,203 thousand in 2023, showing a growth of $3,365 thousand[26]. - Non-GAAP net income attributable to HF Foods Group Inc. for the three months ended September 30, 2024, was $2,210 thousand, down from $5,114 thousand in 2023, a decrease of $2,904 thousand[27]. - Stock-based compensation expense decreased to $1,961 thousand in 2024 from $2,605 thousand in 2023, a reduction of $644 thousand[28]. - Change in fair value of interest rate swaps improved to $959 thousand in 2024 from a loss of $2,094 thousand in 2023, a positive change of $3,053 thousand[28]. - Business transformation costs for 2024 were $1,180 thousand, an increase from $402 thousand in 2023, reflecting a change of $778 thousand[28]. - Other non-routine expenses decreased to $584 thousand in 2024 from $1,850 thousand in 2023, a reduction of $1,266 thousand[28]. - Amortization of intangibles remained relatively stable at $12,210 thousand in 2024 compared to $12,213 thousand in 2023[28]. - SEC settlement recognized in 2024 amounted to $3,900 thousand, with no prior year comparison available[28].