HF Foods Group (HFFG) investor relations material

Executive summary

• Net revenue rose 4.5% year-over-year to $312 million, driven by higher volume and improved pricing in seafood and commodity categories.

• Net income turned positive at $1.2 million, reversing a prior year net loss, aided by a property sale gain and favorable interest rate swap changes.

• Adjusted EBITDA increased 3.8% year-over-year to $10.1 million, reflecting operational improvements and cost controls.

• Transformation initiatives included digital infrastructure, centralized purchasing, sales operations, and facility upgrades in Chicago and Charlotte.

Financial highlights

• Gross profit decreased 0.8% to $50.5 million, with gross margin down to 16.2% from 17.1% due to higher mix of lower-margin seafood and increased landed costs.

• Distribution, selling, and administrative expenses fell 0.6% to $49.5 million, with expense ratio improving to 15.9% of net revenue.

• Adjusted net income was $3.4 million, slightly down from $3.5 million year-over-year; adjusted EPS was $0.06.

• EPS improved to $0.02 from a loss per share of $0.03.

• Cash flow from operations more than doubled to $15.3 million from $6.9 million year-over-year.

Outlook and guidance

• Short-term pressure expected from increased cost of goods sold and outbound distribution costs due to rising fuel prices.

• Management expects continued benefits from transformation initiatives, including margin expansion and operational efficiencies.

• Long-term growth strategy remains intact, with continued capital investments and focus on M&A.

• Charlotte facility expected to be operational by late Q2 or early Q3 2026, supporting seafood distribution efficiency.

• Cash flow from operations anticipated to be sufficient for working capital needs over the next twelve months, though risks remain from market demand and economic conditions.