Barfresh Food Group (BRFH) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue was $1.46M, down 3% year-over-year, but up 6% excluding prior-year adjustments, driven by carton packaging and bulk sales improvements.

• Gross margin improved to 34.8% from 31.4% year-over-year, supported by favorable product mix, pricing, and supply chain improvements.

• Net loss widened to $1.01M from $742K in Q2 2023, mainly due to increased G&A and stock-based compensation, and the non-recurrence of tax credits.

• Q3 2024 revenue and orders already exceed $2.2M, up 40% year-over-year, positioning for record quarterly and annual revenue and positive adjusted EBITDA.

• Expanded product line and co-manufacturing capacity by 400% to over 120M units annually, launched new 100% juice freeze pops, and broadened sales reach to over 95% of the U.S.

Financial highlights

• Q2 2024 revenue: $1.46M (down 3% year-over-year); H1 2024 revenue: $4.29M (up 19% year-over-year).

• Gross margin: 34.8% in Q2 2024 vs. 31.4% in Q2 2023; H1 2024 gross margin: 39.1% vs. 36.9% in H1 2023.

• Net loss: $1.01M in Q2 2024 vs. $742K in Q2 2023; adjusted EBITDA loss: $682K vs. $617K.

• Selling, marketing, and distribution expenses: $583K (40% of revenue) in Q2 2024, down from $625K (41%) in Q2 2023; G&A expenses: $871K in Q2 2024 vs. $493K in Q2 2023.

• Cash at June 30, 2024: $383K; inventory: $1.5M; working capital: $1.19M.

Outlook and guidance

• Expects record quarterly and annual revenue, positive adjusted EBITDA in Q3 and H2 2024, and margin improvements.

• Anticipates gross profit margins in the high 30s for 2024 and continued strong, profitable growth beyond 2024.

• Expanded manufacturing capacity and new contracts expected to ease supply constraints and seasonality in cash flow.