LAS VEGAS, May 16, 2022 (GLOBE NEWSWIRE) — HF Foods Group Inc. (HFFG), a leading food distributor to Asian restaurants across the United States (“HF Foods”, “HF Group” or the “Company”) , released unaudited first quarter financial results for the three months ended March 31, 2022.
The Company is unable to file its unaudited financial results on Form 10-Q due to unresolved comments contained in a comment letter from the Securities Exchange Commission (“SEC”) relating to the Company’s merger with B&R Global which was consummated on November 4, 2019. The Company intends to file Form 10-Q as soon as possible. Consequently, the Company’s financial results are not yet available. This press release contains certain unaudited financial information relating to the first quarter financial results for the three months ended March 31, 2022, and such information could potentially change depending on the outcome of the SEC’s comment letter.
First Quarter 2022 Financial Summary
- Net revenue increased 75% to $278.2 million from $159.4 million in the prior year quarter.
- Gross profit increased 74% to $51.3 million, or 18.4% of total revenue, from $29.4 million, or 18.5% of total revenue in the quarter of the previous year.
“HF Foods delivered record first quarter results, highlighted by a 75% year-over-year increase in revenue, as overall foot traffic to our customers’ restaurants recovered significantly to exceed pre-pandemic levels,” said Peter Zhang, CEO. of HF Foods. “We have continued our integration of the Great Wall Group, aligning management and operations with our national distribution network. I am very pleased with the progress we have made with the Great Wall Group and would like to thank all of our associates for their dedication and commitment to our success.
“Our recent acquisition of Sealand Food brings our extensive distribution network to 46 states covering well over 90% of the contiguous United States. With the completion of the acquisition, we now serve approximately 15,000 restaurants. We will continue to build on our market leadership position to deliver long-term shareholder value through organic growth and accretive acquisitions.
First quarter 2022 results
Net revenue was $278.2 million for the first quarter of 2022, compared to $159.4 million in the prior year, an increase of $118.8 million, or 75%. This increase is mainly attributable to the strong recovery in demand from restaurants following the COVID-19 pandemic, additional revenue generated by the acquisition of Great Wall and food price inflation.
Gross profit was $51.3 million for the first quarter of 2022, compared to $29.4 million a year earlier, an increase of $21.9 million, or 74%. The increase is primarily due to net revenue growth and our ability to maintain margin position despite an inflationary environment in the first quarter of 2022.
As of March 31, 2022, the Company had access to approximately $31.6 million of additional funds available through our $100.0 million line of credit. On March 31, 2022, the Company amended the credit agreement with JP Morgan extending our line of credit for 5 years. The amendment provides for a revolving credit facility secured by assets of $100.0 million with a SOFR of one month plus a credit adjustment of 0.1% plus 1.375% per annum.
About HF Foods Group Inc.
HF Foods Group Inc., headquartered in Las Vegas, Nevada, is a leading marketer and marketer of fresh, frozen and dry food and non-food items primarily to Asian/Chinese restaurants and other customers restaurants across the United States. With 17 distribution centers strategically located across the country, HF Foods aims to meet the growing demand for Asian American restaurant cuisine. With an internal order and inventory control network, more than 15,000 established customers in 46 states, and strong relationships with food producers and suppliers in the United States, South America, and China, HF Foods Group is able to offer fresh and superior quality products. -Quality specialty restaurant food and supplies at economical prices for its large and growing clientele. For more information, visit www.hffoodsgroup.com.
All statements in this press release other than statements of historical fact are forward-looking statements that contain our current expectations regarding our future results. We have attempted to identify any forward-looking statements by using words such as “anticipates”, “believes”, “could”, “continues”, “estimates”, “expects”, “intends”, “may”, “should” and other similar expressions. Although we believe that the expectations reflected in all of our forward-looking statements are reasonable, we cannot guarantee that these expectations will prove to be correct. These statements are not guarantees of future performance or events and are subject to known and unknown risks and uncertainties that could cause the actual results, events or financial positions of the HF Group to differ materially from those included or understated. referred to in these forward-looking statements. These factors include, but are not limited to, the effects of the COVID-19 pandemic or other pandemics, the outcome of the SEC’s comment letter, low margins in the foodservice distribution industry and periods of significant or prolonged inflation, shortages of skilled labor, adverse macroeconomic conditions in the United States, competition in the foodservice distribution industry, particularly the entry of new competitors into Chinese/Asian foodservice niche, increased fuel or raw material costs, disruption of supplier relationships and increased product prices, United States government tariffs on products imported into the United States, in particular from China, changes in consumer eating and dining habits, related party transactions and potential conflicts of interest. interests, consolidation of related parties and variable interest entities, disruption of relationships with or loss of customers, our ability to execute our acquisition strategy, availability of financing to execute our acquisition strategy, the inability to retain our senior management and other key personnel, our ability to attract, train and retain employees, changes and enforcement of immigration laws, failure to comply with various federal rules and regulations , state and local regarding food safety, sanitation, transportation, minimum wage, overtime and other health and safety laws, product recalls, voluntary recalls or withdrawals if any of the products we distribute is suspected of causing illness, being misbranded, mislabeled or tampered with or otherwise violating applicable government regulations entations, extreme weather conditions, natural disasters and adverse climate change, adverse geopolitical conditions, failure to protect our intellectual property rights, any cybersecurity incident, other technological disruption or delay in the implementation of our information technology systems , statements of assumptions underlying all of the above, and other factors disclosed under “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 and other documents filed with the SEC. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date made. Except as required by law, we assume no obligation to disclose any revisions to these forward-looking statements.
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