HF Foods Group Inc. Q1 FY2025 earnings call

• Net revenue increased 0.9% year-over-year despite one fewer day of operations, with adjusted EBITDA up 12.3% to $9.8 million.
• February was slow due to macro uncertainty but March was strong, and momentum carried into April.
• Completed implementation of a new ERP application across all locations on May 1st, enabling efficiency and data-driven decision-making.
• Launched new e-commerce platform at Utah, North Carolina and Florida DC's for foodservice customers and distributors.
• On track to complete renovations at Charlotte distribution center by end of Q2 2025, and making progress on Atlanta facility project.
• M&A remains a core pillar of growth strategy, focused on expanding geographic footprint and enhancing capabilities.

Net revenue for the first quarter increased 0.9% to $298.4 million from $295.7 million in the prior year quarter. Gross profit increased by 1.1% to $51.0 million for the quarter compared to $50.4 million in the same period in 2024, with a gross profit margin of 17.1% remaining consistent. Adjusted EBITDA increased to $9.8 million for the first quarter of 2025 compared to $8.7 million in the prior year quarter, reflecting a 12.3% increase. The increase in net revenue was primarily attributable to volume increases and improved pricing in commodity, meat and poultry, and seafood categories. Adjusted EBITDA growth was mainly due to the decrease in distribution, selling, and administrative expenses along with an increase in gross profit.

• 2025 is a year of strategic investment in facilities, digital infrastructure, and operations to establish a strong foundation for growth.
• Investments in digital transformation and infrastructure aim to drive organic growth through cross-selling and complement with targeted M&A.
• Focus on identifying and implementing additional efficiency measures while maintaining service excellence and sustainable growth.

• Industry faces macro headwinds including uncertainty from new tariff policies and related supply chain disruption.
• Persistent inflationary pressures and shifts in consumer spending behaviors pose challenges.