Second Quarter 2021 Financial Summary
- Net revenue increased 85.1% to
$193.5 million compared to$104.6 million in the second quarter of 2020. - Gross profit increased 70.5% to
$35.1 million , or 18.2% of net revenue, from$20.6 million , or 19.7% of net revenue, in the second quarter of 2020. - Net income attributable to the Company increased to
$3.6 million , or$0.07 per diluted share, compared to a net loss of$4.1 million , or$(0.08) per diluted share, in the second quarter of 2020. - Adjusted EBITDA increased 249.2% to
$11.9 million compared to$3.4 million in the second quarter of 2020.
Management Commentary
“The momentum of our business at the start of the year only strengthened in the second quarter,” said
“We remain optimistic on the long-term prospects of our business. Although we continue to face intermittent government restrictions on our customers' operations, we believe that our sales volume will increase over time as the effects of the COVID-19 pandemic dissipate and consumer demand for food away from home continues to increase. As the market leader in servicing the Asian/Chinese restaurant sector, we believe we are well-positioned for long-term success. The fragmented nature of the Asian/Chinese food service industry and the current environment create opportunities for a company like
Second Quarter 2021 Results
Revenue for the second quarter of 2021 increased 85.1% to
Gross profit in the second quarter of 2021 was
Distribution, selling and administrative expenses in the second quarter of 2021 increased to
As a result, net income attributable to the company in the second quarter of 2021 improved to
Adjusted EBITDA for the second quarter of 2021 increased 249.2% to
Liquidity
As of
About
Non-GAAP Financial Measures
Adjusted EBITDA: The Company believes that adjusted EBITDA is a useful performance measure and can be used to facilitate a comparison of the Company’s operating performance on a consistent basis from period to period and to provide for a more complete understanding of factors and trends affecting the business than GAAP measures alone can provide. Management believes that adjusted EBITDA is less susceptible to variances in actual performance resulting from depreciation, amortization and other non-cash charges and more reflective of other factors that directly affect our operating performance. Management believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing the Company’s financial performance with that of other companies in the same industry, many of which present similar non-GAAP financial measures to investors. The Company presents adjusted EBITDA in order to provide supplemental information that the Company considers relevant for the readers of our consolidated financial statements included elsewhere in its reports filed with the
The following table sets forth of the calculation of adjusted EBITDA and reconciliation to net income (loss), the closest
For the Three months ended | Changes | ||||||||||||||||
2021 | 2020 | Amount | % | ||||||||||||||
Net income (loss) | $ | 3,505,039 | $ | (4,314,190 | ) | 7,819,229 | 181.2 | % | |||||||||
Interest expense | 709,342 | 324,319 | 385,023 | 118.7 | % | ||||||||||||
Income tax provision (benefit) | 1,377,098 | (1,489,305 | ) | 2,866,403 | 192.5 | % | |||||||||||
Depreciation & Amortization | 4,259,434 | 4,335,932 | (76,498 | ) | (1.8 | ) | % | ||||||||||
EBITDA | 9,850,913 | (1,143,244 | ) | 10,994,157 | 961.7 | % | |||||||||||
Unrealized change in fair value of interest rate swap contracts | 112,256 | 1,264,254 | (1,151,998 | ) | (91.1 | ) | % | ||||||||||
COVID-19 bad debt reserve (recovery) | — | 1,886,781 | (1,886,781 | ) | (100.0 | ) | % | ||||||||||
Non-recurring expenses* | 1,957,857 | 1,405,671 | 552,186 | 39.3 | % | ||||||||||||
Adjusted EBITDA | $ | 11,921,026 | $ | 3,413,462 | 8,507,564 | 249.2 | % | ||||||||||
Percentage of revenue | 6.2 | % | 3.3 | % | 2.9 | % | 88.7 | % |
Forward-Looking Statements
All statements in this news release other than statements of historical facts are forward-looking statements which contain our current expectations about our future results. We have attempted to identify any forward-looking statements by using words such as “anticipates,” “believes,” “could,” “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 can give no assurance that such expectations will prove to be correct. Such statements are not guarantees of future performance or events and are subject to known and unknown risks and uncertainties that could cause the Company’s actual results, events or financial positions to differ materially from those included within or implied by such forward-looking statements. Such factors include, but are not limited to, unfavorable macroeconomic conditions in
Investor Relations Contact:
Gateway Investor Relations
Tel 1-949-574-3860
HFFG@gatewayir.com
Condensed Consolidated Balance Sheets
(Unaudited)
As of | |||||||
2021 | 2020 | ||||||
ASSETS | |||||||
CURRENT ASSETS: | |||||||
Cash | $ | 13,425,792 | $ | 9,580,853 | |||
Accounts receivable, net | 30,308,639 | 24,857,322 | |||||
Accounts receivable - related parties, net | 1,921,415 | 1,261,463 | |||||
Inventories, net | 64,061,582 | 58,535,040 | |||||
Advances to suppliers - related parties, net | — | 196,803 | |||||
Other current assets | 3,819,451 | 4,614,164 | |||||
TOTAL CURRENT ASSETS | 113,536,879 | 99,045,645 | |||||
Property and equipment, net | 134,755,748 | 136,869,085 | |||||
Operating lease right-of-use assets | 16,326,011 | 931,630 | |||||
Long-term investments | 2,425,625 | 2,377,164 | |||||
Intangible assets, net | 170,352,500 | 175,797,650 | |||||
68,511,941 | 68,511,941 | ||||||
Deferred tax assets | 59,079 | 57,478 | |||||
Other long-term assets | 1,253,212 | 694,490 | |||||
TOTAL ASSETS | $ | 507,220,995 | $ | 484,285,083 | |||
CURRENT LIABILITIES: | |||||||
Bank overdraft | $ | 15,018,435 | $ | 14,839,747 | |||
Line of credit | 19,111,822 | 18,279,062 | |||||
Accounts payable | 41,668,144 | 28,602,570 | |||||
Accounts payable - related parties | 1,956,629 | 1,572,427 | |||||
Current portion of long-term debt, net | 5,804,100 | 5,641,259 | |||||
Current portion of obligations under finance leases | 272,648 | 286,903 | |||||
Current portion of obligations under operating leases | 610,256 | 308,148 | |||||
Accrued expenses and other liabilities | 5,123,479 | 6,178,144 | |||||
Obligations under interest rate swap contracts | 393,479 | 993,516 | |||||
TOTAL CURRENT LIABILITIES | 89,958,992 | 76,701,776 | |||||
Long-term debt, net | 85,142,465 | 88,008,803 | |||||
Promissory note payable - related party | 5,500,000 | 7,000,000 | |||||
Obligations under finance leases, non-current | 630,774 | 766,885 | |||||
Obligations under operating leases, non-current | 15,930,735 | 623,482 | |||||
Deferred tax liabilities | 45,078,908 | 46,382,704 | |||||
TOTAL LIABILITIES | 242,241,874 | 219,483,650 | |||||
SHAREHOLDERS’ EQUITY: | |||||||
Preferred Stock, | — | — | |||||
Common Stock, | 5,191 | 5,191 | |||||
Additional paid-in capital | 583,723,206 | 587,579,093 | |||||
Accumulated deficit | (322,030,870 | ) | (327,150,398 | ) | |||
TOTAL SHAREHOLDER'S EQUITY ATTRIBUTABLE TO HF FOODS GROUP INC. | 261,697,527 | 260,433,886 | |||||
Non-controlling interests | 3,281,594 | 4,367,547 | |||||
TOTAL SHAREHOLDERS’ EQUITY | 264,979,121 | 264,801,433 | |||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 507,220,995 | $ | 484,285,083 | |||
Condensed Consolidated Statements of Operations
(Unaudited)
For the Three Months Ended | For the Six Months Ended | ||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||
Net revenue - third parties | $ | 190,460,529 | $ | 101,105,691 | $ | 347,451,896 | $ | 271,814,931 | |||||||
Net revenue - related parties | 3,085,707 | 3,454,405 | 5,476,168 | 8,548,501 | |||||||||||
TOTAL NET REVENUE | 193,546,236 | 104,560,096 | 352,928,064 | 280,363,432 | |||||||||||
Cost of revenue - third parties | 154,919,694 | 80,707,172 | 282,559,053 | 222,666,532 | |||||||||||
Cost of revenue - related parties | 3,492,238 | 3,240,140 | 5,805,116 | 8,109,071 | |||||||||||
TOTAL COST OF REVENUE | 158,411,932 | 83,947,312 | 288,364,169 | 230,775,603 | |||||||||||
GROSS PROFIT | 35,134,304 | 20,612,784 | 64,563,895 | 49,587,829 | |||||||||||
DISTRIBUTION, SELLING AND ADMINISTRATIVE EXPENSES | 29,903,759 | 25,092,568 | 58,031,254 | 54,499,161 | |||||||||||
INCOME (LOSS) FROM OPERATIONS | 5,230,545 | (4,479,784 | ) | 6,532,641 | (4,911,332 | ) | |||||||||
Other Income (Expenses) | |||||||||||||||
Interest income | — | 132 | — | 263 | |||||||||||
Interest expense | (709,342 | ) | (324,319 | ) | (1,451,483 | ) | (2,275,888 | ) | |||||||
— | — | — | (338,191,407 | ) | |||||||||||
Other income | 473,190 | 264,730 | 912,749 | 670,380 | |||||||||||
Change in fair value of interest rate swap contracts | (112,256 | ) | (1,264,254 | ) | 1,318,636 | (1,264,254 | ) | ||||||||
Total Other Income (Expenses), net | (348,408 | ) | (1,323,711 | ) | 779,902 | (341,060,906 | ) | ||||||||
INCOME (LOSS) BEFORE INCOME TAX PROVISION (BENEFIT) | 4,882,137 | (5,803,495 | ) | 7,312,543 | (345,972,238 | ) | |||||||||
PROVISION (BENEFIT) FOR INCOME TAXES | 1,377,098 | (1,489,305 | ) | 1,984,305 | (1,971,516 | ) | |||||||||
NET INCOME (LOSS) | 3,505,039 | (4,314,190 | ) | 5,328,238 | (344,000,722 | ) | |||||||||
Less: net income (loss) attributable to non-controlling interests | (91,557 | ) | (255,287 | ) | 208,710 | (57,877 | ) | ||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO HF FOODS GROUP INC. | $ | 3,596,596 | $ | (4,058,903 | ) | $ | 5,119,528 | $ | (343,942,845 | ) | |||||
Earnings (loss) per common share - basic and diluted | $ | 0.07 | $ | (0.08 | ) | $ | 0.10 | $ | (6.60 | ) | |||||
Weighted average shares - basic and diluted | 51,913,411 | 52,145,096 | 51,913,411 | 52,145,096 | |||||||||||
Source:
2021 GlobeNewswire, Inc., source