LAS VEGAS, April 05, 2022 (GLOBE NEWSWIRE) — HF Foods Group Inc. (NASDAQ: HFFG), a leading food distributor to Asian restaurants across the United States (“HF Foods”, “HF Group” or the “Company”), reported fourth quarter and full year unaudited financial results for the year ended December 31, 2021.
The Company is unable to file its audited financial results on Form 10-K due to unresolved comments contained in a Securities Exchange Commission (“SEC”) comment letter relating to the Company’s merger with B&R Global which was consummated on November 4, 2019. The Company intends to file the Form 10-K as promptly as possible. Accordingly, the Company’s audited financial results are not yet available. This press release contains certain unaudited financial information relating to fourth quarter and full year financial results for the year ended December 31, 2021, and such information could potentially change depending on the outcome of the SEC comment letter.
Fourth Quarter 2021 Financial Summary Vs. Fourth Quarter 2020
- Net revenue increased 56% to $228.4 million compared to $146.5 million in 2020.
- Gross profit was $45.1 million, or 19.7% of total revenue compared to $25.5 million, or 17.4% of total revenue in 2020.
Full Year 2021 Financial Summary Vs. Full Year 2020
- Net revenue increased 41% to $796.9 million compared to $566.8 million in 2020.
- Gross profit was $151.6 million, or 19.0% of total revenue compared to $100.3 million, or 17.7% of total revenue in 2020.
“Despite headwinds in the global economy, HF Foods delivered record fourth quarter and full year results, highlighted by a 41% year over year increase in revenues, surpassing pre-pandemic results,” said Peter Zhang, CEO of HF Foods. “Due to the easing of COVID-19 related restrictions, resulting in an increase in overall foot traffic to restaurants, dine-in business for our clients has significantly recovered, which has positively impacted our sales and movement of product. Additionally, we continue to use our economies of scale to leverage our purchasing bargaining power, which has bolstered our gross margins.
“We expect our growth momentum to continue by taking advantage of both organic and inorganic growth opportunities, such as our acquisition of Great Wall Seafood Supply in the fourth quarter. These growth opportunities will continue to generate future profits and revenues as we look to remain the market leader in servicing the Asian restaurant sector and grow our customer base. In addition, the Company also entered into an amended and restated credit agreement with JPMorgan Chase on March 31, 2022 to renew the existing $100 million asset-secured revolving credit facility and to increase the mortgage-secured Term Loans from the current outstanding amount of $69 million to $115 million. We believe this is a clear vote of confidence shown by our lender, which will enable the Company to further grow our business.”
Full Year 2021 Results
Net revenue was $796.9 million in 2021 compared to $566.8 million in 2020, an increase of $230.1 million, or 41%. This increase was primarily attributable to the strong recovery of restaurant demand from the COVID-19 pandemic.
Gross profit was $151.6 million in 2021 compared to $100.3 million in 2020, an increase of $51.3 million, or 51%. The increase was mainly due to strong sales growth in 2021 and improved gross profit margin from 17.7% in 2020 to 19.0% in 2021.
As of December 31, 2021, we had cash of approximately $14.8 million and access to approximately $44.7 million in additional funds through our $100.0 million line of credit, subject to a borrowing base calculation.
About HF Foods Group Inc.
HF Foods Group Inc., headquartered in Las Vegas, Nevada, is a leading marketer and distributor of fresh produce, frozen and dry food, and non-food products to primarily Asian/Chinese restaurants and other foodservice customers throughout the United States. With 16 distribution centers strategically located throughout the nation, HF Foods aims to supply the increasing demand for Asian American restaurant cuisine. With an in-house proprietary ordering and inventory control network, more than 12,500 established customers in over 40 states, and strong relations with growers and suppliers of food products in the US, South America and China, HF Foods Group is able to offer fresh, high-quality specialty restaurant foods and supplies at economical prices to its large and growing base of customers. For more information, please visit www.wordpress-839355-3377400.cloudwaysapps.com.
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 the United States, competition in the food service distribution industry, particularly the entry of new competitors into the Chinese/Asian restaurant market niche, increases in fuel costs or commodity prices, disruption of relationships with vendors and increases in product prices, U.S. government tariffs on products imported into the United States, particularly from China, changes in consumer eating and dining out habits, disruption of relationships with or loss of customers, our ability to execute our acquisition strategy, availability of financing to execute our acquisition strategy, failure to retain our senior management and other key personnel, our ability to attract, train and retain employees, changes in and enforcement of immigration laws, failure to comply with various federal, state and local rules and regulations 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 are alleged to have caused illness, been mislabeled, misbranded or adulterated or to otherwise have violated applicable government regulations, failure to protect our intellectual property rights, any cyber security incident, other technology disruption, or delay in implementing our information technology systems, statements of assumption underlying any of the foregoing, and other factors disclosed under the caption “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2020 and other filings 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 undertake no obligation to disclose any revision to these forward-looking statements.
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