Barfresh Food Group Inc (BRFH) 2023 Q1 法說會逐字稿

Good afternoon, everyone, and thank you for participating on today's First Quarter 2023 Corporate Update Call for Barfresh Food Group. Joining us today is Barfresh Food Group's Founder and CEO, Riccardo Delle Coste; and Barfresh Food Group's CFO, Lisa Roger. Following prepared remarks, we will open the call for your questions.

大家下午好，感謝您參加今天 Barfresh Food Group 的 2023 年第一季度公司最新動態電話會議。今天加入我們的是 Barfresh Food Group 的創始人兼首席執行官 Riccardo Delle Coste；以及 Barfresh Food Group 的首席財務官 Lisa Roger。在準備好發言後，我們將開始電話詢問您的問題。

The discussion today will include forward-looking statements. Expect for historical information herein, matters set forth on this call are forward-looking within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements about the company's commercial progress, success of its strategic relationships and projections of future financial performance. These forward-looking statements are identified by the use of words such as grow, expand, anticipate, intend, estimate, believe, expect, plan, should, hypothetical, potential, forecast and projects, continue, could, may, predict and will and variations of such words and similar expressions are intended to identify such forward-looking statements.

今天的討論將包括前瞻性陳述。除本文的歷史信息外，本次電話會議中提出的事項均具有 1995 年《私人證券訴訟改革法案》安全港條款含義內的前瞻性，包括有關公司商業進展、戰略關係的成功以及對未來發展的預測的陳述。未來的財務表現。這些前瞻性陳述通過使用諸如增長、擴展、預期、打算、估計、相信、期望、計劃、應該、假設、潛力、預測和項目、繼續、可能、可能、預測和將等詞語來識別。此類詞語和類似表達的變體旨在識別此類前瞻性陳述。

All statements other than the statements of historical fact that address activities, events or developments that the company believes or anticipates will or may occur in the future are forward-looking statements. These statements are based on certain assumptions made based on experience, expected future developments and other factors that the company believes are appropriate under the circumstances. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the company. Should one or more of these risks or uncertainties materialize or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements.

除歷史事實陳述外，涉及公司相信或預期未來將發生或可能發生的活動、事件或發展的所有陳述均為前瞻性陳述。這些陳述基於基於經驗、預期未來發展以及公司認為在當時情況下適當的其他因素而做出的某些假設。此類陳述受到許多假設、風險和不確定因素的影響，其中許多因素超出了公司的控制範圍。如果這些風險或不確定性中的一項或多項成為現實，或者基本假設被證明不正確，則實際結果可能與此類前瞻性陳述所表明或預期的結果存在重大差異。

Accordingly, investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they are made. The contents of this call should be considered in conjunction with the company's recent filings with the Securities and Exchange Commission, including its annual report on Form 10-K, on the quarterly reports on Form 10-Q and current reports on Form 8-K, including any warnings, risk factors and cautionary statements contained therein.

因此，投資者應注意不要過分依賴這些前瞻性聲明，這些聲明僅代表發布當日的情況。本次電話會議的內容應結合公司最近向美國證券交易委員會提交的文件來考慮，包括其 10-K 表的年度報告、10-Q 表的季度報告以及 8-K 表的當前報告，包括其中包含的任何警告、風險因素和警示性聲明。

Furthermore, the company expressly disclaims any current intention to update publicly any forward-looking statements after this call whether as a result of new information, future events, changes in assumptions or otherwise. In order to aid the understanding of the company's business performance, the company is also presenting certain non-GAAP measures, including adjusted EBITDA, which are reconciled in the table in the business update release to the most comparable GAAP measures. The reconciling items are nonoperational or noncash costs, including stock compensation, stock issued for services and other nonrecurring costs such as those associated with the product withdrawal and the company's NASDAQ uplist. Management believes that adjusted EBITDA provides useful information to the investor because it is directly reflective on the period-to-period performance of the company's core business.

此外，該公司明確否認目前有意在本次電話會議後公開更新任何前瞻性陳述，無論是由於新信息、未來事件、假設變化還是其他原因。為了幫助了解公司的業務績效，公司還提供了某些非公認會計準則衡量標準，包括調整後的 EBITDA，這些衡量標准在業務更新發布的表格中與最可比的公認會計準則衡量標准進行了核對。調節項目是非運營或非現金成本，包括股票補償、為服務發行的股票以及其他非經常性成本，例如與產品撤回和公司納斯達克上市相關的成本。管理層認為，調整後的 EBITDA 為投資者提供了有用的信息，因為它直接反映了公司核心業務的同期業績。

Now I'll turn the call over to the CEO of Barfresh Food Group, Mr. Riccardo Delle Coste. Please sir, go ahead.

現在我將把電話轉給 Barfresh Food Group 首席執行官 Riccardo Delle Coste 先生。先生，請繼續。

Good afternoon, everyone, and thank you for joining us for our first quarter 2023 earnings call. We had another quarter of strong customer adoption for our new smoothie carton format, which drove a 46% sequential increase in revenue over the fourth quarter of 2022. Revenue for the first quarter of 2023 was $2.1 million compared to $1.4 million in the fourth quarter of 2022.

大家下午好，感謝您參加我們的 2023 年第一季度財報電話會議。我們的新冰沙紙盒格式又迎來了一個季度的強勁客戶採用，這推動我們的收入比 2022 年第四季度連續增長 46%。2023 年第一季度的收入為 210 萬美元，而 2023 年第四季度的收入為 140 萬美元。 2022 年。

We finished product testing and installing new equipment with our co-packer during the first quarter, which increased available carton capacity and led to the sequential growth in sales. Our co-packer is in the process of making engineering changes to the manufacturing line for our smoothie carton format and its completion is on track for the second half of 2023, which will increase capacity to approximately 25 million to 30 million units per year compared to 5 million in the first quarter.

我們在第一季度完成了產品測試並與我們的代包裝商安裝了新設備，這增加了可用紙箱容量並導致銷售額連續增長。我們的代加工廠正在對冰沙紙盒形式的生產線進行工程改造，預計將於 2023 年下半年完工，與之前相比，每年的產能將增加至約 2500 萬至 3000 萬件。第一季度500萬。

It is our expectation for revenue to grow significantly as the capacity comes online, and we are projecting record revenue for fiscal year 2023. Additionally, increased sales of our new smoothie format helped drive margin expansion in the first quarter. Gross margins were 41% for the first quarter of 2023 compared to 30% in the prior year period and 36% in the fourth quarter of 2022. We expect modest margin improvement throughout the year, driven by price increases implemented at the beginning of this year, the continuation of our operational margin improvement efforts and increased sales of our higher-margin smoothie carton format.

我們預計，隨著產能上線，收入將大幅增長，我們預計 2023 財年的收入將創歷史新高。此外，我們新冰沙形式的銷量增加有助於推動第一季度的利潤率擴張。 2023 年第一季度的毛利率為 41%，去年同期為 30%，2022 年第四季度為 36%。我們預計，在今年年初實施的提價推動下，全年利潤率將小幅改善，我們繼續努力提高運營利潤率，並增加利潤率較高的冰沙紙盒形式的銷量。

As we've stated previously, this new format was created to be complementary to our bottle and not serve as a replacement. We believe there is a need for both formats in the education channel. As such, we are actively working to replace the lost bottle manufacturing capacity and are working on multiple options to find a partner with the right experience, infrastructure and available capacity.

正如我們之前所說，這種新格式的創建是為了補充我們的瓶子，而不是作為替代品。我們認為教育渠道中需要這兩種形式。因此，我們正在積極努力彌補失去的瓶子製造能力，並正在尋找多種選擇來尋找具有適當經驗、基礎設施和可用能力的合作夥伴。

In the interim, we have a robust sales force that has been strengthened over the past year as we have increased our national sales network by adding sales brokers specializing in the school market that are actively pursuing new school accounts and expanding our reach in the education channel.

在此期間，我們擁有一支強大的銷售隊伍，在過去的一年裡得到了加強，因為我們增加了專門從事學校市場的銷售經紀人，擴大了我們的全國銷售網絡，這些經紀人正在積極尋求新的學校客戶並擴大我們在教育渠道的影響力。

We will have an even larger customer base to sell into once both our bottle and carton formats are at full capacity, setting our company up for long-term growth.

一旦我們的瓶裝和紙盒包裝都滿負荷生產，我們將擁有更大的客戶群，為我們公司的長期增長奠定基礎。

I'll now turn the call over to our CFO, Lisa Roger. Lisa?

我現在將把電話轉給我們的首席財務官麗莎·羅傑。麗莎？

Thank you, Riccardo. Revenue for the first quarter of 2023 was $2.1 million compared to $2.5 million for the first quarter of 2022 and a 46% increase compared to the $1.4 million in the fourth quarter of 2022. The year-over-year decline is a result of the loss of our largest bottle manufacturer, partially offset by increased orders of our smoothie carton format rolled out in the fourth quarter of 2022. We expect revenue will increase in the back half of this year as capacity for our smoothie carton format ramps, and we expect to achieve record revenue for fiscal year 2023.

謝謝你，里卡多。 2023 年第一季度的收入為 210 萬美元，而 2022 年第一季度為 250 萬美元，與 2022 年第四季度的 140 萬美元相比增長了 46%。同比下降是虧損的結果我們最大的瓶子製造商的銷售額，部分被 2022 年第四季度推出的冰沙紙盒形式的訂單增加所抵消。我們預計，隨著我們的冰沙紙盒形式的產能增加，今年下半年的收入將增加，並且我們預計2023 財年收入創歷史新高。

Gross margins for the first quarter of 2023 were 41% compared to 30% for the first quarter of 2022 and compared to 36% in the fourth quarter of 2022. The increase in gross margins was due to the change in product mix as well as pricing actions implemented at the beginning of the fiscal year and our ongoing operational margin improvement efforts. We expect modest margin improvements throughout the year as a result of price increases and operational efficiencies.

2023 年第一季度的毛利率為 41%，而 2022 年第一季度為 30%，2022 年第四季度為 36%。毛利率的增長是由於產品結構和定價的變化本財年年初實施的行動以及我們持續改善運營利潤率的努力。我們預計，由於價格上漲和運營效率提高，全年利潤率將略有改善。

Our net loss for the first quarter of 2023 was $910,000 as compared to a net loss of $895,000 in the first quarter of 2022. Selling, marketing and distribution expense for the first quarter of 2023 decreased to $667,000 compared to $675,000 in the first quarter of 2022. The slight decline was due to a decrease in storage and outbound freight expense this year as a result of the distribution efficiencies we implemented in 2022, partially offset by the cost to retain outside service providers including brokers specializing in the school market that were hired in the third quarter of 2022.

我們 2023 年第一季度的淨虧損為 910,000 美元，而 2022 年第一季度的淨虧損為 895,000 美元。2023 年第一季度的銷售、營銷和分銷費用減少至 667,000 美元，而 2022 年第一季度為 675,000 美元略有下降是由於我們在 2022 年實施的分銷效率提高了今年的倉儲和出境運費，但保留外部服務提供商（包括專門從事學校市場的經紀人）的成本部分抵消了這些費用2022年第三季度。

G&A expenses for the first quarter of 2023 were $994,000 compared to $823,000 in the same period last year. The increase in G&A was driven by an increase in personnel costs and stock-based compensation, resulting primarily from the modification of our 2022 performance stock unit program with partial cash settlements. For the first quarter of 2023, our adjusted EBITDA was a loss of approximately $544,000 as compared to a loss of approximately $546,000 for the first quarter of 2022 and compared to a loss of approximately $833,000 for the fourth quarter of 2022.

2023 年第一季度的一般管理費用為 994,000 美元，而去年同期為 823,000 美元。 G&A 的增長是由人員成本和股票薪酬的增加推動的，這主要是由於我們修改了 2022 年績效股票單位計劃並進行了部分現金結算。 2023 年第一季度，我們調整後的 EBITDA 虧損約 544,000 美元，而 2022 年第一季度虧損約 546,000 美元，2022 年第四季度虧損約 833,000 美元。

We expect sequential improvements in adjusted EBITDA throughout the remaining quarters of 2023.

我們預計 2023 年剩餘季度調整後 EBITDA 將連續改善。

Now moving on to our balance sheet. As of March 31, 2023, we had approximately $1.8 million in cash and approximately $1.1 million of inventory on our balance sheet compared to $3 million of cash and $1 million of inventory as of December 31, 2022.

現在轉向我們的資產負債表。截至 2023 年 3 月 31 日，我們的資產負債表上約有 180 萬美元的現金和約 110 萬美元的庫存，而截至 2022 年 12 月 31 日，我們的現金為 300 萬美元，庫存為 100 萬美元。

Now I will turn the call back to Riccardo for closing remarks.

現在我將把電話轉回給里卡多，讓他發表結束語。

Thank you, Lisa. We are pleased with the initial success of our new smoothie carton format and are looking forward to extending our reach within the education channel this year as we increase capacity and are able to serve a growing number of customers. We are also focused this year on securing a new bottle manufacturer and continuing to expand our single-serve and bulk smoothie customer base.

謝謝你，麗莎。我們對新的冰沙紙盒形式取得的初步成功感到高興，並期待著今年擴大我們在教育渠道的影響力，因為我們增加了產能並能夠為越來越多的客戶提供服務。今年我們還重點關註一家新的瓶子製造商，並繼續擴大我們的單份和散裝冰沙客戶群。

We expect to finish the year with strong improvement on both our top and bottom line and generate record revenue and improved margins for fiscal year 2023.

我們預計，到 2023 財年，我們的收入和利潤都會大幅改善，收入創歷史新高，利潤率也將提高。

And with that, I would like to open up the line to questions. Operator?

說到這裡，我想開放提問。操作員？

(Operator Instructions) Our first question comes from Anthony Vendetti with Maxim Group.

（操作員說明）我們的第一個問題來自 Maxim Group 的 Anthony Vendetti。

So I know after the fourth quarter conference call, which actually wasn't that long ago, you were talking about the discussions with the new potential bottle manufacturers. Has anything changed materially since then? Or are those discussions still ongoing? Or have you narrowed it down to a few that you're likely to contract with before the end of the year?

所以我知道在第四季度電話會議之後，實際上不久前，您正在談論與新的潛在瓶子製造商的討論。從那以後有什麼實質性的改變嗎？或者這些討論仍在進行中嗎？或者您是否已將範圍縮小到可能在年底前簽訂合同的幾個？

We are getting closer to finalizing something. We are zeroing in on one in particular that we've got some broad terms agreed with. It's continuing though. But we are definitely closer, and we definitely expect to have something solidified before the end of the year.

我們已經接近敲定一些事情了。我們正在特別關註一項，我們已經就一些廣泛的條款達成了一致。但它仍在繼續。但我們肯定已經更接近了，並且我們肯定希望在今年年底之前能夠得到鞏固。

Okay. And then I guess on -- because of the recall, there was a little bit of disruption with your customers. I think you mentioned most of them understand that it wasn't your fault, it was the bottle manufacturer's fault. But how many of them did you lose? And have you already replaced them with new school districts? Maybe just talk a little bit about how that -- how those conversations went and what's the likelihood a, that you'll be able to get them back? Or b, you've been able to replace them?

好的。然後我想，由於此次召回，您的客戶受到了一些干擾。我想你提到他們中的大多數人都明白這不是你的錯，而是瓶子製造商的錯。但你失去了多少？你們已經用新學區取代它們了嗎？也許只是談論一下這些對話是如何進行的以及您能夠將它們找回來的可能性有多大？或者b，你已經能夠更換它們了嗎？

Yes. Look, I mean, just generally, we have lost a large number of customers. Fortunately, for us, we have been able to get new customers with the carton product. And it will -- we will end up surpassing where we were on the balance overall. And as we are just continuing the dialogue with those other customers that have been affected, we do have a limited supply of bottles still available that we are trying to give to whichever customers we can service with that bottle volume.

是的。聽著，我的意思是，總的來說，我們失去了大量客戶。幸運的是，對我們來說，我們已經能夠通過紙箱產品贏得新客戶。我們最終將超越我們的總體平衡水平。由於我們正在繼續與受到影響的其他客戶進行對話，因此我們仍然有有限的瓶子供應，我們正試圖將其提供給我們能夠以該瓶子數量提供服務的任何客戶。

But we are expecting to be back up and running as well with another bottle manufacturer. So it's a lot of ongoing conversations. The fact of the matter is that we were mid-season for the bids for the school year. So those customers that took us off the menu in the middle of the season are done, right? I mean we interrupted the supply. They've taken us off the menu, and that's kind of done, right? They've replaced the product with whatever else that was serving before.

但我們期望與另一家瓶子製造商一起恢復並運行。所以這是很多持續的對話。事實上，我們正​​處於學年投標季節中期。那麼，那些在季節中期將我們從菜單上剔除的顧客已經結束了，對嗎？我的意思是我們中斷了供應。他們把我們從菜單上刪除了，這算是完成了，對吧？他們已經用以前提供的任何其他產品替換了該產品。

So we'll revisit those accounts in the fall. And by then, we'll have hopefully much better visibility on the exact timing of the new bottle manufacturer. And that should then hope -- we should then hopefully have a much clearer picture of the bottle supply and being able to get those customers, hopefully, either back half of the year or into next year. We can hopefully start doing some repair work in terms of getting those customers back online.

因此，我們將在秋季重新審視這些賬戶。到那時，我們有望更好地了解新瓶子製造商的確切時間。那麼我們應該希望能夠對瓶子供應有更清晰的了解，並希望能夠在今年下半年或明年吸引這些客戶。我們有望開始進行一些修復工作，讓這些客戶重新上線。

Okay. And then just 2 other kind of questions before I turn it over. So the guidance that you -- the general guidance that you gave, I guess, at the end of the fourth quarter continues to be -- expect record revenues in fiscal '23 this year, year-over-year margin improvement.

好的。在我把它轉過來之前，還有另外兩個問題。因此，您的指導——我想您在第四季度末給出的總體指導仍然是——預計今年 23 財年的收入將創紀錄，利潤率同比改善。

And then more specifically in your management comments, margin expansion throughout 2023. So your margins came in greater than we expected this quarter, 41%. Continued margin improvement, so should we interpret that as a sequential improvement throughout the year on those gross margins?

然後，更具體地說，在你們的管理層評論中，2023 年利潤率將擴大。所以你們的利潤率高於我們本季度的預期，即 41%。利潤率持續改善，那麼我們是否應該將其解釋為全年毛利率的連續改善？

I would say that it will be modest. And we could have a little bit of variation as we ramp Twist & Go further in Q4. So that will be offset by an increase in revenue. But some modest expansion in Q2 and Q3.

我想說的是，這將是謙虛的。隨著我們在第四季度進一步加大 Twist & Go 的力度，我們可能會有一些變化。因此，這將被收入的增加所抵消。但第二季度和第三季度略有擴張。

Yes. There's a couple of factors around that. One is, we're actually expecting some softening of some raw material costs in the back half of the year as well, which will help our margins. And in addition -- but counter to that as well is, we're obviously planning and hoping that the bottle volume is going to increase in the -- towards the end of the year as well. So that might even it out a little bit more. So there's a couple of factors there. But I think, as you mentioned, we kind of beat on the margin. We expect to keep it around this level with, I think, like Lisa mentioned, a slight -- maybe a slight improvement above that.

是的。這有幾個因素。一是，我們實際上預計下半年一些原材料成本也會有所下降，這將有助於我們的利潤率。此外，與此相反的是，我們顯然正在計劃並希望在年底前瓶裝量也會增加。這樣可能會更平衡一些。所以有幾個因素。但我認為，正如你所提到的，我們有點微弱優勢。我們希望將其保持在這個水平附近，我認為，就像麗莎提到的那樣，稍微——也許比這個水平稍有改善。

Okay. And then any update and then I'll turn it over, any update on consumer retail channel?

好的。然後有任何更新，然後我會將其移交，消費者零售渠道有任何更新嗎？

Yes. Look, given the issues that we've had with the bottle supplier, unfortunately, our retail plans are still on hold. We were hoping to have some significant progress by now as you know. But unfortunately, that's all on hold until we get the new bottle manufacturer sorted out.

是的。不幸的是，考慮到我們與瓶子供應商之間的問題，我們的零售計劃仍然被擱置。如您所知，我們希望現在能夠取得一些重大進展。但不幸的是，這一切都被擱置了，直到我們找到新的瓶子製造商為止。

(Operator Instructions) There being no further questions, that concludes the Q&A session. And this concludes today's teleconference. You may disconnect your lines at this time, and thank you for your participation. Have a great day.

（操作員說明）沒有其他問題，問答環節結束。今天的電話會議到此結束。此時您可以斷開線路，感謝您的參與。祝你有美好的一天。