Hf Foods Group Inc (HFFG) 2024 Q4 法說會逐字稿

Hello, everyone. Welcome to HF Foods Group's fourth-quarter and full-year 2024 earnings conference call. Joining me on today's call are Felix Lin, President and Chief Executive Officer; and Cindy Yao, Chief Financial Officer. By now, everyone should have access to the earnings release for the period ended December 31, 2024, that went out Thursday, March 13, at approximately 4:05 PM Eastern Time. The press release is accessible on the company's website at investors.hffoodsgroup.com.

大家好。歡迎參加 HF Foods Group 2024 年第四季和全年財報電話會議。參加今天電話會議的還有總裁兼執行長 Felix Lin；以及財務長 Cindy Yao。到目前為止，每個人都應該能夠看到截至 2024 年 12 月 31 日的收益報告，該報告於美國東部時間 3 月 13 日星期四下午 4 點左右發布。新聞稿可在公司網站 investors.hffoodsgroup.com 上查閱。

Before we begin, let me remind everyone that today's discussion contains forward-looking statements based on the environment as the company currently sees it and as such, does include risks and uncertainties. If you refer to HF Foods earnings release as well as the company's most recent SEC filings, you will see a discussion of factors that could cause the company's actual results to differ materially because of these forward-looking statements. Please remember, the company undertakes no obligation to update or revise these forward-looking statements in the future.

在我們開始之前，讓我提醒大家，今天的討論包含基於公司當前所見環境的前瞻性陳述，因此確實包含風險和不確定性。如果您參考 HF Foods 的收益報告以及該公司最新的 SEC 文件，您將看到有關可能導致公司實際結果因這些前瞻性陳述而產生重大差異的因素的討論。請記住，本公司不承擔將來更新或修改這些前瞻性聲明的義務。

In these remarks, the company will make a number of references to non-GAAP financial measures. We believe that these measures provide investors with a useful perspective on the underlying growth trends of the business and have included in the earnings release a full reconciliation of non-GAAP financial measures to the most comparable GAAP measures. Now I will turn the call over to Felix.

在這些評論中，本公司將多次提及非公認會計準則財務指標。我們相信，這些指標為投資者提供了了解業務潛在成長趨勢的有用視角，並在收益報告中納入了非 GAAP 財務指標與最具可比性的 GAAP 指標的全面對帳。現在我將電話轉給菲利克斯。

Hello, everyone. Welcome to HF Foods fourth-quarter earnings call. I'll provide an operational update, and Cindy will speak to our fourth-quarter and full-year 2024 financial results. First, I'd like to start by congratulating the entire HF team on a strong finish to 2024, and the results we'll share shortly are a testament to all the hard work that's been put into executing our plan. I am as confident as ever in terms of our short- and long-term outlook.

大家好。歡迎參加 HF Foods 第四季財報電話會議。我將提供營運更新，Cindy 將介紹我們的 2024 年第四季和全年財務表現。首先，我要祝賀整個 HF 團隊在 2024 年取得了圓滿成功，我們即將分享的結果證明了我們為執行計劃所付出的所有辛勤工作。我對我們的短期和長期前景一如既往地充滿信心。

I'll go over some high-level financial results and a brief business update, then Cindy will cover the financials in detail. For the fourth quarter and full year 2024, net revenue increased 8.7% and 4.6%, respectively. Adjusted EBITDA increased 39.4% for the fourth quarter 2024 and 21.6% for the full year 2024.

我將介紹一些概要的財務結果和簡要的業務更新，然後 Cindy 將詳細介紹財務狀況。2024年第四季和全年淨收入分別成長8.7%和4.6%。2024 年第四季調整後 EBITDA 成長 39.4%，2024 年全年調整後 EBITDA 成長 21.6%。

I'll start with a brief overview of the industry. It's clear that there are a lot of uncertainties in the market due to new tariff policies being enacted and potential higher inflation that will continue to drive consumer spending decisions. We have seen lower foot traffic associated with our restaurant customers as some consumers are increasingly more budget conscious.

我將首先簡單介紹一下這個行業。顯然，由於新關稅政策的實施和潛在的通膨上升，市場存在許多不確定性，這將繼續影響消費者的支出決策。由於一些消費者越來越注重預算，我們發現餐廳的客流量減少。

We are expanding our business portfolio to increase wholesale and retail sales by reaching specialty businesses and consumers directly. This strategy helps us mitigate industry-wide challenges and drive sustainable growth. Since the pandemic, we have diversified our supply chain network to become a true global sourcing network with goods sourced domestically, Asia, South America, and Middle East.

我們正在擴大我們的業務組合，透過直接接觸專業企業和消費者來增加批發和零售額。這項策略有助於我們緩解整個產業的挑戰並推動永續成長。自疫情爆發以來，我們已經實現了供應鏈網絡多元化，成為真正的全球採購網絡，貨物採購來自國內、亞洲、南美洲和中東。

Leveraging the foundation we've laid in the last several years, we are in a much stronger position to deal with potential supply chain disruptions. We see a tremendous opportunity in expanding our business into the broader wholesale channel in specialty foods that have historically been underserved by the larger players in the industry.

利用過去幾年打下的基礎，我們能夠更好地應對潛在的供應鏈中斷。我們看到了將業務拓展到更廣泛的特色食品批發管道的巨大機遇，而這些食品歷來都未得到業內大型企業的充分服務。

Given our scale, we're well positioned to drive incremental growth through the wholesale channel. Our new oil packaging operation in Kansas City is a great example of this new strategy where HF can sell wholesale products to smaller specialty distributors and grocery businesses with our own private label products.

鑑於我們的規模，我們有能力透過批發管道推動增量成長。我們在堪薩斯城的新石油包裝業務就是這項新策略的一個很好的例子，HF 可以使用我們自己的自有品牌產品將批發產品賣給較小的專業分銷商和雜貨企業。

We're also actively piloting a new e-commerce platform as part of our broader digital transformation plan. With over 15,000 independent Asian restaurant accounts, we are capitalizing on the opportunity to sell specialty retail products to our restaurant customers and their employees for direct consumption. I look forward to updating our investors on the progress in the coming quarters as we continue to drive investment in our business to deliver sustainable long-term growth.

作為我們更廣泛的數位轉型計畫的一部分，我們也正在積極試行新的電子商務平台。我們擁有超過 15,000 個獨立亞洲餐廳帳戶，我們正在利用機會向我們的餐廳客戶及其員工銷售特色零售產品供直接消費。我期待在未來幾季向投資者通報進度，我們將繼續推動業務投資，實現可持續的長期成長。

Our operational transformation continues to gain momentum. We believe the strategic initiatives we launched will create meaningful value through both revenue growth and operational efficiencies in the long term. I'd like to share several important developments that highlight our progress.

我們的營運轉型持續加速。我們相信，我們推出的策略性舉措將透過長期收入成長和營運效率創造有意義的價值。我想分享幾個突顯我們進步的重要進展。

Our centralized purchasing program continues to make meaningful progress. Building on the successful implementation across our seafood category, we're now expanding the program into other key categories. In the first quarter of 2025, we're executing our plan to consolidate purchasing for produce in key commodities.

我們的集中採購計劃繼續取得有意義的進展。在我們海鮮類別成功實施的基礎上，我們現在將該計劃擴展到其他主要類別。2025年第一季度，我們正在執行重點農產品的整合採購計畫。

Regarding our cooking oil initiative, I'm pleased to report that the Kansas City facility is now operational with 100% of our distribution centers having access to this capability, although we're currently utilizing only about half of the available production capacity as we continue to ramp up operations. This vertical integration initiative, combined with our broader centralized purchasing strategy helps us to enhance our operational efficiency and improve our margin profile over the long term. Our strengthened purchasing power continue to provide access to broader wholesale channels, helping to partially offset the impact of current market conditions in certain regions.

關於我們的食用油計劃，我很高興地報告，堪薩斯城工廠目前已投入運營，我們 100％ 的配送中心都可以使用此功能，儘管我們目前僅利用了大約一半的可用生產能力，因為我們正在繼續擴大運營。這項垂直整合措施與我們更廣泛的集中採購策略相結合，有助於我們提高營運效率並改善長期利潤狀況。我們增強的購買力繼續為我們帶來更廣泛的批發管道，有助於部分抵消某些地區當前市場狀況的影響。

Moving to our transportation and logistics initiatives. We're executing on our comprehensive fleet enhancement program throughout 2025. This program encompasses two key elements: one, the continued upgrade of our delivery vehicle fleet; and two, the implementation of sophisticated route optimization technology.

轉向我們的運輸和物流舉措。我們將在 2025 年實施全面的機隊增強計畫。該計劃包含兩個關鍵要素：一是持續升級我們的送貨車隊；二是實施精細化路線優化技術。

Our upcoming facility improvements will complement these efforts, particularly the Charlotte, North Carolina facility, which is undergoing renovation that is set to be complete at the end of Q2 2025. The modernized Charlotte facility will serve as a cornerstone in our enhanced distribution network, enabling shorter delivery routes and reduced drive time, which we expect will generate meaningful cost efficiencies across our Southeast operations.

我們即將進行的設施改善將補充這些努力，特別是北卡羅來納州夏洛特的設施，該設施正在進行翻新，預計將於 2025 年第二季末完工。現代化的夏洛特工廠將成為我們增強分銷網絡的基石，縮短運輸路線並減少駕駛時間，我們預計這將為我們東南地區的業務帶來顯著的成本效率。

Our digital transformation initiatives continue to advance with 12 of our 15 sites now operating on our modern ERP platform. We are on track to complete the system-wide implementation in 2025. This technological foundation will be instrumental in unlocking the full potential of our centralized purchasing capabilities.

我們的數位轉型計畫繼續推進，目前我們 15 個站點中的 12 個已在我們現代化的 ERP 平台上運作。我們預計在 2025 年完成全系統實施。這項技術基礎將有助於充分發揮我們的集中採購能力的潛力。

In parallel with our ERP deployment, we're preparing to unveil our new e-commerce platform in conjunction with our East Coast distribution center launches. Early pilot results have been extremely encouraging. And while this digital channel is in its early stages, we believe it represents a significant growth opportunity. This strategic initiative is designed to complement our traditional ordering system, while providing enhanced accessibility and convenience for our customers.

在部署 ERP 的同時，我們正準備結合東岸配送中心的啟動推出新的電子商務平台。早期試辦結果非常令人鼓舞。雖然這個數位管道尚處於早期階段，但我們相信它代表著一個巨大的成長機會。這項策略性舉措旨在補充我們的傳統訂購系統，同時為我們的客戶提供更高的可近性和便利性。

The platform will particularly resonate with next-generation restaurant operators and expand our reach to diverse customer segments, leveraging our robust distribution infrastructure to deliver a seamless digital experience. We anticipate this digital transformation will serve as a meaningful catalyst for margin expansion and operational excellence in the coming years.

該平台將特別引起下一代餐廳經營者的共鳴，並擴大我們對不同客戶群的覆蓋範圍，利用我們強大的分銷基礎設施來提供無縫的數位體驗。我們預計，數位轉型將成為未來幾年利潤擴大和卓越營運的重要催化劑。

Our strategic facility enhancement initiatives continue to advance across multiple regions. As previously mentioned, the renovation of our Charlotte distribution center remains on track with completion targeted for the end of Q2 2025.

我們的策略設施改善計劃繼續在多個地區推進。如前所述，我們夏洛特配送中心的翻新工程仍在進行中，預計將於 2025 年第二季末完成。

Together with our new Atlanta facility project, these investments will significantly expand our Southeast presence. The Atlanta facility phase implementation through 2026 will double our capacity in that region, creating meaningful organic growth opportunities from a cross-selling perspective.

與我們新的亞特蘭大工廠項目一起，這些投資將大大擴展我們在東南地區的業務。亞特蘭大工廠分階段實施至 2026 年，將使我們在該地區的生產能力翻一番，從交叉銷售的角度創造有意義的有機成長機會。

Meanwhile, our operational efficiency efforts in Salt Lake City are progressing well, highlighted by the successful execution of a facility sale agreement and planned capital improvement schedule for completion in the first half of 2025. These infrastructure investments reflect our ongoing commitment to optimizing our distribution network and creating a stronger foundation for sustainable growth.

同時，我們在鹽湖城的營運效率工作進展順利，其中突出的是成功執行了設施銷售協議，併計劃於 2025 年上半年完成資本改善計劃。這些基礎設施投資反映了我們對優化分銷網絡和為永續成長奠定更堅實基礎的持續承諾。

Looking ahead at our growth initiatives, we maintain a disciplined approach to evaluating strategic acquisitions. Our M&A pipeline remains focused on opportunities that would expand our geographic footprint, while offering potential for operational integration and meaningful cost synergies. We're expecting to be active on the M&A front in 2025.

展望我們的成長計劃，我們將採取嚴謹的方式來評估策略性收購。我們的併購管道仍然專注於能夠擴大我們地理覆蓋範圍的機會，同時提供營運整合和有意義的成本協同效應的潛力。我們預計 2025 年將在併購領域積極活躍。

We announced in February that we successfully amended our credit agreement with JPMorgan Chase Bank and Comerica Bank, welcoming Wells Fargo as an additional lender and increasing our revolver capacity by $25 million to $125 million. This enhanced credit facility demonstrates our banking partners continued and growing confidence in HF Foods and provides us with additional financial flexibility to support our growth strategy and ongoing strategic transformation initiatives.

我們在二月宣布成功修改了與摩根大通銀行和聯信銀行的信用協議，歡迎富國銀行成為額外貸款人，並將我們的循環信貸額度增加 2,500 萬美元至 1.25 億美元。此項增強的信貸安排表明我們的銀行合作夥伴對 HF Foods 的信心持續增長，並為我們提供了額外的財務靈活性，以支持我們的成長策略和正在進行的策略轉型計劃。

The expansion of our banking relationships and increased revolver capacity position us well to capitalize on the favorable market trends and demographics driving the growing demand for Asian foods. As we continue executing our operational transformation plan and pursuing strategic growth opportunities, this increased financial flexibility will be instrumental in supporting our long-term objectives.

我們銀行關係的擴大和循環信用額度的提高使我們能夠充分利用有利的市場趨勢和人口統計數據，推動對亞洲食品的需求不斷增長。隨著我們繼續執行營運轉型計劃並尋求策略性成長機會，這種增強的財務靈活性將有助於支持我們的長期目標。

Before I hand this over to Cindy, I would like to mention our net income was adversely impacted by $46.3 million goodwill impairment charge. This is a function of an accounting requirement and not a reflection of our business performance and overall transformation plan. Now over to you, Cindy.

在我將這個交給辛蒂之前，我想提一下，我們的淨收入受到了 4,630 萬美元商譽減損費用的不利影響。這是會計要求的功能，並不反映我們的業務績效和整體轉型計劃。現在輪到你了，辛蒂。

Thanks, Felix. I will now review our results for the fourth quarter and full year ended December 31, 2024, versus the same period in 2023. Net revenue for the fourth quarter increased 8.7% to $305.3 million from $280.9 million in the prior year quarter. The increase was primarily attributable to volume growth associated with the new wholesale accounts, case count growth, product cost inflation, and improved pricing in certain categories.

謝謝，菲利克斯。我現在將回顧我們截至 2024 年 12 月 31 日的第四季度和全年業績以及 2023 年同期的業績。第四季淨收入從去年同期的 2.809 億美元成長 8.7% 至 3.053 億美元。成長主要歸因於新批發帳戶帶來的銷售成長、病例數量成長、產品成本上漲以及某些類別的價格上漲。

Gross profit was mainly flat, decreasing only by 0.2% to $52.2 million for the quarter compared to $52.3 million in the prior year quarter, and gross profit margin decreased to 17.1% from 18.6%. The decrease was primarily attributable to a write-off of aged trade accounts payable of approximately $1.1 million due to system implementation data cleansing and a decrease in margin on meat and poultry.

毛利基本持平，本季僅比去年同期的 5,230 萬美元下降 0.2% 至 5,220 萬美元，毛利率從 18.6% 下降至 17.1%。下降的主要原因是因係統實施資料清理而註銷了約110萬美元的應付貿易帳款，以及肉類和家禽利潤率下降。

It's important to reiterate that gross margins for wholesale sales are generally lower than those on retail sales due to the larger quantities purchased by wholesalers. While we expect the wholesale sales to continue to make up less than 5% of our revenue, we continue to see a slight uptick in wholesale mix in Q4 versus the prior year period. We see this trend continuing and that this will benefit the retail business in the long term as retail volume increases.

需要重申的是，由於批發商的購買數量較大，批發銷售的毛利率通常低於零售銷售的毛利率。雖然我們預計批發銷售額將繼續占我們收入的 5% 以下，但與去年同期相比，我們仍然看到第四季度的批發結構略有上升。我們認為這一趨勢將會持續下去，而且隨著零售量的增加，從長遠來看這將有利於零售業務。

Distribution, selling and administrative expenses increased to $48 million for the fourth quarter, primarily by increased professional fees, payroll severance expenses, and insurance costs. In addition, in 2023, our DSA was reduced by a settlement gain of $10 million. DSA expenses as a percentage of net sales increased to 15.7% from 14.6%.

第四季分銷、銷售和管理費用增加至 4,800 萬美元，主要由於專業費用、工資遣散費和保險費用的增加。此外，2023 年，我們的 DSA 減少了 1000 萬美元的和解收益。數位減影動脈造影費用佔淨銷售額的百分比從14.6%上升至15.7%。

As mentioned the last quarter, we identified strategic cost optimization opportunities across key spending categories. We realized some DSA benefit in Q4 through headcount reduction. We finalized our comprehensive plan to reduce cash DSA expenses by 3% to 5% by the end of 2025, while preserving our core growth initiatives.

正如上個季度所提到的，我們確定了關鍵支出類別的策略成本優化機會。我們在第四季透過裁員實現了一定的DSA收益。我們最終確定了全面計劃，到 2025 年底將現金 DSA 支出減少 3% 至 5%，同時保留我們的核心成長計劃。

Operating loss for the fourth quarter of 2024 was $42.2 million compared to operating income of $11.2 million in the prior year quarter. The decrease was driven by goodwill impairment charges of $46.3 million in Q4 2024 and a $10 million settlement gain in Q4 2023, which did not reoccur in 2024.

2024 年第四季的營業虧損為 4,220 萬美元，而去年同期的營業收入為 1,120 萬美元。下降的主要原因是 2024 年第四季的商譽減損費用為 4,630 萬美元，以及 2023 年第四季的 1,000 萬美元和解收益，但 2024 年沒有再次出現。

Total interest expense decreased slightly to $2.8 million for the fourth quarter compared to $3.1 million in the prior year quarter. Net loss of $43.9 million decreased compared to net income of $2.7 million for the prior year quarter. The decrease was driven primarily by the goodwill impairment charges of $46.3 million recognized during the fourth quarter of 2024.

第四季總利息支出略微下降至 280 萬美元，去年同期為 310 萬美元。淨虧損 4,390 萬美元，較去年同期的淨收入 270 萬美元有所下降。下降的主要原因是 2024 年第四季確認的 4,630 萬美元商譽減損費用。

Adjusted EBITDA increased to $14.5 million for the fourth quarter compared to $10.4 million in the prior year quarter is mainly due to removal of a settlement gain in 2023 and add-back of goodwill impairment in 2024. I will now turn to our results for the full year ended December 31, 2024, versus the same period in 2023.

第四季調整後 EBITDA 增至 1,450 萬美元，而去年同期為 1,040 萬美元，這主要歸因於取消了 2023 年的結算收益並加回了 2024 年的商譽減損。現在，我將介紹我們截至 2024 年 12 月 31 日的全年業績與 2023 年同期的業績對比。

Net revenue for the full year increased 4.6% to $1.2 billion from $1.1 billion in the prior year period. The increase was primarily attributable to volume growth associated with new wholesale accounts, case count growth, product cost inflation and improved pricing in certain categories, including seafood and meat and poultry, offset by the $13.3 million loss in revenue from the exit of our chicken processing businesses in 2023.

全年淨收入從去年同期的 11 億美元成長 4.6% 至 12 億美元。成長主要歸因於新批發帳戶帶來的銷售成長、病例數量成長、產品成本上漲以及海鮮、肉類和家禽等某些類別的價格上漲，但被 2023 年退出雞肉加工業務造成的 1,330 萬美元收入損失所抵消。

Gross profit increased by 0.6% to $205.2 million for the full year compared to $204 million in the prior year period. and gross profit margins decreased to 17.1% from 17.8%, mainly attributable to a write-off of aged trade accounts payable for approximately $1.4 million due to system implementation data cleansing in 2023.

全年毛利較去年同期的 2.04 億美元成長 0.6% 至 2.052 億美元。毛利率從 17.8% 降至 17.1%，主要由於 2023 年系統實施資料清理而註銷了約 140 萬美元的應付貿易帳款。

Distribution, selling and administrative expenses increased to $198 million for the full year, driven primarily by payroll severance expenses and insurance costs. In addition, in 2023, our DSA was reduced by a settlement gain of $10 million.

全年分銷、銷售和管理費用增加至 1.98 億美元，主要原因是工資遣散費和保險費用。此外，2023 年，我們的 DSA 減少了 1000 萬美元的和解收益。

DSA expenses as a percentage of net sales decreased to 16.5% from 17%. The operating loss for the full year was $39.1 million compared to income of $9 million in the prior year. The decrease was largely driven by a goodwill impairment charge in 2024.

數位減影動脈造影費用佔淨銷售額的百分比從17%下降到16.5%。全年營業虧損為 3,910 萬美元，而上年的收入為 900 萬美元。下降的主要原因是 2024 年的商譽減損費用。

Total interest expense was $11.4 million for the full year, in line with the prior year period. Net loss of $48.1 million compared to net loss of $2.7 million for the prior year period. The decrease was driven primarily by the goodwill impairment charges of $46.3 million recognized during the fourth quarter of 2024.

全年總利息支出為 1,140 萬美元，與去年同期持平。淨虧損為 4,810 萬美元，而去年同期淨虧損為 270 萬美元。下降的主要原因是 2024 年第四季確認的 4,630 萬美元商譽減損費用。

Adjusted EBITDA increased to $42 million for the full year compared to $34.6 million in the prior year period when adjusting for goodwill impairment and the settlement gain. As Felix mentioned, in February, we amended our credit agreement, increasing our revolver capacity by $25 million to $125 million. As of February 12, we had an available capacity of $36.1 million additional funds through our line of credit. Thank you, and back over to you, Felix.

經調整商譽減損及結算收益後，全年調整後 EBITDA 增至 4,200 萬美元，去年同期為 3,460 萬美元。正如 Felix 所提到的，我們在二月修改了信用協議，將循環信用額度提高了 2,500 萬美元，達到 1.25 億美元。截至 2 月 12 日，我們透過信用額度擁有 3,610 萬美元的額外資金可用。謝謝你，現在輪到你了，菲利克斯。

As we look ahead to 2025 and beyond, I want to emphasize our commitment to executing the comprehensive transformation initiatives that are reshaping HF Foods. 2025 is a year of strategic investment for HF. The investments we're making in our facilities, digital infrastructure, and operations are in the process of establishing a strong foundation for our next phase of growth.

展望 2025 年及以後，我想強調我們致力於執行重塑 HF Foods 的全面轉型計劃。 2025年是HF的戰略投資年。我們對設施、數位基礎設施和營運的投資正在為下一階段的成長奠定堅實的基礎。

While the broader market environment presents near-term challenges, we remain focused on our long-term vision, which is investing in capacity and capability to capture cross-selling related organic growth and complement it with strategic M&A.

雖然更廣泛的市場環境帶來了短期挑戰，但我們仍然專注於我們的長期願景，即投資產能和能力，以獲取交叉銷售相關的有機成長，並透過策略併購進行補充。

The fundamental drivers of our business, which are growing demand for authentic Asian cuisine and our unique position as a nationwide specialty distributor remains strong. We are methodically building the infrastructure, systems and capabilities needed to fully capitalize on these opportunities.

我們業務的基本驅動力是對正宗亞洲美食日益增長的需求，以及我們作為全國特色美食經銷商的獨特地位仍然強勁。我們正在有條不紊地建立充分利用這些機會所需的基礎設施、系統和能力。

As we move forward, we'll continue to identify and implement additional efficiency measures while maintaining our commitment to service excellence and sustainable growth. Thank you for your continued support as we execute our strategic transformation. We look forward to sharing our progress with you on our next call.

隨著我們繼續前進，我們將繼續確定和實施額外的效率措施，同時保持對卓越服務和永續成長的承諾。感謝您在我們實施策略轉型期間給予的持續支持。我們期待在下次通話中與您分享我們的進展。