HF Foods Q3 loss widens to $4.2M as revenue grows
Nine-month operating cash flow was $24.1 million, and September 30 cash was $16.4 million, with approximately $49.1 million available under the credit line.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Form Type
8-K
Rhea-AI Filing Summary
HF Foods Group Inc. reported third-quarter revenue of $319.6 million, up 4.1%, and gross profit of $53.4 million, up 5.9% year over year. Seafood volume growth and Produce and Commodity pricing supported revenue, partly offset by lower Meat & Poultry prices. Searay Foods, acquired effective August 31, 2026, contributed $4.2 million of revenue and approximately $0.6 million of Adjusted EBITDA for one month.
GAAP net loss widened to $4.2 million from $0.9 million. Distribution, selling and administrative expenses rose 11.9% to $55.2 million, while gross profit increased $3.0 million. Adjusted net income fell 52.1% to $2.1 million, and Adjusted EBITDA declined 6.3% to $11.0 million.
For the first nine months, operating cash flow was $24.1 million, versus $4.5 million a year earlier, which the company attributed mainly to better inventory management. At September 30, 2026, cash was $16.4 million, with approximately $49.1 million in additional funds available under its $140.0 million line of credit, subject to a borrowing base calculation.
3 points · 0 major0 major · 3 points
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointGross profit increased 5.9% to $53.4 million in the third quarter.
- Moderate pointNine-month operating cash flow increased to $24.1 million from $4.5 million.
- Minor pointSearay contributed $4.2 million in revenue and approximately $0.6 million in Adjusted EBITDA.
Negative
- Moderate pointThird-quarter GAAP net loss increased 385.9% to $4.2 million.
- Moderate pointAdjusted net income fell 52.1% to $2.1 million.
- Moderate pointAdjusted EBITDA declined 6.3% to $11.0 million.
Filing Explained
At September 30, revolving borrowings were 80,021 thousand dollars, above 55,799 thousand dollars at December 31, 2025.
This Form 8-K furnishes HF Foods’ third-quarter results; its balance sheet shows
For the nine months ended
8-K Event Classification
2 items: 2.02, 9.01
2 items
Item 2.02
Results of Operations and Financial Condition
Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, or exhibit attachments filed with this report.
Key Figures
Third-quarter net revenue: $319.6 million
Third-quarter gross profit: $53.4 million
Third-quarter net loss: $4.2 million
+5 more
8 metrics
Third-quarter net revenue
$319.6 million
Three months ended September 30, 2026; increased 4.1% year over year
Third-quarter gross profit
$53.4 million
Three months ended September 30, 2026; increased 5.9% year over year
Third-quarter net loss
$4.2 million
Three months ended September 30, 2026; increased 385.9% year over year
Adjusted net income
$2.1 million
Three months ended September 30, 2026; decreased 52.1% year over year
Adjusted EBITDA
$11.0 million
Three months ended September 30, 2026; decreased 6.3% year over year
Operating cash flow
$24.1 million
Nine months ended September 30, 2026; compared with $4.5 million in the prior-year period
Cash
$16.4 million
As of September 30, 2026
Additional funds available
Approximately $49.1 million
Through the $140.0 million line of credit, subject to a borrowing base calculation, as of September 30, 2026
Key Terms
Adjusted EBITDA, borrowing base calculation, interest rate swap contracts, employee retention credit
4 terms
Adjusted EBITDA financial
"Adjusted EBITDA is defined as net income (loss) before interest expense"
Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.
borrowing base calculation financial
"subject to a borrowing base calculation"
interest rate swap contracts financial
"Change in fair value of interest rate swap contracts"
A contract where two parties agree to exchange streams of interest payments so one side takes a fixed rate and the other a variable rate tied to market interest levels; no loan principal changes hands, just the differing payment amounts. Investors care because swaps let companies and funds manage interest-rate risk or speculate on rate moves—like trading a variable mortgage for a fixed one—to stabilize borrowing costs or alter portfolio sensitivity to rising or falling rates.
employee retention credit financial
"recognition of employee retention credit of $1.8 million"
A government-provided payroll tax credit that reimburses employers for a portion of wages paid to staff during qualifying downturns or disruptions, designed to encourage businesses to keep employees on the payroll. For investors, it matters because the credit improves a company’s cash flow and reduces payroll expenses—like a temporary government subsidy that boosts short-term profits and may change the company’s reported tax liabilities and cash reserves, which can affect valuation and risk assessments.
Earnings Snapshot
Net revenue: $319.6 million
Third quarter ended September 30, 2026
Net revenue
$319.6 million
increased 4.1%
GAAP net loss
$4.2 million
increased 385.9%
Adjusted net income
$2.1 million
decreased 52.1%
Adjusted EBITDA
$11.0 million
decreased 6.3%
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What did Searay add to HFFG's third-quarter results?
Searay Foods contributed $4.2 million in revenue and approximately $0.6 million in Adjusted EBITDA for one month after its acquisition became effective August 31, 2026. HF Foods described the acquisition as its first expansion outside the United States.
How much liquidity did HFFG report at September 30, 2026?
HF Foods reported $16.4 million in cash and approximately $49.1 million in additional funds through its $140.0 million line of credit, subject to a borrowing base calculation. Checks issued but not presented for payment were $5.3 million.
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 9, 2026
(Exact name of registrant as specified in its charter)
State or other Jurisdiction of incorporation ) | (Commission File No.) | (IRS Employer Identification No) | ||||||
(Address of principal executive offices) | (Zip Code) | ||||
Registrant’s telephone number, including area code: (888 )-905-0998
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition.
On November 9, 2026 , HF Foods Group Inc. (the “Company”) announced its financial results for quarter ended September 30, 2026 in a press release. The full text of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K (this “Current Report”).
In accordance with General Instruction B.2 of Form 8-K, the information furnished under Item 2.02 of this Current Report (including Exhibit 99.1) is deemed to be “furnished” and shall not be deemed “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, nor shall such information be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
Exhibit No. | Description of Exhibits | |||||||
99.1 | Company press release dated November 9, 2026 | |||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |||||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| HF FOODS GROUP INC. | ||||||||
Date: | /s/ Paul McGarry | |||||||
| Paul McGarry | ||||||||
| Chief Financial Officer | ||||||||
Exhibit 99.1
HF Foods Reports Third Quarter 2026 Financial Results
Net Revenue increased 4.1% to $319.6 million
GAAP Net loss increased 385.9% to $4.2 million
Adjusted Net Income decreased 52.1% to $2.1 million
Adjusted EBITDA decreased 6.3% to $11.0 million
Las Vegas, NV – November 9, 2026 – HF Foods Group Inc. (NASDAQ: HFFG) (“HF Foods” or the “Company”), a leading distributor of international foodservice solutions to Asian restaurants and other businesses across the United States and Canada, today announced results for the third quarter ended September 30, 2026.
Third Quarter 2026 Financial Results
(In thousands, except per share amounts) | Three Months Ended September 30, 2026 | Change over Prior Year | Nine Months Ended September 30, 2026 | Change over Prior Year | |||||||||||||||||||
| GAAP Measures | |||||||||||||||||||||||
| Net revenue | $ | 319,575 | $ | 12,597 | $ | 955,358 | $ | 35,099 | |||||||||||||||
| Gross profit | $ | 53,391 | $ | 2,982 | $ | 158,965 | $ | 2,465 | |||||||||||||||
| Net loss | $ | (4,247) | $ | (3,373) | $ | (270) | $ | 1,624 | |||||||||||||||
| Loss per share | $ | (0.08) | $ | (0.06) | $ | (0.01) | $ | 0.02 | |||||||||||||||
| Non-GAAP Measures | |||||||||||||||||||||||
Adjusted EBITDA(1) | $ | 11,008 | $ | (740) | $ | 34,723 | $ | (643) | |||||||||||||||
Adjusted net income(2) | $ | 2,083 | $ | (2,262) | $ | 11,883 | $ | (2,321) | |||||||||||||||
Adjusted diluted earnings per share(2) | $ | 0.04 | $ | (0.04) | $ | 0.22 | $ | (0.05) | |||||||||||||||
________________
(1) Adjusted EBITDA is defined as net income (loss) before interest expense, interest income, income taxes and depreciation and amortization, further adjusted to exclude certain unusual, non-cash, or non-recurring expenses.
(2) Adjusted net income and adjusted earnings per share are based on net income attributable to HF Foods Group Inc.
Management Commentary
“Our third quarter results reflect solid top line growth, marking our seventh consecutive quarter of year-over-year net revenue growth, even as industry-wide fuel costs continued to weigh on operating expenses,” said Felix Lin, President and Chief Executive Officer of HF Foods. “We are actively managing through this pressure by taking actions to mitigate the impact, and the efficiency programs built through our transformation continue to help offset higher costs. We also completed our acquisition of Searay Foods during the quarter, our first expansion outside the United States, and integration is progressing well. With the foundation of our transformation largely built, we are focused on route and warehouse efficiency, purchasing discipline and cross-selling across the Southeast and Midwest. We are confident in our ability to turn near-term cost pressure into long-term value for our shareholders as we strengthen our position as the leading nationwide Asian specialty food distributor.”
Third Quarter 2026 Results
Net revenue was $319.6 million for the third quarter of 2026 compared to $307.0 million in the prior year period, an increase of $12.6 million, or 4.1%. The increase was primarily attributable to volume growth in Seafood and pricing improvement in Produce and Commodity, partially offset by price decreases in Meat & Poultry. Net revenue also included $4.2 million from Searay Foods following the completion of its acquisition effective August 31, 2026, reflecting 1 month of contribution during the quarter.
Gross profit was $53.4 million for the quarter, compared to $50.4 million in the prior year period, an increase of $3.0 million, or 5.9%. The increase was primarily driven by volume growth in Seafood, incremental margin gained from Searay and IEEPA tariff refunds received during the quarter. Gross profit margin increased to 16.7% compared to 16.4% in the prior year period.
Distribution, selling and administrative expenses increased by $5.9 million, or 11.9%, compared to the prior year period, primarily driven by professional services related to the non-recurring events including amendment and increase of our revolving credit facility, the refinancing of our property portfolio, acquisition of Searay Foods and other legal expenses and an increase in auto & truck expenses reflecting elevated fuel costs and truck lease expense, partially offset by a decrease of repair & maintenance costs due to the investments into upgrading our fleet. Distribution, selling and administrative expenses as a percentage of net revenue increased to 17.3% compared to 16.1% in the prior year period.
Net loss was $4.2 million compared to a net loss of $0.9 million in the prior year period. The increase in net loss was primarily driven by a $2.9 million decrease in income from operations, reflecting margin growth of $3.0 million offset by the $5.9 million increase in distribution, selling and administrative expenses. Other expense (income) reduced by $0.5 million driven by a positive change in fair value of interest rate swap contracts of $0.9 million partially offset by higher interest expense. Income tax benefit reduced by $0.9 million compared to same period last year.
Adjusted EBITDA decreased 6.3% to $11.0 million compared to $11.7 million in the prior year period, which was mainly due to the increase in net loss and various other items noted in the Adjusted EBITDA table included in “Appendix A - Non-GAAP Financial Measures” of this earnings release. Searay contributed approximately $0.6 million of Adjusted EBITDA reflecting 1 month of contribution for the quarter following the completion of the acquisition on August 31, 2026.
Nine Months 2026 Results
Net revenue was $955.4 million for the nine months ended September 30, 2026, compared to $920.3 million in the prior year period, an increase of $35.1 million, or 3.8%. The increase was primarily due to volume growth and pricing improvement in Seafood and pricing improvement in Commodity and Produce, partially offset by price decreases in Meat & Poultry. Net revenue for the nine months ended September 30, 2026 includes $4.2 million from Searay, which was acquired on August 31, 2026.
Gross profit slightly increased by 1.6% to $159.0 million, compared to $156.5 million in the prior year period. Margin increase included IEEPA tariff refunds received during the period and incremental margin gained from newly acquired Searay. Gross profit margin decreased to 16.6% compared to 17.0% in the prior year period.
Distribution, selling and administrative expenses increased by $6.8 million, or 4.5% to $156.9 million, compared to the prior year period, mainly due to increases in auto & truck expense reflecting elevated fuel costs partially offset by repair & maintenance savings from investments in upgrading our fleet, non-recurring professional services related to the renewal and upsizing of our revolver facility, refinancing of our property portfolio and the acquisition of Searay Foods, and depreciation expenses. Distribution, selling and administrative expenses as a percentage of net revenue increased slightly to 16.4% compared to 16.3% in the prior year period.
Net loss was $0.3 million compared to a net loss of $1.9 million in the prior year period. The improvement was primarily attributable to a favorable year-over-year change in fair value of interest rate swap of $4.4 million, the recognition of employee retention credit of $1.8 million, including interest, and a gain from the Utah building sale of $1.4 million. These favorable variances were partially offset by a $4.3 million decrease in operating income and a $1.2 million unfavorable change in income taxes.
Adjusted EBITDA decreased 1.8% to $34.7 million compared to $35.4 million in the prior year period, which was due to various items noted in the Adjusted EBITDA table included in “Appendix A - Non-GAAP Financial Measures” of this earnings release.
Cash Flow and Liquidity
Cash provided by operating activities was $24.1 million for the nine months ended September 30, 2026, compared to cash provided by operating activities of $4.5 million in the prior year period. Net cash provided by operating activities increased by $19.6 million mainly driven by better inventory management. Net cash provided by financing activities also increased by $40.1 million as a result of refinancing. The cash generated through operating and financing activities were mainly used for Capital Expenditure and acquisition. As of September 30, 2026, the Company had cash of $16.4 million, checks issued not presented for payment of $5.3 million and access to approximately $49.1 million in additional funds through the $140.0 million line of credit, subject to a borrowing base calculation. The Company has funded working capital and other capital requirements primarily by cash flow from operations and bank loans, including lines of credit. Cash is required to pay purchase costs for inventory, salaries, fuel and trucking expenses, selling expenses, rental expenses, income taxes, other operating expenses and to service debts.
Earnings Call and Webcast
HF Foods’ management team will host a live conference call to discuss its financial results today at 1:30 p.m. PT (4:30 p.m. ET). The link to the webcast will be available on the “Events” section of the Company’s Investor Relations website at https://investors.hffoodsgroup.com. Those interested in participating in the live call can dial 1-877-407-0752 or 1-201-389-0912. The webcast will be archived and available for replay.
About HF Foods Group Inc.
HF Foods Group Inc. is a leading marketer and distributor of fresh produce, frozen and dry food, and non-food products to primarily Asian restaurants and other foodservice customers throughout the United States and Canada through the acquisition of Searay. HF Foods aims to supply the increasing demand for Asian American restaurant cuisine, leveraging its nationwide network of distribution centers and its strong relations with growers and suppliers of fresh, high-quality specialty restaurant food products and supplies in the US and Asia. References to Searay includes Searay Foods Inc., Morgan Foods and, the U.S. inventory and customer contracts of an affiliate, Searay Foods USA Inc.. HF Foods, headquartered in Las Vegas, Nevada, trades on Nasdaq under the symbol “HFFG”. For more information, please visit www.hffoodsgroup.com.
Contact:
ICR
Anna Kate Heller
hffoodsgroup@icrinc.com
Forward-Looking Statements
All statements in this news release other than statements of historical facts are, or may be deemed to be, “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and contain our current expectations about our future results. We have attempted to identify any forward-looking statements by using words such as “aims,” “continues,” “expects,” “plans,” “will,” 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, risks relating to our ability to consummate our operational transformation plan as anticipated, risks relating to the impact of our operational plan on our sales and efficiencies, risks relating to the impact of demographic trends on demand for the products we distribute, risks related to potential increases in tariff-related costs, risks related to the integration of Searay and the realization of anticipated benefits, synergies and
margin accretion from the acquisition, risks related to the Company’s expansion into international markets, including Canada, and other risks associated with cross-border operations, statements of assumption underlying any of the foregoing, and other factors including those disclosed under the caption “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025 and other filings with the Securities and Exchange Commission (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.
HF FOODS GROUP INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
| September 30, 2026 | December 31, 2025 | ||||||||||
| ASSETS | |||||||||||
| CURRENT ASSETS: | |||||||||||
| Cash | $ | 16,444 | $ | 8,641 | |||||||
| Accounts receivable, net | 68,511 | 66,237 | |||||||||
| Inventories | 134,864 | 106,629 | |||||||||
| Prepaid expenses and other current assets | 11,297 | 9,725 | |||||||||
| Assets held for sale | — | 2,768 | |||||||||
| TOTAL CURRENT ASSETS | 231,116 | 194,000 | |||||||||
| Property and equipment, net | 177,949 | 163,397 | |||||||||
| Operating lease right-of-use assets | 26,298 | 26,049 | |||||||||
| Long-term investments | 2,139 | 2,144 | |||||||||
| Customer relationships, net | 137,710 | 126,048 | |||||||||
| Trademarks, trade names and other intangibles, net | 24,453 | 25,440 | |||||||||
| Goodwill | 13,219 | — | |||||||||
| Other long-term assets | 4,518 | 4,451 | |||||||||
| TOTAL ASSETS | $ | 617,402 | $ | 541,529 | |||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||
| CURRENT LIABILITIES: | |||||||||||
| Checks issued not presented for payment | $ | 5,275 | $ | 1,674 | |||||||
| Line of credit | 80,021 | 55,799 | |||||||||
| Accounts payable | 85,370 | 74,859 | |||||||||
| Current portion of long-term debt, net | 13,395 | 6,683 | |||||||||
| Current portion of obligations under finance leases | 6,733 | 6,425 | |||||||||
| Current portion of obligations under operating leases | 3,123 | 4,334 | |||||||||
| Accrued expenses and other liabilities | 17,198 | 14,994 | |||||||||
| TOTAL CURRENT LIABILITIES | 211,115 | 164,768 | |||||||||
| Long-term debt, net of current portion | 118,130 | 99,436 | |||||||||
| Obligations under finance leases, non-current | 22,102 | 25,279 | |||||||||
| Obligations under operating leases, non-current | 26,744 | 22,990 | |||||||||
| Deferred tax liabilities | 29,674 | 23,808 | |||||||||
| Other long-term liabilities | 6,587 | 1,662 | |||||||||
| TOTAL LIABILITIES | 414,352 | 337,943 | |||||||||
| Commitments and contingencies | |||||||||||
| SHAREHOLDERS’ EQUITY: | |||||||||||
Preferred stock | — | — | |||||||||
Common stock | 5 | 5 | |||||||||
| Treasury stock | (6,099) | (7,750) | |||||||||
| Additional paid-in capital | 605,957 | 605,838 | |||||||||
| Accumulated deficit | (396,459) | (396,042) | |||||||||
| Accumulated other comprehensive loss | (1,376) | — | |||||||||
| TOTAL SHAREHOLDERS’ EQUITY ATTRIBUTABLE TO HF FOODS GROUP INC. | 202,028 | 202,051 | |||||||||
| Noncontrolling interests | 1,022 | 1,535 | |||||||||
| TOTAL SHAREHOLDERS’ EQUITY | 203,050 | 203,586 | |||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 617,402 | $ | 541,529 | |||||||
HF FOODS GROUP INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(In thousands, except share and per share data)
(Unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Net revenue | $ | 319,575 | $ | 306,978 | $ | 955,358 | $ | 920,259 | ||||||||||||||||||
| Cost of revenue | 266,184 | 256,569 | 796,393 | 763,759 | ||||||||||||||||||||||
| Gross profit | 53,391 | 50,409 | 158,965 | 156,500 | ||||||||||||||||||||||
| Distribution, selling and administrative expenses | 55,174 | 49,289 | 156,894 | 150,107 | ||||||||||||||||||||||
| Income (loss) from operations | (1,783) | 1,120 | 2,071 | 6,393 | ||||||||||||||||||||||
| Other expenses (income): | ||||||||||||||||||||||||||
| Interest expense | 3,430 | 2,941 | 9,158 | 8,367 | ||||||||||||||||||||||
Other income, net | (243) | (234) | (4,343) | (825) | ||||||||||||||||||||||
| Change in fair value of interest rate swap contracts | (897) | 47 | (2,469) | 1,916 | ||||||||||||||||||||||
| Total other expenses (income), net | 2,290 | 2,754 | 2,346 | 9,458 | ||||||||||||||||||||||
| Loss before income taxes | (4,073) | (1,634) | (275) | (3,065) | ||||||||||||||||||||||
| Provision (benefit) for income taxes | 174 | (760) | (5) | (1,171) | ||||||||||||||||||||||
| Net loss | (4,247) | (874) | (270) | (1,894) | ||||||||||||||||||||||
| Less: net income (loss) attributable to noncontrolling interests | (25) | 242 | 147 | (349) | ||||||||||||||||||||||
| Net loss attributable to HF Foods Group Inc. | $ | (4,222) | $ | (1,116) | $ | (417) | $ | (1,545) | ||||||||||||||||||
| Loss per common share - basic | $ | (0.08) | $ | (0.02) | $ | (0.01) | $ | (0.03) | ||||||||||||||||||
| Loss per common share - diluted | $ | (0.08) | $ | (0.02) | $ | (0.01) | $ | (0.03) | ||||||||||||||||||
| Weighted average shares - basic | 53,900,945 | 53,031,801 | 53,321,163 | 52,913,907 | ||||||||||||||||||||||
| Weighted average shares - diluted | 53,900,945 | 53,031,801 | 53,321,163 | 52,913,907 | ||||||||||||||||||||||
HF FOODS GROUP INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
| Nine Months Ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Net loss | $ | (270) | $ | (1,894) | |||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization expense | 22,575 | 21,269 | |||||||||
| Gain from disposal of property and equipment | (1,373) | — | |||||||||
| Provision (credit) for expected credit losses | 25 | (357) | |||||||||
Deferred tax benefit | (214) | (2,856) | |||||||||
| Change in fair value of interest rate swap contracts | (2,189) | 1,916 | |||||||||
| Stock-based compensation | 1,747 | 1,618 | |||||||||
| Non-cash lease expense | 4,320 | 3,745 | |||||||||
Other non-cash expense (income) | 470 | (548) | |||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Accounts receivable | 3,581 | 939 | |||||||||
| Accounts receivable - related parties | (349) | (367) | |||||||||
| Inventories | (16,954) | (37,713) | |||||||||
| Prepaid expenses and other current assets | (811) | 5,091 | |||||||||
| Other long-term assets | 145 | 682 | |||||||||
| Checks issued not presented for payment | 3,601 | (3,561) | |||||||||
| Accounts payable | 9,686 | 21,820 | |||||||||
| Accounts payable - related parties | 126 | 511 | |||||||||
| Operating lease liabilities | (2,024) | (2,905) | |||||||||
| Accrued expenses and other liabilities | 2,036 | (2,907) | |||||||||
| Net cash provided by operating activities | 24,128 | 4,483 | |||||||||
| Cash flows from investing activities: | |||||||||||
| Purchase of property and equipment | (22,335) | (10,014) | |||||||||
| Proceeds from sale of property and equipment | 4,260 | 152 | |||||||||
| Acquisition of business, net of cash acquired | (41,770) | — | |||||||||
| Settlement of interest rate swap contracts | 279 | — | |||||||||
| Net cash used in investing activities | (59,566) | (9,862) | |||||||||
| Cash flows from financing activities: | |||||||||||
| Payments for tax withholding related to vested stock awards | (77) | (156) | |||||||||
| Proceeds from line of credit | 1,246,442 | 1,033,577 | |||||||||
| Repayment of line of credit | (1,221,952) | (1,023,791) | |||||||||
Proceeds from issuance of debt | 43,536 | 3,275 | |||||||||
| Repayment of long-term debt | (17,591) | (4,776) | |||||||||
| Payment of debt financing costs | (1,124) | (213) | |||||||||
| Repayment of obligations under finance leases | (5,323) | (4,676) | |||||||||
Proceeds from ATM sale | 275 | — | |||||||||
Acquisition of noncontrolling interests | (835) | — | |||||||||
| Net cash provided by financing activities | 43,351 | 3,240 | |||||||||
| Effect of exchange rate changes on cash | (110) | — | |||||||||
| Net increase (decrease) in cash | 7,803 | (2,139) | |||||||||
| Cash at beginning of the period | 8,641 | 14,467 | |||||||||
| Cash at end of the period | $ | 16,444 | $ | 12,328 | |||||||
Appendix A
Non-GAAP Financial Measures
Three and Nine Months Ended September 30, 2026 and 2025
(Unaudited)
Discussion of our financial results includes certain non-GAAP financial measures, including EBITDA, Adjusted EBITDA, non-GAAP net income (loss) attributable to HF Foods Group Inc. and non-GAAP EPS (“earnings (loss) per share”), that we believe provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial performance with other companies in the same industry, many of which present similar non-GAAP financial measures to investors. The definitions of EBITDA, Adjusted EBITDA, non-GAAP net income (loss) attributable to HF Foods Group Inc. and non-GAAP EPS may not be the same as similarly titled measures used by other companies in the industry. EBITDA, Adjusted EBITDA, non-GAAP net income (loss) attributable to HF Foods Group Inc. and non-GAAP EPS are not defined under GAAP and are subject to important limitations as analytical tools and should not be considered in isolation or as substitutes for analysis of our financial results as reported under GAAP.
We use non-GAAP financial measures to supplement our GAAP financial results. Management uses EBITDA, defined as net income (loss) before interest expense, interest income, income taxes, and depreciation and amortization to measure operating performance. In addition, management uses Adjusted EBITDA, defined as net income (loss) before interest expense, interest income, income taxes, and depreciation and amortization, further adjusted to exclude certain unusual, non-cash, or non-recurring expenses. We believe that Adjusted EBITDA is less susceptible to variances in actual performance resulting from non-recurring expenses, and other non-cash charges, provides useful information for our investors and is more reflective of other factors that affect our operating performance.
We believe non-GAAP net income (loss) attributable to HF Foods Group Inc. and non-GAAP EPS are useful measures of operating performance because these measures exclude certain items not reflective of our core operating performance. Non-GAAP net income (loss) attributable to HF Foods Group Inc. is defined as net income (loss) attributable to HF Foods Group Inc. adjusted for amortization of intangibles, change in fair value of interest rate swaps, stock based compensation, transaction related costs, transformational project costs and certain unusual, non-cash, or non-recurring expenses. We believe that non-GAAP net income (loss) attributable to HF Foods Group Inc. and non-GAAP EPS facilitates period-over-period comparisons and provides additional clarity for investors to better evaluate our operating results. We present EBITDA, Adjusted EBITDA, non-GAAP net income (loss) attributable to HF Foods Group Inc. and non-GAAP EPS in order to provide supplemental information that we consider relevant for the readers of our consolidated financial statements included elsewhere in its reports filed with the SEC, including its most recent Annual Report on Form 10-K, and such information is not meant to replace or supersede U.S. GAAP measures. Reconciliations of the non-GAAP financial measures to their most comparable GAAP financial measures are included in the schedules attached to this press release.
HF FOODS GROUP INC. AND SUBSIDIARIES
RECONCILIATION OF NET LOSS TO EBITDA AND ADJUSTED EBITDA
(In thousands)
(Unaudited)
| Three Months Ended September 30, | ||||||||||||||||||||
| 2026 | 2025 | Change | ||||||||||||||||||
| Net loss | $ | (4,247) | $ | (874) | $ | (3,373) | ||||||||||||||
| Interest expense, net | 3,375 | 2,947 | 428 | |||||||||||||||||
| Income tax expense | 174 | (760) | 934 | |||||||||||||||||
| Depreciation and amortization | 7,594 | 7,250 | 344 | |||||||||||||||||
| EBITDA | 6,896 | 8,563 | (1,667) | |||||||||||||||||
| Change in fair value of interest rate swap contracts | (897) | 47 | (944) | |||||||||||||||||
| Stock-based compensation expense | 855 | 619 | 236 | |||||||||||||||||
Business transformation costs(1) | 454 | 1,592 | (1,138) | |||||||||||||||||
Other non-routine expense(2) | 3,656 | 339 | 3,317 | |||||||||||||||||
Executive transition and organizational redesign(3) | 44 | 588 | (544) | |||||||||||||||||
| Adjusted EBITDA | $ | 11,008 | $ | 11,748 | $ | (740) | ||||||||||||||
| Nine Months Ended September 30, | ||||||||||||||||||||
| 2026 | 2025 | Change | ||||||||||||||||||
| Net loss | $ | (270) | $ | (1,894) | $ | 1,624 | ||||||||||||||
| Interest expense, net | 8,403 | 8,331 | 72 | |||||||||||||||||
| Income tax (benefit) expense | (5) | (1,171) | 1,166 | |||||||||||||||||
| Depreciation and amortization | 22,575 | 21,269 | 1,306 | |||||||||||||||||
| EBITDA | 30,703 | 26,535 | 4,168 | |||||||||||||||||
| Change in fair value of interest rate swap contracts | (2,469) | 1,916 | (4,385) | |||||||||||||||||
| Stock-based compensation expense | 1,747 | 1,618 | 129 | |||||||||||||||||
Business transformation costs(1) | 957 | 2,458 | (1,501) | |||||||||||||||||
Other non-routine expense(2) | 3,213 | 449 | 2,764 | |||||||||||||||||
Executive transition and organizational redesign(3) | 572 | 2,390 | (1,818) | |||||||||||||||||
| Adjusted EBITDA | $ | 34,723 | $ | 35,366 | $ | (643) | ||||||||||||||
________________
(1) Represents costs associated with the launch and continued implementation of strategic projects including supply chain management improvements and technology infrastructure initiatives.
(2) Includes legal and consulting costs related to various corporate projects and other strategic initiatives. For the nine months ended September 30, 2026, it also includes the gain on the sale of the Utah building.
(3) Includes severance and related expenses for the Company’s transition of executive officers and organizational redesign.
HF FOODS GROUP INC. AND SUBSIDIARIES
RECONCILIATION OF NET LOSS ATTRIBUTABLE TO HF FOODS GROUP INC.
TO NON-GAAP NET INCOME AND NON-GAAP EPS ATTRIBUTABLE TO HF FOODS GROUP INC.
(In thousands, except per share amounts)
(Unaudited)
The following tables present our non-GAAP net income (loss) and non-GAAP EPS for the three and nine months ended September 30, 2026 and 2025 respectively, as well as reconciliations of each measure to their nearest GAAP equivalents:
| Three Months Ended September 30, | ||||||||||||||||||||
| 2026 | 2025 | Change | ||||||||||||||||||
| Net loss attributable to HF Foods Group Inc. | $ | (4,222) | $ | (1,116) | $ | (3,106) | ||||||||||||||
| Amortization of intangibles and deferred financing costs | 3,993 | 4,001 | (8) | |||||||||||||||||
| Change in fair value of interest rate swaps | (897) | 47 | (944) | |||||||||||||||||
| Stock-based compensation expense | 855 | 619 | 236 | |||||||||||||||||
Business transformation costs (1) | 454 | 1,592 | (1,138) | |||||||||||||||||
Other non-routine expense (2) | 3,656 | 339 | 3,317 | |||||||||||||||||
Executive transition and organizational redesign (3) | 44 | 588 | (544) | |||||||||||||||||
Aggregate adjustment for income taxes (4) | (1,800) | (1,725) | (75) | |||||||||||||||||
| Non-GAAP net income (loss) attributable to HF Foods Group Inc. | $ | 2,083 | $ | 4,345 | $ | (2,262) | ||||||||||||||
| GAAP diluted loss per common share attributable to HF Foods | $ | (0.08) | $ | (0.02) | $ | (0.06) | ||||||||||||||
EPS difference (5) | 0.12 | 0.10 | 0.02 | |||||||||||||||||
Non-GAAP diluted earnings (loss) per common share attributable to HF Foods (5) | $ | 0.04 | $ | 0.08 | $ | (0.04) | ||||||||||||||
Non-GAAP diluted weighted average number of shares (in thousands) (5) | 54,451 | 53,387 | ||||||||||||||||||
| Nine Months Ended September 30, | ||||||||||||||||||||
| 2026 | 2025 | Change | ||||||||||||||||||
| Net loss attributable to HF Foods Group Inc. | $ | (417) | $ | (1,545) | $ | 1,128 | ||||||||||||||
| Amortization of intangibles and deferred financing costs | 11,973 | 11,891 | 82 | |||||||||||||||||
| Change in fair value of interest rate swaps | (2,469) | 1,916 | (4,385) | |||||||||||||||||
| Stock-based compensation expense | 1,747 | 1,618 | 129 | |||||||||||||||||
Business transformation costs (1) | 957 | 2,458 | (1,501) | |||||||||||||||||
Other non-routine expense (2) | 3,213 | 449 | 2,764 | |||||||||||||||||
Executive transition and organizational redesign (3) | 572 | 2,390 | (1,818) | |||||||||||||||||
Aggregate adjustment for income taxes (4) | (3,693) | (4,973) | 1,280 | |||||||||||||||||
| Non-GAAP net income attributable to HF Foods Group Inc. | $ | 11,883 | $ | 14,204 | $ | (2,321) | ||||||||||||||
| GAAP diluted earnings (loss) per common share attributable to HF Foods | $ | (0.01) | $ | (0.03) | $ | 0.02 | ||||||||||||||
EPS difference (5) | 0.23 | 0.30 | (0.07) | |||||||||||||||||
Non-GAAP diluted earnings per common share attributable to HF Foods (5) | $ | 0.22 | $ | 0.27 | $ | (0.05) | ||||||||||||||
Non-GAAP diluted weighted average number of shares (in thousands) (5) | 53,850 | 53,290 | ||||||||||||||||||
________________
(1) Represents costs associated with the launch and continued implementation of strategic projects including supply chain management improvements and technology infrastructure initiatives.
(2) Includes legal and consulting costs related to various corporate projects and other strategic initiatives. For the nine months ended September 30, 2026, it also includes the gain on the sale of the Utah building.
(3) Includes severance and related expenses for the Company’s transition of executive officers and organizational redesign.
(4) Represents the income tax impact of non-GAAP adjustments, calculated using a normalized annual effective tax rate of 24% applied to adjusted pre-tax earnings for the third quarters of 2026 and 2025, excluding permanent items.
(5) EPS difference and diluted non-GAAP earnings per share are calculated by dividing our non-GAAP net income attributable to HF Foods by our non-GAAP diluted weighted average number of shares.