BRFH - Earnings call 2 2022 | Barfresh Food Group, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good afternoon, everyone, and thank you for participating on today's Second Quarter 2022 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.

The discussion today will include forward-looking statements. Except 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 relationship and projections of future financial performance. continue, identified anticipate, use plan, such intend, potential, and are as words should, words statements and forward-looking forecast expand, predict statements. are grow, estimate, project, identify and forward-looking similar by variations intended of the such hypothetical, will expressions These and may, to of such could, believe, expect,

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

on Securities the publicly cautioned or Exchange after The whether be which any result undue forward-looking current place new not factors speak events, on XX-K company disclaims Furthermore, cautionary to information, therein. conjunction and X-K, its assumptions a quarterly are with otherwise. update the statements are the Form in in report Form reports contents considered including any and filings current they on reliance and as these the only any warnings, this Commission, recent risk on and changes Form of XX-Q investors Accordingly, statements reports expressly future call, of forward-looking with to this intention should contained as date made. statements, call company's annual the including

measures, issued company including most to order certain is table of the The costs, to release which measures. are stock reconciled the in GAAP performance, nonoperational are the company's the non-GAAP services stock such items associated to is also company's with the adjusted Management information compensation, the including other believes directly understanding In those comparable derivatives it adjusted the presenting in loss and business recent and update reconciling noncash or of company's aid EBITDA, business in the on business. for gain EBITDA costs, provides the as of NASDAQ of because the nonrecurring the sale uplift. or reflective period-to-period performance that core investor useful

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

Riccardo Delle Coste

$X.X earnings supply for to with immediate pressures Good impacting this our fiscal despite all afternoon, year-over-year for I'm second second the everyone, quarter year. and well the to significant chain pleased increased thank ability orders. quarter our XXX% first XXXX as issues half call. us in you of fulfill joining Revenue continued as very million cost

entered we revenue uptick as products growth the the our single-serve success by by an education Go selling with was & Twist summer season. our bulk into and in channel and in Our continued driven also products

reintroduction new schools XX,XXX expand inflationary single-serve with States The The continue bulk enabling growth the of and have amusement seasonal to XX,XXX offset higher-margin is the to offset with and clients us the restaurant slowdown districts. we of in and a our the in bulk single-serve to continued from and business, and school face. opportunity United we in our park was education pressures We massive as the over military, channel. industry our footprint some school tackle locations and

the fully third implementing inflationary end price at and all of first now These offset began portion to the as pressures a We quarter. the quarter. the we product are also raised prices across in enter increases order of offerings implemented

administrative been we adoption product our all and team customer our size increased in and expanding including of Additionally, education sales driven the have strong by support. channels, base channel,

in well significantly believe gross We enable positioned increase and now us will half efficiencies to are margins. revenue improve drive of and in operating the to expected the back XXXX

manufacturing efficiencies we positioning will recently than into to current implemented, fully addition, enable production a in outsourced with year. capacity production Once of partner the districts expand triple will more properly In entered our in back and capacity. school our a to phased agreement improve strategic that capabilities approach, this half us us our larger cost beginning

operating in this believe infrastructure other back going our as is We sequential improvements. growth gross added efficiency we to and margins better the of leverage all meaningful our improvements year half recently line and generate top and

I'll call second Roger, quarter the Lisa? results about to to now the CFO, detail. more Lisa talk over in turn our

Lisa Roger

this Thank even increase channel & you, same the an Go we the greater increase will increased the in quarter the and seasonally be for soft as first products. second Riccardo. to Twist will exceed in will line the product We third quarter believe entering a half of than for the period XXX% the year summer last the revenue The period to school generate for year-over-year in believe XXXX during record million back-to-school single-serve compared year. for year. half back Overall, orders sales $X.X result as of $X.X Revenue increased education our of of the well period second million is bulk channel. the the of top our revenue we quarter as

was second gross year higher XX% quarter last Gross for expected XX% mix. product decline same well costs the were and due of raw the XXXX packaging as the as first compared period of to The XX% to for quarter XXXX. material and in for margins margins year-over-year

margin We are to improvement efforts implemented. expect improve fully the margins gross once company's

growth for a of compared XXXX. sales our of quarter the marketing freight million second and XXXX revenue as a outbound personnel increased and quarter inflationary marketing expense as increased in in million increase $X.X of well Selling $X.X to as the the pressures. is result elevated The result and second of to

by improve our elevated of efficiencies costs to freight the new and improving number the initiatives will working agreement freight our product implementing and Also, and beginning to packaging in optimization. manufacturing include third quarter. a ingredient We are offset

for G&A quarter resourced $X.X of COVID-XX fully increase was quarter to second company stock-based plans. The an personnel quarter noncash second million is compared million to accelerated affected in compared driven to XXXX. the by costs in the pullback last the in G&A growth of increased increase XXXX compensation. for The including expenses year, in now a $X.X

of costs, of for compared a $X.X for a loss XXXX of loss quarter of EBITDA Adjusted as second compared million quarter second of Net quarter $X.X XXXX million loss second the in XXXX. was the $XXX,XXX the of quarter quarter approximately personnel in to record XXXX. was negatively loss of second the $XXX,XXX higher a and Adjusted approximately for significantly was shipping to high EBITDA storage and raw material XXXX of by costs costs. the increased impacted second

EBITDA and close sequential believe be we for breakeven improvement adjusted adjusted the will expect quarter. in third in EBITDA to fourth the quarter We

million of As had positioned sheet. expected $X.X June fourth XX, the XXXX, for This its and the and of third to meet of demand company has on cash inventory increase balance $X.X the million us quarter. in approximately approximately very well

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

Riccardo Delle Coste

Lisa. you, Thank

inability our infrastructure, entered During of enable to improvements invested in service expanded us customer to to with, many due of service product a to into manufacture and demand. been their wanting base. agreement half and but the customers properly able larger were chain first we not we These work our the we manufacturing new issues to supply XXXX, enough to meet have that

manufacturing agreement completely new Our changes this dynamic.

expanding to offering school and continue perfect our customer excited are very channel the have all channels. the for base in We

we increase the As adjusted EBITDA we margins improve half back year, gross our close and will in we positive top breakeven quarter. even be line, confident the fourth enter of and are or operating this to

expect record back highs we half, increase to to So expected to with in continue the continue. sales

the We implemented raw in costs. strategies storage have and to mitigate materials, shipping increases

production to manufacturing agreement us additional signed not and to goals And to and portfolio. customers, will allow future. We of that our new some the need we foreseeable capacity staffed on our to are personnel have add work long-term our products will a continue any meet largest add significantly service the to for fully to innovative increase new

We to history will strongest expect result improvements and back half all profitability. lead the to in these consistent in our

hit to very about future. is entire company the and beginning excited stride are We our our

let's Operator? questions. your take that, with Now

Operator

Anthony [Operator Group. first with from question Instructions] comes Maxim Vendetti Our

Anthony Vendetti

I and if Riccardo, increases so, from if was been there's price wondering you about the pushback, could the of magnitude any if customers. and talk which

Riccardo Delle Coste

still and magnitude received, but to products. Yes, increases from it sure. The a felt for of the Unfortunately, customers question. bit account where price of we that customers that more anywhere There we the sets was various was overall, too. didn't been customer very of will of the type certain That's total the received. an But provide well the good for we that XX% the amount was that increases they're customers, price have across X% amount it on larger some pushback little suitable was urban more challenged. with increases, a

have supply We of had, QX. we in that's and evident work that increase in and came solving a the the in in have chain for through lot put challenges that cost margin

months sold in We and very next all be rolled X now actually are for the the confident improvement about margin that place. out. just put already They we've initiatives to need due to

out start playing we'll next over X that months. So X to the to see

Anthony Vendetti

Okay.

than material costs XX%. saying supply you're what chain/raw X% to basically So And your more is increased XX%.

little a why your gross bit hit that's margin. So of

Riccardo Delle Coste

to that the other expecting now Exactly. Yes. But way QX go onwards. Yes. we're from

Anthony Vendetti

Okay.

Riccardo Delle Coste

make secure A of make of material a sure the There actually we build well all to we items inventory as little those the was well will so to they and older price. and the bit a items, sure pulling product at of priced given and issues. needing needed higher lag supply as we secure in have available materials raw to make chain raw just that lot through that a terms still

well. need still of we some So through as items to those work

Anthony Vendetti

end quick potential going? expectation How And then partners additional are of those questions. more just X additional Any the partners? year? conversations distribution before for Okay. the Any

Riccardo Delle Coste

potential they Maybe see play out before year, before few year. partners. the end are how the a we to We'll like the talking of the of end

on a lot products. the We are getting of traction

that recovering we're definitely starting to see COVID, product in even the we're segments. So from other and

think that the really partner to and discussions a we're should good any also of it's year, potential help of going be half I it So back having. that the

Anthony Vendetti

And last summer. question. Okay. is It the

pick that single-serve, Does that back the channels, up is So sometimes the doing? summer? this how bulk

Riccardo Delle Coste

Mixed the Yes, it's actually. definitely the had pick started summer, -- bulk to single-serve up. product We bag, has picking up. was The question. good for a

been I'm as there's aware, just pretty the man of these they locations, where particularly to machines. don't of everyone outlets sure for labor significant However, have labor enough shortage is a lot some a

be to a the was going new are didn't the on but it And more as customers thought product it equipment seeing see well up agreements. we those machines in starting of -- starting pick we So to we part, is pick signing for did turned actually lot much especially as as up first now. bulk to with definitely the definitely

product the last that's COVID that channel ones, is increase labor to definitely on a to is be out us had So I a for excluding I sign. really mean shortage the to another from probably correct. good good one think going here exciting -- actually are And starting the the pricing. it post-COVID. It's obviously issues we've see of

Operator

for Ladies the end question-and-answer call Delle of now Coste to turn and back reached closing we've gentlemen, over like I'd the session. the Riccardo to comments.

Riccardo Delle Coste

sharing successes come back the forward year for look the they half new joining. available. We as to for everyone, updates very Thanks and of much. Thanks,

Operator

conference. today's concludes This

thank lines your disconnect we your you You at this for time, and may participation.

Barfresh Food (BRFH) 28 Jul 222022 Q2 Earnings call transcript