Earnings call transcript Q1 2023

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Operator

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.

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. 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, projects, 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

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

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

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

Riccardo Delle Coste

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

quarter, carton installing We new led to sales. capacity growth sequential increased with testing the co-packer and which first and during the finished product available in our equipment

engineering its million making in capacity increase which million manufacturing our format approximately of on compared carton changes smoothie the completion million to process line the in to XX and XXXX, X per will first to the is for co-packer Our of half track XX to year the second is for units quarter.

online, for revenue expectation record are capacity the comes we for grow our revenue and It significantly fiscal XXXX. year projecting is as to

of the were quarter. and increased XX% Gross the format XXXX. margins Additionally, prior drive XX% in of our to compared helped period in expansion smoothie quarter the fourth new the sales XXXX first first quarter in of for XX% margin year

increased of our sales improvement implemented of the year, efforts and at increases year, beginning smoothie the price margin expect of throughout this higher-margin the We our by carton continuation format. margin improvement modest driven operational

we've replacement. to complementary education is as believe our previously, and bottle a to there As not a this serve the be formats created We channel. in new was need stated format for both

to are find actively a bottle working available are manufacturing the we options replace infrastructure the to and capacity. multiple capacity working on lost partner experience, right such, As and with

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

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

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

Lisa Roger

the the for $X.X The fourth loss of offset quarter partially quarter million increased manufacturer, our decline XXXX. quarter the of XXXX is XXXX. increase quarter million XX% year-over-year in in by fourth for Revenue out the result of of XXXX rolled a and the of compared a Riccardo. you, bottle $X.X first to the largest of our million was Thank smoothie compared format first of carton orders to $X.X

for achieve as We fiscal format expect revenue revenue our this record half back will increase ramps, for in year XXXX. and carton capacity smoothie we of the year expect to

in operational year to the the Gross beginning to quarter of increase mix well first XX% margin as The our in in was due XXXX pricing quarter quarter actions XX% XXXX margins of margins and for change fiscal ongoing and the for as efforts. implemented first compared product of XXXX. the to of improvement the XX% were the gross compared fourth at

year margin modest of a increases efficiencies. We expect throughout improvements as operational and result the price

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

expenses for $XXX,XXX G&A same stock personnel compensation, in were G&A in period stock-based primarily program settlements. driven to the increase increase modification unit compared first costs last quarter and the from by $XXX,XXX our in with performance resulting of was year. an cash XXXX partial The XXXX of the

as first the quarter to quarter the loss XXXX, $XXX,XXX $XXX,XXX a For of to quarter of approximately EBITDA loss first for a fourth XXXX. XXXX approximately loss and approximately adjusted $XXX,XXX for of of a was the our of of compared compared

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

balance to on our sheet. moving Now

we million cash in our $X.X XXXX. of approximately XX, XX, of inventory As of December XXXX, approximately to had and $X million balance of compared million $X.X cash as of million March sheet $X and on inventory

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

Riccardo Delle Coste

you, Thank Lisa.

format to a are initial able and our customers. looking new We within carton number growing our smoothie and with increase forward this are of success capacity to the we reach education channel extending are of serve the pleased year as

focused are smoothie year manufacturer We customer securing our and and this expand also on base. continuing single-serve a bottle to bulk new

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

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

Operator

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

Anthony Vendetti

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

Riccardo Delle Coste

closer are We to getting finalizing something.

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

Anthony Vendetti

Okay. of the little because there I bit your guess of then And with was on recall, a customers. disruption --

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

Riccardo Delle Coste

a have Yes. number Look, generally, we I of large customers. lost mean, just

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

as running bottle to back another expecting be and are manufacturer. we But well with up

the of the fact ongoing for mid-season So bids it's that school the The lot a we of is year. were for conversations. matter

off I us middle the took that's us that in before. of right? was the interrupted off right? supply. They've mean that with we taken serving They've done, customers kind the menu replaced season and the the menu, product of the whatever those else are So done,

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

Anthony Vendetti

of two just questions before over. then it turn kind And other Okay. I

fourth to in be I year-over-year this -- So guess, the general you gave, that year, that guidance end margin record continues the guidance -- quarter you the fiscal at 'XX expect of improvement. the revenues

specifically more XXXX. margin management then throughout in And expansion comments, your

XX%. than we this margins So expected in came your quarter, greater

that improvement, margin improvement year those the Continued margins? we should so a throughout gross interpret on sequential as

Lisa Roger

that ramp & variation modest. QX. of have bit in say as be we it would further we a I Go And could little will Twist

and by that some in modest increase in But revenue. be QX an So QX. offset will expansion

Riccardo Delle Coste

the raw Yes. -- as There's year factors And to in of addition we're help but is, to and is half margins. back actually which end going a is, costs well. increase of the in hoping the we're well obviously couple bottle softening some of as year that the that. some volume material planning well, towards -- that our will the the of One expecting in as around counter

a out it might more. even bit little that So

there's of So I factors of kind But there. beat think, you mentioned, margin. as on couple the a we

improvement I like Lisa expect a -- level keep it to this We slight think, slight maybe around with, a above that. mentioned,

Anthony Vendetti

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

Riccardo Delle Coste

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

Operator

that today's There questions, Instructions] session. teleconference. And being [Operator this no further concludes the concludes Q&A

may at You your and your time, participation. great disconnect lines this you Have a day. for thank

Barfresh Food (BRFH) 27 Apr 232023 Q1 Earnings call transcript