BRFH - Earnings call transcript Q2 2024 | Barfresh Food Group, Inc.

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Operator

Good afternoon, everyone, and thank you for participating on today's second quarter 2024 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. [Operator Instructions] 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. 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 project, continue, could, may, predict and will and variations of such words and similar expressions are intended to identify such forward-looking statements. 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. 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 and the quarterly reports on Form 10-Q and current reports on Form 8-K, including any warnings, risk factors and cautionary statements contained therein. 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 in the understanding of the company's business performance, the company is also presenting certain non-GAAP measures, including adjusted EBITDA, which are reconciled in a table in the business update release to the most comparable GAAP measures. The reconciling items are nonoperational or noncash costs, including stock compensation and other nonrecurring costs such as those associated with the product withdrawal, the related dispute and certain manufacturing relocation costs. Management believes that adjusted EBITDA provides useful information to the investor because it directly is reflective of the period-to-period performance of the company's core business.

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

Riccardo Delle Coste

earnings X Good afternoon, our of first for joining for XXXX months everyone, and second thank quarter you call. us and

During the year, made business. improvements tremendous our of all of we areas have in X first months this

the record this us EBITDA financial in year and positive adjusted investments Our to excited we've record revenues recent have to infrastructure of quarterly inflection reached annual achieve QX back and margin improvement. I'm a in in positioned business. year point well revenue half in QX, announce our in XXXX, significant

the far in thus that for quarter. What's sustained Pop phase and primed place is revenue long-term next yet. growth. & will noteworthy effectiveness investments the year's haven't this the network, we our now scaling which launched And product QX sales are investments million, production a strength still and testament company for our by is our covers representing line, our our infrastructure reached is bringing include XX% even about They results. recent we've to new growth orders broker the top shortly, existing Our investments. The all production The and recent on this more we offerings a dramatically about than adding our to our XX% our $X.X particularly have already of to Go of reach sales months launch our put of building leadership have team. These This that year-over-year. increase expanding commence X.X while are a product in we go expanding growth. capacity, of on pad country to is which talent not just

us As customers ahead, the value deliver to energized shareholders substantial we before and confident to opportunities our I'm our and in alike. ability by look

X.X representing on products customer will million of X,XXX current or first announced X menus we have over the breakfast announced menus. carte range locations, year, the la school either be During served their this over new our students recently a months of and that

and products, non-bid our In to expansion, many in our onboarding history new anticipate addition, some we revenue in many announcing and included these expected the quarter. begin to placements opportunities bids quarterly leading we channel education manufacturing in expand of in to months. Thanks August, during will the we that more opportunities under cycle third coming have the highest company's the initiate upcoming schools our

excited our XXX% or In school Go was addition aims This commitment to extremely about cup options to healthier Pop are new Juice recently Freeze students announced half flavors. & new and flavors Go. X & to sugars, Pop the Pops delicious day. locations, no fruit throughout added customers colors our product provide with with preservatives, a and artificial no in quality, juice, available of a nutrition created containing innovative

can result freeze target In product to and are and the our of in Go bulk where meals country, the guidelines. lunch volume served in addition, programs & menu more meal new typically & up with products menus are schools reimbursable which USDA new this Initially, Pop the Snack offered. line compliant Go breakfast Smart Twist across will Xx in pops

Freeze reach new these Pops will into day after-school programs. manufacturing well be recently of extends one XXX% facilities partnerships Juice nutritious lunch of other our to some Go & our options launched manufacturing X Pop and providing breakfast, & company's dedicated offerings. Pop as as primarily to the different We meal Go and recently parts, announced

restaurant command Grossi Tony and over can our to that operations. His our our and and product on expanded reducing and Vice significantly goals, customers strategic and announced scalability. To partners to we proven footprint units Tony our relationships capabilities ensure track manufacturing and our but wealth deep we're in reliance valued 'XX our commitment underscores manufacturers supply also brings client to possible support capacity. supply range building of Marko with increase of end-to-end all X brings manufacturing Contract XX in of new annually operational This drive establishing any the These seamlessly building of will and hire of ambitious Manufacturing, from a contract of over bolster QSR Marko formidable well him plan. To high-performing In Matla previous foodservice hiring growth much we invaluable flow efforts growth with announced expansion, network to scale service year addition, location all positions we revenue offerings full onboard sales product our achieving the of XX single of capacity, support position distributors over spearheading co-manufacturers, our rooted of product part experience domain over XXX% manufacturing is enhances fiscal experience rapid uncompromised Sales. and supply aspects Chain and revenue our a growth, our our our now a long-term expertise, produce have anticipated channels. base, This Supply oversee key President help years comprehensive recently delivery chain million efforts for sales our chain bottle resilience to mitigates exceptionally Tony sales food broker appointment efficiently of the for chain our where to beyond. ability executive beverage all sales, accelerate Vice expanded and infrastructure the diversify schools to digitation coupled only approach with record our distributors. With a to us expansion. This by in service including of expand our are in customers. President spearhead years strategic as recently steady not including of as confident risks initiatives the teams offerings, strengthen robust XXX dramatically and and his and

XXXX, QX, number our the increased back management an As have of of team, over country. sales added school we we broker half customers manufacturing increased our the product enter our to and network by serve increased significantly capacity enhanced of offering cover XX% XXX%, new exciting the for

these now continued Lisa? of profitable up add expected the year call over and turn Roger. beyond. I'll to growth an our strong Lisa XXXX record improvements in All to CFO,

Lisa Roger

was you, second second Thank to $X.XX in $X.XX impacted quarter to million XXXX. the compared Revenue for quarter manufacturer. with related adjustments in XXXX the Revenue Riccardo. to to decreased X% estimated XXXX of credits by our the million positively of dispute

product the margin in pricing by quarter compared by XXXX improvement driven is inventory compared X% increased the year-over-year, The revenue The capacity supply production bulk in chain quarter in of mix, XX.X% for in and to XX.X% cost $XXX,XXX second and management for to to XXXX. slight of adjustments, sales. Gross such quarter decrease and quarter primarily the components. Selling, the efficiencies of distribution due increased carton XXXX to was marketing decreased the costs. XXXX. $XXX,XXX a was X% increase lower expense storage of actions and for Excluding improvements and of year-over-year second to second second freight due

to by number XXXX. $XXX,XXX expenses XX% in of in the a of in last were percent the the G&A our revenue was non-recurrence shift of in fees of tax G&A XXXX noncash capabilities the period driven a comparable compensation management XXXX. quarter The and benefits year. same were broaden recognizing employee including to and XX% for the factors, quarter second of quarter As XXXX second retention second revenue of periods compared a in increase to stock-based the of of the team, at of two sales, $XXX,XXX credit

for a recognizing a shift of second expense stock-based management result Our net tax of year-over-year credit benefits the the net of to to retention enhancement the compensation, XXXX was and loss recruiting non-recurrence is XXXX. million quarter compared $X the $XXX,XXX second team employee quarter related increase the The XXXX. the in of of loss in our of to

For the EBITDA loss compared approximately a of adjusted for XXXX, second the quarter to $XXX,XXX of year a prior of $XXX,XXX period. was loss our

half in this quarter we will positive of said, Riccardo EBITDA year. we As adjusted third and believe the back achieve

moving our balance sheet. Now to on

June we significant of demand. first work had in inventory XX, we and $XXX,XXX our continue of in our high a inventory $X.X to anticipated for capacity production on approximately amount of year, to up of cash to As half preparation cash balance QX. This made decision additional million the seasonally In build XXXX, as the meet deployed secure we approximately sheet. was to

we we normalize financing so while in earlier This have production a cash facility to financial ensures this half secured accounts that renews million the of second to respond with is I'm receivable a production with fund and $X.X the flexibility the and that us annually need month, up capacity pleased inventory to commence, to have maintaining to Given that we year. Furthermore, by expect now term we secured X-year receivables proactive set extra inventory. This report burn this to a our demands market position. secured coverage quickly further. provides we approach to strong flex is additional

allow we expense the of our nonrecourse to litigation In without received vigorous to financing complaint pursuit addition, further also legal have company.

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

Riccardo Delle Coste

new cover funding facility. This other use capacity and we'll the new is our Juice and We've big by school increased revenue enhanced to and revenue over quarter achieved added doesn't has following: third product capacity and key as ever product Go the of sales for team; a management of year, second capacity, to in last enhanced already that in $X.X capacity best tremendous an our the million has very up and EBITDA personnel as network and increased Lisa. be been over feedback infrastructure secured in the The XXX% customers; XX% the team quarterly all million it's potential worth and Pop absorbed as the noting quarter quarter team. received positive an year. And position highest exciting of co-manufacturing through and and quarter, third received products receivables XX% the as litigation company's nonrecourse to with with well combined; concentrates; number costs we set manufacturing hires portfolio, relaunched history Pops. experienced be beyond. Since financing a these you, a X:X our development strategic increased country; the orders investments, halfway this from and adjusted has that company a last expenses in significantly Freeze Thank lot XXX%; management on-trend increased $X.X us our the offering the increase achieve the include in & broker in leveraging it's the have secured of product even sales groundwork potential interest our increased our increased

for line very extremely that, are the believe our I'd positioned about to questions. EBITDA. And We to and we well dramatically Operator? with are excited opportunities improve open our like and future growth up

Operator

comes Instructions] question [Operator Maxim Group. Sherwood Our first with from Nicholas

Nicholas Sherwood

boost have of did and channels question see the been first in second in second quarter looking this summer that then the is, any this channel in third entertainment. My in you time at quarter? convenience, you -- what in the any in forward, sort of the And this at seeing quarter or And noneducation military beginning in entertainment -- in like specifically June? the

Riccardo Delle Coste

lot for the particularly. has sales were versus A the focus of our around summer been Not flat us channel. Overall, last education year.

So next expect to that we do year. increase

channel. focus However, really the a they're of since the education around relatively that's really flat. segments, been has COVID. factor And the various Most of

Nicholas Sherwood

you the make some more entirely Absolutely the a lines team is of you is open the the understood. of school secure into -- sort out? will question be Do And up sales less hiring education customers? year? think to get of team? you're then those those is focus of outlook to what that prefilled channel? into you education And for looking their other Or Or you that of communication substantial hires? as channels will number my need to new on And second some

Riccardo Delle Coste

That's question. a great

our on with And local around we fully states XX% He that country the the the team Tony covered XX% of recent that's hire staffed Sales, for almost now VP we feel really broker sales boots each completion Now XX% the with network country. of over broker representation, in with of Grossi. us. of completed our ground with sales of the with our at now, network around state the the

we're that the to it after feel solid primarily to being various channel. pretty the the we as strategies haven't that, channels hiring due focused go in our that we been our the on as formulating on on the education really front. And on So we're relates to sales now front, focus past

outreach So channels, are the including we et general cetera. our commencing the with other QSRs, foodservice,

Operator

Instructions] [Operator concludes conference. This today's

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

Barfresh Food (BRFH) 14 Aug 242024 Q2 Earnings call transcript