Company: HFFG
Filing Date: 2025-08-11
Form Type: 10-Q
Source: 0001628280-25-039583
Chunk: 99

Company: HF Foods Group Inc.
Filing Date: 2025-08-11
Form: 10-Q
Item: Item 8
Chunk 99
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 economy, the trends in the foodservice distribution industry to determine the expected collectability of accounts receivable and the realization of inventories as of June 30, 2025. 

We are party to an amortizing interest rate swap contract with JPMorgan Chase for an initial notional amount of $120.0 million, expiring in March 2028, as a means to partially hedge our existing floating rate loans exposure. Pursuant to the agreement, we will pay the swap counterparty a fixed rate of 4.11% in exchange for floating payments based on CME Term SOFR.

Management believes we have sufficient funds to meet our working capital requirements and debt obligations in the next twelve months. However, there are a number of factors that could potentially arise which might result in shortfalls in anticipated cash flow, such as the demand for our products, economic conditions, competitive pricing in the foodservice distribution industry, and our bank and suppliers being able to provide continued support. If the future cash flow from operations and other capital resources is insufficient to fund our liquidity needs, we may have to resort to reducing or delaying our expected capital investment plans, liquidating assets, obtaining additional debt or equity capital, or refinancing all or a portion of our debt.

As of June 30, 2025, we have no off-balance sheet arrangements that currently have or are reasonably likely to have a material effect on our consolidated financial position, changes in financial condition, results of operations, liquidity, capital expenditures or capital resources.

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The following table summarizes cash flow data for the three months ended June 30, 2025 and 2024:

Six Months Ended June 30,(In thousands)20252024ChangeNet cash provided by operating activities$10,468 $1,941 $8,527 Net cash used in investing activities(6,592)(6,331)(261)Net cash (used in) provided by financing activities(2,693)3,126 (5,819)Net increase (decrease) in cash and cash equivalents$1,183 $(1,264)$2,447 

Operating Activities

Net cash provided by operating activities consists primarily of net income adjusted for non-cash items, including depreciation and amortization, changes in deferred income taxes and others, and includes the effect of working capital changes. Net cash provided by operating activities increased by $8.5 million primarily due to an increase in non-cash expense add-backs, offset by the timing of