Company: HFFG
Filing Date: 2025-05-12
Form Type: 10-Q
Source: 0001680873-25-000036
Chunk: 26

Company: HF Foods Group Inc.
Filing Date: 2025-05-12
Form: 10-Q
Item: Item 8
Chunk 26
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 million partially offset by the change in income from operations of $1.2 million.

EBITDA and Adjusted EBITDA

The following table reconciles EBITDA and Adjusted EBITDA to the most directly comparable GAAP measure:

Three Months Ended March 31, ($ in thousands)20252024ChangeNet loss$(1,530)$(559)$(971)Interest expense2,6092,834(225)Income tax benefit(932)(181)(751)Depreciation and amortization6,7586,67682EBITDA6,9058,770(1,865)Lease guarantee income—(115)115Change in fair value of interest rate swap contracts1,184(1,970)3,154Stock-based compensation expense374738(364)Business transformation costs (1)237973(736)Other non-routine expense (2)100306(206)Executive transition and organizational redesign (3)973—973Adjusted EBITDA $9,773$8,702$1,071

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(1)    Represents costs associated with the launch of strategic projects including supply chain management improvements and technology infrastructure initiatives. 

(2)    Includes contested proxy and related legal and consulting costs and facility closure costs. 

(3)    Includes severance and related expenses for the Company’s transition of executive officers and organizational redesign.

Liquidity and Capital Resources

As of March 31, 2025, we had cash of approximately $16.1 million, checks issued not presented for payment of $5.0 million and access to approximately $60.0 million in additional funds through our $125.0 million line of credit, subject to a borrowing base calculation. We have funded working capital and other capital requirements primarily by cash flow from operations and bank loans. 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.

We believe that our cash flow generated from operations is sufficient to meet our normal working capital needs for at least the next twelve months. However, our ability to repay our current obligations will depend on the future realization of our current assets. Management has considered the historical experience, the economy, the trends in the foodservice distribution industry to determine the expected collectability of accounts receivable and the realization of inventories as of March 31, 2025. 

We are party to an amortizing