HF Foods Group Inc.

Previous wording

We market and distribute Asian specialty food products, seafood, fresh produce, frozen and dry food, and non-food products primarily to Asian restaurants and other foodservice customers throughout the United States. HF Foods was formed through a merger between two complementary market leaders, HF Foods Group Inc. and B&R Global. In 2022, HF Foods acquired two frozen seafood suppliers, expanding its distribution network in Illinois, Texas and along the eastern seaboard, from Massachusetts to Florida, as well as Pennsylvania, West Virginia, Ohio, Kentucky, and Tennessee.

Current wording

We market and distribute Asian specialty food products, seafood, fresh produce, frozen and dry food, and non-food products primarily to Asian restaurants and other foodservice customers throughout the United States and Canada. HF Foods was formed through a merger between two complementary market leaders, HF Foods Group Inc. and B&R Global. In 2022, HF Foods acquired two frozen seafood suppliers, expanding its distribution network in Illinois, Texas and along the eastern seaboard, from Massachusetts to Florida, as well as Pennsylvania, West Virginia, Ohio, Kentucky, and Tennessee. In August 2026, HF Foods acquired Searay, an importer and distributor of frozen seafood based in Richmond, British Columbia, marking our first expansion into Canada.

Previous wording

We aim to supply the increasing demand for Asian American restaurant cuisine, leveraging our nationwide network of distribution centers and our strong relations with growers and suppliers of fresh, high-quality specialty restaurant food products and supplies primarily in North America, South America and Asia. Capitalizing on our deep understanding of the Asian culture, we have become a trusted partner serving Asian restaurants and other foodservice customers throughout the United States. We are dedicated to serving the vast array of Asian restaurants in need of high-quality and specialized food ingredients at competitive prices.

Current wording

We aim to supply the increasing demand for Asian American restaurant cuisine, leveraging our nationwide network of distribution centers and our strong relations with growers and suppliers of fresh, high-quality specialty restaurant food products and supplies primarily in North America, South America and Asia. Capitalizing on our deep understanding of the Asian culture, we have become a trusted partner serving Asian restaurants and other foodservice customers throughout the United States and Canada. We are dedicated to serving the vast array of Asian restaurants in need of high-quality and specialized food ingredients at competitive prices.

Previous wording

Net revenue for the three months ended June 30, 2026 increased by $8.9 million, or 2.8%, compared to the same period in 2025. The increase was primarily due to volume growth and pricing improvement in Seafood followed by volume growth in Commodity, partially offset by price decreases in Meat & Poultry.

Current wording

Net revenue for the three months ended September 30, 2026 increased by $12.6 million, or 4.1%, compared to the same period in 2025. The increase was primarily attributable to volume growth in Seafood and pricing improvement in Produce and Commodity, partially offset by price decreases in Meat & Poultry. Net revenue for the three months ended September 30, 2026 includes $4.2 million from Searay, which was acquired on August 31, 2026.

Previous wording

Gross profit was $55.0 million for the three months ended June 30, 2026 compared to $55.1 million in the same period in 2025, a decrease of $0.1 million, or 0.2%. The gross profit decreased across most categories due to additional tariffs effective beginning in the third quarter of 2025. The decrease was partially offset by the IEEPA tariff refund received during the quarter. Gross profit margin for the three months ended June 30, 2026 of 17.0% declined compared to 17.5% in the same period in 2025.

Current wording

Gross profit was $53.4 million for the three months ended September 30, 2026 compared to $50.4 million in the same period in 2025, an increase of $3.0 million, or 5.9%. The increase was primarily driven by volume growth in Seafood, incremental margin gained from Searay and IEEPA tariff refunds received during the quarter. Gross profit margin for the three months ended September 30, 2026 of 16.7% increased compared to 16.4% in the same period in 2025.

Previous wording

Interest expense for the three months ended June 30, 2026 of $2.9 million increased slightly compared to $2.8 million for the three months ended June 30, 2025. Average floating interest rates on our floating-rate debt for the three months ended June 30, 2026 decreased by approximately 0.3% on our line of credit and 0.7% on the JPMorgan Chase mortgage-secured term loan, compared to the same period in 2025. Our average daily line of credit balance increased by $12.1 million, or 22.6%, to $65.7 million for the three months ended June 30, 2026 from $53.6 million for the three months ended June 30, 2025, and our average daily JPMorgan Chase mortgage-secured term loan balance decreased by $8.2 million, or 8.3%, to $91.0 million for the three months ended June 30, 2026 from $99.2 million for the three months ended June 30, 2025.

Current wording

Interest expense for the three months ended September 30, 2026 of $3.4 million increased compared to $2.9 million for the three months ended September 30, 2025, primarily due to the higher term loan balance following the Seventh Amendment on July 29, 2026, partially offset by the repayment of the Bank of America and East West Bank mortgage debt. Average floating interest rates on our floating-rate debt for the three months ended September 30, 2026 decreased by approximately 0.4% on our line of credit and 0.2% on the JPMorgan Chase mortgage-secured term loan, compared to the same period in 2025. Our average daily line of credit balance decreased by $0.1 million, or 0.2%, to $61.4 million for the three months ended September 30, 2026 from $61.5 million for the three months ended September 30, 2025, and our average daily JPMorgan Chase mortgage-secured term loan balance increased by $16.1 million, or 16.4%, to $114.0 million for the three months ended September 30, 2026 from $97.9 million for the three months ended September 30, 2025.

Previous wording

Income tax expense was $0.2 million for the three months ended June 30, 2026, compared to an income tax expense of $0.5 million for the three months ended June 30, 2025. The decrease in income tax expense was primarily due to investment tax credits recognized during the period, partially offset by higher income before income taxes.

Current wording

Income tax expense was $0.2 million for the three months ended September 30, 2026, compared to an income tax benefit of $0.8 million for the three months ended September 30, 2025, despite a larger loss before income taxes in the current period. Under the Company’s estimated annual effective tax rate methodology, income tax for an interim quarter reflects the change in year-to-date income tax. The third quarter reflects a reduction in the cumulative year-to-date tax benefit, primarily related to investment tax credits, as a result of the change in year-to-date and projected annual results. The quarter also includes income taxes on the Company’s Canadian operations following the Searay Acquisition and the effect of non-deductible transaction costs related to the acquisition.

Previous wording

Net income attributable to HF Foods Group, Inc. was $2.6 million for the three months ended June 30, 2026, compared to net income of $1.2 million for the three months ended June 30, 2025. The improvement was primarily driven by recognition of $1.8 million employee retention credit including interest, the IEEPA tariff refund of $1.1 million, and a positive change in fair value of interest rate swap contracts by $1.4 million compared to 2025. These favorable variances were partially offset by $1.3 million decrease in income from operations and $0.7 million year-over-year change in net income attributable to noncontrolling interests.

Current wording

Net loss attributable to HF Foods Group Inc. was $4.2 million for the three months ended September 30, 2026, compared to a net loss of $1.1 million for the three months ended September 30, 2025. The increase in net loss was primarily driven by a $2.9 million decrease in income from operations, reflecting gross profit growth of $3.0 million offset by the $5.9 million increase in distribution, selling and administrative expenses. Other expense (income) reduced by $0.5 million driven by a positive change in fair value of interest rate swap contracts of $0.9 million partially offset by higher interest expense. Income tax benefit reduced by $0.9 million compared to same period last year.

Previous wording

The following table sets forth a summary of our consolidated results of operations for the six months ended June 30, 2026 and 2025. The historical results presented below are not necessarily indicative of the results that may be expected for any future period.

Current wording

The following table sets forth a summary of our consolidated results of operations for the nine months ended September 30, 2026 and 2025. The historical results presented below are not necessarily indicative of the results that may be expected for any future period.

Previous wording

Net revenue for thesix months ended June 30, 2026 increased by $22.5 million, or 3.7%, compared to the same period in 2025. The increase was primarily attributable to volume growth and improved pricing in Seafood and Commodity, partially offset by price decrease in Meat & Poultry and volume decreases in Asian Specialty.

Current wording

Net revenue for thenine months ended September 30, 2026 increased by $35.1 million, or 3.8%, compared to the same period in 2025. The increase was primarily due to volume growth and pricing improvement in Seafood and pricing improvement in Commodity and Produce, partially offset by price decreases in Meat & Poultry. Net revenue for the nine months ended September 30, 2026 includes $4.2 million from Searay, which was acquired on August 31, 2026.

Previous wording

Gross profit was $105.6 million for the six months ended June 30, 2026 compared to $106.1 million in the same period in 2025, an decrease of $0.5 million, or 0.5%. The gross profit decreased across most categories primarily due to additional tariff effective beginning the third quarter 2025. The decrease was offset by the IEEPA tariff refund received during the current quarter. Gross profit margin for the six months ended June 30, 2026 decreased slightly to 16.6% compared to 17.3% in the same period in 2025.

Current wording

Gross profit was $159.0 million for the nine months ended September 30, 2026 compared to $156.5 million in the same period in 2025, an increase of $2.5 million, or 1.6%. The increase included IEEPA tariff refunds received during the period and incremental margin gained from newly acquired Searay. Gross profit margin for the nine months ended September 30, 2026 decreased slightly to 16.6% compared to 17.0% in the same period in 2025.

Previous wording

Distribution, selling and administrative expenses of $101.7 million for the six months ended June 30, 2026 increased by $0.9 million, or 0.9%, in 2026 compared to $100.8 million in 2025, mainly due to increases in auto & truck expenses of $2.0 million and insurance expense of $0.4 million partially offset by a reduction in personnel expense of $0.8 million and professional expenses of $0.6 million. Distribution, selling and administrative expenses as a percentage of net revenue decreased slightly to 16.0% in 2026 compared to 16.4% in 2025.

Current wording

Distribution, selling and administrative expenses of $156.9 million for the nine months ended September 30, 2026 increased by $6.8 million, or 4.5%, in 2026 compared to $150.1 million in 2025, mainly due to increases in auto & truck expense reflecting elevated fuel costs partially offset by repair & maintenance savings from investments in upgrading our fleet, non-recurring professional services related to the renewal and upsizing of our revolver facility, refinancing of our property portfolio and the acquisition of Searay Foods, and depreciation expenses. Distribution, selling and administrative expenses as a percentage of net revenue increased slightly to 16.4% in 2026 compared to 16.3% in 2025.

Previous wording

Interest expense for the six months ended June 30, 2026 increased slightly to $5.73 million, compared to $5.43 million for the six months ended June 30, 2025, an increase of $0.30 million or 5.6%. The increase was driven by an increase in our average daily line of credit balance of $10.1 million, partially offset by a decrease in our average daily JPMorgan Chase mortgage-secured term loan balance of $7.5 million combined with a slightly lower interest-rate environment. Average floating interest rates on our floating-rate debt for the six months ended June 30, 2026 decreased by approximately 0.5% on the line of credit and 0.7% on the JPMorgan Chase mortgage-secured term loan, compared to 2025. Our average daily line of credit balance was $61.3 million for the six months ended June 30, 2026, up from $51.2 million for the six months ended June 30, 2025, while our average daily JPMorgan Chase mortgage-secured term loan balance decreased to $92.3 million for the six months ended June 30, 2026 from $99.8 million for the six months ended June 30, 2025.

Current wording

Interest expense for the nine months ended September 30, 2026 increased to $9.2 million, compared to $8.4 million for the nine months ended September 30, 2025, an increase of $0.8 million or 9.5%. The increase was driven by an increase in our average daily line of credit balance of $6.7 million and an increase in our average daily JPMorgan Chase mortgage-secured term loan balance of $0.6 million reflecting the higher term loan balance following the Seventh Amendment on July 29, 2026, partially offset by the repayment of the Bank of America and East West Bank mortgage debt and a slightly lower interest-rate environment. Average floating interest rates on our floating-rate debt for the nine months ended September 30, 2026 decreased by approximately 0.4% on the line of credit and 0.5% on the JPMorgan Chase mortgage-secured term loan, compared to 2025. Our average daily line of credit balance was $61.3 million for the nine months ended September 30, 2026, up from $54.6 million for the nine months ended September 30, 2025, while our average daily JPMorgan Chase mortgage-secured term loan balance increased to $99.7 million for the nine months ended September 30, 2026 from $99.1 million for the nine months ended September 30, 2025.

Previous wording

Income tax benefit was $0.2 million for the six months ended June 30, 2026, compared to an income tax benefit of $0.4 million for the six months ended June 30, 2025. The change was primarily due to higher income before income taxes and discrete tax expense items related to stock-based compensation shortfalls and the remeasurement of deferred tax assets associated with executive compensation, partially offset by investment tax credits recognized during the period.

Current wording

Income tax benefit was $0.01 million for the nine months ended September 30, 2026, compared to an income tax benefit of $1.2 million for the nine months ended September 30, 2025. The decrease in the income tax benefit was primarily due to a lower loss before income taxes, permanent items, discrete tax expense related to stock-based compensation shortfalls and the remeasurement of deferred tax assets associated with executive compensation, income taxes on the Company’s Canadian operations and non-deductible transaction costs, partially offset by investment tax credits recognized during the period

Previous wording

Net income attributable to HF Foods Group Inc. was $3.8 million for the six months ended June 30, 2026, compared to a net loss of $0.4 million for the six months ended June 30, 2025. The $4.2 million improvement was primarily attributable to a $1.4 million gain on the Utah building sale, recognition of employee retention credit of $1.8 million including interest, the IEEPA tariff refund of $1.1 million, and a $3.4 million favorable year-over-year change in fair value of interest rate swap. These favorable variances were partially offset by a $1.4 million decrease in operating income, a $0.2 million unfavorable change in income taxes, and a $0.8 million year-over-year change in net income attributable to noncontrolling interests.

Current wording

Net loss attributable to HF Foods Group Inc. was $0.4 million for the nine months ended September 30, 2026, compared to a net loss of $1.5 million for the nine months ended September 30, 2025. The $1.1 million improvement was primarily attributable to a $1.4 million gain on the Utah building sale, recognition of employee retention credit of $1.8 million including interest, and a $4.4 million favorable year-over-year change in fair value of interest rate swap. These favorable variances were partially offset by a $4.3 million decrease in operating income, a $1.2 million unfavorable change in income taxes, and a $0.5 million year-over-year change in net income attributable to noncontrolling interests.

Previous wording

(2) Includes legal and consulting costs related to various corporate projects and other strategic initiatives, for the six months ended June 30, 2026 it includes the gain on the sale of the Utah facility.

Current wording

(2) Includes legal and consulting costs related to various corporate projects and other strategic initiatives. For the nine months ended September 30, 2026 it includes the gain on the sale of the Utah facility.

Previous wording

As of June 30, 2026, we had cash of approximately $18.1 million, checks issued not presented for payment of $5.6 million and access to approximately $39.7 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.

Current wording

As of September 30, 2026, we had cash of approximately $16.4 million, checks issued not presented for payment of $5.3 million and access to approximately $49.1 million in additional funds through our $140.0 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.

Previous wording

The following table summarizes cash flow data for the six months ended June 30, 2026 and 2025:

Current wording

The following table summarizes cash flow data for the nine months ended September 30, 2026 and 2025:

Previous wording

Net cash provided by operating activities consists primarily of net income (loss) 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 $3.6 million primarily due to higher income, driven by an increase in other income, and favorable changes in accrued expenses. These favorable impacts were partially offset by lower non-cash expense add-backs, which reduced the adjustments added back to net income in the determination of operating cash flows.

Current wording

Net cash provided by operating activities consists primarily of net income (loss) 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 $19.6 million primarily driven by better inventory management, reflected in a smaller increase in inventories, and favorable changes in checks issued not presented for payment and accrued expenses, partially offset by a smaller increase in accounts payable.

Previous wording

Net cash used in investing activities increased by $9.5 million primarily due to increased capital project spending including the purchases of warehouse buildings which were previously leased in the six months ended June 30, 2026, partially offset by proceeds from the sale of the Utah property (see Note 4 - Balance Sheet Components for additional information).

Current wording

Net cash used in investing activities increased in the nine months ended September 30, 2026 by $49.7 million primarily due to the Searay Acquisition for $41.8 million net of cash acquired, and increased capital project spending of $22.3 million, including the purchases of warehouse buildings which were previously leased. These expenditures were partially offset by proceeds from the sale of the Utah property (see Note 5 - Balance Sheet Components for additional information).

Previous wording

We have prepared the financial information in this Quarterly Report in accordance with GAAP. Preparing our condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during these reporting periods. We base our estimates and judgments on historical experience and other factors we believe are reasonable under the circumstances. These assumptions form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Part II, Item 7 — “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the 2025 Annual Report includes a summary of the critical accounting policies and estimates we believe are the most important to aid in understanding our financial results. There have been no changes to those critical accounting policies and estimates that have had a material impact on our reported amounts of assets, liabilities, revenue, or expenses during the six months ended June 30, 2026.

Current wording

We have prepared the financial information in this Quarterly Report in accordance with GAAP. Preparing our condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during these reporting periods. We base our estimates and judgments on historical experience and other factors we believe are reasonable under the circumstances. These assumptions form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Part II, Item 7 — “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the 2025 Annual Report includes a summary of the critical accounting policies and estimates we believe are the most important to aid in understanding our financial results. Other than the accounting for the Searay Acquisition, including the estimates of the fair values of acquired intangible assets and contingent consideration (see Note 3 - Business Combination and Note 6 - Fair Value Measurements), which we consider a critical accounting estimate, there have been no changes to those critical accounting policies and estimates that have had a material impact on our reported amounts of assets, liabilities, revenue, or expenses during the nine months ended September 30, 2026.