HF Foods Group Inc.
For the period ended Mar 31, 2026. Filed May 11, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 11, 2026
HFFG$1.47+2.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-10.
0001680873-25-000074
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-11.
0001680873-26-000027
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 85 previous paragraphs and 69 current paragraphs.
44 unchanged; 15 reworded; 10 added; 20 removed; 6 previous and 0 current paragraphs rearranged.
Tables are not compared: 8 previous and 5 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (10)
Current report
Net Revenue
Current report
Gross Profit
Current report
Distribution, Selling and Administrative Expenses
Current report
EBITDA and Adjusted EBITDA
Current report
Net Revenue
Current report
Gross Profit
Current report
Distribution, Selling and Administrative Expenses
Current report
Net Income Attributable to HF Foods Group, Inc.
Current report
EBITDA and Adjusted EBITDA
Current report
(2) Includes the gain recognized on the sale of the Utah facility in 2026 and legal and consulting expenses incurred in connection with various corporate projects and other strategic initiatives.
Removed paragraphs (20)
Previous report
Gross profit was $50.4 million for three months ended September 30, 2025 compared to $50.2 million in the same period in 2024, an increase of $0.2 million, or 0.5%. The increase was primarily attributable to an increase in volume and improved pricing during the quarter. Gross profit margin for the three months ended September 30, 2025 of 16.4% remained relatively consistent compared to 16.8% in the same period in 2024 due to an increased proportion of sales from lower margin products, particularly Seafood.
Previous report
Net Loss Attributable to HF Foods Group, Inc.
Previous report
(2) Includes contested proxy and related legal and consulting costs and facility closure costs.
Previous report
Results of Operations
Previous report
Comparison of Nine Months Ended September 30, 2025 to Nine Months Ended September 30, 2024
Previous report
Net revenue for thenine months ended September 30, 2025 increased by $23.9 million, or 2.7%, compared to the same period in 2024. This increase was primarily attributable to volume growth and improved pricing in Commodity, Meat & Poultry and Seafood, partially offset by decrease in volume within other categories.
Previous report
Distribution, selling and administrative expenses of $150.1 million for the nine months ended September 30, 2025 slightly increased compared to prior year expenses of $150.0 million primarily due to an increase in rental, occupancy and delivery expense, partially offset by a decrease in professional and insurance fees and travel and entertainment costs. Distribution, selling and administrative expenses as a percentage of net revenue decreased to 16.3% for the nine months ended September 30, 2025 from 16.7% in the same period in 2024, primarily due to increased revenue and lower professional fees, partially offset by increased rental, occupancy and delivery costs.
Previous report
Interest Expense
Previous report
Income Tax Expense (Benefit)
Previous report
Income tax benefit was $1.2 million for the nine months ended September 30, 2025, compared to the income tax expense of $0.2 million for the nine months ended September 30, 2024. The change was primarily driven by the SEC settlement that impacted the tax provision for the period ended September 30, 2024.
Previous report
Net Loss Attributable to HF Foods Group, Inc.
Previous report
Net loss attributable to HF Foods Group Inc. was $1.5 million for the nine months ended September 30, 2025, compared to net loss of $4.6 million for the nine months ended September 30, 2024. The improvement of $3.1 million was primarily driven by an increase in income from operations of $3.3 million compared to the prior year period; however, the prior year’s results included a one time gain from lease guarantee income offset by an SEC settlement within other expense, which did not recur in the current year, thereby partially offsetting the year-over-year improvement.
Previous report
(2) Includes contested proxy and related legal and consulting costs and facility closure costs.
Previous report
Goodwill Impairment
Previous report
The Company’s annual goodwill impairment assessment is performed as of December 31. As a result of continued declines in the level of stock price, the Company performed a quantitative goodwill impairment assessment as of December 31, 2024. The results of the testing as of December 31, 2024, concluded that the estimated fair value of the reporting unit fell short of carrying value, and therefore impairment existed as of that date. A goodwill impairment charge of $46.3 million was recorded during the fourth quarter of the year ended December 31, 2024.
Previous report
For the December 31, 2024 impairment test, we used a combination of discounted cash flow (“DCF”) model and market approaches, such as public company comparable analysis and comparable acquisitions analysis to determine fair value of the reporting unit. The income approach and market approaches were weighted equally to estimate fair value. The income approach requires detailed forecasts of cash flows, including significant assumptions such as revenue growth rates, gross profit margins, distribution, selling and administrative expenses, among other assumptions, and an estimate of weighted-average cost of capital which we believe approximate the assumptions from a market participant’s perspective. The market approaches are primarily impacted by an enterprise value multiple of EBITDA. These estimates incorporate many uncertain factors which could be impacted by changes in market conditions, interest rates, growth rate, tax rates, costs, customer behavior, regulatory environment and other macroeconomic changes. In addition, we considered the reasonableness of the fair value of the reporting unit by assessing the implied enterprise value control premium based on our market capitalization and also considered the lack of liquidity in the Company’s common stock. The Company’s common stock is fairly thinly traded, with a higher level of internal stockholders than its peers, and limited equity analyst coverage. As a result, the implied value from the traded stock price is based on limited investment public interest. Our market capitalization is calculated using the number of common shares outstanding and common stock publicly traded price. We determined that the implied control premium was reasonable which corroborates our fair value estimates. We categorize the fair value determination as Level 3 in the fair value hierarchy due to its use of internal projections and unobservable measurement inputs.
Previous report
Assumptions used in impairment testing are made at a point in time and require significant judgment; therefore, they are subject to change based on the facts and circumstances present at each impairment test date. Additionally, these assumptions are generally interdependent and do not change in isolation.
Previous report
We performed sensitivity analyses on the key inputs and assumptions used in determining the estimated fair value of our reporting unit by utilizing changes in assumptions that would reasonably likely occur. Assuming all other assumptions and inputs used in the fair value analysis are held constant, for the December 31, 2024 impairment test, a 100 basis point increase in the discount rate assumption, a 1x decrease in the respective EBITDA multiple assumptions, a 25 basis point decrease in the gross profit margin assumption, and a 50 basis point decrease in the revenue growth rate assumption would result in a decrease in the fair value of our reporting unit of approximately $11.6 million, $31.0 million, $7.3 million, and $5.5 million, respectively, which would likely result in further impairment. These estimated changes in fair value are not necessarily representative of the actual impairment that would be recorded in the event of a fair value decline.
Previous report
As of September 30, 2025, the Company determined that there were no events or circumstances that would more likely than not reduce the fair value of the reporting unit below its carrying value. Management considered the decrease in the Company’s share price around September 30, 2025 and concluded this was primarily attributable to market reactions and higher-than normal trade volumes caused by potential dilution related to the Company’s announcement of a $100 million At the Market (“ATM”) equity offering on September 25, 2025. We believe that due to the Company’s normally low trading volume, this creates higher volatility and fluctuations in stock price, and such a decline is not considered a sustained decline as of September 30, 2025.
Previous report
If, in future periods, the financial performance of the reporting unit does not meet forecasted expectations, or a prolonged decline occurs in the market price of our common stock, it may cause a change in the results of the impairment assessment and, as such, could result in further impairment of goodwill.
Reworded paragraphs (15)
Previous wording
To position the business for long-term success, we have initiated a comprehensive, operational transformation plan in an effort to drive growth and cost savings. Our transformation is focused on four key areas, each of which we expect will positively impact future growth or cost savings. The components of our transformation are as follows:
Current wording
To position the business for long-term success, starting in 2024, we initiated a comprehensive, operational transformation plan in an effort to drive growth and cost savings. Our transformation is focused on four key areas, each of which we expect will positively impact future growth or cost savings. The components of our transformation were as follows:
Previous wording
•Fleet and Transportation: We have established a national fleet maintenance program. Within this, we have defined new truck specifications, initiated a replacement program for 50% of our current fleet, implemented a national fuel savings program to maximize efficiency, and plan to outsource domestic inbound freight logistics to a third-party partner to adopt a cohesive national approach to our supply chain. This is expected to deliver substantial improvements to our transportation system.
Current wording
•Fleet and Transportation: We have established a national fleet maintenance program. Within this, we have defined new truck specifications, initiated a replacement program for 50% of our current fleet, implemented a national fuel savings program to maximize efficiency, and plan to outsource domestic inbound freight logistics to a third-party partner to adopt a cohesive national approach to our supply chain. This is expected to deliver substantial improvements to our transportation system moving forward.
Previous wording
Net revenue for thethree months ended September 30, 2025 increased by $8.6 million, or 2.9%, compared to the same period in 2024. The increase was primarily attributable to volume increases and improved pricing in Meat & Poultry and Seafood, offset by a slight decrease in volume within other categories.
Current wording
Net revenue for the three months ended March 31, 2026 increased by $13.6 million, or 4.5%, compared to the same period in 2025. The increase was primarily due to volume growth and pricing improvement in Seafood followed by volume growth for Commodity.
Previous wording
Gross profit was $156.5 million for the nine months ended September 30, 2025 compared to $153.0 million in the same period in 2024, an increase of $3.5 million, or 2.3%. The gross profit increase was primarily attributable to increased net revenue partially offset by increased costs. Gross profit margin for the nine months ended September 30, 2025 slightly decreased to 17.0% compared to 17.1% in the same period in 2024.
Current wording
Gross profit was $50.5 million for three months ended March 31, 2026 compared to $51.0 million in the same period in 2025, a decrease of $0.4 million, or 0.8%. The decrease was primarily due to increased sales in lower margin products like Seafood and an uptick in landed costs. Gross profit margin for the three months ended March 31, 2026 of 16.2% declined compared to 17.1% in the same period in 2025.
Previous wording
Distribution, selling and administrative expenses decreased by $0.4 million, or 0.7%, to $49.3 million, for the three months ended September 30, 2025. Distribution, selling and administrative expenses as a percentage of net revenue decreased to 16.1% for the three months ended September 30, 2025 from 16.6% in the same period in 2024, primarily due to increased net revenue and lower personnel, professional and insurance costs, partially offset by increased rental, occupancy and other expenses.
Current wording
Distribution, selling and administrative expenses decreased by $0.3 million, or 0.6%, to $49.5 million, for the three months ended March 31, 2026. Distribution, selling and administrative expenses as a percentage of net revenue decreased to 15.9% for the three months ended March 31, 2026 from 16.7% in the same period in 2025, primarily due to increased net revenue and lower professional fees and bad debt expenses, partially offset by increased depreciation and auto & truck expenses.
Previous wording
Interest expense for the three months ended September 30, 2025 of $2.9 million increased slightly compared to $2.6 million for the three months ended September 30, 2024. Average floating interest rates on our floating-rate debt for the three months ended September 30, 2025 decreased by approximately 1.0% on our line of credit and 1.0% on the JPMorgan Chase mortgage-secured term loan, compared to the same period in 2024. Our average daily line of credit balance decreased by $0.2 million, or 0.3%, to $61.5 million for the three months ended September 30, 2025 from $61.7 million for the three months ended September 30, 2024, and our average daily JPMorgan Chase mortgage-secured term loan balance decreased by $5.1 million, or 5.0%, to $97.9 million for the three months ended September 30, 2025 from $103.0 million for the three months ended September 30, 2024.
Current wording
Interest expense for the three months ended March 31, 2026 of $2.8 million increased slightly compared to $2.6 million for the three months ended March 31, 2025. Average floating interest rates on our floating-rate debt for the three months ended March 31, 2026 decreased by approximately 0.6% on our line of credit and 0.6% on the JPMorgan Chase mortgage-secured term loan, compared to the same period in 2025. Our average daily line of credit balance increased by $8.0 million, or 16.4%, to $56.7 million for the three months ended March 31, 2026 from $48.7 million for the three months ended March 31, 2025, and our average daily JPMorgan Chase mortgage-secured term loan balance decreased by $6.7 million, or 6.7%, to $93.7 million for the three months ended March 31, 2026 from $100.4 million for the three months ended March 31, 2025.
Previous wording
Income tax benefit was $0.8 million for the three months ended September 30, 2025, compared to an income tax benefit of $1.3 million for the three months ended September 30, 2024, primarily due to a decrease in loss before income taxes.
Current wording
Income tax benefit was $0.4 million for the three months ended March 31, 2026, compared to an income tax benefit of $0.9 million for the three months ended March 31, 2025, primarily due to an increase in income before income taxes, partially offset by investment tax credits.
Previous wording
Net loss attributable to HF Foods Group, Inc. was $1.1 million for the three months ended September 30, 2025, compared to net loss of $3.9 million for the three months ended September 30, 2024. The improvement was primarily driven by an increase in income from operations of $0.6 million compared to the prior year period and a decrease in change in fair value of interest rate swap contracts by $3.2 million compared to 2024.
Current wording
Net income attributable to HF Foods Group, Inc. was $1.2 million for the three months ended March 31, 2026, compared to net loss of $1.6 million for the three months ended March 31, 2025. The improvement was primarily driven by gain on sale of Utah building and positive change in fair value of interest rate swap contracts by $2.0 million compared to 2025.
Previous wording
As of September 30, 2025, we had cash of approximately $12.3 million, checks issued not presented for payment of $2.1 million and access to approximately $49.8 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 March 31, 2026, we had cash of approximately $11.1 million, checks issued not presented for payment of $5.0 million and access to approximately $55.2 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.
Previous wording
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.
Current wording
Management believes we have sufficient access to 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.
Previous wording
The following table summarizes cash flow data for the nine months ended September 30, 2025 and 2024:
Current wording
The following table summarizes cash flow data for the three months ended March 31, 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 $0.3 million primarily due to an increase in non-cash expense add-backs, offset by the timing of working capital outlays mainly for inventory purchases to counter potential tariff increases.
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 $8.3 million primarily due to an increase in non-cash expense add-backs and increases in accounts payable balances, offset by the timing of working capital outlays mainly for inventory purchases and increases in our accounts receivable balances.
Previous wording
Net cash used in investing activities increased by $0.4 million primarily due to increased capital project spend in the nine months ended September 30, 2025.
Current wording
Net cash used in investing activities increased by $7.6 million primarily due to increased capital project spend in the three months ended March 31, 2026, partially offset by proceeds from the sale of the Utah property (see Note 4 - Balance Sheet Components for additional information).
Previous wording
Net cash used in financing activities increased by $1.8 million to $3.2 million during the nine months ended September 30, 2025 primarily due to the higher overall net proceeds from line of credit activity for the nine months ended September 30, 2025 as compared the nine months ended September 30, 2024.
Current wording
Net cash used in financing activities remained relatively consistent at $1.7 million during the three months ended March 31, 2026 primarily due to the higher overall net proceeds from line of credit activity, offset by overall lower interest rates as compared to the three months ended March 31, 2025.
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 2024 Annual Report on Form 10-K 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 nine months ended September 30, 2025.
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. 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 three months ended March 31, 2026.
Rearranged previous paragraphs (6)
Previous report — wording carried elsewhere
The following table sets forth a summary of our consolidated results of operations for the nine months ended September 30, 2025 and 2024. The historical results presented below are not necessarily indicative of the results that may be expected for any future period.
Previous report — wording carried elsewhere
The following table sets forth the components of our consolidated results of operations expressed as a percentage of net revenue for the periods indicated:
Previous report — wording carried elsewhere
Interest expense for the nine months ended September 30, 2025 decreased by $0.2 million or 2.7%, compared to the nine months ended September 30, 2024, primarily due to a decrease in our average daily JPMorgan Chase mortgage-secured term loan balance of $5.1 million, partially offset by an increase in our average daily line of credit balance of $0.3 million combined with a slightly lower interest-rate environment. Average floating interest rates on our floating-rate debt for the nine months ended September 30, 2025 decreased by approximately 1.0% on the line of credit and 1.0% on the JPMorgan Chase mortgage-secured term loan, compared to the same period in 2024. Our average daily line of credit balance increased by $0.3 million, or 0.6%, to $54.6 million for the nine months ended September 30, 2025 from $54.3 million for the nine months ended September 30, 2024, and our average daily JPMorgan Chase mortgage-secured term loan balance decreased by $5.1 million, or 4.9%, to $99.1 million for the nine months ended September 30, 2025 from $104.2 million for the nine months ended September 30, 2024.
Previous report — wording carried elsewhere
The following table reconciles EBITDA and Adjusted EBITDA to the most directly comparable GAAP measure:
Previous report — wording carried elsewhere
(1) Represents costs associated with the launch and continued implementation of strategic projects including supply chain management improvements and technology infrastructure initiatives.
Previous report — wording carried elsewhere
(3) Includes severance and related expenses for the Company’s transition of executive officers and organizational redesign.