Barfresh Food Group, Inc. (the “Company” or “Barfresh”) (Nasdaq:
BRFH), a provider of frozen, ready-to-blend and ready-to-drink
beverages, is providing a business update in conjunction with the
filing of its form 10-Q for the first quarter ended March 31, 2022.
Management Comments
Riccardo Delle Coste, the Company’s Chief
Executive Officer, stated, “We achieved sequential and
year-over-year revenue improvement in the first quarter of 2022
with revenue increasing 149% compared to the same period last year.
We achieved this growth despite the temporary industry wide supply
chain issues impacting our ability to fulfill all immediate orders.
We continued to implement several cost-savings initiatives as well
as price increases across all product offerings that went into
effect at the end of the first quarter. This will begin to
positively impact our top and bottom line results in the second
half of 2022. Additionally, we are entering the selling season for
our higher margin single serve and bulk products and are very
encouraged to see a number of our clients re-engaging with us after
taking a hiatus during the pandemic. The increased engagement
across our customer segments, along with the initiatives in place
to offset supply chain challenges provides us confidence we will
achieve more record sales quarters and improved margins in the back
half of this fiscal year.”
First Quarter of 2022 Financial
Results
Revenue for the first quarter of 2022 increased
149% to $2.5 million, compared to $1.0 million in the first quarter
of 2021. The increase in revenue is the result of higher growth in
Twist & Go sales in the school channel, as well as the gradual
return in sales of the Company’s single serve and bulk products.
Gross margins for first quarter of 2022 were 32%, compared to 34%
for the first quarter of 2021. The decline in gross margins was due
to higher raw material and packaging costs as well as higher sales
volume and product mix for the Company’s lower margin Twist &
Go product.
Net loss for the first quarter of 2022 was $0.9
million, as compared to a loss of $0.6 million in the first quarter
of 2021. G&A expenses for the first quarter of 2022 increased
to $1.5 million, compared to $0.8 million in the first quarter of
2021. The increase in G&A was driven by a significant increase
in personnel costs compared to a pullback in the COVID-19 affected
quarter last year, including non-cash stock-based compensation, and
an increase in shipping and storage costs from the unprecedented
market price and labor shortages in the quarter. The Company is
working to offset these elevated costs by implementing a number of
cost initiatives, to include a price increase that went into effect
at the end of the first quarter of 2022, improving packaging,
equipment updates and ingredient and freight optimization.
As of March 31, 2022, the Company had
approximately $4.5 million of cash, and approximately $0.9 million
of inventory on its balance sheet.
The above information is presented in conformity
with accounting principles generally accepted in the United States.
In order to aid in the understanding of the Company’s business
performance, the Company has also presented below certain non-GAAP
measures, including EBITDA and Adjusted EBITDA, which are
reconciled in the table below to comparable GAAP measures.
Management believes that Adjusted EBITDA provides useful
information to the investor because it is directly reflective of
the performance of the Company. The exclusion of certain items
including stock compensation, stock issued for services, gain or
loss from debt extinguishments, gain or loss on derivative and the
costs of NASDAQ uplift in calculating Adjusted EBITDA can provide a
useful measure for period-to-period comparisons of the Company’s
core business performance. Adjusted EBITDA is not a recognized
measurement under GAAP and should not be considered as an
alternative to net loss, loss from operations or any other
performance measure derived in accordance with GAAP.
Adjusted EBITDA was a loss of approximately
$547,000 for the first quarter of 2022, compared to a loss of
approximately $437,000 for the first quarter of 2021. Adjusted
EBITDA in the first quarter of 2022 was negatively impacted by
increased personnel costs and increased shipping and storage costs.
A reconciliation of Adjusted EBITDA to net (loss) is provided
below.
|
|
For the three months ended March 31, |
|
|
|
2022 |
|
|
2021 |
|
Net loss |
|
$ |
(894,509 |
) |
|
$ |
(591,519 |
) |
|
|
|
|
|
|
|
|
|
Depreciation and
amortization |
|
|
161,146 |
|
|
|
146,933 |
|
Interest |
|
|
- |
|
|
|
59,091 |
|
EBITDA |
|
|
(733,363 |
) |
|
|
(385,495 |
) |
|
|
|
|
|
|
|
|
|
Stock based compensation |
|
|
28,036 |
|
|
|
(34,585 |
) |
Stock issued for services |
|
|
56,500 |
|
|
|
- |
|
Gain from derivative
liability |
|
|
- |
|
|
|
(16,787 |
) |
NASDAQ uplist(1) |
|
|
102,080 |
|
|
|
- |
|
Adjusted
EBITDA |
|
$ |
(546,748 |
) |
|
$ |
(436,867 |
) |
|
|
|
|
|
|
|
|
|
(1) Represents
various non-recurring costs associated with the January 2022 uplist
of our common stock to the Nasdaq Capital Market exchange. |
|
Conference Call
The conference call to discuss these results is
scheduled for today, Thursday, April 28, 2022, at 1:30 pm Pacific
Time (4:30 pm Eastern Time). Listeners can dial (877) 407-4018 in
North America, and international listeners can dial (201) 689-8471.
A telephonic playback will be available approximately two hours
after the call concludes and will be available through Thursday,
May 12, 2022. Listeners in North America can dial (844) 512-2921,
and international listeners can dial (412) 317-6671. Passcode is
13728295. Interested parties may also listen to a simultaneous
webcast of the conference call by logging onto the Company’s
website at www.barfresh.com in the Investors-Presentations
section.
About Barfresh Food Group
Barfresh Food Group, Inc. (Nasdaq: BRFH) is a
developer, manufacturer and distributor of ready-to-blend and
ready-to-drink beverages, including smoothies, shakes and frappes,
primarily for the education market, foodservice industry and
restaurant chains, delivered in bottled format as well as single
serving and bulk formats for on-site preparation. The company’s
single serving, on-site prepared product utilizes a proprietary,
patented system that uses portion-controlled pre-packaged beverage
ingredients, delivering a freshly made frozen beverage that is
quick, cost efficient, better for you and without waste. Barfresh
has a distribution partnership with the leading food distributor in
North America. For more information, please visit
www.barfresh.com.
Forward Looking Statements
Except for historical information herein,
matters set forth in this press release are forward-looking,
including statements about the Company’s commercial progress,
success of its strategic relationship(s), 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 statements
of historical fact, included in the press release 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
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, you 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
release 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, 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 the distribution of
this release, whether as a result of new information, future
events, changes in assumptions or otherwise.
Investor RelationsJohn
MillsICR646-277-1254John.Mills@icrinc.com
Deirdre
ThomsonICR646-277-1283Deirdre.Thomson@icrinc.com
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