HF Foods Group Inc. — Third Quarter 2026 Earnings Summary

Financial Performance:

• Net revenue for the three months ended September 30, 2026, was $319.6 million, an increase of 4.1% year-over-year from $307.0 million.
• Net revenue for the nine months ended September 30, 2026, was $955.4 million, an increase of 3.8% year-over-year from $920.3 million.
• GAAP net loss for the third quarter was $4.2 million, an increase of 385.9% from a net loss of $0.9 million in the prior year period.
• GAAP net loss for the nine months was $0.3 million, compared to a net loss of $1.9 million in the prior year period.
• Adjusted net income for the third quarter was $2.1 million, a decrease of 52.1% from $4.3 million in the prior year period.
• Adjusted net income for the nine months was $11.9 million, a decrease of 16.3% from $14.2 million in the prior year period.
• Adjusted EBITDA for the third quarter was $11.0 million, a decrease of 6.3% from $11.7 million in the prior year period.
• Adjusted EBITDA for the nine months was $34.7 million, a decrease of 1.8% from $35.4 million in the prior year period.
• Gross profit for the third quarter was $53.4 million (16.7% margin), compared to $50.4 million (16.4% margin) in the prior year.
• Gross profit for the nine months was $159.0 million (16.6% margin), compared to $156.5 million (17.0% margin) in the prior year.
• Distribution, selling, and administrative expenses for the third quarter were $55.2 million (17.3% of revenue), up 11.9% from $49.3 million (16.1% of revenue) in the prior year.
• Distribution, selling, and administrative expenses for the nine months were $156.9 million (16.4% of revenue), up 4.5% from $150.1 million (16.3% of revenue) in the prior year.
• Cash provided by operating activities for the nine months was $24.1 million, compared to $4.5 million in the prior year period.
• As of September 30, 2026, the Company held $16.4 million in cash and had access to approximately $49.1 million in additional funds through a $140.0 million line of credit.
• Total liabilities as of September 30, 2026, were $414.4 million, compared to $337.9 million as of December 31, 2025.

Guidance and Future Outlook:

• Management stated confidence in turning near-term cost pressure into long-term value for shareholders.
• The Company is focused on route and warehouse efficiency, purchasing discipline, and cross-selling across the Southeast and Midwest.
• The transformation foundation is largely built, with a focus on continuing to mitigate industry-wide fuel cost pressures.

Business Segments and Product Lines:

• Net revenue growth in the third quarter was primarily driven by volume growth in Seafood and pricing improvements in Produce and Commodity, partially offset by price decreases in Meat & Poultry.
• The Company completed the acquisition of Searay Foods on August 31, 2026, marking its first expansion outside the United States.
• Searay Foods contributed $4.2 million to third-quarter net revenue and approximately $0.6 million to third-quarter Adjusted EBITDA, reflecting one month of contribution.
• Gross profit margin improvement in the third quarter included incremental margin gained from Searay and IEEPA tariff refunds.
• Gross profit margin improvement in the nine-month period included IEEPA tariff refunds and incremental margin from Searay.

Market and Competitive Landscape:

• HF Foods is a leading distributor of international foodservice solutions to Asian restaurants and other businesses across the United States and Canada.
• Industry-wide fuel costs continued to weigh on operating expenses during the quarter.
• The Company leverages its nationwide network of distribution centers and strong relations with growers and suppliers in the US and Asia.

Risks and Challenges:

• Elevated fuel costs and truck lease expenses drove increases in distribution, selling, and administrative expenses.
• The Company faces risks related to the integration of Searay and the realization of anticipated benefits and synergies.
• Potential risks include tariff-related cost increases, demographic trends affecting demand, and risks associated with cross-border operations and expansion into international markets.
• Risks also include the ability to consummate the operational transformation plan as anticipated and the impact of the plan on sales and efficiencies.

Management Commentary and Tone:

• Felix Lin, President and Chief Executive Officer, described third-quarter results as reflecting "solid top line growth," marking the seventh consecutive quarter of year-over-year net revenue growth.
• Management noted they are "actively managing through this pressure" via efficiency programs built through their transformation.
• The tone was confident regarding the Company's ability to strengthen its position as the leading nationwide Asian specialty food distributor.

Other Key Points:

• The acquisition of Searay Foods was completed on August 31, 2026.
• The Company refinanced its property portfolio and amended/increased its revolving credit facility during the quarter, contributing to non-recurring professional services expenses.
• The Company recognized a gain from the sale of a Utah building during the nine-month period.
• The Company received IEEPA tariff refunds during the quarter and nine-month period.
• The Company recognized an employee retention credit of $1.8 million (including interest) during the nine-month period.
• Capital expenditures for the nine months were $22.3 million, and proceeds from the sale of property and equipment were $4.3 million.
• Net cash used in investing activities for the nine months was $59.6 million, primarily due to the acquisition of Searay Foods ($41.8 million) and capital expenditures.
• Net cash provided by financing activities for the nine months was $43.4 million, driven by proceeds from the line of credit and debt issuance.