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LOS ANGELES, Nov. 14, 2019 (GLOBE NEWSWIRE) -- Barfresh Food Group, Inc. (OTCQB: BRFH), a manufacturer of frozen, ready-to-blend beverages, is providing an update on recent business developments in conjunction with the filing of its form 10-Q for the third quarter ended September 30, 2019.
Riccardo Delle Coste, the Company’s Chief Executive Officer, stated, “Revenue increased 13% on a sequential basis and we strengthened our position within the school channel as our entire product offerings are now approved for the USDA reimbursement standards. In addition, we continued to improve general and administrative expense, which improved 22% compared to last year, and adjusted EBITDA continued to improve on a sequential basis and compared to the same period last year. We are implementing additional manufacturing, shipping and overall efficiency improvements that will continue to improve our operating margins and drive improved EBITDA in 2020.”
Mr. Delle Coste continued, “As we enter the fourth quarter of 2019, our product offerings meet the USDA reimbursement standards and we believe that by working with our leading distributors and direct salesforce, our existing and new product offerings will accelerate our school wins across all 50 states. We will be adding new offerings to this channel during the first quarter of 2020 that we expect will increase our sales per school and increase the adoption by new schools utilizing our products to meet dietary guidelines. We also continue to successfully expand our military channel both domestically and internationally.”
Revenue for the third quarter of 2019 was $1.56 million, an increase of 13% on a sequential quarter basis. The sequential improvement in revenue was primarily the result of expansion in the military channel as well as regional and national restaurants. Gross margin for the third quarter was 54%, as compared with last year’s third quarter gross margin of 55.3%. The company anticipates gross profit percentage for the fourth quarter of 2019 to be comparable to the third quarter of 2019.
Operating loss for the third quarter of 2019 improved to $0.95 million, as compared with $1.4 million in the third quarter of 2018. The improvement was primarily due to lower G&A expenses.
As of September 30, 2019, the Company had $1.3 million of cash and $0.8 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 cash flow of the Company. The primary factors in reconciling these items are non-cash costs, including stock compensation, stock issued for services, and gain or loss on the sale of derivatives.
Adjusted EBITDA improved to a loss of $0.6 million, compared to a loss of $0.8 million for the three-month period ended September 30, 2018. A reconciliation of adjusted EBITDA to net (loss) is provided below.
|For the three months ended September 30,||For the nine months ended September 30,|
|Depreciation and Amortization||139,738||146,427||496,789||378,181|
|Stock based compensation||67,185||134,082||338,683||498,527||*|
|Stock issued for Services||140,874||50,000||321,914||150,000||**|
|Gain/Loss on Sale of Derivatives||(704,798)||296,211||(790,072)||544,107|
|*Stock based compensation issued to employees|
|** Stock based payment issued to directors and third party services|
The conference call to discuss these results is scheduled for today, Thursday, November 14, 2019, 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. Participants from the Company will be Riccardo Delle Coste, CEO, Joseph Cugine, President, and Raffi Loussararian, Vice President of Finance.
A telephonic playback will be available approximately two hours after the call concludes and will be available through Thursday, November 28, 2019. Listeners in North America can dial (844) 512-2921, and international listeners can dial (412) 317-6671. Passcode is 13696346.
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. (OTCQB: BRFH) is a developer, manufacturer and distributor of ready-to-blend beverages, including smoothies, shakes and frappes, primarily for restaurant chains and the foodservice industry. The company's proprietary, patented system uses portion-controlled pre-packaged beverage ingredients that deliver freshly made frozen beverages that are quick, cost efficient, better for you and without waste. Barfresh has an exclusive 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 within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, including statements about the Company's commercial progress and 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", among others. 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 and may not materialize. Investors are cautioned that any such statements are not guarantees of future performance. The contents of this release should be considered in conjunction with the warnings, risk factors and cautionary statements contained in the Company's recent filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K and Quarterly Report on Form 10-Q. Furthermore, the Company does not intend, and is not obligated, to update publicly any forward-looking statements, except as required by law.