Barfresh Food Group (BRFH) investor relations material

Executive summary

• Q1 2026 revenue rose 92% year-over-year to $5.63 million, exceeding expectations due to strong Arps Dairy performance and expanded production capacity.

• Net loss narrowed to $661,000 from $761,000 year-over-year, reflecting operational improvements despite higher interest expense from new debt.

• Adjusted EBITDA loss improved to $238,000 from $506,000 year-over-year, though below guidance due to lower-margin revenue mix and startup inefficiencies.

• Operational focus remains on manufacturing transition, customer base rebuilding, and facility expansion.

Financial highlights

• Gross margin declined to 18% from 31% year-over-year, impacted by the integration of Arps Dairy, product mix, and transition costs.

• Selling, marketing, and distribution expenses fell to $697,000 from $824,000, reflecting lower personnel and sampling costs.

• G&A expenses were $755,000, nearly flat year-over-year.

• Interest expense rose to $225,000 from $23,000, reflecting new convertible notes and acquisition-related debt.

• Cash and accounts receivable totaled $4.1 million as of March 31, 2026; inventory: $1.8 million.

Outlook and guidance

• Full-year 2026 revenue guidance reaffirmed at $28–$32 million; adjusted EBITDA expected at $3.2–$3.8 million.

• Q2 2026 revenue expected at $5.2–$5.6 million, with adjusted EBITDA loss of $0.3–$0.2 million.

• Management expects quarterly improvements in revenue and profitability as facility enhancements are completed and new school contracts ramp up.

• Normalized gross margin expected to return to low 40% range as inefficiencies are resolved.

• Ongoing risks from supply disruptions and construction costs noted.