Q1 2025 Barfresh Food Group Inc Earnings Call
Good afternoon, everyone and thank you for participating on today's first quarter 2025, corporate update call fall bar fresh food group.
Operator: Good afternoon everyone and thank you for participating on today's 1st Quarter 2025 Corporate Update Call for Barfresh Food Group.
Operator: Joining us today is Barfresh Food Group's founder and CEO, Riccardo Delicoste, and Barfresh Food Group's CFO, Lisa Roger. Following prepared remarks, we will open the call for your questions. The discussion today will include forward-looking statements, except for historical information herein, matters set forth on this call 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, success, of its strategic relation, 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.
Speaker Change: Joining us today is Bob fresh food group's founder and CEO Ricardo Deli costing.
Speaker Change: And bought fresh food groups C F OHL needs at all Joe.
Speaker Change: Following prepared remarks, we will open the call for your questions.
Speaker Change: The discussion today will include forward looking statements.
Speaker Change: Except for historical information matters set forth on this call I'll 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 sucks it offered strategic relation.
Speaker Change: And predictions of future financial performance.
Speaker Change: These forward looking statements I didn't fight, but the use of bullets, such as gorilla expand and speed intend estimate believe expect plan should hypothetical potential forecast and project.
Speaker Change: Continue good me predict anvil and variations of such words and similar expressions are intended to identify such forward looking statements.
Operator: All statements are other than the statements of historical fact that address activities, events, or developments that the company believes or anticipates will or may occur in the future of a forward-looking state. These statements are based on certain assumptions made based on experienced expected future developments and other factors that the company believes are appropriate under those 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 indicted or anticipated by such forward-looking statements.
Speaker Change: All statements other than the statements of historical facts that address activities events or developments that the company believes or anticipates will all my uncle and the future all forward looking statements.
Speaker Change: These statements are based on certain assumptions made.
Speaker Change: An expedient and expected future developments and other factors that the company believes are appropriate under the circumstances.
Speaker Change: Such statements are subject to a number of assumptions risks and uncertainties many of which are beyond the control of the company.
Speaker Change: Should one or more of these risks or uncertainties materialize or should underlying assumptions prove incorrect actual results may vary materially from those indicated all anticipated by such forward looking statements.
Speaker Change: Accordingly investors are cautioned not to place undue reliance on these forward looking statements, which speak only as of the date they Amit.
Operator: Accordingly, investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they are made.
Operator: The contents of this call 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 and the quarterly reports on Form 10-Q and current reports on Form 8-K. including any warning, risk factors and cautionary statements contained therein.
Speaker Change: The contents of this call 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, and our quarterly reports on Form 10-Q, and current reports on form 8-K.
Speaker Change: Including any warning risk factors and cautionary statements contained therein.
Operator: Furthermore, the company expressly disclaims any current intention to update publicly any forward-looking statements after this call whether as a result of new information, future events, changes in assumptions or otherwise.
Speaker Change: Furthermore, the company expressly disclaims any current intention to update publicly any forward looking statements. After this call whether as a result of new information future events changed.
Speaker Change: Changes in assumptions or otherwise.
Speaker Change: In order to aid in the understanding of the company's business performance. The company is also presenting certain non-GAAP measures, including adjusted gross profit.
Operator: In order to aid in the understanding of the company's business performance, the company is also presenting certain non-GAAP measures, including adjusted gross profit, EBITDA, which are reconciled in tables in the business update, released to the most comparable GAAP measures, and certain calculations based on its results, including gross margin and adjusted gross margin. The reconciling items are non-operational or non-cash costs, including stock compensation and other non-recurring costs, such as those associated with the product withdrawal. The related dispute and certain manufacturing relocation costs Management believes that adjusted gross profit EBITDA and adjusted EBITDA proved useful information to the investor because they are directly reflective of the performance of the company.
Speaker Change: Adjusted EBITDA, which as you can tell it in tables and the business update release to the most comparable GAAP measures and certain calculations based on the results, including gross margin.
Speaker Change: Adjusted gross margin.
Speaker Change: The reconciling items are non operational or non cash costs, including stock compensation and other nonrecurring costs.
Speaker Change: Associated with the product withdrawal.
Speaker Change: The related dispute and certain manufacturing relocation cost.
Speaker Change: Management believes that adjusted gross profit EBITDA and adjusted EBITDA from proved.
Speaker Change: Useful information to the investor because they are directly reflective of the performance of the company.
Riccardo Delicoste: Now I will turn the call over to the CEO of Barfresh Food Group, Mr. Riccardo Delicoste. Please go ahead, sir.
Speaker Change: Now I will turn the call over to the seal a ball fresh food group, Mr. Ricardo Deli coffee.
Go ahead Sir.
Speaker Change: Good afternoon, everyone and thank you for joining us for our first quarter 2025 earnings call.
Riccardo Delicoste: Good afternoon, everyone, and thank you for joining us for our first quarter 2025 earnings call. We achieved our revenue and growth margin guidance for the first quarter and continue to sign new customers in the education channel as we continue to invest in our manufacturing operations to be well prepared for the upcoming 2025 school year. Based on the progress we are making towards additional manufacturing capacity and our first quarter results, we are reiterating our full year revenue guidance of 35-55% growth. Our revenue guidance accounts for continuing orders from existing customers. to confirm bids, while also considering estimated revenue from end-user opportunities at later stages in our sales pipeline.
Speaker Change: We achieved our revenue and gross margin guidance for the first quarter and continued to sign new customers in the education channel as we continue to invest in our manufacturing operations to be well prepared for the upcoming 2025 school yet.
Speaker Change: Based on the progress we are making towards additional manufacturing capacity and our third quarter results. We are reiterating our full year revenue guidance of 35% to 55% right.
Speaker Change: Our revenue guidance accounts for continuing orders from existing customers.
Speaker Change: While also considering estimated revenue from end user opportunities at later stages in our sales pipeline.
Speaker Change: I would like to now provide an update on our manufacturing capacity.
Riccardo Delicoste: I would like to now provide an update on our manufacturing capacity. During the fourth quarter of 2024, we began onboarding two new strategic partners. This entails important equipment investments by ourselves and our partners, which will continue into the second quarter.
Speaker Change: During the fourth quarter of 2024, we began onboarding two new strategic partners. This entitles important equipment investments by ourselves and our partners, which will continue into the second quarter.
Riccardo Delicoste: While this transition creates near-term cost pressures on our first and second quarter bottom line results, we expect all of the investments and onboarding process to be complete by the end of Q2 2025, bringing us to full manufacturing capacity in time for our high season selling in the education channel, which picks up with back-to-school demand in Q3. Once our new manufacturing partner for Twist & Go is fully online, we will increase our bottling capacity, enabling us to expand our revenue in the back half of this year. In addition, we expect our gross and operating margins to dramatically improve in the back half of 2025, enabling us to achieve positive adjusted EBITDA in the second half of the year.
Speaker Change: While this transition creates near term cost pressures on our first and second quarter bottom line results. We expect all of the investments and Onboarding process to be complete by the end of Q2 2020 by bringing us to full manufacturing capacity in time for a high season, selling E education channel, which pick.
Speaker Change: Up with back to school demand in Q3.
Speaker Change: Once our new manufacturing partner for twist and go East fully online, we will increase our bottling capacity, enabling us to expand our revenue in the back half of this year.
Speaker Change: In addition, we expect our gross and operating margins to dramatically improve in the back half of 2025, enabling us to achieve positive adjusted EBITDA in the second half of the.
Speaker Change: The cost associated with Onboarding, a new car manufacturers, including higher supply chain expenses from sourcing products from multiple locations and final costs are expected to be completed by the end of the second quarter.
Riccardo Delicoste: The costs associated with onboarding our new co-manufacturers, including higher supply chain expenses from sourcing products from multiple locations and trial costs, are expected to be completed by the end of the second quarter.
Speaker Change: Turning to our product portfolio.
Riccardo Delicoste: turning to our product portfolio. We launched a new pop-and-go 100% juice freeze pops in our education channel during Q4, and it continues to gain traction as we enter the second quarter. While this new product contributed modest revenue in the first quarter, we're excited about its potential.
Speaker Change: We launched a new pop them going 100% juice phrase pumps in our education channel during Q4 and it continues to gain traction as we enter the second quarter.
Speaker Change: While these new product contributed modest revenue in the first quarter, we're excited about its potential.
Riccardo Delicoste: Unlike our breakfast-focused offerings, this product targets the lunch day part, a market opportunity significantly larger than breakfast. On the sales front, our robust sales network is now covering 95% of the U.S. As a reminder, while we've had strong success in new customer acquisition in the education channel, we're still only at a 5% market penetration, representing significant runway for growth.
Speaker Change: Unlike our breakfast focused offerings these product targets the lunch day part a market opportunity significantly larger than breakfast.
Speaker Change: On the sales front, our robust sales network is now covering 95% of the U S.
Speaker Change: As a reminder, while we've had strong success you need customer acquisition channel.
Speaker Change: Channel, we're still only at a 5% market penetration representing significant runway for growth.
Riccardo Delicoste: many of these new wins will not start contributing to our top line until the back half of 2025. During the second quarter, we will continue to make the appropriate investments in our manufacturing and supply chain, but we fully believe this will be completed by the end of the second quarter. Our expanded manufacturing capacity, new product introductions and robust sales network give us confidence in our growth projections. More importantly, we expect to see meaningful margin improvement as we realise the benefits of our operational investments.
Speaker Change: Any of these new wins will not start contributing to our top line until the back half of 2025.
Speaker Change: During the second quarter, we will continue to make the appropriate investments in our manufacturing and supply chain, but we fully believe this will be completed by the end of the second quarter.
Speaker Change: Our expanded manufacturing capacity, new product introductions, and robust sales network give us confidence in our growth projection.
Speaker Change: More importantly, we expect to see meaningful margin improvement as we realize the benefits of our operational investments.
Riccardo Delicoste: Before I turn it over to Lisa for a detailed financial review, I want to thank our employees, partners and shareholders for their support during this transition period for our company. Investment we have made into our overall company during the past few quarters will enable us to achieve profitable growth in the back half of 2025, and we are very excited about our I'll now turn the call over to our CFO, Lisa Roger.
Speaker Change: Before I turn it over to lakes up for a detailed financial review I want to thank our employees partners and shareholders for their support during this transition period for our company.
Speaker Change: The investment we've made into our overall company during the past few quarters will enable us to achieve profitable growth in the back half of 2025, and we are very excited about our future.
Speaker Change: I'll now turn the call over to our CFO, Lisa Roger Lace up Thank you Ricardo.
Lisa Roger: Lisa? Thank you, Riccardo. As we guided during our last earnings call, our first quarter revenue remained consistent with Q4 levels as we continued to manage our supply chain through a transitional period. Revenue for the first quarter of 2025 was $2.9 million, compared to $2.8 million for the first quarter of 2024. The year-over-year increase in revenue is primarily driven by expanded bottle capacity at our existing bottle manufacturer, enabling higher sales volume compared to the prior year. Gross margin for the first quarter of 2025 was 31% compared to 41% for the first quarter of 2024. Adjusted gross margin for the first quarter of 2025 was 31% compared to 43% in the prior year period.
Speaker Change: During our last earnings call. Our first quarter revenue remained consistent with Q4 levels as we continued to manage our supply chain through a transitional period.
Speaker Change: Revenue for the first quarter of 2025 with $2 9 million compared to $2 8 million for the first quarter of 2020 for the.
Speaker Change: The year over year increase in revenue is primarily driven by expanded bottle capacity at our existing bottle manufacturer, enabling higher sales volume compared to the prior year.
Speaker Change: Gross margin for the first quarter of 2025 was three 1% compared to 41% for the first quarter of 2024.
Speaker Change: Adjusted gross margin for the first quarter of 2025 was 31% compared to 43% in the prior year period.
Lisa Roger: Our adjusted gross margin for the first quarter of 2025 was consistent with Q4 2024 adjusted gross margin of 30% as expected. The year-over-year decrease was due primarily to temporary production inefficiencies and higher supply chain expenses related to sourcing elements of our production process from multiple locations as we continue to enhance our supply chain capabilities.
Speaker Change: Our adjusted gross margin for the first quarter of 2025 was consistent with Q4 2024, adjusted gross margin of 30% as expected.
Speaker Change: The year over year decrease was due primarily to temporary production inefficiencies and higher supply chain expenses related to sourcing elements of our production process for multiple locations as we continue to enhance our supply chain capabilities.
Speaker Change: We expect our gross margin to normalize in the second half of 'twenty 'twenty five as new car manufacturers are operating at a higher capacity and capability, improving our supply and cost structure.
Lisa Roger: We expect our gross margin to normalize in the second half of 2025 as new co-manufacturers are operating at a higher capacity and capability, improving our supply and cost structure. Selling, marketing, and distribution expense for the first quarter of 2025 increased to $824,000, or 28% of revenue, compared to $694,000, or 25% of revenue in the first quarter of 2024. The year-over-year increase is a result of higher personnel costs and broker commissions due to expansion of our broker network, as well as an increase in sample expense due to the introduction of Pop'n Go 100% juice freeze pop.
Speaker Change: Selling marketing and distribution expense for the first quarter of 2025 increased to 824000 or 28% of revenue compared to 694000 or 25% of revenue in the first quarter of 2024.
Speaker Change: The year over year increase was a result of higher personnel costs and broker commissions due to expansion of our broker network as well as an increase in sample expense due to the introduction of popping go 100% juice freeze pumps.
Speaker Change: G&A expenses for the first quarter of 2025 or 747000 compared to 855000 in the same period last year.
Lisa Roger: GNA expenses for the first quarter of 2025 were $747,000 compared to $855,000 in the same period last year. The year-over-year decrease in GNA was driven by a reduction in legal, professional, and consulting fees and lower stock-based compensation as a result of lower expected attainment under our performance stock unit program, partially offset by an increase in personnel-related expenses. Net loss for the first quarter of 2025 was $761,000 compared to a net loss of $449,000 in the first quarter of 2024. The increase in net loss was primarily due to the reduction in gross margin as previously discussed.
Speaker Change: The year over year decrease in G&A was driven by a reduction in legal professional and consulting fees and lower stock based compensation as a result of lower expected attainment under our.
Speaker Change: Performance stock unit program, partially offset by an increase in personnel related expenses.
Speaker Change: Net loss for the first quarter of 2025 was 761000 compared to a net loss of 449000 in the first quarter of 2024.
Speaker Change: The increase in net loss was primarily due to the reduction in gross margin as previously discussed.
Lisa Roger: For the first quarter of 2025, our adjusted EBITDA was a loss of approximately 506,000 compared to a gain of approximately 53,000 in the same period last year. Adjusted EBITDA in the first quarter of 2025 was impacted by costs associated with sourcing elements of the production process from multiple locations, while new co-manufacturers complete equipment installations required to perform as full service partners. This resulted in higher logistics costs and less efficient production than in the first quarter of 2024.
Speaker Change: For the first quarter of 2025, our adjusted EBITDA was a loss of approximately 506000 compared to a gain of approximately 53000 in the same period last year <unk>.
Speaker Change: Adjusted EBITDA in the first quarter of 2025 was impacted by costs associated with sourcing elements of the production process from multiple locations, while new co manufacturers complete equipment installations required to perform its full service partners.
Speaker Change: This resulted in higher logistics costs and less efficient production in the first quarter of 'twenty 'twenty four.
Lisa Roger: The equipment is expected to be delivered, installed, and operational by the end of the second quarter, and we should return to our optimized production and distribution network in the back half of the year.
Speaker Change: Equipment is expected to be delivered and installed and operational by the end of the second quarter and we should return to our optimized production and distribution network in the back half of the year.
Speaker Change: Now moving onto our balance sheet as of March 31st 2025, we had approximately $3 4 million of cash and accounts receivable and approximately $1 1 million of inventory on our balance sheet.
Lisa Roger: Now moving on to our balance sheet. As of March 31, 2025, we had approximately $3.4 million of cash and accounts receivable and approximately $1.1 million of inventory on our balance sheet.
Lisa Roger: The company has taken measures to reduce its liquidity requirements, including compensating its director's employees with equity to reduce cash compensation requirements, obtaining non-recourse litigation financing, and securing receivables financing. In February 2025, the company secured $3 million in growth financing. This capital raise enhances our financial position and supports scaling of production capacity to meet growing customer demand, particularly in the education channel.
Speaker Change: The company has taken measures to reduce its liquidity requirements, including compensating its directors employees with an equity to reduce cash compensation requirements, obtaining nonrecourse litigation financing and securing receivables financing.
Speaker Change: February 2025, the company secured 3 million and gross financing this capital raise and henkels, our financial position and support scaling of production capacity to meet growing customer demand, particularly in the education channel now.
Riccardo Delicoste: Now I will turn the call back to Riccardo for closing remarks. Thank you, Lisa. For the full year of 2025, we continue to expect significant revenue growth of between 35% and 55%, with margin expansion beginning in the second half as our manufacturing capabilities come online.
Ricardo Deli: Now I will turn the call back to Ricardo for closing remark.
Ricardo Deli: Thank you Lisa for the full year of 2025, we continue to we expect significant revenue growth of between 35, and 55% with margin expansion beginning in the second half as our manufacturing capabilities come online.
Ricardo Deli: We look forward to updating you on our progress in the quarters ahead, and with that I would like to open up the line for questions operator.
Riccardo Delicoste: We look forward to updating you on our progress in the quarters ahead.
Operator: And with that, I would like to open up the line for questions. Operator? Thank you.
Ricardo Deli: Thank you.
Operator: Ladies and gentlemen, we will now begin the question and answer session. If you would like to ask a question, please press star and 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star and 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Ladies and gentlemen, we will wait for a moment while we poll for questions.
Speaker Change: Ladies and gentlemen, we will now begin the question and answer session. If you'd like to ask a question. Please press star and one on your telephone keypad.
Ricardo Deli: A confirmation tone will indicate your line is in the question queue.
Ricardo Deli: You May press star two if you'd like to remove your question from the queue.
Ricardo Deli: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the stock east.
Ricardo Deli: Ladies and gentlemen, we will wait for a moment, while we poll for questions.
Ricardo Deli: Yeah.
Speaker Change: The first question comes from the line of Anthony Vendetti.
Anthony Vendetti: The first question comes from the line of Anthony Vendetti from Maxim Group. Please go ahead. Yes, thank you. It sounds like the co-manufacturing partners will be up and running by the end of second quarter 25 with all the equipment that you need to get everything ready to go. Is there anything that could slow that down, Riccardo, or is everything on track? I mean, we don't know what we don't know, but we've done an enormous amount of testing. In actual fact, we went live on some of the equipment last week and we had our first production runs with the new change parts that have been installed.
Speaker Change: From Maxim Group. Please go ahead.
Anthony Vendetti: Yes. Thank you.
Speaker Change: It sounds like the.
Speaker Change: [noise] co manufacturing partners will be up and running by the end of second quarter 25, with all the equipment that you need to get everything.
Speaker Change: Ready to go.
Anthony Vendetti: Is there anything that could that could slow that down ricardo or or.
Speaker Change: Is everything everything on track.
Anthony Vendetti: I mean, we don't know what we've done.
Speaker Change: But.
Speaker Change: We've done an enormous amount of chassis in actual fact, we went live on some of the equipment last week.
Speaker Change: And we had outflows production runs with a due a change parts that are being installed.
Riccardo Delicoste: We do have a little bit more, you know, just refinement of the process, but we expect that to be completed over the next couple of weeks. So definitely before the end of Q2, we expect it to be up and running and it's already started in part this week, technically. So we feel very good about it. Okay, great.
Speaker Change: We do have a little bit more.
Speaker Change: You know just a refinement of the prices, but we expect that to be completed over the next couple of weeks. So definitely before the end of Q2, we expect it to be up and running and it's it's already started and part of this.
Speaker Change: This week technically so we feel very good about it.
Speaker Change: Okay, Great and then.
Riccardo Delicoste: And then, you know, I know we still have to finish out the this the 24-25 school year, but has the bidding process started for the 25-26 school year? And what is that that pipeline look like at this point? Yeah, it most definitely has started. It started, you know, a couple of months ago. So that's really how we're providing the guidance based on our existing customers' expectations of repeat orders, as well as a portion of what we have in our pipeline already. And then, you know, and there's been some more kind of customers being added and will continue to be added to that pipeline as we, you know, move through the bidding process.
Speaker Change: I know, we still have to finish out the this the.
'twenty four 'twenty five school year, but has the bidding process started for.
Speaker Change: For the 25 26 school year, and what is that that pipeline look like at this point.
Speaker Change: Yeah. Most definitely has started it started.
Speaker Change: Months got it.
Speaker Change: So that's really how we are providing the guidance based on our existing customers our.
Speaker Change: Expectations of repeat orders as well as a portion of what we have in our pipeline already.
Speaker Change: And then.
Speaker Change: And there's been some more kind of customers being added and will continue to be added to that pipeline as we move through the bidding process. We should start to be notified of the beats up until the end of June really we still get notifications.
Riccardo Delicoste: We should start to be notified of the bids up until the end of June, really. We still get notifications of them being awarded. We've completed a lot of them. The awards haven't necessarily all come back yet, but over the next couple of months we expect those to come back.
Speaker Change: <unk> been awarded with completed a lot of them.
Speaker Change: The awards haven't necessarily all come back yet.
Speaker Change: Over the next couple of months, we expect those to come back.
Speaker Change: Okay and.
Riccardo Delicoste: Okay, and This year, in particular, whether it's from some of your existing customers or some of the new potential schools and school districts, are they bidding, are they interested in both the Twist and Go and the Pop and Go, or is it? Is it more the twist and go and then the pop and go is sort of, you know, an add on for some, but not all. I mean, I wouldn't say that's for everyone, everyone's adding it to their bids, but we are definitely completing quite a number of bids with the Pop'n Go. Okay, great, great.
Speaker Change: This year in particular.
Speaker Change: Whether it's from some of your existing customers or some of the new.
Speaker Change: Potential schools and school districts are they are they bidding.
Speaker Change: Are they interested in both the twist and go into pop 'n go or.
Speaker Change: Is it is it.
Speaker Change: Is it more the twist and go and then the pop 'n go is sort of.
Speaker Change: An add on for some but not all.
Speaker Change: I mean, I wouldn't say that it's been.
Speaker Change: Everyone's adding it to their bids, but we are definitely completing quite a number of bids with the pop 'n go on them.
Speaker Change: Okay, Great Great and then you have with these new with these new co co co Packers and.
Riccardo Delicoste: And you have with these new with these new co-packers and co-manufacturing partners, you have all the inventory you need to meet that demand for the for the 25-26 school year? Correct, as it stands right now.
Speaker Change: Co manufacturing partners you have all the inventory you need to meet that demand for the for the 'twenty five 'twenty six school year.
Speaker Change: Correct.
Speaker Change: Right now keeping in mind that over the last few months, we've been doing an enormous amount of testing on the pumps in the customers' taste testing, where the students with the administrators. So there's been a lot of work that's been happening in the background.
Riccardo Delicoste: Keeping in mind that over the last few months... we've been doing an enormous amount of testing on the pop. in the background.
Speaker Change: Okay and.
Riccardo Delicoste: Okay, and are you currently staffed appropriately?
Speaker Change: Are you currently staffed appropriately do you need to add.
Riccardo Delicoste: Do you need to add any any additional salespeople or other or other, you know, senior execs to make sure all this logistics work out? And I'm just curious, where do you feel like you stand? We feel like we feel like we've got the right amount of staff where we are and what we need to achieve. Okay, great. All right, great. Thanks.
Speaker Change: Any any additional salespeople or there are other.
Speaker Change: Senior execs to to make sure all this the logistics work out.
Speaker Change: I'm, just curious where do you feel like you stand.
Speaker Change: We feel like we feel like we've got the right amount of software, we are and what we need to achieve.
Speaker Change: Okay great.
Speaker Change: Alright, great. Thanks, I'll hop back in the queue I appreciate it.
Anthony Vendetti: I'll hop back in the queue. Appreciate it. Thanks. Thank you.
Speaker Change: Thanks.
Speaker Change: Thank you.
Speaker Change: Ladies and gentlemen, if you wish to ask a question Please press star and one.
Operator: Ladies and gentlemen, if you wish to ask a question, please press star and 1. Once again, a reminder, ladies and gentlemen, if you wish to ask a question, please press star and 1.
Speaker Change: Once again, a reminder, ladies and gentlemen, if you wish to ask a question. Please press star and one.
Speaker Change: The next question comes from the line of uncle Soccer.
Ankur Sagar: The next question comes from the line of Ankur Sagar, an investor, please go ahead. Hey, good afternoon, Riccardo and Lisa. Thank you for taking my questions. Just have a couple, you know, you have been bottlenecked with this co-manufacturing and you expect to have this completed by Q2. Anything you can share in terms of, you know, what sort of manufacturing capacity will this provide to you in terms of the revenue, even if it's a range? You know, could there be an upside to even the guidance that you have provided if you have, if you're able to, you know, fulfill more?
Speaker Change: And in West L. Please go ahead.
Speaker Change: Yeah.
Speaker Change: Hey, good afternoon, Ricardo and Lisa Thank you for taking my questions.
Speaker Change: A couple.
Speaker Change: No.
Speaker Change: You have been bottleneck with this Goldman and factoring.
Speaker Change: And you expect to have this completed by Q2 anything you can share in terms of what sort of manufacturing capacity will disappear why do you in terms of the revenue even if it's a range.
Speaker Change: You know could there be an upside.
Speaker Change: Even the guidance that you provided if you have if you were able to fulfill more.
Speaker Change: I assume you probably have the customer base and the orders to fulfill that as well.
Riccardo Delicoste: I assume you probably have the, you know, customer base and the orders to fulfill that as well. Yeah, it really depends on the product. right? Because we have and Barfresh. um in that in that rain. Again, it depends on the product. And, and, you know, you know, I think you probably mentioned it in the prepared remarks, but just to clarify, I mean, with these co-manufacturing is coming up online, you expect the gross margin to track back to, you know, normally about 40s. Is that fair to say? It's at about 40 is what we're expecting. We have been spending a lot of money just trying to get the commands up and running, whether it's testing, getting product out that we've had to double handle, trial costs, you name it.
Speaker Change: Yeah, it really depends on product mix.
Speaker Change: Because we have.
Speaker Change: A significant amount of capacity in the pumping guys are also.
Speaker Change: Also in the in the Cottons and we're now just opening up that capacity will be with the bottles as well.
Speaker Change: Anyway.
Speaker Change: In a quarter is probably quite doable, where we are.
Speaker Change:
Speaker Change: In that in that range.
Speaker Change: Again, it depends on the it depends on the product mix.
Speaker Change: Okay, Okay, and and you know.
I think you probably mentioned in the prepared remarks, but just to clarify I mean with these.
Speaker Change: Core manufacturing is coming up online you expect the gross margin to trend back to normally about forties.
Speaker Change: Is that fair to say.
Speaker Change: It's about it's been about.
Speaker Change: At about 40 is what we're expecting we have been spending a lot of money just trying to get the kind of ends up and running whether it's testing getting product out, but we've had to double handle.
Speaker Change: Trial costs you name it there's been an enormous amount of money being spent so now that the.
Riccardo Delicoste: There's been an enormous amount of money being spent. So now that the changes are being made at the plant, we expect the margins to... get back to where they, you know, should have been and, you know, hopefully we'll see some upside in that as well.
Speaker Change: Changes are being made at the plants, we expect the margin to.
Speaker Change: Get back to where they should've been and hopefully, we'll see some upside in that as well.
Speaker Change: Okay.
Riccardo Delicoste: Okay.
Riccardo Delicoste: All right.
Speaker Change: Alright, thank you.
Riccardo Delicoste: Thank you.
Speaker Change: Thanks.
Speaker Change: Thank you.
Speaker Change: Ladies and gentlemen, if you wish to ask a question Please press star and one.
Operator: Ladies and gentlemen, if you wish to ask a question, please press star and 1. Once again, a reminder, ladies and gentlemen, if you wish to ask a question, please press star and 1.
Speaker Change: Once again, a reminder, ladies and gentlemen, if you wish to ask a question. Please press star and one.
Ricardo Deli: As there are no further questions I would now hand, the conference over to Ricardo daily costs that for his closing comments.
Riccardo Delicoste: As there are no further questions, I would now hand the conference over to Riccardo Dele Costa for his closing comments. Thanks everyone. We look forward to updating you on our progress and upcoming development shortly. Thanks. Thank you.
Ricardo Deli: Thank you everyone. We look forward to updating you on our progress and upcoming development shortly thanks.
Ricardo Deli: Thank you, ladies and gentlemen, the conference a bar fresh food group has now concluded. Thank you for your participation you may now disconnect your lines.
Operator: Ladies and gentlemen, the conference of Barfresh Food Group has now concluded. Thank you for your participation. You may now disconnect your lines.
Ricardo Deli: Yeah.
Ricardo Deli: [music].
Ricardo Deli: Okay.
Ricardo Deli: [music].
Ricardo Deli: Yeah.
Ricardo Deli: Okay.
Ricardo Deli: Okay.
Ricardo Deli: Hum.
Ricardo Deli: [music].