Improves Balance Sheet, Generates $146,000 in Cash from Operations
Miami, Florida, May 17, 2021 (GLOBE NEWSWIRE) -- Blue Star Foods Corp. (OTC:BSFC), (“Blue Star”), a sustainable seafood company, announced today its financial results for the fiscal quarter ended March 31st, 2021 (“Q1-2021”).
Q1-2021 Financial Highlights
Sales Impacted by Industry Wide Supply Chain Issues. Revenue for the three months ended March 31, 2021 was $2.5 Million as compared to $4.6 Million for the three months ended March 31, 2020.
This was a result of a decrease in poundage sold primarily due to the impact of the continuing COVID-19 pandemic, as well as significant and prolonged supply chain and transit issues. The company was not able to fill all the orders it received in Q1-2021.
Reduction of Operating Expenses. Operating Expenses for the three months ended March 31, 2021 decreased 26% to $748,000 as compared to $1.0 million for the three months ended March 31, 2020.
This decrease is primarily attributable to the reduction of strategic variable expenses across all subsidiaries as well as all fixed expenses related to all of the company’s operating businesses.
Continuous improvement in debt management. Reduced the working line of credit balance by 85% to $780,000 for the three months ended March 31, 2021, down from $5.0 million for the three months ended March 31, 2020.
This was a result of better treasury management and an improved inventory turnover ratio.
Profitability. Net Income for the three months ended March 31, 2021 was a loss of $478,000 compared with a loss of $854,000 for the three months ended March 31, 2020. The Adjusted Cash Net Income(1) for the three months ended March 31st, 2021 was a loss of $171,000 compared to a loss of $436,000 for the three months ended March 31, 2020.
The improvement was partially due to lower interest expense.
“It is important to distinguish the cash profile of our core operating businesses from the non-recurring, non-cash, stock-based expenses related to M&A transactions that are included in our financial results,” said John Keeler, CEO of Blue Star Foods. “Any time we execute an M&A transaction, we spend a considerable amount of money on outside valuation experts, corporate securities counsel and audit costs. We are focused on long-term value creation for our shareholders, despite the near-term impact on our results from non-recurring expenses that create an overhang for our operating companies. Excluding the transaction-related expenses, we improved our Adjusted Cash Net Income by more than 60%.”
Keeler continued, “Our sales were impacted primarily by two exogenous factors. As anticipated, major restrictions on dining activity continued throughout the country in January and February because of COVID-19. Just as demand for our product began to increase rapidly in March, our supply chain was disrupted by global supply chain issues that created challenges for companies transporting products from Asia to North America. Port congestion, shipment delays and a major shortage in reefer containers were significant obstacles that kept us from fulfilling 100% of the sales orders we received in the latter part of the quarter.”
Keeler added, “Looking ahead, we expect the second quarter will also be impacted by the same industry wide supply chain challenges, but we believe that circumstances will improve in the coming months. As a well-respected operator, we are receiving larger orders, as evidenced by our recent announcement entering a vendor agreement with a leading national foodservice warehouse supplier. Based on strong demand signals from the market, we are extremely optimistic for a robust recovery in the second half of 2021.”
About Blue Star Foods Corp.
Blue Star Foods Corp. is a sustainable seafood company that processes, packages, and sells refrigerated pasteurized Blue Crab meat, and other premium seafood products. The Company believes it utilizes best-in-class technology, in both resource sustainability management and traceability, and ecological packaging. Its products are currently sold in the United States, Mexico, Canada, the Caribbean, the United Kingdom, France, the Middle East, Singapore, and Hong Kong. The company’s headquarters are in Miami, Florida (United States), and its corporate website is: http://www.bluestarfoods.com.
(1) The Adjusted Cash Net Income is a Non-GAAP Financial Measure and is the Company’s Net Income adjusted for the minor issuance of stock dividends and certain professional fees. We report Adjusted Cash Net Income to measure our overall results because we believe it better reflects our net results by excluding the impact of non-cash equity-based compensation and other one-time expenses, and believe it enhances our investors’ overall understanding of the financial performance of our business. The Cash Adjusted Net Income of a loss of $171,018 for Q1-2021 includes an addback of Interest Expense (and accrued) of $108,181, Depreciation/Amortization of $44,079 and Stock Based Professional Fees of $154,826.
This press release contains statements, which may constitute “forward-looking statements”. Those statements include statements regarding the intent, belief, or current expectations of the Company and members of its management team, as well as the assumptions on which such statements are based. Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements. Important factors currently known to management that may cause actual results to differ from those anticipated are discussed throughout the Company’s reports filed with Securities and Exchange Commission which are available at www.sec.gov as well as the Company’s web site at http://www.bluestarfoods.com. The Company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results.
Brett Maas of Hayden IR
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