HF Foods' Overhaul: Adjusted Profits Rise Amidst $39M Loss, Goodwill Wipeout

LAS VEGAS, NV – March 16, 2026 – HF Foods Group Inc. (NASDAQ: HFFG) today presented a complex picture of a company in deep transformation, reporting a 2.2% increase in full-year revenue for 2025 while simultaneously revealing a significant GAAP net loss driven by a massive asset write-down. The leading distributor to Asian restaurants across the U.S. saw its full-year net revenue climb to $1.23 billion. More encouragingly for investors, its adjusted net income surged 20.9% to $16.9 million, a metric the company points to as evidence that its core operational overhaul is bearing fruit.

However, this positive adjusted performance is starkly contrasted by a full-year GAAP net loss of $39.3 million. While this figure represents an 18.3% improvement from the prior year's loss, it underscores the substantial costs and accounting charges associated with the company's strategic realignment. The fourth quarter results further highlighted this volatility, with revenue seeing a modest 0.9% gain while adjusted EBITDA fell by 33.7% compared to the prior-year period, reflecting ongoing pressures.

A Tale of Two Ledgers

The 2025 financial results for HF Foods tell two distinct stories. The first, based on non-GAAP adjusted figures, portrays a company successfully improving its core profitability. Full-year adjusted EBITDA, a key measure of operational performance, grew 6.9% to $45.0 million. Management attributes this to progress on a multi-year transformation plan designed to streamline operations and enhance efficiency.

The second story, told through Generally Accepted Accounting Principles (GAAP), is dominated by a major non-cash charge. The primary driver behind the $39.3 million net loss was a $38.8 million goodwill impairment charge. This accounting move effectively erases the remaining goodwill from the company’s balance sheet, a significant step following a similar $46.3 million impairment charge in 2024. These charges, while not impacting cash flow, reflect a re-evaluation of the value of past acquisitions.

This divergence between GAAP and non-GAAP metrics is central to understanding the company's current state. While the impairment charges create large paper losses, the growth in adjusted net income and EBITDA suggests that, beneath the accounting adjustments, the fundamental business of sourcing and distributing food products is becoming more profitable.

The Transformation Engine Roars to Life

In the earnings release, CEO Felix Lin emphasized the strategic progress made in 2025. "In 2025, we made meaningful progress on our comprehensive transformation plan, delivering solid sales and Adjusted EBITDA growth even as the broader foodservice industry faced headwinds," he stated. Lin highlighted several key milestones as the foundation for future growth.

A cornerstone of this transformation was the completion of a full Enterprise Resource Planning (ERP) system implementation across its entire network. This complex and costly project creates a unified technology platform for the distributor, a critical step for a company that has grown through acquisitions of regional players. The goal is to drive efficiency, improve inventory management, and provide better data for decision-making. The company also noted the consolidation of its call center operations as another step toward streamlining its processes.

Furthermore, HF Foods has been investing heavily in its physical infrastructure. The press release pointed to "key facility initiatives in Atlanta, Charlotte, and Chicago that will unlock substantial cross-selling opportunities in high-growth markets." Research indicates the Atlanta project includes a new, state-of-the-art distribution center that is double the size of its previous facility, positioning the company for significant organic growth in the Southeast. These investments are central to the company's strategy of leveraging its national scale while maintaining a strong regional presence.

Wiping the Slate Clean: The Goodwill Write-Off

The decision to write off all remaining goodwill is a pivotal moment for HF Foods. Goodwill is an intangible asset recorded on a balance sheet when a company is acquired for more than the fair market value of its net assets. Subsequent impairments indicate that the acquired assets are not expected to generate the financial returns that were originally anticipated.

By taking the $38.8 million charge in 2025, HF Foods has effectively 'cleaned the slate.' This move, while painful in the short term as it creates a large GAAP loss, has a significant long-term benefit: it removes the risk of future goodwill impairment charges. This will allow the company's future GAAP earnings to more closely reflect its true operational performance without the distortion of these non-cash write-downs. For investors and analysts, this provides a clearer view of the company's health and profitability going forward.

This financial reset also impacts the company's future strategy. With a cleaner balance sheet, HF Foods may find itself in a more flexible position. The CEO confirmed that the company will continue to "selectively pursue M&A opportunities that strengthen our unmatched competitive position." Having addressed the legacy valuation issues from past deals, any new acquisitions will be built on a freshly reset financial foundation.

Navigating a Challenging Market

HF Foods' transformation is not happening in a vacuum. The company is navigating the same "broader foodservice industry headwinds" that are squeezing operators across the country. These challenges include persistent product cost inflation, rising labor and fuel costs, and the potential impact of tariffs on its internationally sourced products. The foodservice distribution industry is notoriously competitive, with low margins being the norm.

In this environment, HF Foods' specialized focus on the growing Asian restaurant market is its key differentiator and strategic advantage. While larger competitors like Sysco and US Foods dominate the general market, HF Foods has built its brand on a deep understanding of the specific needs of its customer base. The company's investments in its supply chain and distribution network are designed to solidify its leadership in this valuable niche.

As the company moves into 2026, it carries the momentum of its operational improvements but also the scars of its financial restructuring. With the transformation's foundation now largely in place, the focus shifts to execution: leveraging its enhanced efficiency and expanded facilities to drive organic growth and prove that its long-term strategy can deliver sustainable value to shareholders.