Soon after its CEO was removed, Blue Star Foods has come up against more bad news, reporting a plunge in revenue for its fiscal third quarter of 2019.
The Miami, Florida, U.S.A.-based blue crab supplier reported that its revenue for the quarter ending 30 September dropped 25.4 percent to around USD 5.1 million (EUR 4.6 million). Blue Star attributed the drop to a 16 percent decline in volume due to market softness as well as a reduction in its private label business.
As a result, the company reported a net loss of nearly USD 1.3 million (EUR 1.2 million) for the quarter, compared to a net profit of around USD 347,000 (EUR 315,000) for the third quarter of 2018.
However, its Blue Star branded product volume soared by 27 percent in the quarter.
In August, Carlos Faria, former president and CEO of Blue Star Foods, was removed by “unanimous written consent of the members of the company’s board of directors,” according to SEC filings. Blue Star did not list a reason for the removal.
John Keeler, Blue Star's executive chairman and chairman of the board, was appointed as CEO.
Meanwhile, Blue Star’s gross profit margin for the quarter decreased by an estimated USD 473,000 (USD 430,000) to around USD 673,000 (EUR 611,000), compared to around USD 1.1 million (EUR 999,000) for the third quarter of 2018. “This decrease is directly attributable to a reduction in average selling price in the market. Pricing pressures have caused the market to adjust lower,” the company said.
While Blue Star’s salaries’ expenses soared during the quarter, it paid its salespeople and brokers less in commissions. Commission expenses declined from around USD 39,000 (EUR 35,000) in the third quarter of 2018 to nearly USD 16,000 (EUR 14,500) for the third quarter of 2019, primarily due to a re-alignment of the company’s sales structure, as well as reducing the number of accounts that earned brokerage commissions, and a decrease in revenue.
Salaries and wages expenses, on the other hand, soared 143.2 percent to around USD 1 million (EUR 908,000), compared to USD 417,000 (EUR 379,000) in the third quarter of 2018. “This increase is solely due to the non-cash expenses related to stock-based compensation which totaled USD 668,706 (EUR 607,000),” Blue Star said.
Other operating expense increased by 27.9 percent to nearly USD 677,000 (EUR 615,000) in the quarter, due to professional fees and filing fees related to public company filing requirements.
Photo courtesy of Blue Star Foods
