The president and CEO of Blue Star Foods, a major United States crab supplier, has been fired as the company’s financial issues continue.
Carlos Faria was removed from the Miami, Florida, U.S.A.-based importer in August by “unanimous written consent of the members of the company’s board of directors,” according to Securities and Exchange Commission 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.
There was no sign of trouble with Faria in April, when Blue Star Acquisition Corp. – a Delaware corporation made up of investors – merged with John Keeler & Co. dba Blue Star Foods, which is now a subsidiary of Blue Star Acquisition Corp.
The aim of the reverse merger was to “build a diversified, triple bottom-line sustainable seafood company,” Faria told SeafoodSource at the time. “This company will be built via acquisition on both the supply and importer/distribution sides, as well as organic growth of the platform companies.”
The company’s strategy is “to acquire both horizontally and vertically throughout the seafood value chain,” Faria added. Blue Star Foods intends to introduce new species to its product line, including lobster tails, finfish, and other specialty seafood proteins, in the next 18 months, according to one of its filings with the SEC.
However, the supplier has been dealing with financial issues since the reverse merger.
Blue Star’s net revenue dropped from USD 16.9 million (EUR 15.2 million) for the first six months of 2018 to around USD 14 million (EUR 12.6 million) for the first six months of 2019, Blue Star said in SEC filings. Its gross profit dropped from approximately USD 2.3 million (EUR 2.1 million) for the first six months of 2018 to around USD 2 million (EUR 1.8 million) for the first half of this year.
The supplier also realized a working capital deficit of USD 2 million (EUR 1.8 million) and liabilities inclusive of USD 2.9 million (EUR 2.6 million) in stockholder loans as of 30 June, 2019, compared to a working capital deficit of USD 1.1 million (EUR 990,000) as of 31 December, 2018.
“The decline in working capital is attributable to the USD 1.1 million notes payable that were executed in the first six months of 2019,” Blue Star said in its quarterly financial report filed in August.
The company’s primary sources of liquidity consist of inventory of nearly USD 5.3 million (EUR 4.8 million) and accounts receivable of around USD 2.9 million (EUR 2.6 million).
Photo courtesy of Blue Star Foods
