Exclusive: Food distributor HF Foods Group names permanent CEO

HF Foods Group (Nasdaq: HFFG), a Nevada-based food distributor to Asian restaurants, named Felix Lin as permanent CEO effective January 1, the company tells Axios exclusively.

Why it matters: Lin's appointment brings stability to the company as it embarks on a growth strategy that includes acquisitions.

Catch up quick: Former CEO Zhou Min Ni and former CFO Jian Ming (Jonathan) Ni settled with the SEC over fraud charges made by the agency against them in June.

• The SEC alleged that Zhou Min Ni "misappropriated company funds for himself and his family," including to buy "exotic vehicles," and that Jonathan Ni assisted him.
• Lin, previously COO, has been interim CEO since October.

What they're saying: Lin says the company has a new board and management, and described the actions of its former CEO and CFO as "in the past."

What's next: HF Foods Group is focused on growing its business organically via cross-selling and inorganically via acquisitions, Lin says.

• Its pipeline includes local and regional food distributors that service ethnic cuisine restaurants, with revenue between $25 million and $100 million, he says.
• It plans to finance M&A by raising money on the equity markets, Lin says, noting the company's recent $100 million shelf registration.

• The company has a long-term commercial relationship with JPMorgan, but its options are open in terms of retaining an investment bank, he notes.

By the numbers: For the nine months ended September 30, HF Foods had nearly $900 million in revenue versus almost $870 million for the same period a year ago.

• Its net loss was about $4.2 million and its EBITDA nearly $25 million over that period, compared to $5.4 million and almost $21 million, respectively, for the same period a year ago.