What HF Foods Group Inc. told the SEC could break it.

As a food distributor, HF Foods is subject to FDA regulation and the Food Safety Modernization Act, which expands prevention-based supply-chain controls, imposes import requirements and gives the FDA mandatory recall authority — raising compliance cost and recall risk.

“The FSMA also imposes new requirements for food products imported into the U.S. and provides the FDA with mandatory recall authority.”

HF Foods imports a significant amount of product (frozen seafood, Asian specialty items, packaging); new tariffs and trade restrictions could increase its cost of sourcing products and equipment from outside the U.S.

“Significant new restrictions and tariffs on foreign trade could have a negative impact on our business and could increase the cost of sourcing products and certain equipment and other materials used in our operations that we procure from outside the U.S.”

HF Foods purchases its food items primarily from third-party suppliers and imports a significant share (frozen seafood, Asian specialty, packaging); supply interruptions or product-cost increases would hurt profitability and margins.

“We purchase our food items and related products primarily from third-party suppliers.”

HF Foods requires significant diesel fuel for its delivery fleet and relies on diesel-fueled inbound freight; elevated fuel costs (hard to fully pass through) plus food-commodity price swings (seafood, meat, oil/flour/salt/sugar) pressure margins.

“We require significant quantities of diesel fuel for our vehicle fleet, and the inbound delivery of the products we sell is also dependent upon shipment by diesel-fueled vehicles.”