DDC Enterprises CEO Norma Chu Provides Corporate Update in Letter to Shareholders

Rhea-AI Summary

DDC Enterprises (NYSEAM: DDC), a leading multi-brand Asian consumer food company, has issued a corporate update from CEO Norma Chu. Key highlights include:

• Improved corporate infrastructure with a new finance team and appointment of Enrome LLP as independent auditor
• Estimated 2023 revenue between $28-29 million, up 10-14% from 2022
• Gross margin increase from 24.5% to an estimated 24.9-25.1%
• Estimated $25.8 million in cash and short-term investments at year-end 2023
• Successful acquisitions of Yai's Thai and Omsom brands
• Elimination of $4.8 million in debt
• Appointment of new leadership, including COO Malik Sadiq

The company aims to become the most influential player in the U.S. Asian food market and expects to benefit from economic stimulus in China.

Positive

• Estimated 2023 revenue between $28-29 million, representing 10-14% growth over 2022
• Gross margin increased from 24.5% to an estimated 24.9-25.1%
• Strong cash position with estimated $25.8 million in cash and short-term investments
• Successful acquisitions of Yai's Thai and Omsom brands, expanding U.S. presence
• Elimination of $4.8 million in debt, improving balance sheet
• Appointment of experienced leadership team, including new CFOs and COO

Negative

• Challenges faced during transition to public company status
• Ongoing need to refinance additional outstanding debt obligations

Insights

Financial Analyst

DDC Enterprises has shown promising financial performance and strategic moves in 2023. The company's estimated revenue of $28-29 million represents a 10-14% YoY growth, with improved gross margins of 24.9-25.1%. The strong cash position of $25.8 million provides financial flexibility. Key developments include:

• Successful acquisitions of Yai's Thai and Omsom, expanding U.S. presence
• Debt reduction of $4.8 million, strengthening the balance sheet
• New finance team and accounting firm to improve financial reporting
• Expansion of distribution networks, particularly with Sprouts

These actions position DDC well for future growth in the Asian food market. However, investors should monitor the integration of acquisitions and the company's ability to meet financial filing deadlines going forward.

Market Research Analyst

DDC's strategic focus on the Asian food market in the U.S. is well-timed. The ready-to-heat and ready-to-eat segments are experiencing rapid growth, driven by increasing consumer demand for convenient, authentic ethnic cuisines. The acquisitions of Yai's Thai and Omsom demonstrate a savvy approach to portfolio expansion, targeting brands with established market presence. The distribution synergies achieved with Sprouts indicate potential for significant retail growth. Additionally, DDC's operations in China could benefit from recent economic stimulus measures, potentially opening up new opportunities. However, the company will need to navigate challenges such as integrating new brands and optimizing operational efficiencies to fully capitalize on these market trends and maintain its growth trajectory.

NEW YORK--(BUSINESS WIRE)-- DDC Enterprises, Ltd. (NYSEAM: DDC), (“DayDayCook,” “DDC,” or the “Company”), a leading multi-brand Asian consumer food company, today issued a corporate update in a Letter to Shareholders from CEO Norma Chu.

To Our Valued Shareholders:

I am pleased to share important updates and improvements from DayDayCook as we reflect on our first year as a publicly listed company. While we have faced our share of challenges during this transition, we have proactively addressed them and are emerging as a stronger organization.

Improved Corporate Infrastructure

To enhance our operational capabilities, we have established a new finance and accounting team dedicated to managing our ongoing financial filing requirements. On September 30, 2024 we appointed Enrome LLP (“Enrome”) as our independent registered public accounting firm. This engagement will be led by our newly hired co-CFO and principal accounting officer, Tony Tao. Additionally, we welcomed Jeff Ervin in June, who serves as co-CFO in a fractional capacity, focusing on our strategic financial initiatives. With this experienced finance team in place, we are confident in our ability to meet future filing deadlines.

Revenue Momentum and Strong Cash Position

The Company ended 2023 with estimated total 2023 revenue between $28 and $29 million USD, representing an increase of 10-14% over 2022. Profitability also improved with gross margin increasing from 24.5% to an estimated 24.9-25.1% by the end of the year. We ended 2023 with estimated USD 25.8m of cash and short-term investment.

Driving Growth and Revenue Through Acquisitions

This year, we successfully completed two important acquisitions that enhance our presence in the United States: Yai’s Thai and Omsom. These well-respected brands align perfectly with our business vision. Following the acquisition of Yai’s Thai, we implemented distribution synergies that expanded brand availability with retailer Sprouts, resulting in a nationwide launch of Yai’s Thai packaged sauce series and a notable increase in presence across Sprouts locations. We remain disciplined in our analysis of acquisition opportunities, focusing on targets that not only broaden our product portfolio but also deliver meaningful financial and operational synergies. In June, we welcomed Malik Sadiq as Chief Operating Officer, who brings invaluable industry experience and expertise in integrating acquisitions and optimizing internal efficiencies.

Retiring Debt

In August, we announced the successful elimination of $4.8 million in debt, significantly enhancing our balance sheet. We anticipate utilizing cash on hand and other strategic measures to further reduce outstanding debt by year-end. We believe that the current interest rate environment and our balance sheet improvements will enable us to refinance additional outstanding obligations, resulting in increased future cash flows.

Overall, we have enriched our leadership team with experienced professionals who are committed to refining our internal processes. With our portfolio of well-recognized Asian food brands, including Omsom, Yai’s Thai, and others, we have a robust foundation for sustainable growth. We believe that DayDayCook is well positioned to become the most influential player in the Asian food market in the U.S. Additionally, with our foundational operations in China, we expect to benefit from the recent announcement of economic stimulus in the country. Together, these factors position us to seize the momentum in the ready-to-heat and ready-to-eat Asian food market.

Thank you for your continued support.

Sincerely,

Norma Ka Yin Chu

Founder & CEO

ABOUT DAYDAYCOOK

DayDayCook (NYSEAM: DDC) is on a mission to share the joy of Asian cooking culture with the world, offering a suite of accessible and healthy ready-to-eat, ready-to-cook, and ready-to-heat products that cater to the global palate. DayDayCook has evolved from a culinary content authority to a multi-brand powerhouse, curating a broad range of products that champion authenticity, nutrition, and convenience. The company's growing portfolio includes DayDayCook, Nona Lim, Yai’s Thai, Omsom, MengWei, and Yujia Weng. Follow the Company on LinkedIn.

Forward-Looking Statements

Certain statements in this press release are forward-looking statements, including, for example, statements about estimated revenue, margins, cash and growth and expansion. These forward-looking statements involve known and unknown risks and uncertainties and are based on the Company’s current expectations and projections about future events that the Company believes may affect its financial condition, results of operations, business strategy and financial needs. These forward-looking statements are also based on assumptions regarding the Company’s present and future business strategies and the environment in which the Company will operate in the future. Investors can find many (but not all) of these statements by the use of words such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,” “likely to” or other similar expressions. The Company undertakes no obligation to update or revise publicly any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in the Company’s registration statement and other filings with the SEC.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241022747650/en/

Investors:

Jeff Ervin

Co-Chief Financial Officer

jeffervin@daydaycook.com

Media:

Jaque Liu

jaque.liu@daydaycook.com

Source: DDC Enterprise Limited

FAQ

What was DDC Enterprises' (DDC) estimated revenue for 2023?

DDC Enterprises' estimated total revenue for 2023 was between $28 and $29 million USD, representing an increase of 10-14% over 2022.

How much debt did DDC Enterprises (DDC) eliminate in August?

In August, DDC Enterprises successfully eliminated $4.8 million in debt, significantly enhancing their balance sheet.

What acquisitions did DDC Enterprises (DDC) complete in 2023?

DDC Enterprises successfully completed two important acquisitions in 2023: Yai's Thai and Omsom, enhancing their presence in the United States.

Who was appointed as the new Chief Operating Officer of DDC Enterprises (DDC)?

In June, DDC Enterprises welcomed Malik Sadiq as Chief Operating Officer, bringing valuable industry experience in integrating acquisitions and optimizing internal efficiencies.