Buda Juice, Inc.: Form 10-Q for the period ended Jun 30, 2026

The following discussion and analysis of our financial condition and results of operations should be read together with our unaudited condensed financial statements and the related notes to those statements included under Item 1 of this Quarterly Report on Form 10-Q. For purposes of this section, “Buda Juice”, the “Company”, “we”, or “our” refer to Buda Juice, Inc. and its subsidiaries, unless the context otherwise requires. Certain figures have been rounded for ease of presentation and may not sum due to rounding.

Cautionary Note Regarding Forward-Looking Statements

This “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other parts of this Quarterly Report on Form 10-Q contain forward-looking statements based upon current beliefs, plans, and expectations that involve risks, uncertainties, and assumptions. Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth under Part II, Item 1A “Risk Factors” in this Quarterly Report on Form 10-Q. You should carefully read the “Risk Factors” section to understand the important factors that could cause actual results to differ materially from our forward-looking statements.

Results of Operations for the Three and Six Months Ended June 30, 2026, and 2025

The following table summarizes our results of operations for the three and six months ended June 30, 2026 and 2025, respectively:

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For the three months ended June 30, 2026 and 2025, the Company reported net income of approximately $470 and $1,170, respectively. For the six months ended June 30, 2026 and 2025, the Company reported net income of approximately $858 and $1,977, respectively (amounts in thousands).

Net Sales: Net sales increased $941, or 26.4%, to $4,508 thousand from $3,567 for the three months ended June 30, 2026 and 2025. The core beverage business continued same store organic growth, supplemented by partial quarter contributions from two initiatives launched during the quarter: the distribution of Buda Fresh into Wal-Mart across 9 states and a small, cash-funded asset acquisition in freshly prepared dressings. For the six months ended June 30, 2026 and 2025, the Company reported net sales of approximately $8,016 and $6,547, respectively (amounts in thousands).

Gross Profit

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Gross Profit: Gross profit margin was 36.6% and 46.7% for the three months ended June 30, 2026 and 2025, respectively. This decrease was driven by higher inbound freight costs resulting from diesel-price volatility, interim third-party co-packing arrangement supporting our new dressings business, as well as from elevated produce costs carried over from the first quarter, which have returned to normalized levels. For the six months ended June 30, 2026 and 2025, gross profit margin was 37.9% and 45.9%, respectively. This decrease was mostly driven by the aforementioned factors.

Operating Expenses

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Delivery and Handling Expense: Delivery and handling expense was essentially flat, with a small increase of $7 thousand, or 4.8%, to $152 thousand for the three months ended June 30, 2026 from $145 thousand for the three months ended June 30, 2025. For the six months ended June 30, 2026 and 2025, delivery and handling expense was $282 thousand and $273 thousand, respectively, an increase of $9 thousand, or 3.3%.

Selling, General and Administrative Expenses: Selling, general, and administrative expense increased by $677 thousand, or 179.1%, to $1,055 thousand for the three months ended June 30, 2026, from $378 thousand for the three months ended June 30, 2025. For the six months ended June 30, 2026 and 2025, selling, general and administrative expense was $1,718 thousand and $785 thousand, respectively, an increase of $933 thousand, or 118.9%. These increases are mostly due to the additional expenses required as a public company, as well as stock-based compensation, none of which were present on a comparable basis during the prior-year period.

Other Income / (Expense), Net

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Other income: Other income was $6 thousand for the three months ended June 30, 2026, an immaterial decrease of $16 from the three months ended June 30, 2025. Other income was $23 thousand for the six months ended June 30, 2026, an immaterial increase of $1 from the six months ended June 30, 2025.

Interest income: Interest income was $149 thousand for the three months ended June 30, 2026, an increase of $136 thousand from the three months ended June 30, 2025. Interest income was $286 thousand for the six months ended June 30, 2026, an increase of 260 thousand from the six months ended June 30, 2025. These increases are a result of an increased investable cash balance as a result of the IPO in January 2026.

Income Taxes: The Company is a Subchapter C corporation for U.S. federal and state income tax purposes. Amounts recognized as income taxes are presented within “income tax expense” in the accompanying statements of operations. The Company recognized income tax expense of $488 and $18 for the six months ended June 30, 2026 and 2025, respectively. The effective tax rate for the six months ended June 30, 2026 was 36.23%, compared to 0.90% for the same period in 2025. The increase in the effective tax rate was primarily attributable to the discrete recognition of deferred tax expense upon the Company’s conversion to a C-corporation on January 1, 2026. The Company did not record a valuation allowance as of June 30, 2026 due to its cumulative income position. Prior to the Conversion on January 1, 2026, the Predecessor was treated as a partnership and was subject only to the Texas margin tax.

Liquidity and Capital Resources

In the past few years, we have financed our operations primarily through cash generated from our business operations and proceeds on borrowings through our credit facilities. We had $18,819 thousand and $1,840 thousand of cash and cash equivalents as of June 30, 2026 and December 31, 2025, respectively.

Working Capital: The following table summarizes total current assets, liabilities and working capital at June 30, 2026 compared to December 31, 2025 (in thousands):

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As of June 30, 2026, we had working capital of approximately $20,143 thousand as compared to working capital of $2,634 thousand as of December 31, 2025, an increase of $17,509 thousand.

Short-Term Cash Requirements

Our short-term cash requirements primarily include working capital needs to support inventory build, payroll, marketing, and other operating expenses, as well as approximately $144 thousand of lease obligations due within the next 12 months. We expect to fund these requirements with cash on hand, cash generated from operations, and borrowings under our credit facility, if needed.

Long-Term Cash Requirements

Our long-term cash requirements include approximately $573 thousand in lease obligations due beyond 12 months, along with anticipated capital expenditures to support our planned regional production facilities. These facilities will represent material investments and are expected to be funded through a combination of operating cash flows and proceeds from the initial public offering in January 2026. We may also pursue additional equity or debt financing in order to acquire or invest in complementary business, products, and/or new IT infrastructure. In the event that we require additional financing, we may not be able to raise such financing on terms acceptable to us or at all.

Lease Commitments

As of June 30, 2026, we were party to non-cancellable operating lease agreements related to our production facility and office space. Future minimum lease payments under this agreement total approximately $839 thousand, with $193 thousand due within the next 12 months and $646 thousand due thereafter through July 2030. These commitments represent a significant use of cash and we expect to fund them through a combination of existing cash balances and cash flows from operations.

Cash Flows

The following tables summarize our sources and uses of cash (amounts in thousands):

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Net cash provided by operating activities for the six months ended June 30, 2026, was approximately $940 thousand compared to cash provided of $1,833 thousand for the same period in 2025, a decrease of $893 thousand, or 48.7%. Operating cash flow during the quarter was impacted by a one-time increase in accounts receivable following the transition of a large customer from a 1% discount for payment within 10 days to standard net 30 payment terms. Additionally, net income for the six months ended June 30, 2026 and 2025 was approximately $858 thousand and $1,977 thousand, respectively, a decrease of $1,119. This was a result of the aforementioned temporary gross margin impacts as well as public company, stock-based compensation and income tax expenses which were not present on a comparable basis during the prior-year period.

Net cash used in investing activities for the six months ended June 30, 2026, was $788 thousand as compared to $270 thousand for the six months ended June 30, 2025. The increase is primarily a result of the investments being made in the dressings business, which included the acquisition of the dressing business and inventory as well as the related manufacturing upgrades to transition that business to in-house production.

Net cash received in financing activities during the six months ended June 30, 2026, was $16,827 thousand as compared to a net cash used amount of $1,748 thousand for the six months ended June 30, 2025. The Company’s IPO related transactions in January 2026 resulted in net cash proceeds of $16,827 thousand. However, during the six months ended June 30, 2025, the Company paid member distributions related to member tax pass-through liabilities in the amount of $1,748 thousand.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

Recently Issued Accounting Pronouncements

See Note 2 of Notes to Unaudited Condensed Financial Statements for accounting pronouncements issued but not yet adopted that may impact the Company’s condensed financial position, earnings, cash flows or disclosures.

Critical Accounting Policies and Estimates

There have been no material changes to the critical accounting estimates previously described in our Form 10-K for the fiscal year ended December 31, 2025.

We are a smaller reporting company as defined in Regulation S-K of the Securities Exchange Act of 1934, as amended, and are not required to provide the information under this item.

Evaluation of Disclosure Controls and Procedures

Management, including the Company’s Chief Executive Officer and Chief Financial Officer, has begun implementing the processes and controls necessary to design and evaluate disclosure controls and procedures appropriate for a public company.

Changes in Disclosure Control Procedures

There have been no significant changes in our internal controls over financial reporting during the six months ended June 30, 2026 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)).

There have been no material changes to the risk factors previously described in our Form 10-K for the fiscal year ended December 31, 2025.