Iron Horse Acquisitions (IROH) Financials

Iron Horse Acquisitions (NASDAQ:UCFI) showed a sharp improvement in second-quarter 2026 profitability, but operating cash flow remained under pressure. The company reported $8.7 million of revenue, up 49.9% from $5.8 million in the first quarter of 2026 and 17.1% from $7.5 million in the second quarter of 2025. Gross profit increased to $6.2 million, although the gross margin eased to approximately 71.5% from 74.9% in the prior quarter.

Operating performance improved substantially. Operating income rose to $5.1 million from $731,000 in Q1, helped by a significant reduction in selling, general and administrative expense, which fell to $1.1 million from $3.6 million. Net income was $3.1 million, or $0.06 per diluted share, compared with a net loss of $309,000, or $0.006 per share, in Q1.

Despite the earnings improvement, cash generation remains a concern. Net cash used in operating activities increased to $7.0 million in Q2 from $3.6 million in Q1. The primary driver was a $10.3 million unfavorable change in operating assets and liabilities. Cash and equivalents declined to $23.3 million from $29.7 million during the quarter, while investing activity was minimal.

The balance sheet remains stronger than it was during much of 2024 and 2025. Total liabilities declined to $11.9 million from $19.2 million in Q1, and total equity increased to $23.3 million from $19.9 million. However, cash declined and short-term debt remained at approximately $3.6 million. The company’s current ratio was approximately 2.3 at June 30, 2026, indicating that current assets exceeded current liabilities.

Investors should also be cautious when comparing periods. The supplied filings use both the Iron Horse Acquisitions/IROH identity and the CN Healthy Food Tech Group/UCFI identity, while certain 2025 and 2024 figures are marked as restated. The changes suggest a corporate transaction or ticker transition, which may reduce the comparability of historical operating and balance-sheet trends.

• Revenue momentum improved: Q2 2026 revenue increased nearly 50% sequentially and 17% year over year, continuing the broad recovery from periods of little or no reported revenue in early 2024.
• Profitability rebounded: Net income improved from a $309,000 loss in Q1 2026 to $3.1 million of profit in Q2.
• Operating expenses were better controlled: SG&A declined by roughly 70% sequentially, allowing operating income to rise to $5.1 million.
• Equity strengthened: Total equity increased to $23.3 million at June 30, 2026, from $19.9 million three months earlier, while total liabilities fell by approximately $7.4 million.
• Liquidity remained adequate: Current assets of $27.5 million exceeded current liabilities of $11.7 million, producing a current ratio of about 2.3.
• Gross margins remained high but declined sequentially: The Q2 gross margin was approximately 71.5%, down from 74.9% in Q1 but above the roughly 66.2% reported in Q2 2025.
• Capital spending was minimal: The company spent only $14,000 on property, plant and equipment and $5,005 on acquisitions during Q2, limiting near-term investment demands but providing little evidence of expansion spending.
• Operating cash flow remained negative: The company used $7.0 million in operating cash during Q2 despite reporting $3.1 million of net income.
• Working-capital demands were substantial: A $10.3 million unfavorable change in operating assets and liabilities was the main reason cash flow diverged from reported earnings.
• Cash reserves continued to decline: Cash fell by $6.4 million during Q2 to $23.3 million, following a $3.3 million decline in Q1, increasing the importance of improved cash conversion in future quarters.