Tuesday, June 15, 2021

Innovative Food Holdings, Inc. Reports Financial Results for Fourth Quarter and Full Year of 2020 Other OTC:IVFH


Direct-to-Consumer E-commerce Platform Drives Record 2020 E-commerce Sales Growth
Full Year E-commerce Revenue Increased 109% to a Full Year Record of $22.4 Million
Full Year 2020 Monthly Subscription Growth of over 95%; IVFH Now Offering Over 15 Unique Monthly Subscription Boxes

BONITA SPRINGS, Fla., April 16, 2021 (GLOBE NEWSWIRE) — Innovative Food Holdings, Inc. (OTCQB: IVFH) (“IVFH” or the “Company”), a leading direct-to-consumer e-commerce platform with complete multi-channel, specialty food and grocery capabilities for both consumers and professional chefs today reported its financial results for the fourth quarter and full year of 2020.  

“Throughout 2020, despite unprecedented industry-wide COVID-19 challenges, we accelerated our digital transformation, invested in our infrastructure, and leveraged our leading direct-to-chef and direct-to-consumer platform to support record e-commerce demand. Our full year and fourth quarter e-commerce results demonstrate the power and scalability of our DTC e-commerce platform. We successfully navigated the COVID-19 pandemic and the unprecedented disruption it caused within the specialty foodservice industry by rapidly expanding our e-commerce business thanks to the hard work of our dedicated team,” stated Sam Klepfish, CEO of Innovative Food Holdings.

“We believe that our leading direct-to-consumer platform provides unparalleled ‘plug and play’ e-commerce capabilities both through our existing online properties as well as through the ability to build or acquire additional brands to add to our platform. We continue to see increased interest in our platform from both current and potential partners and we believe that we are well positioned to expand e-commerce efficiencies and drive top-line and bottom-line e-commerce results during 2021.”

“We have emerged from the COVID-19 crisis better positioned than ever to further continue and accelerate the expansion and growth of our DTC e-commerce platform. In addition, we have been seeing improving trends within our foodservice business, and we look forward to continued improvements as restaurants, hotels, airlines, and other foodservice customers reopen for business. I am extremely proud of our success during 2020 and excited by the opportunities we have to grow our brands and create long-term value for our shareholders in 2021 and beyond,” concluded Mr. Klepfish.

Financial Results

E-commerce revenue for full year 2020 increased by over 100%, driven by the Company’s ability to increase conversion rates and sales. Deferred revenue which includes e-commerce orders associated with the Company’s subscription services, including both Mouth and iGourmet, and representing a pipeline of future revenues, increased by nearly 500% to $2.9 million at December 31, 2020, compared to $0.5 million at December 31, 2019. Revenues in the 2020 fourth quarter declined to $15.1 million compared to $17.7 million in the 2019 fourth quarter as specialty foodservice revenues declined 43% to $6.8 million, as a result of the continued impact the COVID-19 pandemic had on the foodservice industry. This decline was partially offset by strong e-commerce revenue growth of over 50% to $7.9 million in the 2020 fourth quarter, compared to $5.3 million in e-commerce revenues in the 2019 fourth quarter.

2020 full year total revenue was $51.7 million compared to $57.9 million in 2019. The decline in full year 2020 revenue was driven by an approximately 40% decline in foodservice revenues as a result of the continued impact the COVID-19 pandemic had on the foodservice industry. This decline which was partially offset by strong e-commerce revenue growth of over 100%.

IVFH continued to build its brands and expand its e-commerce customer base and for full year 2020 IVFH had over 188,000 active and unique e-commerce customers, which is an increase of over 88% from 2019.

The following table sets forth IVFH’s revenue by business category for the three and twelve months ended December 31, 2020 and December 31, 2019 (unaudited):

  Three Months Ended
  December 31,
2020

  % of
Net Sales
  December 31,
2019

  % of
Net Sales
  %
Change 
Specialty Foodservice $ 6,793,000   44%   $ 11,835,000   67%   -43%
E-Commerce   7,881,000   52%     5,253,000   30%   50%
National Brand Management   313,000   2%     389,000   2%   -20%
Warehouse and Logistics Services   151,000   1%     176,000   1%   -14%
Total IVFH $ 15,138,000   100%   $ 17,653,000   100%   -14%
  Year Ended Months Ended
  December 31,
2020

  % of
Net Sales
  December 31,
2019

  % of
Net Sales
  %
Change
Specialty Foodservice $ 27,544,000   53%   $ 45,377,000   78%   -39%
E-Commerce   22,371,000   44%     10,704,000   19%   109%
National Brand Management   1,100,000   2%     1,645,000   3%   -33%
Warehouse and Logistic Services   661,000   1%     176,000   0%   276%
Total IVFH $ 51,676,000   100%   $ 57,903,000   100%   -11%

For the 2020 fourth quarter, selling and administrative (SG&A) expenses were $5.6 million, compared to $4.9 million for the same period last year. For full year 2020, SG&A expenses were $19.5 million, compared to $16.5 million in the prior year period. The year-over-year increases, which included costs associated with COVID-19, were primarily driven by higher marketing and advertising costs, increases in payroll and insurance costs, and other operating expenses.

The Company reported a net loss for the 2020 fourth quarter of $(1.1 million), or $(0.03) per share, compared to a net income of $195,000, or $0.01 per diluted share, in the prior year’s fourth quarter. For 2020, the Company reported a net loss of $(7.7 million), or $(0.22) per share, compared to net income of $223,000, or $0.01 per diluted share for 2019. The 2020 net loss included a non-cash $1.7 million impairment charge recorded during the 2020 first quarter and other non-cash charges of $1.5 million. The Company generated $1.8 million in cash from operating activities for the 2020 fourth quarter, compared to $2.4 million for the same period last year.

Adjusted net income for the 2020 fourth quarter was a loss of $(1.0 million), or $(0.028) per share, compared to adjusted net income of $527,000, or $0.015 per diluted share, for the same period last year. For 2020, adjusted net income was a loss of $(5.0 million), or $(0.144) per share, compared to adjusted net income of $1.5 million, or $0.045 per diluted share last year.

Cash EBITDA, a non-GAAP metric (see tables below), for the 2020 fourth quarter was a $(0.7 million), compared to Cash EBITDA of $0.7 million in the prior year fourth quarter. For 2020, Cash EBITDA was $(4.2 million), compared to Cash EBITDA of $2.0 million for the same period a year ago.

About Innovative Food Holdings, Inc.
Innovative Food Holdings (Ticker: IVFH): has built a leading D2C ecommerce platform with complete multi-channel, specialty food and grocery capabilities for both consumers and professional chefs. Wholly owned D2C brands on the platform include www.igourmet.com and www.mouth.com.

Additional information is available at www.ivfh.com.

Forward-Looking Statements
This release contains certain forward-looking statements and information relating to Innovative Food Holdings, Inc. (the “Company”) that are based on the current beliefs of the Company’s management, as well as assumptions made by, and information currently available to, the Company. Such statements reflect the current views of the Company with respect to future events and are subject to certain assumptions, including those described in this release. Should one or more of these underlying assumptions prove incorrect, actual results may vary materially from those described herein as “should,” “could,” “will,” “anticipate,” “believe,” “intend,” “plan,” “might,” “potentially” “targeting” or “expect.” Additional factors that could also cause actual results to differ materially relate to the global COVID-19 crisis and other risk factors described in our public filings. The Company does not intend to update these forward-looking statements. The content of the websites referenced above are not incorporated herein.

 
 
Innovative Food Holdings, Inc.
Consolidated Balance Sheets
(unaudited)
 
    December 31,     December 31,  
    2020     2019  
                 
ASSETS                
Current assets                
Cash and cash equivalents   $ 5,060,015     $ 3,966,050  
Accounts receivable, net     2,380,305       3,309,830  
Inventory     3,719,786       2,350,622  
Other current assets     286,815       273,689  
Total current assets     11,446,921       9,900,191  
                 
Property and equipment, net     8,550,401       6,645,389  
Investments     496,575       435,225  
Right of use assets, operating leases, net     246,737       193,733  
Right of use assets, finance leases, net     776,439       174,631  
Other amortizable intangible assets, net     100,380       1,342,741  
Goodwill and other unamortizable intangible assets     1,532,822       2,183,065  
Total assets   $ 23,150,275     $ 20,874,975  
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY                
Current liabilities                
Accounts payable and accrued liabilities   $ 5,098,523     $ 4,009,956  
Accrued interest     28,873       16,973  
Deferred revenue     2,917,676       499,776  
Line of Credit     2,000,000        
Notes payable – current portion, net of discount     1,741,571       727,766  
Lease liability – operating leases, current     87,375       133,296  
Lease liability – finance leases, current     146,004       29,832  
Contingent liability – current portion     187,000       187,000  
Total current liabilities     12,207,022       5,604,599  
                 
Lease liability – operating leases, non-current     159,362       60,437  
Lease liability – finance leases, non-current     638,137       154,905  
Contingent liability – long-term     116,600       156,600  
Note payable – long term portion, net     6,151,345       3,881,037  
Total liabilities     19,272,466       9,857,578  
                 
Commitments & Contingencies (see note 18)            
                 
Stockholders’ equity                
Common stock: $0.0001 par value; 500,000,000 shares authorized; 38,209,060
and 37,210,859 shares issued, and 35,371,480 and 34,373,279 shares outstanding
at December 31, 2020 and December 31, 2019, respectively
    3,817       3,718  
Additional paid-in capital     37,415,155       36,889,818  
Treasury stock: 2,623,171 and 2,623,171 shares outstanding at December 31,
2020 and December 31, 2019, respectively.
    (1,141,370 )     (1,141,370 )
Accumulated deficit     (32,399,793 )     (24,734,769 )
Total stockholders’ equity     3,877,809       11,017,397  
Total liabilities and stockholders’ equity   $ 23,150,275     $ 20,874,975  
                 
Innovative Food Holdings, Inc.
Consolidated Statements of Operations
 
(unaudited)
    For the Three Months Ended     For the Twelve Months Ended
    December 31,     December 31,
    2020     2019     2020     2019 
                               
                               
Revenue   $ 15,137,833     $ 17,652,536       51,676,028     $ 57,902,966  
Cost of goods sold     10,621,975       12,646,843       37,859,500       41,255,076  
Gross margin     4,515,858       5,005,693       13,816,528       16,647,890  
                               
Selling, general and administrative expenses     5,556,996       4,903,290       19,531,818       16,464,128  
Impairment of intangible assets                 1,698,952        
Total operating expenses     5,556,996       4,903,290       21,230,770       16,464,128  
                               
Operating (loss) income     (1,041,138 )     102,403       (7,414,242 )     183,762  
                               
Other (income) expense:                              
Other leasing income     10,977       (3,125 )     43,810       (3,125 )
Gain on settlement of contingent liability                       (132,300 )
Gain on sale of fixed assets     7,984       (12,495 )     7,984       (12,495
Interest expense, net     (90,761 )     42,911       (302,576 )     108,915  
Total other (expense) income     (71,800 )     30,416       (250,782 )     (39,005 )
                               
Net (loss) income before taxes     (1,112,938 )     194,917       (7,665,024 )     222,767  
                               
Income tax expense                        
                               
Net (loss) income   $ (1,112,938 )   $ 194,917       (7,665,024 )   $ 222,767  
                               
Net (loss) income per share – basic   $ (0.03 )   $ 0.01     $ (0.22 )   $ 0.01  
                               
Net (loss) income per share – diluted   $ (0.03 )   $ 0.01     $ (0.22 )   $ 0.01  
                               
Weighted average shares outstanding – basic     34,739,378       34,116,335       34,871,785       34,116,335  
                               
Weighted average shares outstanding – diluted     34,739,378       34,116,335       34,871,785       34,116,335  
                                 
Innovative Food Holdings, Inc.
Consolidated Statements of Cash Flows  
             
    For the     For the  
    Year Ended     Year Ended  
    December 31,     December 31,  
    2020     2019  
                 
Cash flows from operating activities:                
Net (loss) income   $ (7,665,024 )   $ 222,767  
Adjustments to reconcile net income to net cash (used in) provided by operating
activities:
               
Impairment of intangible assets     1,698,952        
Depreciation and amortization     703,941       1,234,098  
Amortization of right-of-use asset     161,926       187,254  
Amortization of prepaid loan fees     12,560       1,819  
Stock based compensation     525,436       414,178  
Gain on settlement of contingent liability             (132,300 )
Gain on sale of fixed assets     (7,984 )     (12,495 )
Provision for doubtful accounts     254,899       36,037  
                 
Changes in assets and liabilities:                
Accounts receivable, net     674,626       (366,611 )
Inventory and other current assets, net     (1,443,640 )     (153,633 )
Accounts payable and accrued liabilities     1,108,451       414,326  
Deferred revenue     2,417,900       (59,539 )
Contingent liabilities     (40,000 )     (4,000 )
Operating lease liability     (161,926 )     (187,254 )
Net cash (used in) provided by operating activities     (1,759,883 )     1,594,647  
                 
Cash flows from investing activities:                
Cash paid for website development     (19,250 )      
Cash received from the sale of fixed assets           12,495  
Acquisition of property and equipment     (431,137 )     (1,049,604 )
Purchase of intangible assets           (84,000 )
Investment in food related company           (60,200 )
Net cash used in investing activities     (450,387 )     (1,181,309 )
                 
Cash flows from financing activities:                
Sales of common stock           250,000  
Cash paid for acquisition of treasury stock           (125,000 )
Loan fees related to building acquisition financing           (72,916 )
Cash paid in settlement of contingent liabilities in connection with acquisitions           (350,576 )
Proceeds from line of credit     2,000,000        
Proceeds from Payroll Protection Plan Loan     1,650,221        
Principal payments on debt     (278,668 )     (880,752 )
Principal payments financing leases     (67,318 )     (27,861 )
Net cash provided by (used in) financing activities     3,304,235       (1,207,105 )
                 
Increase (decrease) in cash and cash equivalents     1,093,965       (793,767 )
                 
Cash and cash equivalents at beginning of year     3,966,050       4,759,817  
                 
Cash and cash equivalents at end of year   $ 5,060,015     $ 3,966,050  
                 
Supplemental disclosure of cash flow information:                
                 
Cash paid during the year for:                
Interest   $ 201,679     $ 112,291  
                 
Taxes   $     $  
                 
Non-cash investing and financing activities:                
Issuance of 131,136 shares of common stock previously accrued   $     $ 93,666  
Right of use assets and liabilities – operating, upon adoption of ASU 2016-02   $     $ 338,581  
Equipment financed under note payable   $ 1,900,000     $  
Return of equipment and reduction in amount due under equipment financing loan   $     $ 33,075  
Fair value of 19,048 shares of common stock issued for services   $     $ 10,405  
Increase in right of use assets & liabilities   $ 214,930     $ 193,734  
Investment in food related company   $ 61,350     $ 60,500  
Capital lease for purchase of fixed assets   $ 677,021     $ 81,223  
Note payable for acquisition of land and building   $     $ 3,600,000  
                 
  Three Months Ended
(unaudited)
  Twelve Months Ended
(unaudited)
  December 31,
2020
  December 31,
2019
  December 31,
2020
  December 31,
2019
Adjusted Net Income and EPS (4)              
Revenue $ 15,137,833     $ 17,652,536   $ 51,676,028     $ 57,902,966
Net Income   (1,112,938 )     194,917     (7,665,024 )     222,767
Amortization of intangible assets (1)   2,870       210,031     212,902       899,757
One-time charges             1,917,891      
Stock related expenses (2)   147,430       121,818     525,436       414,178
Adjusted Net Income $ (962,638 )   $ 526,766   $ (5,008,795 )   $ 1,536,702
Weighted Avg. Shares Outstanding Diluted (3)   34,871,785       34,116,335     34,871,785       34,116,335
Adjusted Fully Diluted EPS $ (0.028 )   $ 0.015   $ (0.144 )   $ 0.045
               
  Three Months Ended
(unaudited)
  Twelve Months Ended
(unaudited)
  December 31,
2020
  December 31,
2019
  December 31,
2020
  December 31,
2019
Cash EBITDA (4)              
Net Income $ (1,112,938 )   $ 194,917   $ (7,665,024 )   $ 222,767
Interest expense, taxes   90,761       55,406     302,576       108,915
Depreciation & amortization   136,137       313,003     703,941       1,234,098
One-time charges             1,917,891      
Stock related expenses (2)   147,430       121,818     525,436       414,178
Cash EBITDA $ (738,610 )   $ 685,144   $ (4,215,180 )   $ 1,979,958

(1)   Includes non-cash amortization charges related to assets acquired
(2)   Includes stock and options-based compensation and expenses
(3)   Full Year GAAP weighted fully diluted share count
(4)   non-GAAP measures (not to be relied upon in substitution for GAAP measures)

   
   
Company Contact: Investor and Media Contact:
Ronit Wallerstein Andrew M. Berger
Investor Relations Managing Director
Innovative Food Holdings, Inc. SM Berger & Company, Inc.
(718) 645-1755 (216) 464-6400
rwallerstein@IVFH.com andrew@smberger.com



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