Innovative Food Holdings, Inc. Reports Financial Results for Fourth Quarter and Full Year of 2019 and Provides Business Update Related to COVID-19
BONITA SPRINGS, Fla., May 15, 2020 (GLOBE NEWSWIRE) — Innovative Food Holdings, Inc. (OTCQB: IVFH) (“IVFH” or the “Company”), an interconnected data driven platform of specialty food companies that provides chefs and consumers direct access to the highest quality unique specialty food products across the U.S., today reported its financial results for the fourth quarter and twelve months of 2019 and provided an update on the business related to the impact of the COVID-19 pandemic.
“The COVID-19 pandemic has had an unprecedented impact on the country and our industry. Our thoughts are with everyone who has been impacted,” stated Sam Klepfish, CEO of Innovative Food Holdings.“The e-commerce strategy we have been pursuing over the past two years has enabled IVFH to handle a significant influx of direct-to-consumer orders, as monthly e-commerce orders surged in March and April and increased over 150%, and over 400%, respectively. Furthermore, our unique multi-channel infrastructure provided us with the flexibility and resources to seamlessly offer a wide variety of foodservice products and other specialty grocery products directly to consumers, while providing a high level of customer service.”“I believe that March and April’s orders demonstrate the unique capabilities and robust scalability of our growing e-commerce centric platform. In addition, the recent surge in e-commerce orders demonstrates the growing awareness of our direct-to-consumer brands. Consumers are increasingly seeking high-quality specialty grocery products, as well as specialty food themed kits, curated gifts and monthly subscriptions, which we believe provides significant opportunities for continued growth,” continued Mr. Klepfish. Recent DevelopmentsThe COVID-19 pandemic has caused revenue to shift towards e-commerce channels and we have quickly expanded e-commerce offerings and shifted resources from our foodservice business to keep up with recent specialty food and grocery demandsMonthly e-commerce orders increased over 150% in March and over 400% in April 2020, compared to the prior year periodsGrowth in e-commerce orders surged across all online channels, including www.igourmet.com and www.mouth.com as well as specialty grocery products offered through our offerings on www.amazon.com, www.walmart.com, and www.ebay.com
We quickly pivoted foodservice resources and products to direct-to-consumer offerings, while launching new products developed by our e-commerce teams specifically tailored for the current market environmentRecent product launches, including virtual tasting partnerships, are receiving positive national media coverageOur e-commerce customer base has expanded significantly as unique e-commerce customers in April were over 31,000, an increase of over 290% over the prior year periodSafely and seamlessly handled significant increases in order levels across multiple sales channels and fulfilled 35,000 orders for the month of April, a 350% increase compared to 7,500 from the prior year periodIVFH plans on further expanding its data driven digital marketing efforts, launching new specialty food and grocery products, and partnerships throughout 2020 to drive e-commerce opportunities and capitalize on growing interest from both e-commerce consumers and traditional foodservice-oriented businessesMr. Klepfish continued, “Strong direct-to-consumer sales are partially offsetting lower specialty foodservice distribution revenue due to the significant impact the COVID-19 pandemic has had on the restaurant, travel and hospitality industries. We are encouraged by early indications of improving weekly trends in our foodservice business as state and local municipalities re-start their economies and allow businesses to re-open. We continue to manage the items under our control, and we are focused on expanding our foodservice partnerships and channels. In addition, as we leverage our multi-channel platform and specialty foodservice expertise, we believe we are well positioned to grow as the foodservice industry recovers.”“We expect direct-to-consumer and e-commerce trends are likely to continue to accelerate as consumers become increasingly comfortable with purchasing food online. We believe we are well positioned to capitalize on these growing trends within the food industry as a result of the investments we have made in our e-commerce centric specialty food platform over the last two years. Specifically, IVFH has created a strong, data-driven foundation for our specialty food e-commerce business which leverages our deep expertise in procurement, logistics, fulfillment, and digital marketing. During 2020, we plan to further enhance and expand our platform and operations as we move into our recently purchased warehouse in Mountaintop, Pennsylvania, go live with new www.igourmet.com and www.ivfh.com websites, and continue expanding our products, services, partnerships, and channels. I am encouraged with the progress we are making, the direction we are headed and the potential we have to create value for our shareholders in 2020 and beyond.” “Finally, and most importantly, I want to share a special thank you to all IVFH employees who have worked extremely hard to safely provide our customers with essential products and services throughout this challenging period,” concluded Mr. Kelpfish. For the twelve months of fiscal 2019, total revenue increased 9.4% to $57.9 million, compared to $52.9 million last year. IVFH’s revenue decreased to $17.7 million during the three months ended December 31, 2019, compared to $18.0 million for the three months ended December 31, 2018. Deferred revenue which includes revenues associated with the Company’s e-commerce subscription services, including both Mouth and iGourmet, was $0.5 million at December 31, 2019, compared to $0.6 million at December 31, 2018. At December 31, 2019, IVFH had approximately 100,000 active and unique e-commerce customers, in line with the same period a year ago. For the 2019 fourth quarter, selling and administrative (“SG&A”) expense, as a percentage of net revenue, was 27.8% compared to 26.1% in the prior year quarter, and 27.9% in the 2019 third quarter. For the twelve months of 2019, SG&A expense, as a percentage of net revenue, was 28.4% compared to 26.7% for 2018. The year-over-year increase in SG&A expenses included investments the Company continued to make to support growth including investments associated with procurement, accounting, and systems, as well as the expansion of fulfillment capabilities within the iGourmet warehouse for both e-commerce and specialty foodservice and increases in non-cash charges including depreciation and amortization.For the 2019 fourth quarter, IVFH reported net income of $0.2 million, or $0.01 per diluted share, compared to net income of $0.8 million, or $0.02 per diluted share in the prior year’s fourth quarter. Adjusting for amortization of intangibles and stock related expenses, 2019 fourth quarter net income was $0.5 million, or 0.015 per diluted share, compared to $1.0 million, or $0.03 per diluted share for the same period last year.For the twelve months of 2019, net income was $0.2 million or $0.01 per diluted share, compared to $1.7 million, or $0.05 per diluted share for the twelve months of 2018. Adjusting for amortization of intangibles and stock related expenses, 2019 twelve-month net income was $1.5 million, or 0.045 per diluted share, compared to $2.6 million, or $0.08 per diluted share for the same period last year. Cash EBITDA for the 2019 fourth quarter was $0.7, compared to $1.1 million in the prior year quarter. For the twelve months of 2019, Cash EBITDA was $2.0 million, compared to $3.1 million for the same period a year ago.About Innovative Food Holdings, Inc.
Innovative Food Holdings, Inc. is an interconnected data driven platform of small, specialty food companies serving business and consumer customers. The platform offers efficient, cost effective, and transparent sourcing of over 7,000 specialty food products including proprietary branded products. Sales channels on the platform include specialty foodservice channels and data driven DTC e-commerce channels including leading specialty food direct-to-consumer e-commerce websites www.igourmet.com and www.mouth.com as well as a strong specialty food omnichannel offering via www.amazon.com, www.ebay.com and www.walmart.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” or “expect.” Additional factors that could also cause actual results to differ materially relate to the global COVID-19 crisis. 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)Innovative Food Holdings, Inc.
Consolidated Statements of Operations
(unaudited)
“The COVID-19 pandemic has had an unprecedented impact on the country and our industry. Our thoughts are with everyone who has been impacted,” stated Sam Klepfish, CEO of Innovative Food Holdings.“The e-commerce strategy we have been pursuing over the past two years has enabled IVFH to handle a significant influx of direct-to-consumer orders, as monthly e-commerce orders surged in March and April and increased over 150%, and over 400%, respectively. Furthermore, our unique multi-channel infrastructure provided us with the flexibility and resources to seamlessly offer a wide variety of foodservice products and other specialty grocery products directly to consumers, while providing a high level of customer service.”“I believe that March and April’s orders demonstrate the unique capabilities and robust scalability of our growing e-commerce centric platform. In addition, the recent surge in e-commerce orders demonstrates the growing awareness of our direct-to-consumer brands. Consumers are increasingly seeking high-quality specialty grocery products, as well as specialty food themed kits, curated gifts and monthly subscriptions, which we believe provides significant opportunities for continued growth,” continued Mr. Klepfish. Recent DevelopmentsThe COVID-19 pandemic has caused revenue to shift towards e-commerce channels and we have quickly expanded e-commerce offerings and shifted resources from our foodservice business to keep up with recent specialty food and grocery demandsMonthly e-commerce orders increased over 150% in March and over 400% in April 2020, compared to the prior year periodsGrowth in e-commerce orders surged across all online channels, including www.igourmet.com and www.mouth.com as well as specialty grocery products offered through our offerings on www.amazon.com, www.walmart.com, and www.ebay.com
We quickly pivoted foodservice resources and products to direct-to-consumer offerings, while launching new products developed by our e-commerce teams specifically tailored for the current market environmentRecent product launches, including virtual tasting partnerships, are receiving positive national media coverageOur e-commerce customer base has expanded significantly as unique e-commerce customers in April were over 31,000, an increase of over 290% over the prior year periodSafely and seamlessly handled significant increases in order levels across multiple sales channels and fulfilled 35,000 orders for the month of April, a 350% increase compared to 7,500 from the prior year periodIVFH plans on further expanding its data driven digital marketing efforts, launching new specialty food and grocery products, and partnerships throughout 2020 to drive e-commerce opportunities and capitalize on growing interest from both e-commerce consumers and traditional foodservice-oriented businessesMr. Klepfish continued, “Strong direct-to-consumer sales are partially offsetting lower specialty foodservice distribution revenue due to the significant impact the COVID-19 pandemic has had on the restaurant, travel and hospitality industries. We are encouraged by early indications of improving weekly trends in our foodservice business as state and local municipalities re-start their economies and allow businesses to re-open. We continue to manage the items under our control, and we are focused on expanding our foodservice partnerships and channels. In addition, as we leverage our multi-channel platform and specialty foodservice expertise, we believe we are well positioned to grow as the foodservice industry recovers.”“We expect direct-to-consumer and e-commerce trends are likely to continue to accelerate as consumers become increasingly comfortable with purchasing food online. We believe we are well positioned to capitalize on these growing trends within the food industry as a result of the investments we have made in our e-commerce centric specialty food platform over the last two years. Specifically, IVFH has created a strong, data-driven foundation for our specialty food e-commerce business which leverages our deep expertise in procurement, logistics, fulfillment, and digital marketing. During 2020, we plan to further enhance and expand our platform and operations as we move into our recently purchased warehouse in Mountaintop, Pennsylvania, go live with new www.igourmet.com and www.ivfh.com websites, and continue expanding our products, services, partnerships, and channels. I am encouraged with the progress we are making, the direction we are headed and the potential we have to create value for our shareholders in 2020 and beyond.” “Finally, and most importantly, I want to share a special thank you to all IVFH employees who have worked extremely hard to safely provide our customers with essential products and services throughout this challenging period,” concluded Mr. Kelpfish. For the twelve months of fiscal 2019, total revenue increased 9.4% to $57.9 million, compared to $52.9 million last year. IVFH’s revenue decreased to $17.7 million during the three months ended December 31, 2019, compared to $18.0 million for the three months ended December 31, 2018. Deferred revenue which includes revenues associated with the Company’s e-commerce subscription services, including both Mouth and iGourmet, was $0.5 million at December 31, 2019, compared to $0.6 million at December 31, 2018. At December 31, 2019, IVFH had approximately 100,000 active and unique e-commerce customers, in line with the same period a year ago. For the 2019 fourth quarter, selling and administrative (“SG&A”) expense, as a percentage of net revenue, was 27.8% compared to 26.1% in the prior year quarter, and 27.9% in the 2019 third quarter. For the twelve months of 2019, SG&A expense, as a percentage of net revenue, was 28.4% compared to 26.7% for 2018. The year-over-year increase in SG&A expenses included investments the Company continued to make to support growth including investments associated with procurement, accounting, and systems, as well as the expansion of fulfillment capabilities within the iGourmet warehouse for both e-commerce and specialty foodservice and increases in non-cash charges including depreciation and amortization.For the 2019 fourth quarter, IVFH reported net income of $0.2 million, or $0.01 per diluted share, compared to net income of $0.8 million, or $0.02 per diluted share in the prior year’s fourth quarter. Adjusting for amortization of intangibles and stock related expenses, 2019 fourth quarter net income was $0.5 million, or 0.015 per diluted share, compared to $1.0 million, or $0.03 per diluted share for the same period last year.For the twelve months of 2019, net income was $0.2 million or $0.01 per diluted share, compared to $1.7 million, or $0.05 per diluted share for the twelve months of 2018. Adjusting for amortization of intangibles and stock related expenses, 2019 twelve-month net income was $1.5 million, or 0.045 per diluted share, compared to $2.6 million, or $0.08 per diluted share for the same period last year. Cash EBITDA for the 2019 fourth quarter was $0.7, compared to $1.1 million in the prior year quarter. For the twelve months of 2019, Cash EBITDA was $2.0 million, compared to $3.1 million for the same period a year ago.About Innovative Food Holdings, Inc.
Innovative Food Holdings, Inc. is an interconnected data driven platform of small, specialty food companies serving business and consumer customers. The platform offers efficient, cost effective, and transparent sourcing of over 7,000 specialty food products including proprietary branded products. Sales channels on the platform include specialty foodservice channels and data driven DTC e-commerce channels including leading specialty food direct-to-consumer e-commerce websites www.igourmet.com and www.mouth.com as well as a strong specialty food omnichannel offering via www.amazon.com, www.ebay.com and www.walmart.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” or “expect.” Additional factors that could also cause actual results to differ materially relate to the global COVID-19 crisis. 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)Innovative Food Holdings, Inc.
Consolidated Statements of Operations
(unaudited)
