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

Friday, 16. April 2021 17:30

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 WallersteinAndrew M. Berger
Investor RelationsManaging Director
Innovative Food Holdings, Inc.SM Berger & Company, Inc.
(718) 645-1755(216) 464-6400
rwallerstein@IVFH.comandrew@smberger.com

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