Market Overview

Innovative Food Holdings, Inc. Reports Financial Results for Second Quarter and First Half of 2019

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Second Quarter Revenue Increased 16% to $13.9 Million
Specialty Foodservice Revenue Up 17% to $11.7 Million
e-commerce Revenue Up Over 29% to $1.8 Million

BONITA SPRINGS, Fla., Aug. 14, 2019 (GLOBE NEWSWIRE) -- Innovative Food Holdings, Inc. (OTCQB:IVFH), ("IVFH" or "the Company") an interconnected 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 second quarter and first half of 2019.

Sam Klepfish, CEO of Innovative Food Holdings stated, "IVFH experienced strong growth across both our specialty foodservice and e-commerce channels during the 2019 second quarter, reflecting increasing customer awareness of our product offerings, as well as successfully leveraging the resources of our interconnected platform.  Our continued emphasis on providing customers with new, exciting, and unique products that reflect the latest food trends helped drive strong second quarter results."

"We continue to make strategic investments to support current and future growth opportunities across our business and during the second quarter we added a new e-commerce focused corporate VP of Operations and expanded our accounting capabilities and staff.  In addition, we recently announced a new independent board member and signed an agreement to purchase a 200,000 square-foot fulfillment facility that adds significant growth capacity and will support both our national e-commerce and northeast specialty foodservice distribution businesses.

"IVFH's focus on unique specialty foods supports growing consumer preferences to smaller, high-quality, digitally-driven suppliers.  As a result, we are experiencing higher levels of demand and interest from current and potential customers.  I am excited by our growth opportunities for the remainder of 2019 and beyond," concluded. Mr. Klepfish. 

IVFH's revenue increased to $13.9 million during the three months ended June 30, 2019, compared to $12.0 million for the three months ended June 30, 2018.  The primary drivers of the 16% increase in second quarter revenue was due to strong growth in the Company's specialty foodservice and e-commerce businesses.  For the first half of fiscal 2019, total revenue increased 17% to $26.8 million, compared to $22.9 million last year. 

Deferred revenue which includes revenues associated with the Company's e-commerce subscription services, including both Mouth and iGourmet, increased to $281,000 at June 30, 2019, compared to $26,000 at June 30, 2018. For the 2019 second quarter, IVFH had over 21,650 active and unique e-commerce customers, which is an increase of approximately 17% from the same period last year.

The following table sets forth IVFH's revenue by business category for the three and six months ended June 30, 2019 and June 30, 2018:

  Three Months Ended
  June 30,
2019
  % of Net Sales
  June 30,
2018

  % of Net Sales
  %  Change
Specialty Foodservice. $   11,670,000   84%   $   10,013,000   83%   17%
E-commerce   1,784,000   13%     1,384,000   12%   29%
National Brand Management     471,000   3%       592,000   5%   -20%
Total IVFH $   13,925,000   100%   $   11,989,000   100%   16%


  Six Months Ended
  June 30,
2019
  % of Net Sales
  June 30,
2018

  % of Net Sales
  % Change
Specialty Foodservice $   21,968,000   82%   $  19,258,000   84%   14%
E-commerce   3,880,000   15%     2,435,000   11%   59%
National Brand Management     937,000   3%       1,213,000   5%   -23%
Total IVFH $  26,785,000   100%   $   22,906,000   100%   17%

For the 2019 second quarter, selling and administrative ("SG&A") expense, as a percentage of net revenue, was 28.9% compared to 25.6% in the prior year quarter.  SG&A expenses increased as a result of investments the Company continues 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.  For the 2019 first six months, SG&A expense, as a percentage of net revenue, was 29.1% compared to 26.5% for 2018.

For the 2019 second quarter, net income was $22,000, or $0.00 per diluted share, compared to $330,000, or $0.01 per diluted share in the prior year's second quarter. For the 2019 first six months, net income was $185,000, or $0.01 per diluted share, compared to $779,000, or $0.02 per diluted share for the 2018 first six months.

Cash EBITDA for the 2019 second quarter was $467,000, compared to $785,000 in the prior year quarter.  For the 2019 first six months, Cash EBITDA was $1.1 million, compared to $1.5 million for the same period a year ago.

IVFH's balance sheet remains strong with $3.2 million of cash and cash equivalents, and the full availability of over $2 million in commercial credit including the Company's $2 million commercial credit line which was extended through August 2021.

About Innovative Food Holdings, Inc.
Innovative Food Holdings, Inc. is an interconnected 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.jet.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," "anticipate," "believe," "intend," "plan," "might," "potentially" or "expect." The Company does not intend to update these forward-looking statements. The content of the websites referenced above are not incorporated herein. 

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


Innovative Food Holdings, Inc.
Consolidated Balance Sheets

    June 30,     December 31,  
    2019     2018  
    (unaudited)        
ASSETS                
Current assets                
Cash and cash equivalents   $ 3,158,853     $ 4,759,817  
Accounts receivable, net     3,018,700       3,039,756  
Inventory     2,217,174       2,301,377  
Other current assets     197,583       144,301  
Total current assets     8,592,310       10,245,251  
                 
Property and equipment, net     2,235,416       2,456,610  
Investments     395,025       339,525  
Right of use assets, operating leases, net     268,638       -  
Right of use assets, finance leases, net     122,619       -  
Other amortizable intangible assets, net     1,702,301       2,158,498  
Goodwill and other unamortizable intangible assets     2,183,065       2,183,065  
Total assets   $ 15,499,374     $ 17,382,949  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY                
Current liabilities                
Accounts payable and accrued liabilities   $ 2,043,215     $ 3,689,868  
Accrued interest
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