Market Overview

Innovative Food Holdings, Inc. Reports Financial Results for Third Quarter and Nine Months of 2019

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Third Quarter Revenue Increased 12% to $13.5 Million
Specialty Foodservice Revenue Up 10% to $11.6 Million
e-commerce Revenue Up 33% to $1.6 Million

BONITA SPRINGS, Fla., Nov. 14, 2019 (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 third quarter and nine months of 2019.

Operating Highlights include:

  • iGourmet partnered with, one of the leading voices within the food industry, to launch branded specialty food gift baskets and gift boxes that are now available at www.igourmet.com, as well as omnichannel partners including www.amazon.com and www.walmart.com.
  •  iGourmet further expanded its client base of white label partners that leverage iGourmet's logistics, procurement, and fulfillment capabilities. 
  • A new specialty foodservice partner launched within Gourmet Foodservice Group towards the end of the quarter.
  • Completed the purchase of an approximately 200,000 square foot warehouse on 15 acres in Mountaintop, Pennsylvania.  This facility will significantly expand IVFH's e-commerce and specialty foodservice logistic and warehouse capabilities for both perishable and nonperishable food products.

Sam Klepfish, CEO of Innovative Food Holdings stated, "I am pleased by the positive momentum currently underway at IVFH, which I believe is a direct result of the investments we are making in our platform and the ongoing success of our growth oriented, e-commerce business strategy. Year-to-date e-commerce revenue has increased 51% from the prior year period.  This growth occurred while we strategically limited marketing expenditures and focused on investments in our data-driven specialty food platform and e-commerce assets.  We are also leveraging our highly successful ‘back end' specialty food procurement, logistics, and warehousing capabilities and these ongoing ‘back end' investments are improving operating efficiencies and further optimizing our unique platform." 

"For the second consecutive quarter SG&A as a percent of revenue has declined sequentially, despite continual enhancements in our platform.  While the investments we are making in our business have impacted near-term profitability, we believe that IVFH is well positioned for significant top- and bottom-line growth opportunities in the rapidly changing specialty food industry."

"We have made significant progress upgrading our digital infrastructure and we expect to go live with our new re-platformed iGourmet website by the first quarter of 2020.  This new website is designed to improve the user experience, our marketing capabilities and allow iGourmet to leverage a wide variety of data driven marketing tools and applications, many of which are already in use by one of our other e-commerce assets, mouth.com.  Over the coming quarters, our focus will transition from enhancing our platform to driving customer acquisition and engagement."

Mr. Klepfish concluded: "2019 is shaping up to be a record year of revenue growth.  We believe we are well positioned for continued revenue expansion and improved profitability in 2020 as a result of this year's enhancements to our compelling data driven specialty food platform.  We are excited by the direction we are headed and the opportunities we have to create value for our shareholders." 

IVFH's revenue increased to $13.5 million during the three months ended September 30, 2019, compared to $12.1 million for the three months ended September 30, 2018.  The primary drivers of the 12% increase in third quarter revenue were strong growth in the Company's specialty foodservice and e-commerce businesses.  For the first nine months of fiscal 2019, total revenue increased 15% to $40.3 million, compared to $35.0 million last year. 

Deferred revenue which includes revenues associated with the Company's e-commerce subscription services, including both Mouth and iGourmet, increased to $198,000 at September 30, 2019, compared to $28,000 at September 30, 2018.  IVFH had approximately 21,700 active and unique e-commerce customers, compared to approximately 21,600 customers for the same period last year.

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

  Three Months Ended
  September 30,
2019

  % of Net
Sales

  September 30,
2018

  % of Net
Sales

 
Change
Specialty Foodservice $   11,574,373   86 %   $   10,481,021   87 %   10 %
E-commerce   1,572,031   12 %     1,181,933   10 %   33 %
National Brand Management     319,360   2 %       391,536   3 %   -18 %
Total IVFH $   13,465,764   100 %   $   12,054,490   100 %   12 %


  Nine Months Ended
  September 30,
2019

  % of Net
Sales

  September 30,
2018

  % of Net
Sales

  %
Change
Specialty Foodservice $   33,542,367   83 %   $   29,739,129   85 %   13 %
E-commerce   5,452,024   14 %     3,617,039   10 %   51
%
National Brand Management      1,256,039   3 %       1,603,869   5 %   -22 %
Total IVFH $   40,250,430   100 %   $   34,960,037   100 %   15 %

For the 2019 third quarter, selling and administrative ("SG&A") expense, as a percentage of net revenue, was 27.9% compared to 27.8% in the prior year quarter, and 28.9% in the 2019 second 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 first nine months of 2019, SG&A expense, as a percentage of net revenue, was 28.7% compared to 27.0% for 2018.

For the 2019 third quarter, IVFH reported a net loss of $158,000, or $0.005 per share, compared to net income of $149,000, or $0.004 per diluted share in the prior year's third quarter. Adjusting for amortization of intangibles and stock related expenses, 2019 third quarter net income was $149,000, or 0.004 per diluted share, compared to $416,000, or $0.012 per diluted share for the same period last year.  For the first nine months of 2019, net income was $28,000, or $0.001 per diluted share, compared to $927,000, or $0.027 per diluted share for the first nine months of 2018. Adjusting for amortization of intangibles and stock related expenses, 2019 nine-month net income was $1.0 million, or 0.030 per diluted share, compared to $1.6 million, or $0.048 per diluted share for the same period last year. 

Cash EBITDA for the 2019 third quarter was $233,000, compared to $495,000 in the prior year quarter.  For the first nine months of 2019, Cash EBITDA was $1.3 million, compared to $2.0 million for the same period a year ago.

IVFH's balance sheet remains strong with $2.8 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 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." 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

  September 30,     December 31,  
  2019     2018  
  (unaudited)          
ASSETS              
Current assets              
Cash and cash equivalents   2,825,995     $ 4,759,817  
Accounts receivable, net   3,179,676       3,039,756  
Inventory   2,695,489       2,301,377  
Other current assets   194,372       144,301  
Total current assets   8,895,532       10,245,251  
 
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