Innovative Food Holdings, Inc. Reports Financial Results for Fourth Quarter and Full Year of 2020
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 and .
Additional information is available at .
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 |
