IVFH - Innovative Food Holdings Inc. Reports Financial Results for Third Quarter and First Nine Months of 2021
Total Revenue Increased 35% YoY to a Third Quarter Record
Specialty Foodservice Increased 79% YoY
Third Quarter E-Commerce Revenue up 69% on a Two-Year Basis
BONITA SPRINGS, Fla., Nov. 23, 2021 (GLOBE NEWSWIRE) -- Innovative Food Holdings, Inc. (OTCQB: IVFH) (“IVFH” or the “Company”), a leading end-to-end DTC e-commerce platform and direct-to-chef platform that provides high-quality, unique specialty foods through e-commerce offerings and multichannel partnerships, today reported its financial results for the third quarter and first nine months of 2021.
“We achieved record third quarter revenue, demonstrating the power of our platforms. Specialty foodservice revenue accelerated from the second quarter as reopening activity increased. In addition, as supply chain issues continue to create challenges for many foodservice establishments, our agile direct-to-chef platform enables IVFH to provide high quality, reliable, specialty food products that meet the needs of our customers,” stated Sam Klepfish, CEO of Innovative Food Holdings.
“I am excited by the progress we are making growing our aggregated e-commerce businesses. Compared to pre-COVID levels, third quarter e-commerce sales were up 69% from the 2019 third quarter and have grown 100% from the 2019 first nine months. Our strong DTC e-commerce platform, and innovative end-to-end capabilities are resonating with consumers, as well as business and channel partners. Throughout the year we have increased the number of partners and sales channels, while investing in new, compelling assets to further enhance the capabilities of our e-commerce platform. As a result, our e-commerce business is heading into the fourth quarter very well positioned for top and bottom-line growth.”
“I believe we have significant growth opportunities to rapidly scale our business and our brands, and to leverage the investments we have made over the past several years to build, grow and enhance our leading end-to-end e-commerce platform. As a result, given favorable current demand trends and continued market shifts towards e-commerce, I believe we are well positioned to unlock meaningful value for our shareholders,” concluded Mr. Klepfish.
Financial Results
Revenues in the 2021 third quarter increased 35% to a third quarter record of $15.2 million, compared to $11.2 million for the three months ended September 30, 2020. Third-quarter revenue benefitted from a 79% increase in specialty foodservice revenue, which was partially driven by the nationwide opening of restaurants and other foodservice establishments previously affected by COVID-19. In addition, the Company’s unique supply chain capabilities continue to provide reliable, consistently high-quality specialty foodservice solutions for its customers. Third quarter e-commerce revenue was up 69% from 2019 pre-Covid third quarter, reflecting robust organic growth, notwithstanding a 36% decrease in e-commerce revenues as a result of heightened COVID-19 driven demand in 2020 compared to 2021. For the first nine months of fiscal 2021, total revenue was $41.3 million, a 13% increase from $36.5 million 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, 2021, and September 30, 2020 (unaudited):
| Three Months Ended |
| September 30, 2021 |
| % of Net Sales |
| September 30, 2020 |
| % of Net Sales |
| % Change |
| Specialty Foodservice |
| $ |
| 12,060,000 |
| 79% |
| $ |
| 6,733,000 |
| 60% |
| 79% |
| E-commerce |
| 2,652,000 |
| 17% |
| 4,158,000 |
| 37% |
| -36% |
| National Brand Management |
| 261,000 |
| 2% |
| 254,000 |
| 2% |
| 3% |
| Logistics |
| 234,000 |
| 2% |
| 90,000 |
| 1% |
| 161% |
| Total IVFH |
| $ |
| 15,207,000 |
| 100% |
| $ |
| 11,235,000 |
| 100% |
| 35% |
| Nine Months Ended |
| September 30, 2021 |
| % of Net Sales |
| September 30, 2020 |
| % of Net Sales |
| % Change |
| Specialty Foodservice |
| $ |
| 29,049,000 |
| 70% |
| $ |
| 20,751,000 |
| 57% |
| 40% |
| E-commerce |
| 10,917,000 |
| 26% |
| 14,490,000 |
| 40% |
| -25% |
| National Brand Management |
| 752,000 |
| 2% |
| 787,000 |
| 2% |
| -5% |
| Logistics |
| 645,000 |
| 2% |
| 510,000 |
| 1% |
| 26% |
| Total IVFH |
| $ |
| 41,363,000 |
| 100% |
| $ |
| 36,538,000 |
| 100% |
| 13% |
For the 2021 third quarter, selling, general, and administrative (SG&A) expenses were $5.0 million, compared to $4.5 million for the same period last year. The $0.5 million increase was primarily due to higher operating costs, including increases in advertising costs and other costs associated with enhancing and expanding the Company’s platforms.
The Company reported GAAP net income for the 2021 third quarter of $0.4 million, or $0.01 per share, compared to a net loss of $(1.6 million), or $(0.05) per share, in the prior year’s third quarter. For the first nine months of 2021, the Company reported a net loss of $(2.4 million), or $(0.06) per share, compared to a net loss of $(6.6 million), or $(0.19) per share, for the first nine months of 2020.
Adjusted net income a non-GAAP metric (see tables below) for the 2021 third quarter was a loss of $(1.1 million), or $(0.028) per share, compared to an adjusted net loss of $(1.5 million), or $(0.042) per share, for the same period last year. For the first nine months of 2021, adjusted net income was a loss of $(3.4 million), or $(0.091) per share, compared to an adjusted net loss of $(4.0 million), or $(0.116) per share, for the same period last year.
Cash EBITDA, a non-GAAP metric (see tables below), for the 2021 third quarter was a loss of $(0.9 million), compared to a Cash EBITDA loss of $(1.3 million), in the prior year quarter. For the 2021 first nine months, Cash EBITDA was a loss of $(2.7 million), compared to a Cash EBITDA loss of $(3.5 million) for the same period a year ago.
About Innovative Food Holdings, Inc.
IVFH’s leading end-to-end direct-to-consumer e-commerce platform and direct-to-chef platform connect the world’s best artisan food makers with top chefs and epicurean consumers nationwide. Our unique ability to reach both specialty foodservice B2B customers, and consumers positions IVFH as a compelling resource for artisanal food producers, CPG brands, chefs, and consumers. IVFH’s owned online retailer brands on its leading DTC e-commerce 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.
Condensed Consolidated Balance Sheets
| September 30, |
| December 31, |
| 2021 |
| 2020 |
| (unaudited) |
| ASSETS |
| Current assets |
| Cash and cash equivalents |
| $ |
| 4,018,396 |
| $ |
| 5,060,015 |
| Accounts receivable, net |
| 3,580,246 |
| 2,380,305 |
| Inventory |
| 2,809,303 |
| 3,719,786 |
| Other current assets |
| 350,513 |
| 286,815 |
| Total current assets |
| 10,758,458 |
| 11,446,921 |
| Property and equipment, net |
| 8,266,851 |
| 8,550,401 |
| Investments |
| 286,725 |
| 496,575 |
| Right to use assets, operating leases, net |
| 259,091 |
| 246,737 |
| Right to use assets, finance leases, net |
| 697,592 |
| 776,439 |
| Other amortizable intangible assets, net |
| 91,770 |
| 100,380 |
| Goodwill and other unamortizable intangible assets |
| 1,532,822 |
| 1,532,822 |
| Total assets |
| $ |
| 21,893,309 |
| $ |
| 23,150,275 |
| LIABILITIES AND STOCKHOLDERS' EQUITY |
| Current liabilities |
| Accounts payable and accrued liabilities |
| $ |
| 4,322,900 |
| $ |
| 5,098,523 |
| Accrued interest, current portion |
| 36,069 |
| 28,873 |
| Deferred revenue |
| 1,056,011 |
| 2,917,676 |
| Line of Credit |
| 2,000,000 |
| 2,000,000 |
| Notes payable - current portion, net of discount |
| 487,339 |
| 1,741,571 |
| Lease liability - operating leases, current |
| 83,483 |
| 87,375 |
| Lease liability - finance leases, current |
| 157,371 |
| 146,004 |
| Contingent liability - current portion |
| 187,000 |
| 187,000 |
| Total current liabilities |
| 8,330,173 |
| 12,207,022 |
| Accrued interest, long term portion |
| 5,643 |
| - |
| Lease liability - operating leases, non-current |
| 175,608 |
| 159,362 |
| Lease liability - finance leases, non-current |
| 540,127 |
| 638,137 |
| Contingent liability - long-term |
| 108,600 |
| 116,600 |
| Note payable - long term portion, net |
| 7,213,214 |
| 6,151,345 |
| Total liabilities |
| 16,373,365 |
| 19,272,466 |
| Commitments & Contingencies (see note 16) |
| - |
| - |
| Stockholders' equity |
| Common stock: $0.0001 par value; 500,000,000 shares authorized; 48,510,881 and 38,209,060 shares issued, and 45,673,301 and 35,371,480 shares outstanding at September 30, 2021 and December 31, 2020, respectively |
| 4,849 |
| 3,817 |
| Additional paid-in capital |
| 41,470,627 |
| 37,415,155 |
| Treasury stock: 2,623,171 and 2,623,171 shares outstanding at September 30, 2021 and December 31, 2020, respectively. |
| (1,141,370 |
| ) |
| (1,141,370 |
| ) |
| Accumulated deficit |
| (34,814,162 |
| ) |
| (32,399,793 |
| ) |
| Total stockholders' equity |
| 5,519,944 |
| 3,877,809 |
| Total liabilities and stockholders' equity |
| $ |
| 21,893,309 |
| $ |
| 23,150,275 |
Innovative Food Holdings, Inc.
Condensed Consolidated Statements of Operations
(unaudited)
| For the Three |
| For the Three |
| For the Nine |
| For the Nine |
| Months Ended |
| Months Ended |
| Months Ended |
| Months Ended |
| September 30, |
| September 30, |
| September 30, |
| September 30, |
| 2021 |
| 2020 |
| 2021 |
| 2020 |
| Revenue |
| $ |
| 15,207,353 |
| $ |
| 11,234,626 |
| $ |
| 41,362,816 |
| $ |
| 36,538,195 |
| Cost of goods sold |
| 11,427,343 |
| 8,367,565 |
| 30,471,401 |
| 27,237,525 |
| Gross margin |
| 3,780,010 |
| 2,867,061 |
| 10,891,415 |
| 9,300,670 |
| Selling, general and administrative expenses |
| 4,998,673 |
| 4,466,631 |
| 14,512,803 |
| 13,974,822 |
| Impairment of intangible assets |
| - |
| - |
| - |
| 1,698,952 |
| Total operating expenses |
| 4,998,673 |
| 4,466,631 |
| 14,512,803 |
| 15,673,774 |
| Operating loss |
| (1,218,663 |
| ) |
| (1,599,570 |
| ) |
| (3,621,388 |
| ) |
| (6,373,104 |
| ) |
| Other income (expense:) |
| Gain on forgiveness of debt |
| 1,665,818 |
| - |
| 1,665,818 |
| - |
| Impairment of investment |
| - |
| - |
| (209,850 |
| ) |
| - |
| Other leasing income |
| 1,900 |
| 10,977 |
| 8,940 |
| 32,833 |
| Interest expense, net |
| (82,029 |
| ) |
| (54,749 |
| ) |
| (257,889 |
| ) |
| (211,815 |
| ) |
| Total other income (expense) |
| 1,585,689 |
| (43,772 |
| ) |
| 1,207,019 |
| (178,982 |
| ) |
| Net (loss) income before taxes |
| 367,026 |
| (1,643,342 |
| ) |
| (2,414,369 |
| ) |
| (6,552,086 |
| ) |
| Income tax expense |
| - |
| - |
| - |
| - |
| Net (loss) income |
| $ |
| 367,026 |
| $ |
| (1,643,342 |
| ) |
| $ |
| (2,414,369 |
| ) |
| $ |
| (6,552,086 |
| ) |
| Net (loss) income per share - basic |
| $ |
| 0.01 |
| $ |
| (0.05 |
| ) |
| $ |
| (0.06 |
| ) |
| $ |
| (0.19 |
| ) |
| Net (loss) income per share - diluted |
| $ |
| 0.01 |
| $ |
| (0.05 |
| ) |
| $ |
| (0.06 |
| ) |
| $ |
| (0.19 |
| ) |
| Weighted average shares outstanding - basic |
| 40,253,543 |
| 35,260,060 |
| 37,254,290 |
| 34,739,378 |
| Weighted average shares outstanding - diluted |
| 40,253,543 |
| 35,260,060 |
| 37,254,290 |
| 34,739,378 |
Innovative Food Holdings, Inc.
Condensed Consolidated Statements of Cash Flows
(unaudited)
| For the Nine |
| For the Nine |
| Months Ended |
| Months Ended |
| September 30, |
| September 30, |
| 2021 |
| 2020 |
| Cash flows from operating activities: |
| Net loss |
| $ |
| (2,414,369 |
| ) |
| $ |
| (6,552,086 |
| ) |
| Adjustments to reconcile net loss to net cash used in operating activities: |
| Gain on forgiveness of debt |
| (1,665,818 |
| ) |
| - |
| Impairment of intangible assets |
| - |
| 1,698,952 |
| Impairment of investment |
| 209,850 |
| - |
| Depreciation and amortization |
| 407,704 |
| 567,803 |
| Amortization of right-of-use asset |
| 76,005 |
| 137,712 |
| Amortization of prepaid loan fees |
| 9,368 |
| 9,403 |
| Stock based compensation |
| 476,132 |
| 378,006 |
| Provision for doubtful accounts |
| 32,443 |
| 226,254 |
| Changes in assets and liabilities: |
| Accounts receivable, net |
| (1,254,764 |
| ) |
| 1,291,467 |
| Inventory and other current assets, net |
| 869,165 |
| (1,049,069 |
| ) |
| Accounts payable and accrued liabilities |
| (747,187 |
| ) |
| 47,645 |
| Deferred revenue |
| (1,861,665 |
| ) |
| (159,991 |
| ) |
| Contingent liabilities |
| (8,000 |
| ) |
| (32,000 |
| ) |
| Operating lease liability |
| (76,005 |
| ) |
| (137,712 |
| ) |
| Net cash used in operating activities |
| (5,947,141 |
| ) |
| (3,573,616 |
| ) |
| Cash flows from investing activities: |
| Cash paid for website development |
| - |
| (14,000 |
| ) |
| Acquisition of property and equipment |
| (14,812 |
| ) |
| (128,618 |
| ) |
| Net cash used in investing activities |
| (14,812 |
| ) |
| (142,618 |
| ) |
| Cash flows from financing activities: |
| Proceeds from line of credit |
| - |
| 2,000,000 |
| Proceeds from Payroll Protection Plan Loan |
| 1,748,414 |
| 1,650,221 |
| Proceeds from sale of common stock, net of costs |
| 3,580,372 |
| - |
| Principal payments on debt |
| (299,924 |
| ) |
| (149,705 |
| ) |
| Principal payments financing leases |
| (108,528 |
| ) |
| (32,787 |
| ) |
| Net cash provided by financing activities |
| 4,920,334 |
| 3,467,729 |
| Decrease in cash and cash equivalents |
| (1,041,619 |
| ) |
| (248,505 |
| ) |
| Cash and cash equivalents at beginning of period |
| 5,060,015 |
| 3,966,050 |
| Cash and cash equivalents at end of period |
| $ |
| 4,018,396 |
| $ |
| 3,717,545 |
| Supplemental disclosure of cash flow information: |
| Cash paid during the period for: |
| Interest |
| $ |
| 250,967 |
| $ |
| 196,392 |
| Taxes |
| $ |
| - |
| $ |
| - |
| Non-cash investing and financing activities: |
| Transfer asset from property and equipment to right to use asset, financing lease |
| $ |
| - |
| $ |
| 8,344 |
| Building improvements financed under note payable |
| $ |
| 21,885 |
| $ |
| 1,900,000 |
| Increase in right to use assets & liabilities |
| $ |
| 88,359 |
| $ |
| 214,930 |
| Reclassification of accounts receivable to other assets |
| $ |
| 22,380 |
| $ |
| 45,675 |
| Capital lease for purchase of fixed assets |
| $ |
| 21,885 |
| $ |
| 152,548 |
| Three Months Ended (unaudited) |
| Nine Months Ended (unaudited) |
| September 30, 2021 |
| September 30, 2020 |
| September 30, 2021 |
| September 30, 2020 |
| Adjusted Net Income and EPS ( 1 ) |
| Revenue |
| $ |
| 15,207,353 |
| $ |
| 11,234,626 |
| $ |
| 41,362,816 |
| $ |
| 36,538,195 |
| Net Income (loss) |
| 367,026 |
| (1,643,342) |
| (2,414,369) |
| (6,552,086) |
| Amortization of intangible assets ( 2 ) |
| 2,870 |
| - |
| 8,610 |
| 210,032 |
| One-time charges |
| - |
| - |
| 209,850 |
| 1,917,891 |
| One-time gain |
| (1,665,818) |
| - |
| (1,665,818) |
| - |
| Stock related expenses ( 3 ) |
| 160,752 |
| 156,897 |
| 476,132 |
| 378,006 |
| Adjusted Net Income |
| $ |
| (1,135,170 ) |
| $ |
| (1,486,445 ) |
| $ |
| (3,385,595 ) |
| $ |
| (4,046,157 ) |
| Weighted Avg. Shares Outstanding Diluted ( 4 ) |
| 40,253,545 |
| 35,260,060 |
| 37,254,290 |
| 34,739,378 |
| Adjusted Fully Diluted EPS |
| $ |
| (0.028 ) |
| $ |
| (0.042 ) |
| $ |
| (0.091 ) |
| $ |
| (0.116 ) |
| Three Months Ended (unaudited) |
| Nine Months Ended (unaudited) |
| September 30, 2021 |
| September 30, 2020 |
| September 30, 2021 |
| September 30, 2020 |
| Cash EBITDA ( 1 ) |
| Net Income (loss) |
| $ |
| 367,026 |
| $ |
| (1,643,342) |
| $ |
| (2,414,369) |
| $ |
| (6,552,086) |
| Interest expense, taxes & other income |
| 80,129 |
| 43,772 |
| 248,949 |
| 178,982 |
| Depreciation & amortization |
| 135,733 |
| 125,338 |
| 407,676 |
| 567,804 |
| One-time charges |
| - |
| - |
| 209,850 |
| 1,917,891 |
| One-time gain |
| (1,665,818) |
| - |
| (1,665,818) |
| - |
| Stock related expenses ( 3 ) |
| 160,752 |
| 156,897 |
| 476,132 |
| 378,006 |
| Cash EBITDA |
| $ |
| (922,178 ) |
| $ |
| (1,317,335 ) |
| $ |
| (2,737,580 ) |
| $ |
| (3,509,403 ) |
| (1) |
| Adjusted Net Income and Cash EBITDA are each a non-GAAP metric. Management believes that the presentation of these non-GAAP financial measures provides useful information to investors because the information may allow investors to better evaluate ongoing business performance and certain components of the Company’s results. In addition, the Company believes that the presentation of these financial measures enhances an investor’s ability to make period-to-period comparisons of the Company’s operating results. This information should be considered in addition to the results presented in accordance with GAAP, and should not be considered a substitute for the GAAP results. |
| (2) |
| Includes non-cash amortization charges related to assets acquired |
| (3) |
| Includes stock and options-based compensation and expenses |
| (4) |
| Full Year GAAP weighted fully diluted share count |
| Company Contact: |
| Investor and Media Contact: |
| Ronit Wallerstein |
| Andrew M. Berger |
| Investor Relations |
| Managing Director |
| Innovative Foods Holdings, Inc. |
| SM Berger & Company, Inc. |
| (954) 881-9158 |
| (216) 464-6400 |
| rwallerstein@IVFH.com |
| andrew@smberger.com |