Innovative Food Holdings, Inc. Reports 2022 First Quarter Financial Results

Rhea-AI Summary

Innovative Food Holdings, Inc. (IVFH) reported a record first-quarter revenue of $15.6 million, marking a 28% increase year-over-year. Specialty foodservice revenue surged 69% to $11.5 million, benefiting from increased demand in the hospitality sector as restrictions eased. However, eCommerce revenue declined 28% to $3.6 million. The company recorded a GAAP net loss of $(1.2 million), an improvement from $(1.8 million) in the same period last year. Management remains optimistic about long-term growth, citing strategic initiatives and a resilient eCommerce platform.

Positive

• 28% year-over-year revenue increase to $15.6 million.
• Specialty foodservice revenue rose 69% to $11.5 million.
• Improved SG&A expenses as a percentage of revenue to 33%.
• Strategic initiatives for eCommerce and specialty foods expansion.

Negative

• eCommerce revenue decreased 28% to $3.6 million.
• GAAP net loss of $(1.2 million) despite revenue growth.

• Total revenue up 28% year-over-year to a first quarter record of $15.6 million
• Specialty foodservice revenue increased 69% year-over-year to a first quarter record
• Pursuing organic and non-organic initiatives to expand growth of digitally native brands on IVFH’s eCommerce platform

BONITA SPRINGS, Fla., May 17, 2022 (GLOBE NEWSWIRE) -- Innovative Food Holdings, Inc. (OTCQB: IVFH) (“IVFH” or the “Company”), a leading end-to-end DTC eCommerce platform and direct-to-chef online platform that provides high-quality, unique specialty foods through eCommerce offerings and multichannel partnerships, today reported its financial results for the first quarter of 2022.  

“Record first quarter sales are encouraging and reflect the benefits of our diversified revenue streams. We generated record specialty foodservice revenue driven by our nationwide direct-to-chef online program as well as strong demand from hospitality foodservice clients out of our Chicago and Pennsylvania facilities. Foodservice revenue has expanded above pre-COVID levels, as we successfully pursue growth opportunities on the back of positive market trends due to further reopening activities and we continue to leverage our platforms to provide unique high-quality specialty food offerings to chefs and other consumers across the U.S. In addition, our agile chef and consumer platforms are particularly important as we work with our customers and vendors to navigate unprecedented logistics, supply chain, and inflationary challenges,” stated Sam Klepfish, CEO of Innovative Food Holdings.

“While eCommerce sales remain above pre-COVID levels, we are not immune from the recent post-COVID challenges facing many eCommerce companies. There are significant market opportunities for companies like IVFH, which have a strong, agile and sophisticated end-to-end eCommerce platform. Our platform continues to attract experienced, talented and motivated team leaders, developing compelling partnerships, and increasing the effectiveness of our marketing initiatives to drive eCommerce sales in the coming quarters. In addition, we are pursuing additional organic and non-organic initiatives to leverage our eCommerce platform, which is supported by leading back-end logistics, fulfillment, and procurement capabilities, as well as our front-end digital infrastructure. We believe our powerful eCommerce platform is uniquely positioned to help small brands, as well as direct-to-consumer, and direct-to-chef companies navigate an increasingly complex business and eCommerce environment.”  

“We believe we are well positioned for long-term sales growth driven by higher foodservice revenue as well as reaccelerating eCommerce growth. As revenues scale further, we believe we can improve profitability by enhancing gross margin and leveraging our fixed costs,” concluded Mr. Klepfish.

Financial Results

Revenues in the 2022 first quarter increased 28% to a first quarter record of $15.6 million, compared to $12.2 million for the three months ended March 31, 2021. First-quarter revenue benefited from a 69% increase in specialty foodservice revenue, which was partially driven by the nationwide opening of restaurants and other foodservice establishments previously affected by COVID-19, as well as strong increases in travel related foodservice. In addition, the Company’s unique supply chain capabilities continue to provide reliable, consistently high-quality specialty foodservice solutions for its customers. First quarter eCommerce revenue was down 28% to $3.6 from $5.0 million for the same period last year.

The following table sets forth IVFH’s revenue by business category for the three months ended March 31, 2022, and March 31, 2021 (unaudited):

	Three Months Ended
	March 31, 2022			% of Net Sales			March 31, 2021			% of Net Sales			% Change
Specialty Foodservice	$	11,541,000		74	%		$	6,828,000		56	%		69	%
E-Commerce		3,612,000		23	%			4,980,000		41	%		-28	%
National Brand Management		284,000		2	%			226,000		2	%		26	%
Warehouse and Logistics Services		206,000		1	%		$	147,000		1	%		40	%
Total IVFH	$	15,643,000		100	%		$	12,181,000		100	%		28	%

For the 2022 first quarter, selling, general, and administrative (SG&A) expenses were $5.2 million, or 33% of revenue, compared to $4.9 million, or 39.8% of revenue for the same period last year. The $0.3 million increase was primarily due to increases in advertising and marketing costs, professional fees, and foodservice operating costs,

The Company recorded a GAAP net loss for the 2022 first quarter of $(1.2 million), or $(0.03) per share, compared to a GAAP net loss of $(1.8 million), or $(0.05) per share, in the prior year’s first quarter. Adjusted net income for the 2022 first quarter was a loss of $(1.4 million), or $(0.029) per share, compared to an adjusted net loss of $(1.5 million), or $(0.041) per share, for the same period last year.

Cash EBITDA, a non-GAAP metric (see tables below), for the 2022 first quarter was a loss of $(1.2 million), compared to Cash EBITDA loss of $(1.3 million) in the prior year’s first quarter.

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, international crisis, environmental and economic issues 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)
	March 31,				December 31,
	2022				2021
	(unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	3,111,168			$	6,122,671
Accounts receivable, net		3,422,003				3,256,764
Inventory		3,209,945				3,109,984
Other current assets		389,513				314,107
Total current assets		10,132,629				12,803,526
Property and equipment, net		8,094,038				8,186,227
Investments		286,725				286,725
Right to use assets, operating leases, net		199,474				232,381
Right to use assets, finance leases, net		680,358				669,039
Other amortizable intangible assets, net		61,987				72,218
Goodwill and other unamortizable intangible assets		1,532,822				1,532,822
Total assets	$	20,988,033			$	23,782,938
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities	$	4,473,440			$	5,702,905
Accrued interest		42,794				29,349
Deferred revenue		1,250,944				1,631,406
Line of Credit		2,000,000				2,000,000
Notes payable - current portion, net of discount		412,491				412,961
Lease liability - operating leases, current		63,361				74,088
Lease liability - finance leases, current		182,664				159,823
Contingent liability - current portion		187,000				187,000
Total current liabilities		8,612,694				10,197,532
Lease liability - operating leases, non-current		136,113				158,293
Lease liability - finance leases, non-current		478,262				499,240
Contingent liability - long-term		108,600				108,600
Note payable - long term portion, net		5,319,914				5,409,172
Total liabilities		14,655,583				16,372,837
Commitments & Contingencies (see note 16)
Stockholders' equity
Common stock: $0.0001 par value; 500,000,000 shares authorized; 49,343,846 and 48,879,331 shares issued, and 46,506,266 and 46,041,751 shares outstanding at March 31, 2022 and December 31, 2021, respectively		4,931				4,885
Additional paid-in capital		41,815,390				41,662,710
Treasury stock: 2,623,171 and 2,623,171 shares outstanding at March 31, 2022 and December 31, 2021, respectively.		(1,141,370	)			(1,141,370	)
Accumulated deficit		(34,346,501	)			(33,116,124	)
Total stockholders' equity		6,332,450				7,410,101
Total liabilities and stockholders' equity	$	20,988,033			$	23,782,938

Innovative Food Holdings, Inc. Consolidated Statements of Operations (unaudited)
	For the Three				For the Three
	Months Ended				Months Ended
	March 31				March 31
	2022				2021
Revenue	$	15,643,111			$	12,180,899
Cost of goods sold		11,917,179				8,878,914
Gross margin		3,725,932				3,301,985
Selling, general and administrative expenses		5,172,426				4,850,828
Total operating expenses		5,172,426				4,850,828
Operating loss		(1,446,494	)			(1,548,843	)
Other income (expense:)
Impairment of investment		-				(209,850	)
Gain on interest rate swap		294,000				-
Other leasing income		5,090				5,140
Interest expense, net		(82,973	)			(90,318	)
Total other income (expense)		216,117				(295,028	)
Net loss before taxes		(1,230,377	)			(1,843,871	)
Provision for income taxes		-				-
Net loss	$	(1,230,377	)		$	(1,843,871	)
Net loss per share – basic and diluted	$	(0.03	)		$	(0.05	)
Weighted average shares outstanding – basic and diluted		46,256,160				35,872,143

 

Innovative Food Holdings, Inc. Consolidated Statements of Cash Flows
	Three Months Ended (unaudited)
	March 31, 2022				March 31, 2021
Adjusted Net Income and EPS(1)
Revenue	$	15,643,111			$	12,180,899
Net Income		(1,230,377	)			(1,843,871	)
Amortization of intangible assets(2)		10,231				2,870
One-time charges		-				209,850
One-time gain		(294,000	)			-
Stock related expenses(3)		152,726				157,791
Adjusted Net Income ( Loss)	$	(1,361,420	)		$	(1,473,360	)
Weighted Avg. Shares Outstanding Diluted(4)		46,256,160				35,872,143
Adjusted Fully Diluted EPS	$	(0.029	)		$	(0.041	)
	Three Months Ended (unaudited)
	March 31, 2022				March 31, 2021
Cash EBITDA(1)
Net Income	$	(1,230,377	)		$	(1,843,871	)
Interest expense, taxes		77,883				85,178
Depreciation & amortization		138,361				135,854
One-time charges		-				209,850
One-time gain		(294,000	)			-
Stock related expenses(3)		152,726				157,791
Cash EBITDA	$	(1,155,407	)		$	(1,255,198	)

(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 Food Holdings, Inc.	SM Berger & Company, Inc.
(718) 645-1755	(216) 464-6400
rwallerstein@IVFH.com	andrew@smberger.com

FAQ

What are IVFH's first quarter 2022 revenue results?

IVFH reported first quarter 2022 revenues of $15.6 million, up 28% from $12.2 million in Q1 2021.

How did IVFH's specialty foodservice revenue perform in Q1 2022?

Specialty foodservice revenue increased 69% to $11.5 million in Q1 2022.

What was the net loss for IVFH in the first quarter of 2022?

The company reported a GAAP net loss of $(1.2 million) for Q1 2022.

How did IVFH's eCommerce revenue change in Q1 2022?

eCommerce revenue decreased by 28% to $3.6 million compared to $5.0 million in Q1 2021.

What initiatives is IVFH pursuing for growth?

IVFH is pursuing organic and non-organic initiatives to expand its digital brands and improve eCommerce effectiveness.