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

/EIN News/ -- 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 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. 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
rwallerstein@IVFH.com	andrew@smberger.com