• Fourth quarter total revenue up 14.5% year-over-year to a quarterly record of $23.9 million
  • Continued focus on profitability produces fourth quarter net income of $1.1 million or $0.02 per diluted share
  • Fourth-quarter operating cash flow of $2.2 million

BONITA SPRINGS, Fla., April 03, 2023 (GLOBE NEWSWIRE) -- Innovative Food Holdings, Inc. (OTCQB: IVFH) (“IVFH” or the “Company”), a national seller of gourmet specialty foods to professional and home chefs today reported its financial results for the fourth quarter and full year of 2022.  

“Our record 2022 fourth-quarter results completed a strong year of total revenue growth and significant improvements in profitability and operating cash flow. Throughout the year we focused on supporting our professional and home chef customers as the industry navigated unprecedented logistics, supply chain, and inflationary challenges. Total revenues grew 28.8% to an annual record of $80.1 million, reflecting the value we provide our nationwide customers and our desire to help professional and home chefs make meals special,” stated Bill Bennett, CEO of Innovative Food Holdings.

Mr. Bennett continued, “I am pleased to report we produced our second consecutive profitable quarter as net income increased significantly from $9,746 for the 2022 third quarter to $1.1 million for the fourth quarter. We believe this reflects growing momentum within our business and the successful actions underway to scale revenue, drive efficiencies, and leverage fixed operating costs. The progress we made throughout 2022 is encouraging even as we made the difficult decisions to proactively reduce eCommerce sales by limiting digital marketing investments in response to higher customer acquisition costs and expanded privacy rules. In addition, gross margin during 2022 was impacted by revenue mix and inflationary pressures. Stabilizing gross margin is an important near-term initiative and we believe there are opportunities to offset inflationary trends.”

“We are committed to helping our vendors and customers navigate a more uncertain economic environment by continuing to provide a customer friendly marketplace that connects the world’s best artisan food makers with top professional chefs and passionate home chefs nationwide.   As my tenure as CEO begins, I am focused on engaging with our customers, vendors, team members, and partners across the country to create a multi-year strategic growth plan that leverages IVFH’s foodservice and eCommerce assets. IVFH has a compelling platform and value proposition. I am excited by the opportunities to take the Company to the next level and create value for our shareholders,” concluded Mr. Bennett.

Financial Results
Revenues in the 2022 fourth quarter increased 14.5% to a fourth-quarter record of $23.9 million, compared to $20.9 million for the three months ended December 31, 2021. Fourth-quarter revenue benefitted from a 53.2% increase in specialty foodservice revenue, which was primarily driven by growing demand for the Company’s high-quality specialty food offerings from restaurants, hotels, airlines, and other foodservice customers. Fourth-quarter eCommerce revenue was down 37.7% to $5.4 million from $8.6 million for the same period last year. For the 2022 full year, total revenue was a record $80.1 million, a 28.8% increase from $62.2 million for the same period last year.

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

 Three Months Ended
  December 31, 2022 % of Net
Sales		   December 31, 2021 % of Net
Sales		  %
Change		 
Specialty Foodservice$17,941,000 75% $11,709,000 56% 53%
E-Commerce 5,355,000 23%  8,601,000 41% -38%
National Brand Management 298,000 1%  285,000 2% 5%
Warehouse and Logistics Services 283,000 1%  255,000 1% 11%
Total IVFH$23,877,000 100% $20,850,000 100% 15%


 Year Ended Months Ended
 December 31, 2022 % of Net
Sales		   December 31, 2021 % of Net
Sales		  %
Change		 
Specialty Foodservice$64,013,000 80
% $40,758,000 66% 57%
E-Commerce 13,992,000 17%  19,518,000 31% -28%
National Brand Management 1,171,000 2%  1,037,000 2% 13%
Warehouse and Logistic Services 927,000 1%  899,000 1% 3%
Total IVFH$80,103,000 100% $62,212,000 100% 29%


For the 2022 fourth quarter, gross margin was 25.1%, compared to 29.1% for the same period last year. The decline in gross margin was primarily due to changes in revenue mix and higher year-over-year fuel, shipping, and logistics costs. For the 2022 full year, gross margin was 23.3%, compared to 27.2% last year.

For the 2022 fourth quarter, selling, general, and administrative (SG&A) expenses were $4.7 million, or 19.7% of revenue, compared to $6.0 million, or 28.9% of revenue for the same period last year. The $1.3 million decrease was primarily due to the Company’s efforts to drive efficiencies and reduce advertising and marketing expenses in response to higher customer acquisition costs and expanded privacy rules that significantly reduce data sharing. For the 2022 full year, SG&A expenses were $19.7 million, or 24.6% of revenue compared to $20.5 million, or 33.0% of revenue in the prior year period.

For the 2022 fourth quarter, operating income as a percentage of sales improved to 5.4% from 0.2% for the same period last year. This improvement was a result of higher sales and a $1.3 million year-over-year reduction in SG&A expenses.

The Company recorded GAAP net income for the 2022 fourth quarter of $1.1 million, or $0.02 per diluted share, compared to a GAAP net income of $1.7 million, or $0.04 per share, in the prior year’s fourth quarter, which included a $1.8 million pre-tax gain on the forgiveness of debt. For the 2022 full year, the Company reported a GAAP net loss of $(1.4 million), or $(0.03) per share, compared to a GAAP net loss of $(0.7 million), or $(0.02) per share, for the 2021 full year.  

The Company generated $2.2 million in cash from operating activities for the 2022 fourth quarter, compared to $2.3 million for the same period last year.

Adjusted net income a non-GAAP metric (see tables below) for the 2022 fourth quarter was $1.5 million, or $0.032 per diluted share, compared to an adjusted net income of $0.1 million, or $0.003 per diluted share, for the same period last year. For the 2022 full year, adjusted net income was a loss of $(0.1 million), or $(0.002) per share, compared to an adjusted net loss of $(1.5 million), or $(0.038) per share, for the same period last year.

About Innovative Food Holdings, Inc.
At IVFH, we help make meals special. We provide access to foods that are hard to find, have a compelling story, or are on the forefront of food trends. Our gourmet foods marketplace connects the world’s best artisan food makers with top professional chefs and passionate home chefs nationwide. We curate the assortment, experience, and tech enabled tools that help our professional and home chefs create unforgettable experiences for their guests and families. IVFH’s owned online retail brands include www.igourmet.com, www.plantbelly.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.

Investor and Media Contact:
Andrew M. Berger
Managing Director
SM Berger & Company, Inc.
(216) 464-6400
andrew@smberger.com


Innovative Food Holdings, Inc.
Consolidated Balance Sheets
(unaudited)

   December 31,   December 31, 
  2022  2021 
         
ASSETS        
Current assets        
Cash and cash equivalents $4,899,398  $6,122,671 
Accounts receivable, net  4,969,395   3,256,764 
Inventory, net  3,053,852   3,109,984 
Other current assets  289,432   314,107 
Total current assets  13,212,077   12,803,526 
         
Property and equipment, net  7,921,561   8,186,227 
Investments  -   286,725 
Right of use assets, operating leases, net  152,425   232,381 
Right of use assets, finance leases, net  570,323   669,039 
Other amortizable intangible assets, net  30,994   72,218 
Tradenames and other unamortizable intangible assets  1,532,822   1,532,822 
Total assets $23,420,202  $23,782,938 
         
LIABILITIES AND STOCKHOLDERS' EQUITY        
Current liabilities        
Accounts payable and accrued liabilities $6,853,253  $5,702,905 
Accrued interest, current portion  18,104   29,349 
Deferred revenue  1,558,155   1,631,406 
Line of Credit  2,014,333   2,000,000 
Notes payable - current portion, net of discount  5,711,800   412,961 
Lease liability - operating leases, current  64,987   74,088 
Lease liability - finance leases, current  191,977   159,823 
Contingent liability - current portion  -   187,000 
Total current liabilities  16,412,609   10,197,532 
         
Lease liability - operating leases, non-current  87,438   158,293 
Lease liability - finance leases, non-current  333,092   499,240 
Contingent liability - long-term  -   108,600 
Note payable - long term portion, net  -   5,409,172 
Total liabilities  16,833,139   16,372,837 
         
         
Commitments & Contingencies        
         
Stockholders' equity        
Common stock: $0.0001 par value; 500,000,000 shares authorized; 50,927,237 and 48,879,331 shares issued, and 48,089,657 and 46,041,751 shares outstanding at December 31, 2022 and 2021, respectively  5,088   4,885 
Additional paid-in capital  42,189,471   41,662,710 
Treasury stock: 2,623,171 shares outstanding at December 31, 2022 and 2021  (1,141,370)  (1,141,370)
Accumulated deficit  (34,466,126)  (33,116,124)
Total stockholders' equity  6,587,063   7,410,101 
         
Total liabilities and stockholders' equity $23,420,202  $23,782,938 


Innovative Food Holdings, Inc.
Consolidated Statements of Operations
(unaudited)

  For the  For the 
  Year Ended  Year Ended 
   December 31,   December 31, 
  2022  2021 
         
Revenue $80,102,964  $62,212,148 
Cost of goods sold  61,414,765   45,261,401 
Gross margin  18,688,199   16,950,747 
         
Selling, general and administrative expenses  19,725,593   20,540,229 
Total operating expenses  19,725,593   20,540,229 
         
Operating loss  (1,037,394)  (3,589,482)
         
Other income (expense:)        
Impairment of investment  (286,725)  (209,850)
Other income  294,000   - 
Gain on forgiveness of debt  -   3,425,015 
Gain on contingent liability  295,600   - 
Loss on extinguishment of debt  (40,556)  - 
Other leasing income  11,226   10,840 
Interest expense, net  (586,153)  (352,854)
Total other income (expense)  (312,608)  2,873,151 
         
Net loss before taxes  (1,350,002)  (716,331)
         
Income tax expense  -   - 
         
Net loss $(1,350,002) $(716,331)
         
Net loss per share - basic $(0.03) $(0.02)
         
Net loss per share - diluted $(0.03) $(0.02)
         
Weighted average shares outstanding - basic  47,129,511   39,448,041 
         
Weighted average shares outstanding - diluted  47,129,511   39,448,041 


Innovative Food Holdings, Inc.
Consolidated Statements of Cash Flows

  For the  For the 
  Year Ended  Year Ended 
  December 31,  December 31, 
  2022  2021 
Cash flows from operating activities:        
Net loss $(1,350,002) $(716,331)
Adjustments to reconcile net loss to net cash used in operating activities:        
Gain on forgiveness of debt  -   (3,425,015)
Gain on contingent liabilities  (295,600)  - 
Impairment of investment  286,725   209,850 
Depreciation and amortization  562,072   526,854 
Amortization of right of use asset  66,740   102,715 
Amortization of prepaid loan fees  115,760   12,525 
Stock based compensation  576,964   668,251 
Loss on extinguishment of debt  40,556   - 
Provision (recoveries) for doubtful accounts  (1,915)  31,756 
         
Changes in assets and liabilities:        
Accounts receivable, net  (1,710,716)  (930,595)
Inventory and other current assets, net  80,807   604,890 
Accounts payable and accrued liabilities  1,169,514   650,516 
Deferred revenue  (73,251)  (1,286,270)
Contingent liabilities  -   (8,000)
Operating lease liability  (66,740)  (102,715)
Net cash used in operating activities  (599,086)  (3,661,569)
         
Cash flows from investing activities:        
Acquisition of property and equipment  (114,966)  (24,511)
Net cash used in investing activities  (114,966)  (24,511)
         
Cash flows from financing activities:        
Payment of offering costs for stock previously issued  (50,000)  - 
Proceeds from sale of common stock, net of costs      3,580,372 
Proceeds from Payroll Protection Plan Loan  -   1,748,414 
Principal payments on debt  (172,422)  (433,087)
Principal payments financing leases  (176,494)  (146,963)
Cost of debt financing  (110,305)  - 
Net cash provided by (used in) financing activities  (509,221)  4,748,736 
         
Increase (decrease) in cash and cash equivalents  (1,223,273)  1,062,656 
         
Cash and cash equivalents at beginning of period  6,122,671   5,060,015 
         
Cash and cash equivalents at end of period $4,899,398  $6,122,671 
         
Supplemental disclosure of cash flow information:        
         
Cash paid during the period for:        
         
Interest $461,563  $298,481 
         
Taxes $-  $- 
         
Non-cash investing and financing activities:        
(Decrease) Increase in right to use assets & liabilities $(13,216) $88,359 
Finance lease for fixed assets $42,500  $21,885 
Debt to Fifth Third Bank paid directly by Maple Mark Bank $7,686,481  $- 
Reclassification of accounts receivable to other assets $-  $22,380 


 Three Months Ended
(unaudited)		 Twelve Months Ended
(unaudited)
 December 31,
2022		 December 31,
2021		 December 31,
2022		 December 31,
2021
Adjusted Net Income and EPS (1)       
Revenue$23,876,715 $20,849,332  $80,102,964  $62,212,148 
Net Income (Loss) 1,094,415  1,698,038   (1,350,002)  (716,331)
Amortization of intangible assets (2) 10,331  302   41,224   8,912 
One-time charges (3) 327,281  -   919,799   209,850 
One-time gain -  (1,759,197)  (294,000)  (1,665,818)
Stock related expenses (4) 56,746  192,119   576,964   668,251 
Adjusted Net Income (Loss)

$1,488,773 $131,262  $(106,015) $(1,495,136)
Weighted Avg. Shares Outstanding Diluted (5) 47,129,511  39,448,041   47,129,511   39,448,041 
Adjusted Fully Diluted EPS$0.032 $0.003  $(0.002) $(0.038)
        


(1)Adjusted Net Income 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)Charges that are non-recurring or one-time items include: inventory adjustment expenses of $316,666, $86,866 in digital marketing fees associated with a settlement of digital marketing fees to a service provider, and $188,986 in expenses associated with the MapleMark loan transaction.
(4)Includes stock and options-based compensation and expenses
(5)Full Year GAAP weighted fully diluted share count

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Source: Innovative Food Holdings

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