Second Quarter Revenue Increased 16% to $13.9 Million
Specialty Foodservice Revenue Up 17% to $11.7 Million
e-commerce Revenue Up Over 29% to $1.8 Million

BONITA SPRINGS, Fla., Aug. 14, 2019 (GLOBE NEWSWIRE) -- Innovative Food Holdings, Inc. (OTCQB: IVFH), (“IVFH” or “the Company”) an interconnected platform of specialty food companies that provides chefs and consumers direct access to the highest quality unique specialty food products across the U.S., today reported its financial results for the second quarter and first half of 2019.

Sam Klepfish, CEO of Innovative Food Holdings stated, “IVFH experienced strong growth across both our specialty foodservice and e-commerce channels during the 2019 second quarter, reflecting increasing customer awareness of our product offerings, as well as successfully leveraging the resources of our interconnected platform.  Our continued emphasis on providing customers with new, exciting, and unique products that reflect the latest food trends helped drive strong second quarter results.”

“We continue to make strategic investments to support current and future growth opportunities across our business and during the second quarter we added a new e-commerce focused corporate VP of Operations and expanded our accounting capabilities and staff.  In addition, we recently announced a new independent board member and signed an agreement to purchase a 200,000 square-foot fulfillment facility that adds significant growth capacity and will support both our national e-commerce and northeast specialty foodservice distribution businesses.

“IVFH’s focus on unique specialty foods supports growing consumer preferences to smaller, high-quality, digitally-driven suppliers.  As a result, we are experiencing higher levels of demand and interest from current and potential customers.  I am excited by our growth opportunities for the remainder of 2019 and beyond,” concluded. Mr. Klepfish. 

IVFH’s revenue increased to $13.9 million during the three months ended June 30, 2019, compared to $12.0 million for the three months ended June 30, 2018.  The primary drivers of the 16% increase in second quarter revenue was due to strong growth in the Company’s specialty foodservice and e-commerce businesses.  For the first half of fiscal 2019, total revenue increased 17% to $26.8 million, compared to $22.9 million last year. 

Deferred revenue which includes revenues associated with the Company’s e-commerce subscription services, including both Mouth and iGourmet, increased to $281,000 at June 30, 2019, compared to $26,000 at June 30, 2018. For the 2019 second quarter, IVFH had over 21,650 active and unique e-commerce customers, which is an increase of approximately 17% from the same period last year.

The following table sets forth IVFH’s revenue by business category for the three and six months ended June 30, 2019 and June 30, 2018:

 Three Months Ended
 June 30,
2019
 % of Net Sales
 June 30,
2018

 % of Net Sales
 %  Change
Specialty Foodservice.$  11,670,000 84% $  10,013,000 83% 17%
E-commerce 1,784,000 13%  1,384,000 12% 29%
National Brand Management   471,000 3%    592,000 5% -20%
Total IVFH$  13,925,000 100% $  11,989,000 100% 16%


 Six Months Ended
 June 30,
2019
 % of Net Sales
 June 30,
2018

 % of Net Sales
 % Change
Specialty Foodservice$  21,968,000 82% $ 19,258,000 84% 14%
E-commerce 3,880,000 15%  2,435,000 11% 59%
National Brand Management   937,000 3%    1,213,000 5% -23%
Total IVFH$ 26,785,000 100% $  22,906,000 100% 17%

For the 2019 second quarter, selling and administrative (“SG&A”) expense, as a percentage of net revenue, was 28.9% compared to 25.6% in the prior year quarter.  SG&A expenses increased as a result of investments the Company continues to make to support growth including investments associated with procurement, accounting, and systems, as well as the expansion of fulfillment capabilities within the iGourmet warehouse for both e-commerce and specialty foodservice.  For the 2019 first six months, SG&A expense, as a percentage of net revenue, was 29.1% compared to 26.5% for 2018.

For the 2019 second quarter, net income was $22,000, or $0.00 per diluted share, compared to $330,000, or $0.01 per diluted share in the prior year’s second quarter. For the 2019 first six months, net income was $185,000, or $0.01 per diluted share, compared to $779,000, or $0.02 per diluted share for the 2018 first six months.

Cash EBITDA for the 2019 second quarter was $467,000, compared to $785,000 in the prior year quarter.  For the 2019 first six months, Cash EBITDA was $1.1 million, compared to $1.5 million for the same period a year ago.

IVFH’s balance sheet remains strong with $3.2 million of cash and cash equivalents, and the full availability of over $2 million in commercial credit including the Company’s $2 million commercial credit line which was extended through August 2021.

About Innovative Food Holdings, Inc.
Innovative Food Holdings, Inc. is an interconnected platform of small, specialty food companies serving business and consumer customers.  The platform offers efficient, cost effective, and transparent sourcing of over 7,000 specialty food products including proprietary branded products. Sales channels on the platform include specialty foodservice channels and data driven DTC e-commerce channels including leading specialty food direct-to-consumer e-commerce websites www.igourmet.com and www.mouth.com as well as a strong specialty food omnichannel offering via www.amazon.com, www.jet.com and www.walmart.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,” “anticipate,” “believe,” “intend,” “plan,” “might,” “potentially” or “expect.” The Company does not intend to update these forward-looking statements. The content of the websites referenced above are not incorporated herein. 

Company Contact:Investor and Media Contact:
Ronit WallersteinAndrew M. Berger
Investor RelationsManaging Director
Innovative Foods Holdings, Inc.SM Berger & Company, Inc.
(718) 645-1755(216) 464-6400
rwallerstein@IVFH.comandrew@smberger.com


Innovative Food Holdings, Inc.
Consolidated Balance Sheets

  June 30,  December 31, 
  2019  2018 
  (unaudited)    
ASSETS        
Current assets        
Cash and cash equivalents $3,158,853  $4,759,817 
Accounts receivable, net  3,018,700   3,039,756 
Inventory  2,217,174   2,301,377 
Other current assets  197,583   144,301 
Total current assets  8,592,310   10,245,251 
         
Property and equipment, net  2,235,416   2,456,610 
Investments  395,025   339,525 
Right of use assets, operating leases, net  268,638   - 
Right of use assets, finance leases, net  122,619   - 
Other amortizable intangible assets, net  1,702,301   2,158,498 
Goodwill and other unamortizable intangible assets  2,183,065   2,183,065 
Total assets $15,499,374  $17,382,949 
         
LIABILITIES AND STOCKHOLDERS' EQUITY        
Current liabilities        
Accounts payable and accrued liabilities $2,043,215  $3,689,868 
Accrued interest  18,378   16,402 
Deferred revenue  280,928   559,315 
Notes payable - current portion  901,728   928,857 
Lease liability - operating leases, current  197,014   - 
Lease liability - finance leases, current  20,605   - 
Contingent liability - current portion  519,108   472,876 
Total current liabilities  3,980,976   5,667,318 
         
Lease liability - operating leases, non-current  71,624   - 
Lease liability - finance leases, non-current  97,959   - 
Contingent liability - long-term  247,600   357,600 
Note payable - long term portion  464,047   1,196,245 
Total liabilities  4,862,206   7,221,163 
         
Commitment and contingencies (see note 16)  -   - 
         
Stockholders' equity        
         
Common stock: $0.0001 par value; 500,000,000 shares authorized; 36,427,354 and 36,296,218 shares issued, and 33,839,774 and 33,708,638 shares outstanding at June 30, 2019 and December 31, 2018, respectively  3,640   3,627 
Additional paid-in capital  36,421,970   36,132,065 
Treasury stock: 2,373,171 shares outstanding at June 30, 2019 and December 31, 2018  (1,016,370)  (1,016,370)
Accumulated deficit  (24,772,072)  (24,957,536)
Total stockholders' equity  10,637,168   10,161,786 
         
Total liabilities and stockholders' equity $15,499,374  $17,382,949 

Innovative Food Holdings, Inc.
Consolidated Statements of Operations

  For the Three  For the Three  For the Six  For the Six 
  Months Ended  Months Ended  Months Ended  Months Ended 
  June 30,  June 30,  June 30,  June 30, 
  2019  2018  2019  2018 
                 
                 
Revenue $13,925,451  $11,989,003  $26,784,666  $22,905,547 
Cost of goods sold  9,862,369   8,409,485   18,743,749   15,846,916 
Gross margin  4,063,082   3,579,518   8,040,917   7,058,631 
                 
Selling, general and administrative expenses  4,017,829   3,070,979   7,806,826   6,074,796 
Total operating expenses  4,017,829   3,070,979   7,806,826   6,074,796 
                 
Operating income  45,253   508,539   234,091   983,835 
                 
Other (income) expense:                
Gain on settlement of contingent liability  -   (11,000)  -   (11,000)
Interest expense, net  23,149   34,296   48,627   61,044 
Total other expense  23,149   23,296   48,627   50,044 
                 
Net income before taxes  22,104   485,243   185,464   933,791 
                 
Income tax expense  -   155,000   -   155,000 
                 
Net income $22,104  $330,243  $185,464  $778,791 
                 
Net income per share - basic $0.001  $0.010  $0.005  $0.023 
                 
Net income per share - diluted $0.001  $0.010  $0.005  $0.023 
                 
Weighted average shares outstanding - basic  33,947,817   34,007,519   34,001,294   33,966,497 
                 
Weighted average shares outstanding - diluted  33,947,817   34,007,519   34,001,294   33,966,497 



Innovative Food Holdings, Inc.
Consolidated Statements of Cash Flows  

  For the Six  For the Six 
  Months Ended  Months Ended 
  June 30,  June 30, 
  2019  2018 
         
         
Cash flows from operating activities:        
Net income $185,464  $778,791 
Adjustments to reconcile net income to net cash (used in) provided by operating activities:        
Depreciation and amortization  631,026   500,027 
Amortization of right-of-use asset  88,644   - 
Stock based compensation  196,252   23,408 
Gain on settlement of contingent liability  -   (11,000)
Provision for (recovery of) doubtful accounts  (2,779)  - 
         
Changes in assets and liabilities:        
Accounts receivable  (6,665)  (428,976)
Inventory and other current assets, net  30,921   (526,246)
Accounts payable and accrued liabilities  (1,551,011)  22,865 
Deferred revenue  (278,387)  25,565 
Contingent liabilities  (63,768)  - 
Operating lease liability  (88,644)  - 
Net cash (used in) provided by operating activities  (858,947)  384,434 
         
Cash flows from investing activities:        
Cash related to the igourmet asset acquisition  -   (2,409,437)
Cash paid for website development  (23,500)  - 
Acquisition of property and equipment  (85,829)  (99,804)
Investment in food related company  (25,000)  (50,000)
Net cash used in investing activities  (134,329)  (2,559,241)
         
Cash flows from financing activities:        
Purchase of stock options from officers, directors, and employees  -   (167,000)
Cash received from exercise of warrants  -    35,000 
Cash paid in settlement of contingent liability - Oasis acquisition  -   (189,000)
Borrowings on term loan  -   1,500,000 
Purchase of treasury stock  -   (24,057)
Principal payments on debt  (594,877)  (545,674)
Principal payments capital leases  (12,811)  (3,993)
Net cash (used in) provided by financing activities  (607,688)  605,276 
         
Decrease in cash and cash equivalents  (1,600,964)  (1,569,531)
         
Cash and cash equivalents at beginning of period  4,759,817   5,133,435 
         
Cash and cash equivalents at end of period $3,158,853  $3,563,904 
         
Supplemental disclosure of cash flow information:        
         
Cash paid during the period for:        
Interest $49,337  $65,114 
         
Taxes $-  $155,000 
         
Non-cash investing and financing activities:        
Issuance of 131,136 shares of common stock previously accrued $93,666  $- 
Right to use assets and liabilities - operating, upon adoption of ASU 2016-02 $388,581  $- 
Return of equipment and reduction in amount due under equipment financing loan $33,075  $- 
Increase in right of use assets and liabilities $18,701  $- 
Investment in food related company $30,500  $- 



 Three Months Ended  Six Months Ended
 June 30,
2019
 June 30,
2018
 June 30,
2019
 June 30, 2018
Adjusted Net Income and EPS       
Revenue$  13,925,451 $  11,989,003 $  26,784,666 $  22,905,547
Net Income   22,104  330,243  185,464  778,791
Amortization of intangible assets (1)   250,567  216,157  479,697  405,303
Stock related expenses (2)   96,108    14,621    196,252    23,408
Adjusted Net Income

 
$  368,779 $  561,021 $  861,413 $  1,207,502
Weighted Avg. Shares Outstanding Diluted (3)

 
 33,947,817  34,007,519  34,001,294  33,966,497
Adjusted Fully Diluted EPS$  0.011 $  0.016 $  0.025 $  0.036
        
 Three Months Ended Six Months Ended
 June 30,
2019
 June 30,
2018
 June 30,
2019
 June 30, 2018
Cash EBITDA       
Net Income$  22,104 $  330,243 $  185,464 $  778,791
Interest expense, taxes & other income 23,149  178,296  48,627  205,044
Depreciation & amortization 325,821  261,614  631,026  500,027
Stock related expenses (2)   96,108    14,621    196,252    23,408
Cash EBITDA$  467,182 $  784,774 $  1,061,369 $  1,507,270
  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