Bonita Springs / FL. (ifh) Innovative Food Holdings, a leading end-to-end DTC e-commerce platform and direct-to-chef platform that provides unique specialty foods through e-commerce offerings and multichannel partnerships, 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 percent to an annual record of USD 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.
Bennett continued, «I am pleased to report we produced our second consecutive profitable quarter as net income increased significantly from USD 9,746 for the 2022 third quarter to USD 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 Bennett.
Revenues in the 2022 fourth quarter increased 14.5 percent to a fourth-quarter record of USD 23.9 million, compared to USD 20.9 million for the three months ended December 31, 2021. Fourth-quarter revenue benefitted from a 53.2 percent 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 percent to USD 5.4 million from USD 8.6 million for the same period last year. For the 2022 full year, total revenue was a record USD 80.1 million, a 28.8 percent increase from USD 62.2 million for the same period last year.
For the 2022 fourth quarter, gross margin was 25.1 percent, compared to 29.1 percent 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 percent, compared to 27.2 percent last year.
For the 2022 fourth quarter, selling, general, and administrative (SG+A) expenses were USD 4.7 million, or 19.7 percent of revenue, compared to USD 6.0 million, or 28.9 percent of revenue for the same period last year. The USD 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 USD 19.7 million, or 24.6 percent of revenue compared to USD 20.5 million, or 33.0 percent of revenue in the prior year period.
For the 2022 fourth quarter, operating income as a percentage of sales improved to 5.4 percent from 0.2 percent for the same period last year. This improvement was a result of higher sales and a USD 1.3 million year-over-year reduction in SG+A expenses.
The Company recorded GAAP net income for the 2022 fourth quarter of USD 1.1 million, or USD 0.02 per diluted share, compared to a GAAP net income of USD 1.7 million, or USD 0.04 per share, in the prior year’s fourth quarter, which included a USD 1.8 million pre-tax gain on the forgiveness of debt. For the 2022 full year, the Company reported a GAAP net loss of USD (1.4 million), or USD (0.03) per share, compared to a GAAP net loss of USD (0.7 million), or USD (0.02) per share, for the 2021 full year.
The Company generated USD 2.2 million in cash from operating activities for the 2022 fourth quarter, compared to USD 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 USD 1.5 million, or USD 0.032 per diluted share, compared to an adjusted net income of USD 0.1 million, or USD 0.003 per diluted share, for the same period last year. For the 2022 full year, adjusted net income was a loss of USD (0.1 million), or USD (0.002) per share, compared to an adjusted net loss of USD (1.5 million), or USD (0.038) per share, for the same period last year.