Innovative Food Holdings: reports Q4 and FY-2020 results

Bonita Springs / FL. (ifh) Innovative Food Holdings, an interconnected data driven platform of specialty food companies that provides chefs and consumers direct access to the highest quality unique specialty food products across the U.S., 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 Klepfish.

Financial Results

E-commerce revenue for full year 2020 increased by over 100 percent, 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 percent to USD 2.9 million at December 31, 2020, compared to USD 0.5 million at December 31, 2019. Revenues in the 2020 fourth quarter declined to USD 15.1 million compared to USD 17.7 million in the 2019 fourth quarter as specialty foodservice revenues declined 43 percent to USD 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 percent to USD 7.9 million in the 2020 fourth quarter, compared to USD 5.3 million in e-commerce revenues in the 2019 fourth quarter.

2020 full year total revenue was USD 51.7 million compared to USD 57.9 million in 2019. The decline in full year 2020 revenue was driven by an approximately 40 percent 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 percent.

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 percent 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 …

	2020-12-31		Share Net Sales	2019-12-31		Share Net Sales	Change
Specialty Foodservice	USD	6,793,000	44%	USD	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	USD	15,138,000	100%	USD	17,653,000	100%	-14%

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Year Ended Months Ended …

	2020-12-31		Share Net Sales	2019-12-31		Share Net Sales	Change
Specialty Foodservice	USD	27,544,000	53%	USD	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	USD	51,676,000	100%	USD	57,903,000	100%	-11%

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For the 2020 fourth quarter, selling and administrative (SG+A) expenses were USD 5.6 million, compared to USD 4.9 million for the same period last year. For full year 2020, SG+A expenses were USD 19.5 million, compared to USD 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 USD (1.1 million), or USD (0.03) per share, compared to a net income of USD 195,000, or USD 0.01 per diluted share, in the prior year’s fourth quarter. For 2020, the Company reported a net loss of USD (7.7 million), or USD (0.22) per share, compared to net income of USD 223,000, or USD 0.01 per diluted share for 2019. The 2020 net loss included a non-cash USD 1.7 million impairment charge recorded during the 2020 first quarter and other non-cash charges of USD 1.5 million. The Company generated USD 1.8 million in cash from operating activities for the 2020 fourth quarter, compared to USD 2.4 million for the same period last year.

Adjusted net income for the 2020 fourth quarter was a loss of USD (1.0 million), or USD (0.028) per share, compared to adjusted net income of USD 527,000, or USD 0.015 per diluted share, for the same period last year. For 2020, adjusted net income was a loss of USD (5.0 million), or USD (0.144) per share, compared to adjusted net income of USD 1.5 million, or USD 0.045 per diluted share last year.

Cash Ebitda, a non-GAAP metric, for the 2020 fourth quarter was a USD (0.7 million), compared to Cash Ebitda of USD 0.7 million in the prior year fourth quarter. For 2020, Cash Ebitda was USD (4.2 million), compared to Cash Ebitda of USD 2.0 million for the same period a year ago.