SOURCE: Innovative Food Holdings, Inc.

March 31, 2014 17:59 ET

Innovative Food Holdings, Inc. Reports Fourth Quarter and Fiscal Year 2013 Financial Results

Net Sales Increased 26% and Adjusted Net Income Increased 72% for FY 2013

BONITA SPRINGS, FL--(Marketwired - Mar 31, 2014) - Innovative Food Holdings (OTCQB: IVFH), a leading nationwide provider of specialty foods, healthcare foods, gluten free foods, and direct from source artisanal foods, to the professional foodservice market, today announced financial results for the fourth quarter and year ended December 31, 2013. The Company will host an investor conference call at 5:00 pm EDT today to discuss 2013 results.

Full Year 2013 Highlights Compared with Full Year 2012:

  • Revenue increased 26% to $23.5 million from $18.6 million
  • Operating Cash flow grew 68% to $1.35 million as compared to $806,000 in 2012
  • Operating Income grew approximately 65% to approximately $965,000 vs approximately $586,000
  • Adjusted Net Income (Net Income without non-recurring/non-ongoing/stock related gains/losses and amortization expenses "Adjusted Net Income") grew 72% to approximately $1.8 million from approximately $1 million in 2012
  • Adjusted EPS (EPS without non-recurring/non-ongoing/stock related gains/losses and amortization expenses "Adjusted EPS") grew approximately 60% to $0.28 per share in 2013 from $0.18 per share in 2012
  • Cash EBITDA (EBITDA without non-recurring gains/losses, equity related gains/losses "Cash EBITDA") grew 65 % to over $2 million year, from over $1.2 million in 2012

Fourth Quarter 2013 Financial and Operational Highlights:

  • Q4 2013 revenue of $6.4 million, up 9% compared to $5.8 million for Q4 2012
  • December 2013 represented 53rd consecutive month of increased month-over-month revenue
  • Adjusted Net Income grew 21% to approximately $515,000 vs approximately $423,000 in the 4th quarter of 2013
  • Adjusted EPS grew over 13% to approximately $.08 per share for Q4 2013 vs. $.07 per share in Q4 of 2012
  • Cash EBITDA grew over 17% to approximately $557,000 for the fourth quarter of 2013 vs. approximately $476,000 in Q4 2012
  • Stronger balance sheet and cash position; the Company generated more than $527,000 in operating cash flow in the fourth quarter and ended the year with over $2 million in cash 

Sam Klepfish, CEO of Innovative Food Holdings, commented, "At the beginning of 2013, we planned to achieve several key goals: increased revenues, higher profits, and continuing to solidify our financial strength. We succeeded with all three of these targets in fiscal 2013, delivering another record year. Revenues increased 26%, as we secured new program customers, increased sales to our current end user chefs and expanded the number of chefs with which we have relationships. Additionally, we made strategic progress in our direct-to-consumer business, 'For the Gourmet.' Leveraging existing infrastructure, our focus in the online specialty food retail and direct to consumer space, is to expand our core business model into the consumer space and to access the sizable consumer market with a low cost shared risk, incremental approach.

Mr Klepfish added, "Our Food Hatch accelerator program, which is designed to provide shareholders additional upside through a portfolio of equity positions in early stage food related companies, continues to provide access to new food ideas, serving as a valuable incubator for promising seed and early stage food related and foodtech related companies. In addition, we believe that the potential appreciation in the value of the current and future holdings in the Food Hatch portfolio can offer additional shareholder upside and create additional incremental positive capital markets opportunities for Innovative Food Holdings shareholders in the future."

Mr Klepfish noted, "In addition, we believe that the accomplishment of several complex, but highly important, strategic initiatives taken in 2013 have strengthened Innovative Food Holdings as a company and has strongly solidified our unique and growing position in the specialty food market.

These accomplishments included:

  • Despite an extremely tight and difficult small business lending environment we were able to establish a commercial banking relationship with one of the top 20 banks in the United States which included a $2.0 million credit line extended to the Company. The availability of credit, and the credibility of the banking relationship combined with our stronger balance sheet, have led to significantly expanded strategic and business development opportunities.

  • Additional beneficial note restructurings including subordination of noteholders which placed the company into the position to enter into the commercial banking relationship and we believe, has further enhanced the company's profile for institutional investors.

  • The company purchased and moved into new headquarters further cutting costs and expanding warehouse capabilities with room for expansion. The building had a purchase price of $770,000 and had a current estimated replacement value of $1.8 million.

  • The Company paid down in full, the loan associated with the purchase of Artisan Specialty Foods.

Mr. Klepfish concluded, "During the year we grew sales, cash flow and profits ending the year with over $2.0 million in cash. In addition to a number of key strategic initiatives targeted for 2014, our goal is to continue generating profitable sustainable growth and significant cash flows from operations, enter into new market segments, and expand market share through existing and new partners in order to fuel growth in 2014, and over the longer term."

Financial Results
Fourth quarter 2013 revenue was approximately $6.4 million, up approximately 9% as compared to $5.8 million in the fourth quarter of 2012. 

Fourth quarter Adjusted Net Income grew 21% to approximately $515,000 and 4th quarter Adjusted EPS was $.08 per share compared to $.07 per share in the fourth quarter of 2012, an increase of close to 14%. Cash EBITDA, increased approximately 17% to more than $557,000 for the fourth quarter of 2013 compared to approximately $476,000 in the fourth quarter last year.

Full year revenue increased 26% to $23.5 million compared to $18.6 million in the same period last year. The Company's financial results for a portion of 2012 did not include sales and profits associated with the Company's subsidiary, Artisan Specialty Foods, which was purchased by Innovative Food Holdings in May 2012.

Full year Adjusted EPS was $0.28 per share compared to $0.18 per share in 2012, an increase of over 50%. Cash EBITDA grew 65% to over $2 million vs. approximately $1.2 million in 2012.

Operating Cash flow increased 68% to $1.35 million and the Company ended 2013 with over $2 million in cash on the balance sheet.

Conference Call Information

  • Date and time: Monday, March 31, 2014 at 5:00 p.m. ET
  • Dial-in number: 1-877-941-8416 (domestic) or 1-480-629-9808 (international)
  • Call/Conference ID: 4676395
  • Replay number: Dial 1-877-870-5176 (domestic) or 1-858-384-5517 (international). Please use passcode 4676395 to access the replay. The replay will be available until April 7, 2014.
  • Webcast link: http://public.viavid.com/index.php?id=108475

About Innovative Food Holdings, Inc.
Innovative Food Holdings, is a leading nationwide provider of specialty foods, healthcare foods, gluten free foods, and direct from source artisanal foods, to the professional foodservice market. IVFH also markets those products directly to the consumer, through its website at www.forthegourmet.com. Many of Innovative Food Holdings' 7,000+ products are used on a daily basis by approximately 30,000 of some of the leading professional chefs across the United States.

Forward-Looking Statements
This release contains certain forward-looking statements and information relating to Innovative Food Holdings, Inc. (IVFH) (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 and in our public filings. 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

                         
                         
Adjusted EPS   2012     2013     2012     2013  
    FY     FY     q4 2012     q4 2013  
Net Income (loss)   2,030,494     (1,486,257 )   2,023,850     (1,085,565 )
Amortization of intangible assets (1)   75,323     183,880     39,323     45,969  
Amortization of discount on notes payable and accrued interest   925,829     2,322,909     857,366     984,975  
One time gain on extinguishment of debt   (3,797,001 )   -     (3,797,001 )   -  
(Gain) loss on change in fair value of derivatives   517,418     -     1,138,620     -  
Cost of warrant extension   842,100     -     -     -  
                         
                         
Stock based compensation   355,422     372,013     161,821     321,351  
Non-recurring expenses (note 3)   96,958     408,428     -     248,308  
Adjusted Net Income   1,046,543     1,800,973     423,979     515,038  
                         
Weighted average shares outstanding   5,968,434     6,500,506     5,772,745     6,949,666  
                         
Adjusted EPS   0.18     0.28     0.07     0.08  
                         
                         
                         
Cash EBITDA   2012     2013     2012     2013  
    FY     FY     q4 2012     q4 2013  
Net Income (loss)   2,030,494     (1,486,257 )   2,023,850     (1,085,565 )
Interest   131,475     129,167     33,935     18,990  
Taxes   -     20,052     -     3,052  
Depreciation & amortization   126,855     262,882     57,542     66,824  
Amortization of discounts on notes payable   925,833     2,322,909     857,340     984,975  
Gain on extinguishment of debt   (3,797,001 )   -     (3,797,001 )   -  
(Gain) loss on change in fair value of derivatives   517,418     -     1,138,620     -  
Cost of warrant extension   842,100     -     -     -  
Stock based compensation   355,422     372,013     161,821     321,351  
Non-recurring expenses (3)   96,958     408,428     -     248,308  
Cash EBITDA   1,229,554     2,029,194     476,107     557,935  
                         
     
(1)   Includes non-cash amortization charges mainly associated with the GAAP recording of the discount on certain notes
(2)   Includes stock and options based compensation
(3)   Included non-recurring charges related mainly to the following:
a)   The Artisan acquisition and integration
b)   The subordination of existing notes and restructuring of certain terms of notes
c)   The prepayment of the Artisan acquisition loan
d)   Entering into a credit line with Fifth Third Bank
e)   Entering into a mortgage with Fifth Third Bank
f)   The move into new facility and the warehouse build out of the new facility
     

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