SOURCE: Innovative Food Holdings, Inc.

Innovative Food Holdings, Inc.

August 12, 2015 08:30 ET

Innovative Food Holdings Reports Second Quarter 2015 Results

Total Revenue up 94% to $12.5 Million; Direct-to-Chef Revenue up 18% to $7.6 Million

BONITA SPRINGS, FL--(Marketwired - Aug 12, 2015) - Innovative Food Holdings, Inc. (OTCQB: IVFH), an industry-leading specialty food platform, reported financial results for the second quarter ended June 30, 2015. 

Second Quarter 2015 Financial Highlights

  • Total revenue increased 94% to $12.5 million on a year-over-year basis
  • Direct-to-Chef revenue increased 18% to $7.6 million on a year-over-year basis
  • Direct-to-Consumer revenue associated with The Fresh Diet increased 6% to $4.9 million sequentially
  • Cash EBITDA was $18,713 compared to $(468,312) in the first quarter of 2015

Second Quarter 2015 Fresh Diet Highlights

  • Completed creative concept design for new brand positioning and messaging campaign; launching in phases beginning September 2015
  • Created and rolled out new seasonal menu with 48 new meal selections
  • Approximately 50% first time renewal rates for new customers; an increase of over 40% compared to 2nd Quarter of 2014
  • Completed new state-of-the-art Miami culinary center -- increases capacity by over 300%
  • Delivered approximately 800,000 freshly prepared meals and snacks to customers nationwide

Management Commentary
"Following a strong start to 2015, our second quarter was highlighted by the second consecutive quarter of 18% sales growth in our Direct-to-Chef business as well as sequential gross margin improvement in the Direct-to-Consumer business," said Sam Klepfish, CEO of Innovative Food Holdings.

"The Direct-to-Consumer business continues to make progress as The Fresh Diet continued its transformation into a data-driven e-commerce business, and we believe The Fresh Diet has strong opportunities for exponential growth. In addition, we continue to add technological and operational capabilities to the overall direct-to-consumer platform, including the development of a direct-to-consumer API, with key goals of on-boarding additional partners and offerings to the platform in 2015. Furthermore, it is important to note that gross margin improvements have the additional benefit of further enhancing the value-add and cost profile that the platform offers to potential brands and partners.

"Finally, we achieved positive cash EBITDA in the second quarter, which is ahead of our own internal expectations."

Second Quarter 2015 Financial Results
Total revenue in the second quarter of 2015 increased 94% to $12.5 million compared to $6.4 million in the same year-ago quarter. The increase was primarily due to revenue from The Fresh Diet, which was acquired on August 15, 2014 and contributed approximately $4.9 million of revenue during the quarter. On a sequential basis, revenue in this segment was up 6%. Revenue from the Direct-to-Chef specialty food business increased 18% to $7.6 million compared to the year-ago quarter.

Gross margin in the second quarter of 2015 was 30.0% compared to 30.8% in the year-ago quarter. Sequentially, gross margin increased due to improved operational and sourcing efficiencies in the Direct-to-Consumer business.

The first quarter of 2015 included certain GAAP accounting adjustments associated with the acquisition of The Fresh Diet, which had the direct effect of lowering The Fresh Diet revenue, gross margins and profit for that period.

Selling, general and administrative expenses increased to $5.6 million in the second quarter compared to $1.3 million in the year ago quarter primarily due to the acquisition of The Fresh Diet. 

Sequential Cash EBITDA (EBITDA without equity-based compensation) increased to $18,713 compared to $(468,312) in the first quarter of 2015.

Net loss was $2.0 million or $0.09 per share, compared to net income of $0.4 million or $0.05 per share in the year-ago quarter.

Adjusted net loss (net loss excluding certain amortization charges, GAAP acquisition charges, and equity based compensation) was $117,502 or $(0.01) per share, compared to a loss of $584,936 or $(0.03) per share in the first quarter of 2015.

Conference Call
Innovative Food Holdings will hold a conference call today, August 12, 2015, at 10:00 a.m. Eastern time to discuss its second quarter 2015 results.

Date: Wednesday, August 12, 2015
Time: 10:00 a.m. Eastern time (7:00 a.m. Pacific time)
Toll-free dial-in number: 1-888-438-5453
International dial-in number: 1-719-325-2495
Conference ID: 1703222

Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Liolios Group at 1-949-574-3860.

The conference call will be broadcast live and available for replay at http://public.viavid.com/index.php?id=115874 and via the investor relations section of the Innovative Food Holdings website at www.ivfh.com.

A replay of the conference call will be available after 1:00 p.m. Eastern time on the same day through August 19, 2015.

Toll-free replay number: 1-877-870-5176
International replay number: 1-858-384-5517
Replay ID: 1703222

About Innovative Food Holdings, Inc.
Innovative Food Holdings' (OTCQB: IVFH) industry-leading specialty food platforms in the foodservice and consumer markets provide chefs and consumers direct access to the highest quality specialty food products across the United States.

In the direct-to-chef foodservice market, Innovative Food Holdings' fully automated direct-to-chef platform offers efficient, cost effective, and transparent direct sourcing and distribution of over 7,000 specialty foods delivered daily to thousands of chefs nationwide.

In the direct-to-consumer channel, Innovative Food Holdings also owns the leading last mile specialty food direct-to-consumer platform in the United States, creating and delivering daily meals, freshly prepared by chefs at Company-owned culinary centers across the United States. The initial offering on the platform is The Fresh Diet, America's leading, freshly prepared nutritional and diet-based meal delivery program. The Fresh Diet is currently available across 44 metropolitan areas and 570 cities and towns across the United States. For detailed delivery information, and to review available menu options or learn more about how The Fresh Diet works, please visit www.TheFreshDiet.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. Information about other parties was supplied to the Company by other parties and we accept no responsibility for its accuracy.

             
             
    Three Months Ended  
    June 30,  
Sales and Gross Profits   Q1-15     Q2-15  
Sales     11,181,817       12,532,501  
Deferred Revenue Adjustment (1)     361,227       -  
Sales without GAAP adjustment     11,543,044       12,532,501  
Gross Profit without GAAP charge     3,357,739       3,761,699  
GAAP Gross Margin     27 %     30 %
Gross Margin without GAAP charge     29.1 %     30.0 %
                 
Adjusted Operating Income and EPS                
innovative Food Holdings Net Income     -2,015,110       (1,951,353 )
Amortization of intangible assets (2)     210,187       210,187  
Amortization of discount on NP (3)     99,157       99,157  
One time gain on adjustment of accrued liability                
Equity Related Expenses     759,603       1,524,507  
Deferred Revenue Adjustment     361,227       0  
Adjusted Net Income     (584,936 )     (117,502 )
                 
Weighted Average Shares Outstanding     20,447,523       22,785,765  
                 
Adjusted EPS   $ (0.03 )   $ (0.01 )
                 
                 
      Three Months Ended  
      June 30,  
Cash EBITDA     Q1-15       Q2-15  
Net Income (Loss)     -2,015,110       (1,951,353 )
Equity related expenses (4)     759,603       1,524,507  
Interest     32,163       33,005  
Taxes     0       -  
Depreciation & amortization     295,742       313,097  
Amortization of discounts     99,157       99,157  
Amrtization of Deferred Revenue     361,227       -  
Cash EBITDA     -467,218       18,413  
                 
                 
1 GAAP deferred revenue amortization charges associated with Fresh Diet Acqusition
2 Includes non cash amortization charges related to assets acquired
3 Includes non cash amortization charges mainly associted with the GAAP recording of the discount on certain notes
4 Includes stock and options based compensation
                 
                 

Contact Information

  • Company Contact:
    Ronit Wallerstein
    Investor Relations Analyst
    (718) 645-1755
    Email Contact

    Investor Relations:
    Liolios Group
    Cody Slach or Sean Mansouri
    (949) 574-3860
    Email Contact