BONITA SPRINGS, Fla.,
Nov. 19, 2014 /PRNewswire/ --
Innovative Food Holdings, Inc. (OTCQB: IVFH), a leading nationwide
specialty foods provider and the nationwide leader in the freshly
prepared, direct to consumer daily gourmet meal sector, today
announced financial results for the third quarter and nine months
ended September 30, 2014. The
quarter's results include the impact of the Company's August 2014 acquisition of the nationwide leader
in the direct to consumer, daily gourmet meal sector, The Fresh
Diet, Inc. ("The Fresh Diet"). The Company will hold a conference
call today at 11:00 a.m. ET.
Third Quarter Financial Highlights:
- Total Revenue of $8.7 million, an
increase of approximately 50%.
- Revenue associated with operating business prior to the
acquisition of The Fresh Diet, ("Specialty foodservice") was
$6.9 million, a 20% increase compared
to the same period in 2013.
- Specialty foodservice operating income of $480,965 compared to $395,796 in 2013.
- Specialty foodservice Cash EBITDA (EBITDA excluding non-cash
charges) increased 44% year over year to $667,171.
On August 15, 2014 the Company
acquired The Fresh Diet , a transaction that combines Innovative
Food Holdings' Specialty foodservice segment platform, which
includes a chef-driven, industry leading, sourcing, logistics and
customer service platform, with America's No. 1 fresh gourmet daily
meal delivery company, which operates the industry leading direct
to consumer specialty meal platform. The Fresh Diet's platform
includes highly efficient preparation and logistics infrastructure,
as well as a comprehensive network of same-day and next-day last
mile food delivery capabilities to over 500 cities across
the United States.
The combination of Innovative Food Holdings' specialty food
platform with the direct to consumer last-mile capabilities of The
Fresh Diet platform has created the first fully, vertically
integrated, source-to-table specialty food company.
The Fresh Diet is being operated as a wholly-owned subsidiary of
Innovative Food Holdings, and as previously announced, the
transaction is expected to be accretive to the Company's earnings
beginning in fiscal year 2015. The current focus at The Fresh Diet
continues to be on streamlining and optimizing the platform,
including key focuses on both optimizing costing and optimizing
spending, and a particular focus on building profitable long term
revenue channels. At the same time Fresh Diet is aggressively
pursuing new and promising expansion opportunities to further
enhance the value of the platform and to profitably focus on a
re-launch of certain segments of the business.
The Fresh Diet third quarter and YTD business highlights
include:
- Revamped and relaunched the online customer acquisition process
in October, resulting in significant improvements in new customer
acquisition
- Continued to focus on driver cost efficiencies on a per unit
basis. Variable kitchen labor cost per unit decreased 7%, raw
materials and packaging costs per unit decreased 13% year over
year
- Continued to optimize the delivery platform resulting in a
delivery cost per unit decrease of 10% per unit year over year
- Platform wide delivery accuracy rate of 99.7%
- Launched Vegetarian and Gluten-Free product lines
Sam Klepfish, CEO of Innovative
Food Holdings, commented, "We utilized the power of our Specialty
foodservice platform to drive solid revenue growth and enhanced
profitability, as we benefited from the operating leverage
intrinsic in our business model. We continued to show both top line
revenue growth and bottom line growth in the Specialty foodservice
segment as we focused on the execution of our business model and
strategic goals. We believe that the purchase of The Fresh Diet
provides a unique opportunity to add a valuable, strategic, and
operational asset to Innovative Food Holdings, including the
ability to add an efficient, low-cost, last mile, direct to
consumer platform to our business which is highly synergistic to
our core specialty food offering. We further believe that
this platform is highly scalable, with the ability to handle
significant growth without extensive infrastructure investments and
that the Fresh Diet platform substantially fills gaps within both
the direct-to-consumer and foodservice food distribution system in
the United States, giving us a
comprehensive, efficient, source-to-table offering unmatched in the
industry."
Mr. Klepfish continued, "The Fresh Diet management team
continues to leverage their years of food service expertise in
systems and processes gained as senior executives at Fortune 100
global food companies. Under the leadership of Chief Executive
Officer Raj Rawal, former CIO of Burger King and of Budget Avis,
and Asif Sayed, COO of The Fresh
Diet, former Senior Director, Global Operations for Burger King,
who was responsible for ensuring the profitable, efficient and
customer-focused operations for 8,750 restaurants in 29 countries
across the Americas, the team has made significant progress in
streamlining and improving key operational and quality metrics and
continues to focus on optimization and integration of further
operational efficiencies in the platform.
"We entered into The Fresh Diet acquisition with high
expectations for the market opportunity. Based on further analysis
of the expanding addressable market and feedback from industry
executives in this space, we now believe that The Fresh Diet
platform has growth and new market opportunities that significantly
exceed our initial expectations.
"In that regard, we believe that The Fresh Diet is uniquely
positioned to take advantage of several key consumer trends such as
eating healthy, source to table, same day and next day delivery,
customized food nutrition and specialty daily meals, the growth in
e-grocery, and specialty food ecommerce amongst several other fast
growing markets. Finally, the barriers to entry to create a viable
platform in this market remain significant and we believe that our
market presence, combined with the power of a scaled platform
uniquely positions us to potentially capture several key organic
growth opportunities and select focused synergistic acquisition
opportunities."
Mr. Klepfish concluded, "We look forward to executing in both
our Specialty foodservice segment and in our Direct to Consumer
segment to capture key identified market opportunities in the
rapidly growing specialty foodservice and consumer markets."
Third Quarter 2014 Financial Results
Third quarter 2014 total revenue was approximately $8.7 million, up 50% as compared to $5.8 million in the third quarter of 2013.
Innovative Food Holdings' Specialty foodservice revenue grew 20% to
$6.9 million, generating operating
income associated with the Specialty foodservice segment, of
$480,965, an increase of 22% compared
to 2013. Cash EBITDA for the Specialty foodservice segment
increased 44% year over year to $667,171 and net income for the Specialty
foodservice segment increased to $352,633 compared to a net loss of $337,758 in the same period in 2013.
The Fresh Diet acquisition resulted in a loss for the quarter
ended September 30, 2013. Costs
associated with The Fresh Diet include several accounting and other
charges, including over $280,000 in
non-cash GAAP related charges associated with accounting for the
acquisition of The Fresh Diet. This charge had the effect of
lowering revenues by over $280,000
without any corresponding decrease in costs. In addition, as
expected, The Fresh Diet reported lower revenues due to both timing
of revenues related to the short time period Innovative Food
Holdings owned The Fresh Diet as well as the focus of The Fresh
Diet on long term profitable revenues, both of which factors
contributed to the loss.
As a result, Innovative Food Holdings reported a GAAP loss of
$653,624 for the quarter ended
September 30, 2014. GAAP Basic and
Fully Diluted EPS in the third quarter of 2014 was $(0.07) per share compared to $(0.05) per share in the third quarter of 2013.
Cash EBITDA was $239,232 for the
third quarter of 2014 compared to $464,168 in the third quarter last year.
The Fresh Diet Financial information
The Company purchased The Fresh Diet on August 15, 2014 and as a result the third quarter
revenues include the contribution of approximately 45 days of The
Fresh Diet's revenues. Revenues attributed to The Fresh Diet in
this quarter were $1.77 million. In
addition, results reflect the focus on profitable revenues
described above. Furthermore, there were certain accounting
adjustments required due to the acquisition of The Fresh Diet in
accordance with GAAP.
The Fresh Diet had the following key operational highlights for
the third quarter ended September 30,
2014:
- Revenue per unit increased 5% year over year.
- Raw materials cost per unit decreased 13% year over year:
Management believes that The Fresh Diet can further improve on this
metric, as it realizes increased sourcing synergies through
Innovative Food Holdings.
- Variable kitchen labor cost per unit decreased 7% year over
year, while delivery cost per unit decreased 10% year over
year.
- Platform wide delivery accuracy rate of 99.7%
Year-to-Date 2014 Financial Results
For the nine months ended September 30,
2014 total revenue was $20.7
million, an increase of approximately 27% as compared to
$16.4 million in the first nine
months of 2013. Innovative Food Holdings' revenues for the
Specialty foodservice segment grew to $18.9
million, an increase of approximately 16% compared to the
prior period. Cash EBITDA for the Specialty foodservice segment
increased 61% year over year to $2.0
million from 1.2 million a year ago.
Total net loss for the first nine months of 2014 was
$37,777 compared to a net loss of
$400,392 in the same period of 2013.
GAAP basic EPS for the first nine months of 2014 was $0.00 per share compared to $(0.06) per share in the year ago period. Cash
EBITDA increased to $1.3 million for
the first nine months of 2014 compared to $1.2 million in the first nine months of last
year.
Operating Cash flow for the nine months ended September 30, 2014 increased 28% to $1.05 million as compared to approximately
$827,000 in 2013.
The Company ended the third quarter with over $4.0 million in cash and with the full
availability of its $1 million line
of credit with Fifth Third Bank.
Conference call information:
- Date and time: Wednesday, November 19,
2014 at 11:00 a.m. ET
- Dial-in number: 1-888-503-8169 (domestic) or 1-719-325-2429
(international)
- Call/Conference ID: 3070665
- Replay number: Dial 1-877-870-5176 (domestic) or 1-858-384-5517
(international). Please use passcode 3070665 to access the replay.
The replay will be available until November
24, 2014.
- Webcast link: http://public.viavid.com/index.php?id=111930
About Innovative Food Holdings
Innovative Food Holdings' subsidiaries distribute the highest
quality, specialty foods to foodservice businesses nationwide and
offers freshly prepared meals and ingredients to consumers across
the country through a proprietary specialty food platform.
In the foodservice space, IVFH's industry leading specialty food
foodservice distribution programs offer over 7,000 specialty food,
direct from source, organic, artisanal and gluten free products,
which are used on a daily basis by approximately 40,000 of the
leading professional chefs across the entire United States.
In the direct to consumer channel, The Fresh Diet, Inc.
(www.thefreshdiet.com) is the nationwide leader in the freshly
prepared gourmet meal sector, using the finest specialty
ingredients. The meals are delivered directly to consumers in 12
states, 44 metropolitan areas and 573 cities across the country
using The Fresh Diet® platform.
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 third parties was supplied to the Company by third parties
and we accept no responsibility for its accuracy.
Contact:
|
|
Management
Contact
|
Investor Relations
Contact
|
Sam
Klepfish
|
James
Carbonara
|
CEO
|
Regional Vice
President, Hayden IR
|
(239)
449-3235
|
(646)
755-7412
|
sklepfish@innovativefoodholdings.com
|
james@haydenir.com
|
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Three Months
Ended
|
Three Months
Ended
|
|
Nine Months
Ended
|
Nine Months
Ended
|
|
|
September 30,
2014
|
September 30,
2013
|
|
September 30,
2014
|
September 30,
2013
|
|
Sales
|
8,757,934
|
5,840,283
|
|
20,760,427
|
16,400,258
|
|
COGS
|
6,577,167
|
4,161,765
|
|
14,771,298
|
11,660,860
|
|
SGA
|
2,673,806
|
1,282,722
|
|
5,345,053
|
3,691,679
|
|
Operating
Income
|
(493,039)
|
395,796
|
|
644,076
|
1,047,719
|
|
EPS Share
Basic
|
$
(0.070)
|
$
(0.052)
|
|
$ (0.005)
|
$
(0.063)
|
|
|
|
|
|
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-
|
Income
(Loss)Attributed to Innovative Food Holdings
|
(653,624)
|
(337,758)
|
|
(37,777)
|
(400,392)
|
|
Interest,
net
|
30,722
|
33,285
|
|
79,244
|
110,177
|
|
Taxes
|
-
|
-
|
|
-
|
-
|
|
Depreciation &
amortization of assets
|
370,347
|
68,372
|
|
503,650
|
196,058
|
|
Amortization of
Discount on Deferred Revenues
|
288,000
|
|
|
|
|
|
Amortization of
discount on notes
|
115,765
|
700,269
|
|
608,541
|
1,337,934
|
EBITDA
|
151,210
|
464,168
|
|
1,153,658
|
1,243,777
|
Add: non-cash
compensation
|
88,022
|
-
|
|
160,855
|
35,662
|
Cash
EBITDA
|
$
239,232
|
$ 464,168
|
|
$ 1,314,513
|
$ 1,279,439
|
|
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SOURCE Innovative Food Holdings, Inc.