Total Revenue up 38% to $12.1 Million; Direct-to-Chef Revenue up 15% to $8.0 Million
BONITA SPRINGS, FL–(Marketwired – Nov 16, 2015) – Innovative Food Holdings, Inc. (OTCQB:IVFH), an industry-leading specialty food platform, reported financial results for the third quarter ended September 30, 2015.
Third Quarter 2015 Financial Summary & Highlights
- Total revenue increased 38% to $12.1 million compared to the 3rd quarter of 2014
- Direct-to-chef revenue increased 15% to $8.0 million compared to the 3rd quarter of 2014
- Cash EBITDA for the direct-to-chef business increased 22% to $0.8 million compared to the 3rdquarter of 2014
- Increased investments in prospecting, brand building, IT and awareness at The Fresh Diet targeted towards future platform growth in 2016 and beyond
- Announced the planned spin-off of The Fresh Diet subsidiary to shareholders
“We continue to execute in our direct-to-chef business, driving 15% revenue growth for the quarter,” said Justin Wiernasz, president of Innovative Food Holdings. “In fact, this is now the sixth consecutive quarter of double-digit revenue growth in direct-to-chef, demonstrating the ongoing demand for our specialty food ingredients and the leadership of our direct-from-source platform.”
Sam Klepfish, CEO of Innovative Food Holdings, commented: “As recently announced, we plan to spin-off The Fresh Diet as a separate public company in 2016, which will enable us to focus on our strong, cash flow generating, direct-to-chef business. We believe that two distinct, segment-focused companies will more effectively drive growth in shareholder value and command a more appropriate valuation from the capital markets.”
“As we look ahead to 2016,” continued Klepfish, “we expect to benefit from The Fresh Diet through our remaining ownership stake. We also plan to continue our long track record of execution in our direct-to-chef business as we believe consumer preferences continue to shift toward better quality, direct-from-source foods, which in-turn drives demand from chefs and restaurants across all genres. We believe these trends support our robust positive outlook for Innovative Foods as we focus on continuing to leverage and grow our leading specialty food platform, which reaches thousands of chefs in foodservice establishments throughout the United States.”
Third Quarter 2015 Financial Results
Total revenue in the third quarter of 2015 increased 38% to $12.1 million compared to $8.8 million in the same year-ago quarter. Revenue from the direct-to-chef specialty food business increased 15% to $8.0 million compared to $6.9 million in the year-ago quarter.
Selling, general and administrative (SG&A) expenses increased to $5.8 million in the third quarter compared to $2.7 million in the year ago quarter, due to expenses associated with an increase in non-cash SG&A expenses, a full quarter of SG&A expenses from The Fresh Diet (which was acquired in mid-August 2014), as well as higher marketing, prospecting, IT, API and brand awareness related spend at The Fresh Diet. The Fresh Diet ramped up its awareness and brand branding spending during the quarter targeted towards driving customer and sales growth for the historically busy dieting season during the first quarter of 2016.
Cash EBITDA (EBITDA excluding equity-based compensation) for the direct-to-chef business increased 22% to $0.8 million compared to $0.7 million in the third quarter of 2014.
Adjusted consolidated net income (net income excluding certain amortization charges, GAAP acquisition charges, and equity-based compensation) for the direct-to-chef business increased 24% to $0.8 million or $0.03 per share in the third quarter of 2015, compared to $0.6 million or $0.07 per share in the same year-ago quarter. Consolidated net loss for the third quarter of 2015 was $3.2 million or $(0.13) per share compared to a loss of $0.6 million or $(0.08) per share in the same year-ago quarter.
Consolidated cash EBITDA for the third quarter was $(1.4 million) compared to $0.2 million in the same year-ago quarter. The decline was driven by owning The Fresh Diet for a full quarter and higher expenses at The Fresh diet as The Fresh Diet made key investments in marketing and awareness, infrastructure, platform expansion, API and IT, all targeted towards optimizing and positioning The Fresh Diet and the overall direct-to-consumer platform for anticipated growth in 2016.
Innovative Food Holdings will hold a conference call today, November 16, 2015, at 5:15 p.m. Eastern time to discuss its third quarter 2015 results.
Date: Monday, November 16, 2015
Time: 5:15 p.m. Eastern time (2:15 p.m. Pacific time)
Toll-free dial-in number: 1-888-455-2296
International dial-in number: 1-719-325-2376
Conference ID: 4651574
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 athttp://public.viavid.com/index.php?id=117303 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 8:00 p.m. Eastern time on the same day through November 23, 2015.
Toll-free replay number: 1-877-870-5176
International replay number: 1-858-384-5517
Replay ID: 4651574
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’ 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-managed 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 visitwww.TheFreshDiet.com.
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.
|Direct to Chef Business|
|Direct -To Chef Adjusted Operating Income Adjusted EPS andCash EBITDA|
|Sales and Gross Profits||Q3-14||Q3-15|
|Innovative Food Holdings Consolidated Sales||8,757,934||12,129,702|
|Direct -to Chef Sales||6,986,694||8,025,772|
|Direct to Chef Net Income||352,633||(816,134||)|
|Amortization of intangible assets (1)||75,787||223,844|
|Amortization of discount on NP (2)||115,765||198,364|
|Equity Related Expenses (3)||88,022||1,180,628|
|Direct-to-Chef Adjusted Net Income||632,207||786,702|
|Weighted Average Shares Outstanding||9,374,203||22,896,211|
|Direct-to-Chef Adjusted EPS||$||0.07||$||0.03|
|Net Income (Loss)||352,633||(816,134||)|
|Equity related expenses (3)||88,022||1,180,628|
|Depreciation & amortization||95,484||223,844|
|Amortization of discounts (2)||115,765||198,364|
|Direct-to-Chef Cash EBITDA||667,171||811,294|
|(1) Includes non cash amortization charges related to assets acquired|
|(2) Includes non cash amortization charges mainly associted with the GAAP recording of the discount on certain notes|
|(3) Includes stock and options based compensation|