GlobeNewswire Inc | May 25, 2021 11:20AM EDT

May 25, 2021

Direct-to-Consumer E-commerce Revenue Increased 73% Year-over-Year to a First Quarter Record Strong Year-over-Year Subscription Growth of 103%Foodservice Trends Accelerating as Foodservice Revenue Up Quarter-Over-Quarter for the Third Consecutive Quarter

BONITA SPRINGS, Fla., May 25, 2021 (GLOBE NEWSWIRE) -- Innovative Food Holdings, Inc. (OTCQB: IVFH) (IVFH or the Company), a leading direct-to-consumer e-commerce platform with complete multi-channel, specialty food and grocery capabilities for both consumers and professional chefs today reported its financial results for the first quarter of 2021.

We continue to experience strong e-commerce, direct-to-consumer growth as our digital assets, including igourmet.com and mouth.com provide unique, specialty foods, groceries and gifts to consumers across the country. As a result, e-commerce sales increased 73% for the first quarter led by strong subscription revenue growth of 103%, compared to the prior year period. In addition, we continue to focus on expanding our partnership opportunities with leading influencers and brands to create distinctive food experiences for our consumers. We are working to introduce new subscription-based products, increase the number of partnership opportunities, and leverage our leading e-commerce, direct-to-consumer platform throughout 2021, stated Sam Klepfish, CEO of Innovative Food Holdings.

Continued improvements in our foodservice business are encouraging, and while foodservice revenue continues to be down year-over-year, we have experienced three quarters of sequential improvements as restaurants, hotels, airlines, and other foodservice customers reopen for business and communities reopen their local economies. Positive trends have continued, and assuming overall economic trends continue, we expect to see higher year-over-year and quarter-over-quarter foodservice revenue in the second quarter.

Improving profitability is an important focus for IVFHs management team during 2021 and I am pleased with the progress we made during the first quarter. First quarter gross margin increased 370 basis points to 27.1% as a result of a more profitable mix of revenue and the contribution of higher margin e-commerce revenue. In addition, we are now focused on leveraging our fixed operating costs and increasing efficiencies, after investing heavily in our platform over the past two years to support our digital transformation and growth opportunities. I am excited with the direction we are headed, and I continue to believe our digitally enabled, plug-and-play platform supports meaningful opportunities to drive growth in 2021 and beyond, concluded Mr. Klepfish.

Financial ResultsE-commerce revenue for the 2021 first quarter increased by 73%, driven by the Companys ability to increase conversion rates and sales. Deferred revenue, which includes e-commerce orders associated with the Companys subscription services, including both Mouth and igourmet, and representing a pipeline of future revenues, increased by over 216% to $1.1 million at March 31, 2021, compared to $0.4 million at March 31, 2020.

Revenues in the 2021 first quarter declined to $12.2 million compared to $13.3 million in the 2020 first quarter as specialty foodservice revenues declined 31% to $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 73% to $5.0 million in the 2021 first quarter, compared to $2.9 million in e-commerce revenues in the 2020 first quarter.

The following table sets forth IVFHs revenue by business category for the three months ended March 31, 2021, and March 31, 2020 (unaudited):

Three Months Ended March 31, % of March 31, % of % 2021 Net 2020 Net Change Sales SalesSpecialty $ 6,828,000 56 % $ 9,913,000 74 % -31 %FoodserviceE-Commerce 4,980,000 41 % 2,878,000 22 % 73 %National Brand 226,000 2 % 251,000 2 % -10 %ManagementLogistics $ 147,000 1 % $ 264,000 2 % -44 %Total IVFH $ 12,181,000 100 % $ 13,306,000 100 % -8 %

For the 2021 first quarter, selling and administrative (SG&A) expenses were $4.9 million, compared to $4.6 million for the same period last year. The year-over-year increase, which included costs associated with the COVID-19 pandemic, was primarily driven by higher payroll, marketing and advertising costs, and other operating expenses.

The Company reported a net loss for the 2021 first quarter of $(1.8 million), or $(0.05) per share, compared to a net loss of $(3.3 million), or $(0.09) per share, in the prior years first quarter. The net loss for the 2021 and 2020 first quarter periods included non-cash impairment charges of $0.2 million, and $1.7 million, respectively. Adjusted net income for the 2021 first quarter was a loss of $(1.5 million), or $(0.041) per share, compared to an adjusted net loss of $(1.1 million), or $(0.031) per share, for the same period last year.

Cash EBITDA, a non-GAAP metric (see tables below), for the 2021 first quarter was a loss of $(1.3 million), compared to Cash EBITDA loss of $(0.9 million) in the prior year first quarter.

About Innovative Food Holdings, Inc. Innovative Food Holdings (Ticker: IVFH): has built a leading D2C e-commerce platform with complete multi-channel, specialty food and grocery capabilities for both consumers and professional chefs. Wholly owned D2C brands on the platform include www.igourmet.com and www.mouth.com.

Additional information is available at www.ivfh.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 Companys 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, will, anticipate, believe, intend, plan, might, potentially targeting or expect. Additional factors that could also cause actual results to differ materially relate to the global COVID-19 crisis and other risk factors described in our public filings. The Company does not intend to update these forward-looking statements. The content of the websites referenced above are not incorporated herein.

Innovative Food Holdings, Inc.Consolidated Balance Sheets(unaudited)

March 31, December 31, 2021 2020 (unaudited) ASSETS Current assets Cash and cash equivalents $ 3,086,086 $ 5,060,015 Accounts receivable, net 1,844,332 2,380,305 Inventory 2,832,164 3,719,786 Other current assets 516,009 286,815 Total current assets 8,278,591 11,446,921 Property and equipment, net 8,454,849 8,550,401 Investments 286,725 496,575 Right ofuse assets, operating 241,622 246,737 leases, netRight ofuse assets, finance leases, 743,591 776,439 netOther amortizable intangible assets, 97,510 100,380 netGoodwill and other unamortizable 1,532,822 1,532,822 intangible assetsTotal assets $ 19,635,710 $ 23,150,275 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable and accrued $ 3,530,973 $ 5,098,523 liabilitiesAccrued interest, current portion 17,438 28,873 Deferred revenue 1,133,411 2,917,676 Line of Credit 2,000,000 2,000,000 Notes payable - current portion, net 1,942,021 1,741,571 of discountLease liability - operating leases, 86,284 87,375 currentLease liability - finance leases, 145,820 146,004 currentContingent liability - current 187,000 187,000 portionTotal current liabilities 9,042,947 12,207,022 Accrued interest, long term portion 17,099 - Lease liability - operating leases, 155,338 159,362 non-currentLease liability - finance leases, 603,253 638,137 non-currentContingent liability - long-term 108,600 116,600 Note payable - long term portion, net 7,516,744 6,151,345 Total liabilities 17,443,981 19,272,466 Commitments & Contingencies - - Stockholders' equity Common stock: $0.0001 par value;500,000,000 shares authorized;38,495,314and 38,209,060 shares 3,846 3,817 issued, and 35,657,734 and 35,371,480shares outstandingat March 31, 2021and December 31, 2020, respectivelyAdditional paid-in capital 37,572,917 37,415,155 Treasury stock: 2,623,171 and2,623,171 shares outstanding at March (1,141,370 ) (1,141,370 )31, 2021and December 31, 2020,respectively.Accumulated deficit (34,243,664 ) (32,399,793 )Total stockholders' equity 2,191,729 3,877,809 Total liabilities and stockholders' $ 19,635,710 $ 23,150,275 equity

Innovative Food Holdings, Inc.Consolidated Statements of Operations(unaudited)

For the Three For the Three Months Ended Months Ended March 31, March 31, 2021 2020 Revenue $ 12,180,899 $ 13,305,920 Cost of goods sold 8,878,914 10,192,864 Gross margin 3,301,985 3,113,056 Selling, general and administrative 4,850,828 4,612,761 expensesImpairment of intangible assets - 1,698,952 Total operating expenses 4,850,828 6,311,713 Operating loss (1,548,843 ) (3,198,657 ) Other income (expense): Impairment of investment (209,850 ) - Other leasing income 5,140 10,879 Interest expense, net (90,318 ) (66,420 )Total other (expense) (295,028 ) (55,541 ) Net loss before taxes (1,843,871 ) (3,254,198 ) Provision for income tax - - Net loss $ (1,843,871 ) $ (3,254,198 ) Net loss per share - basic $ (0.05 ) $ (0.09 ) Net loss per share - diluted $ (0.05 ) $ (0.09 ) Weighted average shares outstanding - 35,872,143 34,626,275 basic Weighted average shares outstanding - 35,872,143 34,626,275 diluted

Innovative Food Holdings, Inc.Consolidated Statements of Cash Flows(unaudited)

For the Three For the Three Months Ended Months Ended March 31, March 31, 2021 2020 Cash flows from operating activities: Net loss $ (1,843,871 ) $ (3,254,198 )Adjustments to reconcile net loss to net cash used in operating activities:Impairment of intangible assets - 1,698,952 Impairment of investment 209,850 - Depreciation and amortization 135,854 324,565 Amortization of right-of-use asset 22,929 49,949 Amortization of prepaid loan fees 3,088 3,123 Stock based compensation 157,791 66,041 Provision for doubtful accounts 2,721 223,335 Changes in operating assets and liabilities:Accounts receivable, net 533,252 1,226,457 Inventory and other current assets 658,428 (650,741 )Accounts payable and accrued (1,561,858 ) (177,379 )liabilitiesDeferred revenue (1,784,265 ) (141,320 )Contingent liabilities (8,000 ) (12,000 )Operating lease liability (22,929 ) (49,949 )Net cash used in operating activities (3,497,010 ) (693,165 ) Cash flows from investing activities: Acquisition of property and equipment (4,612 ) (285,599 )Net cash used in investing activities (4,612 ) (285,599 ) Cash flows from financing activities: Proceeds from note payable - 150,786 Proceeds from line of credit - 2,000,000 Proceeds from Paycheck Protection 1,669,929 - Program (PPP) LoanPrincipal payments on debt (107,168 ) (57,775 )Principal payments financing leases (35,068 ) (8,754 )Net cash provided by financing 1,527,693 2,084,257 activities (Decrease) increase in cash and cash (1,973,929 ) 1,105,493 equivalents Cash and cash equivalents at beginning 5,060,015 3,966,050 of period Cash and cash equivalents at end of $ 3,086,086 $ 5,071,543 period Supplemental disclosure of cash flow information: Cash paid during the period for: Interest $ 83,275 $ 59,373 Taxes $ - $ - Non-cash investing and financing activities:Increase in right of use assets & $ 17,814 $ 214,930 liabilitiesInvestment in food related company $ - $ 15,000 Capital lease for purchase of fixed $ - $ 152,548 assets

Three Months Ended (unaudited) March 31, March 31, 2021 2020Adjusted Net Income and EPS^(4) Revenue $ 12,180,899 $ 13,305,920 Net Income (1,843,871 ) (3,254,198 )Amortization of intangible assets^ (1) 2,870 210,032 One-time charges 209,850 1,917,891 Stock related expenses ^(^2^) 157,791 66,041 Adjusted Net Income $ (1,473,360 ) $ (1,060,234 )

Weighted Avg. Shares Outstanding Diluted ^(^3^) 35,872,143 34,626,275

Adjusted Fully Diluted EPS $ (0.041 ) $ (0.031 ) Three Months Ended (unaudited) March 31, March 31, 2021 2020Cash EBITDA^(4) Net Income $ (1,843,871 ) $ (3,254,198 )Interest expense, taxes & Other Income 85,178 55,541 Depreciation & amortization 135,854 324,565 One-time charges 209,850 1,917,891 Stock related expenses ^(^2^) 157,791 66,041 Cash EBITDA $ (1,255,198 ) $ (890,160 )

(1)Includes non-cash amortization charges related to assets acquired(2)Includes stock and options-based compensation and expenses(3)Full Year GAAP weighted fully diluted share count(4) Non-GAAP measures (not to be relied upon in substitution for GAAP measures)

Company Contact: Investor and Media Contact:Ronit Wallerstein Andrew M. BergerInvestor Relations Managing DirectorInnovative Food Holdings, Inc. SM Berger & Company, Inc.(718) 645-1755 (216) 464-6400rwallerstein@IVFH.com andrew@smberger.com