Innovative Food Holdings, Inc. Announces Restructuring of Home Gourmet E-Commerce Business, and Divestiture of Other Non-Core Businesses

BONITA SPRINGS, Fla., Jan. 12, 2024 (GLOBE NEWSWIRE) -- Innovative Food Holdings, Inc. (OTCQB: IVFH) (“IVFH”, the “Company”, “we”, or “our”), a national seller of gourmet specialty foods to Professional Chefs, today announced that with the unanimous support of its board, the Company is restructuring its Home Gourmet e-commerce business. IVFH also announced the completion of its previously announced sale of two entities: Oasis Sales Corp and Organic Food Brokers, LLC (together dba “Grow Brand Management”). Lastly, the company also announced that it has agreed to sell its entity Haley Food Group, Inc.

As discussed during its earnings call for the third quarter of 2023, IVFH is in a stabilization phase of its business, reducing its focus and expenditures on unprofitable and non-core businesses, in order to drive new growth on its profitable Professional Chefs business. The restructuring of the Home Gourmet business entails a reduction in workforce of approximately 20 of our employees, the halt of all paid marketing associated with this business, and a 50% reduction in assortment. The Company expects the financial impact of these actions to result in a decrease of approximately $6 million in annualized revenue, and an increase in our annualized profit by about $650,000, with a one-time restructuring cost of between $100,000-$200,000.

The sale of the Grow Brand Management business will result in a reduction of about $1 million in annualized revenue, with no material impact to profits. The consideration for the Grow transaction was $225,000, inclusive of its cash balance, or $75,000 net of its cash balance. Lastly, the eventual sale of the Haley Food Group will be for the consideration of approximately 21,000 shares of IVFH stock to be returned to the Company, and will result in a reduction of approximately $175,000 in revenue, and an increase of about $75,000 in profit. The transaction is expected to close in the next 60 days.

Bill Bennett, Chief Executive Officer of IVFH, stated, “As mentioned during our third quarter earnings call, IVFH has lost in excess of $12 million over the five years that we have owned the Home Gourmet e-commerce businesses, masking the profit of our strong Professional Chef businesses. Restructuring a business is never an easy process, and we understand the personal toll it takes. However, the actions announced today are an important step toward building a healthier, more resilient company that will allow for employee career growth, company profit growth, and an improved offering for our customers. With this strategic shift, we can begin to put our resources and focus on the areas of the business that will drive significant sales and profit growth for the Company. Between our Artisan Specialty Foods distribution business unit, and our Food Innovations drop ship business unit, I continue to be excited by the significant new customer and channel opportunities we are pursuing with the additional focus and resources we are unlocking for the team. We continue to move forward with the sale of our Bonita Springs, FL building, and we continue to market our Mountain Top, PA building for sale or lease, with the goal of eliminating all long-term debt for the Company. We also continue to search for the right internal and external investment and acquisition opportunities that can be immediately accretive, and unlock growth synergies with our existing businesses.”