Innovative Food Holdings' CEO Discusses Q4 2013 Results - Earnings Call Transcript

Mar.31.14 | About: Innovative Food (IVFH)

Innovative Food Holdings, Inc. (OTCQB:IVFH) Q4 2013 Earnings Conference Call March 31, 2014 5:00 PM ET


James Carbonara – Regional Vice President, Hayden IR

Samuel Klepfish – Chief Executive Officer

Justin Wiernasz – President


Ian Cassel – MicroCapClub

Neil Cataldi – Blueprint Capital Management, LLC

Denver J. Smith – 73114 Investments LLC


Greetings and welcome to Innovative Food Holding’s Fourth Quarter 2013 and 2013 fiscal year Earnings Conference Call. (Operator Instructions).

James Carbonara

Thank you, operator. Good afternoon everyone. With me on today’s call from Innovative Food Holdings is Sam Klepfish, CEO, and Justin Wiernasz, President. By now you should have access to Innovative Food Holdings fourth quarter 2013 earnings press release.

Throughout this conference call we will be presenting non-GAAP financial measures including, among others, historical and estimated EPS and Adjusted EPS (which is Non-GAAP EPS without non-recurring/non-ongoing/stock related gains/losses and amortization expenses), EBITDA and Cash EBITDA (which is Non-GAAP EBITDA without non-recurring gains/losses and stock related gains/losses ) and Adjusted Net Income (which is Non-GAAP net income without recurring gains/losses or stock related gains/losses and amortization expenses) as well as both historical and estimated modified pro forma net income and modified pro forma earnings per share. These measures are not calculated in accordance with GAAP and may be calculated differently than other companies’ similarly titled non-GAAP financial measures. Quantitative reconciliations of our non-GAAP financial measures to their most directly comparable GAAP financial measures appear in today’s press release.

Before we begin with the Company’s formal remarks I need to remind everyone that part of our discussion today will include forward-looking statements, including statements regarding Innovative Food Holdings estimated financial performance. Such forward-looking statements are not guarantees of future performance and therefore you should not put undue reliance on them. These statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from what the company expects. Some of these risks are mentioned in today’s release by Innovative Food Holdings; others are discussed in Innovative Food Holdings annual report on Form 10-K and quarterly reports on Form 10-Q which are available at

Of course we cannot guarantee that any of the plans discussed here will come to fruition, but the Company wanted the opportunity to share its plans and thoughts.

Today we are going to provide a business update and review Innovative Food Holdings fourth quarter and full year 2013 financial results in detail. Then we will open the call for questions.

With that I would like to turn the call over to Sam Klepfish. Sam?

Samuel Klepfish

Thank you James, and good afternoon everyone. First a quick word regarding this conference call. We believe we have made tremendous progress in the last year and as we continue to attract sophisticated and institutional investors, we feel it is now appropriate for us to conduct an investor call to discuss our results and our strategy, as well as to answer questions from our shareholders. I would like to welcome all of you to the call and I thank you for your interest in Innovative Food Holdings.

2013 was a year of significant growth, not only in terms of meaningful revenue and increased earnings, but also in terms of investments in building our platform for the long-term and in terms of strategic achievements for the company.

We believe with a high level of confidence, in the continued short and long term strength of the specialty food market in general. We are focused on taking advantage of expanding opportunities in this area, as well as opportunities in the rapidly changing food distribution environment, especially as it relates to artisanal and specialty foods.

As evidenced by our 2013 operational and strategic results, we believe that Innovative Foods is situated as a key player in the specialty and artisanal food space. We define the specialty food space as high quality, niche products, many time artisanal produced, which are filling the needs of the growing interest in the gourmeting of America- namely, the increased interest in: high quality foods, origin specific foods, sourceable, sustainable, traceable, allergen specific foods, and foods that are generally made of high quality and/or niche ingredients.

We believe that Innovative Food Holdings offers a highly unique, disruptive and differentiated offering, within the specialty food space. We believe this positioning will enable us to fill several growing, currently unmet needs, and creates a strategic advantage for Innovative Foods and our subsidiaries as the industry rapidly evolves. Our goal is to continue growing due to a number of factors, including driving organic revenue growth by executing on our business plan as it relates to our direct business lines and our subsidiaries, and through the increasing amount of joint venture and other opportunities that we are seeing,

The majority of Innovative Food Holdings revenues are currently derived from our relationships with broadline food service distributors, seeking to competitively access the fast growing specialty foods foodservice sector. Innovative Food Holdings provide these select Broadliners with a full service solution enabling them to offer a successful specialty food program with the products, customer service, chef expertise, procurement and logistics required for such a program. We believe that an increasing interest from Broadliners into expanding into the specialty foodservice market and into our specialty food solutions, offers growing opportunities for partnerships with Innovative Food Holdings.

In fact, we believe that our platform has positioned Innovative Food Holdings as the “go to” solution in the foodservice industry and our specialty food platform is currently white labeled to some of the largest food service companies in the United States. We are also working on additional partnerships with large food distributors to run their high end specialty food programs with us. We currently have a pipeline of these potential partners at varying levels of discussion and potential targeted launch dates. A key benefit to our partners is the turnkey nature of our platform. Once integrated with the backend IT of our various partners, the platform is essentially plug and play providing our partners the benefit of an industry leading specialty food solution without the expense, inventory needs, customer service, logistics, and procurement, typically associated with a successful high-quality specialty food program.

The Innovative Food Holdings platform is designed to be highly scalable, with low fixed and incremental costs, which are mainly customer service related, based on sales volume. As an example of its scalability, the IVFH platform managed the delivery of over 180,000 specialty food packages to customers nationwide during 2013 compared to 140,000 in 2012. As many as 2,600 packages were out for delivery to chefs in a single day last year.

As it relates to the food space in general, many analysts following the food distribution space, that we have spoken to believe the current food distribution system in the United States will likely be “disrupted” similar to the way many other industries have become “disrupted” via the web and through means of change. We share that opinion and believe that when the food distribution model in the USA gets “disrupted” over the next few years, our best in class platform will allow Innovative Food Holdings to be uniquely positioned in an evolving food distribution landscape. This should enable us to continue to create new partnerships in both the foodservice and foodservice related space as well as in other areas including retail related or direct to consumer. These partnerships would allow our partners to leverage our direct from source bottom line approach. We strongly believe that based on our current low fixed cost structure, top line revenue increases should have a multiplier effect and should drive increases in bottom line profitability.

I will now provide an update on our financial and operating results

Our net sales for the year ended December 31, 2013 increased approximately 26% to $23.5 million compared to $18.6 million in 2012. Organic sales growth, which is our 2013 sales growth without the additional benefit of Artisan Specialty foods, for the first 5 months of 2013, was 17% for the year.

Synergies realized through our Artisan subsidiary and improved procurement mix contributed towards our improved margins and we currently expect, if market conditions and our product revenue mix remain constant, that our cost of goods sold will likely remain stable or possibly improve.

The Company reported a GAAP operating income increase of 65% or approximately $965,000 in 2013 versus approximately $586,000 in 2012

Total operating expenses increased for FY 2013 by approximately 34% to $5.6 million from $4.2 million in 2012. The increase in operating expenses, much of which, occurred in the 4th quarter, is attributable mainly to increased costs associated with several strategic, non-recurring expenses as follows: First, the Artisan acquisition earn out – to further detail this expense, in 2012 we purchased Artisan for $1.5 million of which $1.2 million was paid at closing and the remaining $300,000 was to be paid as an earn out based upon the previous owner hitting certain financial targets going forward. The independent valuation company we retained at the time of the acquisition, valued the earn out at $131,000 based on their financial models, which included various factors relating to the likelihood of the earn out being paid. Since the previous owner of Artisan was in fact eligible for the entire earn out payments until this point, the company, as per GAAP accounting, included the expense of the excess over the independent valuation resulting in a charge to expenses of close to $200,000 which also included interest due to the previous owner of Artisan Specialty.

Second, the company purchased and moved into a new facility in Florida. Additional costs related to the purchase and move included mortgage, moving, and warehouse build out expenses.

Third, we restructured certain key terms of its existing notes with certain lenders, entered into a subordination agreement, entered into a credit line with Fifth Third bank and paid down the artisan note- these activities resulted in one time fees and expenses associated with these onetime non-recurring strategically important activities in 2013.

Also included in operating expenses were approximately $372,000 of non-cash costs associated with the stock related compensation expenses, which compares to approximately $355,000 in stock related compensation costs recorded in 2012

As it relates to net income, below the operating expense line, the company booked an interest charge of over $2.4 million of which approximately $129,000 was actual interest expense, with the remaining approximately $2.3 million a non-cash GAAP amortization charge associated with the expensing of a discount on the Company’s notes

Excluding the costs outlined above, namely, certain amortization charges, non-recurring charges and stock-based costs, we reported Adjusted Net Income of $1.8 million, an increase of over 70% compared to $1 million in Adjusted Net Income in 2012. Adjusted earnings per share grew to $0.28 in 2013 or close to 60% growth in 2013 compared to Adjusted EPS of $0.18 in 2012.

Adjusted EBITDA increased approximately 65% to slightly over $2 million for 2013 compared to approximately $1.24 million in 2012.

The company’s net sales for the fourth quarter increased approximately 9% to $6.4 million compared to approximately $5.8 million for the same period last year. The increase in net sales is attributable to year over year organic sales growth. We had some extreme cold weather related shipping challenges affecting revenue and earnings during the fourth quarter of 2013.

Cash EBITDA for Q4 increased approximately 17% to approximately $557,000 compared to approximately $476,000 in the fourth quarter of 2012.

Adjusted net income grew 21% to approximately $515,000 in the fourth quarter of 2013 compared to Adjusted Net Income of approximately$423,979 in the fourth quarter of 2012. Adjusted EPS grew to $.08 per share in Q4 this year, compared to adjusted EPS of $.07 in Q4 of last year.

As of December 31, 2013, the Company had current assets of approximately $3.6 million consisting of cash and cash equivalents of $2.0 million, net accounts receivable of $771,205 and inventory of $839,979, On December 17, 2013 we completed a financing transaction with Fifth Third Bank that provided a $1.0 million revolving credit facility and a $1.0 million term credit facility.

On the operational side I will ask Justin to speak about our core Foodservice business. Justin?

Justin Wiernasz

Thank you Sam and good afternoon everyone. Our core foodservice business remains strong as we continue to see demand for our product offerings resulting in sales growth as well as increased demand for additional partnership programs within the broadline foodservice space. By “programs” we mean the full solution offered to our partners which includes products, logistics, procurement, chef customer service, web marketing and additional customized features designed to offer a seamless best of class solution for our partners. We currently manage 2 programs, for large broadliners and we are in various stages of discussions with several other broadliners with respect to programs in the specialty food space. In regards to our largest program partner, we are extremely happy with the relationship and the continued growth of the program. In addition, the merger discussions by our largest partner has not affected our business relationship with them and it has been business as usual both in 2013 and YTD in 2014.

Interest from additional potential program partners remains strong. Our pipeline for potential partnerships in 2014 and 2015 is strong, in terms of both quantity and quality. We are pleased with the ongoing discussions and the level of interest among potential partners. Our focus remains on expanding our pipeline of potential partners.

As a result, we are hopeful that all or some of these discussions will result in our gaining additional program partners and we are pleased with the feedback we have been receiving from those discussions. As it relates to specific program launch dates and implementation, the implementation cycle for our program is a complex and lengthy one depending on the level of IT integration required and the number of systems we need to integrate. The entire process can take as long as 6-18 months, but once the system is integrated and test marketed, the path to meaningful sales has historically been fairly short.

We feel very comfortable that we offer a compelling value proposition for our partners. The response and feedback from potential partners has reinforced our perception of the value we offer in this rapidly changing industry.

With respect to our specific product categories of sales growth, we saw strength in several key areas in 2013 including the organic and gluten free space, as well as growth in several other lines of our specialty gourmet and artisanal products.

In addition, we also created and test launched our own exclusive brand of wild boar products. These products are wild boar trapped by expert trappers in the South Florida everglades (not too far from the IVFH Offices) that are then processed in a USDA facility and distributed by Artisan Specialty in Chicago. These wild Everglades boars, are specifically trapped in the sugar cane fields and orange groves in the Everglades to give the meat a specific and desirable sweet flavor. Although currently this program is in testing phase and has not contributed any material revenues, it is a good example of our ability to launch new, innovative, sustainable and exciting products. We continue to explore adding more sustainable and hard to source types of exciting new products which will be owned or exclusive to IVFH. We believe these types of new products are especially exciting as they have the potential for increased revenue opportunities as well as providing us with additional margin expansion opportunities.

Our Chicago-based Artisan Specialty Foods subsidiary performed well. Artisan is a leading supplier of niche gourmet food products, warehousing over 1,200 items and distributing products to over 450 customers, including some of the finest food service establishments in the Chicago area. Since acquiring Artisan in May 2012, we have leveraged Artisan's existing product lines to expand Innovative Food Holdings' capabilities and offerings to a variety of new customers, products and product areas.

Also, I’d like to touch a bit on the Haley Group. The Haley Group, which we purchased in November 2012, is a foodservice consulting and advisory firm that works closely with companies to access private label and manufacturers' label food service opportunities with the intent of helping them launch and commercialize new products in the broadline food service industry. We believe there is significant opportunity, demand and unmet needs in this space for this type of offering, including some new and exciting opportunities we have begun working on to leverage data to more efficiently connect manufacturers with potential demand.

Overall, as it relates to our core business, we are excited by the potential opportunities in the foodservice space and the foodservice business continues to be the key driver of revenues for IVFH. The strength and the scale of the foodservice business has enabled IVFH to pursue opportunities that are outside the foodservice space but are highly synergistic and symbiotic with the platform and the scale of our core offerings.

I will now ask Sam to say a few words about those additional opportunities being pursued by IVFH.

Samuel Klepfish

Thank you Justin. A quick word about the overall specialty food space and our view of the potential opportunities.

Overall, as I mentioned earlier, the food distribution system in the U.S. is one of the few industries that has yet to be disrupted. While there are certainly many approaches and a lot of capital flowing to disrupting, changing and creating a new and better system, we believe the change will come within and the most efficient and profitable way to pursue disruption is to work within the system, and evolve and change with the system. As a result, our approach has been to look at existing opportunities, as well as to position IVFH for both incremental and eventual larger changes, within the current distribution infrastructure. We believe these changes are occurring in both foodservice, retail and in the direct to consumer business.

A quick IVFH verbiage primer: When we say retail, we mean selling to a third party, for example, selling our products to a retailer which would then sell it to a consumer. And when we say the direct to consumer market, we mean IVFH selling its products without intermediaries directly to the consumer. We think there are exciting, meaningful opportunities in both of these areas.

As a result, we are strongly pursuing both direct to consumer opportunities as well as retail opportunities. Each market requires a slightly different approach for us, but the underlying factor is that we will focus on working within the existing or evolving system to minimize infrastructure spend -- in this case, infrastructure could mean physical or any other fixed investment expense -- and to maximize revenues. In other words, we are not looking to reinvent the wheel, and spend a lot of money doing so. Rather to the contrary, the key underlying factor is we believe our existing platform is highly optimized for certain direct to consumer and retail oriented markets. We are highly focused on leveraging our existing infrastructure to drive revenues with low fixed costs and highly favorable ROI and risk profiles. We evaluate each opportunity as it relates to the risk and ROI to optimize the leverage of our platform to deliver strong revenue and profits for our shareholders.

With the strategic moves undertaken in 2013 to further solidify the company, we believe we are now in a position to aggressively execute on many of the opportunities we have been pursuing.

As a result, we enter 2014 with a strong and growing core business in specialty foodservice and an opportunity with our For The Gourmet subsidiary to leverage our platform

I will now talk a little more specifically about some of the consumer oriented areas we are focusing on.

One area is Specialty Food direct to consumer Ecommerce. We continue to focus on a low fixed-cost approach with an acceptable risk profile and ROI. At this point, we are in discussions with potential business development and/or joint venture opportunities that, if successfully concluded, would allow us to efficiently expand our direct to consumer offerings, with an acceptable ROI and risk/reward profile. The key underlying focus for Innovative Food Holdings is to leverage our platform and scale with potential partners to rapidly grow our direct to consumer specialty food business via the web. For competitive and confidentiality reasons this is as far as I can really go in discussing that particular route and approach. I am hopeful that we will be able to share more with you later this year.

Another area is Retail Ecommerce. We continue to see several key opportunities in this space. As an example, we have recently expanded a relationship with a very large online retailer, and are committed to further expansion of that relationship. While the expansion, revenue wise, is not currently material, we believe the opportunity exists for the relationship to grow further and potentially result in material sales and profit contributions. In addition, this large online retailer has also expressed strong interest in a further expansion of the IVFH relationship to expand to a unique pilot program currently not offered to most of the companies it works with. Which, if implemented, could synergistically further leverage IVFH’s unique infrastructure and enable the large online retailer to offer products and product categories it cannot currently offer directly to its customers. As an aside, we believe the strong interest by this key leading online retailer in our program and our offering is a further strong independent indication and validation of the value of the IVFH platform and our key positioning in the specialty food space.

Finally a note on the E-grocery space: The E-grocery market is a market that has evolved over the last several years and has become more active with the recent “discovery” by many people of amazon fresh (although amazon fresh has been around for a while). We believe our platform offers unique opportunities in certain key growth areas in the E-grocery space and the operating trends within the E-grocery space are highly favorable to Innovative Food Holdings and our platform. We remain highly active within the space in terms of working to create and expand relationships in the E-grocery space and continue to aggressively pursue opportunities that can leverage our business model.

Shifting to our investment activities otherwise known as Food Hatch. Our Food Hatch accelerator program, which is designed to provide our shareholders additional upside through a portfolio of equity positions in early stage food related opportunities, can be a way for our shareholders to participate in the growing innovation in the food and foodtech space. We currently have one portfolio company in the product space and are in the process of closing a second transaction with another company in the foodtech space. As we continue to see quality opportunities, we are also seeing exclusive relationship driven opportunities within the food and foodtech space.

One of the central ideas of Food Hatch is to leverage our position and relationships and expertise in the food space to be able to both conduct a thorough due diligence process. We believe we are uniquely positioned to conduct this due diligence. Another key benefit is the value-add we provide to portfolio companies. Once a company has become a portfolio company, we feel we are uniquely positioned to provide value to our portfolio companies in several areas ranging from actual distribution of product, to chef-driven relationships, as well as other food and business related value added benefits.

To summarize, we believe our core foodservice business remains strong with opportunities for partners with a clear path to continued growth. We continue to focus on building on the success and infrastructure of the IVFH specialty food platform to pursue additional synergistic growth opportunities in many key areas of the specialty food space.

We continue to execute against our business plan by concentrating on and building out our foundational markets and entering new attractive markets we believe will hold long term benefits for growth.

In addition, we have been receiving clear feedback from the industry that our platform is an important piece of the future of food distribution and more importantly, it serves unmet needs. As we move through 2014 and onwards, Innovative Food Holdings is strongly positioned and uniquely situated to take advantage of a multitude of potential opportunities within the fast-growing and rapidly changing artisanal, direct from source and specialty food space.

Now we’ll be happy to take your questions. I'll turn the call over to the operator. Thank You.

Question-and-Answer Session


Thank you, sir. Ladies and gentlemen, we’ll now begin the question-and-answer session. (Operator Instructions) And our first question is from the line of Ian Cassel with MicroCapClub. Please go ahead.

Ian Cassel – MicroCapClub

Hi, Sam, I want to thank you for that comprehensive overview of the business. One, my first question relates to, you mentioned that weather effect in Q4. I was wondering if weather also effect in Q1?

Samuel Klepfish

We did have an effect from weather in Q1. That being said, January and February was still 54 and 55 months of record month over month revenue growth.

Ian Cassel – MicroCapClub

Okay, great. And can you tell us, like what your strongest lines of products were?

Samuel Klepfish

Well, certainly as Justin outlined in the summary we went into some detail on some of the areas of products that are strong. We don’t go through specific lines or specific brands, but the areas that Justin mentioned were gluten free, specialty artisanal type of products, but we usually don’t go into deeper specifics. The gluten free space certainly, as Justin mentioned, was a strong for us

Ian Cassel – MicroCapClub

And then, you mentioned that you handled, there was a day where you handled 2,600 packages in a single day. How much additional investment would it take for you to say double that or maybe even go up 10 times that amount in a single day? Would you have to put that much capital expenditure into it?

Samuel Klepfish

That’s a great question. Based on our low fixed cost model, we think we can handle any significant increases of volume with minimal fixed cost. We think that – we are actually very confident that our platform can handle any significant increases in volume that come our way. And as we get additional sales volume, without additional investment, it could result in multiplier effect, which eventually could drive strong sales increases with a decrease in SG&A as a percentage of revenue and so resulting in better bottom line and stronger bottom line result.

So if that happens as we see the power of the platform, and we have seen some of this in our current financial results result and if as we are able to drive sales volume we would anticipate seeing more of that as well and those declines of SGA as a percentage

Ian Cassel – MicroCapClub

Okay, thank you. I’ll get back in queue.

Samuel Klepfish



Thank you. Our next question is from the line of Neil Cataldi with Blueprint Capital Management. Please go ahead.

Neil Cataldi – Blueprint Capital Management, LLC

Hey, guys thanks for your time today. I’ll ask one or two as well. You use the word partners a numbers of times in the prepared remarks. How many partners do you have today and can you say how many of them are considered to be in the top 10 as far as size?

Samuel Klepfish

Yes, I’ll let Justin to answer that question in terms of how many partners we have. We typically, like we said on the call, we certainly have some of the larger ones. We currently –I will let Justin go ahead and answer that question.

Justin Wiernasz

Thanks, Sam. The answer to your question is, right now we have two current active with broadliners, and we have – like we said in the prepared remarks, we have several that were speaking to and that we are having discussions with currently. And I will say that all of the active and in discussion potential partners are out of that top 10.

Neil Cataldi – Blueprint Capital Management, LLC

Okay, that’s great. Thanks. Second question regarding online, you also mentioned one of the largest online retailers in your remarks. I’ve seen the For the Gourmet Stores fun at Amazon, so I’m assuming that’s the reference. I was wondering, if you could talk in a little more detail about the Amazon opportunity, and maybe whether it’s a fulfillment relationship or it’s one where they are actually taking inventory, is there anything else you can provide on that?

Samuel Klepfish

So we are just going to stick to our comments about a large online retailer. We’ll just say, there is an opportunity out there and given this nature of discussions that we have ongoing I think that it’s probably better that we’ll leave it at that as a unnamed large online retailer, by which we’ll feel that we can grow in a number of ways that it relates to our platform.

Neil Cataldi – Blueprint Capital Management, LLC

Okay. All right, thanks, guys.


Thank you. (Operator Instructions) And our next question is a follow-up question from the line of Neil Cataldi with Blueprint Capital Management. Please go ahead.

Neil Cataldi – Blueprint Capital Management, LLC

Yes, I guess, I’ll jump in with one more. Regarding the merger between your partner, is there any update? I know you sort of mentioned briefly in the beginning on how might impact you, but is there anything else you can provide on that? And do you think there is an opportunity in that to maybe capture this company as a customer as well in the future?

Samuel Klepfish

Justin. Again, I’ll just tell you that, I’ll let Justin answer that question. Go ahead, Justin.

Justin Wiernasz

Thanks, Sam. We don’t currently have any specific knowledge or direct knowledge of it, especially as it relates to the status of the FTC review of the proposed merger. But without being too specific we obviously want to protect our business relationships that we have, but we feel that we bring a tremendous value and a point of differentiation to the table with our unique platform.

So again without having any discussions ongoing or any specific details, we feel pretty comfortable that we’re putting our best foot forward and our program has merit to what their potential needs would be. I think ultimately it’s – and my guess that comment what Sam said earlier, was this business as usual is what the status quo is coming out of the camps and we’ve seen that in the end of 2013 and so far in 2014.

Samuel Klepfish

And again just to jump in here, we love to be obviously be able to answer those types of questions in more detail, but due to the sense of sensitivity of any ongoing discussions and obviously the important and strategic nature of any discussions, we think any further detail is probably not prudent strategically for the company at this point in time.

Neil Cataldi – Blueprint Capital Management, LLC

Sure. Okay. Well, I appreciate you guys taking a stab at it anyway. Thanks.


Thank you. Our next question is from the line of Denver Smith with 73114 Investments LLC. Please go ahead.

Denver J. Smith – 73114 Investments LLC

Hi. I was just going to see, if I could indeed go back over some of the nonrecurring charges in the fourth quarter. You have the Artisan and that was about 200, correct?

Sam Klepfish

That’s correct.

Denver J. Smith – 73114 Investments LLC

Can you kind of give me a more narrow range for how much the, I guess, cost associated with the new headquarters were?

Justin Wiernasz

That was not a significant, out all of the cost there. We’re not breaking it down that deep, but certainly it was not a significant cost. It was less than $50,000.

Denver J. Smith – 73114 Investments LLC


Denver J. Smith – 73114 Investments LLC

So the main thing was just the Artisan?

Justin Wiernasz

With Artisan there were a number of those transactions that we conducted in the fourth quarter, I mean these transactions, were highly complex. First time when there was a commercial bank, first time loan for the long time, so it took a lot work. So it’s essentially those types of things.

Denver J. Smith – 73114 Investments LLC

Awesome. Thanks.


Thank you. Our next question is from the line of Jeff Blufken, private investor. Please go ahead.

Unidentified Participant

Gentlemen, thanks for holding this call today. I wanted to find out what if any steps are being taken to try to get some analysts involvements in the company. Just going to say Yahoo Finance today and trying to find out what estimated earnings are, it just shows no coverage whatsoever, and it would be great to see an analyst or two following the company.

Samuel Klepfish

Jeff, that’s a great question. Certainly, obviously one of the key ways of generating investor interest in the Wall Street environment so to speak is in fact analyst coverage. We’re sort of on the smaller side as it relates to analyst coverage, but certainly we have spoken to many analysts, several analysts in this space, that covers some of the larger names, and while we don’t think we’ll have coverage at this point right now or in the near term, certainly it’s something that we are obviously actively interested in having. So it’s a great point.


Thank you, gentlemen, I’m showing no further questions at this time. I would like to turn the conference back over to you for any closing remarks.

Samuel Klepfish

Okay, just again we’d like to say to everyone, thank you very much for joining the call. Certainly, we appreciate your interest in Innovative Food Holdings and as we said over the years, certainly if anyone have additional questions or comments feel free to reach out us individually, we’d love to hear your comments, questions, and again thank you very much for participating.


Thank you, sir. Ladies and gentlemen that concludes our conference for today. Thank you very much for your participation. At this time you may now disconnect.

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