Replies to post #18222 on Innovative Food Holdings Inc (IVFH)

[maverick95128]

Did you account for the taxes they will start to pay again in Q2/Q3?

[Dickmo]

Cool Hand Luke - (a favorite movie, BTW)

Providing company management doesn't do anything stupid between now and the end of 2019, you should do just fine. I think you are a bit optimistic, but not so much as to make a big difference. I would come in 10% to 20% less than you do, especially in 2018. But in the end, it's the P/E that matters, not the earnings.

I seriously doubt management will get adventurous in the next six months. They will wait until they are comfortable the iGourmet is well on the way to success. And I see that as a near certainty. What comes after that is the potential concern. But I suspect this group has learned to stick with food brokerage.

If they ran this company for the benefit of shareholders, this company would finish 2018 at $1.60-$2.00. But they don't, so I think you will be lucky to see $1.25 - $1.40. That is, depending upon what came out of the settlement with the former owner of the Fresh Diet. I have a feeling that will be the gift that keeps on giving. No information on this. I just know the players.

[greasemonkeyshoes]

Away from my desk......
Need few more days before life is back to normal and be able to provide you a 2nd opinion.
"get your thoughts and then track this going forward .." CHL13

[greasemonkeyshoes]

Yes,you are a little more optimistic then I and here are why............
In this analysis/tables,I separated IFVH income statement into three components:IFH(exclude IGourment),IGourmet ,plus consolidation adjustment.The three component approach used here hopefully provides more visibility/exposure/insight of the core business(trend in particular),and accretive sale of the new acquisition,and synergistic adjustments of the combined components/operations.
My assumptions on IHF,component 1:
1. 2018 sale/eps projection mirrors 2017,all based on identical performance of 2018Q1/2017Q1:1% revenue growth,cost at 68%(no change),sg&a at 23%(no change).
2. 33 million shares for 2018 and 34 million shares for 2019.
Table 1-
2018 IFV income/eps,component 1
IFH*********Q1****Q2****Q3****Q4***Total
revenue***9.5***10.5***10.5***10.8***41.2
eps********2.9c***4.2c***4.8c***3.3c***15.2c(14.7c for 2019)
My take:
A. The core business revenue Q/Q: trend line is broken in Q1 2018 and the growth rate is flattened down to practically 0%.Also Pro forma comparison of 2017Q1/2018Q1 in the latest 10Q,confirmed it.

My assumptions on IGourmet,component 2:
1. 2018 sale/eps projection also mirrors 2017,all based on yearly performance of 2017/2016:Revenue up 2.3%,cost up 3%,sg&a down 1%,or net even as the bottomline(no growth) is concerned.
3. Weigh factor for quarterly sales are: 1Q(20%),2Q(20%),3Q(20%),4Q(40%)
4. !Q revenue prorated as of Jan 23.
5. 33 million shares for 2018 and 34 million shares for 2019.
Table 2-
2018 IGourmet income/eps,component 2
IFH*********Q1****Q2****Q3****Q4***Total
revenue***1.4****1.8****1.8****3.5****8.5
eps*****-0.5c***-0.7c***-0.7c***-1.4c***-3.2c(-3.5 for 2019)

My assumptions on consolation adjustment,component 3-the most subjective component of all,particularly on the cost savings:
1. One-time expense is capped at $200K.
2. Added adjustments due to IGourmet in 2018 are being off set by higher-than-normal compensation expenses in 2017,or net even to be exact.
Table 3-
2018 Consolidation adjustment,component 3
ADJ*********Q1****Q2****Q3****Q4***Total
one-time**-0.6c***0.0c***0.0c***0.0c***-0.6c
or
For all three
2018IVFH income/eps,all,and before cost cutting adjustments
revenue***10.9****12.3****12.3****14.3****49.8
eps********1.4c****3.5c****4.1c****2.6c****11.6c(11.2c for 2019)
then you add the savings
For every $0.5 million deduction in sg&a from the baseline of $11.8 million(combining IFV of $8.9 and IGourmet of $2.9):
add 1.5c to the eps(annualized).
2018 eps 13.1c=11.6c+1.5c($11.5 million and 0.5 million deduction used)
2019 eps 12.7c=11.2c+1.5c($11.5 million)

Conclusion:
No growth from the core business and the newly acquired business,are likely in the near future.The synergistic topline increase is low to non-existent,and limited to the cost side only.PE likely be capped below 6 for longer than liked.
I stand by my earlier remarks made on 5/17/2018
"eps: 12c-15c(2018) "
"pe: 4-5 or the $1.38 high would not be breached until 2nd half of 2019."
"perception of a "growth company" is broken,main cause for the pe shrinkage,eps>3c is a must for next q to stop the slide.A lot of squeezing ahead for Sam to do ASAP and a chance to see what this CEO is made of or rather lack of."