SOURCE: Where Food Comes From

Where Food Comes From

May 05, 2016 07:00 ET

Where Food Comes From, Inc. Reports Revenue and Earnings Growth for 2016 First Quarter

CASTLE ROCK, CO--(Marketwired - May 5, 2016) - Where Food Comes From, Inc. (d.b.a. IMI Global, Inc.) (OTCQB: WFCF)

Revenue up 18% year over year to $2.4 million from $2.1 million

Net income up 59% year over year to $87,200 from $54,800; eighth consecutive profitable quarter

Net cash generated from operations up 84% to $734,400 from $398,600

Strong balance sheet: $4.3 million cash and cash equivalents; 4.4:1 current ratio

Where Food Comes From, Inc. (d.b.a. IMI Global, Inc.) (OTCQB: WFCF), the most trusted resource for independent, third-party verification of food production practices in North America, today announced results for its first quarter ended March 31, 2016.

First Quarter Results
First quarter revenue increased 18% to $2,445,800 from revenue of $2,081,300 in the same quarter last year. Verification services revenue increased 21% to $2,147,400 from $1,774,200 due to the addition of new customers and new verification service offerings. Product revenue (cattle identification tags) decreased 3% to $271,100 from $279,800. Other revenue was essentially flat at $27,300.

Gross profit in the first quarter increased 25% to $1,207,100 from $963,300 year over year. Gross margin in the first quarter improved to 49% from 46%. Selling, general and administrative expense as a percent of revenue improved to 45% in the first quarter from 46% in the same quarter last year.

Income from operations in the first quarter increased 746% to $104,000 from $12,300 in the same quarter last year. Net income attributable to Where Food Comes From, Inc. increased to $87,200, or less than one cent per share, compared to $54,800, or less than one cent per share, in the same quarter a year ago.

Net cash generated from operations increased 84% to $734,400 in the first quarter of 2016 from $398,600 in the prior year.

The Company's cash and cash equivalents balance at March 31, 2016, increased to $4,348,500 from $3,781,400 at 2015 year-end. Working capital remained strong at $4.3 million.

"We are pleased with our first quarter performance, which was highlighted by continued revenue growth, our eighth consecutive profitable quarter and the generation of more than $734,000 in cash from operations," said John Saunders, chairman and CEO. "Our gross margin in the first quarter grew by 300 basis points year over year and our gross profit grew at a faster rate than overall revenue. These achievements reflect the scalability of our business and the benefits of audit bundling, which enables us to reduce costs to the customer by completing multiple audits during a single site visit.

"Audit bundling represents a powerful differentiating competitive advantage for Where Food Comes From," Saunders added. "We have far and away the largest verification portfolio -- more than 30 certifications in all -- so in addition to affording us revenue and margin advantages, our bundled services capability offers ranchers and farmers the convenience and cost benefits of hiring one verifier to complete multiple audits in a single visit versus the costly and time-consuming alternative of hiring several verifiers for multiple site visits. Our bundled audits are increasingly including non-GMO Project verifications, reflecting the tremendous growth of that segment of food verifications based on consumer interest in knowing what goes into their food."

Conference Call
The Company will conduct a conference call today at 10:00 a.m. Mountain Time.

Dial in:
Domestic Toll Free: 1-877-407-8289
International: 1-201-689-8341
Conference ID: 13635397

Phone replay:
A telephone replay of the conference call will be available through May 19, 2016, as follows:
Domestic Toll Free: 1-877-660-6853
International: 1-201-612-7415
Conference Code: 13635397

About Where Food Comes From, Inc.
Where Food Comes From, Inc. (d.b.a. IMI Global) is America's trusted resource for third party verification of food production practices. The Company supports more than 10,000 farmers, ranchers, processors, retailers, distributors and restaurants with a wide variety of value-added services through its IMI Global, International Certification Services, Validus Verification Services, and Sterling Solutions units. In addition, the Company's Where Food Comes From® retail and restaurant labeling program utilizes the verification of product attributes to connect consumers to the sources of the food they purchase through product labeling and web-based information sharing and education. Visit www.wherefoodcomesfrom.com for additional information.

CAUTIONARY STATEMENT
This news release contains "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, based on current expectations, estimates and projections that are subject to risk. Forward-looking statements are inherently uncertain, and actual events could differ materially from the Company's predictions. Important factors that could cause actual events to vary from predictions include those discussed in our SEC filings. Specifically, statements in this news release about industry leadership; the Company's ability to establish and sustain a competitive advantage and to continue producing financial results similar to those described in this press release; and demand for, and impact and efficacy of, the Company's products and services on the marketplace, are forward-looking statements that are subject to a variety of factors, including availability of capital, personnel and other resources; competition; governmental regulation of the agricultural industry; the market for beef and other commodities; and other factors. Financial results for the first quarter are not necessarily indicative of future results. Readers should not place undue reliance on these forward-looking statements. The Company assumes no obligation to update its forward-looking statements to reflect new information or developments. For a more extensive discussion of the Company's business, please refer to the Company's SEC filings at www.sec.gov.

   
Where Food Comes From, Inc.  
Statements of Income (Loss)  
(Unaudited)  
   
    Three Months Ended  
    March 31,  
    2016     2015  
                 
Revenues                
  Service revenue   $ 2,147,402     $ 1,774,152  
  Product sales     271,075       279,804  
  Other revenue     27,275       27,345  
  Total revenue     2,445,752       2,081,301  
Costs of revenue                
  Labor and other costs of services     1,109,138       956,039  
  Costs of products     129,499       161,979  
  Total costs of revenue     1,238,637       1,118,018  
Gross profit     1,207,115       963,283  
Selling, general and administrative expenses     1,103,162       950,999  
Income from operations     103,953       12,284  
Other expense (income):                
  Interest expense     295       456  
  Other income, net     (1,932 )     3,004  
Income before income taxes     105,590       8,824  
Income tax expense     49,950       35,150  
Net income (loss)     55,640       (26,326 )
Net loss attributable to non-controlling interest     31,605       81,173  
Net income attributable to Where Food Comes From, Inc.   $ 87,245     $ 54,847  
Net income per share:                
  Basic   $ *     $ *  
  Diluted   $ *     $ *  
Weighted average number of common shares outstanding:                
Basic     23,753,000       23,755,990  
Diluted     23,904,880       23,966,436  
                 

* Less than a penny ($0.01) per share

             
             
Where Food Comes From, Inc.            
Balance Sheets            
             
    March 31,     December 31,  
    2016     2015  
ASSETS   (unaudited)        
Current Assets:                
  Cash and cash equivalents   $ 4,348,464     $ 3,781,397  
  Accounts receivable, net     1,029,610       1,110,052  
  Prepaid expenses and other current assets     178,129       154,912  
    Total current assets     5,556,203       5,046,361  
Property and equipment, net     134,091       157,950  
Intangible and other assets, net     1,721,432       1,760,199  
Goodwill     1,279,762       1,279,762  
Deferred tax assets     181,502       231,452  
Total assets   $ 8,872,990     $ 8,475,724  
                 
LIABILITIES AND SHAREHOLDERS' EQUITY                
Current liabilities:                
  Accounts payable   $ 359,038     $ 417,836  
  Accrued expenses and other current liabilities     178,745       92,574  
  Customer deposits     112,208       77,784  
  Deferred revenue     609,650       194,087  
  Short-term debt and current portion of notes payable     7,955       7,846  
  Current portion of capital lease obligations     4,695       4,634  
    Total current liabilities     1,272,291       794,761  
Capital lease obligations, net of current portion     579       1,776  
Notes payable and other long-term debt, net     6,326       8,365  
Total liabilities     1,279,196       804,902  
Contingently redeemable non-controlling interest     -       936,370  
Stockholders' equity:                
  Common stock     23,935       23,822  
  Additional paid-in capital     8,232,313       7,446,634  
  Treasury stock     (191,611 )     (177,916 )
  Accumulated deficit     (470,843 )     (558,088 )
Total Equity     7,593,794       6,734,452  
Total liabilities and stockholders' equity   $ 8,872,990     $ 8,475,724  
                 

Contact Information

  • Company Contacts:

    John Saunders
    Chief Executive Officer
    303-895-3002

    Jay Pfeiffer
    Pfeiffer High Investor Relations, Inc.
    303-393-7044