SOURCE: Where Food Comes From

Where Food Comes From

February 17, 2015 07:00 ET

Where Food Comes From, Inc. Reports Revenue and Earnings Growth for 2014 Fourth Quarter and Full Year

CASTLE ROCK, CO--(Marketwired - Feb 17, 2015) - Where Food Comes From, Inc. (OTCQB: WFCF)

Full Year revenue up 51% to $8.8 million from $5.8 million last year

Fourth quarter revenue up 41% to $2.6 million from $1.9 million last year

Net income of $64,000 in fourth quarter and $229,000 for full year

Net cash generated from operations up 172% to $590,000 from $217,000

Where Food Comes From, Inc. (d.b.a. IMI Global, Inc.) (OTCQB: WFCF), the most trusted resource for third-party verification of food production practices, today announced results for its fourth quarter and full year ended December 31, 2014.

"In 2014, Where Food Comes From achieved strong year-over-year revenue and earnings growth and extended its leadership position in an industry that is still in its infancy," said John Saunders. "Solid growth in our core services and hardware businesses was driven by diverse factors ranging from an increase in the number of consumer-driven verification standards to continued execution of our M&A strategy to initial phase-in of the USDA's mandatory Animal Disease Traceability (ADT) program.

"Over the past several years we have positioned Where Food Comes From as the go-to company for more than 30 verification standards for food industry players ranging from farmers, ranchers and packers to distributors and retailers -- all of which are working hard to meet consumer and regulatory demand for increased transparency in the entire food chain continuum. We look forward to continued growth in 2015 as demand for our core solutions continues to grow and new opportunities such as ADT gain momentum."

Fourth Quarter Results
Fourth quarter revenue increased 41% to $2,614,300 from revenue of $1,856,300 in the same quarter last year. Verification services revenue was up 40% to $2,307,500 from $1,643,000. Product revenue (cattle identification tags) increased 67% to $299,700 from $179,200. Other revenue, primarily associated with the Company's Where Food Comes From® labeling program, decreased 79% to $7,200 from $34,000 year over year. Increased verification and hardware revenue resulted from a combination of organic growth -- driven in part by initial compliance with the USDA's animal disease traceability (ADT) program -- and the effects of the Company's M&A strategy. The reduction in labeling revenue resulted from a change in the beef supplier for the Company's largest labeling customer -- Heinen's fine foods. Heinen's is working to replace that supplier with another supplier whose products can be source verified by Where Food Comes From. In the meantime, the Company continues to generate labeling revenue from other products in the Heinen's meat department.

Gross profit in the fourth quarter increased 43% to $1,141,500 from $798,400 year over year. Selling, general and administrative expenses as a percent of revenue improved to 39% in the fourth quarter from 42% in the same quarter last year.

Operating income in the fourth quarter increased four-fold to $127,700 from $25,300 in the same quarter last year. Net income attributable to Where Food Comes From, Inc. increased to $64,200, or less than one cent per share, compared with a net loss of $11,300, or less than one cent per share, in the same quarter a year ago.

Full Year Results
Revenue for the full year increased 51% to $8,764,900 from $5,798,200 in the same period last year. Verification revenue increased 53% to $7,564,600 from $4,947,400 year over year. Hardware revenue increased 50% to $1,085,700 from $723,400 a year ago. Revenue from Where Food Comes From® labeling decreased 10% to $114,700 from $127,300.

Gross profit for the year increased 39% to $3,763,300 from $2,706,400 a year ago. Selling, general and administrative expense improved to 39% of revenue from 46% of revenue a year ago, reflecting the scalability of the Company's business model.

Operating income increased to $344,700 from $27,300 year over year. Net income attributable to Where Food Comes From, Inc. was $229,095, or $0.01 per share, versus a net loss of $33,600, or less than one cent per share, in the prior year.

Net cash generated from operations increased 172% to $590,000 from $216,900 in the same period last year.

Balance Sheet
The Company's cash balance at December 31, 2014, increased to $2,583,100 from $1,067,500 at 2013 year-end. Working capital increased to $3,380,700 from $1,533,600 over the same period.

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: 13601280

Phone replay:
A telephone replay of the conference call will be available through March 3, 2015, as follows:
Domestic Toll Free: 1-877-660-6853
International: 1-201-612-7415
Conference Code: 13601280

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. Go to 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; expectations for continued profitable growth; and the demand for, and impact and efficacy of, the Company's and its subsidiaries' 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 fourth quarter and full year 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     Year Ended  
    December 31,     December 31,  
    2014     2013     2014     2013  
    (Note 1)              
Revenues                                
  Service revenue   $ 2,307,457     $ 1,642,982     $ 7,564,585     $ 4,947,430  
  Product sales     299,662       179,237       1,085,671       723,449  
  Other revenue     7,189       34,043       114,676       127,277  
    Total revenue     2,614,308       1,856,262       8,764,932       5,798,156  
Costs of revenue                                
  Labor and other costs of services     1,282,104       934,788       4,283,218       2,572,538  
  Costs of products     190,708       123,057       718,410       519,221  
    Total costs of revenue     1,472,812       1,057,845       5,001,628       3,091,759  
Gross profit     1,141,496       798,417       3,763,304       2,706,397  
Selling, general and administrative expenses     1,013,802       773,156       3,418,578       2,679,089  
Income from operations     127,694       25,261       344,726       27,308  
Other expense (income):                                
  Interest expense     493       3,716       9,818       33,588  
  Other income, net     (1,221 )     (354 )     (3,204 )     (1,469 )
Income (loss) before income taxes     128,422       21,899       338,112       (4,811 )
Income tax expense (benefit)     43,744       10,451       140,876       (1,778 )
Net income (loss)     84,678       11,448       197,236       (3,033 )
Net loss (income) attributable to non-controlling interest    
(20,481

)
   
(22,764

)
   
31,859
     
(30,527

)
Net income (loss) attributable to Where Food Comes From, Inc.  
$

64,197
   
$

(11,316

)
 
$

229,095
   
$

(33,560

)
Net income (loss) per share:                                
  Basic   $ *     $ *     $ 0.01     $ *  
  Diluted   $ *     $ *     $ 0.01     $ *  
Weighted average number of common shares outstanding:                                
Basic     21,243,745       20,852,052       23,170,074       21,893,794  
Diluted     21,868,596       20,880,391       23,400,068       21,893,794  
                                 
* Less than a penny ($0.01) per share
Note 1: Certain revenue and cost of revenue amounts presented in prior 2014 quarters and 2013 have been reclassified to conform to fourth quarter 2014 presentation.
 
 
 
Where Food Comes From, Inc.
Balance Sheets
             
    December 31,     December 31,  
    2014     2013  
ASSETS                
Current Assets:                
  Cash   $ 2,583,058     $ 1,067,537  
  Restricted cash     250,000       -  
  Accounts receivable, net     979,532       683,800  
  Prepaid expenses and other current assets     126,938       143,576  
  Deferred tax assets     167,805       190,184  
    Total current assets     4,107,333       2,085,097  
Property and equipment, net     231,886       253,206  
Intangible and other assets, net     1,952,678       1,716,115  
Goodwill     1,279,762       1,279,762  
Long-term deferred tax assets     361,797       480,294  
Total assets   $ 7,933,456     $ 5,814,474  
LIABILITIES AND SHAREHOLDERS' EQUITY                
Current liabilities:                
  Accounts payable   $ 401,131     $ 277,633  
  Accrued expenses and other current liabilities     65,849       56,091  
  Customer deposits     69,090       39,134  
  Deferred revenue     178,724       149,660  
  Short-term debt and current portion of notes payable     7,425       24,782  
  Current portion of capital lease obligations     4,397       4,173  
    Total current liabilities     726,616       551,473  
Capital lease obligations, net of current portion     6,410       10,808  
Notes payable and other long-term debt, net     16,245       165,755  
Total liabilities     749,271       728,036  
Contingently redeemable non-controlling interest     974,019       1,018,396  
Stockholders' equity:                
  Common stock     24,266       23,233  
  Additional paid-in capital     7,428,754       5,216,327  
  Treasury stock     (150,849 )     (150,849 )
  Accumulated deficit     (1,092,005 )     (1,321,100 )
  Total Where Food Comes From, Inc. equity     6,210,166       3,767,611  
  Non-controlling interest     -       300,431  
Total Equity     6,210,166       4,068,042  
Total liabilities and stockholders' equity   $ 7,933,456     $ 5,814,474  
                 
                 

Contact Information

  • Company Contacts:

    John Saunders
    Chief Executive Officer
    303-895-3002

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