SOURCE: Where Food Comes From

Where Food Comes From

May 01, 2013 16:00 ET

Where Food Comes From®, Inc. Reports First Quarter Financial Results

CASTLE ROCK, CO--(Marketwired - May 1, 2013) - Where Food Comes From, Inc. (d.b.a. IMI Global, Inc.) (OTCQB: WFCF), a leading provider of verification and Internet solutions for the agricultural/livestock industry, today announced financial results for its first quarter ended March 31, 2013.

Revenue in the first quarter was $1,025,500, down slightly as compared with revenue of $1,029,300 in the same quarter last year. The decline was due to reduced source and age verification activity associated with Japan recently having eased its beef important regulations. Lower source and age verification revenue was more than offset by increased revenue from other WFCF service offerings, including Non-Hormone Treated Cattle (NHTC) and Verified Natural Beef (VNB) programs. Total verification services revenue increased slightly to $853,600 in the first quarter from $845,800 in the same quarter last year. Hardware revenue consisting of cattle ear tags declined to $129,000 from $157,000 year over year, again a reflection of reduced source and age verification activity. Other revenue, primarily comprised of fees from the Where Food Comes From labeling program, grew 62% year-over-year to $42,900 from $26,500.

Selling, general and administrative expense in the first quarter increased 28% year over year to $625,500 from $488,100. This increase reflected expenses associated with the Company's 60% ownership interest in International Certification Services (ICS), which was acquired on February 29, 2012. Net loss attributable to Where Food Comes From, Inc. in the first quarter was $58,400, or less than one cent per share, versus net income of $362,100, or $0.02 per share, in same quarter last year.

"As anticipated, Japan's decision to ease import regulations affected our source and age verification activity in the first quarter and this, in turn, impacted revenue and profitability," said John Saunders, Chairman and CEO. "On the positive side, the majority of our source and age customers continue to subscribe to our verification services in order to differentiate their cattle and respond to ever increasing consumer demands for more information on the food they eat. We're also gratified that overall verification revenue increased year-over-year as demand for other services such as Non-Hormone Treated Cattle and Verified Natural Beef continued to grow. We have the industry's most diverse portfolio of services, which enables us to weather a short-term downturn in a particular service offering, and we continue to look for ways to further enhance that portfolio, both through internally developed programs and M&A activity. Meanwhile, our flagship Where Food Comes From consumer labeling program continues to show year-over-year revenue gains and holds tremendous potential for long-term growth as consumers demand more transparency into the food chain continuum. We remain confident about our long term prospects for profitable growth and look forward to another year of solid performance in 2013."

Conference Call
The Company will conduct a conference call today at 2:15 p.m. Mountain Time.

The call-in numbers for the conference call:
Domestic Toll Free: 1-877-941-1466
International: 1-480-629-9867
Conference Code: 4616473

Phone replay:
A telephone replay of the conference call will be available through May 15, 2013, as follows:
Domestic Toll Free: 1-800-406-7325
International: 1-303-590-3030
Conference Code: 4616473

About Where Food Comes From, Inc.
Where Food Comes From, Inc. (d.b.a. IMI Global) is America's leading provider of third-party identification, verification and traceability solutions for the livestock and agricultural industries. The Company supports more than 6,000 ranchers, farmers, feed yards, meatpackers, food retailers and restaurants with a wide range of solutions, including its USVerified™ brand -- the industry standard for USDA Process Verified (PVP) programs -- which annually verifies marketing claims for approximately one half of all U.S. beef exports; Where Food Comes From®, a unique retail and restaurant labeling program that connects consumers directly to the source of the food they purchase; and various organic and gluten free certification solutions through its International Certification Services (ICS) subsidiary. Go to www.IMIGlobal.com and 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 expectations to grow organically and through M&A; industry leadership; potential for exponential growth of the Where Food Comes From program; ability to weather short-term downturns in a revenue segment; 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 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      
       
    Three Months Ended  
    March 31,  
    2013     2012  
                 
Revenues                
  Service revenues   $ 853,606     $ 845,827  
  Product sales     129,009       156,954  
  Other revenues     42,888       26,503  
    Total revenues     1,025,503       1,029,284  
Costs of revenues                
  Labor and other costs of services     405,792       355,453  
  Costs of products     85,889       102,872  
    Total costs of revenue     491,681       458,325  
Gross profit     533,822       570,959  
Selling, general and administrative expenses     625,515       488,137  
Income (loss) from operations     (91,693 )     82,822  
Other expense (income):                
  Interest expense     6,779       7,872  
  Other income, net     (447 )     (2,662 )
Income (loss) before income taxes     (98,025 )     77,612  
Income tax benefit     (34,288 )     (282,090 )
Net income (loss)     (63,737 )     359,702  
Net loss attributable tonon-controlling interest     5,354       2,431  
Net income (loss) attributable to Where FoodComes From, Inc.   $ (58,383 )   $ 362,133  
Net income (loss) per share:                
  Basic   $ -     $ 0.02  
  Diluted   $ -     $ 0.02  
Weighted average number of commonshares outstanding:                
Basic     21,439,355       20,609,639  
Diluted     21,439,355       21,105,614  
   
   
Where Food Comes From, Inc.  
Balance Sheets  
             
    March 31,     December 31,  
    2013     2012  
ASSETS                
Current Assets:                
  Cash and cash equivalents   $ 1,505,638     $ 1,403,489  
  Accounts receivable, net     329,850       377,072  
  Prepaid expenses and other current assets     52,217       80,189  
  Deferred tax assets     277,232       242,944  
    Total current assets     2,164,937       2,103,694  
Property and equipment, net     139,602       146,563  
Intangible and other assets, net     293,776       303,810  
Goodwill     532,997       532,997  
Long-term deferred tax assets     277,177       277,177  
Total assets   $ 3,408,489     $ 3,364,241  
                 
LIABILITIES AND SHAREHOLDERS' EQUITY                
Current liabilities:                
  Accounts payable   $ 149,907     $ 134,913  
  Accrued expenses and other current liabilities     42,918       58,808  
  Customer deposits     30,969       27,478  
  Deferred revenue     207,990       139,022  
  Short-term debt and current portion of notes payable     23,745       22,873  
  Current portion of capital lease obligations     4,012       5,506  
    Total current liabilities     459,541       388,600  
Capital lease obligations, net of current portion     13,958       14,981  
Notes payable and other long-term debt, net of current portion     184,465       191,106  
Notes payable, related party     200,000       200,000  
Total liabilities     857,964       794,687  
Stockholders' equity:                
  Common stock     21,977       21,837  
  Additional paid-in capital     3,713,124       3,668,556  
  Treasury stock     (121,294 )     (121,294 )
  Accumulated deficit     (1,345,923 )     (1,287,540 )
    Total Where Food Comes From, Inc. equity     2,267,884       2,281,559  
    Non-controlling interest     282,641       287,995  
Total equity     2,550,525       2,569,554  
Total liabilities and stockholders' equity   $ 3,408,489     $ 3,364,241  
                 
                 

Contact Information

  • Company Contacts:

    John Saunders
    Chief Executive Officer
    303-895-3002

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