Where Food Comes From(R), Inc. Reports Fourth Quarter and Full Year Results

CASTLE ROCK, CO--(Marketwired - Mar 4, 2014) - Where Food Comes From, Inc. (d.b.a. IMI Global, Inc.) (OTCQB: WFCF)

Fourth Quarter Revenue Up 39% to $1.8 Million From $1.3 Million Last Year

Full Year Revenue Up 5% to $5.5 Million From $5.3 Million in Prior Year

Company Adds 4,000 New Producer Customers Through M&A and Strategic Partnership Deals During 2013

Where Food Comes From, Inc. (d.b.a. IMI Global, Inc.) (OTCQB: WFCF), the trusted resource for third-party verification of food production practices, today announced results for its fourth quarter and full year period ended December 31, 2013.

"We are pleased to report renewed revenue growth in both the fourth quarter and 12-month period," said John Saunders, chairman and CEO. "This growth reflects M&A activity along with increased demand for the Company's non-hormone treated cattle (NHTC) and Verified Natural Beef programs as well as an increase in source verifications in international markets. These growth factors combined to more than offset a sharp decline in Japanese age and source verification revenue in 2013 due to Japan's easing of import restrictions. We believe most of the impact of Japan's action will have been absorbed by the end of the first quarter of 2014 and that we can reestablish a consistent long-term revenue growth trend.

"While we continue to generate positive cash from operations and positive operating income, our bottom line has been impacted over the past year by M&A-related costs and expenses along with the effects of Japan. Our M&A activity, which included one acquisition and one strategic partnership, added more than 4,000 new customers and strengthened our position as the nation's leader in verification in the food industry. With transaction costs behind us and as we progress through the integration process with these new businesses, we expect to achieve increased efficiencies and improved profitability over the long term."

Fourth Quarter Results
Fourth quarter revenue increased 39% to $1,797,000 from revenue of $1,289,700 in the fourth quarter last year. Verification services revenue was $1,583,800, up 48% from $1,073,000 year-over-year, while hardware revenue, consisting primarily of cattle identification tags, was down slightly to $179,200 from $183,100 due to fewer ear tags sold in conjunction with age and source verification for Japan. Labeling revenue in the fourth quarter was up slightly to $34,000 from $33,600 in the same quarter last year.

Gross profit in the fourth quarter increased 14% to $798,400 from $700,100 year over year. Selling, general and administrative expenses in the fourth quarter were $773,200, a 32% increase over $585,600 in the same quarter last year. The increase was primarily attributable to assumption of ongoing SG&A costs for Validus.

Net loss attributable to Where Food Comes From, Inc. in the fourth quarter was $11,300, or less than one cent per share, compared with net income of $140,300, or $0.01 cent per share, in the same quarter a year ago. The year-ago fourth quarter included an income tax benefit of $28,500.

Full Year Results
2013 full year revenue increased 5% to $5,533,500 from $5,261,400 last year. Verification revenue increased 8% to $4,682,700 from $4,328,300 year over year. Hardware revenue was $723,400, down 11% from $809,100 a year ago. Revenue from Where Food Comes From labeling and other sources increased slightly to $127,300 from $124,000. The increase in verification revenue reflected M&A activity along with increased demand for the Company's non-hormone treated cattle (NHTC) and Verified Natural Beef programs as well as an increase in source verifications in international markets. These growth factors combined to more than offset a sharp decline in Japanese age and source verification revenue in 2013.

Selling, general and administrative expense increased 14% in 2013 to $2,679,100 from $2,341,700. This increase reflected legal and advisory costs associated with the Validus acquisition, partially offset by general cost reduction measures undertaken by the Company.

Inclusive of $218,700 in transaction costs associated with the Validus acquisition, the Company reported a net loss attributable to Where Food Comes From, Inc. of $33,600, or less than one cent per share, versus net income of $870,400, or $0.04 per share, in the prior year. The 2012 net income of $870,400 included an income tax benefit of $391,500.

Balance Sheet Highlights
Cash and cash equivalents at December 31, 2013, totaled $1.1 million, which is up from $1.0 million in the third quarter of 2013 but down from $1.4 million at 2012 year-end due to cash consideration paid in the Validus acquisition and transaction costs associated with all M&A activity. Working capital was $1.5 million at 2013 year-end versus $1.7 million in working capital at the end of 2012.

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

The call-in numbers for the conference call:
Domestic Toll Free: 1-866-225-8754
International: 1-480-629-9819
Conference ID: 4671682

Phone replay:
A telephone replay of the conference call will be available through April 4, 2014, as follows:
Domestic Toll Free: 1-800-406-7325
International: 1-303-590-3030
Conference Code: 4671682

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 and restaurants with a wide variety of value-added services through its IMI Global, International Certification Services, and Validus Verification Services 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 to achieve profitable growth; the Company's belief that most of the impact of changes in Japan's import requirements has been absorbed; 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 twelve-month period 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,
				2013				2012				2013				2012
Revenues
	Service revenue			$	1,583,762			$	1,073,011			$	4,682,738			$	4,328,277
	Product sales				179,237				183,098				723,449				809,084
	Other revenue				34,042				33,631				127,277				124,006
		Total revenue			1,797,041				1,289,740				5,533,464				5,261,367
Costs of revenue
	Labor and other costs of services				875,570				457,156				2,307,846				1,844,655
	Costs of products				123,057				132,488				519,221				586,767
		Total costs of revenue			998,627				589,644				2,827,067				2,431,422
Gross profit					798,414				700,096				2,706,397				2,829,945
Selling, general and administrative expenses					773,154				585,621				2,679,089				2,341,665
Income from operations					25,260				114,475				27,308				488,280
Other expense (income):
	Interest expense				3,699				6,168				33,588				25,929
	Gain (loss) on sale of marketable securities				-				263				-				(11,892	)
	Gain on disposal of property and equipment				-				(3,208	)			-				(3,208	)
	Other income, net				(244	)			(330	)			(1,469	)			(4,239	)
Income (loss) before income taxes					21,805				111,582				(4,811	)			481,690
Income tax expense (benefit)					10,355				(28,506	)			(1,778	)			(391,478	)
Net income (loss)					11,450				140,088				(3,033	)			873,168
	Net income (loss) attributable to non-controlling interest				(22,765	)			253				(30,527	)			(2,810	)
	Net income (loss) attributable to Where Food Comes From, Inc.			$	(11,315	)		$	140,341			$	(33,560	)		$	870,358
Net income (loss) per share:
	Basic			$	*			$	0.01			$	*			$	0.04
	Diluted			$	*			$	0.01			$	*			$	0.04
Weighted average number of common shares outstanding:
Basic					22,868,786				20,852,052				21,893,794				20,943,966
Diluted					22,686,786				20,880,391				21,893,794				21,678,858

* Less than a penny ($0.01) per share

Where Food Comes From, Inc.
Balance Sheets
				December 31,				December 31,
				2013				2012
ASSETS
Current Assets:
	Cash and cash equivalents			$	1,067,537			$	1,403,489
	Accounts receivable, net				683,800				377,072
	Prepaid expenses and other current assets				143,576				80,189
	Deferred tax assets				190,184				242,944
		Total current assets			2,085,097				2,103,694
Property and equipment, net					253,206				146,563
Intangible and other assets, net					1,716,115				303,810
Goodwill					1,279,762				532,997
Long-term deferred tax assets					480,294				277,177
Total assets				$	5,814,474			$	3,364,241
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
	Accounts payable			$	277,633			$	134,913
	Accrued expenses and other current liabilities				56,091				58,808
	Customer deposits				39,134				27,478
	Deferred revenue				149,660				139,022
	Short-term debt and current portion of notes payable				24,782				22,873
	Current portion of capital lease obligations				4,173				5,506
		Total current liabilities			551,473				388,600
Capital lease obligations, net of current portion					10,808				14,981
Notes payable and other long-term debt, net					165,755				191,106
Notes payable, related party					-				200,000
Total liabilities					728,036				794,687
Contingently redeemable non-controlling interest					1,018,396				-
Stockholders' equity:
	Common stock				23,233				21,837
	Additional paid-in capital				5,216,327				3,668,556
	Treasury stock				(150,849	)			(121,294	)
	Accumulated deficit				(1,321,100	)			(1,287,540	)
	Total Where Food Comes From, Inc. equity				3,767,611				2,281,559
	Non-controlling interest				300,431				287,995
Total Equity					4,068,042				2,569,554
Total liabilities and stockholders' equity				$	5,814,474			$	3,364,241