SOURCE: Where Food Comes From

Where Food Comes From

August 04, 2014 08:00 ET

Where Food Comes From®, Inc. Reports Second Quarter Results

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

  • Second quarter revenue up 53% to record $1.9 million from $1.2 million last year

  • Six-month revenue up 43% to record $3.2 million from $2.3 million last year

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 second quarter and six-month period ended June 30, 2014.

"We are pleased to report record revenue and a return to profitability in the second quarter," said John Saunders, chairman and CEO. "Over the past three quarters we have achieved year over year revenue growth of 39%, 34% and 53%, respectively. This reflects a combination of organic growth and the continued execution of our M&A strategy, which has dramatically increased the number of food producers we serve. Based on growing consumer demand for transparency in food production practices as well as increased regulatory requirements placed on food producers, we anticipate demand for our expanding portfolio of verification solutions to grow as well, and we look forward to a strong finish to 2014."

Second Quarter Results
Total second quarter revenue increased 53% to $1,901,600 from revenue of $1,240,800 in the same quarter last year. Verification services revenue was up 52% to $1,619,500 from $1,063,600. Hardware revenue, consisting primarily of cattle identification tags, increased 56% to $236,100 from $151,900. Other revenue, primarily associated with the Company's Where Food Comes From labeling program, increased 45% to $46,100 from $25,300 year over year. The increased verification and hardware revenue resulted from significant year-over-year growth in the number producer customers served by the Company. Growth in Where Food Comes From labeling revenue resulted primarily from expansion of the program within the Company's large grocery customer, Heinen's Fine Foods.

Gross profit in the second quarter increased 34% to $884,600 from $659,500 year over year. Selling, general and administrative expenses in the second quarter totaled $798,600 and was reduced to 42% of revenue compared with SG&A of $564,800, or 46% of revenue, in the second quarter a year ago.

The Company returned to profitability in the second quarter with net income attributable to Where Food Comes From, Inc. of $53,400, or less than one cent per share, compared with net income of $54,900, or less than cent per share, in the same quarter a year ago.

Six-Month Results
Revenue for the first half of 2014 increased 43% to $3,247,600 from $2,266,300 in the same period last year. Verification revenue increased 46% to $2,794,200 from $1,917,200 year over year. Hardware revenue increased 32% to $371,500 from $280,900 a year ago. Revenue from Where Food Comes From labeling increased 20% to $81,900 from $68,200.

Gross profit in the first six months increased 21% to $1,442,200 from $1,193,300 year over year. Selling, general and administrative expense totaled $1,629,800 versus $1,190,300 last year and improved to 50% of revenue versus 53% a year ago.

Net loss attributable to Where Food Comes From, Inc. through six months was $80,200, or less than one cent per share, versus a net loss of $3,500, or less than one cent per share, in the prior year.

The Company generated $182,600 in net cash from operations through the first six months of 2014, up from $84,900 in the same period last year.

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: 1-888-466-4462
International: 1-719-785-1753
Conference ID: 3395016

Phone replay:
A telephone replay of the conference call will be available through September 3, 2014, as follows:
Domestic Toll Free: 1-888-203-1112
International: 1-719-457-0820
Conference Code: 3395016

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 for continued growth and a strong finish to 2014; 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   Six Month Ended  
  June 30,   June 30,  
  2014   2013   2014   2013  
                         
Revenues                        
  Service revenue $ 1,619,467   $ 1,063,593   $ 2,794,152   $ 1,917,200  
  Product sales   236,074     151,859     371,494     280,868  
  Other revenue   46,074     25,306     81,907     68,193  
    Total revenue   1,901,615     1,240,758     3,247,553     2,266,261  
Costs of revenue                        
  Labor and other costs of services   856,743     463,092     1,543,428     868,885  
  Costs of products   160,253     118,189     261,962     204,078  
    Total costs of revenue   1,016,996     581,281     1,805,390     1,072,963  
Gross profit   884,619     659,477     1,442,163     1,193,298  
Selling, general and administrative expenses   798,607     564,768     1,629,756     1,190,286  
Income (loss) from operations   86,012     94,709     (187,593 )   3,012  
Other expense (income):                        
  Interest expense   2,795     5,307     5,618     12,082  
  Other income, net   (275 )   (397 )   (1,051 )   (846 )
Income (loss) before income taxes   83,492     89,799     (192,160 )   (8,224 )
Income tax expense (benefit)   31,559     33,174     (46,809 )   (1,114 )
Net income (loss)   51,933     56,625     (145,351 )   (7,110 )
Net income (loss) attributable to non-controlling interest   1,510     (1,708 )   65,164     3,645  
Net income (loss) attributable to Where Food Comes From, Inc. $ 53,443   $ 54,917   $ (80,187 ) $ (3,465 )
Net income (loss) per share:                        
  Basic $ *   $ *   $ *   $ *  
  Diluted $ *   $ *   $ *   $ *  
Weighted average number of common shares outstanding:                        
Basic   22,695,810     21,555,835     22,694,343     21,497,916  
Diluted   22,907,849     21,867,453     22,694,343     21,497,916  
                         
* Less than a penny ($0.01) per share  
   
   
Where Food Comes From, Inc.            
Balance Sheets            
    (Unaudited)        
    June 30,     December 31,  
    2014     2013  
ASSETS                
Current Assets:                
  Cash and cash equivalents   $ 1,029,268     $ 1,067,537  
  Accounts receivable, net     743,512       683,800  
  Prepaid expenses and other current assets     118,073       143,576  
  Deferred tax assets     83,625       190,184  
    Total current assets     1,974,478       2,085,097  
Property and equipment, net     254,773       253,206  
Intangible assets, net     1,719,675       1,716,115  
Other long-term assets, net     16,000       -  
Goodwill     1,279,762       1,279,762  
Long-term deferred tax assets     633,662       480,294  
Total assets   $ 5,878,350     $ 5,814,474  
                 
LIABILITIES AND SHAREHOLDERS' EQUITY                
Current liabilities:                
  Accounts payable   $ 391,825     $ 277,633  
  Accrued expenses and other current liabilities     53,534       56,091  
  Customer deposits     58,963       39,134  
  Deferred revenue     290,441       149,660  
  Short-term debt and current portion of notes payable     25,491       24,782  
  Current portion of capital lease obligations     4,284       4,173  
    Total current liabilities     824,538       551,473  
Capital lease obligations, net of current portion     8,638       10,808  
Notes payable and other long-term debt, net     150,583       165,755  
Total liabilities     983,759       728,036  
Contingently redeemable non-controlling interest     940,712       1,018,396  
Stockholders' equity:                
  Common stock     23,250       23,233  
  Additional paid-in capital     5,382,765       5,216,327  
  Treasury stock     (150,849 )     (150,849 )
  Deposit on stock subscription     100,000       -  
  Accumulated deficit     (1,401,287 )     (1,321,100 )
  Total Where Food Comes From, Inc. equity     3,953,879       3,767,611  
  Non-controlling interest     -       300,431  
Total Equity     3,953,879       4,068,042  
Total liabilities and stockholders' equity   $ 5,878,350     $ 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