Where Food Comes From(R), 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