Attached files
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| 8-K - CURRENT REPORT - Where Food Comes From, Inc. | wfcf-8k_080414.htm |
| EX-99.1 - TRANSCRIPT - Where Food Comes From, Inc. | ex99-2.htm |
Where Food Comes From, Inc. 8-K
Exhibit 99.1
FOR IMMEDIATE RELEASE NEWS
August 4, 2014 OTCQB: WFCF
Where Food Comes From®, Inc. Reports
Second Quarter Results
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
CASTLE ROCK, Colo. – 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.
Company Contacts:
John Saunders
Chief Executive Officer
303-895-3002
Jay Pfeiffer
Pfeiffer High Investor Relations, Inc.
303-393-7044
Where Food Comes From, Inc.
Statements of Income (Loss)
(Unaudited)
| Three Months Ended | Six Months 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 | 2014 | |||||||
| 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 |