Revenue and Income - Verification and certification service revenue for the year ended December 31, 2024 increased approximately $1.1 million, or 5.9%, compared to 2023[126] - Product sales for the year ended December 31, 2024 decreased approximately $0.2 million, or 5.0%, compared to 2023, attributed to a decline in beef cow herd size[128] - Total revenues for the year ended December 31, 2024 were $25.746 million, compared to $25.135 million in 2023[124] - Net income for the year ended December 31, 2024, was approximately $2.1 million or $0.40 per share, a slight decrease from $2.2 million or $0.39 per share in 2023[137] - Dividend income from Progressive Beef, LLC for the year ended December 31, 2024 was $400,000, compared to $320,000 in 2023[134] Costs and Expenses - Costs of revenues for the verification and certification segment for the year ended December 31, 2024 were approximately $14.2 million compared to approximately $13.3 million in 2023[129] - Gross margin for the verification and certification segment for the year ended December 31, 2024 decreased to 41.9% compared to 43.4% in 2023[129] - Selling, general and administrative expenses for the verification and certification segment for the year ended December 31, 2024 increased approximately $0.7 million compared to 2023[130] - Professional services revenue for the year ended December 31, 2024 decreased approximately $0.3 million compared to 2023[131] - Gross margin for the professional services segment improved to 26.5% from 21.3% in 2023[132] Cash Flow and Working Capital - Cash and cash equivalents as of December 31, 2024, were approximately $2.0 million, down from $2.6 million in 2023; working capital decreased from approximately $3.2 million to $2.4 million[138] - Net cash provided by operating activities in 2024 was approximately $2.7 million, compared to $2.8 million in 2023, primarily due to a decline in gross margins in the Verification and Certification Segment[139] - Net cash used in investing activities during 2024 was approximately $0.2 million, a decrease from $0.6 million in 2023, with $0.2 million allocated for the acquisition of Blue Trace in 2023[140] - Net cash used in financing activities was approximately $3.2 million in 2024, down from $3.9 million in 2023, mainly for share repurchases[141] Deferred Revenue and Credit Facilities - Deferred revenue as of December 31, 2024, was approximately $1.7 million, up from $1.4 million in 2023, primarily related to annual certification for third-party audits[154] - The company has a revolving line of credit agreement providing for $75,080 in working capital, with an effective interest rate of 9.0% as of December 31, 2024[147] Industry and Market Conditions - The company is currently in a contraction phase of the cattle industry cycle, which began in 2014, with significant impacts expected from drought and pasture conditions[157] - The company plans to focus on diversification in product offerings and potential acquisitions to capitalize on growing consumer demand[146] Goodwill and Intangible Assets - As of December 31, 2024, the company had approximately $2.9 million of goodwill, with no impairment losses recognized during the year[171] - The company acquired trademarks/tradenames in the Validus acquisition, which were determined to no longer have an indefinite life and will now be amortized over their remaining useful life[181] - The excess of the purchase price over the fair value of net assets acquired in business combinations is recorded as goodwill[186] Accounting Policies and Valuation - The company implemented ASU 2023-08 effective January 1, 2024, requiring digital assets to be measured at fair value with changes recognized in net income each reporting period[184] - Digital assets were previously held as indefinite-lived intangible assets and were recorded at cost, net of impairment losses, as of December 31, 2023[185] - Business combinations are part of the company's growth strategy, with the purchase price allocated to tangible and intangible assets based on estimated fair values at the date of purchase[186] - The company uses various recognized valuation methods, including present value modeling, to determine the fair values of assets acquired and liabilities assumed in business combinations[187] - ROU assets and liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term[177] - The company has ownership and control over its digital assets, which are included in non-current assets on the balance sheet[182] - Indefinite-lived intangible assets are tested for impairment annually, or more frequently if circumstances indicate potential impairment[180] - The company evaluates the remaining useful life of intangible assets not being amortized each reporting period[179]

Core Insights - Where Food Comes From, Inc. (WFCF) reported a 2% increase in total revenue for 2024, reaching $25.7 million compared to $25.1 million in 2023, despite challenges in the beef sector due to herd contraction [4][9] - The company achieved a net income of $2.1 million, or $0.40 per diluted share, slightly down from $2.2 million, or $0.39 per diluted share in the previous year [10] - The company continued its stock buyback program, repurchasing 273,057 shares at a cost of $3.3 million, contributing to a total of $13.9 million returned to shareholders since the program's inception [5][11] Fourth Quarter Highlights - Total revenue for the fourth quarter was flat at $6.7 million, with verification and certification revenue slightly down to $5.4 million from $5.5 million [6][7] - Net income for the fourth quarter increased to $961,000, or $0.18 per diluted share, compared to $776,000, or $0.14 per diluted share in the same quarter of 2023, aided by a $345,000 gain in the fair market value of bitcoin [8][10] - Gross profit in the fourth quarter declined by 7% to $2.8 million from $3.0 million [8] Full Year Highlights - Gross profit for the full year increased slightly to $10.6 million from $10.5 million, while selling, general and administrative expenses rose to $8.4 million from $7.8 million [10] - Cash generated from operations was $2.7 million in 2024, down from $2.8 million in 2023 [10] - The company reported a decrease in cash and cash equivalents to $2.0 million at year-end 2024, compared to $2.6 million at the end of 2023 [19] Revenue Breakdown - Verification and certification services revenue for the full year increased by 6% to $20.6 million from $19.4 million, while product sales decreased by 5% to $3.8 million from $4.0 million [14] - Professional services revenue for the full year was down 19% to $1.4 million from $1.7 million [14]

Core Points - Where Food Comes From, Inc. (WFCF) will release its 2024 full year financial results on February 20, 2025, before market opens and will hold a conference call at 10:00 a.m. Mountain Time [1] - The company is recognized as a trusted resource for independent, third-party verification of food production practices in North America [1][2] - WFCF supports over 17,500 entities including farmers, ranchers, vineyards, wineries, processors, retailers, distributors, trade associations, consumer brands, and restaurants through various value-added services [2] Company Overview - Where Food Comes From, Inc. utilizes proprietary technology and patented business processes to verify food claims, optimize production practices, and enhance food supply chains with analytics and data-driven insights [2] - The company's units include IMI Global, Validus Verification Services, SureHarvest, WFCF Organic, and Postelsia, which collectively provide a range of verification and optimization services [2] - WFCF's retail and restaurant labeling program connects consumers to the sources of their food purchases, fostering meaningful consumer engagement for clients [2]

Core Insights - Where Food Comes From, Inc. (WFCF) reported accelerating growth in its Upcycled Certified® Program, which was acquired one year ago [1] - The Upcycled Certified program is the world's first and largest certification for the upcycled food chain, catering to environmentally conscious consumers [2] Industry Growth - In 2024, 105 companies were certified under the Upcycled Certified standard, diverting approximately 1.2 million tons of food waste, equivalent to 248 million bags of groceries [3][5] - The Upcycled Certified program has seen a 17% year-over-year increase in certified products, totaling 568 products as of 2024 [3][5] - The upcycled food industry is valued at $46 billion and is experiencing rapid growth, with a compound average annual growth rate of 77% for new food and beverage launches with upcycling claims from 2019 to 2023 [6] Consumer Trends - 62% of consumers are willing to pay more for products that combat food waste, and 70% show increased intent to purchase Upcycled Certified foods when the seal is present on packaging [10] - Upcycled Certified snacks grew by 41.6% in 2024, significantly outpacing the overall food and beverage industry's growth of just 1.4% during the same period [6] Company Strategy - WFCF has a first-to-market advantage with the Upcycled Certified program, creating a new revenue stream and aligning with its bundling strategy for certifications [4] - The company supports over 17,500 stakeholders in the food supply chain, providing a variety of certification services [8]

Core Viewpoint - Where Food Comes From, Inc. (WFCF) experienced a decline in share price following its Q3 2024 earnings report, reflecting broader market trends with a modest revenue growth despite challenges in certain segments [1][11]. Q3 Earnings & Revenue Performance - The company reported diluted earnings per share of 9 cents, a decrease of 30.8% from 13 cents in the same quarter last year [2]. - Total revenues for Q3 2024 were $7.1 million, up 1% from $7 million in the prior-year period, driven by a 2% increase in verification and certification services and a 9% rise in product revenues [2]. Segmental Performance - **Verification & Certification Segment**: Revenue grew 2% year over year to $5.5 million, supported by increased consumer demand for food verification, although growth was hindered by challenges in the beef verification market due to herd contraction [3]. - **Product Revenue**: This segment saw a 9% year-over-year increase to $1.3 million, primarily due to higher sales of cattle identification ear tags, although the smaller beef cow herd size limited further growth [4]. - **Professional Services Segment**: Revenues declined 32% to $0.3 million from $0.4 million in the prior-year quarter, reflecting lower demand for consulting and data solutions, but gross margin improved to 30.1% from 20.9% due to operational realignments [5]. Management Commentary - The company acknowledged challenges in the beef verification segment but noted opportunities arising from new USDA regulations requiring electronic tags for certain cattle classes, which could enhance participation in WFCF's programs and support long-term growth [6][7]. Factors Impacting Results - Gross profit decreased to $2.8 million from $2.9 million, with gross margin contracting from 41% to 39%, primarily due to higher costs in product revenues and verification services [8]. - Selling, general and administrative expenses rose 13% year over year to $2.2 million, driven by expanded marketing efforts, higher personnel costs, and increased travel expenses [8]. Cash & Debt - As of September 30, 2024, the company reported cash and cash equivalents of $2.8 million, up from $2.6 million at the end of 2023, with a minimal total debt of $2.71 million, reflecting prudent cash management [9]. Other Developments - In Q3, the company repurchased 66,620 shares of its common stock for $734,000, totaling 216,039 shares bought back in the first nine months of 2024, indicating a commitment to returning value to shareholders [10]. Summary of Performance - WFCF achieved modest revenue growth driven by its verification and product segments, despite facing challenges in professional services and the beef market dynamics. While profitability metrics declined, strategic initiatives and regulatory changes are anticipated to support long-term growth [11].

Financial Data and Key Metrics Changes - Total revenue in Q3 2024 increased slightly to $7.1 million from $7 million, with a 2% increase in verification and certification services to $5.5 million from $5.4 million year-over-year [4] - Gross profit in Q3 declined slightly to $2.8 million from $2.9 million, while SG&A expenses increased 13% year-over-year to $2.2 million from $1.9 million [4] - Net income in Q3 decreased 32% to $0.5 million or $0.09 per diluted share compared to $0.7 million or $0.13 per diluted share last year [4] - Adjusted EBITDA in Q3 was 29% lower at $0.8 million versus $1.2 million [4] Business Line Data and Key Metrics Changes - Verification and certification services revenue increased 9% to $15.2 million from $13.9 million year-over-year, while product revenue decreased 8% to $2.9 million from $3.1 million [5] - Professional services revenue declined to $0.3 million from $0.4 million year-over-year [4] Market Data and Key Metrics Changes - The company reported a solid balance sheet with no long-term debt and cash and cash equivalents increased 4% to $2.8 million from $2.6 million at the end of 2023 [5] - Cash generated from operations through nine months increased 6% to $2.8 million compared to $2.6 million in the same period last year [5] Company Strategy and Development Direction - The company is focusing on diversifying its services mix to compensate for the temporary slowdown in beef-related revenue due to persistent headwinds in the beef verification business [6] - Recent USDA regulations, including the animal disease traceability program, are expected to positively impact the company by increasing the addressable market for RFID tags and related services [8][9] - The strengthening organic enforcement rule is anticipated to enhance the company's organic business by increasing compliance requirements, which the company is well-positioned to address with its SOW Organic technology platform [10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the potential growth phase in the beef business due to the transition to electronic RFID tags, estimating an additional 10 million cattle will be tagged over the next year [8] - The company is confident in its ability to remain at the forefront of the industry, leveraging its innovative solutions to benefit agricultural producers and consumers [10] Other Important Information - The company continued its share buyback program, repurchasing 66,620 shares at a cost of $734,000 in Q3 [4] - Through the first nine months of 2024, the company bought back a total of 216,039 shares, including 135,838 shares as part of the ongoing buyback program [5] Q&A Session Summary - No specific questions or answers were documented in the provided content, as the call concluded with a thank you from management and an invitation to the next quarterly call [11][12]

Core Insights - Where Food Comes From, Inc. reported a 1% increase in total revenue for Q3 2024, reaching $7.1 million compared to $7.0 million in Q3 2023, despite a 32% decline in net income to $492,000 from $723,000 [1][4][5] Q3 Highlights - Verification and certification revenue rose 2% to $5.5 million from $5.4 million [1][4] - Product sales increased by 9% to $1.3 million from $1.2 million [1][4] - Adjusted EBITDA decreased by 29% to $0.8 million from $1.2 million [1][5] - The company repurchased 66,620 shares of stock in Q3 at a cost of $734,000 [1][6] Nine Month Highlights - Total revenue for the nine months ended September 30, 2024, increased by 4% to $19.1 million from $18.4 million [1][6] - Verification and certification revenue grew by 9% to $15.2 million from $13.9 million [1][6] - Product sales declined by 8% to $2.9 million from $3.1 million [1][6] - Net income decreased by 16% to $1.2 million, or $0.21 per diluted share, compared to $1.4 million, or $0.24 per diluted share, in the prior year [1][8] - Cash generated from operations increased by 6% to $2.8 million from $2.6 million [1][8] Management Commentary - The CEO noted that while growth rates for beef verification have slowed due to cyclical herd contraction, other service offerings have compensated as consumer demand for verifications across multiple food groups continues to rise [2] - The company is optimistic about enrolling more cattle into its verification programs due to a recent USDA rule requiring electronic tags for certain classes of cattle [3]

CASTLE ROCK, Colo., Nov. 08, 2024 (GLOBE NEWSWIRE) -- Where Food Comes From, Inc. (WFCF) (Nasdaq: WFCF), the most trusted resource for independent, third-party verification of food production practices in North America, today announced it will release its 2024 third quarter financial results before the market opens on Tuesday November 12, 2024, and conduct a conference call the same day at 10:00 a.m. Mountain Time (12:00 p.m. Eastern). Dial-in numbers for the conference call: Domestic Toll Free: 1-877-407- ...

Where Food Comes From Inc. (WFCF) reported mixed financial performance in second-quarter 2024. The company managed to increase its revenues despite challenging market conditions, driven by its diversified services portfolio. However, inflationary effects and cyclical herd contraction in the beef sector presented significant headwinds. CEO John Saunders emphasized the company's strategic focus on diversification and new initiatives. The Upcycled Food Certification initiative emerged as one of the fastest-gro ...

CASTLE ROCK, Colo, Aug. 06, 2024 (GLOBE NEWSWIRE) -- Where Food Comes From, Inc. (WFCF) (Nasdaq: WFCF), the most trusted resource for independent, third-party verification of food production practices in North America, today announced it will release its 2024 second quarter financial results before the market opens on Thursday, August 8, 2024, and conduct a conference call the same day at 10:00 a.m. Mountain Time (12:00 p.m. Eastern). Dial-in numbers for the conference call: Domestic Toll Free: 1-877-407-82 ...