Where Food es From(US:WFCF)2024-02-15 18:39Financial Data and Key Metrics Changes - Total revenue in Q4 2023 increased by 10% to $6.7 million from $6.1 million in Q4 2022 [5] - Net income in Q4 increased by 58% to $776,000 or $0.14 per diluted share compared to $490,000 or $0.08 per diluted share in Q4 2022 [6] - Adjusted EBITDA in Q4 increased by 31% to $1.3 million from $1 million [7] - Total revenue for 2023 increased slightly to $25.1 million from $24.8 million in 2022 [8] - Net income for the year increased by 8% to $2.2 million or $0.39 per diluted share compared to $2 million or $0.33 per diluted share in the prior year [9] - Cash and cash equivalents balance at year-end 2023 declined to $2.6 million from $4.4 million in 2022 [10] Business Line Data and Key Metrics Changes - Verification and certification revenue in Q4 was up 17% to $5.5 million from $4.7 million [5] - Product revenue in Q4 remained flat at $0.9 million [5] - For the full year, Verification Services revenue increased by 10% to $19.4 million from $17.6 million, while product revenue decreased by 8% to $4 million from $4.4 million [8] Market Data and Key Metrics Changes - The company experienced inflationary pressures and cyclical cattle trends impacting revenue and profitability throughout the year [4] - The U.S. cattle industry is critical to the company's business, and it is expected to face a cattle cycle every seven to eight years [30] Company Strategy and Development Direction - The company aims to expand its business mix with valuable programs and capabilities, focusing on consumer branding and certification standards [11][32] - Recent acquisitions, such as the Upcycled Certified program, are expected to become a meaningful component of the revenue mix over time [16][18] - The company is actively pursuing new standards and programs to attract new customers, particularly in the dairy auditing and organic certification sectors [28][29] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the strong fourth quarter performance, which helped offset year-long headwinds [4] - The company anticipates continued growth driven by new regulations and standards in the industry [29] - There is a focus on increasing visibility and consumer awareness of the company's certification programs [32] Other Important Information - The company bought back more than $3.9 million of its shares in 2023 [11] - The company generated $2.8 million in cash from operations in 2023, compared to $2.7 million in 2022 [10] Q&A Session Summary Question: What led to the growth this quarter and future aspirations? - Management noted that new trends, such as Prop 12 and changes in organic certification, contributed to the growth in Q4 [28][29] Question: Is the opportunity set more with retail or restaurants? - Management indicated that both retail and food service opportunities are important, with retail being crucial for making a significant impact [33][34]