Where Food es From(US:WFCF)2020-05-14 18:05Financial Data and Key Metrics Changes - Q1 revenue decreased slightly to $3.9 million from $4 million year-over-year [11] - Net loss attributable to the company increased to $241,000 from $143,000 year-over-year [13] - Generated $900,000 in net cash from operations in Q1, down from $1.3 million in the same quarter last year [13] - Cash and cash equivalents and short-term investments increased to $3.2 million, up 11% from $2.9 million at year-end [13] Business Line Data and Key Metrics Changes - Verification and certification services revenue remained flat at $2.8 million, impacted by social distancing and processing plant closures [11] - Product sales increased by 13% to $725,000 from $641,000 [11] - Software business revenue declined overall due to supply chain disruptions, with licensed maintenance and support down to $143,000 from $295,000, partially offset by an increase in software consulting services to $241,000 from $207,000 [12] Market Data and Key Metrics Changes - The beef demand remained strong, including from China, despite the pandemic's impact on the food supply chain [8] - The company noted a trend of consumers buying directly from producers, which could present new opportunities [20][21] Company Strategy and Development Direction - The company expanded its service portfolio by entering the seafood space through the acquisition of Postelsia Holdings, enhancing its geographical reach and customer base [16] - Launched the Where Food Comes From CARE program, focusing on sustainability solutions to meet consumer demand for sustainably produced products [17] - Management believes that the focus on sustainability, traceability, and animal welfare will be increasingly important in the post-COVID-19 world [41][42] Management's Comments on Operating Environment and Future Outlook - Management expressed uncertainty about the timeline for returning to normal operations due to ongoing government responses to the pandemic [10] - The company is optimistic about future growth opportunities, particularly as the economy reopens and food service sectors resume operations [57] - Management is monitoring potential bankruptcy risks among customers but remains confident in the diversified customer base [52] Other Important Information - The company maintains a strong balance sheet with no long-term debt and a working capital of $2.6 million [13][14] - The management is pursuing government programs available for small businesses, although they feel confident in their financial position without needing them [59][61] Q&A Session Summary Question: Can the company capitalize on the trend of consumers buying directly from producers? - Management acknowledged the trend and is working to offer producers access to online sales systems [21] Question: What is the status of the verification business amid delays? - Management indicated that some verifications are being rescheduled, while others are moving to remote virtual auditing [33][34] Question: How is the company addressing potential credit exposure and bankruptcies? - Management expressed confidence in their diversified customer base, although they are monitoring the situation closely [52] Question: Has the company taken advantage of any government programs? - Management confirmed they are pursuing available programs but feel strong enough not to rely on them [59][61]