Where Food es From(US:WFCF)2019-08-13 18:43Financial Data and Key Metrics Changes - Revenue grew 10% year-over-year to $4.9 million from $4.4 million, with all four revenue streams contributing to growth, including verification revenue and tag sales growth of 7% and 32% respectively [9] - Total gross profit increased 4% year-over-year, but gross margin declined due to fixed labor costs from two acquisitions in 2018 [10] - Operating income rose 67% year-over-year to $403,000, while net income attributable to the company grew 104% year-over-year to $361,000 from $177,000 [12] - Adjusted EBITDA increased 39% year-over-year to $824,000 from $593,000 [12] - For the six-month period, revenue grew 10% year-over-year to $8.8 million from $8.1 million, with all four revenue streams showing profitable growth [13] Business Line Data and Key Metrics Changes - Verification revenue and tag sales were up 4% and 50% respectively for the six-month period [13] - Software license maintenance and support revenue grew 14%, while software consulting revenue increased by 23% [9] Market Data and Key Metrics Changes - The beef verification business continues to lead in revenue growth, with increased activity related to China and the EU [20][21] - The reopening of the Chinese market has accelerated growth, and the U.S. beef access agreement with the EU is expected to increase demand for NHTC audits [21] Company Strategy and Development Direction - The company aims to leverage its diverse business mix and innovative service offerings to maintain market leadership in food group and verification standards [18] - The focus remains on beef verification, with expectations for continued growth driven by international market dynamics [36] - The company is also exploring opportunities in the hemp market, which is projected to grow significantly [29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the beef industry's growth potential, citing political dynamics and market opportunities [36] - The company has streamlined operations to handle increased workloads without significantly increasing human resources [32] - The hemp initiative is seen as a promising revenue opportunity, with expectations for substantial market growth [29] Other Important Information - The company generated $1.4 million in net cash from operations in the first half of 2019, up from $1.1 million in the same period last year [17] - Cash and cash equivalents grew to $2.9 million from $2 million at the end of 2018 [17] Q&A Session Summary Question: Discussion on SG&A decrease year-over-year - Management noted that investments in streamlining operations have created a scalable delivery model, allowing for higher workloads without increasing headcount [32] Question: Acceleration in verification revenue growth - Management highlighted that growth opportunities are primarily focused on beef, with expectations for continued revenue growth in the coming quarters [36] Question: Reverse stock split discussion - Management confirmed that a reverse stock split was approved but emphasized that it is not an obligation and no timetable has been set [44][45]