Where Food es From(WFCF) - 2024 Q3 - Earnings Call Transcript

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]