NASDAQ:WFCF Where Food Comes From Q2 2023 Earnings Report $11.02 -0.17 (-1.52%) Closing price 05/5/2025 03:50 PM EasternExtended Trading$11.48 +0.46 (+4.14%) As of 05/5/2025 04:07 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings History Where Food Comes From EPS ResultsActual EPS$0.09Consensus EPS N/ABeat/MissN/AOne Year Ago EPSN/AWhere Food Comes From Revenue ResultsActual Revenue$6.13 millionExpected RevenueN/ABeat/MissN/AYoY Revenue GrowthN/AWhere Food Comes From Announcement DetailsQuarterQ2 2023Date8/10/2023TimeN/AConference Call DateThursday, August 10, 2023Conference Call Time12:00PM ETConference Call ResourcesConference Call AudioConference Call TranscriptPress Release (8-K)Quarterly Report (10-Q)Earnings HistoryCompany ProfilePowered by Where Food Comes From Q2 2023 Earnings Call TranscriptProvided by QuartrAugust 10, 2023 ShareLink copied to clipboard.There are 4 speakers on the call. Operator00:00:01Greetings, and welcome to Where Food Comes From Second Quarter Earnings Conference Call. At this time, all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. I would now like to turn the conference over to your Mr. Operator00:00:24Jay Fiverr, thank you. You may begin. Speaker 100:00:28Good morning, and welcome to Where Food Comes From 2023 Second Quarter Earnings Call. Joining me on the call today are CEO, John Saunders President, Leanne Saunders and Chief Financial Officer, Danette Henning. During this call, we'll make forward looking statements based on current expectations, estimates and projections that are subject to risk. Statements about current and future financial performance, growth strategy, customers, business opportunities, market acceptance of our products and Listeners should not place undue reliance on these statements as there are many factors that could cause Actual results could differ materially from our forward looking statements. We encourage you to review our publicly filed documents as well as our news releases and website for more information. Speaker 100:01:15Today, we'll also discuss adjusted EBITDA, a non GAAP financial measure provided as a complement to GAAP results. Please refer to today's earnings release for important disclosures regarding non GAAP measures. I'll now turn the call over to John Saunders. Speaker 200:01:32Good morning and thanks for joining the call today. This morning, we announced our Q2 financial results for the period ended June 30, 2023. We were very pleased with the results, following as they did a challenging Q1 in which we faced a confluence of headwinds that negatively impacted both our Top and bottom lines. The strong results we delivered in Q2 underscore the resiliency of our unique business model. We have by far the industry's most expansive solutions portfolio and are able to provide a level of value that fosters customer loyalty and high customer retention rates. Speaker 200:02:12Going forward, we may experience a continuation of certain headwinds over the next several quarters, in the area of inflationary pressures and cyclical cattle trends. But again, we believe our diversification and dominant position in the beef industry combined with the impact of new solutions coming online, will keep us on a path of long term sustainable growth and profitability. Now to our Q2 results. Revenue in the 2nd quarter increased 15% to $6,100,000 from $5,300,000 in the same quarter last year. That growth included a 21% increase in core verification and certification revenue and a 7% increase in product sales, partially offset by a 16% decline in consulting revenue. Speaker 200:02:58Higher revenue and a stable expense This led to a 140% increase in net income to $532,000 or $0.09 per diluted share from $222,000 or $0.04 per diluted share in the Q2 last year. Adjusted EBITDA in the quarter totaled $917,000 up 61% from $570,000 in the year ago second quarter. The strong Q2 performance helped us make up some ground on our year end our year to date numbers. 6 month revenue pulled nearly flat at 11 point $4,000,000 versus $11,500,000 last year. You'll recall that the year ago total included a non recurring $850,000 consulting fee Booked in the Q1 of 2022. Speaker 200:03:49Absent that on an apples to apples basis, 6 month revenue this year would have been well ahead of prior year levels. Again, verification and certification revenue led the way with a 11% growth year over year. Net income at the midyear point was $653,000 or $0.11 per diluted versus $719,000 or $0.12 per diluted share for the same period last year. Adjusted EBITDA was $1,300,000 versus $1,500,000 We generated $1,300,000 in cash from operations year to And closed the quarter with $3,400,000 in cash and cash equivalents, which was down from $4,400,000 at year end due to the continuation of our stock repurchase Speaking of which, during the Q2, we bought back $836,000 of stock, raising our year to date total repurchases More than $2,000,000 Over the past 10 quarters, we have returned approximately $7,500,000 in value to stockholders through buybacks and a special dividend. The Board intends to continue considering buybacks and other value creating measures for the foreseeable future. Speaker 200:05:03Turning to some business highlights, you've often heard me speak about the diversity of our business model and the resulting benefits that accrue to us as a company and to our customers. The breadth and depth of our solutions portfolio is what sets us apart and what is responsible for the wide moat we have built around our business. We have been very busy this year expanding on what was already far and away the industry's largest solution set. In the Q1, one of our long term customers, certified Piedmontese beef, became the 1st brand to be certified to the Paleo Flex Diet, which is a relatively new standard of the Paleo Diet that is exclusively administered by Where Food Comes From. In the Q2, we were named exclusive third party verify for the Bee Friendly Farming Certification, a program that helps farmers and ranchers protect Critical pollinators through implementation of regenerative policies within their operations. Speaker 200:06:03With these two additions, Where Food Comes From and its divisions now certify customers to 56 different standards. This diversity affords us a distinct competitive advantage and it positions us as a true one stop shop able to offer customers convenience and price advantages through the bundling of multiple verification services. On a related note, in the Q2, we continued to advance our aquaculture initiative through an investment in the seafood traceability company BlueTrace, a privately held tech company that helps players in the North American shellfish industry We are now collaborating with BlueTrace to strengthen our respective aquaculture efforts. BlueTrace is currently focused on the North American seafood But our aquaculture initiative is very much geared towards global opportunities. The cornerstone of this effort is our fish care sustainability standard, which helps seafood producers adhere to higher standards to care for seafood products, employees and the environment. Speaker 200:07:15We are making steady inroads with this project, particularly as it pertains to shrimp in Asian markets where the majority of shrimp consumed in North America is farmed, but where less than 5% of producers are compliant with any broadly recognized certification. We're still in the early stages of this effort, but we believe it holds excellent potential to grow into a meaningful revenue stream over time. So in conclusion, with Another good quarter behind us, we continue to execute our business plan and look forward to talking to you following our Q3. Thank you again for joining us on the call today. Operator, you may open the call to questions. Operator00:08:16One moment please while we poll for question. Our first question comes from John Noahson. Please proceed with your question. Speaker 300:08:28Hey, good morning and thanks for taking my call. I was just curious, Shrimp interests me a lot, because I know a lot of them do come from Asia. How is that going to work in terms of you guys certifying Those, are you going to have to build out a lot of measurement services over in Asia? And Does that change your overall growth rate of the company and given the TAM there? And do you think it will increase your Speaker 200:09:06In 2022 2021, I'm sorry, we acquired Pistelsia. Pistelsia has had a large footprint In Southeast Asia through a program called ASIC, the Asian Seafood Innovation Consortium. That program has been around for about 15 years, John, and they've there's a number of different Certification bodies over there that we've worked with in the past that we're evaluating using in addition to creating our own Structure, but I think one of the things that we really believe is an opportunity there is to partner or potentially acquire Certification opportunities and businesses that currently exist. So we will have a little bit different Evolution of the fish care standard and specifically the shrimp care standard in Southeast Asia, because it's A global opportunity for us and it's a new growth strategy for us, but we're very excited about the potential we think that It has some of the same dynamics of the cattle industry in the United States, which is really a key driver for us And that there's a lot of fragmentation currently in the business. There's a lot of different types of production systems. Speaker 200:10:31So we're very excited about that. The forecast, I would say, is probably still 12 months to 24 months away for us Before we really start to understand the trends and where it's coming from, but it's but there is no doubt, it's a huge growth opportunity for us And there's so many consumers here in the United States and around the world that are looking for more information around shrimp. And I'll kind of finish with this and back to the Blue Trace comment. One of the things that's lacking in shrimp, you probably know this John, is there's really no There is no true traceability related to where the shrimp is coming from. So we see that the opportunity for sustainable Certification is there, but we really believe that the core opportunity is just providing potentially with BlueTrace or with other technologies to create a traceability system within the shrimp industry. Speaker 200:11:28And that's kind of what we're tackling right now, just trying to figure out that. So you have to know where it comes from before you can really But great question and hopefully you get some of my excitement about it because it's an industry that we think there's a lot of Operator00:12:09At this point, I'd like to turn the call back over to management for closing comments. Speaker 200:12:14Well, once again, thank you all for your participation. Operator00:12:28We thank you for your participation.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallWhere Food Comes From Q2 202300:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsPress Release(8-K)Quarterly report(10-Q) Where Food Comes From Earnings HeadlinesWhere Food Comes From, Inc. Schedules 2025 First Quarter Earnings CallMay 5 at 12:29 PM | investing.comWhere Food Comes From, Inc. Schedules 2025 First Quarter Earnings CallMay 5 at 12:00 PM | globenewswire.comWatch This Robotics Demo Before July 23rdJeff Brown, the tech legend who picked shares of Nvidia in 2016 before they jumped by more than 22,000%... Just did a demo of what Nvidia’s CEO said will be "the first multitrillion-dollar robotics industry."May 6, 2025 | Brownstone Research (Ad)Where Food Comes From, Inc. (NASDAQ:WFCF) Short Interest Down 32.9% in AprilMay 1, 2025 | americanbankingnews.comWhere Food Comes From Inc (WFCF) Q4 2024 Earnings Call Highlights: Navigating Challenges and ...April 21, 2025 | gurufocus.comWhere Food Comes From's (NASDAQ:WFCF) investors will be pleased with their decent 52% return over the last five yearsMarch 10, 2025 | uk.finance.yahoo.comSee More Where Food Comes From Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Where Food Comes From? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Where Food Comes From and other key companies, straight to your email. Email Address About Where Food Comes FromWhere Food Comes From (NASDAQ:WFCF), together with its subsidiaries, operates as a third-party food verification company in North America. The company operates through Verification and Certification, and Professional Services segments. It conducts on-site and desk audits to verify that claims being made about livestock, food, other specialty crops, and agricultural and aquaculture products are accurate, as well as offers Where Food Comes From Source Verified retail and restaurant labeling program, which connects consumers directly to the source of the food they purchase through product labeling, and web-based information sharing and education. It also offers professional services and technology solutions; verification solutions; and consulting services, as well as sells hardware. The company serves beef and pork packers, organic producers and processors, and specialty retail chains. The company was formerly known as Integrated Management Information, Inc. and changed its name to Where Food Comes From, Inc. in December 2012. Where Food Comes From, Inc. was founded in 1996 and is based in Castle Rock, Colorado.View Where Food Comes From ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Is Reddit Stock a Buy, Sell, or Hold After Earnings Release?Warning or Opportunity After Super Micro Computer's EarningsAmazon Earnings: 2 Reasons to Love It, 1 Reason to Be CautiousRocket Lab Braces for Q1 Earnings Amid Soaring ExpectationsMeta Takes A Bow With Q1 Earnings - Watch For Tariff Impact in Q2Palantir Earnings: 1 Bullish Signal and 1 Area of ConcernVisa Q2 Earnings Top Forecasts, Adds $30B Buyback Plan Upcoming Earnings Fortinet (5/7/2025)ARM (5/7/2025)DoorDash (5/7/2025)AppLovin (5/7/2025)MercadoLibre (5/7/2025)Lloyds Banking Group (5/7/2025)Manulife Financial (5/7/2025)Novo Nordisk A/S (5/7/2025)Uber Technologies (5/7/2025)Johnson Controls International (5/7/2025) Get 30 Days of MarketBeat All Access for Free Sign up for MarketBeat All Access to gain access to MarketBeat's full suite of research tools. 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There are 4 speakers on the call. Operator00:00:01Greetings, and welcome to Where Food Comes From Second Quarter Earnings Conference Call. At this time, all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. I would now like to turn the conference over to your Mr. Operator00:00:24Jay Fiverr, thank you. You may begin. Speaker 100:00:28Good morning, and welcome to Where Food Comes From 2023 Second Quarter Earnings Call. Joining me on the call today are CEO, John Saunders President, Leanne Saunders and Chief Financial Officer, Danette Henning. During this call, we'll make forward looking statements based on current expectations, estimates and projections that are subject to risk. Statements about current and future financial performance, growth strategy, customers, business opportunities, market acceptance of our products and Listeners should not place undue reliance on these statements as there are many factors that could cause Actual results could differ materially from our forward looking statements. We encourage you to review our publicly filed documents as well as our news releases and website for more information. Speaker 100:01:15Today, we'll also discuss adjusted EBITDA, a non GAAP financial measure provided as a complement to GAAP results. Please refer to today's earnings release for important disclosures regarding non GAAP measures. I'll now turn the call over to John Saunders. Speaker 200:01:32Good morning and thanks for joining the call today. This morning, we announced our Q2 financial results for the period ended June 30, 2023. We were very pleased with the results, following as they did a challenging Q1 in which we faced a confluence of headwinds that negatively impacted both our Top and bottom lines. The strong results we delivered in Q2 underscore the resiliency of our unique business model. We have by far the industry's most expansive solutions portfolio and are able to provide a level of value that fosters customer loyalty and high customer retention rates. Speaker 200:02:12Going forward, we may experience a continuation of certain headwinds over the next several quarters, in the area of inflationary pressures and cyclical cattle trends. But again, we believe our diversification and dominant position in the beef industry combined with the impact of new solutions coming online, will keep us on a path of long term sustainable growth and profitability. Now to our Q2 results. Revenue in the 2nd quarter increased 15% to $6,100,000 from $5,300,000 in the same quarter last year. That growth included a 21% increase in core verification and certification revenue and a 7% increase in product sales, partially offset by a 16% decline in consulting revenue. Speaker 200:02:58Higher revenue and a stable expense This led to a 140% increase in net income to $532,000 or $0.09 per diluted share from $222,000 or $0.04 per diluted share in the Q2 last year. Adjusted EBITDA in the quarter totaled $917,000 up 61% from $570,000 in the year ago second quarter. The strong Q2 performance helped us make up some ground on our year end our year to date numbers. 6 month revenue pulled nearly flat at 11 point $4,000,000 versus $11,500,000 last year. You'll recall that the year ago total included a non recurring $850,000 consulting fee Booked in the Q1 of 2022. Speaker 200:03:49Absent that on an apples to apples basis, 6 month revenue this year would have been well ahead of prior year levels. Again, verification and certification revenue led the way with a 11% growth year over year. Net income at the midyear point was $653,000 or $0.11 per diluted versus $719,000 or $0.12 per diluted share for the same period last year. Adjusted EBITDA was $1,300,000 versus $1,500,000 We generated $1,300,000 in cash from operations year to And closed the quarter with $3,400,000 in cash and cash equivalents, which was down from $4,400,000 at year end due to the continuation of our stock repurchase Speaking of which, during the Q2, we bought back $836,000 of stock, raising our year to date total repurchases More than $2,000,000 Over the past 10 quarters, we have returned approximately $7,500,000 in value to stockholders through buybacks and a special dividend. The Board intends to continue considering buybacks and other value creating measures for the foreseeable future. Speaker 200:05:03Turning to some business highlights, you've often heard me speak about the diversity of our business model and the resulting benefits that accrue to us as a company and to our customers. The breadth and depth of our solutions portfolio is what sets us apart and what is responsible for the wide moat we have built around our business. We have been very busy this year expanding on what was already far and away the industry's largest solution set. In the Q1, one of our long term customers, certified Piedmontese beef, became the 1st brand to be certified to the Paleo Flex Diet, which is a relatively new standard of the Paleo Diet that is exclusively administered by Where Food Comes From. In the Q2, we were named exclusive third party verify for the Bee Friendly Farming Certification, a program that helps farmers and ranchers protect Critical pollinators through implementation of regenerative policies within their operations. Speaker 200:06:03With these two additions, Where Food Comes From and its divisions now certify customers to 56 different standards. This diversity affords us a distinct competitive advantage and it positions us as a true one stop shop able to offer customers convenience and price advantages through the bundling of multiple verification services. On a related note, in the Q2, we continued to advance our aquaculture initiative through an investment in the seafood traceability company BlueTrace, a privately held tech company that helps players in the North American shellfish industry We are now collaborating with BlueTrace to strengthen our respective aquaculture efforts. BlueTrace is currently focused on the North American seafood But our aquaculture initiative is very much geared towards global opportunities. The cornerstone of this effort is our fish care sustainability standard, which helps seafood producers adhere to higher standards to care for seafood products, employees and the environment. Speaker 200:07:15We are making steady inroads with this project, particularly as it pertains to shrimp in Asian markets where the majority of shrimp consumed in North America is farmed, but where less than 5% of producers are compliant with any broadly recognized certification. We're still in the early stages of this effort, but we believe it holds excellent potential to grow into a meaningful revenue stream over time. So in conclusion, with Another good quarter behind us, we continue to execute our business plan and look forward to talking to you following our Q3. Thank you again for joining us on the call today. Operator, you may open the call to questions. Operator00:08:16One moment please while we poll for question. Our first question comes from John Noahson. Please proceed with your question. Speaker 300:08:28Hey, good morning and thanks for taking my call. I was just curious, Shrimp interests me a lot, because I know a lot of them do come from Asia. How is that going to work in terms of you guys certifying Those, are you going to have to build out a lot of measurement services over in Asia? And Does that change your overall growth rate of the company and given the TAM there? And do you think it will increase your Speaker 200:09:06In 2022 2021, I'm sorry, we acquired Pistelsia. Pistelsia has had a large footprint In Southeast Asia through a program called ASIC, the Asian Seafood Innovation Consortium. That program has been around for about 15 years, John, and they've there's a number of different Certification bodies over there that we've worked with in the past that we're evaluating using in addition to creating our own Structure, but I think one of the things that we really believe is an opportunity there is to partner or potentially acquire Certification opportunities and businesses that currently exist. So we will have a little bit different Evolution of the fish care standard and specifically the shrimp care standard in Southeast Asia, because it's A global opportunity for us and it's a new growth strategy for us, but we're very excited about the potential we think that It has some of the same dynamics of the cattle industry in the United States, which is really a key driver for us And that there's a lot of fragmentation currently in the business. There's a lot of different types of production systems. Speaker 200:10:31So we're very excited about that. The forecast, I would say, is probably still 12 months to 24 months away for us Before we really start to understand the trends and where it's coming from, but it's but there is no doubt, it's a huge growth opportunity for us And there's so many consumers here in the United States and around the world that are looking for more information around shrimp. And I'll kind of finish with this and back to the Blue Trace comment. One of the things that's lacking in shrimp, you probably know this John, is there's really no There is no true traceability related to where the shrimp is coming from. So we see that the opportunity for sustainable Certification is there, but we really believe that the core opportunity is just providing potentially with BlueTrace or with other technologies to create a traceability system within the shrimp industry. Speaker 200:11:28And that's kind of what we're tackling right now, just trying to figure out that. So you have to know where it comes from before you can really But great question and hopefully you get some of my excitement about it because it's an industry that we think there's a lot of Operator00:12:09At this point, I'd like to turn the call back over to management for closing comments. Speaker 200:12:14Well, once again, thank you all for your participation. Operator00:12:28We thank you for your participation.Read morePowered by