|By Marketwired .||
|May 5, 2014 07:00 AM EDT||
CASTLE ROCK, CO -- (Marketwired) -- 05/05/14 -- Where Food Comes From, Inc. (d.b.a. IMI Global, Inc.) (OTCQB: WFCF), the trusted resource for third-party verification of food production practices, today announced financial results for its first quarter ended March 31, 2014.
Revenue in the first quarter was $1,376,400, up 34% from $1,025,500 in the first quarter last year. The growth was due to an increase in the number of customers using the Company's verification services, which more than offset lower-than-expected revenue associated with pork audits resulting from the Porcine Epidemic Diarrhea Virus (PEDV). Verification services revenue increased 41% to $1,205,200 in the first quarter from $853,600 in the same quarter last year. Hardware revenue consisting of cattle ear tags increased 5% to $135,400 from $129,000 year over year. Labeling revenue declined 16% year-over-year to $35,800 from $42,900.
Gross profit in the first quarter was $557,500, or 41% of revenue, up slightly from gross profit of $533,800, or 52% or revenue, in the first quarter last year. Selling, general and administrative expenses in the first quarter increased to $831,200 from $625,500 in the same quarter last year due primarily to absorption of a full quarter of overhead from the Validus subsidiary, which was acquired in the third quarter of 2013.
Net loss attributable to Where Food Comes From, Inc. in the first quarter was $133,600, or $0.01 per share, compared with net loss of $58,400, or less than $0.01 cent per share, in the same quarter a year ago. The 2014 net loss was substantially attributable to lower-than-expected revenue due to the aforementioned PEDV issue.
"We followed a strong fourth quarter with continued revenue growth momentum in the first quarter of 2014," said John Saunders, chairman and CEO. "This growth reflects the successful execution of an M&A strategy designed to increase the size and scope of our solutions portfolio while mitigating risk associated with changing market dynamics such as Japan's easing of import regulations in 2013, which resulted in a significant decline in Japanese age and source verification revenue in 2013. It is also worth noting that first quarter revenue growth -- as well as profitability -- was adversely impacted by the USDA's decision to discourage on-farm pork audits until the Porcine Epidemic Diarrhea Virus subsides in order to reduce the risk of spread. We believe we will eventually resume on-farm pork audits once the PEDV situation resolves."
The Company will conduct a conference call on Monday, May 5, 2014, at 10:00 a.m. Mountain Time.
Call-in numbers for the conference call:
Domestic Toll Free: 1-877-941-6009
Conference ID: 4681760
A telephone replay of the conference call will be available through June 5, 2014, as follows:
Domestic Toll Free: 1-800-406-7325
Conference Code: 4681760
About Where Food Comes From, Inc.
Where Food Comes From, Inc. (d.b.a. IMI Global) is America's trusted resource for third party verification of food production practices. The Company supports more than 10,000 farmers, ranchers, processors, retailers and restaurants with a wide variety of value-added services through its IMI Global, International Certification Services, and Validus Verification Services units. In addition, the Company's Where Food Comes From® retail and restaurant labeling program utilizes the verification of product attributes to connect consumers to the sources of the food they purchase through product labeling and web-based information sharing and education. Go to www.wherefoodcomesfrom.com for additional information.
This news release contains "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, based on current expectations, estimates and projections that are subject to risk. Forward-looking statements are inherently uncertain, and actual events could differ materially from the Company's predictions. Important factors that could cause actual events to vary from predictions include those discussed in our SEC filings. Specifically, statements in this news release about industry leadership; the ability of the Company's M&A strategy to mitigate market risks, expectations to resume pork audits, and the demand for, and impact and efficacy of, the Company's and its subsidiaries' products and services on the marketplace are forward-looking statements that are subject to a variety of factors, including availability of capital, personnel and other resources; competition; governmental regulation of the agricultural industry; the market for beef and other commodities; and other factors. Financial results for the first quarter and twelve-month period are not necessarily indicative of future results. Readers should not place undue reliance on these forward-looking statements. The Company assumes no obligation to update its forward-looking statements to reflect new information or developments. For a more extensive discussion of the Company's business, please refer to the Company's SEC filings at www.sec.gov.
Where Food Comes From, Inc. Statements of Loss (unaudited) Three Months Ended March 31, 2014 2013 ------------- ------------- Revenues Service revenues $ 1,205,173 $ 853,606 Product sales 135,420 129,009 Other revenues 35,833 42,888 ------------- ------------- Total revenues 1,376,426 1,025,503 ------------- ------------- Costs of revenues Labor and other costs of services 717,171 405,792 Costs of products 101,709 85,889 ------------- ------------- Total costs of revenues 818,880 491,681 ------------- ------------- Gross profit 557,546 533,822 Selling, general and administrative expenses 831,154 625,515 ------------- ------------- Loss from operations (273,608) (91,693) Other expense (income): Interest expense 2,823 6,779 Other income, net (778) (447) ------------- ------------- Loss before income taxes (275,653) (98,025) Income tax benefit (78,368) (34,288) ------------- ------------- Net loss (197,285) (63,737) Net loss attributable to non-controlling interest 63,657 5,354 ------------- ------------- Net loss attributable to Where Food Comes From, Inc. $ (133,628) $ (58,383) ============= ============= Net loss per share: Basic $ (0.01) $ * ============= ============= Diluted $ (0.01) $ * ============= ============= Weighted average number of common shares outstanding: Basic 22,692,859 21,439,355 ============= ============= Diluted 22,692,859 21,439,355 ============= ============= * less than a penny ($0.01) per share Where Food Comes From, Inc. Balance Sheets March 31, December 31, 2014 2013 ------------- ------------- ASSETS (Unaudited) Current Assets: Cash and cash equivalents $ 876,601 $ 1,067,537 Accounts receivable, net 570,680 683,800 Prepaid expenses and other current assets 123,108 143,576 Deferred tax assets 190,184 190,184 ------------- ------------- Total current assets 1,760,573 2,085,097 Property and equipment, net 244,671 253,206 Intangible and other assets, net 1,751,074 1,716,115 Goodwill 1,279,762 1,279,762 Long-term deferred tax assets 558,662 480,294 ------------- ------------- Total assets $ 5,594,742 $ 5,814,474 ============= ============= LIABILITIES AND EQUITY Current liabilities: Accounts payable $ 285,399 $ 277,633 Accrued expenses and other current liabilities 47,385 56,091 Customer deposits 53,686 39,134 Deferred revenue 290,280 149,660 Short-term debt and current portion of notes payable 25,132 24,782 Current portion of capital lease obligations 4,228 4,173 ------------- ------------- Total current liabilities 706,110 551,473 Capital lease obligations, net of current portion 9,730 10,808 Notes payable and other long-term debt, net of current portion 159,302 165,755 ------------- ------------- Total liabilities 875,142 728,036 Contingently redeemable non-controlling interest 942,222 1,018,396 Equity: Common stock 23,240 23,233 Additional paid-in capital 5,359,715 5,216,327 Treasury stock (150,849) (150,849) Accumulated deficit (1,454,728) (1,321,100) ------------- ------------- Total Where Food Comes From, Inc. equity 3,777,378 3,767,611 Non-controlling interest - 300,431 ------------- ------------- Total equity 3,777,378 4,068,042 ------------- ------------- Total liabilities and equity $ 5,594,742 $ 5,814,474 ============= =============
Chief Executive Officer
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