WFCF Where Food Comes From Inc

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): February 20, 2025

 

WHERE FOOD COMES FROM, INC.

(Exact Name of Registrant as Specified in its Charter)

 

Colorado		001-40314		43-1802805
(State or Other Jurisdiction of Incorporation)		(Commission File Number)		(I.R.S. Employer Identification No.)

 

202 6th Street, Suite 400
Castle Rock, Colorado		80104
(Address of Principal Executive Offices)		(Zip Code)

 

(303) 895-3002

(Registrant’s Telephone Number, Including Area Code)

 

Not applicable

(Former name or former address, if changed since last report.)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, $0.001 par value		WFCF		The NASDAQ Stock Market LLC

 

 

 

Item 2.02 Results of Operations and Financial Condition

 

Reference is made to the Where Food Comes From, Inc. (the “Company”) press release on February 20, 2025 and conference call transcript, attached hereto as Exhibits 99.1 and 99.2, respectively, and incorporated by reference herein (including, without limitation, the information set forth in the cautionary statement contained in the press release and conference call transcript), relating to the Company’s financial results for the three months and full year ended December 31, 2024.

 

Item 9.01 Financial Statements and Exhibits

 

(d) Exhibits

 

	Exhibit No.		Description
	99.1		Press Release issued and dated February 20, 2025
	99.2		Transcript for February 20, 2025 conference call
	104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

	WHERE FOOD COMES FROM, INC.
	(Registrant)
	By:	/s/ Dannette Henning
Date: February 24, 2025		Dannette Henning
		Chief Financial Officer

 

 

Exhibit 99.1

 

Where Food Comes From, Inc. Reports 2024 Fourth Quarter and Full Year Financial Results

 

Fourth Quarter Highlights – 2024 vs. 2023

 

	●	Verification and certification revenue: $5.4M vs. $5.5M
	●	Product sales: $922,000 vs. $871,000
	●	Total revenue flat at $6.7M
	●	Net income: $961,000 vs. $776,000
	●	Diluted EPS: $0.18 vs. $0.14
	●	Stock buybacks: 57,018 shares

 

Full Year Highlights – 2024 vs. 2023

 

	●	Verification and certification revenue: $20.6M vs. $19.4M
	●	Product sales: $3.8M vs. $4.0
	●	Total revenue: $25.7M vs. $25.1M
	●	Net income: $2.1M vs. $2.2M
	●	Diluted EPS: $0.40 vs. $0.39
	●	Cash generated from operations: $2.7M vs. $2.8M
	●	Cash & cash equivalents: $2.0 million vs. $2.6 million at 2023 year-end
	●	Stock buybacks and private repurchases: 273,057 shares
	●	Total buybacks since plan inception plus private purchases: 1,191,636 shares at purchase price of $13.0 million, or approximately $10.92 per share
	●	Total value returned to stockholders via buybacks, private purchases and a special dividend over past 21 quarters: $13.9M

 

CASTLE ROCK, Colo., Feb. 20, 2025 (GLOBE NEWSWIRE) — Where Food Comes From, Inc. (WFCF) (Nasdaq: WFCF), the most trusted resource for independent, third-party verification of food production practices in North America, today announced financial results for its fourth quarter and full year ended December 31, 2024.

 

“In spite of cyclical herd contraction that significantly impacted our beef business throughout the year, we grew revenue by 2% to $25.7 million in 2024 and delivered solid net income of $2.1 million, or $0.40 per share,” said John Saunders, chairman and CEO. “Lower volumes for beef source and age verifications and related hardware sales were more than offset by growth of our CARE Certified and Upcycled programs and growing demand for other verification services in the areas of poultry, organic, dairy, and CPG. Our gross margins remained stable year over year, but profitability was impacted by a $530,000 increase in SG&A to support stepped-up marketing initiatives, retain key personnel and add technical talent to continue enhancing our technology platform, and expand our verification portfolio. Net income also benefitted from a $345,000 gain in fair market value of our $178,000 investment in bitcoin. Our average purchase price was $25,400 per unit compared to the December 31, 2024, closing price of $93,400.

 

“In 2024 we continued to return value to shareholders, taking another 273,057 shares out of the float through buybacks and private purchases at a cost of $3.3 million,” Saunders added. “Since we began our stock buyback program in the fourth quarter of 2019, we have returned $13.9 million in value to shareholders through a combination of buybacks, private purchases and a special dividend. During that time, we reduced the float by approximately 1.2 million shares, with 73% of that total coming over the last three years. We expect to continue taking advantage of solid cash flows to further reduce our float, while at the same time invest in new programs and services designed to strengthen our beef business and accelerate the growth of other service offerings.”

 

Fourth Quarter Results – 2024 vs. 2023

 

Total revenue in the fourth quarter ended December 31, 2024, was flat at $6.7 million.

 

	●	Verification and certification services revenue was down 2% at $5.4 million vs. $5.5 million.
	●	Product revenue increased 6% to $922,000 from $871,000.
	●	Professional services revenue was $360,000 vs. $391,000.

 

Gross profit in the fourth quarter declined 7% to $2.8 million from $3.0 million.

 

 

Selling, general and administrative expense decreased slightly to $2.0 million from $2.1 million.

 

Net income increased to $961,000, or $0.18 per diluted share, from $776,000, or $0.14 per diluted share, due to a $345,000 gain in the fair market value of bitcoin holdings.

 

The Company bought back 57,018 shares of its common stock in the fourth quarter.

 

Full Year Results – 2024 vs. 2023

 

Total revenue for the full year increased 2% to $25.7 million from $25.1 million in the same period last year.

 

	●	Verification and certification services were up 6% to $20.6 million from $19.4 million.
	●	Product revenue decreased 5% to $3.8 million from $4.0 million.
	●	Professional services revenue was down 19% to $1.4 million from $1.7 million.

 

Gross profit for the full year was up slightly to $10.6 million from $10.5 million.

 

SG&A expense increased to $8.4 million from $7.8 million due primarily to higher marketing, personnel and travel expenses.

 

Net income for the year was down slightly at $2.1 million, or $0.40 per diluted share, vs. net income of $2.2 million, or $0.39 per diluted share, in 2023.

 

The Company generated $2.7 million in cash from operations in 2024 vs. $2.8 million in 2024.

 

For the full year, including stock buybacks and private transactions, the Company repurchased a total of 273,057 shares of its stock for $3,269,755, or $11.97 per share.

 

The Company will conduct a conference call today at 10:00 a.m. Mountain Time.

 

Call-in numbers for the conference call:

 

Domestic Toll Free: 1-877-407-8289

International: 1-201-689-8341

Conference Code: 13751753

 

Phone replay:

 

A telephone replay of the conference call will be available through March 6, 2025, as follows:

Domestic Toll Free: 1-877-660-6853

International: 1-201-612-7415

Conference Code: 13751753

 

About Where Food Comes From, Inc.

 

Where Food Comes From, Inc. is America’s trusted resource for third party verification of food production practices. Through proprietary technology and patented business processes, the Company estimates that it supports more than 17,500 farmers, ranchers, vineyards, wineries, processors, retailers, distributors, trade associations, consumer brands and restaurants with a wide variety of value-added services. Through its IMI Global, Validus Verification Services, SureHarvest, WFCF Organic, and Postelsia units, Where Food Comes From solutions are used to verify food claims, optimize production practices and enable food supply chains with analytics and data driven insights. In addition, the Company’s Where Food Comes From® retail and restaurant labeling program uses web-based customer education tools to connect consumers to the sources of the food they purchase, increasing meaningful consumer engagement for our clients.

 

CAUTIONARY STATEMENT

 

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, expectations to continue buying back stock, enhance our technology platform, expand our services, strengthen the beef business and accelerate growth, and demand for, and impact and efficacy of, the Company’s 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 2024 and the Company’s pace of stock buybacks 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.

 

Company Contacts:

 

John Saunders

Chief Executive Officer

303-895-3002

 

Jay Pfeiffer

Director Investor Relations

303-880-9000

jpfeiffer@wherefoodcomesfrom.com

 

 

Where Food Comes From, Inc.

Statements of Income

 

		Three months ended December 31,								Year ended December 31,
(Amounts in thousands, except per share amounts)		2024				2023				2024				2023
		(Unaudited)				(Unaudited)				(Audited)				(Audited)
Revenues:
Verification and certification service revenue		$	5,380			$	5,469			$	20,552			$	19,413
Product sales			922				871				3,803				4,001
Professional services			360				391				1,391				1,721
Total revenues			6,662				6,731				25,746				25,135
Costs of revenues:
Costs of verification and certification services			3,018				2,931				11,849				10,986
Costs of products			569				468				2,313				2,272
Costs of professional services			274				325				1,022				1,355
Total costs of revenues			3,861				3,724				15,184				14,613
Gross profit			2,801				3,007				10,562				10,522
Selling, general and administrative expenses			2,046				2,084				8,355				7,825
Income from operations			755				923				2,207				2,697
Other income/(expense):
Dividend income from Progressive Beef			250				170				400				320
Interest income			6				20				35				52
Gain on sale of assets			-				2				1				7
Gain on FMV of bitcoin			345				-				345				-
Loss on foreign currency exchange			(1	)			(1	)			(5	)			(7	)
Other income/(expense), net			-				(3	)			-				1
Interest expense			(1	)			(2	)			(4	)			(5	)
Income before income taxes			1,354				1,109				2,979				3,065
Income tax expense			393				333				859				913
Net income		$	961			$	776			$	2,120			$	2,152
Per share - net income:
Basic		$	0.18			$	0.14			$	0.40			$	0.39
Diluted		$	0.18			$	0.14			$	0.40			$	0.39
Weighted average number of common shares outstanding:
Basic			5,264				5,539				5,318				5,485
Diluted			5,281				5,597				5,334				5,548

 

 

Where Food Comes From, Inc.

Balance Sheets (Audited)

 

		December 31,				December 31,
(Amounts in thousands, except per share amounts)		2024				2023
Assets
Current assets:
Cash and cash equivalents		$	2,012			$	2,641
Accounts receivable, net of allowance			1,826				2,128
Inventory			1,002				1,109
Prepaid expenses and other current assets			705				335
Total current assets			5,545				6,213
Property and equipment, net			737				844
Right-of-use assets, net			2,067				2,296
Equity investments			1,191				1,191
Intangible and other assets, net			1,810				2,187
Digital assets			654				116
Goodwill, net			2,946				2,946
Deferred tax assets, net			356				493
Total assets		$	15,306			$	16,286
Liabilities and Equity
Current liabilities:
Accounts payable		$	468			$	567
Accrued expenses and other current liabilities			611				615
Deferred revenue			1,748				1,485
Current portion of finance lease obligations			15				14
Current portion of operating lease obligations			337				298
Total current liabilities			3,179				2,979
Finance lease obligations, net of current portion			25				41
Operating lease obligation, net of current portion			2,169				2,447
Total liabilities			5,373				5,467
Commitments and contingencies
Equity:
Common stock			7				7
Additional paid-in-capital			11,381				12,290
Treasury stock			(13,462	)			(11,219	)
Retained earnings			12,007				9,741
Total equity			9,933				10,819
Total liabilities and stockholders’ equity		$	15,306			$	16,286

 

 

 

Exhibit 99.2

 

Where Food Comes From, Inc.

2024 Year End Conference Call

Call date: Tuesday February 20, 2025

Call time: 10:00 a.m. Mountain Time

 

Jay Pfeiffer – Investor Relations

 

Good morning and welcome to the Where Food Comes From 2024 year-end earnings call.

 

Joining me on the call today are CEO John Saunders, President Leann Saunders, and Chief Financial Officer Dannette 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 services, and potential acquisitions are forward looking statements. Listeners should not place undue reliance on these statements as there are many factors that could cause actual results to 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.

 

I’ll now turn the call over to John Saunders.

 

John Saunders

 

Good morning and thanks for joining the call today.

 

Total revenue in the fourth quarter was basically flat at $6.7 million year over year.

 

	●	Verification and certification services revenue was down slightly at $5.4 million vs. $5.5 million.
	●	Product revenue increased 6% to $922,000 from $871,000.
	●	And professional services revenue was $360,000 vs. $391,000.

 

Gross profit in the fourth quarter declined 7% to $2.8 million from $3.0 million.

 

SG&A expense decreased slightly to $2.0 million from $2.1 million.

 

Net income increased to $961,000, or $0.18 per diluted share, from $776,000, or $0.14 per diluted share. In addition to an $80,000, or 47%, increase in Progressive Beef dividend income, net income benefitted from a $345,000 gain in the fair market value of bitcoin holdings. As you may recall, we invested $178,000 in bitcoin a few years ago when units were trading in the $25,000 range. At December 31 year-end, bitcoin was trading at more than three times that level – in the $93,000 range – and thus the gain on FMV.

 

On to our full-year results…

 

Total revenue for the year increased 2% to $25.7 million from $25.1 million a year ago. That total included:

 

	●	Verification and certification services, up 6% to $20.6 million from $19.4 million.
	●	Product revenue of $3.8 million, down 5% from $4.0 million.
	●	And professional services revenue of $1.4 million vs. $1.7 million.

 

 

By now you know that our traditional beef-related source and age business has been hard hit by cyclical herd size reductions over the past couple of years – and that is what’s responsible for the slowing growth in our top line.

 

We believe the decline in beef source and age verifications and related hardware sales is a temporary, cyclical occurrence. And, fortunately, in the meantime we are experiencing rising demand in a number of other service offerings that has more than offset lower source and age activities. For example, we are seeing good growth our CARE Certified program in beef and other proteins. And, as announced last month, our Upcycled Certified program has become our fastest growing service with a 17% YOY increase in 2024. We’re also seeing upticks in organic certifications, California Prop 12-related audits for poultry and egg laying hens, on-farm biosecurity, and worker care audits in the dairy industry. And, finally, we continued to benefit from more customers taking advantage of our bundling capabilities made possible by our expanding services portfolio – the largest and most diverse in the industry.

 

Gross profit for the full year was up slightly to $10.6 million from $10.5 million and our gross margins remained generally stable year over year.

 

The big impact to profitability came in SG&A expenses, which grew by $530,000 year over year. I want to provide some context around that increase because a significant amount of this additional expense was allocated to areas that enhance our ability to execute on our growth plans. Although some of the increase was due to wage inflation and a very competitive job market, the bulk of the increase was due to stepped up marketing activities and some strategic hires of technical personnel who are strengthening our technology platform and tools to ensure we can manage the expected customer growth in both the short and long term.

 

Net income for the year was down slightly at $2.1 million, or $0.40 per diluted share, vs. net income of $2.2 million, or $0.39 per diluted share, in 2023.

 

The Company generated $2.7 million in cash from operations in 2024 vs. $2.8 million in 2023. We entered 2025 with cash and cash equivalents of $2.0 million and working capital of $2.4 million.

 

Turning now to our efforts to return value to stockholders:

 

	●	For the full year, including stock buybacks and private purchase transactions, the Company repurchased a total of 273,057 shares of its stock for $3.3 million, or approximately $11.98 per share.
	●	Aggregate buybacks since plan inception 21 quarters ago, including private purchases, totaled 1,191,636 shares at a purchase price of $13.0 million, or approximately $10.92 per share. Our pace of buybacks and private purchases has accelerated with 73% of the total coming in the last three years.
	●	And, finally, total value returned to stockholders via buybacks, private purchases and a special dividend over past 21 quarters totaled $13.9 million.

 

We expect to continue taking advantage of solid cash flows to further reduce our float, while at the same time investing in new programs and services designed to strengthen our beef business and accelerate the growth of other service offerings. We look forward to providing more specifics on these initiatives in the coming months.

 

In closing, we are now celebrating our 30^th year anniversary in business. Our evolution has been steady, deliberate and very gratifying.

 

	●	In the founding stage, we identified a niche need in the cattle industry for traceability and began developing software to fill that need.
	●	In our next phase of growth, we made a bet that consumer demand for transparency would extend to other areas of the food supply chain, and we began building out our verification services portfolio to address other food groups and the growing trend of food claims labeling. We also rapidly grew our cattle business and established our IMI Global unit as the undisputed leader in cattle traceability and claims verification in North America. We invested heavily in a technology platform capable of managing a diverse services portfolio and, ultimately, the much larger business that we expect to become. And we accomplished all of this through a combination of ground-up organic initiatives and strategic acquisitions.
	●	That whole process took years to accomplish due to regulatory and myriad other issues. Becoming an authorized certification body for a single standard, for example, can take up to three years to complete and begin generating a return on financial and human capital. That’s why as of today, we have a large moat around our business and a business that would be very difficult to replicate. Additionally, we are supported by consumer tailwinds around food safety, food traceability, and food claims verification, we believe we are uniquely positioned as the go-to provider for producers, CPGs, distributors and retailers.
	●	As a result of these years of innovation and investment, we now audit to more than 50 different standards – far and away the most of any food verification business – and can bundle any number of verifications to lower compliance prices for our customers and food prices for consumers in general. We believe virtually all of these individual standards, including a number of new offerings we have in the works, have the potential for strong growth in coming years, and that bodes well for our stockholders.

 

And, with that, I’ll turn the call over to questions.

 

 

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Cover	Feb. 20, 2025
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Feb. 20, 2025
Entity File Number	001-40314
Entity Registrant Name	WHERE FOOD COMES FROM, INC.
Entity Central Index Key	0001360565
Entity Tax Identification Number	43-1802805
Entity Incorporation, State or Country Code	CO
Entity Address, Address Line One	202 6th Street
Entity Address, Address Line Two	Suite 400
Entity Address, City or Town	Castle Rock
Entity Address, State or Province	CO
Entity Address, Postal Zip Code	80104
City Area Code	(303)
Local Phone Number	895-3002
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, $0.001 par value
Trading Symbol	WFCF
Security Exchange Name	NASDAQ

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