Third Quarter Highlights – 2023 vs. 2022
- Verification and certification revenue up 4% to
$5.4 million from$5.2 million - Product sales decline 23% to
$1.2 million from$1.6 million - Total revenue down 4% to
$7.0 million from$7.3 million - Net income decreased 8% to
$723,000 from$785,000 - Diluted EPS flat at
$0.13 - Adjusted EBITDA of
$1.2 million vs.$1.3 million - Company buys back
$855,000 of its stock in Q3, or 60,537 shares; diluted share count drops to 5,658,000 from 6,016,000 year over year
Nine-Month Highlights – 2023 vs. 2022
- Verification and certification revenue up 8% to
$13.9 million from$12.9 million - Product sales decline 10% to
$3.1 million from$3.5 million - Total revenue decreased 2% to
$18.4 million from$18.8 million ; decline includes impact of one-time$0.9 million contract award in Q1 2022 - Net income of
$1.4 million vs.$1.5 million - Diluted EPS of
$0.24 vs.$0.25 - Adjusted EBITDA of
$2.5 million vs.$2.8 million - Cash generated from operations declined to
$2.6 million from$3.0 million - Cash & cash equivalents of
$3.8 million vs.$4.4 million at 2022 year-end, reflecting impact of stock buybacks - Company buys back more than
$2.9 million of its stock through first nine months of 2023
“Despite continuing headwinds related to cyclical cattle trends, our core verification and certification revenue increased in both the third quarter and nine-month period,” said
“More recently, we announced another important milestone in our aquaculture initiative with the acquisition of Smart Catch™, a program administered by our Postelsia division that promotes transparency and sustainability in seafood,” Saunders added. “Originally a domestic program of the
Third Quarter Results – 2023 vs. 2022
Revenue in the third quarter ended
Revenue mix included:
- Verification and certification services, up 4% to
$5.4 million from$5.2 million . - Product revenue, down 23% to
$1.2 million from$1.6 million . - Consulting revenue of
$0.4 million versus$0.5 million .
Gross profit in the third quarter decreased to
Selling, general and administrative expense was 9% lower year over year at
Operating income was 12% lower at
Net income was
Adjusted EBITDA in the third quarter was down slightly at
The Company bought back
Nine Month Results – 2023 vs. 2022
Total revenue through the first nine months of 2023 decreased 2% to
Revenue mix included:
- Verification and certification services, up 8% to
$13.9 million from$12.9 million . - Product revenue, down 10% to
$3.1 million from$3.5 million . - Consulting revenue of
$1.3 million compared to$2.4 million in the prior year period when the Company booked a$0.9 million , non-recurring order from a Japanese government entity.
Gross profit through nine months was
Selling, general and administrative expense was essentially flat at
Operating income was lower at
Net income through nine months was
Adjusted EBITDA through nine months was
The cash and cash equivalents balance at
The Company will conduct a conference call today at
Call-in numbers for the conference call:
Domestic Toll Free: 1-877-407-8289
International: 1-201-689-8341
Conference Code: 13742404
Phone replay:
A telephone replay of the conference call will be available through
Domestic Toll Free: 1-877-660-6853
International: 1-201-612-7415
Conference Code: 13742404
About
*Note on non-GAAP Financial Measures
This press release and the accompanying tables include a discussion of EBITDA and Adjusted EBITDA, which are non-GAAP financial measures provided as a complement to the results provided in accordance with generally accepted accounting principles ("GAAP"). The term "EBITDA" refers to a financial measure that we define as earnings (net income or loss) plus or minus net interest plus taxes, depreciation and amortization. Adjusted EBITDA excludes from EBITDA stock-based compensation and, when appropriate, other items that management does not utilize in assessing WFCF’s operating performance (as further described in the attached financial schedules). None of these non-GAAP financial measures are recognized terms under GAAP and do not purport to be an alternative to net income as an indicator of operating performance or any other GAAP measure. We have reconciled Adjusted EBITDA to GAAP net income in the Consolidated Statements of Income table at the end of this release. We intend to continue to provide these non-GAAP financial measures as part of our future earnings discussions and, therefore, the inclusion of these non-GAAP financial measures will provide consistency in our financial reporting.
CAUTIONARY STATEMENT
This news release contains "forward-looking statements" within the meaning of the
Company Contacts:
Chief Executive Officer
303-895-3002
Director, Investor Relations
303-880-9000
jpfeiffer@wherefoodcomesfrom.com
Statements of Income (Unaudited) | ||||||||||||||
Three months ended | Nine months ended | |||||||||||||
(Amounts in thousands, except per share amounts) | 2023 | 2022 | 2023 | 2022 | ||||||||||
Revenues: | ||||||||||||||
Verification and certification service revenue | $ | 5,359 | $ | 5,169 | $ | 13,944 | $ | 12,917 | ||||||
Product sales | 1,221 | 1,588 | 3,130 | 3,473 | ||||||||||
Consulting revenue | 431 | 508 | 1,330 | 2,362 | ||||||||||
Total revenues | 7,011 | 7,265 | 18,404 | 18,752 | ||||||||||
Costs of revenues: | ||||||||||||||
Costs of verification and certification services | 3,123 | 2,900 | 8,055 | 7,261 | ||||||||||
Costs of products | 681 | 826 | 1,804 | 1,885 | ||||||||||
Costs of consulting | 341 | 359 | 1,030 | 1,899 | ||||||||||
Total costs of revenues | 4,145 | 4,085 | 10,889 | 11,045 | ||||||||||
Gross profit | 2,866 | 3,180 | 7,515 | 7,707 | ||||||||||
Selling, general and administrative expenses | 1,920 | 2,106 | 5,741 | 5,697 | ||||||||||
Income from operations | 946 | 1,074 | 1,774 | 2,010 | ||||||||||
Other income/(expense): | ||||||||||||||
Dividend income from Progressive Beef | 50 | 50 | 150 | 150 | ||||||||||
Gain on sale of assets | - | - | 5 | - | ||||||||||
Impairment of digital assets | - | (42) | (42) | |||||||||||
Loss on foreign currency exchange | (2) | - | (6) | (35) | ||||||||||
Other income, net | 16 | 1 | 36 | 2 | ||||||||||
Interest expense | (1) | - | (3) | (2) | ||||||||||
Income before income taxes | 1,009 | 1,083 | 1,956 | 2,083 | ||||||||||
Income tax expense | 286 | 298 | 580 | 579 | ||||||||||
Net income | $ | 723 | $ | 785 | $ | 1,376 | $ | 1,504 | ||||||
Per share - net income: | ||||||||||||||
Basic | $ | 0.13 | $ | 0.13 | $ | 0.25 | $ | 0.25 | ||||||
Diluted | $ | 0.13 | $ | 0.13 | $ | 0.24 | $ | 0.25 | ||||||
Weighted average number of common shares outstanding: | ||||||||||||||
Basic | 5,599 | 5,936 | 5,605 | 6,019 | ||||||||||
Diluted | 5,658 | 6,016 | 5,669 | 6,101 | ||||||||||
Calculation of Adjusted EBITDA* | |||||||||||||||
(Unaudited) | |||||||||||||||
Three months ended | Nine months ended | ||||||||||||||
(Amounts in thousands) | 2023 | 2022 | 2023 | 2022 | |||||||||||
Net income | $ | 723 | $ | 785 | $ | 1,376 | $ | 1,504 | |||||||
Adjustments to EBITDA: | |||||||||||||||
Interest expense | 1 | - | 3 | 2 | |||||||||||
Income tax expense | 286 | 298 | 580 | 579 | |||||||||||
Depreciation and amortization | 153 | 191 | 488 | 583 | |||||||||||
EBITDA* | 1,163 | 1,274 | 2,447 | 2,668 | |||||||||||
Adjustments: | |||||||||||||||
Stock-based compensation | 6 | 19 | 38 | 102 | |||||||||||
Impairment of digital assets | - | 42 | - | 42 | |||||||||||
Cost of acquisitions | - | - | - | - | |||||||||||
ADJUSTED EBITDA* | $ | 1,169 | $ | 1,335 | $ | 2,485 | $ | 2,812 | |||||||
*Use of Non-GAAP Financial Measures: Non-GAAP results are presented only as a supplement to the financial statements and for use within management's discussion and analysis based on | |||||||||||||||
All of the items included in the reconciliation from net income to EBITDA and from EBITDA to Adjusted EBITDA are either (i) non-cash items (e.g., depreciation, amortization of purchased intangibles, stock-based compensation, etc.) or (ii) items that management does not consider to be useful in assessing the Company's ongoing operating performance (e.g., M&A costs, income taxes, gain on sale of investments, loss on disposal of assets, etc.). In the case of the non-cash items, management believes that investors can better assess the Company's operating performance if the measures are presented without such items because, unlike cash expenses, these adjustments do not affect the Company's ability to generate free cash flow or invest in its business. | |||||||||||||||
We use, and we believe investors benefit from the presentation of, EBITDA and Adjusted EBITDA in evaluating our operating performance because it provides us and our investors with an additional tool to compare our operating performance on a consistent basis by removing the impact of certain items that management believes do not directly reflect our core operations. We believe that EBITDA is useful to investors and other external users of our financial statements in evaluating our operating performance because EBITDA is widely used by investors to measure a company's operating performance without regard to items such as interest expense, taxes, and depreciation and amortization, which can vary substantially from company to company depending upon accounting methods and book value of assets, capital structure and the method by which assets were acquired. | |||||||||||||||
Because not all companies use identical calculations, the Company's presentation of non-GAAP financial measures may not be comparable to other similarly titled measures of other companies. However, these measures can still be useful in evaluating the Company's performance against its peer companies because management believes the measures provide users with valuable insight into key components of GAAP financial disclosures. |
Balance Sheets | ||||||||||
(Amounts in thousands, except per share amounts) | 2023 | 2022 | ||||||||
Assets | (Unaudited) | (Audited) | ||||||||
Current assets: | ||||||||||
Cash and cash equivalents | $ | 3,813 | $ | 4,368 | ||||||
Accounts receivable, net of allowance | 2,291 | 2,172 | ||||||||
Inventory | 1,120 | 888 | ||||||||
Prepaid expenses and other current assets | 495 | 463 | ||||||||
Total current assets | 7,719 | 7,891 | ||||||||
Property and equipment, net | 848 | 998 | ||||||||
Right-of-use assets, net | 2,379 | 2,607 | ||||||||
Equity investments | 1,191 | 991 | ||||||||
Intangible and other assets, net | 2,097 | 2,340 | ||||||||
2,946 | 2,946 | |||||||||
Deferred tax assets, net | 508 | 523 | ||||||||
Total assets | $ | 17,688 | $ | 18,296 | ||||||
Liabilities and Equity | ||||||||||
Current liabilities: | ||||||||||
Accounts payable | $ | 722 | $ | 640 | ||||||
Accrued expenses and other current liabilities | 1,345 | 769 | ||||||||
Deferred revenue | 1,713 | 1,278 | ||||||||
Current portion of finance lease obligations | 13 | 9 | ||||||||
Current portion of operating lease obligations | 310 | 341 | ||||||||
Total current liabilities | 4,103 | 3,037 | ||||||||
Finance lease obligations, net of current portion | 44 | 37 | ||||||||
Operating lease obligation, net of current portion | 2,522 | 2,745 | ||||||||
Total liabilities | 6,669 | 5,819 | ||||||||
Commitments and contingencies | ||||||||||
Equity: | ||||||||||
Preferred stock, | ||||||||||
none issued or outstanding | - | - | ||||||||
Common stock, | ||||||||||
6,511 (2023) and 6,501 (2022) shares issued, and | ||||||||||
5,574 (2023) and 5,775 (2022) shares outstanding | 6 | 6 | ||||||||
Additional paid-in-capital | 12,232 | 12,145 | ||||||||
(10,184) | (7,263) | |||||||||
Retained earnings | 8,965 | 7,589 | ||||||||
Total equity | 11,019 | 12,477 | ||||||||
Total liabilities and stockholders' equity | $ | 17,688 | $ | 18,296 | ||||||
Source:
2023 GlobeNewswire, Inc., source