CASTLE ROCK, CO--(Marketwired - May 4, 2015) - Where Food Comes From, Inc. (OTCQB: WFCF)

First quarter revenue up 46% to $2.1 million from $1.4 million last year

Gross margins increase to 46% from 39% a year ago

Net income improves to $55,000 from a net loss of $134,000

Operating cash flow up 347% year over year to $399,000 from $89,000 last year

Where Food Comes From, Inc. (d.b.a. IMI Global, Inc.) (OTCQB: WFCF), the most trusted resource for third-party verification of food production practices, today announced results for its first quarter ended March 31, 2015.

"We are pleased to report record revenue and net income in what is typically one of our slower quarters," said John Saunders, chairman and CEO. "We attribute our continued momentum to growing demand from consumers, brand owners, supply chains, farmers and ranchers for increased transparency in the food supply chain, as well as to increased requirements for product traceability, verification and certification -- all of which drove a 41% increase in auditing revenue and a 107% increase in higher-margin product sales. This growth more than offset a 24% year over year decrease in labeling revenue due to a change in beef suppliers at Heinen's Fine Foods -- our largest labeling customer.

"In the first quarter we began implementing the Where Food Comes From® labeling program for 20 new grocery customers representing approximately 200 individual stores located primarily on the East and West Coasts," Saunders added. "These new customers -- which are carrying Shepherd's Pride Lamb products bearing the Where Food Comes From® label and associated QR code -- enabled us to nearly quadruple our labeling revenue over the fourth quarter of 2014. In addition, we resumed beef labeling activities at Heinen's on a limited basis in the first quarter as new beef suppliers came online there. As a result, we're optimistic that we're back on a growth trajectory with this important component of our revenue mix."

First Quarter Results
 First quarter revenue increased 46% to $2,081,300 from revenue of $1,426,400 in the same quarter last year, reflecting more auditing customers as a result of both organic and M&A initiatives. Verification services revenue was up 41% to $1,774,200 from $1,255,200. Product revenue (cattle identification tags) increased 107% to $279,800 from $135,400, reflecting growing compliance of beef producers -- primarily involving dairy calves -- with the USDA ADT program. Other revenue, primarily associated with the Company's Where Food Comes From® labeling program, decreased 24% to $27,300 from $35,800 year over year. This decline reflected a change in beef suppliers at the Company's largest labeling customer, although the program is now coming back online with the customer's new beef suppliers. In the meantime, the Company continued to generate a full quarter's labeling revenue from poultry, pork and lamb products in the Heinen's meat department.

Gross profit in the first quarter increased 73% to $963,300 from $557,500 year over year. Gross margin grew to 46% from 39% year over year due to higher sales relative to a more stable cost structure and the positive effects of bundled service offerings. Selling, general and administrative expenses grew by just 14% year over year and improved to 46% of revenue from 58% in the first quarter last year.

Net income attributable to Where Food Comes From, Inc. increased to $54,800, or less than one cent per share, compared with a net loss of $133,600, or $0.01 per share, in the same quarter a year ago.

The Company generated $398,600 in cash from operations in the first quarter, up 347% from $89,100 in the first quarter last year.

Balance Sheet
 Cash, cash equivalents and restricted cash at March 31, 2015, increased 15% to $3,261,400 from $2,833,100 at 2014 year-end. Working capital increased to $3,504,100 from $3,380,700 and the Company's current ratio improved to 5.1:1.

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

Dial in:
 Domestic Toll Free: 1-877-407-8289
International: 1-201-689-8341
Conference ID: 13607474

Phone replay:
 A telephone replay of the conference call will be available through May 18, 2015, as follows:
Domestic Toll Free: 1-877-660-6853
International: 1-201-612-7415
Conference Code: 13607474

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, distributors and restaurants with a wide variety of value-added services through its IMI Global, International Certification Services, Validus Verification Services, and Sterling Solutions 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.

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 expectations for growing labeling revenue; expectations for ADT to roll out; 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 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 Income (Loss)            
(Unaudited)            
    Three Months Ended  
    March 31,  
    2015     2014  
    (Note 1)  
Revenues                
  Service revenue   $ 1,774,152     $ 1,255,187  
  Product sales     279,804       135,420  
  Other revenue     27,345       35,833  
    Total revenue     2,081,301       1,426,440  
Costs of revenue                
  Labor and other costs of services     956,039       767,185  
  Costs of products     161,979       101,709  
    Total costs of revenue     1,118,018       868,894  
Gross profit     963,283       557,546  
Selling, general and administrative expenses     950,999       831,154  
Income (loss) from operations     12,284       (273,608 )
Other expense (income):                
  Interest expense     456       2,823  
  Other income, net     3,004       (778 )
Income (loss) before income taxes     8,824       (275,653 )
Income tax (expense) benefit     35,150       (78,368 )
Net income (loss)     (26,326 )     (197,285 )
Net loss (income) attributable to non-controlling interest     81,173       63,657  
Net income (loss) attributable to Where Food Comes From, Inc.   $ 54,847     $ (133,628 )
Net income (loss) per share:                
  Basic   $ *     $ (0.01 )
  Diluted   $ *     $ (0.01 )
Weighted average number of common shares outstanding:                
  Basic     23,755,990       22,692,859  
  Diluted     23,966,436       22,692,859  
                   

* Less than a penny ($0.01) per share

Note 1: Certain revenue and cost of revenue amounts presented in 2014 have been reclassified to conform to 2015 presentation.

             
Where Food Comes From, Inc.            
Balance Sheets            
             
    March 31,     December 31,  
    2015     2014  
ASSETS   (Unaudited)        
Current Assets:                
  Cash and cash equivalents   $ 3,010,689     $ 2,583,058  
  Restricted cash     250,680       250,000  
  Accounts receivable, net     766,670       979,532  
  Prepaid expenses and other current assets     158,604       126,938  
  Deferred tax assets     167,805       167,805  
    Total current assets     4,354,448       4,107,333  
Property and equipment, net     211,399       231,886  
Intangible and other assets, net     1,913,434       1,952,678  
Goodwill     1,279,762       1,279,762  
Long-term deferred tax assets     326,647       361,797  
Total assets   $ 8,085,690     $ 7,933,456  
                 
LIABILITIES AND SHAREHOLDERS' EQUITY                
Current liabilities:                
  Accounts payable   $ 316,108     $ 401,131  
  Accrued expenses and other current liabilities     88,864       65,849  
  Customer deposits     165,403       69,090  
  Deferred revenue     267,960       178,724  
  Current portion of notes payable     7,528       7,425  
  Current portion of capital lease obligations     4,455       4,397  
    Total current liabilities     850,318       726,616  
Capital lease obligations, net of current portion     5,274       6,410  
Notes payable, net     14,316       16,245  
Total liabilities     869,908       749,271  
Contingently redeemable non-controlling interest     892,846       974,019  
Stockholders' equity:                
  Common stock     24,339       24,266  
  Additional paid-in capital     7,486,604       7,428,754  
  Treasury stock     (150,849 )     (150,849 )
  Accumulated deficit     (1,037,158 )     (1,092,005 )
Total Equity     6,322,936       6,210,166  
Total liabilities and stockholders' equity   $ 8,085,690     $ 7,933,456