Fourth Quarter Highlights – 2023 vs. 2022
- Verification and certification revenue up 17% to
$5.5 million from$4.7 million - Product sales flat at
$0.9 million - Total revenue up 10% to
$6.7 million from$6.1 million - Net income increased 58% to
$776,000 from$490,000 - Diluted EPS increased to
$0.14 from$0.08 - Adjusted EBITDA up 31% to
$1.3 million from$1.0 million - Company buys back more than
$1.0 million of its stock in Q4
Full-Year Highlights – 2023 vs. 2022
- Verification and certification revenue up 10% to
$19.4 million from$17.6 million - Product sales decline 8% to
$4.0 million from$4.4 million - Total revenue up slightly to
$25.1 million from$24.8 million - Net income increases 8% to
$2.2 million from$2.0 million - Diluted EPS of
$0.39 vs.$0.33 - Adjusted EBITDA flat at
$3.8 million - Cash generated from operations increased to
$2.8 million from$2.7 million - Cash & cash equivalents of
$2.6 million vs.$4.4 million at 2022 year-end, reflecting impact of$3.9 million in stock buybacks for full year
“We closed the year with a very strong fourth quarter, highlighted by a 17% increase in core verification services revenue and a 58% increase in net income year over year,” said
“In 2023 we continued to diversify our business mix with a number of transactions and partnerships that give our customers additional options to differentiate and add value to their products,” Saunders added. “These moves include multiple seafood initiatives, another exclusive verifier designation and acquisition of the industry’s leading upcycled food program. As we continue to expand on what is already the industry’s largest solutions set, we widen our competitive moat while affording customers convenience and price advantages through services bundling.”
Fourth Quarter Results – 2023 vs. 2022
Total revenue in the fourth quarter ended
Revenue mix included:
- Verification and certification services, up 17% to
$5.5 million from$4.7 million . - Product revenue, flat at
$0.9 million - Professional services revenue of
$0.4 million vs.$0.5 million .
Gross profit in the third quarter increased to
Selling, general and administrative expense was flat at
Operating income was 44% higher at
Net income increased 58% to
Adjusted EBITDA in the fourth quarter increased 31% to
The Company bought back more than
Full Year Results – 2023 vs. 2022
Total revenue for 2023 increased slightly to
Revenue mix included:
- Verification and certification services, up 10% to
$19.4 million from$17.6 million . - Product revenue, down 8% to
$4.0 million from$4.4 million . - Professional services revenue of
$1.7 million compared to$2.9 million in the prior year due to the aforementioned$0.9 million , non-recurring order from a Japanese government entity.
Gross profit for the full year was flat at
Selling, general and administrative expense was also flat at
Operating income was flat at
Net income for the year increased 8% to
Adjusted EBITDA for the year was flat at
The Company generated
The cash and cash equivalents balance at
In 2023, the Company realized
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: 13744489
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: 13744489
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 | Year ended | ||||||||||||||||||
(Amounts in thousands, except per share amounts) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||
Revenues: | |||||||||||||||||||
Verification and certification service revenue | $ | 5,469 | $ | 4,693 | $ | 19,413 | $ | 17,610 | |||||||||||
Product sales | 871 | 891 | 4,001 | 4,364 | |||||||||||||||
Professional services | 391 | 509 | 1,721 | 2,871 | |||||||||||||||
Total revenues | 6,731 | 6,093 | 25,135 | 24,845 | |||||||||||||||
Costs of revenues: | |||||||||||||||||||
Costs of verification and certification services | 2,931 | 2,487 | 10,986 | 9,748 | |||||||||||||||
Costs of products | 468 | 448 | 2,272 | 2,333 | |||||||||||||||
Costs of professional services | 325 | 397 | 1,355 | 2,296 | |||||||||||||||
Total costs of revenues | 3,724 | 3,332 | 14,613 | 14,377 | |||||||||||||||
Gross profit | 3,007 | 2,761 | 10,522 | 10,468 | |||||||||||||||
Selling, general and administrative expenses | 2,084 | 2,119 | 7,825 | 7,816 | |||||||||||||||
Income from operations | 923 | 642 | 2,697 | 2,652 | |||||||||||||||
Other income/(expense): | |||||||||||||||||||
Dividend income from Progressive Beef | 170 | 100 | 320 | 250 | |||||||||||||||
Gain on sale of assets | 2 | 12 | 7 | 12 | |||||||||||||||
Loss on foreign currency exchange | (1 | ) | (3 | ) | (7 | ) | (38 | ) | |||||||||||
Impairment of digital assets | - | (20 | ) | - | (62 | ) | |||||||||||||
Other income, net | 17 | 3 | 53 | 5 | |||||||||||||||
Interest expense | (2 | ) | (1 | ) | (5 | ) | (3 | ) | |||||||||||
Income before income taxes | 1,109 | 733 | 3,065 | 2,816 | |||||||||||||||
Income tax expense | 333 | 243 | 913 | 822 | |||||||||||||||
Net income | $ | 776 | $ | 490 | $ | 2,152 | $ | 1,994 | |||||||||||
Per share - net income: | |||||||||||||||||||
Basic | $ | 0.14 | $ | 0.08 | $ | 0.39 | $ | 0.34 | |||||||||||
Diluted | $ | 0.14 | $ | 0.08 | $ | 0.39 | $ | 0.33 | |||||||||||
Weighted average number of common shares outstanding: | |||||||||||||||||||
Basic | 5,539 | 5,814 | 5,485 | 5,955 | |||||||||||||||
Diluted | 5,597 | 5,889 | 5,548 | 6,035 | |||||||||||||||
Calculation of Adjusted EBITDA* | |||||||||||||||
(Unaudited) | |||||||||||||||
Three months ended | Year ended | ||||||||||||||
(Amounts in thousands) | 2023 | 2022 | 2023 | 2022 | |||||||||||
Net income | $ | 776 | $ | 490 | $ | 2,152 | $ | 1,994 | |||||||
Adjustments to EBITDA: | |||||||||||||||
Interest expense | 2 | 1 | 5 | 3 | |||||||||||
Income tax expense | 333 | 243 | 913 | 822 | |||||||||||
Depreciation and amortization | 146 | 182 | 634 | 765 | |||||||||||
EBITDA* | 1,257 | 916 | 3,704 | 3,584 | |||||||||||
Adjustments: | |||||||||||||||
Impairment | - | 20 | - | 62 | |||||||||||
Stock-based compensation | 39 | 52 | 78 | 154 | |||||||||||
ADJUSTED EBITDA* | $ | 1,296 | $ | 988 | $ | 3,782 | $ | 3,800 | |||||||
*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 (Audited) | |||||||||||
(Amounts in thousands, except per share amounts) | 2023 | 2022 | |||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 2,641 | $ | 4,368 | |||||||
Accounts receivable, net of allowance | 2,128 | 2,172 | |||||||||
Inventory | 1,109 | 888 | |||||||||
Prepaid expenses and other current assets | 335 | 463 | |||||||||
Total current assets | 6,213 | 7,891 | |||||||||
Property and equipment, net | 844 | 998 | |||||||||
Right-of-use assets, net | 2,296 | 2,607 | |||||||||
Equity investments | 1,191 | 991 | |||||||||
Intangible and other assets, net | 2,303 | 2,340 | |||||||||
2,946 | 2,946 | ||||||||||
Deferred tax assets, net | 493 | 523 | |||||||||
Total assets | $ | 16,286 | $ | 18,296 | |||||||
Liabilities and Equity | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | 567 | $ | 640 | |||||||
Accrued expenses and other current liabilities | 615 | 769 | |||||||||
Deferred revenue | 1,485 | 1,278 | |||||||||
Current portion of finance lease obligations | 14 | 9 | |||||||||
Current portion of operating lease obligations | 298 | 341 | |||||||||
Total current liabilities | 2,979 | 3,037 | |||||||||
Finance lease obligations, net of current portion | 41 | 37 | |||||||||
Operating lease obligation, net of current portion | 2,447 | 2,745 | |||||||||
Total liabilities | 5,467 | 5,819 | |||||||||
Commitments and contingencies | |||||||||||
Equity: | |||||||||||
Preferred stock, | |||||||||||
none issued or outstanding | - | - | |||||||||
Common stock, | |||||||||||
6,516 (2023) and 6,501 (2022) shares issued, and | |||||||||||
5,503 (2023) and 5,775 (2022) shares outstanding | 7 | 6 | |||||||||
Additional paid-in-capital | 12,290 | 12,145 | |||||||||
(11,219 | ) | (7,263 | ) | ||||||||
Retained earnings | 9,741 | 7,589 | |||||||||
Total equity | 10,819 | 12,477 | |||||||||
Total liabilities and stockholders' equity | $ | 16,286 | $ | 18,296 | |||||||
Source:
2024 GlobeNewswire, Inc., source