8-K
Where Food Comes From, Inc. (WFCF)
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): May 12, 2022
WHERE
FOOD COMES FROM, INC.
(Exact Name of Registrant as Specified in its Charter)
| Colorado | 001-40314 | 43-1802805 |
|---|---|---|
| (State<br> or Other Jurisdiction<br><br> <br>of<br> Incorporation) | (Commission<br><br> <br>File<br> Number) | (I.R.S.<br> Employer<br><br> <br>Identification<br> No.) |
| 202 6^th^ Street, Suite 400 | ||
| --- | --- | |
| Castle Rock, Colorado | 80104 | |
| (Address<br> of Principal Executive Offices) | (Zip<br> Code) |
(303)895-3002
(Registrant’s Telephone Number, Including Area Code)
Notapplicable
(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<br> communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting<br> material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement<br> communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement<br> 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<br> of each class | Trading<br> Symbol(s) | Name<br> of each exchange on which registered |
|---|---|---|
| Common<br> Stock, $0.001 par value | WFCF | The<br> 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 May 12, 2022 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 first quarter period ended March 31, 2022.
| Item 9.01 | Financial Statements and Exhibits |
|---|---|
| (d) | Exhibits |
| --- | --- |
| Exhibit<br><br> <br>No. | Description |
| --- | --- |
| 99.1 | Press Release issued and dated May 12, 2022 |
| 99.2 | Transcript for May 12, 2022 conference call |
| 104 | Cover<br> 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.<br><br> <br>(Registrant) | ||
|---|---|---|
| By: | /s/ Dannette Henning | |
| Date:<br> May 13, 2022 | Dannette<br> Henning | |
| Chief<br> Financial Officer |
Exhibit99.1
WhereFood Comes From, Inc. Reports 2022 First Quarter Financial Results
CASTLE ROCK, Colo., May 12, 2022 (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 2022 first quarter ended March 31, 2022.
“First quarter revenue growth reflected continued momentum in our verification and certification segment, including typically strong demand from beef customers and steadily increasing activity with other protein segments that are recovering from the impact of Covid-19 restrictions,” said John Saunders, Chairman and CEO. “We also saw a sharp increase in consulting revenue resulting from a large contract our Postelsia unit won with a Japanese government agency for seafood promotion in the United States. On the profit side, operating income was up six-fold and adjusted EBITDA grew by 160% year over year. Our cash and cash equivalents balance topped $6.0 million in the quarter and our balance sheet remains debt free.”
Where Food Comes From also announced it bought back 33,550 shares of common stock in the first quarter of 2022. That compares to buybacks totaling 80,775 shares for all of 2021.
FirstQuarter Results
Revenue in the first quarter increased 39% to $6.2 million from $4.4 million in the first quarter last year. Revenue components included:
| ● | Verification<br> and certification services, up 16% to $3.8 million from $3.3 million. |
|---|---|
| ● | Product<br> sales, up 39% to $1.0 million from $0.7 million. |
| ● | Software<br> and related consulting services up 201% to $1.4 million from $0.5 million. |
Gross margins for verification and certification services and associated product sales increased to 46.3% from 43.6% year over year due primarily to favorable changes in sales mix and pricing.
Sales, general and administrative expenses in the first quarter were flat at $1.8 million.
Income from operations increased six-fold to $0.6 million from $0.1 million due to improved margins in verification and tag sales and a stable expense base relative to increased revenue.
Net income in the first quarter was $0.5 million, or $0.08 per share, compared to net income of $1.2 million, or $0.19 per share, in the same quarter last year when the Company benefitted from $1.0 million in PPP loan forgiveness income. Excluding loan forgiveness, first quarter 2021 net income would have been $0.1 million.
Adjusted EBITDA in the first quarter was $0.9 million, up 156% over adjusted EBITDA of $0.4 million in the first quarter last year.
The Company generated approximately $1.1 million in net cash from operations in the first quarter compared to $1.2 million in the same quarter last year.
Cash and cash equivalents at March 31, 2022, were up 13% to $6.1 million from $5.4 million at 2021 year end. The Company has no long term debt.
ConferenceCall
The Company will conduct a conference call today at 10:00 a.m. Mountain Time.
Call-innumbers for the conference call:
Domestic Toll Free: 1-877-407-8289
International: 1-201-689-8341
Conference Code: 13729885
Phonereplay:
A telephone replay of the conference call will be available through June 9, 2022, as follows:
Domestic Toll Free: 1-877-660-6853
International: 1-201-612-7415
Conference Code: 13729885
AboutWhere 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 (previously known as International Certification Services and A Bee Organic), Postelsia and Sterling Solutions 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.
*Noteon 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.
CAUTIONARYSTATEMENT
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 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 the first quarter 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
WhereFood Comes From, Inc.
Statementsof Income (Unaudited)
| Three months ended March 31, | ||||||
|---|---|---|---|---|---|---|
| (Amounts in thousands, except per share amounts) | 2022 | 2021 | ||||
| Revenues: | ||||||
| Verification and certification service revenue | $ | 3,784 | $ | 3,263 | ||
| Product sales | 1,007 | 724 | ||||
| Software and related consulting revenue | 1,365 | 453 | ||||
| Total revenues | 6,156 | 4,440 | ||||
| Costs of revenues: | ||||||
| Costs of verification and certification services | 2,036 | 1,793 | ||||
| Costs of products | 537 | 457 | ||||
| Costs of software and related consulting | 1,186 | 328 | ||||
| Total costs of revenues | 3,759 | 2,578 | ||||
| Gross profit | 2,397 | 1,862 | ||||
| Selling, general and administrative expenses | 1,774 | 1,773 | ||||
| Income from operations | 623 | 89 | ||||
| Other income/(expense): | ||||||
| Dividend income from Progressive Beef | 50 | 30 | ||||
| Gain on disposal of assets | - | 9 | ||||
| Loan forgiveness from Paycheck Protection Program | - | 1,037 | ||||
| Loss on foreign currency exchange | (12 | ) | (2 | ) | ||
| Other income, net | - | 1 | ||||
| Interest expense | (1 | ) | (3 | ) | ||
| Income before income taxes | 660 | 1,161 | ||||
| Income tax expense | 163 | 11 | ||||
| Net income | $ | 497 | $ | 1,150 | ||
| Per share - net income: | ||||||
| Basic | $ | 0.08 | $ | 0.19 | ||
| Diluted | $ | 0.08 | $ | 0.19 | ||
| Weighted average number of common shares outstanding: | ||||||
| Basic | 6,067 | 6,136 | ||||
| Diluted | 6,150 | 6,231 |
WhereFood Comes From, Inc.
Calculationof Adjusted EBITDA*
(Unaudited)
| Three months ended March 31, | |||||
|---|---|---|---|---|---|
| (Amounts in thousands) | 2022 | 2021 | |||
| Net income | $ | 497 | $ | 1,150 | |
| Adjustments to EBITDA: | |||||
| Interest expense | 1 | 3 | |||
| Income tax expense | 163 | 11 | |||
| Depreciation and amortization | 195 | 202 | |||
| EBITDA* | 856 | 1,366 | |||
| Adjustments: | |||||
| Loan forgiveness | - | (1,037 | ) | ||
| Stock-based compensation | 51 | 25 | |||
| Cost of acquisitions | - | - | |||
| ADJUSTED EBITDA* | $ | 907 | $ | 354 |
*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 U.S. generally accepted accounting principles (GAAP). The non-GAAP financial information is provided to enhance the reader’s understanding of the Company’s financial performance, but non-GAAP measures should not be considered in isolation or as a substitute for financial measures calculated in accordance with GAAP. Reconciliations of the most directly comparable GAAP measures to non-GAAP measures are provided herein.
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.
Where Food Comes From, Inc.
Balance Sheets (Unaudited)
| (Amounts in thousands, except per share amounts) | December<br> 31, 2021 | ||||
|---|---|---|---|---|---|
| Assets | |||||
| Current assets: | |||||
| Cash and cash<br> equivalents | 6,093 | $ | 5,414 | ||
| Accounts receivable, net<br> of allowance | 2,200 | 2,178 | |||
| Inventory | 815 | 767 | |||
| Prepaid<br> expenses and other current assets | 381 | 325 | |||
| Total current assets | 9,489 | 8,684 | |||
| Property and equipment, net | 1,210 | 1,295 | |||
| Right-of-use assets, net | 2,744 | 2,823 | |||
| Investment in Progressive Beef | 991 | 991 | |||
| Intangible and other assets, net | 2,491 | 2,581 | |||
| Goodwill, net | 2,946 | 2,946 | |||
| Deferred tax assets,<br> net | 483 | 464 | |||
| Total assets | 20,354 | $ | 19,784 | ||
| Liabilities and Equity | |||||
| Current liabilities: | |||||
| Accounts payable | 594 | $ | 447 | ||
| Accrued expenses and other<br> current liabilities | 1,324 | 710 | |||
| Deferred revenue | 1,277 | 1,513 | |||
| Current portion of finance<br> lease obligations | 12 | 13 | |||
| Current<br> portion of operating lease obligations | 314 | 313 | |||
| Total current liabilities | 3,521 | 2,996 | |||
| Finance lease obligations, net of current portion | 17 | 19 | |||
| Operating lease obligation,<br> net of current portion | 2,941 | 3,020 | |||
| Total liabilities | 6,479 | 6,035 | |||
| Commitments and contingencies | |||||
| Equity: | |||||
| Preferred stock, 0.001<br> par value; 5,000 shares authorized; none issued or outstanding | - | - | |||
| Common stock, 0.001 par value; 95,000 shares<br> authorized; 6,491 (2022) and 6,489 (2021) shares issued, and 6,039 (2022) and 6,071 (2021) shares outstanding | 6 | 6 | |||
| Additional paid-in-capital | 12,006 | 11,955 | |||
| Treasury stock of 452 (2022) and 419 (2021)<br> shares | (4,229 | ) | (3,807 | ) | |
| Retained<br> earnings | 6,092 | 5,595 | |||
| Total equity | 13,875 | 13,749 | |||
| Total liabilities and<br> stockholders’ equity | 20,354 | $ | 19,784 |
All values are in US Dollars.
Exhibit99.2
WhereFood Comes From, Inc.
2022First Quarter Conference Call
Call date: Thursday May 12, 2022
Call time: 10:00 a.m. Mountain Time
JayPfeiffer – Investor Relations
Good morning and welcome to the Where Food Comes From 2022 first quarter earnings call.
Joining me on the call today are CEO John Saunders and CFO 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. Today we’ll also discuss Adjusted EBITDA, a non-GAAP financial measure provided as a complement to GAAP results. Please refer to today’s earnings release for important disclosures regarding non-GAAP measures.
I’ll now turn the call over to John Saunders.
JohnSaunders – Chief Executive Officer
Good morning and thanks for joining the call today.
This morning we released our first quarter financial results before the market opened. The expectations we expressed on our previous call for continued profitable growth in 2022 were fulfilled as the Company delivered solid increases in revenue and profitability in the quarter.
| ● | Revenue<br> in the first quarter grew 39% to $6.2 million from $4.4 million in the first quarter last year. All three revenue categories contributed<br> to that growth, including: |
|---|---|
| ○ | Verification<br> and certification services revenue was up 16% year over year to $3.8 million from $3.3 million. |
| --- | --- |
| ○ | Product<br> sales increased 39% to $1.0 million from $724,000. |
| ○ | And<br> software and related consulting services was up three-fold to $1.4 million from $453,000. |
The increase in verification and certification services was primarily driven by strong demand for beef verifications, which historically dominate this category. Demand for US beef in overseas markets – particularly China – remains very strong and drives steady growth in source and age verifications. Additionally, consumer demand in the US for a host of other premium verifications we offer is resulting in more verifications per beef producer, which not only impacts revenue but also generates higher margins by virtue of our audit bundling advantage. I think it’s worth repeating that our customer retention rates in the beef segment are very high, and that affords us a very predictable recurring revenue model.
During the first quarter we continued to see increased activity in pork, poultry, dairy and egg audits as producers who were forced to limit access to their operations due to Covid returned to business as usual in terms of site access. We’re also seeing continued strength in our Where Food Comes From Organic business, which continues to benefit from consumer preferences for organic certified products.
Our CARE Certified program – which covers beef, dairy, pork, poultry and now seafood – also continues to gain traction and notoriety as a market leading sustainability solution. The ESG movement is only going to get bigger, and CARE offers producers a cost effective way to benefit from a trend that is here to stay.
We were also pleased with the year over year growth in product sales in the first quarter following a rare decline in that category in the fourth quarter of 2021. You’ll recall that the Q4 decline was attributable to supply chain issues based in part on chip shortages that we cautioned could persist in 2022. We took decisive actions last year to secure additional tag sources and to build inventory and we continue and believe we’re in pretty good shape as evidenced by our Q1 revenue growth. However, there is still some risk and uncertainty going forward until chip makers fully catch up to the demand.
You no doubt noticed a significant increase in software and related consulting revenue in the first quarter, so let me give you some color on that exciting new opportunity. During Q1, our Postelsia business unit – which operates under the SureHarvest umbrella – executed on a contract with a Japanese government trade entity to promote Japanese seafood in the United States. The value of the contract was $850,000. The scope of work on this project was fairly extensive and we had some challenging deadlines. We also wanted to perform at a very high level for our customer because we believe there will be future opportunities for similar assignments, so we invested heavily in the effort. These additional costs pushed our COGS up by approximately $720,000 and significantly reduced our margins on the project. The good news is, we learned a lot on this project and our customer was very satisfied with the outcome. We believe there are additional opportunities for this kind of work going forward. And we expect the margins on any future contracts of this type to be improved.
Turning now to our gross margins in quarter.
Overall gross margins declined to 39% from 42% but that’s a little misleading due to the margin pressure I just mentioned relative to the large Postelsia contract. It’s important to note that margins in our verification and certification segment – which represent our core businesses – were up nicely year over year.
SG&A expense in the quarter remained flat at $1.8 million, reflecting our focus on managing costs.
The combination of higher revenue and a stable expense base resulted in a six-fold increase in operating income in the quarter – to $623,000 from $89,000. Assuming normalized COGS on the Japanese contract, operating income could have been significantly higher in the period.
Net income in the first quarter was $497,000, or 8 cents per share, compared to net income of $1.15 million, or 19 cents per share, in Q1 last year. However, keep in mind that last year’s $1.15 million profit included the benefit of a little over $1.0 million in PPP loan forgiveness. So, on an apples-to-apples basis – excluding loan forgiveness – net income was up significantly in this year’s first quarter.
We generated $1.1 million in net cash from operations in the first quarter and closed the quarter with a cash and cash equivalents balance of $6.1 million, up from $5.4 million at year end.
And finally, during the first quarter the Company bought back 33,550 shares of common stock. That compares to buybacks totaling just under 81,000 shares for all of 2021. We expect to continue buying back shares for the foreseeable future.
So, all in all, a very solid quarter for Where Food Comes From team. And with that, I’ll open the call to questions. Operator?
Questionand Answer Session:
Question1: Edward Reilly
Hey John, thanks for taking my question. Would love some additional color as to the work performed for the Japanese seafood customer?
JohnSaunders
Sure. Yes. Thanks for the question. This is a new product. It’s called Yellowtail and it’s a product that’s produced primarily in Japan and the Japanese Export Association. A group called JETRO, was interested in introducing the product to high-level chefs across the United States. So they contracted with Postelsia to organize those events across the country and we ended up doing eight events in six different cities. Two or three of the chefs that participated were Michelin rated chefs. The events were highly attended and we really had a lot of learning related to how to promote that product, and what chefs here are looking for from a sustainability and a traceability perspective. All in all it was great and JETRO and the Japanese Government were very pleased with the results and we anticipate doing more of these projects in the future.
EdwardReilly
All right, great. Appreciate the color there. And then would also love to gain some more insight as to how drought conditions affect demand for verification services particularly with beef?
JohnSaunders
Yes. Another good question, Eddie. So the drought continues to impact all of our beef supply chains, who are literally making decisions daily about retention rates and how many of their calves and cows they’re going to be able to see through based on the reduced amount of feed they’ve got. At the same time that also impacts the supply of corn and the price of corn, which is the secondary part of the feeding process for most cattle. So what’s happening right now is we’re seeing extremely high input costs for our cow calf producers. And then the feed yards are facing extremely high input costs and probably double normal feeding costs. So there’s an extreme amount of pressure on all of our beef producers right now. And I think what we continue to see is verification being a benefit to producers even in this market that has a lot of volatility.
So most of our producers are continuing to participate in the programs. I think what’s a new factor that is pretty much across the board as we see all of our domestic retailers looking to incorporate some type of a sustainability claim. And from a cow calf producer, that typically means having a grazing management plan and having something in place related to how they deal with drought conditions and it typically involves reducing your numbers. So that’s probably a pretty long answer to it, it’s having a fairly dramatic effect on our customers. But again because verification offers a premium to even the high priced commodity traditional programs, there’s still a market for our producers to participate.
EdwardReilly
Got you. And then turning back to the Japanese Government Contract, what might the future work entail that you expect? Would it come from maybe introducing new products other than Yellowtail, or just kind of learn – love to learn more about what you guys are expecting for the future there?
JohnSaunders
Yes. We do anticipate that there’ll be more diversity related to other products that could be similar to Yellowtail. We could also follow-up with more promotion of Yellowtail. Again, it’s a product that’s fairly new and fairly exclusive to Japan, so they could want to continue to promote that. We also, in this quarter, we haven’t talked about it, but we’ve conducted our first fish care audit and that was done on a domestic operation here in the United States in Idaho.
And so over the next several months we’ll start to see some promotion of that and seafood’s unique because it has so many different types and varieties that are included in seafood that range from shrimp to crab to lobster, but also into fish. So when we look at specific product lines, like Yellowtail, I think, or even specific places like Japan, Japan probably has other products that they’ll want to promote as well. So it could come from Japan, it could come from Yellowtail, but it could also come from something that’s more domestic, more aquaculture focused as well.
EdwardRiley
Okay. Got you. And then for the care program, just curious as to how many customers you guys have sign on to that and how that relates to last quarter?
JohnSaunders
Yes. I don’t have the specifics right in front of me, Eddie. I will make sure we get those to you, but we’ve continued to see a real good growth. I want to say we’re up over 700 brands now in this – in the first quarter of 2022.
EdwardRiley
Okay, great. Thank you, and congrats.
JohnSaunders
Thanks.
Question2: Chris Brown
Hey, how you doing? Again on the balance sheet, I know you talked a little bit about continuing the buyback of stock. How do you think about that with respect to when you buyback based on share price and then balancing that with what you consider the appropriate cash balance versus acquisition pipeline if you come across anything interesting?
JohnSaunders
Good question. Yes, as I’ve said many times in the past, we’re constantly looking at potential acquisitions and 2021 was a great year. We continue to put a lot of cash in our balance sheet. In the first quarter of 2022 we continued to do that. Our pipeline for acquisitions is fairly lumpy. It’s hard for us to really determine when the next opportunity is going to come, as we’ve see what’s happening specifically with the market over the last several weeks. That seems like a good opportunity for us to continue to reward shareholders and buyback shares. So we will continue to use the capital as acquisitions become available or the best place we see to return value to shareholders.
ChrisBrown
Fair enough. Thank you, guys.
Operator
This concludes today’s conference. You may disconnect your lines at this time. Thank you for your participation.