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 8, 2025
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> Identification No.) |
| 202 6th 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 |
Emerging growth company ☐
| 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 8, 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 ended March 31, 2025.
| Item 9.01 | Financial Statements and Exhibits |
|---|---|
| (d) | Exhibits |
| --- | --- |
| Exhibit<br> No. | Description |
| --- | --- |
| 99.1 | Press Release issued and dated May 8, 2025 |
| 99.2 | Transcript for May 8, 2025 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. | ||
|---|---|---|
| (Registrant) | ||
| By: | /s/ Dannette Henning | |
| Date:<br> May 12, 2025 | Dannette<br> Henning | |
| Chief<br> Financial Officer |
Exhibit 99.1
Where Food Comes From, Inc. Reports 2025 FirstQuarter Financial Results
First Quarter Highlights – 2025 vs. 2024
| ● | Verification and certification revenue $4.2 million vs. $4.4 million |
|---|---|
| ● | Product sales flat at $0.7 million |
| ● | Total revenue $5.3 million vs. $5.6 million |
| ● | Net income $31,000 vs. $178,000 |
| ● | Diluted EPS $0.01 vs. $0.03 |
| ● | Company bought back 31,345 shares of its common stock at a cost of $383,000 |
CASTLE ROCK, Colo., May 08, 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 first quarter ended March 31, 2025.
“Our beef verification business, which represents approximately one-half of revenue mix, continued to feel the effects of smaller herd sizes and record high beef prices,” said John Saunders, CEO. “In addition, beef exports to China have virtually ceased due to tariffs, a situation that’s likely to put pressure on beef verification activity until trade issues between the U.S. and China are resolved. We have also experienced disruptions in our poultry and dairy cow verification business due to high path avian influenza. We view these headwinds as temporary and, in the meantime, are pleased to have maintained gross margin stability and overall profitability due to our disciplined approach to cost management.
“On another positive note, we are making good progress in other aspects of our business that underscores the importance of our product mix diversification,” Saunders added. “We have recently added two major food retailers to our WFCF labeling program, which will boost our licensing revenue and increase our visibility among consumers of premium beef products. In addition, our exclusive Upcycled Certified® program remains our fastest growing verification standard as consumer demand for upcycled food products continues to grow.
“Based on our wide competitive moat and standing as the most diversified provider of food verifications, we remain confident in our long-term prospects for profitable growth. Accordingly, we continued to buy back shares in the first quarter – a total of 31,345 shares at a cost of $383,000. Since inception of our buyback program, we have repurchased more than 1.2 million shares.”
First Quarter Results – 2025 vs. 2024
Total revenue in the first quarter ended March 31, 2025, declined to $5.3 million from $5.6 million.
Revenue mix included:
| ● | Verification and certification services revenue of $4.2 million vs. $4.4 million. |
|---|---|
| ● | Product revenue flat at $0.7 million. |
| ● | Professional services revenue flat at $0.4 million. |
Gross profit in the first quarter was $2.2 million vs. $2.3 million while gross margin remained stable at 41.6%.
Selling, general and administrative expense was flat at $2.1 million.
Net income was $31,000, or $0.01 per diluted share, vs. $178,000, or $0.03 per diluted share.
Cash provided by operations in the first quarter was $0.6 million vs. $0.7 million.
The Company bought back 31,345 shares of its common stock during the first quarter at a cost of $383,000
Management will conduct a conference call today at 10:00 a.m. Mountain Time to discuss these financial results.
Dial-in numbers for the conference call:
Domestic Toll Free: 1-877-407-8289
International: 1-201-689-8341
Conference Code: 13753639
Phone replay:
A telephone replay of the conference call will be available through May 22, 2025, as follows:
Domestic Toll Free: 1-877-660-6853
International: 1-201-612-7415
Conference Code: 13753639
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. 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 for a resolution to trade and tariff issues, ability to continue positive gross margins and net income, and to maintain a wide competitive moat, 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 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 (Unaudited)
| Three months ended March 31, | ||||||
|---|---|---|---|---|---|---|
| (Amounts in thousands, except per share amounts) | 2025 | 2024 | ||||
| Revenues: | ||||||
| Verification and certification service revenue | $ | 4,182 | $ | 4,434 | ||
| Product sales | 702 | 733 | ||||
| Professional services | 389 | 415 | ||||
| Total revenues | 5,273 | 5,582 | ||||
| Costs of revenues: | ||||||
| Costs of verification and certification services | 2,395 | 2,515 | ||||
| Costs of products | 428 | 434 | ||||
| Costs of professional services | 255 | 304 | ||||
| Total costs of revenues | 3,078 | 3,253 | ||||
| Gross profit | 2,195 | 2,329 | ||||
| Selling, general and administrative expenses | 2,053 | 2,068 | ||||
| Income from operations | 142 | 261 | ||||
| Other income/(expense): | ||||||
| Dividend income from Progressive Beef | 4 | 7 | ||||
| Loss on foreign currency exchange | (76 | ) | - | |||
| Other income, net | - | (2 | ) | |||
| Interest expense | (1 | ) | (1 | ) | ||
| Income before income taxes | 69 | 265 | ||||
| Income tax expense | 38 | 87 | ||||
| Net income | $ | 31 | $ | 178 | ||
| Per share - net income: | ||||||
| Basic | $ | 0.01 | $ | 0.03 | ||
| Diluted | $ | 0.01 | $ | 0.03 | ||
| Weighted average number of common shares outstanding: | ||||||
| Basic | 5,212 | 5,480 | ||||
| Diluted | 5,230 | 5,500 |
Where Food Comes From, Inc.
Balance Sheets (Unaudited)
| March 31, | December 31, | |||||
|---|---|---|---|---|---|---|
| (Amounts in thousands, except per share amounts) | 2025 | 2024 | ||||
| Assets | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | $ | 2,238 | $ | 2,012 | ||
| Accounts receivable, net of allowance | 1,835 | 1,826 | ||||
| Inventory | 930 | 1,002 | ||||
| Prepaid expenses and other current assets | 724 | 705 | ||||
| Total current assets | 5,727 | 5,545 | ||||
| Property and equipment, net | 698 | 737 | ||||
| Right-of-use assets, net | 1,987 | 2,067 | ||||
| Equity investments | 1,191 | 1,191 | ||||
| Intangible and other assets, net | 1,713 | 1,810 | ||||
| Digital assets | 578 | 654 | ||||
| Goodwill, net | 2,946 | 2,946 | ||||
| Deferred tax assets, net | 372 | 356 | ||||
| Total assets | $ | 15,212 | $ | 15,306 | ||
| Liabilities and Equity | ||||||
| Current liabilities: | ||||||
| Accounts payable | $ | 546 | $ | 468 | ||
| Accrued expenses and other current liabilities | 871 | 611 | ||||
| Deferred revenue | 1,744 | 1,748 | ||||
| Current portion of finance lease obligations | 15 | 15 | ||||
| Current portion of operating lease obligations | 339 | 337 | ||||
| Total current liabilities | 3,515 | 3,179 | ||||
| Finance lease obligations, net of current portion | 22 | 25 | ||||
| Operating lease obligation, net of current portion | 2,084 | 2,169 | ||||
| Total liabilities | 5,621 | 5,373 | ||||
| Commitments and contingencies | ||||||
| Equity: | ||||||
| Common stock | 7 | 7 | ||||
| Additional paid-in-capital | 11,391 | 11,381 | ||||
| Treasury stock | (13,845 | ) | (13,462 | ) | ||
| Retained earnings | 12,038 | 12,007 | ||||
| Total equity | 9,591 | 9,933 | ||||
| Total liabilities and stockholders’ equity | $ | 15,212 | $ | 15,306 |
Exhibit 99.2
Where Food Comes From, Inc.
2025 First Quarter Conference Call
Call date: Thursday May 8, 2025
Call time: 10:00 a.m. Mountain Time
Jay Pfeiffer – Investor Relations
Good morning and welcome to the Where Food Comes From 2025 first quarter 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 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.
The headwinds we reported for most of last year carried into the first quarter of 2025 and resulted in an approximate 6% year-over-year decline in total revenue for the period.
The majority of that decline came in our verification and certification services segment, where revenue was $252,000 lower than in Q1 last year – a reflection of fewer cattle moving through the system due to a combination of cyclical herd size reduction and the impact of severe drought conditions in certain cattle producing regions. Lower volumes mean fewer initial taggings and fewer opportunities to earn right-to-ship and other fees as cattle move through the supply chain. As a reminder, our beef verification business represents roughly 50% of our revenue mix, so disruption in this segment can have an outsize impact on overall results.
Again, I want to emphasize that we view herd size reduction as a cyclical – and therefore temporary – situation that is expected to swing back in the other direction.
I’ll also note that beef prices have never been higher than they are today, driven by a combination of herd shrinkage, tight supplies, strong consumer demand, and trade issues that began emerging in the first quarter. As a result, ranchers are having no problem finding buyers for their cattle and it’s possible that some may become less motivated to engage with us for certain verifications, although thus far our customer retention rates – always in the high 90% range – are holding steady.
During the first quarter we also experienced disruptions in our poultry and dairy cow verification businesses due to avian influenza outbreaks that have resulted in high mortality rates at many of our poultry customer operations. Some of this impact has been offset by increased demand for our biosecurity services that help producers prevent and/or contain disease outbreaks.
The good news is, despite all the factors I just cited, revenue declined by less than 6% and gross margins remained fairly stable at 41.6%. We attribute this to our disciplined approach to cost management that also extends to our SG&A line, which was flat year over year at $2.1 million.
Net income in the quarter was $31,000, or $0.01 per diluted share, compared to $178,000, or $0.03 per diluted share, in the same quarter last year. More than half of the decline consisted of a $76,000 non-cash charge on digital assets in the first quarter, so on an adjusted basis we are satisfied with our bottom line given the myriad headwinds we’re experiencing.
We continued to buy back shares in the first quarter – a total of 31,345 shares at a cost of $383,000.
By the way, the digital assets I just referred involve the modest (yet thus far, very profitable on paper) investment in bitcoin that we made a few years ago when it was a rarity for public companies to buy cryptocurrencies. We did not mention this in our news release this morning because Yahoo Finance, where some investors get their stock quotes and news, has a policy of not publishing news releases that mention the word “bitcoin” or numerous other cryptocurrency related terms. We discovered Yahoo’s policy last quarter when our Q4 earnings release didn’t appear on Yahoo Finance due to our reference to the $345,000 gain in fair market value of our bitcoin holding.
Interestingly, about three weeks ago, a Yahoo Finance article referenced a Bitwise report indicating bitcoin purchases by public companies surged 16% in the first quarter of 2025 and that 79 publicly traded companies now own approximately 688,000 BTC valued at $57 billion.
But back to our first quarter: As we discussed on our last earnings call, lower beef verification activity – and this quarter, lower poultry verification activity as well – is being partially offset by growth in other aspects of our business.
One of those is our Upcycled Certified® program, the world’s first and largest certification standard for upcycled food and one of the fastest-growing certification seals in the food industry. Upcycling enables producers to reduce food waste and lower their carbon footprint and affords environmentally conscious consumers a tangible solution to shop sustainably for eco-friendly products. It is an international trend with 14 countries now participating in an effort to reduce an estimated $1 trillion in global food waste. The current global market for Upcycling is $46 billion and is expected to grow to nearly $75 billion by 2029.
Upcycled Certified – an exclusive, wholly-owned offering of Where Food Comes From – continues to be our fastest growing service offering, with total certifications having grown 17% YOY in 2024 and accelerating to 10% growth in just the first quarter of this year. Today we are conducting certifications for 111 companies and 628 products, with customers ranging from start-up food, beverage and pet food makers to established CPGs such as Del Monte and Kerry Ingredients. And again, Upcycled Certified is a great fit for our bundling strategy since Upcycled Certified customers often contract for Organic and Non-GMO Project certifications.
Another exciting growth business for us that we haven’t talked about in a while is our fee-based retail labeling program for protein products. You might recall that our initial customer for this program – the Heinen’s grocery chain in the Midwest – helped us pioneer the concept of connecting producers directly with consumers who want to know more about where, how and by whom their food is produced.
We have been targeting mass market and high-end regional retailers who want to strengthen and enhance their relationships with shoppers by partnering with a third party – which is us – to tell the story behind the protein products they offer. Today, we are pleased to announce the addition of two prominent retailers to our program that will display our CARE Certified labeling on products in their beef case. One of the retailers will also display WFCF Source Verified and Non-hormone Treated labeling on their products.
The initial launch with these two customers will include approximately 20 stores with the expectation of adding another 111 locations during the current year. Depending on the success of the 2025 rollout, there is potential for hundreds of additional stores from one of these customers.
The CARE Certified program is a comprehensive sustainability certification that supports producers, processors, and retailers in meeting growing consumer expectations for responsibly sourced products. CARE standards are tailored to reflect the unique characteristics of each operation, considering regional climate, natural resources, production methods, workforce practices, and community engagement.
In addition to adding to our licensing revenue stream, these new customer programs will add visibility and enhance the brands of Where Food Comes From among tens of thousands of retail consumers.
So, with that, I’ll open the call to questions.
Operator
Thank you. [Operator Instructions] There are no questions at this time. I’ll hand the call back to John Saunders for closing remarks.
John Saunders
Well, thank you all for your participation and support. We’ll talk to you again soon.
Operator
This concludes today’s conference. You may disconnect your lines at this time. Thank you for your participation.