Where Food Comes From, Inc. Q1 FY2023 Earnings Call

· Earnings call transcript and AI-powered summary

Financial Performance (Quarter Ended March 31, 2023)

  • Revenue: $5.3 million, down from $6.2 million in Q1 2022. However, Q1 2022 included a one-time $850,000 consulting deal with the Japanese government. Adjusting for that, revenue was essentially flat YoY.
  • Verification & Certification Revenue: Flat YoY. Impacted by severe drought reducing cattle herd sizes (leading to fewer verifications) and weather delays for audits and ear tag deliveries.
  • Gross Margin (Verification Segment): 42.1%, down from 46.3% in Q1 2022 due to lower revenue and continued wage inflation.
  • SG&A Expenses: Increased to $2.0 million from $1.8 million in Q1 2022. Increase due to resumed post-COVID event participation and training activities, including:
    • Attendance at industry trade shows
    • In-person auditor training sessions
    • NASDAQ bell-ringing ceremony in New York
  • Net Income: $0.1 million ($0.02 per share), down from $0.5 million ($0.08 per share) in Q1 2022.
  • Adjusted EBITDA: $0.4 million, down from $0.9 million YoY.

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Operator: Hello, and welcome to the Where Food Comes From First Quarter 2023 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to your host, Jay Pfeiffer, Investor Relations. Please go ahead, Jay. Jay Pfeiffer: Good morning, and welcome to the Where Food Comes From 2023 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 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. John Saunders: Good morning, and thanks for joining the call today.

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