Earnings Labs

Where Food Comes From, Inc. (WFCF)

Q2 2022 Earnings Call· Thu, Aug 11, 2022

$12.30

-1.13%

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Same-Day

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1 Week

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1 Month

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Transcript

Operator

Operator

Greetings. Welcome to Where Food Comes From's Second Quarter Earnings Call. At this time, all participants will be in listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions]. Please note this conference is being recorded. At this time, I'll turn the call over to Jay Pfeiffer, Investor Relations. Jay, you may now begin.

Jay Pfeiffer

Analyst

Good morning, and welcome to the Where Food Comes From 2022 second 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

Analyst

Good morning, and thanks for joining the call today. This morning, we released our second quarter financial results before the market opened and we were pleased to report another quarter of profitable growth. Revenue in the second quarter grew 4% to $5.3 million from $5.1 million in the same quarter last year. Verification and certification services revenue was up 7% year-over-year to $4 million from $3.7 million. Tag sales declined 9% to $900,000 from $1 million and software and related consulting services was flat at approximately $500,000 in the quarter. The decline in tag sales was due primarily to persistent drought conditions that have caused cattle ranchers to reduce their herd sizes that in turn results in fewer cattle's being born which translates into lower tag sales. For the six-month period revenue increased 20% year-over-year to $11.5 million from $9.6 million that included verification and certification services up 11% to $7.7 million from $7 million and tag sales up 12% to $1.9 million from $1.7 million, software and consulting revenue nearly doubled to $1.9 million. The increase in verification and certification revenue resulted as usual from a combination of strong demand from our beef exports and the appeal domestic producers of our bundling capabilities that both save and make them money and reduce the time they have to invest in the audit process. As in the first quarter, we also saw renewed momentum in port, poultry and dairy and egg audits, as producers continued to open their facilities to outside visitation in the aftermath of the COVID shutdowns. The increase in tag sales year-to-date was based on a strong first quarter performance that was more than compensated for the second quarter decline. Going forward, we view the drought impact as in -- as transition -- transitory, and expect to have…

Operator

Operator

Thank you. At this time, I'll hand it back to management for further remarks.

John Saunders

Analyst

Thank you all for joining the call today. We'll talk to you in a couple months. Take care.

Operator

Operator

Thank you. This will conclude today's conference. You may disconnect your lines at this time. Thank you for your participation.