Where Food Comes From, Inc. Price & Performance (WFCF)

Statements about current and future financial performance, gross 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 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 websites for more information. I'll now turn the call over to John Saunders. Good morning and thanks for joining the call today. Total revenue in the fourth quarter was basically flat at $6,700,000 year over year. Verification and certification services revenue was down slightly as $5,400,000 versus $5,500,000 Product revenue increased 6% to 922,000 from $871,000 and professional services revenue was $360,000 versus $391,000 Gross profit in the fourth quarter declined 7% to $2,800,000 from $3,000,000 SG and A expense decreased slightly to $2,000,000 from 2,100,000.0 Net income increased to $961,000 or $0.18 per diluted share from $776,000 or $0.14 per diluted Where. Addition to an $80,000 or 47% increase in progressive B dividend income. Net income benefited from a $345,000 gain in the fair market value of Bitcoin Holdings. As you may recall, we invested $178,000 in Bitcoin Where At December 31 year end, bitcoin was trading at more than three times that level in the $93,000 range.

And thus the gain in fair market value. Onto our full year results. Total revenue for the year increased 2% to $25,700,000 from $25,100,000 a year ago. That total included verification and certification services up 6% to 20,600,000.0 from $19,400,000 Product revenue of $3,800,000 down 5% from $4,000,000 Where professional services revenue of $1,400,000 versus dollars By now, you know that our traditional beef related source and age business has been hard hit by cyclical herd size reductions over the past couple of years, and that is what's responsible for the slowing growth in our top line. We believe the decline in beef source and age verifications and related hardware sales is a temporary cyclical occurrence. And fortunately, in the meantime, we are experiencing rising demand in a number of other service offerings that has more than offset the lower than Source and Age activities. For example, we are seeing good growth in our Where certified program and beef and other approach [indiscernible] has become our fastest growing service with a 17% year over year increase in 2024 Where. We're also seeing upticks in organic certifications, California Prop 12 related audits and poultry and ag laying hens. On farm security and worker care audits in the dairy industry.

And finally, we continue to benefit from more customers taking advantage of our bundling capabilities made possible by our expanding services portfolio. The largest and most diverse in the industry. Gross profit for the full year was up slightly to $10,600,000 from $10,500,000 and our gross margins remain generally stable year over year. The big impact to profitability came in SG and A expense which grew by $530,000 year over year I want to provide some context around that increase because it's significant amount of this additional expense was allocated to areas that enhance our Although some of the increase was due to wage inflation and a very competitive job market, the bulk of the increase was due to stepped up marketing activities and some strategic hires of technical personnel who are strengthening our technology platform and tools to ensure we can manage the expected customer growth in both the short and long term.

Net income from the year was down slightly to $2,100,000 or $0.4 per diluted Where, versus net income of $2,200,000 or $0.39 per diluted share in 2023 Where. The company generated $2,700,000 in cash from operation in 2024 Where, versus $2,800,000 in 2023 Where. We entered 2025 with cash and cash equivalents of $2,000,000 and working capital of $2,400,000 Turning now to our efforts to return value to stockholders. For the full year, including stock buybacks and private purchase transactions, the company repurchased a total of 273,057 shares. Or of its stock for $3,300,000 or approximately $11.97 per share. Aggregate buybacks since plan inception twenty one quarters ago in purchases totaled 1,191,636 at a purchase price of $13,000,000 or approximately $10.92 per share. Our pace of buybacks and private purchases has accelerated with 73% of that total coming in the last three years. And finally, total value returned to stock holders via buybacks, private purchases and a special dividend over the past twenty one quarters totaled $13,900,000 We expect to continue taking advantage of solid cash flows to further reduce our Where at the same time investing in new programs and services designed to strengthen our beef business and accelerate the growth of other service offerings.

We look forward to providing more specifics on these initiatives in the coming In closing, we are now celebrating our thirtieth year anniversary in business. Our evolution has been steady, deliberate and very gratifying. In the founding stage, we identified a need in the cattle industry for traceability and began developing software to fill that need. In our next phase of growth, we made a bet that consumer demand for transparency would and the growing trend of food claims labeling. We also rapidly grew our cattle business and established our IMI Gloyu Global unit as the undisputed leader in cattle trade ability and claims verification in North America Where. We invested heavily in a technology platform and ultimately the much larger business that we expect to become. And we accomplish all of this through a combination of ground up organic initiatives and strategic acquisitions. That whole process took years to accomplish due to regulatory and myriad other Becoming an authorized certification body for a single standard, for example, can take up to three years to complete and begin generating a return on financial and human capital. That's why as of today, we have a large moat around our business and a business that would be very difficult to replicate.

Additionally, we are supported by consumer tailwinds around food safety, food traceability and food claims verification, We believe we are uniquely positioned as the go to provider for producers, CPGs, distributors and retailers. As a result of these years of innovation and investment, we now audit to more than 50 different standards. Far and away the most of any food verification businesses. And we can bundle any number of verifications to a lower compliance cost prices for our customers and food prices for consumers in general. We believe virtually all of these individual standards including a number of new offerings we have in the works, have the potential for strong growth in the coming years and that bodes well for our stockholders. And with that, I'll thank you again for joining the call today, and I'll open up the Where to questions. Operator? Thank you. There are no questions today. I would like to turn the conference back over for closing comments. Well, once again, we thank you thank you for your support and look forward to talking to you in a couple of months.

Have a great day. Thank you. This will conclude today's conference. You may disconnect your lines at this time.

Thank you.