Where Food Comes From Inc (WFCF) 2024 Q4 法說會逐字稿

Greetings. Welcome to Where Food Comes From 2024 year-end earnings call. (Operator Instructions) As a reminder, this conference is being recorded. It is now my pleasure to introduce Jay Pfeiffer, Investor Relations Director. Please go ahead, sir.

問候。歡迎參加「食物來自哪裡」2024 年年終收益電話會議。（操作員指示）提醒一下，本次會議正在錄音。現在我很高興介紹投資者關係總監傑伊‧普菲弗 (Jay Pfeiffer)。先生，請繼續。

Good morning, and welcome to the Where Food Comes From 2024 year-end earnings call. Joining me on the call today are CEO, John Saunders; President, Leann Saunders; and Chief Financial Officer, Dannette Henning.

早安，歡迎參加《食物來自哪裡》2024 年年終收益電話會議。今天參加電話會議的還有執行長約翰桑德斯 (John Saunders)、總裁 Leann Saunders 和財務長丹妮特亨寧 (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.

在本次電話會議中，我們將根據當前可能存在風險的預期、估計和預測做出前瞻性陳述。有關當前和未來財務表現、成長策略、客戶、商業機會、市場對我們產品和服務的接受度以及潛在收購的陳述均屬於前瞻性陳述。

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.

聽眾不應過度依賴這些聲明，因為有許多因素可能導致實際結果與我們的前瞻性聲明有重大差異。我們鼓勵您查看我們公開提交的文件以及我們的新聞稿和網站以獲取更多資訊。

I'll now turn the call over to John Saunders.

現在我將把電話轉給約翰·桑德斯。

Good morning, and thanks for joining the call today. Total revenue in the fourth quarter was basically flat at $6.7 million year-over-year. Verification and certification services revenue was down slightly at $5.4 million versus $5.5 million. Product revenue increased 6% to $922,000 from $871,000, and professional services revenue was $360,000 versus $391,000.

早上好，感謝您今天參加電話會議。第四季總營收與去年同期基本持平，為 670 萬美元。驗證和認證服務收入略有下降，為 540 萬美元，去年同期為 550 萬美元。產品收入從 871,000 美元增長 6% 至 922,000 美元，專業服務收入從 391,000 美元增至 360,000 美元。

Gross profit in the fourth quarter declined 7% to $2.8 million from $3 million. SG&A expense decreased slightly to $2 million from $2.1 million. Net income increased to $961,000 or $0.18 per diluted share from $776,000 or $0.14 per diluted share. In addition to an $80,000 or 47% increase in Progressive Beef dividend income, net income benefited from a $345,000 gain in the fair market value of bitcoin holdings.

第四季毛利從 300 萬美元下降 7% 至 280 萬美元。銷售、一般及行政費用支出從 210 萬美元略微下降至 200 萬美元。淨收入從 776,000 美元或每股 0.14 美元增至 961,000 美元或每股 0.18 美元。除了 Progressive Beef 股息收入增加 80,000 美元或 47% 之外，淨收入還受益於比特幣持有量公平市場價值增加 345,000 美元。

As you may recall, we invested $178,000 in bitcoin a few years ago when units were trading in the $25,000 range. At December 31, year-end, bitcoin was trading at more than 3 times that level in the $93,000 range and thus, the gain in fair market volume.

您可能還記得，幾年前，當比特幣交易價格在 25,000 美元左右時，我們投資了 178,000 美元。截至 12 月 31 日，年底，比特幣交易價格達到該水準的 3 倍多，達到 93,000 美元左右，因此公平市場交易量有所增加。

On to our full year results. Total revenue for the year increased 2% to $25.7 million from $25.1 million a year ago. That total included verification and certification services, up 6% to $20.6 million from $19.4 million. Product revenue of $3.8 million, down 5% from $4 million. And professional services revenue of $1.4 million versus $1.7 million.

了解我們的全年業績。全年總收入從一年前的 2,510 萬美元成長 2% 至 2,570 萬美元。該總額包括驗證和認證服務，從 1,940 萬美元增加 6% 至 2,060 萬美元。產品收入為 380 萬美元，較 400 萬美元下降 5%。專業服務收入分別為 140 萬美元和 170 萬美元。

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.

現在，您知道，我們傳統的與牛肉相關的來源和年齡業務在過去幾年中受到了周期性牛群規模減少的嚴重打擊，這就是導致我們營業收入增長放緩的原因。我們認為，牛肉來源和年齡驗證以及相關硬體銷售的下降只是暫時的周期性現象。幸運的是，同時，我們對許多其他服務產品的需求也在不斷增長，這些需求已經足以抵消低於來源和年齡活動的影響。

For example, we are seeing good growth in our CARE Certified program in beef and other proteins. And as announced last month, our Upcycled Certified program has become our fastest-growing service with the 17% year-over-year increase in 2024.

例如，我們的牛肉和其他蛋白質的 CARE 認證計劃取得了良好的成長。正如上個月宣布的那樣，我們的 Upcycled 認證計劃已成為我們成長最快的服務，到 2024 年將年增 17%。

We're also seeing upticks in organic certifications, California Prop 12-related audits and poultry and egg-laying hens, on-farm security and worker of 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.

我們還看到有機認證、加州第 12 號提案相關審計以及家禽和產蛋母雞、農場安全和乳製品行業 CARE 審計工人的數量有所增加。最後，我們繼續受益於更多客戶利用我們不斷擴展的服務組合（業內規模最大、最多樣化）實現的捆綁功能。

Gross profit for the full year was up slightly to $10.6 million from $10.5 million, and our gross margins remained generally stable year-over-year. The big impact to profitability came in SG&A expenses, which grew by $530,000 year-over-year. I want to provide some context around that increase because a significant amount of this additional expense was allocated to areas that enhance our ability to execute on our growth plans.

全年毛利從 1,050 萬美元小幅上升至 1,060 萬美元，毛利率年比基本保持穩定。對獲利能力影響最大的是銷售、一般及行政費用，該費用年增了 53 萬美元。我想提供一些有關這一增長的背景信息，因為這些額外支出中的很大一部分被分配到了增強我們執行增長計劃能力的領域。

Although some of the increase was due to wage inflation in 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.

雖然部分成長是由於競爭激烈的就業市場中的薪資上漲，但大部分成長是由於加強了行銷活動和一些技術人員的策略性聘用，他們正在加強我們的技術平台和工具，以確保我們能夠管理短期和長期預期的客戶成長。

Net income from the year was down slightly to $2.1 million or $0.40 per diluted share versus net income of $2.2 million or $0.39 per diluted share in 2023. The company generated $2.7 million in cash from operations in 2024 versus $2.8 million in 2023. We entered 2025 with cash and cash equivalents of $2 million and working capital of $2.4 million.

全年淨收入略微下降至 210 萬美元或每股攤薄收益 0.40 美元，而 2023 年的淨收入為 220 萬美元或每股攤薄收益 0.39 美元。該公司 2024 年的營運現金流為 270 萬美元，而 2023 年為 280 萬美元。到 2025 年，我們的現金和現金等價物為 200 萬美元，營運資金為 240 萬美元。

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 of its stock for $3.3 million or approximately $11.97 per share. Aggregate buyback since planned inception 21 quarters ago, including private purchases, totaled 1,191,636 shares at a purchase price of $13 million or approximately $10.92 per share.

現在談談我們為股東帶來回報的努力。全年來看，包括股票回購和私人購買交易，該公司共回購了 273,057 股股票，回購金額為 330 萬美元，約每股 11.97 美元。自 21 個季度前計畫開始以來，包括私人購買在內的總回購量為 1,191,636 股，購買價格為 1,300 萬美元，約合每股 10.92 美元。

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 stockholders via buybacks, private purchases and special dividend over the past 21 quarters totaled $13.9 million.

我們的回購和私募購買步伐加快，其中 73% 發生在過去三年。最後，過去 21 個季度透過回購、私人購買和特別股息返還給股東的總價值達到 1,390 萬美元。

We expect to continue taking advantage of solid cash flows to further reduce our float, while 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 months.

我們希望繼續利用穩健的現金流進一步減少我們的浮動資金，同時投資於旨在加強我們的牛肉業務並加速其他服務產品成長的新計劃和服務。我們期待在未來幾個月內提供有關這些舉措的更多細節。

In closing, we are now celebrating our 30th 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 extend to other areas of the food supply chain, and we began building out our verification services portfolio to address other food groups and the growing trend of food claims labeling.

最後，我們正在慶祝公司成立 30 週年。我們的進化是穩步的、深思熟慮的並且非常令人滿意的。在創始階段，我們發現了牛業對可追溯性的需求，並開始開發軟體來滿足這項需求。在我們下一階段的成長中，我們確信消費者對透明度的需求將擴展到食品供應鏈的其他領域，我們開始建立我們的驗證服務組合，以解決其他食品類別和食品聲明標籤日益增長的趨勢。

We also rapidly grew our cattle business and established our IMI Global unit as the undisputed leader in cattle traceability in claims verification in North America. We invested heavily in a technology platform capable of managing a diverse services portfolio and ultimately, the much larger business that we expect to become. And we accomplished all of this through a combination of ground-up organic initiatives and strategic acquisitions.

我們的牛業務也迅速成長，並建立了 IMI Global 部門，成為北美索賠驗證領域牛隻可追溯性無可爭議的領導者。我們投入巨資打造了一個能夠管理多樣化服務組合的技術平台，並最終實現我們期望的更大規模的業務。我們透過自下而上的有機舉措和策略性收購相結合的方式實現了這一切。

That whole process took years to accomplish due to regulatory and a myriad of other issues. 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.

由於監管和無數其他問題，整個過程耗時數年才完成。例如，成為單一標準的授權認證機構可能需要長達三年的時間才能完成並開始產生財務和人力資本回報。這就是為什麼截至今天，我們的業務擁有龐大的護城河，而且我們的業務很難被複製。

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.

此外，我們也得到了食品安全、食品可追溯性和食品聲明驗證等方面消費者的支持。我們相信，我們擁有獨特的優勢，可以成為生產商、快速消費品公司、經銷商和零售商的首選供應商。經過多年的創新和投資，我們現在可以按照 50 多種不同的標準進行審核，遠遠超過任何食品驗證企業。

And we can bundle any number of verifications to 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.

我們可以捆綁任意數量的驗證，以降低客戶的合規成本價格和一般消費者的食品價格。我們相信，幾乎所有這些單獨的標準，包括我們正在開發的許多新產品，都具有未來幾年強勁成長的潛力，這對我們的股東來說是個好兆頭。

And with that, I'll thank you again for joining the call today, and I'll open up the call to questions. Operator?

最後，我再次感謝大家參加今天的電話會議，現在我開始回答大家的提問。操作員？

(Operator Instructions) There are no questions today. I would like to turn the conference back over for closing comments.

（操作員指示）今天沒有問題。我想將會議轉回並進行總結發言。

Well, once again, we thank you for your support and look forward to talking to you in a couple of months. Have a great day.

好吧，我們再次感謝您的支持，並期待幾個月後與您交談。祝你有美好的一天。

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

謝謝。今天的會議到此結束。現在您可以斷開線路。感謝您的參與。

Thank you.

謝謝。