Where Food Comes From, Inc. (WFCF) Q3 2025 Earnings Call Transcript
Total Revenue $7 million, a decline of $92,000 year-over-year. The decline was due to smaller herd sizes impacting core beef-related verification activity.
Revenue in Verification and Certification Segment $5.6 million, a 1% increase year-over-year. Growth was driven by increased activity across the portfolio, including pork, dairy, and egg verifications, as well as gains in organic, non-GMO, gluten-free, and Upcycled certifications.
Hardware Sales $1.2 million, a decline from $1.3 million year-over-year. The decrease was due to lower tag volumes caused by herd shrinkage and reduced tag subsidies, partially offset by growing demand for higher-priced value-added tags.
Operating Income $575,000, compared to $608,000 in the prior year. The slight decline was due to stable gross margins and reduced SG&A expenses, which offset higher compensation costs.
Net Income $1.1 million or $0.22 per share, compared to $500,000 or $0.09 per share year-over-year. The increase was driven by a $946,000 gain on the sale of Progressive Beef ownership and a $48,000 gain on digital assets.
Cash and Cash Equivalents $4.8 million, up from $2 million at 2024 year-end. The increase was due to cash proceeds of $1.8 million from the Progressive Beef stock sale and the return of 12,585 shares of common stock.
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Where Food Comes From (WFCF) Achieves 38% ROCE Growth Over 5 Years
- ROCE Analysis: Where Food Comes From reports a Return on Capital Employed (ROCE) of 16%, aligning with the industry average, indicating stable profitability on capital investments.
- Significant Growth Trend: Over the past five years, the company's ROCE has increased by 38%, suggesting that for every dollar of capital employed, the earnings generated are on the rise, reflecting improved profitability.
- Enhanced Capital Efficiency: The company has reduced its capital employed by 23%, indicating that Where Food Comes From is achieving higher returns while shrinking its asset base, showcasing improved operational efficiency.
- Stock Price Opportunity: Despite a 15% decline in stock price over the last five years, the ongoing growth in ROCE and enhanced capital efficiency may present a potential buying opportunity for investors, warranting further research.
WFCF Partners with Pangea to Launch Sustainable Leather Initiative
- Innovative Supply Chain Transparency: WFCF's collaboration with Pangea, Prime Pursuits, and Walmart launches the 'Transparency in Motion' initiative, introducing CARE Certified sustainable leather and marking the first level of traceability in North America.
- Value Addition Opportunity: By becoming CARE Certified, beef producers can enhance the value of their herds while connecting with consumers who increasingly prioritize sustainable practices, thus gaining a competitive edge in the market.
- Industry Transformation Opportunity: This collaboration provides automotive manufacturers with a chance to lead in sustainable sourcing, promoting the joint development of the beef and leather industries, reducing waste, and opening new marketing channels.
- Commitment to Sustainability: WFCF is dedicated to creating value for beef producers through innovation and transparency, driving sustainable development across the supply chain and fostering connections between consumers and ranchers.
