where food comes from, inc.wherefoodcomesfrom.com › wp-content › uploads › 2015 › 11 ›...
TRANSCRIPT
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WhereFoodComesFrom,Inc.
WhereFoodComesFrom,Inc.D.B.A.IMIGlobal,Inc.Headquarters:CastleRock,ColoradoOTCQB:WFCFOctober2015
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Forward-LookingStatements
ThispresentaJoncontains"forward-lookingstatements"withinthemeaningoftheU.S.PrivateSecuriJesLiJgaJonReformActof1995,basedoncurrentexpectaJons,esJmatesandprojecJonsthataresubjecttorisk.Forward-lookingstatementsareinherentlyuncertain,andactualeventscoulddiffermateriallyfromtheCompany’spredicJons.ImportantfactorsthatcouldcauseactualeventstovaryfrompredicJonsincludethosediscussedinourSECfilings.Specifically,statementsinthispresentaJonaboutfinancialperformance,newbusinessdevelopment,growthpotenJal,marketleadership,andtheimpactandpotenJaloftheCompany’sproductsandservicesonthemarketplaceandcustomersareforward-lookingstatementsthataresubjecttoavarietyoffactors,includingavailabilityofcapital,personnelandotherresources;compeJJon,governmentalregulaJonofthebeefindustry,themarketforbeefandotherfactors.Readersshouldnotplaceunduerelianceontheseforward-lookingstatements.TheCompanyassumesnoobligaJontoupdateitsforward-lookingstatementstoreflectnewinformaJonordevelopments.ForamoreextensivediscussionoftheCompany’sbusiness,pleaserefertotheCompany’sSECfilingsatwww.sec.gov.
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TheTrend
“I’veneverseenastrongerdesirefor(consumers)knowingwheretheirfoodiscomingfrom…” --WholeFoodsCEOWalterRobb“Ourcustomerswanttoknowmoreabouthowtheirfoodisgrownandraised,andwhereitcomesfrom.Walmartiscommiaedtousingourstrengthstodrivetransparencyandimprovementacrossthesupplychain….helpingtoputourcustomersinchargeoftheirfoodchoicesbyprovidingclear,accurateinformaJonaboutfoodingredients. --KathleenMcLaughlin,WalmartVP,Sustainability
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CompanyOverview
• #1providerofindependent,third-partytraceabilityandverificaJonoffoodproducJonpracJces
• CollectandleverageinformaJononwhen,where,howandbywhomfoodwasraised
• 10,000+customers:ranchers,aucJonbarns,feedyards,dairies,packers,distributors,retailers,restaurants
• CustomersincludetopJerplayersinfoodindustry• RecurringrevenuemodelgeneraJngstrongcashflowsto
supportprofitableorganicgrowthandfundM&Aprogram
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2ComplementaryLinesofBusiness
CoreAudiFngBusiness• On-siteauditsofranches,
farms,feedyardsandpackingplantsin41states
• Industry’slargestporholioofaudiJngstandards
• 10,000customers&growing
• Recurringrevenuemodel• OrganicandM&Agrowth
WFCFLabelingProgram• Retailersandrestaurants
displaylabelandQRcodethatgivesconsumerssourceinfoonfoodtheypurchase
• $.01to$.03perpoundfees• IniJalcustomers:grocery,
restaurant,fooddistribuJon
$2.7B addressable market $100M addressable market
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VerificaJonServices• SourceandAge• Non-HormoneTreatedBeef(NHTC)• HighQualityBeefQuota• NeverFedBetaAgonists• USDANeverEver3NaturalBeef• USDAGrass-FedBeef• AmericanGrass-FedAlliance• VegetarianFed• FlaxFed• SO100FeedClaims• TysonNatural• GlobalAnimalPartnership™• Non-GMOProjectVerificaJon• USDANOPOrganic• FoodAlliance™CerJficaJon• ProgressiveBeef™Standard• VerifiedGreen™
• AnimalWelfareandWorkerCareAudits• FarmCheck™Program• BeefQualityAssuranceVerified• AmericanHumane™CerJfied• GlutenFreeCerJficaJon• NaJonalChickenCouncilAudits• NaJonalTurkeyFederaJonAudits• WholeFoods®EggLayingHensStandards• UnitedEggProducersCerJfied• SafeFeed/SafeFoodProgram• HazardAnalysisCriJcalControlPoint• SafeQualityFood(SFQ)• On-FarmSecurityAudits• GoodEnvironmentalLivestockProducJon
PracJces• PorkfortheEuropeanUnion• FeedVerified–NewinSeptember2015
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FoodGroupCoverage
CurrentCoverage• Beef• Pork• Lamb• Bison• Poultry
• Produce• Dairy• Eggs• Grain
FutureCoverage• Seafood• Beverages• Produce
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OurCustomers
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MarketDrivers
Growthstrategysupportedbylong-termtrends• Consumerdemandfortransparencyduetofoodsafetyissues• Increasingconsumerinterestinhumanehandling,organic,glutenfree,
anJbioJcfree,sustainableagricultureandotherstandards• Producers,packers,distributorsandretailersviewverificaJon,
idenJficaJonandtraceabilityaskeycompeJJvedifferenJators• MajorQSRandretailchainsadopJngtraceabilityfollowingfoodscandals• USDA’sAnimalDiseaseTraceabilityprogramwillforce800,000caale
producerstoimplementsourceauditsinnextfewyears• MandatoryverificaJon,idenJficaJonandtraceabilityforkeyexport
markets-Korea,RussiaandtheEuropeanUnion• Technologicaladvances,includingRFID,aremakingverificaJon,
idenJficaJonandtraceabilitysoluJonspossiblethroughoutthefoodchainconJnuum
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MarketDrivers-ConJnued
• BSE–MadCowDisease• E-coli• PinkSlime• Salmonella–Cantaloupes• Swineflu• GestaJoncrates• TacoBellmeatcontent
• GMOlabeling-CAProp37• Europeanhorsemeat• Humanehandlingscandals• Healthandwellness
awareness• Mislabeledseafood• Expiredmeatinsupplychain
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Non-GMOOpportunity
GMO–GeneFcallyModifiedOrganisms• Non-GMOProjectislargestindustrygroup–commiaedtobuildingnon-GMOfoodsupplywithverifiedproductchoices
• 32USstateshavesomekindofGMOballotiniJaJve• WholeFoodscommiaedtomandatoryGMOlabelingby2018
• WhereFoodComesFromisoneofonlythreenon-GMOapprovedauditorsnaJonally
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RecentHighlights
NewServiceOfferingFeedVerified• Livestockfeedemergingaslatestrisk
infoodsupplychain• FeedVerifiedgivesfeedproducers
andbuyersaresourcetoconfirmapprovedfeedproductsandingredientstoavoidcostlymistakes
• GlobalanimalnutriJonleaderAlltechisfirstcustomerfornewservice
• Revenuemodel:$250-$500perproductorclaim
• Addressablemarketincludesfoodproducers,feedproducersandtheirsuppliers
NewCustomerMcDonald’sCorporaFon• WFCFdesignedandisimplemenJng
rolloutofpilotprogramforsustainablebeefinCanada
• 100CanadianranchershaveregisteredtoparJcipate
• WFCFhasverified20%ofthemascompliantwithMcDonald’ssustainabilityrequirements
• Targetisupto200compliantbeefproducersbyspringof2016
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GrowthStrategy
• Cover more food groups than any other provider – Currently: beef, lamb, pork, poultry, dairy, eggs, produce, grain – Future: seafood, beverages, produce
• Offer solutions for ALL players in food supply chain – Feed and input providers, ranchers, producers, packers, auction
barns, processors, distributors, retailers, consumers
• Expand on industry’s largest solutions portfolio – Currently auditing to 32 certification standards – most in industry
• Continue organic growth – Leverage ‘bundling’ capability to aggressively pursue new
customers; sustain recurring revenue model, high retention rates
• Continue M&A growth – Expand footprint, add new services, food groups and revenue
streams through selective acquisitions
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M&AAcJvity-AudiJng
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M&AResultsSummary
• 3,700newcustomers• $3.0millioninaddiJonalannualizedrevenue• 6newaudiJngstandards• 4newfoodgroups• FurtherdistancefromcompeJJon• LucraJve,highmarginservicesbundling• AddiJonalM&AacJvityanJcipated
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WhereFoodComesFromSourceVerified®LabelingProgram
Howitworks:PackagedisplaysWhereFoodComesFromSourceVerified®labelindicaJngproduct’soriginhasbeenverifiedbyanindependentthirdparty.ConsumerscansQRcodetoaccessinformaJon
RevenueModel:FooddistributorsorretailerspayWhereFoodComesFromperpoundroyalJes,licensefees,servicefees,WebadverJsingfees.
onthefamiliesthatraisedthefoodandthepracJcesemployedbythosefamilies.
Addressable Market: Estimated at $2.7 billion based on annual beef, pork and chicken production in U.S.
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LabelingCustomers
Heinen’s Fine Foods 26 stores in Ohio and Illinois
Initial WFCF labeling program grocery customer for all products in
meat case
220+ grocery stores and food distributors nationally have adopted the Where Food Comes From Source Verified®
labeling program
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RevenueGrowth
2006 2007 2008 2009 2010 2011 2012 2013 2014
$4M
$6M$5.8M
$8.8M
$1.1M $1.7M
$2.4M $2.7M
$3.3M
$4.2M
$2M
Note: To more accurately illustrate results from continuing operations, the financial data presented excludes CattleNetwork and CattleStore operations that were divested in 2008.
$5.3M
$8M
$10M
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GrossProfit
2006 2007 2008 2009 2010 2011 2012 2013 2014
$2.0M
$.7M
$1.2M $1.3M $1.3M
$1.8M
$2.3M
$1.0M
$2.8M
$3.0M
$2.7M
$3.8M
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SG&Aas%ofRevenue
2006 2007 2008 2009 2010 2011 2012 2013 2014
200%
46%
192%
117%
60% 55% 44%
40%
150%
100%
50%
45%
39%
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AdjustedEBITDA
$1.0M
‘06 ‘07 ‘08
‘09 ‘10 ‘11 ‘13
$148,500
$573,600
‘14
$1,470,000
$654,200
$67,700
$112,300
$442,900
$737,800
$0
$1.0M
$601,700
‘12
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Year-to-DateFinancialHighlights
ThirdQuarterHighlights(Yearoveryear)• Revenueup18%to$3.1millionfrom$2.6million
• Grossmarginsincreasedto48%from46%
• Netincomeof$181,600,downfrom$245,100
• OperaJngcashflowup51%to$0.5millionfrom$0.3million
Nine-MonthHighlights(Yearoveryear)• Revenueup28%to$7.6millionfrom$6.0million
• Grossmarginsincreasedto48%from44%
• Netincomeup131%to$380,600from$164,900
• OperaJngcashflowup165%to$1.4millionfrom$0.5million
Data presented is for the third quarter and nine-month period ended September 30, 2015.
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BalanceSheetHighlights
AsofSeptember30,2015• Workingcapital:$4,294,100• Cash:$3,985,300• Longtermdebt:$10,400• Stockholders’equity:$6,724,000
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SelectedStockData• Traded–OTCQB:WFCF• 52weekstockpricerange–$2.15-$3.83• Averagedailytradingvolume–7,848• Commonsharesoutstanding–23,813,295• Approx.management/boardownership–12,400,000• MarketCap–$71,400,000• Fiscalyear–December31
Note: Certain figures are rounded. Valuation and other data is subject to change on a daily basis and is presented as a general reference as of October 2015.
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InvestmentConsideraJons
• WFCFisthedominantverificaJonindustryplayer–intherightplaceattherightJmewithconsumerdemandfor,andgovernmentinterestin,increasedinformaJonandtransparencyinthefoodchainatanall-Jmehigh
• CompanyexecuJngonstrategytobeone-stop-shopforallcerJficaJonstandardsinallfoodgroups
• Scalablerecurringrevenuemodelwithlarge,growingcustomerbaseposiJonscompanyforlong-termprofitgrowth
• WellcapitalizedcompanywithJghtsharestructureandaccomplishedmanagementteamandboardthatownssignificantstakeinCompany
• WFCFisonlypubliclytradedpureplayinfoodverificaJonandtraceabilityindustry
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WhereFoodComesFrom
For more information, contact:
Pfeiffer High Investor Relations, Inc. Jay Pfeiffer
303-880-9000 or [email protected]