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Segments
 6 Months Ended
Jun. 30, 2021
Segment Reporting [Abstract]  
Segments

Note 12 - Segments

 

With each acquisition, we assess the need to disclose discrete information related to our operating segments. Because of the similarities of certain of our acquisitions that provide certification and verification services, we aggregate operations into one verification and certification reportable segment. The operating segments included in the aggregated verification and certification segment include IMI Global, WFCFO and Validus. The factors considered in determining this aggregated reporting segment include the economic similarity of the businesses, the nature of services provided, production processes, types of customers and distribution methods.

 

The Company also determined that it has a software and related consulting reportable segment. SureHarvest, which includes Postelsia, is the sole operating segment under the software and related consulting reportable segment. This segment includes software license, maintenance, support and software-related consulting service revenues.

 

The Company’s chief operating decision maker (the Company’s CEO) allocates resources and assesses the performance of its operating segments. Segment management makes decisions, measures performance, and manages the business utilizing internal reporting operating segment information. Performance of operating segments are based on net sales, gross profit, selling, general and administrative expenses and most importantly, operating income.

 

 

Where Food Comes From, Inc.

Notes to the Consolidated Financial Statements

(Unaudited)

 

The Company eliminates intercompany transfers between segments for management reporting purposes. The following table shows information for reportable operating segments (amounts in thousands):

 

   Three months ended June 30, 2021   Three months ended June 30, 2020 
   Verification and Certification Segment   Software and Related Consulting Segment   Eliminations and Other   Consolidated Totals   Verification and Certification Segment   Software and Related Consulting Segment   Eliminations and Other   Consolidated Totals 
Assets:                                        
Goodwill  $1,947   $999   $-   $2,946   $1,133   $1,813   $-   $2,946 
All other assets, net   17,327    3,082    (3,093)   17,316    17,463    3,474    (4,604)   16,333 
Total assets  $19,274   $4,081   $(3,093)  $20,262   $18,596   $5,287   $(4,604)  $19,279 
                                         
Revenues:                                        
Verification and certification service revenue  $3,695   $-   $-   $3,695   $3,108   $-   $-   $3,108 
Product sales   964    -    -    964    796    -    -    796 
Software and related consulting revenue   -    482    -    482    -    512    -    512 
Total revenues  $4,659   $482   $-   $5,141   $3,904   $512   $-   $4,416 
Costs of revenues:                                        
Costs of verification and certification services   2,132    -    -    2,132    1,516    -    -    1,516 
Costs of products   648    -    -    648    501    -    -    501 
Costs of software and related consulting   -    352    -    352    -    299    -    299 
Total costs of revenues   2,780    352    -    3,132    2,017    299    -    2,316 
Gross profit   1,879    130    -    2,009    1,887    213    -    2,100 
Depreciation & amortization   148    51    -    199    112    132    -    244 
Other operating expenses   1,442    86    -    1,528    1,266    121    -    1,387 
Segment operating income/(loss)  $289   $(7)  $-   $282   $509   $(40)  $-   $469 
Other items to reconcile segment operating income (loss) to net income/(loss):                                        
Other income   29    (5)   -    24    29    (2)   -    27 
Income tax (expense)/benefit   -    (5)   (99)   (104)   -    -    (145)   (145)
Net income/(loss)  $318   $(17)  $(99)  $202   $538   $(42)  $(145)  $351 

 

   Six months ended June 30, 2021   Six months ended June 30, 2020 
   Verification and Certification Segment   Software and Related Consulting Segment   Eliminations and Other   Consolidated Totals   Verification and Certification Segment   Software and Related Consulting Segment   Eliminations and Other   Consolidated Totals 
Assets:                                        
Goodwill  $1,947   $999   $-   $2,946   $1,133   $1,813   $-   $2,946 
All other assets, net   17,327    3,082    (3,093)   17,316    17,463    3,474    (4,604)   16,333 
Total assets   19,274    4,081    (3,093)   20,262    18,596    5,287    (4,604)   19,279 
                                         
Revenues:                                        
Verification and certification service revenue  $6,958   $-   $-   $6,958   $5,911   $-   $-   $5,911 
Product sales   1,688    -    -    1,688    1,521    -    -    1,521 
Software and related consulting revenue   -    935    -    935    -    1,010    (114)   896 
Total revenues  $8,646   $935   $-   $9,581   $7,432   $1,010   $(114)  $8,328 
Costs of revenues:                                        
Costs of verification and certification services   3,925    -    -    3,925    3,140    -    (90)   3,050 
Costs of products   1,105    -    -    1,105    1,003    -    -    1,003 
Costs of software and related consulting   -    680    -    680    -    565    -    565 
Total costs of revenues   5,030    680    -    5,710    4,143    565    (90)   4,618 
Gross profit   3,616    255    -    3,871    3,289    445    (24)   3,710 
Depreciation & amortization   300    101    -    401    200    278    -    478 
Other operating expenses   2,920    179    -    3,099    2,803    338    (24)   3,117 
Segment operating income/(loss)  $396   $(25)  $-   $371   $286   $(171)  $-   $115 
Other items to reconcile segment operating income (loss) to net income/(loss):                                        
Other income   66    (7)   1,037    1,096    59    1    -    60 
Income tax (expense)/benefit   -    (5)   (110)   (115)   -    -    (65)   (65)
Net income/(loss)  $462   $(37)  $927   $1,352   $345   $(170)  $(65)  $110 

 

 

Where Food Comes From, Inc.

Notes to the Consolidated Financial Statements

(Unaudited)