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Segments
 9 Months Ended
Sep. 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 September 30, 2021   Three months ended September 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   $2,946   $-   $-   $2,946 
All other assets, net   17,036    3,311    (2,778)   17,569    16,548    5,379    (4,612)   17,315 
Total assets  $18,983   $4,310   $(2,778)  $20,515   $19,494   $5,379   $(4,612)  $20,261 
                                         
Revenues:                                        
Verification and certification service revenue  $4,701   $-   $-   $4,701   $4,307   $-   $-   $4,307 
Product sales   1,383    -    -    1,383    1,362    -    -    1,362 
Software and related consulting revenue   -    461    -    461    -    528    -    528 
Total revenues  $6,084   $461   $-   $6,545   $5,669   $528   $-   $6,197 
Costs of revenues:                                        
Costs of verification and certification services   2,438    -    -    2,438    2,233    -    -    2,233 
Costs of products   864    -    -    864    866    -    -    866 
Costs of software and related consulting   -    315    -    315    -    336    -    336 
Total costs of revenues   3,302    315    -    3,617    3,099    336    -    3,435 
Gross profit   2,782    146    -    2,928    2,570    192    -    2,762 
Depreciation & amortization   149    51    -    200    112    145    -    257 
Other operating expenses   1,542    48    -    1,590    1,404    145    -    1,549 
Segment operating income/(loss)  $1,091   $47   $-   $1,138   $1,054   $(98)  $-   $956 
Other items to reconcile segment operating income/(loss) to net income/(loss):                                        
Other income/(expense)   29    (2)   -    27    47    (2)   -    45 
Income tax expense   -    -    (298)   (298)   -    (8)   (263)   (271)
Net income/(loss)  $1,120   $45   $(298)  $867   $1,101   $(108)  $(263)  $730 

 

   Nine months ended September 30, 2021   Nine months ended September 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   $2,946   $-   $-   $2,946 
All other assets, net   17,036    3,311    (2,778)   17,569    16,548    5,379    (4,612)   17,315 
Total assets   18,983    4,310    (2,778)   20,515    19,494    5,379    (4,612)   20,261 
                                         
Revenues:                                        
Verification and certification service revenue  $11,659   $-   $-   $11,659   $10,218   $-   $-   $10,218 
Product sales   3,071    -    -    3,071    2,883    -    -    2,883 
Software and related consulting revenue   -    1,396    -    1,396    -    1,538    (114)   1,424 
Total revenues  $14,730   $1,396   $-   $16,126   $13,101   $1,538   $(114)  $14,525 
Costs of revenues:                                        
Costs of verification and certification services   6,363    -    -    6,363    5,373    -    (90)   5,283 
Costs of products   1,969    -    -    1,969    1,869    -    -    1,869 
Costs of software and related consulting   -    995    -    995    -    901    -    901 
Total costs of revenues   8,332    995    -    9,327    7,242    901    (90)   8,053 
Gross profit   6,398    401    -    6,799    5,859    637    (24)   6,472 
Depreciation & amortization   448    153    -    601    313    423    -    736 
Other operating expenses   4,463    226    -    4,689    4,206    483    (24)   4,665 
Segment operating income/(loss)  $1,487   $22   $-   $1,509   $1,340   $(269)  $-   $1,071 
Other items to reconcile segment operating income/(loss) to net income/(loss):                                        
Other income/(expense)   95    (9)   1,037    1,123    107    (2)   -    105 
Income tax expense   -    (5)   (408)   (413)   -    (8)   (328)   (336)
Net income/(loss)  $1,582   $8   $629   $2,219   $1,447   $(279)  $(328)  $840 

 

 

Where Food Comes From, Inc.

Notes to the Consolidated Financial Statements

(Unaudited)