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Segments
 6 Months Ended
Jun. 30, 2022
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 unit under the software and related consulting reportable segment. This segment includes software and 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, 2022   Three months ended June 30, 2021 
   Verification and Certification Segment  

Software

Sales and Related Consulting Segment

   Eliminations and Other   Consolidated Totals   Verification and Certification Segment  

Software Sales and Related

Consulting Segment

   Eliminations and Other   Consolidated Totals 
Assets:                                        
Goodwill  $1,947   $999   $-   $2,946   $1,947   $999   $-   $2,946 
All other assets, net   14,244    3,865    (143)   17,966    17,327    3,082    (3,093)   17,316 
Total assets  $16,191   $4,864   $(143)  $20,912   $19,274   $4,081   $(3,093)  $20,262 
                                         
Revenues:                                        
Verification and certification service revenue  $3,964   $-   $-   $3,964   $3,695   $-   $-   $3,695 
Product sales   878    -    -    878    964    -    -    964 
Software and related consulting revenue   -    489    -    489    -    482    -    482 
Total revenues  $4,842   $489   $-   $5,331   $4,659   $482   $-   $5,141 
Costs of revenues:                                        
Costs of verification and certification services   2,325    -    -    2,325    2,132    -    -    2,132 
Costs of products   522    -    -    522    648    -    -    648 
Costs of software and related consulting   -    354    -    354    -    352    -    352 
Total costs of revenues   2,847    354    -    3,201    2,780    352    -    3,132 
Gross profit   1,995    135    -    2,130    1,879    130    -    2,009 
Depreciation & amortization   149    48    -    197    148    51    -    199 
Other operating expenses   1,561    59    -    1,620    1,442    86    -    1,528 
Segment operating income/(loss)  $285   $28   $-   $313   $289   $(7)  $-   $282 
Other items to reconcile segment operating income (loss) to net income/(loss):                                        
Other income / (expense)   50    (23)   -    27    29    (5)   -    24 
Income tax expense   -    -    (118)   (118)   -    (5)   (99)   (104)
Net income/(loss)  $335   $5   $(118)  $222   $318   $(17)  $(99)  $202 

 

 

Where Food Comes From, Inc.

Notes to the Consolidated Financial Statements

(Unaudited)

 

                                         
   Six months ended June 30, 2022   Six months ended June 30, 2021 
   Verification and Certification Segment   Software Sales and Related Consulting Segment   Eliminations and Other   Consolidated Totals   Verification and Certification Segment   Software Sales and Related Consulting Segment   Eliminations and Other   Consolidated Totals 
Assets:                                        
Goodwill  $1,947   $999   $-   $2,946   $1,947   $999   $-   $2,946 
All other assets, net   14,244    3,865    (143)   17,966    17,327    3,082    (3,093)   17,316 
Total assets  $16,191   $4,864   $(143)  $20,912   $19,274   $4,081   $(3,093)  $20,262 
                                         
Revenues:                                        
Verification and certification service revenue  $7,748   $-   $-   $7,748   $6,958   $-   $-   $6,958 
Product sales   1,885    -    -    1,885    1,688    -    -    1,688 
Software and related consulting revenue   -    1,854    -    1,854    -    935    -    935 
Total revenues  $9,633   $1,854   $-   $11,487   $8,646   $935   $-   $9,581 
Costs of revenues:                                        
Costs of verification and certification services   4,361    -    -    4,361    3,925    -    -    3,925 
Costs of products   1,059    -    -    1,059    1,105    -    -    1,105 
Costs of software and related consulting   -    1,540    -    1,540    -    680    -    680 
Total costs of revenues   5,420    1,540    -    6,960    5,030    680    -    5,710 
Gross profit   4,213    314    -    4,527    3,616    255    -    3,871 
Depreciation & amortization   294    98    -    392    300    101    -    401 
Other operating expenses   3,074    125    -    3,199    2,920    179    -    3,099 
Segment operating income/(loss)  $845   $91   $-   $936   $396   $(25)  $-   $371 
Other items to reconcile segment operating income (loss) to net income/(loss):                                        
Other income / (expense)   100    (36)   -    64    66    (7)   1,037    1,096 
Income tax expense   -    -    (281)   (281)   -    (5)   (110)   (115)
Net income/(loss)  $945   $55   $(281)  $719   $462   $(37)  $927   $1,352