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Segments
 9 Months Ended
Sep. 30, 2023
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 consulting reportable segment. SureHarvest, which includes Postelsia, is the sole operating unit under the consulting reportable segment. This segment primarily includes 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, 2023   Three months ended September 30, 2022  
   Verification and Certification Segment   Consulting Segment   Eliminations and Other   Consolidated Totals   Verification and Certification Segment   Consulting Segment   Eliminations and Other   Consolidated Totals 
Assets:                                
Goodwill  $1,947   $999   $-   $2,946   $1,947   $999   $-   $2,946 
All other assets, net   5,252    2,686    6,804    14,742    14,134    3,367    885    18,386 
Total assets  $7,199   $3,685   $6,804   $17,688   $16,081   $4,366   $885   $21,332 
                                         
Revenues:                                        
Verification and certification service revenue  $5,359   $-   $-   $5,359   $5,169   $-   $-   $5,169 
Product sales   1,221    -    -    1,221    1,588    -    -    1,588 
Consulting revenue   -    431    -    431    -    508    -    508 
Total revenues  $6,580   $431   $-   $7,011   $6,757   $508   $-   $7,265 
Costs of revenues:                                        
Costs of verification and certification services   3,123    -    -    3,123    2,900    -    -    2,900 
Costs of products   681    -    -    681    826    -    -    826 
Costs of consulting   -    341    -    341    -    359    -    359 
Total costs of revenues   3,804    341    -    4,145    3,726    359    -    4,085 
Gross profit   2,776    90    -    2,866    3,031    149    -    3,180 
Depreciation & amortization   111    42    -    153    149    42    -    191 
Other operating expenses   1,682    85    -    1,767    1,855    60    -    1,915 
 Segment operating income/(loss)  $983   $(37)  $-   $946   $1,027   $47   $-   $1,074 
Other items to reconcile segment operating income (loss) to net income/(loss):                                        
Other income / (expense)   65    (2)   -    63    9    -    -    9 
Income tax expense   -    -    (286)   (286)   -    -    (298)   (298)
Net income/(loss)  $1,048   $(39)  $(286)  $723   $1,036   $47   $(298)  $785 

 

 

Where Food Comes From, Inc.

Notes to the Consolidated Financial Statements

(Unaudited)

 

                                                 
    Nine months ended September 30, 2023     Nine months ended September 30, 2022  
    Verification and Certification Segment     Consulting Segment     Eliminations and Other     Consolidated Totals     Verification and Certification Segment     Consulting Segment     Eliminations and Other     Consolidated Totals  
Assets:                                                
Goodwill   $ 1,947     $ 999     $ -     $ 2,946     $ 1,947     $ 999     $ -     $ 2,946  
All other assets, net     5,252       2,686       6,804       14,742       14,134       3,367       885       18,386  
Total assets   $ 7,199     $ 3,685     $ 6,804     $ 17,688     $ 16,081     $ 4,366     $ 885     $ 21,332  
                                                                 
Revenues:                                                                
Verification and certification service revenue   $ 13,944     $ -     $ -     $ 13,944     $ 12,917     $ -     $ -     $ 12,917  
Product sales     3,130       -       -       3,130       3,473       -       -       3,473  
Consulting revenue     -       1,330       -       1,330       -       2,362       -       2,362  
Total revenues   $ 17,074     $ 1,330     $ -     $ 18,404     $ 16,390     $ 2,362     $ -     $ 18,752  
Costs of revenues:                                                                
Costs of verification and certification services     8,055       -       -       8,055       7,261       -       -       7,261  
Costs of products     1,804       -       -       1,804       1,885       -       -       1,885  
Costs of consulting     -       1,030       -       1,030       -       1,899       -       1,899  
Total costs of revenues     9,859       1,030       -       10,889       9,146       1,899       -       11,045  
Gross profit     7,215       300       -       7,515       7,244       463       -       7,707  
Depreciation & amortization     361       127       -       488       443       140       -       583  
Other operating expenses     5,027       226       -       5,253       4,929       185       -       5,114  
 Segment operating income/(loss)   $ 1,827     $ (53 )   $ -     $ 1,774     $ 1,872     $ 138     $ -     $ 2,010  
Other items to reconcile segment operating income (loss) to net income/(loss):                                                                
Other income / (expense)     187       (5 )     -       182       108       (35 )     -       73  
Income tax expense     -       -       (580 )     (580 )     -       -       (579 )     (579 )
Net income/(loss)   $ 2,014     $ (58 )   $ (580 )   $ 1,376     $ 1,980     $ 103     $ (579 )   $ 1,504