Where Food Comes From, Inc.

Transcription

1 Where Food Comes From, Inc. Where Food Comes From, Inc. D.B.A. IMI Global, Inc. Headquarters: Castle Rock, Colorado OTCQB: WFCF May 2016

2 Forward-Looking Statements This presentation contains "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, based on current expectations, estimates and projections that are subject to risk. Forward-looking statements are inherently uncertain, and actual events could differ materially from the Company s predictions. Important factors that could cause actual events to vary from predictions include those discussed in our SEC filings. Specifically, statements in this presentation about financial performance, new business development, growth potential, market leadership, and the impact and potential of the Company s products and services on the marketplace and customers are forward-looking statements that are subject to a variety of factors, including availability of capital, personnel and other resources; competition, governmental regulation of the beef industry, the market for beef and other factors. Readers should not place undue reliance on these forward-looking statements. The Company assumes no obligation to update its forward-looking statements to reflect new information or developments. For a more extensive discussion of the Company s business, please refer to the Company s SEC filings at

3 The Trend I ve never seen a stronger desire for (consumers) knowing where their food is coming from -- Whole Foods CEO Walter Robb Our customers want to know more about how their food is grown and raised, and where it comes from. Walmart is committed to using our strengths to drive transparency and improvement across the supply chain.helping to put our customers in charge of their food choices by providing clear, accurate information about food ingredients. Sustainability -- Kathleen McLaughlin, Walmart VP,

4 Company Overview #1 provider of independent, third-party traceability and verification of food production practices Collect and leverage information on when, where, how and by whom food was raised 10,000+ customers: ranchers, auction barns, feed yards, dairies, packers, distributors, retailers, restaurants Customers include top tier players in food industry Recurring revenue model generating strong cash flows to support profitable organic growth and fund M&A program

5 Auditing Business Overview On-site audits of ranches, farms, feed yards and packing plants in 41 states Industry s largest portfolio of auditing standards enables services bundling to save customers time and money key competitive advantage 10,000 customers & growing Sticky customer relationships Recurring revenue model Organic and M&A growth $100M addressable market

6 Verification Services Source and Age Non-Hormone Treated Beef (NHTC) High Quality Beef Quota Never Fed Beta Agonists USDA NeverEver3 Natural Beef USDA Grass-Fed Beef American Grass-Fed Alliance Vegetarian Fed Flax Fed SO100 Feed Claims Tyson Natural Global Animal Partnership Non-GMO Project Verification USDA NOP Organic Food Alliance Certification Progressive Beef Standard Verified Green Animal Welfare and Worker Care Audits FarmCheck Program Beef Quality Assurance Verified American Humane Certified Gluten Free Certification National Chicken Council Audits National Turkey Federation Audits Whole Foods Egg Laying Hens Standards United Egg Producers Certified Safe Feed / Safe Food Program Hazard Analysis Critical Control Point Safe Quality Food (SFQ) On-Farm Security Audits Good Environmental Livestock Production Practices Pork for the European Union Feed Verified New in September 2015

7 Food Group Coverage Current Coverage Beef Pork Lamb Bison Poultry Produce Dairy Eggs Grain Future Coverage Seafood Beverages Produce

8 Where Food Comes From Source Verified 300+ grocery stores and food distributors nationally carry product displaying a Where Food Comes From Source Verified label. How it works: Package displays Where Food Comes From Source Verified label indicating product s origin has been verified by an independent third party. May include a QR code for consumer to access information on the families that raised the food and the practices employed by those families. Revenue Model: Non-exclusive food distributors or retailers pay per pound royalties, license fees, service fees. Exclusive verification customers display label for no additional cost.

9 Our Customers

10 Market Drivers Growth strategy supported by long-term trends Consumer demand for transparency due to food safety issues Increasing consumer interest in humane handling, non-gmo, organic, gluten free, antibiotic free, sustainable agriculture and other standards Producers, packers, distributors and retailers view verification, identification and traceability as key competitive differentiators Major QSR and retail chains adopting traceability following food scandals USDA s Animal Disease Traceability program will force 800,000 cattle producers to implement source audits in next few years Mandatory verification, identification and traceability for key export markets - Korea, Russia and the European Union Technological advances, including RFID, are making verification, identification and traceability solutions possible throughout the food chain continuum China moving toward re-opening markets to US beef imports

11 Market Drivers - Continued BSE Mad Cow Disease E-coli Pink Slime Salmonella Cantaloupes Swine flu Gestation crates Taco Bell meat content GMO labeling - CA Prop 37 European horse meat Humane handling scandals Health and wellness awareness Mislabeled seafood Expired meat in supply chain

12 Non-GMO Opportunity GMO Genetically Modified Organisms Non-GMO Project is largest industry group committed to building non-gmo food supply with verified product choices 32 US states have some kind of GMO ballot initiative Whole Foods committed to mandatory GMO labeling by 2018 Where Food Comes From is one of only three non- GMO approved auditors nationally

13 Recent Highlights New Service Offering Feed Verified Livestock feed emerging as latest risk in food supply chain Feed Verified gives feed producers and buyers a resource to confirm approved feed products and ingredients to avoid costly mistakes Global animal nutrition leader Alltech is first customer for new service Revenue model: $250-$500 per product or claim Addressable market includes food producers, feed producers and their suppliers New Customer McDonald s Corporation WFCF designed and is implementing rollout of pilot program for sustainable beef in Canada 100 Canadian ranchers have registered to participate WFCF has verified 20% of them as compliant with McDonald s sustainability requirements Target is up to 200 compliant beef producers by spring of 2016

14 Growth Strategy 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/input providers, ranchers, producers, packers, auction barns, processors, distributors, retailers, feed makers, consumers Expand on industry s largest solutions portfolio Currently verifying to over 30 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

15 M&A Activity - Auditing

16 M&A Results Summary 3,700 new customers $3.0 million in additional annualized revenue 6 new auditing standards 4 new food groups Further distance from competition Lucrative, high margin services bundling Additional M&A activity anticipated

17 Revenue Growth $12M $10M $8M $8.8M $10.4M $6M $5.3M $5.8M $4.2M $4M $2.4M $2.7M $3.3M $2M $1.1M $1.7 M Note: To more accurately illustrate results from continuing operations, the financial data presented excludes CattleNetwork and CattleStore operations that were divested in 2008.

18 Gross Profit $5M $4.9M $4M $3.8M $3M $2.8M $2.3M $2.7M $1.2M $1.3M $1.3M $1.8M $.7M $2M $1M

19 SG&A as % of Revenue 200% 192% 150% 100% 117% 60% 50% 55% 44% 40% 45% 46% 39% 39%

20 Adjusted EBITDA $1,170,000 $1M $443,000 $757,700 $631,100 $661,600 $ $140,000 $218,600 $66, $1M $612,900 $1,116,700

21 Balance Sheet Highlights As of March 31, 2016 Working capital: $4,283,900 Cash: $4,348,500 Long term debt: $6,300 Stockholders equity: $7,593,800

22 Selected Stock Data Traded OTCQB: WFCF 52 week stock price range $ $3.10 Average daily trading volume 4,610 Common shares outstanding 23,860,961 Approx. management/board ownership 14,800,000 Market Cap $55,800,000 Fiscal year December 31 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 May 2016.

23 Investment Considerations WFCF is the dominant verification industry player in the right place at the right time with consumer demand for, and government interest in, increased information and transparency in the food chain at an all-time high Company executing on strategy to be one-stop-shop for all certification standards in all food groups Scalable recurring revenue model with large, growing customer base positions company for long-term profit growth Well capitalized company with tight share structure and accomplished management team and board that owns significant stake in Company WFCF is only publicly traded pure play in food verification and traceability industry

24 Where Food Comes From For more information, contact: Pfeiffer High Investor Relations, Inc. Jay Pfeiffer or