Where Food Comes From, Inc. Segments Disclosure

Note 17 - Segments

 

Effective January 2025, our operations team implemented some internal restructuring and consolidation throughout the Company to better align business functions and improve efficiency, as well as promote stronger unity in our brand identity because of our many past acquisitions. With this reorganization, we also needed to reassess segment reporting, our new structure and what type of discrete information was reviewed by our middle managers and our Chief Operating Decision Maker (“CODM”). One aspect of our restructuring specifically addressed the activities and personnel, which were previously reported under our Professional Services Segment. All professional consulting services, which also includes data analysis and other reporting metrics, provide support to our primary activities of verification and certification. This segment now reports to the same management team under the Verification and Certification Segment. With our restructuring, we now only have one reportable segment. 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’s chief operating decision maker (the Company’s CEO) allocates resources and assesses the performance of its operating segment. Management makes decisions, measures performance, and manages the business utilizing internal reporting operating information. Performance of operating segment is 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

 

The following table shows information for the reportable operating segment (in thousands):

 Schedule of Operating Segments 

		2025				2024
		Year ended December 31,
		2025				2024
Assets:
Goodwill		$	2,946			$	2,946
All other assets, net			9,953				12,360
Total assets		$	12,899			$	15,306
Revenues:
Verification and certification service revenue		$	20,102			$	20,552
Product sales			3,616				3,803
Professional services			1,174				1,391
Total revenues		$	24,892			$	25,746
Costs of revenues:
Costs of verification and certification services			12,214				11,849
Costs of products			2,301				2,313
Costs of professional services			869				1,022
Total costs of revenues			15,384				15,184
Gross profit			9,508				10,562
Depreciation & amortization			650				647
Other operating expenses:
Salaries and benefits			3,843				3,652
Rent and lease expense			644				641
Software and technology			848				830
Legal and professional expenses			659				549
Tradeshows and marketing			459				777
Conferences and training			144				114
Investor relations			126				128
Other expenses			929				1,017
Total Other operating expenses			7,652				7,708
Segment operating income/(loss)		$	1,206			$	2,207
Other items to reconcile segment operating income/(loss) to net income/(loss):
Other income/(loss)			1,023				772
Income tax benefit/(expense)			(693	)			(859	)
Net income/(loss)		$	1,536			$	2,120