Annual net sales increase 16.7% year-over-year to
$119.1 million; up 27.1% compared to
2019
Delivers 9th straight quarter of
year-over-year net sales growth
MORTON
GROVE, Ill., July 21,
2022 /PRNewswire/ -- Lifeway Foods, Inc. (Nasdaq:
LWAY) ("Lifeway" or "the Company"), the leading U.S. supplier of
kefir and fermented probiotic products to support the microbiome,
today reported financial results for the fourth quarter and full
year ended December 31, 2021.
"I am excited to report yet another consecutive quarter of
year-over-year growth for Lifeway and a very strong year for the
brand as a whole, illustrated by our 16.7% net sales growth when
compared to full year 2020," commented Julie Smolyansky, Lifeway's President and Chief
Executive Officer. "Our customer acquisition strategy paid
dividends in 2021. Throughout the year, we increased investments in
our marketing and advertising programs, focusing both on new
customers as well as our existing base, which has contributed to
elevated brand engagement and improved brand performance. We are
also encouraged by the growing consumer focus on gut-health and
protein, which continues to expand our addressable market and
should provide us continued positive momentum. We plan to further
execute on our customer acquisition strategy and capitalize on the
heightened interest in our better-for-you sector."
Smolyansky added, "I would also like to highlight a few other
wins for Lifeway in 2021. First, the acquisition of GlenOaks Farms.
The integration of this great drinkable yogurt brand into our
portfolio has been seamless so far, and we are very happy with its
performance amongst its base of Western U.S. retailers,
strategically complementing our eastern focused Fresh Made brand.
Moving forward, we plan to expand upon the GlenOaks distribution.
Our Lifeway Kefir product remains the true core of our
business, and we are seeing a growth in velocity at some of our top
retailers, which should drive continued growth of the product
throughout the current year and beyond."
Full Year 2021 Results
Net sales were $119.1 million for
the year ended December 31, 2021, an
increase of $17.0 million or 16.7%
from the prior year. The net sales increase was primarily driven by
higher volumes of our branded drinkable kefir, and to a lesser
extent the favorable impacts from the completed acquisition of
GlenOaks Farms in the third quarter.
Gross profit as a percentage of net sales was 24.1% for the year
ended December 31, 2021.
Selling expenses increased $0.9
million to $11.1 million for
the year ended December 31, 2021 from
$10.2 million in the prior year. The
increase was primarily due to increased investment in advertising
and marketing programs.
General and administrative expenses decreased to $11.6 million for the year ended December 31, 2021 from $11.7 million during the same period in 2020.
The Company reported net income of $3.3
million or $0.21 per basic and
diluted common share for the year ended December 31, 2021 compared to net income of
$3.2 million or $0.21 per basic and diluted common share during
the same period in 2020.
Delayed Reporting of Financial Results and Filing of
10-K
As previously announced, the Company experienced delays in
reporting its financial results and filing its 10-K for the year
ended December 31, 2021. The delay is
due to the identification of an error in accounting for income
taxes of a prior year acquisition, resulting in a $1.18 million increase in goodwill and deferred
income tax liability. The Company has evaluated the effect of this
error on its current and prior period filings. As a result, the
Company has restated its financial statement for the year ended
December 31, 2020, and each of the
quarters of fiscal years 2020 and 2021 in its Form 10K filed this
morning.
Conference Call and Webcast
A pre-recorded conference call and webcast with Julie Smolyansky discussing these results with
additional comments and details is available through the "Investor
Relations" section of the Company's website at
https://lifewaykefir.com/webinars-reports/ and will also be
available for replay.
About Lifeway Foods, Inc.
Lifeway Foods, Inc., which has been recognized as one of Forbes'
Best Small Companies, is America's leading supplier of the
probiotic, fermented beverage known as kefir. In addition to its
line of drinkable kefir, the company also produces cheese,
probiotic oat milk, and a ProBugs line for kids. Lifeway's tart and
tangy fermented dairy products are now sold across the United States, Mexico, Ireland, France and the United Kingdom. Learn how Lifeway is good for
more than just you at lifewayfoods.com.
Forward-Looking Statements
This release (and oral statements made regarding the subjects of
this release) contains "forward-looking statements" as defined in
the Private Securities Litigation Reform Act of 1995 regarding,
among other things, future operating and financial performance,
product development, market position, business strategy and
objectives. These statements use words, and variations of words,
such as "continue," "build," "future," "increase," "drive,"
"believe," "look," "ahead," "confident," "deliver," "outlook,"
"expect," and "predict." Other examples of forward looking
statements may include, but are not limited to, (i) statements of
Company plans and objectives, including the introduction of new
products, or estimates or predictions of actions by customers or
suppliers, (ii) statements of future economic performance, and
(III) statements of assumptions underlying other statements and
statements about Lifeway or its business. You are cautioned not to
rely on these forward-looking statements. These statements are
based on current expectations of future events and thus are
inherently subject to uncertainty. If underlying assumptions prove
inaccurate or known or unknown risks or uncertainties materialize,
actual results could vary materially from Lifeway's expectations
and projections. These risks, uncertainties, and other factors
include: price competition; the decisions of customers or
consumers; the actions of competitors; changes in the pricing of
commodities; the effects of government regulation; possible delays
in the introduction of new products; and customer acceptance of
products and services. A further list and description of these
risks, uncertainties, and other factors can be found in Lifeway's
Annual Report on Form 10-K for the fiscal year ended December 31, 2020, and the Company's subsequent
filings with the SEC. Copies of these filings are available online
at https://www.sec.gov,
http://lifewaykefir.com/investor-relations/, or on request from
Lifeway. Information in this release is as of the dates and time
periods indicated herein, and Lifeway does not undertake to update
any of the information contained in these materials, except as
required by law. Accordingly, YOU SHOULD NOT RELY ON THE ACCURACY
OF ANY OF THE STATEMENTS OR OTHER INFORMATION CONTAINED IN ANY
ARCHIVED PRESS RELEASE.
Contact:
Lifeway Foods, Inc.
Phone: 847-967-1010
Email: info@lifeway.net
|
LIFEWAY FOODS, INC.
AND SUBSIDIARIES
|
Consolidated Balance
Sheets
|
December 31, 2021
and 2020
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
December
31,
|
|
|
|
2021
|
|
|
2020
(As
Restated)
|
|
Current
assets
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
9,233
|
|
|
$
|
7,926
|
|
Accounts receivable,
net of allowance for doubtful accounts and discounts &
allowances of $1,170 and $1,350 at December 31, 2021 and 2020,
respectively
|
|
|
9,930
|
|
|
|
8,002
|
|
Inventories,
net
|
|
|
8,285
|
|
|
|
6,930
|
|
Prepaid expenses and
other current assets
|
|
|
1,254
|
|
|
|
1,163
|
|
Refundable income
taxes
|
|
|
344
|
|
|
|
31
|
|
Total current
assets
|
|
|
29,046
|
|
|
|
24,052
|
|
|
|
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
|
|
20,130
|
|
|
|
21,048
|
|
Operating lease
right-of use asset
|
|
|
216
|
|
|
|
345
|
|
|
|
|
|
|
|
|
|
|
Intangible
assets
|
|
|
|
|
|
|
|
|
Goodwill and
indefinite-lived intangibles
|
|
|
15,404
|
|
|
|
14,004
|
|
Other intangible
assets, net
|
|
|
4,278
|
|
|
|
–
|
|
Total intangible
assets
|
|
|
19,682
|
|
|
|
14,004
|
|
|
|
|
|
|
|
|
|
|
Other
Assets
|
|
|
1,800
|
|
|
|
1,800
|
|
Total
assets
|
|
$
|
70,874
|
|
|
$
|
61,249
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
Current portion of note
payable
|
|
$
|
1,000
|
|
|
$
|
–
|
|
Accounts
payable
|
|
|
6,614
|
|
|
|
5,592
|
|
Accrued
expenses
|
|
|
3,724
|
|
|
|
2,196
|
|
Accrued income
taxes
|
|
|
725
|
|
|
|
653
|
|
Total current
liabilities
|
|
|
12,063
|
|
|
|
8,441
|
|
Line of
credit
|
|
|
2,777
|
|
|
|
2,768
|
|
Note
Payable
|
|
|
3,470
|
|
|
|
–
|
|
Operating lease
liabilities
|
|
|
85
|
|
|
|
165
|
|
Deferred income
taxes, net
|
|
|
3,201
|
|
|
|
2,944
|
|
Other long-term
liabilities
|
|
|
147
|
|
|
|
77
|
|
Total
liabilities
|
|
|
21,743
|
|
|
|
14,395
|
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
|
|
|
|
|
Preferred stock, no par
value; 2,500 shares authorized; none issued
|
|
|
–
|
|
|
|
–
|
|
Common stock, no par
value; 40,000 shares authorized; 17,274 shares issued; 15,435 and
15,604 shares outstanding at 2021 and 2020
|
|
|
6,509
|
|
|
|
6,509
|
|
Paid-in
capital
|
|
|
2,552
|
|
|
|
2,600
|
|
Treasury stock, at
cost
|
|
|
(13,436)
|
|
|
|
(12,450)
|
|
Retained
earnings
|
|
|
53,506
|
|
|
|
50,195
|
|
Total stockholders'
equity
|
|
|
49,131
|
|
|
|
46,854
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
and stockholders' equity
|
|
$
|
70,874
|
|
|
$
|
61,249
|
|
LIFEWAY FOODS, INC.
AND SUBSIDIARIES
|
|
Consolidated
Statements of Operations
|
|
For the three months
and twelve months ended December 31, 2021 and 2020
|
|
(In
thousands, except per share data)
|
|
|
|
|
|
Three Months
Ended
December
31,
|
|
|
Twelve months
Ended
December
31,
|
|
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020
(As
Restated)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales
|
|
$
|
30,974
|
|
|
$
|
25,585
|
|
|
$
|
119,065
|
|
|
$
|
102,026
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
|
|
24,331
|
|
|
|
18,393
|
|
|
|
87,604
|
|
|
|
72,006
|
|
Depreciation
expense
|
|
|
652
|
|
|
|
761
|
|
|
|
2,751
|
|
|
|
3,087
|
|
Total cost of goods
sold
|
|
|
24,983
|
|
|
|
19,154
|
|
|
|
90,355
|
|
|
|
75,093
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
5,991
|
|
|
|
6,431
|
|
|
|
28,710
|
|
|
|
26,933
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling
expenses
|
|
|
2,587
|
|
|
|
2,786
|
|
|
|
11,097
|
|
|
|
10,197
|
|
General and
administrative
|
|
|
2,909
|
|
|
|
2,980
|
|
|
|
11,611
|
|
|
|
11,661
|
|
Amortization
expense
|
|
|
89
|
|
|
|
35
|
|
|
|
122
|
|
|
|
152
|
|
Total operating
expenses
|
|
|
5,585
|
|
|
|
5,801
|
|
|
|
22,830
|
|
|
|
22,010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
operations
|
|
|
406
|
|
|
|
630
|
|
|
|
5,880
|
|
|
|
4,923
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
(44)
|
|
|
|
(27)
|
|
|
|
(116)
|
|
|
|
(118)
|
|
Realized gain on
investments, net
|
|
|
–
|
|
|
|
–
|
|
|
|
2
|
|
|
|
4
|
|
Loss on sale of
property and equipment
|
|
|
–
|
|
|
|
–
|
|
|
|
(88)
|
|
|
|
(28)
|
|
Other (expense)
income
|
|
|
(1)
|
|
|
|
–
|
|
|
|
(62)
|
|
|
|
47
|
|
Total other (expense)
income
|
|
|
(45)
|
|
|
|
(27)
|
|
|
|
(264)
|
|
|
|
(95)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before
provision for income taxes
|
|
|
361
|
|
|
|
603
|
|
|
|
5,616
|
|
|
|
4,828
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
|
|
454
|
|
|
|
764
|
|
|
|
2,305
|
|
|
|
1,596
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
(93)
|
|
|
$
|
(161)
|
|
|
$
|
3,311
|
|
|
$
|
3,232
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.01)
|
|
|
$
|
0.02
|
|
|
$
|
0.21
|
|
|
$
|
0.21
|
|
Diluted
|
|
$
|
(0.01)
|
|
|
$
|
0.02
|
|
|
$
|
0.21
|
|
|
$
|
0.21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
15,435
|
|
|
|
15,604
|
|
|
|
15,537
|
|
|
|
15,597
|
|
Diluted
|
|
|
15,686
|
|
|
|
15,797
|
|
|
|
15,773
|
|
|
|
15,766
|
|
LIFEWAY FOODS, INC.
AND SUBSIDIARIES
|
Consolidated
Statements of Cash Flows
|
For the Years Ended
December 31, 2021 and 2020
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
2021
|
|
|
2020
(As
Restated)
|
|
|
|
|
|
|
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
Net
income
|
|
$
|
3,311
|
|
|
$
|
3,232
|
|
Adjustments to
reconcile net income to operating cash flow:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
2,873
|
|
|
|
3,239
|
|
Non-cash interest
expense
|
|
|
11
|
|
|
|
23
|
|
Non-cash rent
expense
|
|
|
1
|
|
|
|
(37)
|
|
Bad debt
expense
|
|
|
2
|
|
|
|
(6)
|
|
Deferred
Revenue
|
|
|
(30)
|
|
|
|
(91)
|
|
Stock-based
compensation
|
|
|
1,144
|
|
|
|
393
|
|
Deferred income
taxes
|
|
|
257
|
|
|
|
841
|
|
Loss on sale of
property and equipment
|
|
|
88
|
|
|
|
28
|
|
(Increase)
decrease in operating assets:
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
(1,931)
|
|
|
|
(1,304)
|
|
Inventories
|
|
|
(1,356)
|
|
|
|
(538)
|
|
Refundable income
taxes
|
|
|
(313)
|
|
|
|
649
|
|
Prepaid expenses and
other current assets
|
|
|
(91)
|
|
|
|
423
|
|
Increase
(decrease) in operating liabilities:
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
|
1,022
|
|
|
|
311
|
|
Accrued
expenses
|
|
|
504
|
|
|
|
(1,278)
|
|
Operating lease asset
amortization/liability
|
|
|
–
|
|
|
|
–
|
|
Accrued income
taxes
|
|
|
72
|
|
|
|
500
|
|
Net cash provided by
operating activities
|
|
|
5,564
|
|
|
|
6,385
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
Purchases of property
and equipment
|
|
|
(1,922)
|
|
|
|
(1,895)
|
|
Proceeds from sale of
property and equipment
|
|
|
–
|
|
|
|
5
|
|
Acquisition, net of
cash acquired
|
|
|
(5,220)
|
|
|
|
–
|
|
Net cash used in
investing activities
|
|
|
(7,142)
|
|
|
|
(1,890)
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
Purchase of treasury
stock
|
|
|
(1,583)
|
|
|
|
(405)
|
|
Payment of deferred
financing cost
|
|
|
(32)
|
|
|
|
–
|
|
Proceeds from note
payable
|
|
|
5,000
|
|
|
|
–
|
|
Repayment of note
payable
|
|
|
(500)
|
|
|
|
–
|
|
Net cash provided by
(used in) financing activities
|
|
|
2,885
|
|
|
|
(405)
|
|
|
|
|
|
|
|
|
|
|
Net increase in cash
and cash equivalents
|
|
|
1,307
|
|
|
|
4,090
|
|
Cash and cash
equivalents at the beginning of the period
|
|
|
7,926
|
|
|
|
3,836
|
|
Cash and cash
equivalents at the end of the period
|
|
$
|
9,233
|
|
|
$
|
7,926
|
|
|
|
|
|
|
|
|
|
|
Supplemental cash
flow information:
|
|
|
|
|
|
|
|
|
Cash paid for income
taxes, net of (refunds)
|
|
$
|
2,288
|
|
|
$
|
(426)
|
|
Cash paid for
interest
|
|
$
|
102
|
|
|
$
|
99
|
|
Non-cash investing
activities
|
|
|
|
|
|
|
|
|
Increase (decrease) in
right-of-use assets and operating lease obligations
|
|
$
|
45
|
|
|
$
|
(44)
|
|
Business acquisition
escrow payable
|
|
$
|
580
|
|
|
$
|
–
|
|
Non-cash financing
activities
|
|
|
|
|
|
|
|
|
Issuance of common
stock under equity incentive plans
|
|
$
|
–
|
|
|
$
|
522
|
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/lifeway-foods-inc-announces-results-for-the-fourth-quarter-and-full-year-ended-december-31-2021-301590771.html
SOURCE Lifeway Foods, Inc.