Net sales increase 16.1% year-over-year to
$34.1 million; up 34.3% compared to
2020
Delivers 10th straight quarter of
year-over-year net sales growth
MORTON
GROVE, Ill., Aug. 26,
2022 /PRNewswire/ -- Lifeway Foods, Inc. (Nasdaq:
LWAY) ("Lifeway" or "the Company"), a leading U.S. supplier of
kefir and fermented probiotic products to support the microbiome,
today reported financial results for the first quarter ended
March 31, 2022.
![(PRNewsfoto/Lifeway Foods, Inc.) (PRNewsfoto/Lifeway Foods, Inc.)](https://mma.prnewswire.com/media/1804095/Lifeway_1986_Logo.jpg)
"I am pleased to announce that the first quarter marked yet
another consecutive quarter of growth for Lifeway, highlighted by
16.1% year-over-year net sales growth," commented Julie Smolyansky, Lifeway's President and Chief
Executive Officer. "Like others in the industry, we have faced
inflationary challenges throughout 2022, but our team has worked
tirelessly to respond swiftly to the dynamic operating environment
and take decisive action in an effort to preserve our margin. We
remain very encouraged by the demand of our drinkable Kefir
product, which is the core driver of our results. We were recently
awarded another rotation of Lifeway Kefir distribution at a large
retailer in the club channel and have expanded our efforts to
increase our presence in high visibility away-from-home locations,
such as universities, small format convenience stores and
healthcare settings. We are crafting strategy to build upon the
amazing momentum we have amassed over the past two years and will
work to maximize our gains by expanding product assortment with key
retailers and reaching new customers with targeted marketing
tactics. Consumers remain focused on immunity and gut health, and
our probiotic Lifeway Kefir is well-positioned for continued growth
as our addressable market expands."
First Quarter 2022 Results
Net sales were $34.1 million for
the first quarter ended March 31,
2022, an increase of $4.7
million or 16.1% from the same period in 2021. The net sales
increase was primarily driven by higher volumes of our branded
drinkable kefir and the impact of price increases implemented
during the quarter, and to a lesser extent the favorable impact of
our acquisition of GlenOaks Farms during the third quarter of
2021.
Gross profit as a percentage of net sales was 16.4% for the
first quarter ended March 31,
2022.
Delayed Reporting of Financial Results
As previously announced, the Company experienced delays in
reporting its financial results and filing its 10-K for the year
ended December 31, 2021, which was
subsequently filed on July 21, 2022.
As a result, the reporting of financial results and filing of its
10-Q for the first quarter ended March 31,
2022 was also delayed.
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 and France. 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 March 31, 2022 and 2021 (In
thousands)
|
|
|
|
March 31,
2022
|
|
|
December
31,
|
|
|
|
Unaudited
|
|
|
2021
|
|
Current
assets
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
7,987
|
|
|
$
|
9,233
|
|
Accounts receivable,
net of allowance for doubtful accounts and discounts &
allowances of $1,320 and $1,170 at March 31,
2022 and December 31, 2021
respectively
|
|
|
11,389
|
|
|
|
9,930
|
|
Inventories,
net
|
|
|
8,649
|
|
|
|
8,285
|
|
Prepaid expenses and
other current assets
|
|
|
1,066
|
|
|
|
1,254
|
|
Refundable income
taxes
|
|
|
503
|
|
|
|
344
|
|
Total current
assets
|
|
|
29,594
|
|
|
|
29,046
|
|
|
|
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
|
|
19,822
|
|
|
|
20,130
|
|
Operating lease
right-of-use asset
|
|
|
216
|
|
|
|
216
|
|
|
|
|
|
|
|
|
|
|
Intangible
assets
|
|
|
|
|
|
|
|
|
Goodwill
|
|
|
11,704
|
|
|
|
11,704
|
|
Intangible assets,
net
|
|
|
7,843
|
|
|
|
7,978
|
|
Total intangible
assets
|
|
|
19,547
|
|
|
|
19,682
|
|
|
|
|
|
|
|
|
|
|
Other
assets
|
|
|
1,800
|
|
|
|
1,800
|
|
Total
assets
|
|
$
|
70,979
|
|
|
$
|
70,874
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
Current portion of note
payable
|
|
$
|
1,000
|
|
|
$
|
1,000
|
|
Accounts
payable
|
|
|
8,723
|
|
|
|
6,614
|
|
Accrued
expenses
|
|
|
3,190
|
|
|
|
3,724
|
|
Accrued income
taxes
|
|
|
199
|
|
|
|
725
|
|
Total current
liabilities
|
|
|
13,112
|
|
|
|
12,063
|
|
Line of
credit
|
|
|
2,777
|
|
|
|
2,777
|
|
Note
payable
|
|
|
3,222
|
|
|
|
3,470
|
|
Operating lease
liabilities
|
|
|
98
|
|
|
|
85
|
|
Deferred income
taxes, net
|
|
|
3,201
|
|
|
|
3,201
|
|
Other long-term
liabilities
|
|
|
224
|
|
|
|
147
|
|
Total
liabilities
|
|
|
22,634
|
|
|
|
21,743
|
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
–
|
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
|
|
|
|
|
Preferred stock, no par
value; 2,500 shares authorized; no shares issued or
outstanding at March 31, 2022 and December 31,
2021
|
|
|
–
|
|
|
|
–
|
|
Common stock, no par
value; 40,000 shares authorized; 17,274 shares issued;
15,435 outstanding at March 31, 2022 and
December 31, 2021, respectively
|
|
|
6,509
|
|
|
|
6,509
|
|
Paid-in
capital
|
|
|
2,661
|
|
|
|
2,552
|
|
Treasury stock, at
cost
|
|
|
(13,436)
|
|
|
|
(13,436)
|
|
Retained
earnings
|
|
|
52,611
|
|
|
|
53,506
|
|
Total stockholders'
equity
|
|
|
48,345
|
|
|
|
49,131
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
and stockholders' equity
|
|
$
|
70,979
|
|
|
$
|
70,874
|
|
LIFEWAY FOODS, INC.
AND SUBSIDIARIES Consolidated Statements of
Operations For the three months ended March 31, 2022 and
2021 (In thousands, except per share
data)
|
|
|
|
2022
|
|
|
2021
|
|
|
|
|
|
|
|
|
Net
Sales
|
|
$
|
34,099
|
|
|
$
|
29,376
|
|
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
|
|
27,863
|
|
|
|
20,512
|
|
Depreciation
expense
|
|
|
656
|
|
|
|
815
|
|
Total cost of goods
sold
|
|
|
28,519
|
|
|
|
21,327
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
5,580
|
|
|
|
8,049
|
|
|
|
|
|
|
|
|
|
|
Selling
expense
|
|
|
3,202
|
|
|
|
3,222
|
|
General and
administrative expense
|
|
|
3,292
|
|
|
|
2,891
|
|
Amortization
expense
|
|
|
135
|
|
|
|
–
|
|
Total operating
expenses
|
|
|
6,629
|
|
|
|
6,113
|
|
|
|
|
|
|
|
|
|
|
(Loss) income from
operations
|
|
|
(1,049)
|
|
|
|
1,936
|
|
|
|
|
|
|
|
|
|
|
Other (expense)
income:
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
(42)
|
|
|
|
(22)
|
|
Loss on sale of
property and equipment
|
|
|
–
|
|
|
|
(7)
|
|
Other (expense) income,
net
|
|
|
(1)
|
|
|
|
(8)
|
|
Total other (expense)
income
|
|
|
(43)
|
|
|
|
(37)
|
|
|
|
|
|
|
|
|
|
|
(Loss) income before
provision for income taxes
|
|
|
(1,092)
|
|
|
|
1,899
|
|
|
|
|
|
|
|
|
|
|
(Benefit) provision for
income taxes
|
|
|
(197)
|
|
|
|
593
|
|
|
|
|
|
|
|
|
|
|
Net (loss)
income
|
|
$
|
(895)
|
|
|
$
|
1,306
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
common share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.06)
|
|
|
$
|
0.08
|
|
Diluted
|
|
$
|
(0.06)
|
|
|
$
|
0.08
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares:
|
|
|
|
|
|
|
|
|
Basic
|
|
|
15,435
|
|
|
|
15,604
|
|
Diluted
|
|
|
15,435
|
|
|
|
15,814
|
|
LIFEWAY FOODS, INC.
AND SUBSIDIARIES Consolidated Statements of Cash
Flows For the three months ended March 31, 2022 and
2021 (In thousands)
|
|
|
|
Three months ended
March 31,
|
|
|
|
2022
|
|
|
2021
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
Net (loss)
income
|
|
$
|
(895)
|
|
|
$
|
1,306
|
|
Adjustments to
reconcile net (loss) income to operating cash
flow:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
791
|
|
|
|
815
|
|
Non-cash interest
expense
|
|
|
2
|
|
|
|
6
|
|
Deferred
revenue
|
|
|
(8)
|
|
|
|
(8)
|
|
Stock-based
compensation
|
|
|
315
|
|
|
|
153
|
|
Loss on sale of
property and equipment
|
|
|
–
|
|
|
|
7
|
|
(Increase)
decrease in operating assets:
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
(1,458)
|
|
|
|
(1,959)
|
|
Inventories
|
|
|
(364)
|
|
|
|
193
|
|
Refundable income
taxes
|
|
|
(159)
|
|
|
|
(15)
|
|
Prepaid expenses and
other current assets
|
|
|
188
|
|
|
|
54
|
|
Increase
(decrease) in operating liabilities:
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
|
2,109
|
|
|
|
(301)
|
|
Accrued
expenses
|
|
|
(643)
|
|
|
|
398
|
|
Accrued income
taxes
|
|
|
(526)
|
|
|
|
561
|
|
Net cash (used in)
provided by operating activities
|
|
|
(648)
|
|
|
|
1,210
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
Purchases of property
and equipment
|
|
|
(348)
|
|
|
|
(518)
|
|
Net cash used in
investing activities
|
|
|
(348)
|
|
|
|
(518)
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
Repayment of note
payable
|
|
|
(250)
|
|
|
|
–
|
|
Net cash used in
financing activities
|
|
|
(250)
|
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
Net (decrease)
increase in cash and cash equivalents
|
|
|
(1,246)
|
|
|
|
692
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents at the beginning of the period
|
|
|
9,233
|
|
|
|
7,926
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents at the end of the period
|
|
$
|
7,987
|
|
|
$
|
8,618
|
|
|
|
|
|
|
|
|
|
|
Supplemental cash
flow information:
|
|
|
|
|
|
|
|
|
Cash paid for income
taxes, net
|
|
$
|
95
|
|
|
$
|
47
|
|
Cash paid for
interest
|
|
$
|
40
|
|
|
$
|
16
|
|
|
|
|
|
|
|
|
|
|
Non-cash investing
activities
|
|
|
|
|
|
|
|
|
Increase (decrease) in
right-of-use assets and operating lease obligations
|
|
$
|
36
|
|
|
$
|
21
|
|
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SOURCE Lifeway Foods, Inc.