Net sales increase 14.8% year-over-year to
$33.5 million; up 33.9% compared to
2020
Delivers 11th straight quarter of
year-over-year net sales growth
MORTON
GROVE, Ill., Sept. 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 second quarter ended
June 30, 2022.
"I am excited to report yet another consecutive quarter of
growth at Lifeway, driven primarily by the continued strong
performance of our core drinkable Kefir," commented Julie Smolyansky, Lifeway's President and Chief
Executive Officer. "Throughout 2022 we have continued to execute on
our strategic initiatives, elevating consumer awareness and brand
engagement, which has led to ongoing improvement in brand
performance. This is highlighted in the second quarter by our 14.8%
year-over-year net sales increase. Despite the industry-wide
inflationary pressures and cautious spending trends, our customers
have proven they will remain focused on gut health and nutrition.
The strong demand for Lifeway products is signaled by our expanded
distribution and accelerating velocities with key retail partners.
Additionally, we continue to evaluate options to increase our
presence in high visibility away-from-home locations including
universities, small format convenience stores and healthcare
settings. I look forward to building upon this incredible momentum
we have garnered in the last two years, and maximizing gains for
our business and our shareholders in the back half of 2022 and into
2023."
Second Quarter 2022
Results
Net sales were $33.5 million for
the second quarter ended June 30,
2022, an increase of $4.3
million or 14.8% 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 first quarter of 2022, 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 17.0% for the
second quarter ended June 30,
2022.
Selling, general and administrative expenses increased
$0.1 million to $5.3 million for the second quarter ended
June 30, 2022, from $5.2 million during the same period in 2021.
The Company reported net income of $0.1
million or $0.01 per basic and
diluted common share for the second quarter ended June 30, 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 second quarter ended June 30,
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, 2021, 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.
For media inquiries:
Derek Miller
Vice President of Communications, Lifeway Foods
Email: derekm@lifeway.net
For general Lifeway Foods inquiries:
info@lifeway.net
Phone: 847-967-1010
LIFEWAY FOODS, INC.
AND SUBSIDIARIES Consolidated Balance
Sheets June 30, 2022 and December 31,
2021 (In thousands)
|
|
|
June 30,
2022
|
|
|
December
31,
|
|
|
|
Unaudited
|
|
|
2021
|
|
Current
assets
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
6,494
|
|
|
$
|
9,233
|
|
Accounts receivable,
net of allowance for doubtful accounts and discounts &
allowances of $1,220 and $1,170 at June 30, 2022 and December 31,
2021 respectively
|
|
|
10,354
|
|
|
|
9,930
|
|
Inventories,
net
|
|
|
8,436
|
|
|
|
8,285
|
|
Prepaid expenses and
other current assets
|
|
|
1,100
|
|
|
|
1,254
|
|
Refundable income
taxes
|
|
|
784
|
|
|
|
344
|
|
Total current
assets
|
|
|
27,168
|
|
|
|
29,046
|
|
|
|
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
|
|
20,595
|
|
|
|
20,130
|
|
Operating lease
right-of-use asset
|
|
|
179
|
|
|
|
216
|
|
Goodwill
|
|
|
11,704
|
|
|
|
11,704
|
|
Intangible assets,
net
|
|
|
7,708
|
|
|
|
7,978
|
|
Other
assets
|
|
|
1,800
|
|
|
|
1,800
|
|
Total
assets
|
|
$
|
69,154
|
|
|
$
|
70,874
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
Current portion of note
payable
|
|
$
|
1,000
|
|
|
$
|
1,000
|
|
Accounts
payable
|
|
|
6,859
|
|
|
|
6,614
|
|
Accrued
expenses
|
|
|
3,166
|
|
|
|
3,724
|
|
Accrued income
taxes
|
|
|
–
|
|
|
|
725
|
|
Total current
liabilities
|
|
|
11,025
|
|
|
|
12,063
|
|
Line of
credit
|
|
|
2,777
|
|
|
|
2,777
|
|
Note
payable
|
|
|
2,973
|
|
|
|
3,470
|
|
Operating lease
liabilities
|
|
|
86
|
|
|
|
85
|
|
Deferred income
taxes, net
|
|
|
3,201
|
|
|
|
3,201
|
|
Other long-term
liabilities
|
|
|
–
|
|
|
|
147
|
|
Total
liabilities
|
|
|
20,062
|
|
|
|
21,743
|
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
–
|
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
|
|
|
|
|
Preferred stock, no par
value; 2,500 shares authorized; no shares issued or outstanding at
June 30, 2022 and December 31, 2021
|
|
|
–
|
|
|
|
–
|
|
Common stock, no par
value; 40,000 shares authorized; 17,274 shares issued; 15,473 and
15,435 outstanding at June 30, 2022 and December 31, 2021,
respectively
|
|
|
6,509
|
|
|
|
6,509
|
|
Paid-in
capital
|
|
|
3,008
|
|
|
|
2,552
|
|
Treasury stock, at
cost
|
|
|
(13,156)
|
|
|
|
(13,436)
|
|
Retained
earnings
|
|
|
52,731
|
|
|
|
53,506
|
|
Total stockholders'
equity
|
|
|
49,092
|
|
|
|
49,131
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
and stockholders' equity
|
|
$
|
69,154
|
|
|
$
|
70,874
|
|
See accompanying notes
to consolidated financial statements
|
LIFEWAY FOODS, INC.
AND SUBSIDIARIES Consolidated Statements of
Operations For the three and six months ended June 30,
2022 and 2021 (Unaudited) (In
thousands, except per share data)
|
|
|
Three Months
Ended
June
30,
|
|
|
Six Months
Ended
June
30,
|
|
|
|
2022
|
|
|
2021
|
|
|
2022
|
|
|
2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales
|
|
$
|
33,491
|
|
|
$
|
29,162
|
|
|
$
|
67,590
|
|
|
$
|
58,538
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
|
|
27,207
|
|
|
|
20,846
|
|
|
|
55,070
|
|
|
|
41,358
|
|
Depreciation
expense
|
|
|
587
|
|
|
|
639
|
|
|
|
1,243
|
|
|
|
1,454
|
|
Total cost of goods
sold
|
|
|
27,794
|
|
|
|
21,485
|
|
|
|
56,313
|
|
|
|
42,812
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
5,697
|
|
|
|
7,677
|
|
|
|
11,277
|
|
|
|
15,726
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling
expenses
|
|
|
2,482
|
|
|
|
2,566
|
|
|
|
5,684
|
|
|
|
5,788
|
|
General and
administrative
|
|
|
2,839
|
|
|
|
2,617
|
|
|
|
6,131
|
|
|
|
5,508
|
|
Amortization
expense
|
|
|
135
|
|
|
|
–
|
|
|
|
270
|
|
|
|
–
|
|
Total operating
expenses
|
|
|
5,456
|
|
|
|
5,183
|
|
|
|
12,085
|
|
|
|
11,296
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
operations
|
|
|
241
|
|
|
|
2,494
|
|
|
|
(808)
|
|
|
|
4,430
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
(52)
|
|
|
|
(20)
|
|
|
|
(94)
|
|
|
|
(42)
|
|
Gain on
investments
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
2
|
|
Loss on sale of
property and equipment
|
|
|
–
|
|
|
|
(76)
|
|
|
|
–
|
|
|
|
(83)
|
|
Other (expense) income,
net
|
|
|
(4)
|
|
|
|
(49)
|
|
|
|
(5)
|
|
|
|
(59)
|
|
Total other income
(expense)
|
|
|
(56)
|
|
|
|
(145)
|
|
|
|
(99)
|
|
|
|
(182)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before
provision for income taxes
|
|
|
185
|
|
|
|
2,349
|
|
|
|
(907)
|
|
|
|
4,248
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
|
|
65
|
|
|
|
731
|
|
|
|
(132)
|
|
|
|
1,324
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
$
|
120
|
|
|
$
|
1,618
|
|
|
$
|
(775)
|
|
|
$
|
2,924
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.01
|
|
|
$
|
0.10
|
|
|
$
|
(0.05)
|
|
|
$
|
0.19
|
|
Diluted
|
|
$
|
0.01
|
|
|
$
|
0.10
|
|
|
$
|
(0.05)
|
|
|
$
|
0.19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
15,466
|
|
|
|
15,639
|
|
|
|
15,450
|
|
|
|
15,622
|
|
Diluted
|
|
|
15,875
|
|
|
|
15,793
|
|
|
|
15,772
|
|
|
|
15,772
|
|
LIFEWAY FOODS, INC.
AND SUBSIDIARIES Consolidated Statements of Cash
Flows (Unaudited) (In
thousands)
|
|
|
Six months ended
June 30,
|
|
|
|
2022
|
|
|
2021
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
Net (loss)
income
|
|
$
|
(775)
|
|
|
$
|
2,924
|
|
Adjustments to
reconcile net (loss) income to operating cash
flow:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
1,513
|
|
|
|
1,454
|
|
Non-cash interest
expense
|
|
|
3
|
|
|
|
9
|
|
Non-cash rent
expense
|
|
|
–
|
|
|
|
51
|
|
Bad debt
expense
|
|
|
–
|
|
|
|
(1)
|
|
Deferred
revenue
|
|
|
(15)
|
|
|
|
(15)
|
|
Stock-based
compensation
|
|
|
547
|
|
|
|
301
|
|
Loss on sale of
property and equipment
|
|
|
–
|
|
|
|
83
|
|
(Increase)
decrease in operating assets:
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
(424)
|
|
|
|
(1,154)
|
|
Inventories
|
|
|
(151)
|
|
|
|
(361)
|
|
Refundable income
taxes
|
|
|
(440)
|
|
|
|
(323)
|
|
Prepaid expenses and
other current assets
|
|
|
154
|
|
|
|
255
|
|
Increase
(decrease) in operating liabilities:
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
|
246
|
|
|
|
(305)
|
|
Accrued
expenses
|
|
|
(462)
|
|
|
|
1,276
|
|
Accrued income
taxes
|
|
|
(725)
|
|
|
|
(547)
|
|
Net cash (used in)
provided by operating activities
|
|
|
(529)
|
|
|
|
3,647
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
Purchases of property
and equipment
|
|
|
(1,710)
|
|
|
|
(1,161)
|
|
Net cash used in
investing activities
|
|
|
(1,710)
|
|
|
|
(1,161)
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
Repayment of note
payable
|
|
|
(500)
|
|
|
|
–
|
|
Net cash used in
financing activities
|
|
|
(500)
|
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
Net (decrease)
increase in cash and cash equivalents
|
|
|
(2,739)
|
|
|
|
2,486
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents at the beginning of the period
|
|
|
9,233
|
|
|
|
7,926
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents at the end of the period
|
|
$
|
6,494
|
|
|
$
|
10,412
|
|
|
|
|
|
|
|
|
|
|
Supplemental cash
flow information:
|
|
|
|
|
|
|
|
|
Cash paid for income
taxes, net
|
|
$
|
640
|
|
|
$
|
2,194
|
|
Cash paid for
interest
|
|
$
|
88
|
|
|
$
|
33
|
|
|
|
|
|
|
|
|
|
|
Non-cash investing
activities
|
|
|
|
|
|
|
|
|
Increase (decrease) in
right-of-use assets and operating lease obligations
|
|
$
|
36
|
|
|
$
|
27
|
|
View original content to download
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SOURCE Lifeway Foods, Inc.