Net sales increase 29.1% year-over-year to
$38.1 million; up 46.5% compared to
2020
Delivers 12th straight quarter of
year-over-year net sales growth
MORTON
GROVE, Ill., Nov. 14,
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 third quarter ended
September 30, 2022.
![(PRNewsfoto/Lifeway Foods, Inc.) (PRNewsfoto/Lifeway Foods, Inc.)](https://mma.prnewswire.com/media/1804095/Lifeway_1986_Logo.jpg)
"Despite the large macro trends that have affected consumers and
competitors in our category, I am pleased to report that Lifeway
has achieved a year-over-year net sales increase of 29.1% for the
third quarter of 2022, with a two-year stack increase of 46.5%
compared to the third quarter of 2020," said Julie Smolyansky, Lifeway's President and Chief
Executive Officer. "This quarter's record-breaking topline numbers
are a result of our focus on the core Lifeway Kefir business. The
strategy we've put in place to build awareness for our flagship
product has yielded our 12th consecutive quarter of
year-over-year growth at Lifeway, and we are grateful to our
customers who have made this milestone possible. As we look
forward, our objectives are to increase our assortment and
distribution at retail partners with whom we've had tremendous
success, gain exposure through marketing campaigns and penetrate
additional channels. We have recently gained traction within the
convenience channel, and see this as an opportunity to build brand
awareness and introduce new consumers to our single-serve products.
We look forward to finishing the year strong and preparing for a
healthy 2023."
Third Quarter 2022 Results
Net sales were $38.1 million for
the third quarter ended September 30,
2022, an increase of $8.6
million or 29.1% 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 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 19.9% for the
third quarter ended September 30,
2022.
Selling, general and administrative expenses increased
$0.4 million to $6.3 million for the third quarter ended
September 30, 2022, from $5.9 million during the same period in 2021.
The Company reported net income of $1.0
million or $0.06 per basic and
diluted common share for the third quarter ended September 30, 2022.
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 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.
Media:
Derek Miller
Vice President of Communications, Lifeway Foods
Email: derekm@lifeway.net
General inquiries:
Lifeway Foods, Inc.
Phone: 847-967-1010
Email: info@lifeway.net
LIFEWAY FOODS, INC.
AND SUBSIDIARIES
Consolidated Balance
Sheets
September 30, 2022
and December 31, 2021
(In
thousands)
|
|
|
|
September 30,
2022
|
|
|
December
31,
|
|
|
|
Unaudited
|
|
|
2021
|
|
Current
assets
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
8,933
|
|
|
$
|
9,233
|
|
Accounts receivable,
net of allowance for doubtful accounts and discounts &
allowances of $1,400 and $1,170 at September
30, 2022 and December 31, 2021
respectively
|
|
|
11,507
|
|
|
|
9,930
|
|
Inventories,
net
|
|
|
9,192
|
|
|
|
8,285
|
|
Prepaid expenses and
other current assets
|
|
|
1,369
|
|
|
|
1,254
|
|
Refundable income
taxes
|
|
|
653
|
|
|
|
344
|
|
Total current
assets
|
|
|
31,654
|
|
|
|
29,046
|
|
|
|
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
|
|
20,905
|
|
|
|
20,130
|
|
Operating lease
right-of-use asset
|
|
|
135
|
|
|
|
216
|
|
Goodwill
|
|
|
11,704
|
|
|
|
11,704
|
|
Intangible assets,
net
|
|
|
7,573
|
|
|
|
7,978
|
|
Other
assets
|
|
|
1,800
|
|
|
|
1,800
|
|
Total
assets
|
|
$
|
73,771
|
|
|
$
|
70,874
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
Current portion of note
payable
|
|
$
|
1,000
|
|
|
$
|
1,000
|
|
Accounts
payable
|
|
|
9,119
|
|
|
|
6,614
|
|
Accrued
expenses
|
|
|
4,378
|
|
|
|
3,724
|
|
Accrued income
taxes
|
|
|
–
|
|
|
|
725
|
|
Total current
liabilities
|
|
|
14,497
|
|
|
|
12,063
|
|
Line of
credit
|
|
|
2,777
|
|
|
|
2,777
|
|
Note
payable
|
|
|
2,725
|
|
|
|
3,470
|
|
Operating lease
liabilities
|
|
|
74
|
|
|
|
85
|
|
Deferred income
taxes, net
|
|
|
3,201
|
|
|
|
3,201
|
|
Other long-term
liabilities
|
|
|
–
|
|
|
|
147
|
|
Total
liabilities
|
|
|
23,274
|
|
|
|
21,743
|
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
–
|
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
|
|
|
|
|
Preferred stock, no par
value; 2,500 shares authorized; no shares issued or outstanding
at September 30, 2022 and December 31,
2021
|
|
|
–
|
|
|
|
–
|
|
Common stock, no par
value; 40,000 shares authorized; 17,274 shares issued; 15,495
and 15,435 outstanding at September 30, 2022
and December 31, 2021,
respectively
|
|
|
6,509
|
|
|
|
6,509
|
|
Paid-in
capital
|
|
|
3,271
|
|
|
|
2,552
|
|
Treasury stock, at
cost
|
|
|
(12,997)
|
|
|
|
(13,436)
|
|
Retained
earnings
|
|
|
53,714
|
|
|
|
53,506
|
|
Total stockholders'
equity
|
|
|
50,497
|
|
|
|
49,131
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
and stockholders' equity
|
|
$
|
73,771
|
|
|
$
|
70,874
|
|
|
See accompanying notes
to consolidated financial statements
|
LIFEWAY FOODS, INC.
AND SUBSIDIARIES
Consolidated
Statements of Operations
For the three and
nine months ended September 30, 2022 and 2021
(Unaudited)
(In thousands,
except per share data)
|
|
|
|
Three Months
Ended
September
30,
|
|
|
Nine months
Ended
September
30,
|
|
|
|
2022
|
|
|
2021
|
|
|
2022
|
|
|
2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales
|
|
$
|
38,140
|
|
|
$
|
29,553
|
|
|
$
|
105,730
|
|
|
$
|
88,091
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
|
|
29,962
|
|
|
|
21,915
|
|
|
|
85,032
|
|
|
|
63,273
|
|
Depreciation
expense
|
|
|
590
|
|
|
|
645
|
|
|
|
1,833
|
|
|
|
2,099
|
|
Total cost of goods
sold
|
|
|
30,552
|
|
|
|
22,560
|
|
|
|
86,865
|
|
|
|
65,372
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
7,588
|
|
|
|
6,993
|
|
|
|
18,865
|
|
|
|
22,719
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling
expenses
|
|
|
2,843
|
|
|
|
2,722
|
|
|
|
8,527
|
|
|
|
8,510
|
|
General and
administrative
|
|
|
3,415
|
|
|
|
3,194
|
|
|
|
9,546
|
|
|
|
8,702
|
|
Amortization
expense
|
|
|
135
|
|
|
|
33
|
|
|
|
405
|
|
|
|
33
|
|
Total operating
expenses
|
|
|
6,393
|
|
|
|
5,949
|
|
|
|
18,478
|
|
|
|
17,245
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
operations
|
|
|
1,195
|
|
|
|
1,044
|
|
|
|
387
|
|
|
|
5,474
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
(77)
|
|
|
|
(30)
|
|
|
|
(171)
|
|
|
|
(72)
|
|
Gain on
investments
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
2
|
|
Loss on sale of
property and equipment
|
|
|
–
|
|
|
|
(5)
|
|
|
|
–
|
|
|
|
(88)
|
|
Other (expense) income,
net
|
|
|
(5)
|
|
|
|
(2)
|
|
|
|
(10)
|
|
|
|
(61)
|
|
Total other income
(expense)
|
|
|
(82)
|
|
|
|
(37)
|
|
|
|
(181)
|
|
|
|
(219)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before
provision (benefit) for income taxes
|
|
|
1,113
|
|
|
|
1,007
|
|
|
|
206
|
|
|
|
5,255
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision (benefit) for
income taxes
|
|
|
130
|
|
|
|
527
|
|
|
|
(2)
|
|
|
|
1,851
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
$
|
983
|
|
|
$
|
480
|
|
|
$
|
208
|
|
|
$
|
3,404
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.06
|
|
|
$
|
0.03
|
|
|
$
|
0.01
|
|
|
$
|
0.22
|
|
Diluted
|
|
$
|
0.06
|
|
|
$
|
0.03
|
|
|
$
|
0.01
|
|
|
$
|
0.22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
15,490
|
|
|
|
15,473
|
|
|
|
15,462
|
|
|
|
15,572
|
|
Diluted
|
|
|
15,848
|
|
|
|
15,651
|
|
|
|
15,759
|
|
|
|
15,712
|
|
LIFEWAY FOODS, INC.
AND SUBSIDIARIES
Consolidated
Statements of Cash Flows
(Unaudited)
(In
thousands)
|
|
|
|
Nine months ended
September 30,
|
|
|
|
2022
|
|
|
2021
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
Net
income
|
|
$
|
208
|
|
|
$
|
3,404
|
|
Adjustments to
reconcile net income to operating cash flow:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
2,238
|
|
|
|
2,132
|
|
Non-cash interest
expense
|
|
|
5
|
|
|
|
9
|
|
Non-cash rent
expense
|
|
|
–
|
|
|
|
1
|
|
Bad debt
expense
|
|
|
–
|
|
|
|
6
|
|
Deferred
revenue
|
|
|
(23)
|
|
|
|
(23)
|
|
Stock-based
compensation
|
|
|
755
|
|
|
|
608
|
|
Loss on sale of
property and equipment
|
|
|
–
|
|
|
|
88
|
|
(Increase)
decrease in operating assets:
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
(1,576)
|
|
|
|
(1,832)
|
|
Inventories
|
|
|
(907)
|
|
|
|
(642)
|
|
Refundable income
taxes
|
|
|
(309)
|
|
|
|
(384)
|
|
Prepaid expenses and
other current assets
|
|
|
(115)
|
|
|
|
(152)
|
|
Increase
(decrease) in operating liabilities:
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
|
3,085
|
|
|
|
1,695
|
|
Accrued
expenses
|
|
|
1,003
|
|
|
|
1,498
|
|
Accrued income
taxes
|
|
|
(725)
|
|
|
|
(553)
|
|
Net cash provided by
operating activities
|
|
|
3,639
|
|
|
|
5,855
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
Purchases of property
and equipment
|
|
|
(2,609)
|
|
|
|
(1,685)
|
|
Acquisition, net of
cash acquired
|
|
|
(580)
|
|
|
|
(5,220)
|
|
Net cash used in
investing activities
|
|
|
(3,189)
|
|
|
|
(6,905)
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
Purchase of treasury
stock
|
|
|
–
|
|
|
|
(1,583)
|
|
Payment of deferred
financing cost
|
|
|
–
|
|
|
|
(25)
|
|
Proceeds from note
payable
|
|
|
–
|
|
|
|
5,000
|
|
Repayment of note
payable
|
|
|
(750)
|
|
|
|
(250)
|
|
Net cash used in
financing activities
|
|
|
(750)
|
|
|
|
3,142
|
|
|
|
|
|
|
|
|
|
|
Net (decrease)
increase in cash and cash equivalents
|
|
|
(300)
|
|
|
|
2,092
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents at the beginning of the period
|
|
|
9,233
|
|
|
|
7,926
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents at the end of the period
|
|
$
|
8,933
|
|
|
$
|
10,018
|
|
|
|
|
|
|
|
|
|
|
Supplemental cash
flow information:
|
|
|
|
|
|
|
|
|
Cash paid for income
taxes, net
|
|
$
|
640
|
|
|
$
|
2,788
|
|
Cash paid for
interest
|
|
$
|
158
|
|
|
$
|
60
|
|
|
|
|
|
|
|
|
|
|
Non-cash investing
activities
|
|
|
|
|
|
|
|
|
Increase (decrease) in
right-of-use assets and operating lease obligations
|
|
$
|
19
|
|
|
$
|
45
|
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/lifeway-foods-inc-announces-record-results-for-the-third-quarter-ended-september-30-2022-301676099.html
SOURCE Lifeway Foods, Inc.