Record annual net sales of $141.5 million, up 18.9% year-over-year and 51.1%
compared to 2019
Delivers 13th straight quarter of
year-over-year net sales growth
MORTON
GROVE, Ill., March 27,
2023 /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 fourth quarter and full
year ended December 31, 2022.
![(PRNewsfoto/Lifeway Foods, Inc.) (PRNewsfoto/Lifeway Foods, Inc.)](https://mma.prnewswire.com/media/1804095/Lifeway_1986_Logo.jpg)
"Culminated by our thirteenth straight quarter of year-over-year
topline growth, I am thrilled to report the highest recorded year
of sales in Lifeway's history, up 18.9% compared to a very strong
year in 2021, and up 51.1% when compared to 2019," commented
Julie Smolyansky, President and
Chief Executive Officer of Lifeway Foods. "What we accomplished in
2022 was a remarkable feat, reflecting our team's year-round
execution of the Lifeway 2.0 strategy, and driven by the continued
dominance of our core Lifeway Kefir product. Throughout 2022 we
strategically invested behind our core products to expand awareness
and drive velocities, and our efforts clearly paid dividends.
Despite facing broader macro headwinds that affected our industry,
our premium, better-for-you offerings grew in both consumption and
dollars. In the year ahead, we aim to assess further distribution
opportunities in current and new channels such as convenience,
where we have seen positive initial results. We will look to pursue
incremental brand awareness and exposure for our category-leading,
core Lifeway Kefir behind continued investments in marketing. I am
extremely happy with our performance in this record-breaking year
and look forward to continuing this momentum in 2023."
Full Year 2022 Results
Net sales were $141.5 million for
the year ended December 31, 2022, an
increase of $22.5 million or 18.9%
from the prior year. The net sales increase was primarily driven by
higher volumes of our branded drinkable kefir and the impact of
price increases implemented during the year, and to a lesser
extent, the favorable impact of our acquisition of Glen Oaks Farms
during the third quarter of 2021.
Gross profit as a percentage of net sales was 18.9% for the year
ended December 31, 2022.
Selling, general and administrative expenses as a percentage of
net sales were 16.9% for the year ended December 31, 2022, compared to 19.1% in the prior
year.
The Company reported net income of $0.9
million or $0.06 per basic and
diluted common share for the year ended December 31, 2022 compared to net income of
$3.3 million or $0.21 per basic and diluted common share during
the same period in 2021.
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, 2022, 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
|
December 31, 2022
and 2021
|
(In
thousands)
|
|
|
|
December
31,
|
|
|
|
2022
|
|
|
2021
|
|
Current
assets
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
4,444
|
|
|
$
|
9,233
|
|
Accounts receivable,
net of allowance for doubtful accounts and discounts &
allowances of
$1,820 and $1,170 at December 31, 2022 and
2021, respectively
|
|
|
11,414
|
|
|
|
9,930
|
|
Inventories,
net
|
|
|
9,631
|
|
|
|
8,285
|
|
Prepaid expenses and
other current assets
|
|
|
1,445
|
|
|
|
1,254
|
|
Refundable income
taxes
|
|
|
44
|
|
|
|
344
|
|
Total current
assets
|
|
|
26,978
|
|
|
|
29,046
|
|
|
|
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
|
|
20,905
|
|
|
|
20,130
|
|
Operating lease
right-of use asset
|
|
|
174
|
|
|
|
216
|
|
Goodwill
|
|
|
11,704
|
|
|
|
11,704
|
|
Intangible assets,
net
|
|
|
7,438
|
|
|
|
7,978
|
|
Other
assets
|
|
|
1,800
|
|
|
|
1,800
|
|
Total
assets
|
|
$
|
68,999
|
|
|
$
|
70,874
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
Current portion of note
payable
|
|
$
|
1,250
|
|
|
$
|
1,000
|
|
Accounts
payable
|
|
|
7,979
|
|
|
|
6,614
|
|
Accrued
expenses
|
|
|
3,813
|
|
|
|
3,724
|
|
Accrued income
taxes
|
|
|
–
|
|
|
|
725
|
|
Total current
liabilities
|
|
|
13,042
|
|
|
|
12,063
|
|
Line of
credit
|
|
|
2,777
|
|
|
|
2,777
|
|
Note
payable
|
|
|
2,477
|
|
|
|
3,470
|
|
Operating lease
liabilities
|
|
|
104
|
|
|
|
85
|
|
Deferred income
taxes, net
|
|
|
3,029
|
|
|
|
3,201
|
|
Other long-term
liabilities
|
|
|
–
|
|
|
|
147
|
|
Total
liabilities
|
|
|
21,429
|
|
|
|
21,743
|
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies (Note 9)
|
|
|
–
|
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
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; 14,645
and
15,435 shares outstanding at 2022 and
2021
|
|
|
6,509
|
|
|
|
6,509
|
|
Paid-in
capital
|
|
|
3,624
|
|
|
|
2,552
|
|
Treasury stock, at
cost
|
|
|
(16,993)
|
|
|
|
(13,436)
|
|
Retained
earnings
|
|
|
54,430
|
|
|
|
53,506
|
|
Total stockholders'
equity
|
|
|
47,570
|
|
|
|
49,131
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
and stockholders' equity
|
|
$
|
68,999
|
|
|
$
|
70,874
|
|
LIFEWAY FOODS, INC.
AND SUBSIDIARIES
|
Consolidated
Statements of Operations
|
For the three months
and twelve months ended December 31, 2022 and 2021
|
(In thousands,
except per share data)
|
|
|
|
Three Months
Ended
December
31,
|
|
|
Twelve months
Ended
December
31,
|
|
|
|
2022
|
|
|
2021
|
|
|
2022
|
|
|
2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales
|
|
$
|
35,838
|
|
|
$
|
30,974
|
|
|
$
|
141,568
|
|
|
$
|
119,065
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
|
|
27,318
|
|
|
|
24,331
|
|
|
|
112,350
|
|
|
|
87,604
|
|
Depreciation
expense
|
|
|
599
|
|
|
|
652
|
|
|
|
2,432
|
|
|
|
2,751
|
|
Total cost of goods
sold
|
|
|
27,917
|
|
|
|
24,983
|
|
|
|
114,782
|
|
|
|
90,355
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
7,921
|
|
|
|
5,991
|
|
|
|
26,786
|
|
|
|
28,710
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling
expenses
|
|
|
2,777
|
|
|
|
2,587
|
|
|
|
11,304
|
|
|
|
11,097
|
|
General and
administrative
|
|
|
3,047
|
|
|
|
2,909
|
|
|
|
12,593
|
|
|
|
11,611
|
|
Amortization
expense
|
|
|
135
|
|
|
|
89
|
|
|
|
540
|
|
|
|
122
|
|
Total operating
expenses
|
|
|
5,959
|
|
|
|
5,585
|
|
|
|
24,437
|
|
|
|
22,830
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
operations
|
|
|
1,962
|
|
|
|
406
|
|
|
|
2,349
|
|
|
|
5,880
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
(96)
|
|
|
|
(44)
|
|
|
|
(267)
|
|
|
|
(116)
|
|
Realized gain on
investments, net
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
2
|
|
Loss on sale of
property and equipment
|
|
|
(241)
|
|
|
|
–
|
|
|
|
(241)
|
|
|
|
(88)
|
|
Other (expense)
income
|
|
|
10
|
|
|
|
(1)
|
|
|
|
–
|
|
|
|
(62)
|
|
Total other (expense)
income
|
|
|
(327)
|
|
|
|
(45)
|
|
|
|
(508)
|
|
|
|
(264)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before
provision for income taxes
|
|
|
1,635
|
|
|
|
361
|
|
|
|
1,841
|
|
|
|
5,616
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
|
|
919
|
|
|
|
454
|
|
|
|
917
|
|
|
|
2,305
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
716
|
|
|
$
|
(93)
|
|
|
$
|
924
|
|
|
$
|
3,311
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.05
|
|
|
$
|
(0.01)
|
|
|
$
|
0.06
|
|
|
$
|
0.21
|
|
Diluted
|
|
$
|
0.05
|
|
|
$
|
(0.01)
|
|
|
$
|
0.06
|
|
|
$
|
0.21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
15,199
|
|
|
|
15,435
|
|
|
|
15,396
|
|
|
|
15,537
|
|
Diluted
|
|
|
15,557
|
|
|
|
15,686
|
|
|
|
15,718
|
|
|
|
15,773
|
|
LIFEWAY FOODS, INC.
AND SUBSIDIARIES
|
Consolidated
Statements of Cash Flows
|
For the Years Ended
December 31, 2022 and 2021
|
(In
thousands)
|
|
|
|
2022
|
|
|
2021
|
|
|
|
|
|
|
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
Net
income
|
|
$
|
924
|
|
|
$
|
3,311
|
|
Adjustments to
reconcile net income to operating cash flow:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
2,972
|
|
|
|
2,873
|
|
Non-cash interest
expense
|
|
|
6
|
|
|
|
11
|
|
Non-cash rent
expense
|
|
|
–
|
|
|
|
1
|
|
Bad debt
expense
|
|
|
–
|
|
|
|
2
|
|
Deferred
revenue
|
|
|
(28)
|
|
|
|
(30)
|
|
Stock-based
compensation
|
|
|
1,109
|
|
|
|
1,144
|
|
Deferred income
taxes
|
|
|
(172)
|
|
|
|
257
|
|
Loss on sale of
property and equipment
|
|
|
241
|
|
|
|
88
|
|
(Increase)
decrease in operating assets:
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
(1,483)
|
|
|
|
(1,931)
|
|
Inventories
|
|
|
(1,345)
|
|
|
|
(1,356)
|
|
Refundable income
taxes
|
|
|
300
|
|
|
|
(313)
|
|
Prepaid expenses and
other current assets
|
|
|
(191)
|
|
|
|
(91)
|
|
Increase
(decrease) in operating liabilities:
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
|
1,945
|
|
|
|
1,022
|
|
Accrued
expenses
|
|
|
434
|
|
|
|
504
|
|
Accrued income
taxes
|
|
|
(725)
|
|
|
|
72
|
|
Net cash provided by
operating activities
|
|
|
3,987
|
|
|
|
5,564
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
Purchases of property
and equipment
|
|
|
(3,449)
|
|
|
|
(1,922)
|
|
Acquisition, net of
cash acquired
|
|
|
(580)
|
|
|
|
(5,220)
|
|
Net cash used in
investing activities
|
|
|
(4,029)
|
|
|
|
(7,142)
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
Purchase of treasury
stock
|
|
|
(3,997)
|
|
|
|
(1,583)
|
|
Payment of deferred
financing cost
|
|
|
–
|
|
|
|
(32)
|
|
Proceeds from note
payable
|
|
|
–
|
|
|
|
5,000
|
|
Repayment of note
payable
|
|
|
(750)
|
|
|
|
(500)
|
|
Net cash (used in)
provided by financing activities
|
|
|
(4,747)
|
|
|
|
2,885
|
|
|
|
|
|
|
|
|
|
|
Net (decrease)
increase in cash and cash equivalents
|
|
|
(4,789)
|
|
|
|
1,307
|
|
Cash and cash
equivalents at the beginning of the period
|
|
|
9,233
|
|
|
|
7,926
|
|
Cash and cash
equivalents at the end of the period
|
|
$
|
4,444
|
|
|
$
|
9,233
|
|
|
|
|
|
|
|
|
|
|
Supplemental cash
flow information:
|
|
|
|
|
|
|
|
|
Cash paid for income
taxes, net of (refunds)
|
|
$
|
1,121
|
|
|
$
|
2,288
|
|
Cash paid for
interest
|
|
$
|
247
|
|
|
$
|
102
|
|
Non-cash investing
activities
|
|
|
|
|
|
|
|
|
Increase in
right-of-use assets and operating lease obligations
|
|
$
|
83
|
|
|
$
|
45
|
|
Business acquisition
escrow payable
|
|
$
|
–
|
|
|
$
|
580
|
|
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multimedia:https://www.prnewswire.com/news-releases/lifeway-foods-announces-results-for-the-fourth-quarter-and-record-full-year-ended-december-31-2022-301782540.html
SOURCE Lifeway Foods, Inc.