Net sales increase 11.2% year-over-year to
$37.9 million; up 29.0% compared to
2021
Delivers 14th straight quarter of
year-over-year net sales growth
MORTON
GROVE, Ill., May 15, 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 first quarter ended March 31, 2023.
"Following our record fiscal year 2022, I am very pleased to
announce our momentum continued into the first quarter of 2023 with
our 14th consecutive quarter of strong year-over-year
topline expansion," commented Julie
Smolyansky, President and Chief Executive Officer of Lifeway
Foods. "The net sales growth of 11.2% reflects meaningfully
positive volumes accompanied by increased pricing, which
illustrates our expanded reach and the loyalty of our consumers who
are searching for premium, better-for-you offerings. Further, our
gross profit margin increased 530 basis points year-over-year, an
important metric that highlights our incredible focus and fiscal
discipline. I believe Lifeway is poised to capitalize as macro
trends encourage consumers to look for high quality products at an
exceptional value, and in the first quarter of 2023, this market
trend has been confirmed by the accelerating unit velocities of our
core kefir line. We made marketing investments in both retail and
branding initiatives in the first quarter that showed positive
results and we will continue to build upon those successes in 2023.
This year, we will further explore options for productivity and
profitability optimizations through advanced promotions software
and AI-powered marketing and operations tools. These emergent
technologies will support the progress toward our goal of
increasing access to Lifeway's best-in-class offerings and growing
shareholder value as we reach more consumers through distribution
and marketing efforts."
First Quarter 2023 Results
Net sales were $37.9 million for
the first quarter ended March 31,
2023, an increase of $3.8
million or 11.2% from the same period of 2022. The net sales
increase was primarily driven by higher volumes of our branded
drinkable kefir and the impact of price increases implemented
during the fourth quarter of 2022.
Gross profit as a percentage of net sales was 21.7% for the
first quarter ended March 31, 2023,
compared to 16.4% in the same period of 2022. The 530 basis point
increase versus the prior year was primarily due to the impact of
price increases implemented during the fourth quarter of 2022 and
higher volumes of our branded product, and to a lesser extent the
favorable impact of milk pricing and favorable transportation
costs.
Selling, general and administrative expenses as a percentage of
net sales were 17.5% for the first quarter ended March 31, 2023, compared to 19.1% in the same
period of 2022.
The Company reported net income of $0.8
million or $0.06 per basic and
diluted common share for the first quarter ended March 31, 2023 compared to net loss of
$(0.9) million or $(0.06) per basic and diluted common share during
the same period in 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, 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
|
March 31, 2023 and
2022
|
(In
thousands)
|
|
|
|
March 31,
2023
|
|
|
December
31,
|
|
|
|
Unaudited
|
|
|
2022
|
|
Current
assets
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
5,209
|
|
|
$
|
4,444
|
|
Accounts receivable,
net of allowance for doubtful accounts and discounts &
allowances
of $1,750 and $1,820 at March 31, 2023 and December 31, 2022
respectively
|
|
|
11,985
|
|
|
|
11,414
|
|
Inventories,
net
|
|
|
9,292
|
|
|
|
9,631
|
|
Prepaid expenses and
other current assets
|
|
|
1,068
|
|
|
|
1,445
|
|
Refundable income
taxes
|
|
|
–
|
|
|
|
44
|
|
Total current
assets
|
|
|
27,554
|
|
|
|
26,978
|
|
|
|
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
|
|
22,140
|
|
|
|
20,905
|
|
Operating lease
right-of-use asset
|
|
|
154
|
|
|
|
174
|
|
Goodwill
|
|
|
11,704
|
|
|
|
11,704
|
|
Intangible assets,
net
|
|
|
7,303
|
|
|
|
7,438
|
|
Other
assets
|
|
|
1,800
|
|
|
|
1,800
|
|
Total
assets
|
|
$
|
70,655
|
|
|
$
|
68,999
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
Current portion of note
payable
|
|
$
|
1,000
|
|
|
$
|
1,250
|
|
Accounts
payable
|
|
|
9,146
|
|
|
|
7,979
|
|
Accrued
expenses
|
|
|
3,228
|
|
|
|
3,813
|
|
Accrued income
taxes
|
|
|
416
|
|
|
|
–
|
|
Total current
liabilities
|
|
|
13,790
|
|
|
|
13,042
|
|
Line of
credit
|
|
|
2,777
|
|
|
|
2,777
|
|
Note
payable
|
|
|
2,228
|
|
|
|
2,477
|
|
Operating lease
liabilities
|
|
|
88
|
|
|
|
104
|
|
Deferred income
taxes, net
|
|
|
3,029
|
|
|
|
3,029
|
|
Total
liabilities
|
|
|
21,912
|
|
|
|
21,429
|
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies (Note 9)
|
|
|
–
|
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
|
|
|
|
|
Preferred stock, no par
value; 2,500 shares authorized; no shares issued or outstanding
at
March 31, 2023 and December 31, 2022
|
|
|
–
|
|
|
|
–
|
|
Common stock, no par
value; 40,000 shares authorized; 17,274 shares issued; 14,645
outstanding at March 31, 2023 and December 31, 2022
|
|
|
6,509
|
|
|
|
6,509
|
|
Paid-in
capital
|
|
|
3,967
|
|
|
|
3,624
|
|
Treasury stock, at
cost
|
|
|
(16,993)
|
|
|
|
(16,993)
|
|
Retained
earnings
|
|
|
55,260
|
|
|
|
54,430
|
|
Total stockholders'
equity
|
|
|
48,743
|
|
|
|
47,570
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
and stockholders' equity
|
|
$
|
70,655
|
|
|
$
|
68,999
|
|
LIFEWAY FOODS, INC.
AND SUBSIDIARIES
|
Consolidated
Statements of Operations
|
For the three months
ended March 31, 2023 and 2022
|
(In
thousands, except per share data)
|
|
|
|
2023
|
|
|
2022
|
|
|
|
|
|
|
|
|
Net
Sales
|
|
$
|
37,904
|
|
|
$
|
34,099
|
|
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
|
|
29,030
|
|
|
|
27,863
|
|
Depreciation
expense
|
|
|
648
|
|
|
|
656
|
|
Total cost of goods
sold
|
|
|
29,678
|
|
|
|
28,519
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
8,226
|
|
|
|
5,580
|
|
|
|
|
|
|
|
|
|
|
Selling
expense
|
|
|
3,519
|
|
|
|
3,202
|
|
General and
administrative expense
|
|
|
3,135
|
|
|
|
3,292
|
|
Amortization
expense
|
|
|
135
|
|
|
|
135
|
|
Total operating
expenses
|
|
|
6,789
|
|
|
|
6,629
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
operations
|
|
|
1,437
|
|
|
|
(1,049)
|
|
|
|
|
|
|
|
|
|
|
Other (expense)
income:
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
(104)
|
|
|
|
(42)
|
|
Other (expense) income,
net
|
|
|
5
|
|
|
|
(1)
|
|
Total other (expense)
income
|
|
|
(99)
|
|
|
|
(43)
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before
provision for income taxes
|
|
|
1,338
|
|
|
|
(1,092)
|
|
|
|
|
|
|
|
|
|
|
Provision (benefit) for
income taxes
|
|
|
508
|
|
|
|
(197)
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
830
|
|
|
$
|
(895)
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
common share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.06
|
|
|
$
|
(0.06)
|
|
Diluted
|
|
$
|
0.06
|
|
|
$
|
(0.06)
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares:
|
|
|
|
|
|
|
|
|
Basic
|
|
|
14,645
|
|
|
|
15,435
|
|
Diluted
|
|
|
15,030
|
|
|
|
15,435
|
|
LIFEWAY FOODS, INC.
AND SUBSIDIARIES
|
Consolidated
Statements of Cash Flows
|
For the three months
ended March 31, 2023 and 2022
|
(In
thousands)
|
|
|
|
Three months ended
March 31,
|
|
|
|
2023
|
|
|
2022
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
830
|
|
|
$
|
(895)
|
|
Adjustments to
reconcile net income (loss) to operating cash
flow:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
783
|
|
|
|
791
|
|
Non-cash interest
expense
|
|
|
2
|
|
|
|
2
|
|
Deferred
revenue
|
|
|
–
|
|
|
|
(8)
|
|
Stock-based
compensation
|
|
|
343
|
|
|
|
315
|
|
(Increase)
decrease in operating assets:
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
(572)
|
|
|
|
(1,458)
|
|
Inventories
|
|
|
339
|
|
|
|
(364)
|
|
Refundable income
taxes
|
|
|
44
|
|
|
|
(159)
|
|
Prepaid expenses and
other current assets
|
|
|
377
|
|
|
|
188
|
|
Increase
(decrease) in operating liabilities:
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
|
1,046
|
|
|
|
2,109
|
|
Accrued
expenses
|
|
|
(581)
|
|
|
|
(643)
|
|
Accrued income
taxes
|
|
|
416
|
|
|
|
(526)
|
|
Net cash provided by
(used in) operating activities
|
|
|
3,027
|
|
|
|
(648)
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
Purchases of property
and equipment
|
|
|
(1,762)
|
|
|
|
(348)
|
|
Net cash used in
investing activities
|
|
|
(1,762)
|
|
|
|
(348)
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
Repayment of note
payable
|
|
|
(500)
|
|
|
|
(250)
|
|
Net cash used in
financing activities
|
|
|
(500)
|
|
|
|
(250)
|
|
|
|
|
|
|
|
|
|
|
Net increase
(decrease) in cash and cash equivalents
|
|
|
765
|
|
|
|
(1,246)
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents at the beginning of the period
|
|
|
4,444
|
|
|
|
9,233
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents at the end of the period
|
|
$
|
5,209
|
|
|
$
|
7,987
|
|
|
|
|
|
|
|
|
|
|
Supplemental cash
flow information:
|
|
|
|
|
|
|
|
|
Cash paid for income
taxes, net
|
|
$
|
47
|
|
|
$
|
95
|
|
Cash paid for
interest
|
|
$
|
130
|
|
|
$
|
40
|
|
|
|
|
|
|
|
|
|
|
Non-cash investing
activities
|
|
|
|
|
|
|
|
|
Accrued purchase of
property and equipment
|
|
$
|
122
|
|
|
$
|
17
|
|
Increase in
right-of-use assets and operating lease obligations
|
|
$
|
19
|
|
|
$
|
36
|
|
View original
content:https://www.prnewswire.com/news-releases/lifeway-foods-announces-results-for-the-first-quarter-ended-march-31-2023-301823951.html
SOURCE Lifeway Foods, Inc.