Net sales increase 17.1% year-over-year to
$39.2 million; up 34.5% compared to
2021
Delivers 15th straight quarter of
year-over-year net sales growth and 1,170 basis points of
year-over-year gross profit margin improvement
MORTON
GROVE, Ill., Aug. 14,
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 second quarter ended
June 30, 2023.
"I am thrilled to report yet another exceptional quarter in
2023, highlighted by our continued trend of strong year-over-year
net sales growth as well as substantial gross margin improvements,"
commented Julie Smolyansky,
President and Chief Executive Officer of Lifeway Foods. "Our
proactive operating discipline, along with easing inflationary
pressures, have recently allowed us to further reap the benefits of
our consistent topline expansion as our gross profit margin
increased 1,170 basis points year-over-year and 710 basis points
quarter-over-quarter. Alongside the improving profitability, our
impressive net sales growth of 17.1%, Lifeway's 15th
consecutive quarter of year-over-year growth, reflects another
meaningful increase in volumes and the wide customer acceptance of
inflation-justified price increases. Our customers continue to
demonstrate their loyalty to our premium, better-for-you offerings,
and we continue to capitalize on incremental consumers seeking out
high quality products at an exceptional value through our strategic
investments in both retail and branding initiatives. As usual, we
will pursue further measures to gain exposure to new customers
through both marketing and distribution opportunities. We see
potential growth avenues for our core kefir products, as well as
Lifeway Farmer Cheese, a strong performing item that has the
benefit of recent press attention related to popular social media
recipes for blended cottage cheese. I'm proud of our execution so
far this year and energized to build upon the momentum in the
second half of 2023."
Second Quarter 2023 Results
Net sales were $39.2 million for
the second quarter ended June 30,
2023, an increase of $5.7
million or 17.1% from the same period of 2022. The net sales
increase was primarily driven by higher volumes of our branded
drinkable kefir, and to a lesser extent the impact of price
increases implemented during the fourth quarter of 2022.
Gross profit as a percentage of net sales was 28.7% for the
second quarter ended June 30, 2023,
compared to 17.0% in the same period of 2022. The 1,170 basis point
increase versus the prior year was primarily due to the higher
volumes of our branded products and the favorable impact of milk
pricing, and to a lesser extent the price increases implemented
during the fourth quarter of 2022 and decreased transportation
costs.
Selling, general and administrative expenses as a percentage of
net sales were 16.3% for the second quarter ended June 30, 2023, compared to 15.9% in the same
period of 2022.
The Company reported net income of $3.2
million or $0.22 per basic and
$0.21 per diluted common share for
the second quarter ended June 30,
2023 compared to net income of $0.1
million or $0.01 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 June 30, 2023 and December
31, 2022 (In thousands)
|
|
|
|
June
30,
2023
|
|
|
December
31,
|
|
|
|
Unaudited
|
|
|
2022
|
|
Current
assets
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
7,449
|
|
|
$
|
4,444
|
|
Accounts receivable,
net of allowance for doubtful accounts and discounts &
allowances
of $1,390 and $1,820 at June 30, 2023 and December 31, 2022
respectively
|
|
|
11,320
|
|
|
|
11,414
|
|
Inventories,
net
|
|
|
9,670
|
|
|
|
9,631
|
|
Prepaid expenses and
other current assets
|
|
|
1,214
|
|
|
|
1,445
|
|
Refundable income
taxes
|
|
|
4
|
|
|
|
44
|
|
Total current
assets
|
|
|
29,657
|
|
|
|
26,978
|
|
|
|
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
|
|
21,699
|
|
|
|
20,905
|
|
Operating lease
right-of-use asset
|
|
|
136
|
|
|
|
174
|
|
Goodwill
|
|
|
11,704
|
|
|
|
11,704
|
|
Intangible assets,
net
|
|
|
7,168
|
|
|
|
7,438
|
|
Other
assets
|
|
|
1,800
|
|
|
|
1,800
|
|
Total
assets
|
|
$
|
72,164
|
|
|
$
|
68,999
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
Current portion of note
payable
|
|
$
|
1,250
|
|
|
$
|
1,250
|
|
Accounts
payable
|
|
|
5,565
|
|
|
|
7,979
|
|
Accrued
expenses
|
|
|
4,294
|
|
|
|
3,813
|
|
Accrued income
taxes
|
|
|
1,024
|
|
|
|
–
|
|
Total current
liabilities
|
|
|
12,133
|
|
|
|
13,042
|
|
Line of
credit
|
|
|
2,777
|
|
|
|
2,777
|
|
Note
payable
|
|
|
1,980
|
|
|
|
2,477
|
|
Operating lease
liabilities
|
|
|
73
|
|
|
|
104
|
|
Deferred income
taxes, net
|
|
|
3,029
|
|
|
|
3,029
|
|
Total
liabilities
|
|
|
19,992
|
|
|
|
21,429
|
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies (Note 9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
|
|
|
|
|
Preferred stock, no par
value; 2,500 shares authorized; no shares issued or outstanding
at
June 30, 2023 and December 31, 2022
|
|
|
–
|
|
|
|
–
|
|
Common stock, no par
value; 40,000 shares authorized; 17,274 shares issued; 14,656
and 14,645 outstanding at June 30, 2023 and December 31, 2022,
respectively
|
|
|
6,509
|
|
|
|
6,509
|
|
Paid-in
capital
|
|
|
4,167
|
|
|
|
3,624
|
|
Treasury stock, at
cost
|
|
|
(16,920)
|
|
|
|
(16,993)
|
|
Retained
earnings
|
|
|
58,416
|
|
|
|
54,430
|
|
Total stockholders'
equity
|
|
|
52,172
|
|
|
|
47,570
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
and stockholders' equity
|
|
$
|
72,164
|
|
|
$
|
68,999
|
|
LIFEWAY FOODS, INC.
AND SUBSIDIARIES Consolidated Statements of
Operations For the three and six months ended June 30,
2023 and 2022 (In thousands, except per share
data)
|
|
|
|
Three Months
Ended
June
30,
|
|
|
Six Months
Ended
June
30,
|
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales
|
|
$
|
39,230
|
|
|
$
|
33,491
|
|
|
$
|
77,134
|
|
|
$
|
67,590
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
|
|
27,299
|
|
|
|
27,207
|
|
|
|
56,329
|
|
|
|
55,070
|
|
Depreciation
expense
|
|
|
651
|
|
|
|
587
|
|
|
|
1,299
|
|
|
|
1,243
|
|
Total cost of goods
sold
|
|
|
27,950
|
|
|
|
27,794
|
|
|
|
57,628
|
|
|
|
56,313
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
11,280
|
|
|
|
5,697
|
|
|
|
19,506
|
|
|
|
11,277
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling
expenses
|
|
|
2,571
|
|
|
|
2,482
|
|
|
|
6,090
|
|
|
|
5,684
|
|
General and
administrative
|
|
|
3,808
|
|
|
|
2,839
|
|
|
|
6,943
|
|
|
|
6,131
|
|
Amortization
expense
|
|
|
135
|
|
|
|
135
|
|
|
|
270
|
|
|
|
270
|
|
Total operating
expenses
|
|
|
6,514
|
|
|
|
5,456
|
|
|
|
13,303
|
|
|
|
12,085
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
operations
|
|
|
4,766
|
|
|
|
241
|
|
|
|
6,203
|
|
|
|
(808)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
(109)
|
|
|
|
(52)
|
|
|
|
(213)
|
|
|
|
(94)
|
|
Gain on sale of
property and equipment
|
|
|
33
|
|
|
|
–
|
|
|
|
33
|
|
|
|
–
|
|
Other (expense) income,
net
|
|
|
(5)
|
|
|
|
(4)
|
|
|
|
–
|
|
|
|
(5)
|
|
Total other income
(expense)
|
|
|
(81)
|
|
|
|
(56)
|
|
|
|
(180)
|
|
|
|
(99)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before
provision for income taxes
|
|
|
4,685
|
|
|
|
185
|
|
|
|
6,023
|
|
|
|
(907)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision (benefit) for
income taxes
|
|
|
1,529
|
|
|
|
65
|
|
|
|
2,037
|
|
|
|
(132)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
3,156
|
|
|
$
|
120
|
|
|
$
|
3,986
|
|
|
$
|
(775)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.22
|
|
|
$
|
0.01
|
|
|
$
|
0.27
|
|
|
$
|
(0.05)
|
|
Diluted
|
|
$
|
0.21
|
|
|
$
|
0.01
|
|
|
$
|
0.26
|
|
|
$
|
(0.05)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
14,654
|
|
|
|
15,466
|
|
|
|
14,649
|
|
|
|
15,450
|
|
Diluted
|
|
|
15,084
|
|
|
|
15,875
|
|
|
|
15,058
|
|
|
|
15,772
|
|
LIFEWAY FOODS, INC.
AND SUBSIDIARIES Consolidated Statements of Cash
Flows For the six months ended June 30, 2023 and
2022 (In thousands)
|
|
|
|
Six months ended
June 30,
|
|
|
|
2023
|
|
|
2022
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
3,986
|
|
|
$
|
(775)
|
|
Adjustments to
reconcile net income (loss) to operating cash
flow:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
1,569
|
|
|
|
1,513
|
|
Stock-based
compensation
|
|
|
655
|
|
|
|
547
|
|
Non-cash interest
expense
|
|
|
3
|
|
|
|
3
|
|
Bad debt
expense
|
|
|
2
|
|
|
|
–
|
|
Deferred
revenue
|
|
|
–
|
|
|
|
(15)
|
|
Gain on sale of
equipment
|
|
|
(33)
|
|
|
|
–
|
|
(Increase)
decrease in operating assets:
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
91
|
|
|
|
(424)
|
|
Inventories
|
|
|
(39)
|
|
|
|
(151)
|
|
Refundable income
taxes
|
|
|
40
|
|
|
|
(440)
|
|
Prepaid expenses and
other current assets
|
|
|
232
|
|
|
|
154
|
|
Increase
(decrease) in operating liabilities:
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
|
(2,526)
|
|
|
|
246
|
|
Accrued
expenses
|
|
|
451
|
|
|
|
(462)
|
|
Accrued income
taxes
|
|
|
1,024
|
|
|
|
(725)
|
|
Net cash provided by
(used in) operating activities
|
|
|
5,455
|
|
|
|
(529)
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
Purchases of property
and equipment
|
|
|
(1,990)
|
|
|
|
(1,710)
|
|
Proceeds from sales of
equipment
|
|
|
40
|
|
|
|
–
|
|
Net cash used in
investing activities
|
|
|
(1,950)
|
|
|
|
(1,710)
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
Repayment of note
payable
|
|
|
(500)
|
|
|
|
(500)
|
|
Net cash used in
financing activities
|
|
|
(500)
|
|
|
|
(500)
|
|
|
|
|
|
|
|
|
|
|
Net increase
(decrease) in cash and cash equivalents
|
|
|
3,005
|
|
|
|
(2,739)
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents at the beginning of the period
|
|
|
4,444
|
|
|
|
9,233
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents at the end of the period
|
|
$
|
7,449
|
|
|
$
|
6,494
|
|
|
|
|
|
|
|
|
|
|
Supplemental cash
flow information:
|
|
|
|
|
|
|
|
|
Cash paid for income
taxes, net
|
|
$
|
973
|
|
|
$
|
640
|
|
Cash paid for
interest
|
|
$
|
238
|
|
|
$
|
88
|
|
|
|
|
|
|
|
|
|
|
Non-cash investing
activities
|
|
|
|
|
|
|
|
|
Accrued purchase of
property and equipment
|
|
$
|
110
|
|
|
$
|
398
|
|
Increase in
right-of-use assets and operating lease obligations
|
|
$
|
–
|
|
|
$
|
36
|
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/lifeway-foods-announces-record-results-for-the-second-quarter-ended-june-30-2023-301899486.html
SOURCE Lifeway Foods, Inc.