Lifeway Foods, Inc. Announces Record Results for the Third Quarter Ended September 30, 2022
Lifeway Foods (LWAY) reported a remarkable 29.1% increase in net sales for Q3 2022, reaching $38.1 million, marking the 12th consecutive quarter of year-over-year growth. This growth was driven by strong sales of their kefir products and price increases from early 2022. The company achieved a net income of $1.0 million, translating to $0.06 per share. Despite rising expenses, Lifeway aims to expand distribution and marketing efforts, particularly within the convenience channel, as they prepare for a strong finish to 2022 and a promising 2023.
- Net sales increased 29.1% year-over-year to $38.1 million.
- Achieved 12 consecutive quarters of net sales growth.
- Net income of $1.0 million or $0.06 per share.
- Selling, general and administrative expenses rose from $5.9 million to $6.3 million.
Net sales increase
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.
"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
Third Quarter 2022 Results
Net sales were
Gross profit as a percentage of net sales was
Selling, general and administrative expenses increased
The Company reported net income of
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, | December 31, | |||||||
Unaudited | 2021 | |||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 8,933 | $ | 9,233 | ||||
Accounts receivable, net of allowance for doubtful accounts and discounts & | 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 | – | – | ||||||
Common stock, no par value; 40,000 shares authorized; 17,274 shares issued; 15,495 | 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 | ||||
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SOURCE Lifeway Foods, Inc.
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