Lifeway Foods, Inc. Announces Results for the Fourth Quarter and Full Year Ended December 31, 2021
Lifeway Foods (LWAY) reports a 16.7% increase in annual net sales, totaling $119.1 million for the year ended December 31, 2021. This marks the 9th consecutive quarter of growth, driven by higher sales volumes of drinkable kefir and the acquisition of GlenOaks Farms. Although selling expenses rose to $11.1 million, Lifeway maintained a steady gross profit margin of 24.1%. The company encountered delays in financial reporting due to an accounting error related to a past acquisition, necessitating restatements for prior periods.
- Net sales increased 16.7% to $119.1 million year-over-year.
- Achieved 9 consecutive quarters of year-over-year net sales growth.
- Successful integration of GlenOaks Farms enhances product portfolio.
- Gross profit margin maintained at 24.1%.
- Increased selling expenses to $11.1 million, impacting profitability.
- Delayed financial results due to an accounting error, increasing goodwill and tax liability by $1.18 million.
Annual net sales increase
Delivers 9th straight quarter of year-over-year net sales growth
MORTON GROVE, Ill., July 21, 2022 /PRNewswire/ -- Lifeway Foods, Inc. (Nasdaq: LWAY) ("Lifeway" or "the Company"), the 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, 2021.
"I am excited to report yet another consecutive quarter of year-over-year growth for Lifeway and a very strong year for the brand as a whole, illustrated by our
Smolyansky added, "I would also like to highlight a few other wins for Lifeway in 2021. First, the acquisition of GlenOaks Farms. The integration of this great drinkable yogurt brand into our portfolio has been seamless so far, and we are very happy with its performance amongst its base of Western U.S. retailers, strategically complementing our eastern focused Fresh Made brand. Moving forward, we plan to expand upon the GlenOaks distribution. Our Lifeway Kefir product remains the true core of our business, and we are seeing a growth in velocity at some of our top retailers, which should drive continued growth of the product throughout the current year and beyond."
Full Year 2021 Results
Net sales were
Gross profit as a percentage of net sales was
Selling expenses increased
General and administrative expenses decreased to
The Company reported net income of
Delayed Reporting of Financial Results and Filing of 10-K
As previously announced, the Company experienced delays in reporting its financial results and filing its 10-K for the year ended December 31, 2021. The delay is due to the identification of an error in accounting for income taxes of a prior year acquisition, resulting in a
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, France and the United Kingdom. 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, 2020, 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.
Contact:
Lifeway Foods, Inc.
Phone: 847-967-1010
Email: info@lifeway.net
LIFEWAY FOODS, INC. AND SUBSIDIARIES | ||||||||
Consolidated Balance Sheets | ||||||||
December 31, 2021 and 2020 | ||||||||
(In thousands) | ||||||||
December 31, | ||||||||
2021 | 2020 (As Restated) | |||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 9,233 | $ | 7,926 | ||||
Accounts receivable, net of allowance for doubtful accounts and discounts & allowances of | 9,930 | 8,002 | ||||||
Inventories, net | 8,285 | 6,930 | ||||||
Prepaid expenses and other current assets | 1,254 | 1,163 | ||||||
Refundable income taxes | 344 | 31 | ||||||
Total current assets | 29,046 | 24,052 | ||||||
Property, plant and equipment, net | 20,130 | 21,048 | ||||||
Operating lease right-of use asset | 216 | 345 | ||||||
Intangible assets | ||||||||
Goodwill and indefinite-lived intangibles | 15,404 | 14,004 | ||||||
Other intangible assets, net | 4,278 | – | ||||||
Total intangible assets | 19,682 | 14,004 | ||||||
Other Assets | 1,800 | 1,800 | ||||||
Total assets | $ | 70,874 | $ | 61,249 | ||||
Current liabilities | ||||||||
Current portion of note payable | $ | 1,000 | $ | – | ||||
Accounts payable | 6,614 | 5,592 | ||||||
Accrued expenses | 3,724 | 2,196 | ||||||
Accrued income taxes | 725 | 653 | ||||||
Total current liabilities | 12,063 | 8,441 | ||||||
Line of credit | 2,777 | 2,768 | ||||||
Note Payable | 3,470 | – | ||||||
Operating lease liabilities | 85 | 165 | ||||||
Deferred income taxes, net | 3,201 | 2,944 | ||||||
Other long-term liabilities | 147 | 77 | ||||||
Total liabilities | 21,743 | 14,395 | ||||||
Commitments and contingencies | ||||||||
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; 15,435 and 15,604 shares outstanding at 2021 and 2020 | 6,509 | 6,509 | ||||||
Paid-in capital | 2,552 | 2,600 | ||||||
Treasury stock, at cost | (13,436) | (12,450) | ||||||
Retained earnings | 53,506 | 50,195 | ||||||
Total stockholders' equity | 49,131 | 46,854 | ||||||
Total liabilities and stockholders' equity | $ | 70,874 | $ | 61,249 | ||||
LIFEWAY FOODS, INC. AND SUBSIDIARIES | ||||||||||||||||
Consolidated Statements of Operations | ||||||||||||||||
For the three months and twelve months ended December 31, 2021 and 2020 | ||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||
Three Months Ended December 31, | Twelve months Ended December 31, | |||||||||||||||
2021 | 2020 | 2021 | 2020 (As Restated) | |||||||||||||
Net sales | $ | 30,974 | $ | 25,585 | $ | 119,065 | $ | 102,026 | ||||||||
Cost of goods sold | 24,331 | 18,393 | 87,604 | 72,006 | ||||||||||||
Depreciation expense | 652 | 761 | 2,751 | 3,087 | ||||||||||||
Total cost of goods sold | 24,983 | 19,154 | 90,355 | 75,093 | ||||||||||||
Gross profit | 5,991 | 6,431 | 28,710 | 26,933 | ||||||||||||
Selling expenses | 2,587 | 2,786 | 11,097 | 10,197 | ||||||||||||
General and administrative | 2,909 | 2,980 | 11,611 | 11,661 | ||||||||||||
Amortization expense | 89 | 35 | 122 | 152 | ||||||||||||
Total operating expenses | 5,585 | 5,801 | 22,830 | 22,010 | ||||||||||||
Income from operations | 406 | 630 | 5,880 | 4,923 | ||||||||||||
Other income (expense): | ||||||||||||||||
Interest expense | (44) | (27) | (116) | (118) | ||||||||||||
Realized gain on investments, net | – | – | 2 | 4 | ||||||||||||
Loss on sale of property and equipment | – | – | (88) | (28) | ||||||||||||
Other (expense) income | (1) | – | (62) | 47 | ||||||||||||
Total other (expense) income | (45) | (27) | (264) | (95) | ||||||||||||
Income before provision for income taxes | 361 | 603 | 5,616 | 4,828 | ||||||||||||
Provision for income taxes | 454 | 764 | 2,305 | 1,596 | ||||||||||||
Net income (loss) | $ | (93) | $ | (161) | $ | 3,311 | $ | 3,232 | ||||||||
Earnings (loss) per common share: | ||||||||||||||||
Basic | $ | (0.01) | $ | 0.02 | $ | 0.21 | $ | 0.21 | ||||||||
Diluted | $ | (0.01) | $ | 0.02 | $ | 0.21 | $ | 0.21 | ||||||||
Weighted average common shares: | ||||||||||||||||
Basic | 15,435 | 15,604 | 15,537 | 15,597 | ||||||||||||
Diluted | 15,686 | 15,797 | 15,773 | 15,766 | ||||||||||||
LIFEWAY FOODS, INC. AND SUBSIDIARIES | ||||||||
Consolidated Statements of Cash Flows | ||||||||
For the Years Ended December 31, 2021 and 2020 | ||||||||
(In thousands) | ||||||||
2021 | 2020 (As Restated) | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 3,311 | $ | 3,232 | ||||
Adjustments to reconcile net income to operating cash flow: | ||||||||
Depreciation and amortization | 2,873 | 3,239 | ||||||
Non-cash interest expense | 11 | 23 | ||||||
Non-cash rent expense | 1 | (37) | ||||||
Bad debt expense | 2 | (6) | ||||||
Deferred Revenue | (30) | (91) | ||||||
Stock-based compensation | 1,144 | 393 | ||||||
Deferred income taxes | 257 | 841 | ||||||
Loss on sale of property and equipment | 88 | 28 | ||||||
(Increase) decrease in operating assets: | ||||||||
Accounts receivable | (1,931) | (1,304) | ||||||
Inventories | (1,356) | (538) | ||||||
Refundable income taxes | (313) | 649 | ||||||
Prepaid expenses and other current assets | (91) | 423 | ||||||
Increase (decrease) in operating liabilities: | ||||||||
Accounts payable | 1,022 | 311 | ||||||
Accrued expenses | 504 | (1,278) | ||||||
Operating lease asset amortization/liability | – | – | ||||||
Accrued income taxes | 72 | 500 | ||||||
Net cash provided by operating activities | 5,564 | 6,385 | ||||||
Cash flows from investing activities: | ||||||||
Purchases of property and equipment | (1,922) | (1,895) | ||||||
Proceeds from sale of property and equipment | – | 5 | ||||||
Acquisition, net of cash acquired | (5,220) | – | ||||||
Net cash used in investing activities | (7,142) | (1,890) | ||||||
Cash flows from financing activities: | ||||||||
Purchase of treasury stock | (1,583) | (405) | ||||||
Payment of deferred financing cost | (32) | – | ||||||
Proceeds from note payable | 5,000 | – | ||||||
Repayment of note payable | (500) | – | ||||||
Net cash provided by (used in) financing activities | 2,885 | (405) | ||||||
Net increase in cash and cash equivalents | 1,307 | 4,090 | ||||||
Cash and cash equivalents at the beginning of the period | 7,926 | 3,836 | ||||||
Cash and cash equivalents at the end of the period | $ | 9,233 | $ | 7,926 | ||||
Supplemental cash flow information: | ||||||||
Cash paid for income taxes, net of (refunds) | $ | 2,288 | $ | (426) | ||||
Cash paid for interest | $ | 102 | $ | 99 | ||||
Non-cash investing activities | ||||||||
Increase (decrease) in right-of-use assets and operating lease obligations | $ | 45 | $ | (44) | ||||
Business acquisition escrow payable | $ | 580 | $ | – | ||||
Non-cash financing activities | ||||||||
Issuance of common stock under equity incentive plans | $ | – | $ | 522 | ||||
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SOURCE Lifeway Foods, Inc.
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