Lifeway Foods, Inc. Announces Results for the Second Quarter Ended June 30, 2022
Lifeway Foods reported a net sales increase of 14.8% year-over-year to $33.5 million for Q2 2022, marking its 11th consecutive quarter of growth. The rise was driven by higher sales volumes of drinkable kefir and price increases. Despite inflationary pressures, consumer demand remains strong, demonstrated by expanded distribution and sales velocities. The gross profit margin was 17.0%, while net income was $0.1 million or $0.01 per share. The company faced delays in reporting financial results but remains optimistic about growth opportunities.
- 14.8% year-over-year net sales growth.
- 11 consecutive quarters of net sales growth.
- $33.5 million in net sales for Q2 2022.
- Strong consumer demand for kefir products.
- Increased distribution channels and retail partnerships.
- Gross profit margin at 17.0%, indicating potential room for improvement.
- Delayed reporting of financial results and filings.
Net sales increase
Delivers 11th straight quarter of year-over-year net sales growth
MORTON GROVE, Ill., Sept. 26, 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 second quarter ended June 30, 2022.
"I am excited to report yet another consecutive quarter of growth at Lifeway, driven primarily by the continued strong performance of our core drinkable Kefir," commented Julie Smolyansky, Lifeway's President and Chief Executive Officer. "Throughout 2022 we have continued to execute on our strategic initiatives, elevating consumer awareness and brand engagement, which has led to ongoing improvement in brand performance. This is highlighted in the second quarter by our
Net sales were
Gross profit as a percentage of net sales was
Selling, general and administrative expenses increased
The Company reported net income of
As previously announced, the Company experienced delays in reporting its financial results and filing its 10-K for the year ended December 31, 2021, which was subsequently filed on July 21, 2022. As a result, the reporting of financial results and filing of its 10-Q for the second quarter ended June 30, 2022 was also delayed.
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.
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.
For media inquiries:
Derek Miller
Vice President of Communications, Lifeway Foods
Email: derekm@lifeway.net
For general Lifeway Foods inquiries:
info@lifeway.net
Phone: 847-967-1010
LIFEWAY FOODS, INC. AND SUBSIDIARIES
| ||||||||
June 30, | December 31, | |||||||
Unaudited | 2021 | |||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 6,494 | $ | 9,233 | ||||
Accounts receivable, net of allowance for doubtful accounts and discounts & allowances of | 10,354 | 9,930 | ||||||
Inventories, net | 8,436 | 8,285 | ||||||
Prepaid expenses and other current assets | 1,100 | 1,254 | ||||||
Refundable income taxes | 784 | 344 | ||||||
Total current assets | 27,168 | 29,046 | ||||||
Property, plant and equipment, net | 20,595 | 20,130 | ||||||
Operating lease right-of-use asset | 179 | 216 | ||||||
Goodwill | 11,704 | 11,704 | ||||||
Intangible assets, net | 7,708 | 7,978 | ||||||
Other assets | 1,800 | 1,800 | ||||||
Total assets | $ | 69,154 | $ | 70,874 | ||||
Current liabilities | ||||||||
Current portion of note payable | $ | 1,000 | $ | 1,000 | ||||
Accounts payable | 6,859 | 6,614 | ||||||
Accrued expenses | 3,166 | 3,724 | ||||||
Accrued income taxes | – | 725 | ||||||
Total current liabilities | 11,025 | 12,063 | ||||||
Line of credit | 2,777 | 2,777 | ||||||
Note payable | 2,973 | 3,470 | ||||||
Operating lease liabilities | 86 | 85 | ||||||
Deferred income taxes, net | 3,201 | 3,201 | ||||||
Other long-term liabilities | – | 147 | ||||||
Total liabilities | 20,062 | 21,743 | ||||||
Commitments and contingencies | – | – | ||||||
Stockholders' equity | ||||||||
Preferred stock, no par value; 2,500 shares authorized; no shares issued or outstanding at June 30, 2022 and December 31, 2021 | – | – | ||||||
Common stock, no par value; 40,000 shares authorized; 17,274 shares issued; 15,473 and 15,435 outstanding at June 30, 2022 and December 31, 2021, respectively | 6,509 | 6,509 | ||||||
Paid-in capital | 3,008 | 2,552 | ||||||
Treasury stock, at cost | (13,156) | (13,436) | ||||||
Retained earnings | 52,731 | 53,506 | ||||||
Total stockholders' equity | 49,092 | 49,131 | ||||||
Total liabilities and stockholders' equity | $ | 69,154 | $ | 70,874 | ||||
See accompanying notes to consolidated financial statements | ||||||||
LIFEWAY FOODS, INC. AND SUBSIDIARIES
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Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Net sales | $ | 33,491 | $ | 29,162 | $ | 67,590 | $ | 58,538 | ||||||||
Cost of goods sold | 27,207 | 20,846 | 55,070 | 41,358 | ||||||||||||
Depreciation expense | 587 | 639 | 1,243 | 1,454 | ||||||||||||
Total cost of goods sold | 27,794 | 21,485 | 56,313 | 42,812 | ||||||||||||
Gross profit | 5,697 | 7,677 | 11,277 | 15,726 | ||||||||||||
Selling expenses | 2,482 | 2,566 | 5,684 | 5,788 | ||||||||||||
General and administrative | 2,839 | 2,617 | 6,131 | 5,508 | ||||||||||||
Amortization expense | 135 | – | 270 | – | ||||||||||||
Total operating expenses | 5,456 | 5,183 | 12,085 | 11,296 | ||||||||||||
Income from operations | 241 | 2,494 | (808) | 4,430 | ||||||||||||
Other income (expense): | ||||||||||||||||
Interest expense | (52) | (20) | (94) | (42) | ||||||||||||
Gain on investments | – | – | – | 2 | ||||||||||||
Loss on sale of property and equipment | – | (76) | – | (83) | ||||||||||||
Other (expense) income, net | (4) | (49) | (5) | (59) | ||||||||||||
Total other income (expense) | (56) | (145) | (99) | (182) | ||||||||||||
Income before provision for income taxes | 185 | 2,349 | (907) | 4,248 | ||||||||||||
Provision for income taxes | 65 | 731 | (132) | 1,324 | ||||||||||||
Net income | $ | 120 | $ | 1,618 | $ | (775) | $ | 2,924 | ||||||||
Earnings (loss) per common share: | ||||||||||||||||
Basic | $ | 0.01 | $ | 0.10 | $ | (0.05) | $ | 0.19 | ||||||||
Diluted | $ | 0.01 | $ | 0.10 | $ | (0.05) | $ | 0.19 | ||||||||
Weighted average common shares: | ||||||||||||||||
Basic | 15,466 | 15,639 | 15,450 | 15,622 | ||||||||||||
Diluted | 15,875 | 15,793 | 15,772 | 15,772 | ||||||||||||
LIFEWAY FOODS, INC. AND SUBSIDIARIES
| ||||||||
Six months ended June 30, | ||||||||
2022 | 2021 | |||||||
Cash flows from operating activities: | ||||||||
Net (loss) income | $ | (775) | $ | 2,924 | ||||
Adjustments to reconcile net (loss) income to operating cash flow: | ||||||||
Depreciation and amortization | 1,513 | 1,454 | ||||||
Non-cash interest expense | 3 | 9 | ||||||
Non-cash rent expense | – | 51 | ||||||
Bad debt expense | – | (1) | ||||||
Deferred revenue | (15) | (15) | ||||||
Stock-based compensation | 547 | 301 | ||||||
Loss on sale of property and equipment | – | 83 | ||||||
(Increase) decrease in operating assets: | ||||||||
Accounts receivable | (424) | (1,154) | ||||||
Inventories | (151) | (361) | ||||||
Refundable income taxes | (440) | (323) | ||||||
Prepaid expenses and other current assets | 154 | 255 | ||||||
Increase (decrease) in operating liabilities: | ||||||||
Accounts payable | 246 | (305) | ||||||
Accrued expenses | (462) | 1,276 | ||||||
Accrued income taxes | (725) | (547) | ||||||
Net cash (used in) provided by operating activities | (529) | 3,647 | ||||||
Cash flows from investing activities: | ||||||||
Purchases of property and equipment | (1,710) | (1,161) | ||||||
Net cash used in investing activities | (1,710) | (1,161) | ||||||
Cash flows from financing activities: | ||||||||
Repayment of note payable | (500) | – | ||||||
Net cash used in financing activities | (500) | – | ||||||
Net (decrease) increase in cash and cash equivalents | (2,739) | 2,486 | ||||||
Cash and cash equivalents at the beginning of the period | 9,233 | 7,926 | ||||||
Cash and cash equivalents at the end of the period | $ | 6,494 | $ | 10,412 | ||||
Supplemental cash flow information: | ||||||||
Cash paid for income taxes, net | $ | 640 | $ | 2,194 | ||||
Cash paid for interest | $ | 88 | $ | 33 | ||||
Non-cash investing activities | ||||||||
Increase (decrease) in right-of-use assets and operating lease obligations | $ | 36 | $ | 27 | ||||
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SOURCE Lifeway Foods, Inc.
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