Lifeway Foods® Announces Record Results for the First Quarter Ended March 31, 2024
Lifeway Foods (Nasdaq: LWAY) reported record financial results for Q1 2024, ending March 31. Net sales reached $44.6 million, up 17.8% year-over-year, driven by volume growth in Lifeway Kefir. This marks the 18th consecutive quarter of year-over-year growth and the 4th consecutive quarter of record net sales. Gross profit margin expanded by 410 basis points to 25.8%, attributed to higher volumes and lower transportation costs. Net income increased to $2.4 million or $0.17 per basic share, compared to $0.8 million or $0.06 per share in Q1 2023. Selling, general, and administrative expenses remained steady at 17.6% of net sales for both periods.
CEO Julie Smolyansky highlighted strong operational execution and strategic investments in sales and marketing as key drivers behind the company's performance. Lifeway is exploring additional brand marketing and distribution opportunities to sustain growth throughout 2024.
- Net sales increased by 17.8% year-over-year to $44.6 million.
- 18th consecutive quarter of year-over-year growth.
- 4th consecutive quarter reporting record net sales.
- Gross profit margin expanded by 410 basis points to 25.8%.
- Net income increased to $2.4 million, up from $0.8 million year-over-year.
- Selling, general, and administrative expenses stable at 17.6% of net sales.
- No significant negative aspects were reported in the PR.
Insights
The first quarter results for Lifeway Foods show significant improvement in both sales and profitability, which is notable for retail investors. The net sales increased by
Net income saw a noteworthy rise to
Investors should consider the company's continuous growth pattern, marked by the 18th consecutive quarter of year-over-year growth, which showcases its resilience and market position. The consistent improvement in profitability metrics is another positive sign. Nevertheless, it’s important to keep an eye on future quarters to ensure these trends persist and are not just short-term gains.
The performance of Lifeway Foods indicates a strong market traction for its kefir and probiotic products. The 18th consecutive quarter of year-over-year growth underlines the growing consumer interest in health and wellness products. This trend aligns with broader market dynamics, where consumers are increasingly seeking foods that support gut health and overall well-being.
The company's strategic investments in sales and marketing have evidently paid off, as seen in the record net sales and expanded customer base. The brand's ability to attract and retain consumers with value-driven, premium products is a critical factor in its sustained growth.
Moreover, the gross margin expansion suggests that the company has succeeded in optimizing its supply chain and benefiting from favorable transportation costs. As Lifeway continues to explore additional brand marketing and distribution opportunities, it is strategically positioned to capitalize on the growing market for functional foods.
For investors, the evolving market dynamics and Lifeway's positioning within it present a promising opportunity. However, it will be important to monitor how effectively the company can sustain this growth amidst potential market saturation and competitive pressures.
Net sales of
18th consecutive quarter of year-over-year growth
Delivers 410 basis points of gross profit margin expansion
"Following our tremendous results in 2023, I am thrilled to report yet another record-breaking quarter on the topline to kick off 2024," commented Julie Smolyansky, President and Chief Executive Officer of Lifeway Foods. "Driven by volume growth in our flagship Lifeway drinkable kefir, we delivered our highest ever quarterly net sales of
First Quarter 2024 Results
Net sales were
Gross profit as a percentage of net sales increased to
Selling, general and administrative expenses as a percentage of net sales were
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 a variety of cheeses and a ProBugs line for kids. Lifeway's tart and tangy fermented dairy products are now sold across
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, 2023, 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, 2024 and 2023 (In thousands) | ||||||||
March 31, 2024 | December 31, | |||||||
(Unaudited) | 2023 | |||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 12,025 | $ | 13,198 | ||||
Accounts receivable, net of allowance for credit losses and discounts & allowances of | 15,064 | 13,875 | ||||||
Inventories, net | 8,130 | 9,104 | ||||||
Prepaid expenses and other current assets | 1,988 | 2,019 | ||||||
Refundable income taxes | 378 | – | ||||||
Total current assets | 37,585 | 38,196 | ||||||
Property, plant and equipment, net | 24,627 | 22,764 | ||||||
Operating lease right-of-use asset | 172 | 192 | ||||||
Goodwill | 11,704 | 11,704 | ||||||
Intangible assets, net | 6,763 | 6,898 | ||||||
Other assets | 1,900 | 1,900 | ||||||
Total assets | $ | 82,751 | $ | 81,654 | ||||
Current liabilities | ||||||||
Current portion of note payable | $ | 1,250 | $ | 1,250 | ||||
Accounts payable | 10,024 | 9,976 | ||||||
Accrued expenses | 3,604 | 4,916 | ||||||
Accrued income taxes | – | 474 | ||||||
Total current liabilities | 14,878 | 16,616 | ||||||
Note payable | 1,235 | 1,483 | ||||||
Operating lease liabilities | 102 | 118 | ||||||
Deferred income taxes, net | 3,001 | 3,001 | ||||||
Total liabilities | 19,216 | 21,218 | ||||||
Commitments and contingencies (Note 9) | ||||||||
Stockholders' equity | ||||||||
Preferred stock, no par value; 2,500 shares authorized; no shares issued or outstanding at March 31, 2024 and December 31, 2023 | – | – | ||||||
Common stock, no par value; 40,000 shares authorized; 17,274 shares issued; 14,691 outstanding at March 31, 2024 and December 31, 2023 | 6,509 | 6,509 | ||||||
Paid-in capital | 5,498 | 4,825 | ||||||
Treasury stock, at cost | (16,695) | (16,695) | ||||||
Retained earnings | 68,223 | 65,797 | ||||||
Total stockholders' equity | 63,535 | 60,436 | ||||||
Total liabilities and stockholders' equity | $ | 82,751 | $ | 81,654 | ||||
LIFEWAY FOODS, INC. AND SUBSIDIARIES Consolidated Statements of Operations For the three months ended March 31, 2024 and 2023 (In thousands, except per share data) | ||||||||
2024 | 2023 | |||||||
Net Sales | $ | 44,634 | $ | 37,904 | ||||
Cost of goods sold | 32,438 | 29,030 | ||||||
Depreciation expense | 661 | 648 | ||||||
Total cost of goods sold | 33,099 | 29,678 | ||||||
Gross profit | 11,535 | 8,226 | ||||||
Selling expense | 3,700 | 3,519 | ||||||
General and administrative expense | 4,136 | 3,135 | ||||||
Amortization expense | 135 | 135 | ||||||
Total operating expenses | 7,971 | 6,789 | ||||||
Income from operations | 3,564 | 1,437 | ||||||
Other income (expense): | ||||||||
Interest expense | (51) | (104) | ||||||
Other income (expense), net | (5) | 5 | ||||||
Total other income (expense) | (56) | (99) | ||||||
Income before provision for income taxes | 3,508 | 1,338 | ||||||
Provision for income taxes | 1,082 | 508 | ||||||
Net income | $ | 2,426 | $ | 830 | ||||
Net earnings per common share: | ||||||||
Basic | $ | 0.17 | $ | 0.06 | ||||
Diluted | $ | 0.16 | $ | 0.06 | ||||
Weighted average common shares outstanding: | ||||||||
Basic | 14,691 | 14,645 | ||||||
Diluted | 15,222 | 15,030 | ||||||
LIFEWAY FOODS, INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows (Unaudited) (In thousands) | ||||||||
Three months ended March 31, | ||||||||
2024 | 2023 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 2,426 | $ | 830 | ||||
Adjustments to reconcile net income to operating cash flow: | ||||||||
Depreciation and amortization | 796 | 783 | ||||||
Stock-based compensation | 673 | 343 | ||||||
Non-cash interest expense | 2 | 2 | ||||||
(Increase) decrease in operating assets: | ||||||||
Accounts receivable | (1,189) | (572) | ||||||
Inventories | 974 | 339 | ||||||
Refundable income taxes | (378) | 44 | ||||||
Prepaid expenses and other current assets | 31 | 377 | ||||||
Increase (decrease) in operating liabilities: | ||||||||
Accounts payable | (6) | 1,046 | ||||||
Accrued expenses | (1,309) | (581) | ||||||
Accrued income taxes | (474) | 416 | ||||||
Net cash provided by operating activities | 1,546 | 3,027 | ||||||
Cash flows from investing activities: | ||||||||
Purchases of property and equipment | (2,469) | (1,762) | ||||||
Net cash used in investing activities | (2,469) | (1,762) | ||||||
Cash flows from financing activities: | ||||||||
Repayment of note payable | (250) | (500) | ||||||
Net cash used in financing activities | (250) | (500) | ||||||
Net (decrease) increase in cash and cash equivalents | (1,173) | 765 | ||||||
Cash and cash equivalents at the beginning of the period | 13,198 | 4,444 | ||||||
Cash and cash equivalents at the end of the period | $ | 12,025 | $ | 5,209 | ||||
Supplemental cash flow information: | ||||||||
Cash paid for income taxes, net of (refunds) | $ | 1,934 | $ | 47 | ||||
Cash paid for interest | $ | 50 | $ | 130 | ||||
Non-cash investing activities | ||||||||
Accrued purchase of property and equipment | $ | 192 | $ | 122 | ||||
Right-of-use assets obtained in exchange for lease obligations | $ | – | $ | 19 | ||||
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SOURCE Lifeway Foods, Inc.
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