Net sales of $44.6
million; up 17.8% year-over-year driven by volume growth of
Lifeway Kefir
18th consecutive quarter of
year-over-year growth
Delivers 410 basis points of gross profit margin
expansion
MORTON
GROVE, Ill., May 14, 2024
/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 first quarter ended March 31, 2024.
"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
$44.6 million in the first quarter,
up nearly 18% year-over-year, as our strategic sales and marketing
investments continue to accelerate our sales velocities, grow
awareness and win new consumers seeking better-for-you, premium
products at a great value. This marked our 18th
consecutive quarter of growth and 4th consecutive
quarter reporting record net sales, which demonstrates the loyalty
of our core customer base. Through our strong operational
execution, accompanied by favorable transportation cost tailwinds,
we also continued to improve on our key profitability metrics in
the quarter, highlighted by our gross margin expansion and net
income growth. We are pleased with this strong start to the year,
and are consistently evaluating additional brand marketing and
incremental distribution opportunities in an effort to build on
this high bar of success throughout 2024."
First Quarter 2024 Results
Net sales were $44.6 million for
the first quarter ended March 31,
2024, an increase of $6.7
million or 17.8% from the same period in 2023. The net sales
increase was primarily driven by higher volumes of our branded
drinkable kefir.
Gross profit as a percentage of net sales increased to 25.8% for
the first quarter ended March 31,
2024 from 21.7% during the same period in 2023. The
410-basis point increase versus the prior year was primarily due to
the higher volumes of Lifeway branded products, and to a lesser
extent a favorable impact of transportation costs.
Selling, general and administrative expenses as a percentage of
net sales were 17.6% for the first quarter ended March 31, 2024 and 2023, respectively.
The Company reported net income of $2.4
million or $0.17 per basic and
$0.16 per diluted common share for
the first quarter ended March 31,
2024 compared to net income of $0.8
million or $0.06 per basic and
diluted common share during the same period in 2023.
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 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, 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
$1,640 and
$1,270 at March 31, 2024 and December 31, 2023
respectively
|
|
|
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.