EX-99.1 9 lifeway_ex9901.htm EARNINGS RELEASE

EXHIBIT 99.1

 

 

Lifeway Foods, Inc. Announces Record Results for the Third Quarter Ended September 30, 2022

 

Net sales increase 29.1% year-over-year to $38.1 million; up 46.5% compared to 2020

 

Delivers 12th straight quarter of year-over-year net sales growth

 

Morton Grove, IL — November 14, 2022— 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 29.1% for the third quarter of 2022, with a two-year stack increase of 46.5% compared to the third quarter of 2020,” said Julie Smolyansky, Lifeway’s President and Chief Executive Officer. “This quarter’s record-breaking topline numbers are a result of our focus on the core Lifeway Kefir business. The strategy we’ve put in place to build awareness for our flagship product has yielded our 12th consecutive quarter of year-over-year growth at Lifeway, and we are grateful to our customers who have made this milestone possible. As we look forward, our objectives are to increase our assortment and distribution at retail partners with whom we’ve had tremendous success, gain exposure through marketing campaigns and penetrate additional channels. We have recently gained traction within the convenience channel, and see this as an opportunity to build brand awareness and introduce new consumers to our single-serve products. We look forward to finishing the year strong and preparing for a healthy 2023.”

 

Third Quarter 2022 Results

 

Net sales were $38.1 million for the third quarter ended September 30, 2022, an increase of $8.6 million or 29.1% from the same period in 2021. The net sales increase was primarily driven by higher volumes of our branded drinkable kefir and the impact of price increases implemented during the first quarter of 2022, and to a lesser extent the favorable impact of our acquisition of GlenOaks Farms during the third quarter of 2021.

 

Gross profit as a percentage of net sales was 19.9% for the third quarter ended September 30, 2022.

 

Selling, general and administrative expenses increased $0.4 million to $6.3 million for the third quarter ended September 30, 2022, from $5.9 million during the same period in 2021.

 

The Company reported net income of $1.0 million or $0.06 per basic and diluted common share for the third quarter ended September 30, 2022.

 

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.

 

 

 

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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.

 

Contact:

 

Lifeway Foods, Inc.

Phone: 847-967-1010

Email: info@lifeway.net

 

 

 

 

 

 

 

 

 

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LIFEWAY FOODS, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

September 30, 2022 and December 31, 2021

(In thousands)

         
   September 30,
2022		   December 31, 
   Unaudited   2021 
Current assets          
Cash and cash equivalents  $8,933   $9,233 
Accounts receivable, net of allowance for doubtful accounts and discounts & allowances of $1,400 and $1,170 at September 30, 2022 and December 31, 2021 respectively   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 at September 30, 2022 and December 31, 2021   –    – 
Common stock, no par value; 40,000 shares authorized; 17,274 shares issued; 15,495 and 15,435 outstanding at September 30, 2022 and December 31, 2021, respectively   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 

 

 

 

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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 

 

 

 

 

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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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