EX-99.1 6 lifeway_ex9901.htm PRESS RELEASE

EXHIBIT 99.1

 

 

 

Lifeway Foods® Announces Record Results for the First Quarter Ended March 31, 2024

 

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, IL — May 14, 2024 — 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.

 

 

 

 

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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

 

 

 

 

 

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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  

 

 

 

 

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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  

 

 

 

 

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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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