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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, Ill., Nov. 14, 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 third quarter ended September 30, 2022.

(PRNewsfoto/Lifeway Foods, Inc.)
(PRNewsfoto/Lifeway Foods, Inc.)

"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.

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.

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

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



See accompanying notes to consolidated financial statements

 

 

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


 

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


 

Cision
Cision

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SOURCE Lifeway Foods, Inc.