Record annual net sales of $160.1 million; up 13.1% year-over-year
17th consecutive quarter of
year-over-year growth
Delivers 760 basis points of annual gross profit
margin expansion
MORTON
GROVE, Ill., March 20,
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 fourth quarter and full
year ended December 31, 2023.
"I am pleased to report another outstanding year for Lifeway
Foods, highlighted by our record-breaking annual net sales, and
driven by volume growth in our flagship Lifeway drinkable kefir,"
commented Julie Smolyansky,
President and Chief Executive Officer of Lifeway Foods. "Our
exceptional results in 2023 culminated with our highest ever
quarterly net sales of $42.1 million
in the fourth quarter, our 17th consecutive quarter of
year-over-year growth. Our volume growth throughout the year is a
testament to the steadfast loyalty of our expanding customer base.
It is also a product of the effectiveness of our strategic sales
and marketing investments at driving velocities in our core
products and capturing additional consumers seeking premium,
healthy offerings. Our profitability improvements for the year were
significant across all of our key metrics, including gross profit
margin and net income, guided by our strong operational execution
and aided by favorable milk pricing. We are well positioned to
build on this momentum in 2024, and plan to continue reinvesting in
our core products to drive brand exposure and further growth. I
would like to thank the entire Lifeway team, including our
customers and retail partners, for helping us deliver these
excellent results for 2023."
Full Year 2023 Results
Net sales were $160.1 million for
the year ended December 31, 2023, an
increase of $18.6 million or 13.1%
versus prior year. The net sales increase was primarily driven by
higher volumes of our branded drinkable kefir, and to a lesser
extent the impact of price increases implemented during the fourth
quarter of 2022.
Gross profit as a percentage of net sales increased to 26.5% for
the year ended December 31, 2023 from
18.9% during the same period in 2022. The 760-basis point increase
versus the prior year was primarily due to the higher volumes of
Lifeway branded products and the favorable impact of milk pricing,
and to a lesser extent the price increases implemented during the
fourth quarter of 2022 and decreased transportation costs.
Selling, general and administrative expenses as a percentage of
net sales were 15.6% for the year ended December 31, 2023, compared to 16.9% in the prior
year.
The Company reported net income of $11.4
million or $0.77 per basic and
$0.75 per diluted common share for
the year ended December 31, 2023
compared to net income of $0.9
million or $0.06 per basic and
diluted common share during the same period in 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 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 December 31, 2023 and 2022 (In
thousands)
|
|
|
|
December
31,
|
|
|
|
2023
|
|
|
2022
|
|
Current
assets
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
13,198
|
|
|
$
|
4,444
|
|
Accounts receivable,
net of allowance for credit losses and discounts & allowances
of
$1,270 and $1,820 at December 31, 2023 and 2022,
respectively
|
|
|
13,875
|
|
|
|
11,414
|
|
Inventories,
net
|
|
|
9,104
|
|
|
|
9,631
|
|
Prepaid expenses and
other current assets
|
|
|
2,019
|
|
|
|
1,445
|
|
Refundable income
taxes
|
|
|
–
|
|
|
|
44
|
|
Total current
assets
|
|
|
38,196
|
|
|
|
26,978
|
|
|
|
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
|
|
22,764
|
|
|
|
20,905
|
|
Operating lease
right-of use asset
|
|
|
192
|
|
|
|
174
|
|
Goodwill
|
|
|
11,704
|
|
|
|
11,704
|
|
Intangible assets,
net
|
|
|
6,898
|
|
|
|
7,438
|
|
Other
assets
|
|
|
1,900
|
|
|
|
1,800
|
|
Total
assets
|
|
$
|
81,654
|
|
|
$
|
68,999
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
Current portion of note
payable
|
|
$
|
1,250
|
|
|
$
|
1,250
|
|
Accounts
payable
|
|
|
9,976
|
|
|
|
7,979
|
|
Accrued
expenses
|
|
|
4,916
|
|
|
|
3,813
|
|
Accrued income
taxes
|
|
|
474
|
|
|
|
–
|
|
Total current
liabilities
|
|
|
16,616
|
|
|
|
13,042
|
|
|
|
|
|
|
|
|
|
|
Line of
credit
|
|
|
–
|
|
|
|
2,777
|
|
Note
payable
|
|
|
1,483
|
|
|
|
2,477
|
|
Operating lease
liabilities
|
|
|
118
|
|
|
|
104
|
|
Deferred income
taxes, net
|
|
|
3,001
|
|
|
|
3,029
|
|
Total
liabilities
|
|
|
21,218
|
|
|
|
21,429
|
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies (Note 9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
|
|
|
|
|
Preferred stock, no par
value; 2,500 shares authorized; none issued
|
|
|
–
|
|
|
|
–
|
|
Common stock, no par
value; 40,000 shares authorized; 17,274 shares issued; 14,691
and 14,645 shares outstanding at 2023 and
2022
|
|
|
6,509
|
|
|
|
6,509
|
|
Paid-in
capital
|
|
|
4,825
|
|
|
|
3,624
|
|
Treasury stock, at
cost
|
|
|
(16,695)
|
|
|
|
(16,993)
|
|
Retained
earnings
|
|
|
65,797
|
|
|
|
54,430
|
|
Total stockholders'
equity
|
|
|
60,436
|
|
|
|
47,570
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
and stockholders' equity
|
|
$
|
81,654
|
|
|
$
|
68,999
|
|
LIFEWAY FOODS,
INC. AND SUBSIDIARIES Consolidated Statements of
Operations For the three months and twelve months ended
December 31, 2023 and 2022 (In thousands, except per
share data)
|
|
|
|
Three Months
Ended
December
31,
|
|
|
Twelve months
Ended
December
31,
|
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales
|
|
$
|
42,093
|
|
|
$
|
35,838
|
|
|
$
|
160,123
|
|
|
$
|
141,568
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
|
|
29,632
|
|
|
|
27,318
|
|
|
|
115,060
|
|
|
|
112,350
|
|
Depreciation
expense
|
|
|
669
|
|
|
|
599
|
|
|
|
2,622
|
|
|
|
2,432
|
|
Total cost of goods
sold
|
|
|
30,301
|
|
|
|
27,917
|
|
|
|
117,682
|
|
|
|
114,782
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
11,792
|
|
|
|
7,921
|
|
|
|
42,441
|
|
|
|
26,786
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling
expenses
|
|
|
2,802
|
|
|
|
2,777
|
|
|
|
11,776
|
|
|
|
11,304
|
|
General and
administrative
|
|
|
3,102
|
|
|
|
3,047
|
|
|
|
13,130
|
|
|
|
12,593
|
|
Amortization
expense
|
|
|
135
|
|
|
|
135
|
|
|
|
540
|
|
|
|
540
|
|
Total operating
expenses
|
|
|
6,039
|
|
|
|
5,959
|
|
|
|
25,446
|
|
|
|
24,437
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
operations
|
|
|
5,753
|
|
|
|
1,962
|
|
|
|
16,995
|
|
|
|
2,349
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
(62)
|
|
|
|
(96)
|
|
|
|
(384)
|
|
|
|
(267)
|
|
Gain (loss) on sale of
property and equipment
|
|
|
1
|
|
|
|
(241)
|
|
|
|
34
|
|
|
|
(241)
|
|
Other income
(expense)
|
|
|
5
|
|
|
|
10
|
|
|
|
4
|
|
|
|
–
|
|
Total other income
(expense)
|
|
|
(56)
|
|
|
|
(327)
|
|
|
|
(346)
|
|
|
|
(508)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before
provision for income taxes
|
|
|
5,697
|
|
|
|
1,635
|
|
|
|
16,649
|
|
|
|
1,841
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
|
|
1,728
|
|
|
|
919
|
|
|
|
5,282
|
|
|
|
917
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
$
|
3,969
|
|
|
$
|
716
|
|
|
$
|
11,367
|
|
|
$
|
924
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per
common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.27
|
|
|
$
|
0.05
|
|
|
$
|
0.77
|
|
|
$
|
0.06
|
|
Diluted
|
|
$
|
0.26
|
|
|
$
|
0.05
|
|
|
$
|
0.75
|
|
|
$
|
0.06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
14,691
|
|
|
|
15,199
|
|
|
|
14,667
|
|
|
|
15,396
|
|
Diluted
|
|
|
15,174
|
|
|
|
15,557
|
|
|
|
15,103
|
|
|
|
15,718
|
|
LIFEWAY FOODS,
INC. AND SUBSIDIARIES Consolidated Statements of Cash
Flows For the Years Ended December 31, 2023 and
2022 (In thousands)
|
|
|
|
2023
|
|
|
2022
|
|
|
|
|
|
|
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
Net
income
|
|
$
|
11,367
|
|
|
$
|
924
|
|
Adjustments to
reconcile net income to operating cash flow:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
3,162
|
|
|
|
2,972
|
|
Non-cash interest
expense
|
|
|
6
|
|
|
|
6
|
|
Bad debt
expense
|
|
|
2
|
|
|
|
–
|
|
Deferred
revenue
|
|
|
–
|
|
|
|
(28)
|
|
Stock-based
compensation
|
|
|
1,497
|
|
|
|
1,109
|
|
Deferred income
taxes
|
|
|
(28)
|
|
|
|
(172)
|
|
(Gain) loss on sale of
property and equipment
|
|
|
(34)
|
|
|
|
241
|
|
(Increase)
decrease in operating assets:
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
(2,463)
|
|
|
|
(1,483)
|
|
Inventories
|
|
|
527
|
|
|
|
(1,345)
|
|
Prepaid expenses and
other current assets
|
|
|
(574)
|
|
|
|
(191)
|
|
Refundable income
taxes
|
|
|
44
|
|
|
|
300
|
|
Increase
(decrease) in operating liabilities:
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
|
1,859
|
|
|
|
1,945
|
|
Accrued
expenses
|
|
|
1,102
|
|
|
|
434
|
|
Accrued income
taxes
|
|
|
474
|
|
|
|
(725)
|
|
Net cash provided by
operating activities
|
|
|
16,941
|
|
|
|
3,987
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
Purchases of property
and equipment
|
|
|
(4,351)
|
|
|
|
(3,449)
|
|
Proceeds from sale of
equipment
|
|
|
41
|
|
|
|
–
|
|
Acquisition, net of
cash acquired
|
|
|
–
|
|
|
|
(580)
|
|
Purchase of
investments
|
|
|
(100)
|
|
|
|
–
|
|
Net cash used in
investing activities
|
|
|
(4,410)
|
|
|
|
(4,029)
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
Repayment of line of
credit
|
|
|
(2,777)
|
|
|
|
–
|
|
Repayment of note
payable
|
|
|
(1,000)
|
|
|
|
(750)
|
|
Purchase of treasury
stock
|
|
|
–
|
|
|
|
(3,997)
|
|
Net cash used in
financing activities
|
|
|
(3,777)
|
|
|
|
(4,747)
|
|
|
|
|
|
|
|
|
|
|
Net increase
(decrease) in cash and cash equivalents
|
|
|
8,754
|
|
|
|
(4,789)
|
|
Cash and cash
equivalents at the beginning of the period
|
|
|
4,444
|
|
|
|
9,233
|
|
Cash and cash
equivalents at the end of the period
|
|
$
|
13,198
|
|
|
$
|
4,444
|
|
|
|
|
|
|
|
|
|
|
Supplemental cash
flow information:
|
|
|
|
|
|
|
|
|
Cash paid for income
taxes, net of (refunds)
|
|
$
|
4,792
|
|
|
$
|
1,121
|
|
Cash paid for
interest
|
|
$
|
415
|
|
|
$
|
247
|
|
Non-cash investing
activities
|
|
|
|
|
|
|
|
|
Accrued
purchase of property and equipment
|
|
$
|
137
|
|
|
$
|
424
|
|
Right-of-use assets
obtained in exchange for lease obligations
|
|
$
|
94
|
|
|
$
|
83
|
|
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multimedia:https://www.prnewswire.com/news-releases/lifeway-foods-announces-record-breaking-fourth-quarter-and-monumental-full-year-2023-results-302094005.html
SOURCE Lifeway Foods, Inc.