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

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

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

PR Newswire

MORTON GROVE, Ill., May 14, 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, 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.

(PRNewsfoto/Lifeway Foods, Inc.)

"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.govhttp://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.

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