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Lifeway Foods Inc

Lifeway Foods® Announces Record Results for the Second Quarter Ended June 30, 2024

Demand for Bioavailable Foods like Kefir Soars

Net sales of $49.2 million; up 25.3% year-over-year driven by volume growth of Lifeway Kefir

19th consecutive quarter of year-over-year growth

MORTON GROVE, Ill. , Aug. 13, 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 second quarter ended June 30, 2024.

"Our incredible momentum continued in the second quarter as we delivered our 19th consecutive quarter of net sales growth and our 5th consecutive quarter breaking the Lifeway record on the topline," commented Julie Smolyansky, President and Chief Executive Officer of Lifeway Foods. "Our record net sales of $49.2 million were up more than 25% year-over-year, driven by continued volume growth in our flagship Lifeway drinkable kefir. Demand for bioavailable foods like Lifeway Kefir and Farmer Cheese is soaring and our customers further demonstrated their loyalty to our premium, healthy offerings. Notably, we delivered nearly $50 million in net sales, a remarkable milestone that we look forward to surpassing, and we also outperformed our previous quarterly sales record by more than 10%. Our amazing results on the topline demonstrate the effectiveness of our sales and marketing investments at driving trial, capturing new customers and accelerating velocities of our core products. Accompanying the very strong, volume-led topline growth, we continued to enhance our profitability profile with solid gross margins and strong net income growth, a testament to the seamless operational execution of our whole Lifeway team. We are thrilled with our results in the first half of 2024, and will continue to strategically invest behind the Lifeway brand to drive velocities, win new customers and position ourself to deliver more outstanding performances through the second half of this year and beyond."

Second Quarter 2024 Results

Net sales were $49.2 million for the second quarter ended June 30, 2024, an increase of $10.0 million or 25.3% 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 was 27.0% for the second quarter ended June 30, 2024.

Selling, general and administrative expenses as a percentage of net sales were 15.8% for the second quarter ended June 30, 2024.

The Company reported net income of $3.8 million or $0.26 per basic and $0.25 per diluted common share for the second quarter ended June 30, 2024 compared to net income of $3.2 million or $0.22 per basic and $0.21 per 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.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

June 30, 2024 and December 31, 2023

(In thousands)




June 30, 2024



December 31,




(Unaudited)



2023


Current assets









Cash and cash equivalents


$

14,633



$

13,198


Accounts receivable, net of allowance for credit losses and discounts & allowances of
     $1,550 and $1,270 at June 30, 2024 and December 31, 2023 respectively



14,526




13,875


Inventories, net



8,454




9,104


Prepaid expenses and other current assets



1,488




2,019


Refundable income taxes



180




–


Total current assets



39,281




38,196











Property, plant and equipment, net



25,276




22,764


Operating lease right-of-use asset



154




192


Goodwill



11,704




11,704


Intangible assets, net



6,628




6,898


Other assets



1,900




1,900


Total assets


$

84,943



$

81,654











Current liabilities









Current portion of note payable


$

–



$

1,250


Accounts payable



9,370




9,976


Accrued expenses



4,487




4,916


Accrued income taxes



–




474


Total current liabilities



13,857




16,616


Note payable



–




1,483


Operating lease liabilities



88




118


Deferred income taxes, net



3,001




3,001


Total liabilities



16,946




21,218











Commitments and contingencies (Note 9)


















Stockholders' equity









Preferred stock, no par value; 2,500 shares authorized; no shares issued or outstanding
     at June 30, 2024 and December 31, 2023



–




–


Common stock, no par value; 40,000 shares authorized; 17,274 shares issued; 14,791
     outstanding at June 30, 2024 and December 31, 2023



6,509




6,509


Paid-in capital



5,532




4,825


Treasury stock, at cost



(16,050)




(16,695)


Retained earnings



72,006




65,797


Total stockholders' equity



67,997




60,436











Total liabilities and stockholders' equity


$

84,943



$

81,654


 

LIFEWAY FOODS, INC. AND SUBSIDIARIES

Consolidated Statements of Operations

For the three and six months ended June 30, 2024 and 2023

(Unaudited)

(In thousands, except per share data)




Three Months Ended

June 30,



Six Months Ended

June 30,




2024



2023



2024



2023















Net sales


$

49,157



$

39,230



$

93,791



$

77,134



















Cost of goods sold



35,181




27,299




67,619




56,329


Depreciation expense



701




651




1,362




1,299


Total cost of goods sold



35,882




27,950




68,981




57,628



















Gross profit



13,275




11,280




24,810




19,506



















Selling expense



3,577




2,571




7,277




6,090


General and administrative expense



4,177




3,808




8,313




6,943


Amortization expense



135




135




270




270


Total operating expenses



7,889




6,514




15,860




13,303



















Income from operations



5,386




4,766




8,950




6,203



















Other income (expense):

















Interest expense



(47)




(109)




(98)




(213)


Gain on sale of property and equipment



–




33




–




33


Other income (expense), net



20




(5)




15




–


Total other income (expense)



(27)




(81)




(83)




(180)



















Income before provision for income taxes



5,359




4,685




8,867




6,023



















Provision for income taxes



1,576




1,529




2,658




2,037



















Net income


$

3,783



$

3,156



$

6,209



$

3,986



















Net earnings per common share:

















Basic


$

0.26



$

0.22



$

0.42



$

0.27


Diluted


$

0.25



$

0.21



$

0.41



$

0.26



















Weighted average common shares outstanding:

















Basic



14,727




14,654




14,709




14,649


Diluted



15,197




15,084




15,176




15,058


 

LIFEWAY FOODS, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)




Six months ended June 30,




2024



2023


Cash flows from operating activities:









Net income


$

6,209



$

3,986


Adjustments to reconcile net income to operating cash flow:









Depreciation and amortization



1,632




1,569


Stock-based compensation



1,296




655


Non-cash interest expense



17




3


Bad debt expense



–




2


Gain on sale of equipment



–




(33)


(Increase) decrease in operating assets:









Accounts receivable



(651)




91


Inventories



650




(39)


Refundable income taxes



(180)




40


Prepaid expenses and other current assets



531




232


Increase (decrease) in operating liabilities:









Accounts payable



(574)




(2,526)


Accrued expenses



(366)




451


Accrued income taxes



(474)




1,024


Net cash provided by operating activities



8,090




5,455











Cash flows from investing activities:









Purchases of property and equipment



(3,905)




(1,990)


Proceeds from sales or equipment



–




40


Net cash used in investing activities



(3,905)




(1,950)











Cash flows from financing activities:









Repayment of note payable



(2,750)




(500)


Net cash used in financing activities



(2,750)




(500)











Net increase in cash and cash equivalents



1,435




3,005











Cash and cash equivalents at the beginning of the period



13,198




4,444











Cash and cash equivalents at the end of the period


$

14,633



$

7,449











Supplemental cash flow information:









Cash paid for income taxes, net of (refunds)


$

3,312



$

973


Cash paid for interest


$

89



$

238











Non-cash investing activities









Accrued purchase of property and equipment


$

106



$

110


 

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SOURCE Lifeway Foods, Inc.