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CST: 05/12/2019 21:30:43   

Lifeway Foods, Inc. Announces Second Quarter 2019 Results

108 Days ago

Reports Sequential Quarterly Profit Improvement

MORTON GROVE, Ill., Aug. 19, 2019 (GLOBE NEWSWIRE) -- Lifeway Foods, Inc. (Nasdaq: LWAY) (“Lifeway” or “the Company”), the 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, 2019.

“The improvement in sequential quarterly profit highlights the significant progress we’ve made to position Lifeway for long-term, sustainable growth,” said Julie Smolyansky, CEO of Lifeway Foods, Inc. “The items debuted this year at trade shows are now hitting shelves, and we’re encouraged by the exciting distribution growth of our newest offering, Plantiful, a line of vegan, plant-based probiotic beverages. Based on retailer shelf reset schedules for items already accepted, we are planning for marketing and advertising initiatives that align with the expanded distribution of our innovation portfolio. Our team is focused on long-term success by building increased brand awareness and consumer loyalty on our strong core product line, as well as the burgeoning prospects of our recent offerings.”

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 non-dairy Plantiful, cupped kefir and cheese, frozen kefir, specialty cheeses, probiotic supplements and a ProBugs line for kids. Lifeway's tart and tangy fermented dairy and non-dairy products are now sold across the United States, Mexico, Ireland and the United Kingdom. Learn how Lifeway is good for more than just you at www.lifewaykefir.com.

Forward-Looking Statements

All statements in 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 “believe,” “ahead,” “remain,” “build,” “generate,” “progress,” “innovate,” “continue.” 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, 2018, 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.

Contact:
Lifeway Foods, Inc.
Phone: 847-967-1010
Email: info@lifeway.net

 
LIFEWAY FOODS, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
June 30, 2019 and December 31, 2018
(In thousands)
 
  June 30,        
  2019     December 31,  
  (Unaudited)     2018  
Current assets              
Cash and cash equivalents $ 3,022     $ 2,998  
Accounts receivable, net of allowance for doubtful accounts and discounts & allowances of $1,220 at June 30, 2019 and December 31, 2018 respectively   7,570       6,276  
Inventories, net   6,843       5,817  
Prepaid expenses and other current assets   1,393       1,077  
Refundable income taxes   1,278       2,748  
Total current assets   20,106       18,916  
               
Property, plant and equipment, net   23,365       24,573  
Operating lease right-of-use asset   966        
               
Intangible assets              
Goodwill & indefinite-lived intangibles   12,824       12,824  
Other intangible assets, net   231       344  
Total intangible assets   13,055       13,168  
               
Other assets   165       150  
Total assets $ 57,657     $ 56,807  
               
Current liabilities              
Accounts payable $ 5,459     $ 4,570  
Accrued expenses   4,141       2,777  
Accrued income taxes   63       106  
Total current liabilities   9,663       7,453  
Line of credit   4,677       5,995  
Operating lease liabilities   584        
Deferred income taxes, net   390       390  
Other long-term liabilities   100       564  
Total liabilities   15,414       14,402  
               
Stockholders' equity              
Preferred stock, no par value; 2,500 shares authorized; no shares issued or outstanding at June 30, 2019 and December 31, 2018, respectively          
Common stock, no par value; 40,000 shares authorized; 17,274 shares issued; 15,761 and 15,814 outstanding at June 30, 2019 and December 31, 2018, respectively   6,509       6,509  
Paid-in capital   2,230       2,303  
Treasury stock, at cost   (12,477 )     (12,970 )
Retained earnings   45,981       46,563  
Total stockholders' equity   42,243       42,405  
               
Total liabilities and stockholders' equity $ 57,657     $ 56,807  
 


LIFEWAY FOODS, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
For the six months ended June 30, 2019 and 2018
(Unaudited)
(In thousands, except per share data)
 
  Three Months Ended     Six Months Ended  
  June 30,     June 30,  
  2019     2018     2019     2018  
                       
Net sales $ 23,153     $ 27,096     $ 47,768     $ 55,838  
                               
Cost of goods sold   16,843       19,495       34,410       39,520  
Depreciation expense   747       725       1,492       1,405  
Total cost of goods sold   17,590       20,220       35,902       40,925  
                               
Gross profit   5,563       6,876       11,866       14,913  
                               
Selling expenses   2,691       3,383       5,830       7,401  
General and administrative   2,898       2,996       6,390       6,701  
Amortization expense   40       164       113       327  
Total operating expenses   5,629       6,543       12,333       14,429  
                               
(Loss) income from operations   (66 )     333       (467 )     484  
                               
Other income (expense):                              
Interest expense   (68 )     (75 )     (137 )     (138 )
Gain (loss) on sale of property and equipment   4       (1 )     29       14  
Other income, net   2       3       5       8  
Total other income (expense)   (62 )     (73 )     (103 )     (116 )
                               
(Loss) income before provision for income taxes   (128 )     260       (570 )     368  
                               
Provision for income taxes   13       90       (41 )     128  
                               
Net (loss) income $ (141 )   $ 170     $ (529 )   $ 240  
                               
Earnings (loss) per common share:                              
Basic $ (0.01 )   $ 0.01     $ (0.03 )   $ 0.02  
Diluted $ (0.01 )   $ 0.01     $ (0.03 )   $ 0.02  
                               
Weighted average common shares:                              
Basic   15,775       15,879       15,771       15,893  
Diluted   15,775       15,992       15,771       16,026  
                               


LIFEWAY FOODS, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
For the Six Months Ended June 30, 2019 and 2018
(Unaudited)
(In thousands)
 
  2019     2018  
Cash flows from operating activities:              
Net (loss) income $ (529 )   $ 240  
Adjustments to reconcile net (loss) income to operating cash flow:              
Depreciation and amortization   1,605       1,732  
Bad debt expense   3       20  
Reserve for inventory obsolescence   210       271  
Stock-based compensation   535       495  
Non-cash interest expense   12       3  
Deferred revenue   (48 )     (48 )
(Gain) on sale of property and equipment   (29 )     (14 )
(Increase) decrease in operating assets:              
Accounts receivable   (1,297 )     66  
Inventories   (1,235 )     243  
Refundable income taxes   1,470       (463 )
Prepaid expenses and other current assets   (308 )     (584 )
Increase (decrease) in operating liabilities:              
Accounts payable   888       423  
Accrued expenses   774       (153 )
Accrued income taxes   (43 )     (121 )
Net cash provided by operating activities   2,008       2,109  
               
Cash flows from investing activities:              
Purchases of property and equipment   (290 )     (2,024 )
Proceeds from sale of property and equipment   36       35  
Purchase of investments   (15 )      
Net cash used in investing activities   (269 )     (1,989 )
               
Cash flows from financing activities:              
Purchase of treasury stock   (385 )     (1,168 )
Borrowings under revolving credit facility         6,050  
Repayment of line of credit   (1,330 )      
Payment of deferred financing costs         (69 )
Repayment of notes payable         (6,279 )
Net cash used in financing activities   (1,715 )     (1,466 )
               
Net decrease in cash and cash equivalents   24       (1,346 )
               
Cash and cash equivalents at the beginning of the period   2,998       4,978  
               
Cash and cash equivalents at the end of the period $ 3,022     $ 3,632  
               
Supplemental cash flow information:              
Cash paid for income taxes, net of (refunds) $ (1,469 )   $ 712  
Cash paid for interest $ 149     $ 108  
               
Non-cash investing activities              
Right-of-use assets recognized at ASU 2016-02 transition $ 944     $  
Operating lease liability recognized at ASU 2016-02 transition $ 997     $  
Right-of-use assets and operating lease liabilities recognized after ASU 2016-02 transition $ 280     $  

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