Lifeway Foods(LWAY) - 2025 Q2 - Quarterly Results

Business and Operational Highlights The company achieved record Q2 2025 performance, capitalizing on consumer wellness trends and reinforcing its kefir market leadership - Lifeway was named Processor of the Year by Dairy Foods magazine, the publication's highest annual honor, recognizing the Company's innovation and leadership[3] - The company is capitalizing on powerful consumer tailwinds, including the wellness boom and the surge in GLP-1 medication use, by offering nutrient-dense, protein-rich, probiotic foods[2] Q3 2025 Momentum and Outlook The company reports strong sales momentum entering Q3 and reiterates its long-term financial targets for 2027 - Unaudited net sales for Q3 to date reached $26.4 million, an increase of more than 20% year-over-year[1][5] - In July, Lifeway recorded the highest single week of gross sales in Company history, surpassing $5.5 million[5] - The Company reiterated its long-term target of $45–$50 million in Adjusted EBITDA for FY 2027 and expects record annual sales in 2025[7] Growth Trends and Innovation The company's innovative collagen-infused smoothies are capitalizing on the growing 'beauty from within' trend - Lifeway's Probiotic Smoothies with Collagen are resonating with consumers, tapping into the rapidly growing $8 billion global market for collagen[4] - The Berry Blast flavor of the collagen smoothie won a 2025 Good Housekeeping Snack Award, highlighting the product's success and consumer appeal[4] Financial Performance The company delivered record Q2 2025 net sales with expanded gross profit margin and net income growth Q2 2025 Key Financial Metrics | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $53.9M | $49.2M | +9.7% | | Gross Profit Margin | 28.6% | 27.0% | +160 bps | | Net Income | $4.2M | $3.8M | +10.5% | | Diluted EPS | $0.28 | $0.25 | +12.0% | Consolidated Statements of Operations Net sales grew 9.7% in Q2 2025, driving higher gross profit and net income despite increased operating expenses Three Months Ended June 30 (in thousands) | Account | 2025 | 2024 | | :--- | :--- | :--- | | Net sales | $53,901 | $49,157 | | Gross profit | $15,400 | $13,275 | | Income from operations | $5,795 | $5,386 | | Net income | $4,249 | $3,783 | | Diluted EPS | $0.28 | $0.25 | Six Months Ended June 30 (in thousands) | Account | 2025 | 2024 | | :--- | :--- | :--- | | Net sales | $99,992 | $93,791 | | Gross profit | $26,435 | $24,810 | | Income from operations | $7,369 | $8,950 | | Net income | $7,789 | $6,209 | Consolidated Balance Sheets Total assets and stockholders' equity increased, driven by a significant rise in cash and cash equivalents Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $21,220 | $16,728 | | Total current assets | $49,331 | $43,605 | | Total assets | $98,267 | $90,547 | | Total current liabilities | $16,289 | $15,504 | | Total liabilities | $19,571 | $18,636 | | Total stockholders' equity | $78,696 | $71,911 | Consolidated Statements of Cash Flows Net cash increased by $4.5 million, supported by strong proceeds from investing activities despite lower operating cash flow Six Months Ended June 30 (in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $3,762 | $8,090 | | Net cash provided by (used in) investing activities | $795 | $(3,905) | | Net cash used in financing activities | $(65) | $(2,750) | | Net increase in cash | $4,492 | $1,435 | Other Information This section details the non-GAAP financial measure Adjusted EBITDA and outlines forward-looking statement risks Non-GAAP Financial Measures The company utilizes the non-GAAP measure Adjusted EBITDA for its outlook and cannot reconcile it to GAAP net income - Adjusted EBITDA is a non-GAAP measure defined as Operating Income, as reported, plus Depreciation and Amortization, plus Stock-Based Compensation[7][11] - The Company cannot reconcile its target fiscal year 2027 Adjusted EBITDA to projected net income without unreasonable effort due to uncertainty[12] Forward-Looking Statements The report contains forward-looking statements subject to risks including competition, pricing, and an unsolicited acquisition proposal - The press release contains forward-looking statements that are subject to risks and uncertainties beyond the company's control[10] - Identified risks include price competition, commodity pricing, and uncertainty related to an unsolicited acquisition proposal from Danone[10]