Lifeway Foods (LWAY) 10-Q 14 Aug 17 2017 Q2 Quarterly report Financial data

Document And Entity Information

Document And Entity Information - shares	6 Months Ended
	Jun. 30, 2017	Aug. 03, 2017
Document And Entity Information
Entity Registrant Name	LIFEWAY FOODS INC
Entity Central Index Key	814,586
Document Type	10-Q
Document Period End Date	Jun. 30, 2017
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer	No
Is Entity a Voluntary Filer	No
Is Entity's Reporting Status Current	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		16,068,430
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2,017

Consolidated Balance Sheets (Un

Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Current assets
Cash and cash equivalents	$ 9,349	$ 8,812
Accounts receivable, net of allowance for doubtful accounts and discounts & allowances of $1,500 and $1,600 at June 30, 2017 and December 31, 2016 respectively	10,388	9,594
Inventories, net	8,097	8,042
Prepaid expenses and other current assets	1,285	785
Refundable income taxes	342	309
Total current assets	29,461	27,542
Property, plant and equipment, net	23,010	21,832
Intangible assets
Goodwill & indefinite-lived intangibles	14,068	14,068
Other intangible assets, net	1,311	1,647
Total intangible assets	15,379	15,715
Other Assets	125	125
Total assets	67,975	65,214
Current liabilities
Current maturities of notes payable	3,419	840
Accounts payable	6,285	5,718
Accrued expenses	3,813	2,169
Accrued income taxes	75	654
Total current liabilities	13,592	9,381
Notes payable	3,280	6,279
Deferred income taxes	1,192	1,192
Other long-term liabilities	351
Total liabilities	18,415	16,852
Stockholders' equity
Common stock, no par value; 40,000 shares authorized; 17,274 shares issued; 16,154 outstanding	6,509	6,509
Paid-in-capital	2,236	2,198
Treasury stock, at cost	(10,340)	(10,340)
Retained earnings	51,155	49,995
Total stockholders' equity	49,560	48,362
Total liabilities and stockholders' equity	$ 67,975	$ 65,214

Consolidated Balance Sheets (U3

Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Current assets
Allowance for doubtful accounts and discounts	$ 1,700	$ 1,600
Stockholders' equity
Common stock, par value	$ 0	$ 0
Common stock, shares authorized	40,000	40,000
Common stock, shares outstanding	17,274	16,154

Consolidated Statements of Inco

Consolidated Statements of Income and Comprehensive Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Income Statement [Abstract]
Net sales	$ 31,733	$ 31,131	$ 63,850	$ 63,701
Cost of goods sold	21,857	20,763	44,931	44,002
Depreciation expense	597	633	1,183	1,264
Total cost of goods sold	22,454	21,396	46,114	45,266
Gross profit	9,279	9,735	17,736	18,435
Selling expense	3,400	3,463	7,638	6,427
General and administrative	3,813	3,046	7,598	6,992
Amortization expense	168	177	336	353
Total operating expenses	7,381	6,686	15,572	13,772
Income from operations	1,898	3,049	2,164	4,663
Other income (expense):
Interest expense	(61)	(47)	(118)	(105)
Loss on sale of investments, net reclassified from OCI	0	(15)	0	(27)
Loss on sale of property and equipment	0	(151)	(5)	(151)
Other income, net	0	60	0	77
Total other income (expense)	(61)	(153)	(123)	(206)
Income before provision for income taxes	1,837	2,896	2,041	4,457
Provision for income taxes	801	789	881	1,395
Net income	$ 1,036	$ 2,107	$ 1,160	$ 3,062
Earnings per common share - Basic	$ 0.06	$ 0.13	$ 0.07	$ 0.19
Earnings per common share - Diluted	$ 0.06	$ 0.13	$ 0.07	$ 0.19
Weighted average number of shares outstanding - Basic	16,154	16,149	16,154	16,169
Weighted average number of shares outstanding - Diluted	16,203	16,149	16,211	16,169
COMPREHENSIVE INCOME
Net income	$ 1,036	$ 2,107	$ 1,160	$ 3,062
Other comprehensive income (loss), net of tax:
Unrealized gains on investments, net of taxes	0	12	0	56
Reclassifications to earnings:
Realized gains losses on investments, net of taxes	0	24	0	17
Comprehensive income	$ 1,036	$ 2,143	$ 1,160	$ 3,135

Consolidated Statements of Stoc

Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands	Common Stock	In treasury	Paid-In Capital	Retained Earnings	Accumulated Other Comprehensive Income (Loss) Net of Tax	Total
Beginning Balance, Shares at Dec. 31, 2015	17,274,000
Beginning Balance, Treasury stock shares at Dec. 31, 2015		(1,064,000)
Beginning Balance, Amount at Dec. 31, 2015	$ 6,509	$ (9,730)	$ 2,033	$ 46,516	$ (71)	$ 45,257
Other comprehensive income					73	73
Treasury stock purchased, Shares		(69,000)
Treasury stock purchased, Amount		$ (738)				(738)
Share-based compensation			42			42
Net income				3,062		3,062
Ending Balance, Shares at Jun. 30, 2016	17,274,000
Ending Balance, Treasury stock shares at Jun. 30, 2016		(1,133,000)
Ending Balance, Amount at Jun. 30, 2016	$ 6,509	$ (10,468)	2,075	49,578	2	47,696
Beginning Balance, Shares at Dec. 31, 2016	17,274,000
Beginning Balance, Treasury stock shares at Dec. 31, 2016		(1,120,000)
Beginning Balance, Amount at Dec. 31, 2016	$ 6,509	$ (10,340)	2,198	49,995	0	48,362
Share-based compensation			38			38
Net income				1,160		1,160
Ending Balance, Shares at Jun. 30, 2017	17,274,000
Ending Balance, Treasury stock shares at Jun. 30, 2017		(1,120,000)
Ending Balance, Amount at Jun. 30, 2017	$ 6,509	$ (10,340)	$ 2,236	$ 51,155	$ 0	$ 49,560

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Cash flows from operating activities:
Net income	$ 1,160	$ 3,062
Adjustments to reconcile net income to operating cash flow:
Depreciation and amortization	1,519	1,617
Loss on sale of investments, net	0	27
Reserve for inventory obsolescence	131	0
Stock-based compensation	775	42
Loss on sale of property and equipment	5	151
(Increase) decrease in operating assets:
Accounts receivable	(793)	(502)
Inventories	(185)	(1,649)
Refundable income taxes	(33)	(70)
Prepaid expenses and other current assets	(500)	(448)
Increase (decrease) in operating liabilities:
Accounts payable	564	(1,710)
Accrued expenses	1,259	765
Accrued income taxes	(579)	576
Net cash provided by operating activities	3,323	1,861
Cash flows from investing activities:
Purchases of investments	0	(479)
Proceeds from sale of investments	0	1,024
Redemption of certificates of deposit	0	513
Purchases of property and equipment	(2,400)	(1,382)
Proceeds from sale of property and equipment	34	39
Net cash used in investing activities	(2,366)	(285)
Cash flows from financing activities:
Purchase of treasury stock	0	(738)
Repayment of notes payable	(420)	(420)
Net cash used in financing activities	(420)	(1,158)
Net increase in cash and cash equivalents	537	418
Cash and cash equivalents at the beginning of the period	8,812	5,646
Cash and cash equivalents at the end of the period	9,349	6,064
Supplemental cash flow information:
Cash paid for income taxes, net of refunds	1,493	886
Cash paid for interest	$ 118	$ 105

1. Basis of presentation

1. Basis of presentation	6 Months Ended
	Jun. 30, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of presentation	Basis of presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”) for interim financial information, and do not include all of the information and disclosures required for complete, audited financial statements. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, considered necessary for a fair presentation, have been included. For further information, refer to the consolidated financial statements and disclosures included in Company’s Annual Report on Form 10-K as of and for the year ended December 31, 2016. Certain amounts in prior-year financial statements were reclassified to conform to the current-year presentation. The results for the period are not necessarily indicative of the results to be expected for other interim periods or the full year. Principles of consolidation Our consolidated financial statements include the accounts of Lifeway Foods, Inc. and all its wholly owned subsidiaries (collectively “Lifeway” or the “Company”). All significant intercompany accounts and transactions have been eliminated.

2. Significant Accounting Polic

2. Significant Accounting Policies	6 Months Ended
	Jun. 30, 2017
Accounting Policies [Abstract]
Significant Accounting Policies	Use of estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates made in preparing the consolidated financial statements include the reserve for promotional allowances, the valuation of goodwill and intangible assets, stock-based and incentive compensation, and deferred income taxes. Revenue Recognition The Company records sales when the following four criteria have been met: (i) The product has been shipped and the Company has no significant remaining obligations; (ii) Persuasive evidence of an agreement exists; (iii) The price to the buyer is fixed or determinable; and (iv) Collection is probable. In addition, shipping costs invoiced to the customers are included in net sales and the related costs are included in cost of sales. The Company routinely offers sales allowances and discounts to our customers and consumers. These programs include rebates, in-store display and demo allowances, allowances for non-salable product, coupons and other trade promotional activities. These allowances are considered reductions in the price of our products and thus are recorded as reductions to gross sales. Some of these incentives are recorded by estimating incentive costs based on our historical experience and expected levels of performance of the trade promotion. We maintain a reserve for the estimated allowances incurred but unpaid. Differences between estimated and actual allowances are normally insignificant and are recognized in income in the period such differences are determined. Product returns have historically not been material. Bulk cream is a by-product of the Company’s fluid milk manufacturing process. The Company does not use its by-product bulk cream in any of its end products, but rather disposes of it through sales to other companies. Bulk cream by-product sales are included in net sales. Advertising and promotional costs The Company expenses advertising costs as incurred. For the six months ended June 30, 2017 and 2016 total advertising expenses were $2,811 and $2,753 respectively. For the three months ended June 30, 2017 and 2016 total advertising expenses were $1,043 and $1,811 respectively. Recently Adopted Accounting Pronouncements In March 2016, the Financial Accounting Standards Board ("FASB") issued ASU No. 2016-09, Compensation-Stock Compensation – Improvements to Employee Share-Based Payment Accounting. The new guidance simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, statutory tax withholding requirements, classification of awards as either equity or liabilities, and classification in the statement of cash flows. Under this ASU, excess tax benefits and deficiencies are no longer recognized as additional paid-in capital in the consolidated balance sheets. This guidance was effective on January 1, 2017. The adoption of this amendment had no impact on the consolidated financial statements. In November 2015, the FASB issued ASU 2015-17, Income Taxes – Balance Sheet Classification of Deferred Taxes. This new guidance simplifies the presentation of deferred income taxes and requires that all deferred tax assets and liabilities, along with any related valuation allowance, be classified as noncurrent on the balance sheet. Previous guidance required deferred tax assets and liabilities to be separated into current and noncurrent amounts on the balance sheet. This guidance was effective on January 1, 2017. The Company elected to adopt this guidance as of the first fiscal quarter in 2017 and has applied the update on a retrospective basis. The Company changed its accounting principle to reduce the cost and complexity inherent in recording deferred taxes as current and noncurrent on the consolidated balance sheets. As a result, the Company has reclassified $662 of current deferred tax asset to noncurrent deferred tax liability in the consolidated balance sheet as of December 31, 2016. In July 2015, the FASB issued ASU 2015-11, Inventory – Simplifying the Measurement of Inventory. The core principal of the guidance is that an entity should measure inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. This guidance was effective on January 1, 2017. The adoption of this amendment had no impact on the consolidated financial statements. Recently Issued Accounting Pronouncements In May 2017, the FASB issued ASU No. 2017-09, Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting. The new guidance provides clarity and reduces both diversity in practice and cost of complexity when accounting for a change to the terms of or conditions of a share-based payment award. The amendments in this Update provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. The new guidance will be effective for fiscal years beginning on or after December 15, 2017 and interim periods within those years. Early adoption of the guidance is permitted. The adoption of this amendment is not expected to have a material impact on the consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other: Simplifying the Test for Goodwill Impairment. The new guidance simplifies the subsequent measurement of goodwill by removing the second step of the two-step impairment test. The amendment requires an entity to perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The new guidance will be effective for annual periods or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. The amendment should be applied on a prospective basis. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The adoption of this amendment is not expected to have a material impact on the consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments. The new guidance is intended to address the diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows, such as debt prepayment or debt extinguishment costs, contingent consideration payments made after an acquisition, proceeds from the settlement of insurance claims, and other topics. The new guidance will be effective for fiscal years beginning on or after December 15, 2017 and interim periods within those years. Early adoption of the guidance is permitted. Management is currently evaluating the impact that the new guidance will have on the consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases. The guidance requires lessees to recognize lease assets and lease liabilities in the balance sheet and disclose key information about leasing arrangements, such as information about variable lease payments and options to renew and terminate leases. The amended guidance will require both operating and finance leases to be recognized in the balance sheet. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. The new guidance is effective for financial statements issued for fiscal years beginning after December 15, 2018, and interim periods within those years. Early adoption is permitted. The amendments in this ASU should be adopted using a modified retrospective transition approach, which requires application of the new guidance at the beginning of the earliest comparative period presented in the year of adoption. We do not intend to early adopt the standard. Management is currently evaluating the impact that the new guidance will have on the consolidated financial statements. In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities. The new guidance modifies how entities measure equity investments and present changes in the fair value of financial liabilities. Under the new guidance, entities will have to measure equity investments that do not result in consolidation and are not accounted under the equity method at fair value and recognize any changes in fair value in net income unless certain conditions exist. The new guidance will be effective for fiscal years beginning on or after December 15, 2017 and interim periods within those years. Early adoption of the guidance is not permitted. The adoption of this amendment is not expected to have an impact on the consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASU 2014-09"), which supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, including most industry-specific requirements. ASU 2014-09 establishes a five-step revenue recognition process in which an entity will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The standard allows for either “full retrospective” adoption, meaning the standard is applied to all of the periods presented, or “modified retrospective” adoption, meaning the standard is applied only to the most current period presented in the financial statements. ASU 2014-09 also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenues and cash flows from contracts with customers. On August 12, 2015, the FASB approved a one year delay of the effective date to reporting periods beginning after December 15, 2017, while permitting companies to voluntarily adopt the new standard as of the original effective date. In December 2016, the FASB issued ASU No. 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers, which clarifies narrow aspects of ASC 606 or corrects unintended application of the guidance. The effective date and transition requirements for ASU 2016-20 are the same as the effective date and transition requirements for ASU 2014-09. Under the delayed effective date, the Company is required to adopt the new standard not later than January 1, 2018. Management is currently evaluating the impact the adoption of this amendment will have on the Company's consolidated financial position, results of operations or cash flows and the method of retrospective application, either full or modified. Our completed evaluation will include the impact of the new standard on certain common practices currently employed by us, such as rebates, in-store display and demo allowances, allowances for non-saleable product, and coupons. We currently expect to utilize the modified retrospective transition method and to adopt the ASU on January 1, 2018. Based on our findings to date, we do not expect the standard to have a material impact on our results of operations or financial position; however, our assessment is not yet complete. During 2017, we plan to finalize our review and method of adoption.

3. Inventories, net

3. Inventories, net	6 Months Ended
	Jun. 30, 2017
Inventory Disclosure [Abstract]
Inventories	Inventories consisted of the following: June 30, 2017 December 31, 2016 Ingredients $ 1,992 $ 2,256 Packaging 2,731 2,770 Finished goods 3,374 3,016 Total inventories $ 8,097 $ 8,042

4. Property, Plant and Equipmen

4. Property, Plant and Equipment, net	6 Months Ended
	Jun. 30, 2017
Property, Plant and Equipment [Abstract]
Property, Plant and Equipment, net	Property, plant and equipment consisted of the following: June 30, 2017 December 31, 2016 Land $ 1,747 $ 1,747 Buildings and improvements 16,533 16,428 Machinery and equipment 25,465 23,122 Vehicles 934 848 Office equipment 728 709 Construction in process 1,653 1,873 47,060 44,727 Less accumulated depreciation (24,050 ) (22,895 ) Total property, plant and equipment, net $ 23,010 $ 21,832

5. Intangible Assets

5. Intangible Assets	6 Months Ended
	Jun. 30, 2017
Goodwill and Intangible Assets Disclosure [Abstract]
Intangible Assets	Goodwill & indefinite-lived intangible assets consisted of the following: June 30, 2017 December 31, 2016 Goodwill $ 10,368 $ 10,368 Brand names 3,700 3,700 Goodwill and indefinite-lived intangible assets $ 14,068 $ 14,068 Other intangible assets, net consisted of the following: June 30, 2017 December 31, 2016 Recipes $ 44 $ 44 Customer lists and other customer related intangibles 4,529 4,529 Customer relationship 985 985 Trade names 2,248 2,248 Formula 438 438 8,244 8,244 Accumulated amortization (6,933 ) (6,597 ) Other intangible assets, net $ 1,311 $ 1,647

6. Accrued Expenses

6. Accrued Expenses	6 Months Ended
	Jun. 30, 2017
Payables and Accruals [Abstract]
Accrued Expenses	Accrued expenses consisted of the following: June 30, 2017 December 31, 2016 Payroll and incentive compensation $ 3,207 $ 1,560 Real estate taxes 331 394 Other 275 215 $ 3,813 $ 2,169

7. Notes Payable

7. Notes Payable	6 Months Ended
	Jun. 30, 2017
Debt Disclosure [Abstract]
Notes Payable	Variable rate term loan due May 31, 2018. Principal and interest (3.54% at June 30, 2017) payable monthly with a balloon payment due at maturity. $ 3,085 $ 3,339 Variable rate term loan due May 31, 2019. Principal and interest (3.55% at June 30, 2017) payable monthly with a balloon payment due at maturity. 3,614 3,780 Total notes payable 6,699 7,119 Less current portion (3,419 ) (840 ) Total long-term portion $ 3,280 $ 6,279 The variable rate term loans are subject to interest at the prime rate or at the LIBOR rate plus 2.5% and are collateralized by substantially all of the assets of the Company. In addition, under the terms of the related agreements, the Company is subject to minimum fixed charged ratio and tangible net worth thresholds, which among other things may limit the Company's ability to pay dividends or repurchase shares of its common stock. Further, under the agreements the Company is required to deliver its annual and quarterly financial statements and related SEC filings within specified timeframes. The Company was in compliance with these financial covenants at June 30, 2017. In addition, the Company has a $5 million revolving credit facility. Borrowings under the facility are subject to interest at the prime rate or LIBOR plus 2.5%. As of June 30, 2017 there were no borrowings under the facility. The facility expires in July 2018.

8. Commitments And Contingencie

8. Commitments And Contingencies	6 Months Ended
	Jun. 30, 2017
Commitments and Contingencies Disclosure [Abstract]
Commitments And Contingencies	Lease obligations The Company leases three retail stores for its Lifeway Kefir Shop subsidiary, certain machinery and equipment, and office space under operating leases. Total lease expense was $322 and $160 for the six months ended June 30, 2017 and 2016, respectively. Total lease expense was $165 and $70 for the three months ended June 30, 2017 and 2016, respectively. Litigation The Company is engaged in various legal actions, claims and proceedings arising in the normal course of business, including commercial disputes, product liabilities, intellectual property matters and employment-related matters resulting from the Company’s business activities. The Company records accruals for outstanding legal matters when it believes it is probable that a loss will be incurred and the amount of such loss can be reasonably estimated. The Company evaluates, on a periodic basis, developments in legal matters that could affect the amount of any accrual and developments that would make a loss contingency both probable and reasonably estimable. If a loss contingency is not both probable and estimable, the Company does not establish an accrued liability. Currently, none of the Company’s accruals for outstanding legal matters are material individually or in the aggregate to the Company’s financial position and it is management’s opinion that the ultimate resolution of these outstanding legal matters will not have a material adverse effect on our business, financial condition, results of operations, or cash flows. However, if the Company ultimately is required to make payments in connection with an adverse outcome, it is possible that it could have a material adverse effect on the Company’s business, financial condition, results of operations or cash flows. The Company’s contingencies are subject to substantial uncertainties, including for each such contingency the following, among other factors: (i) the procedural status of the case; (ii) whether the case has or may be certified as a class action suit; (iii) the outcome of preliminary motions; (iv) the impact of discovery; (v) whether there are significant factual issues to be determined or resolved; (vi) whether the proceedings involve a large number of parties and/or parties and claims in multiple jurisdictions or jurisdictions in which the relevant laws are complex or unclear; (vii) the extent of potential damages, which are often unspecified or indeterminate; and (viii) the status of settlement discussions, if any, and the settlement posture of the parties. Consequently, the Company cannot predict with any reasonable certainty the timing or outcome of such contingencies, and the Company is unable to estimate a possible loss or range of loss. In a letter dated May 19, 2016, the Company received a request to voluntarily produce documents in connection with a confidential, informal inquiry by the Division of Enforcement of the SEC concerning the Company’s internal controls, disclosure controls procedures, and internal control over financial reporting for fiscal years 2013 through the date of the letter. The SEC has informed the Company that the inquiry should not be construed as an indication that any violation of any federal securities law has occurred or as a reflection upon the merits of any person, company, or securities involved. Since receiving the letter, the Company has been cooperating with the SEC and will continue to do so.

9. Income taxes

9. Income taxes	6 Months Ended
	Jun. 30, 2017
Income Tax Disclosure [Abstract]
Income taxes	For each interim period, the Company estimates the effective tax rate (“ETR”) expected to be applicable for the full year and applies that rate to income before provision for income taxes for the period. Additionally, the Company records discrete income tax items such as enacted tax rate changes and completed tax audits in the period in which they occur. The effective tax rate for the three months ended June 30, 2017 was 43.6% compared to 27.2% for the three months ended June 30, 2016. The effective tax rate for the six months ended June 30, 2017 was 43.1% compared to 31.3% for the six months ended June 30, 2016.

10. Fair Value Measurements

10. Fair Value Measurements	6 Months Ended
	Jun. 30, 2017
Fair Value Disclosures [Abstract]
Fair Value Measurements	The Company’s financial assets and liabilities include cash and cash equivalents, accounts receivable, accounts payable and notes payable, and are reported at carrying value which approximates fair value.

11. Stock-based and Other Compe

11. Stock-based and Other Compensation	6 Months Ended
	Jun. 30, 2017
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Stock-based and Other Compensation	Stock Options In December 2015, Lifeway shareholders approved the 2015 Omnibus Incentive Plan, which authorized the issuance of an aggregate of 3.5 million shares to satisfy awards of stock options, stock appreciation rights, unrestricted stock, restricted stock, restricted stock units, performance shares and performance units. At June 30, 2017, 3.448 million shares remain available under the Omnibus Incentive Plan. The Company has not established a pace for the frequency of awards under the Omnibus Incentive Plan, and may choose to suspend the issuance of new awards in the future and may grant additional awards at any time including issuing special grants of restricted stock, restricted stock units, and stock options to attract and retain new and existing executives. The following table summarizes stock option activity during the six months ended June 30, 2017: Options Weighted average exercise price Weighted average remaining contractual life Aggregate intrinsic value Outstanding at December 31, 2016 45 $ 10.45 Granted – $ – Exercised – $ – Forfeited – $ – Outstanding at June 30, 2017 45 $ 10.45 8.70 $ (51) Exercisable at June 30, 2017 21 $ 10.75 8.60 $ (30) For the six months ended June 30, 2017 and 2016 total pre-tax stock-based compensation expense recognized in the consolidated statements of income and comprehensive income was $29 and $42, respectively. For the six months ended June 30, 2017 and 2016 tax-related benefits of $11 and $16 were also recognized. For the three months ended June 30, 2017 and 2016 total pre-tax stock-based compensation expense recognized in the consolidated statements of income and comprehensive income was $14 and $21, respectively. For the three months ended June 30, 2017 and 2016 tax-related benefits of $5 and $8 were also recognized. As of June 30, 2017, the total remaining unearned compensation related to non-vested stock options was $32, which is expected to be amortized over the weighted-average remaining service period of 1.27 years. We measure the fair value of stock options using the Black-Scholes option pricing model. The expected term of options granted was based on the weighted average time of vesting and the end of the contractual term. We utilized this simplified method as we do not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term. Restricted Stock Units Pursuant to the 2015 Omnibus Incentive Plan, Lifeway granted 2 Restricted Stock Units (“RSUs”) to certain key employees in December 2016. An RSU represents the right to receive one share of common stock in the future. RSUs have no exercise price. The following table summarizes RSU activity during the six months ended June 30, 2017: RSU’s Outstanding at December 31, 2016 2 Granted – Shares issued upon vesting – Forfeited – Outstanding at June 30, 2017 2 Weighted average grant date fair value per share $ 10.54 We expense RSU’s over the service period. For the six months ended June 30, 2017 and 2016 total pre-tax stock-based compensation expense recognized in the consolidated statements of income and comprehensive income was $9 and $0, respectively. For the six months ended June 30, 2017 and 2016 tax-related benefits of $4 and $0 were also recognized. For the three months ended June 30, 2017 and 2016 total pre-tax stock-based compensation expense recognized in the consolidated statements of income and comprehensive income was $4 and $0, respectively. For the three months ended June 30, 2017 and 2016 tax-related benefits of $2 and $0 were also recognized. As of June 30, 2017, the total remaining unearned compensation related to non-vested RSU’s was $11, which is expected to be amortized over the weighted-average remaining service period of 0.96 years. Incentive Compensation In March 2016 Lifeway established an incentive-based compensation program (the “2016 Plan”) for certain senior executives and key employees (the “participants”). The incentive compensation was based on the achievement of certain sales and EBITDA performance levels versus respective targets in 2016. Under the 2016 Plan, the senior executives had the opportunity to earn cash and equity-based incentive compensation in amounts ranging from $0 to $4,000 for fiscal 2016 depending on the performance levels compared to the respective targets. For the six months and three months ended June 30, 2016, bonuses of $1,040 and $640 were expensed under the 2016 Plan, respectively. In January 2017, Lifeway established an incentive-based compensation program (the “2017 Plan”) for certain senior executives and key employees (the “participants”). The number of participants under the 2017 Plan was expanded from the 2016 Plan. Under the 2017 Plan, incentive compensation is based on (a) the achievement of certain sales and EBITDA performance levels versus respective targets in 2017, and (b) for certain senior executives, the achievement of individual performance objectives. Under the 2017 Plan, collectively the participants may earn cash and equity based incentive compensation in amounts ranging from $0 to $11,025 depending on the Company’s performance levels compared to the respective targets and the senior executive’s performance compared to their individual objectives. The equity portion of the incentive compensation is payable in restricted stock that vests one-third in each of the three years from the 2017 grant dates. For the six months ended June 30, 2017, $1,985 was accrued under the 2017 Plan, of which $1,248 was recorded as cash bonus expense and $737 was recorded as stock-based compensation expense in the consolidated statements of income and comprehensive income. For the three months ended June 30, 2017, $1,167 was accrued under the 2017 Plan, of which $859 was recorded as cash bonus expense and $308 was recorded as stock-based compensation expense in the consolidated statements of income and comprehensive income. Retirement Benefits The Company has a defined contribution plan which is available to substantially all full-time employees. Under the terms of the plan the Company matches employee contributions under a prescribed formula. For the six months ended June 30, 2017 and 2016 total contribution expense recognized in the consolidated statements of income and comprehensive income was $237 and $173, respectively. For the three months ended June 30, 2017 and 2016 total contribution expense recognized in the consolidated statements of income and comprehensive income was $134 and $91, respectively.

12. Segments, Products and Cust

12. Segments, Products and Customers	6 Months Ended
	Jun. 30, 2017
Segment Reporting [Abstract]
Segments, Products and Customers	The Company manufactures probiotic, cultured, functional dairy health food products. The Company's primary product is kefir, a dairy beverage similar to but distinct from yogurt, in several flavors and in several package configurations. In addition to the drinkable products, Lifeway manufactures "Lifeway Farmer Cheese," a line of various farmer cheeses. The Company has determined that it has one reportable segment based on how the Company's chief operating decision maker manages the business and in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing Company performance, has been identified collectively as the Chief Financial Officer, the Chief Operating Officer, the Chief Executive Officer and Chairperson of the board of directors. Substantially all of the consolidated revenues of the Company relate to the sale of fermented dairy products which are produced using the same processes and materials and are sold to consumers through a network of distributors and retailers in the United States. Net sales of products by category were as follows: Six months ended June 30, Three months ended June 30, 2017 2016 2017 2016 Drinkable Kefir (a) $ 55,248 $ 54,602 $ 27,488 $ 26,535 Lifeway cheese products 5,189 5,099 2,591 2,462 Pro Bugs Kefir products 2,767 3,357 1,315 1,716 Frozen Kefir 646 643 339 418 Net Sales $ 63,850 $ 63,701 $ 31,733 $ 31,131 (a) Excludes ProBugs Kefir products, and includes cream, cupped Kefir and cupped cheese products, supplements and other. Significant Customers

13. Related party transactions

13. Related party transactions	6 Months Ended
	Jun. 30, 2017
Related Party Transactions [Abstract]
Related party transactions	The Company obtains consulting services from the Chairperson of its board of directors. Fees earned by the Chairperson are included in general and administrative expenses in the accompanying consolidated statements of income and comprehensive income and were $500 and $539 during the six months ended June 30, 2017 and 2016, respectively, and $250 and $213 during the three months ended June 30, 2017 and 2016, respectively. The Company is also a party to a royalty agreement with the Chairperson of its board of directors under which the Company pays the Chairperson a royalty based on the sale of certain Lifeway product, not to exceed $50 in any fiscal month. Royalties earned by the Chairperson are included in selling expenses in the accompanying consolidated statements of income and comprehensive income and were $300 during the six months ended June 30, 2017 and 2016, and $150 during the three months ended June 30, 2017 and 2016.

14. Subsequent Event

14. Subsequent Event	6 Months Ended
	Jun. 30, 2017
Subsequent Events [Abstract]
Subsequent Event	On August 2, 2017, the Company completed a tender offer to purchase for cash 86 shares of its common stock at a purchase price of $9.50 per share, for a total cost of approximately $900, which includes $86 of costs directly attributable to the tender offer. These shares represented approximately 0.5% of the Company’s total outstanding common stock as of July 26, 2017. The share purchases and related costs were funded through the Company’s cash and cash equivalents on hand.

2. Summary Of Significant Accou

2. Summary Of Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 30, 2017
Accounting Policies [Abstract]
Use Of Estimates	Use of estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates made in preparing the consolidated financial statements include the reserve for promotional allowances, the valuation of goodwill and intangible assets, stock-based and incentive compensation, and deferred income taxes.
Revenue Recognition	Revenue Recognition The Company records sales when the following four criteria have been met: (i) The product has been shipped and the Company has no significant remaining obligations; (ii) Persuasive evidence of an agreement exists; (iii) The price to the buyer is fixed or determinable; and (iv) Collection is probable. In addition, shipping costs invoiced to the customers are included in net sales and the related costs are included in cost of sales. The Company routinely offers sales allowances and discounts to our customers and consumers. These programs include rebates, in-store display and demo allowances, allowances for non-salable product, coupons and other trade promotional activities. These allowances are considered reductions in the price of our products and thus are recorded as reductions to gross sales. Some of these incentives are recorded by estimating incentive costs based on our historical experience and expected levels of performance of the trade promotion. We maintain a reserve for the estimated allowances incurred but unpaid. Differences between estimated and actual allowances are normally insignificant and are recognized in income in the period such differences are determined. Product returns have historically not been material. Bulk cream is a by-product of the Company’s fluid milk manufacturing process. The Company does not use its by-product bulk cream in any of its end products, but rather disposes of it through sales to other companies. Bulk cream by-product sales are included in net sales.
Advertising and promotional costs	Advertising and promotional costs The Company expenses advertising costs as incurred. For the six months ended June 30, 2017 and 2016 total advertising expenses were $2,811 and $2,753 respectively. For the three months ended June 30, 2017 and 2016 total advertising expenses were $1,043 and $1,811 respectively.
Recently Adopted Accounting Pronouncements	Recently Adopted Accounting Pronouncements In March 2016, the Financial Accounting Standards Board ("FASB") issued ASU No. 2016-09, Compensation-Stock Compensation – Improvements to Employee Share-Based Payment Accounting. The new guidance simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, statutory tax withholding requirements, classification of awards as either equity or liabilities, and classification in the statement of cash flows. Under this ASU, excess tax benefits and deficiencies are no longer recognized as additional paid-in capital in the consolidated balance sheets. This guidance was effective on January 1, 2017. The adoption of this amendment had no impact on the consolidated financial statements. In November 2015, the FASB issued ASU 2015-17, Income Taxes – Balance Sheet Classification of Deferred Taxes. This new guidance simplifies the presentation of deferred income taxes and requires that all deferred tax assets and liabilities, along with any related valuation allowance, be classified as noncurrent on the balance sheet. Previous guidance required deferred tax assets and liabilities to be separated into current and noncurrent amounts on the balance sheet. This guidance was effective on January 1, 2017. The Company elected to adopt this guidance as of the first fiscal quarter in 2017 and has applied the update on a retrospective basis. The Company changed its accounting principle to reduce the cost and complexity inherent in recording deferred taxes as current and noncurrent on the consolidated balance sheets. As a result, the Company has reclassified $662 of current deferred tax asset to noncurrent deferred tax liability in the consolidated balance sheet as of December 31, 2016. In July 2015, the FASB issued ASU 2015-11, Inventory – Simplifying the Measurement of Inventory. The core principal of the guidance is that an entity should measure inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. This guidance was effective on January 1, 2017. The adoption of this amendment had no impact on the consolidated financial statements.
Recently Issued Accounting Pronouncements	Recently Issued Accounting Pronouncements In May 2017, the FASB issued ASU No. 2017-09, Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting. The new guidance provides clarity and reduces both diversity in practice and cost of complexity when accounting for a change to the terms of or conditions of a share-based payment award. The amendments in this Update provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. The new guidance will be effective for fiscal years beginning on or after December 15, 2017 and interim periods within those years. Early adoption of the guidance is permitted. The adoption of this amendment is not expected to have a material impact on the consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other: Simplifying the Test for Goodwill Impairment. The new guidance simplifies the subsequent measurement of goodwill by removing the second step of the two-step impairment test. The amendment requires an entity to perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The new guidance will be effective for annual periods or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. The amendment should be applied on a prospective basis. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The adoption of this amendment is not expected to have a material impact on the consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments. The new guidance is intended to address the diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows, such as debt prepayment or debt extinguishment costs, contingent consideration payments made after an acquisition, proceeds from the settlement of insurance claims, and other topics. The new guidance will be effective for fiscal years beginning on or after December 15, 2017 and interim periods within those years. Early adoption of the guidance is permitted. Management is currently evaluating the impact that the new guidance will have on the consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases. The guidance requires lessees to recognize lease assets and lease liabilities in the balance sheet and disclose key information about leasing arrangements, such as information about variable lease payments and options to renew and terminate leases. The amended guidance will require both operating and finance leases to be recognized in the balance sheet. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. The new guidance is effective for financial statements issued for fiscal years beginning after December 15, 2018, and interim periods within those years. Early adoption is permitted. The amendments in this ASU should be adopted using a modified retrospective transition approach, which requires application of the new guidance at the beginning of the earliest comparative period presented in the year of adoption. We do not intend to early adopt the standard. Management is currently evaluating the impact that the new guidance will have on the consolidated financial statements. In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities. The new guidance modifies how entities measure equity investments and present changes in the fair value of financial liabilities. Under the new guidance, entities will have to measure equity investments that do not result in consolidation and are not accounted under the equity method at fair value and recognize any changes in fair value in net income unless certain conditions exist. The new guidance will be effective for fiscal years beginning on or after December 15, 2017 and interim periods within those years. Early adoption of the guidance is not permitted. The adoption of this amendment is not expected to have an impact on the consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASU 2014-09"), which supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, including most industry-specific requirements. ASU 2014-09 establishes a five-step revenue recognition process in which an entity will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The standard allows for either “full retrospective” adoption, meaning the standard is applied to all of the periods presented, or “modified retrospective” adoption, meaning the standard is applied only to the most current period presented in the financial statements. ASU 2014-09 also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenues and cash flows from contracts with customers. On August 12, 2015, the FASB approved a one year delay of the effective date to reporting periods beginning after December 15, 2017, while permitting companies to voluntarily adopt the new standard as of the original effective date. In December 2016, the FASB issued ASU No. 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers, which clarifies narrow aspects of ASC 606 or corrects unintended application of the guidance. The effective date and transition requirements for ASU 2016-20 are the same as the effective date and transition requirements for ASU 2014-09. Under the delayed effective date, the Company is required to adopt the new standard not later than January 1, 2018. Management is currently evaluating the impact the adoption of this amendment will have on the Company's consolidated financial position, results of operations or cash flows and the method of retrospective application, either full or modified. Our completed evaluation will include the impact of the new standard on certain common practices currently employed by us, such as rebates, in-store display and demo allowances, allowances for non-saleable product, and coupons. We currently expect to utilize the modified retrospective transition method and to adopt the ASU on January 1, 2018. Based on our findings to date, we do not expect the standard to have a material impact on our results of operations or financial position; however, our assessment is not yet complete. During 2017, we plan to finalize our review and method of adoption.

3. Inventories (Tables)

3. Inventories (Tables)	6 Months Ended
	Jun. 30, 2017
Inventory Disclosure [Abstract]
Schedule Of Inventories	Inventories consisted of the following: June 30, 2017 December 31, 2016 Ingredients $ 1,992 $ 2,256 Packaging 2,731 2,770 Finished goods 3,374 3,016 Total inventories $ 8,097 $ 8,042

4. Property, Plant and Equipm23

4. Property, Plant and Equipment, net (Tables)	6 Months Ended
	Jun. 30, 2017
Property, Plant and Equipment [Abstract]
Schedule of property, plant and equipment	June 30, 2017 December 31, 2016 Land $ 1,747 $ 1,747 Buildings and improvements 16,533 16,428 Machinery and equipment 25,465 23,122 Vehicles 934 848 Office equipment 728 709 Construction in process 1,653 1,873 47,060 44,727 Less accumulated depreciation (24,050 ) (22,895 ) Total property, plant and equipment, net $ 23,010 $ 21,832

5. Intangible Assets (Tables)

5. Intangible Assets (Tables)	6 Months Ended
	Jun. 30, 2017
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill & indefinite-lived intangible assets	June 30, 2017 December 31, 2016 Goodwill $ 10,368 $ 10,368 Brand names 3,700 3,700 Goodwill and indefinite-lived intangible assets $ 14,068 $ 14,068
Schedule of other intangible assets	June 30, 2017 December 31, 2016 Recipes $ 44 $ 44 Customer lists and other customer related intangibles 4,529 4,529 Customer relationship 985 985 Trade names 2,248 2,248 Formula 438 438 8,244 8,244 Accumulated amortization (6,933 ) (6,597 ) Other intangible assets, net $ 1,311 $ 1,647

6. Accrued Expenses (Tables)

6. Accrued Expenses (Tables)	6 Months Ended
	Jun. 30, 2017
Payables and Accruals [Abstract]
Schedule Of Accrued Expenses	Accrued expenses consisted of the following: June 30, 2017 December 31, 2016 Payroll and incentive compensation $ 3,207 $ 1,560 Real estate taxes 331 394 Other 275 215 $ 3,813 $ 2,169

7. Notes Payable (Tables)

7. Notes Payable (Tables)	6 Months Ended
	Jun. 30, 2017
Debt Disclosure [Abstract]
Schedule Of Notes Payable	June 30, 2017 December 31, 2016 Variable rate term loan due May 31, 2018. Principal and interest (3.54% at June 30, 2017) payable monthly with a balloon payment due at maturity. $ 3,085 $ 3,339 Variable rate term loan due May 31, 2019. Principal and interest (3.55% at June 30, 2017) payable monthly with a balloon payment due at maturity. 3,614 3,780 Total notes payable 6,699 7,119 Less current portion (3,419 ) (840 ) Total long-term portion $ 3,280 $ 6,279

11. Stock-based and Other Com27

11. Stock-based and Other Compensation (Tables)	6 Months Ended
	Jun. 30, 2017
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Stock option activity table	Options Weighted average exercise price Weighted average remaining contractual life Aggregate intrinsic value Outstanding at December 31, 2016 45 $ 10.45 Granted – $ – Exercised – $ – Forfeited – $ – Outstanding at June 30, 2017 45 $ 10.45 8.70 $ (51) Exercisable at June 30, 2017 21 $ 10.75 8.60 $ (30)
RSU activity table	RSU’s Outstanding at December 31, 2016 2 Granted – Shares issued upon vesting – Forfeited – Outstanding at June 30, 2017 2 Weighted average grant date fair value per share $ 10.54

12. Segments, Products and Cu28

12. Segments, Products and Customers (Tables)	6 Months Ended
	Jun. 30, 2017
Segment Reporting [Abstract]
Schedule of sales of products by category	Six months ended June 30, Three months ended June 30, 2017 2016 2017 2016 Drinkable Kefir (a) $ 55,248 $ 54,602 $ 27,488 $ 26,535 Lifeway cheese products 5,189 5,099 2,591 2,462 Pro Bugs Kefir products 2,767 3,357 1,315 1,716 Frozen Kefir 646 643 339 418 Net Sales $ 63,850 $ 63,701 $ 31,733 $ 31,131

2. Summary Of Significant Acc29

2. Summary Of Significant Accounting Policies (Details Narrative) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Accounting Policies [Abstract]
Advertising expenses	$ 1,043	$ 1,811	$ 2,811	$ 2,753

3. Inventories (Details)

3. Inventories (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Inventory Disclosure [Abstract]
Finished goods	$ 1,992	$ 2,256
Production supplies	2,731	2,770
Raw materials	3,374	3,016
Total inventories	$ 8,097	$ 8,042

4. Property And Equipment (Deta

4. Property And Equipment (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Property and equipment, gross	$ 47,060	$ 44,727
Less accumulated depreciation	(24,050)	(22,895)
Total property and equipment	23,010	21,832
Land [Member]
Property and equipment, gross	1,747	1,747
Buildings And improvements [Member]
Property and equipment, gross	16,533	16,428
Machinery And Equipment [Member]
Property and equipment, gross	25,465	23,122
Vehicles [Member]
Property and equipment, gross	934	848
Office Equipment [Member]
Property and equipment, gross	728	709
Construction In Progress [Member]
Property and equipment, gross	$ 1,653	$ 1,873

5. Intangible Assets (Details -

5. Intangible Assets (Details - Indefinite assets) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill	$ 10,368	$ 10,368
Brand names	3,700	3,700
Goodwill & indefinite lived intangible assets	$ 14,068	$ 14,068

5. Intangible Assets (Details33

5. Intangible Assets (Details - Finite lived) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Cost	$ 8,244	$ 8,244
Accumulated Amortization	(6,933)	(6,597)
Intangible assets, net	1,311	1,647
Recipes [Member]
Cost	44	44
Customer lists [Member]
Cost	4,529	4,529
Customer relationships and other customer related intangibles [Member]
Cost	985	985
Trade Names [Member]
Cost	2,248	2,248
Formula [Member]
Cost	$ 438	$ 438

6. Accrued Expenses (Details)

6. Accrued Expenses (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Payables and Accruals [Abstract]
Payroll and incentive compensation	$ 3,207	$ 1,560
Real estate tax	331	394
Other	275	215
Total accrued expenses	$ 3,813	$ 2,169

7. Notes Payable (Details - Not

7. Notes Payable (Details - Notes payable) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2017	Dec. 31, 2016
Total notes payable	$ 6,699	$ 7,119
Less current maturities	(3,419)	(840)
Total long-term portion	3,280	6,279
Term Loan 1 [Member]
Total notes payable	$ 3,085	3,339
Debt maturity date	May 31, 2018
Debt interest rate	3.54%
Term Loan 2 [Member]
Total notes payable	$ 3,614	$ 3,780
Debt maturity date	May 31, 2019
Debt interest rate	3.55%

7. Notes Payable (Details Narra

7. Notes Payable (Details Narrative) - Revolving Credit Facility [Member] $ in Thousands	6 Months Ended
	Jun. 30, 2017USD ($)
Revolving credit facility maximum borrowing capacity	$ 5,000
Credit facility interest rate	LIBOR plus 2.5%
Credit facility expiration date	Jul. 31, 2018
Line of credit balance	$ 0

8. Commitments And Contingenc37

8. Commitments And Contingencies (Details Narrative) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Commitments and Contingencies Disclosure [Abstract]
Total rent expense	$ 165	$ 70	$ 322	$ 160

9. Income taxes (Details Narrat

9. Income taxes (Details Narrative)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Income Tax Disclosure [Abstract]
Effective tax rate	43.60%	27.20%	43.10%	31.30%

11. Stock-based and Other Com39

11. Stock-based and Other Compensation (Details - Option Activity) - Options [Member] - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	6 Months Ended
	Jun. 30, 2017	Dec. 31, 2016
Options outstanding, beginning balance	45
Options granted	0
Options exercised	0
Options forfeited	0
Options outstanding, ending balance	45
Options exercisable	21
Weighted average exercise price, options outstanding, beginning balance	$ 10.45
Weighted average exercise price, options outstanding, ending balance	10.45
Weighted average exercise price, options exercisable	$ 10.75
Weighted average remaining contractural life, outstanding	8 years 8 months 12 days
Weighted average remaining contractural life, exercisable	8 years 7 months 6 days
Aggregate intrinsic value, options outstanding		$ (51)
Aggregate intrinsic value, options exercisable		$ (30)

11. Stock-based and Other Com40

11. Stock-based and Other Compensation (Details - RSU Activity) - Restricted Stock Units (RSUs) [Member] shares in Thousands	6 Months Ended
	Jun. 30, 2017$ / sharesshares
RSU's outstanding, beginning balance	2
RSU's granted	0
Shares issued upon vesting	0
RSU's forfeited	0
RSU's outstanding, ending balance	2
Weighted average grant date fair value per share | $ / shares	$ 10.54

11. Stock-based and Other Com41

11. Stock-based and Other Compensation (Details Narrative) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Contribution expense	$ 134	$ 91	$ 237	$ 173
2017 Plan [Member]
Bonus expense	1,167		1,985
2017 Plan [Member] | Stock-Based Compensation [Member]
Bonus expense	308		737
2017 Plan [Member] | Cash Bonus [Member]
Bonus expense	$ 859		$ 1,248
2016 Plan [Member]
Bonus expense		640		1,040
2015 Omnibus Incentive Plan [Member]
Stock authorized for issuance	3,500		3,500
Shares available for issuance	3,448		3,448
Options [Member]
Share-based compensation	$ 14	21	$ 29	42
Tax benefits	5	8	11	16
Unearned compensation related to non-vested stock options	32		$ 32
Weighted average period for unrecognized compensation			1 year 3 months 8 days
Restricted Stock Units (RSUs) [Member]
Share-based compensation	4	0	$ 9	0
Tax benefits	2	$ 0	4	$ 0
Unearned compensation related to non-vested RSU's	$ 11		$ 11
Weighted average period for unrecognized compensation			11 months 15 days

12. Segments, Products and Cu42

12. Segments, Products and Customers (Details) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Total sales		$ 31,733	$ 31,131	$ 63,850	$ 63,701
Drinkable Kefir [Member]
Total sales	[1]	27,488	26,535	55,248	54,602
Lifeway Cheese Products [Member]
Total sales		2,591	2,462	5,189	5,099
ProBugs Kefer products [Member]
Total sales		1,315	1,716	2,767	3,357
Frozen Kefir [Member]
Total sales		$ 339	$ 418	$ 646	$ 643
[1]	Excludes ProBugs Kefir products, and includes cream, cupped Kefir and cupped cheese products, supplements and other.

12. Segments, Products and Cu43

12. Segments, Products and Customers (Details Narrative)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Sales Revenue, Net [Member] | Two Customers [Member]
Concentration percentage	22.00%	23.00%	23.00%	23.00%

13. Related party transactions

13. Related party transactions (Details Narrative) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
General and administrative expenses	$ 3,813	$ 3,046	$ 7,598	$ 6,992
Selling expenses	3,400	3,463	7,638	6,427
Consulting Fees [Member]
General and administrative expenses	250	213	500	539
Royalty Expense [Member]
Selling expenses	$ 150	$ 150	$ 300	$ 300