Lifeway Foods (LWAY) 10-Q 13 Aug 20 2020 Q2 Quarterly report Financial data

Document And Entity Information

Document And Entity Information - shares	6 Months Ended
	Jun. 30, 2020	Aug. 03, 2020
Cover [Abstract]
Entity Registrant Name	Lifeway Foods, Inc.
Entity Central Index Key	0000814586
Document Type	10-Q
Document Period End Date	Jun. 30, 2020
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity's Reporting Status Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		15,604,480
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2020
Entity Small Business	true
Entity Emerging Growth	false
Entity Shell Company	false
Enitity Interactive Data Current	Yes
Entity Incorporation State County Code	IL
Entity File Number	000-17363

Consolidated Balance Sheets (Un

Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Current assets
Cash and cash equivalents	$ 4,619	$ 3,836
Accounts receivable, net of allowance for doubtful accounts and discounts and allowances of $1,300 and $1,100 at June 30, 2020 and December 31, 2019 respectively	7,737	6,692
Inventories, net	6,653	6,392
Prepaid expenses and other current assets	1,086	1,598
Refundable income taxes	615	681
Total current assets	20,710	19,199
Property, plant and equipment, net	21,394	22,274
Operating lease right-of-use asset	431	738
Intangible assets
Goodwill and indefinite-lived intangibles	12,824	12,824
Other intangible assets, net	74	152
Total intangible assets	12,898	12,976
Other assets	1,800	1,800
Total assets	57,233	56,987
Current liabilities
Accounts payable	5,108	5,282
Accrued expenses	3,066	4,087
Line of credit - current	2,757	0
Accrued income taxes	92	154
Total current liabilities	11,023	9,523
Line of credit	0	2,745
Operating lease liabilities	239	488
Deferred income taxes, net	1,292	922
Other long-term liabilities	42	58
Total liabilities	12,596	13,736
Commitments and contingencies
Stockholders' equity
Preferred stock, no par value; 2,500 shares authorized; no shares issued or outstanding at June 30, 2020 and December 31, 2019	0	0
Common stock, no par value; 40,000 shares authorized; 17,274 shares issued; 15,592 and 15,710 outstanding at June 30, 2020 and December 31, 2019, respectively	6,509	6,509
Paid-in-capital	2,587	2,380
Treasury stock, at cost	(12,548)	(12,601)
Retained earnings	48,089	46,963
Total stockholders' equity	44,637	43,251
Total liabilities and stockholders' equity	$ 57,233	$ 56,987

Consolidated Balance Sheets (_2

Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Current assets
Allowance for doubtful accounts and discounts	$ 1,300	$ 1,100
Stockholders' equity
Preferred stock, no par value
Preferred stock, shares authorized	2,500	2,500
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, no par value
Common stock, shares authorized	40,000	40,000
Common stock, shares issued	17,274	17,274
Common stock, shares outstanding	15,592	15,710

Consolidated Statements of Oper

Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Income Statement [Abstract]
Net sales	$ 25,014	$ 23,153	$ 50,402	$ 47,768
Cost of goods sold	17,279	16,843	35,903	34,410
Depreciation expense	807	747	1,574	1,492
Total cost of goods sold	18,086	17,590	37,477	35,902
Gross profit	6,928	5,563	12,925	11,866
Selling expenses	2,720	2,691	5,295	5,830
General and administrative	2,731	2,898	5,876	6,390
Amortization expense	39	40	78	113
Total operating expenses	5,490	5,629	11,249	12,333
Income (loss) from operations	1,438	(66)	1,676	(467)
Other income (expense):
Interest expense	(30)	(68)	(69)	(137)
Gain on investments	4	0	4	0
(Loss) gain on sale of property and equipment	(33)	4	(28)	29
Other income, net	5	2	2	5
Total other income (expense)	(54)	(62)	(91)	(103)
Income (loss) before provision for income taxes	1,384	(128)	1,585	(570)
Provision (benefit) for income taxes	404	13	459	(41)
Net income (loss)	$ 980	$ (141)	$ 1,126	$ (529)
Earnings (loss) per common share - Basic	$ 0.06	$ (0.01)	$ 0.07	$ (0.03)
Earnings (loss) per common share - Dilited	$ 0.06	$ (0.01)	$ 0.07	$ (0.03)
Weighted average number of shares outstanding - Basic	15,560	15,775	15,591	15,771
Weighted average number of shares outstanding - Diluted	15,586	15,775	15,607	15,771

Consolidated Statements of Stoc

Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) shares in Thousands, $ in Thousands	Common Stock	In treasury	Paid-In Capital	Retained Earnings	Total
Beginning Balance, shares at Dec. 31, 2018	17,274
Beginning Balance, Treasury stock shares at Dec. 31, 2018		(1,460)
Beginning Balance, value at Dec. 31, 2018	$ 6,509	$ (12,970)	$ 2,303	$ 46,563	$ 42,405
Cumulative impact of change in accounting principles, net of tax				(53)	(53)
Issuance of common stock in connection with stock-based compensation, shares		41
Issuance of common stock in connection with stock-based compensation, value		$ 351	142		493
Treasury stock purchased, shares		(82)
Treasury stock purchased, value		$ (205)			(205)
Stock-based compensation			218		218
Net income (loss)				(388)	(388)
Ending Balance, shares at Mar. 31, 2019	17,274
Ending Balance, Treasury stock shares at Mar. 31, 2019		(1,501)
Ending Balance, value at Mar. 31, 2019	$ 6,509	$ (12,824)	2,663	46,122	42,470
Beginning Balance, shares at Dec. 31, 2018	17,274
Beginning Balance, Treasury stock shares at Dec. 31, 2018		(1,460)
Beginning Balance, value at Dec. 31, 2018	$ 6,509	$ (12,970)	2,303	46,563	42,405
Net income (loss)					(529)
Ending Balance, shares at Jun. 30, 2019	17,274
Ending Balance, Treasury stock shares at Jun. 30, 2019		(1,513)
Ending Balance, value at Jun. 30, 2019	$ 6,509	$ (12,477)	2,230	45,981	42,243
Beginning Balance, shares at Mar. 31, 2019	17,274
Beginning Balance, Treasury stock shares at Mar. 31, 2019		(1,501)
Beginning Balance, value at Mar. 31, 2019	$ 6,509	$ (12,824)	2,663	46,122	42,470
Issuance of common stock in connection with stock-based compensation, shares		62
Issuance of common stock in connection with stock-based compensation, value		$ 527	(548)		(21)
Treasury stock purchased, shares		(74)
Treasury stock purchased, value		$ (180)			(180)
Stock-based compensation			115		115
Net income (loss)				(141)	(141)
Ending Balance, shares at Jun. 30, 2019	17,274
Ending Balance, Treasury stock shares at Jun. 30, 2019		(1,513)
Ending Balance, value at Jun. 30, 2019	$ 6,509	$ (12,477)	2,230	45,981	42,243
Beginning Balance, shares at Dec. 31, 2019	17,274
Beginning Balance, Treasury stock shares at Dec. 31, 2019		(1,564)
Beginning Balance, value at Dec. 31, 2019	$ 6,509	$ (12,601)	2,380	46,963	43,251
Issuance of common stock in connection with stock-based compensation, shares		27
Issuance of common stock in connection with stock-based compensation, value		$ 210	306		516
Treasury stock purchased, shares		(179)
Treasury stock purchased, value		$ (405)			(405)
Stock-based compensation			62		62
Net income (loss)				146	146
Ending Balance, shares at Mar. 31, 2020	17,274
Ending Balance, Treasury stock shares at Mar. 31, 2020		(1,716)
Ending Balance, value at Mar. 31, 2020	$ 6,509	$ (12,796)	2,748	47,109	43,570
Beginning Balance, shares at Dec. 31, 2019	17,274
Beginning Balance, Treasury stock shares at Dec. 31, 2019		(1,564)
Beginning Balance, value at Dec. 31, 2019	$ 6,509	$ (12,601)	2,380	46,963	43,251
Net income (loss)					1,126
Ending Balance, shares at Jun. 30, 2020	17,274
Ending Balance, Treasury stock shares at Jun. 30, 2020		(1,682)
Ending Balance, value at Jun. 30, 2020	$ 6,509	$ (12,548)	2,587	48,089	44,637
Beginning Balance, shares at Mar. 31, 2020	17,274
Beginning Balance, Treasury stock shares at Mar. 31, 2020		(1,716)
Beginning Balance, value at Mar. 31, 2020	$ 6,509	$ (12,796)	2,748	47,109	43,570
Issuance of common stock in connection with stock-based compensation, shares		34
Issuance of common stock in connection with stock-based compensation, value		$ 248	(270)		(22)
Stock-based compensation			109		109
Net income (loss)				980	980
Ending Balance, shares at Jun. 30, 2020	17,274
Ending Balance, Treasury stock shares at Jun. 30, 2020		(1,682)
Ending Balance, value at Jun. 30, 2020	$ 6,509	$ (12,548)	$ 2,587	$ 48,089	$ 44,637

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Cash flows from operating activities:
Net income (loss)	$ 1,126	$ (529)
Adjustments to reconcile net income (loss) to operating cash flow:
Depreciation and amortization	1,652	1,605
Non-cash interest expense	12	12
Non-cash rent expense	(38)	0
Bad debt expense	(4)	3
Deferred revenue	(48)	(48)
Stock-based compensation	232	535
Deferred income taxes	369	0
(Loss) gain on sale of property and equipment	28	(29)
Reserve for inventory obsolescence	0	210
(Increase) decrease in operating assets:
Accounts receivable	(1,041)	(1,297)
Inventories	(262)	(1,235)
Refundable income taxes	65	1,470
Prepaid expenses and other current assets	502	(308)
Increase (decrease) in operating liabilities:
Accounts payable	(172)	888
Accrued expenses	(448)	774
Accrued income taxes	(62)	(43)
Net cash provided by operating activities	1,911	2,008
Cash flows from investing activities:
Purchases of property and equipment	(728)	(290)
Proceeds from sale of property and equipment	5	36
Purchase of investments	0	(15)
Net cash used in investing activities	(723)	(269)
Cash flows from financing activities:
Purchase of treasury stock	(405)	(385)
Repayment of line of credit	0	(1,330)
Net cash used in financing activities	(405)	(1,715)
Net decrease in cash and cash equivalents	783	24
Cash and cash equivalents at the beginning of the period	3,836	2,998
Cash and cash equivalents at the end of the period	4,619	3,022
Supplemental cash flow information:
Cash paid for income taxes, net of (refunds)	82	(1,469)
Cash paid for interest	61	149
Non-cash investing and financing activities
Right-of-use assets recognized at ASU 2016-02 transition	0	944
Operating lease liability recognized at ASU 2016-02 transition	0	997
Increase (decrease) in right-of-use assets and operating lease liabilities recognized after ASU 2016-02 transition	(58)	280
Issuance of common stock under equity incentive plans	$ 522	$ 0

1. Basis of presentation

1. Basis of presentation	6 Months Ended
	Jun. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of presentation	Note 1 – 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, these statements include all adjustments necessary for a fair presentation of the results of all interim periods reported herein. The consolidated financial statements and related notes should be read in conjunction with the consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019. Results of operations for interim periods are not necessarily indicative of the results to be expected for other interim periods or the full year. A detailed description of our significant accounting policies can be found in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019. 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, 2020
Accounting Policies [Abstract]
Significant Accounting Policies	Note 2 – 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 We sell food and beverage products across select product categories to customers predominantly within the United States (see Note 12, Segments, Products and Customers). We also sell bulk cream, a byproduct of our fluid milk manufacturing process. In accordance with ASC 606, Revenue from Contracts with Customers, we recognize revenue when control over the products transfers to our customers, which generally occurs upon delivery to our customers or their common carriers. The Company adopted this standard at the beginning of fiscal year 2018, with no significant impact to its financial position or results of operations, using the modified retrospective method. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for these goods or services, using the five-step method required by ASC 606. For the Company, the contract is the approved sales order, which may also be supplemented by other agreements that formalize various terms and conditions with customers. The Company applies judgment in determining the customer’s ability and intention to pay, which is based on a variety of factors including the customer’s historical payment experience or, in the case of a new customer, published credit and financial information pertaining to the customer. Performance obligations promised in a contract are identified based on the goods or services that will be transferred to the customer, which is the delivery of food products which provide immediate benefit to the customer. We account for product shipping and handling as fulfillment activities with revenues for these activities recorded within net revenue and costs recorded within cost of goods sold. Any taxes collected on behalf of government authorities are excluded from net revenues. Variable consideration, which typically includes volume-based rebates, known or expected pricing or revenue adjustments, such as trade discounts, allowances for non-saleable products, product returns, trade incentives and coupon redemption, is estimated utilizing the most likely amount method. Key sales terms, such as pricing and quantities ordered, are established on a frequent basis such that most customer arrangements and related incentives have a one year or shorter duration. As such, we do not capitalize contract inception costs and we capitalize product fulfillment costs in accordance with U.S. GAAP and our inventory policies. We do not have any significant deferred revenue or unbilled receivables at the end of a period. We generally do not receive noncash consideration for the sale of goods, nor do we grant payment financing terms greater than one year. Advertising and promotional costs Lifeway expenses advertising costs as incurred. For the six months ended June 30, 2020 and 2019 total advertising expenses were $1,320 and $1,864, respectively. For the three months ended June 30, 2020 and 2019 total advertising expenses were $784 and $776, respectively. Recent accounting pronouncements Issued but not yet effective In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The new guidance provides optional expedients and exceptions for applying generally accepted accounting principles (GAAP) to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The guidance is effective prospectively as of March 12, 2020 through December 31, 2022 and interim periods within those fiscal years. Management is currently evaluating the impact that the new guidance will have on the consolidated financial statements. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The new guidance is intended to enhance and simplify various aspects of the accounting for income taxes. The new guidance eliminates certain exceptions to the general approach to the income tax accounting model, and adds new guidance to reduce the complexity in accounting for income taxes. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, in November 2018 issued an amendment, ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments - Credit Losses, and in November 2019 issued two amendments, ASU 2019-10, Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates, and ASU 2019-11, Codification Improvements to Topic 326, Financial Instruments—Credit Losses. The series of new guidance amends the impairment model by requiring entities to use a forward-looking approach based on expected losses rather than incurred losses to estimate credit losses on certain types of financial instruments, including trade receivables. This may result in the earlier recognition of allowances for losses. The guidance should be applied on either a prospective transition or modified-retrospective approach depending on the subtopic. The guidance will be effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, with early adoption permitted. Management is currently evaluating the impact that the new guidance will have on the consolidated financial statements.

3. Inventories, net

3. Inventories, net	6 Months Ended
	Jun. 30, 2020
Inventory Disclosure [Abstract]
Inventories, net	Note 3 – Inventories, net Inventories consisted of the following: June 30, December 31, Ingredients $ 1,920 $ 1,942 Packaging 2,523 2,230 Finished goods 2,210 2,220 Total inventories $ 6,653 $ 6,392

4. Property, Plant and Equipmen

4. Property, Plant and Equipment, net	6 Months Ended
	Jun. 30, 2020
Property, Plant and Equipment [Abstract]
Property, Plant and Equipment	Note 4 – Property, Plant and Equipment, net Property, plant and equipment consisted of the following: June 30, December 31, Land $ 1,565 $ 1,565 Buildings and improvements 17,584 17,332 Machinery and equipment 30,911 30,670 Vehicles 778 778 Office equipment 849 851 Construction in process 254 362 51,941 51,558 Less accumulated depreciation (30,547 ) (29,284 ) Total property, plant and equipment, net $ 21,394 $ 22,274

5. Goodwill and Intangible Asse

5. Goodwill and Intangible Assets	6 Months Ended
	Jun. 30, 2020
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill and Intangible Assets	Note 5 – Goodwill and Intangible Assets Goodwill and indefinite-lived intangible assets consisted of the following: June 30, December 31, Gross goodwill $ 10,368 $ 10,368 Accumulated impairment losses (1,244 ) (1,244 ) Goodwill 9,124 9,124 Brand names 3,700 3,700 Goodwill and indefinite-lived intangible assets $ 12,824 $ 12,824 Finite-lived Intangible Assets Other intangible assets, net consisted of the following: June 30, December 31, 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 (8,170 ) (8,092 ) Other intangible assets, net $ 74 $ 152

6. Accrued Expenses

6. Accrued Expenses	6 Months Ended
	Jun. 30, 2020
Payables and Accruals [Abstract]
Accrued Expenses	Note 6 – Accrued Expenses Accrued expenses consisted of the following: June 30, December 31, 2019 Payroll and incentive compensation $ 2,221 $ 3,009 Current portion of operating lease liabilities 190 285 Real estate taxes 354 398 Other 301 395 Total accrued expenses $ 3,066 $ 4,087

7. Debt

7. Debt	6 Months Ended
	Jun. 30, 2020
Debt Disclosure [Abstract]
Debt	Note 7 – Debt Line of Credit On May 7, 2018, Lifeway entered into an Amended and Restated Loan and Security Agreement (the “Revolving Credit Facility”) with its existing lender. On April 10, 2019, effective March 31, 2019, Lifeway entered into the First Modification to the Amended and Restated Loan and Security Agreement (the “Modified Revolving Credit Facility”) with its existing lender. Under the amendment, the Modified Revolving Credit Facility provides for a revolving line of credit up to a maximum of $9 million (the “Revolving Loan”) with an incremental facility not to exceed $5 million (the “Incremental Facility” and together with the Revolving Loan, the “Loans”). As of June 30, 2020, we had $2,757 net of $20 of unamortized deferred financing costs, outstanding under the Revolving Credit Facility. We had approximately $6,223 available under the Borrowing Base for future borrowings as of June 30, 2020. As amended, all outstanding amounts under the Loans bear interest, based on a level of the Senior Debt to EBITDA ratio, at Lifeway’s election, at either the lender Base Rate (the greater of either the Federal Funds Rate plus 0.0% to 0.5%, or the Prime Rate) or the LIBOR plus 2.25% to 3.00%, payable monthly in arrears. Lifeway is also required to pay a quarterly unused line fee of 0.25% and, in conjunction with the issuance of any letters of credit, a letter of credit fee. Lifeway’s interest rate on debt outstanding under our Revolving Credit Facility as of June 30, 2020 was 2.43%. The commitment under the Revolving Credit Facility matures May 7, 2021. The Revolving Credit Facility is presented as a short-term debt obligation as of June 30, 2020. The Company intends to execute a new credit facility prior to the maturity date of its existing revolving credit facility. The Loans and all other amounts due and owed under the Revolving Credit Facility and related documents are secured by substantially all of our assets. Amounts available for borrowing under the Revolving Credit Facility equal the lesser of (i) the Borrowing Base (as defined below), or (ii) $9 million (plus the amount of any Incremental Facility requested by Lifeway and approved by lender), in each case, as the same is reduced by the aggregate principal amount outstanding under the Loans. On December 10, 2019, Lifeway entered into the Second Modification to the Amended and Restated Loan and Security Agreement, as amended, (the “Second Modification”) with its existing lender. The Second Modification amends the Amended and Restated Loan and Security Agreement, as amended, by redefining the “Borrowing Base” and further clarifying the definitions of “Eligible Accounts” and “Eligible Inventory.” The “Borrowing Base” under this amendment means, generally, an amount equal to the sum of (a) 85% of the unpaid amount of all eligible accounts receivable, plus (b) 50% of the value of all eligible inventory. The Second Modification also addresses the calculation of interest after the potential discontinuance of LIBOR and its replacement with a replacement benchmark interest rate. As amended, the Modified Revolving Credit Facility contains customary representations, warranties, and covenants on the part of Lifeway, including financial covenants requiring us to achieve a minimum EBITDA threshold for each of the fiscal quarters through December 31, 2019, and maintain a fixed charge coverage ratio of no less than 1.25 to 1.00 for each of the fiscal quarters ending through the expiration date. The Modified Revolving Credit Facility also provides for events of default, including failure to repay principal and interest when due and failure to perform or violation of the provisions or covenants of the agreement, as a result of which amounts due under the Modified Revolving Credit Facility may be accelerated. We were in compliance with the fixed charge coverage ratio covenant at June 30, 2020.

8. Leases

8. Leases	6 Months Ended
	Jun. 30, 2020
Leases [Abstract]
Leases	Note 8 – Leases Lifeway has operating leases for three retail stores for its Lifeway Kefir Shop subsidiary and office space which includes fixed base rent payments as well as variable rent payments to reimburse the landlord for operating expenses and taxes. The Company also leases certain machinery and equipment with fixed base rent payments and variable costs based on usage. Remaining lease terms for these leases range from less than 1 year to 5 years. Some of our leases include options to extend the leases for up to 5 years and have been included in our calculation of the right-of-use asset and lease liabilities. Lifeway includes only fixed payments for lease components in the measurement of the right-of-use asset and lease liability. Variable lease payments are those that vary because of changes in facts or circumstances occurring after the commencement date, other than the passage of time. There are no residual value guarantees. We do not currently have leases which meet the finance lease classification as defined under ASC 842. We do not record leases with an initial term of 12 months or less on the balance sheet. Expense for these short-term leases is recorded on a straight-line basis over the lease term. Total lease expense was $311 and $365 (including short term leases) for the six months ended June 30, 2020 and 2019, respectively. Total lease expense was $132 and $194 (including short term leases) for the three months ended June 30, 2020 and 2019, respectively. Lifeway treats contracts as a lease when the contract conveys the right to use a physically distinct asset for a period of time in exchange for consideration, we direct the use of the asset and obtain substantially all the economic benefits of the asset. Right-of-use assets and lease liabilities are measured and recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. We have elected the practical expedient to combine lease and non-lease components into a single component for all of our leases. For many of our leases such as real estate leases, we are unable to determine an implicit rate; therefore, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments for those leases. We include options to extend or terminate the lease in the measurement of the right-of-use asset and lease liability when it is reasonably certain that we will exercise such options. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Future maturities of lease liabilities were as follows Year Operating Leases Six months ended December 31, 2020 $ 109 2021 189 2022 145 2023 16 Thereafter 2 Total lease payments 461 Less: Interest (32 ) Present value of lease liabilities $ 429 The weighted-average remaining lease term for our operating leases was 2.24 years as of June 30, 2020. The weighted average discount rate of our operating leases was 5.75% as of June 30, 2020. Cash paid for amounts included in the measurement of lease liabilities was $272 and $292 the six months ended June 30, 2020 and 2019, respectively. Cash paid for amounts included in the measurement of lease liabilities was $130 and $145 for the three months ended June 30, 2020 and 2019, respectively.

9. Commitments And Contingencie

9. Commitments And Contingencies	6 Months Ended
	Jun. 30, 2020
Commitments and Contingencies Disclosure [Abstract]
Commitments And Contingencies	Note 9 – Commitments and contingencies Litigation Lifeway is engaged in various legal actions, claims, audits, and proceedings arising in the normal course of business, including commercial disputes, product liabilities, intellectual property matters and employment-related matters resulting from our business activities. We record accruals for outstanding legal matters when we believe it is probable that a loss will be incurred and the amount of such loss can be reasonably estimated. We evaluate, 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, we do not establish an accrued liability. Currently, none of our accruals for outstanding legal matters are material individually or in the aggregate to our 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 we ultimately are required to make payments in connection with an adverse outcome, it is possible that it could have a material adverse effect on our business, financial condition, results of operations or cash flows. Lifeway’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, Lifeway cannot predict with any reasonable certainty the timing or outcome of such contingencies, and we are unable to estimate a possible loss or range of loss.

10. Income taxes

10. Income taxes	6 Months Ended
	Jun. 30, 2020
Income Tax Disclosure [Abstract]
Income taxes	Note 10 – Income taxes For each interim period, Lifeway estimates the effective tax rate expected to be applicable for the full year and applies that rate to income before provision for income taxes for the period. The effective tax rate for the six months ended June 30, 2020 was 29.0% compared to (7.2%) for the six months ended June 30, 2019. The effective tax rate for the three months ended June 30, 2020 was 29.8% compared to 9.9% for the three months ended June 30, 2019. The change in the Company's effective tax rate for the three and six months ended June 30, 2020 compared to 2019 is primarily the result of a change in the amount of valuation allowance recorded against certain deferred tax assets and an increase in the amount of non-deductible executive compensation, partially offset by a benefit recognized in 2020 due to the enactment of the “Coronavirus Aid, Relief, and Economic Security Act” (the CARES Act). Our effective tax rate may change from period to period based on recurring and non-recurring factors including the relative mix of pre-tax earnings (or losses), the underlying income tax rates applicable to various state and local taxing jurisdictions, enacted tax legislation, settlement of tax audits, the impact of non-deductible items, changes in valuation allowances, and the expiration of the statute of limitations in relation to unrecognized tax benefits. We record discrete income tax items such as enacted tax rate changes and completed tax audits in the period in which they occur. On March 27, 2020, the “Coronavirus Aid, Relief, and Economic Security Act” (the CARES Act) was enacted. The CARES act features several tax provisions and other measures that assist businesses impacted by the economic effects of the COVID-19 pandemic. The significant tax provisions include an increase in the limitation of the tax deduction for interest expense from 30% to 50% of adjusted earnings in 2019 and 2020, a five-year carryback allowance for net operating losses generated in tax years 2018-2020, increased charitable contribution limitations to 25% of taxable income in 2020, and a retroactive technical correction to the 2017 Tax Cuts and Jobs Act that makes qualified improvement property placed in service after December 31, 2017 eligible for bonus depreciation. The Company has recorded a $245 income tax benefit related to the net operating loss carryback provisions of the CARES Act for the six months ended June 30, 2020. Unrecognized tax benefits were $92 and $63 at June 30, 2020 and 2019, respectively. The Company believes that an adequate provision has been made for any adjustments that may result from tax examinations. However, the outcome of tax audits cannot be predicted with certainty. If a tax audit is resolved in a manner inconsistent with its expectations, the Company could be required to adjust its provision for income taxes in the period such resolution occurs. We do not expect material changes to our unrecognized tax benefits during the next twelve months.

11. Stock-based and Other Compe

11. Stock-based and Other Compensation	6 Months Ended
	Jun. 30, 2020
Share-based Payment Arrangement [Abstract]
Stock-based Compensation	Note 11 – Stock-based and Other Compensation In December 2015, Lifeway stockholders 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 to qualifying employees. Under the Plan, the Board or its Audit and Corporate Governance Committee approves stock awards to executive officers and certain senior executives, generally in the form of restricted stock or performance shares. The number of performance shares that participants may earn depends on the extent to which the corresponding performance goals have been achieved. Stock awards generally vest over a three-year performance or service period. At June 30, 2020, 3.317 million shares remain available under the Omnibus Incentive Plan. While we plan to continue to issue awards pursuant to the Plan at least annually, we 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. Stock Options The following table summarizes stock option activity during the six months ended June 30, 2020: Options Weighted Weighted Aggregate Outstanding at December 31, 2019 41 $ 10.42 6.22 $ – Granted – – – – Exercised – – – – Forfeited – – – – Outstanding at June 30, 2020 41 $ 10.42 5.72 $ – Exercisable at June 30, 2020 41 $ 10.42 – $ – As of December 31, 2019, all outstanding options were vested and there was no remaining unearned compensation expense. For the six months and three months ended June 30, 2019, total pre-tax stock-based compensation expense recognized in the consolidated statements of operations was $0. For the six months and three months ended June 30, 2019, no tax-related benefits were recognized. Restricted Stock Awards A Restricted Stock Award (“RSA”) represents the right to receive one share of common stock in the future. RSAs have no exercise price. The grant date fair value of the awards is equal to our closing stock price on the grant date. The following table summarizes RSA activity during the six months ended June 30, 2020. RSA’s Outstanding at December 31, 2019 47 Granted – Shares issued upon vesting – Forfeited (12 ) Outstanding at June 30, 2020 35 Weighted average grant date fair value per share outstanding $ 4.34 We expense RSA’s over the service period. For the six months ended June 30, 2020 and 2019 total pre-tax stock-based compensation expense recognized in the consolidated statements of operations was $23 and $52, respectively. For the six months ended June 30, 2020 and 2019 tax-related benefits of $6 and $14, respectively, were also recognized. For the three months ended June 30, 2020 and 2019 total pre-tax stock-based compensation expense recognized in the consolidated statements of operations was $18 and $27, respectively. For the three months ended June 30, 2020 and 2019 tax-related benefits of $5 and $7, respectively, were also recognized. As of June 30, 2020, the total remaining unearned compensation related to non-vested RSA’s was $44, which is expected to be amortized over the weighted-average remaining service period of 1.20 years. Long-Term Incentive Plan Compensation Lifeway established long-term incentive-based compensation programs for fiscal year 2017 (the “2017 Plan”) and for fiscal year 2019 (the “2019 Plan”) for certain senior executives and key employees (the “participants”). Under the 2017 Plan, long-term incentive compensation is based on Lifeway’s achievement of certain sales and adjusted EBITDA performance levels versus respective targets established by the Board for the fiscal year. Under the 2019 Plan, long-term equity incentive compensation is based on Lifeway’s achievement of four strategic milestones over a three-year period from Fiscal 2019 through Fiscal 2021. 2017 Plan Under the 2017 Plan, collectively the participants had the opportunity to earn cash and equity-based incentive compensation in amounts ranging from $0 to $11,025 depending on Lifeway’s performance levels compared to the respective targets and the participants 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, 2020 and 2019, $49 and $180 was expensed under the 2017 Plan as stock-based compensation expense in the consolidated statements of operations, respectively. For the three months ended June 30, 2020 and 2019, $0 and $53 was expensed under the 2017 Plan as stock-based compensation expense in the consolidated statements of operations, respectively. As of March 31, 2020, there was no remaining expense under the 2017 plan. 2019 Plan Under the 2019 Plan, collectively the participants can earn equity-based incentive compensation in amounts ranging from $0 to $1,776 depending on Lifeway’s performance levels compared to the respective targets. The equity-based incentive compensation is payable in restricted stock that vests 50% of unvested shares in year one, 50% of unvested shares in year two, and 100% of remaining unvested shares in year three from the 2019 grant date. For the six months ended June 30, 2020 and 2019, $89 and $68 was expensed under the 2019 Plan as stock-based compensation expense in the consolidated statements of operations, respectively. For the three months ended June 30, 2020 and 2019, $76 and $33 was expensed under the 2019 Retention Award as stock-based compensation expense in the consolidated statements of operations, respectively. 2019 Retention Award During Q1 2019, we awarded a special retention grant (the “2019 Retention Award”) of restricted stock to certain senior executives and key employees (the “participants”). The equity-based incentive compensation is payable in restricted stock that vests one-third in March 2019, one-third in March 2020 and one-third in March 2021. For the six months ended June 30, 2020 and 2019, $58 and $211 was expensed under the 2020 Retention Award as stock-based compensation expense in the consolidated statements of operations, respectively. For the three months ended June 30, 2020 and 2019, $15 and $54 was expensed under the 2019 Retention Award as stock-based compensation expense in the consolidated statements of operations, respectively. As of June 30, 2020, the total remaining unearned compensation related to the 2019 Retention Award was $44, of which $30 and $14 is expected to be recognized in 2020 and 2021, respectively, subject to vesting. Retirement Benefits Lifeway has a defined contribution plan which is available to substantially all full-time employees. Under the terms of the plan, we match employee contributions under a prescribed formula. For the six months ended June 30, 2020 and 2019 total contribution expense recognized in the consolidated statements of operations was $214 and $181, respectively. For the three months ended June 30, 2020 and 2019 total contribution expense recognized in the consolidated statements of operations was $96 and $85, respectively.

12. Segments, Products and Cust

12. Segments, Products and Customers	6 Months Ended
	Jun. 30, 2020
Segment Reporting [Abstract]
Segments, Products and Customers	Note 12 – Segments, Products and Customers Lifeway’s primary product is drinkable kefir, a cultured dairy product. Lifeway Kefir is tart and tangy, high in protein, calcium and vitamin D. Thanks to our exclusive blend of kefir cultures, each cup of kefir contains 12 live and active cultures and 15 to 20 billion beneficial CFU (Colony Forming Units) at the time of manufacture. We manufacture (directly or through co-packers) our products under our own brand, as well as under private labels on behalf of certain customers. In addition to our core drinkable kefir products, we offer several lines of products developed through our innovation and development efforts. These include Kefir Cups, a strained, cupped version of our kefir; and Organic Farmer Cheese Cups, a cupped version of our soft cheeses, both served in resealable 5 oz. containers. We also offer Skyr, a strained cupped Icelandic yogurt; Plantiful, a plant-based probiotic beverage made from organic and non-GMO pea protein with 10 vegan kefir cultures; a line of probiotic supplements for adults and children; and a soft serve kefir mix. Our product categories are: · Drinkable Kefir, sold in a variety of organic and non-organic sizes, flavors, and types, including low fat, non-fat, whole milk, protein, and BioKefir (a 3.5 oz. kefir with additional probiotic cultures). · European-style soft cheeses, including farmer cheese in resealable cups. · Cream and other, which consists primarily of cream, a byproduct of making our kefir. · ProBugs, a line of kefir products designed for children. · Other Dairy, which includes Cupped Kefir and Icelandic Skyr, a line of strained kefir and yogurt products in resealable cups. · Frozen Kefir, available in soft serve and pint-size containers. Lifeway has determined that it has one reportable segment based on how our 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 our performance, has been identified collectively as the Chief Executive Officer, the Chief Operating Officer, the Chief Financial Officer, and Chairperson of the board of directors. Substantially all of our consolidated revenues relate to the sale of cultured dairy products that we produce using the same processes and materials and are sold to consumers through a common network of distributors and retailers in the United States. Net sales of products by category were as follows for the six months ended June 30: 2020 2019 $ % $ % Drinkable Kefir other than ProBugs $ 40,003 79% $ 36,613 77% Cheese 6,514 13% 5,557 11% Cream and other 1,432 3% 2,446 5% ProBugs Kefir 1,317 3% 1,460 3% Other dairy 808 1% 902 2% Frozen Kefir (a) 328 1% 790 2% Net Sales $ 50,402 100% $ 47,768 100% (a) Includes Lifeway Kefir Shop sales Net sales of products by category were as follows for the three months ended June 30: 2020 2019 $ % $ % Drinkable Kefir other than ProBugs $ 20,146 80% $ 17,727 76% Cheese 3,254 13% 2,706 12% Cream and other 651 3% 1,145 5% ProBugs Kefir 457 2% 697 3% Other dairy 437 2% 423 2% Frozen Kefir (a) 69 0% 455 2% Net Sales $ 25,014 100% $ 23,153 100% (a) Includes Lifeway Kefir Shop sales Significant Customers

13. Related party transactions

13. Related party transactions	6 Months Ended
	Jun. 30, 2020
Related Party Transactions [Abstract]
Related party transactions	Note 13 – Related Party Transactions Lifeway 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 operations and were $500 during each of the six months ended June 30, 2020 and 2019. Fees earned are included in general and administrative expenses in the accompanying consolidated statements of operations and were $250 during each of the three months ended June 30, 2020 and 2019. Lifeway is also a party to a royalty agreement with the Chairperson of its board of directors under which we pay the Chairperson a royalty based on the sale of certain Lifeway products, not to exceed $50 in any fiscal month. Royalties earned by the Chairperson are included in selling expenses in the accompanying consolidated statements of operations and were $300 and $298 during the six months ended June 30, 2020 and 2019, respectively. Royalties earned are included in selling expenses in the accompanying consolidated statements of operations and were $150 and $148 during the three months ended June 30, 2020 and 2019.

2. Significant Accounting Pol_2

2. Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 30, 2020
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 We sell food and beverage products across select product categories to customers predominantly within the United States (see Note 12, Segments, Products and Customers). We also sell bulk cream, a byproduct of our fluid milk manufacturing process. In accordance with ASC 606, Revenue from Contracts with Customers, we recognize revenue when control over the products transfers to our customers, which generally occurs upon delivery to our customers or their common carriers. The Company adopted this standard at the beginning of fiscal year 2018, with no significant impact to its financial position or results of operations, using the modified retrospective method. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for these goods or services, using the five-step method required by ASC 606. For the Company, the contract is the approved sales order, which may also be supplemented by other agreements that formalize various terms and conditions with customers. The Company applies judgment in determining the customer’s ability and intention to pay, which is based on a variety of factors including the customer’s historical payment experience or, in the case of a new customer, published credit and financial information pertaining to the customer. Performance obligations promised in a contract are identified based on the goods or services that will be transferred to the customer, which is the delivery of food products which provide immediate benefit to the customer. We account for product shipping and handling as fulfillment activities with revenues for these activities recorded within net revenue and costs recorded within cost of goods sold. Any taxes collected on behalf of government authorities are excluded from net revenues. Variable consideration, which typically includes volume-based rebates, known or expected pricing or revenue adjustments, such as trade discounts, allowances for non-saleable products, product returns, trade incentives and coupon redemption, is estimated utilizing the most likely amount method. Key sales terms, such as pricing and quantities ordered, are established on a frequent basis such that most customer arrangements and related incentives have a one year or shorter duration. As such, we do not capitalize contract inception costs and we capitalize product fulfillment costs in accordance with U.S. GAAP and our inventory policies. We do not have any significant deferred revenue or unbilled receivables at the end of a period. We generally do not receive noncash consideration for the sale of goods, nor do we grant payment financing terms greater than one year.
Advertising and promotional costs	Advertising and promotional costs Lifeway expenses advertising costs as incurred. For the six months ended June 30, 2020 and 2019 total advertising expenses were $1,320 and $1,864, respectively. For the three months ended June 30, 2020 and 2019 total advertising expenses were $784 and $776, respectively.
Recently Accounting Pronouncements	Recent accounting pronouncements Issued but not yet effective In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The new guidance provides optional expedients and exceptions for applying generally accepted accounting principles (GAAP) to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The guidance is effective prospectively as of March 12, 2020 through December 31, 2022 and interim periods within those fiscal years. Management is currently evaluating the impact that the new guidance will have on the consolidated financial statements. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The new guidance is intended to enhance and simplify various aspects of the accounting for income taxes. The new guidance eliminates certain exceptions to the general approach to the income tax accounting model, and adds new guidance to reduce the complexity in accounting for income taxes. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, in November 2018 issued an amendment, ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments - Credit Losses, and in November 2019 issued two amendments, ASU 2019-10, Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates, and ASU 2019-11, Codification Improvements to Topic 326, Financial Instruments—Credit Losses. The series of new guidance amends the impairment model by requiring entities to use a forward-looking approach based on expected losses rather than incurred losses to estimate credit losses on certain types of financial instruments, including trade receivables. This may result in the earlier recognition of allowances for losses. The guidance should be applied on either a prospective transition or modified-retrospective approach depending on the subtopic. The guidance will be effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, with early adoption permitted. Management is currently evaluating the impact that the new guidance will have on the consolidated financial statements.

3. Inventories, net (Tables)

3. Inventories, net (Tables)	6 Months Ended
	Jun. 30, 2020
Inventory Disclosure [Abstract]
Schedule Of Inventories	June 30, December 31, Ingredients $ 1,920 $ 1,942 Packaging 2,523 2,230 Finished goods 2,210 2,220 Total inventories $ 6,653 $ 6,392

4. Property, Plant and Equipm_2

4. Property, Plant and Equipment, net (Tables)	6 Months Ended
	Jun. 30, 2020
Property, Plant and Equipment [Abstract]
Schedule of property, plant and equipment	June 30, December 31, Land $ 1,565 $ 1,565 Buildings and improvements 17,584 17,332 Machinery and equipment 30,911 30,670 Vehicles 778 778 Office equipment 849 851 Construction in process 254 362 51,941 51,558 Less accumulated depreciation (30,547 ) (29,284 ) Total property, plant and equipment, net $ 21,394 $ 22,274

5. Goodwill and Intangible As_2

5. Goodwill and Intangible Assets (Tables)	6 Months Ended
	Jun. 30, 2020
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill & indefinite-lived intangible assets	June 30, December 31, Gross goodwill $ 10,368 $ 10,368 Accumulated impairment losses (1,244 ) (1,244 ) Goodwill 9,124 9,124 Brand names 3,700 3,700 Goodwill and indefinite-lived intangible assets $ 12,824 $ 12,824
Schedule of other intangible assets	June 30, December 31, 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 (8,170 ) (8,092 ) Other intangible assets, net $ 74 $ 152

6. Accrued Expenses (Tables)

6. Accrued Expenses (Tables)	6 Months Ended
	Jun. 30, 2020
Payables and Accruals [Abstract]
Schedule Of Accrued Expenses	June 30, December 31, 2019 Payroll and incentive compensation $ 2,221 $ 3,009 Current portion of operating lease liabilities 190 285 Real estate taxes 354 398 Other 301 395 Total accrued expenses $ 3,066 $ 4,087

8. Leases (Tables)

8. Leases (Tables)	6 Months Ended
	Jun. 30, 2020
Leases [Abstract]
Future maturities of lease liabilities	Year Operating Leases Six months ended December 31, 2020 $ 109 2021 189 2022 145 2023 16 Thereafter 2 Total lease payments 461 Less: Interest (32 ) Present value of lease liabilities $ 429

11. Stock-based and Other Com_2

11. Stock-based and Other Compensation (Tables)	6 Months Ended
	Jun. 30, 2020
Share-based Payment Arrangement [Abstract]
Stock option activity table	Options Weighted Weighted Aggregate Outstanding at December 31, 2019 41 $ 10.42 6.22 $ – Granted – – – – Exercised – – – – Forfeited – – – – Outstanding at June 30, 2020 41 $ 10.42 5.72 $ – Exercisable at June 30, 2020 41 $ 10.42 – $ –
RSA activity table	RSA’s Outstanding at December 31, 2019 47 Granted – Shares issued upon vesting – Forfeited (12 ) Outstanding at June 30, 2020 35 Weighted average grant date fair value per share outstanding $ 4.34

12. Segments, Products and Cu_2

12. Segments, Products and Customers (Tables)	6 Months Ended
	Jun. 30, 2020
Segment Reporting [Abstract]
Schedule of sales of products by category	Net sales of products by category were as follows for the six months ended June 30: 2020 2019 $ % $ % Drinkable Kefir other than ProBugs $ 40,003 79% $ 36,613 77% Cheese 6,514 13% 5,557 11% Cream and other 1,432 3% 2,446 5% ProBugs Kefir 1,317 3% 1,460 3% Other dairy 808 1% 902 2% Frozen Kefir (a) 328 1% 790 2% Net Sales $ 50,402 100% $ 47,768 100% (a) Includes Lifeway Kefir Shop sales Net sales of products by category were as follows for the three months ended June 30: 2020 2019 $ % $ % Drinkable Kefir other than ProBugs $ 20,146 80% $ 17,727 76% Cheese 3,254 13% 2,706 12% Cream and other 651 3% 1,145 5% ProBugs Kefir 457 2% 697 3% Other dairy 437 2% 423 2% Frozen Kefir (a) 69 0% 455 2% Net Sales $ 25,014 100% $ 23,153 100% (a) Includes Lifeway Kefir Shop sales

2. Summary Of Significant Accou

2. Summary Of Significant Accounting Policies (Details Narrative) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Accounting Policies [Abstract]
Advertising expenses	$ 784	$ 776	$ 1,320	$ 1,864

3. Inventories, net (Details)

3. Inventories, net (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Inventory Disclosure [Abstract]
Ingredients	$ 1,920	$ 1,942
Packaging	2,523	2,230
Finished goods	2,210	2,220
Total inventories, net	$ 6,653	$ 6,392

4. Property, Plant and Equipm_3

4. Property, Plant and Equipment, net (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Property and equipment, gross	$ 51,941	$ 51,558
Less accumulated depreciation	(30,547)	(29,284)
Total property, plant and equipment, net	21,394	22,274
Land [Member]
Property and equipment, gross	1,565	1,565
Buildings And improvements [Member]
Property and equipment, gross	17,584	17,332
Machinery And Equipment [Member]
Property and equipment, gross	30,911	30,670
Vehicles [Member]
Property and equipment, gross	778	778
Office Equipment [Member]
Property and equipment, gross	849	851
Construction In Progress [Member]
Property and equipment, gross	$ 254	$ 362

5. Goodwill and Intangible As_3

5. Goodwill and Intangible Assets (Details - Indefinite assets) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Goodwill and Intangible Assets Disclosure [Abstract]
Gross goodwill	$ 10,368	$ 10,368
Accumulated impairment loss	(1,244)	(1,244)
Goodwill	9,124	9,124
Brand names	3,700	3,700
Goodwill & indefinite lived intangible assets	$ 12,824	$ 12,824

5. Goodwill and Intangible As_4

5. Goodwill and Intangible Assets (Details - Finite lived) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Cost	$ 8,244	$ 8,244
Accumulated Amortization	(8,170)	(8,092)
Other Intangible assets, net	74	152
Recipes [Member]
Cost	44	44
Customer Lists And Other Customer Related Intangibles [Member]
Cost	4,529	4,529
Customer Relationships [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, 2020	Dec. 31, 2019
Payables and Accruals [Abstract]
Payroll and incentive compensation	$ 2,221	$ 3,009
Current portion of operating lease liabilities	190	285
Real estate taxes	354	398
Other	301	395
Total accrued expenses	$ 3,066	$ 4,087

7. Debt (Details Narrative)

7. Debt (Details Narrative) - Revolving Credit Facility [Member] - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2020	May 07, 2018
Line of credit balance	$ 2,757
Unamortized financing costs	20
Line of credit available	$ 6,223
Credit line effective interest rate	2.43%
Credit line expiration date	May 7, 2021
Revolving Loan [Member]
Revolving credit facility maximum borrowing capacity		$ 9,000
Incremental Facility [Member]
Revolving credit facility maximum borrowing capacity		$ 5,000

8. Leases (Details)

8. Leases (Details) $ in Thousands	Jun. 30, 2020USD ($)
Leases [Abstract]
Six months ended December 31, 2020	$ 109
2021	189
2022	145
2023	16
Thereafter	2
Total Lease payments	461
Less: Interest	(32)
Present value of lease liabilities	$ 429

8. Leases (Details Narrative)

8. Leases (Details Narrative) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Leases [Abstract]
Lease expense	$ 132	$ 194	$ 311	$ 365
Weighted average remaining lease term	2 years 2 months 27 days		2 years 2 months 27 days
Weighted average discount rate	5.75%		5.75%
Operating lease cost	$ 130	$ 145	$ 272	$ 292

10. Income taxes (Details Narra

10. Income taxes (Details Narrative) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Income Tax Disclosure [Abstract]
Effective income tax rate	29.80%	9.90%	29.00%	7.20%
Income tax benefit due to CARES Act			$ 245
Unrecognized tax benefits	$ 92	$ 63	$ 92	$ 63

11. Stock-based Compensation (D

11. Stock-based Compensation (Details - Option Activity) - Options [Member] - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2020	Dec. 31, 2019
Options outstanding, beginning balance	41
Options outstanding, ending balance	41	41
Weighted average exercise price, options outstanding, beginning balance	$ 10.42
Weighted average exercise price, options outstanding, ending balance	$ 10.42	$ 10.42
Weighted average remaining contractural life, outstanding	5 years 8 months 19 days	6 years 2 months 19 days
Aggregate intrinsic value, options outstanding	$ 0
Aggregate intrinsic value, options exercisable	$ 0

11. Stock-based Compensation _2

11. Stock-based Compensation (Details - RSA Activity) - Restricted Stock Awards [Member] shares in Thousands	6 Months Ended
	Jun. 30, 2020$ / sharesshares
RSA's outstanding, beginning balance	47
RSA's forfeited	(12)
RSA's outstanding, ending balance	35
Weighted average grant date fair value per share | $ / shares	$ 4.34

11. Stock-based Compensation _3

11. Stock-based Compensation (Details Narrative) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Unearned compensation related to non-vested stock options					$ 0
Unearned compensation related to non-vested RSA's					$ 0
Options [Member]
Share-based compensation		$ 0		$ 0
Tax-related benefits		0		0
Restricted Stock Awards [Member]
Share-based compensation	$ 18	27	$ 23	52
Tax-related benefits	5	7	6	14
Unearned compensation related to non-vested RSA's	44		$ 44
Weighted average period for unrecognized compensation			1 year 3 months
2019 Retention Award [Member]
Share-based compensation	15	54	$ 58	211
Unearned compensation related to non-vested stock options	44		44
Compensation expense expected in 2020	30		30
Compensation expense expected in 2021	$ 14		$ 14
2015 Omnibus Incentive Plan [Member]
Stock authorized for issuance	3,500		3,500
Shares available for issuance	3,317		3,317
2017 Plan [Member]
Share-based compensation	$ 0	53	$ 49	180
Unearned compensation related to non-vested stock options	0		0
2019 Plan [Member]
Share-based compensation	76	33	89	68
Defined Contribution Plan [Member]
Contribution expense	$ 96	$ 85	$ 214	$ 181

12. Segments, Products and Cu_3

12. Segments, Products and Customers (Details) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Total sales		$ 25,014	$ 23,153	$ 50,402	$ 47,768
Total sales percentage				100.00%	100.00%
Drinkable Kefir Other Than ProBugs [Member]
Total sales		$ 20,146	$ 17,727	$ 40,003	$ 36,613
Total sales percentage		80.00%	76.00%	79.00%	77.00%
Cheese [Member]
Total sales		$ 3,254	$ 2,706	$ 6,514	$ 5,557
Total sales percentage		13.00%	12.00%	13.00%	11.00%
Cream and Other [Member]
Total sales		$ 651	$ 1,145	$ 1,432	$ 2,446
Total sales percentage		3.00%	5.00%	3.00%	5.00%
ProBugs Kefir [Member]
Total sales		$ 457	$ 697	$ 1,317	$ 1,460
Total sales percentage		2.00%	3.00%	3.00%	3.00%
Other Dairy [Member]
Total sales		$ 437	$ 423	$ 808	$ 902
Total sales percentage		2.00%	2.00%	1.00%	2.00%
Frozen Kefir [Member]
Total sales	[1]	$ 69	$ 455	$ 328	$ 790
Total sales percentage	[1]	0.00%	2.00%	1.00%	2.00%
[1]	Includes Lifeway Kefir Shop sales

12. Segments, Products and Cu_4

12. Segments, Products and Customers (Details Narrative)	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Concentration percentage			100.00%	100.00%
Sales Revenue, Net [Member] | Two Customers [Member]
Concentration percentage	21.00%	22.00%	21.00%	22.00%

14. Related party transactions

14. Related party transactions (Details Narrative) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Related Party Transactions [Abstract]
Consulting fees	$ 250	$ 250	$ 500	$ 500
Royalty expense	$ 150	$ 148	$ 300	$ 298