Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2021 | Aug. 10, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jun. 30, 2021 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2021 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 000-17363 | |
Entity Registrant Name | LIFEWAY FOODS, INC. | |
Entity Central Index Key | 0000814586 | |
Entity Tax Identification Number | 36-3442829 | |
Entity Incorporation, State or Country Code | IL | |
Entity Address, Address Line One | 6431 West Oakton | |
Entity Address, City or Town | Morton Grove | |
Entity Address, State or Province | IL | |
Entity Address, Postal Zip Code | 60053 | |
City Area Code | (847) | |
Local Phone Number | 967-1010 | |
Title of 12(b) Security | Common Stock, no par value | |
Trading Symbol | LWAY | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 15,399,842 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Current assets | ||
Cash and cash equivalents | $ 10,412 | $ 7,926 |
Accounts receivable, net of allowance for doubtful accounts and discounts & allowances of $1,190 and $1,350 at June 30, 2021 and December 31, 2020 respectively | 9,157 | 8,002 |
Inventories, net | 7,291 | 6,930 |
Prepaid expenses and other current assets | 908 | 1,163 |
Refundable income taxes | 354 | 31 |
Total current assets | 28,122 | 24,052 |
Property, plant and equipment, net | 20,671 | 21,048 |
Operating lease right-of-use asset | 226 | 345 |
Intangible assets | ||
Goodwill and indefinite-lived intangibles | 12,824 | 12,824 |
Other intangible assets, net | 0 | 0 |
Total intangible assets | 12,824 | 12,824 |
Other assets | 1,800 | 1,800 |
Total assets | 63,643 | 60,069 |
Current liabilities | ||
Accounts payable | 5,285 | 5,592 |
Accrued expenses | 3,587 | 2,196 |
Accrued income taxes | 106 | 653 |
Total current liabilities | 8,978 | 8,441 |
Line of credit | 2,777 | 2,768 |
Operating lease liabilities | 107 | 165 |
Deferred income taxes, net | 1,764 | 1,764 |
Other long-term liabilities | 12 | 77 |
Total liabilities | 13,638 | 13,215 |
Commitments and contingencies | ||
Stockholders' equity | ||
Preferred stock, no par value; 2,500 shares authorized; no shares issued or outstanding at June 30, 2021 and December 31, 2020 | 0 | 0 |
Common stock, no par value; 40,000 shares authorized; 17,274 shares issued; 15,650 and 15,604 outstanding at June 30, 2021 and December 31, 2020, respectively | 6,509 | 6,509 |
Paid-in capital | 2,488 | 2,600 |
Treasury stock, at cost | (12,111) | (12,450) |
Retained earnings | 53,119 | 50,195 |
Total stockholders' equity | 50,005 | 46,854 |
Total liabilities and stockholders' equity | $ 63,643 | $ 60,069 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) shares in Thousands, $ / shares in Thousands, $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts and discounts | $ 1,190 | $ 1,350 |
Preferred stock, no par value | $ 0 | $ 0 |
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 | $ 0 | $ 0 |
Common stock, shares authorized | 40,000 | 40,000 |
Common stock, shares issued | 17,274 | 17,274 |
Common stock, shares outstanding | 15,650 | 15,604 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Income Statement [Abstract] | ||||
Net sales | $ 29,162 | $ 25,014 | $ 58,538 | $ 50,402 |
Cost of goods sold | 20,846 | 17,279 | 41,358 | 35,903 |
Depreciation expense | 639 | 807 | 1,454 | 1,574 |
Total cost of goods sold | 21,485 | 18,086 | 42,812 | 37,477 |
Gross profit | 7,677 | 6,928 | 15,726 | 12,925 |
Selling expenses | 2,566 | 2,720 | 5,788 | 5,295 |
General and administrative | 2,617 | 2,731 | 5,508 | 5,876 |
Amortization expense | 0 | 39 | 0 | 78 |
Total operating expenses | 5,183 | 5,490 | 11,296 | 11,249 |
Income from operations | 2,494 | 1,438 | 4,430 | 1,676 |
Other income (expense): | ||||
Interest expense | (20) | (30) | (42) | (69) |
Gain on investments | 0 | 4 | 2 | 4 |
Loss on sale of property and equipment | (76) | (33) | (83) | (28) |
Other (expense) income, net | (49) | 5 | (59) | 2 |
Total other income (expense) | (145) | (54) | (182) | (91) |
Income before provision for income taxes | 2,349 | 1,384 | 4,248 | 1,585 |
Provision for income taxes | 731 | 404 | 1,324 | 459 |
Net income | $ 1,618 | $ 980 | $ 2,924 | $ 1,126 |
Earnings (loss) per common share: | ||||
Basic | $ 0.10 | $ 0.06 | $ 0.19 | $ 0.07 |
Diluted | $ 0.10 | $ 0.06 | $ 0.19 | $ 0.07 |
Weighted average common shares: | ||||
Basic | 15,639 | 15,560 | 15,622 | 15,591 |
Diluted | 15,793 | 15,586 | 15,772 | 15,607 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) shares in Thousands, $ in Thousands | Common Stock Issued [Member] | Treasury Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Beginning balance, value at Dec. 31, 2019 | $ 6,509 | $ (12,601) | $ 2,380 | $ 46,963 | $ 43,251 |
Beginning Balance, shares at Dec. 31, 2019 | 17,274 | (1,564) | |||
Issuance of common stock in connection with stock-based compensation | $ 210 | 306 | 516 | ||
Issuance of common stock in connection with stock-based compensation, Shares | 27 | ||||
Treasury stock purchased | $ (405) | (405) | |||
Treasury stock purchased, Shares | (179) | ||||
Stock-based compensation | 62 | 62 | |||
Net income | 146 | 146 | |||
Ending balance, value at Mar. 31, 2020 | $ 6,509 | $ (12,796) | 2,748 | 47,109 | 43,570 |
Ending Balance, shares at Mar. 31, 2020 | 17,274 | (1,716) | |||
Issuance of common stock in connection with stock-based compensation | $ 248 | (270) | (22) | ||
Issuance of common stock in connection with stock-based compensation, Shares | 34 | ||||
Stock-based compensation | 109 | 109 | |||
Net income | 980 | 980 | |||
Ending balance, value at Jun. 30, 2020 | $ 6,509 | $ (12,548) | 2,587 | 48,089 | 44,637 |
Ending Balance, shares at Jun. 30, 2020 | 17,274 | (1,682) | |||
Beginning balance, value at Dec. 31, 2020 | $ 6,509 | $ (12,450) | 2,600 | 50,195 | 46,854 |
Beginning Balance, shares at Dec. 31, 2020 | 17,274 | (1,669) | |||
Stock-based compensation | 64 | 64 | |||
Net income | 1,306 | 1,306 | |||
Ending balance, value at Mar. 31, 2021 | $ 6,509 | $ (12,450) | 2,664 | 51,501 | 48,224 |
Ending Balance, shares at Mar. 31, 2021 | 17,274 | (1,669) | |||
Issuance of common stock in connection with stock-based compensation | $ 339 | (463) | (124) | ||
Issuance of common stock in connection with stock-based compensation, Shares | 45 | ||||
Stock-based compensation | 287 | 287 | |||
Net income | 1,618 | 1,618 | |||
Ending balance, value at Jun. 30, 2021 | $ 6,509 | $ (12,111) | $ 2,488 | $ 53,119 | $ 50,005 |
Ending Balance, shares at Jun. 30, 2021 | 17,274 | (1,624) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Cash flows from operating activities: | ||
Net income | $ 2,924 | $ 1,126 |
Adjustments to reconcile net income to operating cash flow: | ||
Depreciation and amortization | 1,454 | 1,652 |
Non-cash interest expense | 9 | 12 |
Non-cash rent expense | 51 | (38) |
Bad debt expense | (1) | (4) |
Deferred revenue | (15) | (48) |
Stock-based compensation | 301 | 232 |
Deferred income taxes | 0 | 369 |
Loss (gain) on sale of property and equipment | 83 | 28 |
(Increase) decrease in operating assets: | ||
Accounts receivable | (1,154) | (1,041) |
Inventories | (361) | (262) |
Refundable income taxes | (323) | 65 |
Prepaid expenses and other current assets | 255 | 502 |
Increase (decrease) in operating liabilities: | ||
Accounts payable | (305) | (172) |
Accrued expenses | 1,276 | (448) |
Accrued income taxes | (547) | (62) |
Net cash provided by operating activities | 3,647 | 1,911 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (1,161) | (728) |
Proceeds from sale of property and equipment | 0 | 5 |
Net cash used in investing activities | (1,161) | (723) |
Cash flows from financing activities: | ||
Purchase of treasury stock | 0 | (405) |
Net cash used in financing activities | 0 | (405) |
Net increase in cash and cash equivalents | 2,486 | 783 |
Cash and cash equivalents at the beginning of the period | 7,926 | 3,836 |
Cash and cash equivalents at the end of the period | 10,412 | 4,619 |
Supplemental cash flow information: | ||
Cash paid for income taxes, net of (refunds) | 2,194 | 82 |
Cash paid for interest | 33 | 61 |
Non-cash investing activities | ||
Increase (decrease) in right-of-use assets and operating lease obligations | 27 | (58) |
Non-cash financing activities | ||
Issuance of common stock under equity incentive plans | $ 0 | $ 522 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2021 | |
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, 2020. 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, 2020. 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. |
Significant Accounting Policies
Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2021 | |
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 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, 2021 and 2020 total advertising expenses were $ 2,166 1,320 773 784 Recent accounting pronouncements Adopted In December 2019, the FASB issued Accounting Standards Update (“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. The Company adopted this guidance on January 1, 2021. The adoption of this standard did not have a material impact on our consolidated financial statements and disclosures. Issued but not yet effective In March 2020, the FASB issued Accounting Standards Update (“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 will be 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 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 is effective for annual periods 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. |
Inventories, net
Inventories, net | 6 Months Ended |
Jun. 30, 2021 | |
Inventory Disclosure [Abstract] | |
Inventories, net | Note 3 – Inventories, net Inventories consisted of the following: Schedule Of Inventories June 30, December 31, Ingredients $ 1,862 $ 1,725 Packaging 2,479 2,234 Finished goods 2,950 2,971 Total inventories $ 7,291 $ 6,930 |
Property, Plant and Equipment,
Property, Plant and Equipment, net | 6 Months Ended |
Jun. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment, net | Note 4 – Property, Plant and Equipment, net Property, plant and equipment consisted of the following: Schedule of property, plant and equipment June 30, December 31, Land $ 1,565 $ 1,565 Buildings and improvements 17,795 17,834 Machinery and equipment 31,723 31,707 Vehicles 778 778 Office equipment 862 857 Construction in process 440 228 53,163 52,969 Less accumulated depreciation (32,492 ) (31,921 ) Total property, plant and equipment, net $ 20,671 $ 21,048 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 6 Months Ended |
Jun. 30, 2021 | |
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: 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 Finite-lived Intangible Assets Other intangible assets, net consisted of the following: 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 (8,244 ) (8,244 ) Other intangible assets, net $ – $ – |
Accrued Expenses
Accrued Expenses | 6 Months Ended |
Jun. 30, 2021 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Note 6 – Accrued Expenses Accrued expenses consisted of the following: Schedule Of Accrued Expenses June 30, December 31, 2020 Payroll and incentive compensation $ 2,722 $ 1,366 Real estate taxes 382 341 Current portion of operating lease liabilities 169 179 Other 314 310 Total accrued expenses $ 3,587 $ 2,196 |
Debt
Debt | 6 Months Ended |
Jun. 30, 2021 | |
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 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. On September 30, 2020, Lifeway entered into the Third Modification to the Amended and Restated Loan and Security Agreement, as amended, (the “Third Modification”) with its existing lender. The Third Modification amends the Amended and Restated Loan and Security Agreement, as amended, by removing the monthly borrowing base reporting requirement effective September 30, 2020, including a covenant to maintain a quarterly minimum working capital financial covenant, as defined, of no less than $11.25 million each of the fiscal quarters commencing the fiscal quarter ending December 31, 2020 through the expiration date, and eliminating the tier interest pricing structure. The Amended and Restated Loan and Security Agreement continues to provide Lifeway with a revolving line of credit up to a maximum of $ 5 5 June 30, 2025 Except as described above, as amended, the Modified Revolving Credit Facility remains substantively unchanged and in full force and effect, including customary representations, warranties, and covenants on the part of Lifeway, including financial covenants requiring us to maintain a fixed charge coverage ratio of no less than 1.25 to 1.00 each of the fiscal quarters ending through the expiration date. The Modified Revolving Credit Facility continues to provide 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. 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. As of June 30, 2021, we had $ 2,777 2,223 As amended, all outstanding amounts under the Loans bear interest, at Lifeway’s election, at either the lender Base Rate (the Prime Rate minus 1.00%) or the LIBOR plus 1.95%, payable monthly in arrears. Lifeway is also required to pay a quarterly unused line fee of 0.20% and, in conjunction with the issuance of any letters of credit, a letter of credit fee of 0.20%. Lifeway’s interest rate on debt outstanding under our Revolving Credit Facility as of June 30, 2021 was 2.15 We were in compliance with the fixed charge coverage ratio and minimum working capital covenants at June 30, 2021. |
Leases
Leases | 6 Months Ended |
Jun. 30, 2021 | |
Leases [Abstract] | |
Leases | Note 8 – Leases Lifeway has operating leases for two retail stores for its Lifeway Kefir Shop subsidiary which includes fixed base rent payments as well as variable rent payments to reimburse the landlord for operating expenses and taxes. The Company terminated its office space leases in June 2020. 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 4 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 $ 169 311 91 132 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 its 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: Future maturities of lease liabilities Year Operating Leases Six months ended December 31, 2021 $ 97 2022 162 2023 24 2024 7 2025 5 Thereafter 2 Total lease payments 297 Less: Interest (21 ) Present value of lease liabilities $ 276 The weighted-average remaining lease term for our operating leases was 1.87 7.84 107 272 52 130 |
Commitments and contingencies
Commitments and contingencies | 6 Months Ended |
Jun. 30, 2021 | |
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. |
Income taxes
Income taxes | 6 Months Ended |
Jun. 30, 2021 | |
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, 2021 was 31.2 29.0 31.1 29.8 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 Unrecognized tax benefits were $ 97 92 |
Stock-based and Other Compensat
Stock-based and Other Compensation | 6 Months Ended |
Jun. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Stock-based and Other 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 3.281 Stock Options The following table summarizes stock option activity during the six months ended June 30, 2021: Stock option activity table Options Weighted Weighted Aggregate Outstanding at December 31, 2020 41 $ 10.42 5.22 $ – Granted – – – – Exercised – – – – Forfeited – – – – Outstanding at June 30, 2021 41 $ 10.42 4.72 $ – Exercisable at June 30, 2021 41 $ 10.42 4.72 $ – As of December 31, 2019, all outstanding options were vested and there was no remaining unearned compensation expense. 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 three months ended June 30, 2021. RSA activity table RSA’s Outstanding at December 31, 2020 78 Granted 4 Shares issued upon vesting (8 ) Forfeited – Outstanding at June 30, 2021 74 Weighted average grant date fair value per share outstanding $ 2.86 We expense RSA’s over the service period. For the six months ended June 30, 2021 and 2020 total pre-tax stock-based compensation expense recognized in the consolidated statements of operations was $ 69 23 20 6 33 18 9 5 76 1.18 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 each 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, 2021 and 2020, $ 0 49 0 no 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, 2021 and 2020, $ 54 89 35 76 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, 2021 and 2020, $ 8 58 0 15 no 2020 CEO Incentive Award During the fourth quarter 2020, we awarded a long-term equity-based incentive of $750 to our Chief Executive Officer (the “2020 CEO Award”) depending on Lifeways 2020 performance levels compared to the respective targets. The equity-based incentive compensation is payable in restricted stock that vests one-third in April 2022, one-third in April 2023, and one-third in April 2024. The issuance of vested equity awards is subject to approval under the Stock Purchase Agreement dated October 1, 1999. For the six months ended June 30, 2021 and 2020, $ 170 0 80 0 537 175 232 106 24 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, 2021 and 2020 total contribution expense recognized in the consolidated statements of operations was $ 218 214 105 96 |
Segments, Products and Customer
Segments, Products and Customers | 6 Months Ended |
Jun. 30, 2021 | |
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 25 to 30 billion beneficial CFU (Colony Forming Units) at the time of manufacture. We manufacture (directly or through co-packers) and market products under the Lifeway and Fresh Made brand names, as well as under private labels on behalf of certain customers. 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, white cheese, and Sweet Kiss. · 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 Financial Officer, the Chief Operating Officer, the Chief Executive 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: Schedule of sales of products by category 2021 2020 $ % $ % Drinkable Kefir other than ProBugs $ 48,373 82% $ 40,003 79% Cheese 6,221 11% 6,514 13% Cream and other 1,691 3% 1,432 3% ProBugs Kefir 1,431 2% 1,317 3% Other dairy 698 1% 808 1% Frozen Kefir (a) 124 1% 328 1% Net Sales $ 58,538 100% $ 50,402 100% (a) Includes Lifeway Kefir Shop sales Net sales of products by category were as follows for the three months ended June 30: 2021 2020 $ % $ % Drinkable Kefir other than ProBugs $ 24,170 82% $ 20,146 80% Cheese 3,022 11% 3,254 13% Cream and other 828 3% 651 3% ProBugs Kefir 751 2% 457 2% Other dairy 314 1% 437 2% Frozen Kefir (a) 77 1% 69 0% Net Sales $ 29,162 100% $ 25,014 100% (a) Includes Lifeway Kefir Shop sales Significant Customers 22 21 23 21 |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 13 – Related Party Transactions Lifeway obtains consulting services from the Chairperson of its board of directors. On December 28, 2020, Lifeway entered into an amended and restated consulting agreement (the “Agreement”), effective as of December 31, 2020, with the Chairperson. Under the terms and conditions of the Agreement, the Chairperson will continue to provide consulting services with respect to, among other things, our business strategy, international expansion and product management and expansion. For the services, the Company will pay an annual service fee of $500. The Chairperson will also be eligible for an annual performance fee target of $500 based on the achievement of specified performance criteria. The Chairpersons annual service fee and target bonus amounts are subject to periodic change by the Compensation Committee of the Company’s Board of Directors on 30 days’ prior written notice to the Chairperson. The Agreement shall continue until either party provides at least a 10-day written notice of termination. Service fees earned by the Chairperson are included in general and administrative expenses in the accompanying consolidated statements of operations and were $ 250 500 125 250 188 94 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 $ 300 150 |
COVID-19
COVID-19 | 6 Months Ended |
Jun. 30, 2021 | |
Covid-19 | |
COVID-19 | Note 14 – COVID-19 The ultimate impact that the COVID-19 pandemic or any future pandemic or disease outbreak will have on our business and our consolidated results of operations is uncertain. To date we have seen increased customer and consumer demand for our products as consumers initially began pantry loading and have increased their at-home consumption as a result of social distancing and stay-at-home and work-from-home mandates and recommendations. However, this increased customer and consumer demand may decrease in the coming months if and when the need for social distancing and stay-at-home and work-from-home mandates and recommendations decrease, and we are unable to predict the nature and timing of when that impact may occur, if at all. Although to date we have not experienced supply chain constraints, and we have continued to be able to fully satisfy customer and consumer demand for our products, the continued unprecedented demand for food and other consumer packaged goods products as a result of the COVID-19 pandemic or any future pandemic may limit the availability of, or increase the cost of, ingredients, packaging and other raw materials necessary to produce our products, and our operations may be negatively impacted. Additionally, pandemics or disease outbreaks could result in a widespread health crisis that could adversely affect economies and financial markets, consumer spending and confidence levels resulting in an economic downturn that could affect customer and consumer demand for our products. Our efforts to manage and mitigate these factors may be unsuccessful, and the effectiveness of these efforts depends on factors beyond our control, including the duration and severity of any pandemic or disease outbreak, as well as third party actions taken to contain its spread and mitigate public health effects. The ultimate impact of the COVID-19 pandemic on our business will depend on many factors, including, among others, the duration of social distancing and stay-at-home and work-from-home mandates and recommendations and whether additional waves of COVID-19 or different variants of COVID-19 will affect the United States and other markets, our ability and the ability of our suppliers to continue to operate our and their manufacturing facilities and maintain the supply chain without material disruption and procure ingredients, packaging and other raw materials when needed despite unprecedented demand in the food industry, and the extent to which macroeconomic conditions resulting from the pandemic and the pace of the subsequent recovery may impact consumer eating and shopping habits. We cannot predict the duration or scope of the disruption. Therefore, the financial impact cannot be reasonably estimated at this time. |
Subsequent Event
Subsequent Event | 6 Months Ended |
Jun. 30, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Event | Note 15 – Subsequent Event On August 3, 2021, the Company entered into an asset purchase agreement to acquire certain assets of Glenoaks Farms Inc., a California corporation. Glen Oaks is engaged in the business of the manufacture, development, and sale of probiotic drinkable yogurt. Upon the closing of the transaction contemplated by the Purchase Agreement, the Company will acquire all of Seller's right, title and interest in, to and under certain assets and rights of Seller under certain of Seller’s agreements (collectively, the “Purchased Assets”), including the rights, and contracts with a co-manufacturer, to produce the Seller’s probiotic drinkable yogurt products and intellectual property related thereto. The purchase price to be paid by the Company as consideration for such assets is $5,800,000, subject to certain adjustments. The Company is not assuming any liabilities of Seller. The Purchase Agreement contains customary representations and warranties, covenants, and indemnities of the parties thereto, including restrictive covenants of the Seller and its affiliates with respect to non-competition, non-solicitation, and confidentiality obligations. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2021 | |
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 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, 2021 and 2020 total advertising expenses were $ 2,166 1,320 773 784 |
Recent accounting pronouncements | Recent accounting pronouncements Adopted In December 2019, the FASB issued Accounting Standards Update (“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. The Company adopted this guidance on January 1, 2021. The adoption of this standard did not have a material impact on our consolidated financial statements and disclosures. Issued but not yet effective In March 2020, the FASB issued Accounting Standards Update (“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 will be 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 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 is effective for annual periods 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. |
Inventories, net (Tables)
Inventories, net (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule Of Inventories | Schedule Of Inventories June 30, December 31, Ingredients $ 1,862 $ 1,725 Packaging 2,479 2,234 Finished goods 2,950 2,971 Total inventories $ 7,291 $ 6,930 |
Property, Plant and Equipment_2
Property, Plant and Equipment, net (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property, plant and equipment | Schedule of property, plant and equipment June 30, December 31, Land $ 1,565 $ 1,565 Buildings and improvements 17,795 17,834 Machinery and equipment 31,723 31,707 Vehicles 778 778 Office equipment 862 857 Construction in process 440 228 53,163 52,969 Less accumulated depreciation (32,492 ) (31,921 ) Total property, plant and equipment, net $ 20,671 $ 21,048 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill & indefinite-lived intangible assets | 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 | 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 (8,244 ) (8,244 ) Other intangible assets, net $ – $ – |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Payables and Accruals [Abstract] | |
Schedule Of Accrued Expenses | Schedule Of Accrued Expenses June 30, December 31, 2020 Payroll and incentive compensation $ 2,722 $ 1,366 Real estate taxes 382 341 Current portion of operating lease liabilities 169 179 Other 314 310 Total accrued expenses $ 3,587 $ 2,196 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Leases [Abstract] | |
Future maturities of lease liabilities | Future maturities of lease liabilities Year Operating Leases Six months ended December 31, 2021 $ 97 2022 162 2023 24 2024 7 2025 5 Thereafter 2 Total lease payments 297 Less: Interest (21 ) Present value of lease liabilities $ 276 |
Stock-based and Other Compens_2
Stock-based and Other Compensation (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Stock option activity table | Stock option activity table Options Weighted Weighted Aggregate Outstanding at December 31, 2020 41 $ 10.42 5.22 $ – Granted – – – – Exercised – – – – Forfeited – – – – Outstanding at June 30, 2021 41 $ 10.42 4.72 $ – Exercisable at June 30, 2021 41 $ 10.42 4.72 $ – |
RSA activity table | RSA activity table RSA’s Outstanding at December 31, 2020 78 Granted 4 Shares issued upon vesting (8 ) Forfeited – Outstanding at June 30, 2021 74 Weighted average grant date fair value per share outstanding $ 2.86 |
Segments, Products and Custom_2
Segments, Products and Customers (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Segment Reporting [Abstract] | |
Schedule of sales of products by category | Schedule of sales of products by category 2021 2020 $ % $ % Drinkable Kefir other than ProBugs $ 48,373 82% $ 40,003 79% Cheese 6,221 11% 6,514 13% Cream and other 1,691 3% 1,432 3% ProBugs Kefir 1,431 2% 1,317 3% Other dairy 698 1% 808 1% Frozen Kefir (a) 124 1% 328 1% Net Sales $ 58,538 100% $ 50,402 100% (a) Includes Lifeway Kefir Shop sales Net sales of products by category were as follows for the three months ended June 30: 2021 2020 $ % $ % Drinkable Kefir other than ProBugs $ 24,170 82% $ 20,146 80% Cheese 3,022 11% 3,254 13% Cream and other 828 3% 651 3% ProBugs Kefir 751 2% 457 2% Other dairy 314 1% 437 2% Frozen Kefir (a) 77 1% 69 0% Net Sales $ 29,162 100% $ 25,014 100% (a) Includes Lifeway Kefir Shop sales |
Significant Accounting Polici_3
Significant Accounting Policies (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Accounting Policies [Abstract] | ||||
Advertising expenses | $ 773 | $ 784 | $ 2,166 | $ 1,320 |
Inventories, net (Details)
Inventories, net (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Ingredients | $ 1,862 | $ 1,725 |
Packaging | 2,479 | 2,234 |
Finished goods | 2,950 | 2,971 |
Total inventories | $ 7,291 | $ 6,930 |
Property, Plant and Equipment_3
Property, Plant and Equipment, net (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 53,163 | $ 52,969 |
Less accumulated depreciation | (32,492) | (31,921) |
Total property and equipment | 20,671 | 21,048 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 1,565 | 1,565 |
Building and Building Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 17,795 | 17,834 |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 31,723 | 31,707 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 778 | 778 |
Office Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 862 | 857 |
Construction in Progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 440 | $ 228 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets (Details - Indefinite assets) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
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 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets (Details - Finite lived) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 8,244 | $ 8,244 |
Accumulated Amortization | (8,244) | (8,244) |
Intangible assets, net | 0 | 0 |
Recipes [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 44 | 44 |
Customer Lists And Other Customer Related Intangibles [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 4,529 | 4,529 |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 985 | 985 |
Trade Names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 2,248 | 2,248 |
Formula [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 438 | $ 438 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Payables and Accruals [Abstract] | ||
Payroll and incentive compensation | $ 2,722 | $ 1,366 |
Real estate taxes | 382 | 341 |
Current portion of operating lease liabilities | 169 | 179 |
Other | 314 | 310 |
Total accrued expenses | $ 3,587 | $ 2,196 |
Debt (Details Narrative)
Debt (Details Narrative) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | |
Line of Credit Facility [Line Items] | |||
Line of credit balance | $ 2,777 | $ 2,768 | |
Revolving Credit Facility [Member] | |||
Line of Credit Facility [Line Items] | |||
Line of credit expiration date | Jun. 30, 2025 | ||
Line of credit balance | $ 2,777 | ||
Line of credit available | $ 2,223 | ||
Credit line effective interest rate | 2.15% | ||
Revolving Credit Facility [Member] | Revolving Loan [Member] | |||
Line of Credit Facility [Line Items] | |||
Revolving credit facility maximum borrowing capacity | $ 5,000 | ||
Revolving Credit Facility [Member] | Incremental Facility [Member] | |||
Line of Credit Facility [Line Items] | |||
Revolving credit facility maximum borrowing capacity | $ 5,000 |
Leases (Details)
Leases (Details) $ in Thousands | Jun. 30, 2021USD ($) |
Leases [Abstract] | |
Six months ended December 31, 2021 | $ 97 |
2022 | 162 |
2023 | 24 |
2024 | 7 |
2025 | 5 |
Thereafter | 2 |
Total lease payments | 297 |
Less: Interest | (21) |
Present value of lease liabilities | $ 276 |
Leases (Details Narrative)
Leases (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Leases [Abstract] | ||||
Lease expense | $ 91 | $ 132 | $ 169 | $ 311 |
Weighted average remaining lease term | 1 year 10 months 13 days | 1 year 10 months 13 days | ||
Weighted average discount rate | 7.84% | 7.84% | ||
Operating lease payments | $ 52 | $ 130 | $ 107 | $ 272 |
Income taxes (Details Narrative
Income taxes (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate | 31.10% | 29.80% | 31.20% | 29.00% |
Income tax benefit due to CARES Act | $ 245 | |||
Unrecognized tax benefits | $ 97 | $ 92 | $ 97 | $ 92 |
Stock-based Compensation (Detai
Stock-based Compensation (Details - Option Activity) - Equity Option [Member] - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options outstanding, beginning balance | 41 | |
Weighted average exercise price, options outstanding, beginning balance | $ 10.42 | |
Weighted average remaining contractural life, outstanding | 4 years 8 months 19 days | 5 years 2 months 19 days |
Aggregate intrinsic value, options outstanding | $ 0 | |
Options granted | 0 | |
Weighted average exercise price, options granted | ||
Options exercised | 0 | |
Weighted average exercise price, options exercised | ||
Options forfeited | 0 | |
Weighted average exercise price, options forfeited | ||
Options outstanding, ending balance | 41 | 41 |
Weighted average exercise price, options outstanding, ending balance | $ 10.42 | $ 10.42 |
Aggregate intrinsic value, options outstanding | $ 0 | $ 0 |
Options exercisable | 41 | |
Weighted average exercise price, options exercisable | $ 10.42 | |
Weighted average remaining contractural life, Exercisable | 4 years 8 months 19 days | |
Aggregate intrinsic value, options exercisable | $ 0 |
Stock-based Compensation (Det_2
Stock-based Compensation (Details - RSA Activity) - Restricted Stock [Member] shares in Thousands | 6 Months Ended |
Jun. 30, 2021$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
RSA's outstanding, beginning balance | 78 |
RSA's granted | 4 |
Shares issued upon vesting | (8) |
RSA's Forfeited | 0 |
RSA's outstanding, ending balance | 74 |
Weighted average grant date fair value per share | $ / shares | $ 2.86 |
Stock-based and Other Compens_3
Stock-based and Other Compensation (Details Narrative) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Restricted Stock [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation | $ 33 | $ 18 | $ 69 | $ 23 |
Tax-related benefits | 9 | 5 | 20 | 6 |
Unearned compensation related to non-vested RSA's | 76 | $ 76 | ||
Weighted average period for unrecognized compensation | 1 year 2 months 4 days | |||
Retention Award 2019 [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation | 0 | 15 | $ 8 | 58 |
Unearned compensation related to non-vested stock options | 0 | 0 | ||
C E O 2020 Incentive Award [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation | 80 | 0 | 170 | 0 |
Unearned compensation related to non-vested stock options | 537 | 537 | ||
Compensation expense expected in 2021 | 175 | 175 | ||
Compensation expense expected in 2022 | 232 | 232 | ||
Compensation expense expected in 2023 | 106 | 106 | ||
Compensation expense expected in 2024 | $ 24 | $ 24 | ||
Omnibus 2015 [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock authorized for issuance | 3,500 | 3,500 | ||
Shares available for issuance | 3,281 | 3,281 | ||
Plan 2017 [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation | $ 0 | 0 | $ 0 | 49 |
Unearned compensation related to non-vested stock options | 0 | 0 | ||
Plan 2019 [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation | 35 | 76 | 54 | 89 |
Defined Contribution Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Contribution expense | $ 105 | $ 96 | $ 218 | $ 214 |
Segments, Products and Custom_3
Segments, Products and Customers (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |||||
Segment Reporting Information [Line Items] | ||||||||
Total sales | $ 29,162 | $ 25,014 | $ 58,538 | $ 50,402 | ||||
Total sales percentage | 100.00% | 100.00% | 100.00% | 100.00% | ||||
Drinkable Kefirotherthan Pro Bugs [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Total sales | $ 24,170 | $ 20,146 | $ 48,373 | $ 40,003 | ||||
Total sales percentage | 82.00% | 80.00% | 82.00% | 79.00% | ||||
Cheese [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Total sales | $ 3,022 | $ 3,254 | $ 6,221 | $ 6,514 | ||||
Total sales percentage | 11.00% | 13.00% | 11.00% | 13.00% | ||||
Cream And Other [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Total sales | $ 828 | $ 651 | $ 1,691 | $ 1,432 | ||||
Total sales percentage | 3.00% | 3.00% | 3.00% | 3.00% | ||||
Probugs Kefir [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Total sales | $ 751 | $ 457 | $ 1,431 | $ 1,317 | ||||
Total sales percentage | 2.00% | 2.00% | 2.00% | 3.00% | ||||
Other Dairy [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Total sales | $ 314 | $ 437 | $ 698 | $ 808 | ||||
Total sales percentage | 1.00% | 2.00% | 1.00% | 1.00% | ||||
Frozen Kefir [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Total sales | $ 77 | [1] | $ 69 | [1] | $ 124 | [2] | $ 328 | [2] |
Total sales percentage | 1.00% | [1] | 0.00% | [1] | 1.00% | [2] | 1.00% | [2] |
[1] | Includes Lifeway Kefir Shop sales | |||||||
[2] | Includes Lifeway Kefir Shop sales |
Segments, Products and Custom_4
Segments, Products and Customers (Details Narrative) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Revenue Benchmark [Member] | Two Customers [Member] | Customer Concentration Risk [Member] | ||||
Revenue, Major Customer [Line Items] | ||||
Concentration percentage | 23.00% | 21.00% | 22.00% | 21.00% |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Related Party Transactions [Abstract] | ||||
Consulting fees | $ 125 | $ 250 | $ 250 | $ 500 |
Performance fee target | 94 | 188 | ||
Royalty expense | $ 150 | $ 150 | $ 300 | $ 300 |