XML 20 R8.htm IDEA: XBRL DOCUMENT
v3.7.0.1

Basis of presentation, out of period adjustments and restatement of prior period | 12 Months Ended
--- | ---
Dec. 31, 2015
Notes to Financial Statements |
Note 1 - Basis of presentation, out of period adjustments and restatement of prior period | Our Consolidated Financial Statements include the accounts of Lifeway Foods, Inc. and all of its wholly owned subsidiaries (collectively "Lifeway" or the "Company"). All significant intercompany accounts and transactions have been eliminated. Out-of-period adjustments recorded during fiscal 2014 During fiscal 2014, adjustments to correct the accounting for certain items related to periods prior to 2014, in the aggregate, decreased income before provision for income taxes by approximately $600,000 and net income by approximately $400,000 for the year ended December 31, 2014. These errors related to an understatement of accrued expenses and the provision for income taxes arising primarily from inaccurate accounting for certain employee, including officer, expense reports and an understatement of depreciation expense arising from assigning incorrect useful lives. The Company determined these adjustments to be immaterial, individually and in the aggregate, to our previously filed consolidated financial statements. Restatements of prior period financial statements Matters affecting the statement of income and comprehensive income During fiscal year 2015 certain indirect manufacturing overhead costs were classified as an element of General and Administrative (G&A) expense in our previously issued Statements of Income and Comprehensive Income. These indirect manufacturing overhead costs are more appropriately classified as an element of Cost of Goods Sold. Accordingly, the classification errors have been restated in the Consolidated Statements of Income and Comprehensive Income. These classification errors have no impact on the Company's previously-reported net sales, income from operations, net income, or basic and diluted earnings per common share presented in its Consolidated Statements of Income and Comprehensive Income. The Company determined the classification errors related to the 2015 Consolidated Statements of Income and Comprehensive Income were quantitatively large enough to require a restatement of 2015 and has captioned those periods as “restated.” Matters affecting the balance sheet and statement of cash flows The Company also determined that certain operating assets and liabilities at December 31, 2015 were not properly classified in our previously issued Consolidated Balance Sheets. These classification errors did not have a material impact on the Company's previously issued Consolidated Balance Sheets and Consolidated Statements of Cash Flows. To provide a higher degree of transparency and enhanced comparability between periods, these classification errors have been restated. Certain trade receivables at December 31, 2015 were reclassified from non-current assets to current assets to reflect the expected settlement of those receivables within one year; certain investments that do not meet the definition of available-for-sale securities were reclassified from investments at fair value to other assets; and we reclassified certain accounts payable amounts from accrued expenses to accounts payable. Reclassifications of prior period financial statements During the first quarter of 2015, certain executive compensation expense was classified as Selling expenses that management determined should have been classified as G&A expense. These classification changes are reflected in the Consolidated Statements of Income and Comprehensive Income for 2015. The reclassification has also been reflected in the 2014 and 2013 Consolidated Statements of Income and Comprehensive Income to conform to the 2015 presentation and such reclassifications do not change total operating expenses or net income in those periods. These adjustments had the following impact on our 2015 interim and annual Consolidated Statement of Income and Comprehensive Income:
|  | (Unaudited) Three Months Ended March 31, 2015 |  |  | (Unaudited) Six Months Ended June 30, 2015 |
|  | As Previously Reported (a) |  |  | Adjustment |  |  | As Restated |  |  | As Previously Reported (a) |  |  | Adjustment |  |  | As Restated |
Net Sales |  | $ | 29,622 |  |  | $ | – |  |  | $ | 29,622 |  |  | $ | 59,443 |  |  | $ | – |  |  | $ | 59,443 |
Cost of Goods Sold |  |  | 21,239 |  |  |  | 458 |  |  |  | 21,697 |  |  |  | 44,044 |  |  |  | 1,017 |  |  |  | 45,061 |
Gross Profit |  |  | 8,383 |  |  |  | (458 | ) |  |  | 7,925 |  |  |  | 15,399 |  |  |  | (1,017 | ) |  |  | 14,382 |
Selling expenses |  |  | 3,302 |  |  |  | – |  |  |  | 3,302 |  |  |  | 5,920 |  |  |  | – |  |  |  | 5,920 |
General & administrative |  |  | 3,492 |  |  |  | (458 | ) |  |  | 3,034 |  |  |  | 7,662 |  |  |  | (1,017 | ) |  |  | 6,645 |
Amortization |  |  | 179 |  |  |  | – |  |  |  | 179 |  |  |  | 358 |  |  |  | – |  |  |  | 358 |
Operating expenses |  |  | 6,973 |  |  |  | (458 | ) |  |  | 6,515 |  |  |  | 13,940 |  |  |  | (1,017 | ) |  |  | 12,923 |
Income from Operations |  | $ | 1,410 |  |  | $ | – |  |  | $ | 1,410 |  |  | $ | 1,459 |  |  | $ | – |  |  | $ | 1,459 |
|  | (Unaudited) Nine Months Ended September 30, 2015 |  |  | Twelve Months Ended December 31, 2015 |
|  | As Previously Reported (c) |  |  | Adjustment (b) |  |  | As Restated |  |  | As Previously Reported (d) |  |  | Adjustment (b) |  |  | As Restated |
Net Sales |  | $ | 89,042 |  |  | $ | – |  |  | $ | 89,042 |  |  | $ | 118,587 |  |  | $ | – |  |  | $ | 118,587 |
Cost of Goods Sold |  |  | 64,588 |  |  |  | 1,137 |  |  |  | 65,725 |  |  |  | 86,986 |  |  |  | 1,719 |  |  |  | 88,705 |
Gross Profit |  |  | 24,454 |  |  |  | (1,137 | ) |  |  | 23,317 |  |  |  | 31,601 |  |  |  | (1,719 | ) |  |  | 29,882 |
Selling expenses |  |  | 9,486 |  |  |  | (860 | ) |  |  | 8,626 |  |  |  | 12,752 |  |  |  | (860 | ) |  |  | 11,892 |
General & administrative |  |  | 10,920 |  |  |  | (277 | ) |  |  | 10,643 |  |  |  | 13,730 |  |  |  | (859 | ) |  |  | 12,871 |
Amortization |  |  | 537 |  |  |  | – |  |  |  | 537 |  |  |  | 716 |  |  |  | – |  |  |  | 716 |
Operating expenses |  |  | 20,943 |  |  |  | (1,137 | ) |  |  | 19,806 |  |  |  | 27,198 |  |  |  | (1,719 | ) |  |  | 25,479 |
Income from Operations |  | $ | 3,511 |  |  | $ | – |  |  | $ | 3,511 |  |  | $ | 4,403 |  |  | $ | – |  |  | $ | 4,403 |
(a) As previously reported in our first and second quarter 2016 Form 10-Q filings. (b) Includes the reclassification of certain executive compensation from Selling to G&A expenses. (c) As previously reported in our third quarter 2015 Form 10-Q filed on November 9, 2015. (d) As previously reported in our 2015 Form 10-K filed on March 16, 2016. The reclassifications related to certain executive compensation had the following impact on our 2014 and 2013 Consolidated Statement of Income and Comprehensive Income:
|  | Twelve Months Ended December 31, 2014 |  |  | Twelve Months Ended December 31, 2013 |
|  | As Previously Reported (d) |  |  | Reclassification |  |  | As Revised |  |  | As Previously Reported (d) |  |  | Reclassification |  |  | As Revised |
Selling expenses |  | $ | 14,534 |  |  | $ | (2,923 | ) |  | $ | 11,611 |  |  | $ | 11,296 |  |  | $ | (2,165 | ) |  | $ | 9,131 |
General & administrative |  |  | 9,378 |  |  |  | 2,923 |  |  |  | 12,301 |  |  |  | 7,583 |  |  |  | 2,165 |  |  |  | 9,748 |
Amortization |  |  | 716 |  |  |  | – |  |  |  | 716 |  |  |  | 713 |  |  |  | – |  |  |  | 713 |
Operating expenses |  | $ | 24,628 |  |  | $ | – |  |  | $ | 24,628 |  |  | $ | 19,592 |  |  | $ | – |  |  | $ | 19,592 |

X
- References No definition available. + Details
Name: | lway_NotesToFinancialStatementsAbstract
Namespace Prefix: | lway_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for the nature of an entity's business, major products or services, principal markets including location, and the relative importance of its operations in each business and the basis for the determination, including but not limited to, assets, revenues, or earnings. For an entity that has not commenced principal operations, disclosures about the risks and uncertainties related to the activities in which the entity is currently engaged and an understanding of what those activities are being directed toward. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 275 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=51801978&loc=d3e6003-108592 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 275 -SubTopic 10 -Section 50 -Paragraph 2A -URI http://asc.fasb.org/extlink&oid=51801978&loc=SL51803626-108592 + Details
Name: | us-gaap_NatureOfOperations
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration