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Segment, Customer and Geographic Information
 12 Months Ended
Dec. 31, 2024
Segment Reporting [Abstract]  
Segment, Customer and Geographic Information

Note 13 – Segment, Customer and Geographic Information

 

Segment Information

 

The Company has one reportable segment, which manufactures and distributes cultured dairy products. Our products are produced using the same processes and materials and are sold to consumers through a common network of distributors and retailers. The Company derives revenue primarily in North America and manages the business activities on a consolidated basis. The business activities include selling cultured dairy products across various channels including retail-direct, distributor, and direct store delivery in a refrigerated format. We operate our business with a centralized financial systems infrastructure, and we share centralized resources for procurement and general and administrative activities. The accounting policies of the segment are the same as those described in the Summary of Significant Accounting Policies for the Company. Refer to Note 1 for additional information.

 

The Chief Executive Officer (“CEO”) has been identified as our Chief Operating Decision Maker (“CODM”). The Company manages operations on a company-wide basis, thereby making determinations as to the allocation of resources as one segment. The CODM uses discrete financial information at the consolidated level to assess performance for the segment and decides how to allocate resources based on the Company's consolidated Net income (loss), which is reported on the Consolidated Statement of Operations. The measure of segment assets is reported on the Consolidated Balance Sheet as Total assets.

 

The following table summarizes the reported segment revenue, segment profit, and significant segment expenses for the years ended December 31, 2024 and 2023.

           
    2024     2023  
             
Net sales   $ 186,820     $ 160,123  
                 
Cost of goods sold     135,400       115,060  
Depreciation expense     2,846       2,622  
Total cost of goods sold     138,246       117,682  
                 
Gross profit     48,574       42,441  
                 
Selling expenses     14,743       11,776  
General and administrative     19,439       13,130  
Amortization expense     540       540  
Total operating expenses     34,722       25,446  
                 
Income from operations     13,852       16,995  
                 
Other income (expense):                
Interest expense     (105 )     (384 )
Gain (loss) on sale of property and equipment     (8 )     34  
Other income     230       4  
Total other income (expense)     117       (346 )
                 
Income before provision for income taxes     13,969       16,649  
                 
Provision for income taxes     4,944       5,282  
                 
Net income   $ 9,025     $ 11,367  

 

The following table summarizes the reported segment total assets as of December 31, 2024 and 2023. 

          
   December 31, 
   2024   2023 
Total assets for reportable segment  $90,547   $81,654 
Adjustments and reconciling items   –    – 
Consolidated total assets  $90,547   $81,654 

 

Products from which the reportable segment derives its revenue

 

Lifeway’s primary product is drinkable kefir. The Company manufactures (directly or through a co-manufacturer) and markets products under the Lifeway, Fresh Made, and GlenOaks Farms brand names, as well as under private labels on behalf of certain customers.

  

The Company’s product categories are:

 

  · Drinkable kefir, a cultured dairy product sold in a variety of organic and non-organic sizes, flavors, and types.
  · European-style soft cheeses, including farmer cheese, white cheese, and Sweet Kiss.
  · Cream and other, which primarily consists of cream, a byproduct of raw milk processing.
  · Drinkable yogurt, sold in a variety of sizes and flavors.
  · ProBugs, a line of kefir products designed for children.
  · Other dairy, which primarily consists of Fresh Made butter and sour cream.

 

Net sales of products by category were as follows for the years ended December 31:

                
   2024   2023 
In thousands  $   %   $   % 
                 
Drinkable Kefir other than ProBugs   153,493    82%    127,726    80% 
Cheese   14,554    8%    13,781    9% 
Cream and other   8,299    4%    7,382    4% 
Drinkable Yogurt   5,619    3%    6,236    4% 
ProBugs Kefir   3,421    2%    3,429    2% 
Other dairy   1,434    1%    1,569    1% 
Net Sales   186,820    100%    160,123    100% 

  

Significant Customers

 

Sales are predominately to companies in the retail food industry located within the United States. Two major customers accounted for a total of 25% and 24% of net sales for the years ended December 31, 2024 and 2023, respectively. Two major customers accounted for a total of 26% and 25% of accounts receivable as of December 31, 2024 and 2023, respectively.

 

Geographic Information

 

Net sales outside the of the United States represented less than 1% of total consolidated net sales in 2024 and 2023, respectively. Net sales are determined based on the destination where the products are shipped by Lifeway.

 

All the Company’s long-lived assets are in the United States.