SEC Comment Letter for Lifeway Foods, Inc. (LWAY) (CIK 0000814586) (LWAY) — Jan 9, 2015
Lifeway Foods, Inc. (LWAY) (CIK 0000814586)
Date: Jan. 9, 2015 · CIK: 0000814586 · Accession: 0000000000-15-001267
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 000-17363
Referenced dates: November 7, 2014
Letter
January 9, 2015 Via E -mail Edward P. Smolyansky Chief Financial Officer Lifeway Foods Inc. 6431 West Oakton St reet Morton Grove, Illinois 60053
Re: Lifeway Foods, Inc. Form 10-K for Fis cal Year Ended December 31, 2013 Filed April 2, 2014 Amendment No. 1 to Form 10-K for Fis cal Year Ended December 31, 2013 Filed October 3, 2014 Response Letter Dated December 9 , 2014 File No . 000-17363
Dear Mr. Smolyansky :
We have reviewed your response letter and have the following comments. In some of our comments, we may ask you to provide us with information so we may better understand your disclosure.
Please respond to this letter within ten business days by amending your filing, by provid ing the requested information, or by advising us when you will provide the requested response. If you do not believe our comments apply to your facts and circumstances or do not believe an amendment is appropriate, please tell us why in your response.
After reviewing any amendment to your filing and the information you provide in response to these comments, we may have additional comments.
Amendment No. 1 to Form 10 -K for Fis cal Year Ended December 31, 2013
Management’s Discussion and Ana lysis of Financial Condition and Results of Operations , page 15
Results of Operations , page 15
1. We have reviewed the supplemental information you provided in response to comment 2 in our letter dated November 7, 2014. Please confirm to us that your Management’s Discussion and Analysis will separately quantify the dollar impact of each material causal factor of change in your results of operations in future periodic filings in a ma nner similar
Edward P. Smolyansky Lifeway Foods, Inc. January 9, 2015 Page 2
to this response , adjusted as necessary for the facts and circumstances of each filing period .
Form 10 -K for Fis cal Year Ended December 31, 2013
Notes to Consolidated Financial Statements , page 24
General
2. We note from your response to co mment 3 in our letter dated November 7, 2014 that you have identified the sale of fermented dairy products as your single reportable segment. You also state that these products are “produced using the same process and materials, sold to consumer retail fo od sellers through direct delivery and distributors in the United States.” Based on this description, it is unclear whether you have identified a single operating segment or whether you have identified more than one operating segment for which aggregation was deemed appropriate in accordance with FASB ASC 280 -10-50- 11. If you have aggregated operating segments, please revise your proposed disclosure to also indicate that you have aggregated operating segments, as required by FASB ASC 280-10-50-21.
3. We not e from your response to comment 4 in our letter dated November 7, 2014 that you sell one type of product, “fermented dairy” in two different forms, kefir and cheese. You also state that your cheese sales were an immaterial portion of the Company’s sales, as were sales in foreign markets. As explained in FASB ASC 280 -10-50-38 and -40, information about products and geographic areas is required if not otherwise disclosed with your reportable operating segment information. We note that your MD&A discussion of gross sales distinguishes between your “flagship line, Kefir, as well as ProBugs Organic Kefir for kids and BioKefir” on page 15 of your 2013 amended Form 10-K and, as previously noted, you identify other groups of similar products on the Products page on your website and on page 4 of your 2013 amended Form 10 -K. We further note the C EO’s comment in the Q4 2013 earnings call stating that “Frozen yogurt continues to be a strong growth segment.” Given the foregoing, it appears disclosure of revenues by g roups of similar products would be required and consistent with the guidance of FASB ASC 280 -10-50-40. Unless you have additional information to consider that you believe would support an alternate view, please submit the proposed revisions. If you prefe r to limit compliance to future filings rather than amend your prior report, please state your rationale.
Edward P. Smolyansky Lifeway Foods, Inc. January 9, 2015 Page 3
You may contact Jennifer O’Brien , Staff Accountant, at (202) 551 -3721 or Kimberly L. Calder , Assistant Chief Accountant , at (202) 551 -3701 if you have questions regarding comments on the financial statements and related matters. Please contact Parhaum J. Hamidi, Staff Attorney, at (202) 551 -3421 or, in his absence, the undersigned at (202) 551 -3745 with any other questions.
Sincerely,
/s/H. Roger Schwall
Show Raw Text
January 9, 2015
Via E -mail
Edward P. Smolyansky
Chief Financial Officer
Lifeway Foods Inc.
6431 West Oakton St reet
Morton Grove, Illinois 60053
Re: Lifeway Foods, Inc.
Form 10-K for Fis cal Year Ended December 31, 2013
Filed April 2, 2014
Amendment No. 1 to Form 10-K for Fis cal Year Ended December 31, 2013
Filed October 3, 2014
Response Letter Dated December 9 , 2014
File No . 000-17363
Dear Mr. Smolyansky :
We have reviewed your response letter and have the following comments. In some of our
comments, we may ask you to provide us with information so we may better understand your
disclosure.
Please respond to this letter within ten business days by amending your filing, by
provid ing the requested information, or by advising us when you will provide the requested
response. If you do not believe our comments apply to your facts and circumstances or do not
believe an amendment is appropriate, please tell us why in your response.
After reviewing any amendment to your filing and the information you provide in
response to these comments, we may have additional comments.
Amendment No. 1 to Form 10 -K for Fis cal Year Ended December 31, 2013
Management’s Discussion and Ana lysis of Financial Condition and Results of Operations ,
page 15
Results of Operations , page 15
1. We have reviewed the supplemental information you provided in response to comment 2
in our letter dated November 7, 2014. Please confirm to us that your Management’s
Discussion and Analysis will separately quantify the dollar impact of each material causal
factor of change in your results of operations in future periodic filings in a ma nner similar
Edward P. Smolyansky
Lifeway Foods, Inc.
January 9, 2015
Page 2
to this response , adjusted as necessary for the facts and circumstances of each filing
period .
Form 10 -K for Fis cal Year Ended December 31, 2013
Notes to Consolidated Financial Statements , page 24
General
2. We note from your response to co mment 3 in our letter dated November 7, 2014 that you
have identified the sale of fermented dairy products as your single reportable segment.
You also state that these products are “produced using the same process and materials,
sold to consumer retail fo od sellers through direct delivery and distributors in the United
States.” Based on this description, it is unclear whether you have identified a single
operating segment or whether you have identified more than one operating segment for
which aggregation was deemed appropriate in accordance with FASB ASC 280 -10-50-
11. If you have aggregated operating segments, please revise your proposed disclosure to
also indicate that you have aggregated operating segments, as required by FASB ASC
280-10-50-21.
3. We not e from your response to comment 4 in our letter dated November 7, 2014 that you
sell one type of product, “fermented dairy” in two different forms, kefir and cheese. You
also state that your cheese sales were an immaterial portion of the Company’s sales, as
were sales in foreign markets. As explained in FASB ASC 280 -10-50-38 and -40,
information about products and geographic areas is required if not otherwise disclosed
with your reportable operating segment information. We note that your MD&A
discussion of gross sales distinguishes between your “flagship line, Kefir, as well as
ProBugs Organic Kefir for kids and BioKefir” on page 15 of your 2013 amended Form
10-K and, as previously noted, you identify other groups of similar products on the
Products page on your website and on page 4 of your 2013 amended Form 10 -K. We
further note the C EO’s comment in the Q4 2013 earnings call stating that “Frozen yogurt
continues to be a strong growth segment.” Given the foregoing, it appears disclosure of
revenues by g roups of similar products would be required and consistent with the
guidance of FASB ASC 280 -10-50-40. Unless you have additional information to
consider that you believe would support an alternate view, please submit the proposed
revisions. If you prefe r to limit compliance to future filings rather than amend your prior
report, please state your rationale.
Edward P. Smolyansky
Lifeway Foods, Inc.
January 9, 2015
Page 3
You may contact Jennifer O’Brien , Staff Accountant, at (202) 551 -3721 or Kimberly L.
Calder , Assistant Chief Accountant , at (202) 551 -3701 if you have questions regarding
comments on the financial statements and related matters. Please contact Parhaum J. Hamidi,
Staff Attorney, at (202) 551 -3421 or, in his absence, the undersigned at (202) 551 -3745 with any
other questions.
Sincerely,
/s/H. Roger Schwall
H. Roger Schwall
Assistant Director