Lifeway Foods, Inc., makers of the nutritious, probiotic dairy beverage called kefir, announced today for the first quarter ended March 31, 2009, total sales increased 24% to approximately $13,736,000 from $11,122,000 during the same period a year ago. This increase is primarily attributable to increased sales and awareness of Lifeway's flagship line, Kefir, as well as ProBugs(TM) Organic Kefir for kids. Additionally, these results include revenues from its February 6, 2009 acquisition of Fresh Made Dairy. Included in the total group sales was $1,390,873 of revenue related to this acquisition and recorded from the period of February 7, 2009 to March 31, 2009.
Cost of goods sold as a percentage of sales were approximately 60% during the first quarter 2009, compared to about 69% during the same period in 2008. The decrease is primarily attributable to the decreased cost of conventional milk, our largest raw material, and the decreased cost of transportation and other petroleum based production supplies. Gross profit increased approximately 58% during the first quarter 2009, when compared with the same period in 2008.
Operating expenses as a percentage of sales were approximately 22% during the first quarter 2009, compared to about 19% during the same period in 2008. This increase is primarily attributable to the increase in professional fees related to the February 6, 2009 acquisition of Fresh Made Dairy and a 114% increase in amortization expense, a non cash expense, also related to the Fresh Made acquisition. Many of the acquisition- related professional fees are non recurring expenses.
Total operating income increased by $1,176,855, (approximately 86%) to $2,543,513 during the first quarter 2009, from $1,366,658 during the same period in 2008.
Total net income was $1,547,466 or $.09 per share for the first quarter ended March 31, 2009, compared with $888,605 or $.05 per share in the same period in 2008. This represents a 74% increase in net income from the first quarter 2009 when compared to the same period in 2008.
Net cash provided by operating activities was $1,695,393 during the three months ended March 31, 2009, which is an increase of $770,525 when compared to the same period in 2008.
Edward Smolyansky, CFO commented, "We are extremely pleased at our record first quarter 2009 results. From top to bottom this was our best quarter since our company was founded exactly 23 years ago tomorrow. We were aided by record low conventional milk prices, which continued to remain at first quarter lows in April and May. Additionally, organic milk prices, which have been at the same levels for several years, have also now begun to decline in price starting in mid-May."
Smolyansky added, "In addition to lower input costs, the acquisition in February of Fresh Made Dairy also added to our record quarter. We are generating very strong cash flows from this acquisition, and as of May 15, we have already paid down approximately $1.5 million in debt taken out to finance the acquisition. We now have the ability to leverage these positive cash flows and invest more in the Lifeway brand while continuing to grow our revenues and broaden our loyal customer base. Also, we have recently begun to ship direct to ShopRite, a chain of about 200 stores primarily in the north east region of the U.S."
About Lifeway Foods
Lifeway, recently named Fortune Small Business' 97th Fastest Growing Small Business, and one of only 4 companies to ever be named to the list four straight years in a row, is America's leading supplier of the cultured dairy product known as kefir, and now America's only supplier of Organic Kefir. Lifeway Kefir is a dairy beverage that contains Lifeway's exclusive 10 Live and Active probiotic cultures. While most regular yogurt only contains two or three of these "friendly" cultures, Lifeway kefir products offer more nutritional benefits. Lifeway offers 12 different flavors of its Kefir beverage, Organic Kefir and SoyTreat (a soy based kefir). Lifeway recently introduced a series of innovative new products such as pomegranate kefir, Greek-style kefir, a children's line of organic kefir products called ProBugs (TM) in a no-spill pouch in kid-friendly flavors like Orange Creamy Crawler and Sublime Slime Lime, and a line of organic whole milk kefir. Lifeway also produces a line of products marketed in US Hispanic communities, called La Fruta, Drinkable Yogurt (yogurt drinks distinct from kefir). In addition to its line of Kefir products, the company produces a variety of cheese products and recently introduced a line of organic pudding called It's Pudding!
Live conference calls will now be on an annual basis to discuss fiscal full year results. For more information, contact Lifeway Foods, Inc. at (847) 967-1010 or e-mail at [email protected] and visit http://www.lifeway.net .
This news release contains forward-looking statements. Investors are cautioned that actual results may differ materially from such forward-looking statements. Forward-looking statements involve risks and uncertainties including, but not limited to, competitive pressures and other important factors detailed in the Company's reports filed with the Securities and Exchange Commission.