Lifeway increases profits in face of rising raw material costs
the first quarter despite the strong increase in costs of its
primary ingredient, milk.
Lifeway is America's leading supplier of the cultured dairy product known as kefir and also makes probiotic and functional foods based on soy.
The firm, which saw sales climb 19 per cent to $3.93 million in the first quarter, also achieved a 24 per cent rise in gross profit while operating income rose 50 per cent to $953,852 from $637,980 in 2003.
Edward Smolyansky, the Lifeway controller, noted that milk costs "were about 20 per cent higher when compared to the 2003 first quarter" and this contributed to an overall increase of 15 per cent in cost of goods during the period.
However he added: "We feel comfortable we can continue to maintain strong margins, even in the environment of rising milk prices and an overall increase in the cost of doing business."
Profits at the firm fell to $765,199, or 23 per cent, but the 2003 result including a non-recurring gain of $1,246,287 from the disposition of real property and a change in the loss from the sales of marketable securities worth around $380,000.
"We continue to see strong growth in our top-line sales and expect improved product placements and visibility with our new packaging," said Julie Smolyansky, Lifeway's CEO. "We have already had positive feedback from our limited test distribution of our new packaging. This new packaging, which will incorporate our full line, will soon be ready to roll-out nationally."
