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Lifeway Foods Inc. Reports Operating Results (10-Q)

November 16, 2009 | About:

10qk

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Lifeway Foods Inc. (LWAY) filed Quarterly Report for the period ended 2009-09-30.

LIFEWAY FOODS, INC. produces Kefir, a drinkable product similar to, but distinct from yogurt, in several flavors sold under the name `Lifeway's Kefir`. Lifeway Foods Inc. has a market cap of $195.87 million; its shares were traded at around $11.67 with a P/E ratio of 36.47 and P/S ratio of 4.41. Lifeway Foods Inc. had an annual average earning growth of 10.1% over the past 5 years.

Highlight of Business Operations:

Total consolidated group sales increased by $4,193,594, (approximately 37%) to $15,433,876 during the three-month period ended September 30, 2009 from $11,240,282 during the same three-month period in 2008. This increase is primarily attributable to increased sales and awareness of Lifeway s flagship line, Kefir, as well as ProBugs® Organic Kefir for kids. Additionally, Lifeway recorded revenues from its February 6, 2009 acquisition of Fresh Made Dairy. Included in the total group sales was approximately $2,190,000 of revenue related to this acquisition and recorded during the third quarter of 2009.

Total net income was $1,370,741 or $.08 per share for the third quarter ended September 30, 2009, compared with $854,916 or $.05 per share in the same period in 2008. This represents a 60% increase in net income from the third quarter 2009 when compared to the same period in 2008.

Sales increased by $9,763,471, (approximately 29%) to $43,649,383 during the nine-month period ended September 30, 2009 from $33,885,912 during the same nine-month period in 2008. This increase is primarily attributable to increased sales and awareness of Lifeway s flagship line, Kefir, as well as Lifeway s kids Kefir drink, ProBugs®. Additionally, Lifeway recorded revenues from its February 6, 2009 acquisition of Fresh Made Dairy. Included in the total group sales was approximately $5,733,600 of revenue related to this acquisition and recorded during the nine-month period ended September 30, 2009.

Total net income was $5,450,109, or $.32 per share for the nine-month period ended September 30, 2009, compared with $2,655,240, or $.16 per share in the same period in 2008. This represents a 105% increase in net income from the nine-month period ended September 30, 2009 when compared to the same period in 2008.

Net cash used in investing activities was $3,720,562 during the nine-months ended September 30, 2009, which is an increase of $2,051,518 when compared to the same period in 2008. This increase is primarily due to the Company s acquisition of Fresh Made Dairy, net of cash acquired. The Company purchased $1,020,776 worth of property, plant and equipment during the first nine-months of 2009 when compared to the purchase of $1,892,472 worth of property, plant in equipment during the same period in 2008. This represents a decrease of $871,696 in the purchase of equipment during the nine-months ended September 30, 2009, when compared to the same period in 2008. The Company also repaid certain of its short term liabilities in the form of a margin loan in the amount of $407,479 during its second quarter of 2009.

Total assets were $50,515,216 during the nine-months ended September 30, 2009, which is an increase of $14,067,206 when compared to the same period in 2008. This is primarily due the Company s acquisition of Fresh Made Dairy, which increased intangible assets by $10,151,285 as of September 30, 2009 when compared to September 30, 2008. Additionally, the value of the Company s property, plant and equipment was $13,812,039 as of September 30, 2009, which is an increase of $2,822,539 from September 30, 2008.

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