EX-99.1 4 exhibit99-1_12692.txt PRESS RELEASE DATED MAY 17, 2004 EXHIBIT 99.1 ------------ PRESS RELEASE DATED MAY 17, 2004 LIFEWAY FOODS, INC. FOR IMMEDIATE RELEASE Lifeway Foods, Inc. Reports First Quarter Results - Sales Up 19% - Operating Income Up 50% - Strong Margin Improvements MORTON GROVE, Ill., May 17 - Lifeway Foods, Inc. today reported financial results for its first quarter ended March 31, 2004. For the quarter, Lifeway's sales climbed 19 percent to a record $3.93 million compared to 2003 first quarter sales of $3.30 million. Gross profit in the quarter increased 24 percent from the year ago period and operating income rose 50 percent to $953,852 from $637,980 in 2003. Net income was $765,199, or $.09 per split adjusted share, compared to net income of $993,273, or $.12 per split adjusted share in 2003. Contributing to the change in net income and earnings per share was 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 approximately equal to $382,576, both of which occurred in 2003. "We are extremely pleased with our first quarter results," commented Edward Smolyansky, Lifeway's controller. "We were able to post these strong results and improve our gross margins even with a significant increase in the cost of milk. Our milk costs, the largest component of our raw materials, were about 20 percent higher when compared to the 2003 first quarter. 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. "We continue to see strong growth in our top-line sales and expect improved product placements and visibility with our new packaging," stated 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." Lifeway is a manufacturer of cultured, probiotic and functional food products in the health food industry, and is America's leading supplier of the cultured dairy product known as kefir. The Company markets 12 flavors of kefir and does a successful business exporting its products to Canada. The Company also participates in the organic and soy markets with Lifeway Organic(TM), Organic Kefir and Kefir Cheese, and America's first soy kefir called SoyTreat(R). For more information, contact Julie Smolyansky, President, Lifeway Foods, Inc. at (847) 967-1010, e-mail at info@lifeway.net or visit http://www.lifeway.net or http://www.kefir.com. This document includes certain "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from these expectations due to changes in economic, business, competitive, market and regulatory factors. More information about these factors and their effects on company performance is contained in filings made by Lifeway Foods, Inc. with the U.S. Securities and Exchange Commission including, but not limited to, the annual report on Form 10-K. Information regarding securities filings made by Lifeway Foods, Inc. may be found by visiting the company's website at http://www.kefir.com or http://www.lifeway.net. LIFEWAY FOODS, INC. CONDENSED CONSOLIDATED STATEMENT OF INCOME Three Months Ended March 31, 2004 2003 ----------- ----------- Sales $ 3,935,079 $ 3,308,557 Cost of goods sold 2,099,198 1,825,956 Gross profit 1,835,881 1,482,601 Operating expenses 882,029 844,621 Income from operations 953,852 637,980 Income before taxes 1,255,732 1,563,514 Income taxes 490,533 570,241 Net income $ 765,199 $ 993,273 Earnings per share $ .09 $ .12 Weighted avg. shares outstanding 8,436,888 8,436,888 CONDENSED CONSOLIDATED BALANCE SHEET Three Months Ended March 31, 2004 March 31, 2003 -------------- -------------- Cash and Cash Equivalents $ 4,632,830 $ 2,787,724 Current Assets 14,857,172 11,438,210 Current Liabilities 864,135 1,133,811 Stockholders Equity 16,423,090 13,307,384