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Lifeway Foods Inc., Morton Grove, Ill., announced results for the fourth quarter and full year ended Dec. 31, 2013.
"We are very pleased to report record net revenues for 2013 — the highest in the company's history — and are confident that our strong growth will continue in fiscal 2014," said Julie Smolyansky, chief executive officer of Lifeway Foods, in a statement. "We are focused on our strategic plan to create innovative, healthy and nutritious food products for our customers while expanding distribution in the United States and abroad. We remain committed to wellness and continue to see positive business trends for Lifeway. We are already off to a strong start for 2014 and expect a 24 percent increase in net sales for the first quarter from the prior year. I am very excited for our future opportunities and believe we are well positioned for long-term sustainable growth that will allow us to increase value for shareholders."
Lifeway Foods' fourth quarter 2013 results
In the fourth quarter of 2013, gross sales increased 26 percent to $28.9 million compared with $22.9 million in the prior-year period. The company attributes this increase to increased sales and awareness of the company's flagship line, Kefir, as well as its ProBugs Organic Kefir for kids and BioKefir lines. Total consolidated net sales in the quarter increased 26 percent to $26.3 million from $20.88 million in the prior-year period.
Gross profit for the fourth quarter of 2013 decreased 30 percent to approximately $4.8 million, compared with approximately $6 million in 2012. However, the gross profit margin was 18 percent in the fourth quarter of 2013 compared with 29 percent in the year prior. The company attributes this decrease to the 30 percent increase in the cost of milk compared with the prior-year period.
Operating expenses as a percentage of net sales were approximately 20 percent during the fourth quarter of 2013, compared with approximately 24 percent in the prior-year period. This was primarily attributable to a decrease in selling expenses, which decreased to $3 million during the quarter from $3.2 million during the same period in 2012, the company says. Overall, the company reported a loss in operations of $400,000 during the fourth quarter of 2013.
Lifeway Foods' full-year 2013 results
In the year ended Dec. 31, 2013, total consolidated gross sales increased 21 percent to approximately $109 million from $90 million in 2012. The company attributes this increase to increased sales and awareness of its flagship Kefir line as well as its ProBugs Organic Kefir for kids and BioKefir lines.
Total consolidated net sales increased 20 percent to $97.5 million in the year, compared with $81.4 million in 2012. Gross profit for 2013 increased 4 percent to $27.6 million, compared with $26.6 million in 2012. However, the company's gross profit margin was down to 28 percent compared with 33 percent in 2012.
Total operating income for the year decreased approximately 9 percent to $8 million from $8.8 million in 2012. The company attributes the gross profit margin decline to the rising cost of conventional and organic milk. The total cost of milk was approximately 25 percent higher in 2013 than 2012, the company says.