Lifeway Foods Inc., Morton Grove, Ill., announced results for the second quarter, which ended June 30. Total consolidated net sales increased 28 percent to $29.6 million during the three-month period from $23.1 million during the same three-month period in 2013. This increase is primarily attributable to increased sales and awareness of the company’s flagship Kefir line as well as its ProBugs Organic Kefir for kids and BioKefir lines. 

“We are pleased with our performance in the second quarter of fiscal 2014, driven by a strong net sales increase of 28 percent and growing trend of consumers looking for healthy food alternatives,” said Julie Smolyansky, chief executive officer of Lifeway Foods, in a statement. “Our team has successfully executed on our ongoing initiative to expand our brand recognition, which in turn allows us to increase distribution of our nutritious probiotic kefir products. We expect the momentum we have built in the first half of fiscal 2014 to continue for the remainder of the year and are optimistic about our long-term growth opportunities.”

Gross profit for the second quarter of 2014 was $7.5 million, compared with $7.6 million in the second quarter of the prior year. The company’s gross profit margin decreased to 25 percent in the second quarter of 2014 versus 33 percent in the second quarter of 2013. The decrease was primarily attributable to a 30 percent increase in the cost of milk — the company's largest raw material — compared with the same period last year, it says.

Total operating expenses increased 17 percent to $6 million during the second quarter of 2014 from $5.1 million during the same period in 2013. This increase was primarily attributable to an increase in selling expenses, the company says.

Total operating income decreased $1 million to $1.5 million during the second quarter of 2014 from $2.5 million during the same period in 2013. The decrease in operating income is related to the decrease in gross profit and increased operating expenses, the company says.

Total net income was $1.1 million or $0.07 per diluted share for the three-month period compared with $1.4 million or $0.09 per diluted share in the same period in 2013.

For first half of 2014, total consolidated net sales increased by approximately 24 percent to $58.7 million during the six-month period, which ended June 30, from $47.5 million during the same six-month period in 2013. 

Gross profit for the first half of 2014 decreased 9 percent to $14.6 million, compared with $16 million in the same period in the prior year. The company’s gross profit margin was 25 percent in the first six months of 2014, compared with 34 percent in the same period last year.

Total net income was $1.8 million or $0.11 per share for the six-month period, compared with $3.8 million or $0.23 per share in the same period in 2013.