Income dips; kefir company moves more mainstream
decrease the company blamed on higher raw material prices.
The company reported that during the period, sales rose 7.8 percent to a record $4.14 million compared to $3.83 million in the same quarter a year ago. Net income, however, was down to $515,109, or $0.06 per share, compared to $709,196, or $0.08 per share, last year. Lifeway attributed this decrease primarily to higher raw material prices, particularly the increased prices of milk and fuel.
Julie Smolyansky told NutraIngredientsUSA.com that no other factors affected this fall in income and that she was happy with the company's progress.
Earlier this year, Lifeway, which until now has built its reputation on manufacturing probiotic dairy drinks known as kefirs, branched out into the more mainstream dairy industry with its purchase of Ilya's Farms, a Philadelphia-based privately-held producer of gourmet cream cheeses for a total cash purchase price of $575,600.
"Ilya's Farms only contributed a little more than $100,000 in the third quarter sales. We look forward to further strengthening our presence on the East Coast with this recent acquisition and believe long-term, this has the potential to add significantly to shareholder value," said Smolyansky.
The beginning of the month saw Lifeway, on the back of this acquisition, launch the 'Lifeway Cream Cheese Gourmet' range.
"This purchase has allowed us to have an additional product line, though still in a niche business and is not miles away from the functional food market," said Smolyansky.
"Our goal is to go more mainstream," she said, before adding that Kefir sales were doing well and that the company had plans to start exporting into Canada by the beginning of next year.
The Lifeway cream cheee range will be available in a variety of flavors including plain whipped, vegetable, strawberry, chives, apple cinnamon raisin, sun dried tomato, lox and onion, honey mustard, cheddar cheese with horseradish, and apricot. It will be sold in 7.5 oz containers and the company hopes to add more varieties to the product line in the coming months.
The company purchased Ilya's Farms recipes and brand name, and will lease its production facility for a two-year period.