Lifeway Foods Reports Good 1Q02, Rebounding From Founder'sDeath

Lifeway Foods Reports Good 1Q02, Rebounding From Founder'sDeath

MORTON GROVE, Ill.--Lifeway Foods Inc. (NASDAQ:LWAY) reportedMay 14 increased sales and earnings for its first quarter (1Q02), ended March31, due to increased brand awareness. However, a personal tragedy in June madeshareholders wary about the company's future.

Net sales for the quarter were up 9.6 percent to $2.9 million from $2.6million logged in 1Q01. Gross margin was 47.3 percent of sales, compared to thesame quarter last year's 41.3 percent, and operating expenses held steady ataround $650,000. Earnings for the quarter increased to $448,000, or $.10 pershare earned, from $329,000, or $.08 per share earned.

At the time of the 1Q02 report, the company reported its national marketingcampaign and new local marketing initiatives were increasing brand awareness,which may make for a double-digit year-over-year increase in revenues andprofits.

However, the founder of Lifeway, Michael Smolyansky, died of a heart attackin early June at the age of 55, and his daughter was named president and chiefexecutive officer soon after. When the news broke, shares were down 27 percentfrom $7 to $5.10 per share; as of July 11, shares were regaining ground, postingat $6.20.

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