Morton Grove-based Kefir products manufacturer Lifeway Foods Inc. reported second quarter 2012 gross sales increased 14 percent as more people are becoming aware of the health benefits of kefir, according to the company.
"We are extremely pleased with our record second quarter financial performance," said Julie Smolyansky, CEO of Lifeway Foods, Inc. "Our higher net sales combined with the benefit from lower milk prices and tightly controlled expenses enabled us to report a quarterly earnings increase of 650%, the strongest in our Company's history."
Second quarter gross sales were $22.7 million, compared to $19.9 million for the second quarter of 2011. The company said that was due to increased sales and awareness of the company's flagship line, Kefir, as well as ProBugs Organic Kefir for kids and BioKefirT. Lifeway's Frozen Kefir line contributed approximately $800,000 to sales during the second quarter.
Total consolidated net sales increased 13 percent, or $2.4 million, to $20.6 million during the three-month period, up from $18.2 million during the same period last year. Net sales are recorded as gross sales less promotional activities such as slotting fees paid, couponing, spoilage and promotional allowances as well as early payment terms given to customers.
Gross profit for the second quarter of 2012 increased 46 percent to $8 million, compared to $5.5 million last year. The company's gross profit margin increased to 39 percent in the second quarter versus 30 percent in the second quarter of 2011. The increase was primarily attributable to a 20 percent decrease in the cost of conventional milk, the company's largest raw material, partially offset by a 5 percent increase in the cost of organic milk.
Total operating expenses increased 2 percent or $100,000, to $4.9 million during the second quarter of 2012, up from $4.8 million during the same period in 2011. The increase was primarily attributable to increased general and administrative expenses, partially offset by a decrease in selling and amortization expenses.
Total operating income increased $2.4 million to $3.1 million during the second quarter of 2012, from $7 million during the same period in 2011.