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Lifeway Foods 3Q sales up 1.3 percent

MORTON GROVE - Lifeway Foods reported a 1.3 percent increase in net sales during the third quarter of 2016 as demand continues to rise for its kefir cultured dairy products.

Third quarter net sales were $30 million, the company reported, up from $29.6 million in the third quarter of 2015 reflecting higher volumes of private label and organic products partially offset by an increased investment in trade programs.

Gross profit as a percent of net sales decreased to 26.6% from 30.2% in the same period last year. The decrease in gross margin reflects increased trade promotion and unfavorable mix.

Selling expenses increased by $1.6 million to $4.3 million during the third quarter of 2016 from $2.7 million in the third quarter of 2015. The increase in selling expenses reflects an increase in advertising costs associated with a six-week advertising campaign in the third quarter. As a percentage of net sales, selling expenses increased to 14.4% compared to 9.1% in the same period last year.

"Our third quarter results reflects our commitment to drive growth and better position Lifeway for future success," said Julie Smolyansky, CEO of Lifeway Foods. "I am pleased to report that Lifeway's total household penetration is up 28 percent compared to last year, a strong indication that the strategic marketing and trade investments we have made are attracting a broader consumer base.

"Looking forward, we will continue to prioritize our key initiatives to drive sales, improve profitability and create long-term value for our shareholders," she added.

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