Morton Grove, Ill-based Lifeway Foods, a manufacturer of cultured, probiotic and functional food products, has reported fiscal results for the Q1 ended 31 March 2002.

Lifeway reported revenues of US$2.89m, up 10% from last year’s Q1 revenues of US$2.64m. Gross profits for the quarter were US$1.365m, compared to US$1.089m last year. Net income rose 36% to US$447,558 or US$0.10 per share, versus US$328,713 or US$0.08 in 2001.

Michael Smolyansky, president and CEO, commented: “These figures reflect the increasing presence of our products in the marketplace, and they lay the foundation for what we expect will be a double digit year-over-year rise in revenues and profits based on our results to date.

“Our new Organic Kefir, La Fruta drinkable yogurt, and expanded line of Sweet Kiss cheese spreads, are contributing to the growth. Our national marketing campaign, along with new local marketing initiatives that include advertising as well as participation and sponsorship of local sporting events such as last weekend’s Y-Me Race Against Breast Cancer in Chicago continues to increase Lifeway’s brand awareness.”

Smolyansky added: “Given our current performance, we are on track to surpass our current quarter revenue goals, and we anticipate to achieve record revenues and profits for the current 2002 year.”

Lifeway Foods – consolidated statements of income (Unaudited) (US$)

                                                   For Three Months Ended
                                                   31 March      31 March
                                                     2002           2001
    Sales                                         $2,887,853    $2,636,440
    Cost of Goods Sold                             1,523,281     1,547,227
      Gross Profits                                1,364,572     1,089,213
    Operating Expenses                               648,540       657,219
    Income from Operations                           716,032       431,994
    Income before taxes                              769,235       564,062
    Provision for income taxes                       321,677       235,349
    Net Income                                      $447,558      $328,713
    Earnings Per Share                                  $.10         $0.08
    Weighted Average Shares Outstanding            4,269,736     4,318,444