Lifeway Foods, Inc. Q3 FY2025 earnings call

• Record net sales of $57,100,000 achieved, 24% Y/Y growth, volume-led by lightweight products.
• Gross profit margin improved to 28.7%, up 300 basis points from last year.
• Ongoing modernization of Waukesha facility, on track to double manufacturing capacity by 2026, with first step of installing additional fermentation tanks completed in September.
• Launched new products like MuscleMase, a ready-to-drink functional beverage, and continued success with probiotic smoothies with collagen.
• Strategic partnerships, including with Joe and the Juice and Air One, to expand brand reach.
• Nationwide sorority tour to introduce the brand to young women.
• Digital marketing strategy with influencer partnerships and in-store high visibility programs to drive velocities.
• Expanded distribution, including everyday placements at BJ's and rotation in Costco San Diego, with Q4 nationwide expansion for lightweight Farmers' Cheese.

In the third quarter, LifeWay Foods delivered record net sales of $57,100,000, a 24% year-over-year increase and approximately 29% on a comparable basis. This growth was volume-led, driven by the explosive demand for flagship products like lightweight keeper and high protein lightweight farmer cheese. Gross profit margin in Q3 was 28.7%, up 300 basis points from the previous year. Selling expenses were $5,000,000, up slightly as they invest in marketing. Net income was $3,500,000 or 23¢ per basic and diluted share.

• Well on pace to deliver strongest annual sales in company history in 2025.
• Reiterates target to achieve between $45 and $50,000,000 in adjusted net sales by fiscal year 2027.