Lifeway Foods® Delivers Highest Quarterly Net Sales in Company History, Extending Record Growth in Second Quarter 2026

About this update from Lifeway Foods, Inc.

$66.9 million in net sales, up 24.1% year-over-year and $3.9 million above the prior quarterly record 27th consecutive quarter of year-over-year net sales growth; first-half 2026 net sales reach $129.9 million, up 29.9% MORTON GROVE, Ill. , Aug. 13, 2026 /PRNewswire/ -- Lifeway Foods, Inc. (Nasdaq: LWAY) ("Lifeway" or "the Company"), the leading U.S. supplier of kefir and fermented probiotic foods, today announced financial results for the second quarter ended June 30, 2026. "Lifeway delivered the highest quarterly net sales in Company history, reaching $66.9 million and exceeding our prior record by $3.9 million," said Julie Smolyansky, President and Chief Executive Officer of Lifeway Foods. "Net sales increased 24% year-over-year, on top of a record second quarter in 2025, and marked our 27th consecutive quarter of year-over-year growth. As America's original authentic kefir brand, Lifeway has spent 40 years building the trust, expertise, nationwide distribution and retailer relationships that underpin our category leadership. This sustained, volume-led performance demonstrates the strength of our brands and the repeatability of the consumer-growth platform we have built over nearly seven years." Ms. Smolyansky continued, "Demand remained robust even as elevated milk prices created the primary margin headwind. We view the current margin pressure as temporary and expect these pressures to subside as conditions normalize. Given the Company's pricing power and the positive conventional milk cost outlook for 2027, coupled with the operational efficiencies from our ongoing investments, we expect gross margin and profitability to fully recover in 2027, with the opportunity to exceed the improvement achieved in the first quarter of 2026 as pricing actions layer in and operational improvements take effect. We enter the second half of 2026 with record first-half net sales of $129.9 million, significant new retail and foodservice distribution, and the planned completion of our transformative Waukesha expansion in early 2027. Together, these investments position Lifeway to reinforce its category leadership, serve growing demand and build long-term shareholder value." Second Quarter 2026 Highlights Net Sales: $66.9 million, the highest quarterly net sales in Company history, up 24.1% year-over-year and 6.2% above the prior quarterly record of $63.0 million. Gross Profit Margin: 19.5%, compared to 28.6% in the prior-year period, primarily reflecting elevated milk prices, temporary increases in resin costs for packaging and higher oil-related transportation costs. Selling, general and administrative expenses were 18.4% of net sales, compared to 17.6% last year, reflecting continued investment in marketing and brand awareness. Net Income: $0.1 million, or $0.01 per basic and diluted common share, compared to net income of $4.3 million, or $0.28 per basic and diluted common share, in the prior-year period. Year-to-Date 2026 Highlights Net Sales: $129.9 million, up 29.9% year-over-year. Gross Profit Margin: 23.4%, compared to 26.4% in the prior-year period. Selling, general and administrative expenses were 17.8% of net sales, compared to 18.8% last year, reflecting continued investment in marketing and brand awareness. Net Income: $4.8 million, or $0.32 per basic and $0.31 per diluted common share, compared to net income of $7.8 million, or $0.51 per basic and diluted common share, in the prior-year period. Historic Growth Record 27 consecutive quarters of year-over-year net sales growth – nearly seven years of uninterrupted quarterly growth. Four consecutive years of record annual net sales from 2022 through 2025, increasing from $141.6 million to $212.5 million – a cumulative increase of 50.1%. First-half 2026 net sales of $129.9 million increased 29.9% year-over-year and equaled approximately 61% of full-year 2025 net sales. Second-quarter 2026 net sales of $66.9 million set a new quarterly record, surpassing the previous record of $63.0 million established in the first quarter of 2026. Forty Years of Category Leadership and Cultural Relevance The Company marked its 40th anniversary and National Kefir Day with a nationwide celebration anchored by The Lifeway Kefir Shop, an immersive SoHo pop-up featuring custom smoothies, exclusive merchandise and a VIP preview with U.S. soccer star Rose Lavelle, followed by a live performance from Cannons. Lifeway also brought the celebration into the energy surrounding this summer's global soccer tournament through in-person activations in host cities and an online extension featuring recipes designed for at-home viewing parties. Beyond New York, Lifeway brought sampling and consumer activations to Chicago, Miami and Los Angeles, including a presence at Lollapalooza. The campaign extended digitally through Lifeway's viral frozen-fruit-and-kefir ice cream hack, which generated more than 50 million views and demonstrated Lifeway's ability to convert cultural relevance into broad consumer discovery and retail interest. Expanding Distribution Across Retail and Foodservice Lifeway continues to expand distribution across mass retail, natural grocery and foodservice, gaining momentum with new placements for emerging innovation and established product lines in both national and regional grocers. Recent and upcoming gains are broadening the reach of Lifeway Kefir, Muscle Mates, Kefir Butter, Farmer Cheese and Organic Farmer Cheese to thousands of retail placements nationwide, broadening access to new consumers and increasing consumption occasions. Meanwhile, Lifeway is extending beyond the traditional grocery aisle through our growing foodservice presence, including campus dining and emerging, on-trend frozen yogurt concepts. These wins demonstrate the Company's ability to scale new products, grow legacy offerings and diversify our channels of distribution. Industry Recognition This summer, President and Chief Executive Officer Julie Smolyansky was inducted into the Specialty Food Association Hall of Fame alongside industry leaders and pioneers. The honor recognizes Ms. Smolyansky's leadership in transforming kefir from a niche product into a mainstream functional-food category, driving sustained growth and innovation at Lifeway, advancing consumer understanding of probiotics and gut health, and expanding access to cultured dairy for millions of consumers. Conference Call and Webcast A webcast with Lifeway's President and Chief Executive Officer discussing these results with additional comments and details is available through the "Investor Relations" section of the Company's website at https://lifewaykefir.com/webinars-reports/ . About Lifeway Foods, Inc. Lifeway Foods, Inc. is the brand that introduced kefir to generations of American consumers. For 40 years, Lifeway has defined authentic, real kefir in the U.S. market while building the expertise, consumer trust and scale that support its category leadership. The Company has been recognized as one of America's Growth Leaders by TIME, as Dairy Foods' Processor of the Year 2025, as one of Forbes' Best Small Companies and on Inc.'s 2025 Best in Business list in the Best Challenger Brands category. In addition to its drinkable kefir portfolio, Lifeway produces Farmer Cheese – a 40-year legacy line now expanding to mass retail – Kefir Butter, Muscle Mates™, a variety of cheeses and ProBugs® for kids. Lifeway products are sold across the United States, Mexico, the United Arab Emirates, Central America and the Caribbean. Learn more at lifewayfoods.com. Forward-Looking Statements This press release contains "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995 regarding, among other things, unaudited estimated net sales. These statements use words, and variations of words, such as "anticipate," "plan," "project," "estimate," "potential," "forecast," "will," "continue," "future," "increase," "believe," "outlook," "expect," and "predict." You are cautioned not to rely on these forward-looking statements. These forward-looking statements are made as of the date of this press release, are based on current expectations of future events and thus are inherently subject to a number of risks and uncertainties, many of which involve factors or circumstances beyond Lifeway's control. If underlying assumptions prove inaccurate or known or unknown risks or uncertainties materialize, actual results could vary materially from Lifeway's expectations and projections. These risks, uncertainties, and other factors include: price competition; the decisions of customers or consumers; the actions of competitors; changes in the pricing of commodities; the effects of government regulation; possible delays in the introduction of new products; and customer acceptance of products and services. A further list and description of these risks, uncertainties, and other factors can be found in Lifeway's Annual Report on Form 10-K for the fiscal year ended December 31, 2025. Copies of these filings are available online at https://www.sec.gov , http://lifewaykefir.com/investor-relations/ , or on request from Lifeway. Lifeway expressly disclaims any obligation to update any forward-looking statements (including, without limitation, to reflect changed assumptions, the occurrence of anticipated or unanticipated events or new information), except as required by law. Derek Miller Vice President of Communications, Lifeway Foods Email:  [email protected]   General inquiries: Lifeway Foods, Inc. Phone: 847-967-1010 Email:  [email protected] LIFEWAY FOODS, INC. AND SUBSIDIARIES Unaudited Consolidated Balance Sheets June 30, 2026 and December 31, 2025 (In thousands) June 30, 2026 December 31, (Unaudited) 2025 Current assets Cash and cash equivalents $ 7,087 $ 5,571 Accounts receivable, net of allowance for credit losses and discounts & allowances of    $2,800 and $1,730 at June 30, 2026 and December 31, 2025, respectively 22,861 16,643 Inventories, net 13,987 11,890 Prepaid expenses and other current assets 2,526 2,627 Refundable income taxes 728 325 Total current assets 47,189 37,056 Property, plant and equipment, net 65,596 48,282 Operating lease right-of-use asset 521 465 Goodwill 11,704 11,704 Intangible assets, net 5,548 5,818 Other assets 1,841 2,285 Total assets $ 132,399 $ 105,610 Current liabilities Accounts payable $ 17,483 $ 11,008 Accrued expenses 4,745 5,413 Accrued income taxes 304 218 Total current liabilities 22,532 16,639 Line of credit 21,945 – Operating lease liabilities 393 360 Deferred income taxes, net 2,792 2,792 Other long-term liabilities 163 – Total liabilities 47,825 19,791 Commitments and contingencies (Note 9) – – Stockholders' equity Preferred stock, no par value; 2,500 shares authorized; none issued – – Common stock, no par value; 40,000 shares authorized; 17,274 shares issued; 15,105    and 15,232 outstanding at June 30, 2026 and December 31, 2025, respectively 6,509 6,509 Treasury stock, at cost (17,217) (13,214) Paid-in capital 1,800 3,843 Retained earnings 93,482 88,681 Total stockholders' equity 84,574 85,819 Total liabilities and stockholders' equity $ 132,399 $ 105,610   LIFEWAY FOODS, INC. AND SUBSIDIARIES Unaudited Consolidated Statements of Operations For the three and six months ended June 30, 2026 and 2025   (In thousands, except per share data) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Net sales $ 66,893 $ 53,901 $ 129,905 $ 99,992 Cost of goods sold 52,859 37,669 97,600 71,923 Depreciation expense 1,008 832 1,928 1,634 Total cost of goods sold 53,867 38,501 99,528 73,557 Gross profit 13,026 15,400 30,377 26,435 Selling expense 7,634 4,718 13,822 9,416 General and administrative expense 4,657 4,752 9,360 9,380 Amortization expense 135 135 270 270 Total operating expenses 12,426 9,605 23,452 19,066 Income from operations 600 5,795 6,925 7,369 Other income (expense): Interest expense (215) (21) (283) (35) Fair Value Loss on investments – – – (20) Gain on sale of investments – 55 – 3,407 Other income (expense), net 22 82 22 156 Total other income (expense) (193) 116 (261) 3,508 Income before provision for income taxes 407 5,911 6,664 10,877 Provision for income taxes 280 1,662 1,863 3,088 Net income $ 127 $ 4,249 $ 4,801 $ 7,789 Net earnings per common share: Basic $ 0.01 $ 0.28 $ 0.32 $ 0.51 Diluted $ 0.01 $ 0.28 $ 0.31 $ 0.51 Weighted average common shares outstanding: Basic 15,161 15,206 15,209 15,170 Diluted 15,289 15,390 15,334 15,359   LIFEWAY FOODS, INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows (Unaudited) (In thousands) Six months ended June 30, 2026 2025 Cash flows from operating activities: Net income $ 4,801 $ 7,789 Adjustments to reconcile net income to operating cash flow: Depreciation and amortization 2,198 1,904 Stock-based compensation 1,083 927 Non-cash interest expense 11 9 Bad debt expense 87 – Gain on sale of equipment (19) (115) Gain on sale of investments – (3,407) Fair value loss on investment – 20 (Increase) decrease in operating assets: Accounts receivable (6,305) (640) Inventories (2,097) (1,546) Prepaid expenses and other current assets 297 322 Refundable income taxes (404) 631 Increase (decrease) in operating liabilities: Accounts payable 6,739 500 Accrued expenses (2,601) (2,632) Accrued income taxes 86 – Other long-term liabilities 163 – Net cash provided by operating activities 4,039 3,762 Cash flows from investing activities: Purchases of property and equipment (19,505) (4,526) Proceeds from sale of equipment 223 115 Proceeds from sale of investments – 5,206 Net cash (used in) provided by investing activities (19,282) 795 Cash flows from financing activities: Purchase of treasury stock (4,937) – Borrowings under line of credit 23,000 – Repayments under line of credit (1,000) – Payment of deferred financing costs (21) (65) Equity award settled in cash (283) – Net cash provided by (used in) financing activities 16,759 (65) Net increase in cash and cash equivalents 1,516 4,492 Cash and cash equivalents at the beginning of the period 5,571 16,728 Cash and cash equivalents at the end of the period $ 7,087 $ 21,220 Supplemental cash flow information: Cash paid for income taxes, net of (refunds) $ 2,180 $ 2,457 Cash paid for interest $ 200 $ 26 Non-cash investing activities Accrued purchase of property and equipment $ 512 $ 1,083 Right-of-use assets obtained in exchange for lease obligations $ 119 $ 196   View original content to download multimedia: https://www.prnewswire.com/news-releases/lifeway-foods-delivers-highest-quarterly-net-sales-in-company-history-extending-record-growth-in-second-quarter-2026-302850391.html SOURCE Lifeway Foods, Inc.

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