LIFEWAY FOODS (LWAY) Message Board

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Non-Tech : LIFEWAY FOODS (LWAY)

LWAY 24.38

-0.6%

Nov 7 3:59 PM EST

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To: Boyd Spencer who wrote (122)	11/14/1997 2:10:00 AM
From: Steve Cox	Read Replies (1) of 352

ATTENTION - LWAY has just re-entered Earth's atmosphere. The P/E60 a little while back may be warranted in late 1998 or 1999, but the present multiple of 35 is more realistic. You be the judge: Earnings % Change 1993 .03 0% 1994 .06 +100% 1995 .12 +100% 1996 .16 +33% 1997(e) .21(e) +31% With 3Q97 results out - TTM(.19)(P/E35) = $6.65. Think we'll just mellow out here for a while. Looking ahead to4Q97 with the impact of more stores shelving kefir products and plant expansion I'm estimating +25% in revenues over 4Q96 ($1.6M vs $1.3M). 3Q97 net profit was only 10.4%. (ONLY!). This is below LWAY's normal 12-14%, but plant expansion must have it's expenses and the profits will return due to automation soon - so 11% for 4Q97 is not unreasonable. Therefore earnings may come in at $.04 (+100% vs 4Q96) making 1997 = $.21. P/E35 = $7.35 share price. Over the years this has been the revenue story: Remember in 1996 and three quarters of 1997 the old plant was about maxed out and the new stores Dierberg, Wild Oats and Whole Foods were not in the picture. REV ($M) % Change 1993 3.0 1994 3.5 +17% 1995 4.5 +22% 1996 5.3 +18% * 1997(e) 6.1(e) +15% It's unfortunate investors are in at $9-$11 and now have paper losses of 30-40%. Many will want to sell when LWAY gets back to these prices and never look at the stock again. By end of 1Q98 I believe this price will be back - then consecutive quarters will really start to get exciting. Patience everyone - the snowball is starting to roll. It starts slow then builds up speed. Steve

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