Greetings and welcome to the Lifeway Foods Third Quarter 2014 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. (Operator Instructions). As a reminder, this conference is being recorded. I would now like to turn the conference over to Hunter Wells. Thank you. You may begin.

Good afternoon, and welcome to Lifeway Foods third quarter 2014 earnings conference call. On the call with me today are Julie Smolyansky, President and Chief Executive Officer and Ed Smolyansky, Chief Financial Officer. By now, everyone should have access to the third quarter earnings release for the period ending September 30, 2014, which went out this afternoon at approximately 4:05 PM Eastern Time. If you have not received the release, it is available on the Investor Relations portion of Lifeway’s Web site at www.lifeway.net. This call is being webcast and a replay will be available on the Company’s Web site. Before we begin, we would like to remind everyone that the prepared remarks contain forward-looking statements and management may make additional forward-looking statements in response to your questions. These statements do not guarantee future performance and therefore undue reliance should not be placed upon them. Similarly, descriptions of Lifeway’s objectives, strategies, plans, goals or targets contained herein are also considered forward-looking statements. Actual results could differ materially from those projected in any forward-looking statements. Lifeway assumes no obligation to update any forward-looking projections that maybe made in today’s release or call posted on their Web site. And with that, I would like to turn the call over to Lifeway’s CEO, Julie Smolyansky.

Thank you Hunter and good afternoon everybody. I would like to provide you all with an overview of our results on the third quarter. Additionally I will give an update on our growth and outlook for fiscal 2014. At the conclusion of my remarks both Ed and I will be available to take your questions. In the third quarter net sales were up solid but double-digit, driven by increased distribution with new and existing retail partners and growing brand awareness. Third quarter net sales increased 27% to 30.1 million. In the quarter we experienced an approximate 20% increase in the cost of milk compared to the same period last year. Despite these increased milk prices we generated net income of approximately $1 million or $0.06 per diluted share. I am pleased with our results and believe we’re better positioned than ever before to capitalize on our tremendous growth opportunity. The probiotic market continues to experience steady global growth, increasingly scientific journals and news organizations are reporting on the helpful benefits of kefir. I cannot say that I am surprised as I believe the unique probiotic streams that we’ve developed at Lifeway make our kefir a true superfood. A serving is only 110 calories, contains 11 grams of protein and is 99% lactose free. One glass contains a powerhouse of nutrients and health benefits proven to help promote the beneficial bacteria that helps support our digestive system. As the U.S. category leader in the kefir space we expect to continue to benefit from the rise and positive scientific studies and news reports regarding kefir and probiotics. I would now like to discuss our third quarter operational highlights in more detail. We have made significant progress in ramping up production at the Golden Guernsey plant, dairy plant in Wisconsin. As a reminder…

Thank you. At this time we will conduct a question-and-answer session. (Operator Instructions). Our first question comes from Howard Halpern with Taglich Brothers. Please proceed with your question.

First question relates to I think the 600,000 related to I guess leasehold improvements. And it impacted I guess cost of goods sold, was that a one-time event or is that going to carry over into upcoming quarters?

That is a one-time event we decided to just true-up. I believe it’s the lifespan of our leases for the stores as well as there was an increase of about 140,000 in Wisconsin depreciation expense that was not in the last quarter. But the one-time expense is more of a Starfruit, that was a large chunk and that’s considered a one-time expense. Going forward the period-over-period comparison numbers for depreciation expense should again be the same.

And in terms of the G&A expense with Golden Guernsey plant. Are you pretty much the variability [suggesting minor] going forward now, you pretty much up to speed on your employees, that you’re going to have for a while?

So that will help just margins in general for 2015 compared to 2014.

Well, correct. But also if you notice our selling expenses actually were flat even though sales were up by almost 30%. So what we try to leverage the advertising and selling expense in order to offset the start up costs for Wisconsin. So when those costs are to go down, you will expect to see selling expenses kind of go up in the same range. Overall operating expenses should end up somewhat flat or I guess comparable to revenue.

In terms of as Julie mentioned 2015 plan I guess for the UK would be drinkable kefir. Are you in the process of winding up co-packer or are you using the same co-packer or how do you plan to proceed with that product launch.

Well currently we do not have an actual -- we have a couple of different people that we’re looking to partner up with. We don’t have an actual contract with anyone, but we’re looking to use the same model as we used in Canada. So maybe a licensing or something like that but it’s a little bit too early to tell on the drinkable side.

And you also I guess talked about, are there other parts of the world that you’re interested in or is showing interesting kefir like South America or Australia or other country like that. Are you seeing some of that?

I think there is interest in kefir all over the world and of course we would love to sell our kefir everywhere in every country. But I think there is logical steps and regions to go to first. So I think a good expansion model was Canada, we’ve seen it already very early on to be a success. Of course Europe is a place where kefir is already accepted and well known. So we’ll start with those two areas and we’ll see what comes from there.

(Operator Instructions). Our next question comes from Ivan Zwick with Raymond James. Please proceed with your question.

Where do you see milk prices going forward from here, let’s say into next year?

Well as everyone probably knows they peaked at the end of the second quarter beginning of the third quarter of this year. So around June, August, July those months. And they’ve started to now come down and what it looks like is they’re really going to start precipitously come down. Of course we only can tell what the price is from one month to the next month, but the direction and the trend is definitely on a good downward trend and that will provide a lot of tailwinds for us to move forward, especially pricing things like that.

And also in the new plant in Wisconsin that you’re processing your own milk and all, I understand. What type of savings are you looking from that going forward?

Well I guess we previously discussed in other calls, it’s about a 5% savings around but let’s all show not factoring in the start-up costs that we earned currently as I alluded to you earlier. So it’s hard to say what it’s going to end up being until everything is flushed through. It’s about a 5% savings.

And also just going forward are there any specific areas that you’re looking to expand? I guess in the U.S. with products as well as Canada that maybe you haven’t talked about in the call today that sort of [Europe], drawing board?

Well I believe we’re looking to expand to every store that we currently aren’t in. I mean that’s I believe just the basic kind of strategy of course. And to reach our skew options, so there are definitely a lot of markets we’re still not in but we will of course and Canada is a market that we just decided to get into. So Canada is a focus of course and the U.S. always will be a focus for us.

And also with the Starfruit thing, where is that going or where do you see it going?

I mean we continue to support the Starfruit stores and maintain their presence in Chicago end markets. We have life like culture shops that’s kind of based on the Starfruit concept of this in the Chicago end market at the Argo Teas Shop. There are a few other concepts in the plans. But in terms of new stores we roll probably not the opening under the Lifeway umbrella and continued to have the franchise opportunity available for interested entrepreneur, but we’re really looking at the Starfruit model at this point as a marketing tool platform to support the Lifeway brands. And so it continued to look at that in that way, but there won’t be additional Starfruit stores opening under the Lifeway umbrella.

Our next question comes from James Fronda with Sidoti & Company. Please proceed with your question. James Fronda - Sidoti & Company: Have you seen any I guess new competitors into the space in the last couple of months or so?

There’s nothing in the base, in the last couple of months, there have been a few competitors over the last few years kind of more on a regional basis who have actually started to be -- looks like there is a declining growth in additional competitors, I think the Lifeway brand is incredibly strong and kind of continues to show its strength on shelves as any of the competitors who have come online have been discontinued since their introduction. James Fronda - Sidoti & Company: And the fourth quarter usually, historically has tended to decline significantly. Can you just remind me what causes that?

I mean sales are traditionally lower in the winter months. So that’s when it has some effect, there is other things going on obviously and it’s just traditionally that way.

Thank you. There are no further questions in queue at this time. I will like to turn the call back over to management for closing comments.

Thanks for your participation today. We appreciate the hard work and dedication of our staff and the support of our local customers and loyal customers and shareholders. We look forward to sharing our fourth quarter year-end results with you in the coming months and let me be one of the first to say Happy Thanksgiving, Happy Holidays and a very safe and healthy New Year.

Thank you. This does conclude today’s teleconference. You may disconnect your lines at this time and have a great day.