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MORTON GROVE, Ill. - Lifeway Foods, Inc. (NASDAQ:LWAY) issued a statement Thursday urging shareholders to disregard a consent solicitation filed by Edward and Ludmila Smolyansky, calling the filing legally deficient.
The company, which produces kefir and fermented probiotic products, stated that the Smolyanskys’ definitive consent solicitation statement filed on July 2 "violates Illinois law and the Company’s organizational documents." According to Lifeway, the statement improperly attempts to set a record date and fails to provide proper notice to all shareholders entitled to vote.
"Shareholders are urged to disregard the Smolyanskys’ recent filing and any communications from them that violate the law and our charter/bylaws," the company stated in its press release.
Lifeway emphasized that its current strategy has delivered significant returns for shareholders, citing a 788% return over five years through the date prior to Danone’s initial unsolicited proposal, and approximately 100% revenue growth from fiscal year 2019 through fiscal year 2024. The company’s strong performance continues, with InvestingPro data showing a 110% return over the past year and revenue growth of 13% in the last twelve months. According to InvestingPro’s analysis, the stock is currently trading above its Fair Value, with a P/E ratio of 38.4x.
The company indicated it plans to file a proxy statement with the SEC in connection with its 2025 annual meeting of shareholders and may file a consent revocation statement related to the Smolyanskys’ consent solicitation.
Lifeway Foods describes itself as America’s leading supplier of kefir, with products sold across the United States and internationally in Mexico, Ireland, South Africa, United Arab Emirates and France. With a market capitalization of $396 million and an "GREAT" financial health score according to InvestingPro, the company maintains strong liquidity with a current ratio of 2.89. Discover 10+ additional exclusive insights and detailed analysis available in the comprehensive Pro Research Report for LWAY.
The statement comes amid what appears to be a developing shareholder dispute, though specific details about the Smolyanskys’ proposals were not included in the company’s press release.
In other recent news, Lifeway Foods Inc. reported a 10.7% increase in net sales for the first two months of the second quarter, reaching $37.6 million, compared to the same period last year. The company anticipates second-quarter net sales to be between $52 million and $56 million. In the first quarter of 2025, Lifeway Foods met analysts’ expectations with an earnings per share of $0.23, though revenue fell short at $46.09 million against the forecasted $48 million. Despite this revenue miss, the company saw a 16.7% year-over-year increase in net sales for 2024, totaling $186.8 million.
Lifeway has expanded its distribution, making its kefir and fermented dairy products available in major retail chains such as Amazon Fresh, BJ’s Wholesale Club, and CVS. The company also introduced new products like lactose-free kefir and probiotic smoothies. CEO Julie Smolyansky highlighted the growing consumer demand for functional foods that promote gut health, driven by viral social media interest. Additionally, Lifeway Foods is expanding its market reach, with new distribution efforts in Dubai and the UAE.
The company projects continued growth, with an EPS forecast of $1.06 for FY2025 and $1.35 for FY2026, alongside revenue forecasts of $210.5 million and $232 million, respectively. Analysts from various firms have noted Lifeway’s strong market position and strategic growth initiatives. Lifeway Foods remains a leader in the kefir market, leveraging its innovative product offerings and expanding distribution to meet increasing consumer demand for health-focused products.
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