Core Viewpoint - Lifeway Foods' Board of Directors has rejected Danone North America's unsolicited acquisition proposal of $27.00 per share, citing that it undervalues the company and is not in the best interests of its shareholders and stakeholders [1][2]. Company Performance - Lifeway has achieved its 20th consecutive quarter of growth, with double-digit year-over-year revenue growth and improved profit margins reported in Q3 2024 [3]. - Over the past five years, Lifeway has delivered total shareholder returns of 788%, and 270% over the past three years, significantly outperforming high-growth food and beverage peers and the S&P 500 [3]. Strategic Focus - The company remains committed to executing its strategic plan to expand kefir distribution and enter adjacent product categories [3][4]. - Lifeway aims to unlock additional shareholder value and is dedicated to acting in the best interests of all shareholders [4]. Advisory Support - Evercore is serving as the financial advisor, while Sidley Austin LLP is providing legal counsel to Lifeway [4].

Core Insights - Lifeway Foods, Inc. (LWAY) reported third-quarter 2024 results with net sales increasing year over year but falling short of the Zacks Consensus Estimate, while the bottom line declined year over year and also missed the consensus mark [1][3] Financial Performance - Lifeway Foods achieved earnings of 19 cents per share, missing the Zacks Consensus Estimate of 27 cents, and decreased from 23 cents reported in the same quarter last year [3] - The company reported consolidated net sales of $46.1 million, missing the Zacks Consensus Estimate of $52 million, but representing a 12.7% increase from $40.9 million in the year-ago period, driven by increased volumes of branded drinkable kefir [4] - Gross profit increased 6.5% year over year to $11.9 million, although gross margin contracted by 150 basis points to 25.7% compared to 27.2% in the third quarter of fiscal 2023, primarily due to unfavorable milk pricing [5] Expense Analysis - Selling expenses rose 38% year over year to $4 million, with selling expenses as a percentage of net sales increasing by 150 basis points to 8.6% due to continued marketing investments [6] - General and administrative expenses increased 15.5% year over year to $3.6 million, with these expenses as a percentage of net sales rising by 20 basis points to 7.7% [6] Financial Health - Lifeway Foods ended the quarter with cash and cash equivalents of $20.6 million and total shareholders' equity of $71.5 million, with net cash provided by operating activities amounting to $15.5 million for the nine months ended September 30, 2024 [7] Future Outlook - Lifeway Foods plans to expand its ProBugs product distribution to approximately 260 stores with a regional retailer by December 2024 and anticipates placing its Farmer Cheese in about 1,400 stores with a major national retailer by the end of the first quarter of 2025 [8] Market Performance - The stock has gained 19% in the past three months, outperforming the industry, which saw a decline of 17.1% [9]

Core Viewpoint - Lifeway Foods, Inc. has received a revised unsolicited proposal from Danone North America PBC to acquire all outstanding shares of Lifeway it does not already own for $27.00 per share in cash, following the rejection of an initial proposal of $25.00 per share due to undervaluation concerns [1][2]. Group 1: Proposal Details - Danone currently owns approximately 23.3% of Lifeway's outstanding common stock [1]. - The initial proposal of $25.00 per share was rejected by Lifeway's Board of Directors as it was deemed to substantially undervalue the company [2]. - The revised proposal of $27.00 per share is under careful review by Lifeway's Board, in consultation with independent advisors, to determine the best course of action [3]. Group 2: Shareholder Actions - Lifeway shareholders are advised that no action is required at this time regarding the proposals [4]. Group 3: Company Overview - Lifeway Foods, Inc. is recognized as a leading supplier of kefir and fermented probiotic products in the U.S., with a product range that includes drinkable kefir and various cheeses [5]. - The company's products are distributed across multiple countries, including the U.S., Mexico, Ireland, South Africa, UAE, and France [5].

Lifeway Foods (LWAY) came out with quarterly earnings of $0.19 per share, missing the Zacks Consensus Estimate of $0.27 per share. This compares to earnings of $0.23 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -29.63%. A quarter ago, it was expected that this dairy and cheese company would post earnings of $0.17 per share when it actually produced earnings of $0.25, delivering a surprise of 47.06%.Over the last four quarte ...

MORTON GROVE, Ill., Nov. 8, 2024 /PRNewswire/ -- Lifeway Foods, Inc. (Nasdaq: LWAY) ("Lifeway" or "the Company"), a leading U.S. supplier of kefir and fermented probiotic products to support the microbiome, today announced it will report financial results for the third quarter ended September 30, 2024 on November 14, 2024 before market hours.A pre-recorded conference call and webcast with Julie Smolyanksy, Lifeway's President and Chief Executive Officer, discussing these results with additional comments and ...

Lifeway CEO Julie Smolyansky announces substantial new distribution during Gulfood Manufacturing exhibitionDUBAI, UAE, Nov. 7, 2024 /PRNewswire/ -- Lifeway Foods, Inc. (Nasdaq: LWAY) ("Lifeway" or "the Company"), a leading U.S. manufacturer of kefir and fermented probiotic products, announced today an expanded distribution agreement in the United Arab Emirates market. The offering of 32oz Lifeway Kefir, 8oz Lactose-Free Lifeway Kefir, ProBugs and farmer cheese, exported from the United States, is expected t ...

MORTON GROVE, Ill., Nov. 5, 2024 /PRNewswire/ -- Lifeway Foods, Inc. (NASDAQ: LWAY) ("Lifeway" or the "Company"), a leading U.S. supplier of kefir and fermented probiotic products to support the microbiome, today announced that its Board of Directors (the "Board") has rejected the unsolicited proposal made on September 23, 2024 by Danone North America PBC ("Danone") to acquire all the shares of Lifeway that it does not already own for $25.00 per share.After careful and thorough consideration, conducted in c ...

Product Innovation - Lifeway Foods has launched 10 new innovative flavors for its 8-ounce organic kefir line, targeting evolving consumer tastes and preferences [1] - The new Flavor Fusions line is lactose-free and contains high-quality bioavailable nutrients, including protein, calcium, and 12 live and active probiotic cultures [1] - The flavors include unique combinations such as Pink Dragon Fruit, Passionfruit Lychee, Hot Honey, and Matcha Latte, inspired by global flavor insights and market research [2] Consumer Trends - Research indicates a growing interest in unique, exotic, and unexpected flavor fusions, with 75% of consumers expressing interest in tropical and citrus flavors [2] - 53% of Gen Z shoppers enjoy hot honey flavors, while Asian-inspired flavors like ube are trending, with ube being named the top flavor trend for 2024 by DairyReporter [2] - Floral flavors are also popular, with 33% of consumers seeking botanical flavors, and pistachio has been identified as one of the hottest food trends [2] Market Positioning - Lifeway Foods is positioning itself as a leader in the kefir category, known for gut health benefits and high-quality probiotics [2] - The new flavors are designed to appeal to a wide range of consumers, including those looking for convenient, on-the-go options, and are targeted at convenience stores, college campuses, and mass-market grocery channels [2] - The company aims to stay ahead of trends in hospitality and social media, leveraging the popularity of unique flavors on platforms like TikTok and Instagram [2] Distribution and Availability - The new Flavor Fusion line is now shipping and available nationwide at select independent and specialty stores [3] - The flavors were previewed at the FNCE® event in Minneapolis, MN, from October 5-8, 2024 [3] Company Background - Lifeway Foods is recognized as one of Forbes' Best Small Companies and is a leading supplier of probiotic, fermented beverages in the US [4] - The company's product portfolio includes drinkable kefir, cheeses, and a ProBugs line for kids, with products sold in the US, Mexico, Ireland, South Africa, and France [4]

Regular readers of my writeups know that I am a huge fan of trading momentum stocks, as momentum is one of the market's premier anomalies. But when investors combine momentum with the Zacks Rank, they really get something special. By using the Zacks Stock Screening tool, I have filtered for the stocks with the strongest three-month momentum. I also focused the results on stocks with five-year sales growth greater than 15% annually and stocks with either a Zacks Rank #1 (Strong Buy) or Zacks Rank #2 (Buy) ra ...

Momentum investing revolves around the idea of following a stock's recent trend in either direction. In the 'long' context, investors will be essentially be "buying high, but hoping to sell even higher." With this methodology, taking advantage of trends in a stock's price is key; once a stock establishes a course, it is more than likely to continue moving that way. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades. Even though momentum is a popular stock cha ...