Company Overview - Lifeway Foods, Inc. is a leading U.S. supplier of kefir and fermented probiotic products, recognized as one of Forbes' Best Small Companies [4] - The company offers a variety of products including drinkable kefir, cheeses, and a ProBugs line for children, with sales across multiple countries [4] Financial Performance - Lifeway achieved gross sales exceeding $5.5 million for the week ending July 13, 2025, marking a 66% increase compared to the same week in the previous year [1] - The company plans to report its financial results for the second quarter ended June 30, 2025, on August 12, 2025, before market hours [2] Investor Relations - A pre-recorded conference call and webcast featuring Julie Smolyanksy, Lifeway's President and CEO, will be available on the company's website following the financial results announcement [3]

Core Viewpoint - The Smolyanskys, significant shareholders of Lifeway Foods, are actively pursuing a consent solicitation to remove the current board of directors and replace them with their nominated candidates, citing dissatisfaction with the board's actions and accountability [1][9]. Group 1: Consent Solicitation Process - The Smolyanskys have initiated a consent solicitation process, filing a definitive Consent Statement with the SEC on July 2, 2025, and report positive responses from other shareholders [1][2]. - Lifeway Foods has publicly stated that the consent solicitation is legally deficient, claiming inadequate notice to shareholders and the absence of a record date [2][3]. - The Smolyanskys assert that their request for a record date and shareholder list remains unfulfilled, indicating a lack of transparency from the board [2][3]. Group 2: Board Accountability and Actions - The Smolyanskys criticize the board for postponing the 2025 annual meeting and for not being responsive to shareholder concerns, urging shareholders to support their consent solicitation [3][6]. - Recent filings suggest that the board does not believe its own statements regarding Danone's $27 per share offer, which it claims undervalues the company, raising questions about the board's credibility [4][5]. - Jason Scher, the lead independent director, sold nearly all his shares, which raises concerns about the board's commitment to the company's future and contradicts their stance on the undervaluation of the company [5][6]. Group 3: Call to Action - The Smolyanskys are encouraging shareholders to sign and return WHITE consent cards to support their initiative to replace the current board [6][9]. - They have provided a platform for shareholders to obtain more information and engage with their campaign through FreeLifeway.com and LinkedIn [6].

Company Overview - Lifeway Foods, Inc. is a leading U.S. supplier of Kefir and fermented probiotic products, recognized as one of Forbes' Best Small Companies [4] - The company offers a variety of products including drinkable Kefir, cheeses, and a ProBugs line for children, with sales across multiple countries [4] Financial Performance - Lifeway has achieved approximately 100% revenue growth from FY '19 through FY '24 [1] - The company has delivered strong shareholder returns of 788% over the past 5 years prior to Danone's unsolicited proposal [1] Shareholder Communication - Lifeway emphasizes the importance of investor feedback and is focused on maximizing shareholder value [1] - The company urges shareholders to disregard the Smolyanskys' consent solicitation statement, which is deemed legally deficient [2][3] Proxy Statement Information - Lifeway intends to file a proxy statement and accompanying documents with the SEC for the 2025 annual meeting of shareholders [5] - Shareholders are encouraged to read the definitive proxy statement and related documents carefully when available, as they will contain important information [5] Participants in the Solicitation - The company and its independent directors, along with certain executive officers, are considered participants in the solicitation of proxies for the upcoming shareholder meeting [6] - Information regarding the interests and compensation of the company's directors and officers is available in the SEC filings [7]

Core Viewpoint - Edward and Ludmila Smolyansky, who control approximately 23.2% of Lifeway Foods' outstanding shares, are initiating a process to remove the current board of directors and elect a new board focused on accountability, transparency, and long-term shareholder value [1]. Group 1: Shareholder Proposals - The Smolyanskys are seeking shareholder approval for four key proposals: repeal bylaw amendments adopted after March 24, 2023; remove all current directors, including CEO and Chair Julie Smolyansky; elect a new board of seven nominees with expertise in governance, finance, operations, and consumer products; and amend by-laws to prohibit employing immediate family members of the President or CEO [2]. - The proposals for board removal and director election are interdependent to ensure stable leadership during the transition [2]. Group 2: Criticism of Current Board - The Smolyanskys assert that the current board has shown no intent to engage with shareholders and believe that the consent solicitation is the most effective way to return control to the shareholders [3]. - They criticize the board for disregarding shareholder feedback, failing to present a credible strategy, and rewarding failure, concluding that the current board cannot be trusted to lead Lifeway [3].

Company Overview - Lifeway Foods, Inc. is a leading U.S. supplier of kefir and fermented probiotic products, recognized as one of Forbes' Best Small Companies [3] - The company produces a variety of products including drinkable kefir, cheeses, and a ProBugs line for kids, with distribution across the U.S., Mexico, Ireland, South Africa, UAE, and France [3] Product Highlights - Lifeway's Berry Blast Probiotic Smoothie + Collagen has won Good Housekeeping's 2025 Snack Awards, highlighting its market recognition [1] - The smoothie contains 5 grams of hydrolyzed collagen per bottle, supporting skin health and joint support, along with 12 live and active probiotic cultures and billions of beneficial CFUs [1][2] - The product is lactose-free and gluten-free, catering to rising consumer demand for functional dairy products [2] Market Trends - The introduction of the Probiotic Smoothie + Collagen line, which includes flavors like Matcha Latte and Tropical Fruit, responds to increasing consumer interest in gut-skin health connections [2]

Core Insights - Lifeway Foods, Inc. is initiating an industry-wide conversation to create a new voluntary dairy certification standard aimed at balancing public health, consumer demand, and farmer viability [1][3] - The proposed certification seeks to provide transparency on issues such as animal welfare, responsible antibiotic use, sustainable farming practices, milk nutrition quality, and environmental stewardship [3][5] - The initiative is part of Lifeway's 40th anniversary celebrations and reflects the company's commitment to the public good rather than a corporate agenda [1][4] Industry Implications - The certification standard is intended to serve as a flexible, science-informed framework that empowers farmers and meets the growing consumer demand for responsibly produced dairy [3][5] - Lifeway Foods is inviting collaboration from various stakeholders, including producers, regulators, non-profits, and public health leaders, to develop and govern the certification framework [5][6] - The initiative aims to strengthen the dairy industry's long-term sustainability, integrity, and contribution to public health [6]

Core Insights - Lifeway Foods, Inc. has announced the establishment of National Kefir Day, to be celebrated annually on June 18, recognizing the cultural and nutritional significance of kefir and the company's legacy in promoting gut health for nearly 40 years [1][3] Group 1: Event Details - The official proclamation will occur at a press event in Chicago, featuring remarks from key leaders in government, medicine, and nutrition, including Lifeway's President and CEO Julie Smolyansky [2] - The event will highlight the connection between gut health and chronic disease prevention, with Smolyansky discussing kefir's role in supporting immunity and overall wellness [2] Group 2: Company Initiatives - Lifeway Foods aims to promote gut health, sustainability, and mindful nutrition through National Kefir Day, reflecting a cultural shift towards fermented foods for better health [3] - The company will distribute free Lifeway Kefir samples in major cities including Chicago, New York, Los Angeles, and Miami on June 18, and will sponsor a drone show over Lake Michigan to celebrate Chicago as the "Kefir Capital of the World" [5] Group 3: Marketing and Engagement - Lifeway is launching a tattoo challenge as part of the National Kefir Day festivities, rewarding fans who showcase their love for the brand with a year of free kefir [6] - Participants are encouraged to share photos or videos of their Lifeway-inspired tattoos on social media platforms [7] Group 4: Company Background - Lifeway Foods is recognized as a leading supplier of probiotic kefir and has expanded its product line to include various cheeses and a ProBugs line for children, with products sold in multiple countries [8]

Core Insights - Lifeway Foods, Inc. has achieved net sales of $37.6 million for the first two months of Q2 2025, marking a 10.7% increase year-over-year [1] - Year-to-date net sales reached $83.7 million as of May 31, 2025, with expectations for Q2 net sales to be between $52 million and $56 million [1] - The company is expanding distribution of its products in response to rising consumer interest in probiotic and functional foods [2] Sales Performance - The company reported a 10.7% increase in net sales for the first two months of Q2 2025 compared to the same period last year [1] - Year-to-date net sales as of May 31, 2025, totaled $83.7 million [1] - Lifeway anticipates Q2 net sales to fall between $52 million and $56 million [1] Product Expansion - Lifeway is expanding its distribution across major retailers, including Amazon Fresh, BJ's Wholesale Club, CVS, HEB, and others [3] - New product launches include Lifeway Organic, Lactose Free Flavor Fusions and Lifeway Organic Kefir Shots in various retail locations [3] - The company is seeing a 63% unit increase in Lifeway Farmer Cheese year-to-date, indicating strong demand [2] Market Trends - There is a growing consumer interest in functional foods that support gut health and overall wellness, driven by social media trends [2] - Lifeway's products are made with live and active cultures, aimed at supporting immunity, digestion, and long-term health [2]

Core Viewpoint - The Smolyanskys, who own approximately 27% of Lifeway Foods, express serious concerns regarding the company's Q1 2025 performance and the Board's governance issues, emphasizing a need for immediate changes to restore operational discipline and shareholder alignment [1][3]. Financial Performance - Lifeway reported a 44% year-over-year increase in GAAP earnings per share, attributed entirely to a one-time $3.4 million gain from an investment sale, rather than improvements in the core kefir business [2]. - Income from operations declined nearly 55% year-over-year, with the operating margin falling to approximately 3.4%, down from 7.9% in Q1 2024 [5]. - Net sales increased only 3.3% year-over-year but declined 1.8% sequentially from Q4 2024 [5]. - Revenue from the 2021 acquisition of Glen Oaks has declined approximately 50% to date [5]. - Selling expenses rose sharply by 27% year-over-year and 35% from Q4 2024, without a corresponding increase in sales [5]. - Gross margin contracted by 180 basis points to 24.0%, while SG&A expenses climbed to 20.2% of sales [5]. Governance Concerns - The Smolyanskys criticized the Board's governance, particularly regarding the handling of the Danone offer and the subsequent attempt to nullify the Company's 1999 Stockholder Agreement with Danone [2][5]. - Concerns were raised about the $8.5 million in cash and shares awarded to CEO/Chair Julie Smolyansky shortly after these events, which were seen as misaligned with shareholder interests [2][5]. - The combined CEO/Chair role held by Julie Smolyansky has been identified as a significant governance failure, leading to a lack of independent oversight [5]. Shareholder Actions - The Smolyanskys are pursuing a consent path to achieve their goals, believing there is broad support from the investment community for swift changes [3]. - They have filed a preliminary consent statement and a preliminary proxy statement, nominating a slate of independent directors to restore operational discipline and long-term value creation [3][7].

Financial Data and Key Metrics Changes - LifeWay Foods reported net sales of $186.8 million for the year ended December 31, 2024, an increase of $26.7 million or 16.7% compared to the prior year, marking a record high annual top line result [6] - The company achieved a gross profit margin of 26% for the year, maintaining solid margins despite inflationary pressures on milk prices [7][8] - Net income for the year was $9 million, reflecting earnings per share (EPS) of $0.61 per basic and $0.60 per diluted share [10] Business Line Data and Key Metrics Changes - Net sales of the flagship drinkable LifeWay kefir increased by more than 20% in 2024 compared to the prior year, following a nearly 16% growth in 2023 [16] - LifeWay's Farmer's Cheese saw strong growth in the second half of the year, particularly in Q4, supported by strategic investments and increased distribution [20] Market Data and Key Metrics Changes - The company noted a growing customer interest in protein-rich foods with probiotics, which has been a significant driver of growth [7] - LifeWay's products are gaining traction in new markets, including initial shipments to Dubai and UAE, although this is not yet a major revenue contributor [24] Company Strategy and Development Direction - LifeWay Foods is focused on innovation, with plans to expand its product offerings in response to evolving consumer interests, including lactose-free and probiotic products [15][17] - The company aims to maintain its market leadership in the kefir category while exploring new distribution opportunities to enhance its footprint [25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining growth momentum through 2025, despite macroeconomic pressures such as high prices and interest rates [12][26] - The company believes that health and wellness trends will continue to support its premium product portfolio for years to come [15] Other Important Information - LifeWay Foods has been actively participating in events to raise awareness about gut health and its products, including appearances at South by Southwest and Expo West [21][22] - The company is leveraging social media and influencer partnerships to enhance brand exposure and drive consumer engagement [23] Q&A Session Summary Question: What are the expectations for growth in the kefir market? - Management indicated that the addressable market for kefir is widening, and they are committed to maintaining their dominant position through innovation and strategic investments [16] Question: How is the company addressing inflationary pressures? - The company has maintained solid profit margins and is focused on driving higher shipment volumes to create operating leverage, which may lead to gross margin expansion [8][9]