Business
Edward Smolyansky Announces Campaign Updates, Files Revised Preliminary Consent Statement to Remove and Replace Lifeway Foods' Directors
Edward and Ludmila Smolyansky, beneficial owners of approximately 27% of Lifeway Foods (NASDAQ: LWAY), today issued a statement expressing serious concerns about the company's Q1 2025 performance and what they describe as the Board's ongoing pattern of poor governance and misaligned priorities.
About this update from Lifeway Foods, Inc.
[{"type":"text","content":"CHICAGO, June 2, 2025 /PRNewswire/ -- Edward and Ludmila Smolyansky, beneficial owners of approximately 27% of Lifeway Foods (NASDAQ: LWAY), today issued a statement expressing serious concerns about the company's Q1 2025 performance and what they describe as the Board's ongoing pattern of poor governance and misaligned priorities.","length":341,"tagName":"p"},{"type":"text","content":"Although Lifeway reported a 44% year-over-year increase in GAAP earnings per share, Mr. Smolyansky emphasized that this was entirely due to a one-time $3.4 million gain from an investment sale, not from any improvement in the company's underlying kefir business. He and Mrs. Smolyansky cited several troubling operational trends, including:","length":344,"tagName":"p"},{"type":"list","items":[{"val":[{"type":"text","content":"Income from operations declined nearly 55% year-over-year.","length":58,"tagName":"p"}]},{"val":[{"type":"text","content":"Operating margin fell to approximately 3.4%, down from 7.9% in Q1 2024.","length":71,"tagName":"p"}]},{"val":[{"type":"text","content":"Net sales increased only 3.3% year-over-year and declined 1.8% sequentially from Q4 2024.","length":89,"tagName":"p"}]},{"val":[{"type":"text","content":"Revenue from the 2021 acquisition of Glen Oaks, a Laguna Beach, California-based drinkable yogurt company lacking any tangible assets, has declined approximately 50% to date. Notably, only two Directors – Edward and Ludmila Smolyansky – voted against this acquisition.","length":273,"tagName":"p"}]},{"val":[{"type":"text","content":"Selling expenses rose sharply – up 27% year-over-year and 35% from Q4, without a corresponding increase in sales.","length":113,"tagName":"p"}]},{"val":[{"type":"text","content":"Gross margin contracted by 180 basis points to 24.0%; SG&A expenses climbed to 20.2% of sales.","length":103,"tagName":"p"}]},{"val":[{"type":"text","content":"Insider stock sales by Director Pol Sikar and CEO Julie Smolyansky following the May 15, 2025 earnings release raised additional concerns about management's confidence in the company's outlook.","length":206,"tagName":"p"}]}],"tagName":"ul","bulletedList":true,"length":913,"olType":false},{"type":"text","content":"Ludmila and Edward Smolyansky also criticized the Board's governance and oversight, highlighted by its handl...