Edward and Ludmila Smolyansky, long-term shareholders who together exercise voting control with respect to approximately 27% of Lifeway Foods' outstanding shares, filed a revised preliminary consent statement on June 2, 2025, to remove and replace the company's directors. They expressed serious concerns about the company's Q1 2025 performance.
They emphasized that the 44% year-over-year increase in GAAP earnings per share for Q1 2025 was entirely due to a one-time $3.4 million gain from an investment sale, not from improvements in the underlying kefir business. They cited troubling operational trends, including a decline in gross profit margin from 25.8% to 24.0% and increases in selling and general and administrative expenses.
The Smolyanskys criticized the Board's handling of the Danone offer, the attempt to nullify the 1999 Stockholder Agreement, and the $8.5 million in cash and shares granted to CEO Julie Smolyansky. They stated that the consent path offers the quickest and most efficient route to achieving their goals of restoring operational discipline and shareholder alignment.
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