Lifeway Foods(LWAY) - 2024 Q4 - Annual Results

Financial Projections - Lifeway forecasts annual Adjusted EBITDA to grow from $22 million in 2023 to between$45 million and $50 million in 2027[4]. - For the three-month period ended December 31, 2024, net sales are expected to range between$45.1 million and $46.6 million, up from$42.1 million for the same period in 2023[4]. - Full-year 2024 net sales are projected to be between $185.0 million and$186.5 million, an increase from $160.1 million in 2023[4]. - Lifeway has achieved 21 consecutive quarters of growth through Q4 2024, with double-digit year-over-year revenue growth in 2024[8]. Shareholder Returns - Total shareholder returns for Lifeway have been 788% and 270% over the past five and three years, respectively[8]. Management and Strategy - The Amended and Restated Employment Agreement for CEO Ms. Smolyansky does not increase her annual base salary or bonus entitlement from 2023 levels[7]. - The Company continues to execute its strategy and deliver substantial value for shareholders despite Danone's unsolicited offers[4]. - Lifeway's financial advisors have engaged with Danone's advisors regarding potential value-maximizing transactions[4]. - The Board emphasizes that it is not opposed to the sale of the Company at any price, provided it reflects fair value[4]. Shareholder Agreement Concerns - The Danone-Lifeway Shareholder Agreement is argued to cause "prejudice" to minority shareholders, impacting their rights to receive a fair price[20]. - The Shareholder Agreement is claimed to be barred by Section 7.71 of the Illinois Business Corporation Act, which does not permit such agreements that impinge on the rights of all shareholders[21]. - The interpretation of Section 7.71 is that it is mandatory, not permissive, contradicting the assertion that it allows non-unanimous shareholder agreements[22]. - The argument that subsection (e) permits shareholder agreements affecting all shareholders is rejected, emphasizing the need for fiduciary duties to benefit all shareholders[23]. - The existence of subsection (b) is clarified to ensure that agreements entered unanimously do not harm later transferees, reinforcing the requirement for unanimity[24]. - The Shareholder Agreement is described as anticompetitive, with Danone's right of first refusal seen as a tool to thwart transactions with competitors[26]. - The claim that the Shareholder Agreement provides safeguards against the dilution of Danone's equity stake is challenged, as it persists even without an equity stake[26]. - The anticompetitive nature of the Shareholder Agreement undermines its statutory authority, rendering it void ab initio[27]. - Lifeway reserves all rights regarding the Shareholder Agreement and does not waive any[28].