Lifeway Foods' Founder Dies, Daughter Elected President

MORTON GROVE, Ill.--Michael Smolyansky, founder and president of Lifeway Foods Inc. (NASDAQ:LWAY), died June 9 from a heart attack at age 55. His daughter, Julie, was appointed president, chief executive officer and treasurer at a board of directors meeting held June 10. Having joined Lifeway in 1997, she was most recently the company's director of sales and marketing, a position in which she implemented new marketing, advertising and public relations campaigns.

Prior to founding Lifeway, Michael Smolyansky was project engineer and department manager of E.J. Littell Machine Co. in Chicago for 10 years. In 1986, he began Lifeway Foods (www.lifeway.net), taking it public three years later. The Smolyansky family holds a 51-percent share in the company, with Paris-based Group Danone SA holding a 20-percent stake. Lifeway entered into a renewable three-year support agreement with a subsidiary of Group Danone in 1999 in order to give Lifeway access to Danone's U.S. brokers and distributors.

Peter Futro of Denver-based Futro & Trauernicht, the company's attorneys, told SmartMoney (www.smartmoney.com) that Group Danone supported the board's appointment of Julie to president and even recommended it.

Valeriy Nikolenko, company secretary and vice president in charge of production, will continue to oversee the day-to-day manufacturing operations of the company.

According to the company's annual report, filed March 28, the company distributes products to more than 400 accounts throughout the United States and currently employs approximately 50 employees. For fiscal 2001, the company had revenues of $10.7 million, a 16-percent increase over fiscal 2000's $9.2 million.

On June 10, when Michael Smolyansky's death was made public, Lifeway stock took a 27-percent nosedive from an opening price of $7 to $5.10 before the NASDAQ market halted trading at 10:43 EST. As of June 11, the stock closed at $5.89.