Lifeway Foods (LWAY) risk factors, FY2024 10-K

RISKS RELATED TO OUR BUSINESS

1. 01Our product categories face a high level of competition, which could negatively impact our sales and results of operations
2. 02We may not be able to successfully implement our business strategy for our brands on a timely basis or at all
3. 03If we fail to execute these and other important elements of our business strategy, our business and results of operations could be adversely affected
4. 04Interruption of our supply chain could affect our ability to manufacture or distribute products, could adversely affect our business and sales, and/or could increase our operating costs and capital expenditures
5. 05Disruption of our manufacturing or distribution chains or information technology systems, including disruption due to cybersecurity threats, could adversely affect our business
6. 06Our debt and financial obligations could adversely affect our financial condition, our ability to obtain future financing, and our ability to operate our business
7. 07Our Revolving Credit Facility bears interest at variable rates. If market interest rates increase, it will increase our debt service requirements, which could adversely affect our cash flow
8. 08Loss of our key management or other personnel, or an inability to attract such management and other personnel, could negatively impact our business
9. 09Employee strikes and other labor-related disruptions may adversely affect our operations
10. 10Our intellectual property rights are valuable, and any inability to protect them could reduce the value of our products and brands
11. 11A substantial portion of our common stock is held by members of the Smolyansky family and Danone, and they have the ability to control the outcome of matters submitted for stockholder approval
12. 12Our business could be adversely affected as a result of proposals to acquire the Company or other actions taken by stockholders related to a possible acquisition of the Company
13. 13We value constructive input from investors and regularly engage in dialogue with our stockholders regarding strategy and performance. Our Board and management team are committed to acting in the best interests of all of our stockholders
14. 14Litigation regarding the Stockholders’ Agreement may be protracted and costly
15. 15Our shareholder rights plan includes terms and conditions that could discourage a takeover or other transaction that stockholders may consider favorable
16. 16Adverse economic conditions in the United States or any of the other countries in which we conduct significant business in the future could negatively affect our business, financial condition and results of operations

RISKS RELATED TO OUR INDUSTRY

1. 17The consolidation of our customers or the loss of any of our largest customers could negatively impact our sales and results of operations
2. 18We are subject to the risk of product contamination and product liability claims, which could harm our reputation, force us to recall products and incur substantial costs
3. 19We rely on independent certification for several of our products and facilities
4. 20Increases in the cost of milk could reduce our gross margin and profit
5. 21Reduced availability of raw materials and other inputs, as well as increased costs for them, could adversely affect us
6. 22Our business is subject to various food, environmental, and health and safety laws and regulations, which may increase our compliance costs, subject us to liabilities, or otherwise adversely affect our business