Landec Corp Ca (LNDC) 10-Q Quarterly Report April 2019



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At the Company:	Investor Relations:
Gregory S. Skinner	John Mills, Partner
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Landec Corporation Reports Third Quarter and First Nine Months Fiscal 2019 Results

Third Quarter and Nine Months Results Include Acquisition-Related Expenses

SANTA CLARA, CA - April 3, 2019 - Landec Corporation (Nasdaq: LNDC), a leading innovator of diversified health and wellness solutions with two operating businesses, Curation Foods, Inc. and Lifecore Biomedical, Inc. reported results for the fiscal 2019 third quarter and first nine months ended February 24, 2019.

“During the third quarter we made significant progress in our strategic objectives to drive long-term shareholder value. Lifecore completed the installation of its new multi-purpose vial and syringe filling line in preparation for commercial production of vials that is expected to begin on the new line in the first half of fiscal 2020. Lifecore has also made significant strides in building and expanding its Contract Development and Manufacturing Organization (CDMO) product development pipeline,” stated Molly Hemmeter, Landec’s President and CEO. “We currently have over 15 FDA-regulated drug and medical device products at various stages of development, ranging from early phase pre-clinical work to pivotal, late phase clinical studies.”

“Also during the third quarter, the name of Landec’s food business was changed from Apio to Curation Foods, signifying the completion of the strategic transformation of this business and unifying five plant-based brands, all with 100% clean ingredients and under one mission-based corporate identity. Two of these brands, Yucatan^® and Cabo Fresh^®, were added as a result of the acquisition of Yucatan Foods in December, 2018. With this acquisition, Curation Foods entered the high growth guacamole category, added sales capabilities and strategic customer relationships in the deli department of retail stores and gained a low-cost manufacturing footprint in Mexico.

“Moving forward, Lifecore is focused on commercializing new FDA-regulated products while Curation Foods is focused on the integration of Yucatan Foods and an aggressive cost-out program to drive operational efficiencies, while advancing product innovation and market share.”

“For the third quarter of fiscal 2019 our consolidated revenues increased 7% to $155.7 million, consistent with the low end of our revenue guidance for the quarter. The earnings per share of $0.04 was at the top end of our guidance due to a $2.6 million or $0.07 benefit from the reduction in the earnout liability associated with the O acquisition which was partially offset by (1) incremental costs in our non-salad vegetables business due to weather volatility, (2) a shortage of drivers in our logistics operations resulting in increased shipping costs, and (3) no increase in the fair market value of our Windset investment,” said Hemmeter.

Lifecore

“Lifecore’s third quarter results were consistent with expectations, generating revenues of $23.7 million and a gross profit of $11.6 million,” stated Jim Hall, Lifecore’s President. “Revenues increased 3% and 5% in the third quarter and first nine months of fiscal 2019, respectively, compared to the same periods last year. Gross profit was essentially flat compared to the third quarter and first nine months of last year. We still expect Lifecore to meet its original fiscal 2019 revenue growth expectations of approximately 14% to 16% while maintaining its historical gross margin of 40% to 45%.

“Lifecore continues to expand its manufacturing capabilities and capacity to support its growing CDMO and hyaluronic acid (HA) businesses. The recent installation of the new multi-purpose filling line aligns Lifecore’s filling capabilities with the growing needs and market expectations of its partners and provides Lifecore with the capacity to fill commercial quantities of drug products in vials, in addition to its existing capacity to fill syringes. Lifecore has also initiated a capacity expansion of its HA fermentation process to increase overall capacity by 25% in preparation for future HA demand driven by products currently in its product development pipeline. The new multi-purpose filling line and the new HA capacity have the potential to drive $40 million to $60 million of new incremental revenues annually once full capacity is achieved,” concluded Hall.

The following information was filed by Landec Corp Ca (LNDC) on Wednesday, April 3, 2019 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Inside Landec Corp Ca's 10-Q Quarterly Report:

Revenue - Product Highlight
These decreases in working capital were partially offset by (1) a $3.1 million decrease in accrued compensation due to fiscal year 2018 earned bonuses being paid during nine months of fiscal year 2019 and the accrual for fiscal year 2019 being lower than the amount accrued through the first nine months of fiscal year 2018, and (2) a $1.6 million decrease in deferred revenue due to the timing of billings and shipments at Lifecore.

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Landec Corp Ca provided additional information to their SEC Filing as exhibits

Exhibit 31.1: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 31.2: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 32.1: Section 1350 Certification

Exhibit 32.2: Section 1350 Certification

Ticker: LNDC
CIK: 1005286
Form Type: 10-Q Quarterly Report
Accession Number: 0001628280-19-003927
Submitted to the SEC: Thu Apr 04 2019 11:05:21 AM EST
Accepted by the SEC: Thu Apr 04 2019
Period: Sunday, February 24, 2019
Industry: Canned Fruits Veg Preserves Jams And Jellies