Financial Performance - Total revenues for the three months ended February 23, 2025, were $35,154,000, a slight decrease of 1.5% compared to $35,704,000 for the same period in 2024[11] - Gross profit for the nine months ended February 23, 2025, was $26,316,000, representing an increase of 7.1% from $24,578,000 in the prior year[11] - Operating loss for the three months ended February 23, 2025, was $(9,029,000), compared to a loss of $(895,000) for the same period in 2024[11] - Net loss for the nine months ended February 23, 2025, was $(37,570,000), compared to a net income of $19,096,000 for the same period in 2024[12] - The company reported a basic loss per share of $(0.47) for the three months ended February 23, 2025, compared to earnings of $0.48 per share for the same period in 2024[12] - For the nine months ended February 23, 2025, Lifecore Biomedical reported a net loss of $37,570,000 compared to a net income of $19,096,000 for the same period in 2024[16] Cash and Liquidity - Cash and cash equivalents decreased to $5,417,000 as of February 23, 2025, down from $8,462,000 as of May 26, 2024[9] - The company reported cash and cash equivalents of $5,417,000 at the end of the period, down from $19,091,000 at the beginning of the period[16] - Cash flows from operating activities resulted in a net cash used of $5,553,000 for the nine months ended February 23, 2025, an improvement from $8,459,000 in the prior year[16] - The company believes its cash from operations and available credit will be sufficient to finance operational and capital requirements for at least the next twelve months[173] Assets and Liabilities - Total assets decreased to $237,693,000 as of February 23, 2025, from $253,960,000 as of May 26, 2024[9] - Total liabilities decreased to $190,267,000 as of February 23, 2025, compared to $200,058,000 as of May 26, 2024[9] - The company’s accumulated deficit increased to $(204,093,000) as of February 23, 2025, from $(166,523,000) as of May 26, 2024[9] - The balance of redeemable convertible preferred stock increased to $45,197,000 as of February 23, 2025, from $44,312,000 at the end of the previous reporting period[16] Expenses - Research and development expenses for the three months ended February 23, 2025, were $2,045,000, a decrease of 5.8% from $2,170,000 in the same period last year[11] - Stock-based compensation increased to $8,343,000 in the nine months ended February 23, 2025, compared to $4,603,000 in the same period of 2024[16] - Total operating expenses for the nine months increased by 37% to $48,888 million, driven by a significant rise in selling, general, and administrative expenses[157] - Operating expenses increased by 48% to $18.874 million for the three months ended February 23, 2025, compared to $12.789 million for the same period in 2024[141] Debt and Financing - As of February 23, 2025, total debt net of discounts was $124,939 million, slightly up from $124,668 million on May 26, 2024[64] - The Company’s term loan principal is $184,361 million, with a significant portion due in 2029 amounting to $170,325 million[64] - The Term Loan Credit Facility has an effective annual interest rate of 20.9% as of February 23, 2025[69] - The Company incurred total expenses of $18,490 million under the restructuring plan, with expected remaining costs of $1,971 million, leading to total expected costs of $16,519 million[48] Revenue Concentration - The Company had significant revenue concentrations during the three months ended February 23, 2025, with two customers accounting for 54% and 18% of total revenues, compared to 52% and 14% in the same period of 2024[89] - Alcon accounted for 43% of the Company's revenues for the nine months ended February 23, 2025, highlighting its significance as a major customer[117] Stock and Equity - Lifecore Biomedical issued common stock, net of fees, amounting to $23,858,000 during the nine months ended February 23, 2025[16] - The Company issued 5,928,775 shares of common stock on October 3, 2024, for gross proceeds of approximately $24,300, with an issuance cost of $467[78] - As of February 23, 2025, the aggregate liquidation preference of the Redeemable Convertible Preferred Stock was $45,455, with $561 of dividends in arrears[80] Operational Highlights - Lifecore's vertically integrated capabilities allow for rapid movement from product development to commercial production, enhancing supply chain efficiency[132] - The FDA completed a GMP inspection of Lifecore in May 2025, with an initial response to observations provided within the expected timeframe[128] - The company has made strategic capital investments to extend its formulation and filling capacity to meet increasing partner demand[131] Compliance and Governance - Certifications of the Principal Executive Officer and Principal Financial Officer were filed pursuant to the Sarbanes-Oxley Act of 2002, ensuring compliance with regulatory requirements[192] - Management is committed to remediating material weaknesses in internal control over financial reporting, including engaging a third-party consultant and enhancing the internal audit function[180]

Financial Performance - Revenues for Q3 Fiscal 2025 were $35.2 million, a decrease of 2% compared to $35.7 million in the same period last year[9]. - The company recorded a net loss of $14.8 million, or $0.47 loss per diluted share, compared to a net income of $15.6 million, or $0.42 income per diluted share, in the prior year[13]. - Adjusted EBITDA for Q3 Fiscal 2025 was $5.7 million, a decrease of $0.7 million from $6.4 million in the prior year[13]. - Gross profit for Q3 Fiscal 2025 was $9.8 million, down from $11.9 million in the same period last year, primarily due to a $3.0 million decrease in CDMO gross profit[10]. - Operating loss for the three months ended February 23, 2025, was $(9,029,000), compared to a loss of $(895,000) for the same period in 2024[31]. - Net loss for the three months ended February 23, 2025, was $(14,769,000), compared to net income of $15,632,000 in the same period last year[32]. - Adjusted EBITDA for the three months ended February 23, 2025, was $5,704,000, a decrease from $6,377,000 in the prior year[35]. - The net loss (GAAP) is estimated to be $(38.6) million for 2025, compared to $(36.6) million in 2024, reflecting an increase due to asset disposal losses and elevated legal expenses[37]. Expenses - Selling, general and administrative expenses for Q3 Fiscal 2025 were $10.1 million, an increase from $9.8 million in the prior year, mainly due to a $1.1 million increase in stock-based compensation[11]. - Research and development expenses for the three months ended February 23, 2025, were $2,045,000, slightly down from $2,170,000 in the same period in 2024[31]. - Selling, general, and administrative expenses increased to $10,093,000 for the three months ended February 23, 2025, compared to $9,848,000 in the prior year[31]. - Stock-based compensation is expected to increase to $10.5 million in 2025, compared to $6.2 million in 2024[37]. - Reorganization costs are estimated at $11.4 million for 2025, up from $9.8 million in 2024[37]. Revenue Projections - The company expects full fiscal year 2025 revenue to be approximately $126.5 to $130 million and Adjusted EBITDA to be in the range of $19 to $21 million[20]. - Estimated revenues for the year ending May 25, 2025, are projected at $126.5 million, a decrease from $130 million in 2024[37]. Balance Sheet and Cash Flow - Total current assets as of February 23, 2025, were $84,211,000, an increase from $81,033,000 as of February 25, 2024[29]. - Total liabilities as of February 23, 2025, were $190,267,000, a decrease from $200,058,000 as of February 25, 2024[29]. - Cash and cash equivalents as of February 23, 2025, were $5,417,000, down from $8,462,000 as of February 25, 2024[29]. - The company strengthened its balance sheet by raising approximately $17.0 million through the sale of excess capital equipment[1]. - Lifecore's cash balance was enhanced through the sale of an unused high-speed, multi-purpose isolator filler, with an aggregate purchase price of $17 million[6]. Interest and Other Expenses - Interest expense for Q3 Fiscal 2025 was $5.5 million, up from $4.3 million in the same period last year[12]. - Interest expense is projected to rise to $22 million in 2025, up from $18.1 million in 2024[37]. - The company anticipates a change in fair value of debt derivatives resulting in a loss of $(3) million in 2025, compared to a loss of $(39.5) million in 2024[37]. - The loss on sale or disposal of assets is projected at $7.6 million for 2025, with no such loss reported in 2024[37]. - The company has revised its estimate for restructuring, reorganization, and stockholder activist settlement costs to approximately $11.5 million for 2025[37]. - The increase in net loss is partially offset by lower restructuring expenses related to the resolution of a historical lease obligation[37]. Business Development - Lifecore signed multiple new agreements with both new and existing customers, including a project expansion with a large multi-national pharmaceutical customer[4].

Core Insights - Lifecore Biomedical, Inc. reported revenues of $35.2 million for Q3 Fiscal 2025, a decrease of 2% compared to $35.7 million in the same period last year [7][12] - The company signed multiple development agreements with both new and existing customers, including a project expansion with a large multi-national pharmaceutical customer [4][3] - Lifecore strengthened its balance sheet by selling excess capital equipment, raising approximately $17 million [6][3] Financial Performance - Revenues for the nine months ended February 23, 2025, were $92.4 million, an increase of 2% compared to $90.4 million for the same period last year [13] - Gross profit for Q3 was $9.8 million, down from $11.9 million in the prior year, primarily due to a decrease in CDMO gross profit [9][12] - The company recorded a net loss of $14.8 million for Q3, compared to a net income of $15.6 million in the same period last year [12][30] Operational Developments - Lifecore has implemented strategies to enhance sustainability and profitability, resulting in improved operational efficiencies and margins [5][3] - The company is actively seeking opportunities to reduce operational expenses and strengthen its commitment to quality [5][3] Future Outlook - Lifecore reiterated its financial guidance for the full fiscal year 2025, expecting revenue to be approximately $126.5 to $130 million and Adjusted EBITDA to be in the range of $19 to $21 million [19][35]

Company Overview - Lifecore Biomedical, Inc. is a fully integrated contract development and manufacturing organization (CDMO) specializing in the development, fill, and finish of sterile injectable pharmaceutical products [3] - The company has over 40 years of expertise in manufacturing premium, injectable-grade hyaluronic acid and serves global and emerging biopharmaceutical and biotechnology companies across multiple therapeutic categories [3] Upcoming Financial Results - Lifecore will report its financial results for the third quarter of fiscal year 2025 on April 3, 2025, after market close [1] - A webcast hosted by Lifecore's senior management team will take place at 4:30 p.m. Eastern Time on the same day to discuss the financial results and recent corporate developments [1] Webcast Access - Investors can listen to the live webcast or access the archived version on Lifecore's Investor Events & Presentations page [2] - The archived version will be available for 30 days following the live event [2]

Core Insights - Lifecore Biomedical, Inc. will participate in multiple investor conferences and industry events in March 2025, showcasing its commitment to engaging with investors and industry stakeholders [1][2]. Group 1: Upcoming Events - Lifecore will present at the TD Cowen 45th Annual Health Care Conference on March 4, 2025, where CEO Paul Josephs will deliver a corporate presentation [1]. - The company will also participate in the KeyBanc Capital Markets Healthcare Forum on March 19, 2025, featuring a fireside chat with CEO Paul Josephs [2]. - Additionally, Lifecore will attend DCAT Week 2025 from March 17-20, 2025, engaging in meetings with current and prospective customers [2]. Group 2: Company Overview - Lifecore Biomedical is a fully integrated contract development and manufacturing organization (CDMO) specializing in the development, fill, and finish of sterile injectable pharmaceutical products [3]. - The company has over 40 years of expertise in manufacturing premium, injectable-grade hyaluronic acid, serving global and emerging biopharmaceutical and biotechnology companies [3].

Company Participation - Lifecore Biomedical, Inc. will participate in the 2025 BIO CEO & Investor Conference scheduled for February 10-11, 2025, in New York, NY [1] - The company's management, including CEO Paul Josephs and CFO Ryan Lake, will engage in 1-on-1 meetings during the conference [1] Company Overview - Lifecore Biomedical is a fully integrated contract development and manufacturing organization (CDMO) specializing in the development, fill, and finish of sterile injectable pharmaceutical products [2] - The company has over 40 years of expertise in manufacturing premium, injectable-grade hyaluronic acid and serves global and emerging biopharmaceutical and biotechnology companies across multiple therapeutic categories [2]

Core Points - Lifecore Biomedical, Inc. plans to hold a special meeting on April 10, 2025, to seek stockholder approval for a proposal to remove the Convertible Preferred Stock Exchange Cap, allowing for potential conversion of Series A Preferred Stock beyond the current limit of 19.99% of outstanding Common Stock [1][2] - The current maximum number of shares of Common Stock that can be converted from the Convertible Preferred Stock is 6,056,284 shares, and no holders have yet elected to convert their shares [2] - The board of directors has set February 18, 2025, as the record date for stockholders entitled to vote at the special meeting [3] Proposal Details - The proposal aims to eliminate the limitation on the conversion of Convertible Preferred Stock, which is currently capped at 19.99% of the outstanding Common Stock prior to issuance [2] - The meeting is specifically to accommodate the terms of the Convertible Preferred Stock Securities Purchase Agreement dated January 9, 2023, and Lifecore has no current plans to raise additional equity capital [2] Proxy Statement and Participation - Lifecore intends to file a preliminary proxy statement with the SEC regarding the special meeting, followed by a definitive proxy statement after SEC clearance [4] - Stockholders will receive further details on how to participate and vote at the special meeting through the definitive proxy statement [4] Company Overview - Lifecore Biomedical is a fully integrated contract development and manufacturing organization (CDMO) specializing in the development and manufacturing of sterile injectable pharmaceutical products, including injectable-grade hyaluronic acid [5]

Core Viewpoint - Lifecore Biomedical is strategically positioned for mid-term and long-term growth, supported by its current capacity to generate up to $300 million in annual revenue through the recent installation of a high-speed 5-head filler and the sale of excess equipment [1][2]. Group 1: Financial Transactions - Lifecore has entered into a sales agreement for a high-speed, multi-purpose 10-head isolator filler, receiving an aggregate purchase price of $17 million, with $7 million received at closing and the remainder to be paid in three tranches over the next 18 months [1][2]. - The sale of the 10-head filler is viewed as a compelling opportunity to monetize unused equipment and enhance the company's financial position [2]. Group 2: Operational Capacity - The installation of the new high-speed, multi-purpose 5-head isolator filler has doubled Lifecore's available capacity, allowing the company to better serve existing and future customers [2]. - The 5-head filler is GMP-ready, and the company is currently engaging in discussions with customers to leverage its speed and aseptic isolation capabilities [2]. Group 3: Company Overview - Lifecore Biomedical is a fully integrated contract development and manufacturing organization (CDMO) specializing in the development, fill, and finish of sterile injectable pharmaceutical products, including complex formulations [3]. - The company has over 40 years of expertise in manufacturing premium, injectable-grade hyaluronic acid and partners with global and emerging biopharmaceutical and biotechnology companies [3].

Company Participation - Lifecore Biomedical, Inc. will participate in the 43rd Annual J.P. Morgan Healthcare Conference from January 13-16, 2025, in San Francisco, California [1] - The company's management, including CEO Paul Josephs and CFO Ryan Lake, will engage in one-on-one meetings during the conference [1] Company Overview - Lifecore Biomedical is a fully integrated contract development and manufacturing organization (CDMO) specializing in the development, fill, and finish of sterile injectable pharmaceutical products [2] - The company has over 40 years of expertise in manufacturing premium, injectable-grade hyaluronic acid and serves global and emerging biopharmaceutical and biotechnology companies across various therapeutic categories [2]

Financial Data and Key Metrics Changes - Revenues for Q2 2025 were $32.6 million, an increase of 8% compared to $30.2 million in the prior year [11] - Gross profit for Q2 2025 was $11.1 million, up from $10 million in the same period last year, primarily due to a $1.6 million increase in CDMO gross profit [12] - The company recorded a net loss of $6.6 million for Q2 2025, compared to a net income of $14.2 million in the prior year, which included a favorable $20.7 million non-cash fair market value adjustment [13][16] - Adjusted EBITDA for Q2 2025 was $6.5 million, an increase of $1.1 million compared to $5.4 million in the prior year [13] Business Line Data and Key Metrics Changes - CDMO revenues increased by $1.9 million, driven by a $3.8 million increase in sales volume from the largest customer, partially offset by a $1.9 million decrease from other customers [11] - Manufacturing revenues increased primarily due to timing, resulting in higher shipments in Q2 2025 [11] Market Data and Key Metrics Changes - Revenues for the first six months of fiscal 2025 were $57.3 million, a 5% increase from $54.7 million in the prior year [14] - The company reported a significant increase in its pipeline related to large multinational pharmaceutical companies, which now represents over 30% of the overall pipeline, up from less than 10% previously [50][81] Company Strategy and Development Direction - Lifecore has implemented a three-pronged growth strategy aiming for a 12% revenue CAGR and EBITDA margins over 25% in the coming years [22] - The strategy focuses on maximizing existing customer business, advancing development pipeline programs towards commercialization, and driving new business through expanded efforts [22][27] - The company is expanding its focus beyond complex highly viscous formulations to include other products and formulations across multiple modalities [26] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about ongoing momentum in development programs and late-stage site transfers, indicating a positive outlook for fiscal 2025 [49] - The company is confident that its growth strategy and leadership priorities are aligned to achieve success in the near, mid, and long term [36] Other Important Information - Lifecore successfully closed a $24.3 million PIPE offering, significantly improving its liquidity position [18] - The company amended and extended its revolving credit facility with BMO, resulting in a three-year extension and reduced interest rates [19] Q&A Session Summary Question: Details on the Nersum opportunity - Management indicated that the Nersum opportunity arose from the business development team's efforts and that ongoing development agreements are anticipated as the project progresses [44] Question: Feedback from pharma customers regarding fiscal 2025 - Management noted continued momentum in development programs and an increase in the pipeline related to large multinational pharmaceutical companies, indicating optimism for future success [49] Question: Opportunities for late-stage or commercial tech transfer projects - Management confirmed that pursuing late-stage or commercial site transfers is part of their strategy, with significant opportunities already in the pipeline [55] Question: Trends in gross margins for the rest of the year - Management expects overall margins to remain in the low thirty percent range, with improvements anticipated as revenues grow [60] Question: Clarification on revenue outlook - Management confirmed that there are no changes to the top-line revenue guidance for the year, maintaining the range of $126.5 million to $130 million [67] Question: Insights on early learnings and customer perceptions - Management acknowledged a lack of awareness about Lifecore's capabilities beyond fermentation but noted positive reception regarding their sterile fill-finish capabilities [81]