Landec(LFCR)2022-04-07 20:01Revenue Performance - Lifecore's revenues for the three months ended February 27, 2022, increased by 28% to $34.8 million compared to $27.2 million for the same period last year[185]. - Curation Foods' revenues for the three months ended February 27, 2022, increased by 5% to $18.3 million compared to $17.5 million for the same period last year[185]. - Total revenues for the Company for the three months ended February 27, 2022, increased by 19% to $53.1 million compared to $44.7 million for the same period last year[185]. - Lifecore's revenue increase for the nine months ended February 27, 2022, was driven by a $10.6 million increase in CDMO revenues due to higher sales to new and existing customers[187]. - Curation Foods' revenue increase for the nine months ended February 27, 2022, was primarily driven by increased volume of guacamole, avocado products, and olive oil and wine vinegars[188]. Profitability - Lifecore's gross profit increased by $1.344 million (12%) to $12.905 million for the three months ended February 27, 2022, compared to $11.561 million for the same period last year[191]. - Curation Foods' gross profit decreased by $1.890 million (66%) to $990 thousand for the three months ended February 27, 2022, primarily due to increased freight and raw product sourcing costs[191][193]. - Total gross profit for the company decreased by $546 thousand (4%) to $13.895 million for the three months ended February 27, 2022, compared to $14.441 million for the same period last year[191]. Expenses - R&D expenses increased by $468 thousand (31%) to $1.978 million for Lifecore for the three months ended February 27, 2022, driven by higher salary and benefits expenses[195]. - Total SG&A expenses increased by $1.591 million (20%) to $9.725 million for the three months ended February 27, 2022, primarily due to higher salary and benefits expenses in the Lifecore segment[198]. - Restructuring costs for the three months ended February 27, 2022, were $5.9 million, compared to $2.0 million for the same period last year[200]. Cash Flow and Financing - Net cash used in operating activities was $24.4 million for the nine months ended February 27, 2022, compared to $10.6 million of net cash provided for the same period last year[208]. - Net cash provided by investing activities was $101.2 million for the nine months ended February 27, 2022, primarily due to the receipt of $73.5 million related to the Eat Smart Disposition[210]. - Net cash used in financing activities was $76.2 million for the nine months ended February 27, 2022, primarily due to $86.4 million of debt pay downs[211]. - Capital expenditures during the nine months ended February 27, 2022, were $18.5 million, compared to $11.4 million for the same period last year[212]. Debt and Credit Agreements - As of February 27, 2022, $39.9 million was outstanding on the Refinance Revolver, with an interest rate of 3.00%[219]. - The Refinance Term Loan had an interest rate of 9.5% as of February 27, 2022[219]. - The Company incurred debt issuance costs of $10.5 million in connection with the New Credit Agreements[217]. - A loss of $1.1 million was recognized in fiscal year 2021 due to the non-cash write-off of unamortized debt issuance costs related to the refinancing[218]. - The New Credit Agreements allow the Company to increase revolver commitments by up to $15.0 million, subject to certain conditions[216]. - The Company was in compliance with all financial covenants and had no events of default under the New Credit Agreements as of February 27, 2022[219]. - The interest on the Refinance Term Loan is based on either the base rate plus a spread of 7.50% or the LIBOR rate plus a spread of 8.50%[215]. - The Refinance Revolver interest is based on the LIBOR rate plus a spread of 2.00% to 2.50% or the base rate plus a spread of 1.00% to 1.50%[215]. - The Company terminated the previous Credit Agreement upon closing the New Credit Agreements[218]. Strategic Initiatives - Lifecore is a leading manufacturer of pharmaceutical-grade sodium hyaluronate, leveraging 36 years of expertise in the biopharmaceutical sector[161]. - Curation Foods focuses on innovating and distributing plant-based foods with 100% clean ingredients across North America[162]. - Lifecore has made strategic capital investments to extend its aseptic filling capacity to meet increasing partner demand[169]. - The Company expects to continue assessing the evolving impact of the COVID-19 pandemic on its operations and make necessary adjustments[182]. Long-term Obligations - There have been no material changes to long-term contractual obligations as reported in the most recent Annual Report[221].