• Landec Corporation Reports Third Quarter Fiscal Year 2022 Results

    المصدر: Nasdaq GlobeNewswire / 05 أبريل 2022 15:05:01   America/Chicago

    Lifecore segment revenues increased 27.9% in fiscal third quarter, as compared to prior year period

    Reiterates fiscal 2022 full year guidance

    SANTA MARIA, Calif., April 05, 2022 (GLOBE NEWSWIRE) -- Landec Corporation (Nasdaq: LNDC) (“Landec” or the “Company”), a diversified health and wellness company with two operating businesses, Lifecore Biomedical, Inc. (“Lifecore”) and Curation Foods, Inc. (“Curation Foods”), reported results for the fiscal 2022 third quarter ended February 27, 2022. As previously reported, on December 13, 2021 the Company closed on the sale of its Curation Food’s fresh packaged salads and vegetables business (the “Eat Smart Disposition”), and as such, those results are now reflected as discontinued operations in all periods presented within the Company’s financial statements. Looking forward, Landec continues to focus on creating shareholder value through strengthening its balance sheet, accelerating growth at Lifecore, and seeking opportunities to optimize its remaining assets.

    CEO COMMENTS:

    Dr. Albert Bolles, Chief Executive Officer of Landec Corporation commented, “Lifecore continued to build its development pipeline in the fiscal third quarter, adding two additional projects, which speaks to the ongoing demand for its specialized CDMO capabilities for complex projects. As expected, Lifecore delivered a strong quarter of revenue growth in the fiscal third quarter, as it resumed a more typical ordering cadence with its customers following a normalization of channel inventory that was temporarily inflated due to lower procedure volumes during the COVID pandemic peaks. While the timing of sales impacted mix, and as a result margin in the fiscal third quarter, we remain on track with the expectations we previously set forth for the full year and anticipate a strong finish to the year in the fiscal fourth quarter with respect to revenues and gross margins.”

    Dr. Bolles added, “We continue to push ahead with Project SWIFT and following the Eat Smart Disposition in December, our focus has shifted to our remaining assets. We believe that our avocado products business remains well positioned within a growing industry supported by favorable consumer trends. While this business has been impacted by the inflationary environment, we expect our fiscal fourth quarter pricing actions combined with significant operational improvements to largely mitigate the associated margin pressure and put us in a position to meet our full year segment guidance from continuing operations. Our Board remains committed to enhancing shareholder value as we seek to optimize our remaining Curation Foods assets.”

    FISCAL THIRD QUARTER 2022 BUSINESS HIGHLIGHTS:

    • Revenues of $53.1 million, an increase of 18.8% year-over-year
    • Gross profit of $13.9 million, a decrease of 3.8% year-over-year, primarily due to the timing and revenue mix at Lifecore
    • Net loss from continuing operations of $7.1 million, which includes $4.6 million of restructuring and other non-recurring charges such as legal expenses, both net of tax
    • Adjusted EBITDA of $6.4 million, compared to $7.3 million in the prior year period, a decrease of 12.3% year-over-year
    • Lifecore segment adjusted EBITDA of $8.6 million, compared to $8.1 million in the prior year period, an increase of 5.9% year-over-year
    • Curation Foods segment adjusted EBITDA from continuing operations of $(0.9) million, compared to $1.2 million in the prior year period, driven by temporary margin headwind associated with inflation which is expected to be offset by price actions in fiscal fourth quarter

    FIRST NINE MONTHS FISCAL 2022 BUSINESS HIGHLIGHTS:

    • Revenues of $138.2 million, an increase of 9.1% year-over-year
    • Gross profit of $39.0 million, a decrease of 8.8% year-over-year
    • Net loss from continuing operations of $10.5 million, which includes $7.3 million of restructuring and other non-recurring charges such as legal expenses, both net of tax
    • Adjusted EBITDA of $17.2 million, compared to $12.2 million in the prior year period, an increase of 41.1% year-over-year
    • Lifecore segment adjusted EBITDA of $20.0 million, compared to $16.8 million in the prior year period, an increase of 18.8% year-over-year
    • Curation Foods segment adjusted EBITDA from continuing operations of $2.2 million, compared to $1.9 million in the prior year period

    FISCAL THIRD QUARTER 2022 RESULTS:
    Fiscal third quarter 2022 results compared to fiscal third quarter 2021 are as follows:

    (Unaudited and in thousands, except per-share data)Three Months Ended Change
     February 27, 2022 February 28, 2021 Amount %
    Revenues$53,074  $44,690  $8,384  19%
    Gross profit 13,895   14,441   (546) (4)%
    Net loss (7,106)  (1,465)  (5,641) (385)%
    Adjusted net income (loss)* (2,486)  780   (3,266) N/M
    Diluted net loss per share (0.24)  (0.05)  (0.19) (380)%
    Adjusted diluted net income (loss) per share* (0.08)  0.03   (0.11) N/M
    EBITDA* (6,207)  717   (6,924) N/M
    Adjusted EBITDA* 6,361   7,256   (895) (12)%
    * See “Non-GAAP Financial Information” at the end of this release for more information and for a reconciliation of certain financial information.

    Revenues increased $8.4 million year-over-year, which was primarily a result of a 27.9% increase in Lifecore segment revenues and a 4.6% increase in Curation Foods segment revenues.

    Gross profit decreased $0.5 million year-over-year. Gross margin decreased 610 basis points as compared to the prior year principally due to the timing and mix of revenue earned in the third quarter, which management expects to largely reverse in the fiscal 2022 fourth quarter.

    Net loss from continuing operations increased $5.6 million to a loss of $7.1 million for fiscal third quarter, which includes $4.6 million of restructuring and non-recurring charges, net of taxes, related to consolidating and optimizing operations associated with Project SWIFT. This compares to a net loss of $1.5 million in the prior year period, which includes $2.2 million of restructuring and non-recurring charges, net of tax, related to consolidating and optimizing operations associated with Project SWIFT.

    Adjusted EBITDA decreased $0.9 million, or 12.3%, year-over-year, to $6.4 million for fiscal third quarter 2022, which excludes restructuring and other non-recurring charges. This compares to adjusted EBITDA of $7.3 million in the prior year fiscal third quarter. At the segment level during fiscal third quarter 2022, Lifecore generated $8.6 million in adjusted EBITDA, which represents an increase of $0.5 million, or 5.9%, versus the prior year period, and Curation Foods generated $(0.9) million in adjusted EBITDA as compared to $1.2 million in the prior year period.

    SEGMENT RESULTS:

    Lifecore Segment:

    (Unaudited and in thousands)Three Months Ended Change Nine Months Ended Change
    February 27, 2022 February 28, 2021 Amount % February 27, 2022 February 28, 2021 Amount %
    Revenue:               
    CDMO$24,799  $18,628  $6,171  33% $63,951  $53,374  $10,577  20%
    Fermentation 10,009   8,597   1,412  16%  17,756   18,874   (1,118) (6)%
    Total revenue$34,808  $27,225  $7,583  28% $81,707  $72,248  $9,459  13%

    Lifecore is the Company’s CDMO business focused on product development and manufacturing of sterile injectable products. Lifecore continues to expand its presence in the robust CDMO marketplace by utilizing its specialized capabilities to partner with and provide value added services to biopharmaceutical and medical device companies. Lifecore continues to drive growth and profitability with a focus on building its business development pipeline, maximizing capacity and advancing product commercialization for innovative new therapies that improve patients’ lives.

    In the fiscal third quarter 2022, Lifecore realized total revenues of $34.8 million, a 27.9% increase as compared to the prior year period driven by a 33.1% increase in its CDMO business and a 16.4% increase in its fermentation business. The Company believes that this increased performance is primarily due to a resumption in more typical ordering patterns after moving through the excess inventory levels caused by lower procedures being performed during COVID.

    Lifecore added two projects to its development pipeline in fiscal third quarter, with 24 projects as of February 27, 2022. These projects were delineated as follows: early phase or proof of concept clinical development (6), phase 1 & 2 clinical development (9), and phase 3 clinical development and scale-up commercial validation activity (9). Lifecore currently manufacturers 26 commercial products, which remains unchanged from fiscal second quarter 2022.

    Curation Foods Segment (Continuing Operations):

    (Unaudited and in thousands)Three Months Ended Change Nine Months Ended Change
    February 27, 2022 February 28, 2021 Amount % February 27, 2022 February 28, 2021 Amount %
    Revenue:               
    Avocado products$15,676  $15,378  $298  2% $48,018  $47,107  $911  2%
    Olive oil and vinegars 2,168   1,647   521  32%  7,016   5,642   1,374  24%
    Technology 422   440   (18) (4)%  1,417   1,632   (215) (13)%
    Total revenue$18,266  $17,465  $801  5% $56,451  $54,381  $2,070  4%

    Curation Foods is the Company’s natural food business. The Company continued its focus on execution of Project SWIFT – the Company’s value creation program that aims to strengthen the Curation Foods segment by simplifying the business, improving operating cost structure, and enhancing profitability with a focus on higher margin products. On December 13, 2021 the Company closed on the Eat Smart Disposition for $73.5 million in cash, subject to certain adjustments; those results have been reclassified as discontinued operations within the Company’s financial statements.

    Curation Foods realized total revenues from continuing operations of $18.3 million for the fiscal third quarter, an increase of 4.6% versus the prior year period, primarily driven by a 31.6% increase in sales velocity from O Olive and a 1.9% increase in Avocado Products.

    CASH FLOW & BALANCE SHEET
    Cash used in operations was $24.4 million for the nine month period ended February 27, 2022 compared to cash provided by operations of $10.6 million in the prior year period. Cash from investing activities increased $99.7 million versus the prior year period, primarily driven by proceeds from the Eat Smart disposition of $73.5 million plus sale of the Windset investment of $45.1 million. Capital expenditures were $18.5 million for the nine month period ended February 27, 2022 primarily focused on supporting Lifecore’s long-term growth initiatives. Cash used in financing activities was $76.2 million for the nine month period ended February 27, 2022 driven by repayments on the Company’s term debt.

    During fiscal 2022, the Company repaid a total of $109.1 million in borrowings through the utilization of its net proceeds from the Windset investment sale and the Eat Smart Disposition, which was partially offset by additional borrowings during the year. The Company had cash and cash equivalents of $1.9 million as of February 27, 2022. Total bank debt, net of cash, at fiscal third quarter end was $117.6 million, consisting of its line of credit and long-term debt, compared to $192.7 million at fiscal 2021 year end.

    FISCAL 2022 OUTLOOK:
    The Company is reiterating its previously announced guidance on a pro forma consolidated basis, and at the segment level. Guidance continues to reflect the Curation Foods’ Eat Smart Disposition on December 13, 2021, and incremental inflationary and supply chain headwind within the remaining Curation Foods business. Guidance metrics are provided below with growth figures that are compared to fiscal 2021:

    Revenue from continuing operations (full year fiscal 2022):

    • Pro forma consolidated: range of $179 million to $185 million (+4% to +8%)
    • Lifecore segment: range of $105 million to $108 million (+7% to +10%)
    • Pro forma Curation Foods segment (fiscal 2022, pro forma for the completion of the Eat Smart Disposition as if it occurred on May 31, 2021): range of $74 million to $77 million (+1% to +5%)

    Adjusted EBITDA from continuing operations (full year fiscal 2022):

    • Pro forma consolidated: range of $20.5 million to $23 million (+10% to +24%)
    • Lifecore segment: range of $26 million to $27 million (+6% to +10%)
    • Pro forma Curation Foods segment (fiscal 2022, pro forma for the completion of the Eat Smart Disposition as if it occurred on May 31, 2021): range of $3 million to $4 million (flat to +33%)
    • Other (Corporate Expense): range of ($8.0) million to ($8.5) million; reflects a $3.5 million reallocation of corporate expense from the Eat Smart Disposition to the Other segment

    Conference Call
    The live webcast can be accessed via Landec’s website on the Investor Events & Presentations page. The webcast will be available for 30 days.

    Date: Tuesday, April 5, 2022

    Time: 5:00 p.m. Eastern time (2:00 p.m. Pacific time)

    Direct Webcast link: http://ir.Landec.com/events.cfm

    To participate in the conference call via telephone, dial toll-free: (877) 407-3982 or (201) 493-6780. Please call the conference telephone number 5-10 minutes prior to the start time so the operator can register your name and organization.

    A replay of the call will be available through Tuesday, April 12, 2022 by calling toll-free: (844) 512-2921 or direct (412) 317-6671, and entering code 13728030.

    About Landec Corporation
    Landec Corporation (Nasdaq: LNDC) is a leading innovator of diversified health and wellness solutions with two operating businesses: Lifecore Biomedical, Inc. and Curation Foods, Inc. Lifecore Biomedical is a fully integrated contract development and manufacturing organization (CDMO) that offers highly differentiated capabilities in the development, fill and finish of complex sterile injectable pharmaceutical products in syringes and vials. As a leading manufacturer of premium, injectable grade Hyaluronic Acid, Lifecore brings 35 years of expertise as a partner for global and emerging biopharmaceutical and biotechnology companies across multiple therapeutic categories to bring their innovations to market. Curation Foods is focused on innovating and distributing plant-based foods with 100% clean ingredients to retail, club and foodservice channels. Curation Foods brands include Yucatan® and Cabo Fresh® avocado products and O Olive Oil & Vinegar® premium artisan products. For more information about the Company, visit Landec’s website at www.landec.com

    Non-GAAP Financial Information
    This press release contains non-GAAP financial information, including with respects to EBITDA, adjusted EBITDA, Lifecore segment adjusted EBITDA, Curation Foods segment adjusted EBITDA, and Other segment adjusted EBITDA. The Company has included reconciliations of these non-GAAP financial measures to their respective most directly comparable financial measures calculated in accordance with GAAP. See the section entitled “Non-GAAP Financial Information and Reconciliations” in this release for definitions of EBITDA, adjusted EBITDA, Lifecore segment adjusted EBITDA, Curation Foods segment adjusted EBITDA, and Other segment adjusted EBITDA.

    The Company has disclosed these non-GAAP financial measures to supplement its consolidated financial statements presented in accordance with GAAP. These non-GAAP financial measures exclude/include certain items that are included in the Company’s results reported in accordance with GAAP. Management believes these non-GAAP financial measures provide useful additional information to investors about trends in the Company’s operations and are useful for period-over-period comparisons. These non-GAAP financial measures should not be considered in isolation or as a substitute for the comparable GAAP measures. In addition, these non-GAAP financial measures may not be the same as similar measures provided by other companies due to the potential differences in methods of calculation and items being excluded/included. These non-GAAP financial measures should be read in conjunction with the Company’s consolidated financial statements presented in accordance with GAAP.

    Important Cautions Regarding Forward-Looking Statements
    This press release contains forward-looking statements regarding future events and our future results that are subject to the safe harbor created under the Private Securities Litigation Reform Act of 1995 and other safe harbors under the Securities Act of 1933 and the Securities Exchange Act of 1934. Words such as “anticipate”, “estimate”, “expect”, “project”, “plan”, “intend”, “believe”, “may”, “might”, “will”, “should”, “can have”, “likely” and similar expressions are used to identify forward-looking statements. All forward-looking statements involve certain risks and uncertainties that could cause actual results to differ materially, including such factors among others, as the timing and expenses associated with operations, the ability to achieve acceptance of the Company’s new products in the market place, weather conditions that can affect the supply and price of produce, government regulations affecting our business, the timing of regulatory approvals, uncertainties related to COVID-19 and the impact of our responses to it, the ability to successfully integrate Yucatan Foods into the Curation Foods business, and the mix between domestic and international sales. For additional information about factors that could cause actual results to differ materially from those described in the forward-looking statements, please refer to our filings with the Securities and Exchange Commission, including the risk factors contained in our most recent Quarterly Report on Form 10-Q and Annual Report on Form 10-K. Forward-looking statements represent management’s current expectations and are inherently uncertain. Except as required by law, we do not undertake any obligation to update forward-looking statements made by us to reflect subsequent events or circumstances.


    LANDEC CORPORATION
    CONSOLIDATED CONDENSED BALANCE SHEETS
    (In thousands, except par value)

     February 27, 2022 May 30, 2021
     (Unaudited)  
    ASSETS   
    Current Assets:   
    Cash and cash equivalents$1,854  $1,159 
    Accounts receivable, less allowance for credit losses 49,559   41,430 
    Inventories 73,700   63,076 
    Prepaid expenses and other current assets 6,924   5,038 
    Current assets, discontinued operations    37,618 
    Total Current Assets 132,037   148,321 
        
    Property and equipment, net 123,209   112,770 
    Operating lease right-of-use assets 8,796   7,480 
    Goodwill 33,916   33,916 
    Trademarks/tradenames, net 17,100   17,100 
    Customer relationships, net 7,476   8,532 
    Other assets 3,048   3,531 
    Other assets, discontinued operations    171,274 
    Total Assets$325,582  $502,924 
        
    LIABILITIES AND STOCKHOLDERS’ EQUITY   
    Current Liabilities:   
    Accounts payable$20,014  $16,298 
    Accrued compensation 9,757   7,754 
    Other accrued liabilities 13,735   3,955 
    Current portion of lease liabilities 5,045   1,465 
    Deferred revenue 1,614   637 
    Line of credit 39,900   29,000 
    Current liabilities, discontinued operations    42,779 
    Total Current Liabilities 90,065   101,888 
        
    Long-term debt, net 79,598   164,902 
    Long-term lease liabilities 10,342   9,581 
    Deferred taxes, net 961   6,140 
    Other non-current liabilities 544   2,870 
    Non-current liabilities, discontinued operations    14,759 
    Total Liabilities 181,510   300,140 
        
    Stockholders’ Equity:   
    Common stock, $0.001 par value; 50,000 shares authorized; 29,482 and 29,333 shares issued and outstanding at February 27, 2022 and May 30, 2021, respectively 29   29 
    Additional paid-in capital 166,943   165,533 
    Retained earnings (accumulated deficit) (22,188)  38,580 
    Accumulated other comprehensive loss (712)  (1,358)
    Total Stockholders’ Equity 144,072   202,784 
    Total Liabilities and Stockholders’ Equity$325,582  $502,924 


    LANDEC CORPORATION
    CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
    (Unaudited)
    (In thousands, except per share amounts)

     Three Months Ended Nine Months Ended
     February 27, 2022 February 28, 2021 February 27, 2022 February 28, 2021
    Product sales$53,074  $44,690  $138,158  $126,629 
    Cost of product sales 39,179   30,249   99,113   90,739 
    Gross profit 13,895   14,441   39,045   35,890 
            
    Operating costs and expenses:       
    Research and development 2,056   1,843   5,785   5,523 
    Selling, general and administrative 9,725   8,134   27,207   27,968 
    Legal settlement charge          1,763 
    Restructuring costs 5,865   2,023   8,406   2,826 
    Total operating costs and expenses 17,646   12,000   41,398   38,080 
    Operating loss (3,751)  2,441   (2,353)  (2,190)
            
    Interest income 20   13   66   31 
    Interest expense (4,105)  (2,939)  (13,877)  (6,609)
    Loss on debt refinancing    (1,110)     (1,110)
    Other (expense) income, net 454   72   642   64 
    Net loss before tax (7,382)  (1,523)  (15,522)  (9,814)
    Income tax benefit 276   58   5,012   1,025 
    Net loss from continuing operations$(7,106) $(1,465) $(10,510) $(8,789)
            
    Discontinued operations:       
    Loss from discontinued operations$(5,966) $(4,192) $(50,680) $(27,210)
    Income tax benefit 222   159   422   6,200 
    Loss from discontinued operations, net of tax (5,744)  (4,033)  (50,258)  (21,010)
    Net loss (12,850)  (5,498)  (60,768)  (29,799)
            
    Diluted net loss per share       
    Loss from continuing operations$(0.24) $(0.05) $(0.36) $(0.30)
    Loss from discontinued operations (0.19)  (0.14)  (1.71)  (0.72)
    Total diluted net loss per share$(0.43) $(0.19) $(2.06) $(1.02)
            
    Shares used in diluted per share computation 29,482   29,323   29,459   29,282 


    LANDEC CORPORATION
    CONSOLIDATED STATEMENTS OF CASH FLOWS
    (Unaudited and in thousands)

     Nine Months Ended
     February 27, 2022 February 28, 2021
    Cash flows from operating activities:   
    Net loss$(60,768) $(29,799)
    Adjustments to reconcile net loss to net cash (used in) provided by operating activities:   
    Impairment of goodwill 32,057    
    Depreciation, amortization of intangibles, debt costs, and right-of-use assets 14,488   14,808 
    Loss on disposal of property and equipment related to restructuring, net 5,185   7,881 
    Deferred taxes (5,471)  (7,307)
    Loss on sale of Eat Smart 4,354    
    Stock-based compensation expense 1,928   2,584 
    Net loss on disposal of property and equipment held and used 25   39 
    Provision (benefit) for expected credit losses (14)  284 
    Change in investment in non-public company, fair value    11,800 
    Loss on debt refinancing    1,110 
    Other, net (551)  (12)
    Changes in current assets and current liabilities:   
    Accounts receivable, net (7,525)  6,345 
    Inventories (11,910)  (10,468)
    Prepaid expenses and other current assets (1,448)  350 
    Accounts payable 13,055   6,372 
    Accrued compensation (3,849)  2,184 
    Other accrued liabilities (4,195)  3,186 
    Deferred revenue 204   1,243 
    Net cash (used in) provided by operating activities (24,435)  10,600 
        
    Cash flows from investing activities:   
    Proceeds from sale of Eat Smart 73,500    
    Sale of investment in non-public company 45,100    
    Purchases of property and equipment (18,539)  (11,383)
    Proceeds from sales of property and equipment 1,096   12,885 
    Net cash provided by investing activities 101,157   1,502 
        
    Cash flows from financing activities:   
    Proceeds from long-term debt    150,000 
    Payments on long-term debt (86,376)  (114,095)
    Proceeds from lines of credit 45,011   83,000 
    Payments on lines of credit (34,111)  (119,400)
    Taxes paid by Company for employee stock plans (518)  (297)
    Payments for debt issuance costs (169)  (9,615)
    Net cash used in financing activities (76,163)  (10,407)
        
    Net increase in cash, cash equivalents and restricted cash 559   1,695 
    Cash and cash equivalents and restricted cash, beginning of period 1,295   553 
    Cash and cash equivalents and restricted cash, end of period$1,854  $2,248 
        
    Supplemental disclosure of non-cash investing and financing activities:   
    Purchases of property and equipment on trade vendor credit$1,765  $1,124 


    LANDEC CORPORATION
    SEGMENT RESULTS
    (Unaudited and in thousands)

    (Unaudited and in thousands)Three Months Ended Change Nine Months Ended Change
    February 27, 2022 February 28, 2021 Amount % February 27, 2022 February 28, 2021 Amount %
    Revenues:               
    Curation Foods$18,266  $17,465  $801  5% $56,451  $54,381  $2,070  4%
    Lifecore 34,808   27,225   7,583  28%  81,707   72,248   9,459  13%
    Total revenues$53,074  $44,690  $8,384  19% $138,158  $126,629  $11,529  9%
                    
    Gross profit:               
    Curation Foods$990  $2,880  $(1,890) (66)% $8,661  $8,854  $(193) (2)%
    Lifecore 12,905   11,561   1,344  12%  30,384   27,036   3,348  12%
    Total gross profit$13,895  $14,441  $(546) (4)% $39,045  $35,890  $3,155  9%
                    
    Net (loss) income from continuing operations:               
    Curation Foods$(5,848) $(394) $(5,454) (1384)% $5,513  $(1,346) $6,859  N/M
    Lifecore 5,054   5,104   (50) (1)%  11,317   9,708   1,609  17%
    Other (6,312)  (6,175)  (137) (2)%  (27,340)  (17,151)  (10,189) (59)%
    Total net loss from continuing operations$(7,106) $(1,465) $(5,641) (385)% $(10,510) $(8,789) $(1,721) (20)%
    Loss from discontinued operations, net of tax:               
    Curation Foods$(2,703) $(4,033) $1,330  33% $(47,217) $(21,010) $(26,207) (125)%
    Other (3,041)     (3,041) N/M  (3,041)     (3,041) N/M
    Net (loss) income$(12,850) $(5,498) $(7,352) (134)% $(60,768) $(29,799) $(30,969) (104)%
                    
    EBITDA:               
    Curation Foods$(9,250) $(5,075) $(4,175) (82)% $(51,151) $(21,590) $(29,561) (137)%
    Lifecore 8,306   8,101   205  3%  19,729   16,829   2,900  17%
    Other (5,263)  (2,309)  (2,954) (128)%  (12,488)  (11,793)  (695) (6)%
    Total EBITDA$(6,207) $717  $(6,924) (966)% $(43,910) $(16,554) $(27,356) (165)%


    Non-GAAP Financial Information and Reconciliations

    EBITDA and adjusted EBITDA are non-GAAP financial measures. We define EBITDA as earnings before interest, income tax expense (benefit), and depreciation and amortization. We define adjusted EBITDA as EBITDA before certain restructuring and other non-recurring charges. The table below presents the reconciliation of these non-GAAP financial measures to their respective most directly comparable financial measures calculated in accordance with GAAP and other supplemental information. See “Non-GAAP Financial Information” above for further information regarding the Company’s use of non-GAAP financial measures.

    (Unaudited and in thousands)Three Months Ended Nine Months Ended
     February 27, 2022 February 28, 2021 February 27, 2022 February 28, 2021
    Net loss$(12,850) $(5,498) $(60,768) $(29,799)
    Interest expense, net of interest income 4,085   4,036   13,811   7,688 
    Income tax benefit (276)  (58)  (5,012)  (1,025)
    Depreciation and amortization 2,834   2,237   8,059   6,582 
    Total EBITDA (6,207)  717   (43,910)  (16,554)
    Restructuring and other non-recurring charges (1) 6,824   2,506   10,853   7,734 
    Loss from discontinued operations, net of tax 5,744   4,033   50,258   21,010 
    Total adjusted EBITDA$6,361  $7,256  $17,201  $12,190 


    (Unaudited and in thousands)Lifecore Curation Foods Other Total
    Three Months Ended February 27, 2022       
    Net (loss) income$5,054  $(8,551) $(9,353) $(12,850)
    Interest expense, net of interest income (18)  26   4,077   4,085 
    Income tax (benefit) expense 1,596   (1,867)  (5)  (276)
    Depreciation and amortization 1,674   1,142   18   2,834 
    Total EBITDA 8,306   (9,250)  (5,263)  (6,207)
    Restructuring and other non-recurring charges (1) 271   5,656   897   6,824 
    Loss from discontinued operations, net of tax    2,703   3,041   5,744 
    Total adjusted EBITDA$8,577  $(891) $(1,325) $6,361 
            
    Nine Months Ended February 27, 2022       
    Net (loss) income$11,317  $(41,704) $(30,381) $(60,768)
    Interest expense, net of interest income (56)  301   13,566   13,811 
    Income tax (benefit) expense 3,574   (12,843)  4,257   (5,012)
    Depreciation and amortization 4,894   3,095   70   8,059 
    Total EBITDA 19,729   (51,151)  (12,488)  (43,910)
    Restructuring and other non-recurring charges (1) 271   6,122   4,460   10,853 
    Loss from discontinued operations, net of tax    47,217   3,041   50,258 
    Total adjusted EBITDA$20,000  $2,188  $(4,987) $17,201 
            
    Three Months Ended February 28, 2021       
    Net (loss) income$5,104  $(4,427) $(6,175) $(5,498)
    Interest expense and loss on debt refinancing, net of interest income    136   3,900   4,036 
    Income tax (benefit) expense 1,612   (1,614)  (56)  (58)
    Depreciation and amortization 1,385   830   22   2,237 
    Total EBITDA 8,101   (5,075)  (2,309)  717 
    Restructuring and other non-recurring charges (1)    2,215   291   2,506 
    Loss from discontinued operations, net of tax    4,033      4,033 
    Total adjusted EBITDA$8,101  $1,173  $(2,018) $7,256 
            
    Nine Months Ended February 28, 2021       
    Net (loss) income$9,708  $(22,356) $(17,151) $(29,799)
    Interest expense and loss on debt refinancing, net of interest income    410   7,278   7,688 
    Income tax (benefit) expense 3,066   (2,095)  (1,996)  (1,025)
    Depreciation and amortization 4,055   2,451   76   6,582 
    Total EBITDA 16,829   (21,590)  (11,793)  (16,554)
    Restructuring and other non-recurring charges (1)    2,466   5,268   7,734 
    Loss from discontinued operations, net of tax    21,010      21,010 
    Total adjusted EBITDA$16,829  $1,886  $(6,525) $12,190 


    (1)During fiscal year 2020, the Company announced a restructuring plan to drive enhanced profitability, focus the business on its strategic assets, and redesign the organization to be the appropriate size to compete and thrive. This included a reduction-in-force, a reduction in leased office spaces, and the sale of non-strategic assets. Related to these continued activities, in the third quarter of fiscal year 2022, the Company incurred (1) $5.9 million of restructuring charges ($8.4 million year to date), primarily related to consulting, legal costs, and lease impairment and (2) $0.9 million ($2.5 million year to date) of certain non-recurring charges, primarily related to potential environmental and compliance matters at Curation Foods’ Avocado Products factory in Silao, Mexico, and other restructuring related legal and consulting costs.
      

    Contact Information:
    Investor Relations
    Jeff Sonnek
    (646) 277-1263
    jeff.sonnek@icrinc.com


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