Landec Corporation (Nasdaq:LNDC), today reported results for the third quarter and first nine months of fiscal year 2011. For the third quarter of fiscal year 2011, revenues increased 26% to $73.5 million and net income increased 33% to $2.3 million compared to the third quarter of fiscal year 2010.
Third Quarter Results
Landec revenues increased $15.4 million during the third quarter of fiscal year 2011 compared to the third quarter of fiscal year 2010, primarily due to the recently acquired hyaluronan-based biomaterials subsidiary, Lifecore Biomedical, Inc., which generated $12.2 million in revenues. In addition, Apio, Inc. export revenues increased $3.7 million, or 43%, compared to the third quarter last year. Increases in revenues were partially offset by lower revenues from Apio’s value-added, fresh-cut vegetable business due to weather-related produce sourcing issues.
Net income increased for the third quarter of fiscal year 2011 to $2.3 million, or $0.09 per diluted share, due to the $4.2 million of net income before taxes from Lifecore. The increase in net income was partially offset by a $2.4 million decrease in Apio net income before taxes primarily due to Apio’s value-added business, and from a $917,000 increase in operating costs at Corporate, primarily attributed to an increase in stock based compensation expenses and higher accounting and tax service fees.
Gross margin improved 3.0 percentage points to 17.0% during the third quarter of fiscal year 2011 compared to 14.0% in the third quarter of fiscal year 2010, representing a 54%, or $4.4 million, increase in gross profit. This increase is attributed to $6.8 million in gross profit contributed by Lifecore, partially offset by the $2.6 million decrease in gross profit in Apio’s value-added business.
Gary Steele, Landec Chairman and CEO, commented, “Considerable progress was made during Landec’s third quarter including: (1) the continuing successful integration of Lifecore with very good results, (2) progress with Monsanto in going from laboratory chemistry to biological lab tests, (3) the advancement by Air Products using Landec’s Intelimer® technology for personal care products which has now been formulated into nearly 50 products, and (4) continuing expansion by Chiquita of its program for Fresh & Ready® Avocados packaged in Landec’s BreatheWay® technology.”