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Landec CEO Discusses F4Q 2011 Results - Earnings Call Transcript

For our fiscal year 2011 which ended in May revenues grew 16% to $276.7 million and adjusted EPS grew to $0.33 per share prior to a one-time $4.8 million non-cash, non-tax deductible impairment charge for the write-off of Landec Ag's goodwill.

Landec generated $14.5 million in cash from the operations this past year, up 93% from our prior fiscal year. Cash balances remain strong at $36.3 million. Landec’s achievement and results in 2011 fiscal year are based on substantial progress in each of our businesses.

Our acquisition of Lifecore exceeded our expectations in the first year. In addition to the successful integration of our Lifecore Biomedical business with Landec, Lifecore demonstrated substantial growth in revenues from $20 million prior to the acquisition to $32.5 million, representing a 63% increase in sales for our fiscal year.

Lifecore EBITDA grew from $2.9 million prior to our acquisition to $9.9 million this past fiscal year, reflecting substantial leveraging of Lifecore’s capacity utilization as we increased unit volume sales to customers. We had expected $7 million to $8 million in EBITDA, but Lifecore was able to generate $9.9 million in EBITDA and achieve the sales growth as I mentioned of over 60%.

Revenues in our Apio fruit business increased by 3% or by $7.3 million in spite of quite difficult consumer economic conditions in the food sector and in spite of terrible weather in major produce growing regions. Extremely poor weather in California and Arizona adversely affected our ability to source produce for a value-added, specialty packaging food business, resulting in approximately $5 million in weather-related variances. In spite of those difficult conditions, we continue to serve our customers well during this time period.

In the fourth quarter, the industry fresh-cut category grew 3%, which was the first time the category has shown any growth in several years. Also in the fourth quarter, we resumed sales growth in Apio's value-added vegetable business and we grew revenues 9% in the quarter.

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