For the fiscal year ending May 27, 2012, Landec will record approximately $800,000 of acquisition related expenses. In addition, the Company will record approximately $1.0 million of loan origination fees which will be amortized over approximately seven years. The Company is forecasting that GreenLine’s operating results for the period from the close of the acquisition to our fiscal year end of May 27, 2012 will offset a majority of the acquisition related expenses.
For fiscal year 2012, as a result of including GreenLine operating results for the last five weeks, we are increasing our revenue guidance and maintaining our net income guidance. For fiscal year 2012, we now expect revenues to grow more than 10% compared to our previous guidance for revenues to grow 9% to 10% and we are maintaining our guidance for net income to grow approximately 40% compared to fiscal year 2011, after adding back the one-time impairment charge of $4.8 million to net income for fiscal year 2011.
Gary Steele, Landec’s Chairman and CEO, commented, “The acquisition of GreenLine is consistent with our strategy for profitable growth in our core businesses by investing in opportunities where we can accelerate growth while increasing our net income. GreenLine’s product line is synergistic with our well established channels of distribution and significantly expands Apio’s customer base, product line and geographic presence. In addition to providing greater penetration for our products in the market and advancing Apio’s long-term growth and profitability goals, we see operational and customer synergies that can be realized in the next 12 to 24 months.”
Ron Midyett, CEO of Landec’s Apio business, added, “U.S. consumer demand is growing for the convenience of pre-washed, trimmed and ready-to-cook fresh-cut green beans. GreenLine is benefiting from this growth based on its leading market position supported by strong produce sourcing and a national distribution network to ensure year-round supply of high quality fresh-cut green bean products to its customers. With this investment we have added new growth products, significantly expanded Apio’s customer base in retail grocery, added new foodservice customers, and acquired strategic East Coast processing and distribution facilities. These new capabilities will allow Apio to offer enhanced services to our customers with a broader range of products, all with a continued commitment to product quality and food safety.”