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TheStreet Open House

Landec Corporation Reports Fiscal Year 2012 And Fourth Quarter Results

Stocks in this article: LNDC

--Tables and Q&A to Follow--

   

LANDEC CORPORATION

CONSOLIDATED CONDENSED BALANCE SHEETS

(In thousands)

 

May 27, 2012

May 29, 2011

(unaudited)

ASSETS

Current Assets:
Cash, cash equivalents and marketable securities $ 22,177 $ 36,259
Accounts receivable, net 32,321 22,677
Inventories, net 22,011 20,161
Deferred taxes 2,076 542
Prepaid expenses and other current assets   2,578   5,987  
Total Current Assets 81,163 85,626
 
Investments in non-public companies 22,293 16,455
Property and equipment, net 63,495 51,779
Intangible assets, net 108,605 52,256
Other assets   2,136   196  
Total Assets $ 277,692 $ 206,312  
 

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
Accounts payable $ 23,420 $ 17,047
Accrued compensation 5,782 3,080
Other accrued liabilities 18,642 3,581
Deferred revenue 162 2,657
Lines of credit 11,666
Current portion of long-term debt   7,012   4,330  
Total Current Liabilities 66,684 30,695
 
Long-term debt 40,305 15,500
Deferred taxes 18,037 11,338
Other non current liabilities 1,108 11,053
 
Stockholders' Equity
Common stock 26 27
Additional paid-in capital 119,894 119,169
Accumulated other comprehensive loss (267 )
Retained earnings   29,822   17,126  
Total stockholders' equity 149,742 136,055
Noncontrolling interest   1,816   1,671  
Total Equity   151,558   137,726  
Total Liabilities and Shareholders’ Equity $ 277,692 $ 206,312  
 

LANDEC CORPORATION

CONSOLIDATED CONDENSED STATEMENTS OF INCOME

(In thousands, except per-share data)

(unaudited)

       
Three Months Ended Twelve Months Ended
May 27,   May 29, May 27,   May 29,
  2012     2011     2012     2011  
Revenues:
Product sales $ 81,096 $ 65,650 $ 310,272 $ 267,121
Services revenues 808 792 3,138 3,391
License fees

―  

1,350 2,700 5,400
Research, development, and royalty revenues   713     308     1,442     817  
Total revenues 82,617 68,100 317,552 276,729
 
Cost of revenue:
Cost of product sales 67,263 56,895 262,859 227,167
Cost of services revenues   648     659     2,555     2,867  
Total cost of revenue 67,911 57,554 265,414 230,034
 
Gross profit 14,706 10,546 52,138 46,695
 
Operating costs and expenses:
Research and development 2,483 2,513 9,625 9,275
Selling, general and administrative 7,343 6,425 26,515 24,608
Impairment charges and acquisition costs   1,421     4,780     1,421     4,780  
Total operating costs and expenses   11,247     13,718       37,561     38,663  
Operating income (loss) 3,459 (3,172 ) 14,577 8,032
 
Dividend income 281 281 1,125 328
Interest income (39 ) 86 180 430
Interest expense (437 ) (189 ) (929 ) (820 )
Other income   736     618     5,331     472  
Net income (loss) before taxes 4,000 (2,376 ) 20,284 8,442
Income tax expense   (1,107 )   (271 )   (7,185 )   (4,181 )
Consolidated net income (loss) 2,893 (2,674 ) 13,099 4,261
Non controlling interest   (114 )   (90 )   (403 )   (341 )
Net income (loss) $ 2,779   $ (2,737 ) $ 12,696   $ 3,920  
 
Diluted net income (loss) per share $ 0.11   $ (0.10 ) $ 0.49   $ 0.15  
 
Shares used in diluted per share computations   25,928     26,627     26,126     26,626  
 

LANDEC CORPORATION FISCAL YEAR ENDED MAY 27, 2012 QUESTIONS AND ANSWERS

1) What are the details surrounding the Company‘s revenue and net income growth expectations for fiscal year 2013?

For fiscal year 2013, we are projecting that revenues will grow approximately 30% and net income will grow 25% to 35% compared to fiscal year 2012 revenues and net income. The estimated range of revenue and net income growth is outlined in the following table (in millions):

 
Revenues as reported in fiscal year 2012 $ 318
Increases in revenue in FY 2013:
Value-added, including GreenLine (a) 95-110
Lifecore 4-6
Decreases in revenue in FY 2013
Apio export (b) (6-8 )
Technology licensing (c)   (3-4 )
Projected revenue range for FY 2013 $ 408-422
 
Net income reported in fiscal year 2012 $ 12.7
Increases in pre-tax income in FY 2013:
Value-added, including GreenLine and Windset (d) 7.4-8.8
Lifecore 1.0-1.6
Decreases in net income in FY 2013:
Technology licensing, pre-tax (c) (2.7-3.2 )
Increase in income tax expense   (2.4-2.8 )
Projected net income range for FY 2013 $ 16.0-17.1  

(a) Projections assume no significant produce sourcing issues during fiscal year 2013.

(b) Projected decrease is due to the exceptional year Apio’s export business experienced in fiscal year 2012. A more normalized expectation for Apio’s export business would be annual revenues of approximately $63 million to $65 million.

(c) Projected decrease in Technology licensing revenue and pre-tax income is due to the termination of the Monsanto licensing agreement in fiscal year 2012 and the loss of revenue and pre-tax income generated from the sale of Pollinator Plus® coatings due to the sale of Landec Ag to INCOTEC in June 2012.

(d) Projections assume, due to the difficulty in estimating future changes in the fair market value of a minority investment, that the fair market value increase in our investment in Windset will be approximately the same as fiscal year 2012 and dividend income will be exactly the same, which, when combined, would result in approximately $7.0 million in pre-tax income in fiscal year 2013.

2) What are the revenues and net income projections by quarter and what are the projected capital expenditures and the depreciation/amortization expense for fiscal year 2013?

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