Landec (LNDC) Reports In-Line Q1 EPS, Revenues Beat; FY20 EPS Views Above Consensus, Offers Q2 EPS Guidance, Q2 Revenue Outlook Above Consensus

October 1, 2019 4:10 PM EDT

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Landec (NASDAQ: LNDC) reported Q1 EPS of ($0.16), in-line with the analyst estimate of ($0.16). Revenue for the quarter came in at $138.7 million versus the consensus estimate of $131.14 million.

Dr. Albert Bolles, Landec’s President and CEO commented, “First quarter results met our guidance and we are set up for a successful year at both Lifecore and Curation Foods. We are investing capital at Lifecore to expand capacity and at Curation Foods to further automate our processing facilities and drive out costs. Our people are integral to our success and we are investing in talent across our entire organization to drive meaningful change. The results of these efforts are beginning to show in an improved culture at Landec, which is squarely focused on profitability and on executing with excellence with an emphasis on productivity to increase margins, while fostering a culture of sustainability.”

GUIDANCE:

Landec sees Q2 2020 EPS of ($0.06)-($0.04), versus the consensus of $0.02. Landec sees Q2 2020 revenue of $142-146 million, versus the consensus of $136.51 million.

Landec sees FY2020 EPS of $0.28-$0.32, versus the consensus of $0.27.

Outlook and Fiscal 2020 Guidance (see Questions & Answers section at the end of this release for further details)

Greg Skinner Landec’s EVP of Finance and CFO commented, “We are reiterating our full year fiscal 2020 guidance and providing our forecast for fiscal second quarter. We plan to generate substantial profits in the second half of the fiscal year due to the timing of revenues and profits at Lifecore, the timing of revenues and profits from the sale of avocado products, and due to a large majority of the projected cost savings from our cost out initiatives occurring in the second half of fiscal 2020. Our capital allocation priorities remain focused on supporting the growth of both of our operating businesses while balancing that with efforts to reduce our leverage. We were in compliance with all our debt covenants at quarter end and expect to be in compliance going forward.”

The Company is reiterating its full year fiscal 2020 guidance as follows:

  • Consolidated revenues from continuing operations to grow 8% to 10% compared to fiscal 2019
  • Earnings per share to be $0.28 to $0.32
  • Cash flow from operations to be $26 million to $30 million
  • Consolidated EBITDA to be in the range of $36 million to $40 million

The Company is introducing fiscal second quarter 2020 guidance as follows:

  • Revenues to be $142 million to $146 million
  • Net loss per share of $0.04 to $0.06 due to certain shipments for Lifecore, O and avocado products expected for the second quarter shifting to the third quarter and a portion of the cost out savings for the second quarter delayed to the second half
  • EBITDA to be in the range of $4 million to $5 million

“I have confidence in our guidance for fiscal 2020. At Lifecore, we will continue to expand and advance our development pipeline and invest in capacity to meet projected future demand. At Curation Foods, we will focus on four priorities for a strong financial performance. We will continue to simplify our business, focus on fewer new products that deliver high impact, and execute with operational excellence, while driving cost out. At Lifecore, we will continue to invest in topline growth by supporting business development opportunities and capacity expansion. I am confident that we have an action plan in place to make the changes necessary to be successful and secure long-term profitable growth. Lifecore and Curation Foods revenues, and more importantly profits, are expected to begin to ramp up during the third and fourth quarters, at the same time as the changes we have outlined begin to take hold,” concluded Bolles.

For earnings history and earnings-related data on Landec (LNDC) click here.



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