Landec Corp. Reports Operating Results (10-Q)
Landec Corp. has a market cap of $144.9 million; its shares were traded at around $5.49 with a P/E ratio of 16.1 and P/S ratio of 0.5. Landec Corp. had an annual average earning growth of 7.4% over the past 5 years.
Highlight of Business Operations:Landec generated $4.4 million of cash from operating activities during the three months ended August 28, 2011, the same amount generated from operating activities for the three months ended August 29, 2010. The primary sources of cash from operating activities during the three months ended August 28, 2011 were from (1) generating $2.0 million of net income, (2) $1.4 million of depreciation and amortization, and (3) a net decrease of $1.1 million in working capital, excluding the decrease in income taxes receivable which is offset by the tax benefit from stock-based compensation. The primary changes in working capital were (a) a $1.3 million decrease in receivables primarily due to the timing of receipts at Apio, (b) a $1.4 million increase in accounts payable resulting from the timing of payments and (c) a $1.5 million decrease in deferred revenue primarily due to recognizing $1.4 million of revenue associated with deferred revenue from the Monsanto licensing agreement during the first three months of fiscal year 2012.
Apio s export business is a buy/sell business that realizes a commission-based margin in the 5-8% range. The increase in gross profit for Apio s export business during the three months ended August 28, 2011 compared to the same period last year was due to the 30% increase in revenues. The 30% increase in revenues was higher than the growth in gross profit because of unfavorable product mix changes to lower margin products which resulted in a lower gross margin during the first quarter of fiscal year 2012 of 4.7% compared to a gross margin of 5.7% during the first quarter of fiscal year 2011.
Net cash used in investing activities for the three months ended August 28, 2011 was $5.5 million compared to $22.1 million for the same period last year. The primary uses of cash in investing activities during the first quarter of fiscal year 2012 were for the purchase of $1.6 million of property, plant and equipment primarily for the further automation of Apio s value-added processing facility and facility modifications and purchased equipment to support Lifecore s business growth and from the net purchases of $4.0 million of marketable securities.
Net cash provided by financing activities for the three months ended August 28, 2011 was $298,000 compared to net cash used in financing activities of $159,000 for the same period last year. The net cash provided by financing activities during the first quarter of fiscal year 2012 was primarily due to the tax benefit from stock-based compensation of $1.3 million, partially offset by $1.0 million of long-term debt payments.
The increase in dividend income was due to dividends accrued from the $15 million preferred stock investment in Windset made on February 15, 2011 which yields a cash dividend of 7.5% annually. The $281,000 represents accrued dividends for the three months ended August 28, 2011.
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