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Landec Corp. Reports Operating Results (10-Q)

January 04, 2013 | About:
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10qk

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Landec Corp. (LNDC) filed Quarterly Report for the period ended 2012-11-25.

Landec Corporation has a market cap of $252.5 million; its shares were traded at around $12.13 with a P/E ratio of 18.9 and P/S ratio of 0.8. Landec Corporation had an annual average earning growth of 23.4% over the past 10 years.

Highlight of Business Operations:

Apio s export business is a buy/sell business that realizes a gross margin in the 5-8% range. The increase in gross profit for Apio s export business during the three months ended November 25, 2012 compared to the same period last year was due to the 16% increase in revenues. The 16% increase in revenues was higher than the growth in gross profit because of an unfavorable product mix changes to lower margin products which resulted in a lower gross margin during the second quarter of fiscal year 2013 of 7.2% compared to a gross margin of 7.4% during the second quarter of fiscal year 2012.

The increase in S,G&A expenses for the six months ended November 25, 2012 compared to the same period last year was primarily due to: (1) $3.0 million of S,G&A expenses at GreenLine which was acquired on April 23, 2012, (2) a $1.8 million increase in SG&A at Apio, excluding GreenLine, due to the amortization of the customer base intangible acquired in the acquisition of GreenLine, an increase in salary and bonus expenses and additional sales and marketing expenses associated with the increase in revenues, (3) a $282,000 increase at Lifecore due to the timing of the recognition of certain S,G&A expenses within the fiscal year and (4) a $234,000 increase at Corporate due to increased accounting, tax and legal fees. These increases were partially offset by the $3.9 million reversal of the earn-out liability.

The increase in S,G&A expenses for the six months ended November 25, 2012 compared to the same period last year was primarily due to: (1) $3.0 million of S,G&A expenses at GreenLine which was acquired on April 23, 2012, (2) a $1.8 million increase in SG&A at Apio, excluding GreenLine, due to the amortization of the customer base intangible acquired in the acquisition of GreenLine, an increase in salary and bonus expenses and additional sales and marketing expenses associated with the increase in revenues, (3) a $282,000 increase at Lifecore due to the timing of the recognition of certain S,G&A expenses within the fiscal year and (4) a $234,000 increase at Corporate due to increased accounting, tax and legal fees. These increases were partially offset by the $3.9 million reversal of the earn-out liability.

The primary factors which increased working capital during the first quarter of fiscal year 2013 were (a) an $8.6 million increase in receivables primarily due to the timing of receipts at Apio and that revenues in November this year were $15.2 million higher than November of last year, (b) a $1.8 million decrease in accrued liabilities primarily from paying bonuses earned in fiscal year 2012 during the first quarter of fiscal year 2013 and (c) a $2.4 million increase in inventories at Apio as a result of building inventory for a projected increase in revenues. Working capital decreased during the first six months of fiscal year 2013 because of a $3.3 million increase in accounts payable due to the addition of GreenLine related payables partially offset by a decrease in payables at Lifecore due to the timing of payments.

The primary factors which increased working capital during the first quarter of fiscal year 2013 were (a) an $8.6 million increase in receivables primarily due to the timing of receipts at Apio and that revenues in November this year were $15.2 million higher than November of last year, (b) a $1.8 million decrease in accrued liabilities primarily from paying bonuses earned in fiscal year 2012 during the first quarter of fiscal year 2013 and (c) a $2.4 million increase in inventories at Apio as a result of building inventory for a projected increase in revenues. Working capital decreased during the first six months of fiscal year 2013 because of a $3.3 million increase in accounts payable due to the addition of GreenLine related payables partially offset by a decrease in payables at Lifecore due to the timing of payments.

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