On Tuesday, Landec Corporation (NASDAQ:LNDC) fell -1.68% with the overall traded volume of 277,202 shares above its average volume of 65,887 shares. The company has the market value of $319.07M and its EPS ratio for the past year was $-0.44. The company finished business at $11.70.
Landec Corporation (LNDC), a leading innovator of diversified health and wellness solutions within the packaged natural food and biomaterial markets, stated results for the fiscal quarter ended February 26, 2017 and first nine months of fiscal 2017.
Fiscal Third Quarter 2017 Results:
Revenues in the third quarter of fiscal 2017 raised 5% to $136.60M from $130.0M in the year-ago quarter. The increase was because of a $7.80M or 50% increase in revenues at Lifecore and an $887,000 or 14% increase in revenues in Apio’s export business. These increases in revenues were partially offset by a $1.90M or 2% decrease in revenues in Apio’s packaged fresh vegetables business.
Net income in the third quarter of fiscal 2017 was $3.50M or $0.13 per share contrast to a net loss of $21.20M or $0.78 per share in the year-ago quarter. The increase in net income was because of (1) the $34.0M ($21.50M net of tax) write down of the GreenLine trademark in the third quarter of last year, (2) a $4.70M or 92% increase in operating income at Lifecore, (3) a $5.80M or 120% increase in gross profit at Apio from favorable operational cost variances, specifically lower produce sourcing costs and improved labor efficiencies in the Company’s processing plants, and (4) a $700,000 increase in the change in the fair market value of our Windset investment. These increases in net income were partially offset by (1) a $5.60M or 76% increase in operating expenses at Apio, resulting from the Company agreeing to settle several labor related legal actions which resulted in the Company recording a $2.1 million charge during the quarter, severance expenses, and additional headcount hired during the past year in the areas of sales and financial analysis, (2) a $743,000 increase in operating expenses at Corporate for new business development activity, expenses from the O Olive acquisition and a boost in stock based compensation expenses, and (3) a $1.50M increase in income taxes, apart from the year ago third quarter tax benefit from the GreenLine trademark impairment charge.
Fiscal Nine Months 2017 Results:
Revenues in the first nine months of fiscal 2017 were basically flat at $404.80M contrast to $405.80M in the same period last year. The slight change was mainly because of a 6% decrease in revenues in Apio’s packaged fresh vegetables business offset by a 38% increase in revenues at Lifecore and an 11% increase in Apio’s export business.
Net income in the first nine months of fiscal 2017 was $8.10M, or $0.29 per share, contrast to a net loss of $16.40M, or $0.61 per share, in the first nine months of fiscal 2016. The increase in net income was because of (1) the $34.0M ($21.50M net of tax) write down of the GreenLine trademark in the third quarter of last year, (2) a $6.20M or 74% increase in operating income at Lifecore, and (3) a $9.20M or 30% increase in gross profit at Apio. These increases in net income were partially offset by (1) an $8.10M or 33% increase in operating expenses at Apio, which includes the $2.10M legal settlement charge, (2) a $1.30M increase in the operating loss at Corporate consisting of a $764,000 reduction in gross profit because of the completion of a licensing agreement during fiscal 2016 and a $546,000 increase in operating expenses, and (3) from a $1.30M increase in income taxes, apart from the year ago nine months tax benefit from the GreenLine trademark impairment charge.
Administration Comments and Guidance for Fiscal 2017:
“We have been very active since our last earnings release three months ago with efforts to continue to position Landec as a true trendsetter in the health and wellness space,” stated Ms. Hemmeter. “We declared the Eat Smart 100% Clean Label Program, we attained O Olive Oil, Inc., we extended our agreement with Windset for five more years, we named Debbie Carosella to our board of directors and we agreed to settle several labor related legal actions that have been going on for over 18 months, thus avoiding the unknown outcome of trials and potentially spending millions of dollars on future legal fees for litigation.”
Mr. Skinner added, “As declared last week, we now expect our EPS for our fiscal fourth quarter to range from $0.09 to $0.11 which results in a revised annual EPS range of $0.38 to $0.40. The decline in our original annual net income guidance is driven by the legal settlement charge recorded during our fiscal third quarter plus the impact that the heavy rains in California since the starting of January are predictable to have on our fiscal fourth quarter results. The rains have damaged crops and have delayed our ability to plant fields during January and February which will result in shortages of key vegetable crops during our fiscal fourth quarter. In addition, we now expect revenues for fiscal 2017 to be flat contrast to fiscal 2016 and we expect merged cash flow from operations of about $30 to $35.0M and capital expenditures of about $20 to $25.0M for fiscal 2017.
“Our balance sheet and cash generation remain strong. We ended the third quarter with $12.70M in cash which was up $2.80M from fiscal year end 2016. Debt at the end of the third quarter was $52.20M with a debt to equity ratio of 23%, contrast to $61.10M and 29%, respectively, at fiscal year-end 2016. Working capital strengthened to $39.40M, up 31% contrast to $30.0M at fiscal year-end 2016. Cash flow from operations for the first nine months was $23.20M, up from $6.40M for the same period last year. Capital expenditures for the first nine months were $9.50M, down from $26.20M for the same period last year. The net effect resulted in free cash flow of $13.70M for the first nine months contrast to a negative free cash flow of $19.80M for the same period last year, an improvement of $33.50M,” concluded Mr. Skinner.
Technical Analysis:
The company has 27.27M shares outstanding and 94.70% shares of the company were owned by institutional investors. The company has 0.59 value in price to sale ratio while price to book ratio was recorded as 1.46. The company earned $-11.80M in prior twelve months on revenue of $533.60M. It beta stands at 1.19.
Analyst recommendation for this stock stands at 2.30.