Lifecore Biomedical, Inc. (“Lifecore” or the “Company”), a fully
integrated contract development and manufacturing organization
(“CDMO”), reported results for the fiscal 2023 third quarter ended
February 26, 2023.
CEO COMMENTS:
James G. Hall, President and Chief Executive
Officer of Lifecore, commented, "We took a noteworthy step forward
last week with the execution of an enhanced Supply Agreement with a
significant, long-term customer, Alcon, as well as completing a
comprehensive restructuring of our debt arrangements led by Alcon.
These transactions allow the Company to clear the existing Going
Concern qualification and create a more stable and sustainable
business model. In combination with the sale of our remaining
Curation Foods segment business in early April, Lifecore is
beginning a new chapter as a stand-alone CDMO. Going forward, we
remain focused on continuing to execute on our business plan and
evaluate potential strategic alternatives so as to determine the
best path forward to maximize value for our stockholders."
Mr. Hall continued, "Our fiscal third quarter
results came in as expected and reflect a continuation of the
timing differences we experienced in the second quarter resulting
from delayed commercialization of certain customers’ projects,
onboarding new development projects that are in the earlier, lower
revenue stages of development and timing of fermentation revenues.
Despite this temporary deceleration, we have made significant
advancements in our commercial development pipeline, including the
expanded supply agreement for HA fermentation with Alcon, as well
as further advancements in our development pipeline, in which we
are seeing increased customer interest in partnering with Lifecore.
The product of these advancements will be visible in fiscal fourth
quarter performance with a sequential step up in Lifecore's segment
adjusted EBITDA that approximates a doubling of fiscal third
quarter results."
LIFECORE FISCAL
THIRD QUARTER 2023 FINANCIAL
HIGHLIGHTS:As previously reported, on December 13, 2021,
the Company closed on the sale of its Curation Foods' fresh
packaged salads and vegetables business (the “Eat Smart
Disposition”), and on February 7, 2023, the Company closed on the
sale of its avocado products business (the "Yucatan Disposition"),
and as such, those results are reflected as discontinued operations
in all periods presented within the Company’s financial statements
reported herein. The operations associated with the Company's
remaining Curation Foods assets are reflected as part of the
Curation Foods segment in all periods presented within the
Company’s financial statements reported herein.
- Consolidated revenues of $27.6
million, a decrease of 26.2% year-over-year.
- Consolidated gross profit of $6.0
million, a decrease of $6.9 million, or 53.5% year-over-year.
- Consolidated net loss from
continuing operations of $15.5 million, which includes $8.9 million
of restructuring and other non-recurring charges such as legal
expenses, both net of tax.
- Consolidated adjusted EBITDA of
$1.5 million, compared to $6.7 million in the prior year
period.
- Lifecore segment adjusted EBITDA of
$3.0 million, compared to $8.6 million in the prior year period,
which reflects a shift in the timing of shipments to customers, the
lower development revenue associated with a delay in onboarding new
customers, as well as a higher mix of earlier stage projects with
lower initial revenues versus the prior year period.
REMOVAL OF GOING CONCERN
QUALIFICATIONAs further described in our Quarterly Report
on Form 10-Q for the three months ended February 26, 2023 (the
“Current 10-Q”), the Company evaluated its financial condition,
and, based on this evaluation, the Company has determined that the
existence of those certain conditions and events that gave rise to
a substantial doubt about the Company’s ability to continue as a
going concern within one year following the filing date of the
Current 10-Q were no longer present, and thus the Company has
removed its previously announced going concern qualification. As a
result of this determination, all outstanding borrowings under the
Company’s existing credit agreements are anticipated to be
reclassified to long term on the consolidated balance sheet as of
May 31, 2023.
CONSOLIDATED FISCAL
THIRD QUARTER 2023 RESULTS:Fiscal
third quarter 2023 results compared to fiscal third quarter 2022
are as follows:
(Unaudited and in thousands,
except per-share data) |
|
Three Months Ended |
|
Change |
|
|
February 26, 2023 |
|
February 27, 2022 |
|
Amount |
|
% |
Revenues |
|
$ |
27,600 |
|
|
$ |
37,399 |
|
|
$ |
(9,799 |
) |
|
(26)% |
Gross profit |
|
|
5,978 |
|
|
|
12,866 |
|
|
|
(6,888 |
) |
|
(54)% |
Net income (loss) |
|
|
(15,461 |
) |
|
|
(6,638 |
) |
|
|
(8,823 |
) |
|
(133)% |
Adjusted net income
(loss)* |
|
|
(6,532 |
) |
|
|
(1,638 |
) |
|
|
(4,894 |
) |
|
(299)% |
Diluted net income (loss) per
share |
|
|
(0.51 |
) |
|
|
(0.23 |
) |
|
|
(0.28 |
) |
|
(122)% |
Adjusted diluted net income
(loss) per share* |
|
|
(0.22 |
) |
|
|
(0.06 |
) |
|
|
(0.16 |
) |
|
(267)% |
EBITDA* |
|
|
(32,195 |
) |
|
|
(7,092 |
) |
|
|
(25,103 |
) |
|
(354)% |
Adjusted EBITDA* |
|
|
1,451 |
|
|
|
6,740 |
|
|
|
(5,289 |
) |
|
(78)% |
* See “Non-GAAP Financial Information” at the
end of this release as to how the Company defines these non-GAAP
financial measures and for a reconciliation thereof.
Revenues decreased $9.8 million year-over-year,
which was primarily a result of a $8.5 million decrease in Lifecore
segment revenues.
Gross profit decreased $6.9 million
year-over-year, which was driven by a $6.8 million decrease in the
Lifecore segment and a $0.1 million decrease in the Curation Foods
segment.
Net loss from continuing operations increased
$8.8 million to a loss of $15.5 million for fiscal third quarter
2023, which includes $8.9 million of restructuring and
non-recurring charges, net of taxes, related to consolidating and
optimizing operations associated with the Company's strategy to
divest its Curation Foods assets. This compares to a net loss of
$6.6 million in the prior year period, which includes $4.5 million
of restructuring and non-recurring charges, net of tax, similarly
related to consolidating and optimizing its Curation Foods
operations.
SEGMENT
RESULTS:Lifecore Segment:
(Unaudited and in
thousands) |
|
Three Months Ended |
|
Change |
|
Nine Months Ended |
|
Change |
|
February 26, 2023 |
|
February 27, 2022 |
|
Amount |
|
% |
|
February 26, 2023 |
|
February 27, 2022 |
|
Amount |
|
% |
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CDMO |
|
$ |
17,809 |
|
$ |
24,799 |
|
$ |
(6,990 |
) |
|
(28)% |
|
$ |
52,088 |
|
$ |
63,951 |
|
$ |
(11,863 |
) |
|
(19)% |
Fermentation |
|
|
8,521 |
|
|
10,009 |
|
|
(1,488 |
) |
|
(15)% |
|
|
19,635 |
|
|
17,756 |
|
|
1,879 |
|
|
11% |
Total revenue |
|
$ |
26,330 |
|
$ |
34,808 |
|
$ |
(8,478 |
) |
|
(24)% |
|
$ |
71,723 |
|
$ |
81,707 |
|
$ |
(9,984 |
) |
|
(12)% |
Lifecore is the Company’s CDMO business focused
on product development and manufacturing of sterile injectable
products. Lifecore continues to expand its presence in the robust
CDMO marketplace by utilizing its specialized capabilities to
partner with and provide value-added services to biopharmaceutical
and medical device companies. Lifecore continues to seek to drive
growth with a focus on building its business development pipeline,
maximizing capacity and advancing product commercialization for
innovative new therapies that improve patients’ lives.
In the fiscal third quarter 2023, Lifecore
realized total revenues of $26.3 million, representing a decline of
24.4% as compared to the prior year period, primarily driven by a
28.2% decrease in its CDMO business and a 14.9% decrease in its
Hyaluronic Acid ("HA") raw material manufacturing (fermentation)
business. The decrease in CDMO revenue was primarily due to two
prior year late-stage development customers’ delay in
commercializing their products in the current year, a shift in the
timing of shipments to customers, and lower development revenue
associated with a earlier stage, lower revenue development projects
with new customers. The decrease in HA raw material manufacturing
revenue was primarily due to shipment timing from the prior year
period.
Lifecore's development pipeline decreased by one
to 24 active development programs under contract as of the end of
fiscal 2023 third quarter. These projects are delineated as
follows: early phase or proof of concept (eight projects), Phase 1
and Phase 2 clinical development (seven projects), and Phase 3
clinical development or scale-up/commercial validation activity
(nine projects). Lifecore currently manufactures 29 commercial
products for 14 clients, which is an increase of three from fiscal
second quarter 2023.
Curation Foods Segment:
(Unaudited and in
thousands) |
|
Three Months Ended |
|
Change |
|
Nine Months Ended |
|
Change |
|
February 26, 2023 |
|
February 27, 2022 |
|
Amount |
|
% |
|
February 26, 2023 |
|
February 27, 2022 |
|
Amount |
|
% |
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Olive oil and vinegars |
|
$ |
1,270 |
|
$ |
2,169 |
|
$ |
(899 |
) |
|
(41)% |
|
$ |
6,025 |
|
$ |
7,016 |
|
$ |
(991 |
) |
|
(14)% |
Technology |
|
|
— |
|
|
422 |
|
|
(422 |
) |
|
(100)% |
|
|
— |
|
|
1,417 |
|
|
(1,417 |
) |
|
(100)% |
Total revenue |
|
$ |
1,270 |
|
$ |
2,591 |
|
$ |
(1,321 |
) |
|
(51)% |
|
$ |
6,025 |
|
$ |
8,433 |
|
$ |
(2,408 |
) |
|
(29)% |
Curation Foods is the Company’s natural food
business, which has since been divested through a series of
strategic actions. On December 13, 2021 the Company closed on the
Eat Smart Disposition for $73.5 million in cash. On June 2, 2022
the Company sold its BreatheWay business for $3.2 million in cash.
On February 7, 2023, the Company closed its Yucatan Disposition for
$17.5 million in cash. Additionally, subsequent to fiscal third
quarter end, on April 6, 2023, the Company sold its remaining
Curation Foods' asset, O Olive Oil and Vinegar, for $6.2 million,
subject to customary post-closing adjustments.
CASH FLOW & BALANCE
SHEETCash used in operations was $17.2 million for the
nine-month period ended February 26, 2023 compared to $22.0
million of cash used in the prior year period. Cash provided by
investing activities decreased $95.4 million compared to the prior
year period to $3.3 million, primarily due to the timing of asset
sales. Capital expenditures were $12.3 million for the nine-month
period ended February 26, 2023 which were primarily focused on
investing in Lifecore’s long-term growth initiatives. Cash provided
by financing activities was $15.1 million for the nine-month period
ended February 26, 2023, driven primarily by the previously
publicly announced sale of common and preferred stock.
On January 9, 2023, the Company announced the
closing of a $38.75 million private placement (the “Preferred
PIPE”) of newly designated Series A convertible preferred stock of
the Company. Simultaneously, the Company also amended its credit
agreements to provide for, among other things, relief from certain
financial covenants in effect at that time.
The Company had cash and cash equivalents of
$3.0 million as of February 26, 2023. Total bank debt, net of
cash, at February 26, 2023 was $112.0 million, consisting of its
line of credit and term debt, compared to $137.2 million at fiscal
2022 year end.
Subsequent to fiscal third quarter end and as
previously announced, on May 22, 2023, the Company entered into
$150 million of new credit arrangements with Alcon, including a
six-year credit agreement and a sale and leaseback of certain HA
fermentation equipment which replaced its existing term loan. The
term facility bears interest at the rate of 10%, which is payable
in kind (“PIK”) for the first three years, and payable 3% in cash
interest and 7% PIK interest thereafter until maturity. Alcon and
the Company also entered into an equipment sale and leaseback
transaction related to certain HA fermentation assets, with a lease
term of ten years, subject to certain repurchase rights.
Concurrently with this arrangement, the Company
and BMO, the Company’s current lender under its existing
asset-based lending ("ABL") revolving credit facility, entered into
an amendment to the ABL revolving credit facility, which, among
other things, contains waivers for all current defaults under the
Company's ABL credit facility.
CONFERENCE CALLThe live webcast
can be accessed via Lifecore's website on the Investor Events &
Presentations page. The webcast will be available for 30 days.
Date: Thursday, June 1,
2023
Time: 7:30 a.m. Central time
(8:30 a.m. Eastern time)
Webcast link:
http://ir.lifecore.com/events-presentations
To participate in the conference call via
telephone, dial toll-free: (844) 826-3033 or (412) 317-5185. Please
call the conference telephone number 5-10 minutes prior to the
start time so the operator can register your name and
organization.
A replay of the call will be available through
Thursday, June 8, 2023 by calling toll-free: (844) 512-2921 or
direct (412) 317-6671, and entering code 10178817.
About Lifecore
BiomedicalLifecore Biomedical, Inc. is a fully integrated
contract development and manufacturing organization (CDMO) that
offers highly differentiated capabilities in the development, fill
and finish of complex sterile injectable pharmaceutical products in
syringes and vials. As a leading manufacturer of premium,
injectable grade Hyaluronic Acid, Lifecore brings more than 40
years of expertise as a partner for global and emerging
biopharmaceutical and biotechnology companies across multiple
therapeutic categories to bring their innovations to market. For
more information about the Company, visit Lifecore’s website at
www.lifecore.com.
Non-GAAP Financial
InformationThis press release contains non-GAAP financial
information, including with respects to EBITDA, adjusted EBITDA,
Lifecore segment adjusted EBITDA, Curation Foods segment adjusted
EBITDA, and Other segment adjusted EBITDA. The Company has included
reconciliations of these non-GAAP financial measures to their
respective most directly comparable financial measures calculated
in accordance with GAAP. See the section entitled “Non-GAAP
Financial Information and Reconciliations” in this release for
definitions of EBITDA, adjusted EBITDA, Lifecore segment adjusted
EBITDA, Curation Foods segment adjusted EBITDA, and Other segment
adjusted EBITDA.
The Company has disclosed these non-GAAP
financial measures to supplement its consolidated financial
statements presented in accordance with GAAP. These non-GAAP
financial measures exclude/include certain items that are included
in the Company’s results reported in accordance with GAAP.
Management believes these non-GAAP financial measures provide
useful additional information to investors about trends in the
Company’s operations and are useful for period-over-period
comparisons. These non-GAAP financial measures should not be
considered in isolation or as a substitute for the comparable GAAP
measures. In addition, these non-GAAP financial measures may not be
the same as similar measures provided by other companies due to the
potential differences in methods of calculation and items being
excluded/included. These non-GAAP financial measures should be read
in conjunction with the Company’s consolidated financial statements
presented in accordance with GAAP.
Important Cautions Regarding
Forward-Looking StatementsThis press release contains
forward-looking statements regarding future events and our future
results that are subject to the safe harbor created under the
Private Securities Litigation Reform Act of 1995 and other safe
harbors under the Securities Act of 1933 and the Securities
Exchange Act of 1934. Words such as “anticipate”, “estimate”,
“expect”, “project”, “plan”, “intend”, “believe”, “may”, “might”,
“will”, “should”, “can have”, “likely” and similar expressions are
used to identify forward-looking statements. All forward-looking
statements involve certain risks and uncertainties that could cause
actual results to differ materially, including such factors among
others, as the outcome of any evaluation of the Company’s strategic
alternatives or any discussions with any potential bidders related
thereto the ability of the Company to continue as a going concern,
the ability of the Company to conduct its strategic review process
in a timely manner or at all, the timing and needs related to
capital expenditures, any future relationship between Alcon and the
Company, if any, the ability of the Company to conduct its
strategic review process in a timely manner or at all, the
Company’s ability to successfully complete the transition of the
Company’s business and operations to focus on Lifecore, the timing
and needs related to capital expenditures, the timing and expenses
associated with operations, the ability to achieve acceptance of
the Company’s new products in the market place, government
regulations affecting our business, the timing of regulatory
approvals, uncertainties related to COVID-19 and the impact of our
responses to it, and the mix between domestic and international
sales. For additional information about factors that could cause
actual results to differ materially from those described in the
forward-looking statements, please refer to our filings with the
Securities and Exchange Commission, including the risk factors
contained in our most recent Quarterly Report on Form 10-Q and
Annual Report on Form 10-K/A. Forward-looking statements represent
management’s current expectations and are inherently uncertain.
Except as required by law, we do not undertake any obligation to
update forward-looking statements made by us to reflect subsequent
events or circumstances.
LIFECORE
BIOMEDICAL, INC. |
CONSOLIDATED
CONDENSED BALANCE SHEETS |
(In thousands,
except par value) |
|
|
February 26, 2023 |
|
May 29, 2022 |
|
(Unaudited) |
|
|
ASSETS |
|
|
|
Current Assets: |
|
|
|
Cash and cash equivalents |
$ |
2,950 |
|
|
$ |
991 |
|
Accounts receivable, less allowance for credit losses |
|
32,371 |
|
|
|
40,094 |
|
Inventories |
|
48,696 |
|
|
|
44,300 |
|
Prepaid expenses and other current assets |
|
4,422 |
|
|
|
5,183 |
|
Current assets, discontinued operations |
|
— |
|
|
|
33,144 |
|
Total Current Assets |
|
88,439 |
|
|
|
123,712 |
|
|
|
|
|
Property and equipment,
net |
|
120,799 |
|
|
|
115,031 |
|
Operating lease right-of-use
assets |
|
5,924 |
|
|
|
6,519 |
|
Goodwill |
|
13,881 |
|
|
|
13,881 |
|
Trademarks/tradenames |
|
4,400 |
|
|
|
4,700 |
|
Other assets |
|
2,710 |
|
|
|
2,900 |
|
Other assets, discontinued
operations |
|
— |
|
|
|
11,063 |
|
Total Assets |
$ |
236,153 |
|
|
$ |
277,806 |
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
Current Liabilities: |
|
|
|
Accounts payable |
$ |
14,762 |
|
|
$ |
12,988 |
|
Accrued compensation |
|
6,733 |
|
|
|
8,941 |
|
Other accrued liabilities |
|
12,012 |
|
|
|
6,847 |
|
Current portion of lease liabilities |
|
1,455 |
|
|
|
4,592 |
|
Deferred revenue |
|
2,711 |
|
|
|
919 |
|
Line of credit |
|
— |
|
|
|
40,000 |
|
Current portion of long-term debt, net |
|
— |
|
|
|
98,178 |
|
Current liabilities, discontinued operations |
|
— |
|
|
|
4,345 |
|
Total Current Liabilities |
|
37,673 |
|
|
|
176,810 |
|
|
|
|
|
Line of credit |
|
16,000 |
|
|
|
— |
|
Long-term debt, net |
|
98,964 |
|
|
|
— |
|
Long-term lease
liabilities |
|
10,516 |
|
|
|
8,356 |
|
Deferred taxes, net |
|
80 |
|
|
|
126 |
|
Other non-current
liabilities |
|
203 |
|
|
|
190 |
|
Non-current liabilities,
discontinued operations |
|
— |
|
|
|
1,627 |
|
Total Liabilities |
|
163,436 |
|
|
|
187,109 |
|
|
|
|
|
Convertible Preferred stock,
$0.001 par value; 2,000 shares authorized; 39 and 0 shares issued
and outstanding at February 26, 2023 and May 29, 2022,
respectively |
|
38,510 |
|
|
|
— |
|
|
|
|
|
Stockholders’ Equity: |
|
|
|
Common stock, $0.001 par
value; 50,000 shares authorized; 30,319 and 29,513 shares issued
and outstanding at February 26, 2023 and May 29, 2022,
respectively |
|
30 |
|
|
|
30 |
|
Additional paid-in
capital |
|
174,268 |
|
|
|
167,352 |
|
Accumulated deficit |
|
(140,091 |
) |
|
|
(76,099 |
) |
Accumulated other
comprehensive loss |
|
— |
|
|
|
(586 |
) |
Total Stockholders’
Equity |
|
34,207 |
|
|
|
90,697 |
|
Total Liabilities and
Stockholders’ Equity |
$ |
236,153 |
|
|
$ |
277,806 |
|
LIFECORE BIOMEDICAL, INC. |
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE (LOSS)
INCOME |
(Unaudited) (In thousands, except per share amounts) |
|
|
Three Months Ended |
|
Nine Months Ended |
|
February 26, 2023 |
|
February 27, 2022 |
|
February 26, 2023 |
|
February 27, 2022 |
Product sales |
$ |
27,600 |
|
|
$ |
37,399 |
|
|
$ |
77,748 |
|
|
$ |
90,140 |
|
Cost of product sales |
|
21,622 |
|
|
|
24,533 |
|
|
|
58,178 |
|
|
|
58,507 |
|
Gross profit |
|
5,978 |
|
|
|
12,866 |
|
|
|
19,570 |
|
|
|
31,633 |
|
|
|
|
|
|
|
|
|
Operating costs and
expenses: |
|
|
|
|
|
|
|
Research and development |
|
1,964 |
|
|
|
2,000 |
|
|
|
6,128 |
|
|
|
5,722 |
|
Selling, general and administrative |
|
10,972 |
|
|
|
14,163 |
|
|
|
31,201 |
|
|
|
27,659 |
|
Gain on sale of BreatheWay |
|
— |
|
|
|
— |
|
|
|
(2,108 |
) |
|
|
— |
|
Impairment of indefinite-lived intangible assets |
|
— |
|
|
|
— |
|
|
|
300 |
|
|
|
— |
|
Restructuring costs |
|
2,741 |
|
|
|
5,270 |
|
|
|
4,611 |
|
|
|
7,530 |
|
Total operating costs and
expenses |
|
15,677 |
|
|
|
21,433 |
|
|
|
40,132 |
|
|
|
40,911 |
|
Operating (loss) income |
|
(9,699 |
) |
|
|
(8,567 |
) |
|
|
(20,562 |
) |
|
|
(9,278 |
) |
|
|
|
|
|
|
|
|
Interest income |
|
22 |
|
|
|
20 |
|
|
|
53 |
|
|
|
66 |
|
Interest expense |
|
(5,818 |
) |
|
|
(4,105 |
) |
|
|
(13,715 |
) |
|
|
(13,877 |
) |
Transition services
income |
|
70 |
|
|
|
5,473 |
|
|
|
70 |
|
|
|
5,473 |
|
Other (expense) income,
net |
|
34 |
|
|
|
454 |
|
|
|
(481 |
) |
|
|
642 |
|
Net (loss) income before
tax |
|
(15,391 |
) |
|
|
(6,725 |
) |
|
|
(34,635 |
) |
|
|
(16,974 |
) |
Income tax benefit
(expense) |
|
(70 |
) |
|
|
87 |
|
|
|
(78 |
) |
|
|
5,591 |
|
Net loss from continuing
operations |
$ |
(15,461 |
) |
|
$ |
(6,638 |
) |
|
$ |
(34,713 |
) |
|
$ |
(11,383 |
) |
|
|
|
|
|
|
|
|
Discontinued operations: |
|
|
|
|
|
|
|
Loss from discontinued
operations |
$ |
(24,731 |
) |
|
$ |
(6,859 |
) |
|
$ |
(29,279 |
) |
|
$ |
(49,576 |
) |
Income tax benefit
(expense) |
|
— |
|
|
|
411 |
|
|
|
— |
|
|
|
(157 |
) |
Loss from discontinued
operations, net of tax |
|
(24,731 |
) |
|
|
(6,448 |
) |
|
|
(29,279 |
) |
|
|
(49,733 |
) |
Net loss |
$ |
(40,192 |
) |
|
$ |
(13,086 |
) |
|
$ |
(63,992 |
) |
|
$ |
(61,116 |
) |
|
|
|
|
|
|
|
|
Basic net loss per share: |
|
|
|
|
|
|
|
Loss from continuing
operations |
$ |
(0.51 |
) |
|
$ |
(0.23 |
) |
|
$ |
(1.16 |
) |
|
$ |
(0.39 |
) |
Loss from discontinued
operations |
|
(0.82 |
) |
|
|
(0.22 |
) |
|
|
(0.98 |
) |
|
|
(1.68 |
) |
Total basic net (loss) income
per share |
$ |
(1.33 |
) |
|
$ |
(0.45 |
) |
|
$ |
(2.14 |
) |
|
$ |
(2.07 |
) |
|
|
|
|
|
|
|
|
Diluted net loss per
share |
|
|
|
|
|
|
|
Loss from continuing
operations |
$ |
(0.51 |
) |
|
$ |
(0.23 |
) |
|
$ |
(1.16 |
) |
|
$ |
(0.39 |
) |
Loss from discontinued
operations |
|
(0.82 |
) |
|
|
(0.22 |
) |
|
|
(0.98 |
) |
|
|
(1.68 |
) |
Total diluted net loss per
share |
$ |
(1.33 |
) |
|
$ |
(0.45 |
) |
|
$ |
(2.14 |
) |
|
$ |
(2.07 |
) |
|
|
|
|
|
|
|
|
Shares used in diluted per
share computation |
|
30,304 |
|
|
|
29,482 |
|
|
|
29,838 |
|
|
|
29,459 |
|
LIFECORE BIOMEDICAL, INC. |
CONSOLIDATED STATEMENTS OF CASH FLOWS |
(Unaudited and in thousands) |
|
|
Nine Months Ended |
|
February 26, 2023 |
|
February 27, 2022 |
Cash flows from operating
activities: |
|
|
|
Net loss |
$ |
(63,992 |
) |
|
$ |
(61,116 |
) |
Adjustments to reconcile net
loss to net cash used in operating activities: |
|
|
|
Depreciation, amortization of
intangibles, debt costs and right-of-use assets |
|
10,392 |
|
|
|
14,488 |
|
Stock-based compensation
expense |
|
2,796 |
|
|
|
1,928 |
|
Deferred taxes |
|
57 |
|
|
|
(5,471 |
) |
Loss on sale of Yucatan |
|
21,039 |
|
|
|
— |
|
(Gain) loss on disposal of
property and equipment related to restructuring, net |
|
— |
|
|
|
5,185 |
|
Loss on sale of Eat Smart |
|
— |
|
|
|
235 |
|
Gain on sale of
BreatheWay |
|
(2,108 |
) |
|
|
— |
|
Impairment of indefinite-lived
intangible assets and goodwill |
|
300 |
|
|
|
32,057 |
|
Other, net |
|
101 |
|
|
|
(540 |
) |
Changes in current assets and
current liabilities: |
|
|
|
Accounts receivable, net |
|
8,994 |
|
|
|
(7,525 |
) |
Inventories |
|
(13,451 |
) |
|
|
(11,910 |
) |
Prepaid expenses and other
current assets |
|
(1,169 |
) |
|
|
(1,448 |
) |
Accounts payable |
|
11,405 |
|
|
|
13,507 |
|
Accrued compensation |
|
(1,895 |
) |
|
|
(2,027 |
) |
Other accrued liabilities |
|
8,570 |
|
|
|
(70 |
) |
Deferred revenue |
|
1,792 |
|
|
|
662 |
|
Net cash used in operating
activities |
|
(17,169 |
) |
|
|
(22,045 |
) |
|
|
|
|
Cash flows from investing
activities: |
|
|
|
Purchases of property and
equipment |
|
(12,319 |
) |
|
|
(18,539 |
) |
Sale of investment in
non-public company |
|
— |
|
|
|
45,100 |
|
Proceeds from the sale of Eat
Smart, net |
|
|
|
73,500 |
|
Eat Smart sale net working
capital adjustments |
|
— |
|
|
|
(2,390 |
) |
Proceeds from sale of
BreatheWay, net |
|
3,135 |
|
|
|
— |
|
Proceeds from the sale of
Yucatan, net |
|
12,531 |
|
|
|
— |
|
Proceeds from sales of
property and equipment |
|
— |
|
|
|
1,096 |
|
Net cash provided by investing
activities |
|
3,347 |
|
|
|
98,767 |
|
|
|
|
|
Cash flows from financing
activities: |
|
|
|
Proceeds from sale of common
stock, net of issuance costs |
|
4,822 |
|
|
|
— |
|
Proceeds from long-term
debt |
|
3,367 |
|
|
|
— |
|
Payments on long-term
debt |
|
(3,199 |
) |
|
|
(86,376 |
) |
Proceeds from lines of
credit |
|
18,400 |
|
|
|
45,011 |
|
Payments for debt issuance
costs |
|
(3,669 |
) |
|
|
(169 |
) |
Payments on lines of
credit |
|
(42,400 |
) |
|
|
(34,111 |
) |
Taxes paid for employee stock
plans |
|
(274 |
) |
|
|
(518 |
) |
Proceeds from sale of
preferred stock, net of issuance costs |
|
38,082 |
|
|
|
— |
|
Net cash provided by (used in)
financing activities |
|
15,129 |
|
|
|
(76,163 |
) |
|
|
|
|
Net increase (decrease) in
cash and cash equivalents |
|
1,307 |
|
|
|
559 |
|
Cash and cash equivalents,
beginning of period |
|
1,643 |
|
|
|
1,295 |
|
Cash and cash equivalents, end
of period |
$ |
2,950 |
|
|
$ |
1,854 |
|
|
|
|
|
Supplemental disclosure of
non-cash investing and financing activities: |
|
|
|
Purchases of property and
equipment on trade vendor credit |
$ |
3,918 |
|
|
$ |
1,764 |
|
Convertible Preferred Stock
PIK dividend |
$ |
(428 |
) |
|
$ |
— |
|
LIFECORE BIOMEDICAL, INC. |
SEGMENT RESULTS |
(Unaudited and in thousands) |
|
(Unaudited and in
thousands) |
Three Months Ended |
|
Change |
|
Nine Months Ended |
|
Change |
|
February 26, 2023 |
|
February 27, 2022 |
|
Amount |
|
% |
|
February 26, 2023 |
|
February 27, 2022 |
|
Amount |
|
% |
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lifecore |
$ |
26,330 |
|
|
$ |
34,808 |
|
|
$ |
(8,478 |
) |
|
(24)% |
|
$ |
71,723 |
|
|
$ |
81,707 |
|
|
$ |
(9,984 |
) |
|
(12)% |
Curation Foods |
|
1,270 |
|
|
|
2,591 |
|
|
|
(1,321 |
) |
|
(51)% |
|
|
6,025 |
|
|
|
8,433 |
|
|
|
(2,408 |
) |
|
(29)% |
Total revenues |
|
27,600 |
|
|
|
37,399 |
|
|
|
(9,799 |
) |
|
(26)% |
|
|
77,748 |
|
|
|
90,140 |
|
|
|
(12,392 |
) |
|
(14)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lifecore |
|
6,072 |
|
|
|
12,905 |
|
|
|
(6,833 |
) |
|
(53)% |
|
|
18,847 |
|
|
|
30,384 |
|
|
|
(11,537 |
) |
|
(38)% |
Curation Foods |
|
(94 |
) |
|
|
(39 |
) |
|
|
(55 |
) |
|
(141)% |
|
|
723 |
|
|
|
1,249 |
|
|
|
(526 |
) |
|
(42)% |
Total gross profit |
|
5,978 |
|
|
|
12,866 |
|
|
|
(6,888 |
) |
|
(54)% |
|
|
19,570 |
|
|
|
31,633 |
|
|
|
(12,063 |
) |
|
(38)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income from
continuing operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lifecore |
|
851 |
|
|
|
5,054 |
|
|
|
(4,203 |
) |
|
(83)% |
|
|
2,269 |
|
|
|
11,317 |
|
|
|
(9,048 |
) |
|
(80)% |
Curation Foods |
|
280 |
|
|
|
(5,380 |
) |
|
|
5,660 |
|
|
N/M |
|
|
(1,974 |
) |
|
|
4,640 |
|
|
|
(6,614 |
) |
|
N/M |
Other |
|
(16,592 |
) |
|
|
(6,312 |
) |
|
|
(10,280 |
) |
|
(163)% |
|
|
(35,008 |
) |
|
|
(27,340 |
) |
|
|
(7,668 |
) |
|
(28)% |
Total net loss from continuing
operations |
$ |
(15,461 |
) |
|
$ |
(6,638 |
) |
|
$ |
(8,823 |
) |
|
(133)% |
|
$ |
(34,713 |
) |
|
$ |
(11,383 |
) |
|
$ |
(23,330 |
) |
|
(205)% |
Loss from discontinued
operations, net of tax: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Curation Foods |
|
(22,802 |
) |
|
|
(3,407 |
) |
|
|
(19,395 |
) |
|
(569)% |
|
|
(27,350 |
) |
|
|
(46,692 |
) |
|
|
19,342 |
|
|
41% |
Other |
|
(1,929 |
) |
|
|
(3,041 |
) |
|
|
1,112 |
|
|
37% |
|
|
(1,929 |
) |
|
|
(3,041 |
) |
|
|
1,112 |
|
|
37% |
Net loss |
$ |
(40,192 |
) |
|
$ |
(13,086 |
) |
|
$ |
(27,106 |
) |
|
(207)% |
|
$ |
(63,992 |
) |
|
$ |
(61,116 |
) |
|
$ |
(2,876 |
) |
|
(5)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lifecore |
$ |
2,981 |
|
|
$ |
8,306 |
|
|
$ |
(5,325 |
) |
|
(64)% |
|
$ |
8,431 |
|
|
$ |
19,728 |
|
|
$ |
(11,297 |
) |
|
(57)% |
Curation Foods |
|
(25,298 |
) |
|
|
(10,135 |
) |
|
|
(15,163 |
) |
|
(150)% |
|
|
(30,821 |
) |
|
|
(54,810 |
) |
|
|
23,989 |
|
|
44% |
Other |
|
(9,878 |
) |
|
|
(5,263 |
) |
|
|
(4,615 |
) |
|
(88)% |
|
|
(19,702 |
) |
|
|
(12,486 |
) |
|
|
(7,216 |
) |
|
(58)% |
Total EBITDA |
$ |
(32,195 |
) |
|
$ |
(7,092 |
) |
|
$ |
(25,103 |
) |
|
(354)% |
|
$ |
(42,092 |
) |
|
$ |
(47,568 |
) |
|
$ |
5,476 |
|
|
12% |
Non-GAAP Financial Information and
Reconciliations
EBITDA and adjusted EBITDA are non-GAAP
financial measures. We define EBITDA as earnings before interest,
income tax expense (benefit), and depreciation and amortization. We
define adjusted EBITDA as EBITDA before certain restructuring and
other non-recurring charges. See “Non-GAAP Financial Information”
above for further information regarding the Company’s use of
non-GAAP financial measures.
(Unaudited and in
thousands) |
Three Months Ended |
|
Nine Months Ended |
|
February 26, 2023 |
|
February 27, 2022 |
|
February 26, 2023 |
|
February 27, 2022 |
Net loss |
$ |
(40,192 |
) |
|
$ |
(13,086 |
) |
|
$ |
(63,992 |
) |
|
$ |
(61,116 |
) |
Interest expense, net of interest income |
|
5,796 |
|
|
|
4,085 |
|
|
|
13,662 |
|
|
|
13,811 |
|
Income tax (benefit) expense |
|
70 |
|
|
|
(87 |
) |
|
|
78 |
|
|
|
(5,591 |
) |
Depreciation and amortization |
|
2,131 |
|
|
|
1,996 |
|
|
|
8,160 |
|
|
|
5,328 |
|
Total EBITDA |
$ |
(32,195 |
) |
|
$ |
(7,092 |
) |
|
$ |
(42,092 |
) |
|
$ |
(47,568 |
) |
Restructuring and other non-recurring charges (1) |
|
8,915 |
|
|
|
7,384 |
|
|
|
16,697 |
|
|
|
11,131 |
|
Impairment of indefinite-lived intangible assets |
|
— |
|
|
|
— |
|
|
|
300 |
|
|
|
— |
|
Loss from discontinued operations, net of tax |
|
24,731 |
|
|
|
6,448 |
|
|
|
29,279 |
|
|
|
49,733 |
|
Total adjusted EBITDA |
$ |
1,451 |
|
|
$ |
6,740 |
|
|
$ |
4,184 |
|
|
$ |
13,296 |
|
(Unaudited and in thousands) |
Lifecore |
|
Curation Foods |
|
Other |
|
Total |
Three months ended February
26, 2023 |
|
|
|
|
|
|
|
Net (loss) income |
$ |
851 |
|
|
$ |
(22,522 |
) |
|
$ |
(18,521 |
) |
|
$ |
(40,192 |
) |
Interest expense, net of
interest income |
|
(16 |
) |
|
|
— |
|
|
|
5,812 |
|
|
|
5,796 |
|
Income tax (benefit)
expense |
|
268 |
|
|
|
(3,019 |
) |
|
|
2,821 |
|
|
|
70 |
|
Depreciation and
amortization |
|
1,878 |
|
|
|
243 |
|
|
|
10 |
|
|
|
2,131 |
|
Total EBITDA |
|
2,981 |
|
|
|
(25,298 |
) |
|
|
(9,878 |
) |
|
|
(32,195 |
) |
Restructuring and other
non-recurring charges (1) |
|
60 |
|
|
|
2,869 |
|
|
|
5,986 |
|
|
|
8,915 |
|
Impairment of indefinite-lived
intangible assets |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Loss from discontinued
operations, net of tax |
|
— |
|
|
|
22,802 |
|
|
|
1,929 |
|
|
|
24,731 |
|
Total adjusted EBITDA |
$ |
3,041 |
|
|
$ |
373 |
|
|
$ |
(1,963 |
) |
|
$ |
1,451 |
|
|
|
|
|
|
|
|
|
Nine months ended February 26,
2023 |
|
|
|
|
|
|
|
Net (loss) income |
$ |
2,269 |
|
|
$ |
(29,324 |
) |
|
$ |
(36,937 |
) |
|
$ |
(63,992 |
) |
Interest expense, net of
interest income |
|
(47 |
) |
|
|
1 |
|
|
|
13,708 |
|
|
|
13,662 |
|
Income tax (benefit)
expense |
|
717 |
|
|
|
(4,135 |
) |
|
|
3,496 |
|
|
|
78 |
|
Depreciation and
amortization |
|
5,492 |
|
|
|
2,637 |
|
|
|
31 |
|
|
|
8,160 |
|
Total EBITDA |
|
8,431 |
|
|
|
(30,821 |
) |
|
|
(19,702 |
) |
|
|
(42,092 |
) |
Restructuring and other
non-recurring charges |
|
185 |
|
|
|
4,398 |
|
|
|
12,114 |
|
|
|
16,697 |
|
Impairment of indefinite-lived
intangible assets |
|
|
|
300 |
|
|
|
|
|
300 |
|
Loss from discontinued
operations, net of tax |
|
— |
|
|
|
27,350 |
|
|
|
1,929 |
|
|
|
29,279 |
|
Total adjusted EBITDA |
$ |
8,616 |
|
|
$ |
1,227 |
|
|
$ |
(5,659 |
) |
|
$ |
4,184 |
|
|
|
|
|
|
|
|
|
Three Months Ended February
27, 2022 |
|
|
|
|
|
|
|
Net (loss) income |
$ |
5,054 |
|
|
$ |
(8,787 |
) |
|
$ |
(9,353 |
) |
|
$ |
(13,086 |
) |
Interest expense , net of
interest income |
|
(18 |
) |
|
|
26 |
|
|
|
4,077 |
|
|
|
4,085 |
|
Income tax (benefit)
expense |
|
1,596 |
|
|
|
(1,678 |
) |
|
|
(5 |
) |
|
|
(87 |
) |
Depreciation and
amortization |
|
1,674 |
|
|
|
304 |
|
|
|
18 |
|
|
|
1,996 |
|
Total EBITDA |
|
8,306 |
|
|
|
(10,135 |
) |
|
|
(5,263 |
) |
|
|
(7,092 |
) |
Restructuring and other
non-recurring charges |
|
271 |
|
|
|
6,215 |
|
|
|
898 |
|
|
|
7,384 |
|
Loss from discontinued
operations, net of tax |
|
— |
|
|
|
3,407 |
|
|
|
3,041 |
|
|
|
6,448 |
|
Total adjusted EBITDA |
$ |
8,577 |
|
|
$ |
(513 |
) |
|
$ |
(1,324 |
) |
|
$ |
6,740 |
|
|
|
|
|
|
|
|
|
Nine Months Ended February 27,
2022 |
|
|
|
|
|
|
|
Net (loss) income |
$ |
11,317 |
|
|
$ |
(42,052 |
) |
|
$ |
(30,381 |
) |
|
$ |
(61,116 |
) |
Interest expense , net of
interest income |
|
(57 |
) |
|
|
300 |
|
|
|
13,568 |
|
|
|
13,811 |
|
Income tax (benefit)
expense |
|
3,574 |
|
|
|
(13,422 |
) |
|
|
4,257 |
|
|
|
(5,591 |
) |
Depreciation and
amortization |
|
4,894 |
|
|
|
364 |
|
|
|
70 |
|
|
|
5,328 |
|
Total EBITDA |
|
19,728 |
|
|
|
(54,810 |
) |
|
|
(12,486 |
) |
|
|
(47,568 |
) |
Restructuring and other
non-recurring charges |
|
271 |
|
|
|
6,681 |
|
|
|
4,179 |
|
|
|
11,131 |
|
Loss from discontinued
operations, net of tax |
|
— |
|
|
|
46,692 |
|
|
|
3,041 |
|
|
|
49,733 |
|
Total adjusted EBITDA |
$ |
19,999 |
|
|
$ |
(1,437 |
) |
|
$ |
(5,266 |
) |
|
$ |
13,296 |
|
(1) |
During fiscal year 2020, the Company announced a restructuring plan
to drive enhanced profitability, focus the business on its
strategic assets, and redesign the organization to be the
appropriate size to compete and thrive. This included a
reduction-in-force, a reduction in leased office spaces, and the
sale of non-strategic assets. Related to these continued
activities, in the third quarter of fiscal year 2023, the Company
incurred (1) $4.2 million of restructuring charges, primarily
related to legal costs, audit fees and transition costs from
corporate headquarters transition to Lifecore, (2) $2.3 million in
restructuring costs associated with financial advisor and legal
fees related to management of the prior term loan lenders, and (3)
$2.4 million of non-recurring charges primarily related to
consolidating and transitioning operations associated with the
Yucatan Disposition. |
Contact Information:Investor
RelationsJeff Sonnek(646)
277-1263jeff.sonnek@icrinc.com
Lifecore Biomedical (NASDAQ:LFCR)
과거 데이터 주식 차트
부터 4월(4) 2024 으로 5월(5) 2024
Lifecore Biomedical (NASDAQ:LFCR)
과거 데이터 주식 차트
부터 5월(5) 2023 으로 5월(5) 2024