Landec credits revenue growth to partnerships

"During the third quarter and first nine months of fiscal 2014 Apio, Landec's food subsidiary, continued to grow its traditional core packaged vegetable products as well as its new vegetable salad kit products that feature nutrient-dense superfoods," stated Gary Steele, Landec's Chairman and CEO. "Lifecore, Landec's biomaterials subsidiary, continued to experience increased sales in its aseptic filling business and continues to expand its operating capacity for anticipated increases in demand.

"Landec's strategic partner, Windset Farms, a leading grower of hydroponic vegetables in which Landec has a 20% ownership interest, is now harvesting from all 128 acres of its hydroponic greenhouses in Santa Maria, California. Windset Farms was recently awarded the 2014 Tomato Inspiration Award as the best worldwide tomato grower and marketer at the first annual Tomato Inspiration Event hosted by HortiBiz in Berlin. "Both Apio and Lifecore exceeded the Company's revenue expectations for the three and nine months ended February 23, 2014 and the Company's profitability expectations were also met during the third quarter. Landec is on track to meet its revenue goal as well as the revised net income goal for fiscal 2014, which is for revenues to meet or exceed 6% growth and for net income to be flat to up 5% year over year after excluding the $3.9 million earn out adjustment in fiscal 2013."

Revenues in the third quarter of fiscal 2014 increased 7%, or $8.5 million, to $126.4 million, compared to $117.9 million in the year-ago quarter. The improvement was primarily due to an $8.7 million, or 10%, increase in revenues in Apio's value-added businesses (which includes Apio's fresh-cut speciality packaged vegetable business, Apio Cooling and Apio Packaging) and a $2.8 million, or 16%, increase in revenues at Lifecore as a result of increased sales to existing customers, as well as from development revenue associated with new aseptic filling opportunities.

The 10% increase in revenues from Apio's value-added businesses resulted from increased volume sales and a favourable product mix including higher priced new products. The increase in revenues in the third quarter was partially offset by an expected $2.7 million decrease in revenues from Apio's export business due to an anticipated decline in volume sales primarily resulting from Indonesian import quotas on fruit. Net income in the third quarter of fiscal 2014 increased 33% to $6.4 million or $0.24 per share compared to $4.8 million or $0.18 per share in the year-ago quarter.

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