Landec Raises Fiscal Year 2017 Capital Spend Guidance from $25 million to approximately $30 million
MENLO PARK, Calif., Oct. 12, 2016 (GLOBE NEWSWIRE) — Landec Corporation (NASDAQ:LNDC), a leading innovator of diversified health and wellness solutions within the packaged food and biomaterial markets, announced that it will be making another substantial capital investment in its Lifecore Biomedical subsidiary to further enhance Lifecore’s growth strategy as a contract development and manufacturing organization (CDMO). This investment will be specifically targeted to expanding aseptic filling and other diverse capabilities that can better attract and serve its pharmaceutical market opportunities. The Company projects it will spend an incremental $4-5 million in fiscal year 2017 on this new investment, with a potential future investment of up to $12 million, contingent upon specific milestones and ROI targets being reached. This is the type of investment the Company envisioned when it entered into its new $150 million syndicated credit agreement on September 23, 2016.
Lifecore’s growth strategy is focused on expanding its position as a CDMO, as evidenced by recent investments that have provided enhanced capabilities in formulation, filling, and finished packaging. This investment will broaden its capabilities in filling and packaging configurations to accommodate the requirements of current and prospective customers.
Molly Hemmeter, Landec’s President and CEO stated, “Based on active development projects that have met significant milestone thresholds, we have determined it is time to initiate a targeted investment that will prepare Lifecore’s manufacturing capability to deliver on the anticipated growth of its long term plan. We are pleased that Lifecore’s CDMO business model is evolving beyond premium sodium hyaluronate (HA) applications to include both drugs and medical devices and that this investment can enable Lifecore to develop new and expanded partnerships.”