No Significant Impact Expected on Fiscal 2018 Results
MENLO PARK, CA — Landec Corporation (NASDAQ:LNDC), a leading innovator of diversified health and wellness solutions within the natural packaged food and biomaterial markets, provided an update on its operations at Apio, Inc., Landec’s packaged fresh vegetable subsidiary, following a series of recent, extreme weather events. Currently, Landec does not believe that these weather events will have a significant impact on its fiscal 2018 results.
In late August, Hurricane Harvey ravaged through South and Southeast Texas and parts of Louisiana with devastating winds and flooding causing pro-longed power outages and destruction to infrastructure. Fortunately, the Apio business was not affected by this storm as Apio green bean plantings in Texas were just outside of Harvey’s reach.
Starting in June of this year until recently, a series of tropical storms generated high humidity and excessive moisture in several growing regions within Mexico and California. This, in combination with record-breaking high temperatures, has impacted yields for many fresh produce items, including broccoli and cauliflower. While supplies remain very tight for many commodities, Apio is working closely with its diverse network of growers to minimize any disruption to our customers.
Earlier this month, Hurricane Irma hit Florida as well as the Caribbean Islands, Georgia and the Carolinas. Hurricane winds and widespread flooding have caused power outages and vast damage to infrastructure. Apio has a small manufacturing and distribution facility in Vero Beach, Florida, which escaped the hurricane undamaged but was shut down for several days waiting for power in the area to resume. While the Vero Beach facility was not operating, Apio’s facility in Bowling Green, Ohio was able to meet most of the green bean customer demand typically produced by Vero Beach. Florida is the primary growing region for Apio’s green bean production during the winter season. Irma has forced a delay of plantings in Southern Florida of at least a week. This gap will be filled by product plantings proactively diverted into other regions. As Irma moved inland, significant winds and considerable rain impacted the fall transition crop of beans in North Florida and Georgia. While complete losses were avoided, we do expect a tight green bean supply market through October.
“Although Apio’s facilities and fiscal 2018 results have not currently been significantly impacted by these tragedies, many of our employees have family members and friends who have been deeply affected,” said Molly Hemmeter, Landec’s President and CEO. “Our hearts and prayers go out to our employees, their families and all those victims of Hurricane Harvey and Hurricane Irma that have experienced unprecedented suffering and loss.”
Landec partnered with the Houston Food Bank to deliver 24,000 Eat Smart salads (approximately 70,000 salad servings) to the victims of Hurricane Harvey. Landec is currently coordinating with the SOS Foundation to send an additional delivery of 24,000 salads to victims of Hurricane Irma.
“We will continue to monitor the heat conditions in the West and green bean supply in the South with the aim of maximizing customer fulfillment. It is important to note that there has been no disruption to the supply of vegetables for Apio’s Eat Smart® packaged salads during this time, nor does management expect future disruptions in its ability to meet demand for its salad product offerings. We will provide an update on any additional information during the Company’s upcoming fiscal first quarter 2018 earnings reporting,” concluded Hemmeter.
About Landec Corporation
Landec Corporation (NASDAQ:LNDC) is a leading innovator of diversified health and wellness solutions within the packaged natural food and biomaterial markets. Apio, Landec’s food business, is the leader in branded, packaged fresh vegetables in North America, utilizing its proprietary BreatheWay® packaging technology to naturally extend the shelf life of fresh produce. Apio combines this technology with the capabilities of a large national fresh produce supplier to offer healthy fresh vegetable products under the Eat Smart® brand to consumers through club and retail grocery stores. Extending its reach into adjacent natural food products outside of produce, Landec recently acquired O Olive Oil, Inc, an organic and natural producer and marketer of olive oils and vinegars under the O brand. Lifecore Biomedical, Landec’s biomaterial business, is a fully integrated Contract Development and Manufacturing Organization (CDMO) that offers expertise and capabilities in fermentation, specialty formulation, aseptic filling and final packaging for FDA regulated medical devices and drugs to customers for applications in a wide array of markets including Ophthalmic, Orthopedic and Oncology. For more information about the company, visit Landec’s website at www.landec.com.
Important Cautions Regarding Forward-Looking Statements
Except for the historical information contained herein, the matters discussed in this news release are forward-looking statements that involve certain risks and uncertainties that could cause actual results to differ materially, including such factors among others, as the timing and expenses associated with operations, the ability to achieve acceptance of the Company’s new products in the market place, weather conditions that can affect the supply and price of produce, the amount and timing of research and development funding and license fees from the Company’s collaborative partners, the timing of regulatory approvals, the mix between domestic and international sales, and the risk factors listed in the Company’s Form 10-K for the fiscal year ended May 28, 2017 (See item 1A: Risk Factors) which may be updated in Part II, Item 1A Risk Factors in the Company’s Quarterly Reports on Form 10-Q. As a result of these and other factors, the Company expects to continue to experience significant fluctuations in quarterly operating results and there can be no assurance that the Company will remain consistently profitable. The Company undertakes no obligation to update or revise any forward-looking statements whether as a result of new developments or otherwise.
At the Company:
Gregory S. Skinner
Vice President Finance and CFO
John Mills, Partner