Landec Announces Plan to Explore Strategic Options for its Curation Foods’ Vegetable Bag and Tray Business as Part of Project SWIFT
“We have been evaluating our commoditized vegetable bag and tray business since my appointment as CEO. Our team’s approach to growth and profitability is to focus on leveraging the strength of our higher-margin product and innovation platforms. Consistent with my philosophy of ‘getting smaller to get bigger’, we believe that rightsizing the legacy business will result in improved financial performance and enable
Curation Foods’ legacy vegetable bag and tray business, which includes Eat Smart and private label brands, generated net sales of
Further details regarding this decision will be discussed on a conference call for the investment community today,
Exploring Strategic Alternatives a Key Step in Project SWIFT
Project SWIFT aims to strengthen the Curation Foods business by simplifying and streamlining the business. The Company believes that these actions chart a clear path towards improving the overall financial performance of
- Network and operational optimization: Maximizing efficiency and productivity with the previously announced consolidation and centralization of
Curation Foodsoffices into its Innovation Center headquarters in Santa Maria, CA, as well as continuous improvement in plant operations with lean manufacturing practices.
- Focus on strategic assets: Simplifying the business and divesting non-core assets, including today’s announcement regarding exploring the strategic alternatives for the core vegetable and tray business, together with previously announced intent to sell the Company’s
Ontario, CA, salad dressing manufacturing facility.
- Organizational redesign: Continued refinement of the organization so that it can be competitive with industry benchmarks and appropriate for the Company’s future direction, with a focus on strategic initiatives, developing and elevating internal talent and reducing headcount.
Project SWIFT provides a framework rooted in solid, achievable goals that align the Company’s resources. The Company anticipates that the outcome of the actions announced to date will provide for operational efficiency with annualized cost savings of
- Curation Foods Organic Revenue Growth: 5%
- Curation Foods Gross Margin: 11% to 14%
- Curation Foods EBITDA Margin: 4% to 6%
Updating Fiscal 2020 Guidance
The Company is lowering its full fiscal year 2020 guidance, excluding restructuring and non-recurring charges, to account for an acceleration in the Company’s planned reduction in its vegetable bag and tray business, on-going unanticipated legal fees and incremental marketing spending to promote awareness and trial of the Yucatan Squeeze innovation. Updated fiscal year 2020 guidance is as follows:
- Revenues from continuing operations to grow 4% to 6% (range of
$580 millionto $590 million) compared to fiscal 2019
- Earnings per share in the range of
- Consolidated EBITDA in the range of
$30 millionto $34 million
The Company is lowering its fiscal third quarter 2020 guidance, excluding restructuring and non-recurring charges, to account for a shift in timing of revenue at Lifecore from fiscal third quarter to fiscal fourth quarter. Lifecore remains on target to meet its goals for fiscal 2020. Updated fiscal third quarter guidance is as follows:
- Revenues from continuing operations in the range of
$147 millionto $151 million
- Earnings per share per share in the range of
- Consolidated EBITDA in the range of
$5 millionto $9 million
Conference Call and Webcast
The live webcast can be accessed on Landec’s website on the Investor Events & Presentations page. The webcast will be available for 30 days.
Date: Today –
Direct Webcast link: http://ir.Landec.com/events.cfm
To participate in the conference call via telephone, dial toll-free: (855) 327-6837 or (631) 891-4304. Please call the conference telephone number 5-10 minutes prior to the start time so the operator can register your name and organization. If you have any difficulty with the webcast or connecting to the call, please contact ICR at (646) 277-1263.
A replay of the call will be available through
Non-GAAP Financial Information
This press release contains non-GAAP financial information relating to EBITDA. The Company has disclosed this non-GAAP financial measure to supplement its consolidated financial statements presented in accordance with GAAP. This non-GAAP financial measure excludes/includes 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. This non-GAAP financial measure should not be considered in isolation or as a substitute for the comparable GAAP measures. In addition, this non-GAAP financial measure 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. It should be read in conjunction with the Company’s consolidated financial statements presented in accordance with GAAP.
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, government regulations affecting our business, the timing of regulatory approvals, the ability to successfully integrate
Source: Landec Corporation