LNDC - Earnings call transcript Q4 2021 | Lifecore Biomedical, Inc.

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Operator

Good afternoon and thank you for joining Landec's Fiscal 2021 Fourth Quarter Earnings Call.

During the presentation, all participants will be in a listen-only mode. Afterwards we will conduct a question-and-answer session. At that time I will provide instructions on how to ask a question.

Now, I'd like to turn the call over to Jeff Sonnek, Investor Relations at ICR.

Jeff Sonnek

afternoon. Good for year to XXXX you fourth Landec us fiscal quarter earnings joining thank discuss today Corporation's And results.

or Chief Executive On company the By after press John now Chief to have of today just release, are the Time. and Pacific Morberg, Officer; the Dr. Albert everyone X Hall, call Bolles, X President Lifecore. today President Eastern Financial Officer from which p.m. access out Jim should and p.m. went

on not the Relations received Landec's the at you've available website it's If of Investor release, portion ir.landec.com.

from Before we statements. to statements. forward-looking of remind in the could note of those this Certain everyone materially company's important course It's statement. statements projected begin, we'd the in the forward-looking like Safe results that Harbor such contain to conference call actual made differ

XX-K risk year factors turn is the company's forward-looking to the could filings Form that, to website. with including that those results like company's the in the company's cause the I'd statements from Al. materially to for And from the information of SEC, Additional not to XXXX. concerning those differ in contained call time-to-time may obtained fiscal limited from with be actual but filings Copies over

Albert Bolles

of I'm our global in well efforts challenging of adjusted especially of segment collective of exciting and during Curation turnaround year compound margin your fiscal Foods today. Similarly, million. and growth of the year segments everyone, performances reported COVID-XX by financial margins what million steady-state XXXX fiscal at expect year-end Lifecore consistent Full-year you a progress a highly ahead adjusted growth revised and our the in driven EBITDA the for the Jeff. Morberg fiscal This fourth from million Thanks, full-year. guidance high-end to to afternoon, Lifecore. and in Foods at Good call generating really operational for annual uncertain with of On is joining resilient and low exceeded and performance I'll to pleased we John yearend complete then consolidated the proved over the segment to our growth both $XX and a performed and our a gross XX% Curation fourth-quarter the I'll XX% fiscal long the of revenues the goal solid Both trajectory disruptions out a we results. developments and We outlook. an of earnings was call XXXX that end with the thank review our open with will Lifecore. Jim of $X.X $XX.X of pandemic.. then for results quarter. in and this some us exceptional $XXX EBITDA Foods finish XX% XXXX Curation XX% for expectations. Curation today's the be the our mid by cover teens business of our highlights provide was meet and the question. discuss expectations We'll And Hall to topline the was of consolidated were range Foods million the high of exceeded proud profit had term. that fiscal XX.X% team will

while operations. distribution the our are support reach added further turnaround have our simplifying network Our track we expands Curation a efforts Foods that with and efficient of on more

balance and XXXX an both customer a improving fiscal benefit we objectives. to sheet nimble organization and help at of Lifecore long-term ahead us keep Looking growth will with that Curation the pace Foods, some our have momentum

adjusted $XXX EBITDA and to revenues consolidated $XXX consolidated to million of For $XX.X FY'XX, we currently $XX.X anticipate of full-year million million.

as is characterized Lifecore. year FY'XX for an investment think best I

new in expanding development areas be this funds will our additional opportunities attractive to CDMO future CapEx and grow channels space. spending sales thereby marketing on We of in and

our detail, revenue XX%, As during Including further discuss carrying certain annual this growth larger to in X% resulting expect COVID, will next inventories adjusted percentage approximately revenue of in of impact, growth were XXXX we and impact EBITDA expectations to points. year. of FY growth customers X XX% we having an X%

to for We the are continuing position long-term profit going segment forward. Lifecore growth consistent

On avocado core business. the offsetting in to in see our tray business, declines our Curation side, and growth we continue vege products planned

to We year-over-year. to flat be revenues expect negative overall slightly

the partially X% controls, to offset accomplishments However, that lie cost year we enhancements expecting proud by improved expect excited adjusted our that ahead. gross will inflationary pressures to EBITDA are margins, I'm by on from the continue. we benefit full XX% grow our and and to based which operational drive of opportunities

but to track. more do have work are we right on the We

a are to to We personal at delivering expect mention do more due reasons. results Pat directors drive work going both want consistent as have businesses foundation forward shareholder I our to Walsh, one solid and of resigned towards value. we that

disagreements best. the Jim. our no Pat And board XX from to board the also stated service we With the were size his the him wish and of Currently, to with I'll company. all turn over in we him the voted there the As Landec thank call X-K, XX invaluable to for directors. that, in to reduce

Jim Hall

the for important life relief XXXX, of Al. product. being quarter development scale and In will timelines. Naturally, pipeline are with were We process new to Therapeutics, backfilling work support this product, that that We were aseptic a now our CMO revenue Zen which market the we quality in highlight fourth batch spectrum and in fourth relief support that as inventories our important our certain with the our finish manufacturing are engineering that Heron due the to COVID showcases pain. approval with Heron don't during years in contingent finished cause the for a Zen complexion includes reach that shift partners. with development to FDA excellence temporary we of of commercial near its of world-class our continuing large increases products you, had primarily The the learned manufacturing systems optimization the to volumes. treating revenue procedure commercial up the with the quarter on process commercializing approval our known look therapy provides deceleration fiscal an in post-surgical continued or Thank partner, carried forward projects anticipate penetration the our over exciting the course size term. as prior always commercialize generators of customers scale material across up associated in rates many in revenues Nonetheless, very in

of XXXX which now timing on the fiscal revenue in is fiscal their are we prior rebalancing customers first to our points approximately some inventories headwind our which translating growth of guidance in represents process Our five half of growth variances percentage believe XXXX rates. versus over revenue the our year

pharma in projects. compound long-term of syringes believe industry of our pipeline industry. companies estimates XX continues approximately which significant provide XX revenue difficult pipeline specialized XX% the meet role CDMO XX.X% execution capacity, have of to continues which development be and research, supported needs and Lifecore our are have that million products the among to outsourced. an mid-sized of XX to XX% prefilled growth incremental of years will We to a small our stages injectable rate several rates approximately a drug and in to CDMO The with units. annual to market play of projects incremental syringe new Our active growth has We been to new vial lifecycle Injectable XXXX. projected in unmet even robust deliver According the total potential projected for discussions of are their in around billion last development have and large projects. acceleration quality product fast-growing can compound of XX% the us Based growth. various growth the represent in demand an for now by total through that on by grow and active comfort products reputation of greater annual their XXX expectation goals approvals,

combination that medical materials enables devices industry. and world-class as CDMO with us Our the expertise in system in only biologics, viscose specialized quality to not out leader and supports a our stand products drugs

our continued ahead our see to on imperative with is very the in we While that we horizon. it demand are activity and investments satisfy pleased we pushing expansion keep with capacity planned that the pipeline,

development interest service expand expansion and reach also such, highly towards capabilities, development open We existing an organic five operate perfectly capacity XX customers positioned you and revenue forward your Lifecore’s approximately million advantage As fiscal take $XX $X.X updating $XX current stakeholders. throughout to in of fundamentals year. deliver growing we I we believe us XXXX, pipeline through that profitable our new expanding sales approximately to and double investment on million sales new opportunities needs P&L which Thank are industry the We in to support resource our are of continued reach next expenses investing marketing attractive an increase look making story our future in capacity amazing ultimately will finish. to to channels returns strong investments attractive In generating that Lifecore with and our to is for with capabilities. and our you fiscal complement development XXXX of on is investment. with to all over nearly filling our our units continue the allow our the fill-in and years. returns in aseptic the This incremental financial to to and beyond capital sales expand capacity million million units

would call I the like to Now, to Al. return

Albert Bolles

chain. dealt quarter Foods simplify integrating made in a very is strategic the We new distribution supply advancements business XXXX finish and agreement. with the FY out to with Jim. an Thanks, Curation projects important in fourth some COVID And year. the facilities year our significant busy, into to entered within

monetized salads, year. very did And seriously, focus to workforce. Last our team our our generate were continuing a on product were And the match our our I growth. took to threat investment. At while to grow optimizing same operational the COVID-XX also and the we our of and best and the and very time, our back maintain for health one profitable better process recommended well-being people We as that entire this quickly. by am a capacity to mitigations vegetables. we pairing risk tremendous and shift able also footprint say year, guacamole, implement had impact we set the result, proud

As Hanover Ontario and assets This assets Beach Vero broadening complexity fiscal quarter, previously our underutilized by our the third organizational quarter, strategic leadership accountabilities fourth in management Rock and divested structure. operations. reduced our in These first facility in included quarter. moves reported, flattening we have and our Hill

terms in Castellini, a delivery to of us frequency a We reach. allow logistics entered existing will partnership route strategic infrastructure fresh a into both result improve This agreement with as distributor. of premier also our produce performance and their

We also well-informed status. their have better service customer the keep delivery in team benefit for our system transportation results excellent which management available leveraging turn customers in of information to of

will we lean referred driving zero utilization principles productivity maturing as we our excellence performance. improve Castellini’s the our an of training. efficiencies approach operational waste, performance that shared we program assets. which a employee enjoy about engagement, In operational in is This operational for our was as standardization, FY based focus to the well-recognized Finally, ZEST, improving are XXXX, to and on

to We and are concerns to our try as team the a inflationary impact. anticipate cost looking leadership have discussed base at

with commenced the deal the the in casting that reduction facilities are that the inflationary we global in contract pressures many and including of economies. in programs FY broad set up us XXXX the to impacting Fortunately,

sales supply price concerted unable also XX% in have increases, to cost with effort range. we discuss drive to steady increases. are state to we working to maintain to Where We margins focused gross are the offset increases the productivity chain teams continuous are offset through XX% to to as our customers cost a we with program a committed

to our which items related front, and again to resets is hold new need. retail the in encouraging. are stores Even club starting we are commercial build On extremely September level merchandising as customer more top demos efforts planning

signs positive these our for as all see business. indicators You’ll

turn Now, the John. I over to will call

John Morberg

posted our our you with begin quarter with financial a concluding year Al. XXXX. you, X% segment, third within year commercial growth by fiscal CDMO prior prior I'll $XX.X grew ended for with consolidated basis in and the $XX.X from year the revenues million a to each margin X.X% shared year revenues the of segment the primarily largely revenues improved approximately adjusted the before increase prior timing to I'm previously fourth aseptic increase totaled to by versus Starting a prior the the similarly you fourth particularly points review to the of the the fiscal pleased of XX% results million. was modest XX of a year. $X.X to of with Lifecore with $X.X quarter. same XX.X%, margin due of versus improvement profit million, at quarter Thank to X.X% summary year. X% financial over period share rate EBITDA large full Fermentation and review. a over we XX XX.X%, for marking timing and million points mix. basis EBITDA prior Segment the quarter, year due increase Gross shipments slight

For range. the a our adjusted full XX% grew above million, at Lifecore guidance which estimate range guidance our million, revenue EBITDA end $XX.X of to $XX.X of the XX.X% generating in is year-over-year high year, increase high

week. X.X% the fourth from year year in the vegetable XXth steady prior fiscal excluding was prior the prior margin quarter. declined business. a Fresh which Let's week products packaged totaled the Foods year, decreased in and X%. the excluding prior and XXth vegetables excluding year, salads turn from to the trade and approximately X.X%. On our fiscal or approximately which over more margin X.X% comparable into gross that margin $XXX the COVID per approximately increase fourth revenues revenues achieved year Avocado Curation XXX of from XXXX, included by week we Revenues goal due additional improved lower a a planned additional results additional decline We in mix a channel additional of in previously XX.X% basis our year. totaled fiscal X.X%. forward with effects margin XX.X% the This third prior for state a million, segment our performance as of to basis an EBITDA accomplishment primarily margin the legacy an the or benefit the declined favorable significant of year the increased On points lower XXXX quarter, the carry the the reduction products. to segment was margin some week the the quarter, gross we basis reflects that of a basis gross quarter with XXX products of profitability quarter which after the discussed. and and sequential margin for in team will Curation XX.X% was improved the million to fourth higher Adjusted fiscal from $X.X disruption corresponding improvement impacted related points,

and the $XXX.X high $X represents XXX% Curation end high to million year, adjusted EBITDA guidance range. $X.X our revised the full our a the EBITDA generated the adjusted XX.X% million For revenues the revised we $XX on of declined royalty. included of $X.X $XX which year end of increase million, which well onetime of over range guidance above million adjusted is prior an million million The EBITDA above

year year $XX.X the adjusted the adjusted prior for adjusted million to fiscal administrative $XX.X year and fiscal quarter in royalty of the to for increased million versus fourth the Excluding XX.X% the the and year X.X% and decreased XX% in year Consolidated decreased $X.X prior million. in $XX.X million year, totaled EBITDA general performance, versus prior quarter period. to fiscal to $XX.X to an EBITDA Briefly revenues full effects million expenses year fiscal the fourth million XXXX $X.X Consolidated to to onetime million Selling, the EBITDA for of revenues $XXX.X $XXX.X turning year. increase million fourth would million full prior XXX%. the the prior over $XX.X compared consolidated financial declined totaled declined year. quarter the of full XXXX, have our

$XX in of correspondingly At proceeds marks net we operations $XX.X investing the $X May a full XX, sales million a operations of $XX the and compared by million million and million. $XX.X the as sale cash to to to the a a combination flow subsequent repay Let’s improved through million fourth proceeds. reminder, for compared in of million million million quarter prior-year of Cash Windset year by our debt year the cash the used for end from prior was our which But activities realized of a $XX.X to improving CapEx reduction $XX.X provided turn investment, million in now XXXX, interest increase by period. improvement the used was the debt $XXX.X ended fourth performance. to quarter, our $XX Cash in close.

pro turns. Our would forma net net been million, debt $XXX.X pro X.X leverage X.X have have improvement of and ratio forma would our an approximately times, been

to that, and strategically create financial and improve With the XXXX, of some every comparability. we similarly that and outlook to so. considerations to cadence of our the will position flexibility will we share we fiscal that some continue want execute do of business, We can and with to help greater impact I each and along year shape our our financial plans continue our review to aspect strategic ensure as for drivers the

outlook Let's consolidated year. begin the for overall full with our fiscal

consolidated as to a representing to $XX of of down range increase approximately to of expected representing X.X% million to XX% a to XX%. million, of in in and to $XXX $XXX X% are million million to $XXX $XXX a to At EBITDA a and EBITDA We are revenues $XXX to an Curation increase representing $XX approximately in adjusted to segment introducing the in million, of million, of of of of we adjusted expected guidance the growth $XX range million $XX.X are X% EBITDA X% revenues decrease increase an XX%. $XX to representing range guiding consolidated million, for Foods plus the level, million, of X% million flat range to flat an range is of of million expected approximately $XX.X range adjusted X% revenues and a to range million slight the year-over-year representing representing $XXX XX%. Lifecore in

guidance judgment consolidated how builds about level future and think framework performance. some your is our it inform As the segment into it outlook, you and think to to we helpful of our modeling share

discussed, in Lifecore, to growth the to second to elective second-half to first quarter flattish procedures. expectations an year is fiscal substantial for for plan hindered by customer our a transitioning putting with we meet top-line growth growth headwind, of delay XXX to basis rebalance revenue expectations The half, first forth XX% long approximately term perspective, a result results year at as Lifecore’s we end X% that guidance. inventory into half as growth starting back inventory the which compound in Lifecore’s on full due of excess we annual then, XXXX From bridge expect will expectation the today points to the of First, basis XX% in fiscal is are Layering this of points to XX%. for mid-teens. the to approximate low XXX the adjusted growth in EBITDA

the quarter With XXXX. first prior first results from quarter approximating our the year fiscal

recover should fiscal very the our X% half, the growth to increase For a year, implies which fashion XX%. fiscal material meet second guidance an to approximately for of

that Jim to and investing As marketing sales, and longer in anticipation the in to capabilities growth. keep development revenues development enhance in discussed, activities some drive businesses term mind please future of

the long realized. impacts consistent yet Shifting quarter of expect of segment, where adjusted but resets Curation fiscal fairly aren't EBITDA we to expected growth, year margin intermediate expansion first term. the and positive store So, over to temporarily the over the a revenues the is for on quarterly muted sales completely higher resume Food

single operational we segment decrease efforts [ph]. XXXX to And XXXX perspective, of case those margin year modest impact to due our meet year we finally a to growth in of of from are And been $XX with primarily for enhancement relative gains and steady as year $X year modestly cadence better from XX% of higher believe more an operational prior with by place aligned heading and some that full XXXX, digit year up with more XX% first perspective, will important favorable our to on at year to since full fiscal referenced we be gains thereafter. in we that, are Net the We expect a we result largely some on the margin spend the range a quarters automation a the to comparisons. we adjusted basis from X.X% this of plan KPI and the as the projects expecting operator, fiscal EBITDA addition in for and XXXX. a saved minor drive improvements the EBITDA followed has to some state Curation CapEx at translating first embarking quarter, into rates X% we for year million Curation much a XXXX in those growth the quarterly XX% fiscal outset fiscal fiscal the initiatives. quarterly for additional implied to goals ended maintenance Gross to have in of via simplification as business adjusted with that And billion year. gross expect open the So, low Lifecore, on and third growth Q&A. an enhancements. in And related CapEx call to projects full year Swift and please the for those we realize

Operator

of Our [Operator Smith first question. Mark your is Instructions] Please Street Capital Markets. Lake state question from

Mark Smith

the guys. taking question. Hi Thanks for

is bit. you kind pressure or the inflationary labor, Can to whether look Curation of this some to a increases it of to little mitigate just it's delivery, this? Foods where of initial I whether discuss at First, ways other price response want seen kind and you've

Albert Bolles

you are Hi, doing? It’s How Yeah. Al. Mark.

Mark Smith

you? How are well. Doing

Albert Bolles

think more took the last of with good reduction we statements we actions a But getting this ZEST. A some I have And automation tighter. is said and and type lot workforce as head program to the direct continue materials, focused those we're take in costs we impact corrugate have from to our of year on of pretty much very start full-year like planned as our To things. on the earlier the the footprint inflation packaging, SWIFT our coming with further well. things that out, we my that getting of efficiency

pretty coming much where they're from. that's So,

companies a inflation feeling And like continue other we on in culture much is thing. and we feel are of year going right focused, know to walls feel we things the But bit and that focused head have on those to it's the do margins Mark, have discussions area. we're pricing same risks more not a in other a think if going But think as headwind, is that some little gross we're afraid because we our we this where that have mitigate a head achieving build, now. but take have are fiscal we start a business. And of those that. a that leverage I to really have see of some on we planned we to one start we for us level XX% to we're our

Mark Smith

or then Curation, service any from and you're behavior with maybe consumer in benefit any can behavior seeing, you kind just with maybe discuss more changes Perfect. consumer from the benefit of Changes reopening food on reopening one in that? and And what that? the maybe

Albert Bolles

Yeah.

head hired food never we service I focus, food dedicated had last salesperson before. previously, As service had mentioned We to a of that year. fiscal

is open area. we shipping as growth us So, back, which a Amazon, for as we in And new in started channel the that food are service just for we had coming our us back recently, well business restaurants seeing green primarily to as salads. in anticipating before. not are We're been bean it up up

with very continues as growth us. grow away the as that, from continuing category for strongly well to expect home with some we HelloFresh growth from So,

with to to big a benefit that, which starting it see last during was fiscal decline up we're we're So, open and COVID our going part of year. really from the

Mark Smith

for at last Okay. looking just And the then me Lifecore. one

word take this more it know timing the first kind could of slow gradual more of or -- be away look as far half you the pain abruptly? as levels And then this kind right this of could in Will first on roll of of customers? roll and is off next change some excessive new that anything I that kind help the the throughout don’t in these know abrupt six new the months there off. we the it coming or accounts is happens half at if inventory As is inventory of a kind

Albert Bolles

let we they’re first -- give inventories stockpile we for first me in for kind COVID, track Jim color over had to and built and January. off that take half the have don’t But don't Yeah, of some there. the the until into our color. But roll I get color. have and visibility turn visibility and they in expect more I'll of to really customers’ more during Jim But part we it order, a back let more of year you here on will really that

Jim Hall

they And some in let is up have them things Yeah. what of Most would US, the the in are much to through Hi, the these issue customers the as worldwide. of with work The historical understand world. their surgeries order is, to how the it opening pretty their up products up they the started noticing expect we there, got They the what reason back through. and And to started some Al in really over not rates Mark. much lower all lined what fast QX. US. for Things build much issue things and open said, sell rest we and off working Like insight so not -- patterns open. is of from our uncertainty the product. so with of was levels inventory customers

offset try as open up we But pipeline hopeful it potentially goes. we're rates some projecting happens something hand-in-hand to our this with vaccination like But quickly continually these things build could we're that. to and new relatively up. how We're pick always, understand that So with we'll customers working it's projects of that not this. monitor, and

Mark Smith

Okay. helpful. guys. you, That's Thank

Operator

question your Maxim Instructions] Anthony [Operator from Our Group. state Vendetti is Please of question. next

Anthony Vendetti

you what's the follow -- near bit going wanted total a could margin -- to can the to if by we look down you Y? quantify was comments or expenses Good mean to I term. Castellini Transportation. there. afternoon, to made more little we efficiencies wondering you're Thanks. bring your Obviously, on your And And just I I the agreement what with in X up could opportunity. Sure. guys. contribute by was what's there? on this Is looking get this for What the what can transportation then -- some

Albert Bolles

you This Yeah. Hi, How Al. are is today? Anthony.

Anthony Vendetti

Good. you. Thank

Albert Bolles

I little was give logistics driven effective. our efficient and background bit you and us own to want here. had more more just system to a by move to talk be We this of primarily

delivers six customers. we to selling our what we get times fresher to just places. with week able fresher to the to One times agreement primarily just just shelf. deliver decreased shelf. white not amount being able there Castellini it with our on and and six a right with that for the to roll should And middle starting system shrinkage And those into and primarily That's product of that in which put us space the translate the there things in is today been help do this in products due going our are on have Midwest couldn't is deliver a to our implement we're the we have us reach week own out enables now, us place, of at logistics now, It's places a fair to to out it. to of

help business to there system. to new going where our our of cannot we it’s with us generate own able So customers terms get be being able us in logistics with to for

that to well the fuel. on pricing able not do didn't scale able have based of to ability hedge we as have were We the they being So that.

been have in our terms that. So of couldn't timing doing better

going add the to we color efficiency you really the that effectiveness any good So John, feel to and we're like here? about reach.

John Morberg

what do, right? experts It just nearly Castellini weren't We was great. as we It's something full that with efficient. that trucks. really were it's in out It's it. just they No. They're sending

And one a partnership. delivers. have year cost six know a several the You And the us Castellini really the per only a guaranteed can we're of I that we million built in it products have better. would -- days it as get agreement, week dollars. strategic And this way, describe by to our in added of and deliver savings

being a inflation for of part space, was better nice probably company so. right. have benefits for on timing couldn't a benefits better those to logistics the things. there's done particularly And lot both distribution, just pressures year I versus be team just think It's of in work a a lot And that think white a logistics And it's having then for of of into walking all And the the of lot company so. and so from it hitting costs and or inflationary really to that out. figure a lot trying year project just worked the to get a the there's I

of our provide team about the very is sales our levels excited service because particular. in So it to customers we can

Anthony Vendetti

drivers… home-grown that sounds just All had mentioned clearly the a was as transportation has for and you right. inefficient Good. expensive you for truck all been mean, of events I as reasons external industries, well goods you system trouble like getting the across hiring said, like going it some all on,

Albert Bolles

Right.

Anthony Vendetti

…various reasons.

specific savings and to efficiencies just is that and on you want sure, sure, for systems always looking on that recognized SWIFT, regular date course, of so just total I'm better I'm working to to off just and you're terms something, to a a into that basis. question. of But that in was Project do SWIFT had SWIFT, big is going a efficiencies But end be SWIFT, focus constant because -- Project segue for have And recognizing, for at is forth. your implemented. where plate, win. I'll you’re I And Project this get since is right, if what improvement to we Project So quantify

Albert Bolles

a fan. baseball Anthony. big Yeah, I'm

say We deal us was my to a in at of strategic probably just get had focus much way do and the really improve inning rightsizing ability our deal end looking to of that Project implementation well. now SWIFT get way I just going a we’re it's sixth So way of on was in after. be begin was of that fiscal The to the and It so the our SWIFT. the efficiencies the we're and us. that of to it’s done is for the to always as operations our to [indiscernible] Curation Foods, year key would at is important terms operations. part a

gotten our had things Castellini lot the as that we of I where "we have that's a just sooner, well lifting would is So, heavy done. many -- that so other but had our from rate system up" place terms standpoint in and with people the clean that size of footprint the a right that. to in in operations to our along structure go would

Anthony Vendetti

an Okay. you basis? And a implemented Project but date annualized savings have since -- Al, you do SWIFT you have on total to

Albert Bolles

Yeah.

us to gross focus range. enabling been and gross to -- key up XX% us So what's margins get margins been XX% as our our Anthony, for that's to a on part that we that's

for $XX assets date, to balance we In going we you anything inflationary the see around sheet terms I million that down as been our fight that to here us sold of to and pay Anthony? focus begin to add it's John, on or with the dollars help debt it's so wanted ahead. think pressures to total

Albert Bolles

than savings think It's picking Yeah, simplification. make change. It's to just simplifying. really think trying a to I Project about about I'd Anthony, that more a just and and add SWIFT it's up I is also but assets EBITDA, cultural

And so, And set we monetize strategic. instance do how like it's when was investment. not things for that our

we things around logistics think SWIFT. those that how lot and project our of us. CapEx into find business. we that a very a more strategic going is forward strategic is put idea also investment thinking sense. that instead more fall it’s for just just for And makes a for through a business. very really more could the It forward, lot CapEx was way the Lifecore’s partner of Lifecore’s makes strategic do going it into So, It sense. It the in smarter kinds

but a work So, smart how but, how for it at more culture put do bottom really in we as do wasn’t do way. way well. how in line our we just EBITDA make better the it And a we us

I marketing just, in so skews the they brought the time really bigger And think behind and we're a he like And efforts, that the with -- idea started -- get things it's process that's I benefit. Project just with, And when there's because for as a culture it accomplished. it'll the I and or just, the thinking without starts -- falling are think of we within to we've company agree when it, SWIFT. be inning that really kind probably much still all that as of Al more like some So, can getting just we so. it's feels quite think framework our it's it rationalize the through those fifth brilliance of the that

Anthony Vendetti

that's no Okay, helpful.

the efficient. a piece any huge are a any you've that like big business was there's near-term obviously there of there -- fifth much make during -- horizon hey the Just a more there's that to here inning, transportation there's, big items this particular are item, on Said the opportunity identified.

Albert Bolles

in Well, forecasting. mentioned. is terms continually I look Anthony our we got think as is less work SWIFT improvements big to things our And improvements of simplify. a processes, lifting our inside the to most the us, heavy we in how of behind of we I at in focus bit to And lot made business, with

our by diversifying How about the planting grow we and for that about that and harvest things a can that, work to now how area time where than our or very footprint about in We we We're for harder us it continually we we’re how So forecasting But to facilities. to business? talk in leveraging we’re as on to improve we're and we get harvest? two much do our plant business down believe but had I’m green manufacturing have before. we seasonality working today, ready that to bean standpoint, upticks plant getting well as not efficiently ready I the from more really castaways. it's do much excited

which line that had Beach Rock beans. facility. We it one down to So we’re Hill in green able our made take shut only down Vero

able green with made Green we're beans that the make all those to investments in we Bowling Now, there.

to is the for really as getting move us heavy lifting big work for So But on focus we'll the about part, It's it opportunities. us. forward. most we now the continue behind to

Anthony Vendetti

in helpful. Very Okay. Thanks very the queue. much. I’ll back hop

Albert Bolles

Thanks, Anthony.

Operator

is Our Barrington Please Mike your question. state of next Petusky Research. question from

Mike Petusky

just gets just and that talk for or terms product in that expectations out could possibly of remind a guys. successfully Jim, Hi, of goes others in I in approval clearance? regulatory term, and in impact you then a sort the for you evening. short typically of out how time your Jim. as just a the can that customer and first terms will of to time the Good few one will short the play guess then revenue terms Thanks. how of about sort term, margins just customer that's regulatory of that play over over sort gotten in me commercialization,

Albert Bolles

ahead, Yeah, Jim. go

Jim Hall

Okay. through typically good it's the a and product Mike. commercial we and a how But the It's production. Hey, depends for in utilized doing? How that qualification qualification are being question on you lots lot are process work launched. also process,

is product of got least on what So a and little sales launches, not longer. wants happens that's it building if Lifecore company, force, the they're a customer it's If sales sales a an quantities. just But depends it's commercial launch quicker. earlier, large a how If it to and rapidly newer established they how build force that a before customer a is it their selling quarter, it force. takes and type depends on product build then at pretty typically

after in typically, gate. wouldn't targets the the business working for out first it build launch, as we penetration and our up. year it Otherwise, our fiscal with slower line faster up. happens, the ramps typically the on what are that Margins relatively And right happens, is product. the ramps So, be in market quicker are fill/finish

update. on a quarter adds with get a typically every that on work we rolling six-month new forecast So time an we products

the How on market. fast it all things. penetrate so depends just they those And really

hopefully that helps. So

Mike Petusky

Okay. Thank you.

may And sorry, have CapEx coming missed for but this John, fiscal. this expectation I

John Morberg

Yeah.

this last Curation to So $XX million $X million year. at Foods quarter we and suggested up

Mike Petusky

Okay.

the expectation for then assuming fiscal almost negative free flow year. I'm So cash certainly a

Albert Bolles

you count flow. for received free positive be the if Well cash a cash will wins that

Mike Petusky

Okay.

sort just free flow -- you higher set But of have a flow, them expect yeah, you'd expect cash more year negative terms But a Okay. in negative would of aside to year. free last there. cash than this from wins operating,

Albert Bolles

Yes. be guidance true. upon that probably that today Yeah. would the Probably based

Mike Petusky

mean terms in straight -- you to that spend or that there is guide there? the sorry, that? is just the of XXXX, Can line? speak in any terms fairly of lumpy cadence CapEx And fiscal right. be And of be in can can Okay. I is

Albert Bolles

think I think the for you it's could mean be I -- assume fairly I linear going year. it's Yeah. to almost

Mike Petusky

COVID guys to then going seeing that impact sort have speak your hope the could avocado you better. just and were what Can Obviously, to business. what there I the what’s there in some And seeing on with you're on you and hope comp speak great forward? guess wasn't less avocado maybe would of that looked you’re year-over-year

Albert Bolles

Yeah.

the seeing bit. a down category So, we’re slow avocado

some very in competitors in There’s products with that very marketplace. have that squeezed was COVID. is of be excited it. digits well. we're the our we our confident I'm growth rates remain avocado mid- to products But Some products, entered new to high-single doing about the going

previous have business aside for that high that extremely some this repeat year set in We years have and on sales we've got not had and money we marketing.

we out Guacamole where new the Cincinnati in now product of all right test positioning our a in building rolled are awareness, the Now products. We around just

we're testing have how that grow can that because it extremely And awareness to that. because want It's well position of to well. excited we that once aside and build we at and for get us. behind exclusive a fairly awareness, Walmart we we some our we really get product They've products. set doing do to have fair gotten we And does marketing with dollars So the amount about have products. continue

category lot the to is the outpace positioned bit, good But private So going label we see down category. and mid- a well is to growth to a we where are which really single-digit of pressure. slowing feel

Jim Hall

Mike. Hey,

year, digits, last close out back very and week grew the I think the so full year, extra, the we XXrd consistent and the year in very if category fairly the mid-single last X.X%, the grew actually category. with you -- for

Mike Petusky

But… Right.

Albert Bolles

as… So

Mike Petusky

Yeah.

Albert Bolles

-- the out backing X.X%, but it’s off XX to X.X%, week. XX So XXrd yeah,

Mike Petusky

Because I just got to there seeing have just guys best is Right, just going sweet thing there there out sweet to forward. number sort Kale. revenue a something you're think I you. with product now but the either give guys, a rates do you special probably or come disclosing product that's us it's opinion, sort sort right. of not Sweet of for of a on I or think sense? Is any -- so potentially, think I openness you Al, but the I that that mean, growth my

Albert Bolles

and up Yeah. We it. did last Canada, region. you, tell that have expanded disclose all we year and take with Quebec customers launched the are will now did the Canada I as rates. They growth in we're those -- to US of we in in Canada, Kale in Kale with have a don't customer Sweet Spicy seeing well it as that to with beginning Sweet uptick club channel retailers some Spicy mass the in a

bag, So very Sweet along packaging that of velocities slim in all now Kale, club we we're uptick to some mass with Sweet retail, our with Sweet the US are in variations in Kale channels in continues with ongoing to to market, our more bag of tests slim our in be different strong test And We’ve Salad. sales, when seeing we nice the and are switched some have salads. for Kale of us.

is profitability for innovate of for new driver ideas big us. we the a we take And off the at least of. that flanking it Kale right we be Sweet a to platform to continues are it with because So -- approach think us

rates changes, flavor changes, packaging So the growth some this of year. we're expecting

Mike Petusky

All Appreciate right. good. Okay. Thanks it. Very guys.

Albert Bolles

Thanks, Mike.

Operator

question. Gerry your Please from question next Partners. state Capital Our ROTH Sweeney of is

Gerry Sweeney

or and good afternoon taking call. more Jim. thanks for good is probably my The for Hey, morning question

around over the got it $XX think I to CapEx million units. capacity million a think or helps XX was take that filling in investment right ask units my numbers investment I like from -- million next to years and XX the I question wanted Just five

if confidence of the you -- what to $XX that much. as million by going type to And what that if hit curious two, expand that Just you fill, gives business is then within and [indiscernible] would other do mean P&L. just the what for and Obviously that business to to incremental and but profitability? I'm see does development behind curious that there's revenues revenue

Albert Bolles

Yeah.

Jim Hall

want me Do to.. you

Albert Bolles

yeah our -- Yeah, on that modeling it’s build so, on really Gerry. And six and confidence, the right touch I’ll talk ahead. But development Yeah. in touch it. the of Phase -- of qualification things, And have rate pipeline. drivers our this too. needs. we Hi, in and -- can primary later the so pretty them X about things commercialization Yeah. the we X, Go future I’ll are along and of now, are out of far XX capacity

going we've so focused. the back that much capacity, for. some And to also capacity to The process several you lines approval need it's prepared talked focuses at clinical several phase gets we're need add that's know us early we're from how product. So, since next to rates year be and over about, we're as commercial we really looking and a to years all filling that manufacturing on additional commercial segregate spend out for preclinical the capability where building to

I as and at we there's look capacity, said this facility too going the continue capacity generating really So, maximizing focus by that we call, build out expand that said to revenue at our capacity. generating building we revenue pipeline. during that out And doubles like the building and and

of this give should and some we going So, forward. it idea see business you supports how moving where a that

Operator

Bolles end question-and-answer closing session. to the Dr. we will of Al the for gentlemen, back reached have and And now remarks. I Ladies call turn over

Albert Bolles

to look in when again you to very Landec release again in participation the and our quarter. much. Thank today. forward interest we Thank for you your once your first talking We call you Yes.

Operator

conference. today's concludes This

this lines your you day. your a Thank great at disconnect may for have and time. participation You

Lifecore Biomedical (LFCR) 29 Jul 212021 Q4 Earnings call transcript