LNDC - Earnings call transcript Q3 2022 | Lifecore Biomedical, Inc.

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Operator

Good afternoon and thank you for joining Landec's Fiscal 2022 Third Quarter Earnings Call. [Operator Instructions] 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

Good afternoon, and thank you for joining us today to discuss Landec Corporation's third quarter fiscal 2022 earnings results.

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

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

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

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

Albert Bolles

And review will afternoon, outlook developments Jeff. and that businesses. for On today. today. Jim us reiterating of will thank will XXXX brief call, And discuss I Hall our then Thanks, financial joining today's provide Lifecore. our Morberg you at a everyone. then fiscal Good John overview recent results we are

fiscal work half. quarter, following inventory of rates Business to million. XX% we normalized third $XX.X revenue your the Fiscal first that through that quarter, third to business of in channel we pipeline. to In revenue call questions. to fiscal drawdown development will then in open by for two return the We projects our Lifecore are our customers new added the grew announce And excited more

through reminder, this procedure volumes. elective delays of was a induced result was As pandemic a and expected

that going facilities a patterns Lifecore’s also environment to care products for reversion more forward. consistent will health expect more to operating and consistent create ordering We

And in fiscal generation fiscal fiscal to expectation, third delivery of to we XXXX. mix EBITDA this the Nonetheless, we a fourth on our remains to Foods, know for track believe quarter. we respect saleable avocado result, year and a With full the by that rebound guidance well confident are timing in fiscal Curation products growing as we our third that quarter in achieve quarter. within that adjusted I consumer positioned industry, supported However, degree are reverse expect exceeded on trends. weighed business our

with inflationary we segment fourth While year’s a the fiscal business the margin has improvements meet to effective will pressure largely the pricing mitigate in by quarter impacted significant combined expect environment operations. continuing full recently, allow that our operational become been actions from us and guidance associated

business believe As this well positioned we look is ahead, growth. long-term for we

for is major is that more Processing Our has customers High investment with an inroads is We or than Pressure the label of of significant opening that placements, which this asset whole. industry recent think as industry growth is the a Xx that value. area HPP private experiencing

versus consumer Our brands our have competition. stronger reception a

we and the amount purchasers in efficient repeat We compared competition a our automated have Mexico. facility production have doubled of best-in-class to and

business for olive premium to pertains packaged project well integration it remaining markets, positioned XX our both which Eat in of December avocado team progress. the through was and and assets, products, oil following on and Smart, vinegars. process their As reverse the respective we are of We focused believe our our remain value SWIFT, salad maximizing each our sale vegetables making working fresh excellent and

meet fund toward for third initiatives debt quarter maximizing repayment, the growth development remain as I and moment excess balance to board characterize for anticipated our optimize to guidance to a seek accelerating our fiscal committed the well shareholder foods take we financial assets, to deploy reporting Our value the pipeline. I our Lifecore’s of creation year. fiscal and from demand as also want to as remaining cash

Smart in to we that of quarter, period. discontinued sale the fiscal have date With third operations Eat the for shifted business fiscal year into

As second fiscal the guidance as pro during Smart the fiscal we full our which fiscal segment, for the Curation the quarter, of Foods forma of at beginning recall, elimination provided been had contribution the you may assumed it if Eat year for the sold year.

a strategy. the our we we significant I fiscal In call $XX.X Foods we've over operating working pass With look a through made desire remaining segment. providing on guidance full forward for to realized place improvements Windset the value schedule actively operations we investment, reflects which it forward lot We for in sale. And execute successfully ahead review businesses our monetized Lifecore the year. and the recognize action assets, optimize. the operational Curation I'll updates far so as shareholder continuing take Eat deeper to of As business. a our from our summary, of million, to $XX.X Smart we additional discussed, year that, our accomplished of within remains Jim, to XXXX as Curation go of business quickly. we for this We to such Foods And you million are

Jim Hall

you, Thank Al.

our Lifecore attractive is operate a to opportunities CDMO all advantage financial growing positioned with deliver returns of to to of continue to fundamentals dynamic We stakeholders. perfectly CDMO in the strong industry take and

with outsourcing a syringe beneficiary trends and drug are new towards injectable filling that applications perfectly ongoing are align Further, new vial capabilities. industry and of trends development. a these of drug favorable capabilities utilizing our We

XX% growing In of and compound at new demand annual XX% injectables, rate. are fact, approximately drug all applications prefilled a syringe is

to the over demand to capacity been we've of advantage capacity, limited that opportunity take intend fill the drug investing with incredible this unmet Given years. few in existing we our industry's past manufacturing injectable

with of development fiscal existing which we pipeline supported to the advancement with new our X and XX Phase expands are projects. These Our In with development validation projects continues X early work initiation new clinical pipeline projects development quarter, with projects, development be projects, X clinical two nine clinical very Phase phase and scale early projects, to up phase projects strong, and activities which different of XX customers. nine six on and by projects. third the initiated commercial is across development spread

continue X with the stage. We progress project advancing X our projects to stage commercial and scale advancing and advancing Phase phase with to of within late early projects make up to pipeline, one full also phase one our

potential Beyond convert push our existing engagements. and to pipelines, ahead we continue new

end opportunities of small. an markets, which are dozens assortment span and classes of large have We devices, multiple and and multiple medical we drugs of companies both that pursuing, with

to fortify marketing and invested effort the sales, expand development into recall, our customers we million impact year and expansion pipeline in our which to our an sales existing P&L increase complement resources you may services, expand As an to to capabilities. $X.X open ultimately of to us new expand had our continue There's prospective no with of to allows question the development and has our new immediate channels this reach fiscal that that pipeline, our opportunities. and this

a leader industry. viscous and that our enables as and world devices materials expertise out supports products in to system complex drugs, and Our management quality us the class added stand and medical CDMO specialized and value biologics, combination

will projects opportunities. our revenue by to term as work about pipeline, feel enhance attract known our growth within we new acceleration growth trajectory, our further long multiyear confident continue is to which and existing a We in delivering projects supported customers

joined decades. development control And and and lab lab products. be This completion CDMO team in SiteOne workflows hallmarks XXXX. our information XXXX. the been for expansion commitment This February, operational respects. we safety program. with management And laboratory enhancements will more our safety of facilities. example operating is and to The we new effective analytical advance the improves for their with operational to In with for quality of of system long-term updates, culture now to both sites this another of terms and on improvement and expansion our in great as of our to additional we since four that our Again, recognize labs we take visibility is and which quality June our that progress a I In be to Min platform our excellence. several building three, partners May provide over we're our Quality nearly targeted team great for continuous seriously, our enhances our OSHA implementation clients. our of critical expect of making and of customers. for us XXXX, partners capabilities, We've with been two sort and which continue data recognition and an allows drives from to and enhancement win with Lifecore are received a have expansion want working capacity combined and Sharp-certified and Lifecore safety January trust

and process talent key resources initiatives Finally, expedite been late Since Lifecore able calls, we've some which in we've shared for initiation manufacturing around its call human training in the past we and positions. onboarding level XXXX, development, to technical University.

As time XX%, a example, necessary the business reduced filling to we key the technicians to timely plays an qualify and effective growth of have by aseptic Lifecore which has takes formulation in it our role resources and ensuring the a manner. support in

certified a great graduated those Sigma XX, XX This Green we've lean yellow for a individuals. is practitioners, and organization one Belt, accomplishment our addition, Six certified Six total Sigma In of belts. and for

these excellence with culture investment the problem of current career XS team really which results, revenue From continue and our program are excellence to expanding speaks within maximizing a generating focus I'm advancement. Lifecore investigation on by the result training solving, a capacity success, this perspective, capital at the our As include pleased we along we extremely principles. here to of infrastructure. on to and commitment members’ to

source to we long-term our future equipment continued meet to to expected optimize and are our to capacity growth. we looking ensure addition, needs and the In profitable facilities drive qualify

current our been summary, next spend on the and demand be are XXXX. million CapEx approximately this operational in shift about fiscal XX our we've capacity our This that pipeline. from units us able and our beyond million million to to day. keeps CapEx very units approximately to In expand of end, $X meet expected now position the million fiscal we're For filling for track excited with we to excellent to expect $XX to year, XX

allow We continue generate and capacity strong, continue growth our years industry to ahead. take advantage of to strong us trends, the will to and in sustainable investments

the call I Now, like to would John. to over turn

John Morberg

Jim. you, Thank

fermentation CDMO and our in as strong driven XX.X% revenues which increase quarter. a total drawdown. fiscal XX.X% very inventory prior improved increase half year anticipated, $XX.X third XXXX sales fiscal a in channel we second XX.X% of we The a our versus Lifecore in the of a the realized our is business, move business consistent past million, had or by As with period, increase business, for the expectation

customers. to Furthermore, X.X% The adjusted EBITDA results. combination quarter, XX.X%. resulted adjusted for points, and of Al than complexion fiscal some revenues in versus greater step in in relative However, fourth EBITDA toward fiscal fiscal anticipated the quarter, a million XXX lower reverse of of segment to was prior to which our as XX.X%. is fourth timing to as those due the revenue for geared lower our of deliveries adjusted approximately in to margin compared noted, revenues the of EBITDA expected quarter third quarter quarter, year margin and timing gross to basis this representing was largely turn, an growth skews, In up of fiscal mix making resulted third relative decline of the margin reported $X.X and higher

the second The to half. our for guidance second results is implies year basis to versus here guidance decrease for in half it full adjusted guidance gross which by half, growth of half XX% to to of more EBITDA, look the we've revenue fiscal Similarly, performance growth to Given decrease and primary the full a to X.X% for that implies X%to is growth X% XX%. second segment XX%. year-to-date of the nuance, points XXX fiscal the calls the fiscal year year expected meet that X.X% today margin, timing on prior second informative our approximately year-to-date is which and guidance XX% of our based to variable reiterated meet at approximately calls period

metrics financials. the our that divestment to today. in impact well quarter We our fourth to full reiterating approximately in Eat fiscal of Nonetheless, now guidance does comparability normalization segment imply, shift related in implies today. we I'll discontinued guidance, Smart However, impact second into and not our which our figures our explains operations Foods reiterating third here we are basis we XXX margin as to in phenomenon. sequential fiscal the from the performance quarter Curation our of half guidance largely statements achieving asset way are a mix December. year business quarter fiscal financial moved following are provided HA on formally the that change to we This which improvement operations the in in points. this of Again, second

midpoint As BreatheWay. products just Together, $XX.X forward avocado million of of at segment mix. products few revenue a reminder, is comprised Foods business, our oil and the our segment, versus a Curation make guidance continuing the comments olive our avocado operations business of and I'll O reflect representing that, our XX% approximately the year on which the this comparable annual go of represents prior approximately with period. vinegar With segment results the now

EBITDA from temporary Curation margin compared comprised loss in offset driven by we generated year associated quarter. million. inflation, fiscal $X.X operations the from year to guidance adjusted increased our million, to sales O fourth quarter is revenue the an X.X% in with continuing of increase confident for expected by and Curation avocado Foods XX% million with X.X% period, products. First, segment. velocity full price Foods Thus, This headwind which of olive, prior to be $XX.X actions adjusted remain a $X.X was an a in in EBITDA increase fiscal of third in

business We base with both infrastructure, foods as with are solid smaller our for reverse a making our progress revenue our size, work right on of corporate to integration go segments. and we curator

the $XXX.X sheet, the a quarter of for bank Now following Smart XXXX, debt in fiscal net turning which reflects basis to reported $XXX.X million, our third million of of borrowings debt ‘XX million, compared at bank balance end of disposition. February our XX, repayment the $XX.X to net was as fiscal on Eat

borrowings flexibility. from summary, Eat in investment In million that the progress year, and significant simplifying to in and this we've $XXX.X enhancing through disposition. However, business Windset I'd fiscal like proceeds far our emphasize net a we've of financial repaid utilization of so the total the Smart sale, made the our

ahead which with on fiscal I'll full Al. have call With our year-to- our looking to guidance. fiscal our results, building a we our on to date pleased And back XXXX. in are the achieving over We turn to us year results XXXX way that, are well

Albert Bolles

to stream open results sheet and There's made significant also questions. have for are we balance a business margin And through strategic and And SWIFT. due to In maximize with appreciated consistent to But have operator, marching We have to more flow improved brought be our by growth with please as still for summary, structure. improved better we advantage ahead progress focus to can cash work the the an we now operating improving some shareholder greatly of due actions. team significantly the done. our work we is our the stable believe the projects foundation community we be that a deliver value. that, solid investment call profile

Operator

Lake [Operator first Capital from Smith is with Mark Instructions] Our question Markets Street

Mark Smith

during squeeze us had Lifecore through margin much the so of was it bit profile of that what Hey, sorry, that ask just you want as margin, the in kind quarter, them guys, strong little orders a just to business. on walk

Albert Bolles

Mark. you want Yes. is that? take This Al, Hi, to John,

John Morberg

the Yes. Hey, Mark, for thanks question.

patterns products. when fewer margins, said ordering points the created the of higher you gross been our you half really approximately then first year more and this procedures a half first normal And for patterns our worked as second margins in the the to that beginning Ophthalmic due of now to year, timing you earlier, think the typical basis a timing second turn, And gross prior half know, inventory to at in were But being fortunately, and back have margins during to year back and XXX half. than performed in And result, -- also prior ordering mix COVID. half. And in the through. that's that we're year step I back comparison through created the mix. our change in Viscoelastic to Al half first all to due as to the here we as of work had rebalancing, look

XX QX gross XX% think as in now I we're QX, XXX we're consistent but guidance with said margins less the margins estimating the imply today, XXX expectations. at I to reiterating of guidance it's QX, you and of with XXX view midpoint XX the of increase now is in which points, really than range prior in overall, our So to remarks margins basis percentages, is this points look gross assuming approximately would year then basis combined half year, and sequential my the the in and full second best which which QX since percentages,

to is that's the our probably to got way half. pretty at at think, look look think I with back Mark of And much you best I the kind expectations. So it, aligns

Mark Smith

And is guidance? the Do that's we as about think of like No, you through kind helpful. of you there read on this insight do up? the how conservativism guidance level Or any where you quarter and into business have here, is feel think trending? pretty into built the do out good -- rolls there's a finishes

John Morberg

from Yes, insights think confident, We're reiterating lot a feel the at got we can, perspective, of Curation. I numbers my we that we're just into to Sure, but great those I I Lifecore in about our customers both this what right like beat good think are I and we guidance we've think see at comfortable mean if today. pretty point now, and we'd doing them.

Mark Smith

two added or last Maybe with I'll for Maybe I you customers didn't me. quickly. these one it me math. new do the projects relationships. were The were existing one ask for to do that

Jim Hall

this that? Jim. you me do want sorry. Yes, Mark, Al, is Hi, take to

Albert Bolles

Jim. Yes, go ahead,

Jim Hall

customers. new with they're right. All Mark. Hey, Yes,

XX project So the XX load at total now with customers. is

of pipeline now. right our really the in amount excited have activity we're with So we

that of go efforts development the projects with advancement through continues seeing and a very our continuous addition the close a that moving only we've we're lot really to of build the deals. but sales in go into And continues evaluating. within And marketing signing the I stages various development forward well, the Not the and to well. that new of the with amount we're seeing also think benefits really, and made we're enhance to that. investment to moving opportunities, of of pipeline, products

positive. seeing we've a lot very paying I it's that activity, made. of really or think the we're So benefits for And investment

Operator

with Pinheiro Sturdivant is Our from next Mitch & Co. question

Mitch Pinheiro

afternoon. Yes, hey, good

of my mix. And guess due So sort Lifecore’s size mix, the the was that quarter follow or strong. in mix side? is CDMO of I CDMO sort in first the mix, the mix? the Was of lower fermentation just the on product up question sort a negative to part margin quite the And XX% because margin growth the of

Albert Bolles

go don't through next one? John, Jim, Yes, or either why you part

Jim Hall

impacted Yes. our in kind the Viscoelastic half our which really side, the Mitch, the back again, it's to of legacy primarily first the level. inventory were with the CDMO Ophthalmic of business, products,

the So, to side. really with do has it CDMO

Albert Bolles

impact HA Mitch, picked normal our had had a more of ophthalmic between carryover and QX into add hoped. the the large legacy we was I'll mix on moving really just that forward. actually this that business CDMO up And and now with back we than overall faster accelerated the biggest and inventory had gets involvement in loads

Mitch Pinheiro

overhead the products any pricing of truly like to was the Is due to allocation? And like within maybe Okay. of lower the volume facility cost or related revenue? your through that it basically

John Morberg

a I of mix look, it don't mean, of we gross do skews it's I various necessarily margin. but think levels have Yes, pricing

at coming at And I we very we're for year, feeling we second full you some because is what's itself. look But in again, higher when the back again, in order think orders, the half on assortment confident and the know gross were those and margins advanced margin. that sometimes slightly we sales our know half of what the lower

Mitch Pinheiro

And when what overhead on allocation the the overhead Lifecore, with haven't of roughly, through the I to Okay. looking your second quarter But Q for was at you then Q, third staying haven't quarter? corporate allocation, that when we're similar Lifecore the yet. seen found

Jim Hall

we've done Yes, segment overhead same, adjusted taken line back, is what the the have corporate be the that. we kept And really not line. it Smart Eat only the and now allocations the allocation or really thing to for or have other to used we've corporate Mitch, now overhead Lifecore under we've corporate allocated essentially

Mitch Pinheiro

switching to Okay, Curation.

that What's happening? have Taylor, services you still that contract of So still the with is status that?

Albert Bolles

in process winding that's the of now. for Yes, right down us Mitch,

it. it's for have But down say that well two still would pretty we the us next So winding here months. I in

Mitch Pinheiro

in sort at When you your and in or sort that operations look they all the there, ongoing? of the fees that or how, was of were costs for discontinued

Albert Bolles

Yes, to that? want John, you clarify

John Morberg

it, we way fees, offset the cost. G&A really the TSA handled just Yes, they

And So substantially spend. they're not is offset complete to really ongoing discontinued ops, Al said. they're it an just as our

We're a pleased And remaining, much this substantially just things TSA. there's now well. So that. than really went on really And is only few but we're really more it focused things other with pretty time. completed that

Mitch Pinheiro

was associated the -- happens When TSA, costs well? when sort will the down of it is go as TSA wound quickly they to away What here. being down are with winding the fees the

John Morberg

correct. doing said, been been as that That's integration the And ongoing. we've reverse is Al

we've have. happy itself. so quarters. them the had we with still essentially business but of continue, as the folks rolling will we'll see that of for associated we employees did again have will going we're let for buyer businesses quarters we're that coming that continue that also jobs go And because quarter, the couple of like to over we revenues. $XX.X to that we've right a that business size the of been And I we million the size the said, get And right Eat as remaining operate of were probably last a size of many sizing with to riff very right Smart and through And

Mitch Pinheiro

speak attractive you You for market obviously, that a very any asset the timing finding I asset? of here market value or volatility interest a Do ample talk in delays Yucatan. the here in is like that is there in you the you'd is asset? that any buyer and Okay. said. maybe volatility business find confident to think has because Is you Yucatan, very the think the do avocado the itself, that -- or maybe of delay? in it's Does you're you find Getting still affect causing significant the interest in

Albert Bolles

Mitch. Yes,

run so our I run our away price, volatility when fruit We talking buy lowest low we model, model operate in so at to and we you're When can. we typically, a fruit the late the So starts fruit the would we cost. put about then it's early think be cost, August fall. is its fruit plant as much as

yields this here quarter, good, on we've third very Our very we've inflation are with around we companies record most took pricing, the the we hit year, gotten had yields like in aggressive taking have however, been of accepted pricing QX, our X% price to is to going side. XX XX% stick in food in and it start in days retail takes XXX here increase, that to it. have roll to And customers

to on pleased side mention label. really we've doing starting private our the improve things got we'd to operational on also that exciting we're some that gone. efficiencies the we're with side, get And there. has like we're to traction So here how pricing the And HPP

April a just provider the first to we in private shipped In squeeze label. or fact, label private for time X, major

momentum on. a going have we lot So of positive

before this in actively exciting, business, bid technology. since require the as the private label position growing as business is to a we much were label it's HPP just go not the So year private on twice branded they

good for where growth asset. really we the about feel asset feel all that about aspects good really the So is, we

Mitch Pinheiro

where asset from parties, it, with interest do or third the an there that? in is I we And stand is mean,

Albert Bolles

able really million this we're project $XXX our Mitch for All us that I from Eat and year we're SWIFT, that's We're say we shareholder Curation really Foods Smart. working to continue left maximize to implement our generate can value, and is pleased. to Windset assets

continue on just to about we topic, Mitch. That's So can that work all say SWIFT. Project I

Mitch Pinheiro

consulting. just Okay. SG&A? to facility found and legal related that $XXX,XXX in Curations question, the of this then Is And Mexican last the costs charges

Albert Bolles

John, do answer that? to want you

John Morberg

Curation. not was corporate to allocated sorry. mute here. it's to Yes, No, the the Mitch, I on

Operator

from Vendetti is next question Our with Maxim Group. Anthony

Unidentified Analyst

is this my Vendetti. Anthony Thanks questions. for for Hi, Matt on taking

like lot Sounds success. a you've had of

$X.X you the resources P&L of the a terms ‘XX? metrics return to your can made there how provide we expansion you going of marketing Is investment sales in terms additional in the forward kind have fortify any you mentioned in should You pipeline investment have. fiscal guys million think you and of the in there? had And about and us

Albert Bolles

Jim was well, of sales more you we, year, myself, more our color of that I two impact pleased let this as to know, And have and that I'll John, us. some around that add of were and part with the in the for to strategy that think investment the having Yes, beginning customers And Jim, business. the is marketing we drive very invest landed year. part

Jim Hall

Al. thanks, Yes, Matt. Hey,

development to that bandwidth and was investment we marketing, well involve on So handle as the initial really, sales what expanding broaden development our was focused as our positions, identified capabilities. and and marketing focus, had our sales, key XX

in starting those We is pipeline. are to the added see activity more And key shape. within We've good we're positions. very what

they opportunities we we're we're example, more we've think just an two number about the a customers, as I So what the is of that potential worked in with are new added And customers that past. excited evaluating. our

on to advantage the tail as seeing more opportunities the and forward, And So of sense going more salesforce. the part development group's seeing development, the when things with But ones focus and we're line door. effort our to at most about, evaluated. what happy as of the we to standpoint, the in that to in and are track we're Lifecore be to amount a overall gains additional go we coming tail sales able work moving our of market are makes those profile. very be the we've Lifecore, We're CDMO -- resources revenue think from the to And year-over-year table I take adding targeted and a to and and market what FYXX in plan. where in we're talked get nice looking at

Operator

question Mike Our Petusky with Barrington from Research. is next

Michael Petusky

earlier. QX this million, and on I the for shifting? about be million the of thanks CapEx guys, million? Is million, that based for in Jim of missed the expectation the, $XX CapEx John, roughly we right about terms have said But guess should mean, Hey, for $XX in million thinking I $XX $XX $X I questions. terms of may what QX,

John Morberg

to to million up have it's million few capital actually, range in be closer would No, I going did, If overall, nothing $XX something. spending the lined $XX I Curation. We're XXX,XXX we right for now or there. think really for it not be

one what and put would us a for combined during for that overall, we Smart. everything to about spent XX, even Eat at the So year full back half the

So, but for for honest, $XX million focus Lifecore, think be the the to I was QX. $XX million

Michael Petusky

then guidance but you am any there, cash I QX from around ops And any guide? expect negative, and flow what assuming

John Morberg

formal cash $XXX Eat down Yes, any debt, generated year done I it don't mentioned of times $XX.X think But And several guidance. have I that Al this too. Smart. said, million. take from I million flow we what But for a from just $XX.X $XXX I that Windset, know million pay like million perspective, we've you out

debt. find so CapEx before I to the we think generating plus CapEx, us that of puts that with trying a judicial CapEx restructuring before cash pay interest like or EBITDA any for get cash free use EBITDA Our we're we're flow pay mid-teens that to for way of

end by year. certainly So a debt, we're kind that to still I but little of $XXX million be the the in going in of of higher debt think

from really can manage trying very doing Lifecore we're a we that making push thoughtful the the with or that. we perspective, king, timing at looking all that to the including do. be we're So is cash, and team, Cash anything aligning a around sure we're CapEx, things to off

Michael Petusky

sort generating agree of okay. but, sure with for asset would some the I'm Okay, call everybody thing, using as sales free kind metric of cash, not that in and entirely

John Morberg

just been not talk I'm trying trying to, the year, lot know, done cash did we about a to. things flow been continue the I'm and to really, that the sheet. think this focus to our you balance has delever certainly, I we've And as there in has

Michael Petusky

going I you store, to like have a low generally any flow sense to increase? going sense for I marked How again, on that see able Okay, all then for as is the get were Is I their does demand? how as you of that to how understand the get user the to get do you if I XX% mean -- essentially any of sort right. does grocery customer that be of sort mean I guess, Just trying the to digits? what's have it price X% customer? what end sense, double that X%? that to going like your customers far does that? by through on mean end increase that be to accept. Yucatan Al, or up

Albert Bolles

where It's X% is. And much our thereabouts. XX% that's pretty line competition between and in

the customers. with So diesel, that it's know. in as that work we'll started because everything passed since you well as pretty to mainly to evaluate increase a we surcharge there's directly that costs, But the for for cover inflationary from gets war customers of seeing. we're a also temporary we're issues And our been fuel us can XX% on

are we that kinds the through. working of things are those So

Michael Petusky

you you're sort about. facility think trying to think I'm to of of multiyear about XX what capabilities? it about Jim. projects making get the And one sort be sort doing through years think I what of couple, Or terms your the for projects? running in I next just just the there? you guidance. Jim, next And to is the guess reasonable what's -- of And when investment sense you of one of couple may you over think building that that how you it's formal out years? quick do think mean, or as over the to that over XX guys be are three hope sort facilities, two, not a reasonable Lifecore, of

Jim Hall

now while That's I marketing setting tell six to ago, overall characterize years the may Mike. more them we're year it's and new building without at up hard organization and project continuing we're is specific reason to get Right It far targeted sales And is numbers, the projects. to projects that whole thanks, to on to get we long more to that more the good question. hard targets in we more a pipeline. obviously, on we're approach of a wasn't had handle it's ago, to what's can ahead. fall putting Yes, But really, And than existing add, boarded. But and off have more more to goal five, increase. you less five what Lifecore get people every the too and XX.

make plus currently support we're but criteria, hope in goal have, to offering in the number that we built onboarding and up, how it's what to we can, say of go out closer overall we're to is that meet it, the projects. between sure then four XX importantly, organization or And niche they increase the so build there's and to pipeline to have much we that backfilling. sure our making our We the somewhere evaluating, continually I think will hard we more is six that are five, handle that the

Michael Petusky

customers? Do any go of to you there? existing deeper sort do projects? that? add about new rather footprint preference mean would have think sort with How there terms customers bias Is in of any of I you you the of

Jim Hall

reality you've are have that like get the me tech and development of right just those they But working there. to market, obviously, as long with and are of through bias, commercial our goals approved. And of that the set I get who in customer to that as a they customers. and actually continue is the customers to long handpick already our pick that transfer. there projects them pretty heard things value. as but pipeline, really top criteria could we we're the meet I discuss diversify the not projects, things being we less risk the in in listen, agnostic niche base one get drive more we're some And the to with a pick There's the customer if cycle offering, late that, would and we several is We reality utilize do part further have have is relationships of skill in on pipeline that expand to list, our

Michael Petusky

of million fiscal gets the next to in one, QX last that sort year, Okay, hit that of $X shifted. or spread QX, going Is be out? that is the likely to

Jim Hall

capital. capital We is definitely shift sense objectives, into Most but of will based doing continually haven't we're it what growth on doesn't capital. refine and part we're when the of of timeline needs but It's our capital, need reduction seeing. pull in evaluations in for balancing that we good and It's the a be next have of a said, an on chunk next But impact a to not year's year, as it just come for like provided but that'll will makes meeting the on next trigger I what FYXX guidance that on year. in yet, CapEx plan. our us capacity continually

Operator

to now have the remarks. of the Al over I'll the for Bolles And end question-and-answer turn session. We reached closing Dr. call

Albert Bolles

you Landec to again, in when quarter Corporation. And for we your Thank interest again forward fiscal you talking once look we release results. fourth to our

Operator

This conference. disconnect your lines Thank participation. your at you concludes And this for today's time. you may

Lifecore Biomedical (LFCR) 6 Apr 222022 Q3 Earnings call transcript