Landec Corporation Amends Credit Agreement, Appoints Brian McLaughlin Chief Financial Officer
March 25 2020 - 4:05PM
Landec Corporation (Nasdaq: LNDC) (“Company”), a diversified health
and wellness company with two operating businesses, Curation Foods,
Inc. and Lifecore Biomedical, Inc., today announced an amendment to
its credit facility and named Brian McLaughlin as its permanent
CFO.
Amendment to Credit AgreementOn March 19, 2020,
the Company entered into the Seventh Amendment to the Credit
Agreement which increased the leverage ratio covenant to 5.75 to
1.00 from 5.0 to 1.0 for the fiscal third quarter ended February
23, 2020. If the Company’s leverage ratio is in excess of 5.0
to 1.0 as measured under the terms of the credit agreement, the
Company will incur a 50 basis point increase in the underlying
interest rate and will incur an incremental 5 basis point increase
to the commitment fee, compared to the existing pricing terms. The
Company also agreed to minimum monthly EBITDA and maximum capital
expenditure covenants through May 31, 2020, as well as additional
reporting requirements. Following May 31, 2020, all other
covenants remain substantively unchanged compared to the existing
terms of the Credit Agreement. The Company incurred a
one-time loan amendment fee equal to 15 basis points of the total
borrowings under the credit facility and certain other
administrative and legal costs.
Dr. Albert Bolles, Landec’s President and CEO, stated, “We are
pleased with the consistent support that our lenders have shown
during this transitionary time, as we implement the components of
Project SWIFT. We have maintained a close dialogue with our
lenders and they have demonstrated their confidence in Curation
Foods and our turnaround plan. Their appreciation of the
positive financial improvements that are forthcoming in the second
half of fiscal 2020 underpins the favorable amendment, which
provided us flexibility during the third quarter while minimizing
cost.”
Permanent CFO Appointment of Brian
McLaughlinThe Company appointed Brian McLaughlin as Chief
Financial Officer, effective March 20, 2020 following his post as
interim CFO since January 2020. Mr. McLaughlin will continue
to lead Landec’s financial strategy as it executes the priorities
of its value creation program, Project SWIFT.
“Brian’s tenure at Curation Foods, coupled with his specialized
background in the fresh foods industry and 19 years of experience
in banking made him a natural choice to serve as Landec’s interim
CFO. Brian was instrumental in executing the amended credit
agreement and has already made great strides in positioning our
business for future growth. We look forward to his continued
leadership as our permanent CFO,” said Dr. Albert Bolles, Landec’s
President and CEO.
Project SWIFT and COVID-19 UpdateAdditionally,
as part of Project SWIFT, Landec previously disclosed the
divestiture of its yet-to-be-operational salad dressing plant in
Ontario, CA to consolidate its business assets. Project SWIFT is a
value creation program focused on optimizing operations, maximizing
strategic assets and redesigning the organization to the
appropriate size to compete and thrive. The Company expects to
incur a $10.6 million non-cash asset impairment restructuring
charge in its third quarter of fiscal 2020 related to write-offs
arising from the abandoned tenant improvements and other related
assets associated with the Ontario, CA plant.
Landec prioritizes the health and safety of its employees and
products. Despite the current COVID-19 pandemic, both
Curation Foods and Lifecore businesses currently remain
operational. Each business has implemented action plans that guide
the Company and its employees through this evolving
situation. The Company’s Curation Foods business is
experiencing a lift in demand in our retail and club channels as
consumers make preparations for the COVID-19 pandemic, and its
Lifecore business has remained largely unaffected to date.
Management will provide more complete detail surrounding COVID-19
and its influences on the Company, its employees, and its customers
during its upcoming fiscal third quarter earnings release on March
31, 2020.
About Landec CorporationLandec Corporation
(NASDAQ: LNDC) is a leading innovator of diversified health and
wellness solutions with two operating businesses: Curation Foods,
Inc. and Lifecore Biomedical, Inc. Landec designs, develops,
manufactures, and sells products for the food and biopharmaceutical
industry. Curation Foods is focused on innovating and distributing
plant-based foods with 100% clean ingredients to retail, club and
foodservice channels throughout North America. Curation Foods is
able to maximize product freshness through its geographically
dispersed family of growers, refrigerated supply chain and patented
BreatheWay® packaging technology. Curation Foods brands include Eat
Smart® fresh packaged vegetables and salads, O Olive Oil &
Vinegar® premium artisan products, and Yucatan® and Cabo Fresh®
avocado products. Lifecore Biomedical is a fully integrated
contract development and manufacturing organization (CDMO) that
offers highly differentiated capabilities in the development fill
and finish of sterile, injectable pharmaceutical products in
syringes and vials. As a leading manufacturer of premium,
injectable grade Hyaluronic Acid, Lifecore brings 35 years of
expertise as a partner for global and emerging biopharmaceutical
and biotechnology companies across multiple therapeutic categories
to bring their innovations to market. For more information about
the Company, visit Landec’s website at www.landec.com.
Important Cautions Regarding Forward-Looking
StatementsCertain statements in this communication are
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995, as amended, which involve
certain risks and uncertainties that could cause actual results to
differ materially, including such factors as, among others, the
timing and expenses associated with the Company’s operations; the
impact of the COVID-19 pandemic on us, our business, our customers,
or the economy generally; the anticipated success of the Company’s
pending strategic initiatives, including the timing of such
initiatives and the Company’s ability to recognize anticipated
annual savings on its anticipated timeline, or at all, the ability
of the Company to achieve acceptance of new products in the market
place, weather conditions that can affect the supply and price of
produce, government regulations affecting the Company’s business,
the timing of regulatory approvals necessary to operate the
Company’s business, the Company’s ability to successfully integrate
Yucatan Foods into the Curation Foods business, the mix between
domestic and international sales and any other statements about our
future expectations, plans, intentions, beliefs or prospects
expressed by management or the Company. For additional information
about factors that could cause actual results to differ materially
from those described in the forward-looking statements, please
refer to our filings with the Securities and Exchange Commission
(“SEC”), including the risk factors contained in our most recent
Quarterly Report on Form 10-Q and Annual Report on Form 10-K.
Forward-looking statements represent management’s current
expectations and are inherently uncertain. Except as required by
law, we do not undertake any obligation to update forward-looking
statements made by us to reflect subsequent events or
circumstances.
Contact Information: Investor
Relations:Jeff Sonnek(646) 277-1263jeff.sonnek@icrinc.com
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