Landec Corporation Amends Credit Agreement
July 16 2020 - 4:05PM
Landec Corporation (Nasdaq: LNDC) (the “Company”), a diversified
health and wellness company with two operating businesses, Curation
Foods, Inc. and Lifecore Biomedical, Inc., today announced its
entry into an amendment to its credit agreement with its syndicate
of lenders on July 15, 2020.
Brian McLaughlin, the Company’s Chief Financial Officer, stated,
“We believe we made significant progress in fiscal 2020 to enhance
the Company’s future cash flow to support the growth objectives of
both our businesses. We are in the midst of a process to strengthen
our balance sheet through monetizing certain assets, optimizing our
cost structure and implementing a rigid capital expenditure budget.
As we are able to monetize these assets, we intend to use the
proceeds to pay down debt from current levels. Our lenders
recognize and support the milestones and progress we’ve reached in
turning around Curation Foods, and in agreeing to this amendment,
have added enhanced flexibility with respect to our future leverage
ratios under our credit agreement, which we believe will help
facilitate our strategic objectives. Lifecore continues to
generate sustainable profitable growth and we are confident that
Curation Foods has established a foundation that we can build
from. We look forward to demonstrating improved performance
in the quarters ahead, enabling us to maximize shareholder value
across our business portfolio.”
The amendment provides a limited default waiver with respect to
the Company’s noncompliance under its credit agreement through the
most recent fiscal period. The amendment also increases the
Company’s permitted exclusions for certain unusual, extraordinary
or one-time cash items for purposes of calculating EBITDA for the
fiscal quarter ending February 28, 2021 and thereafter (other than
for purposes of calculating the applicable interest rate) from 10%
to 20% of EBITDA. In addition, the amendment includes certain
restrictions on the Company’s aggregate capital expenditures
through May 31, 2021, and the Company will incur a 50 basis point
increase in the applicable interest rates thereunder, which
represents an anticipated aggregate increase of approximately $1
million in interest costs to the Company during fiscal 2021,
assuming approximately $191 million in borrowings outstanding for
the entire period, as compared to the interest rate prior to the
amendment. In connection with the amendment, the Company incurred
one-time loan amendment fees and expenses equal to
approximately $0.3 million in aggregate.
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 negotiate future amendments to its existing
Credit Agreement successfully, 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, 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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