MENLO PARK, Calif., July 28, 2015 (GLOBE NEWSWIRE) -- Landec Corporation (NASDAQ:LNDC), a leading developer and marketer of innovative and proprietary products for healthy living applications in the food and biomedical markets, reported results for the fiscal 2015 fourth quarter and fiscal year ended May 31, 2015.
"During the fourth quarter, revenues grew 11% and operating income grew 17% compared to the last year's fourth quarter. For all of fiscal 2015, revenues grew 13% to $539.3 million, exceeding $500 million for the first time in Landec's history," said Gary Steele, Landec's Chairman and CEO. "This growth was driven primarily by an 88% growth in our Apio salad kit sales. Apio Inc., our food business, is the market share leader throughout North America in branded, fresh-cut packaged vegetables with our Eat Smart® and GreenLine® brands. The gross margin in Apio's value-added business increased by 60 basis points during fiscal 2015. Our goal for the foreseeable future is to continue to increase Apio's margins even if that means sacrificing some revenue growth.
"We announced earlier today that I will be retiring as Landec CEO effective as of our shareholder meeting on October 15, 2015," continued Steele. "The Board of Directors and I are very excited about Molly Hemmeter becoming Landec's new CEO upon my retirement. Molly was hired in 2009 as Landec's VP of Business Development, subsequently served as Landec's Chief Commercial Officer and most recently Landec's Chief Operating Officer. Molly has the technical, marketing and financial skills, along with experience in the food and medical industries to successfully advance Landec's future growth plans. Molly has led many of the growth initiatives that have delivered the positive business results we are experiencing today. The election of Molly as CEO ensures uninterrupted knowledge of Landec's businesses and uninterrupted progress driven by proven management vision and execution. As a continuing member of the Board of Directors, I am committed to making this a smooth transition.
"During fiscal 2015, we benefitted from Apio's strong operational results generating revenue growth of 16%, gross profit growth of 21% and operating income growth of 25%. Lifecore's operational results were consistent with expectations for fiscal 2015, with revenues down 12% and operating income down 50% due to the previously disclosed lower purchases related to a one-time inventory adjustment by a key Lifecore customer.
"Our investment in Windset continues to increase each year with a present value of $61.5 million at the end of fiscal 2015. The increase in the fair market value of Windset for fiscal 2015 was expected to be lower than the $10.0 million increase in fiscal 2014 due to Windset's planned pause in additional expansion during fiscal 2015 as previously disclosed. In addition, our Windset investment was further impacted by unexpected permitting issues in California associated with Windset's new facility expansion and new crop production originally planned to begin in October 2015 which is now expected to be delayed approximately twelve months. As a result, the increase in the fair market value of our Windset investment recognized in the fourth quarter was $400,000 instead of approximately $2.4 to $2.6 million that had been expected. The difference negatively impacted net income by $0.05 per share in the fourth quarter. For all of 2015, the increase in our Windset investment was approximately $0.07 per share lower than we had originally projected.
"As a result, diluted earnings per share decreased to $0.15 and $0.50, respectively, during the fourth quarter and for all of fiscal 2015 compared to $0.17 and $0.71 per share, respectively, for the same periods last year," stated Steele.
Fiscal Fourth Quarter 2015 Results
"We experienced continued growth in our fourth quarter and fiscal 2015," said Gary Steele, Landec's Chairman and CEO. "During the fourth quarter, revenues increased 11%, gross profit 16% and operating income 17% compared to the fourth quarter last year. The growth was driven primarily from a 53% increase in sales of Eat Smart salad kit products at Apio."
The 11% growth in revenues to $134.4 million was primarily due to a 15% or $15.1 million increase in revenues in Apio's value-added business and a 29% or $2.3 million increase in revenues for Lifecore. These increases were partially offset by a 26% or $3.8 million decrease in revenues in Apio's export business during the quarter compared to the fourth quarter of last year.
The 15% increase in revenues from Apio's value-added business resulted from a 12% increase in volume sales and a favorable product mix with increased sales of higher priced salad kit products. The 29% increase in revenues for Lifecore was due to higher demand for products from existing customers. The 26% decrease in revenues for Apio's export business was due primarily to lower volume sales as a result of the West Coast longshoreman labor dispute in 2015.
Operating income increased 17% to $6.2 million compared to last year's fourth quarter primarily due to operating income at Lifecore increasing nearly fourfold partially offset by a 6% decrease in operating income at Apio due to increased SG&A expenses to support our new line of salad kit products, including additional headcount.
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