FALSE000100528600010052862025-01-022025-01-02

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 2, 2025
LIFECORE BIOMEDICAL, INC.
(Exact name of registrant as specified in its charter)
Delaware
000-2744694-3025618
(State or other jurisdiction of incorporation)
(Commission file number)(IRS Employer Identification No.)
   3515 Lyman Boulevard
 Chaska,
Minnesota
55318
(Address of principal executive offices)(Zip Code)
(952) 368-4300
(Registrant’s telephone number, including area code)
 Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common StockLFCRThe NASDAQ Global Select Market
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐


Item 2.02    Results of Operations and Financial Condition.
On January 2, 2025, Lifecore Biomedical, Inc. (the “Company”) issued a press release announcing its consolidated financial results for the fiscal quarter ended November 24, 2024. The press release is furnished herewith as Exhibit 99.1.
The information in this Item 2.02 of this Current Report, including Exhibit 99.1, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that Section. The information in this Item 2.02 of this Current Report, including Exhibit 99.1, shall not be incorporated by reference in any filing under the Securities Act of 1933, as amended or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 7.01    Regulation FD
On January 2, 2025, the Company made available on its website certain investor presentation materials (the “Investor Presentation”). A copy of the Investor Presentation is furnished as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated by reference in this Item 7.01.
The information furnished in this Item 7.01 of this Current Report on Form 8-K (including Exhibit 99.2 attached hereto) shall not be deemed “filed” for purposes of Section 18 of the Exchange Act and shall not be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.
Item 9.01    Financial Statements and Exhibits.
(d) Exhibits
Exhibit No.Description
104
Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document.



SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: January 2, 2025
LIFECORE BIOMEDICAL, INC.
By:/s/ Ryan D. Lake
Ryan D. Lake
Chief Financial Officer

Exhibit 99.1

Lifecore Biomedical Reports Second Quarter Fiscal 2025 Financial Results and Provides Corporate Update

-- Recorded Revenues of $32.6 Million for Q2 Fiscal 2025 --

-- Signed Multiple Development Agreements with New Customers --

-- Strengthened Balance Sheet with Financing Raising Approximately $24.3 Million, and Favorable Restructuring of Credit Facility with BMO --

Conference Call Today at 4:30pm ET

CHASKA, Minn., January 2, 2025 (GLOBE NEWSWIRE) -- Lifecore Biomedical, Inc. (NASDAQ: LFCR) (“Lifecore”), a fully integrated contract development and manufacturing organization (“CDMO”), today announced its financial results for the second quarter of fiscal 2025.

Highlights from Second Quarter of Fiscal 2025:

“The second quarter was a very productive time at Lifecore. Our achievements during the period spanned finance, operations and business development, all of which supported our overall growth strategy. Revenues in the period were strong and in line with our fiscal year guidance. Gross margins improved during the period as compared to our first quarter margins, reflecting greater leverage of our overhead costs across increased revenues and favorable sales mix. Our business development team was successful in signing multiple new projects. And importantly, our balance sheet was materially strengthened during the period with the combination of the successful completion of our previously announced equity financing, and the restructuring of our revolving credit facility with BMO on significantly improved terms to Lifecore,” stated Paul Josephs, president and chief executive officer of Lifecore.

Second Quarter Developments

New Business

•The company signed two new project agreements during the second quarter with new customers, adding to its early stage development pipeline. This included Nirsum Laboratories selecting Lifecore to provide CDMO services focused on supporting Nirsum’s clinical development of its lead development candidate, NRS-033.

Capabilities and Capacity

•During the quarter, the company successfully completed the installation and qualification of its high-speed, multi-purpose 5-head isolator filler, which is now GMP-ready. With the addition of the 5-head isolator filler, which is designed for fill/finish activities for vials, cartridges, and pre-filled syringes, the company has more than doubled its capacity, creating maximum revenue-generating potential of up to $300 million annually, based on historical fiscal year 2024 revenues, projected development pipeline, and new business pricing, volume and other assumptions.

Financial and Corporate

•In September, Lifecore announced that the company received written notice from the Nasdaq Listing Qualifications Department stating that it had regained compliance with the filing and annual meeting requirements in the Nasdaq Listing Rules, and Nasdaq had ceased any action to delist the company’s common stock.

•In October, the company announced the successful closing of a $24.3 million private placement of 5,928,775 shares of its common stock with new and existing shareholders.

•In November, the company announced the successful amendment and extension of its revolving credit facility with its existing lender, BMO. The terms of the amendment provide for, among other things, a three-year extension, as well as a reduction in interest rates that the company believes has further strengthened its balance sheet and overall financial position.

•During the second quarter, the company executed multiple key leadership changes, appointing exceptional talent across the organization to execute its ambitious growth strategy. Appointments included Ryan Lake as chief financial officer, Brikkelle Thompson as senior vice president of human resources, Thomas Guldager as vice president, operations, and Jackie Klecker as executive vice president, quality and development services.


Consolidated Second Quarter Fiscal 2025 Financial Results

Revenues for the three months ended November 24, 2024, were $32.6 million, an increase of 8% compared to $30.2 million for the comparable prior year period. The increase in revenues was primarily due to a $1.9 million increase in CDMO revenues, which increase comprised $3.8 million of higher sales volume from the company’s largest customer, partially offset by $1.9 million of lower sales volume from other CDMO customers. In addition, hyaluronic acid (“HA”) manufacturing revenues increased $0.5 million primarily from increased revenue from a customer due to timing, with increased shipments in the second quarter of 2025.

Gross profit for the three months ended November 24, 2024, was $11.1 million, compared to $10.0 million for the same period last year. The $1.1 million increase in gross profit is primarily due to a $1.6 million increase in CDMO gross profit as a result of price increases to certain customers partially offset by a $0.5 million decrease in HA manufacturing gross profit due to manufacturing variances.

Selling, general and administrative expenses for the three months ended November 24, 2024, were $11.1 million, compared to $9.3 million for the same period last year. The increase was primarily due to increases in non-cash stock-based compensation expense of $1.8 million, the majority of which was related to new hire performance stock unit grants to principal executive officers.

Interest expense was $5.5 million for the three months ended November 24, 2024, an increase compared to $4.1 million for the same period last year. The increase was primarily a result of $1.0 million of increased interest expense related to the Alcon term loan debt, primarily related to amortization of the debt discount. There was also a reduction in capitalized interest of $0.3 million due to decreased fixed asset construction activities.

For the three months ended November 24, 2024, the company recorded net loss of $6.6 million and $0.25 of loss per diluted share, as compared to net income of $14.2 million and $0.39 of income per diluted share, for the same period last year, which included an unusually large favorable $20.7 million non-cash fair market value adjustment to its debt derivative liability associated with its term loan credit facility. Adjusted EBITDA* for the three months ended November 24, 2024, was $6.5 million, an increase of $1.1 million compared to $5.4 million in the prior year period. The increase in Adjusted EBITDA was primarily due to the increase in gross profit.

Consolidated First Six Months Fiscal 2025 Financial Results

Revenues for the six months ended November 24, 2024, were $57.3 million, an increase of 5% compared to $54.7 million for the comparable prior year period. The increase in revenues was due to a $2.0 million increase in HA manufacturing revenues primarily due to higher sales volume from the company’s largest customer and a $0.6 million increase in CDMO revenues, which increase comprised $3.3 million of higher sales volume from that customer, partially offset by a customer working down inventory levels built in the prior year period of $2.6 million.

Gross profit for the six months ended November 24, 2024, was $16.5 million, compared to $12.7 million for the same period last year. The $3.8 million improvement in gross profit is due to a $5.1 million increase in CDMO gross profit which reflected a $3.2 million increase due to price increases to certain customers and a $1.9 million increase due to a favorable sales mix, partially offset by a $1.0 million write-down on existing inventories to their net realizable value and a $0.3 million decrease in HA manufacturing gross profit due to manufacturing variances.

Selling, general and administrative expenses for the six months ended November 24, 2024, were $25.9 million, compared to $18.5 million for the same period last year. The increase was primarily due to a $4.4 million increase in professional fees, including legal fees related to the civil litigation related to Yucatan Foods and the stockholder activist settlement. Additionally, non-cash stock-based compensation expense increased by $2.7 million, the majority of which was related to performance stock unit grants to principal executive officers.

Interest expense was $10.8 million for the six months ended November 24, 2024, an increase compared to $8.0 million for the same period last year. The increase was primarily a result of $1.9 million of increased interest expense related to the Alcon term loan debt, primarily related to amortization of the debt discount. There was also a reduction in capitalized interest of $0.6 million due to decreased fixed asset construction activities.

For the six months ended November 24, 2024, the company recorded net loss of $22.8 million and $0.76 of loss per diluted share, as compared to net income of $3.5 million and $0.10 of income per diluted share, for the same period last year, which included an unusually large favorable $20.9 million non-cash fair market value adjustment to its debt derivative liability associated with its term loan credit facility. Adjusted EBITDA* for the six months ended November 24, 2024, was $4.7 million, a $1.3 million increase from $3.4 million in the prior year period. The increase in Adjusted EBITDA was primarily due to the increase in gross profit, partially offset by increased legal and audit costs.



*Adjusted EBITDA is a non-GAAP financial measure (see reconciliation of non-GAAP financial measures in this release).

Earnings Webcast

Lifecore Biomedical will host a conference call today, January 2, 2025, at 4:30 p.m. ET to discuss the company’s second quarter fiscal 2025 financial results. The webcast can be accessed via Lifecore’s Investor Events & Presentations page at: https://ir.lifecore.com/events-presentations. An archived version of the webcast will be available on the website for 30 days.

About Lifecore Biomedical

Lifecore Biomedical, Inc. 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, vials and cartridges, including complex formulations. As a leading manufacturer of premium, injectable-grade hyaluronic acid, Lifecore brings more than 40 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 Lifecore’s website at www.lifecore.com.

Non-GAAP Financial Information

This press release contains non-GAAP financial information, including Adjusted EBITDA. The company has included a reconciliation of Adjusted EBITDA to Net (loss) income, the most directly comparable financial measure calculated in accordance with GAAP. See the section entitled “Non-GAAP Reconciliations” in this release for the company’s definition of Adjusted EBITDA and a reconciliation thereof to Net (loss) income.

The company has disclosed these non-GAAP financial measures to supplement its consolidated financial statements presented in accordance with GAAP. These non-GAAP financial measures exclude/include certain items that are included in the company’s results reported in accordance with GAAP. Management believes these non-GAAP financial measures provide useful additional information to investors about trends in the company’s operations and are useful for period-over-period comparisons. These non-GAAP financial measures should not be considered in isolation or as a substitute for the comparable GAAP measures. In addition, these non-GAAP financial measures may not be the same as similar measures provided by other companies due to the potential differences in methods of calculation and items being excluded/included. These non-GAAP financial measures should be read in conjunction with the company’s consolidated financial statements presented in accordance with GAAP.

Important Cautions Regarding Forward-Looking Statements

This press release contains forward-looking statements regarding future events and our future results that are subject to the safe harbor created under the Private Securities Litigation Reform Act of 1995 and other safe harbors under the Securities Act of 1933 and the Securities Exchange Act of 1934. Words such as “anticipate”, “estimate”, “expect”, “project”, “plan”, “intend”, “believe”, “may”, “might”, “will”, “should”, “can have”, “likely” and similar expressions are used to identify forward-looking statements. In addition, all statements regarding our current operating and financial expectations in light of historical results, anticipated capacity and utilization, anticipated liquidity, and anticipated future customer relationships usage are forward-looking statements. All forward-looking statements involve certain risks and uncertainties that could cause actual results to differ materially, including such factors among others, as the company’s ability to successfully enact its business strategies, including with respect to installation, capacity generation and its ability to attract demand for its services, its ability expand its relationship with its existing customers or attract new customers, the impact of inflation on the company’s business and financial condition, indications of a change in the market cycles in the CDMO market; changes in business conditions and general economic conditions both domestically and globally including rising interest rates and fluctuation in foreign currency exchange rates, access to capital; and other risk factors set forth from time to time in the company’s SEC filings, including, but not limited to, the Annual Report on Form 10-K for the year ended May 26, 2024 (the “2024 10-K”). 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 the 2024 10-K. Forward-looking statements represent management’s current expectations as of the date hereof 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.




Lifecore Biomedical, Inc. Contact Information:

Stephanie Diaz (Investors)
Vida Strategic Partners
415-675-7401
sdiaz@vidasp.com

Tim Brons (Media)
Vida Strategic Partners
415-675-7402
tbrons@vidasp.com

Ryan D. Lake (CFO)
Lifecore Biomedical
952-368-6244
ryan.lake@lifecore.com


LIFECORE BIOMEDICAL, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(In thousands, except share and par values)

November 24, 2024May 26, 2024
(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents$9,455 $8,462 
Accounts receivable, less allowance for credit losses20,177 20,343 
Accounts receivable, related party10,126 10,810 
Inventories, net39,214 39,979 
Prepaid expenses and other current assets2,886 1,439 
Total Current Assets81,858 81,033 
Property, plant, and equipment, net150,576 149,165 
Operating lease right-of-use assets2,304 2,442 
Goodwill13,881 13,881 
Intangible assets, net4,200 4,200 
Other long-term assets2,567 3,239 
Total Assets$255,386 $253,960 
LIABILITIES, CONVERTIBLE PREFERRED STOCK, AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable$14,967 $16,334 
Accrued compensation
4,631 6,165 
Other accrued liabilities9,866 9,354 
Current portion of lease liabilities4,116 4,133 
Deferred revenues426 1,088 
Deferred revenues, related party511 1,025 
Current portion of long-term debt, related party773 773 
Total Current Liabilities35,290 38,872 
Long-term debt, less current portion, net, related party110,528 100,819 
Revolving credit facility8,500 19,691 
Debt derivative liability, related party23,300 25,400 
Long-term lease liabilities, less current portion7,423 4,944 
Deferred taxes, net552 543 
Deferred revenues, less current portion, related party4,880 4,703 
Other non-current liabilities5,153 5,086 
Total Liabilities195,626 200,058 
Convertible Preferred Stock, $0.001 par value; 2,000,000 shares authorized; 44,068 and 42,461 shares issued and outstanding, redemption value $44,619 and $42,99144,311 42,587 
Stockholders’ Equity:
Common Stock, $0.001 par value; 75,000,000 and 50,000,000 shares authorized; 36,980,790 and 30,562,961 shares issued and outstanding37 30 
Additional paid-in capital206,868 177,808 
Accumulated deficit(191,456)(166,523)
Total Stockholders’ Equity15,449 11,315 
Total Liabilities, Convertible Preferred Stock, and Stockholders’ Equity$255,386 $253,960 


LIFECORE BIOMEDICAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited) (In thousands, except share and per share values)

Three Months EndedSix Months Ended
November 24, 2024November 26, 2023November 24, 2024November 26, 2023
Revenues$19,534 $20,522 $36,327 $37,475 
Revenues, related party13,030 9,628 20,942 17,197 
Total Revenues32,564 30,150 57,269 54,672
Cost of goods sold21,480 20,193 40,798 41,987 
Gross profit11,084 9,957 16,471 12,685 
Operating costs and expenses:
Research and development1,924 2,098 4,110 4,244 
Selling, general, and administrative11,119 9,342 25,904 18,538 
Total operating costs and expenses13,043 11,440 30,014 22,782 
Operating loss(1,959)(1,483)(13,543)(10,097)
Interest expense, net(842)(832)(1,810)(1,625)
Interest expense, related party
(4,623)(3,241)(9,023)(6,385)
Change in fair value of debt derivative liability, related party1,200 20,700 2,100 20,900 
Other expense, net(304)(967)(507)(1,138)
(Loss) income from continuing operations before income taxes(6,528)14,177 (22,783)1,655 
Income tax (expense) benefit(43)65 (18)(23)
(Loss) income from continuing operations(6,571)14,242 (22,801)1,632 
(Loss) income from discontinued operations— (24)— 1,832 
Net (loss) income(6,571)14,218 (22,801)3,464 
Fair value of conversion ratio improvement to preferred stockholders(2,132)— (2,132)— 
(Loss) income available to common stockholders$(8,703)$14,218 $(24,933)$3,464 
Basic income or loss per share:
(Loss) income from continuing operations available to common stockholders$(0.25)$0.47 $(0.76)$0.05 
Income from discontinued operations— — — 0.06 
Basic (loss) income per share$(0.25)$0.47 $(0.76)$0.11 
Diluted income or loss per share:
(Loss) income from continuing operations available to common stockholders$(0.25)$0.39 $(0.76)$0.05 
Income from discontinued operations— — — 0.05 
Diluted (loss) income per share$(0.25)$0.39 $(0.76)$0.10 
Shares used in income or loss per share computations:
Basic34,360,657 30,458,032 32,609,808 30,430,712 
Diluted34,360,657 36,419,103 32,609,808 36,397,352 





Non-GAAP Financial Reconciliations
Adjusted EBITDA is a non-GAAP financial measure. We define Adjusted EBITDA as net income or loss before (i) interest expense, net of interest income, (ii) income tax expense (benefit), (iii) depreciation and amortization, (iv) stock-based compensation, (v) change in fair value of debt derivatives, (vi) financing fees (non-interest), (vii) reorganization costs, (viii) restructuring costs, (ix) franchise tax equivalent to income tax, (x) contract cancellation costs, (xi) loss (income) from discontinued operations (xii) stockholder activist settlement costs, and (xiii) start-up costs, as well as any items that may arise from time to time that, in management’s judgment, significantly affect the assessment of earnings results between periods. See “Non-GAAP Financial Information” above for further information regarding the Company’s use of non-GAAP financial measures.

Three Months EndedSix Months Ended
(in thousands)November 24, 2024November 26, 2023November 24, 2024November 26, 2023
Net (loss) income (GAAP)$(6,571)$14,218 $(22,801)$3,464 
Interest expense, net5,4654,07310,8338,010
Income tax expense (benefit) 43(65)1823
Depreciation and amortization2,0441,9874,0373,934
Stock-based compensation3,3721,5775,7913,110
Change in fair value of debt derivatives(1,200)(20,700)(2,100)(20,900)
Financing fees (non-interest)3681,1086431,361
Reorganization costs (a)2,4632,1626,0554,899
Restructuring costs (a)404157887147
Franchise tax equivalent to income tax5094100176
Contract cancellation costs—297—297
Loss (income) from discontinued operations—24—(1,832)
Stockholder activist settlement (a)781,260—
Start-up costs—487—726
Adjusted EBITDA$6,516 $5,419 $4,723 $3,415 

(a)Restructuring, reorganization and stockholder activist settlement costs of $2.9 million and $8.2 million were incurred for the three and six months ended November 24, 2024, respectively. Restructuring, reorganization and stockholder activist settlement costs of $2.3 million and $5.0 million were incurred for the three and six months ended November 26, 2023, respectively. These costs primarily related to elevated accounting fees associated with the fiscal 2024 audit, legal expenses, consulting fees and severance costs from the restructuring reductions in force and former CEO in fiscal year 2024 and former CFO departure in fiscal year 2025.



2025 Guidance Compared to Fiscal Year 2024 Results
(in thousands)Fiscal Year EndingFiscal Year Ended
May 25, 2025May 26, 2024
(estimate)
Net (loss) income (GAAP) (a)$(28,600)—$(26,600)$12,013
Interest expense, net22,00018,090
Income tax expense (benefit)—183
Depreciation and amortization8,3007,954
Stock-based compensation10,9006,201
Change in fair value of debt derivatives(4,900)(39,500)
Financing fees (non-interest)7003,513
Reorganization costs (b)7,6009,796
Restructuring costs (b)1,4001,656
Franchise tax equivalent to income tax300272
Contract cancellation costs—567
Loss (income) from discontinued operations—(2,682)
Stockholder activist settlement (b)1,300459
Start-up costs—1,684
Adjusted EBITDA$19,000 —$21,000 $20,206

(a)We previously estimated net loss to be $25.9 million to $23.9 million, which we now estimate will be $28.6 million to $26.6 million. The increase is due to higher stock-based compensation, interest expense, former CFO severance, and elevated legal expenses related to the civil litigation.
(b)We previously estimated restructuring, reorganization, stockholder activist settlement costs to be $9.9 million, which we now estimate will be approximately $10.3 million of which $8.2 million was incurred in the six months ended November 24, 2024. The overage is due to former CFO severance and elevated legal expenses related to the civil litigation.

January 2025

 
2 Important Information Regarding Forward-Looking Statements This presentation includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements, among other things, relate to the Company’s growth drivers and expected levels of our organic growth; the impact of our investment in development and commercial initiatives; financial guidance, including timing of revenues and EBITDA; our ability to manage costs and to achieve our financial goals; our ability to operate under lending covenants; our ability to maintain sufficient liquidity to operate the business; our ability to pay our debt under our credit agreement and to maintain relationships with CDMO commercial partners and develop additional commercial and development partnerships. The words "anticipate", "believe", "could", “goal, “objective”, "estimate", “upcoming”, "expect", "intend", "may",“might”, "plan", "predict", "project", "will“. “should”, “can have”, likely and similar terms and phrases may be used to identify forward-looking statements in this presentation. The forward-looking statements in this presentation are only predictions. Our operations involve risks and uncertainties, many of which are outside our control, and any one of which, or a combination of which, could materially affect our results of operations and whether the forward-looking statements ultimately prove to be correct. Factors that could cause the company’s actual outcomes to differ materially from those expressed in or underlying these forward-looking statements include, but are not limited to, unstable market and macroeconomic conditions, including any adverse impact on the customer ordering patterns or inventory rebalancing or disruption in raw materials or supply chain; demand for the company’s services, which depends in part on customers’ research and development funding, their clinical plans and the market success of their products; customers' changing inventory requirements and manufacturing plans; customers and prospective customers decisions to move forward with the company’s manufacturing services; the average profitability, or mix, of the products the company manufactures; the company’s ability to enhance existing or introduce new services in a timely manner; fluctuations in the costs, availability, and suitability of the components of the products the company manufactures, including active pharmaceutical ingredients, excipients, purchased components and raw materials, or the company’s customers facing increasing or new competition; the Company's ability to successfully enact its business strategies, including with respect to installation, capacity generation and its ability to attract demand for its services; the Company's ability to remain current with its reports with the Securities and Exchange Commission (the “SEC”); the Company’s ability to collect on customers’ receivable balances; the extent to which health epidemics and other outbreaks of communicable diseases could disrupt our operations; and other risks and uncertainties discussed in our filings with the Securities and Exchange Commission at www.sec.gov. These forward-looking statements are based on information currently available to us, and we assume no obligation to update any forward-looking statements except as required by applicable law. Any historical or projected financial information contained in this presentation are not intended to be indicative of future financial results. The events and circumstances reflected in these forward- looking statements, may not be achieved or occur, and actual results could differ materially from those projected in the forward-looking statements. Undue reliance should not be placed on the forward-looking statements. Moreover, we operate in a dynamic industry and economy. New risk factors could emerge from time to time, and it is not possible for our management to predict all uncertainties that the Company may face.

 
3 Non-GAAP Financial Measures This presentation contains non-GAAP financial information including Adjusted EBITDA. The Company has included a reconciliation of Adjusted EBITDA to Net (loss) income, the most directly comparable financial measure calculated in accordance with GAAP. We define Adjusted EBITDA Net (loss) income as determined under GAAP excluding (i) interest expense, net of interest income, (ii) income tax expense (benefit), (iii) depreciation and amortization, (iv) stock-based compensation, (v) change in fair value derivatives, (vi) financing fees (non-interest), (vii) reorganization costs, (viii) restructuring costs, (ix) franchise tax equivalent to income tax, (x) contract cancellation costs, (xi) loss (income) from discontinued operations, (xii) stockholder activist settlement costs, and (xiii) start-up costs. The Company has disclosed these non-GAAP financial measures to supplement its consolidated financial statements presented in accordance with GAAP. These non-GAAP financial measures exclude/include certain items that are included in the Company’s results reported in accordance with GAAP. Management believes these non-GAAP financial measures provide useful additional information to investors about trends in the Company’s operations and are useful for period-over-period comparisons. These non-GAAP financial measures should not be considered in isolation or as a substitute for the comparable GAAP measures. In addition, these non-GAAP financial measures may not be the same as similar measures provided by other companies due to the potential differences in methods of calculation and items being excluded/included. These non-GAAP financial measures should be read in conjunction with the Company’s consolidated financial statements presented in accordance with GAAP.

 
4 Key Takeaways CDMO Industry Leader with Broad Capabilities in Injectables Aggressive Growth Strategy Targeting 12%+ Revenue CAGR and Adj. EBITDA margins of 25%+ in Mid-Term High-Growth Market Expected to Increase by 100% by 2030 High-Value Pipeline Including Multiple Programs Expected to Commercialize in Mid-Term Expanded Capacity & Revenue Potential of ~$300M Annually* Experienced Leadership & Exceptional Track Record of Success * The information provided may not be achieved and there is continued uncertainty relating to any guidance contained herein. There can be no assurance that such results will occur or that such results will be materially different from actual results. The estimate was based on historical fiscal year 2024 revenues, projected development pipeline, and new business pricing, volume and other assumptions.

 
5 Our Journey: Transformation to Standalone CDMO Low-Margin Commodity Agricultural Businesses THEN:

 
6 Our Journey: Transformation to Standalone CDMO NOW: Best-in-class technical capabilities Strengthened financial position Doubled revenue-generating capacity Leadership transition complete Nasdaq / regulatory compliance Enhanced business development resources & strategy

 
7 Lifecore at a Glance 450 Employees Inclusive, Performance- Driven Culture Fully integrated CDMO offering development and fill/finish of sterile injectable pharmaceuticals Projected Revenues* (FY2025E) $126.5M - $130M Projected Adj. EBITDA* (FY2025E) $19M - $21M Leader in Sodium Hyaluronate (HA) Global Regulatory Capabilities Founded in 1965 Corporate Headquarters * See disclaimers on slides 2 & 3, and non-GAAP reconciliations on slide 26 Approx.

 
8 Campus Overview Site 1 – HQ (Lyman Blvd.) 150,000 sqft Site 2 (Lakeview Drive) 78,000 sqft Site 3 (Shelby Court) 20,000 sqft Manufacturing Operations • Sodium hyaluronate manufacturing (fermentation) • Drug and medical device formulation and filling • Secondary packaging • Microbiology and analytical quality control laboratories • Warehousing: 6,400 sqft CRT; 1,500 sqft cooler • Distribution Contract Development • Pilot laboratory Manufacturing Operations • Final packaging • Warehousing: 16,400 sqft CRT; 4,000 sqft cooler • Distribution • Quality control laboratory • Particulate lab Contract Development • Analytical development laboratory Manufacturing Operations • Receipt, inspection, & warehousing of raw materials and components • 10,000 ft2 CRT; 1,795 sqft cooler 248,000sqft ~450State-of-the-art facilities, within 2 square miles Employees

 
9 We Serve Large and Growing Markets with Strong Tailwinds Global Injectable CDMO $10B Market1 +10% CAGR Biosecure Act Hyaluronic Acid $9.8B Market2 +7% CAGR Global CDMO $120B Market1 +8% CAGR 50%+ of annual US drug approvals are injectables4 GLP-1 $47B Market3 Expected to Increase 10X 1. Jefferies September 2024 PBOA - 8th Annual Meeting Uncovering Life Sciences Investment Trends /J. Miller October 2024 – Outsourcing Includes drug product (finished dose form), drug substance (active pharmaceutical ingredients (API) 2. Global Market Insights March 2024 – Hyaluronic Acid Market Size & Share – Trends Reports, 2024-2032 3. Markets and Markets July 2024- GLP-1 Analogues Market Size, Share & Trends 2032 4. William Blair Equity Research August 2024 – Percent of FDA Approvals for 2023 and YTD as of July 31, 2024

 
Executing Three-Pronged Growth Strategy Maximizing Existing Customer Business Advancing Programs Towards Commercialization Driving New Business 10

 
11 FOCUSED ON MAXIMIZING UTILIZATION OF AVAILABLE CAPACITY Mid-Term and Long-Term Revenue Outlook $126.5-$130M $178M-$205M $300M1 Expansion of existing commercial contracts Portfolio Commercialization New Business Revenue growth driven by maximization of existing customer base, portfolio commercialization, and new business 20M Units 45M Units 45M Units 45M Units 50% 20% ~40% ~100% Available Capacity Capacity Utilization FY 2024 FY 2025 Addition of new 5-Head Isolator Filler For illustrative purposes only, timing, estimates, assumptions and the actual growth of revenue and capacity utilization may vary significantly, and we may not be able to achieve our anticipated financial goals. The information provided is illustrative only; the growth cycle may not be achieved and there is continued uncertainty relating to any guidance contained herein. There can be no assurance that such results will occur or that such results may be materially different from actual results. 1. Based on estimates derived from internal testing and historical capacity data. There can be no assurance that such results will occur or that such results will be materially different from actual results. Mid-Term Long-Term ~12% CAGR

 
12 Expanding Existing Customer Relationships Know our customers Establish trust and reliability Establish Lifecore as a partner-of- choice for the future CDMO needs of existing customers Anticipate customers’ growing needs Efficient onboarding of new programs Consistent engagement Focus on commercial excellence Maintain/increase margin profile Lifecore prides itself on building long-term relationships, with multiple customer relationships ranging from 1. As of Q1FY25 M A X I M I Z I N G E X I S T I N G C U S T O M E R B U S I N E S S 20 yrs to nearly 40 yrs1

 
13 Fill & Finish: Pathway to Doubling Commercial Demand • Significant inflection point expected from minimum volumes beginning in 2027 • Potential upside to contractual minimums For illustrative purposes only, timing, estimates, assumptions and the actual capacity utilization may vary significantly, and we may not be able to achieve our anticipated financial goals. The information provided is illustrative only, the growth cycle may not be achieved and there is continued uncertainty relating to any guidance contained herein. There can be no assurance that such results will occur or that such results may be materially different from actual results. M A X I M I Z I N G E X I S T I N G C U S T O M E R B U S I N E S S Commercial Unit Projection ~2x

 
14 HA Fermentation: Strong & Steady Demand LIFECORE’S PREMIUM SODIUM HYALURONATE: doses sold worldwide 150 million1 • Ophthalmology • Orthopedics • Drug delivery • Biomaterials • Aesthetics • Oncology • Pain management Proven Applications Worldwide: M A X I M I Z I N G E X I S T I N G C U S T O M E R B U S I N E S S 1. As of September 2024 More than Lifecore manufactures >20 commercially approved HA injectable products

 
15 Strong, Diverse Pipeline • Impactful commercial revenue potential over the mid-term • Strong development project pipeline: vials, syringes, cartridges • Diversification across broad customer base Total Pipeline Represents $100M - $200M1 in Incremental Commercial Revenue Potential 1. Assumes full realization of management's estimates for annual commercial revenue potential from pipeline projects at peak sales. Information presented is not risk and probability adjusted and the actual revenue realization may vary significantly. This does not assume new customer additions or attrition. There can be no assurance that such results will occur or that such results will be materially different from actual results. 2. Projects are defined as individual drugs or devices for which Lifecore provides manufacturing services; as of 09/24 Active Projects2 Late Stage: 10 Early-Mid Stage: 15 A D V A N C I N G P R O G R A M S T O W A R D S C O M M E R C I A L I Z A T I O N

 
16 Late-Stage Development Portfolio: Impactful Revenue Potential1 Customer Product Type 2025 2026 2027 2028 Specialty Pharma Med Device Large Pharma Med Device Specialty Pharma NDA* Specialty Pharma Med Device Specialty Pharma NDA Specialty Pharma NDA Specialty Pharma Med Device Specialty Pharma Med Device Specialty Pharma NDA Specialty Pharma Med Device *Large Pharma company retains commercial rights to product 1. Assumes full realization of management's estimates for annual commercial revenue potential from pipeline projects as of Sept. 2024 at peak sales (not risk-adjusted). Information presented is not risk and probability-adjusted, and the actual revenue realization may vary significantly. There can be no assurance that such results will occur and that such results will be materially different from actual results. $10MM + $5MM - $10MM < $5MM Estimated Annual Revenue Potential1 A D V A N C I N G P R O G R A M S T O W A R D S C O M M E R C I A L I Z A T I O N

 
17 Attracting New High-Value Business Installation of 5-head filler Strategically expand target market Expanding business development & brand awareness D R I V I N G N E W B U S I N E S S

 
18 LO W CO ST – CO M M O DI TY GE NE RI CS HIGH POTENT – CYTO TO XIC /HORM ONES Strategically Expand Target Markets • Expanding beyond high-viscosity legacy • Attractive therapeutic areas • NCEs in Phase 2, Phase 3 • Unique, injectable delivery systems • Ophthalmic and orthopedic medical devices • Commercial site transfers mAbs Complex Generics Biologics Injectable Medical Device Biosimilars Small Molecule GLP1 Peptides D R I V I N G N E W B U S I N E S S

 
19 Expanded Targets Lead to Growing Pipeline • Strong, diverse and growing universe of 50+ potential future business opportunities1 • Mix of both large and specialty pharma • Subset of opportunities are HA-related, representing a broadening of our pipeline • Significant number of late-stage development or commercial site transfer programs Prospective Opportunities In process of being qualified - Inform & educate on Lifecore capabilities - Active Opportunities Within our capabilities with an identified close date D R I V I N G N E W B U S I N E S S 1. As of Sept. 2024

 
20 New Technology Opens Door to New Business State-of-the-Art, 5-Head Isolator Filler • Full isolator technology, state-of-the-art containment • Significantly expanded available capacity • Broad capability: vials, syringes & cartridges • Strengthens compliance Approximately 100% increase in annual production capacity* * Based on estimates derived from internal testing and historical capacity data. There can be no assurance that such results will occur or that such results will be materially different from actual results. D R I V I N G N E W B U S I N E S S

 
Sustaining Objectives Support Value Creation 21 Commitment to Quality Reduced Operational Expenses Performance-Driven Culture

 
22 ~15% 25%+ 2025 Mid-Term Adj. EBITDA Margin Adj. EBITDA Margin Reduction in operating expenses Expansion of existing commercial contracts Portfolio commercialization New business Operating leverage Efficiency and Revenue Growth Drive Margin Improvement For illustrative purposes only, timing, estimates, assumptions and the actual growth of adjusted EBITDA may vary significantly; we may not be able to manage our costs and achieve our anticipated financial goals. The information provided is illustrative only, the growth cycle may not be achieved and there is continued uncertainty relating to any guidance contained herein. There can be no assurance that such results will occur or that such results may be materially different from actual results.

 
23 40+ Years of Strong Track Record with Global Regulatory Bodies World-class quality system Ability to support multiple geographies

 
24 Experienced Management Team with Proven Ability to Execute Paul Josephs President & Chief Executive Officer Ryan Lake Chief Financial Officer Thomas Guldager VP of Operations Jackie Klecker EVP Quality and Development Services Darren Hieber SVP of Corporate Development & Partnerships Brikkelle Thompson SVP of Human Resources Joined: 2024 30+ years experience Joined: 2024 24+ years experience Joined: 2024 20+ years experience Joined: 2001 30+ years experience Joined: 2021 20+ years experience Joined: 2024 24+ years experience • President & Chief Executive Officer at Woodstock Sterile Solutions • Head of CDMO-Global Business Development at Viatris (formerly Mylan) • Extensive senior financial and strategic life sciences leadership experience • Chief Financial Officer of Societal CDMO, Recro Pharma, Baudax Bio, Aspire Bariatrics, DSM Biomedical, Kensey Nash • Senior executive, manufacturing and site leader at Xellia Pharmaceuticals • Served in various roles at Lifecore surrounding Quality Assurance and Regulatory Affairs • VP of Business Development, Drug Product at Catalent • Head of Human Resources - the Americas at Teleflex • VP of Human Resources at Nonin Medical

 
25 Financial Highlights Revenue and Adjusted EBITDA were strong and in line with fiscal year guidance Second quarter fiscal 2025 financial results • Revenues: $32.6 million, 8% increase from Q2 fiscal 2024 • Net loss: $6.6 million • Adjusted EBITDA: $6.5 million, up $1.1 million from Q2 fiscal 2024 Full year fiscal 2025 guidance • Revenue: $126.5 to $130 million • Net loss: $(28.6) to $(26.6) million • Adjusted EBITDA: $19 to $21 million Second quarter fiscal 2025 developments Signed Multiple Development Agreements with New Customers Strengthened Balance Sheet with PIPE Financing, Raising Approximately $24.3 Million Favorable Restructuring of Credit Facility with BMO

 
26 Reconciliation of Non-GAAP Financial Measures To supplement the company’s financial results determined by U.S. generally accepted accounting principles (“GAAP”), the company has disclosed in the table below the following non-GAAP information about Adjusted EBITDA. 1 Adjusted EBITDA is net (loss) income as determined under GAAP excluding (i) interest expense, net of interest income, (ii) income tax expense (benefit), (iii) depreciation and amortization, (iv) stock-based compensation, (v) change in fair value of debt derivatives, (vi) financing fees (non-interest), (vii) reorganization costs, (viii) restructuring costs, (ix) franchise tax equivalent to income tax, (x) contract cancellation costs, (xi) loss (income) from discontinued operations, (xii) stockholder activist settlement costs, and (xiii) start-up costs. The company believes that non-GAAP financial measures, such as Adjusted EBITDA, are helpful in understanding its business as it is useful to investors in allowing for greater transparency of supplementation information used by management. Adjusted EBITDA, is used by investors, as well as management in assessing the company’s performance. Non-GAAP financial measures should be considered in addition to, but not as substitute for, reported GAAP results. Further, non-GAAP financial measures, even if similarly titled, may not be calculated in the same manner by all companies, and therefore should not be compared. 1. See disclaimers and important information on Slides 2 and 3 Reorganization costs include costs not expected to be incurred on a normalized basis associated with Lifecore becoming a stand-alone entity, divestitures, litigation related with former owners of acquired businesses, restatements of financial statements and change in auditors. Restructuring costs are related to board approved actions consisting primarily of employee severance, lease cost of exited facilities, and costs associated with divested businesses. (a) We previously estimated net loss to be $25.9 million to $23.9 million, which we now estimate will be $28.6 million to $26.6 million. The increase is due to higher stock-based compensation, interest expense, former CFO severance, and elevated legal expenses related to the civil litigation. (b) We previously estimated restructuring, reorganization, stockholder activist settlement costs to be $9.9 million, which we now estimate will be approximately $10.3 million of which $8.2 million was incurred in the six months ended November 24, 2024. The overage is due to former CFO severance and elevated legal expenses related to the civil litigation. Second quarter fiscal 2025 results: Full year fiscal 2025 guidance vs. fiscal 2024 (in thousands) November 24, 2024 November 26, 2023 (in thousands) May 25, 2025 May 26, 2024 Net (loss) income (GAAP) (6,571) 14,218 Net (loss) income (GAAP) (a) (28,600) - (26,600) 12,013 Interest expense, net 5,465 4,073 Interest expense, net 22,000 18,090 Income tax expense (benefit) 43 (65) Income tax expense (benefit) — 183 Depreciation and amortization 2,044 1,987 Depreciation and amortization 8,300 7,954 Stock-based compensation 3,372 1,577 Stock-based compensation 10,900 6,201 Change in fair value of debt derivatives (1,200) (20,700) Change in fair value of debt derivatives (4,900) (39,500) Financing fees (non-interest) 368 1,108 Financing fees (non-interest) 700 3,513 Reorganization costs 2,463 2,162 Reorganization costs (b) 7,600 9,796 Restructuring costs 404 157 Restructuring costs (b) 1,400 1,656 Franchise tax equivalent to income tax 50 94 Franchise tax equivalent to income tax 300 272 Contract cancellation costs — 297 Contract cancellation costs — 567 Loss (income) from discontinued operations — 24 Loss (income) from discontinued operations — (2,682) Stockholder activist settlement 78 — Stockholder activist settlement (b) 1,300 459 Start-up costs — 487 Start-up costs — 1,684 Adjusted EBITDA $ 6,516 $ 5,419 Adjusted EBITDA $ 19,000 - 21,000 $ 20,206 Three Months Ended Twelve Months Ended

 
Thank you!

 
v3.24.4
Document and Entity Information Document
Jan. 02, 2025
Cover [Abstract]  
Document Type 8-K
Document Period End Date Jan. 02, 2025
Entity Registrant Name LIFECORE BIOMEDICAL, INC.
Entity Central Index Key 0001005286
Entity Incorporation, State or Country Code DE
Entity File Number 000-27446
Entity Tax Identification Number 94-3025618
Entity Address, Address Line One 3515 Lyman Boulevard
Entity Address, City or Town Chaska,
Entity Address, State or Province MN
Entity Address, Postal Zip Code 55318
City Area Code 952
Local Phone Number 368-4300
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock
Trading Symbol LFCR
Security Exchange Name NASDAQ
Entity Emerging Growth Company false
Amendment Flag false
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