Landec Lowers 2011 EPS Guidance To $0.34-0.36 from $0.36-0.41 vs $0.38 Estimate (LNDC)

Landec Corporation LNDC today announced revised guidance for fiscal year 2011 revenue and net income growth as a result of cold and wet weather that has impacted, and continues to adversely impact, produce sourcing and sourcing costs for the produce industry and for Landec's food subsidiary, Apio, Inc.'s value-added, fresh-cut vegetable business. Landec now expects revenue growth of 12% to 15% and net income growth of 20% to 25% for fiscal year 2011 compared to fiscal year 2010. The earnings per share for fiscal year 2011 are now expected to be in the range of $0.34 to $0.36 compared to prior guidance of $0.36 to $0.41. "California has experienced a prolonged period of cold and wet weather during November and December of 2010 which has resulted in produce shortages in Apio's value-added, fresh-cut vegetable business due to lower growing and production yields and poor produce quality that does not meet our stringent quality standards," stated Gary Steele, Chairman and CEO of Landec. "These shortages have occurred during two of the Company's higher volume sales months and have resulted in Apio having to purchase certain key raw produce items on the open market at prices considerably above our contracted prices in order to meet obligations to our customers during their critical holiday season." "Cold weather slows down growing rates for some of our primary raw produce items, while wet weather can create disease. The prolonged period of both cold and wet weather conditions in California, and other growing regions, has significantly impacted production yields throughout the industry," stated Ron Midyett, CEO of Apio. "We have not experienced weather conditions like this for such an extended period of time since December 2006. The Apio team is doing everything it can to minimize the financial and operational impacts from these shortages, however, our commitment is first and foremost to servicing our customers by fulfilling their needs during this busy holiday season." "We currently estimate that for our fiscal year 2011 results approximately half of the negative impact from Apio's sourcing issues will be offset by better than expected results from Landec's other lines of business, particularly our hyaluronan-based biomaterials subsidiary, Lifecore Biomedical, Inc., which is currently forecasted to beat its budgeted revenue and operating income expectations by more than 10%," stated Greg Skinner, CFO of Landec. "The net income growth guidance continues to be based on growth compared to net income in fiscal year 2010 after excluding the $3.7 million in non-recurring charges in fiscal year 2010. With revenue growth of 12% to 15% and net income growth of 20% to 25%, we still expect a good year overall."