Severe Produce Shortages Related to El Nino Significantly Impacted Results
MENLO PARK, Calif., March 29, 2016 (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 third quarter of fiscal 2016 and nine months ended February 28, 2016.
“During the third quarter, Apio continued to experience severe produce shortages and increased costs for many of its key vegetables due to the weather-related effects from El Nino, specifically very poor yields and quality,” said Molly Hemmeter, Landec’s President and CEO. “Although weather conditions have recently improved, we are still managing the lingering effects from this year’s El Nino, which has matched the strongest El Nino in recorded history, with significant increases in Pacific Ocean temperatures that correspondingly resulted in a rise in land temperatures. Throughout most of our second and third fiscal quarters, we experienced significant deviations in both daytime and nighttime average temperatures in our growing regions. These deviations affected plant health and growth rates resulting in significant crop yield losses, poor quality, and changes in the timing of harvesting outside of planned harvesting schedules, all of which drove up the cost for sourcing quality produce items. Despite our best efforts to meet the increasing demand for our products, there was simply not enough supply from our contracted growers, or for purchase on the open market, to meet this demand. However, we were able to fill all orders for our higher margin Eat Smart® salad kits, which continue to grow at double-digit rates. Eat Smart salad kit revenues grew 20% in the third quarter of fiscal 2016 and grew 31% in the first nine months of fiscal 2016 compared to the same periods last year.
“Notably, our Lifecore biomaterials business is continuing to have a record year. Lifecore revenues increased 6% during the third quarter and 16% during the first nine months of fiscal 2016 compared to the same periods last year.