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Landec Reports Results for Second Quarter and First Half Fiscal Year 2013 and Increases Guidance for Fiscal Year 2013



Landec Reports Results for Second Quarter and First Half Fiscal Year 2013 and
Increases Guidance for Fiscal Year 2013

MENLO PARK, Calif., Jan. 2, 2013 (GLOBE NEWSWIRE) -- Landec Corporation
(Nasdaq:LNDC), today reported results for the second quarter and first half of
fiscal year 2013. Revenues for the second quarter of fiscal year 2013
increased by 41% to $114.7 million compared to revenues of $81.6 million for
the second quarter of fiscal year 2012. Net income increased by 167% to $8.9
million, or $0.34 per share, compared to net income of $3.3 million, or $0.13
per share, during the second quarter of fiscal year 2012. Revenues for the
first six months of fiscal year 2013 increased by $61.9 million, or 40%, to
$216.7 million compared to revenues of $154.9 million for the same period a
year ago. Net income for the first six months increased by 158% to $13.3
million or $0.50 per diluted share compared to net income of $5.2 million or
$0.20 per diluted share for the same period last year.

Revenues and net income for the second quarter and the first half of fiscal
year 2013 reflect strong operating results in our fresh-cut specialty packaged
food subsidiary, Apio, Inc.'s value-added business that includes GreenLine
Holding Company ("GreenLine"), which was acquired in April 2012, and Apio's
export business. In addition to the strong operating results, the Company
concluded at the end of the second quarter of fiscal year 2013, based on
GreenLine's revenues for the first eleven months of calendar year 2012 and
projections for December of 2012, that the required revenue target to meet the
minimum earn-out payment to the former GreenLine owners, a target derived from
the revenue projections of the former owners of GreenLine, will not be met. As
a result, the $3.9 million earn-out liability recorded at the close of the
GreenLine acquisition was reversed as of November 25, 2012 and the
corresponding increase in operating income is reflected on the Consolidated
Condensed Statements of Income under the caption "Change in value of
contingent consideration" in this release (see Question 5 in the Questions and
Answers section for more details). Also today, as reported in a separate
release by Landec, the Company has restated its financial statements for the
first quarter of fiscal year 2013 to reflect a $2.9 million increase in the
previously reported fair market value of Windset Holdings 2010 Ltd.
("Windset").

Gary Steele, Landec's Chairman and CEO, commented, "We had an excellent second
quarter and first half of fiscal year 2013, achieving revenue growth of 41%
and 40%, respectively, and net income growth of 49% and 81%, respectively,
before including the $3.9 million non-recurring earn-out adjustment. The
second quarter and first half operating highlights include: (1) growing our
Apio food business unit volume sales by 20% and 21%, respectively, compared to
the industry category growth of 9%, (2) increasing Apio's gross margin during
both the second quarter and first six months of fiscal year 2013 compared to
the same periods last year, (3) increasing Apio's export revenues by 16% and
17%, respectively, while maintaining margins, (4) achieving GreenLine's
earning expectations for the second quarter and first six months of fiscal
year 2013 despite lower revenues than originally expected due to the summer
drought and underperformance of a few new products, (5) completing our ERP
systems integration work generating operating efficiencies from the GreenLine
acquisition, (6) launching the first in our family of super food products with
significant initial nationwide demand, (7) our strategic partner Windset
initiating construction of an additional 64 acres of hydroponic greenhouses in
Santa Maria, California which will double Windset's capacity in California,
and (8) initiating shipments of new products recently approved by the FDA at
Lifecore Biomedical, Inc., Landec's biomaterials subsidiary. Our second
quarter was one of the most productive operating quarters in Landec's
history."

Guidance for Fiscal Year 2013

As reflected in our financial results, Landec had a very good first half of
fiscal year 2013 with revenue growth of 40% and net income growth of 158%
compared to the same period last year. Our original guidance for all of fiscal
year 2013 was to grow revenues by approximately 30% and net income by 25% to
35% compared to fiscal year 2012. Based on the results for the first half of
fiscal year 2013, and barring any major adverse financial impact from winter
weather in our food business, we now expect revenues to grow 33% to 38% and
net income to grow 60% to 70%, which includes the additional $3.9 million, or
$0.15 per share, from the non-recurring earn-out adjustment. In addition, we
expect to generate $20 million to $25 million in cash flow from operations and
we expect to spend approximately $8.0 million to $9.0 million in capital
expenditures, slightly higher than the $7.5 million to $8.0 million in our
original guidance for fiscal year 2013.

Second Quarter Results

Revenue growth of $33.1 million during the second quarter of fiscal year 2013
compared to the second quarter of last year was due to (1) $24.3 million of
revenues from GreenLine, (2) a $7.6 million increase in revenues in Apio's
non-GreenLine value-added businesses, which includes Apio Cooling and Apio
Packaging, and (3) a $3.9 million increase in Apio's export revenues due to a
3% increase in export unit volume sales and favorable pricing. The second
quarter growth of $7.6 million in Apio's non-GreenLine value-added businesses
resulted primarily from a year-over-year 20% increase in unit volume sales of
fresh-cut specialty packaged products due to new product offerings, new
distribution gains and overall growth in the fresh-cut vegetable category.
These increases in revenue were partially offset by a $1.5 million decrease in
revenues at Lifecore due primarily to product shipments that had historically
occurred during the Company's second quarter being delayed until the third
quarter this year and a $1.2 million decrease in Corporate revenues primarily
due to the termination of the Monsanto license agreement at the end of the
second quarter of fiscal year 2012.

For the second quarter of fiscal year 2013, net income increased $5.6 million,
or 167%, due to a $9.6 million net increase in Apio's pre-tax income. The
increases in Apio's pre-tax income were comprised of: (1) the $3.9 million
non-recurring reversal of the GreenLine earn-out liability, (2) $5.3 million
from GreenLine, and (3) a $1.3 million increase from Apio's non-GreenLine
value-added and export businesses, partially offset by interest and financing
expenses and amortization expenses associated with the acquisition of
GreenLine. The $9.6 million net increase in Apio's pre-tax income was
partially offset by: (1) a $1.3 million reduction in license fees from the
termination of the Monsanto license agreement, (2) a $2.1 million decrease in
pre-tax income at Lifecore due primarily to product shipments that had
historically occurred during the Company's second quarter being delayed until
the third quarter this year, and (3) an $871,000 increase in the income tax
expense.

Six Months Results

Revenue growth of $61.9 million during the first six months of fiscal year
2013 compared to the same period last year was due to (1) $44.3 million of
revenues from GreenLine, (2) a $12.9 million increase in revenues in Apio's
non-GreenLine value-added businesses, and (3) a $7.9 million increase in
Apio's export revenues due to a 3% increase in export unit volume sales and
very favorable pricing. The first half growth of $12.9 million in Apio's
non-GreenLine value-added businesses resulted primarily from a year-over-year
21% increase in unit volume sales of fresh-cut specialty packaged products due
to new product offerings, new distribution gains and overall growth in the
fresh-cut vegetable category. These increases in revenue were partially offset
by a $643,000 decrease in revenues at Lifecore due primarily to product
shipments that had historically occurred during the Company's second quarter
being delayed until the third quarter this year and a $2.6 million decrease in
Corporate revenues primarily due to the termination of the Monsanto license
agreement at the end of the second quarter of fiscal year 2012.

For the first half of fiscal year 2013, net income increased $8.1 million, or
158% compared to the same period last year, due to a $15.4 million net
increase in Apio's pre-tax income. The increases in Apio's pre-tax income were
comprised of: (1) the $3.9 million non-recurring reversal of the GreenLine
earn-out liability, (2) $6.5 million from GreenLine, (3) a $2.7 million
increase from Apio's non-GreenLine value-added and export businesses, and (4)
a $4.1 million increase in the fair market value of our Windset investment
compared to the increase in Windset Farm's fair market value during the first
six months of last year (see Question 2 in the Questions and Answers section
for more details). These increases in Apio's pre-tax income were partially
offset by interest and financing expenses and amortization expenses associated
with the acquisition of GreenLine. The $15.4 million net increase in Apio's
pre-tax income was partially offset by: (1) a $2.7 million reduction in
license fees from the termination of the Monsanto license agreement, (2) a
$2.7 million decrease in pre-tax income at Lifecore due primarily to product
shipments that had historically occurred during the Company's second quarter
being delayed until the third quarter this year, and (3) a $2.3 million
increase in the income tax expense.

Landec ended the second quarter of fiscal year 2013 with $6.8 million in cash
and marketable securities. During the first six months of fiscal year 2013,
cash and marketable securities decreased by $15.4 million due primarily to (1)
capital expenditures of $3.3 million for property, plant and equipment, (2)
principal debt payments of $7.3 million, and (3) the full earn-out payment of
$10 million related to the acquisition of Lifecore. These decreases were
partially offset by cash flow from operations and the tax benefits from stock
based compensation. At November 25, 2012, the Company had $19.7 million
available to borrow under its lines of credit.

Landec Second Quarter 2013 Earnings Conference Call

A conference call will follow this release at 8:00 a.m. Pacific Time on
Thursday, January 3, 2013 during which senior management of Landec will
present an overview of results for the first half and second quarter of fiscal
year 2013. Interested parties have the opportunity to listen to the conference
call live on the Internet on Landec's web site at www.Landec.com/earningscall.
A replay of the webcast will be available for 30 days. Additionally, investors
can listen to the call by dialing (866) 244-4637 or (703) 639-1179 at least 5
minutes prior to the start. A replay of the call will be available through
Thursday, January 10, 2013 by calling (888) 266-2081 or (703) 925-2533, code
#1600693.

Landec Corporation is a materials science company that leverages its
proprietary polymer technologies, application development and innovation
capabilities to develop and commercialize new products in food and
biomaterials markets. Landec's subsidiary, Apio, has become the leader in US
fresh-cut specialty packaged vegetables sold in North America based on
combining Landec's proprietary food packaging technology and the strength of
two major national brands Eat Smart and GreenLine, with the capabilities of a
large national food supplier, processor and distributor. Through its
subsidiary, Lifecore Biomedical, Landec is a premium supplier of
hyaluronan-based materials and medical products to ophthalmic, orthopedic and
veterinary markets worldwide. In addition, Landec will periodically work with
market-leading companies to develop and commercialize differentiated
polymer-based products. For more information about the Company, visit Landec's
website at www.landec.com.

Except for the historical information contained herein, the matters discussed
in this news release are forward-looking statements that involve certain risks
and uncertainties that could cause actual results to differ materially,
including such factors among others, as the timing and expenses associated
with operations, the ability to achieve acceptance of the Company's new
products in the market place, the severity of the current economic slowdown,
the ability to integrate GreenLine's operations into the Company, weather
conditions that can affect the supply and price of produce, the amount and
timing of research and development funding and license fees from the Company's
collaborative partners, the timing of regulatory approvals, the mix between
domestic and international sales, and the risk factors listed in the Company's
Form 10-K for the fiscal year ended May 27, 2012 (See item 1A: Risk Factors)
which may be updated in Part II. Item 1A Risk Factors in the Company's
Quarterly Reports on Form 10-Q. As a result of these and other factors, the
Company expects to continue to experience significant fluctuations in
quarterly operating results and there can be no assurance that the Company
will remain consistently profitable. The Company undertakes no obligation to
update or revise any forward-looking statements whether as a result of new
developments or otherwise.

                         --Tables and Q&A to Follow--

                                                                   
LANDEC CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(In thousands)
                                                                   
                                                                   
                                                November 25, 2012 May 27, 2012
                                                 (unaudited)       
ASSETS                                                             
Current Assets:                                                    
Cash, cash equivalents and marketable           $ 6,815           $ 22,177
securities
Accounts and income taxes receivable, net       40,929            32,321
Inventories, net                                24,402            22,011
Prepaid expenses and other current assets       5,090             4,654
Total Current Assets                            77,236            81,163
                                                                   
Property and equipment, net                     63,443            63,495
Intangible assets, net                          108,096           108,605
Investments in non-public companies             27,545            22,293
Other assets                                    1,792             2,136
Total Assets                                    $ 278,112         $ 277,692
                                                                   
LIABILITIES AND STOCKHOLDERS' EQUITY                               
Current Liabilities:                                               
Accounts payable                                $ 26,369          $ 23,420
Accrued compensation                            4,559             5,782
Other accrued liabilities                       4,513             18,642
Deferred revenue                                246               162
Lines of credit                                 7,500             11,666
Current portion of long-term debt               7,035             7,012
Total Current Liabilities                       50,222            66,684
                                                                   
Long-term debt                                  37,192             40,305
Deferred taxes                                  21,076            18,037
Other non-current liabilities                   1,862             1,108
                                                                   
Stockholders' Equity                                               
Common stock                                     26                 26
Additional paid-in capital                       122,981          119,894
Retained earnings                                43,101            29,822
Total Stockholders' Equity                       166,108           149,742
Non controlling interest                         1,652              1,816
Total Equity                                     167,760            151,558
Total Liabilities and Stockholders' Equity      $ 278,112         $ 277,692

                                                                            
                                                                            
LANDEC CORPORATION                                                          
CONSOLIDATED CONDENSED STATEMENTS OF INCOME                                 
(In thousands, except per-share data)                                       
(unaudited)                                                                 
 
                                                                            
                           Three Months Ended  Six Months Ended             
                            November  November  November 25,  November 27,  
                           25,       27,
                           2012      2011      2012          2011           
 Revenues:                                                                  
 Product sales             $ 114,091 $  80,765 $ 215,394     $ 153,086      
 Services revenues         563       805       1,334         1,785          
 Total revenues            114,654   81,570    216,728       154,871        
                                                                            
 Cost of revenue:                                                           
 Cost of product sales     95,707    67,894    183,371       129,163        
 Cost of services revenues 488       666       1,135         1,448          
 Total cost of revenue     96,195    68,560    184,506       130,611        
                                                                            
 Gross profit              18,459    13,010    32,222        24,260         
                                                                            
 Operating costs and                                                        
expenses:
 Research and development  2,113     2,337     4,317         4,670          
 Selling, general and      9,186     6,464     17,742        12,508         
administrative
 Change in value of        (3,933)   —         (3,933)       —              
contingent consideration
 Total operating costs and 7,366     8,801     18,126        17,178         
expenses
 Operating income          11,093     4,209       14,096       7,082        
                                                                            
 Dividend income           281          281    563              563         
 Interest income           33         81       58                157        
 Interest expense           (498)      (163)    (1,039)       (340)         
 Other income (expense)       983     1,079      5,241         1,088        
 Net income before taxes   11,892      5,487   18,919             8,550     
 Income taxes                (2,920)   (2,049)  (5,484)        (3,159)      
 Consolidated net income     8,972     3,438        13,435    5,391         
 Non controlling interest   (59)       (98)     (156)         (239)         
 Net income available to   $ 8,913    $ 3,340   $ 13,279     $ 5,152        
common stockholders
                                                                            
 Diluted net income per    $ 0.34    $ 0.13    $ 0.50         $ 0.20        
share
                                                                            
 Shares used in diluted    26,539     26,135   26,387         26,399          
per share computations
                                                                              

                              LANDEC CORPORATION
                    SECOND QUARTER ENDED NOVEMBER 25, 2012
                            QUESTIONS AND ANSWERS

1) Given your revised guidance for all of fiscal year 2013, how do the
expected results break down between the third and fourth quarters?

Revenues for the third and fourth quarters should be close to the same amount.
Net income should also be fairly even, with the third quarter being slightly
higher than the fourth quarter as a result of the shift of approximately $3.0
million of gross profit at Lifecore from the second quarter to the third
quarter of fiscal year 2013. It should be noted that when comparing this
year's third quarter results to last year's third quarter results, we recorded
$3.8 million during the third quarter of last year for the fair market value
change in our Windset investment. This year the amount we will record during
the third quarter will be approximately $600,000 (see Table in Question #2
below).

2) In the Company's original guidance for Landec's fiscal year 2013, what was
the planned fair market value change for Windset by quarter and how does that
compare to what has been recorded and what is planned to be recorded over the
next two quarters? 

The following is what the Company originally planned to recognize for the
change in the fair market value of Windset by quarter during fiscal year 2013
and what has been recorded during the first two quarters and what is planned
to be recorded during the last two quarters:

 (in thousands)    Q1      Q2      Q3        Q4        Total
Originally planned $ 1,200 $ 1,400 $ 1,600   $ 1,800   $ 6,000
Revised            4,296   956     600       648       6,500
Change             $ 3,096 $ (444) $ (1,000) $ (1,152) $ 500

(a) The change in the total amount is due to an increase in Windset's 2013 net
income projections.

(b) At the beginning of our fiscal year, the Company estimates the fair market
value of our Windset investment based on the appraisal of a third party
valuation firm.  For planning purposes, we spread any changes in the fair
market value throughout the year, recognizing that there is a time value of
money element in any value change.  However, we review our Windset investment
periodically and whenever we become aware of changes in the assumptions
underlying the valuation model (i.e., changes in financial forecasts for
Windset, discount rates, etc.), we are required to update the valuation model
at that point in time.  As a result, just like any other investment, changes
in value can occur at points that differ from our annual plan.  This happened
in the current quarter when we became aware of changes in assumptions that are
inputs into the Windset valuation model.

For comparative purposes, the following is what the Company recognized for the
change in Windset's fair market value during fiscal year 2012:

(in thousands)  Q1   Q2      Q3      Q4      Total
Recorded FY2012 $ 53 $ 1,122 $ 3,551 $ 1,112 $ 5,838

In addition to the quarterly recognition of the increase in the Windset fair
market value, the annual dividend of $1.1 million is recognized at $281,000
per quarter for both fiscal year 2012 and fiscal year 2013.

3) How is the integration of GreenLine into Apio progressing?  

The integration is going well and is ahead of our original plan. We now have a
single integrated ERP system in place which will result in significant
efficiencies in the upcoming quarters. We have paused our integration effort
during our very busy holiday season. When efforts resume early this calendar
year, the completion of the systems integration will allow us to offer "one
stop shopping" to our customers which we expect can lead to new sales of Eat
Smart products to GreenLine customers and new sales of GreenLine products to
Eat Smart customers. 

4) Regarding the recent acquisition of GreenLine, what are the future annual
savings from already realized operating synergies? What are potential other
future savings for operating synergies?

We have already realized approximately $1.5 million of operating synergies on
an annual basis as a result of general and administrative and purchasing cost
savings. Going forward, we see additional cost savings from operating
synergies by utilizing GreenLine's logistical distribution capabilities for
Eat Smart products and by utilizing GreenLine's East Coast operations to
process Eat Smart products. We also expect to reduce packaging and other
manufacturing costs by using the combined economies of scale of the two market
leaders in fresh-cut packaged vegetables and fresh-cut packaged green beans.

5) Was any of the earn-out associated with the GreenLine acquisition earned?

No. As part of our negotiations, GreenLine's former owners projected growth in
revenues for calendar year 2012 which were the basis for the target revenues
to achieve the earn out. Due primarily to planned new business during the last
six months of calendar year 2012 that was not realized, Landec is projecting
that the revenue target required to achieve the minimum earn out will not be
met. As a result, the $3.9 million liability recorded at the close of the
acquisition was reversed at the end of our second quarter of fiscal year 2013
and the corresponding offset is recorded as a reduction of operating expenses
in accordance with GAAP under the caption "Change in value of contingent
consideration". This income adjustment is not subject to income taxes and
therefore the entire $3.9 million, or $0.15 per share, is an increase to the
Company's net income for the three and six months ended November 25,
2012. Through the first six months of fiscal year 2013, GreenLine is on track
to achieve its planned net income for fiscal year 2013 which was included in
our original earnings guidance. We are very pleased with the performance of
GreenLine especially given the impact the summer drought in the Midwest had on
its business during the first quarter of fiscal year 2013.

6) Is the fresh-cut produce category continuing to grow? How has the weather
been in California thus far this fiscal year?

For the twelve months ended October 2012, the fresh-cut produce category grew
by 9.2% compared to Apio's unit volume growth of 20.6% for the same period.
 We are beginning to experience weather-related sourcing issues in California
but it is too early to determine the extent of the financial impact. 

7) What is the status of Windset's new Santa Maria, California operation?

Windset has been in full production with its first 64 acres of greenhouses in
Santa Maria since December of 2011 with different varieties of
tomatoes. Production performance has been exceeding Windset's original
expectations and in September 2012 they completed their second planting of
tomatoes in all 64 acres. They have recently started construction on the next
64 acres of greenhouses on their Santa Maria property adjacent to the first 64
acres.

During the first six months of fiscal year 2013, we have recognized a total of
approximately $5.8 million in pre-tax income from our strategic investment in
Windset which included $5.3 million from our portion of the increase in
Windset's recently completed fair market valuation and $563,000 of dividend
income from our Windset preferred stock.

For the second half of fiscal year 2013, we expect to recognize approximately
$1.2 million from our portion of the increase in Windset's fair market value
and $563,000 of dividend income from our Windset preferred stock.

For the full fiscal year 2013, we expect to recognize a total of $7.6 million
in pre-tax income which includes $6.5 million from our portion of the increase
in Windset's fair market value and $1.1 million of dividend income from our
Windset preferred stock.

Since February 15, 2011, the date of our original $15 million investment in
Windset, we have recognized $13.8 million of pre-tax income. We are very
pleased with our 20% ownership and strategic investment in Windset and with
the future prospects for Windset. 

8) What is the status of Landec's license agreement with Chiquita? 

Chiquita has elected, under the terms of the Chiquita license agreement, to go
non-exclusive starting January 1, 2013 and as a result, Chiquita will not be
required to pay the minimum gross profit for calendar year 2013. As a result
of the agreement becoming non-exclusive, Chiquita will pay the Company for
packaging membranes purchased on a per unit sales basis and the Company is now
entitled to sell its BreatheWay® packaging technology for bananas, avocados
and mangos to others.  If Chiquita continues to purchase membranes at its
current rate and we are not successful in adding new partners, this change
will result in a net income reduction of approximately $200,000 in fiscal year
2013 and approximately $750,000 in fiscal year 2014.

9) What new products and/or programs does the Company plan to introduce during
fiscal year 2013?

We intend to introduce a number of new products and product lines at Apio. We
also plan to expand offerings to customers of Lifecore primarily resulting
from the recent clearance of customer products by the FDA. Commercial
shipments have begun for several of these products. In addition, we expect
Windset to launch new BreatheWay packaged products for cucumbers and peppers
and we plan to make progress on new packaging for extending the shelf-life of
tomatoes. Additionally, we recently entered into a new R&D agreement with
Nitta Corporation, an existing Japanese licensing partner, in which we will be
developing new applications for our adhesive technology during the second half
of fiscal year 2013. This R&D development program will result in $550,000 of
R&D revenues and cash payments during the second half of fiscal year 2013.

10) What are Landec's priorities for the next 12 to 24 months?

Our goals are as follows: (1) continue integrating GreenLine into Apio's
operations, (2) grow Apio's business while maintaining or improving Apio's
margins, (3) grow Lifecore's business by launching new products and obtaining
new customers, and (4) invest in R&D efforts for developing new
technology-based applications.

11) How do the results by line of business for the three and six months ended
November 25, 2012 compare with the same periods last year? 

The results are as follows (unaudited and in thousands):
                  Three months    Three months   Six months     Six months
                  ended 11/25/12  ended 11/27/11 ended 11/25/12 ended 11/27/11
Revenues:                                                        
Apio Value        $ 78,592        $ 46,693       $ 147,223      $ 90,056  
Added(a)
Apio Export        28,115          24,229         53,473         45,584
Total Apio        106,707         70,922         200,696        135,640
Lifecore          7,740           9,235          15,713         16,356
Corporate (b)     207             1,413          319            2,875
Total Revenues    114,654         81,570         216,728        154,871
                                                                 
Gross Profit:                                                    
 Apio Value Added 13,102          4,531          23,045         10,590
Apio Export       2,034           1,802          3,376          2,816
Total Apio        15,136          6,333          26,421         13,406
Lifecore          3,116           5,264          5,482          7,979
Corporate         207             1,413          319            2,875
Total Gross       18,459          13,010         32,222         24,260 
Profit
                                                                 
R&D:                                                             
Apio              274             243            602            513
Lifecore          1,218           1,157          2,367          2,243
Corporate         621             937            1,348          1,914
Total R&D         2,113           2,337          4,317          4,670
                                                                 
S,G&A and other:                                                 
Apio              2,336           3,686          7,821          7,036
Lifecore          1,123           1,119          2,395          2,113
Corporate         1,794           1,659          3,593          3,359
Total S,G&A       5,253           6,464          13,809         12,508
                                                                 
Other (c):                                                       
Apio                 780           1,326           4,784        1,527
Lifecore           (40)            (150)         (117)          (323)
Corporate          (2,920)         (2,045)        (5,484)        (3,134)
Total Other          (2,180)         (869)         (817)          (1,930)
                                                                 
Net Income                                                       
(Loss):
Apio              13,306          3,730           22,782         7,384
Lifecore             735           2,838            603           3,300
Corporate          (5,128)         (3,228)        (10,106)       (5,532)
Net Income        $ 8,913         $ 3,340        $ 13,279       $ 5,152
                                                                 
a) Apio's Value-Added business includes revenues and gross profit from Apio
Cooling LP. and Apio Packaging.
b) Included in Corporate are the non-Apio license and R&D fee revenues and
gross profit.
c) Included in Other is net interest income/(expense), dividend income, change
in the FMV of Windset, non-operating income/(expense) and income tax expense.

CONTACT: At the Company:
         Gregory S. Skinner
         Vice President Finance and CFO
         (650) 261-3677

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