Landec Corporation and its subsidiaries design, develop, manufacture, and sell health and wellness products for food and biomaterials markets. The company’s two core businesses are Packaged Fresh Vegetable and Biomaterials. Segments Within its two core businesses, the company has three segments, including Packaged Fresh Vegetables, Food Export, and Biomaterials. Packaged Fresh Vegetables This segment includes the business of Apio, Inc. (Apio). Apio’s primary business is fresh-cut and whole vegetable products typically packaged in the company's proprietary BreatheWay packaging. Apio’s Packaged Fresh Vegetables business markets various fresh-cut and whole vegetables and salad kit products to retail grocery chains, club stores and food service operators. During the fiscal year ended May 29, 2016, Apio shipped approximately 30 million cartons of produce to its customers throughout North America, primarily in the United States. In addition to packaging innovation, Apio has developed blends and combinations of vegetables that are sold in flexible film bags or rigid trays. Recently, Apio has launched a family of salad kits that are comprised of ‘superfood’ mixtures of vegetables with toppings and dressings. The first salad kit to launch under its Eat Smart brand was Sweet Kale Salad, which has distribution throughout club and retail stores in North America. Additionally, the company has launched under its Eat Smart brand various other superfood salad kits, including Ginger Bok Choy, Wild Greens and Quinoa, Beets and Greens, Southwest Salad and Asian Sesame. In addition to proprietary packaging technology and a new product development pipeline, the company has channels of distribution throughout North America with retail grocery store chains and club stores. The company sells its products under its nationally-known brand Eat Smart to retail and club and its GreenLine brand to foodservice operators. It also periodically licenses its BreatheWay packaging technology to partners, such as Chiquita for packaging bananas and berries and Windset for packaging peppers and cucumbers that are grown hydroponically in greenhouses. The company also licenses its BreatheWay technology to Juicero to extend the shelf-life of packets of fresh produce for use in a countertop juicing system. It is engaged in the testing and development of other BreatheWay products. Apio delivers its products to club stores, retail grocery chains and food service operators throughout North America. Food Export This segment purchases and sells whole fruit and vegetable commodities predominantly to Asian markets. Apio also operates the Food Export business. Food Export revenues consist of revenues generated from the purchase and sale of primarily whole commodity fruit and vegetable products to Asia through Apio’s export business, Cal-Ex. The Food Export business is a commission-based buy/sell business that typically realizes a gross margin in the 5-10% range. Through Cal-Ex, Apio is one of the major U.S. exporters of broccoli to Asia. Other export items include apples, grapes, stonefruit and citrus. Biomaterials This segment operates through the company's Lifecore Biomedical, Inc. (Lifecore) subsidiary. Lifecore is principally involved in the manufacture of pharmaceutical-grade sodium hyaluronate in the form of injectable products for ophthalmologic and orthopedic applications. Sodium Hyaluronate (HA) injections are a primary course of treatment for such conditions and Lifecore has built a leadership position in the markets it serves. Lifecore’s expertise includes its ability to ferment, separate, purify, and aseptically fill HA for injectable product use. In addition to ophthalmic and orthopedic uses, veterinary medicine is another application for Lifecore’s HA. Lifecore utilizes its fermentation process to manufacture premium, pharmaceutical-grade HA and uses its aseptic filling capabilities to also deliver private-labeled HA finished products to its customers. Lifecore sells its products through partners in the U.S., Europe and South America. Lifecore’s products are primarily sold to strategic marketing partners for use in three medical areas, including Ophthalmic, Orthopedic and Other/Non-HA products. In addition, Lifecore provides product development services to its partners for HA-based, as well as non-HA based, aseptically formulated products. These services include activities, such as technology transfer, material component changes, analytical method development, pilot studies, stability studies, process validation, and clinical production of materials for clinical studies. Customers The company’s top two customers, both from the Packaged Fresh Vegetables segment, were Costco Wholesale Corporation (Costco) which accounted for approximately 20% and Wal-mart, Inc. (Wal-mart) which accounted for approximately 12%, of its revenues. Trademarks/Trade Names Intelimer, Landec, Apio, Eat Smart, BreatheWay, GreenLine, Clearly Fresh, Lifecore, LUROCOAT and Ortholure are some of the trademarks or registered trademarks and trade names of the company in the United States and other countries. Seasonality Apio’s sales are seasonal. The Food Export business typically recognizes a much higher percentage of its revenues and profit during the first half of fiscal year compared to the second half. Research and Development Expenditure for research and development for the fiscal year ended May 29, 2016, was $7.2 million. Government Regulation Some of the company’s products are subject to extensive and rigorous regulation by the FDA, which regulates some of the products as medical devices and which, in some cases, requires Pre-Market Approval, and by foreign countries, which regulate some of the products as medical devices or drugs. Under the Federal Food, Drug, and Cosmetic Act, the FDA regulates the clinical testing, manufacturing, labeling, distribution, sale and promotion of medical devices in the United States. History Landec Corporation was founded in 1986. The company was incorporated in California in 1986 and reincorporated as a Delaware corporation in 2008.
(LNDC:Consolidated Issue Listed on NASDAQ Global Select )
3603 Haven Avenue
Menlo Park, CA 94025
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