Landec Corporation (LNDC) has reported a 29.01 percent fall in profit for the quarter ended Nov. 27, 2016. The company has earned $1.33 million, or $0.05 a share in the quarter, compared with $1.87 million, or $0.07 a share for the same period last year.
Revenue during the quarter dropped 3.26 percent to $135.86 million from $140.44 million in the previous year period. Gross margin for the quarter expanded 166 basis points over the previous year period to 13.95 percent. Total expenses were 97.60 percent of quarterly revenues, down from 98 percent for the same period last year. This has led to an improvement of 40 basis points in operating margin to 2.40 percent.
Operating income for the quarter was $3.26 million, compared with $2.81 million in the previous year period.
"We are focused on innovating new products at both Apio and Lifecore and shifting our product mix to higher value items, resulting in higher gross margin over time. For the second quarter, our consolidated gross margin increased 160 basis points to 13.9% compared to the second quarter of fiscal 2016, demonstrating our ongoing commitment to this innovation strategy. We are on the way to achieving our full fiscal year 2017 net income growth guidance of 50% to 70%," commented Molly Hemmeter, Landec's president and chief executive officer.
For the third-quarter 2017, Landec Corporation forecasts revenue to be in the range of $133 million to $140 million. The company expects diluted earnings per share to be in the range of $0.16 to $0.19.
For financial year 2017, Landec Corporation projects net income to grow in the range of $50 percent to $70 percent. The company expects diluted earnings per share to be in the range of $0.53 to $0.60.
Working capital increases
Landec Corporation has recorded an increase in the working capital over the last year. It stood at $37.53 million as at Nov. 27, 2016, up 15.19 percent or $4.95 million from $32.58 million on Nov. 29, 2015. Current ratio was at 1.80 as on Nov. 27, 2016, up from 1.52 on Nov. 29, 2015.
Cash conversion cycle (CCC) has decreased to 20 days for the quarter from 26 days for the last year period. Days sales outstanding were almost stable at 32 days for the quarter, when compared with the last year period.
Days inventory outstanding has decreased to 11 days for the quarter compared with 21 days for the previous year period. At the same time, days payable outstanding went down to 23 days for the quarter from 25 for the same period last year.
Debt moves up
Landec Corporation has witnessed an increase in total debt over the last one year. It stood at $54.98 million as on Nov. 27, 2016, up 14.04 percent or $6.77 million from $48.21 million on Nov. 29, 2015. Total debt was 16.11 percent of total assets as on Nov. 27, 2016, compared with 13.35 percent on Nov. 29, 2015. Debt to equity ratio was at 0.25 as on Nov. 27, 2016, up from 0.21 as on Nov. 29, 2015. Interest coverage ratio improved to 8.59 for the quarter from 6.39 for the same period last year.
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