Lifecore Biomedical Reports Decline in Financial Performance for Third Quarter and Nine Months Ended February 23, 2025

Lifecore Biomedical, Inc. reported a decline in financial performance for the three and nine months ended February 23, 2025, as detailed in its latest 10-Q filing. Total revenues for the third quarter were $35.2 million, a decrease of 2% from $35.7 million in the same period last year. For the nine-month period, revenues increased slightly to $92.4 million from $90.4 million. The company experienced a significant operating loss of $9.0 million for the quarter, compared to a loss of $0.9 million in the prior year, and a net loss of $14.8 million, down from a profit of $15.6 million in the same quarter last year. The nine-month net loss was $37.6 million, compared to a profit of $19.1 million in the previous year.

The decline in quarterly revenues was primarily attributed to a $1.5 million decrease in contract development and manufacturing organization (CDMO) revenues, which was impacted by customer terminations and project completions. However, revenues from HA manufacturing increased by $1.0 million due to heightened demand from a key customer. The gross profit margin also fell to 28.0% from 33.3% year-over-year, reflecting increased costs and inventory adjustments. The company reported a notable loss of $6.9 million on the sale of assets, primarily related to the disposal of a high-speed isolator-filler.

In terms of operational changes, Lifecore's employee headcount has been adjusted, contributing to a 6% decrease in research and development expenses. Selling, general, and administrative expenses rose by 2% to $10.1 million, driven by increased stock-based compensation and litigation costs. The company has also been actively managing its restructuring costs, with a net recovery of $0.1 million in the latest quarter, which included a favorable reversal of a historical lease obligation.

Looking ahead, Lifecore aims to enhance its market position by focusing on strategic partnerships and expanding its product offerings in the CDMO space. The company has emphasized its commitment to improving operational efficiencies and addressing its financial challenges, including a significant focus on managing its debt obligations, which stood at $184.4 million as of February 23, 2025. Lifecore's management remains optimistic about future growth opportunities, particularly in the HA manufacturing sector, and is working to resolve ongoing legal and regulatory matters that may impact its operations.