Lifecore Biomedical Reports 8% Revenue Growth to $32.6 Million, Faces $6.6 Million Net Loss

Lifecore Biomedical, Inc. reported total revenues of $32.6 million for the three months ended November 24, 2024, marking an increase of 8% from $30.2 million in the same period last year. The company's revenue growth was driven primarily by a $1.9 million increase in contract development and manufacturing organization (CDMO) revenues, which rose to $25.6 million, and a $0.5 million increase in hyaluronic acid (HA) manufacturing revenues. However, the company experienced a net loss of $6.6 million for the quarter, a significant decline from a net income of $14.2 million in the prior year, largely attributed to increased operating expenses and interest costs.

For the six-month period ending November 24, 2024, Lifecore's total revenues increased by 5% to $57.3 million compared to $54.7 million in the previous year. The growth was fueled by a 21% increase in HA manufacturing revenues, which reached $11.5 million, while CDMO revenues saw a modest rise of 1%. The gross profit for the six months was $16.5 million, a 30% increase from $12.7 million, reflecting improved pricing strategies and a favorable sales mix.

The company has also made strategic moves, including the issuance of 5.9 million shares of common stock in October 2024, generating approximately $24.3 million in gross proceeds. This capital infusion is expected to support ongoing operational needs and strategic initiatives. Additionally, Lifecore has been focusing on enhancing its manufacturing capabilities and expanding its product offerings, particularly in the CDMO sector, to meet increasing customer demand.

Operationally, Lifecore's employee headcount increased to 36,980,790 shares outstanding as of November 24, 2024, up from 30,458,621 shares a year earlier. The company continues to face challenges, including rising interest expenses, which increased by 34% to $5.5 million, primarily due to the amortization of debt discounts related to its term loan with Alcon. The change in the fair value of the debt derivative liability also contributed to the financial strain, with a notable decrease in fair value recognized during the quarter.

Looking ahead, Lifecore remains focused on driving profitable growth through new product development and expanding its presence in the CDMO marketplace. The company aims to maximize production capacity and advance product commercialization efforts while navigating the complexities of its financial obligations and market conditions. Lifecore's management has expressed confidence in its strategic direction, despite the current financial challenges, and is committed to enhancing operational efficiencies and maintaining compliance with financial covenants.