• Revenue: $32.6 million for Q2 FY2025, an 8% increase from $30.2 million in the prior-year period.
• Gross Profit: $11.1 million for Q2 FY2025, up from $10 million in the prior-year period.
• Selling, General, and Administrative Expenses: $11.1 million for Q2 FY2025, compared to $9.3 million in the prior-year period.
• Net Loss: $6.6 million for Q2 FY2025, compared to net income of $14.2 million in the prior-year period.
• Loss Per Diluted Share: $0.25 for Q2 FY2025, compared to $0.39 income per diluted share in the prior-year period.
• Adjusted EBITDA: $6.5 million for Q2 FY2025, an increase from $5.4 million in the prior-year period.
• PIPE Financing: Successfully closed a $24.3 million PIPE offering in October.
• Revolving Credit Facility: Amended and extended with BMO, including a three-year extension and reduced interest rates.

• Warning! GuruFocus has detected 4 Warning Signs with LFCR.

Release Date: January 02, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Lifecore Biomedical Inc (NASDAQ:LFCR) reported an 8% increase in quarterly revenues, reaching $32.6 million, driven by higher sales volumes from its largest customer.
• The company successfully completed a $24.3 million PIPE financing, significantly improving its liquidity position.
• Gross profit increased by $1.1 million compared to the same period last year, primarily due to price increases and a favorable sales mix.
• Lifecore signed multiple new projects, including a notable agreement with Nirsum Laboratories for CDMO services.
• The company installed a high-speed, multi-purpose five-head isolator filler, doubling its available capacity and enhancing its revenue-generating potential.

Negative Points

• Lifecore Biomedical Inc (NASDAQ:LFCR) reported a net loss of $6.6 million for the quarter, compared to a net income of $14.2 million in the same period last year.
• Selling, general, and administrative expenses increased to $11.1 million, primarily due to higher non-cash stock-based compensation expenses.
• The company experienced a $0.5 million decrease in HA manufacturing gross profit due to manufacturing variances.
• Legal and audit costs increased, impacting the overall financial performance.
• Despite revenue growth, the company maintained its top-line revenue guidance without any upward revision.

Q & A Highlights

Q: Can you provide more details on the Nirsum opportunity and how it came into the pipeline? Are there additional development opportunities with them beyond the current project? A: Paul Josephs, CEO: The Nirsum opportunity was identified by our Business Development team. We have signed a limited scope of work to start the program, with plans for ongoing development through Phase 2 to Phase 3, and ultimately commercialization. While we haven't quantified commercial volumes yet, we believe it will be meaningful.

Q: What feedback are you receiving from pharma customers regarding their fiscal '25 plans, and how can Lifecore assist with any bottlenecks they face? A: Paul Josephs, CEO: We see ongoing momentum in development programs and late-stage site transfers. Our pipeline growth with large multinational pharmaceutical companies, now representing over 30% of our pipeline, indicates potential future success and optimism about our business development strategy.

Q: Are there opportunities for Lifecore to pursue late-stage or commercial tech transfer projects in the fill-finish market? A: Paul Josephs, CEO: Yes, pursuing late-stage or commercial site transfers is part of our strategy. We have significant opportunities in our pipeline and are working aggressively to close them, aiming to be top of mind for customers when such needs arise.

Q: How should we think about gross margins for the rest of the year, and is there any impact from the new five-head filler? A: Ryan Lake, CFO: We expect overall margins for the year to be in the low 30% range, with improvements in the second half. The new five-head filler won't dramatically impact margins this year, but as revenues grow, we expect increased leverage over overhead costs.

Q: Can you provide the total debt figure as of the end of the quarter? A: Ryan Lake, CFO: The total debt figure is approximately $160 million.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.