Q4 2025 Lifecore Biomedical Inc Earnings Call
I'd like to turn the call over to Stephanie Diaz manager of Investor Relations for life core. Please go ahead.
Good afternoon, and thank you for joining us today to discuss life core biomedical fourth quarter and full year fiscal 2025 earnings results.
Hosting the call today from life core or Paul Joseph <unk>, President and Chief Executive Officer, and Ryan Lake Chief Financial Officer.
Before we begin today, we'd like to remind everyone that certain statements made in the course of this conference call contain forward looking statements. It is important to note that the forward looking statements made during this call reflect management's judgment and analysis only as of today August seven 2025, and the Companys actual results could differ material.
Early from those projected in such forward looking statements.
For a more thorough discussion of the risks and uncertainties associated with any forward looking statements. Please see the disclaimer regarding forward looking statements that is included in our fourth quarter and fiscal year 2025 earnings press release, which was furnished to the SEC today on form 8-K and is available on our corporate website at <unk>.
<unk> com as well as our other filings with the Securities and Exchange Commission, including but not limited to the company's Form 10-K for the fiscal year ended May 25, 2025, which was filed this afternoon and is also available on our website.
In addition, our earnings press release includes a discussion of and during this call we will reference certain non-GAAP information.
You can find relevant non-GAAP reconciliations in our earnings press release.
With that I'd like to turn the call over to Paul <unk>, Chief Executive Officer.
Yeah.
Thank you Stephanie good afternoon, everyone and thank you for joining our fiscal 2020 for fourth quarter and full year update.
Fiscal 2024 was a strong year for <unk> biomedical.
As you May recall, our joined the company in May 2024.
We began to talk over a number of challenges.
I am pleased to report with our new strategic plan improves CMO leadership.
We were highly successful in achieving a number of important goals during this transition year.
Key among these is upgrading our business development and marketing strategy.
During the year, we find multiple development, new development agreements with new and existing customers, including nine new programs with nine new customers in multiple wins subsequent to the end of the fourth quarter, including our late stage clinical <unk> program.
These wins will help to drive near to our near term momentum and have us excited about our performance in 2026.
Additional achievements from fiscal 2025 include right sizing, our workforce significantly improving our productivity.
Raising capital to those capital to strengthen our balance sheet and meeting our stated financial guidance for both revenue and adjusted EBITDA for the fiscal year.
Speaker #1: Improving CDMO leadership. We were highly successful in achieving a number of important goals during this transition year. Key among these is upgrading our business development and marketing strategy.
We are very pleased indeed with <unk> performance during fiscal 2025.
Speaker #1: During the year, we signed multiple development new development agreements with new and existing customers. Including nine new programs with nine new customers. And multiple wins subsequent to the end of the fourth quarter including a late-stage clinical GLP-1 program.
As we remain on track to achieve our stated goals of achieving a 12% revenue CAGR and increasing EBITDA margins to more than 25% over the midterm.
During the company's first Investor day presentation in November 2024.
Speaker #1: These wins will help to drive our near-term momentum and have us excited about our performance in 2026. Additional achievements from fiscal 2025 include right-sizing our workforce, significantly improving our productivity, raising capital to engthen our balance sheet, and meeting our stated financial guidance for both revenue and adjusted EBITDA for the fiscal year.
We outlined our strategic plan for achieving these goals.
Which focuses on the following three growth strategies.
Maximizing our existing customer business.
Advancing programs currently within our late stage development pipeline towards commercialization.
And finally, winning new and unprofitable business that will continue to fill our project pipeline from early stage work to commercialization.
Speaker #1: We are very pleased, indeed, with LIFECORE's performance during fiscal 2025. As we remain on track to achieve our stated goals, of achieving a 12% revenue CAGR and increasing EBITDA margins to more than 25% over the mid-term.
During the fourth quarter and full year life coordinated significant progress in executing against each of these growth strategies.
I will first address our efforts to maximize our existing customer business.
Speaker #1: During the company's first investor-day presentation in November 2024, we outlined our strategic plan for achieving these goals. Which focuses on the following three growth strategies: maximizing our existing customer business, advancing programs currently within our late-stage development pipeline towards commercialization, and finally, winning new and impactful business that will continue to fulfill our project pipeline.
Existing customers are advancing programs expanding aseptate business with <unk>.
These companies are a rich source of potential new business and we have dedicated significant effort to growing with each of our current customers.
To that end, we remain on track to realize a significant inflection point related to one of our current customers in 2027.
This inflection point contemplates a significant increase in the minimum take or pay commitments from this customer and then expansion in regions supported by life core to include Asia Pacific markets.
Speaker #1: From early-stage work to commercialization. During the fourth quarter and full year, LIFECORE made significant progress in executing against each of these growth strategies. I will first address our efforts maximize our existing customer business.
This expansion and geography is only possible beauty whitehorse strong multi compared to your quality system and regulatory compliance framework.
We are very pleased to have the confidence of this customer who is choosing to work with us.
Speaker #1: Existing customers are advancing programs and expanding aseptic business at LIFECORE. These companies are a rich source of potential new business, and we have dedicated significant effort to growing with each of our customers.
Development and manufacturing needs grow and we continue to review all of our existing commercial customers is an important part of our growth strategy.
I will now turn to our efforts to advance programs currently within our late stage development pipeline as they move towards commercialization.
Speaker #1: To that end, we remain on track to realize a significant inflection point related to one of our current customers in 2027. This inflection point contemplates a significant increase in the imum pay commitments from this customer.
As previously disclosed many of our late stage pipeline programs are poised for a potential regulatory approval and commercialization by 2028.
Speaker #1: And an expansion in regions supported by LIFECORE to include Asia-Pacific markets. This expansion in geography is only possible due to LIFECORE's strong multi-compendio quality system and regulatory compliance framework.
And while there is no guarantee that they will all reach the finish line, even a modest subset of this group could generate substantial and impactful growth for the company in the midterm.
We recently announced that we have signed a new 10 year commercial manufacturing and supply agreement with one of our late stage customers that is planning for commercialization of their novel ophthalmic therapeutic drug.
Speaker #1: We are very pleased to have the confidence of this customer who is choosing to work with us as their development and manufacturing needs grow.
Speaker #1: And we continue to view all of our existing commercial customers as an important part of our growth strategy. I will now turn to our efforts to advance programs currently within our late-stage development pipeline as they move towards commercialization.
In addition to the commercial manufacturing and supply agreement <unk> has also signed a multimillion dollar statement of work detailed detailing a range of <unk> services that will further advance this program towards potential regulatory approval and commercialization.
Speaker #1: As previously disclosed, many of our late-stage pipeline programs are poised for potential regulatory approval and commercialization by 2028. And while there is no guarantee that they will all reach the finish line, even a modest subset of this group could generate substantial and impactful growth for the company in the mid-term.
Under the terms of this new statement of work life core will be response for manufacturing a variety of batches of the drug candidate, including multiple process performance qualification or <unk> batches.
As a reminder.
<unk> program are a particularly important milestones as they are a pre commercialization of requirement.
Speaker #1: We recently announced that we have signed a new 10-year commercial manufacturing and supply agreement with one of our late-stage customers that is planning for commercialization of their novel, ophthalmic therapeutic drug.
While we caution that the execution of our <unk> campaign is only the beginning of a one to two year journey towards a potential commercial approval and associated recurring revenue and demand.
Speaker #1: In addition to the commercial manufacturing and supply agreement, LIFECORE has also signed a multi-million dollar statement of work detailing a range of CDMO services that will further advance this program towards potential regulatory approval and commercialization.
These multimillion dollar programs reflect our customers' ongoing trust in our capabilities and team.
For the year, we have successfully supported the advancement of other late stage programs towards commercialization, including a significant statement of work with a large multinational customer progressing its injectable medical device products.
Speaker #1: Under the terms of this new statement of work, LIFECORE will be responsible for manufacturing a variety batches of the drug candidate including multiple process performance qualification or PPQ batches.
Reflecting what we believe is our ongoing confidence in this program.
This customer also made a multimillion dollar investment in a dedicated production equipment.
Speaker #1: As a reminder, PPQ programs are a particularly important milestone as they are a pre-commercialization requirement. And we while we caution that the execution of a PPQ campaign is only the beginning of a one to two-year journey towards a potential commercial approval and associated recurring revenue and demand, these multi-million dollar programs reflect our customers' ongoing trust in our capabilities and team.
We are very pleased with the progress we've made in advancing programs. This program and other late stage programs and we look forward to supporting those that achieve commercial launch.
The third area of focus what we believe is critical to our ability to reach our financial goals.
Winning high value programs with new customers in various stages of development.
And as with each of the previous efforts, we made progress towards this goal.
Speaker #1: For the year, we have successfully supported the advancement of other late-stage programs towards commercialization. Including a significant statement of work with a large multinational customer progressing its injectable medical device product.
We continue to add new programs across a variety of development stages and during the fourth quarter, we signed three new early stage programs and respiratory disease and ophthalmology.
Speaker #1: Reflecting what we believe is their ongoing confidence in this program, this customer also made a multi-million dollar investment in dedicated production equipment. We are very pleased with the progress we've made in advancing this program and other late-stage programs.
One highlight is our agreement with <unk>, which is focused on the company's buyout 300 program. <unk> 300 is a novel and highly selective modulator of inflammation that is currently in development for multiple indications.
Speaker #1: And we look forward to supporting those that achieve commercial launch. The third area of focus that we believe is critical to our ability to reach our financial goals is winning high-value programs with new customers in various stages of development.
We believe the program they expand.
Advances towards commercialization supporting not only life course growth.
But also our capacity utilization.
Under the terms of our agreement with human Ethics light core will be responsible for conducting tech transfer.
Speaker #1: And as we with each of the previous efforts we made progress towards this goal. We continue to add new programs across a variety of development stages.
The existing fill and finish process for <unk> 300.
Including formulation development, GAAP assessment and filling of a pilot batch.
Speaker #1: And during the fourth quarter, we signed three new early-stage programs in respiratory disease and ophthalmology. One highlight is our agreement with Humanetics, which is focused on the company's BIO300 program.
This will be followed by analyst analytical method work included including feasibility assessments.
She will help estimate future development work for the product candidate.
In summary, we have added a total of nine new programs during the fiscal year 2025.
Speaker #1: BIO300 is a novel and highly selective modulator of inflammation that is currently in development for multiple indications. We believe the program may expand as it advances towards commercialization supporting not only LIFECORE's rowth but also our capacity utilization.
These programs span a broad spectrum of modalities and add meaningful revenue potential to our development pipeline.
I am thrilled to announce that subsequent to the quarter end, we signed multiple new customer agreements.
These include a late stage product with a leading developer of <unk> therapeutics for obesity and a phase III dermatology program.
Speaker #1: Under the terms of our agreement with Humanetics, LIFECORE will be responsible for conducting tech transfer of the existing fill and finish process for BIO300.
Both programs are in the process of being on boarded by our project management team.
Speaker #1: Including formulation development, gap assessment, and filling of a pilot batch. This will be followed by analytical method work including feasibility assessments, which will help estimate future development work for the product candidate.
<unk> one program will be in addition to our late stage pipeline and we look forward to collaborating with both of these new customers going forward.
We are encouraged by the momentum that we have been building within our business development team and the talent within that team.
Speaker #1: In summary, we have added a total of nine new programs during the fiscal year 2025. These programs span a broad spectrum of modalities and add meaningful revenue potential to our development pipeline.
Led by Mark Duff on circa as our new Chief commercial officer, we have rebuilt our sales organization with industry professionals.
Including the recent addition of a bit of a proven business development veteran with more than 20 years of pharmaceutical experience.
Speaker #1: I'm thrilled to announce that subsequent to the quarter end, we signed multiple new customer agreements. These include a late-stage product with a leading developer of GLP-1 therapeutics for obesity and a phase two dermatology program.
Equally as important we have aligned our internal organization to maximize our business development selling time and to ensure that our team has the support of the necessary support necessary to pursue new opportunities.
Speaker #1: Both programs are in the process of being onboarded by our project management teams. The GLP-1 program will be in addition to our late-stage pipeline and we look forward to collaborating with both of these new customers going forward.
In FY 'twenty five in addition to making meaningful progress in executing our strategy. We also made an important changes to the organization to facilitate our success.
Speaker #1: We are encouraged by the momentum that we've been building within our business development team and the talent within that team. Led by Mark Duff on second, as our new chief commercial officer, we have rebuilt our sales organization with industry professionals.
During the year light core appointed multiples a number of seasoned and successful leaders to elevate the company's operations.
Including Ryan Lake a highly experienced CFO.
Thomas <unk>, our new senior VP of operations Tom.
Speaker #1: Including the recent addition of a proven business development veteran with more than 20 years of pharmaceutical experience. Equally as important, we have aligned our internal organization to maximize our business development selling time and to ensure that our team has the support of the support necessary to pursue new opportunities.
Tom Salus Life course, first chief legal and administration officer, and as I mentioned earlier, our newest appointment Mark Duff on circa <unk>, the company's chief commercial officer.
This new team working with me and Jackie quicker, our executive VP of quality and development services has upgraded processes and implemented changes across our company to create a more efficient productive and customer oriented organization.
Speaker #1: In FY25, in addition to making meaningful progress in executing our strategy, we also made an important changes to the organization to facilitate our success.
We have accomplished this while reinforcing our proven quality management system, ensuring that we maintain quality as we grow.
Speaker #1: During the year, LIFECORE appointed multiple a number of seasoned and successful leaders to elevate the company's operations. Including Ryan Lake, a highly experienced CFO; Thomas Goldegger, our new senior VP of operations; Tom Salis, LIFECORE's first chief legal and administration officer; and as I mentioned earlier, our newest appointment, Mark Duff on second, the company's chief commercial officer.
I am very pleased with these organizational enhancements, which have resulted in measurable improvements across our company.
Further demonstrating the effectiveness of our quality management system and expertise expertise of our quality team.
The food and drug administration conducted a general audit of our quality systems and processes during the fourth quarter.
The audit with spanned over two weeks resulted in a highly favorable outcome for our organization and.
Speaker #1: This new team working me and Jackie Klecker are executive VP of quality and development services, has upgraded processes, and implemented changes across our company to create a more efficient, productive, and customer-oriented organization.
And feedback regarding the audit results from our customers and prospective customers has been overwhelmingly positive.
As we turn to our operations I am pleased to share that we have made meaningful improvements across the board.
Speaker #1: We have accomplished this while reinforcing our proven quality management system ensuring that we maintain quality as we grow. I'm very pleased with these organizational enhancements which have resulted in measurable improvements across our company.
Over the past year, our AC fermentation, a septic and packaging teams have delivered consistent gains in productivity.
Each continue contributing to the stronger more efficient organization we're building.
Speaker #1: Further demonstrating the effectiveness our quality management system and expertise of our quality team, the food and drug administration conducted a general audit of our quality systems and processes during the fourth quarter.
One standout our fermentation department achieved record output for our fiscal year at last quarter.
That milestone is a powerful example of what happens when strong leadership and engaged workforce and a mindset of continuous improvement come together.
Speaker #1: The audit was spanned over two weeks resulting in a highly favorable outcome for our organization. And feedback regarding the audit results from our customers and prospective customers has been overwhelmingly positive.
As a reminder, the performance follows culture, and we're seeing the impact.
Our commitment to customers remains unwavering.
We closed the fiscal year with an on time in full delivery rate of 97%.
Speaker #1: As we turn to our operations, I'm pleased to share that we have made meaningful improvements across the board. Over the past year, our HA fermentation aseptic and packaging teams have delivered consistent gains in productivity.
An improvement over FY 'twenty, four and a direct reflection of the pride, we take in delivering high quality products on time every time.
Looking ahead.
Speaker #1: Each contributing to the stronger, more efficient organization we're building. One standout, our fermentation department achieved record output for our fiscal year at LIFECORE. That milestone is a powerful example of what happens when strong leadership and engaged workforce and a mindset of continuous improvement come together.
Especially encouraged by the progress we've made towards launching our new enterprise resource planning system.
Which remains on track for our Q1 2026 go lives.
This isn't just a technology upgrade its enabler, it's an enabler of our long term strategy.
Once implemented our cloud based ERP will enhance efficiency strengthen our inventory control support sharply financial management and help help reduce costs as we grow.
Speaker #1: It's a reminder that performance follows culture. And we're eing the impact. Our commitment to customers remains unwavering. We close the fiscal year with an on-time in-fold delivery rate of 97%.
And finally I want to recognize the team's continued focus on safety our most important responsibility.
Speaker #1: And the improvement over FY24 and a direct reflection of the pride we take in delivering high-quality products on time every time. Looking ahead, I'm especially encouraged by the progress we've made towards launching our new enterprise resource planning system.
We maintained an injury recordable injury rate well below industry average this year and that's not by chance.
As a result of intentional proactive work to ensure that every associate feels confident in safe in the work they do every day.
We're building momentum and these operational achievements give me great optimism in our future.
Speaker #1: Which remains on track for a Q1 2026 go-live. This isn't just a technology upgrade. It's an enabler of our long-term strategy. One's implemented, our cloud-based ERP will enhance efficiency, strengthen our inventory control, support sharper financial management, and help reduce costs as we grow.
I'm extremely pleased with the cohesiveness and speed with which our team has identified areas of improvement.
Implemented value added solutions.
In a short amount of time, we have achieved measurable increases in efficiency and productivity across our organization.
And we plan to continue this effort to realize our overarching growth strategies.
Speaker #1: And finally, I want to recognize the team's continued focus on safety. Our most important responsibility. We maintained an injury of recordable injury rate well below industry average this year.
That concludes my update I will now turn the call over to Ryan Lee to provide an overview of our fourth quarter and fiscal 2025 financial results Brian.
Speaker #1: And that's not by chance. It's a result of intentional, proactive work to ensure that every associate feels confident and safe in the work they do every day.
Thank you Paul and good afternoon, everybody in connection with my comments I'd like to recommend that participants refer to life course Form 10-K filing with the Securities and Exchange Commission, which we filed today.
Speaker #1: We're building momentum. And these operational achievements give me great optimism in our future. I'm extremely pleased with the cohesiveness and speed with which our team has identified areas of improvement and implemented value-added solutions.
I'll now go over our results for the fourth quarter and 12 months ended May 25, 2025, beginning with the results for the quarter <unk>.
Revenues for the three months ended May 25, 2025, or $36 4 million, a decrease of 4% compared to $37 9 million for the comparable prior year period.
Speaker #1: In a short amount of time, we have achieved measurable increases in efficiency and productivity across our organization. And we plan to continue this effort to realize our overarching growth strategies.
The decrease in revenues was primarily due to a $5 $6 million decrease in <unk> revenues, which was primarily impacted by $4 4 million of lower development revenue, primarily due to completion of a discrete development project in the prior comparable period and timing of customer project life cycles. In addition, hi, Laura.
Speaker #1: That concludes my update. I will now turn the call over to Ryan Lake to provide an overview of our fourth quarter and fiscal 2025 financial results.
Speaker #1: Ryan?
Speaker #2: Thank ou, Paul. And good afternoon, everybody. In connection with my comments, I'd like to recommend that participants refer to LIFECORE's Form 10K filing with the Securities and Exchange Commission, which we filed today.
<unk> acid manufacturing revenues increased $4 1 million, primarily from increased demand due to our largest customer supply chain initiatives.
Speaker #2: I'll now go over results for the fourth quarter in 12 months ended May 25th, 2025, beginning with results for the quarter. Revenues for the three months ended May 25th, 2025 were 36.4 million, a decrease of 4% compared to 37.9 million for the comparable prior year period.
Gross profit for the three months ended May 25, 2025 was $14 million compared to $17 3 million for the same period last year.
The decline of $3 $3 million in gross profit is primarily due to a $6 million decrease in <unk> gross profit, which was primarily impacted by sales mix, including lower development revenue and aseptic manufacturing volumes.
Speaker #2: The decrease in revenues was primarily due to a 5.6 million dollar decrease in CDMO revenues which was primarily impacted by 4.4 million a ower development revenue, primarily due to completion of a discrete development project in the prior comparable period in timing of customer project life cycles.
The decline in <unk> gross profit was partially offset by a net $2 $8 million increase in manufacturing gross profit due to increased.
<unk> volumes and manufacturing variances.
Selling general and administrative expenses for the three months ended may two 2025 or $9 million compared to $12 2 million for the same period last year, the $3 $2 million decrease in SG&A expenses was primarily due to a $1 $6 million of lower legal personnel and financing.
Speaker #2: In addition, hyaluronic acid manufacturing revenues increased 4.1 million primarily from increased demand due to our largest customer, supply chain initiatives. Gross profit for the three months ended May 25th, 2025 was 14 million compared to 17.3 million for the same period last year.
Counting consulting expenses as a result of focused efforts to reduce operational expense and bringing in new leadership.
Speaker #2: The decline of 3.3 million in gross profit is primarily due to a $6 million decrease in CDMO gross profit which was primarily impacted by sales mix including a lower development revenue and aseptic manufacturing volumes.
Also included in SG&A expense is $2 million for the current period and $3 6 million for the prior year period related to legacy matters.
Speaker #2: The decline in CDMO gross profit was partially offset by a net $2.8 million increase in HA manufacturing gross profit, due to increased volumes in manufacturing variances.
For the three months ended May 25, 2025, the company recorded a net loss of $1 1 million and <unk> <unk> of loss per diluted share as compared to a net loss of $7 1 million and 19 of loss per diluted share for the same period last year.
Speaker #2: Selling general and administrative expenses for the three months ended May 25th, 2025 were 9 million compared to 12.2 million for the same period last year.
The decrease in net loss also included a couple of other nonoperating income or expense items detailed in our filings.
Speaker #2: The 3.2 million dollar decrease in SG&A expenses was primarily due to a 1.6 million dollars of lower legal personnel and finance and accounting consulting expenses as a result of focused efforts to reduce operational expense and bringing in new leadership.
Adjusted EBITDA for the three months ended May 25, 2025 was $9 1 million a decrease of $1 3 million compared to $10 4 million in the prior year period. The decrease in adjusted EBITDA was primarily due to the decrease in gross profit, partially offset by favorable recurring selling general and administrative expense.
Speaker #2: Also included in SG&A expenses is 2 million for the current period and 3.6 million for the prior period related to legacy matters. For the three months ended May 25th, 2025, the company recorded a net loss of 1.1 million and 6 cents of loss per diluted share as compared to a net loss of 7.1 million in 19 cents loss per diluted share for the same period last year.
Please.
I will now review the results for the 12 months of fiscal 'twenty five.
Revenues for the 12 months ended May 25, 2025 were $128 9 million, an increase of <unk>, 5% compared to $128 3 million for the comparable prior year period.
The increase in revenues was due to a $7 $1 million increase in manufacturing demand, primarily due to our largest customer supply chain initiatives.
Speaker #2: The decrease in net loss also included a couple other non-operating income or expense items detailed in our filings. Adjusted EBITDA for the three months ended May 25th, 2025 was 9.1 million; a decrease of 1.3 million compared to 10.4 million in the prior year period.
PHA manufacturing revenue increase was partially offset by a $6 $5 million decline in <unk> revenues is primarily due to a $6 $2 million.
Speaker #2: The decrease in adjusted EBITDA was primarily due to the decrease in gross profit partially offset by favorable recurring selling general and administrative expenses. I'll now review the results for the 12 months of fiscal 25.
Lower development revenue due to completion of a discrete development project in the prior comparable period and timing of customer project life cycles as well as various other offsetting customer fluctuation detailed in our Form 10-K.
Speaker #2: Revenues for the 12 months ended May 25th, 2025 were 128.9 million and increased to 0.5% compared to 128.3 million for the comparable prior year period.
Gross profit for the 12 months ended May 25, 2025 was $40 3 million compared to $41 9 million for the same period last year, the $1 $6 million decrease in gross profit is due to a $5 $9 million decrease in <unk> gross profit, which was primarily impacted by sales mix, including lower <unk>.
Speaker #2: The increase in revenues was due to a 7.1 million dollar increase in HA manufacturing demand primarily due to our largest customer, supply chain initiatives.
<unk> revenue and a septic manufacturing volumes and was partially offset by a net $4 $3 million increase in a chip manufacturing gross profits due to increased volumes and manufacturing variances.
Speaker #2: The HA manufacturing revenue increase was partially offset by a 6.5 million dollar decline in CDMO revenues that is primarily due to a 6.2 million dollars of lower development revenue due to completion of a discrete development project in the prior comparable period in timing of customer project life cycles as well as various other offsetting customer fluctuations detailed in our Form 10K.
Selling general and administrative expenses for the 12 months ended May 25, 2025 were $44 million compared to $40 5 million for the same period last year. The increase in SG&A expenses was primarily due to a $3 7 million increase in noncash stock based compensation.
Speaker #2: Gross profit for the 12 months ended May 25th, 2025 was 40.3 million compared to 41.9 million for the same period last year. The 1.6 million dollar decrease in gross profit is due to a 5.9 million dollar decrease in CDMO gross profit which was primarily impacted by sales mix including lower development revenue and aseptic manufacturing volumes and was partially offset by a net 4.3 million dollar increase in HA manufacturing gross profit due to increased volumes in manufacturing variances.
The majority of which was related to new higher performance stock unit grants to the company's executive officers.
Also included in SG&A expenses of $11 6 million for the current period and $11 9 million in the prior period related to legacy matters.
For the 12 months ended May 25, 2025, the company recorded a net loss of $38 7 million and $1 27 of loss per diluted share as compared with net income of $12 million and 33.
Speaker #2: Selling, general, and administrative expenses for the 12 months ended May 25, 2025, were $44 million, compared to $40.5 million for the same period last year.
Income per diluted share for the same period last year.
The loss in 2025 included a $7.7 million loss on the sale or disposal of assets as compared to the same period in 2024, which included a favorable $39 $5 million noncash fair market value adjustment to the <unk>.
Speaker #2: The increase in SG&A expenses was primarily due to a 3.7 million dollar increase in non-cash stock-based compensation. The majority of which was related to new higher performance stock unit grants to the company's executive officers.
That derivative liability adjusted EBITDA for the 12 months ended May 25, 2025 was $19 5 million.
Speaker #2: Also included in SG&A expenses is 11.6 million for the current period and 11.9 million in the prior period related to legacy matters. For the 12 months ended May 25th, 2025, the company had recorded a net loss of 38.7 million and a dollar 27 of loss per diluted share as compared to the net income of 12 million and 33 cents of income per diluted share for the same period last year.
$7 million decrease from $20 2 million in the prior year period.
Decrease in adjusted EBITDA was primarily due to the decrease in gross profit.
As Paul stated earlier, we are very pleased to have met the company's stated guidance for both revenue and adjusted EBITDA for the fiscal year fourth quarter. Adjusted EBITDA was the strongest of the year further subsequent to quarter end. The companys balance sheet was significantly strengthened through the receipt of the remaining $10 million in proceeds from the sale of the non.
Speaker #2: The loss in 2025 included a 7.7 million dollar loss on the sale or disposal of assets as compared to the same period in 2024 which included a favorable 39 and a half million dollar non-cash fair market value adjustment to the debt derivative liability.
Core assets, which took place earlier this year to align our capital assets with operational and commercial needs.
And other financial news I am pleased to announce that the company will be moving its fiscal year end to align with the calendar year effective for the December 31, 2025 calendar period in the coming months, our internal finance and accounting team will be working closely with our public accounting firm to prepare the financial statements and disclosures.
Speaker #2: Adjusted EBITDA for the 12 months ended May 25th, 2025 was 19.5 million. A 0.7 million dollar decrease from 20.2 million in the prior year period.
Speaker #2: The decrease in adjusted EBITDA was primarily due to the decrease in gross profit. As Paul stated earlier, we are very pleased to have met the company's stated guidance for both revenue and adjusted EBITDA for the fiscal year.
Needed to meet the reporting requirements under the new fiscal calendar.
And currently we will be working to recast financial statements for 2025 fiscal year that will end on December 31, 2025 and to prepare supporting documentation to bridge. The statements filed today to the recast in 2025 statements that will be filed following the December 31, 2025 year end.
Speaker #2: Fourth quarter adjusted EBITDA was the strongest of the year. Further, subsequent to quarter end, the company's balance sheet was significantly strengthened through their seat of the remaining 10 million in proceeds from the sale of the non-core assets which took place earlier this year to align our capital assets with operational and commercial needs.
This decision to move our fiscal year end, which had been based on the legacy business has seasonality.
Speaker #2: In other financial news, I'm pleased to announce that the company will be moving its fiscal year end to align with the calendar year effective for the December 31st, 2025 calendar period.
<unk> core to report in a timely manner with the majority of our peer companies customers and other stakeholders, which we believe is an important factor in evaluating operating and financial performance and also aligns with the launch of a new ERP system and expected associated benefits that Paul discussed earlier.
Speaker #2: In the coming months, our internal finance and accounting team will be working closely with our public accounting firm to prepare the financial statements and disclosures needed to meet the reporting requirements under the new fiscal calendar.
The company will provide additional updates on this transition in the coming months.
Speaker #2: Concurrently, we'll be working to recast financial statements for a 2025 fiscal year that will end on December 31st, 2025, and to prepare supporting documentation to bridge the statements filed today to the recasted 2025 statements that will be filed following the December 31st, 2025 year end.
As a result of the communicated change in fiscal year, we are providing financial guidance for the approximately seven months transition period from May 26 through December of 2025 for this seven month transition period, we expect revenues to be between approximately 74% to 76 million.
Speaker #2: This decision to move our fiscal year end, which had been based on the legacy business's seasonality, will allow LIFECORE to report in a timely manner with the majority of our peer companies customers and other stakeholders which we believe is an important factor in evaluating operating and financial performance and also aligns with the launch of the new ERP system and expected associated benefits that Paul discussed earlier.
And adjusted EBITDA to be in the range of $12 million to $14 million.
We wish to reiterate that we are only providing guidance at this time with respect to the seven month transition period, and we caution against extrapolating quarterly results for this guidance to estimate full year results.
This concludes my financial overview I'll now turn the call back over to Paul for his final comments.
Speaker #2: The company will provide additional updates on this transition in the coming months. As a result of the communicated change in fiscal year, we are providing financial guidance for the approximately seven-month transition period from May 26th through December of 2025.
Thank you Ryan in closing I would like to reiterate how thrilled I am with the company's achievements during this transition year.
We have restructured our organization and implemented numerous upgrades and enhancements across our company.
We improved efficiency by right sizing, our head count and reducing expenses as a percent of revenue all while increasing revenue per direct labor employees.
Speaker #2: For this seven-month transition period, we expect revenue to be between approximately $74 million and $76 million, and adjusted EBITDA to be in the range of $12 million to $14 million.
Our stronger more productive organization made substantial progress.
Speaker #2: We wish to reiterate that we are only providing guidance at this time with respect to the seven-month transition period and we caution against extrapolating quarterly results or this guidance to estimate full year results.
This concludes our prepared remarks for today.
Operator, you May now open the call for questions.
Certainly as a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again, please standby, while we compile our Q&A roster.
Speaker #2: This concludes my financial overview. I'll now turn the call back over to Paul for his final comments.
Speaker #1: Thank you, Ryan. In closing, I would like to reiterate how thrilled I am with the company's achievements during this transition year. We have restructured our organization and implemented numerous upgrades and enhancements across our company.
Our first question will be coming from Max Smock of William Blair. Your line is open Max.
Hey, good afternoon, guys. Thanks for taking our questions.
Maybe just starting with the one on your commentary around your largest customer supply chain initiatives. Two parter for me I know when we talked in the past you mentioned about $20 million of incremental revenue as part of those annual minimum commitments.
Speaker #1: We have improved efficiency by right-sizing our headcount and reducing expenses at a cent of revenue, all while increasing revenue per direct labor employee. Our stronger, more productive organization made substantial progress.
Still the right number to think about here or has that gone up at all and you also previously mentioned the potential for volumes to ramp.
Speaker #1: This concludes our prepared remarks for today. Operator, you may now open the call for questions.
Head of that minimum volume commitment kicking in in 2027 are you seeing that happen given the noise out there around tariffs or our volume is going to remain more or less the same until we get closer to or get into 2027. Thank you.
Speaker #3: Certainly. As a reminder to ask a question, please press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again.
Speaker #3: Please stand by while we compile our Q&A roster. Our first question will be coming Max Smock of William Blair. Your line is open, Max.
So Max maybe if this is Ryan thanks for the question so I.
I guess I would first just mentioned that the increases that we're seeing from an HPA demand perspective, we think one of our customers strategic supply chain initiatives to move away from another third party and that's bringing that additional aseptic manufacturing volumes from both life core and in house with the.
Speaker #4: Hey, good noon, guys. Thanks for taking our questions. Maybe just starting with one on your commentary here around your largest customer supply chain initiatives.
Speaker #4: Two-parter for me. I know when we talked in the past, you mentioned about 20 million of incremental revenue as part of those annual minimum commitments.
Speaker #4: Is that still the right number to think here or has that gone up at all? And then you also previously mentioned the potential for volumes to ramp ahead of that minimum volume commitment kicking in in 2027.
<unk> partner and we believe it's part of their overall strategy to increase life cores <unk> production in the coming years.
Speaker #4: Are you seeing that happen given the noise out there around tariffs or are volumes going to remain more or ess the same until we get closer to or get into 2027?
Okay understood. Thanks, Ryan.
Maybe one quickly on the new <unk> agreement you signed.
Speaker #4: Thank you.
Can you just frame out for us what that agreement looks like in terms of size of the engagement the potential timeline for approval and then just the role that you all have been engaged to play assuming that drive does eventually reach approval at some point in the future.
Speaker #5: So, Max, maybe this is Ryan. Thanks for the estion. So, you ow, I guess I would first just mention that the increases that we're seeing from an HA demand perspective, you know, we think one of our customers' strategic supply chain initiatives is to move away from another third party.
Thanks, Matt This is Paul I appreciate the question.
At this point, we're not in a position to disclose all the terms of our agreement, but I can tell you. We're extremely excited to collaborate with our client on this opportunity <unk> one market.
Speaker #5: And that's bringing additional aseptic manufacturing volume to both LIFECORE and in-house with this partner. And we believe it's part of their overall strategy to increase LIFECORE's aseptic production in the coming years.
It is projected to triple over the near term as I think about towards 2030.
And we're looking towards driving meaningful impact with our client as they work towards commercialization I would say in that 2029 2030 period.
Speaker #4: Okay. Understood. Thanks, Ryan. Maybe one quickly on the new GLP-1 agreement you signed. If you knew is, frame out for us what that agreement looks like in terms of size and engagement, the potential timeline for approval, and then just the role that you all have been engaged to play assuming that drug does eventually reach approval at some point in the ure.
Alright.
Okay. That's helpful. Thank you Paul and then maybe one last one for me and I'll hop back in the queue on the margin side Ryan I. Appreciate it's a little tricky here because of the seasonally weak fiscal first quarter historically, the 17% I mean, that's a pretty big step down.
Speaker #1: Thanks, Max. This is Paul. Appreciate the question. At this point, we're not in a to disclose all the terms of our agreement, but I can tell you we're extremely excited to collaborate with our client on this opportunity.
Relative to the back half of the year here, but again your.
And disproportionately reflecting the soft margins in Q1, so can you just walk us through.
Give us some sense for maybe what margins look like over the next 12 months. Just so you have a better frame of reference how that compares to what you all just posted for fiscal 2025.
Speaker #1: GLP-1 market is projected to triple over the near term. As I think about towards 2030, and we're looking towards driving meaningful impact with our client as they work towards commercialization.
Yeah. So.
Maybe just to touch on the quarter I mean from a margin perspective. This was.
Speaker #1: I would say in that 2029, 2030 period, is where it's going.
A pretty significant step up this was our highest quarter at about 38% margins for the quarter.
Speaker #4: Okay. That's helpful. Thank you, Paul. And then maybe one last one for me, and then I'll hop back in the queue. On the margin, side, Ryan, I appreciate it's a little icky here.
And that was due to the timing and the manufacturing. We also had good absorption of our.
Fixed costs I think as we look out.
Speaker #4: Because of the seasonally weak fiscal first quarter historically, the 17%, I mean, a pretty big step down relative to the back half of the year here.
We've only provided guidance for the seven month stub period, but I think.
Overall, we expect gross margins for the seven months stub peer.
Speaker #4: But again, you're disproportionately reflecting the soft margins in Q1. So can you walk us through or give us some sense for maybe what margins look like over the next 12 months?
<unk> to be in the low 30% range, but improved.
From the overall, 31% gross margins that we experienced in fiscal year 2005, and then with some variability between quarters based on product mix volume and timing of the shipments.
Speaker #4: Just so we have a better frame of reference to how that compares to what you all just posted for fiscal 2025.
Speaker #5: Yeah. So maybe just to touch on the quarter. I mean, from a margin perspective, this was a pretty significant step up. This was our highest quarter at about 38% margins for the quarter.
We expect a pretty even split.
Is that expected gross profit about 45% of.
Gross profit to come in the first four months and then about 55% of that to come.
Speaker #5: And that was due to timing of the manufacturing. We also had good absorption of our fixed costs. I think as we look out kind of, oh, we've only provided guidance for the seven-month stub period, but I ink, you ow, overall we expect gross margins for the seven-month stub period to be in the low of 30% range, but improve from the overall 31% gross margins that we experienced in fiscal year 25.
In the last three months of counting at your 25, so over the comparable prior year period that represents about a $6 million improvement in gross profit.
And then just.
It did.
Take that a little bit further in terms of the adjusted EBITDA margins in roughly 15% that we had for for fiscal year 'twenty five we'd expect the adjusted EBITDA for the seven month stub period.
Speaker #5: And then with some variability between quarters based on product mix, volume, and timing of the shipments, we expect a pretty even split of that expected gross profit, about 45% of that gross profit to come in the first four months and then about 55% of that to come in the last three months of calendar year 25.
To be in that range of $12 million to $14 million and Thats split between kind of the four months of about 40% of that and then the other 60% is really in the last three months of calendar year 'twenty five.
Got it Super helpful. Thank you again for taking our questions.
Yeah.
And our next question will be coming from Matt Hewitt of Craig Hallum Capital Group LLC. Your line is open.
Speaker #5: So over the comparable prior year period, that represents about a $6 million improvement in gross profit. And then just to take that a ittle bit further in terms of the adjusted EBITDA margins and roughly 15% that we had for fiscal year 25, we'd expect the adjusted EBITDA for the seven-month stub period to be in that range of 12 to 14 million.
Good afternoon. Thanks for taking the question maybe another way to ask the question is if you were not going through the.
The calendar year change here, what would your FY 'twenty six guidance have looked like.
Hi, Matt. Thanks for the question. So had we not changed the reporting calendar, we would've expected fiscal 2026, ending in May of 2026 revenues to be probably in a similar range as fiscal 2025, despite some potential headwinds.
Speaker #5: And that split between kind of the four-month stub—about 40% of that—and then the other 60% is really in the last three months of calendar year 2025.
On volumes going down, but from an expense side I think what's important here is that will be the first mover and we expect to see improvements in adjusted EBITDA due to all the efficiencies and cost cutting measures that we've implemented over the past year. So just a reminder, a large portion of those cost savings and efficient.
Speaker #4: Got it. Super helpful. Thank you again for taking our questions.
Speaker #5: Thanks.
Speaker #3: And our next estion will be coming from Matt Hewitt of Craighalem Capital Group, LLC. Your line is open.
Speaker #6: Good afternoon. Thanks for taking the estions. Maybe another way to ask the question is if you were not going through the calendar year change here, what would your FY26 guidance have like?
Fees were realized in our FY 'twenty five results, so theyre not as pronounced in those forward looking results, but we continue to strive for more and an example of this is a reduction in force that we had at the beginning of fiscal year 2005. So we realized the benefit of that in fiscal year 'twenty five so you won't.
Speaker #4: Hi, Matt. Thanks for the estion. So had we not changed the reporting calendar, we would have expected fiscal 2026 ending in May of 2026.
See that incremental benefits from that action in the comps because it's essentially savings in both periods and then similarly as you can see with our SG&A expenses. They came down almost $6 million in Q4 compared to Q1 fiscal year 2005, So I think.
Speaker #4: Revenues to be probably in a similar range as fiscal 2025 despite some potential headwinds on volumes going down. But from an expense side, I think what's important here is that'll the first mover.
Speaker #4: And we expect to see improvements in adjusted EBITDA due to all the efficiencies and cost-cutting measures that we've implemented over the past year. So just a reminder, a large portion of those cost savings and efficiencies were realized in our FY25 results.
Another important fact is that we've previously communicated a key inflection point to the ramp in us achieving our financial goals over the mid term is really based on that expansion project that Paul mentioned with one of our largest multinational customers and the associated contractual minimums that are expected to begin in calendar 'twenty.
Speaker #4: So they're not as pronounced in those forward-looking results, but we continue to strive for more. And an example of this is the reduction in force that we had at the beginning of fiscal year 25.
Seven also crucial to this is achieving.
Speaker #4: So we realized the benefit of that in fiscal year 25. So you won't see that incremental benefit from that action in the comps because it's essentially savings in both periods.
The goals is ongoing progression of our late stage development pipeline and we remain confident in achieving that 12% CAGR for revenue over the midterm, which at that time, we had defined as kind of the next three years to four years or approximately calendar year 'twenty seven or 28 and then in addition, we continue to make material progress.
Speaker #4: And then similarly, as you can see with our SG&A expenses, they came down almost 6 million dollars in Q4 compared to Q1 of fiscal year 25.
<unk> as we discussed on reducing costs as a percentage of revenue and we believe we will reach our EBITDA margin targets in a similar timeframe.
Speaker #4: So you know I ink another important fact is that we've previously communicated the key inflection point to the ramp in us achieving our financial goals over the mid-term is really based on that expansion project that Paul mentioned with one of our largest multinational customers.
That's very helpful. Thank you.
Shifting gears, a little bit there's been a lot of noise here over the past month or so.
With tariffs on imported pharmaceuticals, I think initially.
Speaker #4: And the associated contractual minimums that are expected to begin in calendar 27. Also crucial to this is achieving the goals is ongoing progression of our late-stage development pipeline.
It was.
Big was the term used and then I think just this past week. There was talk of 150 to 250 <unk>.
<unk> tariffs in 18 months I'm, just curious how your conversations have been evolving as.
Speaker #4: And we remain confident in achieving that 12% CAGR for revenue over the mid-term, which at that time we had defined as kind of the next three to four years.
As those kinds of numbers of kind of thrown out obviously it sounds like you've had some success already here in this quarter.
Speaker #4: Or approximately calendar year 27 or 28. And then in addition, we continue to make material progress as we discussed on reducing costs as a percentage of revenue.
So new deals is that a function of those tariff threats or is there still more to come on the new development side. Thank you.
Speaker #4: And we believe we'll ach our EBITDA margin targets in a similar time frame.
Matt. Thanks, so much for the question this is Paul.
Speaker #6: Well, that's very helpful. Thank you. Shifting gears a little bit, there's been a lot of noise here over the past month or so with tariffs on imported pharmaceuticals.
I can't tell you, how many techs I get emails I get about a.
Tariffs and Paul policy going up happening in Washington, and personally I consider that just noise.
Speaker #6: I think initially it was, you know, big. It was the term used. And then I think just this past week there was talk of 150 to 250 percent tariffs in 18 months.
I don't think anybody in the industry really believes that we will have tariffs at the 2200, 50% level with that said it's undeniable.
Undeniable that pharmaceutical manufacturing here in the United States is.
Speaker #6: I'm just curious how your conversations have been evolving as those kinds of numbers have kind thrown out. Obviously, it sounds like you've had some success already here in this quarter.
Is incredibly strong.
You see it in the recent announcements about investments large multinational players are making.
Think about J&J Eli Lilly.
Speaker #6: Signing some new deals. Is that a function of those tariff threats or is there still more to come on the new development side? Thank ou.
Astrazeneca novartis come to mind.
But they can't manufacture anything and not every organization is going to be able to make those types of investments and it is clear that the.
Speaker #1: Matt, ks so much for the question. This is Paul. You know, I can't tell you how many checks I get emails I get about tariffs and policy going up and happening in Washington.
Most economical and efficient way to onshore.
Manufacturing demand is utilizing a CMO and I truly believe that <unk> is strongly positioned to maximize on the opportunity.
Speaker #1: And personally, I consider that just noise. I don't think anybody in the industry really believes that we'll have tariffs at the 250 percent level.
And that's why we're playing offense.
We're making significant increases in our investment in sales and marketing.
Speaker #1: With that said, it's undeniable. Really undeniable that pharmaceutical manufacturing here the United States is incredibly strong. You see it in the recent announcements about investments large multinational players are making.
For FY, 'twenty, six or a transition period and on into 2006, and we're seeing it manifest itself in our pipeline I think about my review with the team earlier. This week. We are we have opportunities that we're looking at Asia Pacific market European market.
Speaker #1: I think J&J, Eli Lilly, AstraZeneca, Novartis come to mind. But they can't manufacture anything. And not every organization is going to be able make those types of investments.
Israel.
All the part of potential onshoring so.
We're going to really play significant offense with regard to our sales and marketing team I expect personally I'll spend an inordinate amount of time.
Speaker #1: And it is clear that the most economical and efficient way to onshore manufacturing demand is usually utilizing a CDMO. And I truly believe that LIFECORE is strongly positioned to maximize on the opportunity.
Working with that team hopefully complementing their efforts and we're really excited about the opportunity. That's in front of US and then if I think about how we manage the business internally just building off Ryan's comments.
Speaker #1: And that's why we're playing offense. We're making significant increases in our investment and sales and marketing. For FY26, our transition period and on into '26, and we're eing it manifest itself in our ipeline.
Before we're going to continue to manage the business aggressively as it relates to cost.
We are don't see any significant impact due to tariffs so again, great tailwind for the market.
50% of the programs that get FDA approval, our Injectables, we believe were strongly positioned to maximize.
Speaker #1: I think about my review with the team earlier this week. We have opportunities that we're oking at out of Asia Pacific market, European market, out of Israel.
Our potential success in this area.
Well, that's great happy hunting.
Speaker #1: All a part of potential onshoring. So you ow, again, we're going to really play significant offense with regard to our sales and keting team.
[laughter].
Thank you and our next question will come from Michael Pitofsky of Barrington Research. Your line is open Michael.
Speaker #1: I expect personally I'll spend an inordinate amount of time working with that team, hopefully complementing their efforts. And we're ally excited about the opportunity that's in front of us.
Hey, good evening guys.
Paul if I could just sort of follow up on that last question.
When youre, having conversations or your senior people are having conversations with.
Speaker #1: And then if I think about how we manage the business internally, just building off Ryan's comments before, you ow, we're going to continue to manage the business aggressively as it relates to cost.
Drug manufacturers.
Are these guys like like genuinely viewing this as like a catalyst for near term action or they kind of you know sort of like you are with the 250% tariff sort of rolling their eyes, and saying well, we'll see where the peds and we'll see over time and we'll sort of.
Speaker #1: So that we are don't see any significant impact due to tariffs. So again, great tailwinds for the market. 50% of the programs that get FDA approval are injectables.
Speaker #1: We believe we're ongly positioned to maximize our potential success in this area.
Like I'm trying to get a sense of how much of this is real within the industry.
Speaker #6: Well, that's great. Happy hunting.
Speaker #1: Thank ou.
Where it could drive near term results say over the next 12 to 18 months for you guys. Thanks.
Speaker #3: Thank ou. And our next question will come from Michael Peteski of Barrington Research. Your line is open, Michael.
Thanks, Mike I appreciate the question I, just believe it's part of the overall momentum.
Speaker #4: Hey, good evening, guys. Hey, Paul, if I could just sort of follow up on that last question. You know, when you're having conversations or your senior people are having conversations with, you know, drug manufacturers, I mean, are these guys like genuinely, you know, viewing this as like a catalyst for near-term action?
Think about where we were a year ago when I in my first earnings call as part of life core and we had a farming type mentality from a sales and marketing perspective, our pipeline was weak.
Clearly, but.
But we rebuilt our sales and marketing team.
And now with Mark on Board I Couldnt be more excited and optimistic about where we're going I just think the overall quality of our pipeline is better.
Speaker #4: Are they kind of, you know, sort of like you are with the 250 percent tariffs sort of rolling their eyes and saying, well, 'll see where this heads.
<unk> play a part of that but we're just seeing more opportunities based on our strategic shift and with regard to how we build this business by taking a very aggressive hunting approach.
Speaker #4: And we'll see over time. And we'll sort of make like I'm trying to get a sense of how much of this is real within the industry where it could drive near-term results, say, over the next 12 to 18 months for you guys.
To that with that said again as I mentioned.
Speaker #4: Thanks.
We have real intangible opportunities that are we seeing are in our pipeline coming out of Europe that may be here to four we didn't see out of Asia Pacific in Israel. So not all of that is tariff some of it is political unrest.
Speaker #1: Well, I think it's all thanks, Mike. Appreciate the estion. I just believe it's part of the overall momentum. You know, if I think about where we were a year ago when my first earnings call as part of LIFECORE, and we had a farming-type mentality from a sales and marketing perspective, our pipeline was weak.
Example of it out of Israel, but the momentum is clear.
Speaker #1: Clearly, but we rebuilt our sales and marketing team. And now with Mark on board, I couldn't be more excited and optimistic about where we're going.
There is U S.
Manufacturing momentum.
Within the pharmaceutical industry.
Okay fair enough.
Speaker #1: I just think the overall quality of our pipeline is better tariffs play a part of that. But we're just seeing more opportunities based on our strategic shift and with regard to how we build this business by taking a very aggressive hunting approach to that.
Two more quick quicker questions Paul I didn't hear if you mentioned it.
What's the current number of late stage projects that you guys have.
Together now as of today.
<unk> Mike.
Our late stage programs.
Speaker #1: With that said, again, as I mentioned, we have real and tangible opportunities that are we see in our in our pipeline coming out of Europe that maybe here to four we didn't see.
That we have from 10 that we announced or have communicated previously.
Okay, Great and then.
One for Ryan real quick I didn't catch it if you mentioned it did you mentioned what cash flow from ops and Capex was in the fourth quarter.
Speaker #1: Out of Asia Pacific and Israel. So not all that's tariffs. Some of it is political unrest as an example of it out of Israel.
No. It did and so we had positive cash flow from operations for the fourth quarter of a little over $5 million and free cash flow of over $3 million.
Speaker #1: But the momentum is clear. There is US manufacturing momentum within the pharmaceutical industry.
And I'd just remind you that that's despite having some one time kind of nonrecurring legacy expenses of about $2 million in the quarter. So it would've been 2 million better had that often.
Speaker #4: Fair enough. Two more. I guess quicker estions. Paul, I didn't hear it if you mentioned it. What's the current number of late-stage projects that you guys have?
Included.
Okay, and then let me sneak one more quick one in for you Ryan the ERP any estimate in terms of the two.
Speaker #1: Now, as of today, 11 Mike late-stage programs. That we have from 10 that we announced or have communicated previously.
Time to implement and the cost of implementation.
Speaker #4: Okay, great. And then one for Ryan real quick. I didn't catch it if you mentioned . Did you mention what cash flow from ops and CapEx was in the fourth quarter?
Yeah, Thanks, Mike so in.
In terms of timing, we are targeting Q1 of 2026 of calendar 2026.
It's roughly $600 million ERP investment and I think what's important.
Speaker #5: No, I didn't. So we had positive cash flow from operations for the fourth quarter. A little over 5 million. And free cash flow of over 3 million.
To mention about that is we've had.
Speaker #5: And I just remind you that that's despite having some one-time, kind, non-recurring legacy expenses of about $2 million in a quarter. So it would have been $2 million better had that not been included.
Over a dozen subject matter experts that have been directly engaged in all phases of the design and development of that we've had third party validation testing that's aligned with FDA and G. GMP standards. That's executed months in advance of the go live we've also been engaged with.
Speaker #4: Okay. And then let me think one more quick one in for you, Ryan. The ERP, any estimate in terms of the time to implement and the cost of implementation?
Sox.
Testing from a sox testing perspective months in advance of the go live.
Got defined go no go criteria and rollback plans and the new ERP will run parallel with our legacy.
Speaker #4: Thanks.
Speaker #5: Yeah, thanks, Mike. So in terms of timing, we're targeting Q1 of 2026 of calendar 2026. It's roughly 600,000 to 1 million dollar ERP investment.
ERP system as well and then we are planning to go live during.
Our planned manufacturing shutdown as well to minimize any risk with that.
Speaker #5: I think what's important to mention about that is, you know, we've had, you know, over a dozen subject matter experts that have been directly engaged in all phases of the design and development of that.
Okay awesome. Thanks, guys.
Thanks, Mike.
And I would now like to turn the call back to Paul Joseph <unk> for closing remarks.
Speaker #5: We've had third-party validation testing that's aligned with FDA and GMP standards that executed months in advance of the go-live. We've also been engaged with SOX kind testing from a SOX testing perspective months in advance of the go-live.
Thank you operator, I wish to thank all <unk> stakeholders, including our investors customers and collaborators for their ongoing support and partnership.
I also wish to thank our incredibly hardworking and talented team for driving each of the successes here at our core we are very pleased with our progress made in fiscal 2025, and we remain optimistic regarding our potential to achieve growth and sustainable profitability in the coming years. Thank you.
Speaker #5: You know, we've got defined go/no-go criteria and rollback plans. And the new ERP will run parallel with our legacy ERP system as well. And then we are planning the go-live during a planned manufacturing shutdown as well to minimize any risks with that.
And this concludes today's conference call. Thank you for participating you may now disconnect.
Speaker #4: Okay, awesome. Thanks, guys.
Speaker #1: Thanks, Mike.
Speaker #3: And I would now like to turn the call back to Paul Josephs for closing remarks.
Speaker #1: Thank you, operator. I wish to thank all LIFECORE stakeholders, including our investors, customers, and collaborators, for their ongoing support and nership. I also wish to thank our incredibly hard-working and talented team for driving each of the successes here at our LIFECORE.
Speaker #1: We are very pleased with our progress made in fiscal 2025. And we remain optimistic regarding our potential to achieve growth and sustainable profitability in the coming years.
Speaker #1: Thank you.
Speaker #3: disconnect. Good afternoon and thank you for joining LIFECORE's fiscal 2025 fourth quarter and full year earnings call. During the call, all participants will be in a listen-only mode.
Speaker #3: Now, I would like to turn the call over to Stephanie Diaz, Manager of Investor Relations for LIFECORE. Please go ahead.
Speaker #7: Good afternoon and thank you for joining us today to discuss LIFECORE Biomedical's fourth quarter and full year fiscal 2025 earnings results. Hosting the call today from LIFECORE are Paul Josephs, President and Chief Executive Officer, and Ryan Lake, Chief Financial Officer.
Speaker #7: Before we begin today, we'd like to remind everyone that certain statements made in the course of this conference call contain forward-looking statements. It is important to note the forward-looking statements made during this call reflect management's judgment and analysis only as of today August 7th, 2025, and the company's actual results could differ materially from those projected in such forward-looking statements.
Speaker #7: For a more thorough discussion of the risks and uncertainties associated with any forward-looking statements, please see the disclaimer regarding forward-looking statements that is included in our fourth quarter and fiscal year 2025 earnings press release.