Landec Corporation Amends Its Credit Agreement
October 29 2019 - 9:15AM
Landec Corporation (Nasdaq: LNDC), a diversified health and
wellness company with two operating businesses, Curation
Foods, Inc. and Lifecore Biomedical, Inc. amended its
credit facility with its current syndicate of lenders, JPMorgan
Chase, BMO Harris Bank and City National Bank.
“This amendment provides us flexibility and
greater liquidity to implement our strategic priorities to improve
operating margins at Curation Foods by accelerating investments in
cost-out initiatives, while furthering our investments in growth
and capacity at Lifecore to meet increasing customer demand,”
stated Greg Skinner, Landec’s EVP of Finance and CFO.
The amendment increased the credit facility from
$205 million to $220 million, consisting of a $120 million term
loan and a $100 million revolving credit facility. The $120 million
term loan has a three-year term through October 25, 2022 with a
10-year amortization period. The Company intends to hedge virtually
all of its outstanding debt resulting in a fixed average interest
rate of approximately 1.70% plus a spread based on the Company’s
leverage ratio which can range from a low of 1.25% to a high of
3.50%. The remaining unhedged portion of the revolving line of
credit bears interest at LIBOR plus the spread based on the
Company’s leverage ratio. The Company’s current weighted average
interest rate on its debt is approximately 4.95%.
In addition, the amendment increases the
Company’s maximum leverage ratio from 4.5 to 5.0 for the remainder
of fiscal year 2020. The leverage ratio decreases by 25 basis
points each subsequent quarter thereafter, beginning in the first
quarter of fiscal year 2021, until it reaches 3.5 for the second
quarter of fiscal year 2022. There is no change to the Company’s
fixed coverage ratio of 1.2 or more.
About Landec CorporationLandec
Corporation (Nasdaq: LNDC) is a leading innovator of diversified
health and wellness solutions with two operating businesses:
Curation Foods, Inc. and Lifecore Biomedical, Inc. Curation Foods
is focused on innovating and distributing plant-based foods with
100% clean ingredients to retail, club and foodservice channels
throughout North America. Curation Foods is able to maximize
product freshness through its geographically dispersed family of
growers, refrigerated supply chain and patented
BreatheWay® packaging technology. Curation Foods brands
include Eat Smart® fresh packaged vegetables and
salads, O Olive Oil & Vinegar® premium artisan
products, and Yucatan® and Cabo Fresh® avocado products.
Lifecore Biomedical is a fully integrated contract development and
manufacturing organization (CDMO) that offers highly differentiated
capabilities in the development, fill and finish of difficult to
manufacture pharmaceutical products in syringes and vials. As a
leading manufacturer of premium, injectable grade Hyaluronic Acid,
Lifecore brings 35 years of expertise as a partner for global and
emerging biopharmaceutical and biotechnology companies across
multiple therapeutic categories to bring their innovations to
market. For more information about the company, visit Landec’s
website at www.landec.com.
Important Cautions Regarding
Forward-Looking StatementsExcept for the historical
information contained herein, the matters discussed in this news
release are forward-looking statements that involve certain risks
and uncertainties that could cause actual results to differ
materially, including such factors among others, as the timing and
expenses associated with operations, the ability to achieve
acceptance of the Company's new products in the market place,
weather conditions that can affect the supply and price of produce,
government regulations affecting our business; the timing of
regulatory approvals, the ability to successfully integrate Yucatan
Foods into the Curation Foods business, and the mix between
domestic and international sales. For additional information about
factors that could cause actual results to differ materially from
those described in the forward-looking statements, please refer to
our filings with the Securities and Exchange Commission (“SEC”),
including the risk factors contained in our most recent Quarterly
Report on Form 10-Q and Annual Report on Form 10-K. Forward-looking
statements represent management’s current expectations and are
inherently uncertain. Except as required by law, we do not
undertake any obligation to update forward-looking statements made
by us to reflect subsequent events or circumstances.
Contact
Information:
At the Company: |
Investor Relations: |
Gregory S. Skinner |
Jeff Sonnek |
Executive Vice President Finance and Administration and CFO |
(646) 277-1263 |
(650) 261-3677 |
Jeff.Sonnek@icrinc.com |
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