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8-K - LANDEC CORP \CA\ | v211833_8k.htm |
EX-10.1 - LANDEC CORP \CA\ | v211833_ex10-1.htm |
Exhibit
99.1
FOR
IMMEDIATE RELEASE
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Contact
Information:
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At
Landec:
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At
EAS & Associates:
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Gregory
S. Skinner
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Liz
Saghi
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Vice
President Finance and CFO
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(415)
816-8868
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(650)
261-3677
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LANDEC
SUBSIDIARY, APIO INC., ANNOUNCES EQUITY INVESTMENT
IN
LICENSING PARTNER WINDSET
MENLO
PARK, CA – February 16, 2011 — Landec Corporation (Nasdaq: LNDC), a materials
science company that develops and markets patented polymer products for food,
agricultural, medical device and licensed partner applications, announced today
that its subsidiary, Apio, Inc., has purchased $15 million of Senior Preferred
Shares and $201 of Common Shares in Windset Holdings 2010 Ltd., which represents
a 20.1% equity ownership by Apio in Windset. Windset is a privately
held produce company headquartered in Vancouver, Canada and, together with other
affiliated entities, has grown to be one of the most advanced protected
hydroponic vegetable producers in Canada and the largest privately owned,
vertically integrated, produce operation in Western Canada.
Apio has
an existing exclusive license agreement with Windset and views this equity
investment as the continuation of an ongoing strategic partnership in the fresh
produce market. In July 2010, Windset licensed the exclusive rights
to Apio’s BreatheWay®
packaging technology for use with cucumbers, tomatoes and peppers. As
a leader in innovation for fresh produce, Apio views Windset as the most
advanced hydroponic vegetable producer in North America, where the demand for
hydroponically grown produce is rising rapidly. The hydroponic
process uses no soil and a fraction of the water required in field
production. Furthermore, the process results in higher yields per
acre and is not burdened with traditional weather-related risks.
There is
a 7.5% annual dividend associated with the Senior Preferred
Shares. In addition, over the period of its minority interest
ownership in Windset, Apio will recognize quarterly 20.1% of the change in the
fair value of Windset which will include the impact of Apio’s share of Windset’s
net income or loss for the quarter. The shares purchased by Apio also
have a put/call feature that can be triggered on the sixth anniversary of the
equity purchase, whereby Apio can exercise the put to sell its shares or Windset
can exercise the call to purchase the shares from Apio at a price equal to the
original purchase price for the Senior Preferred Shares plus Apio’s pro rata
20.1% share of the then fair value of Windset.
The
proceeds from Apio’s equity investment, in addition to proceeds raised by
Windset from bank financings, will be used by Windset to purchase 221 acres of
land in the Santa Maria Valley of California, located within 5 miles of the Apio
operations, and to initially construct 64 acres of indoor vegetable production
along with the required support facilities for growing, harvesting, grading and
selling numerous varieties of hydroponically grown tomatoes. Construction is
already underway and is expected to be completed by the end of calendar year
2011.
Exhibit
99.1
During
its recently completed fiscal year ended December 2010, Windset generated
approximately $14 million CAD of EBITDA (earnings before interest, taxes,
depreciation and amortization). As a result of its new facilities in
California and continued growth of its Canadian operations, Windset projects
revenues will exceed $200 million CAD by fiscal year 2013 and EBITDA is expected
to more than double by 2013. At the end of its fiscal year 2010,
Windset had total assets of approximately $105 million CAD.
Ron
Midyett, Apio’s Chief Executive Officer, said, “The Santa Maria Valley is ideal
for the growing of hydroponic vegetables, providing the optimum combination of
heat during the day with cool nights, resulting in more vigorous plants, faster
growth and higher yields. Windset will be able to grow and sell
tomato products year round without adverse weather impact. Windset’s
Santa Maria operation will produce a variety of high quality tomatoes, such as
grape, cocktail, roma and beefsteak tomatoes, to be sold to premium retailers
across the Western U.S. and Canada.”
Steve
Newell, Windset’s Chief Executive Officer, stated, “We believe Apio is the ideal
strategic investor for our company. Windset’s extensive expertise in
state-of-the-art hydroponic protected vegetable production facilities combined
with Apio’s expertise in packaging technology will provide a unique opportunity
to offer innovative new products to our retail, club and food service
customers. Windset plans to collaborate with Apio on a number of
future programs that will leverage Apio’s BreatheWay packaging
technology. In turn, Apio will evaluate opportunities to incorporate
Windset grown products into its EatSmart® line of
packaged vegetables.”
Gary
Steele, Landec’s Chairman and CEO, commented, "Landec has two strategic
initiatives underway. We seek to diversify into applications for our materials
technology outside of our food business such as our recent acquisition of
Lifecore Biomedical, and we seek to diversify within our food business by
investing in areas that represent significant new growth and
innovation. Based on Windset’s growth profile, profitability track
record and the new opportunity for hydroponically grown tomatoes in Santa Maria,
California, Apio’s equity investment in Windset advances our goals for
diversification and profitability."
About
Windset
Founded in 1996, Windset has grown to
be one of the most advanced protected hydroponic vegetable producers in Canada
and the largest privately owned, vertically integrated, produce operation in
Western Canada. The Company has properties in Delta, British Columbia
(“BC”), Abbotsford, BC, North Las Vegas, Nevada, and soon to include Santa
Maria, California. Windset produces, grades, packages and distributes
vegetables to customers around North America. Today Windset has the
exclusive right to market 284 acres of production area plus soon an additional
64 acres of capacity in Santa Maria, California and has developed a top tier
customer base in the U.S. and Canada in retail and club stores. To ensure its
competitive advantage, Windset has spent a significant amount of time
researching the most advanced growing and packaging technologies for
hydroponically grown vegetables.
Exhibit
99.1
About
Landec Corporation
Landec is
a materials science company, leveraging its capability in polymer science and
bio-application development in order to commercialize new products within a
variety of life science fields, including food, agricultural, personal care and
medical device applications. With its Intelimer®
polymers, Landec is able to customize its proprietary polymer materials for each
application through the manipulation of controlled release, temperature
activation and biocompatibility properties. Landec’s subsidiary,
Apio, has leveraged
Landec’s BreatheWay® membrane
to become the leader in U.S. fresh-cut specialty vegetables. Landec Ag offers a full
solution of seed coatings and enhancements that work with the latest genetic
technologies to drive continuous improvements in crop yield. Landec
has also commercialized dozens of personal care, industrial and adhesive
products through its long-standing partner relationships. With its recent
acquisition of Lifecore
Biomedical, Landec is now a premium supplier of hyaluronan-based
biomaterials to the ophthalmic, orthopedic and veterinary markets worldwide. For
more information about the Company visit Landec’s website at www.landec.com.
Except
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, the integration of Lifecore’s operations into the Company, the
severity of the current economic slowdown, weather conditions that can affect
the supply and price of produce, the amount and timing of research and
development funding and license fees from the Company's collaborative partners,
the timing of regulatory approvals, the mix between domestic and international
sales, and the risk factors listed in the Company’s Form 10-K for the fiscal
year ended May 30, 2010 (See item 1A: Risk Factors) which may be updated in Part
II, Item 1-A Risk Factors in the Company’s Quarterly Reports on Form
10-Q. As a result of these and other factors, the Company expects to
continue to experience significant fluctuations in quarterly operating results
and there can be no assurance that the Company will remain consistently
profitable. The Company undertakes no obligation to update or revise
any forward-looking statements whether as a result of new developments or
otherwise.