LIFECORE BIOMEDICAL, INC. \DE\ (LFCR)·Q1 2026 Earnings Summary

Executive Summary

• Revenue rose 26% year over year to $31.1M for the three months ended September 30, 2025, with gross profit of $7.8M and Adjusted EBITDA of $3.1M; diluted EPS was a loss of $0.29. Management attributed growth to HA manufacturing demand and improved SG&A, and reaffirmed the transition-period guidance .
• Versus Wall Street consensus, revenue modestly beat ($31.1M vs $30.1M estimate*) while EPS missed (−$0.29 vs −$0.23 estimate*). EBITDA versus S&P’s standardized consensus is lower given the company reports non-GAAP Adjusted EBITDA (company $3.1M vs S&P EBITDA estimate $4.2M*) .
• Guidance: revenue $74–$76M and Adjusted EBITDA $12–$14M were maintained; net loss range improved to $16.4–$18.4M from prior $17.8–$19.8M (less negative), reflecting cost actions and productivity gains .
• Stock-reaction catalysts: affirmed outlook, two new programs signed in quarter plus two post-quarter (including a major commercial site transfer with a large pharma), and ERP go-live expected in Q1 2026 to further improve efficiency .

What Went Well and What Went Wrong

What Went Well

• Strong top-line growth and cost discipline: revenue up 26% YoY to $31.1M; SG&A down $5.9M YoY driven by recurring and legacy cost reductions. CEO: “We believe this strategy will allow us to reach our goals of achieving a 12+% revenue CAGR and increasing Adjusted EBITDA margins to more than 25% over the mid-term” .
• Operational productivity: workforce productivity improved “by more than 20%” over ~12 months; ERP system expected to strengthen inventory control and reduce costs .
• Business development momentum: two new programs signed in quarter and two more post-quarter, including a major commercial site transfer expected to be a top five customer consuming 5–10% of capacity when fully qualified .

What Went Wrong

• Profitability remains challenged: net loss of $10.0M; diluted EPS −$0.29; interest expense increased due to Alcon term loans and PIK/discount amortization .
• CDMO gross profit pressure: decline due to lower development revenue and aseptic mix/costing; Adjusted EBITDA margin compressed versus prior quarter (Q4) .
• Balance sheet strain: stockholders’ equity negative (−$10.5M), high related-party debt ($129.3M) and debt derivative liability ($25.5M), underscoring leverage and interest burden .

Financial Results

Current quarter vs consensus:

Values retrieved from S&P Global.*

Segment/Customer mix:

KPIs (margins, computed from cited amounts):

Notes: EBITDA margins use company-reported Adjusted EBITDA (non-GAAP).

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• CEO strategic message: “We believe this strategy will allow us to reach our goals of achieving a 12+% revenue CAGR and increasing Adjusted EBITDA margins to more than 25% over the mid-term” .
• Productivity and ERP: “We expect [the ERP] system to strengthen inventory control, support sharper financial management, and help reduce costs as we grow” .
• Commercial site transfer scope: “We do expect to be the sole manufacturer when fully qualified… anticipate this would be a top five customer… consume… 5–10% [of capacity]” .
• Pipeline execution: “Validation batches for [a large pharma] customer in early 2026… two Phase 3 clinical batches completed for another late-stage customer” .

Q&A Highlights

• Stub-period bridge: June revenues ~$8.7M (CDMO $6.6M, HA $2.1M); stub YTD revenue ~$39.8M; implied Q4 revenue $34–$36M; stub YTD Adjusted EBITDA ~$4.6M; implied Q4 Adjusted EBITDA $7–$9M .
• SG&A trajectory: Potential to reduce another ~$1.5M per quarter, targeting $7.5–$8.0M quarterly run-rate as legacy matters roll off .
• Commercial site transfer timing: 24–30 months to complete; intent to be sole manufacturer at full qualification .
• GLP-1 collaboration scope: Opportunities expected broader than GLP-1 alone (with Polypeptide) .
• Seasonality/back-half weighting: Expect CY2026 back-half stronger than first half (55%/45% split) on timing/order patterns .

Estimates Context

• Revenue beat: $31.109M actual vs $30.094M consensus* (3 estimates) .
• EPS miss: −$0.29 actual vs −$0.23 consensus* (3 estimates) .
• EBITDA context: Company reports non-GAAP Adjusted EBITDA ($3.050M) vs S&P’s standardized EBITDA consensus $4.218M*; differences reflect non-GAAP exclusions and standardization methodologies .
  Values retrieved from S&P Global.*

Where estimates may adjust: modest upward revenue revisions possible given HA demand and related-party/customer timing, while EPS/EBITDA forecasts may need to reflect higher interest expense and company’s use of Adjusted EBITDA versus standardized EBITDA .

Key Takeaways for Investors

• Revenue delivered a clean beat vs consensus; profitability remains the swing factor as interest expense and CDMO mix weigh on margins .
• Cost actions are visible and ongoing; monitor SG&A run-rate toward $7.5–$8.0M and ERP go-live execution in Q1 2026 for incremental efficiency gains .
• Business development momentum is tangible: new wins and a major commercial site transfer that could be a top-five revenue contributor post-qualification; track validation milestones through 2026 .
• Onshoring/regionalization tailwinds are real; pipeline breadth beyond GLP-1 and ophthalmology increases medium-term optionality .
• Balance sheet leverage and related-party debt/derivative liabilities are key risk constraints; watch cash growth ($18.9M at Sept 30) and interest expense trends .
• Guidance is intact with improved net loss range; back-half weighted revenue expected—positioning around customer order timing may create trading opportunities into Q4 stub-period print .
• Near-term setup: focus on gross margin stabilization, sustained Adjusted EBITDA progression, and conversion of late-stage programs to PPQ/validation batches to support the mid-term 12% CAGR/25% margin ambitions .