Product sales rose by 2% to $124.9 million. This was primarily due to a 9% jump in revenues at Lifecore and a 1% rise in Landec Natural Foods revenues.
Looking ahead into fiscal 2019, the company lifted its revenue growth outlook to the range of 6% to 8% from the prior range of 5% to 7%, due to the projected revenues from Yucatan during the second half. Earnings guidance are lowered to the range of $0.25 to $0.29 per share from the prior range of $0.45 to $0.50 per share.
For fiscal 2019, Landec expects Lifecore to grow 14% to 16% range and Landec Natural Foods to grow of 5% to 7%. Cash flow from operations is anticipated to be in the $26 million to $30 million range and capital expenditures are likely to be $40 million to $45 million range.
For the third quarter, the company predicts revenues in the range of $156 million to $159 million and earnings in the range of $0.03 to $0.04 per share. The bottom line forecast reflects acquisition-related costs, additional interest expense, lower gross profit on acquired inventory from the Yucatan acquisition and integration-related expenses.
Landec currently has about $145 million of debt which translates into debt to equity ratio of about 0.57 and debt to tangible assets ratio of 0.43. The company expects leverage ratio to decline and borrowing capacity to increase by fiscal 2019 year-end as the majority of its cash flow from operations are generated in the third and fourth quarters.
Shares of Landec ended Thursday’s regular session down 3.39% at $11.41 on the Nasdaq. Following the earnings release, the stock plunged over 7% in the after-market session.