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United States securities and exchange commission logo
May 13, 2024
John Morberg
Executive Vice President, Chief Financial Officer, and Secretary
LIFECORE BIOMEDICAL, INC.
3515 Lyman Boulevard
Chaska, Minnesota 55318
Re: LIFECORE
BIOMEDICAL, INC.
Form 10-K for the
Fiscal Year Ended May 28, 2023
Filed March 20,
2024
File No. 000-27446
Dear John Morberg:
We have limited our review of your filing to the financial
statements and related
disclosures and have the following comments.
Please respond to this letter within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe a
comment applies to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to this letter, we may have additional comments.
Form 10-K for the Fiscal Year Ended May 28, 2023
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations, page 23
1. Where you describe two
or more business reasons that contributed to a material change in
a financial statement
line item between periods, please quantify, where possible, the extent
to which each factor
contributed to the overall change in that line item, including
any offsetting factors.
In addition, where you identify intermediate causes of changes in
your operating results,
also describe the reasons underlying the intermediate causes. For
example, you disclose
that the changes in gross profit from fiscal year 2022 to fiscal
year 2023 were due
primarily to decreased revenue and an unfavorable sales mix. To the
extent possible,
quantify the impact of each contributing factor in dollars and/or margin
percentage, disclose
the reasons driving these changes, and provide greater transparency
into the material
components and potential variability of your cost of product sales and
gross profit.
John Morberg
FirstName
LIFECORELastNameJohn Morberg
BIOMEDICAL, INC.
Comapany
May NameLIFECORE BIOMEDICAL, INC.
13, 2024
May 13,
Page 2 2024 Page 2
FirstName LastName
Non-GAAP Financial Information and Reconciliations, page 27
2. We note that in your presentation of Consolidated Adjusted EBITDA, you
have
adjustments for the following items:
transition costs from the corporate headquarters relocation and
the transition to
Lifecore Biomedical in FY2023 and FY2022;
consolidating and optimizing or transitioning operations
associated with Project
SWIFT in FY2021 through FY2023;
one-time expenses incurred in the Lifecore production process
in FY2023;
financial advisor and legal fees related to litigation expenses
in FY2022; and
consolidating and transitioning operations associated with the
Curation Foods
business in FY2021.
Please explain to us the nature of each of these costs and tell us why
you believe they do
not represent normal recurring operating expenses. See Question 100.01
of the SEC
Staff s C&DI on Non-GAAP Financial Measures.
In addition, we note your disclosure of historical adjusted EBITDA
margin and forward-
looking adjusted EBITDA and adjusted EBITDA margin in your April 2024
investor
presentation. Please revise your future other public disclosures, such
as investor
presentations, to reconcile any non-GAAP measures to the most
comparable GAAP
measure. Or, alternatively, for forward-looking non-GAAP measures,
disclose that the
reconciliation cannot be provided without unreasonable efforts. See
Rule 100(a) of
Regulation G.
1. Organization, Basis of Presentation, and Summary of Significant Accounting
Policies
Revenue Recognition, page 79
3. We note your disclosure on page 109 that you restated the Lifecore
segment revenues and
cost of sales in FY2022 and FY2021 to gross up revenues and cost of
sales for certain
performance obligations for which the Company acted as a principal in
the arrangements.
Please tell us your considerations of disclosing revenue recognition
policies related to
revenues recognized gross as a principal or net as an agent and the
related disaggregated
revenues.
Related Party Transactions, page 81
4. We note your related party transaction disclosures of sales to Alcon
Research, LLC and
the related accounts receivable. Please identify on the face of your
consolidated balance
sheets, consolidated statements of operations, consolidated statements
of comprehensive
loss, and consolidated statements of cash flows the amounts of all
related party
transactions and balances in future filings pursuant to Rule 4-08(k)
of Regulation S-X.
General
John Morberg
LIFECORE BIOMEDICAL, INC.
May 13, 2024
Page 3
5. We note that you are delinquent in filing your Forms 10-Q for the
quarterly periods ended
August 27, 2023, November 26, 2023, and February 25, 2024. Please file
the required
reports.
In closing, we remind you that the company and its management are
responsible for the
accuracy and adequacy of their disclosures, notwithstanding any review,
comments, action or
absence of action by the staff.
Please contact Stephany Yang at 202-551-3167 or Kevin Woody at
202-551-3629 with
any questions.
FirstName LastNameJohn Morberg Sincerely,
Comapany NameLIFECORE BIOMEDICAL, INC.
Division of
Corporation Finance
May 13, 2024 Page 3 Office of
Manufacturing
FirstName LastName