Landec Corporation Reports Fourth Quarter and Fiscal Year 2008 Results Achieving...

Landec Corporation Reports Fourth Quarter and Fiscal Year 2008 Results Achieving Record Fiscal Year Revenues

MENLO PARK, Calif.--(Business Wire)--
Landec Corporation (Nasdaq:LNDC), today reported record revenues
for fiscal year 2008. Revenues for fiscal year 2008 increased 13% to
$238.5 million compared to revenues of $210.5 million for fiscal year
2007. Net income for the fiscal year 2008 increased 30% to $13.5
million or $0.50 per diluted share compared to net income of $10.4
million for fiscal year 2007, after excluding $18.8 million of
non-recurring operating income in fiscal year 2007, primarily due to
the income from the sale of Fielder's Choice Direct ("FCD") to
Monsanto Company ("Monsanto") during the third quarter of fiscal year
2007 net of operating losses at Landec Ag through the close date. The
30% increase in net income was achieved despite incurring $1.5 million
of non-recurring general and administrative expenses during the fourth
quarter of fiscal year 2008. The reported net income for fiscal year
2007, including the $18.8 million of non-recurring operating income,
was $29.2 million or $1.07 per share. (See "Questions and Answers"
below for information and a reconciliation of key fourth quarter and
fiscal year 2008 and 2007 results.)

"We are very pleased with the progress we made during fiscal year
2008," stated Gary Steele, Chairman and CEO of Landec. "Consistent
with our goals for fiscal year 2008, we grew overall revenues 13%
while overall gross profit increased 18% compared to fiscal year 2007,
resulting in Landec generating $13.5 million of net income and $17.5
million of positive cash flow from operations. We ended the year with
$59 million of cash and marketable securities."

"For fiscal year 2008, each of our businesses recorded increases
in both revenues and gross profit," said Steele. "Apio's value-added
vegetable business recorded an 8% growth in revenues compared to
fiscal year 2007 and the gross margin for fiscal year 2008 was 14.7%
compared to 15.1% last year in spite of increased costs and
competitive pressures. The much smaller and emerging Apio Packaging
business reported a 95% increase in revenues and a 98% increase in
gross profit. The Apio trading business revenues increased 22% during
fiscal year 2008 compared to last year and generated a typical trading
gross margin of 5.7%. Landec's Technology Licensing business reported
a 60% increase in revenues and a 67% increase in gross profit during
fiscal year 2008 compared to fiscal year 2007, due primarily to the
Intellicoat license agreement with Monsanto signed in December 2006."

The increase in continuing net income in fiscal year 2008 to $13.5
million from $10.4 million in fiscal year 2007 was due to several
factors, including: (1) a $1.2 million increase in gross profit in
Apio's value-added vegetable business primarily due to increased
revenues, (2) a $1.6 million increase in gross profit in Apio
Packaging due to an increase in revenues, (3) a $3.2 million increase
in non-food licensing gross profit primarily due to the Intellicoat
license agreement with Monsanto, and (4) a $503,000 increase in net
interest income due to the cash received from the sale of FCD. These
increases in net income were partially offset by a $2.5 million
increase in operating expenses compared to last year that were
primarily incurred during the fourth quarter and an increase in income
taxes of $898,000 during fiscal year 2008 compared to last year.

Revenues for the fourth quarter were $57.3 million versus revenues
of $51.2 million for the fourth quarter of fiscal year 2007. The
Company reported net income for the fourth quarter of $3.4 million or
$0.13 per diluted share compared to net income of $4.4 million or
$0.16 per diluted share for the fourth quarter of last year.

The increase in revenues for the fourth quarter of fiscal year
2008 compared to the same period last year was primarily due to (1) a
$1.4 million increase in revenues from Apio's value-added specialty
packaged vegetable products, (2) a $3.8 million increase in revenues
from Apio's commission trading business due to increased volume sales,
and (3) a $796,000 increase in revenues from Apio Packaging.

The decrease in net income for the fourth quarter of fiscal year
2008 compared to the same period last year was due to a $1.6 million
increase in general and administrative expenses primarily due to
accounting and tax consulting expenses and a $780,000 decrease in
value-added gross profit due primarily to the fourth quarter of fiscal
year 2007 being an unusually good quarter for gross margins. These
decreases were partially offset by a $771,000 increase in gross profit
in Apio Packaging due to an increase in revenues and by a $901,000
decrease in income tax expenses.

Landec Fourth Quarter 2008 Earnings Conference Call

A conference call will follow this release at 8:00 a.m. Pacific
Time on Wednesday, August 6, 2008 during which senior management of
Landec will present an overview of results for the fourth quarter and
fiscal year 2008. Interested parties have the opportunity to listen to
the conference call live on the Internet at www.landec.com on the
Investor Relations web page. A replay of the webcast will be available
for 30 days. Additionally investors can listen to the call by dialing
(866) 238-0826 or (703) 639-1158 at least 5 minutes prior to the
start. A replay of the call will be available through Wednesday,
August 13, 2008 by calling (888) 266-2081 or (703) 925-2533, code
#1262936.

Landec Corporation designs, develops, manufactures and sells
temperature-activated and other specialty polymer products for a
variety of food, agricultural and licensed partner applications. The
Company's temperature-activated polymer products are based on its
proprietary Intelimer(R) polymers which differ from other polymers in
that they can be customized to abruptly change their physical
characteristics when heated or cooled through a pre-set temperature
switch. 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. These risk factors are listed in the
Company's Form 10-K for the fiscal year ended May 27, 2007 (See item
1A: Risk Factors). 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.

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*T
LANDEC CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(In thousands)

May 25, 2008 May 27, 2007
------------ ------------
(unaudited)
ASSETS
--------------------------------------------
Current Assets:
Cash, cash equivalents and marketable
securities $ 59,039 $ 62,556
Accounts receivable, net 19,871 18,185
Inventories, net 7,329 6,800
Notes and advances receivable 501 282
Deferred taxes 2,180 --
Prepaid expenses and other current assets 1,746 1,316
------------ ------------
Total Current Assets 90,666 89,139

Property and equipment, net 21,306 20,270
Intangible assets, net 35,582 29,630
Other assets 3,035 2,329
------------ ------------
Total Assets $ 150,589 $ 141,368
============ ============

LIABILITIES AND SHAREHOLDERS' EQUITY
--------------------------------------------
Current Liabilities:
Accounts payable $ 19,079 $ 13,880
Income taxes payable 185 458
Accrued compensation 2,197 3,126
Other accrued liabilities 2,930 1,340
Deferred revenue 3,613 3,491
------------ ------------
Total Current Liabilities 28,004 22,295

Deferred revenue 5,000 7,000
Deferred taxes 1,569 --
Minority interest 1,550 1,845

Shareholders' Equity
Common stock 112,974 122,278
Retained earnings (deficit) 1,492 (12,050)
------------ ------------
Total Shareholders' Equity 114,466 110,228
------------ ------------
Total Liabilities and Shareholders' Equity $ 150,589 $ 141,368
============ ============
*T

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LANDEC CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(In thousands, except per-share data)
(unaudited)

Three Months Ended Twelve Months Ended
------------------- -------------------
May 25, May 27, May 25, May 27,
2008 2007 2008 2007
--------- --------- --------- ---------
Revenues:
Product sales $ 54,569 $ 48,114 $227,550 $201,892
Services revenues 919 1,038 3,640 3,539
License fees 1,380 1,581 6,231 4,013
Research, development, and
royalty revenues 432 468 1,106 1,054
--------- --------- --------- ---------
Total revenues 57,300 51,201 238,527 210,498

Cost of revenue:
Cost of product sales 46,899 40,968 197,288 175,252
Cost of services revenues 750 770 3,011 2,860
--------- --------- --------- ---------
Total cost of revenue 47,649 41,738 200,299 178,112

Gross profit 9,651 9,463 38,228 32,386

Operating costs and expenses:
Research and development 840 786 3,251 3,074
Selling, general and
administrative 6,193 4,607 19,801 21,616
Income from sale of FCD -- -- -- (22,669)
--------- --------- --------- ---------
Total operating costs and
expenses 7,033 5,393 23,052 2,021
--------- --------- --------- ---------
Operating income 2,618 4,070 15,176 30,365

Interest income 304 870 2,219 1,945
Interest expense (4) (3) (22) (251)
Other expense (90) (159) (477) (414)
--------- --------- --------- ---------
Net income before taxes 2,828 4,778 16,896 31,645
Income tax benefit (expense) 546 (355) (3,354) (2,456)
--------- --------- --------- ---------
Net income $ 3,374 $ 4,423 $ 13,542 $ 29,189
========= ========= ========= =========

Diluted net income per share $ 0.13 $ 0.16 $ 0.50 $ 1.07
========= ========= ========= =========

Shares used in diluted per
share computations 26,827 26,859 26,935 26,558
========= ========= ========= =========
*T

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LANDEC CORPORATION
FISCAL YEAR ENDED MAY 25, 2008
QUESTIONS AND ANSWERS

1. What results account for the change in net income in fiscal year
2008 compared to fiscal year 2007, taking into account the one-
time non-recurring events in fiscal year 2007?

(In Thousands)
--------------
Net income for fiscal year 2007 $ 29,189
Income from sale of FCD in fiscal year 2007 (22,669)
Non recurring losses of Landec Ag in FY 2007 5,814
Insurance settlement in fiscal year 2007 (1,473)
Aesthetic Sciences milestone payment (481)
--------------
Adjusted net income for fiscal year 2007 10,380

Changes in fiscal year 2008 net income relative
to fiscal year 2007:
Increase in operating income at Apio 1,811
Increase in Tech. Licensing operating income 2,852
Increase in G&A expenses at Corporate (915)
Increase in net interest income 503
Increase in income tax expense (898)
Net other (191)
--------------
Net income for fiscal year 2008 $ 13,542
==============

Excluding the non-recurring operating income recognized in fiscal
year 2007, Landec's net income increased 30% in fiscal year 2008
compared to fiscal year 2007.

2. What would Landec's diluted EPS have been in fiscal year 2007 based
on the adjusted net income for fiscal year 2007 as outlined in
Question #1 above?

Diluted EPS as reported for fiscal year 2007 $ 1.07
Income from sale of FCD (0.85)
Non-recurring losses of Landec Ag 0.22
Insurance settlement (0.06)
Aesthetic Sciences milestone payment (0.02)
--------------
Adjusted diluted EPS for fiscal year 2007 $ 0.36
==============
*T

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3. Why were operating expenses higher in the recent fourth quarter
compared to the level of operating expenses in each of the first
three quarters of fiscal year 2008?

During the fourth quarter, we experienced the following non-
recurring G&A expenses:

1) Accounting, legal and consulting fees associated with the
transition from our previous independent registered public
accounting firm, McGladrey & Pullen LLP, including efforts spent
on previously reported accounting questions raised by them.

2) Tax consulting fees associated with determining cumulative R&D
credits, cumulative export product sales tax deductions,
cumulative option expense deductions and the FIN 48 reserve
against our tax positions.

3) A contractual expense related to our agreement with Air Products.

These non-recurring G&A expenses amounted to $1.5 million, or $0.05
per share, and were all recorded during the fourth quarter of
fiscal year 2008.
*T

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4. Why was the effective tax rate for fiscal year 2008 lower than the
Company had estimated during the first three quarters of fiscal
year 2008?

There were two primary drivers that reduced our tax expense which
we could not have accurately estimated earlier in fiscal year
2008:

1) The final R&D credits, the export related tax deductions and the
reversal of our valuation allowance reduced our tax expense for
fiscal year 2008 by approximately $1.3 million and the amount
could not be determined until we had completed the tax work and
the FIN 48 work concerning these items. This work was completed
during our fourth quarter.

2) As a result of the non-recurring G&A expenses outlined in
Question #3 above, and the sizable reduction in our interest
income during our fourth quarter as a result of investing in
high quality, lower-yielding instruments, our pre-tax income
ended up being lower than we had been estimating throughout the
year.

5. What is the status of your accounting issues?

We have reviewed the issues raised by our previous independent
registered public accounting firm and we have confirmed in our own
review, in reviews with Ernst & Young LLP and in reviews with a
nationally recognized third party expert that our accounting for
the Monsanto transaction and the repurchase of subsidiary stock
and options not owned by Landec is reasonable and in accordance
with generally accepted accounting principles. Accordingly, we
plan to complete the audit for our 2008 financials and file our
Form 10-K with the SEC in a timely manner.

6. What are the Company's expectations for fiscal year 2009?

Our goal is to grow revenues by 10% in fiscal year 2009 and grow
pre-tax income 15% to 20% compared to fiscal year 2008.

Net income is projected to decrease 5% to 10% because our effective
tax rate is projected to double from 20% in fiscal year 2008 to
40% in fiscal year 2009. This increase in our effective tax rate
will result in an increase in our book income tax expense of
approximately $4.4 million to $4.8 million or $0.16 to $0.18 per
share in fiscal year 2009. However, because of substantial net
operating losses and tax credits for cash tax purposes, we are
estimating that Landec will only be paying 10% of our book income
tax expense in cash for fiscal year 2009 resulting in the
preservation of cash and a favorable impact on our cash balance.

The revenue and pre-tax income goals include continued growth at
Apio as well as significant advances that we expect in most, if
not all, of our licensed partner arrangements with Monsanto,
Chiquita, Seminis, Air Products, Nitta and Aesthetic Sciences.
These goals could be adversely affected by a further downturn in
the economy and corresponding consumer demand, as well as further
increases in raw materials and fuel costs.
*T

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7. What are the growth opportunities and challenges Landec will likely
face in fiscal year 2009?

Landec's growth opportunities
--------------------------------------------------------------------

a) Increase Apio's value-added revenues by 10% from customer
expansion and new product introductions while managing gross
margins pressures.

b) Increase the sale of our BreatheWay(R) packaging by (i)
continuing to work closely with Chiquita on bananas and
avocados, and (ii) commercializing new uses of Apio's BreatheWay
packaging technology with Chiquita or other partners.

c) Continue to work closely with Air Products to expand the use of
our Intelimer(R) polymer technology in the personal care and
catalyst fields.

d) Advance our Intellicoat(R) seed coating technology program with
Monsanto in its newly formed Seed Treatment business.

e) Continue to explore further licensing and partnering
collaborative agreements for our Intelimer temperature-activated
polymer technology.

f) Begin our collaboration with Monsanto's Seminis Vegetable Seed
business with the goal of identifying initial product targets,
performing field trials and planning for initial commercial
launch beginning in late fiscal year 2009.

Landec's challenges and risks
--------------------------------------------------------------------

a) Raw material costs for produce, materials and freight are
expected to increase in fiscal year 2009 compared to fiscal year
2008 primarily due to increased energy costs which means we need
to selectively increase prices where we can and continue to
improve operating efficiencies in order to minimize the impact
on gross margins.

b) Market share growth in our value-added vegetable business,
particularly in our tray line, will continue to be difficult
since we are the market share leader in vegetable trays. In
addition, consumers may view tray purchases as more
discretionary purchases during a slow economy.

c) Contractual minimums in our banana and avocado programs with
Chiquita will decrease from $2.9 million in fiscal year 2008 to
$2.2 million in fiscal year 2009. To exceed minimums in fiscal
year 2009, we would need (i) the Chiquita-To-Go program for food
service and Quick Serve Restaurants ("QSR") customers to rapidly
expand, (ii) the market trials for the retail grocery store
program to be completed, and (iii) an initial commercial launch
of the retail grocery store program to start by fiscal year end
2009. For planning purposes, we are assuming only minimums will
be achieved in fiscal year 2009.
*T

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8. Is Chiquita making progress with Landec's BreatheWay packaging
program?

Yes. In January we were somewhat concerned after Chiquita announced
a significant reorganization and layoff of personnel, some of whom
were involved in our collaboration. Excellent people are now in
place at Chiquita and are making our joint programs a high
priority. Our program is progressing well on four fronts:

a) In the Chiquita-To-Go program, Chiquita bananas in our packaging
are being sold to coffee chains, convenience stores and mini-
mart gas stations. Chiquita is a major supplier of bananas to
Starbucks who has recently begun to roll out its new Vivanno(TM)
banana smoothie program throughout the United States. In
addition, the Chiquita-To-Go program has been launched in three
European countries.

b) In the QSR arena, McDonald's has initiated regional market tests
for banana products, including banana smoothies, using
Chiquita(R) bananas delivered in Landec's BreatheWay packaging.
We are quite enthusiastic about the expansion into QSRs and we
will provide more information about this new expansion during
fiscal year 2009.

c) Retail grocery store advanced trials are scheduled to begin this
fall with the goal of measuring and testing consumer demand,
price points, package size, configuration and merchandising
approaches. This program is several quarters later than we had
originally expected but is now progressing with high priority.

d) In our avocado program with Chiquita, Chiquita is beginning to
sell avocadoes packaged in our BreatheWay packaging technology
to food service customers and Chiquita is developing a retail
grocery store application for which trials should begin before
the end of this calendar year.
*T

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9. What are the longer-term revenue growth prospects for Apio's food
business?

We have concerns about the U.S. economy and rising consumer
expenditures for non-food items. We believe these trends could
adversely impact the growth of the fresh-cut vegetable category
which has historically grown over 10% per year on average. Even
with the economic pressures, we believe we have a 10% per year
growth opportunity in our fresh-cut vegetable business by
capturing new customers and expanding our BreatheWay technology to
new markets and application areas.

Our longer-term growth plans for our food technology business
include five major initiatives:

a) Access unique produce with consumer traits that bring discernible
differentiation in nutrition, taste, color, aroma and/or
texture. We will do this through our new exclusive licensing
arrangement announced in June with Monsanto Seminis, the world's
largest vegetable seed trait developer and supplier. We expect
initial field trials to begin this fall.

b) Expand the use of our BreatheWay technology internationally. We
recently announced a new distribution agreement in June for our
packaging technology for South America.

c) Develop and launch new, innovatively designed products such as
those we are developing in our vegetable salad line.

d) Expand our BreatheWay technology in new markets in North America
such as food service and delis. Our Apio food business now has
these efforts underway using our BreatheWay packaging
technology.

e) Look for synergistic acquisition partners that can benefit from
our BreatheWay technology and channels of distribution, as well
as from our expertise in post harvest physiology, sourcing, and
processing.

In summary, we have a plan in place for continuing to profitably
grow our specialty packaged fresh-cut value-added business.
*T

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10. What are Landec's corporate priorities for the next several years?

We have five priorities: (1) continue to grow revenues, pre-tax
profits and free cash flow, (2) extend the commercialization of
our BreatheWay packaging programs in bananas, avocados and new
applications, (3) provide strong technology support to our
licensing corporate partners in launching new products, (4) seek
synergistic acquisition opportunities that use our technology or
expand our technology base, and (5) expand our Intelimer(R)
polymer materials R&D activities in order to develop new business
opportunities.

11. What is happening in the Monsanto licensing program?

Until recently, Monsanto has purchased all of its seed treatments
from outside suppliers. Monsanto announced several months ago
that it has formed a new business called the Seed Treatment
Business which will allow Monsanto to develop its seed treatment
requirements internally. As a reminder, Monsanto has over a 30%
market share in corn, soybeans and cotton and is also a major
player in canola and vegetable seeds.

The concept of seed treatments is to place an insecticide or
fungicide directly onto the seed surface in order to protect the
seed and the seedling as it emerges. It is our hope that Landec's
Intellicoat seed coating technology can be an integral and
proprietary part of Monsanto's commitment to building a major
position in seed treatments worldwide by using Landec's seed
coatings as a "carrier" of insecticides/fungicides which can be
dispensed at the appropriate time based on time or soil
temperature. We are excited about this program and in fiscal year
2009 we will be focused on validating the use of Landec's coating
technology for these applications.

12. What is happening with Air Products?

The progress has been slow in the first two years, but momentum is
now building as new product applications and formulations are
emerging from the laboratory. Landec and Air Products have agreed
to focus on two areas -- personal care and catalysts.
Accordingly, Air Products and Landec have negotiated the return
of two formerly licensed fields -- coatings and electronic
material applications. We are hopeful that with Air Products we
can continue to expand our relationships with key customers this
year, such as L'Oreal in personal care and Akzo Nobel in
catalysts.
*T

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13. What are your expectations for the Seminis collaboration?

As part of the agreement, Apio and Seminis will work together to
identify and develop unique varieties of broccoli and cauliflower
for the North American market for use in Apio's proprietary
value-added packaged bags and trays for retail grocery chains,
club stores and the foodservice industry. The companies will
focus on developing and commercializing broccoli and cauliflower
varieties that possess unique, desirable consumer traits such as
improved nutrition, flavor, color, texture, taste, and/or aroma
to improve the value of these vegetable offerings in Apio's
products.

Seminis will apply its expertise to breed broccoli and cauliflower
qualities using proven techniques that improve the speed and
accuracy of new and beneficial trait identification and
selection. For its part, Apio will apply its expertise in
sourcing, manufacturing, packaging and marketing of vegetable
products to provide definition and guidance of market needs,
packaging solutions and commercialization strategies for these
novel consumer trait products. All products that reach
commercialization will be packaged using Apio's proprietary
Intelimer BreatheWay packaging. We believe this collaboration
further supports our position in the marketplace as the
technology and innovation leader in fresh-cut vegetable products.

14. What progress is Aesthetic Sciences making with the use of
Landec's technology in dermal fillers?

Aesthetic Sciences is making good progress and has demonstrated
safety in initial clinical studies for products in which Landec's
polymer materials would be used as dermal fillers for the rapidly
growing facial cosmetics market. Aesthetic Sciences plans to
start human clinical trials next quarter for testing its dermal
filler materials using Landec's polymer technology. Landec
expects to benefit in the future from the agreement with
Aesthetic Sciences by receiving royalties on the sale of products
using Landec's technology as well as from being a 19.9% owner of
Aesthetic Sciences' stock.

15. What is Landec doing in research outside of its partnership
collaborations?

In addition to supporting our existing license partners, we are
examining several areas to broaden applications for our Intelimer
polymer technology. For example, we have been studying how our
technology can selectively dispense (both large and small
molecule) active ingredients either evenly over time or
"triggered" by rapid release of active ingredients with changes
in temperature, moisture and pH. We are filing numerous patent
applications to extend our patent estate in this area. We believe
there is a large formulation potential for this technology in the
pharmaceutical industry which is looking for new ways to extend
patent life for existing drugs and novel ways to deliver new
drugs. In addition, with the return of the coatings and
electronics fields of use for our technology from Air Products,
we will be exploring potential uses for Intelimer polymers in
these application areas as well.
*T

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16. How do the pre-tax results by line of business for the three and
twelve months ended May 25, 2008 compare with the same periods
last year, excluding the fiscal year 2007 activity for Landec Ag
through December 1, 2006 and excluding the non-recurring
insurance settlement and milestone payment in fiscal year 2007
(see Question #1 above for the details)?

The results are as follows (unaudited and in thousands):
Revenues: Three Three Twelve Twelve
months months months months
ended ended ended ended
5/25/08 5/27/07 5/25/08 5/27/07
-------- -------- --------- ---------
Apio Value Added(a) $42,270 $40,847 $167,817 $154,744
Apio Packaging (b) 1,174 378 3,377 1,730
-------- -------- --------- ---------
Technology Subtotal 43,444 41,225 171,194 156,474
Apio Trading (c) 12,135 8,317 60,414 49,706
-------- -------- --------- ---------
Total Apio 55,579 49,542 231,608 206,180
Tech. Licensing (d) 1,721 1,659 6,919 3,706
-------- -------- --------- ---------
Total Revenues 57,300 51,201 238,527 209,886

Gross Profit:
Apio Value Added 6,049 6,829 24,615 23,426
Apio Packaging 1,129 358 3,245 1,639
-------- -------- --------- ---------
Technology Subtotal 7,178 7,187 27,860 25,065
Apio Trading 752 617 3,449 3,187
-------- -------- --------- ---------
Total Apio 7,930 7,804 31,309 28,252
Tech. Licensing 1,721 1,659 6,919 3,706
-------- -------- --------- ---------
Total Gross Profit 9,651 9,463 38,228 31,958

R&D:
Apio 343 361 1,251 1,169
Tech. Licensing 497 425 2,000 1,639
-------- -------- --------- ---------
Total R&D 840 786 3,251 2,808

S,G&A:
Apio 3,408 3,304 13,831 12,667
Corporate 2,785 1,303 5,970 5,055
-------- -------- --------- ---------
Total S,G&A 6,193 4,607 19,801 17,722

Other (e):
Apio 19 85 23 260
Corporate 191 623 1,697 1,148
-------- -------- --------- ---------
Total Other 210 708 1,720 1,408

Net Income (Loss) Before
Taxes:
Apio 4,198 4,224 16,250 14,676
Tech. Licensing 1,224 1,234 4,919 2,067
Corporate (2,594) (680) (4,273) (3,907)
-------- -------- --------- ---------
Net Income Before
Taxes $ 2,828 $ 4,778 $ 16,896 $ 12,836
======== ======== ========= =========

a) Apio's value-added business includes revenues and gross profit
from Apio Cooling LP.
b) Apio Packaging includes the BreatheWay trademark for banana
packaging, packaging technology for other shelf life sensitive
vegetables and fruit, plus other unique packaging solutions.
c) Apio's trading business includes its commission-based commodity
export business and its commission-based domestic commodity
buy/sell business.
d) Included in Tech. Licensing are the Intellicoat license fees
from Monsanto.
e) Included in Other are net interest income and non-operating
income/(expense).
*T

Non-GAAP Financial Information

This press release contains non-GAAP financial information
relating to net income and EPS. Included in the Question and Answer
section (Questions #1, #2, #3 and #16) of this release are
reconciliations of these non-GAAP financial measures to the most
directly comparable financial measure calculated in accordance with
generally accepted accounting principles in the U.S. (GAAP).

Management believes that these non-GAAP financial measures provide
useful additional information to investors about current trends in the
Company's operations and are useful for period over period comparisons
of operations. These non-GAAP financial measures should not be
considered in isolation or as a substitute for the comparable GAAP
measures. In addition, these non-GAAP measures may not be the same as
similar measures provided by other companies due to potential
differences in methods of calculation and items being excluded. They
should only be read in connection with the Company's condensed
consolidated statements of earnings presented in accordance with GAAP.

Landec Corporation
Gregory S. Skinner, 650-261-3677
Vice President Finance and CFO
or
EAS & Associates
Liz Saghi, 805-967-0161

Copyright Business Wire 2008