Lifecore Biomedical — Third Quarter 2026 Earnings Summary

Financial Performance:

• Third quarter 2026 revenues were $25.3 million, a decrease of 18.6% ($5.8 million) compared to $31.1 million in the prior year quarter; nine-month revenues were $82.7 million, a decrease of 21.8% ($23.0 million) compared to $105.7 million in the prior year period.
• CDMO segment revenue declined 18% in the quarter to $17.8 million and 29% for the nine months to $49.1 million; HA manufacturing revenue declined 19% in the quarter to $7.5 million and 8% for the nine months to $33.6 million.
• Gross profit for the quarter was $6.8 million (27.0% margin), down from $7.8 million (25.0% margin) in the prior year quarter; nine-month gross profit was $23.4 million (28.3% margin), down from $34.7 million (32.8% margin) in the prior year period.
• Operating expenses decreased 28.9% in the quarter to $7.7 million and 27.5% for the nine months to $26.4 million, driven by reductions in R&D and SG&A.
• Net loss for the quarter was $40.1 million ($1.08 per diluted share), widening from $10.0 million ($0.29 per diluted share) in the prior year quarter; nine-month net loss was $61.2 million ($1.70 per diluted share), widening from $20.9 million ($0.64 per diluted share) in the prior year period.
• Adjusted EBITDA for the quarter was $4.0 million, an increase of $1.0 million from $3.1 million in the prior year quarter; nine-month Adjusted EBITDA was $13.6 million, a decrease of $7.4 million from $21.1 million in the prior year period.
• Cash from operations for the nine months was $9.5 million, resulting in free cash flow of $6.9 million.
• The company ended the quarter with approximately $38.0 million in liquidity, comprising $23.0 million in cash and $15.0 million in revolving credit availability.
• Total liabilities increased to $250.6 million as of September 30, 2026, from $198.1 million at December 31, 2025, driven by an increase in related party debt and debt derivative liabilities.

Business Segments and Product Lines:

• Secured two new technology transfer projects in the third quarter: one supporting process performance qualification (PPQ) batches for a biotech company's new drug application (NDA) for a new chemical entity, and another supporting a currently marketed product for a large pharmaceutical company.
• Secured three new development-phase programs early in the fourth quarter, including one Phase 2 product with a top-20 global pharmaceutical company and two Phase 3 products with two biotech companies.
• Lifecore operates as a fully integrated CDMO offering development and fill/finish of sterile injectable products in syringes, vials, and cartridges, including complex formulations, and is a leading manufacturer of injectable-grade hyaluronic acid.

Management Commentary and Tone:

• CEO Paul Josephs stated that the new programs will add to the company's high-value pipeline and are expected to contribute to long-term revenue growth objectives beginning in 2027.
• Management highlighted that early fourth-quarter wins include partnerships with a top-20 global pharmaceutical company and two biotech companies.

Other Key Points:

• The press release references a proposed merger pursuant to an Agreement and Plan of Merger dated September 27, 2026, among Lifecore, Lifecore Inc., and Hazel Merger Sub, Inc., noting risks regarding transaction completion, termination fees, and potential impacts on personnel and customer relationships.
• The company has 50,187 shares of Series A Convertible Preferred Stock issued and outstanding with a redemption value of $51.1 million as of September 30, 2026.
• Preferred stock dividends for the nine months ended September 30, 2026, were $2.8 million, compared to $2.6 million in the prior year period.
• A restructuring recovery of $2.9 million was recorded in the nine-month 2025 period, while no restructuring costs or recoveries were recorded in the 2026 periods.
• A loss on sale or disposal of assets of $6.9 million was recorded in the nine-month 2025 period, with no such loss recorded in 2026.
• The change in fair value of debt derivative liability related party was a significant non-cash expense of $31.3 million in the quarter and $35.6 million for the nine months of 2026.