Lifecore Biomedical, Inc. (LFCR) Earnings Call Transcript & Summary

Ladies and gentlemen, thank you for standing by, and welcome to the Landec Corporation 2020 Annual Meeting of Stockholders. I would now like to hand the conference over to your Chairman of the Board, Mr. Andrew Powell. Sir, please go ahead.

Good afternoon, everyone. Welcome to the 2020 Annual Meeting of Stockholders of Landec Corporation. I'm Andrew Powell, Landec's Chairman of the Board. As previously announced, we're holding our Annual Meeting virtually this year due to the public health risks related to COVID-19. This format allows us to help protect the health and safety of our stockholders, our employees, our officers and directors as we respond to the challenges of the pandemic, and we appreciate your support in that effort. Landec's President and CEO, Al Bolles, will act as Chairperson for this meeting. Broadridge Financial Solutions will act as tabulator and certify the election results. And I've been advised by Broadridge that a quorum is present, so this meeting is now officially called to order. If you encounter any technical difficulties accessing or participating in the meeting, please refer to the support link on the Annual Meeting web page or call 1 (800)-586-1548 and you'll reach a support team. Upon your joining the meeting electronically, an agenda for the meeting should have become available on your screen. At the bottom of the screen, the list of the rules of conduct for the meeting should be available. In order to conduct an orderly meeting, we ask that participants please abide by these rules, and we appreciate your cooperation. Before we begin with the formalities of the Annual Meeting, I'd like to take a moment to introduce the other members of the company's Board of Directors, including our retiring director and certain members of our senior management team who are also present in attendance online today. First, the directors. We have Craig A. Barbarosh, Al Bolles, Deborah Carosella. Katrina Houde, Charles Macaluso, Nelson Obus, Tonia Pankopf, Catherine Sohn and of course, myself. I'd also like to take this moment to acknowledge Frederick Frank, our retiring director, who has served on our Board for 21 years. On behalf of all of our shareholders and the Board, we'd like to thank Fred for his many years of dedicated service to Landec. It's been a pleasure to serve with you, Fred. Also attending online today are Brian McLaughlin, our Chief Financial Officer; Aaron Perlitsh, our Director of Internal Audit; Dawn Kimball, our Senior Vice President and Chief People Officer; and Lisa Shanower, our Vice President of Corporate Communications and Sustainability for Curation Foods. I'd also like to introduce Cary Hyden, our outside counsel from Latham & Watkins, who has been appointed secretary of the meeting and will record the minutes of the meeting. I'll now turn over to Al to introduce the formal business of today's meeting.

Thank you, Andrew. Good afternoon, ladies and gentlemen. I am Al Bolles, President and CEO of Landec Corporation, and it is a pleasure to welcome you to Landec Corporation's 2020 Annual Meeting of Stockholders. On behalf of the entire Board, our officers and employees, I would like to thank you for attending this meeting. Please also note that this meeting is being recorded. However, no one attending via the webcast is permitted to use any recording device. We will now conduct the formal business of this Annual Meeting, as set forth in the notice of meeting and proxy statement, which was mailed on September 9, 2020 to all stockholders entitled to vote at this meeting. The 4 proposals to be voted on at this meeting are listed in our proxy statement. Landec's stockholders as of the record date of August 17, 2020 were sent notice of the 2020 Annual Meeting, along with a proxy statement and form a proxy solicited by the Board. The notice of Annual Meeting also stated the date, time and meeting purpose, along with the web address for participating in today's meeting via live audio webcast. A copy of the notice of Annual Meeting, proxy statement and form of proxy as well as an affidavit of distribution of Broadridge Financial Solutions shall be made a part of the record of this meeting. We will vote after all 4 proposals have been presented. Any stockholders who have joined the meeting via the live audio webcast and who have not already submitted a proxy and wish to vote their shares, may do so after all items have been presented by clicking on the vote here button on their screen. After the polls are closed, the preliminary voting results will be announced. We will then close the meeting and answer your questions. [Operator Instructions] Aaron Perlitsh, Landec Director of Audit, will now review the management proposals.

Thank you, Al. The first proposal to be considered is the election of directors. Each Class 1 director, if elected, will be elected for a 2-year term. A Class 2 director, if elected, will be elected to serve a 1-year term. Each director is elected by a majority of the votes cast with respect to such director. For Class 1, the nominated candidates for director are Katrina Houde, Nelson Obus, Andrew Powell, Catherine Sohn, Jeffrey Edwards and Patrick Walsh. For Class 2, the nominated candidate for director is Joshua Schechter. In the event that proposal 2 is not approved by the company's stockholders, any votes to elect Mr. Walsh and Mr. Schechter will be disregarded. The Board unanimously recommends that you vote for the election of each of the 7 named director nominees. The second proposal to be considered is the amendment and restatement of the company's bylaws to increase the maximum size of the Board from 10 to 12 directors. If approved by the company's stockholders, proposal 2 would allow the Board to expand its size to 12 directors and provide for 6 Class 1 directors and 6 Class 2 directors. Thus, enabling stockholders to vote for Mr. Walsh and Mr. Schechter under proposal 1. This proposal must be approved by the affirmative vote of at least a majority of the voting power of all outstanding shares of voting stock of the company entitled to vote. The Board unanimously recommends that you vote for this proposal. The third proposal to be considered is the ratification of the appointment of Ernst & Young as the company's independent registered public accounting firm for the fiscal year ending May 31, 2021. This proposal must be approved by a majority of the shares present and voted on the proposal. The Board unanimously recommends that you vote for this proposal. The fourth proposal to be considered is the nonbinding advisory vote on the executive compensation of the company's named executive officers as described in the proxy statement. This vote, which is often called a say on pay vote is required under the Dodd-Frank Act. While the vote on this resolution is advisory, and therefore not binding on us, the Board values thoughtful input from stockholders and will consider the outcome of the vote on this resolution when considering future executive compensation decisions. This advisory proposal will be approved if a majority of the shares present and voted on the proposal are voted in favor of the resolution. The Board unanimously recommends that you vote for this proposal. Are there any questions on any of the 4 proposals to be considered at this meeting? The time is now 12:40, and the polls are now open. Stockholders who have voted by proxy need not vote again unless they wish to change their vote. If you have not already voted or you wish to change your vote, you may do so by clicking on the voting button on the web portal and following the instructions there. [Voting]

The time is now 12:41 and the polls are now closed. I would like to remind you that some of the statements made today may be considered forward-looking. The company cautions investors that results of future operations may differ from those anticipated. We urge you to review the cautionary statements and other information contained in the company's filings with the Securities and Exchange Commission, including our annual report on Form 10-K for fiscal year 2020 and in our quarterly report on Form 10-Q for the first quarter of fiscal year 2021, which identify certain factors that could cause actual results to differ materially from those projected in any forward-looking statements made during this meeting. Copies of the Form 10-K, Form 10-Q and other filings are available through the company or online. Broadridge has informed me that based on preliminary voting results, there are sufficient votes in favor of the named nominees for director to elect all the nominees; in favor of the bylaw amendment to increase the maximum size of the Board to 12 directors; in favor of ratifying the selection of Ernst & Young as the company's independent registered public accounting firm for fiscal year 2021; and in favor of the compensation of the named executive officers set forth in the proxy statement. I hereby declare that Katrina Houde, Catherine Sohn, Nelson Obus, Andrew Powell, Jeffrey Edwards, Patrick Walsh and Joshua Schechter have been elected; that the bylaw amendment proposal and the ratification of the selection of Ernst & Young have been approved; and that the compensation for the named executive officers has been approved on a nonbinding advisory basis. Broadridge will prepare a final report certifying the election results that will be included as part of the record of this meeting. The final voting results will be included in the company's current report on Form 8-K to be filed with the Securities and Exchange Commission within 4 business days following this meeting. I'll turn it back over to Al.

We have no other business to conduct at this meeting. The meeting is now closed. We'd like to allow time for questions. We will take stockholders' questions that are being entered today on the web portal. Please note, we will attempt to answer as many questions as time allows, but only questions that are germane to the meeting will be addressed. [Operator Instructions] Could we please have the first submitted question? There are no questions. We have now concluded the question-and-answer session. I would like to thank you all for attending this year's Annual Meeting of the stockholders. We hope you share our excitement about Landec, and look forward to seeing you again next year.