Lifecore Biomedical Inc (LFCR) 2023 Q1 法說會逐字稿

Good morning, and thank you for joining Landec's Fiscal 2023 First Quarter Earnings Call. (Operator Instructions) Now I would like to turn the call over to Jeff Sonnek Investor Relations of ICR. Thank you. Please go ahead.

早安，感謝您參加 Landec 2023 財年第一季財報電話會議。 （接線員指示）現在，我想將電話轉給 ICR 投資者關係部門的 Jeff Sonnek。謝謝。請繼續。

Good morning, and thank you for joining us today to discuss Landec Corporation's First Quarter Fiscal 2023 Earnings Results. On the call today from the company are Jim Hall, Chief Executive Officer and President of Lifecore; and John Morberg, Chief Financial Officer. Before we begin today, you should have received a copy of our earnings release, which is also available on the company's website, where we also post our investors presentation. In addition, we'd like to remind everyone of the safe harbor statement.

早安，感謝您今天加入我們，討論 Landec Corporation 2023 財年第一季的獲利結果。今天公司電話會議的嘉賓包括 Lifecore 執行長兼總裁 Jim Hall 和財務長 John Morberg。在今天開始之前，您應該已經收到一份我們的獲利報告，該報告也可在公司網站上獲取，我們也在網站上發布了投資者簡報。此外，我們想提醒大家注意安全港聲明。

Certain statements made in the course of this conference call contain forward-looking statements. It is important to note that the company's actual results could differ materially from those projected in such forward-looking statements. Additional all information concerning risk factors that could cause actual results to differ materially from those in the forward-looking statements is contained from time to time in the company's filings with the SEC, including, but not limited to, the company's Form 10-K for fiscal year 2022. Copies of those filings may be obtained from the company's website.

本次電話會議中的某些陳述包含前瞻性陳述。值得注意的是，公司的實際表現可能與此類前瞻性陳述中的預測有重大差異。所有可能導致實際績效與前瞻性陳述中所述結果有重大差異的風險因素的補充資訊均包含在本公司不時向美國證券交易委員會 (SEC) 提交的文件中，包括但不限於本公司 2022 財年的 10-K 表格。這些文件的副本可從公司網站取得。

And with that, I'd like to turn the call over to Jim Hall, Chief Executive Officer.

接下來，我想將電話轉給執行長吉姆霍爾 (Jim Hall)。

Thank you, Jeff. Good morning, everyone, and thank you for joining us. I'll begin today with a brief update on our strategic initiative that we unveiled just 8 weeks ago to transform the focus of the company to a stand-alone Lifecore business. In terms of the formal timing of the transition to the Lifecore corporate branding and ticker switch, we are working through those legal processes and are targeting November for the formal change. When we have a greater precision, we will be sure to update the market accordingly so everyone is prepared.

謝謝傑夫。大家早安，感謝你們的參與。今天，我將簡要介紹我們八週前剛剛公佈的策略舉措，旨在將公司業務重心轉變為獨立的Lifecore業務。關於正式過渡到Lifecore品牌和股票代碼的時間，我們正在辦理相關法律手續，並計劃在11月進行正式變更。當我們獲得更準確的資訊後，我們一定會及時向市場通報，以便大家做好準備。

With respect to our efforts to monetize the remaining Curation Foods assets, those activities are well underway. However, we are not in a position yet to communicate any potential outcomes. That said, I want to continue to emphasize the importance of this work by our team and our commitment to getting this done as soon as possible.

關於我們將剩餘 Curation Foods 資產變現的努力，這些活動正在順利進行中。然而，我們目前尚無法透露任何可能的結果。即便如此，我仍想繼續強調我們團隊這項工作的重要性，以及我們致力於盡快完成這項工作的承諾。

With that, I'll provide a summary of Lifecore's fiscal '23 first quarter performance, provide some additional updates on our business and commercial efforts and then pass the call to John to discuss the financials and the fiscal '23 outlook, which we are reiterating today.

有了這些，我將提供 Lifecore 23 財年第一季業績的摘要，提供有關我們的業務和商業努力的一些額外更新，然後將電話轉給約翰討論財務狀況和 23 財年展望，我們今天重申這一點。

In the fiscal '23 first quarter, Lifecore grew revenue by 8% to $23.7 million, generating an increase of 8.1%, and adjusted EBITDA to $2.5 million, both of which were consistent with our plan and the cadence that we disclosed at the beginning of the fiscal year. As a reminder, the first quarter is our seasonally lowest quarter of the year in terms of revenues and EBITDA due to the idling of our manufacturing lines for annual required clean room certification and facility maintenance.

2023財年第一季，Lifecore營收成長8%，達到2,370萬美元，增幅達8.1%，調整後息稅折舊攤提前利潤（EBITDA）達到250萬美元，皆符合我們在本財年年初揭露的計畫與節奏。需要提醒的是，由於我們的生產線因年度潔淨室認證和設施維護而暫停運營，第一季是我們收入和EBITDA同比下降的季度。

Nonetheless, we're off to a solid start for the year and remain excited about the business development activity that we are generating, which I'll cover in a moment.

儘管如此，我們今年已經有了一個良好的開端，並且對我們正在進行的業務發展活動感到興奮，我稍後會介紹。

Our business remains very well positioned as a fully integrated CDMO, with highly differentiated capabilities for the development, fill and finish of complex sterile, injectable-grade pharmaceutical products. These technical capabilities have been honed from our more than 40 years of experience in building a premier pharmaceutical injectable grade hyaluronic acid manufacturing platform with a focus on complex and highly regulated products.

作為一家完全整合的CDMO，我們始終保持著極佳的市場地位，在開發、填充和完成複雜的無菌注射級藥品方面擁有高度差異化的能力。這些技術能力源自於我們40多年來專注於打造一流的注射級透明質酸藥用生產平台的經驗，該平台專注於複雜且受到嚴格監管的產品。

Our unique expertise, coupled with the ongoing industry trends towards outsourcing of new drug development means Lifecore is ideally positioned as a preferred partner to provide CDMO services for new injectable drug applications. In fact, Lifecore is the only manufacturer of pharmaceutical injectable-grade HA, with injectable CDMO expertise in the market today. Approximately 55% of all new drug applications are injectables and prefilled syringe demand is growing at an estimated 13% compound annual rate.

我們獨特的專業知識，加上業界新藥開發外包的持續趨勢，使 Lifecore 成為理想的首選合作夥伴，為新型注射應用提供 CDMO 服務。事實上，Lifecore 是目前市面上唯一擁有註射劑 CDMO 專業經驗的藥用注射級 HA 製造商。所有新藥申請中約有 55% 是注射劑，預充式註射器的需求預計將以 13% 的複合年增長率成長。

Given the industry's limited injectable drug manufacturing capacity, we will continue to take full advantage of this incredible opportunity and deliver much-needed capacity that we've been investing in during the past few years.

鑑於該行業注射藥物製造能力有限，我們將繼續充分利用這一難得的機會，並提供我們在過去幾年中一直投資的急需的產能。

On the development front, our project portfolio remains robust, with 24 active projects from 21 different customers. These 24 projects are dispersed across various stages of our portfolio as follows: early phase clinical development with 5 projects, Phase I and II clinical development with 11 projects, and Phase III clinical development and scale up commercial validation activity with 8 projects. We continue to work closely with all of our customers in progressing their products through the various stages of development and eventual FDA approval.

在開發方面，我們的專案組合依然強勁，目前有來自21家不同客戶的24個在研專案。這24個計畫分佈在我們計畫組合的不同階段，具體如下：早期臨床開發計畫5個，I期和II期臨床開發計畫11個，III期臨床開發及商業化規模驗證計畫8個。我們將繼續與所有客戶緊密合作，推動他們的產品順利完成各個開發階段，並最終獲得FDA批准。

These efforts are now paying off. Three of the late-phase projects are nearing FDA approval, one is a drug with a PDUFA date before the end of calendar 2022, and the other 2 are medical device programs, both of which have anticipated approvals within this calendar year. As I mentioned last quarter, we are preparing for preapproval inspections to support these projects and are working closely with these customers to support their product launch plans. As it pertains to the forecasted value of the projects in our active portfolio, we currently believe the revenue potential from the development activity is in the range of $50 million to $80 million in development revenue over the life cycle of the projects, which we expect will continue to grow as we expand our active development project portfolio.

這些努力如今已初見成效。其中三個後期項目即將獲得FDA批准，一個藥物的PDUFA日期在2022年底之前，另外兩個是醫療器材項目，預計都將在今年內獲得批准。正如我上個季度提到的，我們正在準備批准前檢查以支援這些項目，並與這些客戶密切合作，以支持他們的產品上市計劃。就我們活躍投資組合中項目的預測價值而言，我們目前認為，在專案生命週期內，開發活動的潛在收入在5000萬美元至8000萬美元之間，我們預計，隨著我們活躍開發項目組合的擴大，這一收入將繼續增長。

Looking at the potential commercial value for the 8 late-stage projects in our active portfolio, we believe that the commercial revenue opportunity is in the range of $45 million to $120 million annually as these products receive FDA approval and are successfully transferred to contracted commercial supply agreements. CDMO activities represented nearly 80% of our revenue mix this past fiscal year 2022, with the balance of our revenue generated from HA raw material sales. HA remains a critical component of our business and is the foundation by which we've developed our CDMO expertise in complex and highly viscous products over the past 40 years. Approximately 50% of the revenue produced in our CDMO business is generated from products utilizing HA, and within our current active project portfolio, that mix is approximately 70%. HA is viewed as an ideal excipient for injectable therapies and that it is a naturally occurring substance in the human body and its highly viscous characteristics allow for optimized targeted drug development. Thus, we continue to see a meaningful activity among the biopharma community in utilizing HA, and nearly 40% of our prospective project opportunities are utilizing HA, which is a good segue to updating you on our commercial strategy to convert new potential engagements.

縱觀我們活躍投資組合中8個後期項目的潛在商業價值，我們認為，隨著這些產品獲得FDA批准並成功轉入已簽訂的商業供應協議，其商業收入機會每年將在4500萬美元至1.2億美元之間。 CDMO業務在2022財年的營收組成中佔近80%，其餘收入來自HA原料銷售。 HA仍然是我們業務的重要組成部分，也是我們在過去40年中發展複雜高黏度產品CDMO專業知識的基礎。我們CDMO業務約50%的收入來自使用HA的產品，在我們目前活躍的專案組合中，這一比例約為70%。 HA被視為注射療法的理想輔料，它是人體中天然存在的物質，其高黏度特性有助於優化標靶藥物開發。因此，我們繼續看到生物製藥界在利用 HA 方面進行有意義的活動，並且我們近 40% 的潛在專案機會都在利用 HA，這是一個很好的過渡，可以向您介紹我們轉換新潛在合作的商業策略。

We now have the complete team in place that we set out to establish from our investments in people that we announced last year. Our team is doing an impressive job ramping up our commercial presence in the market, and we are seeing immediate returns on our investment in people, which spans marketing, sales, business operations and process development.

我們去年宣布的人才投資計劃，如今已組成完成，並已組成。我們的團隊在提升市場商業影響力方面表現出色，我們在人才方面的投資（涵蓋行銷、銷售、業務營運和流程開發）已獲得即時的回報。

In the fiscal first quarter, we added 14 new prospective opportunities to our development opportunity funnel for a total of 63 projects that are in various stages of diligence and discussion. These opportunities span multiple end markets, classes of drugs and medical devices and with an assortment of companies, both large and small, which we believe speaks to the attractive CDMO capabilities within Lifecore's growing expertise that the pharma industry is actively seeking in a CDMO partner.

在第一財季，我們新增了14個潛在開發機會，總計63個專案處於不同的盡職調查和洽談階段。這些機會涵蓋多個終端市場、藥品和醫療器材類別，並涉及各種規模的公司。我們認為，這反映了Lifecore日益增長的專業技術中蘊含的CDMO能力，而製藥業正在積極尋求CDMO合作夥伴。

While the number of potential projects will shift over time as we convert some and dismiss others, we aren't seeing any slowdown in the number of opportunities. On the contrary, we continue to believe that our expanded commercial strategy will support an increasing trend well into the future. On the operational front, our company continues to prepare for a multiyear acceleration of growth.

雖然潛在項目的數量會隨著我們轉換一些項目、放棄一些項目而隨著時間的推移而發生變化，但我們並未看到機會數量的增長有任何放緩。相反，我們仍然相信，我們擴展的商業策略將在未來很長一段時間內支撐這一成長趨勢。在營運方面，我們公司正在繼續為未來數年的加速成長做好準備。

As I mentioned, it is imperative that we continue to push our organization forward with the implementation of best practices and new capabilities. Our team is in place, and they are diligently working to raise our profile. We bolstered our marketing approach, which is supported by enhanced branding awareness and greater reach to communicate Lifecore's differentiated capability to the market.

正如我所提到的，我們必須繼續推動公司發展，實施最佳實踐並提升新功能。我們的團隊已經到位，他們正在努力提升我們的形象。我們強化了行銷策略，並透過提升品牌知名度和擴大覆蓋範圍，向市場傳達 Lifecore 的差異化能力。

Last fiscal year, we made great advancements in optimizing our facilities in anticipation of adding new capacity in the coming years. With this complete, we are now focused on creating operational efficiencies across the entire company. We are modernizing systems and automating wherever possible. For instance, our laboratory information management system, or LIMS, has been integrated, and we've qualified our first product on LIMS in late June, with a series of other products transitioning the LIMS in the coming months. This platform provides rapid visibility to data and enhance analytics that replaces manual and inefficient processes.

上財年，我們在優化設施方面取得了巨大進展，預計未來幾年將增加新的產能。目前，我們正專注於提升整個公司的營運效率。我們正在對系統進行現代化改造，並盡可能地自動化。例如，我們的實驗室資訊管理系統 (LIMS) 已集成，首款產品已於六月底在 LIMS 上完成認證，未來幾個月內，一系列其他產品也將遷移到 LIMS。該平台提供快速的數據視覺化，並增強分析能力，取代了手動和低效的流程。

We are also isolating additional areas of savings and efficiency through our focus on pharmaceutical elegance. These opportunities include enhancing our sustainability and energy management, our supply chain and working capital requirements. Further, our team is laser focused on resource planning across our entire organization to prepare us to add new manufacturing lines and shifts and to do so with an efficient workforce as capacity and demand requires. In fact, we just recently added an additional weekend shift to support increased manufacturing activity across our organization.

我們也透過專注於製藥業的精實生產，發現了更多可以節省成本、提高效率的領域。這些機會包括提升我們的永續發展能力和能源管理，以及供應鏈和營運資本需求。此外，我們的團隊正全心全意地進行整個組織的資源規劃，為新增生產線和班次做好準備，並根據產能和需求配備高效的員工隊伍。事實上，我們最近剛剛增加了一個週末班次，以支援整個組織日益增長的生產活動。

While there is always more to do, Lifecore is very well prepared for our anticipated robust growth. Looking ahead, our future expansion continues to be driven by our strong development project portfolio, expansion of our prospective development pipeline and conversion of these projects into our active development portfolio. We remain focused on driving towards a multiyear acceleration of annual revenue growth into the mid- to high teens based upon our current project portfolio characteristics and favorable industry tailwinds.

雖然還有更多工作要做，但Lifecore已為預期的強勁成長做好了充分準備。展望未來，我們未來的擴張將繼續由強大的開發項目組合、不斷擴展的潛在開發項目庫以及將這些項目轉化為我們活躍的開發項目組合來驅動。基於我們目前的專案組合特徵和有利的行業順風，我們將繼續致力於推動年收入在未來數年內加速成長，達到中高水準。

While we continue to concentrate on maximizing the revenue-generating capacity of our current infrastructure, we also must balance the known future capacity requirements within our project portfolio with the multiyear lead times on the specialized equipment that is manufactured to our specifications that must also undergo rigorous testing, customer acceptance and regulatory approval.

在我們繼續集中精力最大限度地提高現有基礎設施的創收能力的同時，我們還必須平衡項目組合中已知的未來容量需求與按照我們的規格製造的專用設備的多年交付週期，這些設備還必須經過嚴格的測試、客戶驗收和監管部門的批准。

Our 4 decades of experience in creating a world-class quality management system provides us the confidence to directly meet these challenges as we plan to deliver this multiyear acceleration in our revenue growth trajectory, which is supported by known projects within our existing project portfolio and will be further enhanced by new opportunities with the prospective projects in our development pipeline.

我們在創建世界一流品質管理系統方面擁有 40 年的經驗，這讓我們有信心直接應對這些挑戰，因為我們計劃實現收入成長軌蹟的多年加速，這得益於我們現有項目組合中的已知項目，並將透過我們開發管道中潛在項目的新機會得到進一步加強。

Now I would like to turn the call to John for his financial review.

現在我想把電話轉給約翰，讓他進行財務審查。

Thank you, Jim. I'll start with a review of Lifecore's financial performance and our fiscal '23 outlook before shifting to some updates around the financial aspects of the transition plan that we shared in August. As a reminder, our first quarter is our seasonally lowest quarter in terms of revenues. The seasonality results from idling our manufacturing lines for annual required clean room certification and facility maintenance. This slows shipment volumes and causes first quarter to be our lightest quarter of the year. For the first quarter of fiscal '23, Lifecore total revenues increased 8% to $23.7 million, consistent with our expectation for the first quarter growth to be in the single-digit range. This growth was driven by a 31% increase in our HA raw material manufacturing business and a 3% increase in our CDMO business.

謝謝你，吉姆。我首先會回顧 Lifecore 的財務表現和我們對 23 財年的展望，然後再介紹一些我們 8 月分享的過渡計畫的財務方面的最新情況。提醒一下，就收入而言，第一季是季節性最低的季度。這是由於我們的生產線因年度無塵室認證和設施維護要求而閒置造成的。這減緩了出貨量，導致第一季成為我們全年收入最少的一個季度。 23 財年第一季，Lifecore 總營收成長 8%，達到 2,370 萬美元，與我們對第一季個位數成長的預期一致。這一成長得益於 HA 原料製造業務成長 31% 和 CDMO 業務成長 3%。

The increase in the HA business is primarily due to reduced shipments in the prior year period due to excess channel inventory during the global pandemic and its impact on elective procedures. Lifecore gross profit increased 6% to $6.1 million for the first quarter of '23, representing a gross margin of 25.7%, which compares to 26.3% in the prior year period. The 60-basis-point variance versus prior year was primarily due to higher depreciation, partially offset by improved revenue mix.

HA 業務的成長主要歸因於去年同期出貨量減少，這歸因於全球疫情期間通路庫存過剩及其對擇期手術的影響。 Lifecore 2023 年第一季毛利成長 6%，達到 610 萬美元，毛利率為 25.7%，去年同期為 26.3%。與去年同期相比，60 個基點的差異主要歸因於折舊增加，但部分被收入結構改善所抵銷。

Lifecore adjusted EBITDA increased 8.1% to $2.5 million for the first quarter of '23, with an adjusted EBITDA margin of 10.4%, which was consistent with the prior year.

Lifecore 23 年第一季調整後 EBITDA 成長 8.1% 至 250 萬美元，調整後 EBITDA 利潤率為 10.4%，與前一年持平。

Shifting to our fiscal '23 outlook for our Lifecore segment. We are reiterating revenue guidance in the range of $122 million to $126 million, which implies growth in the range of 12% to 15%, and adjusted EBITDA guidance in the range of $31 million to $32.5 million, which implies growth in the range of 7% to 12%. While we are no longer providing formal guidance on our Curation Foods segment, due to our strategic actions to monetize those remaining assets, for modeling purposes, we are assuming no contribution from Curation Foods for the full fiscal year.

轉向我們對 Lifecore 部門 2023 財年的展望。我們重申營收預期在 1.22 億美元至 1.26 億美元之間，這意味著成長率在 12% 至 15% 之間；調整後 EBITDA 預期在 3,100 萬美元至 3,250 萬美元之間，這意味著成長率在 7% 至 12% 之間。由於我們採取了將剩餘資產貨幣化的策略行動，我們不再為 Curation Foods 部門提供正式的業績指引，但出於建模目的，我們假設 Curation Foods 部門在整個財年不會做出任何貢獻。

Additionally, we are reiterating our full year guidance for our other segment, which reflects the ongoing corporate costs of the organization, which we continue to expect in the range of $7 million to $7.5 million. On this point, I'd remind everyone that while our intent is to formally transition to Lifecore, our organization is in the process of establishing the corporate infrastructure that we carry at Landec. As this transition progresses, we will be making those changes, but in the near term, we think it's most appropriate to expect those expenses to continue.

此外，我們重申了其他部門的全年業績指引，該指引反映了公司持續的企業成本，我們預計這些成本仍將在700萬美元至750萬美元之間。關於這一點，我想提醒大家，雖然我們的目標是正式過渡到Lifecore，但我們公司正在建造Landec所採用的企業基礎設施。隨著過渡的推進，我們將進行這些調整，但在短期內，我們認為這些支出預計會持續下去是最合理的。

Longer term, we believe there will be some modest savings as we manage the smaller and less complex Lifecore organization. So on a consolidated basis, we expect adjusted EBITDA, net of corporate costs, and assuming no contribution from Curation Foods, to be in the range of $23.5 million to $25.5 million for the full year fiscal '23.

從長遠來看，我們相信，隨著Lifecore業務規模縮小、複雜性降低，我們將節省一些開支。因此，在合併基礎上，我們預計23財年全年調整後的EBITDA（扣除公司成本，假設Curation Foods不貢獻任何利潤）將在2,350萬美元至2,550萬美元之間。

With respect to Lifecore, there are a few modeling considerations of note. We continue to anticipate gross margins to decline by approximately 100 basis points in fiscal '23 to approximately 39%, which is very consistent with fiscal year '20 and fiscal year '21 performance. This is due to an expected mix shift towards higher commercial revenues which, on a relative basis, have lower margins than our other revenue streams.

關於Lifecore，有幾點值得注意的建模考量。我們繼續預計23財年的毛利率將下降約100個基點至約39%，這與20財年和21財年的業績非常一致。這是由於預期業務組合將轉向更高的商業收入，而商業收入的利潤率相對低於我們的其他收入來源。

Additionally, we will continue to invest in the sales and marketing functions as we drive an acceleration of top line growth, taking advantage of the favorable industry tailwinds. As a result, we anticipate a similar to slightly higher level of operating expenses versus prior year, perhaps by approximately 50 basis points as a percentage of revenues for the full year.

此外，我們將繼續投資於銷售和行銷職能，以加速營收成長，並利用有利的產業順風。因此，我們預計全年營運費用將與去年同期相比略有上升，佔全年收入的比重可能上升約50個基點。

In terms of Lifecore's quarterly cadence, we continue to expect sequential revenue growth from first to second quarter and second to third quarter and then similar revenue in both third and fourth quarters. And as a reminder, third quarter of fiscal '22 revenues were higher than expected due to shipment timing, therefore, we would expect this year's third quarter to be approximately flat with the prior year.

就Lifecore的季度節奏而言，我們預計第一季至第二季、第二季至第三季的營收將季增，第三季和第四季的營收也將維持相似水準。需要提醒的是，由於出貨時間安排，2022財年第三季的營收高於預期，因此我們預計今年第三季的營收將與去年基本持平。

Adjusted EBITDA is expected to increase sequentially from the first through the third quarters, but then flatten out in fiscal fourth quarter, which is expected to be similar in size to that of the third quarter.

預計調整後的 EBITDA 將從第一季到第三季連續成長，但在第四季趨於平穩，預計其規模與第三季相似。

Now turning to Landec's balance sheet, which still reflects our remaining Curation Foods assets and liabilities and the impact of the segment's cash flows. Net bank debt on a reported basis for the fiscal quarter ended August 28, '22, was $138.3 million, which was essentially flat with the net bank debt at the end of fiscal '22 of $136.5 million. In fiscal '23 first quarter, Lifecore spent $2.9 million in capital expenditures, which is consistent with our fiscal year '23 CapEx guidance of $34 million to $38 million, which is earmarked for 2 multi-use isolator fillers and the associated formulation and process support equipment, which will be ready for acceptance testing next summer.

現在來看看Landec的資產負債表，它仍然反映了我們剩餘的Curation Foods資產和負債，以及該部門現金流的影響。截至2022年8月28日的財季，報告的銀行淨債務為1.383億美元，與2022財年末的1.365億美元銀行淨債務基本持平。 2023財年第一季，Lifecore的資本支出為290萬美元，與我們2023財年3,400萬至3,800萬美元的資本支出預期一致，這筆資金將用於購買兩台多用途隔離灌裝機以及相關的配方和製程支援設備，這些設備將於明年夏天準備好進行驗收測試。

As a reminder, included in this estimate is approximately $3.4 million of CapEx carryover from fiscal '22. This keeps us on track to expand our operational filling capacity from our current 10 million units to 22 million units and beyond to meet expected growth and capacity demand driven by projected growth in our base commercial business and commercialization of products in the late phases of development and our active project portfolio.

提醒一下，此估算包含了約340萬美元的222財年資本支出結轉。這使我們能夠按計劃將營運灌裝產能從目前的1000萬台擴大到2200萬台甚至更高，以滿足預期的增長和產能需求，這些需求是由我們基礎商業業務的預期增長、後期開發階段產品的商業化以及我們活躍的項目組合所驅動的。

And with that, operator, please open the call for questions.

接線員，請開始提問。

(Operator Instructions) The first question is coming from Jacob Johnson of Stephens.

（操作員指示）第一個問題來自史蒂芬斯的雅各布·約翰遜。

Congrats at nice start to the year at Lifecore. Maybe kicking off with a higher-level question. Jim, you talked a little bit about the state of the fill/finish market, but maybe just to flush it out some more. Can you just talk about kind of where fill/finish supply and demand is for the industry? It sounds like capacity is still tight there. And then just a follow-up there, maybe just a couple of comments on how you differentiate yourself versus other fill/finish providers?

恭喜您在 Lifecore 新年伊始取得良好開端。或許可以先問一個更高層次的問題。 Jim，您剛剛談到了填充/封口市場的現狀，但也許只是想進一步了解一下。您能否談談灌裝/封口產業的供需情況？聽起來那裡的產能仍然緊張。然後，能否跟進一下，談談您與其他填充/封口供應商相比有何不同？

Sure. Jacob, Listen, based on the activity that we see coming in from the field, and what we're hearing from our salespeople on the streets, I think you can see there's no end in the opportunities that are coming our way. We increased our opportunities that we're evaluating by 14 projects, and I know there's more knocking on the door. And I think a lot of that is based on our ability to provide capacity. People know that we have additional capacity coming on board over the next couple of years, which also says there isn't a lot of unused capacity out there, and people are looking for it, right? That's part of it.

當然。雅各布，聽著，根據我們在實地看到的活動，以及我們從街頭銷售人員那裡聽到的信息，我想你可以看出，我們面臨的機會無窮無盡。我們正在評估的項目增加了14個，而且我知道還有更多項目正在等著我們。我認為這很大程度取決於我們提供產能的能力。人們知道我們未來幾年會有額外的產能投入使用，這也說明市場上沒有太多閒置的產能，人們正在尋找這些產能，對吧？這是部分原因。

And the other part is the niche that we provide and the complex formulations of products and the fact that Lifecore has the HA manufacturing capability and the importance of that HA to our business that I discussed during the earlier in the call, also plays into it because a big chunk of what's coming our way contains HA and which answers part of your question on the differentiation of Lifecore.

另一部分是我們提供的利基市場和產品的複雜配方，以及 Lifecore 擁有 HA 製造能力的事實以及我在電話會議早些時候討論過的 HA 對我們業務的重要性，這也起了作用，因為我們即將推出的產品中很大一部分都包含 HA，這回答了您關於 Lifecore 差異化問題的部分問題。

So you hear people talking about reduced funding in biotech projects. I think that's probably true. I think, in our experience, though, what's not getting funded is earlier phase projects that would -- probably wouldn't be funded in a typical situation, except that there was a lot of funding available out there. So we're not seeing a slowdown far from it. We still see limited capacity out there that's helping drive the additional opportunities for Lifecore. And listen, the work we've done to put the organization in place from a targeted marketing and sales approach is really starting to pay off. And now the focus is on converting those opportunities into active projects to continue to drive things moving forward.

所以你聽到有人說生物技術計畫的資金減少了。我認為這可能是真的。不過，根據我們的經驗，我認為沒有獲得資金的是早期階段的項目，這些項目通常不會獲得資金，除非市場上有許多資金可用。所以我們看到的並不是經濟放緩。我們仍然看到有限的產能，這有助於推動Lifecore獲得更多的機會。聽著，我們透過有針對性的行銷和銷售方式來建立組織，現在確實開始取得成效。現在的重點是將這些機會轉化為活躍的項目，以繼續推動事情向前發展。

Got it. And that segues to my next question. You've got this kind of funnel of 63 projects and people you're talking to there. And -- can you just talk about how selective you are in terms of who you work with, and that kind of decision-making process as you take those leads and then kind of convert them into the development pipeline?

明白了。這引出了我的下一個問題。您手頭上有63個項目，您正在和不同的人洽談。您能否談談您在選擇合作夥伴方面是如何篩選的，以及在獲取這些線索並將其轉化為開發流程時是如何進行決策的？

Yes, sure. Listen, Lifecore has got a very experienced and amazing team that's got a lot of industry experience, and really has a lot of experience and works hard to evaluate and identify low probability projects and drives us to eliminate those sooner rather than later. And really, it's one of our core competencies that's been driven by our 40 years of experience trying to identify what we should and shouldn't work with. And what really sparked that is, historically, Lifecore didn't have a lot of capacity, and we wanted to make sure we pick the right projects that had a high probability of success to get there.

是的，當然。聽著，Lifecore 擁有一支經驗豐富、非常出色的團隊，他們擁有豐富的行業經驗，並且非常努力地評估和識別低成功率的項目，並促使我們儘早淘汰這些項目。實際上，這是我們的核心競爭力之一，源自於我們 40 年來不斷探索哪些專案應該做、哪些專案不該做的經驗。真正激發我們這樣做的原因是，Lifecore 歷史上產能並不大，我們希望確保選擇那些成功率高的專案來實現目標。

So that's really what we bank on as we pick and work through the ideas to get through the funnel. The other thing is we're spending a lot of time on our new marketing effort, getting Lifecore's unique capabilities out to the marketplace. For the first time ever, we've upgraded our website, doing Google ads, updating our social media content and enhancing our trade show presence. But really, what's more important is we're paying attention to what that's telling us, and where we need to go target to get more opportunities into the pipeline.

所以，這才是我們在挑選和完善創意以打通銷售漏斗時真正依賴的。另外，我們正在投入大量時間進行新的行銷工作，將 Lifecore 的獨特功能推向市場。我們首次升級了網站，投放了Google廣告，更新了社群媒體內容，並提升了我們在展會上的影響力。但實際上，更重要的是，我們要專注於這些改變帶給我們的啟示，以及我們需要瞄準哪些目標，才能獲得更多機會。

So there's still more work to do there. The opportunities are showing up. Now it's a matter of getting them onbarded as quickly as possible, and that's what we're doing now with the organization to make sure we're set up and can get these things onboarded because several are out for proposal, and it's just a matter of working it through the process.

所以還有很多工作要做。機會正在顯現。現在的問題是盡快讓它們加入進來，這就是我們現在與組織一起做的事情，以確保我們做好準備，並能夠讓這些事情加入進來，因為有幾個項目正在徵求提案，現在只是需要完成整個流程的問題。

Got it. And then just last 1 for me. Jim, you mentioned, I think, some kind of operational initiatives. And I think last quarter, you talked a little bit about the Lifecore University, and I think a bunch of Lean and Six Sigma people have been kind of educated on those. Can you just talk about the key areas for operational improvements? And then if John wants to chime in on how we should think about that from a financial perspective, that would be great, too.

明白了。然後我再問最後一個問題。吉姆，我記得你提到了一些營運措施。上個季度，你談到了Lifecore大學，我認為很多精實和六西格瑪人員都已經學習過這些內容。你能不能談談營運改善的關鍵領域？如果約翰想談談我們應該如何從財務角度來思考這個問題，那也很好。

Yes, sure. Jacob, it's actually across the entire organization and impacts every corner of the company, right? Obviously, we want to optimize and get the most out of our processes as we can. So we look for efficiencies and there's a lot of lean projects centered around that as well as our business operations, processing to help get things identified and onboarded and making sure that the organization is set up not only from a project management and business ops standpoint, but from a development in manufacturing standpoint to support the increased manufacturing capacity.

是的，當然。 Jacob，這實際上貫穿整個組織，影響著公司的每個角落，對吧？顯然，我們希望盡可能優化流程，並使其發揮最大效用。因此，我們追求效率，並圍繞此開展了許多精益項目，同時，我們的業務運營流程也有助於識別和引導流程，並確保組織不僅從項目管理和業務運營的角度，而且從製造發展的角度進行設置，以支持不斷增長的製造能力。

So LIMS is another example, our laboratory information management system, to allow us to manage data and look at it quicker and get it out to our partners quicker as well. And so it's across the entire organization and something that is ingrained in our culture at Lifecore. And one of the reasons that we implemented, what we call, Lifecore Universities to get people onboarded, our employees onboarded and operational as quickly as possible.

LIMS 是另一個例子，它是我們的實驗室資訊管理系統，它使我們能夠更快地管理、查看數據，並更快地將數據交付給我們的合作夥伴。它涵蓋整個組織，並且已經深深植根於 Lifecore 的文化中。我們實施「Lifecore 大學」的原因之一，就是為了讓我們的員工盡快上手並投入營運。

John, anything you want to add?

約翰，你還有什麼要補充的嗎？

Okay. Jacob, from a financial perspective, really impacts 2 areas, our gross profit margins and operating leverage and operating expenses. And so all these things that Jim is talking about, we want to be able to keep our gross profit margin in that high 30s to low 40s. And then, secondly, over time, leverage the operating expense to drive EBITDA margins. So that's where we're very focused on these efforts.

好的。 Jacob，從財務角度來看，他實際上影響了兩個方面：我們的毛利率、營運槓桿和營運費用。 Jim 提到的所有這些方面，我們希望能夠將毛利率保持在 30% 到 40% 左右。其次，隨著時間的推移，利用營運費用來提高 EBITDA 利潤率。因此，我們非常重視這些方面的努力。

(Operator Instructions) The next question is coming from Mark Smith of Lake Street Capital Markets.

（操作員指示）下一個問題來自 Lake Street Capital Markets 的 Mark Smith。

Just wanted to look at the pipeline, just a little bit more. Can you just talk about kind of conversion from prospects into projects, kind of generally how you feel about your pipeline and then really that conversion process?

只是想稍微多了解一下銷售管道。您能不能談談從潛在客戶到專案的轉換過程？您對銷售管道以及整個轉換過程的整體感受如何？

Sure, Mark. Obviously, we have a lot of things in the pipeline that we're analyzing, 63 that we're in discussion with now. And the way we look at those is how they run through the funnel is what converts to leads. And then we monitor qualified leads and then they get to the proposal stage. And not all of them are going to make it into that process. We have a lot of experience and a pretty good set of criteria we look at to gauge opportunities before we would even consider them part of that funnel or part of the 63 projects. So I don't have a set percentage of how many of those will be onboarded over the next period of time. A lot of it depends on what phase they're in, and how it fits into our niche capabilities. But our track record and historical rate is pretty high. Will that continue as more come through? It's our intent to have as many of those come through as we can. But it's difficult to judge how many of those. The one thing I can tell you is the majority of those 63 fit what we look for. Now it's just going to be picking the best ones that utilize our skill set and we can provide the most value to.

當然，馬克。顯然，我們正在分析很多項目，目前有63個項目正在討論中。我們看待這些項目的方式是，它們在漏斗中的運作情況如何，最終轉化為潛在客戶。然後，我們會監控合格的潛在客戶，並讓他們進入提案階段。並非所有潛在客戶都能進入這個流程。我們擁有豐富的經驗和一套相當完善的標準來評估機會，然後才會考慮將它們納入漏斗或這63個項目。因此，我無法確定未來一段時間內有多少專案能夠成功入駐。這很大程度上取決於它們處於哪個階段，以及它們是否符合我們的能力。但我們的業績記錄和歷史成功率都相當高。隨著更多專案入駐，這種情況會持續下去嗎？我們希望盡可能吸引這些項目入駐。但很難判斷有多少專案能夠成功進駐。我可以告訴你的是，這63個項目中的大多數都符合我們的要求。現在我們只需要挑選出能夠利用我們的技能並能提供最大價值的最佳人才。

Okay. And then a couple of kind of model questions maybe for John. Just cadence of the revenue guidance. It sounds like you guys are looking for a really solid growth here in Q2. Is some of that just a function of seasonality, and then just how well Q3 was, how solid Q3 was last year that really drives that higher year-over-year growth here in Q2?

好的。接下來我想問約翰幾個模型性的問題。首先是關於收入預期的節奏。聽起來你們預計第二季會有非常穩健的成長。這是否只是季節性因素？第三季的表現如何？去年第三季的表現如何？這才是推動第二季年增的真正動力？

Yes, Mark, I think what we're really seeing is the back half of the year is probably where the biggest growth is going to be occurring. And again, it's just kind of the lineup of projects that are out there and timing of orders from customers. So we actually see a bigger growth in the back half of the year, not just similar than last year actually as well.

是的，馬克，我認為我們真正看到的是，下半年可能是成長最快的時期。再說一次，這只是一系列現有項目和客戶訂單的時間表。所以我們實際上看到下半年的成長更大，而不僅僅是與去年持平。

Okay. And then similarly, just as we think about CapEx, very little spend here in Q1, these projects that are coming online. What's kind of the cadence or expected timing of this larger spend in CapEx is?

好的。同樣，就資本支出而言，第一季這些即將上線的項目支出很少。這些較大的資本支出的節奏或預期時間是如何的？

Yes. I'll start, and I'll ask John to weigh in a little bit as well. But listen, Lifecore works very hard to be good stewards of our capital. This is a timing and within what we expected Q1 will be, and really focuses on progress payments for a lot of the capacity-related spend we have. It's obviously going to pick up through the rest of the year. We're still maintaining the spend guidance that we gave earlier. And so nothing really to call out here other than this is the timing. Q1 was light as we projected, and Lifecore is going to do whatever it can to manage the spend and not spend until we need to.

是的，我先開始，也會請約翰稍微發表一下意見。不過，聽著，Lifecore 非常努力地做好資金管理。這個時間安排符合我們第一季的預期，我們非常注重大量產能相關支出的進度付款。很明顯，今年剩餘時間的支出會回升。我們仍然維持先前給予的支出指引。所以除了時間安排之外，這裡沒什麼好說的。第一季的支出和我們預期的一樣少，Lifecore 將盡其所能管理支出，在必要之前不支出。

Yes. The only thing else to add to that is that most of our CapEx, or 85% of it is growth related and primarily focused on the filler isolator equipment and -- which we hope to arrive next summer. And so as a result, it just kind of pushes a lot of the progress payments later into the year or the back half of the year.

是的。唯一需要補充的是，我們的大部分資本支出（85%）都與成長有關，主要集中在灌裝隔離器設備上——我們希望這些設備明年夏天能到貨。因此，許多進度款的支付會延後到年底或下半年。

The next question is coming from Mike Petusky of Barrington Research.

下一個問題來自 Barrington Research 的 Mike Petusky。

So that actually was a perfect lead-in to the question I wanted to ask. One of the questions I get most about Landec is CapEx in terms of sort of the longer-term normalized CapEx. Can you guys -- you sort of alluded to a lot of the current year spend being growth capital. Could you just speak to what's a normalized figure or a normalized range after you sort of get through what I think is a period of elevated investment?

所以這實際上完美地引出了我想問的問題。關於 Landec，我最常被問到的一個問題是長期正常化的資本支出。你們剛才提到，今年的許多支出都用於成長資本。能否談談，在經歷了我認為是投資高峰的時期之後，一個正常化的數字或正常化範圍是多少？

Yes, John, do you want to take that?

是的，約翰，你想接受這個嗎？

Yes, yes. I think as we've shared a few times, we've had our CapEx needs are -- could be somewhat lumpy and not necessarily perfectly linear. But we certainly are looking at our capacity needs, and we need to place orders for filling equipment a couple of years it takes to get it here and then you've got time to get it validated before it starts really earning some revenue. And so that's a big part of the -- of what we look at from a CapEx perspective. But primarily, I would say that our CapEx is going to be growth focused. So we should be -- 85% plus of our CapEx spend is always going to be focused on that and not focused on maintenance CapEx. So -- the other part is, is you can see that we're transitioning to really a growth company. And so we intend to really, at least for the next couple of years, is to reinvest our EBITDA at Lifecore back into CapEx because we're really focused in on is growing our EBITDA out into the future.

是的，是的。正如我們多次提到的，我們的資本支出需求可能有些波動，而且不一定完全呈線性成長。但我們當然會考慮產能需求，我們需要訂購填充設備，這些設備需要幾年時間才能到貨，之後還需要時間來驗證，才能真正開始獲利。所以，這是我們從資本支出角度考慮的很大一部分。但首先，我想說我們的資本支出將以成長為中心。所以我們應該－85%以上的資本支出將始終專注於成長，而不是維護資本支出。所以，另一方面，你可以看到我們正在轉型成為一家真正的成長型公司。因此，我們打算至少在未來幾年內，將Lifecore的EBITDA重新投資於資本支出，因為我們真正關注的是未來EBITDA的成長。

And we think, with these investments, the annual increase in EBITDA is very worthwhile. We think this $34 million to $38 million, for instance, audible to generate an additional $5 million to $10 million of EBITDA on an annual basis. And as a result, that turns into a very nice ROI when you look at valuation multiples in the CDMO space.

我們認為，這些投資帶來的EBITDA年度成長非常值得。例如，我們認為這3400萬到3800萬美元的投資，每年可以額外產生500萬到1000萬美元的EBITDA。因此，從CDMO領域的估值倍數來看，這將帶來非常可觀的投資報酬率。

So is it then fair to say that maybe this really isn't an elevated range going forward, maybe this is more like a normal range going forward?

那麼是否可以公平地說，這可能實際上並不是一個未來的上升範圍，而更像是正常的範圍？

Yes. We're just not in a position yet today to probably give guidance on that other than what we've given guidance on for this year. But again, I would think that we would be trying to reinvest for the most part our EBITDA back into CapEx going forward.

是的。除了今年的業績指引之外，我們目前還無法就此給出其他指引。但我再次強調，我認為我們會嘗試將大部分EBITDA重新投資於未來的資本支出。

And so...

所以...

And by the way, once you get through a couple of years of that, eventually turn around to a pretty nice free cash flowing business. But in the short term here, the focus is on being a growth company.

順便說一句，一旦你熬過幾年，最終就會變成一家擁有相當不錯的自由現金流的公司。但短期內，重點是成為成長型公司。

And I know you don't want to comment a lot about the Curation assets. But is there an expectation that sort of that process of monetization will be complete either by calendar year-end or fiscal year-end? I mean can you sort of speak to that?

我知道您不想對 Curation 資產發表太多評論。但是，您是否預期這種貨幣化流程會在日曆年末或財政年度結束時完成？能具體談談嗎？

Yes, sure. So I mean the first thing is we said, obviously, we're in a process to sell those off. And when we say that, by virtue of being in the process, we've hired the appropriate advisers to help represent our interest, and they're very much underway. We've kind of created our own -- Jim and I, our own self-imposed goal of a sale by year-end. What I hope you take away from that, though, is that we're really committed to making something happen, but we're also realistic as to the amount of time things like this take. We've -- we do appreciate our shareholders who would like to see this done quickly, and we're aligned with that completely. But we've been working through projects with really in the midst of unprecedented circumstances between the pandemic, extreme inflation, labor shortages, and all those verticals really complicate this exercise already, which we've done each time for each asset that we've had to sell.

是的，當然。首先，我們說過，顯然我們正在出售這些資產。我們這麼說，是因為我們正在進行出售，所以已經聘請了合適的顧問來代表我們的利益，而且他們的工作進展順利。我們——吉姆和我——都設定了我們自己的目標，那就是在年底前完成出售。不過，我希望你們明白，我們確實致力於實現目標，但我們對這類事情所需的時間也很現實。我們非常感謝股東們希望盡快完成，我們也完全同意他們的要求。但是，我們一直在應對前所未有的情況，包括疫情、極端通貨膨脹、勞動力短缺等等，所有這些垂直因素都使這項工作變得更加複雜，我們每次出售每項資產時都會遇到這種情況。

So I will say we are focused on it, work on it every day, and we know this is important for this company. And we intend to get it done as quickly as we can, and we'll update, obviously, the market as soon as we are able to.

所以我想說，我們專注於此，每天都在努力，我們知道這對公司至關重要。我們計劃盡快完成，當然，我們會盡快向市場更新。

Okay. All right. Great. And I just wanted to confirm that I heard one thing, I think that Jim said earlier, PDUFA date before the end of the year and 2 devices likely approved before the end of the calendar year, correct?

好的。好的。太好了。我只是想確認一下，我聽到了一件事，我記得Jim之前說過，PDUFA日期應該在年底之前，並且有兩款設備可能在年底之前獲得批准，對嗎？

That's correct, Mike.

沒錯，麥克。

Our final question today is going to be coming from Mitch Pinheiro of Sturdivant & Company.

我們今天的最後一個問題來自 Sturdivant & Company 的 Mitch Pinheiro。

One thing I want to understand, you talked about tight capacity in the syringe fill/finish area in the industry. But are -- isn't that capacity kind of constrained company to company where new drugs, new therapies are -- the manufacturer is sort of already embedded into that process at the beginning. So I'm not sure why there's a lack of capacity that you can take advantage of in any immediate sense. Wouldn't you have to go through the whole FDA process again that get approved into that new therapy? Could you talk about that a little bit?

我想了解一件事，您提到了行業內注射器填充/封口領域的產能緊張。但是，這種產能不是每個公司都受到限制嗎？在新藥、新療法研發過程中，製造商從一開始就已經參與其中了。所以我不明白為什麼會出現產能不足的情況，以至於無法立即利用。難道獲得新療法的批准，難道不需要重新經歷整個FDA流程嗎？您能稍微談談這個問題嗎？

Yes, Mitch, I think where you're a little bit confused is if -- and I'll clarify your last part of your question. If somebody is going to transition from an already approved CDMO to another one, that would require the qualification of the approval, the whole process again. What we're finding, there's a lot of drug development going on. And the majority of that is being outsourced. And what we're seeing is people trying to identify CDMOs that have capacity that can build with them in the future. So they have a product platform, several products, they project what kind of capacity they're going to need for the next 2, 3, 4, 5 years and try to lock that up with somebody that's got the ability to grow with them. And that is part of the qualification process for -- in a drug would be an NDA, where Lifecore in this case would be qualified as they develop the product and process. But a lot of the things in our pipeline are companies looking for that capacity and who has capacity available and to lock that up for what they see as their future demand.

是的，米奇，我認為你有點困惑的是——我來解釋你問題的最後一部分。如果有人要從一家已經核准的CDMO過渡到另一家，那就需要獲得批准的資質，整個流程再來一次。我們發現，現在有許多藥物開發正在進行，其中大部分都是外包的。我們看到的是，人們試圖尋找那些擁有未來可以與他們共同發展產能的CDMO。他們有一個產品平台，幾款產品，他們預測未來2、3、4、5年需要什麼樣的產能，並試圖與有能力與他們共同成長的公司鎖定產能。這是資格認證流程的一部分——在藥物開發中，NDA指的是新藥申請（NDA），在這種情況下，Lifecore會在開發產品和工藝的過程中獲得資格。但我們管線中的許多產品都是公司在尋找這種產能，看看誰有可用的產能，然後鎖定這些產能以滿足他們認為的未來需求。

And when you talk about your own capacity as you expand it, so that capacity that you are building over the next couple of years here, I had thought it was mostly earmarked to people, to companies that you're already connected with. So are you -- is that -- a, is that true; and b, if not, are you -- I mean, are we going to see a ramp-up in CapEx to further expand your theoretical capacity?

您談到自己在擴大產能時，也就是未來幾年在這裡建設的產能，我原以為這些產能主要分配給那些您已經聯繫上的人員和公司。那麼，您—a，這是真的嗎？ b，如果不是，您—我的意思是，我們是否會看到資本支出的增加，以進一步擴大您的理論產能？

Right. You're right that we have a good chunk of that capacity earmarked with things we're already working on. We also know and have -- and are planning additional capacity above and beyond what we think we're going to need because in this -- in the world of injectable grade CDMO unique capacity to continue to grow and expand and that's what we're planning on. So not all of the capacity we're planning is taken up. We're trying to sell additional capacity. And at some point, down the road, Lifecore will need to expand beyond the 2 additional fill lines. We've talked about that. We're constantly evaluating what kind of capacity we think we'll need to support that pipeline and will make sure the investment aligns, when the time is right, to make sure we have that capacity moving forward.

對。您說得對，我們已將很大一部分產能保留給正在進行的專案。我們也知道，並且正在規劃超出我們預期需求的額外產能，因為在註射級CDMO領域，產能擁有持續成長和擴張的獨特優勢，而這正是我們計劃的。因此，我們規劃的產能並非全部都被佔用。我們正在努力出售額外的產能。未來某個時候，Lifecore需要擴展現有兩條填充線以外的產能。我們已經討論過這個問題了。我們一直在評估我們認為需要什麼樣的產能來支持這條產品線，並將確保在適當的時機進行投資，以確保我們擁有這些產能。

I wouldn't say there's going to be a ramp-up in capital spend. I think we just need to evaluate when we need it. Like we've talked about, Mitch, it's a 3-plus-year timeline to get a fill line in place now. And so the art of this is determining what kind of capacity you need making that investment early enough.

我不認為資本支出會大幅增加。我認為我們只需要評估何時需要。正如我們之前提到的，米奇，現在要建立一條生產線需要三年以上的時間。所以，關鍵在於確定需要什麼樣的產能，並且儘早進行投資。

The other thing we're seeing, like I just mentioned, with -- from our people out in the field is there are people looking for future capacity and willing to help invest in that, and that's something we're looking at as well.

正如我剛才提到的，我們看到的另一件事是——從我們實地人員的情況來看，有人在尋找未來的產能，並願意幫助投資，這也是我們正在關注的事情。

Yes. I mean it must be difficult to -- I mean to sort of figure out your capacity needs as most of those 24 projects in your pipeline, just by definition of drug approval, most of those will fail. So how to know what your capacity is, your need -- capacity needs will be against the prospects of successful drug development? I mean, it seems to be quite a challenge.

是的。我的意思是，要弄清楚你的產能需求肯定很難——因為你研發管線中的24個項目中，大多數（根據藥物審批的定義）都會失敗。那麼，如何知道你的產能、你的需求──產能需求與藥物開發成功前景之間的差距呢？這似乎是一個相當大的挑戰。

It is a challenge. And you're right, not everything will make it through. It's why we -- once things make it into the late phase, and we start to see some successful data coming out of Phase III trials, we have a little more assurance that it typically is not a matter of if, but matter when an approval will happen. Not everything will make it through even though it's in its Phase III trial. But -- the other thing is not everything and that's why we pay attention to the late phase and the 8 projects that are really driving the next 3 to 4 years of commercial capacity requirement.

這是一個挑戰。你說得對，並非所有專案都能成功。正因如此，一旦進入後期階段，並開始看到III期試驗的一些成功數據，我們就能更有信心，這通常不是「是否」的問題，而是「何時」獲得批准的問題。即使處於III期試驗階段，也並非所有項目都能成功。但另一方面，並非所有專案都能成功，這就是為什麼我們專注於後期階段以及真正推動未來3到4年商業產能需求的8個專案。

The other game and thing we need to model and we pay a lot of attention to is how much clinical capacity we will need to support that portfolio as it moves forward, qualification batches, validation batches, that kind of thing. So it's not all a commercial volume puzzle. And listen, our team does a phenomenal job working through this and understanding and working with our partners of what is expected as they move through and as we move to the commercial contract that we have what we need in place to support them.

我們需要模擬的另一個策略和事項，也是我們非常關注的，是隨著產品組合的推進，我們需要多少臨床產能來支持它，包括資格批次、驗證批次等等。所以，這不只是一個商業產量難題。聽著，我們的團隊在這方面做得非常出色，我們理解合作夥伴的期望，並與合作夥伴合作，確保他們在推進過程中以及在簽訂商業合約的過程中，我們擁有所需的一切來支持他們。

Okay. One more question, and it just concerns leverage. So you kind of -- you're a growth company, but a growth company with high leverage is obviously less attractive than perhaps the alternatives. And we're here at 5x leverage. I know that there's going to be some asset sales down the road. But as you come out of that, I mean, the asset sales sort of have to play into your capital spending plans for Lifecore. I mean you don't want to emerge as Lifecore biomedical with a highly leveraged balance sheet because you can't get the asset sale pricing that you want. So where -- how do you think about that?

好的。還有一個問題，是關於槓桿率的。所以你…你是一家成長型公司，但高槓桿的成長型公司顯然比其他公司更具吸引力。我們現在的槓桿率是5倍。我知道未來會有一些資產出售。但當你擺脫困境時，我的意思是，資產出售必須納入你對Lifecore的資本支出計畫。我的意思是，你絕對不希望Lifecore生醫公司出現高槓桿的資產負債表，因為你無法獲得你想要的資產出售價格。那麼——你是怎麼看待這個問題的？

Are you confident that you can -- that your asset sales will be enough to keep yourself at whatever you deem as reasonable leverage? Or is that -- does that slow down your capital spending plans? Can you talk about that a little bit?

您有信心—您的資產出售足以維持您認為合理的槓桿率嗎？或者說，這會減緩您的資本支出計畫嗎？您能稍微談談這個問題嗎？

Yes. Obviously, improving our capital structure, it's been a common thread behind Project SWIFT and since we introduced it a couple of years ago. It's no secret that it's unsustainable, that the leverage level that we have, and hence, the hard work to preserve cash, optimize our assets and extract value. And -- as you've seen, we've directly redeployed that cash towards debt retirement, and we've been consistent in our intent to improve the balance sheet. And while I'm not in a position to provide you a forecast of what stand-alone leverage will be, suffice it to say, we want to improve it going forward. And we're going to do it in 2 ways. Continuing to sell off assets to improve the balance sheet with our EBITDA growth will also really help to delever the business. And we are constantly in great communication with our banks, always looking for what's the next bank deal we could do going forward once we're a stand-alone Lifecore business. So we still believe that there's a great way forward for us to make this -- make our growth plans work.

是的。顯然，改善我們的資本結構，自從幾年前我們推出 SWIFT 專案以來，一直是我們的核心理念。眾所周知，目前的槓桿水平難以為繼，因此，我們不得不付出艱苦的努力來保留現金、優化資產並獲取價值。如您所見，我們已將這些現金直接用於償還債務，並且我們始終致力於改善資產負債表。雖然我無法預測未來的獨立槓桿率，但可以肯定的是，我們希望在未來繼續改善。我們將透過兩種方式來實現。繼續出售資產，透過 EBITDA 成長來改善資產負債表，這也將有助於降低業務槓桿率。我們一直與銀行保持良好的溝通，並一直在尋找在我們成為獨立的 Lifecore 業務後可以進行的下一筆銀行交易。因此，我們仍然相信，我們有很大的發展空間，可以實現這一目標——讓我們的成長計畫發揮作用。

And I know, as you look forward, I mean, is there a leverage target that you think Lifecore Biomedical can operate comfortably? Is there -- is it 3x? Is it 2x? Any idea?

我知道，展望未來，您認為Lifecore Biomedical的槓桿率目標值能輕鬆達成嗎？是3倍嗎？還是2倍？您有什麼想法嗎？

Yes. I mean. My personal sense is I'd love to be in the 3x range. And we recognize for a short period of time, we might have to be above that. But ultimately, we think we can be more comfortable in that type of range. we look kind of mid-range time frames.

是的。我的意思是。我個人感覺，我希望獲利在3倍左右。我們也意識到，短期內，我們可能需要高於這個水準。但最終，我們認為在這樣的區間內會更舒服。我們關注的是中期時間框架。

At this time, I'd like to turn the floor back over to Mr. Hall for any additional or closing comments.

現在，我想把發言權交還給霍爾先生，請他發表任何補充或結束評論。

Thanks everyone for your interest. These are very exciting times for Lifecore. We'll look forward to talking with you again when we release our fiscal second quarter results. So thank you, and have a good day.

感謝大家的關注。對於 Lifecore 來說，這是一個令人興奮的時刻。我們期待在發布第二季財報時再次與您溝通。謝謝大家，祝您有美好的一天。

Ladies and gentlemen, thank you for your participation. This concludes today's event. You may disconnect your lines or log off the webcast at this time and enjoy the rest of your day.

女士們，先生們，感謝各位的參與。今天的活動到此結束。您可以掛斷電話或退出網路直播，享受剩餘的一天。