8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):January 12, 2005

Lifecore Biomedical, Inc.

(Exact name of Registrant as specified in its charter)

Minnesota	0-4136	41-0948334
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(IRS Employer Identification No.)

3515 Lyman Boulevard
Chaska, Minnesota	55318
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: 952-368-4300

TABLE OF CONTENTS

	Item 2.02 Results of Operation and Financial Condition
	Item 9.01 Financial Statements and Exhibits
SIGNATURE
Press Release

Item 2.02 Results of Operation and Financial Condition

On January 12, 2005, Lifecore Biomedical, Inc. (“Lifecore”) issued a press release setting forth Lifecore’s Fiscal 2005 second quarter financial results. A copy of Lifecore’s press release is attached hereto as Exhibit (99.1) and hereby incorporated by reference.

Item 9.01 Financial Statements and Exhibits

(c) The following exhibit is being furnished herewith:

99.1 Press release dated January 12, 2005

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	LIFECORE BIOMEDICAL, INC.
Dated: January 12, 2005		Dennis J. Allingham
		Dennis J. Allingham
		President & Chief Executive Officer

Exhibit Index

99.1       Press release dated January 12, 2005

EX-99.1

Exhibit 99.1

LIFECORE BIOMEDICAL REPORTS RECORD RESULTS FOR SECOND QUARTER ENDED DECEMBER 31, 2004

Fiscal Year 2005 Guidance Increased

CHASKA, MN. — January 12, 2005 — LIFECORE BIOMEDICAL, INC. (Nasdaq: LCBM) today reported record net sales of $14.1 million in the second quarter ended December 31, 2004, an increase of 22% over net sales of $11.6 million in the second quarter of fiscal year 2004. Before the effect of favorable foreign currency comparisons, second quarter sales increased by 24%.

Record quarterly net income of $2,380,000, or $.18 per share, was posted for the quarter compared to net income of $597,000, or $.05 per share, in the quarter ended December 31, 2003.

Sales for the first six months of fiscal year 2005 were $26.3 million, an increase of 22% over the $21.5 million reported for the first six months of fiscal year 2004. Before the effect of favorable foreign currency comparisons, sales for the first six months increased by 24%.

Record net income of $3,659,000, or $.28 per share, was reported for the six months ended December 31, 2004 compared to a net loss of $246,000, or $.02 per share, for the six months ended December 31, 2003.

“With another record quarter in both sales and profits, we are obviously pleased with our progress to drive profitable growth,” said Dennis J. Allingham, President and CEO. “This marks the third successive quarter of double digit sales growth with improved profitability.”

The Company reported positive cash flow of $3.0 million for the six months ended December 31, 2004, resulting in a cash balance of $11.6 million.

Hyaluronan Division

Net sales from the Hyaluronan Division for the second quarter were $4.5 million, an increase of 27% from the $3.5 million reported in the same quarter last year. Net sales for the first six months in fiscal year 2005 were $9.1 million compared to $7.1 million in the comparable period last year; an increase of $2.0 million or 29%. Sales to ophthalmic and orthopedic customers increased in both the quarter and six month period.

The Division reported operating income of $853,000 for the second quarter compared to an operating loss of $62,000 in the second quarter of fiscal year 2004. Operating income of $2,172,000 was reported for the six month period compared to an operating loss of $636,000 in the same period last year. “The turnaround in operating performance in the current fiscal year reflects managements’ focus on profitability and sales growth,” said Mr. Allingham.

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Oral Restorative Division

Net sales from the Oral Restorative Division for the second quarter were a record $9.6 million; an increase of 20% from the $8.0 million recorded in the second quarter last year. Before the effect of favorable foreign currency comparisons, second quarter sales increased by 23%. Net sales for the first six months in fiscal year 2005 were $17.1 million compared to $14.4 million in the comparable period last year; an increase of 19% attributed to higher international and domestic sales. Before the effect of favorable foreign currency comparisons, sales for the first six months increased by 22%.

The Division reported operating income of $1,323,000 for the second quarter compared to operating income of $521,000 in the second quarter of fiscal year 2004. Operating income of $1,683,000 was reported for the six month period compared to operating income of $280,000 in the same period last year.

Other Income

Currency transaction gains of $113,000 were reported for the second quarter compared to $274,000 in the second quarter a year ago. Currency transactions gains of $198,000 and $398,000 were reported for the six month periods of fiscal 2005 and 2004, respectively.

A one-time pretax gain of $250,000 was recorded as other income in conjunction with the Company securing worldwide marketing rights to its anti-adhesion product.

Outlook

With another quarter of double-digit sales gains and continued improvement in operating income, the Company has again raised its guidance for the fiscal year. Fiscal year 2005 sales are now expected to increase 12 to 15 percent over fiscal year 2004; an increase from the previous guidance of 11 to 13 percent. Earnings per share are now expected to be $.52 to $.57 compared to the previously issued guidance of $.43 to $.49.

The Company expects sales of $13.3 to $13.8 million in the third quarter of fiscal year 2005 with earnings per share of $.12 to $.14.

Conference Call

As previously announced, the Company will host a conference call today at 3:45 p.m. Central Time to discuss second quarter results. A live web cast of the call is available through the Company’s website at www.lifecore.com. After selecting the Investor Info tab, select CALENDAR OF EVENTS from the INVESTOR INFO & RESEARCH menu at the right side of the page and follow the instructions for participation. A replay of the web cast will be available shortly after completion of the call. To select the archived replay, select AUDIO ARCHIVES from the INVESTOR INFO & RESEARCH tools menu at the right side of the screen. The conference call will also be available at www.streetfusion.com.

The conference call may include forward-looking statements. See the cautionary information about such statements in the “Safe-Harbor Statement” section below.

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Safe-Harbor Statement

Certain statements in this release regarding Lifecore’s anticipated future sales and financial results are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Numerous risks and uncertainties may affect whether such results are actually achieved. These include the likelihood and timing of the return of the Company’s adhesion prevention product to the market, the timing of orders from customers, continued market acceptance of the Company’s products, timing of regulatory approvals, success of new product development efforts, and other factors. These risks and uncertainties are more fully described in the Company’s Annual Report on Form 10-K, including Exhibit 99.1, for the fiscal year ending June 30, 2004, and other, more recent filings. Actual results may differ materially from anticipated results.

About Lifecore Biomedical

Lifecore Biomedical develops, manufactures, and markets biomaterials and medical devices for use in various surgical markets.

News and general information are available through the Company’s website at www.lifecore.com or by telephone at 952-368-4300.

Contact:
     Dennis J. Allingham, President and CEO, 952-368-4300
     David M. Noel, Vice President of Finance and CFO, 952-368-6207

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Lifecore Biomedical, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)

	December 31,		June 30,
	2004		2004
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	11,557,000	$	8,553,000
Accounts receivable		9,022,000		8,626,000
Inventories		10,330,000		9,491,000
Prepaid expense		1,013,000		705,000
Total current assets		31,922,000		27,375,000
PROPERTY, PLANT AND EQUIPMENT, NET		22,969,000		23,198,000
LONG-TERM INVENTORY		3,035,000		3,891,000
OTHER ASSETS		5,110,000		5,854,000
	$	63,036,000	$	60,318,000
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities	$	4,947,000	$	5,683,000
Long-term obligations		5,236,000		5,809,000
Shareholders’ equity		52,853,000		48,826,000
	$	63,036,000	$	60,318,000

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Lifecore Biomedical, Inc.
Consolidated Statements of Operations
(Unaudited)

	Three Months Ended						Six Months Ended
	December 31,						December 31,
	2004			2003			2004			2003
Net sales	$	14,093,000		$	11,558,000		$	26,288,000		$	21,505,000
Cost of goods sold		5,330,000			4,863,000			10,316,000			9,632,000
Gross profit		8,763,000			6,695,000			15,972,000			11,873,000
Operating expenses
Research and development		1,171,000			1,245,000			2,019,000			2,504,000
Marketing and sales		3,837,000			3,301,000			7,052,000			6,474,000
General and administrative		1,579,000			1,690,000			3,046,000			3,251,000
		6,587,000			6,236,000			12,117,000			12,229,000
Operating income (loss)		2,176,000			459,000			3,855,000			(356,000	)
Other income (expense)
Interest, net		(23,000	)		(148,000	)		(126,000	)		(297,000	)
Bond retirement expense		—			—			(290,000	)		—
Currency transaction gains		113,000			274,000			198,000			398,000
Other		250,000			12,000			252,000			9,000
		340,000			138,000			34,000			110,000
Income (loss) before income taxes		2,516,000			597,000			3,889,000			(246,000	)
Provision for income taxes		136,000			—			230,000			—
Net Income (loss)	$	2,380,000		$	597,000		$	3,659,000		$	(246,000	)
Net income (loss) per share
Basic	$	0.18		$	0.05		$	0.28		$	(0.02	)
Diluted	$	0.18		$	0.05		$	0.28		$	(0.02	)
Weighted average shares outstanding
Basic		12,945,903			12,891,083			12,939,254			12,890,098
Diluted		13,270,519			12,938,352			13,115,195			12,890,098

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Lifecore Biomedical, Inc.
Divisional Statements of Operations
Three Months Ended December 31,
(Unaudited)

	Hyaluronan Division					Oral Restorative Division				Consolidated
	2004		2003			2004		2003		2004		2003
Net sales	$	4,510,000	$	3,545,000		$	9,583,000	$	8,013,000	$	14,093,000	$	11,558,000
Cost of goods sold		2,091,000		1,903,000			3,239,000		2,960,000		5,330,000		4,863,000
Gross profit		2,419,000		1,642,000			6,344,000		5,053,000		8,763,000		6,695,000
Operating expenses
Research and development		895,000		975,000			276,000		270,000		1,171,000		1,245,000
Marketing and sales		150,000		136,000			3,687,000		3,165,000		3,837,000		3,301,000
General and administrative		521,000		593,000			1,058,000		1,097,000		1,579,000		1,690,000
		1,566,000		1,704,000			5,021,000		4,532,000		6,587,000		6,236,000
Operating income (loss)	$	853,000	$	(62,000	)	$	1,323,000	$	521,000	$	2,176,000	$	459,000

Lifecore Biomedical, Inc.
Divisional Statements of Operations
Six Months Ended December 31,
(Unaudited)

	Hyaluronan Division					Oral Restorative Division				Consolidated
	2004		2003			2004		2003		2004		2003
Net sales	$	9,147,000	$	7,103,000		$	17,141,000	$	14,402,000	$	26,288,000	$	21,505,000
Cost of goods sold		4,177,000		4,272,000			6,139,000		5,360,000		10,316,000		9,632,000
Gross profit		4,970,000		2,831,000			11,002,000		9,042,000		15,972,000		11,873,000
Operating expenses
Research and development		1,499,000		1,994,000			520,000		510,000		2,019,000		2,504,000
Marketing and sales		242,000		263,000			6,810,000		6,211,000		7,052,000		6,474,000
General and administrative		1,057,000		1,210,000			1,989,000		2,041,000		3,046,000		3,251,000
		2,798,000		3,467,000			9,319,000		8,762,000		12,117,000		12,229,000
Operating income (loss)	$	2,172,000	$	(636,000	)	$	1,683,000	$	280,000	$	3,855,000	$	(356,000	)

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