LifeCore Biomedical, Inc. reported its financial results for the three months ended August 25, 2024, revealing a mixed performance compared to the same period in the previous year. Total revenues increased to $24.7 million, up from $24.5 million, marking a 1% rise. This growth was primarily driven by a $1.5 million increase in hyaluronic acid (HA) manufacturing revenues, attributed to the timing of shipments from a major customer. However, contract development and manufacturing organization (CDMO) revenues saw a decline of $1.3 million due to inventory adjustments by another customer.

The company's gross profit surged to $5.4 million, a significant increase from $2.7 million in the prior year, resulting in a gross profit margin of 21.8%, up from 11.1%. This improvement was largely due to a favorable sales mix and price increases in CDMO revenues, which contributed an additional $3.6 million to gross profit.

Despite the revenue growth, LifeCore experienced a substantial increase in operating expenses, which rose to $17.0 million from $11.3 million, a 50% increase. Selling, general, and administrative (SG&A) expenses accounted for a significant portion of this rise, climbing to $14.8 million from $9.2 million. The increase in SG&A was driven by higher professional fees, including $4.7 million related to audit and legal costs, and non-cash stock-based compensation expenses.

The company reported a net loss of $16.2 million for the quarter, compared to a net loss of $10.8 million in the same period last year. This resulted in a loss per share of $(0.53), up from $(0.35) in the prior year. The increase in net loss was attributed to higher operating costs and increased interest expenses related to the Alcon term loan.

As of August 25, 2024, LifeCore's total current assets decreased to $74.2 million from $81.0 million, while total liabilities rose to $207.3 million from $200.1 million. The company reported a shareholders' equity deficit of $(3.9 million), a significant decline from a positive equity of $11.3 million in the previous quarter.

In terms of strategic developments, LifeCore continues to focus on expanding its manufacturing capabilities and enhancing its product offerings in the sterile injectable pharmaceutical market. The company is also addressing material weaknesses in its internal controls over financial reporting and has engaged a third-party consultant to assist in remediation efforts.