Menlo Park, California
January 21, 2003

Landec Corporation (Nasdaq:LNDC), a developer and marketer of technology-based polymer products for food, agricultural and licensed partner applications, today reported results for the fourth quarter and fiscal year ended October 27, 2002.

Total revenues for fiscal year 2002 were $183.2 million versus revenues of $190.6 million in fiscal year 2001. On a generally accepted accounting principle (GAAP) basis, the Company reported a net loss of $1.5 million, or $0.10 per diluted share, in fiscal year 2002 compared to a net loss of $7.9 million or $0.48 per diluted share, in fiscal year 2001. Net income from continuing operations for fiscal year 2002 was $201,000 compared to a net loss of $4.8 million in fiscal year 2001.

Revenues for the fourth quarter of fiscal year 2002 were $41.2 million versus $39.1 million in the fourth quarter of fiscal year 2001. On a GAAP basis, Landec reported a net loss in the fourth quarter of fiscal year 2002 of $2.9 million, or $0.16 per diluted share, compared with a net loss of $5.8 million, or $0.35 per diluted share, for the year ago quarter. Net loss from continuing operations in the fourth quarter was $1.2 million, or $0.07 per diluted share, compared with a net loss of $2.9 million, or $0.17 per diluted share, in the year ago quarter.

The net loss from discontinued operations for the fourth quarter and fiscal year 2002 was $1.7 million, or $0.09 per diluted share. This compares to the year ago quarter loss of $2.9 million, or $0.18 per diluted share, and the prior fiscal year loss of $3.0 million, or $0.19 per diluted share. The discontinued operations losses recorded in fiscal years 2002 and 2001 were from the sale of Dock Resins Corporation which was completed in October 2002. The discontinued operations loss recorded in fiscal year 2002 was due to the net proceeds received from the sale of Dock Resins being less than the original estimate that was the basis for the loss recorded in fiscal year 2001.

The results for the fourth quarter and fiscal year 2002 include the impact of the change in accounting for the amortization of goodwill and certain identified intangible assets. Goodwill and intangible assets deemed to have an indefinite life are no longer amortized. The implementation of this change decreased the fourth quarter net loss by approximately $650,000, or $0.03 per diluted share and decreased the net loss for fiscal year 2002 by approximately $2.6 million, or $0.14 per diluted share.

"Revenues for the quarter are up 6% compared to the same period last year because of the increased revenues from our technology licensing business, from our value-added produce products and from the sale of bananas to the food service industry," said Gary Steele, President and CEO of Landec. "For fiscal year 2002, overall revenues are down 4% due to the Company's earlier decision to exit the field operations portion of its 'fee-for-service' commodity produce business for which revenues decreased by $21.6 million in fiscal year 2002 compared to fiscal year 2001. The reduction in the 'fee-for-service' revenues is a result of the Company's focus on its technology-based products. At the same time, revenues for the year from our specialty packaging value-added produce business increased 19% and revenues from our agricultural seed business increased 20% compared to fiscal year 2001. Gross margins as a percent of revenues increased to 15.4% in the fourth quarter of fiscal year 2002 from 14.6% in last year's fourth quarter and for fiscal year 2002 gross margins increased to 17.1% from 14.6% last year."

"Our fourth quarter and fiscal year 2002 results reflect the impact of the expanded efforts we are undertaking on our banana packaging technology program. As previously communicated, we have incurred considerable incremental expense to expand our banana sourcing and market trials in order to capitalize on this opportunity. For the fourth quarter and fiscal year ended October 27, 2002, the Company spent approximately $600,000 and $2.1 million, respectively, to expand its banana program," Steele added. "In addition, the full year results include the impact from unseasonable weather this past winter which adversely affected Apio's sourcing of crops resulting in $3.0 million in unplanned excess charges to cost of sales during fiscal 2002."

"As outlined in our third quarter results release, our R&D and trial work for the banana technology program is focused on three main objectives: (1) qualifying sources from large, multinational banana shipping companies, (2) optimizing the design and use of our 40 lb. Intellipac(TM) package so that the extended shelf life we deliver can be translated into consistent savings and increased sales for the retail grocery chains and (3) developing new package sizes for consumers that will allow bananas to be sold in ways that are unique to the industry. We know the market needs technology that can extend banana shelf life and lower the costs to retailers. Since April 2002, we have sold over $6 million of Eat Smart(R) bananas using our proprietary Intellipac technology. As we continue to work on optimizing our banana technology for retail applications, we will be focusing our short-term opportunities in market segments such as the food service industry, whose needs can be currently met with Landec's existing banana packaging and sources. We are scheduled to begin retail market tests of Eat Smart bananas in the second quarter of fiscal year 2003. Our enthusiasm for our banana packaging technology has not wavered and we continue to place a significant amount of Company resources on this program," stated Steele.

"The success of our Intellipac food packaging technology has allowed us to convert not only fresh-cut produce but also whole produce into value added products that bring real differentiation to retailers and to growers. As a result, Apio's Eat Smart products using our proprietary Intellipac specialty packaging grew to 52% of Apio's revenues this year from 40% last year and from a little over 20% at the time Landec acquired Apio in December 1999," Steele added.

"Although the corn seed industry had only a 3% growth in acreage during 2002, revenues for Landec Ag, the Company's seed technology business, increased 20% in fiscal year 2002 as compared to fiscal year 2001 and operating income was $517,000 compared to an operating loss of $1.0 million in fiscal year 2001. The increase in operating profit at Landec Ag is a direct result of revenue and margin growth this past year," continued Steele.

"In our technology licensing business, we entered into two significant collaborations during fiscal year 2002. The first was with UCB Chemicals in the area of industrial adhesives and the second one was with a major medical device company whose identity cannot be disclosed at this time for confidentiality reasons. These two collaborations generated $2.5 million of revenue and profits during the year," stated Steele.

Commenting on the financial condition of the Company, Steele said, "During fiscal year 2002, we received $9.4 million of net proceeds from the sale of the Company's specialty chemicals company, Dock Resins Corporation, and collected net proceeds of $7.6 million from the sale of Landec common stock. This cash was used to pay down $15.9 million of debt thus reducing our debt to equity ratio from 67% at the end of fiscal year 2001 to 31% at the end of fiscal year 2002 and to purchase $2.5 million of equipment that was primarily used to expand and further automate our Food Technology business. Our steps to pay down debt will reduce our principal and interest payments in fiscal year 2003 by nearly $4.0 million. In addition, the cash generated from operating activities during fiscal year 2002 was used to reduce payables and accrued liabilities by $3.7 million."

"In summary, we had three primary objectives entering fiscal year 2002, (1) become profitable for a full fiscal year, (2) strengthen our balance sheet and (3) commercially launch our banana packaging technology. Although fiscal year 2002 was not as successful as we had planned, we did generate our first ever fiscal year profit from continuing operations, we significantly improved our balance sheet and we launched our banana packaging technology for the food service industry. Looking to fiscal year 2003, our primary objectives are to increase operating profits, continue to strengthen our balance sheet, launch our banana packaging technology for retail applications while expanding our food service business, and continue to grow our food and ag technology businesses," commented Steele.

"Landec's proprietary temperature-activated Intelimer(R) polymers solutions are patent protected and are changing the economics and the quality of the food and seed products we have targeted. In addition, our technology is opening up new solutions in the medical and adhesive markets. We have numerous technology-driven applications in our pipeline and look forward to introducing several new products during the upcoming year," concluded Steele.

Operating Highlights and Outlook

Apio's Intellipac Packaging Products Business Continues to Grow

During fiscal year 2002, Apio's iceless packaging product line continued to experience accelerated growth. Apio now has six iceless packaging products for vegetables utilizing our Intellipac case liner technology, including bunch and crown broccoli, eighteen pound cartons of loose broccoli florets, Asian cut broccoli crowns, export cut broccoli crowns and green onions. Apio also introduced fourteen new value added produce product offerings during fiscal year 2002 and expanded its retail and club store presence to over 8,700 stores from 7,600 at the end of fiscal year 2001.

Thus far in fiscal year 2003 Apio's value added business has continued to grow. The record one-week value added volumes, set during the third week of November, was subsequently exceeded with even higher shipping volumes during the third week of December. Shipments of our core product line, the 12-ounce sized fresh-cut vegetable blends, grew 34% in fiscal year 2002 compared to fiscal year 2001. Over the past year, Apio has introduced several new fresh-cut vegetable items for the retail grocery segment. Apio's new Eat Smart party tray has experienced rapid sales increases since its launch in October 2002. The tray includes an array of fresh-cut vegetables packaged in a unique, patent-pending tray design that utilizes Intellipac packaging technology.

Landec Ag's Intellicoat(R) Seed Coating Product Sales Accelerate

Landec Ag, the Company's Intellicoat seed coating subsidiary, expanded its field trials and commercial sales during fiscal year 2002 for its Early Plant(TM) hybrid corn. Early Plant hybrid corn joins the existing line-up of Landec Ag commercial products which include Pollinator Plus(R) coatings for inbred corn seed, Relay(TM) Intercropping of wheat and Intellicoat coated soybean and Fielder's Choice Direct(R) hybrid corn.

Early Plant hybrid corn is designed to allow corn farmers to safely and reliably plant hybrid corn three to four weeks earlier than normal, by using Landec Ag's proprietary Intellicoat coating which delays germination until the soil reaches the optimal soil germination temperature. Otherwise, planting earlier in cold, wet soil could cause poor or no germination to occur. Allowing the farmer to have a wider planting window lowers costs, reduces risks and potentially increases yields. The program for Early Plant hybrid corn has increased five-fold to approximately 15,000 acres this past spring from 3,000 acres in 2001.

In Early Plant corn trials for the 2002 planting season, when comparing Intellicoat coated corn seeds to uncoated corn seeds, the Intellicoat coated seeds consistently showed better, more uniform emergence and higher stand counts for improved yield potential. Landec Ag is now commercially launching its Intellicoat Early Plant corn seed coating technology on its Fielder's Choice Direct brand of hybrid seed corn. In addition, eight of the top U.S. seed companies conducted separate evaluations of the Intellicoat Early Plant hybrid corn technology on their own hybrids during 2002.

Landec Ag's first Intellicoat-based commercial product is called Pollinator Plus. Pollinator Plus seed coatings are applied to inbred seed corn to delay seed germination and extend the pollination window thus reducing risks and increasing yields for seed companies. Pollinator Plus is already being used by 30 major seed companies in the production of hybrid seed corn. Seed companies are rapidly increasing their use of this technology, and this product line was planted on over 60,000 acres in 2002, double the 30,000 acres in 2001.

Another Intellicoat application is the Relay Intercropping of wheat and Intellicoat coated soybeans system. The Relay system enables Central and Northern Corn Belt farmers, whose growing season is normally too short for double cropping, to successfully inter-plant coated soybeans into wheat fields and gain more revenue by harvesting two crops off the same field in the same year. This Intellicoat application is in its third year of successful commercial on-farm sales.

Landec Ag, headquartered in Monticello, Indiana, combines its proprietary Intellicoat seed coating technology products with its unique direct marketing and consultative selling approach -- eDC(TM), which is supported by its sophisticated telephonic and electronic call center. In addition to its Intellicoat-coated products, Landec Ag markets its Harvestar(TM) product line, introduced in 2000, which offers high performance alfalfa and nutrient enhanced hybrid seed corn. The Harvestar line of products is being sold to new and existing customers who have expressed interest in these types of seeds.

Landec Corporation designs, develops, manufactures and sells temperature-activated and other specialty polymer products for a variety of food, agricultural and licensed partner applications. The Company's temperature-activated polymer products are based on its proprietary Intelimer polymers which differ from other polymers in that they can be customized to abruptly change their physical characteristics when heated or cooled through a pre-set temperature switch.