Menlo Park, California
June 11,  2001

Landec Corporation (Nasdaq: LNDC), a developer and marketer of technology-based polymer products for food, agricultural and licensed partner applications, today reported record quarterly
revenue and operating profit results for the second quarter ended April 29, 2001. 

Total revenues for the quarter were $62.3 million versus $60.9 million in the prior year second quarter of fiscal 2000. Landec reported net income of $3.2 million, or $0.20 per basic share, compared with net income of $2.9 million, or $0.18 per basic share, for the year ago quarter. Revenues for the first six months of fiscal 2001 were $110.4 million versus revenues of $94.8 million a year ago. The Company reported a loss of $757,000 or $0.05 per share during the first six months of fiscal 2001 compared to a loss of $1.6 million or $0.11 per share, in the first six months of fiscal 2000. EBITDA -- earnings before interest, taxes, depreciation and amortization -- for the quarter were $5.2 million versus $4.9 million in the second quarter of last year. For the
six-month period EBITDA was $3.4 versus $3.6 for the same period last year. 

The financial statements for the first six months of the prior year have been restated to reflect the cumulative effect of the change in accounting principle resulting from the Company's adoption of SEC Staff Accounting Bulletin 101, at the end of fiscal 2000. SAB 101 impacts how the Company accounts for previously recorded up-front licensing revenues related to agreements that involve
ongoing R&D and/or supply commitments. The adoption of SAB 101 at fiscal year end 2000 was treated as if it had occurred at the beginning of fiscal year 2000. As a result of adopting this new pronouncement, Landec will recognize these up-front license revenues prorated over the life of the respective contractual commitment periods. 

"Our second quarter results reflect the seasonal pattern in Landec's revenues and profits, with the second quarter historically showing the highest revenue and profit results," said Gary Steele, President and CEO of Landec. "Despite a depressed corn industry in 2001, second quarter revenues for the Company increased over the year ago quarter, and by nearly 30 percent relative
to the prior quarter. Our outlook for the next two quarters, and for fiscal year 2001, remains positive. We expect fiscal 2001 revenues to grow over last year and we continue to have as our goal to be profitable for fiscal 2001." 

"The seasonality in revenues and profits is due to two major factors," continued Steele. "First, the Company's seed technology subsidiary, Landec Ag, records virtually all of its revenues and profits during the second fiscal quarter. Secondly, the Company's food technology subsidiary, Apio, can experience produce sourcing issues in the winter months, which overlaps the Company's first and second quarters. A stretch of unseasonable weather early this winter adversely affected Apio's sourcing of crops and combined with winter season farming losses in the desert, resulted in $3.6 million in charges to cost of sales during the first six months of fiscal 2001." Steele continued, "in addition, because of the weakness in the corn industry in 2001, Landec Ag profits are down approximately $550,000 compared to the first six months of fiscal 2000." 

"As a result of the excess costs incurred by Apio during the winter season and the decreased profits at Landec Ag, and in preparation for improving profitability for the rest of the fiscal year 2001, the Company has instituted initiatives to streamline operations in non-technology segments of its business," commented Steele. "These initiatives included a ten percent reduction of
the Company's workforce and an overall reduction of operating expenses. Future initiatives include the sale of non-essential assets, such as the fruit processing facility in Reedley. In addition, the Company has developed a strategy to minimize winter operating risks at Apio, which we will begin implementing before the next winter season." 

Landec acquired Apio about eighteen months ago in order to combine the Company's proprietary specialty packaging Intellipac(TM) applications with synergistic operations of a leading, established food company. At the time of the acquisition, the majority of Apio's business was oriented toward traditional commodity produce sales and service. Since the acquisition, Apio's
business has shifted to value added products that utilize Landec's proprietary Intellipac technology. 

"The success of our Intellipac technology has allowed us to begin to convert not only fresh-cut produce but also whole produce commodities into value added products that bring real differentiation to retailers and to growers," Steele added. "Domestic shipments of iceless broccoli crowns, our first whole produce product that utilizes Intellipac technology, have experienced
compounded growth in units of 50% per month since its introduction in November 2000. More recently, in April 2001, we began exporting iceless broccoli crowns to Asia and initial feedback has been very positive. In May 2001, we also began domestic shipments of iceless broccoli bunches." 

"With the growth of Apio's Eat Smart(TM) products using our proprietary Intellipac specialty packaging, we project that over 40% of Apio's revenues this year will be derived from technology-based products up from 30% last year. Our goal is to convert more of Apio's sales to technology-based products, thus allowing Apio to contract for produce with our grower partners at a fixed price, which in turn should minimize the impact of commodity market fluctuations for both Apio and our grower partners." 

Commenting on the financial condition of the Company, Steele said, "with the quarter ending cash position of $5.9 million and with positive cash flow from operations expected for the rest of the year, the Company expects to meet operating goals this fiscal year without a major equity financing. While not currently under consideration, the Company may consider a small equity or debt financing sometime in the next twelve months." 

Operating Highlights and Outlook

Apio Gaining in Store Chains and Export Market 

During the quarter, Apio's iceless product line continued to experience accelerating growth. In addition, Apio initiated programs to broaden its product offerings, including a new export program for the Company's iceless products, which will expand the use of Intellipac technology to export markets. Apio also introduced nine new product offerings during the first six months of fiscal 2001
and expanded its retail and club store presence to over 7,800 stores. These efforts have the potential to generate substantial revenues for Apio over the coming quarters. In addition, the Company is conducting shipping and ripening trials using Intellipac technology for bananas, a $4 to $4.5 billion annual worldwide market for distributors, which in turn, is a $9 to $10 billion annual
worldwide market for retailers. Bananas are the nation's leading produce item, contributing approximately ten percent of produce department sales in the United States. 

Landec Ag Accelerates Sales and Trials of Technology Products 

Landec Ag, the Company's Intellicoat(R) seed coating subsidiary, also expanded its field trials during the quarter, including its new Early Plant(TM) hybrid corn and wheat/coated soybean Relay Crop(TM) System. The new products under development join the existing line-up of Fielder's Choice Direct(R) hybrid corn and Intellicoat coated Pollinator Plus(TM) seed corn coatings. 

Pollinator Plus seed coatings are applied to inbred seed corn to control the timing of seed germination. Pollinator Plus, the Company's first commercial Intellicoat product, was introduced during last fiscal year and is being successfully sold to over 30 leading seed companies. The Company is positive about the future of this product line. 

The next generation of Intellicoat products is being tested in a significantly expanded number of field trials this spring. These Intellicoat products include the wheat/coated soybean Relay Crop System and Early Plant hybrid corn. Landec Ag's Relay Crop System includes Intellicoat coated soybeans which enable farmers to plant two crops on the same acreage in the same year,
resulting in higher overall yields and lower overall production costs. The field trial program for Relay Crop has been expanded to 2,200 acres this spring from 900 acres last year. Early Plant hybrid corn is designed to allow corn farmers to safely and reliably plant hybrid corn 2-4 weeks earlier than normal, since Landec's proprietary Intellicoat coating delays germination until the soil
reaches the optimal soil germination temperature. Otherwise, planting 2-4 weeks earlier in cold, wet soil could cause the seed to die. Allowing the farmer to have a wider planting window lowers costs, reduces risks and potentially increases yields. The field trial program for Early Plant hybrid corn has been expanded to 2,500 acres this spring from 20 acres last year. 

Landec Ag also directly markets and sells seed products using a sophisticated telephonic and electronic call center headquartered in Monticello, Indiana. This spring the Company introduced a new Harvestar(TM) product line, which offers high performance alfalfa and nutrient enhanced hybrid seed corn. These products will be 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(R) 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.