Good morning, and thank you for joining the Lifecore Biomedical Fiscal 2023 Second Quarter Earnings Call. [Operator Instructions]. Now I'd like to turn the call over to Jeff Sonnek, Investor Relations at ICR. Please go ahead.

Good morning, and thank you for joining us today to discuss Lifecore Biomedical's Second Quarter Fiscal 2023 Earnings Results and the strategic and commercial update that we provided via a series of concurrent press releases yesterday after the market closed. Hosting the call today from the company are Jim Hall, President and Chief Executive Officer; and John Morberg, Chief Financial Officer. Before we begin today, I'd like to remind everyone of the safe harbor statement. 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 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/A for fiscal year 2022. Please note that the company has also completed its restatements associated with the retroactive impairment of its avocado products business, which has since been divested on February 7, 2023. These restatements include the fiscal 2022 10-K and the fiscal 2023 first quarter 10-Q. The company has also filed its fiscal 2023 second quarter 10-Q today. Copies of these filings may be obtained from the SEC and the company's website. Finally, in light of the company's announcement of its intention to explore its strategic alternatives, management will not be conducting a live Q&A session on today's call. With that, I'd like to now turn the call over to Jim Hall, Chief Executive Officer. Jim?

Thank you, Jeff. Good morning, everyone, and thank you for joining us for a long overdue update. I want to start today by recognizing that the past several months have presented a series of unique challenges for the company, and we have a number of developments we intend to discuss today to bring you current with our business, including our announcement of our intent to explore strategic alternatives; the completion of the restatement of our consolidated financial statements for the fiscal year 2022 and fiscal first quarter 2023, which is previously disclosed related to noncash impairment charges on Curation Foods' avocado products business, which was sold in early February; and the filing of our amendment periodic reports for those periods; our ongoing concern determination and ongoing negotiations with our lenders; and of course, our fiscal second quarter results and an exciting update on our commercial development portfolio. Despite our efforts over the past couple of years to unlock the potential of Lifecore as a stand-alone CDMO business through the divestitures of the Curation Foods' assets, those activities have not produced the necessary capital to free Lifecore from the heavy debt burden that we face today. Our capital structure has been encumbered from several years of excess leverage and inadequate returns on capital from legacy Landec's Curation Foods segment. Yesterday, the Board announced its intention to pursue strategic alternatives to maximize value for our stockholders, which may include an evaluation of potential sale of the company, potential debt or equity financing transactions or other possible strategic transactions. We are pleased to announce that we have retained the expertise of Morgan Stanley to ensure that Lifecore is in position to capture the growth that resides within our development pipeline for the benefit of all of our stakeholders. As part of the strategic…

Thank you, Jim. For the fiscal second quarter of 2023, Lifecore segment revenues decreased 13.1% to $21.7 million, driven by a 25% decrease in our CDMO business, partially offset by a 58% increase in our hyaluronic acid (HA) raw material manufacturing or fermentation business. The decrease in our CDMO revenue was primarily due to a shift in the timing of commercial shipments to customers and lower development revenue associated with the delay in onboarding new customer development projects as well as more early-stage projects with lower initial revenues but strong runways in future periods. The increase in HA raw material manufacturing revenue was primarily due to a prior year deviation in shipment timing, which was influenced by excess channel inventory during the global pandemic's reduction in elective procedures. Lifecore segment gross profit decreased $5 million to $6.7 million for the second quarter of 2023, representing a gross margin of 30.8%, which compares to 47% in the prior year period. The gross profit decline was primarily due to an unfavorable volume variance of $1.5 million due to the year-over-year revenue decline and an unfavorable rate variance of $3.5 million due to an unfavorable mix in current year commercial products and development revenues, somewhat offset by stronger HA fermentation revenues. Lifecore segment-adjusted EBITDA was $3.1 million for the second quarter of 2023, representing an adjusted EBITDA margin of 14.3%. While we are withdrawing our fiscal 2023 outlook, due to our intention to explore a review of strategic alternatives, I want to ensure that near-term expectations are properly set. The shift in the timing of shipments to customers and the lower development revenue associated with the delay in onboarding new customers as well as more early-stage projects with lower initial revenues that we experienced in our fiscal second quarter is expected to persist…

Thank you. This concludes today's conference. You may now disconnect your lines, and have a wonderful day.