Landec Corporation (Nasdaq: LNDC) announced today that its wholly owned subsidiary, Apio, Inc., will be divesting the packing and cold storage assets of its fruit division, located in Reedley, California. The company is actively seeking a buyer and anticipates closing the sale in early to mid calendar 2001.

"This transaction will enable the company to make more strategic use of our capital and human resources, especially during our summer peak season," noted Gary Steele, president and chief executive officer of Landec. "We will be developing strategic alliances with major growers to support our ongoing fruit sales and marketing programs," he added.

Apio, Inc.'s fruit division markets tree fruit, pears, apples and grapes under the Eat Smart(TM) brand. The company also introduced a new Flavor Safari(TM) fruit program this summer for pluots®, white flesh peaches and nectarines, and sub acid yellow peaches. These marketing programs will continue in the future.

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 that 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.

Except for the historical information contained herein, the matters discussed in this news release are forward-looking statements that involve certain risks and uncertainties that could cause actual results to differ materially, including such factors among others, as the integration of Apio, the timing and expenses associated with expanding operations, the uncertainty related to the integration of other new business acquisitions, the amount and timing of research and development funding and license fees from the company's collaborative partners, the timing of regulatory approvals and new product introductions, the mix between pilot production of new products and full-scale manufacturing of existing products, the mix between domestic and international sales, and the risk factors listed in the company's Form 10-K for the 1999 fiscal year. (See item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations.) As a result of these and other factors, the company expects to continue to experience significant fluctuations in quarterly operating results, and there can be no assurance that the company will become or remain consistently profitable.