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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



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Form 10-Q

[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2001

[   ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from  to

Commission File Number 0-4136



| |                                                        | 
| | ------------------------------------------------------ | 
| | Lifecore Biomedical, Inc.                              | 
| |                                                        | 
| | (Exact name of Registrant as specified in its charter) | 

| |                                                                |  |  |  |                                  | 
| | -------------------------------------------------------------- |  |  |  | -------------------------------- | 
| | Minnesota                                                      |  |  |  | 41-0948334                       | 
| |                                                                |  |  |  |                                  | 
| | (State or other jurisdiction of
incorporation or organization) |  |  |  | (IRS EmployerIdentification No.) | 
| |                                                                |  |  |  |                                  | 
| | 3515 Lyman Boulevard
Chaska, Minnesota                         |  |  |  | 55318                            | 
| |                                                                |  |  |  |                                  | 
| | (Address of principal executive
offices)                       |  |  |  | (Zip Code)                       | 

Registrants telephone number, including area code:   952-368-4300

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.

| |     |  |   |  |    |  |  |  |  |  |  | 
| | --- |  | - |  | -- |  |  |  |  |  |  | 
| | Yes |  | X |  | No |  |  | 
| |     |  |   |  |    |  | 

The number of shares outstanding of the registrants Common Stock, $.01 per
value, as of October 22, 2001 was 12,757,633 shares.



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TABLE OF CONTENTS



|                              |                                                                                               |                                                      |  |  |  |  |  | 
|----------------------------- | --------------------------------------------------------------------------------------------- | ---------------------------------------------------- |  |  |  |  |  | 
|Part I. FINANCIAL INFORMATION
|                              | ITEM 1. FINANCIAL STATEMENTS                                                                 
|                              |                                                                                               | CONSOLIDATED CONDENSED BALANCE SHEETS               
|                              |                                                                                               | CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS     
|                              |                                                                                               | CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS     
|                              |                                                                                               | NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
|                              | ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
|                              | ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                           
|PART II  OTHER INFORMATION  
|                              | Item 6. Exhibits and Reports on Form 8-K                                                     
|SIGNATURES                   



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LIFECORE BIOMEDICAL, INC. AND SUBSIDIARIES

FORM 10-Q

INDEX

|           |         |                                                           |                                                            |  |       |    |      |  | 
|---------- | ------- | --------------------------------------------------------- | ---------------------------------------------------------- |  | ----- | -- | ---- |  | 
|           |         |                                                           |                                                            |  |       |    | Page | 
|           |         |                                                           |                                                            |  |       |    |      | 
|Part I.    |         | Financial Information                                     |                                                            |  |       |   
|           | Item 1. |                                                           | Financial Statements                                       |  |       |    |     
|           |         | Consolidated Condensed Balance Sheets at                  |                                                            |  |       |   
|           |         | September 30, 2001 and June 30, 2001                      |                                                            |  | 3     |   
|           |         | Consolidated Condensed Statements of Operations for Three |                                                            |  |       |   
|           |         | Months Ended September 30, 2001 and 2000                  |                                                            |  | 4     |   
|           |         | Consolidated Condensed Statements of Cash Flows for       |                                                            |  |       |   
|           |         | Three Months Ended September 30, 2001 and 2000            |                                                            |  | 5     |   
|           |         | Notes to Consolidated Condensed Financial Statements      |                                                            |  | 6-10  |   
|           | Item 2. |                                                           | Management's Discussion and Analysis of Results of         |  |       |    |     
|           |         | Operations and Financial Condition                        |                                                            |  | 11-13 |   
|           | Item 3. |                                                           | Quantitative and Qualitative Disclosures About Market Risk |  |       | 14 |     
|Part II.   |         | Other Information                                         |                                                            |  |       |   
|           | Item 6. |                                                           | a.    Exhibit Index                                        |  |       | 15 |     
|           |         | b.    Reports on Form 8-K                                 |                                                            |  | 15    |   
|Signatures |         |                                                           |                                                            |  |       |    | 16   | 

2



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LIFECORE BIOMEDICAL, INC. AND SUBSIDIARIES

PART I
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED CONDENSED BALANCE SHEETS

(Unaudited)

|                                     |                                             |   |               |             |   |          |            |             |  
|------------------------------------ | ------------------------------------------- | - | ------------- | ----------- | - | -------- | ---------- | ----------- | -
|                                     |                                             |   | September 30, |             |   | June 30, |           
|                                     |                                             |   | 2001          |             |   | 2001     |           
|                                     |                                             |   |               |             |   |          |           
|ASSETS                               |                                             |   |               |             |   |          |            |            
|Current assets                       |                                             |   |               |             |   |          |            |            
|                                     | Cash and cash equivalents                   |   | $             | 504,000     |   |          | $          | 2,310,000   |  
|                                     | Accounts receivable, less allowances        |   |               | 7,884,000   |   |          |            | 6,923,000   |  
|                                     | Inventories                                 |   |               | 10,245,000  |   |          |            | 8,693,000   |  
|                                     | Prepaid expenses                            |   |               | 976,000     |   |          |            | 675,000     |  
|                                     |                                             |   |               |             |   |          |           
|                                     |                                             |   | 19,609,000    |             |   |          | 18,601,000 |            
|Property, plant and equipment        |                                             |   |               |             |   |          |            |            
|                                     | Land, building and equipment                |   |               | 43,247,000  |   |          |            | 43,027,000  |  
|                                     | Less accumulated depreciation               |   |               | (15,249,000 | ) |          |            | (14,590,000 | )
|                                     |                                             |   |               |             |   |          |           
|                                     |                                             |   | 27,998,000    |             |   |          | 28,437,000 |            
|Other assets                         |                                             |   |               |             |   |          |            |            
|                                     | Goodwill                                    |   |               | 4,512,000   |   |          |            | 4,213,000   |  
|                                     | Acquired intangible assets                  |   |               | 574,000     |   |          |            | 614,000     |  
|                                     | Security deposits                           |   |               | 866,000     |   |          |            | 854,000     |  
|                                     | Inventories                                 |   |               | 7,487,000   |   |          |            | 9,368,000   |  
|                                     | Other                                       |   |               | 833,000     |   |          |            | 609,000     |  
|                                     |                                             |   |               |             |   |          |           
|                                     |                                             |   | 14,272,000    |             |   |          | 15,658,000 |            
|                                     |                                             |   |               |             |   |          |           
|                                     |                                             | $ | 61,879,000    |             |   | $        | 62,696,000 |            
|                                     |                                             |   |               |             |   |          |           
|LIABILITIES AND SHAREHOLDERS EQUITY |                                             |   |               |             |   |          |            |            
|Current Liabilities                  |                                             |   |               |             |   |          |            |            
|                                     | Current maturities of long-term obligations |   | $             | 227,000     |   |          | $          | 227,000     |  
|                                     | Accounts payable                            |   |               | 2,774,000   |   |          |            | 3,057,000   |  
|                                     | Accrued compensation                        |   |               | 975,000     |   |          |            | 796,000     |  
|                                     | Accrued expenses                            |   |               | 1,172,000   |   |          |            | 311,000     |  
|                                     |                                             |   |               |             |   |          |           
|                                     |                                             |   | 5,148,000     |             |   |          | 4,391,000  |            
|Long-term obligations                |                                             |   | 6,219,000     |             |   |          | 6,249,000  |            
|Shareholders equity                 |                                             |   | 50,512,000    |             |   |          | 52,056,000 |            
|                                     |                                             |   |               |             |   |          |           
|                                     |                                             | $ | 61,879,000    |             |   | $        | 62,696,000 |            
|                                     |                                             |   |               |             |   |          |           

See accompanying notes to consolidated condensed financial statements.

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LIFECORE BIOMEDICAL, INC. AND SUBSIDIARIES

ITEM 1. FINANCIAL STATEMENTS (continued)
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)

|                                    |                            |   |                    |            |   |      |           |            |  
|----------------------------------- | -------------------------- | - | ------------------ | ---------- | - | ---- | --------- | ---------- | -
|                                    |                            |   | Three months ended |           
|                                    |                            |   | September 30,      |           
|                                    |                            |   |                    |           
|                                    |                            |   | 2001               |            |   | 2000 |          
|                                    |                            |   |                    |            |   |      |          
|Net sales                           |                            | $ | 8,234,000          |            |   | $    | 7,896,000 |           
|Cost of goods sold                  |                            |   | 4,935,000          |            |   |      | 4,168,000 |           
|                                    |                            |   |                    |            |   |     
|Gross profit                        |                            |   | 3,299,000          |            |   |      | 3,728,000 |           
|Operating expenses                  |                            |   |                    |            |   |      |           |           
|                                    | Research and development   |   |                    | 1,636,000  |   |      |           | 942,000    |  
|                                    | Marketing and sales        |   |                    | 2,444,000  |   |      |           | 2,083,000  |  
|                                    | General and administrative |   |                    | 1,046,000  |   |      |           | 1,102,000  |  
|                                    |                            |   |                    |            |   |     
|                                    |                            |   | 5,126,000          |            |   |      | 4,127,000 |           
|                                    |                            |   |                    |            |   |     
|Loss from operations                |                            |   | (1,827,000         | )          |   |      | (399,000  | )         
|Other income (expense)              |                            |   |                    |            |   |      |           |           
|                                    | Interest income            |   |                    | 68,000     |   |      |           | 63,000     |  
|                                    | Interest expense           |   |                    | (170,000   | ) |      |           | (216,000   | )
|                                    | Other                      |   |                    | (3,000     | ) |      |           | (54,000    | )
|                                    |                            |   |                    |            |   |     
|                                    |                            |   | (105,000           | )          |   |      | (207,000  | )         
|                                    |                            |   |                    |            |   |     
|Net loss                            |                            | $ | (1,932,000         | )          |   | $    | (606,000  | )         
|                                    |                            |   |                    |            |   |     
|Net loss per common share           |                            |   |                    |            |   |      |           |           
|                                    | Basic                      |   | $                  | (.15       | ) |      | $         | (.05       | )
|                                    |                            |   |                    |            |   |     
|                                    | Diluted                    |   | $                  | (.15       | ) |      | $         | (.05       | )
|                                    |                            |   |                    |            |   |     
|Weighted average shares outstanding |                            |   |                    |            |   |      |           |           
|                                    | Basic                      |   |                    | 12,747,618 |   |      |           | 12,611,499 |  
|                                    |                            |   |                    |            |   |     
|                                    | Diluted                    |   |                    | 12,747,618 |   |      |           | 12,611,499 |  
|                                    |                            |   |                    |            |   |     

See accompanying notes to consolidated condensed financial statements.

4



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LIFECORE BIOMEDICAL, INC. AND SUBSIDIARIES

ITEM 1. FINANCIAL STATEMENTS (continued)
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

|                                                                            |                     |                                            |            |           |                    |         |           |          |            |         | 
|--------------------------------------------------------------------------- | ------------------- | ------------------------------------------ | ---------- | --------- | ------------------ | ------- | --------- | -------- | ---------- | ------- | 
|                                                                            |                     |                                            |            |           | Three months ended |        
|                                                                            |                     |                                            |            |           | September 30,      |        
|                                                                            |                     |                                            |            |           |                    |        
|                                                                            |                     |                                            |            |           | 2001               |         |           | 2000     |           
|                                                                            |                     |                                            |            |           |                    |         |           |          |           
|Cash flows from operating activities:                                       |                     |                                            |            |           |                    |         |           |         
|Net loss                                                                    |                     | $                                          | (1,932,000 | )         |                    | $       | (606,000  | )       
|Adjustments to reconcile net loss to net cash used in operating activities: |                     |                                            |            |           |                    |         |           |         
|Depreciation and amortization                                               |                     |                                            | 743,000    |           |                    |         | 788,000   |         
|Allowance for doubtful accounts                                             |                     |                                            |           |           |                    |         | 7,000     |         
|Changes
in operating assets and liabilities                                
|                                                                            | Accounts
receivable |                                            |            | (961,000  | )                  |         |           | (481,000 | )         
|                                                                            | Inventories         |                                            |            | 329,000   |                    |         |           | 525,000  |           
|                                                                            | Prepaid expenses    |                                            |            | (302,000  | )                  |         |           | (5,000   | )         
|                                                                            | Accounts payable    |                                            |            | (283,000  | )                  |         |           | (652,000 | )         
|                                                                            | Accrued liabilities |                                            |            | 1,040,000 |                    |         |           | (22,000  | )         
|                                                                            | Customers deposits |                                            |            |          |                    |         |           | (302,000 | )         
|                                                                            |                     |                                            |            |           |                    |        
|Net cash used in operating activities                                       |                     |                                            | (1,366,000 | )         |                    |         | (748,000  | )       
|Cash flows from investing activities:                                       |                     |                                            |            |           |                    |         |           |         
|                                                                            |                     | Purchases of property, plant and equipment |            |           | (220,000           | )       |           |          | (128,000   | )      
|                                                                            |                     | Purchases of investments                   |            |           |                   |         |           |          | (1,989,000 | )      
|                                                                            |                     | Maturities of investments                  |            |           |                   |         |           |          | 1,989,000  |        
|                                                                            |                     | Purchases of intangibles                   |            |           | (51,000            | )       |           |          | (7,000     | )      
|                                                                            |                     | Other                                      |            |           | (231,000           | )       |           |          | 38,000     |        
|                                                                            |                     |                                            |            |           |                    |        
|Net cash used in investing activities                                       |                     |                                            | (502,000   | )         |                    |         | (97,000   | )       
|Cash flows from financing activities:                                       |                     |                                            |            |           |                    |         |           |         
|                                                                            |                     | Payments of long-term obligations          |            |           | (30,000            | )       |           |          | (28,000    | )      
|                                                                            |                     | Proceeds from stock issuance               |            |           | 92,000             |         |           |          | 45,000     |        
|                                                                            |                     |                                            |            |           |                    |        
|Net cash provided by financing activities                                   |                     |                                            | 62,000     |           |                    |         | 17,000    |         
|                                                                            |                     |                                            |            |           |                    |        
|Net decrease in cash and cash equivalents                                   |                     |                                            | (1,806,000 | )         |                    |         | (828,000  | )       
|Cash and cash equivalents at beginning of period                            |                     |                                            | 2,310,000  |           |                    |         | 1,101,000 |         
|                                                                            |                     |                                            |            |           |                    |        
|Cash and cash equivalents at end of period                                  |                     | $                                          | 504,000    |           |                    | $       | 273,000   |         
|                                                                            |                     |                                            |            |           |                    |        
|Supplemental disclosure of cash flow information:                           |                     |                                            |            |           |                    |         |           |         
|                                                                            |                     | Cash paid during the period:               |            |           |                    |         |           |          |            |        
|                                                                            |                     |                                            | Interest   |           | $                  | 166,000 |           |          | $          | 190,000 | 

See accompanying notes to consolidated condensed financial statements.

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LIFECORE BIOMEDICAL, INC. AND SUBSIDIARIES

ITEM 1. FINANCIAL STATEMENTS (continued)
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

September 30, 2001

NOTE A  FINANCIAL INFORMATION

Lifecore Biomedical, Inc. (the Company) develops, manufactures and markets
biomaterials and medical devices for use in various surgical markets through
two divisions, the Hyaluronan Division and the Oral Restorative Division. The
Companys manufacturing facility is located in Chaska, Minnesota. The
Hyaluronan Division markets its products through OEM and contract manufacturing
alliances in the fields of gynecological surgery, ophthalmology, veterinary and
wound management. The Oral Restorative Division markets its products through
direct sales in the United States, Germany, Italy and Sweden and through 22
distributors in 35 foreign countries.

The accompanying unaudited consolidated condensed financial statements have
been prepared in accordance with Regulation S-X pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain information and
footnote disclosures normally included in financial statements prepared in
accordance with accounting principles generally accepted in the United States
of America have been condensed or omitted pursuant to such rules and
regulations, although management believes that the disclosures are adequate to
make the information presented not misleading.

In the opinion of management, the unaudited consolidated condensed financial
statements contain all adjustments (consisting of only normal recurring
adjustments) necessary to present fairly the financial position as of September
30, 2001, and the results of operations and cash flows for the three month
periods ended September 30, 2001 and 2000. The results of operations for the
three months ended September 30, 2001 are not necessarily indicative of the
results for the full year or of the results for any future periods. The
unaudited consolidated condensed balance sheet as of June 30, 2001 has been
derived from audited financial statements as of that date.

In preparation of the Companys consolidated financial statements, management
is required to make estimates and assumptions that affect reported amounts of
assets and liabilities and related revenues and expenses. Actual results could
differ from the estimates used by management.

NOTE B  INVENTORIES

Inventories are stated at the lower of cost (first-in, first-out method) or
market. Inventories not expected to be consumed within one year are classified
as a long-term asset. Finished good inventories include hyaluronan, packaged
aseptic and oral restorative products. Inventories consist of the following:

|                |  |               |            |  |          |   |            | 
|--------------- |  | ------------- | ---------- |  | -------- | - | ---------- | 
|                |  | September 30, |            |  | June 30, |  
|                |  | 2001          |            |  | 2001     |  
|                |  |               |            |  |          |  
|                |  | (Unaudited)   |           
|Raw materials   |  | $             | 3,753,000  |  |          | $ | 3,150,000  | 
|Work in process |  |               | 352,000    |  |          |   | 358,000    | 
|Finished goods  |  |               | 13,627,000 |  |          |   | 14,553,000 | 
|                |  |               |            |  |          |  
|                |  | $             | 17,732,000 |  |          | $ | 18,061,000 | 
|                |  |               |            |  |          |  

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LIFECORE BIOMEDICAL, INC. AND SUBSIDIARIES

ITEM 1. FINANCIAL STATEMENTS (continued)
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (cont.)

September 30, 2001

NOTE C  GOODWILL AND INTANGIBLE ASSETS

On July 20, 2001, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) 141, Business
Combinations, and SFAS 142, Goodwill and Other Intangible Assets. SFAS 141
is effective for all business combinations completed after June 30, 2001. SFAS
142 is effective for fiscal years beginning after December 15, 2001; however,
certain provisions of this Statement apply to goodwill and other intangible
assets acquired between July 1, 2001 and the effective date of SFAS 142.
Earlier adoption of SFAS 142 is permitted, and the Company has elected to adopt
the provisions of SFAS 142 as of July 1, 2001. Major provisions of these
Statements and their effective dates for the Company are as follows:



| |  | all business combinations initiated after June 30, 2001 must use the
purchase method of accounting. The pooling of interest method of
accounting is prohibited except for transactions initiated before July
1, 2001;                                                                                                               
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | intangible assets acquired in a business combination must be recorded
separately from goodwill if they arise from contractual or other legal
rights or are separable from the acquired entity and can be sold,
transferred, licensed, rented or exchanged, either individually or as
part of a related contract, asset or liability;
| 
| |  | goodwill, as well as intangible assets with indefinite lives, acquired
after June 30, 2001, will not be amortized. Effective July 1, 2001,
all previously recognized goodwill and intangible assets with
indefinite lives will no longer be subject to amortization;                                                                
| 
| |  | effective July 1, 2001, goodwill and intangible assets with indefinite
lives will be tested for impairment annually and whenever there is an
impairment indicated, an impairment loss will be recognized;                                                                                                                           
| 
| |  | all acquired goodwill must be assigned to reporting units for purposes
of impairment testing and segment reporting.                                                                                                                                                                                                                 

The Company adopted the provisions of SFAS 142 as of July 1, 2001. Therefore,
acquired goodwill is no longer amortized. The Company has completed a
transitional fair value based impairment test of goodwill as of July 1, 2001.
The fair value was estimated using the expected present value of future cash
flows.

The changes in the carrying amount of goodwill for the quarter ended September
30, 2001, are as follows:

|                                 |  |             |           |  
|-------------------------------- |  | ----------- | --------- | -
|                                 |  | Oral        |          
|                                 |  | Restorative |          
|                                 |  | Division    |          
|                                 |  |             |          
|Balance as of July 1, 2001       |  | $           | 4,213,000 |  
|Goodwill acquired during period  |  |             | 339,000   |  
|Impairment loss                  |  |             | (40,000   | )
|                                 |  |             |          
|Balance as of September 30, 2001 |  | $           | 4,512,000 |  
|                                 |  |             |          

The acquired goodwill during the period resulted from the acquisition of 100%
of Lifecore AB in Sweden. This acquisition is not considered material to the
financial statements as a whole and does not meet the threshold for
significant subsidiary under Regulation S-X. As a result, no historical or
proforma financial statements for the acquisition are required. The impairment
loss on previously acquired goodwill is not material to the financial
statements as a whole and, accordingly, has been included in the operating loss
for the quarter.

7



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LIFECORE BIOMEDICAL, INC. AND SUBSIDIARIES

ITEM 1. FINANCIAL STATEMENTS (continued)
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (cont.)

September 30, 2001

NOTE C  GOODWILL AND INTANGIBLE ASSETS  continued

The following table presents a reconciliation of net loss and net loss per
share amounts, as reported in the financial statements, to those amounts
adjusted for goodwill amortization determined in accordance with the provisions
of SFAS 142.

|                                 |                       |   |                     |      |   |      |          |      |  
|-------------------------------- | --------------------- | - | ------------------- | ---- | - | ---- | -------- | ---- | -
|                                 |                       |   | As of September 30, |     
|                                 |                       |   |                     |     
|                                 |                       |   | 2001                |      |   | 2000 |         
|                                 |                       |   |                     |      |   |      |         
|Reported net loss                |                       | $ | (1,932,000          | )    |   | $    | (606,000 | )   
|Add back: goodwill amortization  |                       |   |                    |      |   |      | 131,000  |     
|                                 |                       |   |                     |      |   |     
|Adjusted net loss                |                       | $ | (1,932,000          | )    |   | $    | (475,000 | )   
|                                 |                       |   |                     |      |   |     
|Basic and diluted loss per share |                       |   |                     |      |   |      |          |     
|                                 | Reported net loss     |   | $                   | (.15 | ) |      | $        | (.05 | )
|                                 | Goodwill amortization |   |                     |     |   |      |          | .01  |  
|                                 |                       |   |                     |      |   |     
|                                 | Adjusted net loss     |   | $                   | (.15 | ) |      | $        | (.04 | )
|                                 |                       |   |                     |      |   |     

Acquired intangible assets of the Company that have been determined to have a
definite life and continue to be amortized as of September 30, 2001 are as
follows:

|                            |                        |       |   |                       |           |  |                          |          |          |  
|--------------------------- | ---------------------- | ----- | - | --------------------- | --------- |  | ------------------------ | -------- | -------- | -
|                            |                        |       |   | September 30, 2001    |          
|                            |                        |       |   |                       |          
|                            |                        |       |   | Gross Carrying
Amount |           |  | Accumulated
Amortization |         
|                            |                        |       |   |                       |           |  |                          |         
|Amortized intangible assets |                        |       |   |                       |           |  |                          |         
|                            | Customer list          |       | $ | 726,000               |           |  | $                        | (363,000 | )       
|                            | Patents and trademarks |       |   | 378,000               |           |  |                          | (167,000 | )       
|                            |                        |       |   |                       |           | 
|                            |                        | Total |   | $                     | 1,104,000 |  |                          | $        | (530,000 | )
|                            |                        |       |   |                       |           | 

The aggregate amortization expense for the quarter ended September 30, 2001 was
$42,000. The estimated amortization expense for the years ended June 30, 2002
through 2006 is as follows:

|     |  |                |         | 
|---- |  | -------------- | ------- | 
|     |  | For the years  |        
|     |  | ended June 30, |        
|     |  |                |        
|2002 |  | $              | 167,000 | 
|2003 |  |                | 167,000 | 
|2004 |  |                | 130,000 | 
|2005 |  |                | 22,000  | 
|2006 |  |                | 22,000  | 

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LIFECORE BIOMEDICAL, INC. AND SUBSIDIARIES

ITEM 1. FINANCIAL STATEMENTS (continued)
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (cont.)

September 30, 2001

NOTE D  AGREEMENTS

The Company and ETHICON, INC., a Johnson & Johnson Company (ETHICON), have
entered into a Conveyance, License, Development and Supply Agreement (the
ETHICON Agreement). Under the terms of the ETHICON Agreement, ETHICON
transferred to the Company its ownership in certain technology related to
research and development previously conducted on the Companys sodium
hyaluronan material. The technology transferred to the Company includes written
technical documents related to ETHICONs research and development of a product
to inhibit the formation of postsurgical adhesions. These documents include
product specifications, methods and techniques, technology, know-how and
certain patent applications. The Company has assumed responsibility for
continuing the anti-adhesion development project including conducting human
clinical trials on GYNECARE INTERGEL Adhesion Prevention Solution. The Company
has granted ETHICON exclusive worldwide marketing rights through 2008 to the
products developed by the Company within defined fields of use.

The Company has made a significant investment in the development and testing of
GYNECARE INTERGEL Solution. The product PMA has been reviewed by the FDAs
Medical Devices Dispute Resolution Panel (MDDRP) which recommended its
approval. The Director for FDAs Center for Devices and Radiological Health
has concurred with the MDDRP recommendation and agreed that product approval
can proceed after finalization of product labeling. U.S. sales of INTERGEL
Solution are expected to commence in the third quarter of fiscal 2002.
However, there can be no assurance that this product will receive market
acceptance. Failure to achieve significant sales of the product could have a
material adverse effect on future prospects for the Companys operations.

NOTE E  LINE OF CREDIT

The Company has an agreement with a bank for a $5,000,000 line of credit. The
agreement allows for advances against eligible accounts receivable and
inventories, subject to a borrowing base certificate. Interest is accrued at
the prime rate, which was 6.0% at September 30, 2001 and 6.75% at June 30,
2001. The agreement has a maturity date of December 28, 2001. At September 30,
2001 and June 30, 2001, there were no balances outstanding under this line of
credit. The terms of the agreement require the Company to comply with various
financial covenants including minimum net worth, capital expenditure
limitations and liabilities to tangible net worth ratio. At September 30, 2001
and June 30, 2001, the Company was in compliance with all covenants.

NOTE F  NET LOSS PER SHARE

The Companys basic net loss per share amounts have been computed by dividing
net loss by the weighted average number of outstanding common shares. The
Companys diluted net income per share is computed by dividing net income by
the weighted average number of outstanding common shares and common share
equivalents relating to stock options, when dilutive. For the three months
ended September 30, 2001 and 2000 the Company reported a net loss and as such,
no common share equivalents were included in the computation of diluted net
loss per share. However, if the Company would have reported net income in the
three months ended September 30, 2001 and 2000, the common share equivalents
that would have been included in the computation of diluted net income per
share were 55,563 and 34,714, respectively.

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LIFECORE BIOMEDICAL, INC. AND SUBSIDIARIES

ITEM 1. FINANCIAL STATEMENTS (continued)
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (cont.)

September 30, 2001

NOTE F  NET LOSS PER SHARE  continued

Options to purchase 2,498,687 and 2,093,711 shares of common stock with a
weighted average exercise price of $12.65 and $14.31 were outstanding at
September 30, 2001 and 2000, respectively, but were excluded from the
computation of common share equivalents because their exercise prices were
greater than the average market price of the common shares on such dates.

NOTE G  SEGMENT INFORMATION

The Company operates two business segments. The Hyaluronan Division develops,
manufactures, and markets products containing hyaluronan. The Oral Restorative
Division develops, manufactures and/or markets various oral restorative
products to the area of implant dentistry. Currently, products containing
hyaluronan are sold primarily to customers pursuant to supply agreements.
Sales to Alcon Laboratories under such agreements were 19% of total sales in
the three months ended September 30, 2001 and 2000. The Companys Oral
Restorative Division markets products directly to clinicians and dental
laboratories in the United States, Germany, Italy and Sweden and primarily
through distributorship arrangements in other foreign locations. The
operations of the Companys subsidiaries, Lifecore Biomedical GmbH, Lifecore
Biomedical SpA, and Lifecore Biomedical AB have not been material to the
consolidated financial statements.

Segment assets and the basis of segmentation are consistent with that reported
at June 30, 2001. Segment information for sales and income (loss) from
operations are as follows:

|                              |                           |   |                             |            |   |      |           |           |  
|----------------------------- | ------------------------- | - | --------------------------- | ---------- | - | ---- | --------- | --------- | -
|                              |                           |   | Quarter ended September 30, |           
|                              |                           |   |                             |           
|                              |                           |   | 2001                        |            |   | 2000 |          
|                              |                           |   |                             |            |   |      |          
|Net sales                     |                           |   |                             |            |   |      |           |          
|                              | Hyaluronan products       |   | $                           | 3,028,000  |   |      | $         | 3,415,000 |  
|                              | Oral restorative products |   |                             | 5,206,000  |   |      |           | 4,481,000 |  
|                              |                           |   |                             |            |   |     
|                              |                           | $ | 8,234,000                   |            |   | $    | 7,896,000 |          
|                              |                           |   |                             |            |   |     
|Income (loss) from operations |                           |   |                             |            |   |      |           |          
|                              | Hyaluronan products       |   | $                           | (1,564,000 | ) |      | $         | 1,000     |  
|                              | Oral restorative products |   |                             | (263,000   | ) |      |           | (400,000  | )
|                              |                           |   |                             |            |   |     
|                              |                           | $ | (1,827,000                  | )          |   | $    | (399,000  | )        
|                              |                           |   |                             |            |   |     

NOTE H  RECLASSIFICATIONS

Certain amounts from June 30, 2001 have been reclassified to conform to the
September 30, 2001 presentation.

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LIFECORE BIOMEDICAL, INC. AND SUBSIDIARIES

ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION

Results of Operations

Three Months Ended September 30, 2001 Compared to Three Months Ended September 30, 2000

|                              |                            |          |            |           |          |                  |           |              |      |   |           |           |  |   |           |           |  |      |            |           |  |   |           |           | 
|----------------------------- | -------------------------- | -------- | ---------- | --------- | -------- | ---------------- | --------- | ------------ | ---- | - | --------- | --------- |  | - | --------- | --------- |  | ---- | ---------- | --------- |  | - | --------- | --------- | 
|                              |                            |          | Hyaluronan |           |          | Oral Restorative |           |              |      |   |           |           |  |   |          
|(Unaudited)                   |                            | Division |            |           | Division |                  |           | Consolidated |     
|                              |                            |          |            |           |          |                  |           |              |     
|                              |                            |          | 2001       |           |          | 2000             |           |              | 2001 |   |           | 2000      |  |   | 2001      |           |  | 2000 |           
|                              |                            |          |            |           |          |                  |           |              |      |   |           |           |  |   |           |           |  |      |           
|Net sales                     |                            | $        | 3,028,000  |           |          | $                | 3,415,000 |              |      | $ | 5,206,000 |           |  | $ | 4,481,000 |           |  | $    | 8,234,000  |           |  | $ | 7,896,000 |          
|Cost of goods sold            |                            |          | 2,697,000  |           |          |                  | 2,269,000 |              |      |   | 2,238,000 |           |  |   | 1,899,000 |           |  |      | 4,935,000  |           |  |   | 4,168,000 |          
|                              |                            |          |            |           |          |                  |           |              |      |   |           |           |  |   |           |           |  |     
|Gross profit                  |                            |          | 331,000    |           |          |                  | 1,146,000 |              |      |   | 2,968,000 |           |  |   | 2,582,000 |           |  |      | 3,299,000  |           |  |   | 3,728,000 |          
|Operating expenses            |                            |          |            |           |          |                  |           |              |      |   |           |           |  |   |           |           |  |      |            |           |  |   |           |          
|                              | Research and development   |          |            | 1,433,000 |          |                  |           | 699,000      |      |   |           | 203,000   |  |   |           | 243,000   |  |      |            | 1,636,000 |  |   |           | 942,000   | 
|                              | Marketing and sales        |          |            | 62,000    |          |                  |           | 42,000       |      |   |           | 2,382,000 |  |   |           | 2,041,000 |  |      |            | 2,444,000 |  |   |           | 2,083,000 | 
|                              | General and administrative |          |            | 400,000   |          |                  |           | 404,000      |      |   |           | 646,000   |  |   |           | 698,000   |  |      |            | 1,046,000 |  |   |           | 1,102,000 | 
|                              |                            |          |            |           |          |                  |           |              |      |   |           |           |  |   |           |           |  |     
|                              |                            |          | 1,895,000  |           |          |                  | 1,145,000 |              |      |   | 3,231,000 |           |  |   | 2,982,000 |           |  |      | 5,126,000  |           |  |   | 4,127,000 |          
|                              |                            |          |            |           |          |                  |           |              |      |   |           |           |  |   |           |           |  |     
|Income (loss) from operations |                            | $        | (1,564,000 | )         |          | $                | 1,000     |              |      | $ | (263,000  | )         |  | $ | (400,000  | )         |  | $    | (1,827,000 | )         |  | $ | (399,000  | )        
|                              |                            |          |            |           |          |                  |           |              |      |   |           |           |  |   |           |           |  |     

Net sales for the quarter ended September 30, 2001 increased $338,000 or 4% as
compared to the same quarter of last fiscal year. Hyaluronan product sales for
the current quarter decreased $387,000 as compared to the same quarter of last
fiscal year. The sales decrease was from lower ophthalmic and veterinary
revenues in the current year. The year ago quarter included sales to Bausch &
Lomb under a supply agreement that ended in December 2000. When sales to
Bausch & Lomb are removed from the year ago quarter, Hyaluronan Division sales
increased 3%. Oral restorative product sales for the current quarter increased
16% compared to the same quarter of last fiscal year. International oral
restorative sales increased 28% over the year ago quarter, while domestic oral
restorative sales increased 10% over the year ago quarter. The international
sales increase was mainly from increased penetration and market growth.

Consolidated gross margin decreased to 40% for the current quarter from 47% for
the same quarter of last fiscal year. The gross margin for the Hyaluronan
Division decreased to 11% from 34% due to unused capacity costs associated with
decreased hyaluronan production. That production has been slowed due to
unexpected delays in the FDA review process of GYNECARE INTERGEL Solution for
U.S. distribution. The gross margins in the Hyaluronan Division are expected to
be negatively impacted until production efficiencies can be gained from
GYNECARE INTERGEL Solution. The gross margin for the Oral Restorative Division
decreased to 57% for the current quarter from 58% for the same quarter of last
fiscal year. The decrease is a result of the mix of international versus
domestic product sales in the current quarter compared to last fiscal year.

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LIFECORE BIOMEDICAL, INC. AND SUBSIDIARIES

ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION (cont.)

Research and development expenses increased $694,000 or 74% for the current
quarter as compared to the same quarter of last fiscal year. The increase
resulted from the additional costs associated with the PMA process for GYNECARE
INTERGEL Solution. Expenses for the PMA process will continue through the
second quarter of fiscal 2002.

Marketing and sales expenses increased $361,000 or 17% for the current quarter
as compared to the same quarter of last fiscal year due to the expansion of
domestic sales personnel and costs associated with international expansion.

General and administrative expenses decreased $56,000 or 5% principally from an
accounting change for SFAS 142  Goodwill and Other Intangible Assets as
certain items classified as goodwill will no longer be amortized. The result
of this accounting change in the current quarter was a decrease of $131,000 in
amortization expense.

Liquidity and Capital Resources

The Companys Annual Report on Form 10-K for the year ended June 30, 2001
contains a detailed discussion of Lifecores liquidity and capital resources.
In conjunction with this Quarterly Report on Form 10-Q, investors should read
the 2001 Form 10-K.

While the Company had positive cash flow from operations in fiscal 2001 and
2000, the Company had a significant operating cash flow deficit in fiscal 1999.
As the Hyaluronan Divisions production levels increase, its related production
efficiencies will increase. However, charges for unused capacity associated
with the Companys hyaluronan production have negatively impacted operating
results in the current quarter, as well as in fiscal 2001 and 2000. These
charges are a result of an unanticipated delay in receiving GYNECARE INTERGEL
Solution marketing approval in the U.S. from the FDA. The Company expects that
its Hyaluronan Division gross margins will continue to be negatively impacted
until marketing approval for GYNECARE INTERGEL Solution is achieved and
production levels increase. Also, marketing and sales expenses for the oral
restorative products are expected to continue at a high level, and personnel
costs have increased.

The loan agreement between the Company and the holder of the industrial
development revenue bonds issued to finance the Companys Chaska, Minnesota
facility was amended in May 2001 to waive the fixed charge coverage ratio and
the cash flow coverage ratio through June 30, 2002. With respect to certain of
these covenants, the Company may be required to obtain further waivers for
fiscal 2003. There can be no assurance that future waivers will be granted to
the Company.

The Company has an agreement with a bank for a $5,000,000 line of credit. The
agreement allows for advances against eligible accounts receivable and
inventories, subject to a borrowing base certificate. Interest is accrued at
the prime rate, which was 6.0% at September 30, 2001 and 6.75% at June 30,
2001. At September 30, 2001 and June 30, 2001, there were no balances
outstanding under this line of credit. The terms of the agreement require the
Company to comply with various financial covenants including minimum net worth,
capital expenditure limitations and liabilities to tangible net worth ratio.
At September 30, 2001 and June 30, 2001, the Company was in compliance with all
covenants. The agreement has a maturity date of December 28, 2001. The
Company expects to renew the agreement on similar terms.

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LIFECORE BIOMEDICAL, INC. AND SUBSIDIARIES

ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION (cont.)

The Companys ability to generate positive cash flow from operations and
achieve profitability is dependent upon the continued expansion of revenue from
its hyaluronan and oral restorative businesses. Growth in the Hyaluronan
Division is unpredictable due to the complex governmental regulatory
environment for new medical products and the early stage of certain of these
markets. Similarly, expansion of the Companys Oral Restorative Division sales
is also dependent upon increased revenue from new and existing customers, as
well as successfully competing in a more mature market. The Company expects
its cash generated from anticipated operations and the availability of the line
of credit to satisfy cash flow needs in the near term. No assurance can be
given that the Company will maintain positive cash flow from operations. While
the Companys capital resources appear adequate today, the Company may seek
additional financing in the future. If additional financing is necessary, no
assurance can be given that such financing will be available and, if available,
will be on terms favorable to the Company and its shareholders.

Cautionary Statement

Certain statements in this Form 10-Q are forward-looking statements as defined
in the Private Securities Litigation Reform Act of 1995. Such forward-looking
statements which include continued financial improvement, adequate cash flow,
the successful market acceptance of GYNECARE INTERGEL Solution in the U.S., the
reduction of research and development expenses related to the GYNECARE INTERGEL
Solution PMA process, the negative impact on Hyaluronan Division margins from
the unused capacity, the successful renewal of the bank line of credit, are
subject to change. These statements are subject to certain risks and
uncertainties that could cause actual results to differ materially from
historical results and those presently anticipated or projected. Investors are
referred to a more detailed discussion of those risks presented in Managements
Discussion and Analysis of Financial Condition and Results of Operations
section in the Companys Annual Report on Form 10-K for the year ended June 30,
2001.

GYNECARE INTERGEL Adhesion Prevention Solution, GYNECARE, AND ETHICON, INC. are
registered trademarks of ETHICON, INC.

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LIFECORE BIOMEDICAL, INC. AND SUBSIDIARIES

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company invests its excess cash in money market mutual funds and highly
rated corporate debt securities. All investments are held-to-maturity. The
market risk on such investments is minimal.

Receivables from sales to foreign customers are denominated in U.S. Dollars.
Transactions at the Companys foreign subsidiaries are denominated in Euro
dollars at Lifecore Biomedical SpA and Lifecore Biomedical GmbH and are
denominated in Swedish Krona at Lifecore Biomedical AB. The Company has
historically had minimal exposure to changes in foreign currency exchange
rates, and as such, has not used derivative financial instruments to manage
foreign currency fluctuation risk.

The Companys outstanding long-term debt carries interest at a fixed rate.
There is no material market risk relating to the Companys long-term debt.

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LIFECORE BIOMEDICAL, INC. AND SUBSIDIARIES

PART II  OTHER INFORMATION




Item 6.   Exhibits and Reports on Form 8-K



| | a. |  | Exhibits and Exhibit Index
| | -- |  | --------------------------



| | 3.1 |  | Restated Articles of Incorporation, as amended
(incorporated by reference to Exhibit 19(a) to Amendment No. 1 on
Form 8, dated July 13, 1988, to Form 10-Q for the quarter ended
December 31, 1987), as amended by Amendment No. 2, (incorporated
by reference to Exhibit 3.1 to Form 10-K for the year ended June
30, 1997)
| | --- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | 3.2 |  | Amended Bylaws, (incorporated by reference to Exhibit
3.2 to Form 10-K/A for the year ended June 30, 1995)                                                                                                                                                                                                                  
|
| | 3.3 |  | Form of Rights Agreement, dated as of May 23, 1996,
between the Company and Norwest Bank Minnesota, National
Association (incorporated by reference to Exhibit 1 to the
Companys Form 8-A Registration Statement dated May 31, 1996)                                                                                       
|
| | 4.1 |  | Form of Common Stock Certificate (incorporated by
reference to Exhibit 4.1 to 1987 S-2 Registration Statement [File
No. 33-12970])                                                                                                                                                                                          



| | b. |  | Reports on Form 8-K
| | -- |  | -------------------

None

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LIFECORE BIOMEDICAL, INC. AND SUBSIDIARIES

PART II  OTHER INFORMATION




SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



| | LIFECORE BIOMEDICAL, INC.
| | -------------------------

|       |                  |                         |  |                                                                       
|------ | ---------------- | ----------------------- |  | ----------------------------------------------------------------------
|Dated: | November 2, 2001 | /s/ James W. Bracke    
|       |                  |                        
|       |                  |                         |  | James W. Bracke                                                       
|       |                  |                         |  | President & Chief Executive Officer                                   
|       |                  |                        
|Dated: | November 2, 2001 | /s/ Dennis J. Allingham
|       |                  |                        
|       |                  |                         |  | Dennis J. Allingham
Executive Vice President
& Chief Financial Officer
|       |                  |                         |  | (Principal Financial Officer)                                         

16