Business Segment Reporting

3 Months Ended

Aug. 29, 2021

Segment Reporting [Abstract]

Business Segment Reporting

Business Segment Reporting

The Company operates using three strategic reportable business segments, aligned with how the Chief Executive Officer, who is the chief operating decision maker (“CODM”), manages the business: the Curation Foods segment, the Lifecore segment, and the Other segment.

The Curation Foods business includes (i) four natural food brands, including Eat Smart, O Olive Oil & Vinegar, Yucatan Foods, and Cabo Fresh, (ii) BreatheWay® activities, and (iii) activity related to the Company’s previously held investment in Windset. The Curation Foods segment includes activities to market and pack specialty packaged whole and fresh-cut fruit and vegetables, the majority of which incorporate the BreatheWay specialty packaging for the retail grocery, club store and food services industry and are sold primarily under the Eat Smart brand and various private labels. The Curation Foods segment also includes sales of BreatheWay packaging to partners for fruit and vegetable products, sales of olive oils and wine vinegars under the O brand, sales of avocado products under the brands Yucatan Foods and Cabo Fresh, and activity related to the Company’s previously held investment in Windset.

The Lifecore segment sells products utilizing hyaluronan, a naturally occurring polysaccharide that is widely distributed in the extracellular matrix of connective tissues in both animals and humans, and non-HA products for medical use primarily in the Ophthalmic, Orthopedic and other markets.

The Other segment includes corporate general and administrative expenses, non-Curation Foods and non-Lifecore interest expense, interest income, and income tax expenses. Corporate overhead is allocated between segments based on actual utilization and relative size.

All of the Company's assets are located within the United States of America except for its Yucatan production facility in Mexico.

The Company’s international sales by geography are based on the billing address of the customer and were as follows:

	Three Months Ended
(In millions)	August 29, 2021		August 30, 2020
Canada	$	15.6	$	16.5
Switzerland	3.4		0.1
Ireland	0.2		0.8
Belgium	—		3.9
All Other Countries	1.8		1.6

Operations by business segment consisted of the following:

(In thousands)	Curation Foods		Lifecore		Other		Total
Three Months Ended August 29, 2021
Net sales	$	106,836	$	21,952	$	—	$	128,788
Gross profit	11,755		5,764		—		17,519
Net (loss) income	(2,128)		580		(7,929)		(9,477)
Depreciation and amortization	3,190		1,547		26		4,763
Interest income	—		20		7		27
Interest expense	1,376		—		6,541		7,917
Income tax (benefit) expense	(679)		183		(1,616)		(2,112)
Corporate overhead allocation	1,471		1,137		(2,608)		—
Three Months Ended August 30, 2020
Net sales	$	113,839	$	21,804	$	—	$	135,643
Gross profit	11,345		5,002		—		16,347
Net (loss) income	(8,271)		112		(2,841)		(11,000)
Depreciation and amortization	3,410		1,310		28		4,748
Dividend income	281		—		—		281
Interest income	—		—		8		8
Interest expense	1,376		—		1,733		3,109
Income tax (benefit) expense	(2,612)		35		(1,732)		(4,309)
Corporate overhead allocation	1,856		1,403		(3,259)		—

During the three months ended August 29, 2021 and August 30, 2020, sales to the Company’s top five customers accounted for 50% and 51% of sales, respectively. The Company’s top two customers, Costco Wholesale Corporation and Walmart Stores, Inc., from the Curation Foods segment, accounted for 15% and 17%, respectively, of revenues for the three months ended August 29, 2021, and 19% and 14%, respectively, for the three months ended August 30, 2020.