Business Segment Reporting

12 Months Ended

May 29, 2022

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 Lifecore segment, the Curation Foods segment, and the Other segment.

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 Curation Foods business includes (i) three natural food brands, including O Olive Oil & Vinegar, Yucatan Foods, and Cabo Fresh and (ii) BreatheWay® activities. The Curation Foods segment includes sales of BreatheWay packaging to partners for fruit and vegetable products, sales of olive oils and wine vinegars under the O brand, and sales of avocado products under the brands Yucatan Foods and Cabo Fresh. In December 2021, the Company completed the Eat Smart Disposition. As a result, the Company met the requirements of ASC 205-20 to report the results of the Eat Smart business as discontinued operations. The operating results for the Eat Smart business, in all periods presented, have been reclassified to discontinued operations and are no longer reported in the Curation Foods business segment. See Note 1 – Organization, Basis of Presentation, and Summary of Significant Accounting Policies – Eat Smart Sale and Discontinued Operations for further discussion.

The Other segment includes corporate general and administrative expenses, non-Lifecore and non-Curation Foods 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 following table presents our property and equipment, net by geographic region (in millions):

	Year Ended
Property and equipment, net	May 29, 2022		May 30, 2021
United States	$	115.0	$	105.3
Mexico	15.4		15.0
Total property and equipment, net	$	130.4	$	120.3

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

	Year Ended
	May 29, 2022		May 30, 2021		May 31, 2020
Switzerland	$	16.8	$	4.7	$	1.7
Canada	$	12.6	$	10.7	$	9.7
Czech Republic	$	3.5	$	3.5	$	1.4
United Kingdom	$	2.9	$	1.9	$	1.1
Ireland	$	2.2	$	2.0	$	4.0
Belgium	$	—	$	13.7	$	13.8
All Other Countries	$	2.0	$	1.9	$	2.2

Operations by segment consisted of the following (in thousands):

Year Ended May 29, 2022	Lifecore		Curation Foods		Other		Total
Product sales	$	109,320	$	76,466	$	—	$	185,786
Gross profit	43,746		6,624		—		50,370
Net income (loss) from continuing operations	16,675		(30,429)		(32,522)		(46,276)
Loss from discontinued operations, net of tax	—		(48,114)		(3,041)		(51,155)
Identifiable assets	213,969		76,948		4,243		295,160
Depreciation and amortization	6,673		4,004		80		10,757
Capital expenditures	23,552		2,674		—		26,226
Interest income	72		—		9		81
Interest expense, net	—		(299)		(17,058)		(17,357)
Income tax (benefit) expense	5,266		(13,831)		2,726		(5,839)
Corporate overhead allocation	4,484		1,092		(5,576)		—
Year Ended May 30, 2021
Product sales	$	98,087	$	73,459	$	—	$	171,546
Gross profit	38,265		12,206		—		50,471
Net income (loss) from continuing operations	14,461		(357)		(23,673)		(9,569)
Loss from discontinued operations, net of tax	—		(23,096)		—		(23,096)
Identifiable assets	185,417		121,069		4,680		311,166
Depreciation and amortization	5,502		2,972		97		8,571
Capital expenditures	16,222		3,042		—		19,264
Interest income	—		—		48		48
Interest expense, net	—		(545)		(9,842)		(10,387)
Income tax (benefit) expense	4,568		(3,020)		(3,451)		(1,903)
Corporate overhead allocation	4,773		946		(5,719)		—
Year Ended May 31, 2020
Product sales	$	85,833	$	74,233	$	—	$	160,066
Gross profit	32,883		6,504		—		39,387
Net income (loss) from continuing operations	11,749		(17,728)		(15,892)		(21,871)
Loss from discontinued operations, net of tax	—		(16,320)		—		(16,320)
Identifiable assets	165,461		117,427		10,613		293,501
Depreciation and amortization	5,008		3,282		96		8,386
Capital expenditures	10,612		1,472		130		12,214
Interest income	—		6		66		72
Interest expense, net	—		(547)		(4,099)		(4,646)
Income tax (benefit) expense	3,346		(8,686)		(3,434)		(8,774)
Corporate overhead allocation	4,190		868		(5,058)		—